Cowen v Queensland Building and Construction Commission [2017] QCAT 416

CITATION: Cowen & Anor v Queensland Building and Construction Commission & Anor [2017] QCAT 416 PARTIES: Peter Cowen Jan Cowen (Applicants) v Queensland Building and Construction Commission (First Respondent) Hinterland Constructions Pty Ltd (Second Respondent) APPLICATION NUMBER: GAR044-15; GAR113-16 MATTER TYPE: General administrative review matters HEARING DATES: GAR044-15: 8, 9 February 2016; 4, 5 May 2016; 14 September 2016 GAR044-15 and GAR113-16: 13, 14, 15, 16, 17, 21, 22, 23 February 2017 HEARD AT: Brisbane DECISION OF: A/Senior Member Browne DELIVERED ON: 27 November 2017 DELIVERED AT: Brisbane ORDERS MADE: In GAR044-15: 1. The decision made by the Queensland Building and Construction Commission of 22 December 2014 to decline a claim for non-completion under clause 1.2 of the Insurance Policy Conditions is set aside. 2. The Tribunal substitutes its own decision that Peter Cowen and Jan Cowen did validly terminate the contract dated 18 February 2013 and the claim for non- completion under clause 1.2 of the Insurance Policy Conditions is accepted. -- 1 of 64 -- 2 In GAR113-16: 1. The decision made by the Queensland Building and Construction Commission of 14 February 2017 not to issue a direction to rectify to Hinterland Constructions Pty Ltd for items 1(b), 1(c), 1(d), 3, 4(a), 4(d), 4(e), 5, 7, 8, 10, 14, 17, 18(a), 18(b), 18(c), 18(e), 21, 23(a), 25, 26, 27, 28 and 31 referred to in the Scott Schedule (identified as ‘Exhibit 24’ in these proceedings) is confirmed. 2. The decision made by the Queensland Building and Construction Commission of 14 February 2017 not to issue a direction to rectify to Hinterland Constructions Pty Ltd for items 1(a), 1(e), 1(f), 1(g), 2, 4(b), 4(c), 12, 13, 15, 16, 18(d), 23(b) and 23(c) referred to in the Scott Schedule (identified as ‘Exhibit 24’ in these proceedings) is set aside. 3. The Tribunal substitutes its own decision that: a) For items 1(a), 1(e), 1(f), 1(g), 2, 12, 13, 23(b) and 23(c) referred to in the Scott Schedule (identified as ‘Exhibit 24’ in these proceedings) the matter be returned to the QBCC for reconsideration pursuant to s24(1)(c) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld); b) For items 4(b) and 4(c), 15, 16 and 18(d) referred to in the Scott Schedule (identified as ‘Exhibit 24’ in these proceedings) a direction to rectify should not be issued to Hinterland Constructions Pty Ltd. CATCHWORDS: PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE – RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – HOME WARRANTY INSURANCE – where decision made to decline a claim for non-completion under clause 1.2 of the QBCC Home Warranty -- 2 of 64 -- 3 Insurance Scheme Policy Conditions – where homeowner filed an application to review the decision – whether contract properly terminated by the homeowner PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE – RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – where decision made not to issue a direction to rectify to the builder – where homeowner filed an application to review the decision – whether items of work are defective work – whether fair to give a direction to rectify Queensland Building and Construction Commission Act 1991 (Qld), s 3, s 20J, s 72, Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20, s 24 Botros v Freedom Homes Pty Ltd [2000] 2 Qd R 377 Briginshaw v Briginshaw (1938) 60 CLR 336 Garbutt-Cuttiford v Queensland Building Services Authority [1999] QBT 80 Hudson Crushed Metals Pty Ltd v Henry [1985] 1 Qd R 202 Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 Shevill v Builders Licensing Board (1982) 149 CLR 620 Sunbird Plaza Pty Ltd v Maloney (1989) 166 CLR 245 Taouk v Queensland Building Services Authority, [2013] QCAT 508 Thunder Corp Pty Ltd v Queensland Building Services Authority [2011] QCAT 56 REPRESENTATIVES: APPLICANT: Peter Cowen and Jan Cowen represented by Mr P Summers of legal counsel, instructed by Bennett & Philip Lawyers RESPONDENTS: Queensland Building and Construction Commission represented by Mr S Formby, -- 3 of 64 -- 4 former in-house legal counsel on 8, 9 February 2016; 4, 5 May 2016; 14 September 2016 and on 13, 14, 15, 16, 17, 21, 22, 23 February 2017 represented by Mr C Tanzer, Solicitor of Gadens Lawyers Hinterland Constructions Pty Ltd represented by Mr Chris Freeman, Director of Hinterland Constructions Pty Ltd REASONS FOR DECISION [2] Peter Cowen and Jan Cowen decided to renovate their house and garage at Highgate Hill. One of the reasons for extending the garage was to house Mr Cowen’s motor vehicles. [3] The Cowens signed a contract with Hinterland Construction Pty Ltd (the Builder) to complete the renovations. The contract was signed on 18 February 2013, but work did not commence until January 2014. [4] There was a dispute during the completion of the works. The Cowens sought to terminate the contract with the Builder. The Cowens’ legal representatives sent a final termination of contract letter dated 13 November 2014. The notice of intention to terminate was dated 28 October 2014. [5] The Builder took steps on 1 October 2014 to suspend the building works because of alleged interference by the Cowens with workplace health and safety procedures. [6] The Cowens made complaints to the Queensland Building and Construction Commission (the QBCC) about the building work performed by the Builder on 21 November 2014. [7] The QBCC inspected the building work. [8] The QBCC responded to the Cowens’ complaints by making two decisions. On 22 December 2014, the QBCC made a decision to disallow the Cowens’ claim under the statutory insurance scheme pursuant to clause 1.2 of the Insurance Policy Conditions because the contract had not been properly terminated.1 [9] The Cowens sought to review that decision by way of an internal review. Pursuant to s 86C(3) of the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act) the decision in the internal review was taken to be the same as the original decision dated 22 1 Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act), Part 5 and see s 20J(f). -- 4 of 64 -- 5 December 2014. The Cowens then filed an application to review that decision in the Tribunal (proceeding GAR044-15). [10] On 27 April 2015, the QBCC issued a direction to rectify to the Builder but subsequently withdrew it. The QBCC did not issue any further direction. The Cowens commenced review proceedings (GAR113-16) to review the QBCC’s decision not to issue a direction to rectify. During the hearing a decision was made by the QBCC not to issue a direction to rectify, by consent that decision became the reviewable decision for the purposes of the review proceeding (GAR113-16).2 [11] Application GAR044-15 proceeded before the Tribunal over four days. On the fifth day of the hearing, the application was adjourned by consent and directions made that application GAR044-15 (part heard) proceed to a further four day hearing together with application GAR113-16.3 [12] On 23 February 2017 directions were made for the parties to file and exchange written closing submissions in relation to the proceedings.4 [13] All of the parties agree that the reviewable decision before the Tribunal in application GAR044-15 is the QBCC’s decision to disallow the claim under the home owners insurance scheme. This requires the Tribunal to answer the question as to whether the Cowens lawfully terminated the contract.5 [14] All of the parties agree that the question to be determined by the Tribunal in application GAR113-16 is whether there is defective and/or incomplete work performed by the Builder; and if there is defective work, whether in all of the circumstances a direction to rectify should be issued.6 [15] All of the parties rely on expert evidence and their own evidence. The expert witnesses participated in an experts conclave and gave concurrent evidence in the hearing.7 [16] So that all of the parties and expert witnesses could properly identify the issues, the Cowens prepared a schedule of items (the Scott Schedule) identifying work alleged to be defective and/or incomplete. It is non- contentious that the Scott Schedule for the purposes of reviewing the decisions in GAR044-15 and GAR113-16 captures items that formed part 2 Tribunal Decision dated 15 February 2017. 3 Direction by consent dated 14 September 2016. See Directions dated 23 February 2017 and 9 May 2017 for the filing and exchange of submissions. 4 See Directions dated 23 February 2017, 9 May 2017 and 20 June 2017. The applicants’ outline of submissions were filed on 7 April 2017, the QBCC’s written submissions were filed on 12 May 2017, the Builder’s written submissions were filed on 1 June 2017, the applicants’ written submissions in reply were filed on 16 June 2017 and the QBCC’s submissions in response to the applicants’ submissions were filed on 3 July 2017. 5 See agreed background prepared for the purpose of the experts conclave, Exhibit 22 and 23. 6 Ibid. 7 See Tribunal Directions dated 13 February 2017. -- 5 of 64 -- 6 of the Cowens initial complaint to the QBCC and that the QBCC has had an opportunity to inspect the items and to make a decision about them.8 What is the Tribunal’s power on review and the issues to be determined? [17] This is a review of the QBCC’s decisions not to accept a claim under the statutory insurance scheme and not to issue a direction to the Builder to rectify building work. The Tribunal in exercising its review function effectively stands in the shoes of the QBCC decision-maker exercising the same powers under the QBCC Act, to produce the correct and preferable decision.9 [18] The Tribunal decides the review by way of a fresh hearing on the merits. It is not necessary to establish any error in either the process or the reasoning that led to the decision and there is no presumption that the reviewable decision is correct.10 [19] In arriving at the correct and preferable decision, the Tribunal considers all of the material including the material that was before the decision-maker (commonly referred to as the ‘section 21 material’) and fresh material presented by the parties comprising of expert reports and statements of evidence.11 [20] In the review proceeding, the QBCC, as the respondent decision-maker has a duty to assist the Tribunal so that it can make its decision and has a model litigant role.12 This includes cross-examining the Cowens, the Builder and each of their respective witnesses giving evidence in the proceeding. The respondent decision-maker must also ensure that all material relied upon in making the decision being reviewed has been disclosed. [21] In assessing the evidence, the Tribunal on review must be satisfied to the required civil standard on the balance of probabilities that certain factual matters are proven. In Briginshaw’s case, (commonly referred to as the ‘Briginshaw principle’,13) Dixon J (as he then was) said that the proof of any fact must be made out to the reasonable satisfaction of the Tribunal and should not be ‘produced by inexact proofs, indefinite testimony, or indirect inferences’.14 [22] In conducting a proceeding, the Tribunal on review is not bound by the rules of evidence,15 but must observe the rules of natural justice and, amongst 8 Tribunal Directions dated 13 February 2017. 9 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act), s 20. 10 Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58, [9]. 11 The decision-maker must file a written statement of the reasons and any material relevant to the review pursuant to s 21(2) of the QCAT Act (the section 21 material). 12 QCAT Act, s 21. 13 Briginshaw v Briginshaw (1938) 60 CLR 336 at 361 to 362. 14 Ibid. 15 Section 28(b) of the QCAT Act provides that the rules of evidence do not apply other than to the extent that the tribunal adopts them. -- 6 of 64 -- 7 others, ‘ensure, so far as is practicable, all relevant material is disclosed to the tribunal to enable it to decide the proceeding with all the relevant facts.’16 [23] In GAR113-16, the QBCC exercised its powers under the QBCC Act to not direct the Builder to rectify defective or incomplete work.17 Relevantly s 72 of the QBCC Act gives the QBCC and the Tribunal on review the power to issue a direction to rectify to the Builder if satisfied that the building work is ‘defective or incomplete’; or ‘consequential damage has been caused by, or as a consequence of, carrying out building work’.18 [24] The power to direct under s 72 of the QBCC Act is discretionary and the QBCC and the Tribunal on review, may issue a direction after taking into consideration all of the circumstances it considers are reasonably relevant, including the terms of the contract. The QBCC and Tribunal on review is not required to give a direction if satisfied that, in the circumstances, ‘it would be unfair to the person to give the direction’.19 [25] In Taouk v Queensland Building Services Authority20 the Tribunal said that the QBCC (then known as the QBSA) has responsibilities under the relevant legislation, the QBCC Act, to ‘ensure proper standards in the industry and rectification of building work’.21 The power to issue a direction to rectify is not for the ‘benefit’ of the homeowner but rather a discharge of the QBCC’s responsibilities under the Act.22 [26] In making a decision under the QBCC Act, the QBCC (and the Tribunal on review) is required to, amongst other things, achieve a reasonable balance between the interests of building contractors and consumers and to provide remedies for defective building work.23 [27] Part 5 of the QBCC Act is also relevant in this matter because a decision was made in GAR044-15 to decline the Cowens’ claim for non-completion. Part 5 of the Act establishes a statutory insurance scheme called the Queensland Home Warranty Scheme (the statutory insurance scheme). Claims made under the statutory insurance scheme may be approved by the QBCC subject to the Insurance Policy Conditions.24 A decision to disallow a claim under the scheme wholly or in part is a reviewable decision.25 16 QCAT Act, s 28. 17 QBCC Act, s 72. 18 Ibid, s 72. 19 QBCC Act, s 72(5). 20 [2013] QCAT 508. 21 Taouk v Queensland Building Services Authority, [2013] QCAT 508, [39]; citing Garbutt- Cuttiford v Queensland Building Services Authority [1999] QBT 80. 22 Ibid. 23 QBCC Act, s 3. 24 Ibid, s 3, s 10, s 19 and s 70(1). See also the Queensland Building and Construction Commission Regulation 2003, s 34A and the Insurance Policy Conditions Edition 8, 1 July 2009. 25 QBCC Act, s 86(1)(h). -- 7 of 64 -- 8 [28] Relevantly clause 1.2 of the policy for payment for non-completion of work provides as follows: 1.2 Termination of contract The QBCC is only liable to pay for loss under this Part when the contract is for a fixed price and the insured has properly terminated the contract with the contractor. [29] Part 11 of the policy refers to ‘properly terminated’ and provides that: “properly terminated” means lawfully under the contract or otherwise at law, upon the contractor’s default which extends to, but is not limited to: (a) The cancellation or suspension of the contractor’s licence; or (b) The death or legal incapacity of the contractor; or (c) The insolvency of the contractor; or (d) Any breach of the contract by the contractor. [30] A payment by the QBCC under the insurance scheme has potential ramifications for a Builder to whom a direction to rectify has been issued. This is because under s 71 of the QBCC Act the QBCC ‘may recover’ the amount of the payment ‘as a debt’ from the building contractor by whom the relevant residential construction work ‘was, or was to be, carried out,’ or any other person through ‘whose fault’ the claim arose.26 [31] In reviewing the decision to refuse the Cowens’ claim for non-completion and considering clause 1.2 of the Insurance Policy Conditions, the Tribunal must look at all of the evidence and the terms of the contract signed by the parties. The Tribunal must determine whether the Cowens have lawfully terminated under the contract or otherwise at law. [32] In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited27 the High Court said that there are two relevant circumstances in which a breach of contract by one party may entitle the other to terminate. Firstly, where the obligation with which there has been a failure to comply has been agreed by the contracting parties to be essential. The High Court said this is sometimes described as a condition. Secondly, where there has been a sufficiently serious breach of a non-essential term.28 [33] There is good authority for the proposition that, as a matter of law, a contract may be validly terminated by relying upon any valid ground at the time of termination, even though the ground was not relied upon and even though the ground actually relied upon is later found to be not valid.29 26 QBCC Act, s 71(1). 27 (2007) 233 CLR 115. 28 Ibid, 136-137, [47]-[49]. 29 Sunbird Plaza Pty Ltd v Maloney (1989) 166 CLR 245 at [26]; citing Shepherd v Felt &Textiles of Australia Ltd (1931) 45 CLR 359. -- 8 of 64 -- 9 [34] In the High Court decision of Shepherd v Felt & Textiles of Australia Ltd30 Dixon J said [footnotes emitted]: …But the rule is of general application in the discharge of contract by breach, and enables a party to any simple contract who fails or refuses further to observe its stipulations to rely upon a breach of conditions, committed before he so failed or so refused, by the opposite party to the contract as operating to absolve him from the contract as from the time of such breach of condition whether he was aware of it or not when he himself failed or refused to perform the stipulations of the contract. “It is a long established rule of law that a contracting party, who, after he has become entitled to refuse performance of his contractual obligations, gives a wrong reason for his refusal, does not thereby deprive himself of a justification which in fact existed, whether he was aware of it or not”... 31 [35] It is settled law that if there is conduct by one party which evinces an unwillingness or an inability to render substantial performance of the contract, such conduct may be described as repudiatory breach of contract. An innocent party is entitled to accept the repudiation and terminate the contract.32 [36] In Koompahtoo’s case the High Court said that repudiatory conduct may be described as conduct of a party which ‘evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations’.33 The High Court said the test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. In Koompahtoo’s case the High Court said there may be cases where a failure to perform, even if not a breach of an essential term, manifests unwillingness or inability to perform.34 [37] The common law right to terminate for repudiatory conduct may involve a consideration of more than one breach that, when viewed together, indicate an intention to no longer be bound by the contract.35 What are the competing submissions to be considered by the Tribunal on review? [38] The Cowens contend that they have properly terminated the contract with the Builder by issuing a notice pursuant to clause 20.1 of the contract. In their correspondence to the Builder dated 13 November 2014 (containing 30 Shepherd v Felt &Textiles of Australia Ltd (1931) 45 CLR 359. 31 Ibid, 377-378. 32 Shevill v Builders Licensing Board (1982) 149 CLR 620, 625-626. 33 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115, 44. 