//
[2012] QCAT 389
General information, not legal advice.
Queensland Civil and Administrative Tribunal
2012-08-29
Mr P
Original judgment source is linked above.
Titan Enterprises (Qld) Pty Ltd and Ors v Queensland Building Services Authority [2012] QCAT 389
Where a complaint about defective building work brought to QBSA well beyond complaint period specified in the Defects Rectification Policy - Whether the Building Code of Australia applies in the context of exempt agricultural buildings - Determination of relevant matters for consideration when determining whether to exercise the discretion to issue a direction to rectify - Questions of unfairness under s 72(14)
Queensland Building Services Authority Act 1991, ss 72(1), (2), (5), (14)
Mr P McCafferty of Counsel (instructed by Thompsons Lawyers) for the First Applicant
[1] Matters QR220-09[1] and GAR166-10 each arise out of the construction of a steel shed by Titan Enterprises (Qld) Pty Ltd ("Titan"), on a farm property at Grandchester that is owned by the Second Applicants.
[2] By an order of this Tribunal made on 30 June 2011, the two matters were consolidated into GAR166-10. The Applicants in QR220-09 then became the Second Applicants in these proceedings. The matter eventually came on for hearing before me, on 8 December 2011.
[3] At the close of oral evidence the parties agreed to a timetable for the filing of written submissions. Some delays eventuated, and the QCAT Registry did not receive all of the written submissions from the parties until 3 April 2012. These now are my reasons for decision based on the evidence, and those submissions.
[4] Distilled to its essence, this case is about a concrete slab system that forms the base for the Second Applicants' farm shed. The slab system[2] was poured in August 2006 by a subcontractor then working for Titan. In light of McNab Constructions Australia Pty Ltd v QBSA,[3] it is clear that Titan must bear any necessary responsibility for defective building work caused by any of its subcontractors.
[5] Titan comes to QCAT seeking to review a direction to rectify (Direction 36037) issued by the QBSA on 18 March 2011, requiring the rectification of building work associated with the construction of the slab system. Direction 36037 was made in the following terms:
"The installation of the slab system is not in accordance with the requirements of the Building Code of Australia 2006, Volume 2, Section 3 part 3.2.5 Clause 3.2.5.2(b) and AS2870 Section 3, Clause 3.1.5(a) in that:
[6] Direction 36037 is not the first direction issued by the QBSA in respect of this structure. In fact, it is the third. Earlier directions were given by the QBSA on each of 28 April 2009; and 29 April 2010. It becomes necessary to say something about the history of this matter and the process by which successive directions have been issued by the QBSA.
[7] In early July 2006, Titan entered into contracts numbered 64985, 64990, and 64991 with Ms Christine Lostroh (one of the Second Applicants) for the erection of a Titan "Goldstar TQ" shed and two Goldstar Awnings, at Lot 237 Long Gulley Road at Grandchester. The three contracts now appear in these proceedings as annexure 'RW-1' to the affidavit of Ronald Joseph Webb, which became exhibit one at the hearing on 8 December 2011. The contracts are in standard form, with a series of "check boxes" to record various aspects for each structure ordered by a customer from Titan. In this instance there is a separate contract for the shed and each awning, yet each is prepared on the same pro-forma.
[8] Contract 64985 (the contract for the shed itself) was signed by Ms Lostroh on 1 July 2006. It records that Ms Lostroh ordered a "Goldstar TQ" model shed, 17.985 metres long, 7.6 metres wide, and 3 metres high, to be supplied and then erected by Titan. Of some significance to this dispute is that the check boxes in the left-hand column of contract 64985 record that "level site preparation" was to be the responsibility of the client (in other words, Ms Lostroh), and there were to be no footings for the shed. The slab itself was to be provided by Titan.
[9] Contracts 64990 and 64991, each signed on 2 July 2006, are for 3 metre wide Goldstar awnings, to run the 17.985 metre length of the shed. Each of contracts 64990 and 64991 also provide that level site preparation was to be the responsibility of Ms Lostroh; that the slab was to be constructed without footings; and that the slab was to be provided by Titan. The three contracts further record that what was to be constructed was a "rural" building; thus not requiring any local council approval.
[10] In order to construct the slab system, Titan retained a concreting subcontractor, L & R Concreting Pty Ltd. The evidence heard before QCAT suggests that at all relevant times the principal of L & R Concreting Pty Ltd was a Mr Lance Bannon, although neither Mr Bannon - nor any other representative from L & R Concreting - was called to give evidence in these proceedings. Although Mr Bannon was not called to give evidence, a letter that was apparently authored by him on 17 June 2009, did make its way into evidence. Reference shall be made to that letter, later in these reasons for decision.
[11] It is common ground that the slab system was laid down in August 2006, and that the shed was also erected in about August 2006. It is also common ground that a soil survey was not conducted before any site preparation works were undertaken, and that the preparation of the site entailed an element of "cut and fill" excavation.
