Koundouris v Construction Occupations Registrar & Ors (Administrative Review) - [2015] ACAT 92

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

KOUNDOURIS v CONSTRUCTION OCCUPATIONS REGISTRAR & ORS (Administrative Review) [2015] ACAT 92

AT 99/2013
Catchwords: ADMINISTRATIVE REVIEW – rectification order – water ingress – façade cracking – whether rectification order made outside the ten year time limit

Legislation cited: Building Act 1972 ss 37, 40A, 41A

Construction Occupations (Licensing) Act 2004 ss 34, 35, 36, 38, 40

Subordinate

Legislation: Australian Standard 3700 s 2.5.2.2
Building Code of Australia 1996, Volume 1, Amendment number 11 ss FP1.3, FP1.4

Tribunal:                  President W.G. Stefaniak AM RFD
  Senior Member G. Lunney SC
  Senior Member G. Trickett

Date of Orders:  23 December 2015
Date of Reasons for Decision:         23 December 2015
ACT CIVIL & ADMINISTRATIVE TRIBUNAL        AT 99/2013

BETWEEN:

RE: MICHAEL KOUNDOURIS
Applicant

AND:CONSTRUCTION OCCUPATIONS REGISTRAR
Respondent

AND:ROBERT FARRELL
First Party Joined

AND:EDWARD PURRER
Second Party Joined

AND:THE OWNERS - UNITS PLAN 2340
Third Party Joined

TRIBUNAL:            President W.G. Stefaniak AM RFD
  Senior Member G. Lunney SC
  Senior Member G. Trickett

DATE:23 December 2015

ORDER

The rectification order made by the Registrar will be set aside and another substituted. The matter will be listed for settling a rectification order. The respondent should circulate a draft order to the parties not later than two weeks prior to the listed hearing date. The other parties should circulate suggested amendments not later than five days prior to the hearing date.

……signed………..
President W. G Stefaniak AM RFD
for and on behalf of the Tribunal

ACT CIVIL & ADMINISTRATIVE TRIBUNAL AT 99/2013

BETWEEN:

RE: MICHAEL KOUNDOURIS
Applicant

AND:CONSTRUCTION OCCUPATIONS REGISTRAR
Respondent

AND:ROBERT FARRELL
First Party Joined

AND:EDWARD PURRER
Second Party Joined

AND:THE OWNERS - UNITS PLAN 2340
Third Party Joined

TRIBUNAL: Senior Member G. Lunney SC
Senior Member G. Trickett

DATE:22 July 2016

This Rectification Order under the Construction Occupations (Licensing) Act 2004 (COLA) is made in substitution for an Order of 21 November 2013 by the Construction Occupations Registrar after review by the ACT Civil and Administrative Tribunal of that Order.

In this Order the following abbreviations are used

‘EC’ refers to the Executive Committee, the owners, Units Plan No. 2340
‘Diagnostech’ or ‘the Diagnostech Report’ refers to a report dated 17 August 2012 prepared by Diagnostech Pty Ltd and which was annexed to a notice issued pursuant to Section 34 of COLA in this matter.
‘COLA’ refers to the Construction Occupations (Licensing) Act 2004.
‘the builder’ refers to Michael Aristidis Koundouris.
‘the parties’ refers to the parties to ACAT proceeding AT99/2013
‘the residents’ refers to the residents of Block 24 Section 43 Turner in the ACT.
‘the Assessor’ refers to the individual appointed pursuant to Clause 5.
This Order is issued to Michael Aristidis Koundouris the holder of an ‘A’ class builder’s licence of 3 Torrens Street Braddon ACT in the Territory. It relates to building work undertaken by him at Block 24 Section 43 Turner in the Territory.
ORDER

The work the subject of the Order is to be completed by the builder within 7 months of the date of the making of this Order.
All work is to be done in a proper and skilful manner using new materials suitable for the purpose for which they are used and which comply with the standards under the Building Code of Australia applicable at the time of use.
Within 28 days of the date of this Order the builder shall prepare and serve on the parties a schedule of his estimate of the program of execution of works which shall include an estimate of access, and storage requirements; and of work involving loud noise, vibration or unpleasant odours.
During the execution of work the builder shall give reasonable notice of the matters referred to in the previous clause to the residents and subject to this Order shall use his best endeavours to meet their reasonable convenience in undertaking work.
Before commencing rectification work the builder shall appoint an Assessor who:
(a)shall be a qualified Building Surveyor licenced under COLA;
(b)shall be appointed in consultation with the Registrar. Should agreement not be reached within seven days of nomination of a proposed individual by either party, the President of the Master Builder’s Association or his appointee shall appoint the Assessor;
(c)shall inspect the works as they progress at intervals consistent with the stages of progress of the works and issue a Certificate in respect of completion of each item of the works certifying that in his opinion it complies with Clause 2 of this Order, and provide each of the parties with a copy;
(d)in the event that a dispute arises between any of the parties in relation to any of the works to be undertaken pursuant to the Order, the Assessor shall use his/her best endeavours to bring about a resolution of the dispute, and may in their discretion:
ioffer their opinion on any aspect of the dispute; and
iiin default of agreement between the parties to the dispute, decide the dispute or any aspect of the dispute.
Should the works be delayed by weather, availability of materials, or other sufficient cause, the Registrar may allow up to a further two months for completion. All work must be completed no later than nine months from the date of this Order.
In complying with this Order, the builder is required to:
(a)Meet all costs associated with the work done and with compliance with this Order including the costs of the Assessor.
(b)Comply with all relevant applicable laws and pay for the costs of such compliance.
(c)Reinstate or make good any damage to property, services and equipment as a result of the execution of the works and non-compliant work the subject of this Order.
(d)Remove and dispose of waste generated by the works.

Individual Issues

Façade Cracking

Generally all work is to achieve a proper and neatly finished surface to match adjoining surfaces to the full extent of the brick-veneer façade; to brickwork encasing steel columns, and including to rendered surfaces
All cracks of 1mm or more should be rectified. The work required for rectification will vary according to the type of crack
Expansion Joints
Expansion joints shall be inserted in the facade, the location and installation of which shall comply with the Masonry Code AS 3700. Locations shall not reduce the strength of the veneer and may be governed by the existing crack locations The builder shall prepare and serve on the Registrar a plan of the proposed work not less than seven days prior to the commencement of the proposed work.
All joints shall be saw-cut full height and formed with appropriate sealant and backing rod installed strictly to the sealant manufacture’s specification in a neat and workmanlike method.
Bed jointing is to be removed to allow the installation of proprietary masonry articulated expansion ties to bed joints at every 4th course to the height of the saw cut expansion joint. Compressible closed cell joint filler is to be installed to the cut joint after installation of ties, and the bed joints are to be fully mortared up leaving the vertical cut joint free of mortar.
Articulation Joints
Articulation joints shall be formed at the junction of dissimilar materials and at joints in dissimilar underlying substrates. Joints shall be 10mm wide and formed with appropriate sealant and backing rod and closed cell compressible filler installed strictly to sealant manufacture’s specification in a neat and workmanlike method
Cracks in the depth of the render only
These cracks shall be repaired after the above control joints have been installed.
All cracks 1mm wide to 5mm shall be repaired by raking out the crack and filling with non-shrink flexible filler.
Cracks through the depth of the render and into the brickwork
These cracks shall be repaired after the above control joints have been installed.
All cracks greater than 1mm wide and extending into the brickwork shall be repaired as follows. Cracks less than 5mm wide shall be repaired as for “Cracks in the depth of the render only” with the brickwork raked out and non-shrink flexible filler injected to extend into the brickwork for the full depth of the crack. Cracks greater than 5mm but less than 15mm may be repaired the same way but work may involve breaking out and replacing small sections of brickwork which shall be fully bonded into the existing wall. Affected areas of adjacent render shall be square edge cut so that no feather edges result. Render and primer shall be installed to the manufacture’s specification and properly cured all to match adjacent surfaces.
For cracks in the brickwork greater than 15mm wide the rectification work is to be determined by a qualified structural engineer engaged by the builder.
Penetration of water from balconies into habitable units
The balconies to Units 26, 28, 29 & 30 shall be exposed and a torch-on membrane applied as set out in the Diagnostech Pty Ltd report at T348-T352 and attached as Appendix 1 titled “Waterproofing Works – Level 3 Balcony Deck Waterproofing Works”; Clauses 3.1.1 to 3.1.9 inclusive. Ceramic tiles are to match existing tiles. Water testing is to be carried out for the full extent of the membraned areas by water ponding for 36 hours and inspecting the ceiling spaces below. Work is to be rectified if leaks appear. The appointed Assessor is to inspect work as a minimum: prior to membrane application, prior to installation of tile bedding at the end of the ponding period, and at completion of tiling with control joints installed. Tiles and bedding presently used as a cover should be disposed of by the builder.
Undertake remediation works as described and to standard described in Appendix 2 ‘Internal Repair Work’, items 2.2 and 2.3
Work to be done is set out in the table set out below.

Unit	Diagnostech defect number	Level	Problem	Rectification required
18	133	2	East face, under Unit 26, water penetration through ceiling	Rectify Balcony off bed 2 Unit 26. Repair internal damage to ceiling
19	146,147	2	South East corner under Unit 26, water penetration through kitchen, living room ceiling	Rectify E & S Balconies Unit 26. Repair internal damage to ceilings of kitchen & living room. Replace carpet & underlay
21	158	2	West face, under Unit 28, water penetration bedroom ceiling	Rectify Balconies off Unit 28. Repair internal damage to ceiling of bedroom
22	164/5/6	2	West face under Unit 28, water penetration through living room ceiling and wall	Rectify Balconies Unit 28. Repair internal damage to ceiling of living room, west wall & skirting, & architraves to living room window
23	172	3	South West corner, water penetration through bedroom 1 wall	Rectify Balconies off Unit 29. Repair internal damage to wall of bedroom 1
24	179-182	3	North West Corner, water penetration through bedroom 2 wardrobe	Rectify Balconies off Unit 30. Repair internal damage to bedroom 2 wardrobe walls & ceiling
25	188/189	3	West face, water penetration through living room ceiling	Rectify Balconies off Unit 30. Repair internal damage to living room ceiling
26	196-204	3	North East corner, water penetration at floor level in bedroom, kitchen, Mansard roof space	Rectify Balconies. Repair internal damage to walls, skirtings & replace carpet. Repair damage to mansard roof structure by replacing rotted timber with durability class 2 timber & repairing steel work by removing rust & fully coating with Jotaprime
27	208	3	South East corner, water penetration damage into Mansard roof	Repair damage to mansard roof structure by replacing rotted timber with durability class 2 timber
28	215/17	3	South West corner, water penetration damage in Bedroom 1, Bedroom 2 & living room	Rectify Balconies. Repair internal damage to thresholds & skirtings
29	219-220,	3	South West corner, water penetration in Bedroom 1 & Bedroom 2	Rectify Balconies. Repair internal damage to thresholds & skirtings
30	235-239 242/3	3	North West Corner, tiling on balcony, water penetration in living room, kitchen. Damage to structures in Mansard roof	Rectify Balconies. Repair internal damage to kitchen threshold, living room skirting. Repair damage to mansard roof structure by replacing rotted timber with durability class 2 timber & repairing steel work by removing rust & fully coating with Jotaprime

Basement car park roof

The podium area of the basement roof including the roof to the Waste Management area; the inside of the planter boxes, and the set down covered front northwest garden area outside Unit 2, including the walls from the set down up to the adjacent podium roof, shall be exposed and a torch on membrane applied as described in the section related to “Penetration of Water from Balconies into Habitable Units” above.
Concrete pavers and sand presently used as a cover should be disposed of by the builder.
The membrane is to extend up to the outside face of the ground floor walls at the podium level, however unlike the work to the balconies no existing wall material and thresholds are to be demolished.
The surface of the podium including the roof to the Waste Management area shall be tiled with non-slip ceramic tiles of a neutral colour satisfactory to the EC and laid to fall away from the building. The area of membrane to be covered with earth, including the walls, should have a protection board laid on top of it prior to back filling.

