Nissen v Jarotech Pty Ltd - [2012] QCAT 307

CITATION:

Nissen and Anor v Jarotech Pty Ltd [2012] QCAT 307

PARTIES:	Michael Nissen Annette Nissen (Applicants)
v
Jarotech Pty Ltd t/a Jarotech Constructions (Respondent)

APPLICATION NUMBER:

BD460-08

MATTER TYPE:

Building matters

HEARING DATE:

19, 20 October 2010; 7, 8, 9, 10 February 2011; 28 April 2011; 6, 14 October 2011

HEARD AT:

Brisbane

DECISION OF:

Paul Favell, Member

DELIVERED ON:

17 July 2012

DELIVERED AT:

Brisbane

ORDERS MADE:

1. The Respondent pay the Applicants the sum of $46,595.65 by 4:00pm on 1 August 2012.

CATCHWORDS:

Building work – whether defects – whether latent defects – whether claims compromised – responsibility for defects – cost of fixing defects

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

S B Whitten instructed by Mills Oakley Lawyers

RESPONDENT:

R Schulte instructed by Maunsell Pennington Solicitors and later by Gadens Lawyers

REASONS FOR DECISION

Doctor Michael Nissen and his wife Annette Nissen (the Applicants) entered into a written contract with Jarotech Pty Ltd trading as Jarotech Constructions (the Respondent) dated 23 March 2002 for the construction of a three level brick veneer dwelling for a price of $465,000.
Construction commenced about March 2002 and practical completion was reached about December 2002. In or about 23 May 2003, the Applicants complained to the Building Services Authority about a number of defects and inconsistencies in the works.
On 6 May 2004, the Applicants filed an application in the Commercial and Consumer Tribunal (“CCT”) (BD186-04) claiming damages because of defects in respect of the building works. That application was compromised after a mediation and an agreement reached on 22 June 2004.
The terms of the settlement were recorded in an Order made by the Commercial and Consumer Tribunal on 24 June 2004 as follows:
a.The respondent will pay the sum of twenty thousand dollars ($20,000) (inclusive of any applicable GST) to the applicants by:
4.00pm ON 6 JULY 2004
b.The applicants will notify the Queensland Building Services Authority (“the authority”) that they withdraw application Q025-04 and that they no longer pursue their complaint to the Authority (File No. 3-1402-03) as soon as possible after the making of this order.
c.Upon payment of he sum of twenty thousand dollars ($20,000) in accordance with paragraph 1 above:
i.The parties release and discharge one another from any and all demands and claims that either party may have against the other party (with the express exception of any demand or claim that the applicants may have against the respondent in respect of latent defect’s) in respect of the building work carried out by the respondent under the contract between them dated 23 March 2002;
ii.The applicants will indemnify and keep indemnified the respondent against any costs that the respondent may incur as a consequence of the applicants making any demand or claim against the respondent, or lodging any complaint form with the Authority, that does not relate to latent defects.
d.Each party will bear its own costs of this application.
The Applicants claim damages for rectification of defects which allowed water penetrations to roofing and subsidence and cracking to the pool concourse area. The Applicants claim those defects were “latent defects” and were not included in the compromise.
The Respondent contends that the defects were not latent defects and that the Applicants were aware of the defects prior to 19 May 2005 and are included within those matters which were compromised.
The Respondent also relies upon section 10(1)(a) of the Limitations of Actions Act 1974.
If the Respondent is liable for rectification of the defects, it is contended that the cost of rectification is a lesser amount, namely $3,500, or $13,913 for the slab rectification and $1,397 for the roof rectification.
On 13 October 2009, the CCT considered whether the compromise agreement included the defects the subject of the application and concluded:
“the subject matter of the application is clearly building work and falls within the definition of a ‘building dispute’ pursuant to s 77(1) of the Queensland Building Services Authority Act 1991. The determination of this dispute must firstly involve a finding of fact as to whether the alleged defects are defects for which the respondent is responsible and secondly, whether they were latent at the time the compromise agreement was entered into… If the answer to both questions is in the affirmative, and in particular, the latter then the compromise agreement becomes irrelevant as does the claim for the indemnity costs. Conversely, if it is found that the defects are not latent then the compromise agreement is effective and then the application could be referred to another court, pursuant to section 40(2) of the CCT Act. Therefore, I have come to the conclusion that the Tribunal does have jurisdiction to determine whether the defects alleged are the responsibility of the respondent, and secondly, whether they were latent at the time of the entering into the compromise agreement”.
