CAMPBELL and MCCABE - [2021] WASAT 6

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION:   CAMPBELL and MCCABE [2021] WASAT 6
MEMBER:   MS KY LOH, MEMBER
MS H PEDERSEN, SESSIONAL MEMBER

HEARD:   19 OCTOBER 2020
DELIVERED          :   15 JANUARY 2021
FILE NO/S:   CC 992 of 2020
BETWEEN:   KAREN CAMPBELL
Applicant
AND
MICHAEL MCCABE
Respondent

Catchwords:

Building services complaint - Home Building Contracts Act 1991 (WA) complaint - Whether sale or supply of second-hand pool is regulated building service or home building work - Whether terms of agreement not reduced in writing nor signed can form home building work contract - Whether representations misleading or deceptive

Legislation:

Building Act 2011 (WA), s 3
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 3, s 5(1), s 5(2), s 55
Home Building Contracts Act 1991 (WA), s 3(1), s 3(2), s 4(1), s 15A, Pt 2

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant	:	In Person
Respondent	:	In Person

Solicitors:

Applicant	:	N/A
Respondent	:	N/A

Case(s) referred to in decision(s):

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

The owner of a home in Henley Brook, Ms Karen Campbell, agreed to buy a second-hand fibreglass pool from a pool contractor, Mr Michael McCabe of Quinns Beach Contracting, and for the contractor to install the pool at her home.
The owner complains that she has been misled by the contractor's statements to her about the age and condition of the pool prior to her agreement to purchase the pool, and seeks repayment of the deposit she had paid to him and for the pool to be removed from her home.
The contractor maintains that his representations about the good condition of the pool are accurate.
The Tribunal finds that it has no power to determine the complaint as there is no home building work contract (HBWC) between the parties. If it had formed the view there was a HBWC, the Tribunal would have found that the contractor's conduct was not misleading or deceptive.

Background

In March 2019, the owner lodged a minor case claim in the Magistrates Court of Western Australia claiming that the contractor had misled her regarding the age and condition of the second-hand pool. She sought a full refund of $7,500 paid to the contractor and for the pool to be removed.
On 15 June 2020 the Magistrates Court ordered that the proceedings be transferred to the Building Commission pursuant to s 55 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (Building Services Act), and the costs of the proceedings were reserved to the Building Commission.
The owner lodged a building service complaint and HBWC complaint with the Building Commissioner on 30 June 2020 under s 5(1) and s 5(2) of the Building Services Act.
Upon investigation of the complaint, the Building Commissioner referred the matter to the Tribunal on 10 August 2020.

