Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 48

Australian Consumer Law

Building Act 2004 s 88

Legislation: Australian Standards AS NZ S 3000:2000, AS1562.1, AS1562.2, AS 1562.1:1992

Building (General) Regulation 2008 ss 31, 32, 38

1. Judgment to the applicants in the sum of $5,299 comprising:
   • (a) $5,140 compensation; and,
   • (b) $159 ACAT filing fee;

1. In this decision a reference to the 'tribunal' or 'ACAT' refers to the ACT Civil and Administrative Tribunal generally and a reference to the 'Tribunal' refers to the members who heard the matter.
2. This is a proceeding brought on 20 December 2017 by Mrs Laura Burton and Mr Robert Whelan (the Clients) against Rojas Construction Pty Ltd (the Builder). The Clients are seeking compensation for defects and omissions, in a house they had built for them by the Builder.
3. The Clients seek a total of $12,003. This figure includes the costs associated with repairing nine defects, the provision of a pump, the costs associated with obtaining an expert report and the ACAT filing fee.
4. Mr Whelan was not initially a party to the proceeding but was joined as a party on 22 February 2018.
5. Neither the Clients nor the Builder were legally represented during the course of the hearing.

1. The Clients and the Builder entered into a contract to build a house located in Coombs, ACT (the contract).[1] The contract relating to the project was signed by the Clients and the Builder on 7 October 2014.
2. The contract price for building the house was $420,000.
3. The house was finished almost a year later, on 29 October 2015.
4. A certificate of completion was signed by the Clients on 12 November 2015.[2] I take this day to be the date of practical completion; the date against which the statutory warranties and the maintenance liability period, run.
5. The Clients moved into the property on 14 November 2015.[3]
6. The contract made provision for a maintenance liability period of 90 days. The purpose of the maintenance liability period was to allow the Clients to live in the house for a short period of time, to notice any minor defects or omissions and to be able to provide the Builder with a comprehensive punch list of items that needed to be resolved.
7. It should be noted that the maintenance liability period does not act as a limitation period. It simply provides a convenient mechanism for repairing minor issues detected by an owner in a short period, immediately after the build has been completed.
8. The builder continues to be liable for any defects or omissions that occur during the maintenance liability period and for the longer statutory warranties periods specified by the Building Act 2004 and the Building (General) Regulation 2008.
9. The contract defined the maintenance liability in the following terms[4]:

The Maintenance Liability Period is an opportunity for the home Owner to state, in writing, any minor Defects and/or minor omissions in the building Works. The Maintenance Liability Period starts after the date of Practical Completion and finishes within the time stated in item A14 of Appendix A (with a default of 90 calendar days). It is recommended that, if possible, the Owner provide the Builder with a single list of minor Defects and/or minor omissions (if any) towards the end of the Maintenance Liability Period.

1. The minor defects detailed in a defects list are meant to be resolved by the Builder within 15 days, or the Clients are entitled to ask another building professional to undertake the minor defects work.[5]
2. On 29 January 2016, the Clients sent the Builder a defects list containing 76 items. Most of those items were resolved by the time the Clients brought their application to ACAT.
3. At the time of hearing, only 10 items remained unresolved between the parties. Some of these were items mentioned in the defects list. Other items were not mentioned in the defects list.
4. The 10 unresolved items can be summarised in the following manner:

Absence of a water pump associated with water tanks

1. The Building Act 2004 (the Act) and the Building (General) Regulation 2008 (the Regulations) provide for the statutory warranty periods relevant to domestic buildings in the ACT.
2. The Act requires a builder to warrant that the building works will be carried out in accordance with the Act and that the work has been carried out in a proper and skilful way. Sections 88 of the Act, inter alia, provide:
   1. Statutory warranties
      1. By force of this section, every contract for the sale of a residential building, and every contract to carry out residential building work to which the builder is a party, is taken to contain a warranty under this section.
      2. The builder warrants the following in relation to residential building work:
         1. that the work has been or will be carried out in accordance with this Act;
         2. _that the work has been or will be carried out in a proper and skilful way and - _

1. that good and proper materials for the work have been or will be used in carrying out the work;

1. if the owner of the land where the work is being or is to be carried out is not the builder, and the owner expressly makes known to the builder, or an employee or agent of the builder, the particular purpose for which the work is required, or the result that the owner desires to be achieved by the work, so as to show that the owner is relying on the builder's skill and judgment - that the work and any material used in carrying out the work is or will be reasonably fit for the purpose or of such a nature and quality that they might reasonably be expected to achieve the result.

