KELLY and GOLDBOX HOLDINGS PTY LTD
[2017] WASAT 134
•16 OCTOBER 2017
KELLY and GOLDBOX HOLDINGS PTY LTD [2017] WASAT 134
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2017] WASAT 134 | |
| BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) | |||
| Case No: | CC:1552/2016 | 22 FEBRUARY AND 10 MAY 2017 | |
| Coram: | MR D MACLEAN (MEMBER) MR R AFFLECK (SENIOR SESSIONAL MEMBER) | 16/10/17 | |
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Complaint upheld in part and dismissed in part | ||
| B | |||
| PDF Version |
| Parties: | KEIRA KELLY GOLDBOX HOLDINGS PTY LTD |
Catchwords: | Building services complaint Tribunal's original jurisdiction Building Remedy Order Assessment of costs of carrying out remedial works |
Legislation: | Building Code of Australia Building Services (Complaints Resolution Administration) Act 2011 (WA), s 36(1)(a), s 36(1)(b), s 36(1)(c), s 38, s 51, s 55 State Administrative Tribunal Act 2004 (WA), s 77(2) |
Case References: | McNab and Pyramid Constructions (WA) Pty Ltd [2017] WASAT 3 Nelson v Mardesic (1999) 22 SR WA 42 |
Orders | For the reasons given above the Tribunal will cause an order to issue in the following terms:,1. The following complaint items are upheld, namely items 6.1, 6.2. 6.3, 6.4, 6.5, 6.6, 6.7 and 6.9 and in respect thereof the respondent must on or before 12 November 2017 pay to the applicant the sum of $35,569 pursuant to s 36(1)(b) of the Building Services (Complaints Resolution and Administration) Act 2004 (WA) being the cost of remedying such building services.,2. The applicant and the respondent shall have liberty to apply for their costs of the proceeding, by filing with the Tribunal and giving to the other party, on or before 6 November 2017, the following documents:,(a) a schedule of the costs claimed in sufficient detail to enable the Tribunal to assess and fix any costs which might be awarded, together with any supporting documents upon which the party wishes to rely; and,(b) written submissions addressing the basis upon which it is contended costs should be awarded and the quantum of costs claimed.,3. If the either party makes an application for costs, the responding party may, on or before 21 November 2017, file with the Tribunal and give to the applicant for costs written submissions opposing the application.,4. Subject to further order, if a party makes an application for costs, the Tribunal shall, after the responding party files its written submissions, or 21 November 2017, whichever is the earlier, determine the application on the documents, and if costs are awarded, shall fix the amount of such costs.,5.The application is otherwise dismissed. |
Summary | The applicant owned and occupied a home built by the respondent. There were defects across all three levels of the home. The applicant sought an order under s 36(b) of the Building Services (Complaints Resolution Administration) Act 2011 (WA) (BSCRA Act) for the costs of remedying the building service in the amount of $101,597.10. The respondent conceded that a Building Remedy Order (BRO) might be made but contended that the respondent should perform the BRO or that an order to pay ought be calculated on the basis of the amount it would cost the respondent to undertake the rectification work and cited the principles in McNab and Pyramid Constructions (WA) Pty Ltd [2017] WASAT 3 and Nelson v Mardesic (1999) 22 SR WA 42 applied if the Tribunal made an order to pay. The Tribunal did not accept the applicant's expert evidence as to the cost of the rectification work and did not accept that this was an appropriate case in which to order the respondent to undertake the work or to assess the cost of the work on the basis of what it would cost the respondent to undertake the work. The Tribunal made an order under s 36(1)(b) of the BSCRA Act ordering the respondent to pay the applicant the sum of $36,569 being the cost of remedying the building service. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : KELLY and GOLDBOX HOLDINGS PTY LTD [2017] WASAT 134 MEMBER : MR D MACLEAN (MEMBER)
- MR R AFFLECK (SENIOR SESSIONAL MEMBER)
- Applicant
AND
GOLDBOX HOLDINGS PTY LTD
Respondent
Catchwords:
Building services complaint - Tribunal's original jurisdiction - Building Remedy Order - Assessment of costs of carrying out remedial works
Legislation:
Building Code of Australia
Building Services (Complaints Resolution Administration) Act 2011 (WA), s 36(1)(a), s 36(1)(b), s 36(1)(c), s 38, s 51, s 55
State Administrative Tribunal Act 2004 (WA), s 77(2)
Result:
Complaint upheld in part and dismissed in part
Summary of Tribunal's decision:
The applicant owned and occupied a home built by the respondent. There were defects across all three levels of the home. The applicant sought an order under s 36(b) of the Building Services (Complaints Resolution Administration) Act 2011 (WA) (BSCRA Act) for the costs of remedying the building service in the amount of $101,597.10. The respondent conceded that a Building Remedy Order (BRO) might be made but contended that the respondent should perform the BRO or that an order to pay ought be calculated on the basis of the amount it would cost the respondent to undertake the rectification work and cited the principles in McNab and Pyramid Constructions (WA) Pty Ltd [2017] WASAT 3 and Nelson v Mardesic (1999) 22 SR WA 42 applied if the Tribunal made an order to pay. The Tribunal did not accept the applicant's expert evidence as to the cost of the rectification work and did not accept that this was an appropriate case in which to order the respondent to undertake the work or to assess the cost of the work on the basis of what it would cost the respondent to undertake the work. The Tribunal made an order under s 36(1)(b) of the BSCRA Act ordering the respondent to pay the applicant the sum of $36,569 being the cost of remedying the building service.
