The Owners Strata Plan No. 99779 v Rockdale One Pty Ltd

[2023] NSWCATCD 165

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

The Owners – Strata Plan No. 99779 v Rockdale One Pty Ltd [2023] NSWCATCD 165

Hearing dates:

30 November 2022

Date of orders:

06 December 2023

Decision date:

06 December 2023

Jurisdiction:

Consumer and Commercial Division

Before:

D Goldstein, Senior Member

Decision:

1. Within 14 days of the date of these orders, the parties must file a joint work order which reflects these reasons. If no agreement is reached in the 14 day period, the parties must within 21 days of this order each file a work order which they say is appropriate and reflects these reasons, supported by short written submission of no more than three pages. The Tribunal will than make an appropriate work order.

2. In the event that a party wishes to bring a costs application, such application must be lodged in the Tribunal and served on/given to the costs respondent within 14 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.

3. The costs respondent will have 14 days after the date it receives the costs application to lodge in the Tribunal and serve on/give to the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.

4. The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.

5. Subject to the parties’ submissions, the Tribunal will determine any costs application made on the basis of the papers lodged in the Tribunal.

Catchwords:

BUILDING & CONSTRUCTION – Defective work – Work orders – Inferences regarding extent of defective work

Legislation Cited:

Civil and Administrative Tribunal Act 2013

Home Building Act 1989

Cases Cited:

The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612

Texts Cited:

None cited

Category:

Consequential orders

Parties:

The Owners – Strata Plan 99779 (Applicant)
Rockdale One Pty Ltd (First Respondent)
Piety THP Pty Ltd (Second Respondent)

Representation:

Counsel:
Mr B. Jacobs for the applicant
Mr D. Weinburger for the respondents

Solicitors:
Clyde & Co for the applicant
HWL Ebsworth for the respondents

File Number(s):

2021/00387599 (previously HB 21/32117)

Publication restriction:

Nil

REASONS FOR DECISION

1. On 30 November 2022 one of many hearings in these proceedings took place in relation to defect items that had not been agreed by the parties’ experts after an extensive experts’ conclave process. The defect items in dispute were identified as the ‘hydraulic, fire and structural defect items heard on 30 November 2022.’

2. On 6 March 2023 the parties were ordered to file submissions in relation to the matters dealt with at that hearing.

3. The Tribunal has received the:

1. applicant’s submissions undated but received in the Tribunal on 23 March 2023;

2. respondents’ submissions dated 13 April 2023; and

3. applicant’s reply submissions of 18 April 2023.

4. The applicant’s submissions contain transcript references. Unfortunately these references are of no assistance to the Tribunal since it has not been provided with the transcript, or the recording of the hearing.

5. The evidence at the hearing was:

1. a ten volume bundle which was exhibit A; and

2. three certificates from Greyton Passive Fire Protection which were exhibit 1.

Structural Defects

6. The respondent’s submissions address defect items CP. 200, CP. 201. CP. 202, CP. 203, CP. 204, CP. 205, CP. 206 and CP. 207. These defect items were addressed in the Tribunal’s 12 April 2023 orders and do not fall to be dealt with in this decision.

Disputed access defects

7. The access defects which are the subject of the applicant’s submissions referred to above and which are to be determined by this decision are identified in a joint report as defects CP. 503, CP. 506, CP. 507, CP. 508, CP. 509 and CP. 511.

8. The respondents state that additional defect items are to be addressed such as CP. 500, CP. 501, CP 502, CP. 504, CP. 505, CP. 510, CP. 511, and CP. 512.

9. I find that defect items CP. 500, CP. 501, CP. 502 and CP. 510 are addressed in the Tribunal’s 12 April 2023 orders and do not fall to be dealt with in this decision.

10. I will address defect items CP. 504, CP. 505 and CP. 512 in these reasons in addition to those items referred to at [7].

11. In relation to the defects which I have identified as requiring determination, the experts’ evidence is that these items are defective because of non-compliance with the relevant Australian Standard, but exemptions are available under the Building Code of Australia (BCA) and the ‘Premises Standard’. I find that the respondents have not arranged for exemptions to be provided to the applicant. Nor have performance solutions been provided in relation to the items that have been identified to resolve deficiencies, failures to comply with the contract or relevant building standards, either as documents produced in the construction phase or afterwards.

12. The parties engaged experts to advise them and act in these proceedings, namely Mr Casey for the applicant and Ms Griffen for the respondents. Those experts stated that they had not seen the final occupation certificate which may have referred to or acknowledged an exemption issued under the BCA.

CP. 503

13. I find that the parties’ experts have agreed that the issue described in CP. 503 is a defect and that it will be necessary to ‘raise the bottle trap’.

