Anderson v Nick Ruhle Homes Pty Ltd and Anor [2012] QCAT 372

CITATION: Anderson v Nick Ruhle Homes Pty Ltd and Anor [2012] QCAT 372 PARTIES: Mrs Renine Anderson (Applicant) v Nick Ruhle Homes Pty Ltd (First Respondent) Ambience Designer Pools & Spas (Second Respondent) APPLICATION NUMBER: BDL333-10 MATTER TYPE: Building matters HEARING DATE: 10 August 2012 HEARD AT: Toowoomba DECISION OF: Michael Wood, Member DELIVERED ON: 20 August 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. That the Second Respondent pay to the Applicant the sum of $25,200.00; 2. I direct that the parties file evidence and submissions in relation to the costs of the proceedings and that the claims for costs be determined on the papers not before 7 September 2012. CATCHWORDS: Building Contract – breach of warranties – reasonableness of damages claimed Bellgrove v Eldridge [1954] HCA 36 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr John Wiedman, Hede Byrne & Hall Solicitors RESPONDENT: First Respondent – Mr Chris Neville, Condon Charles Lawyers Second Respondent in person -- 1 of 8 -- 2 REASONS FOR DECISION [1] These proceedings relate to contracts for building work undertaken by the First and Second Respondents on a property owned by the Applicant. [2] On the 5 March 2009 the Applicant entered into a Contract with the First Respondent for the construction of a residential home with a Contract price including GST of $565,300.00. The Contract was a Housing Industry of Australia Standard Contract and by a written Variation dated 21 October 2009 it was agreed between the First Respondent and the Applicant that the Building Contract was varied to include: “labour and materials to bed and lay paver tiles to spa area and pool and pergola (including silicone expansion joints)” The amount of that Variation including GST was a total of $11,640.20. [3] The Contract between the Applicant and the Second Respondent was a Pool Building Contract on the Standard Queensland Master Builders Contract to construct a Concrete Pool or Spa described as a “10 x 5 x 2 metre pool and separate spa including heat pumps, fencing etc” for a total price of $87,455.00. The Variation to this Contract is the supply of pavers and the laying of coping tiles. [4] The Applicant on the suggestion of Mr Todorovic, a Director of the Second Respondent, attended at the premises of a supplier with which the Second Respondent dealt where she initially obtained some paver samples and then ultimately selected pavers including coping tiles. [5] A client selection sheet dated 20 March 2009 was in evidence before the Tribunal indicating the selections made and invoices from the Second Respondent to the Applicant dated 7 October 2009 for $4,620.00 for services rendered in conjunction with supplying coping tiles and applying bedding and fixing tiles to bondbeam and further for the supply of pavers in the sum of $8,539.20. These 2 invoices represented the Variation agreed to that Contract. The pavers and coping tiles were all manufactured by a company Stone Directions with the only difference between the paving tiles and the coping tiles being that the coping tiles have a rolled edge (Bullnose). [6] It was common ground between the parties that the Contracts as Varied required that the Second Respondent supply and install the coping tiles, approximately 26 lineal meters, to the pool edge and that the balance of the tiling comprising the fixing of pavers to the existing concrete bedding was to be undertaken by the First Respondent. [7] The Second Respondent engaged a Sub-Contractor (Contemporary Tiling and Paving Pty Ltd) to lay the coping tiles which they did. The Second Respondent did not actively participate in the laying of those tiles. The First Respondent engaged its Sub-Contractor (Cheka Tiling Pty Limited) to lay the pavers in the balance of the area which they then did. -- 2 of 8 -- 3 [8] The evidence was that the tiles were laid some time in the middle of 2009 but prior to the handover of the property by the builder to the owner in September 2009. [9] The evidence not challenged was that prior to handover there was an area of 10 square metres of tile which at the suggestion of the First Respondent‟s tiling sub-contractor were lifted and replaced as being defective. [10] The Applicant‟s evidence was that in November 2009 the Applicant and her husband noted problems with the pavers in that initially they started to discolour with a yellowish tinge as opposed to a latte colour. The pavers were manufactured by a company called Stone Directions and Mr David Wecker from that company attended the Applicant‟s property on the 18 January 2010 to inspect the pavers. In cross-examination the Applicant‟s evidence was that Mr Wecker made an offer to replace all of the tiles on behalf of Stone Directions but that offer was rejected as no offer was made to the Applicant to meet the labour and other costs of installing those pavers. [11] By January 2010 the pavers had started to lift and crack and those that had not yet lifted or cracked were appearing discoloured and loose. The Applicant‟s evidence was that by January 2011 there were 