Fabray Pty Ltd and City Of Rockingham - [2008] WASAT 276

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: LOCAL GOVERNMENT (MISCELLANEOUS PROVISIONS) ACT 1960 (WA)

CITATION: FABRAY PTY LTD and CITY OF ROCKINGHAM [2008] WASAT 276

MEMBER: MR C RAYMOND (SENIOR MEMBER)
MR R AFFLECK (SENIOR SESSIONAL MEMBER)
MR P WELLINGTON (SESSIONAL MEMBER)

HEARD: 29 JULY 2008

DELIVERED : 21 NOVEMBER 2008

FILE NO/S: CC 1575 of 2007
consolidated with CC 1576 of 2007 to CC 1591 of 2007 inclusive

BETWEEN: FABRAY PTY LTD
Applicant
AND
CITY OF ROCKINGHAM
Respondent

Catchwords:

Local Government (Miscellaneous Provisions) Act 1960 - Review of decision to issue notices requiring replacement of materials not in compliance with approved specification - Whether proposal for remedial works in lieu of replacement sufficient to justify exercise of discretion to set aside notices

Legislation:

Building Code of Australia, Table 3.4.4.2
Local Government (Miscellaneous Provisions) Act 1960 (WA), s 401, s 401(1), s 401(3)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant: Mr I Freeman
Respondent: Mr DP Gillett

Solicitors:

Applicant: Lavan Legal
Respondent: McLeods

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

Re; Griffiths ex parte Homestyle Pty Ltd [2005] WASCA 103

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant made 17 applications, which were subsequently consolidated, for the review of decisions made by the respondent, to issue notices pursuant to s 01(3) of the Local Government (Miscellaneous Provisions) Act 1960 (WA) requiring the replacement of various materials which were stated to not comply with the specifications as noted on the approved plans for the 17 dwellings concerned.
The applicant contended that either one of two proposals put forward by it to carry out remedial work would be preferable to a removal and replacement of the materials, because carrying out replacement would constitute a greater inconvenience to the owners of the dwellings. It was also contended that the remedial work would comply with the Building Code of Australia.
The Tribunal examined each of the proposals. Notwithstanding that the applicant had been afforded a more than sufficient time to properly investigate the extent of the corrosion to the steelwork concerned in order to determine accurately what remedial measures might be appropriate, the applicant had failed to do so. The Tribunal found that the information provided to it was quite inadequate to enable it to assess whether there was any appropriate course other than that required under the notices issued by the respondent. Not only was the extent of corrosion not adequately investigated but the applicant had failed to put satisfactory evidence before the Tribunal upon which to assess whether the steelwork concerned would be structurally sound after remediation.
The Tribunal held that in the exercise of a discretion whether or not to require building work to be pulled down or removed, it was necessary for the original decision‑maker, or the Tribunal on review, to be satisfied that the purposes of the legislation would not be compromised by allowing a proposed form of remediation in lieu of removal and replacement in accordance with the approved plans and specifications. One of those purposes was that proper building practices be followed to ensure that the quality of work specified was achieved and that the public interest in ensuring that buildings were safe was preserved. The Tribunal found that the evidence fell short of satisfying the Tribunal, that a comparable quality of work would be achieved by the proposed remediation, and that the work when completed would be safe.
The Tribunal expressed doubt as to when circumstances would permit a proposed form of remediation in lieu of compliance with the building plans and specifications, or the requirements of the Local Government (Miscellaneous Provisions) Act 1960 (WA) where the proposal contemplated payment of compensation to owners because of increased subsequent maintenance costs during the life of a building. That was because of the risk that the building would be sold and that a subsequent owner would not necessarily be aware of the maintenance issues involved and would not be the recipient of the monies to cover the increased maintenance costs.
The Tribunal rejected the applicant's contention that the proposed remediation methods would constitute a compliance with the requirements of Table 3.4.4.2 of the Building Code of Australia because the Table contemplated the provision of a minimum protective coating on steel which was not severely corroded, as in this case.
The Tribunal accordingly affirmed the decisions under review and dismissed the proceedings.

The application

On 9 October 2007 the applicant, Fabray Pty Ltd trading as Fini Group (Fabray) lodged 17 separate applications for the review of decisions made by the respondent, the City of Rockingham (City). The decisions sought to be reviewed were to issue notices under s 401(3) of the Local Government (Miscellaneous Provisions) Act 1960 (WA) (LG(MP) Act) in respect of 17 dwellings constructed by Fabray at Port Kennedy. The notices required Fabray to replace various materials which were stated to not comply with the specifications noted on the approved plans.
The allegations made in the notices are broadly that studs attached to the ridge beams and eaves pitching beams, various columns and beams should have been hot dipped galvanised but were not. Further, that a number of beams were of a smaller dimension than that specified. In some cases, the notices also required the replacement of a timber beam used in the construction of the carports with a hot dipped galvanised steel beam in accordance with the specification.
Fabray contends that it is not necessary to replace the steel studs, columns and beams which were used in the construction of the buildings on the basis that they can be treated to remove existing corrosion in a manner that will provide a satisfactory maintenance regime, with some monetary compensation to owners to cover any additional maintenance. Fabray also contends that although the materials used were of a smaller dimension than that specified, the steelwork concerned remained structurally adequate.
Fabray's application was initially premised on the basis that the City had failed to respond to a proposal that Fabray pay compensation to the owners in lieu of any remedial treatment. At the time of making the application, Fabray was unaware that the City had responded in the negative to that proposal to Fabray's agent with whom the City was then dealing. Consequently, the application proceeded on the basis of the issues defined in the parties' respective statements of issues, facts and contentions which were later filed.

