Holman and W and D Moffatt Pty Ltd
[2015] WASAT 100
•9 SEPTEMBER 2015
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
CITATION: HOLMAN and W & D MOFFATT PTY LTD [2015] WASAT 100
MEMBER: MR C RAYMOND (SENIOR SESSIONAL MEMBER)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 9 SEPTEMBER 2015
FILE NO/S: CC 1736 of 2014
BETWEEN: IAN EDWARD HOLMAN
Applicant
AND
W & D MOFFATT PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution & Administration) Act 2011 (WA) Application by applicant builder in review proceedings to join engineer and plumbing contractor Whether joinder appropriate having regard to legislative scheme Whether power to join a party is available in review of decision of Building Commissioner Whether an issue estoppel would operate so as to avoid multiplicity of proceedings
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 3, s 5(1), s 11(1)(d), s 38, s 54, s 55, s 57(1)(c)
Building Services (Registration) Act 2011 (WA), s 3
Building Services (Registration) Regualtions 2011 (WA)
State Administrative Tribunal Act 2004 (WA), s 9, s 9(a), s 9(b), s 27(1), s 29(1), s 38, s 51
Victorian Civil and Administrative Tribunal Act 1998 (VIC), s 60
Result:
Application for joinder refused
Summary of Tribunal's decision:
The applicant builder applied to join an engineer engaged by it and its plumbing subcontractor to review proceedings arising from a complaint against the applicant by the respondent in relation to the construction of a dwelling for the respondent. The respondent asserted that significant cracking had occurred as a result of subsidence in the footings of the dwelling.
The Tribunal had regard to the scheme of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and concluded that it would be inconsistent with that scheme and the objects of the Tribunal to act speedily and minimise the costs to the parties to allow joinder and that joinder is not a power available in the review of the decisions of the Building Commissioner.
In any event, the Tribunal considered the basis upon which joinder was sought and concluded that no issue estoppel would arise out of the current proceedings and therefore joinder would not avoid a multiplicity of proceedings.
The application for joinder was dismissed.
Category: B
Representation:
Counsel:
Applicant: Mr J T London
Respondent: Mr A Prime
Solicitors:
Applicant: Macdonald & Rudder
Respondent: MDS Legal
Case(s) referred to in decision(s):
Anderson v Economo [2000] VCAT 434
Blair v Curran (1939) 62 CLR 464
Bradshaw v McGuire (unreported, WASC, Library No 6260, 30 April 1987)
Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294
Gregor v Victoria [2000] VCAT 414
Henley Arch Pty Ltd v Hannagan [1999] VCAT 29
Kuligowski v Metrobus (2004) 220 CLR 363
Lawley v Terrace Designs Pty Ltd [2004] VCAT 1825
LU Simon Builders Pty Ltd v Lubeca Systems Australia Pty Ltd [2002] VCAT 10
Mustac v Medical Board Of Western Australian [2007] WASCA 128
Roscon Developments Pty Ltd v Buckerfield Pty Ltd [2006] VCAT 2296
Snowden Developments Pty Ltd v Actpen Pty Ltd [2005] VCAT 2910
REASONS FOR DECISION OF THE TRIBUNAL:
The proceedings
The applicant has applied to the Tribunal pursuant to s 57(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) for the review of a building remedy order issued by the Building Commission. The review is by way of hearing de novo and is not restricted to the evidence which was before the Building Commissioner: s 27(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
The applicant has constructed a dwelling for the respondent at 5 Maher Street, Somerville, Kalgoorlie. The respondent lodged a complaint with the Building Commission concerning an extensive degree of cracking of a number of walls in the dwelling, which complaint was made pursuant to s 5(1) of the BSCRA Act. This provision enables a complaint to be made to the Building Commissioner about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory.
