Leo v Queensland Building Services Authority
[2012] QCAT 640
•12 December 2012
| CITATION: | Leo v Queensland Building Services Authority and Anor [2012] QCAT 640 |
| PARTIES: | Michael Gregory Leo (Applicant/Appellant) |
| v | |
| Queensland Building Services Authority (First Respondent) Joseph Meznaric (Second Respondent) |
| APPLICATION NUMBER: | GAR052-11 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | 14-15 May and 8 June 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Michelle Howard, Member |
| DELIVERED ON: | 12 December 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The decision of the Queensland Building Services Authority on 14 February 2012 to issue Mr Leo with Direction to Rectify and/or Complete Number 35818 is confirmed. 2. Michael Gregory Leo must pay Joseph Meznaric’s costs fixed in the sum of $14,690.21 within 28 days of these orders. 3. Michael Gregory Leo’s application for costs is dismissed. |
| CATCHWORDS: | GENERAL ADMINISTRATIVE REVIEW – review of Queensland Building Services Authority decision to issue direction to rectify – where builder claims his unconventional building methods will meet performance requirements – where engineering and building evidence that construction inadequate – where no certification or engineering certificates obtained by builder despite advanced stage of construction Queensland Building Services Authority Act 1991, s 72, schedule 2 R v His Honour Judge Miller and Builder’s Registration Board ex parte Graham Evans and Co (Qld) Pty Ltd [1987] 2 Qd R 446 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Leo represented himself |
| RESPONDENT: | Mr B Turnbull of HWL Ebsworth Lawyers represented the Queensland Building Services Authority Mr I Kennedy of McLaughlins Lawyers represented Mr Meznaric |
REASONS FOR DECISION
This is a somewhat unusual case involving Michael Gary Leo, a builder who holds a Queensland Building Services Authority (BSA) licence as a ‘Builder-Low Rise.’ Mr Leo uses some unconventional building methods which he refers to as the guitar building system, described as a radical, lightweight system.[1] He describes himself a master builder, ‘in the medieval sense of the word’, with 50 years experience in ‘the evolution of Australia’s ‘single-skin shelter tradition.’[2]
[1] Exhibit 1, DVD at exh 3 CD-Rom entitled ‘A Smart Tip for ESD’.
[2] Exhibit 1, exhibit 4, ‘Profile’.
The level of adherence by Mr Leo with the usual standards and practices of the building industry during the construction of the house in question appears minimal. This is apparently deliberate and Mr Leo seeks to justify this on the basis of his own expertise and knowledge of building and engineering, despite the fact that he does not have engineering qualifications. Although he claims having completed an architecture degree in 1974, he also acknowledges that he is not a registered architect.[3]
[3] Exhibit 1, exhibit 4, and exhibit 4 attachment E.
Although a builder is not competent to determine structural adequacy of aspects of construction unless using standard or normal building practices, involving the use of the Australian Standards, the Building Code of Australia (BCA), and applying manufacturer’s specifications for building components, Mr Leo did not present any engineering evidence in the proceedings. He sought to rely instead on a general reference from an engineer with whom he had a previous business relationship, considered him capable in designing, developing and constructing lightweight structures, and who it seems had signed off on other buildings constructed by Mr Leo.[4]
[4] Exhibit 1, exhibit 4, especially attachment B.
However, at the hearing, Mr Leo acknowledged that although he had designed and completed construction of the subject house to an advanced stage, an engineer had not in fact seen the plans for the particular house, nor inspected it.[5] Further, he acknowledged that he not himself been deemed by the certifier to be a competent person for the project, which would have entitled him to certify various usual stages of construction.[6] None of the stages of construction have been certified.
[5] Transcript, 14 May 2012, 50-53.
[6] Transcript, 14 May 2012, 46-50.
When a BSA inspector, Mr Campbell, went to the premises following the homeowner’s complaint, he ‘didn’t know what he was seeing’.[7] An engineer, Mr Van de Hoef, was engaged to undertake an inspection because of the unconventional nature of the construction.[8] Subsequently, the BSA issued Direction 35818 to Mr Leo requiring him to rectify or complete building works, specifying 33 separate items. Some items were directed adopting Mr Van de Hoef’s report, and others on the basis of Mr Campbell’s assessment, including for non-compliance with manufacturer’s specifications.[9]
[7] Transcript, 15 May 2012, 96.
[8] Transcript, 15 May 2012, 96.
[9] Exhibit 9, and Transcript 15 May 2012, 96-97.
Mr Leo applied to the Tribunal to review the decision dated 14 February 2011 directing him to rectify or complete domestic building work at the premises. The premises are located at Currumbin Valley and owned by Mr Joseph Meznaric. Mr Meznaric is the second respondent.
Mr Leo seeks orders setting aside the direction. The BSA submits that the direction should be confirmed. Mr Meznaric seeks orders that the direction be varied to require demolition of the house and a recommencement of building works, or in the alternative, that the direction be confirmed. BSA suggests that if the Tribunal concludes that the works can not be rectified that the orders for demolition sought by Mr Meznaric are appropriate.
