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[2015] WASAT 29
General information, not legal advice.
State Administrative Tribunal (WA)
2015-03-19
Original judgment source is linked above.
The applicant property owner brought a claim against the respondent builder under s 5 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) claiming that the installation of Colorbond Steel wall cladding, rather than Colorbond Ultra Steel, was building work not carried out in a proper and proficient matter, or which was faulty or unsatisfactory.
The respondent raised preliminary legal issues asserting that it was not the appropriate party because it had not selected the wall cladding material. In addition the respondent argued that selection of material does not fall within the definition of a 'regulated building service' and therefore the applicant's complaint does not fall under s 5 of the (WA).
The Tribunal found against the respondent on the above contentions and found that given that the respondent installed the relevant product, that it was the appropriate party. The Tribunal also found that construction of the walls of the dwelling (by whatever selected material) did constitute a 'regulated building service'.
In relation to the complaint that the installation of the Colorbond Steel wall cladding was work not done in a proper and proficient manner, the applicant alleged this was the case because: the builder had ignored the manufacturer's recommendation to install a superior product in its range, being Colorbond Ultra Steel, as appropriate for the relevant marine environment; the builder had not applied s 3.5.1.3 of the Building Code of Australia 2006 which requires a material with the steel properties of Colorbond Ultra Steel to be used for roofs in the relevant marine environment; and on the basis that the wall cladding was not suitable or fit for purpose because it would have a shorter lifespan than the superior product Colorbond Ultra Steel.
The Tribunal found that the respondent had acted in a proper and proficient manner in installing the Colorbond Steel wall cladding because: manufacturer's recommendations are guides only and builders can make informed decisions as to whether they ought to strictly apply those recommendations; s 3.5.1.3 of the Building Code of Australia 2006 clearly did not apply to wall cladding; and the unanimous expert evidence before the Tribunal was that the Colorbond Steel wall cladding was performing well and was fit for purpose. The applicant's claim in respect of the Colorbond Steel wall cladding was therefore dismissed.
Bradshaw v McGuire WASC (FC) (unreported, 30 April 1986)
Eversden and Gary Matson T/A Subiaco Homes [2006] WABDT 67
Lyons & Anor v Jandon Constructions (A Firm) & Ors (unreported, WASC, Library No 980394, 20 July 1998)
Owners of Strata Plan 40998 and Resolute Constructions Pty Ltd [2005] WABDT 114
Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46
Owners of Strata Plan No 47111 and Pyramid Construction Pty Ltd [2012] WASAT 79
1 This matter commenced in the Building Commission as a building service complaint brought by the applicant, Total Investments Pty Ltd, being the registered proprietor of Beach Shack 10 at the Footprints Preston Beach Resort, against the builder who constructed the beach shack, being the respondent, Rapley Wilkinson Pty Ltd. The complaint was lodged with the Building Commission on 31 March 2014 and raised four workmanship complaints as follows:
2 The applicant sought remedial orders to correct the alleged faulty or unsatisfactory workmanship.
3 Although it appeared at the Building Commission that the parties could reach agreement on complaint items 1, 3 and 4, complaint item 2 was strongly disputed by the respondent, and for that reason, the Building Commission referred the entire matter to this Tribunal pursuant to s 11(1)(d) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act).
4 In relation to the one contentious complaint before the Tribunal, the respondent raised the following issues to be determined:
5 The parties filed a number of documents to assist the Tribunal in determining the issues before it, including detailed written submissions filed on behalf of the respondent dated 13 February 2015. In addition, the parties relied upon independent expert reports and oral evidence at the hearing. All of the material filed by the parties was compiled into a hearing book which was accepted into evidence by the Tribunal as Exhibit A.
6 The Tribunal will now proceed to deal with each of the issues.
7 The submissions filed by the respondent relevant to this first issue set out the background facts (page 254 of Exhibit A). Those background facts are not contentious and the Tribunal accepts that the wall cladding product, being standard grade Colorbond Steel, was in fact ordered by a different party to the respondent, being BFRC Pty Ltd, who originally contracted with the developer of the resort.