A cautionary note to the City and individual owners

The City indicated at the commencement of the hearing of this matter that, if the application failed and the decisions to issue the notices were affirmed, it would not take steps to enforce compliance with the notices if any owners refused access to Fabray, or if Fabray was able to arrive at a commercial resolution of the matter with any owner ‑ the implication being that compensation might be accepted in lieu of any remedial work.
Having considered the evidence, the Tribunal is concerned that no individual home owner should enter into an agreement with Fabray for payment of compensation in lieu of remedial work, or adopt any course which results in less than adequate remedial work being carried out, without being fully informed. Owners who are involved in less than adequate remedial work being carried out should obtain independent legal advice as to their potential liability. For that reason, the Tribunal will make an order that a copy of these reasons for decision be provided by the City to each of the current owners of the properties concerned.
Further, the City should obtain legal advice concerning whether it is under a duty, having regard to its knowledge of the circumstances involved in these proceedings and the steps which it has taken to date, to ensure that it is not party to any course being followed which compromises the safety of the buildings and exposes current or future owners to risk of loss or injury.

The history of the proceedings

It is relevant to outline the history of the proceedings, because it has had an impact on the Tribunal's determination of the matter.
The first directions hearing was heard on 25 October 2007, approximately two weeks after the application was lodged. At that hearing, Fabray was represented by Mr D Fini and the City by Mr J McKay, both of whom subsequently provided evidence by written statements at the final hearing. At that directions hearing, information was provided to Mr Fini which indicated that the City had responded to all communications. It emerged that the agent then representing Fabray had not passed on information to Fabray. Mr Fini indicated that if he had known that the offer to pay compensation in lieu of carrying out remedial work was not acceptable, the problem would have been fixed. He requested time to reinspect the buildings and reach a view as to what was required in view of the additional time which had elapsed. The matter was then adjourned to a further directions hearing on 29 November 2007 to enable the parties to attempt to resolve the matter.
By consent of the parties, the matter was further adjourned to a directions hearing on 13 December 2007. At the directions hearing on 13 December 2007, Mr Fini again represented Fabray. The City was represented by Mr Nadebaum of its solicitors. No agreement had been reached between the parties and Mr Fini informed the Tribunal that he did not consider it was necessary to replace all of the steelwork concerned. He wished to have an opportunity to have a report prepared in respect of each house and indicated that the assessment would require some brickwork to be removed so that embedded steel could be examined. The proceedings were therefore adjourned to a further directions hearing on 20 March 2008, and it was directed in each matter, (the proceedings then not having been consolidated), that Fabray file and serve any report relating to each property as it became available. No reports were filed. On 20 March 2008 each matter was adjourned to a further directions hearing on 1 May 2008 pending the respondent obtaining an engineer's report. No engineer's report was filed at any time prior to the hearing. Engineering issues were addressed for the first time in the witness statement of Mr Robert Johnson which was transmitted by facsimile to the Tribunal on 28 July 2008, the day immediately preceding the final hearing.
By reference to engineers' reports, we do not include some earlier correspondence provided by Fabray's engineers well prior to the directions hearing on 20 March 2008. The earlier correspondence reflected Mr Johnson's view, based on his understanding of the wall thickness of the steel used and took no account of the extent of corrosion and the actual wall thickness which was affected thereby.
At the directions hearing on 1 May 2005, the Tribunal was informed that the City had considered a proposal from Fabray and it was not acceptable. This proposal, as the Tribunal subsequently became aware from the documents filed for hearing, was provided to the City on 28 April 2008 and was based on a report from Dr A Zurhar of Zedcon Scientific Services (Zedcon) dated 26 April 2008. The proposal involved blasting of the steelwork and application of an industrial coating system consisting of high build epoxy coating and a high gloss architectural polyurethane finish. The covering letter of 28 April 2008 proposed that new galvanised bolts be inserted on either side of the lugs holding down wall plates to the top of the beams, in case the lugs failed at some time in the future.
The Tribunal accordingly made orders consolidating all matters with CC 1575 of 2007 being the lead proceedings, and programmed the consolidated proceedings to a final hearing. Those directions included the Tribunal's usual directions with regard to expert witness statements and required that signed witness statements be filed and served not less than 14 days before the hearing date. Further, the parties' respective expert witnesses were directed to confer with each other and file a joint report not less than five days before the hearing. It was ordered that the consolidated proceedings be listed for hearing on 29 July 2008.
The program also made provision for the parties to file statements of issues, facts and contentions with which the parties duly complied. In accordance with the Tribunal's usual practice, the City as the decision‑maker was required to file its statement of issues, facts and contentions first, and Fabray was required to respond to it.

