O'Connell v JHA No 11 Pty Ltd
[2013] QCAT 710
•4 December 2013
| CITATION: | O’Connell v JHA No 11 Pty Ltd [2013] QCAT 710 |
| PARTIES: | Cathy O’Connell (Applicant) |
| v | |
| JHA No 11 Pty Ltd (formerly Jeffrey Hills and Associates Pty Ltd) (Respondent) |
| APPLICATION NUMBER: | BDL177-12 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 5–6 June, 13, 15, 16 August 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Favell |
| DELIVERED ON: | 4 December 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application is dismissed for want of jurisdiction. |
| CATCHWORDS: | Building matters – Where building report sought and provided – where rock escarpment presented a danger – whether report should have reported on rock escarpment – whether jurisdiction for Tribunal to determine the application |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Cathy O’Connell |
| RESPONDENT: | Jeffrey Hills |
REASONS FOR DECISION
Cathy O’Connell owns a house at 14 Vantage Point Drive, Burleigh Heads. It is a substantial house, with, as the name of the drive suggests, views over parts of Burleigh Heads. It is built on a site which consists of a steeply sloped upper section which runs to an escarpment of between eight to ten metres high midway towards the rear of the block. A flat section of the block occurs at the rear of the property.[1] The escarpment is comprised of exposed columnar basalt rock. The rock has cracking in its surface and some of the cracks are filled with clays and debris. There is some vegetation which has grown on the rock face.
[1]See photographs of the area attached to the additional statement of Graham Tompkin, April 2013, the valuation exhibit 2 and exhibit 29.
The dwelling is structurally divided into two main components. The lower level has footings in a concrete slab forming a base from which reinforced block work rises onto which the floors are constructed. The upper level has a concrete deck constructed over the top of the escarpment to connect with structures on the upper roadway side of the dwelling. There is a linking concrete deck supported on the main house structure on one side with a slip joint so as to disengage the front structure and the rear main house structure. The deck extends from the main house structure over to a pier and a beam. The main house structure extends upwards with a clad timber frame and metal roof. The main section of the house extends over four storeys.
Ms O’Connell purchased the house pursuant to a contract dated 3 October 2011.[2]
[2] Paragraph 2, Applicant’s statement of evidence filed 3 August 2012.
The contract was conditional upon Ms O’Connell receiving a satisfactory building and pest report.[3]
[3] Paragraph 3, Applicant’s statement of evidence filed 3 August 2012.
Ms O’Connell engaged Jeffrey Hills and Associates Pty Ltd to prepare a report for the purposes of checking the state of the building. A report was prepared and is dated 10 August 2011.[4]
[4] Statement of Jeffrey Hills signed 23 February 2013, annexure C.
The report sets out the services to be provided. The boxes which indicate a structural inspection and a pest inspection were ticked.
Under the words ‘services to be provided’ there appears:
(1) Jeffrey Hills and Associates Pty Ltd will inspect the property and provide a structural property report. This report will detail areas of the property where readily visible structural defects will be noted.
(2) This report is not a maintenance report. All properties require regular maintenance. Where obvious maintenance issues are noted these have been included in the report as a courtesy comment only.
(3) This report is limited to those parts of the property above ground level only and reasonably accessible to the inspector without the removal of wall linings, ceilings, roofing materials, furniture, floor coverings or other chattels. This information comprises site notes only, a typed report will be sent to you.
Jeffrey Hills and Associates Pty Ltd will visually inspect the premises to ascertain whether there is evidence of any structural defects, timber pest infestation or damage (or both). Furnishings and stored goods will not be moved. The inspection will be of a non-destructive and non-invasive nature. A comprehensive invasive inspection will not be provided unless Jeffrey Hills and Associates Pty Ltd enters into a separate written contract to do so. The inspection and report will not extend to any part of the relevant property which is physically inaccessible or to which access is denied.
Jeffrey Hills and Associates Pty Ltd will provide a report to the client (for use and reliance by the client only, and not anyone else). The report will detail the areas inspected and the areas which were inaccessible for inspection. The report will indicate whether or not:
There are any visible structural defects at the time of the inspection;
There was visible borer damage at the time of the inspection;
There were visible fungi or decay at the time of the inspection;
There was visible live termite activity at the time of the inspection;
There was visible termite damage at the time of the inspection;
There was visible evidence of any existing termite treatment;
Treatment is recommended for visible timber infestation or damage;
(4) Latent defects that may become apparent in weather conditions that differ from those existing at the time of the inspection will not be disclosed in this report.
(5) This inspection service will only check a representative number of items such as lights, power outlets, switches, taps, windows, door appliances and such like. It is not possible to individually inspect all visible frameworks, ties down, stumps, bearers, joists, floor timbers or other materials or techniques used in construction. If a more detailed inspection is required please advise in writing as additional charges apply.
(6) To the maximum extent permitted by law, all conditions and warranties imposed by statute are excluded and no warranties are given with respect to the services other than those existing in statute.
(7) In the event of any controversy or claim arising out of, or relating to, the rendering of the service and the report to be provided, it must be settled by arbitration in accordance with the rules of the Institute of Arbitrators Australia, for the conduct of commercial arbitrations. Any judgement from such arbitration will be final and binding on the parties.[5]
[5]A copy of the report is attachment 2 to the applicant’s statement of evidence filed 3 August 2012. It is not signed by the applicant.
In the body of the report it is said:
Our company confirms your instructions to undertake a property inspection and report on any significant and obvious structural defects and/or timber pest infestations apparent at the time of the inspection. The following statements outline our observations and opinion in relation to the condition of the dwelling as viewed. It should be noted that this report relates only to that which is readily viewable. No opinion or warranty is made on that which cannot be readily seen.
I note there is nothing in the report which deals with the condition of the escarpment.
The report makes some general property comments as follows:
The veranda out from the kitchen at the front of the house has tiles which have lifted at the expansion joint on either side of the glass door. It is recommended to lift them, reseal expansion joint and relay the tiles. The pest report notes that fences, trees within 50 metres of the building but within the property boundaries and grounds within the property boundaries subfloor, roof cavity, dwelling exterior and dwelling interior were inspected. It was noted that there was no evidence of borer activity at the time of the inspection. There was no recommendation of treatment. The summary of the property inspection as that, in comparison to dwellings of similar age and construction, the building is considered to be in good condition. It was noted that there are a number of repair/maintenance items which require attention, namely tiles on veranda. It is also recommended that regular pest inspections in accordance with Australian Standards should be carried out.
The report was signed by R. Moreton for Jeffrey Hills and Associates Pty Ltd. The cost of the report was $440.
Ms O’Connell in her evidence said that ‘while the report did not indicate that the condition of the property was perfect, I formed the view that it must be generally satisfactory and based on the report received I advised that I was satisfied with the report’.
Ms O’Connell subsequently became aware of what she identifies as a number of problems which had not been mentioned in the building report. She identifies these problems as:
(a) Failing to note the existence of a large termite nest in the grounds close to the home;
(b) Failing to point out the inherent instability and danger associated with the rock escarpment immediately adjacent to the house;
(c) Failing to note or advise that there is no waterproof membrane on an outdoor tile area;
(d) Failing to advise on a lack of waterproofing or drainage to the garage walls;
(e) A crack in the slab under the house.
Ms O’Connell filed an application for a domestic building dispute pursuant to the Queensland Building Services Authority Act 1991. Her amended application seeks an order that Jeffrey Hills and Associates Pty Ltd pay her $200,000 for the diminution in value of the property between what it would have been worth without the defects and the value of the property in its present state.
