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Queensland Building and Construction Commission v Russell[2015] QCATA 57

Queensland Building and Construction Commission v Russell[2015] QCATA 57

CITATION:

Queensland Building and Construction Commission v Russell [2015] QCATA 57

PARTIES:

Queensland Building and Construction Commission

(Applicant/Appellant)

v

Cedric Ernest Russell

(Respondent)

APPLICATION NUMBER:

APL182-14

MATTER TYPE:

Appeals

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Senior Member O'Callaghan

Member Paratz

DELIVERED ON:

1 May 2015

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The application for leave to appeal and appeal is dismissed.

CATCHWORDS:

BUILDING DISPUTE – DIRECTIONS TO RECTIFY – where the Tribunal accepted the evidence of the builder over that of expert witnesses – when the Appeal Tribunal will interfere with findings of fact by the Tribunal – whether it is reasonable to order rectification by a builder – where a home-owner had not completed landscaping works, or conducted reasonable ongoing maintenance – when the Appeal Tribunal will interfere with an exercise of discretion

Queensland Building Services Authority Act 1991 (Qld), s 72

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142

House v R (1936) 55 CLR 499

Cachia v Grech [2009] NSWCA 232

Chambers v Jobling (1986) 7 NSWLR 1

Dearman v Dearman (1908) 7 CLR 549

Fox v Percy (2003) 214 CLR 118

Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388

JM Kelly (Project Builders) Pty Ltd v Queensland Building Services Authority [2013] QCAT 502

McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577

QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REPRESENTATIVES:

 

APPLICANT:

Queensland Building and Construction Commission represented by Mr G.I. Thomson of Counsel

RESPONDENT:

Cedric Ernest Russell represented by Shand Taylor Lawyers

REASONS FOR DECISION

  1. [1]
    Cedric Russell built a house in 2006 for a couple who subsequently separated. A complaint was made many years later to the QBCC by Sharon Taylor, the owner who remained in the house. The QBCC issued a Direction to Rectify defective building work, on 6 July 2011, to Mr Russell (‘the First Decision’).
  2. [2]
    Mr Russell filed an application seeking a review of the decision. An agreement was reached at a compulsory conference that Mr Russell would perform work at the house (‘the Compromise Agreement’). Mr Russell subsequently performed rectification works.
  3. [3]
    The QBCC considered that the rectification works were unsatisfactory. It gave Mr Russell notice to that effect dated 6 December 2012 (‘the Second Decision’). Mr Russell then filed a further application seeking a Review of that decision.
  4. [4]
    Both applications were heard together.
  5. [5]
    The evidence at the hearing at first instance revealed that there were difficult site issues, and responsibility issues involved in the construction of the house. The site is on the side of a hill. Extensive excavations were conducted to cut a house pad level at the front with the road. This resulted in the site being bounded on three sides by high earth faces. The owners intended to do much of the landscaping and paths themselves in order to save cost.
  6. [6]
    Many of the owners’ complaints related to the defects in the walls constructed along the side of the house. The wall on one side failed, and did not retain the slope behind it. Mr Russell denied that the wall was ever intended to be a retaining wall, and contended that it was built to allow the owners to easily pour a path against it between the wall and the boundary.
  7. [7]
    The learned Member accepted the QBCC’s contention that the block walls were intended to be retaining walls and that the works were defective.
  8. [8]
    Mr Russell alleged that Ms Taylor’s conduct in failing to carry out landscaping works and maintain the property led to the problems that have occurred.
  9. [9]
    In relation to the First Decision the learned Member found that although there were items of defective building work identified in the Direction to Rectify, it was not reasonable to direct rectification, and set the decision aside.
  10. [10]
    The learned Member set the Second Decision aside on the basis that the rectification works completed by Mr Russell were not directed by the QBCC and as such could not form the basis of a decision that ‘works undertaken at the direction of the QBCC were unsatisfactory’.
  11. [11]
    The QBCC has applied for leave to appeal or appeal the decisions.
  12. [12]
    The grounds of appeal are extensive. In essence they are that:
    1. a)
      The Tribunal erred in finding that it could not direct the rectification of the LHS retaining wall.
    2. b)
      The Tribunal erred in finding that the surface drainage works and masonry articulation were not defective.
    3. c)
      The Tribunal erred in the exercise of its discretion to not direct rectification.
    4. d)
      The Tribunal erred in its consideration of the Compromise Agreement and consequently in its decision to set aside the Second Decision.
  13. [13]
    The QBCC concedes that some of the matters complained of in its grounds of appeal are issues of fact, so that leave to appeal is required.[1]
  14. [14]
    It further submits that some of the matters complained of raise questions of law namely interpretation of aspects of the statutory scheme relating to directions to rectify, the interpretation of a written Compromise Agreement, and the making of findings in the absence of evidence to support them.[2]
  15. [15]
    We accept those grounds raise questions of law from which leave is not required.
  16. [16]
    The question whether or not leave to appeal should be granted is usually addressed according to established principles: Is there a reasonably arguable case of error in the primary decision?[3] Is there a reasonable prospect that the applicant will obtain substantive relief?[4] Is leave necessary to correct a substantial injustice to the applicant caused by some error?[5] Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?[6]
  17. [17]
    The issues in this Appeal are:
  • The First Decision
    1. a)
      Did the Tribunal err in not directing rectification of the LHS retaining wall?
    2. b)
      Did the Tribunal err in finding certain works were not defective?
    3. c)
      Did the Tribunal err in the exercise its discretion to refuse to order rectification of the works it found defective?
  • The Second Decision
    1. d)
      Did the learned Tribunal Member err in his consideration of the Compromise Agreement?
    2. e)
      Did the Tribunal err in setting aside the QBCC’s decision that the rectification works undertaken at the direction of the QBCC were not satisfactory?