30 pavers that were damaged or starting to lift or crack in the alfresco area and there were 103 pavers that were lifting or cracking with grout lifting in the pool area. In the spa area there were 44 damaged pavers which were starting to lift or crack and of the coping tiles around the pool 14 had started to crack and lift of the 26 lineal metres. Whilst not all of the pavers had de- bonded from the concrete surface underneath they no longer presented a level surface but there was some lipping as between pavers. In addition the pavers were „drummy‟. [12] The primary issue to be determined by the Tribunal is the cause of the „drumminess‟ and failure of the tiles as outlined above. Causation [13] The Applicant submits that the problems now evident are either as a result of the manner of installation of the pavers or the pavers themselves and that regardless of the findings as to the cause it would amount to a breach of contractual warranties in the First and/or Second Respondent‟s Contracts. [14] The First Respondent submits that the Tribunal would find that the failures, if any, are as a result of the paver not being fit for the purpose for which they have been supplied in breach of the Second Respondent‟s obligations pursuant to its Contract with the Applicant. [15] The Second Respondent submits that I would find that the failures are as a result of the pavers not being sealed prior to installation. -- 3 of 8 -- 4 [16] The Tribunal was assisted by evidence from Mr Anthony Robert Inglis. Mr Inglis was called to give evidence on behalf of the First Respondent. In addition the First Respondent called evidence from Mr David Maker who was a Director of the Sub-Contract company who laid the pavers for the First Respondent. In Mr Maker‟s affidavit an inspection of the pavers in approximately late 2009 revealed approximately 100 square metres of the area laid where some of the tiles had de-bonded from the concrete and had cracked. He did not consider that that de-bonding was as a result of the process that he undertook. His evidence which was not challenged was that before commencing the work he consulted the section of the paver‟s manufacturer‟s website heading “Paver Information and Laying Guide” and complied with it. His evidence was also that he contacted a reputable adhesive manufacturer prior to commencing the work for recommendations as to the adhesive. He followed these recommendations and instead of using a 10 millimetre notched trowel as suggested on the manufacturers website used a 15 millimetre notched trowel. [17] His evidence was that following the complaint being made he sent samples of the tiles to the adhesive manufacturer Ardex and their report of 31 March 2012 was in evidence before the Tribunal. The conclusion expressed by Ardex Australia Pty Ltd is as follows: “Based on the evidence that we have uncovered, it appears that the Pavers have de-bonded due to high strains that exceeded the adhesive bond performance, which have resulted from moisture movement in the Pavers. Somewhat reduced adhesive coverage and suspect surface property for the Pavers may have contributed to the reduced bond strength.” [18] Mr Anthony Inglis was called on behalf of the First Respondent and is a brick layer and tiler having been involved in that industry for 24 years. The prime focus of his evidence related to a conversation alleged to have occurred between himself, Mr Nick Ruhle on behalf of the First Respondent and Mr Troy Anderson the Applicant‟s husband. As that conversation is alleged to have occurred with a person other than the Applicant I need not make any findings in relation to it. [19] Mr Inglis was independent of any other party to the proceedings and when asked to comment on the report by Ardex and in particular the following portion of the Ardex report: “whilst the adhesive coverage appeared fair, it was less than the tiling standard requires at 85% and would contribute to a reduce adhesive bond performance as the imposed strains are concentrated over less adhesive.” He made the observation that an adhesive coverage of 75%, which is recorded in the Ardex report, would be sufficient. He indicated that he had noticed the pavers prior to them being laid and he had noticed that there was some bowing of the paver, the effect of which was that consistent adhesive coverage would be difficult to achieve. He indicated that his understanding was that a 15 millimetre trowel was used which meant that there would have been adequate adhesive coverage and that it would not -- 4 of 8 -- 5 have been that small difference in adhesive coverage which would have resulted in the de-bonding of the pavers. It is true to say that only small sample had been provided for testing. [20] He was also asked about evidence that with the pavers there was a printed documentation which included the following statement: “These Pavers are not suitable for laying in wet and salty areas.” [21] He felt that the pool area was a wet and salty area and that the pavers were unsuitable for laying in that area. He gave evidence that he had some dealing with this particular product some weeks earlier