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  4. VSC Corporation Pty Ltd t/as Kustom Homes v Queensland Building and Construction Commission - [2024] QCAT 72

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VSC Corporation Pty Ltd t/as Kustom Homes v Queensland Building and Construction Commission[2024] QCAT 72

VSC Corporation Pty Ltd t/as Kustom Homes v Queensland Building and Construction Commission[2024] QCAT 72

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

VSC Corporation Pty Ltd t/as Kustom Homes v Queensland Building and Construction Commission & Anor [2024] QCAT 72

PARTIES:

VSC Corporation pty ltd t/as kustom homes

(applicant)

v

queensland building and construction commission

(first respondent)

mohammed shaeed

(second respondent)

APPLICATION NO/S:

GAR065-19

MATTER TYPE:

General administrative review matters

DELIVERED ON:

8 February 2024

HEARING DATE:

22 November 2022

HEARD AT:

Brisbane

DECISION OF:

Member Carrigan

ORDERS:

  1. The decision of the Queensland Building and Construction Commission made on 11 January 2019 to issue VSC Corporation Pty Ltd a direction to rectify for defective stormwater and drainage system identified as defective work is set aside.
  2. The Tribunal substitutes the decision of the Queensland Building and Construction Commission made on 11 January 2019 with a decision that in the circumstances it would be unfair to issue a direction to rectify to VSC Corporation Pty Ltd in respect of the building work contained in the Owners complaint made to the Queensland Building and Construction Commission on 8 June 2018.

CATCHWORDS:

GENERAL ADMINISTRATIVE REVIEW – BUILDING – INTERNAL REVIEW OF DECISION TO ISSUE A DIRECTION TO RECTIFY – DIRECTION TO RECTIFY – whether building work is defective – caused by subsidence or defective plumbing work

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 19, s 20, s 24

Queensland Building and Construction Commission Act 1991 (Qld), s 3(b), s 71J, s 72, s 86(1), Schedule 2

APPEARANCES & REPRESENTATION:

Applicant:

Mr C Mathews of Counsel instructed by All Building Law, Solicitors

First Respondent:

Mr R Ensbey, Solicitor of Gadens

Second Respondent

Self-represented

REASONS FOR DECISION

  1. [1]
    On 11 January 2019 the Queensland Building and Construction Commission (‘the Commission’) made a decision to give a Direction to Rectify (‘DTR’) to VSC Corporation Pty Ltd (‘the Applicant’) in relation to defective stormwater and drainage system at 30 Pear Street, Greenslopes, in the State of Queensland. Mohammed Shaeed (‘the Owner’) is a co-owner of that Greenslopes property.
  2. [2]
    The Applicant denies that it has performed building work which is structurally defective.
  3. [3]
    On 27 February 2019 the Applicant filed in the Tribunal an Application to review a decision made by the Commission on 11 January 2019. The grounds of that Application are;
    1. the defect is caused by subsidence due to latent conditions relating to the swimming pool;
    2. the defect is not caused by inadequate stormwater system and articulated joint; and
    3. the Commission has made the decision based on statements that are not correct.

Background Facts

  1. [4]
    The history of the Greenslopes property is that in October 2012 it was a large residential allotment with the dwelling at the left-hand side, a pool near the middle, and a shed near the right-hand side.[1] In February 2016 the residential allotment was subdivided to create two allotments. The area where the pool was located had been filled. It was not known if the pool was completely removed before subdivision, and whether fill placed in the adjacent area was compacted.
  2. [5]
    The Applicant commenced the business of Kustom Homes in early 2016. It builds customised “one off” homes for its clients. Cosic Vladmir is its registered Professional Engineer and apart from those qualifications also has a Bachelor of Information Technology. He is also a Director of VSC Corporation Pty Ltd trading as Kustom Homes. The Applicant was at all times a licensed builder.
  3. [6]
    On 1 March 2016 the Owner and the Applicant entered into a building contract for the construction of a new two-storey home at the Greenslopes property for $388,447.90 on a subdivided block where the swimming pool had previously been located.
  4. [7]
    The site classification was “H1”. The site investigation by Morgan Consulting Engineers dated 26 February 2016 was carried out in accordance with AS 2870 “Residential slabs and footings”. A soil sample was tested and the results provided the following soil description;

silty clay, orange, red, grey, moist stiff. Shrink, swell index was 4.2.

The Report also concluded that on the basis of the site exploration and testing regime and the experience of the engineers that;

the soils on this site are considered to be highly reactive to normal variation in soil moisture content with an estimated design surface movement. of between 40 to 60 mm

the foundation materials are of sufficient strength to support normal house loads…

  1. [8]
    On 21 March 2016 the Applicant commenced construction of the home on the Greenslopes property. When the foundations were dug no evidence was found of any part of the pool being removed.[2] The footings system is a waffle raft. The footings system was generally suitable for the soil classification provided by Morgan Consulting.[3] Comments by Mr Van de Hoef of NJA Consulting Pty Ltd were as follows;[4]

Waffle rafts are not intended to found a significant depth into the finished ground. A test pit on the right-hand side showed footing system depth completed in accordance with design. APOD Soil test to the rear left-hand corner encountered cobbles and fill at a depth of 1.3 m causing problem for digging a borehole. Form 21 certificate final inspection was completed approximately June 2016.

