McNab and Pyramid Constructions (WA) Pty Ltd
[2017] WASAT 3
•11 JANUARY 2017
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
CITATION: MCNAB and PYRAMID CONSTRUCTIONS (WA) PTY LTD [2017] WASAT 3
MEMBER: MR C RAYMOND (SENIOR SESSIONAL MEMBER)
MR J FISHER (SENIOR SESSIONAL MEMBER)
HEARD: 4 AND 5 OCTOBER 2016
DELIVERED : 11 JANUARY 2017
FILE NO/S: CC 530 of 2016
BETWEEN: PETER MCNAB
Applicant
AND
PYRAMID CONSTRUCTIONS (WA) PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) Complaints by individual lot owners in strata scheme and by strata company in respect of same alleged faulty and unsatisfactory regulated building services Whether applicant or strata company the appropriate complainant Whether appropriate remedy is a remedial work order or order for payment of costs of remedial work Whether carrying out variation in compliance with contract but not in compliance with building licence unsatisfactory work or work not carried out in proper and proficient manner Whether justice of the case requires costs award
Legislation:
Building Code of Australia
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 5(5), s 11(1)(d), s 36(1)(b)
Building Services (Complaint Resolution and Administration) Regulations 2011 (WA), reg 5
Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA)
Legal Profession Act 2008 (WA)
Strata Titles Act 1985 (WA), s 3(1), s 3(2)(a), s 17, s 33
Result:
Complaint upheld in part and dismissed in part
Summary of Tribunal's decision:
The applicant was one of 10 lot owners in a strata scheme comprising 24 lots, who lodged complaints with the Building Commissioner under s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) against the respondent. The strata company had lodged identical complaints.
The Tribunal rejected submissions by the applicant that he was entitled as a person with a sufficient interest to advance complaints relating to common property as the Tribunal considered such course to be contrary to the Strata Titles Act 1985 (WA). The Tribunal found that the applicant was entitled to insist on a monetary payment in lieu of a remedial work order but held that there was no sufficient reason justifying the refusal to allow the respondent to carry out remedial work. Consequently the costs payable were to be assessed on the basis of what it would cost the respondent rather than a third party contractor to carry out the necessary remedial work.
The Tribunal thereafter considered the evidence in relation to each complaint item. The applicant was found to have succeeded with approximately two thirds of his complaints although some of the higher value complaints failed. The Tribunal found that the case could not have been advanced without the expert evidence relied on by the applicant. Further the Tribunal accepted the applicant's submissions that during part of the proceedings prior to the hearing when he was a fulltime Senior Member of the Tribunal he had no option but to engage a legal representative to conduct the proceedings on his behalf.
Having regard to all relevant circumstances the Tribunal determined, contrary to the submissions of the respondent, that the justice of the case called for the applicant to be awarded one half of whatever legal costs and expert witness fees were necessarily incurred in the proceedings which were then considered and fixed by the Tribunal. Orders were made accordingly.
Category: B
Representation:
Counsel:
Applicant: In Person
Respondent: Mr R Shaw
Solicitors:
Applicant: N/A
Respondent: Lavan Legal
Case(s) referred to in decision(s):
Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)
Nelson v Mardesic (1998) 22 SR (WA) 42
Rainbow Pty Ltd and Hawkins & Anor [2007] WASAT 216 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
The applicant (Mr McNab) lodged a complaint with the Building Commissioner pursuant to s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) relating to a regulated building service provided by Pyramid Constructions (WA) Pty Ltd (Pyramid) in the construction of a multistorey apartment building at 128 Brown Street, East Perth. Mr McNab is the owner of strata Lot 21 being one of the apartments in the development which is described in strata plan 57895 registered on 27 January 2016. The strata company incorporated on such registration occurring, being the Owners of Strata Plan 57895 (strata company), lodged a complaint with the Building Commissioner in respect of the same items of complaint and in respect of many other items of complaint.
It appears Mr McNab and nine other lot owners lodged complaints completely overlapping the items of complaint made by the strata company to avoid the risk of any complaint item failing by reason of lack of standing. Under s 33 of the Strata Titles Act 1985 (WA) (ST Act) where the proprietors of lots the subject of a scheme are jointly entitled to take proceedings the strata company is expressly empowered to take the proceedings. The owners of such lots are entitled to jointly take proceedings in respect of the common property included within the scheme as common property is held by the proprietors as tenants in common in shares proportional to their unit entitlements (s 17 ST Act). On the other hand, a strata company has no standing to make a claim in respect of damage to a lot the title of which is held by the proprietor thereof.
All of these complaints were referred by the Building Commissioner to the Tribunal for determination pursuant to s 11(1)(d) of the BSCRA Act.
The 11 separate matters were listed for hearing over three days commencing on 4 October 2016. Due primarily to the extent of agreement reached by the expert witnesses in conferral prior to the hearing in accordance with the Tribunal's usual practices, the hearing was concluded in two days. The matters had not been consolidated. At the commencement of the hearing the Tribunal directed that the matters be heard together and that the evidence be evidence in all matters.
Mr McNab does not seek any remedial work order, instead contending that the appropriate remedy in his case should be for payment to him of the cost of carrying out any necessary remedial work. This raises issues that do not arise in any of the other cases as the strata company and all other applicants are content with remedial work orders if successful. It is consequently convenient to consider all issues raised in the strata company complaint in common with Mr McNab's complaint in these proceedings. While separate reasons will need to be given in each other matter it will be possible to incorporate by reference aspects of the reasons which follow to avoid unnecessary repetition.
The issues
The resolution of the following issues will be determinative of the matter.
1)In respect of each item of complaint is the strata company or Mr McNab the appropriate complainant entitled to any remedy?
2)Has the building work the subject of each item of complaint been carried out in a manner which is not proper or proficient or which is faulty or unsatisfactory?
3)If so, is the appropriate remedy a remedial work order or an order for payment of the costs of carrying out the necessary remedial work and if the latter, what amount should be awarded?
4)Should Mr McNab be entitled to an award of costs for recovery of legal costs and expert witness fees in the sum of $7,377.56?
