Chessell v Reynolds - [2019] ACAT 20

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CHESSELL & ANOR v REYNOLDS (Civil Dispute) [2019] ACAT 20

XD 22/2018
Catchwords: CIVIL DISPUTE – breach of contract – non-compliant product – general poor work – compensation – jurisdictional limit

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 18, 48
Australian Consumer Law
Building Act 2004 ss 42, 136

Subordinate

Legislation cited: Building (General) Regulation 2008 r 31

Cases cited:Robinson v Harman 154 E.R. 363 (1 January 1848)

List of

Texts/Papers cited: Australian Building Codes Board, Building Code of Australia (Australian Building Codes Board, 2016).
Standards Australia, Windows and external glazed doors in buildings (AS 2047-2014) (Standards Australia, 2014).

Tribunal:Senior Member J Lennard
Date of Orders: 7 February 2019
Date of Reasons for Decision: 7 February 2019

AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 22/2018

BETWEEN:
AARON JOHN CHESSELL
First Applicant
MAXINE JOAN CHESSELL
Second Applicant

AND:
PATRICK LEO REYNOLDS
Respondent

TRIBUNAL:Senior Member J Lennard

DATE:7 February 2019

ORDER

The Tribunal orders that:

The respondent shall, on or before 28 February 2019, remove all windows and doors installed by him from the applicants’ premises. Upon such removal, property in the windows shall be vested in the respondent.
Should the respondent fail to comply with Order 1 then:
(a)the applicants may remove and dispose of all windows and doors installed by the respondent at their premises at their own discretion; and
(b)the respondent shall pay compensation to the applicants in the amount of $4,600.00 (see Order 4, below).
The respondent shall, on or before 6 March 2019, pay to the applicants the amount of $23,647, being $22,837 compensation, the Tribunal filing fee of $150 and the Peak Consulting report fee of $660.
Should the respondent fail to comply with Order 1, then the respondent shall pay to the applicants an amount of $25,810 on or before 6 March 2019.

………………………………..
Senior Member J Lennard

REASONS FOR DECISION

Background facts

The contract

On or about 1 July 2015 the respondent met with the applicants at their home and provided a quote for the installation of windows.
On or about 6 July 2015 the respondent provided to the applicants written information headed “Quotation Information” (Quotation Information). This written information was under the letterhead of “Ardglass Windows”. The respondent provided to the applicants a business card which described Patrick Reynolds as a director of Ardglass Homes. Mr Reynolds is a sole trader using the business name of Ardglass Homes. The quoted price was $23,466, exclusive of GST. This written information included, inter alia, the following paragraph:
All Windows and Doors supplied by Ardglass Windows conform to all relevant Australian and European Standards. They are Double Glazed units with toughened Glass and internal beading for additional security. All windows are fitted with keyed alike window locks and all doors with minimum 3 point locking system.
There was no other written contractual documents between the parties. The contract between the parties is therefore comprised of the terms set out in the Quotation Information, any pre-contractual oral representations or promises made by either party, and terms implied as a matter of fact. Terms implied as a matter of fact would include that the work would be done in accordance with the relevant legislative requirements found in the Building Act 2004 (Building Act).
Section 42 of the Building Act provides that building work must not be carried out in the Australian Capital Territory (ACT) except in accordance with the following requirements:
(a)The materials used in the building work must comply with the standards under the building code for the materials in buildings of the kind built or altered.
(b)The way the materials are used in the building work must comply with their acceptable use under the building code for buildings of the kind being built or altered.
(c)The building work must be carried out in a proper and skilful way.
The building code referred to is the Building Code of Australia, which incorporates the Australian Standards.[1]
[1] Building Act section 136
The Building (General) Regulation 2008 (Building Regulation), at regulation 31, sets out the considerations that must be taken into account when deciding whether building work has been carried out in a proper and skilful way. These include: whether the work is in accordance with any relevant rules or guidelines published by Standards Australia;[2] and whether a product or system has been used in a way that a reasonable person would expect is contrary to the intended use of the product or system.[3]
[2] Building Regulation regulation 31(b)
[3] Building Regulation regulation 31(c)
There is a great deal of overlap between the requirements of the Building Act and the Building Regulation in the ACT and the Australia Consumer Law (ACL) as it applies in the ACT. The ACL applies to contracts for the provision of goods and services, and relevantly includes consumer guarantees that all goods supplied will correspond to any description, the goods supplied will be fit for the purpose or purposes made known by the consumer at the time of entering into the contract and will be of an acceptable quality, and that all work performed will be to an acceptable standard.
The test to be applied by the Tribunal in determining whether goods are of acceptable quality or whether work has been performed to an acceptable standard will be similar to those applied under the Building Act.
On 10 August 2015 the applicants paid $11,150 as an initial 50% deposit in accordance with the requirements of the contract.
On or about 2 December 2015 the windows were delivered to the applicants’ home.
On 2 December 2015 the applicants paid a $6,687 ‘delivery payment’ in accordance with the terms of contract.
On 14 December 2015 the respondent began the installation of the windows at the applicants’ home. That installation continued on and off over a period of time and was completed on or about 20 February 2017.
The applicants formed the view that the work had not been done in a satisfactory manner, that the workmanship was of poor quality and that some of the windows had been wrongly installed, and noted that the damage done in the removal of the existing windows had not been repaired. The applicants did not receive any certificates of compliance for the windows or doors. The applicants have refused to pay the final invoice amount demanded by the respondent.
The applicants’ claim is based on two areas of breach of contract: that the windows do not comply with the Australian Standards, and that the work was not done in a proper and skilful way.