  1. [9]
    On 6 April 2016 an inspection certificate in respect of the Waffle Raft Slab said it complied with engineering drawings and specifications.
  2. [10]
    On 21 June 2016 the Applicant completed the construction on the home.
  3. [11]
    On 7 July 2016 a building certifier provided the Form 21 – Final Inspection Certificate that building work for the building or structure was inspected and complies with building approval.[5]
  4. [12]
    Approximately 5 to 6 months after practical completion of the works some minor cracking of external brick expansion joints around the home occurred. The Applicant completed repair work for those defects.
  5. [13]
    Subsequently further cracking began to appear in the external brickwork. The Applicant was notified and again attended the site. The Applicant suggested an engineer investigate this matter rather than just fixing cracks appearing in the building.
  6. [14]
    The Applicant arranged for Morgan Consulting Engineers to provide a Structural Inspection Report dated 4 May 2018. The Report concluded;
    1. it would appear that the soil/material used to fill the excavation left by the removal of the swimming pool had not been properly compacted;
    2. there has been ongoing settlement of the rear, northern corner, resulting in cracking to the rear wall. Overall the damage has become progressively worse over time and there is no indication that it will stabilise in the near future; and
    3. parts of the residence should be stabilised using underpinning to prevent further settlement.
  7. [15]
    On 8 June 2018 the Owner, on the advice of the Applicant, made a complaint to the Commission about building work carried out by the Applicant at the Greenslopes property. Most of the complaints related to “cracks” in different parts of the home but also included the bedroom door not closing properly, grouting, cupboard doors not lining up and closing, and rust in the showerhead.
  8. [16]
    The Commission commenced enquiries and corresponded with the parties seeking further information about the construction of the home. One of the documents obtained by the Commission from the Owner was a “list of complaint Items”. The Owner listed 16 complaints which he says were noticed on 1 September 2016 except for a further six (6) items which were noticed on 1 January 2017.[6]
  9. [17]
    On 6 August 2018 an inspection of the Greenslopes property was made by Geoffrey Sanders and Arnold Fisher, Building Inspectors of the Commission. This was a visual inspection only. The Owners representative was in attendance as was Vladimir Cosic, a director of the Applicant. Vladimir Cosic says that each complaint item on the list was inspected. As each item was considered by the QBCC Inspectors, Vladimir Cosic says the inspectors were linking the item to subsidence and acknowledged that all cracking and misalignment in and out of the house seemed to be connected to subsidence of the alfresco area and the buried pool. Vladimir Cosic says;[7]

With regards to drainage around the house, no issues were brought up.

The inspectors checked falls away from the house and said all was okay. Only one section, which is on the right-hand side of the house was discussed in a bit more detail. This was the section where one gully pit was installed and pebbles placed on top. They mentioned that the ground is slightly below the gully inlet and that pebbles were above the field gully.

We had a discussion and I explained to them that the ground would have settled from between the time the house was finished and the time of the inspection. A clear indication was the little step we did in front of the laundry door which had sunk. This step was done at the owner’s request because the step outside of the house was a bit higher than what the owner wanted so we placed a small concrete step that was not structural nor tied to the house. After that discussion the inspectors seemed okay with the situation and we continued on.

  1. [18]
    Vladimir Cosic says at no point was any indication given that any work was defective or that anything needed to be fixed.
  2. [19]
    A Report of the inspection was prepared by Mr Sanders on 9 August 2018. Fourteen (14) of the sixteen (16) defects were identified as defective work. Some of the defective work was structural and other parts non-structural. The Report contained the following comments;

During the external site inspection QBCC identified poor site drainage along the Southern side of the dwelling identified as not constructed in accordance with the NCC 3.1.2 Drainage requirements and AS 2870 – 2011 Clauses 5.6.3, 5.6.4 and 6.6.

Further determination of the site and stormwater drainage was to await structural and geotechnical engineers reports and the plumbing investigation report.

  1. [20]
    On 29 August 2018 a plumbing and drainage Report was prepared by Leakless Plumbing Pty Ltd. The results of the plumbing and drainage tests on all services to that property were recorded as follows;
    1. Stormwater: a CCTV camera inspection was carried out on only stormwater drainage and the findings made were as follows;
      1. (i)
        large areas of drainage were on back fall and holding water making visibility poor for most of the inspection;
      1. (ii)
        a junction was located which did not appear to have any downpipe or connection to it. Excavation and exposing of the junction was recommended to ensure it had been capped and sealed in an approved manner;
      1. (iii)
        a joint was pulling apart in the stormwater drainage. It was recommended that excavation and replacing of the joint and installing an expansion joint to allow for further ground movement.
    2. Sewer: a hydrostatic test showed that there was no leak or break at the time of testing.
  2. [21]
    An Engineering Report from NJA Consulting Pty Ltd dated 3 October 2016 concluded that;
    1. the original site classification is not correct for the site conditions. Given the previous presence of a pool and a shed within the footprint of the dwelling, a more prudent site classification would have been Class “P”;
    2. the footing system design is generally considered appropriate for the original site classification;
    3. movement in the footing system is considered relatively minor and appears to have been caused by reactive clay movement associated with increase in the moisture content of the founding soils along the right-hand side of the site (location where poor site drainage is present).

The Report recommended rectification works to address the problems with scope to include the improvement of site drainage systems.

