Review of decision to withdraw direction to rectify, section 72(14) Queensland Building Services Authority Act 1991, section 24 Queensland Civil and Administrative Tribunal Act 2009.

Mr David Mackay and Mrs Joanne Mackay, self represented.

Queensland Building Services Authority represented by its employee, Ms E Roberts

[1] The applicants seek to review the decision of the Queensland Building Services Authority (QBSA), dated 14 December, 2009 not to direct Mr John William Dunlea (the Builder), to rectify building work carried out at the applicants' property located at 24 Cliff Way, Eagle Heights, Queensland (the Property).

[2] The application was filed in this Tribunal on 11 January, 2010. The applicants seek an order that:

• (a) The floor be replaced and installed correctly taking into account:

  • local conditions;

  • the current method of installing timber floors in the remainder of the house, and

  • follow the guidelines for acclimatising floorboards prior to installation as recommended by Timber Queensland, the timber flooring and Finishing Association of Queensland and the National Timber Development Council.

• (b) The new floor to be sanded and polished.

[3] A hearing was held on 22 October, 2010.

[4] Evidence was given by the applicants and their expert Mr David Hayward. The witnesses for the respondent were the decision maker Mr Les Brain and an expert Mr Ed Scott. The Builder was summonsed to appear by the QBSA. He provided an affidavit to the effect that he was unable to appear because of commitments to his elderly and sick mother. The QBSA did not seek any adjournment to enable his attendance.

[5] Earlier in the proceedings an application to join the Builder as a party was refused.

[6] On 18 April, 2005, the applicants entered into a contract with the Builder to carry out the following work:

• (a) construction of an extension to the dwelling at the property;

• (b) construction of a 2 storey timber framed dwelling;

• (c) removal of the existing sunroom and flat at the property (the Works).

[7] The Works involved the laying of a spotted gum tongue and groove floor over the new downstairs plywood sub floor.

[8] The Works reached practical completion in September, 2005.

[9] The applicants first became aware of warping of the new floorboards and leaking water into the dining room in February, 2008. They complained to the Builder.

[10] At the Builders suggestion their insurer was contacted. CommInsure inspected the dwelling. It refused insurance on the basis that the problems related to defective building work.

[11] On 16 March, 2009, the QBSA received a written complaint from the applicants.

[12] Inspections occurred and the QBSA engaged its expert Mr Scott to prepare a report. Subsequently, on 21 July, 2009 the QBSA issued a request to rectify the alleged defective work. The defective building work was described as follows:

"The installation of timber flooring is not in accordance with acceptable building practice in that the flooring members are becoming detached creating a health and safety issue for the occupants of the building."

[13] On 8 September, 2009 the Authority issued a Direction to Rectify and /or Complete Number 33542 (the First Decision) to the Builder to rectify the following defective or incomplete building work:

"1. The installation of timber flooring is not in accordance with acceptable building practice in that the flooring members are becoming detached creating a health and safety issue for the occupants of the building."

[14] The Builder filed a review of the First Decision with the former Commercial and Consumer Tribunal. He submitted that neither the workmanship nor the materials were in any way faulty or unsatisfactory and that the damage occurred two and a half years after completion of construction by an extraordinary weather event exacerbated by the owner's alteration of site drainage well after completion of construction.

[15] Ultimately after a further inspection on 2 November, 2009, Mr Hollyman the QBSA's building inspector having conduct of the matter, concluded that the Builder's original floor construction was not defective and it was unreasonable to think the Builder could have been expected to foresee the reasons for the unsatisfactory buckling that had developed in the floor over two years earlier. The QBSA then reversed the First Decision.

[16] On 9 December, 2009 the review application by the Builder was withdrawn by consent and the QBSA withdrew the First Decision.

[17] It is the decision to reverse the First Decision which is the subject of this review.

[18] This Tribunal is exercising its jurisdiction under the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act) to review a decision made by the QBSA. The Tribunal has all the functions of the decision maker and must hear and decide the matter by way of a fresh hearing on the merits.

[19] Under section 24 of the QCAT Act the Tribunal may:

• (a) confirm or amend the decision; or
• (b) set aside the decision and substitute its own decision; or
• (c) Set aside the decision and return the matter for reconsideration to the decision maker for the decision, with the directions the tribunal considers appropriate.

