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  • Unreported Judgment

Spence v Queensland Building and Construction Commission

 

[2020] QCAT 274

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Spence v Queensland Building and Construction Commission [2020] QCAT 274

PARTIES:

robyn belinda spence

(applicant)

v

queensland building and construction commission

(respondent)

APPLICATION NO/S:

GAR282-18

MATTER TYPE:

General administrative review matters

DELIVERED ON:

21 July 2020

HEARING DATES:

17-18 October 2019

DATE FINAL

SUBMISSIONS

RECEIVED:

3 February 2020

HEARD AT:

Caloundra

DECISION OF:

Member Olding

ORDERS:

  1. The Respondent’s reconsideration decision dated 8 April 2019 is:
    1. (a)
      So far as it decided that Directions to Rectify be given in respect of complaint items 7, 36 and 52 – confirmed;
    2. (b)
      So far as it decided that Directions to Rectify not be given in respect of complaint items 15, 16, 19, 24-26, 28, 29, 32-35, 37, 38, 41-44, 45, 46 and 48-51– confirmed;
    3. (c)
      Otherwise – set aside and substituted with a decision that:
      1. Directions to Rectify are to be given in respect of complaint items 14, 17, 18, 21, 23, 30, 31, and 47;
      2. the Directions to Rectify referred to in Order 1(c)(i) are to include a note to the effect that they are in substitution for the Directions to Rectify given on 12 April 2019;
      3. Directions to Rectify are to be given in respect of complaint items 1-6, 9, 10, 11, 20, 22, 27 and 45;
      4. the Directions to Rectify referred to in Orders 1(c)(i) and 1(c)(iii) are to be in terms agreed between the parties or failing agreement in the same terms as the Directions to Rectify issued by the Commission on 28 May 2018 in respect of those complaint items.
  1. If either party wishes to make an application for costs:
    1. (a)
      a written submission and any evidence to be relied upon must be filed in the Tribunal and a copy given to the other party by 4.00 pm on 11 August 2020;
    2. (b)
      any submission and evidence in reply must be filed in the Tribunal and a copy given to the other party by 4.00 pm on 25 August 2020;
    3. (c)
      unless a party submits otherwise, the question of costs will be determined on the papers without an oral hearing.

CATCHWORDS:

PROFESSIONS AND TRADES – BUILDERS –STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – where applicant seeks to review a decision by the Queensland Building and Construction Commission to not give a direction to rectify – whether building work defective – where work not in accordance with approved plans – whether discretion to give direction to rectify should be exercised – whether direction could be ordered where applicant dissatisfied with a direction – where applicant had received compensation under statutory insurance scheme – where applicant awarded damages but award not paid by builder – whether unfair to give direction due to deterioration from passage of time and proximity to ocean

Queensland Building and Construction Commission Act 1991 (Qld), s 72, s 86(1)(e); Schedule 2

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 23(4)

Dyer v Spence [2017] QCAT 211
Middleton v Queensland Building and Construction Commission [2018] QCAT 177
William George Carlsen t/as W & E Carlsen Builders v Tresidder [2015] QCAT 260

APPEARANCES &

REPRESENTATION:

 

Applicant:

J K Meredith of Counsel instructed by Garland Waddington

Respondent:

K Joyce, in-house solicitor, Queensland Building and Construction Commission

REASONS FOR DECISION

What is this case about?

  1. [1]
    The applicant, Mrs Spence, fell into dispute with a builder, Rowan John Dwyer, engaged to carry out extensions and renovations to an existing residence.
  2. [2]
    A building dispute, initiated by the builder, was decided in favour of Mrs Spence by the Tribunal (“the building dispute decision”) but the damages of $138,826.18 plus interest awarded to Mrs Spence[1] have not been paid by the builder.
  3. [3]
    Mrs Spence has also pursued claims with the Queensland Building and Construction Commission (“the Commission”), the respondent in this proceeding, under the statutory insurance scheme for residential building construction. The Commission paid an amount of $70,182.60 under the insurance scheme (“the insurance decision”) in respect of non-completion but deferred consideration of the claim so far as it related to defective work pending the Tribunal’s decision in this application for review.
  4. [4]
    Mrs Spence also requested that the Commission give a direction to rectify (“DTR”) to the builder in respect of many items of work that are alleged to be defective or incomplete.
  5. [5]
    Initially, the Commission accepted a DTR should issue in respect of 52 items.
  6. [6]
    However, the Commission upon consideration of an application by the builder for internal review of the original decision substituted a new decision declining to give the DTRs on the basis that Mrs Spence had denied the builder access to the site.
  7. [7]
    After Mrs Spence applied to the Tribunal for review of that internal review decision, upon reconsideration the Commission accepted that Mrs Spence was not denying the builder access. The Commission decided that DTRs should be given to the builder in respect of eleven items but declined to give the other DTRs sought by Mrs Spence (“the reconsideration decision”). It is this reconsideration decision that is now before the Tribunal.
  8. [8]
    The builder has not complied with the eleven DTRs issued in accordance with the reconsideration decision.
  9. [9]
    The upshot of this history is that there remain 49 items of allegedly defective or incomplete work for which the Commission says it is inappropriate to give the builder DTRs either at all or, in the case of eight items for which DTRs have now been given under the reconsideration decision, in the terms in which the original DTRs were given for those items.
  10. [10]
    The Tribunal’s role now is to review the reconsideration decision and decide on the evidence before the Tribunal whether the decision should be confirmed or in each case a DTR should be given or the matter returned to the Commission for further reconsideration.

The parties’ positions – in summary

  1. [11]
    In their submissions and evidence, the parties adopted numbering for the complaint items in dispute employed in reports prepared for the proceeding. I adopt the same course in these reasons and to minimise repetition have grouped the items in dispute according to the basis on which the Commission says that the reconsideration decision should be confirmed.
  2. [12]
    Mrs Spence says that, consistent with the Commission’s original decision, DTRs should be given in respect of all 49 items in dispute in the same terms as the original DTRs. She accepts that the DTRs issued for items 7, 36 and 52 are appropriate.
  3. [13]
    The Commission says further DTRs should not be given. In some cases, the Commission says the work is not defective or incomplete. In others, the Commission accepts that the work is defective or incomplete but says either the DTRs cannot now be given or as a matter of discretion should not be given.
  4. [14]
    In summary, the Commission’s position regarding why a DTR should not issue for the remaining 49 items in dispute is:
    1. (a)
      A direction to rectify has already been given and no further direction should be given:
      1. Items: 14, 17, 18, 21, 23, 30, 31 and 47.
    2. (b)
      Not defective work (or if it is, as a matter of discretion the DTRs should not be given):
      1. Items: 1-6, 9, 10, 11, 20, 22, 27 and 37.
    3. (c)
      Incomplete, but the discretion should not be exercised to give a DTR because Mrs Spence already has the benefit of the insurance payment for these items:
      1. Items: 15, 16, 19, 24-26, 28, 29, 32-35, 38, 41-44, 46 and 48-51.
    4. (d)
      Defective, but a DTR should not be given as Mrs Spence has been awarded compensation in the building dispute decision:
      1. Items: 8, 12, 13, 39 and 40.
    5. (e)
      Defective, but insufficient evidence that the builder is responsible:
      1. Item: 45.

Principles to be applied

  1. [15]
    The power to direct a person who carried out residential building work to rectify the work is found in s 72 of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) which in accordance with s 72(1) relevantly applies if the Commission, and thus the Tribunal on review, is of the opinion that “building work”[2] is “defective or incomplete”.

