Quilkey v Tractile Combined Pty Ltd - [2023] QDC 204

DISTRICT COURT OF QUEENSLAND

CITATION:

Quilkey & another v Tractile Combined Pty Ltd & others [2023] QDC 204

PARTIES:

STEVEN ROBERT QUILKEY AND YUKIKO NOZAKI
(Plaintiffs)

v

TRACTILE COMBINED PTY LTD ACN 627 772 212
(First Defendant)

v

TRACTILE PTY LTD ACN 142 809 381
(Second Defendant)

v

JASON DEAN PERKINS
(Third Defendant)

v

TRAC GROUP HOLDINGS PTY LTD ACN 115 007 540
(Fourth Defendant)

FILE NO:

BD No. 794/21

DIVISION:

Civil

PROCEEDING:

Claim

ORIGINATING COURT:

Brisbane District Court

DELIVERED ON:

21 November 2023

DELIVERED AT:

Brisbane

HEARING DATES:

13, 14, 15, 16, 17 and 27 February 2023

JUDGE:

Porter KC DCJ

ORDERS:

1.     Judgment is given for the plaintiffs against the first and second defendants for $177,645;

2.     Judgment is given for the plaintiffs against the first, second and fourth defendants for $203,274.88;

3.     The claims against the third defendant be dismissed; and

4.     The Court will hear the parties as to costs and the form of any other orders which might be required to give effect to these reasons.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY– where the defendants carried on a business supplying and installing roofing products – where the plaintiffs engaged either the first defendant or the first and second defendant to supply and install a roof for their property – where the roof contained a solar power collectors – where the solar collection system included a system that used water to cool the solar panels, and thereby increase their efficiency – where, as part of the system, the water would be heated by the solar panels and the roof – whether the defendants’ roofing system required WaterMark certification as a result of a potential risk of contamination of drinking water – whether the failure to obtain WaterMark certification was a breach of the parties’ contract

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – where the roof was painted with a paint that was not safe, and was not certified as safe for the collection of drinking water – whether the defendants’ failure to use paint that was safe, and certified safe, for the collection of drinking water was a breach of the parties’ contract

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where the defendants were not licensed to carry out the building works under the contract – where the plaintiffs are entitled to restitution of the amounts paid under the contract under s. 42 of the Queensland Building and Construction Commission Act 1991 (Qld) – where the plaintiffs also claim damages as a result of breaches of the parties’ contract and in negligence and under the Australian Consumer Law – whether and how the restitutionary sum paid under the QBCC Act must be taken into account in assessing damages

LEGISLATION

Competition and Consumer Act 2010 (Cth) Sch 2

Corporations Act 2001 (Cth)

Queensland Building and Construction Commission Act 1991 (Qld) ss 42, 42B, 43, 43A, 51 and 51A

CASES

Body Corporate for Ocean Pacifique v Pugliese [2023] QCA 129

County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193

Cook’s Construction Pty Ltd v SFS 007.298.633 Pty Ltd (2009) 254 ALR 661

Marshall v Marshall [1999] 1 Qd R 173

O’Connor v SP Bray Ltd (1937) 56 CLR 464

Rankin v Scott Fell & Co (1904) 2 CLR 164

Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196

Williams v Stone Homes Pty Ltd [2014] QDC 64

COUNSEL:

P Travis for the Plaintiffs

S Hogg for the Defendants

SOLICITORS:

Aitken Whyte Lawyers for the Plaintiffs

Celtic Legal for the Defendants

Contents

SUMMARY

THE FACTS

The parties
The property
The Tractile roof
A Tractile roof for the house
Work under the Tractile contract
Delay in obtaining a Form 21

Overview
The WaterMark certification
The structural and installation certification issues
The SRRC’s position from mid-2020

The Fraser-Lever report
After practical completion

THE WITNESSES

The plaintiffs
Mr Sander
Mr Perkins
Mr Terpstra

THE INTENDED USE ISSUE

THE RESTITUTIONARY CLAIMS

Breach of s. 42(1) QBCC Act
Restitutionary claim
Plaintiffs can sue on the Tractile contract

THE TRACTILE CONTRACT

Proper construction

The parties to the contract
Certification as safe to collect drinking water

Breach of contract: tiles not certified for collection of drinking water
Breach of contract: WaterMark certification

Context
The issue
WaterMark certification was required

Breach of contract: Failure to supply and install hardware
Damages for breach

Summary of heads of damage
The rectification damages
Loss of use of the house
Conclusion on damages

LIABILITY OF TRAC GROUP AND TRACTILE P/L: ACL

Trac Group
Tractile P/L

NEGLIGENCE

BREACH OF STATUTORY DUTY

Summary
Pleaded Case

CONCLUSION

SUMMARY

The plaintiffs contracted for the installation of an integrated solar roofing system called the Tractile roof system. They allege that the Tractile system was not certified safe for collection of drinking water and not certified for use in heating hot water for domestic use. They allege that as a consequence the first and second defendants breached the contract. They also allege that those circumstances gave rise to damages against the first, second and fourth defendants under the Competition and Consumer Act 2010 (Cth) Sch 2 (ACL). They also allege that none of the defendants held the necessary licence to carry out the work under the contract.
The plaintiffs claim recovery of funds paid under the contract, as well as damages for the cost of removing the Tractile roof and installing a roof which could safely collect rainwater for drinking, damages for loss of use their new house until the new roof was completed and damages for distress.
The defendants’ contend that no legal obligation arose to deliver a system which was safe for the collection of drinking water and that the Tractile system otherwise did not require any certification for its solar water heating system. They do, however, concede that no relevant building license was held by the parties to the contract and that the plaintiffs are entitled to restitution of the funds paid under the contract. No counterclaim for restitution was properly advanced.
For the reasons which follow, I find that the plaintiffs are entitled to damages in the amount of $203,274 for breach of contract against the first and second defendants and to damages of the same amount for breach of warranty under the ACL against the first, second and fourth defendants. I find the plaintiffs are also entitled to restitution of $177,645 from the first and second defendants. I dismiss the claim against the third defendant.

THE FACTS

The parties

Mr Steven Quilkey owns 8 acres of land situated at 238-244 Long Road, Tamborine Mountain (the property). Ms Yukiko Nozaki and Mr Quilkey are married. The property is located in the Scenic Rim Regional Council (SRRC) area.
The first defendant, Tractile Combined Pty Ltd (Tractile Combined) and the second defendant, Tractile Pty Ltd (Tractile P/L) are companies associated with the supply and installation of Tractile products. The fourth defendant, TRAC Group Holdings Ltd (Trac Group) owns 67 of the 100 shares in Combined and all the shares in Tractile. The third defendant Mr Perkins and Mr Swibertus “Bertio” Terpsta have been directors of Combined, Tractile P/L and Trac Group since at least 26 July 2018.

The property

In around the mid-1990s, Mr Quilkey was working as an airline pilot flying out of Singapore and Ms Nozaki was working as a diplomat representing the Japanese government. They met water skiing at Singapore’s answer to the Gold Coast, Sentosa Island. Mr Quilkey and Ms Nozaki married some 30 years ago. They had a mutual interest in climate change issues. They had frequently discussed retiring to live on acreage after many years in apartments in Asia. In 2001, they purchased the property. At the time they purchased the property, it was vacant apart from a shed. They planned ultimately to build and retire to the property.
They made some improvements to the property. They installed two 45,000 litre water tanks near the boundary. Those tanks were mostly underground, showing only one metre above the ground. That water was for domestic use and for watering. There was and is no mains water nor sewage at Tambourine Mountain. The property had a bore but it was unreliable and required frequent testing if it was to be used for domestic uses. The plaintiffs have never used bore water for domestic uses. They planted extensively to reforest the site. They also built a demountable cottage on the property.
Planning for building a house started in about 2016 or 2017, when Mr Quilkey began working one month on and one month off. In about 2017, Mr Quilkey and Ms Nozaki started the design and documentation process for their house. The design was developed initially by Ms Nozaki. It is fair to describe it as an impressive home. A building draftsman prepared building plans from the sketches (Mr Wotton of Tambourine Mountain Building Design) and an engineer was retained for structural work. Mr Darren Sander was selected as the builder based on his work on a local project. His building company was Remiche Pty Ltd.

The Tractile roof

The Tractile roof is designed to provide solar power, solar heated hot water, insulation and roofing integrated into a tiled roof which does not have a traditional solar array. Rather, the system integrates the photo voltaic modules into solar panel roof tiles which can be laid as part of the roof and integrated into the most convenient section of the roof for solar collection. The solar roof tiles are laid alongside ordinary Tractile roof tiles.
The solar roof tiles also incorporate piping which acts as a heat exchanger, cooling the solar tiles (and thereby improving their efficiency according to Tractile) and removing heat from the roof of the house. The water running through the pipes is heated and that solar heated water is used to heat water for use in the home. The solar heated water is not used directly. Rather, other water passes through metal coils located in a heat exchange tank filled with the solar heated water.
Accordingly, the Tractile roof can provide solar electricity and solar heated hot water. To make use of those outputs, specific hardware is required. For the solar power, an inverter is required and a battery may be added. To make use of the solar heated water, a heat exchange tank is required. In this case, a Rotex tank was to be installed.
A Rotex tank can accommodate different sources of water to be heated by contact via metal coils with the heated solar water in the tank. For the plaintiffs, the purposes for the water to be heated in the Rotex were underfloor heating, pool water heating and domestic hot water. Each source of water was to pass through a separate metal coil in the Rotex tank.
The two principal complaints about the Tractile roof system made by the plaintiffs in this proceeding relate to the paint used on the roof tiles and the solar heated water system:
(a)As to the former, the plaintiffs allege that the paint on the roof was not certified safe for collection of drinking water. This did not emerge as an issue until the defendants revealed that the paint used was not safe for drinking run off in an amended defence in November 2021.
(b)Prior to that time, the principal complaint was that the solar heated water system was not certified safe for use in heating water for domestic consumption.

A Tractile roof for the house

As part of the design process, the plaintiffs were looking for a solar power and heating solution. Mr Quilkey was interested in something other than the usual solar array on the roof and while searching came across the Tractile product.[1] On 10 September 2017, he sent an email inquiry to Tractile. After referring to the project to build the house and its location, Mr Quilkey wrote:[2]
…we are searching for roofing solutions. We are hoping to be “off-grid” and certainly as sustainable, yet stylish, as possible.
[1] For present purposes I will just refer to Tractile. I will deal with the individual entities and their place in the proceedings where required.
[2] Ex 1 – Email of 10 – 12 September 2017 (MFI A, Vol 1, Tab 10).
On 12 September 2017, Mr Terpstra responded providing “attached further information about Tractile The Smarter roof”.[3] Attached was a series of documents headed Tractile Eclipse which focused on particular characterises and features of the roof and the tiles. The first document has the subheading “Roof Features”. After introductory comments it sets out a table that relevantly provides:
[3] Ex 44 – Email from Berito to the Plaintiffs of 12 September 2017 attaching Tractile Eclipse documentation (MFI A, Vol 1, Tab 11).
Tractile Eclipse
Roof Features
…

Drink water

Safe

The Tractile Eclipse material is non-toxic and in combination with a drink water safe paint, rain water can be safely collected.