1. The warranties end at the end of the period prescribed under the regulations after the completion day for the work.
2. The meaning of the term 'proper and skilful way' used in section 88 (2)(b) of the Act, is refined in regulations 31 and 32, which provides:
   1. Considerations for proper and skilful work - material and work standards - Act, s 42 (2)

In deciding whether building work has been carried out in a proper and skilful way, the following considerations must be taken into account:

1. whether the work uses a product or system in accordance with any accessible instructions, directions, guidelines or suggestions of the maker or seller of the product or system;
2. whether the work is in accordance with any relevant rules or guidelines published by Standards Australia;

1. whether, as part of the work, a product or system is being, or has been, used in a way that a reasonable person would expect is contrary to the intended use of the product or system;

1. whether, as part of the work, a product or system is being, or has been, used in a way that the maker has given written notice will void the maker's warranty;
2. whether a reasonable person doing the work would know or suspect on reasonable grounds that the use of a product or system in a particular way would cause more instability, or affect the durability or soundness of the product or system or of the building work than if the product or system were used appropriately;
3. how reasonable it is in all the circumstances for the user of a product or system to rely on the maker's statement that the product or system complies with a stated standard;
4. whether the building work contravenes the Act or another territory law.

1. Considerations for proper and skilful work - construction tolerances - Act, s 42 (2)
   1. _In deciding whether building work has been carried out in a proper and skilful way, consideration must be taken of whether the work has been carried out - _
      1. to meet or exceed the standards stated in the approved plans; or
      2. if the approved plans do not vary reasonable minimum industry standards - to meet or exceed reasonable minimum industry standards.

22. Regulation 38 provides for the length of a builder's warranty as being a period of six years from the date of practical completion for structural elements and for a period of two years for non-structural elements.

1. End of statutory warranties - Act, s 88 (4)

(a) for residential building work in relation to a structural element of a building - 6 years after the completion day for the work; or

(b) for residential building work in relation to a non-structural element of a building - 2 years after the completion day for the work.

non-structural element, of a building, means a component of the building that is not a structural element.

structural element_, of a building, means - _

1. a load-bearing component of the building (whether internal or external) that is essential to the stability of the building or part of it; or
2. a component (including weatherproofing) forming part of the external walls or roof of the building.

1. It follows from the above that in order to be successful under the Act, in their claims for defective building work, the Clients must prove on the balance of the probabilities three things in relation to each defect they complain of:
   • (a) There is a defect; and
   • (b) The defect occurred within the prescribed period, that is within 6 years of 29 October 2015, for structural elements, or within 2 years of that date for non-structural elements; and,
   • (c) That the defective work the Clients complain of, was not carried out by the Builder in accordance with:
     • (i) the Act, or;
     • (ii) the work has not been carried out in a proper and skilful way.
2. It should be noted that the Clients are not limited to making a claim under the Act or the Regulations and are able to bring a claim under other legislation, such as the Australian Consumer Law.
   1. Builder's liability

This Act does not limit the liability a builder would have to anyone apart from this Act.

