Chris Neale Constructions Pty Ltd v Mannix [2011] QCAT 68

CITATION: Chris Neale Constructions Pty Ltd v Mannix [2011] QCAT 68 PARTIES: Chris Neale Constructions Pty Ltd v Stephen Thomas Mannix and Rebecca Ann Mannix APPLICATION NUMBER: BD304-09 MATTER TYPE: Building matters HEARING DATE: 27 and 28 October 2010 HEARD AT: Mackay DECISION OF: Mr James Allen, Member DELIVERED ON: 7 March 2011 DELIVERED AT: Brisbane ORDERS MADE: The Applicant pays to the Respondents the amount of $24,017.14 within 14 days. CATCHWORDS : Domestic building contract – Termination for alleged repudiation of contract by builder – Variations to contract – Defects Domestic Building Contracts Act 2000 APPEARANCES and REPRESENTATION (if any): APPLICANT : Mr Christopher Neale appeared for Chris Neale Constructions Pty Ltd RESPONDENT: Mr Stephen Mannix and Mrs Rebecca Mannix REASONS FOR DECISION INTRODUCTION [1] Chris Neale Constructions Pty Ltd (the Builder) agreed to build a house at 13 Kew Court, Glenella for Mr and Mrs Mannix. As sometimes happens in these matters the relationship between the Builder and the homeowners broke down and the Builder did not receive its final payment and Mr and Mrs Mannix have a set of defects which have either been rectified by them or still require rectification and for which they are seeking compensation from the Builder. [2] The contract was in the form of the HIA plain language contract and was executed on 30 May 2008. The purchase price was $340,753 plus GST of -- 1 of 15 -- BD304-09 / Page 2 of 15 $34,075 a total of $374,828. The works were required to reach practical completion within 220 days. Progress payments were to be made as follows: i) Deposit 5% $ 18,741.00 ii) Base 15% $ 56,224.00 iii) Frame 20% $ 74,965.00 iv) Enclosed 35% $131,189.00 v) Fixing 15% $ 56,224.00 vi) Practical Completion $ 37,485.00 The price included excess site costs in the amount of $48,037.00 as per the engineers design. Allowances were included for an exposed aggregate driveway and path of $10,000, air-conditioning of $9,000 and floor coverings (laying of supplied tiles and carpeting) of $9,000 with 20% margin and then 10% GST to be added to each of these. There was also an allowance of $660 for gable mouldings. There was one written variation to the contract for crimsafe doors to the family room and front entry in the amount of $313.20 dated 23 September 2008. The Builder in its application claimed that it had received an amount of $336,961.00 in respect of the contract and had issued a tax invoice no 158 for the practical completion claim in the amount of $37,867.00 on 8 May 2009. This was following a final inspection certificate being issued on 24 April 2009. That prior to the issuing of the final progress claim Mr and Mrs Mannix had taken possession of the property following the advice of their solicitor after terminating the contract due to alleged repudiatory conduct by the Builder. This had occurred between 5 May 2009 and 7 May 2009. The Builder refuted repudiation and termination of the contract. [3] Mr and Mrs Mannix alleged that having regard to the contract the works were defective and incomplete, that purported variations were unlawful and payment had been demanded in advance of work being carried out. There being no payment of the final tax invoice the Builder made an application to the former Commercial and Consumer Tribunal for payment of the invoice in the amount of $37,867.00 with interest of $595. [4] Mr and Mrs Mannix alleged that the final inspection certificate should not have been issued on 24 April 2009 for the following reasons: a) The slab certificate issued on 13 October 2008 and the final certificate were issued in error because the slab had not been constructed 350mm above ground level at the rear of house as per the building development approved plans; b) The applicant had not provided air-conditioning throughout as provided by the terms of the written contract; c) The applicant has not provided two wooden gables as provided by the terms of the written contract; d) The garage door was not working; -- 2 of 15 -- BD304-09 / Page 3 of 15 e) The double door leading into the utility room could not be opened from within that room; f) The certifier failed to have regard to whether there were any written variations in relation to the above. Mr and Mrs Mannix claimed that they were issued with invoice 158 on 21 April 2009 in the amount of $37,867.00 and that prior to that they had made payments totalling $318,603.80 in respect of previous progress claims. The contract according to Mr and Mrs Mannix had been negotiated through an agent, Vanessa Caffersky of Gold Award Homes and there were certain representations made during negotiations which were incorporated into the contract. These were as follows: i) The house would not be built on a standard slab costing $27,133.46 but rather on a slab to be a minimum of 350mm above ground level on the laundry side of the house and a greater step up along the eastern and southern side of the house, at an additional cost of $48,037.18; ii) Gold Award Homes would arrange for the design and construction of the house and would provide completed design documentation and details of the inclusions to the builder the identity of which Ms Caffersky would make known closer to commencement of construction; iii) The contract price would be $374,828 and no more; iv) The contract price would be inclusive of a 5,000 litre above ground water tank costing $5,000.00, and an exposed aggregate driveway and path at a cost of $10,000, fencing at a cost of $5,500, crimsafe (or similar) security door to sliders in family room at a cost of $1,500, crimsafe door to front door at a cost of $500, the supply and installation of seven Fujitsu air-conditioning