Did the learned Member err in not directing rectification of the LHS retaining wall?

  1. [18]
    A Direction to Rectify dated 9 June 2011 was issued referring to the structural failure of the block retaining wall located on the LHS of the lower garage. This Direction was withdrawn and substituted with a further Direction dated 6 July 2011 specifying that the RHS retaining wall of the garage had failed.
  2. [19]
    It was found by the learned Member that the LHS retaining wall had failed and that RHS retaining wall was not defective.
  3. [20]
    The learned Member found that even though Mr Russell had carried out defective building work in not obtaining engineering design and approval for the construction of the LHS retaining wall, he would not confirm the decision to direct rectification of the retaining wall because the direction referred to the RHS wall and that side of the wall was not defective.
  4. [21]
    The QBCC say that the learned Member erred and should have directed rectification of the LHS wall on two bases:
    1. a)
      The learned Member should have concluded that the reference to RHS was erroneous and was in fact a reference to the LHS wall.
  5. [22]
    It says the evidence was against the finding of the learned Member that the change to RHS was purposive. It submits he should have found that the reference to RHS in the direction was erroneous and conclude that in those circumstances the direction to rectify should be confirmed.
  6. [23]
    We accept that it is the LHS retaining wall which has failed.
  7. [24]
    We do not consider however that the learned Member made an error in finding that he could not confirm a direction to rectify which referred to the rectification of the RHS retaining wall which all parties accepted was not defective.
  8. [25]
    It is not clear why the change was made from LHS to the RHS.
  9. [26]
    In circumstances however where there was a repeated reference to the RHS in the QBCC statement of reasons and no submission was made to the Tribunal that it should find that the reference to the RHS was simply a mistake, there is no error in the learned Member’s finding that he could not confirm that aspect of the direction to rectify.
    1. b)
      The QBCC say that even if it was not open to the learned Member to substitute RHS for LHS, he erred in not considering whether he should substitute his own decision to direct rectification of the LHS.
  10. [27]
    The QBCC points out that the issue of the defects in the LHS wall had been brought to the attention of the decision-maker prior to the decision to issue the direction to rectify. It says therefore the Tribunal standing in the shoes of the decision-maker on a fresh hearing on the merits, and on finding that the LHS wall was in fact defective, should have substituted a decision that rectification be directed of the LHS retaining wall.
  11. [28]
    We accept that this was a decision the learned Member could have made but we do not consider he erred in failing to make it.
  12. [29]
    The QBCC’s submission disregards the learned Member’s ultimate conclusion that even though certain works were found to be defective (including the LHS retaining wall) it was not reasonable in all the circumstances to issue a direction with respect to the defective work.
  13. [30]
    For the reasons set out below we do not think the learned Member’s exercise of discretion miscarried. In those circumstances we do not find the learned Member made any error in failing to direct rectification of the LHS wall.

Did the learned Member err in finding certain works were not defective?

