Factory Direct Pools Pty Ltd v Queensland Building Services Authority [2013] QCAT 34

CITATION: Factory Direct Pools Pty Ltd v Queensland Building Services Authority [2013] QCAT 34 PARTIES: Factory Direct Pools Pty Ltd trading as Atlantic Pools (Applicant/Appellant) v Queensland Building Services Authority (Respondent) APPLICATION NUMBER: GAR039-11 MATTER TYPE: General administrative review matters HEARING DATE: 12 July and 30 August 2012 HEARD AT: Brisbane DECISION OF: Michelle Howard, Member DELIVERED ON: 18 January 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. Direction to Rectify No 35776 issued by the Queensland Building Services Authority to Factory Direct Pools Pty Ltd is set aside and in its place Factory Direct Pools Pty Ltd is directed to have the following defective building work rectified by a licensed contractor(s) within 28 days: ‘Installation of the fibreglass pool which has resulted in deflection outside of allowable tolerances of the southern wall resulting in possible damage to the pool shell.’ 2. That any application for costs together with any supporting material and submissions be filed in the Tribunal and served on the other party by 4pm on 31 January 2012. 3. That any material and submissions in response be filed in the Tribunal and served on the other party by 4pm on 14 February 2013. 4. That any application for costs be heard on the papers without an oral hearing on -- 1 of 14 -- 2 the basis of the written material and submissions not before 18 February 2013. CATCHWORDS: GENERAL ADMINISTRATIVE REVIEW – review of Queensland Building Services Authority decision to issue direction to rectify – where swimming pool installed without a fully- piped sub-soil drainage system in non- compliance with the applicable Australian Standard – where construction defective irrespective of Australian Standard – where contractor submits drainage excluded by contract Queensland Building Services Authority Act 1991, s 72, schedule 2 Domestic Building Contracts Act 2000, ss 7, 8, 8(4), 44, 93 Statutory Instruments Act 1992, s 7 Briginshaw v Briginshaw (1938) 60 CLR 336 R v His Honour Judge Miller and Builder’s Registration Board ex parte Graham Evans and Co (Qld) Pty Ltd [1987] 2 Qd R 446 Chicco v The Corporation of the City of Woodville (1990) Aust Torts Reporter 81-028 Riddell v Queensland Building Services Authority [2012] QCAT 226 APPEARANCES and REPRESENTATION (if any): APPLICANT: Factory Direct Pools Pty Ltd trading as Atlantic Pools was represented by Mr D Gardiner of Counsel instructed by Eatons Lawyers RESPONDENT: Queensland Building Services Authority was represented by Mr E Bird, In-house Legal Officer REASONS FOR DECISION [1] On 3 February, 2011, the Queensland Building Services Authority (QBSA) issued Direction to Rectify and/or Complete Number 35776 to Factory Direct Pools Pty Ltd in respect of a pool at 31 Satinash Street, Narangba. The direction was to the effect that installation of the pool did not comply with the Australian Standard (AS) 1839:1994 in that the southern wall of the pool had deflected out in excess of reasonable tolerances, resulting in possible damage to the pool shell. -- 2 of 14 -- 3 [2] Factory Direct Pools applied for review of the QBSA decision. [3] The matter was heard over two days in July and August, 2012. [4] Mr Stuart Templeton gave evidence for Factory Direct Pools, together with Mr Colin Stimpson, a pool installer engaged on the project by Factory Direct Pools; and Mr Karl Aldrich, an engineer, engaged to provide expert evidence. Some brief oral evidence was given by Mr Kerstang, solicitor for Factory Direct Pools. [5] The QBSA relied on evidence from Mr Gary Stick, QBSA inspector; Mr Robert Hughes, an engineer engaged to give expert evidence; and the homeowner, Mr Daud. Mr Daud had separately engaged an engineer, Garry Wenck, to report about the issues with the pool. His report was also before the Tribunal, as an annexure to Mr Daud’s witness statement, although Mr Wenck was not called as a witness in the proceeding. [6] It is not controversial that there is a significant bulge in a wall of the pool shell. No issue was raised about the wall exceeding reasonable tolerances. It is common ground that the pool has been paid for in full. The legal framework for the review [7] The purpose of a review conducted by the tribunal in its review jurisdiction is to produce the