[12] In January 2009, that is almost two and a half years after the date of construction, the Second Applicants complained to the QBSA about the shed, and specifically about the slab system. Titan was notified of this complaint by the QBSA by letter, dated 19 March 2009.[4]
[13] The owner's complaint gave rise to an initial QBSA inspection of the shed on 8 April 2009. This revealed some minor cracking in the slab system, as well as some separation between the main slab and the awning slabs, and some heaving in the apron slab on the southern side. At the time of the initial inspection all of these matters were assessed by the QBSA as comprising no defect. The veranda awnings were however found to have some 'category one' defects, in the form of insufficient fall away from the main shed, thus resulting in some storm water backflow and then water ingress into the shed, by means of water penetrating via screw holes along the veranda beam.[5]
[14] At the time of the initial QBSA inspection it was also observed that the shed had been constructed on clay (known to be highly reactive to the presence of moisture in the ground), and that the Second Applicants had placed two shipping containers close to the southern side of the shed. The location of these shipping containers near to the shed lead to the view that these may have further impeded surface water drainage; thus allowing for the concentration of additional surface water around the base of the slab system, thereby exacerbating the reactivity of the clay soils to moisture in the ground. The concluding passages of the initial QBSA inspection report record that:
"The defects current [sic] being experienced in the building is a direct result of fill settlement and shrinkage. The engineering design and compliance documentation was not confirmed by the licensee. The defects as identified by the owner were not reported to the Authority in a reasonable time period [thus] resulting in damage to the building element that may have been corrected on earlier advice. The surface water drainage may have been a contributing factor to the heave and settlement of the slabs and due to the passage of time [the QBSA] cannot apportion blame directly to the licensee".
[15] Ms Christine Lostroh (on behalf of both the Second Applicants) gave oral evidence in these proceedings. Her evidence may be summarised thus:
The property where the shed has been erected is used to run stock. The shed is the only structure on the property and is used for purposes associated with the care of livestock. The shed is not used, nor intended, for human habitation, although Ms Lostroh will sleep in the shed from time to time, particularly if cattle are calving, and those attending the cattle are required to be at the property, at night.
In terms of contractual negotiations with Titan, Ms Lostroh dealt exclusively with a Mr John Brandon, who was the representative of Titan at their display centre on Brisbane Road, Bundamba. Discussions with Mr Brandon took place both on-site at Grandchester, and at Bundamba.
Ms Lostroh was told by Mr Brandon that the First Applicant would "take care of everything". Ms Lostroh did not have any specific discussions with Mr Brandon about level site preparation. It was Mr Brandon who completed the pro-forma contract and marked a cross against the need for footings, telling her that footings were unnecessary.[6]
Lance Bannon was responsible for site preparation and the slab system, and he was paid by Titan.[7] Ms Lostroh says she did not have a contract[8] with Mr Bannon, and does not recall giving Mr Bannon any money.[9]
[16] As indicated earlier in these reasons, a letter apparently authored by Mr Lance Bannon was received into evidence. The relevant portions of that letter (dated 17 June 2009) state:
"I went to the site and did 2 days preparation work with the backhoe. I then advised the owner (Christine Lostroh) that the site would need another days work to extend the earthworks out around the concrete pad in order to allow for proper drainage and that this work would cost approximately $1500.00 - $2000.00 extra. The owner asked if the shed would fit on the pad we had cut, I advised that it would just fit, she then said to use the pad we had cut and pour the concrete as she did not want to pay for the extra days work.
I then advised the owner that extra work would be needed to be completed which she advised that she would arrange.
I completed the concrete slab as required which included piers and dwelling [sic]
Steve Liddy contacted me approximately a year later and advised that the owner was complaining. I went to site and found none of the extra work I had advised needed to be done had been carried out.
The client was being very difficult and would not agree to pay for anything. I agreed to take a tipper and excavator to the site for one day. I carried out the proper drainage required and carted the fill around to the fill end of the job and compacted it. The owner agreed that on completion of this extra work there was to be no further come back on Titan or L & R Contracting".
[17] In response to the initial inspection report, Titan commissioned its own engineering inspections, by a company employee, Mr Mark Eiser. These occurred on 5 May and 29 May 2009. Mr Eiser then produced a report for Titan, dated June 2009.[10] In that report, Mr Eiser agreed with the conclusions already expressed by the QBSA in its initial inspection report. Mr Eiser however also went on to record that the area of most significant heave in the slabs (near to column C4 on the plan) was on the southern side of the shed, where there was insufficient surface fall away from the slabs, and that this problem was then exacerbated by the presence of the shipping containers. The conclusion in Mr Eiser's report is that the preliminary site preparation - prior to the laying down of the slabs - had been inadequate, and that this problem had then been compounded by the location of the shipping containers within the zone of influence for the slab system, thereby preventing adequate drainage of surface water away from the southern side of the slab system.