Corrosion of structural steel to balconies, and mansard roofs

For methodology refer to pages T364 (Corroded Steel Repair) and T783 (Structural Steel Work Finish numbered F3) from the Tribunal Documents attached hereto as appendixes 3 and 4. Adjust method as appropriate for specific situations.
Rust shall be removed using power or hand tools including wire brushes, needle gun, sanding, etc. Where surfaces have previously been painted the adjacent painted areas that are unsound shall be removed and the sound areas shall be sanded to a feather edge termination. Surfaces shall then be cleaned to remove contaminants.
Priming: Affected steel to basement, other than the lintel beam to Waste Management entry, shall be coated with Luxaprime zinc phosphate to a dry film thickness of 75 microns.
The appointed Assessor shall inspect all work prior to application of the finishing coats.
Application of finishing coats is to be by brush, roller or airless spray providing the equivalent of two full gloss coats to the full extent of structural members including already painted surfaces. Paint to be compatible with primer and existing painted surfaces.
Work in relation to the balconies is to be done as identified in the following table.

Unit No.	Ref Diagnost	Description	Remediation
31	18	Corroded balcony support steelwork. Inadequate protective coating	Remove rust. Fully coat with Jotaprime before two finishing coats
18	25	Corroded balcony support steelwork. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
134	Corroded lintel beam, balcony. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
19	140	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
21	156	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
24	176	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
25	185	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
32	21	Not in RO, in Rpt Jeffry. Corroded balcony support steelwork and balustrade. Inadequate protective coating	Remove rust. Fully coat with Jotaprime before two finishing coats Repair cracked tiling
26	D191	Not in RO, in Rpt Jeffry. Corroded balcony post. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
D200-203	Corroded support steelwork in Mansard roof space on balcony due to water entry	Remove rust. Fully coat with Jotaprime before two finishing coats
30	D230/1,233,	Not in RO. Corroded balustrade, balcony post. Inadequate protective coating	Remove rust. Fully coat with Jotaprime before two finishing coats
242	Corroded support steelwork in Mansard roof space on balcony due to water entry	Remove rust. Fully coat with Jotaprime before two finishing coats

Repair to basement structural steel including lintel over garbage storage room

Rectify by the method previously described all corrosion to structural steel in the basement. Instances of the work to be done are identified in items 11, 12, 13 and 15 of the Diagnostech Report attached hereto as Appendix 5. Where corrosion extends beyond area depicted in the photograph continue rectification work appropriately.
In relation to the steel column on grid 5 adjacent to grid H in the waste management room of the basement, item 85 of the Diagnostech Report at appendix 6, rectify corrosion at base of column. Expose base of column below level of surface of concrete to a depth sufficient to determine extent of corrosion below the surface. Engage a structural engineer to determine the method of rectification to provide a 30 year structural soundness and rectify in accordance with advice.
In relation to the lintel beam over the entry to the waste management room shown in Diagnostic Report item 43 in appendix 6, after exposure when undertaking podium work referred to above, replace the beam unless a certificate is obtained from a structural engineer and served on the Registrar and Assessor that after repair (which is undertaken) the lintel has a 30 year structural soundness.

Rectification of parapet capping

Remove existing parapet capping and fixings to Units 26, 27 and 28 which is to be disposed of by the builder.
Provide to the whole of the wall parapets to Units 26, 27 and 28 “Colorbond” metal capping in long lengths side fixed securely at 900mm centres into adequate support. Fixings to have horizontally slotted holes to allow for expansion. If fixing directly into brickwork the fixings are to be into the second top course of brickwork. Joints to be lapped 150mm, sealed and to allow for thermal movement.

Rectification of gaps in mansard roofs

Remove existing damaged or poorly installed capping/flashing and tiles to the mansard rooves of units 26 and 30 which are to be disposed of by the builder. Replace and repair all work with matching materials, and “Colorbond” metal capping/flashing in long lengths.
………………………………..
Senior Member G Lunney SC
for and on behalf of the Tribunal

Appendix 1

Appendix 2

Appendix 3

Appendix 4

Appendix 5

Appendix 6

REASONS FOR DECISION

This is an application for review of a decision by the Construction Occupations Registrar (the respondent or Registrar) to issue a rectification order against the applicant builder, Michael Koundouris, in respect of a block of units at block 24 section 43, Turner in the ACT.
The applicant is a class A builder and is the nominee of a company which developed the site by erection of a block of 32 units and an underground carpark.
Approval for construction of the building was issued on 27 September 2002. On 21 October 2003 a certificate of structural sufficiency was issued, and on 25 November 2003, the respondent issued a certificate of occupation and use.
The units were purchased and in due course, the owners identified some difficulties in their use of the premises that they alleged were due to defects in the construction of the building.

On 1 November 2012, a unit owner who was a member of the Executive Committee of the Owners Corporation lodged a complaint regarding the quality of the building work with the Registrar.
Investigations were carried out, and on 9 August 2013, the respondent issued a notice of intention to issue a rectification order. The rectification order which was issued by the respondent and which is the subject of this application was issued on 21 November 2013.

Reference

The following abbreviations have been used in the text of these reasons. Referenced sections from the relevant legislation have been reproduced at Appendix 1.
‘BA’ – Building Act 1972
‘BCA’ – Building Code of Australia 1996, Volume 1, Amendment number 11
‘COLA’ – Construction Occupations (Licensing) Act 2004
‘section 34 notice’- The notice issued by the Registrar pursuant to section 34 of COLA on 9 August 2013

The Complaint

The complaint was on a departmental form prepared for that purpose and was stated to be submitted on behalf of the Owners Corporation. It was accompanied by a report prepared by Dennis Stephenson, the principal of building consultancy firm ‘Diagnostech’ and which was dated 17 August 2012.
The complaint referred to the following as being ‘the key issues’:
(a)Water ingress into residential units and associated damage.
(b)Water ingress into basement and garbage room – resident property and corrosion of structural steel work and concrete slab damage.
(c)Premature degradation of building façade and structural cracking.
(d)Premature corrosion of steelwork, internally and externally.
(e)Lack of compliance with fire safety regulations with regard to fire stairs and protective coating to structural steelwork.
The report of Mr Stephenson was extensive and included a large number of photographs which had been taken of or concerning alleged building defects. Each defect that he reported was accompanied by a photograph and a brief description.

The Notice of Intention

After receipt of the complaint, the respondent arranged inspection of the premises, took the steps referred to in part 4 of the COLA and issued a notice of intention to issue a rectification order on 8 July 2013.
34Intention to make rectification order
(1)This section applies if the registrar believes on reasonable grounds that—
(a)a licensee or former licensee (the entity) has provided a construction service otherwise than in accordance with this Act or an operational Act; and
(b)it may be appropriate to make a rectification order.
Examples of licensee or former licensee
1     a licensed builder does building work
2     a drainer who was licensed, does sanitary drainage work while unlicensed
3     a licensed gasfitter does gasfitting work and then becomes unlicensed
Note 1If deciding under this section whether it may be appropriate to make a rectification order, the registrar must consider the considerations mentioned in s 36.
Note 2An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
(2)The registrar may give the entity, and the land owner in relation to whose land the construction service was provided, a written notice that—
(a)gives details of the rectification order that may be made; and
(b)explains why the registrar intends to make the order; and
(c)invites submissions about the making of the order within the time stated in the notice that is not less than 5 working days after the day the entity or land owner receives the notice; and
(d)states that—
(i)the registrar will not make a rectification order if the registrar is not satisfied that it is appropriate to make a rectification order in relation to the entity; and
(ii)if the registrar does not make a rectification order the Territory may authorise someone else to do the things stated in this notice, and the entity will have to pay for the things to be done.
The section 34 notice according to sub-section 34(1) should give details of the rectification order that may be made; and, explain why the Registrar intends to make the order.
In this case, the Registrar in the notice advised the applicant that he was investigating a complaint regarding the subject building, and that it may be appropriate to make a rectification order. He then outlined the history of the complaint.
The notice went on to set out the Registrar’s explanation for considering the making of an order. It states that section 37 of the Building Act 1972 requires that all building work be carried out in compliance with the BCA, and goes on to list eight categories of defect that allegedly breach the BCA and set out corresponding performance requirements. These allegations drew on the report of Mr Stephenson. A summary of them follows:
1)Cracking of external façade.
2)Penetration of water into carpark roof.
3)Penetration of water into ceilings and walls of units.
4)Penetration of water from balconies into units.
5)Corrosion of steel framework in balconies.
6)Failure of waterproofing in bathroom areas.
7)Defective parapet capping.
8)Defects in roofing.
This part of the notice concludes as follows:
In considering the criteria under section 36 of COLA, I have reason to believe that the construction of the waterproofing, drainage, roofing and external facade, fails to comply with the approved plans and standards stipulated in the Building Code of Australia.
The section 34 notice then sets out proposals for a rectification order consisting of a timetable for investigation and execution of work found to be defective.
It is appropriate to note at this stage that section 35 of the COLA provides a 10 year time limit on the issue of a rectification order. This provision will be referred to again later.
The applicant responded to the section 34 notice on 11 October 2013, immediately raising the limitation period just mentioned. This submission was developed by the applicant at the hearing and will be dealt with in due course in these reasons.
The applicant’s response also included two expert reports from a structural engineer and an ‘experienced building and construction expert’ who were later called to give evidence.
The response also alleged that the owners of the units had failed to properly maintain the building, and that there had been no breach of the BA or the BCA.
The respondent issued the rectification order on 21 November 2013. It was served on 25 November 2013.
It identified the same eight areas of alleged defect referred to above which were the subject of the section 34 notice.
The applicant filed an application for review of a decision dated 16 December 2013 on the same date. It sought review of the rectification order of 21 November 2013.

