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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Buchanan v Ward  QCAT 396
18 October 2019
7 December 2018
Member McLean Williams
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – where applicant had retained services of respondent to undertake air conditioning repair work pursuant to an oral contract – where air conditioning still inoperable after work – questions as to standard of workmanship and safety of repairs undertaken by respondent – circumstances where respondent attributes problems to pre-existing defects outside the scope of the oral agreement – whether performance of works regulated by the Queensland Building and Construction Commission Act 1991 (Qld)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 63, s 100, s 102
Queensland Building and Construction Commission Act 1991 (Qld)
REASONS FOR DECISION
- On 20 April 2018, Maryrose Buchanan filed an Application originally seeking $9,230.10 as the cost to rectify defective air conditioning work that had been undertaken by the respondent, together with legal costs of $2,616.05. Since the date of the original filing of this claim the sum sought for rectification has increased to $11,635.35.
- Although residing in Townsville, Maryrose Buchanan and her husband Glenn Buchanan are the owners of Unit 101 and Unit 702 in Macarthur Chambers, situated at the corner of Edward and Queen Streets, in Brisbane.
- In December 2015, the Macarthur Chambers building managers engaged the respondent to investigate the air conditioning in the second bedroom of Unit 101. After an inspection, the respondent advised that the compressor had burnt out, and the air conditioning unit needed replacement. That information was relayed to the applicants. The applicants then communicated directly with the respondent and instructed him to replace the air conditioning unit in the second bedroom in Unit 101.
- The respondent’s work in Unit 101 commenced with an initial ‘pipe freeze’, to replace a water valve. The applicants were invoiced $1,100.00 for this work on 21 December 2015. They paid that amount on 4 January 2016.
- On 18 January 2016, the respondent requested the payment of a 50% deposit prior to his performing any more work in Unit 101. An invoice for $6,050.00 was issued to the applicants, and $3,000.00 was paid by them that same day.
- The total cost charged by the respondent for replacement of the air conditioning unit in the second bedroom of Unit 101 was $7,260.00. This amount has been fully paid by the applicants.
- In April 2016, the applicants had a similar issue with the ‘main’ air conditioner in Unit 101. The respondent was again called out to inspect, and again advised that the compressor had burnt out. Once again, the respondent was verbally instructed to proceed and replace the air conditioner. This occurred on 26 May 2016, and the applicants were invoiced $8,700.00. This was paid, on 5 June 2016.
- During December 2016 to January 2017, both of the air conditioning units in Unit 702 also stopped working. On 13 January 2017, the applicants contacted the respondent and requested that he inspect the air conditioning in Unit 702. After an inspection, the respondent again advised that the compressors had burnt out, thus necessitating the replacement of both units. The respondent then provided a quote for $18,700.00, which was accepted. On 6 March 2017, the respondent requested a deposit of $9,350.00 before proceeding with any further work in Unit 702. This sum was paid by the applicants, and work commenced on 13 March 2017. Work in Unit 702 was completed by the respondent around 10 May 2017. The balance of the invoiced amount for work in Unit 702 was then paid by the applicants on 19 May 2017.
- Despite the applicants having by now paid $34,660.00 to the respondent for the supply and installation of four new air conditioning units, the applicants say that the systems have never worked satisfactorily, and all four air conditioners continued to be the source of complaints, from their tenants. The respondent was requested to return and inspect the air conditioners, on several further occasions. On some of these occasions the respondent cleaned the water strainers, yet otherwise he told the applicants after each inspection that the systems were found to be functioning correctly.
- By now concerned that the problem may be as a result of a manufacturer’s defect, the applicants contacted Temperzone, on 1 November 2017.
- The Temperzone Queensland State Manager is Mr Shane McBride. Mr McBride recommended that the applicants engage the services of Temperzone’s approved warranty contractor, AC1 Pty Ltd (‘AC1’).
