HK Developments Pty Ltd v Carter
[2014] QCAT 330
| CITATION: | HK Developments Pty Ltd v Carter [2014] QCAT 330 |
| PARTIES: | HK Developments Pty Ltd (Applicant) |
| v | |
| Nathan Carter (Respondent) |
| APPLICATION NUMBER: | BDL056-11 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 11 – 2 September 2013 15 – 17 April 2014 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Gardiner |
| DELIVERED ON: | 14 July 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Nathan Carter pay HK Developments Pty Ltd the sum of $79,841.45 in full and final satisfaction of this matter by 31 July 2014. 2. HK Developments Pty Ltd file in the Tribunal two copies and give to Nathan Carter one copy of any application with any written submissions and supporting documentation in relation to costs by 25 July 2014. 3. Nathan Carter file in the Tribunal two copies and give to HK Developments Pty Ltd one copy of any submissions and supporting documentation in response to any application for costs by 8 August 2014. 4. HK Developments Pty Ltd file in the Tribunal two copies and give to Nathan Carter one copy of any submissions in reply by 15 August 2014. 5. The application for costs will be determined by the Tribunal on the papers without an oral hearing not before 15 August 2014. |
| CATCHWORDS: | BUILDING – where the builder issued a progress claim for payment – where owner failed to pay the progress claim – where builder suspended the works – where owner purported to terminate the contract – where the builder seeks final payment for completed building work and variations – where owner alleged practical completion not reached Domestic Building Contracts Act 2000 (Qld) ss 67, 80, 84 Smyth (Ross T) & Co Ltd v Bailey, Son & Co [1940] All ER 60 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Represented by Mr S Healy and Ms H Kayra-Healy |
| RESPONDENT: | In person |
REASONS FOR DECISION
HK Developments filed an application in March 2011 seeking final payment in a building contract between itself and Nathan Carter for a home built at Springfield. HK Developments seeks a payment of $67,000 plus damages of $21,793.06 and interest.
Nathan Carter is a concreter who runs his own business and he contributed to the building of this house in that capacity. Mr Carter countered, applying for rectification costs of $8,865.80, additional costs of $104,159.00, damages of $113,024.80 plus liquidated damages of $12,900.00, a declaration as to the termination of the contract, certificates of compliance for the house, interest and costs.
The contract between the parties was dated 7 February 2010 for a contract price of $670,000 and work commenced in March 2010. HK Developments issued a notice purporting to suspend the contract in February 2011. Nathan Carter disputes any monies owed under the contact saying practical completion had not been reached. Mr Carter purported to terminate the contact himself after the suspension notice had been received.
ISSUES
The agreed issues are as follows:
a) Did HK Developments lawfully suspend the building contract between the parties on 4 February 2011?
Inherent in this question are two further issues:
i)What, if any, progress payments were outstanding, in particular had practical completion been reached as Mr Carter alleges that the practical completion payment is the only outstanding progress payment?
ii)Was Mr Carter in breach of clause 12.5 of the contract for failing to pay for variations requested?
b) If “yes” to a) above, what is the impact of that suspension?
i)If Mr Carter is in breach of the contract, can he lawfully terminate the contact?
c) If “no” to a) above, what is the effect of Mr Carter’s:
i)Notice of intention to terminate of 5 February 2011; and
ii)Notice to terminate dated 16 February 2011?
d) What are the lawful variations?
e) What allowances should be made for incomplete work or defects?
f) Should an award of damages be made?
g) Should costs be awarded?
Events
By notice dated 4 February 2011, HK Developments sought to suspend the works under clause 16 of the contract. HK Developments said this was because:
a) Progress claims had not been made under clause 11.7 of the contract ; and
b) Variations under clause 12.5 of the contract had not been paid for.
The progress claims sought were not identified in the notice.
Mr Carter in a Notice of Intention to Terminate dated 5 February 2011 disagreed that practical completion had been reached or that there where any monies owing under variations.
On 5 February 2011 Mr Carter claimed to give notice to terminate the contract on the basis of clause 20 of the contract saying HK Developments:
· was failing to proceed with the works with due diligence or in a competent manner;
· refused or neglected to remove or remedy defective work or improper materials;
· was unwilling to complete tasks;
· was in substantial breach of the contract.
On February 16 2011, Mr Carter formally gave his notice to HK Developments to terminate the contract. Mr Carter denied he was in breach of the contract saying:
· all progress payments had been made in accordance with clause 11;
· the only progress payment outstanding was that for practical completion and in his view, that stage had not been reached;
· any variations were unlawfully claimed.
Suspending the building contract
Clause 16 of the contract allows HK Developments to suspend the contract by written notice where the owner is in ‘substantial breach’ of a term of the contract. ‘Substantial breach’ is defined under the contact to mean a party’s failure or refusal to perform its obligations under the contract.