A regulated building service is defined, relevantly, to be a building service carried out by a registered building service provider, which in turn is defined to have the meaning given in s 3 of the Building Services (Registration) Act 2011 (WA) (BSR Act). The BSR Act s 3 defines this term as meaning either a building service practitioner, or a building service contractor. Read with relevant provisions of the BSR Act and the Building Services (Registration) Regulations 2011 (WA) a regulated building service provider is restricted to building practitioners, who carry out building work, building surveying practitioners of various classes, painting practitioners and contractors in corresponding fields. Accordingly, the BSCRA Act permitted the respondent to make its complaint only against the applicant.
The materials provided to the Building Commissioner and further materials filed in the review proceedings, raise issues concerning the cause of the cracking, which relate to the engineering drawings for the dwelling prepared by an engineering firm, Duncan Jack Consulting Engineers Pty Ltd ACN 118 485 822 as trustee for the Jack Family Trust of Ron Mosby and Associates (the engineer) and plumbing works carried out by a Mr Russell James Baker (the plumber).
The applicant has applied to the Tribunal for the joinder of the engineer and plumber in the proceedings asserting that their joinder would avoid a multiplicity of proceedings because they would then be bound by any decision of the Tribunal.
The power to join
Section 38 of the SAT Act states:
Joining person as party to proceeding
(1)The Tribunal may order that a person be joined as a party to a proceeding if the Tribunal considers that
(a)the person ought to be bound by, or have the benefit of, a decision of the Tribunal in the proceeding; or
(b)the person's interests are affected by the proceeding; or
(c)for any other reason it is desirable that the person be joined as a party.
(2)The Tribunal may make an order under subsection (1) on the application of any person or on its own initiative.
Section 60 of the Victorian Civil and Administrative Tribunal Act 1998 (VIC) (VCAT Act) is in identical terms to s 38 of the SAT Act. There have been many decisions of the Victorian Civil and Administrative Tribunal (VCAT) dealing with joinder, as fully set out in Pizer's Annotated VCAT Act, JNL Nominees Pty Ltd (3rd ed, 2007) which reflects that VCAT has applied the following principles relevant to this matter:
•The power to join a person as a party is both conditional and discretionary.
•The power is conditional in the sense that it may not be exercised until the Tribunal is satisfied that at least one of the conditions set out in the provision has been met.
•The power is discretionary in the sense that the Tribunal may refuse to exercise it even if it is satisfied that at least one of those conditions has been met.
•In relation to the above principles see: Gregor v Victoria [2000] VCAT 414.
•It is a serious matter to join a party to a proceeding: Snowden Developments Pty Ltd v Actpen Pty Ltd [2005] VCAT 2910 at [17] and the power is accordingly not to be exercised lightly: Lawley v Terrace Designs Pty Ltd [2004] VCAT 1825 at [26].
•A person may be joined as an applicant or a respondent to a proceeding: Henley Arch Pty Ltd v Hannagan [1999] VCAT 29; or as a 'joined party' or 'interested party': LU Simon Builders Pty Ltd v Lubeca Systems Australia Pty Ltd [2002] VCAT 10; and there is no requirement that the joined party must be seeking any claim or relief from the proceeding nor is there any requirement that any claim or relief be sought against the joined party: Roscon Developments Pty Ltd v Buckerfield Pty Ltd [2006] VCAT 2296 at [10].
•The provision is a purely procedural one and does not authorise the grant of relief for or against the party jointed: see Anderson v Economo [2000] VCAT 434 at [33].
I accept that all of the above principles apply to the current application for joinder.
The grounds for joinder
The applicant refers to the engineer and plumber together as the third parties and for convenience that form of description will be adopted by the Tribunal as well.
The applicant submits that the third parties should be joined so that they will be bound by the decision.
It is submitted for the applicant that if it were otherwise, if the Tribunal found the third parties were negligent, the applicant would have to commence separate common law proceedings against the third parties to prove this 'fact' again and face the very real risk that the court would reach a different conclusion. Further it is submitted that the claim against the third parties could become statute barred before a decision is made in the Tribunal which would be manifestly unjust and contrary to the objective of the Tribunal under s 9(a) of the SAT Act, which requires that the Tribunal resolve the complaints and review decisions fairly according to the substantial merits of the case.