[20] Section 86(1) of the QBSA Act provides that the Tribunal may review a decision to direct or not direct rectification or completion of work.

[21] The QBSA's power to require rectification of building work lies in Section 72 of the QBSA Act, which provides:

• (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...

[22] The power of the Authority to require rectification of building work is a discretion which must be exercised in accordance with the objects of the QBSA Act. Section 3 provides:

(a) To regulate the building industry -

• (i) to ensure the maintenance of proper standards in the industry; and

• (ii) to achieve a reasonable balance between the interests of building contractors and consumers; and

(b) To provide remedies for defective building work; and

(c) To provide support, education and advice for those who undertake building work and consumers."

[23] In the decision of Stephenson v Queensland Building Services Authority [2005] CCT Q056-04 Member Moon stated the following_:_

"In exercising the discretion, the Tribunal must consider the competing interests of the parties involved in their relevant positions. Such things as the innocence or blamelessness of the owners are, of course, relevant. Also relevant is whether or not it can be said that the builder is in some way at fault. Clearly in those cases where the cause of the defective building works can be attributed to the builder, then the exercise and the discretion in favour of affirming the decision of the Authority to give the direction is more likely to occur."

[24] At the hearing the QBSA conceded that the construction of the timber flooring was building work and that the work was defective. In reviewing the decision I have to consider:

• whether the Builder is in some way at fault, so that the defective building works can be attributed to him; and

• whether it would be unfair in all the circumstances to require him to rectify the defective Works.

[25] The applicants position set out in their application and in exhibit 2, their response to the BSA statement of reasons, is that:

• (a) the floor boards started warping soon after installation;

• (b) there are no expansion gaps between the floorboards as there are in the older part of the house;

• (c) the builder suggested that he should have bricked in the extension and sealed it from underneath, but never did so;

• (d) to the extent that the QBSA and the builder's expert suggests "unusual, sustained, wet weather during the period of several weeks in December 2007 - February, 2008 were a trigger for the floor damage, there are no weather reports to support this statement. The rainfall patterns during this time were within the normal range expected.

• (e) to the extent that the Builder's expert relies on altered site conditions, they have never altered the site. The builder removed the concrete slab and bricks around the perimeter of the old house. The bricks were never replaced.

• (f) to the extent that the use of a sheet floor product allowed eventual moisture ingress over time, this is a construction issue. The sheet flooring material was chosen solely by the Builder. Likewise the sandwich floor construction was the Builder's choice.

• (g) the floor laying method was at odds with the industry standards which recommended greater allowance for floor expansion in more moist environments, checking of moisture content and use of acclimatisation.

• (h) although first brought to the Builder's attention in February, 2008 warping of the floor began much earlier than this. They had noticed cupping of the floorboards at least a year earlier. After the inspections organized by the insurance company they realised the floorboards probably started swelling from almost day one of their installation

[25] At an expert's conclave held on 30 September, 2010, a joint report was agreed between Mr. Scott for the QBSA and Mr. Hayward for the applicants. The report concluded that the Builder was responsible for defective building work at the Property.

[26] In particular the experts agreed that:

• (a) the Builder should have taken into account the whole of the information contained in Timber Queensland Technical Data sheet 17 at p 3 - Installation Moisture Content;

• (b) the Builder did assess the moisture conditions of the sub-floor timbers and treated all sub-floor timber to ensure it did not rot;

• (c) it appears that the builder did not assess the moisture content of the flooring to be laid;

• (d) the Builder used selectively the "normal conditions" information contained in Timber Queensland Technical Data sheet 11, laying the floor for those conditions;

• (e) the Builder did not lay the floor so that there was room for extra expansion. The normal expansion allowance used was not suitable for the humid conditions of the environment;

• (f) the building work is defective and is a Category 1 defect;

• (g) the builder is responsible and a notice of rectification should issue to the builder;

• (h) appropriate rectification is the removal and relaying of the affected floor in accordance with industry recommendations for the humid environment;

• (i) the cost if not undertaken by the builder would be subject to external quotes.

[27] Mr Hayward of the Australian Timber Flooring Association gave evidence for the applicants. His report dated, 8 June, 2010 is exhibit 1. Mr Hayward confirmed it contents in his evidence at the hearing.

[28] The report records that:

• (a) spotted gum timber was delivered to the site and stored outside the premises for approximately 2 weeks. When brought inside it was installed straight away.

