Moose Plastering Pty Ltd v Habul
[2014] QCATA 354
•12 December 2014
| CITATION: | Moose Plastering Pty Ltd v Habul [2014] QCATA 354 |
| PARTIES: | Moose Plastering Pty Ltd (Appellant) |
| v | |
| Omar Habul (Respondent) |
| APPLICATION NUMBER: | APL419-13 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Judge Alexander Horneman-Wren SC, Deputy President Susan M Burke, Member |
| DELIVERED ON: | 12 December 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Application for leave to appeal granted. 2. The appeal is allowed. 3. The decision of the Tribunal made on 22 August 2013 to the extent that it relates to defect items 1, 2, 8 and 9 in the joint experts report filed 4 February 2013 is set aside. 4. In lieu thereof it is ordered that the Respondent’s claim in relation to defect items 1, 2, 8 and 9 in the joint experts report filed 4 February 2013 is dismissed. |
| CATCHWORDS: | APPEAL – LEAVE TO APPEAL – BUILDING MATTER – where Appellant entered into contract with Respondent builder to carry out plastering work – whether Member made errors on questions of fact or questions of mixed law and fact - whether decision-maker made errors of fact in interpretation of evidence Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 3(b), s 4(c), s 61, s 62(1), s 142(1), s 142(2), s 142(3)(b), s 147 Canada (Director of Investigation and Research) v Southam Inc [1997] 1 SCR 748 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”).
REASONS FOR DECISION
Nature of the Proceedings and Jurisdiction
This is an application for leave to appeal and to appeal a decision of the Tribunal in a domestic building dispute[1] pursuant to s 142(1) and s 142(3)(b) of the QCAT Act.
[1]Tribunal’s jurisdiction to hear domestic building disputes is pursuant to s 77 of the Queensland Building Services Authority Act 1991 (Qld) (now the Queensland Building and Construction Commission Act 1991 (Qld)).
The dispute arose out of the installation of plasterboard and cornices at a home being constructed at 34 Lapford Circle Drewvale (“the property”).
The Respondent on appeal, Mr Habul, was the owner of the property and also an experienced builder. The Appellant, Moose Plastering Pty Ltd (“Moose Plastering”), was the contractor engaged to carry out the plastering work.
The issues in dispute before the Member concerned the following matters:
a) the proper parties to the contract to the extent that the plastering contractor was either Mr Jakupovic, the First Respondent before the Member, or the Second Respondent before the Member, Moose Plastering, which was a company operated by Mr Jakupovic;
b) whether the contract was an oral contract, or partly oral and partly written;
c) which relevant trade standard to be applied to the contract; and
d) which of the parties is liable for the defects listed in items 1, 2, 3, 5, 6, 7, 8, 9, 11 and 12 identified in the Final Report QCAT Experts Conclave filed 4 February 2013 (“the joint experts report”).
It was agreed between the parties that the Member would consider the question of liability only on the basis that the issue of quantum could be resolved by the parties at a later date, or alternatively by the Tribunal at a later stage.
The matters the subject of the appeal concern the Member’s decision in relation to defects listed in items 1, 2, 8 and 9 in the joint experts report.
Legal Considerations for Leave to Appeal
A party may appeal on a question of law without the Appeal Tribunal’s leave, unless the decision falls into one of the limited categories set out in s 142(2) or (3)(a) of the QCAT Act.
If the appeal concerns a question of fact, or a question of mixed law and fact, a party may generally appeal once leave to appeal has been granted.[2] The grounds upon which leave to appeal is sought must be stated in the application for leave to appeal.[3]
[2]QCAT Act s 142(3)(b).
[3]QCAT Act s 143(2)(b).
The distinction between questions of law and fact is not always clear. Courts have not found it easy to formulate a satisfactory test of universal application.[4]
[4]Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 394.
The Supreme Court of Canada in Canada (Director of Investigation and Research) v Southam Inc[5] has provided the following concise formula:
Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests.
[5][1997] 1 SCR 748 at [35] per Iacobucci J.
The decision in Lida Build Pty Ltd v Miller and Anor [2011] QCATA 219 at [7] to [9] summarises the bases upon which leave to appeal will generally be granted:
[7]Finality in litigation is highly desirable because any further action beyond the hearing can be costly, and unnecessarily burdensome on the parties. [Fox v Percy (2003) 214 CLR 18, 128 per Gleeson CJ, Gummow and Kirby JJ]. A finding of fact will generally not be disturbed on appeal if the evidence before the tribunal supports the inferences drawn and the facts found. [Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 355 per Mason CJ] It is not the Appeal Tribunal’s task to decide where the truth lay as between the competing versions given by parties. [Fox v Percy (2003) 214 CLR 118 at 129 per Gleeson CJ, Gummow and Kirby JJ]
[8]Whether a decision is based on findings of fact which are open on the available evidence is a question of law. [Kostas v HIA Insurance Services Pty Ltd t/a Home Owners Warranty (2010) 241 CLR 390]
[9]Leave to appeal will ordinarily only be granted when a question of general importance upon which further argument and a decision of the Appeal Tribunal is to public advantage [Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 578 and 580]; there is a reasonably arguable case that the primary decision-maker made an error [QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41] and there are reasonable prospects that the applicant would be granted orders in its favour [Cachia v Grech [2009] NSWCA 232, [13]]; or to correct a substantial injustice to the applicant caused by error [QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 QD R 41].
