Before turning to address the legal issues for determination in the case, the Tribunal made factual findings relating to:

a) the three roles of Mr Danny Psaros and the construction contract;

b) the development of the design of the basement and waterproofing;

d) the areas of the basement where water had ingressed and the extent of the problem;

e) the evidence as to what 'a competent builder' would have done with respect to the relief vents;

f) what had been done to-date to remedy aspects of the problem; and

g) what the experts proposed as possible solutions.

Regarding how and why water has ingressed the basement, the Tribunal found that, inter alia, it was more likely than not that a cause of water ingress into the northern part of the basement carpark was rainfall running into the soakwells along the northern wall of the building, which then led to groundwater in the immediate vicinity of the soakwells rising up past the height of the basement floor. The Tribunal also found that while it had not been established that regional groundwater, as distinct from groundwater in the immediately vicinity, had risen up past the height of the basement slab to­date, there has been, and continued to be, a risk that regional groundwater will rise up past the height of the basement slab and ingress the whole of the basement carpark, even if all stormwater was routed off site.

The first legal issue addressed by the Tribunal was whether the Tribunal has jurisdiction to determine this application and power to grant the remedies sought. The Tribunal considered principles of statutory interpretation, including the purpose of the Building Services (Complaint Resolution and Administration) Act 2011, and found that it has the power to grant more than one building remedy order in respect of a regulated building service that has not been carried out in a proper and proficient manner or is faulty or unsatisfactory. The Tribunal also considered that the ordinary and natural meaning of the term 'compensation' in s 36(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011 is wide enough to cover circumstances such as where the applicant seeks to be compensated for money already paid to third parties to rectify poor workmanship, and found that the Tribunal has the power to grant an award of money under s 36(1)(c) of the Act in respect of interim remedial works already undertaken at the direction of the applicant.

The second legal issue addressed by the Tribunal was whether the regulated building service complained of ­ namely, the construction of the basement and, in particular, the waterproofing of the basement ­ had been carried out in a proper and proficient manner or is faulty or unsatisfactory.

The Tribunal did not accept the respondent's position that it was not responsible for the water ingress into the basement because it was not responsible for the design of the building and that it merely constructed Tyne Square in accordance with the construction contract.

The Tribunal found that the puncturing by the respondent of a vapour barrier installed under the basement slab in constructing the relief vents amounted to a failure by the respondent to carry out the building service in a proper and proficient manner and that the vapour barrier was thereby rendered faulty and unsatisfactory within the meaning of s 38(1) of the Building Services (Complaint Resolution and Administration) Act 2011. In reaching this conclusion, the Tribunal relied principally on the nature of the alleged defect, the expert evidence including as to what would have been immediately apparent to a competent builder, the fact that the respondent was responsible under the construction contract for the implementation and performance of the waterproofing of the basement and the respondent's failure to comply with the Building Code of Australia. The Tribunal considered that relying on consultants whose objective was to achieve other aspects of design, and who were not responsible for waterproofing, in order to ensure that the waterproofing in all respects was satisfactory, amounted to an error of judgment by Mr Psaros as the controlling mind of the respondent.

The Tribunal also found that, at least by 2 May 2007, the respondent was required under the construction contract to proceed to warn the principal of the non­compliance or risk of non­compliance with FP1.5 of the Building Code of Australia and that it did not do so. In the circumstances of this case, the contractual requirement to warn formed part of the building service under s 38(1) of the Building Services (Complaint Resolution and Administration) Act 2011, as it was necessary preparatory work involved in the builder's work, and this failure also amounted to a failure to carry out the building service in a proper and proficient way within the meaning of s 38(1) of the Act.

Further, the Tribunal did not accept Mr Psaros' argument that all the construction contract required for waterproofing under the basement was the installation of a vapour barrier. The Tribunal considered that, upon a proper construction of the construction contract, the 'underlay' in the Specifications should not have been selected, as it does not appear in the Plans and the 'waterproofing' in the Plans required the respondent to have selected one of the possible types of waterproofing set out under 'Water Proof Membrane Systems'. The Tribunal therefore also found that installation of the vapour barrier instead of one of the possible types of waterproofing set out under 'Water Proof Membrane Systems' in the Specifications amounted to a failure to carry out the building services in a proper or proficient manner within the meaning of s 38(1) of the Building Services (Complaint Resolution and Administration) Act 2011 in that no conventional form of waterproofing has been installed at all.

Further, based on the expert evidence, the Tribunal found that, whether or not the vapour barrier itself had yet failed, it was an inadequate and unacceptable device to exclude water, given the risk that regional groundwater could rise up to RL 10.5 AHD at a certain point or points in time. As such, the vapour barrier was also faulty and unsatisfactory within the meaning of s 38(1) of the Building Services (Complaint Resolution and Administration) Act 2011. The fact that groundwater had only risen in the immediate vicinity of the northern part of Tyne Square, and highlighted this inadequacy which might otherwise may never have been highlighted, does not itself prevent a conclusion of poor workmanship.

Further, the Tribunal found that the failure to insert an external waterstop at the joint between the AFS wall and the basement floor in the circumstances of Tyne Square amounted to a failure by the respondent to carry out a building service in a proper and proficient manner within the meaning of s 38(1) of the Building Services (Complaint Resolution and Administration) Act 2011, in that a vapour barrier was selected as the device to exclude water, thereby rendering additional sealing of this joint necessary, and an external waterstop was not provided by the respondent. The construction contract expressly stated that the respondent was responsible for the performance of the waterproofing, including for omissions.

Further, the Tribunal found that the failure to seal the cable entry points into the transformer room and switchboard room and to install a waterstop at the joint between the wall and basement floor at that location amounted to failure to carry out a regulated building service in a proper or proficient manner and that the cable entry points and joints were faulty and unsatisfactory within the meaning of s 38(1) of the Building Services (Complaint Resolution and Administration) Act 2011. Regarding the failure to seal the cable entry points, it is an obvious and extreme example of poor workmanship by a builder to build a waterproof service room and then build large holes into that room through which cables are fed, without also resolving the sealing of those large holes. Regarding the joint between the wall and basement floor at the location of the transformer room and switchboard room, the Tribunal accepted expert opinion that in the circumstances of Tyne Square the failure constituted poor workmanship by the respondent.

The applicant did not establish that the grade of the basement around the relief vents was faulty or unsatisfactory, nor that the construction contract had not been complied with in the installation of waterproofing up the walls.

The third legal issue addressed by the Tribunal was, if any aspect or aspects of the regulated building service has not been carried out in a proper and proficient manner or is faulty or unsatisfactory, what is the appropriate remedy. The Tribunal found that the sum of $76,477, including GST, compensated the applicant within the meaning of s 36(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011, to the extent of the costs claimed, for the respondent's failure to completely waterproof the transformer room and switchboard room, including by reason of the risk that, if water were to rise up to RL 10.5 AHD, water will ingress into the trenches in the transformer room and switchboard room from water flowing over the basement floor.

The Tribunal also found that it was reasonable and appropriate to require the respondent to remedy the basement carpark by, inter alia, the installation of a secondary concrete floor slab, including because the costs involved in respect of the three options are similar when viewed over the longer term, and this option is the only option that enables the punctures created by the relief vents to be fixed so that the mechanism to exclude water is effective.

When making an order under s 36(1)(a) of the Building Services (Complaint Resolution and Administration) Act 2011, the Tribunal does not ordinarily specify a method of rectification. However, in the circumstances of Tyne Square, the Tribunal considered it appropriate to do so.

Atkinson and Rio Vista Pty Ltd trading as Freedom Pools and Spas [2012] WASAT 116

Brodun Construction and Love [2008] WASAT 174

Cable Limited and Hutcherson Bros Pty Limited (1969) 123 CLR 143; [1969] HCA 37

Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337

Henry Michael Lyons & Ors v Jandon Constructions (A Firm) & Ors [1998] WASC

Owners of Strata Plan no 47111 v Pyramid Constructions Pty Ltd [2012] WASAT 79

Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] 1 AC 514

Re Griffiths; Ex Parte Homestyle Pty Ltd [2005] WASCA 103

Re McGuire; ex parte Bradshaw (Unreported, Supreme Court, 30 April 1986, Lib No 6260A-C

Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45

1 This dispute concerns water ingress into part of the basement carpark of a mixed use development comprising 83 residential apartments and four commercial units at No 154 Newcastle Street, Perth (Tyne Square).

2 The basement comprises car parking space, store rooms for use of the residents, service rooms for infrastructure for the building (including a transformer room and a switchboard room) and a lift.

3 The finished floor level of the basement ranges from between 5.25 metres below street level, at the junction of Lindsay and Newcastle Streets, to 2.51 metres below street level at the junction of Lindsay Street and the residential boundary.

4 Tyne Square was built by Psaros Builders Pty Ltd (respondent) which is a registered builder. The Owners of Strata Plan 52843 (applicant) are the owners of Tyne Square and seek building remedy orders pursuant to s 36(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act). Unless otherwise stated, all references to legislation in this decision are to the BS(CRA) Act.

5 The Tribunal is required to act in accordance with equity, good conscience and the substantial merits of the case, without regard to technicalities and legal forms. The Tribunal is bound by the rules of natural justice except to the extent that the State Administrative Tribunal Act 2004 (WA) (SAT Act) or the enabling Act authorises, whether expressly or by implication, a departure from those rules. The Tribunal may inform itself on any matter as it sees fit. The Tribunal is not bound by the rules of evidence or any practices or procedures applicable to courts of record, except to the extent that they are adopted (s 9, s 32(1), s 32(2) and s 32(4) of the SAT Act).

6 The hearing was held over six days on 8, 9, 11 and 12 October and 6 and 7 December 2012. There was no statement of issues, facts and contentions.

7 In the applicant's opening address, it alleged that the basement leaks; that is, the basement allows water to ingress into it. The applicant alleged that the respondent did not construct the basement carpark of Tyne Square in a proper and proficient manner and that the building work carried out is faulty and unsatisfactory contrary to s 38(1) in that:

1. the respondent did not exercise an appropriate degree of independent judgment, as informed by external standards such as the Building Code, in adopting the design of the building work or particular method of construction;
2. the respondent played an active role in the design process and the manner in which the design came to be adopted, which led directly to the water ingress now occurring; and
3. the respondent did not complete the work in accordance with its obligations under the construction contract or in accordance with sound building practice.

8 On this basis, the applicant contended it was entitled to an order under s 36(1) requiring the respondent to rectify the basement in accordance with the applicant's experts' recommendations.

9 The applicant also sought recovery of the costs of interim remedial work that had already been undertaken by the applicant.

10 The respondent denied that the applicant was entitled to any relief on the basis that it is not responsible for the design of the building work and that it constructed Tyne Square in accordance with the construction contract.

11 The respondent stated that it accepted that, simply because responsibility for design might lie with a consultant rather than with the contracting builder, does not, in each and every case, lead to the result that the builder can blindly hide behind the lack of contractual relationship or responsibility allocated to others. However, in the present case, the respondent contended the design decision that gave rise to the decision to install what are referred to, in this decision, as the relief vents into the concrete slab and thereby permit water to ingress into the basement, was a decision for which the hydraulics consultant and the structural engineer, neither of whom had been retained by the respondent, were responsible.

12 The respondent also submitted in closing submissions that to find, in the circumstances of this case, that the respondent is liable would have the effect of turning the builder into a guarantor of decisions made by others who, in each case, have expertise not held by the builder, and that such a finding, as a precedent, would be both dangerous and alarming.

A. The three roles of Mr Danny Psaros and the construction contract

13 There is no contractual relationship between the applicant and the respondent.

14 By joint venture agreement dated 5 August 2005 (JVA), Psaros Property Group Pty Ltd (PPG) and Pakwest Pty Ltd (Pakwest), a company controlled by Mr Luke Saraceni, constituted themselves as an unincorporated joint venture (JV) to undertake the construction of what is now known as Tyne Square.

15 Under the JVA, it was agreed that PPG had a one­third interest and Pakwest had a two­third interest in the JV, with the parties to share the profits and losses (if any) and contribute equity in the same proportions.

16 It was agreed that if the Tyne Square project proceeded to construction, PPG would be engaged by the JV to act as Project Manager for a fee of $300,000, plus GST, from the date the parties agree to proceed or from the date of approval of finance, whichever was later. It was also agreed that PPG would provide submissions, as the proposed builder, of a price to carry out the construction on a 'cost plus 10% basis' and that PPG would be engaged to carry out the construction, subject to Pakwest being satisfied as to the price proposed by PPG, and if not so satisfied, another builder would be engaged.

17 An agreement supplemental to the JVA and dated 1 February 2007 was also entered into by PPG and Pakwest. Recital B of that supplemental agreement provides that the builder to be engaged by the JV will be a related entity of PPG nominated by PPG.

18 PPG was paid $15,000, plus GST, per month for project management services from April 2006 until November 2007.

19 There is no documentary evidence specifying the tasks of PPG in acting as Project Manager.

20 Consultants were engaged by Mr Psaros on behalf of the JV through PPG or Psaros Constructions Pty Ltd (not Psaros Builders Pty Ltd) including:

1. Overman & Zuideveld Pty Ltd (Architects) to develop the design of the construction and to integrate the work of specialist consultants with the architectural drawings;
2. Golder Associates Pty Ltd (Golder) through Mr Fred Davenport to undertake geotechnical investigation and soil assessment on site;

1. Pipeline Hydraulics Pty Ltd (Pipeline Hydraulics) to provide hydraulic consulting services including the design of all rainwater disposal services and sanitary drains, wastes and vents; and

1. Saraceni Engineering Group Pty Ltd (SEG) to provide structural engineering services including in design development, documentation and construction.

21 Mr Psaros is a director and the chief executive officer (CEO) of, inter alia, both the respondent and PPG. In the context of the construction of Tyne Square, therefore, Mr Psaros had three roles. He was a one­third owner/developer through PPG, a 'Project Manager' on behalf of the JV, also through PPG, and the builder through the respondent.

22 It appears that Mr Psaros shared the role of builder with his business partner, Mr Robert De Francesh (T:317, 325 and 326; 12.10.12). However, it was Mr Psaros who was the registered individual builder behind the respondent (T:112; 11.10.12).

23 Mr Psaros obtained a Certificate in Architectural Drafting in 1977 and a Diploma in Architectural Drafting in 1979 from Leederville Technical College. He qualified as a registered builder in 1986.

24 The applicant submitted, in relation to Mr Psaros as a witness, inter alia, that the evidence of Mr Psaros did not have a ring of truth to it and that he took a wilfully evasive and obfuscating approach to the giving of his evidence. The applicant also submitted that the evidence of Mr Psaros should be treated with extreme caution due to the manner in which Mr Psaros gave his evidence and numerous omissions and inconsistencies demonstrated by his evidence, some of which the applicant outlined.

25 Mr Psaros appeared to be very stressed to be in the witness box for what the Tribunal accepts was the first time he had given evidence (T:119; 11.10.12). He genuinely did not appear to completely understand the place cross­examination has in the process of determination; rather, he repeatedly tried to tell his side of the story. He seemed focused on communicating to the Tribunal that it was the consultants whose advice dictated the design of Tyne Square and he had his own views about why there has been water ingress into the basement. This often coloured his answers to questions put to him. There were also times when Mr Psaros contradicted himself or did not give clear answers. The Tribunal does conclude, for all of these reasons, that Mr Psaros' evidence must be treated with considerable caution. The Tribunal does not, however, accept the applicant's submission that Mr Psaros was wilfully obfuscating in his evidence.

26 The Tribunal finds that the respondent constructed Tyne Square pursuant to a contract dated 8 March 2007 between the respondent, defined therein as contractor, and PPG and Pakwest, defined therein as principal (Contract).

27 The Tribunal does not accept Mr Psaros' evidence which suggests that this document, now defined as the Contract, was merely 'to do with bank financing arrangements' (T:297 and 298; 12.10.12), although, as evidenced by Exhibit R, a similar contract would appear to have been sent to the joint venturers' bank.

28 The document tabled by Mr Psaros at a meeting with Mr Luke Saraceni of Pakwest on 5 October 2009 described the Contract as 'not appropriate'. However, having been duly executed, the Contract is legally binding on the parties to it.

29 The Contract includes AS 2124 general terms and conditions, the various approved versions of plans at Exhibit A, pages 339 - 378 (an A1 version of these plans is at Exhibit W) (Plans) and the specifications dated April 2007 at Exhibit A, pages 152 - 306 (Specifications). Sixteen pages, being 135 - 199, are missing from Exhibit B, but these can be found at Exhibit A, pages 75 ­ 140.

30 The Formal Instrument of Agreement evidencing execution is at Exhibit B16, page 199.

31 The Contract commenced on 12 March 2007 (clause 35.1 of the Contract at Exhibit B16, pages 104 and 105, and Exhibit U), and practical completion was on 17 July 2009.

32 The Specifications, which are dated April 2007, refer, at page 6, to AS 2124 being part of the Contract documents, but it was not until some two years later that AS 2124 general terms and conditions, as amended, was formally executed and backdated to 8 March 2007.

33 Under the Contract, the respondent was required to complete the work for the contract sum. 'Contract sum' is defined to be a lump sum and/or rates, whichever is accepted by the principal, but may also include provisional sums. In this instance, unusually for this type of contract, the contract sum constituted (by reason of the amendment at Exhibit B16, page 196) the 'provisional sum' at Exhibit B16, page 198, as finally determined pursuant to the Contract.

34 Pursuant to clause 11 of the Contract, a provisional sum shall not, itself, be payable, but where, at the direction of the superintendent, the work to which the provisional sum relates is performed or supplied by the contractor, the work is to be valued under clause 40.5 of the Contract dealing with valuation of variations. If the work is performed or supplied by a subcontractor, clauses 11(b) and 11(c) apply, and the Contract provides, in the annexure, for the contractor to be paid 10% for profit and attendance.

35 Further, variations directed by the superintendent under clause 40.1 of the Contract, dealing with variations to work, could be carried out and valued as daywork under clause 41.

36 Pursuant to clause 8, the several documents forming the Contract are to be taken as mutually explanatory of one another. If either party discovers any ambiguity or discrepancy in any document prepared for the purpose of executing the work under the Contract, that party shall notify the superintendent in writing of the ambiguity or discrepancy. The superintendent shall then direct the contractor as to the interpretation to be followed by the contractor in carrying out the work.

37 Pursuant to clause 14 of the Contract, the contractor was required to comply with the requirements, inter alia, of:

• acts and ordinances of the State or Territory in which the work under the Contract is carried out;
• ordinances, regulations, by-laws, orders and proclamations under the acts; and
• ordinances and persons acting in exercise of statutory powers enabling them to give directions affecting the work under the Contract.

If a requirement is at variance with a provision of the Contract, as soon as the contractor discovers the variance, the contractor shall notify the superintendent in writing specifying the difference. If so, the superintendent shall direct a variation.

38 The law governing the Contract and its interpretation is the law of Western Australia.

39 The superintendent under the Contract was Mr Frank Saraceni. Mr Frank Saraceni was a director of the consulting engineers, SEG. He is also the brother of Mr Luke Saraceni.

40 The Plans and Specifications also specify various Australian Standards (AS) in accordance with which the corresponding part of the work is to be built.

41 The AS 2124 form of contract can loosely be described as a 'construct only' form of contract, as distinct from a contract under which a builder contracts to 'design and construct' a building.

42 Part of the respondent's defence of the applicant's claim was that the contractual relationship between the respondent and the principal under the Contract was a 'construct only' and not 'design and construct' and that, while a builder cannot blindly hide behind a lack of contractual relationship with an applicant, in these circumstances, the respondent could not be held responsible for any design defects. The respondent submitted that the design underpinning that about which the applicant complains was a design for which Pipeline Hydraulics was contractually responsible and for which, in all senses, it and probably the structural engineer were responsible (T:54 and 55; 08.10.12).

43 The Tribunal does not accept these submissions in that they do not address squarely the builder's responsibility under the BS(CRA) Act in constructing Tyne Square.

44 A 'construct only' type of contract does not have any specific meaning in law and nor does the term 'design'. The precise parameters of legal responsibility, including relating to aspects of design, are determined by the specific words of a contract, which must be interpreted within the context of the contract as a whole. Even in contracts that can be described as 'construct only', aspects of construction may be left to the builder which may involve aspects that can be characterised as 'design'. Clause 16.3(f) of the Contract expressly recognises that an aspect of design may be provided by the contractor. Clause 10.4 of the Contract requires that, if the contractor is to be responsible for an aspect of design, the responsibility shall be expressly stated in the Contract.

45 In the present case, 'work under the Contract' is defined in clause 2 of the Contract to mean the work which the contractor is or may be required to execute under the Contract, including variations, remedial work, construction plant and temporary work. In this Contract, the work to be performed by the respondent is set out in the Plans and Specifications.

46 Relevantly, the Specifications, at page 57 in the 'Concrete' section, under 'Part II Materials', provide as follows (Exhibit A, page 208):

UNDERLAYS, MEMBRANES

SLABS ON GROUND

REQUIREMENT: Provide a layer of waterproof film underlay as specified herein.

FILM UNDERLAY

MATERIAL: High-impact resistant polyethylene film, to AS 1326.

Thickness:....200microns

INSTALLATION: Lay over the base. Lap joints not less than 200mm. Face the laps away from the direction of concrete pour. Seal laps with approved pressure-sensitive adhesive tape. Similarly seal around penetrations such as service pipes and the like. Take the underlay up vertical faces and as detailed on the drawings.

