//
[2015] QCAT 106
General information, not legal advice.
Queensland Civil and Administrative Tribunal
2015-04-10
Original judgment source is linked above.
Zhang v Queensland Building and Construction Commission [2015] QCAT 106
GENERAL ADMINISTRATIVE REVIEW - review of decision not to direct rectification of building work - whether work performed was "defective" - whether Category 1 or Category 2 defective building work - whether unfair to the contractor to direct rectification
Queensland Building and Construction Commission Act 1991 (Qld), s 72, s 86, s 87, Schedule 2
Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld), s 37, s 60
Statutory Instruments Act 1992 (Qld), s 7, s 9
Barry & Anor v Queensland Building and Construction Commission [2015] QSC 50
Factory Direct Pools Pty Ltd v Queensland Building Services Authority [2013] QCAT 34
Queensland Building and Construction Commission represented by in-house Lawyer, Ms B Gilbey
[1] This is an Application to review a decision of the Respondent ('QBCC') of 3 September 2014 (the Decision)[1] not to give a direction to rectify building work performed by a contractor at a property situated at 15 Banika Street, Mansfield in the State of Queensland (the Property) owned by the Applicant Mr Chris Zhang (Mr Zhang).
[2] The building work the subject of the Decision related to the construction of a timber retaining wall and 1.2 metre high "ship lapped" timber fence (the Work) performed by Mr Anthony Dwyer trading as Serene Scene Landscapes (the Contractor) in 2011.
[3] I accept the QBCC's submission that the Decision is a "reviewable decision" pursuant to s 86(1)(e) of the Queensland Building and Construction Commission Act 1991 (Qld) (the Act). That subsection refers to a decision to give a direction to rectify or remedy or not to give the direction. In the present case, the Decision was a decision not to give a direction to rectify the building work performed by the Contractor.
[4] The Tribunal has jurisdiction to review the Decision by virtue of s 87 of the Act and s 9(1) and s 9(2)(b) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act).
[5] The matter has a somewhat lengthy history. It is worthwhile setting out the history to identify Mr Zhang's concerns.
[6] The Work was the subject of a contract between Mr Zhang and the Contractor entered into on or about 6 May 2011.
[7] Between 6 May 2011 and 20 August 2011, the Contractor carried out the Work.
[8] On 21 September 2011, the QBCC received a complaint form from Mr Zhang in relation to the Work.[2] Relevantly to the present issue, Mr Zhang complained about the drainage to the retaining wall. Mr Zhang made three specific complaints about the drainage. First, that the "Ag pipe" (agricultural pipe) was under or outside of the sleepers and not inside the wall as it should have been. Secondly, that the pipe was installed piece by piece throughout the entire retaining wall. Thirdly, that the builder had used a large amount of dirt to cover up defects of the wall and drainage.
[9] By letter dated 10 October 2011 to the QBCC, Mr Zhang provided additional material including additional items of complaint.[3] The additional items of complaint related to the drainage. They were numbered sequentially from the previous numbering adopted by Mr Zhang. Adopting that numbering, the further complaints were as follows. Fourthly, following a thunderstorm Mr Zhang noticed that the "Ag pipe" was covered in the mud from the dirt that the Contractor left there and the mud sealed the slots of the Ag pipe disabling the function of the drainage. Fifthly, the drainage did not have an outlet. Sixthly, the Ag pipe was not encased in a "sock".
[10] On 4 November 2011, Mr Scott MacDonald, a building inspector in the employ of the QBCC, attended at the Property (with the Contractor's representative) and conducted an inspection in relation to the complaint items.
[11] Mr MacDonald prepared an "Initial Inspection Report" dated 9 November 2011 (the 2011 report).[4] With respect to the drainage system, Mr MacDonald found that there was a "Category 1" defect which he described as "Inadequate subsoil drainage system". The Notes to the 2011 report included the following:
the drainage pipe was not "socked" (filtered) therefore allowing "fines" (soil) to enter the pipe preventing the effective discharge of groundwater accumulating behind the wall;
the inspection determined that the 100 mm diameter pipe installed to the underside of the bottom "wale" would not allow the effective discharge of potential groundwater accumulating to the earth side of the wall due to its location;
the inspection did not identify the drainage pipe discharging to an appropriate point at "atmosphere" (a photograph was included in the report with the notation "No evidence of drainage pipe discharging to atmosphere");
the inspection revealed that the defect is adversely affecting the structural integrity or performance of the structure or constitutes a health or safety issue (and therefore the "licensee" will be requested to rectify).