34 Ibid. 35 Hudson Crushed Metals Pty Ltd v Henry [1985] 1 Qd R 202, 205-208. -- 9 of 64 -- 10 the termination notice), the Cowens also contend that there is a clear repudiation of the contract (by the Builder) which they accepted.36 [39] In closing written submissions, the refer to, amongst other things, the Builder’s suspension of the works on 2 November 2014 with no proper basis, a failure to carry out the works in a workman-like and diligent manner; and a failure to carry out the works in accordance with the contract.37 The Cowens also contend that the works were at such a delayed stage that they would not be completed for four to six months after they were to be brought to practical completion.38 The Cowens say that such a delay is of a kind that frustrated the commercial purpose of the contract and as such constituted repudiation.39 [40] The QBCC disputes that the contract has been properly terminated by the Cowens. At the hearing, Mr Simon Formby for the QBCC, in his duty to assist the Tribunal, outlined the relevant issues to be determined by the Tribunal on review. Mr Formby submits that if the Tribunal finds the suspension of the work by the Builder was unlawful then that would be a ground to terminate.40 Mr Formby says however that in having regard to clause 20.2 of the contract, it is unreasonable to terminate in the circumstances. Mr Formby also contends that the notice of intention to terminate was not validly issued and, as at 1 October 2014, the Cowens have attempted to unilaterally impose conditions into the contract which is a form of repudiation.41 [41] In closing written submissions, the QBCC submits that the Cowens’ notice of intention to terminate issued on 28 October 2014 (‘the October notice’) is invalid and cannot be relied upon by the Cowens for the purposes of clause 20.1 of the contract.42 The QBCC contends that the notice was not unequivocal.43 The QBCC also contends that by giving the October notice on 28 October 2014 the Cowens repudiated the contract.44 The QBCC says that the Cowens were not permitted to terminate the contract pursuant to clause 20.3 of the contract.45 The QBCC says that the Cowens’ insistence upon compliance with terms which do not appear in the contract as a pre- requisite for the Cowens’ future involvement in the contract, the Cowens have evinced a clear intention to fulfil the contract ‘only in a manner substantially inconsistent with the [Applicants’] obligations’.46 36 Section 21 material, exhibit 2, p 201. 37 The Cowens’ outline of submissions filed on 7 April 2017. 38 Ibid. 39 Ibid, p 38. 40 Transcript dated 8 February 2016, T1-45. 41 Ibid, T1-47. 42 First respondent’s (the QBCC) submissions on the hearing filed on 12 May 2017. 43 Ibid, p 16. See Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2012] VSC 99 at 395. 44 QBCC’s submissions filed on 12 May 2017 and the QBCC’s submissions in response filed on 3 July 2017. 45 QBCC’s submissions on the hearing filed on 12 May 2017. 46 Ibid, p 20. -- 10 of 64 -- 11 [42] The QBCC says that even if the Builder is found to have repudiated the contract by its conduct, the subsequent repudiation by the Cowens prevented them from validly terminating as they purported to do.47 The QBCC says that in the event that neither party was able to lawfully terminate the contract for the others breach, both parties by their conduct treated the contract as being at an end after 13 November 2014 and the contract was therefore abandoned.48 The QBCC submits that the Cowens claim for non- completion must therefore be declined.49 [43] The Builder also disputes that the contract has been properly terminated by the Cowens. At the hearing, Mr Christopher Freeman representing the Builder argued, amongst other things, that Mr Cowen regularly walked onto site unauthorised and wearing inappropriate gear, talked to contractors and otherwise interfered with the performance of the works.50 Mr Freeman contends that the contract was unlawfully terminated by the Cowens and that the Builder has done everything reasonably expected to be done in relation to the terms of the contract. [44] In closing written submissions the Builder contends that the purported termination by the Cowens on 13 November 2014 was illegal.51 The Builder says that the Cowens were in breach of the contract on several occasions and refers to, amongst other things, a failure to deposit the security deposit into the bank, a failure to sign variations, a failure to wear appropriate clothing when on the construction site; and various delays. The Builder says that any ‘supposed defects have not been proven to be defects’, were not brought up at a time when they were completing the work and that there is unfinished work at the time the dispute arose.52 [45] In this matter, I am required to consider many issues. In determining whether or not the Cowens have properly terminated the contract (in GAR044-15), I must make findings about the conduct of the contracting parties and alleged interference with the performance of the works by the Builder and the Cowens. This includes, amongst other things, a consideration as to whether the Builder placed boarding over the doors and windows in accordance with its obligations as principal contractor under the contract; whether or not Mr Cowen interfered with the performance of the works; and whether or not there was non-compliance with the contract. [46] In determining the issues about whether or not a direction to rectify should issue (in proceeding GAR113-16), the Tribunal must make findings about certain items of work performed by the Builder including whether or not the work is defective or incomplete, after considering all of the evidence including the expert evidence. The relevant items of work are identified in 47 QBCC’s submissions on the hearing filed on 12 May 2017, p 20. 48 Ibid, p 25. 49 Ibid. 50 Ibid, T1-67. 51 Second respondent’s (the Builder) outline of submissions filed on 1 June 2017. 52 Ibid, p 11. -- 11 of 64 -- 12 the Scott Schedule and all of the parties have given evidence about the items. Did the Builder place boarding over the doors and windows in accordance with its contractual obligations? [47] It is common ground that the Builder placed boarding over windows and doors on the upstairs verandah of the Cowens’ property on or about 27 September 2014. The Cowens were not home when this happened and did not see the boarding until they returned from interstate on 29 September 2014. [48] Mr Cowen states in his statement that the Builder boarded up access to areas of their residence ‘making it virtually uninhabitable’.53 Mr Cowen states that upon their return to Brisbane he and his wife were unable to access many parts of the house and had to ‘climb up a ladder to retrieve items from [their] verandah on the riverside’.54 Mr Cowen states that this was because of the ‘inappropriate’ boarding up of doors.55 Mr Cowen also states that the boarding was ‘nowhere near any intended construction’ and left windows and an adjacent door ‘vulnerable’ and unprotected.56 Mr Cowen also states that the Builder had fixed substantial steel posts and beams ‘swaying in the breeze, secured by just a couple of nut threads due to all the fixing posts being cut far too short’.57 [49] Mr Freeman gave oral evidence at the hearing about the placement of boarding over the doors and windows. Although Mr Freeman was the Builder responsible for the works performed at the Cowens’ property, he was not the primary representative for the Builder in terms of the negotiations that took place between the contracting parties. Mr Freeman in giving his oral evidence stated that Stephen Reid was responsible for the design stage of the work.58 Mr Freeman stated that Hugh Findlay was the company’s in-house draftsman and communications between the Cowens and the Builder were generally with either Mr Reid or Mr Findlay.59 Mr Freeman in giving his oral evidence stated that he was fairly involved in the project and was kept informed of issues by the construction manager, Mark Kocks.60 The supervisor of the work was Alex Mizanowski.61 [50] It is Mr Freeman’s oral evidence that the boarding was placed up ‘partially for safety’ and to protect the doors and windows.62 In giving his oral evidence, Mr Freeman referred to roof rafters coming down near particular 53 Exhibit 4, [193] to [197]. 54 Ibid. 55 Ibid. 56 Ibid. 57 Ibid. 58 Transcript dated 15 February 2017, T1-23. 59 Ibid. 60 Ibid. 61 Ibid. 62 Ibid, T1-81. -- 12 of 64 -- 13 doors that were boarded up. Mr Freeman also stated that an area for tools and equipment is needed. Mr Freeman stated: …you can’t have a work area and just work in that particular area and have everything drop down on top of you. You need an exposed area where you’ve got an area for tools and equipment, for Acrow propos, materials like that. All those materials present a danger and it would also have opened up to an open, unsecure, balcony.63 [51] Mr Freeman stated that the Builder is responsible for workplace health and safety and it is the Builder’s choice where they put protection. Mr Freeman stated: And we were responsible for workplace health and safety, no one else is. It is a Builder’s choice where we put protection and how we do it. At the end of the day, with a litigious client like Cowen, you can just imagine what would happen if he got injured; my God.64 [52] Mr Freeman also stated that it (referring to safety) affects the company’s insurance and obligations to insurance companies.65 [53] Mr Freeman was cross-examined about the boarding with reference to specific locations on site where construction was to take place. Mr Freeman maintained his evidence that boarding was placed over the doors and windows to protect the property and to stop people getting into the construction site.66 I accept Mr Freeman’s evidence given in relation to the placement of boarding over the doors and windows. [54] I have considered all of the evidence relevant to the boarding issue. The contract signed by the Cowens and the Builder provides that the Builder (as principal contractor) has obligations under the Workplace Health and Safety Act 1995 to, amongst other things, ‘ensure the safety’ of persons on the construction site.67 [55] The evidence shows that the Cowens were not happy with the boarding and sent emails to the Builder about their concerns.68 The Builder also sent emails to the Cowens about the boarding. In the emails sent by the Builder, the Builder refers to ‘Health and safety’ requirements and the prevention of damage to existing doors.69 I have accepted Mr Freeman’s evidence given in relation to the placement of boarding over the doors and windows. 63 Transcript dated 15 February 2017, T1-82. 64 Ibid, T1-83. 65 Ibid. 66 Transcript dated 8 February 2016, T1-86. 67 Exhibit 4, p 25, clause 11.12. 68 See exhibit 2, pp 179 to 184. 69 Ibid. -- 13 of 64 -- 14 [56] It is open to me to find that the Builder placed boarding over the doors and windows for safety and protection in accordance with its obligations as principal contractor under the contract. Did the Cowens interfere with the performance of the works and workplace health and safety – the requests for the ‘SWMS’ and to remove the boarding? [57] The Builder contends that the Cowens interfered with the performance of works and workplace health and safety.70 In written submissions, the Builder submits that the Cowens kept interfering with the works and breached safety rules.71 The Builder says ‘[f]or safety’s sake a suspension of works had to be instigated and [the Cowens] were advised of this and the reason for it’.72 [58] The Builder says that a suspension of works was necessary predominantly on the basis that the Cowens interefered with workplace health and safety. The Cowens contend that they sent an email to the Builder stating that they would allow the boarding to remain. [59] The relevant evidence about the boarding contained in the emails exchanged between the Builder and the Cowens is set out below:  On 30 September 2014 at 9:57 am, Hugh Findlay emailed Mr Cowen responding to his ‘phone enquiry about construction hoarding over the doors to the verandah and patio (upstairs and downstairs)’. The email referred to ‘Health and Safety’ requirements and prevention of damage to existing glass doors ‘before any demolition or construction occurs’. The email also referred to the general conditions of the contract: part 6 and part 10 and stated as follows: It’s the Builders responsibility to secure the construction site to meet all the statutory requirements. The hoarding will have to stay until the construction is finished or until the Builder determines that it is safe to do so under his obligations.73  On 1 October 2014 at 7:56 am, Hugh Findlay emailed Mr Cowen stating that he is concerned ‘at the level of stress’ that the Cowens are having at this stage of the work. Mr Findlay (in the email) invited the Cowens to have a discussion with him about the demolition and list of items to drop from the contract.74 The email stated: …there will be more disruption with demolition of the existing verandah/walls/roof etc. Have sent through a list of items to drop from the contract for consideration…and if you want to come up to go through that list with you please let me know. There are some time 70 The Builder’s written submissions filed on 1 June 2017. 71 Ibid, p 2. 72 Ibid, p 2. 73 Exhibit 2, p 184. 74 Ibid, p 182. -- 14 of 64 -- 15 constraints on these items which we could go through and discuss along with other issue[s] you want to raise…75  On 1 October 2014 at 11:20 am, Mr Cowen emailed Hugh Findlay requesting that the boarding be removed ‘immediately’. Mr Cowen also stated that they (the Cowens) have contacted the relevant Government authorities including the certifier (QBCC) and ‘WH&S officer (Dept. of Justice and Attorney- General)’. Mr Cowen stated ‘[y]our recent actions are in direct contravention of the requirements of the WH&S Act…’. Mr Cowen stated ‘[p]lease provide us with a copy of the relevant ‘SWMS’ [safe work and management system document] asap?’. Mr Cowen also stated that the boarding up of doors etc was ‘another act of blatant vindictiveness’. Relevant extracts from the email are as follows: I refer to my request per phone at 9:10 yesterday morning that you remove the complete boarding up of our bedroom doors, fanlight windows, lounge doors and fanlight windows (on the river side) immediately… … …it is obvious the sole reason for the complete boarding up of our bedroom doors, fanlight windows, lounge doors and fanlight windows (on the river side) is another act of blatant vindictiveness against us because we had the audacity to complain about being bullied and tricked into payments outside of the contract. We therefore request (yet again) that you remove the boarding up of our bedroom doors, fanlight windows, lounge doors and fanlight windows (on the river side) immediately…76  On 1 October 2014 at 11:53 am, Mr Cowen emailed Hugh Findlay referring to ‘threats and acts of blatant vindictiveness’ and stated ‘yes’ they (the threats and acts) have ‘certainly taken their toll’. Mr Cowen stated that Mrs Cowen was ‘out currently investigating houses available (at considerable expense) to relocate to on a short-term lease’.77 Relevant extracts from the email are as follows: …We guess Mark, Chris and Steve must be feeling particularly proud of themselves with their latest attempts to upset us, finally almost succeeding in driving us out of our own house! Yes, we are fearful of what ‘stunt’ you have planned for us next. 78  By email dated 1 October 2014 at 2:06 pm, Chris Freeman emailed Mr Cowen referring to the emails sent to Mr Findlay regarding the safety hoardings. Relevant extracts from the email are as follows: 75 Exhibit 2. 76 Ibid, p 183. 77 Ibid. 78 Ibid, p 182. -- 15 of 64 -- 16 We note your emails sent to Hugh [Findlay] today regarding the safety hoardings placed on your house. We advise that tomorrow morning we will have carpenters on site to remove these plywood sheets. The site is then declared unsafe by us, as we are the ones ultimately responsible for site safety. It is impossible for us to continue work without safety precautions being in place. As such we are immediately placing an indefinite suspension on works as of today until all matters are fully and finally resolved. It is clear that you have little understanding of building and construction and you have put endless obstacles in the way of us getting on and doing the job. With a renovation you must expect that there are going to be inconveniences, we are not sure how you would deal with it when the walls are removed and roof taken of [sic]. We would advise you to be very circumspect in any written and oral statements you make about this company. 79  By email dated 1 October 2014 at 4:40 pm, Mr Cowen emailed Chris Freeman and stated ‘your actions are clearly based on blatant vindictiveness against us rather than any claimed safety issue’. Mr Cowen also stated at the end of the email, ‘PS. We are still waiting [sic] you to provide copies of the engineer’s certifications to date’. Relevant extracts from the email are as follows: …we will allow your complete boarding up of our bedroom doors, fanlight windows, lounge doors and fanlight windows (on the river side) to remain, pending further advice after receiving a copy of the relevant ‘SWMS’, which you have previously been requested to provide asap. …This is the first time in our lives we have had such unpleasant and costly bad experiences with a Builder. We have not put obstacles in the way. Indeed, we have done all that we possibly could for over a year now to get this job started and finished. I gather your last sentence is another threat to cause us even more upset etc if we complain to the QBCC? We are certainly fearful that Mark Kocks will carry out some of his boasts about some of the very vindictive things he’s done to clients he didn’t like…80  On 2 October 2014 at approximately 7:00am, two employees of the Builder attended the site.  By email dated 2 October 2014 at 8:28 am, Chris Freeman emailed Mr Cowen referring to his instructions that were given to carpenters to remove the boarding. Mr Freeman stated that Mr Cowen’s email sent at 4:51 pm was ‘outside our advertised business hours’. Mr Freeman referred to Mr Cowen having broken site rules by entering the construction site and conversing directly with tradesmen. Mr Freeman also stated that Mr Cowen has ‘verbally 79 Exhibit 2, p 181. 80 Ibid, p 180. -- 16 of 64 -- 17 threatened them and got right up in their face’. Mr Freeman stated that Mr Cowen ‘ordered them off the site’ and that he (Mr Freeman) requested his employees and sub-contractors to leave the site. Mr Freeman referred to Mr Cowen’s ‘erratic behaviour’ and time ‘wasted’ due to Mr Cowen’s ‘ill- informed statements’ and ‘constant threats and time wasting legal communications’. Mr Freeman stated that ‘work is immediately suspended until every issue is fully and finally resolved’. Mr Freeman referred to Mr Cowen’s ‘unreasonable behaviour and obstruction in us doing our work’. Some of the relevant extracts from the email are as follows: …Your constant to and fro attitude to what can and can’t be done according to you makes the entire job a nightmare beyond belief. Everyone who has been involved with this project are stunned by your behaviour and several trades have refused to return to your site because of your actions. We are taking advice on what our next step should be due to the fact that you are making the completion of our work virtually impossible. Our last sentences was a written warning [sic] you be very careful about statements you make about our company. Already we have copies of numerous written statements you have made to use that we considered defamatory and blatant re-writing of history. The warning is that we will be watching and listening to anything you say to anyone and should they be considered defamatory appropriate action will be taken. 81 [60] Mr Cowen and Mr Freeman gave evidence about the boarding and the emails exchanged between them including the requests made by the Cowens to the Builder to remove the boarding. [61] Mr Freeman, in his statement, states that Mr Cowen was ‘in a rage on the phone and would not listen to reason’.82 Mr Freeman states that Mr Cowen ‘demanded immediate removal of the offending hoardings’.83 Mr Freeman states: We clearly advised that should we do this we cannot possibly proceed with the work and would have to place an indefinite suspension on works. We had no option other than to suspend the works due to insufficient safety being provided, clear in the knowledge that should anything happen to the owners wellbeing or to their existing property that Cowen, being of a litigious nature, would obviously take action against us along with us being prosecuted and fined by Workplace Health and Safety. Cowen notes that the timber boards “prevented us from accessing our house”. The reality is that they did not at all, they only prevented him accessing the “construction site” which he is specifically not permitted to be in at any time. Due to the extreme behaviour of Cowen we immediately arranged that night for two of our carpenters to go to the site first thing the next morning to remove the hoardings.84 81 Exhibit 2, p 179. 82 Exhibit 32, [70]. 