OWNERS OF ISLAND APARTMENTS STRATA PLAN 52597 and PINDAN PTY LTD [No 2] [2018] WASAT 2 | Case summary

[4]OWNERS OF ISLAND APARTMENTS STRATA PLAN 52597 and PINDAN PTY LTD [No 2] [2018] WASAT 2 | Case summary | Zoe

[217]

...

The immediate risk is if a puncture occurs, but you're quite right, in the steel above the line of the plastic cap will potentially corrode, and that is in the cover zone, between in front of or closer to the soffit than the reinforcement.

...

There's a couple of considerations. One which you pointed out, yourself, which is the plastic tip has a discrete depth. But beyond that, if there's contaminants, carbonation or chloride attack affecting the concrete as it ages, that part of the bar chair will start corroding. So, for example, you may have something which has an intact plastic tip, but in due Coarse, say, after 20 years, when the carbonation crunch might be at that point, or the chloride level reaches a certain level, you may get more widespread corrosion happening with all those bar chairs. Now, the other issue...

...

... And for those ones which have punctured and have the some area at the bottom exposed, I think that they would corrode based on the environmental effects, the certain effects, such as the distance provided by the AcraTex cover. Now, the AcraTex render is a rough a roughfinish surface and then it's been painted over the top with some good quality paint. But the AcraTex being undulating, that in itself causes a different amount of protection in different areas of the soffit.

But the the main thing, I think, which would affect when those things start corroding or not is (a) weather that puncture has occurred; (b) how much chloride has been deposited. The chloride deposition can be quite local (indistinct) chloride tends to come and stick onto surfaces and that can have Peter may may actually talk to this a little bit better than myself, but you tend to have some quite localised effects on buildings with chloride sort of dumping and accumulating in certain soffit areas, whereas other soffit areas which may be better cleaned off by wind or rain, they they may have less chloride accumulation.

All the soffits will be affected by carbonation. Carbonation is the atmospheric the atmosphere has carbon dioxide in it, and that is roughly constant. However, there's a lot of localised variation of carbonation as well, depending on its exposure zone. In still areas you tend to get more carbonation. So the carbon dioxide in nonwindy areas will have an opportunity to sit and react with the concrete, whereas in windswept areas it will tend to get blown blow off the off the face of the building. So carbonation is an odd one, because the highest rate of carbonation is actually in indoor concrete, and the lowest rate is in highly exposed areas[.]

(T:3738; 03.08.17)

[509]

The applicant is the Strata Council, on behalf of the strata company of the 'Islands', an apartment complex (Strata Plan No 52597) located in North Coogee.
The applicant made a complaint to the Building Commission (complaint) under s 5 of the Building Services (Complaint Resolution and Administration) Act 2011 (BSCRA Act) in respect of alleged faulty or unsatisfactory building work or work not carried out in a proper and proficient manner by Pindan Pty Ltd, the respondent.
The Building Commission referred the complaint to the Tribunal under s 11(1)(d) of the BSCRA Act.
The respondent contended that a number of items in the applicant's 'Schedule of Complaints Requiring Determination' filed in the Tribunal on 5 April 2016 (Complaint Schedule) (Exhibit 1 pages 16 - 18) were outside the scope of these proceedings and the jurisdiction of the Tribunal as they were different, or not the same as the complaints bearing those numbers in the applicant's original complaint filed in the Building Commission on 18 November 2013, or the same as those in the revised schedule of complaints filed by the applicant in the Building Commission on or around 22 April 2014.
The preliminary issue was heard by the Tribunal on 19 October 2016[17].
The substantive matter which I will refer to as Pindan No 2 was heard between 31 July and 4 August 2017[18].
The Tribunal found among other things that the respondent was liable to carry out remedial work to various steel items; was liable for a proportion of the remedial work required in relation to the timber soffits and the acrylic texture; some of the costs of the remedial work for the swimming pool; and for all of the remedial work required in relation to the concrete soffits.
The respondent is of the view that for reasons advanced by their expert the remedial works to be carried out by it in respect of complaint item 1 - various steel items, should be completed in the summer months. This is disputed by the applicant who seeks to have the works completed as soon as possible.
At the hearing of Pindan No 2 neither of the parties provided costings for the remedial work found by the Tribunal to be necessary. As the remedial work in respect of three items of complaint is or is potentially connected, (one such example being the necessity for erection of scaffolding on the buildings for work on the concrete soffits, timber soffits and acrylic texture) the Tribunal said it would hear further from the parties as to the orders it should make to give effect to its findings.
Upon the publication of its reasons for decision the Tribunal invited the parties to confer with a view to submitting consent orders in light of the Tribunal's findings. The parties were not able to agree on orders and following a series of directions hearings the matter was listed for hearing.