At about the same time, the third defendant (Mr Perkins) sent an email to the plaintiffs’ house designer Mr Wotton with detailed information about the Tractile product. This document was provided to the plaintiffs by Mr Wotton. The covering email from Mr Perkins described the documents as Tractile Product Posters. That description did not do justice to the detail included.[4]
[4] Ex 2 – Email of 12 September 2017 with Specification Attachments (MFI A, Vol 1, Tab 13).
Attached were four pages provided in .PDF format. They were designed to be viewed in hard copy in A0 size pages. It is evident that the reason for the large original sizing was that the four sheets showed, in actual size, the top and underside of the two kinds of tile supplied by Tractile.
The first and second pages show the front and back of a Tractile Eclipse Solar Roof Tile (the Eclipse solar tile). Across the top of the first sheet (which shows the front of the Eclipse solar tile) are images of the various different kinds of Eclipse roof tiles. Under that is a series of specifications and technical particulars of the Eclipse solar tile.
On the second sheet (showing the back of the tile), there is a banner across the top of the sheet showing diagrammatically the different formats for inclusion of the Eclipse solar tile in a Tractile roof. Under that appears the heading Frequently Asked Questions, with questions and answers given.
The third and fourth sheets show the front and back of a Tractile Eclipse Roof Tile (the Eclipse roof tile). The third sheet has the same banner showing the different styles of Eclipse tile. Under that banner is another series of specifications and technical particulars relating to the Eclipse roof tile. It relevantly provides:
(a)Under the heading “Roof Colours”:
A Tractile Eclipse roof is painted in factory or on site. Customers can select any colour as well as specialist coatings.
Tractile Eclipse material can withstand UV exposure, however, as with any product exposed to the sun long term UV damage can occur over time, but will be aesthetic and not structural.
Tractile parts are painted to maximise durability. Paint companies warrant their paint for 10 years to 40 years. For large orders UV additives and pigments can be included into the material. However, this alters the chemistry of the material and requires a customised product formula to maintain strength.
(b)Next to that text, are four circular colour swatches, including a dark grey called “Monument”;
(c)Under the heading “Materials”:
Tractile roof tiles are made from composite materials (fibre reinforced thermoset resin) that provide the following properties: lightweight, high-strength, high impact, resistance, fire retardant, non-toxic, non-electrically conductive and resistant to a wide range of chemicals.
Tractile is suitable for coastal areas within 100m of breaking surf and is rated to Bushfire Alarm Level 40 (BAL40).
The fourth sheet has the same banner of roof designs as the second sheet. Under that again are a list of “Certifications” including many Australian Standards. One Australian Standard specified is AS2049:2002, which concerns roof tiles. As will be seen, clause 4.6 of that standard requires the surface of roof tiles which collect rainwater to be non-toxic.
Thereafter is once again a series of Frequently Asked Questions which relevantly include:
Why is a Tractile roof different?
Tractile uses modern materials and technologies to provide a better functioning roof.
What are the functional benefits of a Tractile roof?
High performance roofing system
Installation is fast and easy
Lightweight construction
Low maintenance
Solar power for electricity and heated water
Connect to battery energy storage systems
Can Tractile be installed in high wind areas?
Yes. Tractile is designed for strength and its batten-hook system can withstand Category 5 cyclone (wind speeds over 380km/h).
Can Tractile be installed in bush fire areas?
Yes. Tractile has BAL-40 certification. This is the highest rating for residential buildings in bushfire prone areas.
Can Tractile be installed in coastal areas?
Yes. Tractile is made from a composite materials (sic) that are resistant to corrosion from salt water.
Can Tractile withstand hail stones?
Yes. Tractile is designed for strength. The non-solar tiles can withstand 65mm hailstones. The Eclipse solar PV glass can withstand 30mm hailstones.
Can a Tractile roof be walked on?
Yes. Tractile can safely withstand point loads of 250kg, which is equivalent to two people with tools.
Can thieves enter my house by lifting tiles on a Tractile roof?
No. Tractile is a secure roofing system with tiles held down by the ‘hook & batten’ fixing system. Unlike traditional riled roofs that allow thieves to easily lift tiles and gain access to the roof cavity and then enter the house.
Can Tractile parts be cut or drilled on site?
Yes. Tractile parts can be cut and drilled with standard tools as required.
Can a Tractile roof be used to collect rainwater for safe drinking?
Yes. The composite material is safe for drinking water collection. We work with Dulex who provide several non-toxic paint systems that are safe for rainwater collection.
[…]
Where is the Tractile roof made?
Tractile products are made in our manufacturing facility in Malaysia.
[5] Highlighting not in original
On the top left corner of the first and third sheet appears the following[5]:
The four sheets together contain detailed specifications for the Eclipse tiles (the specifications). They present as professionally prepared and comprehensive. In my view, it is fair to characterise those documents as specification for the Eclipse tiles. The following is objectively communicated by the specification:
(a)The Tractile roof can be safely used to collect rainwater for drinking.
(b)The Tractile roof tiles are safe for collecting rainwater for drinking because they are constructed of material that is safe for drinking water collection and they are painted with Dulux paint which is safe for that purpose;
(c)The Tractile roof meets the requirements of AS2049:2002;
(d)The Tractile roof tiles can be painted in any colour including, relevantly a dark grey paint described as Monument;
(e)Reading (a) to (d) together, the specification objectively communicates that the roof can be painted any colour including Monument and retain its safe-drinking water status.
In my view, the specification cannot be read as objectively communicating that a Tractile roof will only be safe to collect drinking water if a customer chooses a non-toxic paint. Mr Quilkey gave evidence that he reviewed the specification and particularly noted the comments as to safety for collecting drinking water. He said this was important because (TS1-17):
..we’d already installed two 45,000 litre tanks for rainwater collection, because that is what we needed for domestic uses; for drinking, bathing, et cetera. So if the water that came off the roof was undrinkable, well, it negates the whole - you know, it negates everything we’d done, and where would we get our water from? You know, get bottled - bottled water for the rest of our life wouldn’t be much - much fun, and besides, the council would never approve the place anyway.