WATER PROOF MEMBRANE SYSTEMS -

SHEET MEMBRANES:

Bituminous multilayer systems: To the relevant requirements of AS CA55.

Single layer systems: Sheets fixed and lapped with appropriate adhesive or heat welded by gas torch ('torch on').

SEAMLESS MEMBRANES: Membranes applied in liquid or gel form and air cured to form a seamless film.

SUBSTRATES FOR MEMBRANES: Apply the membrane to dry, smooth, firm, continuous surfaces, clean and free from loose or foreign matter. Provide coving or fillets on internal corners. Round or arris external corners and edges.

Dryness test for substrate: To AS 1884 Appendix A.

MEMBRANE PROTECTION: Protect the membrane after installation with a permanent protective boarding. Use a low melt bitumen or suitable solvent free adhesive to adhere the protection boards to the membrane with maximum 6 mm gap at joints in the boards.

APPROVAL OF MEMBRANE SYSTEM:

Submit proposal together with complete technical information for the water proof membrane system to the Engineer for approval before use. The approval of the systems shall not relieve the Contractor from full responsibility for the performance and installation of the system and from mistakes or omissions or for any discrepancy or deviation from the Specification and other drawings.

BITUMOUS COATING -

MATERIAL: Rubber-fortified water-based bitumen emulsion.

APPLICATION: To clean dry surfaces, by brush or spray, in three coats, to the following coverages:

First coat: 1.7 L/m2

Second coat: 2.0 L/m2

Third coat: 2.0 L/m2[.]

47 Similarly, in the 'Tanking' section under 'Part I, General' at page 96 of the Specifications, which includes the locations and types of certain waterproof membranes to be installed, it is provided, inter alia, that:

[the]Builder [is] to confirm method of waterproofing basement prior to proceeding with construction.

...

Provide to the Proprietor a warranty, for a period of ten years from the date of Practical Completion, covering the whole of the tanking including penetrations for pipes, flues, upstands, flashings and the like. (Exhibit A, page 247).

48 Also, for example, in SEG's issued 'Concrete Details' plans S201 revision 7, there is a note at Section A and at Section B:

De-Watering and tanking proposal to be submitted to Engineer prior to works commencing. (Exhibit A, page 340)

49 In interpreting contracts, it is the objective intention of the parties as expressed in the document that is to be determined; See Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 (Codelfa); Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45.

50 The effect of the provisions extracted above, within the Contract as a whole, includes the following:

1. to the extent that a type and method of waterproofing is detailed in the Contract, the respondent was contractually obliged to the principal to comply with those details;
2. the respondent was required to submit the proposal of a waterproof membrane system to the engineer before installation; and
3. approval of the waterproof membrane system did not relieve the respondent from full responsibility for the installation and performance of the system, even if approved by the principal's consultants.

51 Contrary to Mr Psaros' assertion, the supplemental agreement to the JVA dated 1 February 2007 does not 'override ... everything else' (T:298; 12.10.12). The Tribunal does not accept Mr Psaros' assertion that the Contract is a 'cost­plus' contract (T:127; 11.10.12). It is a lump sum contract in which the 'provisional sum' provisions have been used. Whether or not the Contract might be described as having 'cost­plus' elements within it, the work to be performed and the final Contract Sum is determined according to the precise terms set out in it. This clearly included the respondent waterproofing the basement in accordance with the terms of the Contract.

B. Chronology of events ­ development of the design of the basement and waterproofing

52 In May 2006, Mr Psaros, at PPG, was provided with a geotechnical report prepared by Mr Davenport, then of Golder (Golder May 2006 Report), which advised, inter alia, of the following matters:

• The Perth Groundwater Atlas (1997) published by the Water and Rivers Commission shows the maximum groundwater level recorded at the location to be at approximately elevation RL 10.5 AHD.
• The maximum groundwater levels were recorded prior to construction of the Graham Farmer Freeway tunnel. The presence of the tunnel and its associated drainage system may have a local influence on the groundwater level. Given that the groundwater flow is north to south across the site, mounding of the groundwater on the north side of the tunnel is a distinct possibility.
• Fieldwork carried out on 11 and 25 April 2006 demonstrated, inter alia, that the approximate groundwater elevation at that particular time was between RL 9.2 AHD and RL 9.5 AHD.
• The finished floor level of the basement carpark is proposed to be at elevations ranging from RL 9.4 AHD to RL 9.9 AHD.
• These elevations are about 4 metres below ground level.
• Based on historical groundwater information and groundwater elevations measured in the field, the maximum elevation of groundwater is likely to be at approximately RL 10.5 AHD.
• The proposed basement carpark would be about 1 metre below the maximum level of the groundwater and subject to uplift pressure of about 10kpa.
• Therefore, it is necessary to account for the uplift in design and construction. Failure to account for uplift pressure could lead to cracking of the basement slab and seepage into the basement.
• Methods that could be used include:

1. designing the base slab to resist uplift and partly tank the basement; and

2. drawing the groundwater level down to base slab level by installing an under drainage system to collect and channel groundwater to a sump for pumping into the street drainage system, or

However, designing the base slab to resist uplift and tanking the basement is the only method which will not require ongoing operation and maintenance costs.

53 This 'sub drainage system' (or 'sub floor drainage system') is to be distinguished from the 'sub drainage relief system'.

54 The 'sub drainage relief system' is also called 'relief points' or 'relief vents'. The Tribunal will refer to the sub drainage relief system as 'the relief vents'.

55 Mr Psaros said in cross­examination that he was aware after having read the Golder May 2006 Report that, historically, groundwater had been as high as RL 10.5 AHD, and of the need to account for uplift pressure.

56 The Tribunal finds that, as from about May 2006, Mr Psaros knew that historical water levels had reached RL 10.5 AHD and of the need to account for groundwater uplift pressure.

57 To the extent that some of Mr Psaros' evidence was also contradictory (T:290­292; 12.10.12), the Tribunal does not accept that evidence, and prefers the aspects of Mr Psaros' evidence that accord with the documentary evidence.

58 On or around 20 July 2006, SEG issued plan S101 revision A and plan S102 revision A showing that the basement slab on the ground was to be 100 millimetres thick.

59 SEG plan S201 revision 1 and plan S202 revision 1 regarding 'concrete details' (Exhibit V, pages 120 and 121) issued on or around 12 October 2006 show that the slab on ground, including across control joints within the slab, and external face of the retaining walls, are to be waterproofed. The Tribunal concludes, as they have not been produced in compliance with the Tribunal's orders of 22 November 2012, that there were no Specifications at this time.

60 Also on or around 12 October 2006, the Architects produced plan A101 revision 1 and plan A102 revision B showing the finished floor level for the lowest part of the basement carpark at the northern end of the basement as RL 9.8 AHD, with a small section at RL 9.75 AHD. These plans do not also detail that the trenches of the transformer room and switchboard room and the lift pit are below finished floor level, but the photographic evidence does establish this. The diagram at Exhibit B3, page 50 also usefully depicts relative levels in relation to the services in the basement.

61 These plans also show that the Tyne Square complex is bounded on three sides by Lindsay Street, Newcastle Street and Beaufort Street, and on the fourth side by a number of domestic residences.

62 The ground levels along each of the boundaries vary as follows:

Lindsay Street boundary RL 12.26 to RL 15.00;

Newcastle Street boundary RL 14.25 to RL 15.00;

Beaufort Street boundary RL 13.22 to RL 14.25; and

Residential boundary RL 12.26 to RL 13.22.

63 Therefore the lowest level of the basement is 5.25 metres below the highest boundary level, being at the junction of Lindsay Street and Newcastle Street, and 2.51 metres below the lowest boundary level, being at the junction of Lindsay Street and the residential boundary.

64 The lowest level of the finished floor level in the northern part of the basement is RL 9.75 AHD.

65 The Tribunal finds that the lowest level of the finished floor level of the basement carpark is approximately 0.75 metres below the maximum groundwater level recorded at the location. The Tribunal also finds that the finished floor level of the basement is approximately 0.75 metres below what the maximum elevation of groundwater could possibly be.

66 Mr Psaros said in cross-examination that he understood, after having read the Golder May 2006 Report, that the basement could be approximately one metre below the maximum groundwater level of RL 10.5 AHD (T:291; 12.10.12).

67 The Tribunal finds that, as from about May 2006, Mr Psaros knew that the basement could be approximately 1 metre below the maximum groundwater level of RL 10.5 AHD.

68 To the extent that some of Mr Psaros' evidence was contradictory (T: 290-292; 12.10.12), the Tribunal does not accept that evidence and prefers the aspects of Mr Psaros' evidence that accord with the documentary evidence, including the Golder May 2006 Report.

69 Approximately one month earlier, on or around 15 September 2006, SEG had issued plan S101 revision B and plan S102 revision B showing the basement slab on the ground was to be 100 millimetres thick.

70 Then, on or around 28 September 2006, SEG issued plan S101 revision 0 and plan S102 revision 0 which showed for the first time a thicker 200 millimetre slab on ground in the lowest segment of the basement. The 200 millimetre slab on ground in the lowest segment of the basement remained in the plans issued by SEG on or around 12 October 2006 and the plans issued on or around 20 October 2006.

71 Mr Peter Grant Airey is a structural engineer retained by the applicant. Mr Airey is a director of Airey Taylor Consulting Engineers and Scientists. He obtained, relevantly, a Bachelor of Engineering in 1960 from the University of Western Australia. The Tribunal accepts Mr Airey as a competent, independent expert and credible witness and accepts his evidence.

72 Mr Airey expressed the view that a 200 millimetre basement slab, as depicted in plan S101 revision 0 and plan S102 revision 0 and revisions 1 and 2, is broadly in line with what he would expect to be an appropriate response to the predicted uplift conditions to which the basement slab would be subject in the event of the predicted high water levels occurring.

73 The Tribunal accepts Mr Airey's evidence in this regard.

74 In around September 2006, relief vents were not part of the design of the basement.

75 The Tribunal finds that, during September 2006, the design of the basement slab was increased in thickness from 100 millimetres to 200 millimetres to resist groundwater uplift pressure.

76 Further, the Tribunal finds that at 28 September 2006, the plans reflected that the basement was designed to be completely impervious to groundwater ingress.

77 To the extent that Mr Psaros' evidence suggested that at this stage the basement was not designed to be completely impervious to groundwater ingress (for example, T:299­301; 12.10.12), the Tribunal does not accept it, and prefers the documentary evidence referred to above.

78 Despite having received the Golder May 2006 Report, Mr Psaros decided to undertake his own investigations into groundwater levels. By email dated 19 September 2006, Mr Psaros had indicated to Mr Swift that:

Because of water stop to basement walls / concrete slab ­ No perimeter spoon drain is required. Water level is +/- 8.500 ­ basement floor is +/-9300 (Exhibit B16, page 244).

79 By email dated 22 September 2006, which is copied to others, Mr Psaros of PPG advised Mr Neil Crownie of the Architects, inter alia, that at the north­west boundary on Lindsay Street there was an 'AHD RL to water of 9.690' (Exhibit A, page 71) and to pass this information on to relevant consultants and discuss the implications.

80 By email dated 20 December 2006, which is copied to others, Mr Psaros of PPG provided revised measurements of groundwater levels to Mr Frank Saraceni for Mr Saraceni's 'info and action' (Exhibit A, pages 73 and 74). This showed groundwater levels varied in different parts of the site. The groundwater level near the north­west boundary on Lindsay Street was depicted as 'AHD 9.12' (Exhibit A pages 73 and 74).

81 On or around 1 December 2006, a spreadsheet titled 'Following list of action is required in order for cost saving to be made' was circulated, according to Mr Psaros at paragraph 54 of his witness statement, by him as representative of the Project Manager. This document included item 158 which asked SEG:

What level has been used for water level design? Dwg S101 - why is slab on ground 200 thick? Why are we using N20 bars above PF1 2.4 x 2.4 x .6 footing?

82 On or around 13 February 2007, SEG issued plans S101 revision 3 and S102 revision 3 showing the segment of the basement slab in the northern part of the carpark that had previously been depicted as 200 millimetres thick, reduced once again to 100 millimetres thick. There was no further change to this aspect in subsequent revisions.

83 In his report dated 13 July 2012, Mr Airey advised that he took six core samples from the basement slab and found that the core thickness varied from 100 millimetres to 140 millimetres deep (excluding topping).

84 The Tribunal finds that the basement slab was constructed to a 100 millimetre thickness.

85 The Tribunal also finds that the 13 February 2007 revision to the plan for the basement, whereby the slab in the lowest part of the basement (and the area most subject to uplift force) was reduced to 100 millimetres from 200 millimetres, was a cost cutting measure implemented by PPG in December 2006. This finding is based on the title of the 1 December 2006 document, the contents of the 1 December 2006 document, Mr Psaros' evidence taken as a whole and PPG's role in this project.

86 This finding is not inconsistent with Mr Psaros' evidence that the respondent was taking preparatory steps throughout 2006 (T:125, 126 and 305; 11.10.12). This finding is, however, inconsistent with, and the Tribunal does not accept, Mr Psaros' evidence in cross­examination that it was not a cost cutting measure (T:315; 12.10.12), nor his evidence that the intent behind item 158 of the cost cutting document was to raise his concerns, as builder, with the engineer, that the basement slab may need to be thickened and not reduced in thickness (T:306 and 307; 12.10.12), because it is inherently unlikely in the circumstances and the Tribunal prefers the documentary evidence to the contrary.

87 The process of revising the plans, following the cost cutting measures, was completed around 13 March 2007. These plans were intended to be used, not to obtain a forward works building licence as contended by the applicant, which was already expected in a little over a week at that point (Exhibit B7, page 84), but so that the application for the second building licence could be lodged (Exhibit B7, page 80). The final building licence was needed urgently in order to obtain funding (Exhibit B7, page 82 ­ T:320; 12.10.12). Boom time conditions in the building industry at that time was also causing rising building costs (T:127; 11.10.12).

88 The 4 April 2007 licence, which was granted for 'forward works' in respect of a building assessed as being a Class 2 building, was granted subject to compliance with, inter alia, 'the Building Code of Australia'. The conditions in the 4 April 2007 licence deal principally with ground anchors, the submission of plans to the Water Corporation of Western Australia, earthworks, dust control, requirements during excavation, in­ground plumbing and hydraulics.

89 The 28 August 2007 licence, which was granted for the remainder of the works in respect of a building subsequently assessed as being a Class 2, Class 6 and Class 7a building, provided, inter alia, that the builder shall ensure that all works necessary or reasonably incidental to, or resulting from, those works comply with the requirements of the Building Code of Australia 2006, as amended, unless the Council agrees in writing, with or without conditions, to waive or vary those requirements and relevant Australian Standards.

90 The conditions in the 28 August 2007 licence are extensive and include that moisture from the ground must be prevented from reaching the upper surface of the floor and adjacent walls by providing a 'vapour barrier' in accordance with the 'BCA 1 and A.S.­2870' (Exhibit A, page 309, item 7).

91 'A.S.­2870' refers to Australian Standard 2870 which sets out the design and construction of slabs and footings for a single dwelling house, but may also be applied to other forms of construction.

92 The respondent explained in closing submissions that the reason the 4 April 2007 licence and the 28 August 2007 licence were issued by a different local authority was because between April and August 2007, there were boundary changes.

93 Mr Peter Edward Dash is a registered builder, currently employed by the respondent. At the time Tyne Square was being awarded to the respondent, he was employed by the respondent as Senior Site Supervisor. During this time, he reported to the Construction Manager, Mr Bruce Menegola. Mr Dash's duties were to coordinate the various trades, interpret plans, specifications and documentation, and to supervise and inspect the construction works to ensure the building was constructed in accordance with the Contract.

94 Mr Dash's evidence was tested extensively in cross­examination. The Tribunal did not find Mr Dash straightforward in cross­examination, and considers his previous position with the respondent and his loyalty to Mr Psaros has affected his perspective and coloured his evidence. As such, the Tribunal has concluded that Mr Dash's evidence must be treated with caution.

95 The Tribunal finds that the works the subject of this dispute in respect of the Tyne Square basement carpark were completed under the 28 August 2007 licence. The evidence of Mr Psaros and Mr Dash is that the basement works were the subject of the 4 April 2007 licence (T:311, 348 and 374; 12.10.12). The Tribunal prefers the indication to the contrary in the licences themselves to the evidence of Mr Psaros and Mr Dash; namely, principally, the conditions of the 4 April 2007 licence indicate that the works the subject of that licence extended only to in-ground plumbing and hydraulics, and the terms of the 28 August 2007 licence indicate that the works the subject of that licence included addressing extensive conditions, including moisture from the ground.

96 Following the issue of the forward works building licence dated 4 April 2007, an on-site meeting occurred on 11 April 2007 between representatives of the respondent builder (Mr Bruce Menegola, Mr Peter Dash and Mr Rafe Scicchitano) and the consultant engineers, Cardno (Mr Peter Thomsett and Mr Cong Bui), who had taken over from SEG. Mr Psaros was not present at this meeting.

97 A report of the outcomes of that meeting included the following:

...

Item 1 - Cardno viewed site excavation and sited hole showing ground water.

Item 2 - Cardno suggested that the Golders confirm height of proposed tanking to the rear of retaining walls. Suggested 500mm above AHD RL 10.500. Psaros to obtain recommendation of type of waterproof membrane that could be used from their contractor.

...

Item 4 - Cardno to look into and provide a detail for construction or control joints in the ground slab, this is to cover the method of providing a waterproof joint... (Exhibit A, page 146).

98 Mr Swift is a director of Pipeline Hydraulics Pty Ltd (Pipeline Hydraulics), a company that is engaged in plumbing design and installation. Mr Swift has no formal qualification but has been involved in the plumbing industry for 36 years. Mr Swift was cross-examined extensively and, while acknowledging that Mr Psaros has sought complete indemnification from Mr Swift in relation to any liability arising from these proceedings, the Tribunal accepts Mr Swift as a credible witness.

99 In his witness statement, Mr Swift states that in his email dated 27 April 2007, he confirmed that Pipeline Hydraulics had previously been advised that the entire basement floor and retaining walls were to be 100% watertight. In this email dated 27 April 2007 from Mr Swift to Mr Davenport, which is copied to others, Mr Swift states that his understanding was that the basement floor and retaining walls were to be 100% watertight.

100 Mr Davenport's evidence was that, at that time, he also thought the whole structure was to be 100% watertight (T:95; 11.10.12). Indeed, Mr Davenport's reply to Mr Swift's question included as follows:

... The watertight requirement was really a means of ensuring that no groundwater seeped into the basement. The provision of an underdrainage system was to allow groundwater to be drained in the unlikely event that it rose and applied pressure to the base slab. (Exhibit B7, page 89)

101 Mr Psaros' evidence in cross-examination on this issue was unclear and contradictory (T:119 and 120; 11.10.12). The Tribunal prefers Mr Swift's evidence and also the documentary evidence on this issue - in particular, that referred to above.

102 The Tribunal finds that, at 11 April 2007, the overall design intent of Tyne Square was still to completely exclude water from the basement.

103 The Tribunal does not accept the applicant's contention that the email, dated 12 April 2007 from Mr Robert De Francesch, which is copied to others, from email address robert.d@psarospropertygroup.com.au to Mr Psaros at email address danny.p@psarospropertygroup.com.au, Mr F Saraceni and Mr Davenport (12 April Email), evidences a decision by the respondent to move away from exclusion of water from the basement and instead manage water in the event that it did ingress the basement.

104 The 12 April Email included the following (Exhibit A, page 148):

I confirm the following points as a result of our meeting this afternoon.

1. Groundwater table not expected to be an issue in the long term. It is currently at approximately AHD 9.20 RL and is not expected to rise above AHD 9.75.
2. Golders to design an agg-drain system below the slab to drain into the existing Stormwater Pump Pit (at approx. Grid N/5) which is the lowest point in the Basement.

1. PB to lay heavy duty polyethylene underlay under slabs on fill with taped joints. This measure is only to assist in the prevention of water penetrating the slab should the water rise above 9.75 at some point in the future. In the event that water does penetrate the slab, it is only expected to be minor and will find its way to the Stormwater Pump Pit.
2. PB to liaise with Waterproofing Contractor to provide an external waterproof joint at the junction of the AFS walls and the footing of the slab. Waterproofing up the walls is not required.

105 The Tribunal accepts Mr Davenport's evidence to the effect that 'an agg-drain' is a sub drainage system and his evidence as to how it works; namely, water flows into the drainpipes, which are porous, and then runs at grade and is pumped out. It is a common way to 'get rid of water in soggy ground' (T:86, 87 and 90; 11.10.12).

106 The Tribunal finds that the reference to 'an agg­drain' in item 2 above is reference to a sub­slab aggregate-filled groundwater drainage system, which is a sub drainage system, and was one of the original solutions in the Golder May 2006 Report, suggested to reduce hydrostatic uplift pressure by draining groundwater away from the basement slab.

107 The Tribunal finds that the 12 April Email evidences PPG implementing its decision to move away from the basement slab resisting uplift pressure to instead accounting for uplift pressure by way of a sub drainage system.

108 The Golder May 2006 Report, at page 11, included advice that the sub drainage system option of relieving uplift pressure would require environmental approval.