Category: B
Representation:
Counsel:
Applicant : In Person
Respondent : Mr R Camm
Solicitors:
Applicant : N/A
Respondent : Camm & Associates
Case(s) referred to in decision(s):
McNab and Pyramid Constructions (WA) Pty Ltd [2017] WASAT 3
Nelson v Mardesic (1999) 22 SR WA 42
Background
1 This matter was referred to the Tribunal by the Building Commissioner by application dated 28 September 2016 under s 51 of the Building Services (Complaints Resolution and Administration) Act 2011 (WA) (BSCRA Act).
2 Keira Kelly (applicant) owns and resides in a home built by Goldbox Holdings Pty Ltd (respondent). The applicant complained to the Building Commissioner about defects that continued to manifest within the home by reason of the build. The complaint culminated in the creation of Building Remedy Order 19 of 2016 (BRO 19) on 25 January 2016. On 10 May 2016, following further complaint from the applicant, that the respondent did not comply with BRO 19 in respect of many items requiring action under it, the Building Commissioner wrote to the parties (the Building Commissioner's letter), and recorded the applicant's intention to seek a monetary order for the costs of having those items remedied. The respondent was invited to provide submissions in relation to the noncompliance of the Building Remedy Order (BRO) and its intentions moving forward.
3 There was no evidence that the respondent provided any submission in response.
4 On 29 September 2016, the Building Commissioner, pursuant to s 51 of the BSCRA Act, prepared a memorandum. The memorandum, together with BRO 19 and the Building Commissioner's letter, were received by the Tribunal in the hearing as part of the hearing book as Exhibit 1.
5 Section 55 of the BSCRA Act allowed the Building Commissioner, with the Tribunal's consent, to transfer this matter to the Tribunal. The Building Commissioner proposed the transfer after considering the information and submissions which included:
• The relationship between the parties had broken down, displayed in part by the Building Commissioner's view that the respondent had not provided any formal response to the outstanding items;
• The quotation provided by the applicant was just under $100,000 in remedial costs and was likely to increase; and
• The matter was of a complex nature given the water ingress issues present and the severity of the resultant damage caused due to the respondent's alleged failure to comply with BRO19.
6 The Tribunal's function is to consider, afresh, the complaint and its resolution under s 38 of the BSCRA Act.
7 It is open to the Tribunal to deal with the building service complaint by making a BRO or to otherwise decline to make a BRO.
8 This matter comes within the Tribunal's original jurisdiction and the obligation of the Tribunal is to make findings on material questions of fact referring to the evidence or other material on which those findings are based: S 77(2) of the State Administrative Tribunal Act 2004 (WA).
9 In this application the Tribunal is satisfied:
1) the applicant made a building service complaint;
2) the building service complaint was about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory;
3) the Building Commissioner made a BRO, namely BRO 19 of 2016 to remedy the building service under s 36(1)(a) of the BSCRA Act;
4) the Building Commissioner was satisfied that BRO 19 had not been complied with, in whole; and
5) the building service complaint, or matter, was before the Building Commissioner under s 51 of the BSCRA Act.
10 These matters were not in issue but are established by BRO 19, the Building Commissioner's letter and the memorandum, which were tendered in the hearing.
11 Prior to the hearing the applicant expressed an intention to seek compensation for stress. However the applicant abandoned this claim at the commencement of the hearing.
The hearing
12 The applicant and the respondent relied on expert building witnesses namely Rick Martelli and Barry P Jones (experts). Mr Martelli's and Mr Jones' reports were received into evidence as part of Exhibit 1. Mr Martelli's report appears at pages 108 and Mr Jones' report is at page 178 of hearing book 1 Exhibit 1.
13 The Tribunal received as exhibits:
• hearing books 1 and 2 Exhibit 1;
• a photograph of the roof area above the cabinetry of the barbeque area Exhibit 2;
• letter from Mr Morabito commenting on Mr Wells' work Exhibit 3;
• a two page document prepared by Mr Wells Exhibit 4; and
• a one page document prepared by Mr Morabito Exhibit 5.
14 Mr Martelli and Mr Jones gave evidence as to the complaint items and actions required. These matters arose from items recorded in BRO 19 as amended by the Building Commissioner's letter. Following the experts' evidence, the experts prepared a Remedial Scope of Works (Scope).
15 The parties called Mr Mark Wells and Mr Giuseppe Morabito to give expert evidence (costs experts) as to the cost of the rectification work. Mr Claude Verini gave evidence on behalf of the respondent and assisted the Tribunal by making submissions and concessions. The respondent also relied upon a report from Vinci Construction and Developments Pty Ltd (Vinci Construction) in support of its case as to the cost of the rectification work.