It is further submitted that it is a fundamental rule of procedural fairness that all necessary parties be joined to proceedings so that all issues in controversy may be determined in the same proceeding and that both the BSCRA Act and the SAT Act discourage a multiplicity of proceedings-referring to s 54 and s 55 of the BSCRA Act and s 51 of the SAT Act. It is added that a multiplicity of proceedings would increase the costs for all parties and the court which is contrary to the objective of the Tribunal under s 9(b) of the SAT Act to minimise the cost of the parties.
It is then submitted that if the Tribunal found that either third party was at fault the decision would bind the third party and there would be no need for the applicant to in effect relitigate the issue.
As it is common cause between the parties that the applicant was responsible for the design of the dwelling, the Tribunal drew to the attention of the parties the decision of the West Australian Full Court in Bradshaw v McGuire (unreported, WASC, Library No 6260, 30 April 1987) (Bradshaw) in order to permit further submissions to be made as to the effect of that decision. Both parties filed further submissions dealing with the effect of Bradshaw, with the applicant concluding that the onus remains with the owner/respondent to demonstrate the cause of the faulty work. It is submitted that this is the precise aspect of the Tribunal's eventual decision which the applicant wants to be binding on the third parties. It is submitted that Bradshaw demonstrates the importance of the joinder to ensure that the engineer and the plumber are bound by the decision.
The essence of the respondent's submissions is that it does not allege that either the builder or plumber were negligent, its case is that the sapping of the footings as a result of a stiffening beam (as designed by the engineer) being either omitted by the applicant or not being properly carried out by the applicant (i.e not contracted in accordance with the engineer's design), that this constitutes the carrying out of a regulated building service by the applicant not in a proper or proficient manner, or which is faulty or unsatisfactory on the principles discussed in Bradshaw.
Consideration
The BSCRA Act permits a complaint to be made only against the relevant registered building service provider in the circumstances of the current matter. It does not permit complaints to be made against subcontractors or other agents engaged by the registered building service provider: see the definition of regulated building service with reference to home building works (s 3 BSCRA Act) which expressly excludes a complaint relating to work carried out for a person who is in turn obliged to perform the work under another contract. When regard is had to the scheme of the BSCRA Act read as a whole, the intention of the legislature is to provide an expeditious form of dispute resolution in relation to which the Building Commissioner will investigate the complaint, determine the most appropriate way with which to deal with it, which in the case of more complex matters, includes determining that the matter be referred to this Tribunal. If the Building Commissioner decides to deal with a complaint himself and makes an order, relevantly, under s 37 of the BSCRA Act there is a right of review by the Tribunal. That is what has occurred in this case. On review the Tribunal has the functions and discretions corresponding to these exercisable by the decision-maker in making its reviewable decision: s 29(1) of the SAT Act.
The relevant statutory criteria for liability is simply whether the regulated building service was not carried out in a proper and proficient manner or is faulty or unsatisfactory. The relevant power granted to the Tribunal under s 38 of the BSCRA Act, if 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 and unsatisfactory, is to make one of the orders permitted under s 36 of the BSCRA Act against the person who carried out the regulated building service.
When regard is then had to the objectives of the Tribunal, as set out in s 9 of the SAT Act to deal with the substantial merits of the building services complaint, and to act as speedily and with as little formality and technicality as is practical to minimise the cost to the parties in the proceedings, that is a factor which militates against the joinder of other parties against whom the regulated building service provider, but not the complainant, might have a claim under the BSCRA Act.
The Tribunal's objectives require that it minimise the costs to the parties in the proceedings before it and joinder of additional parties will certainly not reduce the costs for the respondent.