- The applicants then contacted AC1 and requested that they inspect and report on the air conditioning units in each of Unit 101 and Unit 702. An inspection was scheduled for 15 December 2017. The applicants also arranged to fly down to Brisbane to be present when AC1 conducted their inspections.
- On the basis of the AC1 inspections conducted on 15 December 2017 the applicants were advised that the air conditioner installations performed by the respondent evidenced a multitude of quite obvious problems, and that the installations were electrically unsafe, as well. AC1 has since provided a separate report on each air conditioning system installed by the respondent. Obtaining these reports from AC1 cost the applicants $1,306.25.
- AC1 were instructed by the applicants to proceed with rectification of the air conditioning systems. This work was performed in late December 2017, and cost the applicants a further $11,635.35. The air conditioning systems in both units have since operated in the manner expected.
- The applicants’ claim before the Tribunal is advanced on the basis of the four reports provided by Mr Brad Bohan, from AC1. Mr Bohan is the principal of AC1, and has had more than 30 years’ experience in the HVAC industry.
- The applicants have also provided a further expert statement, from Mr Jeffrey Murray, another HVAC technician with 26 years’ industry experience. Mr Murray did not inspect the works performed by the respondent, however was asked to comment on the AC1 reports, particularly the photographs contained therein. Mr Murray is in complete agreement with the conclusions already expressed in the AC1 reports by Mr Bohan. As such, it is not necessary that the Tribunal expound further on the evidence from Mr Murray, as discussion of it may more conveniently be subsumed in analysis of Mr Bohan’s first-hand evidence, further below.
- Mr Kane Ward denies the applicants’ claims and now counterclaims for the sum of $835.20, for further service visits conducted by him in each of January 2017, April 2017, and May 2017.
- Mr Ward says that he was only engaged to replace the four air conditioning units. Mr Ward says that the insurance claims that were to be lodged by the applicants would only cover the supply and installation of the new air conditioning units, and that no other associated works or repairs to existing defects would be covered. Mr Ward says there were many existing defects, and many problems in the duct-work, yet, when he advised the applicants of that fact they had refused to remediate anything, other than that which would be covered by insurance.
- Mr Ward also claimed that the Macarthur Chambers building has a ‘common’ water-cooling system, used by all the units therein. This had been notorious within the building for having performance issues, due to prior inadequate maintenance. Mr Kane says that substandard performance by the common cooling system is the primary cause for all the problems with the air conditioning systems in each of Unit 101 and Unit 702, and that this is not his responsibility. The essence of the Mr Ward’s case is to be found in paragraphs 6, 10, and 16 of the Response and Counter Application, as was filed by him on 2 July 2018:
- “We acknowledge the report prepared on behalf the applicant by an alternative air conditioning contractor and our position is that we agree that the majority of these defects exist but they fall outside our scope of works we supplied to the applicant in our proposals and also outside any works approved under the insurance claims…./
- The applicant fails to understand we have no responsibility nor can we control the adequacy or performance of the condenser water system of which some of the applicants’ clams [sic] suggest we are. The condenser water system and its contamination may well have contributed to failure of the applicant’s original AC units and high temp cut outs of the units we replaced…./
- The applicant suggests we are responsible for existing defects within his premises which he labels “grossly poor standard of Kane Ward’s work”. However, in our opinion the applicant’s refusal to remediate such defects due to costs or any other reason and then blame us for his own failure to rectify suggests he has taken the opportunity to lay blame with us.”
- Mr Ward led no evidence, however, he did take the opportunity to cross-examine the applicants’ witnesses, and made submissions before the Tribunal, both orally during the hearing, and in writing.
- Mr Ward was further confident that an order from the Tribunal for non-party disclosure directed to the applicants’ broker (Jardine Lloyd Thompson Pty Ltd of Townsville) for copies of file notes and other records relating to the applicants’ insurance claims would reveal information that was supportive of his contentions.