units at a cost of $9,000, the purchasing and laying of carpet to bedrooms, utility room and formal lounge room and the cost of laying tiles (to be purchased by Mr and Mrs Mannix) in all other rooms at a cost of $9,000; kitchen cabinetry at $6,335.00; vanity cabinets at $1,138.50; laundry cabinet at $594.00; two gable mouldings at $660.00; and three phase power at a cost of $1,000.00 all of which work which was to be carried out by sub-contractors and that the Builder would charge Mr and Mrs Mannix 20% builders margin plus GST. Each of these allowances would be sufficient to cover the cost of each item and that in the likely event the actual costs came to a lesser amount the difference would be refunded by the Builder. v) That at Mr and Mrs Mannix’s request an extra allowance of 5% on each of the above items in (iv) had been added to make sure that the actual cost of providing each item would not exceed the allowed cost because Mr and Mrs Mannix would be borrowing most of the purchase price. [5] Mr and Mrs Mannix further claim that following the execution of the contract the Builder had sent Mr and Mrs Mannix on 26 June 2008 a copy of the footing plans to be submitted to Mackay Regional Council which showed the slab to be constructed 300 mm above ground level. By early September 2008 the Builder had carried out the excavation work and the slab was done. The Builder -- 3 of 15 -- BD304-09 / Page 4 of 15 arranged for the certifier, Mr Hallinan to certify the foundations and slab on 9 October 2008 and 13 October 2008 respectively. On 27 October 2008 the Builder told Mr and Mrs Mannix that the Builder had wrongly failed to construct the slab 350 mm above ground level, told them it was to late to do anything about it now and that the Builder would construct a drainage system along the laundry side of the house to alleviate any concern that they might have about excessive run off along the laundry side of the house, at no cost to the respondents. In mid October 2008 the Builder sent Mr and Mrs Mannix invoice 107 for slab stage completion in the sum of $56,224.00 and that account was paid by them on 17 October 2008. On 30 October 2008 the Builder sent Mr and Mrs Mannix invoice 113 for frame stage completion in the amount of $74,965.00. On 12 November 2008 Mr and Mrs Mannix paid $42,835.00 towards invoice 113 but withheld payment of the balance being $32,130.00 because frame stage had not been fully completed because the roof trusses were not up. Frame stage was certified complete by Mr Hallinan on 6 November 2008 “subject to rectification”. On 21 November 2008 the Builder sent Mr and Mrs Mannix invoice 123 for enclosed stage in the sum of $131,189.00 and they directed their bank to pay it not realising that due to the fact the external doors were not hung by 21 November 2008 and the roller door was not hung until late December 2008 the enclosed stage had not been reached. On 23 January 2009 the Builder sent Mr and Mrs Mannix invoice 135 for the fixing stage in the sum of $56,224.00 and on 4 February 2009 Mr and Mrs Mannix’s bank paid the Builder $34,962 and withheld $21,263 because at that time fixing work was not completed because the laundry bathroom and kitchen cabinetry was not installed. On 16 February the Builder sent Mr and Mrs Mannix a second invoice for fixing stage, invoice 142 in the sum of $53,392. The Bank wrongly and in error believed that invoice 142 was the first invoice that it had received from the Builder in relation to the fixing stage and on 26 February 2009 paid the Builder the sum of $34,652.80 and withheld the sum of $18,739.20 on the basis that fixing stage was still incomplete as tiles were not laid and the cabinets were not installed. [6] Mr and Mrs Mannix alleged that in October 2008 the Builder advised that the $9,000.00 allowance for air-conditioning was for purchasing and installation and that he “can’t buy air conditioning for that let alone install it” and that the respondents should buy the air conditioning units themselves and provide them for installation on 17 March 2009. Mr and Mrs Mannix then purchased air conditioning units at an approximate cost of $9,000 and delivered them to the Builder in February 2009. The Builder has installed the indoor units only and has never installed the outdoor units nor deducted any part of the $9,000 plus builder’s margin plus GST from the contract price for not having done so. On 6 March 2009 the Builder told Mr and Mrs Mannix that he could not construct the proposed driveway and concrete path for the price stated in the contract and that the Builder proposed deducting that price from the contract price and Mr and Mrs Mannix should arrange to carry out this work themselves. Further that the Builder could only provide one wooden slatted gable for the price set out in the contract and not two. [7] Mr and Mrs Mannix stated that the invoice 158 for stage 6 completion has not been paid because: -- 4 of 15 -- BD304-09 / Page 5 of 15 a) The house had not reached stage 6 completion in that the exterior air conditioning units had not been installed, power cables had been left unconnected and the garage door was us, b) The Builder did not give Mr and Mrs Mannix a defects document within the meaning of clause 25.4 (of the contract), c) The value of the contract work not carried out by the applicant and which exceeds the contract price exceeds the sum claimed, d) The Builder by its conduct repudiated the contract which repudiation Mr and Mrs Mannix accepted by email dated 5 May 2009. The grounds for repudiation were the failure of the Builder to construct the house on a slab 350mm above ground level so as to allow a minimum 350mm step up into the house; that variations to the contract were not in accordance with the