The issues

The City's statement of the issues to be determined was expressed in broad terms within a single issue, namely, whether Fabray should be permitted to apply an alternative remedial treatment method to the steelwork specified, or whether Fabray should be required to comply with the notices issued by the City under s 401 of the LG(MP) Act.
Fabray did not accept the City's formulation of the issues to be determined and expressed the issue to be determined as whether Fabray should be permitted to 'repair the defective items using the remedial system approved by the City of Rockingham on the 15th March 2006'.
It must be noted that Fabray was then not represented by solicitors. It is surprising that Fabray limited the issue for determination in the way in which it did to consideration of the proposal mentioned in the letter of 15 March 2006, because it is apparent from Fabray's correspondence that variations to this proposal were put forward.
Firstly, in a letter to the Tribunal dated 27 February 2008, Fabray referred to an intention to use wet grit blasting in lieu of dry grit blasting as contemplated by the original proposal. In the joint expert report, reference is made to an original system proposed by Interface (letter dated 29 February 2008). The letter to the Tribunal was under the letterhead of Interface and was signed by Mr D Fini. The role of Interface is not explained but it is apparent that either the joint report simply reflects an incorrect date or that the letter addressed to the Tribunal dated 27 February 2008 was forwarded under cover of other correspondence on 29 February 2008. The joint expert report in referring to this proposal makes reference to wet grit blasting.
The joint expert report then refers to a second system proposed by Interface (Zedcon System) which appears to be a reference to Zedcon's report prepared by Dr Zurhar dated 26 April 2008, that put forward a completely different proposal under which the existing galvanising would be preserved. The joint expert report recorded a qualification to the Zedcon report, namely that the spot primer specified would have to be changed. The joint expert report addressed the above proposals.
The first proposal is, in effect, the same as that contained in the letter dated 15 March 2006, save that instead of originally using sand blasting to reduce the steel to its original surface (involving removal of galvanising), it contemplated that wet grit blasting be used. The issue as defined by the City is wide enough to bring all proposals into consideration and the Tribunal will accordingly do so.
There was a matter raised in the evidence of Dr Zurhar and which counsel for Fabray raised by way of cross‑examination of the City's expert witness, Mr F Papworth, that Duragal products are, in fact, hot dip galvanised. Mr Papworth acknowledged that to be so. The steel used was manufactured by Duragal. The point of this admission was not clarified during closing submissions and it is not a matter on which there has been any issue between the parties.
The specifications, which constitute various notations upon the approved plans, refer in a number of places, to galvanising in different terms, for example, ' ‑ H.D. GALV. AFTER FABRICATION', 'FULL HD. GALV.' and 'HOT DIP GALV. ALL STEELWORK AFTER FABRICATION'.
Fabray's expert engineer witness, Mr Johnson, appears from correspondence to be a director of the corporate proprietor of the consulting engineering firm, BG&E. Mr Johnson wrote letters reflecting advice provided to Fabray relating to the steelwork, the extent of corrosion and proposed methods of carrying out remedial work and which express his views concerning the effect of the specifications noted on the drawings. The drawings reflect that the engineers responsible for the engineering design were BG&E. On the drawings the apparent proprietor of that firm is given as Bruechle Gilchrist and Evans Pty Ltd. The proprietor of BG&E referred to in the correspondence, being in particular two letters dated 21 September 2005 and 20 December 2005, is given as BG&E Pty Ltd. Whether this is just a change of name of the proprietor company is not clear. However, there is some obvious connection, given that both entities used the style 'BG&E'. In a letter dated 4 October 2005, annexure 'DF1' to Mr Fini's witness statement, Fabray's agent states that Bruechle Gilchrist & Evans (then trading as BG and E Consulting Engineers) were the engineers for the project under which the houses concerned were constructed.
In the above correspondence, Mr Johnson stated that the Duragal process is not equivalent to hot dipped galvanising and that the lesser quality of surface protection could be directly related to the condition of the steelwork. Further, that:
… the steelwork is nominated on the drawings to be hot dipped galvanised and that is not the case. We understand that the surface treatment to the exposed sections comprised an 'in line' galvanising process to achieve a zinc coating of 100 [milligrams/square metre] followed by architectural top coats. (Letter 20 December 2005 [2].)
The correspondence between the parties shows that Fabray has never disputed that the Duragal product does not constitute hot dip galvanising within the meaning of that phrase as used within the specifications. It is common cause that Duragal involves a form of hot dip galvanising but it results in a galvanised covering of lesser thickness than the hot dip galvanising process contemplated by the specifications. It cannot be understood in the circumstances that any issue is raised for determination because the Duragal process involves a form of hot dip galvanising. It has some significance only to the extent that Fabray contends that the remedial work will comply with the Building Code of Australia because it was originally hot dipped galvanised to the extent of 100 milligrams/square metre. Accordingly, the City's notices which assert that the materials concerned were not hot dip galvanised must be read as conveying that the materials were not hot dip galvanised within the meaning of and in accordance with the specification.
For the above reasons, the issues to be determined by the Tribunal are as follows.
1)In lieu of being required to remove the identified steel materials which have not been hot dip galvanised as that term is used in the specifications noted on the approved drawings in relation to each building, should Fabray be required to:
(a)carry out remedial work as identified in the letter from the City to Fabray's agent dated 15 March 2006 subject to substituting wet grit blasting in lieu of dry grit blasting, or,
(b)carry out the remedial work identified in the report prepared by Dr A Zurhar of Zedcon dated 26 April 2008, subject to the qualifications referred to in the joint expert report filed on 23 July 2008?
If the answer to either 1)(a) or 1)(b) above is 'yes', then the decisions made by the City to issue notices under s 401 of the LG(MP) Act should be set aside.