In that regard, also relevant is the content of the website at relevant times leading up to entry into the contract. On January 16, 2018, the website (the Website) under the folder “/faqs” stated the following:
Can a Tractile roof be used to collect rain water for safe drinking?
Yes. The composite material is safe for drinking water collection. We work with Dulux Paints who provide several non-toxic paint systems that are safe for rainwater collection.
The plaintiffs had a meeting with Jason Caruana, the sales manager for Tractile, on or about 23 October 2017. Nothing of substance appears to have occurred at this meeting. However, by this time, the plaintiffs had decided to proceed with the Tractile roof because they saw it as a good technical and aesthetic solution to the questions of hot water, solar power and water collection. Their consultants continued to work towards incorporating a Tractile roof into the construction of the house. One decision made early was that the roof would be dark to minimise the visibility of the Eclipse solar tiles. Mr Quilkey gave that evidence but it is confirmed by contemporaneous email correspondence sent to Mr Wotton on 15 November 2017.[6]
[6] Ex 6 – Emails of 1 and 15 November (MFI A, Supplementary Bundle, Tab 6).
Also on 23 October 2017, the plaintiffs provided Tractile with the then current design drawings produced by Mr Wotton and on 17 November 2017, Tractile provided a design for Tractile tiles and roof take-off based on those plans.[7] In December 2017, the design drawings were at a stage where they could be provided to Mr Sander to begin working up the price for the works.
[7] Ex 7 – Tractile Plans (MFI A, Supplementary Bundle, Tab 7).
The Development Approval was granted by SRRC on 16 May 2018, including approved plans for the house. An amended version was produced in September 2018 with minor changes. Each iteration of the plans contemplated a Tractile roof as seen on each version of the roof frame plan. That drawing also include these notes “Connect to water tanks with RW heads. Minimum water storage 45,000 lt”.[8] There was no suggestion at trial that the approved plans differed materially from the version provided initially to Tractile in October 2017, nor that they changed materially thereafter.
[8] Ex 9 – Plans of 12 December (MFI A, Supplementary Bundle, Tab 4) (see the last drawing B17-211.8).
On 27 November 2018, the plaintiffs entered into a written contract with Remiche for the construction of the house (the building contract).[9] The building contract was a bespoke agreement, though it incorporated by reference the then extant version of the “BSA Agreement” (presumably the QBCC standard form new home construction contract). None of the terms of the “BSA Agreement” were in evidence.
[9] Ex 16 – Master Agreement dated 27 November 2018 (MFI A, Vol 2, Tab 30).
The building contract provided, broadly, for a lump sum management fee for the builder of $225,000 based on a cost estimate in the contract of $1.36m, (excluding the management fee). It appeared to contemplate many of the “subcontracts” for the work to be entered into by the owners directly. The building contract also contained a construction schedule which contemplated earthworks starting October 2018 and a “final walk-through inspection” on 30 November 2019. The construction schedule contemplated a Form 21 Certificate of Occupancy being obtained prior to that date. It did not include a Date for Practical Completion. The building contract assumes substantial co-operation between the parties and reflects trust and confidence between them.
The cost estimate in schedule 3 has an item for roofing which identifies Tractile as the subcontractor/supplier and an estimated cost of $165,000. It is unclear on the evidence when the estimate was provided by Tractile, but it is reasonable to assume it was provided at some stage prior to October 2018.
It appears that prior to October 2018, the plaintiffs were dealing with Mr Caruana or Mr Terpstra at Tractile. On 25 October, Mr Perkins enters the fray. He sends the plaintiffs an email telling them Mr Caruana had left Tractile and that “due to the size and importance of” the project, Mr Perkins wanted to handle it personally. Mr Perkins introduced himself as a director. There followed an exchange of emails on technical issues which resulted in Mr Perkins visiting the site on about 8 November 2018. The events of that meeting are contested. It is sufficient to note that Mr Perkins met Mr Quilkey and inspected the plans, the site and the property.[10] They also must have had some technical discussions about some of the hardware required to make use of the Tractile roof, including the Rotex tank and the inverter and batteries because on 12 November, Mr Perkins sent an email with information about those items.
[10] See TS1-35 and TS2-51 2-52 and 2-54. See also Mr Sander at TS2-95, but he was mistaken as to the period of time between when he first saw Mr Caruana on site and the first time he saw Mr Perkins on site (the period being 12 months rather than 6).
After that meeting, Mr Perkins informed Mr Quilkey about a Tractile roof and supporting system of a similar kind to that contemplated for the house being built in Adelaide and asked Mr Quilkey if he wished to visit and inspect. Mr Quilkey agreed. In late November 2018, Mr Quilkey and Ms Nozaki along with a friend went to inspect that house. Mr Perkins was present along with about six tradespersons working on the roof.
The allegations in the amended defence filed 25 November 2021 about what was discussed at this meeting were hotly contentious in the pleadings: see paragraph [92] and went to the heart of the Tractile defence on the drinking water issue. However, the defendants’ case did not come up to proof (see paragraphs [112] to [115] below). Despite the terms of the defence, it is now uncontentious that:
(a)There was a discussion in Adelaide about the colour of the paint on the tiles being used and likely the name of that colour, Monument, was raised. The plaintiffs liked the colour used and told Mr Perkins that was their colour choice; and
(b)There was general discussion about the system being installed and the specifications for the solar electricity and solar hot water output for the house.
Following the Adelaide meeting, the plaintiffs received revised options for quotations from Mr Perkins with the particulars of two proposed systems for the house as follows:
Thank you again for visiting Adelaide and seeing the installation at Marino.
As discussed onsite we are finalising a quote for your roof including:
·10kw PV panels
·1 x 10kw 3 phase SOLAX inverter
·2 x 6.3kwh TRIPLE POWER Battery modules (12.3kw hour Battery Storage)
·500 litre ROTEX tank with 14.4kw heating element, hydronic loop, pool heating loop, domestic hot water loop.
We can now do a second additional quote for:
·20kw PV panels
·2 x 10kw 3 phase SOLAX inverter
·2 x 6.3 kwh TRIPLE POWER Battery modules (12.3kw hour Battery Storage) [**Do you want more batter storage with larger PV?**]
·500 litre ROTEX tank with 14.4kw heating element, hydronic loop, pool heating loop, domestic hot water loop.
I have asked Bertio to be involved in preparing and issuing the new quotes and we expect to provide these shortly.
On 4 February 2019, Tractile provided a quotation for the former option. That quotation was accepted in writing by Mr Quilkey on 6 February 2019. It is not in dispute that this gave rise to a binding contract in writing (the Tractile contract). The issues in dispute relate to the terms of the contract and the Tractile entities which are parties to it.
The Tractile contract tendered comprises a six-page bespoke quotation (the quotation) along with 3 printed pages of terms and conditions (the standard terms).
The quotation had the following header[11]:
[11] Highlighting not in original
The logos of Tractile and Combined Roofing Australia appear on every page of the quotation and standard terms. The stylised “T” logo is owned by Trac Group.[12]
[12] TS 5-4.24.
The quotation relevantly provided:
(a)By its introductory words:
Dear Steve and Yuki,
Thank you for your request for formal quotation for Tractile, the designer roofing solution that incorporates electricity, hot water and lightweight composite roof tiles into your roof structure.
Your project at 238 Long Road Tamborine Mountain, QLD 4272 is an exciting opportunity to include the Tractile solar roof…
A Tractile roof is the perfect solution…
[emphasis added]
(b)Under the heading “Performance”:
…
Tractile’s innovative technology circulates water through the solar tiles, cooling the system…This technology delivers the additional benefit of pre-heated hot water, adding to the pay back on your roof…
The pre-heated hot water is boosted for your domestic consumption and can also be used for in-floor and pool heating.
(c)Under the heading “Your Requirements”:
It is our understanding you require quotation for the supply and installation of Tractile solar roofing system. Based on past discussion we understand you require in short:
·Supply and install 703 square meter Tractile roof with the following options:
·10.0 kWp integrated Tractile solar roof tiles
·12.6 kWh battery system
·500 litre ROTEX tank with 14.4 kw heating element, hydronic loop, pool hearing loop, domestic hot water loop.
(d)Under the heading ‘Scope of Work & Contract Price”:
Your roofing project includes supply and install of the Tractile roofing system:
·To supply and install Proctor breathable sarking to the entire roof area.
·To supply and install custom made galvanised battens as required.
·To supply and install Tractile Eclipse roof tiles or similar detail to the entire roof area.
·To supply and install Tractile Eclipse Ridge tiles or similar detail as required.
·To supply and install Tractile Eclipse Barge or similar detail tiles as required.
·To supply and install Tractile Eclipse Hip tiles or similar detail as required.
·To supply and install Tractile Eclipse Endcaps or similar detail as required.
·To supply and install all galvanized fixings as required to complete the project to standards.
·To supply and install Tractile Eclipse PV roof tiles with built in water heating system to achieve the required solar PV capacity of 10.0 kWp.
·To include copper U link pipe and Shark Bite hot water connectors as required.
·To charge tiles with water and pressure test.
·To connect solar electrical cables and MC4 connectors.
·To supply and install premium 3 phase hybrid inverter with remote metering (see brochure attached) and battery system with 12.6 kWh storage.
·To supply and install 500 litre ROTEX tank with 14.4 kw heating element, hydronic loop, pool heating loop, domestic hot water loop.
·To remove all related debris from site.
PRICE
Sub-Total$213,758.81
Discount for Marketing -$28,758.81
Total$185,000
GST$18,500
Total Price$203,500.00 (Contract Price)
The Tractile roof will be installed with our national Tractile installation partner Combined Roofing Australia Pty Ltd. Combined Roofing has 30+ years experience in the roofing industry including recently reroofing St Mary’s Cathedral in Sydney.
Please note, site preparation requirements prior to Tractile installation:
·60spm meter (sic) flat and secured on site storage area for 40 pallets with Tractile parts upon delivery and during installation.
·Storm water protection for roofs with a pitch of less than 10 degrees.
·For new builds sufficient DC wires to be wired in conduit as per cabling requirement and roughed in from meterbox location to the ridge of the solar roof area. (Note you have provisioned future expansion of PV system for additional 10.0 kWp on North wing and additional 20.0 kWp on Southern wing.
·For new builds sufficient insulated copper piping for flow and return lines of solar thermal hot water from roof to hot water tank location(s).
Payment Schedule (schedule 1):
1^st payment: $1000.00 design and/or site visit fee. This fee has been waived.
2^nd payment 10% deposit to confirm your order and book installation.
3^rd payment: 70% due prior to materials arriving onsite.
4^th and final payment of outstanding balance due on completion of works.
Invoices will be issued for each payment.
(e)
[13] Highlighting not in original
The following page has the heading “Acceptance Form”. As executed it appeared as follows[13]:
The standard terms relevantly provided by clause 4:
(a)This quotation may be accepted by the Client completing and returning to CRS within the 30 days period referred to in above 1. Period of Quotation and Acceptance Form.
(b)Subject to and conditional upon the Client completing and returning to CRS within the 30 days period referred to in above 1. Period of Quotation and Acceptance Form and CRS accepting the Acceptance Form evidenced by the signature of a director of CRS endorsed upon the Acceptance Form, a Contract shall exist between CRS and the Client and the following terms and conditions shall apply to the Contract between CRS and the Client (Contract Terms and Conditions).
Under the heading Contract terms and Conditions, the standard terms relevantly provided:
(a)By clauses 1 to 3:
1. Plans and specifications
1. All Plans and Specifications for work to be done under this contract, including any variations to those Plans and Specifications, are taken to form part of this contract.
2.Any agreement to vary this contract, or to vary the Plans and Specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract.
2. Quality of construction
All work done undertaken (sic) by CRS under this contract will comply with:
1. (a)The Building Code of Australia to the extent required under the Environmental Planning and Assessment Act 1979 (including any instrument made under that Act);
(b)all other relevant codes, standards and specifications that the work is required to comply with under any law;
(c)the conditions of any relevant development consent or complying development certificate and any construction certificate.
2. This contract shall limit the liability of the CRS for a failure to comply with (1) if the failure relates solely to:
(a)a design or specification prepared by or on behalf of the Client or provided to CRS by the Client (but not by or on behalf of CRS), or
(b)a design or specification required by the Client, if CRS has advised the Client in writing that the design specification contravenes (1).
3. Payment by Client
The Client must pay the Contract Price in the manner shown in the Payment Schedule…
(b)By clause 11, relevantly:
11. Warranties
…
2. CRS warrants that:
(a)the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;
(b)all materials supplied by CRS will be good and suitable for the purpose for which they are used and, unless otherwise stated in the contract, those materials will be new;
(c)the work will be done in accordance with, and will comply with, the Home Building Act or any other law;
(d)the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time;
(e)if the work consists of the construction of a dwelling, the making of alterations or additions to the dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling;
(f)the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the Client expressly makes know to CRS or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of CRS, the particular purpose for which the work is required or the result that the Client desires the work to achieve, so as to show that the Client relies on CRS’s skill and judgment.
(c)Under the heading “Interpretation and Definitions”, relevantly:
CRS means Tractile Combined or its appointed contractor(s);
…
Payment Claim means a written claim for payment by CRS pursuant to clause 3;
…
Plans means the Plans particularised in Schedule 1 under the heading Contract Documents;
Specifications means the Specifications particularised in Schedule 1 under the heading Contract Documents.
There is a footer located on each page of the quotation and the standard terms which states:
PLEASE READ THIS QUOTATION AND CONDITIONS CAREFULLY AS ONLY THE WORKS LISTED WILL BE CARRIED OUT.
ACCEPTANCE OF THIS QUOTATION IS ALSO AGREEING TO THE TERMS AND CONDITIONS OF TRACTILE COMBINED PTY LTD
The Tractile contract:
(a)Does not include any definition or document providing meaning for the words “Tractile Eclipse roof tile”, “Tractile Solar Eclipse PV roof tile” nor any other described roof tile;
(b)For the purposes of the definition of Plans and Specification, has no heading “Contract Documents” in Schedule 1 of the contract (which refers only to the Payment Schedule), nor is there any Plans or Specifications attached to the Tractile contract; and
(c)Has no specific definition in the Tractile contract of “Tractile Solar roofing system”, “Tractile roofing system”, “Tractile solar roof”, “Tractile roof” or “Tractile Solar Solution” although some characteristics can be inferred from the text of the quotation.
The entities on the Tractile side of the Tractile contract are variously described as:
(a)Tractile (see extract from quotation headed “Performance”);
(b)Tractile Combined Pty Ltd (see heading to quotation, footer to quotation and definition of CRS in the standard terms);
(c)“Combined Roofing Australia” (see logo heading on each page);
(d)Combined Roofing Australia Pty Ltd described as “our national Tractile installation partner” in the quotation under the heading Price; and
(e)Tractile Pty Ltd described as “Contractor” in the Acceptance Form.

Work under the Tractile contract

Much of the evidence from the plaintiff’s side as to the performance of the work under the Tractile contract and the difficulties of obtaining the Form 21 Certificate of Occupancy comes from Mr Sander. The following findings about events relating to those matters are based substantially on his evidence and the documents to which he refers. For reasons I explain at paragraph [110] below, I accept his evidence as credible and reliable.
The construction of the house seems likely to have begun in about March 2019, perhaps a little earlier. By June 2019 at the latest, the house was ready for the commencement of the roofing works under the Tractile contract.
The Tractile contract contained no fixed construction period. However, the Tractile contract required Tractile to perform the work within a reasonable time. A reasonable time for installation of the roof can be broadly inferred from a statement on the Tractile website which indicated that installation of a new roof of 200m2 takes about 2-3 days with a “skilled three-person crew”. Even doubling the time for installation to allow for the novel aspects of the house results in a week or two.
Although precise dates are unclear, the time taken to install the Tractile roof was much longer than that. It appears not to have been completed until about October 2019, many weeks after the work began. Mr Sander was present every day of the works on the house. I accept his description of what occurred during this period of delay. The work was delayed for at least two principal reasons.