• (b) A cork expansion joint was fitted to the main living area adjoining an existing timber floor and that floor is performing well.

• (c) The homeowners felt that the floor became uneven shortly after taking occupancy. The floor that had buckled was beneath a bed and the buckling was not noticed until March, 2008. (I note the evidence of the applicants to this effect given at the hearing and accept that evidence.)

• (d) When entering the dwelling through the dining room it was evident that the floor was under pressure due to unevenness in its appearance. One board had also fractured under pressure and the floor had taken on a peaked appearance at board edges. When walking into the front bedroom severe buckling was immediately noticeable.

• (e) Drainage at the site was good. The ground beneath the dwelling was elevated a little from the perimeter foundation stumps and there was no sign of previous surface water beneath the dwelling although some puddles may occur for short periods during wet weather at the perimeter. Ventilation was considered to well exceed the minimum recommended.

• (f) Where the buckling was present it was evident that the floor was lifting over the width of the plywood sheets beneath.

• (g) It was observed that the adhesive bond had broken and that the nails had pulled through the plywood in the centre of the sheets. Nails were over punched to 50% of the thickness of the plywood.

• (h) Expansion of the floorboards in the dining room has been sufficient to bow the aluminium window joinery.

• (i) The recommended process for laying floors in locations where expansion can be expected, such as the humid location of the Property is to strip out the flooring to enable air flow over the boards and the uptake of moisture prior to installation. This is known as acclimatisation and takes a 2 to 3 week period.

• (j) Current recommendations in relation to laying over a structural sub-floor such as plywood are to ensure fixing is adequate, such as screw fixing to the joists. It is acknowledged that this recommendation has only been included in the Australian Timber Flooring Association information since 2009.

• (k) It is asserted in the CedarBiz Works Pty Ltd report relied upon by the Builder, that the Engineered Wood Products Association of Australia (EWPAA) "Design Manual - T&G Structural Plywood for Residential Flooring" publication had been complied with. Mr Hayward's enquiries of the EWPAA, revealed that the publication did not cater for the consequences of expansion in overlaid solid timber flooring. He said the EWPAA fixing recommendations are to provide a structural floor diaphragm. The EWPAA told him that the effect of over punching nails would be to reduce the strength of the plywood at the fixing points.

• (l) Mr Hayward said that expansion pressure and buckling of the plywood sub floor from the joists are the main concerns with this floor. He concluded the main factors considered to have contributed to the performance issue with the floor are:

  • The general conditions of the site where higher humidity prevails.
  • Not taking adequate consideration of the moist site and locality at the time of installation of the floor and the likelihood of significant expansion after installation.
  • Fixing of the sub-floor to recommendations that were not designed for the direct adhesive and mechanical fixing of timber flooring. (Noting that written guidance was probably not available).

• Reduced nail fixing strength due to over punching in the area of buckling.

[29] In evidence Mr. Hayward said that other than acclimatisation, another method of dealing with moist site conditions is to lay the Boards with regular gaps. That method was not used.

[30] In relation to the expert's reference in their joint report to a failure by the Builder to take into account the information contained in Timber Queensland Technical Data Sheet 17 at page 3, it was noted that the Data sheet was not available at the hearing. I accept Mr Hayward's evidence that Exhibit 12, Timber Queensland Data Sheet 2 (October 2005) at paragraph 2.5 contains the same information as Data Sheet 17 at page 3. Similar information is set out in Exhibit 10 Timber Queensland Technical Data Sheet 11, Tongue and Groove Timber Flooring, (April 2004) and in Exhibit 11, Data Sheet 2 (October, 2004).

[31] I accept Mr Hayward's evidence that a local builder should know about these guidelines for laying timber flooring in a moist climate. I note that the floor in question was laid in December, 2005, after publication of these guidelines. I accept the evidence of Mr Hayward that the Data Sheets are distributed to builders.

[32] Mr Scott, an independent timber consultant gave evidence. He affirmed his joint report and added that allowing extra gapping was his preferred method of ensuring timber flooring copes with a higher moisture content. He said that the Builder seemed to have recognized the high humidity conditions because he treated the timber under the house with preservative, but he did not recognize the need to address the extra expansion on the floor above. I accept his evidence that the problem in this case involves the fixing of the plywood to the joists. He said that when expansion occurs it affects the glue bond and may lift the plywood and sometimes the joists. He said that he had not picked up the over punching of nails, but thought that it was a point well made.