Is the respondent in breach of contract?

The contract, as formed by the Quotation Information, contained the following express term: “All Windows and Doors supplied by Ardglass Windows conform to all relevant Australian … Standards.” There is a clear express representation by the respondent that the windows and doors supplied by him to the applicants would conform to all relevant Australian Standards. It is common ground between the parties that the windows and doors have not been certified by any relevant authority as compliant with the Australian Standards. The respondent says that while the windows and doors may not be certified as compliant with the Australian Standards they nevertheless conform to the requirements of the Australian Standards.
In support of this contention, the respondent provided a report by Mr Craig Brennan, prepared in relation to windows installed in other premises by the respondent. Mr Brennan’s resume indicates that he has extensive experience in the window industry, including working on Australian Standards committees. He has reached his conclusions based on an on-site inspection. There was no evidence that Mr Brennan had performed any pressure or safety tests upon the windows or doors in question, although he has laser-measured the thickness of the glass. He concludes that these windows/doors are representative the products to be installed in a number of houses in the local area[4] — referring to Mr Reynolds other customers — and he concludes based upon his observations that the products “will meet the requirements of AS2047”[5] for houses in this location. The report is specific to the location of the house in which these particular doors and windows would be installed and there is no information before the Tribunal as to whether Mr Brennan’s findings could also be applied to the windows and doors installed in the applicants’ premises.
[4] Report of C&M Brennan Management Services Pty Ltd trading as CMB Management 9 April 2018 [1.3]
[5] Report of C&M Brennan Management Services Pty Ltd trading as CMB Management 9 April 2018 [3.8]
The applicants provided to the Tribunal statutory declarations from other customers of the respondent, each of whom state that in conversations with them the respondent stated that the windows were certified to all relevant Australian Standards. There is, however, no direct evidence of the pre-contractual conversations between the applicants and the respondent.
Do the windows, although not certified, conform to the Australian Standards? The evidence before me establishes the following:
(a)The windows are certified to British or European Standards.
(b)British or European Standards are not the same as the Australian Standards.
(c)The investigations by ACT Fair Trading (Access Canberra) have established that the windows were not certified to Australian Standards and that the windows did not comply with the Australian Standards.
(d)The British or European Standards, and testing for compliance with those Standards, is not equivalent to the Australian Standards. The Australian Window Association reviewed the information provided by the respondent and stated:
The reports attached [for British standards] unfortunately have little relevance to AS2047 performance type testing that is required in Australia. There is no way to claim equivalence to our standards with the information in these reports.
I can find no evidence of pressure testing to Serviceability limits or Ultimate Strength. Without having the BS standards at hand … there is no way of knowing how long the pressure was held while water testing at each level and at what flow rate the water was running. The air infiltration results are not comparable to our requirement…[6]
The Australian Window Association also notes that compliance with Australian Standard 2047 is a minimum mandatory requirement within the Australian building codes.[7]
(e)The report by Peak Consulting, and the oral evidence of Mr Pudja, the expert author of that report, concludes that the windows are not compliant with the relevant Australian Standards as there is no certification labels of this product by the Australian Standards for glazing. It is noted in the report that the author has examined Australian Standard 2047 and the product information provided by the windows’ manufacturer.