Meaning of “defective” and “incomplete”

  1. [16]
    The expression “defective” is defined in the QBCC Act as follows:

in relation to building work, includes faulty or unsatisfactory.[3]

  1. [17]
    There is no definition of “incomplete” for this purpose.
  2. [18]
    The Queensland Building and Construction Commission Board has made by way of statutory instrument the Rectification of Building Work Policy which, among other things, states that it is a policy of the Board that a builder who carries out “defective building work” should be required to rectify that work. In the Policy, “defective building work” is defined in these terms:

Defective building work means building work that is faulty or unsatisfactory, and includes, for example, work that:

  1. does not comply with the Building Act 1975, Building Code of Australia or an applicable Australian Standard
  2. involves the use of a manufactured product, and that product has been used, constructed or installed in a way that does not comply with the product manufacturer’s instructions.
  1. [19]
    On this basis, the Commission asserts, and Mrs Spence does not deny, that it is appropriate in deciding whether to give a notice to rectify to have regard to:
    1. (a)
      the Rectification of Building Work Policy;
    2. (b)
      the Building Act 1975 (Qld);
    3. (c)
      the Building Code of Australia;
    4. (d)
      Australian Standards developed for the building and construction industry; and
    5. (e)
      manufacturers’ installation instructions.

Deviations from agreed building plans

  1. [20]
    The Commission submitted that non-compliance with approved plans does not automatically mean that work is defective, as the work may be performing or there may be an alternative solution in place, citing William George Carlsen t/as W & E Carlsen Builders v Tresidder.[4]
  2. [21]
    I accept as a general proposition that non-compliance with plans does not automatically mean work is defective if it is performing its function satisfactorily. However, it does not follow that any variation from approved plans is acceptable provided the work is performing. As Member Gordon noted, albeit in another context, in William George Carlsen t/as W & E Carlsen Builders v Tresidder:
  1. [16]It is only reasonable that some departure from the dimensions or position of a structure given in the plans is permissible, because for a number of reasons including errors by the designer or architect, differing size of materials, or unforeseen practical difficulties on site, it will often be very difficult for the builder to be exact. It could not be the intention of the legislature for example to say that if a bathroom was built very slightly narrower or wider than in the plans, this would be a breach of the obligation.
  2. [17]On the other hand, it would be wrong to read the obligation as requiring only ‘general’, or ‘substantial’ compliance. To do so, would be to add a word to the statutory obligation which is not there. This would not be permissible.
  3. [18]The position of the line must lie somewhere between the two extremes. In this case, the alleged departure from the plans and specifications fall into the following categories: using different methods of construction from that specified, using different materials from that specified, omitting work specified, and positioning fittings differently from as shown on the plan. In each case it is necessary to reach a finding of fact whether the work was carried out in accordance with the plans and specifications in all the circumstances.[5]
  1. [22]
    Thus it is necessary to examine the nature, degree and significance of the departure from the agreed plans.

A matter of discretion

  1. [23]
    Where s 72 of the QBCC Act applies because building work is defective or incomplete, the Commission “may” direct the person who carried out the building work to rectify the work: s 72(2). In other words, it is a matter for discretion of the Commission and the Tribunal on review.
  2. [24]
    Section 72(3) explains that:

In deciding whether to give the direction, the commission [and, therefore, I add the Tribunal on review] may take into consideration all the circumstances it considers are reasonably relevant and, in particular, is not limited to a consideration of the terms of the contract for carrying out the building work (including the terms of any warranties included in the contract).

  1. [25]
    However, s 72(5) provides:

The commission is not required to give the direction if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction.

Example for subsection (5) –

The commission might decide not to give a direction for the rectification of building work because an owner refuses to allow a building contractor to return to the owner’s home or because an owner’s failure to properly maintain a home has exacerbated the extent of defective building work carried out on the home.

  1. [26]
    It is also appropriate to take into account the objects of the QBCC Act which under s 3 relevantly include:
  1. to regulate the building industry –
  1. to ensure the maintenance of proper standards in the industry; and
  2. to achieve a reasonable balance between the interests of building contractors and consumers; and
  1. to provide remedies for defective building work . . .
  1. [27]
    On the question of whether the discretion should be exercised to give a DTR, a number of issues raised in submissions are addressed further below.

Evidence provided and not provided

  1. [28]
    Witness statements were provided by the following witnesses who also provided oral evidence:
    1. (a)
      Mrs Spence;
    2. (b)
      Mr Craig Vogler, who is an experienced independent building inspector engaged by Mrs Spence;
    3. (c)
      Mr Peter Wolfe, who at the relevant time was employed by Tennant Roofing Services Pty Ltd, which was engaged by the Commission to inspect and provide a report on the roof area of the property;
    4. (d)
      Mr Danny Hayes, a Commission building inspector with many years of experience who carried out inspections and made the original decision to issue DTRs;
    5. (e)
      Mr Steven Noble, a Senior Technical Review Officer with the Commission who is also a licensed builder.
  2. [29]
    Nothing in the evidence of any of these witnesses gave me cause to doubt that they were honest witnesses doing their best to assist the Tribunal. To the extent that there were differences in the expert evidence, these were matters of differing professional judgements and the material and opportunities available to them on which to form those judgements.
  3. [30]
    With no criticism intended, the evidence of Mr Hayes was of limited assistance as he did not have before him when he made the original decision the materials considered by Mr Noble and in some respects, not surprisingly, could no longer recall aspects of his consideration of Mrs Spence’s complaints.
  4. [31]
    Mr Vogler in particular, and to a lesser extent, Mr Noble qualified their evidence by appropriately noting that they are not engineers. Mr Noble relied upon inspection reports and checklists provided by STA Consulting Engineers Pty Ltd (“STA”), the engineers engaged by Mrs Spence for the construction project, for some of his conclusions and these were also referred to by Mr Vogler and in Mrs Spence’s submissions.
  5. [32]
    However, no representative of STA was called to give evidence. Such evidence may have been able to explain some of the scant handwritten notations on their reports and checklists upon which Mr Noble relied and also cast light on the background to the various amendments to the engineering plans referred to further below.
  6. [33]
    Mrs Spence’s statement, which was admitted into evidence without objection or adverse submissions as to weight, does include hearsay evidence of explanations of notations and other aspects of the STA inspections provided to Mrs Spence by Mr Ben McDonald of STA.
  7. [34]
    Mrs Spence’s statement also exhibited a Special Purpose Inspection Report by Laguna Building Consultants. No representative of that firm gave evidence.
  8. [35]
    Additionally, while the Commission referred in submissions to the absence of evidence from the builder, neither party sought to require the builder give evidence.

Background to entry into the contract

The “original building approval”

  1. [36]
    Mrs Spence explained that the original dwelling on the site was an old beach house which her late husband began renovating in accordance with a Development Permit dated 22 June 2010 (“the original building approval”) before he passed away in June 2011.
  2. [37]
    The original building approval included approved building plans stamped 22 June 2010 (“the approved building plans”) along with engineering drawings dated 10 May 2010 (“the original engineering drawings”) and a Foundation Design Report (“the original FDR”) dated 3 June 2010, both prepared by STA.

The “revised FDR” and “revised engineering drawings”

  1. [38]
    However, there is a revised FDR dated 20 July 2010 (“the revised FDR”) and there are revised engineering drawings dated 19 May 2020 (“the revised engineering drawings”).

The “redrawn approved building plans”

  1. [39]
    Mrs Spence gave uncontradicted evidence, which I accept, that in September 2013 she had the approved building plans redrawn to depict work already completed by her late husband and additional work Mrs Spence wanted which included a significant extension of the existing dwelling above the garage and removal of the old beach house.
  2. [40]
    These redrawn plans (“the redrawn approved plans”) replaced the approved building plans.