  1. [31]
    The learned Member made findings of fact that the complaints as to the drainage, termite barrier and masonry articulation did not amount to defective building work. The QBCC seek leave to appeal the findings as to drainage and masonry articulation.
  2. [32]
    Findings of fact by a Tribunal will not usually be disturbed on appeal if the facts inferred by the Tribunal, upon which the finding is based, are capable of supporting its conclusions, and there is evidence capable of supporting any inferences underlining it.[7]
  3. [33]
    An appellate tribunal may interfere, however, if the conclusion at first instance is ‘contrary to compelling inferences’ in the case.[8]
  4. [34]
    The Direction to Rectify alleged that the site drainage and ground slope did not adequately divert surface stormwater away from the dwelling in accordance with BCA 3.1.2.3. The learned Member found as to the site drainage that:

[80] According to Mr Mauger, the drainage he installed was adequate until landscaping was performed. I accept the evidence from Mr Russell and Mr Mauger that the drainage work claimed to have been done was done. I conclude that as at the date of the end of construction, soil was graded to fall away from the footings as required by the BCA (and Standard AS 2870-1996 and the footing design). I do not conclude that the drainage work done was inadequate in terms of the requirements of the BCA and therefore defective building work.

  1. [35]
    The Direction to Rectify specified that masonry articulation had not been provided in accordance with engineering design or BCA requirements. At some stage someone had cut into the brickwork. Mr Russell denied that he had done so, and maintained that he had provided adequate articulation. The learned Member was not satisfied that there were building defects in this respect:

[102] I accept Mr Russell’s evidence. There is no evidence that he cut in any masonry articulation joint after (or during) construction. There is some photographic evidence showing articulation. I do not conclude masonry articulation has not been provided in accordance with engineering design or BCA requirements.

  1. [36]
    The QBCC submit, as to whether the surface drainage of the allotment was in place at the completion of the building works, that the learned Member should ‘not have so readily cast aside this joint finding of the expert witnesses in favour of the evidence of the respondent Mr Russell and his contractor Mr Mauger’.[9]
  2. [37]
    It is the task of the Tribunal at first instance to make findings of fact. The evidence of experts who are making hypothetical assessments after the fact may differ from the contemporaneous evidence of persons actually involved. It becomes a matter as to which evidence is preferred.
  3. [38]
    Which evidence is preferred is to be assessed in the circumstances of each particular case. There is no presumption that an expert, or even several experts in agreement, should necessarily carry greater weight than a builder who was actually involved in the works, if the Tribunal accepts the credibility of the builder.
  4. [39]
    It was open to the Tribunal to prefer the evidence of Mr Russell and Mr Mauger to that of the expert witnesses.
  5. [40]
    The QBCC submit that the learned Member had proceeded on an incorrect premise as to the masonry articulation by saying that the problem received very limited coverage in the Commission’s material. It identifies specific references by the Engineer, Mr Van de Hoef, in his report[10] and says the Member overlooked Mr Van de Heof’s evidence. This is not correct, his evidence is referred to at paragraph [100] of the reasons.
  6. [41]
    The learned Member was in any event not bound in making his finding as to the masonry articulation to accept the views of Mr Van de Hoef. The basic finding in this regard was that he accepted the evidence of Mr Russell that masonry articulation was installed, which was open to him to do.
  7. [42]
    As the hearing at first instance the learned Member had the opportunity to hear the evidence and decide the questions of fact. Findings of fact are only disturbed where there they are unsustainable.
  8. [43]
    In determining what work was defective the learned Member dealt carefully with the evidence.
  9. [44]
    There is no error in the learned Member’s consideration of these questions of fact. It was open to find that there was not defective building work as to the site drainage or masonry articulation. We are not persuaded that we should interfere with those findings of fact.

Did the Tribunal err in the exercise of its discretion to refuse to order rectification of works it found defective?

  1. [45]
    The learned Member found that Mr Russell carried out defective building work in that:
    1. a)
      He failed to obtain engineering design and approval for the construction of the retaining walls.[11]
    2. b)
      He failed to comply with Building Code with respect to the batters.
    3. c)
      He did not follow the footing design documentation in that the footings were constructed to a depth less than 600 mm.
  1. [46]
    He found however that it would be unreasonable to direct rectification in the circumstances including ‘the role played by the owners in contributing to their own misfortunes’.[12]
  1. [47]
    The learned Member found that the owner had not carried out landscaping and retaining works, and had not kept the seepage drains cleared of rubbish and mud. He also found that the owner was aware in November 2007 of problems with water entry and soil and mud build up resulting in damage to her property, but did not complain until March 2011. After considering in some detail the actions of Mr Russell in urging Ms Taylor to carryout maintenance and other work and her failure to do so,[13] he said that:

[117] I find that delay was in breach of the stipulations of the Rectification of Building Work Policy, and taken together with the failure of the owners to perform landscaping or retention works as agreed or perform even marginal maintenance in respect of the drainage left on site at the end of construction, makes it unfair and unreasonable to direct Mr Russell to rectify the identified defective building work.

