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Quilkey v Tractile Combined Pty Ltd[2023] QDC 204

Quilkey v Tractile Combined Pty Ltd[2023] QDC 204

DISTRICT COURT OF QUEENSLAND

CITATION:

Quilkey & another v Tractile Combined Pty Ltd & others [2023] QDC 204

PARTIES:

STEVEN ROBERT QUILKEY AND Yukiko Nozaki

(Plaintiffs)

v

TRACTILE COMBINED PTY LTD ACN 627 772 212

(First Defendant)

v

TRACTILE PTY LTD ACN 142 809 381

(Second Defendant)

v

JASON DEAN PERKINS

(Third Defendant)

v

TRAC GROUP HOLDINGS PTY LTD ACN 115 007 540

(Fourth Defendant)

FILE NO:

BD No. 794/21

DIVISION:

Civil

PROCEEDING:

Claim

ORIGINATING COURT:

Brisbane District Court

DELIVERED ON:

21 November 2023

DELIVERED AT:

Brisbane

HEARING DATES:

13, 14, 15, 16, 17 and 27 February 2023

JUDGE:

Porter KC DCJ

ORDERS:

  1. Judgment is given for the plaintiffs against the first and second defendants for $177,645;
  2. Judgment is given for the plaintiffs against the first, second and fourth defendants for $203,274.88;
  3. The claims against the third defendant be dismissed; and
  4. The Court will hear the parties as to costs and the form of any other orders which might be required to give effect to these reasons.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – where the defendants carried on a business supplying and installing roofing products – where the plaintiffs engaged either the first defendant or the first and second defendant to supply and install a roof for their property – where the roof contained a solar power collectors – where the solar collection system included a system that used water to cool the solar panels, and thereby increase their efficiency – where, as part of the system, the water would be heated by the solar panels and the roof – whether the defendants’ roofing system required WaterMark certification as a result of a potential risk of contamination of drinking water – whether the failure to obtain WaterMark certification was a breach of the parties’ contract

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – where the roof was painted with a paint that was not safe, and was not certified as safe for the collection of drinking water – whether the defendants’ failure to use paint that was safe, and certified safe, for the collection of drinking water was a breach of the parties’ contract

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where the defendants were not licensed to carry out the building works under the contract – where the plaintiffs are entitled to restitution of the amounts paid under the contract under s. 42 of the Queensland Building and Construction Commission Act 1991 (Qld) – where the plaintiffs also claim damages as a result of breaches of the parties’ contract and in negligence and under the Australian Consumer Law – whether and how the restitutionary sum paid under the QBCC Act must be taken into account in assessing damages

LEGISLATION

Competition and Consumer Act 2010 (Cth) Sch 2

Corporations Act 2001 (Cth)

Queensland Building and Construction Commission Act 1991 (Qld) ss 42, 42B, 43, 43A, 51 and 51A

CASES

Body Corporate for Ocean Pacifique v Pugliese [2023] QCA 129

County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193

Cook’s Construction Pty Ltd v SFS 007.298.633 Pty Ltd (2009) 254 ALR 661

Marshall v Marshall [1999] 1 Qd R 173

O'Connor v SP Bray Ltd (1937) 56 CLR 464

Rankin v Scott Fell & Co (1904) 2 CLR 164

Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196

Williams v Stone Homes Pty Ltd [2014] QDC 64

COUNSEL:

P Travis for the Plaintiffs

S Hogg for the Defendants

SOLICITORS:

Aitken Whyte Lawyers for the Plaintiffs

Celtic Legal for the Defendants

Contents

Summary5

THE FACTS 5

The parties 5

The property 6

The Tractile roof 6

A Tractile roof for the house 7

Work under the Tractile contract19

Delay in obtaining a Form 21 22

Overview 22

The WaterMark certification 22

The structural and installation certification issues24

The SRRC’s position from mid-202025

The Fraser-Lever report26

After practical completion29

THE WITNESSES31

The plaintiffs31

Mr Sander32

Mr Perkins33

Mr Terpstra36

THE INTENDED USE ISSUE37

THE RESTITUTIONARY CLAIMS 38

Breach of s. 42(1) QBCC Act 38

Restitutionary claim39

Plaintiffs can sue on the Tractile contract 40

THE TRACTILE CONTRACT 41

Proper construction41

The parties to the contract 41

Certification as safe to collect drinking water 42

Breach of contract: tiles not certified for collection of drinking water48

Breach of contract: WaterMark certification ... 50

Context 50

The issue51

WaterMark certification was required 52

Breach of contract: Failure to supply and install hardware54

Damages for breach55

Summary of heads of damage55

The rectification damages 56

Loss of use of the house59

Conclusion on damages 61

LIABILITY OF TRAC GROUP AND TRACTILE P/L: ACL61

Trac Group 61

Tractile P/L 65

NEGLIGENCE66

BREACH OF STATUTORY DUTY66

Summary 66

Pleaded Case66

CONCLUSION70

SUMMARY

  1. [1]
    The plaintiffs contracted for the installation of an integrated solar roofing system called the Tractile roof system.  They allege that the Tractile system was not certified safe for collection of drinking water and not certified for use in heating hot water for domestic use.  They allege that as a consequence the first and second defendants breached the contract.  They also allege that those circumstances gave rise to damages against the first, second and fourth defendants under the Competition and Consumer Act 2010 (Cth) Sch 2 (ACL). They also allege that none of the defendants held the necessary licence to carry out the work under the contract.
  2. [2]
    The plaintiffs claim recovery of funds paid under the contract, as well as damages for the cost of removing the Tractile roof and installing a roof which could safely collect rainwater for drinking, damages for loss of use their new house until the new roof was completed and damages for distress.
  3. [3]
    The defendants’ contend that no legal obligation arose to deliver a system which was safe for the collection of drinking water and that the Tractile system otherwise did not require any certification for its solar water heating system.  They do, however, concede that no relevant building license was held by the parties to the contract and that the plaintiffs are entitled to restitution of the funds paid under the contract.  No counterclaim for restitution was properly advanced.
  4. [4]
    For the reasons which follow, I find that the plaintiffs are entitled to damages in the amount of $203,274 for breach of contract against the first and second defendants and to damages of the same amount for breach of warranty under the ACL against the first, second and fourth defendants.  I find the plaintiffs are also entitled to restitution of $177,645 from the first and second defendants.  I dismiss the claim against the third defendant.

THE FACTS

The parties

  1. [5]
    Mr Steven Quilkey owns 8 acres of land situated at 238-244 Long Road, Tamborine Mountain (the property).  Ms Yukiko Nozaki and Mr Quilkey are married.  The property is located in the Scenic Rim Regional Council (SRRC) area.
  2. [6]
    The first defendant, Tractile Combined Pty Ltd (Tractile Combined) and the second defendant, Tractile Pty Ltd (Tractile P/L) are companies associated with the supply and installation of Tractile products.  The fourth defendant, TRAC Group Holdings Ltd (Trac Group) owns 67 of the 100 shares in Combined and all the shares in Tractile.  The third defendant Mr Perkins and Mr Swibertus “Bertio” Terpsta have been directors of Combined, Tractile P/L and Trac Group since at least 26 July 2018.    

The property

  1. [7]
    In around the mid-1990s, Mr Quilkey was working as an airline pilot flying out of Singapore and Ms Nozaki was working as a diplomat representing the Japanese government.  They met water skiing at Singapore’s answer to the Gold Coast, Sentosa Island.  Mr Quilkey and Ms Nozaki married some 30 years ago.  They had a mutual interest in climate change issues.  They had frequently discussed retiring to live on acreage after many years in apartments in Asia.  In 2001, they purchased the property.  At the time they purchased the property, it was vacant apart from a shed.  They planned ultimately to build and retire to the property. 
  2. [8]
    They made some improvements to the property.  They installed two 45,000 litre water tanks near the boundary.  Those tanks were mostly underground, showing only one metre above the ground.  That water was for domestic use and for watering.  There was and is no mains water nor sewage at Tambourine Mountain.  The property had a bore but it was unreliable and required frequent testing if it was to be used for domestic uses.  The plaintiffs have never used bore water for domestic uses.  They planted extensively to reforest the site.  They also built a demountable cottage on the property.
  3. [9]
    Planning for building a house started in about 2016 or 2017, when Mr Quilkey began working one month on and one month off.  In about 2017, Mr Quilkey and Ms Nozaki started the design and documentation process for their house.  The design was developed initially by Ms Nozaki.  It is fair to describe it as an impressive home.  A building draftsman prepared building plans from the sketches (Mr Wotton of Tambourine Mountain Building Design) and an engineer was retained for structural work.  Mr Darren Sander was selected as the builder based on his work on a local project.  His building company was Remiche Pty Ltd.

The Tractile roof

  1. [10]
    The Tractile roof is designed to provide solar power, solar heated hot water, insulation and roofing integrated into a tiled roof which does not have a traditional solar array.  Rather, the system integrates the photo voltaic modules into solar panel roof tiles which can be laid as part of the roof and integrated into the most convenient section of the roof for solar collection.  The solar roof tiles are laid alongside ordinary Tractile roof tiles. 
  2. [11]
    The solar roof tiles also incorporate piping which acts as a heat exchanger, cooling the solar tiles (and thereby improving their efficiency according to Tractile) and removing heat from the roof of the house.  The water running through the pipes is heated and that solar heated water is used to heat water for use in the home.  The solar heated water is not used directly.  Rather, other water passes through metal coils located in a heat exchange tank filled with the solar heated water.  
  3. [12]
    Accordingly, the Tractile roof can provide solar electricity and solar heated hot water.  To make use of those outputs, specific hardware is required.  For the solar power, an inverter is required and a battery may be added.  To make use of the solar heated water, a heat exchange tank is required.  In this case, a Rotex tank was to be installed.
  4. [13]
    A Rotex tank can accommodate different sources of water to be heated by contact via metal coils with the heated solar water in the tank.  For the plaintiffs, the purposes for the water to be heated in the Rotex were underfloor heating, pool water heating and domestic hot water.   Each source of water was to pass through a separate metal coil in the Rotex tank.
  5. [14]
    The two principal complaints about the Tractile roof system made by the plaintiffs in this proceeding relate to the paint used on the roof tiles and the solar heated water system:
    1. As to the former, the plaintiffs allege that the paint on the roof was not certified safe for collection of drinking water.  This did not emerge as an issue until the defendants revealed that the paint used was not safe for drinking run off in an amended defence in November 2021.
    2. Prior to that time, the principal complaint was that the solar heated water system was not certified safe for use in heating water for domestic consumption. 

A Tractile roof for the house

  1. [15]
    As part of the design process, the plaintiffs were looking for a solar power and heating solution.  Mr Quilkey was interested in something other than the usual solar array on the roof and while searching came across the Tractile product.[1]   On 10 September 2017, he sent an email inquiry to Tractile.  After referring to the project to build the house and its location, Mr Quilkey wrote:[2]

…we are searching for roofing solutions.  We are hoping to be “off-grid” and certainly as sustainable, yet stylish, as possible.

  1. [16]
    On 12 September 2017, Mr Terpstra responded providing “attached further information about Tractile The Smarter roof”.[3] Attached was a series of documents headed Tractile Eclipse which focused on particular characterises and features of the roof and the tiles.  The first document has the subheading “Roof Features”.  After introductory comments it sets out a table that relevantly provides:

Tractile Eclipse

Roof Features

Drink water

Safe

The Tractile Eclipse material is non-toxic and in combination with a drink water safe paint, rain water can be safely collected.

  1. [17]
    At about the same time, the third defendant (Mr Perkins) sent an email to the plaintiffs’ house designer Mr Wotton with detailed information about the Tractile product.  This document was provided to the plaintiffs by Mr Wotton.  The covering email from Mr Perkins described the documents as Tractile Product Posters.  That description did not do justice to the detail included.[4]
  2. [18]
    Attached were four pages provided in .PDF format.  They were designed to be viewed in hard copy in A0 size pages.  It is evident that the reason for the large original sizing was that the four sheets showed, in actual size, the top and underside of the two kinds of tile supplied by Tractile.
  3. [19]
    The first and second pages show the front and back of a Tractile Eclipse Solar Roof Tile (the Eclipse solar tile).  Across the top of the first sheet (which shows the front of the Eclipse solar tile) are images of the various different kinds of Eclipse roof tiles.  Under that is a series of specifications and technical particulars of the Eclipse solar tile. 
  4. [20]
    On the second sheet (showing the back of the tile), there is a banner across the top of the sheet showing diagrammatically the different formats for inclusion of the Eclipse solar tile in a Tractile roof.  Under that appears the heading Frequently Asked Questions, with questions and answers given.
  5. [21]
    The third and fourth sheets show the front and back of a Tractile Eclipse Roof Tile (the Eclipse roof tile).  The third sheet has the same banner showing the different styles of Eclipse tile.  Under that banner is another series of specifications and technical particulars relating to the Eclipse roof tile.  It relevantly provides:
  1. (a)
    Under the heading “Roof Colours”:
  1. A Tractile Eclipse roof is painted in factory or on site. Customers can select any colour as well as specialist coatings.
  1. Tractile Eclipse material can withstand UV exposure, however, as with any product exposed to the sun long term UV damage can occur over time, but will be aesthetic and not structural.
  1. Tractile parts are painted to maximise durability. Paint companies warrant their paint for 10 years to 40 years. For large orders UV additives and pigments can be included into the material. However, this alters the chemistry of the material and requires a customised product formula to maintain strength.
  1. (b)
    Next to that text, are four circular colour swatches, including a dark grey called “Monument”;
  1. (c)
    Under the heading “Materials”:
  1. Tractile roof tiles are made from composite materials (fibre reinforced thermoset resin) that provide the following properties: lightweight, high-strength, high impact, resistance, fire retardant, non-toxic, non-electrically conductive and resistant to a wide range of chemicals.
  1. Tractile is suitable for coastal areas within 100m of breaking surf and is rated to Bushfire Alarm Level 40 (BAL40).
  1. [22]
    The fourth sheet has the same banner of roof designs as the second sheet.  Under that again are a list of “Certifications” including many Australian Standards.  One Australian Standard specified is AS2049:2002, which concerns roof tiles.  As will be seen, clause 4.6 of that standard requires the surface of roof tiles which collect rainwater to be non-toxic. 
  2. [23]
    Thereafter is once again a series of Frequently Asked Questions which relevantly include:
  1. Why is a Tractile roof different?
  1. Tractile uses modern materials and technologies to provide a better functioning roof.
  1. What are the functional benefits of a Tractile roof?
  1. High performance roofing system
  1. Installation is fast and easy
  1. Lightweight construction
  1. Low maintenance
  1. Solar power for electricity and heated water
  1. Connect to battery energy storage systems
  1. Can Tractile be installed in high wind areas?
  1. Yes. Tractile is designed for strength and its batten-hook system can withstand Category 5 cyclone (wind speeds over 380km/h).
  1. Can Tractile be installed in bush fire areas?
  1. Yes. Tractile has BAL-40 certification. This is the highest rating for residential buildings in bushfire prone areas.
  1. Can Tractile be installed in coastal areas?
  1. Yes. Tractile is made from a composite materials (sic) that are resistant to corrosion from salt water.
  1. Can Tractile withstand hail stones?
  1. Yes. Tractile is designed for strength. The non-solar tiles can withstand 65mm hailstones. The Eclipse solar PV glass can withstand 30mm hailstones.
  1. Can a Tractile roof be walked on?
  1. Yes. Tractile can safely withstand point loads of 250kg, which is equivalent to two people with tools.
  1. Can thieves enter my house by lifting tiles on a Tractile roof?
  1. No. Tractile is a secure roofing system with tiles held down by the ‘hook & batten’ fixing system. Unlike traditional riled roofs that allow thieves to easily lift tiles and gain access to the roof cavity and then enter the house.
  1. Can Tractile parts be cut or drilled on site?
  1. Yes. Tractile parts can be cut and drilled with standard tools as required.
  1. Can a Tractile roof be used to collect rainwater for safe drinking?
  1. Yes. The composite material is safe for drinking water collection. We work with Dulex who provide several non-toxic paint systems that are safe for rainwater collection.
  1. […]
  1. Where is the Tractile roof made?
  1. Tractile products are made in our manufacturing facility in Malaysia.
  1. [24]
    On the top left corner of the first and third sheet appears the following [5]:
  1. Quilkey v Tractile Combined Pty Ltd [2023] QDC 204
  1. [25]
    The four sheets together contain detailed specifications for the Eclipse tiles (the specifications).  They present as professionally prepared and comprehensive.  In my view, it is fair to characterise those documents as specification for the Eclipse tiles.  The following is objectively communicated by the specification:
    1. The Tractile roof can be safely used to collect rainwater for drinking.  
    2. The Tractile roof tiles are safe for collecting rainwater for drinking because they are constructed of material that is safe for drinking water collection and they are painted with Dulux paint which is safe for that purpose;
    3. The Tractile roof meets the requirements of AS2049:2002;
    4. The Tractile roof tiles can be painted in any colour including, relevantly a dark grey paint described as Monument;
    5. Reading (a) to (d) together, the specification objectively communicates that the roof can be painted any colour including Monument and retain its safe-drinking water status.
  2. [26]
    In my view, the specification cannot be read as objectively communicating that a Tractile roof will only be safe to collect drinking water if a customer chooses a non-toxic paint.  Mr Quilkey gave evidence that he reviewed the specification and particularly noted the comments as to safety for collecting drinking water.  He said this was important because (TS1-17):

..we’d already installed two 45,000 litre tanks for rainwater collection, because that is what we needed for domestic uses; for drinking, bathing, et cetera.  So if the water that came off the roof was undrinkable, well, it negates the whole - you know, it negates everything we’d done, and where would we get our water from?  You know, get bottled - bottled water for the rest of our life wouldn’t be much - much fun, and besides, the council would never approve the place anyway.

