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Kenealy v Queensland Building and Construction Commission QCAT 305
Kenealy v Queensland Building and Construction Commission  QCAT 305
Queensland Building and Construction Commission
General administrative review matters
13 November 2015
24 August 2016
GENERAL ADMISTRATIVE REVIEW – where direction to rectify not issued – whether breaks in storm water and sewer pipes result of defective building work – where decision not to issue direction on basis of not reasonable due to cause not being known – where further investigation shows cause was failure to connect storm water pipe to street discharge – where builder rectifies defects – whether work still defective – whether loss of soil under slab constitutes a defect – where Tribunal determines loss of soil is consequential loss subject to direction to remedy
Queensland Building and Construction Commission Act 1991 (Qld) s 71H, s 71L, s 72, s 86, s 87
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 17, s 19, s 20, s 21, s 24
The Applicant appeared on his own behalf
Ms Stewart appeared for the Queensland Building and Construction Commission
REASONS FOR DECISION
- Mr Douglas Kenealy is the owner of a property at Mackenzie, which he and his wife purchased on 27 July 2012. Mr Mark Cygan, a licensed builder, had constructed a house on the property in 2010 up to the lock up stage. There was a blockage in the sewerage system in September 2014. Mr Kenealy says that he was advised by the plumber who inspected the pipes with CCTV to make a complaint to the Queensland Building and Construction Commission (‘the Commission’). The Commission received a complaint dated 26 September 2014 from Mr Kenealy alleging that:
- North east corner under external slab - The external sewer is broken in 2 places including connection to vertical riser from sewer connection;
- North east corner – slab is drummy and a void can be seen under the slab where the ground has subsided; and
- East external slab – external slab between house wall and retaining wall has subsided.
- The complaint was investigated and a report was prepared by Leakless Plumbing on 3 December 2014. The report identified breaks in both the storm water and sewerage lines and a break and kink in the sewerage in section vertical shaft. The Leakless report noted that there was a rubble pit or broken pipe that had created a large void under the ground. The inspector determined that the breaks were not attributable to the builder, noting that the concrete paths were not part of the builder’s contract. Mr Kenealy made an application for an internal review of that decision and the original decision was confirmed on review on 3 March 2015. He has now applied to the Tribunal for an external review of the decision.
- During the application process, the Commission arranged for another investigation to occur following submission by Mr Kenealy of further information. In particular, that there was a void apparent near the house slab. An invasive inspection by Mr Keys, plumber, on 22 September 2015 produced a report of 23 September 2015. Mr Keys confirmed that the storm water pipes from the property had never been connected to the kerb line outlet and that repairs needed to be carried out as quickly as possible. Because of this report, Mr Cygan arranged to have work performed to repair breaks in the storm water and sewer pipes at the property. This work was performed on 9 October 2015. Mr Cygan provided photos to the Commission’s inspector, Mr Stephen Ferguson, to confirm the work was done.
- Mr Kenealy had his plumber, Fallon Solutions, undertake a further CCTV investigation following Mr Cygan’s work and they confirmed that the stormwater drains had been connected to an existing storm water drain and were in seemingly sound condition. It was noted though, that the sewerage drains at the vertical jump up were in very poor condition, the drain pipes had multiple oval shaped joints and the pipe may have broken relatively soon due to its poor condition. Mr Kenealy stated that as at 29 October 2015, the ground had already subsided since it was filled to external slab level on 9 October 2015, which he considered indicated that it had not been properly filled or the fill was slumping into voids left when the rectification work was carried out. He considered that correcting this issue could be achieved by ensuring that all voids, which have been created by the issues in this application, were properly filled. This extends to the house slab add footings and under external slabs. He stated that there still remains the risk that the house piles under this corner of the house and external retaining walls have been compromised due to the depth of the issues with the stormwater and material eroding from the vicinity of the piles.
- Mr Kenealy at the hearing was seeking directions to rectify in respect of the following:
- Vertical sewer riser between main and external slab inspection outlet should be replaced in its entirety;
- All voids under internal house slab, perimeter footings and external slabs should be properly filled to ensure no future ground settlement issues; and
- The structural integrity of the house in the northeast corner of the block be verified.
- Mr Kenealy confirmed at the hearing that he was not currently experiencing issues with sewerage or storm water at the property.
- If the Commission is of the opinion that building work is defective or incomplete, it may direct the person who carried out the building work to rectify the building work. Building work includes the provision of sewerage or drainage in connection with a building. The term defective is defined as in relation to building work, and includes faulty or unsatisfactory. The Commission may also direct a person who carried out building work to remedy consequential damage. Consequential damage includes damage caused by, or as a consequence of, carrying on building work at a building site, regardless of any intention, negligence or recklessness of the person carrying out the work; and to a residential property at the relevant site. Damage to a residential property includes the cracking, lifting or cratering of a driveway or pathway on the property.
