FERRARA and WEBB & BROWN-NEAVES PTY LTD

[2021] WASAT 155

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)

CITATION:   FERRARA and WEBB & BROWN-NEAVES PTY LTD [2021] WASAT 155

MEMBER:   MS P LE MIERE, MEMBER

MR W GREGORY, SESSIONAL MEMBER

HEARD:   10 AND 11 MARCH 2021

SUBMISSIONS DATED 11 JUNE 2021 AND 22 JULY 2021

DELIVERED          :   8 DECEMBER 2021

FILE NO/S:   CC 276 of 2020

BETWEEN:   PATRICIA FERRARA

First Applicant

DARRYL FERRARA

Second Applicant

AND

WEBB & BROWN-NEAVES PTY LTD

Respondent

Catchwords:

Building services - Building remedy order - Jurisdiction of the Tribunal - What complaint was referred to the Tribunal - Introduction of new issue during cross-examination not allowed - No basis to order destructive testing or a survey to look for manifestation of possible damage where no finding of faulty or unsatisfactory work made and where no evidence led as to utility of or proposed methodology of the survey sought by the applicant

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s3, s 5, s 5(1), s 11, s 11(1)(d), s 36(1), s 38(1), s 38(1)(a), s 38(1)(b)
Rules of the Supreme Court 1971 (WA), Order 21, r 5(2)
State Administrative Tribunal Act 2004 (WA), s 13(1), s 60(2)

Result:

Application dismissed

Category:    B

Representation:

Counsel:

First Applicant	:	Mr K Dundo
Second Applicant	:	Mr K Dundo
Respondent	:	Mr P Monaco

Solicitors:

First Applicant	:	KD Legal (Perth)
Second Applicant	:	KD Legal (Perth)
Respondent	:	GV Lawyers

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

De Kauwe v Cohen [No 3] [2021] WASC 286

Owners of Island Apartments Strata Plan 52597 and Pindan Pty Ltd [2017] WASAT 25

The Owners of 38-40 Onslow Road, Shenton Park & Anor and C&I Constructions Pty Ltd [2014] WASAT 123

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

1. On or about 5 September 2016 Ms Patricia Ferrara and Mr Darryl Ferrara (owners) engaged Webb and Brown-Neaves Pty Ltd (builder) to build them a three storey house on a piece of land they owned in Mandurah.  The land is situated on or next to a canal.

2. Construction of the house commenced some time later and on or about 27 June 2019, the owners observed cracking of the masonry walls in the family room located on the ground floor to the rear of the house.

3. This dispute is about the cause and extent of the cracking and the scope of any further remedial work that might be required.

4. The builder also disputes the Tribunal's jurisdiction to deal with the matter.

Issues

•Whether the complaint referred to the Tribunal in relation to the piling was the same as that formulated by the owners at hearing and if the answer is in the affirmative:

i)whether the builder satisfied the requirements of testing as set out in the note on the Worley Parsons report and if the answer is in the negative, what are the consequences of this failure to test?;

ii)whether the installation of screw piles rather than jet grout piles constituted a design fault;

ii)whether the canal wall has been damaged by the installation of the screw piles; and

iii)if it may have or has been damaged should the canal wall be surveyed every six months to check for potential damage.

•Whether the steel columns are adequate to bear the load(s).

•Whether invasive investigative work should be undertaken by the builder to see if there is further cracking since the remedial works were completed?

Background

1. On noticing the cracking in the masonry walls in the family room located on the ground floor to the rear of the house the owners obtained a report from Engenuity Engineering dated 21 August 2019 (Engenuity Report).

2. On 30 August 2019 a copy of the Engenuity Report was provided to the builder.

3. On or about 20 September 2019 the builder, by its structural engineers, Structerre Consulting (Structerre) engaged Geopractika Pty Ltd a geotechnical engineering firm to consider the Engenuity Report.

4. On 3 December 2019, the owners were informed, through their solicitors of the builder's proposed remedial works to be undertaken to remedy the structural issues raised in the Engenuity Report.

5. On 21 January 2020 the owners sent a Proposed Notice of Complaint (Proposed Complaint) to the builder.

6. On 6 February 2020 the owners made a complaint (Complaint) to the Building Commissioner under s 5 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act).

7. On or about 18 February 2020, pursuant to s 11 of the BSCRA Act the Building Commissioner referred the Complaint to the Tribunal.

8. The Complaint read:

   location - ground floor and first floor of the building.

   description - cracked brickwork on opposite end of the canal facing side of the building signifying major structural defects of the building and concerns with the remedial works being undertaken by the builder and the way the builder seeks to proceed with the building works.

9. There were two other columns completed that set out the evidence relied upon and the remedy sought.

10. On 24 March 2020 the owners lodged with the Tribunal a Statement of Issues Facts and Contentions (SIFC).

11. On 9 April 2020 the builder filed with the Tribunal a SIFC in response to the owners' SIFC.

12. On 21 October 2020 the owners filed with the Tribunal an amended SIFC.

13. A joint conferral of experts was held, and a joint report filed with the Tribunal dated 25 May 2020 (joint report).

14. On or about 25 February 2021 the owners filed a 'Minute of Final Orders by the Applicants' dated 26 February 2021.

15. The matter proceeded to hearing on 10 and 11 March 2021.

Statutory framework

1. The statutory framework of the BSCRA Act is helpfully set out by the builder in its outline of submissions dated 10 March 2020, which is:

2. Section 5(1) of the BSCRA Act relevantly provides that a person may make a complaint to the Building Commissioner about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory.

3. A complaint made under s 5(1) of the BSCRA Act is defined as a building service complaint: s 3 of the BSCRA Act.

4. Where a building service complaint is referred to the Tribunal by the Building Commissioner under s 11(1)(d) of the BSCRA Act, s 38(1) of the BSCRA Act enables the Tribunal to make a building remedy order where it is satisfied the regulated building service has not been carried out in a proper and proficient manner or was faulty or unsatisfactory. The Tribunal may otherwise decline to make a building remedy order under s 38(1)(b) of the BSCRA Act.

5. Under s 36(1) of the BSCRA Act a building remedy order made by the Tribunal may require a person who carried out a regulated building service to do one or more of the following:

   a)remedy the building services specified in the order;

   b)pay to an aggrieved person such costs of remedying the building service the Tribunal considers reasonable as specified in the order; and

   c)pay an aggrieved person a sum of money specified in the order to compensate the aggrieved person for the failure to carry out the building service in a proper and proficient manner or for faulty or unsatisfactory building work.

6. Pursuant to s 13(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) a provision of an enabling Act that enables an application to be made to the Tribunal gives the Tribunal jurisdiction to deal with the matter concerned.

7. The Tribunal may only deal with a matter in respect of a building complaint if the complaint is referred to the Tribunal by the Building Commissioner pursuant to s 11(1)(d) of the BSCRA Act.[1]

Jurisdiction

Builder's submissions

[1] See Owners of Island Apartments Strata Plan 52597 and Pindan Pty Ltd [2017] WASAT 25 (Pindan) at [67].

1. The builder alleges the Tribunal does not have jurisdiction to deal with the Complaint formulated by the owners at hearing on the basis that it is a different complaint to that which was referred to the Tribunal by the Building Commissioner.

2. This is denied by the owners.

3. It is not disputed that the remedy sought in the Proposed Complaint is not the same as the remedy sought by the owners in the Complaint.

4. In the Proposed Complaint, the owners sought, in summary the demolition of the building and return of monies paid by the owners.  The Complaint adds a remedy being 'any other appropriate remedial order that the Building Commissioner deems appropriate'.

5. The builder does not dispute that the Complaint was accepted by the Building Commissioner.

6. The builder however asserts that the Complaint as referred to the Tribunal only included the remedy that was sought in the original Proposed Complaint.

7. The builder makes this assertion on the basis of its contention, that the Building Commissioner identified the issue in the Complaint as the demolition of the building.

8. At hearing the owner did not pursue a remedy of the demolition of the building.

9. It is the builder's position that the scope and magnitude of the changes to the grounds and relief sought at hearing between those contained in the Proposed Complaint are so significant that the Tribunal lacks the jurisdictional foundation upon which to grant the relief sought by the owners.[2]

   [2] Respondent's closing submissions dated 22 July 2021, para 8.

10. The builder says that the Building Commissioner's Investigation Report No. BC2020-177 noted the remedy sought is the demolition of the house and refund of monies and recommended that due to the complexity of the Complaint it be referred to the Tribunal.

11. The builder says further that the Building Commissioner's authorised delegate in his letter of referral to the Tribunal specified that the reason for the referral was because the matter was complex.

