Hunter v West Coast Building Services Pty Ltd - [2004] WADC 104

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: HUNTER & ANOR -v- WEST COAST BUILDING SERVICES PTY LTD [2004] WADC 104

CORAM: BLAXELL DCJ

HEARD: 30 APRIL 2004

DELIVERED : 24 MAY 2004

FILE NO/S: CIVO 7 of 2003

BETWEEN: BRIAN JAMES HUNTER
CARROL CHRISTINE HUNTER
Appellants
AND
WEST COAST BUILDING SERVICES PTY LTD
Respondent

Catchwords:

Appeal - Appeal from decision of Building Disputes Tribunal - Defects in construction of home extension - Order to Remedy only partially complied with - Order for payment of costs substituted - Whether or not order for payment of costs was adequate - A "broad brush" approach taken to the merits of the appeal

Legislation:

Builders Registration Act 1939 (as amended) s12A

Result:

Appeal partially allowed: Order for payment of compensation made in addition to order for payment of costs

Representation:

Counsel:

Appellants: Mr M D Cuerden
Respondent: Ms K V Whitehead

Solicitors:

Appellants: Tottle Partners
Respondent: Godfrey Virtue

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

Watson v Wallington [1999] WADC 84

Case(s) also cited:

Nil

BLAXELL DCJ: This is an appeal from the decision of the Building Disputes Tribunal on 19 November 2002 ordering the respondent to pay to the appellants the sum of $11,971. The appellants seek to set aside this order and to substitute an order requiring the respondent to pay to the appellants the sum of $60,595 or alternatively the sum of $39,875.
The appellants have already been granted leave to appeal pursuant to s 41 of the Builders Registration Act 1939 as amended ("the Act").

The nature and history of the dispute

At all material times the appellants have been the owners of the house property situated at Lot 265 Murex Way, Sunset Beach near Geraldton. On 4 August 1999 they entered into a contract with the respondent whereby the latter was to construct an upper floor extension to the house in accordance with certain plans and specifications and for a price of $121,300.
Following practical completion of the project there were a number of defects in construction which necessitated attendances by the respondent on site in order to attempt rectification. As the appellants were not satisfied with these attempts, they made a complaint (dated 15 December 2000) to the Building Disputes Tribunal pursuant to s 12A of the Act.
On 28 May 2001 the Registrar of the Tribunal issued an Order to Remedy which required the respondent to rectify certain defects within 28 days. The work which was specified in the order to be faulty or unsatisfactory included undulations in the main bedroom flooring, a leaking upstairs shower recess and a substandard jarrah staircase.
The respondent did not comply with this order to the appellants' satisfaction, and in due course the Tribunal was required to conduct a hearing. By the time of the hearing on 12 November 2002 the appellants had obtained advice from an expert architect (Mr David Standen) to the effect that the defects in the upper bedroom and bathroom floors could be remedied only by partial demolition and reconstruction. The major issue requiring determination by the Tribunal was whether or not the defects could only be remedied in this way. Quotations were produced from two building companies which priced the costs of demolition and reconstruction (together with rectification of sundry other defects) at $60,595 and $39,875 respectively.
During cross‑examination of Mr Standen it was put to him that the defects in the bedroom and bathroom floors could be remedied at less cost and without demolition by means of an alternative "scope of works". Mr Standen was taken in detail through the "scope of works" and he conceded that this alternative method was "feasible".
The respondent then adduced evidence from a carpenter employed by a building company (Mr David Chapman) to the effect that the alternative scope of works could be carried out at a cost of $8,435.