The contract

  1. [41]
    Mrs Spence gave uncontradicted evidence, which I accept, that her contract with the builder comprised a written contract dated 19 February 2014 and schedules, along with:
    1. (a)
      the redrawn approved building plans;
    2. (b)
      the revised engineering drawings;
    3. (c)
      the revised FDR.
  2. [42]
    In other words, the contract required engineering in accordance with the revised engineering drawings and revised FDR, not the original engineering drawings and the original FDR.
  3. [43]
    The works to be constructed under the contract in its original form excluded the significant extension of the existing dwelling depicted in Sheets 3, 4 and 5 of the redrawn approved building plans. However, the contract was subsequently varied to include further works.

Variation

  1. [44]
    Mrs Spence gave uncontradicted evidence, which again I accept, that in March 2014 the builder and Mrs Spence agreed to vary the contract. The consequence of the variation was that works contracted to be constructed included “variation work” being:
    1. (a)
      level 1 – bathroom and verandah; and
    2. (b)
      level 2 – bathroom, verandah and sunroom.

Approval of building plans

  1. [45]
    Subsequent to the variation of the contract, the Sunshine Coast Regional Council (“the Council”) required the original building approval to be amended to reflect the work being constructed on the site. The redrawn approved building plans were required to be amended and approved by the Council.
  2. [46]
    The amended plans (“the amended approved building plans”) were approved by the Council on 4 April 2014. I accept Mrs Spence’s uncontradicted evidence that she provided a copy of the amended approved building plans to the builder on 8 April 2014.
  3. [47]
    The amended approved building plans included:
    1. (a)
      engineering drawings, that had been further revised, dated 26 March 2014 (“the further revised engineering drawings”); and
    2. (b)
      an FDR that had been further revised and amended, dated 27 March 2014 (“the amended further revised FDR”).
  4. [48]
    Based on Mrs Spence’s witness statement, I find that there were subsequent iterations of the engineering plans and FDRs produced following discussions between the builder and STA without the knowledge or involvement of Mrs Spence, and which did not reflect the requirements under the contract as varied.
  5. [49]
    However, Mrs Spence stated that the final versions – being the amended further revised engineering drawings issued on 5 June 2014 – returned to the requirements of the amended approved building plans that formed part of the building contract.

Deviation from approved plans

  1. [50]
    The principles to be applied where a builder has, by deviating from approved plans, not met contractual requirements are set out above. I address the application of these principles when considering individual complaint items.

The building dispute decision

  1. [51]
    The building dispute decision was delivered on 19 June 2017.[6]
  2. [52]
    The Tribunal ordered the builder to pay damages calculated by reference to the amounts paid by Mrs Spence under the contract; estimates of the costs of rectification of contract works and variation works and completion of the contract works; and liquidated damages, in the total amount of $138,826.18, along with interest calculated from 1 August 2017.
  3. [53]
    The builder has not paid any of these amounts despite enforcement action in the Magistrates Court.

The construction stage reached issue

  1. [54]
    There is some debate in the submissions and the evidence of Mr Vogler and Mr Noble regarding whether particular stages of work had been completed, in particular the enclosed stage.
  2. [55]
    This issue was raised in written outlines helpfully provided to me before the hearing. I could not immediately see why the distinction would matter and in fact the outline provided on behalf of Mrs Spence included a heading: “Enclosed stage reached, and is it even relevant?” I therefore invited the parties to address this in their written submissions to be filed after the hearing.
  3. [56]
    On behalf of Mrs Spence, it was submitted that the distinction was irrelevant as a direction may be issued for defective or incomplete work. The Commission’s submissions did not address this issue directly, although they went to some lengths to discuss whether particular construction stages had been completed.
  4. [57]
    Whether particular works were considered to be incomplete because, for example, the enclosed stage had not been reached, rather than defective, could have been relevant because the DTRs sought for non-completion are resisted by the Commission on the basis that Mrs Spence has already been compensated under the insurance payment for incomplete work. However, as noted in the discussion of the significance of the insurance payment to discretionary considerations, it is implicit in the Commission’s submissions that items in this category are covered by the insurance claim.
  5. [58]
    In view of the conclusion I have reached in respect of those items, it is not necessary to pursue whether the frame or enclosed stage had in fact been reached for the purposes of this proceeding.

Discretionary considerations

  1. [59]
    The Commission’s submissions raised a number of discretionary considerations which, it said, weigh against issuing DTRs such that even if the relevant work is found to be defective or incomplete DTRs should not issue. These are discussed below.[7]

(a) Direction to rectify already given

  1. [60]
    In respect of the first group of disputed items, the Commission decided as part of the reconsideration decision to issue 11 DTRs. Mrs Spence is dissatisfied with the terms of eight of these 11 DTRs and says they should be issued in the same terms as the original DTRs. She accepts that the other three DTRs relating to items 7, 36 and 52 are appropriate.
  2. [61]
    The Commission’s written submissions state:
  1. For the purpose of this proceeding, it would be impractical and ultimately unfair to disturb the findings of the Commission, and for very little benefit, if the Tribunal were now to essentially duplicate the Commission’s process with respect to the above items.
  2. Member Scheaffe in Dixon Projects Pty Ltd v Queensland Building Services Authority[8] (Dixon Projects) noted the importance of achieving a reasonable balance between the interests of the consumer and the contractor in making a decision to give a direction to rectify.
  1. In this matter, the Builder has failed to comply with the Second Direction, and the detriment that flows from same is having a direction to rectify appear on his public licence record, and possible recovery of a claim under the [statutory insurance] Scheme (as contemplated in Dixon Projects) has been achieved.
  2. As such, the Commission submits that the Tribunal cannot now in this proceeding make a decision to give a direction to rectify for [these] items, as this has already occurred or, in the alternative, that it would be at the very least not be fair to do so.
  1. [62]
    In the final paragraph extracted immediately above, the Commission states that the Tribunal “cannot” now make a decision to give a DTR for the items for which a DTR has already been given. The submissions do not articulate a basis for that assertion.
  2. [63]
    Under s 23(4) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), where the decision-maker reconsiders a decision at the invitation of the Tribunal and amends the original decision or substitutes a new decision, the amended or substituted decision is taken to be the reviewable decision and the review of the decision continues unless the applicant withdraws the application for review.
  3. [64]
    The source of the Tribunal’s jurisdiction to review a decision relating to a DTR is s 86(1) of the QBCC Act which relevantly specifies as a “reviewable decision”:

(e) a decision to give a direction to rectify or remedy or not to give the direction.