12. The builder submits that the complex issue referred to the Tribunal was the demolition of the house.

Consideration

1. The Building Commissioner did not take issue with the Proposed Complaint not being in identical terms as the Complaint and accepted the Complaint.

2. It is for the Building Commissioner to determine what constitutes the complaint it refers to the Tribunal and it is not for the Tribunal to opine as to whether that decision is correct.[3]

   [3] Pindan at [66].

3. The Tribunal does not have jurisdiction to determine whether the Building Commissioner acted without power and outside his jurisdiction in accepting a complaint and referring it to the Tribunal.

4. In circumstances where the Building Commissioner is unable to come to a positive finding as to whether a matter is or is not within its jurisdiction the Building Commissioner is able to refer the question of jurisdiction to the Tribunal.

5. The scheme of the legislation is such that it is not intended that the Building Commissioner is able to determine complex questions of law or disputed facts which require proper forensic testing and these matters are able to be referred to the Tribunal for determination.[4]

   [4] Pindan at [68] and The Owners of 38-40 Onslow Road, Shenton Park & Anor and C&I Constructions Pty Ltd [2014] WASAT 123 at [96].

6. For the reasons that follow we find the Complaint as outlined in the owners amended SIFC and 'Minute Final Orders by the Applicants' dated 26 February 2021 is the same as the Complaint referred to the Tribunal and we have jurisdiction to determine that Complaint and those items of Complaint.

7. The Building Commissioner did not inform the owners it had dismissed any part of their Complaint or that it was going to refer only part of their Complaint to the Tribunal.  Their Complaint included seeking 'any other appropriate remedial order the Building Commissioner deems appropriate'.

8. The short letter of referral to the Tribunal was a standard type letter and said it was referring the 'Complaint' to the Tribunal because it was complex.

9. The description of the Complaint and the area the subject of the Complaint appearing in the Complaint that was accepted by the Building Commissioner namely:

   The cracking of brickwork on the ground floor and first floor of the building;

   major structural defects in the building; and

   concerns with the remedial works undertaken by the builder.

   was the same as that covered in the owners' SIFC and 'Minute of Final Orders by the Applicants' dated 26 February 2021.

10. The remedy sought in any complaint may change from time to time as further investigation continues or in some instances following an expert referral.  It is not logical that the legislature intended that every time a better or different remedy was recommended the owner would not be able to accept it without having to make a new complaint.

11. The owners filed a SIFC and the builder responded to it.  The issues set out below remained the same until the hearing:

    a)potential but unknown damage to the 'canal or sea wall' following the remedial works;

    b)concerns in respect of the steel columns not providing adequate loading following the remedial works;

    c)concerns in respect of the retro installed 'jet grout piles' and the damage they may have done to the canal or sea wall;

    d)on going cracking that can be seen; and

    e)potential but unknown cracking to masonry walls of the ground floor family room following remedial works.

12. For the first time in the 'Minute of Final Orders by the Applicants' dated 26 February 2021 the owners no longer sought the remedy of the house being demolished.  Up until that time the owners had sought the demolition of the house as a remedy.[5]

    [5] See the owners' SIFC dated 24 March 2020.  The owners' application was lodged on 19 February 2020.

13. The remedial work sought by the owners in their closing submissions dated 11 June 2021 was different to that sought by the owners in the Complaint and in the final orders dated 26 February 2021.

14. The Complaint specially called for an alternative remedy namely 'any other appropriate remedial order that the Building Commissioner deems appropriate'.

15. We do not accept that any significance can be attributed to the investigator not including in his report to the Tribunal that the owners also sought this alternative remedy.

16. We do not accept that the cause and extent of the cracking could not be regarded as complex.  We are not satisfied that it was only because the owners were seeking, as one of their proposed remedies to have the house demolished, that potentially made it complex.

17. We find it is more likely than not that the nature of the evidence regarding the cause of the cracking in the masonry and the alleged potential damage to the canal wall caused the Building Commissioner and its officers to regard the matter as complex.

18. Later in these reasons we set out why we do not consider we have jurisdiction to determine an issue in relation to the screw piles which were not part of the remedial works carried out by the builder or referred to in the SIFC or in the Engenuity Report referred to in the Complaint.

Facts

1. The construction of the house is a concrete slab on ground, a mix of cavity filled and mass brick retaining walls, masonry walls and concrete suspended slabs to the first and second floors.  The roof is of a timber framed roof construction with tiles as the roof covering.

2. The cracking observed by the owners was to the masonry piers on the ground floor and first floor levels to the rear (north) of the house.  The masonry piers are supported by concrete footings directly on ground with additional support from screw piles at locations nominated on the structural documentation.

3. The screw piles are embedded in the ground at the rear of the canal wall.

4. The Engenuity Report (Exhibit 1, page 58), addressed the structural elements related to the cracking of the masonry and was based on a visual inspection only.

5. The Engenuity Report considered the cracking patterns noted on the masonry piers appeared to indicate possible issues with differential settlement and/or issues of excessive loads being transferred from the beam supporting the suspended slabs over.

6. Following a review of the structural documentation the author concluded the masonry piers and supporting footings were found to be supporting loads in excess of the design capacities.

7. On 30 August 2019, a copy of the Engenuity Report was provided to the builder.

8. The builder undertook further investigation and accepted that remedial works were necessary in respect of structural issues.

9. Structerre, the builder's structural engineer provided a report to the builder which included proposed remedial works to be undertaken to remedy the structural issues.

10. On 3 December 2019, the owners were informed of the builder's proposed remedial works.

11. The owners were not satisfied with the proposed remedial works and filed a complaint with the Building Commissioner.

12. The Building Commissioner referred the matter to the Tribunal on or about 16 February 2020 by which time the remedial works were under way or had been completed.

13. An expert conferral was held at the Tribunal on 28 April 2020 and 7 May 2020 and the joint report signed and filed with the Tribunal (Exhibit 1, page 321).

14. The experts:

    •Mr Alan Byrne (owners' civil engineer);

    •Mr Fred Davenport (owners' geotechnical engineer);

    •Mr Gervase Purich of Structerre (builder's civil engineer);

    •Mr Shane Just of Structerre (builder's civil engineer); and

    •Mr Eric Hudson-Smith (builder's geotechnical engineer),

    identified four areas of concern in relation to the cracking and structural integrity of the house raised by the owners with respect to the claim of faulty or unsatisfactory workmanship with respect to builder's remedial works.

15. It is not contested and we find that the remedial works undertaken by the builder included:

    •installation of grout piles[6] in two locations, beneath the brick piers either side of the family room on the ground floor;

    •installation of two new steel columns in the brick piers either side of the family room on the ground floor;

    •replacement of brickwork that had cracked below the concrete beam on the ground floor; and

    •repair of cracked brickwork using brick stitching techniques.

    [6] Jet Grouting is a technique of mixing in-situ soil with the energy of high-pressure jet of slurry.  A small­diameter rod drills down into the ground for the depth specified by the pile design.  Then the rod, while being withdrawn, jets the cement-base slurry and air to produce an improved column/grouted pile.

16. The owners in their 'Minute of Final Orders by the Applicants' dated 26 February 2021 only sought remedial works to be carried out in respect of the four issues identified by the experts.  Thus, the Tribunal will confine its deliberations to these four issues and will identify them as set out in the joint report.

Evidence

Issue 1 - Existing Sea (Canal) Wall - Geotechnical

Soil testing

1. At hearing, it was put to Mr Hudson­Smith by the owners' counsel that because of the note on the canal wall drawing (Exhibit 1, page 353), the builder should have carried out testing of the soil properties during construction.  He confirmed his view that what had been done was sufficient to satisfy the requirements of the 'note'.

2. It was implied by the owners that this testing, if not done originally then should have been done during the remedial works and prior to the installation of the jet grout piles.

3. The owners did not specify if this alleged failure to test resulted in an adverse consequence in the installation of the jet grout piles. The failure to test was not an issue raised for consideration by the experts at their conferral nor was it raised in the owners' SIFC.[7]

   [7] The SIFC (Issue 2) was specifically amended to remove the word 'soil' before the word 'testing' and replaced with the word 'load'.

4. Mr Hudson-Smith provided an explanation of what occurred during the installation of the piles, what he had observed and the notes he took (ts 66-68, 10 March 2021).

5. On hearing the evidence of all inquires and assessments Mr Hudson­Smith had carried out or caused to be carried out Mr Davenport said:

   '… I think what he has done - certainly done adequate work at construction to meet that note.'

1. Mr Davenport accepted that the builder had satisfied the requirements of testing as set out in the note on the Worley Parsons report (ts 68-69, 10 March 2021).