8 The respondent's submissions assert that the respondent, BFRC Pty Ltd and the developer executed a Deed of Novation with effect from on or about 5 March 2008, pursuant to which the respondent then became responsible for the performance of the works remaining to be performed under the relevant building contract. The submission made by the respondent is that it did not select the wall cladding material and its contractual obligations extended only to the products installation. The respondent submits that if the applicant is asserting that an inappropriate product or a product that was not fit for purpose was selected for the construction of its beach shack, then that claim ought to be brought against BFRC Pty Ltd.
9 It is relevant to note that the applicant is not a party to the contracts that have been mentioned and that this matter does not raise a contractual complaint. The complaint has been brought pursuant to s 5(1) of the BSCRA Act which provides the following:
Subject to the regulations, a person may make a complaint to the Building Commissioner about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory.
10 It is not uncommon for complaints to be brought by home owners against builders in relation to the construction of their homes in respect of a particular item that has been installed and which is subsequently found to be faulty, inappropriate for the intended use or not fit for purpose. Those claims are made even in circumstances where the builder who installed the particular product did not in fact specify the use of that product. Common examples include where an architect, engineer or developer has specified a particular product and the builder has simply installed the product. Workmanship complaints are still raised against the builder in those circumstances pursuant to s 5 of the BSCRA Act.
11 The Tribunal's approach in relation to complaints of this nature has been consistent, in that a builder cannot blindly conform to design or product specifications where it is apparent or ought to be apparent to the builder that they are either defective or faulty or inappropriate for the application, without raising those concerns with the owner and/or relevant contracting party. In the matter of Owners of Strata Plan No 47111 and Pyramid Construction Pty Ltd [2012] WASAT 79 (Pyramid Construction case) which involved an allegation that a water pump set was not of the appropriate design, the presiding Member noted at [59]:
... a builder, not being responsible for the design of any aspect of a building, might yet become liable where a competent builder would have brought a defect in design to the attention of the owner[.]
12 Indeed there are a number of cases decided in this Tribunal, the Building Disputes Tribunal, and indeed in the Supreme Court of Western Australia which have all succeeded against builders in respect of either alleged design issues and/or specification of particular products in respect of which the builder was not either the designer or the entity specifying the particular product (Bradshaw v McGuire WASC (FC) (unreported, 30 April 1986); Lyons & Anor v Jandon Constructions (A Firm) & Ors (unreported, WASC, Library No 980394, 20 July 1998); Pyramid Construction case; Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46; Owners of Strata Plan 40998 and Resolute Constructions Pty Ltd [2005] WABDT 114; Eversden and Gary Matson T/A Subiaco Homes [2006] WABDT 67, amongst others).
13 For the purposes of s 5 of the BSCRA Act, the builder is the appropriate respondent in allegations of this nature. The allegation that is being put is that the product which was installed was not appropriate or fit for purpose for the particular installation and thus the building service has not been carried out in a proper and proficient manner. Given that the respondent installed the Colorbond Steel, it is the correct respondent against which the workmanship complaint can and ought to be raised.
14 Therefore in relation to the first issue the Tribunal finds that the applicant has brought this workmanship complaint against the correct respondent.
Is the complaint about a 'regulated building service'?
15 The second contention raised by the respondent in these proceedings is that an allegation that an installed product is unsuitable or not fit for purpose is not a complaint about a 'regulated building service' and therefore is not a complaint made under s 5 of the BSCRA Act.
16 The definition of 'building service' in s 3 of the BSCRA Act refers to building work as defined in s 3 of the Building Act. 'Building work' is defined in s 3 of the Building Act as:
(a) the construction, erection, assembly or placement of a building or an incidental structure; or
(b) the renovation, alteration, extension, improvement or repair of a building or an incidental structure; or
(c) the assembly, reassembly or securing of a relocated building or a relocated incidental structure; or
(d) the changing of ground levels of land for the purposes of work of a kind mentioned in paragraph (a), (b) or (c) to an extent that could adversely affect land beyond its boundaries; or
(e) site work on any land for the purposes of, or required because of, work of a kind mentioned in
(ii) paragraph (a) or (b) of the definition of demolition work;
but does not include work of a kind prescribed for the purposes of this definition as not being building work;
17 Section 3 of the Building Act also defines 'incidental structure' as:
a structure attached to or incidental to a building and includes
(a) a chimney, mast, swimming pool, fence, freestanding wall, retaining wall or permanent protection structure; and
18 The Tribunal's view is that the installation of the Colorbond Steel wall cladding as the external surface of the beach shack forms part of the construction of the building and therefore falls within paragraph (a) of the definition of 'building work'. Consequently, the applicant's complaint about the wall cladding is a complaint about a 'regulated building service'.