  1. [27]
    In that regard, also relevant is the content of the website at relevant times leading up to entry into the contract.  On January 16, 2018, the website www.tractile.com.au (the Website) under the folder “/faqs” stated the following:
  1. Can a Tractile roof be used to collect rain water for safe drinking?
  1. Yes. The composite material is safe for drinking water collection. We work with Dulux Paints who provide several non-toxic paint systems that are safe for rainwater collection.
  1. [28]
    The plaintiffs had a meeting with Jason Caruana, the sales manager for Tractile, on or about 23 October 2017.  Nothing of substance appears to have occurred at this meeting.  However, by this time, the plaintiffs had decided to proceed with the Tractile roof because they saw it as a good technical and aesthetic solution to the questions of hot water, solar power and water collection.  Their consultants continued to work towards incorporating a Tractile roof into the construction of the house.  One decision made early was that the roof would be dark to minimise the visibility of the Eclipse solar tiles.  Mr Quilkey gave that evidence but it is confirmed by contemporaneous email correspondence sent to Mr Wotton on 15 November 2017.[6]
  2. [29]
    Also on 23 October 2017, the plaintiffs provided Tractile with the then current design drawings produced by Mr Wotton and on 17 November 2017, Tractile provided a design for Tractile tiles and roof take-off based on those plans.[7]  In December 2017, the design drawings were at a stage where they could be provided to Mr Sander to begin working up the price for the works.  
  3. [30]
    The Development Approval was granted by SRRC on 16 May 2018, including approved plans for the house.  An amended version was produced in September 2018 with minor changes.  Each iteration of the plans contemplated a Tractile roof as seen on each version of the roof frame plan. That drawing also include these notes “Connect to water tanks with RW heads. Minimum water storage 45,000 lt”.[8] There was no suggestion at trial that the approved plans differed materially from the version provided initially to Tractile in October 2017, nor that they changed materially thereafter.
  4. [31]
    On 27 November 2018, the plaintiffs entered into a written contract with Remiche for the construction of the house (the building contract).[9]  The building contract was a bespoke agreement, though it incorporated by reference the then extant version of the “BSA Agreement” (presumably the QBCC standard form new home construction contract).  None of the terms of the “BSA Agreement” were in evidence.
  5. [32]
    The building contract provided, broadly, for a lump sum management fee for the builder of $225,000 based on a cost estimate in the contract of $1.36m, (excluding the management fee).  It appeared to contemplate many of the “subcontracts” for the work to be entered into by the owners directly.  The building contract also contained a construction schedule which contemplated earthworks starting October 2018 and a “final walk-through inspection” on 30 November 2019.  The construction schedule contemplated a Form 21 Certificate of Occupancy being obtained prior to that date.  It did not include a Date for Practical Completion.     The building contract assumes substantial co-operation between the parties and reflects trust and confidence between them.
  6. [33]
    The cost estimate in schedule 3 has an item for roofing which identifies Tractile as the subcontractor/supplier and an estimated cost of $165,000.  It is unclear on the evidence when the estimate was provided by Tractile, but it is reasonable to assume it was provided at some stage prior to October 2018.  
  7. [34]
    It appears that prior to October 2018, the plaintiffs were dealing with Mr Caruana or Mr Terpstra at Tractile.  On 25 October, Mr Perkins enters the fray.  He sends the plaintiffs an email telling them Mr Caruana had left Tractile and that “due to the size and importance of” the project, Mr Perkins wanted to handle it personally.  Mr Perkins introduced himself as a director.  There followed an exchange of emails on technical issues which resulted in Mr Perkins visiting the site on about 8 November 2018.  The events of that meeting are contested.  It is sufficient to note that Mr Perkins met Mr Quilkey and inspected the plans, the site and the property.[10]  They also must have had some technical discussions about some of the hardware required to make use of the Tractile roof, including the Rotex tank and the inverter and batteries because on 12 November, Mr Perkins sent an email with information about those items.  
  8. [35]
    After that meeting, Mr Perkins informed Mr Quilkey about a Tractile roof and supporting system of a similar kind to that contemplated for the house being built in Adelaide and asked Mr Quilkey if he wished to visit and inspect.  Mr Quilkey agreed.  In late November 2018, Mr Quilkey and Ms Nozaki along with a friend went to inspect that house.  Mr Perkins was present along with about six tradespersons working on the roof.
  9. [36]
    The allegations in the amended defence filed 25 November 2021 about what was discussed at this meeting were hotly contentious in the pleadings: see paragraph [92] and went to the heart of the Tractile defence on the drinking water issue.  However, the defendants’ case did not come up to proof (see paragraphs [112] to [115] below).  Despite the terms of the defence, it is now uncontentious that:
    1. There was a discussion in Adelaide about the colour of the paint on the tiles being used and likely the name of that colour, Monument, was raised.  The plaintiffs liked the colour used and told Mr Perkins that was their colour choice; and
    2. There was general discussion about the system being installed and the specifications for the solar electricity and solar hot water output for the house.  
  10. [37]
    Following the Adelaide meeting, the plaintiffs received revised options for quotations from Mr Perkins with the particulars of two proposed systems for the house as follows:

Thank you again for visiting Adelaide and seeing the installation at Marino.

As discussed onsite we are finalising a quote for your roof including:

  • 10kw PV panels
  • 1 x 10kw 3 phase SOLAX inverter
  • 2 x 6.3kwh TRIPLE POWER Battery modules (12.3kw hour Battery Storage)
  • 500 litre ROTEX tank with 14.4kw heating element, hydronic loop, pool heating loop, domestic hot water loop.

We can now do a second additional quote for:

  • 20kw PV panels
  • 2 x 10kw 3 phase SOLAX inverter
  • 2 x 6.3 kwh TRIPLE POWER Battery modules (12.3kw hour Battery Storage) [**Do you want more batter storage with larger PV?**]
  • 500 litre ROTEX tank with 14.4kw heating element, hydronic loop, pool heating loop, domestic hot water loop.

I have asked Bertio to be involved in preparing and issuing the new quotes and we expect to provide these shortly.

  1. [38]
    On 4 February 2019, Tractile provided a quotation for the former option.  That quotation was accepted in writing by Mr Quilkey on 6 February 2019.  It is not in dispute that this gave rise to a binding contract in writing (the Tractile contract).  The issues in dispute relate to the terms of the contract and the Tractile entities which are parties to it. 
  2. [39]
    The Tractile contract tendered comprises a six-page bespoke quotation (the quotation) along with 3 printed pages of terms and conditions (the standard terms).
  1. [40]
    The quotation had the following header[11]:
  1. Quilkey v Tractile Combined Pty Ltd [2023] QDC 204
  1. [41]
    The logos of Tractile and Combined Roofing Australia appear on every page of the quotation and standard terms. The stylised “T” logo is owned by Trac Group.[12]
  2. [42]
    The quotation relevantly provided:
  1. (a)
    By its introductory words:
  1. Dear Steve and Yuki,
  1. Thank you for your request for formal quotation for Tractile, the designer roofing solution that incorporates electricity, hot water and lightweight composite roof tiles into your roof structure.
  1. Your project at 238 Long Road Tamborine Mountain, QLD 4272 is an exciting opportunity to include the Tractile solar roof…
  1. A Tractile roof is the perfect solution…
  1. [emphasis added]
  1. (b)
    Under the heading “Performance”:
  1. Tractile’s innovative technology circulates water through the solar tiles, cooling the system…This technology delivers the additional benefit of pre-heated hot water, adding to the pay back on your roof…
  1. The pre-heated hot water is boosted for your domestic consumption and can also be used for in-floor and pool heating.
  1. (c)
    Under the heading “Your Requirements”:
  1. It is our understanding you require quotation for the supply and installation of Tractile solar roofing system. Based on past discussion we understand you require in short:
  • Supply and install 703 square meter Tractile roof with the following options:
    • 10.0 kWp integrated Tractile solar roof tiles
    • 12.6 kWh battery system
    • 500 litre ROTEX tank with 14.4 kw heating element, hydronic loop, pool hearing loop, domestic hot water loop.
  1. (d)
    Under the heading ‘Scope of Work & Contract Price”:

Your roofing project includes supply and install of the Tractile roofing system:

  • To supply and install Proctor breathable sarking to the entire roof area.
  • To supply and install custom made galvanised battens as required.
  • To supply and install Tractile Eclipse roof tiles or similar detail to the entire roof area.
  • To supply and install Tractile Eclipse Ridge tiles or similar detail as required.
  • To supply and install Tractile Eclipse Barge or similar detail tiles as required.
  • To supply and install Tractile Eclipse Hip tiles or similar detail as required.
  • To supply and install Tractile Eclipse Endcaps or similar detail as required.
  • To supply and install all galvanized fixings as required to complete the project to standards.
  • To supply and install Tractile Eclipse PV roof tiles with built in water heating system to achieve the required solar PV capacity of 10.0 kWp.
  • To include copper U link pipe and Shark Bite hot water connectors as required.
  • To charge tiles with water and pressure test.
  • To connect solar electrical cables and MC4 connectors.
  • To supply and install premium 3 phase hybrid inverter with remote metering (see brochure attached) and battery system with 12.6 kWh storage.
  • To supply and install 500 litre ROTEX tank with 14.4 kw heating element, hydronic loop, pool heating loop, domestic hot water loop.
  • To remove all related debris from site.

PRICE

Sub-Total    $213,758.81

Discount for Marketing  -$28,758.81

Total    $185,000

GST    $18,500

Total Price   $203,500.00 (Contract Price)

The Tractile roof will be installed with our national Tractile installation partner Combined Roofing Australia Pty Ltd. Combined Roofing has 30+ years experience in the roofing industry including recently reroofing St Mary’s Cathedral in Sydney.

Please note, site preparation requirements prior to Tractile installation:

  • 60spm meter (sic) flat and secured on site storage area for 40 pallets with Tractile parts upon delivery and during installation.
  • Storm water protection for roofs with a pitch of less than 10 degrees.
  • For new builds sufficient DC wires to be wired in conduit as per cabling requirement and roughed in from meterbox location to the ridge of the solar roof area. (Note you have provisioned future expansion of PV system for additional 10.0 kWp on North wing and additional 20.0 kWp on Southern wing.
  • For new builds sufficient insulated copper piping for flow and return lines of solar thermal hot water from roof to hot water tank location(s).

Payment Schedule (schedule 1):

1st payment: $1000.00 design and/or site visit fee. This fee has been waived.

2nd payment 10% deposit to confirm your order and book installation.

3rd payment: 70% due prior to materials arriving onsite.

4th and final payment of outstanding balance due on completion of works.

Invoices will be issued for each payment.

  1. (e)
    The following page has the heading “Acceptance Form”.  As executed it appeared as follows[13]:
  1. Quilkey v Tractile Combined Pty Ltd [2023] QDC 204
  1. [43]
    The standard terms relevantly provided by clause 4:
  1. (a)
    This quotation may be accepted by the Client completing and returning to CRS within the 30 days period referred to in above 1. Period of Quotation and Acceptance Form.
  1. (b)
    Subject to and conditional upon the Client completing and returning to CRS within the 30 days period referred to in above 1. Period of Quotation and Acceptance Form and CRS accepting the Acceptance Form evidenced by the signature of a director of CRS endorsed upon the Acceptance Form, a Contract shall exist between CRS and the Client and the following terms and conditions shall apply to the Contract between CRS and the Client (Contract Terms and Conditions).
  1. [44]
    Under the heading Contract terms and Conditions, the standard terms relevantly provided:
  1. (a)
    By clauses 1 to 3:
  1. 1. Plans and specifications
  1. 1.
    All Plans and Specifications for work to be done under this contract, including any variations to those Plans and Specifications, are taken to form part of this contract.
  1. 2.
    Any agreement to vary this contract, or to vary the Plans and Specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract.
  1. 2. Quality of construction
  1. All work done undertaken (sic) by CRS under this contract will comply with:

1. (a) The Building Code of Australia to the extent required under the Environmental Planning and Assessment Act 1979 (including any instrument made under that Act);

  1. (b)
    all other relevant codes, standards and specifications that the work is required to comply with under any law;

   (c) the conditions of any relevant development consent or complying development certificate and any construction certificate.

  1. This contract shall limit the liability of the CRS for a failure to comply with (1) if the failure relates solely to:

   (a) a design or specification prepared by or on behalf of the Client or provided to CRS by the Client (but not by or on behalf of CRS), or

   (b) a design or specification required by the Client, if CRS has advised the Client in writing that the design specification contravenes (1).

3. Payment by Client

The Client must pay the Contract Price in the manner shown in the Payment Schedule… 

  1. By clause 11, relevantly:

11. Warranties

  1. CRS warrants that:
  1. the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;
  1. all materials supplied by CRS will be good and suitable for the purpose for which they are used and, unless otherwise stated in the contract, those materials will be new;
  1. the work will be done in accordance with, and will comply with, the Home Building Act or any other law;
  1. the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time;
  1. if the work consists of the construction of a dwelling, the making of alterations or additions to the dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling;
  1. the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the Client expressly makes know to CRS or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of CRS, the particular purpose for which the work is required or the result that the Client desires the work to achieve, so as to show that the Client relies on CRS’s skill and judgment.
  1. Under the heading “Interpretation and Definitions”, relevantly:

CRS means Tractile Combined or its appointed contractor(s);

Payment Claim means a written claim for payment by CRS pursuant to clause 3;

Plans means the Plans particularised in Schedule 1 under the heading Contract Documents;

Specifications means the Specifications particularised in Schedule 1 under the heading Contract Documents.

  1. [45]
    There is a footer located on each page of the quotation and the standard terms which states: 

PLEASE READ THIS QUOTATION AND CONDITIONS CAREFULLY AS ONLY THE WORKS LISTED WILL BE CARRIED OUT.

ACCEPTANCE OF THIS QUOTATION IS ALSO AGREEING TO THE TERMS AND CONDITIONS OF TRACTILE COMBINED PTY LTD

  1. [46]
    The Tractile contract:
    1. Does not include any definition or document providing meaning for the words “Tractile Eclipse roof tile”, “Tractile Solar Eclipse PV roof tile” nor any other described roof tile;
    2. For the purposes of the definition of Plans and Specification, has no heading “Contract Documents” in Schedule 1 of the contract (which refers only to the Payment Schedule), nor is there any Plans or Specifications attached to the Tractile contract; and
    3. Has no specific definition in the Tractile contract of “Tractile Solar roofing system”, “Tractile roofing system”, “Tractile solar roof”, “Tractile roof” or “Tractile Solar Solution” although some characteristics can be inferred from the text of the quotation.
  2. [47]
    The entities on the Tractile side of the Tractile contract are variously described as:
    1. Tractile (see extract from quotation headed “Performance”);
    2. Tractile Combined Pty Ltd (see heading to quotation, footer to quotation and definition of CRS in the standard terms);
    3. “Combined Roofing Australia” (see logo heading on each page);
    4. Combined Roofing Australia Pty Ltd described as “our national Tractile installation partner” in the quotation under the heading Price; and
    5. Tractile Pty Ltd described as “Contractor” in the Acceptance Form. 

Work under the Tractile contract

  1. [48]
    Much of the evidence from the plaintiff’s side as to the performance of the work under the Tractile contract and the difficulties of obtaining the Form 21 Certificate of Occupancy comes from Mr Sander.  The following findings about events relating to those matters are based substantially on his evidence and the documents to which he refers.  For reasons I explain at paragraph [110] below, I accept his evidence as credible and reliable.
  2. [49]
    The construction of the house seems likely to have begun in about March 2019, perhaps a little earlier.  By June 2019 at the latest, the house was ready for the commencement of the roofing works under the Tractile contract.
  3. [50]
    The Tractile contract contained no fixed construction period.  However, the Tractile contract required Tractile to perform the work within a reasonable time.  A reasonable time for installation of the roof can be broadly inferred from a statement on the Tractile website which indicated that installation of a new roof of 200m2 takes about 2-3 days with a “skilled three-person crew”.  Even doubling the time for installation to allow for the novel aspects of the house results in a week or two.  
  4. [51]
    Although precise dates are unclear, the time taken to install the Tractile roof was much longer than that.  It appears not to have been completed until about October 2019, many weeks after the work began.  Mr Sander was present every day of the works on the house.  I accept his description of what occurred during this period of delay.  The work was delayed for at least two principal reasons. 
  5. [52]
    First, there was no skilled three-person crew carrying out the installation.  Rather, the installation process was a shambolic both practically and from a compliance perspective.  The work was done primarily by a single worker, described in the evidence as Jedd.[14]  From time-to-time Mr Perkins and Mr Terpstra came to site to assist Jedd.  On an early occasion, Mr Sander asked Mr Perkins and Mr Terpstra whether they had a white card.  They said they did, but did not have it with them.  They returned the next day with white cards issued that day.  The inference that Mr Perkins and Mr Terpstra had not been frank when saying they had a white card is a reasonable one. 
  6. [53]
    On another occasion, Mr Sander explained:

I now recall … they employed a backpacker from Finland that couldn’t speak English that owned nightclubs in Greece.  It was such a bizarre story, and he said he wasn’t getting paid but he hoped to get a job with them long-term.  But he only lasted a week.  

  1. [54]
    Mr Perkins and Mr Terpstra would come from time to time for about an hour to assist.  Mr Sander saw them up on the roof doing work and queried whether Tractile was licensed for such work.  Mr Sander told Mr Perkins to leave the site until the licensing issue was resolved. 
  2. [55]
    About a week later, a Jason Sexton appeared at the site and told Mr Sanders he would be installing the roof under his license.  However, Mr Sander did not see Mr Sexton again.  The work was completed largely by Jedd.  Some of the later plumbing and electrical work to connect the water and electrical output of the roof was apparently done by other tradespersons, presumably under their own licenses.
  3. [56]
    By the time of the trial it was conceded by the defendants that no-one involved with the installation of the roof had a license to undertake to carry out the work under the Tractile contract was the work actually done by a person with a licence to carry out that work.[15] 
  4. [57]
    Mr Perkins explained in evidence how it could have happened that work was unlicensed when Tractile’s daily business was to supply and install Tractile roofs and related plant and equipment.  He said the failure to be properly licenced fro this contract was the result of a misunderstanding with a person named Mr Andrew of Combined Roofing and that Mr Andrew referred him to another roofer, being Mr Sexton.  Mr Sexton did not undertake the work or supervise it.  The work was unlicensed. 
  5. [58]
    No claim is advanced specifically for delay in performance of the installation of the roof.  However the cavalier conduct of Tractile and its officers in relation to performance of the work and in relation to licensing obligations gives one cause for concern about their reliability on other matters.
  6. [59]
    Second, Mr Sander gave evidence that there were numerous shortcomings in the design of the Tractile roof tiles for installation on a roof with the pitch and design of the roof of the house.  While difficulties often arise during construction, particularly in unique housing designs, in my view the shortcomings were significant and reflected a failure by Tractile properly to design the Tractile roof for the roof design of the house.  This reflects poorly on Tractile’s capacity properly to design and carry out the high technology solution it offered, at least in this case.  
  7. [60]
    While the roof was likely installed, at the latest, by the end of October 2019, the remaining work was problematic.  That work was the supply and installation of the inverter and batteries and the Rotex tank.  It is common ground that none of these items were supplied or installed by Tractile.  The circumstances in which this occurred, and it consequences in law, are disputed.  I deal with them from paragraph [202] below.  What is uncontentious is that the plaintiffs arranged supply and installation of the Rotex tank themselves and later installed a quite different solar power system after the Tractile roof was removed:  
    1. The Rotex tank was supplied and installed by a third-party supplier in about January 2020, along with a heat pump to boost its capacity.  It seems that Mr Terpstra advised that the Rotex tank would not have sufficient heating capacity to manage all the contemplated heating tasks of under floor, pool and domestic hot water.[16] 
    2. The inverter was acquired in about September 2020 as part of a completely different solar power solution adopted by the plaintiffs.  That solution was a ground mounted solar array.  The cost of acquisition and installation of that alternative system (including inverters) was $25,000 incl. GST.[17]   This included installation of two 10kW inverters.  The Tractile contract provided for one 10kW inverter, consistent with the decision seemingly made by the plaintiffs prior to entry into the Tractile contract.  The plaintiffs also chose not to install the batteries provided for in the Tractile contract.[18]

Delay in obtaining a Form 21

Overview

  1. [61]
    While Tractile’s actual work on site was all but finished by about October 2019 (given the roof was finished and the rest of the Tractile contract never completed), that was not the end of the disputes.  It was just the beginning of even more significant disputes over certification of the work done under the Tractile contract. 
  2. [62]
    By February 2020, the work on the house was substantially completed.  By October 2020 at the latest, all certifications necessary to obtain the Form 21 Certificate of Occupancy were held by Mr Sander except certifications relating to the Tractile roof.  SRRC were not satisfied that the Tractile roof was properly certified in two broad respects:
    1. SRRC was not satisfied that the Tractile roof met necessary structural and installation standards; and
    2. SRRC was not satisfied that the Tractile roof meet necessary standards as a source of water supply to the Rotex tank.
  3. [63]
    As will be seen, these issues were ultimately resolved in practice by the removal of the Tractile roof and the installation of a new roof in November 2022.  A Form 21 issued on completion of that work on 30 January 2023.  
  4. [64]
    At the time of these events, SRRC remained a Council where  applicants continued to deal directly with the building and plumbing inspectors of the Council.  Mr Sander was the applicant for the building approval and dealt directly with the Council for that purpose.  It was a role he was very familiar with, having done it since 1994.