[6] Email from Executive Director and CEO Australian Window Association to respondent and ACT Fair Trading (Access Canberra) 13 December 2017
[7] Email from Executive Director and CEO Australian Window Association to respondent and ACT Fair Trading (Access Canberra) 12 December 2017
In oral evidence Mr Pudja stated:
the certification required for Australian [S]tandards compliance for windows in terms of the framing and the glazing, it’s not just the framing and the glazing, but it’s the rubber seals that are used whether or not they have adequate UV resistance. Our – the reason we have different Building Code requirements to say Europe is we have a harsher sun here and rubber that is not UV resistant tends to perish quicker here in Australia than it does in Europe, and so seals around windows and things – this is why – then apart from that glazing itself we have certain requirements for the glazing whether it’s laminated or safety glass and how it will shatter, how it will perform if it’s impacted, and this is why the Australian standards have their own requirements. So with a manufacturer that doesn’t offer certification in Australia it’s basically saying, “We’ve built this product, but it’s not in compliance with your requirements”, and fundamentally it shouldn’t be then installed in an Australian building.[8]
[8] Transcript of proceedings 2 November 2018 pages 36-37
When asked about the report from Mr Brennan, Mr Pudja stated that it is not possible to conduct testing on windows in situ,[9] and so Mr Brennan’s report should be regarded as partial but not complete information as to the suitability of the windows.
[9] Transcript of proceedings 2 November 2018 page 39, line 20
I am satisfied on the evidence before me that the windows and doors supplied by the respondent are not certified to comply with the Australian Standards. I am further satisfied on the weight of the evidence before me that the windows and doors do not conform to the relevant Australian Standards.
The respondent has, in breach of contract, failed to provide to the applicants windows that comply with the express term of their contract. Further I find that the windows do not comply with the Building Code of Australia.
The second component of the applicant’s claim for breach of contract relates to the quality of the work. The Peak Consulting report concludes that the workmanship was generally defective and would require considerable work to remedy the defects. In particular the report noted:
(a)All windows displayed a poor application of silicon sealant to the exterior junction of the window and the adjoining brickwork. The work was not masked and not carried out to an acceptable professional standard and has resulted in the smearing of the window frames brickwork, displaying varying widths, along with areas showing gaps or cracking.[10]
(b)Flashing and sub-sill should have been installed with each window to meet the relevant building code requirements but no flashing was installed.[11]
(c)The internal fit out of skirtings, architraves and reveals is poorly executed with several visible defects that do not meet the standards and tolerances guide for acceptable workmanship and these are therefore considered defective.[12]
(d)The cladding above the windows displays evidence of defective workmanship with visible nail fixings, holes and gaps in several areas. There is also no visible head flashing, which indicates the installation does not comply with the building code requirements.[13]
[10] Peak Consulting, Special Purpose Inspection Window Installation Opinion/Report (Peak Consulting report) 5 June 2017 page 7
[11] Peak Consulting report 5 June 2017 page 7
[12] Peak Consulting report 5 June 2017 page 8
[13] Peak Consulting report 5 June 2017 page 8
In his oral evidence, Mr Pudja also noted that there were defects with the seals in relation to the windows and doors — in particular with the amount of silicon used — and that those seals would over time fail and that the lack of flashing would mean that there would be water ingress from wind driven rain. The respondent examined this witness in relation to the lack of flashing and the following exchange took place:
MR REYNOLDS: So I didn’t remove any flashings, and to install head flashings and sill flashings to a window that was never there, would that require a builder or would it require certification if bricks needed to be removed or whatever that process of installing the flashing would require?
Mr PUDJA: Installation of head and sill flashing in a retrospective matter usually it’s not – it’s not the sort of flashing you would put if it was a new window because to do that – because normal flashings in new construction that come – that are fitted to windows they’re usually, you know, like a DBC type material that you can build into the brickwork and so forth. When you’re doing it retrospectively you – what is expected is that you measure the opening and is – you manufacture a form [of] sub seal usually made of stainless steel or something like that to – to fit underneath the existing window frame which provides an upturn of the end and on the sides which is called dam ending to stop any water coming in through the sides or to bypass the frame in any way, you can do that at the head and the seal, and – and, yeah, depending on whether it’s just a window or whether it’s a sliding – [if] it’s a sliding door than the threshold you done it it’s – it’s done in a similar way, and so that – that is what you would do. So if – if the flashing weren’t present when the windows were removed well that’s unusual and again that wouldn’t have been approved that would have been an oversight and so a licensed builder installing – or anyone with any building knowledge installing windows afterwards would have taken that on board and said, “Okay, well I need to provide something even if it’s not there”.[14]
[14] Transcript of proceedings 2 November 2018 pages 44-45
This witness’s opinion as to the necessity to install flashing was reiterated and confirmed when he was recalled for further examination. The witness stated that the installation of flashing or drainage sills would ordinarily be included in the scope of work expected of a person who is retrofitting windows.[15] He stated:
you wouldn’t do a job without it, if you know what I mean, and that’s why it’s fundamentally flawed, that the installation is fundamentally flawed because they just haven’t observed to those basic things [that] are taught to every person who does window to installation. You’re just taught that in carpentry in 101 how to fit a window and it’s just – if you don’t do it it’s just – well it’s just not good enough.[16]
[15] Transcript of proceedings 2 November 2018 page 87
[16] Transcript of proceedings 2 November 2018 pages 87-88
Mr Reynolds later gave evidence that the original aluminium flashing under each window had been cut off and left there. Mr Reynolds had not installed any further flashing. It was evident from Mr Reynolds’ evidence that he did not understand the method of installing window flashing in Australia, and had not appreciated that flashing was necessary. The applicants provided photographs taken by them at the time of the installation of the windows. They revealed damaged plasterwork, gaps left between frames and doors, lack of flashing, silicon marks on doors and windows and gaps in the sealant, window frames that are not square or otherwise don’t fit properly, and window frames that are split by nails. These photos support the conclusion that the workmanship was of a general poor quality. The Peak Consulting report concludes:
Because the general nature of the defects both external and internal revolve around the defective installation and non-compliance with Australian standards and relevant building codes, along with the poor quality of workmanship associated with various parts of the installation, rectification of these defective works would require removal and reinstallation of all the windows and doors.[17]
[17] Peak Consulting, Special Purpose Inspection Window Installation Opinion/Report 5 June 2017 page 6, [7.2]
I am satisfied on the evidence before me that the work performed by the respondent is of a poor quality, particularly in relation to the lack of flashing, the lack of precision fitting of the windows and the general poor finishing and damage to plaster and other surrounding areas. The work performed by the respondent has not been performed in a proper and skilful manner and is not of acceptable quality.