16 The Tribunal was also assisted by submissions provided by Mr Richard Camm on behalf of the respondent.
17 The complaint items related to all three floors of the home. In BRO 19 they were described by reference to the floors. Some of the complaint items were connected. For example complaint item 1 referred to level one. However, the damage to level one originated from level three. Therefore, the complaint items and the actions required in complaint items 1.1, 2.1 and 3.1 were related since the cause of the damage emanated from the same fault, namely moisture ingress to the stairwell. Mr Martelli's report was prepared before BRO 19. Mr Jones, not unreasonably, found the location of some of the complaint items, as numbered and described in BRO 19 and described in Mr Martelli's report, difficult to understand and grouped the related complaint items together in his report. Mr Jones created his own numbering system.
18 At the commencement of the hearing Mr Martelli stated that the experts' position was that '[we] have reached agreement on a number of items and there's a number of items that we do have differing opinion on' (T:13; 22.02.17). The experts gave evidence as to their differences of opinion by reference to Mr Jones' numbering system.
19 Item 6.1 referred to the migration of water to the front balcony (T:14; 22.02.17) and captured BRO 19 complaint items 1 and 4 from level one; complaint items 2, 6 and 8 from level two; and complaint items 1 and 2 from level three.
20 Mr Martelli and Mr Jones were 'of the opinion that moisture ingress … entered that wall opposite the balcony from inadequate waterproofing to the balcony, and the balcony would need to be stripped, rescreeded, re[]waterproofed and retiled' (T:18; 22.02.17).
21 A difference between the experts arose as to whether cavity flashing was required by the Building Code of Australia (Building Code), and whether the omission of flashing contributed to the cause of the moisture ingress. The respondent conceded this issue and the Tribunal was not required to make a finding on it. The Tribunal respectfully considers that these concessions were rightfully made.
22 Item 6.2 addressed BRO 19 complaint items 2 and 3 from level one and complaint item 7 from level two. These claims related to the water migration through the stairwell, defective window glazing (T:29; 22.02.17), or as later described by Mr Martelli:
We're … referring to the glazing through the three levels of stairwell and the walls adjacent to those. We both observed on site that the windows were leaking, and there was water ponding on the windowsill. It wasn't my observations during the water test, it occurred to some of the seals, and the ponding was quite minor, but it appeared to be leaking through the window seal. Mr Jones' opinion is it's limited to the window seals. I'm of the opinion that the windowsills are inadequately flashed and moisture is entering the windowsill and permeating into the cavity on both sides of the windows where the fretting is observed.
(T:32; 22.02.17)
23 Mr Jones considered that the remedy was to replace the window seals with a larger section suitable for that environment (T:34; 22.02.17).
24 Mr Martelli said that he:
would pull out the windows and install a tray flashing, and if need be a different sill section, if required. But that would be in consultation with the window manufacturer. And this is the difficulty of this hearing, when we're trying to apply costs, it's very difficult to apply costs. So, as a builder, I would be doing this at a costs plus, as I just couldn't even put a figure on it. So it would be in the interests of the complainant that they get the builder to return and carry out the remedial works.
(T:35; 22.02.17)
25 Item 6.3 addressed BRO 19 complaint item 4 from level one, complaint item 5 from level two and complaint item 4 from level three.
26 The experts agreed that the moisture ingress occurred from the box gutter overflowing: (T:43; 22.02.17). Following conferral and counter to Mr Jones' reported position, the experts agreed that the wall needed to be rectified and that the box gutter did not comply with the Australian Standards or the Building Code and that provision for overflow was required: (T:4344; 22.02.17).
27 Item 6.4 dealt with BRO 19 complaint items 3 and 4 from level two. The experts agreed on the remedy. Mr Jones said 'I believe that there should be some form of rubber seal on the ends of all the louvres, so when they rub against the window window frames, it does form a more of a better seal': (T:46; 22.02.17).
28 Item 6.5 addressed BRO 19 complaint item 3 from level two. The experts agreed that this particular complaint item, arising from a gap caused by a missing louvre blade had been addressed: (T:4950; 22.02.17).
29 Item 6.6 addressed BRO 19 complaint item 9 from level two. The experts agreed on the remedy required, described by Mr Jones in evidence as to seal and repaint: (T:50; 22.02.17).
30 Item 6.7 addressed BRO 19 complaint item 3, 5 and 8 on level one.
31 The experts agreed that the moisture ingress was likely occurring due to the inadequate waterproofing of the balcony.
32 Mr Martelli considered that the cause of the water ingress was likely entering via the window sill as well into the cavity: (T:51; 22.02.17). Mr Jones' opinion was that it was likely limited to a breach of the waterproof membrane of the balcony: (T:52; 22.02.17).
33 Mr Martelli gave evidence that 'I believe that there might be inadequate sill detail that's allowing moisture to egress through the end of the windowsill into the cavities, because it's leaking on both sides': (T:52; 22.02.17).
34 Mr Jones gave evidence, consistent with his report, namely 'any moisture in that upper room adjacent to the balcony will stem from the defective waterproof membrane. And once that is installed properly, the migration of water inside will disappear': (T:53; 22.02.17).