First, there was no skilled three-person crew carrying out the installation. Rather, the installation process was a shambolic both practically and from a compliance perspective. The work was done primarily by a single worker, described in the evidence as Jedd.[14] From time-to-time Mr Perkins and Mr Terpstra came to site to assist Jedd. On an early occasion, Mr Sander asked Mr Perkins and Mr Terpstra whether they had a white card. They said they did, but did not have it with them. They returned the next day with white cards issued that day. The inference that Mr Perkins and Mr Terpstra had not been frank when saying they had a white card is a reasonable one.
[14] Seemingly, Mr Jedd Borg appears to have provided invoices to Tractile for the work of installation. No criticism of Mr Borg was made at trial nor is any intended by these reasons.
On another occasion, Mr Sander explained:
I now recall … they employed a backpacker from Finland that couldn’t speak English that owned nightclubs in Greece. It was such a bizarre story, and he said he wasn’t getting paid but he hoped to get a job with them long-term. But he only lasted a week.
Mr Perkins and Mr Terpstra would come from time to time for about an hour to assist. Mr Sander saw them up on the roof doing work and queried whether Tractile was licensed for such work. Mr Sander told Mr Perkins to leave the site until the licensing issue was resolved.
About a week later, a Jason Sexton appeared at the site and told Mr Sanders he would be installing the roof under his license. However, Mr Sander did not see Mr Sexton again. The work was completed largely by Jedd. Some of the later plumbing and electrical work to connect the water and electrical output of the roof was apparently done by other tradespersons, presumably under their own licenses.
By the time of the trial it was conceded by the defendants that no-one involved with the installation of the roof had a license to undertake to carry out the work under the Tractile contract was the work actually done by a person with a licence to carry out that work.[15]
[15] Bizarrely, at one point the defendants sought to rely on an invoice for work done under the Tractile contract as part of the failed quantum meruit counterclaim. That invoice was for ‘renting’ Mr Sexton’s QBCC license. It is unclear to me how a person can lawfully lease another person’s QBCC license.
Mr Perkins explained in evidence how it could have happened that work was unlicensed when Tractile’s daily business was to supply and install Tractile roofs and related plant and equipment. He said the failure to be properly licenced fro this contract was the result of a misunderstanding with a person named Mr Andrew of Combined Roofing and that Mr Andrew referred him to another roofer, being Mr Sexton. Mr Sexton did not undertake the work or supervise it. The work was unlicensed.
No claim is advanced specifically for delay in performance of the installation of the roof. However the cavalier conduct of Tractile and its officers in relation to performance of the work and in relation to licensing obligations gives one cause for concern about their reliability on other matters.
Second, Mr Sander gave evidence that there were numerous shortcomings in the design of the Tractile roof tiles for installation on a roof with the pitch and design of the roof of the house. While difficulties often arise during construction, particularly in unique housing designs, in my view the shortcomings were significant and reflected a failure by Tractile properly to design the Tractile roof for the roof design of the house. This reflects poorly on Tractile’s capacity properly to design and carry out the high technology solution it offered, at least in this case.
While the roof was likely installed, at the latest, by the end of October 2019, the remaining work was problematic. That work was the supply and installation of the inverter and batteries and the Rotex tank. It is common ground that none of these items were supplied or installed by Tractile. The circumstances in which this occurred, and it consequences in law, are disputed. I deal with them from paragraph [202] below. What is uncontentious is that the plaintiffs arranged supply and installation of the Rotex tank themselves and later installed a quite different solar power system after the Tractile roof was removed:
(a)The Rotex tank was supplied and installed by a third-party supplier in about January 2020, along with a heat pump to boost its capacity. It seems that Mr Terpstra advised that the Rotex tank would not have sufficient heating capacity to manage all the contemplated heating tasks of under floor, pool and domestic hot water.[16]
(b)The inverter was acquired in about September 2020 as part of a completely different solar power solution adopted by the plaintiffs. That solution was a ground mounted solar array. The cost of acquisition and installation of that alternative system (including inverters) was $25,000 incl. GST.[17] This included installation of two 10kW inverters. The Tractile contract provided for one 10kW inverter, consistent with the decision seemingly made by the plaintiffs prior to entry into the Tractile contract. The plaintiffs also chose not to install the batteries provided for in the Tractile contract.[18]

Delay in obtaining a Form 21

Overview

[16] TS 1-77.

[17] Ex 23 – Invoices from No Shots Electrical dated 30 September 2020 and 11 November 2020 (MFI A, Vol 4, Tab 166, Pages 1148 and 1150).

[18] TS 1-77.

While Tractile’s actual work on site was all but finished by about October 2019 (given the roof was finished and the rest of the Tractile contract never completed), that was not the end of the disputes. It was just the beginning of even more significant disputes over certification of the work done under the Tractile contract.
By February 2020, the work on the house was substantially completed. By October 2020 at the latest, all certifications necessary to obtain the Form 21 Certificate of Occupancy were held by Mr Sander except certifications relating to the Tractile roof. SRRC were not satisfied that the Tractile roof was properly certified in two broad respects:
(a)SRRC was not satisfied that the Tractile roof met necessary structural and installation standards; and
(b)SRRC was not satisfied that the Tractile roof meet necessary standards as a source of water supply to the Rotex tank.
As will be seen, these issues were ultimately resolved in practice by the removal of the Tractile roof and the installation of a new roof in November 2022. A Form 21 issued on completion of that work on 30 January 2023.
At the time of these events, SRRC remained a Council where applicants continued to deal directly with the building and plumbing inspectors of the Council. Mr Sander was the applicant for the building approval and dealt directly with the Council for that purpose. It was a role he was very familiar with, having done it since 1994.

The WaterMark certification

The first dark cloud on the certification horizon appeared on 4 November 2019. At that time the Rotex tank and booster tank had not been installed but it appears that the solar heated water system had been installed. Amongst other things, Mr Rooks, the head of the SRRC’s planning department, had informed Mr Sander that it was seeking a Form 7 from a licensed solar installer plumber for the Tractile solar tiles and that WaterMark certification of the Tractile solar tiles was sought by the SRRC (a requirement Mr Rooks repeated on a number of occasions to Mr Sander). Mr Sander forwarded the request to Mr Terpstra.
Mr Terpstra responded that the circulating water in the Tractile solar water heating system did not come into contact with “mains water” (meaning, in context, domestic use hot water) so a plumber was not required for connection of that system. Mr Terpstra said the connection of the Rotex tank is the work which required a plumber and WaterMark certification. It appears that the Rotex tank did have WaterMark certification.
That response did not satisfy SRRC. Mr Sander communicated the substance of their response on 18 November 2019. He relevantly observed in an email that day:
And as earlier, the SRRC require confirmation that the integrated solar panels have Approved Water marks??? The reason being if they don’t, and the panels fail, water runs into the gutter, and with the variable warm water temperature, it has a high probability of Legionnaires Disease that will contaminate the water tanks, so then this whole roof section will have the Storm water diverted into engineered rubble pits underground.
And, the council are insisting that this whole system should be installed as notified by a Licenced Solar Accredited Plumber. Yes, I know you sent me a picture of the layout of a particular tile set up, But the SRRC want to see the Actual Pictures of the installation of components in this build. Please forward them.
With regard to the FORM 7, the SRRC will require one for all work Associated with Tractile, including the work already installed. SRRC request.
Mr Sander confirmed in evidence that he was communicating matters stated to him by Mr Rooks of SRRC.
Mr Terpstra relevantly replied on 19 November:
The solution to the potential Legionnaires Disease problem you raise is already designed into the system. Tractile does not have WaterMark Certification because we do not design systems that connect with mains or the potable water supply. We ensure the boundary equipment is WaterMark Certified and stipulate it must be connected to mains by a licenced plumber. The plumbing connections on roof do not require a plumber under national codes. Our agreements make clear we exclude plumbing work.
There was a good deal more correspondence between Mr Sander and Mr Terpstra along the same lines.
The correspondence to this point involved hearsay assertions by Mr Sander as to the SRRC’s position, though no objection was taken to the tender of emails on that basis. I did not identify anything in writing from the Council at that time. There was, however, a meeting in late November or early December 2019 at the site. Those present were Ms Nozaki, Mr Sander, Mr Terpstra and Mr Rooks. Ms Nozaki and Mr Terpstra give differing accounts of this meeting.[19] However, the common thread is that Mr Rooks directly expressed his view that the Solar roof tile required WaterMark certification in respect of the heated solar water system. Whether he was firm in that view or undertook to reconsider it at the meeting, it is apparent he became confirmed in that view by 18 December 2019, as expressed in his email of that date. His view was based on advice received from the Australian Building Codes Board (ABCB) who communicated, relevantly:[20]
Thank you for your WaterMark enquiry.
Your understanding is correct that solar collectors are WaterMark certified to the requirements of AS 3489. This standard calls up AS/NZS 2712 Solar and heat pump water heaters – Design and construction. The Scope of this Standard specifies performance-based requirements for the design and construction of both components of solar and heat pump hot water supply systems, and complete systems, for household premises and for commercial and industrial installations comparable with household installations, intended to deliver drinking water of acceptable quality. Systems may be supplied as packaged systems comprised of a complete set of matched components supplied from one source, or may be custom-built by assembling components from various sources on-site. Therefore, as the Scope includes system components, this means solar collectors are captured under WaterMark Certification.
You are also correct that licence 020095 does list any solar collector products and that a WaterMark certificate does not exist for Tractile Solar PV Roof Tiles. Therefore the Tractile Solar PV Roof Tiles are not authorised for use in a plumbing and drainage installation.
[19] See TS 3-87 and TS 5-33.
[20] Ex 55 – Email chain between Darren Sander, Plaintiffs and Defendants from December 2019 (MFI A, Vol 3, Tab 114).
That information was forwarded by Mr Sander to Mr Perkins. On 19 December 2019, Mr Perkins suggested that the ABCB had communicated a different view in the past and indicated he would make inquiries about that position separately with the ABCB. Mr Perkins made a proposal of various alternatives if ABCB confirmed its position.
It is unnecessary to track through the subsequent correspondence in this matter and the contentious evidence about whether the plaintiffs co-operated in developing solutions or they did not. Ultimately, the issue of whether the heated water system incorporated into the Solar roof tiles required WaterMark certification was never resolved prior to the removal of the Tractile roof in late 2022.[21] If Tractile was and is correct that such certification was not required, then it is not at fault (in the broad sense) for not supplying a product that did not have it. If Tractile was not and is not correct about that matter, it was at fault for supplying a product without WaterMark certification.
[21] The Fraser-Lever consulting engineers report obtained in September 2021 and referred to in paragraph [83] below did not address plumbing compliance issues so far as I can tell.

The structural and installation certification issues

There was evidence about other certification issues which arose with the Tractile roof between November 2019 and the removal of the roof in about November 2022.
One of those issues related to whether the Tractile roof tiles met the requirements of the National Construction Code (NCC) for a roofing product. There was a great deal of correspondence back and forwards about whether the roof tiles met those requirements.[22] Tractile provided a series of Form 15s to SRRC from about 19 December 2019 signed by an engineer called George.[23] Tractile relied upon these Form 15s as constituting certification of compliance with the NCC. The Form 15s were consistently rejected by SRRC as failing properly to address the NCC requirements. Tractile continued to assert that the forms did address the requirements until they ultimately ceased relying on George and instead retained Fraser-Lever engineers to advise on compliance as explained below from [83].[24]
[22] See SRRC emails at Exhibit 56.
[23] See TS 5-10 in relation to George.
[24] Ex 56 to 61.
Although the point did not loom large in the correspondence, there was also an issue in relation to certification of installation of the roof. A Form 16 was provided signed by Mr Sexton (the Mr Sexton who did not attend the site or do the installation it seems). Council queried that on the basis that the building licence referred to in the Form 16 was not active. While it appears this was ultimately resolved, one wonders how Mr Sexton could have given such a certification considering Mr Sander’s evidence about his attendance at the site (or lack thereof rather).

The SRRC’s position from mid-2020

On 18 June 2020, and despite Tractile’s various submissions, the SRRC wrote to Mr Sander stating its position that a Form 21 could not issue for the house for the following reasons related to the Tractile roof:[25]
(a)The Solar roof tiles required WaterMark certification for use in plumbing and drainage installation;
(b)The Form 16 from the installer (Mr Sexton was insufficient because the license number on the form was not active; and
(c)The Tractile roof tile was not demonstrated to meet NCC standards for a roofing material.
[25] Exhibit 68; There was also an issue raised about the need for an amended plan relating to framing and roof trusses which Mr Sander said had already been addressed. I accept his evidence on that matter: TS3-73 to 74
Further, that letter also raised the following matter:
Council has not received testing approval or an Alternate Solution report for the use of the Tractile product to determine that the roof tile is suitable for use, or its suitability (compliance with AS/NZS4020) to be installed on a roof which is capturing water for human consumption (rainwater harvesting).
So far as I can determine, this is the first time that the Council specifically raised the suitability of the Tractile roof for capturing drinking water in writing. It was an ominous sign for the future, though up to this point the question of the suitability of the roof to collect rainwater had not specifically arisen.
Those same issues were subsequently identified by Council when it carried out a Building Site Advice inspection for the purposes of obtaining a Final Certificate on 12 October 2020. The inspection marked a number of items with an “R” which is understood in the industry to mean that certification is required before a Form 21 can issue. Most of the line items marked R were not related to Tractile’s works. I will deal with that next.
However, the inspector did add three handwritten notes:
1.   Roof product non-conform product. Not N4 rated and non tested to supply to tanks and drinking water.
2.   Certificates required.
3.   Final plumbing required.
Mr Sanders was cross examined about this document. It was put to him that as at that date, the Form 21 could not be issued unless all the certificates marked with an R were provided. Mr Sander accepted that proposition. However, he had earlier given evidence that he had the other (non-Tractile) certificates, he just had not supplied them. He said he provided them the next week. Also in re-examination, he explained that he collected the certificates as he went along and would normally have supplied them as part of the final inspection. I accept his evidence on this issue.

