EFTOS and R & B HUNTER PTY LTD
[2020] WASAT 94
•12 AUGUST 2020
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: EFTOS and R & B HUNTER PTY LTD [2020] WASAT 94
MEMBER: MS KY LOH, MEMBER
MS S CHURN, SESSIONAL MEMBER
HEARD: 20 MAY 2020
DELIVERED : 12 AUGUST 2020
FILE NO/S: CC 172 of 2020
BETWEEN: JAMES EFTOS
Applicant
AND
R & B HUNTER PTY LTD
First Respondent
ALPHA PLUMBING AND RENOVATION PTY LTD
Second Respondent
Catchwords:
Building services complaint - Whether removal of air-conditioning unit without disconnecting water within scope of works - Whether recharge of water supply without investigating open lines was work not carried out in proper and proficient manner or unsatisfactory - Whether non-pecuniary damages compensable under s 36(1)(c) of Building Services (Complaint Resolution and Administration) Act 2011 (WA)
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 3(1), s 3(1)(b), s 5(1), s 5(2), s 9, s 11(1)(d), s 36(1), s 38, s 38(1), s 43
Home Building Contracts Act 1991 (WA), s 3(1), s 3(1)(c)
Seaman's Compensation Act 1911 (Cth) (repealed)
State Administrative Tribunal Act 2004 (WA), s 63(2)
Result:
Applicant's complaint against second respondent partially successful
Applicant's complaint against first respondent dismissed
Category: B
Representation:
Counsel:
| Applicant | : | In Person |
| First Respondent | : | In Person |
| Second Respondent | : | Non-Appearance |
Solicitors:
| Applicant | : | N/A |
| First Respondent | : | N/A |
| Second Respondent | : | N/A |
Case(s) referred to in decision(s):
Dumbreck and Tangent Nominees Pty Ltd [2016] WASAT 138
Joyce v The Australasian United Steam Navigation Co Ltd [1939] 62 CLR 160
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
This is an application by way of referral to the Tribunal from the Building Commissioner (Commissioner) exercising the power under s 11(1)(d) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) to refer the complaints by the complainant, Mr James Eftos (owner), to the Tribunal under s 38 and/or s 43 of the BSCRA Act.
The owner lodged with the Commissioner complaints against the first respondent, R & B Hunter Pty Ltd (Hunter) and the second respondent, Alpha Plumbing and Renovation Pty Ltd (Alpha) under s 5(1) and/or s 5(2) of the BSCRA Act on 2 July 2019, claiming pecuniary damages of $10,000 for the water damage to ceiling structures, walls/plaster, timber skirting and sideboard top and non-pecuniary damages of $10,000.
On 29 January 2020, an authorised inspector prepared an investigation report into the complaints under s 9 of the BSCRA Act, recommending referral of the complaints to the Tribunal due to the claim for costs associated with pain and suffering and future damage, and the owner disputing a Building and Energy Plumbing Inspector's (B&E inspector) assessment.
On 3 February 2020, the complaints were referred to the Tribunal. Directions hearings were held on 3 March and 28 April 2020 at which only the owner and Hunter's representatives appeared.
The final hearing was conducted on 20 May 2020 at which only the owner and Hunter's representatives appeared. Tribunal records indicate that the notices of the final hearing were sent out by email to Alpha on 30 April 2020, and as such the Tribunal proceeded with the final hearing in the absence of Alpha pursuant to s 63(2) of the State Administrative Tribunal Act 2004 (WA).
Background
In March 2018, Hunter undertook renovation works to the owner's home, which included removal of an evaporative air-conditioning (AC) unit in the roof. After removing the AC unit, Hunter left an uncapped water pipe in the ceiling cavity.
In April 2019, Alpha undertook plumbing works, in the course of which it turned on the tap for the water supply to the uncapped water pipe, which resulted in water leaking into the ceiling cavity and causing water damage.
The owner alleges that the water damage was caused both by Hunter's failure to secure the water service pipe after Hunter removed the AC unit from the roof and by Alpha's failure to confirm the integrity of the pipe or water service.
The facts as to the physical cause of the water damage is largely not in dispute between the parties.
What is in dispute between the parties is whether there was any failure by Hunter and/or Alpha in carrying out their respective works which caused or contributed to the water damage.
Evidence in respect of Hunter's work
The owner and Hunter entered into a lump sum building contract for alterations and additions to the owner's home by which Hunter agreed to build and complete alterations and additions building work in accordance with the contract and the attached drawings and specifications. In the attached 'Specification/Addenda/ Schedule of Finishes' to the contract, there was an item 'Air Conditioning' that stated '[r]emove existing evaporative system from roof & make good roof tiles'.