35 Mr Martelli gave evidence, which Mr Jones agreed with, 'there's two possibilities that water ingress is occurring. It is defective waterproofing to the balcony and the windowsill. We don't know which one … unless we open it up':
(T:58: 22.02.17)
36 Item 6.9 addressed BRO 19 complaint item 5 on level one.
37 The experts agreed that there was water damage to the alfresco barbecue cabinet doors. Mr Martelli summarised the experts' position as:
Mr Jones agrees that the roof requires remedy as well to eliminate the source of moisture ingress. We disagree in relation to the extent of remedial works required to the cabinetry. We both agree that the shelves require replacement and the doors require replacement and the doors require replacement, however, I'm of the opinion that some of the cabinetry carcass is swollen and requires replacement. Mr Jones … believes that it can just be laminated over.
(T:68; 22.02.17)
38 The issue of the carcass was resolved by, with respect, a sensible concession made by Mr Verini on behalf of the respondent, that if Mr Martelli's recommendation was to replace the carcass that he would accept that; even if the two experts could not agree on that: (T:8990; 22.02.17).
39 Mr Verini took a sensible, pragmatic approach to the issue of identifying the remedial works required which impressed the Tribunal.
40 The complaint items and their description within BRO 19 and Mr Jones' report were confusing. However, the Tribunal was assisted by the parties and particularly the respondent, who, after hearing the experts give evidence, agreed that a waterproof membrane was required and agreed that the tiles should be replaced on the top balcony and conceded that the flashing should be added. The respondent also agreed that:
• the size of the seals should be increased or replaced;
• the box gutter required a remedy to ensure overflow;
• the stairwell should be repainted;
• that flashing under the window should be added;
• that with regard to the outdoor area the doors should be replaced; and
• the carcass repaired.
41 The respondent also agreed that the roof flashing should be examined and that consequential works flowing from the water leak should be attended to: (T:7273; 22.02.17).
The cost of the remedial works
42 The critical issue for resolution became, apart from deciding what kind of BRO might be made, how the amount of any order to pay should be quantified, if an order to pay the costs of remedying the building service were made.
43 There was evidence, by way of Mr Martelli, that not surprisingly, the costs of the rectification if provided by the builder, would not meet the cost of rectification if another builder were engaged. Specifically Mr Martelli said at (T:41; 22.02.17):
I've expressed my concern to the applicant, that should the tribunal determine that they agree with the costings provided by the respondent, that it would be in their best interest to get the builder to return and carry out the remedial works, because you can't rectify those defects for the costings that have been provided by the builder.
(echoing evidence at T:35; 22.02.17 referred to previously)
44 The applicant would not countenance the respondent attending to rectify the faults, saying in the hearing of Mr Verini:
I do not want this man [in] my house:
(T:78; 22.02.17)
45 Notwithstanding reasonable concessions made by the respondent and an offer to undertake the remedial works against the applicant's complaint that water was coming out of a hole in the wall down the staircase and was dangerous, the respondent's offer to undertake the remedial works was not acceptable to the applicant: (T:93; 22.02.17). The respondent said that if it did the work it could be completed within a month: (T:79; 22.02.17).
46 The Tribunal formed the clear view that, so far as the applicant was concerned, the relationship between the parties necessary for an order under s 36(1)(a) of the BSCRA Act to be effective, was inexistent. The Tribunal finds that an order under that provision would not serve the merits of this proceeding. The Tribunal finds that an order under this provision would represent an injustice to the applicant, who had, without question, received an unsatisfactory building service and plainly wanted no further involvement with the respondent.
47 The issue is one of quantifying the cost. The respondent complained about the 'inadequacy of Mr Wells' costing and breakdown of costing'. This inadequacy, according to the respondent, meant that the matter could not be resolved at an earlier stage in the hearing notwithstanding that the respondent on the first day of the hearing essentially conceded the works that were required: (T:72; 22.02.17). The respondent reasonably conceded that a Scope might be produced so that a quote for the remedial works might be produced (T:8889; 22.02.17) to assist and make the task of costing the work clear for the cost experts and assist the Tribunal to resolve this critical issue. Mr Wells' report at this stage of the hearing claimed that the costs of remedying the works were $325,200. This sum was expressed globally with no detail as to the cost of remedying individual items. The Tribunal considers that the respondent was not unreasonable in declining to resolve quantifying the costs on the basis of Mr Wells' report as it was then presented.
48 Resolving this critical issue was undertaken in circumstances where the applicant's position as at 18 September 2016 was the cost of remedying the defects was $97,966. By 13 December 2016 the claim was $325,200. The respondent's initial position was that the costs of remedying the defects were $10,030: (T:4; 22.02.17, page 185 at Exhibit 1), according to a quote the respondent obtained from Mr Di Pietro of Vinci Construction.
49 The veracity of the costs experts' evidence as to the cost of the rectification work and how the cost was calculated assumed fundamental importance in this hearing.