CP. 504 and CP. 505

14. I find that the experts have agreed that items CP. 504 and CP. 505 are not defects.

CP. 506

15. The experts agree that if there is no exemption which I find to be the case, that CP. 506 is to be rectified by the provision of a wall mounted soap holder in accordance with AS 1428.1.

CP. 507 CP. 508 and CP. 509

16. The experts have agreed that if there is no exemption which I find to be the case, that these items are to be rectified by the method agreed by the experts being, grade ramp to be rectified by handrails to be provided to both sides of the ramp and tactile ground surface indicators to be provided top and bottom of the ramp. As a handrail cannot extend 300 mm at the base of the ramp, wrap the handrail 90° to the perpendicular wall.

CP. 511

17. Because there is no evidence of a performance solution that addresses the subject matter of this item, the experts agree that this item is defective. They have put forward the following rectification scope, namely provide improved lighting to 150lux measured at the height of the handrails and provide a contrast in colour to the handrail. A minimum 30% luminance contrast to the wall is recommended.

CP. 512

18. The experts agree that there is no rectification option possible.

Disputed fire defects

19. The applicant states that fire defects which are to be determined by this decision are identified in a joint report as defect items CP. 80 and CP. 111.

20. The respondent refers to items CP. 642 and CP. 611.These items are addressed in the Tribunal’s 12 April 2023 orders and do not fall to be dealt with in this decision.

21. So far as CP. 80 is concerned, a performance solution has not been tendered to cure the deficiency agreed by the experts at page 457 of exhibit A. The applicant seeks a work order based on the recommended scope of works agreed by the experts. See also page 457 of exhibit A. The respondents submit that it is not reasonable or necessary to rectify this item without explaining why. The respondents also submit that if the Tribunal finds that it is reasonable or necessary to rectify this item, the Tribunal should order it to do so by a licensed contractor based on the recommended scope of works agreed by the experts, at page 457 of exhibit A. I will make a work order in these terms.

22. So far as CP. 111 is concerned while the experts agree that there is a defect as stated at page 460 of exhibit A, they have not agreed a recommended scope of works. The experts do agree that a performance solution is required, although they have not prepared such a solution. Nor has anyone else, so far as I am aware. Item CP. 611 is in the same situation.

23. The respondent submits that nothing further is required.

24. I am not prepared to make a work order in general terms such as the respondent must ensure that an appropriately qualified engineer must prepare a performance solution. The inference to be drawn from the fact that a performance solution has not been provided and the parties’ experts have not provided one, is that it is not possible to obtain such a document. If a rectification scope of works was provided, an order would have been made in those terms. However I see no utility in making a work order when there is no evidence to persuade me that the subject matter of the suggested work order is capable of being fulfilled.

Hydraulic defects

25. The experts disagree whether item CP. 302 is a defect. The applicant’s expert describes this defect as ‘Life threatening non compliance’. The defect said to be a breach of the BCA is described in more detail as:

‘Non-compliant passive fire collars to hot water service entering apartment from hallway on all levels was observed, this fire stopping of penetrating surfaces between different fire compartments is required to prevent the fire traversing from one compartment to another’

26. The remedial solution was stated by the applicant’s expert to be installation of passive fire stopping in accordance with system installation certificates.

27. At the hearing the following experts gave evidence in a concurrent expert session about this item, Mr A.D. Thomas and Ms S Rusbridge for the applicant and Mr T Jones for the respondents. I gained the impression from the evidence of these experts at the hearing that they did not know what had been specified in the building contract in connection with fire collars or mastic for piped hot water service entering apartments from hallways on all levels.

28. In common with the experts providing opinions for access defects, the experts giving evidence about hydraulic defects stated that they had not seen the final occupation certificate, and as a result had no knowledge of what had been certified in connection with passive fire collars around hot water services entering into apartments from hallways, or in connection with the mastic that had been used.

29. The respondents tendered as exhibit 1, 3 certificates from Greyton Passive Fire Protection referring to fire-resistant systems manufactured by Promat Australia Pty Ltd and TBA Textiles. The certificates name the second respondent as the client and the address of the supply as being the address of the strata scheme.

30. The respondents submit that there is no defect, and the fire protection systems are compliant. The respondents rely on the certificates provided by Greyton Passive Fire Protection which are in exhibit 1 to submit that passive fire protection products manufactured by Promat Australia Pty Ltd and TBA Textiles were used in the passive fire protection systems for the building. The respondents submit that it is not disputed that there are no fire collars around the pipes in question, but state that there is mastic around the pipes.

31. In their submissions the parties have referred to the way in which these proceedings have progressed, namely by the way of exchange of scott schedules, rather than standalone expert reports. The parties have observed that this has been a fruitful way of proceeding. I would say that while that is no doubt correct in connection with a great number of defects, but where there is a dispute between the experts, a relatively brief scott schedule entry does not provide the reasoning and details that would ordinarily be provided in a fully considered and researched expert report. For example, when the applicant’s expert states ‘Non-compliant passive fire collars to hot water service entering apartment from hallway’ there is no detail provided about the non compliances that are referred to. This opinion evidence is also undermined by the respondents’ admission that there are no fire collars around the pipes in question, rather than non-compliant fire collars.

