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Holtham v Queensland Building and Construction Commission[2018] QCAT 316

Holtham v Queensland Building and Construction Commission[2018] QCAT 316

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Holtham v Queensland Building and Construction Commission [2018] QCAT 316

PARTIES:

KEITH ANTHONY HOLTHAM

(applicant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

APPLICATION NO/S:

GAR254-17

MATTER TYPE:

General administrative review matters

DELIVERED ON:

10 September 2018

HEARING DATE:

21 May 2018

HEARD AT:

Brisbane

DECISION OF:

Member Burke

ORDERS:

  1. The decision of the Queensland Building and Construction Commission dated 4 August 2017 be set aside and returned to the Respondent with the following directions:
  1. (a)
    in relation to the building work carried out by the builder, Acecol Pty Ltd, at 1241 Eumundi-Kenilworth Road, Belli Park, the Queensland Building and Construction Commission is to instruct an independent structural engineer to:
  1. (i)
    confirm that the joist member size is adequate for a 3.9m span;
  2. (ii)
    measure the deflection of the joists;
  3. (iii)
    determine whether the ‘as-constructed’ members of the floor and floor framing are adequate for all applicable loads;
  1. (b)
    the Queensland Building and Construction Commission is to issue a direction to rectify to the builder, Acecol Pty Ltd, pursuant to s 72 of the QBCC Act:
  1. (i)
    in relation to the defective items of work identified in the building inspection report dated 3 August 2017;
  2. (ii)
    in relation to the installation of the ‘as constructed’ members of the floor and floor framing, if necessary as a result of the report from an independent structural engineer in accordance with order 1(a) hereof.

CATCHWORDS:

PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – Building Dispute and General Administrative Review – Direction to Rectify not issued – whether error – Domestic Building Contracts Act 2000 (Qld) –  cost-plus contract – whether items of work defective – whether fair to give direction to rectify

Domestic Building Contracts Act 2000 (Qld), s 55

Queensland Building and Construction Commission Act 1991 (Qld), s 72

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 24

Cowen & Anor v Queensland Building and Construction Commission [2017] QCAT 416

Dixon Projects Pty Ltd v Queensland Building Services Authority [2009] QCCTB 2

Don Mackay Pty Ltd v Queensland Building Services Authority [2009] QCCTB 259

Duke Building Pty Ltd v Queensland Building and Construction Commission & Ors [2015] QCAT 397

Dunmoor Pty Ltd v Queensland Building and Construction Commission & Anor [2016] QCATA 39 Ireland v Queensland Building Services Authority [1999] QBT 180

JM Kelly (Project Builders) Pty Ltd v Queensland Building Services Authority [2010] QCAT 568

APPEARANCES & REPRESENTATION:

 

Applicant:

J Raphael and A Brown, solicitors of Axia Litigation Lawyers Pty Ltd

Respondent:

C Hill, legal counsel of Queensland Building and Construction Commission

REASONS FOR DECISION

  1. [1]
    The Applicant, Mr Holtham, is the owner of premises at 1241 Eumundi-Kenilworth Road, Belli Park in the state of Queensland (‘the premises’).
  2. [2]
    On or about 28 April 2015, Mr Holtham entered into a building contract (‘the contract’) with a building contractor, Acecol Pty Ltd (‘the builder’) for the renovation and extension of the premises.
  3. [3]
    The contract entered into between the parties was a cost-plus contract, with no fixed price and an estimate of the total cost of the works being $287.000.00.
  4. [4]
    The contract comprised the following documents:
    1. (a)
      a Master Builders Cost Plus Contract Schedule;
    2. (b)
      a Master Builders Cost plus Contract Appendix;
    3. (c)
      a document headed ‘Job Costing’;
    4. (d)
      Architectural drawings prepared by Mary Valley Design and Drafting;
    5. (e)
      Foundations data prepared by Barry Hoskin and AGS.
  5. [5]
    The contract provided for the Date for Commencement as 1 May 2015 and a Date for Practical Completion 150 days from that date, namely 28 September 2015.
  6. [6]
    The contract was terminated by Mr Holtham on or about 9 March 2017 (by an undated letter) on the following bases:
    1. (a)
      the builder failed to remedy defects in breach of clause 20.2 of the contract;
    2. (b)
      the builder failed to complete the works within 1.5 times the construction period in breach of s 90 of the Domestic Building Contracts Act 2000.
  7. [7]
    At the time of termination of the contract, Mr Holtham asserts that he had paid the builder $337,816.60, which is $50,816.60 in excess of the Estimated Total Cost of the Works. It is alleged the works were not complete and were estimated to have reached the fit-out stage.
  8. [8]
    On 3 October 2016, the builder issued to Mr Holtham an invoice for monies owing under the contract in the sum of $51,993.42 (‘the disputed invoice’). Mr Holtham disputes any amount owing. The disputed invoice has not been paid and no further proceedings have been commenced in relation to the alleged amount owing.
  9. [9]
    On 24 April 2017, Mr Holtham issued a non-completion of building work form to the Queensland Building and Construction Commission (‘the QBCC’) regarding the building works at the premises.[1]
  10. [10]
    On 31 May 2017, Mr Holtham lodged a defective building work complaint (‘the complaint’) with the Respondent, the QBCC.[2]
  11. [11]
    On 26 June 2017, Mr Chris Coombes, on behalf of the QBCC, carried out a site inspection of the alleged defective work at the premises and issued an initial inspection report on 3 August 2017 concluding that the builder had performed the following defective work:[3]
    1. (a)
      from a visual inspection of the tiles on floors in bedroom and living room, hairline cracks were evident within the floor tiles and grout due to the failure to install intermediate movement joints within the floor tiles or the fibre cement underlay in accordance with the manufacturer’s specifications and the AS3958.1 – 2007 or at all;
    2. (b)
      failed to apply underlay adhesive in accordance with the manufacturer’s specifications;
    3. (c)
      failed to comply with the manufacturer’s specifications in relation to nail spacings for fixing the fibre cement underlay in the limited areas which were exposed for visual inspection;
    4. (d)
      used a villa board fibre cement product designed for a wall lining as a tile underlay in the living rooms areas;
    5. (e)
      failed to install noggings to the top of the joists;
    6. (f)
      failed to install sufficient blocking between the joists at outer supports to transfer racking forces to the floor bearers;
    7. (g)
      failed to install packing material to the tops of some steel columns in accordance with clause 4.2.1.1 of AS1684.2;
    8. (h)
      failed to install adequate timber post to steel column connection at one location;
    9. (i)
      defective installation of the termite barrier; and
    10. (j)
      installed insufficient downpipes to the roof gutters.[4]
  12. [12]
    Between 27 June 2017 and 3 August 2017, Mr Coombes considered technical information and manuals in relation to the complaints regarding the flooring and engaged Cornell Engineers to assess the existing floor framing at the premises.[5]
  13. [13]
    By letter dated 4 August 2017, the QBCC informed Mr Holtham that it had considered the complaint and decided that at this point in time it would not be fair or reasonable to issue a direction to rectify to the builder and as such the QBCC was unable to offer further assistance in the resolution of the matter.[6]
  14. [14]
    The factors on which the QBCC relied to determine that it was not reasonable to issue a direction to rectify to the builder are contained in the Statement of Reasons dated 10 October 2017 relied upon by the QBCC as follows:[7]
    1. (a)
      There was a contractual dispute on foot between the Applicant and the builder. It was not possible for Mr Coombes to determine the sum (if any) owing on the contract, however, on the information available to Mr Coombes, it appeared that an amount of between $50,000 and $140,000 was in dispute.
    2. (b)
      The Applicant had supplied some building materials, including tiles, the quality of which may have partially contributed to the hairline cracking which was the subject of two of the items of complaint.
    3. (c)
      The Applicant’s conduct towards the builder, including the alleged making of a threat to kill during the inspection conducted on 26 June 2017.

Relief Sought

  1. [15]
    On 29 August 2017, Mr Holtham filed an application pursuant to ss 86(1)(e) and 87 of the Queensland Building and Construction Commission Act 1991 (‘QBCC Act’) to review the decision of the QBCC dated 4 August 2017.
  2. [16]
    Mr Holtham seeks an order that the decision of the QBCC dated 4 August 2017 be set aside and that the builder be directed to rectify the items of defective work identified in the QBCC Statement of Reasons.[8] Alternatively, Mr Holtham seeks an order that the decision of the QBCC dated 4 August 2017 be set aside and returned to the QBCC for reconsideration with the following directions:[9]
    1. (a)
      The QBCC should give consideration to instructing an independent structural engineer to:
      1. confirm that the joist member size is adequate for a 3.9m span; and
      2. measure the deflection of the joists.
    2. (b)
      The QBCC should exercise the discretion in s 72 of the QBCC Act to issue a direction to rectify to the builder in relation to the defective work.

Statutory Framework

  1. [17]
    Section 24(1) of the Queensland Civil and Administrative Tribunal Act 2009 (‘QCAT Act’) sets out the functions of the tribunal in its review jurisdiction and the orders which may be made by the tribunal.
  2. [18]
    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.[10]
  3. [19]
    The purpose of the review is to produce the correct and preferable decision based on the hearing of the matter as a fresh hearing on the merits.[11]
  4. [20]
    Section 3 of the QBCC Act outlines the objectives of the Act which includes an objective to provide remedies for defective building work.[12] Further, an objective of the QBCC Act is to regulate the building industry to ensure the maintenance of proper standards in the industry and to achieve a reasonable balance between the interests of both building contractors and consumers.[13]
  5. [21]
    The power to require rectification of defective building work and remediation of consequential damage is contained in s 72 (1) of the QBCC Act:
  1. (1)
    This section applies if the commission is of the opinion that –
  1. (a)
    building work is defective or incomplete; or
  2. (b)
    consequential damage has been caused by, or as a consequence of, carrying out building work.
  1. (2)
    The commission may direct the person who carried out the building work to do the following within the period stated in the direction –
  1. (a)
    for building work that is defective or incomplete – rectify the building work;
  2. (b)
    for consequential damage – remedy the damage.
  1. [22]
    The tribunal may take into account all the circumstances it considers that are reasonably relevant to the decision whether a direction should issue and, in particular, is not limited to a consideration of the terms of the contract for carrying out the building work.[14]
  2. [23]
    A direction to rectify may not be given if to do so would, in the circumstances, be unfair.[15]
  3. [24]
    It is widely accepted that the QBCC Act requires the tribunal to determine the following issues:[16]
    1. (a)
      is the building work defective or incomplete;
    2. (b)
      is the builder responsible for the building work; and
    3. (c)
      is it fair, in all the circumstances, for the tribunal (standing in the shoes of the QBCC decision-maker) to exercise the discretion to issue a direction to rectify to the builder?
  4. [25]
    Thus it is necessary for the tribunal to weigh up factors both for and against the issue of a direction and to consider the competing interests of the parties, the cause of the defective work and the blameworthiness of the home-owners.[17]
  5. [26]
    The tribunal must consider the competing interests of the parties involved and an over-reaching consideration is to ensure not only the benefit to the owner but to ensure proper standards in the industry.[18]

Issues to be Determined

  1. [27]
    The decision of the QBCC not to issue a direction to rectify relied upon 3 factors:
    1. (a)
      the alleged outstanding monies which is said to be between $50,00.00 as claimed in a disputed invoice dated 3 October 2016 (‘the disputed invoice’) and an amount of $140,000.00 referred to by the builder at the site inspection undertaken by Mr Coombes on 26 June 2017;
    2. (b)
      in circumstances where Mr Holtham supplied the ply substrate and the terracotta tiles (which were laid by the builder), despite there being no evidence that the tiles supplied by Mr Holtham are defective or otherwise not in accordance with Australian Standards, there is a concern that the quality of the tiles may have contributed to the hairline cracking of the tiles which is the subject of 2 items of complaint;
    3. (c)
      the conduct of Mr Holtham at the site inspection was unacceptable in that Mr Holtham lost his temper, made derogatory marks to the builder and behaved inappropriately to the extent that it would be unfair to expect the builder to return to the site to carry our any rectification works.
  2. [28]
    The document entitled Agreed Facts provided by the parties outlines the following issues to be determined:
  1. Is the floor framing and member sizing generally adequate and fit for the purpose?
  2. For the purpose of section 72(3) of the Queensland Building and Construction Commission Act 1991, are the following factors, or any of them, ‘reasonably relevant’ circumstances to be taken into account in deciding whether to give the builder a direction?
  1. (i)
    the type of contract and the degree to which the agreed work and price under the contract is fixed and certain.
  1. (ii)
    the existence, or otherwise, of a dispute regarding whether the contract was lawful.
  1. (iii)
    the existence, or otherwise, of an allegation by the builder regarding the said to be owing under the contract.
  1. (iv)
    the supply of building materials to the builder by the Applicant;
  1. (v)
    the conduct of the Applicant at the QBCC inspection.
  1. Are there any other ‘reasonably relevant’ circumstances to be taken into account in deciding whether to give the builder a direction?
  2. If the existence, or otherwise, of a dispute regarding whether the contract was lawful is a ‘reasonably relevant circumstance', was the contract prima facie entered into in contravention of s 55 of the QBCC Act?
  3. In the circumstances, did the QBCC err in exercising its direction not to issue a direction to rectify pursuant to section 72(5) where:
    1. (i)
      if the answer to question 4 above is yes, the contract was prima facie unlawful;
    2. (ii)
      apart from the disputed invoice there was no evidence that there were any owing by the Applicant to the builder;
    3. (iii)
      there was no evidence that any material supplied by the Applicant was defective or otherwise not in accordance with Australian Standards; and
    4. (iv)
      defective building work had been performed
  4. In the circumstances, is it fair to give the builder a direction and if so, what should be the content of the direction?
  1. [29]
    There seems little dispute between the parties that there is defective work as outlined in the site inspection report dated 3 August 2017.
  2. [30]
    The principles to be applied by this tribunal have been outlined in Dixon Projects Pty Ltd v Queensland Building Services Authority [2009] QCCTB 2 as follows:
    1. (a)
      in exercising its discretion under s 72 of the QBCC Act, the tribunal stands in the shoes of the Respondent;
    2. (b)
      the tribunal must balance the competing interests of the home-owner and the contractor and take into account the cause of the defective building work;
    3. (c)
      in exercising its discretion, the tribunal must give consideration to the QBCC Defects Policy;
    4. (d)
      the tribunal must take into account all the evidence including circumstances raised at the tribunal hearing.
  3. [31]
    In doing so, the tribunal is required to take into account the whole factual matrix in its entirety.[19]

Relevant Considerations

  1. [32]
    Each case must be determined on its own facts. It is not possible to list each and every relevant circumstance for every case. It will depend on the particular facts of each case as to whether there are relevant circumstances to be considered which support a decision whether a direction to rectify should issue.
  2. [33]
    There are however a number of factors which must be considered in every case:
    1. (a)
      is the work defective?
    2. (b)
      did the home-owner cause or contribute to the defective work?
    3. (c)
      are there circumstances which exist which would result in unfair circumstances if a direction to rectify were given?
  3. [34]
    In the present scenario, there is agreement that the works are defective except for some uncertainty regarding the structural adequacy of the flooring. This issue will be considered by the tribunal in this review process.
  4. [35]
    Further, in the present case, the second issue relating to the home-owner’s contribution to the defective work is relevant in relation to the alleged defects regarding the laying of the tiles. There is uncertainty regarding the home-owner’s supply of a tile which it is alleged may have possibly contributed to the hairline cracks evident in the floor tiles. This issue will be addressed by the tribunal in this review process.
  5. [36]
    Other circumstances which have been submitted to be relevant include the following:
    1. (a)
      the existence of a disputed invoice and an allegation that substantial amounts are still owing under the contract;
    2. (b)
      a response to the allegation that monies are owing under the contract that the contract is unlawful in that it was a cost-plus contract which was entered into between the parties in contravention of s 55 of the Domestic Building Contracts Act 2000 (“DBC Act”);
    3. (c)
      the conduct of the home-owner at the site inspection of the defective work and threats made by the home-owner to the builder.
  6. [37]
    Mr Brown, on behalf of Mr Holtham, submits that the following factors are relevant:
    1. (a)
      the type of contract and the degree to which the agreed work and price under the contract is fixed and certain;
    2. (b)
      the existence or otherwise, of a dispute regarding whether the contract was lawful;
    3. (c)
      the existence, or otherwise, of an allegation by the builder regarding monies said to be owing under the contract;
    4. (d)
      the supply of building materials to the builder by Mr Holtham;
    5. (e)
      the conduct of Mr Holtham at the site inspection with the QBCC representative.
  7. [38]
    I will consider each of the factors in the context of the factual matrix relevant to the contract between Mr Holtham and the builder.

Defective Work

  1. [39]
    There is little dispute that the work undertaken by the builder was defective. The QBCC report dated 3 August 2017 confirms this as fact.
  2. [40]
    The main issue in dispute is the structural adequacy of the as-constructed flooring.
  3. [41]
    Evidence was provided by Mr Dixon, a professional building consultant, on behalf of Mr Holtham. A dilapidation report was prepared by Mr Dixon on 30 November 2016.
  4. [42]
    Mr Dixon outlined the existence of defective work and recommended the following:
    1. (a)
      the engagement of an independent structural engineer to determine whether the ‘as-constructed’ member of the floor and roof framing are adequate for applicable loads;
    2. (b)
      the method of installation, fasteners and other connectors meet the minimum standards applicable to structural engineering for the structure;
    3. (c)
      attention be given to surface water currently entering sub-floor space;
    4. (d)
      installation of omission of support post to carport slab;
    5. (e)
      structural defects in roof framing;
    6. (f)
      structural defects in new roof and flashing to existing chimney;
    7. (g)
      design defects in installation of roof;
    8. (h)
      reinstatement of pool fencing;
    9. (i)
      omission of downpipes;
    10. (j)
      unsafe condition of verandah balustrades;
    11. (k)
      incomplete work including plumbing fit-out, floor coverings and joinery fit-out; interior painting and termite management
  5. [43]
    Mr Cornell, a structural engineer and director of Cornell Engineers, was engaged by the QBCC to provide an assessment of the structural adequacy of the as-constructed floor framing at the premises. A report dated 2 August 2017 was prepared by Mr Cornell.
  6. [44]
    Mr Cornell concluded that the as-constructed floor joists were adequate for the installation and otherwise identified the following defects:
    1. (a)
      no noggings were observed under the edges of plywood sheets as required according to AS1684.2;
    2. (b)
      a minor deviation from the manufacturer’s installation manual regarding blocking between joists at outer supports to transfer racking forces to the floor bearers and sub-floor;
    3. (c)
      tops of steel columns have been packed with chipboard instead of plastic or steel shims and thus chipboard flooring is not acceptable or compliant with AS1684.2;
    4. (d)
      insufficient moisture and termite barrier clearance with the footings;
    5. (e)
      deck joist installation defective;
    6. (f)
      lack of tie-down from timber to post to steel columns;
    7. (g)
      deck bearer installation defective;
    8. (h)
      poor sub-floor drainage.
  7. [45]
    The defects outlined by Mr Cornell were considered in the QBCC report dated 3 August 2017.
  8. [46]
    In oral evidence, Mr Cornell admitted that he had not been engaged to assess the bounce of the flooring as he was unaware that an alleged defect in that regard was an issue.
  9. [47]
    I am satisfied that there is an outstanding issue regarding the bounce and deflection of the flooring which should be determined before a direction to rectify is issued in relation to that alleged defect.
  10. [48]
    If there is an issue with the deflection of the flooring, a direction to rectify should issue.
  11. [49]
    In relation to all other defective work addressed by the QBCC in the report dated 3 August 2017, I accept that the work is defective and that, in the event that a direction to rectify is warranted, the defective works outlined in the QBCC report be addressed in such direction.

Disputed Invoice

  1. [50]
    There is no dispute that an invoice for $51,993.42 dated 3 October 2016 has been issued by the builder to Mr Holtham. The disputed invoice merely states as follows:

Item 1 Claim as per attached break-up costs only, no overheads, profit or builders hourly rates charged to date.

  1. [51]
    No details of the work relevant to the disputed invoice have been provided.
  2. [52]
    Mr Holtham disputes that any monies are owing. Mr Holtham gave evidence that not only are there no monies owing but that he has paid in excess of $50,861.60 over and above the amount estimated for the works and that the works have not reached fit-out stage.
  3. [53]
    As the builder was not called as a witness in the review proceedings, there is no evidence to contradict Mr Holtham’s version of events in relation to the invoices paid and the details regarding the extent of works carried out.
  4. [54]
    Mr Coombes, on behalf of the QBCC, gave evidence that he was advised by the builder at the site inspection on 26 June 2017 that the amount outstanding by Mr Holtham was in fact $140,000.00. There is no evidence, documentary or otherwise, to support this assertion. To the contrary, Mr Holtham asserts no monies are owing.
  5. [55]
    It is noted, and is somewhat curious, that no proceedings have been commenced to recover the alleged monies owing. Given that the disputed invoice was issued on 3 October 2016, it is unusual that steps have not been taken to claim the monies alleged to be owing to the builder under the contract. The amount claimed in the disputed invoice, and additional amounts alleged by the builder to be outstanding, is not insubstantial.
  6. [56]
    As a corollary to the disputed invoice, Mr Holtham claims that no monies are owing in any event because the contract entered into was a cost-plus contract in circumstances where it was not impossible to assess a fixed price for the works at the time of entering into the contract. Mr Holtham gave evidence that all items could be assessed at the time of entering into the contract and that accordingly there was no necessity for a cost-plus contract to be entered into between the parties.
  7. [57]
    In written submissions provided to the tribunal, Ms Raphael and Mr Brown, solicitors on behalf of Mr Holtham, submit that a relevant factor to take into account is the position taken by Mr Holtham that the contract was unlawful in reliance of the criteria set out in s 55 of the DBC Act. It is submitted that this was a factor considered by the tribunal in Dunmoor Pty Ltd AFT Tiny Turtle Trust Fund v Queensland Building and Construction Commission & Mainz [2015] QCAT 449 as a reasonably relevant factor to consider when assessing whether it would be unfair to issue a direction to rectify.
  8. [58]
    The decision in Dunmoor was considered by the appeal tribunal[20] and remitted to the tribunal for reconsideration. The circumstances in Dunmoor were quite different from the present case given that the tribunal was to determine both the building dispute between the parties for monies owing and review proceedings regarding the non-issue of a direction to rectify in the one hearing.
  9. [59]
    In Dunmoor the appeal tribunal concluded:

[58] Because the findings and orders made about this issue in the building dispute were relied upon in the Tribunal’s determination of the review proceeding, the decision on the review must also be set aside. It must be determined again having regard to the outcome of the Tribunal’s reconsideration of the application of section 55…

…

[61] Given our conclusions in relation to Ground D above, the order for payment is set aside by our orders. However, under s 72 of the QBCC Act, all of the circumstances which are reasonably relevant may be taken into account in determining whether to give a direction to rectify, including whether it would be unfair to the builder. Whether or not there are outstanding monies, however the non-payment of those monies arise, may be relevant to the determination of fairness in the circumstances. We make the observation that if the works are defective, and all monies properly payable for the works are to be paid in accordance with the Tribunal’s orders, that it cannot properly be concluded that the fact of outstanding monies at the time of the orders renders it unfair for a direction to rectify to issue. (citations omitted)

  1. [60]
    The extent of outstanding monies owing is a reasonably relevant factor to consider when assessing whether it would be fair to the builder for a direction to rectify to be issued. A proper defence to a claim for monies owing may be, as alleged in the present case, the unenforceability of the contract. In that context, the unlawfulness of the contract may be a relevant factor to be considered.
  2. [61]
    However, in the case of a dispute regarding outstanding monies and the defence a home-owner may argue in relation to non-payment, it is not for this tribunal (or the QBCC) to determine in review proceedings the merits of the contractual dispute between the parties. Whether the contract is unlawful is a matter for determination in proceedings between the builder and the home-owner. Whilst it may be a relevant consideration as to whether any substantial monies are owing under the contract and thus a relevant factor as to whether it would be fair in the circumstances to issue a direction to rectify, the legality of the contract is not an issue for the decision-maker or this tribunal to determine as part of the process of determining whether to issue a direction to rectify.
  3. [62]
    Thus, a review procedure of the issue or non-issue of a direction to rectify under s 72 of the QBCC Act is not the forum for determining a contractual dispute between the parties. I do not propose to make a determination in relation to the enforceability of the contract in the context of s 55 of the DBC Act in the absence of any evidence from the builder and without any evidence supporting the amount alleged to be outstanding.
  4. [63]
    I am satisfied that an invoice has been issued. I am also satisfied that the content of that invoice is disputed by Mr Holtham.
  5. [64]
    I accept the submission of Mr Brown, solicitor on behalf of Mr Holtham, that the issue of an invoice alone should not be a determining factor that monies are in fact owing under the contract. As submitted by Mr Brown, it would be unfair to the home-owner if a determining factor for the non-issue of a direction to rectify were the existence of an outstanding invoice. An unfortunate situation would become a common occurrence whereby a builder would merely issue an invoice in order to avoid being issued a direction to rectify pursuant to s 72 of the QBCC Act.
  6. [65]
    Thus, I do not think that the issue of an invoice necessarily proves that the monies are in fact owing and thus is not a determining factor supporting a decision that it would be unfair to issue a direction to rectify to the builder.
  7. [66]
    Substantial evidence of monies owing, including for example details of the works to which the invoice relates, would be required to justify a decision that a direction to rectify would be unfair.
  8. [67]
    In the present case, there is no evidence that the monies are in fact owing nor is there evidence of the work which has been carried for which monies are allegedly owing.
  9. [68]
    Whilst there may be cases where it would be obvious that monies are outstanding based on the extent of works carried out at the time of a complaint regarding defective work, I have determined in the present case that such facts are not so obvious as to be relied upon as a relevant consideration in assessing the fairness or otherwise of a direction to rectify.

Home-owner’s Contribution to Defects – Supply of Defective Tiles

  1. [69]
    The blameworthiness of the home-owner for any of the defects is a reasonably relevant circumstance for this tribunal to consider.
  2. [70]
    Mr Holtham gave evidence that he sourced the Mexican Saltillo terracotta tiles for the floor. He confirmed that he had purchased the same type of tile from the same company 25 years ago for the lounge room floor and had not had any problems with the laying of the tiles previously.
  3. [71]
    In Mr Holtham’s statement dated 6 November 2017 and in oral evidence, Mr Holtham outlined the history of the supply of the tiles.[21] There appeared to be no issue with the quality of the tiles raised by anyone, including the builder and the tiling contractor, prior to the laying of the tiles.
  4. [72]
    At one stage, according to Mr Holtham’s evidence, the builder took responsibility for the hairline cracking which became evident after the tiles had been laid. It was agreed that the use of the villa board underlay may have contributed to the defective laying of the tiles.
  5. [73]
    The issue of the quality of the tiles was not raised by the builder until October 2016 when works were suspended.
  6. [74]
    I have formed the view that no evidence has been provided which supports the allegation that the tiles were inferior and that their poor quality contributed to the defects in the floor as laid. Nor is there evidence that the tiles did not comply with Australian Standards.
  7. [75]
    Accordingly, I am of the view that the home-owner, Mr Holtham, is neither responsible for, nor contributed to, the defects in the tiling.

Behaviour of the Home-Owner at Site

  1. [76]
    The conduct of the home-owner is a reasonably relevant circumstance for this tribunal to consider.
  2. [77]
    Mr Coombes determined that it would be unfair to issue a direction to rectify given Mr Holtham’s threatening behaviour at the site inspection.
  3. [78]
    Mr Holtham has admitted that his behaviour on 26 June 2017 was unacceptable.
  4. [79]
    Mr Brown, solicitor on behalf of Mr Holtham, submitted that there was no dispute that Mr Holtham’s conduct was inappropriate. Mr Brown also submitted that this tribunal should take into account the following factors:
    1. (a)
      Mr Holtham has apologised twice and his apology has been accepted by Mr Coombes;
    2. (b)
      the site inspection was not halted because of the inappropriate behaviour and it was possible the alleged threat by Mr Holtham was not taken seriously;
    3. (c)
      at the site inspection, Mr Holtham removed himself from the inspection and later returned to the meeting without objection from Mr Coombes or the builder;
    4. (d)
      Mr Holtham has agreed that he will not be present at the premises when the rectification of the defective work is carried out by the builder.
  5. [80]
    I accept that Mr Holtham’s conduct at the site inspection was unacceptable. The alleged words spoken by Mr Holtham were threatening and intimidating and totally inappropriate in any circumstances.
  6. [81]
    I have however taken into account Mr Holtham’s apology and his evidence that indicates that he is aware that his behaviour was unacceptable. I have also taken into account that he is prepared to remove himself from the premises while the builder or his employees are on site.
  7. [82]
    Whilst I accept that threatening behaviour is a relevant factor, I am satisfied that this factor alone does not necessarily result in a direction to rectify being unfair to the builder. In reaching this conclusion I have taken into account Mr Holtham’s undertaking to forego future contact with the builder on site.
  8. [83]
    I propose that as part of the direction to rectify a condition be included that Mr Holtham not be present at the premises whilst the rectification work is being carried out.

Is it Unfair to the Builder to issue a Direction to Rectify?

  1. [84]
    Given the matters considered above, I have determined that it would not be unfair to issue a direction to rectify to the builder for the following reasons:
    1. (a)
      defective work has been identified and detailed by the QBCC;
    2. (b)
      consideration by an independent engineer will determine whether the flooring is adequate with regards to the adequacy of the joint member size and deflection of the joists and whether a direction to rectify is necessary for that portion of the works;
    3. (c)
      there is insufficient evidence to support the allegation that a substantial amount is owing to the builder;
    4. (d)
      there is insufficient evidence to support the allegation that the tiles supplied by the home-owner contributed to the defects in the laying of the tiles;
    5. (e)
      the home-owner has apologised for his behaviour at the site meeting and has undertaken to remove himself from the premises while the rectification works are being carried out.
  2. [85]
    In the circumstances, I have formed the view that it would not be unfair to issue a direction to rectify the defective work at the premises and make the following orders:
    1. (a)
      the decision of the QBCC dated 4 August 2017 be set aside;
    2. (b)
      the matter be returned to the QBCC for re-consideration with the following directions:
      1. the QBCC engage an independent structural engineer to determine the following prior to issuing any direction to rectify the as-constructed flooring:
  1. confirm that the joist member size is adequate for a 3.9 metre span; and
  2. measure the deflection of the joists.
    1. (ii)
      the QBCC issue a direction to rectify to the builder in relation to:
  1. all other defective work identified in the site inspection report issued by the QBCC on 4 August 2017; and
  1. if necessary, as a result of the engagement of the independent structural engineer, any defects identified in relation to the as-constructed flooring;
    1. (iii)
      as a condition of the direction to rectify to the builder, the QBCC stipulate that the home-owner is not to be present during the carrying out of the rectification of the works the subject of the direction to rectify.

Footnotes

[1] Annexure ‘SOR-3’ to the Statement of Reasons, dated 10 October 2017.