  1. [48]
    The QBCC submit that the learned Member found at least three instances of seriously defective work that did not have their origins in problems with soil or water and as such must have had the conduct of Mr Russell as a root cause.[14]
  2. [49]
    They say the learned Member did not analyse how the problems with ‘soil and water caused by the owners failures contributed to these defects’.[15]
  3. [50]
    As Mr Russell points out, the learned Member did not find that the owner’s failures contributed to the defects. Instead he found that because of the owner’s failure (despite advise from Mr Russell as to the adverse consequences) to carry out the landscaping works and to maintain the property and the significant delay in making the complaint it was unreasonable to now direct Mr Russel to carry out the rectification work required.
  4. [51]
    The learned Member also found that the significant work undertaken by Mr Russell pursuant to the Compromise Agreement should also be taken into account, and firmed his conclusion that it was unfair and unreasonable to direct Mr Russell to remedy the identified items of defective building work.
  5. [52]
    Both parties accept that when an exercise of discretion is being challenged on appeal to succeed, an error must be demonstrated.[16]
  6. [53]
    The QBCC say the learned Member erred in that his findings about the owners’ role to play in relation to the problems with the property in that the finding was against the weight of evidence.[17]
  7. [54]
    We accept Mr Russell’s submissions[18] that this is not the case. Mr Russell gave evidence about the action of the owners. This was uncontested. The owner gave no evidence.
  8. [55]
    The QBCC also makes an overall submission that the conclusion is so manifestly unjust as to call for appellate intervention even if discrete errors could not be identified.[19]
  9. [56]
    Mr Russell disagrees. He says that in the circumstances it was entirely appropriate for the learned Member to exercise his discretion not to direct rectification.
  10. [57]
    The learned Member considered that the homeowners had not acted reasonably. He considered that if they had completed the landscaping works (including construction of retaining walls) within a reasonable time as they had proposed; and had conducted proper maintenance by keeping the drains clear and clearing debris, that the problems as to termite entry and pressure on the block walls, would not have occurred.
  11. [58]
    It is apparent that the homeowners have not conducted basic and necessary maintenance. There is an unexplained delay of years before a complaint was made to the QBCC. In that time the debris was piled against the wall of the house, and would at times have been saturated.
  12. [59]
    It is a matter of judgment as what is reasonable in any particular circumstance. The learned Member had the opportunity to hear the witnesses and form views as to how appropriate their actions were.
  13. [60]
    The exercise of discretion was considered in House v R[20] where Dixon, Evatt and McTiernan JJ said:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

  1. [61]
    We do not consider that the learned Member has failed to take any relevant facts into account, or to not have had due regard to the applicable law, or to have given a result that was unreasonable or plainly unjust. We do not see any basis to interfere with the learned Member’s discretion in his assessment as to reasonableness.

Did the learned Member err in his interpretation of the Compromise Agreement and consequently in making his decision to set aside the Second Decision?

