J-CORP Pty Ltd and Leyte and Anor
[2007] WASAT 39
•12 FEBRUARY 2007
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION: J-CORP PTY LTD and LEYTE & ANOR [2007] WASAT 39
MEMBER: MR M SPILLANE (MEMBER)
HEARD: 17 NOVEMBER 2006
DELIVERED : 12 FEBRUARY 2007
FILE NO/S: CC 1370 of 2006
BETWEEN: J-CORP PTY LTD
Applicant
AND
GRANT LEYTE
JENNY LEYTE
Respondents
Catchwords:
Review of Building Disputes Tribunal decision - Order to remedy - Whether matter complained of a workmanship issue under s 12A(1a) of the Builders' Registration Act 1939
Legislation:
Builders' Registration Act 1939 (WA), s 12A, s 12A(1), s 12A(1a), s 41(2)
Home Building Contracts Act 1991 (WA)
Result:
Application for leave refused and application dismissed
Category: B
Representation:
Counsel:
Applicant: Mr S Pentony
Respondents : Self-represented
Solicitors:
Applicant: Hotchkin Hanley
Respondents : Self-represented
Case(s) referred to in decision(s):
Bellgrove v Eldridge (1954) 90 CLR 613
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Commodore Homes (WA) Pty Ltd and Austin & Anor [2005] WASAT 292
Tangent Nominees Pty Ltd and Edwards & Anor [2005] WASAT 119
Well Holdings Pty Ltd v Agostino [2001] WADC 174
Wilson v Metaxas [1989] WAR 285
Wing Luck Foods v Lay Choo Lim [1989] WAR 358
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The applicant applied for leave to review a decision of the Building Disputes Tribunal regarding an order to remedy the colour of mortar on the respondents' home.
The Building Disputes Tribunal found that the mortar colour was a workmanship issue and that the builder could have achieved the expected colour by a more selective choice of sand and cement and ordered the mortar be made good to correspond with the colour agreed at pre‑start.
This Tribunal found that the applicant has not shown that there is no discernible basis for the Building Disputes Tribunal's decision or that the decision is wrong or attended with sufficient doubt. Neither is there a significant question of law and it has not been demonstrated that if the decision is not reviewed a substantial injustice would result.
Application
This is an application for leave to review a decision of the Building Disputes Tribunal (the BDT) made on 18 July 2006 pursuant to s 41(2) of the Builders' Registration Act 1939 (WA) (the Act).
Building Disputes Tribunal's decision under review
The BDT issued written reasons for decision on 20 July 2006.
The BDT referred to complaints by the respondents in respect to building work undertaken by the applicant pursuant to a contract between the parties dated 26 September 2003. The contract price was $261 327. The BDT explained that the complaint raised contractual disputes which were over the jurisdictional limit of $200 000 of the Home Building Contracts Act 1991 (WA). As such, therefore, the BDT indicated that the contractual disputes fell outside their $200 000 jurisdiction.
The remainder of the decision to a large extent dealt with the colour of the mortar joints of the building.
The BDT considered that issue to be a workmanship dispute. The reasons set out that the respondents considered that the "mortar joints" were not up to their expectations. The respondents' evidence was that their expectations arose as a consequence of instructions given by them at the time of the contract pre‑start and assurances given to them by the applicant. The reasons set out that the respondents advised the pre‑start advisor that they wanted the mortar colour to match that illustrated in a Midland Brick brochure. Upon advising the pre‑start advisor, the pre‑start advisor left the room and returned with a Builders Choice sheet and were advised by the pre‑start advisor that the Builders Choice Midland Brick Ultra Creme type GP mortar would achieve that result.
The respondents consider that the mortar is much darker than their expectation, which was pointed out to the applicant's site supervisor when the mortar work was commenced. The BDT refers to photos that were tendered at the hearing and found that they show a colour clearly darker than in the brochure. The BDT found that the colour of the mortar was a mustard colour and did not match the bricks.
The BDT went on to set out the applicant's submissions from the construction manager who attended before the BDT on behalf of the applicant. The applicant submitted that the colour of mortar depends upon the sand used ‑ as the colour of sand supplies vary, so does the colour of the mortar. The applicant submitted that the respondents should have asked for light cream mortar.
The BDT went on to find that the respondents' expectations in respect to the colour of the mortar had not been met. They found that the respondents' expectation was based on the pre‑start advisor's confirmation that the colour as depicted in the brochure could be achieved. The BDT then went on to find that the builder could have achieved the expected colour by a more selective choice of sand and cement.
As a result, the BDT considered that the respondents' claim was justified and ordered that the applicant make good the mortar to correspond with the colour agreed at pre‑start.
Grounds for review
The application sets out the grounds for review as follows:
1.The BDT erred in law in finding that the respondents' complaint was a "workmanship dispute" and was therefore a matter capable of falling within the terms of s 12A of the Act.
2.The BDT erred in law in that it failed to have any and/or any adequate regard to the fact that the Lump Sum Building Contract, executed by the parties, required the applicant to supply "cream" mortar, in circumstances where the BDT found that that was exactly what was supplied.