The WaterMark certification

  1. [65]
    The first dark cloud on the certification horizon appeared on 4 November 2019.  At that time the Rotex tank and booster tank had not been installed but it appears that the solar heated water system had been installed.  Amongst other things, Mr Rooks, the head of the SRRC’s planning department, had informed Mr Sander that it was seeking a Form 7 from a licensed solar installer plumber for the Tractile solar tiles and that WaterMark certification of the Tractile solar tiles was sought by the SRRC (a requirement Mr Rooks repeated on a number of occasions to Mr Sander). Mr Sander forwarded the request to Mr Terpstra. 
  2. [66]
    Mr Terpstra responded that the circulating water in the Tractile solar water heating system did not come into contact with “mains water” (meaning, in context, domestic use hot water) so a plumber was not required for connection of that system.  Mr Terpstra said the connection of the Rotex tank is the work which required a plumber and WaterMark certification.  It appears that the Rotex tank did have WaterMark certification.
  3. [67]
    That response did not satisfy SRRC.  Mr Sander communicated the substance of their response on 18 November 2019.  He relevantly observed in an email that day:

And as earlier, the SRRC require confirmation that the integrated solar panels have Approved Water marks??? The reason being if they don’t, and the panels fail, water runs into the gutter, and with the variable warm water temperature, it has a high probability of Legionnaires Disease that will contaminate the water tanks, so then this whole roof section will have the Storm water diverted into engineered rubble pits underground.

And, the council are insisting that this whole system should be installed as notified by a Licenced Solar Accredited Plumber. Yes, I know you sent me a picture of the layout of a particular tile set up, But the SRRC want to see the Actual Pictures of the installation of components in this build. Please forward them.

With regard to the FORM 7, the SRRC will require one for all work Associated with Tractile, including the work already installed. SRRC request.

  1. [68]
    Mr Sander confirmed in evidence that he was communicating matters stated to him by Mr Rooks of SRRC.
  2. [69]
    Mr Terpstra relevantly replied on 19 November:

The solution to the potential Legionnaires Disease problem you raise is already designed into the system. Tractile does not have WaterMark Certification because we do not design systems that connect with mains or the potable water supply. We ensure the boundary equipment is WaterMark Certified and stipulate it must be connected to mains by a licenced plumber. The plumbing connections on roof do not require a plumber under national codes. Our agreements make clear we exclude plumbing work.

  1. [70]
    There was a good deal more correspondence between Mr Sander and Mr Terpstra along the same lines.
  2. [71]
    The correspondence to this point involved hearsay assertions by Mr Sander as to the SRRC’s position, though no objection was taken to the tender of emails on that basis.  I did not identify anything in writing from the Council at that time.  There was, however, a meeting in late November or early December 2019 at the site.  Those present were Ms Nozaki, Mr Sander, Mr Terpstra and Mr Rooks.  Ms Nozaki and Mr Terpstra give differing accounts of this meeting.[19]  However, the common thread is that Mr Rooks directly expressed his view that the Solar roof tile required WaterMark certification in respect of the heated solar water system.  Whether he was firm in that view or undertook to reconsider it at the meeting, it is apparent he became confirmed in that view by 18 December 2019, as expressed in his email of that date.  His view was based on advice received from the Australian Building Codes Board (ABCB) who communicated, relevantly:[20]  

Thank you for your WaterMark enquiry.

Your understanding is correct that solar collectors are WaterMark certified to the requirements of AS 3489. This standard calls up AS/NZS 2712 Solar and heat pump water heaters – Design and construction. The Scope of this Standard specifies performance-based requirements for the design and construction of both components of solar and heat pump hot water supply systems, and complete systems, for household premises and for commercial and industrial installations comparable with household installations, intended to deliver drinking water of acceptable quality. Systems may be supplied as packaged systems comprised of a complete set of matched components supplied from one source, or may be custom-built by assembling components from various sources on-site. Therefore, as the Scope includes system components, this means solar collectors are captured under WaterMark Certification.

You are also correct that licence 020095 does list any solar collector products and that a WaterMark certificate does not exist for Tractile Solar PV Roof Tiles. Therefore the Tractile Solar PV Roof Tiles are not authorised for use in a plumbing and drainage installation.

  1. [72]
    That information was forwarded by Mr Sander to Mr Perkins.  On 19 December 2019, Mr Perkins suggested that the ABCB had communicated a different view in the past and indicated he would make inquiries about that position separately with the ABCB.  Mr Perkins made a proposal of various alternatives if ABCB confirmed its position.
  2. [73]
    It is unnecessary to track through the subsequent correspondence in this matter and the contentious evidence about whether the plaintiffs co-operated in developing solutions or they did not.  Ultimately, the issue of whether the heated water system incorporated into the Solar roof tiles required WaterMark certification was never resolved prior to the removal of the Tractile roof in late 2022.[21]  If Tractile was and is correct that such certification was not required, then it is not at fault (in the broad sense) for not supplying a product that did not have it.  If Tractile was not and is not correct about that matter, it was at fault for supplying a product without WaterMark certification.

The structural and installation certification issues

  1. [74]
    There was evidence about other certification issues which arose with the Tractile roof between November 2019 and the removal of the roof in about November 2022.  
  2. [75]
    One of those issues related to whether the Tractile roof tiles met the requirements of the National Construction Code (NCC) for a roofing product.   There was a great deal of correspondence back and forwards about whether the roof tiles met those requirements.[22]  Tractile provided a series of Form 15s to SRRC from about 19 December 2019 signed by an engineer called George.[23]  Tractile relied upon these Form 15s as constituting certification of compliance with the NCC.  The Form 15s were consistently rejected by SRRC as failing properly to address the NCC requirements.  Tractile continued to assert that the forms did address the requirements until they ultimately ceased relying on George and instead retained Fraser-Lever engineers to advise on compliance as explained below from [83].[24]
  3. [76]
    Although the point did not loom large in the correspondence, there was also an issue in relation to certification of installation of the roof.   A Form 16 was provided signed by Mr Sexton (the Mr Sexton who did not attend the site or do the installation it seems).  Council queried that on the basis that the building licence referred to in the Form 16 was not active.  While it appears this was ultimately resolved, one wonders how Mr Sexton could have given such a certification considering Mr Sander’s evidence about his attendance at the site (or lack thereof rather).

The SRRC’s position from mid-2020

  1. [77]
    On 18 June 2020, and despite Tractile’s various submissions, the SRRC wrote to Mr Sander stating its position that a Form 21 could not issue for the house for the following reasons related to the Tractile roof:[25]
    1. The Solar roof tiles required WaterMark certification for use in plumbing and drainage installation;
    2. The Form 16 from the installer (Mr Sexton was insufficient because the license number on the form was not active; and
    3. The Tractile roof tile was not demonstrated to meet NCC standards for a roofing material.
  2. [78]
    Further, that letter also raised the following matter:

Council has not received testing approval or an Alternate Solution report for the use of the Tractile product to determine that the roof tile is suitable for use, or its suitability (compliance with AS/NZS4020) to be installed on a roof which is capturing water for human consumption (rainwater harvesting).

  1. [79]
    So far as I can determine, this is the first time that the Council specifically raised the suitability of the Tractile roof for capturing drinking water in writing.  It was an ominous sign for the future, though up to this point the question of the suitability of the roof to collect rainwater had not specifically arisen.
  2. [80]
    Those same issues were subsequently identified by Council when it carried out a Building Site Advice inspection for the purposes of obtaining a Final Certificate on 12 October 2020.  The inspection marked a number of items with an “R” which is understood in the industry to mean that certification is required before a Form 21 can issue.  Most of the line items marked R were not related to Tractile’s works.  I will deal with that next.
  3. [81]
    However, the inspector did add three handwritten notes:
    1. Roof product non-conform product.  Not N4 rated and non tested to supply to tanks and drinking water.
    2. Certificates required.
    3. Final plumbing required.
  4. [82]
    Mr Sanders was cross examined about this document.  It was put to him that as at that date, the Form 21 could not be issued unless all the certificates marked with an R were provided.  Mr Sander accepted that proposition.  However, he had earlier given evidence that he had the other (non-Tractile) certificates, he just had not supplied them.  He said he provided them the next week.  Also in re-examination, he explained that he collected the certificates as he went along and would normally have supplied them as part of the final inspection.  I accept his evidence on this issue.   

The Fraser-Lever report

  1. [83]
    The evidence does not explain whether and to what extent the Council’s compliance issues were addressed after late 2020 other than by Tractile retaining Fraser-Lever.  In September 2021, Tractile obtained, and provided to Council, a report from Fraser-Lever Consulting Engineers (the Fraser-Lever report).  The report concluded that the Tractile roof tile and solar roof tile complied with various relevant standards and NCC requirements.  It did not deal with plumbing and drainage standards.  Mr Perkins gave evidence that it did, and that it can be inferred Fraser-Lever did not consider that assessment against plumbing and drainage standards was necessary because they did not do such an assessment.[26]  That is not consistent with the scope of work described in the report says.  Fraser-Lever recited that they had been retained by Tractile Pty Ltd to provide an RPEQ structural and electrical certification of the product.  I reject the inference Mr Perkins seeks to draw.  There is no possibility that his suggestion is correct.  That he made it reflects poorly on his reliability as a witness.
  2. [84]
    Most relevant for current purposes is the section of the report which reviews in tabular form the roof tiles against Australian Standards, and in particular AS2049:2002 relating to roof tiles.  The table relevantly provides:

Standard No

Standard Name

Description

AS2049:2002

Roof Tiles

Clause 4.6 Surface Treatment

Materials used for the surface treatment of tiles shall not impart to rainwater which may be collected from the roof, any objectionable taste, colour or odour of any element or chemical in concentration known to be hazardous to health.

NOTES:

1. Guidelines are provided in ‘Guidelines on the collection, care and control or rainwater in tanks’.

2. A method of assessing compliance with Clause 4.6 is provided by BS 6920.

Tractile is offered with several different coating options. For tiles used for drinking water Tractile will use Dulux Acratex 962 paint which is drinking water safe. Dulux Datasheet included in Appendix E.

[…]

 

 

 

 

8.6 Resistance to Salt Attack

The ability of roof tile to resist salt attack shall be categorized (see Table 1) by testing in accordance with AS 4046.7. When a subsection of a tile is tested in accordance with AS 4046.7, it shall have a minimum dimension of 50mm~ 25mm~ the nominal thickness. Roof tiles manufactured in accordance with this Standard, categorized as ‘exposure’ grade shall be deemed suitable for use in all exposure environments (see Note 1).

Resistance to airborne salt is to be differentiated from the accumulation of salt from other sources, such as salt arising from evaporative air coolers, and heating devices, etc., which are fixed above roof tiles (see Note 2).

NOTES:

1 Up to 100 m from non-surf coast and up to 1km from surf coast are both regarded as severe marine environments. The distances specified are from the mean high WaterMark.

1 Consideration should be given to effects of salt in such circumstances

TABLE 1 SALT ATTACK RESISTENCE CATEGORIES

Category Requirement/description

Exposure grade <0.4 g loss in 40 cycles in AS 4046.7 for roof tiles (non-metallic).

Tractile has advised that the Tile is made from Fibre Glass Reinforced Polyester Resin which is used in marine environments. Tractile has provided the paint system used on each tile. The KOSSAN QUV & Salt Spray Test Report (Appendix D) provided testing of carbon fibre glass panel with the same paint system tested in standard ASTM B 117. The ASTM B 117 testing method is different to 4046.7. Both methods aim to replicate a highly corrosive environment.

[underlining in original]

  1. [85]
    As I read the sections of the report quoted above:
    1. The Tractile roof tiles assessed by Fraser-Lever only met AS2049:2002 in relation to run-off being safe for drinking on the basis that Tractile advised the Fraser-Lever that the identified Dulux paint is used, which paint met other standards for being safe for drinking run-off; and  
    2. The Tractile roof tiles assessed by Fraser-Lever met the standard for resistance to salt attack on the basis that Tractile advised the engineers that Kossan paint was used on each tile and was tested as meeting necessary standards of resistance to salt attack. 
  2. [86]
    These two sections appear to be inconsistent.  It is unclear how the roof tiles can be painted with Dulux to meet the requirement for safe run-off and be painted with Kossan paint to meet requirements for resistance to salt attack.  That is all the more so because as will be seen, Kossan paint (or at least the kind used on the roof tiles) is not certified as safe for collecting run-off for drinking.  The Fraser-Lever report was eventually tendered for all purposes at trial.  However, that does not much assist me to resolve this apparent inconsistency.  At trial, I thought it might be that both paints could be used on the roof tiles, first Kossan then Dulux, though it is not clear how that would be effective in practice.  Ultimately, however, Mr Terpstra gave evidence that the idea was that a customer would be invited to choose whether they wanted paint that promoted salt protection or paint which was safe for drinking water.[27]  I deal with that further below.  
  3. [87]
    The Fraser-Lever report was provided to Council.  On no view of it was that report a full answer to the SRRC’s concerns because it did not deal with the plumbing and drainage issues.   Another shortcoming of the report in relation to paint is that it was based solely it seems on Tractile’s (seemingly inconsistent) instructions as to how the tiles were painted.  
  4. [88]
    Soon after production of the report, Tractile disclosed that the roof was not painted with the Dulux paint certified safe for collecting drinking water, but rather with the Kossan paint that was not certified safe for collecting drinking water. That disclosure was made in Tractile’s amended defence filed 21 November 2021.  The context in which that occurred is relevant.
  5. [89]
    These proceedings were commenced by the plaintiffs in April 2021.  At that stage, the plaintiffs alleged that:
    1. Tractile knew the plaintiffs wanted a roof suitable to collect drinking water (paragraph 8);
    2. The roof tiles were not certified as safe for collecting drinking water; and
    3. That was a breach of various obligations under the contract to provide a product which was certified for inclusion in a dwelling.[28]
  6. [90]
    The defence first filed by Tractile responded to these matters as follows:
    1. Denied that Tractile knew the plaintiffs wanted a roof which was suitable to collect drinking water; and
    2. Denied the breach of certification obligations only by reference to a denial that the water in the Tractile roof did not come into contact with drinking water (the defence to the WaterMark issue).  No specific allegation was made about the certification of safety for collection of drinking water.
  7. [91]
    On 19 July 2021, the proceedings were placed on the commercial list.  After a failed mediation, further directions were made for an amended statement of claim and responsive defence.  The amendments to the statement of claim altered the allegations about certification to focus more directly on the WaterMark issue, but otherwise remained substantively the same.
  8. [92]
    It was in response to the (unchanged) paragraph 8 in the amended statement of claim that Tractile pleaded for the first time the following allegation in its amended defence filed 25 November 2021:
  1. The Defendants were instructed by the Plaintiffs to proceed with a roofing solution that would not be certified for capturing rainwater for human consumption; and
  1. Particulars
  1. On or about December 2018, an oral conversation between Jason Perkins and Steve Quilkey of the Plaintiffs took place during which the following words, or words to the following effect, were spoken:
  1. A.
    Steve Quilkey: “Will the rainwater captured from the roof be suitable to be used for drinking water?”
  1. B.
    Jason Perkins: “if you want to drink the water from the roof, the roof must be painted with DULUX paints which would make the roof suitable for capturing rainwater for human consumption and is certified for that purpose. However, to achieve this these DULUX paints are water based and have a shorter 10-year warranty, so you may have to budget repainting the roof every 10 years.
  1. If you want a paint which comes with a longer warranty and longer repaint maintenance schedule, we recommend KOSSAN branded paint to be used on the roof.
  1. However, KOSSAN paint has not been certified as suitable for rainwater collection so the rainwater would not be suitable for use as drinking water”
  1. C.
    Steve Quilkey: “I would like to proceed with the KOSSAN paint due to its longer warranty;
  1. I could use the rainwater collected from the roof for purposes other than drinking water like watering the gardens and flushing the toilet”.
  1. [93]
    This allegation resulted in amendment to the statement of claim which pleaded a detailed case concerning Tractile’s knowledge of the plaintiffs’ intention to use run-off from the roof for drinking water and that was followed by an equally detailed defence to those allegations.  It was those allegations which went to trial.  It was common ground at trial that the Tractile tiles were painted with Kossan paint which was not certified safe for collection of drinking water and not the Dulux paint referred to in the specifications and the Fraser-Lever report which was certified safe.

After practical completion

  1. [94]
    Mr Sander said that the house would have been practically complete by early 2020 apart from the Tractile problems,[29] and later said that the work apart from the Tractile issues was complete by February 2020.  The plaintiffs’ claim damages for being kept out of the occupation of the house on the basis that they could have moved into the house by the end of March 2020 if adequate Tractile certification could have been obtained promptly.  While I accept Mr Sander’s evidence and consider that a Form 21 could likely have been issued by the end of March 2020, that does not necessarily mean that the plaintiffs would have immediately moved into the house.
  2. [95]
    In fact, the plaintiffs did not move into the house in March 2020.  Mr Quilkey could not move in because he was confined to Hong Kong by COVID restrictions until December 2021.  It was Ms Nozaki who was present at the property over that period, living in the cottage.  Ms Nozaki said that the last of the workers left in July 2020 and that one of the last jobs involved marble cutting which caused a lot of dust.  After that she spent August 2020 cleaning and testing all the equipment to make sure it was all working.  That means, however, Ms Nozaki would not have moved into the house until September 2021 whether it was practically complete for the purposes of the building contract in March 2020 or not. 
  3. [96]
    I accept, though, that Ms Nozaki then chose to defer moving into the house in September 2020 because of the absence of a Form 21, though she was frequently in the house and using its facilities.  She and Mr Quilkey later decided to move into the house regardless of that, and Ms Nozaki did so in January 2021.  
  4. [97]
    Ms Nozaki gave evidence that she had made free use of the tank water when visiting the house and while living in the house from January 2021.  Around that time, Ms Nozaki developed an, allergic-type reaction, which manifested itself in severe rashes.  While the plaintiffs did not seek to establish this condition was caused by the Kossan paint, the allegations in the amended defence certainly caused significant and justifiable concern about that possibility.  She gave evidence that after reading the amended defence revealing the use of uncertified paint on the tiles, she took precautions to have as little contact as possible with the tap water, though she remained in the house. 
  5. [98]
    Ms Nozaki gave evidence that after she read the amended defence, she also made inquiries about Kossan in Malaysia and telephoned the company.  It was located not far from where she had once lived in Kuala Lumpur.  Her evidence was led as relevant to the reasonableness of her conduct in response to the discovery, rather than the truth of what she was told.  She described her investigations and call in this manner:[30]

From the internet, I saw Kossan mainly produced paint on bottom of the ship.  They release toxins gradually to keep the shellfish off of the bottom of fish ship or the factory floors, but I never seen anything on the roof on their website.  So I called Kossan and the one manager guy picked up my call and I – I asked him if the Kossan Paint is normally used for ships and factory floor and he said yes, and I further inquired him what about Tractile?  Do you supply paint to Tractile?  He said yes and what is it made of?  Can I ask about it?  And then he said no. 

  1. [99]
    Mr Quilkey returned to Australia in December 2021.  He considered repainting the roof but his investigations suggested this was not a viable solution to the problem of the uncertified Kossan paint.  I accept that evidence.  In about March 2022, the plaintiffs began investigating replacing the Tractile roof entirely. 
  2. [100]
    At about that time, Council restated its position on the status of the Tractile roof.  Council accepted that the Fraser-Lever report sufficiently addressed compliance with requirements for use of the Tractile tiles as a roof tile.[31]   However Council caveated that in respect of compliance with run-off requirements because Council had not received evidence that the coating on the tiles was safe for collecting drinking water.  Respectfully, that was in my view a correct judgment as I explain below.  I also note that in that letter, Council seemingly accepted the Form 16 relating to the installation of the sarking provided by Mr Sexton, on the basis that Council was satisfied as to the status of his license at the relevant time.  I wonder, however, how that Form 16 could have properly been given considering the evidence of Mr Sander that Mr Sexton was only on site once. 
  3. [101]
    There was no evidence I could identify (led by Tractile or otherwise) which supported the conclusion that the Kossan paint used was safe for collecting drinking water (other than a bare assertion by Mr Terpstra) much less that there was any process in place for certification of the paint for that purpose.  I do know that it provides resistance to salt attack, not something which of itself gives one confidence in assuming it is safe.
  4. [102]
    In about October 2022, the plaintiffs entered into a contract with Mr Sander to remove the Tractile roof and replace it with another roof.  That work finished in later 2022.  The Form 21 issued in January 2023.

