Deen v Queensland Building Services Authority & Ownit Homes Pty Ltd [2010] QCAT 502

CITATION: Deen v Queensland Building Services Authority & Ownit Homes Pty Ltd [2010] QCAT 502 PARTIES: Mr Mohammed Abdul Gaffar Deen v Queensland Building Services Authority and Ownit Homes Pty Ltd APPLICATION NUMBER: QR183-08 MATTER TYPE: Occupational regulation matters HEARING DATE: 23 March 2010 HEARD AT: Brisbane DECISION OF: Mr Scott Gregory DELIVERED ON: 11 October 2010 DELIVERED AT: Brisbane ORDERS MADE: 1. The Review Application is dismissed; 2. The decision of the Authority of 11 July 2007 is confirmed; and 3. In view of section 100 of the QCAT Act 2009 I make no order as to costs CATCHWORDS : Review of Respondent’s decision not to issue a direction to rectify: whether defective building work Queensland Building Services Authority Act 1991, section 72. Braund, J&D v Queensland Building Services Authority [2007] QCCTB 100; Queensland Building Services Authority v O’Brien & Ors [2002] QDC 329. APPEARANCES and REPRESENTATION: APPLICANT : Mr Mohammed Abdul Gaffar Deen represented Andrew Carroll of Carroll Fairon Solicitors. FIRST RESPONDENT: Queensland Building Services Authority represented by Angela Cochrane. SECOND RESPONDENT: Ownit Homes Pty Ltd represented by Adam Carlton-Smith of Hopgood Ganim Lawyers. -- 1 of 8 -- QR183-08 / Page 2 of 8 REASONS FOR DECISION 1. The Applicant, Mohammed Abdul Gaffar Deen (”Mr. Deen”) is the owner of a residential property at 3 Waterville Close Oxley Queensland (“the Property”). 2. Mr Deen applied to the Commercial and Consumer Tribunal to review a decision of Queensland Building Services Authority (“the Authority”) not to direct rectification or completion of Tribunal work under section 86 (1) (e) of the Queensland Building Services Authority Act 1991 (“the QBSA Act)”. 3. Jurisdiction to resolve matters of this type has now been transferred to Queensland Civil and Administrative Tribunal (“QCAT”). 4. Both parties agree that in early 2005 Mr Deen and Ownit Homes Pty Ltd (‘the Builder”) entered into a building contract for residential construction work at the Property. 5. On or about 5 September 2007, Mr. Deen made a complaint to the Authority and, subsequently the Authority investigated the complaint and having engaged experts to undertake a test of the sanitary and stormwater drainage and to investigate and report on geo-technical and structural issues authority advised Mr. Deen on or about 11 July 2008, that no further action would be taken due to the defects being “owner responsible”. 6. The plumbers retained by the Authority to test the sanitary and stormwater drainage advised that: • a final plumbing inspection had never been carried out on the property; • stormwater system failed the test; and • there were several broken sections in the main line and storm water drain lines close to the dwelling. The geo-technical and structural consultants retained by the Authority reported that “distress and damage” to the Property” consists of: • cracked brickwork; • opening of joints in brick walls; • cracked plaster wall linings and corners of openings; • cracked ceiling linings; • cracks in cornices; and • doors out of square in openings.” -- 2 of 8 -- QR183-08 / Page 3 of 8 7. Mr Deen lodged his review application within time. 8. The Commercial and Consumer Tribunal ordered the preparation of a joint engineering report and, subsequently such a report was obtained (“the Joint Engineering Report”) and is dated 6 July 2009. 9. The Builder was joined as a party to these proceedings on 3 March 2010. 10. At the hearing, which took place on 23 March 2010, Mr Deen submitted that both be and the Authority agreed that the house on the Property had heaved away from the south-east corner of the Property and referred to the Joint Engineering Report which, he submitted, concluded that in the opinion of those engineers: “...the pipes under the laundry and bathroom broke due to accidental damage caused by the builder during the initial concrete pour or the effect for the reactive foundation on vulnerable buried pipe work, which probably occurred in the area of the over flow relief gully and that the ultimate cause of the broken pipes was the latter of these alternatives and that this was probably due to local swelling subsoil underneath the base of the overflow relief gully which in turn, heaved the laundry waste drain to break so that the water the from the drain interests is to the drain bedding sand in the subsoil.” This interpretation of the Joint Engineering Report was contested by the Respondents 11. The Authority, in its Statement of Reasons for the Decision, which is under review and were dated 7 October 2008, concluded as follows: “4.1 The relevant policy is the Rectification of Building Work Policy (the " Defects Policy ") effective 1 September 2004. 