83 Ibid. 84 Exhibit 32, [70]. -- 17 of 64 -- 18 [62] Mr Freeman states that Mr Cowen was going to do everything possible to ‘frustrate our moving forward and completing the job’.85 Mr Freeman states that when they sent the carpenters to take down the boarding (on 2 October 2014) ‘[Mr Cowen] approached them and basically told them to get off his site’. Mr Freeman states that the carpenters rang ‘us’ and ‘we’ (meaning the Builder) told them (meaning the carpenters) to leave. Mr Freeman states: Knowing [Mr Cowen’s] previous violent outbursts we did not want our carpenters put in a position of risk of physical attack. At this stage it was clear to us that things had got to a stage where he [Mr Cowen] did not want us there and we did not want to be there. We made every effort to get this project completed and no matter what we did he [Mr Cowen] was never happy. This is the first time we have ever encountered such erratic and paranoia behaviour in over ten years of building. We truly felt at this stage that Cowen had some serious mental illness, be it paranoia or bipolar. This was not an insult but it was the only conclusion we could come to for such irrational and bizarre behaviour. It was clear that being able to carry on with the works was going to be impossible to complete.86 [63] Mr Freeman also states that the Cowens’ actions have ‘made the site unsafe’ and that there is an ‘indefinite suspension on the job’.87 Mr Freeman states that it was made clear by Mr Cowen that even if they completed the job that Mr Cowen was ‘going to take legal action…’.88 [64] It is Mr Freeman’s evidence that the Builder entered into the contract in good faith and refers to delays attributed to by the Cowens’ planned overseas trip, a long and protracted dispute and legal battle between the Cowens and their neighbour and access through the neighbouring property.89 Mr Freeman refers to Mr Cowen as being a ‘litigious person’ and that the delays and interference all started when money seemed to become an issue.90 [65] Mr Freeman’s evidence is that the Builder had ‘every intention of finishing the job’ and refers to Mr Cowen putting ‘one obstacle after another in our way’.91 Mr Freeman refers to legal threats with ‘ridiculous claims’, Mr Cowen using ‘every building organisation’ he could to attempt to get his way, Mr Cowen’s ‘erratic and violent tendencies’, issues with neighbours and attempts made by the Builder to compromise that were ‘abused or ignored’.92 Mr Freeman states that when Mr Cowen compromised safety on site ‘it was the last straw and we just could not carry on’.93 Mr Freeman states: 85 Exhibit 32, [71]. 86 Ibid, [71]. 87 Ibid, [73]. 88 Ibid. 89 Ibid, [75]. 90 Ibid, [76] to [78]. 91 Ibid, [79] to [80]. 92 Exhibit 32. 93 Ibid. -- 18 of 64 -- 19 We had every intention of finishing the job or we would not have taken it on in the first place. The most difficult and involved part of the works was completed and he [Mr Cowen] was happy with it but then he continued to put one obstacle after another in our way, threaten us legally with ridiculous claims and use every building organisation he could to attempt to get his way. [His] erratic and violent tendencies, issues with neighbours and police all combined to make this an impossible job to complete. Every attempt we made to compromise or move forward was abused or ignored. Finally, when he compromised safety on site it was the last straw and we just could not carry on. This job has wasted so much of our time and efforts and interfered with our many other projects which are all on target and mostly completed as this job could have been.94 [66] Mr Cowen’s evidence is that he sent an email dated 1 October 2014 indicating that the boarding could remain.95 Mr Cowen was cross-examined at the hearing about the emails exchanged with the Builder on 1 October 2014 including the email sent by the Builder referring to the placement of an indefinite suspension on the works as at 1 October 2014. Mr Cowen’s evidence in relation to the Builder’s email suspending the works is that he was ‘quite sort of shocked and horrified’. Mr Cowen was questioned about what he wanted to see happen in going forward in the context of having received the Builder’s email dated 1 October 2014. Mr Cowen said ‘we wanted to get things fixed up as soon as possible and get things back on track’.96 The relevant extracts from the transcript is as follows: Question: …what was your personal reaction to receiving this document? Mr Cowen: I was quite sort of shocked and horrified. We were in the midst of negotiating for the door suppliers and things like that. I wouldn’t have actually received it, I think, until later that day, probably more like 4 o’clock. The fact that they said that they were immediately placing an indefinite suspension was a concern. I looked…up the contract and thought, well, what are the issues we have to deal with, and it wasn’t very clear. I think it was clear that they’re not supposed to do it by email. They’re supposed to do it by mail or fax or something, or by hand. I think at that stage I would have – I think I probably drafted a reply and sent it off and… … Questions: …So after receiving this email and having that initial reaction which you’ve just described, what was your principal or what was your concerns, or what did you want to see happen in going forward from here? What did you want to achieve, I guess is… Mr Cowen: We…wanted to get things fixed up as soon as possible and get things back on track. 94 Exhibit 32, [79] to [80]. 95 Exhibit 4, [204]. 96 Transcript dated 5 May 2016, T4-115. -- 19 of 64 -- 20 Question: And when you say get things fixed up as soon as possible and get things back on track, what things are you talking about? Mr Cowen: Well, they…immediately placed a suspension on the works…we wanted to get that immediate suspension taken off. Question: Yes. Okay. And how did you think you might achieve that goal? Mr Cowen: By email…by…contacting them as soon as possible and saying, you know, if…this is really upsetting you, you can leave them there...97 [67] Mr Cowen was cross-examined at some length about his evidence. When questioned about the emails sent by him on 1 October 2014 to the Builder and the highlighting (in red and black) of certain words in relation to the removal of the boarding, Mr Cowen maintained his evidence. Mr Cowen said that he ‘requested’ (not demanded) the removal of boarding. Mr Cowen said that he sends emails ‘all over the world’ with multiple colours.98 Mr Cowen said during cross-examination that during the telephone conversation with Mr Findlay (on 30 September 2014) he ‘requested’ that the boards come down.99 [68] Mr Cowen was cross-examined at some length about his request for the Builder to provide a copy of the safe work and management system (the SWMS) referred to in his email to the Builder dated 1 October 2014. Mr Cowen was questioned about where in the contract it says that he can get a copy of the relevant SWMS. Mr Cowen said that a representative from Occupational Health and Safety Queensland told him to ask for the document. Mr Cowen said that he was referred to Occupational Health and Safety Queensland by a representative from the QBCC.100 Mr Cowen said: …when we first complained to him [Lewis Hayes from the QBCC] back in July about the way we were being treated. When I told him about the boarding up, he referred me to Occupational Health and Safety, Queensland. Now, the people at Occupational Health and Safety, Queensland they’ve obviously told me to – to ask for an SWMS, whatever that is. I think it’s something to do with scaffolding has to be erected before you can taken down a verandah railing. So I guess what Occupational Health and Safety, Queensland were trying to say to me, they need to have this, whatever it is, SWMS before they can actually restrict the verandah railings, so I was basically indirectly following QBCC’s own advice, and they were the one to tell…101 [69] Mr Cowen said that he rang up Workplace Health and Safety (WH&S) and they had never heard of ‘anyone’ boarding up all of the windows in the house referring to them (meaning WH&S) as being in ‘disbelief’.102 Mr 97 Transcript dated 5 May 2016, T4-114 to T4-115. 98 Transcript dated 8 February 2016, T1-88. 99 Ibid, T1-85, L43-47 to T1-86. 100 Ibid, T1-89. 101 Transcript dated 8 February 2016, T1-89, L15-24. 102 Ibid, T1-91 to T1-92. -- 20 of 64 -- 21 Cowen maintained his evidence during cross-examination that he requested a copy of the SWMS be provided by the Builder because ‘that’s what [he] was told to ask for’.103 Mr Cowen said that he believed he was ‘probably’ entitled to know what was ‘going [on] with workplace health and safety’ and referred to the contract and his obligation to provide signage under Part A and item 1.03.104 Relevantly, Schedule Part A of the contract and item 1.03 provides as follows: All hoardings, signs and scaffolding provision are the responsibility of the Contractor unless listed below: The Owner is responsible for providing the following: All signage required under Builders OH&S obligations. 105 [70] I accept Mr Cowen’s evidence given in relation to his requests to the Builder to provide a copy of the SWMS contained in his email dated 1 October 2014. I accept Mr Cowen’s evidence that he was told by a representative from workplace health and safety to request the SWMS document be provided by the Builder. I also accept Mr Cowen’s evidence and that he believed he was entitled to know about workplace health and safety issues because of his obligation under the contract to provide signage in relation to ‘OH&S’ as provided in the contract. [71] I also accept Mr Cowen’s oral evidence given in relation to his email dated 1 October 2014 sent at 4:40pm to the Builder. It is Mr Cowen’s evidence that by sending the email he would allow the boarding to remain.106 Mr Cowen’s evidence given during re-examination is that (by sending the email on 1 October 2014 at 4:40pm) he wanted to the get the suspension taken off. Mr Cowen said that the words used in his email ‘pending further advice…’, were not intended to be ‘conditional’.107 Mr Cowen said: …when I said pending- if I wanted to say conditional, I would have said conditional. At the time, I wrote this, I wouldn’t have exactly known what was going to be in the SWMS. My main purpose was to basically get on with the job, but make sure we complied with the law. I guess that’s the main purpose of this…108 [72] During re-examination, Mr Cowen was asked to clarify his evidence about his use of the words ‘pending’ in his email to Mr Freeman. Mr Cowen said that the intention was that the boards would remain unless there was some reason that they had to come down and said ‘because the SWMS didn’t require them there, or whatever’.109 103 Transcript dated 8 February 2016, T1-94. 104 Ibid T1-97 and see exhibit 4, p 37. 105 Exhibit 4, p 37. 106 Transcript dated 9 February 2016, T2-98. 107 Transcript dated 5 May 2016, T4-116 to T4-117. 108 Ibid, T4-125 to T4-126. 109 Transcript dated 5 May 2016, T4-126. -- 21 of 64 -- 22 [73] I am not satisfied to the required standard based on the evidence before me that the Cowens interfered with workplace site safety and/or the performance of the works by requesting verbally and/or in writing that the boarding be removed by the Builder. [74] I have accepted Mr Cowen’s evidence given about his requests made to the Builder to provide a copy of the SWMS and that he (Mr Cowen) was entitled to know about workplace health and safety issues because of his contractual obligation to provide signage in relation to occupational health and safety as provided in the contract. I have also accepted Mr Cowens’ evidence given in relation to the email sent by him on 1 October 2014 at 4:40pm to the Builder that (as provided in the email) he would allow the boarding to remain. [75] It is open to me to find that the Cowens in sending the email dated 1 October 2014 at 4:40pm were not acting outside the scope of the contract and were not interfering with workplace health and safety, as contended by the Builder. Did the Cowens interfere with the performance of the works and workplace health and safety – entering the construction site and speaking to contractors? [76] I have considered the contentions made by the Builder about Mr Cowen’s conduct during the performance of the work and at the site on 2 October 2014. [77] In written submissions, the Builder contends that work site safety is solely the responsibility of the Builder and the Cowens interfered with the work and breached safety rules on an ongoing manner contrary to and in breach of the contract.110 The Builder contends that ‘for safety’s sake’ a suspension of the works had to be instigated and the Cowens were advised of this and the reason for it.111 [78] It is non-contentious that two employees (referred to as the carpenters) attended the site on 2 October 2014 at approximately 7:00am to remove the boarding. Mr Freeman’s evidence, set out in these reasons at [59] above, is that on 2 October 2014 Mr Cowen ‘approached [the carpenters] and basically told them to get off his site’.112 Mr Freeman states that no matter what the Builder did, Mr Cowen was going to do everything possible to ‘frustrate our moving forward and completing the job’.113 [79] Mr Freeman in representing the Builder relies on the evidence of Alex Mizanowski, Carpenter and Mark Kocks, Construction Manager in relation to the conduct of Mr Cowen on 2 October 2014 and otherwise during the performance of the works. Mr Freeman also relies on photographs that he 110 The Builder’s written submissions filed on 1 June 2017, p 2. 111 Ibid. 112 Exhibit 32, [71]. 113 Ibid, [71]. -- 22 of 64 -- 23 says show Mr Cowen on the building site wearing inappropriate footwear and an email dated 10 July 2014.114 Mr Freeman says that the email dated 10 July 2014 states that (in effect) Mr Cowen entering the construction site in ‘open toed shoes’ is unacceptable.115 [80] Mr Mizanowski’s evidence contained in his statement is that Mr Cowen would ‘frequently walk onto the work site unauthorised’ wearing sandals and no proper personal protection equipment or appropriate gear.116 In relation to what took place on 2 October 2014, Mr Mizanowski states that he and ‘Jarrod’ (a first year apprentice) went to the site at approximately 7:00am to remove all of the safety boardings. Mr Mizanowski states that Mr Cowen came out ‘very disturbed and angry’ and was talking in a ‘threatening manner as though we were going to be in some real trouble’.117 Mr Mizanowski states that Mr Cowen was ‘very confronting’ and ‘we felt very uncomfortable’ and states that Mr Cowen ‘started saying that we could take certain ones off but not others’.118 Mr Mizanowski states that Mr Cowen ‘became very threatening and mentioned his son was a “very big burly bloke” one we wouldn’t want to piss off and that he would be staying in the house’. Mr Mizanowski states that Mr Cowen ‘demanded we stop working’. Mr Mizanowski rang Mr Freeman explaining what had happened and Mr Freeman told them to leave.119 [81] Mr Mizanowski was cross-examined at the hearing about his statement. After carefully considering Mr Mizanowski’s oral evidence, I am not satisfied to the required standard that Mr Cowen frequently walked onto the work site unauthorised and was threatening towards Mr Mizanowski and another employee on 2 October 2014. [82] During cross-examination, Mr Mizanowski said that he did have occasion to tell Mr Cowen to leave the site because he was not wearing proper protective clothing but could not recall when.120 In relation to what took place on 2 October 2014, Mr Mizanowski said that he was instructed to ‘remove everything’ by the Builder.121 It is Mr Mizanowski’s evidence that none of the boarding was removed.122 Mr Mizanowski said the they started to remove the boarding from downstairs and stated that ‘Mr Cowen came out and stopped us’.123 Mr Mizanowski refers in his statement to Mr Cowen being ‘very confronting’ but when questioned at the hearing acknowledged that he shook Mr Cowen’s hand before he left the site.124 114 See exhibits 33 (attachment 20) and 37. 115 Exhibit 4, p 247. 116 Exhibit 50. 117 Ibid. 118 Exhibit 50. 119 Ibid. 120 Transcript dated 22 February 2017, T7-14. 121 Ibid, T7-16. 122 Ibid, T7-20. 123 Ibid, T7-20. 124 Ibid. -- 23 of 64 -- 24 [83] Mr Mizanowski was questioned about whether Mr Cowen ordered him off site on 2 October 2014. Mr Mizanowski said: He didn’t exactly – well, from what I’ve – well, he didn’t exactly order us to get off site, but he came across very aggressive and very irritated and said why – why this and why that and I basically told him that we were just – we were instructed to – we were just following instructions. It just seemed to me like he was taking it out on us and asking if I was a Builder or [indistinct] sort of felt a bit threatened at the time. You know, it was the way he came across and sort of questioning the things we were saying…so I called [Chris Freeman] and just basically asked him where do we go from here. I told him about the situation and he said it’s best if we just packed our stuff and left or avoid any more – any more dramas.125 [84] Mr Mizanowski said that Jarrod (the first year apprentice) calmed Mr Cowen down and said that he shook Mr Cowen’s hand and said that Mr Cowen ‘just sort of walked in peace or whatever. Just so we didn’t leave on bad terms’.126 Mr Mizanowski said: Well, in the meantime, while I was on the phone to Mr Freeman, Jarrod our first year apprentice was trying to talk to him and sort of calm him down and explain to him that we were just doing our job and don’t take it out on us sort of thing. Like, I believe he shook his hand and then I think before I left I’m like, “Look, I’m sorry about, you know, being – you were upset [indistinct], if there’s been any misunderstanding or disagreement”. Then I believe I shook his hand and he just – just sort of walked in peace or whatever. Just we we didn’t leave on bad terms.127 [85] Mr Kocks’ evidence is contained in diary entries attached to his statement.128 Mr Kocks’ diary entries refer to work completed at the site and observations made by him about Mr Cowen on site. Mr Kocks refers to Mr Cowen walking onto the construction site wearing a pair of thongs despite the health and safety regulations and warnings from the Builder. Mr Kocks also refers to Mr Cowen disrupting the contractors from working. Some of the diary entries made by Mr Kocks are as follows: [On 29 January 2014] HGH [Highgate Hill] still removing existing block wall [and] removing rubbish from site. Peter Cowen is still just walking onto the construction site at any time he feels like it [and] only wearing a pair of thongs, despite the health [and] safety regulations and warnings from us. 125 Transcript dated 22 February 2017, T7-26. 126 Ibid, T7-27. 127 Ibid, T7-27. 128 Exhibit 48. -- 24 of 64 -- 25 He [Mr Cowen] is also disrupting all the contractors [and] stopping them from doing their job effectively because of his storries [sic] that he feels he has to share with everyone. … [On 12 September 2014] Pouring concrete at HGH. Of course Peter [Cowen] was up to his same old tricks telling us it was all wrong. Hugh [Finlay] had to drive up from the office to calm him down… [On 1 October 2014] Didn’t work crook with bronchitis. … Mr Cowen was up to his same tricks saying we had no right to board off his windows. That man is insane they are there for his own safety. [On 2 October 2014] Alex [and] Jarrod at HGH to take down the safety boarding that Mr Cowen insisted [and] demanded to be taken down for the last 2 days. …But when Alex [and] Jarrod arrived on site Mr Cowen immediately came out abusing [and] threatening them both [and] kicked them off the job saying they had no right being there. Unbelievable… I still didn’t work, crook with bronchitis.129 [86] Mr Kocks was cross-examined at the hearing about his diary entries contained in his statement. After carefully considering Mr Kock’s oral evidence, I am not satisfied to the required standard that Mr Cowen frequently walked on to the work site unauthorised and was threatening towards Mr Mizanowski and another employee on 2 October 2014. Mr Kocks accepted during cross-examination that he did not witness the events alleged to have taken place with Mr Cowen on 1 and 2 October 2014 because he was off work sick.130 Mr Kocks accepted when questioned that his diary entry on 1 October 2014 reflects what he was told from the workers on the site.131 Mr Kocks accepted when questioned about his diary entry on 2 October 2014 that he did not hear or observe any of Mr Cowen’s conduct on site because he was not there in person.132 [87] In relation to Mr Cowen walking onto the site, Mr Kocks referred to this happening ‘practically every day’ but accepted that he was not on site every day.133 During cross-examination by the QBCC, Mr Kocks said that he did 129 Exhibit 48. 