The decision by the Tribunal

The Tribunal found that although there were two major faults with the extension (involving the bedroom and bathroom floors) the rest of the structure including the roof was sound and properly finished. There also had been an "acceptance" by Mr Standen that it was feasible to rectify the major defects by means of the alternative scope of works. The Tribunal went on to find that:
"In the circumstances we do not consider it reasonable or necessary to tear down the upper half when otherwise the building is to the required standards. Given the refusal of the Owners to allow the Builder to complete repairs despite an Order to Remedy it would be unreasonable then to charge him some $38,000 to remedy what is accepted as otherwise capable of being done to the required standard for a very much lesser sum. The Owners also have to accept some risk that the cost of repairs may exceed the estimate of current costs, if they are to takeover the remedial work themselves."
The Tribunal also found that the remedial work could be carried out at the cost quoted by Mr Chapman together with a further 10 per cent to cover unforeseen contingencies (viz $9,280).
The Tribunal made the further finding that the standard of workmanship in the staircase construction was poor. This necessitated that the staircase including the balustrades should be dismantled and reconstructed properly. The Tribunal assessed the costs of this work to be $3,400 on the basis that approximately half of the existing materials could be reused.
After making further minor adjustments, the Tribunal determined that there should be an order for payment of $11,971 by the respondent to the appellants.
The grounds of appeal are relatively detailed and extensive, and it is unnecessary that I now set them out in full. In essence the appellants contend the following:
(Ground 1)The Tribunal erred in finding that Mr Standen had accepted that satisfactory rectification could be achieved in accordance with the alternative "scope of works". In this regard Mr Standen's evidence that the alternative method was "feasible" was based on certain assumptions which were not borne out by the evidence. These assumptions were that:
-     a floor to ceiling height of not less than 2.4 metres could be achieved in accordance with the requirements of the contract.
-     the floor did not go under the walls and could be removed without loss of support at the walls.
-     the old floor would be able to be re-laid and would not need to be replaced.
-     there would be "almost continual supervision" of the work of the carpenter who performed the rectification.
-     there would be no adverse effect to the level at which the floor met the vanity and the spa.
(Ground 2)That the Tribunal erred in fact in law in taking into account an irrelevant consideration, namely that the building was otherwise to the required standards.
(Ground 3)That the Tribunal erred in fact in finding that rectification could be carried out to the required standard at a much lesser sum than $38,000.
(Grounds 4 & 5)     The Tribunal had erred in finding, or alternatively in taking into account the irrelevant finding that the appellants had refused to allow the respondent to complete the repairs despite the order to remedy.
(Ground 6)Alternatively the Tribunal had erred in failing to find that it was reasonable for the appellants to refuse to allow the respondent to complete the repairs to the premises.
(Ground 7)The Tribunal erred in fact in law in finding that the appellants were obliged to accept some risk that the cost of repairs might exceed the estimate of current costs if they were to take over the remedial work themselves.
(Ground 8)The Tribunal had erred in fact in law in assuming that 50 per cent of the staircase materials could be reused in the reconstruction of the same.
(Ground 10)The Tribunal erred in the exercise of its discretion failing to order that the respondent pay the appellants' costs of the hearing.