4.2. The Authority has inspected the Site and determined that subsidence and/or heave has occurred. 4.3 The Authority must, in determining whether to issue a Direction to Rectify take into account the following factors: 4.3.1 Is the work defective under the relevant policy; and 4.3.2 Is it reasonable in the circumstances issue a Direction to Rectify the Builder. 4.4 In relation to the nature of the work undertaken at the Site, the Builder has, in the Authority's opinion, complied with the required standards and reports when preparing and pouring the slab and has not undertaken any work that would be deemed defective under the Authority's Defects Policy or for which the Authority would normally issue a direction. 4.5. The Authority concluded that damage to the dwelling of the Site, being subsidence and/or heave, is a result of the strip drains being installed by, or on behalf of, the owner with inadequate water -- 3 of 8 -- QR183-08 / Page 4 of 8 diversion, resulting in water ingress into the soil in the surrounding area causing the subsidence/heave of the dwelling. 4.6 Section 72(1) of the Queensland Building Services Authority Act 1991 provides the Authority with the power to ‘... direct the person who carried out the building work to rectify the building work...” 4.7 In the circumstances, the Authority concluded the Builder was not responsible for the defective work. Therefore, the Authority must not issue a Direction to Rectify to the Builder.” 12. The QBSA Act sets out the obligations of the Authority, and thus of this Tribunal (which has, on review, the same powers and obligations as the Authority). 13. Section 72 of the QBSA Act relevantly provides: 72 Power to require rectification of building work (1) If the authority is of the opinion that building work is defective or incomplete, the authority may direct the person who carried out the building work to rectify the building work within the period stated in the direction. (2) In deciding whether to give a direction under subsection (1), the authority may take into consideration all the circumstances it considers are reasonably relevant, and in particular, is not limited to a consideration of the terms of, including the terms of any warranties included in, the contract for carrying out the building work. ... (14) The authority is not required to give a direction under this section to a person who carried out building work for the rectification of the building work if the authority is satisfied that, in the circumstances, it would be unfair to the person to give the direction. Example for subsection (14)— The authority might decide not to give a direction for the rectification of building work because of the amount payable but unpaid under the contract for carrying out the building work. 14. In its formal submission the Authority referred to the matter of Braund, J& D v Queensland Building Services Authority [2007] QCCTB 100 and statements in that decision of Member Butler (as he then was)(at paragraph 45) that: “[t]he applicant bears the onus of proof on the balance of probabilities in these proceedings. Therefore, they must prove to the necessary standard that there was defective building work within the meaning of section 72(1).” and at paragraph 20 that: -- 4 of 8 -- QR183-08 / Page 5 of 8 “It is the work carried out by the builder, not the structure itself, which must be proven to be defective. In my view, for a builders work to be defective there must be fault on the part builder.” 15. McGill DCJ pointed out in Queensland Building Services Authority v O’Brien & Ors [2002] QDC 329 at para36 and 37 that: “Principles applied by the tribunal At page 7 of her reasons the tribunal member stated the principles to be applied as follows: “38 When conducting a review under s 105 of the [QBT] Act the tribunal conducts an administrative proceeding standing in the shoes of the authority, but in the light of the evidence available to it, including evidence not available to the authority. 