  1. [65]
    I can only assume the Commission’s submission that the Tribunal cannot now review the decision relating to these eight DTRs is based on the proposition that Mrs Spence can no longer seek review of a decision not to issue a DTR because the Commission has issued a DTR in each case. My attention was not drawn to any authority relevant to the construction of s 86(1)(e). Absent any contrary authority, in my view the Commission’s approach is unduly narrow.
  2. [66]
    A decision not to give a DTR in terms sought by an owner in my view falls comfortably within the concept of a decision “not to give the direction”. The use of the definite article is consistent with a broader construction that encompasses a decision not to give the particular direction sought. It would not be consistent with the protective objects of QBCC Act if, for example, owners were to be denied a right of review of a decision not to give a DTR in particular terms because the Commission had issued a different DTR of much narrower application.
  3. [67]
    A decision to give a DTR that the owner considers unsatisfactory might also fall within the first part of s 86(1)(e) – that is, a decision “to give a direction to rectify”. There is nothing in the section or its context to suggest that a review of a decision to give a DTR is confined to applications for review by builders. I can see no reason why an owner who is dissatisfied with a decision to give a DTR in particular terms may not apply for review of that decision.
  4. [68]
    For these reasons, I respectfully reject the submission that the Tribunal cannot review the decisions in respect of which DTRs have now issued but in terms with which Mrs Spence is dissatisfied.
  5. [69]
    The Commission’s alternative submission is that it would be “impractical and ultimately unfair” to disturb the Commission’s reconsideration decision to give DTRs in the terms in which they were given. The submissions do not articulate why it would be “impractical” to issue DTRs or to whom it would be unfair or why, although it seems to be implicit in the submission that issuing the DTRs would be unfair to the builder.
  6. [70]
    Without deciding the issue, I could understand an argument that it would be unfair and potentially impractical for the Tribunal to set aside or amend a decision to issue a DTR in particular terms in favour of a DTR in different terms if the builder had already complied or commenced to comply with the DTR. But here the builder has not complied at all with the eight new DTRs and, I infer, is not likely to.
  7. [71]
    If it would otherwise be appropriate for a particular DTR to issue, I am unable to see why it would be impractical or unfair to the builder (or anyone else, including the Commission) for the DTR to issue simply because the Commission had issued a DTR in different terms with which the builder has not and is unlikely to comply.
  8. [72]
    The Commission says this would be to “essentially duplicate the Commission’s process”. It is the essence of administrative review that the Tribunal stands in the shoes of the decision-maker to produce the correct and preferable decision. The hearing may to an extent “duplicate” the decision-maker’s process but importantly by way of a fresh hearing on the merits and taking into account evidence that may not have been, and in this case was not, before the Commission.
  9. [73]
    It is true that, as the Commission states, the existing eleven DTRs, including the eight in dispute, will appear on the builder’s record and that could serve some broader public benefit, although it seems the builder is no longer licensed to carry out this work. The builder is also exposed to the risk of recovery of any amount that might be paid under the insurance scheme for these items, although there is no reason to expect that he would be any more responsive to such recovery action than he has been to Mrs Spence’s attempt to recover the damages awarded in the building dispute decision.
  10. [74]
    In any case, these considerations are of little comfort to Mrs Spence. Similarly, that Mrs Spence might, subject to the $200,000 limit on claims, access the insurance scheme in respect of the DTRs in their current terms does not seem to me to be a reason not to issue fresh DTRs in more appropriate terms.
  11. [75]
    For these reasons, I am not persuaded that DTRs sought by Mrs Spence should not issue merely because DTRs in different terms have already issued.

(b) Compensation already paid under the statutory insurance scheme

  1. [76]
    The Commission says that as a matter of discretion a DTR should not be given for incomplete work for which Mrs Spence has been compensated by way of the Commission’s insurance payment.
  2. [77]
    The Commission’s submissions state:
  1. In circumstances where the Applicant has already been awarded compensation in the QCAT [building dispute] decision and received a non-completion claim [insurance payment] by the Commission, it is not fair that a direction to rectify should be issued to the Builder for work that is considered to be incomplete.
  1. [78]
    The submission made on behalf of Mrs Spence says there is no duplication; that is, the items for which DTRs are sought are not covered by the insurance payment. Mrs Spence submits that the incomplete works the subject of the insurance payment “primary involved” the variation works on the first and second levels above the garage.
  2. [79]
    The insurance decision states that amount of $70,182.60 paid by the Commission under the insurance scheme was calculated by reference to the following amounts included in the calculation of the damages awarded in the building dispute:

Owner’s loss before liquidated damages$111,326.18
less costs of rectification of contract works(26,596.08)
less costs of rectification of variation works(14,547.50)
Amount paid for non-completion:$70,182.60

  1. [80]
    It is evident on its face that this calculation by the Commission was designed to assess the amount payable under the insurance scheme for “non-completion” by excluding amounts referable to rectification of defective work.
  2. [81]
    The figures used for this calculation by the Commission were extracted from the Tribunal’s explanation of its calculation of Mrs Spence’s loss before liquidated damages, as follows:[9]

a) Contract price including GST$86,063.00

b) Plus value of variations as assessed$37,024.90

c) Sub-total$123,087.90

d) Less money paid to builder$126,759.05

e) Sub-total($3,671.15)

f) Less cost of rectification of the contract works$26,596.08

g) Less adjustment to reflect savings to builder$20,588.70

h) Less ‘solatium’$5,000.00

i) Less costs of rectification of the Variation Works$ 14,547.50

j) Less costs of completion of the contract works$ 40,922.75

k) Owner’s loss before liquidated damages$111,326.18

  1. [82]
    It is not clear to me why the Commission calculated non-completion costs in this way. By taking as its starting point the owner’s loss before liquidated damages, the calculation takes into account the allowance for solatium and also the cost savings to the builder from some work not carried out in accordance with the contract.
  2. [83]
    The “costs of completion of the contract works” of $40,922.75 [paragraph j) above] is based on the amount referenced at paragraph [21] h) of the building dispute reasons[10] as the reasonable costs to complete the works under the contract of “$37,202.50 (excl GST)”, the amount of $37,202.50 plus GST at 10% being $40,922.75.
  3. [84]
    That reference in the reasons includes the following footnote:
  1. Although Mr Carey’s report refers to this amount as the estimate ‘to finish the garage and other stage 2 items’ I am satisfied that this amount is separate from his estimate to finish levels 1 & 2, which is a reference to the Variation Works.
  1. [85]
    It is evident that the Member in her reasons distinguished between Contract Works, referring to work required under the original contract, and Variation Works, referring to works agreed as part of the contract variation. Based on footnote 33 extracted above, the amount of $40,922.75 is intended to cover only contract works and not variation works. There is no allowance for non-completion of variation works in this calculation.
  2. [86]
    However, the amount of $70,182.60 assessed and paid under the insurance scheme is considerably in excess of the $40,922.75 referable to completion costs in the reasons for the building dispute decision.
  3. [87]
    In any case, and notwithstanding the correspondence relating to the internal review of the original decision on the insurance claim referenced in submissions by Mrs Spence, the internal review decision of the insurance claim states that it is intended to cover non-completion. There is nothing in the evidence before me to establish that, contrary to its unqualified terms, the insurance decision is limited in the way Mrs Spence maintains.
  4. [88]
    I would, of course, only accept that the insurance payment for non-completion is a barrier to a DTR issuing for work that is considered to be incomplete so far as the insurance payment was calculated by reference to the same items said to be incomplete. It is implicit in the Commission’s submissions that the complaint items for which it submits that DTRs should be refused because they are covered by the insurance claim are the same as or included in those taken into account in calculating the Commission’s insurance payment.
  5. [89]
    It is not appropriate to now require DTRs to be issued for work for which Mrs Spence has already been compensated under the insurance scheme. Even accepting that a DTR could be given for these items, that factor weighs heavily against doing so.[11]

(c) Damages already awarded

  1. [90]
    As noted above, in the building dispute decision the Tribunal made an award of damages in favour of Mrs Spence. Despite enforcement action being taken in the Magistrates Court, the award remains unpaid and it appears to be accepted, and in any case having regard to the effluxion of time I find, that it will not be paid.
  2. [91]
    The Commission says that notwithstanding that Mrs Spence has not been paid by the builder:

It is not appropriate for the Applicant to be awarded compensation again, and not fair to give a direction to rectify to the Builder for items considered to be defective, when a remedy has previously been awarded.