  1. [22]
    On 1 November 2018 Mr G Sanders on behalf of the QBCC issued to the Applicant a DTR to repair defective work at the Owner’s Greenslopes property.
  2. [23]
    On 30 November 2018 the Applicant requested the QBCC to review the decision dated 1 November 2018 to issue the DTR.
  3. [24]
    On 6 December 2019 the Applicant sent to the QBCC further information it would like to be considered in relation to the review.
  4. [25]
    On 10 January 2019 Stephen Noble of the QBCC completed a desktop review in relation to “many cracks at the back of the house”. That review referred to the engineering and plumbing reports as well as the site inspection by Mr G Sanders and made a determination that;
    1. the licensee failed to install articulation to the sanitary drainage and stormwater drainage system which deviates from the approved engineering design and AS 2870 – 2011 sections 5.6.4; and
    2. the licensee installed two field gully pits within 1500 mm of the footing in contravention of the engineering design, which is contributing to damage occurring to the dwelling and deviates from the approved engineering design plan;
    3. the field gully pit to the southern elevation is situated above the finished ground level rendering it ineffective to convey surface water away from the footing;
    4. the external masonry façade does not have compliant articulation to the southern and eastern elevation to allow for differential movement and contravenes the engineering design and AS 3700 – 2011 sections 4.8.4 and 4.8.5;
    5. the Owner’s complaint falls within the definition of defective construction works in accordance with the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) and the Queensland Building and Construction Commission Regulation 2003 (Qld); the Queensland Building and Construction Board Rectification of Building Work Policy (3) 2.(a) defines this complaint as structural defective building work.
  5. [26]
    On 11 January 2019 QBCC, having conducted the review sought by the Applicant, made a decision to give a DTR to the Applicant to rectify the drainage system as being defective work after a consideration of the possibility of subsidence caused by the swimming pool and a finding that the site was classified as highly reactive with a seasonal change providing reactive surface movement.
  6. [27]
    On 17 January 2019 Mr G Sanders on behalf of the QBCC gave the Applicant the DTR for the defective work at the Greenslopes property. The defective or incomplete building work identified in the DTR was;
    1. the surface water drainage fall ratio to the perimeter of the dwelling is not installed to the requisite 1:15 slope ratio. Stormwater ponding adjacent to the footing is exacerbating strata reactivity and contributing to damage occurring to the dwelling and deviates from the approved engineering design.
    2. The surface drainage system is leaking to the eastern elevation, exacerbating strata reactivity and contributing to damage occurring to the dwelling. This defect deviates from the engineering recommendations and is in contravention to the NCC 2015 Vol 3 DP 2.1, DP 2.3, and AS 3500.
    3. The licensee failed to install articulation to the sanitary drainage and stormwater drainage system, which deviates from the approved engineering design and AS 2870:2011 Sec 5.6.4;
    4. the licensee installed two field gully pits within 1500 mm of the footing in contravention with the engineering design, which is contributing to damage occurring to the dwelling and deviates from the approved engineering design plan. Furthermore, the field gully pit to the southern elevation is finished at ground level rendering it ineffective to convey surface water away from the footing; and
    5. the external masonry façade does not have compliant articulation to the southern and eastern elevation to allow for differential movement and contravenes the engineering design and AS 3700:2011 sec 4.8.4 and 4.8.5.
  7. [28]
    The Applicant obtained a Structural Inspection Report dated 26 July 2019 from Morgan Engineers. The Report reviewed information available to the QBCC including the Engineering Report from NJA Consulting Engineers. In their Report, Morgan Engineers concluded that;[8]
    1. there is agreement with the QBCC Report that significant cracking was present at the rear wall (complaint 1) while other minor cracking was present elsewhere. They also agreed that the minor cracking at the front of the house has occurred as a result of settlement of the pool fill.[9]
    2. floor levels measured by the QBCC were a good representation of the profile of the slab and closely matched the levels taken during their investigation;
    3. They disagreed with the QBCC assessment that cracking to the rear wall occurred as a result of the drainage issues. This is not consistent with the information provided in the plumbing report, as none of the pipes were found to be leaking and the site drainage around the residence was observed during their inspection to be appropriate.[10] The Report concluded; 
      1. (i)
        cracks and gaps to the rear of the residence at the Greenslopes property have occurred as a result of settlement of the pool fill;[11] and
      1. (ii)
        the drainage issues referred to by QBCC and NJA do not exist. There is no evidence of the effect of drainage issues, such as increased moisture content of the soil. Drainage issues have not contributed to the settlement and cracking of the rear of the residence.[12]
  8. [29]
    On about 15 October 2019 Mr La Monaca, of ELM Consulting Engineers, provided an Engineering Report to the Applicant.[13]
  9. [30]
    On 28 October 2019 a further Report was obtained by the Commission from NJA Consulting. That Report was completed following additional investigations and contained a detailed list of the conclusions which included the following;[14]
    1. the footing system design required two articulation joints to be installed on the right-hand side wall of the dwelling. These joints were not installed;
    2. The installed stormwater system has downpipes that are effectively attached to the dwelling. There is no evidence that joints at the base of the downpipes have been installed. The installed stormwater system does not comply with AS 2870;
    3. there are back falls towards the dwelling in a number of locations on the right-hand side of the dwelling. In addition, the field gully on the right-hand side of the dwelling is set approximately 50 mm above the ground. The site drainage on the right-hand side of the dwelling is poor;
    4. the field gully is positioned at the rear right-hand corner of the site approximately 15 mm above the ground level. The site drainage in this location is marginal;
    5. the installed drainage on the right-hand side of the dwelling does not comply with the requirements of the design, the NCC, or AS 2870;
    6. large sections of installed stormwater pipe are ponding water. The majority of these locations are well away from the position of the removed pool and therefore the problem in these locations is not related to the pool removal;
    7. the installed stormwater pipe work does not have the falls that would be required for compliance with AS 3500.3 (i.e. 1:100);
    8. on the basis of probability, the footing system movement that has occurred is related to a general small amount of overall tilt to be footing system and some more significant localised subsidence at the rear left of the footing system;
    9. the small overall tilt to the footing system is likely related to reactive clay movement, with the poor site drainage being a contributing factor. The amount of overall rotation to the footing system is relatively minor and falls within the performance requirements of AS 2870. This overall tilt has likely caused some minor cosmetic defects to the dwelling (i.e. cracking in wall and ceiling linings et cetera);
    10. the localised footing system movement at the rear left of the dwelling is caused by settlement of fill related to the previous present pool. This is the predominant cause of the more significant defects present at the rear left-hand corner of the dwelling. The localised area of the footing system in this location is not performing in accordance with the performance limitations defined in AS 2870;
    11. there is no evidence that indicates that the lack of suitable pipework articulation has contributed to the footing system movement that has occurred to date;
    12. there is no evidence that indicates that lack of falls to the stormwater pipework has contributed to the footing system movement that has occurred to date; and
    13. the rectification works’ details specified in the original NJA Consulting Pty Ltd report are considered appropriate for this site.
  10. [31]
    On 11 January 2021 NJA Consulting provided to the Commission a Monitoring Report in accordance with previous recommendations that abnormal moisture influences that are present on the site should be removed and the ongoing performance of the buildings footing system should be monitored to determine whether further rectification works were required. That Report came to several conclusions as stated below;
    1. in the context of the performance of the building’s footing across the extent of the pool that is located towards the rear left-hand corner of the dwelling, the footing system has remained relatively stable for an extended period;
    2. as for the previously noted slightly higher levels present along the right-hand side of the dwelling, these may be related to poor site drainage conditions. The more recent monitoring provides an indication that any poor site drainage conditions are not currently having an ongoing detrimental impact on the footing system performance;
    3. on information currently available, the recommendations of their original report were generally suitable, in that consideration of whether the footing system of the dwelling should be underpinned in the circumstances where the extended monitoring occurred. This provides an indication that if the left-hand side of the building’s footing system is relatively stable, then the stage II underpinning would not be required at this time;
    4. based on information currently available that over an extended period (more than two years) the left-hand side of the building floor has remained relatively stable and therefore there is no specific engineering reason why the left-hand side of the building floor requires underpinning at this time, given that the left-hand side of the building’s footing system is located over the position of the previously present pool. In circumstances where more significant footing system movement occurs to the left-hand side of the building’s floor in the future, then underpinning of this area of the building’s footing should be undertaken at that time;
    5. more recent monitoring indicates that the poor site drainage conditions present on the right-hand side of the dwelling have not had a detrimental impact on the footing system over the more recent 13-month monitoring. However, it is still recommended that NCC-compliant site drainage should be provided around the perimeter of the dwelling; the site soils are considered to be highly reactive to changes in soil moisture content and therefore prudent practice would be to ensure that generally compliant site drainage conditions are present on the property.
  11. [32]
    A further Structural Engineering Report has been provided by Mr La Monaca dated 20 January 2020. Mr La Monaca reviews engineering documents, reports, and soil investigations including a plumbing report, and has made several conclusions as follows;
    1. while earlier site classifications were correct, a subsequent APOD Report with additional information correctly classifies the site as a “Problem site” due to the presence of uncontrolled fill depth in the area of the filled swimming pool;
    2. the foundation design is based on a waffle slab design with articulated masonry veneer and complies with the general requirements in AS 2870 – 201;
    3. the site drainage conditions to the right, left, and rear of the site are similar given the nature of the material overlaying the clay subsoil material and have not contributed to the footing system movements evident onsite;
    4. the articulation joints as installed have not contributed to the movements encountered onsite. The render applied across the joints will exhibit hairline cracking due to the nature of the modified render normally adopted. These could be modified with the installation of flexible sealant as per typically accepted detailing to provide better long-term maintenance;
    5. the predominant cause of damage to the dwelling is subsidence associated with the pre-existing swimming pool which has been identified as a latent issue;