The hearing

This proceeded in the usual manner with the applicant calling his evidence first. Unfortunately because of the extended time taken by the hearing, the need to adjourn from time to time, and the availability of witnesses, it was necessary to take some witnesses out of order.
Two owners of units in the building as well as the Owners Corporation were joined to the proceedings, and in combination the Owners Corporation and the individual owners called evidence and cross examined witnesses.
Evidence was concluded on 30 July 2015 and directions were given for the preparation and filing of written submissions.

Issues

The decision which is the subject of review is the decision to issue the rectification order. That decision was preceded by another one, and that was to form the intention to make a rectification order and issue a section 34 notice as a consequence. The content of the section 34 notice will have a bearing on the content of the rectification order. The applicant submitted that the terms of the section 34 notice constrained the terms of the rectification order that could be made.
Section 34 permits the Registrar to issue a section 34 notice if a construction service has been provided by a licensee otherwise than in accordance with COLA or an operational Act, and the Registrar considers it appropriate to do so. Section 34(2)(a) provides that details of the ‘rectification order that may be made’ must be provided. It is the provision of the construction service and its nature which is the precondition for the issue of the section 34 notice, and indeed for the later making of a rectification order and details must be given. Detail of the actions required for rectification must also be given.
Both the section 34 notice and the later rectification order referred to two separate areas. The first was specification of the defects alleged; and the second was a direction regarding the appointment of an engineer to assess those alleged defects and describe the matters found to be defective with the applicant being required to rectify those defects. The second matter was something which was ancillary to the statutory requirements.
Section 35 makes it clear that a rectification order can be made if the entity provided part or all of the construction service to which the notice related; and, the Registrar after considering submissions considers that there has been contravention and it is appropriate to make an order.
The Tribunal takes the view that section 35 contemplates the possibility of some change in the position of the Registrar after considering submissions following the service of the section 34 notice with the possibility of some consequent variation in the precise terms of the rectification order made comparative to the order proposed in the preliminary notice. Section 34 refers to an order that may be made, and in some cases it may be a question of degree when comparing the proposed terms of the section 34 notice with those made in the final order. Adequate warning of the defects alleged to constitute breaches must be given.

Methodology

There is a great deal of evidence. The transcript runs to 2626 pages, and all parties filed statements of the evidence of witnesses prior to their being called. The eight issues listed in the section 34 notice formed the focus of the evidence, and the applicant raised a number of preliminary issues prior to evidence being given.
Since these were raised by the applicant both in his opening and in written submissions, it is appropriate to examine these to the extent necessary at this stage prior to moving to the individual items in the rectification order. Those issues are listed at paragraph 17 of the applicant’s written submissions.

Time – Section 35(3) of the COLA Act

This issue was raised by the applicant at the commencement of the hearing. The Tribunal was invited to deal with it as a preliminary issue, however, that was not considered appropriate and the hearing proceeded. However, it has remained as a matter for determination by the Tribunal. The applicant submits that sub-section 35(3) of COLA applies and that the time in which a valid rectification order (RO) could be made had expired. Sub-section 35(3) is reproduced below.
(3)However, the registrar may not make an order under section 38 in relation to the entity if a submission is made that satisfies the registrar that the act that caused the contravention happened, or ended, more than 10 years before the day the registrar proposes to make the order.
Example of contravention
A builder built a house without a building approval. The registrar is satisfied that the building of the house started 12 years ago and finished 9 years ago. The registrar may make a rectification order in relation to the construction service of building the house.
The factual background to this issue was not in contention. It was as follows:

27 Sep 02

Building approval granted for construction of ‘Manhattan’ apartments

3 Feb 03

New certifier appointed

24 Jul 03

Majority of construction work completed

13 Oct 03 to 28 Oct 03

Certificates of warranty received from trades relating to completed work

4 Nov 03

Certifier conducts final inspection. Notes certificates not complete and fire clearance to be arranged

20 Nov 03

The certifier signs the declaration for the Certificate of Occupation and Use

25 Nov 03

Certificate of Occupation and Use issues

The applicant identified a number of parts of section 35(3) for consideration within this issue, and submitted that the words ‘may not’ where used are proscriptive, leaving the Registrar with no discretion. This interpretation was not opposed by the respondent, and the Tribunal accepts this submission.
The beginning and end of the ten year term is a matter of controversy between the parties. The ten year period ends on “the day the registrar proposes to make the order” and extends back from that time. The act that caused the contravention must have happened or ended within that period.
The applicant submits that a narrow and literal interpretation must be applied so that an action done by the licensee must be identified which is associated with the contravention alleged. If there are a series of acts, then those that occur within the ten year period are potentially subject to an RO. The respondent and the parties joined advocated a broader approach. They say that ‘act’ can not only be an individual and simple action but also a composite action consisting of a number of individual actions. On this interpretation, the construction of a building by a builder can be considered to be an ‘act’. So that the act that caused the contravention, being the construction of the building, ended when the building was completed. Use of ‘ended’ supports the ending of a process which can be considered not only as a complex continuing process, but also as a large number of simple but related actions.
The respondent specifically relies on part of the Explanatory Memorandum to the COLA which in relation to clause 35 states as follows:
...Clause 35 enables the registrar to make an order under Clause 37. The registrar must be satisfied that the person is contravening, or has contravened, this Act or an operational Act and that it is appropriate to make a rectification order. However the clause prevents an order from being given where the registrar is satisfied that the relevant contravention happened, or was part of something that ended more than 10 years previously and provides an example. (emphasis added)
The Tribunal accepts the submission that it is the ending of the construction of the building which is ‘the act’ which constitutes the relevant contravention of the applicant builder in the present circumstances. It also finds that the ‘act that caused the contravention’ must be interpreted against the context in section 34 and section 35 of a rectification order being made where a licensee has provided a construction service in contravention of a defined Act. This context requires consideration of the nature of the construction service that has been provided, so that in appropriate circumstances, it would be reasonable to regard the construction service provided by a builder as including all activities going to make up the construction of a completed building.
If the applicant’s contention is correct and the act that caused the contravention is a single and discrete simple action such as the provision of plumbing to a bathroom or provision of plumbing to an apartment complex, then for a complex building there could be multiple section 34 notices and multiple rectification orders issued. It would be much more practical from this point of view to issue one rectification notice which relates to all matters.
This interpretation is supported by the example given at the end of the section which describes the building service provided by the builder as being the construction of the house. Thus the ‘act that caused the contravention’ was the completion of the building in contravention of COLA or an operative Act. The specifics of that failure are referred to later in these reasons for decision.
The date of the ending of the act causing contravention is therefore the date of completion of the building. In this case, the certifier made a final inspection on 4 November 2003, however there were further fire safety formalities to be attended to. On 20 November 2003, the certifier signed a declaration for an application for a ‘certificate of occupation and use’ which was issued on 25 November 2003. It was on that date that the building could be regarded as having been completed.
The date from which the ten year period is to be calculated is ‘the day the registrar proposes to make the order’. The applicant submitted that this occurred immediately prior to the Registrar signing the RO. The countervailing argument is that a rectification order was proposed by the Registrar when he commenced the process referred to in section 34.
If the submission made by the applicant were accepted there would be little point in the legislature referring to an order that was proposed, it would be clearer to fix the later point in time as being ‘the time at which the order is made’. If the time were not the earlier time when investigation is commenced and appropriate submissions are called for, the process could be disrupted or even completely frustrated by delay caused by the licensee.
The Tribunal is therefore satisfied that the date from which the ten year period is retrospectively calculated is the day on which the Registrar signed the section 34 notice which was 8 July 2013. The rectification order was therefore made within the permitted time period.

Section 34 Notice

As has been stated in the introduction, this is the review of a decision made by the Registrar to make a rectification order following the issue of a notice of intention to issue a rectification order. The review is somewhat unusual because of the preliminary requirement to issue the notice of intent.
The applicant argues that the content of that notice constrains the extent of the rectification order that can be made, and the Tribunal agrees with the general substance of that submission. Notice of matters potentially requiring rectification should be given in the section 34 notice in order to allow the licensee an opportunity to comment and make submissions. However, the extent and content of the notice and its relationship to the final order made will vary and will have to be dealt with on a case by case basis.
It is appropriate to note the discretionary nature of the powers given to the Registrar under section 34. Aligned to that consideration is the evident motivation of the legislature in ensuring disclosure of the problems alleged to be requiring rectification, and permitting an opportunity to investigate and answer them. Issues of fairness are prominent, and there is little room for a confined and legalistic approach to the role of the section 34 notice. It could be expected that in most cases there would be some submissions made by an entity following the service of a section 34 notice and that as a result of those submissions the Registrar may alter his position. A degree of flexibility in the system could be expected to allow for that process.
Having stated that the Tribunal generally agrees with the applicant’s submissions regarding the section 34 notice, it will be necessary to return to this topic in relation to some of the individual issues.

Interpretation of the BCA and how it is ‘picked up’ by the BA

At paragraph 53 of his written submissions, the applicant submits as follows:
There is no doubt that Section 40A [of the Building Act 1972] imposes an obligation to carry out building work in accordance with the requirements of the BCA. However, the section is only contravened if the person does not have a reasonable excuse.
He further submits that the respondent is incorrect in asserting the whole of the BCA is picked up by sections 37(a) and (b). He submits that those subsections deal only with the materials used in building work and their methods of use. “Neither paragraph picks up the majority of the provisions of the BCA, which are not related to building materials but to general matters of building construction work.” The submission continues as follows:
57.But none of the allegations considered by the Tribunal has anything to do with particular building materials and their method of use. They relate to matters such as water penetration and the like, which are not related to building materials but to general matters of building construction.

The Tribunal does not agree with this submission. It is possible that all provisions of the BCA are to do with the materials used in building work and their methods of use so that section 37(a) and (b) in combination do pick up all of the BCA. Whether the respondent alleges that point is moot because the respondent at paragraph 4.3 of his written submissions abandons any reliance on sections 37(a) and (b).
However it is clear that section 37 does impose a requirement of compliance with the BCA when building work is being undertaken as described in the section. Section 40A reproduced below, creates a criminal offence when there is non-compliance without reasonable excuse. Whether non-compliance with the BCA for the purposes of section 40A is defined by the requirements of section 37(a) and (b) is a question which will have to be answered in other proceedings, since it would only arise in a prosecution for an offence. The terms of section 37 are quite clear and express the obligations of persons engaged in building work to comply with the provisions of the BCA. Consideration of whether a rectification order should be made is not to decide whether an offence has been committed.
Finally at paragraph 58, the applicant submits as follows:
Accordingly, the applicant submits that when the Tribunal comes to consider allegations involving the provisions of the BCA, it can only do so in the context of the requirements of Section 40A not Section 37.
This may become academic because of the respondent’s abandonment of the first two subsections of section 37, however, the Tribunal cannot agree with that statement. The provisions of section 37 are clear and whether they are applicable will become apparent when individual issues are dealt with. As has been stated previously, the Tribunal is not considering, and has not been asked to consider, whether the applicant has committed an offence under section 40A. Considerations of whether he had a reasonable excuse for failure to comply with a provision of the BCA would only be relevant in the context of such a prosecution. They are extraneous to a consideration of whether a rectification order should be made under part 4 of COLA.
The above determination is relevant to the applicant’s similar submissions in relation to section 41A of the BA the relevant provisions of which are reproduced below.
Section 41A relates to compliance with section 37. The applicant’s submissions continue with reference to section 41A which creates an offence relating to non-compliance in the following terms:
41A Carrying out building work in breach of s 37
(1)Building work (other than maintenance or cleaning of a specialised system) shall not be begun or carried out except in compliance with section 37.
There is a defence to the offence created for a builder if he had a reasonable belief that section 37 had been complied with in the terms of sub-section (5) set out below:
(5) It is a defence to a prosecution against a person other than the owner of a parcel of land if the person satisfies the court that—
(a) he or she had carried out the building work under a contract entered into by him or her with another person or at the request and on the instructions of another person; and
(b) that he or she believed on reasonable grounds that—
(i) a building approval had been issued in relation to the building work; and
(ii) the work has been carried out in compliance with section 37.