correct and preferable decision1 following a fresh hearing on the merits.2 The Tribunal must make its decision according to the applicable law, and based on the evidence presented to it.3 In effect, the Tribunal stands in the shoes of the original decision-maker, in this case the QBSA, and makes the decision anew. The relevant facts must be established to the reasonable satisfaction of the Tribunal.4 [8] Under s 72 of the Queensland Building Services Authority Act 1991 (QBSA Act), a person who carried out building work may be directed to rectify or complete building work.5 All circumstances which are reasonably relevant, including the terms of the contract may be considered in deciding whether to give a direction.6 Whether or not work is defective or incomplete is to be ascertained objectively.7 A direction may not be given if it would be unfair to do so.8 1 Queensland Civil and Administrative Tribunal Act 2009, s 20(1). 2 Queensland Civil and Administrative Tribunal Act 2009, s 20(2). 3 CCYPG v Lister [2011] QCATA 87; Queensland Racing Limited v McMahon [2010] QCATA 73. 4 Briginshaw v Briginshaw (1938) 60 CLR 336, at 361-362 (per Dixon J); Riddell v Queensland Building Services Authority [2012] QCAT 226. 5 QBSA Act, s 72(1). 6 QBSA Act, s 72(2). 7 R v His Honour Judge Miller and Builder’s Registration Board ex parte Graham Evans and Co (Qld) Pty Ltd [1987] 2 Qd R 446, 458. 8 QBSA Act, s 72(14). -- 3 of 14 -- 4 [9] The QBSA ‘Rectification of Building Work’ Policy (the Policy) was gazetted. It is a statutory instrument by operation of law.9 Therefore, it must be applied in reaching the correct and preferable decision. It is a guideline policy which provides that a person who carries out category 1 (defined to include structural defects) or category 2 (defined to include faulty or unsatisfactory work which does not meet reasonable standards of construction, but does not fall in to category 1) defective building work should be required to rectify it unless rectification is an unreasonable remedy. The Policy acknowledges that all reasonably relevant circumstances are to be considered in deciding whether to issue a direction to rectify. [10] The Policy sets out circumstances for consideration in determining whether to issue a direction. It specifies that the circumstances might include delay by the homeowner in notifying the BSA of the defect. It nominates different time frames for category 1 (more than three months after the defect became apparent) and category 2 (more than six months after work was completed or left incomplete or exceeds 7 months, if the owner notified within 6 months) defects, after which delay might be relevant. Australian Standard 1839:1994 [11] The AS specifies standards in relation to ‘Pool Drainage’.10 Drainage is to be provided around pools to prevent damage from things including hydrostatic pressure. [12] Where it is required, the drainage, for a particular site shall include surface drainage11 to intercept water flowing across the pool site and subsoil drainage12 except where soil conditions make it irrelevant. Sub-soil drainage shall provide drainage over the whole of the under pool area through a free draining bedding material and a drain to direct water from the under pool system to an outlet pipe vented to atmosphere. [13] Fully piped sub-soil drainage is to be provided on some sites, including where the surrounding ground level rises above the normal operating water level. Where this is required, the invert level of the drain shall be at a depth below the pool water level to prevent external water pressure developing.13 [14] Figure 3 in the AS indicates when a pool is below natural ground level and fully-piped drainage will be required. Essentially, this will occur where a retaining wall or embankment is present from which the pool structure falls away, in which case natural ground level is taken from the top of the retaining wall. 9 Statutory Instruments Act 1992, s 7. 10 Exhibit 11, attachment AS/NZS 1839: 1994, paragraph 7.2. 11 Exhibit 11, attachment AS/NZS 1839: 1994, paragraph 7.2.2(d)(i). 12 Exhibit 11, attachment AS/NZS 1839: 1994, paragraph 7.2.2(d)(ii). 