32. Mr Thomas referred to plastic PVC pipes that went from the hallway to an apartment. He stated that the sealant around the pipes was not compliant with certificates provided by manufacturers. He stated that there should be a fire collar on either side of the wall and mastic. Mr Thomas stated that he saw this deficiency in multiple apartments, 8 in number, and saw instances of the deficiency on multiple levels which led him to believe that all work of this category was the same. Mr Thomas also stated that the manufacturer of the mastic sealant was not known, but the manufacturer of the colour of the sealant present in the areas he inspected, requires a fire collar to be used in conjunction with the sealant.

33. Mr Thomas also stated that he sought out a number of manufacturers requirements, such as Hilti, Bostick, Promat and Firefly and looked at all applications. He stated that Firefly was the only manufacturer who provided a system without collars, but its mastic was a different colour to the mastic that had been applied.

34. Mr Jones for the respondents stated that no defect had been observed and that fire rated ceilings were in place.

35. Ms Rushbridge stated that she did not know what had been installed around the pipework. She further stated that a performance solution cannot be retrospective, but a Fire Engineering solution can be retrospective. I find that a Fire Engineering solution has not been provided from any source and if one has been, it is not in evidence. She also stated that installing collars could address compliance.

36. Based on the evidence of the experts in the concurrent session, I find that it is common ground that the issue relating to CP. 302 is PVC pipework entering strata lots from common property hallways via penetrations in walls. There is no dispute that the hallway may be characterised as a fire compartment, that the strata lots are also fire compartments and that the wall separating the hallway from the lot is a fire wall. It is common ground that there are no fire collars on either side of the penetration in the fire wall but there is mastic in the penetration. I find that there is no evidence of what the contract required in connection with the treatment of the penetration. I also find that there is no evidence from any person who actually applied the mastic, or had personal knowledge of the application of the mastic, including the mastic actually used. I also find that the experts have not seen the final occupation certificate and therefore do not know what was certified by the private certifier in connection with the treatment of the penetration. I also find that the experts have not inspected every lot in the strata scheme to ascertain whether fire collars are in place and to inspect the mastic used. I find that there are no performance solutions or fire engineering solutions known to the experts concerning the treatment of the penetration. It is against this background that the applicant’s expert states that the treatment of the penetration does not comply with the BCA.

37. As regards the evidence in exhibit 1, the respondents submit that the certificates demonstrate that passive fire protection products were used in the fire protection systems for the building and that they have been certified as compliant by a suitably qualified fire contractor, the signatory of the certificates, a Mr Gill. There are a number of products that are referred to in the certificates which make up exhibit 1. No specific product has been referred to by the respondents in their submissions as being the product that is relevant to CP. 302. However, having regard to the certificates, it seems that the reference to ‘TBA FIREFLY INTUBATT’ manufactured by TBA Textiles for ‘Installation of 2 layers of intubatt to seal penetrations in masonry walls/floors. Seal all gaps with intumescent mastic.’ may be the relevant reference, given that it seems to be common ground that fire collars were not used in the penetrations for pipework entering lots from hallways and that mastic was used.

38. The respondents submit that the applicant has not discharged its onus of proof to contest the evidence in exhibit 1, or provided justification for the need for the rectification option that it contends for.

39. In reply the applicant submits that the certificates in exhibit 1 have no bearing because the experts have not considered the certificates. The respondents’ expert Mr Jones is quoted as stating that he had not seen the certificates. I find that Mr Jones stated in the concurrent evidence session that he had seen fire rated mastic, but he had not seen the certificates. Mr Jones did not expand upon why he regarded the mastic he saw as ‘fire rated’. I do not give this evidence much weight because of the lack of an explanation.

40. As regards, exhibit 1, I find that the certificates at their highest provide a basis for inferring that the products mentioned were as a matter of fact used in every applicable situation. There is however no direct evidence about that. The absence of direct evidence of use diminishes the weight that may be given to exhibit 1, as does the fact that the experts were not asked to consider the products referred to in exhibit 1 during the concurrent evidence session. This is borne out by the evidence of Mr Thomas that the grey mastic is not compliant until the experts know it is complaint. Ms Rushbridge said the same thing when she stated ‘Nothing is compliant until we know it is complaint.’