The Applicants claim that on or about 19 May 2005, they first became aware of water penetration to the valleys and apex of the upper level roofing works.
The Applicants claim that the water penetration was because of defects in the size of the valley guttering and a poorly placed roof truss, both which were hidden beneath the roof sheeting.
On 27 March 2006, Don Vosper, an inspector from the Building Services Authority, inspected the premises and reported that the water penetration was unrelated to a water penetration on 25 January 2004. The roof was repaired by West Plumbing Maintenance in December 2006 by the insertion of a larger sized valley gutter and adjusting the roof truss.
The Applicants contend that those defects were not manifest or discoverable by reasonable inspection.
The Applicants claim that in August 2006 they first became aware of subsidence in the slab, comprising part of the concourse around the pool. They claim that they were not aware of subsidence earlier.
The slab comprising the concourse around the pool had additional works done by the Respondent prior to handing over the construction works. That work was dowelling the slab to the corner of the dwelling and pouring a concrete pier to the front left corner of the slab.
Engineers Peter Wright and Eric Fox agreed that there had been settlement of the fill under the concourse slab. Both agreed that there was no evidence that the fill had been compacted. Both agreed that in the circumstance of uncompacted and uncontrolled fill, the construction of the pool concourse slab was such that it could not maintain its position. Mr Wright was of the opinion that the settlement was compaction of the fill under its own weight. Mr Fox was of the opinion that because of the rate of settlement, water has had an effect on the filling.
Both agreed that the damage to the concourse slab and paving was due to settlement of the slab. Both agreed the settlements of the concourse slab could have been prevented by the use of dowels into the pool edge and/or by support on mass concrete piers founded through the underlying fill and into natural ground.
The experts differed in their views on how to achieve long term stability of the concourse slab. Mr Wright was of the opinion that the slab should be replaced with a new slab supported on piers founded through the fill and into natural ground. Mr Fox supported a cheaper option commonly known as UreTek injection comprising the injection of urethane foam into the void beneath the slab. The slab has now been removed and at that time a void was noticed such to allow a tape to pass between the slab and the polythene membrane.
Mr Wright inspected the slab in 2006 and at that time he did not see sufficient evidence of the slab subsiding to cause concern. Mr Fox was of the view that if there was lifting of tiles around the skimmer box in 2004, it was evidence of differential movement of the slab and thus settlement.
At the hearing, Mr Fox thought that given the unexplained unacceptable rate of settlement as now observed, replacement of the slab as indicated by Mr Wright was appropriate.
The replacement of the slab has been done in accord with the method and design suggested by Mr Wright.
In my view, the evidence establishes that the construction of the pool concourse slab was inadequate. I am satisfied that the extent of the subsidence was not evident on 24 June 2004.
Mrs Nissen gave evidence that there was no evidence of subsidence in June 2004 and that a complaint about tiles around the skimmer box concerned drumminess of the tiles. It was not until August 2006 when she noticed cracking of tiles that she became concerned.
Mrs Wilhelmina Naprasnik, the mother of Annette Nissen, gave evidence that in May 2005 she was at 15 Carnoustie Court during a storm and observed large amounts of water entering the house upstairs. The water came through lights of the storeroom and the walk-in wardrobe. It also came in down walls and through the downstairs ceiling, the air conditioning vent and light fittings.
Michael Pehrson was, on 22 May 2003, a plumbing inspector employed by the Building Services Authority. On that day he conducted an inspection at the Applicants’ house. He found numerous defects.
He had been provided with an Owners Defect List which included the following:
“Defect 12 Back verandas concrete slab at back of pool dropped 2 inches. Wish BSA to comment of how it was fixed”
Part of the report noted missing terracotta tiles to the southern end of the pool. It notes the missing tiles as incomplete work and also notes that there appeared to be adequate drainage to the area.
Mr Pehrson did not see defect 12 but noted reinforcing used to stabilise the rear patio slab was protruding and needed to be cut back, epoxyed, and the wall rendered and painted to match.
Defect 13 in the Owners Defect List was:
“Defect 13 Concrete laid by tiler over back slab around pool was drummy and sandy. Owner concerned about lifting tiles”
