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Goldfield Projects Pty Ltd v Queensland Building and Construction Commission  QCAT 361
Goldfield Projects Pty Ltd
Queensland Building and Construction Commission
General administrative review matters
3 and 14 June 2016
4 October 2016
APPLICATION TO REVIEW - DIRECTION TO RECTIFY – whether building work defective –– whether Direction unfair.
Statutory Instruments Act 1992 (Qld), s 7.
Queensland Civil and Administrative Tribunal Act 2009 (Qld), ss 20, 24.
Queensland Building and Construction Commission Act 1991 (Qld), ss 72, 86, 87.
R v His Honour Judge Miller and Builder’s Registration Board, ex parte Graham Evans and Co (Qld) Pty Ltd  2 Qd R 446
Ms Cheriden Farthing for the QBCC
McKays solicitors for the applicant
REASONS FOR DECISION
- Goldfield Projects Pty Ltd (Goldfield) seek to review a decision by the Queensland Building and Construction Commission (QBCC) to issue a Direction to Rectify to it in relation to the installation of tiling in two bathrooms. The direction was issued to Goldfield under cover of a letter dated 3 December 2013.
- The bathrooms were part of a new home in Calamvale constructed by Goldfield and completed in November 2012. The owner of the property, Mr Kwok On Cheng (owner), took possession on 17 December 2012.
- On 1 October 2013, the QBCC received a complaint form from the owner relating to building work carried out by the applicant at the property.
- Relevantly, the complaint referred to the master bathroom and second bathroom. In relation to those rooms the complaint said:
Room/area of the house the complaint item is located
Description of building work and complaint item
Water leaked under shower room tiles, water coming from gaps in between tiles.
Loose tiles, water leaking from grout/gaps of tiles, grouting coming loose.
- An inspection of the property was carried out by a building inspector of the QBCC on 2 December 2013. On the basis of the inspector’s report, the QBCC issued a Direction to Rectify to the applicant in the following terms:
DIRECTION TO RECTIFY AND/OR COMPLETE No. 39643
Time period for Completion – (34) days from the date of service of this decision.
- The installation of the tiling to the floor of the shower recess to the ensuite bathroom does not comply with The Building Code of Australia 2011 Volume 2 Clause P2.4.1 Wet Areas as the installation has failed allowing the tiles to become drummy and water to be expressed from between the tiles when pressure is applied affecting the functional use of the shower and endangering the health and safety of the Occupants – pertains to item 1 on the Commission complaint form.
- The installation of the tiling to the floor of the bathroom does not comply with The Building Code of Australia 2011 Volume 2 Clause P2.4.1 Wet areas as the installation has failed allowing the tiles to become drummy and loose and the grout to fail affecting the functional use of the bathroom and endangering the health and safety of the Occupants – Pertains to item 2 on the Commission complaint form.
- On 24 December 2014, Goldfield (the applicant) filed an application to review the decision to issue the direction.
- A tiling expert, Mr Frank Moebus was engaged by the QBCC to inspect the bathrooms at the property and provide a Report. An inspection was carried out on 14 January 2014 and a report provided, dated 28 January 2014.
- In about July and August 2015, Mr Robert Paterson, a licensed builder engaged by the QBCC, carried out rectification work in the main and second bathrooms. Mr Paterson addressed the defects in the direction but also further defects in the work which, in the view of the QBCC, became “reasonable and necessary after the commencement of the rectification work”.
The review framework
- The Tribunal is required to stand in the shoes of the QBCC in the exercise of its discretion as to whether a builder should be directed to rectify defective building work. The Tribunal, on review, is required to produce the correct and preferable decision and to proceed by way of a fresh hearing on the merits. The Tribunal can confirm or amend the decision, set aside the decision and substitute its own decision, or set aside the decision and return the matter for reconsideration to the decision-maker.