1. despite the use of the PPG email facility in the 12 April Email, Mr De Francesch was acting as the 'Project Manager' of the respondent when confirming details of what had been agreed at site; and
2. the 12 April 2007 Email evidences how, at that point in time, certain details of the waterproofing system were going to be dealt with by the respondent, including the use of a heavy duty polyethylene underlay as the waterproofing mechanism under the slab, and the provision of a waterproof joint at the junction of the AFS walls and the footing of the slab, with no waterproofing up the walls.

110 In this limited way, the 12 April Email also evidences the respondent's involvement in the development of an aspect of construction which had an element of design; namely, the waterproofing.

111 The Specifications are dated April 2007, although there is no evidence as to exactly when they were finalised or what any earlier version looked like. As no version of the specifications was provided by the respondent in response to the Tribunal's orders dated 22 November 2012, the Tribunal finds that no version of the specifications existed as at the commencement of the Contract on 8 March 2007. The Tribunal does not accept the implication from paragraph 14 of Mr Dash's witness statement that the Specifications, which set out the requirements in relation to 'Underlays, Membranes' (Exhibit A, page 208 and Exhibit 10, page 14), were amended in March 2007 because the document is dated April 2007.

112 The respondent's position that it was simply required to build Tyne Square in accordance with the Contract ignores the respondent's participation in the development of the waterproofing provisions after the commencement of the Contract.

113 On 20 April 2007, Mr Davenport emailed to Mr Psaros details of a sub drainage system that was intended to have the effect of relieving against hydrostatic uplift pressure on the basement slab. However, when Mr Swift was asked to incorporate these details into the hydraulic drawings, he first asked a series of questions. Mr Psaros' response to these questions was to email Mr Davenport on 26 April 2007, including the following:

We don't want this to get bigger than "Ben Hur", so how do we answer this please ...' (Exhibit B16, page 358; Exhibit B7, page 89).

114 When cross­examined as to what was meant by his email of 26 April 2007 that he did not 'want this to get bigger than "Ben Hur"' (Exhibit B16 pages 357 and 358), Mr Psaros replied:

Time. Because groundwater is that - my experience on a project we are doing in - opposite Members Equity Stadium is that we lost six months by having to resolve groundwater approvals' (T:341; 12.10.12).

115 Mr Davenport provided answers to Mr Swift's questions, as referred to some extent above, and Mr Swift then responded by email dated 1 May 2007, including as follows:

... Could I suggest another option to achieve the same resulting reduction of load under the slab should the water table rise?

Place a series of 150mm dia trafficable floor grates finished at FFL with 100mm PVC risers penetrating the slab and sitting in a building fabric encases .5x.5x.5 blue metal hole below the slab. This way any ground water table rise would not be taken into the proposed subsoil drain system as previously suggested until it rose to actual FFL. At this point the water table would simply bubble up through the grates of FFL and run across the floor to the existing storm water grated sump located in the lower corner of the basement for pumping into the existing soak wells located under the driveway for soakage back into the ground.. As the water table is not expected to get to this level the likelihood of such an event is extremely low.

My concern with the proposed subsoil drainage system as previously suggested is that it will effectively be draining full time ... (Tribunal's emphasis added) (Exhibit B16, page 356; Exhibit B7, page 87).

116 Mr Davenport responded by email of 2 May 2007 that he thought 'Tim's proposal is better than mine and will solve the problem without having to deal with all the issues with regard to water disposal ...' (Exhibit B16, page 355 and Exhibit B7, page 86).

117 On 2 May 2007, Mr Psaros emailed Mr Davenport, copied to, inter alia, Mr Swift, asking Mr Swift to 'document this solution' (Exhibit B16, page 354; Exhibit B7, page 85).

118 Mr Swift subsequently caused drawings to be prepared which incorporated relief vents with trafficable floor grates. No sub drainage system appears in the Plans and this aspect appears to have been abandoned.

119 The Tribunal accepts Mr Davenport's evidence that a sub drainage system was not installed (T:87; 11.10.12). There is no sub drainage system of the kind recommended in the Golder May 2006 Report anywhere in the Plans or Specifications.

120 The Tribunal finds that Tyne Square was built with relief vents but not with the sub drainage system originally recommended by Golder in the Golder May 2006 Report to drain the soil away from the basement.

121 Mr Davenport is a Senior Geotechnical Engineer at Galt Geotechnics Pty Ltd. He obtained, relevantly, an Associateship of Civil Engineering in 1974 from the Western Australian Institute of Technology. He was formerly employed by Golder.

122 Mr Davenport was involved in the Tyne Square project and is currently undertaking work for the respondent. There are some inconsistencies in his evidence. The Tribunal does not regard Mr Davenport as an independent expert and considers that his evidence should be treated with some caution.

123 The Tribunal does not accept Mr Davenport's evidence that he assumed that Mr Swift was a consulting engineer because it is not consistent with other evidence, such as Mr Swift being referred to as the 'plumbing contractor' by Mr Psaros in the email from Mr Psaros to Mr Crownie, copied to others, including Mr Davenport, on 26 April 2007 (T:93; 11.10.12) or with the kinds of questions Mr Swift was asking in his 27 April 2007 email.

124 The Tribunal does not accept the applicant's contention that the chain of emails at Exhibit B16, pages 354 ­ 365, which include the emails referred to immediately above, evidence an active involvement of the respondent in the adoption of the particular design which resolved the issue of hydrostatic uplift to the basement slab.

125 The evidence does establish that Mr Psaros played an active role in the development of the particular design that resolved the issue of hydrostatic uplift to the basement slab. However, the Tribunal finds that he did so through PPG, which functioned in a project management role at least from April 2006 until November 2007.

126 The Tribunal also finds, based principally on the documents establishing authority (the JVA and the Contract), but also on the weight of relevant evidence taken as a whole, that Mr Psaros was acting as a representative of PPG as Project Manager when deciding and instructing the relief vents to be incorporated into the Plans.

127 To the extent that Mr Psaros' evidence on these issues was confused, inconsistent or contradicted documents admitted into evidence, the Tribunal has preferred the documentary evidence.

128 Of course Mr Psaros, in his capacity as CEO of the respondent and as builder, acquired all of the knowledge Mr Psaros received in his capacity as CEO of PPG and on behalf of the JV.

129 The Tribunal also finds that, despite the fact that Mr Psaros had commented to others that groundwater was not expected to rise above RL 9.75 AHD ­ contrary to advice in the Golder May 2006 Report and Mr Davenport's attempts to 'get through to' Mr Psaros that he had to allow for RL 10.5 AHD ­ (T:99; 11.10.12), Mr Psaros knew, and therefore the respondent knew, at least by 2 May 2007 when the decision was made to insert the relief vents, that the lowest part of the finished floor level of the basement was going to be approximately 0.75 of a metre below the maximum groundwater level of RL 10.5 AHD recorded at the location below, and therefore below what the maximum elevation of groundwater could possibly be.

130 The applicant and respondent commissioned extensive expert evidence, which was admitted into evidence, directed at explaining, inter alia, how and why water is ingressing the basement carpark.

131 At a compulsory conference of experts on 21 September 2012, a handwritten joint statement was produced and admitted into evidence as Exhibit I1.

132 Present at the compulsory conference of experts on 21 September 2012 at the request of the applicant were:

• Mr Gregory Thomas Watts;
• Mr Alexander (Sasha) Martens;
• Mr Peter Grant Airey; and
• Mr James David Sebbes.

133 Present at the compulsory conference of experts on 21 September 2012 at the request of the respondent was:

• Mr Allan Lundorf;
• Mr Murray John Dixon;
• Mr Fred Davenport; and
• Mr Brett Lucchesi.

134 Mr Watts is the Principal of a company that specialises in the provision of environmental services to industry. He obtained a Bachelor of Science (Technology Studies) with a major in Environmental Management in 1995 and a Master of Science in 1998 from Edith Cowan University.

135 Mr Martens is the Principal Engineering Hydrologist at Hyd2o Hydrology, a company which provides advice regarding water management issues. He obtained a Bachelor of Civil Engineering with Honours in 1987 from the University of Western Australia.

136 Mr Airey is a Director of Airey Taylor Consulting Engineers and Scientists. He obtained, relevantly, a Bachelor of Engineering in 1960 from the University of Western Australia.

137 Mr Sebbes is the General Manager of his family-owned business trading as Mobile Dewatering. He does not have a formal hydraulic engineering qualification, nor is he a qualified hydraulic designer or engineer, but he has 18 years' experience in the dewatering industry.

138 Mr Lundorf is employed at Golder as a Senior Water Resources Engineer. He obtained an 'MSc Civil Engineering' in 1997 at the Technical University of Denmark, Copenhagen.

139 Mr Dixon is the Director and Principal Engineer of Tadros Dixon. He has a Degree in Civil Engineering and specialises in hydraulics, with 42 years' experience in design and construction.

140 Mr Lucchesi is a Director and Principal Engineer of E­Tec Consultants. He obtained a Bachelor of Civil Engineering in 1986 from the University of Western Australia.

141 The handwritten joint statement, Exhibit I1, was signed by all present, although:

• Mr Lucchesi did not agree with points 3, 4, 9, 10, 13 and 14;
• Mr Davenport did not agree with point 7;
• Mr Lundorf and Mr Dixon qualified their agreement with point 9; and
• Mr Martens added to point 9.

142 Copies of a typed version of the handwritten joint statement were subsequently produced and signed by all who had been present, with a few further handwritten amendments and comments. These copies were admitted into evidence as Exhibits I2 - I9.

143 Mr Martens wrote on his signed copy that point 3 on page 5 of the handwritten version of the joint statement was intended to replace the corresponding point on the first page of the handwritten version of the joint statement. He also wrote that several statements and headings had been amended from those contained in the signed handwritten version of the joint statement and that these changes do not appear to change the intent of the agreed statements (Exhibit I4).

144 The following represents the typed version (without all qualifications and comments noted and also without signatures):

All agreed that the water was coming into the basement of the structure.

All agreed that water is allowed to ingress as a design tool to reduce pressure uplift on the basement slab[.]

3.0 Stormwater distribution (as amended by words in Section 3 on Page 5 of 5)

All agreed that stormwater is distributed into 18 soakwells with connected pipework which allows onsite storage to be distributed along the length of the facility. Stormwater is injected into S8 and distributed out in both directions from that location.

Initial mounding occurs at the soakwells abutting S8 due to the retention time prior adjacent soakwells filling.

All wells are full after 1 hour[.]

All agreed that the construction crane block may cause a constraint to water infiltration at the location opposite to the nominated soakwell S8 and S9.

5.0 Deleted by agreement and replaced with Item 8.0

6.0 Are the present relief valves adequate to cater for the increased pressure due to the stormwater and ground water

All agreed that this is unknown as the design information is not available.

7.0 AAMGL (Annual Average Maximum Ground Water Level)

All agreed with one dissention that the AAMGL is 9.8 AHD and there will be no ingress from the ground water at this level with the possible exception of the lift and electrical pits.

Fred Davenport is not in agreement with this. He has concerns that this level is too high based on other projects near this development he has been involved with. Fred needs to research information on other sites from information held at his office.

8.0 Stormwater impact on the Ground Water Level and Water Ingress

All agreed that the infiltration of stormwater to the ground water will increase the ground water level and will cause water ingress to the basement when the ground water level is increased above 9.8m AHD.

All agree that it is likely to continue with three qualifications[.]

Murray Dixon and [Allan] Lundorf qualified by stating,

'with indeterminate volume and frequency'[.]

Sasha Martens qualified with

'Ingress will continue to occur frequently for small rainfall events during times of high ground water' and that 'based on the AAMGL, ground water would be expected to rise into the basement on average every two years'[.]

All agreed that the historical MGWL (Maximum Ground Water Level) is 10.5m and this will be increased against the northern wall due to stormwater impact on the MGWL which could increase the level to between 11.0m and 11.4m AHD.

11.1 Peter Airey's idea of an additional slab to stop the ingress completely (see Engineer's Joint Report).

11.2 Increase the pumped stormwater offsite within the volume requirements set by the Council which will require some onsite storage.

11.3 Stormwater and ground water cannot be pumped into the Water Corporation sewer system.

11.4 Chemical grouting behind the slab/wall joint will abate the ingress at that point.

12.0 Management of Water Ingress into the Basement

Stormwater could be managed with a combination of storage and pumping the agreed amount off site.

If all the stormwater is controlled and taken off site, the combination of soakwells, recycled volumes of ground water and the reduced infiltration capacity (due to heavy metals and iron) will get to a situation where recycling ground water will be reduced to the point where the system will not be workable.

All ground water will be required to be treated if it is to be taken off site, whether singularly or mixed with stormwater and taken off site.

If any other issues arise, the experts and the Tribunal are prepared to reconvene the compulsory conference.

21st September 2012

Name email address Signed

Murray John Dixon murray.dixon@tadrosdixon.com.au

Gregory Watts greg@environmentalservices.com.au

James Sebbes james@mobiledewatering.com.au

Peter Grant Airey mail@atconsulting.com.au

Allan Lundorf alundorf@golder.com.au

Sasha Martens sasha@hyd2o.com.au

Brett Lucchesi etec@etec.com.au

Fred Davenport Fred.Davenport@galtgeo.com.au[.]

145 Mr Lucchesi and Mr Airey also subsequently produced a typed joint statement, dated 25 September 2012, which is the same as the handwritten version of it except for numbering, and, consequently, only the typed joint statement was admitted into evidence, as Exhibit J. The following represents the typed version of the joint statement, again without any signatures.

1.1 Agree that existing slab, without subfloor relief drains, is not capable of resisting uplift that would be exerted by a water table level of 10,500 (maximum predicted water table level)[.]

1.2 Agree that the basement slab is constructed in accordance with structural Engineers drawings issued for construction and approved Council building license drawings which are consistent so far as thickness is concerned. There is no 'waterproof membrane' present but there is a 200 micron thick polyethylene vapour barrier.

1.3 Agree that the adequacy of the slab on ground is reliant on the effectiveness of the sub-floor relief drains. Confirmation on the design of the sub-floor relief drains providing adequate relief of hydrostatic pressure would be required. There is no evidence of any slab distress at this stage.

2.1 Providing that there is an effective solution for the disposal of water ingress (by other methodology via hydraulic/hydrology consultants) there is no reason to modify the structure.

Leave existing slab and overlay with new slab over that is tied to existing slab and tied down into ground below to provide an uplift resistant watertight slab on ground. This design would also accommodate the retention of the current stormwater disposal system.

If any other issues arise for the experts, they and the Tribunal are willing to reconvene this compulsory conference.

146 At a further conferral of experts on 10 October 2012, four further questions were discussed and copies of a page of handwritten answers were signed by:

• Mr Martens without qualification;
• Mr Airey without qualification
• Mr Sebbes without qualification;
• Mr Watts who appeared to indicate by handwritten notation that he only agreed with points 1, 2 and 3 and not with point 4;
• Mr Lundorf without qualification;
• Mr Collins without qualification;
• Mr Davenport who qualified his agreement with point 4;
• Mr Lucchesi who qualified his agreement with point 4; and
• Mr Dixon who also qualified his agreement with point 4.

These documents were admitted into evidence as Exhibit K1 to Exhibit K9.

147 Mr Martin Bruce Collins, who agreed to participate at the request of the applicant, is a Director of Ralph Beattie Bosworth Consultants and obtained an Associate Diploma in Quantity Surveying from Curtin University in 1977.

148 The following represents a typed version of the four questions and answers, without all qualifications and comments noted and without signatures.

1. If all of the stormwater is routed off site and not directed into the soakwells, will there still be issues with groundwater ingress to the basement?

Groundwater will still ingress the basement. However, there are some differences as to how often this will occur.

1. To date, has water ingressed the basement primarily through penetrations in the basement slab other than through the relief points incorporated into the basement slab?

Water has ingressed the basement through both joints and relief points. However, no measurements have been done to quantify the amounts from each source.

1. Does the waterproofing to the retaining walls, as referred to at paragraph 16 of the statement of Mr Peter Dash, satisfy the requirements of the contract specification, taking into account item 202 of the specification (page 208 of volume 1 of hearing bundle) and item 303 C of the specification (page 248 of volume 1 of the hearing bundle)[?]

To answer this, clarification is needed as to the comments of Mr Dash at paragraphs 14 and 16 of his statement, as different requirements apply in clause 303.

1. If a waterproof membrane had been applied to the slab on ground and the walls consistent with the tanking requirements of the specification at item 303 (page 248 of volume 1 of the hearing bundle). Would water stops have been necessary to exclude water ingress, as described at paragraph 75.3 of the statement of Mr Danny Psaros?

149 In the signed versions at Exhibit K7, K8 and K9, Mr Davenport, Mr Dixon and Mr Luccessi qualified their agreement with the last answer, that is, answer 4.

150 On 11 October 2012, the Tribunal called Mr Martens, Mr Airey, Mr Sebbes and Mr Collins, as well as Mr Lundorf, Mr Dixon, Mr Davenport and Mr Shaun Cugley to provide evidence concurrently.

151 Mr Watts and Mr Lucchesi were not present to give evidence at that time. Mr Watts was not present because, Mr McGowan submitted, in light of the various experts' reports, the role of some of the experts has fallen away. Mr McGowan said the respondent did not have an issue with the matters the subject of Mr Watts' statement, which can be received without cross-examination (T:15; 11.10.12). Mr Lucchesi was not present due to significant personal difficulties in attending. Mr McGowan also submitted that he had either no role, or a limited role, effectively because of the agreement reached (T:15; 11.10.12). The applicant did not object to proceeding on this basis.

152 Mr Cugley, who agreed to participate at the request of the respondent, is a director of Satterly Australia Pty Ltd, which trades as property and construction consultants. He has a Bachelor of Building (Quantity Surveying) from the University of South Australia.

153 Mr Collins and Mr Cugley were included so as to be available to address issues relating to the possible options of remediation.

154 The Tribunal accepts as competent, independent experts and credible witnesses Mr Martens, Mr Sebbes and Mr Collins, as well as Mr Lundorf, Mr Dixon and Mr Cugley. The Tribunal has taken into account the fact that Mr Lundorf is employed by Golder.

155 The Tribunal has already expressed its assessment of Mr Airey and Mr Davenport.

156 The Tribunal also accepts as competent, independent experts and credible witnesses, Mr Watts and Mr Luchessi, even though they did not participate in giving evidence during the hearing.

157 The Tribunal accepts all of the joint expert evidence referred to above.

158 The respondent submits that the two possible causes of water ingress to the basement carpark, both of which Pipeline Hydraulics are responsible for, are:

1. groundwater rising up and coming through the sub drainage relief system (on the basis that this was the intended design to); and
2. water mounding causing uplifting water pressure without there being groundwater rising above the level of the basement slab.

The Tribunal does not accept this submission in all respects.

159 As was clarified during concurrent evidence, at T:24; 11.10.12:

LUNDORF, MR: Allan Lundorf. I would just like to qualify when we say that the water has entered in, and Peter is mentioning the 50 millimetres, it's not of my belief that the whole basement has been covered by 50 millimetres of water in the basement, so it's not that all the relief points as water has entered through all of the release points due to groundwater level rise, it's more that water has entered the basement in the northern part through, possibly, the relief points or through joins in the slab caused by water entering through the soak wells creating a local mound of the groundwater and not a regional rise of groundwater that has caused the whole basement to flood. It's only part of the basement where water ingress has occurred.

DAVIES, MS: Does everyone agree with that, or does anyone disagree?

DIXON, MR: No, we all agree on that.

MARTENS, MR: Sasha Martens. I agree with that.

MARTENS, MR: Sasha Martens. At present, the ingress which has been occurring along the northern wall has been occurring for minor rainfall events, less than 20 millimetres in some instances up to - I think the maximum was 40 millimetres in December last year. Now, those events are very common events, and the majority of events, hydrologically speaking, are termed less than a one-year average recurrence interval. So it means on average you could expect those events to happen every year, or more frequently than once a year.

The modelling that we have done suggests that even in events of that nature, the mounding which occurs adjacent to the northern wall in a situation where the groundwater table would be at its annual maximum would be something around the order of about half a metre. So that provides a surcharge in that northern area adjacent to that northern wall, which is creating an uplift pressure and forcing the water ingress through the joins at present.

FISHER, MR: But that additional half a metre, as I understand it, is an addition over a certain height, as it is at the moment. Is that correct?

MARTENS, MR: Sasha Martens. That is correct.

FISHER, MR: And whilst removing the mounding would relieve half a metre, there would still be water pressure under the slab. Would that water pressure still cause problems to the slab?

MARTENS, MR: Sasha Martens. If all stormwater were to be taken off site, there would still be an issue in terms of the groundwater levels providing uplift on the slab or pushing through the slab.

FISHER, MR: Would everybody agree with that?

LUNDORF, MR: Allan Lundorf. I believe we have to distinguish between two things. I think what I would call the regional groundwater level is the groundwater level in the area of the site, and that goes up and down seasonally, and it goes up and down up to half a metre to a metre seasonally. If a rainfall event occurs and the groundwater level is high, meaning that we are in the wet season, the groundwater level is going to be close to, or in some cases it would be above, the basement slab. But there could be cases since the building has been built, the groundwater level has been up to the basement slab, but it hasn't actually been higher than the basement slab. So what's then occurring is, when the groundwater level is high and very close to the basement slab, we now have a rainfall event, the water is running off and putting into these soak wells, and as Sasha is rightfully saying, that is causing the groundwater level in that area locally to rise by up to half a metre, similar to my calculations, and that has caused the water ingress that we have seen.