HK Developments’ notice did not identify the progress payment it alleges Mr Carter did not pay. The notice simply says progress payments under clause 11.7 which states the general obligation of the owner to pay progress payments. The notice did identify the contract variations it says were agreed by Mr Carter and not paid by him.
Clause 16.2 of the contract between the parties requires HK Developments to notify Mr Carter of the grounds of the suspension.
I am not satisfied that the notice sufficiently identifies which progress payment HK Developments alleges has not been made by Mr Carter. Mr Carter must be able to indentify the breach alleged by HK Developments in order to remedy the breach under clause 16.3 of the contract.
I am not satisfied the first ground of HK Developments’ suspension notice sufficiently particularises the alleged substantial breach to allow HK Developments to rely on this ground of the notice to suspend the works in the event of Mr Carter failing to pay an identified progress payment.
Was practical completion reached?
If I am wrong about the first ground of the suspension notice, I will consider if practical completion had been reached when the suspension notice was served.
Practical completion is defined in the general conditions of the Standard Master Builders’ Residential Building Contract. It means that stage of the works when the works are completed in accordance with the contract and all relevant statutory requirements, apart from minor omissions or minor defects, and the works are reasonably suitable for habitation.
Practical completion stage is also defined under section 67(6) of the Domestic Building Contracts Act 2000 as meaning for a regulated contract, the stage when either:
(i)without any omissions or defects; or
(ii)apart from minor omissions or minor defects; and
(b)the detached dwelling or home is reasonably suitable for habitation.
Practical completion is an ultimately a question of fact and degree. Here this means fit for use as a residential dwelling.
Mr Carter disputes that practical completion was reached because he says, in his final submissions filed 1 May 2014, that basic expected uses of the house were not available at the time the builder claimed practical completion. Overall, Mr Carter alleges final plumbing had not been completed, fixtures not pressure tested, sewerage not completed or inspected, water tanks not completely installed, electrical work not completed or left in an unsafe manner.
In particular, Mr Carter says the main items missing were:
·No usable toilets
·No hot water
·Oven not installed, microwave with no power point
·Dishwasher and washing machine not able to be used
·Unsafe, exposed electrical wiring
·Some lighting not installed
·Spa not functioning and shower flooding bathroom.
Mr Carter also alleges numerous other minor defects.
John Duncalf the regional manager of the Master Builders Association gave evidence touching on a number of issues in this matter. In particular, he gave evidence concerning what constitutes practical completion. He told the Tribunal that many people get practical completion and the building handover confused. Practical completion signifies that the home is habitable but this does not mean the owners might want to live in the home at that point. At practical completion, the home owner and the builder conduct the defects/incomplete work inspection.
Mr Duncalf gave evidence that the Building Code of Australia requirements for “habitable” were very minimal - provision for waste, cooking, laundry and a working toilet. Mr Duncalf did not believe the Code included the provision of hot water, final plumbing or a safe wiring system. Mr Duncalf said the habitable is not the same as wanting to live there and that what usually happened was that the final payment was made by the home owner at practical completion and a defects list compiled, then before hand over, outstanding issues and defects (e.g. plumbing, site cleanup) were completed. Clause 17 of the Master Builders contract sets out the obligations of both parties upon the practical completion stage.
Mr Casiniro Simeone, a building inspector also gave evidence to the Tribunal. Mr Simeone undertook building inspections for Mr Carter and prepared reports dated 27 October 2010 and 27 January 2011.
In his last report, Mr Simeone opined that the house had not reached practical completion.
In his oral evidence to the Tribunal on 11 September 2013, Mr Simeone told the Tribunal there was no difference between practical completion and hand-over. This evidence is in stark contract to the evidence of Mr Duncalf who carefully explained the usual industry practice as set out above.
Where these two men disagree, I prefer the evidence of Mr Duncalf. I am satisfied that Mr Duncalf gave an accurate description of the industry difference between practical completion and handover. I do not accept as opined by Mr Simeone that these events are one and the same.
Joshua Nixon was a tenant in the property from 29 February 2013, some 17 months after alleged practical completion. His uncontested evidence is that when he shifted into the property, there were numerous electrical fittings missing, including lights, an outlet for the microwave and the hot water and toilets did not function until rectified. Mr Nixon also points to other more minor but numerous defects.
It is apparent from the voluminous statements of evidence and submissions filed by both unrepresented parties that right from the beginning of this build, Mr Carter was going to be an “involved” owner/tradesman concreter and was often on site (HK Developments alleges almost daily).
Mr Carter was responsible for the concreting. This produced tension between his role as home owner and tradesman/subcontractor (a construction contract was entered into by the parties dated 11 February 2010). There were problems with the slab pour and HK Developments now blames many defects on Mr Carter’s work and his perceived continual interference both with changes to the plans on an ad hoc basis, personal direction to other subcontractors and his personal acquisition of goods for the site.