It is convenient to address the principles to be applied in respect of issues 1 and 3 first and then to apply those principles when dealing with the merits of each item of complaint.
The appropriate complainant
There is obviously no issue that if a complaint relates to building work constituting part of Lot 21 which is owned by Mr McNab then he is the appropriate complainant in respect thereof. The issue is whether he is the appropriate complainant in relation to any complaint item forming part of the common property. The schedule to the registered strata plan shows that the unit entitlement of Lot 21 is 51 of an aggregate of 1000 unit entitlements attaching to all lots within the scheme. Consequently, Mr McNab holds a 51/1000 share as a tenant in common with all other lot proprietors in the common property.
Mr McNab submits that under s 5 of the BSCRA Act read with reg 5 of the Building Services (Complaint Resolution and Administration) Regulations 2011 (WA) (Regulations), he is a person with a sufficient interest to make a complaint.
Section 5 of the BSCRA Act provides:
5. Making complaint about building service or home building work contract matter
(1)Subject to the regulations, a person may make a complaint to the Building Commissioner about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory.
…
(5)The regulations may make provision as to
(a)who can make a building service complaint; and
(b)any preliminary action required before making a complaint under this section[.]
Regulation 5 of the Regulations provides that a building services complaint may be made by a person whose interests are being, or have been, adversely affected by the carrying out of the regulated building service.
Mr McNab submits that as the legislation is intended to provide protection to consumers it should be broadly, not restrictively, interpreted, to allow a person such as he, having a proprietary interest in the common property to make a complaint in respect of faulty or unsatisfactory building work or building work not carried out in a proper and proficient manner, constituted within common property.
We accept the relevant provisions referred to should not be restrictively interpreted. The Tribunal, and Building Commissioner, have in the past allowed complaints for instance to be advanced by a neighbour having no proprietary interest in the structure related to building work the subject of complaint, but whose interests in his or her own property have been affected.
The difference here is that the ST Act contemplates, as referred to in the introduction above, that either all proprietors being tenants in common will jointly commence proceedings, or that the strata company may do so. Mr McNab is therefore entitled to commence proceedings in respect of common property related building work only if all other proprietors join in the proceedings. Only 10 of 24 lot owners are involved in the matters before the Tribunal, and none of them, nor the strata company, have been joined in these proceedings which have also not been consolidated with any of the other proceedings.
While the BSCRA and Regulations might arguably permit Mr McNab to make a complaint relating to common property (which we do not decide), we consider, and find, that the ST Act precludes him from so doing.
This gives rise to a practical difficulty because in respect of some items, which appear to relate to common property, Pyramid has agreed to pay to Mr McNab a particular sum to reimburse him for expenditure already incurred or to pay for future remedial work.
This difficulty was raised by the Tribunal during the hearing and it was obvious that none of the parties welcomed the problem. Counsel for Pyramid submitted that if possible it would prefer the Tribunal to grant relief to Mr McNab. Mr McDonald, as agent for the strata company expressed a similar view. He also indicated that, if necessary, any amount ordered to be paid to the strata company in respect of the complaints made by Mr McNab, would in any event be paid on to Mr McNab, on the basis that Mr McNab be liable to arrange and pay for any repair work still to be performed. It must of course be remembered that the strata company made all the complaints which were subsequently repeated by Mr McNab, when making the complaint in his own right to the Building Commissioner.
The parties are not in dispute over who may or may not make a claim although Pyramid submits that the appropriate remedy to be granted, if any, to Mr McNab should be an order for remedial work to be carried out by Pyramid save where expressly otherwise agreed. The Tribunal will therefore adopt as pragmatic a view as possible. Where the evidence is not clear as to whether property forms part of Lot 21, or common property, we will accept there is no issue that the property forms part of the lot. If we determine future remedial work is required to common property we do not consider that it is open to the Tribunal to make an order in favour of Mr McNab. Such an order would be contrary to the ST Act. Even if it were not, without the joinder of, or at least notice to, all other proprietors with an opportunity to make submissions or be joined, we do not consider such an order would be appropriate, particularly, a monetary order for the cost of repair.
The appropriate remedy
In considering the appropriate remedy the Tribunal has on many occasions applied the principles expressed in Nelson v Mardesic (1998)22 SR (WA) 42 (Nelson). In essence the effect of those principles is that an owner is entitled to elect which remedy it would prefer, either an order to carry out remedial work, or, an order for payment of the costs of carrying out the remedial work. That cost would be the reasonable and necessary cost of a third party contractor carrying out the work. However, in providing a remedy, that which best balances the opposing interests of the parties should be selected, so that the innocent owner is put in the position it would have been in had the work been properly performed, without placing an unnecessary burden on the builder. Ordinarily this means that the appropriate remedy is for remedial work to be carried out, as the cost to the builder usually will be considerably less than the cost charged by a third party contractor. The owner is under a duty to mitigate its loss so if it unreasonably insists on an order to pay, the costs to be awarded should be reduced to what the remedial work would cost the builder.
Mr McNab claims that the history of dealings with Pyramid justifies his claim for any remedy to which he may be entitled being in the form of an order for payment of remedial costs. His position is that he should be awarded the reasonable costs of a third party contractor carrying out the necessary remedial work, but alternatively, he would rather be awarded the reduced costs of what it would cost Pyramid to carry out the work than have further involvement with Pyramid. He adopts this position notwithstanding that the strata company and other owners are happy for a remedial work order to be made in respect of any building work found to have been carried out in a manner which is not proper and proficient, or is faulty or unsatisfactory.
The difficulties Mr McNab has with the Pyramid are set out at some length in his written statement. Mr McNab relies on the number of complaints made by all applicants and particularly an issue relating to water ingress into the basement car park 'to suggest a problem with this builder … probably mostly in the failure to supervise subcontractors' work'.