The contract price for the house was $825,000.
Jeffrey Hills and Associates later renamed JHA No 11 Pty Ltd resists the claim and asks the Tribunal to dismiss it. The primary basis for the denial is the claim that,
The pre-purchase inspection report, whether deemed structural or standard property (building) complied with the requirements of the Australian Standards Australian Standard AS4349 Inspection of Buildings Part 1 Pre-Purchase Inspections – Residential Buildings.
The respondent says that there was no requirement contained within the Standard that required the inspector to refer any matter to an external expert. They say that water damage claimed by the applicant was not present at the time of the inspection.
Australian Standard AS4349.1[6] states:[7]
The objective of this standard is to provide persons and organisations concerned with pre-purchase inspections of residential buildings with the basic criteria necessary in order to facilitate inspections and reports that satisfy the requirements of both the client and the inspector.[8]
[6] Exhibit 41/42 statement by Jeffrey Hills appendix K.
[7] Page 5 Australian Standard AS4349.
[8] Page 2 Australian Standard AS4349.1-2007.
The forward to the standard acknowledges that:
The purchase of residential property is an important decision and should be supported by knowledge of the physical state of the property. Independent and objective advice is often required to enable informed decisions. It is implicit in this standard that the inspection includes subjective appraisal by an inspector competent to assess the condition of residential buildings. It is not expected that this Standard will be relevant where an inspection involves wholly objective application of a prescribed technique of appraisal. In any subjective application it is inevitable that different inspectors or even the same inspector, on a different occasion, may reach different conclusions. The Standard seeks to provide an appropriate balance between reliability of outcomes, economic constraints and the flexibility required to address numerous different types of residential building. The inspection is not intended to include rigorous assessment of all building elements in a property.[9]
[9] Page 6 Australian Standard AS4349.1-2007.
The Standard sets out minimum requirements for the inspection of, and preparation of an associated report, on a residential property carried out by a suitably qualified inspector in order to provide advice to a prospective purchaser or a similar interested party.[10]
[10] Page 6 Australian Standard AS4349.1-2007.
It is provided for in C1.1:[11]
If an inspection generally in accordance with this Standard is to be combined with an inspection of elements or requirements that are not within the scope of the Standard, the variations to the Standard have to comply with the requirements of Australian Standard AS4349.0 and be recorded in a separate report or be clearly described and differentiated in the inspection agreement.
C.1.1 recognises that non-standard inspections may include other specialist inspections which include ‘plumbing hydraulics, mechanical services or geotechnical where appropriate’.
[11] Page 7 Australian Standard AS4349.1-2007.
The Standard sets out the limitations of the Standard and provides:
A report prepared in accordance with this Standard is not a certificate of the compliance of the property within the requirements of any Act, Regulation, ordinance, local law or by-law and is not a warranty against problems with the building developing in the future.
Section 2 of the Standard provides for an inspection agreement. It requires an inspection agreement between the client and inspector to be entered into prior to the inspection taking place. That inspection agreement shall include the defined purpose, scope and acceptance criteria in accordance with section 2 of the Standard. Any changes to the purpose, scope or acceptance criteria are required to be agreed by all parties at the appropriate time. The purpose of the inspection is to provide advice to a prospective purchaser or other interested party regarding the condition of the property at the time of the inspection. Section 2.2 provides that,
Where the client or other interested party requires only assessment of the structure of the property, the purpose of the inspection shall be limited to that which is described in appendix A to the Standard.
Appendix A to the Standard is as follows:
Pre-Purchase Structural Inspection
…
A3 Scope of Inspection
The inspection shall comprise of visual assessment of accessible areas of the property to identify major defects to the building structure and to form an opinion regarding the general condition of the structure of the property
Note: The structural report should not contain any assessment or opinion regarding the following:
(a)Any non-structural element, e.g., roof plumbing and roof covering, general gas, water and sanitary plumbing, wiring, partition walls, cabinetry, windows, doors, trims, fencing, minor structures, non-structural damp issues, ceiling linings, floor coverings, decorative finishes such as plastering, painting, tiling, etc.
(b)An assessment of any aspect or component of the property that cannot be seen or that requires testing and/or measurement to determine soundness.
(c)Any area of items that was not, or could not be, observed by the inspector.
(d)General maintenance other than that which is deemed to be directly related to the ongoing structural performance of the property.
(e)Serviceability damp defects such as condensation, rising damp, lateral damp, falling damp should only be assessed and reported on where structural damage has occurred, is occurring, or may occur (e.g. furgal rot) significant spalling of masonry or concrete structural elements, significant fretting or mortar, rusting of primary structural elements. Stormwater drainage and surface water defects commonly cause or exacerbate foundation instability and these issues should be assessed and reported on where relevant.
A4 Defects
The types of defect to be considered are as described in section 3. The presence or otherwise of defects shall only be relevant when such defects relate to the structural condition of the building. (Underlining added).
Section 2.3.5 provides for the extent of reporting. It provides:
Significant items to be reported are as follows:
(a)Major defects.
(b)A general impression regarding the extent of minor defects.
(c)Any major defect that is an urgent and serious safety hazard. Note: for example, unsafe balustrades or imminent collapse of a structural member.”
“Inspection” is defined in section 1.4.7 to be
close and careful scrutiny of a building carried out without dismantling, in order to arrive at a reliable conclusion as to the condition of the building.
“Defect” is defined in section 1.4.6 as ‘fault or deviation from the intended condition of a material, assembly or component’.
“Major defect” is defined in section 1.4.10 to be
a defect of sufficient magnitude where rectification has to be carried out in order to avoid unsafe conditions, loss of utility or further deterioration of the property.
Section 1.4.14 defines a “structural defect” to be ‘fault or deviation from the intended structural performance of a building element’. The Standard provides an explanation of the definition of major defect and says that it,
includes defects that have to be rectified to avoid the development of unsafe conditions, and thus any defect that is a safety hazard has to be reported as a major defect; however, if in the opinion of the inspector, a defect is a serious hazard to occupants, or is about to become a serious hazard to occupants, it is considered that the inspector has a professional duty to insure that the report clearly identifies the hazard in a manner that is not easily overlooked by a reader of the report.
Section 3.1 requires accessible areas to be inspected in accordance with section 3 of the Standard. Section 3.2.1 provides:
The inspector shall inspect accessible parts of the building and appurtenances, together with relevant features of the property within 30 metres of the building and within the boundaries of the site, or as otherwise agreed in the inspection agreement. In this context relevant features include, car accommodation, detached laundry, ablution facilities and garden sheds, retaining walls more than 700mm high, paths and driveways, steps, fencing, earth embankments, surface water drainage and storm water run-off.
That section requires the property within 30 metres of the building subject to inspection to be inspected.
Section 1.4.8 of the Standard defines “site” as ‘allotment of land on which a building stands or is to be erected’.
Section 3.3 requires the inspector to appraise building elements, including the structural elements, for the presence of defects as specified in table 3.3. Table 3.3 is:
Types of Defects
Type
Defect
Identifier
A
Damage
The fabric of the element has ruptured or is otherwise broken
B
Distortion
Warping
Twisting
An element or elements have been distorted or moved from the intended location
C
Water penetration
Damp related
Moisture is present in unintended or unexpected locations
D
Material deterioration (rusting, rotting, corrosion, decay)
An element or component is subject to deterioration of material or materials
E
Operational
An element or component does not operate as intended
F
Installations (including omissions)
The element of component is subject to improper or ineffective installation, inappropriate use or missing components
Note: Guidance on inspection and reporting of cracking of building elements is given in Appendix E, which also provides information of types of defects and inspection considerations.”
