PYRAMID CONSTRUCTION (WA) PTY LTD and OWNERS OF STRATA PLAN 47111
[2018] WASAT 76
•8 AUGUST 2018
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: PYRAMID CONSTRUCTION (WA) PTY LTD and OWNERS OF STRATA PLAN 47111 [2018] WASAT 76
MEMBER: SENIOR MEMBER C WALLACE
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 8 AUGUST 2018
FILE NO/S: CC 1105 of 2018
BETWEEN: PYRAMID CONSTRUCTION (WA) PTY LTD
Applicant
AND
OWNERS OF STRATA PLAN 47111
Respondent
Catchwords:
Application for leave to review - Necessity to find liability before making a building remedy order - Water seepage per se not evidence of faulty workmanship - Whether substantial injustice will be suffered - Whether precedent of Tribunal's decision is sufficient as substantial injustice
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 11(1)(d), s 36(1)(a), s 36(1)(b), s 58(2)
Result:
Leave granted to review the decision
Category: B
Representation:
Counsel:
| Applicant | : | Mr Shaw |
| Respondent | : | In Person |
Solicitors:
| Applicant | : | Lavan |
| Respondent | : | N/A |
Case(s) referred to in decision(s):
Filimon and Rimmer [2013] WASAT 13
Myran Holdings Pty Ltd and Bombak [2013] WASAT 20
Owners of Strata Plan 47111 and Pyramid Construction (WA) Pty Ltd [2018] WASAT 34
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
This matter involves a complaint originally lodged on 18 March 2016 by the respondent, Owners of Strata Plan 47111, with the Building Commission as against the applicant in this proceeding, Pyramid Construction (WA) Pty Ltd, in respect of the construction of a strata complex known as Westbridge Apartments situated at 863 Wellington Street, West Perth. The complaint was made pursuant to s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) alleging that a regulated building service had not been carried out in a proper and proficient manner or was faulty or unsatisfactory. That complaint was referred to this Tribunal on or about 31 January 2017 pursuant to s 11(1)(d) of the BSCRA Act.
The Tribunal constituted by a legally qualified member and a specialist sessional member (the original Tribunal) conducted a hearing into the building service complaint items on 7 and 8 February 2018. The original Tribunal ultimately published reasons and made final orders on 16 May 2018: Owners of Strata Plan 47111 and Pyramid Construction (WA) Pty Ltd [2018] WASAT 34. The original Tribunal made orders pursuant to s 36(1)(a) of the BSCRA Act requiring the applicant to remedy certain complaint items and also made an order pursuant to s 36(1)(b) of the BSCRA Act requiring the respondent to pay the applicant the reasonable costs of remedying other complaint items.
On 29 May 2018 the applicant made an application pursuant to s 58(2) of the BSCRA Act pursuant to which it sought leave to review the original Tribunal's decision in relation to order 2(e) made on 16 May 2018. That order related to complaint item 7 in respect of water penetration of the slab of the south carpark to the basement. In relation to this complaint item the Tribunal ordered:
Item 7 seal the leaking cracks in the concrete.
This Tribunal had before it the benefit of the following documents in relation to its consideration of the question of leave:
1.written submissions filed by the applicant dated 29 May and 20 July 2018;
2.written submissions filed by the respondent dated 17 July 2018;
3.transcript of proceeding on 7 and 8 February 2018;
4.published reasons of the original Tribunal: Owners of Strata Plan 47111 and Pyramid Construction (WA) Pty Ltd [2018] WASAT 34; and
5.the Exhibits which were accepted as evidence before the original Tribunal.
The application was determined entirely on the documents.
The criteria for the grant of leave
In Myran Holdings Pty Ltd and Bombak [2013] WASAT 20 at [8], the Tribunal set out the following criteria to be considered in deciding whether to grant leave and which were adopted from a consideration of that matter in Filimon and Rimmer [2013] WASAT 13:
The following principles can be gleaned from the discussion of the applicable criteria for the grant of leave to review under s 58(2) of the BS(CRA) Act as discussed in Filimon and Rimmer [2013] WASAT 13:
1)It is necessary to show that the decision of the original Tribunal was wrong or attended with sufficient doubt.
2)It must be shown that if leave were not to be granted, the applicant would suffer a substantial injustice.
