Barry v Queensland Building Services Authority - [2012] QCAT 264

CITATION:

Barry v Queensland Building Services Authority and Ors [2012] QCAT 264

PARTIES:	Brett Matthew Barry (Applicant)
v
Queensland Building Services Authority Clinton Graham Mia Graham (Respondents)

APPLICATION NUMBER:

GAR086-11

MATTER TYPE:

General administrative review matters

HEARING DATE:

24 May 2012

HEARD AT:

Brisbane

DECISION OF:

Thomas Cowen, Member

DELIVERED ON:

25 June 2012

DELIVERED AT:

Brisbane

ORDERS MADE:

1. The decision of the QBSA #36820 of the 22 September 2011 is set aside.

2. The matter is returned to the QBSA for reconsideration.

3. The QBSA is directed to use its discretion whether to issue two Directions to Rectify and the terms of those directions.

4. The QBSA is to consider issuing a Direction to Rectify to the party responsible for the defective subframe on appropriate terms.

5. The QBSA is to consider issuing a Direction to Rectify to the Applicant to rectify the defective deck screws on appropriate terms.

CATCHWORDS:

Building matter – direction to rectify by Authority for defective workmanship – where builder followed plans and specifications for materials annexed to plans – where allegations actions by property owners affected work – where direction issued to applicant as head contractor

Queensland Civil and Administrative Tribunal Act 2009, s 42(1)

McNab Constructions Australia Pty Ltd v QBSA [2010] QCA 380 followed

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Mr Barry represented by Christopher E Taylor of Counsel instructed by Williams Graham Carmen Solicitors for the Applicant

RESPONDENT:

Queensland Building Services Authority represented by Ms Melanie C Hanlon, in house Legal Officer

Mr Clinton Graham and Ms Mia Graham represented by Mr Daniel Towne of Daniel of Towne & Associates Solicitors, solicitors for the Second Respondent

REASONS FOR DECISION

Background facts

Mr Brett Barry filed an application with this Tribunal in March 2011 to review a direction to rectify issued by the Queensland Building Services Authority. This direction concerns work at the property owned by Clinton Graham and Mia Graham.
Mr Barry filed a further application on 27 May 2011 seeking that the property owners and Wayne Maitland be joined as parties to the review application.
On 29 August 2011 a decision was made that Clinton Graham and Mia Graham be joined as respondents in this proceeding and that the application to join Wayne Maitland be dismissed.
Mr Barry entered into a contract with the Grahams, under which Mr Barry as builder would construct for the Grahams as owners an extension to their house at 4 Fry Close Whitfield, a suburb of Cairns. The extension was a new carport and entertainment area. The design and construction documentation for the extension was prepared by Mr Wayne Maitland of ASJM Contractors Pty Ltd engaged by Mr and Mrs Graham.
It was intended initially that the steel framing for the decking was to be carried out under a separate contract directly between the Grahams and Mr Maitland, while the remainder of the proposed construction was to be carried out by Mr Barry. However Mr Barry contracted to perform the whole of the carport and decking construction, with Mr Maitland being subcontracted by Mr Barry, at least on paper. Mr Maitland’s preparation of the plans and specifications was as a result of direct agreement between Mr Maitland and Mr and Mrs Graham.
The extensions were commenced around October 2009 and completed in February 2010.
Between six and eight months after the work was completed the owners having noticed corrosion occurring in the screw fixtures used by Mr Barry to affix timber decking boards to a steel frame made a complaint to the Queensland Building Services Authority (QBSA or Authority).
Mr William Courtney an inspector with the QBSA in Cairns inspected the premises twice in December 2010. A report of the inspections dated 25 January 2011 identified two defects said to exist in the work. These defects included the screw fixings used to secure the timber decking and the steel frame under the timber decking. The report asserted that these components of the work as constructed did not comply with Australian standards nor the manufacturer specifications for the environment that the work was exposed to.
On 2 March 2011 the QBSA issued a direction to Mr Barry requiring Mr Barry to rectify three defects said to be in the work. This direction number 35920 was subsequently withdrawn on 21 December 2011 and a second direction number 36820 was substituted. The first direction had required Mr Barry to rectify the frame and the screws. The second direction which is the subject of this review directed Mr Barry to rectify the screws only together with any consequential damage.
There are three questions that arise from this background material in this review.
First whether the work was defective?
Second whether Mr Barry is responsible for the defective work?
Third if there is defective work whether it is reasonable to direct Mr Barry to rectify all or part of the defective work?
The reasons for the decision of this Tribunal on 29 August 2011 stated “In any build work, the head contractor is generally responsible for the actions of his sub-contractor (see McNab Constructions Australia Pty Ltd v QBSA [2010] QCA 380). On that basis, any notice to rectify is appropriately addressed to Mr Barry. If Mr Barry’s review application is successful, the Authority can make another decision to direct rectification by any other person found to be responsible.”