Failure to comply with approved plans

The applicant submits that a failure to follow the approved plans should not be permitted to form the basis for a finding of defective work. The submission is primarily based on two grounds. The first that there was no reference to at all to failing to build in accordance with the approved plans in the section 34 notice or the section 38 order. A sub-argument related to this is ‘is it possible to identify the approved plans having regard to lapse of time, and some apparent gaps in the plans that are available’. The second was the interaction of section 37(d) with section 40(1)(a) which authorises a certifier to certify that a building has been completed substantially in accordance with the approved plans.
As to the first, the section 34 notice does refer to the approved plans in the quotation reproduced at paragraph 15 above.
The Tribunal has already referred to a flexible approach to the content of the section 34 notice, provided areas of alleged defect are sufficiently identified. This issue will arise in individual items and will be dealt with then.
As to the second matter, the section 40(1)(a) issue. Section 37(d) is quite plain and unambiguous. Section 40(1)(a) does repose some discretion in a certifier, however, that is a separate issue to the fundamental statement of obligation contained in section 37(d).
To the extent that section 37(d) is an issue, this will be dealt with later in the context in which it arises.

Individual issues

1)Cracking of external façade

The section 34 notice at paragraph 16 refers to ‘Cracking in the External Facade’. It is referred to as being a breach of Performance Requirement BP1.1 of the BCA. This area of alleged defect in the building is dealt with as a separate topic in the Diagnostech report of 17 August 2012 included in the T documents and a copy of which was included with the section 34 notice. The notice refers to a number of sections of Appendix A to the report which set out individual instances of cracking. Each instance is accompanied by a photograph.
The section 34 notice reference to the performance requirement is referred to above. The summary at page 93 of the Diagnostech report alleges breach of the requirements of section 37(a), (b), (c), and (d) of the BA. It also refers to the performance requirement previously referred to and to section 2.5.2.2, Differential Movements of the Masonry Structures Code which is Australian Standard 3700 (AS 3700) and which is called up by section B1.4 of the deemed to satisfy provisions of the BCA.
Section 2.5.2.2, Differential Movements Masonry Structures is quoted in the report as follows.
A masonry member or structure shall be designed to allow movements to be controlled or isolated so that damage to the masonry, the building, and its components is avoided….
The sections of the Diagnostech report which are referred to in the rectification order are not grouped together, although some are identified by proximity to specific units. Each instance is identified by a description and photograph. The report describes (at paragraph 3.2.1) the defects as follows:
The recorded defects comprise inadequate construction of the building structure. Inadequate control of building movement has resulted in uncontrolled cracking of façade elements including masonry, EPS panels, fibre cement sheeting, render and applied coatings.
Cracks have been recorded as defects in the Defects Schedule only where they are determined by the author to be significant cracks i.e. in excess of 1mm wide. The façade render elements also exhibited numerous minor cracks i.e. less than 1mm in width, however these have not been incorporated in this report.
The Tribunal has had the advantage of inspecting the building. A sample of the cracking defects referred to in the report was inspected and noted.
The applicant in his written submissions asserts that the cracking identified is superficial and limited to affecting the render only.[1] It was further suggested that the cracking should have been attended to when the exterior of the building was painted by the owners’ corporation for the first time. If there was any need for the insertion of control joints, this should have been done at the same time. Presumably it followed that this work should have been done at the owners’ corporation’s expense.
[1] Paragraph 136ff
There is a report by Alan Tingcombe, a specialist structural engineer, and director of the engineering firm known as AWT Consulting Engineers. He was called as an expert witness by the applicant. He had read the Diagnostech report and had visited and inspected the site on 23 June 2014.
Touching the issue of the façade cracking, he was critical of the statements regarding structural integrity at paragraph 3.2.2 of the Diagnostech report, observing that statements relating to structural integrity were not supported by any calculations or evidence of that type. He said that all buildings crack including a building such as the subject premises comprised of steel, concrete and masonry members. It was in the nature of the structure.
He concluded the part of his report which discussed the façade cracking as follows:
The level of cracking and structural movement is to be expected in a building of this age and type, especially considering the diversity of the materials used in and around the structure.
In making the rather sweeping statement contained in that sentence, he does not descend to the level of detail of individual instances referred to in the Diagnostech report; he does not distinguish between cracks of different widths; nor does he comment on the issue of and role of control joints inserted to deal with the inevitable movement in the structure he refers to.
The Tribunal notes the views of Mr Tincombe, however is of the view that his opinion has only limited application due to his lack of reference to control joints and cracking greater than 1mm in width.
Mr Ken Murtagh, an engineer who worked on the construction of the building and was called to give evidence by the parties joined, said in his statement that cement based render requires control joints to limit shrinkage cracking.
The applicant responded to the section 34 notice by letter of 9 December 2013. He accompanied this submission with the reports of two qualified experts. The first of these was Darren Sault, who was a senior structural engineer with ten years experience as a structural engineer, mostly in Canberra.
Amongst other documents, he had been provided with the Diagnotech report. One of the areas dealt with briefly by Mr Sault in his report was the façade cracking. He visited the site on two occasions in September 2013. His comment on this issue on the second page of his report is as follows:
Cracking was primarily noticed to the external façade in the following areas: To the eastern façade at the interface between concrete slabs and rendered masonry walls over/under western entry. Cracking at the parapet level through an area of fascia.
These cracks were noted to be façade cracks only, and minor in size (up to 1mm). The extent of this cracking is not considered extensive. It is my opinion that the cracking is due to building movement and/or settlement, and should be repaired with a flexible sealant, and monitored for any further movement or cracking. There is no suggestion that the building structure is inadequate due to several minor cracks noted in the facade.
The Tribunal is unable to accept the opinion of Mr Sault. His description of the number of locations of cracking indicates that he had not taken into account the detail contained in the Diagnostech report at the time of his inspection. His description of all the cracking as being minor and less than 1mm is contrary to the photographic evidence; the observations of Mr Stephenson, and those of the Tribunal. He also does not note the absence or otherwise of control joints.
The other expert opinion obtained by the applicant was from Martti Honkanen who was the principal of Mareva Building Consultants with tertiary architectural qualifications.
In dealing with the allegation of cracking in the external façade he said that minor cracking due to shrinkage and similar causes resulting in hairline cracks less than 1mm width were not a building fault and could be addressed as part of routine maintenance. However, he concluded this section of his report as follows:
I am in agreement with the stated allegation, however, to the extent that cracking at joints where the substrate structure is able to undergo differential movement such as at control joints, where control joints should have been provided but have not been provided, and at junction of dissimilar materials are building defects and breaches of the BCA Performance Requirements BP1.1(a)(iii) regarding local damage only.
Mr Honkanen provided a second report of 8 September 2014 which became Exhibit F at the hearing, however this report does not shed further light on the façade cracking issue.
There were many photographs of external cracking tendered in evidence. Exhibit AV shows a crack measured with an approximately 5 mm width.
The Tribunal is therefore of the view that where cracking has occurred of less than 1mm in width, this does not constitute a defect in the building and is not considered a breach of the BA or BCA. However, the cracking noted in the Diagnostech report is a breach of section 37(b) & (c) of the BA, the performance requirements of the BCA alleged, and AS 3700 as alleged.
Rectification of the defects listed in the Diagnostech report should be included in a rectification report. Detailed description of the work to be done should be left to submissions during the settling of a rectification order.
2) Penetration of water into carpark roof
This issue was described in the section 34 notice as ‘penetration of water into the carpark roof affecting the steel support beams’. Eleven of the sections in the Diagnostech report were cited as evidence of this problem.
It is not alleged by the Registrar that there is a relevant breach relating to the basement walls, and the Tribunal accepts this submission. Water entry through the walls was not the subject of notification in the section 34 notice. The roof of the basement was not treated in the Diagnostech report as an item separate from the basement walls so it will be necessary to be aware of this distinction during analysis.
The section 34 notice referred to this alleged defect as follows:
2. The penetration of water into the carpark roof affecting the steel support beams is a breach of the following BCA requirement:
BCA-Part F1 Performance Requirements FP1.3.
A drainage system for the disposal of surface water must:
a)convey surface water to an appropriate outfall; and
b)avoid the entry of water into a building; and
c)avoid water damaging the building.
The plans for the building between pages T-Doc 756 and T-Doc 764 show that the basement extends beyond the footprint of the upper part of the building to the west, north and east. Generally the plans show that these areas were to have a concrete slab roof to the basement and that this slab was to have a waterproof membrane and to be covered by ceramic tiles. An example of this can be seen on the section plan D-D at T-Doc 762. However, there is an area at the front of the building where the podium is stepped down and garden is planted over the podium roof.
The applicant gave evidence that a torch-on waterproof membrane was applied to the slab over this stepped down area of the podium of the basement at the front of the building.[2] This was in accordance with the plans which showed a waterproofing membrane in this area.
[2] Transcript of Proceedings 14 December 2014 page 585 and T-Documents page 762
His evidence appears to conflict with the evidence of the witnesses from Roof and Balcony Solutions (‘RnB Solutions’) referred to later to the effect that a paint on membrane was found in this area.
The unit owners engaged a waterproofing firm, RnB Solutions, to investigate and report on water leaking from the podium area. Mr Miller and Mr Parnaby from that firm inspected the area and a report and some photographs were admitted into evidence. They found that there was indeed no membrane over the podium other than in the front garden area where paint on membrane had been used. Although there was no membrane elsewhere on the top of the podium area slab, paint on membrane had been applied there to the interface of the walls of the building and the horizontal surface of the podium. However, they found that the membrane had not been turned up the wall above paver height so that the edge was exposed and vulnerable to possible failure. They also found that the membrane had been terminated on the slab so that the leading edge was exposed and vulnerable to possible to failure. There was delamination due to moisture.
An inspection pit was dug down to the podium outside Unit 2 at the northwest corner of the building where the slab was stepped down. Mr Miller a principal of the firm, described taking the inspection pit down to the podium level and finding on the horizontal surface a protective covering, Corflute, overlying and adhering to a paint on membrane.[3] When a portion of the membrane was lifted, the substrate underneath was found to be sodden. Photographs included in Exhibit AW1 were taken in the basement below where the excavation had been made showing areas of obvious water entry.
[3] Transcript of Proceedings 6 May 2015 page 2119
However in the other podium area, the plans showed ‘ceramic tiles on waterproofing membrane laid to falls’. The applicant decided to alter this specification.[4] He added Xypex to the cement which was poured to form the roof, omitted the membrane and substituted concrete pavers laid on sand for the ceramic tiles. No provision was made for drainage of the area above that part of the podium by creation of a fall across it. No approval for this change was obtained. The available documented landscape plans do show concrete pavers as opposed to ceramic tiles in the relevant area, however, amendments approved in the plans do not relate to the changes made by the applicant.
[4] Transcript of Proceedings 14 December 2014 page 585
The applicant explains why the plans in relation to the terrace decks, also referred to as the basement podium roof were not complied with in his evidence.[5] He said that he made this change because the pavers had more slip resistance than a ceramic tile does. He did not say why approval for the change was not obtained.
[5] Transcript of Proceedings 14 December 2014 page 587
Although the section 34 notice refers to breach of performance requirement FP1.3 (disposal of surface water) of the BCA, FP1.4 is also relevant since the external part of the slab forming the ceiling of the basement is its roof in the podium area. The entry of water through the external slab is in breach of this performance requirement. FP1.4 is reproduced below:
BCA-Part F1: Performance Requirements FP1.4:
A roof and external wall (including openings around windows and doors) must prevent the penetration of water that would cause –
(a)Unhealthy or dangerous conditions, or loss of amenity for occupants; and
(b)Undue dampness or deterioration of building elements.
There is a limitation noted to this provision relating to class 7 buildings. However this does not apply due to the presence of structural steel beneath the slab roof and its vulnerability to corrosion.
The Diagnostech report notes at paragraph 3.9.1 as follows.
A review of construction plans revealed that a waterproofing membrane to basement perimeter block walls and ground level terrace decks was a requirement of the works.
……. Diagnostech consider the issue to be non-compliant with the plans and specifications for the building.
The applicant notes the use of ‘avoids’ in FP1.3, and submits that in the context its use does not exclude the entry of all water into the building. The Tribunal considers that in the present context the meaning of avoid is ‘prevent’, and that by its wording, the performance requirement excludes entry of water into the building by surface water.
The applicant submits that there is no breach of FP1.3 because the basement is a class 7 building. However, inspection of the basement and photographs in evidence indicate that the concrete slab making up the roof is supported by steel beams, and water in the area of them is causing corrosion. The Tribunal finds that a membrane and ceramic tile covering for the external slab was specified in the plans to prevent intrusion of surface water into the basement in order to prevent damage to the steel supporting beams. Photographs accompanying the Diagnostech report show corrosion to steel structural members due to the presence of water.