Mr Troy Hunter (Mr T Hunter), the manager of Hunter, testified that he had spoken extensively with the owner about the renovation work. He recalled being told that the AC unit was old, had not been used for many years, was broken and disconnected. He did not make allowances in the quote for work to disconnect the water and electricity from the AC unit.
Mr Adrian Hunter (Mr A Hunter) was the head supervisor who removed the AC unit. He testified that when he asked the owner if the AC unit had been decommissioned, the latter replied that it had been 'decommissioned' by a licensed contractor and that it was no longer working.
Mr A Hunter then tested the unit to make sure that power and water had been isolated from the AC unit. He observed no water coming out, which led him to believe it was isolated. Having been satisfied that both power and water were no longer connected to the AC unit, he dismantled the AC unit. He bent the pipe back to the roof space but did not cap it.
Mr A Hunter testified that he was not a licensed plumber or electrician, although it was standard practice for Hunter to contact a licensed plumber or electrician if issues arose. Mr T Hunter confirmed that Hunter had a licensed plumber and electrician on site if necessary.
The owner accepted that he had used the term 'decommissioned' but denied that he had ever used the term 'not connected'. He later admitted that he said to Messrs A Hunter or T Hunter that he had had a licensed AC technician disconnect the power to the AC unit as he considered that was his duty of care to the builders. The owner said however that the issue of water was never discussed.
The owner contended in written submissions to the Commissioner that the term 'decommission' should be interpreted to mean 'to retire from active service; to deactivate; to shut down'. In his view, to decommission or deactivate the AC unit required only the power, not water, to be disconnected.
Evidence in respect of Alpha's work
In the notices of proposed complaint dated 18 June 2019 to each respondent, the owner stated that Alpha was engaged on 29 April 2019 to locate and repair a leak in the main water service, and to replace the existing storage hot water system (HWS) with a Rinnai 26 instantaneous gas system. In the course of the installation, the owner stated that Alpha technicians elected to connect the new HWS to the water pipe that was servicing the AC unit via a t-branch above the inline tap, which had been secured in the closed position.
Based on the photos submitted with the building complaint, it appears that the HWS was in fact connected to the water pipe below the inline tap, which is confirmed in the written submissions from Hunter to the Commissioner dated 7 October 2019.
In written submissions to the Commissioner, Alpha stated that in order to install a new HWS for the owner and replace the existing HWS, they had to disconnect the water service and recharge once works were completed. They had to turn the water off again when a leak was detected and an open water line was discovered in the roof space.
Alpha then located and isolated the open line whilst on site at additional cost to the owner.
Alpha stated that the isolation valve to the specific open line was adjacent to the HWS at approximately 1.5 metres from ground level with no clear markings indicating this valve controlled an open water line in the roof cavity. The pipe was not clearly visible and would have required accessing and investigating the entre roof space without prior knowledge of its location.
Alpha stated that at no time was it ever aware or told that the AC unit was left in an open state in the roof space.
Alpha's tax invoice from Alpha dated 30 April 2019 detailed the following works to the owner's home:
a)electronic water leak detection;
b)repair burst water pipe 'near air con' (which the Tribunal takes to mean another AC, given that the AC unit in the roof was removed);
c)supply and install Rinni B26 and valve kit;
d)upgrade main gas line to accumulate the right gas supply and pressure for the new HWS; and
e)locate and repair unsealed main water supply to the 'previous Evab air con' (which the Tribunal takes to mean the removed AC unit).
Whilst not specifically referred to in Alpha's written submissions, the Tribunal finds on the documentary and oral evidence that Alpha's works extended to locating and repairing a leak in the main water service, and that Alpha had connected the new HWS to the water pipe that was servicing the old AC unit via a t-branch below the inline tap.
Failure to disconnect water supply
Alpha submitted that relying only on the isolation valve was insufficient for permanently isolating the water service line and for future maintenance works, and that a licensed plumber should have decommissioned the unit in a correct manner.
In a similar vein, comments were provided by the B&E inspector that an isolation valve was not a sufficient method to isolate a water supply as it could be easily turned on. The B&E inspector recommended seeking the identity of the plumber responsible for the non-compliant isolation of the AC unit, who he considered was responsible in part for the water damage as the plumber completed a non-compliant disconnection of a water supply.
In response, the owner disputed the need to disconnect the water service whilst the AC unit was unused as the water was turned off at a remote (inline) tap and the water service/tap could stay in that state until such time as the AC unit was recommissioned or removed.