The statutory framework
- The parties agreed that the relevant reprint of the QBCC Act was that which was current at the time the direction to rectify was issued on 3 December 2013. This is reprint “current as at 1 December 2013”.
- The discretionary power to issue a direction to rectify derives from s 72 of the QBCC Act. Section 72(1) provides:
If the commission is of the opinion that building work is defective or incomplete, the commission may direct the person who carried out the building work to rectify the building work within the period stated in the direction.
- Before exercising the discretion to issue a direction the following pre-conditions must be satisfied:
- the work is “building work”;
- it was defective or incomplete; and
- the person to whom the direction was issued, carried out the work.
- Once the pre-conditions are met, the Tribunal has the power to decide whether to issue a direction. In exercising the discretion, the Tribunal can take all circumstances it considers reasonably relevant into account. These circumstances are not limited to a consideration of the terms of the contract for carrying out the building work.
- Section 72(14) provides that:
The commission is not required to give a direction under this section to a person who carried out building work for the rectification of the building work if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction.
- The Queensland Building Services Board (Board) made a Rectification of Building Work Policy (the Rectification Policy) which deals further with when it may be unfair or unreasonable to issue a direction. The Rectification Policy, having been gazetted, is a statutory instrument which must therefore be applied by the Tribunal in reaching its decision. The relevant policy is the one that was current at the time the direction was issued. This is the policy approved by the Board on 12 May 2010 and which took effect on 1 July 2010.
- Under s 72(3), the direction must give the builder at least 28 days to do the rectification work required by the direction unless the Tribunal is satisfied that, unless a shorter period applies:
- a substantial loss will be incurred by, or a significant hazard would be caused to the health or safety of, a person because of the defective building work; or
- the defective building work will cause a significant hazard to public safety or the environment generally.
- Further, s 72(4) provides that:
Subject to subsection (3), the period stated in the direction must be a period the commission considers to be appropriate in the circumstances.
- Generally, a direction to rectify must be given within 6 years and 3 months of the building work having been completed.
- Failure to comply with a direction is an offence and can have serious consequences in terms of a builder’s licence.
Was the work “building work”?
- “Building work” is defined in Schedule 2. It provides:
Building work means-
(a) the erection or construction of a building; or
(b) the renovation, alteration, extension, improvement or repair of a building; or
(c) the provision of lighting, heating, ventilation, airconditioning, water supply, sewerage or drainage in connection with a building; or
(d) any site work (including the construction of retaining structures) related to work of a kind referred to above;
- The work involved in the construction of the bathrooms, which includes tiling, falls within the meaning of “construction of a building”. The tiling in both bathrooms, in my view, therefore falls within the meaning of “building work” for the purposes of s 72 and is not excluded by regulation.
Was the work defective?
- The term “defective” is defined in Schedule 2 to mean “in relation to building work, includes faulty or unsatisfactory.” The Rectification Policy picks up that definition and adds that it “includes, for example, work that does not comply with the Building Act 1975, Building Code of Australia or an applicable Australian Standard.”
- Whether or not building work is defective is to be ascertained objectively.
- The Building Code of Australia (BCA) is a uniform set of technical provisions for the design and construction of buildings and other structures throughout Australia. The BCA is given legal effect by building regulatory legislation in each State and Territory. Section 14(2) of the Building Act 1975 provides:
Building work complies with the BCA or QDC only if it complies with all relevant performance requirements under the code.
- The QBCC submitted that the work in question was defective because it did not comply with performance requirement P2.4.1 contained in BCA (2011) volume 2 which provides:
P2.4.1. Wet areas
To protect the structure of the building and to maintain the amenity of the occupants, water must be prevented from penetrating –
(a) behind fittings and linings; or
(b) into concealed spaces,
of sanitary facilities, bathrooms, laundries and the like.
- The applicant submitted that this performance requirement had been met essentially because the water membrane was intact. The applicant did not accept that evidence of water “spitting” out from between the tiles meant that water had penetrated behind a “lining”.