THE WITNESSES

  1. [103]
    Before going further, it is necessary to make some comments about the credibility and reliability of each witness.

The plaintiffs

  1. [104]
    Mr Quilkey was a careful witness with a reasonably good recollection of the events.  His evidence was generally consistent with the documents and with other uncontentious facts and likely inferences from such facts.  Mr Hogg, counsel for Tractile, submitted that Mr Quilkey’s evidence about his previous experience in building was misleading.  I disagree.  The two relevant passages are dealing with different matters.  In addition, Mr Quilkey gave expansive and responsive answers to questions on the point in cross examination which were inconsistent with any intention to minimise his experience as a client of builders.[32]  He was an honest witness.
  2. [105]
    It was also suggested in cross-examination that Mr Quilkey developed considerable animus towards Mr Perkins and Mr Terpstra.  I agree he did.  However, that of itself does not mean his evidence is unreliable.  Generally, despite his annoyance, Mr Quilkey kept his communications civil and made real efforts from time to time to overcome the shortcomings he perceived in Tractile’s performance of the contract.  His displeasure might have tinged his evidence from time to time but he was a reliable witness. 
  3. [106]
    I should specifically mention his evidence about the key factual dispute on the pleadings: that is whether he ever had a discussion with Mr Perkins as alleged in the Tractile defence at paragraph [92] above.  Mr Quilkey denied that any of the principal components of that allegation were true.  Ultimately, as will be seen, his evidence to that effect was confirmed by Mr Perkins; an unusual source of corroboration.  Further, Mr Quilkey’s evidence about this conversation was consistent with other evidence which was uncontentious or plainly correct.  The most compelling point is that it is unquestionable that the plaintiffs needed to obtain water for domestic use from their water tanks and the house was designed on the basis that the water collected from the roof was to be directed to their 45,000 lt water tanks.  In those circumstances it is incredible to think that Mr Quilkey would simply agree to use paint not certified for collecting run-off for personal use. 
  4. [107]
    One final matter.  The quality of Mr Quilkey’s evidence is demonstrated by the fact that when given the opportunity to say that he had actually told Mr Perkins the run-off was intended for personal use, he let that opportunity to boost his case pass him by and frankly stated he did not recall ever saying it because he relied on the website and specification documents.[33]
  5. [108]
    Mr Hogg submitted that Ms Nozaki’s credibility was also affected by her evidence about building experience.  Again, and for the same reasons, there was nothing of substance in this complaint.  I consider she was an honest witness.
  6. [109]
    Ms Nozaki appeared to me to be influenced from time to time by her sense that Tractile and its officers were not behaving as they should be according to her views of proper conduct in dealing with government officials.  That was particularly so in respect of Tractile disagreeing with the views of the SRRC officers.  At times I think this affected the reliability of the detail of her recollection in relation to events involving that kind of dispute, though such issues were not material in the resolution of the proceedings.  In all other respects she was a precise witness with a good recollection.  

Mr Sander

  1. [110]
    Mr Sander was scathing in his views of performance under the Tractile contract.  He undoubtedly formed the view that Tractile were unreliable (at least on this job).  However, he had good reason to think so.  That view notwithstanding, I found him a reliable and credible witness.  Mr Sander had a frank and direct manner of answering the question asked of him, whether in examination or cross examination, and without any evident attempt to shape his answers in a convenient manner and without an attempt to add to his answers in self-justification.  A good example of this was his evidence under cross examination relating to the October 2020 Building Site Advice, but it marked all his evidence.  His evidence was generally consistent with the documentary record and with other evidence I accepted as correct.  Where he was uncertain about matters, he was careful to make clear his recollection was of a general kind.  He also had a good recollection of detail, especially where it concerned his personal involvement in the work on the site, which was clearly his particular concern during these events.  As I have said, I accept his evidence.

Mr Perkins

  1. [111]
    Mr Perkins was not a reliable witness.  His answers frequently began with background commentary on irrelevant matters, and then moved to very generalised responses which were not responsive to the question asked.  The below passages give a flavour of Mr Perkins’ style of answering questions.  For this reason alone, I formed the view that Mr Perkins had a poor recollection of events and was reconstructing much of his evidence.  There were other problems.
  2. [112]
    The most significant problem was his evidence in relation to the hotly disputed conversation in Adelaide pleaded in the Tractile amended defence.  When asked about that, he did not come up to proof on the alleged conversation about safe and unsafe paint. In relation to the discussions at the Adelaide inspection he said:

Mr Hogg:

It doesn’t need to be precise but just to the best of your recollection?

Mr Perkins:

Okay.  I presented to them that this is what a 20-kilowatt system looked like.  I presented to them that the non-solar tiles were painted in a monument dark grey paint that was offered from factory.  We spoke about the number of inverters they would require.  We spoke about the number of batteries they may require.  And we spoke about the Rotex tank and how it operated, which were all on display at the property.

Mr Hogg:

You mentioned the paint from the roof being monument.  Could you tell the court your recollection of any discussions you had with Mr Quilkey about the paint on the roof?

Mr Perkins:

At that particular meeting?

Mr Hogg:

At that particular meeting?  

Mr Perkins:

The meetings were really – that particular meeting specifically was talking about the colour of the paint, being dark grey, and just talking through that that one was supplied from Malaysia, and it – it was done.

Mr Hogg:

Did you – so how did that conversation about the paint on the roof start?  Did you point out the roof and the paint or did Mr Quilkey point out the roof and the paint?  

Mr Perkins:

Look, I – I don’t recall exactly, but it would’ve spoken about the paint clearly because it’s one of the key features of the product.

  1. [113]
    Mr Hogg tried again later:

Mr Hogg:

And could you tell the court to the best of your recollection who said what to whom during that conversation?

Mr Perkins:

We just said this is – this roof has got the dark grey colour that you’re discussing, and it was painted in Malaysia – Kossan Paint.

Mr Hogg:

And what did Mr Quilkey say in response, if anything?---

Mr Perkins:

He basically, towards the – towards the end of the meeting, just made a comment that yep, he wanted what was at Adelaide, along those lines.  So that’s [indistinct] in terms of having the – all of the different variables.  Having a battery system, the inverters, the Rotex tank, solar tiles, and the painted roof tiles. 

  1. [114]
    Mr Hogg then tried a broader question:

Mr Hogg:

Did you have any other conversations with Mr Quilkey about planning after that?

Mr Perkins:

Yeah, we would’ve spoken as things progressed to confirm colours, because they were still debating whether it was going to be a very dark grey or a black-type colour roof.  It was definitely choosing different shades, if you like.  And we would’ve spoken about some of their goals.  So around sustainability - - -

His Honour:

Sorry, you said you would’ve.  Do you recall a conversation where you did have a specific discussion about goals?

Mr Perkins:

Yes, I do recall being on-site and talking with him and reviewing the plans with the very steep pitch roof, and looking at the issue on that water-based paints have a 10 year life and then you’ve got to repaint and talking about the issues on how difficult such a steep roof is to readily maintain, what costs are associated, and so a paint with a longer life was basically requested as part of the solution.  A paint that would be - - -

Mr Hogg:

So where – you said, basically requested – sorry to interrupt you, we need to be precise?

Mr Perkins:

No, sorry, it was requested – yes, so a paint that was safe and also durable…

Mr Hogg:

By whom? Who made that request?

Mr Perkins:

Mr Quilkey.

His Honour:

And where was that conversation?

Mr Perkins:

At Mount Tambourine. 

His Honour:

All right.  And doing the best you can, when was it?---

Mr Perkins:

Would’ve been some point – some point in 2019.  In the early part of 2019.  So we’d been talking about the variables that could go on and looking at them, just saying, “Okay this is what you can do - - -

Mr Hogg:

When you say variables, what do you mean by that?

Mr Perkins:

Well, basically just looking at the variation between if you want the most durable solution from a Dulux paint system, it’s not going to have the water solution.  If you want the water solution, you have Dulux, it’s going to have a very short life.  You’re going to have maintenance issues. 

Mr Hogg:

And when you say water solution, were those the words used?

Mr Perkins:

Well, to be able to, you know, collect potable drinking water off of a roof. 

His Honour:

Were they the words used?

Mr Perkins:

No.  Rainwater. 

Mr Hogg:

What were the – what were the words used, to the best of your recollection in that conversation?---

Mr Perkins:

There was just – there was just discussion about rainwater. 

Mr Hogg

Could you be - - -?

Mr Perkins:

I don’t really recall that, sorry. 

Mr Hogg:

I need you to be as precise as you can, Mr Perkins.  You said you were having a discussion about rainwater.  Who said what to whom about rainwater?

Mr Perkins:

The rainwater, it was just discussed on – if you were collecting rainwater - - -

Mr Hogg:

Who said what to whom?

Mr Perkins:

Mr Quilkey had spoken about intending to collect rainwater from the roof.  So then in discussing [indistinct] for the roof he was looking at what is the quality of rainwater off of a roof.  We’d discussed that at Tambourine the previous year, there’d been the Hendra virus from bats, we’re talking about such a large roof, the – the risk of contamination from birds and bat droppings onto a roof, and then looking at it and just saying – it just – it just leads to tank water.  It’s not very nice.  I had a very clear impression that the tank water was for the gardens, not for anything else. 

Mr Hogg:

Why did you have that impression, what gave you that impression?

Mr Perkins:

The amount of effort they’d put into their gardens.  The volume of the tanks was so large, it was well in excess of what you’d expect for any domestic consumption.  And the fact that Mr Quilkey appeared to be a very healthy person.  They had a lot of – they had a gym into their property.  He, himself, looks very healthy.  He just doesn’t appear as if someone would choose to drink rainwater if there’s better water available. 

  1. [115]
    Mr Hogg put the pleaded Adelaide conversation to Mr Quilkey in cross examination.  The only proper source of the instructions in that paragraph is Mr Perkins.  The allegations were pleaded late and, if established, were powerfully exculpatory.  Yet the evidence was not forthcoming from Mr Perkins despite the repeated opportunities given.   I also reject the suggestion that Mr Perkins ever mentioned Kossan paint.  The plaintiffs deny it and Ms Nozaki’s conduct when told about the Kossan paint is consistent with it being news to her.  Further, according to Mr Perkins the paint involved was the colour Monument.  The extract from the specifications set out in paragraph [21] above suggest that Monument was a Dulux paint.  Kossan is never mentioned in any document at any stage prior to the delivery of the amended defence.  Indeed the evidence from Mr Terpstra that Tractile’s practice was to offer a choice of Kossan or Dulux is itself directly inconsistent with the specification and other documents published on the website.
  2. [116]
    Nothing resembling the evidence actually given by Mr Perkins was put to Mr Quilkey.  In my view, the story told in the above passages was reconstructed in the witness box and did not describe anything which had happened.
  3. [117]
    Another example in my view of reconstructed evidence is Mr Perkins’ evidence about the attendance of workers to put on the roof.  He gave evidence that Mr Sexton had a team of 4 or more workers putting on the roof.  No one else gave that evidence.  Each of Mr Sander (who was present every day), Mr Quilkey and Ms Nozaki spoke of the work being done just by “Jedd” with occasional assistance from Mr Perkins and Mr Terpstra (and the Finnish intern).  None of Mr Perkins’ evidence was put to any of the plaintiffs’ witnesses and Mr Terpstra did not give any such evidence. 
  4. [118]
    Mr Perkins’ evidence about how the licensing issue arose was also not believable.  His evidence is summarised in paragraph [57] above.  He further gave evidence suggesting that the plaintiffs had somehow accepted the solution of Mr Sexton as a person with the relevant license.  That evidence had no credible basis and reflected an unjustified attempt to shift responsibility for the lack of licenced work in some inchoate way to the plaintiffs.  Further, it is not credible to suggest that Mr Perkins discovered the problem with Mr Andrew once the work was underway.  Only Jedd was regularly on site and Mr Perkins and Mr Terpstra also attended.  Mr Perkins had to have been aware that Mr Andrew’s team was not on site from the very start.
  5. [119]
    At one point, the defendants sought to rely on an invoice for work done under the Tractile contract as part of the failed quantum meruit counterclaim.  That invoice was for ‘temporary use’ of Mr Sexton’s QBCC license.[34] The QBCC Act contains detailed provisions concerning the obligations on licensees to carry out and supervise work.  A person must not undertake to carry out work unless that person holds a contractor’s licence of the appropriate class.[35]  Where work is carried out by a company there must be a nominee with an appropriate licence for the supervision of work, and the company and the nominee must ensure the work is personally supervised in the way described by the Act.[36]  In addition, the Act makes it an offence for a licensee to help another person to carry out unlicensed building works or to let another person use their licence to pretend to be a licensee.[37]  If any such arrangement did exist (and care must be taken about assuming it did given that Mr Sexton is not a party), it was likely unlawful.
  6. [120]
    I do not accept any of Mr Perkins’ evidence unless corroborated by other evidence I accept.

Mr Terpstra

  1. [121]
    Mr Terpstra generally gave more responsive answers than Mr Perkins.  However, I do not consider him a reliable witness.  In the correspondence relating to certification issues, Mr Terpstra generally adopted the position that Tractile had done all that it was required to do on certification and that if anyone said to the contrary they were in error.  This is most clearly the case in his position on the need for WaterMark certification.  Of course, he is entitled to hold that view if he wishes.  He adopted the same attitude in his evidence at trial, but in evidence his enthusiasm for his product led him to give evidence which was not objectively credible to defend his product.  
  2. [122]
    The best example is his evidence in cross examination about the Fraser-Lever report.  His evidence that the apparent inconsistency between drinking water safety and corrosion resistance reflected a choice which customers were asked to make was inconsistent with the contemporaneous website and specification, which unequivocally states that run-off is safe to drink and only mentions Dulux paint. 
  3. [123]
    His evidence was also inconsistent with the process followed in negotiations with the plaintiffs, where no mention of any such issue exists in the documents or any evidence of the defendants.  Further, it was inconsistent in my view with the plain meaning of the Fraser-Lever report.  The report makes clear that to meet the requirements of AS2049:2002, the run-off from the roof tiles had to be non-hazardous to health and that this requirement was met if the specific Dulux paint was used.  The whole of his evidence on this issue was not credible and was infused with a determination to be an advocate for his product.[38]

THE INTENDED USE ISSUE

  1. [124]
    There are two factual issues to be resolved. 
  2. [125]
    The first is whether there was ever any discussion of the kind pleaded by Tractile.  It is obvious from my discussion of Mr Quilkey’s evidence and Mr Perkins’ evidence that I find no such discussion ever occurred.  Once this contest on the facts is resolved, there is nothing which answers the plaintiffs’ evidence that they intended to use the run-off from the roof for drinking water.  There was no challenge to their evidence that they had no other viable source of drinking water and that they installed two 45,000 lt tanks for that purpose.  I accept their evidence.
  3. [126]
    The second is whether Mr Perkins or Mr Terpstra knew that the plaintiffs intended to use the run-off as drinking water and if so, the source of that knowledge.
  4. [127]
    As to Mr Perkins, I am persuaded that he knew that the plaintiffs intended to use the run-off from the roof as drinking water, and knew that before entry into the Tractile contract.  
  5. [128]
    First, there is his evidence set out above.  In my view, that evidence demonstrates that Mr Perkins understood Mr Quilkey wanted to be able to drink the run-off.  Even if one allows for the retraction of the use of the word potable, the evidence that Mr Quilkey said he wanted a safe paint that was durable and that he intended collecting rainwater from the roof are consistent only with Mr Perkins understanding that the purpose of the collection of run-off was for domestic use. 
  6. [129]
    Second, even if one has reservations about the reliability of Mr Perkins’ evidence (not all statements against interest are true), it is supported by the objective circumstances.  Those circumstances are:
    1. The Tractile roof was publicised at the time as safe for collection of drinking water;
    2. The location of the house was isolated.  While that of itself does not suggest that the property did not have mains water, it raised the possibility; and
    3. There were two 45,000 lt water tanks within 6 to 8 meters of the site for the house.  These are very large tanks.  Mr Perkins must have seen them on his site visit before the Tractile contract was entered into.  The obvious inference from such a large water supply in an isolated location is that it is intended for domestic use, not the contrary as Mr Perkins said in his evidence.
  7. [130]
    The source of Mr Perkins’ knowledge might well have been that Mr Quilkey told him of the intended use, though Mr Quilkey did not recall doing so.  Alternatively, Mr Perkins drew that inference from the objective circumstances set out in the previous paragraph.  I have no particular basis to think Mr Terpstra was aware of the intended use.  He was not asked about the matter.  However it is sufficient for the purposes of the knowledge of the Tractile corporate defendants that Mr Perkins knew that matter.

The restitutionary claims

Breach of s. 42(1) QBCC Act

  1. [131]
    Section 42(1) QBCC Act provides:

Unless exempt under schedule 1A, a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class under this Act.

  1. [132]
    It is admitted on the pleadings that neither Tractile nor Tractile Combined had a relevant QBCC licence to undertake to carry out any of the work under the Tractile contract nor to carry out any of the work under the Tractile contract.[39] 
  2. [133]
    By their defence, the defendants deny that the work under the Tractile contract was carried out by Tractile P/L or Tractile Combined.  They allege that Tractile P/L was not involved in carrying out the works at all and that Tractile Combined did not “personally” carry out the works but did cause the works to be carried out without a license.
  3. [134]
    No submission was made at trial that the work was in fact carried out lawfully by a contractor who was properly licensed.  I find that it was not.  On my findings, the work was not in fact carried out under the licence of Mr Sexton or his company (assuming they were properly licenced) and ultimately Tractile made no submission that it was.  There is no other candidate as to who carried out the work but a Tractile entity. 
  4. [135]
    Further, I find below that both Tractile Combined and Tractile P/L were parties to the Tractile contract and further that Tractile P/L specifically undertook the responsibilities as Contractor.   On the proper construction of the Tractile contract, both companies undertook to do the building work under the Tractile contract. 
  5. [136]
    The defendant’s trial submission contended that even if Tractile P/L and Tractile Combined were both parties to the contract, “the evidence was that Tractile Combined carried out the building work”.  That evidence was not identified in the written submission.  I do not see how that finding can be made.  The evidence demonstrates that the defendants were imprecise as to which entity in the Tractile group was doing any particular act.  As I find below, both Tractile Combined and Tractile P/L were obliged to carry out the work under the contract.  There is no reason to conclude that it was done by one and not the other, but if forced to choose, it is in my view more likely Tractile P/L carried out the work because it is the nominated Contractor under the Tractile contract.

Restitutionary claim

  1. [137]
    Where a person breaches s. 42(1) QBCC Act by carrying out building work, they are not entitled to any monetary or other consideration for doing so.[40]  Where money has been paid to a person for carrying out building work, a right arises, without more, to restitution of that money, albeit subject to any entitlement arising under s. 42(4).[41]  Alternatively, a person who has paid money to an unlicenced person for work done in breach of s. 42(1) under the mistaken belief that the person held the necessary license is entitled to restitution of that money as money paid under a mistake of law.[42]
  2. [138]
    The effect of Cook’s Construction is that it is unnecessary to prove an entitlement to recover under mistake of law to be entitled to restitution of money paid for unlicensed work.  The point is moot, however, because the statement of claim pleads facts sufficient to give rise to both grounds of restitution.  The basis upon which each ground is denied in the defence, to the extent they are denied, do not contradict the allegations made to support those grounds in the statement of claim, leaving those allegations deemed admitted. 
  3. [139]
    Consistent with this, the only contention made in relation to the restitutionary claim in trial submissions by the defendants was that Tractile P/L did not carry out any of the work.  It was all undertaken by Tractile Combined.  However, I cannot see a basis in the evidence to reach that conclusion for the reason set out in [136] above.
  4. [140]
    The plaintiffs plead that they paid $177,645 to Tractile P/L at the request of Tractile P/L and Tractile Combined.  It is uncontentious that that amount was paid on invoices issued by Tractile P/L.  Both companies were joint obligors and jointly entitled to the payment.  There is no reason to think that they were not both jointly benefitted by the payment.  No restitutionary defence is raised.  The plaintiffs are entitled to judgment for $177,645 against both companies. 