on another separate site and due to the inconsistency in the product he refused to continue to lay those pavers. [22] Other evidence relating to the cause of the lifting of the pavers was from the parties themselves. Mr Nicholas Ruhle a Director of the First Respondent gave evidence that he had inspected the pavers upon the complaint being made but did not keep records of any numbers of pavers which may have been damaged. He was referred to the Applicant‟s evidence in relation to the number of pavers which were defective but was unable to comment in relation to each of them. [23] He agreed that if pavers were damaged they required replacement but believes that they could be removed on an individual basis and replaced with pavers which could be found to match. He also gave evidence that at the time of the delivery of the pavers he saw a document which was the same as that seen by Mr Inglis relating to laying the pavers in a wet and salty area. His evidence was that he and Mr Inglis then had a discussion with Mr Troy Anderson the Applicant‟s husband who instructed them to lay the pavers in any event. As I have previously observed this conversation does not bear any relevance on my findings. [24] Mr Ruhle gave evidence that he did not believe that the pool area was a wet or salty area and that they were suitable to be laid in the pool area. He did not suggest that the pavers should not have been laid to Mr Anderson but most importantly made no comment to Mrs Anderson. Mr Ruhle has no prior experience of laying pavers in this manner as in the past he had used ceramic tiles and has used contractors to do so. [25] Mr Ruhle gave evidence that in his view the cause of the de-bonding of the pavers is the pavers themselves and not the manner in which they were laid. Prior to them being laid he was aware that his sub-contractor had made enquiries about suitable adhesive and then applying it in accordance with the manufacturer‟s instructions. It is his view that the manufacturer is responsible for the problems now faced by the Applicant. [26] Mr Valdan Todorovic is a Director of the Second Respondent and gave evidence that in his view the fact the pavers were not sealed meant that they might bow creating a “drummy sound” but this did not mean that they would de-bond. His view that the problems which were being faced by the -- 5 of 8 -- 6 Applicant were being faced because they did not seal the pavers before laying. He says that the Applicant was made aware of the requirement to seal the pavers as on the client selection sheet from the Pool Tile Company Pty Ltd it has a box ticked as follows: “It is recommended that any Bullnose or Paver (with the exception of Porcelain Tiles) be sealed with a high quality, non slip, penetrating and breathable sealer – such as that supplied by the Pool Title Company. Sealing is usually not included by the Pool Builder.” [27] He gave evidence that the purposes of the sealing is to allow proper bonding with the substrate. [28] On this issue the Tribunal had the benefit of a Paver Laying Guide published by Stone Directions dated February 2008. This document was attached to an unsworn Statement of David Wecker dated the 27 July 2012. The Tribunal was prepared to accept the unsworn statement on the basis that, as it was not sworn and he was not available for cross examination, any weight which would be placed on it would be a question for the Tribunal. I placed no weight on the statement itself however have had regard to the Paver Laying Guide as it would appear to be a document produced by the Company. As part of the Paver Laying Guide that document includes the following: “For aesthetic reasons (and to make cleaning easier) it is best to seal Pavers with a high quality surface or penetrating sealer. Each type has both pro’s and con’s which should be considered before selecting a sealing type and brand. Stone Directions Pavers should be sealed when the Paving is dry and as soon as possible after laying.” [29] It is clear from the Direction that the sealing is to occur as soon as possible after laying and that the manufacturers of the pavers consider that the sealing of the Paver is important for aesthetic reasons rather than structural reasons. This is at odds with the evidence of Mr Todorovic. [30] The other witness who gave evidence was a builder who was called by the Applicant primarily to give evidence on quantum rather than causation. Mr Steinmuller is a builder with significant experience. He was not asked to give evidence in chief about the cause of the failure but in cross examination gave evidence that to properly install the pavers you would need to contact the manufacturer for a laying guide and use the glue as recommended. He gave evidence that there are many factors which could cause de-bonding but that if everything was done properly there shouldn‟t be a problem. [31] I am satisfied that on the balance of probabilities the failure of the tiles is by reason of the pavers themselves in that they were not suitable for the purposes for which they were supplied that is for use in a wet or highly salt charged area. It is significant to