- The applicant also referred to clause 5.4.7 of AS3958.1 Ceramic Tiles, Part 1: Guide to the installation of ceramic tiles which provides:
In some installations small hollow sounding areas may be found. Although they do indicate incomplete bond they are not necessarily indicative of imminent failure; however, cases where more than 20% of the tile sounds hollow when tapped (“drummy”) would have to be considered suspect over the long term. Needless to say this ratio would need to be varied depending on –
(a) whether the tile is fixed to the floor or wall; and
(b) the anticipated form and amount of traffic.
- The applicant submitted that, as there was no evidence that 20% of the tiles in the bathroom were drummy, that the work was therefore not defective.
The evidence of the QBCC
- Mr Frank Moebus, of Complete Tiling Solutions Qld Pty Ltd and Managing Director of the Australian Master Tilers Association Ltd, was engaged by the QBCC to inspect and prepare a report relating to the work, the subject of the direction. Mr Moebus provided a report dated 2 February 2014.
- Mr Moebus requested the QBCC ascertain from the builder details of the adhesive and waterproof membrane used in the bathrooms. The QBCC requested that information from the applicant but did not receive a reply. On that basis, Mr Moebus was instructed by the QBCC to proceed to write his report based on his inspection, which he did. That inspection included the removal of one tile.
- Mr Moebus concluded that the tiles, which were 600mm x 600mm Group B1a ceramic tiles had been installed using a cement based tile adhesive. In relation to the tiling installation method Mr Moebus reported:
"The tile was installed directly onto a waterproofing membrane using a cementitious adhesive, which was approximately 10-12mm thick. There was little or no adhesive transfer to the back of the tile. This indicates that the adhesive is not suitable for use with a Group B1a ceramic tile."
- Mr Moebus also expressed concerns at the thickness in the application of that adhesive:
"I was not able to ascertain which adhesive brand had been used, however, it is unusual for a cementitious adhesive to be used at the thickness described above. The vast majority of ceramic tile adhesive are suitable for a bed thickness of no more than 5.0mm and an adhesive used at 10-12 mm must be specifically designed and designated as a thick bed adhesive by the manufacturer."
- In relation to the waterproof membrane, Mr Moebus observed that it was a “black, liquid applied membrane” that had been applied at approximately 400-500 microns thick which, in his opinion, seemed “very thin for a liquid applied membrane”.
- Mr Moebus concluded, based on the existence of non-existent and damaged grout, “drummy tiles”, the fact water could be expressed from between the tiles by applying light pressure to the tiles and, in particular, due to the lack of transfer of adhesive evident from the back of the tile he removed, that the tiles had become “de-bonded”.
- During the hearing, Mr Moebus gave evidence that although the drummy tiles were, at the time of his inspection, confined to areas where the bathrooms experienced the most traffic, that the problem would “migrate” and, within the next 12 months, be significantly worse.
- Mr Moebus concluded that the tile installation was defective because the adhesive used was not compatible with the tiles and that it was used at an excessive thickness. Although he was not advised as to the manufacturer of the adhesive, he was able to conclude that it was a cement-based product, which was incompatible with a ceramic tile of the type used.
- The failure of the adhesive to bond with the tiles was supported by evidence during the hearing given by Mr Patterson, the building contractor employed by the QBCC to do the rectification work, who said that when it came time to remove the tiles for rectification work to begin, the tiles “fell off” the walls and floor.
- Mr Moebus did not believe that the issue with the tile installation could be cured by the “tile injection method” advocated by the applicant. This method was not suitable, in his opinion, for use in wet areas because the polymer in the product employed in the “tile injection” method reacts adversely with water. Mr Moebus and Mr Pullar, the QBCC inspector, were both of the view that rectification using the tile injection method would not have worked in the medium to long term in the bathrooms.