Plaintiffs can sue on the Tractile contract

  1. [141]
    The trial was conducted on the assumption that the plaintiffs could sue for breach of the Tractile contract even though it was entered into in breach of the prohibition in s. 42(1).  That assumption is not as clearly supported by authority as one might expect.  The position was left open in Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196.  That decision, in so far as it impacts on this point, was helpfully summarised by Dorney DCJ in Williams v Stone Homes Pty Ltd [2014] QDC 64 as follows:
  1. [59]
    As has been extensively canvassed, and as Australian Timber & Trusses P/L demonstrates, Sutton dealt with two prohibitions. The first was that a person must not “undertake” to carry out building work unless appropriately licensed; and the second was that that person must not carry out building work unless appropriately licensed. The first prohibition was directed at an element in the formation, or making of, the contract requiring the conclusion that the contract should be unenforceable. As to the second, performance of that work is that which is to be taken as prohibited.
  1. [60]
    In Sutton, McPherson JA (with whom Jones J expressly agreed) held that whether the other party to a contract which is the subject of an “express legislative embargo on its being made at all” is disabled from enforcing it was “not something that calls for decision now, and it may be left for future consideration”: at 202-203 [4]. As identified by McPherson JA, the prohibition has the consequence of unenforceability “at least at the instance of … the person who was not appropriately licensed”: at 203 [6].
  1. [61]
    There was no case presented for my consideration which has clearly answered the question left unresolved in Sutton.
  1. [142]
    Like Judge Dorney, my research also presented no case which has clearly answered the question left unresolved in Sutton.  That might be because the answer seems obvious.  In Sutton, McPherson JA had this to say on the subject (at [4]):

The next question concerns the consequence or effect of these statutory prohibitions. Turning to the first of them, it would be surprising if, having prohibited the making of such a contract, the legislative had not also intended that it should be unenforceable. This conclusion is not founded on the circumstance that, by s. 42(7), a person contravening s. 42 commits an offence, although it provides additional support for such a legislative intention. Even if it were not an offence for an unlicensed person to “undertake” to do building work, the result would in my opinion probably be the same. When Parliament prohibits the very process of formation of a contract, it scarcely lies with the courts to ignore that prohibition and enforce the contract despite the express legislative embargo on its being made at all. At least that is so where the party seeking to enforce it is the person who contravened the prohibition, which is so here. Whether the other party is also disabled from enforcing it is perhaps another matter. The decision in Re Mahmoud & Ispahani [1921] 2 K.B. 716, which has provoked the ire of some textwriters on the subject, is authority that even the other, and it may be innocent, party to the contract is also precluded from enforcing it; but it is a question that may in the end depend on the weight to be given to the fact that here the prohibition in s. 42(1) is directed only to the person “undertaking” to carry out the building work. In this instance, however, it is not something that calls for decision now, and it may be left for future consideration.

  1. [143]
    It would take compelling textual indications to reach the conclusion that the innocent party to a contract entered into in breach of s. 42(1) was not entitled to sue on the promises made by the unlicensed party.  The objects of the QBCC Act are set out in s. 4 of that Act as follows:
  1. The objects of this Act are––
  1. (a)
    to regulate the building industry––
  1. (i)
    to ensure the maintenance of proper standards in the industry; and
  1. (ii)
    to achieve a reasonable balance between the interests of buildings contractors and consumers; and
  1. (b)
    to provide remedies for defective building work; and
  1. (c)
    to provide support, education and advice for those who undertake building work and consumers; and
  1. (d)
    to regulate domestic building contracts to achieve a reasonable balance between the interests of building contracts and building owners; and
  1. (e)
    to regulate buildings products to ensure––
  1. (i)
    the safety of consumers and the public generally; and
  1. (ii)
    persons involved in the production, supply or installation of building products are held responsible for the safety of the products and their use; and
  1. (f)
    to provide for the proper, efficient and effective management of the commission in the performance of its functions.
  1. [144]
    It is difficult to envisage a construction more inimical to paragraph (a), (b), (d) and (e) of those objects than one which would leave a person, who has the misfortune to contract with a person who was unlicenced, with no remedies for breaches of the contract for the building work.  That is especially so where work has, in fact, been carried out in a manner which is defective or in breach of contractual or statutory warranties, including warranties under the ACL and the QBCC Act itself.  There is no text in s. 42 which in my view compels such an unlikely Parliamentary intention.  I intend to proceed on the assumption adopted by the parties.

the Tractile contract

Proper construction

  1. [145]
    Two issues of construction arise in respect of the Tractile contract:
    1. Who are the parties to the contract; and
    2. Was it a term of the contract that the Tractile roof would be certified as safe to collect rainwater for drinking and other domestic uses?

The parties to the contract

  1. [146]
    It is admitted on the pleadings that Tractile Combined was a party to the Tractile contract.[43]  That agreement does not necessarily bind the Court,[44] but I see no good reason to go behind it.  The quotation is on Tractile Combined letterhead.  The footer identifies Tractile Combined by name.  In those circumstances, the references to “Tractile” in the quotation proper, without further elaboration, would be objectively understood as referring to Tractile Combined.
  2. [147]
    The disputed issue is whether Tractile P/L is a party to the Tractile contract.  It is trite that in constructing a contract in writing one must construe words and phrases used in the context of the contract as a whole and should endeavour to give meaning to all the words in the document.  Adopting that approach, I consider Tractile is also a party to the contract.
  3. [148]
    The starting point is the standard terms.  They contain various promises by “CRS”.  CRS is defined as Tractile Combined “or its appointed contractor”.  The acceptance form was part of the quotation put forward by, relevantly, Tractile Combined.   It calls for the plaintiffs to “accept this quotation for roofing work to be carried out” at the site of the house “by Tractile Pty Ltd (Contractor)”.  Some meaning should be given to the designation of Tractile P/L as the Contractor, particularly given its nomination in the acceptance form, which is central to the creation of a binding contract.  The definition of CRS in the terms and conditions provides that meaning.  That is compelling because of the use in that definition of the word “contractor”.  Looked at objectively, and reading the contract as a whole, Tractile is the appointed contractor of Tractile Combined and accepts the obligations and benefits under the standard terms in respect of the work identified in the body of the quotation.  In address, Mr Hogg submitted that I should construe the above provisions as identifying the contractor as the agent of Tractile Combined.  The difficulty with that submission is that it is not what the definition of CRS says.  I do not accept that that is a correct construction.
  4. [149]
    It might be argued that Tractile Combined and Tractile P/L undertake different obligations and benefit from different rights in the Tractile quotation.  However, to construe the contract in that pedantic and uncertain manner would be uncommercial and neither party urged that construction.  In my view the better view is that on its proper construction, Tractile P/L and Tractile Combined are jointly and severally liable for the obligations under the contract and entitled to the benefit of the rights under the contract.
  5. [150]
    I should add that if I am wrong and only one of Tractile P/L and Tractile Combined are parties to the contract, then in my view that party must be Tractile P/L.  Tractile P/L is on the proper construction of the contract the contractor identified in place of Tractile Combined in the standard terms.  In that case, the footer to the quotation proper must be read as referring to Tractile P/L.  The standard terms articulate all the substantive obligations in performance of the work. 

Certification as safe to collect drinking water

The parties contentions

  1. [151]
    The plaintiffs’ pleaded case on this issue has many alternative approaches to establishing a contractual obligation to supply a roof certified safe for the collection of drinking water.  In final submissions, however, the plaintiffs focussed on just one approach, arising out of the express promise in the Tractile contract to supply and install Tractile Eclipse roof tiles. 
  2. [152]
    The plaintiffs contended that reference to extrinsic facts demonstrates that Tractile Eclipse roof tiles have two relevant characteristics:
    1. They are painted with Dulux paint which is safe for collecting drinking water; and
    2. They are certified to AS2049:2002.
  3. [153]
    They contend further that the Tractile Eclipse roof tiles were neither painted with the specific Dulux paint nor painted with a paint that was certified as meeting the specified standard.
  4. [154]
    The defendants did not appear to cavil with the proposition that the roof was not painted with certified Dulux paint nor that the Kossan paint was not certified as safe for collecting drinking water (though I will nonetheless address that point presently). The defendants rather advance two contentions:
    1. The inclusion of those characteristics in the website (and presumably the specification) is not sufficient to make them part of the Tractile contract; and
    2. No such obligation can arise in any event because Tractile in fact had two options for paint for use on Tractile tiles, Kossan and Dulux so there cannot be any certain implication of obligation in relation to just one.

Relevant principles

  1. [155]
    There was no express allegation in the plaintiffs’ statement of claim that the Tractile contract was a contract entirely in writing.   However, it appeared to me that the case was conducted on that basis, and that is the implied position evident in the statement of claim, so I will adopt that convention.  In any event, it seems a reasonable inference on the evidence before the Court.
  2. [156]
    Nowhere in the Tractile contract does it expressly warrant that the Tractile roof or Tractile roof tiles have a surface certified as safe to collect drinking water.  The basis for the plaintiff’s contention as to construction is that the website and specification state that the Tractile roof tiles have a surface certified as safe to collect drinking water.  The plaintiffs’ contentions therefore require regard to be had to documents extrinsic to the Tractile contract.  Is there a legal basis for doing so?
  3. [157]
    The fundamental principles of construction for a contract in writing were recently restated by Kelly J in Body Corporate for Ocean Pacifique v Pugliese [2023] QCA 129 (footnotes omitted):
  4. [18]
    Before addressing these arguments, it is necessary to refer to some relevant principles of interpretation. A convenient starting point is the often cited statement in Australian Broadcasting Commission v Australasian Performing Right Association Ltd, where Gibbs J said:

It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, ‘even though the construction adopted is not the most obvious, or the most grammatically accurate’, to use the words from earlier authority cited in Locke v Dunlop [1888] UKLawRpCh 140; (1888) 39 Ch D 387, at p 393, which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case [1880] UKLawRpCh 258; (1880) 16 Ch D 681, at p 686. Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co Ltd v Arcos Ltd [1932] UKHL 2; (1932) 147 LT 503, at p 514, that the court should construe commercial contracts ‘fairly and broadly, without being too astute or subtle in finding defects’, should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429, at p 437).”

  1. [19]
    The terms of a commercial contract are to be understood objectively by what a reasonable businessperson would have understood them to mean. The reasonable businessperson is someone placed in the position of the parties at the time of the contract. It is from that person’s perspective that the court considers the language used by the parties, the surrounding circumstances known to them and the commercial purpose and objects of the contract. A court is entitled to approach the task of giving a commercial contract a business like interpretation on the assumption “that the parties intended to produce a commercial result”.  A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.
  1. [20]
    In many cases, it may be possible to undertake the process of construction by reference to the contract alone. Usually, the process of construction occurs by reference to the contractual text and contextual notice provided by that text. It is always legitimate to look to context apparent from, or provided by, the contractual language. It may sometimes be legitimate to have recourse to events, circumstances and things external to the contract and which were known to the parties. Recourse to events, circumstances and things external to the contract may be necessary to identify the commercial purpose or objects of the contract “where that task is facilitated by an understanding ‘of the genesis of the transaction, the background, the context ... in which the parties are operating’”.
  1. [underlining added]
  1. [158]
    The underlined passage identifies a well-known basis for regard to be had to extrinsic facts to aid construction.  However there are others, more apposite to this case.  The first is that extrinsic facts may be used to construe a written contract to identify the subject matter of the contract. 
  2. [159]
    This is a long-established exception to the parol evidence rule. In Rankin v Scott Fell & Co (1904) 2 CLR 164, the issue before the High Court was whether extrinsic facts could be considered in determining the source of 5000 shares to be transferred under the relevant contract.  In that context, Griffith CJ held:

Now, there is no doubt that when the subject matter of a contract is uncertain, extrinsic evidence is admissible to prove what it was the parties were bargaining about, and it is only a rule of common sense. The first case referred to by the learned Judges is Macdonald v Longbottom, 1 El. & El. 977, in which the defendant agreed to buy from the plaintiff what is described as "your wool." What is meant by "your wool" is certainly something which cannot be ascertained from the words themselves, and it is necessary therefore by extrinsic evidence to discover what it is the parties have in mind. The conditions and limitations under which oral evidence may be admitted to explain the written contract for purposes of its construction are laid down in many authorities. They are very clearly stated in the case of Shore v Wilson, 9 Cl & F. 355. Baron Parke, afterwards Lord Wensleydale, there says, at p 555 —

There are, I apprehend, two descriptions of evidence (the only two which bear upon the subject of the present inquiry), and which are clearly admissible in every case for the purpose of enabling a court to construe any written instrument, and to apply it practically. In the first place there is no doubt that, not only where the language of the instrument is such as the court does not understand, it is competent to receive evidence of the proper meaning of that language, as when it is written in a foreign tongue; but it is also competent where technical words or peculiar terms, or indeed any expressions are used which at the time the instrument was written had acquired an appropriate meaning, either generally or by local usage or amongst particular classes. This description of evidence is admissible in order to enable the court to understand the meaning of the words contained in the instrument itself by themselves, and without reference to the extrinsic facts on which the instrument is intended to operate. For the purpose of applying the instrument to the facts, and determining what passes by it, and who take an interest under it, a second description of evidence is admissible, viz, every material fact that will enable the court to identify the person or thing mentioned in the instrument, and to place the court whose province it is to declare the meaning of the words of the instrument, as nearly as may be in the position of the parties to it. From the context of the instrument, and from these two descriptions of evidence, with such circumstances as by law the court without evidence may of itself notice it is its duty to construe and apply the words of that instrument; and no extrinsic evidence of the intention of the party to the deed from his declarations whether at the time of his executing the instrument or before or after that time is admissible; the duty of the court being to declare the meaning of what is written in the instrument, not of what was intended to have been written. The excepted cases in which such evidence is admissible, if indeed there be more than one excepted case (that is where there are two subjects and two objects both described in the instrument, and each equally agreeing with it), have no bearing whatever in the present question.

  1. [160]
    This proposition was articulated in the modern context by Spiegelman CJ in County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193:
  1. 14
    Even in the case of a written contract, the words identifying the subject matter being bought and sold may be susceptible to more than one meaning. This is one well established category of ambiguity, so that extrinsic evidence is admissible to identify the subject matter, even on a restrictive approach to the use of extrinsic evidence in the course of contractual interpretation. (See Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 349-350, 352.)
  1. 15
    There are numerous examples in which extrinsic evidence has been used to identify the subject matter of a written contract. (See Bank of New Zealand v Simpson [1900] AC 182 at 187-189; Gordon-Cumming v Houldsworth supra at 541, 545; R W Cameron & Company v L Slutzkin Pty Ltd (1923) 23 CLR 81 at 87-87; Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348 at 356; White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266 at 270-271; Akot Pty Ltd v Rathmines Investments Pty Ltd [1984] 1 Qd R 302 at 303-304; Wharf St Pty Ltd v Amstar Learning Pty Ltd [2004] QCA 256 at [7]; Kim Lewison The Interpretation of Contracts, 4th ed (2007) Sweet & Maxwell at [11.03] pp 416-420; Gerard McMeel, The Construction of Contracts, (2007) Oxford University Press at [5.46]-[5.49].
  1. 16
    A classic example of the application of this principle is the written reference to “your wool” in the contract considered in MacDonald v Longbottom (1859) 1 E & E 977; 120 ER 1177. The issue in that case was whether or not pre-contractual discussions were admissible to identify what was meant by the phrase “your wool”. Lord Campbell CJ said at E & E 984; ER 1179:
  1. There cannot be the slightest objection to the admission of evidence of this previous conversation, which neither alters nor adds to the written contract, but merely enables us to ascertain what was the subject matter referred to therein.
  1. [161]
    The second additional basis for consideration of extrinsic facts is that such facts may be used to interpret words which have a technical, trade or customary meaning or special meaning as between the parties, particularly where the words used by the parties do not have an ordinary meaning.[45]  The underlined passage in the quote at [159] is an articulation of this principle.

Analysis   

  1. [162]
    The subject matter of the Tractile contract is the supply and installation, inter alia, of a Tractile roof.  That roof is particularised in paragraph [42](d) above.  Most relevantly, Tractile must supply and install the Tractile roofing system comprising supply and installation of Tractile Eclipse Roof, Ridge, Barge and Hip roof tiles and supply and installation of Tractile Solar Eclipse PV roof tiles with built in heating system.
  2. [163]
    The quotation does not contain any specifications or particulars which explain what a Tractile Eclipse roof tile might be.  Nor does it contain any specifications or particulars which explain what a Tractile Solar Eclipse PV roof tile is.  However, it is plain from the terms of the quotation that the Tractile tiles are a propriety product of Tractile.  In those circumstances, regard may be had to extrinsic facts to identify the meaning of those words, because the contract is ambiguous in that regard, and/or because that evidence is necessary to identify the subject matter of the contract and/or because evidence is necessary to interpret words which have a special meaning as between the parties.
  3. [164]
    To give meaning to the words in the contract, regard may be had to relevant facts known to both parties, though not to evidence of subjective intentions.  The plaintiffs rely on the following:
    1. The specifications sent to the plaintiffs by Tractile described in paragraph [18][26] above;
    2. The website statements at about the time of entry into the contract described in paragraph [27] above; and
    3. The Tractile Eclipse document referred to in paragraph [16] above.
  4. [165]
    Those documents are relevant in my view to the interpretation of the words “Tractile Eclipse roof tile” and “Tractile roof” and similar phrases in the Tractile contract.  They are documents the content of which was known to both parties and indeed were provided by one party to the other for the purpose of identifying what the characteristics of a Tractile roof were.  They were not informal nor conditional in their style or content.  That is particularly true of the specification which was prepared in a style which presented as carefully considered and specific.  I consider that those document may be used to construe the words in the contract.
  5. [166]
    I also accept the plaintiffs’ contention that those documents identify as a characteristic of a Tractile roof that it is safe for the collection of drinking water because it is painted with a Dulux paint certified for that purpose.  That is objectively communicated by the specification in two ways.
  6. [167]
    First, it is communicated by the express words cited in paragraph [23] and [27] above.
  7. [168]
    Second, it is impliedly communicated by the reference to AS2049:2002 in both the website and the specification.  The evidence before the Court on this is the Fraser-Lever report which was ultimately tendered for all purposes.  As set out in paragraph [84] above that report states that clause 4.6 requires a roof which meets that standard to, in effect, be safe for collecting drinking water.  While the plaintiffs are unlikely to have known that fact at the time, the issue is not what the plaintiffs’ subjectively knew, but rather the characteristics of a Tractile Eclipse roof and roofing tile communicated objectively by the specification.  The only purpose of referring to the standards is to communicate that the tiles meet those standards.  The attachment to Mr Terpstra’s email referred to at [16] above does not go as far or into as much detail as the specification.  However, it is not inconsistent with it.
  8. [169]
    Further, in my view the characteristic of a Tractile Eclipse roof goes beyond merely being safe to drink run-off.  It is also certified as safe for that purpose.  That is communicated by the express words introducing the list of standards in the specification.  It is also an inevitable implication of reference to those standards.  It is plain from the Fraser-Lever report that a roof will not comply with clause 4.6 (or any other standard) unless compliance is demonstrated by credible certification.     It would be remarkable if compliance with technical standards for a building product could be established just by the supplier saying it is so, rather than by some form of certified testing. 
  9. [170]
    Further, I consider it notorious in the building industry that building products not certified as complying with applicable statutory standards will not obtain necessary approvals, as occurred here, thus preventing the homeowner from obtaining the benefit of the contract.  For that reason as well, I consider that the Tractile contract should be objectively construed as requiring the roof to be certified safe for collecting drinking water.
  10. [171]
    In my view, having regard to the relevant evidence, on the proper construction of the Tractile contract, a Tractile Eclipse roof tile and roof when installed will be safe to collect rainwater for drinking, will be certified as safe and will meet AS2049:2002 in that respect.[46] 
  11. [172]
    The defendants’ submission referred to in paragraph [154](b) provides no answer to this analysis.  In the first place, it depends on me accepting Mr Terpstra’s evidence that there were in fact two different alternative paint options at the time of entry into the contract.  For the reasons given, I do not find him a reliable witness.  But even if I accept his evidence that there were two paints, one giving a safe surface and the other uncertified as safe, that is still no answer to the above analysis.  That is because none of the documents relevant to the identification of the characteristics of the Tractile tile in respect of safety for drinking say any such thing.  It is extrinsic facts known to both parties which are relevant, not facts kept secret from the other party and not disclosed in documents provided to the other party. 
  12. [173]
    I should add that I also consider that the plaintiffs’ submissions focussing on the plans and specifications provides another basis to conclude that the content of the specification document, in particular, are incorporated into the contract.  Mr Hogg submitted that that could not be the case because the specifications under the contract were to be included in Schedule 1 and nothing is so included.  But to read the contract that way would lead to the absurd result that there were no specifications (nor indeed any plans).  Not only is that objectively an unlikely construction of a contract of this kind, but other terms of the contract also impliedly contemplate that there are plans (of the roof required for the house) and specifications (for the proprietary roof system to be installed).  In the circumstances, on the proper construction of the contract the parties would be taken to adopt plans and specifications for the work which are objectively relevant to that purpose.  For the specifications, that plainly includes in my view the specification document for the reasons already given as to the objective importance of that document to the parties’ dealings.