Based on the principles expressed in Bradshaw the respondent has a confined statutory basis upon which the liability of the applicant can be determined. The procedural preparation of the case and the time it will take to get to a hearing will change markedly if joinder is allowed.
There may be cases in which a person wishes to be joined in order to defend allegations involving that person or in which it can be readily identified that the basis upon which the case had been put is such that issue estoppels would operate that are likely to avoid a multiplicity of proceedings, and most importantly it can be adjudged that joinder will not cause any significant delay in the conduct of its proceedings. This is not such a case. The respondent does not allege negligence against either of the third parties. Any issue estoppel would therefore not be conclusive in any common law proceedings. Further the applicants Minute of Consent Orders describes that the plumber has no fixed address. Service is likely to be an issue. The joinder will inevitably delay the proceedings.
It is likely to be a rare case that joinder of agents for the regulated building service provider would be justified having regard to the scheme of the BSCRA Act and the statutory objects of the Tribunal even when the Tribunal is exercising original jurisdiction as a result of a complaint being referred to it by the Building Commissioner under s 11(1)(d) of the BSCRA Act. But, in a review of a decision of the Building Commissioner to issue a building remedy order in the exercise of his powers under s 37 if the BSCRA Act, as in this case, the Tribunal must identify the powers and discretions that rested with the Building Commissioner and can only exercise those powers and discretions: see Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294 and the authorities there cited. The Building Commissioner had and has no power to join parties to a complaint. This is fatal to the application. For the above reasons I decline to order joinder of the parties.
In case this conclusion is wrong I shall consider whether joinder might otherwise be appropriate.
Will a multiplicity of proceedings be avoided
As I understand the applicant's position a multiplicity of proceedings would be avoided because the Tribunal would make findings of fact or law which would bind the engineer and plumber, so that if they did not acknowledge liability, they would be issue estopped from putting in dispute the findings made by the Tribunal.
For an issue estoppel to operate the following criteria must be satisfied:
a)the same question must have been decided;
b)the decision which is said to create the estoppel must be final; and
c)the parties to the decision or their privies must be the same persons as the parties to the proceedings for which the estoppel is raised or their privies: Kuligowski v Metrobus (2004) 220 CLR 363 at [373].
I accept that criteria (b) and (c) above would be met if the third parties were joined and subsequently proceedings were commenced against them in a court of competent jurisdiction.
The determinative issue is whether the same question must have been decided.
It is necessary to have regard to the parties respective statements of issues, facts and contentions (SIFC) filed in the proceedings to determine what questions will have to be decided by the Tribunal and then make an assessment whether the same questions would have to be determined if the proceedings were commenced in court.
As already pointed out the statutory criteria for liability are limited to whether work is faulty or unsatisfactory or has not been carried out in a proper and proficient manner.
The respondent's SIFC asserts at paragraph 49 in effect that:
a)ample evidence has been found to support the view that, as part of the process of building, the applicant has permitted the areas where plumbing was installed to be sufficiently softened, and that local settlement occurred causing damage to the walls above the disturbed soil;
b)that if the edge stiffening of the slab had been executed as per the engineer's detail, differential movement adjacent to the kitchen window and at the laundry window would not have occurred and that accordingly either the internal thickening shown (which must mean shown in the engineering drawings) was insufficient or not implemented and that the linking of the external beam to the slab to create a 400 millimetre thickening using Z shaped ligatures was not properly constructed.
It is specifically alleged at paragraph 39 of the respondent's SIFC that the cracking throughout the property has been caused by the builder's failure to carry out the building works in a proper and workmanlike manner, or because the building works are faulty or unsatisfactory.
The applicant requested further particulars concerning the respondent's allegations of deficiencies in the design of the footings and concerning the allegation that the plumbing works had contributed to or caused foundation sapping. The Tribunal made orders in respect of the provision of those particulars on 23 June 2015 and 8 July 2015.
