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- Middleton v Queensland Building and Construction Commission[2018] QCAT 177
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Middleton v Queensland Building and Construction Commission[2018] QCAT 177
Middleton v Queensland Building and Construction Commission[2018] QCAT 177
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Middleton v Queensland Building and Construction Commission [2018] QCAT 177 |
PARTIES: | MARK ANTHONY MIDDLETON (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) |
APPLICATION NO/S: | GAR251-16 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 22 June 2018 |
HEARING DATE: | 6 December 2017 20 February 2018 |
HEARD AT: | Brisbane |
DECISION OF: | Member Gardiner |
ORDERS: | The decision of the Queensland Building and Construction Commission made on 23 September 2016 to issue direction to rectify and/or complete number 42341 to Mark Anthony Middleton is confirmed. |
CATCHWORDS: | PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – where owner claims defective building work – where Queensland Building and Construction Commission makes decision to issue a direction to rectify to the contractor – where contractor accepts he is responsible for work but says unfair to issue notice – where contractor says work is not defective because either it is within accepted tolerances, not completed because of the issuing of a ‘cease and desist’ notice followed by a termination by the homeowners or because it has already been rectified – whether decision to issue a notice to rectify defects was unreasonable Queensland Building and Construction Commission Act 1991 (Qld), s 3, 72(5) Queensland Civil and Administrative Tribunal Act 2009 (Qld), 24 Don Mackay Pty Ltd v Queensland Building Services Authority [2009] QCCTB 259 |
APPEARANCES & REPRESENTATION: | |
Applicant: | Self-represented |
Respondent: | M Stretton, solicitor of Holding Redlich Lawyers |
REASONS FOR DECISION
- [1]Mark Middleton undertook building work at a property in Camp Hill in Brisbane, entering into a contract with the homeowners in November 2014.
- [2]In August 2015 the homeowners terminated the contract with Mr Middleton and on 2 September 2015 the Queensland Building and Construction Commission (‘the Commission’) received a complaint in relation to 411 items of alleged defective and/or incomplete building work performed by Mr Middleton at the property.
- [3]The complaint made by the homeowners to the Commission indicates that the amount of $35,500.00 remains unpaid by the homeowners under the Contract.
- [4]On 4 May 2016, the Commission notified Mr Middleton of its decision to issue a Direction to Rectify and/or Complete work performed by Mr Middleton at the property.
- [5]Mr Middleton applied to the Commission for an internal review of this decision but on 23 September 2016 the Commission confirmed its original decision.
- [6]On 26 September 2016 the Commission issued a Direction to Rectify and/or Complete regarding work performed by Mr Middleton at the property.
- [7]Mr Middleton seeks to review this Direction to Rectify in this tribunal.
- [8]The Commission called tenders for the rectification of the defective and incomplete building work at the Property (‘building work at the Property’). As part of this process, the Commission has obtained a Tender Assessment Report from Sergon Building Consultants dated 28 September 2017.[1]
- [9]On or about 17 October 2017, the Commission accepted the lowest estimate received, and approved the homeowners' claim under the statutory insurance scheme for both incomplete and defective building work to the statutory maximum limit of $200,000. Even with the approval to the statutory maximum amount, there will be a shortfall of $256,031.66 remaining to be met by the homeowners.
- [10]Section 24 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) sets out the function of this tribunal on review. The tribunal may confirm or amend the decision, set aside the decision and substitute its own, or set aside the decision and return the matter for reconsideration to the decision maker with directions if appropriate.[2]
- [11]The purpose of the review is to produce the correct and preferable decision and is heard and determined by way of a fresh hearing on the merits.[3]
- [12]The power to require rectification of defective building work is contained in section 72 of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). This section of the QBCC Act requires the tribunal to determine the following issues:[4]
- (a)Is the building work defective?
- (b)Is Mr Middleton responsible for the building work?
- (c)Is it fair, in all of the circumstances, for the tribunal (standing in the shoes of the Commission) to exercise the discretion to issue the Direction to Rectify to Mr Middleton?
