This matter came before me on 15 February 1999 at which time the Authority sought a finding against the Respondent that proper grounds existed for the taking of disciplinary action against the Respondent because he failed to comply with a Direction to Rectify and sought the imposition of a penalty.

At the hearing on the basis of submissions put forward I made a finding that proper grounds did exist for the taking of disciplinary action because the Respondent, being a licensee under the Queensland Building Services Authority Act ("the Act") failed to comply with Direction to Rectify number 18178 made on 14 October 1998.

In view of the fact that the owners would not allow the Respondent back on site to carry out any rectification work the question was what if any penalty should be imposed.

I asked for written submissions in relation to the issue of any penalty to be imposed.

The Respondent provided submissions on 22 February 1999. The Authority responded with submissions dated 2 March 1999. The Respondent's solicitors delivered further submissions on 11 March 1999. I note the Authority's objection to the provision of these later submissions. I have considered the submissions in coming to a conclusion regarding the penalty, however I point out that although provided in different form I do not consider that the second submissions provided any further substance than the first submissions.

The Respondent entered into a contract with a Mr and Mrs Dyson to remove a house to a new site and to stump and re-roof the house.

The Respondent says that when the house was relocated to the new site he attended to the works he was to perform under the contract.

Direction to Rectify number 17669 was issued to the Respondent on 10 July 1998 requiring the rectification of certain defects. During August of 1998 the Respondent was interstate in flood effected areas. He says he had a conversation with an inspector from the Authority and told him he considered that most of the defects were not within the scope of the works covered by his contract. This was confirmed in his letter to the Authority dated 24 August 1998 wherein he stated:

"The work outlined in your letter is not our responsibility other than the roof and stumping. The accompanying copies of our contracts -company and BSA clearly state our obligations in regard to the job, and these are to replace the Zincaline roofing with a Colourbond roof, and to provide the missing stumps.

We feel fully obligated to carry out this work, provided we can be guaranteed access to the site.

When our workmen attempted to access the site in order to measure the roofing iron required, they were denied access by the Dysons."

The Authority in submissions suggested that the Respondent had agreed to perform all the rectification work listed in the first Direction to Rectify and therefore it had withdrawn that Direction and that when the work was not done it had issued Direction to Rectify number 18178 in October of 1998.

In light of the letter written on 24 August and the Respondent's position throughout that he has not been responsible for the water penetration and cracking, I find it unlikely that he originally agreed to comply with the first Direction.

In any event further Direction number 18178, the non-compliance of which is the subject of this application was issued in October 1998 in similar terms.

According to the Respondent he did not take any action in relation to this Direction but rather he thought he would "let it take its course".

As such these Disciplinary proceedings were issued for failure to comply with the Direction to Rectify.

Subsequent to these proceedings being issued the Authority has conducted further investigation into suspected movement of the dwelling. As a consequence a further Direction to Rectify has been issued but as yet the Authority and the Respondent are still considering their positions regarding that Direction and it is not the subject of these proceedings.

The Direction to Rectify lists 11 items requiring rectification. The main argument of the Respondent is that he did not comply with the Direction to Rectify because he did not consider himself responsible for any defects other than those concerning the stumping and re-roofing.

At the hearing and in his submissions the Respondent concedes that he is responsible for items 1, 2 and 7 of the Direction to Rectify. Number 1 provides that the posts to the rear patio have not been installed, paragraph number 2 provides that no bolts had been fitted to the bearer tie-down to the house and the front patio has insufficient tie-down. Paragraph number 7 provides that the new roof does not comply with the plans.

I note in the Authority's submission that they state that the Respondent accepted responsibility for items 1, 3, 7 and 10 at the hearing. Items 3 and 10 relate to water penetration. The Respondent, in his submissions, disputes that he conceded items 3 and 10. My recollection of the hearing is that he did not concede any items other than 1, 2 and 7. He maintained the items in dispute related to matters outside his contractual obligations, ie the stumping and the re-roofing.

It should be noted at this point that this is a Disciplinary application and as such the only questions to be determined by the Tribunal are whether proper grounds exist for the taking of disciplinary action against the Respondent under section 101 of the Act and if so whether a penalty should be imposed.

The Respondent is in effect in his submissions asking the Tribunal to make findings regarding his responsibility in relation to certain items listed in the Direction to Rectify. The Act does provide a procedure for challenging the Authority's decision to issue the Direction to Rectify. That procedure is outlined in section 99 of the Act which enables the party aggrieved by a decision to apply to the Tribunal to review the decision such as in this case to issue the Direction to Rectify. This is the application that should be made if the builder feels that the Authority has acted inappropriately in issuing the Direction to Rectify.

Tribunal member Mr Wensley QC faced the same situation in the matter of QBSA -v- Black, DO33-92 dated 13 April 1993, where he said:

"Section 101 of the Act provides that the Tribunal, may on application by the Authority, conduct an enquiry to determine whether proper grounds exist for the taking of disciplinary action under the section. Sub-section 2 provides that such grounds exist if among other things, a licensee fails to comply with a Direction to Rectify building work. That being so, once the Authority has demonstrated that there has been a relevant Direction and a failure to comply with it, proper grounds exist for taking disciplinary action are established. It is quite irrelevant to that determination that the builder may have had some reason, even a good reason, for failing to comply with the Direction. In fact, if a licensee wishes to challenge a Direction, he may do so by way of the review proceedings under section 98(d) of the Act."

In that case as here the builder did not seek to review the decision outlined in the Direction to Rectify but instead "decided to do nothing when he received the Direction and maintained this position until the application for disciplinary action was made".