  1. [92]
    It is understandable that Mrs Spence would find it difficult to accept that it would be “unfair” to the builder to be given a DTR for work that is defective because an award of damages has already been made against him when the builder has not paid the damages awarded and there is no evidence to suggest that he will ever do so and every reason to think that he will not.
  2. [93]
    I accept that as a general proposition it would be unfair for a builder to be given a DTR for work for which the builder has been ordered to pay damages for non-completion or defective work. A builder against whom, in respect of the same work, damages were awarded and a DTR issued would effectively suffer twice for the same wrong and the owner effectively would be compensated twice.
  3. [94]
    However, in this case some years have passed since the award of the damages and the builder has not responded to action taken to enforce the award. I infer that the builder is unwilling and/or unable to pay the awarded damages.
  4. [95]
    In those circumstances, the general proposition based on the unfairness of duplicating the cost to the builder and the relief obtained by the owner, even if it may have been relevant when earlier decisions were made, does not now apply. In considering the balance between the interests of the builder and the owner, any theoretical risk of duplicating the cost to the builder must, in my view, give way to the actual unfairness experienced by Mrs Spence who, despite exercising her statutory rights and incurring very substantial legal fees, continues to suffer defective work that has not been rectified and for which she has received no compensation.

(d) No safety concerns with the work in its current state

  1. [96]
    Mrs Spence raised safety concerns in relation to items 5, 20 and 37. The Commission says that Mr Noble’s evidence “sufficiently mitigated and explained” the alleged safety issues and therefore they do not weigh in favour of giving DTRs for these items.
  2. [97]
    I examine this issue below in relation to items 5, 20 and 37.
  3. [98]
    Acceptance that there is a safety issue is not a prerequisite for a finding that work is defective and the absence of such an issue, while relevant, is not conclusive on the question of whether the discretion should be exercised to give a DTR. The presence of a safety issue would weigh heavily in favour of giving a DTR. I take into account the absence of safety issues but give this factor far less weight in exercising the discretion whether to give DTRs than I would to the existence of safety issues.

(e) Passage of time and proximity of the ocean

  1. [99]
    The Commission points to the passage of time since work ceased in late 2014 and, given the location of the site, the proximity of the work to saltwater spray. It says the potential impact on the state of certain building elements weighs against the giving of DTRs even if it were to be accepted that particular complaint items are defective work. The Commission refers in particular to the absence of cladding in some areas leading to extended exposure to the elements.[12]
  2. [100]
    The Commission also notes the likely increase in costs and scope of the works due to the effluxion of time as further reasons why it says it would not now be fair to the builder for DTRs to issue over five years after the work was completed.
  3. [101]
    However, this is not a case where an owner has stood by for an extended period and then belatedly sought to assert her rights. The building dispute, in which Mrs Spence counterclaimed successfully against the builder, commenced in 2014. Mrs Spence’s complaint was lodged on 9 May 2016.
  4. [102]
    In the balance between the interests of the builder and the owner, it seems to me that the unfairness to Mrs Spence of being denied an effective remedy carries greater weight than any unfairness in the builder being directed to do what he should have done in any case – rectify defective work. I also observe that the Commission was prepared to issue eleven DTRs consequent upon the reconsideration decision in April 2019.
  5. [103]
    Given the likely non-response of the builder to any further DTRs, any increase in costs to the builder may well be more theoretical than real. In any case, the Commission’s submission is speculative; there is no evidence that costs for any particular works would have escalated over this time.
  6. [104]
    For these reasons, I do not consider that this factor as a general proposition in the absence of evidence of the potential impact on particular complaint items weighs heavily against issuing DTRs. Nevertheless, I have taken this factor into account in the mix of considerations in deciding whether as a matter of discretion DTRs should issue for each of the contested complaints.
  7. [105]
    Additionally, where the Commission has drawn attention to specific evidence of potential deterioration due to exposure to the elements in respect of items 34, 38, 39 and 43, I refer to this evidence in my consideration of those items.
  8. [106]
    The Commission did not, in respect of any of the items in dispute, submit that the nature of the work required to remedy work if determined to be defective was such that it would be unreasonable to issue a DTR because, for example, it would require demolition of the work.

Practical utility of giving DTRs?

  1. [107]
    In determining whether DTRs should be given, I have considered whether there is any practical utility in doing so.
  2. [108]
    Given that the builder has not paid, and as I have concluded cannot or will not pay, the damages award, and has not complied with the DTRs already given, what are the prospects of the builder complying with any further DTRs that might issue? It must be concluded that the prospects are not strong.
  3. [109]
    What then would be the practical utility of giving DTRs?
  4. [110]
    The Commission advised that if the Tribunal were to decide that DTRs should be given, the builder would be given 28 days to comply with them and if he did not the Commission would proceed to assess any entitlement under the statutory insurance scheme.[13]
  5. [111]
    Further, DTRs are not given solely for the benefit of the owner, but also to maintain standards in the building industry.[14] In that regard, as the Commission noted in the context of its submissions relating to items for which a DTR has already been given, a DTR would appear on the builder’s publicly available licence record and the builder would be exposed to the prospect of the Commission seeking to recover any further payment made under the insurance scheme.
  6. [112]
    In any case, the Commission did not submit that DTRs should be refused on the basis of lack of utility.

Decision on each disputed item

  1. [113]
    Applying these principles, my decisions and reasons in respect of each of the contested items are set out in the Appendix.
  2. [114]
    Where I have concluded that an item is defective, I have in each case weighed up the discretionary considerations identified earlier, giving them the weight indicated in the earlier discussion to reach my conclusion on whether a DTR should issue. Because of the limited weight that I have concluded should be given to those considerations, other than in respect of incomplete work being already compensated under the insurance scheme, this has meant that I have generally concluded that DTRs should issue. To avoid prolixity, I have not repeatedly set out these factors in the discussion of each of the 49 individual complaint items but have taken them into account with the weight indicated in reaching my conclusion.

Disposition of the application for review

  1. [115]
    To the extent that I have concluded in the Appendix that DTRs should be given, the reconsideration decision should be set aside and substituted with a decision that those DTRs be given.[15]
  2. [116]
    Otherwise, the reconsideration decision should be confirmed.

Costs

  1. [117]
    Mrs Spence also sought costs. The Commission submitted that on receiving this decision the parties could make any application for costs. I will provide the parties with an opportunity to make submissions regarding costs if they wish to do so. Unless either party seeks an oral hearing, any application for costs will be determined on the papers.
  2. [118]
    Mrs Spence has incurred considerable costs and, no doubt, the stress that accompanies protracted litigation, in pursuing remedies through the building dispute, her insurance claim and this proceeding. Considerable time and costs of the Commission have also been taken up in this matter that could otherwise have been directed to other demands upon its limited resources.
  3. [119]
    I mean no disrespect to any party when I observe that Mrs Spence is not a young woman and the matters at the heart of this dispute have dragged on since 2014 or at least in respect of the subject complaints since 2016. In matters such as this, there must reach a point where the rational and responsible course and desirable outcome is for the parties to reach agreement on its resolution rather than continuing to sink further time and cost of litigation that is disproportionate to any potential outcome.
  4. [120]
    In that regard, I am well aware that the Commission has statutory duties which do not allow it to reach a commercial settlement in the same way that private parties may be able to resolve disputes. But even within those constraints, there must be a range of acceptable outcomes that, with goodwill and flexibility on both sides, would allow matters to be resolved responsibly while minimising further costs for the State and Mrs Spence. In a practical sense, it seems likely in the particular circumstances of this matter that the substantive resolution of remaining issues will ultimately occur through the statutory insurance scheme.
  5. [121]
    Accordingly, I express the hope that these matters including any claim for costs in this proceeding can be resolved in discussions between the Commission and Mrs Spence, without the parties being put to the cost of further submissions and/or litigation. With that in mind, I will allow more time than usual for any submissions on costs in the hope that the parties will confer and reach agreement on all outstanding matters.

appendix

(a) Directions to rectify already given

Items 14, 17, 18, 21, 23, 30, 31 and 47

  1. [1]
    The only reason submitted by the Commission that DTRs should not issue in the same terms as the DTRs that the original decision determined should issue is that DTRs have already issued for those items in accordance with the reconsideration decision.
  2. [2]
    For the reasons already given, I do not accept that submission. Nor is there anything on the face of the terms of the DTRs that the original decision determined should issue that strikes me as inappropriate. Mr Hayes considered them to be appropriate.
  3. [3]
    Accordingly, I conclude that the DTRs sought by Mrs Spence should be given for these items.

