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[2012] WASAT 173
General information, not legal advice.
State Administrative Tribunal (WA)
2012-08-20
Original judgment source is linked above.
CITATION : ANDREWS and BUILDING AND MAINTENANCE SERVICES (WA) PTY LTD
Building - Preliminary issue - Who carried out the regulated building service?
Building Act 2011 (WA), s 3
1 The respondent to a claim that building work had not been carried out in a proper and proficient manner, or the work was faulty or unsatisfactory, argued that it had not carried out the building service. The Tribunal ordered that its argument be determined as a preliminary issue.
2 The substantive claim concerned the erection of a shed provided by the respondent in kit form. The Tribunal considered the parties' opposing versions of events leading to the construction and the evidence relied upon in support. It found, consistent with the applicants' version, that the respondent agreed to construct the shed, and proceeded to do so through its employees or subcontractors.
3 In reaching its conclusion, the Tribunal analysed the relevant statutory framework, with particular reference to the provisions concerning the applicants' status as approved ownerbuilder for the construction of the shed. It found that it was possible for an approved ownerbuilder to engage a third party to carry out a building service. If that third party is registered for the purposes of the building legislation, a claim regarding the quality of the building service is also possible.
4 The Tribunal rejected the respondent's arguments that the applicants had themselves, directly engaged the person who performed the actual work, based on its assessment of all the evidence.
5 Mr and Mrs Andrews (Andrews/applicants) have brought a complaint under s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act) in respect of various alleged defects in connection with the construction of a shed at their rural property in Kalgan, Western Australia.
6 The parties are in agreement that the materials for the shed were provided by Building and Maintenance Services (WA) Pty Ltd (BMS/ respondent) in kit form, under a discrete contract for $13,350.
7 The parties are in disagreement, however, concerning the identity of the party carrying out the 'building service', as that expression is interpreted for the purposes of the BS(CRA) Act, comprising the erection of the shed.
8 On 22 May 2012, the Tribunal directed that it should determine as a preliminary issue the following question:
Who carried out the regulated building service the subject of the complaint?
9 The parties having filed documents comprising their evidence and submissions on the preliminary issue, which I have considered, what follows are my reasons for decision on the preliminary issue. I commence by having regard to the relevant legislative framework within which the preliminary question must be considered.
10 Section 5(1) of the BS(CRA) Act provides that a person may make a complaint to the Building Commissioner:
... about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory.
11 In order to answer the question of the identity of the party carrying out a particular regulated building service, it is necessary to follow a somewhat tortuous trail of interconnected statutory definitions.
12 The expression 'regulated building service' is defined in the definitional s 3 of the BS(CRA) Act to mean, relevantly for present purposes:
a building service carried out by a registered building service provider or an approved ownerbuilder;
13 The same definitional section defines 'registered building service provider' and 'approved ownerbuilder' as follows:
registered building service provider has the meaning given in the Building Services (Registration) Act 2011 section 3;
approved ownerbuilder means a person to whom an ownerbuilder approval has been granted under the Building Services (Registration) Act 2011 section 45(2);
14 Section 3 of the Building Services (Registration) Act 2011 (WA) (BS(R) Act) contains the following definition:
registered building service provider means either of the following -
(a) a building service practitioner;
(b) a building service contractor;
15 'Building services practitioner' is defined as a person registered as such under s 17 of the BS(R) Act. Similarly, 'building service contractor' is defined as a person registered as such under s 18 of the BS(R) Act.
16 It is not disputed that BMS qualifies as a registered building service provider under the above definition, presumably as a building service practitioner registered under s 17 of the BS(R) Act. Whether this registration occurred since the commencement of operation on 2 April 2012 of the BS(R) Act or not is immaterial, given the deeming operation of s 114(1) of the BS(R) Act in respect of prior registration under the former Builders Registration Act 1939 (WA).
17 'Approved ownerbuilder' is defined in s 3 of the BS(CRA) Act as:
a person to whom an owner-builder approval has been granted under the Building Services (Registration) Act 2011 section 45(2) .
18 The reference in this definition to s 45(2) is curious. Section 45(2) of the BS(R) Act is concerned with the waiver of one of five conditions about which the Building Services Board must be satisfied before granting an ownerbuilder approval. I think that s 45(1) of the BS(R) Act, being the provision which prescribes the circumstances in which approval as an owner-builder will be granted, was the intended reference, and will regard it as being so.
19 As for what is meant by 'building service', its definition in s 3 of the BS(CRA) Act includes:
... building work (as defined in the Building Act 2011 section 3); ...