The issues
50 By defining the cost of rectification as the critical issue the Tribunal does not discount or ignore the respondent's contention that it could carry out the remedial works. An issue for the Tribunal to determine was whether the appropriate remedy was a remedial work order, directing the respondent to attend to remedying the defects. The Tribunal may be able to deal with the application by making a BRO. These include an order to remedy (s 36(1)(a) of the BSCRA Act) as contended for by the respondent or an order for payment of the costs of carrying out the necessary remedial work (s 36(1)(b) of the BSCRA Act) as contended for by the applicant. An order under s 36(1)(c) of the BSCRA Act does not arise for consideration in the circumstances of this proceeding.
51 As recorded above, the Tribunal does not consider that an order under s 36(1)(a) of the BSCRA Act should be made.
52 The applicant did not agree to the respondent attending at her home (see T:78 and 93; 22.02.17). The Tribunal is satisfied that the applicant has a grievance against the respondent and that it would be unjust to compel the applicant, by way of an order, to either accept the respondent back into to her home to attend to rectifying the defects or to perhaps forgo that opportunity if the applicant declined the respondent permission to attend her home to undertake the rectification works. Further, by reason of the applicant's steep disregard and mistrust of the respondent, notwithstanding the Tribunal's observation that the respondent made sensible and reasonable concessions and offered to undertake the rectification work promptly, the Tribunal formed the strong impression that any attempt at rectification by the respondent was likely to lead to more disputes between the parties and was unlikely to resolve issues between them. In these circumstances the Tribunal considered that the reasonable way to meet the applicant's grievance was to order the respondent to pay the costs of remedying the building service under s 36(1)(b) of the BCSRA Act. The Tribunal makes this finding over the respondent's submissions that the works defined in the Scope were of such a nature that requires minimal interaction between the applicant and the builder engaged to perform the works; and that as the applicant purchased the property sometime after construction by the respondent was completed … there has only been minimal interaction between the applicant and the respondent in the past: respondent's submissions at paragraph 5.
53 The Tribunal does not accept that the works will require minimal interaction between the applicant and the respondent. The Tribunal considers it likely that the respondent will require access to the applicant's home, both interior and exterior. The method of rectifying the works proposed by the respondent requires access to the interior. The Tribunal does not consider that even if there had only been minimal interaction between the applicant and the respondent in the past that this would justify an order for the respondent to undertake the work given the degree of animosity the applicant has toward the respondent. Further, the Tribunal notes that the terms of the memorandum were formulated without the benefit of a formal response from the respondent and that this lack of interaction between the applicant and respondent may explain (together with the consequences produced by the defects excuse), the applicant's enmity toward the respondent. The Tribunal finds that the applicant's sincere animosity toward the respondent, in circumstances where the need for remedial work was conceded, would make an order requiring the applicant to accept the respondent carrying out the remedial work, unjust.
54 The Tribunal must consider and find whether the order to pay the applicant the costs of remedying the building service should be:
1) the amount it would have cost the respondent to perform, that is, $34,954 according to the Vinci report, which appeared at page 13 of hearing book 2, Exhibit 1; or
2) the cost Mr Wells gave evidence of what it would cost to perform the Scope, that is $101,597.10; or
3) the cost that Mr Morabito gave in evidence of his opinion of undertaking the Scope, that is $35,969.60.
55 The costs experts prepared statements of the costs of performing the works in the Scope. These appeared at pages 7 and 17 of hearing book 2 at Exhibit 1.
56 Prior to being sworn, there were discussions before the Tribunal with the costs experts and the parties as to how the costs experts might resolve their differences of opinion as to how the Scope ought to be interpreted and costed. The essence of the difference was neatly explained by Mr Morabito as:
the disagreement is on the method of the rectification and that's where the interpretation is between the two builders.
(T:20; 10.05.17)
57 A significant point of disagreement between the two costs experts concerned item 6.2. The experts could not agree on how the windows should be refitted. Mr Wells contended that 'a structural engineer needs to rule on whether on how these windows should be refitted': (T:23; 22.02.17)
58 Mr Morabito told the Tribunal that he and Mr Wells had different views on how the work was going to be done and that each price reflected the way that each of them considered that the work should be done: (T:24; 22.02.17).
59 Mr Wells expressed the view that the costs experts were pretty well at a stalemate with regard to item 6.2: (T:36;22.02.17). It appeared to the Tribunal that Mr Wells, with respect, focused his effort more on the manner in which he would undertake the rectification as opposed to costing the remedy defined by the experts in the Scope.
60 This position was demonstrated in the following passages where Mr Wells said:
The frustrating thing for me, watching all this go down, is you're saying my evidence look it's - in my experience, I believe that what I'm proposing is the best way to fix it and I'm covering my risk. Mr Morabito is well within his rights to say, 'Retrofit it'. I think a structural engineer should be the one ruling on how this - these windows… '
(T:36; 10.05.17)
61 In fairness to the costs experts the Scope presented some difficulty in interpretation. For example item 6.2 contained an error in that, if taken literally, did not allow for a window to be installed. Fortunately counsel for the respondent took a pragmatic view and did not contend that the window should not be included in the costing but did, reasonably, press for the cost experts to give their costings on the cost of undertaking the Scope without seeking the contributions from further experts as to the content of the Scope: (T:37; 22.02.17).