13 Exhibit 11, attachment AS/NZS 1839: 1994, paragraph 7.2.3. -- 4 of 14 -- 5 The contract for the pool [15] Factory Direct Pools trading as Atlantic Pools entered into a contract to supply and install the pool with Mr Aleem Daud and Ms Kerry Daud for $24,990.00. Some additional amounts were paid for excavation and crane costs over and above the specified price.14 [16] The contract between the parties dated 26 April 2009 has specific exclusions set out in clause 8. Clause 8 commences with ‘Unless specifically written (not verbal) as part of this contract, the following items shall not be attended to by the Pool Supplier and are the exclusive responsibility of the Client.’ [17] Clause 8 exclusions include ‘(j) landscaping work or landscaping design plans’ and ‘(p) Removal of underground water or above ground water using whatever method is deemed by the installer on the site. Such methods include, but are not limited to, spear pumps, submersible pumps, machine excavation, manual labour and placement of drainage materials. See Item 12 for charges.’ [18] Item 12 provides for excavation allowances included in the contract, in this case $880.00. It further provides that the installer may engage any machinery he deems necessary to complete construction and that ‘Any money in excess of the allowance are (sic) to be paid by the client and must be paid in full at the completion of the excavation..’ Clauses 4(a) and (d) also acknowledge that excavation costs in addition to those in 4(a) will be charged to the client at the rate specified in Item 12. [19] Clause 11 provides for client acknowledgements including in 11(c) that ‘The installation foreman has the clients (sic) authority to use any additional machinery deemed necessary to install and complete installation of the swimming pool…’ Clause 11(f) provides that costs in excess of the allowances made in the contract are payable by the homeowner. [20] There is no other provision in the contract about the costs of installing and placing drainage materials that may be required in the particular pool installation. [21] The Domestic Building Contracts Act 2000 applies to the contract, as it is a contract for domestic building work.15 Section 41 of that Act implies warranties into every regulated contract, which this contract is.16 These include a warranty that the work will be done in an appropriate and skilful way, and with reasonable care and skill.17 Contracting out is prohibited.18 14 Exhibit 14, and especially AD3. 15 Domestic Building Contracts Act 2000, ss 7-8, especially s 8(4). 16 Domestic Building Contracts Act 2000, ss 9, and schedule 2 definition of ‘regulated amount’. 17 Domestic Building Contracts Act 2000, s 44. 18 Domestic Building Contracts Act 2000, s 93. -- 5 of 14 -- 6 [22] The contract clauses discussed above, and in particular, 8(p) provides for removal of water from the site and associated drainage materials. It seems to me that the clause is broad enough to encompass full-piped subsoil drainage to remove water from the site on an ongoing basis, where site conditions dictate a requirement for it. Clauses 11 and 12 entitle further excavation costs to be charged by Direct Factory Pools. The costs of drainage materials are not referred to specifically in those clauses. Nevertheless, having regard to clauses 8(p), 11(c) and (f), and 12, I consider the proper construction of the contract to provide that where inadequate allowance has been made for excavation and associated drainage materials that the homeowner can be charged for it. [23] That said, it might reasonably be expected that the contract price given to a homeowner for installation is given after a site assessment. The costs associated with installing any essential drainage system as may be required having regard to the site conditions, for example, a fully-piped sub-soil drainage system, would reasonably be expected to be allowed for in the price. The pool, retaining wall and landscaping works [24] It is not controversial that at the time the pool was constructed it was contemplated that the retaining wall, which runs along two sides of the pool, and surface drainage would be installed by a landscaper and it was subsequently installed.19 [25] Mr Daud acknowledges a separate contract for landscaping with PPR Landscaping, which as he recalls, was recommended to him by Atlantic Pools.20 The invoices from PPR Landscaping include the construction of a retaining wall (including drainage to it), together with a ‘Spoon drain and 5 to 6 drains all connected to stormwater’.21 During construction of the pool, he says that the pool floated up in the