The principles the Appeal Tribunal applies when considering an application for leave to appeal are summarised by Keane JA (as His Honour then was) in Pickering v MacArthur [2005] QCA 294. Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.[6]
[6][2005] QCA 294 at [3].
An appeal to the Appeal Tribunal on a question of fact or mixed law and fact is by way of rehearing.[7] The Appeal Tribunal must consider whether it is demonstrated by an appellant that there has been some legal, factual or discretionary error obvious on the record.[8] The Appeal Tribunal will not usually disturb findings of fact on appeal if the evidence is capable of supporting the conclusions.[9] An appellate tribunal may interfere if the conclusion is “contrary to compelling inferences” in the case.[10]
[7]QCAT Act s 147(2).
[8]Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203-204, [14]; Allesch v Maunz (2000) 203 CLR 172 at 180, [23]; CJJ v VAJ (1998) 197 CLR 172 at 202, [111].
[9]Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125-126.
[10]Chambers v Jobling (1986) 7 NSWLR 1 at 10.
Appellant’s Grounds of Appeal
The application for leave to appeal and to appeal filed by Moose Plastering sets out the following grounds of appeal:
(a)the orders (of the Member) are uncertain as to the proportion as to cost of rectification;
(b)it was found that there was an implied contractual term that the Appellant would tell the Respondent that the substrate was defective. There has not been a finding that the Respondent would have acted or taken notice should such a conversation have taken place. It has been found that the Respondent in fact refused to take any remedial action when other substrate defects were brought to his attention and therefore the finding is contrary to the weight of the evidence;
(c)It was not open as a matter of fact or law that required the Appellant to tell the Respondent of substrate defects but was the sole responsibility of the Respondent especially in circumstances where the Respondent was present during the plastering.
Extensive written submissions prepared by Counsel were provided on behalf of Moose Plastering in support of the appeal application.
No submissions were made in relation to whether leave to appeal should be sought by Moose Plastering.
Moose Plastering submits as its primary position that “no final decision has been made concerning liability and therefore nothing is yet appealable.”[11]
[11]Paragraph 2 of submissions by the Applicant re Extension of Time dated 17 October 2013.
If this submission is not accepted, Moose Plastering then appeals the decision on the basis that the decision of the Member is unclear insofar as it extends to four of the defects which were in dispute, being defects listed in items 1, 2, 8 and 9 identified in the joint experts report.
The defects the subject of the appeal relate to ceiling defects in the living room and the kitchen in the downstairs of the property (items 1 and 2) and wall defects on the upper level landing and TV areas of the property (items 8 and 9).
Defect 1 relates to a bowed plasterboard joint caused from a low joist or possibly a row of low joist hangers. Defect 2 is a misalignment in the kitchen ceiling caused by low or high joists. Both defects originate from defects in the frame.
In relation to both defects, the Member determined that Moose Plastering was responsible for the alleged defects in the final finish. The reasoning for this conclusion was that a duty was owed by the plastering contractor to check the frame before fixing the plasterboard and an obligation was imposed on the plastering contractor to draw to the builder’s attention any defect in the substrate before carrying out the plastering work. Thus, in the absence of notification to the builder of any substrate defects, by fixing the plasterboard to the defective substrate the responsibility for achieving the required level 4 finish[12] to those areas shifted to Moose Plastering.[13]
[12]Level 4 of AS/NZS 2589:2007.
[13][48] of the Member’s decision.
Moose Plastering submits that the Member erred in finding that Moose Plastering contracted to achieve a level 4 finish in its plastering work because it was not possible to achieve that result given the frame which was provided by Mr Habul as the basis for the plastering work. It is submitted that Moose Plastering had no control over the quality of the substrate frame provided by Mr Habul, particularly in circumstances where there was no specification for the use of battens which would ensure the correction of any potential defects in the frame.
Finally, in relation to defect items 1 and 2, it is submitted that it is unreasonable to expect a plastering contractor to communicate with a builder every time a defect is identified by it and to keep records of any conversations to protect it from subsequent liability.
In relation to defect items 8 and 9, the Member determined:
[72]The experts found that the walls in the landing and TV areas on the upper level and in the passageway behind the stairs were not straight. The problem was identified as poor building work. There were proud and misaligned studs and a door opening to an ensuite had been framed in using different types of wall studs and a different manufacturer’s plasterboard. Neither area was to a level 4 finish.
[73]As previously stated, it is a responsibility of both builder and plasterer to ensure a plumb square straight and secure substrate before plasterboard is fixed. If the plasterer finds it not so, the attention of the builder must be directed to the defect.