That said, the groundwater level in the area, the maximum groundwater level, designed groundwater level, has been set at 10.5, which is higher than the base of the slab. Based on that, even if you were to take all the water and not put it into the soak wells, there is a possibility that the water level would enter into the basement, even if you take away the stormwater going into the soak wells. (Tribunal's emphasis added)

FISHER, MR: Has anybody got any agreement, disagreement?

MARTENS, MR: Sasha Martens. I agree with what Allan said. I'd just like to provide a bit of context to the groundwater levels. The AAMGL, which is the annual average maximum groundwater level, is - statistically it's the level that you would be expected to reach at the end of winter on average, which means once every two years.

So it would be expected that over a long series of time, if you looked at it at that level of 9.8, which intersects - is the level of the basement slab, 50 per cent of the time, or 50 per cent of the years, you would expect the level to be higher than that amount, on average. At the moment we're fortunate that we're in a relatively dry sequence of years. The modelling that is being done by Allan as part of his work has shown that in the 1980s, that level would have been exceeded on site in all years.

160 This accords with the evidence of Mr Martens regarding rainfall events.

161 There is no evidence that there is leakage within the stormwater system itself, including at the point water enters the soakwells. There is no evidence as to how quickly or widely soakwells should disburse groundwater. The Golder May 2006 Report had warned that, given that the groundwater flow is north to south across the site, mounding of the groundwater on the north side of the tunnel is a distinct possibility. There is no evidence as to how far this possible effect of the tunnel could reach.

162 There is some evidence of water ingress also at times other than registered 'rainfall events'.

163 Ultimately, the weight of evidence supports the conclusion that it is more likely than not that a cause of water ingress to the northern parts of the basement carpark around the times identified is rainfall running into the soakwells, which then leads to groundwater in the immediate vicinity of the soakwells rising up past the height of the basement floor.

164 The Tribunal does not accept Mr Psaros' theory which suggests that the stormwater does not become groundwater (T:370 and 371; 12.10.12), as the Tribunal prefers the experts' evidence.

165 The Tribunal does not accept Mr Dash's evidence, to the effect that a cause of water ingress to lift pit 3 was a significant flooding as a consequence of a damaged sprinkler head, as anything more than an unsubstantiated theory. This alleged event was based on conversations and emails with others. Copies of emails were not provided and the theory was unable to be tested. There was no other corroborating evidence (and note T:98; 11.10.12). Mr Malie did not recall the event (T:98 and 99; 09.10.12).

166 All of the experts, when asked in joint conference whether they had seen a relief vent system such as that in the Tyne Square basement, responded that they had not (T:59; 11.10.12). When Mr Psaros was asked in cross­examination if he had ever used a relief drain system in the slab of the buildings he had constructed, he replied that he had not (T:117; 11.10.12).

167 The experts agreed on what would happen if all stormwater (that is, rainwater draining into the soakwells) was routed off site, including that groundwater will still ingress the basement, albeit with differences as to how often this will occur (Exhibit K1 - K9; T:68; 11.10.12).

168 The experts addressed the fact that there has been a 'dry sequence of years' (T:51; 11.10.12) and that data shows that between 1993 and 2012 the height of regional groundwater has not exceeded slab level (T:48 and 49; 11.10.12). The experts agreed this data could be underestimated (T:51 and 52; 11.10.12).

169 There were also varying opinions as to how likely it was that the historical maximum height of RL 10.5 AHD would ever be reached again. However, ultimately Mr Lundorf said:

When we do designs, we design to the worst case, and that's where the design the slab and - the system here should be designed for the 10.5 because the system, the collection system, the pumps should be able to pump for that event, but it doesn't mean it's going to happen every year or every second year. (T:53; 11.10.12)

170 Mr Davenport agreed that RL 10.5 AHD was the correct level to design to, and that to design to less than that level would be remiss (T:77; 11.10.12).

171 There is no evidence of any water ingress to the southern half of the basement (for example, Exhibit B8, pages 10 and 11).

172 Accordingly the Tribunal finds that a cause of water ingress to the northern parts of the basement carpark at the times identified is rainfall running into the soakwells, which then leads to groundwater in the immediate vicinity of the soakwells rising up past the height of the basement floor.

173 The Tribunal also finds that, while it has not been established that regional groundwater, as distinct from groundwater in the immediate vicinity, has risen up past the height of the basement slab to date, there has been, and continues to be, a risk that regional groundwater will rise up past the height of the basement slab and ingress the whole of the basement carpark, even if all stormwater was routed off site.

D. The areas of the northern part of the basement where water has ingressed and the extent of the problem

174 The applicant led evidence as to when and where water has ingressed the northern half of the basement, principally through Mr Jacques Curty Bernard Malie, Mr John Ogilvie Ullner and Mr Stephen Ronald Grose.

175 The report dated 19 September 2012 by Concrete Waterproofing (WA) Pty Ltd (Concrete Waterproofing), which is annexure 3 to the first of Mr Ullner's witness statements (Exhibit B1(a)), was admitted on the basis that no weight will be attributed to the opinions expressed therein, given that the author of the report was not called (T:51; 08.10.12), and the Tribunal has attributed no weight to the opinions.

176 Mr Ullner is the Director of JOU1 Pty Ltd, which is the company that owns commercial premises at Tyne Square, part of which is leased to Coles. Mr Ullner is also a member of the Council of Owners, being the governing body corporate of Strata Plan 52843 for Tyne Square. Mr Ullner is authorised to act on behalf of the Council of Owners in these proceedings. Counsel for the respondent tested the evidence of Mr Ullner. The Tribunal found Mr Ullner straightforward in cross-examination. The Tribunal accepts Mr Ullner as a credible witness.

177 Mr Malie works as a storeman at Coles at Tyne Square five days per week between approximately 7 am and 3.30 pm. He is also the proprietor of Malie Cleaning, a cleaning business which performs commercial and domestic cleaning, including the common areas of Tyne Square. He is also the caretaker of the building and provides a report once a month of anything identified to be in need of fixing. This does not include access to the Western Power transformer room, the sub-station room and the apartments (Exhibit B8). Counsel for the respondent tested the evidence of Mr Malie. The Tribunal accepts Mr Malie as a credible witness.

178 Mr Grose is and has been employed by Western Power for slightly over 30 years. He is a Distribution Systems Policy Engineering team leader, responsible for developing standards and policy in relation to how people safely connect to the Western Power network (Exhibit B4). His qualifications are in business - not engineering - although he has engineers working for him (T:100; 09.10.12). The Tribunal accepts Mr Grose as a credible witness.

179 Mr Martens, Mr Airey, Mr Sebbes, Mr Watts, Mr Lundorf, Mr Collins, Mr Davenport, Mr Lucchesi and Mr Dixon agree that, in their opinion, water has ingressed the basement through both 'joints and relief points', but that no measurements have been taken to quantify the amounts from each source (Exhibits K1 - K9).

180 From the time Mr Malie commenced as caretaker of the Tyne Square building in approximately October 2009, he did not see any evidence of water ingress to the basement carpark until after a large hailstorm struck Perth on 22 March 2010 (Exhibit B8, page 3, paragraphs 13 and 14).

181 Mr Ullner first became aware of water ingress to the basement carpark around 18 August 2011 (T:67; 08.10.12).

182 The respondent submitted that, from the evidence before the Tribunal, it appears that on two occasions identified by Mr Malie, and one further occasion in August 2011 identified by Mr Ullner, water was found in the basement. The respondent further submitted that there is every basis to conclude that Mr Dash's evidence regarding the sprinkler damage was one of the occasions identified by Mr Malie.

183 The Tribunal does not accept these submissions.

184 The Tribunal finds, based principally on the photographic evidence as well as the joint answer by the experts to question 2 from the expert conference on 10 October 2012 at Exhibit K, that there has been groundwater ingress to the northern part of the basement through both relief vents and joints in the basement slab.

1. the photographic evidence; and
2. the evidence of Mr Ullner, (excluding the whole report of Concrete Waterproofing, Mr Malie and Mr Sebbes,

the Tribunal finds that groundwater has ingressed at least:

• up through various joints in the northern area of the basement on at least around 30 July, 3 September, and 7 and 13 December 2011, including into storerooms and the lift 3 corridor; and

• through the joint between the basement floor and walls at various points on the northern perimeter of the basement on at least around 30 July, 3 September, and 3 and 7 December 2011.

186 The Tribunal accepts Mr Malie's evidence, principally at Exhibit B8, pages 10 and 11, as to where the photographs he took are located. The Tribunal also accepts Mr Ullner's evidence as to when each such photograph was taken, even though it was Mr Malie who took them. The basis of Mr Ullner's evidence as to the time of a photograph - as he explains in paragraphs 66 and 67 of his witness statement at Exhibit B1, pages 31 and 32 - is the date displayed in the 'properties window' of each photograph. The Tribunal has attributed weight to Mr Ullner's evidence as to dates, despite it being hearsay, because the Tribunal accepts that the dates are the dates that were displayed in the 'properties window' of each photograph, and these dates broadly correlate with Mr Sebbes' evidence as to rainfall events.

187 The Tribunal also finds, based principally on the weight of photographic evidence and Mr Grose's evidence, that groundwater ingress through unsealed cable entry points has occurred into the trenches in the transformer room and switchboard room, which are under the finished floor level of the basement.

188 The Tribunal does not accept Mr Psaros' evidence to the extent that it is inconsistent, because it was non-responsive to, and inconsistent with, what is apparent in the photographic evidence (T:364; 12.10.12) and was also inconsistent with later evidence he gave (T:366 and 377; 12.10.12).

189 The Tribunal infers from the location of the trenches below floor level, the close proximity to soakwells 1 to 8 and the mounding of groundwater that has been occurring in the vicinity of the soakwells, as well as the height Mr Grose describes the water to have reached in both trenches, that:

1. water also entered the trenches in the transformer room and switchboard room through the joints between the basement floor and walls at the north and north­west perimeter; and
2. water ingress to the trenches through both cable entry points and joints occurred at least around 30 July, 3 September, and 7 and 13 December 2011.

190 It was not in dispute that water ingressed lift pit 3 through the base of the wall at the end of the corridor to lift 3 and up through the adjacent joint. Mr Dash also explained how the respondent attended to the defects in this location (T:383 and 384; 12.10.12). The photograph at Exhibit Q and Exhibit B1, page 125 (T:69; 08.10.12) shows these lift 3 repairs.

191 The Tribunal accepts Mr Ullner's evidence that he was advised that lift 3 had stopped working due to water ingress on 22 August 2011 (T:68; 08.10.12.).

192 Mr Ullner gave evidence to the effect that the cost of repairing the damage that has been caused to the mechanical system of lift 3 has been estimated at $22,157. This estimate has been made by the applicant's insurer. On the face of it, there does not seem to be any reason why this sum could not have been claimed by the applicant in this application. However, the applicant has not made a claim against the respondent in these proceedings for this sum, apparently on the basis that it has an insurance claim pending.

193 In terms of the extent of the problem that the water ingress has caused for the owners and residents of Tyne Square, there are two categories of problems. The first relates to the consequences of having water ingress to trenches, which carry electrical cabling, and potentially rising up to the level of the floors of the transformer room and switchboard room. Mr Grose states in his witness statement that water covered both high and low voltage cables to within 200 millimetres of the floor level and that any further rise to a level of the switchgear cabinets would have resulted in Western Power having to shut down power to the building. The Tribunal does not regard the fact that Western Power has not directed that anything be done (T:101; 09.10.12) as reducing the seriousness of having water ingress to trenches which carry electrical cabling and potentially rising up to the level of the floors of the transformer room and switchboard room.

194 The second category of problems relates to the loss of amenity and risks for the owners and residents of Tyne Square. The applicant led evidence regarding the nature of loss of amenity and risks through Mr Richard Machell, which was further clarified during Mr Machell's testimony.

195 Mr Machell is, relevantly, a registered builder who has a Diploma in Building from TAFE. He is also a sessional member of the State Administrative Tribunal but has no personal, financial or social connection with any of the members sitting on this Tribunal (T:402; 06.12.12). Mr Machell's opinion was extensively tested in cross-examination. The Tribunal accepts Mr Machell as a competent, independent expert and credible witness.

196 Mr Machell's reports of 2 October and 9 November 2012 were admitted into evidence, although the Tribunal accords no weight to paragraph 3.14 of the 9 November 2012 report, as it could not be tested.

197 The Tribunal accepts Mr Machell's assessment that the inundation of water into the transformer room and electrical service ducts created dangerous conditions.

198 Mr Machell also gave evidence as to the rate water would ingress the basement if RL 10.5 AHD was reached; namely, up to seven litres a second.

199 In answer to a question put by the respondent to Mr Lundorf and Mr Dixon to describe the rate water would come into the basement if regional groundwater reached RL 10.5 AHD but the stormwater distribution did not lead to mounding, Mr Lundorf said there would be 'a low rate trickling in'. Mr Dixon said water ingress through the relief vents then would not be more than 'a litre a second', which would be like 'a bit more than you're going to get out of your shower' (T:63; 11.10.12).

200 The Tribunal finds that, if regional groundwater reached RL 10.5 AHD, water would ingress through the relief vents at, at least, one litre per second.

201 Further, the Tribunal accepts Mr Machell's evidence regarding the nature of loss of amenity and risks. This evidence included, in effect, that, as well as having to step through water - perhaps flowing water - from time to time, which is undesirable and may lead to slipping, the presence of water is associated with increased humidity which may lead to corrosion of metal elements within the basement (T:417; 06.12.12). While the degree of severity may differ depending on the precise rate of water ingress, the nature of the loss of amenity and risks, in essence, does not.

202 The Tribunal also accepts Mr Airey's evidence that corrosion within the AFS walls is now occurring (T:45; 11.10.12).

E. The evidence as to 'a competent builder' with respect to the relief vents

203 Mr Machell also expressed an opinion in his report dated 2 October 2012, inter alia, that a competent builder would not have proceeded to build Tyne Square in a way which included the relief vents or, effectively, with the level of waterproofing that was used.

204 In response to Mr Machell's 2 October 2012 report, the respondent relied on the opinion of Mr Bradley Pike, dated 7 November 2012.

205 Mr Pike is the Manager Compliance at JMG Building Surveyors and has a Bachelor Building Surveying from Central Queensland University and a Municipal Building Surveyors Certificate of Qualification from MBSCQ. Mr Pike gave evidence that, as a building surveyor, his role is to determine that the design of a building, through the documentation and statements prepared by appropriately qualified persons associated with the design, and the construction of a building, through appropriate inspections and from the qualifications and statements prepared by appropriately qualified persons associated with the construction, meets the requirements of the Building Code and the Australian Standards.

206 In his written opinion dated 7 November 2012, Mr Pike states that the question as to whether a competent builder would have constructed the basement floor slab in the manner that the slab has been constructed, or what a competent builder should have reasonably done in this situation, is beyond his expertise. Mr Pike was called but was not subjected to cross­examination.

207 The Tribunal accepts Mr Pike as a competent, independent expert and credible witness. The Tribunal also accept the limits to Mr Pike's expertise.

208 The respondent did not provide a registered builder to provide an alternative perspective, or any other expert to respond to Mr Machell's opinion that a competent builder would not have proceeded to build Tyne Square in a way which included the relief vents, or which included the level of waterproofing involved.

209 The Tribunal does not accept the respondent's position that Mr Machell's opinion is invalid because it is provided with the benefit of hindsight, although careful regard must always be had to the basis upon which workmanship is being assessed.

210 The Tribunal accepts that Mr Machell is qualified to provide an opinion regarding the relief vents and level of waterproofing.

211 However, the Tribunal has some difficulty with the relevance of the notion of 'a competent builder'. Even a competent builder may suffer an error of judgment. It must be borne in mind that the issue is whether the building service has not been carried out in a proper or proficient manner, or is faulty or unsatisfactory. As such, some of Mr Machell's evidence (in paragraphs 5.1 - 6.2.2 of his 2 October 2012) report does not directly address the issue that has to be determined in this case.

212 At paragraph 6.1.16, Mr Machell expresses the opinion that in respect of the installation of 15 floor wastes (meaning the relief vents) in the carpark as a solution to groundwater pressure, the concept provides a solution to the structural issues only, without consideration of the practical considerations of compliance with the other provisions of the Building Code. Mr Machell concludes that this would be immediately apparent to a competent builder faced with floor wastes in a basement, a site that required dewatering and had a maximum groundwater level of 10.5 AHD, with a floor installed at 9.8 AHD and in the absence of the sub drainage system.

213 The Tribunal accepts this aspect of Mr Machell's opinion.

214 The Tribunal finds that it was, or ought to have been, immediately apparent to Mr Psaros that, while the relief vents could resolve the issue of hydrostatic pressure on the basement slab, the installation of the relief vents would, in turn, create problems with the building.

F. What has now been done to date to remedy aspects of the problems

215 There are a number of steps that have been taken by the applicant and also by the respondent to remedy aspects of the problems.

216 In terms of the interim remedial steps undertaken by the applicant, Mr Ullner also gave evidence regarding such work performed.

1. the installation of solid block bunding to protect the switchboard room and transformer room and sewer pump from flooding;
2. the installation of waterproof render and seals to bund walls;

1. the installation of water pumps to protect the switchboard room and transformer room;

1. the supply and installation of piping for a petrol powered pump and the supply of pump and hoses;
2. the supply and installation of 24 hours, seven days per week monitored high water level alarm to the stormwater pump pit;
3. the application of sealing to penetrations, conduits and cables in the switchboard and transformer rooms; and
4. services related to such interim remedial works.

218 While the Tribunal recognises that it can be difficult for a builder to quickly gather sufficient information to be able to agree to requests to participate in rectification work in this kind of circumstance (T:325; 12.10.12), and also that the respondent did not regard itself as liable, the Tribunal finds that the respondent was given a reasonable opportunity to become involved in the interim remedial steps undertaken by the applicant.

219 This finding is based on the correspondence between the parties which is in evidence, whether or not any other correspondence also existed (T:85 and 86; 09.10.12), and that there was an obvious imperative to ensure immediately that the transformer room and switchboard room were watertight. The Tribunal does not accept the respondent's suggestion made in cross-examining Mr Ullner that the fact that Mr Ullner lives in Queensland is somehow relevant to this issue. The Tribunal also does not accept that whether or when the applicant proceeded with any particular relief has any bearing on this issue (T:87; 09.10.12).

G. What the experts have proposed as possible solutions

220 Following the further conferral of experts on 10 October 2012, the experts, comprising Mr Watts, Mr Martens, Mr Airey, Mr Sebbes and Mr Collins as well as Mr Lundorf, Mr Dixon, Mr Davenport, Mr Lucchesi and Mr Cugley identified three possible remediation options.

221 These experts also identified the estimated capital costs, estimated operating costs, and any particular issues or problems associated with each, with the following qualifications:

1. Mr Lundorf noted that, except with respect to the estimated operating cost under component B of the second option, the costing is not within his expertise; and
2. Mr Cugley noted that, in relation to the first option, he had not had the opportunity to independently verify these costs.

222 Except for the qualifications noted above, the experts were in agreement that each of these options would provide a solution, what the estimated costs were, and also the existence of particular issues or problems. However, the respondent's experts did not agree that the first option - which the applicant seeks - is a reasonable response in the circumstances, including on the basis of the significant cost to the respondent when, the respondent contends, cheaper, adequate alternatives are available.

223 A typed version of joint statements (Exhibits M1 ­ M10) regarding possible solutions of 10 October 2012 is set out below:

(based on current design solution provided)

Estimated Capital Costs : $600K

No Operating Cost

OPTION 2 : PUMPING OPTION

COMPONENT A : Detention of stormwater and disposal of stormwater to council drain via pumping

Estimated Capital Cost : $100K

Estimated Annual Operating Cost: $5K/year

COMPONENT B : Offsite pumping of groundwater to sewer

Estimated Capital Cost : 30K

Estimated Operating Cost : $11K/year

(Assuming no treatment required prior to discharge)

Disposal of groundwater with treatment to the council stormwater system was also considered but is not considered an effective remediation option.

TOTAL ESTIMATED CAPITAL COST : $130K TOTAL ESTIMATED OPERATING COST : $16K/YEAR

OPTION 3 : RECYCLE GROUNDWATER TO SOAKWELLS

COMPONENT A (as per option 2 above)

Estimated Capital Cost : $100K

Estimated Operating Cost : $5K/year

COMPONENT B

Estimated Capital Cost : $60K

Estimated Operating Cost :

$5K/year (for occasional pumping to sewer)

+$2.5K - $5K/year for treatment of iron fouling

This option assumes no treatment is required before recycling groundwater to the soakwells, which may be required.

TOTAL ESTIMATED CAPITAL COSTS : $160K TOTAL ESTIMATED OPERATING COSTS : $12.5K-$15K/YEAR

All costings are 2012 dollars

OPTIONS 2 and 3 will depend on regulatory approval to allow discharge to the sewer. This will be required to be renewed every 6 months.

OPTIONS 2 and 3 need to have added to them a contingent sum equal to 20% of the values to be directly comparable to the slab option (OPTION 1).

All cost exclude design fees and GST.

224 Further clarification of the options was provided by the experts during concurrent evidence.

225 Option 1 provides for the installation of a secondary concrete floor slab 150 millimetres thick, overlaying the existing floor slab, together with a series of deep piles extending through the existing floor slab into the substrate.