What is the appropriate remedy for the breach of contract?

There are a range of remedies available to the Tribunal to remedy the breach of contract: relevantly in this case it is for the removal of the windows and doors, a refund of the money paid by the applicants to the respondent, and compensation for any consequent loss suffered by the applicants.

I have found that the windows do not comply with the relevant Australian Standards. This is a breach of the express term of the contract that they would conform to Australian Standards, and a failure by the respondent to supply building materials in accordance with the requirements of the Building Act and the ACL. The windows are not of an acceptable quality and are not fit for the purpose of being installed in an Australian home. These windows and doors cannot be used by the applicants and so the appropriate remedy is for the respondent to be required to remove the windows and doors at his cost, and for the applicants to be compensated for the cost of the work performed by the applicant. I note however, that upon removal of these windows and doors by the respondent, the applicants will not have to pay a third party for such removal. The purpose of damages for breach of contract is to put the innocent party back in to the position they would have been in had there been not breach of contract.[18]
[18] Robinson v Harman 154 E.R. 363 (1 January 1848)
In this instance, the applicants should be compensated for the cost of the work performed by the respondent, and the cost of making good any damage done by the respondent during the installation work. The applicants have provided two quotes each for the removal and reinstallation of the existing windows and the repairs of the defects caused by the window reinstallation. Each of these quotes exceeds $40,000. The Peak Consulting quote provides more detail than the Arrow Building and Constructions quote.
The applicants assert that they will be unable to obtain insurance cover for their house should they install windows that do not comply with the Australian Standards. The evidence to support this assertion is weak and based solely on a Shannon’s home and contents insurance product disclosure statement. This assertion, and the applicant’s complaint that the respondent has breached the contract by not providing windows that do comply with the Australian Standards, do not sit easily with the claim for damages based upon a quote for the removal and reinstallation of those same windows.
I am satisfied that the respondent caused damage to the walls adjacent to the windows and that this will require patching of plaster and painting. I am satisfied that the front entry door opening requires invasive inspection to determine whether the load bearing studs have been removed and whether the lintel is properly supported. I have determined, based upon the items set out in Table 1 in the Peak Consulting Report that the respondent should pay $5,000 compensation to the applicants.
The applicants have sought the Tribunal filing fee of $150 and I have determined that they are entitled to that fee, in accordance with section 48 of the ACT Civil and Administrative Tribunal Act 2008.
The applicants have sought the cost of the Peak Consulting report. The report was commissioned in June 2017; a copy of the report was provided to the respondent on 24 July 2017. The applicants commissioned the report to identify the problems with the windows and installation work and to ascertain what could be done to rectify the problems. The cost of the report is consequential damage and the applicants are entitled to be compensated in the amount of $660.00.
Subject to the respondent removing all windows and doors installed by him from the applicant’s premises, I have determined that the total liability of the respondent is $23,647 as follows:
(a)$22,837 compensation payable to the applicants, being:
(i) a full refund of the $17,837 paid by the applicants to the respondent; and
(ii) $5,000 compensation for the cost of remedying the damages caused by the installation; plus
(b)the Tribunal filing fee of $150; plus
(c)the cost of the Peak Consulting report being $660;
noting that the amounts in paragraphs (b) and (c) above are costs awarded to the applicants under section 48(2) of the ACT Civil and Administrative Tribunal Act 2008.
Should the respondent fail to comply with Order 1, then I have determined that the total liability of the respondent shall be $25,810 as follows:
(a)$27,437 compensation payable to the applicants, being:
(i)      a full refund of the $17,837 paid by the applicants to the respondent; and
(ii)      $5,000 compensation for the cost of remedying the damages caused by the installation; and
(iii)     $4,600 compensation for the removal of the windows;
this total being reduced to $25,000, being the jurisdictional limit that can be claimed in relation to a civil dispute application,[19] plus:
[19]ACT Civil and Administrative Tribunal Act 2008 s 18
(b)the Tribunal filing fee of $150; plus
(c)the cost of the Peak Consulting report being $660;
noting that the amounts in paragraphs (b) and (c) above are costs awarded to the applicants under section 48(2) of the ACT Civil and Administrative Tribunal Act 2008.
………………………………..
Senior Member J Lennard

HEARING DETAILS

FILE NUMBER:	XD 22/2018
PARTIES, APPLICANT:	Aaron John Chessell Maxine Joan Chessell
PARTIES, RESPONDENT:	Patrick Leo Reynolds
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member J Lennard
DATES OF HEARING:	17 August 2018 2 November 2018