The merits of the appeal

Self‑evidently the substantial issues before the Tribunal were of a highly technical nature, and their resolution required the exercise of special knowledge and skill. By it's very nature, the Tribunal has that special knowledge and skill and it is more appropriately equipped than any court to resolve matters of the type with which it deals. It follows that in the absence of obvious error, this Court should be loath to interfere with a decision by the Tribunal on a technical matter such as whether or not a particular method of rectifying certain building defects is acceptable.
In the present matter the grounds of appeal seem to assume that the decision of the Tribunal is equivalent to the decision of a court and that the normal rules of evidence should apply. This is an erroneous assumption because pursuant to s 36 of the Act the Tribunal:
"… shall act according to equity, good conscience, and the substantial merits of the case and without regard to technicalities and legal forms, and shall not be bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit."
Accordingly, it is inappropriate to comb through the Tribunal's reasons for decision looking for errors of a narrow legal kind and there must necessarily be a fairly broad brush approach to the merits of the appeal. In this regard I respectfully adopt the reasoning of His Honour Judge L A Jackson in Watson v Wallington [1999] WADC 84 at 23:
"It is I think important when dealing with a tribunal such as the Committee to recognise that its very informality can result in what would in a court of law be described as irregularities properly corrected on appeal. To take the same rigid approach with respect to the Committee's hearings would I think be to frustrate the legislation. It should, in my opinion, only be in cases where there has been a clear failure by the Committee to act in accordance with its own legislation or in accordance with traditional rules designed to ensure fair hearings that the Court should interfere."
In the present instance the Tribunal was required to make a determination under s 12A(1)(b) of the Act of the quantum of costs it considered reasonable to remedy the faults in the respondent's building work. This did not require a determination of the quantum of costs which would bring about a perfect outcome for the appellants or which would result in a construction completely in accordance with the contract specifications. It was a determination of the costs that the Tribunal considered reasonable to remedy building work "that is faulty or unsatisfactory".
There was evidence before the Tribunal of alternative methods of remediation, one of which required demolition and reconstruction at a cost of at least $39,875, and the other the implementation of a more limited "scope of works" at a cost of $8,435. The Tribunal came to the opinion that the second alternative was reasonable subject to the addition of 10 per cent for contingencies.
In it's reasons for decision the Tribunal placed considerable reliance on the fact that Mr Standen during cross‑examination had conceded that the second alternative was "feasible". Nevertheless that was not the only basis for the Tribunal's decision because it reached it's own view that it was not "reasonable and necessary to tear down the upper half when otherwise the building is to the required standards".
Although the Tribunal was no doubt aided in coming to this conclusion by the concession made by Mr Standen during cross‑examination, the opinion it reached was undoubtedly it's own. In this regard the transcript shows that there was considerable intervention by members of the Tribunal during the course of evidence in order to clarify particular technical aspects of the alternative "scope of works". The Tribunal was qualified to come to the determination that it did in respect of the appropriate method of rectification, and in my view it is a determination that should not be disturbed.
I am of this view notwithstanding that the oral evidence may not have proved the feasibility of the alternative scope of works to a standard that would have satisfied a court of law. The Tribunal was not bound by the rules of evidence and the only question that is relevant on appeal is whether it arrived at its determination without obvious error and in a manner that was fair. In my opinion the decision by the Tribunal on that major issue was patently fair, and was arrived at without any apparent error.
Nevertheless, the Tribunal does not seem to have allowed for the fact that the house extension once rectified in accordance with the alternative "scope of works" will not have been constructed in accordance with the building contract. The patch‑up nature of the rectification works will necessarily result in the appellants being left with a home extension which although not "faulty or unsatisfactory", is different from what it would have been if constructed in a proper and workmanlike manner.
In these circumstances the Tribunal had a discretion (pursuant to s 12A(4)(a)(d) of the Act) to order payment of such sum of money as it considered reasonable to compensate for the failure to carry out the building work in a proper and workmanlike manner (s 12A(1)(a)(b)(ii) of the Act).
In the particular circumstances of the present case I consider that fairness requires that the appellants should receive payment of reasonable compensation in addition to payment of the costs of rectification on the lesser basis. Doing the best I can on the materials available I consider that a reasonable payment of compensation in all of the circumstances would be the sum of $5,000.
A further issue on appeal concerns the Tribunal's allowance for the costs of rectification of the staircase, and it's conclusion that approximately one half of the materials in the existing staircase could be reused. Here again, I consider that the Tribunal had the expertise and was qualified to come to this opinion. The arguments raised on appeal do not persuade me that there is any basis for this decision to be disturbed.
The final matter the subject of appeal concerns the Tribunal's refusal to order costs in favour of the appellants. Orders for costs are entirely at the discretion of the Tribunal and I am not persuaded that that discretion miscarried. Accordingly I do not propose to make any order in respect of the costs of the hearing before the Tribunal.
For all the above reasons the orders made by the Tribunal will be confirmed, but there will be an additional order pursuant to s 12A(1)(a)(b)(ii) of the Act that the respondent pay to the appellants the sum of $5,000 by way of compensation for failing to carry out the building work in a proper and workmanlike manner.