PLUNKETT HOMES (1903) PTY LTD and LAVENDER - [2010] WASAT 147

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: BUILDERS' REGISTRATION ACT 1939 (WA)

CITATION: PLUNKETT HOMES (1903) PTY LTD and LAVENDER [2010] WASAT 147

MEMBER: MR T CAREY (MEMBER)

HEARD: 23 JUNE 2010 AND 30 JUNE 2010

DELIVERED : Edited reasons delivered extemporaneously on 30 JUNE 2010

FILE NO/S: CC 409 of 2010

BETWEEN: PLUNKETT HOMES (1903) PTY LTD
Applicant
AND
PATRICK LAVENDER
PAULA LAVENDER
Respondents

Catchwords:

Building disputes - Application for leave to review decison - Whether liability can arise in respect of roof sheeting installed by a subcontractor the subject of later discolouration which the applicant could not foresee

Legislation:

Builders' Registration Act 1939 (WA), s 12A, s 12A(1), s 41(1)

Result:

The application is unsuccessful

Category: B

Representation:

Counsel:

Applicant: Mr S Pentony
Respondents : Selfrepresented

Solicitors:

Applicant: Lavan Legal
Respondents : Self-represented

Case(s) referred to in decision(s):

Bradshaw v McGuire (unreported, WASC, 30 April 1986)
J-Corp Pty Ltd and Ly and Anor [2006] WASAT 132

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant sought leave to review a decision of the Building Disputes Tribunal requiring it to rectify part of a Colorbond roof affected by discolouration. It was argued that the applicant's lack of knowledge, and inability to have knowledge, that the installation of the roof sheeting by a subcontractor might have an unsatisfactory result meant that liability could not arise under the statutory provision relied upon (s 12A(1) of the Builders' Registration Act 1939 (WA)).
The Tribunal considered relevant authorities, including a previous Tribunal decision and a Supreme Court Full Court decision, Bradshaw v McGuire (unreported, WASC, 30 April 1986), which, at least on their face, appeared to contradict the applicant's submission. The applicant sought to differentiate between the judgments in Bradshaw v McGuire, and to distinguish the comments of the Chief Justice in that case. However, the Tribunal rejected the applicant's arguments. It found, based on Bradshaw v McGuire, that liability under s 12A(1) of the Builders' Registration Act 1939 (WA) may lie in any case of faulty or unsatisfactory building work being demonstrated in a built product.
The Tribunal accordingly refused leave and dismissed the application.
The Tribunal gave its decision orally on 30 June 2010. Its reasons, taken from the transcript and edited in minor respects to aid clarity, were as follows.

Introduction

This is an application under s 41(1) of the Builders' Registration Act 1939 (WA) (BR Act) for leave to review a decision of the Building Disputes Tribunal (BDT) made on 5 March 2010, reflected in Order to Remedy No 216 of 200910 in terms that:
Plunkett Homes (1903) Pty Ltd rectify the fault or unsatisfactory building work at 65 Runs Avenue, Darling Downs, as listed below. The builder is to remedy the defects in the roofing structure within eight weeks of the date of this order.
It was common ground before me that the remedial works required by the order to remedy were limited to part of the Colorbond sheeting affixed to the respondent's roof and not any structural component such as batons.
The respondents had their new house constructed by the applicant in 2003. As part of that project, a green Colorbond roof was installed by a roofing contractor subcontracted by the applicant in October 2003. Practical completion of the house occurred in 2004.
In 2005, some two years after installation of the Colorbond roof, discolouration of parts of the roof sheets was noted. The patches tended to a white colour and a number of them were in the form of handprints, particularly along the edges of the sheets.
The respondents filed their complaint in the BDT on 22 June 2009. The matter went to a hearing before the BDT on 4 March 2010.

Issue

Before the Tribunal, the applicant did not dispute the fact of discolouration. It did, however, deny that the applicant, as the builder, could be responsible for it within the terms of s 12A(1) of the BR Act. In order for liability under s 12A(1) to arise, the BDT must be satisfied that:
Building work has not been carried out in a proper and workmanlike manner by reason that the building work is faulty or unsatisfactory.
In circumstances where the applicant or its agent did not know and could not have known that the method of installation of the sheets employed might result in an unsatisfactory outcome years later, it was submitted that the unsatisfactory result could not have been caused by any failure by the applicant to carry out the building work in a proper and workmanlike manner.

Hearing before the Tribunal

Evidence going to the cause of the discolouration was provided by the applicant at the hearing before the BDT.
The evidence indicated that the discolouration was the result of the application of an aggressive foreign agent which had attacked the surface profile of the Colorbond polyester film. Sunscreen was suggested as the offending agent, although other possibilities were not ruled out.
The applicant's evidence included that of an industrial chemist who said that the potential for sunscreen damage to Colorbond roof sheets became known in 2006. Subsequent research found that certain types of sunscreen could affect a painted surface interacting with sunlight.
The BDT found, contrary to the applicant's submission, that s 12A(1) of the BR Act does not require foreknowledge by the builder of a risk before liability can arise. That is because of the circumstances in which liability under s 12A arises.
According to the BDT, the consequence of the workmanship is the only factor. It is or is not faulty or unsatisfactory. The issue in this leave application is whether this result-driven analysis of the BDT is correct or, rather, whether it is permissible to examine the process followed in the course of the construction in order to determine liability.

