O'Gorman v David Reid Homes Fraser Coast
[2024] QCAT 211
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- Unreported Judgment
- O'Gorman v David Reid Homes Fraser Coast[2024] QCAT 211
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O'Gorman v David Reid Homes Fraser Coast[2024] QCAT 211
O'Gorman v David Reid Homes Fraser Coast[2024] QCAT 211
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | O'Gorman & Anor v David Reid Homes Fraser Coast [2024] QCAT 211 |
PARTIES: | michael o’gorman (first applicant) christine o’gorman (second applicant) v kelbind pty ltd t/as david reid homes fraser coast (respondent) |
APPLICATION NO/S: | BDL295-21 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 21 May 2024 |
HEARING DATE: | 16 October 2023 and 1 May 2024 |
HEARD AT: | Brisbane |
DECISION OF: | Member Howe |
ORDERS: |
|
CATCHWORDS: | CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where the parties entered into a domestic building contract – where the builder claimed final payment under the contract and the owners paid the final payment – where no Form 21 issued – where the building approval elapsed without a Form 21 issuing – where the owners sought an order from the Tribunal that the builder issue a Form 21 – where there was considerable difference between the claimed costs of provision of a Form 21 on the evidence of the owners and the builder – where the parties indicated a desire for the builder to return to obtain a Form 21 – where the Tribunal directed the builder to return and deliver to the owners a Form 21 and in lieu pay damages in an amount sufficient to allow the owners to engage an independent certifier to issue a Form 21 Building Act 1975 (Qld), s 99(2) Queensland Building and Construction Commission Act 1991 (Qld), s 75(1)(a), 75(4), s 77(3)(g), Schedule 1B s 21 Building Regulation 2021 (Qld), s 48 Cochrane v Lees [2021] QCATA 74 Robinson v Harman [1848] Eng R 135. |
APPEARANCES & REPRESENTATION: | |
Applicants: | Self-represented by Michael O'Gorman |
Respondent: | Self-represented by Anthony Stallard |
REASONS FOR DECISION
- [1]Mr and Mrs O'Gorman contracted with the respondent construction company to build a home for them.
- [2]The parties entered into a Master Builders Residential Building Contract – Level 2 on 18 September 2019. Most of the work was done but Mr and Mrs O'Gorman claim a number of defective and incomplete items exist with respect to the construction. They bring this domestic building dispute in respect of those claimed items of defective and incomplete work.
- [3]There are 3 items of claim: defective matrix cladding on the outside of the house; a defective moisture extractor in an ensuite area; and no Form 21 final certificate has ever been supplied to them.
- [4]There was a fourth item of claim concerning certain ‘smart wastes’ not being installed in some areas of the house. However, before hearing the builder had installed those pursuant to direction given it by the Queensland Building and Construction Commission (‘QBCC’).
Defective matrix cladding
- [5]The outside of the house has been clad in matrix cladding. There are four panels of concern to Mr and Mrs O'Gorman. There is a window between 2 panels of the sheeting where the sheets are each 900mm wide. Then there is a sheet with a width of 1200mm, then a sheet with a width of 510mm. They say this is unsightly. The panels should have been the same width.
- [6]Mr O'Gorman says construction drawings show the panels are intended to be of equal width.
- [7]Where the panels of 1200mm and 510mm are fixed, arguably there could have been two panels of 855mm each. There would then have been no great difference between all four sheets, though the 900mm sheets would have been 45mm wider. That difference would probably have been lost however with the window interrupting the wall and drawing the eye.
- [8]Mr Johnston, a carpenter employed by the builder, did the actual fixing. He gave evidence. He said the sheets could have been of uniform width but he started from the left and when he came to the final sheets, where he fixed the 1200mm and 510mm sheets, he set out the supporting frame for the sheets (referred to as cavity trim) to show where he proposed to fit them, then asked Mr and Mrs O'Gorman to inspect and approve it, which they did. They were living next door during the construction. He said the placement of the cavity trim clearly showed where the sheets would go, and clearly showed they were of different sizes. The cavity trim was only tacked on and it could easily have been changed had the owners said to do that, but they did not. Mr Johnston said he explained to Mr O'Gorman that the position of the cavity trim was the proposed position of the matrix sheets and Mr O'Gorman approved the widths.