The term “building element” is defined in section 1.4.4 to mean ‘a portion of a building that, by itself or in combination with other such parts, fulfils a characteristic function’.
The term “structural element” is defined in section 1.4.15 as ‘physically distinguishable part of a structure’.
Section 4.2 provides for the content of a report. C4.2 provides:
The report should not contain any assessment or an opinion in relation to the following
(a)A matter that is not within with the inspector’s expertise…
(d)The assessment of an apparent defect including rising damp and leaks, the detection of which may be subject to prevailing weather conditions or recent occupancy/use of services.
Section 4.2.4.3 requires the report to identify ‘any observed item that may constitute a present or imminent serious safety hazard’.
Section 4.2.6 provides ‘where applicable, the inspector shall include a recommendation for further inspection by a specialist inspector’. In the note to that section it says,
In the inspection report the inspector may recommend that a specialist inspector, for example a geotechnical engineer, undertake further inspection of some specific aspect of the building.
Appendix D to the Standard provides for the exclusion of items from inspection and provides:
The inspector need not inspect or report on the following:
(a)Footings below ground…
(u) Soil conditions …
(y) Landscaping.
The respondent submits that the defects that are to be assessed under the Standard all relate to building work that is within the area of expertise of the building inspector. It says that the inspector has no expertise in geology, geotechnical engineering or structural engineering, nor is he required to do so under the Australian Standards.
It specifically makes reference to the statement in appendix D excluding inspection in respect of soil conditions.
It contends that at the time of the inspection there were no problems that were encountered during the inspection that would require the inspector to refer to a specialist. It therefore says that there was no requirement to refer to another specialist as contained in section C2.1 on page 9 and in section 4.2.6 on page 17.
It says that the inspector did not find any “problems” that the escarpment was causing to the building.[12]
[12] Exhibit 43, Statement Rod Moreton.
It contends that the escarpment is not a retaining wall (i.e. built structure/building element) and hence is not required to be assessed as such in the context of the Australian Standard. It submits,
As the inspector has no expertise in geological matters, and there was no ‘problem’ or present or imminent safety issues observed, and that there is no requirement by the Standard to report on soil conditions – there was no requirement under the Standard to refer the escarpment for assessment by a specialist.
There was an issue during the hearing whether the instability of the escarpment was apparent at the time of the inspection. The respondent contends that the instability problem only became apparent in January 2012, six months after the inspection and only following a significant saturating rain event. In that regard it points to 700 millimetres of rain over a 14 day period and the fact that problems with soil movement and rock movement occurred at the end of the rain event as confirmed by the State Emergency Service report.[13]
[13] Exhibit 31.
Jurisdiction
QCAT has jurisdiction to determine matters it is empowered to deal with under the QCAT Act or an enabling Act.
The Queensland Building Services Authority Act 1991 (QBSA Act) allows a person involved in a building dispute to apply to the Tribunal to have the Tribunal decide the dispute.[14]
[14] Section 77 QBSA Act.
Section 77 of the QBSA Act provides:
Tribunal may decide building dispute
(1)A person involved in a building dispute may apply, as provided under the QCAT Act, to the tribunal to have the tribunal decide the dispute.
(2)Without limiting the tribunal’s powers to resolve the dispute, the tribunal may exercise 1 or more of the following powers –
(a)Order the payment of an amount found to be owing by 1 party to another;
(b)Order relief from payment of an amount claimed by 1 party another;
(c)Award damages, and interest on the damages at the rate, and calculated in the way, prescribed under a regulation;
(d)Order restitution;
(e)Declare any misleading, deceptive or otherwise unjust contractual term to be of no effect, or otherwise vary a contract to avoid injustice;
(f)Avoid a policy of insurance under the statutory insurance scheme;
(g)Order rectification or completion of a defective or incomplete tribunal work;
(h)Award costs. (Underlining added).
The term “building dispute” is defined in Schedule 2 of the QBSA Act as meaning, relevantly,
a domestic building dispute… or a minor commercial building dispute or a major commercial building dispute if the parties to the dispute consent to the dispute being heard under section 79.
“Domestic building dispute” means –
(a) A claim or dispute arising between a building owner and building contractor relating to the performance of reviewable domestic work, or a contract for the performance of reviewable domestic work; or
(b) A claim or dispute arising between two or more building contractors relating to the performance of reviewable domestic work, or a contract for the performance of reviewable domestic work; or
(c) A claim or dispute in negligence, nuisance or trespass relating to the performance of reviewable domestic work other than a claim for personal injuries; or
(d) A claim or dispute arising between a building owner and building contractor in any one or more of the following, relating to the relating to the performance of reviewable domestic work, or a contract for the performance of reviewable domestic work –
(i) An architect;
(ii) An engineer;
(iii) A surveyor;
(iv) A quantity surveyor;
(v) An electrician or an electrical contractor;
(vi) A supplier or manufacturer of materials used in the Tribunal work. (Underlining added).
“Reviewable domestic work” is defined in schedule 2 of the QBSA Act as,
domestic building work under the Domestic Building Contracts Act 2000, except that for, applying section 8(8) of that Act the definition excluded building work in that Act, is taken not to mean anything mentioned in paragraph (b), (c) or (d) or the definition.
“Domestic building work” as the term is used in the QBSA Act is defined in section 8 of the Domestic Building Contracts Act 2000.
8 Meaning of domestic building work
(1)Each of the following is domestic building work—
(a) the erection or construction of a detached dwelling;
(b) the renovation, alteration, extension, improvement or repair of a home;
(c) removal or resiting work for a detached dwelling.
(2) However—
(a) removal work for a detached dwelling is domestic building work only if the dwelling is intended to be resited at another place and used, at the place, as residential premises; and
(b) resiting work for a detached dwelling is domestic building work only if the dwelling is intended to be used at the place at which it is being resited as residential premises.
(3) Domestic building work includes—
(a) work (associated work) associated with the erection, construction, removal or resiting of a detached dwelling; and
(b)work (associated work) associated with the renovation, alteration, extension, improvement or repair of a home.
(4) Without limiting subsection (3), associated work includes—
(a) landscaping; and
(b) paving; and
(c) the erection or construction of a building or fixture associated with the detached dwelling or home.
(5) For the erection or construction of a detached dwelling, domestic building work includes the provision of services or facilities to the dwelling or the property on which the dwelling is, or is to be, situated.
(6) For the renovation, alteration, extension, improvement or repair of a home, domestic building work includes the provision of services or facilities to the home or the property on which the home is situated.
(7) Also, domestic building work includes—
(a) site work relating to work mentioned in subsection (1), (3), (5) or (6); and
(b) work declared under a regulation to be domestic building work if there are reasonable grounds for considering the work to be domestic building work.
(8) However, domestic building work does not include excluded building work.
(9) In this section—
(a) a reference to a detached dwelling includes a reference to any part of a detached dwelling; and
(b)a reference to a home includes a reference to any part of a home; and
(c) a reference to site work includes a reference to work required to be carried out to gain access, or to remove impediments to access, to a site.
(10) In this section—
removal work, for a detached dwelling, means work relating to the dwelling carried out at the place at which the dwelling is located for relocating the dwelling to another place.
resiting work, for a detached dwelling, means work relating to the dwelling carried out at a place for resiting the dwelling at the place following its removal from another place.