A claim in relation to the ingress of water into the basement was settled. The extent of faulty work was not canvassed in evidence before us. In his statement Mr McNab states that Pyramid never accepted, until the last moment, that there was a problem with drainage in the basement car park. He expresses the view that compensation should have been paid to fix the roof (which obviously Pyramid never agreed to do). Mr McNab refers to proceedings he commenced in the Tribunal to prevent remedial work being carried out although that work was agreed in mediation between the strata company and Pyramid. He says no fair minded builder would have offered the solution agreed. What is not addressed though is that all parties accept that Pyramid contracted to construct to the developer's design. Agreeing to compensate for a drainage issue in the basement is not necessarily acceptance of faulty or unsatisfactory work, or work not having been carried out in a proper and proficient manner resulting in water ingress which we infer from Mr McNab's evidence may have had something to do with the roof for which Pyramid has never accepted liability.
We have given careful consideration to all of Mr McNab's evidence and to all of the complaints made in all the related proceedings including this matter. Many of those complaints were withdrawn prior to the hearing and Pyramid has succeeded in relation to a number of complaints as will appear from our reasons relating to each matter.
It is not unusual that an owner dissatisfied with building work becomes frustrated in dealing with the builder and for many reasons may reach a point when the owner loses confidence and trust in the builder. There is a heightened risk of frustration and loss of confidence and trust when those dealings are complicated by the builder attempting to deal with complaints by a number of other owners in an apartment development. But whether an owner is acting unreasonably in refusing the builder an opportunity to carry out remedial work must be objectively assessed having regard to all relevant factors.
We conclude that no sufficient reason exists which would justify refusing Pyramid the opportunity to carry out any required remedial work. The nature of any defective work accepted by Pyramid or found by us to exist does not suggest a level of incompetence, or indeed any level of incompetence or of standards of workmanship, which would reasonably result in a loss of confidence and trust. We are in particular fortified in this view by reason that the strata company and all other complainants do not support Mr McNab's stance and seek a remedial work order rather than a monetary order.
Accordingly, having regard to the principles discussed in Nelson we shall determine, whenever it is possible to do so on the evidence before us, the cost to Pyramid of carrying out any remedial work to which Mr McNab is entitled. In some instances Pyramid and Mr McNab have agreed costs to be awarded and if appropriate those costs will be awarded.
Has the building work the subject of each item of complaint been carried out in a manner which is not proper or proficient or which is faulty or unsatisfactory and if the latter, what amount should be awarded?
Expert evidence was given in relation to the matters in issue in this matter by the following witnesses:
•for Mr McNab - Mr Neville Ivan Harrison, a builder and building consultant, (who also provided two written reports dated September 2012 and July 2016);
•for Pyramid - Mr Richard Charles Machell, a builder and building consultant, (who also provided a written report dated 26 August 2016); and
•for the strata company - Mr Timothy John Wilson, a consulting engineer, and Mr Chintana Saman Athukorala, a mechanical engineer, (who both provided written reports dated 22 July 2016 and 19 July 2016 respectively).
All experts attended a joint conferral conference and in accordance with the Tribunal's usual practice signed a joint expert report. Messrs Harrison, Machell and Wilson focussed on all building work issues while Mr Athukorala addressed only complaints related to ventilation issues.
During oral evidence Messrs Harrison and Machell debated in detail costings provided by Mr Harrison in his later report and the scope of any necessary remedial work.
In a letter to the Tribunal dated 3 October 2016 (the day before the hearing) and copied to all parties, the solicitors for Pyramid endeavoured to categorise the various claims based largely, as we understand, on the agreements reached by the expert witnesses in the joint expert report (Pyramid's 3 October 2016 letter). In Pyramid's 3 October 2016 letter it set out the complaint items in the following categories:
•those agreed as requiring an order to remedy or pay;
•the complaints in common with a number of proceedings relating to a missing exhaust vent in the various bathrooms;
•the complaint items already compromised in proceedings before the Building Commission;
•the matters rejected by the expert witnesses or which were withdrawn; and
•the other live issues.
Mr McNab and the applicants present were understood to have agreed with the categorisation by Pyramid save in relation to a few particular complaint items and those items have been addressed below based on any qualification expressed.
We address the expert evidence in considering each complaint item below. As already stated these complaint items were initially all raised in the strata company's complaint which were numbered to coincide with the particular lot number associated with the complaint item. That numbering was repeated in the complaints of the 10 owners who have made their own complaints. We have adopted the same numbering.
Complaint 21.1 Window locks
The claim is for $206.50 to provide new keys and locks to two windows which could not be opened with the keys supplied.
The quantum of the claim was not challenged so that subject to deduction of the 25% builder's margin we accept that quantification.
Mr Jerry Maseryk, a director of Pyramid, gave evidence that the keys for all units were delivered to the developer with labelled tags. Nothing was heard about this issue until the strata company lodged its complaint with the Building Commission in 2015 some five years after completion of the building.
We accept that the provision of the wrong keys on completion of construction may be considered either unsatisfactory work or failing to carry out work in a proper and proficient manner. But without any evidence from the developer excluding the possibility of keys becoming mixed with keys for other units we cannot find that Pyramid is responsible for the wrong keys being supplied by the developer to Mr McNab. The complaint therefore falls to be dismissed.
In any event for the reasons which follow this is a claim which in the circumstances of this case can only be advanced by the strata company. The joint expert report identifies the affected windows as the kitchen and bedroom 2 windows. The vertical boundaries of Lot 21 are as designated on the floor plan forming part of the registered strata plan. The strata plan describes those boundaries as being the inner surface of the walls as provided by s 3(2)(a) of the ST Act. The definition of 'wall' under s 3(1) of the ST Act includes a door or window dividing a lot from common property or another lot as these windows must necessarily do as their inner surface constitutes part of the boundary of the lot. The structure of the windows therefore forms part of the common property.
This complaint item will accordingly be dismissed.
Complaint 21.2 Entry door handle
The claim is for $30 for the cost of repair or replacement of the entry door handle. The cost is claimed as part of $500 paid to Rod's Total Maintenance Repairs. Proof of payment of $500 by electronic fund transfer is attached to Mr Harrison's July 2016 report (Harrison July 2016 report).
We accept $30 is a fair and reasonable cost for the repair or replacement of a door handle.