3)It will normally not be sufficient that the decision appealed from is apparently wrong or attended with doubt. Something more will need to be shown, such as that there is a significant question of law to be considered, or some other feature, which requires the consideration of the Tribunal to avoid a substantial injustice [if] leave were not to be granted.
4)The decisions of the original Tribunal are not to be read minutely and finely with an eye keenly attuned to the perception of error.
5)A broad view should be taken of all the material before the original Tribunal, and this Tribunal should be slow to grant leave to review or to allow reviews except in cases where, clearly, there is no discernible basis for the decision or, for example, where fundamental rules of natural justice have been breached.
6)Leave may be granted in respect of only some and not other grounds of the proposed review.
7)Having regard to the objects of the Tribunal, and because any review is by way of a hearing de novo, there is all the more reason to be particularly discerning about whether sufficient doubt exists to open the possibility of leave being granted.
8)In considering challenges to the weight of evidence, regard must be given to the expertise of the members of the original Tribunal.
The above criteria do not restrict the Tribunal in having regard to other relevant matters which may require consideration in order to avoid a substantial injustice being suffered.
The ground of review
There is only one ground of review and therefore the scope of this Tribunal's determination is fairly narrow. The ground of review submitted by the applicant is that the original Tribunal made an error of law by making a building remedy order in circumstances where it had no evidence before it upon which to make a finding of liability. That is, there was no evidence before the original Tribunal in respect of complaint item 7 to support a finding that the regulated building service had been carried out in a manner which was not proper and proficient or which was faulty or unsatisfactory. In addition, the applicant submitted that if leave were not granted, that the applicant would suffer a substantial injustice. The purported substantial injustice is not because there would be significant costs incurred in complying with order 2(e), but that a substantial injustice would be suffered by the applicant because of the precedent set by the original Tribunal's published decision. The applicant submits that the decision of the original Tribunal will throw into question a vast number of constructions already completed by the applicant, those which are ongoing and those into the future.
The respondent simply contends that there was sufficient evidence before the original Tribunal upon which it made its findings and order.
Relevant findings made by the original Tribunal
It is important to note the exact findings made by the original Tribunal in relation to complaint item 7. They are found at [96]-[100] of its decision set out below:
96The Tribunal is satisfied on the evidence presented to make a finding that water, or a water like substance, enters the south carpark through the concrete slab. We further find that persistent water ingress over time can ultimately cause damage to cars and the basement area.
97Messrs Gray, Machell, Stokes and Masryk all gave oral evidence regarding Item 7. Mr Stokes was the structural engineer engaged by the respondent in relation to the concrete slab.
98Without disregarding the evidence of Mr Gray and Mr Machell, we find that the evidence of both Mr Stokes and Mr Masryk was particularly important in considering Item 7. Both Mr Stokes and Mr Masryk agreed in cross-examination in substance with the proposition that cracking of a suspended concrete slab exposed to the elements such that it allows water to pass through was not uncommon and foreseeable within their individual expertise. Mr Masryk's evidence in this regard is a significant reason as to why we find him to be an honest and reliable witness.
99Whilst we accept the submission that neither the contract nor the BCA required the concrete slab to be waterproofed and therefore the respondent's construction of the slab was not faulty under s 5(1) of the Act. However, we do consider the cracks in the concrete slab to be unsatisfactory under s 5(1) of the Act and that those cracks should be remedied by the respondent.
100We note the remedy suggested by Mr Stokes, the expert called by the respondent who gave evidence with the most expertise in relation to concrete slabs. Mr Stokes recommended that the leaking cracks be sealed with nitofill LV injection system or approved equivalent. However, we consider it is not appropriate in the circumstances for the Tribunal to direct the respondent as to which method to utilise to seal the leaking cracks. We will order the respondent to remedy the cracks by sealing the leaking cracks.
This Tribunal will now turn to consider the expert evidence before the original Tribunal upon which it based the above findings in relation to item 7.
Expert evidence before the original Tribunal
The documentary expert evidence before the original Tribunal came from three sources in relation to complaint item 7:
1.an expert report from Mr Brian Gray, being a registered builder, dated 14 March 2016 prepared for the respondent;
2.an expert report prepared by Mr Richard Machell, being a registered builder, dated 5 June 2017 prepared for the respondent, although the witness was ultimately called to give evidence at the final hearing on behalf of the applicant; and
3.written evidence in fairly brief undated form authored by Mr Rowen Stokes, a structural engineer, retained by the applicant.