Mr La Monaca disagrees with the assessments and interpretations by the Commission in the DTR.

  1. [33]
    On 11 September 2020 NJA Consulting provided another Monitoring Report to the Commission. This Report was brought about following a floor level survey prepared by Arnold Fisher of QBCC, which resulted in this further review of available monitoring data in an attempt to determine whether the rectification works originally specified by NJA Consulting are still appropriate. The conclusions expressed in that Report include;
    1. over the last two years the building footing system has remained relatively stable;
    2. there is no evidence that provides any indication that significant on-going footing system movement has occurred over the approximately two-year observation period;
    3. there is no evidence that indicates that on-going downwards movement has occurred at the rear left-hand corner of the building footing system (in the vicinity of the pool);
    4. this raises the possibility that this area of the building footing system may not require underpinning;
    5. on the basis of current available information, the original rectification works (Stage One Works) are technically suitable and should be implemented on the property;
    6. the footing system of the building should then be monitored for a period of 12 months;
    7. at the completion of the monitoring period, if the footing system is found to have remained relatively stable at that time, Stage Two Works would not be required.
    8. If there is any evidence of ongoing downwards movement occurring at the rear left-hand corner of the building footing system, then underpinning should be undertaken at that time. Further investigation should be undertaken to confirm the full extent of any underpinning that may be required.

Experts Conclave and a Joint Experts Report

  1. [34]
    In accordance with Directions made by the Tribunal an Experts Conclave was conducted on 3 September 2022 by Member Paratz. That Conclave was attended by Mr Van de Hoef, of NJA Consulting Engineers, and by Mr La Monaca. Both Engineers produced a Joint Experts Report (‘JER’) dated 12 October 2020. The JER was in evidence in the Tribunal hearing.[15]
  2. [35]
    The JER identified the problems with the site at the Greenslopes property as subsidence related to the left corner of the dwelling where construction was over a previously present pool.[16] Monitoring indicates there is no significant ongoing movement.[17] Any background movement falls within what would normally be expected for a performing footing system.[18]
  3. [36]
    In response to the question whether the DTR in “item 1” is incorrect in that it nominated defective items that have not contributed to the structural defect, movement and/or damage;
    1. Mr La Monaca said that the Owner’s complaint in “item 1” relates to a structural defect associated with subsidence of the previously existing pool and the nominated defective items have not contributed to the structural defect;
    2. Mr Van de Hoef said he had “no response as the question falls outside my area of expertise”.[19]
  4. [37]
    QBCC queried a number of issues about “Masonry Articulation Joints” and responses were provided by the Experts in the JER. For instance, in respect of the question whether articulation joints installed by the Applicant were defective, the experts provided a mixed response.[20]
    1. Mr Van de Hoef said the joints are partially filled with hard material that inhibits the performance of the joint and therefore the joints are non-compliant;
    2. Mr La Monaca said he had inspected only one visible exposed joint which had been previously repaired. While the joint contains some fill material, it is otherwise free of mortar with no flexible sealant; the articulation joints have been installed and then rendered over. While this is not recommended, the existing joints would still provide articulation and not inhibit the performance of the joint. In his opinion the articulation joints are not defective with respect to the intention of the current standards and technical notes.
  5. [38]
    In response to a further question whether construction of the Masonry Articulation Joints on the right-hand side of the building are not evident, the experts agree that the two joints to the right-hand side are not installed. The remaining joints have been rendered over and scribed. Mr Van de Hoef is of the opinion the adopted method of articulation joints construction is such that the correct function of the joints will be inhibited. Mr La Monaca says the remaining joints are installed as nominated in the original design engineer’s design, and that the articulation joints are not filled but rendered over and scribed, which will not inhibit the movement of that joint and is generally compliant.[21]  QBCC questions whether gapping at the articulation joint location was not specifically related to the severity of the footing system movement that had occurred, but was related to the overall geometry and configuration of the rear masonry wall of the dwelling. This resulted in a positive response from Mr Van de Hoef. Mr La Monaca said he could not agree as the footing movement in the area of the subsidence has caused the opening of the articulation joint. The wall is a straight single-storey wall and is not relevant.[22]
  6. [39]
    QBCC asked several questions of the experts about “Site Drainage”. Both experts responded in the JER that drainage along the right-hand side of the dwelling was poor and has been finished with gravel material and there was a concrete edge present located under what was previously a boundary fence. In respect of whether the field gully on the right-hand side is ineffectual, Mr Van de Hoef said that the field gully is finished approximately 50 mm above ground surface which means that water would pond in the area to a depth of 50 mm before the field gully would become effective. Mr La Monaca said that the field gully to be effective would need to be installed 50 mm below the ground.[23] Other inadequacies or defects were discussed including that in its current configuration of surface water drainage, water is not drawn away from the building.[24]
  7. [40]
    The Experts were also requested to provide opinions on “Stormwater and Sewer Drainage”. They agreed that there was no apparent leak in the water supply pipework. For the stormwater pipework, they agreed with the report from Leakless Plumbing which noted ponding of water in the stormwater pipework although they each had not specifically witnessed this ponding themselves. In response to the question whether a water leak from the joint pulling apart in the charged stormwater line may affect the foundations through storm movement, they said that they were not aware of any changed stormwater system being present on the site. They were not aware of any evidence that leaking stormwater pipework has had a detrimental effect on the building footing systems to date.[25] In response to a question by QBCC relating to the unconnected junction of the charged stormwater line, they recommended replacement of the junction to ensure it has been capped and sealed but otherwise stated;[26]