In respect of that complaint the report noted “No defect”.
Notably, other than what I have referred to above, there was no other mention in the report or in the Building Services Authority file to subsidence of the pool concourse slab.
Further, there was no mention of any insufficient sized valley gutter or roof trusses requiring adjusting.
Ray Griffiths of Building and Homebuyer Services inspected the property on 25 March 2004 and provided a report (exhibit AMN-6). Part of the report commented on the fact of a tile having lifted beside the corner of the dwelling. Mr Griffiths saw no sign of the pool concourse slab subsiding. He recommended that the slab be monitored for performance in the future.
Mr Griffiths examined the roof area for the cause of reported “severe water penetration” which occurred on to the ceiling of the meals/kitchen area and damage to wall paint at the rear right corner of the meals area and damaged paint around the light fittings and air conditioning regulator.
In his view, the probable source of the leaks was a combination of the location of a spreader shoe, poorly formed metal flashing at the base of the upper level fibre cement sheeted wall and two disused screw holes which were not sealed where they passed through roof sheeting below flashing. He recommended the flashing and roof sheeting be reworked and the down pipe be extended so that it will discharge further down the lower level skillion roof. Photos taken by Mr Griffiths (exhibit 31) show the areas of leaking and the likely causes of the leaking.
Notably, those areas are not those observed by Mrs Naprasnik. The areas which Mr Griffiths recommended to be reworked are not the area fixed so as to prevent the leaking observed by Mrs Naprasnik.
Mr Griffiths said the top level roof shown in photo 14 (exhibit 31) was not leaking at the time of his inspection.
Mr Griffiths was not informed of any leaking upstairs.
Michael Jarousek gave evidence that he had a conversation with Des Newport of Des Newport Consulting Engineers Pty Ltd about the possibility of doweling into the side of the pool so as to support the pool concourse slab. Mr Newport gave evidence that he did not have such a conversation with Mr Jarousek and he said, “I am as sure as I can possibly be that I have never had dealings with Mr Jarousek”. He said he never did work for Rod Tyler from Rod Tyler Pools. He said that he worked for Blue Haven Pools. He searched his records but was unable to see Mr Jarousek as a client. Exhibit 35 consists of two certificates which show Mr Newport certified pools at locations other than at the Nissens’ property for Bluehaven pools, the constructor of those pools for Mr Jarousek. In cross examination, Mr Newport agreed it was possible that he had a conversation with Mr Jarousek but did not recall it and did not record it. He said he never worked for Rod Tyles Pools or for Mr Jarousek.
In my view there is little significance in the alleged conversation with Mr Newport because the construction of the pool concourse was inadequate and even if the conversation was had, it meant Mr Jarousek should have used a different construction method.
Mr Flavio Costanzo, a Quantity Surveyor, gave evidence of the cost to replace the pool concourse slab. His estimate was $30,978. His evidence was challenged on a number of bases, including: cost of supervision; cost of tiles; cost of removing the pool fence; cost of protecting pool pipes; and the need to cut tiles to match existing tiles.
The actual cost of removing and replacing the concrete slab was estimated and charged by Mr Rodney Atkins, a registered builder, to be $43,208 (exhibit 17). Mr Costanzo was of the view that the cost reflected the marketplace when the work was first done. The contractor who carried out the work removed all of the tiles around the pool and completely retiled the pool concourse because the tiles removed could not be matched with replacement tiles. Some of the pool plumbing was damaged and had to be replaced. The pool electrics were not disturbed.
Mr Michael Jarousek (the Respondent) gave evidence. He said he is a builder who builds designer homes but he is not a designer builder.
Prior to the work relevant to this matter, Mr Jarousek had done a renovation for the Applicants.
Throughout the project the subject of this hearing, Mr Jarousek dealt primarily with Mrs Nissen. He contends that he did not employ Inscape Design or Saunders and Partners Pty Ltd.
He gave evidence that he had a conversation with Des Newport after having a discussion with the pool builder and he was told if dowels were put into the pool, the pool warranty would be void.
Initially, Mr Jarousek prepared a site sketch plan which he says was provided to Doug Pearson, the draftsperson used by the Nissens, so that he could prepare plans. Saunders and Partners provided plans for the footings.