62 Mr Wells gave evidence that he had been to the site on two occasions around mid-2016: (T:44; 10.05.17).
63 Mr Wells said that he estimated the quantities based on the Scope and that in pricing labour he used labour plus, namely on costs, the indirect costs of employment. Mr Wells gave evidence that he used a rate of $75 per hour and allowed for preliminaries as being added on to the cost of the work and that the preliminaries were worked out '[a]s an educated estimation': (T:45; 10.05.17).
64 Mr Morabito gave evidence that he had read the experts' reports and inspected the work on 31 March 2017 and that he relied on the Scope in determining the price he provided for undertaking the works: (T:47; 10.05.17).
65 Mr Morabito gave evidence that he allowed $450 a day or $75 an hour as the labour rate in his price and explained the difference between $75 an hour and a daily rate of $450 by reference to his view that the items required between a day or a day and a half to complete and therefore used a rate of around $450 a day with $75 per hour, if there was extra work required: (T:4849; 10.05.17).
66 The costs experts gave evidence about each item in the Scope.
Item 6.1 leaking front balcony
67 Mr Wells' total for item 6.1 was $17,345. Mr Morabito gave evidence that his cost would be in the order of $9,000: (T:57; 10.05.17). The difference in cost, according to Mr Morabito, arose from the interpretation of the Scope. Mr Morabito did not include scaffolding in his costs. He did not consider that it was necessary as the work was off a balcony and that materials could be taken up the stairs. Mr Morabito took the view that the workers would be walking through the house to get up to the balcony: (T:57; 10.05.17). Even allowing for the difference in price by reason of the scaffolding variation Mr Wells' cost was in the order of $14,000 versus Mr Morabito's cost of $9,000: (T:58; 10.05.17). This difference in costs, excepting scaffolding, appeared to be the costs experts' assessments of the cost of labour.
68 Mr Wells considered that Mr Morabito had grossly underlooked or underestimated the work involved in fitting and installing the cavity flashings. Mr Wells did not consider that what Mr Morabito was going to do was correct and considered there was also the risk that a lot of brickwork could become loose and come down: (T:58; 10.05.17).
69 There was a cost difference between the two costs experts arising from Mr Morabito costing on the basis of a retrofit. Mr Wells costed on the basis that he would do the brickwork and put brick straps back into the brickwork: (T:58; 22.02.17). Mr Morabito considered that angle trimming, pop riveting and silicone would be adequate: (T:59; 10.05.17).
70 Mr Morabito gave evidence that he could protect the inside of the house as he had done it before and that a scaffold was not required: (T:70; 10.05.17). After considering additional factors Mr Morabito costed this item at $16,040 compared with Mr Wells' costing of $17,345: (T:77; 10.05.17).
71 Mr Verini's position, expressed in his submission (T:7778; 10.05.17), was that he would not use a scaffold for 10m² of tiling on the balcony and that even if a scaffold was used, there would still be a requirement to work inside. There would also still be a need to go up and down the staircases. Mr Verini submitted that the scaffold represented a cost of $3,600 which was not required.
72 The applicant contended that the respondent used a scaffold previously: (T:78; 10.05.17). The respondent's position was that a scaffold was used when the house was sold to replace eave lining on top of the roof, which was on the third floor of the house and not the balcony. The applicant appeared to accept this and the Tribunal found this submission, even though not confirmed by affirmation, persuasive.
73 The Tribunal finds that Mr Morabito was prepared to consider amendments to his calculation. Mr Morabito impressed the Tribunal as openminded and frank. In contrast to Mr Morabito, the Tribunal formed a view that Mr Wells was inflexible. Mr Wells did not have a view about Mr Morabito's costs. Mr Wells' evidence may do no more than illustrate that Mr Wells was confident and resolute in his expressed position. However, Mr Wells gave evidence that he would not do it the easier, cheaper way, that is, the way posited by Mr Morabito: (T:64; 10.05.17). Mr Wells was not prepared to consider a costs scenario other than one in respect of works he endorsed. This was not his role and this position did not assist the Tribunal. The Tribunal was impressed by the manner in which Mr Morabito gave his evidence and grappled with the issues and was prepared to consider his assessment of the cost. The Tribunal prefers Mr Morabito's assessment of costs.
Item 6.2 leaking stairwell windows
74 Mr Wells maintained that a scaffold was required. Mr Wells allowed for new window frames: (T:80; 10.05.17). Mr Wells also considered that half the stone would break or get damaged, while it was removed in the course of removing the window frames: (T:81;10.05.17). Mr Wells' assessment included the sum of $3,200 for the cost of scaffolding. The respondent contended that a cherry picker would suffice and there was disagreement between the costs experts as to whether this was so: (T:82; 10.05.17).
75 Mr Wells' costing included $12,250 for supplying the new window frames. The respondent's position was that new window frames were not required. Mr Wells considered that it was highly likely that window frames were going to get scratched and damaged in taking them out and replacing them: (T:83; 10.05.17).
76 The Tribunal does not accept Mr Wells' costing in this regard. The Tribunal considers that the appropriate course is one which is more consistent with the reasonable cost of remedying the building service. The Tribunal's obligation when considering a BRO under s 36(1)(b) of the BSCRA Act is to determine the reasonable cost. The Tribunal does not consider that it would be reasonable to order the respondent to pay the applicant the costs of new windows because they might get damaged. The Tribunal did not find Mr Wells' evidence on this issue persuasive.