Breach of contract: tiles not certified for collection of drinking water

  1. [174]
    The defendants conducted the trial on the basis that the paint used on the roof was Kossan paint and that Kossan paint was not certified safe for use to collect drinking water.  Further, Mr Perkins and Mr Terpstra both gave evidence consistent with that proposition.   Mr Terpstra was the most direct.  He gave evidence that Tractile roof tiles were painted with Dulux or Kossan and the plaintiffs’ tiles were not painted with Dulux.  Neither gentleman gave evidence that Kossan paint was certified safe for collecting drinking water.  The analysis by Fraser-Lever supported the conclusion that it was not.  Kossan was accepted as providing salt protection but not referred to in relation to safe run-off.  I find that Kossan paint was applied to the plaintiffs’ tiles and that that paint was not certified as safe for collecting drinking water. 
  2. [175]
    I also am very doubtful that the Kossan paint applied was, in fact, safe for the collection of drinking water (at least on the evidence before me):
    1. Mr Terpstra gave evidence that Kossan paint was safe for drinking.  I do not accept that evidence from Mr Terpstra uncorroborated by any other evidence for the reasons I have already articulated;
    2. The only other evidence before the Court as to the nature of Kossan paint was Ms Nozaki’s evidence that Kossan paint was used as anti-foul paint, though that was not admitted for the truth of the statements by the person she spoke to in Malaysia;
    3. The inference from the Fraser-Lever report is that the Kossan paint referred to by Tractile in their instructions to Fraser-Lever was a paint certified for a highly corrosive environment, which is not a characteristic which is likely to be consistent with safe run-off; and
    4. As between the plaintiffs and the defendants, it is Tractile who would be able to put evidence of the safety of the Kossan paint before the Court.  It did not do so, despite the issue being central to the trial since their amendment made two years ago.  
  3. [176]
    Not only was this a breach of an express obligation under the contract, it was also a breach of various suitability and certification terms incorporated into the Tractile contract or contained in the product warranty.
  4. [177]
    The Tractile contract required:
    1. the Works to comply with the relevant codes, standards and specifications that the Works are required to comply with under any law (Clause 2.1);[47]
    2. the Works to be done in accordance with, and to comply with, the Home Building Act or any other law (clause 11.2);[48]
    3. the Works to be carried out in accordance with all relevant laws and legal requirements (section 21 of the QBCC Act); and
    4. that the Tractile roof tile products be manufactured to Australian standards.
  5. [178]
    The Tractile contract also required:
    1. all materials supplied to be good and suitable for the purpose for which they are used (clause 11);
    2. all materials supplied for the works to be good and having regard to the relevant criteria, suitable for the purpose for which they are used (section 20 of the QBCC Act);
    3. Tractile roof tile products to be fit for the purposes of roof cladding for which goods of that kind are commonly supplied; and
    4. Tractile roof tiles to be fit for all the purposes for which goods of that kind are commonly supplied (under s. 54 of the ACL).
  6. [179]
    The failure to supply and install a roof certified safe for collection of drinking water was also a breach of the above provisions and the ACL (as dealt with further below).

Conclusion

  1. [180]
    Tractile Combined and Tractile P/L breached the Tractile contract and the warranties under that contract by failing to supply and install Tractile Eclipse roof tiles which were certified safe for collecting drinking water and which met the requirements of AS2049:2002.

Breach of contract: WaterMark certification

Context

  1. [181]
    The plaintiffs contend that the defendants breached the various obligations mentioned in paragraph [177] above by supplying and installing the Tractile roof without having WaterMark certification for the solar water heating component in so far as it was used to heat hot water for domestic use.  Some context is needed to understand the issue raised.
  2. [182]
    First, it will be recalled that one of the elements of the Tractile roof was its ability to heat water by use of solar power.  This aspect of the system involved the circulation of pressurised water through the solar roof tiles.  It will also be recalled that that water existed in a close system which was not intended to mix with water used for any other purpose.  That water would be heated through contact with the solar panels and the roof tiles, and exposure to the sun.  That water would then be circulated to a heat exchanger (the Rotex tank in this case) so that heat from the water in the Tractile system could be transferred to water to be used for other purposes.  For the house, the system was designed to heat water for use in the pool, for under floor heating, and most relevantly, for domestic hot water use.
  3. [183]
    Second, the heat exchange in the Rotex tank worked by use of metal coils which were in the tank.  There was a different coil for each heated water system (being the pool, the floor heating and domestic use).   The water used in each of those system would flow through the coils.  Heat from the solar heated water in the Tractile system was transferred to the water in the coils by absorption of the heat through the skin of the coils.  That is, coils were surrounded by the solar heated water and the water for inter alia domestic use, was inside the coils.  However, the water in the coils did not come into contact with the solar heated water unless there was a crack in the coil.
  4. [184]
    Third, products including water heating products, installed and used, or intended to be installed and used, in drinking water plumbing installations (including water heating products which heat drinking water) must comply with Part A5.3 of the Plumbing Code of Australia (PCA).  To meet the requirements of that part the product must be certified as meeting the standards in AS4020 and certified to meet the standards in the WaterMark certification system.
  5. [185]
    The WaterMark system is an independent body run by the Australian Building Codes Board.  It identifies certain products which fall within the scope of the WaterMark system and then identifies the standards which those product must meet.  So, the PCA incorporates by reference the WaterMark system.  Because it is part of the system of standards relevant to Part A5.3 PCA, the WaterMark system also relates to products, installed and used, or intended to be installed and used, in drinking water plumbing installations.
  6. [186]
    It was unclear to me whether AS4020:2002 required certification separate from WaterMark certification.  It seemed likely that it did, but the focus in argument was on the WaterMark system.  It probably matters little for two reasons:
    1. Because it is uncontentious that the solar water heating component of the Tractile roof did not have WaterMark certification; and
    2. It is uncontentious that if the Tractile roof did not need WaterMark certification, it did not need any other certification under Part A5.3.

The issue

  1. [187]
    The issue which arises is a narrow one.  It was uncontentious that the water in the Tractile system did not come into direct contact with the water in the domestic hot water coil because they were kept separate by the metal of the coil.  It was also accepted by the plaintiffs and the expert who gave evidence in the plaintiffs’ case (Mr Brown) that the heated solar water system incorporated into the Tractile roof did not need WaterMark certification unless there was a cross connection between the water in that system and the water in the coils.  Tractile not surprisingly contended that there was no such cross connection.  It might seem that separation by the metal coil means that there is no such cross connection.  That is the contention of Tractile.
  2. [188]
    However, in the PCA cross connection is defined to mean “any actual or potential connection between a water supply and any contaminant”.  It was not disputed that the water in the Tractile system would be a contaminant as defined in the PCA.  Mr Brown expressed the opinion that water in the Rotex tank was a potential connection because if the coil cracked, the drinking water would be contaminated by the water from the Tractile system which surrounded it in the Rotex tank.  
  3. [189]
    The SRRC consistently expressed the opinion that WaterMark certification was required for the solar water heating system incorporated into the Tractile roof.  The plaintiffs argued at trial that SRRC was correct in that opinion in reliance on Mr Brown’s analysis.

WaterMark certification was required

  1. [190]
    For the reasons that follow, I accept Mr Brown’s opinion. 
  2. [191]
    First, I accept that if the coil containing drinking water cracked, the drinking water in the coil could be contaminated by water from the Tractile system.  Mr Hogg suggested to Mr Brown that his opinion was mistaken because the water in the coil was under pressure and so if there was a crack, water pressure from inside the coil would prevent contamination.  Mr Brown rejected that suggestion and described the mechanism by which contamination could still occur.  Mr Brown’s evidence, both oral and written, struck me as logical, professional, impartial and clear, generally and on this issue in particular.  I saw no basis to doubt his opinion on this matter.  
  3. [192]
    Second, the defendant contended that the Court should conclude that on the proper construction of the PCA there was no ‘potential connection’ between the water in the Tractile system and the drinking water in the heating coil.  Mr Hogg submitted:
  1. 59.
    The defendants have not been able to find any cases considering the interpretation of the definition of ‘cross-connection’ in the Plumbing Code of Australia, but they submit that a proportionate and practical approach should be taken. It cannot be correct that the Plumbing Code of Australia requires certification of plumbing installations where there is no appreciable risk of a product coming into contact with water intended for human consumption.
  1. 60.
    The same approach ought be taken for determining whether a product requires WaterMark certification. Regarding the water circulating through the pipes in the Tractile System, if there was no reasonable likelihood of that water coming into contact with drinking water then WaterMark certification is not required.
  1. [193]
    Mr Brown expressed the contrary view in his report.  He frankly accepted that in ordinary operation no connection would occur, (as Mr Terpstra repeatedly asserted).  However, he considered that the prospect of a break or failure in the coil was sufficient to give rise to a potential connection.  He explained his views further in cross examination:

His Honour:

Well, let me articulate it in a way you might feel more comfortable answering.  Is there an understanding amongst engineers and tradesmen or women who use the Plumbing Code of Australia as to what potential connection means?

Mr Brown:

Yes.

His Honour:

And what is, in your opinion, the common understanding shared by engineers and tradespeople who work with the code as to the meaning of potential connection?

Mr Brown:

A cross-connection or potential connection is always a potential risk.  A cross-connection can exist and may never ever arise but there are certain precautions that require the Plumbing Code requires us to take within plumbing services to prevent that risk from ever occurring.  And so in various types of plumbing services, we are required to put on particular valves or take particular measures, such as providing an air gap, to prevent that risk from ever presenting itself.

  1. [194]
    He addressed the issue further:

Mr Hogg:

But the view within the industry is not that every potential risk needs to be taken into account.  There needs to be some proportion of approach to managing the potential for there to be a cross-connection?

Mr Brown:

No.  I wouldn’t agree with that.  The view in the industry and as expressed in the Plumbing Code is that all potential risks must be addressed to the degree necessary.

Mr Hogg:

To the degree necessary.  Yes?

Mr Brown:

Yes.

Mr Hogg:

That’s what I’m referring?

Mr Brown:

And there are different categories of necessity.

Mr Hogg:

Right.  But my point is that it’s not an obligation to deal with every possible risk of cross-connection because that would be impossible?

Mr Brown:

No.  There is a responsibility to address every possible risk and that is done through complying with the Plumbing Codes and, you know, having certain things tested and that degree mitigated to the extent, however, that testing is undertaken - certifications and things of that nature are done.  So I think - I would make the decision between:  do we have to assess every potential risk:  yes;  Is every potential risk addressed fully:  no, in terms of is something done about every possible risk.  So, yes, we must address every potential risk, but whoever the certification authority or whatever the standard says at that time, may deem the risk to be sufficiently low that, okay, we’re not going to impose a requirement on that at this time.

[underlining added]

  1. [195]
    While it is ultimately a matter for the Court to construe the words in the PCA, I  consider that the Court can consider the approach taken to those words by experienced persons in the industry, particularly where the Court is construing building code provisions which must be applied in practice every day.  In any vent, to my mind, the approach which Mr Brown articulates is consistent with a sensible approach to regulation of risks of contamination to drinking water, which can have quite significant health consequences.  One reads potential connection widely and thereby identifies all possible risks, and then the regulator forms a view as what if any requirements to impose for that kind of risk.  If none are imposed, WaterMark certification is required, but easily obtained.  As Mr Travis correctly submitted, there is no evidence that complying with the PCA or obtaining WaterMark certification would be expensive or even difficult.
  2. [196]
    Such a reading is also consistent with the ordinary meaning of the word potential, which in its relevant meaning is “possible as opposed to actual”.  It is certainly possible for any coil to break or crack, building products are far from perfect.  
  3. [197]
    I concur in Mr Brown’s opinion that the prospect of a crack or break in the coil containing drinking water in the Rotex tank is a potential connection for the purposes of the PCA.
  4. [198]
    Third, Tractile did not lead any expert evidence to contradict Mr Brown’s opinion.  Such opinion could have been obtained as part of the Fraser-Lever report, as Mr Perkins himself said.  As I have found, I do not accept Mr Perkins’ evidence that Fraser-Lever were instructed to advise on all compliance issues.  The report itself identifies the scope of the instructions, being structural and electrical compliance.  As I have said, I also do not accept that by their silence on plumbing and drainage issues, the engineers impliedly confirmed that no such standards had to be met (despite the excruciating detail in which they address other standards which arise).  What is correct, however, is that Tractile could have instructed the engineers to analyse compliance with plumbing and drainage standards.  I think it possible that Tractile chose not to seek advice on that subject.  Whatever the reason for that failure, the fact is that Tractile had the opportunity to obtain evidence on the subject and did not.  
  5. [199]
    Fourth, the Rotex tank installed in this case was accepted as having WaterMark certification.  Tractile did not rely on this point in final submissions, but I want to deal with it in any event.  The fact that the Rotex tank had obtained WaterMark certification does not, to my mind, compel the conclusion that the Tractile roof tiles did not.  Rather the contrary is true in that it tends to support the conclusion that the coil in the Rotex tank was considered by those seeking and granting certification to be a potential connection to the drinking water supply.  The only way this might assist the defendants is if it could be established that the Tractile solar heated water system was a separate and distinct component from the Rotex tank.  There is no expert evidence that is so.  Mr Brown’s view was to the contrary.  Further, it seems correct to me that the Tractile tiles and the Rotex tank are part of a single heated water system because the Tractile system is responsible for the conditions of the water in the Rotex tank.  Mr Brown said the Tractile system was a “Solar water heating system” for the purposes of the WaterMark certification system.[49]  I agree in and accept his view in this regard.
  6. [200]
    This conclusion answers Mr Hogg’s submission that the Tractile heated water system did not require certification because only the Rotex tank required certification and the plaintiffs rather than Tractile installed that tank.
  7. [201]
    I find that Tractile and Tractile Combined breached the provisions identified in [177] to [178] above in that:
    1. The Tractile heated water system incorporated in the Tractile Eclipse solar roof tiles required WaterMark certification and had to comply with AS4020 and Part A5.3 PCA; and
    2. That system did not have any such certification.

Breach of contract: Failure to supply and install hardware

  1. [202]
    It is not contentious that Tractile did not supply or install any of the water heating or solar electricity plant.  The plaintiffs purchased and installed the Rotex tank and, as explained in paragraph [60](b) above, purchased and installed a solar power system once the roof was replaced. 
  2. [203]
    There is a dispute as to whether this change in the manner of performance of the Tractile contract was a variation by agreement or rather was the response of the plaintiffs to Tractile’s failure to supply those items within a reasonable time.
  3. [204]
    I accept the plaintiffs’ submission that there was no evidence to establish a variation.  To the contrary, the contemporaneous evidence shows only repeated demands by the plaintiffs for Tractile to supply and install the plant items promised under the Tractile contract.  Mr Perkins resisted those demands on various grounds.  For example:
    1. On around 22 January 2020, Mr Perkins resisted demands for delivery because “[w]ith the roof all up in the air, if you are saying the roof is going to be torn off, why is the need to?” 
    2. On 30 April 2020, Mr Perkins resisted Ms Nozaki’s demands with a complaint that “your project has no margin for us. We discounted the project.”  
    3. On 6 May 2020, Mr Perkins resisted Ms Nozaki’s demands by complaining that the suppliers wanted payment up front before “anything is to turn up to site.”
  4. [205]
    It seems the real reason (or at least a good reason) for not supplying and installing the plant items is that none of the Tractile entities were licensed to do that work and Tractile did not seem inclined to retain subcontractors who were licensed to do the work.
  5. [206]
    Accordingly, I find that the defendants’ failure to supply and install the Rotex tank and the solar power system was a breach of the Tractile contract, though whether it sounds in damages and if so how is another question.

Damages for breach

Summary of heads of damage

  1. [207]
    The plaintiffs seek the following heads of damage:
  1. (a)
    The so-called “rectification” damages comprising:
  1. (i)
    $273,014.88 as the cost of removing the Tractile roof and solar system and replacing it with a non-solar roof;
  1. (ii)
    $78,100 for the cost of acquiring and installing a ground based solar farm, the Rotex tank and a battery system;
  1. (b)
    $98,000 for loss of use of the house from 1 April 2020 to 31 December 2020; and
  1. (c)
    $50,000 as damages for distress.

The rectification damages

  1. [208]
    Two threshold issues need to be dealt with before analysing the specific sums claimed.

Effect of restitutionary order on contractual measure of loss

  1. [209]
    The so-called rectification damages are damages which on the plaintiffs’ case arise because of the costs incurred by the plaintiffs in carrying out the work on the house so as to put them in the position they would have been in if the Tractile contract had been performed.  In that sense, rectification damages is a convenient short hand description.
  2. [210]
    I am satisfied that the plaintiffs incurred the costs identified in removing the Tractile roof, installing a certified roof and in acquiring the items of plant they identify. There are some specific issues which require consideration in relation to each item claimed and I deal with those next.  There is, however, a point of principle applicable to all those damages which must be first determined relating to the way the order for restitution impacts on the rectification damages.
  3. [211]
    The question which arises is whether the plaintiffs’ damages should be awarded taking into account the order for restitution of the whole of the funds paid under the contract or not.
  4. [212]
    The plaintiffs contend that it should not be considered.  The contention is best summarised by Mr Travis’ submission in address:[50]

The money coming back to my clients by operation of section 42 is with respect to the roof and the house irrelevant.  It is akin to my clients having dropped money; someone picked it up that wasn’t entitled to it; they got it back.  They – that money goes – is they’re entitled to come back because there was no entitlement, whatsoever.  It was completely annihilated by the effect of the statute.   So all they do is get back to them what was always rightfully theirs, subject to a claim being made by the person who’s carried out work for certain expenses.  