Construction of the pool was completed before building work on the house commenced. The construction of the pool was not done by the Respondent. The extent of the work was contained in the contract which was comprised of a Queensland Master Builders Residential Building Contract Version RBC-1 July 2001 Contract Schedule (MPJ-4(i)), Queensland Master Builders Residential Building Contract Version RBC 1 July 2001 General Conditions (MPJ-4(ii)), Contract Specifications (MPJ-4(iii)) and Contract Plans, site test report and engineering drawings (MPJ-4(iv)).
On 8 April 2002, the Respondent commenced work on the pool concourse area by a detailed excavation, backfilling behind the garage retaining wall and the placement of drainage gravel and agricultural drainage pipe.
During an inspection of the works on 12 April 2002, the Respondent asked an engineer from Saunders and Partners Pty Ltd, “What to you suggest about tying the slab (between the pool and the house) into the building?” To this he was told, “Just follow the existing steel detailing in the drawings for the terrace area for the extended area”.
Mr Jarousek gave evidence that the fill was compacted by the use of upwards of a three tonne track bobcat with plastic tracks and the fill and drainage gravel was put down in layers of approximately 300 millimetres and compacted at each layer.
Dowels were drilled into the existing house slab by drilling 200 millimetre deep holes into the existing slab at 600 millimetre centres and then inserting the dowels into the holes with epoxy adhesive.
Mr Jarousek gave evidence that upon enquiry with Des Newport he was told that he could not drill into the existing pool because it would void the warranty. Dowels were not put into the pool. Mr Jarousek gave oral evidence that after he was told not to drill, he relied upon the engineer from Saunders and Partners Pty Ltd observing the work done and assumed that the engineer knew what was being done and approved of the work.
In a diary note (about which the reference to is the subject of objection because of an alleged failure to properly disclose a diary as directed), it was said to be recorded that Mr Jarousek said about the non-placement of dowels in the pool:
“You realise that there is not a proper connection between the patio and pool, which means there could be some movement in the slab”.
It is said that in response, Mrs Nissen said:
“I do not care. I want pavers all the way around the pool. I want to ensure a consistent look around the pool”.
Mr Jarousek said he sent a handwritten letter to Mrs Nissen (a copy of which is not produced even though Mr Jarousek was advised by his solicitor wife to confirm the engineer’s advice in writing with Mrs Nissen) which in part said, “I can’t guarantee the connection between the proposed slab and the swimming pool shell and the stability of the slab”.
Mrs Nissen denies she said that which is said to be her response and denies receiving the letter referred to above. I do not accept that Mrs Nissen received the letter referred to, particularly when there was some importance attached to the content of the letter and, accordingly, retaining a copy of the letter.
Whilst giving oral evidence, Mr Jarousek said that he may have been confused in thinking Mr Newport was the engineer for the pool because he had designed pools which Blue Haven pools had constructed for Mr Jarousek.
In exhibit 39 at paragraphs 36 to 38, Mr Jarousek dealt with the pouring of the pool concourse slab and inspection prior to the pour. Reference was made to MPJ-6 said to be a certificate and inspection report which on a reading of paragraph 36 could be thought to be a certificate relating to the pool concourse slab.
In oral evidence Mr Jarousek said that MPJ-6 was not a certificate in respect of the pool concourse slab.
Before November 2002, Mr Jarousek noticed that the pool concourse slab had subsided 20 millimetres and sought to rectify that subsidence by drilling a hole below the slab, inserting a concrete pier about 1500 millimetres deep down to natural ground and drilling a hole through the corner of the existing house slab into the concourse slab and inserting two steel reinforcement rods. That work was done before practical completion was reached on 30 November 2002.
After practical completion, the Applicants provided a defects list. On 1 December 2002, in exchange for final payment, the house was handed over.
Differences between the parties developed primarily over the responsibility for the rectification of defects in respect of items supplied and installed by the owners. On 17 February 2003, the Respondent was excluded from the site.
In March 2003, the Applicants made a complaint to the Building Services Authority (BSA).
When Mr Jarousek gave his evidence, he was not always responsive to the questions asked of him in cross-examination. On occasions he was unable to produce copies of notes which he said he relied upon to recall conversations he set out in his statement (exhibit 39). An example of such was the non-production of a note relied upon to produce the quote which appears in exhibit 39 at paragraph 40.