Domestic Building Contracts Act 2000; that invoices 113, 123, 135 and 158 were sent prematurely and knowing that the sum claimed were not then due and owing; and that invoice 142 was sent by the Builder knowing that it was not entitled to do so. If the Builder asserts the sums allowed in the contract for driveway and path, air conditioning and floor coverings were provisional cost items, which Mr and Mrs M denied, the Builder breached section 59 of the Domestic Building Contracts Act 2000 by entering a regulated contract item purporting to state provisional sums less than the reasonable cost of providing same. The Builder’s agent, Hallinan wrongly certified on 13 October 2008 that the slab stage had been completed and on 24 April 2009 wrongly that the final stage completed when neither stage complied with the building development approval. [8] Mr and Mrs Mannix claim that clause 26 of the contract contemplated them accepting the Builder’s repudiation and taking possession of the house. However upon the Builder receiving notice of Mr and Mrs Mannix’s acceptance of its repudiation of the contract on 5 May 2009 it refused to give them the keys, barred their access to the property on 6 May 2009 with a security officer and contacted all of the locksmiths and most of the builders in Mackay and told them not to change the locks on the house or assist Mr and Mrs Mannix. Mr and Mrs Mannix took possession on or about 7 May 2009 and at that time defects existed and they have incurred costs in rectifying the defects. The original list of defects were in a schedule in an amount of $80,957.89. Mr and Mrs Mannix have also excavated land away from the laundry side of the house to give themselves the 350 mm of step up wanted but that excavation work has compromised the footings of the fence along the side of the house and they will need the opinion of an expert engineer in relation to whether the excavation work can be carried out safely. [9] Mr and Mrs Mannix have also made claims under the Trade Practices Act 1974 (Cth) in respect of the representations of Ms Caffersky and interference by the Builder with the locksmith who was to attend at the property to change the locks. The Tribunal’s jurisdiction under the replacement to that Act is limited to minor civil disputes and so these claims will not be dealt with here. [10] The Tribunal issued directions that Mr and Mrs Mannix prepare a defects list and gave the Builder an opportunity to reply. The Queensland Building Services Authority (QBSA) was then to appoint an inspector to conduct an -- 5 of 15 -- BD304-09 / Page 6 of 15 enquiry or investigation into the issues raised in the list of defects and provide a written report to the Tribunal. Mr and Mrs Mannix provided the list of defects to the Tribunal on 15 March 2010. In an affidavit in reply dated 22 March 2010, Mr Christopher Neale on behalf of the Builder alleged that many of the items were unfinished work which would have been completed in the ordinary course of the building contract if Mr and Mrs Mannix had not flagrantly breached the contract by forcibly taking possession. Further that if the building contract had been allowed to run to its closure, including being permitted to return to site, a normal list of defects could have been prepared within the required time frame of the contract and he could have attended to fixing of these. Had the contract been observed by Mr and Mrs Mannix, he stated he could have attended to completion of all unfinished work and remediation of genuine defects. Mr Michael Hulme of the QBSA inspected the property on 4 May 2010 in the presence of Mr Mannix and Mr Christopher Neale and provided a report to the Tribunal dated 15 May 2010 with his conclusions in regard to the defects notified by Mr and Mrs Mannix. Mr and Mrs Mannix had also engaged their own experts and tradespeople to inspect and provide quotes for work to be done. These will be discussed later. THE CONTRACT [11] The parties at the hearing agreed that the contract comprised the following elements: 1. HIA New Home Construction Contract dated 30 May 2008; 2. Project quote including Gold Award standard inclusions ; 3. Special conditions; 4. Preliminary plans drawn by Phoenix building design; and 5. Roadtest Report RES 0308/12224 including foundation investigation, contour and site detail plan, site development plan, footing design, wind class. The project quote set variations from the standard costs of building a home of the design chosen by Mr and Mrs Mannix as well allowances for certain items such as the air conditioning and driveway. The site plan attached clearly stated “engineering to be done so that floor level at laundry side to be 350 mm above ground level with bricked up base.” The general conditions dealt with variations to the contract in clause 20; prime cost and provisional items; practical completion 25, the owner taking possession in clause 26 and termination for default in clause 28. TERMINATION OF THE CONTRACT [12] On 23 April 2009 Mr and Mrs Mannix received the practical completion progress claim in the amount of $37,867.00. At that stage there were ongoing issues with the plumbing and the air conditioning that had not been finalised. -- 6 of 15 -- BD304-09 / Page 7 of 15 Mr and Mrs Mannix contacted a lawyer to assist and as a result the Builder was advised that the contract was terminated due to the Builder’s breach of contract. Mr and Mrs Mannix then went into possession without having paid any of the balance of the Builder’s final invoice. Clause 25 of the contract stipulates the requirements which need to be met by the Builder before a final claim can be made. These include that the building has reached practical completion, which is defined in schedule 2 as: The stage