The section 34 notice alleged that there had been breach of performance requirement FP1.3 of the BCA but did not mention the plans or FP1.4. It was not until the hearing that the focus of breach moved to non-compliance with the approved plans. The plans if complied with would have satisfied FP1.3 and FP1.4. The issue was the subject of evidence given by the applicant at the hearing and other of his witnesses and also expert evidence called by the applicant and the other parties.
The respondent submits that the plans specify that the basement roof has to have “ceramic tiles on waterproof membrane laid to falls”.[6] This specification has not been complied with and is therefore a contravention of section 37(d) of the BA.
[6] Respondent’s submissions at [21.1]
In his evidence, Mr Murtagh stated that he would not expect Xypex to be used as a primary membrane. His expectation was that he would expect a waterproofing membrane to be applied to the top of the slab even if Xypex was used as an additive to the concrete slab.[7]
[7] Transcript of Proceedings 5 May 2015 page 1999
The applicant submitted that there was no identified source for the water to be coming in through the basement roof. Mr Stephenson was asked directly “Is there water that penetrates through the roof in your view?---Yes.”[8] It was evident that there was cracking in the slab over the podium which provided a means of entry of water. In a report relating to the corrosion of steel members in the basement, Dr Jeffrey a chemist called to give evidence on corrosion said at paragraph 37 of his report which was accompanied by two photos:
Corrosion on the blue channel beam in the basement had been caused by ingress of water from above as shown by run marks in [photo] 3 and edge ponding in [photo] 4. Corrosion has not been caused by atmospheric moisture.
[8] Transcript of Proceedings 11 March 2015 page 1749
Mr Stephenson said that any post construction cracking would render the Xypex treatment useless.[9] He went on to say the following:
A lot of cracking is anticipated in slabs, and it doesn’t necessarily represent a problem at all. It does represent a problem if it’s an external slab and you’re relying on Xypex to keep it waterproof.[10]
[9] Transcript of Proceedings 11 March 2015 page 1748
[10] Transcript of Proceedings 11 March 2015 page 1749
Ingress of water into the basement beneath the podium area was facilitated by the change from ceramic tiles. Mr Miller said that ceramic tiles laid to drain to the perimeter would provide a better water protection mechanism than concrete pavers.[11]
[11] Transcript of Proceedings 6 May 2015 page 2127
The Tribunal is satisfied that the Ultrafloor method of construction was likely to cause cracking in the concrete floor slabs over the podium due to the composite nature of the slab and differential movement of the building elements. This was demonstrated by the opinions in expert testimony and observations during deconstruction of the balconies. Water was observed to be dripping from the roof area causing efflorescence and a nuisance when dripping onto motor vehicles parked below. The Tribunal finds that the source of the water was surface water passing through the slab due to an absence of an effective membrane and tiling system to exclude that water which was specified in the plans. It is also a breach of BCA FP1.3 and FP1.4 since no alternative solution was formulated.
Failure to comply with the plans is a breach of section 37(d) of the BA. It results in non-compliance with performance requirement FP1.3 and FP1.4 of the BCA, and forms a basis for the making of a rectification order.
There is some existing corrosion of structural steel members in the basement area. Rust on all steel members under the podium area should be removed, and the members coated with rust inhibitor. Mr Murtagh referred to the provision of ground level collars to protect the base of columns.[12] These collars should be provided by way of remediation. Rust should be removed from all structural steel, which is then to be fully primed as specified by the engineer on T-Doc 783, ‘Structural steelwork finish’.
[12] Transcript of Proceedings 5 May 2015 page 2007
The podium area of the basement roof including the roof to the garbage hopper area and the front northwest garden area should be exposed and a torch on membrane provided with suitable flashing where appropriate. This area with the exception of the under garden area to the west should be covered by ceramic tiles of a neutral colour agreed to by the parties joined and with a non-slip surface with falls away from the building. The lintel beam at the entry to the garbage hopper area should be inspected by an engineer after initial rust removal. If in the engineer’s opinion the previous rusting has rendered the lintel structurally unsound (ie. an expected reduction in useful life expectancy of >30 years), it should be replaced. The beam is to be fully primed as referred to above.
3) Penetration of water into ceilings and walls of habitable units
This allegation relates to penetration of water into the building, and has been treated separately in the section 34 notice and the rectification order. The respondent in his submissions has combined his submissions in this area with those of Item 4. The individual components of this item shall be dealt with individually.
Item 86 – This relates to a defect in the ceiling in a common area on the first level. There is inadequate evidence to indicate that this defect is related to water entry. The Tribunal makes no finding in relation to it.
Items 143 to 145 – These items relate to Unit 19, a unit on the second level with significant problems due to entry of water. Two other items, 146 and 147, which relate to Unit 19 are attributed to water entry from the balcony to Unit 26 above. The Diagnostech report does not attribute the noted problems in Unit 19 noted as items 143 to 145 to a particular cause, preferring to recommend further investigation. The Tribunal is not able on the evidence available to make any specific findings in relation to these items. It seems likely that if leaking from the balcony above is attended to, these items will be addressed.
Item 222 – This is listed as an isolated occurrence described as ‘poorly detailed service penetration’, evidence of water penetration. This shows an area of a balcony adjacent to Unit 29. This services penetration will have to be dealt with if waterproofing of the balcony is carried out.
Item 249 – This shows an isolated occurrence of water penetration and further investigation as to the cause is recommended. The possibility of a roof leak is referred to. The Tribunal has insufficient information to make any order.
No item in this grouping should be included in a rectification order.
4) Penetration of water from balconies into habitable units
This issue was described in the section 34 notice as follows:
The penetration of water from the balconies into habitable units is in breach of the following BCA requirement:
BCA-Part F1: Performance Requirements FP1.3:
A drainage system for the disposal of surface water must:
(a)      convey surface water to an appropriate outfall; and
(b)      avoid the entry of water into a building; and
(c)      avoid water damaging the building
The balconies on this level, level 3, are in fact roof terraces, since they form the roof of portion of the unit below. However, for ease of reference they will continue to be termed ‘balconies’.
The performance requirement quoted above is not the most appropriate to describe the entry of water from the balconies into units because the balconies form the roof of part of the units below. FP1.4 is more appropriate in those circumstances.
The nature of the problem was notified in the section 34 notice and the matter was extensively canvassed during the hearing. The specification of FP1.3 in the section 34 notice appears to be an error of no consequence.
The unit block is made up of five levels of units. The first level consists of nine units numbered from 1 to 9, and this is referred to as the ground floor. It is immediately over the basement which houses resident’s storage, car parking, and a garbage management area. The second level is known as level 1, and it has eight units numbered from 10 to 17. It has the same number of units and same floor plan as the third level above it.
Units 18 to 25 are on level 2 (the third level of units). Units 26 to 30 are on level 3, (fourth level). All these units have balconies which are roof terraces. There are two units on level 4: 31 and 32. All units have balconies. The section 34 notice does not specify the individual units that are the subject of this alleged defect, however the rectification order that was made by the Registrar does so. It alleges water entry issues related to Units 17 to 32 inclusive. With the exception of Unit 17, the units are from level 2 to level 4. Unit 17 has been included by virtue of a tiling issue which is shared by some of the other units however, this does not appear to have translated into a water entry issue at this stage. The defect alleged in Unit 17 has not been the subject of adequate section 34 notification and will not be included in any rectification order.
The five units on level 3 are set back from the edge of the lower building footprint and there are balconies to the edge of the building at which there is a brick and render parapet. One of the five units has one balcony, two of them have two balconies, and two of them have three balconies. The balconies are tiled and there is a mansard roof which forms an ornamental feature at each corner of the building and at the front and the rear, and with the exception of the side balconies to the north and south, divides the balconies from each other. The balconies on level 3 form part of the roof of the units on level 2 immediately below level 3. Each unit on level 2 has some part of its habitable rooms (which include bedrooms) under part of a balcony on the level above.
All units on level 2 and level 3 except for Unit 20 which is under Unit 27, the balconies of which have been rectified, are reported as having issues arising from entry of water from the balconies on level three. When the rectification work was done at Unit 27, the tiles were removed, the bedding removed, the membrane removed, wall areas and doorways rebuilt, new membrane was applied and the tiles relaid. This work has been associated with amelioration of entry of water into units. It was done by contractors for the owners’ corporation.
The applicant undertook some remediation work on the balconies of Unit 29. The nature of this remediation work was described briefly in the evidence. Evidence from the owner of the unit below indicates that although successful in stemming the leaks into her unit temporarily, there was a reappearance of water later.
The rectification work that has been done to date has revealed that some of the waterproofing work that had been carried out on these balconies was defective. Evidence was given by a witness who supervised the remedial work on Unit 27, Mr Brett Cawsey. He described a number of faults which contributed to the entry of water into the adjoining unit and roof void. These permitted water to penetrate through the slab into the unit below.
Mr Cawsey described the installation of a torch on membrane to the balcony substrate after removal of the previous water proofing membrane; provision of sand screeds and laying of tiles with adequate expansion joints; removal of the doors, reinstating wall timbers and cladding; installation of membrane behind the doors and sills and along the bottom of the walls.
The firm that undertook the work on the balconies of Unit 27 were asked by the managing agent to prepare a quote for the rectification of the balcony areas of Unit 26. This quote was admitted into evidence as Exhibit AS4. This work was not carried out, however the listing of work to be done is an indication of the work required to achieve rectification of each balcony on level 3 and is referred to later.
Evidence regarding the remedial work done on level 3 balconies caused the applicant during the hearing to reassess his approach to this item of the section 34 notice and rectification order that had been made. In their written submissions, counsel for the applicant submitted the following after briefly reviewing the available evidence regarding the remedial work:
….the Applicant accepts that the Tribunal has enough evidence from these sources to find that the waterproofing was not done on these balconies in accordance with the BCA requirement FP1.4….
Specifically, the Applicant admits that the waterproof membrane was not properly laid
(a)to the hobs up and under the balcony doors, and
(b)turned up adequately above the level of the skirting tile; and
(c)at the junction between the blueboard and the concrete floor below the mansard roofs.
In making these admissions, the applicant pointed out that the section 34 notice had said that the leaking from the balconies was alleged to be a breach of performance requirement FP1.3 which relates to drainage systems. The applicant said that his admission was for the purposes of FP1.4 which was the appropriate performance requirement and that the reference to FP1.3 presented a problem for the Tribunal.
The applicant also referred to evidence given in relation to the deconstructed balconies which related to the discovery of cracks in the concrete slab consistent with them having been caused by differential movement of the Ultrafloor components. The applicant submitted that it was unnecessary for the Tribunal to make any finding in relation to that cracking since the work that would be done in relation to the insufficiency of installation of the membrane against the walls and under the floors would result in rectification of that cracking.
The Tribunal does not agree with these submissions in their entirety. Firstly as to the performance requirement specified, FP1.4 describes the situation better, however FP1.3 is not entirely inappropriate. The section 34 notice gives adequate notice of the problem and in the view of the Tribunal meets the provisions of section 34.
As to the suggestion that the admission should be restricted to findings made by the Tribunal, the Tribunal does not agree. It is appropriate to identify all causal contribution to the leaking from the balconies to ensure that the leaking is fully rectified. It would be inappropriate to assume that rectification of one identified cause will result in rectification of all other causes. The evidence indicates that the paint on membrane used, although possibly suitable for other applications, was not suitable for use on the steel and composite slab construction method adopted for the building in the area of the level 3 balconies.
The applicant also submitted that it was unnecessary for the Tribunal ‘to explore any other issues to do with leaks in the vicinity of the balconies’. The comments in the preceding paragraph are appropriate for this submission.
The applicant pointed out that the evidence of the finding made on deconstruction of the two balconies was not put to the applicant’s witnesses. In those circumstances, the applicant submitted that it would be inappropriate for the Tribunal to make adverse findings about any of those witnesses on this issue. The Tribunal generally agrees with this submission.
However, having regard to the admissions that have been made and the applicant’s concession that some rectification work is indicated, it is not proposed to extensively canvass the evidence regarding this issue. The work that was done in rectification of the balconies of Unit 27 has already been referred to. It is however appropriate also to mention an inspection by Mr Stephenson of work being done by the applicant in rectification of the balconies of Unit 29.
Mr Stephenson prepared a report marked as Exhibit AO1 on water proofing failure. It is referred to by him at transcript page 1868 as being prepared for Parchem the supplier of the paint on membrane. A balcony of Unit 29 had leaked into Unit 24. However, there is a statement of Nancy Pedersen of 30 January 2014, owner of Unit 23. She noticed water leaking into her unit in mid 2007 in the second bedroom through the ceiling. Inspection by the applicant resulted in rectification works. However in 2009 water started to enter the unit through a down light in the main bedroom.
Mr Stephenson visited the site while rectification work was being carried out by the applicant. At time of the visit, the tiles, bedding, skirting and waterproof membrane had been removed from the balcony exposing the concrete slab. He saw sealant joints which had been made when the membrane removal exposed cracking in the slab. They went perpendicularly from the building wall to the parapet wall. He thought that thermally induced cracking in the slab had occurred.
Under a heading ‘Possible Cause Discussion’ he noted that the top and bottom surfaces of the balcony were affected by differential temperature gradients. The upper tiled surface was exposed to what he described as great thermal variations. He said: “This may result in differential expansion and contraction dynamics across the full expanse of the floor slabs leading to cracking.” He listed a number of factors which may have allowed water to bypass the balcony:
·   Ineffective perimeter overflashings or overlapping of wall coatings etc.
·   Poor detailing at membrane turn up with no effective fillets and/or bond breakers.
·   Potential detachment of the threshold hob and subsequent failure of the membrane turn up detail.
·   Reliance on the waterproofing membrane to span across different building substrates, ie masonry to fibre cement sheeting.
·   Ineffective termination at drainage outlets.
·   Potential shearing of the membrane due to failure to accommodate movement in the applied tiling.
He said that he thought that the membrane selected was not suitable for the task. There was cracking of the slab and it was required to span different building material junctions. He thought that a sheet membrane system would have been more suitable.
He expressed his view about the use of paint on membrane on the Ultrafloor method of construction used.
My experience has shown that you get a pattern of a series of cracking in Ultrafloor all the time……. So I think that … it’s a poor choice of trying to waterproof an Ultrafloor slab.[13]
[13] Transcript of Proceedings 11 March 2015 page 1749
The observations by Mr Stephenson were repeated when his firm was engaged by the owners corporation to undertake rectification work on Unit 27. The evidence given by Mr Cawsey is referred to above.
The evidence indicates that there are a number of problems with the waterproofing of the balconies on level 3 requiring rectification. These problems have resulted in water from the balconies entering the units on level three and penetrating down through the slab into the units on level 2 below.
The problems which have contributed to the water entry issue include the following:
(a)The unsuitability of a paint on membrane used over a steel and concrete slab Ultrafloor construction method.
(b)Absence of expansion joints in the tiled surface.
(c)Inadequate waterproofing at intersection of differential substrates.
(d)Absence of a concrete hob specified in the plans.
(e)Inadequate levels of the drainage inlets from the balconies.
(f)Absence of overflashing at the wall and terrace junction.
The remediation which has been carried out at Unit 27 has been effective and acts as a guide to the means to effectively remediate the problems. There is no reason to believe that the poor construction methods seen at both Units 26 and 27 have not been replicated at all other units on level 3. Water entry problems do not seem to be experienced in the units on level 4.
All balconies on the third level except for Unit 27 will have to be rectified. Work will need to be done on the balconies on level 3 which permit water to enter the adjacent Unit. Set out below is a summary of the problems located in the Diagnostech Report and which will be included in a rectification order.