In paragraph 12 of the Further Amended defence the Respondent contends that the Applicants were aware of the alleged defects at the time of the signing of the Mediation Agreement on 24 June 2004. An important aspect in making that assertion is the evidence contained in paragraphs 31, 36, 40 and 41 of exhibit 39. Those conversations and the letter are claimed by the Applicants. The letter referred to in paragraph 36 has not been produced. Notes of conversations placed in inverted commas in the paragraphs referred to above have not been produced.
During cross-examination Mr Jarousek said that as at 30 November 2002 he assumed the slab had subsided because of uncompacted fill below. He was asked if he had advised Mr and Mrs Nissen of that assumption. He initially said he had so informed them but was unable to point to the occasion when that occurred except to refer to the content of paragraph 41 of exhibit 39.
In paragraph 47 and 48 of Mr Jarousek’s statement (exhibit 39) reference is made to complaints made by Mrs Nissen. Mrs Nissen denies making such complaints in those terms and denies making a complaint about a cracked tile. Mr Jarousek gave evidence that work was done by Mr Tony Czapp to fix that tile on 14 February 2003. Mrs Nissen denies that was so. Mr Czapp was not called. A diary note by Mr Jarousek notes “Tony” as carrying out tile work at the front of the house and around the pool. There was no note of a cracked tile. There was no note of a cracked tile in the defect list (exhibit 39 MPJ 9).
I note that Mr Sternburg, Mr, Griffiths and Mr Pehrson did not see subsidence in the slab within the six months defect period nor in the period prior to the mediated agreement.
Mr Jarousek points to the complaint to the BSA (MPJ9), a letter from Mr and Mrs Nissen dated 20 January 2004 (MPJ 13) and a letter dated February 2004 (MPJ 14) as evidence that Mr and Mrs Nissen had knowledge that the slab was subsiding. Those documents refer to one tile cracking and lifting as evidence of the slab subsiding. In MPJ14 the letter contains the following:
(1)“Subsiding of concrete slab. You may wish to readdress this issue and get an engineering certification as the slab continues to fall as evidenced by the lifting of a tile at the site of the stabilizing rods. This has occurred since your first inspection. JC was also notified of this by fax on January 26 2004”
The letter dated 25 January 2004 contains the following:
(a)“The concrete slab in between the back of the house and pool continues to subside and the tile above the steel rods has cracked and lifted (reference General Category defect 12 of BSA Report 3-1402-03)
Those letters in my view are telling evidence that Mr and Mrs Nissen may have known that the slab was falling before the mediated agreement. I am not satisfied, however, that they knew of nature or extent of the defect.
Relevant to any question of whether the alleged defects were latent defects and whether the defects particularised as “latent defects in the construction of the slab comprising part of the concourse around the pool” were latent is any knowledge of the extent of the defect.
A latent defect is a defect which could not have been discovered with reasonable care or one which was not manifest or discoverable by reasonable inspection (Pullen v Gutteridge Haskins and Dairy Pty Ltd [1993] VR 27; Owners of Strata Plan 50946 v Multiplex Constructions (NSW) Pty Ltd [2006] NSWSC 377; Eko Investments Pty Limited v Austruc Constructions Limited [2009] NSWSC 208.)
In my view the Applicants did not know of the inadequacy of the packing of the fill under the concourse, the inadequacy of the support of the concourse until after the settlement. A defect may be different from a physical thing which may be observed. A knowledge of some cracking or settlement does not amount to knowledge of the inadequacy or the defect being manifest.
In my view the cause of the leak complained of and the fact of the leak was not manifest or known until after the compromise.
Mr Ernie Kretschmer, a technical officer for the Master Plumbers Association of Queensland carried out an inspection of the roof of the subject house. His report of that inspection is exhibit 40. His evidence was that, based on his experience, the valley gutter in question was not sufficiently sized to handle the roof area serviced, there was a joint failure (at direction change) allowing the possible ingress of water and the join lap was not sealed.
Mr Paul Haskand, an expert witness in building construction gave evidence. His reports are exhibits 41, 42 and 43. He costed the alternate methods of rectifying the sunken slab as $13,913.30 (to remove the existing concrete and pavers and reinstall) and $3,500 (to raise the slab using “URETEK” and remove and retile all damaged tiles). The costings do not take into account the possibility that matching tiles were not available and all of the tile may need to be replaced so that they match.