when the works have been completed in accordance with this contract and all relevant statutory requirements apart from minor defects or omissions; and Reasonably suitable for habitation. In this case the Form 21 final inspection had not been obtained as at that date, it was not obtained until 24 April 2009 and so not all statutory requirements had been met. Apart from that the Builder had also not complied with other requirements of clause 25 in terms of not providing a notice of practical completion to Mr and Mrs Mannix and had not given them a defects document. Where the owner believes that practical completion has not been reached they must give the Builder a written notice stating the owner’s requirements for the works to reach practical completion with reference to contract provisions within 5 days of receiving the notice of practical completion. In this case while the Builder was not entitled to make the final claim. [13] Mr and Mrs Mannix could at this point have elected to issue a notice under clause 28 requiring the Builder to remedy its breach of the contract and if the Builder had not rectified the breach or commenced to within 10 days Mr and Mrs Mannix could have ended the contract. By ending the contract under clause 28 Mr and Mrs Mannix would then have been entitled to go into possession of the house. Until the contract comes to an end the Builder has under clause 10 of the contract exclusive possession of the site to carry out the works and the owner may only have access to the works under the Builder’s supervision. Mr and Mrs Mannix as outlined above on the advice of their solicitor did not follow this course and terminated the contract without giving the Builder an opportunity to remedy its breach. While it is clear that the Builder was in breach of the contract the termination was wrongful as it was done without allowing the Builder the opportunity to remedy its breach. For this reason Mr and Mrs Mannix will not be entitled to any of their costs for securing the property, replacing the water meter or changing the locks. That is not to say that Mr and Mrs Mannix are not entitled to any redress in this matter. There are substantial defects with the building work for which they will need to be compensated and these will be dealt with later. [14] Where the owner has wrongfully taken possession the Builder has certain rights under clause 26 of the Contract. The Builder had tried to assert that it would no longer be liable or responsible for any of the works. This clearly only relates to works which are omitted as a result of the Builder treating the owners’ action as a variation of the contract. In this case the works were close to practical completion and the only works to be done were the installation of air conditioning. The Builder though is entitled to damages and those damages would be in respect of the amount of the claim for practical completion. While the builder did not comply with the requirements of clause 25 in regard to -- 7 of 15 -- BD304-09 / Page 8 of 15 practical completion the termination of the contract by Mr and Mrs Mannix meant that it would not be able to do so, in particular in regard to the defects list. It is clear in this case that a very thorough investigation of defects has occurred and these will be dealt with later. While the original claim was in the amount of $37,867.00 the Builder during the course of the hearing agreed to reduce his claim to an amount of $12,944.60 which included an allowance of $11,880 for the air conditioning, $13,200 for the driveway, $23,929.40 for the foundations and $200 for missing tiles. Mr and Mrs Mannix were in general agreement with this except that they had incurred expenses of $450 in respect of the tiles. The Tribunal will allow to the Builder an amount of $12,694.60 in respect of its claim. THE DEFECTS [15] The premises were inspected by Mr David Maynard a builder on 8 May 2009. Mr Maynard has also quoted on repairs to the property. Mr Maynard noted that many of the internal doors were bowed and split and that there were many defects in the tiling. Mr Maynard at the hearing advised the tribunal that he was not a licensed tiler and so his opinion and quotation in regard to tiling were not taken into account. Mr Maynard quoted an amount of $7,411 to repair the doors to the premises. Mr Neale at the hearing questioned the costs to do the repair work to the doors accepted that the work needed to be done. Mr Neale stated that in his opinion a reasonable amount for the work to be done in respect of the doors would be $5,000. A further inspection of the premises was carried out by Mr Paul Ingledew, builder on 15 May 2009. Mr Ingledew provided a report dated 7 September 2009 and gave evidence at the hearing. Mr Ingledew observed many defects in the construction of the dwelling in particular relating to tiling and plumbing, damage to the garage door, paint defects, electrical defects, bowing to the internal doors and ceiling insulation. He stated that he did not observe that the damp proof course was defective or bridged and that the site appears to be poorly drained. He considered that the house was in below average condition for a house of its type and age. While acknowledging many of these defects at the hearing, including the insulation of the roof, Mr Neale stated that he should have been given the opportunity of rectifying them. This opportunity was lost though through the course of events culminating in the termination of the contract. Mr Russell Perkins, engineer inspected the premises on 24 May 2010 and provided an initial report dated 9 June 2010. Amongst other matters Mr Perkins noted that the roof battens were timber and not as prescribed in the contract steel and that they had not been