130 Transcript dated 21 February 2017, T86. 131 Ibid. 132 Transcript dated 21 February 2017, T88. 133 Ibid, T96. -- 25 of 64 -- 26 not make a diary note of every day of the job.134 In relation to the entry made on 12 September 2014, Mr Kocks confirmed that he was not present to witness Mr Cowen being on site and said that ‘it happened after I left site’.135 Mr Kocks said that he got phone calls from the office and the contractors to say that ‘he’s [Mr Cowen] really blowing up’.136 During cross-examination Mr Kocks accepted that he kept diary notes of Mr Cowen entering the site.137 Mr Kocks accepted that the only diary entry made by him in relation to witnessing Mr Cowen walking onto site in sandals was made by him (Mr Kocks) on 29 January 2014 together with the photographs taken by him on or about the same date.138 The relevant extracts from the transcript is as follows: Q…on Friday, 12 September [2014], when you say Peter was up to his same old tricks and that’s- and you described what you meant by that there. Were you on site to witness those things that you just described there or did that happen after you’d left the site for the day? A It happened after I left the site. Q…And how did you come to know – how did you come to prepare this diary note? What information are you basing the diary note on? A When I’d left the site I got phone calls from the office and the contractors. The concreters that were on site and from the office to say that he’s really blowing up. It’s- you’re doing it all wrong. Are you over there? And I said, no, I’m not. I was over at [indistinct] then…so that’s why Hugh came…Mr Cowen preferred to talk to Hugh rather than anyone else. Q And you said the day before on the Thursday there may have been some similar circumstances occurring but, again, you weren’t there for that? A No. Q You weren’t there to witness that? A No139 … Q Mr Kocks, is there any other record anywhere that makes reference to Mr Cowen being on site in sandals in such a way that it creates a workplace health and safety issue? A Not directly 134 Transcript dated 21 February 2017. 135 Ibid, T96. 136 Ibid. 137 Ibid, T111. 138 Ibid, T114. See exhibits 48 and 37. 139 Transcript dated 21 February 2017, T96-97. -- 26 of 64 -- 27 Q… and given that you’ve said it’s important to keep these records for workplace health and safety reasons, I put it to you that if he had been, you would have kept a record of it. You’d accept that? A Having a record like the 29th of January [2014]… Q …there’s no other record referencing him…? A Just because I didn’t write it in my diary doesn’t mean that it didn’t happen. … Q Your evidence earlier that you reviewed your diaries in preparing these notes. And so am I, therefore to take it that if there had been such a record, you would have transcribed it into the first two typed pages? A I wasn’t going to write down every time that I was on site at Highgate Hill I saw Mr Cowen on site in inappropriate footwear. …140 [88] Mr Cowen gave evidence in relation to what took place on site on 2 October 2014. In his statement, Mr Cowen states that two new employees were on site and had ‘no idea’ and started to remove the wrong boards.141 Mr Cowen states: After unsuccessfully attempting’ to contact the Contractor we requested that the two workers go away and obtain clarification or corrected instructions from their supervisor about the correct work to be carried out.142 The Contractor had not performed any work on site since 26 September 2014, apart from the clean-up and rectification work in October 2014 requested by Workplace Health and Safety Officers to make the site safer.143 [89] Mr Cowen was cross-examined about the alleged interference with site safety and the performance of the work. In particular Mr Cowen was questioned in relation to whether or not he regularly entered the workspace without the permission of the Builder. Mr Cowen said ‘no’ not on a ‘regular basis’.144 Mr Cowen clarified his evidence and said ‘only by invitation or perhaps necessity’.145 Mr Cowen said that the ‘bricklaying gang’ asked him to make them cups of tea so on that occasion he took the tea to them.146 Relevant extracts of the transcript are as follows: 140 Transcript dated 21 February 2017, T113-115. 141 Exhibit 4, [205] to [208]. 142 Ibid. 143 Ibid. 144 Transcript dated 9 February 2016, T2-57. 145 Ibid. 146 Ibid, T2-58. -- 27 of 64 -- 28 Q I put it to you that you went into the work space in the downstairs works made pursuant to the contract on more than one occasion; is that correct or not? A Only by invitation or perhaps necessity. … Q I put it to you that you have entered into that work space on a number of occasions without being invited, yes… A No. Q So your evidence is you have never entered that work space where the Builders are working pursuant to the contract without being invited; is that your evidence? A I just told you before it was only by necessity or if I was asked. For example, the bricklaying gang asked me to make them cups of tea, right, so on that occasion, I took down the tea to them…and I would call that being invited. … Q I also put it to you that you have entered the work space on a number of occasions wearing inappropriate clothing for example, open-toed shoes; is that correct? A Basically, yes. … Q In addition, you regularly spoke to Builders and subcontractors in relation to their work? Q Well, obviously, you have to…Well, they come – I’m in the middle of doing things and they come and ask you to borrow tools or they come and ask you what do you want done here? Is it all right to leave those crooked, as – that was one of the very first things that was asked by Mark Kocks, is it okay to leave this door frame crooked? I said, yes, it’s – that doesn’t worry me. It’s in – it’s in the workshop.147 [90] I found Mr Cowen to be honest and open in giving his evidence. Mr Cowen accepted when questioned that he entered the work space wearing ‘inappropriate clothing’ for example open-toed shoes.148 Mr Cowen also accepted when questioned that he spoke to subcontractors referring to them borrowing tools and asking him about what had to be done.149 Mr 147 Transcript dated 9 February 2016, T2-58 to 2-59. 148 Ibid. 149 Ibid, T2-59. -- 28 of 64 -- 29 Cowen’s evidence is that the contract permitted the Cowens to remain living in the house.150 [91] I am not satisfied to the required standard, having considered all of the evidence, that the Cowens interfered with work site safety or the performance of the work. I am not satisfied to the required standard that Mr Cowen interfered with the work or work site safety by entering the construction site without permission and that he would hold up contractor’s work by talking to them. [92] Mr Freeman accepted during cross-examination that the Cowens lived on site from the start of the works.151 Mr Freeman also accepted during cross- examination that other than the email to Mr Cowen dated 10 July 2014, the Builder did not issue any notice under the contract to the Cowens requiring them to remedy any alleged breach.152 I accept Mr Cowen’s evidence that he spoke to subcontractors when they asked him questions about borrowing tools or (as stated) ‘what had to be done’. I accept Mr Cowen’s evidence that he did not enter the site on a regular basis and entered the worksite wearing inappropriate clothing (footwear) when invited to do so by the contractors working onsite. Did the Cowens interfere with the performance of the works – other alleged conduct and delays to the work? [93] The Tribunal has considered other issues concerning Mr Cowen’s conduct and alleged delays to the work. [94] Mr Freeman, on behalf of the Builder, contends that there were delays to the works attributed to by the Cowens as a result of latent conditions including, amongst others, the electrical cable buried under the dirt on the eastern side of the block; and the sewer.153 Mr Freeman says that the costs and quotes were organised and requests to sign variations for work were sent to the Cowens. Mr Freeman says that the owner has a responsibility under clause 14.4 of the contract to consent to a reasonable or necessary variation. Mr Freeman also says that the Cowens failed to pay the security deposit under the contract as required and made requests for a schedule of works. [95] Mr Freeman gave oral evidence at the hearing about his dealings with Mr Cowen and the renovation work. Mr Freeman accepted when questioned that the relationship between the Builder and the Cowens was good in the early part of the contract and stated that from around 21 February 2014 things changed and stated there were ‘difficulties’.154 Mr Freeman referred 150 Transcript dated 9 February 2016, T2-60. 151 Transcript dated 21 February 2017, T29, L30-31. 152 Ibid, T131, L31-36. 153 See the transcripts dated 8 February 2016 and 15 February 2017; and the Builder’s written submissions filed on 1 June 2017. 154 Transcript dated 15 February 2017, T1-24 to T1-27, see T1-27, LL6-15; and the Builder’s written submissions filed on 1 June 2017. -- 29 of 64 -- 30 to difficulties getting agreement on items that needed to be changed, not answering requests, not completing variation forms and failing to put a security deposit into the bank in accordance with the contract.155 When questioned about when the relationship between the Builder and Mr Cowen ‘started to sour’ Mr Freeman gave evidence that it was when Mr Cowen ‘challenged payments’.156 Mr Freeman stated that Mr Cowen sent a legal letter asking us (the Builder) to give him back the entire previous claim and stated ‘that’s when it soured’.157 [96] Mr Freeman stated that work commenced in January 2014 referring to the cutting out of an existing wall and the start of the excavation on the western side of the property (referred to as the right hand side or higher side when facing the property from the street).158 Mr Freeman accepted that the ground works were to be split by completing ground and slab work on the western side (the right hand side) and then the eastern side.159 [97] Mr Freeman’s evidence is that the works to the western side of the property were completed by 24 February 2014.160 Works to the eastern side commenced between 28 February 2014 and 20 March 2014.161 Mr Freeman stated that it was during that time (between 28 February 2014 and 20 March 2014) that the Builder discussed issues with the sewer, issues with some electrical pipes and an error with the plans for the driveway.162 [98] Mr Freeman accepted when questioned that from about 25 March 2014 the Builder did not perform any work on site for approximately 5 months.163 Mr Freeman in giving his evidence referred to the Builder dealing with issues during this time in relation to the sewer.164 Mr Freeman accepted when questioned that it was during this time that a number of disputes started to arise between the Builder and Mr Cowen.165 [99] The contract sets out the stages of the work to be performed. The payments for each of the stages were to be claimed by the Builder when the works were completed. Mr Freeman accepted when questioned that the schedule of payments in the contract did not reflect what the Builder did.166 Mr Freeman accepted that when he issued a payment for the second stage of work as provided under the contract on 14 February 2014 he had not done all of the work under the contract for the footings and retaining wall stage.167 155 Transcript dated 15 February 2017 T1-24 to T1-27, see T1-27, LL6-15; and the Builder’s written submissions filed on 1 June 2017. 156 Ibid. 157 Transcript dated 15 February 2017, T1-39, L35-38. 158 Ibid, T1-32, L 31-35. 159 Ibid, T1-36. 160 Ibid, T1-40. 161 Ibid, T1-42. 162 Ibid, T1-45. 163 Ibid, T1-48. 164 Ibid, T1-48. 165 Ibid, T1-48. 166 Ibid, T1-36. 167 Ibid, T1-38. -- 30 of 64 -- 31 Mr Freeman accepted when questioned that Mr Cowen paid for that stage of work and for the other stages of work performed to the groundwork and carport stage. Mr Freeman accepted that he had not done the eastern side work for those works but had issued the full payment claim to the Cowens. In relation to the third payment claim in the amount of $36,086, Mr Freeman again accepted that he had issued the full payment claim but had not completed all of the level slab stages.168 [100] It is non-contentious that Mr Cowen and Mr Freeman agreed that in relation to the third payment claim, Mr Cowen would only pay 50% because Mr Cowen had raised an issue about the eastern side not having been started.169 [101] In relation to payment of the security deposit, Mr Freeman accepted during cross-examination that Mr Cowen responded to the breach notice and paid the money (in about August or September 2014), in Mr Freeman’s words ‘extremely reluctantly’.170 [102] Mr Freeman accepted when questioned that by 10 July 2014 all of the disputes relating to deposits and variations had been resolved by Mr Cowen.171 It is Mr Freeman’s evidence that the Builder advised the Cowens on 7 August 2014 that they would be starting work on 12 August 2014.172 Mr Freeman did not accept when questioned that the works were only 50% complete at that stage.173 When questioned about the stage claims issued to the Cowens for payment, Mr Freeman accepted that the first three stages (about 50% of the job) had been issued. Mr Freeman accepted that he had not yet got to the framing and steel beam stage and the enclosed stage.174 It is Mr Freeman’s evidence that as at August or September 2014 it was the Builder’s ‘hope and expectation’ that the works would be completed by 27 October 2014 (the revised date).175 Mr Freeman gave oral evidence that everything was ‘lined up ready to go’. Mr Freeman stated that ‘we were prepared to hit hard right there and then until we were once again interrupted’.176 [103] In relation to completing the contracted works, Mr Freeman stated that ‘we [the Builder] were unhappy’.177 Mr Freeman accepted when questioned that by 1 October 2014 the Builder attempted to reduce the scope of works. Mr Freeman stated: …we thought if we could make it easier and get it finished quicker…remove items that weren’t important, because Mr Cowen had actually, in fact, 168 Transcript dated 15 February 2017, T1-39. 169 Ibid, T1-39. 170 Ibid, T1-49. 171 Ibid, T1-55. 172 Ibid, T1-56. 173 Ibid, T1-56. 174 Ibid, T1-57. 175 Ibid, T1-67. 176 Ibid, T1-67 to T1-68. 177 Ibid, T1-68. -- 31 of 64 -- 32 already flagged that he wanted to change items, particularly on the top of the suspended slab…178 [104] Mr Freeman accepted when questioned that the scope of works was not reduced by 1 October 2014 and that there was as at that date only 26 days remaining in which to complete the works. Mr Freeman did not accept however that the reason why the Builder was ‘trying to drop’ some items of work from the scope of works was because there were 26 days remaining to complete the contract works.179 [105] It is common ground that an agreement was not reached between the Cowens and the Builder to reduce the scope of works. Mr Freeman’s evidence is that the Builder was keen to get the job done.180 [106] In relation to providing a schedule of works, Mr Freeman accepted when questioned that he volunteered to provide this to the Cowens.181 Mr Freeman’s evidence is that on 7 August 2014 the Builder sent the Cowens notice indicating that the date for completion of the works was 26 October 2014.182 Mr Freeman accepted when questioned that the Builder had not complied with clause 8.2 of the contract that requires the Builder to give written notice of when the work commenced and the date for practical completion.183 [107] It is Mr Freeman’s evidence that Mr Cowen put ‘obstacle, obstacle, obstacle’ in front of the Builder.184 Mr Freeman stated that Mr Cowen told Hugh Findlay that even if the Builder completed the job he would be taking legal action. Mr Freeman stated that ‘that’s why we went to the QBCC’.185 [108] It is open to me to find, based on the evidence before me, that on 7 August 2014, notwithstanding any interference with the works or breaches of the contract by the Cowens (as alleged by the Builder), the Builder elected to proceed with the contract. On 7 August 2014, the Builder gave notice of its intention to start work and provided to the Cowens an adjusted date for practical completion.186 [109] In an email dated 7 August 2014, the Builder advised the Cowens, through their legal representatives, that the Builder would require ‘unrestricted access to the building site from 12 August 2014’.187 On 11 September 2014 the Builder confirmed its position with the Cowens that it intended to work towards the completion date of 26 October 2014. In an email sent to the Cowens’ legal representative dated 11 September 2014, Mr Freeman refers 178 Transcript dated 15 February 2017, T1-68, L44-47. 179 Ibid, T1-70. 180 Ibid, T1-72. 181 Ibid, T1-57. 182 Ibid, T1-60. 183 Ibid, T1-61. 184 Ibid, T1-109. 185 Ibid, T1-112. 186 Exhibit 33, attachment 23. 187 Ibid, attachment 22. -- 32 of 64 -- 33 to previous delays by the Cowens and states that ‘[s]hould we exceed this date [26 October 2014] by any small margin there are liquidated damages figures stated in the Residential Building Contract’.188 The relevant extract from the email is as follows: …To avoid having this statement repeated we no longer make any statements regarding dates of work. The only statement we make is that the completion date is 26 October 2014 and that is what we are working towards. Should we exceed this date by any small margin there are liquidated damages figures stated in the Residential Building Contract. It should be noted that all works were completed in an extremely diligent manner (as even referred to in an email received from your client) right up until your client caused these delays with entirely unnecessary actions, mediation meetings, legal letters and the like. Had we been left alone to complete our works as “The Builders” this job would have been completed months ago. He is detailing delays of a few days but his action have caused delays of months. Seriously, if he wants the job done, stop interrupting us and let us focus on doing the job, not talking about it. Any further communications regarding scheduling will be ignored…189 [110] I am not satisfied to the required standard having considered all of the evidence that after July or August 2014, there was a failure by the Cowens to pay money owing under the contract, requests for a schedule of works and other alleged conduct resulting in delays to the completion of the work. Mr Freeman accepts that by 10 July 2014 all of the disputes relating to deposits and variations had been resolved.190 I find that even if there was conduct by the Cowens, as alleged by the Builder, the evidence shows that all disputes were resolved by 10 July 2014 and the Builder elected to proceed with the contract by giving notice to the Cowens on 7 August 2014 of the adjusted date for practical completion. Did the Builder lawfully suspend the works? [111] Clause 16 of the contract provides that the contractor may suspend performance of the works where the owner is in substantial breach of a term of the contract. The contractor must give written notice to suspend the works and the owner must remedy any breach within ten (10) business days. The contractor must recommence the works within ten (10) business days of the owner remedying the breach. [112] The evidence shows that the Builder did not give notice to the Cowens as required by clause 16 of the contract. The evidence also shows that no boarding that was related to the safety issue (upstairs) was removed prior to the Builder suspending the works. The Builder did not remove any boarding upstairs after receiving the Cowens’ email dated 1 October 2014 188 Exhibit 4, p 263. 