- (a)
- [13]Mr Middleton accepts that he is responsible for all the building work the subject of the rectification notice. However, overall he submits that the work is either not defective because it is within accepted tolerances, not completed because of the issuing of a ‘cease and desist’ notice followed by a termination by the homeowners, or because it has already been rectified. Mr Middleton says in all of the circumstances it is not fair for this tribunal to exercise the discretion to issue the direction to him to rectify or complete.
- [14]While there is no formal onus of proof in administrative review proceedings, Mr Middleton bears a practical burden of adducing evidence sufficient to satisfy the tribunal that the relief sought should be granted:[5]
In the absence of appropriate evidence the Tribunal will not be free to make the decision sought by the party. This has sometime been described as an evidentiary burden, but there is no formal onus of proof. The question is whether the Tribunal is satisfied that the provision under consideration can be invoked on the information or material before it.
- [15]Mr Middleton filed his final submissions on 4 April 2018. These submissions were at times internally confusing and despite requests to Mr Middleton for explanations of his reference system, none were forthcoming.
- [16]Mr Middleton also added new evidence into these submissions that had not been previously presented in the hearing. The Commission objected to the new evidence in a letter to the tribunal (with a copy to Mr Middleton) on 6 April 2018 after receipt of the closing submissions.
- [17]The tribunal accepts that Mr Middleton was unrepresented and during the hearing substantial explanations were provided to him to assist his presentation of his case. This included an explanation of the role of closing submissions. Despite these explanations, the tribunal is now aware that Mr Middleton may have not completely understood these parameters.
- [18]In particular, the Commission objects to new matters raised by Mr Middleton in relation to categories 41 and 48 of Mr Middleton’s final submission which correspond with the same numbered paragraphs in the Commission’s final submissions. These objections will be dealt with as the issues arise in these reasons.
- [19]Where new evidence has been added to Mr Middleton’s final submissions, this evidence has not been given any weight in these reasons.
The Cease and Desist Notice and subsequent Termination Order
- [20]The Commission submits that the issue of correspondence to Mr Middleton from the homeowners on or about 26 February 2015 requesting the ‘cease and desist’ carrying out building works at the Property does not give rise to unfairness within the meaning of section 72(5) of the QBCC Act. The Commission submits:
- (a)The 'cease and desist' notice was issued to Mr Middleton on or about 26 February 2015, in circumstances where the homeowners held concerns as to the work being performed by Mr Middleton;[6]
- (b)Mr Middleton and the homeowners subsequently continued discussions, and engaged in an Early Dispute Resolution (EDR) process with the Commission;[7]
- (c)At the conclusion of the EDR Process, the parties reached an agreement whereby the homeowners provided Mr Middleton the opportunity to attend and carry out further works at the property;[8]
- (d)Mr Middleton (or his employees or subcontractors) then returned to the Property, and recommenced performance of the work;[9]
- (e)The homeowners subsequently terminated the contract on 2 August 2015 due to, amongst other things, Mr Middleton failing to remedy defective building work, including failing to remedy the defective building work the subject of the EDR agreement; and
- (f)Mr Middleton was then precluded from returning to the Property to carry out further works by reason of the valid termination.[10]
- (a)
- [21]Mr Middleton submits:
- (a)The ‘cease and desist’ order was not related to building matters but was issued because the owners did not have the funds to complete the project;
- (b)This insufficiency of funds causing delay the construction program and forcing financial hardship to Mr Middleton;
- (c)Ongoing access issues further compounded the ability for subcontractors and Mr Middleton to take the project to practical completion stage and attend to the rectification work required by the EDR or water rectification work;
- (d)The QBCC’s two extensions of time to allow the building inspector to produce a statement, further delayed the rectification work, resulting in additional cash and financial pressure;
- (e)The ‘cease and desist’ order was not related to building works as, at the time, no concerns had been raised by the homeowners. One owner became concerned when the budget and funding issues were brought to her attention; and
- (f)An EDR meeting was arranged and the proposed actions agreed upon. The ‘actions’ agreed on were to provide ‘access to the site’ and attend to ‘contractual monetary issues’ and were to be attended to by 31 May 2015. Mr Middleton started work again on the site on that day after access was given. However the ‘contractual money issues’, were not dealt with by that day and no monies were paid although the rectification work was being undertaken.