secured properly to the trusses. He also noted that the gable over the garage window was misaligned. Mr Neale accepted these defects at the hearing. To date Mr and Mrs Mannix have expended the following amounts on rectification works: Rectification of the garage door $3,388.00 Rectification of garage entrance $ 291.50 Rectification of storm water pipes and plumbing faults $6,891.51 Stormwater pits $ 115.41 -- 8 of 15 -- BD304-09 / Page 9 of 15 Sleepers to retain timber fence $ 523.40 Removal of excess fill $ 847.00 Mr Stephen Wales, the plumber who did the original work on the premises provided a statement to the tribunal confirming that in his view all of the work he had done had been passed by Council complied with the standards. He also stated that in regard to any of the defects with leaks etc these could have easily be attended to. The evidence of Mr and Mrs Mannix clearly show that there were many ongoing problems with the plumbing and drainage. The plumber who completed the defects work Mr Keith Ringuet gave evidence at the hearing and Mr Neale accepted that the work which Mr Ringuet had done was required to be done. Following the hearing Mr and Mrs Mannix were directed to provide quotes in respect of the defects which had been identified by the BSA in their report and other agreed defects. They have obtained a quote from Mr Maynard to repair the gable and battens of $3,811.50. There is also a quote of $3,356.10 for roof insulation from Shane Reginato Plumbing Pty Ltd. Mr and Mrs Mannix also provided a further quote in the amount of $8,827 from Mr Maynard in respect of another alleged roof defect he had identified. As the house has been inspected by many people and this issue has not arisen before the Tribunal does not consider that it constitutes a defect as such and there will be no amount payable in respect of it. The Tribunal notes that Mr and Mrs Mannix have only been able to produce one quote in respect of these matters. They have said this is due to difficulties they have had engaging tradespeople willing to deal with them in Mackay as a result of perceived conflicts of interest as they also have dealings with the Builder. [16] As mentioned a report was prepared for the Tribunal by Mr Michael Hulme of the Queensland Building Services Authority. This was based on a very extensive list of defects identified by Mr and Mrs Mannix. This report has been done on a room by room basis in accordance with the defects list and does not deal with trades separately. Mr and Mrs Mannix were directed at the end of the hearing to provide two quotes in respect of all items listed as defects or contractual matters in the report of Mr Hulme. While there are many minor paint defects in the house the complaints that there are insufficient coats of paint in the house made by Mr and Mrs Mannix was referred to the Tribunal by Mr Hulme. There was no evidence presented at the hearing to support this allegation yet Mr and Mrs Mannix have provided a quote for a complete third coat of paint in the amount of $8,756.00. There is no justification for this and it will not be allowed, but if Mr and Mrs Mannix had been able to provide a quote for rectification of the painting defects set out in Mr Hulme’s report then the Builder would have been required to pay for them. In the same way there were numerous defects in respect of the floor tiles but Mr and Mrs Mannix have obtained a quote from Protile for the replacement of all floor tiles on the basis that the tiles are no longer available. The defective tiles have been clearly set out in the report form Mr Hulme. The email from Beaumont Tiles states that the stock Beaumont Tiles has would be insufficient to complete your project without giving details of the size of the project. The amount claimed for replacement of all floor tiles will not be allowed. The quote also includes an amount for repairs to skirting tiles and bath tiles in the amount of $3,444.50 and -- 9 of 15 -- BD304-09 / Page 10 of 15 this will be allowed. If Mr and Mrs Mannix had been able to obtain a quote in respect of the defective floor tiles the Builder would have been required to pay that amount. A quote has been obtained from SJ & DA Mau Plastering part of which relates to defects including the failure to backblock plasterboard in the ceiling and repair holes in walls and to re-sheet bulkheads. Based on the quote provided the Builder should be required to pay for work in respect of items 1, 3, and 4 of that quote. THE FOUNDATIONS AND SLAB [17] All of the initial dealings in relation to the contract for the house and preparation of floor plans and engineering were with representatives of Gold Award Homes in Brisbane, in particular Ms Vanessa Caffersky. From the course of emails between those parties and the initial agreement it is clear that Mr and Mrs Mannix wanted to have the slab built up by 350 mm due to the recent floods in Mackay. This is reflected in the engineering design for the foundation and slab prepared by Roadtest in accordance with their report of 24 April 2008. The engineering design of Roadtest called for a build-up of the slab with fill to meet the requirements of Mr and Mrs Mannix and also was designed for a site with a P classification due to there being uncontrolled fill on the site. The Builder held a meeting with Mr and Mrs Mannix on the site according in early September and advised them that a cut and fill should be done instead of the use of fill as the fill would result in the driveway being too steep. Mr and Mrs Mannix agreed to this but no variation of the contract was prepared. Mr and Mrs Mannix contend that it was still their requirement and expectation that the slab be built up by 350mm. It was only later when the slab was completed that the Builder