hole after rain. Factory Direct then brought in another excavator, for which he paid additional costs over and above the quoted price, for the digging of drainage trenches.22 [26] Mr Templeton has a pool builder’s BSA licence which he has held for some 10 years. He was the nominee licensee for Factory Direct Pools at the relevant time. He says that the AS has been complied with. He says that landscaping was not the responsibility of Factory Direct Pools trading as Atlantic Pools under the contract with the Dauds. He relies upon clause 8 of the contract between the parties. Also, a representative of Factory Direct Pools wrote to the Dauds on 23 July 2009 pointing out that there is a drainage problem around the pool which it says needs to be ‘addressed immediately’ and ‘water …directed away from your pool area.’ 19 Exhibit 2, Exhibit 5, Exhibit 7 and Exhibit 14. 20 Exhibit 14. 21 Exhibit 14, Attachment AD5. 22 Exhibit 14, see especially paragraphs 9-13 and Attachment AD3. -- 6 of 14 -- 7 It suggests engaging a plumber/drainer, and states that Atlantic Pools cannot accept responsibility for any problems caused by this situation.23 [27] In any event, Mr Templeton says that he dug a trench of some 400 x 400 mm, which has been covered over is not in use and was not visible during the BSA inspection, and that he scraped back the ground so that it fell away from the pool, thereby draining water away from the pool. He says he did not install pipes into it as anything he put in would be destroyed by the landscaping. He did not discuss fully-piped sub-soil drainage with the owners as it was ‘not necessary’.24 He says that when he left the site after construction, there was direct fall from the street end of the pool, to the street. [28] He suggests that the problems experienced with the pool have occurred because of the retaining wall and landscaping works have not provided adequate drainage. He says that the ground level in front of the pool at the street end of the pool has been built up, so that it now slopes back in towards the pool and creates a dam, trapping water around the pool.25 [29] Mr Stimpson also has a BSA licence. He was engaged as the pool installer on the site by Factory Direct Pools. His evidence is that there were ‘numerous’26 conversations about drainage with Mr Templeton, but that they did not discuss fully piped sub-soil drainage or consider it.27 Consistently with Mr Templeton, he asserted that this was the case, because it was ‘unnecessary’ and would not apply because ‘we had lowered the ground level all the way around the pool, so subsoil drainage wouldn’t be an issue.’ Further, he said that ‘it was discussed with Mr Daud and Mr Templeton that drainage would be taken into account whilst the landscaping works were being constructed.’28 [30] His knowledge about the AS, with which he professed to be familiar, was tested.29 He was asked to describe fully-piped sub-soil drainage in the context of the AS. He was unable to do so comprehensively or convincingly. The best he could manage was, ‘drainage is to go around the pool underneath the soil to alleviate water problems.’30 He asserted he knew what it meant in the context of the AS, but was finding it difficult to describe without having it in front of him.31 [31] Consistent with the evidence of Mr Templeton and Mr Stimpson, Mr Daud says that at no time was sub-soil drainage discussed with him.32 He says that handover of the pool occurred on 13 September 2009. He noticed the 23 Exhibit 4. 24 Oral evidence given when Mr Templeton was recalled as a witness on 30 August 2012, transcript unavailable. 25 Transcript 12 July 2012, 46-47. 26 Transcript 12 July 2012, pages 89-90. 27 Transcript 12 July 2012, page 89. 28 Transcript 12 July 2012, page 89. 29 Transcript 12 July 2012, pages 88-91. 30 Transcript 12 July 2012, page 90. 31 Transcript 12 July 2012, page 91. 