[12] The statement of reasons states that by letter dated 11 November 2011 the QBCC requested the Contractor to carry out specified works within 28 days.[5] The works were described as:
The completion of the subsoil drainage system located to the earth side of the timber sleeper retaining wall does not comply with the engineer designed drawings (East Coast Geotechnical Pty. Ltd. - Ref. No. G11/033 dated 11th February 2011) therefore preventing the free flow of ground water to an appropriate point of discharge.
[13] The statement of reasons states that on 2 December 2011, Mr MacDonald attended the Property, conducted a "reinspection" and determined that the Contractor had attended to the item in the Request to Rectify. As noted below, no evidence has been adduced by the QBCC as to what, if any, rectification work was performed by the Contractor.
[14] By letter dated 2 December 2011 from the Building Services Authority to Mr Zhang it was stated:
I refer to the telephone discussion on 1 December 2011, when you advised that the contractor had attended to the items listed in letter dated 11 November 2011.
No further action will be taken by BSA and your complaint will now be closed.
[15] Mr Zhang states that he never told Mr MacDonald this.[6] Mr Zhang's evidence is unchallenged and I accept this evidence.
[16] On 30 January 2014 the QBCC received a second complaint form from Mr Zhang in relation to the Works.[7] The Complaint Form is dated 27 January 2014 and Mr Zhang also submitted with it a letter dated 28 January 2014 and two photographs date stamped 29 August 2013. The second complaint was that the drainage of the retaining wall was defective. Specific reference was made to the fact that the drainage pipe had not been socked. The letter of 28 January 2014 referred to this issue and also to the previous finding that the drainage did not have a discharge outlet. The final paragraph of the letter stated:
As you can see on the date-stamped photos I took on 29/08/2013 (attached), Mr Dwyer has not rectify [sic] the defects, especially the drainage pipe is still not socked. As a result I would like the QBCC to take further actions against Mr Dwyer.
[17] By a letter from the QBCC to Mr Zhang dated 14 May 2014 it stated, among other things, in relation to the complaint received by the QBCC on 30 January 2014:
BSA previous inspection report dated 4 November 2011 noted that agricultural drain was required to be socked, it was during the re-inspection of the 2 December 2011 that the Building Inspector noted that the agricultural drainage line had been rectified and that the drainage line had been wrapped in the geo-fabric as an alternative to the socked arrangement which is a compliant rectification method.
During the re-inspection, it was determined by BSA that the rectification works undertaken by Anthony Dwyer were rectified satisfactorily however this was relayed to you incorrectly by letter. QBCC should have advised that a re-inspection had occurred and QBCC was satisfied that rectification works undertaken.
Your recently lodged complaint dated 30 January 2014 does not identify any defective building works undertaken by Mr Dwyer.
[18] On 20 August 2014, Mr William Duval (Mr Duval), an Inspector with the QBCC, attended at the Property with Mr Andrew Sparks, an assessment officer in the employ of the QBCC and Mr Robert Hughes (Mr Hughes) a consulting engineer.
[19] Mr Duval prepared a report dated 28 August 2014 (the 2014 report).
[20] The 2014 report extracted five paragraphs of an email sent by Mr Hughes on 20 August 2014 at 12:25pm.
[21] The 2014 report stated, among other things:
This report has concluded that although the drainage line is clearly blocked and not installed as per the original engineering documents, we base our decision on the advice received from Mr. Robert Hughes the QBCC consulting engineer that this drain is superfluous and has had no adverse effect on the performance or functionality of the retaining wall.
Therefore in accordance with QBCC policy we find the drainage of the retaining wall is defined as a Category 2 Defect part (a).