advised that the slab would not be built up and instead offered to put increased drainage to alleviate any concern. The builder contended that it was never a term of the contract that the slab be built up and noted that this would have required a step at the laundry door in accordance with the Building Code of Australia. Having regard to the email and documentary evidence provided by Mr and Mrs Mannix and the fact that the contract price was increased by an amount of $48,037 for excess site costs the Tribunal is satisfied that the raising of the slab was a term of the contract. Mr and Mrs Mannix have been credited an amount of $23,929.40 in the final progress claim in respect of the anticipated excess site costs which were not required as a result of the changes to the site profile and foundations. [18] There are other issues though in regard to the variation of the works which have been raised in the reports of Mr Russell Perkins, engineer. In particular that the cut and fill operation was not contemplated in the engineering design for the foundations and slab and that these changes to the site should have been brought to the attention of the engineer and a new Form 15 should have been obtained in regard to the foundation and slab design. The Builder stated that the foundations and slab had passed the required inspection and that to the extent necessary Roadtest had been involved in the process. The Tribunal made a direction that the Builder provide confirmation the footings and slab as built are in accordance with the footings and slab design by Roadtest for the property with particular reference to the site contours following the cut and fill of the site by the applicant. The Builder provided a letter from Roadtest dated 1 November 2010 which relevantly states: -- 10 of 15 -- BD304-09 / Page 11 of 15 Our design was based on a site where only fill material was imported onto site to create a building platform and to decrease wastage materials a retaining edge beam system was to be incorporated below the slab edges.. .. Where the site is to be prepared as a cut/fill site and the platform extends a minimum of 1.0m past the proposed building limits, the cavity brickwork may be removed from our design detail as needed to reach required finished floor level heights and the footing remain with the same size and reinforcement specifications.. In the location where the footings are now supported in natural materials due to the cut materials, support piers may be omitted from the design.. Should you need further clarification on design alterations or wish for us to provide you with amended designs to suit the proposed cut and fill, please do not hesitate to contact us. This correspondence was reviewed by Mr Russell Perkins and he commented as follows in a report dated 12 November 2010: The Roadtest advice dated 1 November 2010 confirms my previously advised interpretation of the Roadtest slab and footing design which is that piers are required to support the perimeter footings of the house and that these piers are to be founded into natural soil. .. The last sentence of the Roadtest letter of the 1 November 2010 confirms my previous advice that a revised design (and therefore a revised Form 15) should be provided by Roadtest for the amended design and that this is required as a result of the “as constructed” cut and fill which has been carried out since the Roadtest site classification and engineering design was completed. I am concerned that Roadtest refer to the cut and fill as “proposed” which suggest that Roadtest may not have been made fully aware of the current status of the works and the need for confirmation of existence of the piers. Mr Perkins also considered that an amended Form 16 should be issued by the private certifier to confirm that the bulk piers to the perimeter of the house had been constructed. It is clear that as a result of the decision to cut and fill the site there has been major changes to the site characteristics which were not contemplated when the engineers designed the plans for the footings and slab. The Builder was given an opportunity to satisfy the Tribunal that the footings and slab as constructed were in accordance with the footings as designed by Roadtest. The document provided from Roadtest makes it clear that there will be changes to the foundations as a result of the cut and fill and that Roadtest has not been involved in providing an amended engineering plan in that regard. Mr and Mrs Mannix have real concern about the integrity of the foundations of their house which unfortunately has not been able to be addressed in this application. There needs to be ongoing investigation into this issue and the matter should properly be dealt with by the Queensland Building Services Authority. -- 11 of 15 -- BD304-09 / Page 12 of 15 BRICKWORK C2 RATING [19] Mr and Mrs Mannix alleged that the brick veneer has not been tied to the house to match the C2 wind rating which had been prescribed by Roadtest and which had been incorporated into the contract in the Project Quote. At the time of the hearing this was based on a test with a stud finder which had been performed by Mr Mannix. This was one of the items listed in the defects list upon which Mr Michael Hulme provided his report to the Tribunal. Mr Hulme stated the following in regard to this issue in his report dated 15 May 2010: The respondent also advised at the time of the inspection that he is of the belief that brick ties have not installed at spacings required in the Building Code of Australia. This would require destructive testing to fully determine if the ties have been installed in accordance with the BCA. The authority undertakes such testing on the understanding and agreement by the homeowner