The hearing and evidence

Fabray filed witness statements of Mr D Fini and expert witnesses, Dr A Zurhar and Mr R Johnson.
The City filed witness statements of Mr J McKay and its expert witness, Mr F Papworth.
Only the expert witnesses were required to attend to give oral evidence and be subjected to cross‑examination. The Tribunal has had regard to all other witness statements and documents filed with the Tribunal.
Mr Fini made reference in his statement to Fabray's proposal for remedial work set out by Fabray's agent in a letter dated 4 October 2005, to which was attached a letter from BG&E and a proposal for remedial work prepared by Fremantle Paint Supply. This is understood to be a reference to the BG&E letter dated 21 September 2005. Mr Fini states that the City accepted that proposal, as set out in its letter dated 15 March 2006.
Mr Fini states that he has been in the building industry for 30 years and is a registered builder. Further, that replacing the steelworks would involve demolition and would be a large job causing considerable inconvenience to each of the owners. Further, that he is aware that one of the owners carried out his own remedial work and that another has demolished his carport so that there is no work to be done with respect to that property. He does not identify the owners concerned.
Mr Fini expresses his opinion as to whether the remedial works comply with various applicable Australian Standards and with the Building Code of Australia. Mr Fini's witness statement falls short of qualifying him as an expert on compliance with either the requisite Australian Standard or the Building Code of Australia. The parties' cases are based upon the evidence of the qualified expert witnesses to establish whether or not the proposed remedial work should be carried out in preference to replacement of the relevant material.
Mr McKay states that he is the Coordinator, Building Services employed by the City. His evidence proceeds to outline the basis upon which the building licences were issued for the construction of the dwellings. He refers to the approved plans attached to the relevant building licences which required the exposed steelwork to be hot dip galvanised. Mr McKay asserts that the product known as Duragal steel was used rather than hot dip galvanised steel and that the extent of noncompliance with the approved plans for each of the houses is set out in the Notices to which the application relates. There is then an outline of how the City became aware of the existence of severe rusting in structural steel framing on the rear verandah of one of the houses, and then refers to the correspondence which passed between the City and Fabray and Fabray's agent, Brooklyn Asset Pty Ltd.
Dr Zurhar's statement reflects that he is a director of Zedcon. A copy of his curriculum vitae is attached to the statement and the Tribunal is satisfied that he is fully qualified to give evidence concerning possible methods of remediation of the steelwork. A copy of the report, already referred to, dated 26 April 2008 is also attached to the statement. Dr Zurhar states that he advised in the report that an industrial coating system consisting of high build epoxy coating and high gloss architectural polyurethane finish should be applied to the steelwork to comply with the relevant Building Code of Australia standards. Dr Zurhar refers to and annexes the joint report prepared with Mr Papworth on behalf of the City.
Subsequent to the preparation of the joint report, Dr Zurhar refers to a further inspection carried out on the buildings. Mr Papworth was invited, but did not attend, the further inspection which was carried out to assess the condition of the steel embedded in the brickwork and to determine the extent of demolition that might be considered necessary. A column showing severe corrosion was selected for the purpose of the test. Three courses of brick were removed to expose the embedded steel. Ultrasonic steel thickness tests were carried out by Dr Zurhar with an electronic meter. The acquired data was provided to Mr Johnson to be included in a structural engineering report.
Dr Zurhar observed that the steel below the second course of brickwork which had been removed was unaffected by corrosion and indicated that the scope of remedial work should include demolition of the first two courses of brick to every carport and balcony pier of every house. Further, that the exposed steel should be cleaned, treated with an epoxy coating, the bricks reinstated and then the entire brick pier sealed with an epoxy paint finish instead of the existing acrylic finish. The rest of the statement deals with attempts to have Mr Papworth change the joint report. Mr Papworth indicated that he could not agree to changing the report and that it should reflect the previous points of agreement, that the joint report would include the need to do inspection and determination of treatment required, and that Mr Papworth could then say whether any report provided of the later inspection covers the points agreed or not. This information is contained in an email from Mr Papworth attached to Dr Zurhar's statement. Reference will be made further below to the evidence given by Dr Zurhar concurrently with Mr Papworth at the hearing.
Mr F Papworth's statement identifies that he is an engineer with over 30 years' experience in engineering and corrosion protection systems. A copy of his curriculum vitae attached to his statement is sufficient to satisfy the Tribunal that he is well qualified to give evidence concerning Fabray's proposals for remedial work to the steelwork.
Also attached to Mr Papworth's statement is a report prepared by him covering a range of issues relevant to the matter. Some of the points made are as follows. The City might need to have structural calculations verified by a structural engineer before accepting that the corroded 3 millimetre steelwork is acceptable structurally. BG&E had provided no calculations permitting a peer review by structural engineers. That BG&E were correct to state in its letter dated 21 September 2005 that the proposed coating system would meet Australian Standard 2312 requirements for long life in a severe marine exposure, but that applied to new structures and did not reflect the life expectancy when applied to corroding steelwork contaminated by chloride.
The steelwork is extensively corroded in areas and may have significant loss of steel section or pitting. The steel thickness should be measured and the results assessed by structural engineers. Hidden areas of steelwork may not need coating if a statistically representative test program shows that the galvanising applied will provide protection over the life of the structure. No details of such a test program have been provided.
If steel embedded in concrete has become active due to the corrosion protection of the concrete being broken down by carbonation of chlorides, the concrete may need to be broken down so that corrosion protection can be applied to the steelwork in the cover zone. If steel has not become active, it may be sufficient to apply a barrier coat to the concrete to protect ingress of carbonation and chlorides. No method for assessing this has been provided.
Because the life expectancy of the remedial work proposed by Dr Zurhar was less than that which could be expected if there had been compliance with the specification, an independent quantity surveyor should estimate the appropriate amount to be paid to house owners to compensate for their higher maintenance cost. Table 5 to the report reflects that the maintenance or restoration frequency based on Australian Standard 2312 would be between 10 ‑ 15 years, whereas, according to Dr Zurhar's report, the life expectancy would be between seven and 10 years.
Mr Papworth is critical of the remediation method proposed by Dr Zurhar. He considered that the coating specification is not a complete work method statement, which is needed in order to assess if the system proposed is adequate. An inspection and test plan that details how the work will be assessed to be compliant with the specification is required.
Further, the coating proposed may be inferior to that proposed previously as it does not include a zinc rich epoxy. Mr Papworth is critical that the specification provides only for the use of the first coating where the steel is taken back to bare steel. All exposed steel should be taken back to bare steel and the first coat should be applied to all steel. Provisions and acceptance criteria are required for excessive pitting, hidden steelwork, steelwork in concrete and sections that are not sealed.
Following a conferral between Mr Papworth and Mr Zurhar, a joint report was filed in accordance with the Tribunal's directions. The joint report reflected agreement, relevantly, in the following respects.
1)The external face of hollow sections of the steelwork which was exposed to the weather all needs to be remediated.
2)While it is unlikely that there are any internal faces of the open hollow section which are exposed to external weather, this would need to be checked by a visual survey, and if exposed, appropriate remedial measures would need to be proposed.
3)There is a moderate risk of unacceptable corrosion in the design life of the external face of steel inside the roof space. A minimum of five locations should be tested, each in a different house.
4)There is a low risk of unacceptable corrosion in the design life of the inside of open hollow sections inside the roof space. A minimum of two locations should be tested, each in a different house.
5)At least two locations where steel is embedded in a concrete cover zone should be tested to assess breakdown of corrosion protection. If that shows there is no risk of corrosion in the design life, then no additional work is required. If there is a risk of corrosion, additional testing would need to be carried out and a remedial approach developed.
6)If steel is embedded in brickwork (or other materials), a minimum of two locations should be tested to show whether the corrosion protection would last the design life. If not, additional testing would be needed and a remedial approach developed.