[22] The letter of 3 September 2014 notifying the Decision stated, among other things:
In reviewing your complaint I have noted that the work was completed on 20 August 2011, you notified Mr Anthony John Dwyer of the defects on 8 September 2011 and advised QBCC on 30 January 2014.
Unfortunately, you did notify QBCC of the defects within the required time period. For this reason, QBCC will not be issuing a Direction to Rectify to Mr Anthony John Dwyer.
[23] The letter makes no reference to the items complained of by Mr Zhang to the QBCC in 2011 as identified above.
[24] On 9 September 2014 Mr Zhang filed his Application to review the Decision.
[25] The statement of reasons is dated 20 October 2014 and was received by the Tribunal on 21 October 2014.
The purpose of a review conducted by the tribunal in its review jurisdiction is to produce the correct and preferable decision following a fresh hearing on the merits. The Tribunal must make its decision according to the applicable law, and based on the evidence presented to it. In effect, the Tribunal stands in the shoes of the original decision-maker, in this case the QBSA, and makes the decision anew. The relevant facts must be established to the reasonable satisfaction of the Tribunal. (footnotes omitted)
[28] Section 72 of the Act deals with the power to require rectification of building work and remediation of consequential damage.
[29] Part 6 of the Act was replaced, in 2014, by the Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld) (the Amendment Act).[10] The relevant provisions commenced on 15 December 2014.
[30] In my view, by virtue of s 60(3) of the Amendment Act, the former s 72 continues to apply to the present case.
[31] Under the former s 72(1) of the Act, the QBCC may direct the person who carried out building work to rectify the building work (within the period stated in the direction) if the QBCC is of the opinion that building work is defective or incomplete.
[32] In deciding whether to give such a direction, the QBCC may take into account "all the circumstances it considers are reasonably relevant" (and in particular, it is not limited to a consideration of the terms of the contract for carrying out the building work).[11]
[33] Further, the QBCC is not required to give a direction under s 72 for the rectification of the building work if the QBCC is satisfied that, in the circumstances, it would be "unfair" to the person who carried out the building work to give the direction.[12]
[34] The statement for reasons referred to the "Rectification of Building Work Policy"[13] which took effect on 12 March 2010 when it was published in the Queensland Government Gazette. The QBCC contends that the Rectification Policy was a statutory instrument that was subordinate legislation by virtue of s 7 and s 9 of the Statutory Instruments Act 1992 (Qld).
[35] On the basis that the Rectification Policy is stated to be a "guideline policy", I find that it is a statutory instrument being a "guideline of a public nature" (see s 7(3) of the Statutory Instruments Act).
[36] With respect to the question of whether the Rectification Policy is subordinate legislation for the purposes of the Statutory Instruments Act 1992 (Qld) (see s 9(1)(a)-(d) of that Act), I make no finding in this regard because no argument was directed to this issue and such a finding is unnecessary to determine the merits of the present case.
[37] In my view, the issues raised by s 72 of the Act require a consideration of:
whether "building work" was carried out;
the identification of the person who carried out the building work;
whether the building work is "defective or incomplete";
whether or not the discretion to issue a direction to rectify should be exercised[14] (having regard to all of the circumstances considered to be "reasonably relevant" including whether, in the circumstances, it would be unfair to the person who carried out the building worked to give the direction).
[38] There is no dispute that the work performed constituted "building work" within the meaning of Part 6 of the Act. The definition of "building work" means, among other things, the erection or construction of a building.[15] "Building" includes any fixed structure and the examples of a fixed structure include a fence other than a temporary fence. Neither the retaining wall nor the timber fence could be classified as a temporary fence.
Identity of person who carried out the building work
[39] There is no dispute that the work was performed by Mr Anthony Dwyer trading as Serene Scene Landscapes.
[40] Mr Zhang submitted that the building work was defective because the drainage behind the retaining wall was not constructed in accordance with the engineer's drawings or a document produced by Timber Queensland (which Mr Zhang referred to as an Australian Standard). This document is referred to below.