Factual background

The following factual background is gleaned from:
(a)oral testimony from the owner, the owner's husband Mr David Campbell, the contractor, and the contractor's wife Mrs Jenny McCabe who also works at Quinns Beach Contracting; and
(b)documents provided by the Building Commissioner in referring the matter to the Tribunal, which includes statements and documentary evidence filed in the Magistrates Court of Western Australia by the owner and the contractor.
Except where indicated, the facts are largely agreed between, or otherwise not contested by, the parties.
In August 2018, the owner agreed to purchase a second-hand fibreglass swimming pool which the contractor was going to remove from a house in Madeley. The parties also agreed for the contractor to install the pool at her house.
At the hearing, the owner confirmed that there was no written agreement documenting the arrangement, and that all communications relating to the engagement of the contractor occurred through text messages between the owner's mobile phone and the contractor's mobile phone.
The contractor stated that he was originally engaged to install another second-hand pool independently sourced by the owner, which, upon inspection, he considered to be damaged and unsuitable for repair. He recommended to the owner to spend more money on a new pool, but she did not accept his recommendation.
The extract of mobile text messages between the parties which was provided by the owner record that:
(a)The contractor sent a photograph of the pool to the owner on 6 August 2018, asking if the owner would be interested, 'at the right price';
(b)After discussion about the price, the owner stated she would 'get back to [the contractor] soon';
(c)The owner asked whether it came with filter, and the contractor replied 'All filtration I'm going [to] have a look in morning'. The contractor said that it had solar cover too;
(d)When the owner asked how old the pool was, the contractor stated '8.5 years'. The owner stated that it '[s]ounds good - let me speak to Dave first though […]';
(e)The owner then replied later that night 'Ok - Dave would like to go see it in place if he can….is it in good condition? No black spot or anything???? Also what make is it???'. The contractor stated 'Buccaneers no black spot good pool inspecting tomorrow I don't touch pools with black spot'. The owner stated 'We are interested - let us know how the inspection goes tomorrow…';
(f)On 7 August 2018, the contractor sent a photograph of the pool and stated 'Pool is perfect […]', 'That's dirt in the bottom' and 'Have few clients asking for this size but I'll give you first option';
(g)Later that day, the contractor stated that he would be digging pool out tomorrow '2-4' and that his son will be there. He also stated 'will go white once emptied but when full goes blue again'. He stated that he 'can deliver to you if you['re] keen' and 'Pool[']s in great cond[ition]'. The owner replied 'Can we pop round and see i[t] while it's still in ground??', to which the contractor stated 'Yep after 2 tomorrow';
(h)The contractor asked the owner 'Can you let me know if you want it', and on 8 August 2018, the owner replied that 'Ok - I can be there at 2pm to view pool but Dave might be a little later […]' and 'definitely interested but obviously want to see it first before we say yes';
(i)When the owner arrived at the Madeley house later that day, the contractor's son had left, but he asked her to 'just knock on door and say looking at pool'. The owner then stated 'No one answering'; and
(j)The next text message that day was from the contractor asking 'Address as soon as you can please', to which the owner advised of her address.
The owner stated in oral evidence that when she saw the pool, it was half-filled, full of dirt and water, and tendered a photograph of the pool in that state. She said that the house was locked up and no one was at the house, and she could not really see the pool.
Later that day, the pool was delivered to the owner's house.
The owner's extract of text messages did not include a complete set of messages from 9 August 2018 to 6 September 2018. On 7 September 2018, the contractor sent a message asking for the owner's address again as the pool needed to be inspected. He sent another message on 11 September 2018 stating that the engineer was visiting the site tomorrow.
Mr Campbell testified that during the pool inspection by the engineer, Mr J Berry, Mr Berry told him that the pool was at least 15 years old and needed to be recoated due to over-chlorination. In crossexamination, Mr Campbell conceded that Mr Berry said it was an 'old pool' and that it was 'probably' about 15 years old. Mr Campbell stated that Mr Berry had said it was a structurally good pool but needed to be re-gelcoated.
The parties met on 13 October 2018 to discuss the pool, although the contractor ended up arriving early and Mr Campbell was not present.
A few days after the building permit was issued by the City of Swan on 15 October 2018, the owner received a copy of the permit and Mr Berry's engineering report dated 14 September 2018. The report stated that 'The [pool] shell is confirmed as structurally sound and suitable for reinstallation in a Class A site without modification. Re-gelcoating is recommended'.
The owner then sent a text message on 19 November 2018 requesting a chat about the pool, as she 'checked with Buccaneer and it was installed early 2006 so nearly 13 years old - also needs recoating as stated in your Engineers report….??? Not the 8.5 year old perfect condition you sold me'.
The email from Buccaneer Pools to the owner sent on 26 August 2019 actually advised that the pool was installed on 11 October 2006, which makes the pool just shy of 12 years old from when it was installed.
The contractor replied on 19 November 2018 that the 'Pool was inspected by you guys and I was told 8.5 years looked perfect all pools look like shit when out of ground I told you buy a new pool and you wouldn't listen […] Should have been put in ground months ago Now an issue for some reason That's [wh]y I get people [to] co[m]e look'.
The owner responded that same day with 'Did not 'inspect the pool' as your son wasn't there at the time you told me to go round…this was a better option for us as we can't afford a new pool - we told you that from the beginning. […] I would put it in the ground but it's older than you said and it needs recoated […]'.
The contractor replied '[…] Nothing wrong with pool Sent you pics Can put in ground as is And colour comes back […]'.
At the hearing, the contractor maintains his view that the pool was in great condition, otherwise it would not have been approved by the council. He also said that the pool looked like an 8.5-year-old pool.
When asked if the age of the pool had any relevance to its condition, the contractor stated 'absolutely not', and referred to factors for maintaining a pool in good condition, such as keeping the chemicals 'spot on'. He said that he would never pay for pools unless it was perfect.
He stated that his representation that the pool was perfect should be interpreted to mean that it was perfect for its age.
When asked if he agreed with Mr Berry that the pool needed to be regelcoated, the contractor expressed surprise that Mr Berry had said that as he did not believe it needed to be done.
Consistent with his text message of 7 August 2020 (referred to in [14(g)] above), the contractor testified that once the pool is empty, calcium will come to the surface and it will appear white. In his view, however, once the pool is filled with water, the pool will turn blue again.
The contractor concedes that the pool is faded because it is not a new pool, but maintains that the photographs relied upon by the owner show that the pool is in good condition.
The owner submits that the term 'perfect' should be understood as having no defects or anything wrong with the pool, including not having to undertake gelcoating. She also observed that there were rough edges to the pool, which the contractor contends is the calcium coming to the surface.