“Building work” is defined in Schedule 2 of the QBSA Act to mean –
(a)the erection or construction of a building; or
(b)the renovation, alteration, extension, improvement or repair of a building; or
(c)the provision of lighting, heating, ventilation, airconditioning, water supply, sewerage or drainage in connection with a building; or
(e) any site work (including the construction of retaining structures) related to work of a kind referred to above; or
(f) the preparation of plans or specifications for the performance of building work; or
(fa) contract administration carried out by a person in relation to the construction of a building designed by the person; or
(g) fire protection work; or
(h) carrying out site testing and classification in preparation for the erection or construction of a building on the site; or
(i) carrying out a completed building inspection; or
(j) the inspection or investigation of a building, and the provision of advice or a report, for the following—
(i) termite management systems for the building;
(ii) termite infestation in the building;
but does not include work of a kind excluded by regulation from the ambit of this definition.
The application seeks $200,000 as damages for the failure to properly report. For the Tribunal to have jurisdiction, there must be a building dispute.[15] The applicant must be a person involved in the building dispute. The building dispute must either be a domestic building dispute, or a minor commercial building dispute or a major commercial building dispute to which the parties have consented to the dispute being heard by the Tribunal under section 79 of the QBSA Act.
[15] QBSA Act s 77.
In my view, this is not a domestic building dispute and accordingly it is not a building dispute as that term is used in section 77. Accordingly the Tribunal does not have jurisdiction to determine the application unless it is a minor commercial building dispute or a major commercial building dispute to which the parties have consented to being heard.
“Commercial building dispute” is defined in Schedule 2 of the QBSA Act to mean –
(a) a claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work; or
(b) a claim or dispute arising between 2 or more building contractors relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work; or
(c) a claim or dispute in negligence, nuisance or trespass related to the performance of reviewable commercial work other than a claim for personal injuries; or
(d) a claim or dispute arising between a building owner or a building contractor and any 1 or more of the following relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work—
(i) an architect;
(ii) an engineer;
(iii) a surveyor;
(iv) a quantity surveyor;
(v) an electrician or an electrical contractor;
(vi) a supplier or manufacturer of materials used in the tribunal work. (Underlining added).
“Reviewable commercial building work” is defined in Schedule 2 of the QBSA Act to mean ‘tribunal work other than reviewable domestic work’.
“Tribunal work” is defined in section 75 of the QBSA Act to mean –
(1)The following is tribunal work—
(a)the erection or construction of a building;
(b) the renovation, alteration, extension, improvement or repair of a building;
(c) the provision of electrical work, water supply, sewerage or drainage or other like services for a building;
(d) the demolition, removal or relocation of a building;
(e) any site work (including the construction of retaining structures, driveways, landscaping and the construction of a swimming pool) related to tribunal work of a kind mentioned in paragraphs (a) to (d);
(f) the preparation of plans, specifications or bills of quantity for the carrying out of tribunal work;
(fa) fire protection work;
(g) the inspection of a completed building;
(h) subject to subsection (3), work prescribed under a regulation.
(2) To remove doubt, it is declared that reviewable domestic work is tribunal work.
(3) A person carries out tribunal work whether the person carries it out personally, or directly or indirectly causes it to be carried out.
(4) A person is taken to carry out tribunal work if the person provides advisory services, administration services, management services or supervisory services relating to the tribunal work.
(5) A person undertakes to carry out tribunal work if the person enters into a contract to carry it out or submits a tender or makes an offer to carry it out.
“Minor domestic building dispute” is defined in Schedule 2 of the QBSA Act to mean ‘a domestic building dispute where neither the claim nor the counterclaim exceeds $10,000’.
“Minor commercial building dispute” is defined in Schedule 2 of the QBSA Act to mean ‘a commercial building dispute where neither the claim nor the counterclaim exceeds $50,000’.
Because the claim exceeds $50,000 it is not a minor commercial building dispute although it is a commercial building dispute.
Even though it is a commercial building dispute it is not one where the parties have agreed that the dispute be heard pursuant to section 79 of the Queensland Building Services Authority Act.
The Tribunal does not have jurisdiction to hear and determine this claim.
Drainage
The respondent contends that at the time of the inspection there was no problem with drainage or with soil at the rear of the garage at the base of the escarpment. It relies on evidence given by Mr Moreton,[16] the AMC Ozone investigation,[17] statement of Graham Tompkin,[18] the Sergon report, Scott Judd,[19] statement of Vince Manning of Oriel Property Services,[20] and report of Darrell Hermes Smith of Westaway Restoration.[21]
[16] Exhibit 43.
[17] Exhibit 1, statement of evidence O’Connell attachment 3.
[18] Exhibit 17.
[19] Exhibit 1, statement of evidence O’Connell labelled “C02”.
[20] Exhibit 1, statement of evidence O’Connell labelled “C02”.
[21] Exhibit 1, statement of evidence O’Connell labelled “C02”.
The respondent argues that none of the inspections prior to January 2012 identified any areas of water penetration as areas that should have been identified in the inspection report and it was only after the event of January 2012 that Sergon identified water penetration to the garage area.
The respondent argues that the rain event of January 2012 resulted in movement of the escarpment and water ingress to the property. It argues that any damage sustained was not as a result of the report given by the respondent.
The respondent conceded that soil and rocks had fallen down the escarpment and against the garage.[22]
[22] Statement by Mr Hills during cross-examination of Ms O’Connell.
A report by Mr Tompkins dated 30 August[23] recommended that additional overflows be installed to the side walls of the car port to minimise potentiality for water inundation to the dwelling. The site inspection noted that during periods of extended rain, water run-off to the car port area presents a problem to the building. Although there were such warnings it appears that no such work has been done to the building in that regard and it is not suggested that if the building inspection report failed in some respect to notify of flooding it would have caused Ms O’Connell to terminate the contract.
[23] Statement by Mr Hills, attachment JH2 appendix E.
I carried out at the request of the applicant a view of the site during the hearing. I saw that there was build-up of soil on the outside of the rear wall of the garage. It seemed logical and consistent with what I heard during the trial that that soil had built up over time. However given the evidence about the rain in 2012 and the content of the SES report I am unable to conclude when the build-up became a problem for the property drainage and ingress into the garage area.
There was evidence about effervescence on the walls indicating water had at some stage come through the garage wall. The evidence from the respondent was that that effervescence was not present at the time of the inspection. That would seem to me to indicate that the water ingress into the garage area happened after the report.
The escarpment
Evidence given on behalf of Ms O’Connell from Mr Riley in the report from Morrison Geotech dated 7 August 2013 (exhibit 28) was to the effect that the photo evidence confirmed that there was ample evidence of escarpment instability when the JHA report was prepared in August 2011. Mr Riley makes the assertion that it should have been included as a significant issue in that report. That in my view is one of the important matters in issue here which is to be decided by the terms of engagement and the scope of the report provided.
I have come to the conclusion that a person who had expertise in geology or geotechnical engineering would have been concerned or should have been concerned with the stability of the escarpment. That does not necessarily mean that that was a matter which should have been reported on in the report from JHA. Nor does it mean that the inspector who provided the report was required or should have referred the condition of the escarpment to a specialist.
Mr Riley was of the view that it was not credible to assign the cause of the escarpment instability to rainfall in January 2012.