(b) Defective work?

Items 1-6, 9, 10, 11, 20, 22, 27 and 37

Item 1: Footing system at front entry

  1. [4]
    The original DTR described this alleged defect in this way:

The footing system located at the front entry (western side) has not been constructed as per the design engineer’s plans, in that the original retaining wall and footing has not been replaced with a new continues [continuous] footing system. This has resulted in the external wall not being constructed as per the approved plans which has affected the alignment of this wall with the existing building doorways on the levels above including reducing door opens from 820 to 730mm wide.

  1. [5]
    Mr Vogler is concerned that such support is insufficient for the load bearing requirements for a three-storey building.
  2. [6]
    This work was inspected by STA. Mr Noble interprets STA’s documents as not raising concerns as to the acceptability of the footing and says that for an item of such significance as the ability of the footing to bear the load of the building it would be expected that the engineers would have raised any concerns.
  3. [7]
    Additionally, the Commission says there is no way of knowing what footings would be found to exist without invasive testing which was not carried out. The STA inspection report dated 3 April 2014 shows the “NOT OK” boxes ticked against the references to footings. The STA report dated 11 April 2014 has the “N/A” boxes ticked and an attachment has a handwritten notation “already poured” suggesting further inspections were not carried out. An attachment to an STA report dated 24 April 2014 states in handwriting “Not included” with an arrow pointing to “Block Continuous Footing”.
  4. [8]
    On balance, these references support Mr Hayes’ original conclusion that the footing was not installed as required. Further, as no representative of STA was called to explain the reports on which Mr Noble relied for his conclusion, I am unable to accept that the brief and unexplained notations confirm that STA regarded the footing as satisfactory.
  5. [9]
    In any case, the deviation from the approved work is not of a minor nature such that, in accordance with the principles outlined above, it could be regarded as performing and therefore not defective. There was no engineering evidence to confirm that it was in fact performing.
  6. [10]
    Given the nature of the deviation from the plans, I consider that this work is faulty and unsatisfactory and therefore defective. A DTR should issue.

Item 2: Waterproofing system

  1. [11]
    The original DTR described this alleged defect in this way:

The waterproofing system including associated fill material and drainage to blockwork at the front entry (western side) is inadequate as water penetration occurs to the undercroft area.

  1. [12]
    Mr Noble and Mr Vogler accept that waterproofing is not required by the relevant building code in an area such as this. However, Mr Vogler considers that effective waterproofing is required in the particular circumstances and without it timber wall framing in this area may be subject to decay issues thus creating structural and safety issues and would be prone to mould. Mr Noble says the area is sufficiently ventilated that any moisture affecting timber would dry out naturally and is not of concern.
  2. [13]
    Waterproofing was required by the approved plans. I accept Mr Vogler’s evidence that it was not properly installed and therefore is not functioning as it should. I do not accept this is the type of minor deviation that may lead to a conclusion that work is not defective because the work as constructed is performing. Waterproofing was required. It was not provided effectively. As Mr Hayes and Mr Vogler concluded, the work is unsatisfactory.
  3. [14]
    Accordingly, this item is defective. A DTR should issue.

Item 3: Footing system to northern wall of boat storage area

  1. [15]
    The original DTR described this alleged defect in this way:

The footings system to the northern wall of the boat storage area has not been constructed as per the design engineer’s plans.

  1. [16]
    Specifically, Mr Vogler says a block wall on the northern elevation in the footing design is missing.
  2. [17]
    Mr Noble says that he relied on STA’s checklists to determine that, although not compliant with the approved plans, the footing system was satisfactory.
  3. [18]
    Submissions filed on behalf of Mrs Spence after the hearing referred to notations on the STA report dated 3 April 2014 and the “NOT OK” box being ticked. However, the Comments section although calling for some additional work to be undertaken does not reference the block wall. There is nothing to indicate whether or not the absence of the wall is problematic if that additional work is carried out.
  4. [19]
    Similarly, the submissions refer to the STA report of 11 April 2014 which includes a drawing with the handwritten notation “no wall” on it. Again, there is no accompanying commentary to explain this notation.
  5. [20]
    In the absence of direct evidence from the engineer, I am unable to be satisfied that this work is satisfactory. In any case, the departure from the approved plans is significant. It does not fall into the category of a minor deviation.
  6. [21]
    Additionally, I note that Mrs Spence’s statement recounts advice from Mr McDonald of STA that a notation “not included” in the 24 April 2014 STA report indicates that the slab was not completed and ready to be inspected and that STA was not called upon to return to inspect this work. This is contrary to Mr Noble’s inference that STA had accepted this work as satisfactory. However, I would reach the same conclusion without reliance on this hearsay evidence.
  7. [22]
    This item is defective. A DTR should issue.

Item 4: Thickening beam to the boat storage area slab

  1. [23]
    The original DTR described this alleged defect in this way:

The thickening beam to the boat storage area slab as [has] not been constructed as per the design engineer’s plans.

  1. [24]
    The difficulty for Mrs Spence is that this area was not inspected before the slab was poured. Mr Vogler seemed to accept that some form of invasive inspection would be required to ascertain what work was carried out.
  2. [25]
    Mr Noble states that the STA engineers would have been obliged to raise any concerns with this work. However, there is no indication that STA were asked to carry out final inspections. As already noted in relation to item 3, Mr McDonald advised Mrs Spence that they were not.
  3. [26]
    It is to be expected that a builder who had carried out works in accordance with plans as required would ensure that mandatory inspections would occur before concrete was poured to demonstrate that the beam had been included as required. As this did not occur, and having regard to the range of other issues with this builder’s commitment to the integrity of his work as demonstrated in this and the building dispute case, I infer, as did Mr Hayes, that the required thickening beam was not included.
  4. [27]
    Mr Noble gave evidence that there was no evidence of subsidence or the like. However, that does not indicate that the slab was constructed satisfactorily in accordance with the plans. In the absence of engineering evidence, I cannot accept that this is a case where the work, although different from that required by the plans, is performing and satisfactory. Mr Vogler considered that this was “almost certainly” a defect. In any case, the absence of the thickening beam is a significant and unexplained departure from the approved plans. There is no evidence that an acceptable alternative solution was adopted.
  5. [28]
    On balance, I am satisfied that this work is defective and that a DTR should issue.

Item 5: Timber frame on top of block wall

  1. [29]
    The original DTR described this alleged defect in this way:

The blockwork wall to the undercroft area has not been constructed to the correct height resulting in a section of timber wall being erected on top of the blockwork wall to support the floor and wall frame for the level above.