He also costed removal and installation of a new valley and adjustment of a truss and refixing existing valley battons as $1,397.
There is obviously a large difference between the actual cost of the replacement slab as built ($43,208) and the cost estimates with respect to the sunken slab ($3,500 to $13,913.30). The lowest sum of $3,500 should be discounted as it was based on an alternative initially suggested by Mr Fox which alternative was conceded by Mr Fox during his evidence as not appropriate.
Here the actual cost was even higher than the sum suggested by Mr Costanzo, however, on the evidence explaining market forces operating where the work is repair work, as given by Mr Costanzo, overheads, draft margins, risk margins and the size of the rectification job are all material factors.
I am satisfied that actual cost of the rectification work is appropriate. The higher cost of rectification work was illustrated in the quotation provided by Darrick Homes Pty Ltd (exhibit 10) where the quote was for $47,383.82 and in the quote from Morgan Bros concretors (exhibit 11) where the quote was for $46,827.
A quote from West Plumbing Maintenance (exhibit 12) quoted rectification work 75 “top valley and lower corner at rear” at $3,759.25 later reduced to $3246.65. That work was carried out.
In my opinion the evidence of Mr Haskard has not appropriately taken into account all of the material factors which operate to determine prices or quotes for rectification work and I accept the evidence of the actual cost of carrying out the necessary work as appropriate for the formulation of the quantum of damages in a claim such as this claim before the tribunal.
Mr Jarousek contends that a facsimile dated 16 February 2004 (exhibit 39 MPJ23) illustrated that the Applicants were aware that the slab was defective. After considering the wording of item 23 and Page 6 Paragraph 12 of the defect list, in my view it does not illustrate that they were aware that the slab were subsiding and that they knew of the extent of the defect.
Mr Jarousek relied upon the content of paragraph 7 on page 7 of exhibit 39 MPJ24 (see amended further amended defence paragraph 12(b)(xiii)). The Applicants point out that the statements made in paragraph 7 referred to above were said by Mr Griffiths in his evidence to be his words and not a advice he received from the Applicants. (See transcript 9 February 2011 p.3-4).
It is clear that all parties knew of some subsidence early in the life of the completed structure. Mr Jarousek agreed with that proposition.
If the subsidence evident then was the basis of the concerns of the Applicant at the time of the mediated agreement then the action claimed now would not be available because the action was compromised.
However, there is a different consideration when there is subsidence to a greater degree that that evident when the matter was compromised.
In my view for the current claim to have been compromised the claim compromised must be the same as the current claim.
In the claim in the CCT the claim with respect to the subsidence of the pool slab was $44 (Paragraph 7 exhibit 39 MPJ25).
Near the end of this hearing the Applicants’ counsel sought to question Mr Jarousek about whether the report of Mr Griffiths (exhibit 3 AMN 6) was produced at the mediation. Objection was taken on the basis that that question sought evidence of something done at a mediation and section 119(1) CCT Act 2003 prohibited such evidence being given because:
a.“evidence of anything done or said or an admission made, at a mediation is admissible in a proceeding before the tribunal or elsewhere only if all parties to the mediation agree”
Counsel for the Respondent submits that the prohibition in section 119(1) of the CCT Act 2003 prohibits evidence being given of anything provided at mediation.
Section 83(1) of the Queensland Civil and Administrative Tribunal Act 2009 provides that evidence of anything said or done during mediation for a proceeding is not admissible.
There is a question whether something in a mediation with respect to a separate claim is admissible when a question to be determined in a separate claim is the extent of the earlier claim as settled by the agreement reached after a mediation.
After the objection was made Counsel for the Applicants changed his question and accordingly I did not need to determine the admissibility of the evidence sought.
The Respondent claims that the water ingress into the house in 2005 was the same as the water ingress in 2004.
He said in evidence the damage from the two events was almost identical.
The claimant’s claim that the water ingress in 2004 was in a different place to that of the 2005 ingress.