Water pipes render manhole (in the hallway) inaccessible

1. The Clients retained Mr Peter Leary, a licensed builder and building consultant, to investigate their concerns and complete a report.[6] The report was dated 28 May 2018, and was shared by the Clients with the Builder.
2. In relation to the water pipe issue Mr Leary gave an opinion that "the plumbing reticulation and pipe work is installed in such a manner that it restricts access to the manhole." He continued by noting that "a durable notice is required to indicate that concealed light fittings are installed within the cavity." The failure to install a durable notice amount to a breach of Australia New Zealand Standard AS NZ S 3000:2000. He also noted that insulation material was unevenly distributed.
3. Most significantly, he noted that there was electric cabling within two metres of the access hatch, which is a breach of the AS NZ S 3000:2000 Part 3.9.3.
4. Regulation 31(b) provides that failure to comply with a rule or guideline published by Standards Australia is one of the factors to consider when one is determining whether building work has been completed in a proper and skilful way.
5. The Builder's response to this claim is that it was not mentioned in their 90 day maintenance period, nor during the two year warranty period and therefore was not a proper claim the Tribunal could consider.
6. By email dated 26 October 2017 Mr Mauricio Rojas (for the Builder) emailed[7] Ms Burton. One of the items he listed in his email was "Water pipe can easily push a side not a very hard thing to do so that you can get access." I consider this comment to be sufficient to reflect that the Builder knew there was an issue with the water pipe. Proper investigation by the Builder would also have identified the issues with the electric cables and the absence of the durable notice, both of which arose during the two year warranty period.
7. As a consequence of that email I am satisfied that the matter was raised by the client with the builder within the two year warranty period.
8. I am also satisfied that the water pipes were fixed in a negligent manner, which made access through the manhole needlessly difficult. In the view of the Tribunal the work has not been carried out in a proper and skilful way. Consequently the Tribunal finds this claim proven and awards the Clients the sum of $803, the sum Mr Leary identified as being an appropriate figure to undertake the work.

1. The Clients complain that there has been shrinkage of bamboo floorboards in a number of locations throughout the property, resulting in unsightly gaps.
2. Mr Leary agreed that shrinkage had occurred, but he concluded that "the inconsistent shrinkage is not considered to be building defect, rather an effect of inconsistent moisture content of individual Bamboo boards". For that reason this claim is dismissed.
3. It should be noted that the Clients may care to contact the manufacturer of the bamboo floorboards with a view to seeking assistance and/or compensation from them for the difficulties that are experiencing with the floorboards.

1. The Clients complain that water enters the garage when it rains.
2. Mr Leary considered the issue and concluded that "the NCC allows for inadvertent leakage under garage doors and the like, therefore water ingress of this nature is not considered defective." For that reason this claim is dismissed.

Internal doors not painted top and bottom causing swelling

1. Mr Leary undertook an examination of four cavity walls and three swing doors, using a mirror to look at the top and bottom surfaces. Following that examination he concluded that those doors had not been sealed.
2. Mr Leary noted that for door warranties to apply the top and bottom surfaces have to be sealed. He also noted that the Guide to Standards and Tolerances 2007 Part 8.06 states that door leaves are defective if they do not have all sides, top and bottom edges sealed to prevent moisture entering.
3. There is no issue as to this defect arising within the warranty period and the Builder knowing of it. The issue is, for example, mentioned in an email from the Clients to the Builder dated 20 October 2017.[8]
4. The Builder believes that the doors were sealed top and bottom.
5. The Tribunal is satisfied that Mr Leary inspected the doors and found them not to be sealed. In the view of the Tribunal the work has not been carried out in a proper and skilful way. Consequently the Tribunal finds this claim proven and awards the Clients the sum of $770.