The Fraser-Lever report

The evidence does not explain whether and to what extent the Council’s compliance issues were addressed after late 2020 other than by Tractile retaining Fraser-Lever. In September 2021, Tractile obtained, and provided to Council, a report from Fraser-Lever Consulting Engineers (the Fraser-Lever report). The report concluded that the Tractile roof tile and solar roof tile complied with various relevant standards and NCC requirements. It did not deal with plumbing and drainage standards. Mr Perkins gave evidence that it did, and that it can be inferred Fraser-Lever did not consider that assessment against plumbing and drainage standards was necessary because they did not do such an assessment.[26] That is not consistent with the scope of work described in the report says. Fraser-Lever recited that they had been retained by Tractile Pty Ltd to provide an RPEQ structural and electrical certification of the product. I reject the inference Mr Perkins seeks to draw. There is no possibility that his suggestion is correct. That he made it reflects poorly on his reliability as a witness.
[26] TS5-11.1 to 11.5.
Most relevant for current purposes is the section of the report which reviews in tabular form the roof tiles against Australian Standards, and in particular AS2049:2002 relating to roof tiles. The table relevantly provides:

Standard No	Standard Name	Description
AS2049:2002	Roof Tiles	Clause 4.6 Surface Treatment Materials used for the surface treatment of tiles shall not impart to rainwater which may be collected from the roof, any objectionable taste, colour or odour of any element or chemical in concentration known to be hazardous to health. NOTES: 1. Guidelines are provided in ‘Guidelines on the collection, care and control or rainwater in tanks’. 2. A method of assessing compliance with Clause 4.6 is provided by BS 6920. Tractile is offered with several different coating options. For tiles used for drinking water Tractile will use Dulux Acratex 962 paint which is drinking water safe. Dulux Datasheet included in Appendix E.
[…]
8.6 Resistance to Salt Attack The ability of roof tile to resist salt attack shall be categorized (see Table 1) by testing in accordance with AS 4046.7. When a subsection of a tile is tested in accordance with AS 4046.7, it shall have a minimum dimension of 50mm~ 25mm~ the nominal thickness. Roof tiles manufactured in accordance with this Standard, categorized as ‘exposure’ grade shall be deemed suitable for use in all exposure environments (see Note 1). Resistance to airborne salt is to be differentiated from the accumulation of salt from other sources, such as salt arising from evaporative air coolers, and heating devices, etc., which are fixed above roof tiles (see Note 2). NOTES: 1 Up to 100 m from non-surf coast and up to 1km from surf coast are both regarded as severe marine environments. The distances specified are from the mean high WaterMark. 1 Consideration should be given to effects of salt in such circumstances TABLE 1 SALT ATTACK RESISTENCE CATEGORIES Category Requirement/description Exposure grade <0.4 g loss in 40 cycles in AS 4046.7 for roof tiles (non-metallic). Tractile has advised that the Tile is made from Fibre Glass Reinforced Polyester Resin which is used in marine environments. Tractile has provided the paint system used on each tile. The KOSSAN QUV & Salt Spray Test Report (Appendix D) provided testing of carbon fibre glass panel with the same paint system tested in standard ASTM B 117. The ASTM B 117 testing method is different to 4046.7. Both methods aim to replicate a highly corrosive environment.

[underlining in original]

As I read the sections of the report quoted above:
(a)The Tractile roof tiles assessed by Fraser-Lever only met AS2049:2002 in relation to run-off being safe for drinking on the basis that Tractile advised the Fraser-Lever that the identified Dulux paint is used, which paint met other standards for being safe for drinking run-off; and
(b)The Tractile roof tiles assessed by Fraser-Lever met the standard for resistance to salt attack on the basis that Tractile advised the engineers that Kossan paint was used on each tile and was tested as meeting necessary standards of resistance to salt attack.
These two sections appear to be inconsistent. It is unclear how the roof tiles can be painted with Dulux to meet the requirement for safe run-off and be painted with Kossan paint to meet requirements for resistance to salt attack. That is all the more so because as will be seen, Kossan paint (or at least the kind used on the roof tiles) is not certified as safe for collecting run-off for drinking. The Fraser-Lever report was eventually tendered for all purposes at trial. However, that does not much assist me to resolve this apparent inconsistency. At trial, I thought it might be that both paints could be used on the roof tiles, first Kossan then Dulux, though it is not clear how that would be effective in practice. Ultimately, however, Mr Terpstra gave evidence that the idea was that a customer would be invited to choose whether they wanted paint that promoted salt protection or paint which was safe for drinking water.[27] I deal with that further below.
[27] TS 5-88.
The Fraser-Lever report was provided to Council. On no view of it was that report a full answer to the SRRC’s concerns because it did not deal with the plumbing and drainage issues. Another shortcoming of the report in relation to paint is that it was based solely it seems on Tractile’s (seemingly inconsistent) instructions as to how the tiles were painted.
Soon after production of the report, Tractile disclosed that the roof was not painted with the Dulux paint certified safe for collecting drinking water, but rather with the Kossan paint that was not certified safe for collecting drinking water. That disclosure was made in Tractile’s amended defence filed 21 November 2021. The context in which that occurred is relevant.
These proceedings were commenced by the plaintiffs in April 2021. At that stage, the plaintiffs alleged that:
(a)Tractile knew the plaintiffs wanted a roof suitable to collect drinking water (paragraph 8);
(b)The roof tiles were not certified as safe for collecting drinking water; and
(c)That was a breach of various obligations under the contract to provide a product which was certified for inclusion in a dwelling.[28]
[28] See paragraphs 8, 30 and 34 respectively of the Statement of Claim, as originally filed.
The defence first filed by Tractile responded to these matters as follows:
(a)Denied that Tractile knew the plaintiffs wanted a roof which was suitable to collect drinking water; and
(b)Denied the breach of certification obligations only by reference to a denial that the water in the Tractile roof did not come into contact with drinking water (the defence to the WaterMark issue). No specific allegation was made about the certification of safety for collection of drinking water.
On 19 July 2021, the proceedings were placed on the commercial list. After a failed mediation, further directions were made for an amended statement of claim and responsive defence. The amendments to the statement of claim altered the allegations about certification to focus more directly on the WaterMark issue, but otherwise remained substantively the same.
It was in response to the (unchanged) paragraph 8 in the amended statement of claim that Tractile pleaded for the first time the following allegation in its amended defence filed 25 November 2021:
The Defendants were instructed by the Plaintiffs to proceed with a roofing solution that would not be certified for capturing rainwater for human consumption; and
Particulars
On or about December 2018, an oral conversation between Jason Perkins and Steve Quilkey of the Plaintiffs took place during which the following words, or words to the following effect, were spoken:
A.Steve Quilkey: “Will the rainwater captured from the roof be suitable to be used for drinking water?”
B.Jason Perkins: “if you want to drink the water from the roof, the roof must be painted with DULUX paints which would make the roof suitable for capturing rainwater for human consumption and is certified for that purpose. However, to achieve this these DULUX paints are water based and have a shorter 10-year warranty, so you may have to budget repainting the roof every 10 years.
If you want a paint which comes with a longer warranty and longer repaint maintenance schedule, we recommend KOSSAN branded paint to be used on the roof.
However, KOSSAN paint has not been certified as suitable for rainwater collection so the rainwater would not be suitable for use as drinking water”
C.Steve Quilkey: “I would like to proceed with the KOSSAN paint due to its longer warranty;
I could use the rainwater collected from the roof for purposes other than drinking water like watering the gardens and flushing the toilet”.
This allegation resulted in amendment to the statement of claim which pleaded a detailed case concerning Tractile’s knowledge of the plaintiffs’ intention to use run-off from the roof for drinking water and that was followed by an equally detailed defence to those allegations. It was those allegations which went to trial. It was common ground at trial that the Tractile tiles were painted with Kossan paint which was not certified safe for collection of drinking water and not the Dulux paint referred to in the specifications and the Fraser-Lever report which was certified safe.

After practical completion

Mr Sander said that the house would have been practically complete by early 2020 apart from the Tractile problems,[29] and later said that the work apart from the Tractile issues was complete by February 2020. The plaintiffs’ claim damages for being kept out of the occupation of the house on the basis that they could have moved into the house by the end of March 2020 if adequate Tractile certification could have been obtained promptly. While I accept Mr Sander’s evidence and consider that a Form 21 could likely have been issued by the end of March 2020, that does not necessarily mean that the plaintiffs would have immediately moved into the house.
[29] TS2-29.17.
In fact, the plaintiffs did not move into the house in March 2020. Mr Quilkey could not move in because he was confined to Hong Kong by COVID restrictions until December 2021. It was Ms Nozaki who was present at the property over that period, living in the cottage. Ms Nozaki said that the last of the workers left in July 2020 and that one of the last jobs involved marble cutting which caused a lot of dust. After that she spent August 2020 cleaning and testing all the equipment to make sure it was all working. That means, however, Ms Nozaki would not have moved into the house until September 2021 whether it was practically complete for the purposes of the building contract in March 2020 or not.
I accept, though, that Ms Nozaki then chose to defer moving into the house in September 2020 because of the absence of a Form 21, though she was frequently in the house and using its facilities. She and Mr Quilkey later decided to move into the house regardless of that, and Ms Nozaki did so in January 2021.
Ms Nozaki gave evidence that she had made free use of the tank water when visiting the house and while living in the house from January 2021. Around that time, Ms Nozaki developed an, allergic-type reaction, which manifested itself in severe rashes. While the plaintiffs did not seek to establish this condition was caused by the Kossan paint, the allegations in the amended defence certainly caused significant and justifiable concern about that possibility. She gave evidence that after reading the amended defence revealing the use of uncertified paint on the tiles, she took precautions to have as little contact as possible with the tap water, though she remained in the house.
Ms Nozaki gave evidence that after she read the amended defence, she also made inquiries about Kossan in Malaysia and telephoned the company. It was located not far from where she had once lived in Kuala Lumpur. Her evidence was led as relevant to the reasonableness of her conduct in response to the discovery, rather than the truth of what she was told. She described her investigations and call in this manner:[30]
From the internet, I saw Kossan mainly produced paint on bottom of the ship. They release toxins gradually to keep the shellfish off of the bottom of fish ship or the factory floors, but I never seen anything on the roof on their website. So I called Kossan and the one manager guy picked up my call and I – I asked him if the Kossan Paint is normally used for ships and factory floor and he said yes, and I further inquired him what about Tractile? Do you supply paint to Tractile? He said yes and what is it made of? Can I ask about it? And then he said no.
[30] TS4-4.25
Mr Quilkey returned to Australia in December 2021. He considered repainting the roof but his investigations suggested this was not a viable solution to the problem of the uncertified Kossan paint. I accept that evidence. In about March 2022, the plaintiffs began investigating replacing the Tractile roof entirely.
At about that time, Council restated its position on the status of the Tractile roof. Council accepted that the Fraser-Lever report sufficiently addressed compliance with requirements for use of the Tractile tiles as a roof tile.[31] However Council caveated that in respect of compliance with run-off requirements because Council had not received evidence that the coating on the tiles was safe for collecting drinking water. Respectfully, that was in my view a correct judgment as I explain below. I also note that in that letter, Council seemingly accepted the Form 16 relating to the installation of the sarking provided by Mr Sexton, on the basis that Council was satisfied as to the status of his license at the relevant time. I wonder, however, how that Form 16 could have properly been given considering the evidence of Mr Sander that Mr Sexton was only on site once.
[31] Ex 36 – Letter from SRRC to Lachlan Rieck dated 6 April 2022. Note the concern about the as constructed plans was not one which the Council ultimately maintained.
There was no evidence I could identify (led by Tractile or otherwise) which supported the conclusion that the Kossan paint used was safe for collecting drinking water (other than a bare assertion by Mr Terpstra) much less that there was any process in place for certification of the paint for that purpose. I do know that it provides resistance to salt attack, not something which of itself gives one confidence in assuming it is safe.
In about October 2022, the plaintiffs entered into a contract with Mr Sander to remove the Tractile roof and replace it with another roof. That work finished in later 2022. The Form 21 issued in January 2023.