32 Oral evidence in cross-examination on 30 August 2012, transcript not obtained. -- 7 of 14 -- 8 bulge in the pool on 25 July 2010, and reported it to Atlantic Pools the following day.33 Atlantic Pools’ representatives inspected the pool over the next 2 months and on 3 October 2010, wrote to him advising that the issue was not covered by their warranty and suggesting he contact his household insurer about it.34 After his claim was rejected by his insurer on 26 October 2010, he subsequently complained to the QBSA on 21 December 2010.35 [32] The evidence about the events that occurred of Mr Daud, Mr Templeton and Mr Stimpson as discussed above is not inconsistent. I accept each as truthful about those matters discussed, although as will become clear, I do not accept Mr Templeton’s opinions about why the bulge in the pool has developed. The expert evidence about the cause of the ‘bulge’ in the pool wall, drainage and the AS [33] Mr Aldrich has been practicing as an engineer for about 10 years.36 He blames the retaining wall which has subsequently been constructed within the ‘zone of influence’ surrounding the swimming pool, leading to a larger than expected amount of stormwater runoff being deposited in the area where damage to the pool has occurred, instead of being directed away from the structure. [34] He considers the retaining wall may be leading to surcharge pressure on the swimming pool wall. He does not consider that an engineer has designed the retaining wall, and nor that it was constructed in accordance with the manufacturer’s requirements37 for the type of wall constructed. He also says the field gully drain does not appear to be draining to the street, compounding the problem. [35] He opines that it was reasonable for Factory Direct Pools to expect landscaping works to direct water away from the structure. He recommends removal and reconstruction of the retaining wall and reshaping of the ground in front of the pool. He described the 400 x 400 mm trench dug by Mr Templeton as sub-soil drainage and an alternative solution to fully piped sub-soil drainage indicted by Figure 3 of the AS.38 [36] Mr Hughes is a very experienced engineer who has been consulting about swimming pools since about 1973/1974, designed and constructed them and reported on defects many times.39 He opines that as the surrounding ground level rises well above the normal operating water level of the pool, to comply with the AS a fully-piped sub-soil drainage system should have 33 Exhibit 14, especially AD 7. 34 Exhibit 14, especially AD 8. 35 Exhibit 1, SOR 5. 36 Transcript 12 July 2012, 94-95. 37 He refers to the Adbri Masonry Segmental Wall Systems Technical Specifications. 38 Oral evidence in cross-examination on 30 August 2012, transcript not obtained. 39 Transcript 12 July 2012, 110 and Exhibit 12. -- 8 of 14 -- 9 been provided. He further says that whether or not surface drainage was inadequate, it was inevitable that ground water seepage would substantially saturate the surrounding soil or backfill of the pool. [37] In his opinion, Figure 3 in the AS, which requires full-piped sub-soil drainage system below the level of the pool shell,40 applies on the site, because it applies on sites where the surrounding natural ground level rises above the operating water level as it does on this site.41 In his opinion, it has not been complied with.42 He says that, irrespective of whether or not the retaining wall was in place,43 and irrespective of whether the sub-soil drainage had been working adequately,44 the deflection of the pool shell would still have occurred.45 In his view, even if the AS did not require fully-piped sub-soil drainage, the site required it in any event and without it the construction is defective.46 [38] In response to questions about whether, if the 400 x 400 mm trench referred to by Mr Templeton, had it been left in place it would have constituted fully-piped subsoil drainage, he responded that it was not subsoil drainage, whether piped or not, and was, because it was ‘at the surface’, surface drainage.47 He opined that it could not be an adequate alternative solution to the fully-piped sub-soil drainage required by the AS. [39] He also rejects the suggestion that a surcharge loading could transfer from the retaining wall to the pool. He explained that because of the granular fill, the weight of the retaining wall footings could not reach the point of the swimming pool where deflection has occurred.48 His report recommends fully-piped drainage and rectification of surface drainage. He concludes his report by saying that if the surface and subterranean drainage work he recommends is installed that the pool would be safe, and he would not expect structural deterioration. If this drainage is done, then the bulge (which may or may not be amenable to being pushed out) reverts to being a cosmetic defect only.49 [40] Although he considers the surface drainage was generally well done,50 he refers to a blocked or dislodged surface drain which is not working, allowing water to pond51 which he considers is the home owner’s responsibility under the contract and which must also be attended to. [41] If rectification does not occur including installation of sub-soil drainage, he considers that it is possible that the bulge in the pool wall will increase, 40 AS 1839: 1994 Figure 3 and Transcript 12 July 2012, 117. 