226 This option is intended to resist uplift from a rising water table and exclude water by the use of the concrete slab, but will require a complete design appraisal from a structural engineer, along with the sealing of all joints. This will include the juncture between the slab and the AFS walls (T:46; 11.10.12).

227 Option 2 allows for the retention of the existing relief vents within the existing floor slab, with the ingress of groundwater to the basement being discharged into the existing holding tank from where it would be pumped into the Water Corporation sewer. Additionally, stormwater presently being discharged into a series of soakwells would be diverted to the council stormwater drainage system.

228 This option is reliant upon approval from the Water Corporation being granted periodically on an ongoing basis.

229 Option 3 also allows for the retention of the existing relief vents within the existing floor slab, again with the ingress of groundwater to the basement being discharged into the existing holding tank, but from where it would be pumped primarily into one or more of the existing stormwater soakwells.

230 This option would result in the groundwater from the soakwells soaking into the natural ground and creating a situation of continuous recirculation. This would occur during those periods when the rising groundwater was fairly minimal; however, there would be occasions when the groundwater would reach peak levels and, in these circumstances, the groundwater would still need to be pumped into the Water Corporation sewer, as in option 2. Also as in option 2, the stormwater presently being discharged into the soakwells would need to be diverted to the council stormwater drainage system.

231 The applicant contended that the remediation option proposed by Mr Airey is the most appropriate (T:16; 11.10.12). This remediation option is option 1.

232 The respondent contended that option 3 is the most appropriate. For example, Mr Dixon considered that option 3 was the best option because it is the least cost option and, if stormwater is taken off site completely, he does not think 'we're going to get that much water in' (T:41, 47 and 69; 11.10.12). The thrust of the respondent's position was also that option 2 was an appropriate option but that option 1 was not.

233 The respondent submitted that the only live question in relation to cost is the question of reasonableness (T:16; 11.10.12) and that the reasonableness of the remedy will be informed by the cost (T:17; 11.10.12).

234 Cost, of course, is not the only consideration in determining whether a remedy is reasonable. The extent of the effectiveness of the remedy compared to other remedies is also relevant.

235 The Tribunal also notes again the relevant aspects of the joint agreement of Mr Lucchesi and Mr Airey extracted above; namely, that providing there is an effective solution for the disposal of water ingress (by other methodology via hydraulic/hydrology consultants), there is no reason to modify the structure.

236 The figures in the joint statement regarding options for solutions in particular were clarified during concurrent evidence.

237 Regarding the capital cost for option 1, this does not include replacement costs of any damaged equipment in the process, nor the cost of parking 76 cars during the 20 week period it will take to implement option 1 (T:31; 11.10.12).

238 Regarding whether a contingency for options 2 and 3 had been included in the figures in the joint statement, the Tribunal considers that Mr Collins was momentarily confused in saying that it had been included (T:32; 11.10.12) and prefers the documentary evidence to the contrary. The capital cost for component B of option 2 was also corrected to $50,000 (T:41; 11.10.12).

239 The Tribunal accepts the joint evidence regarding possible solutions. To the extent Mr Collins' evidence cannot be regarded as joint evidence, the Tribunal also accepts Mr Collins' evidence, with the one exception as to contingency mentioned above.

240 Comparing a purely capital cost with annual operating costs only in one year will not depict an accurate picture as to the true costs of a proposed remedy. The operating costs will continue for the life of the building. No submissions were made by either party as to how the Tribunal should deal with ongoing operating costs if liability was found and it was decided to order option 2 or option 3. However, in order to consider the true costs of the options, the Tribunal has had regard to the approximate capital sum that it would be necessary to award to the applicant in order to generate the operating costs of options 2 and 3. For the sake of this exercise, the Tribunal has assumed that any capital sum awarded would be invested at 5%. The Tribunal summarises the costs of the options below:

241 These very rough calculations indicate that the amount that would need to be awarded for option 2 is approximately $620,400, and for option 3 is approximately $607,200.

242 The Tribunal has not given any consideration to the consequences of inflation. Nor has any consideration been given to whether income tax would be payable on the income generated by any capital sum awarded and, if that were so, how any capital sum to be awarded would be adjusted. Evidence of the life of the building was also not before the Tribunal.

243 Nevertheless, these very rough calculations illustrate that option 1 is not materially more expensive than option 2 and option 3.

244 In relation to option 1, Mr Lucchesi made the point, at page 9 of his 8 August 2012 report, that any raising of the existing floor slab by the addition of a new concrete slab would create height clearance issues between the new ground floor level and the underside of the structure above.

245 Mr Airey said, during concurrent evidence, that whether there would be any problems regarding headroom clearance had been investigated and there would not be any problems in that respect (T:46; 11.10.12).

246 The Tribunal prefers the evidence of Mr Airey on this issue, as he was able to be tested and also his advice regarding option 1 is comprehensive.

247 A good deal of this decision has been devoted to explaining whole circumstances of the development of the design of Tyne Square. This has been necessary largely because of the way in which the parties conducted the case.

248 However, the central issue that the Tribunal is required to determine is the legal responsibility of the respondent pursuant to the BS(CRA) Act.

249 These proceedings raise the following legal issues for determination:

1. Whether the Tribunal has jurisdiction to determine this application and power to grant the remedies sought.
2. Whether the regulated building service has been carried out in a proper and proficient manner or is faulty or unsatisfactory. This raises, in particular:

1. how are relevant standards of workmanship determined; 2. does construction of the basement with relief vents comply with the Building Code;

1. does construction of the basement with relief vents constitute poor workmanship by the respondent; and

1. does any aspect of the waterproofing constitute poor workmanship within s 38(1)(a)?
2. If any aspect or aspects of the regulated building service has not been carried out in a proper and proficient manner or is faulty or unsatisfactory, what is the appropriate remedy?

Does the Tribunal have jurisdiction to determine this application?

250 Subject to the Building Services (Complaint Resolution and Administration) Regulations 2011 (WA) (BS(CRA) Regulations), a person may make a complaint to the Building Commissioner, including about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory (s 5). Regulation 6(2) provides, inter alia, that at least 14 days before making a complaint under s 5(1) or s 5(2), the complainant must give to the person who will be the respondent written notice that the complainant proposes to make the complaint, together with such description as the complainant is reasonably able to give of:

1. the remedy the complainant proposes to seek; and
2. the evidence on which the complainant proposes to rely.

251 Regulation 6(3) provides that a complaint under s 5(1) or s 5(2) must be accompanied by proof that notice has been given as required under this regulation.

252 Having accepted a building service complaint, the Building Commissioner is then required to cause an investigation to be carried out and, after having regard to any report given under s 10, may refer the complaint to the Tribunal for it to deal with under, inter alia, s 38 (s 3, s 9(1) and s 11(1)). A 'regulated building service' is defined in s 3 and includes a building service carried out by a registered builder. A 'building service' is defined in s 3 and includes building work as defined in the Building Act 2011 (WA) (Building Act). 'Building work' as defined in the Building Act includes the construction, erection, assembly or placement of a building or an incidental structure.

253 On 7 March 2012, a notice of proposed complaint notified the respondent that the applicant had a complaint under the BS(CRA) Act in respect of Tyne Square (Notice of Proposed Complaint), following which a complaint dated 23 March 2012 was lodged at the Building Commission (Complaint). On 20 April 2012, the Building Commission referred the application to the Tribunal.

254 The Notice of Proposed Complaint is in substantial compliance with reg 6 of the BS(CRA) Regulations. The nature of the complaint falls within s 5. The matter was validly transferred to this Tribunal pursuant to s 11(1)(d).

255 The Tribunal finds it has jurisdiction to determine this application.

Does the Tribunal have power to grant the remedies sought?

256 The Tribunal's powers upon referral to it of a building service complaint are set out in s 38(1), including in the following terms:

1. If the Building Commissioner refers a building service complaint to the State Administrative Tribunal, the Tribunal may -
   1. if the Tribunal is satisfied that the regulated building service that is the subject of the building service complaint has not been carried out in a proper and proficient manner or is faulty or unsatisfactory, deal with the building service complaint by making a building remedy order; or
   2. otherwise, decline to make a building remedy order.

257 A 'building remedy order' is defined in s 36(1) as follows:

1. A building remedy order consists of one of the following -
   1. an order that a person who carried out a regulated building service remedy the building service as specified in the order;
   2. an order that a person who carried out a regulated building service pay to an aggrieved person such costs of remedying the building service as the Building Commissioner or State Administrative Tribunal, as the case requires, considers reasonable and specifies in the order;

(c) an order that a person who carried out a regulated building service pay to an aggrieved person a sum of money specified in the order to compensate the aggrieved person for the failure to carry out the building service in a proper and proficient manner or for faulty or unsatisfactory building work.

258 The Notice of Proposed Complaint stated that a number of defects had become apparent at Tyne Square, which were summarised as:

1. water ingress to the lift pit which has damaged the lift; and
2. water ingress to the basement carpark and, in particular, to the low-lying parts of the basement carpark comprising the switchboard room, the transformer room, the lift pit, store rooms and the underfloor ducting.

1. an interim order to be made by the Building Commissioner immediately requiring the respondent to undertake all appropriate preventative measures so as to avoid any further water ingress occurring to the switchboard room, the transformer room, the lift pit and all underfloor ducting in the basement, pending performance of remedial works to address the underlying cause of the water ingress; and
2. a building remedy order pursuant to s 36(1)(a) or s 36(1)(b).

(The applicant sought to correct the typographical error whereby s 37 was referred to at the hearing: T:288; 12.10.12).

259 The Complaint described the complaint as being:

Water ingress to the lift pit has damaged the lift and water ingress to the basement carpark and associated basement areas as described in the Notice of Proposed Complaint.

260 The remedy then sought was rectification and, at the directions hearings on 15 May 2012, the programming orders made included that the applicant seeks an order that the respondent remedy the building service.

261 However, during the hearing on 12 October 2012, the applicant sought leave to amend the Notice of Proposed Complaint to also seek a building remedy order pursuant to s 36(1)(c) requiring the respondent to pay compensation of $63,552 (T:288; 12.10.12) in respect of interim remedial works arising from the respondent's failure to carry out the building service in a proper and proficient manner, or for faulty or unsatisfactory work already undertaken by the applicant in the meantime.

262 The Tribunal then granted leave for the applicant to amend its application to also seek compensation of $63,552 under s 36(1)(c), being satisfied that there was no prejudice to the respondent (T:339; 12.10.12 - note that the parties consented in writing to the transcript in this respect being correct to reflect this, as this is what was, in fact, said during the hearing). While the Tribunal does not have the power to add items of complaint to a complaint transferred to it by the Building Commission, the Tribunal may do whatever is necessary for the speedy and fair conduct of the proceeding (s 34(1) of the SAT Act) and, to allow the applicant to also seek a remedy, under s 36(1)(c), amounted to a necessary clarification of the complaint transferred to the Tribunal from the Building Commission.

263 The amount in paragraph 8 of Mr Ullner's first supplementary statement dated 4 October 2012 at Exhibit B1(a) refers to $71,794. The reason for the difference was not explained, nor was leave sought to amend the applicant's claim to seek compensation of $71,794. However, what was clarified was that the amount of compensation claimed by the applicant, to that point, only included the costs incurred with Concrete Waterproofing (T:75 and 76; 08.10.12).

264 The Tribunal then also granted leave on 6 December 2012 for the sum to be amended to $76,477 (T:394; 06.12.12). An invoice for the interim remedial work in question had inadvertently not previously been provided. The Tribunal was again satisfied that there was no prejudice to the respondent. This was in respect of one invoice, no 1395 dated 20 September 2012, issued by Eltech Services Pty Ltd, which is at Exhibit X.

265 Thus, what the applicant ultimately sought was a building remedy order, under s 36(1)(a), that the respondent remedy the basement carpark in accordance with the remediation option 1 of Exhibit M and that the respondent pay the applicant compensation under s 36(1)(c) in the sum of $76,477 for interim remedial works already undertaken by the applicant.

266 As to whether the Tribunal may grant more than one building remedy order in respect of a regulated building service that has not been carried out in a proper and proficient manner or is faulty or unsatisfactory, the Tribunal considered this issue in Atkinson and Rio Vista Pty Ltd trading as Freedom Pools and Spas [2012] WASAT 116 (Rio Vista). In Rio Vista, at [32], the Tribunal found that a pool had been built too low, but held that it could not make an order under both s 36(1)(a) that the pool be rectified by the respondent and s 36(1)(c) that the respondent pay a third party to fix landscaping (that had been ruined by the pool flooding), because the remedies in s 36(1) are alternatives and cannot be ordered in combination with each other. Leave to appeal was recently granted by the Tribunal in application CC 1447 of 2012, but no final hearing has yet been set down.

267 It is clear from the natural and ordinary meaning of the words of s 36(1) that the types of remedial responses that may constitute a building remedy order are requiring the respondent:

1. to rectify the works;
2. to pay an amount for a third party to rectify the works; or

1. to pay compensation for the failure to have carried out the works satisfactorily.

268 The respondent contended that a building remedy consists of one of these remedies, by reason that the first sentence of s 36(1) is that a 'building remedy order consists of one of the following ...'. The Tribunal does not accept this submission as it is not a complete answer to the issue in question.

269 Both s 38(1) and s 36(1) are expressed in the singular.

270 However, it is a principle of statutory interpretation that words in the singular number include the plural and words in the plural number include the singular (s 10(c) of the Interpretation Act 1984 (WA)), and the BS(CRA) Act must be interpreted accordingly. Therefore, reference in s 38(1) to 'building remedy order' may also mean 'building remedy orders'.

271 Further, a principal purpose of the BS(CRA) Act is to provide a system for dealing with complaints about building services (page 1 of the BS(CRA) Act), which may involve determination by the Tribunal (s 11). An interpretation of s 38(1) and s 36(1) must have regard to that purpose so that the Tribunal is able to resolve the whole of a complaint. In a complex complaint, having to choose one remedy when there are various types of damage, all of which flow from the poor workmanship in question, artificially limits the Tribunal's capacity to resolve the whole of a complaint.

272 Accordingly, and with great respect, the Tribunal considers that the Rio Vista case was wrongly decided, and finds that it has the power, in this application, to grant building remedy orders under s 36(1)(a) and s 36(1)(c).

273 While not strictly relevant, it is noteworthy that such an interpretation does not conflict with the fundamental common law principle that inconsistent remedies are impermissible, which is explained, for example, by Lord Nicholls in Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] 1 AC 514.

274 In terms of whether the Tribunal may make an order that the respondent pay a sum of money to compensate the applicant for interim remedial works already undertaken at the direction of the applicant, ordinarily an applicant would seek an order under s 36(1)(b) if it was proposed that a third party was to rectify the works, which this applicant originally, in fact, did. The amount ordered is typically an estimate based on quotes. However, between the time the Notice of Complaint was served and the hearing, the applicant had proceeded to have certain works the subject of this Complaint urgently rectified by a third party and therefore now seeks that it be compensated for the actual amount of money paid to third parties.

275 While, at page 19, the Explanatory Memorandum to the Building Services (Complaint Resolution and Administration) Bill 2010 (WA) (Explanatory Memorandum) gives the example of a neighbour seeking compensation under s 36(1)(c) for consequential damage without the poor workmanship being remedied, the Tribunal considers that the ordinary and natural meaning of the term 'compensation' in s 36(1)(c) is wide enough to also cover other circumstances, such as where the applicant seeks to be compensated for the actual amount of money paid to third parties to rectify the poor workmanship in question.

276 The Tribunal finds that it has the power to grant an award of money under s 36(1)(c) in respect of interim remedial works already undertaken at the direction of the applicant.

How are relevant standards of workmanship determined?

277 For liability to arise under s 38(1)(a), the applicant must establish that a building service has not been carried out in a proper and proficient manner, or is faulty or unsatisfactory.

278 This is often summarised as involving poor workmanship, although that expression does not accurately capture the breadth of the provision and, of course, it is the words of the legislation that are relevant.

279 The meaning of the words in s 38(1) is a question of statutory interpretation. Cases dealing with the BS(CRA) Act and the predecessor of the BS(CRA) Act may be of assistance in applying the provision in the circumstances of a particular dispute. Principles within the common law may also provide some assistance, by way of analogy, in understanding the application of the provisions of the statute. However, the task is one of statutory interpretation, and any contentions which reach into the common law should be clearly articulated as such.

280 There are various considerations that may be relevant in determining whether a building service has not been carried out in a proper and proficient manner, or is faulty or unsatisfactory, including the following.

1. In some cases, the nature of the alleged defect itself may be such as to indicate, or even establish, liability.
2. Expert evidence may be relevant. The usefulness of such evidence will depend on the circumstances of each case.
3. The contract itself may inform considerations of allegations of poor workmanship. There is no need for there to be a contractual relationship between the applicant and respondent in order for the applicant to be entitled to a building remedy order against the respondent. This is clear from the ordinary and natural meaning of s 38(1), and is confirmed in the Explanatory Memorandum (at page 10). Further, merely establishing a breach of contract would not, of itself, necessarily establish liability under the BS(CRA) Act. Similarly, merely establishing the absence of a breach of contract may not necessarily be an answer to an allegation of liability under the BS(CRA) Act. However, the building contract may nevertheless be relevant, because it may assist in identifying what a builder was required to have done.
4. Australian Standards or manufacturers' recommendations may inform considerations of allegations of poor workmanship.
5. The building regulations in place at the time the contract was performed may be relevant.

In the circumstances of the Contract, the relevant building regulations in place at the time the contract was performed, was the Building Regulations 1989 (WA) (1989 Regulations).

Regulation 5 of the 1989 Regulations provides that:

(1) Subject to these regulations, the Building Code applies to and in relation to any building that can be classified according to use under Part A3 of Volume One of the Building Code and to any work referred to in Part XV of the Act and in the Building Code.

(2) Any alteration, addition, restoration or repair to a building shall conform with these regulations but where the local government is of the opinion that any such work consists only of minor work and does not adversely affect the safety of persons accommodated in or resorting to a building or property in or in the vicinity of a building the local government may determine that the Building Code does not apply in relation to such work and that the work shall conform to only such of the provisions of the Building Code as are specified by the local government.

Regulation 10 of the 1989 Regulations provides that:

(1) Every builder intending to construct a building or alter, add to, repair or underpin, demolish or remove an existing building shall before commencing ­

(a) that construction, alteration, addition, repair or underpinning, demolition or removal; or

(b) any earthworks necessary for, or incidental to, that construction, alteration, addition, repair or underpinning, demolition or removal,

make written application to the local government for a licence to commence that work.

281 The applicant submitted that the legislative and regulatory framework in which the Building Code sits (before repeal of the Builders Registration Act 1939 (WA) and the Builders Registration Act 2011 (WA)) was considered by the Western Australian Court of Appeal in Re Griffiths; Ex Parte Homestyle Pty Ltd [2005] WASCA 103 at [39]. This case, which involved administrative law proceedings and different building issues, provides useful guidance in these proceedings.

282 The effect of the 1989 Regulations is to impose on the person who holds the licence responsibility for ensuring compliance with, inter alia, the Building Code.

283 A licence issued under this regime may also require the licensee to comply with Australian Standards and other conditions. The requirement to comply with any such Australian Standards and other conditions may provide the basis of a defence to allegations of poor workmanship, but is not an absolute defence.

284 The Building Code is defined in reg 3(1) of the BS(CRA) Regulations to mean the latest edition of the Building Code published from time to time by, or on behalf of, the Australian Building Codes Board, as amended from time to time, but not including explanatory information published with that Building Code.

285 For the purposes of these proceedings, the relevant versions of the Building Code are the Building Code of Australia 2006, which was adopted on 1 May 2006 (BCA 2006, page 825), and the Building Code of Australia 2007, which was adopted on 1 May 2007 (BCA 2007, page 832). It was the Building Code of Australia 2006 which was initially applicable. From 1 May 2007, it was the Building Code of Australia 2007 which was applicable.

286 While there are differences between these two versions of the Building Code, there is no relevant difference in respect of any issue the subject of these proceedings, and the Tribunal therefore simply refers to these versions of the Building Code of Australia as the 'Building Code' throughout this document.

287 It was the respondent to whom the local government granted a licence to build Tyne Square - firstly, a licence dated 4 April 2007 for 'forward works' in respect of a building assessed as being a Class 2 building, and then a licence dated 28 August 2007 for work in respect of a building subsequently assessed as being a Class 2, 6 and 7a building, which excluded building works covered in the 4 April 2007 licence.

288 The Tribunal finds that the respondent was required to ensure compliance with the Building Code for the whole of the construction of Tyne Square.

Does construction of the basement with relief vents comply with the Building Code?

289 The basement is classified as a Class 7a building.

290 The classes of buildings are defined in Pt A3 of the Building Code and include that a Class 7 building is a building which is:

1. Class 7a - a carpark; or
2. Class 7b - for storage or display of goods or produce for sale by wholesale.

291 A carpark is defined, in the definition section of the Building Code, to mean a building that is used for the parking of motor vehicles but is neither a private garage nor used for the servicing of vehicles, other than washing, cleaning or polishing.

292 The basement of Tyne Square is used for car parking by residents in apartment buildings. Neither party contended that the carpark was a private garage or a garage.

293 The basement of Tyne Square has multiple other functions in addition to car parking. Neither party contended that the classification of the basement as 'Class 7a' was wrong, and, indeed, car parking does appear to be its dominant purpose.