The Law (Statutes)

Three statutes are relevant to the review of this decision: first Queensland Building Services Authority Act 1991 (QBSA Act); second the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act); and third the Domestic Building Contracts Act 2000 (DCB Act).
Section 86(e) QBSA Act provides that the Tribunal may review the decision of the Authority to direct rectification or completion of tribunal work.
Tribunal work is defined at section 75:
75 Tribunal work defined
(1) The following is tribunal work—
(a) the erection or construction of a building;
(b) the renovation, alteration, extension, improvement or repair of a building;
…
(f) the preparation of plans, specifications or bills of quantity for the carrying out of tribunal work.
Section 72 of the QBSA Act provides:
72 Power to require rectification of building work
(1) If the authority is of the opinion that building work is defective or incomplete, the authority may direct the person who carried out the building work to rectify the building work within the period stated in the direction.
(2) In deciding whether to give a direction under subsection (1), the authority may take into consideration all the circumstances it considers are reasonably relevant, and in particular, is not limited to a consideration of the terms of, including the terms of any warranties included in, the contract for carrying out the building work.
(3) The period stated in the direction must be at least 28 days unless the authority is satisfied that, if the direction is not required to be complied with within a shorter period—
(a) a substantial loss will be incurred by, or a significant hazard will be caused to the health or safety of, a person because of the defective building work; or
(b) the defective building work will cause a significant hazard to public safety or the environment generally.
(4) Subject to subsection (3), the period stated in the direction must be a period the authority considers to be appropriate in the circumstances.
(5) For subsection (1), the person who carried out the building work is taken to include—
...
(b) a licensed contractor whose name, licence number and address are stated on the contract; and
…
(c) a building contractor by whom the building work was carried out; and
(d) a person who, for profit or reward, carried out the building work; and
(e) a person who, under the Domestic Building Contracts Act 2000, is a building contractor under a domestic building contract who managed the carrying out of the building work; and
...
(g) a principal who was the contracting party for a building contract for building work for a building, or part of a building, intended for sale if—
(i) the building, or part of a building, is not, and has never been, the principal place of residence of the principal; and
(ii) the principal engages a building contractor or a construction manager to carry out the building work in a way, or using materials, likely to result in the work being defective or incomplete; and
(iii) the principal knew, or ought to have known, that the way the work was to be carried out, or the materials to be used, was likely to result in the work being defective or incomplete; and
...
(5AA) A direction to rectify may be given to more than 1 person for the same building work.
...
(6) If in order to rectify building work it is necessary to do so, the direction may require that a building or part of a building be demolished and building work be recommenced.
...
(8) A direction cannot be given under this section more than 6 years and 3 months after the building work to which the direction relates was completed or left in an incomplete state unless the tribunal is satisfied, on application by the authority, that there is in the circumstances of a particular case sufficient reason for extending the time for giving a direction and extends the time accordingly.
…
(11) For the purposes of subsection (5)(c) and (d)—
(a) a person carries out building work whether the person—
(i) carries it out personally; or
(ii) directly or indirectly causes it to be carried out; and
(b) a person is taken to carry out building work if the person provides advisory services, administration services, management services or supervisory services for the work.
...