[74]There is no evidence that Mr Habul’s attention was drawn to these areas of complaint before fixing. Mr Beynsberger talked to Mr Habul about the stair treads, he talked to him about the expansion joint and he talked about an exposed beam in front of the dining room and living room. Accordingly, the plasterers are now responsible to rectify these areas of complaint to enable a level 4 finish to be achieved.
Moose Plastering submits that the decision is not clear as to the extent of any contribution for which Mr Habul should be liable in relation to those defects. Further, the decision of the Member is unreasonable as both parties inspected the substrate frames in the relevant areas when the quotation was being prepared and it would be unreasonable to expect the plastering contractor to constantly check and recheck the building work before completing its allocated part of the job.
Further, it is submitted that the Member did not take into account that, even if Mr Habul was warned of the defects in the substrate before the plasterboard was fixed or any plastering work was carried out, there was the possibility that Mr Habul would have directed Moose Plastering to continue with the plastering work in any event without directing rectification of the defects in the substrate. This submission was said to be supported by the fact that in relation to other defects,[14] for which Mr Habul was held responsible, the circumstances had been that Mr Habul had ignored the warning from Moose Plastering and directed work to continue despite the defective substrate.
[14]Defect items 5 and 7 in the joint experts report and the evidence of Mr Beynsberger.
Moose Plastering submits that the Member erred in deciding Moose Plastering was liable for defect items 1, 2, 8 and 9, for in doing so the Member must have inferred the following:
(a)Mr Habul would have taken notice of Moose in relation to all of the identified defects; and/or
(b)the defects having been brought to Mr Habul’s attention would have been rectified by him before the plasterboard was affixed; and
(c)that there would be no commercial impact on the timing of and/or costs of the plastering work related to any rectification work to be undertaken by Mr Habul as a result of the identified rectifications; and
(d)by communicating that defective work to Mr Habul, Moose would simply ensure that Mr Habul knew that the plastering finish would not be to the level 4 standard; and
(e)Mr Habul would not otherwise have known that the substrate frame defects existed; and/or
(f)that those identified substrate frame defects would affect the final standard of finish of he plasterboard.
It is submitted that the Member erred in inferring that Mr Habul would have acted differently in relation to a warning in relation to defects 1, 2, 8 and 9 compared with his reaction to the warning of defects which were brought to his attention in relation to other areas of the work (e.g. defects 5 and 7).
Further, it is submitted that the Member erred in not finding that the possibility of structural movement in the framework was the cause of defects 1 and 2 or that all the defects were due to defective substrate work which was the builder’s responsibility.
Finally, Moose Plastering submits that the Member, having found that both parties were responsible for ensuring a plumb, square, straight and secure substrate before the plasterboard was affixed, failed to make an assessment of apportionment of responsibility for the defective substrate work. In any event, it is submitted that Mr Habul should be responsible for at least 50% of the plastering work defects and 100% responsible for the building frame defects.
Respondent’s Response to the Appellant’s Grounds of Appeal
Extensive written submissions were provided by Counsel on behalf of Mr Habul.
Mr Habul submits that leave to appeal should not be granted for the following reasons:
a) no reasons have been provided by Moose Plastering pursuant to s 142(3)(b) of the QCAT Act identifying the grounds upon which leave should be granted;
b) there is no uncertainty in the orders of the Member;
c) proportionate liability and contributory negligence were not raised before the Member and cannot be agitated on appeal;
d) the inferences which Moose Plastering now asks the Appeal Tribunal to consider were not addressed before the Member and thus cannot now be raised on appeal;
e) contrary to the submission relied upon by Moose Plastering, the decision in Parry & Anor v Ewart [2000] QDC 054, relied upon by the Member, is applicable in the present dispute;
f) no question of general importance to the public has been raised;
g) on the merits, leave to appeal should not be granted; and
h) Moose Plastering has failed to identify any error in the Member’s exercise of its discretion and further has failed to disclose any error of fact or mixed law and fact in the Member’s decision.
Leave to Appeal
(a) An Appealable Decision
Moose Plastering submits that there is no appealable decision on the basis that a final decision has not been given by the Member. Such a submission by an appellant is unusual. If correct, it would mean that the Appellant’s own appeal would be incompetent.
Pursuant to agreement between counsel appearing on behalf of the parties, the Member was to determine only the question of liability for the defects, including the proper parties to the contract. Issues regarding quantum, including the rectification work required, were to be agreed between the parties or, if necessary, determined by the Tribunal at a later date.[15]
[15][42] of the Member’s decision.
Section 142(1) of the QCAT Act provides that a party may appeal from a decision of the Tribunal. A “decision” is defined by the Dictionary in Schedule 3 to the Act to mean an order made or direction given by the Tribunal, or the Tribunal’s final decision in the proceeding. Because the parties agreed that the Tribunal would first determine the issue of liability and later, if required to do so, determine the issue of quantum, and because the latter presently remains unresolved, the Tribunal has not made its final decision in the proceeding.