Consideration

Soil testing

1. The owners press the issue of soil testing and submit that the builder should have conducted soil testing despite the evidence of their expert agreeing that the builder had done all that was necessary to comply with the note on the Worley Parsons report.

2. The owners did not articulate at hearing what they considered were the consequences of the alleged failure to test.

3. We find that the action(s) taken by the builder to comply with the notation on the Worley Parson report was reasonable and in accordance with industry practice.

Issue 2 - Piling

Issue 2.1 - screw piles and 2.2 - jet grout piles

1. Mr Hudson-Smith's evidence was:

2. Acrow Props[8] were installed to temporarily support the partly-built house after a design error had been identified with the loads on two footings.  These footings were located beneath the brick piers either side of the family room on the ground floor.

   [8] An Acrow Prop is a telescopic tubular steel prop, used as a temporary support.  Acrow Props are adjustable for height by a large diameter screw thread, formed on the outside of the tube itself. A loose pin through a series of holes in the inner tube gives a wider range of coarse adjustment.  Use of a screw thread also allows the props to be tightened when already in place, to adjust the load that each one bears.

3. On finding that there was insufficient support for these footings, jet grout piles were designed to add further support to those footings which would then allow the Acrow Props to be removed.

4. Mr Hudson-Smith was not involved in a structural analysis as to whether the original support for the footings was adequate.  He was aware that the existing screw piles beneath the brick piers were under designed and needed further support which was the purpose of the remedial works he supervised.  The remedial works required the installation of jet grout piles.

5. The propping allowed the removal of the walls where the jet grout piles were to be installed and enabled the installation of the new columns and brickwork to be rebuilt in that location.

6. The joint report shows several propositions advanced by Mr Hudson­Smith about the effect (or lack thereof) of the jet grout piles on the canal wall, none of which Mr Davenport disagreed with.  Mr Davenport's concern or point of difference with Mr Hudson-Smith was that he had not seen evidence to support some of Mr Hudson­Smith's conclusions.

7. The issue identified by the owners was the structural integrity of the canal wall.  Their concern was the effect the installation of the jet grout piles would have on the canal wall.[9]

   [9] SIFC, Issue 5.

8. Originally the owners alleged they could not be certain of the depth of the installation of the jet grout piles and raised concerns if they were sufficient to support the footings.

9. We note the owners no longer seek orders or findings in respect of the installation of the jet grout piles.

10. During his evidence Mr Davenport raised the issue about the effect the installation of screw piles closest to the canal wall could have on the canal wall (ts 77, 10 March 2021).

11. Mr Hudson-Smith's, explanation of how jet grout piles and screw piles are installed was of great assistance to us.

12. Mr Hudson-Smith confirmed, and Mr Davenport did not contest, that testing of the jet grout piles as set out in the owners' 'Minute Final Order by the Applicants dated 26 February 2021' would not tell you anything about the condition of the canal wall (ts 77, 10 March 2021).

13. Mr Davenport discussed what could happen when installing screw piles in or through the Tensar[10] or geogrid.  Both experts agreed that the installation of the jet grout piles, and the screw piles would cut holes or tear locally the geogrid (ts 100, 10 March 2021).  They also both agreed that there was a possibility that the cutting and tearing of the Tensar or geogrid caused by the installation of the screw piles could cause the canal wall to deflect (ts 101, 10 March 2021).

    [10] A fabric used in the construction of a geogrid.  A geogrid is a flexible mesh that is used to create a reinforced coherent mass behind the retaining wall by stabilising the soil.

14. Mr Hudson-Smith opined that it was a low, very low possibility that the screw piles could have had had an impact on the canal wall (ts 117, 10 March 2021).

15. Mr Davenport did not disagree with this assessment having previously described it himself as having a low probability that the installation of the screw piles had had a detrimental effect on the canal wall (ts 111, 10 March 2021).

16. Mr Just confirmed that Structerre had provided certification that the jet grout piles and the screw piles would not transfer a surcharge loading[11] onto the canal wall (ts 131, Exhibit 1, 10 March 2021).

    [11] This is an additional load transferred from the footings of the home onto the canal wall which may cause the canal wall to move.

17. Mr Just also confirmed that Structerre had certified that the screw piling and jet grout piling would not load the wall or have a detrimental effect on the canal wall (ts 102, 10 March 2021).

18. Both Mr Hudson-Smith and Mr Davenport's evidence was that any problems with the canal wall would manifest itself by movement in the canal wall which would result in the cracking of the wall or a sink hole occurring beneath the paving directly behind the canal wall (ts: 104­107, 10 March 2021).[12]

    [12] The witnesses referred to paving, but it is actually exposed aggregate.

19. Both experts agreed the only definite way of knowing if the wall had been detrimentally affected was by observation of the levels of paving immediately behind the canal wall (ts 112, 10 March 2021).

20. Further the experts opined that if the use of screw piles rather than jet grout piles had had a detrimental effect on the canal wall it would manifest itself in about two to three years (ts 114, 10 March 2021).

21. Later Mr Davenport confirmed that any manifestation of damage to the canal wall was likely to occur in the first 12 months (ts 145, 10 March 2021).

22. By September 2020 the exposed aggregate (referred to by the experts as paving) had been installed.

23. Both experts opined the cracks shown in the path (the area of concern) were shrinkage cracks and were not the result of ground movement, for example a sink hole forming beneath the pavement (ts 116, 10 March 2021).

24. Mr Ferrara gave evidence that the large sliding doors were 'jamming'.  He said the doors were difficult to close but did not suggest they were 'jamming' in the sense they would not close at a certain point as opposed to being difficult to close.

25. Mr Just was asked about the jamming of the sliding doors as reported by the owners.  His evidence was that he did not know the sliding doors were difficult to close but there could be many reasons for this.

Consideration

Issue 2.2 - jet grout piles

1. Originally the owners alleged they could not be certain of the depth of the installation of the jet grout piles and raised concerns if they were sufficient to support the footings.

2. We note the owners no longer seek orders or findings in respect of the installation of the jet grout piles.

3. At hearing the owners' geotechnical engineer, Mr Davenport confirmed that the testing of the jet grout piles as sought in the owners' 'Minute Final Order by the Applicants' dated 26 February 2021 would not tell you anything about the condition of the canal wall (ts 77, 10 March 2021).

4. When asked by counsel for the owners:

   DUNDO, MR:                   And is there anything that can be done now to forewarn if a problem exists?  For instance, in having the wall being somehow surveyed or some process to ensure that there hasn't been already an impact which is going to continue to possibly get worse until the wall disappears, which would be a problem for the house.

   HUDSON-SMITH, MR:     It won't be catastrophic as such.  So in other words it will - you will see - you will start to see signs and I would (indistinct) you would also have - there's a (indistinct) over the top of the surface level and once you have a lack of support, over that over time that will start to show deflection and/or cracking. (ts 83, 10 March 2021)

5. We infer from this exchange that neither expert considered a survey of the canal wall was necessary to protect potential damage to the house.

6. The owners do not allege there is any current manifestation of any damage to the canal wall.

7. No expert suggested that the cracking to the paving or exposed aggregate was a manifestation of a problem with the canal wall.  Both geotechnical experts agreed the cracks were in all probability settlement or shrinkage cracks not subsidence cracking (ts: 116, 10 March 2021).

8. The jet grout piles, and the concerns raised as to verification of their depth et cetera was answered by Mr Hudson-Smith when he described his supervision of their installation.

9. No evidence was given by either the engineering experts or the geotechnical experts that they had inspected the sliding doors.  On hearing of the issue of the sliding doors it did not cause them to reconsider whether the installation of the jet grout piles provided appropriate support to the columns.

10. There is no longer an allegation that the jet grout piles with the screw piles provide insufficient support to the footings.  The owners no longer seek orders or findings in respect of the installation of the jet grout piles.

Consideration

Issue 2.1 - screw piles

1. The issue as outlined in the owners' SIFC regarding the canal wall was with reference only to the 'loads' on the canal wall.  All issues identified by the owners in the SIFC relate to the situation following the remedial works.

2. The SIFC did not raise concerns or identify any issues affecting the canal wall prior to the remedial works.  The SIFC does not identify the installation of the screw piles or the construction of the building prior to the remedial works as having a negative effect on the canal wall (Exhibit 1, page 1).

3. The experts at the joint expert conferral did not consider the desirability of the original use of screw piles as opposed to the use of jet grout piles.  They did however agree that the jet grout piles had superseded the screw piles.