- Mr William Pullar, a building inspector with the QBCC, who conducted an inspection of the property, gave evidence that he did not believe the issues with the tiling were caused by a “build – up of sewer grease in the shower drain”. He also did not agree with the applicant’s statement that it was common for tile grouting to become loose in the shower area as a result of washing and chemicals. In his opinion, the tiles were not installed in accordance with the relevant Standard and the tiles had de-bonded due to the use of an adhesive which was incompatible with the tiles and which had been used at an excessive thickness.
- Mr Paterson, who carried out the rectification work in both bathrooms, discovered further building work which, in his view was defective, namely:
- that screws used to affix brackets to the shower screens had penetrated through the floor tiles and waterproof membrane to the particleboard below which allowed water to leak from the shower to the particleboard; and
- the water stop angle was unsealed, allowing water to escape from the shower recess.
- Mr Paterson provided photographs, which showed the darkened areas on the particleboard once exposed by Mr Paterson. He also gave evidence that he had to wait two days before the particleboard was dry enough to install a tile underlay and to enable the floor and walls to be re-waterproofed and re-tiled.
The evidence of the applicant
- The applicant contended that there was no leak from a wet area and that the waterproofing was constructed in accordance with AS3740/2010 and BCA2011 and deemed to satisfy P2.4.1 of BCA Vol 2.
- The applicant submitted that the BCA had to be viewed as a whole, that 220.127.116.11 was therefore also relevant and had been complied with. The applicant also referred to the Form 16 it had received with respect to the water proofing which evidenced compliance with AS3740.
- Mr Chan, on behalf of the applicant, did not believe the de-bonding was a wider issue and could be resolved by re-gluing tiles that had become loose. He gave evidence that the “tile injection method” could be used successfully in these circumstances. He had proposed, by way of a solution, fitting the shower with a higher sill to provide a bigger buffer to hold the water in the shower, re-grouting and the reapplication of silicon sealant as required.
- The applicant, in relation to the issue of whether there was defective building work, relied on the evidence of Mr Blase, a waterproofing expert, who had not conducted an inspection of the bathrooms, Mr Martin Gardiner, a licensed carpenter and Foreman at Goldfield and Mr Hassani Hameed, a licensed tiler.
- Mr Blase was of the opinion that the waterproofing in the bathrooms was compliant and that there were insufficient drummy tiles to conclude the work was defective. In his opinion, the cause of the water being able to be expressed between loose grouting was due to a lack of maintenance by the owner. He stated:
"We viewed the photo evidence of excessive debris in the drain and loose grout and sealant; and the demonstration of clogged drainage provided by Goldfield Projects. In our opinion, it indicates a lack of maintenance by the owner."
The lack of maintenance could cause water to backfill and be trapped under the tiles. The water will then be forced out when applying pressure as the adhesive is flexible.
- Mr Gardiner was of the view that the tiling complied with AS3958. He referred to the fact that there were many reasons why a tile could become loose or drummy, namely:
"An impact of heavy weight, heavy load applied or force removal after being laid, contamination of floor or tile, adhesive working time being overdue, disturbing of tiles before the adhesive had dried during laying are some of the usual reasons."
- Mr Gardiner was also of the view that the issue had “most likely [been] caused by the lack of maintenance of the owner.”
"Regarding with the ensuite shower floor tile, I noted evident [sic] of lack of maintenance by the owner. The silicon at the wall and floor junction at the shower room was deteriorating. Grout is missing and open up in some spot."
- The applicant’s explanation for the water coming out from between the cracks in the tiles was also that this was due to the owner’s lack of maintenance leading to a blocked drain and flooding of the bathroom.
Findings as to whether there was defective work
- I prefer the evidence of Mr Moebus, Mr Pullar and Mr Paterson to that of Mr Chan, Mr Gardiner, Mr Hameed and Mr Blase on these issues. Mr Blase conceded that his area of expertise was waterproofing and he had not carried out an inspection of the bathrooms. Mr Gardiner is a qualified carpenter and Foreman for Goldfield and Mr Hameed is a licensed tiler.