294 The Building Code sets out objectives and functional statements which provide guidance. The Building Code also sets out performance requirements. There are two categories of building solutions which will comply with the Building Code if satisfied; the first is termed the 'Deemed-to-Satisfy Provisions', and the second is termed the 'Alternative solutions'. An alternative solution must be assessed using the assessment methods specified in the Building Code at A0.8(a).

295 Relevantly, FP1.5 of the performance requirements in relation to damp and weatherproofing provides that:

Moisture from the ground must be prevented from causing -

(a) undue dampness or deterioration of building elements; and

(b) unhealthy or dangerous conditions or loss of amenity for occupants.

(a) a Class 7 or 8 building where in the particular case there is no necessity for compliance ; and

(b) a garage, tool shed, sanitary compartment, or the like, forming part of a building used for other purposes,

296 The reference to Class 7 in the limitation, by reason of its definition, includes Class 7a.

297 There is no definition of 'no necessity for compliance' in FP1.5.

298 The respondent contended principally that it was not responsible for any non-compliance. The respondent also contended:

1. through Mr Psaros in cross-examination, in effect, that FP1.5 did not apply because, in the circumstances of Tyne Square, there was no necessity for compliance (T:115; 11.10.12); and
2. through Mr Psaros (T:347; 12.10.12) and Mr Dixon at Exhibit B12, page 17, that the Building Code has been complied with.

299 The applicant contended that the respondent had to comply with FP1.5 (T:441; 07.12.12). The applicant's position was that, in constructing the relief vents, the respondent did not do so. The applicant also effectively contended, through Mr Machell at paragraph 5.14 of his 2 October 2012 report, that there is no applicable deemed-to-satisfy provision.

300 There is also the joint opinion of Mr Machell and Mr Pike dated 14 November 2012. A typed version, unsigned, of the joint statement of Mr Machell and Mr Pike of 14 November 2012 is set out below:

The performance requirement FP1.5 of the BCA is applicable to the basement class 7(A) carpark of 150 Newcastle St. The limitation noted in FP1.5 as it refers to class 7 buildings, should not apply, as in our opinion, there is a necessity for compliance with FP1.5 of the BCA.

There is no documentary evidence that we have sighted that the solution to install relief drains in the floor of the basement of 150 Newcastle St is an alternative solution that has been assessed in accordance with AO.9 of the BCA so that the performance requirements had been met.

301 The Tribunal accepts the joint opinion of Mr Machell and Mr Pike, for what it is worth, but does not rely on it to determine whether the limitation in FP1.5 applies.

302 The Tribunal finds that this is not a case where there was 'no necessity for compliance'. It cannot be said that it was not necessary to keep moisture from the ground from causing undue dampness or deterioration of building elements, and unhealthy or dangerous conditions or loss of amenity for occupants. Even though the applicant has not established that water from the relief vents, as distinct from water from other points of ingress, has or might find its way into the transformer room and switchboard room, the danger of slipping and the potential deterioration of elements in the carpark through increased humidity, in the way described by Mr Machell (at T:417; 06.12.12), by reason of water ingress from the relief vents, means that there is a need for compliance. Also, stepping out of cars into puddles of water, as Mr Machell described it, amounts to a loss of amenity to the residents of Tyne Square during periods of flooding.

303 There was no evidence of water ingress to the ventilation duct situated under the basement slab and so the Tribunal does not consider this additional reason provided by Mr Airey, in his witness statement at paragraph 30, as a reason for compliance in the circumstances of this case.

304 Accordingly, the Tribunal finds that the basement was required to comply with FP1.5 of the performance requirements.

305 The deemed-to-satisfy provisions for F1 damp and weatherproofing provides that:

(a) Performance Requirement FP1.4, for the prevention of the penetration of water through external walls, must be complied with.

There are no Deemed-to-Satisfy Provisions for this Performance Requirement in respect of external walls.

SA F1.0(b)

(b) Where a Building Solution is proposed to comply with the Deemed-to-Satisfy Provisions, Performance Requirements FP1.1 to FP1.3 and FP1.5 to FP1.7 are satisfied by complying with F1.1 to F1.13.

(c) Where a Building Solution is proposed as an Alternative Solution to the Deemed-to-Satisfy Provisions of F1.1 to F1.13, the relevant Performance Requirements must be determined in accordance with A0.10.

F1.10 Damp-proofing of floors on the ground

SA F1.10

If a floor of a room is laid on the ground or on fill, moisture from the ground must be prevented from reaching the upper surface of the floor and adjacent walls by the insertion of a vapour barrier in accordance with AS 2870, except damp-proofing need not be provided if-

(a) weatherproofing is not required; or

(b) the floor is the base of a stair, lift or similar shaft which is adequately drained by gravitation or mechanical means.

307 The Tribunal finds that the deemed-to-satisfy provisions are not satisfied because F1.10 is applicable and F1.10 is not satisfied in the circumstances of the basement. The floor of the basement carpark is not the base of a stair, lift or similar shaft which is adequately drained by gravitation or mechanical means. Further, it was not contended by the respondent that AS 2870, as specified in the 28 August 2007 licence, was not a requirement or that there are no weatherproofing requirements in relation to the basement carpark. Residential standards may be, and are, applied to commercial buildings from time to time.

308 There is no evidence before the Tribunal of the formulation of any alternative solution which complies with FP1.5 of the performance requirements.

309 The joint opinion of Mr Machell and Mr Pike dated 14 November 2012 confirms that there is no documentary evidence they have sighted that the solution to install relief vents in the floor of the basement is an alternative solution that has been assessed in accordance with A0.9 of the Building Code.

310 The Tribunal finds that the method of waterproofing including relief vents was not ever assessed in accordance with A0.9 of the Building Code.

311 Accordingly, the Tribunal finds that, as a consequence of construction of the basement with relief vents that punctured the vapour barrier, the basement does not comply with the Building Code.

Does construction of the basement with relief vents constitute poor workmanship by the respondent?

312 The respondent submitted that, while it was not entitled to blindly follow the Contract, it was entitled to rely on consultants' advice, which it did do in inserting the relief vents.

313 In the particular circumstances of this case, the Tribunal does not accept this submission.

314 It is well established that where a builder designs and constructs a building, compliance with plans and specifications in constructing a building may not prevent a conclusion that building work is nevertheless unsatisfactory, even if the builder has relied upon specialist engineering advice: see Re McGuire; ex parte Bradshaw (Unreported, Supreme Court, 30 April 1986, Lib No 6260A-C and Henry Michael Lyons & Ors v Jandon Constructions (A Firm) & Ors [1998] WASC. In such circumstances, an important question is likely to be whether the builder has promised to produce a result or merely do specific work; see Cable Limited and Hutcherson Bros Pty Limited (1969) 123 CLR 143; [1969] HCA 37 at [10]; Owners of Strata Plan no 47111 v Pyramid Constructions Pty Ltd [2012] WASAT 79.

315 In the circumstances of this case, the respondent did not design the relief vents and the relief vents were constructed in accordance with the Contract.

316 However, the relief vents were a solution proposed to address hydrostatic uplift pressure to prevent cracking of a 100 millimetre slab, necessitated by the reduction of the slab from 200 millimetres to 100 millimetres thick. It appears that they are effective to achieve their objective. The problem is that the relief vents perform their function by allowing water ingress to the basement.

317 That the concept of the relief vents only addresses structural issues without consideration of compliance with other provisions in the Building Code was, or ought to have been, immediately apparent to Mr Psaros. The vapour barrier was intended, inter alia, to keep water out. Puncturing it resulted in it no longer being effective to achieve its objective in this regard.

318 Relying on consultants whose objective is to achieve other aspects of design and who are not responsible for waterproofing in order to ensure that the waterproofing is, in all respects, satisfactory amounts to an error of judgment by Mr Psaros as the controlling mind of the respondent.

319 Accordingly, the Tribunal finds that the puncturing of the vapour barrier by the respondent in the construction of the relief vents had the consequence that the building service comprising the waterproofing in the construction of the basement was not carried out in a proper or proficient manner within the meaning of s 38(1). Further, the Tribunal finds that the puncturing of the vapour barrier by the respondent rendered the vapour membrane faulty or unsatisfactory within the meaning of s 38(1).

320 In reaching this particular conclusion, the Tribunal has relied principally on the nature of the alleged defect, the expert evidence (including as to what would have been immediately apparent to a competent builder), the fact that the respondent was responsible under the Contract for the implementation and performance of the waterproofing of the basement, and the failure to comply with the Building Code.

321 If the basement was constructed under the 4 April 2007 licence instead of the 28 April 2007 licence, or a combination of both licences, the Tribunal's finding would have been the same.

322 There is also a second basis upon which the respondent is responsible under s 38(1) for constructing the basement with relief vents.

323 Clause 14.1 of the Contract imposed on the respondent a contractual obligation to comply with the requirements of regulations, inter alia, and to notify the superintendent in writing, specifying any variance effectively between the Contract and such requirements, as soon as discovering a variance.

324 Such an obligation to warn also exists in the common law as an aspect of a duty to exercise reasonable skill and care in the performance of construction work. This obligation to warn recognises that the end product of building work will be worthless or will require serious modification if it is carried out in the manner contemplated by the contract: see Atkin Chambers, Hudson's Building and Engineering Contracts (Sweet & Maxwell, 12th ed, 2010) at paragraph 14.17.

325 The Tribunal finds that, at least by 2 May 2007, the respondent was required to proceed to warn of the non-compliance or risk of non-compliance with FP1.5 of the Building Code and that it did not do so.

326 The appointment of consultants did not entitle the respondent to not take such action.

327 The Cardno Saraceni structural certification for the structural adequacy of structural elements dated 24 March 2009 does not purport to address moisture requirements.

328 The Tribunal finds that, in the circumstances of this case, the contractual requirement to warn forms part of the building service under s 38(1), as it is necessary preparatory work involved in the builder's work.

329 Accordingly, the Tribunal also finds that the failure to provide such notification under clause 14.1 of the Contract amounted to a failure to carry out the building service in a proper and proficient way within the meaning of s 38(1).

330 Regarding whether the grading of the basement floor around the relief vents is adequate, the evidence of Mr Davenport and Mr Dixon was to the effect that an additional problem is that, while water from the relief vents was designed to drain to a sump, there are 'flat spots' in the slab, so that the water pools instead of adequately grading to the relevant point to be pumped out (T:21; 11.10.12). However, it was not clear exactly where this occurred (T:66 and 67; 11.10.12), nor the extent to which a grade fall from FFL 9.8 to FFL 9.75 to the sump is adequate. Therefore, the applicant has not established that the grade of the basement around the relief vents was faulty or unsatisfactory.

Does any other aspect of the waterproofing constitute poor workmanship?

331 The reasons of the Tribunal so far have proceeded on the assumption, favourable to the respondent, that, on a proper construction of the contractual documents comprising the Contract, all the respondent was contractually required to install by way of waterproofing was a vapour barrier under the basement.

332 This assumption reflects what is in condition 7 in the 28 August 2007 licence.

333 It was not necessary, for the purpose of the findings relating to the relief vents, to determine the nature of the contractual obligation because, whatever type of waterproofing was contractually required under the basement, it was fundamentally compromised by the relief vents. The issue is of more significance in considering whether any other aspect of the waterproofing of Tyne Square constituted poor workmanship.

334 There was disagreement between the parties as to exactly what the respondent was contractually required to install under the basement floor and the Tribunal will now address this point further.

335 The respondent contended, principally through Mr Dash, that the Contract required the installation of a 200 micron thick polyethylene vapour barrier and that he personally witnessed that a 200 micron polyethylene underlay was installed to the slabs as per S001 note 1 under the concrete section and page 57 of the Specifications. Mr Psaros was also extensively cross-examined on this (T:350-354; 12.10.12).

336 The applicant contended, principally through Mr Machell, in effect, that the Contract required something more than a 200 micron thick polyethylene vapour barrier as the waterproofing underneath the basement.

337 However, Mr Machell at paragraph 6.1.15 of his 2 October 2012 report, also acknowledged that the waterproofing requirements 'may at worst be ambiguous ...'. Similarly, Mr Airey said, when he drilled holes into the slab to determine what had been done, he was not sure what he would find because 'the documentation is, to some extent, unclear' (T:25; 11.10.12).

338 Of course, what is required under the Contract is a question of law for the Tribunal.

339 Clause 8 of the standard terms and conditions provides that the several documents forming part of the Contract are to be taken as mutually explanatory of one another, rather than specifying which is to take priority.

340 In the Plans of the concrete details SEG S201 revision 7 and S202 revision 6, a dashed line shows 'waterproof membrane' under the basement.

341 The Specifications dated April 2007 provide certain, further details. This includes, at page 57 of the Specifications, a 200 micron polyethylene underlay to be installed to 'slabs on ground.' It also includes, at page 57 of the Specifications, a number of waterproof membrane systems.

342 Further details of the sheet membrane waterproof system are set out at pages 96 and 97 of the Specifications under 'Tanking', including specific locations where that system is to be installed. These locations do not include under the basement floor.

343 The terms 'waterproofing' and 'tanking' are not defined in the Contract.

344 The term 'tanking' was used in a number of ways during the hearing and in the material in the exhibits. As Mr Airey's explanation of option 1 draws out, an exclusion of water by a concrete structure itself is not strictly 'tanking' (T:29; 11.10.12).

345 Mr Machell explained, at paragraph 6.1.14, inter alia, that 'tanking' usually refers to the creation of a waterproof tank; in other words, the provision of a suitable waterproof barrier to the surface of a part or parts of a structure of a building so as to prevent the penetration of water at that location.

346 Mr Lucchesi and Mr Airey also agreed in their joint statement, dated 25 September 2012 at Exhibit J, inter alia, that:

Agree that the basement slab is constructed in accordance with structural Engineers drawings issued for construction and approved Council building license drawings which are consistent so far as thickness is concerned**.** There is no 'waterproof membrane' present but there is a 200 micron thick polyethylene vapour barrier.

347 Mr Airey indicated that a vapour barrier is not a 'conventional variety' of waterproofing (T:25 and 26; 11.10.12).

348 The Tribunal accepts Mr Lucchesi's, Mr Airey's and Mr Machell's evidence.

349 One argument, which was essentially put by Mr Psaros during cross-examination is that the more specific provisions prevail, and the part of the Contract which provides the further details of the 'waterproofing' depicted in the Plans is at page 57 of the Specifications where a vapour barrier is specified (T:350 and 351; 12.10.12).

350 The other argument is that the 'underlay' in the Specifications should not have been selected as it does not appear in the Plans, and the notation 'waterproof membrane' in the Plans required the respondent to have selected one of the possible types of waterproofing set out under 'Water Proof Membrane Systems'.

351 Again, in interpreting contracts, it is the objective intention of the parties as expressed in the document that is to be determined: see Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 (Codelfa); Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45.

352 The Tribunal considers that a proper construction of the Contract is that the 'underlay' in the Specifications should not have been selected as it does not appear in the Plans, and the notation 'waterproof membrane' in the Plans required the respondent to have selected one of the possible types of waterproofing set out under 'Water Proof Membrane Systems.' On the face of the documents, an 'underlay' is something other than waterproofing, whereas 'waterproof membrane' corresponds to 'Water Proof Membrane Systems.'

353 Accordingly, the Tribunal finds that installation of the vapour barrier, instead of one of the possible types of waterproofing set out under 'Water Proof Membrane Systems' in the Specifications, amounted to a breach of the Contract.

354 Further, the Tribunal finds that in the circumstances of Tyne Square, this breach amounted to a failure to carry out the building services in a proper or proficient manner within the meaning of s 38(1), in that no conventional form of waterproofing has been installed at all.

355 Neither party contended that the Contract was ambiguous in the sense referred to in Codelfa, nor that extrinsic evidence should be taken into account in interpreting the Contract. The Tribunal does not regard the Contract as ambiguous. However, it should be noted that, if the terms waterproof or tanking membrane were considered to be ambiguous, in interpreting the Contract, the Tribunal would then have taken into account the fact that the basement is underground and the historical maximum height of the groundwater in that location is RL 10.5 AHD, as this is part of the surrounding circumstances of the Contract but not the part of the 12 April 2007 Email that stated the respondent was to 'lay heavy duty polyethylene underlay under slabs on fill with taped joints', as that is evidence of subjective intention.

356 In addition, whether or not there was a breach of the Contract, the Tribunal also finds that the vapour barrier is faulty and unsatisfactory within the meaning of s 38(1) for the following reasons.

357 Despite the position taken by the respondent that it was simply required to build Tyne Square, the respondent was, in fact, responsible under the Contract for proposing the type of waterproof membrane to waterproof the basement slab and walls, as well as for the performance of that waterproofing. This means that the suitability and adequacy of the device selected, and then implemented, by the respondent to exclude water underneath the basement forms part of the respondent's building work.

358 In terms of whether a vapour barrier is adequate and acceptable as a device to exclude water underneath the slab in the circumstances of Tyne Square, Mr Dixon explained that a vapour barrier is there firstly to ensure that when the concrete is poured, the concrete can develop its 28 day compressive strength (T:25; 11.10.12). Further, as Mr Dixon and Mr Airey explained during the concurrent evidence, it is not, however, a conventional form of waterproofing (T:25 and 26; 11.10.12). As Mr Machell said, it is in the nature of a damp-proof membrane (T:400; 06.12.12) and, as Mr Dixon said, it is only 'sort of waterproof' (T:25; 11.10.12). And, as Mr Airey also later explained, a vapour barrier would be acceptable if the intention was to exclude water by a structural solution such as that which was originally envisaged but then abandoned (T:59; 11.10.12). The Tribunal accepts this expert evidence.

359 Accordingly, the Tribunal finds that the waterproofing of the slab was inadequate. Whether or not the vapour barrier has itself yet failed, it is an inadequate and unacceptable device to exclude water where there is a risk that regional groundwater could rise up to RL 10.5 AHD at a certain point or points in time.

360 The fact that, potentially for a number of reasons, groundwater has only risen in the immediate vicinity of the northern part of Tyne Square and highlighted this inadequacy, which might otherwise may never have been highlighted, does not itself prevent a conclusion of poor workmanship.

361 At paragraph 75.3 of his witness statement, Mr Psaros said that while all control joints have been constructed according to plan, it now appears that the extent of designed waterstops is inadequate.

362 Mr Psaros was cross-examined extensively about this.

363 Mr Psaros' evidence around this issue was inconsistent. For example, he suggests in his witness statement that the engineers are responsible for a lack of designed waterstops, but then (albeit in relation to the joint between the wall and basement floor as distinct from a control joint), in cross-examination, said:

The structural engineering design could not have been waterstopped in the locations that was done because it was an untanked version. It had to leak. That's what was selected. The junction between the wall and floor does not show any waterstops, it was meant to leak. (T:356, 12.10.12)

364 In the joint answers to further questions dated 20 October 2012 at Exhibit K in response to question 4 that '[i]f a waterproof membrane had been applied to the slab on ground and the walls, consistent with the tanking requirements of the specification at item 303 (page 248 of volume 1 of the hearing bundle), would waterstops have been necessary to exclude water ingress, as described at paragraph 75.3 of the statement of Danny Psaros?', Mr Airey, Mr Martens and Mr Sebbes, for the applicant, and Mr Lundorf for, the respondent, answered 'no' in an unqualified way.

365 The Tribunal finds that the weight of expert opinion is effectively that conventional waterproofing of the kind specified in the Contract would have been effective to prevent water ingress in the circumstances of Tyne Square, without waterstops at the joints, if it had been applied to the slab on ground as well as the walls.

366 Further, the Tribunal rejects the notion that in the circumstances of Tyne Square, one would not expect to see anything more than a vapour barrier because the slab was designed to leak (T:26; 11.10.12). As was subsequently agreed to by the respondent's experts, the slab was not designed to leak indiscriminately; water was permitted ingress only through relief vents to relieve hydrostatic pressure where necessary (T:26 and 27; 11.10.12).

367 Mr Psaros' evidence to the effect that a conventional form of waterproofing could not be utilised because 'otherwise there would have been uplift' (at T:352; 12.10.12) misses the point. Given the approach taken by the respondent in installing the relief vents, presumably any conventional waterproofing installed, like the vapour barrier, would have had holes put through it to accommodate the relief vents.

368 The Tribunal considers that the qualification of Mr Davenport in response to question 4 of the joint answers to further questions dated 20 October 2012 at Exhibit K (that 'no' assumes that the thickness of the slab was appropriate for a tanked condition) similarly misses the point.

369 Nor does the Tribunal accept Mr Psaros' evidence to the effect that a conventional form of waterproofing could not be utilised because 'you cannot put a membrane on a basement slab and weld' (T:354; 12.10.12), in that it is 'impossible to weld onto sand' (T:355; 12.10.12), because it was said in the context of cross-examination about waterproofing of the walls and could not be regarded as a complete answer. Further the Specifications provide that waterproofing could be welded or fixed and lapped with an appropriate adhesive.

370 Mr Airey said that the retaining walls are all AFS walls. He explained that there are masonry walls, but they are partition walls around the storerooms (T:46; 11.10.12).

371 Mr Airey's evidence was also that the AFS system utilised in the walls of the basement is essentially waterproof but difficult to handle if 'waterproofness' (Exhibit B6, page 14 paragraph 36) is required at intersections of floor slabs which are also subject to water pressure. He stated further that while a poor choice because of the difficulty of achieving a join with a slab that is not subject to leakage in such circumstances, appropriate systems are available which require reinforcing above and below by the intersection of the slab with the wall by drilling and inserting reinforcing rods above and below a hydrotite expanding waterstop, glued initially onto the face of the AFS wall.