189 Ibid. 190 Transcript dated 15 February 2017, T1-55. -- 33 of 64 -- 34 (sent at 4:40pm) and after the carpenters were sent to the site on 2 October 2014.191 [113] Mr Freeman accepted during cross-examination that the Builder was only declaring the site unsafe the moment the boarding came down.192 Mr Freeman accepted when questioned that the Builder responded to Mr Cowen’s email on 1 October 2014 (at 2:06 pm) by declaring the works to be unsafe and that the Builder was immediately placing an indefinite suspension on the works.193 Mr Freeman stated that ‘we are anticipating this is going to be a safety issue, so we would have to do that until it’s resolved’.194 Mr Freeman maintained his evidence that the Builder was suspending the works by email dated 1 October 2014 and stated ‘in conjunction with the fact we’re saying we’re removing the hoardings’.195 Mr Freeman accepted when questioned that the Builder was not removing the boarding until the following day (2 October 2014).196 [114] During cross-examination Mr Freeman was referred to the Builder’s email dated 1 October 2014 (sent at 2:06pm) and was questioned about what matters needed to be resolved in relation to the suspension of the works as stated in the email. Mr Freeman stated ‘all matters of safety and access’.197 Mr Freeman referred to continual interference, breaches of the contract by Mr Cowen in talking to subcontractors, walking onto the construction site without permission and without gear.198 [115] Mr Freeman accepted when questioned that the Builder had not issued a notice under clause 16 of the contract. When questioned about whether Mr Cowen was in breach of the contract at the time the Builder suspended the works, Mr Freeman stated, ‘not formally in breach’.199 The relevant extract from the transcript is as follows: Q…You didn’t issue a notice under clause 16 of the contract, suspending the works did you? A No Q And Mr Cowen was not in breach of the contract at the time you suspended the works, was he? A Not formally in breach.200 [116] During cross-examination Mr Freeman was referred to Mr Cowen’s email dated 1 October 2014 (sent at 4:40pm). Mr Freeman was questioned about whether he accepted that Mr Cowen withdrew his request to have the 191 Transcript dated 15 February 2017, T-119, L6-15 and T1-116. 192 Ibid, T1-97. 193 Ibid. 194 Ibid, T1-97. 195 Ibid T-98. 196 Ibid. 197 Ibid, T-98. 198 Ibid. 199 Ibid, T-99. 200 Ibid, T-99, L25-35. -- 34 of 64 -- 35 boarding taken down on 1 October 2014. Mr Freeman stated ‘not prior to our people being on site’.201 Mr Freeman’s evidence is that the Builder’s business shuts at 4:00pm and that he does not choose to do business outside of business hours.202 Mr Freeman does not dispute that Mr Cowen sent his email on 1 October 2014 (at 4:40pm) withdrawing his request to remove the boarding of ‘those specific doors’.203 Mr Freeman stated however, that Mr Cowen’s request was made with ‘other conditions as well which he’s not entitled to ask for’.204 Mr Freeman referred to Mr Cowen’s statement (in the email) ‘pending further advice’. Mr Freeman stated ‘which means until he [Mr Cowen] decides that that’s okay or not’.205 Mr Freeman referred to Mr Cowen’s request to provide an SWMS and stated that he (Mr Cowen) is making conditions on that (referring to the request) and stated that the Builder is not obligated under the contract to provide it.206 [117] Mr Freeman accepted when questioned that even after he received Mr Cowen’s email dated 1 October 2014, the Builder maintained its suspension. Mr Freeman stated however that Mr Cowen agreed to leave it (the boarding) there temporarily and stated ‘until he sees otherwise’.207 Mr Freeman was questioned about other options available to the Builder (other than suspending the works). Mr Freeman stated that the Builder is responsible for workplace, health and safety and that ‘we deemed that was the appropriate action’.208 When asked if Mr Freeman would have sent the carpenters to site had he read Mr Cowen’s email he stated: ‘No, I don’t imagine I would have’.209 [118] Mr Freeman was cross-examined about his statement in relation to the suspension that (as stated) ‘…it was clear to us that things had got to a stage where he did not want us there and we did not want to be there.’210 Mr Freeman accepted when questioned that he did not want to be there from that day onwards and stated ‘no one wanted to be there. Subcontractors didn’t want to be there. Our people didn’t want to be there…I told them in no uncertain terms we had to be there...’.211 [119] Mr Freeman was cross-examined about the basis for the suspension. Mr Freeman accepted when questioned that had the Builder given a notice to Mr Cowen under the contract Mr Cowen would have 10 days to remedy any breach. Mr Freeman did not accept however that leaving the boards up 201 Transcript dated 15 February 2017, T-100. 202 Ibid. 203 Ibid, T-100. 204 Ibid. 205 Ibid. 206 Ibid, T1-101. 207 Ibid, T1-103. 208 Ibid, T-104. 209 Ibid, T-109. 210 Exhibit 32, [71], see Transcript dated 15 February 2017, T1-110. 211 Ibid, T1-111. -- 35 of 64 -- 36 would have remedied the situation and stated that it would only have remedied ‘part of the situation’.212 [120] It is Mr Freemans’ evidence that the works were suspended on the basis of the safety issues and on the basis of the interference the Builder was getting in relation to carrying out the job.213 Mr Freeman was cross-examined at some length about the continuation of the suspension after 2 October 2014.214 Mr Freeman maintained his assertion that the Cowens would not follow instructions and would not comply with the contract.215 The relevant extract from the transcript is as follows: Q All right. So again, there was no basis for suspending the works because of safety issues associated with the hoarding, was there? A Well, there was in the first instance. Q That’s not an answer to my question? A Okay. In the second instance no. Q And you continued the suspension regardless…? Q Yes, because he kept breaching to the construction site as well, which is a breach. Q You continued the suspension regardless of what was happening and what you said about the boardings? A Yes, because-because he would not follow instructions. He would not comply with the contract. Q Mr Freeman, you’re not on site. How do you know what instructions he’s not complying with? You hadn’t been on site? A We’ve got photographs of him on site- constantly on site. Q These are photographs you took? A Photographs people took, not myself. … Q After 1 October [2014]? A It’s a continual pattern of interruption and interference and failure to comply with safety regulations, and this was just….216 212 Transcript dated 15 February 2017, T1-116. 213 Ibid, T1-117. 214 Ibid, T1-119. 215 Ibid, T1-119. 216 Ibid, T1-119 to T1-120. -- 36 of 64 -- 37 [121] Mr Freeman was cross-examined about the Builder’s email to the Cowens’ legal representatives dated 23 October 2014. In the email, the Builder refers to the works as being suspended indefinitely and states that no resumption of work will occur until the QBCC process has been completed and a resolution of all issues has been agreed.217 The relevant extract from the email sent by Hugh Findlay (for the Builder) appears as follows: Hi Peter As I understand it [sic] a Indefinite Suspension means there is indefinite extension for the “Date for Practical Completion” and so no date can be given to you as it depends on decisions/processes etc. by others that are out of our control. No resumption of works will occur until the QBCC process has been completed and a resolution of all issues has been agreed. I suggest you seek advice on these matters from the QBCC as I have no knowledge of the duration of this process other than a general information email from the “Minister for Housing and Public Works”.…218 [122] Mr Freeman was questioned about whether he believed that filing the complaint with the QBCC permitted him to suspend the works under the contract while that dispute was being assessed thorough the QBCC. Mr Freeman stated: We were certainly hoping that we would get guidance from, them as to what…was the appropriate action to take.219 [123] Mr Freeman was questioned about whether or not the contract entitles the Builder to suspend the works because they have referred a dispute to the QBCC. Mr Freeman stated: No, I think our feeling was that the suspension was valid on the basis of Workplace Health and Safety issues, which were paramount.220 [124] Mr Freeman accepted when questioned that in the email dated 23 October 2014 the Builder communicated to the Cowens that because the matter had been referred to the QBCC, no resumption of work would occur and there has been a new suspension or a continuation of the suspension. Mr Freeman stated: Yeah, I do concur with that, that we…believed that when the process was put to the QBCC as a dispute, that it would- we would hold the work in suspension until it resolved.221 [125] Mr Freeman accepted that the complaint was lodged with the QBCC on 15 October 2014. Mr Freeman stated that they were waiting for a response from the QBCC.222 Mr Freeman accepted when questioned that for 15 days 217 Exhibit 4, p 318. 218 Ibid. 219 Transcript dated 15 February 2017, T1-121, L34-37. 220 Ibid, T1-122, L10-12. 221 Ibid, T1-123, L1-5. 222 Ibid, T1-123, L21. -- 37 of 64 -- 38 during which the construction period ended the Builder lodged the QBCC dispute and suspended or continued the suspension of the works and then did nothing. Mr Freeman stated ‘[t]hat’s right because it was in the hand[s] of the QBCC’.223 [126] Mr Freeman was cross-examined about correspondence sent by the Cowens’ legal representatives (to the Builder) dated 28 October 2014 (the breach notice). In the letter, the Builder is referred to suspending the works indefinitely on 1 October 2014 and an allegation that the Builder had left the site ‘in an unsafe condition’ and workplace health and safety officers ordered the Builder to carry out substantial rectification work to ensure the site was safe.224 Mr Freeman accepted that the Builder suspended the works indefinitely on 1 October 2014 and was required to do some work following receipt of a direction from workplace health and safety.225 It is non- contentious that workplace health and safety inspected the site on or about 15 October 2014.226 [127] Mr Freeman was further cross-examined about the Builder’s suspension of the works the following day of the hearing (on 16 February 2017). Mr Freeman accepted when questioned that he did not inspect the site on 1 or 2 October 2014 to determine if the site was safe for workers. Mr Freeman was questioned about whether or not the removal of the boarding on the upper verandah was no longer a safety issue after Mr Cowen withdrew his request to remove the boarding (by email dated 1 October 2014). Mr Freeman stated: No, because he was aggressive with them onsite that morning and we deemed it appropriate to get off the site because of his previous outbursts and police visits…His conduct during the entire process of the building was one of an obstructive manner, interfering with the works, which is in substantial breach of the contract, as you will well know.227 [128] Mr Freeman maintained his evidence that the Builder continued the suspension on the basis of (as stated) ‘the workplace health and safety and the fact that we had gone to the QBC for guidance’.228 Mr Freeman in giving his evidence referred to Mr Cowen ‘constant[ly] ignoring our demands that he stay off site’.229 Mr Freeman was questioned about the continuation of the suspension after the QBCC notified the Builder that it was unable to assist with the complaint or resolution process on 11 November 2014. Mr Freeman accepted that the Builder was no longer able to maintain the suspension from 11 November 2014.230 Mr Freeman’s evidence is that the Builder did not lift the suspension because it already had a notice of 223 Transcript dated 15 February 2017, T1-123, L29-31. 224 Exhibit 4, p 334. 225 Transcript dated 15 February 2017, T1-133. 226 Ibid, T1-136. 227 Transcript dated 16 February 2017, T1-32. 228 Ibid, T1-34. 229 Ibid, T1-38. 230 Transcript dated 16 February 2017, T1-56. -- 38 of 64 -- 39 intention to terminate.231 Mr Freeman was questioned about why in the two days before the Cowens issued its notice of intention to terminate the Builder did not lift the suspension. Mr Freeman stated: …Firstly, we hadn’t had confirmation of the intention to pay and or capacity to pay, and secondly, we still believed there were workplace health and safety issues…which is the reason we started it.232 [129] It is open to me to find that the Builder did not lawfully suspend the works under the contract. The Builder did not give the Cowens notice of the suspension of the works as required under the contract. I have found that Mr Cowen withdrew any request he previously made to the Builder to remove the boarding and the Builder’s carpenters did not remove any boarding from the site (upstairs) on 2 October 2014. [130] I have made findings about the contentions raised by the Builder including the issues of safety, interference with the works, delay and Mr Cowen’s alleged conduct on 2 October 2014 at the site. I have accepted Mr Cowen’s evidence given by him in response to the contentions raised by the Builder about site safety, the email sent by Mr Cowen on 1 October 2014 and other alleged interference with the works. [131] I have also considered Mr Freeman’s evidence in relation to the suspension of the works and the lodgement of a resolution process with the QBCC. Mr Freeman’s evidence is that the suspension of the works was continued because of the ongoing QBCC dispute and the workplace health and safety issues. Mr Freeman’s evidence is consistent with what was communicated in writing to the Cowens by the Builder.233 [132] There is no provision under the contract to suspend the work because of an ongoing dispute or complaint having been lodged with the QBCC. I have made findings about the contentions raised by the Builder about site safety, delay and interference. The evidence shows that the Builder was notified on 11 November 2014 by the QBCC that the file had been closed and notwithstanding the Builder maintained the suspension of the works. The Cowens did not elect to terminate the contract until 13 November 2014. It is open to me to find that there was an opportunity for the Builder from 11 November 2014 after receiving notification from the QBCC about the file closure to lift its suspension and respond to the Cowen’s notice of intention to terminate. [133] I find that the Builder’s continuation of the suspension of the works after 11 November 2014 was conduct which ‘evinc[ed] an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent 231 Transcript dated 16 February 2017, T1-56. 232 Ibid, T1-57. 233 See emails dated 23 October 2014 and 10 November 2014, Exhibit 4, p 318 and Exhibit 22, attachment 33. -- 39 of 64 -- 40 with the party’s obligations’.234 The Cowens were entitled to accept the repudiation and terminate the contract.235 Did the Cowens validly terminate the contract with the Builder? [134] The contract signed by the parties contains specific clauses about the homeowners (the Cowens) and the Builder’s obligations including exercising any right to terminate the contract by either party where one party is in substantial breach of the contract. [135] In this matter, the Cowens issued a notice of intention to terminate dated 28 October 2014 and a termination notice dated 13 November 2014. The Builder effectively accepted the Cowens’ termination of the contract in writing on 14 November 2014. In the Builder’s correspondence to the Cowens’ legal representatives, the Builder maintained that the Cowens ‘caused the last indefinite suspension’.236 [136] Under clause 20 of the contract the homeowner has a right to serve a notice of intention to terminate if the Builder fails to, amongst other things, proceed with the works with due diligence or in a competent manner; unlawfully suspends the carrying out of the works; refuses or persistently neglects to remove or remedy defective work or improper materials, so that the works are adversely affected; is unwilling to complete the works or abandons the contract; or is in substantial breach. If the contractor fails to remedy the breach, the owner may terminate the contract under clause 20.2. [137] The Cowens’ legal representatives by letter dated 28 October 2014 gave notice of this intention to terminate the contract pursuant to clause 20.1 (the October notice). The October notice refers to clause 20.1 of the contract and provides that the Builder is required within 10 business days to provide amongst other things, a plan, a schedule of work, any certified rectification plan; and acknowledge that the suspension of the works was improper.237 The October notice refers to the suspension of the works by the Builder and states that ‘[t]his can hardly be said to be proceeding with the works in a workmanlike or diligent manner’.238 [138] The QBCC say that the October notice is invalid and cannot be relied upon by the Cowens for the purpose of clause 20.1 of the contract.239 The QBCC says that the provision of the notice by the Cowens amounts to an unlawful repudiation of the contract at common law. The QBCC contend that by giving the notice the Cowens repudiated the contract on 28 October 2014.240 The QBCC also contend that the requirements placed on the Builder in the October notice would not have resulted in works being 234 Koompahtoo’s case, 44. 235 Shevill’s case, 625-626. 236 Exhibit 2, p 267. 237 Exhibit 2, pp 57-58. 238 Ibid. 239 QBCC’s written submissions filed on 12 May 2017. 240 QBCC’s written submissions filed on 12 May 2017. -- 40 of 64 -- 41 resumed.241 The QBCC says that it would simply have resulted in the provision of plans and acknowledgments by the Builder to the Cowens, none of which have any basis in the contract.242 [139] The QBCC relies on the principles in Botros v Freedom Homes Pty Ltd243 that were applied in Thunder Corp Pty Ltd v Queensland Building Services Authority.244 The QBCC say that there are similarities in this matter to Botros’ case.245 The QBCC say that the Cowens insisted upon the performance of certain terms in the Cowens’ October notice which had no basis in the contract.246 The QBCC refer to Mr Cowen’s evidence given at the hearing and submits that Mr Cowen maintained that compliance with these terms was required if the Cowens were not to terminate the contract.247 The QBCC say that by insisting that the Builder comply with terms which have ‘no contractual warranty or authority’, and maintaining that insistence right up until the hearing of this matter, the Cowens repudiated the contract.248 [140] In Thunder Corp’s case, the Tribunal found that a notice of intention to terminate was not a valid notice under the contract. The Tribunal in Thunder Corps’ case applied the principles in Botros’ case that found a party cannot unilaterally impose requirements for which there is no contractual warrant or authority.249 The Tribunal found that the owner’s conduct in delivering a notice of intention to terminate, when there had been no default under the contract and when he had no entitlement to seek the matters set out in the notice is a repudiation of the contract. The Tribunal found that a party who has repudiated a contract cannot terminate for the other’s breach. The Tribunal said: …The facts in this case are consistent with the decision in Freedom Homes, and with the conclusion that the owner has repudiated the contract by evincing an intention not to perform the contract except on impermissible terms... Given these findings it is not necessary to consider further whether the owner validly terminated the contract at common law. It is a general principle that a party who has repudiated a contract cannot terminate for the other’s breach.250 [141] I do not accept the QBCC’s submission that Mr Cowen in giving his evidence maintained that compliance with all of the terms in the October notice was necessary by the Builder. Mr Cowen was cross-examined about 241 QBCC’s written submissions filed on 12 May 2017. 242 QBCC’s submissions in response (reply) filed on 3 July 2017. 243 [1999] QCA 150; [2000] 2 Qd R 377. 244 [2011] QCAT 56. 245 QBCC’s written submissions filed on 12 May 2017, p 20. 246 Ibid. 247 Ibid, p 20. 248 Ibid. 249 Thunder Corps’ case, [121]. 