The question then becomes whether the Member made an order within the meaning of that expression as used in the definition of a “decision”.
Pursuant to s 3(b), the objects of the QCAT Act include to have the Tribunal deal with matters in a way that is accessible, fair, just, economical, informal and quick. To achieve those objects (and others), s 4(c) requires the Tribunal to ensure proceedings are conducted in an informal way that minimizes costs to parties, and is as quick as is consistent with achieving justice.
Section 62(1) permits the Tribunal to give directions and do whatever is necessary for the speedy and fair conduct of the proceeding.
In conducting the proceeding in the manner agreed to and sought by the parties, so that the issue of liability could be determined first with a later determination of the issues of quantum and costs, if necessary, the Member embarked on an appropriate exercise of the Tribunal’s powers under s 62(1) and such conduct conformed with the Tribunal’s obligations to achieve the objects of the Act.
In Landsal Pty Ltd (in liq) & Others v REI Building Society now The Co-operative Building Society of South Australia,[16] the full court of the Federal Court of Australia observed:
If, in the exercise of his inherent jurisdiction, a judge decides to conduct a trial in separate parts, there is no requirement that he make an order reflecting the conclusions he has reached part way through the hearing. Whether a judge, in exercising this particular jurisdiction has reached a conclusion on some of the issues part way through the task, which can be immediately made the subject of an appeal, depends upon whether he has either formally incorporated those conclusions in an order or can be seen to have intended to have done that. If in such a case it can be seen that the judge did not intend to make an order reflecting conclusions he has reached part way through conducting the trial of the matter, then there is nothing that can be the subject of an appeal, whether by leave or as of right.
[16](1993) 41 FCR 421 at 431.
In our view, the Member reached conclusions on the issue of liability in respect of each and all of the defects which remained the subject of dispute within the proceeding. Quite clearly, though, the Member did not incorporate those conclusions in an order. The only orders which the Member made were in the nature of directions for the filing of further evidence and submissions on appropriate measures for, and the costs of, rectification, and the costs of the proceedings, and for the determination of those issues on the papers without a further hearing.
Therefore, the question is whether the Member intended to have incorporated his conclusions in an order. In our opinion, the Member did so intend.
At paragraph [8] of the reasons the Member identified that the parties were seeking “a determination as to liability”. In dealing in turn with each of defect items 1 and 2, 7, 5, 6, 8 and 9,[17] being those which remained the subject of dispute in the proceeding, the Member made a specific determination in respect of liability. The Member’s determination in respect of defect item 3 was in less conclusive terms than that for the other defects.[18] Nonetheless, we are satisfied that in respect of that defect too the Member was intending to reach a final conclusion as to liability which was to be incorporated in an order.
[17][48], [55], [68], [69], [71] and [74] of the Member’s decision.
[18][64] of the Member’s decision.
The Member’s intention to include his conclusions in an order is supported by the manner in which he dealt with the remainder of the proceeding in the final paragraph of the reasons. Immediately following the last of his determinations as to liability for the specific defects, under the heading “Quantum”, the Member said:
The parties propose to initially attempt to resolve issues about rectification between themselves. Failing that the Tribunal shall adjudicate on damages and costs. The matter cannot remain with the parties indefinitely however. Accordingly I shall make appropriate orders now to finalise the matter in the event the parties are unable to resolve the matter between themselves. The final issues may be appropriately dealt with on the papers. (emphasis added)
In this concluding paragraph the Member identified that the only adjudication which remained to be performed in the proceeding would be “on damages and costs”. Those were the “final issues” which the Member identified as being able to be dealt with on the papers. To the extent that the Member referred to the resolution or finalisation of “the matter”, reading his reasons as a whole, this could only be a reference to those two outstanding issues. It is clear that, on the issue of liability, the Member had reached his final conclusions and that the expression of those conclusions in the reasons for decision was intended to embody his determination as would an order.
Therefore, we are satisfied that there is an appealable decision.
The decision is not the Tribunal’s final decision in the proceeding, accordingly this is a further reason why leave to appeal is required: s 142(3)(a)(ii) of the QCAT Act.
(b)Question of General Importance and Public Advantage
There is no suggestion from Moose Plastering that the issues canvassed in this appeal are matters of general importance or require a decision due to some matter of public importance.
The matters in dispute are personal to the parties and do not relate to any overriding matters of public interest. The matter is a domestic building dispute which relates to allegations by one party that the work carried out by another party was defective.
Neither party has identified any question of general importance upon which further argument should be agitated and from which a decision of the Appeal Tribunal would be to the public advantage.
(c)Did the Primary Decision-maker make an Error?
Findings of fact by a Tribunal will not usually be disturbed on appeal particularly if any facts inferred by the Tribunal as forming the basis of its finding are capable of supporting its conclusions and there is evidence capable of supporting any inferences underlying such conclusions.[19]
[19]Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125-126.
An appellate Tribunal may interfere if the conclusion at first instance is contrary to compelling inferences which can be drawn from the evidence.