Has the work been carried out in a proper and proficient manner?
19 The final issue to be determined by the Tribunal, and the most contentious issue, is whether the installation of the standard grade Colorbond Steel wall cladding material by the respondent was not carried out in a proper and proficient manner or was faulty or unsatisfactory.
20 The Tribunal had the benefit of expert reports filed by both parties in relation to this issue, appearing at pages 68, 7892 and 98114 of Exhibit A. The applicant relied upon the expert reports and oral evidence of Dr Armand Zurhaar of Zedcon Scientific Services who is a qualified materials chemistry expert with over 25 years of experience in testing, treating and advising in relation to materials such as Colorbond cladding. The respondent relied upon the expert report and oral evidence of Mr Andrew Van der Meer, being a registered builder and qualified civil engineer with over 40 years' experience in the building and construction industry including in relation to advising builders on matters of metal corrosion on roof and wall cladding. The Tribunal accepted that both expert witnesses were independent with expertise in their relevant fields.
21 There are various considerations which 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. In this matter, the following factors were raised by the applicant at the hearing as bearing on this issue:
22 The Tribunal will proceed to address each issue raised by the applicant.
23 Effectively the applicant's position in relation to this issue is that it was not proper and proficient for the respondent to install standard grade Colorbond Steel wall cladding rather than Colorbond Ultra Steel in circumstances where the manufacturer of that product, BlueScope Steel Limited (BlueScope Steel), recommended that Colorbond Steel should only be used in marine environments where the property is over 1,000 metres from breaking surf (page 87 of Exhibit A). The applicant also asserted that as a result of not installing the product recommended by the manufacturer, the applicant was not able to obtain a manufacturer's warranty on the product which would have otherwise been available.
24 The manufacturer's recommendation or guideline which was in circulation at the time that the product was installed is dated November 2003 and titled 'Steel Walling Products Selection Guide' (Selection Guide). Table 1 provides a 'guide for selecting colorbond wall cladding in varying severity of marine environment'. Immediately beneath the Selection Guide table there is a note from the manufacturer as follows:
This is a guide only. Due to the wide variation in the severity of particular environments customers should contact the BlueScope Steel Limited State office for assistance in interpretation of the particular locale.
25 The experts agreed in evidence that the applicant's property was between 700900 metres from breaking surf which places the applicant's property, according to BlueScope Steel's Selection Guide, in the 'moderate' marine environment. The Selection Guide recommends the Colorbond Ultra Steel wall cladding product for properties situated in the moderate marine environment range. Colorbond Steel wall cladding is recommended for properties situated at 1,000 metres or more from breaking surf.
26 A manufacturer's warranty appears to be offered in respect of Colorbond Steel wall cladding when used in compliance with its Selection Guide; that is, when installed in marine environments where the property is at least 1,000 metres in distance from breaking surf. The Tribunal does not intend to refer to the warranty document in any detail, other than to note that the warranty is for 12 years and sets out numerous limitations and qualifications. The warranty was not applied for in relation to the applicant's property and was not obtained.
27 There were many areas of agreement between the two experts during their oral evidence at the hearing. Both experts agreed on the following matters all of which are accepted by the Tribunal:
28 In addition, Dr Zurhaar estimated that the product would continue to perform for between 20 to 30 years and Mr Van der Meer estimated at least 25 to 40 years.