41 Transcript 12 July 2012, 112-114. 42 Transcript 12 July 2012, 120. 43 Transcript 12 July 2012, 116. 44 Transcript 12 July 2012, 117. 45 Transcript 12 July 2012, 117-118. 46 Transcript 12 July 2012, 114. 47 Transcript 12 July 2012, 118-119. 48 Transcript 12 July 2012, 115. 49 Exhibit 11, paragraph 6.4. 50 Oral evidence in cross-examination on 30 August 2012, transcript not available. 51 Exhibit 11 and Transcript 12 July 2012, 116. -- 9 of 14 -- 10 and that the pool wall might crack where it meets the floor, as he has seen occur in another pool.52 He estimates the cost of rectification by installing the fully-piped sub-soil drainage from hundreds of dollars to several thousand dollars and considers that it is practical to do.53 [42] The recommendations of Mr Wenck broadly coincide with views proposed by Mr Hughes, and include installation of a permanent piped drainage system. Although Mr Hughes disagrees with his suggestion that water may percolate through rock,54 he opined that the conclusions of Mr Wenck are sound.55 [43] Mr Aldridge considers the proposed rectification impractical, and estimated it may cost some $5,000.00 to $10,000.00 or if done with a rock-saw, maybe $20,000.00.56 It is worth noting at this point that Mr Templeton gave evidence that he considered full-piped sub-soil drainage as described by Mr Hughes ‘utterly impracticable’ and the financial burden on customers too great, asserting that was why he dug the 400 x 400 trench.57 He thought the costs would be $3,000.00- $5,000.00 plus an operator, likely totalling about $10,000.00.58 [44] In relation to the Australian Standards generally, Mr Hughes says that they are produced by industry bodies with expertise. Acknowledging that some, including AS 1839:1994, are not mandatory, he says they represent the distillation of knowledge in an area.59 [45] I consider Mr Hughes’ evidence was compelling. He has considerable experience of swimming pools and the problems that may arise over almost 40 years of practice. He also had impressive knowledge of the AS and gave his evidence in a coherent, straightforward manner. His conclusions are consistent with those of another engineer, Mr Wenck, which is also reassuring. [46] Mr Aldridge, on the other hand was considerably less experienced, having been an engineer for about 10 years, and gave his evidence in a more qualified and apparently changeable way, suggesting that he agrees with Mr Hughes in relation to some matters when their evidence is quite at odds in many important respects. With one qualification, where the two disagree, I accept Mr Hughes’ evidence. [47] In relation to the costs of the rectification as suggested by Mr Hughes, he had not costed the work and his expressed view was an off-the-cuff estimate. The same can be said of the estimates given by Mr Aldridge 52 Transcript 12 July 2012, 119-120. 53 Oral evidence in cross-examination on 30 August 2012, transcript not available. 54 Oral evidence in cross-examination on 30 August 2012, transcript not obtained. Mr Hughes opines that the rocky ground at Satinash Street is relatively impervious. 55 Oral evidence in cross-examination on 30 August 2012, transcript not obtained. 56 Oral evidence in cross-examination on 30 August 2012, transcript not available. 57 Oral evidence in cross-examination on 30 August 2012, transcript not obtained. 58 Oral evidence in cross-examination on 30 August 2012, transcript not obtained. 