THE WITNESSES

Before going further, it is necessary to make some comments about the credibility and reliability of each witness.

The plaintiffs

Mr Quilkey was a careful witness with a reasonably good recollection of the events. His evidence was generally consistent with the documents and with other uncontentious facts and likely inferences from such facts. Mr Hogg, counsel for Tractile, submitted that Mr Quilkey’s evidence about his previous experience in building was misleading. I disagree. The two relevant passages are dealing with different matters. In addition, Mr Quilkey gave expansive and responsive answers to questions on the point in cross examination which were inconsistent with any intention to minimise his experience as a client of builders.[32] He was an honest witness.
[32] In examination in chief, Mr Quilkey was asking about experience as a builder doing building work: TS 1-12.29 and in cross examination Mr Quilkey was asked about experience dealing with builders as a client: TS 2-46, 2-47.
It was also suggested in cross-examination that Mr Quilkey developed considerable animus towards Mr Perkins and Mr Terpstra. I agree he did. However, that of itself does not mean his evidence is unreliable. Generally, despite his annoyance, Mr Quilkey kept his communications civil and made real efforts from time to time to overcome the shortcomings he perceived in Tractile’s performance of the contract. His displeasure might have tinged his evidence from time to time but he was a reliable witness.
I should specifically mention his evidence about the key factual dispute on the pleadings: that is whether he ever had a discussion with Mr Perkins as alleged in the Tractile defence at paragraph [92] above. Mr Quilkey denied that any of the principal components of that allegation were true. Ultimately, as will be seen, his evidence to that effect was confirmed by Mr Perkins; an unusual source of corroboration. Further, Mr Quilkey’s evidence about this conversation was consistent with other evidence which was uncontentious or plainly correct. The most compelling point is that it is unquestionable that the plaintiffs needed to obtain water for domestic use from their water tanks and the house was designed on the basis that the water collected from the roof was to be directed to their 45,000 lt water tanks. In those circumstances it is incredible to think that Mr Quilkey would simply agree to use paint not certified for collecting run-off for personal use.
One final matter. The quality of Mr Quilkey’s evidence is demonstrated by the fact that when given the opportunity to say that he had actually told Mr Perkins the run-off was intended for personal use, he let that opportunity to boost his case pass him by and frankly stated he did not recall ever saying it because he relied on the website and specification documents.[33]
[33] TS 1-41.
Mr Hogg submitted that Ms Nozaki’s credibility was also affected by her evidence about building experience. Again, and for the same reasons, there was nothing of substance in this complaint. I consider she was an honest witness.
Ms Nozaki appeared to me to be influenced from time to time by her sense that Tractile and its officers were not behaving as they should be according to her views of proper conduct in dealing with government officials. That was particularly so in respect of Tractile disagreeing with the views of the SRRC officers. At times I think this affected the reliability of the detail of her recollection in relation to events involving that kind of dispute, though such issues were not material in the resolution of the proceedings. In all other respects she was a precise witness with a good recollection.

Mr Sander

Mr Sander was scathing in his views of performance under the Tractile contract. He undoubtedly formed the view that Tractile were unreliable (at least on this job). However, he had good reason to think so. That view notwithstanding, I found him a reliable and credible witness. Mr Sander had a frank and direct manner of answering the question asked of him, whether in examination or cross examination, and without any evident attempt to shape his answers in a convenient manner and without an attempt to add to his answers in self-justification. A good example of this was his evidence under cross examination relating to the October 2020 Building Site Advice, but it marked all his evidence. His evidence was generally consistent with the documentary record and with other evidence I accepted as correct. Where he was uncertain about matters, he was careful to make clear his recollection was of a general kind. He also had a good recollection of detail, especially where it concerned his personal involvement in the work on the site, which was clearly his particular concern during these events. As I have said, I accept his evidence.

Mr Perkins

Mr Perkins was not a reliable witness. His answers frequently began with background commentary on irrelevant matters, and then moved to very generalised responses which were not responsive to the question asked. The below passages give a flavour of Mr Perkins’ style of answering questions. For this reason alone, I formed the view that Mr Perkins had a poor recollection of events and was reconstructing much of his evidence. There were other problems.
The most significant problem was his evidence in relation to the hotly disputed conversation in Adelaide pleaded in the Tractile amended defence. When asked about that, he did not come up to proof on the alleged conversation about safe and unsafe paint. In relation to the discussions at the Adelaide inspection he said:
Mr Hogg:           It doesn’t need to be precise but just to the best of your recollection?
Mr Perkins:Okay. I presented to them that this is what a 20-kilowatt system looked like. I presented to them that the non-solar tiles were painted in a monument dark grey paint that was offered from factory. We spoke about the number of inverters they would require. We spoke about the number of batteries they may require. And we spoke about the Rotex tank and how it operated, which were all on display at the property.
Mr Hogg:You mentioned the paint from the roof being monument. Could you tell the court your recollection of any discussions you had with Mr Quilkey about the paint on the roof?
Mr Perkins:At that particular meeting?
Mr Hogg:           At that particular meeting?
Mr Perkins:The meetings were really – that particular meeting specifically was talking about the colour of the paint, being dark grey, and just talking through that that one was supplied from Malaysia, and it – it was done.
Mr Hogg:Did you – so how did that conversation about the paint on the roof start? Did you point out the roof and the paint or did Mr Quilkey point out the roof and the paint?
Mr Perkins:Look, I – I don’t recall exactly, but it would’ve spoken about the paint clearly because it’s one of the key features of the product.
Mr Hogg tried again later:
Mr Hogg:And could you tell the court to the best of your recollection who said what to whom during that conversation?
Mr Perkins:We just said this is – this roof has got the dark grey colour that you’re discussing, and it was painted in Malaysia – Kossan Paint.
Mr Hogg: And what did Mr Quilkey say in response, if anything?‑‑‑
Mr Perkins:He basically, towards the – towards the end of the meeting, just made a comment that yep, he wanted what was at Adelaide, along those lines. So that’s [indistinct] in terms of having the – all of the different variables. Having a battery system, the inverters, the Rotex tank, solar tiles, and the painted roof tiles.
Mr Hogg then tried a broader question:
Mr Hogg:Did you have any other conversations with Mr Quilkey about planning after that?
Mr Perkins:Yeah, we would’ve spoken as things progressed to confirm colours, because they were still debating whether it was going to be a very dark grey or a black-type colour roof. It was definitely choosing different shades, if you like. And we would’ve spoken about some of their goals. So around sustainability ‑ ‑ ‑
His Honour:       Sorry, you said you would’ve. Do you recall a conversation where you did have a specific discussion about goals?
Mr Perkins:Yes, I do recall being on-site and talking with him and reviewing the plans with the very steep pitch roof, and looking at the issue on that water-based paints have a 10 year life and then you’ve got to repaint and talking about the issues on how difficult such a steep roof is to readily maintain, what costs are associated, and so a paint with a longer life was basically requested as part of the solution. A paint that would be ‑ ‑ ‑
Mr Hogg:So where – you said, basically requested – sorry to interrupt you, we need to be precise?
Mr Perkins:No, sorry, it was requested – yes, so a paint that was safe and also durable…
Mr Hogg:By whom? Who made that request?
Mr Perkins:Mr Quilkey.
His Honour:        And where was that conversation?
Mr Perkins:        At Mount Tambourine.
His Honour:       All right. And doing the best you can, when was it?‑‑‑
Mr Perkins:Would’ve been some point – some point in 2019. In the early part of 2019. So we’d been talking about the variables that could go on and looking at them, just saying, “Okay this is what you can do ‑ ‑ ‑”
Mr Hogg:When you say variables, what do you mean by that?
Mr Perkins:Well, basically just looking at the variation between if you want the most durable solution from a Dulux paint system, it’s not going to have the water solution. If you want the water solution, you have Dulux, it’s going to have a very short life. You’re going to have maintenance issues.
Mr Hogg: And when you say water solution, were those the words used?
Mr Perkins:Well, to be able to, you know, collect potable drinking water off of a roof.
His Honour:        Were they the words used?
Mr Perkins:        No. Rainwater.
Mr Hogg:What were the – what were the words used, to the best of your recollection in that conversation?‑‑‑
Mr Perkins:        There was just – there was just discussion about rainwater.
Mr Hogg:           Could you be ‑ ‑ ‑?
Mr Perkins:        I don’t really recall that, sorry.
Mr Hogg:I need you to be as precise as you can, Mr Perkins. You said you were having a discussion about rainwater. Who said what to whom about rainwater?
Mr Perkins:The rainwater, it was just discussed on – if you were collecting rainwater ‑ ‑ ‑
Mr Hogg:Who said what to whom?
Mr Perkins:Mr Quilkey had spoken about intending to collect rainwater from the roof. So then in discussing [indistinct] for the roof he was looking at what is the quality of rainwater off of a roof. We’d discussed that at Tambourine the previous year, there’d been the Hendra virus from bats, we’re talking about such a large roof, the – the risk of contamination from birds and bat droppings onto a roof, and then looking at it and just saying – it just – it just leads to tank water. It’s not very nice. I had a very clear impression that the tank water was for the gardens, not for anything else.
Mr Hogg:           Why did you have that impression, what gave you that impression?
Mr Perkins:The amount of effort they’d put into their gardens. The volume of the tanks was so large, it was well in excess of what you’d expect for any domestic consumption. And the fact that Mr Quilkey appeared to be a very healthy person. They had a lot of – they had a gym into their property. He, himself, looks very healthy. He just doesn’t appear as if someone would choose to drink rainwater if there’s better water available.

The Tractile tiles were required by this section to be fit for the purposes of installation as a roofing product which was certified as safe for use in collecting rainwater for personal use and for heating water for domestic use by way of solar heated water. The use of the roof for both purposes was repeatedly represented in the defendants’ marketing material. I have found that the Tractile roof did not comply with that guarantee:
(a)The tiles were not certified safe for collecting drinking water; and
(b)The solar tiles were not certified for inclusion in a solar heated water system for domestic use hot water.
Section 271 provides a remedy against a manufacturer of goods where the goods fail to meet the suitability guarantee. That provision relevantly provides:
(1) If:

(a) the guarantee under section 54 applies to a supply of goods to a consumer; and

(b) the guarantee is not complied with;
an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.
(2) Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of:
(a) an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or
(b) a cause independent of human control that occurred after the goods left the control of the manufacturer; or
(c) the fact that the price charged by the supplier was higher than the manufacturer’s recommended retail price, or the average retail price, for the goods.