[546]

The applicant seeks to have the remedial paint work in respect of complaint item 1 (painting work) carried out forthwith.
The respondent says that it should not be required to complete the painting work until mid-December because it is advised by its contractors (those who will complete the painting) the weather conditions in autumn and winter are not favourable and the work should not be done until summer.
The Tribunal has fully considered all the evidence provided by both the applicant and respondent with respect to prevailing weather conditions and the timing for the painting work at the 'Islands'.
The respondent has provided no explanation for not commencing the painting work shortly after Pindan No 2 was handed down on 11 January 2018.
The handing down of the decision of this Tribunal on 11 January 2018 was in the middle of summer. There is we are told, agreement to the scope of works required and that the painting work is unrelated to any other remedial work. The painting work therefore should have been commenced in January 2018 and the respondent is rightly criticised by the applicant for not having done so.
However the painting work has not yet been commenced. The time sought by the respondent to complete the work now means a delay of between two to three months. Any additional work required to the areas the subject of the painting work because of the delay will be the responsibility of the respondent.
The Tribunal accepts there is evidence the painting work could be commenced in winter. However there is also evidence that the contractors engaged to carry out the painting work are of the view that preferable time for the completion of the painting work is during the summer months.
The applicant is not the party responsible for the integrity of the painting work nor is it the party that will actually carry out the work. It is the respondent's responsibility to ensure the painting work is proper and proficient.
The position is now such that there will be a delay of two to three months in completion of the painting work if the respondent is permitted to complete it during optimum weather conditions and at a time recommended by the responsible specialist.
The Tribunal is not persuaded that the respondent should be required to complete the painting work during the winter months.
The Tribunal is satisfied the painting work should be completed by 18 December 2018.

[548]

The applicant's submissions infer that the Tribunal being a creature of statute cannot revisit and reopen findings of fact without a specific power in the SAT Act to do so.
Power is given to the Tribunal under the SAT Act to set its own practice or procedure not prescribed by or under the SAT Act. There is no practice or procedure prescribed under the SAT Act that provides that once the Tribunal has delivered reasons for decision a party cannot reopen its case.
Section 32 of the SAT Act specifically states that the Tribunal is not bound by the practices and procedures applicable to courts of record, except to the extent that it adopts those practices or procedures.
Decisions and or orders about having a party formally close its case, the order in which the Tribunal will hear from the parties, whether parties need to file written submissions et cetera are all matters of practice and procedure.
In previous decisions the Tribunal has permitted a party to reopen its case and set out the circumstances in which it may be appropriate to do so[20]. This Tribunal considers it has the power to permit a party to reopen a case at any time up to the entry of final judgment. The question therefore is whether the Tribunal should exercise its discretion to allow the respondent to reopen its case and admit new or fresh evidence.
In exercising its discretion courts and tribunals should exercise caution in reopening hearings having regard to the public interest in maintaining the finality of litigation[21].
In determining any matter the Tribunal must at all times have regard to the objects of the Tribunal to achieve a resolution of complaints or disputes fairly and according to the substantial merits of the case together with the objects of promoting the just determination of matters and disposing efficiently of the business of the Tribunal and minimising the costs to the parties.
In the exercise of the discretion in deciding whether to reopen the hearing the decision-maker should have regard to whether the interests of justice would be advanced by its admission[22].
A much stricter test applies to the admission of further evidence where reasons for decision have been delivered.
The Tribunal starts from the position that special circumstances need to be shown for the Tribunal to reopen a hearing once the evidence is closed. In particular, regard should be given to:
- the nature of the fresh evidence sought to be introduced;
- the reason why it was not admitted during the hearing;
- whether that admission was deliberate or otherwise; and