One example of this continuous interference is the uncontested evidence of Mr Jamie Rowlands[1] who was an electrical subcontractor on this property. Mr Rowlands speaks of Mr Carter’s constant interference but also of the electrical work unfinished at the time of the alleged practical completion.
[1] See the statement of Mr Jamie Rowlands dated 4 November 2013 filed by Mr Carter on
22 November 2013
HK Developments does not dispute these defects or incomplete work but says that they were caused by the inaction of Mr Carter.
On the uncontested evidence of Mr Nixon and Mr Rowlands, I am satisfied that practical completion had not been reached at the time the suspension notice was issued by HK Developments.
On 16 February 2011 Mr Carter took possession of the site by changing the locks[2]. Although Mr Carter may not have physically moved into the premises until just after that date (HK Developments says 25 February 2011), he had control of the works from the changing of the locks on 16 February 2011. If practical completion had not been reached by this date, it certainly was when Mr Carter took possession under clause 17.9 of the Master Builders contract between the parties.
[2] See locksmith invoice numbered 51 to the folio of documents filed 25 November 2013.
The deeming of practical possession under this clause (as a result of Mr Carter taking possession under this clause) is that Mr Carter is liable for any loss or damage suffered by HK Developments[3].
[3] Contract Clause 17.9.
Variations
Mr Carter submits that none of the variations are due and owing because none of them met the requirements of the Domestic Building Contracts Act 2000.
A variation under the contract (clause 12) must be written, must describe the variation identify the reason if requested by the contractor, estimate any delay in the works, and state any adjustment to the contract price (that part to be signed by the owner). The owner must pay the variation price within the time stated in the variation.
The Domestic Building Contracts Act 2000 section 80(2) also reflects these requirements.
In the main, few of the numerous variations on this build were documented in terms of the requirements of the contract [4].
[4] See the list of variations, exhibit 9 in these proceedings.
A meeting was conducted by the Master Builders Association representative Mr Duncalf to try to settle outstanding variation matters between the parties on 14 September 2010. From this meeting a variation agreement was signed by both parties[5]. The adjustment price is left as “TBA” but an extension of time on the contract is agreed at 4 weeks.
[5] Exhibit 11.
As a valid variation to the contract, this document fulfils most of the requirement of clause 12 – it is written, describes the variations, generally identifies the reason for the variations, estimates any delay in the works and is signed by both parties. It does not state any adjustment to the contract price but records that the owner must pay the variation price at the correct stage.
Although there is no final figure, each variation item is generally sufficiently costed throughout the document for the parties to be aware of their obligations.
I am satisfied that this variation document now forms part of the contract between the parties as a proper variation under clause 12 of the general conditions of the contract between them.
It is common ground that no monies have been paid by Mr Carter under this variation document.
The variations signed 14 September 2010 and three further variations signed by Mr Carter on 30 September 2010[6] form the basis of HK Developments’ suspension notice. The notice also lists a variation alleged by the builder as owing because of non-standard tile being supplied by Mr Carter although no written variation has been provided for this item.
[6] Exhibits 12, 13 and 14.
I am satisfied that Mr Carter did not remedy this breach within the time required under the notice or under the time requirements of clause 16.3 of the contract.
I am therefore satisfied that Mr Carter was in breach of the contract at the time the suspension notice was issued by HK Developments and that the suspension notice was a valid notice insofar as it relates to the contract variations.
HK Developments calculated outstanding variations in annexure “B” to its application filed 15 March 2011 at $21,793.06. While many are covered by the variation document signed 14 September 2010, not all the variations are in writing and conform to the requirements of the contract and the DBC Act. The items not reduced to writing were items 5, 6, 11 and 12. The total cost of these items is $14,138.35. For each of these items, HK Developments asserts the change was orally requested by Mr Carter. Mr Carter denies this[7].
[7] Schedule C to response, Exhibit 2.
In a statement dated 27 January 2011, Mr Ray Jankovic’s[8] uncontested evidence confirmed that ‘the owner requested the variations directly to myself onsite as per my invoice 1068’. Mr Jankovic gave evidence that Mr Carter was aggressive, argumentative, unprofessional and in general quite difficult to deal with. Mr Carter accused Mr Jankovic of stealing tiles which Mr Jankovic found to be disgraceful and denied. Mr Jankovic stated Mr Carter caused many delays by not supplying tiles on time and due to defective slab work as the concreter.
[8] See Annexure “I” to documents filed by H K Developments on 10 May 2012.
I am satisfied that Mr Carter did request the tiling variations being items 5 and 6 totalling $13,027.35.
There is no direct evidence outside of the parties found by me to support Mr Carter orally requesting items 11 and 12. The total cost of these items is $1,111.00. On the basis of the evidence set out above concerning tiling, where there is direct dispute between HK Developments and Mr Carter on the issue of requests for oral variations, I prefer the evidence of HK Developments which is generally supported by the evidence of Mr Ray Jankovic. I am therefore further satisfied that Mr Carter did request the tiling variations being items 11 and 12 totalling $1,111.00.