4. They did not identify the use of screw piles as opposed to jet grout piles as an issue.

5. During the hearing counsel for the owners sought in cross­examination of Mr Just to raise the issue that the use of screw piles rather than jet grout piles was a design fault (ts 140, 10 March 2021).

6. Counsel for the builder objected to the raising of this issue on the basis that there was no allegation of a design fault in using the screw piles and it had not prepared its case on that basis (ts 142, 10 March 2020).

7. The first occasion the owners raised as an issue that screw piles had been installed when jet grout piles should have been used was in their closing submissions.

8. We note that the SIFC was amended on 21 October 2020 to change Issue 5 as follows:

   Confirmation that the structural integrity of the canal wall has not been compromised as a result of the installation of the jet grout piles. loads applied prior to the proposed rectification works.

9. It is clear the owners determined not to allege the structural integrity of the canal wall had been compromised by the loads applied by the screw piles prior to the remedial works.  Rather they made it clear to the builder and the Tribunal that their allegation/concern was with respect to the remedial works, namely, the installation of the jet grout piles and the affect it had on the structural integrity of the canal wall.

10. In courts parties are bound by their pleadings and as such to introduce evidence or raise a matter in cross-examination it is required to be an issue pleaded.  Accordingly, if a party wishes to raise an issue in cross­examination not set out in the pleadings an application to amend the pleadings needs to be made.[13]  Pleadings can be amended at any time in the proceedings.[14] 

    [13] De Kauwe v Cohen [No 3] [2021] WASC 286.

    [14] Order 21, r 5(2) of the Rules of the Supreme Court1971 (WA) (RSC).

11. Similarly, to pleadings in courts are the Tribunal's Statement of Issues Facts and Contentions (SIFC).

12. No application was made by the owners during the proceedings to amend their SIFC.  Not being bound by pleadings meant the owners were not required to amend their SIFC to raise an issue in cross­examination not contained in their SIFC.

13. The Tribunal is not bound by pleadings but is required, as courts are, to ensure procedural fairness and natural justice is afforded to the parties.

14. No notice prior to the hearing was given to the builder that the owners alleged or would allege that the original installation of the screw piles rather than jet grout piles constituted faulty or unsatisfactory work.

15. None of this is surprising given the Complaint as referred to the Tribunal was in relation to the remedial works.

16. The Complaint referred to the Tribunal is set out below:

    Location

    Ground floor and first floor of the building.

    Description of Issue

    Cracked brickwork on opposite ends of the canal facing side of the building signifying major structural defects of the building and concerns with the remedial works being undertaken by the Builder and the way the Builder seeks to proceed with the building works. (Tribunal emphasis)

17. Even the most liberal interpretation of the Complaint cannot include the allegation that the use of screw piles in the original construction of the building constituted faulty or unsatisfactory work.

18. Earlier in this decision we discussed the issue of jurisdiction. The Tribunal only has jurisdiction to deal with a matter that is conferred upon it by an enabling Act which in this instance is the BSCRA Act. Unless a complaint is referred to the Tribunal by the Building Commissioner it has no jurisdiction to deal with it.

19. A complaint with respect to a design fault is not before the Tribunal and we are therefore not able to consider it.

20. For the sake of completeness, if it could be construed that the original Complaint could include an allegation of a design fault, we would not have allowed such a late introduction of a significant allegation.

21. The builder had no notice of the allegation and no opportunity to address the issue and raised its objection to its introduction at the hearing.

22. The purpose of the SIFC and pleadings more generally is to enable a party to know the case they have to meet.  In this instance the allegation of a design fault with the screw piles was never made prior to it being raised in cross-examination and in the final submissions.

23. While we accept (as we must) that we are not bound by the case as stated in the SIFC's, we are bound by the rules of natural justice and procedural fairness.  We do not consider it would be in the interest of justice to allow such a late, in effect amendment to the SIFC.

24. Indeed, whilst touched upon by Mr Davenport in the expert conferral (Exhibit 1, page 321), no report from him on the use of screw piles as opposed to the use of jet grout piles was provided to us.

25. None of the experts in their conferral noted the use of screw piles as an issue.

26. They opined that the use of jet grout piles would have presented less potential risk to the canal wall than screw piles.

27. Again, in the interest of completeness if it was a complaint, and the owners were permitted to raise it as an issue, we are not satisfied that jet grout piles should have been used instead of screw piles for the following reasons.

28. A comment was made in the course of the experts' joint evidence by Mr Davenport and Mr Hudson-Smith that they would have used jet grout piles close to the canal wall because it would have presented less potential risk to the canal wall than screw piles. 

29. Both geotechnical experts considered the installation of any piles close to the canal wall could possibly cause damage to the canal wall.  They said there is risk in everything, and it is a question of assessing the risks and the risk in using the screw piles was low.

30. All experts agreed with the proposition put by the builder's counsel, that there was no evidence that the screw piles, the jet grout piles or the construction of the house had had any detrimental effect on the canal wall (ts 143-144, 10 March 2021).

31. The was no evidence if the house could be built in the position it is in without the use of either screw piles or jet grout piles.

32. The experts did not opine on what the difference in risk was between using the screw piles and the jet grout piles other than it was less of a risk.  The experts said the installation of both types of piles entail risk and it was a question of weighing up those risks.

33. We are not told if a cost risk analysis was undertaken by the builder.  We do not know what other considerations the builder considered in determining why screw piles were suitable.  We know none of this, possibly because it was not a complaint made by the owners.

34. The experts were not asked if damage from the installation of the screw piles or the jet grout piles could be detected as opposed to possible damage that may have been caused from works on neighbouring properties, including the one owned by these owners .[15]

    [15] The Tribunal was shown photographs of other properties in the same position on the waterfront as this house.  Indeed, the neighbouring property, also owned by the owners, is so close that the path that was laid for the house went across both properties.

35. There was no evidence submitted as to the condition of the canal wall before the screw piles or jet grout piles were installed.

36. Neither of the experts considered or suggested any type of survey of the canal wall, as sought by the owners, would be able to identify if any damage had been caused to the canal wall by either the screw piles or the jet grout piles.

37. Notably, and somewhat surprisingly, given it was part of the remedy sought, counsel for the owners did not raise explicitly the possibility of a survey of the canal wall with the experts.  They were not asked for example, if they thought it would be any utility in a survey or if there was, when it would be possible to observe any change in the wall by looking at the wall itself.

38. Indeed, the experts' evidence was to the contrary.  They agreed that that any problems with the canal wall would manifest itself by cracking or a sink hole occurring where the 'paving'[16] was located outside the house (ts 104­107, 10 March 2021).

    [16] The witnesses referred to paving, but it is actually exposed aggregate.

39. No information of any type was provided to us about what a survey would entail, who could conduct it, when it should be conducted or what it would be able to detect.

40. No evidence was submitted as to why a survey of the canal wall should be undertaken on a six monthly basis rather than an annual or some other timeframe.

41. In summary the Tribunal has no evidence as to what a survey entails and whether or how soon it would be able to detect if any damage had been caused by the screw piles installed by the builder in respect of this house.

42. There is no evidence the canal wall has been damaged by the installation of the screw plies or the jet grout piles in respect of this house.  The experts have opined that it is possible that holes made in the mesh could potentially cause damage to the canal wall, but the probability is low, very low.

43. Either screw piles or jet grout piles needed to be installed to enable the house to be built (we assume).  Therefore, some degree of damage would be caused to the tensar or geogrid either by screw piles or jet grout piles.  Piles that were necessary for the construction of this house could not be installed without drilling through the geogrid.  Damage per se to the geogrid cannot make the action of the builder in installing the screw piles faulty or unsatisfactory.

44. There is no evidence that the screw piles or jet grout piles caused any damage to the tensar or geogrid and thus to the canal wall that was more than or greater than that necessary to build the house.

1. Put simply there is no evidence before us that the use of the screw piles or the jet grout piles meant the regulated building service carried out by the builder was not carried out in a proper or proficient manner or was faulty or unsatisfactory.

2. Indeed, it is difficult to see how the building work could be faulty or unsatisfactory absent evidence that the canal wall[17] or the house has been adversely affected.

   [17] We note the builder did not submit that it should not be responsible for any damage to the canal wall unless it had a consequential damage on the house.

3. We are not satisfied that any damage to the canal wall (as opposed to the geogrid) has occurred.

4. We are not satisfied with respect to Complaint Issue 1 - existing sea (canal) wall and Complaint Issue 2 - piling 2.1 - screw piles and 2.2  - jet grout piles that the building service carried out by the builder was not carried out in a proper or proficient manner or was faulty or unsatisfactory and decline to make a building remedy order.