In Fox v Percy[20] the Court stated:
In such circumstances, the appellate court is not relieved of its statutory function by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion.
[20]Fox v Percy (2003) 214 CLR 118 at 128 at [29] per Gleeson CJ, Gummow and Kirby JJ.
The decision of the learned Member has addressed individually the defects which were the subject of dispute. The principles relied upon by the Member in reaching a final decision in relation to liability for each defect are set out in the decision.
In each instance, the Member relied upon the decision of McGill DCJ in Parry & Anor v Ewart.[21] There does not appear to be any misinterpretation by the Member of the relevant principles outlined by McGill DCJ regarding the duty of a contractor to warn of the need for work to be undertaken before carrying out subsequent work.[22]
[21][2000] QDC 054.
[22]See [34]-[40] of the Member’s decision.
The Appellant’s contention that the Member erred in finding that it had contracted to achieve a level 4 finish in its plastering work because it was not possible to achieve that result given the frame provided by the builder is misconceived. There was no dispute between the parties that the obligation of the plastering contractor was to complete works to a level of finish for a residential application defined as a level 4 finish in the Australian Standards AS/NZS 2589:2007.[23] In addition to this Standard, the Member referred to other guides regarding installation such as “Paint and Plasterboard – A guide to best practice methods” and the “Residential Installation Guide”. Such a finish was achievable, but it required rectification work to the substrate before the plastering was performed.
[23][17] of the Member’s decision.
In reliance upon the reasoning of McGill DCJ in Parry & Anor v Ewart,[24] the Member applied the principles set out therein and concluded that in the circumstances of this case the responsibility for the defective finish transferred to the plastering contractor.
[24][2000] QDC 054 at [18]-[21].
The only point which the Member took into account in assessing responsibility for the defective finish was whether the builder’s attention had been drawn to defects in the substrate before the Appellant carried out the plastering work. It is at this point that it would seem, from a reading of the transcript, that there is a reasonable argument that the Member erred in that the Member did not take into account all relevant facts and circumstances and draw reasonable inferences from those facts and circumstances in assessing responsibility for the finish achieved.
The Member accepted the evidence of the joint experts report that items 1, 2, 8 and 9 were defective and that the work did not meet the requisite standard.
Issues of the credit of witnesses were then addressed by the Member. In this respect, the Member relied upon the evidence of employees of Moose Plastering[25] as to whether certain defects in the substrate were brought to the attention of Mr Habul. In relation to the substrate defects in items 1, 2, 8 and 9, there was no evidence that there were any discussions with Mr Habul about the state of the substrate before plastering work was carried out. There was, however, no evidence that defects in the substrate relevant to these items were identified by the Moose Plastering employees. In this regard, it is to be noted that Mr Habul’s evidence was that there were no defects in the frame.
[25]Note in particular the evidence of Mr Beynsberger.
The evidence confirms that the employees of Moose Plastering drew to the attention of Mr Habul problems in various areas of the house, other than those areas relevant to the defects the subject of the appeal. With regard to those defects, the evidence is clear that the employees were directed by Mr Habul “to do the best you can”.[26] In this respect, the evidence is clear that Mr Habul was happy with the substrate provided to the plastering contractor and was insistent that no further work was required to the frame prior to the plastering work being undertaken.
[26]Transcript 2-113; 2-121; 2-126.
The Appellant says that the Member erred in not drawing the inference that even if the state of the defective substrate had been brought to the attention of the builder the likely response would have been that the builder would have instructed the plastering contractor to proceed with the plastering in any event. It is said that this inference should have been drawn because it would be consistent with the response of the builder to other defects which were in fact brought to his attention.
It would seem reasonably arguable that the Member, whilst applying the principles set out in Parry & Anor v Ewart to the evidence with respect to communication between the parties regarding the defective substrate, did not take into account other relevant facts which were presented in this particular case.
There is a reasonable argument that the Member did not take into account the following:
a) that the owner in the present case was an experienced builder;
b) that the quotation for the plastering work was provided at a time when the alleged defective substrate frame was inspected by both the builder and the plastering contractor at the same time;
c) that the owner maintained at all times that the frame was not defective before or after the plastering works were carried out.
(d) Likelihood of Decision in Appellant’s Favour
It is well settled that an appellate Tribunal will not interfere with the decision of a primary decision-maker merely because it may have formed a different view had it been in the position of the primary decision-maker. It is essential that there must be demonstrated some error in the decision-maker’s interpretation of the evidence which would then invoke the appellate jurisdiction.
Taking into consideration all of the evidence before the learned Member, there seems to be some likelihood that the Appeal Tribunal would disturb the findings which were expressed by the Member in the decision on the basis that there is an error in interpretation of the evidence and the application of the principles outlined in Parry & Anor v Ewart to the facts of this case.
It would seem from an understanding of all the evidence that there is a likelihood that a decision in the Appellant’s favour would be determined on appeal.
(e) Correction of Substantial Injustice caused by an Error
Having concluded that there is potentially an error demonstrated to have been evident on the record, it follows that a substantial injustice may have been suffered by Moose Plastering to the extent that it has been determined that it is liable for the rectification work required for defect items 1, 2, 8 and 9 of the joints experts report.