- (a)
Discussion
- [22]I am not satisfied Mr Middleton was precluded from returning to the property by reason of the homeowners' ‘cease and desist’ notice. I am satisfied a written agreement was reached between the homeowners and Mr Middleton to facilitate his return to the property for the purpose of carrying out further building works under the EDR agreement and that he did return to the property.
- [23]Mr Middleton contends it is unfair to issue a Notice to Rectify to him after the issue of the 'cease and desist' notice and termination order. However, I give no weight to this submission as it is clear that he in fact returned to the property a number of times up until August 2015 when the termination notice was issued. The defects were not resolved by Mr Middleton during that period despite the EDR agreement between the parties.
- [24]The Commission submits the issue of ‘cease and desist’ notice to Mr Middleton does not result in an unfairness of the nature contemplated by section 72(5) of the QBCC Act. That section gives the example of not issuing a Notice to Rectify where an owner refused to allow the builder to return to the property. That is not the case on the facts of this matter. Indeed there was an agreement for Mr Middleton to return to rectify works and he did that prior to the termination notice being issued.
- [25]I am satisfied the issuing of the ‘cease and desist’ notice to Mr Middleton did not result in unfairness of the nature contemplated by section 72(5) of the QBCC Act.
Defects and Incomplete work
- [26]Schedule 2 of the QBCC Act defines defective, in relation to building work, to include faulty or unsatisfactory building work. The Commission submits the phrase ‘faulty or unsatisfactory’ includes building work that fails to meet the requirements of applicable standards, such as the Building Code of Australia (‘BCA’) or the relevant Australian Standard.
- [27]Previous decisions of the tribunal, and its predecessor tribunals, have accepted that a failure to meet relevant standards, such as the BCA or Australian Standards, amounts to defective building work.[11]
- [28]The Queensland Building and Construction Board formulated a Rectification of Building Work Policy.[12] The version of the Policy in force on 1 July 2010 provides that a building contractor who carries out category 1 or category 2 defective building work should be required to rectify that work, unless in the circumstances rectification is unfair or unreasonable.
- [29]Category 1 defective building work is work that adversely affects the structural performance of a building; the health or safety of persons residing in or occupying a building; the functional use of a building; or allows water penetration into a building.
- [30]Category 2 defective building work is work that does not meet a reasonable standard of construction or finish expected of a competent holder of a contractor's licence of the relevant class or has caused a settling in period defect in a new building.
- [31]The policy also defines defective building work 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. It also includes the use of a manufactured product, where that product has been used, constructed or installed in a way that does not comply with the product manufacturer's instructions.
- [32]There are 411 alleged defects or incomplete work. At the hearing, these items were grouped into 43 categories based on the categories set out in the Direction to Rectify dated 26 September 2016. At the hearing by agreement from Mr Middleton, a Scott’s schedule was used to deal with the items by category based on the categories identified in the Direction to Rectify. This updated schedule is attached to these reasons and describes the submissions of the parties for each category of matter. The specific findings of this tribunal in relation to each category (which can be referenced back to the items in the Direction to Rectify) are also contained in this schedule. The Direction to Rectify must be read in conjunction with the Scott’s schedule and these reasons.