[18] Next, Titan wrote[11] to the QBSA on 18 June 2009, stating that it felt that the difficulties with column heave had arisen as the result of the owners not completing adequate drainage works, and then compounding that problem by levelling the area adjacent to the southern side of the slabs in order to position two shipping containers. Titan concluded its response to the initial QBSA inspection report by stating that Titan was nevertheless willing to rectify the height of the C4 column where heave had taken place, in order to rectify the identified 'category one' defects, yet only after the shipping containers had been removed; and further earthworks had been completed by the owners, in order to create proper fall away from the slabs.
[19] On 29 June 2009 the QBSA issued a direction to rectify to Titan (No. 33206), requiring that Titan address problems with the gradient of the awnings, yet acknowledging that these works could not be undertaken until the owner had first relocated the shipping containers to an area outside the zone of influence for the slab system and had also undertaken further drainage improvements around the perimeter, so as to effectuate proper surface water drainage.
[20] Titan then commenced an application for review of direction 33206 before the former Commercial and Consumer Tribunal (CCT). This Application[12] was later withdrawn by Titan, on 11 November 2009, after works were performed by it in response to direction 33206.
New evidence, another inspection, and a further QBSA direction
[21] Withdrawal of the initial application for review of direction 33206 did not however mark the end of this matter. On 16 April 2010, the Second Applicants provided the QBSA with another engineering report, this time prepared by Mr Peter Wright of Hughes, Beal and Wright Pty Ltd ('the first Wright report'). On the same date the QBSA notified Titan that it intended to conduct a further inspection.[13]
[22] That further inspection took place on 23 April 2010. As the result of it, on 29 April 2010, the QBSA made a further direction to rectify (No. 34780), the relevant portions of which specify:
The south east corner of the main slab to the enclosed section of the structure exceeds allowable performance tolerance of AS2870 appendix C in regard to local deviation of slope.
The southern awning slab exceeds the allowable performance tolerances of AS2870 Table 4.1 in regard to the maximum differential footing movement.
[23] In response to receipt of direction 34780, Titan commenced another application for review this time before QCAT, on 1 June 2010. Titan also commissioned its own engineering report from Mr Peter Larkin.[14] Mr Larkin's report is dated 3 September 2010, yet should be read in conjunction with a supplementary report prepared by him on 20 June 2011, that expresses the opinion that the soil classification for the site is "H".[15]
[24] The first Wright report (which was accepted by the QBSA), makes the point that soil testing reveals the shed to have been constructed upon soil with reactivity characteristics commensurate with those for a class 'E' ("extreme") site. Further, Mr Wright opines that the Australian Standard for residential slabs and footings (AS2870) constitutes a reasonable and appropriate standard to apply to the design and construction of the subject slabs, yet these do not comply with that standard - at least not in those respects that were subsequently raised by the QBSA, in direction 34780 (see [22], above).
[25] In contrast, Mr Larkin observes that the shed is a 'class 10a' non-habitable structure, intended only for use as a farm shed. Because of that, Mr Larkin opines that compliance with AS2870 is not mandatory. Moreover, Mr Larkin concludes that despite some observed heaving and cracking in the slabs, the structure is nonetheless performing adequately in accordance with the performance requirements specified by part 2.1 of the Building Code of Australia ('BCA') for farm sheds.
[26] It is this conflict of opinion between the two experts that really forms the factual parameters in this application for review of QBSA direction No. 36037.
[27] As is common in these types of proceedings, an expert's conclave between Mr Wright and Mr Larkin, and then a joint report from both of them was ordered by QCAT, in an effort to narrow the issues in dispute. The conclave was convened on-site on 3 November 2010, and the joint report[16] was provided on 10 November 2010.
[28] Although I am required to have regard to all of the evidence, the joint expert report requires particular attention. To summarise, the joint report notes:
The building as constructed is a 'class 10a' (non-habitable) building, and is described as "rural".
No soil testing was conducted prior to construction.
Soil testing obtained by Hughes Beal and Wright Pty Ltd indicates that the soil has class "E" reactivity (extremely reactive). Although not expressed in the joint report, I here interpolate that Mr Larkin also arranged independent soil testing, and on the basis of that testing Mr Larkin is of the view that the site is a class "H" (highly reactive) rather than class "E" site. This conclusion is expressed in Mr Larkin's supplementary report, dated 20 June 2011 (Exhibit 5).
The footing and slab drawings provided by Titan to customers specify the standard design footings to be suitable for class S to class M soil types (slightly to moderately reactive), yet also recommend obtaining engineering advice for class E and H sites.