Mr Machell expressed the view in the joint expert report that he considered a loose door handle was a matter which the owner should be responsible to maintain. Mr Harrison had identified the handle as being loose in his 2012 report and gave evidence that he considered that a door handle that came loose within four years of possession of the building constituted faulty or unsatisfactory work.
We might be able to agree with Mr Harrison if there was satisfactory evidence of a gradual deterioration of the handle over a period of time and that the handle had not been subjected to any abuse. There has been no such evidence. The handle might have been abused by anyone using the common property passage to the door. We are unable to find on the evidence before us that the door handle became loose as a result of faulty or unsatisfactory work by Pyramid. The complaint falls to be dismissed on that basis.
In any event this is a claim which could only be advanced by the strata company for the same reasons as given in respect of complaint item 21.1 above with necessary changes referring to a door dividing the lot from common property.
Complaint 21.3 Kitchen sink
The claim is for payment of $313.50 for the cost of repair of the kitchen sink which is alleged to have not been properly fixed to the bench top. An invoice attached to the costings report from Ace Plumbing and Gas dated 18 February 2011 is for this amount but it also covers other work for locating and repairing a gas leak and a water leak in the laundry.
The gas leak is described in the invoice as possibly having been caused by the poor installation.
We accept and find that the repair was necessary due to faulty or unsatisfactory work by Pyramid. The repairs were urgent because of the gas leak and we consider that the cost to Pyramid would have been substantially the same had it arranged for the repairs on an urgent basis.
The charge included a callout fee of $85 plus GST which needs to be apportioned to the other work which is the subject of further claims below. Mr Machell stated that $100 is sufficient for this claim whereas Mr Harrison considered it would be quite difficult to fix the clips at the back of the sink and he thought $150 was appropriate.
In the absence of precise evidence from the complainant itemising the cost we must err in favour of Pyramid. We determine and find that the reasonable and necessary cost of repair in respect of this item is $100 including GST and we award that amount.
Complaint 21.4 No isolation water tap
It was agreed at the commencement of the hearing that this complaint was to be withdrawn and an order granting leave to withdraw and withdrawing the complaint will be made.
Complaint 21.5 Ceiling light in kitchen
The complaint is for payment of $286 to replace a downlight and replace an edge strip to the pantry door damaged by heat from the original light.
At the joint expert referral the experts agreed that the claim should be accepted. During the hearing the parties reached an agreement in respect of this item of complaint and informed the Tribunal that a consent order should be made for payment of an amount of $208 and an order will issue accordingly.
Complaint 21.6 Gas leak
The Harrison July 2016 report reflects that this claim is included in the amount claimed in respect of item 21.3 above to which we refer.
Some adjustment of the total claim is required because the cost included remedying a leak in the laundry which is not the subject of any claim. This work required that the relief lines from the hot water unit be attended to so that they could drain correctly which would be a minor matter. We will allocate approximately one third of the call out fee to this item, that is, $30. In the joint expert report the expert witnesses agreed that $20 plus GST would be a reasonable cost for the work undertaken in respect of the water leak (see item 21.16). Taking into account the $100 including GST allowed in respect of item 21.3 that would result in approximately $150 being deductible from the invoice for $313.50.
We will allow an amount of $160 inclusive of GST in respect of this complaint item.
Complaint 21.7 Gas cooktop not sealed to bench
The Harrison July 2016 report reflects that this claim is included in the amount claimed in respect of item 21.3 above and we have awarded, in effect, the balance of the invoice which includes this claim in dealing with item 21.6 above. We refer to our reasons in respect of both items 21.3 and 21.6 above.
The work involved no more than the application of silicon to the edges of the cook top which would be a minor cost which has been compensated for within the amounts already awarded. While the complaint is therefore upheld no additional compensation will be awarded.
Complaint 21.8 Airconditioning unit installation incomplete
The claim is for payment of $35 being part of a total of $165 charged to and paid by Mr McNab for a contractor to attend to the airconditioning unit not shutting down correctly. There was no fault found in relation to the shutting down of the unit which required no more than an adjustment to the controls but a condensate water valve was fitted to ensure the unit would drain correctly.
At the joint conferral of experts it was agreed the unit should discharge to a tundish or approved discharge point and not to do so constitutes faulty or unsatisfactory building work and that $35 was a reasonable cost for the remediation of this item of complaint.
Pyramid consented in its letter of 3 October 2016 to an order for payment of $35 to be made and an order will be made accordingly.
Complaint 21.9 - Main bedroom odour
A claim in respect of this item was raised in the Harrison 2012 report and asserted to reflect faulty or unsatisfactory building work, but in the Harrison 2016 report it was accepted that the odour was not something within the control of Pyramid.
In Pyramid's 3 October 2016 letter it was recorded that this complaint was either rejected by the expert witnesses' joint report or is withdrawn. We consider the intent was that the complaint be withdrawn and an order granting leave and withdrawing the complaint will be made.
Complaint 21.10 - Aluminium strip at main bathroom door dirty and not covering gap with carpet
The claim is for payment of $25 for the cost of repair of the above complaint. The joint expert report reflects agreement that where the carpet is short of the aluminium strip that constitutes faulty and unsatisfactory work.
During the second day of the hearing Pyramid's counsel advised that Pyramid consented to an order to pay the amount claimed and a consent order will issue accordingly.
Complaint 21.11 - HWS supported on timber
The claim is for payment of $1,479.50 covering removal of the Hot Water System (HWS), removal of the existing tray, the supply of a new tray on a support frame and reconnection of the HWS, inclusive of GST and a 25% builder's markup based on the installation of the system being incorrectly supported by timber offcuts which do not support the load evenly and the safe tray being incorrectly sized. This is the cost of engaging a third party contractor and for the reasons given, only the cost to Pyramid should be awarded if the complaint is made out.
The joint expert report reflects agreement that the HWS is not properly supported between the HWS and the top of the safe tray.