Ms O’Connell was cross-examined about a rain event which occurred it was said, on 25 January 2012. She was not able to comment on that but there are records tendered which show the rain event. It is not to the point as to whether or not it was a one in one hundred year event or one in twenty year event, rather, that it was significant rain around about the time there was a phone call made by Ms O’Connell to the SES on 27 January 2012. Ms O’Connell explained in her oral evidence that she called because,
I had had a couple of rocks that had come down at the back of the house, they crashed into the balcony but there was no water there because it was covered by an escarpment. There was no water under that escarpment.
She was reluctant to give evidence about the event preferring that the expert Mr Riley give that evidence however she did say that her phone call was associated with what was happening to the property after the rain event.
During cross-examination she said that if she had been told there was even the slightest bit of problem with the rock face or she was referred to a geotechnical engineer about the instability of the rock face ‘I would have run a mile and not bought the building’.
Evidence
Cathy Maree O’Connell filed a number of statements in the Tribunal and gave evidence under oath. She said that she came up to Burleigh Heads to inspect the property at 4 Vantage Drive Burleigh Heads in August 2011. She was told by a solicitor that she would have to have a building and pest inspection before buying the property and she was referred to Jeffrey Hills and Associates. She says that she employed Jeffrey Hills and Associates. Ms O’Connell told me that when she engaged Jeffrey Hills and Associates to do the report she did not give any specific instructions as to the scope of the report. She said that she asked for a building and pest report and imagined that that would cover a building and pest report.
Ms O’Connell said that after she had received the report she spoke to Rod Moreton and he told her that the place was in great condition and in his opinion it was built like a castle.
During her evidence, Ms O’Connell told me that when she was having a geotechnical engineer come to the property for the purposes of a report she was told about a massive termite nest. She had Enviro Pest come out on 2 February 2012 and had the problem dealt with.
Termites
I accept that the termite nest identified by Ms O’Connell existed at the time she had the council carry out the inspection. However there is no evidence to suggest that it was in existence at the time of the examination or the inspection was carried out by Mr Moreton. I do not see that it has been shown that any part of his report that deals with the pest inspection is incorrect. I find that the pest report was carried out in accordance with Australian Standard AS3660 and that it provided a recommendation about further investigations and maintenance. I would expect that to be the case with any pest report. Ms O’Connell during the hearing told the Tribunal that the nest was treated and the termites were gone. The question of whether or not termites were active at the time of the report is not particularly relevant because there is no suggestion that even if the report was inadequate in some way concerning the termites that it would have led to the termination of the contract to purchase the property. Rather it is likely that if they were there they would have been treated. Further there is no suggestion that apart from the termite nests identified there are any termites in the building even up to the time of the hearing of this matter.
During cross-examination Ms O’Connell was asked how the Tribunal would know that the identified termite nest was there at the time of the inspection. Ms O’Connell replied, ‘We don’t. I’ve just said that I have spoken to the termite people and apparently termites build nests quicker’.
The evidence of Mr Riley
Michael Dennis Riley is a geotechnical engineer who works for Morrison Geotechnic. He prepared a number of statements filed in the Tribunal on 24 April 2013[24] and a statement also filed in the Tribunal as ‘Further statement of Dennis Riley’.[25]
[24] Exhibit 18.
[25] Exhibit 19.
Mr Riley was engaged by Ms O’Connell to look at the escarpment at the end of January 2012, immediately after some heavy rainfall. He thinks that the rainfall event at that time was probably closer to a one in twenty year event. What he saw was there were rocks at the bottom of the escarpment. He noted that the condition of the escarpment indicated what he would call a significant hazard to the future performance of the building and he wrote a report to that effect in early February. That report is annexed to his statement.
He described the report as painting a very serious picture of the stability of the escarpment and the consequences of instability expressed as a risk. Since writing that report he visited the site on two further occasions. He produced two more reports.
During his evidence in chief he said,
I have no doubt that some of those rocks that had fallen down had done so after that rain fall event or in association with that rainfall event. But having said that, I was also of the opinion that before they had done so they would have been in a precarious position at the top of the escarpment. Of more of a hazard in my view is the potential instability of the massive rock columns, or basalt columns, that form the main body of the escarpment. The geological formation of those is such that they are reasonably poorly attached to the rock mass behind them and are susceptible to toppling triggered by several mechanisms one of which is the growing of plants and what we call root jacking, where the roots go down behind the defects and as they expand and grow they tend to cause the rocks to become detached and fall. At present there is evidence of two such columns having come down, one recently, which has fallen since the building was constructed at some stage and in fact hit the corner of the building, and the other one which is directly behind the lower wall has been there for some time. That is a visual assessment I make and certainly, it would have been there at the time that the building inspections were carried out. I also note, that I have advised Cathy O’Connell that the geotechnical work that was done before this residence was built in 1989 or late 1980s highlighted the issue of this escarpment and whilst it was the opinion of the author of the report at the time that it was reasonably stable, it did note that future instability at some stage would be inevitable. Certainly whilst that escarpment has changed since that time, and deteriorated, essentially the condition of it would be not dissimilar to what it would have been in 1989… The risk assessments that I have done… put the risk of property damage in the high category. Those were assessments carried out with the conventional Australian Geomechanics Procedure and the high category would mean that they would be unacceptable if that residence was to be constructed now. … I would say that it would be in the category of intolerable or unacceptable.
Mr Riley in his report suggested some remediation works.
In exhibit 20 the report of Mr Riley of 3 February 2012 it is said,
the consequences of further instability are seen as significant and essentially focus on the impact of falling or sliding rock onto the rear wall of the house and possibly the upper floors where these are close to the escarpment. The toppling or sliding of large rocks may rupture and penetrate the lower parts of the rear wall causing significant local damage but also possibly resulting in loss of support to an upper floor or floors. This potential damage and loss of support of the upper floors depends on the structural engineering aspects of the house and would be more accurately assessed by a structural engineer. … - We see the risk of property damage as being very high… The risk of personal injury or even loss of life cannot be assessed at this time but it is likely to be ‘unacceptable’.
I accept those statements. In my view the photographs which have been tendered attached to the reports and those photographs which appear as exhibit 23 along with my site visit confirms those views.
Mr Riley made reference to the Australian Standard I have identified earlier. He draws my attention to that part of it which under the scope of the inspection says that the structural report should not contain an assessment or opinion regarding a list of matters set out therein. He particularly refers to ‘D’ which says ‘the general maintenance other than that which is deemed to be directly related to the ongoing structural performance of the property’.
He took the view that the report needed to have some sort of assessment of the escarpment because that poses a threat to the ongoing stability to the back wall of the building and the building in general.
Mr Riley regarded the escarpment wall as maintenance directly related to the ongoing structural performance of the property because if instability occurs in the escarpment, it being only metres from the back wall, that poses a hazard and therefore a risk to the performance of the building.
He refers me to section 2.3.1 which provides:
the inspection shall comprise a visual assessment of the property to identify major defects and to form an opinion regarding the general condition of the property at the time of the inspection.
He takes that to mean that you have to look at the property to identify issues which might impact on its performance.
He drew my attention to section 2.3.5 which indicates the extent of reporting including significant items to be reported on including any major defect that is an urgent and serious safety hazard. His view is that the underfloor spaces at the back of the house where the rock escarpment is, is in fact a major defect and a serious safety hazard and needed to be in a report whereas they were not.
He said,
I would have thought that it would have been difficult to miss this escarpment under the back of the house as being a significant hazard and certainly worthy of at least mention in the report so that, if the person doing the inspection wasn’t expert or trained in this area, he could have made note of it in the report that a geotechnical engineer or geologist should have a look at this and advise further.
Having viewed the wall and seen the photographs I agree with that assessment.