Unit

Diagnostech defect number

L

v

l

Problem

Rectification required

18

133

2

East face, under Unit 26, water penetration through ceiling

Rectify Balcony off bed 2 Unit 26. Repair internal damage

19

146,147

2

South East corner under Unit 26, water penetration through kitchen, living room ceiling

Rectify E & S Balconies Unit 26. Repair internal damage

21

158

2

West face, under Unit 28, water penetration bedroom ceiling

Rectify Balconies off Unit 28. Repair internal damage

22

164/5/6

2

West face under Unit 28, water penetration through living room ceiling and wall

Rectify Balconies Unit 28. Repair internal damage

23

172

3

South West corner, water penetration through bedroom 1 wall

Rectify Balconies off Unit 29. Repair internal damage

24

179-182

3

North West Corner, water penetration through bedroom 2 wardrobe

Rectify Balconies off Unit 30. Repair internal damage

25

188/189

3

West face, water penetration through living room ceiling

Rectify Balconies off Unit 30. Repair internal damage

26

196-204

3

North East corner, water penetration at floor level in bedroom, kitchen, Mansard roof space

Rectify Balconies. Repair damage interior unit and mansard roof structure

27

208

3

South East corner, water penetration damage into Mansard roof

Repair damage in roof space

28

215/7

3

South West corner, water penetration damage in Bedroom 1, Bedroom 2 & living room

Rectify Balconies. Repair damage interior unit.

29

219-221,

3

South West corner, water penetration in Bedroom 1, Bedroom 2, Hall

Rectify Balconies. Repair internal damage.

30

235-239 242/3

3

North West Corner, tiling on balcony, water penetration in living room, kitchen. Damage to structures in Mansard roof

Rectify Balconies. Repair internal damage

31

245 253

4

East shower screen. Balcony skirting tiles

Not related to balconies below

32

255,258, 261

4

West tiling on balcony.

Not related to balconies below

Evidence was given during the course of the hearing of a proposal by the owners’ corporation to repair the balconies of Unit 26. To that end a quote was prepared by Remtech which had repaired the balconies at Unit 27. It was dated 22 February 2011, and was marked at Exhibit AS4. It is an indication of the work that will be necessary for the rectification of the balconies on level 3. The work referred to is as follows:
·   Strip up and dispose of all balcony tiling and thin bedding screeds
·   Inspect the exposed concrete balcony slabs and carry out any necessary repairs to the substrate to ensure compatibility and adhesion bond for the new waterproofing system
·   Re-detail the drainage inlets to ensure flush mounting with the balcony floor surface
·   Install a new high quality torch applied bitumen sheet waterproofing system
·   Progressively remove and reinstall balcony doors to enable extension of the waterproofing system up and behind the sill thresholds
·   Progressively remove and reconstruct the bases of the masonry walls and the light weight cladding walls to enable the waterproofing system to be properly detailed and overflashed
·   Encapsulate the solid masonry parapet walls with a high build liquid acrylic membrane
·   Lay new bedding screeds for drainage falls and retile to match the existing as close as possible with fully formed expansion joints to the full perimeter and laterally across the tiling to form approximate square areas of tiling between joints
Rectification of the balconies and internal damage listed above should be included in a rectification order.
Listed below are defects included in the rectification order which do not relate to water penetration from level 3 balconies into habitable units. NL refers to matters not litigated in the tribunal:

Unit

Diagnostech Defect No.