29 The main area of dispute between the experts in their evidence concerned the circumstances in which a builder may depart from a manufacturer's recommendations and therefore the significance or importance of those recommendations. Dr Zurhaar gave evidence that the only circumstances in which a builder could depart from a manufacturer's recommendation is where the builder has either sought information or direction from the manufacturer in relation to the relevant application of the product and the manufacturer has given guidance, or where the builder has 'superior knowledge' of the product over and above that of the manufacturer. Otherwise according to Dr Zurhaar, builders cannot and should not depart from manufacturer's recommendations.
30 Mr Van der Meer disagreed with Dr Zurhaar in relation to the significance of the manufacturer's recommendation in the circumstances of this particular product. Mr Van der Meer said that it is not unusual for builders to depart from manufacturer's recommendations, which are merely guides to be interpreted and applied as appropriate in the circumstances of the relevant construction.
31 In relation to this particular complaint, Mr Van der Meer said that it was acceptable for the builder to depart from the manufacturer's recommendation, given the following circumstances: the product had been on the market for a significant period of time and therefore there was a wealth of knowledge within the industry as to its performance, the builder had particular knowledge of the relevant typography (both experts agreed that between the applicant's property and the breaking surf there were sand dunes, trees, other beach shacks in the complex all of which would act to reduce the intensity of the salt travelling from the breaking surf to the property), and the absence of any Australian Standards or provisions of the BCA addressing the use of the product.
32 The Tribunal finds that the respondent has not breached s 5 of the BSCRA Act merely by departing from the manufacturer's recommendations. We do not accept that the legislation requires that for a building service to be carried out in a proper and proficient manner, builders must comply with all manufacturer's recommendations or guidelines. To reach such a finding would elevate manufacturer's recommendations to a status of legislation rather than what they are recommendations. In our view, manufacturer's recommendations are able to be departed from, provided that builders continue to act in a proper and proficient manner. Where, as here, many years of knowledge and experience have been accrued with a particular product in the building and construction industry, it is appropriate that builders make informed decisions, taking all relevant factors into account.
33 Relevant factors to be taken into account in relation to the cladding selected in this case include distance from breaking surf, but also the particular typography of the area in which the building is being constructed. Both experts agreed that the existing typography would interfere with the travel path of salt from the breaking surf to the applicant's holiday home. This supports modification of a strict application of the Selection Guide in this case.
34 Dr Zurhaar gave evidence that although the BCA does not address metal wall cladding in marine environments, s 3.5.1.3 of the BCA does deal with metal sheet roofing. It provides that in a severe environment described as being within one kilometre of breaking surf, AZ 200 metallic coated steel is required. Unlike Colorbond Steel, Colorbond Ultra Steel is an AZ 200 metallic coated steel product. Dr Zurhaar said that the BCA recommendation for metal roofs in this regard ought to be applied to wall cladding.
35 Mr Van der Meer disagreed, and argued that if the drafters of the BCA wished to set down a requirement for the use of a particular type of product in respect of steel wall cladding then they would have done so. In his view it is not appropriate to apply requirements in relation to steel coated products for use on roofs to walls, which are entirely different installations.
36 We do not accept that the provision regulating metal sheet roofing should be applied to the use of steel coated products for wall cladding. We agreed with Mr Van der Meer that if that was the intent of that instrument, then it would have said so in clear terms. We therefore do not consider that the respondent's failure to apply s 3.5.1.3 of the BCA to the wall cladding application undertaken by it amounts to a failure to act in a proper and proficient manner.
37 Both experts gave evidence, referred to in [27] above, that the product had been performing well, was suitable for its application and fit for purpose, and is expected to last at least 20 years - in excess of the manufacturer's 12 year warranty period. In those circumstances the claim that the installed product was faulty or unsuitable must fail. Section 5 of the BSCRA Act does not compel builders to search for and install superior products. It certainly requires builders not to install clearly defective or inappropriate products but what the applicant is seeking here is the installation of a product with superior characteristics, over and above a product which is adequate for the intended purpose. In the Tribunal's view that is not an appropriate application of the law.
38 The parties have consented to remedial orders in respect of complaint items 1, 3 and 4 and therefore the Tribunal will make remedial orders in relation to those complaint items. In relation to complaint item 2, the complaint is dismissed.
I certify that this and the preceding [38] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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