note that the pool is a salt water pool and that notwithstanding that different tilers were responsible for undertaking the affixing of the coping tiles to the balance of the area there is a -- 6 of 8 -- 7 consistent failure across these 2 two areas. The common factor in both of these situations is the paver itself. [32] The pavers were supplied by the Second Respondent pursuant to the Varied Building Contract. [33] The Contract between the Second Respondent and the Applicant is a standard Queensland Master Builders Pool Building Contract which includes builders warranties including the following: “10.1 (b) Material Supplied by the Builder for use in the works will be good and suitable for the purpose for which they are to be used and unless stated otherwise in the Contract will be new;....” [34] The Variation of the Contract between the Applicant and the Second Respondent means that the pavers are supplied to the Applicant pursuant to that Contract including that condition. [35] By reason of my findings in relation to the cause of the failure of the tiling generally I am satisfied that the Second Respondent is in breach of the Contract in that the pavers supplied are not suitable for the purpose for which they were supplied as they are not fit for use in a wet and salty area. Quantum [36] I must then turn to consider the quantum of the compensation sought. [37] The Applicant provided a quote prepared by the First Respondent addressed to her dated the 20 October 2011 which was a quote to remove and replace external pavers. The amount of this quotation was the sum of $25,200.00. It is this sum that is sought by the Applicant in her application and the Applicant submits that it is a reasonable figure for the replacement of all of the pavers. [38] The First and Second Respondents gave evidence that in their view the works could be rectified by removing the improperly bonded pavers and replacing them on an individual basis and that whilst this may create an aesthetic interference with the finished area this is not a relevant consideration and it is this calculation of quantum that should be adopted. Neither proposed a figure for undertaking that work. [39] Mr Steinmuller who is a builder and business associate of the Applicant‟s gave evidence that he had inspected the area the subject of this claim. He is a Director of Steinmuller Constructions and has 40 years experience in residential and commercial construction. His evidence in chief as outlined previously was limited to the rectification work. In his evidence he indicated that some of the pavers had cracked whilst others were discoloured. [40] His evidence was that the only way to rectify such a large area would be to remove all of the existing pavers and replace them with new pavers. -- 7 of 8 -- 8 He gave evidence that it would not be practical in his view to selectively remove and replace the pavers for a number of reasons including: a) The impossibility of matching replacement pavers to the existing pavers; and b) The risk of damage to pavers surrounding those to be removed. [41] He expressed the view that the quote provided by Nick Ruhle Homes of the 20 October 2011 represented a fair and reasonable estimate of the costs involved to remove and replace the pavers. [42] The First Respondent‟s legal representative referred me to Bellgrove v Eldridge1 in relation to the calculation of damages. He submits and I accept that the remedial work must be both necessary and reasonable. He submits that the removal of all of the pavers is not reasonably necessary. [43] The evidence is that the total area paved was approximately 285 square metres plus 26 lineal metres of coping tile. The Applicant‟s affidavit of evidence was that as at January 2011 there was total of 177 damaged pavers and that there had been a number more damaged since then. No final figure as to the extent of the damage was available. [44] The Applicant entered into a Contract for the construction of a not insignificant dwelling including the paving of the pool and spa area. It was the Applicant‟s expectation that she would receive consistent paving effect throughout the area and in that regard I accept the evidence of Mr Steinmuller as to the difficulties faced in locating and removing and replacing only those pavers which were obviously damaged. Further having regard to my findings that the pavers supplied are not suitable for the purpose it would be reasonable to replace all of the pavers. [45] In the circumstances I find that the removal and replacement of all of the pavers supplied by the Second Respondent is reasonable and that the appropriate measure of damages having regard to all of the evidence is the amount of the quotation provided by Nick Ruhle Homes Pty Ltd. I order that the Second Respondent pay to the Applicant the sum of $25,200.00. [46] I dismiss the Application as against the First Respondent. [47] I direct that the parties file evidence and submissions in relation to the costs of the proceedings and that the claims for costs be determined on the papers not before the 7 September 2012. 1 Bellgrove v Eldridge [1954] HCA 36. -- 8 of 8 --