20 The definition of 'building work' in s 3 of the Building Act 2011 (WA) contains a number of categories of tasks, including:
... the construction, erection, assembly or placement of a building or an incidental structure; ...
21 No argument has been raised against the erection of a kit shed being building work, and it sits comfortably within the reproduced part of the definition.
22 In order for one of the respondent's submissions on the preliminary issue to be properly analysed, I will refer briefly to other parts of the legislation dealing with ownerbuilder approvals.
23 Section 43 of the BS(R) Act provides for an individual who is the owner of land to apply to the Board for approval to carry out ownerbuilder work on the land. The application must, among other things, be accompanied by evidence that the applicant has sufficient knowledge of the duties and responsibilities of an ownerbuilder. Such evidence is expressed to include evidence that the person has successfully completed an ownerbuilder course, or is a building service practitioner.
24 Included among the preconditions referred to by s 45(1) of the BS(R) Act for the grant of an ownerbuilder approval are that the application relates to ownerbuilder work on land owned by the applicant, and that the applicant has sufficient knowledge of the duties and responsibilities of an ownerbuilder.
25 Section 46 of the BS(R) Act provides that an ownerbuilder approval expires six months after the grant of the approval, or, where the ownerbuilder is granted a building permit to do building work on the land to which the approval relates, on the expiry of the permit.
26 Before describing the relevant events which form the factual matrix for a consideration of the preliminary issue, I will comment about the appropriateness of the exposition of the question to be determined.
How appropriate is the question 'Who carried out the regulated building service the subject of the complaint?'?
27 On reflection, the question for determination is not as precise at it may have been. Its potential deficiency is to assume that the works complained about fit the requirements of a 'regulated building service'. That assumption may or may not be correct.
28 In order for the application against any third party to succeed, the applicants must establish:
29 The Andrews contend for the building service having been carried out by BMS, which is a registered building service provider. BMS, on the other hand, argues that the building service comprising the erection of the shed was provided by the applicants themselves as ownerbuilder, through the agency of another party contracted by them (Mr Sibert).
30 In view of the above considerations, the question to be determined as a preliminary issue might have been better expressed as:
Did the respondent carry out the building service the subject of the complaint?
31 If this question were to be answered in the affirmative, then the Andrews will have established a right of any claim under s 5(1) of the BS(CRA) Act against the respondent.
32 As will be seen, by reason of the conclusion I reach about the identity of the party rendering the building service in question, the assumption alluded to above is correct, thereby allowing the preliminary issue to be dealt with satisfactorily by answering the question posed.
33 The respective parties have, in significant respects, presented conflicting versions of the events which led to the shed being erected. I will attempt to outline the most important facts and, where appropriate, indicate the nature of the parties' disagreement where the facts are in dispute.
34 On 6 October 2011, Mr Andrews spoke with Mr Ron Finlay, an employee of BMS, regarding the supply of a kit shed. The kit shed was marketed under the name 'Wide Span Shed'. The Andrews had received a brochure advertising Wide Span Sheds in the post.
35 On 2 November 2011, a contract for supply only of the kit shed was entered into. At the time, no request that BMS undertake the necessary works to construct the shed was made. According to BMS, Mr Andrews indicated that he would erect the shed himself and use his son to assist him. According to the Andrews, no decision on how to proceed with construction of the shed had then been made.
36 Again according to the Andrews, on or about 14 November 2011, Mr Andrews asked Mr Finlay if BMS would construct the shed as well as supplying the kit, and Mr Finlay agreed. Mr Finlay made positive recommendations in relation to the workers (describing them as 'my boys') who would construct the shed, and said that the concrete work would be done by a subcontractor called Brad who was 'the best concreter in town'.
37 The Andrews version of what occurred on 14 November 2011 is disputed by BMS, according to whom, Mr Andrews' request was limited to asking how much he could expect to pay to have the shed erected. BMS contends that Mr Finlay provided Mr Andrews with 'indicative pricing' that BMS would expect to pay subcontractors for erection works, and also for a concrete slab, exclusive of builder's mark-up. On this occasion, as on a previous occasion, according to BMS, Mr Finlay indicated that BMS was not interested in undertaking any construction works, and that it would only supply the shed as contracted.
38 The Andrews rely, as evidence of the parties entering a contract on 14 November 2011, upon a piece of paper upon which the following appears in handwriting:
cheque
Concrete $6,500-00
Erection $4,600-00
cash
39 According to the Andrews, on the day in question, Mr Finlay wrote 'Concrete' and 'Erection' and their respective amounts (reflecting the contract sum for each), and Mr Andrews wrote 'cheque' and 'cash' to reflect Mr Finlay's payment requirements for both elements.