AS2870 is not a mandatory standard when designing and constructing a footing and slab system, although it does afford a "deemed to comply" method of complying with the requirements of the BCA. Alternative engineering solutions are permitted in order to satisfy Building Code of Australia (BCA) performance requirements.
The relevant performance requirements are those specified in the BCA under heading BP1.1.
Clause 3.2.5(b) of the BCA provides that class 10 buildings may use footing systems for one class of soil reactivity less severe than that found upon testing than that required in the case of house construction.
There is clear evidence of uncompacted fill in the "fill" component of this cut and fill site.
As constructed, the slab system does not comply with AS2870 for a type H site, even when applying the 'one class less' design relaxation allowed by clause 3.2.5(b) of the BCA, in the case of class 10a buildings. In oral evidence both experts also agreed that it appears that the slab system was constructed without footings, on the basis of core sampling later undertaken by Mr Wright.
Both experts attribute the observed failures in the slabs to the presence of uncompacted fill beneath the slabs. Mr Larkin expressing the view that had the site been prepared properly then the slab would have met the BCA performance requirements for a class 10a building. Mr Wright does not agree with that, yet does at least concede that the slab distortion would not have been as pronounced, had the fill beneath the slabs been properly compacted.
The performance of the main slab so far satisfies the requirements of AS2870, except in the south-east corner, where the floor slope exceeds what might be considered acceptable for a residential building.
The southern veranda slab has not performed in accordance with the requirements of AS2870 under "normal" conditions, yet this site presents abnormal conditions.
Mr Wright expresses the view that the slab design in this particular context really required footings in the form of piers, suspending the slab over the uncontrolled fill. Mr Larkin however notes that the contract for the slab construction contains a cross against the box for footings, indicating that the customer had requested a slab to be constructed without footings.
The performance requirements under Part 2.1 of the BCA have all been met, with the exception of P2.1(a)(iii) "local damage and loss of amenity."
[29] After release of the joint experts' report, and notwithstanding that an application for review of direction 34780 was already on foot before QCAT, direction 34780 was withdrawn by the QBSA and supplanted by a new direction (36037), on 18 May 2011. An amended statement of reasons was provided by the QBSA supporting direction No. 36037, on 19 May 2011. [17] These also supplant the statement of reasons for direction 34780 given on 5 June 2010.[18].
[30] The amended statement of reasons provides the reasoning behind the QBSA decision to issue direction 36037. The reasons are based on the conclusions reached in the joint experts' report, dated 10 November 2010.[19]
[31] On 5 May 2011 (by consent), QCAT ordered that direction 34780 should be set aside, and substituted with direction 36037. At that time QCAT also ordered that the First Applicant's application filed before QCAT on 1 June 2010 should be amended, as if it were now an application to review direction 36037.
[32] In the amended statement of reasons (now Exhibit 12), the full basis for direction 36037 is set out in paragraph 6, although it seems tolerably clear (from paragraph 6.5 therein) that the essence of the reasons for Direction 36037 is to be found in a reliance by the QBSA on paragraph 17 of the Joint Experts' Report, that provides.
"What has been constructed is not in accordance with an AS2870 'deemed to comply design' footing system for a class 'H' site. (This takes into account the 'Class 10' relaxation in the BCA). Mr Larkin is of the view that if the as-constructed slab had it been built on a properly prepared site with adequate site drainage it may have performed satisfactorily to date for a class 10a metal clad building. Mr Wright is of the view that had the fill been compacted then the slab would not have suffered as much distortion as it has to date".
[33] There is no dispute that direction 36037 is a reviewable decision pursuant to s 86 of the Queensland Building Services Authority Act 1991 ('the QBSA Act'). Section 87 of the QBSA Act (an "enabling Act" in terms of the language used in s 17 of the QCAT Act) then confers review jurisdiction upon QCAT to review directions made by the QBSA, like that made in Direction 36037.
[34] Once an application for review has been commenced before QCAT, s 20 of the QCAT Act requires the Tribunal to conduct a fresh hearing, in order to produce the correct and preferable decision.[20] This requires that QCAT stand in the shoes of the original decision maker, and determine - on the basis of all of the evidence before QCAT[21] - whether a direction to rectify should be issued to Titan, pursuant to the discretion conferred by s 72 of the QBSA Act'.
[35] As a starting point, therefore, it becomes necessary to understand the scope and application of the power to issue a direction to rectify pursuant to s 72 of the QBSA Act. Relevantly, sections 72(1), 72(2), and 72(5) of the QBSA Act, provide:
72 Power to require rectification of building work
(1) If the authority is of the opinion that building work is defective or incomplete, the authority may direct the person who carried out the building work to rectify the building work within the period stated in the direction. [emphasis added]
(2) In deciding whether to give a direction under subsection (1), the authority may take into consideration all of the circumstances it considers are reasonably relevant, and in particular, is not limited to a consideration of the terms of, including the terms of any warranties included in, the contract for carrying out the building work.