1. Mr Leary inspected the roof from outside and included two photographs of the junction of the roof with the wall in his report. His investigation revealed "Piece of flashing on roof not flush to the wall leaving gap where vermin and pests can enter."
2. Mr Leary noted that AS1562.2 requires flashing to be tightly fitted and joined sufficient to prevent water and vermin entry.
3. Mr Leary also carried out a restricted inspection of the specific area from inside the roof space and found there to be natural light entering the roof from what he determined to be an excessive gap located at the upper edge of the skillion roof, over the dining room. The gap was such that it would allow birds to enter as well as wind driven rain.
4. During the hearing Mr Leary raised an additional concern with the roof. He identified in the photographs that there was also light entering the roof space below the area first identified. This he contended was at the lower apron flashing. From this he concluded that there was also a gap at the junction of the flashing to the lower level roof which he determined was greater than permitted by the Australian Standards and was therefore work not carried out in a proper and skilful way.
5. The Builder's view was that the gap at the upper location was excessive and could be closed off with the addition of an angle fixed to the underside of the fascia.
6. The Builder's view was there was only a maximum 10mm gap at the lower location between the apron flashing and the lower roof, which the Builder considered to be cosmetic.
7. The Tribunal makes the observation that the AS 1562.1:1992 specifies the design and installation of sheet metal roof and wall cladding. Mr Leary may have inadvertently referred to Part 2 instead of Part 1, of the Australian Standard however his intent is clear.
8. The Tribunal is satisfied that the upper level gap is excessive and may permit entry of rain or vermin and pests can enter the roof space and therefore this part of the house was not constructed in a proper and skilful way.
9. The Tribunal does not have enough evidence to be satisfied that Mr Leary's conclusion about an excessive gap at the apron flashing may breach AS1562.1 is correct.
10. The Tribunal was not provided with photographs of the flashing from the outside of the building. The roof area was accessible as Mr Leary was evidently standing on the roof at this location to photograph the upper level gap at the fascia. Consequently the Tribunal finds this claim to be only partly proven and awards the Clients the sum of $213.

1. The Builder submits that this claim was not made within the two year warranty period and therefore it should be dismissed. The Tribunal can find no evidence that the claim was made in that time. The Clients have consequently failed to prove an essential element of their claim. For that reason this claim is dismissed.

1. The Builder submits that this claim was not made within the two year warranty period. The Tribunal can find no evidence that the claim was made in that time. The Clients have consequently failed to prove an essential element of their claim. For that reason this claim is dismissed.

Roof trusses in the al fresco area not built in a proper and skilful way

1. The Builder concedes this issue but would like to have had its own staff repair the defective works. The Clients proceeded with another party to undertake the repairs.
2. The Tribunal believes that the sum of $990 is reasonable in all the circumstances and accordingly awards the Clients that amount.

Missing pump - rainwater tank not connected to the toilets or cold water taps in the laundry

1. This claim is more correctly determined according to the Australian Consumer Law and the law of contract, rather than under the Act or Regulations.
2. It is common between the parties that a rainwater system was required to capture rain, store it in a tank and then use it to flush toilets, to supply water to the cold tap in the laundry and to serve all external taps.
3. It appears to be common between the parties that the relevant domestic pipe work provisions are in place, but that the system will not function as intended because there is no pump between the tank and the pipes that are intended to take the water to the appropriate destination. The photograph provided by the Clients[9] clearly shows that there is no connection between the water tank and the domestic water pipes.
4. The building contract[10] incorporates the plans as part of the contract. Reference to Sheet Number 100[11] contains reference to the water tank and its use. It provides:

MIN 4000 LT RAINWATER TANK 50% OR 100M2 OF ROOF AREA, WHICHEVER IS THE LESSER, IS CONNECTED TO AT LEAST THE TOILET, L'DRY COLD WATER AND ALL EXTERNAL TAPS, AS PER ACT TERRITORY PLAN.

1. The Tribunal can see no other contractual term, and neither party has pointed to any other term, in the contract that relates to this issue. In particular there is no clause or reference to the Clients having to purchase a pump to make the system work as envisioned.
2. In the Tribunal's view the critical phrase is 'is connected to at least the toilet, l'dry cold water etc'. In the Tribunal's view the plain meaning of the phrase is that the Builder will supply and install all of the components necessary to achieve the stated goal of connecting water from the tank to the toilet and other destinations. This includes all of the plumbing hardware such as pipe work, connectors glue etc., as well as the pump that makes the connection work and able to transport the water from the tank to the desired destination (toilet, laundry and outdoor taps).
3. There is no qualification to that very clear contractual term. Had the Builder wanted to qualify that phrase in order to make it clear that the connection between the tank and domestic water supply would only work if the Clients purchased an additional item; a pump, then either on the plan or elsewhere in the contract the Builder should have clearly stated that.
4. The Tribunal's view in terms of the correct way to interpret the phrase 'is connected to at least the toilet etc' is reinforced by the need to construe the phrase contra proferentem; that is against the interest of the party drafting contract and with any ambiguity decided in favour of the party who did not draft the contract.
5. The Clients have found a pump they believe will be adequate for the sum of $1000.[12] That figure seems reasonable and is significantly cheaper than the cost of the pump the Builder suggested they supply to fix the issue. The Clients are awarded $1,000 for this part of their claim.
6. It should be noted that a similar result to that which the Tribunal has arrived at under the Australian Consumer Law and the law of contract, could have been arrived at by having regards to regulation 31(e) of the regulations.