The documentary evidence of Mr Gray as set out at pages 1601-1605 of Exhibit 1 in relation to complaint item 7 set out the following views in summation form:
•Mr Gray noted that there was visible water leaking through the underside of the suspended concrete floor slab above the south lower level carpark.
•Mr Gray reported that the cracks did not appear to be of any structural concern but in his view were faulty and unsatisfactory because they allowed water to penetrate the suspended concrete slab.
•Mr Grey recommended that the applicant return to undertake remedial work including that the top surfaces and the edges of the concrete be waterproofed.
Mr Machell's documentary evidence in relation to complaint item 7 is set out at pages 1668-1671 of Exhibit 1 and in summary provides the following:
•Mr Machell noted that there was evidence of water ingress through the suspended driveway slab via a small number of cracks manifesting as white efflorescent mineralisation along the crack. The cracks were assessed to be less than 0.5mm in width and generally ran at 90 degrees to the long axis of the driveway slab.
•Mr Machell found that the cracks were consistent in size and location with shrinkage cracks.
•In Mr Machell's view the extent of cracking in the suspended floor slab, beams and car stacker pits is extremely limited and may reasonably be considered to be consistent with a strong degree of crack control exercised in the design and placement of reinforcement in the concrete.
•Mr Machell noted that the design drawings and specifications did not require the suspended slab to be waterproofed and that it was apparent that the slab had a relatively small degree of cracking present, considering the construction. Mr Machell noted that there were no requirements contained within the building permit or drawings or specifications requiring the prevention of water penetration.
•Mr Machell noted that although water was able to enter the cracks from above and potentially corrode the reinforcing in the slab over the long term, this did not in his view result in a reasonable conclusion that the installation was faulty or unsatisfactory.
•Mr Machell recommended that the cracks be ground out and flushed with a neutralising solution before filling with a suitable low viscosity sealant/adhesive.
The documentary evidence of Mr Stokes appearing at page 1771 of Exhibit 1 in summary form is as follows:
•The cracks are shrinkage cracks and are of no structural concern. The particular element is heavily restrained by the substantial slab folds either side and therefore more prone to cracking. Cracking in the longitudinal direction is restrained by '2 No layers of N16-200 bars’, providing a heavy degree of crack control.
•Mr Stokes measured the cracks as being around 0.3mm wide. That crack width is on the threshold of where seepage can occur. Mr Stokes confirmed that seepage was occurring however the quantity was minimal and gradual and active dripping did not appear to be occurring.
•Mr Stokes noted that motivation for repair was simply to enhance ongoing durability. However, the extent of seepage was not unconventional and his view was that the basement was functioning as well as a conventional basement would. Mr Stokes' view is that seepage is not uncommon in a utility grade basement.
•Mr Stokes' opinion is that efflorescence is not highly corrosive and is simply indicative of moisture passage and is not of short-term structural concern but the source of the moisture ingress should be addressed to ensure ongoing durability.
•Mr Stokes' view is that seepage is not uncommon and unless there is a specific brief from a client for a 'watertight' slab, such seepage should be anticipated.
Mr Stokes did not depart from these views expressed in writing when he gave evidence at the hearing on 7 February 2018. His evidence essentially was that the cracks were not structural but merely shrinkage cracks which ought to have been expected and are not uncommon. His view was that in the absence of contractual provisions requiring prevention of water ingress there was no legal obligation on the applicant to ensure that the slab was watertight and thus it could not now be found to be work which had not been carried out in a proper and proficient manner or which was faulty or unsatisfactory (ts 54-63, 7 February 2018). Mr Stokes stated further at ts 62-63, 7 February 2018:
… It's a heavily restrained arrangement. It has been designed to give it major crack control. There's not much more you can do from a design point of view. And it's it's functioning and fit for purpose. It's a fairly minor issue, in my opinion, this shrinkage cracking, and I think it would be good practice I reiterate that I think it's probably a good idea to seal it up just to put it to bed. But, you know, as I say, it's not uncommon to get shrinkage cracking. A number of factors cause it, but, you know, it's not I wouldn't say this is faulty workmanship at play.