The plumbing test does not provide evidence that there is actual escape of water in this location.

As for the question whether the drainage system is on backcharge, the Experts said in the JER;[27]

The experts are not aware of any evidence that leaking site services has had impact to the dwelling to date…

Mr La Monaca noted that “any back falls present don’t prevent any water from entering [the] drainage system.” Finally, in relation to the question whether the current system is functioning as a charged system to dispose the stormwater to the current kerb outlet, the Experts responded;[28]

  1. La Monaca said the current system is performing satisfactorily as per the Owner’s advice; and
  2. Mr Van de Hoef said he had not had discussions with the Owner and the current system on site is not compliant with AS 3500 as indicated in the Form 16 Certificate issued by the plumber who stated an intention to comply with AS 3500.
  1. [41]
    In relation to the question about whether the sewer pipe work had any apparent leaks, the experts responded;[29]

The experts note that the Leakless Plumbing report did not identify any sewerage pipework leaks.

  1. [42]
    As to the cause of “Building Movement” the experts provided the following opinions in the JER;
    1. the more significant localised subsidence has occurred at the rear right-hand side of the dwelling;[30] Mr La Monaca added that the more significant subsidence that has occurred is the only relevant subsidence that has occurred. Mr Van de Hoef added there is a small amount of background footing system movement (relatively minor) resulting from a tilt of the building in the right to left direction;
    2. as for QBCC’s question whether the overall tilt to the footing system is likely related to reactive claim movement, with poor site drainage being a contributing factor which has likely caused some minor cosmetic defects to the dwelling (cracking of walls and ceiling);[31]
      1. (i)
        Mr La Monaca’s opinion is that any overall tilt is not significant and is consequently taken up by normal performance of the foundation system;
      1. (ii)
        Mr Van de Hoef concurs that the overall tilt to the footing system is related to those matters set out in the question above.
    3. The experts were in agreement that;[32]
      1. (i)
        the localised footing system movement at the rear left of the dwelling is caused by settlement of fill related to the previous present pool;
      1. (ii)
        this settlement is the predominant cause of the more significant defects present at the rear left-hand side of the dwelling;
      1. (iii)
        the localised area of the footing system in this location is not performing in accordance with the performance limitations found in AS 2870.
      1. (iv)
        there is no evidence that the lack of suitable pipework articulation has contributed to the footing system movement that has occurred to date;
      1. (v)
        there is no evidence that indicates that the lack of falls in the stormwater pipework has contributed to the footing system movement that has occurred to date;
      1. (vi)
        the subsequently identified pool and fill is a latent issue in that it was not known at the time the original design and construction was undertaken;
      1. (vii)
        the current articulation joints, correctly or incorrectly installed, do not cause footing system movement;
      1. (viii)
        the installed articulation joints to the left northern and front western walls exhibit negligible signs of cracking or movement;
      1. (ix)
        the right southern wall with missing articulation joints shows no signs of cracking or movement;
      1. (x)
        the subsidence of the previous pool has caused the damage associated with structural defects reflected in the articulation joint that has opened;
      1. (xi)
        except for the damage resulting from the subsidence in the area of the previous pool the existing footing system is performing in accordance with the performance objectives required of AS 2870.

QBCC obtains additional Engineering Reports

  1. [43]
    An additional Engineering Report dated 14 February 2022 was obtained from Mr Van de Hoef to review a Structural Assessment of House Subsidence Report from A1 Trusted Consulting Engineers dated 28 May 2021. Mr Van de Hoef completed his review of that Report by stating;[33]

we are of the opinion that no amendment or change is required to be made to our previous reports or the opinion provided in the joint expert report.

Tribunal’s Jurisdiction

  1. [44]
    The Tribunal’s jurisdiction is conferred under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) or by an “enabling Act”.[34]
  2. [45]
    A decision by the Commission to give a DTR is a reviewable decision.[35]
  3. [46]
    A person affected by a reviewable decision of the Commission may apply, as provided under the QCAT Act, to the Tribunal for a review of the decision.[36] The Applicant has applied to the Tribunal for a review of the QBCC’s decision and is a person affected by that reviewable decision. The QBCC Act is for the purposes of these proceedings the “enabling Act”.
  4. [47]
    The Tribunal in conducting the review of the reviewable decision must decide the review in accordance with the QCAT Act and the QBCC Act when the decision under review was made and has all the functions of the Commissioner.[37]
  5. [48]
    The Tribunal must hear and decide the review by way of a fresh hearing on the merits and is to produce the correct and preferable decision.[38]
  6. [49]
    In performing its functions in these proceedings the Tribunal may;[39]
    1. confirm or amend the decision; or
    2. set aside the decision and substitute its own decision; or
    3. set aside the decision and return the matter for reconsideration to the decision-maker for the decision, with directions the Tribunal considers appropriate.

Relevant Statutory Provisions relating to QBCC issuing a DTR

  1. [50]
    The objects of the QBCC Act include the provision of remedies for defective building work.[40]
  2. [51]
    Provision is made in the QBCC Act for rectification of building work or remediation of consequential damage.[41]
  3. [52]
    QBCC is given the power to require rectification of building work.[42]  That power can be exercised when the Commission is of the opinion that building work is defective or incomplete or consequential damage is being caused as a consequence of such work. Building work includes the original construction of a building.[43] Defective building work has to be “defective” within the meaning of the following definition;[44]

defective in relation to building work includes faulty or unsatisfactory.