The evidence was heard over 14 and 15 May, 2012. The matter was further listed for submissions on 24 May, 2012. On Mr Leo’s written application, the proceeding was subsequently adjourned to 8 June 2012. Mr Leo again wrote requesting an adjournment. I indicated that I would deal with that further application on 8 June. However, Mr Leo did not attend. At that stage, I made directions for the filing of written submissions, firstly by the BSA and Mr Meznaric, then by Mr Leo, and submissions in reply by the BSA and Mr Meznaric. All submissions were finally to hand in the later part of July 2012.
In his written submissions filed on about 29 June 2012, Mr Leo seeks to expand the review proceedings to include a review of the another decision dated 16 March 2011, in which BSA determined that the contract had been validly terminated by Mr Meznaric, upon Mr Leo’s default. The time for Mr Leo to apply for review of the decision expired 28 days after Mr Leo was notified of it.[10] Therefore, in the ordinary course of postal delivery, it expired in April 2011. Accordingly, although he does not articulate it, Mr Leo also impliedly seeks an extension of time to make that second review application. He appears to suggest that it was not made at the time on the basis of legal advice.
[10] QCAT Act, s 33(3), (4).
The BSA does not consent to or oppose that application, but submits that it is irrelevant to the outcome of these review proceedings. Mr Meznaric does not consent to the addition of the further review application, in respect of which he submits that review of that decision was not foreshadowed, argued or pursued at the hearing. Further, although Mr Leo raised the allegation that he terminated of the contract as an issue in his initial review application, Mr Meznaric points out in his submissions that Mr Leo did not provide any evidence to the Tribunal to support this allegation. The evidence on this issue, including copies the letters exchanged between lawyers for the parties at the time, was provided by the BSA and Mr Meznaric. That said, (in the absence of a statutory provision to the contrary), there is generally no onus of proof in administrative review proceedings.[11] There is no such formal onus in the respect of the review of the decision about the direction to rectify, or the other review application which Mr Leo now seeks to make.
[11] Laidlaw v QBSA [2010] QCAT 70.
Although the Tribunal must deal with matters in a manner which is economical and informal,[12] it must also do so in a way which is fair and just,[13] which affords natural justice to all parties concerned.[14] Although there is some evidence before the Tribunal concerning the termination of the contract, it was not provided for the purpose of the second review which Mr Leo now contemplates. It was provided in the context of the existing proceedings as the circumstances of termination may be relevant to the exercise of the Tribunal’s discretion in determining whether to confirm the BSA’s direction to Mr Leo.
[12] QCAT Act, s 3.
[13] QCAT Act, s 3.
[14] QCAT Act, s 28(2) and 28(3)(a), (e).
Although I give some consideration to the issue of termination, ultimately I accept the BSA’s submission that in the circumstances of this case, it is ultimately irrelevant which party terminated the contract. I would make the orders I do, irrespective of who terminated it.
If I allowed the review of the termination decision, issues of procedural fairness would have to be addressed. The BSA and Mr Meznaric would be entitled to an opportunity to provide any further evidence and submissions in response. This would ultimately be to no avail in these review proceedings for the reasons I have outlined. Therefore, I dismiss Mr Leo’s belated application to include the review of the termination decision in these proceedings.
Background to the contract, the works and the termination
Mr Leo and Mr Meznaric entered into a Master Builders Residential Building Contract on 20 October 2008 for the construction of a residential dwelling and a carport at the subject premises.
The contract price was $255,059. Progress payments were due under the contract at the following somewhat unusually-worded, stages:
a)deposit $12,603;
b)Stage 1: preliminaries, core footings, prefab sheeted walls, ceilings and partitions and Tomewin Transportables delivered $59,992;
c)Stage 2: erect building envelope, sheet roof, prepaint and electrical rough $52,483;
d)Stage 3: Lockup, 50% plumbing, 50% electrical, concrete tank, PV Setup $52,348;
e)Stage 4: Fitout Kitchen, bathroom, decks, finish plumbing, Solar arrays $51,164;
f)Stage 5: Practical completion $26,469.
In a variation dated 3 September 2009, Mr Leo and Mr Meznaric agreed to vary the contract to the extent that stages 1 and 2 were differently described as follows:
a)Stage 1: Preliminaries, Core footings, erect prepainted insulated sheeted walls, ceilings & pre-ducted partitions & ‘Tomewin’ Transportable of East Wing; underground electricity supply & comms cabling & dual water pipes, fit roof-framing & sheet roof & gutter over East Wing. All timber framing & custom plywood on-site & West Wing commenced….$59,992;
b)Stage 2: Erect pre-painted insulated sheeted walls, ceilings & pre-ducted partitions & ‘Tomewin’ transportables of West Wing; underground electricity supply & comms cabling & dual water pies, fit roof framing & sheet roof & gutter over West Wing and the Services Link….$52,483.
It is uncontroversial that Mr Leo was paid the deposit and for stages 1, 2 and 3.
Although the works had not been completed, Mr Leo has not done work on the site since 3 March 2010.[15] On 26 August 2010, Mr Meznaric signed a notice to Mr Leo purporting to terminate the contract. Mr Meznaric says this was done under the Domestic Building Contracts Act2000 (DBC Act) because the works had not reached practical completion after 1.5 times the time period allowed under the contract.[16]
[15] Exhibit 11, paragraph 49.
[16] DBC Act, s 90 provides for termination in these circumstances.