The owner stated that due to the design of the AC unit, any failure of the tap servicing the water pipe would be contained within the water trough via a float regulator and/or expelled harmlessly onto the roof. The owner submitted that it was therefore in a safe state, and would remain safe unless its state was altered. He stated that removing it from the unit (the water trough) altered its state and thereby increased the potential for an uncontained incident.
It is clear from the above that the owner was aware that the water service to the AC unit was still connected via the inline tap after the AC technician had disconnected the electricity, which fact, on the basis of the documentary and oral evidence, was not communicated to Hunter.
The owner's failure to inform Hunter is curious, given his repeated advice about the AC unit being decommissioned (for power, on his evidence) yet he was silent about the AC unit being still connected to water service via the inline tap, if he was indeed expecting Hunter to disconnect the water supply.
The owner's oral testimony did not go as far as to confirm his positive belief that that the water supply to the AC unit had been properly isolated by Hunter, simply that the owner had never discussed the issue of water with Hunter.
The primary issue in this case is whether the task of disconnecting the water supply, or at least investigating whether the water supply was disconnected (or alternatively investigating whether there were any open lines in the water supply), fell within either or both respondents' scope of works.
If so, the Tribunal then relevantly needs to be satisfied that these works constitute a 'regulated building service' or there has been a breach of a 'home building contract' for which a building remedy order (BRO) may be made.
Finally, the Tribunal needs to consider whether the regulated building service was carried out in a proper and proficient manner or is faulty or unsatisfactory for the purposes of s 38(1) of the BSCRA Act.
The Tribunal accepts Alpha's assertion (which was not contested by the owner) that the owner did not advise the AC unit was left in an open state in the roof space. Another issue will be what responsibility (if any) the owner should bear for not advising Hunter or Alpha that the water service to the AC unit was still (or at least potentially still) connected via the inline tap.
Complaint against Hunter
In determining the scope of works for which Hunter was contracted to perform, it is necessary to consider the ordinary and natural meaning of the term 'remove', which is defined in the Macquarie Dictionary Online (as at 11 August 2020) as relevantly:
1.to move from a place or position; take away; take off[.]
2.to move or shift to another place or position.
…
4.to displace from a position or office.
5.to take, withdraw, or separate (from)[.]
The owner accepted that the scope of works for the removal of the AC unit was limited to that one-line item in the specifications, and there was no specifics about electrical work or plumbing work. He contended however that that term as used in the contract must mean that when you remove something, you make sure it is secured, which includes whatever services are connected to it.
In the Tribunal's view, the requirement to ensure that the AC unit is secured when removed extends beyond the ordinary meaning of the term 'remove'. The scope of works as indicated in the contract simply required Hunter to move or take away (or take off) the AC unit (and perhaps any minor ancillary parts) from the roof to another place.
Significantly, this item of works was silent about disconnecting electricity and water supply, which the Tribunal considers to be separate works that required specific provision in a contract as it would require the engagement of a licensed electrician or plumber respectively and would accordingly need to be factored into the cost of the contract.
The question remains as to whether Hunter should have investigated whether the water supply was disconnected.
To the extent that there could be implied in Hunter's scope of works an ancillary obligation to investigate whether the water supply was disconnected (which the Tribunal is not convinced could be read into its scope of works), in circumstances where:
a)the owner had repeatedly advised that the AC unit was decommissioned by a licensed technician;
b)the owner had failed to inform Hunter that it was still connected to water service; and
c)Mr A Hunter's observation of the absence of water coming out when he removed the water pipe;
Hunter would have discharged any such duty if it had existed.
Although the parties diverge on their interpretation of the word 'decommission', the Tribunal finds that there was sufficient ambiguity in what was said between the parties for it to be open to Messrs A Hunter and T Hunter to adopt the interpretation which they did.
Complaint against Alpha
Alpha has conceded that as part of its scope of works that it was necessary to disconnect the water service to the residence and recharge the water service once those works were completed.
As Alpha was also engaged to locate and repair a leak in the main water service, the Tribunal finds that there would have been a general requirement for Alpha to carry out appropriate investigations into the possibility of any open lines before recharging the water supply.
The fact that Alpha then directly connected the new HWS to the water pipe further extended its obligation to investigate, before turning the inline tap, the location to which that particular pipe led so as to be satisfied that the tap was not connected to an open water line.
The Tribunal rejects Alpha's contention that the lack of identifying markings on the isolation valve and the lack of visibility of the pipe absolves Alpha of its obligation to carry out appropriate investigations into the possibility of any open lines. Whilst it is not contested that the owner did not tell Alpha about where the tap led to, conversely there was no evidence that Alpha made those enquiries.