77 Mr Morabito gave evidence (at T:85; 10.05.17) and he costed item 6.2 at $1,350, in contrast to Mr Wells' costing of $38,330.
78 Mr Morabito gave evidence that he would pull the window frames out '[a]nd refit them the same day with the sills tray on the bottom. So there's no delay. You don't leave it open. It's not open to the elements. There's no risk for security. It's all done in one day and then the wet seal the glazing once it goes back in again': (T:86; 10.05.17).
79 Mr Morabito gave evidence that he had his window installer inspect the site. Mr Morabito was confident that the window, depicted at page 43 of hearing book 1, Exhibit 1, could be pulled outwards towards the viewer as depicted in that photo, namely it could come out from the inside: (T:89; 10.05.17). Mr Wells, who costed on the basis that the window must be pulled from the outside, conceded (at T:88; 10.05.17) that the windows probably could come out from the inside.
80 Mr Morabito's costing in relation to this item was all for labour plus the 'z flashing': (T:9293; 10.05.17). This equated to threeman days as opposed to Mr Wells' evidence that the job would require 270 hours, with two people taking probably three weeks: (T:94; 10.05.17).
81 The Tribunal does not accept Mr Wells' estimate or that his interpretation of the Scope in relation to item 6.2 was reasonable in the circumstances of this application and prefers Mr Morabito's evidence.
Item 6.3 boxcutter leaking to stairwell
82 Mr Wells considered that an amount of $335 would be required to rectify the work as opposed to Mr Morabito's quote of $1,476.
83 Mr Morabito's quote anticipated the use of the boom lift. Notwithstanding that Mr Morabito's estimate of the likely cost exceeds Mr Wells' estimate, the Tribunal prefers generally the evidence of Mr Morabito and does not propose to pick and choose between the items in the course of determining the cost to remedy the building service. The identification of the cost of the boom lift links this item with the rectification work required in item 6.2, according to Mr Morabito's assessment. Mr Morabito's assessment for this item was greater than Mr Wells', but the Tribunal considers that to pick and choose between items quoted for by the costs experts on the basis of 'the lowest', would produce an incoherent and unjust outcome by way of a price calculator order for costs that did not represent the costs of the necessary building work, which the costs experts costed on different types of works and equipment being utilised to remedy the defects.
Item 6.4 leaking from bedroom window & Item 6.5 leaking front bedroom louvre window
84 The evidence on this item was difficult to follow. The Scope referred to an item in BRO 19 as 'level one item 9'. There was no such item.
85 Mr Jones' report referred to this item as complaint items 3 and 4 from level two.
86 In his evidence, Mr Morabito clearly demonstrated that he had grappled with the substantive issue by reference to the work required, that is:
Investigate moisture ingress and ensure window sills adequately adequately flashed.
(T:99; 10.05.2017)
87 Addressing this item in the Scope Mr Morabito testified that:
So I’ve allowed for investigation into the moisture ingress and then in my contingency, that’s where the funds will be taken out to rectify it, if needed.
(T:99; 10.05.2017)
88 Mr Wells' cost for this item was $3,185.
89 Item 6.5 was described in the evidence as 'leaking front bedroom louvre window' and referred to complaint items 3 and 4 from level two of BRO 19. Mr Jones' report addressed this as complaint item 3 from level two.
90 It appears from the transcript of the hearing that there was an overlap between these two items and the experts agreed with a question from the Tribunal, following the discussion about item 6.4 and before the identification of item 6.5 that:
Right. So then the discussion just then about the louvres is, in fact, 6.5.
(T:4649; 22.02.17)
91 Further it appears from the evidence of the experts that item 6.5 had been addressed. The transcript of the experts, Mr Martelli and Mr Jones, giving evidence bears this out (T:49; 22.02.17).
92 Mr Wells gave evidence that the design was poor and his estimate, according to his report, was that the cost of fitting rubber ends to the blades was in the sum of $2,960. Mr Morabito's evidence was that it would take one hour's work to fit seals and that the cost would be $75: (T:100; 10.05.17).
93 It appeared to the Tribunal that the respondent accepted Mr Wells' estimate, (T:101102; 10.05.17), although counsel for the respondent noted that the express words of Mr Verini's concession were that 'he's saying he's not fussed' (T:102; 10.05.17) and that the respondent would, as Mr Morabito had not provided anything in that sense, deal with whatever the judgment is (T:102; 10.05.17).
94 Dealing with items 6.4 and 6.5 together, Mr Wells' total price, adding these items from his evidence and report, is $3,185 for item 6.4 and $2,960 for item 6.5, totalling $6,145. Mr Morabito's costs were $75 for item 6.4 and an additional $75 for item 6.5, together with a contingency of $5,000. The totals, viewed in that way, demonstrated there was not a large gulf between the two costings. The Tribunal finds that Mr Morabito's costing was more consistent on the evidence and the commonality between items 6.4 and 6.5.