Trac Group did not plead reliance on s. 271(2) and made no submission that it applied if Trac Group was otherwise a manufacturer. The issue in dispute is whether Trac Group is a manufacturer of the goods. Manufacturer is defined in an inclusive and expansive manner in s. 7 ACL as follows:
(1)        A manufacturer includes the following:
(a) a person who grows, extracts, produces, processes or assembles goods;
(b) a person who holds himself or herself out to the public as the manufacturer of goods;
(c) a person who causes or permits the name of the person, a name by which the person carries on business or a brand or mark of the person to be applied to goods supplied by the person;
(d) a person (the first person) who causes or permits another person, in connection with:
(i) the supply or possible supply of goods by that other person; or
(ii) the promotion by that other person by any means of the supply or use of goods;
to hold out the first person to the public as the manufacturer of the goods;
(e)        a person who imports goods into Australia if:
(i)         the person is not the manufacturer of the goods; and
(ii) at the time of the importation, the manufacturer of the goods does not have a place of business in Australia.

(2) For the purposes of subsection (1)(c):
(a) …

(b) if the name of a person, a name by which a person carries on business or a brand or mark of a person is applied to goods, it is presumed, unless the contrary is established, that the person caused or permitted the name, brand or mark to be applied to the goods.

(3) If goods are imported into Australia on behalf of a person, the person is taken, for the purposes of paragraph (1)(e), to have imported the goods into Australia.

There was no evidence that Trac Group is the (actual) manufacturer under s. 7(1)(a). However, the plaintiffs contend that Trac Group is a manufacturer under other parts of the definition. The plaintiffs contended that Trac Group is the manufacturer under s. 7(1)(b) in that Tractile held itself out as the manufacturer of Tractile product because:[57]
(a)The specification identifies only Trac Group and contains the statements: “Where is the Tractile roof made? Tractile products are made in our manufacturing facility in Malaysia.” (see paragraph [23] above);
(b)The website owned by Trac Group states: “Where is the Tractile roof made? Tractile products are made in our manufacturing facility in Malaysia.”; and
(c)Tractile tiles have imprinted on them: “Manufactured and distributed under licence from Trac Group Holdings Limited…”.
[57] TS 5-4.34 to TS5-7.45; Exhibit 2 (poster); Exhibit 19 (tile); Exhibit 72 (Notice to Admit Facts dated 13 January 2023 [2]-[4]).
The plaintiffs also submit that Trac Group is a manufacturer:
(a)under s. 7(1)(c), in that Trac Group owned the Tractile mark,[58] and caused or permitted the Tractile mark to be applied to the Tractile goods for supply to consumers;[59]
(b)under s. 7(1)(d), in that Trac Group caused or permitted Tractile P/L and Tractile Combined to use those marks to hold itself out as the manufacturer.
[58] TS 5-4.15 to 5-4.32.
[59] Ex 19 – Ridge Roof Tile.
I accept that Trac Group was a manufacturer under s. 7(1)(b) for the first two reasons articulated by the plaintiffs. The specification and the website are documents addressed to the public. Read objectively, the specification communicates that the manufacturer is Trac Group. As to the website, a potential consumer interested to discover the identity of the person claiming to manufacture the tiles in Malaysia would find on a domain search that the entity was Trac Group. While not every statement to the public generally or potential customers, in particular, will be sufficient to meet the requirements of s. 7(1)(b), these two matters are sufficient. The specification is a detailed and formally prepared document which is objectively intended for supply to interested potential buyers (and was so supplied to the plaintiffs). The website is a declaration addressed to any person searching on the internet. The marking on the tiles, on the other hand, is equivocal. While it identifies Trac Group as the ultimate holder of the rights to manufacture, it also communicates that some other entity has done the actual manufacturing under a license.
I am not persuaded by the other factors relied upon:
(a)The evidence relevant to s. 7(1)(c) does not make Trac Group a manufacturer under that subsection. That subsection requires Trac Group to be the supplier of the goods. That is not the case here where the suppliers were Tractile P/L and Tractile Combined under the Tractile contract.
(b)As to s. 7(1)(d), a similar problem arises. What is required is that Tractile P/L holds Trac Group out as the manufacturer, not that Trac Group allows Tractile to hold itself out as manufacturer.
The plaintiffs have a claim against Trac Group as manufacturer for relief under s. 272 ACL which relevantly provides:
(1) In an action for damages under this Division, an affected person in relation to goods is entitled to recover damages for:
(a) any reduction in the value of the goods, resulting from the failure to comply with the guarantee to which the action relates, below whichever of the following prices is lower:
(i) the price paid or payable by the consumer for the goods;
(ii) the average retail price of the goods at the time of supply; and
(b) any loss or damage suffered by the affected person because of the failure to comply with the guarantee to which the action relates if it was reasonably foreseeable that the affected person would suffer such loss or damage as a result of such a failure.
(2) Without limiting subsection (1)(b), the cost of inspecting and returning the goods to the manufacturer is taken to be a reasonably foreseeable loss suffered by the affected person as a result of the failure to comply with the guarantee.
(3) Subsection (1)(b) does not apply to loss or damage suffered through a reduction in the value of the goods.
No submissions were addressed to the measure of loss arising under this provision specifically. Section 271(1)(a) is irrelevant because any loss in relation to money paid for the Tractile roof has been addressed by the restitutionary order.
As to s. 271(1)(b), I consider that each of the heads of loss quantified above fall within the scope of that provision. Each of those heads of loss can properly be characterised as arising in a common sense manner for the failure to comply with the suitability guarantee in each respect. As to reasonable foreseeability, both the need to remove the roof if it did not comply with statutory requirements and the loss of use of the house arising from that difficulty are in my view reasonably foreseeable. Frankly, any company supplying goods for use in the construction of a domestic dwelling should know of the need to comply with the numerous statutory standards applicable in that area of commerce and would be taken to reasonably foresee that consequences of the kind which occurred in this case can arise where the product is not and remains uncertified.
Accordingly, I find that Trac Group is liable to the plaintiffs under s. 271(1)(b) for $203,274.

Tractile P/L

In case my conclusion that Tractile was a party to the Tractile contract was in error, it is necessary to consider the plaintiffs’ alternative argument in respect of Tractile. The SOC at paragraph 52(b)(i) asserts, relevantly, that Tractile P/L is a manufacturer because Tractile P/L:
[C]ause or permit their Tractile name, by which they carry on business, to be applied to the Tractile system that are (sic) supplied by Tractile and Tractile Combined.
The allegation invokes the definition of manufacturer under s. 7(1)(c). The difficulty is that to establish that Tractile is a manufacturer under s. 7(1)(c), it must also be established that Tractile was the supplier of the relevant goods. Tractile will be a supplier if they are a party to the Tractile Contract. However, if that is the case, it will be unnecessary to consider the position of Tractile under the ACL. The plaintiffs did not assert that they would be in a more advantageous position as against Tractile by establishing liability under the ACL instead of under contract.

NEGLIGENCE

The plaintiffs’ case in common law negligence, separate from the breach of statutory duty case discussed below, alleged a duty incumbent on Tractile P/L and Tractile Combined to carry out the work under the contract with reasonable care and skill. The pleaded case largely tracked the contract case. No written submission was made on the negligence case by the plaintiffs nor was it dealt with in addresses. There was no suggestion that the negligence case pleaded could succeed if the contract case failed nor any articulation of a more advantageous measure of loss in tort. It is unnecessary to consider this cause of action further.

BREACH OF STATUTORY DUTY

Summary

The plaintiffs seek damages for the tort of breach of a statutory duty arising under Part 6AA of the QBCC Act. It is a difficult question of law whether Part 6AA, and s. 74AF in particular, creates any tort for breach of statutory duty. Counsel have referred me to no authority that has considered the point in relation to the provisions of Part 6AA. Ultimately, in the present case, the issue is unnecessary to decide because in my respectful view the statement of claim does not plead a private cause of action arising out of Part 6AA.