- Mr Moebus is a licensed tile installer in the grade of “Nominee Supervisor” with the QBCC, and has been since 2003. He has also been the Managing Director of the Australian Master Tilers Association Ltd since 2012, an association which assists in the development of industry best practice guidelines for the wall and floor tiling industry. Mr Pullar is a building inspector with the QBCC and a licensed builder with over 40 years’ experience.
- I found Mr Moebus to be a reliable and honest witness. He also impressed me as knowledgeable in the area of tiling installation methods. I accept his evidence that the tiles had become de-bonded, that this was a problem that was endemic, and that the primary cause of the de-bonding was due to the incompatibility between the adhesive and the type of tile used in both bathrooms. There was insufficient evidence for me to conclude that the bitumen based waterproofing contributed to the de-bonding.
- Clause 5.4.7 of AS3958.1, in my opinion, does not provide a definitive statement as to the circumstances when a “drummy” tile can constitute defective building work.
- I also accept the evidence of Mr Paterson, that the method of affixing the shower screen to the floor penetrated the water membrane causing water to leak from the shower to the particleboard.
- I do not accept the evidence of Mr Chan, Mr Gardiner, Mr Blase and Mr Hameed to the effect that the owner’s lack of maintenance led to the tiles becoming “drummy” or to cracks or damage to the grouting. The owner had issues with the tiling only 8 months after moving in to the property. In the case of the second bathroom, the owner said in an email to the QBCC inspector of 29 October 2013:
"…he didn’t comment on the lose [sic] tiles and water coming up from underneath but kept blaming it’s a drainage problem after we tested both showers on full running water for around 5-6 minutes and water drained fine and most importantly this shower was never used until the master room had problems. These loose tiles, cracked grouts happened in less than 2 weeks after I started using this shower and not I try not to use these at all and shower at my mates house."
- As the email indicates, and in accordance with the evidence given by the owner at the hearing, the issues were significant enough to cause him to stop using both bathrooms and to shower at the homes of friends or family.
- I find, therefore, on the balance of probabilities, that the building work, being the tiling installation in the bathrooms and the method of fixing the shower screens to the floor, was defective.
Was the work carried out by the applicant?
- Section 72(5) of the QBCC Act provides that the person who carries out the building work includes:
(c) a building contractor by whom the building work was carried out.
- It was accepted by the parties that the applicant was the building contractor by whom the building work the subject of the direction was carried out.
Is it unfair to issue a direction in the circumstances?
- There is no requirement to issue a direction if the Tribunal is satisfied that, in the circumstances, it would be unfair to the give the direction to the person who carried out the building work.
- Mr Chan suggested that, because he indicated to the owner that he was prepared to remedy the work, that it was unfair to issue the direction when he had been unable to access the property.
- I do not accept that, in the circumstances, the nature and content of the communications between the owner and Mr Chan, on behalf of the applicant, make it “unfair” to issue a direction. The evidence was that the owner had permitted access to Mr Chan before to enable him to try to remedy the problems identified by the owner. These attempts had involved Mr Chan replacing grouting where it had cracked. The measures had, however, been unsuccessful. After initially refusing to do anything further, Mr Chan made a subsequent offer to return to re-glue loose tiles, re-grout and re-apply silicon sealant where required. The owner gave evidence that he was unable at that time, due to work commitments, to provide access to the applicant at such late notice.
- The owner raised his issues with the tiling with Mr Chan on 29 August 2013 and again in lengthy correspondence on 19 September and 25 September 2013. On 19 September 2013 the owner had said:
…I’m just asking for this last time please fix the shower tile for me. I understand the fine line you want to draw between you and the owners but I really hope you can take this as an exception. I really have only moved in for less than 6 months and I hope you can understand my situation also. Other little things I can cope with (eg window blinds falling off without being touched, floor laminate not glued, no screws on some door hinges. And the list goes on) but just this one thing. Please consider for me Billy.