Section 17 of the QCAT Act establishes the Tribunal’s review jurisdiction, as conferred by an enabling Act. The QBSA Act is such an enabling Act. The Tribunal is limited to this conferred jurisdiction in this case.
Section 19 of the QCAT Act states:
19 Exercising review jurisdiction generally
In exercising its review jurisdiction, the tribunal—
(a) must decide the review in accordance with this Act and the enabling Act under which the reviewable decision being reviewed was made; and
(b) may perform the functions conferred on the tribunal by this Act or the enabling Act under which the reviewable decision being reviewed was made; and
(c) has all the functions of the decision-maker for the reviewable decision being reviewed.
Section 20 of the QCAT Act states:
20 Review involves fresh hearing
(1) The purpose of the review of a reviewable decision is to produce the correct and preferable decision.
(2) The tribunal must hear and decide a review of a reviewable decision by way of a fresh hearing on the merits.
Section 24 of the QCAT Act sets out:
24 Functions for review jurisdiction
(1) In a proceeding for a review of a reviewable decision, the tribunal may—
(a) confirm or amend the decision; or
(b) set aside the decision and substitute its own decision; or
(c) set aside the decision and return the matter for reconsideration to the decision-maker for the decision, with the directions the tribunal considers appropriate.
Section 41 of the DBC Act sets out implied warranties for building contracts:
41 Implied warranties
(1) The warranties mentioned in division 2 are part of every regulated contract.
(2) A warranty mentioned in a section of division 3 is part of each regulated contract that is a contract of the type to which the section applies.
Section 42 of the DBC Act warrants that the materials will be suitable for the work:
42 Suitability of materials
(1) The building contractor warrants that all materials to be supplied for use in the subject work—
(a) will be good and, having regard to the relevant criteria, suitable for the purpose for which they are used; and
(b) unless otherwise stated in the contract, will be new.
(2) Subsection (1) applies to the building contractor for materials only if the materials are supplied by the responsible person for the contract.
…
(4) Also, despite subsection (2), subsection (1) does not apply to the building contactor for materials if—
(a) the building owner is responsible for nominating the materials for use in the subject work; and
(b) either—
(i) there are no reasonable grounds for not using the materials; or
(ii) if there are reasonable grounds for not using the materials—the building owner insists on the materials being used despite written advice to the contrary given to the building owner by the building contractor.
(5) A building owner is responsible for nominating materials for use in the subject work only if—
(a) the building owner nominates the materials specifically; and
(b) the nomination is made without any recommendation, representation, suggestion or other approach being made to the building owner by the building contractor—
(i) supporting, or approving, the use of the materials; or
(ii) criticising, or disapproving the use of, other materials that could be considered to be appropriate for use for the purpose for which the materials nominated by the building owner are to be used.
(6) In this section—
relevant criteria, for materials, means—
(a) generally accepted practices or standards applied in the building industry for the materials; or
(b) specifications, instructions or recommendations of manufacturers or suppliers of the materials.
responsible person, for a regulated contract, means—
(a) if the contract is a contract for carrying out the subject work—the building contractor; or
(b) if the contract is a contract for managing the carrying out of the subject work—the person responsible for carrying out the work.