250 Ibid, [128]. -- 41 of 64 -- 42 the notice and the request for the Builder to provide certain things such as the plan, schedule of work and the certified plan. Mr Cowen in answering questions about the notice referred to the contract and in another instance stated ‘you’d have to ask my solicitor’.251 Mr Cowen was questioned about the suspension of works and was asked to acknowledge that the suspension is a legal conclusion.252 Mr Cowen accepted when questioned that he required the Builder within 10 business days to acknowledge that the suspension of the works was improper.253 Mr Freeman accepted when questioned at the hearing that he understood the October notice was complaining about the validity of the suspension and the Cowens’ intentions were to get the Builder back to work.254 [142] I have considered the relevant cases and the submissions advanced by the QBCC and the Builder. I do not accept the QBCC’s submission that there are similarities in this matter to Botros’ case. I have made findings about the conduct of the parties and the suspension of the works by the Builder. I have found that Mr Cowen’s intention in sending the email on 1 October 2014 at 4:40pm was to have the Builder complete the works. I have also found that there was repudiatory conduct by the Builder in continuing the suspension of the works after receiving notice from the QBCC on 11 November 2014, and that the Cowens were entitled to accept the Builder’s repudiation and terminate the contract. Because of my findings, the decision in Thunder Corp’s case that applied the principles in Botros’ case can be distinguished on the facts of this matter. [143] It is open to me to find having considered all of the evidence, that the Cowens’ conduct in issuing the October notice was an honest attempt to apply clause 20 of the contract to achieve the goal of having the Builder resume the work by lifting the suspension under the contract and to bring the works to practical completion. The notice refers to clause 20.1 of the contract and clearly identifies the suspension of the works and a failure to proceed with the works in a workmanlike manner.255 The notice relevantly provided that the Builder is amongst other things, required within 10 business days to ‘acknowledge that the suspension of the works was improper’.256 [144] I find that the Builder failed to remedy the breach identified in the notice dated 28 October 2014 by continuing the suspension of the works. I find that the termination notice dated 13 November 2014 was properly given by the Cowens. The termination notice provides that no work had been completed by the Builder since 1 October 2014 when the works were ‘indefinitely suspended over workplace health and safety concerns’.257 The 251 Transcript dated 4 May 2016, T3-117. 252 Ibid. 253 Ibid. 254 Transcript dated 16 February 2017, T1-48 to T1-49. 255 Exhibit 2, pp 57-58. 256 Ibid. 257 Exhibit 4, p 336. -- 42 of 64 -- 43 notice also refers to a failure to rectify any of the issues addressed in the notice of intention to terminate dated 28 October 2014.258 [145] I find that the Cowens lawfully terminated the contract by giving notice to the Builder on 13 November 2014. I also find that the Builder’s repudiatory conduct by continuing the suspension of the works was accepted by the Cowens by giving notice to the Builder on 13 November 2014. [146] The Tribunal has also considered the oral submissions made by Mr Formby on behalf of the QBCC at the hearing that the Cowens have acted unreasonably in issuing the notices in October and November 2014. [147] Mr Formby says that the Builder was ready and willing and able to perform the contract and had referred the matter to the QBCC to try to get the contract back on foot.259 Mr Formby says that the October notice was issued too early and was therefore unreasonably given in the circumstances because there were other remedies available to the Cowens for delay.260 Mr Formby refers to s 90 of the former Domestic Building Contracts Act 2000 (Qld) and says that at the relevant time that Act gave a statutory right to terminate. [148] I do not accept this submission having considered all of the evidence before me. It is open to me to draw the reasonable inference based on the expert evidence given in the hearing that as at 1 October 2016 the Builder was not in a position to complete all of the contracted works by the date for completion (26 October 2014). Mr Freeman accepted during cross- examination that he attempted to reduce the scope of works in early October 2014 and that the Builder was unhappy. Notwithstanding the evidence about the scope of works, Mr Freeman’s evidence was that the Builder wanted to complete the work. [149] There is expert evidence before me in relation to an estimate of the time remaining to complete the contracted work as at the date of suspension (1 October 2014). Andrew Morse, building consultant and Jeffrey Pratt, licensed Builder gave concurrent evidence about the works and agreed that there was approximately four to six months (as stated by Mr Morse) or three to five months (as stated by Mr Pratt) of work to be completed having regard to the stages of work under the contract. The relevant extract from the transcript is as follows: Q If you were…a building company and you were to dedicate all of your resources to this one particular job and try and basically get this – or these stages complete as quickly as possible, that’s what’s left to be completed? Mr Morse Yes 258 Exhibit 4, pp 59-60. 259 Transcript dated 8 February 2016, T1-42. 260 Ibid, T1-47. -- 43 of 64 -- 44 Q How long do you think, in a best case scenario, quickest case scenario do you think it could be done? Mr Morse I think you would still be in a four to six months. You can only get so much site – work – like, materials on site and so many workers on site without causing a safe – workplace health and safety issue. Q And, Mr Pratt? Mr Pratt I would probably go three to five or something along those lines. … Mr Pratt It surprised me that all the timber there is for the whole of the job and, as I said earlier, probably three months. It might be a bit less but I would think it would be, you know, two and a-half to three months. 261 [150] I accept the evidence of Mr Morse and Mr Pratt. It is open to me to find that, as at 1 October 2014 when the Builder unlawfully suspended the work, the time remaining to complete the contracted works would not have been sufficient even if the Builder were to dedicate all of its resources to the job to get the stages completed as quickly as possible. [151] I find that the Cowens have not acted unreasonably in issuing the October notice and exercising their contractual and legal right to terminate on 13 November 2014. The adjusted date for completion of the works as notified by the Builder to the Cowens was 26 October 2014. The Cowens did not issue their notice to terminate until 28 October 2014, being a date after the adjusted date for completion. [152] I find that the correct and preferable decision is that the contract has been validly terminated by the Cowens under the contract and otherwise at law. In proceeding GAR044-15 the decision made by the Queensland Building and Construction Commission of 22 December 2014 to decline a claim for non-completion under clause 1.2 of the Insurance Policy Conditions is set aside. The Tribunal substitutes its own decision that Peter Cowen and Jan Cowen did validly terminate the contract dated 18 February 2013 and the claim for non-completion under clause 1.2 of the Insurance Policy Conditions is accepted. What is the evidence about the relevant items in the Scott Schedule – application GAR113-16? [153] Steve Morley, licensed building certifier and Greg Dempster, building certifier prepared a joint report262 following an experts conclave about items 261 Transcript dated 23 February 2017, T115 to T117. 262 Exhibit 29. -- 44 of 64 -- 45 numbered 2, 3, 4, 5, 7, 8, 10, 18 and 23. The experts gave concurrent evidence at the hearing about items 7, 3, 2 and 4. [154] Andrew Morse, independent building consultant, licensed Builder and carpenter and Jeffrey Pratt, licensed Builder and carpenter prepared a joint report263 following an experts conclave about items numbered 1(a), 1(b), 1(c), 1(d), 1(e), 1(f), 1(g), 2(a), 2(b), 2(c), 8, 12, 14, 17, 18, 23(a), 23(b), 23(c) and 31. The experts gave concurrent evidence at the hearing about items 1(a), 1(b), 1(c) and 1(d). The experts also gave further evidence about a new item identified at the on-site conclave as the ‘step-down’ or ‘fall issue’ that is relevant to item 1(e).264 [155] Alex Milligan, structural and civil engineer and Tom Kalaja, structural and civil engineer prepared a joint report265 following an experts conclave about items numbered 1, 2, 4, 5, 7, 8, 10, 12, 13, 14, 15, 16, 17, 21, 23, 25, 26 27 and 28. The experts gave concurrent evidence at the hearing about items 2 and 4. [156] The Cowens contend that items 1(a), 1(e), 1(f), 1(g), 2, 4(b), 4(c), 12, 13, 15, 16, 18(d), 23(b), 23(c) are defective works.266 The Cowens say that they will provide access to the Builder to enable the defects to be remedied. [157] The Cowens in their written submissions have not addressed the balance of the items in the Scott Schedule. The Cowens have filed no written submissions in response to the QBCC’s contention that the Tribunal should disregard the balance of the items in the Scott Schedule in determining GAR113-16.267 The QBCC submit that the balance of the items may be disregarded by the Tribunal in determining GAR113-16 as the Cowens have made no submissions in relation to those matters and do not maintain that the QBCC ought to issue a direction to rectify in respect of those items.268 [158] All of the parties have been given an opportunity to file and exchange written submissions. In the absence of a written submission from the Cowens to contend otherwise, I accept the QBCC’s submission that the Cowens do not maintain for the purposes of the review application (in GAR113-16) that the QBCC should issue a direction to rectify for the balance of the items from the Scott Schedule, being items 1(b), 1(c), 1(d), 3, 4(a), 4(d), 4(e), 5, 7, 8, 10, 14, 17, 18(a), 18(b), 18(c), 18(e), 21, 23(a), 25, 26, 27, 28 and 31. The QBCC’s decision not to issue a direction to rectify in relation to those items that are no longer an issue for the purposes of the 263 Exhibit 35. 264 Further concurrent evidence was given on 23 February 2017. 265 Exhibit 40. 266 Cowens’ outline of submissions filed on 7 April 2017, [190]. 267 QBCC’s written submissions filed on 12 May 2017, p 28. Balance of items from the Scott Schedule are identified as 1(b), 1(c), 1(d), 3, 4(a), 4(d), 4(e), 5, 7, 8, 10, 14, 17, 18(a), 18(b), 18(c), 18(e), 21, 23(a), 25, 26, 27, 28 and 31. 268 QBCC’s written submissions filed on 12 May 2017, p 28. -- 45 of 64 -- 46 review proceeding in GAR113-16 should be confirmed. I make orders accordingly. [159] The Tribunal will now consider the remaining items for the purposes of the review proceeding GAR113-16 referred to in the Cowen’s written submissions, that is items 1(a), 1(e), 1(f), 1(g), 2, 4(b), 4(c), 12, 13, 15, 16, 18(d), 23(b) and 23(c). Item 1(a) – below ground new block walls (waterproofing) [160] The Cowens contend that the Builder failed to adequately waterproof the blockwork wall on the western side of the property.269 The Cowens contend that the failure of the waterproofing on the external side of the block wall is raised in item 1(a) of the Scott Schedule. The Cowens invite the Tribunal to prefer the evidence of Mr Morse and to find that the waterproofing on the external side of the block wall had failed.270 The Cowens say that Mr Pratt and Mr Morse agree that if the waterproofing had failed, it would be considered a defect.271 [161] The QBCC say that Mr Pratt and Mr Morse agree that the garage structure where the waterproofing is situated is a class 10 structure for the purposes of the Building Code of Australia.272 The QBCC says that Mr Pratt and Mr Morse agreed that the Building Code does not require waterproofing to be carried out to a class 10 structure, although Mr Morse believed waterproofing to be a requirement under the contract.273 The QBCC says that the Tribunal is required to determine whether it is satisfied that defective building work has been performed by the Builder pursuant to the Building Code of Australia.274 The QBCC says that the detail provided by Mr Milligan and Mr Kalaja in their joint report indicates that they did inspect the relevant wall in some detail at their conclave. The QBCC submits that Mr Milligan and Mr Kalaja’s evidence in their joint report is a more reliable contemporaneous account of the condition of the wall at the time of the hearing. The QBCC contend that the Tribunal should find that the alleged defect in item 1(a) is incomplete work and not defective work.275 [162] Mr Milligan and Mr Kalaja agree that that there is evidence of water leaching from the interface of the underside of the slab and the internal wall on the western and northern sides.276 In their joint report Mr Milligan and Mr Kalaja agree that the work is not defective and state that it is incomplete.277 269 The Cowens’ outline of submissions filed on 7 April 2017, p 26. 270 Ibid, pp 26 to 27. 271 Ibid. 272 QBCC’s written submissions filed on 12 May 2017, pp 30 to 31. 273 Ibid. 274 Ibid. 275 Ibid, p 31. 276 Exhibit 40. 277 Ibid. -- 46 of 64 -- 47 [163] The experts Mr Pratt and Morse agree that there has been water ingress.278 In their joint report Mr Pratt says the water ingress is because of unsealed gaps.279 Mr Pratt says this is incomplete work and not a defect because it can be completed to a satisfactory standard. Mr Morse says the water ingress is because of a failed waterproofing membrane.280 [164] In giving their oral evidence both Mr Pratt and Mr Morse agreed that at some stage a waterproofing certificate for the block wall would be issued. Both experts agreed that they have not seen a waterproofing certificate.281 [165] It is Mr Morse’s evidence that he understands there is a water proofing membrane installed. Mr Morse queried, however, how it was installed to stop the water from migrating through. Mr Morse states: I’m not sure how they did it. I understand there is a membrane there. As to how they got to the bottom of the wall at a three-metre heights, I don’t know. More importantly, how it would be returned down to the base of the wall and then out over the footing system and the down the face of the footing system to stop water migrating through. If it is – if the waterproofing membrane is stopped at the bottom of the block on the footing, there’s a chance for moisture to migrate through at the base course.282 [166] Mr Pratt’s evidence is that if there is no waterproofing on the backside the work would be defective because the work has been backfilled.283 Mr Pratt accepted when questioned that if waterproofing was there and failed the work would be defective.284 Mr Pratt stated that it would be defective because it’s allowing water egress into that area. Mr Pratt stated that there is no requirement under the Building Code for it to be waterproofed because it is classified class 10. Mr Pratt stated that it is his understanding that the contract required it to be waterproofed.285 Mr Morse also accepts that the Building Code of Australia does not require a class 10 building to be waterproofed.286 [167] Both Mr Morse and Mr Pratt agreed at the hearing that a waterproofing product had been applied to the block work.287 Mr Pratt gave evidence at the hearing that ‘defective’ means ‘not done correctly’ and stated ‘allowing water egress into that other area’.288 Mr Pratt’s evidence is that he did not think there was any evidence of any failure other than rain water coming down over the top of the western wall, spreading along the thicker wall and 278 Exhibit 35. 279 Ibid. 280 Ibid. 281 Transcript dated 17 February 2017, T5-58. 282 Ibid, T5-69. 283 Transcript dated 17 February 2017, T5-70 284 Ibid. 285 Ibid, T5-78. 286 Ibid, T5-80. 287 Ibid, T5-74. 288 Transcript dated 17 February 2017. -- 47 of 64 -- 48 coming down. Mr Pratt stated that only the northern wall showed a potential failure of the membrane in relation to water leaks.289 [168] Both Mr Morse and Mr Pratt agreed when questioned that during their independent inspections they saw watermarks or effervescence from watermark spots above the shelf on the western wall.290 [169] Mr Pratt inspected the wall on 17 August 2015 and Mr Morse inspected the wall on 19 May 2015. Both experts inspected the wall at the onsite conclave prior to the hearing. In relation to the onsite conclave inspection of the wall, Mr Pratt stated ‘we looked at it a bit the other day, but I don’t recall going into any detail’.291 [170] Mr Milligan and Mr Kalaja state in their joint report that that the work is not defective but is incomplete.292 Mr Milligan states however that the water proofing membrane was exposed by an excavation on an earlier site. Mr Milligan ‘questions’ whether the membrane was inspected and certified before the earth was backfilled. Mr Milligan and Mr Kalaja were not questioned about item 1(a) at the hearing. [171] It is open to me to prefer the evidence of Mr Morse in relation to item 1(a). Mr Morse was questioned at some length about his evidence and his opinion in relation to the waterproofing. I accept Mr Morse’s evidence that during his inspection he saw evidence of water ingress through the block wall and in his opinion this would suggest that the waterproofing had failed. Mr Pratt accepted when giving his concurrent evidence that if there was a patch observed by him in the same location as the patch observed by Mr Morse then it probably is a failure which would be defective work.293 [172] It is not in dispute that waterproofing was installed by the Builder. In written submissions the Builder says that any waterproofing work done was additional work done by the Builder ‘over and above what is required’.294 Mr Morse accepted in giving his concurrent evidence that waterproofing had been installed by the Builder. [173] It is open to me to find, based on the evidence, that the waterproofing installed may have been damaged by the placing of backfill against the wall and nails being used to secure the corflute material.295 Mr Morse identified from a photograph in giving his evidence that there was a nail piercing the membrane.296 Mr Morse stated: The waterproofing membrane is applied, obviously, to protect the material behind it, being the block work and obviously to stop transference of 289 Transcript dated 17 February 2017, T5-86. 290 Ibid, T5-90. 291 Ibid, T5-97. 292 Exhibit 40. 293 Transcript dated 17 February 2017, T5-95. 294 The Builder’s written submissions filed on 1 June 2017, p 5. 295 Transcript dated 17 February 2017, T6-68, T6-132, T6-131 and T6-137. 296 Ibid, T5-131. -- 48 of 64 -- 49 moisture into, obviously, the habitable side or the internal side of this structure. The corflute is applied simply to protect the membrane from, as stated earlier, rocks and sharp objects that are being backfilled against the wall. So here is a nail inserted through the corflute in through the membrane. So the membrane is now defective at the top there because it’s been beached.297 [174] Mr Pratt also accepted when giving his concurrent evidence earlier in the hearing that backfill has sharp edges on it that as stated can ‘penetrate through the waterproof membrane’.298 In relation to Mr Morse’s evidence about the picture of the nail piercing the corflute, Mr Pratt accepted that there was a nail depicted in the photograph and agreed with Mr Morse.299 [175] Having accepted the evidence of Mr Morse and his observations of the wall during his inspection, I am satisfied to the required standard that the water proofing installed by the Builder on the block wall has failed and is defective work. Should the Builder be directed to rectify the work? [176] The QBCC or the Tribunal on review is not required to give a direction to rectify if satisfied that, in the circumstances, it would be unfair to the person to give the direction.300 An example for why the QBCC or the Tribunal on review may exercise its discretion not to issue a direction to rectify is as provided in s 72(5) where the owner refuses to allow the building contractor to return to the owner’s home. The example in s 72(5) provides as follows: Example for subsection (5)- The commission might decide not to give a direction for the rectification of building work because an owner refuses to allow a building contractor to return to the owner’s home… [177] In this matter, the Cowens say that they will provide access to the Builder to come on to the property to remedy any defects.301 The Builder, in written submissions, says that a direction to rectify is only necessary if the QBCC deem work should be done and the contractor refuses to do it.302 [178] The QBCC say that the Cowens’ willingness to allow the Builder access ‘does not resolve the issue’.303 The QBCC say that if a direction to rectify is issued, the Builder will suffer the detriment of receiving a direction to rectify 297 Transcript dated 17 February 2017, T5-137. 