[41] Mr Zhang referred to the definition of "Defective building work" in the Rectification Policy, which refers to building work that is faulty or unsatisfactory including, for example, work that does not comply with the Building Act 1975 (Qld), the Building Code of Australia or an applicable Australian Standard.
[42] During cross-examination of Mr Hughes, Mr Zhang sought to make the point that an item of work may be defective even if it operates as it was intended to operate. He gave an example of a door to a shopping centre which operated perfectly well as a door but which was inadequate for allowing sufficient people to exit the door if necessary. As I understood Mr Zhang's point, it was that the Work performed by the Contractor could still be defective because of the inadequate drainage even in the retaining wall itself was structurally sound.
[43] The material before the Tribunal included two photos taken in 2013, submitted by Mr Zhang, which showed exposed sections of piping which were not socked and were clogged with soil.[16]
[44] Mr Zhang further submitted that the defective work fell within "Category 1 defective building work" within the meaning of the Rectification Policy.
[45] Mr Zhang relied on the evidence in his statement (in addition to material annexed to the statement of reasons). Mr Zhang did not call any witnesses.
[46] The QBCC submitted that the building work was not defective and relied on the evidence of Mr Hughes as supporting that conclusion.
[47] The QBCC called two witnesses, Mr Duval and Mr Hughes.
[48] Mr Duval did not carry out any "destructive testing" to determine whether there was agricultural piping located behind the retaining wall. However, he observed a number of sections of piping which were exposed along the outside of the retaining wall. He stated that the exposed sections of the drainage piping had no "socking" or geotextile fabric around them and the piping was clogged. Mr Duval gave evidence that the parts of the drainage piping that he could see were not "satisfactorily installed"; the installation of the drainage was "unsatisfactory".
[49] With respect to the direction to rectify given to the Contractor in 2011 (Annexure "SOR - 5"), Mr Duval was unable to provide any evidence as to whether any, and if so what, rectification work had been performed in response to the direction to rectify.
[50] Paragraph 32 of the statement of reasons states that the retaining wall:
is constructed in accordance with the engineer's design;
provides adequate provision for drainage behind the structure;
performs a function for which was designed.
[51] In oral evidence, Mr Duval stated that the reference to the retaining wall being constructed in accordance with the engineer's design was a reference to the retaining wall itself and was not a reference to the drainage shown in the engineer's drawings. With respect to the matters set out in subparagraphs (b) and (c), Mr Duval said that he was relying upon the evidence of Mr Hughes. This also applied to the statement in paragraph 33(b) of the statement of reasons that the installation of any agricultural drain would be inconsequential as the structural performance of the wall would remain the same.
[52] Mr Hughes is a Structural and Geotechnical Engineer. In his written statement,[17] Mr Hughes stated that the retaining wall appeared intact and there was no evidence of structural failure.[18] Mr Hughes also annexed a copy of the email he sent to the QBCC on 20 August 2014 in which he confirmed his findings following the site inspection earlier that day. The content of this email was set out in the 2014 report.
[53] In paragraph 9 of his statement, Mr Hughes' stated that:
as there is a gap between each of the horizontal timber sleepers forming the retaining wall structure, it is not possible for water to build up behind the wall;
the 100mm diameter agricultural drainage was "superfluous"; whether or not the drainage was installed, the structural performance of the wall would remain the same.
[54] It was also stated in Mr Hughes' email:
there never was a "Category 1" defect with the retaining wall;
the 100 mm drain at the front of the retaining wall had its slots blocked by soil, and was "virtually ineffective", however this is not an issue because the drain was superfluous.
[55] In his oral evidence, Mr Zhang put to Mr Hughes a document issued by Timber Queensland headed "Technical Data Sheet Timber Retaining Walls for Residential Applications".[19] Mr Hughes referred to this document as an "industry advisory brochure" and that Timber Queensland was a "reputable organisation". He said it was not an Australian Standard and he could not recall any Australian Standards dealing with timber retaining walls and drainage. In the absence of such a standard, the Technical Data Sheet was something that people "reasonably" tend to use according to Mr Hughes.