- In deciding whether to give a direction, the Commission 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. A person who carries out building work includes a building contractor whose name, licence number and address are stated on the contract. Mr Mark Cygan’s details appear on the contract. 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.
- Examples given in the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’) as to why a direction would not be issued are that an owner refuses to allow a builder 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. The objects of the QBCC Act include to achieve a reasonable balance between the interests of building contractors and consumers and to provide remedies for defective building work.
- The Commission has a defects policy entitled ‘Rectification of Building Work Policy’. In accordance with that policy a building contractor who relevantly carries out category 1 defective building work should be required to rectify that work, unless in the circumstances rectification is unfair or unreasonable. Category 1 defective building work is defined in the policy as building work that is faulty or unsatisfactory because it does one or more of the following:
- adversely affects the structural performance of the building;
- adversely affects the health or safety of persons residing in or occupying a building;
- adversely affects the functional use of a building; and
- allows water penetration into a building.
- Defective building work is defined in the policy as building work that is faulty or unsatisfactory, and includes, for example, work that does not comply with the Building Act 1975 (Qld), the Building Code of Australia or an applicable Australian standard, or 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 manufacturers instructions.
- There are special provisions where a building contractor carries out residential construction work causing subsidence, which is defined as foundation movement that causes footing or slab deflection or other damage to a residence or related roofed building.
- The Tribunal has jurisdiction to review the decision of the Commission not to issue a direction to rectify upon application by Mr Kenealy as a home owner. The Tribunal when reviewing a decision of the Commission must decide the review and perform the functions conferred on the Tribunal by the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’) and the QBCC Act and has all the functions of the decision-maker for the reviewable decision. The purpose of the reviewable decision is to produce the correct and preferable decision and the Tribunal must hear and decide a review by way of a fresh hearing on the merits. The role of the Commission is to assist the Tribunal to make its decision on review and part of that role is to provide the Tribunal with a written statement of reasons. The Tribunal may confirm or amend the reviewable decision; set aside the reviewable decision and substitute its own decision; or set aside the decision and return it to the decision-maker for reconsideration with the directions the Tribunal considers appropriate.
- Mr Ferguson dealt with the issues raised by Mr Kenealy, in his statement and in oral evidence. Mr Kenealy was concerned about possible subsidence of the house slab. Mr Ferguson confirmed that the footing system had been designed with piers to the fill side to support the dwelling through the un-compacted fill. That the original inspector had performed measurement to determine if the slab level showed subsidence and the floor slope was 1:518 which was well outside the 1:100, was described as undesirable under Australian Standard AS 2870-1996. While the Commission had not had an opportunity to inspect the backfilling, Mr Ferguson noted that it is not practical to provide significant compaction to the backfilling completed during the rectification works and that there will always be some settlement from any excavation to a property. Allowing a gravity compaction, followed up by additional top dressing, is considered normal practice.
- Mr Ferguson noted that the report of Fallon Solutions does not identify a defect and/or state that the vertical riser squash has not been addressed and so he did not believe that the Commission could direct the builder to rectify the sewer riser. Likewise, there was no evidence that the dwelling slab is defective, the builder did not install the external paths, there are other contributing factors in relation to settlement of the substrate and he described settlement of the fill as consequential damage. Therefore, the Commission could not direct that the voids be filled to ensure there would be no future ground settlement issues. The requested direction to verify the structural integrity of the northeast corner of the block could not be issued as the Commission believes the house slab is performing and can only direct a builder to rectify ‘defective building work’.
- Mr Kenealy at the hearing considered that the vertical riser remains as a defect and should be rectified, that a lot of water has discharged into the yard and the Commission agrees that the external slab has subsided as a result of stormwater. He has significant concern about the corner of the house not being considered as a defect simply consequential.
- Ms Stewart accepted that Mr Cygan was responsible for the failure to connect the stormwater pipe to the street. She submitted that the Mr Cygan has already carried out rectification works to the breaks in the sewer pipes and Mr Kenealy has not identified defective building work in relation to the vertical sewer riser. The Commission cannot issue a direction simply based on the Fallon report. The complaint was originally in regard to the concrete path and not the house slab. There is no evidence that the house slab is subsiding. The subsidence policy requires movement in the foundations, which adversely affects the dwelling, and there is no evidence of movement. Mr Cygan did not install the external paths and there are other contributing factors to the settlement of the substrate to the external slab. That settlement of the fill is consequential damage as a result of the defective stormwater connection.