95 Mr Vinci's report, hearing book 2, page 13, Exhibit 1, ascribed a value of $600 and $100 consecutively to these items and also included a contingency of $4,500. The Tribunal did not hear from Mr Vinci but refers to this aspect of his report as the detail buttresses the veracity of Mr Morabito's evidence which the Tribunal accepts. The Tribunal considered, but does not address in detail, Mr Vinci's report as it was not tested in the hearing and the Tribunal does not, for reasons previously given, consider that an order under s 36(1)(b) of the BSCRA Act is appropriate in this application.
Item 6.6 bedroom robe soffit and wall
96 The costs experts agreed a cost of $330.
Item 6.7 master bedroom water damaged walls,
97 This was considered within item 6.1 and item 6.8 did not form part of BRO 19 and did not form part of the Scope.
Item 6.9 water damaged alfresco barbecue cabinet doors
98 Mr Wells considered the cost of remedying this item was $7,625. Mr Morabito gave evidence that the cost of making good or rectifying this item was $5,200. The difference in price appeared explained by the supply and installation of new stone tops: (T:103; 10.05.17).
99 Mr Morabito's cost did not include the installation and supply of new stone tops: (T:104; 10.05.17).
100 The respondent's position was that the Scope did not encompass replacing the stone tops. Mr Wells gave evidence that '[y]ou can't remove the carcasses without the stone tops coming off': (T:105; 10.05.17).
101 The Tribunal accepts that there is no evidence to demonstrate that the stone tops must be replaced. The Tribunal also finds that the replacement of the stone tops was not included in the Scope. The Tribunal is not persuaded that it could accept Mr Wells as estimate of the cost in relation to this item.
102 The Tribunal was persuaded by Mr Morabito's evidence that the rectification work in relation to this item could be undertaken without replacing the stone tops: (T:106; 10.05.17).
Item 6.10 rectification of painted surfaces
103 Mr Wells considered the cost of remedying this item was $4,780. Mr Morabito considered that the costs of remedying this item were $2,500. It appeared to the Tribunal that Mr Wells included costing an item that was not within the Scope of this item, specifically, 'Paint entire west elevation to gain even colour over all textured surfaces', (T:108; 10.05.17) and Mr Wells' report at item 6.10. The Tribunal finds that this is a reference to an item that was not included in BRO 19 and not included in the Scope, namely item 6.8 and the Tribunal does not accept Mr Wells' costing on this item.
104 Compellingly, in the Tribunal's view, Mr Morabito gave evidence that he would accept an offer to perform the work in the Scope for the amount of $35,569. The Tribunal accepted Mr Morabito as a careful and credible witness. The Tribunal accepts Mr Morabito's costings for the Scope.
Submissions
105 The applicant did not accept the evidence given by Mr Verini or that called by the respondent. The applicant's position was that Mr Verini had on two occasions tried to fix the house and had not done so and asserted 'so I just know that he can't fix the house or he would have done so': (T:118; 10.05.17).
106 The respondent provided written submissions and referred to the decisions of the Tribunal in McNab and Pyramid Constructions (WA) Pty Ltd [2017] WASAT 3 and Nelson v Mardesic (1999) 22 SR WA 42 as obliging an outcome that any order against the respondent to pay should be limited to what it would cost the respondent to carry out the works. The Tribunal does not consider that these decisions apply in the circumstances of this application to require the applicant to accept the respondent's cost for the delivery of the remedial work as the Tribunal does not consider that the applicant acted unreasonably in refusing the respondent the opportunity to carry out the remedial work.
107 The Tribunal did not determine the issue of costs and notes that the applicant did incur a cost of obtaining a report from Mr Martelli in the amount of $3,740 and will invite the parties to consider making an application for costs, in the event that they do not settle the issue of costs between them.
Orders
For the reasons given above the Tribunal will cause an order to issue in the following terms:
1. The following complaint items are upheld, namely items 6.1, 6.2. 6.3, 6.4, 6.5, 6.6, 6.7 and 6.9 and in respect thereof the respondent must on or before 12 November 2017 pay to the applicant the sum of $35,569 pursuant to s 36(1)(b) of the Building Services (Complaints Resolution and Administration) Act2004 (WA) being the cost of remedying such building services.
2. The applicant and the respondent shall have liberty to apply for their costs of the proceeding, by filing with the Tribunal and giving to the other party, on or before 6 November 2017, the following documents:
(a) a schedule of the costs claimed in sufficient detail to enable the Tribunal to assess and fix any costs which might be awarded, together with any supporting documents upon which the party wishes to rely; and
(b) written submissions addressing the basis upon which it is contended costs should be awarded and the quantum of costs claimed.
3. If the either party makes an application for costs, the responding party may, on or before 21 November 2017, file with the Tribunal and give to the applicant for costs written submissions opposing the application.
4. Subject to further order, if a party makes an application for costs, the Tribunal shall, after the responding party files its written submissions, or 21 November 2017, whichever is the earlier, determine the application on the documents, and if costs are awarded, shall fix the amount of such costs.
5. The application is otherwise dismissed.
I certify that this and the preceding [107] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR D MACLEAN, MEMBER
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