  1. [30]
    Mr Vogler is concerned about the capacity of the wall to support the building and also thought the studs in the timber wall were too far apart, stating “unless an engineer tells me otherwise” the timber frame was unsafe and a major defect.
  2. [31]
    Mr Noble gave evidence, apparently based on the STA reports, that STA were not satisfied with the wall and roof frame but were satisfied with the subfloor frame. There appears to be no specific indication that STA considered this aspect of the work to be unsatisfactory.
  3. [32]
    There are two inspection reports by STA Consulting Engineers with various handwritten comments. The STA report also called for further inspections. However, it is unclear on the face of the reports whether STA concluded that the particular aspect in question was satisfactory or not.
  4. [33]
    Having regard to the summary form information in the inspection reports, in the absence of direct evidence from STA or another engineer, I am unable to be satisfied that this work as constructed is satisfactory. Nor do the statements of Mr Noble persuade me that the work has been approved as safe by STA. In any case, the deviation from the plans is substantial, and unexplained. In those circumstances, regardless of whether or not there is a safety issue, the work is faulty and unsatisfactory.
  5. [34]
    In those circumstances I conclude that the work as constructed is defective. A DTR should issue.

Item 6: Stage 2 addition not constructed in accordance with plans

  1. [35]
    The original DTR described this alleged defect in this way:

The stage 2 addition has not been constructed in accordance with the architectural and design engineer’s plans, which allowed for structural support for the future stage 3 two level construction.

  1. [36]
    The original approved plans dated 22 June 2010 called for a braced timber frame and that is what the builder constructed. However, the later plans which were adopted for the purposes of the contract called for a reinforced block wall, which was not constructed. Mr Noble says that it is clear that the engineer in another iteration or iterations of the plans made reasonable adjustments. Mr Vogler does not concur.
  2. [37]
    The approved plan required a reinforced block wall. This was not constructed. This is not a case where there is a minor deviation but the work is performing. This is a substantial deviation from the approved plans. Further, there is no direct engineering evidence that the work is satisfactory.
  3. [38]
    In those circumstances, I am satisfied that the work is faulty and therefore defective. A DTR should issue.

Item 9: Footing system along the southern connecting wall

  1. [39]
    The original DTR described this alleged defect in this way:

The footing system along the southern connecting wall has not been constructed as per the design engineer’s plans.

  1. [40]
    Mr Noble says that checklists completed by STA indicate their engineer was satisfied with part of this footing but was unable to inspect another part because at the time of this second inspection the footing was, according to a notation on the checklist, “already poured”. Mr Noble accepted that there appeared to have been no inspection of the required piers as there was an “existing footing system and piers system that was in place, prior to the build”.
  2. [41]
    Mr Noble stated that the engineer would have assessed the ability of the existing wall to support the load. There is no evidence from the engineer to support that speculation and in the absence of clear indication of the engineer’s view of the wall I am not prepared to draw that inference. No invasive inspection was undertaken.
  3. [42]
    Mr Noble also accepted during cross-examination that there was a requirement for an additional footing to be tied to the existing footing and that had not occurred. The work is at least to that extent defective.
  4. [43]
    In those circumstances, a DTR should issue to require the work to comply with the approved plans. Whether the work required to comply with the notice is limited to an additional footing tied to the existing footing or further work is required can be established if necessary with the assistance of further inspections and/or engineering advice when or if work is carried out to comply with the DTR.

Item 10: Blockwork walls to entry, garage and boat storage area

  1. [44]
    The original DTR described this alleged defect in this way:

The blockwork walls to the entry, garage and boat storage area have not been constructed as per the architectural and design engineer’s plans.

  1. [45]
    In particular, the approved plans required a blockwork wall but a timber wall was constructed. Additionally, Mr Noble acknowledged that the southern block retaining wall to the open area storage and western block retaining wall below the entry were not installed to the “Reduced Level” required by the plans.
  2. [46]
    Construction of a timber wall rather than a blockwork wall is a major deviation from the approved plans. It is not in the category of a minor but performing deviation. Nor is there direct engineering evidence that the work would perform its intended function.
  3. [47]
    In these circumstances, I consider the work to be defective. A DTR should issue.

Item 11: Structural steel post removed

  1. [48]
    The original DTR described this alleged defect in this way:

A structural steel post in existing building dividing wall has been removed without engineering advice which has compromised the existing main structure. This has resulted in the adjacent room floor in existing building on that level creaking.

  1. [49]
    Mr Noble accepts that the post has been removed but stated that it is evident that this was to allow for a new doorway to access the wet area and that the post served a secondary support function that has been superseded by other works. However, he has not addressed the resulting creaking of the floor of the adjoining room as noted by Mr Hayes.
  2. [50]
    Mr Vogler disputes that the post only served a support function and says its main function along with two other posts was to tie down the roof to stop it blowing off.
  3. [51]
    Mr Noble says that later plans do not refer to the post. However, Mr Vogler says that if the engineers approved its removal the engineering plans would have clearly stated that the existing column is to be removed.
  4. [52]
    Given the additional role to which Mr Vogler refers, the absence of any reference to removal of this post identified in any plans by either party, its unexplained removal, Mr Hayes’ view that it was required, and the absence of final frame inspections and approval, I am not satisfied that this departure from the plans is satisfactory. Having regard to Mr Vogler’s evidence regarding the tie down function, I cannot conclude that it is an acceptable deviation from the plans in the absence of direct engineering evidence.
  5. [53]
    On balance, on the basis of the evidence before me, I accept that the removal of the post means that this work is defective. A DTR should issue.

Item 20: Support for single structural laminated beam

  1. [54]
    The original DTR described this alleged defect in this way:

The single structural laminated beam under the bathroom/workshop wall which supports 3 levels of building structure above, is sitting on one 90x35 stud and is packed up with a piece of fibre cement sheet and is only secured on one side with a single lightweight framing anchor. The wall located above does not align and the tie down is not an approved engineered method.

  1. [55]
    The fibre cement packing under the beam is evident from a photograph produced by Mr Vogler. Mr Noble says the engineer did not raise any issue in the September 2014 inspections.
  2. [56]
    Mr Vogler’s evidence that this is defective is plausible. Mr Noble agreed that the work is not completed although he considered that the load bearing was satisfactory for reasons that he sought to explain.
  3. [57]
    The framework has not been approved and in the absence of direct engineering evidence, I am not satisfied that this work is not defective. I conclude that it is defective or alternatively, as Mr Noble seemed to acknowledge, incomplete. A DTR should issue.
  4. [58]
    The Commission disputes that this item raises a safety issue. However, even if it does not, that does not mean that the work is not defective.
  5. [59]
    Mr Noble could not rule out that this work may present in the future as an issue. In that regard, the Commission says that a DTR cannot be given for a potential defect and from a practical perspective it would not be able to sufficiently articulate a potential defect in a direction.
  6. [60]
    However, with respect, this confuses the presence of a defect with the consequences of the defect. That the consequences of a defect may not be able to be articulated at this time does not prevent the defect being articulated and remedied. There may be other reasons why the defect could not be remedied but the Commission did not identify any. The absence of evident consequences currently arising out of the defect is not a sufficient reason to decline to give a DTR.
  7. [61]
    For these reasons, I conclude that the work is defective and a DTR should given.

Item 22: Roof trusses

  1. [62]
    The original DTR described this alleged defect in this way:

Roof trusses in garage are on a lean and not fitted in a straight line.

  1. [63]
    Mr Noble and Mr Vogler agree that vertically the trusses are not sufficiently out of plumb to be regarded as a defect. On this basis, the Commission submits that since Mr Vogler agrees that this item is not defective a DTR cannot issue.
  2. [64]
    However, the vertical alignment is only one aspect of this item. There is also the issue that Mr Vogler says the trusses overhang by up to 25 mm. Mr Noble says that the overhang is uniform. Mr Vogler says it is not uniform and that the cladding unevenly juts out by up to 50 mm to accommodate this defect. I accept Mr Vogler’s evidence in this regard which is supported by the photograph included with his report.
  3. [65]
    Accordingly, I conclude that this work is defective. A DTR should issue.