3.The BDT erred in law in making an order that the applicant "make good the mortar to correspond with the colour agreed at pre‑start" when the appropriate remedy, if any remedy at all be granted (which is denied in any event), ought to have been an order to pay nominal compensation, based on the principles of Bellgrove v Eldridge (1954) 90 CLR 613.
The applicant's submissions
The applicant filed written submissions supplemented by oral submissions which can be summarised as follows:
1.As to Ground 1, the applicant argues that whether the applicant provided the correct coloured mortar was not a matter that could be dealt with under s 12A(1) or s 12A(1a) of the Act. In effect, the applicant argues that s 12A(1) could not apply as there was no evidence that would support a finding that the mortar was faulty or unsatisfactory. It also suggests that s 12A(1a) is inapplicable because there was no evidence the mortar has not been applied correctly or operates in an inadequate fashion to cause problems with the brickwork. In essence, the applicant submitted that there was no evidence that there was any workmanship issue relating to the mortar.
2.The applicant seeks to suggest that the complaint concerning the colour of the mortar is not a workmanship issue but rather a contractual issue; as such, as the building contract is over $200 000, it falls outside the jurisdiction of the BDT and should be dealt with in another jurisdiction. The applicant argues that the complaint is more akin to a misleading or deceptive conduct complaint.
3.The applicant submitted that the colour of the mortar was not a workmanship issue under s 12A(1) of the Act because such issues are confined to the actual carrying out of the work whether the work is faulty or unsatisfactory and whether the work undertaken by the builder performs.
4.As to s 12A(1a) of the Act, the applicant submitted that this provision does not cover faulty or unsatisfactory building work, as this is covered in s 12A(1), but this provision relates to the conduct of the builder. The applicant gave an example of a builder who was required to carry earthworks ‑ the earthworks performed were satisfactory, but in carrying out those earthworks the builder damaged a retaining wall. The applicant argues that this relates to the conduct of the builder and this is the mischief s 12A(1a) is supposed to cover.
5.Broadly, the applicant suggested that s 12A deals with performance issues, not results issues.
6.It is for those reasons that the applicant submitted that the BDT erred in treating the colour of the mortar as a workmanship issue. The applicant also argued that in any event the BDT did not properly explain in their reasons for decision why s 12A of the Act applied in this case.
7.In respect to Ground 2, the applicant argued the BDT erred in failing to have any or adequate regard to the building contract signed by the parties, which required the applicant to supply cream mortar in circumstances where the BDT found that the respondents had been supplied cream mortar. The applicant submitted that the BDT erred in failing to reconcile how the oral discussions concerning the colour of the mortar meshes with the written parts of the contract.
8.Ground 3 was put by the applicant in the alternative, on the basis that if this Tribunal does not consider that Grounds 1 and 2 are made out, then the applicant submits that the correct remedy in this case was not an order to remedy but rather payment of nominal compensation. The applicant argued that as the mortar was satisfactory from a performance viewpoint then the more appropriate remedy was to award a nominal amount of compensation for loss of amenity or expectation.
The respondents' submissions
The respondents were not legally represented. Mr Leyte appeared for the respondents. He did not file any written submissions. His only submission in respect to the oral submissions made at the hearing of the application for leave were brief and in essence not relevant to the issue of whether leave should be granted to the applicant.
Consideration
The principles for the grant of leave have been set out in Tangent Nominees Pty Ltd and Edwards & Anor [2005] WASAT 119. They accord with previous decisions of the Supreme Court in Wilson v Metaxas [1989] WAR 285, Wing Luck Foods v Lay Choo Lim [1989] WAR 358 and of the District Court in Well Holdings Pty Ltd v Agostino [2001] WADC 174. This Tribunal must be slow to grant leave. It must be shown that there is no discernable basis for the decision or there is a significant question of law, or that the decision is wrong or attended with sufficient doubt. Further, it must be demonstrated that if the decision were not to be reversed that a substantial injustice would result.
Ground 1
In respect of Ground 1, the applicant has sought to suggest that the BDT was in error in considering the colour of the mortar to be a workmanship issue and for failing to give adequate reasons why the colour of the mortar was a workmanship issue under s 12A(1a) of the Act.
It may be ambiguous to simply say the mortar colour claim is a workmanship dispute. However, when looked at as a whole and in particular the BDT's finding "that the builder could have achieved the expected colour by its more selective choice of sand and cement", the BDT clearly identified how it considered the issue of the colour of the mortar to be a workmanship issue.
The BDT was clear that the colour of the mortar was the matter at issue and as there was no evidence to suggest that the work was faulty the matter had to fall within s 12A(1a).
Section 12A(1a) entitles the BDT to make orders where it considers that the building work complained of has not been carried out in a proper or workmanlike manner. As a specialist Tribunal, it found that the respondents' expectations in respect of the colour of the mortar had not been met. Specifically it found that the applicant could have achieved the expected colour by its more selective choice of sand and cement.