The expert witnesses also agreed that the thickness of steel in corroding areas could be accurately measured using an ultrasonic thickness gauge and that it was likely that a structural engineer would need to know actual steel thickness to make a full structural assessment.
In relation to the two proposals for remedial work, the following was agreed.
Firstly, in relation to the original proposal (referred to as that proposed by Interface in a letter dated 29 February 2008 ‑ which is, in effect, the proposal on which the City's letter dated 15 March 2006 is based (issue 1(a) above)). The time to maintenance first being required in this system as given in Australian Standard 2312 is 15 years, but only 10 years could be expected in the location concerned. However, the application of the system would be problematic as all the galvanising would have to be removed in order to apply the proposed zinc rich epoxy without incompatibility problems being experienced. This would remove more steel than in the Zedcon proposed system, with the potential to introduce structural issues. Further, the cost involved in protecting the surrounding house to prevent damage from extensive wet grit blasting would be high and might make the system more expensive in life cycle terms than the Zedcon proposal.
In relation to the Zedcon proposal dated 26 April 2008, the following was agreed.
The spot primer used in the Zedcon system should be changed to be a zinc phosphate primer that is compatible with the existing Duragal surface.
A specification needs to be provided for wet grit blasting describing a specific profile, that the steel be cleaned free of corrosion and contaminants and that all pits be ground out. Further, it should provide that a structural engineer advise on the size of perforation and cracks that are a structural issue, that all such perforations be reported to a structural engineer for assessment and that all perforations and cracks be ground and treated. The specification should also provide that all coating procedures and requirements be in accordance with product manufacturer specifications and the guidelines of Australian Standard 2312.
It was further agreed that the life of the Zedcon system of seven to 10 years is less than the life of the originally specified construction in that Duragal has been used in place of HDG and the presence of premature corrosion will ultimately compromise any applied treatments regardless of whether they are acrylic or two-pack based finishes.
The joint report then turned to identify factors which should be taken into account in selecting which of the proposals might be adopted. In doing so, the following was agreed.
Whichever system is used, if the owners were compensated for any additional costs that they incur in coating maintenance over the design life, then, although the Zedcon system has a shorter life than the 15 March 2006 proposal, it may be more economic to pay the owners more for recoating at intervals and less for the initial coating cost.
The need for a shorter than normal recoat period (some three to four years earlier than normal) is created by the absence of zinc galvanic protection to the extent intended by HDG and required by the salt environment, and not by the treatment regime. Future maintenance recoats will require the use of two‑pack products and it is noted that these are approximately twice as expensive as water-based acrylic paints.
It was agreed that the disparity between paint product costs and a reduction in the maintenance interval of three to four years will have a financial impact on the home owners. Further, that the overall system needs consideration rather than the relative performance of the topcoats.
The joint report then set out an agreement of the measures that would be necessary to ensure that an appropriate quality control system was adopted.
Finally, the expert witnesses agreed that much of the testing noted would need to be completed before a fully detailed remedial proposal could be prepared and that it might be beneficial for that testing to be carried out and a fully detailed proposal prepared prior to the hearing of the matter. In setting out the limitations applying to the joint report, it was agreed that there were considerable omissions in the technical appraisals carried out to date, and the inspections and tests detailed above need to be completed before it is possible to provide the Tribunal with a complete assessment of the appropriateness of any proposed course of action. Further, it was recorded that no assessment has been made of the cost to owners of accepting restoration of steelwork as opposed to replacement as that would need to be undertaken by an estimator. Nor had an assessment been made of the practicality of replacing steelwork as opposed to restoring it. Further, no design life has been established, and this should be determined.
As is evident, there was much agreement between the expert witnesses. The extent of disagreement was limited. In relation to the March proposal, Mr Papworth expressed the view that it could be carried out but the cost in providing the necessary protection to prevent collateral damage would be high. Dr Zurhar considered the proposal to attempt to totally remove the Duragal layer from the steel was technically misguided and fraught with insurmountable issues given the nature of the construction requiring treatment. He considered it to be impractical, unobtainable and to ignore the extent of collateral damage that would occur to neighbouring components.
The experts also disagreed with the maintenance regime required in the event that either remedial proposal was followed. Mr Papworth considered that although the repair systems would only require topcoat repair for the first two or three maintenance intervals, he considered the coating system would require total replacement at some point and that this would need to be included in any life cycle repair estimates. Dr Zurhar considered that only the top coat would require replacement over the design life.
Dr Zurhar and Mr Papworth gave concurrent evidence at the hearing in which they supported the opinions they had respectively provided as summarised above and provided clarification of some aspects of the matters referred to therein and in their respective witness statements. Relevantly, the following additional evidence was given.
Mr Papworth criticised both remedial proposals on the basis that, although the protective covering would be good if applied to new steel, that was not the case, as the steelwork had corroded. He accepted that it would be very difficult for all galvanising to be removed as contemplated by the March proposal.
Dr Zurhar stated that under the Zedcon proposal, it was not necessary to remove the galvanising and that all that was required was for it to be properly cleaned. He conceded that some parts of the steelwork would be inaccessible, but considered in these instances that any corrosion would be negligible because of lack of exposure to moisture. He stressed that he had remediated hundreds of structures by using the remedial measures proposed in the Zedcon proposal. By contrast, he considered that replacement would require total demolition of the car parks and balconies.
Mr Papworth disagreed that demolition was necessary and stated that, as a civil engineer, his view was that there would be no difficulty in propping the structures while replacing the steelwork.
Under questioning from the Tribunal, both Mr Papworth and Dr Zurhar agreed that there were areas of steelwork which could not be cleaned by blasting. Dr Zurhar suggested that where steelwork penetrated into timber, it should be sealed at the contact point using Sikaflex, a highly flexible sealer.
Both Dr Zurhar and Mr Papworth accepted that the minimum design life could be assumed to be a minimum of 50 years.
Mr Robert Johnson was then called to give evidence on behalf of Fabray. Mr Johnson confirmed his witness statement. The witness statement reflects that he is a director of BG&E Consulting Engineers.
In Mr Johnson's statement, he refers to the letter written by him dated 21 September 2005 and that the letter confirms that he reviewed the capacity of the columns and beams as built and confirmed that, in his opinion, the sections with the lesser wall thickness had adequate structural capacity to comply with the Building Code of Australia and relevant structural standards. Further, that the letter sets out his opinion that the extent of the surface corrosion was not considered to be compromising the structural adequacy of the steelwork. He concluded in his statement that if the steel was 2 millimetres thick, it would still be structurally safe.
Mr Johnson also dealt with the site inspection carried out on Friday, 18 July 2008, to the removal of three courses of brick from the brickwork piers to expose the embedded steel. He states that ultrasonic steel thickness tests were carried out by Dr Zurhar with an appropriate electronic meter. The acquired data was provided to him to be included in the structural engineering report, but due to time restraints, no reports had been produced. He observed further that the steel below the second course was unaffected by corrosion and that it was agreed by those present that the scope of work should include demolition of the first two courses of brick to every carport and balcony pier of every house.
The tests were carried out on two houses and only one of those had the brickwork removed.
During the course of Mr Johnson's oral evidence, a series of photographs were tendered into evidence. He was referred to the photographs being Exhibit 8(c) and Exhibit 8(d), which showed exposed steelwork after removal of three courses of brickwork. When asked if corrosion was evident within the lowest course of brickwork removed, Mr Johnson stated that zinc oxide was forming on the surface of the steelwork shown in the photograph Exhibit 8(c) but there was some evidence of rust on the lowest portion of the steelwork shown in Exhibit 8(d).