Defect

17

128

Drummy skirting tiles on balcony

20

149

Balcony, support steelwork, cracked render. Note, under Unit 27 with rectified balconies

25

184-186

Miscellaneous tiling and cracking problems on balcony (also water penetration see above)

26

191-195

Miscellaneous cracking etc on balcony, shower screen leak (also above).

27

209

Balcony wall cap flashing

28

210-214

Wall cap flashing, masonry wall cracking, partition wall cladding crack, shower screen

29

218, 222, 223, 224, 225, 226/7

Shower screen, poorly detailed service penetration NL, cracked masonry NL, poor detailing ceramic tiling (will be rectified with rectification of balcony), door reveal separation NL, masonry cracking

30

228-234, 240-241

Shower screen, separation of elements NL, steel corrosion etc on #5 steel, masonry crack NL, poor detail services entry NL

31

18, 244-252

Corroded steelwork on #5, penetration of services NL, shower screen, crack bathroom ceiling NL, steel balustrade, ensuite ceiling water penetration NL

32

19-21, 254, 256/7, 259, 260

Steel balustrade #5, kitchen ceiling NL

During the course of the hearing evidence of inspection above the ceilings of units on level 2 indicated that underslab insulation had possibly not been installed under the level 3 slab as indicated on the plans. As this had not been identified as an issue in the section 34 notice, the Tribunal has not furthered enquiry into that issue and makes no findings in relation to it.
5) Corrosion in the steel framework of the balconies
This item is confined to corrosion on the balconies. There is a separate item which includes reference to corrosion of structural steel materials in the basement. The section 34 notice referred to this item as follows:
The corrosion of the steel framework of the balconies is in breach of the following BCA requirement:
BCA – Part F1: Performance Requirements FP1.3
A drainage system for the disposal of surface water must:
(a)   Convey surface water to an appropriate outfall; and
(b)   Avoid the entry of water into a building; and
(c)   Avoid water damaging the building.
The quoted performance requirement does not seem to be appropriate for all instances of observed corrosion. According to Mr Stevenson in the Diagnostech report, the problem was inadequate coating of the steel and subsequent exposure to moisture. There were multiple reasons for the steel becoming wet, however inadequate drainage was not the primary cause of the corrosion. The Tribunal accepts the evidence of Mr Stephenson that inadequate coating of the steel was the principal cause which would relate the breach to section 37(c) and (d) of the BA.
Set out below is a table of the documented occurrences of corrosion of steel elements associated with the balconies. Some of these were in the Diagnostech report, but not included in the Registrar’s rectification order.

Unit No.

Ref Diagnost

Description

Remediation

31

18

Corroded balcony support steelwork. Inadequate protective coating

Remove rust. Fully coat with Jotaprime before two finishing coats

18

25

Corroded balcony support steelwork. Inadequate protective coating system.

Remove rust. Fully coat with Jotaprime before two finishing coats

134

Corroded lintel beam, balcony. Inadequate protective coating system.

Remove rust. Fully coat with Jotaprime before two finishing coats

19

140

Corroded lintel beam. Inadequate protective coating system

Remove rust. Fully coat with Jotaprime before two finishing coats

21

156

Corroded lintel beam. Inadequate protective coating system

Remove rust. Fully coat with Jotaprime before two finishing coats

24

176

Corroded lintel beam. Inadequate protective coating system

Remove rust. Fully coat with Jotaprime before two finishing coats

25

185

Corroded lintel beam. Inadequate protective coating system

Remove rust. Fully coat with Jotaprime before two finishing coats

32

21

Not in RO, in Rpt Jeffry. Corroded balcony support steelwork and balustrade. Inadequate protective coating.

Remove rust. Fully coat with Jotaprime before two finishing coats Repair cracked tiling.

26

D191

Not in RO, in Rpt Jeffry. Corroded balcony post. Inadequate protective coating system.

Remove rust. Fully coat with Jotaprime before two finishing coats

D200-203

Corroded support steelwork in Mansard roof space on balcony due to water entry

Remove rust. Fully coat with Jotaprime before two finishing coats

30

D230/1,233,

Not in RO. Corroded balustrade, balcony post. Inadequate protective coating.

Remove rust. Fully coat with Jotaprime before two finishing coats

242

Corroded support steelwork in Mansard roof space on balcony due to water entry.

Remove rust. Fully coat with Jotaprime before two finishing coats

Attention to all the above work should be included in a rectification order. The steel is to be fully primed as specified by the engineer on T-Docs 783 ‘Structural Steelwork Finish’.
6) Failure of waterproofing in the bathroom areas
Although this issue was the subject of some evidence, the respondent decided not to pursue it. The parties joined indicated that the owners had mostly attended to rectification of issues themselves, and that only one bathroom may the subject of an order.
However, apparently after some discussion the bathroom issue was not pursued by any of the parties. The Tribunal does not consider that the state of the evidence together with the approach of the parties to the issue justifies further examination of it.
7) Defective capping of parapet
This issue was described in the section 34 notice as follows:
The defective capping of the parapet is a breach of the following BCA requirement.
BCA-Part F1: Performance Requirements FP1.4:
A roof and external wall (including openings around windows and doors) must prevent the penetration of water that would cause:
(a)Unhealthy or dangerous conditions, or loss of amenity for occupants; and
(b)Undue dampness or deterioration of building elements.
This allegation does not specify the location of the capping, but the design of the building makes it clear that the parapet referred to is the parapet which forms the outer border of the level 3 balconies.
Particulars of this allegation in the rectification order made by the Registrar were sought (together with others) by the applicant from the respondent on 29 May 2014. Question 21a asked for details of the breach alleged of performance requirement FP1.4. The answer was to the effect that the defective nature of the application of the capping would permit water penetration contributing to water entry from the balcony areas of level 3 to the units at that level and the level below.
A further question relating to section 37 of the BA was answered indicating that the parapets had not been constructed in a proper and skillful way.
The Diagnostech report, Exhibit AP, included a number of photographs cited as instances of defective attachment of the parapet capping. Instances of defective capping were confined to the balconies of Units 26, 27 and 28. The photographs showed locations where joins in the capping were no longer providing a waterproof union.
The section 34 notice refers to the capping generically, however the area of the building to which this issue could apply is relatively confined, (level 3 balconies), and the nature of the problem can be identified by inspection of the balconies and examination of the Diagnostech report which accompanied the notice as attachment ‘A’. The Tribunal considers that notice of this defect and the nature of it has been sufficient in the circumstances.
The applicant submits that the capping allegation is ‘tied’ to the BCA performance requirements, and the respondent is purporting to expand the allegation by including an allegation of contravention of section 37(c) of the BA. The applicant submits this is impermissible. The Tribunal does not agree. Adequate notice has been given of the physical defect alleged it is not necessary to have strictly pleaded the statutory basis for the breach in the section 34 notice.
The applicant relied on the evidence of Mr Honkanen a building expert called by the applicant. His evidence was to the effect that there may have been better ways to attach the capping, however, the way in which it had been attached was acceptable.
Mr Stephenson gave evidence and a number of documents were tendered during the course of that evidence which became Exhibits AP1 to 6 and AQ. He said that it was not good practice to attach the capping through the top surface since it provided a point of entry for water and attachment by that means would not allow for the expansion and contraction of the metal which could be expected in that location. He said that lack of provision for expansion and contraction had led to opening of joins in the capping sections which would be contributing to the known water penetration issues.
The Tribunal has noted the separation of the joins in the metal both in the photographs which form part of the Diagnostech report and observations during inspections of the building. Insofar as there is a conflict in the evidence of Messrs Honkanen and Stephenson, the Tribunal prefers and accepts that of Mr Stephenson since his views are supported by the observations of the Tribunal referred to.
Defects in the capping application have been identified on three of five balconies on level 3. In the circumstances it is justifiable to assume that although the fixing of the capping was by the same method in the unaffected units, local conditions have resulted in problems associated with the fixing method not having manifested. Thus the capping in the affected units should be rectified in the manner suggested by Mr Stephenson, leaving the unaffected units as is.

Gaps and Defects in the roof

This issue is identified in the section 34 notice as follows:
The gaps and defects in the roof are a breach of the following BCA requirement:
BCA-Part F1: Performance Requirements FP1.4:
A roof and external wall etc…
In the rectification order made by the Registrar, items 98, 99, 100, 101 and 102 were referred to. During the course of the hearing, the parties joined tendered a presentation of photographs which became Exhibit AK. This included photographs of defects in the mansard roofs of Units 26 and 30. There was evidence that patching material shown in the photographs and some silicone sealant which could not be seen had been applied by residents or the owners’ corporation in order to prevent the entry of water.
The applicant opposed the making of an order in relation to the roof on a number of bases.
One was that it had not been demonstrated that any defect in the roof had contributed to the water leaking into the units on the second and third levels. It was noted in the submission that the defects were referred to in the Diagnostech report as being a ‘potential’ cause of water ingress.
The Tribunal considers that if original construction work is shown to be defective because of breach of section 37(c) of the BA, then the requirements of section 34 and section 35 of COLA are met. It is not necessary that the work which contravenes section 37 of the BA having not been done in a proper and workmanlike manner should necessarily have resulted in damage. Absence of damage would be a consideration where a discretionary decision was being made by the Registrar. It is a reasonable inference from the evidence that the leaking alleged has contributed to the water entry problems, particularly those associated with the Mansard roofs.
Another was that a beach of the BCA had not been identified by Mr Stephenson. Each instance cited by Mr Stephenson involves some degree of criticism by him of the workmanship related to the defect indicating a breach of section 37(c) of the BA. Again this is sufficient for the purposes of section 34 and section 35.
The defects involved in this issue are relatively minor and can be relatively easily attended to. They should include the area identified by the parties joined in Exhibit AK. All matters referred to above should be the subject of a rectification order.