[550]

In Pindan No 2 the Tribunal found that a building remedy order ought to be made in respect of the repairs already carried out by the respondent in relation to the areas of the external concrete soffits that contain plastic tipped bar chairs.
Whether the repairs were satisfactory was at all times an issue the respondent was aware of. Dr Armand Zurhaar, the respondent's expert expressed the view that the repairs were satisfactory and gave reasons for his opinion.
The new expert opinion sought to be relied upon by the respondent expresses the view, as did Dr Zurhaar and for similar reasons, that there is no evidence the repairs have failed, that the Tribunal did not have sufficient evidence before it to conclude that the repairs were not satisfactory and the Tribunal should therefore conclude they were satisfactory.
The fresh evidence recommends further testing be undertaken to assess if the repairs are satisfactory.
In addition to seeking to adduce fresh evidence in respect of the repairs the respondent also seeks to adduce evidence as to the necessity of carrying out any remedial work to the external concrete soffits where no rust spots have appeared.
The new expert evidence opines the Tribunal cannot know if the external concrete soffits that contain the plastic tipped bar chairs have undergone any carbonation or have been, in general terms, affected by the presence of the plastic tipped bar chairs instead of the required plastic bar chairs.
The new expert evidence also opines that the remedial work found necessary by the Tribunal cannot be justified when the problem is essentially in the expert's opinion a local problem.
Dr Zurhaar's expert reports filed in the Tribunal prior to the hearing of the substantial matter did not deal with all of the aspects covered in the new expert's evidence; however he did deal with them during the course of the hearing.
Indeed there was much discussion between the various experts at the hearing and Dr Zurhaar specifically dealt with the issue of the lack of testing and consequential, uncertainty he says, as to the current state of the concrete in the external soffits. The thrust of the new expert evidence is that without testing the extent of the carbonation and chlorides, and the actual extent of the rusting of the legs of the plastic tipped bar chairs cannot be known.
Dr Zurhaar stated that there was no measurement of carbonation, no measurement of the depth of the penetration of chloride and no data available to say what the condition of the concrete is (ts 162, 3 August 2017).
The Tribunal did not accept this argument as put by Dr Zurhaar. There is nothing significantly different in the new expert's evidence. It is a further opinion that confirms what was said by Dr Zurhaar but does not provide any new factual or scientific evidence.
The Tribunal recognised in its decision that at the time of the hearing the extent of the rusting of the plastic tipped bar chairs was unknown but determined, for various reasons that a building remedy order ought to be made covering those areas not currently showing signs of rust/corrosion.
The fresh evidence on the remedy proposed by Mr Airey and Dr Airey in respect of the external concrete soffits that have not previously undergone repairs, is in essence that no repair work is necessary.
The fresh evidence does not dispute that the remedial work recommended by Dr Airey would be effective, other than in regard to the use of Intercrete 4841. It opines that the remedial work is not necessary because it states the Tribunal cannot know what damage the presence of the plastic tipped bar chairs has had on the external concrete soffits.
It does not suggest that if remedial work was necessary that the proposed remedial work would not achieve what it purports to achieve or that there is a better methodology available.
The respondent filed closing submissions in Pindan No 2 to the effect that the Tribunal should not make a building remedy order in respect of the areas not showing signs of rust or corrosion and the Tribunal specifically dealt with this issue in its decision.
There appears to be nothing new in the fresh evidence now sought to be introduced. The nature of the fresh evidence purports to be of a persuasive nature rather than different to the evidence provided by Dr Zurhaar at the hearing.