59 Oral evidence in cross-examination on 30 August 2012, transcript not obtained. -- 10 of 14 -- 11 and Mr Templeton. I do not make any finding about the costs of the proposed rectification. Suffice it to say, that there are a variety of estimates which range from several hundred to $20,000.00 dollars. Is the pool construction defective? [48] Factory Direct submits that the contract was not a stand-alone contract for a pool, as it was being done in tandem with landscaping works, which were the subject of a separate contract. It submits, and I accept, that the responsibility for connecting ‘surface drainage’ lay with the owner or the landscaper. It further contends that when it left the site, the pool coping was above ground level but that ground level is now below the level of the coping. [49] However, I do not accept that was the case, because the ground level Factory Direct Pools refers to is not natural ground level and ignores the surrounding natural ground level. Photographs before the Tribunal clearly support Mr Hughes’ evidence that natural ground level was considerably higher. Hence the need for a retaining wall. Having accepted Mr Hughes evidence, I am satisfied that the surrounding natural ground level is well above the normal operating level of the pool, and it is this level which is relevant. Natural ground level has not changed. [50] Factory Direct Pools says that the need for a fully piped sub-soil drainage system under the AS only arose because of the works subsequently done by the homeowner and the landscaper. Again, on the basis of Mr Hughes’ evidence, I do not accept this is so. Site conditions required installation of fully-piped sub-soil drainage. [51] Factory Direct Pools submit that the AS has no legislative force, that nothing prohibits contracting out of it and the landscaper was to provide the drainage. It relies on the decision in Chicco v The Corporation of the City of Woodville,60 a personal injuries case in which members of the Court remarked that the Australian Standard referred to in that proceeding was a hearsay expression of opinion61 and did not have legal force, at all62 or in the context of the case.63 While acknowledging that it does not have legislative force, the QBSA says that the AS, which embodies expert opinion on the subject matter, should be applied and was not complied with. [52] While the contract for the pool does not include surface drainage, and there is no controversy that the landscaper was to attend to surface drainage, there can not be, and in any event, has not been, a contracting out of the implied warranties in the Domestic Building Contracts Act 2000. These warranties include that the work will be done in an appropriate and skilful way.64 I accept that the construction is defective, because having 60 (1990) Aust Torts Reporter 81-028. 61 (1990) Aust Torts Reporter 81-028, per Cox J at 67,895. 62 (1990) Aust Torts Reporter 81-028, per Millhouse J at 67,897. 63 (1990) Aust Torts Reporter 81-028, per King CJ at 67,895. 64 Section 44. -- 11 of 14 -- 12 regard to the site conditions a fully-piped subsoil drainage system, or other suitable engineering solution, was required but was not installed at the time of the construction of the pool. [53] The AS has not been imported into law, but embodies expert views about competent practice. While failure to comply with it may not result in a breach of a legal requirement of the installer, it may indicate that construction was not undertaken in an appropriate and skilful way, unless an alternative engineering solution was employed in the particular circumstances. Again, on the basis of Mr Hughes evidence that no adequate alternative engineering solution was employed, therefore I am satisfied that the pool was not constructed in an appropriate and skilful way, which has resulted in a defect, namely the bulge in the pool. [54] Neither Mr Templeton nor Mr Stimpson recognised and accounted for the circumstances of the site when installing the pool at Satinash Street. I accept that had they done so and complied with the AS, it would not have failed as it has, resulting in the bulge. Should I exercise the discretion to issue a direction to rectify? [55] The QBSA submits that there are no discretionary factors which militate against issuing the direction to rectify. It submits that its decision should be confirmed requiring rectification of this defect which it considers a category 1 defect because of the risk identified by Mr Hughes of the pool wall splitting. [56] Factory Direct Pools argues that it is a cosmetic defect only on the basis of comments of Mr Hughes in his report, where reference is made to a ‘cosmetic defect’, and that it is therefore a category 2 defect. Category 1 or category 2 defect? [57] Under the Policy, Category 1 defects are defects which are structural, and category 2 defects are not