[56] Mr Hughes agreed with Mr Zhang that the design at Figure 2 of the Technical Data Sheet was similar to the design adopted by the engineer, East Coast Geotechnical Pty Ltd, in designing the retaining wall for the Property.[20] Mr Hughes noted the engineering design provided that the "walers" (the horizontal timber boards) were to be "NOT SEALED BETWEEN".
[57] Mr Hughes maintained during cross-examination that the drainage (the agricultural piping) was unnecessary. Mr Hughes said that the drainage, as designed, would only ever have carried a "minuscule amount" of water because water leaked out through the slots between the horizontal timber boards (under pressure). He also gave evidence that he considered that the retaining wall was structurally stable and would have the same life and perform in the same way regardless of the installation of the agricultural piping. Mr Hughes expressed the view that the work was not "defective".
Conclusion as to whether the building work is defective
[58] The term "defective" is defined in Schedule 2 of the Act as follows:
defective, in relation to building work, includes faulty or unsatisfactory.
[59] The words "faulty" and "unsatisfactory" are not defined in the Act.
[60] In the Macquarie Dictionary (5th edition), the definition of:
"faulty" includes "having faults or defects: faulty workmanship";
"fault" includes "a defect or imperfection; a flaw; a failing";
"unsatisfactory" includes "not satisfactory; not satisfying specified desires or requirements; inadequate;
"satisfactory" includes "affording satisfaction; fulfilling all demands or requirements ..."
[61] Mr Duval gave evidence that the parts of the drainage piping that he could see were not "satisfactorily installed". Sections of the agricultural piping were located on the underside or immediately in front of the bottom of the walers. The sections that could be viewed were clogged with soil. In the circumstances, I consider that the work performed was, at the least, unsatisfactory and, as a consequence, defective within the meaning of the Act. In my view, the evidence of Mr Hughes does not detract from this conclusion although such evidence is relevant to categorising the nature of the defective work. In this regard, I reject Mr Zhang's submission that the defective work was "Category 1 defective building work" within the meaning of the Rectification Policy.
[62] Category 1 defective building work" is defined to mean:
defective building work (other than residential construction work causing subsidence) that is faulty or unsatisfactory because it does one or more of the following:
(a) adversely affects the structural performance of the building;
(b) adversely affects the health or safety of persons residing in or occupying a building;
(c) adversely affects the functional use of a building;
[63] Based on the evidence of Mr Hughes, I find that the work was not so faulty or unsatisfactory that it adversely affected the structural performance of the retaining wall (or the timber fence) and did not otherwise satisfy the matters set out in subparagraphs (b) to (d) of the definition of "Category 1 defective building work".
[64] In my view, the defective work was "Category 2 defective building work" within the meaning of the Rectification Policy. It did not meet the expected reasonable standard of construction or finish.
[65] The remaining question is whether or not the discretion to direct rectification of the building work should be exercised.
[66] While primarily contending that the work was not defective, the QBCC also submitted that it would be unfair to direct rectification by the Contractor. The QBCC relied upon two matters. First, that it would be impossible for the Contractor to bring the Work into conformity with the engineering design without the agreement of the owner of the upper neighbouring property. Secondly, that the installation of any "agricultural drain" would be "inconsequential" because the structural performance of the wall would remain the same. I will deal with each of these matters in turn.
[67] Mr Duval's evidence was that if rectification were warranted, it would be necessary to obtain the agreement of the upper neighbouring property owner before any work could be carried out.[21] In oral evidence, Mr Duval stated that it would be necessary to re-excavate to get the bottom section of the wall. While he initially gave evidence that this work would need to be performed from the neighbouring property (which had a swimming pool on it) he subsequently said that he could not state with certainty that the work could not be performed from Mr Zhang's property. However, he also gave evidence that because of the location of the wall and the fill behind it, the excavation would involve excavating into the neighbour's property at the boundary line.
