Giorgio v Queensland Building and Construction Commission
[2014] QCAT 397
| CITATION: | Giorgio v Queensland Building and Construction Commission [2014] QCAT 397 |
| PARTIES: | Christopher Joseph Giorgio (Applicant) |
| v | |
| Queensland Building and Construction Commission (Respondent) |
| APPLICATION NUMBER: | GAR353-13 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | 7 August 2014 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Paratz |
| DELIVERED ON: | 12 August 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Part of the decision of the Queensland Building and Construction Commission made on 10 September 2013 is amended so as to issue a Direction to Rectify to Auctus Group Pty Ltd to rectify the following defective building work:- (i) Main Balcony – Approx. 60 tiles lifted (Volcano effect) (ii) Main balcony – Different colour and texture tiles (slippery) used from previous repair. 2. No order is made as to costs. |
| CATCHWORDS: | Where an application was made for Directions to Rectify defective building work – whether it would be unfair to the builder to direct rectification – whether the price paid by an owner for the property is relevant to the fairness of a direction to rectify in the circumstances – where work was defective from the outset |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Christopher Joseph Giorgio represented by Vito Giorgio |
| RESPONDENT: | Sarah Brydon (Solicitor) of Holding Redlich |
REASONS FOR DECISION
Christopher Joseph Giorgio is the owner of a home unit at 23/102-108 Nicholson Street, Greenslopes. He purchased the unit on 5 March 2013 at a mortgagee in possession auction. He made a complaint on 17 April 2013 to the Queensland Building and Construction Commission (QBCC) about building work performed at his unit by the Auctus Group Pty Ltd (the builder).
The complaint related to six items:-
1.Main Balcony – Approx. 60 tiles lifted (Volcano effect)
2.Main balcony – Different colour and texture tiles (slippery) used from previous repair
3.Allocated basement carpark – Water leaking from basement ceiling onto cars causing paint damage
4.Kitchen – Kitchen range hood only 430mm high
5.Allocated basement carpark – Hot water safe tray not plumbed, leaking onto cars in basement
6.Main balcony and second balcony – AC drains not plumbed (2 of)
The QBCC made a decision on 10 September 2013 that it could not issue a Direction to Rectify to the Contractor. Mr Giorgio filed an application to review that decision in the Tribunal on 8 October 2013.
The reason stated in the letter of 10 September 2013 for refusing to issue a Direction to Rectify was that the time period for BSA to intervene after the building work has been completed is 6 years and 3 months, and that the period had passed.
The QBCC provided a Statement of Reasons, filed on 19 November 2013. The reasons stated that item 2 is not defective building work for which the builder is responsible[1]. They stated as to the other items that the Authority was unable to assist as more than 6 years and 3 months had passed since the relevant building work reached practical completion[2].
[1]Statement of Reasons [30(b)].
[2]Statement of Reasons [33].
Mr Giorgio took issue with the calculation by the QBCC of the date of practical completion. Extensive correspondence has passed between the parties in relation to this aspect. It is not necessary to canvass the arguments, because the QBCC altered its reasons, and conceded that the claim was made within time.
The decision maker was Mr William Pullar, a building inspector employed by the QBCC. In an Affidavit filed on 20 June 2014, he stated that[3]:-
[3]Affidavit William Pullar filed 20 June 2014 at [10] – [12].
10. Since I instructed in the preparation of the Statement of Reasons, Leean Tyler of the Commission has undertaken a further assessment of the file in relation to the date on which the relevant works were completed.
11. The results of this further assessment have not caused me to change my Decision.
12. Further reasons for my decision are, however, contained at paragraphs 33 to 45 of this my statement.
and
30. In summary, due to the locating of a plumbing final certificate in relation to the Property, the Commission has adopted 20 May 2008 as the date on which the relevant building work was completed.
31. Accordingly, the Commission is in time to issue a direction to rectify in relation to the building work at the property and, as such, I have had cause to further consider the commission’s file and my decision, particularly with respect to items 1, 3, 4, 5 and 6 of the complaint.
Mr Pullar then went on to say that he remained satisfied that a direction to rectify should not be issued to the builder, and referred to section 72(14) of the QBCC Act which provides that:
The Commission is not required to give a direction under this section to a person who carried out building work for the rectification of the building work if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction.
He then outlined reasons why he considered that it would be unfair to the builder to issue a direction to rectify:
34. I consider that, pursuant to section 72(14) of the QBCC Act, it would be unfair to the Builder to issue a direction to rectify in circumstances where:
(a) the Applicant failed to undertake a pre-purchase inspection of the property
(b) in my view, at least items 1, 2 and 4 of the Complaint would have been evident upon such an inspection;
(c) as such, if the Applicant had undertaken a pre-purchase inspection of the Property, the Applicant would have become aware of items 1, 2 and 4 of the Complaint;
(d) in my view, it is likely the purchase price of the property at auction would have been reduced to accommodate items 1, 2 and 4 of the Complaint, which in my view would have been evident upon an inspection of the property; and
(e) in my view, the Applicant should not have the benefit of either a direction to rectify against the Builder or an insurance claim in addition to a reduced purchase price, in circumstances where the Applicant decided not to undertake a pre-purchase inspection of the property.
He raised specific issues as to fairness and reasonableness in relation to issuing a direction to rectify as to items 1 and 2 because[4]:
(a)A large gum tree above the balcony of the property has caused leaves, branches and vines to fall onto the balcony;
(b)Previous inspections undertaken by the Commission both by myself and by other inspectors in relation to the Complex between 2010 and 2013, have confirmed that the Property has been neglected and left vacant for long periods of time, with no maintenance being carried out;
(c)In my view, any reasonable builder when looking at the complex would consider that the Complex had been neglected and poorly maintained over a lengthy period of time;
(d)In my view, due to the property not being maintained, debris from the gum tree has likely clogged up the balcony floor and overflow, and appears to have resulted in the balcony being flooded on more than one occasion;
(e)The statement of Christopher Joseph Giorgio, filed by the Applicant 9 December 2013, provides Nearmap photographs that depict the whole of the balcony being flooded on 11 September 2011 and again on 8 May 2012. This is confirmed at paragraph 17 of the Applicant’s statement;
(f)In my view, the flooding of the balcony has allowed the tiles to be saturated for long periods of time, causing water to leach into the glue and contributing to the lifting of the tiles
[4]Affidavit William Pullar filed 20 June 2014 at [36].
Body Corporate
The matter has been complicated by differing views as to who bears responsibility for the tiles on the main balcony of the Unit, as to whether it is the owner or the Body Corporate. The balcony forms the roof of the unit below.
The Body Corporate had made a complaint to the QBCC on 17 October 2012 as to defects as to the tiles. It was Item 13 of that complaint.
The description of that complaint and the response of Mr Pullar, who was also the QBCC Inspector on that complaint (with Don Vosper, BSA Senior Building Inspector, and Leean Tyler, BSA North West Manager) were as follows[5]:-
Location – Unit 23 balcony
Description of defect – Balcony experiencing loose and drummy tiles.
Lack of tile expansion joints.
Notes – Access was not gained to Unit 23.
Alleged defects to individual units are not the responsibility of the body Corporate.
Complaint Forms must be lodged by owners of the Unit involved.
Complaint Forms were provided to the representatives of the Body corporate.
The BSA was unable to inspect this item.
[5]Resolution Services – Initial Inspection Report 5 December 2012.
This response of the QBCC led Mr Giorgio to file the complaint which is the subject of these proceedings.
However, questions still seemed to remain as to who should be the complainant, and the Body Corporate lodged a further and separate Complaint dated 8 April 2014 (after commencement of these proceedings). The two items on that complaint relate to water leaking into the ceiling of Unit 22 from Unit 23 above; and defects on the balcony and tiling of Unit 23. I was advised that the handling of that complaint is pending the results of these proceedings.
This issue of responsibility is not ultimately of significance, as the QBCC did not take any point on the hearing as to the standing of Mr Giorgio to make the complaint, or the effect of this question of responsibility on a Direction to Rectify.
I note in passing that it would seem arguable that the responsibility as to the membrane is that of the Body Corporate as contended by Mr Giorgio throughout, if section 157(2)(a)(iii) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 applies, which provides that:
(2)To the extent that lots included in the community titles scheme are created under a building format plan of subdivision, the body corporate must –
(a)maintain in good condition –
(iii) roofing membranes that are not common property but that provide protection for lots or common property.
However, I did not hear any submissions on this point, and do not have to decide it.
Unfairness
The only issue that therefore was in contention on the hearing was whether it would be unfair to the builder to issue a direction to rectify in the circumstances.
Neither party called the builder to give evidence. I queried at the commencement of the hearing whether I would be able to make a fair and proper decision in the absence of the builder. Both parties assured me that the matter could properly proceed. The solicitor for the QBCC said that the builder had been difficult to contact. There was some question as to whether the builder was in liquidation or not.
The only factual issue that seemed to be in any dispute was as to who did the repair work on the balcony tiles, whether it was the builder or somebody else. I proceeded with the hearing, and this question did not ultimately become determinative, so I am satisfied that I was able to properly consider the issues without seeking evidence from the builder.
Mr Giorgio called Mr Peter Greenham, a Building Inspector. He said that he considered that the balcony was built with inadequate drainage for the size of the balcony. He said that there was no waterproofing membrane under the tiles, and no expansion joints or control joints as he would expect to see. He agreed that extended water ponding on the balcony would damage the glue of the tiles, and the membrane below if one was present, and would cause water to penetrate below.
Mr Giorgio gave evidence that he had bought the unit without inspecting it, as he was relying on the advice of his father who was a commercial builder. His father had advised him that any problems with the balcony would be a matter for the Body Corporate to worry about, so he did not worry about inspecting the balcony, and was generally satisfied as to the units internally from inspecting another unit on the first floor. He first became aware of the problems with the balcony tiles during a tenancy inspection after he had purchased the unit.
In his submissions at the conclusion of the hearing, Mr Giorgio, through his father who was appearing for him, said that he was not pressing for Directions in relation to items 4, 5 and 6 as he was going to have them fixed himself.
Mr Giorgio was seeking to press item 3 in relation to the water leaking onto cars in the carpark. However, no evidence was led before me as to this item, as to how the water was reaching the carpark. I pointed this out to Mr Giorgio and he said it was a matter for the Body Corporate. I will not make any finding as to item 3 in the circumstances.
The only two items to be decided then are item 1 and 2 relating to the tiling and the balcony.
The QBCC called Mr Pullar. He gave evidence as to all items, but I will not canvass those items not in issue, and will refer only to Items 1 and 2.
Mr Pullar did not think that the drains on the balcony were of an adequate size. He said that Items 1 and 2 were defective building work. He said that if it were proved that there was leaking, then it would be classified as a category 1 defect. He had initially classified it as a category 1 defect, and he imagined that it did leak. He was quite clear that the installation of the tiles was not done properly in the first place.
I asked Mr Pullar what the effect of the water pooling would have been, if the tiles had been laid properly with expansion joints, and with a membrane in place. He replied that there might have been ‘some effect’ with maybe ‘one or two’ tiles popping, but just how extreme the effect would have been was impossible to say. He noted that there had been no examination of the adhesive or the membrane to see if they were appropriate in the first place. He said that if the tiles had been laid properly in the first place, that the effect would have been less.
He said that the repair, by replacing only some of the tiles that had been affected was not proper. He said that taking up some tiles changes the expansions in the system, and accelerates the damage to the rest of the tiles, and makes the rest worse. He said that all the tiles have to be replaced.
Mr Pullar summed the situation up by saying that ‘to cut to the chase’, that the tiling installation was always doomed to fail, and that if it is not installed properly, it is not installed properly.
Discussion
This matter came down to the question of whether it would be unfair to direct the builder to rectify the defective tiling on the balcony.
The clear evidence is that the tiling on the balcony was defective from the outset. Whether the balcony was properly maintained by the cleaning of debris and unclogging of the drain openings, to avoid extended periods of standing water, would not have altered the basic defects.
The builder has suffered no detriment to his position by the lack of maintenance. The original defect was not affected in any way by the maintenance issue. The builder became exposed to a direction to rectify from the outset by failing to conduct the work properly. I do not see that any element of unfairness arises just because the defect manifested earlier than it would otherwise have done, due to the lack of maintenance.
It is not known who performed the repair by replacing some of the tiles only. That is now immaterial, because Mr Pullar made it clear that all the tiles would have to be removed and re-laid in any event, so no extra expense is now involved by replacing the repaired tile area as well.
There is no evidence as to what the fair market price of the unit would have been at the time that Mr Giorgio bought it, if a prudent buyer was aware of the defect, as opposed to the price a prudent buyer would have paid if he was unaware of the defect. Mr Giorgio seems to suggest there would be no difference, as a buyer would expect the Body Corporate to repair any problems, so the price would not be affected, or the effect would be only minor as the cost is spread amongst all the units. He may be correct on that argument, but there is no evidence one way or the other.
There is no evidence that Mr Giorgio is obtaining a ‘double benefit’ by having had the price of the unit reduced specifically to take account of the anticipated cost of rectification of the tiling of the balcony, and then having the work rectified by somebody else.
I therefore do not consider that any element of unfairness arises in relation to the builder being required to rectify the defects, as a result of the lack of maintenance, or the price that Mr Giorgio paid, or of his not conducting a pre-purchase inspection, or for any other reason.
I therefore consider that a Direction to Rectify should issue in relation to both items 1 and 2.
Both parties advised that they would not be seeking costs, regardless of the outcome.
I therefore will make an order amending that part of the decision of the QBCC made on 10 September 2013 so as to direct the builder to rectify items 1 and 2, with no order as to costs.
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