Section 84 (4) of the DBC Act allows a variation sought by the building contractor and not otherwise complying with the Act to be recovered if the Tribunal is satisfied that there are exceptional circumstances; the contractor would suffer unreasonable hardship; and it would not be unfair to the building owner.
I find variations 5, 6, 11 and 12 satisfy these requirements. They were requested by Mr Carter, the contractor would suffer unreasonable hardship by virtue of the amount of these variations and the conduct of Mr Carter in requesting and then denying payment in the circumstances of the evidence of Mr Ray Jankovic to Mr Carter’s conduct and demeanour in particular and of others, generally satisfies the requirement of exceptional circumstances.
Did Nathan Carter lawfully terminate the contract?
Being satisfied that Mr Carter was in breach of the contract as at 4 February 2011 and that the suspension notice issued by HK Developments was a valid notice based on the contract variations, it is not open to Mr Carter to then issue a notice to terminate (clause 20.3).
While not every breach of contract will discharge a contract, a breach will entitle the innocent party to damages and may represent a discharge of the contract if it is, in effect, repudiation by the breaching party.
There is no evidence before me to show that HK Developments took any further contractual steps to terminate the contract or to accept Mr Carter’s purported termination as a repudiation of the contract.
Instead, an application came before this Tribunal filed 15 March 2011 seeking the payment of the progress payment ($67,000) and the costs of the variations ($21,793.06) plus interest and costs.
Potentially, the filing of the QCAT application represents an acknowledgement that the contract between the parties has ended. Mr Carter in his counter-claim seeks a declaration that the contract was lawfully terminated on 16 August 2011 (the Tribunal queries if this is a mistake as the operative date appears to be 16 February 2011).
Discussion
It is common ground between the parties that by the time of the issuing of notices between them, any relationship between them was long gone. It has now reached the stage of “open warfare” and there have been personal casualties on both sides.
The evidence produced by the parties for this hearing was at best confused (despite continual assistance by the Tribunal over the period of the hearing) and, from Mr Carter, extremely detailed.
Repudiation of a contract ‘is a serious matter and should not be found lightly or inferred’[9] and the whole of the circumstances are to be considered.
[9] Smyth(Ross T) & Co Ltd v Bailey, Son & Co [1940] All ER 60 at 71; Larratt v Bankers
and Traders Insurance Co Ltd (1941) 41 SR (NSW) 215 at 223.
HK Developments was relying on the contract to suspend the works. Mr Carter was the party in breach who then moved to take possession of the works, thus deeming practical completion. HK Developments took no steps to terminate the contract or to accept any purported termination. It appeared willing to complete the contract, subject to any contractual remedy of the contract was breached by Mr Carter.
I am satisfied that any purported termination by Mr Carter was unlawful.
As deemed practical completion had been reached by Mr Carter taking possession of the property, under the contract, the progress payment of $67,000 became due and owing.
Damages
The measure of damages where there is a wrongful repudiation of a building contract is the difference between the contract price less any amounts for progress claims received and less the costs to complete the works and rectify any defective works[10].
[10] QLine Interiors Pty Ltd v Jezer Construction Group Pty Ltd & Ors [2002] QSC 088;
Chelbrooke Homes Pty Ltd v Russell & Anor [2011] QCAT 278.
Defects and Incomplete work
Under the QCAT Practice Direction No 4 of 2009, a joint report is required from the two experts where there is agreement. A conference was held in this matter and a joint report was prepared in the form of a Scott schedule.
There were 86 items considered by the experts. This high number of items reflects, again, the complexity and discord between these parties. These items are now dealt with in the schedule attached to these reasons except where the item had been closed. The parties were asked for final written submissions in relation to the Scott schedule items. The task of this Tribunal in dealing with these items was made more difficult by the disjointed presentation of the items by Mr Carter who did not follow the identified numbering of items in his submissions, despite being requested to submit on this basis.
Interest
Under section 77(2)(c) of the Queensland Building and Construction Commission Act 1991, I may award interest as prescribed by regulation from the date an amount becomes payable until it is paid. If the parties entered into a contract, interest awarded is payable at the rate specified in the contract[11]. Clause 19 of the contract schedule sets this amount at 15%.
[11] Queensland Building Services Authority Regulation 2003 s 34B.
Although the variation agreement was signed at the final meeting under the auspices of the representative of the Master Builders Association being 14 September 2010, there are various dates for the payment and implementation of the variations under that agreement.
I am satisfied that for these documented variations and for the undocumented variations listed above but accepted by me, that the fair date to calculate interest is the date of the final progress payment becoming due (when the locks were changed by Mr Carter and he took possession of the property deeming practical completion[12]) - 16 February 2011.
[12] See document numbered 51 to the folio of documents filed 25 November 2013.