In oral evidence Mr Harrison did not attempt to support the claim for replacement of the safe tray but otherwise supported the scope of work above. Mr Machell contended that it was not necessary to disconnect and remove the HWS as additional battens could simply be slipped underneath the HWS after it had been emptied and the nuts for connections to piping loosened to allow sufficient movement of the HWS. He stated a plumber could achieve this within one hour and that a reasonable cost including call out is $110.
We accept the remedial work should be capable of being carried out in the manner described by Mr Machell however we do not consider his costings to be realistic. The invoice from Ace Plumbing and Gas attached to Mr Harrison's July 2016 report in support of claim item 21.3 shows that in February 2011 a call out fee of $85 was charged and we consider Mr Harrison's estimated rate for a plumber of $120 per hour is reasonable. We consider it is reasonable to allow for one hour of time in addition to the call out fee, that is a total sum of $205 in respect of this item of complaint.
Complaint 21.12 - Balcony drainage not working
The claim is for payment of $14,181.47 for the cost of removal of the balcony tiling and screed, supply and installation of a waterproof membrane, supply and installation of puddle flanges, rescreeding, laying new tiling and grouting inclusive of GST and a 25% builder's markup. This work is claimed to be necessary because the northern drain outlet is 23 millimetres above adjacent paving causing ponding and because there are no perimeter movement joints. Mr Harrison's July 2016 report refers to a complaint about water ingress into Lot/unit 18 below.
In the Pyramid letter of 3 October 2016 liability is accepted for water damage to the living room ceiling (strata company's/Mr Jensen's complaint item 18.1).
The joint expert report reflects agreement that complaint item 21.12 does not reflect any faulty or unsatisfactory building work.
Mr McNab in his witness statement made reference to his observations of what he described as a failure of the balcony to drain water satisfactorily and to water damage to units 17 and 18 below his unit. He said that as presently advised he probably could not prevent Pyramid from accessing the balcony through the cubic space of his lot (the strata plan shows the cubic space above the balcony to be part of his lot), however, unless attitudes changed dramatically access would not be allowed through his front door.
In this setting the parties informed the Tribunal of a settlement having been reached in respect of complaint item 18.1, and this complaint item 21.12, to the effect that Pyramid consents to an order to remedy in respect of complaint item 18.1 provided the order is not expressed in terms of requiring it to remedy the cause and effect of the water damage to the ceiling of Lot 18. Further, a specific consent order was agreed between Pyramid and Mr McNab in terms of which Mr McNab would grant Pyramid access to the balcony on reasonable notice and Pyramid would carry out sealing work to the perimeter of the balcony which would include the installation of a skirting tile all to the satisfaction of Mr Machell. Mr Peter Jensen, a coowner of Lot 18, confirmed the settlement of complaint item 18.1 on this basis.
Orders will accordingly issue in accordance with the agreement between the parties.
Complaint 21.13 - Ensuite exhaust flume not connected
The claim is for an amount of $570.62 to supply a missing cushion head to connect the exhaust flume in the ensuite including GST and builder's markup.
The joint expert report confirmed the complaint. Pyramid through Mr Maseryk and Mr Machell challenged only the costings provided by Mr Harrison. After some debate between the expert witnesses the cost to remedy was agreed in the sum of $207.50. This agreement is based on the material and labour rates provided by Mr Harrison, the reduction coming from an acceptance that the work could be done in less time than estimated initially by Mr Harrison.
Mr McNab advised that he sought to amend the claim to an amount of $200. The claim will be amended accordingly and an order to pay that amount will be made.
Complaint 21.14 - Floor tiling dirty
The claim is for an order to pay $165 for professional cleaning of the ensuite floor tiles which Mr Harrison stated had adhesive residue on them. Pyramid places in issue only the costing but no evidence on costing was furnished on its behalf.
In the absence of evidence to the contrary we accept Mr Harrison's costings based on 1.5 hours work at $80 per hour to which GST must be added but we disallow the claim for a 25% builder's margin on the reasoning given above.
We will make an order for payment of $132.
Complaint 21.15 - Bathroom/laundry shower tiles dirty and odours present from adjoining unit
Mr McNab advised this complaint for which a claim for payment of $165 was made was withdrawn and an order granting leave and withdrawing the complaint will be made.
Complaint 21.16 - HWS relief lines not draining correctly
This complaint is considered and discussed under item 21.6 above in which we valued the work to address this complaint item in the sum of approximately $50. No actual cost was claimed under item 21.16 on the basis that the costs were included in the previous claim but as we excluded costs attributed to this item it is appropriate that an order be made under the current complaint item in the sum of $50 and we will order accordingly.
Complaint 21.17 - RCD neutral
The claim is for payment of an amount of $192.50 being costs paid on or about 16 July 2013 by Mr McNab to West Coast Cabling Solutions which firm was called out by Mr McNab on an urgent basis to investigate a burning smell coming from the electrical switchboard.
The invoice from the contractor of the above date reflects that the contacts on the RCD neutral had been found burned out and that it '[l]ooked like a hot join where the screws had not been screwed down tightly'.
Mr Maseryk gave evidence of his own experience of RCDs burning out and challenged that it would be possible to tell that screws had not been screwed down tightly particularly here when the RCD had been in operation for three to four years.
Neither Mr Harrison nor Mr Machell professed to have any expertise or experience relating to RCDs.
Although we have a minimum of evidence we can assume the contractor who carried out the work has more experience than Mr Maseryk and the contemporaneous note records the most probable cause of the failure of the RCD. We accept that evidence which reflects faulty or unsatisfactory building work.
We consider the invoice reflects what it would have cost Pyramid to carry out the work had it responded to the matter urgently. We shall accordingly make an order for payment of $192.50.
Complaint 21.18 - Cooking odours from adjoining units
The Pyramid letter of 3 October 2016 reflects that this claim is to be dismissed or withdrawn. Mr McNab acquiesced in that statement and no evidence was offered to support the claim.
We infer the intent was to withdraw the claim and an order will issue granting leave to withdraw and withdrawing the complaint.
Complaint 21.19 - Failure of airconditioning radio remote control
The claim is for payment of $1,063.55 paid by Mr McNab to resolve difficulties he experienced in the operation of the airconditioning unit which he stated was turning itself on or off at unexpected times.