372 Mr Airey also said that because of the structure of an AFS wall, there is no intimate contact between the concrete of the wall and the concrete of the slab - a pressed metal channel is fixed to the slab first and the AFS wall is then placed in position over the channel. He said that this means that if water enters between the intersection of the slab and the wall, the channel is going to corrode. In his opinion, it is corroding now (T:45; 11.10.12).

374 Mr Dash said that a waterstop cannot be inserted at the junction of the AFS wall and the basement floor (T:433; 06.12.12).

375 The Tribunal notes the product diagram of an AFS wall at Exhibit O.

376 The Tribunal prefers Mr Airey's evidence because it is comprehensive.

377 The Tribunal finds that the failure to insert an external waterstop at the joint between the AFS wall and the basement floor, in the circumstances of Tyne Square, amounted to a failure by the respondent to carry out a building service in a proper and proficient manner within the meaning of s 38(1), in that a vapour barrier was selected as the device to exclude water, thereby rendering additional sealing of this joint necessary, and an external waterstop was not provided by the respondent.

378 In the 12 April 2007 Email, the respondent was to liaise with the waterproofing contractor to provide an external waterproof joint at the junction of the AFS walls and the footing of the slab. The applicant did not contend and has not established that this amounted to a term of the Contract or a direction under the Contract, which bound the respondent.

379 Nevertheless, as the Contract expressly states, the respondent was responsible for the performance of the waterproofing, including for omissions.

380 Regarding the waterproofing to wall surfaces, in the joint answers to further questions dated 20 October 2012 at Exhibit K, in response to question 3; namely:

Does the waterproofing to the retaining walls as referred to at paragraph 16 of the statement of Peter Dash, satisfy the requirements of the contract specification taking into account item 202 of the specification (page 208 of volume 1 of hearing bundle) and item 303 C of the specification (page 248 of volume 1 of the hearing bundle)[?]

all of the nine experts who participated in this expert conferral agreed that '[t]o answer this[,] clarification is needed as to the comments of Mr Dash at paragraphs 14 & 16 of his statement as different requirements apply in clause 303'.

381 In cross-examination, Mr Dash described the systems actually applied to be twofold. On the exterior of the northern wall adjacent to the stormwater soakwells, Mr Dash used a product, referred to by him as Cetco Liquid Boot, applied to the wall as an alternative product to Elastoseal Heavy Duty. In other areas of external wall, Mr Dash stated that a brush applied three coat bitumen emulsion was used (T:386; 12.10.12). In his expert report, Mr Machell provided evidence that a three coat sprayed product, Bitflex, was not suitable for waterproofing under hydrostatic pressure, but was suitable only for damp-proofing. The Tribunal notes that if the hearsay evidence of manufacturers' requirements had been substantiated and the product used had been Bitflex, that would not have been an adequate alternative. However, in further evidence, Mr Dash stated the product used was, in fact, Bit-Kote 3 and not Bitflex (T:427; 06.12.12). Therefore, the Tribunal considers Mr Machell's evidence regarding the unsuitability under hydrostatic pressure of Bitflex irrelevant. No evidence was provided as to whether or not Bit-Kote 3 would withstand hydrostatic pressure.

382 Accordingly, the applicant has not established that this aspect of the Contract has not been complied with by the respondent, nor that the respondent did not carry out this aspect of the waterproofing in a proper or proficient manner within the meaning of s 38(1).

383 Regarding entry through the cable entry point into the transformer room through the external wall, the photographic evidence shows this to be demonstrably leaking and completely unsealed. Water which reached the level of the cable duct connecting the transformer room trench to the switchboard room trench could then flow freely into the switchboard room trench.

384 No parts of the Contract, which are in evidence, specified that the cable entry and cable ducts had to be sealed.

385 The Tribunal finds that the applicant has not established that an express aspect of the Contract relating to waterproofing of the cable entry points and cable ducts of the transformer room and switchboard room has not been complied with by the respondent.

386 Also, the applicant has not established that water from the relief vents has flowed into the trenches from the basement floor when water ingressed through the relief vents. Nor has the applicant established that there is a risk that, if regional groundwater were to rise to RL 10.5 AHD, water from the relief vents could flow into the trenches from the basement floor. There is a slope upwards from the closest relief vents to the transformer room and switchboard room, and they are a considerable distance away.

387 However, it is an obvious and extreme example of poor workmanship by a builder to build a waterproof service room and then build large holes into that room through which cables are fed, without also resolving the sealing of those large holes.

388 Further, the applicant has established that water has ingressed the trenches in the transformer room and switchboard room through the joints between the basement floor and walls at the north and north-west perimeters.

389 In the circumstances of Tyne Square, the Tribunal accepts Mr Machell's opinion at paragraph 6.3 of his 2 October 2012 report that the failure of the builder to install waterstops at the joints between the basement floor and walls to prevent water ingress to these trenches amounts to faulty and unsatisfactory workmanship.

390 The Tribunal does not accept the respondent's submission that paragraph 6.3 is not easily reconciled with the nature of the applicant's case.

391 Accordingly, the Tribunal finds that the failure to seal the cable entry points and to install waterstops at the joints between the basement floor and walls amounted to failure to carry out a regulated building service in a proper or proficient manner and that the cable entry points and joints were faulty and unsatisfactory within the meaning of s 38(1).

392 The applicant seeks two orders, one of which is an order under s 36(1)(c) that the respondent pay to the applicant $76,477 compensation for the interim remedial work.

393 The Tribunal has a discretion under s 38(1) to make a building remedy order where it is satisfied that the regulated building service has not been carried out in a proper or proficient manner or is faulty or unsatisfactory.

394 The Tribunal considers that it is reasonable and appropriate to require the respondent to pay compensation in respect of costs incurred as a consequence of the relevant poor workmanship by the respondent.

395 The applicant has not claimed all costs incurred in ensuring all electrical areas within the basement are watertight, pending final resolution of this dispute. This is despite the provision of additional invoices within Exhibit H.

396 The Tribunal finds that the invoices at Exhibits H2 (minus $7,964 due to work mistakenly charged twice (T:5; 11.10.12)), H3, H5, H6, H7, and an amount of $12,925 in respect of the installation of pumps by Eltech Services Pty Ltd, included in the invoice at Exhibit X, read in conjunction with Mr Ullner's evidence, establish that the cost of $76,747, including GST, has been incurred by the applicant in undertaking the interim remedial steps.

397 The Tribunal is unclear as to the reason for the small difference between the amount claimed and these invoice amounts. In any event, the Tribunal notes s 83 of the SAT Act, which enables the Tribunal to correct a miscalculation of figures.

398 Further, the Tribunal also finds that the sum of $76,477, including GST, compensates the applicant within the meaning of s 36(1)(c), to the extent of the costs claimed, for the respondent's failure to waterproof:

1. the cable entry points, and joints, into the transformer room and switchboard room, as explained above; and
2. under the basement floor, as explained above (not including the puncturing of the vapour barrier to insert relief vents),

in a proper and proficient manner, or such that it is not faulty or unsatisfactory within the meaning of s 38(1)(a).

399 The failure to waterproof the cable entry points and joints into the transformer room and switchboard room, as explained above, enabled groundwater to ingress the trenches in the transformer room and switchboard room, thereby creating dangerous conditions.

400 The failure to waterproof under the basement floor, as explained above (again, not including the puncturing of the vapour barrier to insert relief vents), also created a risk that, if water were to rise up to RL 10.5 AHD, water may ingress the trenches in the transformer room and switchboard room from water flowing over the basement floor.

401 It may be that water has already also ingressed the trenches in the transformer room and switchboard room from water flowing over the basement floor (other than from the relief vents). Mr Airey gave evidence, which was effectively tested during concurrent evidence (T:24, 66 and 67; 11.10.12), that there are water marks up the walls to about 50 millimetres above floor level in the north-west corner of the basement. It is not clear exactly where these marks were and the applicant has not established, on the balance of probabilities, that water has already also ingressed the trenches in the transformer room and switchboard room from water flowing over the basement floor. Nevertheless, there clearly remains a risk that this also may occur in the future.

402 The interim remedial steps based on extensive expert advice and quotes carefully compiled by the applicant were taken to immediately redress the dangerous conditions and related potential problems, pending a final resolution.

403 The Tribunal does not accept the respondent's contention in paragraph 76.5 of Mr Psaros' witness statement that the interim remedial steps are unreasonable. There was an obvious imperative to ensure immediately that the transformer room and switchboard room were watertight, and the applicant did not regard any potential solution, which included managing water ingress to its basement, as satisfactory.

404 The applicant also seeks an order under s 36(1)(a) that the respondent remedy the basement carpark in accordance with the remediation option 1 of Exhibit M.

405 The Tribunal has a discretion under s 38(1) to make a building remedy order where it is satisfied that the building service has not been carried out in a proper or proficient manner or is faulty or unsatisfactory.

406 The Tribunal considers that it is reasonable and appropriate to require the respondent to remedy its poor workmanship in the manner contemplated by option 1 of Exhibit M for the following reasons.

407 The costs involved in respect of the three options are similar when viewed over the longer term.

408 Option 1 is, in fact, the only option that enables the punctures created by the relief vents to be fixed so that the mechanism to exclude water is effective, because sealing the relief vents will lead to cracking in the slab.

409 This would be sufficient to justify the order under s 36(1)(a) sought by the applicant.

410 It is also now not possible to address the inadequacy of the vapour barrier except by a structural solution.

411 When making an order under s 36(1)(a), the Tribunal does not ordinarily specify a method of rectification. However, this is only a practice, and the Tribunal may do so: see Brodun Construction and Love [2008] WASAT 174 at [42]. In the circumstances of Tyne Square, the Tribunal considers it appropriate to do so.

1. The respondent must pay the applicant $76,477 within 28 days of the date of this order.
2. The respondent is to remedy the ingress of water into the basement carpark at Tyne Square in accordance with option 1 of the Joint Expert Recommendations dated 10 October 2012 within six months of the date of this order or such further date as the Tribunal orders.
3. Compliance with order 2 is subject to completion of a duly certified design by a structural engineer and written agreement to the certified design by the applicant.
4. Compliance with order 2 may require some development of option 1 to ensure compliance with all relevant laws, regulations and requirements, including, for example, minimum height requirements. If this cannot be resolved by agreement between the parties, each party has liberty to apply on seven days' notice.
5. The respondent is to make good areas affected by the remedial work.

I certify that this and the preceding [412] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)

CITATION : OWNERS OF STRATA PLAN 52843 and PSAROS BUILDERS PTY LTD [2013] WASAT 46 (S)

Building Services (Complaint Resolution and Administration) Act 2011 (WA) ­ Application for costs ­ Principles to be applied

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 36(1), s 38(1) s 49

Legal Practitioners (State Administrative Tribunal) Report and Determination 2010

Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2010

Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2012

State Administrative Tribunal Act 2004 (WA), s 9, s 87, s 87(1), Pt 4 Div 5

The Owners of Strata Plan 52843 were successful in their complaint concerning water ingress into the basement car park of a mixed use development in Perth known as Tyne Square and sought costs against Psaros Builders Pty Ltd.

The Owners of Strata Plan 52843claimed that $219,758.12 was payable to them by Psaros Builders Pty Ltd.

The Tribunal reiterated the principles applicable to costs applications, including that the power to award costs under s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) represents a departure from the provisions for the award of costs under the SAT Act and that the initial predisposition against an award of costs has been removed. Of course, however, while s 87(1) of the State Administrative Tribunal Act 2004 (WA) requires that the provisions of s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) apply, s 49 should be construed in a manner which promotes the objectives and procedures of the Tribunal. These objectives would not be fostered by an approach that costs should follow the result as a general rule, but there will be cases in which it will be appropriate to exercise a discretion to enable the successful party to recover all costs which may be properly recovered in proceedings before the Tribunal.

The Tribunal also reiterated the kinds of considerations that may be relevant to the exercise of the Tribunal's broad discretion under s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA). The considerations referred to in previous cases are, however, not exhaustive.

The Tribunal concluded that in this case, the complexity of the dispute, the importance of the proceedings to the Owners of Strata Plan 52843, the necessary representation by lawyers and the considerable costs incurred, combined to create a circumstance in which the justice of the case pointed to the need for costs to be awarded. The remedy granted by the Tribunal would not be truly effective if costs could not be recovered.

The Tribunal emphasised that where the Tribunal does award costs, the Tribunal is concerned to meet its obligation to minimise the cost to the parties by ensuring that any costs awarded are proportionate to the nature of the proceedings. It is also, of course, necessary to be satisfied that the costs claimed were reasonable.

The Tribunal found that the total amount of costs payable by Psaros Builders Pty Ltd to the Owners of Strata Plan 52843 was $182,260.66.

Chew and Director General of The Department of Education and Training [2006] WASAT 248

Craig & Ors v Troy & Ors (unreported, WASC Library No 950549, 28 September 1995)

Frankowiak and Chambers [2012] WASAT 175

Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188

J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S)

J­Corp Pty Ltd and Ly [2008] WASAT 242

Kitching and Top Class Renovations Pty Ltd [2013] WASAT 102

Lai & Anor and Costa [2006] WASAT 117 (S)

Mannix v Loumbos Pty Ltd [2000] NSWCA 32

Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)

Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46

Pearce & Anor and Germain [2007] WASAT 291 (S)

Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S)

1 In the original proceedings Owners of Strata Plan 52843 (Owners) sought building remedy orders pursuant to s 36(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act) against Psaros Builders Pty Ltd (Psaros Builders). The dispute concerned water ingress into the basement car park of a mixed use development in Perth known as Tyne Square.

2 The hearing was held over six days on 8, 9, 11 and 12 October and 6 and 7 December 2012. The Owners were successful in obtaining all of the orders sought. The Tribunal's reasons for decision were delivered on 5 April 2013 as Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46 (original decision).

3 In June 2013 the Owners applied for costs on the basis of:

1. the complexity of the case and its importance to the Owners;
2. the strength of the Owners' case;

1. Psaros Builders' refusal to carry out appropriate remedial works which left the Owners with no choice but to commence proceedings; and

1. the fact that the Owners could not have conducted the matter without incurring substantial costs, such that an injustice would result if costs were not awarded (Owners' written submissions dated 10 July 2013 (Owners' submissions), paragraph 8).

4 The Owners submitted that the appropriate analogy to costing of legal work is the appropriate Legal Practitioners (Supreme Court) (Contentious Business) Determination and claimed $219,758.12 comprising $100,441.05 in solicitors' fees and $119, 317.07 in disbursements.

5 Section 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) provides:

(1) Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.

(2) Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.

6 Section 49 of the BS(CRA) Act provides as follows:

(1) Subject to this section, the Building Commissioner or the State Administrative Tribunal may make such orders for costs as they think fit in relation to proceedings arising from a building service complaint or a HBWC complaint.

...

(3) If the Building Commissioner or the State Administrative Tribunal is of the opinion that the costs and expenses were unnecessarily incurred due to the conduct of a party, the Building Commissioner or Tribunal may make an order requiring the party to pay all or any specified part of the costs and expenses incurred under this Act in investigating the complaint.

(4) An order may be made under subsection (3) even where no building remedy order or HBWC remedy order is made.

(5) In determining costs to be paid the Building Commissioner or State Administrative Tribunal may take into account any refusal or failure by a party to comply with an order or direction of the Building Commissioner or Tribunal.

(6) When any costs or expenses are ordered to be paid under subsection (3):

(a) the amount ordered to be paid is recoverable by the Building Commissioner in a court of competent jurisdiction as a debt due to the State; and

(b) any amount paid or recovered must be credited to the Building Services Account.

(7) This section does not limit the powers of the State Administrative Tribunal under the State Administrative Tribunal Act 2004 Part 4 Division 5.

7 Part 4 Div 5 of the SAT Act is the division dealing with costs and includes s 87 of the SAT Act.

8 As was observed by the Tribunal in Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 (Hoskins) at [11], the power to award costs under s 49 of the BS(CRA) Act represents a departure from the provisions for the award of costs under the SAT Act. The Tribunal also observed at [14] that under the BS(CRA) Act the initial predisposition against an award of costs has been removed. Of course, as was also observed in Hoskins at [16], while s 87(1) of the SAT Act requires that the provisions of s 49 of the BS(CRA) Act apply, s 49 should be construed in a manner which promotes the objectives and procedures of the Tribunal.

Main objectives of Tribunal

The main objectives of the Tribunal in dealing with matters within its jurisdiction are

(a) to achieve the resolution of questions, complaints or disputes, and make or review decisions, fairly and according to the substantial merits of the case; and

(b) to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties; and

(c) to make appropriate use of the knowledge and experience of Tribunal members.

10 The Tribunal concluded in Hoskins at [18] and [19] that these objectives would not be fostered by an approach that costs should follow the result as a general rule, but that there will be cases in which it will be appropriate to exercise a discretion to enable the successful party to recover all costs which may be properly recovered in proceedings before the Tribunal. Without in any way attempting to define the circumstances in which the discretion may be exercised in that way, the Tribunal said such an outcome might be achieved where:

... the successful party is legally represented and the complexity of the case required it to be prepared and presented in a more structured way than most building disputes coming before the Tribunal. Similarly, the Tribunal might more readily allow recovery of all disbursements properly incurred where the total disbursements, usually relating to the costs of expert witnesses, are such that the costs represent a significant proportion of the monetary value of the relief obtained. In such cases the remedy granted by the Tribunal would not be truly effective if costs could not be recovered. These are the type of cases in which the justice of the case points to the need for costs to be awarded. At the other end of the scale, parties will always need to incur lodgement fees, travel costs and the cost of photocopying. It in no way furthers the objectives of the Tribunal to encourage or to have to entertain applications for such costs when they are really quite incidental to the benefit obtained from the proceedings. (emphasis added)

Accordingly, s 49 of the BS(CRA) Act should not be understood as providing that costs will generally follow the result. It grants the Tribunal the broadest possible discretion in relation to costs and should be regarded as being entirely neutral in effect, but should be applied in a manner which is consistent with and reinforces the objectives and procedures of the Tribunal. In the exercise of that discretion all of the considerations identified above in relation to the exercise of the discretion under s 87 of the SAT Act remain relevant. Those considerations are however not exhaustive and any other factors will be relevant which point to the justice of the case requiring an award of costs.

11 Those other considerations referred to by the Tribunal in Hoskins at [19] include the factors discussed in Pearce & Anor and Germain [2007] WASAT 291 (S) at [22] - [24] that might contribute to the Tribunal making a costs order.

12 The Tribunal has also recognised that costs might be awarded in the context of the review of decisions of the Building Disputes Tribunal (BDT) if, in a particular case, an injustice would otherwise result. The principles were reiterated by the Tribunal, for example, in J­Corp Pty Ltd and Ly [2008] WASAT 242 (J-Corp) where the Tribunal relied upon Lai & Anor and Costa [2006] WASAT 117 (S) (Lai), Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S) (Rainbow) and Chew and Director General of The Department of Education and Training [2006] WASAT 248.

13 Lai concerned an application for costs in the context of a review of a decision of the BDT having been allowed. The review had resulted in the substitution of a new decision, which awarded increased compensation, but otherwise dismissed the complaint, save in respect of costs. The Tribunal ordered that the applicants be awarded the sum of $3,641.63 in respect to the costs of the proceedings before the BDT, but that each party bear its own costs in respect of the review proceedings. In relation to the review proceedings the Tribunal concluded at [22] and [23] that the costs of the review were relatively incidental to the benefit obtained from the order on review and therefore, there was no sufficient reason for the Tribunal to move from the starting position that each party should bear its own costs.

14 In Lai the Tribunal's discretion in this particular area of jurisdiction was explained at [18] and [19] as follows:

There will be some cases in which an injustice could result by not allowing costs to be recovered. In this particular area of jurisdiction, it is frequently the case that costs have to be incurred in engaging engineering or building consultants. The inability to recover costs may, in some circumstances, have the practical affect of precluding an application being made because even when the prospects of success are considered to be high, the final benefit achievable after deduction of irrecoverable costs, may not justify the proceedings. Such a result would not be in the public interest.

At the other end of the spectrum, the complexity of issues raised or the value of a claim the subject of a complaint to the Disputes Tribunal, may have the result that the applicant, or even both parties, wish to have legal representation from the outset. If there is sufficient at stake, consideration will be given to the possibility that whatever the result, one of the parties will wish to have the decision reviewed. In such circumstances, the inability to recover costs may be an important consideration, so that an applicant may prefer to commence proceedings in a court, rather than before the Disputes Tribunal. The Disputes Tribunal was established in the public interest to provide a cost effective and prompt method of dispute resolution in building cases. The Disputes Tribunal is a specialist tribunal which requires that its chair be a legal practitioner and that the other members be drawn from two panels, one representing consumer interests and the other representative of the interest of builders, to facilitate that purpose. If the cost of legal representation, and even expert witness fees, could not be recovered in the review proceedings, that may therefore, impact on the use of the Disputes Tribunal, and deny any review role by this Tribunal. It is relevant in considering an application for costs for the Tribunal to take such factors into account.

15 These principles were applied in J-Corp. In JCorp the Tribunal considered that an injustice would result if costs were not to be awarded by reason:

1. of the complexity and importance to the owners of the proceedings; and
2. that the case was quite clearly beyond the capacity of most laypersons to run, such that the owners could not have run the proceedings without legal representation. Accordingly the Tribunal ordered that the owners' costs, comprising legal fees and disbursements and expert witness costs, be fixed in the sum of $53,256.74 and paid by the builder by a specified date.