I am also satisfied that the Standard, on a proper construction, did require the respondent to report on such matters. The argument put forward by Mr Riley is persuasive.
I note that the respondent seems to accept that the Standard referred to is and was at the time a statement of the obligations of the respondent at the time of carrying out the inspection.
Although there does not seem to have been any discussion between the applicant and the respondent about the scope of works, and there does not seem to have been any provision of the contractual terms in the report provided to the applicant prior to the report being provided, I accept that the Australian Standard does, in the circumstances where the respondent has accepted its importance, form a part statement of the scope of works.
I note that during the cross-examination of Mr Riley, Mr Hills on behalf of the respondent did not seem to disagree with Mr Riley’s assessment concerning the dangerous nature of the escarpment. He said
we don’t disagree. Rocks have fallen down the escarpment and there is evidence of structural disengagement of rocks and there are some precarious hanging rocks and they needed to be attended to. We certainly don’t disagree with that at all.
Much of the cross-examination of Mr Riley concerned itself with a remedy to stabilise the escarpment. Mr Hills suggested a number of alternatives to Mr Riley. Part of the cross-examination also was concerned with differing prices from Team Rock who were to be a firm quoting on carrying out some remedial work. Mr Riley explained that some of the differences were because a preliminary make-safe work not being included in a remedial solution.
The evidence of Mr Campbell
Peter Kevin Campbell was an employee of the Building Services Authority in Queensland. He provided a report.[26] Mr Campbell gave evidence of the results of an inspection carried out by him. He noted the near vertical embankment located within 2.5 metres of the rear of the garage wall. He also noted soil levels around the garage area and evidence of water penetration.
[26] Attachment 21.
Essentially he was of the opinion that those items should have been ‘referenced in the pre-purchase report’. He said that a lack of perimeter drainage should have been noted. Mr Campbell was of the view that there should have been a report on the escarpment and in that regard pointed to section 3.2.1 of the Australian Standard which required the property within 30 metres of the building to be the subject of inspection. Mr Campbell was of the view that irrespective of whether the report contracted to be provided was a building report or a structural report, the Australian Standards applied.
Mr Campbell could not say whether or not the termite nest was apparent at the time of the inspection nor could he say when water marks on the inside of the skylight in the hallway appeared. Mr Campbell said that in his view the instability of the embankment adjacent to the building should have been the subject of a recommendation for further investigation by a geotechnical engineer.
During the cross-examination of Mr Campbell, the following passage occurred:
Campbell: The report shall identify any observed items that may constitute the present or imminent serous safety hazard.
Hills: So a requirement of the report is that it must comment on safety if there is a present or imminent serious safety hazard as well as major structural faults because that is required as part of the standard if you look at the standard as global, that’s what you have to report on.
Campbell: I wouldn’t read it as ‘as well as’ I would read it as ‘or’.
Hills: I’m happy with that. The bottom line is we have to report on major structural, we have to report on safety, either or. You’ve identified that there were no major structural issues with this dwelling.
Campbell: The dwelling itself, no.
…
Hills: What would you like to define as imminent?
Campbell: I believe that it is a danger. I wouldn’t want to sit behind it.
Hills: So in that instance you are saying that there is an imminent danger of that wall collapsing.
Campbell: An unknown timeframe. It’s imminent.
Hills: It may collapse at any time. We’ve got rocks that are hanging there. We don’t disagree with that, following your inspection. That’s dangerous and it certainly needs to be rectified.
Campbell: Definition of imminent could happen any time. I don’t know when exactly.
Mr Campbell when asked about the effect of the rain event of January accepted that that event added soil and rock which had moved down the hill and blocked the exit of water and hence causing the internal section of the garage to be flooded. He also accepted that it was not necessarily the case that effervescence of the walls would have been present during the inspection carried out by the respondent.
In reference to the termite nest Mr Campbell during cross-examination withdrew the statement in his report to the effect that the requirements of AS4349.1 appendix A and AS4349.3 had not been satisfied as a termite nest location has not been bought to the attention of the purchaser.
The evidence of Mr Roep
Mr Dax Roep did a valuation of the property.[27] He valued the property on two dates, one 23 May 2013 and one as at 10 August 2011. On each occasion he did two valuations, one as an as-is basis and one where the basis is where it assumes the defects do not exist.
[27] Exhibit 2.
As at the 10 August 2011 he valued the property, assuming the defects did not exist as $825,000 and on an as-is basis $540,000. As at 23 May 2013 he valued the property at $800,000 assuming the defects did not exist and $520,000 on an as-is basis.
The difference between the valuations done as at 10 August 2011 is $285,000 and as at 23 May 2013 is $280,000.
There were assumptions that he used in reaching those valuations. He was asked to assume that the various identified defects were accurate and the cost estimates to rectify them were accurate. The basic premise of his valuation was if there were no costs or issues then the full market value would apply.
Mr Roep was asked why the valuations were $285,000 and $280,000 less than a rectified building when the repair costs provided was less than $160,000. He said,
We take into account those repairs and we would always allow that the market would then apply their own risk factor and we applied a 10% contingency on those costs because we assume the price would increase.
He further explained, ‘the whole cost and risk if someone approaches the building is considered’.
When asked what the valuation would be if he was provided with the rectification cost that was $42,000 with a lifetime guarantee, he said that the valuation would be dramatically different. He explained,
we usually apply 10% and the profit risks when looking at trying to do the works and risk of about 10-15% but it would be dramatically different… $42,000. Normally if we applied the 10% to that, that would be about $46,000 but then if we apply the gross-profit and holding costs it would take it back to about a $60,000 to $70,000 gap.
He said that on the current valuations he took into account the cost of a rectification as supplied to him and then took into account a percentage of risk and cost rises. He added 10% to the cost of rectification supplied to him and applied a 10% contingency which would vary depending on the nature of the cost estimates to rectify. He said that if he had a contract to have the works remedied, the contingency would come down.
His report was not challenged.
I note in the valuation some of the costs included are the preparation of the stability of the escarpment, reports about drainage, water proofing. The tender document for the rectification of the escarpment by Team Rock Anchors which was attached to the valuation is for $142, 629.
The further evidence of Mr Riley
Mr Riley was recalled on a number of occasions. He prepared a report dated 7 August 2013.[28] It dealt with the timing of the escarpment instability in relation to the pre-purchase structural investigation. It annexed some photographic evidence which Mr Riley says confirms that there was ample evidence of escarpment instability when the JHA report was prepared in august 2011 and which he says should have been included as a significant discussion issue in the report. I accept that to be so.
[28] Exhibit 28.
A geologist with geotech engineers gave evidence. He had been to visit a vacant block near the subject’s site. Whilst he was there he took photographs of some of the rocks and the escarpment on the subject’s site. That was in 2008. He described the rock formation and the escarpment as,
these are massive columns. You don’t have to be a genius to know that they have the potential to fall just on their own. These are massive big columns and root jacking, I believe, would be a major contributor and there would be plenty of roots behind that escarpment.
During his evidence on day 3 Mr Riley told me that in terms of reporting there is a requirement in section 2.3.5 of the Standard that it include a description of the major defects and especially one that is an urgent and serious safety hazard which he took the escarpment to be.
He took the inspection to be a structural inspection so that it included the house and the immediate surroundings (section 3.2.1) in particular property within 30 metres of the building.
He thought that the slope at the back of the building ought to be part of the structure because it is within metres of the structure and the floors are founded on top of the escarpment. He regarded it as an integral part of the house subject to structural inspection.