39 The authority has the onus of establishing that the direction should stand. The onus must be discharged to the highest civil standard, commonly known as the Briginshaw standard. The exercise of the discretion pursuant to s 72 of the QBSA Act involves the examination of the whole of the circumstances. A factor to be taken into account is whether or not the builder has been at fault, although a finding of fault on the part of the builder is not in itself determinative.” There was no dispute about what was said by the tribunal in paragraph 38, and it is consistent with an earlier decision of this court: Queensland Building Services Authority v Carey (Appeal 1209/97, Brabazon DCJ, and 20.06.97, unreported). In that case his Honour undertook a careful and thorough examination of the nature of an appeal to the tribunal, with which, with respect, I entirely agree. It is not necessarily appropriate to talk in terms of onus in relation to an administrative review,( See Re Ladybird Children’s Wear Pty Ltd (1976) 1 ALD 1; McDonald v Director-General of Social Security (1984) 6 ALD 6.) but in such circumstances it is reasonable to say that the statutory discretionary power will not be exercised unless the appellant can persuade the tribunal that it is appropriate to exercise it, which for practical purposes comes to the same thing. Apart from the next sentence, the balance of what was said in paragraph 39 is unexceptionable. The last sentence of the paragraph has the direct support of a decision of the Full Court(R v Miller; ex parte Graham Evans & Co (Qld) Pty Ltd [1987] 2 Qd R 446).” Subsequently in that decision his Honour stated: “Authorities and precedents [42] The principal authority in this area is the decision of the Full Court in R v Miller; ex parte Graham Evans & Co (Qld) Pty Ltd [1987] 2 Qd R 446. That case concerned the exercise of power then contained in s 59 of the Builders Registration and Home Owners Protection Act 1979, which was analogous to the power now in s 72(1) of the QBSA Act. The prosecutor had been ordered by the Builders Registration Board to remedy faulty or -- 5 of 8 -- QR183-08 / Page 6 of 8 unsatisfactory building work, and appealed to the District Court, where the order of the Board was confirmed: p.448. There were problems with water penetration through the podium slab, and with a retaining wall. The former problem was caused by the use of an unsuitable material as waterproofing, which material had been specified in the building contract; the latter was caused by defective design, but the design was not the responsibility of the builder. In terms of contract law the builder had done nothing wrong, but the outcome was unsatisfactory in a practical sense. The issue was whether the builder who had faithfully complied with the requirements of his contract would nevertheless be liable to an order to remedy under that section. Derrington J (with whom McPherson J as his Honour then was agreed) said at p.458: “That a builder’s work comes within the definition of building work that is faulty or unsatisfactory within the meaning of subsection (3) does not of itself impose any liability upon him but merely enlivens the discretion of the Board to order him to remedy the work, for the use of the permissive “may” in the investment of the Board’s powers also vests such a discretion in the Board. Where his adherence to the contract must mean defective work, the answer to the builder’s dilemma is that the legislature has reposed confidence in the Board to determine in the specific case whether an order should be made; and the Board, in exercising that discretion properly, must in a proper case recognise the builder’s innocent position and afford him protection by the exercise of its discretion in his favour. In some circumstances, there is obvious need for protection of the owner even though the builder may be able to point to a term of the contract justifying the defective result, while in others the builder may be perfectly justified in conforming with the specifications and should not be required to remedy the defect. Such a discretion is both reasonable and logical in this field where it is so difficult to set precise criteria, and where a number of different factors will operate in varying degrees. It is therefore in conformity with the plain and ordinary meaning of the terms in ss (3) (b) to find that they apply to the objective state of the finished work itself, but that if that position derives from the builder’s adherence to the contract then it is in the discretion of the Board, depending upon the circumstances, whether he should be ordered to remedy the work.” 16. The essence of these decisions and of the law as it must be applied in this instance is that for Mr Deen, to succeed he must satisfy the tribunal that the probable cause of the, acknowledged, defects is that the work done by the Builder was defective. 