[2] Annexures ‘SOR-7’, ‘SOR-8’ and ‘SOR-9’ to the Statement of Reasons, dated 10 October 2017.

[3] Annexure ‘SOR-17’ to the Statement of Reasons, dated 10 October 2017.

[4] Refer to document entitled Agreed Facts received by the tribunal 2 May 2018, paragraph 8.

[5] Annexures ‘SOR-15’ and ‘SOR016’ to the Statement of Reasons, dated 10 October 2017.

[6] Annexure ‘SOR-1’ to the Statement of Reasons, dated 10 October 2017.

[7] Statement of Reasons dated 10 October 2017, paragraph 54.

[8] As per s 24(1)(b) of the QCAT Act in relation to defective work outlined in Annexure ‘SOR-17’ to the Statement of Reasons dated 10 October 2017 being the inspection report dated 3 August 2017.

[9] In accordance with s 24(1)(c) of the QCAT Act.

[10] Section 24(1) of the QCAT Act.

[11] Section 20 of the QCAT Act.

[12] Section 3(b) of the QBCC Act.

[13] Section 3(a) of the QBCC Act.

[14] Section 72(3) of the QBCC Act; Doolan v QBSA [2017] QCAT 5.

[15] Section 72(5) of the QBCC Act.

[16] Duke Building Ltd v Queensland Building and Construction Commission & Ors [2015] QCAT 397;

[17] Duke Building Pty Ltd v QBCC & Ors [2015] QCAT 397.

[18] Don Mackay Pty Ltd v Queensland Building Services Authority [2009] QCCTB 259; JM Kelly (Project Builders) Pty Ltd v QBSA [2010] QCAT 568, [22]; Dixon Projects Pty Ltd v QBSA [2009] QCCTB 2, [26]; Taouk v QBSA [2013] QCAT 508, [39]; Cowen & Anor v QBCC & Anor [2017] QCAT 416, [25].

[19] Ireland v Queensland Building Services Authority [1999] QBT 180.

[20] [2016] QCATA 39.

[21] Exhibit ‘1’ – Statement of Keith Anthony Holtham dated 6 November 2017, paragraphs 27-47.

Close

Editorial Notes

  • Published Case Name:

    Holtham v Queensland Building and Construction Commission

  • Shortened Case Name:

    Holtham v Queensland Building and Construction Commission

  • MNC:

    [2018] QCAT 316

  • Court:

    QCAT

  • Judge(s):

    Member Burke

  • Date:

    10 Sep 2018

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Cowen v Queensland Building and Construction Commission [2017] QCAT 416
2 citations
Jump To
Cite 1 - [2017] QCAT 416
Cite 2 - [2017] QCAT 416
Dixon Projects Pty Ltd v QBSA [2009] QCCTB 2
3 citations
Jump To
Cite 1 - [2009] QCCTB 2
Cite 2 - [2009] QCCTB 2
Cite 3 - [2009] QCCTB 2
Duke Building Pty Ltd v Queensland Building and Construction Commission [2015] QCAT 397
3 citations
Jump To
Cite 1 - [2015] QCAT 397
Cite 2 - [2015] QCAT 397
Cite 3 - [2015] QCAT 397
Dunmoor Pty Ltd v Queensland Building and Construction Commission [2016] QCATA 39
2 citations
Jump To
Cite 1 - [2016] QCATA 39
Cite 2 - [2016] QCATA 39
Dunmoor Pty Ltd v Queensland Building and Construction Commission [2015] QCAT 449
1 citation
Jump To
Cite 1 - [2015] QCAT 449
Ireland v QBSA [1999] QBT 180
2 citations
Jump To
Cite 1 - [1999] QBT 180
Cite 2 - [1999] QBT 180
JM Kelly (Project Builders) Pty Ltd v Queensland Building Services Authority [2010] QCAT 568
2 citations
Jump To
Cite 1 - [2010] QCAT 568
Cite 2 - [2010] QCAT 568
Mackay Pty Ltd v Queensland Building Services Authority (2009) QCCTB 259
2 citations
Jump To
Cite 1 - (2009) QCCTB 259
Cite 2 - (2009) QCCTB 259
Queensland College of Teachers v TRT [2017] QCAT 5
1 citation
Jump To
Cite 1 - [2017] QCAT 5
Taouk v Queensland Building Services Authority [2013] QCAT 508
1 citation
Jump To
Cite 1 - [2013] QCAT 508

Cases Citing

Case NameFull CitationFrequency
Groove Properties Pty Ltd v Queensland Building and Construction Commission [2022] QCAT 1912 citations
1

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