  1. [62]
    QBCC claims that the learned Member misconstrued the effect of the Compromise Agreement.
  2. [63]
    The QBCC make lengthy submissions[21] as to how the Commission considers how the agreement should be construed. It says the error the learned Member made was that he found the agreement was ‘deficient as to the consequence should the Commission not be satisfied with the builders work’.[22]
  3. [64]
    We agree with Mr Russell that any finding about the construction of the Compromise Agreement in this respect (that is the status of the agreement if the work was not satisfactory) is not material to the issue that was actually before the Tribunal.
  4. [65]
    The issue was a simple one, that is, whether Mr Russell agreed to perform rectification works directed by the QBCC (so is to found a decision that the works were not satisfactory under s 86(1)(f) of the QBCC Act) or was he agreeing to perform works pursuant to his obligations under the Compromise Agreement.
  5. [66]
    The QBCC’s complaint is that because Mr Russell carried out rectification works it was ‘artificial’ for the learned Member to refuse to consider the question whether the rectification of work ‘is or is not of a satisfactory standard’ simply because he found the work was not undertaken at the direction of the QBCC.[23]
  6. [67]
    We disagree. The issue before the learned Member with respect to the Second Decision did not extend to whether the rectification of works were defective. It was rather the preliminary issue of whether, in the circumstances, a decision which encompassed a finding that ‘the works were carried out at the direction of the QBCC’ should be confirmed.
  7. [68]
    The learned Member found that the works were not carried out at the direction of the QBCC but rather in accordance with the Compromise Agreement and as such the decision should not be confirmed.
  8. [69]
    The QBCC complains that this finding leads to the undesirable result that if a builder performs rectification works in relation to a matter the subject of a direction to rectify for the purposes of a Compromise Agreement which ceases to be operative or with an express reservation that such works are carried out without admission, then the QBCC cannot make a decision under s 86(1)(f) that the rectification work ‘undertaken at the direction of the Commission is unsatisfactory’.[24]
  9. [70]
    In this regard we agree with Mr Russell that such a proposition is flawed and ignores the particular facts of this case. Here the direction to rectify was stayed and the agreement reached was that the work was done independently of the direction to rectify.
  10. [71]
    We also agree that in such circumstances the appropriate course would be for the QBCC to issue a fresh direction to rectify with respect to the rectification works.[25]
  11. [72]
    This would result in a new reviewable decision concerning the works carried out pursuant to the agreement.
  12. [73]
    Therefore we find no error in the learned Member’s finding that the Second Decision to the effect that unsatisfactory works had been carried out at the QBCC’s direction was incorrect and should be set aside.
  13. [74]
    The QBCC submitted in the alternative that if the learned Member was correct in finding that Mr Russell’s works was not undertaken ‘at the direction of the Commission’ then the Second Decision did not fall within s 86(1)(f) and QCAT had no jurisdiction to review it.
  14. [75]
    We agree with Mr Russell’s submissions that this argument is misconceived. A decision was in fact made by the QBCC that the work was undertaken at the direction of the QBCC and therefore that decision is reviewable.
  15. [76]
    The fact that the decision may have been wrongly made does not remove the jurisdiction of the Tribunal to review it.[26]
  16. [77]
    The learned Member made no error in setting aside the Second Decision which was wrongly made.

Conclusion

  1. [78]
    We find no arguable case of error in the learned Member’s findings. Even if we could, there is no reasonable prospect the QBCC would obtain substantive relief. There is no basis for the Appeal Tribunal to interfere with the learned Member’s exercise of discretion which ultimately determined the outcome of the application. The application for leave to appeal and appeal is dismissed.

Footnotes

[1] Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) s 142.

[2]  QBCC Submissions filed 26 June 2014 at [11].

[3] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.

[4] Cachia v Grech [2009] NSWCA 232 at 2.

[5] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.

[6] Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 at 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 at 578, 580.

[7] Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125 – 126.

[8] Chambers v Jobling (1986) 7 NSWLR 1 at 10.

[9]  QBCC Submissions filed 26 June 2014 at [52].

[10]  Ibid at [57].

[11]  Reasons at [42].

[12]  Ibid at [104] – [105].

[13]  Ibid at [105] – [117].

[14]  QBCC Submissions filed 26 June 2014 at [61].

[15]  Ibid at [63].

[16]  Mr Russell Submissions filed 23 July 2014 at [34].

[17]  QBCC Submissions filed 26 June 2014 at [65].

[18]  Mr Russell Submissions filed 23 July 2014 at [37].

[19]  QBCC Submissions filed 26 June 2014 at [67].

[20]  (1936) 55 CLR 499.

[21]  QBCC Submissions filed 26 June 2014 at [70]-[80].

[22]  Ibid at [80].

[23]  Ibid at [86].

[24]  QBCC Submissions filed 26 June 2014 at [82] – [84].

[25]  Mr Russell Submissions filed 23 July 2014 at [54].

[26] JM Kelly (Project Builders) Pty Ltd v Queensland Building Services Authority [2013] QCAT 502.

Close

Editorial Notes

  • Published Case Name:

    Queensland Building and Construction Commission v Cedric Ernest Russell

  • Shortened Case Name:

    Queensland Building and Construction Commission v Russell

  • MNC:

    [2015] QCATA 57

  • Court:

    QCATA

  • Judge(s):

    Senior Member O'Callaghan, Member Paratz

  • Date:

    01 May 2015

Appeal Status

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

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