Review Application - decision to issue Direction to Rectify and/or complete.

This is an Application brought by the Applicant, a builder, to review a decision by the Queensland Building Services Authority ("The Authority") to issue a Direction to Rectify. The Direction to Rectify was made on 3 December 2008 and the defect is identified as "The rectification work on the external wall of unit 4 is partly completed, but requires the preparation and application of the applied finishes".

On about 20 January 2004, Hepron Pty Ltd entered into a contract with the Applicant for the construction of the block of units at 1996 Gold Coast Highway, Miami[1].

On or about 21 April 2008 a complaint was lodged against the Applicant by the Body Corporate for Miami Seashells, 1996 Gold Coast Highway, Miami Qld. The details of the complaint were that in November 2007 bubbling of the render on the exterior of the building near unit 4 was noticed[2].

The Respondent directed the Applicant to rectify or complete the item in dispute by way of letter dated 1 July 2008[3].

The rectification work was performed between 1 July 2008 and January 2009. On or about 3 December 2008 the Respondent gave a Direction to Rectify and/or complete No. 32464 as above mentioned to the Applicant which the Applicant has sought to review.

A Review Application is by way of a fresh hearing on the merits[4]. Accordingly the Tribunal stands in the shoes of the decision maker.

On 5 January 2009 the Applicant filed this Review Application in the Commercial and Consumer Tribunal. This Application is now before QCAT.

By Section 271 of the QCAT Act, QCAT can only make a decision the Commercial and Consumer Tribunal could have made in relation to the matter under the Commercial and Consumer Tribunal Act.[5]

Section 104(1) of the Commercial and Consumer Tribunal Act states what decision the Commercial and Consumer Tribunal could have made in relation to the Review Application. That Section provided:

• (a) In deciding an Application for Review of the decision, the Tribunal may:

1. confirm the decision being reviewed; or 2. set aside the decision and substitute another decision; or 3. set aside the decision and return the matter to the State Agency who made the decision with directions that the Tribunal considers appropriate.

The Applicant relied upon his two Affidavits sworn 11 March 2009 and 15 June 2009 and gave oral evidence. He said he did not know if a man whose first name is Anton, the original rendering contractor, did carry out the partial rectification work. When asked what was the cause of the bubbles in the render the Applicant said that there were a number of reasons including the property being built on unstable ground, movement, underground water, vibration from nearby traffic but the bubbles were not the result of any defective work. He agreed that he had spoken with Anton about "the issue" but he did not know Anton's surname or phone number. He said that he did not ask Anton to do something about the bubbles on the wall. Rather Anton said to him what had happened was a result of Mr Dixon putting trees close to the wall and moisture ingress. He said that if you take away the render, the walls will not leak. He agreed when asked to look at photograph 6 of Exhibit 1 that no membrane coating or finish was on the render at all and that the render was completely exposed. He did not agree that the surface finish on the wall was deteriorating.

The second witness for the Applicant was Mr Jason Browne, the Regional Business Manager for Rockcote on the Gold Coast. Rockcote specialises in render and paint finishes. He had visited the property and Miami Seashells three times during the construction process and also in March 2009 had made a site inspection. He sent an email on 11 March 2009 to Mr M. Lazinski which relevantly said "I am happy to advise that my site inspection found that your project as 1996 Gold Coast Highway, Miami Qld meets Rockcote requirements regarding its products. The products applied have been applied in a tradesman like manner and other than some fine picture framing paint issues the appearance is of an acceptable quality. Please also be aware that during my visit it was noted that some general maintenance and cleaning is required in certain areas". He said that the words "picture framing" refer to the aesthetics of the building and do not affect waterproofing. Also the general maintenance cleaning referred to mould, mildew and salt issues. When referred to the bubbling, Mr Browne said that moisture found its way there in a form of blistering. He considered there had been structural cracking and that the causes of the moisture were drought and vegetation including the root system which takes moisture from the ground. Mr Morgan questioned the qualifications of Mr Browne to give expert evidence but Mr Browne replied he had been working in the rendering and texture business for 16 years but that he was not a qualified builder. He had made a lot of site inspections.