298 Ibid, T5-132. 299 Ibid, T5-138. 300 QBCC Act, s 72(5). 301 Applicants’ outline of submissions filed on 7 April 2017, p 40. 302 The Builder’s submissions filed on 1 June 2017, p 11. 303 QBCC’s submissions on the hearing filed on 12 May 2017, p 42. -- 49 of 64 -- 50 in circumstances where the Builder was willing to carry out rectification work without the need for a formal direction.304 [179] The QBCC says that it would be unfair to the Builder to issue a direction to rectify in circumstances where the Builder was willing to carry out rectification work to any items determined by the QBCC to be defective, but where the Cowens did not permit the Builder access to the property to carry out those rectifications.305 The QBCC says, and I accept, that in those circumstances, the Builder would be subjected to a detriment even though the Builder was willing to carry out rectification work without a formal direction to rectify being issued.306 [180] The Builder says that any supposed defects were not brought up at the time when the work was being completed.307 The Builder says that the Cowens terminated the contract, as such the work is ‘unfinished’ work and unpaid work.308 [181] The evidence shows that the QBCC did contact the Cowens by correspondence and email on various occasions between September 2015 and December 2015 advising the Cowens that the Builder was willing to return to site to rectify items.309 In the various emails and correspondence sent to the Cowens, the QBCC requested that the Cowens confirm that they would allow access to the property for the Builder.310 [182] The evidence given by Mr Cowen at the hearing in relation to whether he would have allowed the Builder access to the property is unequivocal. Mr Cowen’s evidence is that he was willing to allow access to the Builder to rectify defective work if a formal direction to rectify is issued by the QBCC.311 Mr Cowen was questioned at the hearing by the QBCC about whether he would raise ‘relatively promptly’ something that he considered to be defective or not in accordance with the contract. Mr Cowen stated ‘certainly not’. Mr Cowen stated that he would get an independent Builder to look at the ‘problem’. Mr Cowen stated that he would not mention the problem to the Builder because it would ‘give them an excuse to walk away’.312 [183] Mr Cowen’s evidence given at the hearing is that ‘as a rule’ issues were not raised with the Builder by the Cowens. Mr Cowen stated that the reason for not raising issues with the Builder was because ‘we just wanted to get the job finished basically’.313 Mr Cowen stated that they were intending to raise 304 QBCC’s submissions on the hearing filed on 12 May 2017, p 42. 305 Ibid, p 41. 306 Ibid. 307 The Builder’s submissions filed on 1 June 2017, p 11. 308 Ibid. 309 Exhibit 46, “SOR-18”, p 121. 310 Ibid. 311 Transcript dated 21 February 2017, T73 to T74. 312 Ibid, p 24. 313 Transcript dated 21 February 2017, T29, L6 to L10. -- 50 of 64 -- 51 some issues in early July 2014 when the Builder returned to site and stated ‘they [the Builder] didn’t’ (meaning the Builder did not return to site).314 Mr Cowen stated that they had some talks with the QBCC in July 2014 and put in a complaint to the QBCC about the work.315 [184] Mr Cowen accepted when questioned that he did not raise the issue of defective work with the Builder prior to November 2014.316 Mr Cowen gave evidence about the items referred to in the Scott Schedule and identified the items that he said were brought to the Builder’s attention prior to the termination of the contract in late November 2014. Mr Cowen identified items 3, 4 and 5.317 Mr Cowen also identified some items as having been discussed at a meeting with the Builder in early May 2014 but stated that for some items he could not be sure.318 [185] Mr Freeman was questioned about whether he was ever made aware of any conversations occurring between Mr Cowen and any of the Builder’s employees or contractors regarding any of the defects as they appear in the Scott Schedule. Mr Freeman stated ‘nothing of item 1 whatsoever’. Mr Freeman stated that the first he heard about the issues was after Mr Milligan’s report was provided in 2015.319 Mr Freeman’s evidence effectively remained unchanged when he was questioned about the other items in the Scott Schedule. I accept Mr Freeman’s evidence. [186] I accept the QBCC’s submission that the decision not to issue a direction to rectify should be set aside and the matter returned to the QBCC for reconsideration in relation to Item 1(a) that I have found to be defective. I accept the QBCC’s submission that neither witness Mr Freeman nor Mr Cowen gave evidence of any clear notification of any defects. I also accept the submission advanced by the QBCC that it would be unfair to issue a direction to rectify to the Builder in all of the circumstances such as the unequivocal evidence given by Mr Cowen about whether the Builder was made aware of the defects and whether the Builder was given an opportunity to rectify the item. [187] The correct and preferable decision is to set aside the decision made by the QBCC not to issue a direction to rectify to the Builder for item 1(a) and to return the matter to the QBCC for reconsideration according to the findings made by the Tribunal. In returning the matter to the QBCC, consideration should be given by the Commission to allowing the Builder an opportunity to attend to rectification of the work that I have found to be defective based on the evidence before me. 314 Transcript dated 21 February 2017, T29. 315 Ibid. 316 Ibid, T32, L41. 317 Ibid, T39. 318 Ibid, T43 to T44. 319 Transcript dated 22 February 2017, T7-144. -- 51 of 64 -- 52 Item 1(e), 1(f), 1(g) and new stepdown issue- new lower western slab [188] It is non-contentious that the position of the slabs on the western side is defective because it has insufficient fall pursuant to the Building Code of Australia.320 [189] Both experts, Mr Pratt and Mr Morse, identified the new defect following an inspection of the completed works. Mr Pratt and Mr Morse agreed that the item identified as the concrete path outside the new garage extension on the western side of the ground floor does not comply with the Building Code of Australia. I accept their evidence. [190] The remaining items (1(e), 1(f) and 1(g)) relate to the floor slab western side and (as particularised in the Scott Schedule) where the old slab and new internal slab join. [191] There is evidence before me that the construction is certified to a Class 1a standard based on the Form 16 produced at the hearing.321 It is open to me to prefer the evidence of Mr Morse in relation to the western slab (items 1(e), 1(f) and 1(g)). Mr Morse gave evidence to the effect that the development application and aspect certificate for the work certify the construction as a Class 1a and a vapour barrier should have been installed. Both Mr Morse and Mr Pratt agreed that no damp course was laid on the western slab before the footings were poured. Both Mr Morse and Mr Pratt accepted that this would be necessary to comply with a Class 1a construction.322 [192] It is also open to me to prefer, and I accept, Mr Morse’s evidence in relation to whether water proofing was required for the construction given that the structure (as constructed) is in fact a Class 10 and not Class 1a. Mr Morse’s evidence was that there was no vapour barrier between the existing slab and the new slab to be poured, and that such protection was necessary to prevent water penetration from the new slab to the existing slab.323 Mr Morse in giving his evidence referred to s 3.2.2.6 of the Building Code of Australia and the requirement that a vapour barrier should be installed for the purposes of ‘continuous’ meaning from where the existing residential slab meets the new structure. It is open to me to accept Mr Morse’s evidence and find that there is no vapour barrier between the existing slab and the new slab to be poured. It is open to me to find that the work is non- compliant with the Building Code of Australia and is defective. Should the Builder be directed to rectify the work? [193] I have made findings in relation to whether the Builder was aware of any of the defects in relation to item 1(a) above. Item 1(a) also relates to the 320 Submissions of the QBCC filed 12 May 2017, [137]; and the Cowens’ outline of submissions filed on 7 April 2017, p 27. 321 Exhibit 19. 322 Transcript (23 February 2017)-31, L28 to T1-33, L 19. 323 Transcript (23 February 2017)-7, L41-43. -- 52 of 64 -- 53 western side of the property and similar issues and evidence given in determining item 1(a) is relevant in respect of items 1(e), 1(f), 1(g) and the new stepdown issue. [194] I have accepted Mr Freeman’s evidence that he did not know anything about item 1 until 2015.324 I have found that Mr Cowen’s evidence about whether he would allow the Builder access to the property is unequivocal. [195] I accepted the QBCC’s submission that it would be unfair to the Builder to issue a direction to rectify to the Builder in circumstances where the Builder was willing to carry out rectification work to items found to be defective but was not permitted access to the property by the homeowner to carry out the rectification. I accepted the QBCC’s submission that in those circumstances the Builder would be subjected to a detriment even though the Builder was willing to carry out rectification work without a formal direction to rectify being issued. In this matter, I am required to make the correct and preferable decision in relation to items 1(e), 1(f) and 1(g) and the step-down issue (new item). I have found that the work for these items is defective. [196] The correct and preferable decision is to set aside the decision made by the QBCC not to issue a direction to rectify to the Builder for items 1(e), 1(f) and 1(g) and the step-down issue (new item); and to return the matter to the QBCC for reconsideration according to the findings made by the Tribunal. In returning the matter to the QBCC, consideration should be given by the Commission to allowing the Builder an opportunity to attend to rectification of the work that I have found to be defective based on the evidence before me. Item 2 – water proofing and whether works not constructed to a Class 1a structure [197] It is non-contentious that a Class 10 structure does not require damp and vapour proof protection. The experts agree that what is built is a Class 10 structure. [198] I have preferred and accepted the evidence of Mr Morse in relation to whether a vapour barrier is required. Mr Morse’s evidence was that the slab was continuous with the existing slab and under the Building Code of Australia this was required to be a Class 1a slab.325 [199] The evidence shows that not all of the footings were protected (with show damp course) before the slab was poured on the western side. Both Mr Morse and Mr Pratt accept that this would be required for a Class 1a structure. Both experts also agree that damp course would be required over all of the footings to comply with a Class 1a construction. 324 Transcript dated 22 February 2017, T7-144. 325 Transcript (23 January 2017) page 7, L45 to page 8, L34; Transcript (23 February 2017) page 20, L14 – 136??? JB to check. -- 53 of 64 -- 54 [200] It is open to me to find that the construction is not compliant with the Building Code of Australia having preferred and accepted the evidence of Mr Morse. I find that water proofing is required where the slab is continuous with the existing slab for the purposes of s 3.2.2.6 of the Building Code of Australia. It is open to me to find that this item of work is defective. Should the Builder be directed to rectify the work? [201] I have made findings in relation to whether the Builder was aware of any of the defects in relation to item 1(a) above. Item 1(a) also relates to the western side of the property and similar issues and evidence given in determining item 1(a) are relevant in respect of this item. [202] I have accepted Mr Freeman’s evidence that he did not know anything about item 1 until 2015. Mr Freeman, in giving his evidence, indicated that his response for item 2 was the same as for item 1.326 I have found that Mr Cowen’s evidence about whether he would allow the Builder access to the property is unequivocal. [203] I accepted the QBCC’s submission that it would be unfair to the Builder to issue a direction to rectify to the Builder in circumstances where the Builder was willing to carry out rectification work to items found to be defective but was not permitted access to the property by the homeowner to carry out the rectification. I accepted the QBCC’s submission that in those circumstances the Builder would be subjected to a detriment even though the Builder was willing to carry out rectification work without a formal direction to rectify being issued. In this matter, I am required to make the correct and preferable decision in relation to item 2. I have found that the work for this item is defective. [204] The correct and preferable decision is to set aside the decision made by the QBCC not to issue a direction to rectify to the Builder for item 2 and to return the matter to the QBCC for reconsideration according to the findings made by the Tribunal. In returning the matter to the QBCC, consideration should be given by the Commission to allowing the Builder an opportunity to attend to rectification of the work that I have found to be defective based on the evidence before me. Items 4(b) and 4(c) – eastern slab and footings [205] These items relate to the eastern slab and the reinforcement footings. Both Mr Milligan and Mr Kalaja gave concurrent evidence about these items of work. Mr Morley and Mr Dempster also gave concurrent evidence about the issuing of a form 16 that is relevant to these items of work. 326 Transcript dated 22 February 2017, T7-144. -- 54 of 64 -- 55 [206] The Cowens contend that Mr Kalaja’s evidence ought not be accepted, or alternatively given little weight.327 The Cowens contend that no reliance ought to be placed on the Form 16 that certifies an aspect of slab work. [207] The Cowens say that the Builder has made modifications to the slab reinforcing in the area of the landing near the rear steps, after the engineers inspection and without notifying the engineer of these changes.328 The Cowens say that the slab was then poured with a step-down to the landing area, contrary to the plans and Mr Cowen’s intended use, namely to be able to move his cars around the area.329 [208] The Cowens also raise other issues in their written submissions in relation to the slab such as whether it (the slab) can be certified.330 The Cowens contend that Mr Kalaja accepted in cross-examination that he was not entitled to issue certification for the entire footing and slab stage. The Cowens also content that the Builder accepted that it relied on the Form 16 as being for the whole of the footings and slab stage and poured the footings and slab in reliance on it.331 [209] Both parties have had an opportunity to present evidence in relation to items 4(b) and 4(c). It is open to me to make findings based on the evidence before me. I must arrive at the correct and preferable decision as to whether a direction to rectify should issue to the Builder based on my findings made. [210] Mr Milligan accepted, in giving his evidence, that his concerns regarding these items of work were addressed at the experts conclave by sighting the Form 16 for this work. The relevant extract from the transcript is as follows: Mr Kalaja advised me that he’d inspected the site, and that specific area, which I wasn’t aware of at the time of generating my reports. The footings were deepened in that area to account for the different soil conditions. It was an area of fill material compared with the opposite end of the building, which was in rock, and I think it’s true to say the bulk of the footings were excavated in rock, apart from this area that I’ve circled on the plan. Mr Kalaja also actually drew my attention to a photograpgh contained in one of my reports where he explained that the form work or boxing, it’s sometimes referred to, is seen to be deeper than in other sections of the footing preparation. Those statements and that discussion, together woth Mr kalaja issuing a form 16, which in effect is his statement of fact pertaining to compliance of the pepared construction work in accordance with the documents led me to agree that the concerns I’d raised in my report would be removed or were satisfied, whichever is the most appropriate wording.332 [211] Mr Milligan’s evidence is that it is not common practice to carry out invasive investigations to check certain aspects of foundations where a Form 16 has 327 Applicant’s outline of submissions dated 7 April 2017, p 33. 328 Ibid. 329 Ibid. 330 Ibid. 331 Ibid p 32; Transcript 22 February 2017, p 39 L32 to p 40, L1. 332 Transcript dated 16 February 2017, T1-151, LL34-46. -- 55 of 64 -- 56 been issued by a qualified engineer.333 Mr Milligan gave evidence about the importance of the Form 16. Mr Milligan said that the Form 16 is a ‘critical document’ and referred to it as being a ‘legally binding statement of fact’. The relevant extract from the transcript is as follows: …a From 16 is one of those critical documents. It’s a legally binding statement of fact, is my understanding, that testimony that the works have been inspected and are fully in accordance with the requirements of the design and the applicable codes and it’s for that reason that I –well, that I defer to Mr Kalaja’s role as the engineer responsible for that project.334 [212] Mr Milligan gave evidence to the effect that the concerns he had raised in his report could be removed or were satisfied following his inspection and discussions with Mr Kalaja.335 Mr Milligan gave evidence to the effect that he was not in any position to suggest that there is a defect.336 Mr Milligan was questioned about whether his view was changed in regards to his evidence about the Form 16 after hearing the concerns pertaining to Mr Kalaja’s evidence being raised by the Cowens’ legal counsel. Mr Milligan confirmed that his evidence with respect to the engineering matters was unchanged.337 Mr Milligan also accepted in giving his evidence that there does not appear to be anything about the slab which is indicating to him that it is not performing.338 [213] Mr Morley was given an opportunity at the hearing to respond to the issues raised about Mr Kalaja and the issuing of the Form 16 – in particular, about Mr Kalaja’s alleged inconsistent statements about his inspection of the work and the issuing of a Form 16.339 [214] It is open to me to accept Mr Milligan’s evidence given at the hearing that a Form 16 issued by an engineer in respect of the foundation stage is a critical document and is effectively evidence that the works have been inspected and are in accordance with the requirements of the design and the applicable codes.340 I accept Mr Milligan’s evidence given in relation to items 4(b) and (c). [215] I have also considered the evidence given by Mr Morley and Mr Dempster in relation to the Form 16. Both experts Mr Morley and Mr Dempster agreed that a Form 16 issued by a competent person could be relied upon by a certifier in order to certify the foundations.341 Mr Dempster accepted in 333 Transcript dated 16 February 2017, T1-156, L12. 334 Ibid, T1-157, LL33-39. 335 Ibid, T1-151, L34-36. 336 Ibid, T1-159, LL4-9. 337 Ibid, T1-146 to T1-147. 338 Ibid, T1-158, L21. 339 Ibid, T1-139. 340 Ibid, T1-157. 