Burke v Brown[2023] QCAT 322

REASONS FOR DECISION

1. [1]
   The Applicant (Kirsty Burke) wished to build underneath her existing home in Camp Hill, Brisbane. In June 2004 she engaged the Respondent (Simon Brown) a builder to raise her house on steel posts and construct accommodation underneath for her aged mother. Work commenced either late in 2004 or early 2005 and was completed by July 2005. Ms Burke and her family, at the time, were impressed by Mr Brown’s attention to detail, the quality of his workmanship and his professional manner in which he completed the build.^[1]  

Background to the dispute

2. [2]
   In 2019, Ms Burke was desirous of selling the property and an interested purchaser commissioned a building inspection which revealed corrosion issues involving the steel posts. An initial engineer’s report opined that the cause was the failure to protect the steel posts where they entered the edge of the new concrete slab with a corrosive resistant paint/coating. The manufactured posts^[2] had a proprietary name of Duragal and had a hot dip galvanised 100g/m² coating.  In about 2002 the manufacturer of Duragal considered the coating to be inadequate protection against corrosion in certain circumstances and recommended the application of a further primer.^[3] The position of some of the posts left them exposed to the elements. The damage was said to be extensive, and Ms Burke says she has been unable to sell the property. Ms Burke says she was unaware of the damage as it was concealed by a thin layer of concrete.
3. [3]
   There is no copy of the contract in existence. I was informed at the hearing it was a standard “HIA Alteration and Addition” contract. Both parties had discarded the documentation. This is not surprising considering the lapse of time since completion of the works.
4. [4]
   Mr Brown says that Ms Burke’s late mother and then partner Steven Lockhart were also parties to the contract. This appears not to be disputed by Ms Burke. There is sufficient material including quotes to provide some indication of some of the terms. There is not any great dispute between the parties as to the relevant terms. It was a cost-plus contract. An early quote put the assessed cost at about $200,00.00. Although supplied with a number of invoices, I do not have detail of the final cost.
5. [5]
   Landscaping and painting were not included. What constituted painting is in issue and I will refer to this later in these reasons. Indeed, the principal issue in the matter is whether the steel posts were treated appropriately with a corrosive resistant paint/coating and whose responsibility it was to carry out this task. Ms Burke says it was Mr Brown, Mr Brown says it was Ms Burke’s partner Mr Lockhart. 
6. [6]
   The plans were drawn up by Magnic Drafting Service and a Mr John Quak was engaged to provide an engineer’s report.
7. [7]
   The home was completed by July 2005 when a Final Inspection Certificate issued.^[4]

The Joint Expert Report

8. [8]
   Both parties engaged building experts. Mr Peter Wright provided a report to Ms Burke, Mr John House provided a report to Mr Brown. Both are qualified engineers specialising in construction. The Tribunal directed an expert conclave which was held on 25 March 2022 and resulted in a joint report authored by both experts.

8. [9]
   I was the Tribunal Member who convened the Conclave. Through an oversight I was delegated to hear this matter. Paragraph 15 of QCAT Practice Direction No 4 of 2009 directs that the convenor of the conclave cannot be a member of the tribunal that hears the matter unless all parties consent. At the outset of the hearing, I advised both parties of the Practice Direction and that I had conducted the conclave and if they wished me to hear the matter their consent would be required. Both parties consented to me hearing the matter.

8. [10]
   In the Joint Report the experts agreed on the following:

3. (a)
   The bases of Seventeen Steel Post supporting the upper floor of the dwelling were inspected. Approximately ten were not visible. They were concealed by paving.

3. (b)
   The condition of the bases of the 17 posts inspected varied greatly.

3. (c)
   The experts agree that the exposed sections of the steel posts between the tops of the concrete piers and the underside of the wall cladding is described in the Building Code of Australia as a MODERATE environment with respect to corrosion of steelwork.

3. (d)
   The “Duragal” coating on the steel posts installed by the Respondent is considered to be equivalent to “Hot dip galvanize 100g/m2 ”

3. (e)
   The Building Code of Australia, Amendment dated 2002, applicable at the time of construction (2005) required a minimum protective coating be applied over the Duragal of either “solvent based vinyl primer” or “vinyl gloss, or alkyd” to the Duragal exposed to the moderate external environment. Where the Duragal was in contact with concrete, the surface was passivated. See an extract from the Building Code of Australia 1996 Volume Two - Amendment 13 below, adopted in Queensland on 1 July 2003. Relevant sections have been highlighted for convenience. (Extract omitted)

3. (f)
   Corrosion requires moisture and oxygen. There is an abundance of both of these elements where the posts are exposed between the tops of the piers and the underside of the wall cladding.

3. (i)
   The posts beneath the back veranda have all four faces exposed.

3. (ii)
   At the external corners of the building, six locations in total, two faces of the steel posts were exposed.

3. (iii)
   At the internal corners of the building, three locations in total, only one edge of the steel posts were exposed.