(5) For subsection (1), the person who carried out the building work is taken to include -
(a) a licensed contractor whose licence card is imprinted on the contract for carrying out the building work; and
(b) a licensed contractor whose name, licence number and address are stated on the contract; and
(c) a person who, for profit or reward, carried out the building work; and
[36] Of further relevance, section 72(14) of the QBSA Act then provides that the QBSA is not required to give a direction to rectify if it is satisfied that, in all the circumstances, it would be unfair to do so.
[37] "Building work" is defined in schedule 2 of the QBSA Act and is taken to include "the erection or construction of a building"; or any "site work" related to the erection of construction of a building. I am satisfied that the erection of this shed constitutes "building work", as defined.
[38] "Defective", as that term is used in s 72 of the QBSA Act is also defined (in Schedule 2 of the QBSA Act) in relation to building work to include building work that is either "faulty" or "unsatisfactory". I am also satisfied that the matters here under examination might be sufficient to qualify as "defective" as that term is used in s 72 of the QBSA Act. Ultimately however the question whether building work is defective is a matter that needs to be determined against some normative standard. The real issue in this case becomes the identification of that standard, and in particular, determination as to whether (as is now implicitly contended by the QBSA), the standard is afforded by the Building Code of Australia and/or Australian Standard AS2870.
[39] In and of itself the presence of defective building work is also not sufficient to automatically invoke the powers given to the QBSA by means of s 72 of the QBSA Act. The power is discretionary, and must be exercised in accordance with the overall objects of the QBSA Act. These are set out in s 3, which provides:
(i) to ensure the maintenance of proper standards in the industry; and
(ii) to achieve a reasonable balance between the interests of building contractors and consumers; and
(b) to provide remedies for defective building work; and
(c) to provide support, education and advice for those who undertake building work and consumers.
[40] The Queensland Building Services Board ('the Board') is established by s 8 of the QBSA Act. Pursuant to s 9, one of the roles of the Board is to make policies governing the administration of the Act. Pursuant to s 9A, any policies that are promulgated by the Board thereafter constitute statutory instruments, and take on the same force as if they were subordinate legislation.
[41] On 18 March 2004, the Board issued a 'guideline policy' with respect to the rectification of building work pursuant to s 72 of the Act ('the Defects Policy'),[22] which was gazetted in the Queensland Government Gazette on 27 August 2004. The Defects Policy took effect from 1 September 2004, and still remains operative. The Defects Policy is therefore now an article of subordinate legislation, guiding and informing the exercise of the discretion in s 72. It is as much applicable now during the de novo exercise of the s 72 discretion by QCAT during the determination of this application for review as it was during the original exercise of the discretion, when direction 36037 was originally given, on 18 March 2011.
[42] In so far as is relevant, the Defects Policy provides:
It is a guideline policy of the Queensland Building Services Board that a person who carries out category 1 or 2 defective building work should be required to rectify that building work, unless in all the circumstances rectification work is an unreasonable remedy.
Under section 72(1) of the Queensland Building Services Authority Act 1991 (the Act), if the Queensland Building Services Authority (the Authority) is of the opinion that building work is defective, the Authority may direct the person who carried out the building work to rectify it. In deciding whether to give a direction for rectification of building work, the Act allows the Authority to take into consideration all the circumstances it considers are reasonably relevant. Those circumstances might include any delay by an owner in notifying the Authority of a defect, where the delay:
(a) in respect of a category 1 defect exceeds 3 months after the defect became apparent; or
(b) in respect of a category 2 defect, exceeds:
(i) 6 months after the building work was completed or left incomplete; or
(ii) 7 months, if the owner notified the contractor of the defect within 6 months after the building work was completed or left incomplete.
[43] The defects policy defines 'category 1' defective building work as falling into two sub-categories: listed in the Defects Policy as 'A' and 'B'. These are:
Building work (other than residential construction work causing footing or slab movement) that is faulty or unsatisfactory because it either:
(a) adversely effects the structural performance of the building;
(b) adversely effects the health or safety of persons residing in or occupying a building;
(c) adversely effects the functional use of the building; or
(d) allows water penetration into a building.
Residential construction work that has caused footing or slab movement..../.
[44] In my view, the construction of this shed and its associated slab system does not fall within the definition of "residential construction work", as defined by sections 10, 11 and 12 within Division 2 of the Queensland Building Services Authority Regulation 2003. Therefore, sub-category B within Category 1 defective building work within the Defects Policy is of no application. The Defects Policy goes on to define 'category 2' defective building work as:
For the purposes of this policy, category 2 defective building work is building work that is faulty or unsatisfactory because it does not meet reasonable standards of construction or finish or has caused a "settling in period" defect in a new building.