Mr Johnson stated that he still considered the structures to be structurally sound based on calculations in which the steelwork was taken to be 2 millimetres in thickness. That provided a considerable reserve. He did not have the calculations with him, they were in his car.

The parties' submissions

Fabray submits that the Tribunal is required to exercise the discretion under s 401(1) of the LG(MP) Act having regard to the intent and purpose of the legislation: Re; Griffiths ex parte Homestyle Pty Ltd [2005] WASCA 103 and that the notices require the replacement of the steel so as to comply with the approved drawings which necessarily involves demolition work and inconvenience to owners.
It is submitted that as none of the owners have been joined in the proceedings, there is the possibility that they may not allow remedial work to be carried out ‑ one owner has demolished the carport and another has carried out renovation and is unlikely to want the renovations disturbed.
In effect, it is submitted for Fabray that the remedial work proposed will comply with the deemed to satisfy provisions of the Building Code of Australia, in particular Table 3.4.4.2 and Option 3 applicable to a severe environment. Accordingly, it is not necessary or expedient to replace the steelwork when the work can be brought into compliance with the Building Code of Australia by a different method.
It is conceded on behalf of Fabray that the evidence does not establish what compensation should be paid to owners to cover increased maintenance cost if either of the alternative remedial proposals is followed. As we understand the submissions, it was suggested that those costs could be ascertained.
For the City, it is submitted that the proposed remedial measures do not provide the owners with what was originally specified, resulting in increased maintenance obligations. Further, it is clear that Fabray's expert witness concedes that not all corrosion will be treated and that there is a need to be certain that no structural deficiency will result. The City contends that the steelwork should be replaced in order to achieve compliance with the specification. Alternatively, if any proposal for remedial work should be regarded as being adequate, the City prefers the March 2006 option.