- [33]The Commission submits:
Water Penetration
- (a)the work the subject of the Direction to Rectify in categories 3, 5, 8, 15, 16, 22, 26 and 42, or elements of the work the subject of those Direction Items, is category 1 defective building work because it allows water penetration into the dwelling at the Property;
Health and Safety
- (b)the work the subject of the Direction to Rectify in categories 1, 20, 21, and 39, or elements of the work the subject of those Direction Items, is category 1 defective building work because it adversely affects the health and safety of the persons residing in or occupying the dwelling;
Structural Performance
- (c)the work the subject of the Direction to Rectify in categories 2, 4, 6, 7, 9, 11, 12, 13, 17 and 19, or elements of the work the subject of those Direction Items, is category 1 defective work because it adversely affects the structural performance of the dwelling;
Functional Use
- (d)the work the subject of the Direction to Rectify in categories 23, 30, 32 and 34, or elements of the work the subject of those Direction Items, is category 1 defective work because it adversely affects the functional use of the dwelling; and
Category 2 Defects
- (e)the work the subject of the Direction to Rectify in categories 10, 14, 18, 24, 25, 27 to 29, 31, 33, 35 to 38, 40, 41 and 43 of the Direction to Rectify are category 2 defective building work.
- [34]Mr Middleton submits with reference to particular categories:
Water Penetration
- (a)the work the subject of the Direction to Rectify in categories 3 and 5 was performed outside the contract and as a temporary measure, at the request of the homeowner, to accommodate bedroom furniture and clothing and was to be reconstructed;
- (b)the work the subject of the Direction to Rectify in category 8 was drainage installed behind the retaining wall with 100mm agiline, waterproof sheet membrane and 20mm drainage aggregate. There is no evidence that these rectification works do not meet Australian Building Standards. There is no evidence that the structural integrity of the building had been compromised before or after the rectification work. Any engineering was an opinion based on ‘visual inspection’ and mould laboratory testing, which was taken before rectification work was completed when the dwelling had been locked up for two weeks with no ventilation;
- (c)the work the subject of the Direction to Rectify in category 15 was an existing window relocated. The sun hoods provided protection from any possible water penetration. Any other statement is opinion and there is no evidence of water penetration or possible water penetration;
- (d)the work the subject of the Direction to Rectify in category 16 are windows installed as per the existing construction method. The relocated windows were installed in a workmanlike manner and the sun hoods provide protection from any possible water penetration. The sun hoods have been flashed;
- (e)the work the subject of the Direction to Rectify in category 42 was to the ensuite floor. It falls to the shower floor waste so water flows to the waste without water being retained on the finished floor surface. The water from the shower is directed to the waste by the falls in the shower area. The water does not flow outside the shower area and the flow from the ensuite is not stopped by the door as it is swung approx. 30mm above tile floor height;
Health and Safety
- (f)the work the subject of the Direction to Rectify in category 1 is a fence installed at the request of the owner as a temporary measure to secure the front of the dwelling, and to be redesigned during landscaping works. Health and safety obligations were fulfilled by the builder. The eastern side fence was in a state of disrepair and posed a greater health and safety issue;
- (g)the work the subject of the Direction to Rectify in category 20 refers to a visual inspection and does not detail the ‘gap’. Installation was by a qualified tradesman and is well within industry expectations;
- (h)the work the subject of the Direction to Rectify in category 21 was constructed as per manufacturer’s guidelines which clearly note that this was within the guidelines. Licensed tradesmen installed the deck and the finish is within normal industry expectations;
- (i)the work the subject of the Direction to Rectify in category 39 was installation was to Australian Standards. The letter from ‘You’re Secure’ detailed the difficulties on the site;
Structural Performance
- (j)the work the subject of the Direction to Rectify in category 2 was a temporary measure before landscaping and front entrance/porch was constructed. Photos show the temporary work was to a workman standard. The sleeper wall followed the ground level and would not have had any impact on the drainage of the dwelling;
- (k)the work the subject of the Direction to Rectify in category 4 (as well as items 26, 27, 28, 29, 30, 31, 32) were not part of the contract and were temporary solutions brought about by the homeowner’s lack of funds and storage issues. The weather boards in categories 26 to 31 were cedar, not pine as detailed in the building inspector’s report. Variations in measurements were due to existing floor levels. Items 70 to 77 were part of the external preparation and painting process prior to the ‘cease and desist’ order being issued, preventing the work from being completed. All cuts were sprayed with Enseal Clear, provided by Dindas Australia, for priming laps and joints;