- Clearly, in this case there was defective building work in that the storm water pipes were not connected to the legal point of discharge for the property and as a result, a large void was created under the northeast corner of Mr Kenealy’s external pathways. It was at this point that the sewer line and the storm water pipes converge, both of which suffered breaks.
- The initial report prepared for the Commission by Leakless identified areas where repairs were required. Finally, after the further investigation by Mr Ferguson and the report of Mr Keys, Mr Cygan has attended to the majority of the defective plumbing works. The latest report from Fallon Solutions on behalf on behalf of Mr Kenealy states that the sewer drains at the vertical jump are in very poor condition and they may break relatively soon. I note that the original report of Leakless stated that the vertical shaft had separated where the O.R.G junctions into the vertical shaft and there was also a kink in the I.O.S shaft.
- Mr Ferguson inspected the site with Mr Keys and has reviewed the photos provided by Mr Cygan following the rectification work. He has also reviewed the report of Fallon Solutions it is his view that Mr Kenealy has not identified defective building work in relation to the vertical sewer line. While Mr Kenealy’s view is that the vertical sewer riser remains as a defect, the report of Fallon Solutions does not indicate that the riser is faulty or unsatisfactory. If there is any further problem with it though, then clearly, Mr Cygan will be liable, as he has performed the repair work. I accept Mr Ferguson’s evidence that the vertical sewer riser is not currently defective.
- I am satisfied that that there should be no direction to rectify in respect of the vertical riser.
- Mr Kenealy has identified that the failure of the builder to connect the storm water line to the street discharge has resulted in a void being created in the north east corner of the external path area. Mr Cygan when rectifying the storm water and sewerage system filled the area where work was performed. Mr Kenealy stated that the ground has subsided since it was filled, which he says indicates that it was not properly filled or the fill is slumping into voids left when the rectification work was carried out. Mr Ferguson stated that the settlement of the fill is consequential damage as a result of the defective stormwater connection. Mr Ferguson had agreed that there was settlement to the concrete path substrate on the northeast corner that was most likely due to the storm water pipe not being connected. Mr Ferguson also stated that settlement of the fill was consequential damage as result of the defective storm water connection.
- The Commission may order that a builder remedy consequential damage caused as a result of their building work. In this case, the loss of the fill was caused by the failure of the builder to ensure that the storm water pipe was properly connected to the external discharge point.
- I will order that Mr Cygan must remedy the consequential damage caused by the defective installation of the storm water pipe by ensuring that the area under the northeast corner of the external slab is filled with soil or other material suitable to the site within 28 days.
- Mr Kenealy has also requested that the structural integrity of the house in the northeast corner be verified. The power of the Commission to issue a direction is in respect of defective building work or consequential damage. I accept Mr Ferguson’s evidence that the house slab is performing and that there is no defective building work disclosed in respect of the house slab. I am satisfied that there should be no direction to verify the integrity of the house slab.
- The Commission indicated that they wished to reserve their rights in respect of costs. I note that Mr Kenealy has been partially successful in his application and as a result I will not entertain an order as to costs.
- The Tribunal makes the following order:
- The decision of the Queensland Building and Construction Commission not to issue a direction to rectify is set aside.
- Marek Cygan must remedy the consequential damage caused by the defective installation of the storm water pipe by ensuring that the area under the north east corner of the external slab at 6 Hernandia Place, Mackenzie is filled with soil or other material suitable to the site within 28 days.
 Exhibit 4 pt 190 – 194.
 Exhibit 8 at 26.
 Ibid at 30–60.
 Exhibit 6 attachment 9.
 Exhibit 3 at –.
 Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’), s 72(1)(a), s 72(2).
 Ibid, sch 2.
 Ibid, s 72(1)(b), s 72(2)(b).
 Ibid, s 71H(1).
 Ibid, s 72(3).
 Ibid, s 71L(1)(a).
 Exhibit 4 at 112.
 QBCC Act, s 72(5).
 Ibid, s 3(a)(ii).
 Ibid, s 3(b).
 Exhibit 4 at 1-20.
 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’), s 17; QBCC Act, s 86 to s 87.
 QCAT Act, s 19.
 Ibid, s 20.
 Ibid, s 21.
 Ibid, s 24.
 Exhibit 8.
 Exhibit 9.
- Published Case Name:
Kenealy v Queensland Building and Construction Commission
- Shortened Case Name:
Kenealy v Queensland Building and Construction Commission
 QCAT 305
24 Aug 2016