Consideration

In J-Corp Pty Ltd and Ly and Anor [2006] WASAT 132 (Ly), the Tribunal was concerned with whether liability under s 12A(1) might arise in circumstances where footings were designed by an engineer and constructed in accordance with the engineering drawings, but proved to be inadequate support for the house supported by them.
The Tribunal held that liability did not arise by reason of a warranty that the site would support the works. Absent that warranty, however, as the Tribunal made clear, it would have found that the building work had not been carried out in a proper and workmanlike manner, notwithstanding compliance with the engineer's design. Senior Member Raymond said in Ly at [34] to [36]:
34On the evidence put before the Tribunal at this stage, I accept that there is nothing to suggest that the applicant should have taken any steps, other than those which it did, in assessing the site, designing the footing detail, and constructing the home in accordance with the plans and detail. There is nothing to suggest that the footing and slab does not comply fully with the engineering drawings. But the decision of the Full Court in Bradshaw v McGuire, referred to above, is directly in point and defeats the general proposition put forward by the applicant that the carrying out of the works in accordance with the design drawings must result in a conclusion that the works were constructed in a proper and workmanlike manner.
35That was the argument raised in Bradshaw's case, which also involved extensive cracking to walls of a building as a result of a design inadequacy in relation to the footings. It was contended by the applicant that the design of the footings was not 'building work' within the meaning of s 12A(1) of the BR Act. The court found it unnecessary to make a determination in those terms. Instead Burt CJ stated:
'The expression "building work" as used in section 12A(1) of the Act is not defined. It is, I think, a compound concrete noun. In the instant case and relevantly it is the footings as constructed or built. That work was carried out by the applicant. The work was, and it is common ground that it was, 'faulty and unsatisfactory' in that it was not capable of sustaining the weight of the building built upon it. And that conclusion is not, I think, displaced by a finding, if made, that the work was properly carried out in accordance with the design and specifications prepared by a consulting engineer engaged by the builder.'
36The decision is based not on any term of fitness for purpose implied into the building contract, but on the statutory interpretation of s 12A of the BR Act.
Given that Counsel for the applicant had not had the opportunity of considering Ly's case, and in particular the passages to which I have referred in which reliance was placed on the Supreme Court decision of Bradshaw v McGuire (unreported, WASC, 30 April 1986) (Bradshaw), liberty was granted to file written submissions on the application of Bradshaw to the facts of the present case.
The applicant took the opportunity of filing written submissions which included:
1)the remainder of the Full Bench in Bradshaw determined the case before them on a different basis from the former Chief Justice so that the dicta of the Chief Justice's decision in that case did not bind the Tribunal;
2)the dicta of the Chief Justice in Bradshaw was distinguishable from the current case; and
3)the dicta of Wallace J in Bradshaw was to the opposite effect, namely that the policy of the BR Act is to protect the public from incompetent or negligent work. Section 12A is not intended to be imposing a strict liability upon builders.
In my view, none of these arguments can be sustained.
As I read each of the judgments of Wallace and Pigeon JJ in Bradshaw, it is the defective nature of the house resulting from it being constructed on the faulty footings which was determinative. Thus, Wallace J said:
It is the fact, however, that the footings to the residence was defective and this caused the cracks that appeared in the building ... It is clear that the footings constructed in accordance with that design was [sic] also defective in that the structure was built in accordance therewith. It is for this reason that I am unable to appreciate that the faulty footings do not come within the definition of building work. (Emphasis added)
From the reasons for decision of Pigeon J:
The applicant undertook to erect a building according to a rough sketch plan that was handed to him. A person who undertakes to erect a structure in those circumstances is undertaking to erect it to a stable design in order that it remains standing, and in this sense design is an integral part of the building work. (Emphasis added)
The references in all their Honours' decisions to whether the design was part of the building work was necessary in order to deal with the issue advanced by the applicant before them - that the design work did not form part of the building work. Each judge found that the design work did form part of the building work. More significantly for my purposes, each judge also found that the inadequate design had contributed to the end result, an unstable house, and that this was sufficient for the plaintiff, as the person who carried out the building work, to be liable under s 12A.
The applicant's attempt to distinguish what the Chief Justice said in Bradshaw by suggesting that the Colorbond sheets were not an item 'constructed or built' by the applicant, but rather a material that was installed by it, is not a distinction which arises on a proper construction of s 12A(1). The result with which we are concerned is 'building work (that) is faulty or unsatisfactory'. A roof containing the obvious discolouration evident in this matter clearly falls within this description.
The applicant's third argument relies upon the following words from Wallace J's reasons for decision:
As I apprehend the purpose or intent of the statute, it is to protect the public from - in the words of the minister in the second reading speech - incompetent or negligent work.
His Honour went on to note that the builder is responsible for faulty workmanship carried out by subcontractors. This demonstrates that although incompetent or negligent work is a focus of the legislation, it is not necessarily the sole determinant of liability in all cases.
By virtue of the words used in s 12A(1) as those words have been applied in the Tribunal in Ly and in the Supreme Court in Bradshaw, I am satisfied that liability may lie in any case where faulty or unsatisfactory building work can be demonstrated in the built product.
For the reasons I have given, I consider the BDT's decision to be correct. I accept that I have referred only to part of the BDT's reasons and the applicant raised complaints regarding other parts, but the part to which I have referred is the crux of the BDT's decision which, if correct, as I have found it to be, must determine the matter in the respondent's favour.

Order

The Tribunal accordingly ordered on 30 June 2010 that:
1.The application for leave is refused.
2.The application is dismissed.

I certify that this and the preceding [30] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR T CAREY, MEMBER