- [9]Mr O'Gorman did not disagree that he attended and inspected the cavity trim showing where the matrix sheets would be fixed, but he said he did not understand what he was being shown by Mr Johnston.
- [10]I accept that Mr O'Gorman approved the spacing of the sheets.
- [11]The construction drawings show the four sheets of apparent equal width. There are no measurements on the relevant drawing however and there is a warning on the drawing which states, “Do not scale from this drawing.” I do not accept that the drawings mandated that the sheets be of equal width.
- [12]Aesthetically the final two sheets could have been cut to matching widths. However, I find the varied widths were agreed between the parties on site and it is not open now for Mr and Mrs O'Gorman to resile from their instructions given to the builder’s carpenter to fit the sheets at the widths set by the fitted cavity trim.
- [13]This claim fails.
Extractor fan
- [14]This complaint concerns an ensuite extractor fan. The original has been replaced twice by the builder’s electrician.
- [15]The original fan installed by the builder’s electrician in the course of the build is described as an Airflow 3-in-1 product. No particular product other than it be a 3-in-1 fan combination is identified in the specifications.
- [16]Mr and Mrs O'Gorman complain in their application for domestic building dispute that the original fan was not working to specification. What that means is not made clear. There was a comment made in September 2021 by a QBCC inspector who attended following various complaints about the construction who said:
I test (sic) the fan with a piece of tissue paper and it fail (sic) to have enough suction to hold against the covering guard.
- [17]But by that stage the fan concerned was the third fan provided and the defects liability period had ended and there is nothing to suggest the test relied on by the building inspector is a valid and recognised assessment of the performance of such equipment.
- [18]According to the builder’s electrician who filed a statement of evidence, the owners’ first complaint was made 4 days after practical completion. The electrician came out and tested the original fan and considered it was working properly, but the owners complained about it again a couple of days later and therefore the electrician replaced it. It was replaced with a different type and model of fan, a SuperNova2.
- [19]Four days later, Mr and Mrs O'Gorman complained about the replacement fan too and the builder’s electrician returned and replaced that unit as well with another SuperNova2.
- [20]In February 2021 Mr and Mrs O'Gorman decided to make a claim on the SuperNova2 warranty. They contacted the builder’s electrician wanting warranty documentation.
- [21]A copy of the original Airflow invoice was made available, but Mr and Mrs O'Gorman were in fact after a copy of an invoice in respect of one of the SuperNova2 fans supplied subsequent to the Airflow fan.
- [22]The invoice for the original Airflow 3-in-1 fan supplied by the builder’s electrician shows a cost of only $110.32. Mr and Mrs O'Gorman now seek the cost of replacement of a different type of fan valued at $1,031.97. It is a 4-in-1 rather than 3-in-1 unit and it is bigger than any of the other fans installed, requiring a bigger space to be cut out to fit the bigger unit.
- [23]The builder’s electrician said at hearing that in his opinion all three fans supplied and installed had worked properly when he was at the property.
- [24]There is little evidence to support a claim that any of the fans were faulty. They may not have performed as well as the owners would have liked, but that does not make them defective. Indeed the owners’ principal complaint seems to be about the failure of the builder to provide an invoice for one of the SuperNova2 fans to allow the owners to claim against a warranty.
- [25]I accept the evidence of the electrician that there was nothing functionally wrong with the fans when the electrician was onsite. I do not accept the builder breached any requirement to provide materials that were good and suitable for purpose with respect to the fans. I do not accept that the builder failed to supply goods that accorded with the contract.
- [26]This claim also fails.
Form 21
- [27]The builder has not supplied the owners with a Form 21 final certificate.
- [28]As we explained in Cochrane v Lees [2021] QCATA 74, failure to provide a Form 21 final certificate from a certifier may constitute a breach of contract because it is an essential requirement and term of the contract:
Without final inspection certificates, neither construction was complete. A final inspection certificate evidences a successful final mandatory inspection which is a requirement under the legislation. In addition, the building approval usually requires issue of a final certificate as a condition of approval. The absence of a final inspection certificate may present substantial difficulties ahead for an owner.[1]
- [29]The builder had been directed to file a copy of the building development approval in the registry prior to hearing. The builder failed to do that. However it is a common requirement of development approvals that the builder comply with all statutory requirements associated with the build.