Statutory framework

The owner has made two complaints against the contractor for:
(a)regulated building service not being carried out in a proper and proficient manner or is faulty or unsatisfactory, pursuant to s 5(1) of the Building Services Act; and
(b)relevantly, breach of contract under a HBWC or a provision under Pt 2 of the Home Building Contracts Act 1991 (WA) (Home Contracts Act), pursuant to s 5(2) of the Building Services Act.
The owner's primary allegation relates to misleading statements made by the contractor prior to entering into their arrangement for the sale or supply and installation of a second-hand pool, which falls squarely within the type of complaint under s 5(2) of the Building Services Act.
Nonetheless, as an application has also been made under s 5(1) of the Building Services Act, the Tribunal will consider whether the sale or supply prior to installation of the second-hand pool constitutes 'regulated building service' for which a building service complaint can be made.

Building services complaint

A 'regulated building service' is relevantly defined under s 3 of the Building Services Act as meaning:
•a building service carried out by a registered building service provider (par (a) of the definition); or
•home building work that is -
(i)carried out by a person for another person under a HBWC or other contract or arrangement for gain or reward; and
(ii)not carried out for a person who is in turn obliged to perform the work under another contract (par (b) of the definition).
The sale or supply of the pool does not constitute a 'building service' which is defined as building work, demolition work, plumbing work or any other prescribed service or work. Notably, 'building work' is defined in s 3 of the Building Act 2011 (WA) by reference to physical works (for example, 'the construction, erection, assembly or placement of a building or incidental structure'), not the sale or supply of a product.
As to whether the sale or supply of the pool constitutes 'home building work', that phrase is further defined in s 3(1) of the Home Contracts Act in similar fashion to 'building work' in the sense that it is defined by reference to physical works (notably, 'constructing or carrying out any associated work in connection with … an existing dwelling'), not the sale or supply of a product.
The definition of 'associated work' under s 3(1) of the Home Contracts Act includes swimming pools.
Whilst the excavation, transport and installation of the pool would fall within the meaning of 'building work' and 'home building work', there is no complaint about the manner in which the pool was excavated and transported, and the installation did not proceed. As such, these works are not relevant to the determination of the issues in these proceedings.
Accordingly, the Tribunal finds that the sale or supply of the pool is not a regulated building service for which the owner may make a complaint under s 5(1) of the Building Services Act.

HBWC complaint

Was there a HBWC?

