| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : HERDSMAN and COLLIER HOMES PTY LTD [2013] WASAT 208 MEMBER : MR S ELLIS (SENIOR SESSIONAL MEMBER) MR J FISHER (SENIOR SESSIONAL MEMBER)
HEARD : 25 NOVEMBER 2013 DELIVERED : 30 DECEMBER 2013 FILE NO/S : CC 247 of 2013 BETWEEN : GARRY EDWARD HERDSMAN DONNA HERDSMAN
Applicants
AND
COLLIER HOMES PTY LTD
Respondent
Catchwords: Building and construction - Work not carried out in a proper and proficient manner and/or is faulty or unsatisfactory - Compaction testing - Independence of expert evidence
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Legislation: Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 32, s 38, s 38(1), s 38(1)(a) Result: Finding that respondent contravened s 38 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA)
Summary of Tribunal's decision: The applicants' house developed substantial cracking since it was built by the respondent builder in 2006. The Tribunal found that the cracking was caused by the consolidation of naturally occurring soil beneath the triangular wedge of sand superimposed over the naturally occurring soil, the movement of the cantilevered retaining wall, and some degree of variability in the compaction of the fill. The site had been inadequately examined on behalf of the respondent and improperly classified as a class 'A' site by a structural engineer engaged for the respondent prior to commencing building. The design of the foundations provided by the respondent was inadequate for the conditions in which the house was erected. A contravention of s 38 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA)was found to have occurred. A further hearing will take place to determine the appropriate remedy. Category: B
Representation: Counsel:
Applicants : Self-represented
Respondent : Mr D Sandford (Acting as Agent)
Solicitors:
Applicants : N/A
Respondent : Collier Homes Pty Ltd
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Case(s) referred to in decision(s):
Nil
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 In June 2007, the applicants moved into their new home at No 14 Beckett Circle, Darch, Western Australia, which had been built for them by the respondent. Since then, the house has developed significant cracking. The applicants contend that the respondent is liable for the cracking under the Building Services (Complaint Resolution and Administration) Act 2011 (WA)(Complaints Act). 2 The proceedings arise from a complaint made on 3 September 2012 against the respondent pursuant to s 5 of the Complaints Act which was referred to the Tribunal. The complaint was the subject of an Inspection Report of the Building Commission dated 5 February 2013 (Commission Report). Some aspects of the complaint were resolved by agreement between the parties, but the matters which remain to be resolved are: as described in the Commission Report. 3 At the hearing on 25 November 2013, the Tribunal decided to defer considering the question of the remedy until after the question of liability had been determined. This decision is therefore concerned only with the question whether the respondent has contravened the Complaints Act, such that some form of remedy ought to be granted under the Complaints Act. 4 The nature and extent of the cracking and structural damage were described in the Commission Report and also in a report prepared by Mr Peter Airey of Airey Taylor Consulting dated 29 July 2013 (Airey Report).The respondent did not dispute the description of the physical condition of the house in the Airey Report or the Commission Report, although it did dispute that it was responsible for the defects, and disputed the conclusions drawn in the Airey Report. It said that the defects in the house were not the result of matters falling within the scope of its works. The respondent blamed the cracking on the installation of a swimming pool next door at No 4 Beckett Circle and works originally carried out by the developer of the site. (Page 5)
5 The crucial provision of the Complaints Act, for present purposes, is s 38(1), which sets out the circumstances in which the Tribunal can make a building remedy order: (1) If the Building Commissioner refers a building service complaint to the State Administrative Tribunal, the Tribunal may - 6 In general terms, the issue in the present case is whether s 38(1)(a) of the Complaints Act has been satisfied so that a building remedy order can be made.
Factual background 7 Section 38 of the Complaints Act proceeds on the basis that a regulated building service had been provided and that the respondent had provided that service. The work carried out by the respondent was a regulated building service because that work was done pursuant to the home building contract entered into by the applicants with the respondent. A set of documents comprising documents entitled 'General Specifications', 'Building Contract Single Storey Home' (Building Contract) and 'Preparation of Plans Agreement Single Storey Home' (Preparation of Plans) was included in the Building Dispute Document Booklet (Exhibit A). Each is a standard printed form with provision for insertions. Although the Building Contract has had details of the specific transaction added by hand, only the Preparation of Plans document has been signed by the parties. It contains details of the price for the construction works. The parties did not contend that there was more than one transaction between the parties. The Tribunal will therefore proceed on the basis that there was a single contract between the parties made up of all the documents described above. 8 The following description of the house and the cracking is based primarily on the Airey Report. 9 The block on which the house was built, No 14 Beckett Circle, runs east-west, with the front of the house facing westwards. The rear wall of the house (and the foundations at the rear beneath that wall), are located (Page 6)
about 4 metres from the rear (eastern) boundary at the house. The level of the ground at the rear of the house is approximately 3.2 metres higher that the ground level of the applicants' rear neighbours. There is a substantial retaining wall between the applicants' property and their rear neighbour's property. There was no evidence about the actual structure or dimensions of the retaining wall beneath the surface. The rear neighbours installed a swimming pool at the rear of their property, near to the retaining wall. A report dated 7 October 2013 prepared on behalf of the respondent by Structerre Consulting Engineers (Structerre) infers from a number of satellite photographs available on the internet that the swimming pool was installed in about 2008 but perhaps not filled until late 2008 or early 2009. 10 It appears that the level of the rear of the applicants' property was substantially built up at the time the property and the surrounding pieces of land were developed. 11 The property was inspected by representatives of Airey Taylor on 24 June 2013. Measurements taken on that occasion show that the levels of the floor varied by 38 millimetres from east to west. Measured from a datum in the middle of the family room, the levels of the floor in the eastern part of the house were up to 24 millimetres lower than the datum. The level of the floor in the other bedroom, which is located to the west of the datum, was 16 millimetres higher than the datum. A measurement was also taken of the plumbness of the external wall of the east side of the house. It was estimated to lean 12 millimetres to the east. 12 There was extensive and substantial cracking in the house. The cracking was most severe in the eastern third of the house. Many of the cornices in the property have become debonded. Some have become cracked. There are cracks in the walls. The Airey Report indicates that the cracks are up to 6 millimetres wide. Mrs Herdsman said at the hearing that the cracks have become worse since the Airey Report was prepared. The Airey Report also shows extensive cracking of the tiles in the bathroom. There is a 10 millimetre gap between the rear wall of the house and the brickpaving at the rear. 13 In broad terms, the back of the house is sliding away from the rest of the house, and downwards. 14 No firsthand evidence was given about the level of the natural surface of the applicants' land prior to development. The Airey Report assumed that the natural level of the sand was at the foot of the retaining wall, that is to say, about 3.2 metres below ground level at the top of the retaining wall, and that it sloped upwards to the west. Mr McColgan, (Page 7)
an employee of Structerre, gave evidence on behalf of the respondent.He is described as an 'Engineering Associate' on Structerre's report of 7 October 2013, and is the holder of a Diploma of Engineering (Structural). He contended that it was unlikely the natural surface of the soil would have been at the base of the retaining wall. He contended that it was more likely that the earthworks would have involved cutting soil away on No 4 Beckett Circle, east of the boundary, and filling the soil on No 14 Beckett Circle, west of the boundary, with the natural level of the soil sloping down from No 14 Beckett Circle, but only to about halfway down the level of the present retaining wall. While the natural fall of the land may have been as described by Mr McColgan, it seems likely that soil would have had to have been excavated to the depth of the foot of the retaining wall on both sides of the retaining wall while the retaining wall was being built. The Tribunal considers that there was 3.2 metres of fill at the eastern boundary of the applicants' property, next to the bottom of the retaining wall. It cannot be assumed, however, that the taper back towards the west to the higher natural level of the soil on the applicants' property was an even taper, as hypothesised by Mr Airey. 15 Two issues arose: Causation 16 Two theories were put forward for the settlement at the rear of the house. 17 The applicant contended that the settlement was caused by: 18 This was the view expressed in the Airey Report at paragraph 4.4. Mr Peter Airey, the author of the Airey Report, was not called to give evidence at the hearing. However, the respondent did not object to the Tribunal taking his report into evidence and did not require him to be called to give evidence. Mr Airey holds a Bachelor of Engineering and is a Fellow of the Institute of Engineers, Australia. The Tribunal accepts (Page 8)
that he is qualified to give expert evidence in relation to the matters the subject of the Airey Report. 19 The Airey Report also said that: (a) the site was 'unquestionably and obviously filled'; (b) it is well understood that soil beneath the retaining wall would be subject to pressure exerted by the soil above it, which would cause the soil to consolidate over a substantial period of time; and (c) the retaining wall was within the zone of influence of the house. 20 The respondent contended that: 21 These contentions were contained in a report from Structerre dated 7 October 2013. There are a number of issues which arise. 22 First, an issue arises about the independence of Structerre. Mr Sandford, who represented the respondent and is an experienced builder, estimated that Structerre carries out between 70% and 80% of all site assessments in the Perth area. Structerre has an ongoing commercial relationship with the respondent. Mr McColgan indicated that Structerre values its relationship with the respondent, although he also indicated that the respondent was not one of Structerre's larger clients. 23 Additionally, it was Structerre that carried out the initial site inspection. A copy of the Compaction Test Certificate dated 13 October 2006 carried out by Structerre was provided by the respondent. There was an issue with the appropriateness of the testing and classification of the site by Structerre, which will be discussed below. 24 Further, comments in Structerre's earlier report of 20 August 2012 undermine Structerre's independence. This report was prepared by Mr Max Naismith, who is described in that report as 'Principal Engineer'. (Page 9)
Extensive cracking was evident at the time of the 20 August 2012 report. Page 4 of that report states: 25 The causes outlined in section 3.1 were: 26 Stormwater management was ruled out when subsequent investigations showed that soakwells were in the front of the house. The report of 26 August 2012 identifies further investigations which ought to be carried out. It further states: These actions outlined above were not included in the first site visit as it is considered it may indicate to the Owner that the problems may be more extensive than originally thought. It is important that as the builder you are aware of the extent of the potential problem and possible corrective actions necessary before proceeding to this next stage. 27 While these remarks may be appropriate where an engineering consultant provides advice to a client, they are inconsistent with the objectivity and impartiality required of persons purporting to give independent expert evidence to the Tribunal. 28 The approach of Structerre evident in the report of 26 August 2012, the ongoing relationship between Structerre and the respondent and the prior involvement of Structerre at this very site undermines the impartiality of Structerre's evidence and the weight which can be given to it. There was, however, no objection to Structerre's evidence by the applicants. 29 Second, the 'swimming pool hypothesis' was not referred to in the report of 26 August 2012, although the report endeavoured to identify possible causes of the damages for further investigation. The swimming pool had been built for some time as at the date of this report. If the swimming pool hypothesis had merit, Mr Naismith would have raised it and recommended that further investigations be carried out in respect of it. (Page 10)
30 Third, the 'swimming pool hypothesis' is inconsistent with measurements of soil compaction density which were made by Structerre on 12 October 2012 and included in the report of 17 October 2012. The measurements were:
| Location | Depth - 150 millimetres to 1050 millimetres | Depth - 1050 millimetres to 1950 millimetres | Additional 150 millimetres+ | | Rear north-east corner | 9/11/12 | 5/2/4 | | Mid length of rear wall | 1/9/3 | 3/3/1 | 1 | | Rear south-east corner | 7/4/3 | 2/1/1 | 1 | 31 The measurements were taken 200 millimetres back from the rear wall of the property using a standard Perth penetrometer. This device measures the number of standardised blows required to move a standardised probe through soil so as to measure the soil's compaction. The test starts with the probe having been inserted 150 millimetres into the soil. The number of blows required to drive the probe 300 millimetres further into the soil is then recorded. Accordingly, the figure for the rear north-east corner shows that it took nine blows to move the probe from 150 millimetres deep to 450 millimetres deep, then 11 blows to move it from 450 millimetres deep to 750 millimetres deep, and then 12 blows to move the probe to a depth of 1050 millimetres. The same principle applies for the measurement at other depths, except that, after 1950 millimetres deep, the measurement is of the number of blows required to drive the probe another 150 millimetres. Obviously, the greater the number of blows, the denser or more compacted is the soil into which the probe is being inserted. 32 The measurements show that the soil was most compacted in the rear north-eastern corner of the property. This is the area of the rear of the site which is closest to the swimming pool at the rear of No 4 Beckett Circle. If, as the respondent contends, the swimming pool was responsible for the subsidence and cracking, then one would have expected the area nearest the swimming pool to be the least compacted part of the back yard. This is not reflected in the measurements. (Page 11)
33 For these reasons, the Tribunal rejects the hypothesis that the subsidence was caused by the construction of the swimming pool next door. The Tribunal accepts the Airey Report as to the causes of the subsidence. 34 The respondent argued then that it was not responsible for the condition of the site and for any cracking caused by the condition of the site. The site was developed by a third party, which carried out the earthworks associated with development of the site and, in particular, the compaction of the soil on the site and the construction of the retaining wall. The respondent pointed to compaction testing carried out by Structerre and the Compaction Test Certificate issued by Structerre on 13 October 2006. That testing showed satisfactory compaction within the boundaries of the house to be built by the respondent. 35 The site was classified 'A' for the purposes of Australian Standard AS 2870-1996 as a result of Structerre's testing. Australian Standard AS 2870-1996 is entitled 'Residential slabs and footings - Construction'. It classifies building sites and lays down differing standards for slabs and footings based on that classification. Class 'A' is defined by Table 2.1 of the Australian Standards to refer to 'Most sand and rock sites with little or no ground movement from moisture changes'. Class 'P' is defined to apply to the following: Sites which include soft soils, such as soft clay or silt or loose sands; landslip; mine subsidence; collapsing soils; soils subject to erosion; reactive sites subject to abnormal moisture conditions or sites which cannot be classified otherwise. 36 Clause 2.4.1 of AS 2870-1996 provides: Site classes shall be determined according to the provisions of Clauses 2.4.2 to 2.4.6. Filled sites shall be classified as Class P except where the conditions of Clause 2.4.6(c) and 6.4.2 allow another classification. 37 The applicants' property was clearly a filled site. Clause 1.7.13 of AS 2870-1996 defines 'Controlled fill' to mean 'Material that has been placed and compacted in layers by compaction equipment within a defined moisture range by compaction equipment to a defined density requirement in accordance with clause 6.4.2(a) and AS 3798'. There was no evidence before the Tribunal that the site had been filled in such a way as to make the fill 'controlled fill'. 38 Clause 2.4.6 of AS 2870-1996 provides: (Page 12)
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39 The effect of clauses 2.4.1 and 2.4.6(c) of AS 2870-1996 is that a site must be classified as a 'P' site unless an assessment has been carried out which satisfies clause 2.4.6(c) of the AS 2870-1996. This involves a consideration of the movement of the fill and the underlying soil from the as constructed condition to the long term equilibrium moisture conditions. That consideration requires either an allowance for variations of moisture conditions or an estimation of the movement by reference to established knowledge of the behaviour of similar fills. There was no evidence that an assessment was carried out as required by clause 2.4.6(c) of AS 2870-1996. It appears that all that was done was some testing within the boundaries of the house, using a Perth penetrometer, which would not comply with the requirements of the AS 2870-1996. 40 In the Airey Report, Mr Airey commented unfavourably on the assessment process: The subject site has fill which tapers from approximately 3.2m to nil. Under these circumstances there is, or should have been, a real concern that differential settlement of the east end of the site relative to the west could occur as a result of the uneven loading of the naturally occurring soils by the placement of those soils of deep fill at one end of the site (imposing a pressure of approximately 50 – 55 KPa) with no corresponding change in loading on the non-filled component of the site. In short the site warranted an appropriate level of checking to ensure that the site could be classified as other than P. (at 4.1) … In the investigation performed by Structerre (October 2012) (Mr Naismith, Principal Engineer, BE (Civil) Eng MIEAust) a set of 3 penetrometer tests were performed to a depth of 1950[mm]. The results are set out on page 2 of the report dated 17 October 2012. The report shows that at depth the level of compaction within the soil tested is unsatisfactory. The 1950mm testing, although belated, does shed some light on the level of compaction within the soil behind the retaining wall where tested (which was about 4.0m from the face of the limestone wall). It beggars belief that this was not checked originally even to a much greater depth in view of the Class P nature of the site. … As the site was a Class P site full depth testing of fill would be a minimum level of prudence. 41 The Tribunal accepts the conclusions expressed in the Airey Report, which confirm the views expressed at paragraph 39 about the (Page 14)
requirements for specific consideration of the characteristics of the site. The Tribunal finds that the site was not adequately tested to ascertain whether the site was properly classified as an 'A' class site. In the absence of such testing, the site could only be classified 'P'. 42 The Tribunal is satisfied that proper assessment of the site formed part of the obligations of the respondent under the contract. The Preparation of Plans Agreement provides that the respondent is to arrange for an engineer's Certificate of Inspection and footing details, and prepare drawings and to provide general specifications. The 'engineer's Certificate of Inspection' no doubt refers to the Compaction Certificate. Structerre's investigation of the site on behalf of the respondent, the classification of the site and the Compaction Certificate based on them were inadequate for the reasons given above. 43 Further, the footings and the foundations, which formed part of the work carried out by the respondent, were not suitable for the conditions in which they were erected, because they were not sufficient to prevent the building cracking. The inadequacy of the foundations flows from the inadequacy of the investigation, the classification of the site and the Certificate of Inspection, but is a separate failure on the part of the respondent, because the package of services provided by the respondent included design services. 44 The Tribunal is satisfied, therefore, 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 and is faulty or unsatisfactory.
Conclusion 45 For the reasons given above, a building remedy order should be made in respect of the applicants' complaint. There were differences between the parties about the most appropriate order. 46 The Tribunal will hold a further directions hearing at which directions will be made to programme the matter to a further hearing as to the particular remedy which should be granted. Order The Tribunal makes the following order: (Page 15)
1. A further directions hearing is to be held on 4 February 2014 at 9.15 am. |