structural. Mr Hughes’ reference in his written report to a ‘cosmetic defect’ must be considered in the context of his report and oral evidence. [58] His report is clear that the defect would only revert to being ‘cosmetic’ once the subterranean drainage has been installed.65 In oral evidence, he spoke of a present risk of the pool wall splitting. Accepting this evidence, I am satisfied that the defect is a category 1 structural defect. Delay [59] The Policy suggests that delay might be relevant if the homeowner did not notify the QBSA of a category 1 defect within 3 months of its becoming evident. Mr Daud notified Factory Direct Pools immediately on discovering the bulge. They took from 26 July until 3 October 2010, and various inspections to inform him that they did not accept liability and 65 Exhibit 11, paragraph 6.4. -- 12 of 14 -- 13 suggest he claim on his household insurance. That claim process then occurred over October and was rejected in late October 2010. Mr Daud then made a complaint to the BSA on 21 December 2010. [60] The reasons for the delay in complaining to the QBSA after Factory Direct Pools denied responsibility, and after the rejection of the insurance claim was received are not explained. However, I do not think that delay, of less than 2 months, is of consequence in the circumstances of this matter. Mr Daud took immediate steps to notify Atlantic Pools, who have therefore been on notice of the problem from the time of its appearance. There is no evidence to suggest that they have been prejudiced in any way by the delay in the complaint ultimately being made to the QBSA. [61] In light of the serious structural nature of the defect, and the failure by Factory Direct Pools to construct the pool in an appropriate and skilful manner, I do not consider that the brief delay in the complaint being made to the QBSA militates against the making of a direction to rectify. The circumstances and the contract between the parties [62] Installation of the subterranean drainage at the time of construction, when the area in which it must be inserted was more readily accessible than it is now, may likely have been considerably less expensive. Although it appears the homeowner was not charged for the necessary sub-soil drainage because it was not recognised as necessary, he was charged additional costs for surface drainage (following the floatation of the pool shell after rain) which I accept on the basis of Mr Hughes’ evidence was inadequate for the site. [63] This is not a case where the homeowners refused to accept the advice of the builder to install the required drainage. Installing the appropriate sub- soil-drainage was not raised with or recommended to them. Indeed, the failure by Factory Direct Pools to construct the pool in an appropriate and skilful way contrary to the warranties implied into the contract from the operation of the DBCA, weigh in favour of exercising the discretion to issue a direction. [64] There are no circumstances related to the contract or terms of the contract which in my view weigh against issuing a direction to rectify. Is rectification an unreasonable remedy? [65] If the rectification is not done, there may be very serious consequences resulting from the risk of the pool shell splitting. [66] Mr Templeton considers Mr Hughes’ suggested remedy to be ‘utterly impracticable’. This statement is based on the cost of it. There is significant variation in the likely costs as suggested by Mr Hughes, Mr Aldridge and Mr Templeton. Despite this variation, the evidence of Mr Hughes, Mr Aldridge and Mr Templeton each confirms that rectification can be done, although the costs may not be insignificant. -- 13 of 14 -- 14 [67] On the evidence before me I accept that rectification is reasonable, and indeed necessary, to avoid further damage to the pool. The cost is uncertain but I do not consider that this uncertainty makes rectification unreasonable. [68] I am satisfied that it is appropriate to exercise the discretion to issue a direction to rectify. It remains for me to consider whether the direction to rectify should be in the terms issued by the QBSA. In my view the direction made by the QBSA should be set aside, and a substituted direction issued requiring rectification because the pool is defective, rather than because it is non-compliant with the AS. Orders are made accordingly. -- 14 of 14 --