Regulated building service
Having found that Alpha's scope of works included investigating the possibility of open lines before recharging, in particular, investigating the water pipe into which the new HWS was connected before turning the inline tap, the Tribunal must determine whether Alpha's works fall within the definition of 'regulated building service' under s 3(1) of the BSCRA Act.
Part (b) of the s 3(1) definition of 'regulated building service' refers to ‘home building work' that is carried out under a contract or arrangement for gain or reward, and not carried out for a person who is in turn obliged to perform the work under another contract.
'Home building work' is in turn defined in the BSCRA Act by reference to its meaning in s 3(1) of the Home Building Contracts Act 1991 (WA) (HBC Act).
Under part (c) of the s 3(1) definition of 'home building work' in the HBC Act, the whole or part of the work of altering, improving or repairing a dwelling is relevantly included within that definition.
The terms 'alter', 'improve', and 'repair' are not defined in the HBC Act. Under the Macquarie Dictionary Online (as at 11 August 2020), those terms carry the following relevant meanings:
'alter':
1.to make different in some particular; modify[.]
'improve':
…
2.to make (land) more profitable or valuable by enclosure, cultivation, etc.; increase the value of (property) by betterments, as buildings[.]
'repair':
1.to restore to a good or sound condition after decay or damage; mend[.]
The Tribunal is satisfied that Alpha's contractual arrangement with the owner to repair a leak in the main water service and to install a new HWS constitutes altering, improving and repair works within the definition of 'regulated building service' under s 3(1) of the BSCRA Act.
Carried out in proper and proficient manner or is faulty or unsatisfactory
The Tribunal can deal with the complaint under s 38 of the BSCRA Act by making a BRO if it is satisfied that the regulated building service has not been carried out in a proper and proficient manner or is faulty or unsatisfactory.
Having found that Alpha was obliged to investigate whether there were open lines before recharging and, in particular, before turning the inline tap on the water pipe to which the HWS was connected, Alpha's failure to perform either investigation leads the Tribunal to find that its works were not carried out in a proper and proficient manner or is unsatisfactory.
Building remedy order
The Tribunal may make a BRO consisting of an order under subparagraphs (a), (b) or (c) of s 36(1) of the BSCRA Act.
BROs under subparagraphs (a) and (b) of s 36(1) of the BSCRA Act relate to a remedy of the building service, which is not directly relevant as the deficiency in Alpha's works relates to its failure to investigate open lines while installing a hot water system or repairing a leak, not the installation or repair itself.
Instead, it is appropriate to consider making a BRO under subparagraph (c) of s 36(1) of the BSCRA Act, which requires the person who carried out the regulated building service to pay an aggrieved person a specified sum of money to compensate the latter for the failure to carry out the building service in a proper or proficient manner or for faulty or unsatisfactory building work.
Meaning of ‘compensation'
The meaning of 'compensation' was considered in Joyce v The Australasian United Steam Navigation Co Ltd [1939] 62 CLR 160 (Joyce) in the context of workers compensation legislation under the Seaman's Compensation Act 1911 (Cth) (now repealed), which provided compensation for personal injury for seamen by accident arising out of and in the course of their employment. Under that particular legislative scheme, workers were not entitled to recover compensation both independently and also under the legislation, but subject to that particular provision the legislation was not to affect any civil liability under any other law.
The majority of the High Court held in Joyce that the scope of statutory compensation was wide enough to cover both compensation for injuries which involved no breach of duty as well as compensation for injuries which involved tortious acts or damages: at 166 per Latham CJ, 170 per Starke J, 172 per Evatt J, 177 per McTiernan J.
Starke J considered (at 169 in Joyce) that statutory compensation payments should not be equated to damages in the ordinary sense of the word:
… Damages are sums payable by reason of some tortious act some breach of duty whether imposed by contract, by the general law, or by legislation ( Hall Bros Steamship Co. Ltd v Young, (1938) 3 All ER 234 ; (1939) 1 All ER 809 ; (1939) 1 KB 748). But the meaning of the word 'compensation' in the Seamen's Compensation Act 1911 depends upon its provisions and the context in which the word is found.
To similar effect, Evatt J considered (at 172 of Joyce) the word 'compensation' aptly referred to money payments from the employer to the seaman in respect of the personal injury, and McTiernan J found (at 177) that the word 'compensation' carried its general description covering any pecuniary redress which the worker might recover in curial proceedings.
Building remedy order under s 36(1)(c)
The relief provided by BROs under s 36(1) of the BSCRA Act are directed towards remediating of (or compensating for) regulated building services which have not been carried out in a proper or proficient manner or are faulty or unsatisfactory. Notably, a BRO under s 36(1)(c) of the BSCRA Act does not expressly provide a general right of compensation for any damage or loss suffered as a result of the impugned building service.