The respondent filed further submissions in the matter, as it was invited to do in respect of the Bradshaw decision, on 3 August 2015. Attached to the submissions were email communications from the respondent's expert consulting engineers dated 8 and 9 July 2015, respectively. These documents are understood to be the particulars requested and the submissions appear to reflect a change in the position of the respondent, based on the particulars furnished.
The applicant's SIFC does not contain any allegations which support the joinder application. In respect of the allegations concerning the engineer, it is denied that the stiffening beams are ineffective. Nothing is said in relation to the plumbing. This is perhaps not surprising because the SIFC is responsive to the respondent's SIFC. Consequently regard must be made to the applicant's submissions in support of the joinder application. It was specifically agreed for instance that the Tribunal should accept that it is part of the applicant's case that the plumber should have carried out any compaction, which might have been necessary, after the plumbing works had been completed.
It must be said that the form of the SIFCs filed by both parties do not ideally define the issues. This is in part because the respondent has defined the issues by repeating assertions made in the grounds for the application for review which quite unnecessarily point to errors alleged to have been made by the Building Commissioner. This was unnecessary because there is a right of review to be conducted as a hearing de novo, so that error on the part of the original decision-maker is not relevant. The situation has further been compounded by the form in which the further particular's appear to have been provided. I envisage that both parties will need to be given the opportunity to further amend their respective SIFCs.
In the circumstances I consider that it is appropriate to have regard to the respondent's further submissions filed on 3 August 2015 as indicating the basis on which the respondent intends to advance its case.
The respondent submits at paragraph 12 of its submissions that its consultant engineer has stated that as part of the process of building, the applicant builder has permitted the areas where plumbing was installed to become sufficiently softened, and that local settlement occurred causing damage to the walls above the disturbed soil.
In paragraph 13 of the submissions, the respondent submits that the obligation to ensure the areas were properly compacted and, following any plumbing works, had not become softened is an obligation upon the builder and not the plumber.
The submissions repeat that the internal thickening (of the edge beam) was insufficient or not implemented, and that the linking of the 'external' beam to the slab was not properly constructed (paragraph 14).
It is then submitted in paragraph 15 that neither the respondent, nor its expert, suggest that the design itself by the applicant's engineer was inadequate. This appears to be inconsistent with the preceding submission but is consistent with what I understand to be the further particulars furnished. The respondent's engineer's view is summarised in the last paragraph of the email dated 8 July 2015 as follows:
In the event that the edge beam was cast with the slab integrally as shown and required and intended by Duncan Jack (the applicant's engineer), the disturbance of soil beneath the edge beam to permit installation of plumbing would not create the possibility of local edge settlement as full reliance on the nearest raft stiffening beams at right angles to the edge beam to resist the settlement of the edge into the softened area could be made. If the reinforcement in the stiffening beam was appropriately located and the beam was constructed of the correct proportions, the chances of this permitting the edge to drop down locally, as has occurred, would be obviated.
As I read these 'particulars' the respondent's case is no longer that the internal thickening of the edge beam shown was insufficient. It is that the slab, footing and stiffening beams have not been constructed in accordance with the engineering design.
This understanding of the respondent's cases is reinforced by the submission set out in paragraph 17, to the effect that the respondent does not claim that the engineer was negligent but that the sapping was as a result of the stiffening beam being either omitted or not being properly 'carried out' by the applicant.
It is further submitted that the respondent does not claim that the plumber was negligent but that the footing sapping 'around the plumbing' was as a result of the applicant's responsibility to compact the area, if necessary, after the plumber had installed the plumbing.