[68] In my view, the need to obtain the consent of an adjoining owner in order to perform rectification work may be, depending on the circumstances, relevant to the issue of whether a direction to rectify would be unfair to the person who performed the building work. However, in the present case there is an absence of evidence as to whether or not the owner of the neighbouring property would consent to any rectification work. Mr Zhang submitted, correctly in my view, that there was a "presumption" on the part of the QBCC that consent would not be given. On the basis of the evidence adduced, I find that the mere possibility that the neighbouring owner would refuse consent to carry out the rectification work is insufficient to found a basis for concluding that it would be unfair for the Contractor to carry out any rectification work.
The structural performance of the retaining wall and the utility of the drainage
[69] As noted above, Mr Zhang's case primarily focused on the fact that the drainage behind the retaining wall was not constructed in accordance with the engineer's drawing or the Timber Queensland Technical Data Sheet.
[70] In my view, the evidence of Mr Hughes is critical to the determination of this issue. His expert evidence was uncontradicted by any other expert evidence and I accept it.
[71] Mr Hughes was of the opinion that:
the agricultural piping was "superfluous";
water leaked out through the slots between the horizontal timber boards and piping behind the retaining wall (as shown in the drawings) would only catch a minuscule amount of water;
the retaining wall was structurally stable;
the retaining wall would have the same life and perform in the same way regardless of the installation of the agricultural piping.
[72] Based on this evidence, I find that the rectification work sought by Mr Zhang (including the installation of new (socked) agricultural piping behind the retaining wall) would be of no utility; it would serve no useful purpose.
[73] The evidence did not identify precisely what rectification work would have been involved in installing drainage in accordance with the engineering drawings and the Timber Queensland Technical Data Sheet. However, at a minimum, it would have required removal of the fill behind the retaining wall, removal of the existing piping, the installation of replacement piping covered in geotextile fabric along the length of the retaining wall (behind it) and replacing the fill. The extent to which this would have involved the removal of part or all of the timber fence and part or all of the retaining wall is unclear. In my view, even the minimum work identified would be substantial. While this matter, of itself, would not ordinarily weigh heavily in refusing to order rectification of defective building work, in my view it is significant when considered in light of the expert evidence of Mr Hughes that the agricultural piping was "superfluous".
[74] In my view, a direction to rectify the building work in circumstances where the new drainage would be superfluous (that is, serve no useful purpose), and the stability, life and performance of the retaining wall would be unaffected, would be unfair to the Contractor.
[75] This is a cogent, and in my view decisive, factor in the exercise of the discretion not to give a direction to rectify.
[76] For the reasons set out above, I find that the correct and preferable decision[22] is that the Contractor should not be directed to rectify the building work performed at the Property.
[77] Pursuant to s 24(1) of the QCAT Act, the decision of the QBCC of 3 September 2014 not to give a direction to rectify the building work performed by the Contractor is confirmed.
[78] With respect to the question of costs, the usual order is that each party should bear the party's own costs of the proceeding.[23] In my view, it is not evident that there are any matters which would support a conclusion that it is in the interests of justice to make any other costs order.[24] However, to accommodate any submission to the contrary, I order that, unless a written submission seeking a different costs order is filed by either party within 14 days of the date of these orders, the parties shall bear their own costs of the Application for review.
[1] See the statement of Mr Zhang dated 7 November 2014 (Mr Zhang's statement), Annexure "Ref. 1".
[2] Annexure "SOR - 2" to the Statement of Reasons for the Decision (the statement of reasons).
[3] Annexure "SOR - 3" to the statement of reasons.
[4] Annexure "SOR - 4" to the statement of reasons.
[7] Annexure "SOR - 6" to the statement of reasons.
[9] [2013] QCAT 34 at [7].
[13] Annexure "SOR - 1" to the statement of reasons.
[14] See Barry & Anor v Queensland Building and Construction Commission [2015] QSC 50 at [17] per Flanagan J.
[15] See paragraph (a) of the definition in Schedule 2.
[16] Annexure "SOR - 6" to the Statement of Reasons (at p 64).
[19] See Annexure "Ref. 3" to Mr Zhang's statement (Exhibit 1) at p 15.
[20] See Annexure "SOR - 3" to the statement of reasons at p 36.
[21] Statement of Mr Duval dated 13 March 2015 at [7(b)].
Zhang
Queensland Building and Construction Commission [2015] QCAT 106