The concrete slab and later the erection of the kit were then arranged by [Mr] Finlay in accordance with our contract.
41 BMS refers to a further meeting between Mr Andrews and Mr Finlay when, according to BMS, Mr Andrews asked Mr Finlay to undertake the concrete and erection works. It is said that Mr Finlay declined, but agreed to assist Mr Andrews by providing a list of subcontractors known to BMS. According to BMS:
In the event there were only two contractors available/willing to be engaged by Mr Andrews. These two contractors were introduced to Mr Andrews with the reiteration, by Mr Finlay, that BMS was not, and would not be, involved in the erection of the shed and, [sic] all Mr Andrew's [sic] dealings were to be with the subcontractors, directly.
42 In summary, BMS' position is that Mr Andrews engaged Mr Sibert, operating under the business name 'Mates Rates Renovations and Maintenance' (MRRM), directly, subsequent to Mr Finlay's introduction. Apart from its version of events already mentioned, it also relies upon the following matters:
43 BMS relies for corroboration of its position upon a statutory declaration of Mr Sibert dated 20 April 2012. The Andrews rely upon a statutory declaration of Mr Bradley J Ralston dated 18 May 2012.
44 I have come to the view that the contractual arrangements are as described by the Andrews. Their version of events, in relation to those parts which conflict with the version offered by BMS, have, in my view, a higher degree of detail, credibility and support from other sources. My conclusion has been particularly influenced by the following:
46 The handwritten note, to the extent that it contains monetary amounts in respect of 'concrete' and 'erection', is equally consistent with the respondent's claim that these were merely indicative figures of amounts payable to its subcontractors as it is of the applicants' claim, that it records terms of the parties' agreement.
47 BMS has not, however, explained the appearance on the note of the words 'cheque' and 'cash'. These words are suggestive of payment requirements imposed by a contractor upon its principal, and support the Andrews' claim of a concluded agreement being entered into on 14 November 2011.
48 It would have been an easy matter, had it been the case, for the respondent to refute Mr Andrews' explanation of the existence of the words on the note, or to challenge in some other way, their significance. However, the documents filed by BMS subsequent to the applicants making express reference to the note fail to refer to it.
49 BMS repeatedly makes the claim that at no time did it agree to do anything more than supply the kit shed (see its written account of the circumstances filed 12 June 2012, amended account filed 27 June 2012, and statutory declaration of Mr Finlay dated 19 April 2012, the latter document filed with the response lodged with the Building Commission).
50 Mr Finlay's statutory declaration proffered the following series of post 2 November 2011 events, which he suggests, resulted in the applicants securing a concrete contractor:
51 The statutory declaration of Mr Ralston made 18 May 2012, which is attached to the applicants' written submissions filed 25 June 2012, presents a radically different picture.
52 Relevantly, for present purposes, Mr Ralston's statutory declaration states:
53 BMS has failed to offer any explanation for the contradictory evidence of Mr Ralston. This failure is both inexplicable and damning of BMS' position. Although it may be argued that Mr Finlay's evidence is concerned solely with the concrete slab, whereas the building service with which the preliminary issue is concerned is the erection of the shed, Mr Ralston's evidence undermines BMS' assertion that it had no involvement other than the supply of the kit shed. At the same time, it casts doubt upon the accuracy and truthfulness of the evidence of its principal witness, Mr Finlay. Assuming that Mr Ralston's evidence is correct, as, in the absence of any challenge to it from the respondent, I feel compelled to do, Mr Finlay's reference to the involvement of a Brad Smith from Albany Procrete appears to be contrary to the real facts.
54 In circumstances where the respondent's position in relation to the concreting has been exposed as unreliable, I am satisfied that the Andrews' detailed and corroborated account of the parties' dealings concerning the shed erection, is to be preferred to the respondent's account of those dealings.
55 A theme of the response of BMS is that Mr Andrews was the approved ownerbuilder for the construction of the shed, and that Mr Andrews conducted himself as the ownerbuilder in his dealings with the City of Albany and with its 'subcontractor', MRRM.
56 BMS relied upon an email from a building inspector with the City of Albany, Mr Bridger, to Mr Andrews dated 25 January 2012, in which Mr Bridger raised issues about the shed which needed to be rectified before completion of the building licence.
57 In relation to Mr Andrews' dealings with Mr Sibert (in the name of MRRM), reliance is placed on invoices from MRRM to them, and a claim that Mr Andrews negotiated a discount with MRRM of its price for erection of the shed. The support provided for such a negotiation consists of emails from Mr Sibert to the Andrews, at a time when those parties were themselves in dispute.