[100]In my view it is likely the water penetration was due to use of inadequate sized guttering and a poorly placed truss. Further the evidence suggested the upper roof was not constructed strictly in accord with its plans.
[101]Based on the engineering evidence I am of the view that it was likely that there was insufficient compaction of fill around the pool or insufficient foundations which in turn lead to the problems the subject of the application.
[102]I am satisfied that the Applicants were not aware of the water penetration as claimed until about 19 May 2005 after the settlement of the claims previously made in the CCT. I am also satisfied that the Applicants did not become aware of the subsidence of the slab the subject of this claim comprising part of the concourse of the pool until August 2006.
[103]I am satisfied that the defects the subject of this claim were not part of the claims made in the CCT. The defects in my view are latent defects which were latent when the compromise agreement was entered into.
[104]I am also satisfied that the defects are defects for which the Respondent is responsible.
[105]I accept the evidence of the Applicants. I found their evidence credible.
[106]I have had regard to the settlement agreement and the terms and I am of the view that the latent defects contended for have (and found) were not part that settlement (Mac Developments (Gold Coast) Pty Ltd v Rams Financial Group Pty Ltd [2010] QSC 477 at [32], [33], [35], [36] and [37]).
[107]I have had regard to the text of the settlement, the surrounding circumstances known to the parties and the purpose of the settlement. In my view that which was compromised did not include the claims now made. That is particularly so given the “express exception” clause and my finding that the claims are claims in respect of latent defects.
[108]As to whether the claim is barred by s 3.10(1)(a) of the Limitation of Actions Act1974 my findings that the Applicants were not aware of the defects until May 2005 (the water leak) and August 2006 (the slab) and that the defects were latent defects means that the claims are not barred.
[109]I am satisfied that the Applicants mitigated their loss. The slab was rectified as was the water leak. In my view what was done by the Applicants was reasonable. I am not satisfied that inactivity by the Applicants caused or contributed to the defect and the failure of the slab or the leak or to the loss.
[110]I am satisfied that the Respondent breached the terms of the contract in that the work the subject of this claim was not done in an appropriate and skilled way and with reasonable care and skill.
[111]In my view the rectification cost is the actual rectification cost. It was in my view reasonable and necessary and on the evidence of Mr Costanzo that cost supported the market place when the work was first done. That cost was $43,208. To that the engineering costs are to be added to make up the final claim.
[112]For the reasons given the Respondent is ordered to pay the Applicants $46,595.65 being $43,349 for the pool slab rectification and $3246.65 for the roofing rectification as set out in the final further amended statement of claim.
[113]Claims are made for interest and costs. I was informed that separate submissions would be made after the determination of the basic claim. Any submissions on those issues should be made by both parties in writing and filed and exchanged within 21 days and any reply to a submission made be filed and exchanges within a further 14 days.