3. (iv)
   All other steel posts have one face exposed to moisture between the top of the concrete piers and the underside of the wall cladding.

3. (g)
   The thin cementitious coat over some of the exposed 300mm height of the posts was Parging applied during the application of Termimesh the termite protection applied to the building. Mr House is of the view that the Parging would have slowed the corrosion, but was not enough to prevent the rusting that occurred.

3. (h)
   The design drawings were organized by the Applicant.

8. [11]
   The parging was applied by installing a stainless steel mesh skirt to the post base and then the parge, a cement based product was worked through the mesh bonding to the underlying surface of the steel. According to Mr Brown it was impracticable to apply the paint before installing the posts but it could be applied over the dry parging.
9. [12]
   Ms Burke submitted a number of quotations for the cost of rectification varies between $72,883.50^[5] and $17,490.00.^[6] Mr Brown offered to carry out the work in accordance with Mr House’s findings for $4,642.00 inclusive of GST.

Limitation Period

13. [13]
    Ms Burke in her application does not specify whether she makes the claim in contract, negligence or for breach of warranty under the repealed Domestic Building Contracts Act 2000 (Qld) (DBCA). In her submissions, at the hearing, she clarified her claim as being one in tort.
14. [14]
    The contract was entered into some time in 2004 and the work was completed by July 2005. Ms Burke says she first became aware of the problem when she attempted to sell the property and a building inspection report carried out by a prospective purchaser revealed the rust damage to the posts. That was  on 24 September 2019.^[7] It is noteworthy that the inspection was limited to ‘readily accessible areas and was based on a visual examination of the surface work’.
15. [15]
    Section 51 of the DBCA provides that a proceeding for a breach of warranty in relation to a regulated contract must be started within 6 years and 6 months after the subject work finished.
16. [16]
    Any claim that Ms Burke may have had under the DBCA for breach of warranty has now expired.
17. [17]
    The Limitation of Actions Act 1974 (Qld) provides:

3. 10.
   Actions of contract and tort and certain other actions

3. (1)
   The following actions shall not be brought after the expiration of six years from the date on which the cause of action arose:

3. (a)
   … an action founded on simple contract or quasi-contract or on tort where the damages claimed by the plaintiff do not consist of or include damages in respect of personal injury to any person;

18. [18]
    These proceedings were commenced on 7 January 2020 and, if the cause of action arose prior to 7 January 2014 then it will be statute barred.
19. [19]
    A cause of action for breach of contract accrues when the breach occurred. In this case, that is according to Ms Burke, when Mr Brown failed to apply the corrosive coating to the steel posts. The limitation period expired 2011.
20. [20]
    In the Court of Appeal decision of Melisavon Pty Ltd v Springfield Land Development Corporation Pty Ltd [8] the members of the Court disagreed as to the issue of when the cause of action accrued.
21. [21]
    In Melisavon, negligence was alleged in respect of the design and engineering of a concrete slab and surrounds. The building design was completed in 2003 and the construction of the building subsequently undertaken. The building owner alleged that in 2009 and 2010 the building slab and surrounds were damaged or failed. The engineer claimed that the damage first occurred in late 2003 or early 2004 and the building owner’s claim, commenced in 2011, was therefore statute barred
22. [22]
    McMurdo P expressed the opinion that ordinarily, a cause of action for tortious negligence is complete when there is any manifestation of damage which is ultimately found to be connected to the alleged negligence.^[9](The emphasis is mine.)
23. [23]
    Ann Lyons J agreed with the orders proposed by the President but did not address the issue as to when an action accrues.  Holmes J (as Her Honour then was) preferred the conventional approach in Pullen v Gutteridge, Haskins & Davey Pty Ltd^[10] that the cause of action accrues where actual damage caused by a latent defect is manifested or the existence of the underlying defect is known or ought to be known.^[11] The nice distinction raised in the decision was not addressed by Ann Lyons J. I accept the conventional approach as expressed by Holmes J.^[12]
24. [24]
    It is apparent that significant rust damage was visible at the time of the inspection in 2019. Contrary to the assertion of Ms Burke and others it was not concealed. Some posts were coated with cementious material described as parging. Its purpose was not to conceal the exposed steel but as part of the termite treatment by Termi-mesh. It was necessary for the steel post to remain unpainted so that the parging could be properly applied.^[13]
25. [25]
    Mr Brown’s case is that the Applicant and her partner were to paint the posts which they failed to do. I will return to that issue later in these reasons.
26. [26]
    Some photographs^[14] of the steel posts depict rusting at the base of the posts as well as green material perhaps an algae or moss suggestive of reasonably high moisture levels around the base of  the slab.
27. [27]
    Mr Wright says that the skim coat (I take to mean the parging) concealed the corrosion problem until it had advanced and spalled the cementious coat away. However, that only concerned a number of posts. Other posts were exposed and showed rusting around the base sufficient to put any homeowner on notice that a problem existed.
28. [28]
    Ms Burke says that whilst her mother was living in the lower level she (Ms Burke) had little reason to inspect the area. It is not known whether her mother, now deceased, who was a party to the contract had observed the development of rust on the posts. It was noticeable that the garden and surrounding area, where a number of the posts were located, was very damp.
29. [29]
    The report of Rapid Building Inspections, in addition to their findings relating to the steel posts also found significant wood rot to ground floor windows indicative of a lack of maintenance.
30. [30]
    Ms Burke says that she is not a builder and could not be expected to have the requisite knowledge or skill to identify a problem and consequences of the posts rusting. I would expect that any homeowner acting reasonable, on becoming aware of the rust, would have investigated the matter further. In my opinion, Ms Burke appears to have been neglectful of maintaining her home as demonstrated by the extent of dry rot and absence of paint on the windows.^[15]
31. [31]
    Mr Brown says that during the build he advised Ms Burke and her partner separately of the importance of keeping the landscaping away from the house and to direct water away from the house as well as constructing small concrete domed pads around the base of each external steel post when carrying out the landscaping.  
32. [32]
    Mr House considered that some of the moisture in the area and damage to the steel post at the corner of the laundry could have come from wastewater disposed from near the laundry. This was denied by Ms Burke. Irrespective of the source of the moisture at that point, Mr House opined that the post near to the laundry would have rusted through anyway, even if properly treated.
33. [33]
    In my opinion, a homeowner exercising reasonable diligence would have investigated the appearance of rust at an earlier stage and certainly before January 2014. Although, it is not necessary for me to address whether Ms Burke ought to have discovered the damage and its link to the defect I am prepared to find that any examination of the posts would have raised as an issue the cause of the rust and link to the initial build, as subsequently occurred.
34. [34]
    In my opinion Ms Burke’s claim is statute barred.

Merits of the Applicant’s claim

35. [35]
    In any event, I believe Mr Burke would fail on the merits of the case for the following reasons.
36. [36]
    It was agreed that painting was excluded from the contract. It was also accepted that the Duragal posts required additional protection in the form of an anticorrosive paint or coating.
37. [37]
    Mr Brown says that the application of suitable paint was the responsibility of Ms Burke and/or her partner. Unfortunately, there has been no evidence from Mr Lockhart who is separated from Ms Burke. She is unaware of his present whereabouts.
38. [38]
    Ms Burke interprets painting as being decorative and not a protective anti-corrosive coating. Obviously, depending on the circumstance paint can also be applied for protection as well as decoration. I do not agree with her interpretation.
39. [39]
    The recollections of both Ms Burke and Mr Brown have been affected by the elapse of time. I believe both witnesses attempted to provide their honest recollection of events although they disagreed on some issues.  However, I consider that Mr Brown has the better recollection. I accept that he had the conversations in relation to the protection of the posts from moisture and the need to keep ground water away from the base of the posts when landscaping the area .
40. [40]
    Mr Wright says that it is unreasonable to require a lay person to apply the protective coating to the steelwork during construction prior to the posts being attached to the timber framework and prior to the casting of concrete around the steelwork.^[16] Mr House disagreed and considered the exposed posts could have been painted before the ground floor was built in. He did not consider that it was his professions’ view that the posts should be painted before being encased in concrete. He noted that the vertical joint each side of the post against the concrete is tight with no gap for moisture to enter. When investigated the steel against the concrete was found to be clear of rust, indicating that the steel tight against the concrete had passivated the steel and protected it from corrosion.^[17]
41. [41]
    Ms Burke relies upon the endorsement on the plans by Magnic Drafting Service that “All steel work shall be protected by zinc rich paint”. Mr House found that instruction vague and unhelpful and said it was the engineer Mr John Quak who should have provided guidance but failed to do so. Mr Wright agrees that Mr Quak’s drawings provided no information but says Mr Brown should have followed Magnic Drafting Service notes. Mr House was of the opinion that the engineer’s drawings were paramount on this issue.
42. [42]
    As to the posts affected, Mr Wright suggested that once the flaking on nine of the posts was removed holes in the posts may be revealed. Mr House says that only the exposed posts are affected and that despite flaking rust they are axially immensely strong.
43. [43]
    In relation to maintenance Mr House says that the post near the laundry (because of the level of moisture) would have corroded anyway even if appropriate anti corrosive coating had been applied. Mr Wright disagrees but concedes that the parging prevented a problem with respect to maintenance and application of a protective coating.
44. [44]
    I prefer Mr House’s evidence where he disagrees with Mr Wright.
45. [45]
    It should be noted that at completion and during all stages the work was passed by a certifier and an engineer, probably by Mr Quak, without comment in relation to how the steel posts were installed.
46. [46]
    I do not consider that Mr Brown had breached his duty of care to Ms Burke.
47. [47]
    For the reasons given I dismiss the Applicant’s claim.