58 As I read BMS' submission, it relies upon a combination of Mr Andrews' status as ownerbuilder and his dealings with BMS and Mr Sibert respectively. I will, in any event, first consider whether BMS is relieved of any possible liability under s 5(1) of the BS(CRA) Act, merely on the basis of Mr Andrews' status as approved ownerbuilder in respect of the farm machinery shed erected on his land.
59 I have already referred, under the heading 'Statutory framework', to the significant legislative provisions. Read together, those provisions appear, on the facts of this case, to give rise to a theoretical right of action wherever a building service is carried out by a registered building service provider or an approved ownerbuilder. What those provisions do not do where, as here, there is an approved ownerbuilder in respect of the regulated building service the subject of complaint, is to deem the building service, or parts of the building service, as having been carried out by the approved ownerbuilder, regardless of the facts. The possibility remains for an owner-builder to engage a registered building service provider to carry out a building service the subject of the owner-builder approval, and subsequently to complain about the quality of the building service rendered under s 5(1) of the BS(CRA) Act.
60 I do not consider that the dealings of Mr Andrews with the City of Albany, evidenced in the email from the city's building inspector, advances the respondent's case that it did not carry out the building service. The email is simply a communication with the grantee of the building licence in relation to incomplete or unsatisfactory aspects of the construction.
61 I turn then to the incidents of the alleged direct engagement by Mr Andrews of Mr Sibert or MRRM, upon which BMS relies.
62 Two invoices were issued on MRRM letterhead. The first invoice, dated 17 January 2012, is in the incorrect name of 'Les Adams' and indicates payment by cash COD. The second invoice is dated 19 January 2012, in the Andrews' correct name, and gives a payment term of seven days, without the stipulation for cash. Both invoices refer to a 'quoted price' for erection or construction of a shed of $4,300.
63 BMS, and Mr Sibert in his statutory declaration, seek to advance the case of direct engagement of Mr Sibert by reason of the issue of these invoices, and of a discount, negotiated with Mr Sibert, which they are said to reflect. Mr Sibert, in his statutory declaration, states that Mr Andrews requested a copy of the (second) invoice because of a mistake in the first invoice.
64 As pointed out by the Andrews, both invoices were issued after the work was completed, at least substantially. It seems that neither invoice has been paid.
65 To the extent that Mr Sibert supports the BMS' claims, it is clear that Mr Sibert has a close relationship with BMS and often works for them. His evidence cannot, in my view, be regarded as truly objective. The misnomer of the applicants in the first invoice also displays a surprising lack of familiarity with a party with whom the invoicer is said to have had contractual relations. Mr Sibert himself complains about the lack of involvement and oversight by Mr Andrews of the erection task which he was undertaking. This is, of course, wholly explicable if Mr Sibert was the subcontractor of BMS.
66 The issue of the invoice is consistent, to some extent, with the Andrews' claim that they (the Andrews) were requested by Mr Finlay to pay 70% of the contract price of $4,600 to Mr Sibert. The amount referred to in the invoice is much higher than this. It is, however, also inconsistent with the assertion of BMS of a negotiated discount of $430.
67 On 31 January 2012, Mr Sibert threatened the Andrews with recovery action on the unpaid MRRM invoice. By reason of the Andrews' failure to pay, according to Mr Sibert's email to Mr Andrews, 'our origional [sic] agreement will no longer apply and GST of $430 plus all court costs will be added to your account, making a total of approximately $4,930'.
68 Mr Sibert agreed with Mr Andrews' account of a discount negotiated between the two men of $300, as a credit for omission of end wall girts. It is this discount which explains the amount of the MRRM invoices, which are $300 less than the amount quoted (or indicated) by Mr Finlay for shed erection. The respondent's submission, where it refers to Mr Andrews negotiating a discount with MRRM of $430, appears to be confusing the discount with the correct amount of GST payable on the discounted amount.
69 This uncertainty further devalues the legitimacy of the invoices in the name of MRRM, and serves to reinforce the likelihood, which I have accepted on the balance of probabilities, that the applicants' contract was with BMS and not Mr Sibert.
70 In the result, I have determined that the building service the subject of the complaint was carried out by the respondent. Because the respondent is a registered building service provider for the purposes of s 3 of the BS(CRA) Act, it follows that the relevant building service is a regulated building service, thereby entitling the applicants to proceed with the application.
71 It will be necessary for the parties to attend a directions hearing in order to determine the future course of the matter.
Who carried out the regulated building service the subject of the complaint?
as follows:
The respondent carried out the building service the subject of the complaint.
I certify that this and the preceding [72] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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