In my view, the respondent has gone further than it needs to in relation to subsidence allegedly caused by the plumbing works. The effect of the Bradshaw decision is that in cases where a builder is responsible for the design and, in effect, therefore contracts to achieve a result, namely to provide a dwelling which is fit for purpose, the builder will be liable for any defect in the dwelling even where the design has been properly followed. That was a relevant consideration when, and if it is still the case contrary to my above understanding, it was being alleged that the engineers design was ineffective. The case also refers to the principle that the builder is responsible to the building owner for faulty workmanship carried out by subcontractors so it does not matter whether it was the responsibility of the builder or the subcontractor to ensure that any instability caused by the plumbing works was addressed. The overall responsibility sits with the builder. If I understand the applicant correctly, it is simply asserting, that it wishes to be able to recover from the third parties if the applicant is held liable, so that the principles expressed in Bradshaw are not, as I understand it, in issue.
In these circumstances the relevant findings which it is necessary for the Tribunal to make, in order that the applicant be held liable, are that:
•on engineering principles it can be concluded that the edge beam was not integrated with the floor slab but was separated from it and/or the raft stiffening beams were not located as provided for by the engineering design, because if they had been properly integrated and positioned in accordance with the design, it would not have been possible for the edge to drop down causing the cracking;
•that the destabilising of the soil in the area in which plumbing works were carried out created the situation which enabled the edge to drop down; and
•as a result, the works were faulty or unsatisfactory, or not carried out in a proper or proficient manner.
Will these findings give rise to an issue estoppel in subsequent proceedings commenced in a common law court?
Any common law proceedings will have to be based on an alleged breach of a contractual obligation to exercise due care and skill or on a negligent breach of a duty of care in tort. On either basis that will require evidence to be lead and findings made about the standard to be expected of a competent engineer and plumber.
In my view, the findings made by the Tribunal, will not give rise to an issue estoppel. An issue estoppel in respect of issues of fact can only arise in respect of ultimate facts or issues in contention. The doctrine does not apply separately and discreetly to subsidiary facts, found as part of a process in the chain of ultimate fact finding: see Mustac v Medical Board Of Western Australian [2007] WASCA 128 at [58] where his Honour Martin CJ after setting out the above mentioned principles referred to the observations made by Dixon J in Blair v Curran (1939) 62 CLR 464 at [532]:
In the phraseology of Lord Shaw, 'a fact fundamental to the decision arrived at' in the former proceedings and 'the legal quality of the fact' must be taken as finally and conclusively established (Hoystead v Commissioner of Taxation … ). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion.
In my view, a finding that the plumber carried out works which affected the stability of the nearby soil is a finding in respect of an evidentiary fact, not an ultimate fact.
As stated above, as I understand the respondent's case, it is no longer contended that the design of the slab, footings or stiffening beams were inadequate. The case is that the applicant did not carry out this aspect of the works in accordance with the design. There is therefore no case for joinder of the engineer. If I have misunderstood the respondent's case, it would be necessary for the Tribunal to find that the design was inadequate and contributed to or caused the sapping of the footings and to this extent an issue estoppel would, I think, operate. If the initial basis for my refusing to order joinder were held to be wrong, it would in this circumstance be appropriate to order the joinder of the engineer. For the sake of completeness I add that I do not consider that it is relevant that claims against the builder or plumber might become time barred. That is a concern easily cured by the commencement of proceedings in a court of competent jurisdiction and if need be, by then applying for the proceedings to be stayed, if it is the case that a determination of the Tribunal is likely to have the effect of resolving those proceedings.
Conclusion
For the reasons given above I do not consider that it is appropriate to make an order joining either of the third parties. Joinder would be inconsistent with the scheme of the BSCRA Act and the objects of the Tribunal to act speedily and minimise costs to the parties and is not a power available in these review proceedings. In any event, no issue estoppel will arise out of the current proceedings and therefore joinder will not avoid a multiplicity of proceedings.
Order
The Tribunal will accordingly cause an order to issue as follows:
1.The application for joinder of Duncan Jack Consulting Engineers Pty Ltd ACN118485822 as trustee for the Jack Family Trustee of Ron Mosby and Associates and Russel James Baker is refused.
2.The matter is listed for a further directions hearing on 29 September 2015 at 11 am.
I certify that this and the preceding [51] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR SESSIONAL MEMBER
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