Pleaded Case

The cause of action for breach of statutory duty is pleaded in the SOC as follows:
32A. Tractile [P/L], Tractile Combined and TRAC Group is each a person in the chain of responsibility for the Tractile System within the meaning of section 74AE of the QBCC Act because…
The Statement of Claim then pleads the requirements for a person to be in the chain of responsibility for a product including that the person designs, manufactures, imports or supplies the product and knows or is reasonably expected to know the product will or is likely to be associated with a building. It then goes on:
32B.Pursuant to section 74AF of the QBCC Act, and in the premises of paragraph 32A, above, Tractile [P/L], Tractile Combined and TRAC Group, so far as reasonably practicable, were required to ensure that the Tractile System was not a non-conforming building product for an intended use, being the use pleaded at paragraph 29A, above, which includes the Intended Use.[60]
32C.In the premises of paragraphs 32A and 32B:
(a)Trac Group and Tractile [P/L] is each required to provide the required information for the Tractile System and the Tractile products at paragraph 9(a) (Required Information), pursuant to subsections 74AG(1) and (2) of the QBCC Act;
(b)Tractile and Tractile Combined is each required to provide the Required Information pursuant to subsection 74AG(4) of the QBCC Act.
[…]
32E.Pursuant to section 74AI of the QBCC Act, Mr Perkins was under a duty to exercise “due diligence” (as defined in subparagraph 74AI(3)) to ensure that Tractile, Tractile Combined and TRAC Group complied with the duties pleaded at paragraphs 32B and 32C.
[60] Paragraph 29A of the Statement of Claim pleads various intended uses of the Tractile System, the Tractile Eclipse Solar Roof Tile and the Tractile Roof Tile, including “to harvest rainwater for domestic consumption” (in respect of the Tractile System) and “to use the surface of the roof to capture rainwater for domestic consumption” (in respect of the other products).
This is arguably a sufficient pleading of a tortious claim for breach of a statutory duty, so far as it goes. However, in respect of these pleaded statutory duties, the pleading goes no further. It does not assert a breach of these duties, nor does it plead a loss flowing from any such breach. Instead, the pleading goes on to identify other duties said to arise under the QBCC Act as follows:
TRAC Group, Mr Perkins, Tractile and Tractile Combined – Breach of Statutory Duty
38A. In the premises of the matters pleaded at paragraphs 5(a)-(b), 5, 9-10, 13(b), 25-26, 29, 29A, 30, 30A, 30B, 30C, 32A, 32B, 32C and 32E above:
(a)TRAC Group, Tractile [P/L] and Tractile Combined owed to the Plaintiffs a duty of care with respect to the Tractile System to ensure that the Tractile system is not a non-conforming building product for the Intended Use, so far as reasonably practicable; and
(b)Mr Perkins owed to the Plaintiffs a duty of care with respect to the Tractile system to exercise reasonable due diligence to ensure that TRAC Group, Tractile and Tractile Combined:
(i)complied with the duty pleaded at subparagraph 38A(a) above and;
(ii)complied with their respective duties pleaded at subparagraphs 32B and 32C,
because:
(1)it was foreseeable to TRAC Group, Tractile [P/L], Tractile Combined and Mr Perkins that a breach of their respective duty could result in the Risks of Harm[61] to the Plaintiffs (or to the class of persons in the position of the plaintiffs);
(2)the Risks of Harm were not insignificant;
(3)a reasonable person in the position of TRAC Group, Tractile [P/L], Tractile Combined and Mr Perkins would have taken precautions to avoid the Risks of Harm (or similar risks of harm) for which the person might be responsible because…[62]
(4)The QBCC Act imposed on TRAC Group, Tractile [P/L], Tractile Combined and Mr Perkins the duties pleaded at paragraphs 32B and paragraphs 32C and 32E (as to Mr Perkins) and:
A.the health and safety risk that the Tractile System might pose to the Plaintiffs if comes into contact with drinking water is the kind of risk that the QBCC Act sought to address by imposing those duties;
B.the class of persons that the QBCC Act sought to protect which includes the Plaintiffs, extends to consumers and the general public who purchase building products and rely on the suitability of building products for their health and safety; and
C.the imposition of the duties extends the existing common law protection of consumers and the general public, which imposes tort duties on persons who are responsible for putting a product into the stream of commerce to take reasonable care for the safety of users who will suffer economic loss associated with mitigating, repairing or rectifying products that negligently pose a health and safety risk to others.
[61] The relevant risks of harm were identified in paragraph 36 as including that the dwelling on the Site would be unsuitable for its intended use, diminished in value or the subject of rectification work.
[62] The plaintiff then alleges that [Trac Group], Tractile P/L, Tractile Combined and Mr Perkins could readily have ensured that the Required Information was available and that there is no social utility in persons in the position of the defendants failing to ensure that the Required Information is available.
The pleading then pleads a breach of the duty in paragraph 38A(a) by Trac Group, Tractile P/L and Tractile Combined. The breach is said to arise because those defendants failed ‘to obtain the Required Information’ prior to entry into the Tractile contract or alternatively by 31 March 2020. It is also pleaded that Mr Perkins failed to comply with the duty pleaded at paragraph 38A(b) by failing to ensure that the other defendants obtained the required information before entry into the Tractile contract or alternatively by 31 March 2020.[63]
[63] It is also pleaded that a breach arose when Mr Perkins failed to ensure that the Required Information was given to the plaintiffs when the plaintiffs requested it from Tractile P/L and Tractile Combined.
There are several problems with this form of pleading.
First, and most importantly, it does not identify the statutory provisions said to give rise to the pleaded duty. Paragraph 38A does not merely rely on the duties identified in paragraph 32B and 32C, it instead pleads an entirely new duty. It is difficult to understand the exact content of the duty when no provision is identified. In fact, the plaintiffs appear to allege that a common law duty of care arises, in some way by reference to the QBCC Act. That understanding of the pleading arises from the reference to ‘duty of care’ in paragraph 38A and the allegations in 32B(b)(ii)(1)-(3). Of course, the plaintiffs already bring a claim in negligence and it is unclear how the QBCC Act informs that pre-existing duty (though it could conceivably be relevant to its breach). As such, the relevance of the statute to the pleaded cause of action is unclear.
Second, the content of the duty is dealt with inconsistently. Paragraph 38A(a) and (b) plead a duty to do all that is reasonably practicable to ensure that the relevant products were not non-conforming building products. However, the breach pleaded is a failure to obtain a WaterMark certification and a certificate of compliance with the relevant standards. The failure to obtain that Required Information is not a breach of the duty pleaded. A breach would arise from a failure to do all that is reasonably practicable to obtain those certifications.
The steps that ought to have been taken to avoid a breach of the duty are not identified, nor have they been clarified during the trial. That is true in respect of all the defendants, including Mr Perkins. It could arguably be inferred that the plaintiffs’ case is that each of the defendants had a coextensive duty to get the Required Information or else not sell or install the product. But that is not pleaded.
Third, the duty pleaded is not one that derives from the provisions of the Act. Section 74AF imposes a duty to ensure, so far as is reasonably practicable, that a building product is not a non-conforming building product (“NCBP”) for an intended use (though it would be awkward to describe that duty as a duty of care). A product is an NCBP if inter alia it does not, or will not comply with a relevant regulatory provision. However, the breach that is pleaded is a failure to obtain the Required Information, which paragraph 38B describes as the WaterMark Certificate and certificate of compliance with AS4020 and AS2049:2002.

I have found that the Tractile System did require WaterMark Certification. In that sense it was a non-conforming building product. As indicated above, no breach of an obligation to take reasonable precautions was pleaded against any defendant, such that no breach of s. 74AF arises on the pleading (even putting aside the point made at [262] above).
In addition, the pleaded duty involves a failure to obtain, “Required Information” which is defined in paragraph 32C of the Statement of Claim as being the information required under s. 74AG of the QBCC Act. Required Information is defined under s. 74AG(7) to mean:
[I]nformation about the product that-
(a)for each intended use of the product states or otherwise communications the following-
(i)the suitability of the product for the intended use and if the product is suitable for the intended use only in particular circumstances or subject to particular conditions, the particular circumstances;
(ii)instructions about how the product must be associated with a building to ensure it is not a non-conforming building product for the intended use;
(iii)instructions about how the product must be used to ensure it is not a non-conforming building product for the intended use…
Section 74AG imposes an obligation to ensure that a building product is accompanied by the required information rather than a duty of obtain that information. In any event, no breach of s. 74AG is pleaded.
As such, it is difficult to understand how the duties under the Act interact with the pleaded duties. Ultimately, the SOC appears to plead a common law duty of care which required the defendants to take steps similar to those required under Part 6AA of the QBCC Act. That is not an action for breach of statutory duty. It is an action in negligence where the question of breach is informed by the requirements of statute. I have already dealt with the plaintiff’s claim in negligence. It is unnecessary to deal further with the plaintiff’s claim for breach of statutory duty.
The lack of clarity in the SOC is, in part, reflected by the plaintiffs’ opening submissions:
27. … As such [the defendants] must ensure, so far as is reasonably, that the Tractile products were suited to the intended use (section 74AF). In doing so, they must provide the information required under section 74AG.
[…]
29.The evidence shows that the defendants could not provide the required information for the Tractile System…
Here, again, it is unclear whether the breach asserted is a breach of s. 74AF, a breach of s. 74AG or both. The two are distinct duties but they are treated as interrelated in an unspecified way. This point is addressed only by the closing submissions of the plaintiffs which describe the duty under s. 74AF as the ‘primary duty’ and the duty under s. 74AG as the ‘additional duty’. The plaintiffs then contend that Trac Group, Tractile P/L, Tractile Combined and Mr Perkins breached the primary duty because of a failure to comply with AS2049:2002, and that that breach necessarily resulted in a breach of the additional duty. For the reasons I have described that case is not pleaded.
It is therefore not necessary for me to deal with the question of whether Part 6AA could give rise to a private action for breach of statutory duty. However, I do note that it is a difficult question whether Part 6AA gives rise to a civil claim for breach of one or more provisions in that Part, and if so, the nature and scope of any such cause of action. The law in the area is hard to apply, in large part because it involves construing a Parliamentary intention to create a civil cause of action in circumstances where there is no express words in the statute which create that right. That peculiar character of the tort of breach of statutory duty has been recognised in the authorities. The point was made by Dixon J in O’Connor v SP Bray Ltd (1937) 56 CLR 464, 477:
The received doctrine is that when a statute prescribes in the interests of the safety of members of the public or a class of them a course of conduct and does no more than penalize a breach of its provisions, the question whether a private right of action also arises must be determined as a matter of construction. The difficulty is that in such a case the legislature has in fact expressed no intention upon the subject, and an interpretation of the statute according to ordinary canons of construction, will rarely yield a necessary implication positively giving a civil remedy. As an examination of the decided cases will show, an intention to give, or not to give, a private right has more often than not been ascribed to the legislature as a result of presumptions or by reference to matters governing the policy of the provisions rather than the meaning of the instrument. Sometimes it almost appears that a complexion is given to the statute upon very general considerations without either the authority of a general rule of law or the application of any definite rule of construction.
Further, applying the relevant principles calls for a detailed and careful analysis of indications of implied intention which can be extracted from the terms of the statute itself, informed by the factors identified as relevant in the authorities. I found the terms of the QBCC Act generally and Part 6AA QBCC Act in particularly to present a complex context for any such analysis. I mean no disrespect to the efforts of counsel in a case which raised many other difficult issues when I say that the arguments before me did not descend into the detail required for the proper determination of the issue.

CONCLUSION

I order judgment be entered in favour of the plaintiffs:
(a)Against Tractile P/L and Tractile Combined for $177,645; and
(b)Against Tractile P/L, Tractile Combined and Trac Group for $203,274.88;
I order that the claims against Mr Perkins be dismissed.
I will hear the parties as to costs and the form of any other orders which might be required to give effect to these reasons.

CITATION:	Quilkey & another v Tractile Combined Pty Ltd & others [2023] QDC 204
PARTIES:	STEVEN ROBERT QUILKEY AND YUKIKO NOZAKI (Plaintiffs) v TRACTILE COMBINED PTY LTD ACN 627 772 212 (First Defendant) v TRACTILE PTY LTD ACN 142 809 381 (Second Defendant) v JASON DEAN PERKINS (Third Defendant) v TRAC GROUP HOLDINGS PTY LTD ACN 115 007 540 (Fourth Defendant)
FILE NO:	BD No. 794/21
DIVISION:	Civil
PROCEEDING:	Claim
ORIGINATING COURT:	Brisbane District Court
DELIVERED ON:	21 November 2023
DELIVERED AT:	Brisbane
HEARING DATES:	13, 14, 15, 16, 17 and 27 February 2023
JUDGE:	Porter KC DCJ
ORDERS:	1. Judgment is given for the plaintiffs against the first and second defendants for $177,645; 2. Judgment is given for the plaintiffs against the first, second and fourth defendants for $203,274.88; 3. The claims against the third defendant be dismissed; and 4. The Court will hear the parties as to costs and the form of any other orders which might be required to give effect to these reasons.
CATCHWORDS:	CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY– where the defendants carried on a business supplying and installing roofing products – where the plaintiffs engaged either the first defendant or the first and second defendant to supply and install a roof for their property – where the roof contained a solar power collectors – where the solar collection system included a system that used water to cool the solar panels, and thereby increase their efficiency – where, as part of the system, the water would be heated by the solar panels and the roof – whether the defendants’ roofing system required WaterMark certification as a result of a potential risk of contamination of drinking water – whether the failure to obtain WaterMark certification was a breach of the parties’ contract CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – where the roof was painted with a paint that was not safe, and was not certified as safe for the collection of drinking water – whether the defendants’ failure to use paint that was safe, and certified safe, for the collection of drinking water was a breach of the parties’ contract CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where the defendants were not licensed to carry out the building works under the contract – where the plaintiffs are entitled to restitution of the amounts paid under the contract under s. 42 of the Queensland Building and Construction Commission Act 1991 (Qld) – where the plaintiffs also claim damages as a result of breaches of the parties’ contract and in negligence and under the Australian Consumer Law – whether and how the restitutionary sum paid under the QBCC Act must be taken into account in assessing damages
LEGISLATION	Competition and Consumer Act 2010 (Cth) Sch 2 Corporations Act 2001 (Cth) Queensland Building and Construction Commission Act 1991 (Qld) ss 42, 42B, 43, 43A, 51 and 51A
CASES	Body Corporate for Ocean Pacifique v Pugliese [2023] QCA 129 County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 Cook’s Construction Pty Ltd v SFS 007.298.633 Pty Ltd (2009) 254 ALR 661 Marshall v Marshall [1999] 1 Qd R 173 O’Connor v SP Bray Ltd (1937) 56 CLR 464 Rankin v Scott Fell & Co (1904) 2 CLR 164 Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196 Williams v Stone Homes Pty Ltd [2014] QDC 64
COUNSEL:	P Travis for the Plaintiffs S Hogg for the Defendants
SOLICITORS:	Aitken Whyte Lawyers for the Plaintiffs Celtic Legal for the Defendants