The Respondent relied upon the statement of Mr Gary Stick dated 16 August 2010 and called Mr Stick to give evidence. Currently Mr Stick is the Resolution Manager employed by the Respondent and has had 14 years experience as a building inspector with the Respondent. He inspected the property in August 2010 and observed as follows:

• (1) The left front wall is typical of the construction of a building being single skin concrete masonry construction with a painted cement render coating;
  • (2) There was a large section of the left front wall that appeared to be the subject of previous repairs to the render;
  • (3) The repaired area appeared to have again failed with cracking to the render evident and some minor dislodgement of the render itself;
  • (4) He observed that the previously repaired area had not been painted nor had the appropriate finishes been applied to it.
  • (5) In his view the lack of applied finishes and paint will inevitably result in water penetration in the wall system of the building. He said that when the wall of a building is a single skin construction the failure to apply appropriate finishes and paint is a category 1 defect. He said to repair the patched area, the texture coating had to be tidied up and the membrane coating should be put on to comply with the rest of the building and that the entire panel "wall to wall" should be done. He thought this would be no more than one day's work. He said the crack had re-appeared because of inadequate repair and that no membrane coating had been applied. He considered the fault was due to the rendered coating when it was stopped and started as it was being applied, possibly due to issues of impurity on the walls and there was no practical reason the owner or the environment are responsible.

The Respondent also relied upon the evidence of Mr P.J. Doak who provided 2 statements, dated 5 August 2009 and 10 August 2010[6]. He said at his first inspection in June 2008 the render had detached and split the finishing coating. He agreed there was a possibility of settling in causing cracking but not in this case and there was no indication of anything brushing against the wall. When asked to look at photograph 5 of Exhibit 1 he considered that moisture had been a factor and did not agree that there had been further rectification work done.

Mrs Wendy Steadman the Body Corporate Manager also gave evidence on behalf of the Respondent. I found her evidence to be straight forward and compelling. She said she had mentioned the bubbling issue to the Applicant in 2006. She had complained to the Respondent in November 2007 following a complaint from the agent for the owner of unit No. 4; that the Respondent had directed the Applicant to rectify the work and that in her view the work was done in December 2008.

1. Mr M Lazinski, who is the Applicant's son, provided written submissions to the Tribunal and spoke to them.

2. He said that the issues for determination of the Tribunal are:

• (a) What building work did the Applicant carry out?

He said the Applicant was the builder at the site. He made some contact with Anton. He did not ask Anton to do the particular rectification work.

(b) Was his building work defective or incomplete?

Mr M Lazinski said Mr Browne said there was nothing defective. The Applicant's evidence was that the work was done to the specifications. He said the settling of the ground around the site was an issue. He said that Mr Browne was qualified to speak as to the "tree dying settlement" which is one of the possible causes of the cracking. Mr Browne supported his evidence with two documents namely a document from Archicentre Limited entitled "Cracking in Brickwork"[7] and an article from CSIRO entitled "Foundation Maintenance & Footing Performance: A Home Owners Guide".[8] He said that Mr Doak did not consider such issues.

(c) What was the cause of the bubbling/blistering of render or paint on the eastern wall site, was it a result of defective building work or otherwise?

Mr M. Lazinski submitted that there was insufficient evidence in this regard. In fact there was evidence to the contrary if the Tribunal accepted the evidence of Mr Browne.

(d) Was the decision to issue the direction reasonable in the circumstances, in particular given that the defects were notified to the BSA significantly outside the limits imposed by the BSA's Rectification Policy? Mr M. Lazinski said it was irrelevant whether the alleged defects were category 1 or 2. They were notified to the BSA and that the Applicant does accept that the Tribunal has a discretion. He referred to a statement by Mrs Tanya Louw signed 4 August 2009 which has been filed with the Tribunal in which she stated that she first noticed the defect blistering of the render in 2005 and brought it to the attention of the Body Corporate. He said that the notification to the BSA was some years after this alleged defect had become apparent.

(e) By whom should any defective work or incomplete work be rectified by if at all.