He also said,
there is an issue of major defects and that is a serious safety hazard and this escarpment is threatening parts of this structure because it supports the footings and there is a defect within it because a rock has fallen so that constitutes the defect which should have been reported on or highlighted in the report for an expert to investigate.
The evidence of Mr Arthur
Brett Arthur is a civil engineer. He prepared the Wisteria Partners report dated 2 March 2012.[29] During his evidence he said,
the rock face in itself does not seem to be unstable but the concern in regards to the structure are these rocks hitting the building because they are substantial in their size and weight and the other concern is that the slab rested or supported on the rock face toward the back end and as it progresses this also become unstable and causes structural defects in the front portion of the house.
[29] Exhibit 31.
I accept that contention. Part of the cross-examination of Mr Arthur concerned alternative methods of rectifying the problems associated with drainage and restraining or dealing with the escarpment. In general the outcome of the cross-examination was that those matters were possible.
Mr Arthur was of the view that the build-up of soil behind the wall occurred over a number of years and drainage was now needed because otherwise every time it would rain the garage would flood.
The evidence of Mr Keogh
Mr Keogh prepared a quote for Ms O’Connell dated 30 August 2012 for $17,536.34 based on the plans and drawings provided by Wisteria. His quote in that regard was not really challenged.
The evidence of Mr Jones
Barry Jones was a director of Team Rock Anchors. He prepared the tender submission mentioned earlier attached to the valuation report in the sum of $142,629. The price was based on a design by Mr Riley for the permanent restraint solution to the wall.
The proposed solution involved the permanent restraint of the escarpment face, both the upper section parallel and level with the balcony and the lower section just behind the house. It involved the permanent restraint of the face, the encapsulation of the face with spray concrete and anchors that would hold the restraint surface in place for a period of 50 years and effectively guarantee the stability of the rock face.
The quote is exhibit 40.
Mr Arthur was prepared to guarantee his work for 50 years.
Mr Riley was again recalled to give his view of the alternate proposals suggested by Mr Hills. His view was that the house was likely designed as a self-standing structure and was not designed or engineered in any way, shape or form to support the escarpment and backfill behind it. His view was that the treatment of the escarpment needed to be separate so it is a stand-alone treated feature and the house continues to perform as it was engineered to do without the additional loads imposed by the escarpment and backfill. On balance, having considered the proposals put up by Mr Hills, the nature of them and their relatively recent design I am not reasonably satisfied that they would be appropriate. In that regard I prefer the evidence of Mr Riley. In my view, there not having been a structural appraisal of the structure and the surrounding circumstances, it would not be appropriate to adopt the alternatives put up by Mr Hills.
The evidence of Mr Hills
Jeffrey Hills gave evidence and produced a statement which became exhibit 42. He gave evidence of his qualifications. Those qualifications were challenged by Ms O’Connell. In the end having heard all of the challenges and the evidence of Mr Hills I accept his qualifications.
Mr Hills gave evidence that the structural inspection was undertaken by Rod Moreton in August of 2011. Mr Moreton was an employee of Jeffrey Hills and Associates at the time he undertook the inspection. The company subsequently changed its name to JHA No 11 Pty Ltd. He told me the inspection was undertaken in accordance with the requirements of the Australian Standard 4349. He drew my attention to various sections of the Standard and essentially made his argument during evidence. His primary stance on behalf of the company is that the report is consistent with the requirements of the Australian Standards. He contends that there is no requirement from the Standard to refer to the escarpment or refer it to an independent person for assessment.
As I have said herein in my view that is the primary question to be determined at this hearing.
Mr Hills during his evidence acknowledged that if the Tribunal finds that the inspector should have suggested that the escarpment be further investigated the damages do not follow the event in that the next question is whether Ms O’Connell would have acted on the advice. He contended during his evidence that it is not likely that Ms O’Connell would have relied on the recommendation. I do not see a credible basis for making that contention.
He then contends that if the Tribunal considers that remedial works are required to fully stabilise the rock columns then he contends he has provided a simple design solution that stables the rock columns and solves any potential safety hazards that may arise due to column instability.
The evidence of Mr Moreton
Mr Rod Moreton gave evidence. He had prepared a statement of evidence and was cross-examined.[30] Mr Moreton was the inspector who undertook the inspection and completed the report the subject of these proceedings. He gave evidence concerning whether there was any drainage problems, effervescence on the garage wall, whether there was any water penetration around the skylight, whether there were water stains out of the control joint and whether there was any termite activity. His evidence was that he did not observe any of those problems. I accept his evidence in that regard.
[30] Exhibit 43.
I also accept that he is a licenced pest inspector and in that regard his evidence that a termite mould such as that referred to in the evidence would probably take between anything between one month to six weeks for it to occur at that size.
He gave evidence concerning the escarpment and said, ‘it looked quite stable to me’. He said he walked around the back of the building, walked in underneath the slab above and around it, and there were no apparent issues that he should have made mention of. He said the level of the soil at the back of the garage was fine. It was below the bottom brick and it was even.
To my mind there is some doubt about how the soil at the back of the wall near the escarpment built up. I accept what seems to be the evidence of all of the witnesses that it built up because of water. I am not able however, to determine how long it took to build up to what it was in 2012. I accept the evidence from Mr Moreton about the soil and logically if that was so, that would explain why he saw no evidence of previous flooding of the garage.
Whilst the stability of the escarpment may be a matter of opinion and it may be that Mr Moreton held the view that it was stable in my view that was not a reasonable assessment. All of the evidence suggests, and indeed an inspection of the escarpment in my mind confirms that it was not stable. It was in my view admitted that at the time of the hearing and at least in 2012 it was not stable. There was clear evidence that in 2008 it had not been stable.
In my view it is likely that the rainfall in 2012 identified by Mr Hills caused a significant amount of dirt to build up behind the wall. Looking at the dirt behind the wall it seemed to me to be a of a silty type nature caused by water flow. In my view the evidence from the SES suggests that it was such a significant factor.
The evidence of James Freeman
James Freeman is a licenced builder. He gave evidence about stabilising the embankment. His evidence was that the solution quoted on by Team Rock Anchor was excessive. Having regard to the content of Mr Freeman’s evidence, his qualifications and the manner In which he gave his evidence, and in the circumstances I am not prepared to conclude that he has the sufficient qualifications to give the evidence rejecting the solution of that proposed by Mr Riley and quoted on by Team Rock Anchor nor comment on alternative solutions as being more suitable or more appropriate. He has given a statement.[31] I accept his quote as a genuine quote but I am not satisfied that the remedial work proposed is adequate or sufficient.
[31] Exhibit 45.
The evidence of Mr French
Terrence French is a director of a company involved in waterproofing on the Gold Coast. That company is Wet Fix Waterproofing and it provided a quote.[32] That quote is dated 6 February 2012. Mr French said that the quote was reasonable for the work set out in the scope of work in the document. It was for $7,492 plus GST and it was for waterproofing of areas of the basement and to prime and seal the tiles in the balcony area off the kitchen. I accept his evidence but I am not reasonably satisfied the subject of his quote was in the circumstances such that it should have been reported.
[32] Exhibit 46.
Further discussion
Subsequent to the hearing the parties have put in written submissions.
Ms O’Connell’s, the last of them, was received 3 September 2013.
Ms O’Connell seeks a costs order and I gave her leave to present evidence the costs incurred. Subsequent to the submissions being received a green folder of miscellaneous invoices was received by the Tribunal on 4 September 2013. The contents of that folder are not such that I could make a proper determination as to quantum of costs of and incidental to this claim. The contents are invoices or receipts and includes the invoices from the respondent for the report and invoices from experts.