Mr Stokes held firm to his views under cross-examination and gave the following evidence at ts 71, 7 February 2018:
… when a structure is heavily restrained, all all you can in response to that is to provide not a minor or a moderate, but a major degree of crack control in accordance with the concrete code. That was done in this case. So at the time, we were anticipating that we had done everything we could have reasonably done and during our supervision, we were happy that the builder had constructed the works in accordance with the drawings. So it was it's fair to say that it was our anticipation at the time that, you know, cracking of a substantial nature wouldn't happen, but in the same token, it's not surprising if minor cracking occurs. The job all concrete will crack. The job of reinforcement is to control the width of that cracking and and if my measurements are right, then I think it has it has done that job and it's, you know, not a bad outcome for a basement that wasn't briefed as being needing to be watertight.
The evidence of Mr Gray appeared consistent with that of his documentary evidence, that is, he expressed a firm view that the cracks ought to be remedied. However, his evidence was not clear as to why that would be the responsibility of the applicant. In response to a question from Mr Shaw at the hearing where he asked Mr Gray 'but what has the builder done wrong?' in relation to this complaint item Mr Gray responded at ts 63, 7 February 2018:
I'm not a structural engineer, so I can't say. I can only view it from a performance point of view.
When cross-examined further as to why the cracks had appeared allowing water seepage, Mr Gray at ts 64, 7 February 2018 gave evidence as follows:
WITNESS, GRAY: … There could have been factors, whether the design, or whether the concrete, or whether the exposure to the sun. There could be a whole lot of factors as to why it is allowing water to pass through the concrete.
SHAW, MR: And you don't know what they are?
WITNESS, GRAY: I don't. Mine is purely from a performance point of view; allowing water to pass through concrete is not acceptable.
Mr Machell's position was a curious one at the hearing. He had prepared a report on the instruction of the respondent. The respondent ultimately did not wish to call him as a witness and he was called to give oral evidence by the applicant. His evidence can be summarised as being consistent with his written report. His view, similarly with the other two experts, was that cracks allowing the seepage of water over time may have a detrimental effect and ought to be remedied. However, Mr Machell could not find fault attributable to the applicant. Indeed he found that the regulated building service complied with relevant Australian Standards, the Building Code of Australia (BCA), the certified drawings and contract specifications. In particular at ts 63, 7 February 2018 Mr Machell gave the following evidence:
WITNESS, MACHELL: Well, if it has been constructed in accordance with the design, then, you know, generally on the face of it, it's not faulty workmanship except where, to the extent that the design might be faulty, was in the reasonable knowledge of a builder. I'm not sure that that's the case in this instance. I mean, the a design check on on the concrete slab to see if it's likely to crack, or going to crack, and then what you might do about that in in if you do come to such a conclusion, I think it's outside of what the builder might normally do.
SHAW, MR: So is there anything wrong with the design here?
WITNESS, MACHELL: I haven't assessed the design and I'm not qualified either, I should say.
…
WITNESS, MACHELL: For a building of its age, it shouldn't be alarming for water to penetrate the concrete.
Consideration
I do find that the original Tribunal erred in law by making a building remedy order pursuant to s 36(1)(a) of the BSCRA Act without identifying why the regulated building service was unsatisfactory. The existence of cracks per se which allow water seepage is not evidence of unsatisfactory work. It appears that the original Tribunal simply identified the need for remedial work to be performed, clearly on the consistent evidence before it, but failed to address why the responsibility for the performance of the remedial work rested with the applicant and was not simply part of the ongoing maintenance obligations of the respondent. Indeed the conclusion of the original Tribunal is selfevidently contradictory at [99] where the original Tribunal stated:
Whilst we accept the submission that neither the contract nor the BCA [Building Code of Australia] required the concrete slab to be waterproofed and therefore the respondent's construction of the slab was not faulty under s 5(1) of the Act. However, we do consider the cracks in the concrete slab to be unsatisfactory under s 5(1) of the Act and that those cracks should be remedied by the respondent.
It is an error of law not to identify the basis on which it is found that a regulated building service has not been carried out in a proper and proficient manner or which is faulty or unsatisfactory. The original Tribunal could not make a building remedy order in the absence of such a finding.
It is therefore necessary for this Tribunal to consider whether there was evidence before the original Tribunal on which such a finding could be made. If such evidence was before it then no substantial injustice will be suffered by the applicant in this proceeding because if leave were granted the same result would be open on the evidence.