Conclusion and directions

The rectification order made by the Registrar will be set aside and another substituted. The matter will be listed for settling a rectification order. The respondent should circulate a draft order to the parties not later than two weeks prior to the listed hearing date. The other parties should circulate suggested amendments not later than five days prior to the hearing date.
……signed……………..
President W. G Stefaniak AM RFD
for and on behalf of the Tribunal
HEARING DETAILS

FILE NUMBER:	AT 99/2013
PARTIES, APPLICANT:	Michael Koundouris
PARTIES, RESPONDENT:	Construction Occupations Registrar
PARTIES, 1^st PARTY JOINED	Mr R Farrell
PARTIES, 2^nd PARTY JOINED	Mr E Purrer
PARTIES, 3^rd PARTY JOINED	The Owners – Units Plan 2340
COUNSEL APPEARING, APPLICANT	Mr Erskine SC, Ms Katavic
COUNSEL APPEARING, RESPONDENT	Mr Clynes, Mr Buckland
SOLICITORS FOR APPLICANT	Trinity Law
SOLICITORS FOR RESPONDENT	ACT Government Solicitor
RESPRESENTING PARTIES JOINED	Mr R Farrell, Mr E Purrer
TRIBUNAL MEMBERS:	Mr W.G Stefaniak AM – Appeal President, Mr G. Lunney SC – Senior Member, Mr G. Trickett – Senior Member
DATES OF HEARING:	8-11 December 2014, 16-17 December 2014, 3-6 February 2015, 10-12 March 2015, 5-8 May 2015, 28-30 July 2015

SCHEDULE 1

Building Act 1972

Requirements for carrying out building work
Building work shall not be carried out otherwise than in accordance with the following requirements:
(a)the materials used in the building work shall conform to the standards for those materials set out in the building code;
(b)the methods of use of those materials in the building work shall conform to the acceptable methods of use set out in the building code;
(c)the building work shall be carried out in a proper and skilful way;
(d)the building work shall be carried out in accordance with the approved plans;
(e)if an owner-builder’s licence has not been granted in relation to the building work—the building work shall be carried out by a person who is the holder of a builder’s licence of a class that authorises the carrying out of the building work;
(f)if an owner-builder’s licence has been granted in relation to the building work—the building work will be carried out by the person to whom the licence has been granted;
(g)the licensee in charge of the building work shall take—
(i)all the safety precautions specified in or with the application for the building approval; and
(ii)any other safety precautions that a certifier or a building inspector may from time to time specify.

40ACompliance with building code
A person shall not, without reasonable excuse, carry out building work except in accordance with the building code.
Maximum penalty: 50 penalty units.

Construction Occupations (Licensing) Act 2004

Intention to make rectification order
(1)This section applies if the registrar believes on reasonable grounds that—
(a)a licensee or former licensee (the entity) has provided a construction service otherwise than in accordance with this Act or an operational Act; and
(b)it may be appropriate to make a rectification order.
Examples of licensee or former licensee
1     a licensed builder does building work
2     a drainer who was licensed, does sanitary drainage work while unlicensed
3     a licensed gasfitter does gasfitting work and then becomes unlicensed
Note 1If deciding under this section whether it may be appropriate to make a rectification order, the registrar must consider the considerations mentioned in s 36.
Note 2An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
(2)The registrar may give the entity, and the land owner in relation to whose land the construction service was provided, a written notice that—
(a)gives details of the rectification order that may be made; and
(b)explains why the registrar intends to make the order; and
(c)invites submissions about the making of the order within the time stated in the notice that is not less than 5 working days after the day the entity or land owner receives the notice; and
(d)states that—
(i)the registrar will not make a rectification order if the registrar is not satisfied that it is appropriate to make a rectification order in relation to the entity; and
(ii)if the registrar does not make a rectification order the Territory may authorise someone else to do the things stated in this notice, and the entity will have to pay for the things to be done.

When rectification order may be made
(1)This section applies if—
(a)the registrar has given an entity notice under section 34; and
(b)the entity provided the construction service, or part of the construction service, to which the notice relates; and
(c)after considering any submissions made within the time mentioned in the notice, the registrar is satisfied—
(i)the entity is contravening, or has contravened, this Act or an operational Act; and
(ii)it is appropriate to make a rectification order in relation to the entity.
Note 1If deciding under this section whether it is appropriate to make a rectification order, the registrar must consider the considerations mentioned in s 36.
Note 2A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including any regulation (see Legislation Act, s 104).
(2)The registrar may make an order under section 38 (Rectification orders) in relation to the entity.
(3)However, the registrar may not make an order under section 38 in relation to the entity if a submission is made that satisfies the registrar that the act that caused the contravention happened, or ended, more than 10 years before the day the registrar proposes to make the order.
Example of contravention
A builder built a house without a building approval. The registrar is satisfied that the building of the house started 12 years ago and finished 9 years ago. The registrar may make a rectification order in relation to the construction service of building the house.
NoteAn example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
Considerations for deciding under s 34 and s 35
(1)In deciding whether it is, or may be, appropriate to make a rectification order in relation to an entity that is contravening, or has or may have contravened, this Act, the registrar must consider the following:
(a)any injury, loss or damage caused, or that could have been caused, by the contravention;
(b)if a rectification order is proposed—how the proposed order may affect people affected by the contravention.
Examples of effect of contravention, including injury, loss and damage
1reduction in safety, reliability, durability, soundness, functionality, accessibility, serviceability, service life, usability, usefulness, amenity, aesthetic quality, value or efficiency of thing affected by contravention
2adverse affect on health of user of thing affected by contravention
NoteAn example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
(2)The registrar may consider anything else that is relevant.
(3)However, the registrar need not consider whether the registrar, planning and land authority, a certifier or other entity has—
(a)given a certificate, or approval under—
(i)this Act or an operational Act in relation to the construction service; or
(ii)the Planning and Development Act 2007 in relation to the place where, or the territory lease under which, the construction service was provided; or
(b)otherwise endorsed the construction service under this Act or an operational Act.

Building Code of Australia

FP1.3 A drainage system for the disposal of surface water must- (a) convey surface water to an appropriate outfall; and (b) avoid the entry of water into a building; and (c) avoid water damaging the building.

FP1.4 A roof and external wall (including openings around windows and doors) must prevent the penetration of water that could cause- (a) unhealthy or dangerous conditions, or loss of amenity for occupants; and (b) undue dampness or deterioration of building elements. Limitation: (a) (b) , or (c) an or . FP1.4 does not apply toa Class 7 or 8 building where in the particular case there is no necessity for compliance; or a garage, tool shed, sanitary compartment the like, forming part of a building used for other purposes; or open spectator stand open-deck carpark

27 Sep 02	Building approval granted for construction of ‘Manhattan’ apartments
3 Feb 03	New certifier appointed
24 Jul 03	Majority of construction work completed
13 Oct 03 to 28 Oct 03	Certificates of warranty received from trades relating to completed work
4 Nov 03	Certifier conducts final inspection. Notes certificates not complete and fire clearance to be arranged
20 Nov 03	The certifier signs the declaration for the Certificate of Occupation and Use
25 Nov 03	Certificate of Occupation and Use issues

Unit	Diagnostech defect number	L v l	Problem	Rectification required
18	133	2	East face, under Unit 26, water penetration through ceiling	Rectify Balcony off bed 2 Unit 26. Repair internal damage
19	146,147	2	South East corner under Unit 26, water penetration through kitchen, living room ceiling	Rectify E & S Balconies Unit 26. Repair internal damage
21	158	2	West face, under Unit 28, water penetration bedroom ceiling	Rectify Balconies off Unit 28. Repair internal damage
22	164/5/6	2	West face under Unit 28, water penetration through living room ceiling and wall	Rectify Balconies Unit 28. Repair internal damage
23	172	3	South West corner, water penetration through bedroom 1 wall	Rectify Balconies off Unit 29. Repair internal damage
24	179-182	3	North West Corner, water penetration through bedroom 2 wardrobe	Rectify Balconies off Unit 30. Repair internal damage
25	188/189	3	West face, water penetration through living room ceiling	Rectify Balconies off Unit 30. Repair internal damage
26	196-204	3	North East corner, water penetration at floor level in bedroom, kitchen, Mansard roof space	Rectify Balconies. Repair damage interior unit and mansard roof structure
27	208	3	South East corner, water penetration damage into Mansard roof	Repair damage in roof space
28	215/7	3	South West corner, water penetration damage in Bedroom 1, Bedroom 2 & living room	Rectify Balconies. Repair damage interior unit.
29	219-221,	3	South West corner, water penetration in Bedroom 1, Bedroom 2, Hall	Rectify Balconies. Repair internal damage.
30	235-239 242/3	3	North West Corner, tiling on balcony, water penetration in living room, kitchen. Damage to structures in Mansard roof	Rectify Balconies. Repair internal damage
31	245 253	4	East shower screen. Balcony skirting tiles	Not related to balconies below
32	255,258, 261	4	West tiling on balcony.	Not related to balconies below

Unit	Diagnostech Defect No.	Defect
17	128	Drummy skirting tiles on balcony
20	149	Balcony, support steelwork, cracked render. Note, under Unit 27 with rectified balconies
25	184-186	Miscellaneous tiling and cracking problems on balcony (also water penetration see above)
26	191-195	Miscellaneous cracking etc on balcony, shower screen leak (also above).
27	209	Balcony wall cap flashing
28	210-214	Wall cap flashing, masonry wall cracking, partition wall cladding crack, shower screen
29	218, 222, 223, 224, 225, 226/7	Shower screen, poorly detailed service penetration NL, cracked masonry NL, poor detailing ceramic tiling (will be rectified with rectification of balcony), door reveal separation NL, masonry cracking
30	228-234, 240-241	Shower screen, separation of elements NL, steel corrosion etc on #5 steel, masonry crack NL, poor detail services entry NL
31	18, 244-252	Corroded steelwork on #5, penetration of services NL, shower screen, crack bathroom ceiling NL, steel balustrade, ensuite ceiling water penetration NL
32	19-21, 254, 256/7, 259, 260	Steel balustrade #5, kitchen ceiling NL

Unit No.	Ref Diagnost	Description	Remediation
31	18	Corroded balcony support steelwork. Inadequate protective coating	Remove rust. Fully coat with Jotaprime before two finishing coats
18	25	Corroded balcony support steelwork. Inadequate protective coating system.	Remove rust. Fully coat with Jotaprime before two finishing coats
134	Corroded lintel beam, balcony. Inadequate protective coating system.	Remove rust. Fully coat with Jotaprime before two finishing coats
19	140	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
21	156	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
24	176	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
25	185	Corroded lintel beam. Inadequate protective coating system	Remove rust. Fully coat with Jotaprime before two finishing coats
32	21	Not in RO, in Rpt Jeffry. Corroded balcony support steelwork and balustrade. Inadequate protective coating.	Remove rust. Fully coat with Jotaprime before two finishing coats Repair cracked tiling.
26	D191	Not in RO, in Rpt Jeffry. Corroded balcony post. Inadequate protective coating system.	Remove rust. Fully coat with Jotaprime before two finishing coats
D200-203	Corroded support steelwork in Mansard roof space on balcony due to water entry	Remove rust. Fully coat with Jotaprime before two finishing coats
30	D230/1,233,	Not in RO. Corroded balustrade, balcony post. Inadequate protective coating.	Remove rust. Fully coat with Jotaprime before two finishing coats
242	Corroded support steelwork in Mansard roof space on balcony due to water entry.	Remove rust. Fully coat with Jotaprime before two finishing coats