Section 100 of the QCAT Act provides:
Each party usually bears own costs
Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party's own costs for the proceeding.”
Section 102 of the QCAT Act provides:
Costs against party in interests of justice
(1) The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.
(2) However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.
(3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—
(a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
(b) the nature and complexity of the dispute the subject of the proceeding;
(c) the relative strengths of the claims made by each of the parties to the proceeding;
(d) for a proceeding for the review of a reviewable decision—
(i) whether the applicant was afforded natural justice by the decision-maker for the decision; and
(ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;
(e) the financial circumstances of the parties to the proceeding;
(f) anything else the tribunal considers relevant.
Section 107 of the QCAT Act provides:
Fixing or assessing costs
(1) If the tribunal makes a costs order under this Act or an enabling Act, the tribunal must fix the costs if possible.
(2) If it is not possible to fix the costs having regard to the nature of the proceeding, the tribunal may make an order requiring that the costs be assessed under the rules.
(3) The rules may provide that costs must be assessed by reference to a scale under the rules applying to a court.
The total claim for costs claimed was $48,451.44. In my view if it were not for the decision on jurisdiction it would be appropriate for that claim for costs to be assessed on a standard basis.
In a letter addressed to me dated 3 September 2013 which I take to be part of the submissions of the applicant Ms O’Connell said:
1. I want the Tribunal to make the following orders that Jeffrey Hills and Associates ABN 77151822445 later known as JHA No 11 pay Cathy Maree O’Connell $200,000 for the diminution in value of the property between what it would be worth without the defects and the value of the property in its present state plus interest, plus
2. Mortgage repayments to date, 18 months at $3,357 = $60,426 for a property I have been unable to live in because of Mr Hills refusal to settle this matter. Plus
3. All costs to date as supplied to the Tribunal totalling $48,451.44 (refer green folder) all receipts supplied.
Please refer Heron Todd White valuation that has assessed property as-is basis $540,000
Assuming defects did not exist $825,000
Diminutive value loss $285,000
Total including costs $308,877
I believe this is very fair as there are yet unknown costs, continued supervision by geotech engineer for rectification and a whole will need to be cut in the back wall of the garage for a crane to access. This could be up to $30,000 for repair work not allowed for.
I find that there was an obligation on the respondent to report on the state of the escarpment and the danger it posed. That is because in my view the escarpment is a structural element to the building and even if it is not it is a matter which is covered by the Standard. I note that in the report Jeffrey Hills and Associates Pty Ltd undertook to inspect the property and provide ‘a structural property report’. That is capable of referring to matters other than just the building. Further, in the body of the report, the company confirmed their instructions ‘to undertake a property inspection and report on any significant and obvious structural defects’.
In my view, the inspector had an obligation to report that which was directly related to the ongoing structural performance of the property. In my view the escarpment in its condition was directly related to the ongoing structural performance of the property. If it fell or parts of it were detached it would likely cause severe structural damage to the building.
Further, the condition of the escarpment was such that it had to be rectified to avoid the development of unsafe conditions. In my view it presents as a serious hazard to occupants or is such that it is about to become a serious hazard to occupants.
The inspector had a professional duty to report clearly on the state of the escarpment or to refer it to a suitably qualified expert. Further, the escarpment is a relevant feature of the property and it is within 30 metres of the building and within the boundaries of the site. It was accessible and should have been inspected.[33]
[33] Section 3.1 and 3.2.1 Australian Standard 4349.1.
In my view the escarpment fulfilled a characteristic function in the building. It was part of the support for the overhead slab. Further in my view the escarpment was an observable item that constituted a present or imminent serious safety hazard and the inspector was required to report on it.[34] At the very least, the report should have included a recommendation for further inspection by a specialist inspector particularly a geotechnical engineer. I do not regard the escarpment as being any of the items in appendix D to the standard.
[34] Section 4.2.4.3 Australian Standard 4349.1.
In my view if I had jurisdiction the proper order should reflect the rectification costs. Mr Riley has said in evidence that he would guarantee the works as did the contractor that has been engaged to carry out the works.
I am not satisfied that apart from the rectification works to the escarpment the report did not adequately reflect the circumstances relevant to the building.
In my view it is not appropriate to adopt the diminution in value as set out in exhibit 2 because it is not appropriate to make the deduction as assumed because of the guarantees provided by Mr Riley. The uncertainties should be taken out of the valuation. Further some of the costs assumed in the valuation are costs in respect of work found to be other than because of a failure to properly report.
Section 34B of the QBSA Regulation 2003 provides for the interest rate to be applied on an award of damages:
(1) For section 77(2)(c) of the Act, interest is payable on the amount of damages awarded –
(a)If the parties have entered into a contract – at the rate specified under the contract; or
(b)At the rate agreed between the parties; or
(c)Otherwise – at the rate of 10%.
(2) The interest is payable on and from the day after the day that the amount became payable until and including the day the amount is paid.
The interest rate to be applied is 10%.
In my view the applicant would otherwise apart from the decision on jurisdiction be entitled to interest for the period after the claim was filed to today.
In my view if I had jurisdiction it is not appropriate to make any orders concerning mortgage repayments. The applicant has determined to continue those payments. She had an obligation to minimise her loss. She could have crystallised her loss by carrying out the work or by selling the property in its present state. In any event I am not satisfied that paying mortgage repayments is in these circumstances a loss. There is no evidence or reasoning behind that claim which came on the last day of written submissions.
In my view if I had jurisdiction the appropriate cost which should have been taken into account in the valuation report include:
The cost of Morrison Geotechnic visiting the site and preparing design sketches in the sum of $5,060,
The cost of Morrison Geotechnic preparing the geotechnical report on the escarpment stability in the sum of $1,004.30,
The cost of Team Rock Anchors carrying out the necessary work as contained in their tender submission of 29 April 2013 in the sum of $156,891.90
Total: $162,956.20
I should record the concerns of Ms O’Connell during the hearing. She claimed to be treated “unfairly”[35], and reported feeling “harassed”[36] and “incredibly frustrated”.[37] She was insulting,[38] abusive,[39] time-wasting,[40] emotive,[41] petulant,[42] and distracted by irrelevant information[43]. On more than one occasion Ms O’Connell wanted to “withdraw (herself) from proceedings”[44] or “call a lawyer”[45] because she claimed to be “very upset with the way I was conducting the whole trial”. Ms O’Connell accused me of “bias” and the hearing being “unfair”. During the hearing she made the comment “asshole”.[46] Ms O’Connell asserted she was not given natural justice. That was not so. She was given every opportunity to present her case and despite not having her basic material she was provided with a copy of all relevant material during the trial.
[35]Transcript page 40.
[36]Transcript page 56.
[37]Transcript page 243.
[38]Transcript page 381 – 382: Ms O’Connell accused a witness of being “a cowboy”.
[39]Transcript page 82: Unprovoked, Ms O’Connell accused Mr Favell of being “so rude and agitating”.
[40]Transcript page 250.
[41]Transcript page 118.
[42]Transcript page 40: When asked to restate her question, she told Mr Favell, “you’re really picking on me”; page 294.
[43]Transcript page 56; page 381.
[44]Transcript page 67.
[45]Transcript page 118.
[46]Transcript page 159.
I set out the above and say that despite that conduct and the comments made I ignored the comments and have decided the matter according to the law and the evidence given.
The application is dismissed for want of jurisdiction.
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