Mr M. Lazinksi referred to a decision of His Honour Judge McGill in Queensland Building Services Authority -v- O'Brien & Ors [2002] QCD329 at paragraph 49 where His Honour said "Ultimately it seems to me that, when an occasion arises to consider the exercise of the discretionary statutory power in Section 72(1), it is necessary to decide whether it is appropriate that the particular defective or incomplete work be rectified, and if so, by whom it should be rectified". Mr M. Lazinski said that the original contractor who carried out the original rendering works should be the person who is requested to rectify the allegedly defective work.

1. Mr Morgan for the Respondent provided written submissions which included issues for consideration. He submitted that for the Authority to issue a Direction to Rectify, it must be satisfied of the following:

• (a) That there is building work involved;
  • (b) The building work is defective and/or incomplete; and
  • (c) The discretion of the Authority should, in all the circumstances, be exercised to issue a direction to the person who carried out the building work.

18. Pursuant to Section 9 of the Act the Queensland Building Services Board ("The Board") approved the "Rectification of Building Work Policy". The rectification of building work policy that was in place when the building work was performed, commenced on 1 September 2004[9].

The Policy includes the following (part only quoted)

1. It is a guideline policy of the Queensland Building Services Board that a person who carries out category 1 or 2 defective building work should be required to rectify that building work, unless in all the circumstances rectification is an unreasonable remedy.

2. Under Section 72(1) of the Queensland Building Services Authority Act 1991 (the Act), if the Queensland Building Services Authority (the Authority) is of the opinion that building work is defective, the Authority may direct the person who carried out the building work to rectify it. In deciding whether to give a direction for rectification of building work, the Act allows the Authority to take into consideration all the circumstances it considers are reasonably relevant. Those circumstances might include any delay by an owner in notifying the Authority of a defect, where the delay:

(a) In respect of a category 1 defect, exceeds 3 months after the defect became apparent; or

(i) 6 months after the building work was completed or left incomplete; or

(ii) 7 months, if the owner notified the contractor of the defect within 6 months after the building work was completed or left incomplete.

1. Under the Act, a direction cannot ordinarily be given more than 6 years and 3 months after the building work was completed or left in an incomplete state. The only exception is if the Commercial and Consumer Tribunal is satisfied, on application by the Authority, that there is sufficient reason for extending that time.

2. The fact that a direction is given under the Act does not prevent disciplinary action in respect of the defective building work.

1. For the purposes of this policy, category 1 defective building work is:

A. Building work (other than residential construction work causing footing or slab movement) that is faulty or unsatisfactory because it either:

(a) adversely affects the structural performance of a building;

(b) adversely affects the health or safety of persons residing in or occupying a building;

(c) adversely affects the functional use of the building; or

1. For the purposes of this policy, category 2 defective building work is building work that is faulty or unsatisfactory because it does not meet reasonable standards of construction and finish or has caused a "settling in period" defect in a new building.

2. The Tribunal has held that a direction to rectify a category 1 defect ought to issue even though there had been a failure to notify the Authority of the category 1 defect within three (3) months of that defect becoming apparent in the following cases:

(a) Lane v QBSA & Ushay [2002] QBT 163 - "It is settled law that a blind adherence to policy does not meet a decision-makers' obligations where the exercise of a discretion is required (refer Re Drake and Minister for Immigration and Ethnic Affairs (no.2) (1979) 2 ALD 634)."..."...the Authority ought to have taken into account the reason for the homeowner's delay....

(b) Hayes v QBSA and Breakwell [2000] QBT 89 - "the times for lodgement of the dispute notification form with the Authority are to be interpreted as a guideline and not as a mandatory".

(c) D J Builders Pty Ltd v QBSA R173097 [1998] QBT 96 - " I further find that there is no time limit in the mandatory sense provided for by the policy. It is a matter for the discretion of the Authority".

1. Regarding the evidence given in the case the Respondent submitted that on 3 December 2008, the Authority issued the Applicant with a direction to rectify. The defect is identified as:

"The rectification work on the external wall of unit 4 is partly completed, but requires the preparation and application of the applied finishes"

1. The direction clearly identifies work that is defective.

2. There is evidence that rectification work was performed between 1 July 2008 and January 2009.

The Applicant was the person who carried out the building work for a number of reasons, including "the licensee history for the Applicant, which also shows that the Applicant held a builder's license when the building work the subject of the direction to rectify was performed".