I find on a proper consideration of the evidence before the original Tribunal that there was no sound basis on which to make a finding that the regulated building service had been carried out in a manner which was not proper and proficient or which was faulty or unsatisfactory. Each of the experts was consistent in his views that the cracking was minor in nature but was appropriate to be remedied. They were also all consistent in their evidence that the applicant had performed the regulated building service in an appropriate manner, that is, it had performed the service in accordance with its building permit, the specifications and drawings, and in compliance with the relevant Australian Standards.
The only witness who attempted to assert that the regulated building service was faulty or unsatisfactory was Mr Gray. In my view he was unimpressive in attempting to give such evidence. Mr Gray's evidence was effectively that cracks per se which allow water seepage was 'not acceptable'. He seemed to be implying that there was some fault on the part of the applicant in this regard. However, when asked direct questions as to what the applicant had specifically done or failed to do (e.g. a failure to properly restrain the concrete or a failure to waterproof or a failure to install expansion joints) which was faulty or unsatisfactory, Mr Gray was unable to satisfactorily respond (ts 63, 7 February 2018).
Further, when asked what may have caused the cracking, Mr Gray gave evidence in abstract terms of a number of hypothetical possibilities, (ts 64, 7 February 2018) including the design or the concrete itself. However, there was no evidence before the original Tribunal that either the design or the concrete were unsatisfactory in any way. The evidence in this regard was therefore speculative and unhelpful.
Although the respondent submitted in its written submissions that the BCA provides that moisture ingress causing damage to a structure needs to be prevented, the evidence before the original Tribunal did not support a finding that the applicant was required to make the structure water tight. In fact, all experts before the original Tribunal accepted that the relevant provisions of the BCA, being FP1.2-FP1.4, did not automatically apply because the basement is a class 7 building to which those provisions do not apply where 'there is no necessity for compliance' (Exhibit 1 page 1670). Presumably the assessment as to whether there is necessity for compliance occurs prior to construction not afterwards depending on whether cracks occur or not. No witness gave evidence of a fault with the design of the construction to support a finding that compliance with the relevant provision of the BCA ought to have been deemed necessary. Indeed both Mr Gray and Mr Machell informed the original Tribunal that they were not qualified to make such an assessment (ts 63, 7 February 2018).
Nevertheless, despite admitting a lack of expertise to assess the suitability of the design, Mr Gray appeared to give such evidence by asserting that there had been a breach of the BCA on the basis of water seepage through cracks (ts 60, 7 February 2018). Such an assertion appears to be alleging a fault with the design given that none of the relevant design and construction documentation required compliance with FP1.2-FP1.4. Mr Gray was not qualified to make such an assessment and therefore appeared to step outside of his field of expertise in this regard. Only Mr Stokes was so qualified and he clearly found no design fault (ts 62-63, 7 February 2018). The original Tribunal ultimately accepted that the relevant provision of the BCA did not apply by finding that there was no breach of the BCA (at [99] of its reasons). The basis for this finding is sound in my view.
Lastly, it appeared that the respondent before the original Tribunal attempted to allege that the regulated building service had not been carried out in a proper and proficient manner because the applicant anticipated that the concrete would crack (possibly allowing water seepage) and failed to warn the respondent of this potential. I could find no evidence before the original Tribunal to the effect that such a positive duty to warn existed in the circumstances. As already noted, the evidence before the original Tribunal was to the effect that the occurrence of shrinkage cracks in basements are common-place and may or may not have an impact on the durability of the concrete long-term. I cannot see a basis on which to allege that a failure to warn of this possibility would constitute work which was not carried out in a proper and proficient manner. There was no evidence from any expert before the original Tribunal that in his experience such a warning is expected and part of good building practice. The original Tribunal made no particular findings in relation to this issue, but in any event I find that it was not open on the evidence to make a finding of liability against the applicant in respect of a failure to warn.
I therefore find that there was no evidence before the original Tribunal on which it could have found that the relevant regulated building service had not been carried out in a proper and proficient manner or which was faulty or unsatisfactory.
Further, I do find that if the decision in respect to complaint item 7 was left unreversed that there would be a substantial injustice suffered by the applicant. I make this finding because I accept the applicant's submissions that the decision will have a far reaching impact on it.
Therefore the application is successful and leave to review is granted.
Orders
The Tribunal makes the following orders:
1.The applicant is granted leave to review the decision of the original Tribunal in respect of complaint item 7.
2.The matter is listed for a directions hearing at 12.30pm on 21 August 2018.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS C WALLACE, SENIOR MEMBER
8 AUGUST 2018
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