- (l)the work the subject of the Direction to Rectify in category 9 used Enseal provided by Dindas as outlined in their industry recommendations;
- (m)the work the subject of the Direction to Rectify in category 11, if subject to a the final inspection by the engineer would indicate that the bolts and washers used met the Australian Standard;
- (n)The slab thickness the work the subject of the Direction to Rectify in category 12 is within the Australian Standard and as per Design Elements Consultants Design;
- (o)the work the subject of the Direction to Rectify in category 17 is not part of the contract and within the acceptable tolerance for a timber retaining wall of less than 1 metre;
- (p)The posts the work the subject of the Direction to Rectify in category 19 are within acceptable guidelines and QBCC has relied on a visual inspection to determine the decision;
Functional Use
- (q)the work the subject of the Direction to Rectify in category 23 was rectified during rectification works;
- (r)the work the subject of the Direction to Rectify in category 30 was part of the original floor level in the dwelling;
- (s)the work the subject of the Direction to Rectify in category 32 is not a defect;
- (t)the work the subject of the Direction to Rectify in category 34 matched the existing floor and is not a defect; and
Category 2 Defects
- (u)Items 10, 14, 18, 24, 25, 27, 28, 29, 31, 33, 35, 36, 37 are not category 2 defects as access was not permitted to the dwelling to complete the work. These are items that would, under normal conditions, be dealt with in final inspections or the practical completion process, both processes which Mr Middleton says were denied to him and his sub-contractors as such they form part of the works still being carried out at the time the ‘cease and desist’ order was issued by the owner.
Should the Direction to Rectify Stand?
- [35]The Commission submits that the Direction to Rectify should issue to Mr Middleton regardless of whether the relevant building work properly fell outside of the Contract works because:
- (a)It is Mr Middleton's responsibility to ensure all building work carried out at the Property complies with the Building Code of Australia and relevant Australian Standards;[13]
- (b)Consumer protection is a primary purpose of the QBCC Act, and the intent of the parliament is to clearly lay responsibility for defective building works at the feet of the responsible builder;[14]
- (c)Mr Middleton is responsible for the building work performed, whether it properly fell within the scope of the contract works or not. This is confirmed by Mr Middleton in the evidentiary material filed;
- (d)As Mr Middleton is responsible for the building work performed the Commission may issue a direction to rectify to him; and
- (e)On or about 3 July 2015, Mr Middleton advised the homeowners that he was content not to receive payment for instances of building work that fell outside of the contract works.[15]
- (a)
- [36]Even with the approval to the statutory maximum amount, there will be a large shortfall remaining to be met by the homeowners. In the circumstances, the Commission submits that the items of the Direction to Rectify collectively are of such significance that the homeowners would be put to a disadvantage if the Direction to Rectify is not issued to Mr Middleton.
- [37]In considering whether to issue the Direction to Rectify, the tribunal must consider the competing interests of the parties involved.[16] The balancing of the interests of building contractors and homeowners is provided for in section 3 of the QBCC Act.
- [38]The comparative disadvantage to the homeowners outweighs any competing disadvantage or unfairness to Mr Middleton and in all of the circumstances it is reasonable to exercise the discretion to direct Mr Middleton to rectify the defective building work.
- [39]Mr Middleton submits the decision to pay out on the Home Warranty Scheme before this hearing is concluded and a direction ordered is unfair and has put him in an untenable financial position potentially taking away his ability to earn an income as a builder.
Discussion
- [40]Don Mackay Pty Ltd v Queensland Building Services Authority is authority for the proposition that a direction to rectify is not given solely for the benefit of the homeowner, but also to ensure proper standards in the industry.[17]
- [41]However a direction is not given in circumstances where to do so would be unfair in all the circumstances. These circumstances are not limited to the terms of the contract,[18] and involve a weighting up of factors both for and against. The competing interests of the parties, the cause of the defective building work and the blameworthiness of the homeowners are also relevant considerations.[19]
- [42]At the hearing of this matter Mr Middleton accepted that he is responsible for all the building work the subject of the rectification notice. I have no evidence before me to show otherwise.