In any event it emerged during the hearing that the Applicant accepted that he did do the building work involved.

Mr Morgan for the Respondent further provided written submissions in relation to the time limit issue and the other issues in this review.

Mr Morgan for the Respondent also submitted that the Applicant agreed with details of the Building Code para FF1.2 and FF1.4[10], The Masonry Structure Australian Standard page 39, para 4.7.4[11] and page 48, para 4.14.1. Mr Morgan also submitted that the Applicant accepted that the Australian Standard on painting had not been complied with.

He further said that he objected to Mr Browne's evidence on the basis that Mr Browne was not qualified as a builder and did not have a licence and that the Tribunal should not give Mr Browne's evidence much weight. Further, Mr Browne said that he was not familiar with the Building Code or with The Australian Standard for Masonry Structures.

On the other hand both Mr Stick and Mr Doak said the building work is defective and that it is a category 1 defect. The weight of the evidence in this case showed that the work was defective.

Mr Morgan submitted finally that as the defective building work was carried out by the Applicant, the discretion of the Authority, should in all the circumstances have been exercised to issue the direction to the Applicant that was issued and that the building work is still defective as at the date of the hearing.

Having considered all the evidence in this matter and the submissions on behalf of the parties, the Tribunal prefers and accepts the evidence of the Respondent to the evidence of the Applicant.

I find that there was building work involved. Indeed this was common ground between the parties that emerged at the hearing. Secondly, I find that the building work is defective and/or incomplete. In particular I prefer and accept the evidence of Mr Doak and Mr Stick in this regard to the evidence of the Applicant and Mr Browne.

While I accept that the Respondent had some concerns about the qualifications of Mr Browne, I found his evidence relevant but have not given it the weight that I have given to the evidence of Mr Stick and Mr Doak. I found both Mr Stick and Mr Doak's evidence to be clear and persuasive, particularly bearing in mind their experience and relevant qualifications.

I find that the discretion of the Authority should in all the circumstances be exercised to issue a direction to the person who carried out the building work and I am satisfied on the evidence that the person who carried out the building work was the Applicant.

As mentioned above I was impressed with the evidence of Mrs Wendy Steadman (the Body Corporate Manager) who gave clear and persuasive evidence. Ms Tania Louw was not called to give evidence but the Tribunal did have the benefit of her filed statement. On balance, I prefer and accept the evidence of Mrs Steadman to the evidence of Ms Louw for the reasons I have set out above in regards to Mrs Steadman's evidence.

I find the defect to be a category 1 defect based on Mr Stick's and Mr Doak's evidence and that this defect became apparent in November 2007. I further find that the defects notification occurred on 21 April 2008 and accordingly there was only a delay of 3 months between February 2008 and 21 April 2008 of such notification. I note that the guideline policy says that in deciding whether to give a direction to rectify building work the Act allows the Authority to take into consideration all of the circumstances it considers are reasonably relevant. Further, those circumstances might include any delay by an owner in notifying the Authority of a defect, where the delay in respect of a category 1 defect, exceeds 3 months after the defect became apparent.

Accordingly, the Authority's decision on 3 December 2008 to issue the Applicant with a Direction to Rectify and/or complete should be confirmed.

1. The Applicant submitted that no order should be made as to costs.

2. The Respondent submitted that the Tribunal should, if the Tribunal considers it appropriate allow the parties to make submissions as to costs which will be dealt with on the papers.

3. In the circumstances of this case, I will make no order as to costs and allow the parties to make submissions as to costs as follows:

• (1) The Respondent may file submissions as to costs and serve a copy of the same on the Applicant on or before 4:00pm on 4 November 2010;

• (2) The Applicant may file submissions in reply as to costs and serve a copy on the Respondent on or before 4:00pm on 18 November 2010.

[4] Section 20 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act)

[5] See Section 271(2)(b) of the QCAT Act