Conclusion on Leave to Appeal
Based on the matters considered above, leave to appeal should be granted.
The Appeal
Section 147 of the QCAT Act relevantly provides:
Deciding appeal on question of fact or mixed law and fact
(1)This section applies to an appeal before the appeal tribunal against a decision on a question of fact only or a question of mixed law and fact.
(2)The appeal must be decided by way of rehearing, with or without the hearing of additional evidence as decided by the appeal tribunal.
(3)In deciding the appeal, the appeal tribunal may –
(a)confirm or amend the decision; or
(b)set aside the decision and substitute its own decision.
It is therefore necessary to proceed with this matter as a rehearing on the merits upon the record of the evidence presented upon the original proceedings, including the transcript of the proceedings.
Appeals by way of rehearing involve a new determination of the rights and liabilities of the parties rather than a mere correction of the errors in the determination of the Tribunal below.
It is necessary to embark upon an investigation into the matters in dispute between the parties which are the subject of this appeal. Those matters relate to the question of liability for the standard of finish provided by Moose Plastering in relation to two areas of the property.
As already stated, the first area concerns ceilings, identified as defect items 1 and 2 in the joint experts report, in the living room and kitchen respectively. The second area concerns walls, identified as defect items 8 and 9 in the joint experts report, in the landing and TV areas on the upper level of the property and in the passageway behind the stairs.
First, however, some of the background to the relationship of the parties needs to be understood.
The Respondent, Mr Habul, is the owner of the property and a builder with 30 years experience.
The Appellant company, represented by Mr Jakupovic, is an experienced plastering contractor.
The two entities had been involved together in projects prior to the construction of the dwelling at Mr Habul’s property.
On or about 5 October 2010, Mr Jakupovic provided to Mr Habul a written quotation for the plastering works required to be carried out at the property. The quotation set out the scope of the plastering work to be undertaken by Moose Plastering. Mr Habul denies having received the quotation, a copy of which was in evidence before the Tribunal.[27]
[27]Exhibit 8.
The quotation was prepared after Mr Habul and Mr Jakupovic had inspected the property together and had agreed on the areas where the plastering work was to be undertaken.
The plastering work was undertaken by Moose Plastering between 8 October 2010 and 15 March 2011. Mr Habul moved into the property in April 2011 and communicated his concerns regarding the alleged defective plastering work to Mr Jakupovic in about June 2011.
On 5 August 2011, Mr Habul lodged a complaint with the Queensland Building Services Authority regarding the alleged defective plastering work and later, on 12 August 2011, commenced proceedings before the Tribunal.
Pursuant to a direction of the Tribunal on 17 October 2012, an experts conclave was convened at the property and prepared the joint experts report which was filed in the Tribunal on 4 February 2013.
For present purposes, the joint experts report found the following defects:
(a)Living room – Defect 1 – bowed plaster joint caused by low hanging floor joist hanger. All experts agreed that affixing plasterboard directly to floor joists was accepted with the industry, although if ceiling battens had been used the finish would have been better.
(b)Kitchen – Defect 2 – ceiling deviations caused by low hanging floor joists;
(c)Upper level landing and TV area – Defect 8 – plasterboard bowing between studs because of proud studs;
(d)Passageway behind the stairs – Defect 9 – wall not straight because of underlying proud and misaligned studs. Board removed to reveal an in-filled door opening using different wall studs and different plasterboard.
The authors of the joint experts report were:
(a) Mr Ron Atkinson – a plasterer and carpenter and member of AWCI and BSA;
(b) Mr Paul Sorenson – a builder and employee of Prime Building & Pest Consultants Pty Ltd;
(c) Mr Jim Browning – an employee of Boral;
(d) Mr Nigel Mealing – an employee of CSR.
Mr Atkinson and Mr Sorenson agreed that the standard of plastering work expected from a reasonably competent plasterer was to a default Level 4 finish and this was the expected finish within the building industry unless otherwise agreed between by the parties.
There seems to be little dispute between the parties that the default level of finish is Level 4 of AS/NZS 2589:2007.[28]
[28]Exhibit 11; See also Exhibit 12 – Paint and Plasterboard – A Guide to Best Practice Methods; Exhibit 13 – Residential Installation Guide.
At all times during the hearing, Mr Habul accepted responsibility for the frame[29] and at the same time disagreed with the experts and the conclusions in the joint experts report that the frame displayed any defects. Mr Habul stated that he disagreed with the experts 100%.[30]
[29]Transcript p 122.
[30]Transcript – p 88, 108 and 109.
Whilst the experts, Mr Atkinson and Mr Sorenson, agreed upon the defective standard of the finish of the plastering work, they differed in their opinions regarding liability for the resulting finish.