- At Mr Kane’s request, on 28 November 2018 the Tribunal made an order pursuant to s 63 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) for non-party production of documents, directing that Jardine Lloyd Thompson Pty Ltd produce insurance claim forms, telephone records, e-mails, and file notes of any communications between themselves, and the applicants. Unfortunately, Jardine Lloyd Thompson Pty Ltd had produced no material in response to that notice, at least not prior to the Tribunal hearing on 7 December 2018.
- The material from Jardine Lloyd Thompson Pty Ltd was however eventually produced, on 10 December 2018. The parties were asked to file submissions to address that material. Upon later examination by the Tribunal, none of the material disclosed by Jardine Lloyd Thompson Pty Ltd in response to the order made by the Tribunal under s 63 revealed anything that was supportive of the respondent’s contentions.
Mr Bohan’s evidence and reports
- As recorded earlier in these reasons, Mr Bradley Bohan has had lengthy experience in the HVAC industry. His company, AC1 Pty Ltd, is the approved warranty repairer for Temperzone air conditioning systems.
- Having had the opportunity to observe Mr Bohan in the witness box, particularly whilst under cross-examination, and having had the opportunity to read and consider all of his evidence, the Tribunal assesses Mr Bohan as a creditable and impartial witness, and to be equipped with the necessary expertise to be able to give opinion evidence in relation to the matters here in dispute. The Tribunal accepts all of Mr Bohan’s evidence, and expresses a preference for all of it over the contrary views and opinions expressed by Mr Ward, from the bar table.
- Mr Bohan informed the Tribunal that the air conditioning installation in each of Unit 101 and Unit 702 was the worst that he had ever seen in 29 years in the industry. In particular, the electrical work was potentially life-threatening, as well as presenting a risk for causing an electrical fire in the ceiling void above each unit. Mr Bohan also opined that the $34,935.00 paid by the applicants was ‘the extreme high end’ of what should have been paid, and that the works performed by AC1 were only the minimum necessary to bring the four air conditioning units back to an operational standard, in accordance with the manufacturer’s installation guidelines.
- The Tribunal agrees with Mr Bohan’s assessment regarding the very poor standard and high cost of the respondent’s work. This becomes obvious from the photographs in the AC1 reports, even before expert elaboration, by Mr Bohan.
- The nature of the difficulties identified by Mr Bohan are remarkably similar across the four installations, and include:
- (a)Instances of units found to have been installed without a filter/missing a filter, despite this being a system requirement;
- (b)Supply air plenum boxes not fitted, and not designed correctly;
- (c)Numerous obvious gaps and cracks in the duct-work, and duct-work installed incorrectly, such that conditioned air escapes into the void of the ceiling cavity;
- (d)Electrical isolators found to be hanging by their own electrical supply cable;
- (e)Electrical connections requiring a junction box having been made without a junction box;
- (f)Uninsulated/inadequately insulated electrical cables near to metal pipework;
- (g)Booker (threaded hanger) rods poorly installed and/or subsequently modified in an unsafe manner that could not be accepted for use by any competent tradesman, yet nonetheless used as part of the installation;
- (h)Poorly mounted controls, including controls mounted upside down;
- (i)Condensate drains poorly mounted, including being secured at conduit joints only by means of electrical tape, and installed to flow contrary to gravity. Condensate drains left unsupported, and allowed to kink and block on their first bend;
- (j)Air duct-work penetrated by condenser water pipes and associated valves;
- (k)Failure to install a remote temperature sensor in required circumstances.
- Although the respondent contends that the condenser water system common to MacArthur Chambers as a whole had been the primary cause for the difficulties in the applicants’ four air conditioning units; that contention really amounts to little more than speculation. No evidence (beyond Mr Ward’s own assertion) has been adduced to objectively show that fact and demonstrate the basis for the views that have here been expressed by Mr Ward. The water cooling towers on the roof of Macarthur Chambers may have had a history of difficulties, however that does not serve to act in refutation of the applicants’ claim – which is made out by the evidence adduced by the applicants and that has now been accepted by the Tribunal in proof of that claim.