At the time of Mr Meznaric’s purported termination of the contract, Mr Leo through his lawyers disputed that the notice was valid, it seems principally because Mr Meznaric had not complied with some technical contractual requirements contained in clause 8.1, including failure to provide to him evidence of title and capacity to pay, and therefore the time for completion, he said, had not commenced to run.[17] In the alternative, the correspondence suggests deemed practical completion because of unlawful occupation of the premises by Mr Meznaric[18] which is denied by Mr Meznaric.[19] Mr Leo says that he later terminated the contract following Mr Meznaric’s repudiation of it.
[17] Exhibit 11, 71-73.
[18] Exhibit 11, 71-73.
[19] Exhibit 11, paragraphs 36-38.
The ending of the contract is discussed further later in these reasons for decision.
The framework for the review
The Queensland Building Services Authority Act 1991 (QBSA Act) gives the Queensland Civil and Administrative Tribunal jurisdiction to conduct a review of the QBSA’s decision. On review, the Tribunal may confirm or amend the decision; set aside the decision and substitute its own decision; or set aside the decision and return the matter to the decision-maker.[20]
[20] QCAT Act, s 24.
In its review jurisdiction, the Tribunal must decide the review in accordance with the QBSA Act and the Queensland Civil and Administrative Tribunal Act 2009 (the QCAT Act).[21] For the review, the Tribunal has all the functions of the decision-maker for the reviewable decision.[22] The purpose of the review is to produce the correct and preferable decision, following a fresh hearing on the merits.[23] In effect, the Tribunal stands in the shoes of the decision-maker and makes the decision afresh.
[21] QCAT Act, s 19(a).
[22] QCAT Act, s 19(c).
[23] QCAT Act, s 20.
Under section 72 of the QBSA Act, a person who carried out building work may be directed to rectify or complete building work.[24] All circumstances which are reasonably relevant, including the terms of the contract may be considered in deciding whether to give a direction.[25] A direction can, if it is necessary to do so, require that a building or part of it be demolished and building work recommenced.[26] Whether or not work is defective or incomplete is to be ascertained objectively.[27] Generally, a direction must be given within 6 years and 3 months of the building work having been completed or left in an incomplete state.[28] A direction may not be given if it would be unfair to do so: for example if monies are owing but unpaid under the contract.[29]
[24] QBSA Act, s 72(1).
[25] QBSA Act, s 72(2).
[26] QBSA Act, s 72(6).
[27]R v His Honour Judge Miller and Builder’s Registration Board ex parte Graham Evans and Co (Qld) Pty Ltd [1987] 2 Qd R 446, 458.
[28] QBSA Act, s 72(8).
[29] QBSA Act, s 72(14).
The QBSA ‘Rectification of Building Work’ Policy (the Policy) was gazetted. It is a statutory instrument by operation of law.[30] Therefore, it must be applied in reaching the correct and preferable decision. It is a guideline policy which provides that a person who carries out category 1 (defined to include structural defects) or category 2 (defined to include faulty or unsatisfactory work which does not meet reasonable standards of construction, but does not fall in to category 1) defective building work should be required to rectify it unless rectification is an unreasonable remedy. The Policy acknowledges that all reasonably relevant circumstances are to be considered in deciding whether to issue a direction to rectify.
[30] Statutory Instruments Act 1992, s 7.
The Policy sets out that the circumstances for consideration in determining whether to issue a direction might include delay by the homeowner in notifying the BSA of the defect and nominates different time frames for category 1 (more than three months after the defect became apparent) and category 2 (more than six months after work was completed or left incomplete or exceeds 7 months, if the owner notified within 6 months) defects after which delay might be relevant.
The issues which the Tribunal must decide
The issues that the Tribunal must decide in determining the review application are:
a)Whether the works are defective or incomplete. In the circumstances outlined, this includes consideration of what Mr Leo has been paid for and whether he has been paid for works which are not complete.
b)Whether the discretion should be exercised to issue a direction to rectify. In the circumstances outlined, these include consideration of the termination of the contract; the BSA Policy; whether the works can be rectified and if so, whether rectification is an unreasonable remedy.
At least in part, Mr Leo submits that the procedure leading to the issue of the direction to rectify by the BSA denied him natural justice and was therefore unlawful. He says he was supposed to attend a second meeting at the site, but the BSA did not invite him after the inspector formed the view that Mr Meznaric had terminated the contract. However, the Tribunal’s function involves an independent review of the decision on its merits. It makes its own decision about what constitutes the correct and preferable decision. Therefore, the procedural issues raised by Mr Leo about the manner in which the BSA proceeded in reaching its decision are irrelevant.
The evidence and credibility issues
There are a variety of issues relating to the evidence. These are considered before moving to the substantive issues.
In addition to Mr Leo and Mr Meznaric, evidence was provided in the proceeding by Mr Peter Campbell, the builder who prepared a report for the BSA; Mr Van De Hoef, the engineer who prepared several reports at the request of the BSA; and Mr Garrett, also an engineer, who prepared a report at the request of Mr Meznaric .
Mr Campbell helpfully explained the distinction between building and engineering evidence. In particular, building evidence involves standard or normal building practice, including applying manufacturer’s specifications, Australian Standards, the Building Code of Australia (BCA) and normal building practices. In contrast, engineering evidence is required to ascertain structural adequacy when non-standard building practice is adopted by a builder.[31]
[31] Transcript 15 May 2012.
Mr Leo purported to give engineering evidence on his own behalf. Further, although he sought to give evidence relating to some certification issues, he conceded that he has not been accepted by the certifier for the project as a competent person to design structural elements. Additionally, he has no qualifications as a certifier. As he holds no engineering qualifications, I do not accept his evidence about these matters.
Mr Campbell and Mr Leo are both builders with similar qualifications. Where their evidence differs, I prefer the evidence of Mr Campbell. I formed that view that Mr Leo’s evidence was less reliable for several reasons. For example, Mr Leo, despite 40 years of experience as a builder, admitted under cross-examination that he was unfamiliar with his obligations under the Building Act 1975 and the Building Regulation 2006 about inspection of building work.
Further, Mr Leo explained that he considered it was appropriate for him to roughly design premises, although he has no qualifications in design, and then, build structural elements of a house and then eventually and belatedly have a structural engineer inspect the premises and make recommendations to achieve structural adequacy of the building.[32] In this case, he has not had a structural engineer inspect the premises at any time, despite the significantly advanced stage of construction reached when the contract was terminated. This was contrary to any acceptable practice according to Mr Campbell.[33] This led me to conclude that Mr Leo’s views about proper building practice were unreliable.
[32] For example, Transcript 14 May 2012, 64-67, 101, 112-113.
[33] Transcript 15 May 2012, 99.
Mr Leo also regularly asserted that manufacturer’s specifications,[34] Australian Standards, and the BCA were not relevant to the guitar building system. He suggested that his building methods were ‘unusual’ and perhaps even ‘unique.’[35] Despite Mr Leo’s assertions that the guitar building system has been developing over hundreds of years, it is not apparent on the evidence before me that it is a recognised form of construction, notwithstanding that Mr Leo may have completed a number of other individual projects which had been certified as structurally sound some years ago. That is not evidence that the subject house is structurally adequate.
[34] For example, see Exhibit 1, pages 32 and 35.
[35] Transcript 14 May 2012, 71-72.
After the conclusion of his cross-examination on the second day of the hearing, Mr Leo was given the opportunity to clarify the answers he had given. At this point, he complained generally that the questions he had been asked contained factual errors, and because he was ‘stressed and dysfunctional,’[36] he had not correctly phrased any concerns he had about the questions and agreed to things which, on reflection, he did not agree with. He was unable to refer to specifics, he said, in the absence of a transcript.
[36] Transcript 15 May 2012, 34.
He gave a limited example, which as I pointed out from my notes, he had actually provided clarification about when he answered the question. He did, in my view, clarify many other matters as he gave his answers despite his assertion belatedly made when he was given the final opportunity to clarify. However, all of his oral evidence is called into question as a result of his own admission that he said things which were not correct.
In addition, Mr Leo appeared to me frequently not to answer the questions asked of him. Rather he made statements related to the subject matter of the question without actually answering it. On some occasions, it appeared that he wished to avoid giving an answer to the question asked.[37] On some occasions, he appeared to give an answer to what he considered might be the eventual point of a line of questioning.[38] Whatever the reason/s for this, he made what appeared to be self-serving statements rather than directly address questions; was apparently evasive about answering questions, particularly when he appeared to consider the answers might go against his interests. He was reluctant to make direct concessions, even when it was obvious from his answers that he could not sensibly maintain the position he preferred.
[37] For example see, Transcript, 14 May 2012, 46-54, 55-57, 59-61, 72, 81.
[38] For example see, Transcript, 14 May 2012, 50, 72, 74, 76-77.
An example occurred in relation to his answers to questions about whether he had engineering qualifications or had been deemed a competent person by the certifier, and related questions regarding a Form 15 completed by him,[39] as eventually became evident, only for the purposes of the proceedings. The contract plans and building works to date have not been approved or certified by any person with the expertise to approve them. However, getting to a point where Mr Leo acknowledged this was tortuous.[40] In my view, his evidence was intended to obfuscate.
[39]Although he says it was not really a Form 15 because he amended it: Transcript 14 May 2012, 49-53.
[40] Transcript 14 May 2012, 47-53.
His written statement was also prepared in a somewhat complex and convoluted manner. Mr Van de Hoef had been asked by BSA to prepare a further report following the receipt of Mr Leo’s material. He commented in oral evidence that he had done so, as far as he could, but that he had difficulty understanding what Mr Leo meant in relation to some matters.[41]
[41] Transcript 15 May 2012, 40, 53.
Having regard to the format of Mr Leo’s statement, I acknowledge the difficulties suggested by Mr Van de Hoef’s comment. Mr Leo’s submissions are similarly somewhat convoluted. Mr Leo is of course self-represented. However, many persons are self-represented before the Tribunal and present information in a coherent and straightforward manner. That said, I have made every effort to understand the evidence that Mr Leo has filed as well as the submissions he makes in respect of the case.
For similar reasons, I also prefer the evidence of Mr Meznaric to Mr Leo, which was given in an apparently forthright and truthful manner, where it conflicts with Mr Leo’s evidence.
Mr Garrett was not required for cross-examination. His brief report is broadly consistent with Mr Van de Hoef’s.
Are the works defective or incomplete?
When the contract came to end, Mr Meznaric had paid the deposit and for stages 1, 2 and 3 under the contract.[42]
[42] Transcript 14 May 2012, 54-55 (Mr Leo accepts paid for these stages).
Clause 11.6 of the contract between the parties provides that the works in any stage had to be verified as completed when a payment claim was made in respect of the stage.
Therefore, all items contained in stages 1, 2 and 3 were required to be completed when Mr Leo made a progress claim for each of the stages. Any that were incomplete when he claimed for payment of the stage may properly be the subject of a direction to rectify.
Although Mr Leo seeks the setting aside of the direction to rectify in whole, he concedes that many items identified in the direction to rectify are incomplete building works. Indeed, he went so far as to say, when answering questions about defect item 2, that
Because I intended to complete the structure, subject to directions given to me by the engineer at his on-site visit…..there is a much longer list than this item of those things deliberately left. That is why I am so confident that the structure was incomplete….most emphatically incomplete in many other ways, a lot of which were quite invisible, seriously.[43]
[43] Transcript 14 May 2012, 72.
These acknowledged ‘incomplete’ works fall into two groups. In respect of the first group, although he makes a variety of other comments about the items, he does not suggest that they were not part of stages 1, 2 and 3 or advance any other issues which mean that it may not be appropriate to consider the work simply incomplete, despite his assertion that they would eventually be adequate by the time practical completion was reached.
In relation to the remaining more contentious items, although Mr Leo acknowledges that many of the other items are also incomplete work, he raises a variety of other issues which require consideration to determine whether they may properly be the subject of a direction to rectify. These are considered later.
The non-contentious items which Mr Leo concedes are incomplete are as follows:
(a)item 2;[44]
[44] Exhibit 1, 17, App7 and NOTE.
(b)item 4;[45]
[45] Exhibit 1, 17 App 7 and NOTE.
(c)item 6;[46]
[46] Exhibit 1, 22 App 7 & 8.
(d)item 7;[47]
[47] Exhibit 1, 15 App 6 & 7.
(e)item 11;[48]
[48] Exhibit 1, 28 App 3 & 4.
(f)item 12;[49]
(g)item 13;[50]
(h)item 16;[51]
(i)item 18;[52]
(j)item 19;[53]
(k)item 22;[54]
(l)item 26;[55]
(m)item 30;[56]
(n)item 31;[57]
(o)item 32.[58]
[49] Exhibit 1, 34 App 7 & 8.
[50] Exhibit 1, 34 App 7 & 8.
[51] Exhibit 1, 26 App 5, 7 & 8.
[52] Exhibit 1, 34 App 7 & 8.
[53] Exhibit 1, 19 App 8 & 9.
[54] Exhibit 1, 34 App 7 & 8.
[55] Exhibit 1, 34 App 7 & 8.
[56] Exhibit 1, 8 App 8 & 9.
[57] Exhibit 1, 19 App 8 & 9.
[58] Exhibit 1, 26 App 7 & 8.
I accept that these items are incomplete. I do not also need to make findings about whether these items of work are also defective, as incomplete work may ground a direction. I am satisfied that each of them may therefore properly be the subject of a direction to rectify.
Contentious Items
Mr Leo has suggested that some items do not fall within stages 1, 2 and 3. I must determine whether these items do or do not fall within those stages, and if not, whether the works are defective.
Carport
The alleged defect contained in Item 1 relates to excessive spanning, on Mr Van de Hoef’s calculations of the rafters in the carport.
Although the carport had been constructed, or at least, part-constructed when works stopped, it is not mentioned at all in the stages specified in the contract. Although he drafted the contract, Mr Leo under cross-examination, was unable or unwilling to say what stage he intended the carport to be included in.[59]
[59] Transcript 14 May 2012, 55-56.
Stages 4 and 5 do not include the carport. In view of the part completion of the carport during stages 1, 2, and 3, it is reasonable to infer that it was included in those stages, particularly as the bulk of the contract price, that is, over 70% of it, was payable by completion of stage 3. This view is reinforced as stage 4 of some $51,164 was for fit-out of the kitchen, bathroom, completing plumbing, and constructing decks and solar arrays. It is difficult to see that there is scope for any allowance for the carport in stage 4.
The final payment on practical completion was then provided as $26,469. There is no specification of what was included, however, if it was to include the carport, it is unlikely it would have been commenced at the early stage that it was. Also, this is a small component of the total price, and in my view, was more likely than not intended to cover finishing off items, rather than construction of the carport.
Consistent with a construction that the carport was intended to be part of stages 1, 2 or 3, Mr Leo’s written statement does not suggest that the carport was not part of stages 1, 2, or 3, but says that the structure was not complete.[60]
[60] Exhibit 1, 10 esp App 3, 4 and 5.
Therefore, I draw the inference that the carport, although it is not referred to specifically in the specified stages was included in stages 1, 2 and 3. Further, Mr Leo concedes that it was not complete at the time the work stopped. It is therefore properly able to be the subject of a direction to rectify.
Central Bearer
Item 3 relates to the central bearer. Mr Van de Hoef calculates that the span is too great for the load supported. Mr Leo disagrees on the basis of his own assessment of the strength of the hardwood used.[61]
[61] Exhibit 1, 12-13.
I accept Mr Van de Hoef’s assessment for the reasons earlier given.
In any event, in oral evidence, Mr Leo conceded that it was not complete.[62] Accordingly, I accept that the item identifies both incomplete and defective work. Therefore, it may properly be the subject of a direction to rectify.
[62] Transcript 14 May 2012, 64-65.
Front Right Hand Corner
Item 5 refers to there being no structural connection at the bearer splice of the front right-hand corner. Mr Leo says that the direction is invalid on the basis that this is not a category 1 defect. Impliedly, Mr Leo accepts that the defect exists.
Accepting Mr Campbell’s assessment, I am reasonably satisfied that the defect exists. I consider the relevance of whether it is a category 1 defect later in these reasons.
Deck
Items 8, 9, and 10 in the direction to rectify relate to the north deck. Mr Leo acknowledges that it is incomplete but says that as decks were included in stage 4, he had only been paid for a minor percentage of their cost at the time of the termination of the contract.[63]
[63] Exhibit 1, 23-24.
That said, Mr Leo’s evidence implies that some work on the decks was anticipated before stage 4, although the extent is not specified. However, it is clear on the basis of the amended stages that the completion of the decks was due in stage 4. Therefore, they can not be expected to have been completed at the ending of the contract.
However, that is not the end of the matter as a direction may issue if the works as done are defective, as opposed to incomplete.
Item 8 refers to inadequate decking joists, causing deflection when the deck is walked on. Mr Van de Hoef considers the joists are undersized for their intended loads. The joists, once in place, could not reasonably have been intended by Mr Leo to be replaced as part of completion. Indeed although a different defect item was the subject of the particular evidence given, Mr Leo’s oral evidence was to the effect that that he was intending to alter the works if the engineer conducting the final inspection required him to do so.[64] Although he did not concede it, it is reasonable to infer that he would not have altered anything that the engineer did not require him to alter. His written statement to the Tribunal is consistent with this inference.[65]
[64] Transcript 14 May 2012, 71
[65] Exhibit 1, page 24, NOTE.
Item 9 relates to the positioning of a bolt too close to the timber edge which Mr Campbell considers inadequate for its application. Again, once Mr Leo had positioned the bolt in the timber, he could not reasonably have intended to move it, and nor does he suggest that he did.
Item 10 relates to a bearer in the deck which is not continuous over the centre support. Mr Van de Hoef considers it is inadequate for its application. Once again, in completing the deck, the installed bearer could not reasonably have been anticipated by Mr Leo to be replaced as part of the work to complete the deck.
Consistently, Mr Leo did eventually concede that he designed the deck, as he had several other aspects of the house after he had started constructing it.[66]
[66] Transcript 14 May 2012, 99-101.
I am reasonably satisfied that each of items 8, 9 and 10 identifies defective building work.
Entry Roof
Items 14 and 15 are related to an entry. They relate respectively to inadequate ridge beam support in the entry deck roof which Mr Van de Hoef considers inadequate and a bolt connection in the front entry roof which has missed the post and Mr Campbell considers is not providing adequate support.
Mr Leo says that the work was incomplete and was not due for completion until stage 4 because it forms part of what is described as ‘decks’.
I do not accept Mr Leo’s assertions as these items form part of the roofing which are referred to in the earlier stages. Therefore, accepting Mr Van de Hoef’s and Mr Campbell’s evidence, I am satisfied that the works are defective and that a direction can properly be given for them.
Other Roof-related items
Regarding items 17 and 29, Mr Leo says, in part in response to these items which refer to issues relating to non-compliance with manufacturer’s specifications and an opening allowing water penetration, that stages 1 and 2 refer to completion of the ‘sheet roof and gutter’ over East & West Wings and the services link. Therefore, he says, ‘other flashings’ are excluded. Further, Stage 3 makes no mention of ‘flashings’. Therefore, he says the building work is incomplete.[67]
[67] Exhibit 1, 35-36, esp App 5.
The flaw in this argument is that none of the stages specifically includes flashings, yet it is uncontroversial that they were to be done as part of the works. In my view, it is reasonable to infer that they were to be done in the stages specifying the associated roofing works. That is, they were to be done in stages 1 and 2.
Further, Mr Leo says that the manufacturer’s specifications are in his opinion, irrelevant, and that in any event, the guitar building system ‘alternative solution’ would have satisfied performance requirements and the building work was incomplete as it had not been inspected by an engineer.[68] I do not accept Mr Leo’s own views about the non-applicability of the manufacturer’s specifications for the reasons I have earlier outlined.
[68] Exhibit 1, 35-36, esp Apps 1, 2, 4, 7 and 8.
Therefore, I am satisfied that the work referred to in these items was to have been completed by the end of stage 3, but some of it was not and what had been completed was in any event defective in accordance with Mr Campbell’s opinion.
Items 20, 21, 23, 24, 25, 27 and 28 also relate to aspects of the roofing. Once again, Mr Leo does acknowledge that this work is incomplete.[69] However, he says essentially that the finalisation was delayed until completion of the electrical work including variations, requested by Mr Meznaric, but apparently not formalised.[70]
[69] Exhibit 1, 37-42, esp 38-39 App 9 & 10, and 40-41 App 7 & 8.
[70] Exhibit 1, 37 App 1.
If there were variations, Mr Leo had a responsibility to reduce them to writing. He has not done so. The roofing works are contained in stages 1 and 2. Therefore, I am satisfied that the works are properly able to be subject to a direction to rectify on the basis that they are incomplete.
No Certification of Structural Adequacy
Item 33 refers to the requirement for certification on completion of specified stages of construction, including footing design and construction, floor, wall-framing, and tie-down by a registered structural engineer or suitably approved qualified person, which the licensee is required to arrange. These are not available for the dwelling and carport.
Mr Leo says that because of the unconventional process he was using during construction, the timing and nature of the staging referred to are ‘irrelevant’ to the building work.[71] Consistently, in oral evidence, he acknowledged that the work had not been seen by an engineer and had not been certified by a certifier.
[71] Exhibit 1, 6 App 0.
However, he says the direction is unlawful, because it relates to ‘contract administration services’ which it appears he does not accept may constitute building work for which a direction may issue.
The definition of ‘building work’ in the QBSA Act[72] specifically includes contract administration work in relation to a construction designed by the person. It is not controversial that Mr Leo designed the building. Building work which is defective or incomplete may be the subject of a direction to rectify. The building work is incomplete in that the required certificates do not exist. Therefore, I am satisfied that the item covers matters which may properly be the subject of a direction to rectify.
[72] QBSA Act, Sch 2, ‘building work’ (fa).
In summary, I am reasonably satisfied that all alleged items in Direction to Rectify 35818 are either incomplete, defective or both, and that they may properly be the subject of a direction to rectify.
Discretionary Matters
I now turn to consider the items earlier identified, as potentially relevant in the circumstances of this case, in deciding whether to exercise the discretion to issue a direction.
Termination of the Contract
Mr Leo relied primarily, at the time he received Mr Meznaric’s correspondence purporting to terminate the contract, on not having received formal advice of those matters specified in clause 8.1 of the contract to claim that the effective completion period under the contract had not begun to run.
It is uncontroversial that the works began in early 2009. Mr Leo wrote to Mr Meznaric advising him that the date for commencement was 30 January, when site preparation commenced on the site.[73] Thereafter work was done until 3 March 2010. Mr Meznaric made progress payments when requested.
[73] Exhibit 11, paragraph s 18-19 and JPM 4.
Mr Leo had impliedly accepted that Mr Meznaric owned the land on which the house was to be built and had the capacity to pay, by his actions in commencing and then proceeding with the building work. Further, Mr Meznaric had provided some information to Mr Leo regarding the matters specified in 8.1 which had apparently satisfied Mr Leo about them.[74] It is entirely artificial for Mr Leo to claim that as these matters had not been satisfied that the time for construction had not commenced to run. In any event, clause 8.1 merely specifies when at the latest commencement must occur. It does not provide that time does not run, whether or not the works have in fact commenced if those specified items are not provided.
[74] Exhibit 11.
Nor do I accept the alternative arguments made by Mr Leo about deemed practical completion because of Mr Meznaric’s ‘unlawful occupation’ of the premises. For the reasons earlier outlined, I accept Mr Meznaric’s evidence about their being agreement between him and Mr Leo that he could store some items at the premises.[75]
[75] Exhibit 11, paragraphs 36-48.
I find that works commenced under the contract on 30 January 2009 and ceased on 3 March 2010. Under the contract, the effective completion period was 130 days.[76] There were six time extension claims made by Mr Leo for a total of 87 additional days. Although Mr Meznaric did not accept them all as appropriate, he did not dispute them.[77] The effective completion date was accordingly acknowledged by him as the new date specified by Mr Leo in the final time extension claim, namely 27 November 2009.[78]
[76] Exhibit 8, page 140.
[77] Exhibit 11.
[78] Exhibit 11, esp JPM 11.
Therefore, 1.5 times the specified period had elapsed when Mr Meznaric gave notice under s 90 of the DBC Act on 26 August 2010. I am satisfied that Mr Meznaric validly terminated the contract by his correspondence dated 26 August 2010.
The notice of termination stated that the contract was ‘terminated’ under the DBC Act. Mr Leo submits that s 90 refers to the circumstances in which the contract may be brought to an ‘end’ as opposed to terminated and that therefore the notice is somehow invalid. This specious argument is not accepted. The notice of termination is clear and complies with the DBC Act.
In my view, the facts as I have found them surrounding the termination of the contract occurred weigh in favour of a direction.
In the event that my conclusions about this issue are incorrect, in the unusual circumstances of this case in which I am reasonably satisfied on the basis of the evidence of Mr Campbell and the engineering evidence that the construction quality by the builder is unusually poor, I would not have considered the issue of whether Mr Meznaric or Mr Leo terminated the contract ultimately determinative of whether I should exercise my discretion and would have made the decision I have in any event.
The Policy
The complaint about the building works was made to the BSA by Mr Meznaric on 10 August 2010.[79] However, the work ceased a little over 5 months earlier on 3 March 2010.
[79] Exhibit 8, 1.
Mr Campbell in his report categorises the defects. As referred to earlier, the Policy sets out the times frames after which delay might militate against the issue of a direction in respect of category 1 and category 2 defects as it defines them. These timeframes are brief, compared to the 6 year 3 month time frame provided for in section 72(8) of the QBSA Act.
Mr Leo ceased work on the site when the works were incomplete. Mr Meznaric did not know it would not start again. There were some months during which emails were exchanged and he reasonably expected further work to be undertaken in due course.
The works were subsequently not completed and Mr Meznaric later notified Mr Leo that he was terminating the contract. He did this at about the same time as making the complaint to the BSA, having received reports from building inspector and an engineer on 3 and 5 August 2012, respectively.
I consider that Mr Meznaric acted promptly to complain once he recognised that the works would not be completed by Mr Leo and once he had professional opinion about the unsatisfactory state of the works which had been constructed by Mr Leo. It may be arguable that the defects did not become apparent to him until he had professional advice about the state of the works.
In any event, I am not satisfied that any perceived delay, that is, outside of the timeframes in the Policy for category 1 or 2 defects, in reporting any of these defects or incomplete works is relevant. This is not a situation where a house was built and handed over to the homeowner in the usual way. Construction stopped mid-construction. It appears that the Policy was developed to cover the usual situation where construction is completed.
In any event, the Policy does not provide for the time frames to be applied slavishly or rigidly. It requires that in deciding whether to a give a direction for rectification of building work, that all of the reasonably relevant circumstances are to be taken into account. These, it says, might include delay in notification by the owner where it exceeds the nominated time frames.
In my view, applying the Policy by taking into account all of the relevant circumstances in this matter weighs in favour of a direction.
Can the works can be rectified and if so, is rectification an unreasonable remedy?
Mr Leo suggests that the works are in an incomplete state in many respects. He opposes demolition. Impliedly, he considers the works can be rectified.
While Mr Van de Hoef accepts that it is possible for the works to be rectified, and although he had not been asked to provide details of rectification works required, he suggests that demolition of the works and rebuilding may ultimately be less expensive.[80] Further, he considers the rectified structure will not have an overall standard of construction that would usually be considered acceptable for a new building and that rectification will involve ‘considerable works on basically the majority of the structural components of the building.’[81]
[80] Exhibit 5, 19-20; and Transcript 15 May 2012, 64, but see 60-62.
[81] Exhibit 5, 19.
Mr Garrett briefly, and in general terms, outlines the rectification he considers would be required.[82] He suggests that serious consideration should be given to complete removal of the works in view of the significant structural defects and the anticipated costs of rectification. However he does not estimate the costs of each. This is broadly consistent with Mr Van de Hoef’s evidence.
[82] Exhibit 10, 12.
I am satisfied on the engineering evidence that the works can be rectified. Despite the comments made by both engineers about demolition, detailed evidence is not before me about precisely the tasks and costs rectification entails as opposed to the costs of demolition and rebuilding. Therefore, there is no evidence which reasonably satisfies me that rectification is an unreasonable remedy.
As the works can be rectified, this factor weighs in favour of confirming the BSA’s decision to issue the direction.
Conclusion and Decision
In the circumstances described, I am satisfied that it is appropriate to exercise the discretion and confirm the BSA’s direction to Mr Leo. I make orders accordingly.
Costs
Mr Meznaric seeks an order for his actual costs to date, fixed in the sum of $14,690.21, or in the alternative, his costs of and incidental to the proceedings to be assessed on the scale of costs applicable in the Supreme Court under Schedule 1 of the Uniform Civil Procedure Rules 1999.
He submits that a costs order is appropriate because he was joined as a party to the proceedings as a result of allegations made by Mr Leo in his application about termination of the contract. However, Mr Leo did not pursue the issue or produce any evidence in relation to it.
Mr Leo counter-claims for his costs against Mr Meznaric, although it is not apparent what these relate to as he is not legally represented in the proceedings.
Generally, parties before QCAT must bear their own costs.[83] Orders for costs may be made when the interests of justice require it.[84] Some factors which may be relevant in deciding whether to make an order are set out.[85] If an order is made, the Tribunal should fix the costs if possible.[86] In deciding the issue of costs QCAT is required to proceed in a manner which is fair, informal and economical[87] and may inform itself in any way it considers appropriate.[88]
[83] QCAT Act, s 100.
[84] QCAT Act, s 102.
[85] QCAT Act, s 102(3).
[86] QCAT Act, s 107.
[87] QCAT Act, s 3 & 4.
[88] QCAT Act, s 28(3)(c).
The substantive orders I have made favour Mr Meznaric’s position in the proceeding. Mr Leo did not provide evidence about termination despite having raised it as an issue in his application for review. As the BSA’s submissions reveal, at least in part as a result of this issue, the BSA sought the joinder of Mr Meznaric as a party.
If Mr Leo had not raised issues about termination, Mr Meznaric would likely not have become a party to the proceeding. Having raised the issue, somewhat unusually then, Mr Leo did not seek to address the issue by providing any evidence to the tribunal concerning it. However, as a result of becoming a party Mr Meznaric has incurred significant costs. In these circumstances, I am satisfied that it is in the interests of justice for Mr Meznaric to recover his actual costs from Mr Leo.
An itemised account for Mr Meznaric’s actual costs has not been provided. However, leave for legal representation was granted to Mr Meznaric on 13 November 2011. He has incurred costs of an attendance at a directions hearing, and a compulsory conference, and Mr Meznaric’s preparation for hearing including pursuing reasonably voluminous material from the other parties and preparing evidence including engineering evidence, as well as appearing at what was, ultimately a hearing over 3 days, and subsequently written submissions. Although it would have been preferable to have an account with some itemisation, I accept that the amount claimed is reasonable in the circumstances of the work done.
I make orders that Mr Leo pay Mr Meznaric’s costs fixed in the sum of $14,690.21 within 28 days.
There are, in my view, no factors which support Mr Leo’s application for costs against Mr Meznaric. Mr Leo’s cross-application for costs is dismissed.
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