341 Transcript dated 14 February 2017, T2-103 to T2-105. -- 56 of 64 -- 57 giving his evidence that Mr Morley (the certifier) had deemed Mr Kalaja to be a competent person to issue a certificate.342 Mr Dempster stated: …The certifier has deemed him [Mr Kalaja] competent….based on this, the certifier is allowed to rely on it, and those aspects are certified.343 [216] It is open to me to find that items 4(b) and (c) are not defective. I accept that a Form 16 has been issued and that Mr Morley as certifier deemed Mr Kalaja to be a competent person. [217] I am satisfied, having considered all of the evidence before me, that items 4(b) and 4(c) are not defective work. The correct and preferable decision is that a direction to rectify should not be issued to the Builder for these items of work because the work is not defective. The decision made by the QBCC not to issue a direction to rectify for items 4(b) and 4(c) (eastern slab and footings) is confirmed. Item 12 – Steel posts on the eastern side [218] This item relates to work performed by the Builder on the eastern slab. [219] Both experts Mr Milligan and Mr Kalaja agreed that the issues identified in relation to item 12, such as the steel beams and posts installed, are defects.344 Both experts agreed that all of the matters could have been corrected had they been identified ‘before handover’.345 [220] The QBCC submits, and I agree, that in light of the expert witnesses’ findings, it is appropriate for the Tribunal to make a finding that those items of work concerning item 12 are defective.346 I accept the evidence of Mr Milligan and Mr Kalaja and find that Item 12 is defective. Should the Builder be directed to rectify? [221] I have made findings in relation to whether the Builder was aware of any of the defects in relation to item 1(a) above. I have accepted Mr Freeman’s evidence that he did not know anything about the items in the Scott Schedule. When giving his evidence about item 12 in the Scott Schedule, Mr Freeman stated that they were ‘only just erecting [the posts]’ when they ‘got stopped’.347 Mr Freeman referred to the relevant time as being in September or October 2015 and stated that they could have easily gone back to rectify and stated ‘but we were not on site so we didn’t get to that’.348 [222] I have found that Mr Cowen’s evidence about whether he would allow the Builder access to the property is unequivocal. I accepted the QBCC’s 342 Transcript dated 14 February 2017, T2-105, L37. 343 Ibid. 344 Exhibit 40. 345 Ibid. 346 Submissions of the QBCC filed on 12 May 2017. 347 Transcript dated 22 February 2017, T7-148. 348 Ibid, T7-148. -- 57 of 64 -- 58 submission that it would be unfair to the Builder to issue a direction to rectify to the Builder in circumstances where the Builder was willing to carry out rectification work to items found to be defective but was not permitted access to the property by the homeowner to carry out the rectification. I accepted the QBCC’s submission that in those circumstances the Builder would be subjected to a detriment even though the Builder was willing to carry out rectification work without a formal direction to rectify being issued. [223] In this matter, I am required to make the correct and preferable decision in relation to item 12. I have found that the work for this item is defective. The correct and preferable decision is to set aside the decision made by the QBCC not to issue a direction to rectify to the Builder for item 12 and to return the matter to the QBCC for reconsideration according to the findings made by the Tribunal. In returning the matter to the QBCC, consideration should be given by the Commission to allowing the Builder an opportunity to attend to rectification of the work that I have found to be defective based on the evidence before me. Item 13 – Steel posts (base plates) [224] This item relates to the base plates of steel posts that are undersize and (as contended) do not comply with the ‘Alternative Base Plate Details’ provided by the engineer. [225] The experts Mr Milligan and Mr Kajala agree that the base plates are undersized. They report, however, that ‘the manner in which it is installed it does perform properly’.349 [226] The experts Mr Pratt and Mr Morse also considered this item in their respective reports. Mr Pratt reports that the bolts to the posts were too short ‘in that they did not fully engage the thread in the nuts’.350 Mr Pratt reports that the posts and beams had been temporarily braced and nailed in position by the owner. Mr Pratt also reports that that that builder was sent off site whilst erecting the posts and frame and ‘had no time to install the temporary fixings’. Mr Pratt reports: [Mr Freeman] said they were aware the bolts had been installed too short and were going to drill the bolts out and use chemical anchors of the correct length.351 [227] Mr Morse also reports that the beams, posts and the steel columns are not compliant with the Building Code of Australia. Mr Morse reports: Along this garage slab area structural steel columns and beams have been installed and partly bolted to the new slab directly above this unprotected 349 Exhibit 40. 350 Exhibit 35. 351 Ibid. -- 58 of 64 -- 59 cold joint to the slabs and as such fails to comply with 3.1.3.7-(a) & (b) & (c) [of the Building Code of Auatralia].352 [228] It is open to me to accept the evidence of Mr Milligan and Mr Kajala that the bolts to the posts are too short. I also accept the evidence of Mr Pratt and Mr Morse in relation to this item of work. Mr Freeman does not dispute that the bolts installed are too short as reflected in Mr Pratt’s report. I find that the bolts to the posts are too short. I am satisfied based on the evidence before me that item 13 is defective work. Should the Builder be directed to rectify? [229] I have made findings in relation to whether the Builder was aware of any of the defects in relation to item 1(a) above. I have accepted Mr Freeman’s evidence that he did not know anything about the items in the Scott Schedule. When giving his evidence about item 13, Mr Freeman stated that he knew nothing about that item ‘at all’.353 [230] I have found that Mr Cowen’s evidence about whether he would allow the Builder access to the property is unequivocal. I accepted the QBCC’s submission that it would be unfair to the Builder to issue a direction to rectify to the Builder in circumstances where the Builder was willing to carry out rectification work to items found to be defective but was not permitted access to the property by the homeowner to carry out the rectification. I accepted the QBCC’s submission that in those circumstances the Builder would be subjected to a detriment even though the Builder was willing to carry out rectification work without a formal direction to rectify being issued. [231] In this matter, I am required to make the correct and preferable decision in relation to item 13. I have found that the work for this item is defective. The correct and preferable decision is to set aside the decision made by the QBCC not to issue a direction to rectify to the Builder for item 13 and to return the matter to the QBCC for reconsideration according to the findings made by the Tribunal. In returning the matter to the QBCC, consideration should be given by the Commission to allowing the Builder an opportunity to attend to rectification of the work that I have found to be defective based on the evidence before me. Items 15 and 16 – Steel posts [232] This issue relates to a steel post that was alleged to have been erected in the incorrect place. [233] It is non-contentious that the steel post has been removed. The experts report: 352 Exhibit 35. 353 Transcript dated 22 February 2017, T7-148. -- 59 of 64 -- 60 Item 15 - This post has now been removed. The experts do not know if it had originally been erected in the correct place in accordance with the contract drawings. Item 16 - It is agreed that if the post in 15 is erected in a different place then the cleats will have to be moved to suit.354 [234] I accept the evidence of Mr Milligan and Mr Kajala. I cannot be satisfied to the requisite standard based on the evidence that items 15 and 16 are defective work because the post has been removed. The correct and preferable decision is that a direction to rectify should not be issued to the Builder for this item of work. The decision made by the QBCC not to issue a direction to rectify for items 15 and 16, the steel posts, is confirmed. Item 18(d) – plumbing works issue [235] This issue relates to a drawing for plumbing work, in particular, a failure of the Form 4 to show the new overflow relief gully at the boundary. [236] The Cowens rely on an email from the Brisbane City Council (the BCC) that refers to an audit inspection carried out on 15 December 2016 and the defect items noted as being outstanding.355 The email refers to action taken following the audit inspection that identified defect effect as being ‘still outstanding’. The email states: …I have contacted the plumber to inform him of these defects, unfortunately he didn’t answer his phone but I was able to leave him a voice message to return my call…356 [237] Mr Gregory Moore, Senior Plumbing Investigator with the QBCC, gave evidence about this item and the legislative requirements as to what the ‘as constructed diagrams’ accompanying a Form 4 is to show.357 Mr Moore’s evidence is that the Form 4, amongst other things, does show a future overflow relief gully on the boundary and is not required to show aspects of sewers or other drainage which is maintained by Queensland Urban Utilities.358 Mr Moore accepted, when questioned about his evidence at the hearing, that the BCC had the power to audit QBCC decisions and to ensure notices to rectify plumbing contractors in respect of notifiable plumbing work. This power to take actions referred to by Mr Moore in his evidence is against plumbing licensees.359 [238] I accept the QBCC’s submission that it would not be fair to take action against the Builder in relation to a matter for which the BCC is already taking action against a plumbing licensee, particularly when there is no evidence 354 Exhibit 40. 355 Exhibit 54, document 7, p 141. 356 Ibid. 357 Exhibit 54 at [10]. 358 Ibid, [11(d)]. 359 Transcript 22 February 2017, p 7-123. -- 60 of 64 -- 61 before me as to whether or not the matters raised in the BCC correspondence have already been addressed by the plumbing licensee.360 [239] Notwithstanding, the issue complained of by the Cowens concerns the Form 4 ‘as constructed diagram’ for which, based on Mr Moore’s evidence, there is no legislative requirement as to what the diagram accompanying a Form 4 is to show. I accept Mr Moore’s evidence. I accept the QBCC’s submission that a direction to rectify should not be issued to the Builder even if the work, as identified by the BCC following an inspection, is found to be defective.361 The correct and preferable decision is that the QBCC’s decision not to issue a direction to rectify to the Builder for item 18(d) is confirmed. Items 23(b) and 23(c) - termite protection [240] These items of work relate to the installation of a termite barrier on the lower western side and the east side in accordance with the contract. [241] The Cowens contend that no certification for termite protection has been issued for the eastern slab.362 The Cowens rely on the evidence of Mr Morse and Mr Pratt and say that the experts identified a number of areas in respect of which the termite protection was defective. [242] Both Mr Morse and Mr Pratt agreed that there is no termite barrier installed having viewed photographs.363 Mr Pratt stated however that he is satisfied from the fact that a certificate has been issued for the western side that there is no defect. Mr Morse did not agree with Mr Pratt about this issue and stated, in the joint report, that the termite barrier should have been installed by the current stage of construction.364 In relation to item 23(c) both Mr Pratt and Mr Morse agreed that there is a physical barrier visible in some areas.365 [243] Mr Morse and Mr Pratt gave concurrent evidence about items 23(b) and 23(c) at the hearing. Mr Morse and Mr Pratt both agreed that the termite barrier has been breached by a post sitting against the existing house, constituting a defect.366 Mr Morse stated at the hearing that that aspect of the work was not compliant with section 3.1.3.5 of the Building Code of Australia.367 Mr Morse also identified a gap or void between the slab and the existing ant capping of the house on the lower western slab that was not compliant with the Building Code of Australia. Mr Morse stated: 360 QBCC’s written submissions filed on 12 May 2017, p 38. 361 Ibid, p 38. 362 Transcript 22 February 2017, p 93, L23-26; See Applicant’s submissions dated 7 April 2017, p 34. 363 Exhibit 35. 364 Exhibit 35. 365 Ibid. 366 Transcript dated 23 February 2017, T13-65 to T13-69. 367 Ibid, T13-69, L 16. -- 61 of 64 -- 62 …there is some protection…in the original dwelling but the manner in which the slab is…up there, I think creates a problem. That void- there is no visual. The termites could simply go straight over the membrane with their mud pack and they’re in that void and they’re away. So that- that issue there would have to be addressed in line with the certificate and then addressing the issue up behind the post for him to issue a certificate. I do accept Mr Pratt’s version that it was put in place there, some fabric. And then the slab is poured and subsequently the post has come up there and that breaches it. And that breaching is the failure to comply under our three. So attachments of item adjacent to buildings, so it fails to comply with 3660. So the builder needs to have addressed that.368 [244] The QBCC submit that based on the expert evidence before the Tribunal it is appropriate that the Tribunal make a finding that the termite barrier is defective insofar as posts on both the eastern side and western side abut the house.369 I accept this submission based on the evidence of Mr Morse and Mr Pratt that I also accept. [245] In relation to the lower western slab, I accept the evidence given by Mr Morse in relation to the gap or void between the slab and the existing ant capping of the house. I also accept the evidence of Mr Morse in relation to the location of the post on the western side. [246] In relation to the eastern side, both Mr Morse and Mr Pratt agreed that at the time of the hearing a Form 16 for termite protection had not been provided or sighted by them. Mr Pratt’s evidence is that the work can be compliant with termite protection requirements once the work is completed and therefore does not consider the eastern side termite protection to be defective (save for where the posts abut the existing house). [247] Mr Pratt gave evidence that the hole adjacent to the eastern slab on the corner of the existing dwelling was incomplete work, predominantly on the basis that a builder would not just leave that hole there unless the works are incomplete.370 There is no evidence before me in relation to the eastern slab that a termite barrier has been installed. [248] It is open to me to find based on the evidence of Mr Morse that the work in in relation to item 23(b) on the western side is defective where the post abuts the house and where there is a void (with respect to ant capping). Both Mr Morse and Mr Pratt agreed there was no termite barrier visible from the photographs they had sighted of the slab. Both experts agreed the termite protection was defective where posts abutted the existing dwelling.371 I accept their evidence and make findings accordingly. [249] It is open for me to find, having accepted the expert evidence of Mr Morse and Mr Pratt, that item 23(c) in regards to the termite protection on the eastern side is defective. Both experts had not sighted a Form 16 and Mr 368 Transcript dated 23 February 2017, T13-77, LL16-27. 369 QBCC’s submissions filed on 12 May 2017, p 39. 370 Transcript 22 February 2017, p 13 – 64. 371 Transcript 23 February 2017, p 64, L8-25. -- 62 of 64 -- 63 Morse’s evidence is that the termite protection on the eastern side should be in place at the current stage of construction. Both experts agree the work is defective where posts on the eastern side abuts the existing dwelling.372 I find items 23(b) and 23(c) are defective. Should the Builder be directed to rectify? [250] I have made findings in relation to whether the Builder was aware of any of the defects in relation to item 1(a) above. I have accepted Mr Freeman’s evidence that he did not know anything about the items in the Scott Schedule. When giving his evidence about item 23(b) and 23(c), Mr Freeman stated that ‘termite treatment certification was not brought up at all’.373 [251] I have found that Mr Cowen’s evidence about whether he would allow the Builder access to the property is unequivocal. I accepted the QBCC’s submission that it would be unfair to the Builder to issue a direction to rectify to the Builder in circumstances where the Builder was willing to carry out rectification work to items found to be defective but was not permitted access to the property by the homeowner to carry out the rectification. I accepted the QBCC’s submission that in those circumstances the Builder would be subjected to a detriment even though the Builder was willing to carry out rectification work without a formal direction to rectify being issued. [252] In this matter, I am required to make the correct and preferable decision in relation to item 23(b) and 23(c). I have found that the work for this item is defective. The correct and preferable decision is to set aside the decision made by the QBCC not to issue a direction to rectify to the Builder for item 23(b) and 23(c) and to return the matter to the QBCC for reconsideration according to the findings made by the Tribunal. In returning the matter to the QBCC, consideration should be given by the Commission to allowing the Builder an opportunity to attend to rectification of the work that I have found to be defective based on the evidence before me. Other items that fall outside the Scott Schedule [253] The Cowens have identified in their written submissions other items that fall outside of the Scott Schedule. I have not considered those items for the purposes of determining the correct and preferable decision in GAR113-16. The parties have had an opportunity to present submissions and respond in reply. I have accepted the QBCC’s submission that the Tribunal should only make findings in relation to the items identified in the Cowens’ submissions with reference to the Scott Schedule identified as items 1(a), 1(e), 1(f), 1(g), 2, 4(b), 4(c), 12, 13, 15, 16, 18(d), 23(b) and 23(c).374 It would not be fair to the builder and the QBCC to make findings about these items that fall outside the Scott Schedule because the items do not form 372 Transcript 23 February 2017, p 64, L8-25; Transcript 23 February 2017, p 68, L39 to p 69, L47. 373 Transcript dated 22 February 2017, T7-149. 374 Applicant’s outline of submissions dated 7 April 2017, para [190]. -- 63 of 64 -- 64 part of the review proceedings and the parties have not been given an opportunity to present evidence and respond to the issues in relation to the items. Conclusion [254] I have made findings of fact in relation to GAR044-15 about the conduct of the parties, in particular whether or not the allegations made by the Builder about Mr Cowen’s alleged interference with the performance of the work were proven based on the evidence before me. I found that the contract was properly terminated by the Cowens. I found that, based on the evidence before me, the Builder unlawfully suspended the works on 1 October 2014 and by continuing the unlawful suspension after 11 November 2014 evinced an intention to no longer be bound by the contract. I found that the Cowens were entitled to accept the Builder’s repudiatory conduct. I found that the correct and preferable decision is that the contract has been properly terminated by the Cowens under the contract and otherwise at law. [255] In relation to GAR113-16 I have found that items 1(a), 1(e), 1(f), 1(g), 2, 12, 13, 23(b) and 23(c) are defective work. I made findings about the evidence given by the Cowens and Mr Freeman in relation to the items of work and whether or not the Builder was made aware of the items I found to be defective and whether or not the Builder was given an opportunity to rectify the defects. I determined that the correct and preferable decision is for each of the items of work I found to be defective was to refer the matter back to the QBCC for reconsideration. [256] For items 4(b), 4(c), 15, 16 and 18(d), I found that the work is not defective work and the correct and preferable decision is not to issue a direction to rectify to the builder. -- 64 of 64 --