Consideration

The existence of a discretion in making a decision whether or not to require building works to be pulled down or altered means that neither the original decision‑maker, nor the Tribunal, should insist upon strict compliance with the plans and specification for a building, or a provision of the LG(MP) Act unless the purposes for which controls given to local governments under the LG(MP) Act would be compromised. It is clearly a purpose of the legislation that buildings be constructed in accordance with accepted building practices, that builders do not deviate from approved plans and specifications so that an intended quality of construction is achieved and that the public interest is preserved by ensuring that buildings are safe.
Accordingly, if the proposed remedial work will achieve a comparable quality of building to that which was specified and it will comply with the Building Code of Australia 'deemed to satisfy' or 'alternative solution' requirements, that would usually be a sufficient basis on which to exercise the discretion not to require the sometimes drastic measure that building work be pulled down, rather than remediated.
In our view, the evidence provided by Fabray falls far short of providing any proper basis upon which the discretion could be exercised in its favour. At its highest, all that the evidence does is establish that it may be possible to develop an alternative proposal for remedial work, which, together with payment of compensation to cover future maintenance work, might be sufficient to justify remedial work, rather than the pulling down and replacement of the steelwork in question.
The evidence of Dr Zurhar, Fabray's own expert, clearly establishes that a great deal of further testing is required in order to work up a proper specification for a proposed method of remediation.
In ordinary circumstances, if the Tribunal was satisfied on the evidence provided to it, that with some further investigation, a remediation proposal could be fully developed which would render it unnecessary to require building works to be pulled down or replaced, it would give very serious consideration to adjourning the proceedings to enable whatever further testing might be required to be carried out. However, in this case, Fabray has been given a more than adequate opportunity to have completed all necessary investigations and to have provided the Tribunal with acceptable evidence by the time of the hearing. Fabray has simply not availed itself of those opportunities.
Mr Fini requested time to reinspect the buildings and to reach a view as to what was required on 25 October 2007. On 13 December 2007, Mr Fini informed the Tribunal that he wished to have a report prepared in respect of each house and indicated that the assessment would require some brickwork to be removed so that embedded steel could be examined.
It is apparent that Fabray has never obtained any detailed report relating to each house.
The joint expert report is undated but was filed on 23 July 2008. It was obviously prepared prior to the further site inspection conducted by Dr Zurhar and others on 18 July 2008. The joint expert report reflects that the internal face of open hollow sections of steelwork which were exposed to the external weather would need to be checked by visual survey, and if they exist, appropriate remedial measures proposed. There is no evidence that was ever done. It was agreed that the inside roof space adjacent to the external face of the buildings should be investigated by a minimum of five locations being tested, each in different houses. There is no evidence that was done. It was agreed that the inside of open hollow sections inside the roof space should be tested in a minimum of two locations at different houses. There was no evidence that was done. It was agreed that steelwork embedded in concrete cover should be tested in two locations to assess breakdown of corrosion protection if nothing was done to provide acceptable protection (and if so, a method would need to be proposed). No method of protection was proposed and neither were any tests carried out.
It was agreed that steel embedded in brickwork should be tested at a minimum of two locations to show whether the corrosion protection would last the design life. This testing was done at the further site inspection on 18 July 2008. However, we are far from satisfied with the conclusions reached that it be sufficient that the scope of work include demolition of the first two courses of brick to every carport and balcony pier of every house. Brickwork was only removed at one house and the photograph Exhibit 8(d) reflects that rust was evident, on careful examination, at the base of the third course of brickwork. There can be no certainty that the proposed specification would therefore be sufficient.
As the joint report reflects, the inspections and tests detailed in the report needed to be completed before it would be possible to provide the Tribunal with a complete assessment of the appropriateness of any proposed course of action.
Notwithstanding the above statements in the joint expert report, which must have been prepared prior to 18 July 2008, Fabray made no application for an adjournment. Given the history of the matter, that is perhaps not surprising, and any adjournment would not have been lightly granted. In any event, Fabray conducted the case on the basis that the evidence provided to the Tribunal should be sufficient to set aside the decisions under review.
Further, a dispute concerning the issue of a notice by a local government under s 401 of the LG(MP) Act is primarily a matter between the local government and the recipient of the notice, being either the builder or the owner of the building. If Fabray intended to introduce payment of compensation to owners to cover future maintenance as a component of its proposal, it was for Fabray to apply to have the relevant owners joined in the proceedings. In any event, even if the owners had been joined, and had consented to a particular method of remediation plus payment of compensation to cover future maintenance costs, the Tribunal would not have been satisfied, without more, that this would have ensured the long‑term safety of the structures because of the likelihood of at least some of the properties being sold to persons who would not know of the original building deficiencies, the risks of corrosion in concealed locations and would not have had the benefit of the funds to meet the increased maintenance costs.
Even if we were inclined to accept a remedy involving payment of compensation, no evidence has been provided on which to make an assessment.
There are other aspects of the remediation proposals which concern the Tribunal. We accordingly turn to review the two remediation proposals.
We can understand the City's preference for the March 2006 proposal in that if all galvanising is removed, the proposed protective coating could be less expensively maintained than that under the Zedcon proposal because it has a longer maintenance cycle. However, both Mr Papworth and Dr Zurhar agree that there are areas which cannot be either cleaned (on the latter proposal) or blasted to the point of achieving the removal of all galvanising under the March proposal. We also accept that there will be a practical issue in preventing damage from extensive wet grit blasting.
In relation to the Zedcon proposal, it is noted that the specification attached from the paint manufacture included under cl 17 a statement that galvanised surfaces present unique problems for applied coatings such as white rusting of the galvanised layer and subsequent coating delamination, particularly in locations up to several kilometres from the coast. Therefore, the manufacturer 'claims [sic] no responsibility' for the performance of its coatings applied to galvanised surfaces. That problem appears to be met by the statement in the joint report that the spot primer to be used should be changed to be a zinc phosphate primer that is compatible with the existing Duragal surface for which Dr Zurhar was to provide a revision. No revision was provided prior to the hearing and therefore neither Mr Papworth nor the Tribunal is able to reach a view on the actual paint intended.
There are a number of concerns common to both proposals.