Conclusion
The amounts owing under the contract to HK Developments are as follows:
Progress payment at practical completion $67,000.00
Variations $21,793.06
Subtotal $88,793.00
Set off against this total amount is monies owing to Mr Carter for costs to complete the works and rectify any defective works (as set out in Schedule A to these reasons.
They are: $35,961.00
Net Amount $52,832.00
Interest at 15% from deemed practical completion
(1244 days excluding date of decision and rounded) $27,009.45
Total $ 79,841.45
HK Developments is awarded this amount in full and final settlement of this matter.
Costs of the parties
HK Developments has applied in its application for costs. Directions will be made for the filing of submissions in this application.
Schedule “A”
Initial Comments
Both parties provided expert evidence to the Tribunal. Mr Carter employed two experts. The first was Mr Dixon who attended conclaves of experts on 23 May and 20 July 2012 with Mr Ripley. The second was Mr Dyer. His report says he was instructed by Mr Carter to carry out an inspection of the works on 31 May 2013 and at that time he reviewed the costings of the earlier reporter, Mr Dixon.
Mr Ripley provided a report for HK Developments and attended all experts’ conclaves, including the last conclave to produce the Scott Schedule (the joint report dated 9 December 2013).
At the final conclave, attended by Mr Dyer and Mr Ripley, the joint report included the expert comments from the original conclaves between Mr Dixon and Mr Ripley and the costings of Mr Dixon at that time.
In effect, this provided to this Tribunal with three sets of costings for many items and for some items, three different comments. Mr Dixon and Mr Dyer, both engaged as experts for Mr Carter, do not always agree on substance or costings and for some items, Mr Dyer for HK Developments agrees with one of Mr Carter’s experts but not the other.
This change of experts by Mr Carter mid-stream added another layer of complication to this matter.
Where the item has been closed, it is not addressed in these reasons.
Item 1 – Mismatch of coloured window frames
All experts agree that the windows installed in the theatre and guest room do not match the colours of the external walls of the room. The windows appear to need to be swapped. Mr Ripley and Mr Dixon agree on a rectification cost of $948 to remove and replace the windows. Mr Dyer estimates this cost at $3,734.
I accept the majority costing of $948 to rectify this item.
Item 2 – Timber doors
All experts agree this item is incomplete work. There is no agreement on cost. Mr Ripley provides no costings. Mr Dixon and Mr Dyer provide different costings. I will accept Mr Dyer’s costs as Mr Carter’s current expert set at $23,398.
Item 3 – Theatre room door
All experts agree this item is defective. I accept the majority costing of $328 to rectify this item.
Item 4 – Bifold door hardware
All experts agree this item is incomplete work. I accept the majority costing of $150 to rectify this item.
Item 5 – Theatre door handle
All experts agree this item is incomplete work. There is no agreement on the costing to complete this item. Mr Ripley makes the point that Mr Dyer has included adjustment of the doors (not listed as a defect). I accept this submission and award $171 to complete this item.
Item 6 – Kitchen waste 40 mm not 50mm
There is no agreement between the current experts on this item. After a review of their submissions, I accept the view of Mr Ripley for HK Developments and disallow this item.
Item 8 – Hub electronics incomplete
All experts agree this item is incomplete work. There is no agreement on the costing to complete this item. Mr Dyer’s cost is an estimate only. Mr Ripley’s costing is based on the evidence of the electrical contractor. I accept this and award $123 to complete this item.
Item 9 – Ceiling fan wiring
This item is covered by variations and based on the evidence of the electrical contractor, is installed but concealed as requested by Mr Carter. I am satisfied this item is settled.
Item 10 – Staircase switches
There is no agreement between the current experts on this item. After a review of their submissions, I accept the view of Mr Ripley for HK Developments and disallow this item.
Item 11 – Security wiring for alarms
There is no agreement between the current experts on this item. It appears to be covered by variations. After a review of their submissions, I accept the view of Mr Ripley for HK Developments and disallow this item.
Item 13 – Speaker wiring to level 1 kitchen
This item is covered by variations and based on the evidence of the electrical contractor is installed. I am satisfied this item is settled.
Item 15 – Storeroom ceiling light
There is no agreement between the current experts on this item. After a review of their submissions, I accept the view of Mr Ripley for HK Developments that the approved electrical plan does not show lighting to the store room. I disallow this item.
Item 16 – Lights to stair nooks
This is agreed as incomplete work. Mr Carter in his final submissions says he has the right to have the wiring completed. I accept this and allow $82 for this item.
Item 17 – Lights on upper level veranda
There is no agreement between the current experts on this item. After a review of their submissions, I accept the view of Mr Ripley for HK Developments that no defect exists. I disallow this item.
Item 18 – Electrical front door striker
There is no agreement between the current experts on this item. After a review of their submissions, I accept the view of Mr Ripley for HK Developments that no incomplete work exists as a variation covered this item. I disallow this item.
Item 19 – Down lights front and ground level
There is no agreement between the current experts on this item. After a review of their submissions, I accept the view of Mr Ripley for HK Developments as Mr Dyer has not taken account of the electrical plans. I disallow this item.
Item 20 – Wave in carpet pattern
This is an agreed defect. Mr Ripley and Mr Dixon agree on a rectification cost of $262. Mr Dyer estimates this cost at $616 and more if the carpets must be replaced. Neither expert shows how the costings were calculated. I accept the majority costing of $262 to rectify this item.
Item 21 – Gap between bulkhead and adjacent wall
This is agreed as defective work but there is no agreement as to the rectification costs. Mr Ripley says it is not structurally unsound as there is no proof and it has not fallen down over the last 2 years. He classifies it as normal minor building movement.
Mr Dyer says there is insufficient support requiring the unit to be reinstalled. Mr Dyer and Mr Dixon agree on a rectification by adjusting the bulkhead and re-installing the unit. I accept the majority rectification process and allow $380 for this item.
Item 23 – Front elevation butt joint
This is agreed as defective work. However Mr Carter was the subcontractor for the slab. I do not except this is the responsibility of HK Developments and will disallow this item.
Item 24 – Upper level dining room wall lights
Mr Dyer wants to raise all lights from eye level to be appropriate as picture lights. Mr Ripley says only one light needs adjusting to confirm to the other three as there are no specific heights nominated in the electrical plan for these lights. The light fittings were chosen by Mr Carter.
I accept Mr Ripley’s costing of $205 to rectify this item.
Item 26 – Upper level veranda light conduit
This is agreed as neither incomplete nor defective work. I disallow this item.
Item 29 – Damage to ensuite spa bath
All experts agree there is a chip to the spa bath. Mr Ripley comments this defect was not recorded in Mr Carter’s original building report from Metropolitan.
I am not satisfied there is sufficient evidence to show this is the responsibility of the builder. I disallow this item.
Item 30 – Exposed wire to spa bath
This is agreed as defective work. Both experts agree on the rectification costs of $170.
Item 31 – Leaking pipe work to spa
This is agreed as defective work. This was tested by Mr Ripley and a defective O ring was found. Mr Dyer did not independently test. I accept the view of Mr Ripley for HK Developments and allow $92 for rectification of this item.
Item 32 – Water egress from shower
Mr Dyer reports this as defective work under the Building Code of Australia. Mr Ripley believes it conforms with the Australian standards for unenclosed showers. HK Developments submissions on this item are that Mr Carter requested there be no shower screen and that in these circumstances some splashing would be normal. HK Developments says no shower screen is shown in the signed plans and signed variation list.
I accept these submissions and the opinion of Mr Ripley. I disallow this item.
Item 34 – Incomplete sealing internal panel doors
It is agreed that the non-painting of the tops and bottoms of the doors is defective work. Mr Dyer’s costings involve removal of the door to repaint. Mr Dixon wanted to replace the doors completely to gain warranty protection. Mr Ripley says Mr Dyer’s costings involve extra painting and a door adjustment.
I accept the top and bottom of the doors requires rectification. I allow $696 for this work.
Item 35 – Timber colour mismatch
Mr Ripley and Mr Dixon agree this was a personal choice item and not a defect. Mr Dyer passes no opinion - just gives costings. I accept this work is not defective and disallow this item.
Item 37 – Installation nailheads
It is agreed that the incorrect nails have been used. Mr Dyer would replace the whole deck as he believes the nails are only steel at a cost of $7,224.00 Mr Dyer says that the T nails used are either galvanised or stainless steel as required the satisfy the performance aspect of the Australian Building Code and that there is no defect apparent.
I accept the view of Mr Ripley for HK Developments that the nails are of sufficient quality and disallow this item.
Item 38 – Upper level dining – floor gapping and filled nail heads
This is no agreement as defective work. Mr Dyer says gaps are evident possibly due to shrinkage although he expresses no firm view on this. Mr Dyer costs rectification at $4,536, including re-sanding, re-sealing and filling gaps. Mr Ripley does not accept as defects saying seasonal changes and gaps appearing are inherent in a natural product. He opines the flooring meets Australian standards.
Mr Carter in his submissions called this an “aesthetic defect” causing loss of value.
I accept the view of Mr Ripley for HK Developments and disallow this item.
Item 39 – Skirting above carpet height
This is agreed as defective work. Both experts agree it will cost $14.00 if rectified with item 20. I accept this costing as concurrent with item 20 and allow of $14.00 to rectify this item.
Item 40 – Roof insulation
Neither expert passes an opinion on this matter except to say that roof insulation is confirmed as R3 by Mr Ripley and R1.8 by Mr Dyer. Mr Carter classifies this alleges defect as minor. HK Developments says the insulation meets energy efficient requirements.
I accept the view of HK Developments as Mr Ripley opines the building has passed all build certification requirements and disallow this item.
Item 41- Upper level rafter nails
This is agreed as defective work. The experts agree on a cost of $228 to rectify this item and I accept this amount.
Item 42 – Upper level fireplace installation and flue
This is agreed as defective work. The experts agree on a cost of $1,170 to rectify this item and I accept this amount.
Item 43 – Incorrect fasteners
This is agreed as defective work. The experts agree on a cost of $249 to rectify this item and I accept this amount.
Item 44 – Window screw holes
This is agreed as defective work although the experts do not agree as to the reason for the defect. However, they do experts agree on a cost of $334 to rectify this item and I accept this amount.
Item 45 – Balustrade loose fasteners
This is agreed as defective work. The experts agree on a cost of $304 to rectify this item and I accept this amount.
Item 46 – Upper level veranda balustrade not symmetrical
There is no agreement between the current experts on this item. Mr Dyer opines the balustrades do not align leaving an ascetically displeasing appearance. He does not say if is a building defect.
Mr Ripley does not accept it as a defect and states the balustrades were installed by a sub-contractor nominated by Mr Carter. I do not accept this item as defective.
Item 47 – timber architrave to bed one
This is agreed as defective work. The current experts agree on a cost of $114 to rectify this item and I accept this amount.
Item 48 – timber rafter overhang
All the experts agree that the plans show an original 600mm rafter overhang. Mr Ripley opines this is a variation covered by the agreement negotiated between the parties. Mr Dyer makes no comment on a variation agreement. On examination of the variation document accepted by me, there is reference to 2 rafters of the frame being moved at the owner’s request.
I accept the view of Mr Ripley for HK Developments and disallow this item.
Item 49 – Dimmer switches theatre room
It is agreed by Mr Dixon and Mr Ripley as no defect. Mr Ripley says these dimmer switches are not shown on the electrical plan. Mr Dyer simply gives rectification costs without opining whether this is a defect.
I accept the majority view of Mr Ripley and Mr Dixon, noting Mr Dyer passes no opinion. I disallow this item.
Item 52 – Front entry two way switch
This is agreed as defective work. The current experts agree on a cost of $194 to rectify this item and I accept this amount.
Item 53 – Crystals in theatre room light
This is agreed as incomplete work work. However, Mr Ripley says all light fittings were to be provided by Mr Carter. The statement of Jamie Rowlands dated 4 November 2013 (in his response to the notes of the joint expert’s conclave) states the crystals were supplied and left in a storage room but that no allowance had been made for the installation of over 100 crystals.
I do not accept this item as the responsibility of the builder and I disallow this item.
Item 55 – No first flush converter
Mr Dyer cannot see a requirement in his review of the hydraulic plans for the installation of these converters. Mr Ripley agrees and says this is not a defect. I accept these opinions and I disallow this item.
Item 57 – External hose cocks
It is agreed that only 2 of 3 taps allowed for in the inclusions have been provided. However Mr Ripley points to the major changes to the position of the water tanks by Mr Carter in relation to the original plans.
Taking both opinions and costings into account, I accept the tap is to be supplied but allow the amount at Mr Ripley‘s costings of $150 to complete.
Item 58 – Guest room basin plug
There is disagreement as to whether this is a defect. Both experts tested the plug and the results were different for each. I accept there may be a fault and allow the cost of replacing the seal at $5 to rectify this item.
Item 59 – External patio cracked tiles
This is agreed as defective work. The current experts do not agree on rectification cost. HK Developments says the tiles were not cracked when Mr Carter took possession of the works and blames the slab laid by Mr Carter for any cracked tiles now. I accept the tiles are to be replaced but do not accept that either side is to be blamed in this matter. I accept the view of Mr Ripley for HK Developments and allow $358 for this item.
Item 60 – External patio tiles overhang
This is agreed as incomplete work. However Mr Ripley points to the evidence of the tiles saying Mr Carter did not provide sufficient tiles to complete the works. I accept Mr Ripley’s submission and award $122 to complete this item.
Item 61 – No sealant to external patio tiles overhang
This item follows on from item 60 and is agreed as incomplete work. I have accepted Mr Ripley’s submissions saying Mr Carter did not provide sufficient tiles to complete the works. I accept Mr Ripley’s costings of $97 to complete this item.
Item 62 – Internal tiled stairs tread wider
This is agreed as defective work. Having reviewed the opinions of Mr Ripley and Mr Dyer on this item, I accept the tread is outside the Building Code tolerance levels and allow $192 to rectify this item.
Item 63 – Ground floor WC chipped tile
All experts agree this item is defective. I accept the current experts’ costing of $358 to rectify this item.
Item 64 – Rear elevation external wall
This is an agreed defect but there is no agreement as to the rectification costs. Mr Dyer costs the rectification as requiring scaffolding. Both HK Developments and Mr Ripley disagree saying the scaffolding is not necessary as the panels requiring rectification are at ground or lower level heights.