- [43]Mr Middleton says in all of the circumstances it is not fair for this tribunal to exercise the discretion to issue the direction to him to rectify or complete because the work:
- (a)is not defective because it is within accepted tolerances;
- (b)was not completed because of the issuing of a ‘cease and desist’ notice followed by a termination by the homeowners;
- (c)is outside the contract;
- (d)was a temporary measure at the request of the owner; or
- (e)or because it has already been rectified.
- (a)
- [44]I have dealt with the issuing of a ‘cease and desist’ notice followed by a termination by the homeowners and am satisfied the issuing of ‘cease and desist’ notice to Mr Middleton did not result in unfairness of the nature contemplated by section 72(5) of the QBCC Act.
- [45]Mr Middleton argues non-defective work is within accepted tolerances or has already rectified. Mr Middleton provided no independent evidence of any rectification work and the evidence of the building inspector is that where rectification has been attempted by Mr Middleton, the items remain in the Notice to Rectify because the work was not of sufficient standard.
- [46]In the absence of any other evidence except Mr Middleton’s own evidence, in general, I accept the evidence of the Building Inspector as reflected in the attached Scott’s Schedule. I accept the Building Inspector over Mr Middleton because his evidence was detailed, independent and with specificity, referring to the relevant Building Code requirements or Australian Standards. In many of his explanations, Mr Middleton’s evidence lacked these criteria or placed blame on the actions of the homeowners. After examining the evidence on each category, if I do depart from this general preference, this departure is noted in the schedule.
- [47]I accept that whether the work was performed under the contact or outside it and whether temporary or not, the ultimate responsibility of the builder is to perform his work complying with the Building Code of Australia and relevant Australian Standards. Mr Middleton has accepted he is responsible for the building work performed. I am satisfied he is also responsible to undertake his work in compliance with the Building Code of Australia and relevant Australian Standards.
- [48]Where this has not occurred, I accept this is, or remains, a defect.
Conclusion after detailed examination
- [49]Having examined each of the categories and the evidence both written and oral pertaining to each individual items listed under each category as described in the attached schedule, I accept for all of the categories it is fair to confirm the decision of the Queensland Building and Construction Commission made on 23 September 2016 to issue direction to rectify and/or complete number 42341 to Mr Middleton.
Footnotes
[1]Annexure CM-7 to the Statement of the Building Inspector, filed 16 October 2017.
[2]QCAT Act, s 24(1).
[3]Ibid s 20.
[4]Glen Williams Pty Ltd v QBSA [2012] QCAT 127, [5].
[5]Laidlaw v Queensland Building Services Authority [2010] QCAT 70, [23].
[6]Annexure to Exhibit 4 Statement of Reasons, 199.
[7]Exhibit 4 Statement of Reasons, [29]-[35].
[8]Annexure SOR 7 to Exhibit 4 Statement of Reasons, 45.
[9]Ibid.
[10]Transcript Day 1 at 1-50 onwards: ‘So in that respect, I put it to you that the cease and desist notice did not stop you from performing works because you, in fact, did return and your subcontractor did return at a point all the way through till August 2016?‑‑‑Correct.’
[11]Ibid [9]; Harold v QBSA [1995] QBT 55.
[12]Published in the Queensland Government Gazette on 27 August 2004 and which took effect from
1 September 2004.
[13]Fontain v Queensland Building Services Authority [2004] QCCTB 163.
[14]Glen Williams Pty Ltd v Queensland Building Services Authority [2012] QCAT 127.
[15]Mr Middleton's statement of evidence, filed 17 September 2017, document 19.
[16]Dixon Projects Pty Ltd v Queensland Building Services Authority [2009] QCCTB 2, [26].
[17][2009] QCCTB 259, followed in JM Kelly (Project Builders) Pty Ltd v Queensland Building Services Authority [2010] QCAT 568, [22].
[18]Doolan v Queensland Building Services Authority [2017] QCAT 5.
[19]Duke Building Pty Ltd v Queensland Building and Construction Commission & Ors [2015] QCAT 397.