- The overwhelming preponderance of the evidence now before the Tribunal shows that the difficulties in the four air conditioning units go well beyond inadequate heat exchange cooling from the common water condenser system. The available evidence leads the Tribunal to the conclusion that the systems installed by the respondent were each left by him in a state wherein they were mostly dissipating conditioned air into the ceiling voids, above each of Unit 101 and Unit 702, rather than delivering it into the habitable spaces within each unit.
- In the Tribunal’s assessment, the evidence shows that the respondent’s poor workmanship has resulted in air conditioners that were never fit for purpose, and that had been left in an electrically unsafe state at the point when Mr Ward had claimed that his work was complete, such that he was eligible for receipt of final payment.
- The respondent also argues that he should not be held responsible for any pre-existing defects in the extant ducting because the applicants had refused to have him also remediate these defects, on grounds of cost. This argument is rejected. The applicants have denied ever having been told by the respondent about any pre-existing problems in the duct-work, or of them otherwise being aware of that, and the respondent cannot now point to any evidence to show that he informed the applicants of this issue. Given the applicants’ preparedness to promptly pay the respondent’s large invoices, it appears improbable to the Tribunal that the applicants would have refused to meet the cost of any necessary duct-work remediation on cost grounds, had they been informed about the problem. Had they refused to authorise duct-work repairs, as is now alleged by the respondent, then any competent tradesman would have refused to proceed with the installation. Or, at the very least, would have taken the obvious precaution to note their refusal to authorise necessary and recommended duct-work repairs on the final invoice. Here, it is telling that the respondent did not do that.
- Ultimately, as regards the respondent contending that the applicants had refused to remediate existing defects in the duct-work, the Tribunal prefers the evidence of the applicants, and finds on the balance of probabilities that the respondent never told the applicants that there were defects in the ducting that required repair, and/or that the applicants refused to do this, on grounds of cost.
- Even if there were pre-existing defects in the duct-work, it was the respondent’s responsibility to ensure that each air conditioner operated efficiently as a total system, and in the manner expected by the end-user of the air conditioning by the point at which the respondent had declared his installation work to have been complete. The respondent has not done that. Even on his own case Mr Ward has connected his works to what was glaringly defective and inadequate duct-work, thus setting up a circumstance wherein his own work was rendered immediately defective and inadequate and wherein it was always destined to have further problems, and to not operate in the manner that is to be expected of any air conditioner. Not by any measure could this be accepted by the Tribunal as competent and tradesman-like.
- The respondent’s counterclaim is predicated on unpaid invoices for further service calls in each of January, April, and May of 2017, when the applicants had asked the respondent to again attend Unit 101 and Unit 702, to further investigate why the air conditioning systems were still not working properly.
- In stark terms, the systems were still not working on those occasions because the respondent had not installed them correctly in the first place. In these circumstances the applicants cannot reasonably be expected to pay the respondent for these further service calls. Accordingly, the respondent’s counterclaim is dismissed.
- As part of their claim, the applicants seek $2,616.05 for legal fees incurred by them as part of their efforts to recoup their losses from the respondent, prior to commencing proceedings before the Tribunal. In light of sections 100 and 102 of the QCAT Act, this amount will not be ordered to be paid, by the respondent.
- However, in light of the Tribunal’s factual findings (above), the applicants are assessed as entitled to $11,636.35 – being the full amount of the additional costs incurred by them to have AC1 rectify the air conditioning systems previously installed in a defective manner by the respondent – together with their QCAT filing fee, which in this instance was $326.80.
- The works performed by the respondent appear to have all the hallmarks of building work that is regulated by the requirements of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). Accordingly, the Tribunal directs that these reasons for decision now be referred to the Queensland Building and Construction Commission for it to investigate whether the respondent has complied with its obligations under the QBCC Act.
- Published Case Name:
Buchanan v Ward
- Shortened Case Name:
Buchanan v Ward
 QCAT 396
Member McLean Williams
18 Oct 2019