- [30]The same obligation to comply with statutory requirements, which includes obtaining a Form 21 certificate, are found elsewhere however.
- [31]By s 21 Schedule 1B Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) the builder warranted that the work would be carried out in accordance with all relevant laws and legal requirements including the Building Act 1975 (Qld).
- [32]By clause 13.1 of the contract the builder agreed to comply with all statutory requirements and to give any notice required to ensure such compliance.
- [33]By s 48 Building Regulation 2021 (Qld) (‘BR’) at the completion of each stage of assessable building work of a single detached class 1a building (the stages defined in s 44 BR) a builder is obliged to give notice to a certifier that the stage of work has been completed.
- [34]By s 44(1)(b)(vii) BR one of the stages of work is completion of all aspects of the work.
- [35]There is no dispute that the full price for the work has been paid to the builder. The builder issued a progress claim for that amount on 22 July 2020 without providing notice to the certifier that the work had been completed and therefore without providing the owners with a Form 21 final certificate. Despite that, the owners paid the practical completion payment of $50,425.50.
- [36]The builder refused to provide the Form 21 to the owners because of a small outstanding amount the builder claimed was a variation of the contract owed to him and unpaid.
- [37]It concerned the cost claimed by the builder to have been incurred in removing rendering applied by the builder’s concreters which impacted the effectiveness of the termite barrier of a concrete slab, and then having to reinstate the termite barrier. It was no great amount, the sum of $286.
- [38]The builder claimed the rendering compromising the originally installed termite barrier had been done by his engaged concreter, but at the direction of the owners.
- [39]At hearing the concreter, Mr Ramage, said it was in fact his suggestion made to the owners that he add a very thin coat to the slab edge for aesthetic purposes. They simply agreed with him.
- [40]Regardless of who was responsible for payment for clearing away the rendering and applying a second application of termite barrier to the slab, the claim for payment of the practical completion stage without providing a Form 21 certificate in exchange constituted a clear breach of the builder’s statutory and contractual obligations and the contract.
- [41]The builder should not have claimed to have achieved practical completion before giving notice to the certifier that the work was complete. The certifier would then have assessed the work and, subject to that assessment being satisfactory, by s 99(2) Building Act 1975 (Qld), given the owners a Form 21 final certificate. It was only at that stage that the builder was in fact entitled to claim final payment and be paid.
- [42]The claim for payment by the builder from the owners for payment of the second termite application barrier to the rendered concrete slab was extraneous to and irrelevant to the obligation on the builder’s part to supply the Form 21 certificate once the builder claimed practical completion had been achieved and claimed final payment.
- [43]The owners’ claim in respect of a Form 21 being due them is made out.
Cost of a Form 21
- [44]Mr Loader, the original certifier of the construction gave evidence. He could not recall what was outstanding on the project work preventing issue of a Form 21. He recalled that a slab edge had been rendered and that had compromised the integrity of the termite barrier. He had actually attended the property to conduct a final inspection when he found that problem.
- [45]He said the building approval had now lapsed. To obtain a Form 21 now a new building approval was required, then there would have to be another final inspection, collection of all existing certificates and then a Form 21 could issue.
- [46]Mr Loader said there would need to be additional fees paid, both for Council and certifier.
- [47]The owners claim that the cost of obtaining a Form 21 will now include more than the cost of the original certification for the project. They tendered a quotation from Pacific BCQ Building Certification (‘BCQ’) dated 8 November 2023 for $20,159.30 (incl GST). There is no breakdown of the costs involved, simply a global figure offered.
- [48]The owners say that that quoted cost does not include the costs of obtaining the “mandatory certificates listed.” They go on to provide their estimate of the additional costs involved for obtaining certificates at $9,000. They offer no evidence to support their claim about those costs, either that the certificates are necessary or that the costs are reasonable.
- [49]Mr Stallard, for the respondent builder, said the cost of engaging the original certifier, Mr Loader, to certify all the construction, was only approximately $2,500.