The Complaint Schedule reflects that the amount claimed is $601 but Mr McNab says that was in error, the correct amount being reflected in the Harrison July 2016 report and as reflected in the two invoices from the contractor, K D Aire, dated 18 November 2010 and 15 December 2011 attached to the report in the sums of $462 and $601.55 respectively. Mr McNab applied to amend the Complaint Schedule to reflect the total claim of $1,063.55 to which there was no objection. An order will be made accordingly.
The first invoice for $462 contains a narrative reflecting that the only problem found was that the batteries in the remote control were flat. The narrative also reflects that the complaint at that time was simply that the airconditioning unit was not responding. Pyramid cannot be held responsible for that attendance and the claim to that extent falls to be dismissed.
The second invoice for $601.55 contains a narrative consistent with Mr McNab's evidence as it shows that the airconditioning unit was rewired to be operated from a wall controller.
Mr McNab never made any attempt to contact Pyramid about the complaint. He approached K D Aire because he had dealt with them previously in relation to a different product manufactured by the same manufacturer of the airconditioning unit.
Over a year later having heard that the subcontractor who had installed the airconditioning units was addressing the concerns of other lot owners who had experienced the same issue, Mr McNab contacted the subcontractor. An exchange of emails (Exhibit 11) reflect the subcontractor was paid $250 plus GST by the manufacturer to replace each remote control and reprogram the airconditioning unit. Costs incurred by a subcontractor or a supplier would ordinarily be regarded by the Tribunal as a cost to the builder in carrying out remedial work when assessing the cost to be awarded in lieu of carrying out remedial work. In most cases of defective work or material the builder is able to pass the cost on to a subcontractor or the supplier but someone has to bear the cost and as between the home owner and builder, the builder is responsible for its subcontractor or supplier.
In these circumstances Mr McNab is entitled to recover the cost to the builder of remedying the defective works supplied which cost is $250 plus GST namely, $275, and there will be an order accordingly.
Complaint 21.20 - Main bathroom shower cubicle
The claim is for payment of $1,621.12 for the cost of removal of the main bathroom shower floor tiles and screed, installing a new screed, water proof membrane and puddle flange, rescreeding and retiling to ensure water drains correctly, as it is complained that water pools around the existing outlet which is set too high.
The joint expert report reflects agreement that the complaint was justified and that the reasonable cost of repair was $1,300. By Pyramid's 3 October 2016 letter, consent was given to an order for payment of that amount and Mr McNab confirmed his agreement to such an order during the hearing. An order will be made for payment of that amount.
Complaint 21.21- Keys to open external balcony sliding doors
The complaint is that the key only operates to lock and open the two balcony doors internally not from the external side of the door. An amount of $192 is claimed to provide matching keys based on an oral quote from an unnamed locksmith.
Mr Maseryk gave evidence that it was common in high rise apartments to have doors which can only be opened and locked from the inside of the building. Further he stated that what was supplied was in accordance with the contract specifications.
We find that it is not established that the building work is faulty or unsatisfactory or has not been carried out in a proper and proficient manner. This complaint item will be dismissed.
Complaint 21.22 - Rubbish left by contractors in ceiling
Mr Harrison in the July 2016 report recorded he was unable to confirm the complaint. The joint expert report recorded an understanding that the complaint had been withdrawn and Pyramid's letter of 3 October 2016 categorised the complaint on that basis to which no objection or qualification was made.
An order will issue granting leave to withdraw and withdrawing this complaint.
Complaint 21.23 - Incorrect installation of glass windows (two out of three panels) in ceiling alcove (skylight windows)
The glass panes in two panels of the window have cracked as shown in photographs attached to the Harrison July 2016 report.
Approximately four years after taking possession of the unit Mr McNab engaged contractors to apply a tinted film to the skylight windows and sometime thereafter the windows cracked.
As reflected in the Complaint Schedule the contractor advised Mr McNab by email on 23 July 2014 that window film can cause cracking when there is damage to the glass edge 'under the rubbers' as tinting results in additional heat being applied to the glass so that if it had not been installed in accordance with the Australian Standard the glass can fail. Further it was stated that once the glass is removed, where the glass was cracked at the edge a shell or chip would be noticed at that point.
Mr Harrison acknowledged that he had not followed up with the Australian Standard but he inferred the windows had not been properly installed, and that there was contact between the edge of the glass and frame due to omission of or inappropriate spacers. Heat causing the glass and frame to expand will result in cracking in this circumstance.
Without removal of the glass Mr Harrison's theory cannot be tested. Given Mr McNab seeks monetary compensation the question must be raised why the glass was not removed and repaired prior to the hearing so that evidence of the actual condition of the glass could have been given.
Mr Maseryk stated that the glass had to be cut to a specific size and if the rubber gaskets were omitted or incorrectly sized the windows would have failed much earlier. Further he stated, without challenge, that no other windows in the building had cracked, even windows having the same northerly aspect which were most exposed to the sun, including in Mr McNab's unit.
Mr Harrison agreed in the joint expert report that the existence of the cracks did not of itself support a finding that the installation was faulty.
We find that the evidence is insufficient to establish faulty or unsatisfactory building work by Pyramid.
In any event we find this is a complaint which relates to common property which can only be advanced by the strata company. The strata plan designates that relevantly the under surface of the ceiling constitutes the upper horizontal boundary of the lots which clearly does not include the skylights.
This complaint item will accordingly be dismissed.
Given this conclusion we will deal briefly with the costs claimed. Mr Machell estimated that it would cost between $400 and $500 to replace the two windows affected. He believed the work could be done using trestles. Mr Harrison stated the glazier he had dealt with had made it clear this could not be done and his costings were more detailed. If the claim had been upheld on the merits we would have adjusted the quantum supported by Mr Harrison by deducting the 25% builder's margin which he included with a consequent adjustment to the GST component.
Complaint 21.24 - Missing E2 exhaust in bathroom
The complaint is that the drawings approved by the City of Perth show an exhaust grille in the laundry and bathroom but no vent has been installed in the bathroom. An amount of $3,258.75 is claimed to remedy the complaint.