Examples of category 2 defective building work include:
[45] The conclusion reached in the joint experts' report (Exhibit 6) is that the primary difficulties that are evident with the slab system are "local damage and a loss of amenity" (manifesting as doors not closing properly). This might at least arguably constitute a 'category one' defect (building work that is unsatisfactory for "adversely effecting the functional use of the building"); although it is more probably only a 'category two' defect. Yet, irrespective of whether the damage observed by the joint experts is ultimately categorised as either a 'category one' or 'category two' defect pursuant to the Defects Policy, it is the case that these matters were brought to the attention of the QBSA by the Second Applicants well outside the timeframes contemplated by that policy in the case of either a category one or category two defect. The fact of this delay therefore becomes a specifically relevant (although by no means definitive) circumstance, and is a matter that must bear upon overall questions of fairness to the licence holder, as caused by s 72(14) of the QBSA Act.
[46] Titan contends that the decision to issue a direction akin to Direction 36037 cannot be considered as the 'correct and preferable'[23] decision because the original exercise of the discretion obviously miscarried, because it failed to take into account all of the relevant circumstances by having failed to take any sufficient account of:
(a) The QBSA's own guideline policy in relation to delay;
(b) The original contract, and what the owner had bargained for, given that the owner had thereby agreed to assume responsibility for site preparation and had agreed to a slab system without footings;
(c) The owner's contribution to the nature of the problem, by allowing poor drainage around the perimeter of the slab to cause and/or contribute towards the problems with the slab system;
(d) Allied to each of (b) and (c) (immediately above), the decision to issue direction 36037 failed to place any weight on the considerations of unfairness to Titan, as set out in s 72(14);
(e) The decision placed too much emphasis on Mr Wright's reports, which proceed on the implicit assumption that the shed is the equivalent of residential construction;
(f) The decision to issue direction 36037 failed to have regard for the conclusion expressed in the joint report as to the overall performance of the slab system, wherein the joint experts conclude that the only substantive defect was a minor loss of amenity. Titan submits that this is of far lesser importance in the case of an uninhabited farm shed than would be the case for a residential dwelling; and
(g) Direction 36037 wrongly applies both the BCA and AS 2870.
[47] At the end of the hearing of oral evidence the Second Applicants declined my invitation to make written submissions It follows therefore that Ms Lostroh's oral evidence is reflective of the Second Applicants' position, which in essence is that Titan had promised Ms Lostroh that they would "take care of everything".
[48] On the whole, I felt that Ms Lostroh's evidence, particularly in relation to the critical question as to whom assumed responsibility for site preparation was evasive and unhelpful. In my assessment Ms Lostroh was not a reliable witness.
[49] Although Ms Lostroh gave evidence that she believed that Titan was responsible for everything, and that she could not recall giving any money to Mr Bannon, I do not accept that evidence. The assertion that Titan had total responsibility is fundamentally inconsistent with the plain terms of written contracts (Nos. 64985, 64990 and 64991) where each contract provides that level site preparation was to be the responsibility of Ms Lostroh. Equally, that Ms Lostroh could not recall paying any money to Mr Bannon for earthworks is also not the same as a specific denial of the existence of a separate contract between Ms Lostroh and Mr Bannon. I felt that her answer in that regard was deliberately evasive. Ms Lostroh's evidence on these matters is also inconsistent with the content of Mr Bannon's letter dated 17 June 2009, which is corroborative of the existence of a separate agreement between Mr Bannon and Ms Lostroh as regards site preparation.
[50] Although Ms Lostroh also denied in evidence that she had any subsequent conversation with Mr Bannon like that described in the letter dated 17 June 2009, I do not accept Ms Lostroh's evidence in that regard, either. QCAT is not bound by the rules of evidence and may inform itself in any way it considers appropriate.[24] Although Mr Bannon was not called as a witness, (and hence not cross-examined), it seems to me that the letter dated 17 June 2009 is still a matter to which I might have regard. It should now be obvious from these reasons for decision that the letter dated 17 June 2009 is evidence to which I have attached specific importance. On the balance of probabilities I conclude that site preparation was a matter that was cut short, before it was adequately completed, at the direction of Ms Lostroh.
[51] By its submissions, the Respondent QBSA contends that in all the circumstances it was not unreasonable for the Respondent to issue direction 36037 to the First Applicant, and in particular because:
the site has a soil reactivity of at least class H;
the footing and slab diagram provided by the First Applicant, specify that they are only applicable for Class S (slightly reactive) and Class M (moderately reactive) sites, this notwithstanding that the same documentation recommends obtaining further engineering advice in relation to Class H (highly reactive) and Class E (extreme) sites;
the First Applicant has failed to design a slab system in accordance with the design requirements of AS 2870 for a Class H site;
the First Applicant has failed to construct a slab system in accordance with the design requirements of AS 2870 for a class H site;
the First Applicant, as the principal contractor on site, must assume responsibility for all works carried out in accordance with the contract entered into between the First Applicant and the Second Applicants;[25]
Irrespective of the final intended purpose of the shed, the First Applicant was obliged to ensure that both the design and construction of the slab was suitable for the site, taking into account the soil classification for the site;
The First Applicant was under a positive obligation to ensure that the site had been properly classified and that site preparation was sufficient for the supplied slab design, even in circumstances where the owners (the Second Applicants) had assumed responsibility for site preparation;
The First Applicant has failed to construct a slab with piers in accordance with the supplied design drawings.