Despite that Mr Wensley QC came to the conclusion that he could "take the technical evidence (as to what caused the cracking the subject of the Direction to Rectify) into account in determining whether, having found that proper grounds existed for the taking of disciplinary action, I should make an order under section 101(4). I think it is clear that I am not obliged to make any order under that sub-section and that I have a discretion in that regard."

Whilst in circumstances where the Respondent should have applied for a review of the Direction to Rectify to challenge the appropriateness of the Direction and didn't I don't consider it appropriate to make final findings on the merit of the decision to rectify, I do consider that the Respondent is entitled to make submissions as to the reasons for non-compliance with the Direction to Rectify and that is one factor to be taken into account when assessing any penalty to be imposed.

Here the Respondent doesn't challenge items 1, 2 and 7.

Item 6 relates to the house being sited to a horizontal level and has been addressed in the subsequent Direction and was withdrawn by the Authority in this matter.

The items which are disputed by the Respondent are items 3, 10 and 11 which relate to water damage, items 4 and 5 which relate to cracks in the gyprock and item 9 which provides that the door between bedroom 1 and the bathroom binds on the floor tiles.

The Authority says that the Respondent is responsible because the water penetration problems resulted from the existing roof not having been replaced as per the contract.

The Respondent says he is not responsible for repairing water damage because it occurred as a result of water coming through the old roof before a new roof was affixed on site. He suggests he should not be held responsible because the owners caused a delay in the house being moved to the site and it was during this period that the water damage occurred.

He also suggests that the carpets were already stained and that he had noticed water damage to the soffit prior to the house being moved. This view is not supported by the report of the Engineer (Daryl Robinson) who inspected the house prior to its removal.

"The overall condition of the residence was very good.

All floor coverings were in good condition except for the lounge, living carpet which showed signs of oil or similar."

If there had been water damage, one would expect that it would be referred to in the report.

On the evidence available it is difficult to determine the cause of the water penetration. For instance there is no evidence from the owners in relation to the alleged delay or the state of the house at the time of purchase.

In relation to the cracks in the gyprock, again from the evidence before me it is not possible to come to any conclusion as to what caused the cracks.

The Respondent suggests that he pointed out to the owners prior to contracting with them that "as some of the walls were sitting on a concrete based foundation and the rest of the house was sitting on timber stumps which had sagged between 25 - 35mm and new work had been done to the property according to those levels, when the house was relocated it would lead to cracking of the gyprock and doors." He said the owner acknowledged this and confirmed he would be responsible for the repair of all the cracks.

Again there is no evidence from the owners on this issue.

Mr Robinson, the engineer who inspected the house prior to removal, makes no comment as to these concerns in his report. The Authority suggests that the defects identified subsequently namely the fact that the house appears to be out of level may have had some contribution to the defective works identified in the Direction to Rectify the subject of these proceedings.

No doubt if the Respondent had sought to review the Authority's decision regarding the Direction to Rectify then the evidence as to the causation of these disputed defects would have been more substantial.

In light of the lack of evidence I consider that the Respondent's protest regarding his responsibility for certain defects does raise a question to be considered over the causation of the defects however it cannot play a significant role in the exercise of my discretion regarding the imposition of a penalty.

In coming to a conclusion regarding penalty I have taken into account all submissions and circumstances of the dispute particularly,

The Authority estimates that it would cost approximately $7,600.00 to rectify the roof, the stumps and the water penetration. Of this amount the Respondent admits liability regarding stumping and roofing.

The Authority estimates the cost of rectifying the problems associated with the cracking in items 4, 5 and 9 would be in the vicinity of $1,900.00 being a total cost to rectify in the vicinity of $9,500.00. There were no submissions from the Respondent in relation to the cost of rectification other than his concession made during the hearing that the cost of a new roof would be in the vicinity of $3,000.00.

(ii) The Respondent's objection to his liability regarding certain items.

(iii) The Respondent's apparent disregard for the second Direction to Rectify until these disciplinary proceedings were commenced.

(iv) The Respondent's attempt to rectify after the first notice but access was apparently denied.

In all of these circumstances I have come to a conclusion that an appropriate penalty is in the sum of $8,000.00

Accordingly I order that the Respondent pay to the Authority a penalty in the sum of $8,000.00 to be paid within 30 days or such other time as may be agreed upon between the Respondent and the Authority.

QUEENSLAND BUILDING SERVICES AUTHORITY vs. KRAHNEN Paul D022-99 [1999] QBT 51 (1 April 1999 )

UPON HEARING MR WILKIE ON BEHALF OF THE APPLICANT AND MR KRANEN THE RESPONDENT, THE QUEENSLAND BUILDING TRIBUNAL MAKES THE FOLLOWING ORDER:

1. THAT PROPER GROUNDS EXIST FOR THE TAKING OF DISCIPLINARY ACTION AGAINST THE RESPONDENT BECAUSE HE FAILED TO COMPLY WITH DIRECTION TO RECTIFY NO. 18178 DATED 14 OCTOBER 1998 WITHIN THE TIME ALLOWED.

2. THAT, UNDER THE CIRCUMSTANCES, THE RESPONDENT SHALL PAY A PENALTY OF EIGHT THOUSAND DOLLARS ($8,000.00) TO THE QUEENSLAND BUILDING SERVICES AUTHORITY WITHIN 30 DAYS OF THE DATE OF THIS ORDER OR SUCH OTHER TIME AS MAY BE AGREED UPON BETWEEN THE RESPONDENT AND THE AUTHORITY.

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