The Evidence

Mr Barry gave evidence that he has been licensed as a low rise general builder for over 34 years. In that time he has never questioned a building plan or materials specified in a building plan.
Mr Barry gave evidence that he did not believe the plans to be defective. He did not believe that he should interpret the plans and specifically where the requirement was a “minimum class three screw” to fix the timber boards to the light steel frame. I took to this mean that where a specification stated “minimum” Mr Barry routinely took that as the standard to be applied.
Mr Barry stated that “in retrospect” he believed the screws that he used could do the job in a salt water environment.
Mr Barry could not recall a conversation about stainless steel screws that the second respondent Mr Graham claimed he had had with Mr Barry.
Mr Barry asserted that he did not consider the plans to be defective and that he had no reason to question the plans and therefore did not consider anything outside the plans.
Mr Barry agreed that he had suggested to Mr Graham that Mr Maitland may be able to assist him with the plan drawing as Mr Maitland is a steel fabricator who also does plans. Mr Barry could not recall how the discussion about the steel frame arose.
Mr Barry stated that he had done three decks where metal subframes were used in the Cairns Gordonvale and Mareeba areas and that this was his first job of a deck around a pool. He also indicated that it was about five years since he had done his last deck.
Mr Barry admitted that Mr Graham had a “legitimate gripe” because there was lots of rust on the screws, on the subframe and on a post adjacent to the pool. He said “it was one of those things”. I took this to mean that it was just bad luck for Mr Graham and that no-one was to blame.
Mr Barry gave evidence that he was present when the pool workers were using hydrochloric acid to clean the pool surrounds. He said that he and a co-worker were overcome with fumes to the extent they had to leave the area for a while. The co-worker was not asked to provide evidence nor were the pool workers invited to provide evidence.
Mr Barry also gave evidence that he had a discussion with Mr Graham where Mr Graham told him that he had used Reviva on the timber deck to clean it prior to applying a timber protective coating.
Mr Barry's recollection of events and conversations that had occurred prior to during and after the construction of the deck were hazy. Several times during cross examination Mr Barry referred to what he had said in his affidavit rather than being able to recall it directly.
I believe that Mr Barry believed (whether in retrospect or not) that the screws he used as the minimum specification would be satisfactory but that belief, as the evidence which will be discussed below demonstrates, was wrong.
Mr William Courtney gave evidence that he was a building inspector for the Building Services Authority, that he'd been in that position for 6 years and previous to that he'd been a building certifier for the Cairns City Council. In all he said he had 22 years experience with regulators’ accreditation.
He said that he first inspected the premises after receiving a complaint from Mr Graham in relation to be defective work. The first inspection took place on 20 October 2011. He said he noticed a strong salt smell but there was no salt haze. He noticed an exposed section at the end of the deck had a build up of some substance but was not able to identify it.
Mr Courtney gave evidence that he considered that a lack of cross ventilation beneath the deck could be a problem that may have contributed to the salt smell.
Mr and Mrs Graham also gave evidence. Since their affidavits were identical I will not consider Mrs Graham’s evidence but consider only Mr Graham’s evidence.
Mr Graham gave evidence that he had told Mr Barry prior to the work beginning that the pool would be salt water.
Mr Graham also gave evidence that he had a discussion with Mr Barry during the placement of the deck about the type of screw being used. Stainless steel screws were discussed but Mr Barry said that they were unsuitable as they were too soft and would break readily.
I have heard and accept both Mr Barry’s and Mr Graham’s evidence, but given the conclusion that I arrive at below I do not think that the conflicting versions of conversations and vague recollections, where they occur, are particularly relevant to the outcome of this review.

Issues

There are three questions to be determined when addressing this matter which were alluded to at paragraph 9 above. The first question is: whether the work “undertaken by Mr Barry” was defective?
Both the evidence given during the hearing and in written submissions and affidavits and photos tendered show considerable deterioration in the quality of the screws and the deck subframe in a relatively short period of time. Within six months of the timber deck being completed there was obvious deterioration in the screws. By the time of the hearing screw heads were coming away from the body of the screw and photographs indicated substantial deterioration in the steel sub-frame.
Mr Courtney tendered photographs that show the corrosion of the screw fixings, the frame beneath the deck and the post adjacent to the pool as well as some of the pool fence posts. If there was an elephant in the room someone would want to make the case that it was a mouse with glandular fever but it remains an elephant. The extent and degree of corrosion in the deck in the short period of time clearly indicated defective work. The conclusion to be drawn from this is that the materials, and indeed the design were unsuited to the purpose. The purpose being the construction of a low level deck adjacent to a salt water pool. The defect applies not just to the screws, for which Mr Barry was given a direction to rectify, but also the light metal C section sub-frame.
It is the Tribunal's opinion that the work is defective.

So who is responsible?

Several possibilities arose during the course of the hearing.
The Queensland Building Services Authority points the finger at Mr Barry pursuant to section 72 of the Queensland Building Services Authority Act 1991. Since there is building work that is defective and since section 72 subsection (1) gives the QBSA the authority to direct “the person who carried out the building work to rectify the building work” within a stated period it follows then, according to the QBSA, that Mr Barry as the person who carried out the building work should be ordered to rectify the defective work.