[52] As the recitation from Direction 36037 now reproduced in paragraph [5] of these reasons for decision makes clear, direction 36037 does proceed on the clear premise that construction of this slab system did require compliance with the requirements of Clause 3.2.5.2(b) in Volume 2 of the BCA (2006), as well as clause 3.1.5(a) within AS2870.
[53] In order to make the 'correct and preferable' decision, a great deal now turns on the preliminary question: whether clause 3.1.5(a) of AS2870 and clause 3.2.5.2(b) in Volume 2 of the BCA apply in the specific case of a class 10a structure, erected in a rural context?
Is the Building Code of Australia (BCA) applicable?
[54] Pursuant to the Building Act 1975, building work is comprised of either "assessable" building work (s 20); "self assessable" building work (s 21); or is otherwise regarded as "exempt" building work (s 22), for the purposes of the regime of assessment required by the Sustainable Planning Act 2009 ("the Planning Act"). It is then s 30 in the Building Act 1975 that requires that assessable building work and self-assessable building work be assessed against the normative requirements of, inter alia, the BCA.
[55] Section 22 of the Building Act 1975 provides that building work is exempt from the regime for assessment (including therefore any requirement for assessment against the requirements of the BCA) if it is prescribed, pursuant to a regulation. Pursuant to regulation 5 of the Building Regulation 2006, Class 10 structures erected on land used for what may be broadly termed as agricultural purposes, that are also not within 200 metres of a road or a boundary of the land on which the class 10 structure is situated are prescribed as being exempt building work.
[56] It is not in dispute that this shed has been erected on land used for agricultural purposes, and nor is it in dispute that the shed is situated at a location that is more than 200 metres from either a road or a boundary of the land on which it has been constructed. Accordingly, I conclude that this shed does qualify as "exempt" building work pursuant to s 22 of the Building Act 1975, and that its construction did not require an assessment against the requirements of the Building Code of Australia (BCA) for purposes of the Planning Act.
[57] At least arguably it might be contended that the exemption from conformity with the requirements of the BCA - as raised by s 22 of the Building Act 1975 - relates only to an exemption from the need to comply with the BCA for the specific purposes of the Planning Act. By extension, it might then be claimed that compliance with the BCA may nonetheless be required for some other reasonable purpose: such as (for example), the maintenance of proper standards in the building industry. Although at least considered by me, ultimately, I am not persuaded by that line of reasoning. One of the objects of the Building Act 1975 is to regulate building work, and that object is achieved by a regime for assessment that contemplates that some building work is exempt from the regime.
[58] In my view, s 72 in the QBSA Act must be seen to synchronise with the Building Act 1975, such that it would be wrong, in principle, to mandate rectification work to comply with the BCA when the Building Act 1975 itself contemplates that there are exempt structures that do not need to comply with the BCA. To now require - pursuant to s 72 of the QBSA Act - that a structure be constructed in conformity with the BCA when the Building Act 1975 itself recognizes that such a building is exempt from needing to comply with the BCA would amount to an instance of regulatory over-reach. This can scarcely be regarded as an outcome in keeping with the objects of the QBSA Act. In simple terms, recognition of an existing exemption under s 22 in the Building Act 1975 becomes another of the relevant circumstances that should go towards the proper exercise of the discretion in s 72 of the QBSA Act. Because this shed has been erected in a rural context it is not required to comply with the BCA. The result would very obviously be different had the same prefabricated shed been erected in a residential backyard.
[59] The evidence[26] before QCAT, which I accept, is that AS2870 is not a mandatory standard, although reliance on it will afford a "deemed to comply" means by which to achieve the performance requirements of the BCA. Previously in these reasons I have found that there is no requirement to comply with the BCA in the case of this particular shed, given the exempt agricultural context in which it has been erected. The next logical question is whether in the specific context of this case AS2870 raises "stand alone" compliance requirements, sufficient to form the basis to issue a direction to rectify pursuant to s 72 of the QBSA Act?
[60] Clause 1.1 of AS2870 provides that the Standard:
"sets out the requirements for the classification of a site and the design and construction of a footing system for a single dwelling house, townhouse, or the like. [emphasis added]
The Standard may also apply to other forms of construction including some light industrial, commercial and institutional buildings if they are similar to houses in size, loading and superstructure flexibility."