Under s 3(1) of the Home Contracts Act, a HBWC is defined as a contract between a builder and an owner for the performance by the builder of home building work.
For reasons set out in [38] above, the sale or supply of the pool is not home building work which can be the subject of a HBWC.
The excavation, transport and installation of the pool, however, falls within the definition of 'home building work'.
An argument could be made that s 3(2) of the Home Contracts Act allows work that does not constitute home building work (such as the sale or supply of the pool) to be included in a HBWC which includes home building work. Section 3(2) provides that:
It is immaterial, for the purposes of the definition of home building work contract, that a contract between a builder and an owner for the performance of home building work also includes work that is not home building work.
Nonetheless, the more significant hurdle is that there is no written and signed contract setting out the all the terms, conditions and provisions of the contract, and the date of the contract, as required under s 4(1) of the Home Contracts Act.
Whilst there appears to be some form of contractual agreement in place, this does not constitute a HBWC.
Without meeting these essential formal requirements of a HBWC, the Tribunal is not able to determine when agreement was reached (in particular, when the owner accepted the offer for the sale of the pool) and what the terms, conditions and provisions of the contract were (for example, whether any warranty was given as to the working condition of the pool lights).
The text messages are silent on when the owner agreed to buy the pool and as to the condition of the pool lights (or any warranty as to its condition).
Accordingly, the Tribunal is not satisfied that there is a HBWC for which the owner may make a complaint under s 5(2) of the Building Services Act.

Was there misleading or deceptive conduct?

In view of the Tribunal's determination that there is no HBWC, the question of whether the contractor's conduct was misleading or deceptive does not strictly arise. However, given the extensive evidence heard on the issue, the Tribunal notes that, had there been a HBWC, it would have found that the contractor did not engage in misleading or deceptive conduct.

Legal principles

Under s 15A of the Home Contracts Act, a builder must not, relevantly, in connection with:
(a)the formation or execution of a contract; or
(b)the circumstances in which a contract or variation of contract is entered into,
engage in conduct that is misleading or deceptive.
The High Court has found that conduct is misleading or deceptive, or likely to mislead or deceive, if it has a tendency to lead into error: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at [191] and [198]-[199]; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357 at [15].
That is to say there must be a sufficient causal link between the conduct and error on the part of persons exposed to it: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [39].
In determining whether conduct is misleading or deceptive, it is necessary to examine the relevant course of conduct as a whole, and in light of the relevant surrounding facts and circumstances: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [102].

Application

The Tribunal is not satisfied that the representations were misleading or deceptive for the following reasons.
Firstly, in this case, it is clear that the parties are discussing the condition of a second-hand pool, which must be accepted as being of a condition which is less 'perfect' than a brand new pool.
Indeed, the owner appreciated the price difference between a new pool and a second-hand pool, having rejected the contractor's recommendation to install a new pool on the basis that they could not afford a new pool. With that appreciation comes certain concessions that she, as any reasonable person, must make that the condition of a second-hand pool must be inferior to a new pool.
Secondly, the owner complains that the representation that the pool was 8.5-years-old is misleading, when in fact it was nearly 12 years old.
However, that representation could only have been reasonably understood as an estimate, given that the contractor was not the manufacturer or original installer of the pool. The contractor had a reasonable basis for his estimate, having been told that it was 8.5 years old, and formed that view based on his own observation of the pool. Indeed, Mr Berry, as a chartered engineer, experienced difficulty himself in estimating the age of the pool, as he told Mr Campbell that he thought it was probably about 15 years old.
While the contractor is not an engineer, he has experience in installing pools over the last 23 years. The contractor states that he installs anywhere from 150 to 300 new pools a year (and up to 400 pools up to five years ago), and would sell 10 to 30 second-hand pools a year.
Further, while the contractor's independence as an expert witness could be challenged, the Tribunal is satisfied that the contractor provided honest and reliable evidence. Whilst he appeared unprepared for the hearing, in the sense that he did not review all of the documentation filed by the owner, including the text messages, and was vague when asked when he became a Swimming Pool and Spa Association member, his credibility was not seriously impugned and his evidence was generally consistent with his written statements made in the Magistrates Court proceedings and during this hearing. As such, the Tribunal accepts his evidence that the pool appeared, based on its condition, to be an 8.5 year old pool.