17. As pointed out in Mr Deen's submission both he and the Authority have agreed that the house has heaved away from the south-east corner of the property. The fundamental issue for decision is the cause of that heave. Mr Deen submitted that the cause of the heave to the concrete slab was that pipes under the laundry and bathroom broke due to damage caused by the Builder during the initial concrete pour. 18. The property was inspected by Mr Geoff Hamilton a consultant engineer retained by Mr Deen and by Mr Peter Wright, also consultant engineer. Mr Wright was retained by the Authority. Mr Hamilton and Mr Wright then prepared a joint report which is dated 6 July 2009. -- 6 of 8 -- QR183-08 / Page 7 of 8 19. Mr Wright and Mr Hamilton agreed in their joint report that: “The majority that damage to the dwelling has been caused by water escaping from breaks in the waste water drains which run beneath the dwelling, particularly the known fracture beneath the laundry tub. Leakage from that break has travelled along the granular pipe bedding into the foundations soils causing the underlying reactive clay soil to swell and distort the building.” 20. Mr Hamilton and Mr Wright were not able to agree as to the cause of the break in the waste drains. The joint report states that: “Mr Wright is of the view that the break is a circumferential break at a pipe bend, typical of breaks caused by ground move caused by ground movement which he has previously witnessed. Mr Wright cannot say whether the pipe was broken by ground movement after the slab was cast, or, by lateral impact on the pipe prior to the casting of the concrete slab. He thinks it unlikely that pipe was damaged by any impact after the slab was cast. Mr Wright could see no evidence of the pipe being broken by a heavy object (bar) thrust down the waste pipe.” and that: “Mr Hamilton was unable to comment on the nature of fracture other than to observe that there was a substantial displacement (10-20 mm) at the break in pipe. This fracture, however, may have not been initial one that enabled waste water to enter the drainage bedding. Except for accidental damage you concrete pour the only other possibility effect of the reactive foundation on vulnerable buried pipe work. Peter Wright and Geoff Hamilton agreed that such an impact was possible in the area of the overflow relief Gully (ORG) just outside the laundry.” In a separate report Mr Hamilton, concluded that: “I believe the cause of water ingress leading to subsequent heave of foundation and property damage is most likely to have resulted from a continuous supply of water to the deeper foundation zone from leaking house drainage. The laundry cupboard drainage is believed to have caused the initial swelling due to the significant volume of leakage from that source. The resulting heave and horizontal movement in the slab fractured other drainage lines, resulting in additional leakage. The effect is gradually but progressively moved across the slab toward the NE corner of the house with similar consequences. 21. Mr Daniel Oliver an experienced plumber retained Mr Deen stated that: “Mr Deen's drainage pipes could have not been broken by the movement in Mr Deen's Slab because the broken laundry bend should have only had a cracked in the PVC bend not a 20mm gap as you can see a video. ... The -- 7 of 8 -- QR183-08 / Page 8 of 8 broken the laundry tub waste was broken by moved from right to left & that is why the laundry waste pipe has 20mm gap at bottom of the drainage pipe bend, instead of slab and a broken-would be from left to right & gap should be at top of pipe and instead of bottom of laundry tub waste pipe." 22. It was suggested by Mr Wright and the Authority that the problem may have originated with work done on the Property after construction had been completed by Mr Deen, or by a builder other than the Builder on behalf of Mr Deen. In his submissions, Mr Deen rejected this contention. 23. It was not however for the Authority, or the Builder, to establish how pipes were broken. That responsibility, or onus, was with Mr Deen. 24. In reaching a decision this Tribunal relies on the opinions of experts placed before it. In this case I have no doubt that the opinion of each of the experts has been honestly and conscientiously expressed. 25. There is however not sufficient evidence for me to reach any conclusion as to what was the cause of the slab movement and of the acknowledged defects. Accordingly I order that: 1. the Review Application is dismissed; 2. the decision of the Authority of 11 July 2007 is confirmed; and 3. in view of section 100 of the Queensland Civil and Administrative Tribunal Act 2009 I make no order as to costs. -- 8 of 8 --