Mr Athukorala dealt with this issue in relation to other apartments, namely, lots/units 13 and 18, but it is not in issue that the situation in Lot 21, Mr McNab's apartment, is identical.
The joint expert report reflects if the vent had been installed in accordance with the approved drawings it would have performed better than that as constructed.
Pyramid was required by the terms of the building licence to construct in accordance with the approved drawings. The experts agreed that it was unsatisfactory for Pyramid not to have applied to the licensing authority to amend the building licence. Whether building work is unsatisfactory, or as we think the experts intended to suggest, that it had not been carried out in a proper and proficient manner, is of course an ultimate conclusion which only the Tribunal can determine.
Mr Athukorala in his report recorded that the missing vent was removed in accordance with amended mechanical service design drawings which was also confirmed by Mr Maseryk. Mr Maseryk stressed that Pyramid is a builder not a mechanical engineer and that it had no reason to challenge the amendment with which it was contractually bound to comply. Mr Athukorola's report acknowledges that the as constructed system complies with the relevant Australian Standard AS1668.2. In his oral evidence Mr Athukorala stated that he could not say the as constructed system did not comply with the Building Code of Australia (National Construction Code).
By not applying for an amendment to the building licence we find Pyramid did not carry out the building works in a manner which is technically proper and proficient. But no consequence flows from this. There is nothing to suggest that if such application had been made it would not have been approved, and the work itself is not faulty or unsatisfactory simply because another system would work better than it.
This complaint will therefore be dismissed.
As to the quantum of the claim, the oral evidence focussed almost entirely on the related claim involving the failure to install an exhaust flume in the ensuite bathroom (item 21.13). In the absence of any detailed challenge of costings in respect of the current item under consideration, if this complaint had been upheld, we would have allowed the costs claimed subject to adjustment to deduct the builder's margin and the consequent reduction in the GST component.
The total amount to be awarded
As a result of our findings above, the amount of monetary compensation to be awarded as being the cost to carry out the remedial work necessary based on the cost to Pyramid of carrying out such work is, including GST, as follows:
| Complaint Item Number | Amount |
| 21.3 | 100.00 |
| 21.5 | 208.00 |
| 21.6 | 160.00 |
| 21.8 | 35.00 |
| 21.10 | 25.00 |
| 21.11 | 205.00 |
| 21.13 | 200.00 |
| 21.16 | 50.00 |
| 21.17 | 192.50 |
| 21.19 | 275.00 |
| 21.20 | 1,300.00 |
| TOTAL | $2,750.50 |
Should legal costs and expert witness fees be allowed?
The claim is for payment of $7,337.56 in respect of legal costs ($1,846), expert witness fees ($5,280) and miscellaneous binding, printing and filing costs ($251.56).
The principles applying to a consideration of a claim for costs for matters dealt with under the jurisdiction of the Tribunal under the BSCRA Act are set out in Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188. There is no presumption that costs will follow the event, nor is there a predisposition or bias in favour of the usual regime in the Tribunal that costs will not be ordered so that each party bears its own costs, but the discretion to award costs will be exercised in a manner which will promote the objects and procedures of the Tribunal. Costs may be ordered when the justice of the case shows that such an order is warranted having regard to the above principles.
The objects and procedures of the Tribunal require that the costs to the parties are minimised and that matters are conducted efficiently and economically. When costs are ordered the Tribunal will carefully scrutinise the costs claimed to ensure the matter has been efficiently conducted and that rates charged are at a rate which minimises costs: see Rainbow Pty Ltd and Hawkins & Anor [2007] WASAT 216 (S). There is no scale of costs which applies to the Tribunal and the nature of the case will determine whether cost scales applying to the Supreme, District or Magistrates Court may provide a useful guide. The applicable Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA) (Determination), published under and in terms of the Legal Profession Act 2008 (WA), is a guide to the maximum rates which may be awarded as between party and party in the most complex cases before the Tribunal: see Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S).
Mr McNab submits that the case could not have been prosecuted by him without expert evidence. It is evident from the consistent denial of liability by Pyramid set out in the Complaint Schedule to all items of complaint advanced by Mr McNab (except items 21.10 and 21.14) that without expert support Mr McNab had no prospect of Pyramid accepting liability for the complaints in issue, nor could he have provided evidence to the Tribunal. On our findings above Mr McNab has either sought to withdraw or will have dismissed eight of the 24 complaints made by him so that he has been successful or reached compromises in respect of two thirds of his complaints. The compromises relate to claims of high value and in our view, clearly would not have occurred if Mr Harrison had not been engaged and in due course a conferral of expert witnesses held, a stage which would have not been reached if Mr McNab had not retained Mr Harrison. On the other hand, some of the complaints dismissed were of a high value relative to other complaints.
The monetary award to which we have found Mr McNab is entitled totals only $2,750.50. We consider that there would be an obvious injustice if Mr McNab were not able to recover any of his expert witness fees. Taking all factors into account we conclude that a just outcome would be that Mr McNab recover one half of whatever expert fees are found by us to be reasonable.
We have reviewed Mr Harrison's accounts which for attendances in 2012 were charged at a rate of $150 plus GST and for attendances in 2016 at a rate of $200. He did not charge for a total of 9.5 hours of time spent on the matter. We consider his fees to be fair and reasonable. Accordingly we will allow an amount of $2,640 being half of the total of $5,280 charged by Mr Harrison in respect of expert witness fees.
Mr McNab submits that he should be entitled to recover legal costs firstly, due to the complexity of the matter, and secondly, because at the time when he had legal representation he was a fulltime Senior Member of the Tribunal. He submits that it might well have been unethical for him to appear on his own behalf and could also have led to difficulties about a perception of bias. Counsel for Pyramid submits that the mere fact that a complainant is a member of the Tribunal should not and could not justify an award of costs, and that the appropriate order having regard to the issues on which Pyramid has succeeded was for each party to bear its own costs.