Issue 3 - steel column design

Mr Just

1. The owners in their closing submissions submit that we cannot rely upon the evidence of Mr Just as he is not an impartial witness as:

   [H]is firm Structerre Consulting were the engineers who prepared the drawings and specifications that formed part of the building contract; and because of submissions made by counsel for the builder during the hearing.

2. Implicit in the submission is that Mr Just was trying to support his position that his design of the steel columns was satisfactory because Structerre may have some liability if we found the columns required further remedial work.

3. We note that we had cause to remind Mr Byrne during the hearing that he had signed an acknowledgment of his obligations as an expert witness before the Tribunal.  No such reminder was given to Mr Just.

4. We accept that Mr Just, when he gave his evidence did have a professional interest in the outcome of the proceedings.  However, for the reasons set out below we find Mr Just a credible and reliable expert witness and that we can rely upon his expert evidence.

5. Mr Just was prepared to concede that Mr Byrne's calculations regarding the column, on the left-hand side of the building looking at the canal, were correct and that on those calculations, the column was undersized. His discussion with Mr Byrne and the Tribunal regarding those calculations and the differing factors that might affect the outcome(s) was forthright and open (ts 165-188, 11 March 2021).

6. We did not gain the impressions that Mr Just was trying to justify his position in the face of conflicting evidence or without entering a genuine discussion with Mr Byrne as to whether the column(s) were suitable to carry the loads required.

The steel columns

1. There are two steel columns in dispute.  One is located on the left-hand side of the house the other is located to the centre of the house.  I will refer to the column on the left-hand side of the house as Column 1 (Exhibit 1, page 489), and the column related to the centre of the house as Column 2 (Exhibit 1, page 488).  They are both located on the ground floor and support the concrete beam and slab of the first floor.

2. Column 1 and Column 2 have different load conditions (this is not in dispute).  Column 1 is located near the edge of the slab and as such does not have the benefit of a concrete slab draping over the top of it.  Column 2 supports the end of the concrete beam but then the concrete slab, to the first floor, continues and drapes over it.

Column 1

1. Following the reporting of the cracking the builder consulted with Mr Just.  Mr Just accepted that remedial works would need to be undertaken and a further two steel columns should be installed.  He undertook hand calculations and based on those calculations specified the size of the steel columns to be installed to remedy the problem with the cracking.  These additional or modified columns were part of the remedial works carried out by the builder.  This is not disputed by the owners.

2. The owners engaged Mr Byrne to verify if the modified columns, as proposed by Mr Just were adequate.  Mr Byrne checked the hand calculations completed by Mr Just.  Mr Byrne concluded that both columns were inadequate.  He considered them inadequate because clause 4.3.4 of the steel code AS 4100 says that for Simple construction (it is accepted that it is a Simple construction) the vertical load on a column has to be applied to the face of the column not to the centre of it.  This produces a moment, or a bend or twist, that needs to be accounted for in the design.

3. Mr Just agreed that on the calculations as undertaken by Mr Byrne, taking into account an induced bending moment, as Mr Byrne did, both columns would be inadequate (ts 188, 11 March 2021).

4. Mr Just, however, then supervised structural engineers in his office in performance of more detailed calculations.  The first-floor concrete slab, and the load transferal into the steel columns was assessed using computer modelling. The first-floor concrete slab was modelled using Inducta SLB Reinforced Concrete Slab Design Software (Inducta SLB Software) (Exhibit 4).

5. Mr Just said the computer modelling enabled a calculation to be made of how the loads transferred into the column.  The modelling was on the basis that the column was fixed at each end.  This means it was considered to be completely attached to the concrete.  This allowed the computer modelling to determine if the vertical loads were in the centre of the column or to the face of the column.  If the loads were determined to be located near the centre of the column, then the induced moment that Mr Byrne had calculated would be significantly reduced (ts 169-172, 11 March 2021).

6. The computer modelling found the load was close to the centre of the column and the moment was very low being 1.4 kilonewtons.  On this basis Mr Just found the column to be suitable (ts 204-205, 11 March 2021)

7. Mr Byrne agreed that if the computer modelling carried out by Mr Just had considered all the required factors then Column 1 was suitable (ts 207, 11 March 2021).

8. Mr Byrne did not accept the computer modelling was correct because he had not checked the model.  He considered that the brickwork might be in tension and as such the model would provide skewed results (ts 173, 11 March 2021).

9. Mr Bryne did not say the modelling was incorrect or that he disputed the results but rather he could not say if it was correct because he had not checked the model (ts 208, 11 March 2021).

10. Mr Byrne accepted that if the modelling was correct then Column 1 is sound, and no further remedial work is required.

11. Mr Bryne had notice of the modelling undertaken by Mr Just.  He said Engenuity had access to the same software used for the modelling by Mr Just but was not requested by the owners to make the same calculations and he had not done so.

12. Both Mr Byrne and Mr Just agree that there is no evidence that the Column 1 has failed (ts 207, 11 March 2021).

13. Mr Byrne agreed with the proposition put to him that as Column 1 was clad in mortar and gyprock you would not be able to see if the brickwork was failing.  When pressed, Mr Byrne agreed that you would however expect to see some evidence in the house if Column 1 had or was failing (ts 196-197, 11 March 2021).

14. Mr Just did not carry out the modelling himself, he said that another engineer at Structerre, Mr Geoffrey Kong who had particular expertise in modelling, carried it out.

15. Mr Kong was called by the Tribunal and gave evidence by telephone. Mr Kong confirmed he had inputted to the program (ts: 263­264, 11 March 2021).

    a)the layout of the walls and concrete slabs;

    b)had not taken into account the masonry piers that were encased in brickwork;

    c)he had modelled the building in a way that he would normally model a structure of this type;

    d)the result would be different if he had not modelled the column as fixed; and

    e)the induced bending moment in the column was 1.4 kilonewtons.

    (ts 266-269, 11 March 2021).

Column 2 - as described in Exhibit 1, page 488

1. Mr Just's view is that the load on Column 2 is vertical.  His calculations as to the strength or suitability of Column 2 are based on his view that there is a beam that is attached or intertwined into the slab.  He views the beam and the slab as an integrated whole making it continuous around the balcony and therefore transferring a concentric load into column 2.

2. Structerre also remodelled this column using the Inducta SLB Software and the results showed the column had the required capacity (Exhibit 4).

3. Mr Byrne did not agree with Mr Just's assumption that the slab is a continuous member.

4. Mr Byrne said AS 4.3.4 applies because it is a Simple construction. AS 4.3.4 requires:[18]

   Bending members may be assumed to have their ends connected for shear only and to be free to rotate.  In triangulated structures, axial forces may be determined by assuming that all members are pin connected.

   A beam reaction or a similar load on a column shall be taken as acting at a minimum distance of 100 mm from the face of the column towards the span or at the centre of bearing, whichever gives the greater eccentricity, except that for a column cap, the load shall be taken as acting at the face of the column, or edge of packing if used, towards the span.

   For a continuous column, the design bending moment (M*) due to eccentricity of loading at any one floor or horizontal frame level shall be taken as -

   (a)ineffective at the floor or frame levels above and below that floor; and

   (b)divided between the column lengths above and below that floor or frame level in proportion to the values of I/l of the column lengths.

   [18] Exhibit 11.

5. Mr Byrne considered that because the beam stops the load will be eccentric and Column 2 needs to be designed in accordance with AS 4.3.4. that is, you must design the load as if the load is on the face of Column 2.

6. Both experts agreed that if the load is concentric Column 2 is acceptable and that if the load is eccentric it is under designed (ts 224­227, 11 March 2021).

7. Both experts also agreed that it is a matter of professional judgment as to whether the slab can be regarded as continuous and the load is concentric (ts 216-217, 11 March 2021).

Consideration

Column 1

1. For the following reasons we prefer the evidence of Mr Just and conclude that the column is sound and structurally adequate.

2. The builder's expert Mr Just caused a more detailed analysis of Column 1 than the owners' expert Mr Byrne by using a computer model.

3. The computer modelling showed the remediated column had structural capacity or was sound.  Mr Byrne, was aware of the results of Mr Just's or Structerre's modelling, had the same computer modelling available to him but had not carried out any modelling.

4. The owners did not challenge the experience or qualifications of Mr Kong, who carried out the modelling.  Mr Byrne was not able to say the modelling was wrong only that he had not checked it and therefore he could not say if it was correct or if he agreed with it.

5. From the evidence given by both Mr Just and Mr Kong we are satisfied  the modelling was carried out correctly.

6. There is no evidence Column 1 has failed.  The experts agreed although you might not be able to see cracking in the brickwork of Column 1 indicating it was failing, if it was failing you would expect to see evidence somewhere in the house that Column 1 was failing (ts 197, 11 March 2021).

Column 2

1. For the following reasons we prefer the evidence of Mr Just and conclude that Column 2 is sound and structurally adequate.

2. Mr Just's opinion is that the load on Column 2 is vertical.  Column 2 is central to the slab and therefore the slab drapes over the column.

3. Mr Byrne believes that the load needs to be applied to the face of Column 2 because AS 4.3.4 requires it must be done for Simple construction.

4. Mr Just has assessed the beam and the slab as an integrated whole that is continuous around the balcony and the load is concentric.  Mr Byrne is of the opinion that because the beam stops (even though it is joined or integrated into the slab) there is an eccentric load on the column and that needs to be designed for.

5. Both experts agree that the individual engineers can assess a building as they see fit and there is a difference of professional opinion in this case (ts 216-217, 11 March 2021).

6. Mr Byrne accepts that Mr Just's view of the beam and slab as a continuous whole is a valid view and that he simply holds a different opinion.

7. Mr Byrne considers that AS4.3.4 must be applied even though he accepts that an engineer can use his or her professional judgment and knowledge to determine if a structure is sound.  Mr Byrne further accepts that AS 4.3.4 is only a guide.

8. We find Mr Bryne's view that an engineer can use his or her professional judgment and knowledge to determine if a structure is sound and that AS 4.3.4 is a guide, difficult to reconcile with his insistence that AS 4.3.4 must be applied (ts 225, 11 March 2021).

9. Mr Just caused a more detailed analysis of Column 2 than Mr Byrne by using computer modelling.

10. We accept Mr Just's assessment of the beam and slab as a continuous whole.

11. The computer modelling showed remediated Column 2 had structural capacity or was sound.  Mr Byrne was aware of the results of Mr Just's or Structerre's modelling, had the same computer modelling available to him, but had not carried out any modelling.

12. There is no evidence Column 2 has failed.  The experts agreed that although you might not be able to see cracking in the brickwork of Column 2 indicating it was failing, if it was failing, you would expect to see evidence somewhere in the house that Column 2 was failing (ts 197, 11 March 2021).

13. We are not satisfied with respect to Complaint Issue 3 - steel column design, that the building service carried out by the builder (the remedial works) was not carried out in a proper or proficient manner or was faulty or unsatisfactory and decline to make a building remedy order.

Issue 4 - cracking to masonry

1. It is not in issue that cracking developed in a brick pier below a concrete beam.  Remedial works were carried out to the brickwork by removing it and replacing it.

2. Cracking had developed in a brick pier on the first floor above the beam and Mr Just had instructed it be remediated using the Heliflex system.  He confirmed the remedial works had been completed.  He also confirmed he had inspected the house and had seen no cracking after the remedial works had been carried out.

3. Mr Byrne said he could not comment as he had not inspected the brickwork after it was remediated and before the gyprock and or plaster was applied.  When he inspected the house sometime after the remedial works and the expert conferral had occurred, he found no evidence of cracking.

4. During evidence at hearing no expert was able to say there was any cracking that indicated the remedial works carried out had not been successful:

   MONACO, MR:        And was there any aspect of the site (at the time of his inspection) that you observed from a professional engineering point of view that gave indicators that there was something adverse happening to that building?

   BYRNE, MR:            No.

   (ts 257, 11 March 2021)

5. In the owners' closing submissions it was not suggested there is any evidence that there is any cracking of any concern.

6. It is the owners' position that there might be cracking so the gyprock and or plaster should be removed, and inspection carried out to find out if there is any cracking.

Consideration

1. Put simply, there is no evidence that there is any problem with the brickwork in any area of the house.  The owners do not now suggest there is.

2. The Tribunal may make a building remedy order:

   [I]f the Tribunal is satisfied that the regulated building service that is the subject of the building service complaint has not been carried out in a proper and proficient manner or is faulty or unsatisfactory, deal with the building service complaint by making a building remedy order; or otherwise, decline to make the building remedy order.[19]

   [19] Section 38(1)(a), BSCRA Act.

3. What the owners are seeking is for us to order destructive testing in case there might be a problem without leading any evidence that there is currently a problem.

4. There is no basis for the Tribunal to make such an order without being satisfied that the building service carried out by the builder has not been carried out in a proper and proficient manner or was faulty or unsatisfactory.  Initially the building service was faulty, and the builder accepted that and carried out remedial works.

5. There is currently no evidence after the builder completed the building work at the house that could lead us to find the building service (the remedial works) has not been carried out in a proper and proficient manner or was faulty or unsatisfactory.

6. We are not satisfied that the building service carried out by the builder in respect of Issue 4 - cracking masonry has not been carried out in a proper and proficient manner or was faulty or unsatisfactory and decline to make a building remedy order.

Orders

The Tribunal orders:

1.The application is dismissed.

2.Should the respondent proceed with a claim for costs, by 17 January 2022 it shall file with the Tribunal and give to the applicants written submissions and supporting documentation in support of its claim addressing:

(a)the hourly rate charged;

(b)details of time charged (for example, preparing witness statements, conferring with experts etc);

(c)the basis of an allowance for an instructing solicitor as well as counsel; and

(d)details of any disbursements claimed, including invoices.

3.The applicants have 28 days from the date the respondent files its submissions on costs to file with the Tribunal and give to the respondent, any written submissions, and any supporting documentation in reply.

4.Subject to any further order of the Tribunal, the application for costs will be determined entirely on the documents pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA).

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

MS P LE MIERE, MEMBER

8 DECEMBER 2021

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)

CITATION: FERRARA and WEBB & BROWN-NEAVES PTY LTD [2021] WASAT 155 (S)

MEMBER:   MS P LE MIERE, SENIOR MEMBER

MR W GREGORY, SESSIONAL MEMBER

HEARD:   16 JANUARY 2023

DELIVERED          :   23 MAY 2023

PUBLISHED           :   23 MAY 2023

FILE NO/S:   CC 276 of 2020

BETWEEN:   PATRICIA FERRARA

First Applicant

DARRYL FERRARA

Second Applicant

AND

WEBB & BROWN-NEAVES PTY LTD

Respondent

Catchwords:

Building Services (Compliant Resolution and Administration) Act 2011 (WA) - Costs - Conduct of owners (applicant) unnecessarily increased time of hearing - No costs where there was a genuine dispute

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 11, s 49(1)
State Administrative Tribunal Act 2004 (WA)

Result:

Application successful

Category:    B

Representation:

Counsel:

First Applicant	:	Mr K A Dundo
Second Applicant	:	Mr K A Dundo
Respondent	:	Mr T E Pontré

Solicitors:

First Applicant	:	KD Legal (Perth)
Second Applicant	:	KD Legal (Perth)
Respondent	:	GV Lawyers

Cases referred to in decision(s):

Ferrara and Webb & Brown-Neaves Pty Ltd [2021] WASAT 155

McLerie and Koleszko [2014] WASAT 160 (S)

Medical Board of Australia and Costley [2013] WASAT 2

Teissier and Commissioner of State Revenue [2016] WASAT 40

Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32

REASONS FOR DECISION OF THE TRIBUNAL:

1. On 8 December 2021, we published our reasons for decision Ferrara and Webb & Brown-Neaves Pty Ltd [2021] WASAT 155 (Reasons) dismissing the claim of Ms Patricia and Mr Darryl Ferrara (owners) against Webb & Brown-Neaves Pty Ltd (builder).

1. The dispute was regarding the cause and extent of cracking in the house constructed by the builder for the owners and the scope of any further remedial work that might be required.

2. The builder was substantially successful in defending the claim.  The builder was unsuccessful in its submission in relation to jurisdiction.  The builder now makes a claim for its costs.

3. The owners deny that the builder is entitled to either its expert fees or its solicitor and counsel costs and says that each party should bear their own costs.

Background

1. At the hearing it was not in issue between the parties that during the construction of the house remedial work had been carried out by the builder.  The remedial work had been necessary to remedy cracking in the house caused by structural problems.  The owners were not satisfied that the remedial work carried out by the builder was sufficient to remedy all issues.  They raised concerns that the remedial works either caused further damage (in relation to the piles) or was inadequate (steel columns and cracked brickwork).

2. On 6 February 2020, the owners made a complaint (Complaint) to the Building Commissioner under s 5 of the Building Services (Complaint Resolution and Administration) Act2011 (WA) (BSCRA Act).

3. The Complaint read:

   location - ground floor and first floor of the building.

   description - cracked brickwork on opposite ends of the canal facing side of the building signifying major structural defects of the building and concerns with the remedial works being undertaken by the builder and the way the builder seeks to proceed with the building works.

4. On or about 18 February 2020, pursuant to s 11 of the BSCRA Act, the Building Commissioner referred the matter to the Tribunal. At the time of the referral the remedial works were either under way or had been completed.

5. On 24 March 2020, the owners lodged with the Tribunal a Statement of Issues Facts and Contentions (SIFC).

6. An expert conferral was held at the Tribunal on 28 April 2020, and on 27 May 2020 the signed joint report was filed with the Tribunal (Exhibit 1, page 321).

7. In their report, the experts identified four areas of concern in relation to the cracking and structural integrity of the house.  They were:

   Issue 1 - Existing Sea Wall;

   Issue 2.1 - Screw Piles;

   Issue 2.2 - Grout Piles;

   Issue 3 - Steel Column Design; and

   Issue 4 - Cracking to Masonry.

8. The owners did not suggest that there were any further issues regarding their claim of faulty or unsatisfactory workmanship that would need to be considered by the Tribunal.

9. The owners in their 'Minute Final Orders by the Applicants' dated 26 February 2021 only sought remedial works to be carried out in respect of the four issues identified by the experts.  We determined the four issues as identified by the experts in the joint report.

10. We dismissed the owners' claims in respect of all four issues and, for the reasons set out below, have determined that the owners should pay a contribution to the builder's costs in respect of Issues 1, 2 and 4.

The applicable principals in cost applications

1. The builder and owners say,[20] and we agree, that there is no presumption that the parties bear their own costs.

   [20] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at paras 26 to 37 and Applicants' Submissions in Relation to the Respondent's Application for Costs dated 25 November 2022 at para 3.

2. We are at all times required to exercise our costs discretion judicially with regard to the objectives of the Tribunal[21] and in the interests of justice.[22]

   [21] As set out in s 9 of the State Administrative Tribunal Act 2004 (WA).

   [22] Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32.

Builder's submissions

1. The Tribunal has previously considered the factors and circumstances it might take into consideration when determining whether to exercise its discretion to award a party some or all of its costs.[23]  The builder in its submissions[24] sets out the factors it says are relevant to our determination of a costs order.

   [23] McLerie and Koleszko [2014] WASAT 160 (S) at [3].

   [24] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at paras 39 to 43.

2. The owners do not challenge the builder's submissions as to the factors relevant for us to consider if a costs order should be made.[25]

   [25] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at paras 39 to 43.

3. They include:

   (a)where the complexity of the matter justifies legal representation to prepare and present the matter to the Tribunal;

   (b)where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party;

   (c)where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party;

   (d)where credibility of evidence is at the heart of a matter;

   (e)where the application undermines the integrity of proceedings under the relevant Act;

   (f)where the case is weak, being incredible or implausible or obviously unmeritorious;

   (g)where a party has to embark in proceedings to vindicate its clear contractual entitlement; and

   (h)the circumstances of the case having regard to the above, or other, factors are such that the justice of the case merits it.

4. The builder seeks an order for both the legal costs and expert costs it incurred in defending the owners' claim.

5. The builder engaged the following experts to provide reports and attend the hearing:

   •Mr Gervase Purich of Structerre (builder's civil engineer);

   •Mr Shane Just of Structerre (builder's civil engineer); and

   •Mr Eric Hudson-Smith of Geosite Pty Ltd (builder's geotechnical engineer).

6. The builder asserts, and it is not contested by the owners, that the matter was complex and warranted the engagement by the builder (and owners) of suitably qualified legal representation.[26]  The owners challenge the builder's claim for the costs of an instructing solicitor to attend the hearing on the basis it was not a matter for which an instructor was necessarily required.  The owners say it was optional.[27]

   [26] Applicant's Submissions in Relation to the Respondent's Application for Costs dated 25 November 2022 at para 13.

   [27] ts 24 and 25, 16 January 2023.

7. The builder alleges the owners conducted the proceedings in a manner that significantly and unnecessarily increased the complexity, length and expense of the proceedings in that:[28]

   •The issue in relation to the jet grout piles (Issue 1) was originally raised (requiring expert conferral and preparation) but was ultimately not pressed at the hearing and we should infer it was not pressed as a result of its factual weakness.

   •The demolition of the house (remedy issue) remained a remedy up until 7 days prior to the hearing, namely 26 February 2021.  That was an unwarranted and dramatic remedy which unnecessarily increased the potential commercial liability of the builder and, in turn, justified requiring an increased level of legal costs being incurred in defending the proceedings.

   •The cracking to masonry (Issue 4) was an issue pressed by the owners in the absence of any evidence that there was any such cracking and was put on the basis that there might be cracking.

   •As a result of the above, there were aspects of the conduct of the owners which served to increase the complexity, length and cost of the proceedings and the preparation required.

Quantum

[28] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at para 42.

1. The builder has set out the quantum of the costs it seeks in a schedule annexed to its submissions.

2. The builder seeks an order for costs from a date prior to the commencement of the Tribunal proceedings (being 19 February 2021) on the basis that it required legal representation during and before the complaint was lodged with the Building Commissioner and then subsequently referred to the Tribunal.

3. The builder's total party/party costs incurred in relation to the matter are in the sum of $76,502.50.  The builder does not seek an order for the entire amount but for an amount in the sum of $50,000.

4. The reduced amount, the builder says, takes into account the fact that the hourly rate charged was an amount in excess of the amount provided for in the relevant Tribunal determination.  Further, the builder was substantially unsuccessful in pressing an argument that the Tribunal lacked jurisdiction.

5. The builder filed further information/submissions in relation to the quantum of the expert fees it sought which reduced its claim for expert fees from $31,608.50 to $25,630.

Owners' submissions

1. The owners submit that the builders conduct of the matter caused unnecessary expense to the parties.

2. The issues or conduct the owners says caused unnecessary expense are:

   •The builder effectively locked the owners out of the property from about November 2019 to April 2020.

   •The builder did not consult with or otherwise keep the owners informed of how the builder intended to rectify the structural issues raised by the owners, other than by informing the owners that the remedial works had already commenced.

   •The builder was of no assistance in facilitating the owners' experts to properly inspect the premises to satisfy themselves the structural issues of concern had been rectified.

   •The builder covered up and applied finishes to the surfaces which would have otherwise indicated any structural issues that may have continued to be exacerbated following the remedial works.

   •As a consequence of the builder's conduct in preventing access and covering up the surfaces referred to above, the owners' experts were unable to give their opinion in relation to Issues 1, 2 and 4.

   •In unnecessarily prolonging the hearing by failing to provide further evidence (the computer modelling) at an early stage of the proceedings in respect of Issue 3.

3. In response to the builder's submissions:

   •Issue 1 - the decision to not press Issue 1 was reasonable having regard to the evidence of the experts' opinions during the first day of hearing.

   •The remedy issue - it was not possible to specifically identify the remedy sought as the owners had not had access to the property and had not been informed of the remedial works being undertaken.  It was only after the owners obtained further information, after the experts had carried out a site inspection, that they were able to narrow the remedies sought.

   •Issue 4 - it was reasonable to be concerned that the extent of the cracking had progressed after the remedial work had been carried out.  Possible cracking could not be visible as the builder had applied gyprock and other finishings to the surfaces which could have shown cracking to masonry.

   •The Tribunal should not exercise its discretion to award costs as the owners had not acted unreasonably in bringing their claims and should have regard to the nature of the dispute and the need to rely upon experts.

Quantum

1. The owners challenge the rate charged by Mr Pino Monaco being that of a senior practitioner and claim it should instead be that of counsel.

2. The owners submit that the builder is not entitled to claim costs prior to the builders notice of lodgement of representation in the proceedings.  Further it should not be entitled to any costs in relation to Issue 3 given the lateness of the provision of the evidence in respect of the computer modelling.

Consideration

1. Although the Tribunal has a broad discretion to award costs, it is clear that it needs a good reason to depart from the general principle that parties will bear their own costs.[29]

   [29] Teissier and Commissioner of State Revenue [2016] WASAT 40 at [49].

2. We find there was a genuine dispute between the parties up to and at the commencement of the proceedings in the Tribunal for the following reasons.

3. Firstly, before and when the complaint was made to the Building Commissioner, the owners' expert was advising them that he was not satisfied the remedial work conducted by the builder had resolved the various issues (faulty workmanship) identified by the owners' expert engineer.

4. Secondly, the owners were continuing to obtain evidence about what remedial work had been carried out by the builder to assess its acceptability.

5. Thirdly, the nature of the unsatisfactory workmanship that required remedial work to be undertaken - the pilings being insufficient to support the house - warranted careful investigation.

6. As there was a genuine dispute between the parties and neither party had acted unreasonably before the commencement of the proceedings, we are not satisfied it is in the interests of justice to award costs to the owners before the builder's legal representative filed its notice of acting.

7. Accordingly, we do not need to consider if s 49(1) of the BSCRA Act enables us to award costs before the proceedings commenced in the Tribunal.

Factors to be considered

Complexity

1. We accept that the case was complex.  We also accept that it was reasonable, if not necessary, for the owners and the builder to be legally represented to ensure the case was presented in a more structured way than many building disputes before the Tribunal.

Credibility of evidence

1. The credibility of evidence could not be said to be at the heart of this matter and neither party argued that it was.

Integrity of proceedings

1. The builder did not suggest that the owners undermined the integrity of proceedings under the relevant Act.

Contractual rights

1. This was not a matter that related to contractual rights or entitlements.

Builder's conduct

1. The owners submit that as a consequence of the conduct of the builder in not allowing them access and completing remedial works without them having an opportunity to inspect the property, the owners' experts were unable to give their opinion in relation to Issues 1, 2 and 4.

2. We do not accept this submission.  It was the owners that raised Issues 1, 2 and 4.  If their expert could not opine on them and they had no other evidence of cracking or damage that their experts attributed to the work of the builder there was no reasonable basis to pursue the allegation of unsatisfactory or faulty workmanship.

3. The owners also say the builder unnecessarily prolonging the hearing by failing to provide further evidence (the computer modelling) at an early stage of the proceedings in respect of Issue 3.

4. Again, we do not accept this submission as the owners do not say how the late filing increased the time of the hearing.

5. We accept that the issue of the computer modelling increased slightly the time of the hearing, but this was unrelated to the late filing of the further expert report.

6. At hearing the owners' expert stated he could have conducted similar computer modelling as the builder but was not asked to do so by his client, the owners.

7. We are not satisfied that the conduct of the builder either before or during the proceedings unnecessarily prolonged the hearing or increased costs.

Owners' conduct

1. Below we consider the conduct of the owners in relation to several of the items of complaint which may have led to unnecessary costs to the builder.

2. We consider whether their case was weak, or obviously unmeritorious or they conducted themselves unreasonably and or inappropriately.

Issue 1 - Soil testing

1. At hearing the owners pressed the issue of soil testing despite their expert agreeing with the builder's expert that the builder had done all that was necessary to comply with the note on the canal wall drawing.[30]

   [30] Reasons at [73].

2. The owners did not articulate at hearing what they considered were the consequences of the alleged failure to test the soil.[31]

   [31] Reasons at [79] and [80].

3. We were unable to conclude there was any issue with the failure to test the soil and this should have been apparent to the owners given they submitted no evidence as to how this alleged failure meant the regulated building service carried out by the builder was faulty or unsatisfactory.

4. Pursuing this matter in the absence of leading any evidence as to the alleged consequence of not doing so or alternatively why it was necessary to do so (other than a note on the canal wall drawing) unnecessarily prolonged the hearing and increased costs.

Issue 2 - Jet grout piles

1. The conduct of the owners with respect to the jet grout piles was perplexing.

2. Originally the owners alleged they could not be certain of the depth of the installation of the jet grout piles and raised concerns as to whether they were sufficient to support the footings.[32]

   [32] Reasons at [89].

3. At the expert conferral the owners' expert's comment in relation to this item was that he had not seen evidence of the depth of the jet grout piles.

4. As is usually the practice in the Tribunal, all the experts gave their evidence concurrently at the hearing.  At this time the owners' expert, Mr Fred Davenport, after considering Mr E Hudson‑Smith's answers to matters Mr Davenport raised, said he was satisfied the depth of the installation of the jet grout piles was sufficient to support the footings.[33]  This issue of the depth of the jet grout piles was not pressed further at hearing.

   [33] Reasons at [114].

5. Mr Davenport also confirmed that the testing of the jet grout piles as sought in the owners' 'Minute Final Orders by the Applicants' dated 26 February 2021 would not tell you anything about the condition of the canal wall.[34]

   [34] Reasons at [109].

6. Indeed, the owners sought to raise an entirely new issue in respect of screw piles in their closing submissions that did not relate to the matter of complaint about the jet grout piles.  This was not allowed by the Tribunal.[35]

   [35] Reasons at [117] to [125] and [143] to [160].

7. We found there was no evidence before us that the use of the screw piles or the jet grout piles meant the regulated building service carried out by the builder was not carried out in a proper or proficient manner or was faulty or unsatisfactory.[36]

   [36] Reasons at [161].

8. The owner in pursuing the complaint (depth of the jet grout piles) of which they produced no evidence and attempting to raise a new issue (the use of screw piles instead of jet grout piles and its effect on the canal wall) unnecessarily increased the length and cost of the hearing.

Issue 3 - Steel column design

1. The determination of this issue required us to evaluate the differing opinions of the parties' experts.

2. The issue of the steel columns was determined in favour of the builder because we preferred the evidence of the builder's expert not because the owners' position was untenable.

3. We are satisfied there was a genuine dispute between the parties with respect to this matter.  The owners and builder agreed this issue took up approximately half a day of hearing time.

Issue 4 - Cracking to masonry

1. During evidence at hearing no expert was able to say there was any cracking that indicated the remedial works carried out by the builder had not been successful.[37]

   [37] Reasons at [217].

2. What the owners sought at hearing was an order for destructive testing to find out if the remedial works had resolved the problem(s) without leading any evidence to suggest the remedial works had not satisfactorily resolved the problem(s).

3. The jurisdiction of the Tribunal to make a building remedy order is only enlivened upon it making a finding of unsatisfactory or faulty workmanship.

4. There was no evidence put at the hearing that there is any problem with the brickwork in any area of the house.  The owners do not suggest there was.[38]

   [38] Reasons at [220].

5. Put simply, we have no power to make this order sought by the owners in the absence of any evidence of faulty workmanship.

6. It should have been obvious to the owners that mere conjecture, without evidence, that there might still be a problem despite the remedial works, could not satisfy the Tribunal that the builder's work was faulty or unsatisfactory.

Conclusion

1. We are satisfied that the conduct of the owners or the manner in which they conducted the proceedings in the Tribunal in respect of Issues 1, 2 and 4 unnecessarily increased the costs and duration of the hearing.

2. We are satisfied and find that the owners should pay a contribution to the builder's costs in respect of those items of complaint.

Quantum

1. In assessing costs, the Tribunal takes a 'robust and broad-brush approach' and bases its determination on what reasonable allowance should be made for the work necessarily done to bring the proceedings to a conclusion.[39]

   [39] Medical Board of Australia and Costley [2013] WASAT 2 at [66].

2. The Tribunal accepts that the costs awarded are compensatory and not punitive in nature.

3. In assessing what is an appropriate quantum of legal costs, we have had regard to the:

   •submissions by the owners;

   •submissions of the builder;

   •fact that the builder was unsuccessful in its application in relation to jurisdiction;

   •fact there was a genuine dispute between the parties in respect of Item 3; and

   •our knowledge of the proceedings generally.

4. We are also aware that what is sought by way of costs is not the full costs charged to the builder and have had regard to costs on a party/party basis.

5. The builder has claimed costs from the commencement of the matter or at least from the time the matter was in the Building Commission.  For the reasons set out earlier we find that until about the time of the expert report the position of the owners in respect of the items of complaint was not unreasonable or unarguable.

6. We note that both parties considered it was necessary to have an instructing solicitor.  We have allowed the builder the costs of the instructing solicitor as his presence allowed for the smoother running of the hearing which also meant a saving in time.

7. As the Tribunal has said previously, we are required to exercise our discretion in relation to costs with regard to the objectives of the Tribunal and in the interests of justice.

Conclusion

1. We are satisfied that the objectives of the Tribunal would be advanced and the justice of the case supports an order for the costs of the experts we relied upon in coming to our decision.

2. The Tribunal finds an appropriate and fair amount of legal costs to be paid by the owners to the builder is $30,000.

3. We were assisted in the parties closing submissions by reference to the transcript and have allowed the costs of the transcript of $4,360.

4. In regards to the expert fees we will allow Mr G Purich, Mr S Just and Mr E Hudson-Smith's fees being a total of $25,630.

Orders

The Tribunal orders:

1.The owners shall pay to the builder a contribution to its legal and expert costs fixed in the sum of $59,990.

2.The matter is listed for directions at 9.30 am on 6 June 2023 to hear from the parties with respect to time to pay.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

MS P LE MIERE, SENIOR MEMBER

23 MAY 2023