16 These principles were also applied in Frankowiak and Chambers [2012] WASAT 175 (Frankowiak), another case referred to by the Owners.

17 Both the Owners and Psaros Builders referred to Kitching and Top Class Renovations Pty Ltd [2013] WASAT 102 (Kitching) as the most recent reported decision of the Tribunal regarding the applicable principles for an award of costs. In Kitching a building contractor, who had been successful in defending an application under the BS(CRA) Act was awarded costs against the applicant. This case is an example of the application of the Tribunal's broad discretion in this jurisdiction, albeit in a different factual scenario.

18 Psaros Builders vigorously opposed the award of costs principally because, it contended, the Owners had conducted themselves unreasonably and it would therefore be unfair to award costs. Psaros Builders submitted that the report of Mr Richard Machell dated 2 October 2012 (Machell Report), which the Tribunal relied upon in making 'crucial findings of liability' (Psaros Builders written submissions dated 26 July 2013 (PB submissions), paragraph 7.1.15) and which should have been served on them by 31 July 2012, was served on them three days before the commencement of the hearing (PB submissions, paragraph 7.1.5). This led to Psaros Builders not knowing until 29 October 2012, when it engaged Mr Andrew Booth, a registered builder, to prepare a responsive report (Booth Report), that it could not challenge the findings in the Machell Report (PB submissions, paragraph 7.1.12). Accordingly, Psaros Builders concluded that the presentation of their case before the Tribunal and any possible settlement discussions prior to the hearing were fundamentally prejudiced, such that the Owners should be disentitled to an award of costs (PB submissions, paragraph 7.1.17).

19 Psaros Builders relied upon Mannix v Loumbos Pty Ltd [2000] NSWCA 32 at [13], [21] and [22] (Mannix) and Craig & Ors v Troy & Ors (unreported, WASC Library No 950549, 28 September 1995) (Craig) (PB submissions, paragraph 7.1.19).

20 Mr Grubb, counsel for Psaros Builders, added during oral submissions that service of a very significant report three days before the hearing would not have been allowed in the Supreme Court of Western Australia. He submitted that in the Tribunal, however, there is 'this safeguard of no costs' because of the objectives in s 9 of the SAT Act which include to act speedily.

21 The Tribunal does not accept Psaros Builders' submissions regarding the Machell Report.

22 In the week before the commencement of the hearing, the Owners applied to the Tribunal for leave to rely on the Machell Report. On the first day of the hearing, Mr Buchan, counsel for the Owners, explained the following to the Tribunal (T:3; 08.10.12):

BUCHAN, MR: In addition to Mr [Ullner's] statement, supplementary statement, is a report from Mr Richard [Machell], dated 2 October 2012. Mr [Machell] is a registered builder. Last Thursday, Member Ward allowed the applicant owner to lead additional evidence consistent with Mr [Machell's] 2 October 2012 report. It was agreed that the respondent builder should be given an opportunity to respond to the [Machell] report.

On that basis it was also agreed last Thursday that there would need to be an additional day's hearing, separate to the currently listed dates, so that the respondent builder's given an adequate opportunity to respond to this evidence, which has been raised late and outside the terms of the orders originally made by the SAT.

I understand my friend will make a submission about appropriate programming orders, but I think it will be to the effect that the respondent builder have 21 days possibly from the conclusion of the hearing dates for this sitting, to put up responsive evidence. Then after that responsive evidence has been put up the matter be relisted for an additional day for Mr [Machell] and any responsive evidence be given by the respondent builder.

23 Mr McGowan for Psaros Builders later said as follows (T:28; 08.10.12):

DAVIES, MS: Yes. Then there's the issue of Mr [Machell] and the respondent's additional expert in reply. Who is that?

McGOWAN, MR: The order was only made last Thursday.

DAVIES, MS: Right.

McGOWAN, MR: We haven't engaged a responding expert which is why, as my friend suggests, we wanted a direction today. We have 21 days from the conclusion of this part of the hearing to arrange for the person to be engaged and for a report to be provided.

DAVIES, MS: Okay. And then do you imagine the additional day of hearing to address that aspect?

McGOWAN, MR: That's a matter for the tribunal, but that evidence wouldn't take a whole day, so if the tribunal was minded we would deal with that evidence and then deal with closing submissions on that one day. Whether the tribunal wants written submissions either in place of or supplementary to oral submissions is a matter for the tribunal.

1. in respect of the installation of 15 floor wastes (meaning the relief vents) in the car park as a solution to groundwater pressure, the concept provided a solution to the structural issues only, without consideration of the practical considerations of compliance with the other provisions of the Building Code of Australia (Building Code); and
2. this would be immediately apparent to a competent builder faced with floor wastes in a basement, a site that required dewatering and had a maximum groundwater level of 10.5 AHD, with a floor installed at 9.8 AHD and in the absence of the sub­drainage system.

25 Psaros Builders tendered the opinion of Mr Bradley Pike, a building surveyor, dated 7 November 2012 in response to the Machell Report, although Mr Pike expressly declined to express an opinion on this particular issue on the basis that it was beyond his expertise.

26 While the Tribunal had some difficulty with the notion of 'a competent builder' and made the point that even a competent builder may suffer an error of judgment (see [211] of the original decision), the Tribunal accepted Mr Machell's opinion in the above respect. The Tribunal concluded, based in part on this evidence (see [320] of the original decision), that the puncturing of the vapour barrier by Psaros Builders in the construction of the relief vents had the consequence that the building service, comprising the waterproofing in the construction of the basement, was not carried out in a proper or proficient manner within the meaning of s 38(1) of BS(CRA) Act and that the puncturing of the vapour barrier by the respondent rendered the vapour membrane faulty or unsatisfactory within the meaning of s 38(1) of BS(CRA) Act.

27 As Psaros Builders submitted, the significance of these findings in the Machell Report and the reliance upon it by the Tribunal in making crucial findings of liability against Psaros Builders could not be downplayed by the Owners (PB submissions, paragraph 7.1.15).

28 In response to a question by the Tribunal during the costs application, Mr Grubb confirmed that Psaros Builders was not contending that the original proceedings could have been avoided, although it does appear implicit in Psaros Builders' submissions that their position is that it might have been reduced. However, there was no submission as to by how much. The submission was made simply as a basis to justify the exercise of the Tribunal's discretion in such a way as to decline to award costs at all.

29 The problem with the submission made on behalf of Psaros Builders is that the substance of the Machell Report, that a competent builder would not have proceeded to construct the basement slab as Psaros Builders had, must have been understood by Mr Psaros well before receipt of the Booth Report. Mr Psaros is himself a registered builder.

30 Further, the authority cited as supporting Psaros Builders' submission that in circumstances such as these, costs should not be awarded, (PB submissions, paragraph 7.1.19) does not provide such support.

31 In Craig, in relation to Supreme Court proceedings, where the plaintiffs had been successful in recovering two thirds of the amount of damages sought, Anderson J held, relevantly, that the first and third defendants pay the plaintiffs' costs but that the plaintiffs be deprived of the costs of three days (of the 36 day trial) and 10 witness fees be excluded because the plaintiffs' conduct had prolonged the trial and caused unnecessary expense. His Honour explained at 8 and 9 that:

... In this case, the first and third defendants say and of course I accept that they were given some 15 statements on 28 February but that by the end of the trial some 55 statements had been served or handed across the bar table during the course of the trial and that many of these were provided only shortly before the witness was to be called. Whilst there may have been good reason for that in the case of a few witnesses, I cannot accept that it was unavoidable in every case and I have no doubt that, overall, it unnecessarily lengthened the trial. Having heard the witnesses and observed how their evidence was received by the defendants, I have little doubt that if the order of Ipp J had been complied with, or substantially complied with, the time taken in giving evidence would have been reduced and a number of witnesses would not have had to be called.[.]

32 In Mannix at [12] Foster AJA, with whom Priestley and Fitzgerald JJA agreed, allowed an appeal against an order that each party bear its own costs on the basis that there was no misconduct which would disentitle the successful party to costs.

33 These authorities deal with circumstances in which a successful party, in a jurisdiction where a successful party is ordinarily entitled to costs, may be deprived of costs.

34 The question in this application is whether, in the exercise of the broad jurisdiction of the Tribunal in building disputes, the successful party is entitled to an award of costs.

35 The Tribunal does not accept Psaros Builders' submission that, in seeking to rely on the Machell Report being received late, the Owners conducted themselves in a way that in itself justifies the exercise of the Tribunal's discretion in such a way as to decline to award costs.

36 On the other hand, the Tribunal also does not accept the Owners' submission that its original case was so strong that it amounted to embarking on proceedings to vindicate its clear legal entitlement. Among other considerations, the construction contract was complex and unclear. Nor does the Tribunal consider that Psaros Builders' refusal to carry out appropriate remedial works supports an entitlement to an order for costs, in the circumstances, as Psaros Builders' position at that point was that it was not responsible for doing so.

37 However, the Tribunal accepts the Owners' submission that the case involved complexity and was of importance to the Owners.

38 The complexity of the case was self­evident from the Tribunal's original reasons for decision which comprises 86 pages. This was in part a consequence of the joint venture involved and the different roles of Mr Psaros, but it was also because determining the builders' obligations under the BS(CRA) Act involved ascertaining the cause of the water ingress and interpreting a complex and unclear construction contract.

39 The importance of the proceedings to the Owners is also self­evident. Considerable water ingress had occurred which was causing unhealthy and dangerous conditions in the basement car park and fixing it was a difficult exercise.

40 The Tribunal also accepts the Owners' submission that the case could not have been conducted without incurring substantial costs. The complexity of the case required it to be prepared and presented in a more structured way than most building disputes coming before the Tribunal and both parties chose to have legal representation. Further expert witnesses were warranted and the total costs of expert witnesses amounted to almost $115,000 in circumstances where the value of the remedy was $736,477.

41 The Tribunal considers that these factors combine to create a circumstance in which the justice of the case points to the need for costs to be awarded because the remedy granted by the Tribunal would not be truly effective if costs could not be recovered.

42 The Tribunal does not accept Psaros Builders' submission (PB submissions, paragraph 8) that there is no injustice if the complexity and importance of the case is balanced against the Owners' conduct in seeking to rely on the Machell Report late in the proceedings and that cost to the Owners will be divided amongst 45 individual owners. The complexity and importance of the case outweighs these other considerations.

43 In Frankowiak at [15] the Tribunal made the point that, in cases where the Tribunal does award costs, the Tribunal is concerned to meet its obligation to minimise the cost to the parties by ensuring that any costs awarded are proportionate to the nature of the proceedings, and referred to the approach taken in Rainbow and J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) (J&P Metals). Further at [32] the Tribunal stated that it is, of course, necessary to be satisfied that the costs claimed were reasonable.

44 The Owners submitted that the appropriate analogy to costing of legal work is the appropriate Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination (Owners' submissions, paragraph 1). The Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2010 (WA) operated from 1 July 2010 to 1 November 2012 (2010 Supreme Court Scale) and the Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2012 (WA) has operated since 1 November 2012 (2012 Supreme Court Scale).

45 Psaros Builders submitted that, contrary to the Owners' submission, the appropriate scale is the Legal Practitioners (State Administrative Tribunal) Report and Determination 2010 (SAT Scale) which, relevantly, specifies the maximum allowable rate for Counsel as $275 per hour (PB submissions, paragraph 9).

46 Regulation 3 of the SAT Scale provides that it applies, inter alia, to the remuneration of legal practitioners in respect of advice given by legal practitioners in, or for the purpose of, proceedings before the Tribunal. It is therefore clearly applicable.

47 However, in appropriate cases, the Tribunal may also have regard to other scales. The Tribunal did so, for example, in Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) (Marvelle). The Tribunal explained at [48] that in the circumstances of that case, having regard to the complexity and importance to the parties, it was appropriate to use the Supreme Court Scale as an additional guide. The Tribunal also confirmed in Marvelle at [47] that the SAT Scale is no more than a guide of the maximum amount which might be allowed on a party and party basis for an hourly or daily rate, as the case may be.

48 In these circumstances, as the original proceedings involved complexity and is of importance to the Owners, it is also appropriate to use the 2012 Supreme Court Determination as an additional guide.

49 In Marvelle at [35] the Tribunal acknowledged that, as a result of the level of costs set, the costs recoverable will be very significantly lower than the solicitor and client costs incurred. Further, the Tribunal said at [36] that this disparity will always operate as a disincentive for parties to allocate unnecessary resources and time to litigate in a manner which is inconsistent with the simplified and expeditious procedures which should be the paradigm in the Tribunal.

50 In relation to item 1 of the Owners' Schedule of Costs, $1,716 is claimed for the drafting by a senior practitioner of the notice of complaint and schedules between 8 February and 26 March 2012. This is calculated on the basis of a total of four hours at $429 per hour.

51 The Owners submitted that this task was analogous to drafting a writ of summons and statement of claim, and hence rely upon item 1 of the Supreme Court Scale.

52 The Tribunal accepts that item 1 of the 2010 Supreme Court Scale is a useful guide; however, it considers that 1 hour and 30 minutes is reasonable, given that there was not a statement of issues, facts and contentions in this matter. Also, the appropriate hourly rate is $352 as specified for a senior practitioner under the SAT Scale. The total amount allowed for this item is therefore **$**528.

53 In relation to items 2 - 6 of the Owners' Schedule of Costs, an hour or less than an hour is claimed for preparation to attend a directions hearing and, similarly, an hour or less than an hour is claimed for attending a directions hearing.

54 The Tribunal considers this reasonable but, again, that the appropriate hourly rate is $352. The total amount allowed for these items is therefore **$**2,745.60 (being $704 plus $457.60 plus $492.80 plus $633.60 plus $457.60).

55 In relation to item 7 of the Owners' Schedule of Costs, 11 hours and 30 minutes is claimed for submissions, preparation and attendance of the directions hearing on 4 October 2012. The Owners submit that this involved a preliminary issue relating to jurisdiction and was akin to a complex chamber summons so that item 10 of the Supreme Court Scale is analogous.

56 The Tribunal accepts that this is reasonable but, again, that the appropriate hourly rate is $352. The total amount allowed for this item is therefore **$**4,048.

57 In relation to item 8 of the Owners' Schedule of Costs, $62,413.55 is claimed for getting up and preparation of the case.

58 As Psaros Builders submitted, this is more than the maximum of $51,480 under the 2010 Supreme Court Scale (PB submissions, paragraph 11).

59 The Tribunal appreciates that the original proceedings involved considerable complexity but nevertheless considers that this is more than Psaros Builders can reasonably be required to bear. In particular, the Tribunal considers that:

• 23 hours and 6 minutes for the proofing of Mr Ullner's witness statement, which amounts to almost three (8 hour) days, is excessive. Bearing in mind that he was the witness on behalf of the strata company and was a key witness in terms of events including where and when water ingress has occurred, the Tribunal considers that 15 hours is reasonable.
• 22 hours and 30 minutes for proofing Mr Swift's witness statement is also excessive. Even though he was involved in the circumstances surrounding the installation of the relief vents, the Tribunal considers that only 10 hours is reasonable.
• Psaros Builders should not bear the costs of basic research into the law and therefore all items relating to research should be excluded except in relation to the Building Code of Australia (Building Code). Whether the relief vents complied with the Building Code was a key issue in the original proceedings and involved complex issues of fact and law.
• Psaros Builders should not bear the costs of two hours and six minutes of drafting joint statements of experts, including arranging and review, as this was principally a secretarial task given they were agreed and written at the Tribunal.
• Collating bundles of documents for trial is a task for a junior practitioner not a senior practitioner.

60 The total amount allowed for item 8 is therefore **$**39,789.85 (being $3,696 for proofing Mr Airey plus $4,329.60 for Mr Martens plus $457.60 for Mr Collins plus $3,291.20 for Mr Sebbes plus $739.20 for Mr Watts plus $2,393.60 for Mr Machell plus $5,280 for Mr Ullner plus $1,512.60 for Mr Grose plus $3,520 for Mr Swift plus $1,232 for Mr Malie plus $352 for the drawing of subpoenas plus $352 for drafting chronology of events plus $123.20 for twenty one minutes of reading the Building Code but at $352 per hour plus $290.40 for lodgment of witness statements but for a clerk/paralegal at $121 per hour plus $581.90 for considering Building Code obligations but for a junior practitioner at $253 per hour plus $1,606.55 for collating documents for trial but for a junior practitioner at $253 per hour plus $10,032 for preparation for trial but at $352 per hour).

61 In relation to items 9 ­ 12 of the Owners' Schedule of Costs, six hours or less is claimed for attendance at each day of the first four days of trial, together with three hours for opening submissions.

62 The Tribunal considers this reasonable but, again, that the appropriate hourly rate is $352 per hour for a senior practitioner. Mr Buchan appeared as counsel but is a partner in a law firm and therefore has the costs structure applicable to a law firm and not to the independent bar so that counsel's rates in the SAT Scale are not appropriate.

63 The total amount allowed for these items is therefore **$**8,096 (being $2,816 for day one of the trial plus $1,408 for day two plus $2,112 for day three plus $1,760 for day four).

64 In relation to item 13 of the Owners' Schedule of Costs, $15,785 is claimed for closing submissions.

65 Psaros Builders submitted that this is excessive (PB submissions, paragraph 11.2).

66 While the Tribunal requested written and oral closing submissions, it is considered that Psaros Builders should not bear the cost of 35 hours for this task. Although the Owners were successful in obtaining all of the orders sought, not all of the Owners' contentions were accepted by the Tribunal. Some of the closing submissions were unnecessarily spent trying to persuade the Tribunal on a general justice basis, whereas the requirements in the BS(CRA) Act are quite specific. The Tribunal considers that 20 hours is reasonable at an hourly rate of $352. The total amount allowed for this item is therefore **$**7,040.

67 In relation to item 14 of the Owners' Schedule of Costs, $451 is claimed for a one hour directions hearing at the Tribunal.

68 The Tribunal considers that one hour is reasonable but that the appropriate hourly rate is $352 per hour. While the 2012 Supreme Court Scale becomes applicable from 1 November 2012, the SAT Scale does not alter and so the appropriate hourly rate remains the same. The total amount allowed for this item is therefore **$**352.

69 In relation to items 15 and 16 of the Owners' Schedule of Costs, 2 hours 30 minutes is claimed for attendance at day five of the trial and 2 hours for day six.

70 The Tribunal considers this reasonable but, again, that the appropriate hourly rate is $352 per hour for a senior practitioner. The total amount allowed for these items is therefore **$**1,584 (being $880 for day five of the original proceedings plus $704 for day six).

71 In relation to item 17 of the Owners' Schedule of Costs, a total of $114,224.77 is claimed for expert fees. The Owners submit that item 34 of the Supreme Court Scale is analogous and the Tribunal agrees.

72 Psaros Builders submit that the expert witnesses' disbursements are excessive, unreasonable and unjustifiable and, in particular, that Mr Airey's fees at $70,026.77 are absurd (PB submissions, paragraph 11.3). However, Mr Grubb could not point to an item in the invoices which pertained to unnecessary work or be specific about how or why Mr Airey's fees were absurd. Mr Grubb suggested that, because Mr Airey's invoices do not show a rate per hour, the invoices could not be assessed.

73 The Tribunal does not accept this submission in this particular case. Mr Airey played a very significant role in the case and his invoices describe the work to which each invoice relates. Mr Airey was involved in diagnosing and developing the solution, as well as assisting in assessing other expert witnesses' input over a twelve month period. It must be remembered that, unlike Psaros Builders, the Owners are not themselves builders and had not been involved in the construction of Tyne Square. The Tribunal sees no basis upon which to conclude that any of the expert witness fees are unreasonable or excessive. They do not appear to be so. The total amount allowed for these items is therefore **$**114,224.77.

74 In relation to items 18 and 19 of the Owners' Schedule of Costs, a total of $614.10 is claimed for court fees and a total of $939.55 for the trial transcript.

75 The Owners submit that item 34 of the Supreme Court Scale is analogous and the Tribunal agrees. The total amount allowed for these items is therefore **$**614.10 and **$**939.55 respectively.

76 In relation to item 20 of the Owners' Schedule of Costs, a total of $3,099.65 is claimed for photocopying. The Owners submit that item 31 of the Supreme Court Scale is analogous and the Tribunal agrees. This photocopying occurred prior to 1 November 2012 when the 2012 Supreme Court Scale came into effect. The maximum recoverable amount, according to the 2010 Supreme Court Scale, is $0.11 per page. It appears from the invoices provided that more than $0.11 per page has been charged. Therefore the Tribunal sees fit to discount the amount claimed by 40% and the total amount allowed for these items is therefore **$**1,859.79.

77 In relation to item 21 of the Owners' Schedule of Costs, a total of $439 is claimed for personal service fees and conduct money. The Owners submit that item 34 of the Supreme Court Scale is analogous and the Tribunal agrees. The total amount allowed for these items is therefore **$**439.

78 For the above reasons the total amount of costs payable by Psaros Builders to the Owners is fixed, as summarised in table form below.

1. The Owners' costs, comprising legal fees and disbursements, are fixed at $182,260.66.
2. Psaros Builders must pay to the Owners such costs as fixed in order 1 on or before 4 October 2013.

I certify that this and the preceding [78] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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