In this case, the Tribunal is satisfied that a BRO requiring Alpha to pay a specified sum of money to the owner, by reference to the water damage resulting from Alpha's failure to investigate open lines, should be made to compensate for Alpha's failure.
Having inspected the damage, Hunter provided a quote of $2,290 plus GST on 7 October 2019 to make good the affected ceiling insulation, paint and stain seal affected ceiling areas, repair and paint any affected wall, and sand and recoat affected TV cabinet. Hunter conceded that its quote was on a discounted basis and not on a full-cost basis, and thus submitted an updated full-cost quote following the hearing of $3,956 plus GST (that is, $4,351.60).
Mr T Hunter also gave evidence at the hearing that based on Hunter's assessment he did not consider the ceiling needed to be replaced as it appeared intact and not dropped away from timbers, although he was prepared to carry out a further assessment.
The owner has also submitted an estimate prepared by Mr Tom Paparusis, Director of Vogue Constructions WA, for $11,300 plus GST to replace and repair the damaged ceilings, insulation, re-painting, plumbing and clean up, although the estimate is subject to a detailed prior assessment to confirm the works. The owner did not call Mr Paparusis to give evidence at the hearing, and the Tribunal was not able to test Mr Paparusis on the basis for his estimate.
As the only evidence of the cost of repair to which a builder is prepared to commit on an unconditional basis is the Hunter updated quote, and in the absence of expert evidence that the ceiling needs to be replaced, the Tribunal accepts Hunter's updated quote as the basis for making a BRO.
Non-pecuniary damages
To the extent that the owner is claiming non-pecuniary damages relating to future and unforeseen degradation or integrity of roof structure and walls, there has been no expert evidence led on the likelihood of this future risk and how this risk could be quantified. The Tribunal is thus not satisfied that there is a sufficient basis for making a BRO to allow for such compensation.
As to the claim for non-pecuniary damages for disruption to normal living and routine during repairs and restoration, and loss of derived pleasures and expectations from the renovated living areas, the Tribunal is not prepared to make any allowance in the BRO for this claim.
In light of the Tribunal's interpretation of BROs at [63] above, the Tribunal does not accept, as a general concept, that non-pecuniary damages for what amounts to a loss of amenity falls within the scope of compensation under s 36(1)(c) of the BSCRA Act.
In Dumbreck and Tangent Nominees Pty Ltd [2016] WASAT 138, the Tribunal then constituted found that s 36(1)(c) of the BSCRA Act did not include claims for compensation for inconvenience, stress and suffering. In that case, the Tribunal relied, amongst other factors, on the second reading speech of the Home Building Contracts Bill (see Hansard, Western Australia, Parliamentary Debates, Legislative Assembly, 9 May 1991, page 1646 (Hon Yvonne Henderson)) making it clear that the purpose of the BSCRA Act was not to prevent actions for breach of a home building contract being taken in courts (at [52]).
In the exercise of its discretion in these proceedings, the Tribunal is also cognisant that the owner bears some responsibility for his loss of amenity due to the water damage. He held personal knowledge about where the inline tap led (which was in close proximity to the new HWS), which was a vital piece of information that may have prevented the leak from occurring but which he did not disclose to Alpha.
The Tribunal therefore declines to include in the BRO an allowance for the non-pecuniary damages claimed by the owner.
Conclusion
Accordingly, the Tribunal concludes and finds as follows:
a)it was not within Hunter's scope of alterations and additions work to disconnect the water supply to the AC unit, nor to investigate whether the water supply was disconnected;
b)it was within Alpha's scope of plumbing works to investigate the possibility of open lines, in particular, the water pipe into which the new HWS was connected;
c)Alpha's plumbing works to repair a leak in the main water service and to install a new HWS fall within the definition of 'regulated building service' under s 3(1) of the BSCRA Act;
d)Alpha's failure to investigate as particularised in para (b) above constituted a regulated building service which was not carried out in a proper and proficient manner or is unsatisfactory;
e)a BRO requiring Alpha to pay a specified sum of money to the owner, by reference to Hunter's updated quote for repairing the water damage, should be made to compensate for Alpha's failure under para (d) above;
f)the owner's claim for non-pecuniary damages does not fall within the scope of compensation under s 36(1)(c) of the BSCRA Act.
Orders
The Tribunal will make the following orders:
1.On or before 11 September 2020, the second respondent must pay the applicant by way of compensation $4,351.60, pursuant to s 36(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA).
2.The applicant's complaint against the first respondent is dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS K Y Loh, MEMBER
12 AUGUST 2020