[560]

The applicant seeks an order for both the legal costs and expert costs it incurred in prosecuting its claim. The applicant engaged the following experts to provide reports and attend the hearing:
- Mr Giles Harrison, Extrin Consultants;
- Dr Airey, Airey Taylor Consulting;
- Mr Airey, Airey Taylor Consulting;
- Mr Alan Walters, Master Painters & Decorators Australia;
- Mr Richard Machell, Prescient Consulting;
- Mr Paul Kiely, Australian Timber Flooring Association; and
- Mr Justin Wade, JCW Carpentry.
The applicant says this application was substantially successful.
The applicant, in its submissions sets out the details in respect of each item advanced at hearing in which it says it was successful.
The applicant submits that the justice of the case requires the making of a costs order against the respondent. It does not suggest any of the factors set out in (paragraph 81 (a) to (g) above apply.
The following factors the applicant says support the case requiring the justice of a costs order in its favour:
- The complaints involved were substantial and of importance to the owners;
- Legal representation was reasonable; both parties were legally represented;
- The hearing lasted five days and involved complex questions of fact and law;
- The case needed to be presented in a structured way;
- The complexity of the case exceeded the norm for complaints before the Tribunal;
- The major complaints in terms of complexity were complaint items 1, 2, 3, 4 and 5 of which liability was established in respect of complaint items 2, 3, 4 and 15;
- In respect of complaint item 4 which was the most complex item of complaint the applicant was entirely successful;
- The order made in respect of complaint items 2, 3 and 15 whilst a partial remedy this did not diminish the success of the applicant's on establishing liability;
- The fact that a number of items of complaint were not pursued at hearing or were dismissed can be accommodated by a proportional allowance of costs in favour of the applicant; and
- The denial of a costs order in favour of the applicant would dissuade strata owners from pursuing complaints under the enabling legislation, and this would undermine the purpose and objects of that legislation.

[561]

The respondent submits that it was wholly or partially successful on various items of complaint and the parties should each bear their own costs.
The respondent engaged the following experts to provide reports and attend the hearing:
- Dr Armand Zurhaar, Zedcon Scientific;
- Mr Ben Murphy, Contract Administrator;
- Mr Adrian Terace, Maintenance Manager;
- Mr Rick Martelli, Ecovera; and
- Mr Mark Thompson, Director Constructions.
The respondent submits that that under s 87(1) of the SAT Act, unless otherwise specified therein or in the BSCRA Act, the parties bear their own costs.
The respondent sets out various cases where the Tribunal has set out the principles to be applied by the Tribunal when exercising its discretion in respect of costs in its submissions at para 55.
The respondent submits that when applying those principles the Tribunal should not make an order for costs in favour of the applicant for the reasons set out below.
The initial complaint covered 31 items of complaint and seven items went forward to hearing, the balance either being withdrawn or otherwise settled by agreement between the parties.
There is nothing about the conduct or character of the proceedings, which would justify an order for costs against the respondent. Although protracted, the issues in dispute are genuinely complex and required careful analysis.
The respondent further submits that at all times it acted appropriately, including participating constructively in mediations and in the final hearing itself, in order to efficiently resolve the disputes between the parties including making offers of settlement. It says its defence of the remaining complaints was not unreasonable or inappropriate in all the circumstances.
The respondent was wholly or partially successful on various complaints involving expert and lay evidence which took considerable time in the final hearing. Insofaras the parties' respective experts significantly overlapped on the various complaint items, it would be impractical to allocate the cost between complaint items.
The respondent refers to a number of settlement offers that it made to the applicant. The settlement offers which were in some instances, to compensate the applicant rather than completing remedial work, were generally for a global amount to cover all outstanding matters of complaint. It was not clear at the time of the costs hearing whether the substantive orders made in favour of the applicant meant the costs of remedial work were of a greater sum than the offers of settlement.

[573]