Please get back to me.
- In my opinion, in these circumstances, the owner’s position in late November 2013 regarding access was not unfair and did not provide a basis for refusing to exercise the discretion to issue a direction.
- The applicant also submitted that the work, if defective, was category 2 defective work in accordance with the Rectification Policy and that therefore the owner’s delay in making a complaint was “unfair or unreasonable”.
- “Category 2 defective building work” is defined in the Rectification Policy to mean:
Defective building work (other than category 1 defective building work or residential construction work causing subsidence) that is faulty or unsatisfactory because:
(a) it does not meet a reasonable standard of construction or finish expected of a competent holder of a contractor’s licence of the relevant class; or
(b) it has caused a settling in period defect in a new building.
- “Category 1 defective building work” is defined in the Rectification Policy 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 a 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;
(d) allows water penetration into a building.
- If the work does one of those things it will be regarded as category 1 defective work. In my view, the defective tiling installation adversely affected the functional use of the building because the owner could not use his bathrooms to shower. The bathrooms were not functional because the tiling installation was not working as it was meant to: the grouting had cracked, tiles were loose and water was able to seep beneath the tiles, allowing water to penetrate beneath the tiles. This was sufficient, in my view to make it category 1 defective work and it was not therefore relevant that the owner made his complaint more than 6 months from the date the work was completed.
- Mr Chan also raised issue with the attitude of the QBCC’s inspector and alleged he had been “singled out” by the QBCC. In Mr Chan’s view, the inspector had a bias against him, was intimidating and a bully. While I acknowledge that the inspector had issued a number of directions against the applicant in a relatively short space of time, there was no evidence that he had acted inappropriately or in a way which indicated bias against Mr Chan or the applicant.
- I find, accordingly, there is no basis for concluding that issuing a direction in these circumstances would be unfair.
- The application for review is dismissed.
- I order that the decision of the QBCC made on 3 December 2013 to issue direction No 39643 is confirmed but is widened in scope to include replacement of the waterproofing membrane in the bathroom identified by photograph RP2 annexed to the statement of Robert Mark Paterson.
 QBCC Act s 86(1)(e).
 QBCC Act s 87.
 QCAT Act s 20.
 QCAT Act s 24.
 QBCC Act s 72(2).
 Statutory Instruments Act 1992 (Qld) s 7.
 QBCC Act s 72(3).
 QBCC Act s 72(8).
 R v His Honour Judge Miller and Builder’s Registration Board, ex parte Graham Evans and Co (Qld) Pty Ltd  2 Qd R 446 at 458.
 Exhibit 14, Affidavit of Frank Moebus dated 14 February 2014 at .
 Ibid at .
 Exhibit 13, Affidavit of William Pullar dated 24 March 2014 at [10.1].
 Ibid at [10.2].
 Ibid at [10.6].
 Exhibit 16, Statement by Robert Paterson dated 17 March 2015 (It was accepted at the hearing that this document was incorrectly dated and should be 2016).
 Exhibit 3, Affidavit of Ho Ming Chan dated 15 January 2016 at .
 Exhibit 11, Affidavit of John David Blasé dated 15 January 2016 at -.
 Exhibit 6, Affidavit of Martin Gardiner dated 23 June 2014 at .
 Ibid at .
 Exhibit 10, Affidavit of Hassani Hameed dated 23 June 2014 at .
 Ibid at .
 Ibid at .
 Exhibit 15, Affidavit of Kwok On Cheng dated 14 March 2016 at .
 Exhibit 6, Annexure “SOR-2”.
 QBCC Act s 72(14).
 Rectification Policy, clause 3(2)(b).
- Published Case Name:
Goldfield Projects Pty. Ltd. v Queensland Building and Construction Commission
- Shortened Case Name:
Goldfield Projects Pty. Ltd. v Queensland Building and Construction Commission
 QCAT 361
04 Oct 2016