  1. [53]
    QBCC may take into consideration all circumstances it considers reasonably relevant when deciding whether to issue a DTR.[45] Where the Commission is satisfied it would be unfair to a person to give a DTR, the Commission is not required to give that Direction.
  2. [54]
    The Commission submits that the Rectification Policy came into effect on 10 October 2014 and remained in force as at the date of issuing the DTR to the Applicant in these proceedings.

Were Cracks in the Home Caused by Subsidence or by Defective Drainage Works

  1. [55]
    The evidence before the Tribunal establishes that the Greenslopes property was a subdivided lot from a larger allotment. The home constructed by the Applicant on the Greenslopes Property was in an area of land where fill had been used in the location of a previous swimming pool. That fill, on the evidence, does not appear to have been properly compacted by the time the Applicant commenced construction of the home.
  2. [56]
    The Applicant completed construction of the home on 21 June 2016. The Form 21 – Final Inspection Certificate was issued on 7 July 2016. Prior to that, other inspection certificates had been issued and the site had been inspected on several occasions by Morgans Consulting Engineers during the course of construction. There is no evidence that at the time of completion of construction there was any issue of defective work in relation to the construction of the home except in relation to stormwater and surface drainage.
  3. [57]
    The first occasion when cracks appeared in the home was in approximately December 2016. The Applicant returned to site and performed rectification work.
  4. [58]
    It appears that by about early 2018 the home developed some further cracks which required attention. The Applicant again returned to the site but on this occasion obtained an engineering report from Morgan Consulting Engineers on 4 May 2018. Morgan Consulting Engineers noted that there was movement at the rear wall articulation joint and also “stepped hairline cracking” to the render, and that there was “ongoing settlement of the rear, northern corner resulting in cracking to the rear wall”.
  5. [59]
    Approximately two years following the completion of construction the Owner on 8 June 2018 lodged a complaint with the Commission relating to the cracking of walls in the home and other complaints. That complaint was investigated by the QBCC and on 1 November 2018 it issued its initial DTR to the Applicant to rectify defective work relating to the stormwater system. The Applicant sought a review of that decision which was completed on 11 January 2019 and confirmed the earlier decision to issue a DTR on the basis that the storm water system installed by the Applicant was defective work, and was exacerbating strata reactivity and contributing to damage occurring to the dwelling, and deviated from the approved engineering design. In making that decision the Commission relied upon;
    1. the report dated 8 August 2018 from Mr Geoffrey Sanders, building inspector, noting gaps and cracks in the walls of the home and also defective works performed by the Applicant. The report concluded that further investigation needs to be undertaken in respect of the subsidence element claimed by the Applicant;
    2. other contributing factors (which the Applicant does not believe) have caused or had the effect of movement being experienced on site;
    3. technical advice from Mr Steve Noble, Senior Technical Internal Review Officer, who provided a report of 10 January 2018 and found, in response to the possibility of subsidence caused by the swimming pool, that the site was classified as highly reactive with a seasonal change from reactive surface movement. It was critical that water does not pond near the housing footings and that a fall is to be provided to the perimeter of the dwelling. The report identified no articulation from the roof drainage system connection to the surface drainage system as required in the engineering design and two field gully pits are ineffective with a break in the stormwater pipe identified in the eastern elevation causing water to inundate the soil.

The Commission concluded that nothing had come to its attention to indicate that it would not be fair and reasonable to issue the DTR.

  1. [60]
    A difference of opinion was expressed by the Joint Experts as to the proper construction and interpretation of AS 2870. For instance, Mr Van de Hoef said that AS 2870 requires the Applicant, for drains attached to the building, to incorporate flexible joints that allow for the total range of differential movement in any direction.[46] Mr La Monaca disagreed and was of the opinion that the Standard has no application as the drainage system was external to the building and there was no internal drainage system under the slab connecting to the drainage system external to the building. The terms of AS 2870 relating to Plumbing Requirements provide (in part) as follows;[47]

Drains attached to or emerging from underneath the building shall incorporate flexible joints immediately outside the footing and commencing within 1 m of the building perimeter to accommodate a total range of differential movement in any direction equal to the estimated characteristic surface movement of the site…

The introductory words of that Standard refer to drains “attached to or emerging from underneath the building”. The terms of the Standard make a clear distinction between drains “attached to or emerging from underneath the building” and those drains which are external to the building perimeter. The evidence in these proceedings is that the Greenslopes property had stormwater drains external to the perimeter of the building. There were downpipes attached to the building but there is no evidence that any drains were located under the building slab. That is no evidence that there were drains “attached to or emerging from underneath the building”. Accordingly, AS 2870 has no application to the external drainage at the Greenslopes property. Accordingly, the Tribunal accepts the evidence of Mr La Monaca. The Tribunal does not accept the evidence on this issue from Mr Van de Hoef including the conclusion expressed by him in several of his Reports that the stormwater drainage as constructed fails to comply with AS 2870.The Tribunal finds that AS 2870 is irrelevant to and has no application to the external site drainage system for the Greenslopes property.

  1. [61]
    There is additional evidence before the Tribunal. For instance;
    1. the engineering report from Morgan Consulting Engineers dated 4 May 2018 says there has been ongoing settlement of the rear northern corner resulting in cracking to the wall of the home. That damage has become progressively worse over time. It would appear that the soil/material used to in fill the excavation left by the removal of the swimming pool had not been properly compacted;
    2. the Leakless Plumbing and Drainage Report of 29 August 2019, while identifying defects, found a back fall and holding water, a junction that did not appear to have a downpipe connection, and a joint that is pulling apart. However, a pressure test of the underground water service established that there were no leaks at the time of testing. This test contradicted the technical advice to the Commission relating to a break in the stormwater pipe on the eastern elevation would cause water to inundate the soil. The JER also contradicts the technical advice where it states;[48]

The experts are not aware of any evidence that leaking site services have had impact to the dwelling to date.

  1. the report from Morgan Consulting Engineers of 26 July 2019 stated that “the site drainage was observed during our investigation and found to be appropriate”;
  2. the experts commented in the JER on the current articulation joints as constructed and said;[49]

The experts agree that articulation joints correctly or incorrectly installed do not cause footing system movement. They are intended to reduce severity of defects present in the external masonry in the event that footings system movement would/does occur.