Mr Graham also pointed the finger at Mr Barry, even while lamenting that the QBSA Act might produce less than fair results for builders in some situations.
Mr Barry pointed the finger at Mr Graham. The applicant asserted that Mr Graham's use of Reviva would have adversely affected the galvanised coating on the screws leading directly to the deterioration.
The finger was also pointed at possible “intervening events”. Amongst those were:
The use of hydrochloric acid to clean the pool and apparently the galvanising off the screws at the same time.
The actual use of the structure, as distinct to the intended use, created by the construction itself.
Concomitantly, the actual environment created by the deck, as distinct from some other intended environment.
Although no evidence was led in relation to this there was also the possibility that an electrolytic reaction between the zincalume roof, if there was one, and the galvanised light metal subframe might cause a reaction that resulted in the subframe’s rapid deterioration. This of course would only occur if the metal subframe held water and was wet.
The finger was also pointed at Mr Wayne Maitland of ASJM Contractors Pty Limited, the designer/planner/subcontractor who prepared the plans and the specifications and whose company produced the light metal C section sub-frame.
In this review of the second direction issued by the QBSA the second question to be addressed is whether Mr Barry is responsible for the defective work as described in that direction.
It is at this point in the analysis of the direction issued by the QBSA that matters become a little bit more complicated.
The QBSA originally issued the direction that required Mr Barry to not only replace the screws but to replace the sub frame and to provide cross ventilation and drainage to the site under the decking as well.
The QBSA withdrew this first direction and substituted it with a second direction that required Mr Barry to only replace the screws (and rectify any consequential damage).
There was no evidence led as to why the QBSA chose to take this course of action.
One can only assume that there was some issue with being able to demonstrate that Mr Barry was in fact responsible for the construction of the subframe. In other words Mr Barry was, for the purposes of the subframe, not “the person who carried out the building work”. This seems to be contrary to the rule that subcontractors’ work is the responsibility of the main contractor. Nevertheless that is the position the QBSA took and the decision that the Tribunal is reviewing. It is possible that the design and construction of the subframe were so closely integrated that it was not possible to reasonably define Mr Barry as the person who carried out the building work in relation to that subframe.
The question then arises, if Mr Barry cannot be held accountable for the subframe deterioration because he neither designed nor put it together why is he then responsible for the deterioration of the screws which were specified in the plans produced as part of the same design as the subframe?
There is some merit in this argument and the applicant's counsel argued cogently that Mr Barry ought not be held responsible for selecting screws which were specified in the plans and the annexed specifications. The argument was also made that the screws did meet the designated Australian Standard as specified. The Peachy Report indicated that the Australian Standard “is less than ideal”.
However the Tribunal is of the view that Mr Barry is not entirely blameless in respect of the choice of and use of screws. Mr Barry gave evidence that he had never once in 34 years questioned a plan or its specifications. Although I would not go so far as to suggest the Nuremberg defence applies in this situation, that is that Mr Barry was simply following orders as defined in the plans and the annexed specifications, I am of the view that a reasonably prudent builder with 34 years experience would have from time to time questioned plans or the types of fixtures that were specified in those plans. In other words if Mr Barry had never turned his mind to the quality of the materials that the plans required him to use then he ought to have.
Moreover I am of the view that reasonably foreseeable events, such as the use of Reviva or similar product to clean the timber deck prior to its preparation with preservative oils cannot be used to avoid responsibility for failing to question the type of screw, or to use better than the minimum specified type of screw where it was warranted. Clearly a timber deck adjacent to a salt water pool, warrants, as the Experts Conclave Report indicates, the use of a better quality screw.
Whether the screw that was used complies with the class 3 screw specified is only a peripheral question to the substantive finding that those screws were not suited to the use. A reasonably prudent builder who had experience building low decks adjacent to salt water pools would have known this. A builder with 34 years experience but with no or little experience building decks adjacent to pools should have recognized their lack of specific experience and made appropriate enquiries.
Mr Barry gave evidence that he had only constructed three decks of this type and that the last was some five years ago. He also gave evidence that this was his first deck around a saltwater pool. He did give evidence that he was not aware that the deck was around a saltwater pool until after the deck had nearly been completed. The fact that Mr Barry raised this in his defence suggests that if he had known it was a saltwater pool he might have approached the job somewhat differently breaking a 34 year routine of never questioning plans or specifications. How differently he might have approached the job is unknown.
A builder with experience building decks around a swimming pool would prudently have made an enquiry of the owner or the planner as to whether it was a saltwater pool and whether appropriate materials were being used. That Mr Barry failed to do this (presumably because of his lack of experience in building this type of deck but also possibly because he habitually never enquired about the plans or the quality of materials contained within those plans), does not absolve him from responsibility. Indeed a builder who had less experience building decks around swimming pools would really need to be much more cautious and actually do some research into the types of materials that were suitable in that environment. It is common knowledge that people emerge from the water dripping wet and this water would collect on the deck and seep through the gaps between the floorboards and deposit itself on whatever joists and bearers there were below. That the joists being used were C sections which are more likely to collect and retain water is relevant. That the water is saltwater is also relevant. A reasonably prudent builder would have made enquiries to determine whether the pool was a saltwater pool and whether the materials to be used would be sufficiently resistant to corrosion.
It is the Tribunal's view that Mr Barry must take some responsibility for the use of materials which proved to be defective. This responsibility is restricted to the use of galvanised screws which the conclave of experts had determined were not suitable for this type of pool.
The time that has elapsed since the original and the second direction to rectify neither adds to nor detracts from the scope of responsibility that Mr Barry has.
The QBSA in its submission relied on cases that dealt with challenges to a direction to rectify where the builder had followed the plans. In Glen Williams Pty Limited v Queensland Building Services Authority [2012] QCAT 127 the Tribunal followed JM Kelly (Project Builders) Pty Limited v Queensland Building Services Authority [2010] QCAT 568 and held at paragraph 14:
“as pointed out previously, defective design does not excuse defective building.”
The Applicant distinguished these cases by arguing that this matter did not involve a situation where the builder had failed to follow any specified Australian Standards.
While this may be the case the QBSA Act itself is clear and was followed in that case at paragraph 16:
“the law in this area is now well settled. The QBSA Act is quite specific in making the builder responsible for any defective work, despite the involvement of other professionals. Here, for reasons of consumer protection, the intent of the parliament is to clearly lay responsibility for defective building works squarely at the feet of the builder. As unsettling as this may be for builders, particularly, in circumstances where the professionals [the applicant] relied upon arguably have more specialist training and expertise than does he, it remains the clear intent of the QBSA Act. Moreover, it has previously been held that fault by the builder need not be established in order for rectification to be directed...”
The third question to be addressed in this review is whether it is reasonable to issue a direction to rectify the work to Mr Barry.
Having found that Mr Barry has some responsibility for the defective work the Tribunal is also aware that even if Mr Barry had complied with the second direction at the time it was made and replaced the galvanised screws with stainless steel screws suitable for the purpose the end result would not have been an improvement in the outcome for the owner of the property. This is because the subframe into which those galvanised screws were being driven was also defective. Eventually deterioration of the subframe would have adversely impacted on the decking above it.
The position now is that there is very little point in Mr Barry complying with the second direction that the QBSA had given him. Even if Mr Barry had complied with that direction at the time that direction would not have been a decision that could be described as one that would, on its own, be the correct and preferable decision to produce the preferable outcome.