[33] I accept the evidence of Mr Scott that the Builder should have known of the recommended practice to acclimatise timber or put expansion gaps in when laying a timber floor in a humid environment. I accept his evidence that these recommendations have been made since at least 1999 in various technical bulletins.

[34] The QBSA relied on its Statement of Reasons and the evidence of the decision maker, Mr Brain. His evidence was to the effect that:

• (a) the withdrawal of the direction to rectify was based on the report of Mr Scott, dated 26 June, 2009 and the expert report obtained by the Builder from CedarBiz Works Pty Ltd. These documents appear at pages 106 and 45 respectively of the QBSA's Statement of Reasons. He did not think it fair that the Builder be directed to rectify in light of these reports.

• (b) He formed the opinion that the Builder had done nothing wrong, that the construction appeared to be in accordance with the construction practises at the time.

• (c) Excessive moisture on the ground under the floor caused the buckling.

• (d) It is normal practice to put an expansion gap under the skirting board. That was done. There was an expansion joint in the lounge room area. There was no need for any further expansion joints.

• (e) The data sheets don't talk about a sandwich floor such as this one.

• (f) Because the timber floor was fixed to the sub floor expansion gaps would not have helped with the current problem.

• (g) There was not enough evidence to say the Builder was wholly responsible.

• (h) In relation to over punching, a lot of tests would need to be done to determine relevance.

• (i) The QBSA was not aware of any significant buckling of the floor before a major rain event which occurred prior to the Builder being notified of the problem in February/March, 2008.

• (j) He could not say why the earlier building inspector, Mr Hollyman had issued the direction to rectify in the first place.

[35] It appears to me on the basis of all the experts' reports and evidence that fixing of the structural plywood sub floor to the joists is critical to the cause of the current problem, in circumstances where a timber floor is overlaid on the plywood sub floor and the environment is particularly humid. None of the experts suggest that use of a structural plywood sub floor and overlay of timber boards was inappropriate or that another method of construction was preferable.

[36] A cause of the problems has been identified as a failure to screw fix the plywood to the joists so that it is sufficiently strong to withstand the lifting pressures on the plywood exerted by the expanding timber floor above. This recommended practice was not articulated to the industry at the time the floor was laid. Accepting the state of industry guidelines at the time of laying the floor, the Builder may not have done anything wrong in fixing the floor with glue and nails.

[37] The EWPAA Design Manual - Plywood Residential Flooring (Appendix B to the report of Cedar Biz) does not say the fixing of the plywood should be different to that set out in the recommendations, if a timber floor is to be affixed to it. The information sheet specifically anticipates that the plywood will be covered with a range of floor coverings and refers to ceramic tiles and carpet. It does not mention timber, but it does not exclude timber.

[38] I find that the EWPAA Design Manual - Plywood Residential Flooring being the relevant technical information at the time of installation of the floor, did not suggest that the information given was unsuitable to the application of a timber floor over the plywood sub floor. There was no evidence given by any expert that there was any other information available to the Builder to which he should have had reference, other than the EWPAA Design Manual - Plywood Residential Flooring.

[39] On this basis I find that the Builder was not at fault in failing to screw fix the plywood sub floor to the joists and that he followed the apparently relevant industry recommendation at the time.

[40] Was there anything else the builder should have done to prevent the buckling now evident in the floor?

[41] Mr Hayward says that acclimatisation of the timber would mean the floor was under less expansion pressure after installation. (See page 8 of his report). He does not say however that it would have avoided the problem altogether. His report records at page 8: "As far as we are aware such a process was not conducted but may have alleviated the current issues with the floor".

[42] I find that although acclimatisation would have been prudent, there is no evidence that even if the process had been undertaken the current problems would have been avoided.

[43] Mr Scott suggests utilising expansion gaps would have been a prudent step. Mr Brain did not think that would have helped the current problem, given the timber was adhered to the sub floor. I prefer Mr Brain's evidence.

[44] The second criticism of the Builder is that over punching nails compromised the strength of the plywood to resist lifting. The EPWAA is said to be the source of this assertion. No-one from the EPWAA was called on this point. Neither Mr Hayward nor Mr Scott purports any expertise in this regard and Mr Brain suggests testing would be required to establish the extent of weakness caused.