We were not satisfied with Dr Zurhar's evidence that in places, such as where steelwork penetrated into timber, applying a sealer to the join would provide sufficient protection because in the event of any breakdown in that seal corrosion of the steel in an obscured location could take place unnoticed. The approach also relies on the assumption that corrosion has not already started. If it has started, then the sealed joint will soon fail because the corrosion will cause expansion forces to develop between the steel and timber and threaten the integrity of the seal joint.
The photographs, to which reference has already been made, showing the removal of three courses of brickwork from a brick pier, were tendered after Dr Zurhar gave evidence. Dr Zurhar's evidence therefore went unchallenged when he asserted that no corrosion was evident below two brick courses. In fact, the location was between the third and commencement of the fourth brick course as conceded by Mr Johnson. This is indicative of the danger attached to insufficient testing having been carried out prior to the hearing.
Mr Johnson reported in his letter dated 21 September 2005 that corrosion of the exposed steelwork was observed at a high level on one of the houses and that although a limited inspection was undertaken of the other houses in the vicinity, it would appear that corrosion similar to that observed existed in some, but not all, of the other properties. He stated that at that stage, the extent of surface corrosion of the steelwork and lesser thickness of the structural section was not considered to be compromising the structural adequacy of the steelwork. However, he recommended that the remedial works be undertaken as a priority such that further deterioration does not occur.
It is inevitable that further deterioration has occurred since September 2005. The photographs forming part of Exhibit 8 and Exhibit 9 reflect a severe level of corrosion. The date on which the photographs in Exhibit 9 were taken was not established. However, the photographs comprised in Exhibit 8 were taken on the date of the last inspection undertaken by Dr Zurhar and others, being 18 July 2008.
Dr Zurhar and Mr Johnson testified that at the inspection on 18 July 2008, Dr Zurhar took ultrasonic steel thickness measurements, and the resulting data was provided to Mr Johnson to be included in a structural engineering report. No report was provided. He concluded in his letter of 21 September 2005 that the steelwork was still structurally safe. Yet, in the above letter, he refers only to the original drawings nominating that all steelwork in the balcony framing be 4 millimetres hot dipped galvanised after fabrication and that:
2.5We understand that the wall thickness of the steel sections in balconies is 3 millimetres and the steelwork has been fabricated from the product Duragal.
Mr Johnson's witness statement reveals that his opinion expressed in his letter was based on the steel being 2 millimetres thick. However, nowhere in the letter is there a statement of a conclusion, let alone any basis for a conclusion that the steel was 2 millimetres thick.
Mr Johnston proceeds in his witness statement to deal with other correspondence and then the site inspection on 18 July 2005. He states that the acquired data obtained from the ultrasonic steel thickness tests was provided to him. No evidence was given of the actual measurements and nowhere in his witness statement does he say that the steel work, based on the measurements taken on 18 July 2008 is structurally sound. In oral evidence Mr Johnson confirmed that the steelwork was still structurally bound based on the steel being taken to be 2 millimetres thick which allowed a considerable reserve. We understand this to be stated in relation to the measurements taken on 18 July 2008. But those measurements were never disclosed. This again reflects on the wholly inadequate case presented by Fabray.
We accept that Duragal is a product which is hot dipped galvanised to a coverage of 100 grams per square metre and that Option 3 of Table 3.4.4.2 of the Building Code of Australia prescribes that as a minimum external protective coating in a severe environment when covered with either two coats of solvent‑based vinyl primer, or two coats of vinyl gloss or alkyd. However, as Mr Papworth has contended, and we accept, that is intended to apply to severely corroded steelwork. We are not satisfied that the Table can have any application in dealing with steel corroded to the extent shown in the photographs Exhibit 8. While there are portions of the column shown in the photographs which might be said to be subject only to minor surface corrosion, which could be cleaned, there are also portions of the column shown which appear to be corroded to such an extent that all galvanising has been removed. We are not satisfied that the Table can have any application in the circumstances.
For all of the above reasons, we are not satisfied that either of the proposals advanced on behalf of Fabray are sufficient to justify an exercise of the Tribunal's discretion to set aside the decisions under review. Nor are we satisfied on the evidence presented that steelwork remediated, in accordance with either proposal, would be structurally sound.
It is necessary to deal with the submission put on behalf of Fabray that some owners may not allow access for any work to be carried out. It appears that a carport has been demolished on one of the properties and that is work which now cannot be carried out. The particular property was not identified. It may be that one of the owners has also carried out remedial work, assuming that what has been done is adequate, which may or may not be the case.
This question was debated at the commencement of the hearing and resulted in the City giving the indication which it did that it would not commence prosecution proceedings for failing to comply with any notice in particular circumstances. One of those circumstances was if an owner refused Fabray access to carry out the necessary work. As we indicated in the cautionary note at an early part of these reasons, we are concerned that owners should be fully informed and therefore that a copy of these reasons for decision should be provided to all owners. If any owner thereafter refuses Fabray access, the City will have discharged its responsibility under s 401 of the LG(MP) Act. However, any such owner should be aware that if as a result of corrosion a building becomes unsafe, the City has power under s 403 of the LG(MP) Act to require the owner or occupier of the builder to take it down, secure, or repair it as the case requires. Nevertheless, if an owner declines to give Fabray access, it is apparent that the City will take no action, and even if it did, it is difficult to conceive that any prosecution could be successful.
Similarly, if an owner has demolished a carport, that is likely to constitute a good defence for failure to comply with the relevant notice, at least to that extent. We can give little weight to this evidence when the owner is not identified. Further, if an unidentified owner has carried out inadequate repairs, that need not prevent Fabray complying with the relevant notice.
Lastly, Fabray's statement of issues, facts and contentions alleges that the owner of a particular property has accepted a monetary settlement to carry out repairs himself. No evidence was given to support that assertion. If true, that may or may not be a defence to any prosecution for failure to comply with the relevant notice. But in circumstances in which this Tribunal is not satisfied, on the evidence presented, that any adequate remedial work has been carried out, it is no reason for not affirming the notices.

Order

In all the above circumstances, the Tribunal will issue an order as follows:
1.The decisions under review resulting in the respondent issuing 17 separate notices to the applicant, each dated 3 September 2007, under s 401 of the Local Government (Miscellaneous Provisions) Act 1960 (WA) are affirmed.
2.The proceedings are dismissed.
3.On or before 21 December 2008, the respondent must forward a copy of the Tribunal's reasons for decision by ordinary post to each of the owners of the properties the subject of the above notices.

I certify that this and the preceding [115] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER