Lephmack Pty Ltd ATF the Mackrell Building Trust v Stirling
[2012] QCAT 139
•3 April 2012
| CITATION: | Lephmack Pty Ltd ATF The Mackrell Building Trust and Anor v Stirling and Anor [2012] QCAT 139 |
| PARTIES: | Lephmack Pty Ltd ATF The Mackrell Building Trust /as Phillip Mackrell Builder (First applicant) |
| Mr Phillip Mackrell (Second applicant) | |
| v | |
| Mark Stirling Katrina Stirling (Respondents) |
| APPLICATION NUMBER: | BD462-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Senior Member |
| DELIVERED ON: | 3 April 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. Mr Mackrell shall pay Mr and Mrs Stirling $256,682.00 by 27 April 2012. |
| CATCHWORDS: | BUILDING – defective work PARTIES – where director of contractor alleged a partnership with the contractor – where allegation adopted by homeowner –where claim brought against director personally |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
On 30 October 2008, Mr and Mrs Stirling signed a contract with “Lephmack Pty Ltd ATF The Mackrell Building Trust /as Phillip Mackrell Builder”. Mr Mackrell was, at all material times, a licensed contractor and the nominee of the company.
Lephmack Pty Ltd is now in liquidation. Mr and Mrs Stirling want to pursue a claim for defective work against Mr Mackrell personally. I am required to determine whether Mr Mackrell is liable for the defective work, the extent of the defective work and the cost of rectifying that defective work.
Mr Mackrell’s liability
Mr and Mrs Stirling ask the tribunal to adopt as fact matters pleaded in a statement of claim filed by Lephmack Pty Ltd and Mr Mackrell in 2010. That document states that Mr Mackrell and the company were in partnership and that, on behalf of the partnership and in compliance with s 56 of the Queensland Building Services Authority Act 1991, Mr Mackrell entered into the building contract with Mr and Mrs Stirling in his capacity as the licensed contractor.
Within the court context, once an admission is made, it may only be withdrawn by leave[1] and a court may, on the application of another party, make an order to which the party applying is entitled on the admission[2]. Although these provisions of the Uniform Civil Procedure Rules 1999 are not replicated in the tribunal’s rules, the concept of making a decision based upon admission is consistent with the tribunal’s mandate to deal with matters in a way that is fair, just, economical, informal and quick[3].
[1] Rule 188 Uniform Civil Procedure Rules 1999.
[2] Rule 190(1) UCPR.
[3] Section 3(b) Queensland Civil and Administrative Tribunal Act 2009.
If Mr Mackrell asserts that he entered into the building contract on behalf of a partnership of which he was a member, the tribunal is entitled to proceed on that basis. In the absence of any evidence about the structure of the partnership, I will assume that Mr Mackrell and Lephmack Pty Ltd were joint and severally liable for the acts of the partnership.
The extent of the defective work
Mr and Mrs Stirling have provided a number of reports about the defective work:
a)Dave Sherrington dated 31 March 2010;
b)Crawford & Company dated 21 May 2010;
c)Crawford & Company dated 8 June 2010;
d)JC Engineering dated 15 July 2010;
e)Interlara dated 4 October 2010;
f)SMC Plastering dated 14 July 2006 (sic);
g)Interlara dated 11 February 2011;
h)Cozens Regan Williams Prove Pty Ltd dated 31 January 2012.
Mr Mackrell has supplied reports by Jeffrey Hills & Associates Pty Ltd (“JHA”).
As in most building disputes, the experts engaged by the homeowner have prepared reports that urge the tribunal to adopt a conservative, “fine-grain” approach to the rectification and rectification costs whereas the expert engaged by the builder has adopted a low-cost, broad brush approach to rectification. There is a Scott’s Schedule detailing 85 defects in this property, some serious but many, in the scheme of things, fairly trivial. It is apparent to me that when parties starts to complain about things like plane marks to the edges of doors, their perception of what is a reasonable standard of work has become distorted by the stress involved with the proceedings. It is the tribunal’s task to bring the parties back to a realistic perspective of the builder’s work.
I will consider the “serious” defects, that is, defects which are category 1 or require a significant expenditure, in detail. I will make some comments about what I consider to be “intermediate” defects; that is, defects that involve over a thousand dollars to rectify. Finally, I will make some comment about the minor defects.
SERIOUS DEFECTS
Structural adequacy of the home
[10] In its report of 11 February 2011, Interlara stated that it had conducted a number of investigations that led to the conclusion that the house had “serious structural shortcomings” with the framing and bracing. Mr Burnell, of Interlara, detailed the analysis and invasive investigations that had been conducted before he came to that conclusion. The investigations were conducted in response to JHA’s report in which its author, Mr Hills made some sweeping and rather dismissive comments. I accept the findings of Mr Burnell as follows:
a)The roof trusses supplied were designed to N2 wind rating rather than N3 as required by the plans.
b)The structural ply bracing has been installed for N2 wind loads, not N3.
c)In some cases, the bracing required for N2 wind loads had not been installed at all or was installed wrongly. The bracing is “severely under capacity”.
d)The tie down was not completed properly and there were several instances where the top plate was anchored at a wall noggin, rather than continuing to the ground floor slab.
e)The floor framing span over the kitchen is non-compliant. The load from the tiles and mortar beds in the bathrooms upstairs adds an extra 45% to the loading, exceeding the maximum safe load.
f)Three floor joists span 7.5 metres, whereas the maximum recommended span is 7.1 metres.
g)The way the floor framing relates to the top plate of the bracing wall, the wind load cannot transfer out of the first floor framing into the north-south bracing wall.
[11] Mr Burnell has listed the rectification work necessary to address these problems:
a)Upgrade structural bracing throughout the house. This will require the removal of existing plasterboard to the entire width of the wall to enable the bracing to be applied and the studs packed out to maintain a flush finish.
b)Strengthening ground floor studs higher than three metres by doubling up with an additional stud and adding additional masonry anchors. Again, this will require the removal of plasterboard to all ground floor perimeter walls higher than three metres.
c)Upgrade wall top plate connections by installing additional ties.
d)Install additional saddle straps to each truss connection to the supporting top plates.
e)Extra framing to be bolted to each floor truss joint.
f)Install through bolts to bottom plates at each end of bracing walls to bedroom 2.
g)Install blocking to the top plate of walls at the laundry and pantry to resist bracing load.
h)Fix bracing wall top plate to intersecting external wall.
Connect roof joists to top of bracing wall between bedroom 4 and bathroom.
j)In the western gable at the first floor void level, install a horizontal structural wind beam, screw fixed to each stud and bolted into the floor joists on either side of the stud.
k)Upgrade roof trusses to N3 by doubling up all 12.5 metre spans. This will require removal of the roof sheeting and battens.
[12] Mr Burnell estimates the cost of the structural works to be approximately $150,000. In addition, it will be necessary to remove and re-plaster large sections of the home. Mr and Mrs Stirling have provided a quote for this work in the amount of $40,449.00.
[13] Messrs Burnell and Bickle have estimated that there will be additional costs as follow:
a)Preparation of the timber framing, $5,000.
b)Re-setting door jambs, skirting and architraves, $10,000.
c)Repainting, $20,000.
d)The removal of debris, $3000.00.
e)The removal and replacement of wall fixtures such as cupboards and light fittings, $10,000.00.
f)Electrical disconnection and reconnection, $1,000.
g)Engineering costs, $7,700.
[14] I anticipate that this major work will address the defects in the plaster work throughout the house as jacking up various sections will, no doubt, result in cracking to the plasterwork which will require repair and that have been included in the estimate for re-plastering.
[15] That work will also address the sag in the upstairs hallway and the problem with the balcony to bedroom 1, so I decline to order the payment of the additional amounts claimed for those items.
Internal concrete stairs
[16] The experts agree that the stairs are defective. Mr Bickle, from Crawford & Company recommends the stairs be demolished and re-formed whereas JHA recommends that the stairs be re-formed over the existing stairs and estimates a cost of $3,670. I prefer the approach of JHA as it involves less disruption and achieves the same result.
INTERMEDIATE DEFECTS
Laundry benches too short
[17] JHA says that, because Mr Stirling was dealing with the cabinet maker and this was a prime cost item, it is not a defect. Mr Stirling says[4] that:
I dealt with the cabinet makers, through Mr Mackrell, in relation to the position/layout of the kitchen…not the laundry benches or anything else as the agreement with Mr Mackrell was that everything else was to be as per the Contract and the plans for the property.
[4] Statement filed 21 February 2011, paragraph 125.
[18] The contract provides that the laundry benchtops and cabinets are to be “owners choice”. There is a facsimile from Cymbal Enterprises Pty Ltd dated 31 May 2010 stating: “Please find attached signed copy by Stirling”. The “signed copy” includes plans for the laundry cabinets. I find that the length of the laundry benchtop was a matter within Mr Stirling’s control. I do not allow any amount for this claim.
No duct for range hood
[19] Mr and Mrs Stirling were given a $5,000 credit for kitchen appliances. JHA suggests that the credit addresses any amount that Mr and Mrs Stirling might claim. Mr Stirling says the credit was for the appliances themselves and not the installation and that view is supported by the terms of the contract.
[20] Mr Mackrell asserts that he had completed the works the subject of the contract. If true, that work should have included the installation of a range hood, albeit one provided by Mr and Mrs Stirling. If, as it appears from the material, Mr and Mrs Stirling had not provided Mr Mackrell with a range hood to install, then it would have been difficult for him to make provision for its installation without knowing the dimensions of the appliance.
[21] Mr Mackrell should have provided a credit for the failure to install the range hood. In the circumstances, JHA’s figure of $255 is a more realistic assessment of Mr and Mrs Stirling’s loss.
Insulation to all roof areas
[22] Mr and Mrs Stirling state that the roof insulation has not been installed correctly, but they do not make a specific claim in that regard. Austral Insulation conducted a BERS assessment on 20 November 2008 on the basis of the plans and information provided by Mr Mackrell which showed that the building complied. I can find no invoice or report to substantiate this claim.
Timber not brick columns
[23] The experts agree that the plans show brick columns at the alfresco area. There are different reasons given for why Mr Mackrell installed timber columns instead of brick. Mr Stirling says that Mr Mackrell suggested that it would be cheaper to install timber and promised a credit for the difference.
[24] The clear inference in Mr Stirling’s statement is that he accepted the change to timber. He cannot now claim the cost of replacing the timber with brick. However, Mr and Mrs Stirling are entitled to a credit. As there is no evidence before me of what that credit should be, I adopt JHA’s assessment of the cost of “disguising” the timber columns by erecting brick surrounds. I allow $1,788.00 for this item.
Garage floor
[25] JHA says that the cracking to the garage floor is a normal part of building maintenance for slabs built on reactive soils. Interlara says that the cracking is more than one might expect in a building of this age and recommends that the cracks be filled with epoxy resin and painted. I accept the cost of $3,000. Given that the floor will be painted in any event, I do not accept the cost of $900 for removing a stain on the floor.
Water flows from ensuite shower
[26] JHA says that this is a design defect. Interlara says that the floor has deflected (due to the defective framing I have already discussed) and this is the reason why the water will not flow correctly. If Interlara is correct, then the rectification of the structural problems should rectify the bathroom. I do not allow any amount for this item.
No flashing to doors
[27] JHA says that the doors are self flashing and do not require additional flashing. Interlara has obtained a building-in detail from the door manufacturer that clearly shows separate flashing beneath the doors. I accept that this is a defect and I accept the cost to repair at $1,160.00 per door, a total of $2,320.00.