The BDT was satisfied that through discussions with the pre‑start advisor, the applicant had assured the respondents that the cream colour for the mortar they desired could be achieved. By those reasons, the BDT made clear how it rationalised that the builder had not performed properly in this case, that is, it had failed to make a proper selection of the cement and sand to achieve the colour of the mortar as agreed between the parties.
The Tribunal does not accept the applicant's submission that s 12A(1a) of the Act does not apply, the analogy used by the applicant is that this section is limited to cases concerning the conduct of a builder. This Tribunal has made clear in previous cases that this provision is to catch those cases where the complainant may have got a functioning building, that is, there is not question that the building is faulty but it does not accord with the plans and specifications; the best example of this is a complainant who gets a garage built ‑ it functions properly and is not faulty but it has been built too small and not in accordance with the plans and specifications. See Commodore Homes (WA) Pty Ltd and Austin & Anor [2005] WASAT 292 at par 17.
It is the same scenario in this case ‑ the respondents got mortar that functioned but it is not the colour they asked for. This related to poor workmanship through the builder's failure to properly select the right cement and sand to accord with the agreement reached between the parties.
In the circumstances, the BDT did not err in finding the respondents' complaint was a "workmanship dispute" and was capable of falling within the terms of s 12A of the Act.
Leave in respect of Ground 1 is therefore refused.
Ground 2
The argument put by the applicant in respect to Ground 2 was difficult to follow given the submissions that had been made in respect of Ground 1. In essence, the applicant had suggested in Ground 1 that the question of colour of the mortar was more properly categorised as a contractual issue and could not be categorised as a workmanship issue. The point was made by the applicant that as the colour of the mortar was really a contractual issue and as the price of the contract was above the BDT's jurisdiction, the issue could not be dealt with by the BDT.
However, in Ground 2 the applicant sought to suggest that the BDT should have had regard to the written contract between the parties, which described the mortar joints as cream. In oral submissions, counsel for the applicant also suggested that the BDT paid insufficient regard to the written contract between the parties in circumstances where the contract referred to cream mortar and the BDT found the mortar to be cream.
However, the BDT's reasons make clear that although it accepted the mortar was a shade of cream, it was not the shade of cream as expected by the respondent, as depicted in the brochure and as agreed to by the parties at the pre‑start conference. The BDT was certainly live to the issue, as it stated:
"If their instructions were that the mortar be 'cream', then the builder's submission would be correct, that they got cream, albeit a shade that was not as expected of them."
This Tribunal is satisfied that the description of the mortar as "cream" in the contract between the parties is sufficiently ambiguous to allow the BDT to have regard to extrinsic evidence which it obviously did.
In Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, Mason J at [352] stated:
"The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning."
In the Tribunal's view that was clearly the case in the present circumstances and the BDT was entitled as it did to rely on extrinsic evidence to clarify the correct agreement between the parties.
The BDT as a specialist Tribunal found that the cream mortar provided by the applicant was not in accordance with the respondents' expectations as discussed with the applicant's pre‑start advisor. The BDT considered that this occurred due to the poor selection of sand and cement by the applicant.
The reasons of the BDT made clear that this was not a case of whether the respondents got cream mortar, but whether the cream mortar they got was the right shade.
The BDT did have adequate regard to the contract between the parties including extrinsic evidence to assist in interpreting the language.
Accordingly, the leave in respect of Ground 2 is refused.
Ground 3
Ground 3 was made in the alternative and only arises if the applicant fails on the first two grounds, which it has.
Effectively Ground 3 suggests that the appropriate remedy is not an order to make good the mortar but rather an award of nominal compensation.
In Bellgrove v Eldridge (1954) 90 CLR 613, the High Court confirmed that the normal measure of damages for breach of contract in a building matter was the cost of achieving conformity with the contract. However, it qualified that by explaining that the work to be done must be necessary to achieve such conformity and must be a reasonable course to adopt.
As previously stated, the BDT is a specialist Tribunal with a builder member and this must be borne in mind when considering whether the remedy awarded was reasonable and necessary.
The remedy awarded by the BDT could be done on a staged basis to allow the cutting out of mortar to a certain depth and re‑pointing. As such, it is not an unreasonable remedy. Further, it would seem to be the most appropriate remedy as it accords with the respondents' expectation had proper workmanship been exhibited. This is especially so in circumstances where the applicant did not appear to put before the BDT any evidence to support the contention that the appropriate remedy was some form of nominal compensation.
Leave is therefore also refused in respect of Ground 3.
In all the circumstances, the applicant has not shown that there is no discernible basis for the BDT's decision or that the decision is wrong or attended with sufficient doubt. Neither is there a significant question of law and it has not been demonstrated that if the decision is not reviewed a substantial injustice would result.
Leave to review the Building Disputes Tribunal decision is therefore refused and the application is dismissed.
Orders
Leave to review the Building Disputes Tribunal decision is refused and the application is dismissed.
I certify that this and the preceding [44] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR M SPILLANE, MEMBER
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