  1. [213]
    The defect in this submission is that the contract is not completely annihilated by the statute.  As I have found, the Tractile contract is still enforceable by the innocent party.  That will include the innocent party having rights to sue for breach of the contract.  In that case, when measuring loss, the Court must determine what loss is suffered by the innocent party by reference to the facts of the case relevant to the measure of damages necessary to compensate the plaintiffs for the breaches.  Those facts must include whether and to what extent they paid any money under the contract for defective work.  The effect of the restitutionary order is that they did not pay any money under the contract (or at least they are entitled to recover all money paid).
  2. [214]
    The position is the same in substance as one in which a buyer enters into a contract for delivery of a widget for $10 where the obligation to pay does not arise until delivery.  In breach of contract the supplier does not supply the widget.  The buyer then goes into the market to buy a widget.  If the buyer has to pay $15, the damages are $5.  If on the other hand, the buyer pays for the widget but none is delivered or (as is the case here) the widget is useless, the damages are $15, because the $10 paid for the item not delivered is part of the loss.
  3. [215]
    If the plaintiffs were entitled to obtain the rectification costs without allowing for the restitutionary order, then the plaintiffs would be overcompensated.  The plaintiffs were always going to have to have pay for the supply and installation of a roof, a solar power system and water heating plant for the house.  If the Tractile roof was not installed, they would need another roof installed with different plant.  The effect of the restitutionary order is that the plaintiffs are entitled to be refunded the money paid to Tractile.  Therefore, although the Tractile roof was there and had to be removed, the plaintiffs effectively will have paid nothing for it.  One cannot ignore, of course, that the Tractile roof had to be removed, and the cost of that will sound in damages.
  4. [216]
    I see nothing in the QBCC Act which compels a contrary conclusion, or alters the ordinary operation of the compensatory principle in cases of this kind.
  5. [217]
    In argument I raised with counsel the question of whether the solvency of Tractile P/L and Tractile Combined was a relevant consideration in this analysis.  That arises as a potential issue because while the entitlement to restitution makes the situation analogous to that where a party has not paid under a contract, if the restitutionary order is practically worthless, the analogy falls down.  Both counsel in address accepted this could be an issue and both accepted there was no evidence that the restitutionary judgment would not be met.  They diverged on whose onus it was to plead and prove that the judgment would not be met.  In my view, the onus lay on the plaintiffs.  If they wished to contend that their loss included the loss of the money paid under the contract unenforceable at the suit of the builder/s, that needed to be pleaded.

Analysis of payments under the contract

  1. [218]
    The Tractile contract was a lump sum contract of $203,500 incl. GST.  The Scope of Work is set out in paragraph [42](d) above, which shows it included both supply and installation of the roof as well as of the plant. There is no apportionment of the price.  So two questions arise:
    1. First, is the work for which amounts are claimed by the plaintiffs as rectification costs properly characterised as costs of obtaining what was promised under the Tractile contract?
    2. Second, if so, what is the proper measure of the loss to which the plaintiffs are entitled?

Work and costs arising from replacement of the roof

  1. [219]
    I find that the plaintiffs were justified in removing the Tractile roof and replacing it with a new roof which was safe for the collection of drinking water and for which they could confidently expect the provision of evidence of necessary certification and the quick issue of a Form 21.  Indeed, in my view they would have been justified in replacing the roof earlier than they did, though it is understandable they would hesitate before taking such a major step.  It was plain from at least the delivery of the Fraser-Lever report, that Tractile would not be addressing the uncertified paint issue any further.  It was plain also from the beginning that Tractile would not address the WaterMark issue.  Tractile’s attitude to this matter was to repeatedly assert that they were in the right and SRRC was in the wrong. 
  2. [220]
    The plaintiffs claim the total sum paid to Mr Sander’s company under the contract for removal and replacement of the roof.  I find that work was necessary to obtain what was promised under the contract in the sense of obtaining a roof which was certified in respect of all statutory and code requirements.  The roof installed did not have the extra performance qualities which the Tractile roof had: being solar power and solar heated water functions.   In that sense, the plaintiffs were getting less than they would have under the Tractile contract if performed.  I see no reason to question the sum paid for that work.  While it is plainly higher than the Tractile roof, there would have been additional costs in removing the Tractile roof and inefficiencies arising from carrying out this work after demobilisation at site.
  3. [221]
    I accept that the plaintiffs paid $273,014.88 as the cost of removing the Tractile roof and solar system and replacing it with a non-solar roof.

Work and costs from installation of the plant items

  1. [222]
    The hardware items need to be dealt with separately.
  2. [223]
    The first item is the cost of supply and installation of the ground based solar array.  I accept that the Tractile contract, if performed, would have provided the plaintiffs with a solar power system.
  3. [224]
    The solar power system installed is different in character from the system to be provided under the contract.  The plaintiffs have adopted a more traditional solar power system using a ground based solar array.  However, the integrated Tractile solar roof system is novel and I also accept that the solar power system installed reasonably seeks to achieve the object of providing solar power to the house in place of the Tractile system, with one caveat.  
  4. [225]
    The Tractile system was to be a 10kW system.  The solar power system now installed is a 20kW system.[51]  In that sense the new system is not like for like with the Tractile system.  However, I also note that the plaintiffs did not install an integrated solar water heating system of the kind built into the Tractile roof.  Again given the unique nature of the Tractile technology, I do not think it unreasonable that the plaintiffs abandoned this part of the scope of the work.  However, the omission of that source of power to heat the pool, the floor and the hot water meant that more solar power would be required to carry out those tasks.  In all the circumstances, I think it reasonable to accept that the larger solar power system was necessary to address some or all of that shortfall.
  5. [226]
    I accept that the cost of $33,450 was incurred in substitution for that which should have been provided if the contract had been performed.
  6. [227]
    The plaintiffs also claim a sum in respect of the Rotex tank.  That sum should be allowed as a cost thrown away by the breach of contract.  Once the Tractile roof had to be removed, the Rotex tank became obsolete.  It is analogous to the cost of removing and disposing of the Tractile roof.  That cost was $10,050. 
  7. [228]
    The plaintiffs also claim a sum for supply and installation of 3 x 4.5kW batteries.  While this is what was promised under the contract, the plaintiffs have not acquired those batteries, and it is uncertain that they ever will.  In that circumstance, the plaintiffs cannot maintain a claim for the cost of such batteries, though some amount should be deducted from the contract price against which the costs incurred by the plaintiffs are to be considered.  In the absence of other evidence I adopt the figure in the invoice of $29,150, which is roughly contemporaneous with the entry into the contract.[52] 

Calculation of the rectification damages

  1. [229]
    To obtain a roof and solar power system analogous to what was to be provided under the contract the plaintiffs incurred costs of $273,014.88 + $33,450 = $306,464.88.[53]  The contract sum that should have been paid to achieve that object is the contractual lump sum less the cost of the batteries and the Rotex tank, a total of $39,200, being $203,500 - $39,200 = $164,300.  Accordingly, it cost the plaintiffs $142,164.88 more to obtain what was promised under the Tractile contract than they would have paid under that contract.[54]  To that must be added the wasted cost of the Rotex tank of $10,050.
  2. [230]
    The result is that the plaintiffs are entitled to rectification costs of $152,214.88.
  3. [231]
    To be clear, the restitutionary sum has no part to play in this calculation.  The judgment for that sum has the effect of ensuring that no money paid under the contract is retained by Tractile and, as a logical consequence, the plaintiffs should be treated as having paid nothing to Tractile under the contract.  Accordingly, the correct approach to measuring the loss is to calculate the amount incurred by the plaintiffs to obtain what was promised under the contract over and above the sum they were obliged to pay to Tractile.

Loss of use of the house

  1. [232]
    The plaintiffs claim damages for being kept out of use of the house based on the assumption that they could and would have been able to move in with the security of a Form 21 on 1 April 2020 but for the defendants’ breaches.  However, I have found that regardless of the defendants’ breaches, I am only persuaded on the evidence that that would have occurred on 1 September 2020.  The plaintiffs were kept out of occupation for three months.  I find it reasonable for the plaintiffs to have delayed occupation in the absence of a Form 21, particularly Ms Nozaki who was understandably reluctant to go into occupation without that certification.
  2. [233]
    The plaintiffs calculate their loss by reference to the market rental value of the house while they were unable to occupy it.  Given the nature of the property and the fact that the plaintiffs were plainly going to occupy it as soon as they could and given that the alternative was living in a comfortable but in no way comparable cottage, I consider that the rental value of the house is a reasonable measure of compensation for being kept out of occupation.
  3. [234]
    Adopting Mr Leeson’s figures, and adjusting for the shorter period, I determine the quantum of the loss at $30,000.
  4. [235]
    The plaintiffs went into occupation of the house on about 1 January 2021.  They do not seek damages for loss of use of the house in the ensuring period, but rather seek damages for distress and loss of amenity.  As explained below, I am not persuaded that a claim under that heading arises in this case.  However there is a component of the loss claimed under that head which I think does have merit.  The house had no Form 21.  That meant insurance was not available and the plaintiffs could not make full use of their home.  They could not entertain as they wished and were exposed to insurance risks.  Then the problem with the safety of the run-off emerged.  That meant they could not make full use of the tap water in their home.
  5. [236]
    Right up until the connection of the new roof, the flushing of the tanks, and then the issue of the Form 21 in January 2023, the plaintiffs use of their new home was limited by the problems created by Tractile’s breaches of contract.  It is difficult to assess damages for this period but where a loss plainly arises on the evidence a Court is obliged to do its best.[55]  In my view, one reasonable way of measuring compensation for this loss is by an assessment of the reduction in the benefit of use of the house, adjusted for the fact that the plaintiffs were familiar with the problems and willing to live in the house in any event, and applying that lost benefit to the market rental value.  Doing the best I can, and approaching the matter conservatively, I think the benefit of the use of the house was reduced by about 7.5% over a two-year period.  Adopting Mr Leesons’ weekly rental estimate of $2700 per week, that gives a loss of $10,530 per year or $21,060 in total.

Damages for distress and disappointment

  1. [237]
    The general rule is that damages for anxiety, disappointment and distress are not recoverable in an action for breach of contract. The principal exceptions to that rule are where the contract is one whose object is to provide enjoyment, relaxation or freedom from molestation, or where the damages proceed from physical inconvenience caused by the breach.[56] 
  2. [238]
    I reject the plaintiffs’ contention that the Tractile contract was within the former category.  There is nothing about a promise to install a roof and solar power and heating system which gives the contract the object of providing “enjoyment, relaxation or freedom from molestation.”  That might be an incident of performance of the contract, but that is not the object of the contract.  A fortiori where the Tractile contract was not one for the provision of the whole house but just one part of it.
  3. [239]
    Nor do I accept that distress is available because of physical inconvenience caused by the breach.  To the extent the breach led to a diminution in the use that the plaintiffs could make of the house, it has already been addressed.  Beyond that, the matters identified are no more than claims for loss for anxiety and distress.  I do not doubt that the plaintiffs suffered a good deal of both from the defendants’ incompetent performance and dismissive responses to its shortcomings.  However, I do not accept this is one of the cases where the law provides a remedy for that experience.

Conclusion on damages

  1. [240]
    The plaintiffs are entitled to damages for breach of contract in the amount of $152,214.88 + $30,000 + $21,060 = $203,274.88 against Tractile P/L and Tractile Combined.

Liability of Trac Group and Tractile P/L: ACL

Trac Group

  1. [241]
    The plaintiffs seek judgment against Trac Group in addition to judgment against the parties to the contract, Tractile P/L and Tractile Combined.  The plaintiffs contend Trac Group is liable on the breach of the guarantees of acceptable quality and fitness for purpose under ss 54 and 55 ACL as a manufacturer.  The Tractile roof tiles and Tractile solar roof tiles, separately and as part of a Tractile roof breach both guarantees.  It is sufficient to focus on s. 55 ACL.  That section provides:
  1. (1)
    If:
  1. (a)
    a person (the supplier) supplies, in trade or commerce, goods to a consumer; and
  1. (b)
    the supply does not occur by way of sale by auction;
  1. there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit.
  1. (2)
    A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that:
  1. (a)
    the consumer makes known, expressly or by implication, to:
  1. (i)
    the supplier; or
  1. (ii)
    a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or
  1. (b)
    the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii).
  1. (3)
    This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier, the person referred to in subsection (2)(a)(ii) or the manufacturer, as the case may be.
  1. [242]
    The Tractile tiles were required by this section to be fit for the purposes of installation as a roofing product which was certified as safe for use in collecting rainwater for personal use and for heating water for domestic use by way of solar heated water.  The use of the roof for both purposes was repeatedly represented in the defendants’ marketing material.  I have found that the Tractile roof did not comply with that guarantee:
    1. The tiles were not certified safe for collecting drinking water; and
    2. The solar tiles were not certified for inclusion in a solar heated water system for domestic use hot water.
  2. [243]
    Section 271 provides a remedy against a manufacturer of goods where the goods fail to meet the suitability guarantee.  That provision relevantly provides:
  1. (1)
    If:
  1. (a)
    the guarantee under section 54 applies to a supply of goods to a consumer; and
  1. (b)
    the guarantee is not complied with;
  1. an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.
  1. (2)
    Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of:
  1. (a)
    an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or
  1. (b)
    a cause independent of human control that occurred after the goods left the control of the manufacturer; or
  1. (c)
    the fact that the price charged by the supplier was higher than the manufacturer’s recommended retail price, or the average retail price, for the goods.
  1. [244]
    Trac Group did not plead reliance on s. 271(2) and made no submission that it applied if Trac Group was otherwise a manufacturer.  The issue in dispute is whether Trac Group is a manufacturer of the goods.  Manufacturer is defined in an inclusive and expansive manner in s. 7 ACL as follows:
  1. (1)
    A manufacturer includes the following:
  1. (a)
    a person who grows, extracts, produces, processes or assembles goods;
  1. (b)
    a person who holds himself or herself out to the public as the manufacturer of goods;
  1. (c)
    a person who causes or permits the name of the person, a name by which the person carries on business or a brand or mark of the person to be applied to goods supplied by the person;
  1. (d)
    a person (the first person) who causes or permits another person, in connection with:
  1. (i)
    the supply or possible supply of goods by that other person; or
  1. (ii)
    the promotion by that other person by any means of the supply or use of goods;
  1. to hold out the first person to the public as the manufacturer of the goods;
  1. (e)
    a person who imports goods into Australia if:
  1. (i)
    the person is not the manufacturer of the goods; and
  1. (ii)
    at the time of the importation, the manufacturer of the goods does not have a place of business in Australia.
  1. (2)
    For the purposes of subsection (1)(c):
  1. (a)
  1. (b)
    if the name of a person, a name by which a person carries on business or a brand or mark of a person is applied to goods, it is presumed, unless the contrary is established, that the person caused or permitted the name, brand or mark to be applied to the goods.
  1. (3)
    If goods are imported into Australia on behalf of a person, the person is taken, for the purposes of paragraph (1)(e), to have imported the goods into Australia.
  1. [245]
    There was no evidence that Trac Group is the (actual) manufacturer under s. 7(1)(a).  However, the plaintiffs contend that Trac Group is a manufacturer under other parts of the definition.  The plaintiffs contended that Trac Group is the manufacturer under s. 7(1)(b) in that Tractile held itself out as the manufacturer of Tractile product because:[57]
    1. The specification identifies only Trac Group and contains the statements: “Where is the Tractile roof made? Tractile products are made in our manufacturing facility in Malaysia.” (see paragraph [23] above);
    2. The website owned by Trac Group states: “Where is the Tractile roof made? Tractile products are made in our manufacturing facility in Malaysia.”; and
    3. Tractile tiles have imprinted on them: “Manufactured and distributed under licence from Trac Group Holdings Limited…”.
  2. [246]
    The plaintiffs also submit that Trac Group is a manufacturer:
    1. under s. 7(1)(c), in that Trac Group owned the Tractile mark,[58] and caused or permitted the Tractile mark to be applied to the Tractile goods for supply to consumers;[59]
    2. under s. 7(1)(d), in that Trac Group caused or permitted Tractile P/L and Tractile Combined to use those marks to hold itself out as the manufacturer.
  3. [247]
    I accept that Trac Group was a manufacturer under s. 7(1)(b) for the first two reasons articulated by the plaintiffs.  The specification and the website are documents addressed to the public.  Read objectively, the specification communicates that the manufacturer is Trac Group.  As to the website, a potential consumer interested to discover the identity of the person claiming to manufacture the tiles in Malaysia would find on a domain search that the entity was Trac Group.  While not every statement to the public generally or potential customers, in particular, will be sufficient to meet the requirements of s. 7(1)(b), these two matters are sufficient.  The specification is a detailed and formally prepared document which is objectively intended for supply to interested potential buyers (and was so supplied to the plaintiffs).  The website is a declaration addressed to any person searching on the internet.  The marking on the tiles, on the other hand, is equivocal.  While it identifies Trac Group as the ultimate holder of the rights to manufacture, it also communicates that some other entity has done the actual manufacturing under a license. 
  4. [248]
    I am not persuaded by the other factors relied upon:
    1. The evidence relevant to s. 7(1)(c) does not make Trac Group a manufacturer under that subsection.  That subsection requires Trac Group to be the supplier of the goods.  That is not the case here where the suppliers were Tractile P/L and Tractile Combined under the Tractile contract.
    2. As to s. 7(1)(d), a similar problem arises.  What is required is that Tractile P/L holds Trac Group out as the manufacturer, not that Trac Group allows Tractile to hold itself out as manufacturer.
  5. [249]
    The plaintiffs have a claim against Trac Group as manufacturer for relief under s. 272 ACL which relevantly provides:
  1. (1)
    In an action for damages under this Division, an affected person in relation to goods is entitled to recover damages for:
  1. (a)
    any reduction in the value of the goods, resulting from the failure to comply with the guarantee to which the action relates, below whichever of the following prices is lower:
  1. (i)
    the price paid or payable by the consumer for the goods;
  1. (ii)
    the average retail price of the goods at the time of supply; and
  1. (b)
    any loss or damage suffered by the affected person because of the failure to comply with the guarantee to which the action relates if it was reasonably foreseeable that the affected person would suffer such loss or damage as a result of such a failure.
  1. (2)
    Without limiting subsection (1)(b), the cost of inspecting and returning the goods to the manufacturer is taken to be a reasonably foreseeable loss suffered by the affected person as a result of the failure to comply with the guarantee.
  1. (3)
    Subsection (1)(b) does not apply to loss or damage suffered through a reduction in the value of the goods.
  1. [250]
    No submissions were addressed to the measure of loss arising under this provision specifically.  Section 271(1)(a) is irrelevant because any loss in relation to money paid for the Tractile roof has been addressed by the restitutionary order.
  2. [251]
    As to s. 271(1)(b), I consider that each of the heads of loss quantified above fall within the scope of that provision.  Each of those heads of loss can properly be characterised as arising in a common sense manner for the failure to comply with the suitability guarantee in each respect.  As to reasonable foreseeability, both the need to remove the roof if it did not comply with statutory requirements and the loss of use of the house arising from that difficulty are in my view reasonably foreseeable.  Frankly, any company supplying goods for use in the construction of a domestic dwelling should know of the need to comply with the numerous statutory standards applicable in that area of commerce and would be taken to reasonably foresee that consequences of the kind which occurred in this case can arise where the product is not and remains uncertified.
  3. [252]
    Accordingly, I find that Trac Group is liable to the plaintiffs under s. 271(1)(b) for $203,274.

Tractile P/L

  1. [253]
    In case my conclusion that Tractile was a party to the Tractile contract was in error, it is necessary to consider the plaintiffs’ alternative argument in respect of Tractile.  The SOC at paragraph 52(b)(i) asserts, relevantly, that Tractile P/L is a manufacturer because Tractile P/L:

[C]ause or permit their Tractile name, by which they carry on business, to be applied to the Tractile system that are (sic) supplied by Tractile and Tractile Combined. 

  1. [254]
    The allegation invokes the definition of manufacturer under s. 7(1)(c).  The difficulty is that to establish that Tractile is a manufacturer under s. 7(1)(c), it must also be established that Tractile was the supplier of the relevant goods.  Tractile will be a supplier if they are a party to the Tractile Contract.  However, if that is the case, it will be unnecessary to consider the position of Tractile under the ACL.  The plaintiffs did not assert that they would be in a more advantageous position as against Tractile by establishing liability under the ACL instead of under contract. 