In assessing costs, the Tribunal takes a 'robust and broad-brush approach', and bases its determination on what reasonable allowance should be made for the work necessarily done to bring the proceedings to a conclusion[34].
The Tribunal accepts that the costs awarded are compensatory and not punitive in nature.
In assessing what is an appropriate quantum of legal costs, the Tribunal has had regard to the submissions by the applicant and the respondent and the Tribunal's knowledge of the proceedings. The Tribunal is also aware that what is sought by way of costs by the applicant is unlikely to be the full costs charged to the client, and has had regard to them on the basis of a party/party costs claim.
In coming to its decision the Tribunal has taken into account that there was a genuine dispute between the parties in respect of many of the items.
The applicant has claimed costs from the commencement of the matter or at least from the first directions hearing. However at that time there were a great number of complaint items that were subsequently withdrawn or resolved following mediation. The Tribunal does not consider costs should be allowed for those items which did not proceed to hearing.
By the time of the hearing of the preliminary matter most of the remaining items of complaint went forward to hearing.
The Tribunal is satisfied that on balance the respondent was more successful in respect of complaint item 1 than the applicant. Complaint item 1 took approximately the first two days of the five days of hearing and the applicant is not entitled to any costs in respect of same.
There should be no order to costs with regard to complaint item 7 water leaks as both parties were to some degree successful and it was a relatively minor matter.
There should be no order to costs with regard to complaint item 15 pool decking as both parties were to some degree successful.
In respect of complaint item 2 the applicant was successful however there was a genuine dispute between the parties regarding the making of a building remedy order which is reflected in the Tribunal's finding that the respondent is only liable for the costs of 30% of the remedial work.
In respect of complaint item 3 again whilst the applicant was successful there was a genuine dispute between the parties regarding the making of a building remedy order which is reflected in the Tribunal's finding that the respondent is only liable for the costs of 50% of the remedial work.
Whilst the applicant was entirely successful in respect of complaint item 4 and the Tribunal found the respondent was entirely responsible for the remedial work this was a complex matter upon which the parties and their experts genuinely disagreed.
As the Tribunal has said previously the Tribunal is required to exercise its discretion in relation to costs with regard to the objectives of the Tribunal and in the interests of justice.
In regards to complaint items 2, 3 and 4 where the applicant was successful, in the circumstances of this case, the Tribunal is not satisfied that the objectives of the Tribunal would be advanced and the justice of the case supports an order of costs for the legal costs of the preparation of hearing and the hearing.
The Tribunal is satisfied that the objectives of the Tribunal would be advanced and the justice of the case supports an order for the costs of the experts the Tribunal relied upon in coming to its decision.
The applicant was successful on this preliminary issue and the Tribunal finds it is appropriate the respondent makes a contribution of the applicant's costs of the preparation and hearing of the preliminary issue in the sum of $12,400.
The applicant was required to go to hearing to have the respondent provide it with a copy of the contract and specifications. The Tribunal finds in the circumstances that the applicant should be awarded most if not all its costs in respect of this issue in the sum of $4,500.
The Tribunal was assisted by the applicant preparing one hearing book and it aided the smooth and efficient conduct of the hearing. The Tribunal finds that it should have these costs including its disbursements rounded to $4,650.
The applicant was also put to the expense of a further hearing as to what was an appropriate time frame for the painting work to be carried out and whether a building remedy order should be made with respect to item 4 concrete soffits.
The respondent was technically successful in respect of the timing of the painting issue in as much as the Tribunal has allowed until December 2018 to enable the work to be completed during the summer months. However it would not have been necessary for the Tribunal to determine this matter if the remedial work had been carried out at the beginning of January 2018, that is soon after the decision ordering the remedial work to be done was handed down.
The respondent was unsuccessful in respect of its application to reopen its case and submit fresh evidence.
The Tribunal finds the applicant should be awarded the costs for the preparation and hearing on the time of the painting and the respondent's application to re-open its case fixed in the sum of $3,459.50.
The Tribunal finds an appropriate and fair amount of legal costs to be paid by the respondent to the applicant is $25,009.50 rounded to $25,010.
In regards to the expert fees the Tribunal will allow all of Taylor Airey's, Paul Kiel's, Alan Walter's fees and Mr Machell's fees after 12 January 2018 being a total of $24,016.72 rounded to $24,016.

OWNERS OF ISLAND APARTMENTS STRATA PLAN 52597 and PINDAN PTY LTD [No 2] [2018] WASAT 2 (4 October 2018)

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Judgment (617 paragraphs)

Legislation Cited (4)

Cases Cited (2)

OWNERS OF ISLAND APARTMENTS STRATA PLAN 52597 and PINDAN PTY LTD [No 2] [2018] WASAT 2 (4 October 2018)