  1. the experts in the JER agreed that except for the damage resulting from the subsidence in the area of the previous pool, the existing footing system is performing in accordance with its performance objectives required by AS 2870.[50]
  2. in the JER the Experts were asked whether Item 1 in the DTR is incorrect in nominating defective items that have not contributed to the structural defect as causing such defect, movement and/or damage responded in these terms;[51]
    1. (i)
      Mr La Monaca: In my opinion based on the technical and physical information available, complaint Item 1 relates to a structural defect associated with subsidence of the previously existing pool and their nominated defective items have not contributed to the structural defect;
    1. (ii)
      Mr Van de Hoef: I have no response as the questions falls outside my area of expertise. I believe that technical expert should limit their assessment two aspects to a technical nature and therefore do not have a comment on the DTR. This is something for the Tribunal to consider.
  3. the Experts in the JER are agreed that the subsidence of the previous pool has caused the damage associated with the structural defect reflected in the articulation joint that has opened in the wall of the home.[52]
  1. [62]
    The Tribunal accepts the evidence in the JER where the Experts are in agreement. Both Experts agree that the fill in the area of the former swimming pool has settled which is the predominant cause of the more significant defects present at the rear left-hand side of the dwelling;
  2. [63]
    There is some difference of opinion between the Exerts such as Mr Van de Hoefs opinion the while the predominate cause of damage is related to subsidence, nevertheless he has expressed an opinion that a tilt to the slab is due to reactive clay with poor drainage being a contributing factor.  Mr La Monaca’s opinion is that any overall tilt is not significant and is consequently taken up by normal performance of the foundation system. The evidence about drainage from Morgan Consulting Engineers is supportive of the opinion of Mr La Monaca. Also, the Experts are not aware of any evidence that leaking site services have had impact to the dwelling to date and agree that articulation joints correctly or incorrectly installed do not cause footing system movement. The Experts gave oral evidence in cross examination during the Tribunal hearing as did the engineer from Morgan Consulting Engineering. The Tribunal accepts the evidence of Mr La Monaca and that from Morgan Consulting Engineers and prefers their evidence to that of Mr Van de Hoef in any arrears of disagreement between the opinions of the expert engineers.
  3. [64]
    In circumstances where there is a difference of opinion between the Experts the Tribunal accepts the evidence of Mr La Monaca and Morgan Consulting Engineers in preference to that of Mr Van de Hoef. The Tribunal also accepts the evidence in the Leakless Report. The Report from Mr Geoffrey Sanders of QBCC is subject to engineering advice and accordingly has to be considered with the JER where the Experts are in agreement and where there is a difference of opinion, in accordance with Mr La Monaca’s evidence and that from Morgan Consulting Engineers..
  4. [65]
    The Tribunal makes findings of fact as follows;
    1. the Greenslopes property consisted of soil which was highly reactive to moisture.;
    2. the stormwater drainage system constructed external to the perimeter of the building contained several defects but there was no evidence of water leaks from the stormwater pipes. The stormwater system did not have water leakage to the highly reactive nature of soil at the site;
    3. the movement of the building is caused by subsidence relating to placing of fill underneath the slab in the area where the former swimming pool was located;
    4. the movement of the slab was not caused by any defect in the stormwater system external to the building perimeter;
    5. the cracks and gaps in the walls of the home referred to in the Owner’s complaint dated 8 June 2018 to QBCC are a result of subsidence of the soil beneath the slab in the location of the previous swimming pool and are not caused by the stormwater system.
    6. The construction of the stormwater system did not contain two (2) articulation joints on the right hand side of the building, there was no evidence of joints at the base of downpipes and field gulleys on the right hand side were above ground level.  These matters did not cause any of the defects referred to in the Owner’s complaint dated 8 June 2018 to QBCC. .
  5. [66]
    The Tribunal is mindful of the objects of the QBCC Act to provide remedies for defective building work. However, the cracks and gaps in the walls of the building were caused by subsidence and are not related to the stormwater drainage system. The subsidence of the soil was a latent defect. In the context of issues in these proceedings the construction of the stormwater drainage system is not the cause of the Owners building defects in the complaint and cannot support the giving of a DTR to the Applicant... The Tribunal finds that on the evidence in these proceedings a DTR could not be given where the damage to the Owners building has been caused by  subsidence of fill beneath the slab.
  6. [67]
    In these proceedings the form of order is contained in s 24 of the QCAT Act. In the Application to review a decision filed on 12 February 2019 the Applicant when asked to describe what he wants to happen says that he is seeking the Decision to Rectify the works be removed and provided with an opportunity to present and explain his case. The Applicant has already had the latter of those matters afforded to him in the Tribunal Hearing. To “remove” the DTR requires the Tribunal to set aside the Commissions decision under review dated 11 January 2029. In the Tribunal decision in Peter Whalley Home Pty Ltd v Queensland Building and Construction Commission the following discussion (with footnotes deleted) was made in relation to setting aside a decision by the Commission;[53]

It is recognised that the Tribunal has previously found that a direction to rectify in a legal sense is not given solely for the benefit of the homeowner, but rather to ensure proper standards in the industry.

Notwithstanding that, there is a requirement for all reasonably relevant circumstances to be considered. There is also discretion conferred upon to the Tribunal that it is not required to issue a direction to the applicant if the Tribunal is satisfied that, in the circumstances, it would be unfair to the applicant for that direction to be given This requires the Tribunal to consider the justice of giving such a direction, and liberates it from giving a direction if it is satisfied that in the circumstances it would be unfair. Where that discretion is exercised unfavorably,the person affected has a right of review.

Both parties rely heavily on the opinions expressed by the respective experts. The opinions expressed or relied upon by each party about the quality or effectiveness of the building work, and whether it complied with the building code are completely opposite in regard to the essential elements of the matter. Quite succinctly outlined in the authorities discussed earlier, there is an overarching principle that when faced with competing expert evidence, commonsense should not be discarded.

In applying the principle which the court arrived at in Holtman v Sampson, I have given consideration to not merely to the expertise of the expert witnesses, but an examination was undertaken of their evidence about the building work to the external facade. I accept and prefer that opinions expressed by Mr Stennett and Mr McKenzie over those expressed by Mr McDonald and Mr Ferguson so far as compliance of the building work with the building code. In applying a logical, practical and commonsense approach to the circumstances of this matter, there has been no failure of the workmanship of the window that contravenes P2.2.2 of the building code.