[61] It is beyond contention that this shed is not a dwelling house. Use of the non-mandatory term "may" in clause 1.1 indicates that AS2870 can also be applied to other forms of construction, if it is appropriate. However I am not satisfied that this shed is sufficiently similar to a house in the manner contemplated in clause 1.1 to make the standard applicable; nor even that it is possible to apply AS2870 in a "stand alone" manner, particularly given the evident role of AS2870 as a means by which to attain conformity with the BCA for footing designs. My conclusion to that end is particularly driven by the precise circumstances in this case in which the contract signed by Ms Lostroh indicates that the slab system that she had ordered was to be constructed without footings.
[62] On the basis of the conclusion reached in the joint experts' report, the defects in the slab system relate primarily to a loss of local amenity. Although arguably capable of being categorised as a category one defect, it is more likely that this constitutes only a category two defect under the Defects Policy. Ultimately this is not a matter that I need resolve, as either way, these matters were not brought by way of complaint to the QBSA until well after the expiration of the periods nominated in the Defects Policy for either category one or category two defects. To my mind, the length of that delay becomes a material consideration to which regard must also be had, when determining whether to issue a direction to rectify under s 72 of the Act. The greater any such delay then the greater is the risk of unfairness to the license holder; s 72(14). In my view it is not fair to Titan to issue a direction to rectify given the appreciable and unexplained delay in bringing the matter to the attention of the QBSA.
[63] In this case the relevant circumstances that go to the exercise of the discretion is s 72 of the QBSA Act would appear to be:
(i) the shed is constructed in a "rural" "agricultural" context, wherein construction is exempt from inter alia, the Building Code of Australia;
(ii) that AS2870, when properly considered, does not apply in this specific instance;
(iii) that notwithstanding the non-application of the BCA, the conclusion expressed in the joint experts' report (Exhibit 6) is that the relevant performance requirements stipulated in the BCA under P2.1 have still been met, apart from (iii) "local damage and loss of amenity". Local damage and loss of amenity relates to doors not closing properly, which is a matter that is regarded by the joint experts as being of reduced importance in the case of a class 10 building;
(iv) the significant delay by the Second Applicants in bringing a complaint to the QBSA, well outside the timeframes specified within the Defects Policy;
(v) the terms of the contract, whereby Ms Lostroh assumed responsibility for level site preparation (which ought reasonably be taken to include the need for a soil survey); and wherein the contract specified that the slab system was to be constructed without footings;
(vi) the conduct of the Second Applicants, with the evidence accepted by QCAT being that Ms Lostroh instructed that site preparation works be concluded prematurely; and
(viii) the further conduct of the Second Applicants, by their decision to locate shipping containers near to the slab system, and in a location that adversely impacted on surface water drainage, thus likely exacerbating the problems caused by moisture reactivity in the uncompacted fill beneath the slab system.
[64] I conclude that the combination of all of the aforementioned circumstances now militates against the exercise of the discretion to issue a direction to rectify pursuant to s 72(1) of the QBSA Act. Adopting the language used in the Defects Policy, I conclude that proper consideration of all the circumstances of this case leads to the conclusion that rectification affords an unreasonable remedy.
[1] Pursuant to s 24 of the QCAT Act I set aside the decision of the QBSA made on 18 March 2011 to issue direction to rectify No. 36037. In lieu of that decision I make a determination that no rectification works are required by the First Applicant, in response to the Joint Experts' Report.
[1] By Review Application QR220-09 the Second Applicant sought to challenge a QBSA decision dated 29 June 2009 not to direct the First Applicant to rectify building works associated with the slab system.
[2] There are a series of three adjoining slabs for the shed and the two awnings. For convenience, these will be referred to throughout the remainder of these reasons as 'the slab system'.
[4] Annex "RW-2" to the affidavit of Ronald Webb (Exhibit One).
[5] These category one defects were rectified by Titan.
[8] Transcript, p. 125 lines 35-39; p. 127 lines 29-30; p. 128 line 4; p. 135 lines 11-13.
[9] Transcript, p. 131, line 47; p. 132 lines 1-34; p. 133 lines 40-46; p.134 lines 1-7.
[10] Annexure "RW-4" to exhibit one in these proceedings.
[13] The Wright report is dated 14 April 2010. It comprises part of Annex "RW-10" to exhibit one.
[14] Now exhibit 3 in these proceedings.
[19] Annexure "SOR-2A" to Exhibit 12, and Exhibit 6.
[21] Feodoroff v QBSA [2005] CCT Q035-05 at [23].
[25] Brett Matthew Barry v QBSA [2011] 451; McNab Constructions Australia Pty Ltd v QBSA [2010] QCA 380.
Titan Enterprises (Qld) Pty Ltd and Ors
Queensland Building Services Authority [2012] QCAT 389