Mr Atkinson was firmly of the view that if the frame was defective, the responsibility for the defective frame remained with the builder despite which trades followed on from the construction of the frame. He stated that it was the builder’s responsibility to ensure that the frame was “plaster ready”.[31] Mr Sorenson, on the other hand, was of the view that the responsibility for the defective result shifted to the subsequent contractor on the premise that the subsequent contractor was responsible for the final standard of work.
[31]Exhibit 12 p 6.
Evidence of industry practice regarding the standard of finish expected of a reasonably competent plasterer and the published guides relied upon as an educative tool for the industry was provided in the form of the publications Australian Standard 2589:2007[32] and The Guide to Paint and Plasterboard published by the Queensland Building Services Authority.[33]
[32]Exhibit 11.
[33]Exhibit 12.
The latter guide sets out the responsibilities of the builder and the plasterer. It states that it is the builder’s job to ensure that the plasterer can commence his job with a frame that is plumb, square, straight and secure and that the trimmers are in place and the ceiling has no deviations. It is the plasterer’s responsibility to check for deviations in the walls and ceilings, to check trimmers for change of directions and to notify the builder if any rectification is required.[34]
[34]See p 6, 7 and 27 of Exhibit 12 - Paint and Plasterboard – A Guide to Best Practice Methods.
Two employees of Moose Plastering provided evidence regarding their involvement in the plastering work undertaken at the property. Mr Beynsberger, an experienced plastering contractor with 25 years experience, had worked with Moose Plastering for 15 years. Mr Beynsberger recalled the conversations he had with Mr Habul regarding defects in the carpentry, particularly with the frame. Mr Beynsberger gave evidence that those conversations did not include the problems with the frame in the areas outlined for defects 1, 2, 8 and 9 but the response from Mr Habul in relation to each issue raised by Mr Beynsberger with respect to other areas was that the plastering contractor was to do “the best you can”.[35]
[35]Transcript 2 – 113; 2 – 121 and supported by the evidence of Mr Patten at 2 – 126.
The question of responsibility for work undertaken by a builder and subsequent subcontractors was considered by McGill DCJ in Parry & Anor v Ewart.[36]
[36][2000] QDC 054.
In that case, the tiling work the subject of the dispute had been undertaken by the appellant tiler not as a subcontractor to the builder but pursuant to a contract between the tiling contractor and the owner of the home. The tiling contractor had undertaken extensive tiling work for the respondent/owner and the respondent/owner sought, inter alia, the cost of rectification of defective workmanship in the tiling of a verandah and consequential damage as a result of water penetration caused by the alleged defective tiling.
The main issue determined by his Honour was whether there was an implied obligation on the appellant/tiling contractor to warn the owner that a waterproof membrane should be installed prior to the carrying out of the tiling work. In response to a submission that there was no implied duty to advise because in ordinary circumstances where a tiler was employed by a builder there could be no obligation to give advice as to work which ought to have been done by the builder, or perhaps by another subcontractor, his Honour said:
[16]… There are, I think, two answers to that proposition. The first is that the content of the implied obligation to carry out the work in a proper workmanlike manner must be assessed in the context of the identity of the contracting parties. The appellants in this case were not contracting with a builder, and they must have known that. It is well recognised that a term will be implied into a contract to do work that the work will be done with proper care and skill; Young & Martin Ltd v McManus Childs Ltd [1969] 1 AC 454 at 465, Streeter v McLennan [1959] Qd.R. 135.
….
[18]In these circumstances, the question essentially is one of fact: what ought a reasonably competent tiler do when asked to lay tiles on such a balcony deck.
His Honour determined, on the evidence, that it was open for the Tribunal to find that a warning regarding the need for waterproofing work to be carried out before the tiling was appropriate.
His Honour went on to discuss the situation where a contract had been entered into between a builder and a subcontractor. His Honour concluded that it is by no means clear that there was no duty on a subcontractor to give similar advice to the builder. In this regard, His Honour referred to cases in Hudson’s Building and Engineering Contracts (11th ed., 1995 at p 542) which canvasses the duty to warn in cases where a defective design had been provided by the owner/architect or engineer to the contractor.
It is well established that:
where a person is employed in work of skill it is said that the employer buys both his labour and his judgement; he ought not to undertake the work if it cannot succeed and he should know whether it will or not; of course it is otherwise if the party employing him choose to supersede the workman’s judgement by his own. [37]
[37]Duncan v Blundell (1820) 3 Stark. 6 per Bayley J.
The same principle is stated in Corben v Hayes[38] as cited in McKone v Johnson [1966] 2 NSWR 471 by Sugerman J.A:
Unlike a warranty of good workmanship, a warranty that the work will answer the purpose for which it is intended is not implied in every contract for work. The essential element for the implication of such a term in that the employer should be relying, to the knowledge of the contractor, upon the contractor’s skill and judgement and not upon his own of those of his agents.
[38]Unreported April 27, 1964, Full Court of New South Wales.
The “duty to warn” cases provided as examples in Hudson’s Building and Engineering Contracts, in the majority, relate to cases where the original design for the works is found to be unsuitable and a reasonably competent contractor should then have realised that the original design was likely to prove unsuitable but failed to warn the employer or consultant as the case may be.