Having reached that conclusion, I am the satisfied that the correct and preferrable decision is to set aside the QBCC’s decision made on 8 April 2016 to issue the applicant with a direction to rectify building work said to be defective or incomplete, and substitute that decision with the Tribunal’s own decision that in the circumstances, it would be unfair to give that direction.

  1. [68]
    In the exercise of the Tribunal’s discretion in these proceedings the circumstances and the evidence of both parties has been considered and a finding has been made that the defects which are the subject of the Owners complaint was caused by subsidence of the soil in the location of the former swimming pool. That is described as a latent defect. The Commission’s decision to issue the DTR was based upon a stormwater drainage system causing the defects about which the owner complained. Based on the Tribunal’s findings that is not the case. The Tribunal in reaching its decision and the findings made in these proceedings is satisfied that the correct and preferable decision is to set aside the Commission decision made on 11 January 2019 to issue the Applicant with a DTR in respect of building work which was said to be defective or unsatisfactory. The Tribunal will substitute its own decision that in the circumstances it would be unfair to issue a DTR to the Applicant in respect of the building work contained in the Owners complaint made to QBCC on 8 June 2018.

Orders

  1. [69]
    The Tribunal makes the following orders in these proceedings:
    1. The decision of the Queensland Building and Construction Commission made on 11 January 2019 to issue to VSC Corporation Pty Ltd a direction to rectify for defective stormwater and drainage system identified as defective work is set aside.
    2. The Tribunal substitutes the decision of the Queensland Building and Construction Commission made on 11 January 2019 with a decision that in the circumstances it would be unfair to issue a direction to rectify to the Applicant in respect of the building work contained in the Owners complaint made to the Queensland Building and Construction Commission on 8 June 2018.

Footnotes

[1]  See the Joint Experts Report paragraph 1 at page 916 of the Hearing Book.

[2] See the Joint Experts Report paragraph 1 at page 916 of the Hearing Book.

[3] See the Joint Experts Report paragraph 4 at page 917 of the Hearing Book.

[4] See the Joint Experts Report paragraph 1 at page 916 of the Hearing Book.

[5] Numerous other approvals and certification provided during construction are in evidence at page 120-248 of the Hearing Book.

[6] SOR 8.

[7] Statement of Vladimir Cosic of 3 September 2020 paragraph 12, 13 & 14 at page 909 of the Hearing Book.

[8] See the Report at page 623 of the Hearing Book.

[9] See the Report at page 622 of the Hearing Book.

[10] See the Report at page 622-623 of the Hearing Book.        

[11] See the Report at page 625 of the Hearing Book.

[12] See the Report at page 625 of the Hearing Book.

[13] See Statement of Mr La Monaca which does not exhibit the Report at “ELM-1”.

[14] See the Report at pages 662-664 of the Hearing Book.

[15] See the Joint Experts Report at page 916-930 of the Hearing Book.

[16] See the Joint Experts Report paragraph 5 at page 917 of the Hearing Book.

[17] See the Joint Experts Report paragraph 6 at page 917 of the Hearing Book.

[18] See the Joint Experts Report paragraph 5 at page 917 of the Hearing Book.

[19] See the Joint Experts Report paragraph A2 at page 918 of the Hearing Book.

[20] See the Joint Experts Report paragraph 6 at page 920 of the Hearing Book.

[21] See the Joint Experts Report paragraph 9 at page 921 of the Hearing Book.

[22] See the Joint Experts Report paragraph 10 at page 922 of the Hearing Book.

[23] See the Joint Experts Report paragraph 15 at page 923 of the Hearing Book.

[24] See the Joint Experts Report paragraph 17 at page 924 of the Hearing Book.

[25] See the Joint Experts Report paragraph 25 at page 926 of the Hearing Book.

[26] See the Joint Experts Report paragraph 26 at page 926 of the Hearing Book.

[27] See the Joint Experts Report paragraph 27 at page 926 of the Hearing Book.

[28] See the Joint Experts Report paragraph 33 at page 927 of the Hearing Book.

[29] See the Joint Experts Report paragraph 32 at page 927 of the Hearing Book.

[30] See the Joint Experts Report paragraph 38 at page 928 of the Hearing Book.

[31] See the Joint Experts Report paragraph 39 at page 928 of the Hearing Book.

[32] See the Joint Experts Report paragraph 40-50 at page 929-930 of the Hearing Book.

[33] See pages 969-976 particularly at page 976 of the Hearing Book.

[34] QCAT Act, s 9.

[35] QBCC Act, s 86(1)(e).

[36] Ibid, s 87.

[37] QCAT Act, s 19.

[38] Ibid, s 20.

[39] QCAT Act, s 24.

[40] QBCC Act, s 3(b).

[41] Ibid, s 71J.

[42] Ibid, s 72.

[43] Defined in Schedule 2 of the QBCC Act.

[44] Ibid.

[45] QBCC Act, s 72(3).

[46] JER paragraph 19 at page 95 of the Hearing Book.

[47] See Statement of Arnold Fisher paragraph 9 at page 960 of the Hearing Book.

[48] See the JER at paragraph 27 page 926 of the Hearing Book.

[49] See the JER at paragraph 46 page 929 of the Hearing Book.

[50] See the JER at paragraph 50 page 930 of the Hearing Book.

[51] See the JER at paragraph 8(A2) page 918 of the Hearing Book.

[52] See the JER at paragraph 49 page 930 of the Hearing Book.

[53]Peter Whalley Homes pty Ltd v Queensland Construction and Building Commission (2020) QCAT 454 at paragraphs 109 – 113.

Close

Editorial Notes

  • Published Case Name:

    VSC Corporation Pty Ltd t/as Kustom Homes v Queensland Building and Construction Commission & Anor

  • Shortened Case Name:

    VSC Corporation Pty Ltd t/as Kustom Homes v Queensland Building and Construction Commission

  • MNC:

    [2024] QCAT 72

  • Court:

    QCAT

  • Judge(s):

    Member Carrigan

  • Date:

    08 Feb 2024

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
Peter Whalley Homes Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 454
1 citation
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Cite 1 - [2020] QCAT 454

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