We consider Mr McNab has been the more successful party, having succeeded with two thirds of his complaints by number, although he was unsuccessful in respect of some of the relatively higher value claims. We do not accept that the complaints individually or together give rise to any particular complexity. But on the other hand we accept it would have been quite inappropriate for Mr McNab to represent himself in the proceedings while he was then a Senior Member of the Tribunal. This was not a matter on which he had any real freedom of choice. Unless other factors negatived the exercise of a discretion to award costs, such as where the case is so simple, or of so a low value, that it would be unfair to expect a losing party to bear any of the other party's costs, we consider that a just outcome requires costs to be awarded. Here both parties had legal representation which illustrates that the case is of a nature that the parties considered legal representation was warranted. We consider the just outcome in this case is that Mr McNab be awarded half of whatever legal costs, and related miscellaneous expenses we determine is reasonable.
The legal costs sought to be recovered are reflected in two invoices from the solicitor's firm representing Mr McNab, Atkinson Legal, dated 21 June 2016 and 3 October 2016. The itemisation of those invoices show that the legal representative acting for Mr McNab, a senior practitioner of more than five years standing, charged at an hourly charge of $550 inclusive of GST.
The invoice dated 3 October 2016 shows a discounted charge was made for services totalling 3.3 hours of $880 including GST plus office costs of $66. This reflects a discounted rate of $266.66 inclusive of GST. The Determination provides for a maximum charge per hour of $374 inclusive of GST. We have scrutinised the services provided as described in the itemised account and accept those services were reasonably required. Taking into account the nature of the matter we find the rate charged to be proportionate to the matter. We will accordingly allow one half of legal costs for the services covered by this account in the sum of $440 inclusive of GST.
The 3 October 2016 account gives no details of the office costs charge. The itemisation reflects only 'COP $60'. We assume, in the absence of any explanation, this refers to the cost of printing. It is not described as a disbursement. We cannot assess on what basis these costs have been calculated and they are disallowed.
The invoice of 21 June 2016 shows time charges for 3.8 hours to a value of $1,900 excluding GST but discounted to $730.42 excluding GST ($803.46 including GST) which equates to a rate of $192.21 per hour excluding GST or $211.43 including GST. This charge rate is significantly less than the rate we have accepted above as being appropriate. We have scrutinised the services provided as described in the itemised account and accept those services were reasonably required. We accordingly allow one half of the total fees claimed being $401.73.
The 21 June 2016 invoice includes charges of $48.84 and $47.70 inclusive of GST for office costs and disbursements respectively. The office costs are itemised as 'COP Document Production'. This cost is disallowed for the reasons given above in relation to the 3 October 2016 invoice. The disbursements are itemised to relate to $21 for 'Filepro Software New Matter Charge' and $24.60 for 'Landgate Search SP 57895' (excluding GST in both instances). We accept the latter disbursement was necessary in order to properly advise in the matter and we allow one half of that cost including GST in the sum of $13.53. In the absence of any information disclosing the true nature of the former charge it is disallowed. It is not clear that this is a true disbursement as opposed to an internally imposed administration fee, and even if it is a disbursement we are unable to assess whether it is a reasonable cost.
The final cost claimed is for miscellaneous binding, printing and filing costs of $251.56 made up of filing fees of $105 (including GST) and miscellaneous binding, printing and filing costs of $146.56 (including GST).
We allow one half of the filing fees in the sum of $52.50 as an obviously necessary cost. In respect of the remaining costs we are unable to reconcile the particulars of the printing and binding work carried out as reflected in the invoice filed to support the charges from Central Server Print and Design dated 20 June 2016 with the documents known to have been filed and used in the proceedings. There is nothing to indicate that the services were carried out on any date other than 21 June 2016 which was well after Atkinson Legal were first engaged on 1 June 2016 and corresponds with the date on which that firm appeared at a hearing in the Tribunal. The itemised legal accounts make no reference to considering any significant number of documents after 21 June 2016. We therefore disallow the binding and printing costs claimed of $146.56.
The total costs awarded is therefore fixed in the sum of $3,547.76 made up of expert witness fees of $2,640, legal costs of $855.26 (fees of $841.73 and disbursements of $13.53) and filing fees of $52.50.
Orders
For the reasons given above the Tribunal will cause an order to issue in the following terms:
1.The complaint lodged by the applicant with the Building Commission on 17 December 2015 and attached Complaint Schedule is amended as follows:
(a)The amount claimed in respect of item 21.13 of $570.62 is varied to $200.
(b)The amount claimed in respect of item 21.19 of $601 is varied to $1,063.55.
2.Leave is granted to withdraw the following complaint items and the complaint items are withdrawn, namely, items 21.4, 21.9, 21.15, 21.18 and 21.22.
3.The following complaint items are dismissed, namely, items 21.1, 21.2, 21.23 and 21.24.
4.By consent and in settlement of complaint item 21.12:
(a)The respondent must on reasonable notice to the applicant but not later than 7 March 2017 carry out sealing work to the perimeter of the balcony of Lot 21 such work to include the installation of a skirting tile in a manner to be certified by Mr Richard Charles Machell, upon completion, as being to his satisfaction.
(b)The applicant, upon compliance by the respondent with its notice obligations under (a) above, shall provide the respondent with free and unhindered access to the balcony of Lot 21 to enable the works described in (a) above to be duly completed.
5.The following complaint items are upheld, namely, items 21.3, 21.5, 21.6, 21.7, 21.8, 21.10, 21.11, 21.13, 21.14, 21.16, 21.17 and 21.19 and in respect thereof the respondent must on or before 31 January 2017 pay to the applicant the sum of $2,750 pursuant to s 36(1)(b) of the Building Services (Complaint Resolution and Administration) Act 2004 (WA) being the cost of remedying such building services.
6.The respondent must on or before 31 January 2017 pay to the applicant costs fixed in the sum of $3,547.76, being:
(a)$855.26 in respect of legal costs;
(b)$52.50 in respect of filing fees; and
(c)$2,640 in respect of expert witness fees.
I certify that this and the preceding [139] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR SESSIONAL MEMBER
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