The author of Hudson’s Building and Engineering Contracts[39] submits that:
Whether or not a duty is breached will very much be a question of fact, it is submitted. Certainly a contractor will not be expected to vet the details of an Architect’s or other expert’s work or design, and it will only be relatively glaring or obvious design deficiencies judged in the light of the knowledge to be expected from a Contractor of the type employed which will give rise to the duty to warn.
[39]12th ed., 2010 at p 484.
It is also noted that “the case of poor substrate for the application of finishes is one category where good workmanship on the part of the finishing tradesman points directly to a duty to warn.”[40]
[40]12th ed., 2010 at p 485; See: Lewis v Anchorage Asphalt Paving Company (1975) 535 P 2d 1188, at 1195 et seq.; Hudson’s Building and Engineering Contracts 12th ed., 2010 at p 486.
It was held by the Supreme Court of Alaska in Lewis v Anchorage Asphalt Paving Company,[41] in circumstances where the contractor had inspected the site before pricing their quotation, that a paving contractor was in breach of their express or implied duty to do their work in a workmanlike manner and in accordance with good practice, in circumstances where the contractors were specialists upon whom the developer relied and in circumstances where they had failed to warn him that a suitable result could not be obtained by placing the paving on glacial fill. An interesting factor in that case was that the developer himself had excavated and placed the glacial fill as a sub-base which was the reason for the deterioration of the paving and yet the developer had not informed the contractor of that fact.
[41](1975) 535 P 2d 1188, at 1195 et seq.
In the context of using the work of other contractors, the principle has been long established as stated in the Canadian case of Chevalier v Thompkins (1915) 48 CS 53 at 56:
It is the duty of a contractor who undertakes to put his work upon the foundation or other works previously built by other contractors to satisfy himself that these works are sufficient to sustain the work which he himself builds thereon. If he finds them not to be sufficient, it his duty to protest the proprietor to give him proper foundations upon which to build; otherwise, he cannot justify going on with his contract.
Thus following the reasoning of McGill J in Parry & Anor v Ewart and in reliance upon the principles set out in the “duty to warn” cases referred to by the author in Hudson’s Building and Engineering Contracts, it would seem that it would be open to this Appeal Tribunal to find that in its failure to advise Mr Habul of the defective substrate prior to carrying out the plastering work, Moose Plastering had taken responsibility for the finished product and was in breach of its implied duty to warn of the defective substrate prior to continuing with the plastering work.
It is considered however that there are further facts in the present case which distinguish it from the simple facts in the decision in Parry & Anor v Ewart and other “duty to warn” cases. Those further facts relate to what McGill DCJ referred to as “the context of the identity of the contracting parties” in which the contract of the implied obligation must be considered.
Those relevant facts, which were not applicable to Parry & Anor v Ewart, include the following:
a) Mr Habul, the owner in this case, was also a very experienced builder and was supervising the whole job as it was to be his place of residence;
b) Mr Habul, in his capacity as the builder, was present with the plastering contractor at the inspection of the substrate when the scope of the plastering works was agreed between the parties. The scope of works was later documented in the written quotation dated 5 October 2010;
c) Mr Habul was satisfied with the finish of the substrate prior to the plastering work being commenced and, remained so even after he had been advised by the experts that the finish was defective and unacceptable;
d) it is inherently logical and plausible that, in circumstances where the builder was totally satisfied with the finish of the substrate, the builder would be unlikely to require further work to the substrate prior to the carrying out of the plastering work; and
e) it is consistent with Mr Habul’s reaction to other defects with the substrate drawn to Mr Habul’s attention that a proper inference from the evidence would be that had he been warned of the defective substrate relevant to defect items 1, 2, 8 and 9 his reaction would have been to proceed with the plastering work despite the substrate defects in any event.
Accordingly, we have formed the view that the particular facts of this case, and in particular Mr Habul’s satisfaction with the substrate which he had built and his regular involvement on the site, militates against the plastering contractor being under a duty to raise with the builder each and every defect which may, or may not, have been obvious to the plastering contractor prior to commencing the plastering work. There was no evidence that the plastering contractor was aware of any of the defects the subject of the appeal. The inference to be drawn was that it was not, it having drawn other defects of which it was aware to the attention of Mr Habul.
Even if such a duty did exist, we are satisfied on the evidence that the likelihood of Mr Habul instructing the rectification of the defective substrate prior to the plastering work being carried out was most unlikely.
In the circumstances, we are satisfied that the responsibility for the defective substrate remained at all times with Mr Habul and thus the responsibility for the unsatisfactory finish must be accepted by the contractor who provided the substrate. Accordingly, Mr Habul must bear the responsibility for the defects in items 1, 2, 8 and 9 of the joint experts report.
Having reheard the matter on appeal, we will substitute an order setting aside the decision of the learned Member and dismissing the Respondent’s claim in relation to defect items 1, 2, 8 and 9 of the joint experts report.
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