that if no defect is identified, the owner is responsible to rectify any damage caused by the investigation. Mr and Mrs Mannix in accordance with the direction given at the hearing that provide quotes in respect of the defects and contractual items listed in the defects list have provided a quote from Q & M Camilleri to replace all of the brickworks in the premises for an amount of $44,742.50. This is supported by a report prepared using a wireless inspection camera which indicates that the ties which should be placed at 600 x 600 intervals have been placed at 600 horizontal and 860-1030 intervals. The report also does not indicate the extent of any problem. This report does not have an author and may have been prepared by the tradespeople who quoted for the brick work. At the hearing the Builder confirmed that to his knowledge the bricklayer had used ties appropriate to a C2 rating. As well as the quote for repairs to the brickwork there are consequential quotes for the following: plumbing $1,160.70 and air- conditioning $5,390.00. Having regard to the level of expenditure contemplated here the proof required that the work is required must be high. The Tribunal is not satisfied that there is sufficient proof at this stage to justify this expenditure and so the claim will not be allowed. That is not to say that the matter should not be investigated further by referral to the Queensland Building Services Authority for the invasive testing which is stipulated by the Authority. DAMP PROOF COURSE AND MOULD ISSUES [20] The initial building inspection by Mr Paul Ingledew raised no issues in regard to the damp proof course of the house. Mr and Mrs Mannix noted on their defects list that the damp course sticks out from brick work around the house. The report of Mr Michael Hulme dated 15 May 2010 confirmed that sections of the damp proof course is evident around the perimeter of the dwelling protruding past the bed joint of the brickwork resulting in unsightly appearance and that this item requires rectification. At the request of Mr and Mrs Mannix a further inspection and a report was prepared by Mr Brian Hicks dated 13 September 2010 based on visual inspections carried out on the wall cavities within several rooms of the house and there was found to be no mould or moisture within the -- 12 of 15 -- BD304-09 / Page 13 of 15 wall cavity. Although when a water test was conducted on the garage door jamb there was found to be some wetness on the carpet in the bedroom next to the garage. It was also noted that weep holes had not been provided under all window sills and an excessive amount of mildew was observed and photographed on the brickwork outside the lounge room window. When a water test was conducted though there was not ingress of water and the weep holes in the external brickwork outside the lounge room appear to be working adequately. Mr Neale at the hearing stated that the particular type of window which had been used for the house was Porters Raven which has a damp course attached to them. Despite this there is clearly a build up of mould on the lounge room window sill which has not been explained. Mr and Mrs Mannix had Mr Ray Mustey a waterproofing specialist investigate the issue further and he found on removing several bricks from window that the damp course was blocked by mortar. This work should therefore be carried out to repair the brickwork in that area. According to the quote provided by Q & M Camilleri this work would cost $45. Mr Mustey in his report also examined the damp proof course. He noted that the fabric of the damp proof course was carried outside the outer face of the brick work. Mr Mustey also noted that weep holes were blocked by mortar. He stated that any ground moisture and moisture from outside making contact with the polyfabric material could have a wicking effect. Mr Mustey’s solution is to replace the damp proof course. For this with other work in regard to weep holes for the windows Mr Mustey has quoted $26,000.00. Mr Mustey is quoting on a job and is not an expert, the problem with the damp proof course protruding was already known and would be expected that the solution would be trim the damp proof course. Mr Mustey has also examined the floor slab at the point in the garage where it is damp and the area of the garage door jamb which may be leaking into a bedroom. The replacement of the damp proof course would also have required a new termite treatment system to be installed at a cost of $5,522.00. The Tribunal does not except that there is sufficient proof to justify the work contemplated and the rectification should have been that required to cure the defect identified by Mr Hicks. If Mr Mustey were to perform the work to seal the garage door jamb and slab where it was damp in the garage then Mr and Mrs Mannix would be entitled to payment of this amount [21] The Tribunal is aware of Mr and Mrs Mannix’s concern about the issue of mould in the house and that any point where moisture can enter the house needs to be rectified. Mr Hicks in his report of 13 September 2010 noted that the moisture readings on the internal walls were on the higher end of the scale. Subsequently the house was inspected by Ms Narelle Quick, an occupational hygienist. She tested the walls more thoroughly and found that: All moisture levels were within the normal range. Borderline moisture levels were detected to low level timber work within the garage and below the window within bedroom 2. Ms Quick did find the presence of mould in some bags in a hall cupboard and recommended that the bags be disinfected. Ms Quick noted that there could be a link between mould and health issues. This is of concern to Mr and Mrs Mannix as their sons are displaying symptoms of allergies