Item 27: Levels 2 and 3 constructed wider than the plans

  1. [66]
    The original DTR described this alleged defect in this way:

Levels 2 and 3 have been constructed wider than the approved plans by approximately 800mm which has not been engineer designed for this wider span.

  1. [67]
    Mr Noble and Mr Vogler agree that the constructed area exceeds the width in the approved plans.
  2. [68]
    Mr Noble says that STA did not raise a concern about this issue. However, no final approval has issued. It is not clear on the evidence before me whether STA did or did not have concerns about this item.
  3. [69]
    The Commission says this is not a defect because there is no evidence that it is detrimental and not performing. However, this is not in the category of a minor deviation in as constructed work which is otherwise performing. The extra width means that the building is not compliant with Council requirements.
  4. [70]
    For these reasons, I conclude that the work is defective. A DTR should issue.

Item 37: Steel post not aligned

  1. [71]
    The original DTR described this alleged defect in this way:

The steel post [which supports upper levels and the roof] has not been aligned through the levels and mild steel plates/fixings have been welded to the post compromising the hot dip galvanising.

  1. [72]
    Mr Vogler’s statement referred to photographs held by Mrs Spence which were included in Mr Vogler’s report. However, Mr Vogler’s ultimate conclusion was that he was unable to determine whether the work was defective because the area was concealed and recommended that the item be further investigated. It follows that, as the Commission submitted, I could not conclude that there is a safety issue in respect of this item.
  2. [73]
    Submissions filed on behalf of Mrs Spence suggested that the necessary investigations be carried out as part of a direction to rectify any adverse findings. However, since a finding that work is defective or incomplete is a prerequisite to giving a DTR, and Mrs Spence’s own expert has stated that he is unable to say whether the work is defective (and there is no suggestion that it is incomplete), I am unable to accept this submission.
  3. [74]
    Since there is no evidentiary foundation on which I could conclude that this work is defective (or incomplete), no DTR should issue for this item.

(c) Incomplete work

Items 15, 16, 19, 24-26, 28, 29, 32-35, 38, 41-44, 46 and 48-51

  1. [75]
    For the reasons already given, I accept that DTRs should not issue for these items on the basis that Mrs Spence has already received an insurance payment relating to incomplete work.
  2. [76]
    The balance does not favour the giving of DTRs for these items. Although issuing DTRs could have some public benefit from the DTRs being recorded in the builder’s public licence record, in my view this is outweighed by the unfairness of issuing DTRs when a payment has already been received and the limited utility in doing so in respect of these items.

(d) Defective work, but damages already awarded

Items 8, 12, 13, 39 and 40

  1. [77]
    The Commission accepts that these items of work are defective. For the reasons already given, in the particular circumstances of this case I do not accept that the fact that an award of damages was made is a reason in itself not to issue DTRs when the award was made some three years ago, remains outstanding and as I have concluded will not be paid.
  2. [78]
    The Commission drew attention to evidence regarding the potential impact of the effluxion of time in respect of complaint item 39. Specifically, Mr Noble in oral evidence directed to whether the enclosed stage had been reached pointed out:

The cladding is incomplete to these specific locations, insofar as you can physically see that there’s the structural frame, or the skeleton of the dwelling if you like, that is not enclosed. You’ll also note the discolouration of the timber framing, due to extended exposure to the elements in this particular location and splitting of – of the timber. So the – this would not be visible to the eye if the works were being – were actually complete and deterioration to this frame would be prevented if these works are progressed to finality, in providing enclosure to that – the building elements or the – the frame elements that are depicted in these pictures . . .

  1. [79]
    I accept that there has been deterioration as Mr Noble stated due to exposure to the elements. However, this complaint item is not directed to the quality or condition of the timber frame. It is concerned with the garage roof of the level 2 balcony not being aligned and causing a step in the balcony wall. I do not consider that the deterioration is a sufficient reason in itself, or combined with the other factors identified by the Commission, to conclude that as a matter of discretion a DTR should not issue for item 39.
  2. [80]
    While I have had regard to all of the factors already mentioned, I do not consider that collectively they outweigh the unfairness to Mrs Spence in declining to issue DTRs for these items.

(e) Defective work, but insufficient evidence that the builder is responsible?

Item 45

  1. [81]
    The item concerns a hose cock and pipework not being fixed to the blockwork at the north-western corner of the garage.
  2. [82]
    On the evidence, it appears to be accepted that the hose cock and pipework were installed but forcibly removed. The Commission accepts that the work is defective but says a DTR should not issue because there is insufficient evidence that the builder is responsible.
  3. [83]
    Mr Hayes gave evidence that:

I would think at that location, it would be most likely that the builder has removed it to be able to install that downpipe that’s been installed, which come[s] down over the hose cock.

  1. [84]
    Mr Hayes’ explanation, although speculative, is plausible and not inherently unlikely. There is no other explanation on the evidence for why a properly installed item of this kind would be forcibly removed. There is no suggestion that Mrs Spence did so or anyone on her behalf. On balance, I accept that the builder was responsible for this defect.
  2. [85]
    Taking into account the other factors to which the Commission refers as discretionary reasons for not issuing DTRs, I am persuaded that on balance the considerations in favour of issuing a DTR prevail for item 45. The work is defective and I give the factors against issuing a DTR limited weight for the reasons already explained.

Footnotes

[1] Dyer v Spence [2017] QCAT 211.

[2] It is common ground that the relevant work is “building work”, as defined. The Commission does not deny that the builder is responsible for any work found to be defective, other than in respect of complaint item 45.

[3] QBCC Act, Schedule 2.

[4] [2015] QCAT 260.

[5] [2015] QCAT 260, [16]–[18].

[6] Dyer v Spence [2017] QCAT 211.

[7] In respect of the first such consideration, the Commission primarily submits that the Tribunal cannot issue DTRs where a DTR has already issued but in the alternative submits that as a matter of discretion it should not do so. It is convenient to deal with both aspects of this submission together.

[8] [2009] CCT QT104-07, [52].

[9] Dyer v Spence [2017] QCAT 211, [55] (footnotes omitted).

[10] Dyer v Spence [2017] QCAT 211.

[11] If Mrs Spence is dissatisfied with the calculation of the insurance payment for non-completion, she has independent review rights in respect of her insurance claim.

[12] There was evidence, and it is self-evident in any case, that cladding assists in weatherproofing and thus preventing deterioration.

[13] It is not clear to me what the Commission’s practice would be if DTRs were refused for defective work on discretionary grounds. I assume that this would not be regarded as a barrier to approving a claim under the insurance scheme for to take that approach would, because the damages award is not and will not be paid, deny Mrs Spence compensation for defective work contrary to the objects of the QBCC Act. However, that is a matter of the proper interpretation and application of the insurance policy which is not before the Tribunal in this proceeding.

[14] Middleton v Queensland Building and Construction Commission [2018] QCAT 177, [40]-[41].

[15] There was no discussion at the hearing or in the parties’ submissions in the event that I determined that DTRs should issue regarding their precise terms, other than Mrs Spence’s submission that they should replicate the original DTRs. In case some refinement seems necessary to the parties in the light of the evidence in this proceeding, I will allow for some flexibility for agreed wording to be adopted; failing agreement, the DTRs will be in the same terms as the original DTRs.

Close

Editorial Notes

  • Published Case Name:

    Spence v Queensland Building and Construction Commission

  • Shortened Case Name:

    Spence v Queensland Building and Construction Commission

  • MNC:

    [2020] QCAT 274

  • Court:

    QCAT

  • Judge(s):

    Member Olding

  • Date:

    21 Jul 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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