1. Mr Leary noted that AS 1562.2 requires roofs to be constructed and sealed in a manner sufficient to prevent water entry.
2. According to Mr Leary's observations, this standard appears to have been breached.
3. Mr Leary examined the front porch. His inspection confirmed that there was evidence of water run marks on the surface of the render wall beneath the porch soffit. His inspection of the roof above the water marks identified an incorrectly detailed apron flashing and some potential points of water ingress relating to the cladding system. He also identified that the highlight window of the entry was installed without a window sill flashing.
4. Mr Leary highlighted that any potential water entry into the window wall junction is not able to escape. This may cause water entry into the cladding system.
5. Mr Leary noted that the apron flashing listed inwards and was another potential point of water entry.
6. The Builder's response to these issues is that the claim has been made out of the two year warranty period.
7. Plainly the Builder is wrong. The waterproofing issues detailed by Mr Leary make this a claim relating to a structural issue[13] with a six year warranty period.
8. The Tribunal accepts Mr Leary's view relating to these issues and awards the Clients $1,364 as estimated by Mr Leary.

1. Generally speaking under the ACT Civil and Administrative Tribunal Act 2008, each party is responsible for his or her own costs. Section 48 of the Act provides:
   1. Costs of proceedings

(1) The parties to an application must bear their own costs unless this Act or another territory law otherwise provides or the tribunal otherwise orders.

(a) if the tribunal decides an application in favour of the applicant, the tribunal may order the other party to pay the applicant--

(ii) any other fee incurred by the applicant that the tribunal considers necessary for the application; or

1. The Tribunal concludes that the Clients have been at least partially successful in their application and consequently the Tribunal awards them $159 in respect of the filing fee.
2. The Clients also seek the costs associated with Mr Leary's report ($1980).
3. Section 48(2)(a) of the ACT Civil and Administrative Tribunal Act 2008 was amended in 2014 by the Courts Legislation Amendment Bill 2013.
4. Prior to that time, ACAT could only award the application fee to a successful applicant. However, people particularly in the civil jurisdiction are faced with other compulsory government fees in order to access justice, such as a fee for an ASIC search, which we require clients to provide if, for example, they are making a claim against a company, and hearing or subpoena fees.
5. The amendment was intended to allow those other fees to be reimbursed.
6. However, there was no suggestion or intention that a party could claim a 'disbursement' such as expert witness expenses, although sometimes these are referred to as witness 'expenses or fees'.
7. The explanatory statement to the amendment provided:

This clause clarifies that when the Tribunal decides an application in favour of the applicant, it can award incidental costs of an application against the other party. Incidental costs may include application filing fees, business name search fees, subpoena filing fees and hearing fees.

1. The word 'fee' was used intentionally, instead of a broader word 'costs' or 'expenses' to try to distinguish from other kinds of costs or expenses which would ordinarily be considered disbursements.
2. As a consequence the Tribunal is unable to make an award in the terms sought by the Clients and this portion of their claim is dismissed.

Quantum awarded by the Tribunal to the Clients (including GST)

Absence of a water pump associated with water tanks

1. Having considered all matters raised in the application the Tribunal awards the Clients a total of $5,299.

[2] The Builder's volume of documents - Tab 1

[3] Transcript of proceedings 10 September 2018 page 6 line 5