Negligence

  1. [255]
    The plaintiffs’ case in common law negligence, separate from the breach of statutory duty case discussed below, alleged a duty incumbent on Tractile P/L and Tractile Combined to carry out the work under the contract with reasonable care and skill.  The pleaded case largely tracked the contract case.  No written submission was made on the negligence case by the plaintiffs nor was it dealt with in addresses.  There was no suggestion that the negligence case pleaded could succeed if the contract case failed nor any articulation of a more advantageous measure of loss in tort.  It is unnecessary to consider this cause of action further.

Breach of statutory duty

Summary

  1. [256]
    The plaintiffs seek damages for the tort of breach of a statutory duty arising under Part 6AA of the QBCC Act.  It is a difficult question of law whether Part 6AA, and s. 74AF in particular, creates any tort for breach of statutory duty.  Counsel have referred me to no authority that has considered the point in relation to the provisions of Part 6AA.  Ultimately, in the present case, the issue is unnecessary to decide because in my respectful view the statement of claim does not plead a private cause of action arising out of Part 6AA. 

Pleaded Case

  1. [257]
    The cause of action for breach of statutory duty is pleaded in the SOC as follows:
  1. 32A.
    Tractile [P/L], Tractile Combined and TRAC Group is each a person in the chain of responsibility for the Tractile System within the meaning of section 74AE of the QBCC Act because…
  1. [258]
    The Statement of Claim then pleads the requirements for a person to be in the chain of responsibility for a product including that the person designs, manufactures, imports or supplies the product and knows or is reasonably expected to know the product will or is likely to be associated with a building. It then goes on:
  1. 32B.
    Pursuant to section 74AF of the QBCC Act, and in the premises of paragraph 32A, above, Tractile [P/L], Tractile Combined and TRAC Group, so far as reasonably practicable, were required to ensure that the Tractile System was not a non-conforming building product for an intended use, being the use pleaded at paragraph 29A, above, which includes the Intended Use.[60]
  1. 32C.
    In the premises of paragraphs 32A and 32B:
  1. (a)
    Trac Group and Tractile [P/L] is each required to provide the required information for the Tractile System and the Tractile products at paragraph 9(a) (Required Information), pursuant to subsections 74AG(1) and (2) of the QBCC Act;
  1. (b)
    Tractile and Tractile Combined is each required to provide the Required Information pursuant to subsection 74AG(4) of the QBCC Act.
  1. […]
  1. 32E.
    Pursuant to section 74AI of the QBCC Act, Mr Perkins was under a duty to exercise “due diligence” (as defined in subparagraph 74AI(3)) to ensure that Tractile, Tractile Combined and TRAC Group complied with the duties pleaded at paragraphs 32B and 32C.
  1. [259]
    This is arguably a sufficient pleading of a tortious claim for breach of a statutory duty, so far as it goes.  However, in respect of these pleaded statutory duties, the pleading goes no further.  It does not assert a breach of these duties, nor does it plead a loss flowing from any such breach.  Instead, the pleading goes on to identify other duties said to arise under the QBCC Act as follows:
  1. TRAC Group, Mr Perkins, Tractile and Tractile Combined – Breach of Statutory Duty
  1. 38A.
    In the premises of the matters pleaded at paragraphs 5(a)-(b), 5, 9-10, 13(b), 25-26, 29, 29A, 30, 30A, 30B, 30C, 32A, 32B, 32C and 32E above:
  1. (a)
    TRAC Group, Tractile [P/L] and Tractile Combined owed to the Plaintiffs a duty of care with respect to the Tractile System to ensure that the Tractile system is not a non-conforming building product for the Intended Use, so far as reasonably practicable; and
  1. (b)
    Mr Perkins owed to the Plaintiffs a duty of care with respect to the Tractile system to exercise reasonable due diligence to ensure that TRAC Group, Tractile and Tractile Combined:
  1. (i)
    complied with the duty pleaded at subparagraph 38A(a) above and;
  1. (ii)
    complied with their respective duties pleaded at subparagraphs 32B and 32C,
  1. because:
  1. (1)
    it was foreseeable to TRAC Group, Tractile [P/L], Tractile Combined and Mr Perkins that a breach of their respective duty could result in the Risks of Harm[61] to the Plaintiffs (or to the class of persons in the position of the plaintiffs);
  1. (2)
    the Risks of Harm were not insignificant;
  1. (3)
    a reasonable person in the position of TRAC Group, Tractile [P/L], Tractile Combined and Mr Perkins would have taken precautions to avoid the Risks of Harm (or similar risks of harm) for which the person might be responsible because…[62]
  1. (4)
    The QBCC Act imposed on TRAC Group, Tractile [P/L], Tractile Combined and Mr Perkins the duties pleaded at paragraphs 32B and paragraphs 32C and 32E (as to Mr Perkins) and:
  1. A.
    the health and safety risk that the Tractile System might pose to the Plaintiffs if comes into contact with drinking water is the kind of risk that the QBCC Act sought to address by imposing those duties;
  1. B.
    the class of persons that the QBCC Act sought to protect which includes the Plaintiffs, extends to consumers and the general public who purchase building products and rely on the suitability of building products for their health and safety; and
  1. C.
    the imposition of the duties extends the existing common law protection of consumers and the general public, which imposes tort duties on persons who are responsible for putting a product into the stream of commerce to take reasonable care for the safety of users who will suffer economic loss associated with mitigating, repairing or rectifying products that negligently pose a health and safety risk to others.
  1. [260]
    The pleading then pleads a breach of the duty in paragraph 38A(a) by Trac Group, Tractile P/L and Tractile Combined.  The breach is said to arise because those defendants failed ‘to obtain the Required Information’ prior to entry into the Tractile contract or alternatively by 31 March 2020.  It is also pleaded that Mr Perkins failed to comply with the duty pleaded at paragraph 38A(b) by failing to ensure that the other defendants obtained the required information before entry into the Tractile contract or alternatively by 31 March 2020.[63]
  2. [261]
    There are several problems with this form of pleading.
  3. [262]
    First, and most importantly, it does not identify the statutory provisions said to give rise to the pleaded duty.  Paragraph 38A does not merely rely on the duties identified in paragraph 32B and 32C, it instead pleads an entirely new duty.  It is difficult to understand the exact content of the duty when no provision is identified. In fact, the plaintiffs appear to allege that a common law duty of care arises, in some way by reference to the QBCC Act.  That understanding of the pleading arises from the reference to ‘duty of care’ in paragraph 38A and the allegations in 32B(b)(ii)(1)-(3).  Of course, the plaintiffs already bring a claim in negligence and it is unclear how the QBCC Act informs that pre-existing duty (though it could conceivably be relevant to its breach).  As such, the relevance of the statute to the pleaded cause of action is unclear.  
  4. [263]
    Second, the content of the duty is dealt with inconsistently.  Paragraph 38A(a) and (b) plead a duty to do all that is reasonably practicable to ensure that the relevant products were not non-conforming building products.  However, the breach pleaded is a failure to obtain a WaterMark certification and a certificate of compliance with the relevant standards.  The failure to obtain that Required Information is not a breach of the duty pleaded.  A breach would arise from a failure to do all that is reasonably practicable to obtain those certifications. 
  5. [264]
    The steps that ought to have been taken to avoid a breach of the duty are not identified, nor have they been clarified during the trial.  That is true in respect of all the defendants, including Mr Perkins.  It could arguably be inferred that the plaintiffs’ case is that each of the defendants had a coextensive duty to get the Required Information or else not sell or install the product.  But that is not pleaded.
  6. [265]
    Third, the duty pleaded is not one that derives from the provisions of the Act. Section 74AF imposes a duty to ensure, so far as is reasonably practicable, that a building product is not a non-conforming building product (“NCBP”) for an intended use (though it would be awkward to describe that duty as a duty of care). A product is an NCBP if inter alia it does not, or will not comply with a relevant regulatory provision. However, the breach that is pleaded is a failure to obtain the Required Information, which paragraph 38B describes as the WaterMark Certificate and certificate of compliance with AS4020 and AS2049:2002.
  7. [266]
    I have found that the Tractile System did require WaterMark Certification. In that sense it was a non-conforming building product.  As indicated above, no breach of an obligation to take reasonable precautions was pleaded against any defendant, such that no breach of s. 74AF arises on the pleading (even putting aside the point made at [262] above). 
  8. [267]
    In addition, the pleaded duty involves a failure to obtain, “Required Information” which is defined in paragraph 32C of the Statement of Claim as being the information required under s. 74AG of the QBCC Act.  Required Information is defined under s. 74AG(7) to mean:
  1. [I]nformation about the product that-
  1. (a)
    for each intended use of the product states or otherwise communications the following-
  1. (i)
    the suitability of the product for the intended use and if the product is suitable for the intended use only in particular circumstances or subject to particular conditions, the particular circumstances;
  1. (ii)
    instructions about how the product must be associated with a building to ensure it is not a non-conforming building product for the intended use;
  1. (iii)
    instructions about how the product must be used to ensure it is not a non-conforming building product for the intended use…
  1. [268]
    Section 74AG imposes an obligation to ensure that a building product is accompanied by the required information rather than a duty of obtain that information.  In any event, no breach of s. 74AG is pleaded.
  2. [269]
    As such, it is difficult to understand how the duties under the Act interact with the pleaded duties.  Ultimately, the SOC appears to plead a common law duty of care which required the defendants to take steps similar to those required under Part 6AA of the QBCC Act.  That is not an action for breach of statutory duty.  It is an action in negligence where the question of breach is informed by the requirements of statute.  I have already dealt with the plaintiff’s claim in negligence.  It is unnecessary to deal further with the plaintiff’s claim for breach of statutory duty.
  3. [270]
    The lack of clarity in the SOC is, in part, reflected by the plaintiffs’ opening submissions:
  1. … As such [the defendants] must ensure, so far as is reasonably, that the Tractile products were suited to the intended use (section 74AF). In doing so, they must provide the information required under section 74AG. 

[…]

  1. The evidence shows that the defendants could not provide the required information for the Tractile System…
  1. [271]
    Here, again, it is unclear whether the breach asserted is a breach of s. 74AF, a breach of s. 74AG or both.  The two are distinct duties but they are treated as interrelated in an unspecified way.  This point is addressed only by the closing submissions of the plaintiffs which describe the duty under s. 74AF as the ‘primary duty’ and the duty under s. 74AG as the ‘additional duty’.  The plaintiffs then contend that Trac Group, Tractile P/L, Tractile Combined and Mr Perkins breached the primary duty because of a failure to comply with AS2049:2002, and that that breach necessarily resulted in a breach of the additional duty.  For the reasons I have described that case is not pleaded.
  2. [272]
    It is therefore not necessary for me to deal with the question of whether Part 6AA could give rise to a private action for breach of statutory duty.   However, I do note that it is a difficult question whether Part 6AA gives rise to a civil claim for breach of one or more provisions in that Part, and if so, the nature and scope of any such cause of action.  The law in the area is hard to apply, in large part because it involves construing a Parliamentary intention to create a civil cause of action in circumstances where there is no express words in the statute which create that right.  That peculiar character of the tort of breach of statutory duty has been recognised in the authorities. The point was made by Dixon J in O'Connor v SP Bray Ltd (1937) 56 CLR 464, 477:

The received doctrine is that when a statute prescribes in the interests of the safety of members of the public or a class of them a course of conduct and does no more than penalize a breach of its provisions, the question whether a private right of action also arises must be determined as a matter of construction. The difficulty is that in such a case the legislature has in fact expressed no intention upon the subject, and an interpretation of the statute according to ordinary canons of construction, will rarely yield a necessary implication positively giving a civil remedy. As an examination of the decided cases will show, an intention to give, or not to give, a private right has more often than not been ascribed to the legislature as a result of presumptions or by reference to matters governing the policy of the provisions rather than the meaning of the instrument. Sometimes it almost appears that a complexion is given to the statute upon very general considerations without either the authority of a general rule of law or the application of any definite rule of construction.

  1. [273]
    Further, applying the relevant principles calls for a detailed and careful analysis of indications of implied intention which can be extracted from the terms of the statute itself, informed by the factors identified as relevant in the authorities.  I found the terms of the QBCC Act generally and Part 6AA QBCC Act in particularly to present a complex context for any such analysis.  I mean no disrespect to the efforts of counsel in a case which raised many other difficult issues when I say that the arguments before me did not descend into the detail required for the proper determination of the issue.   

Conclusion

  1. [274]
    I order judgment be entered in favour of the plaintiffs:
    1. Against Tractile P/L and Tractile Combined for $177,645; and
    2. Against Tractile P/L, Tractile Combined and Trac Group for $203,274.88;
  2. [275]
    I order that the claims against Mr Perkins be dismissed.
  3. [276]
    I will hear the parties as to costs and the form of any other orders which might be required to give effect to these reasons.

Footnotes

[1] For present purposes I will just refer to Tractile.  I will deal with the individual entities and their place in the proceedings where required.

[2] Ex 1 – Email of 10 – 12 September 2017 (MFI A, Vol 1, Tab 10).

[3] Ex 44 – Email from Berito to the Plaintiffs of 12 September 2017 attaching Tractile Eclipse documentation (MFI A, Vol 1, Tab 11).

[4] Ex 2 – Email of 12 September 2017 with Specification Attachments (MFI A, Vol 1, Tab 13).

[5] Highlighting not in original

[6] Ex 6 – Emails of 1 and 15 November (MFI A, Supplementary Bundle, Tab 6).

[7] Ex 7 – Tractile Plans (MFI A, Supplementary Bundle, Tab 7).

[8] Ex 9 – Plans of 12 December (MFI A, Supplementary Bundle, Tab 4) (see the last drawing B17-211.8).

[9] Ex 16 – Master Agreement dated 27 November 2018 (MFI A, Vol 2, Tab 30).

[10] See TS1-35 and TS2-51 2-52 and 2-54. See also Mr Sander at TS2-95, but he was mistaken as to the period of time between when he first saw Mr Caruana on site and the first time he saw Mr Perkins on site (the period being 12 months rather than 6).

[11] Highlighting not in original

[12] TS 5-4.24.

[13] Highlighting not in original

[14] Seemingly, Mr Jedd Borg appears to have provided invoices to Tractile for the work of installation.  No criticism of Mr Borg was made at trial nor is any intended by these reasons.

[15] Bizarrely, at one point the defendants sought to rely on an invoice for work done under the Tractile contract as part of the failed quantum meruit counterclaim.  That invoice was for ‘renting’ Mr Sexton’s QBCC license.  It is unclear to me how a person can lawfully lease another person’s QBCC license.

[16] TS 1-77.

[17] Ex 23 – Invoices from No Shots Electrical dated 30 September 2020 and 11 November 2020 (MFI A, Vol 4, Tab 166, Pages 1148 and 1150).

[18] TS 1-77.

[19] See TS 3-87 and TS 5-33.

[20] Ex 55 – Email chain between Darren Sander, Plaintiffs and Defendants from December 2019 (MFI A, Vol 3, Tab 114).

[21] The Fraser-Lever consulting engineers report obtained in September 2021 and referred to in paragraph [83] below did not address plumbing compliance issues so far as I can tell.

[22] See SRRC emails at Exhibit 56.

[23] See TS 5-10 in relation to George.

[24] Ex 56 to 61.

[25] Exhibit 68; There was also an issue raised about the need for an amended plan relating to framing and roof trusses which Mr Sander said had already been addressed.  I accept his evidence on that matter: TS3-73 to 74

[26] TS5-11.1 to 11.5.

[27] TS 5-88.

[28] See paragraphs 8, 30 and 34 respectively of the Statement of Claim, as originally filed.

[29] TS2-29.17.

[30] TS4-4.25

[31] Ex 36 – Letter from SRRC to Lachlan Rieck dated 6 April 2022.  Note the concern about the as constructed plans was not one which the Council ultimately maintained.

[32] In examination in chief, Mr Quilkey was asking about experience as a builder doing building work: TS 1-12.29 and in cross examination Mr Quilkey was asked about experience dealing with builders as a client: TS 2-46, 2-47.

[33] TS 1-41.

[34] TS 5-48.

[35] QBCC Act s. 42.

[36] QBCC Act s. 42B, 43 and 43A.

[37] QBCC Act s. 51 and 51A.

[38] TS 5-81 to 5-89.

[39] See SOC paras 19 and 20 and Defence paras 22 and 23.  The Defence denies the allegations in relation to Tractile P/L but only on the basis that it was not a party to the Tractile contract.  There is no pleading to the allegation that Tractile P/L was unlicenced and a deemed admission follows.  In any event, the issue is conceded in Mr Hogg’s trial submission at [54].

[40] QBCC Act s. 42(3).

[41] Cook’s Construction Pty Ltd v SFS 007.298.633 Pty Ltd (2009) 254 ALR 661 [49] – [59] (Cook’s Construction).

[42] Marshall v Marshall [1999] 1 Qd R 173, 178.

[43] SOC [6]; Defence [7].

[44] And Mr Hogg might have altered the defendants’ position in address: TS 6-18.

[45] See Sir Kim Lewison and David Hughes, The Interpretation of Contracts in Australia (Lawbook Co, 2012) [5.09] – [5.10].

[46] I do not consider that the reference to the Dulux paint is an essential part of the characteristics of the roof.  Rather it identifies the way that the roof is painted by Tractile to bring about that result.  Tractile could probably paint the roof with another paint if it was safe for collection of drinking water, was certified safe and met AS2049:2002.

[47] SOC, para. 10(b)-(c); Defence, para. 12 (“admit the allegations”); Exhibit 17, page 7.

[48] Exhibit 17, page 9.

[49] Ex 41 – Watermark Certification Scheme as at 2019 to 2020, pg 17.

[50] TS 6-64.26 to 6-64.33.

[51] Ex 23 – Invoices from No Shorts Electrical dated 30 September 2020 and 11 November 2020 (MFI A, Vol 3, Tab 155 Pages 1148 and 1150).

[52] Ex 23 – Invoices from No Shorts Electrical dated 30 September 2020 and 11 November 2020 (MFI A, Vol 4, Tab 166, Pages 1148 and 1150).

[53] Being the cost of replacing the roof place the costs of the new ground based solar array.

[54] Being $306,464.88 - $164,300.

[55] Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; Tulloch Brae Pty Ltd v Environmental Protection Equipment Pty Ltd [2022] QCA 97.

[56] Cappello v Hammond & Simonds NSW Pty Ltd [2021] NSWCA 57 [88].

[57] TS 5-4.34 to TS5-7.45; Exhibit 2 (poster); Exhibit 19 (tile); Exhibit 72 (Notice to Admit Facts dated 13 January 2023 [2]-[4]).

[58] TS 5-4.15 to 5-4.32.

[59] Ex 19 – Ridge Roof Tile.

[60] Paragraph 29A of the Statement of Claim pleads various intended uses of the Tractile System, the Tractile Eclipse Solar Roof Tile and the Tractile Roof Tile, including “to harvest rainwater for domestic consumption” (in respect of the Tractile System) and “to use the surface of the roof to capture rainwater for domestic consumption” (in respect of the other products).

[61] The relevant risks of harm were identified in paragraph 36 as including that the dwelling on the Site would be unsuitable for its intended use, diminished in value or the subject of rectification work.

[62] The plaintiff then alleges that [Trac Group], Tractile P/L, Tractile Combined and Mr Perkins could readily have ensured that the Required Information was available and that there is no social utility in persons in the position of the defendants failing to ensure that the Required Information is available.

[63] It is also pleaded that a breach arose when Mr Perkins failed to ensure that the Required Information was given to the plaintiffs when the plaintiffs requested it from Tractile P/L and Tractile Combined.

Close

Editorial Notes

  • Published Case Name:

    Quilkey & Another v Tractile Combined Pty Ltd & Others

  • Shortened Case Name:

    Quilkey v Tractile Combined Pty Ltd

  • MNC:

    [2023] QDC 204

  • Court:

    QDC

  • Judge(s):

    Porter KC DCJ

  • Date:

    21 Nov 2023

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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