Thirdly, the descriptor of the pool being 8.5 years old, in and of itself, does not necessarily assist in describing the condition of a second-hand pool as, according to the contractor, it will depend on how well the pool has been maintained.
In the Tribunal's view, the photograph exhibits of the pool in situ sent on 6 and 7 August 2018 at the time the representations were made serve as a more accurate and objective indication of the condition of the pool.
In the Tribunal's view, the photograph exhibits show a fairly attractive and well maintained pool, and do not indicate that the contractor's representations have a tendency to lead into error.
Fourthly, the Tribunal is not satisfied that the contractor's representations are capable of the meaning that the pool does not need to be re-gelcoated. The contractor made the representations at the time that the pool was in situ and filled, and there has been no evidence that it would be capable for anyone to tell whether the pool wall needs to be re-gelcoated from viewing a filled pool.
Fifthly, the representations must be viewed in the context of other statements made by the contractor at the same time, which is that the 'pool will go white once emptied but when full goes blue again'. In the Tribunal's view, that was borne out in the photograph exhibits of the pool on 7 August 2018 while it was half-drained, and then on 8 August 2018 when it was fully drained. There is a visible difference in the shade of blue of the pool wall while it was submerged in water and when it was drained.
It has not been possible to test the contractor's assertion that the pool will go blue again when filled because the owner has not filled the pool since delivery of the pool.
Finally, even if the Tribunal accepts that the contractor's representation could be extended to mean the pool wall did not need to be regelcoated, the Tribunal is not convinced that the pool wall needs to be re-gelcoated. The only evidence from the owner about that contention is based on a report from Mr Berry submitted for the purpose of obtaining a building permit to install the pool, in which he stated that '[r]e-gelcoating is recommended', which is consistent with what he told Mr Campbell at the time he conducted the inspection.
Without Mr Berry being called to give evidence, the Tribunal has not been able to assess whether Mr Berry's qualification and experience as an engineer makes him suitably qualified to express an opinion about gelcoating on fibreglass pool walls.
Further, the contractor, who has 23 years of installing fibreglass pools, may be equally be in a position to provide an opinion on whether the pool needed to be re-gelcoated. At the hearing, he expressed the view that the pool did not need to be re-gelcoated as the appearance of a white pool wall was entirely to be expected once it was pulled out and drained.
Again, without Mr Berry appearing to give evidence, it has not been possible to put to him whether his view was based on the appearance of a white pool wall, and whether he was aware that it was an outcome to be expected and that the pool wall will return to blue once filled.
In the end, it is not necessary to determine whether the pool wall did, in fact, need to be re-gelcoated as the Tribunal found at [66] that it is not reasonable to infer from the representation that the pool wall did not need to be re-gelcoated.
In summary, in the context in which the representations were made (that is, that the contractor inspected the pool in situ while it was filled, and could not be expected to know the exact age of the pool), the Tribunal is not satisfied that the representations were likely to lead a person into error as to the condition of the pool.

Claim in respect of filter, pool lights, pool cover

The owner claims that the contractor did not provide the pool cover, the pool lights are defective, and the supplied filter is inadequately sized for this pool.
As stated above, the absence of a HBWC precludes the Tribunal from making any orders in respect of allegations for the unsatisfactory sale or supply of the pool.
If the Tribunal had found that there was a HBWC in this case, it would have accepted the contractor's submission that he had supplied the correct filter, which was a cartridge filter and typically smaller in size than an equivalent sand filter. The quote from Timeless Pool Renovations Pty Ltd had referred to a 'sand filter' of this size as being too small for the pool, however, the Tribunal finds that this quote refers to the incorrect filter type.
As to the pool lights, in the absence of a written contract, there is no certainty what warranty, if any, was given as to the working condition of the pool lights. The photograph exhibits of the pool in situ were taken in the daytime where the pool lights do not appear to have been turned on, and so it would not have been possible to assess any deficiencies in the pool lights (nor to make any representations as to their working order).
As to the pool cover, it would seem the agreement did anticipate the provision of a pool cover. Whilst the Tribunal is not able to make any order requiring the contractor to provide the pool cover to the owner, it notes that the contractor appeared amenable to providing the cover to the owner voluntarily if he could find it in his workshop.

Conclusion

For the reasons stated above, the Tribunal is satisfied that there is no 'regulated building service' nor 'home building work contract' in respect of which the Tribunal can determine complaints under s 5(1) and s 5(2) of the Building Services Act respectively.
Accordingly, the Tribunal will dismiss the application.

Orders

The Tribunal makes the following order:
1.The applicant's application is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS K Y Loh, MEMBER
15 JANUARY 2021