Mr Dyer does not comment on the reason why scaffolding is required. Without this cost, the experts are very close on rectification costs. Mr Dixon says that 15 panels require replacing. Mr Ripley says 3 to 4. Mr Dyer does not nominate the numbers.
I am unable to form a firm conclusion other than there is rectification required. I will accept the lower figure of Mr Ripley and allow $352 for this item.
Item 65 – Laundry pluming duct
There is no agreement between the current experts on this item. Mr Ripley does not accept this item as a defect. He says there are no specified sizes on the approved plans and it is considered normal industry practice to create voids for drainage stack pipes.
Mr Dyer says the area is oversized but he is not in a position to confirm the location of the pipes behind the boxing. Mr Dixon opined it as a defect but because of a loss of cupboard.
Not unexpectedly, Mr Carter agrees with Mr Dyer and HK Developments with Mr Ripley. Having considered the submissions, I accept the view of Mr Ripley for HK Developments as Mr Dyer is not able to confirm the position of the pipes. I disallow this item.
Item 66 – Wide pantry shelving
There is no agreement between the experts on this item. Mr Ripley does not accept this item as a defect. He says the actual measurements are 440mm not 600 as claimed by Mr Dyer and refers to the general notes of the approved plans where dimensions take precedence over scaled dimensions.
Mr Dyer says the width is 600mm when it should have been 300mm. He costs rectification at $676.
Mr Carter agrees with Mr Ripley that you should not scale plans and that the applicant should have sought clarification on shelf size.
Because of the scaling issue, I accept the view of Mr Ripley for HK Developments and disallow this item.
Item 67 – Robes not position as per plan
There is no agreement between the current experts on this item. Mr Ripley and Mr Dixon do not accept this item as a defect and say they are positioned according to the plan. Mr Dyer disagrees saying they are not positioned as per the drawings.
I accept the majority expert’s view and do not accept this item as defective.
Item 68 – Front veranda roof
There is no agreement between the current experts on this item. Mr Ripley does not accept this item as a defect. Mr Ripley again refers to the general notes of the approved plans where dimensions take precedence over scaled dimensions. Mr Dixon in his report (Exhibit 26) notes this as a defect without giving a reason.
I accept the majority expert’s view and accept this item as defective. I allow $2,837 for costs of rectification.
Item 69 – Internal timber stairs handrail
This is agreed as incomplete work. There is no agreement on the costing to complete this item. Mr Dyer’s costing is detailed. Mr Ripley’s costing is based on the evidence of the builder. I accept Mr Dyer’s costing and award $1,308 to complete this item.
Item 70 – Door handles to bi-fold doors
This is agreed as incomplete work. Both current experts agree on the rectification costs of $144.
Item 71 – Void underside of stairs
There is no agreement between the current experts on this item. In written and oral evidence, there was confusion between the experts on the exact location of this item.
I am not satisfied there is sufficient evidence to allow a decision on this item and I disallow it.
Item 72 – Rangehood not ducted externally
There is no agreement between the current experts on this item. Mr Ripley says the contract documentation does not detail or specify the exhaust to be ducted externally. Most are recommended this way, but it was not a requirement at the time of construction.
Mr Dyer says he is not in a position to confirm.
I accept the view of Mr Ripley for HK Developments and disallow this item.
Item 75 – Void underside of stairs
There is no agreement between the current experts on this item. In written and oral evidence, there was confusion between the experts on the exact location of this item.
I am not satisfied there is sufficient evidence to allow a decision on this item and I disallow it.
Item 76 – No cover to HWS pipes
There is no agreement between the experts on this item. After a review of their submissions, I accept the view of Mr Ripley for HK Developments that no defect exists as a covenant covers this item. I disallow this item.
Item 78 – No clothes line
This is agreed as incomplete work. Both current experts agree on the rectification costs of $250.
Item 79 – No accessory pole
This is agreed by Mr Dixon and Mr Ripley as no defect. Mr Dyer does not comment. I disallow this item.
Item 80 – Excessive step down form floor to external ground
There is no agreement between the current experts on this item. Neither Mr Ripley nor Mr Dyer in the last joint report opine this is a defect – but for different reasons. Having considered these submissions, I disallow this item.
Item 81 – No letter box
This is agreed as incomplete work. Both current experts agree on the rectification costs of $100.
Item 82 – No sealant in kitchen junction
This is agreed as incomplete work. Current experts cannot agree on the time involved in rectification. In oral evidence, Mr Ripley estimates a half to one hour. Mr Dyer estimates one hour. On balance, I will allow an hour and set the rectification costs at $76.
Item 83 – Front elevation patio edge
There is no agreement between the current experts on this item. Mr Dyer, in the last joint report, opined this as a defect with a rectification cost of $445.
Mr Ripley disagrees saying the concrete is part of the owner contracted works and part of the issue is the slab edges not aligning with the tile edges.
I do not except this is the responsibility of HK Developments and will disallow this item.
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