The Decision

Therefore it is the Tribunal's decision to make an order pursuant to section 24 of the QCAT Act subsection (c) to set aside the decision of the QBSA and to return the matter for reconsideration with the following directions to be taken into account.
The Tribunal is not aware of any action that Mr Graham is taking against the planner and supplier of the subframe, however that legal action of some sort might be available to Mr Graham was alluded to during the hearing. Furthermore during the hearing it was suggested that Mr Graham himself would replace or have replaced the subframe in anticipation of Mr Barry rectifying the decking itself, which amounted to removing the galvanised screws and replacing them with stainless steel screws and any rectifying consequent damage to the deck caused by removing the screws.
The QBSA is directed to use the discretion available to it when determining whether to issue any further directions to rectify and how those directions might be complied with.
The QBSA Act allows the QBSA to issue rectification directions to more than one person for any specific defective work.
In this matter the QBSA should consider issuing two directions.
First it should consider issuing a direction to the party it considers to be responsible for the defective subframe. Prior to issuing such a direction the QBSA should take into consideration any legal action that Mr Graham may be undertaking, considering undertaking or any other action Mr Graham may be contemplating to replace the subframe.
Second the QBSA should consider issuing a direction to Mr Barry along the lines of the second direction it issued to him but with the addition that Mr Barry need not comply with that direction until either the first direction has been complied with or alternatively that Mr Graham has of his own volition replaced the subframe with one suited to the purpose and the environment.