Drainage to retaining walls
[28] Interlara states that it would be good practice to have drainage behind the wall but that it is not necessary. I decline to award any amount for this claim.
Contractual matters
[29] Items 22 to 28, 30 to 32, 57, 71 in Mr and Mrs Stirling’s spreadsheet of defective or incomplete work are items that they say should have been installed by the builder. JHA says that these items were not included in the original building plans. Some of the items are requirements of the body corporate of the estate in which the house is located and Mr Stirling says that Mr Mackrell knew of these requirements and assured Mr Stirling that they would be included.
[30] I have been provided with a copy of the contract but I do not have a complete copy of the plans annexed to the contract (if there were any), the approved plans or the approved body corporate plans. Because there is a dispute about whether these items were to be included in the works, it is for Mr Stirling to convince me of his position. In the absence of the relevant plans, I am not so convinced and I do not allow any amount for these items.
MINOR MATTERS
[31] Mr and Mrs Stirling have claimed, at item 9, $20,000 as a global figure for a range of relatively minor defects. Some of these will be addressed when the major structural repairs are done. Other defects seem to be the product of the time Mr and Mrs Stirling have lived in the house since this proceeding commenced. I propose to allow an additional global sum for these items of $1,500.00.
[32] Mr and Mrs Stirling also claim for $1,263.00 they paid to Mr Mackrell for certificates and approvals that they did not use. According to Mr Mackrell, Michael Ross Certifications issued an invoice on 1 April 2009 for that amount. In fact, Michael Ross Certifications only invoiced $1,157.00. As to the other amounts Mr Stirling says he paid, the comment is in response to Mr Mackrell’s assertion that these were costs he incurred in accordance with the contract. The invoices speak for themselves, they have been paid and I can see no clear basis for a refund to Mr and Mrs Stirling of $1,263.00.
[33] Mr and Mrs Stirling also claim $5,000 for kitchen appliances they paid for but were not supplied by Mr Mackrell. Mr Mackrell has already provided a credit of $5,000. I do not allow this sum.
[34] Finally, Mr and Mrs Stirling claim $4,200 for GST overpaid. Clause 1 of the building schedule shows the price to be $420,000 inclusive of GST. On page 3 of the schedule the contract price has been broken down as “price excluding GST $378.000, GST $42,000, and the contract price is $420,000”. The logical inference is that the parties agreed on a GST inclusive price of $420,000 and Mr Mackrell simply calculated the breakdown incorrectly. I do not allow this claim.
CONCLUSION
[35] Because Mr Mackrell’s claim is no longer on foot, I have not considered the contractual disputes between them except where is affects my determination of the defective items.
[36] Despite the assertions of JHA, it is clear that this home has some significant structural defects, the rectification of which will be expensive and disruptive. It is also clear, however, that many of the lesser defects in the home will be rectified by the major works.
[37] I understand that Mr and Mrs Stirling have been severely inconvenienced by Mr Mackrell’s failure to complete the work in a tradesmanlike manner and that this factor must have weighed heavily with them for some time. However, I am also aware that Mr Mackrell has almost no capacity to meet an order of the tribunal. In that case, a serious examination of relatively minor defects, and certainly defects that would be category 2 defects under the Queensland Building Services Authority tests, is of little utility to any party.
[38] I am satisfied that Mr Mackrell should compensate Mr and Mrs Stirling as follows:
Framing $150,000.00 Plastering 40,449.00 Preparation for framing 5,000.00 Resetting jambs, skirting and architraves 10,000.00 Repainting 20,000.00 Removal and replacement of wall fixtures 10,000.00 Electrical disconnection and reconnection 1,000.00 Engineering 7,700.00 Concrete stairs 3,670.00 Range hood duct 255.00 Timber not brick columns 1,788.00 Garage floor 3,000.00 Flashing to doors 2,320.00 Global amount for minor matters 1,500.00 $256,682.00
[39] I direct Mr Mackrell pay Mr and Mrs Stirling $256,682.00 by 27 April 2012.
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