- [50]The owners did not call the certifier from BCQ to support his quotation. They said the certifier had refused to attend the hearing to give evidence. That may be because that certifier was not prepared to confirm the estimate under oath or to support it in the face of challenge under cross-examination.
- [51]Mr Stallard obtained a quotation for provision of a Form 21 from another independent certifier, Mr Smith, for the cost of supplying a Form 21 in circumstances where the previous building approval had lapsed. Mr Smith was not available to give evidence either, Mr Stallard similarly failing to make arrangements for the individual to attend.
- [52]Mr Smith quoted $4,535 to obtain a “building final”. He noted all previous approvals issued by the initial certifier would be required, copies of all inspection certificates (siting, slab, framing and as required by the original building approval) would be necessary as well and all Forms 12 as required “on the Fluid approval”, which was a reference to the certifier Mr Loader.
- [53]The Form 12 certificate he refers to replaced, from September 2021, in part, the old Form 16 certificate.
- [54]Mr Loader had issued a Form 61 Non-compliance notice on 22 July 2020 after attending for the final inspection. The Form 61 mentions some minor matters and two Form 16 certificates outstanding, one in respect of installation of the James Hardy cladding and one the compromised termite barrier.
- [55]The owners say they have subsequently obtained the termite protection certificate themselves, and Mr Stallard said Mr Smith had agreed to give the certification for the James Hardy cladding as part of the cost of providing a Form 21.
- [56]The owners say the stage work certificates and aspect certificates for the work done are necessary prerequisites for the Form 21. That is so. They offer no evidence to show those certificates are not currently available from the original certifier or the builder however. Mr Stallard gave evidence that he has copies of all existing certificates. Neither the quotation from BCQ nor the quotation from Mr Smith states fresh certificates would be required. Indeed the BCQ quotation refers to that company performing a “PCBQ Aspect certificate of review (Note: Excludes additional fees per certificate review on a recurrent refused certificate…).” That suggests they intend to do no more than peruse existing certificates.
- [57]At each stage of work building a house, the builder must not start the next stage of work until the builder has obtained a certificate of inspection for the finished stage. At completion of the final stage of building work the certifier gives a Form 21 final inspection certificate. There is no evidence to support the claim by the owners that new certificates certifying completion of the various aspects of work and stages preceding the final stage have not been given and cannot be utilised to now obtain a Form 21, subject to a new building approval being obtained.
- [58]In respect of cost, given the amount of Mr Loader’s fee to certify the contract work throughout construction and the costs quoted by Mr Smith to issue a Form 21 in circumstances where he is new to the site and relies on work done by a preceding certifier and the building approval has lapsed, I consider the broad brush cost quote by BCQ is inflated and unreliable and I accept Mr Smith’s estimate as the reasonable cost of another certifier doing what is necessary to issue a Form 21 to the owners.
Power to order completion of building work
- [59]By s 77(3)(g) QBCC Act the Tribunal may order rectification or completion of defective or incomplete tribunal work.
- [60]Tribunal work is defined in s 75(1)(a) to include the erection or construction of a building and by s 75(4) carrying out administration services relating to tribunal work is also tribunal work. Administration services for both building work and tribunal work is defined in Schedule 2 QBCC Act to include arranging for certificates, including certificates from a local government, to be issued.
- [61]The Tribunal therefore has power to order the completion of work under a building contract which is the issue of a Form 21 Final certificate.
Disposition
- [62]All parties to the action have expressed at hearing and generally in the course of the proceedings that their preference is that Mr Stallard return and do what is necessary to provide a Form 21. Given that, I determine he should be allowed that opportunity, with the owners permitting him and his workers and contractors, including any certifier engaged by him, all necessary access and reasonable assistance to that end.
- [63]If he fails to provide the Form 21 within a reasonable time, however, which I set at 60 days from the date of judgment, he shall be obliged to pay the sum of $4,535 to the owners as the reasonable cost to the owners of them arranging the Form 21 certification in lieu of Mr Stallard.
- [64]The parties should have liberty to apply in the course of the said 60 days for such further orders as circumstances may require.
Footnotes
[1] [45].