[45] I do not have sufficient evidence to say that over punching of nails was a significant cause of the current problems.

Would it be unfair to direct the Builder to rectify?

[46] No doubt there is a significant problem with the flooring installed by the Builder. The QBSA concedes that the Work is defective. The Work was performed by the Builder. One can see why the applicants struggle with the fact that the Builder has not been required to rectify his work.

[47] Mr. Brain thought it would be unfair to require the Builder to rectify the Work.

[48] I can understand why Mr Brain thought it was unfair to direct rectification of the work by the Builder, given the information he had to hand at the time. I accept the evidence of Mr Brain that the report of Cedar Biz was clear in concluding that the Builder had complied with accepted practise in the construction of the floor. The Cedar Biz report concludes that:

"Given the compliance with accepted materials and fixings in the Structural Plywood Installation Design Manual, and other T&G flooring product data sheets, the 2005 floor construction work cannot reasonably be considered defective.

My investigations have shown (see elsewhere in Report) that several factors have combined to create the circumstances for expansion problems experienced in this floor. Given the absence of sources about this, I believe it would be unreasonable to think that the builder could have been expected to foresee the reasons for unsatisfactory buckling that developed in the floor over two years later."

[49] Mr Brain also relied on the report of Mr Scott, which said: _"Fixing of the floor and the plywood and the incorporation of expansion joints appears to be in accordance with recommended practice."(_paragraph [2] of the conclusion). It is only the later received page of his report which gives an indication that there could be some criticism of the Builder for failing to take account of a site which could not be said to be "normal'. Even so Mr Scott tempers that criticism by saying "the problem is not well known".

[50] With the benefit of current thinking, it appears that other methods of fixing the sub floor would be more likely to meet the challenge of a very wet environment. The 2009 Australian Timber Flooring Association guideline now reflects that position in circumstances where a timber floor is laid over plywood. Cedar Biz said at page 19: "With the benefit of hindsight, a more robust fixing mechanism than provided in the Plywood Design Manual may need to be considered to cover all climate eventualities and other exacerbating issues at this site."

[51] I do not think the Builder should be fixed with responsibility for failing to use a construction technique not clearly articulated to Builders as a recommendation, at the time of construction.

[52] I have accepted that acclimatisation of the timber would have been a prudent step, although I cannot say that it would have avoided the problem in the applicants' case. I accept the view of Mr Hayward and Mr Scott that taking greater account of the moisture in the timber and the environment and making greater provision for expansion would have been prudent. Again, I do not think it is possible to say on the evidence that those steps would have avoided the problem. The conclusion expressed in the joint report that the Builder is responsible for the defective work through failure to allow for expansion of the timber, ignores completely the evidence in relation to the problem of the adequacy of the fixing of the sub floor to the joist, which it is acknowledged by the experts was not known at the time of construction.

[53] In light of the failure to address this point in the joint report, when they have both given evidence that it is the key cause of the buckling, I do not feel able to accept the conclusions of the experts in the joint report.

[54] Mr Brain has relied on the high rainfall in the months preceding the March, 2008 complaint as a factor in deciding that it would be unfair to direct the Builder to rectify.

[55] On the basis of my earlier findings that the Builder followed what appeared at the time to be the appropriate construction technique, I find that the Builder could not have been expected to foresee the result of those weather conditions, being the lifting of the sub floor from the joists. The higher than usual wet weather conditions of December, 2007 to February, 2008, are referred to in the Cedar Biz Report, which they say set up the conditions for the plywood to act as a wick and allow moisture to penetrate the timber boards, causing the worst of the buckling No representative of Cedar Biz was called to give evidence. I make no finding as to whether the high rainfall at that time did cause the buckling. There is sufficient evidence from Mr Hayward that the moist environment (whether extremely wet or not) caused the plywood to lift from the joists under pressure from the expanding timber floor.

[56] I find that the QBSA has correctly exercised its discretion under section 72 of the QBSA Act not to direct the Builder, Mr Dunlea to rectify the building work.

[57] Pursuant to section 24 of the Queensland Civil and Administrative Tribunal Act, I confirm the decision under review.

[58] I note the comment in the QBSA's submissions that the decision under review is not a decision in relation to the QBSA's Statutory Insurance Scheme.