which may be related to mould and the Tribunal appreciates this concern. Mr and Mrs Mannix have obtained an indicative quote to dry out the house which would -- 13 of 15 -- BD304-09 / Page 14 of 15 involve removing up to 1.2 metres high of the internal plasterboard and having it replaced. The cost of drying out the house was between $6,000 and $25,000 and the cost to replace the plasterboard was in the vicinity of $10,000 with a further $11,819.50 quoted by DMR Constructions to remove and refit the skirting boards and prepare timber frame for plaster. There has been no evidence presented to the Tribunal that this work is required. In particular the walls are within normal moisture levels and no claim will be allowed in that regard. Mr and Mrs Mannix received an earlier version of Ms Quick’s report which noted that some of the moisture levels were borderline nevertheless they were still within the normal range. There has also been a claim of $6,979 in respect of replacing the carpet throughout the house due to water/moisture mould issues. There has been evidence provided by Mr and Mrs Mannix to substantiate this claim and it will not be allowed. This is not to say that these issues are not real but that they require further investigation by the Queensland Building Services Authority so that the extent of the problem can be identified. ANCILLARY CLAIMS AND COSTS [22] Mr and Mrs Mannix made a claim for rental during the period that work would need to be done on the house in the amount of $16,900 based on a 26 week absence from the house. This is an ambit claim and as the amount of work which is to be done is greatly less than they claimed the claim will not be allowed. There was also a further claim for cleaning the house twice. It would be normal that if tradesmen performed work they would attend to the cleaning of the area around where they have done work and so this claim will not be allowed. Mr and Mrs Mannix have also made a claim for their legal costs. The Tribunal notes that costs relate to the period 29 April 2009 to 19 May 2009 which is the period of the termination of the contract and Mr and Mrs Mannix taking possession of the house. They do not relate to legal costs incurred in representation before the Tribunal and are therefore not allowable. They have also claimed costs in respect of their witness Mr Russell Perkins for his reports in the amount of $3,300.00 and appearance at the Tribunal of $3,480.13. The Tribunal notes that the engineering issues in regard to the foundations of the dwelling were complicated and it was of assistance to the Tribunal to have the benefit of Mr Perkins. The Tribunal also notes that the requirement to have such expert evidence was the failure of the Builder to ensure that the impact of changes to the site in regard to the cut and fill of it were communicated to Mr and Mrs Mannix. The Tribunal will therefore allow Mr and Mrs Mannix to claim for the costs for Mr Perkins report and appearance at the Tribunal. [23] The builder was directed to obtain confirmation that the Plasmite termite barrier is fully operational from J&B Pest Control. This was as a result of the slab needing to be cut at the garage as the door was set out in the wrong place. J & B Pest Control confirmed by letter dated 28 October 2010 that the work performed on the carport was left unfinished until the job was repaired by the concretor, and then continued to install the system on the way it was supposed to be installed, just before the face bricks were installed. The Tribunal is satisfied that the termite barrier has not been compromised as a result of the work required to rectify the slab. The Builder was also required to obtain confirmation from Phoenix Building Design that approval has been given by them for the substitution of wooden for metal battens in the roof. This was an issue as there was a possibility that if the substitution was not approved the -- 14 of 15 -- BD304-09 / Page 15 of 15 house designer’s liability may have been waived. Such confirmation was received from Phoenix Building Design by letter dated 16 November 2010. The Tribunal is satisfied that this issue has been properly dealt with. CONCLUSION [24] The Tribunal has determined that Chris Neale Constructions Pty Ltd is entitled to an amount of $12,694.60 in respect of its claim. This is subject to the amounts allowed to Mr and Mrs Mannix in respect of defects and costs. The amounts allowed in that regard and witness costs as follows: Repairs to internal doors $ 7,411.00 Rectification of garage door $ 3,388.00 Rectification of storm pipes and plumbing faults $ 6,891.51 Rectification of garage entrance $ 291.50 Clean and repair floors ready for carpet $ 281.69 Stormwater pits $ 115.41 Sleepers to retain timber fence $ 523.40 Removal of excess fill $ 847.00 Repair gable and battens $ 3,381.50 Repair roof insulation $ 3,356.10 Repairs to skirting and bathroom tiles $ 3,444.50 Mr Russell Perkins $ 6,780.13 Total $36,711.74 The Builder is required to pay the amount of $24,017.14 to Mr and Mrs Mannix in respect of the difference between the amount of its claim and the defects and costs allowed to them. There are also the items listed in the report of Mr Hulme which have been accepted by the Tribunal as defects such as the painting, tiling and plastering for which Mr and Mrs Mannix are entitled to a remedy but for which they have not provided an acceptable quote for the rectification of. While the Tribunal cannot order an amount for compensation in respect of those items that is not to say that they are not defects and this has been accepted by the Tribunal. These matters should now be referred to the Queensland Building Services Authority and they can be dealt with in that manner. -- 15 of 15 --