41. In the absence of evidence about which of the products referred to in exhibit 1 was the mastic that the experts agree has been used in the penetration from hallway to lot through which hot water PVC pipework has been placed, I have made an inference that the product most likely to have been used was ‘TBA FIREFLY INTUBATT’. Mr Thomas’ evidence is that that Firefly was the only manufacturer who provided a system without collars. He stated that its mastic was a different colour to the mastic that had been applied. This provides an evidentiary basis for finding that the TBA FIREFLY INTUBATT mastic was not the mastic used in the penetrations the subject of CP. 302, at the least, in the areas that Mr Thomas inspected.

42. Based on the facts that:

1. the experts agree that they do not know where the mastic that was used came from,

2. Mr Thomas went to the trouble to consider the systems of a number of manufacturers and ascertained that that the only manufacturer who provided a product that could be used without fire collars was Firefly; and

3. Mr Thomas’ evidence was that the mastic that had been used was a different colour to the Firefly mastic,

I have come to the conclusion that the evidence of Mr Thomas should be accepted as he carried out the necessary investigations that I have referred to at [33] above, that the mastic used as explained was not firefly mastic. As a result I find that Mr Thomas’ evidence should be preferred to drawing an inference from exhibit 1 that the TBA FIREFLY INTUBATT mastic was used in every applicable instance including item CP. 302. On that basis I find that the applicant has been successful in connection with item CP. 302 and any identical item in the Hydraulic services scott schedule.

43. The respondents have also referred to the decision of Ward J, as her Honour was then, in The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 referring to [177] – [180] to support the submission that Mr Thomas’ evidence that defects identical to defect item CP. 302 being would be in all lots in the strata scheme was speculative and should not be accepted. Her Honour’s discussion of the relevant topic was from [141] to at least [199] of her judgement. Having regard to that part of her judgement, I will be careful to avoid taking the 4 paragraphs cited by the respondents out of context. Her Honour was considering a bathroom waterproofing claim. At [146] her Honour poised the question of whether the evidence supported a finding as to lack of waterstops/waterproofing generally. In the proceedings before her there had been destructive testing in 3 bathrooms in the strata scheme. The evidence that arose from the testing led to 2 possibilities, or inferences. The first was that there was a decision not to install waterstops at all in those three units. The second was that there was poor workmanship in the three particular instances.

43. At [151] her Honour stated the question for determination:

‘The question is as to what inferences can or should be drawn (from the fact that when such testing was carried out it was found that there were no visible waterstops in three particular units) as to the presence of waterstops in the other units in the building or as to the waterproofing in the units overall.’

45. In the case before Ward J, counsel for the plaintiff owners corporation called for a Jones v Dunkel inference to be drawn against the builder because it did not call evidence of what was actually done in connection with the construction of the bathrooms. In these proceedings the applicant’s counsel does not call for a Jones v Dunkel inference despite the fact that the second respondent was the builder of the building the subject of these proceedings, and it has not called evidence of what products were used in the sealing of penetrations from the hallways into a lot in connection with the hot water pipes.

46. Ward J. was not prepared to draw an inference that the waterstops had not been installed, or had been installed in a defective manner in all units.

47. The issue in these proceedings is whether an inference may be drawn from the evidence of Mr Thomas that he observed that there were no fire collars on the penetrations in fire walls and there was what he considered non-compliant sealant in the penetrations in 8 instances in multiple apartments on various levels, that the same state of affairs existed in every strata lot.

48. I find based on the interim occupation certificate that there are 91 residential lots in the strata scheme. In The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd Ward J found that the owners corporation had tested 3 of 14 units [180]. Her Honour observed that there was no apparent reason why that could not have been done in all of the units. I find that the same comment would not have the same force where the inspection of 91 units imposes a more significant burden on the applicant.

49. I have come to the conclusion that there is little is to be gained in comparing the facts and what was said and held in The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd with the facts in these proceedings. There are 91 strata lots in the present strata scheme. I find that it would be unreasonable to expect an applicant to inspect all lots, or say 50% of all lots, before an inference may be drawn that the state of affairs referred to by Mr Thomas exists in all lots. Additionally and importantly, with respect, I am in a different and if I may say, a more advantageous position than her Honour in that I have the benefit of s48O of the Home Building Act 1989, whereas she did not.

50. Section 48O(1)(c) states:

‘In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate—

(c)  an order that a party to the proceedings—

(i)  do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or

(ii)  do or perform, or refrain from doing or performing, any specified act, matter or thing.’

51. I find that in drafting a work order relating to CP. 302 and inspections of all residential lots to identify similar instances, a balancing exercise may be achieved and the respondents relieved of carrying out rectification work where fire collars are in place which are of a type referred to in exhibit 1. That relief may also be extended to situations where it is plain that the mastic in place is TBA FIREFLY INTUBATT mastic.

52. I find that such an approach is consistent with the guiding principle stated in s36(1) of the Civil and Administrative Tribunal Act 2013 which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. I also find that the approach to making an order under 48O(1)(c) as indicated is appropriate in circumstances where the respondents are responsible for compliance with the BCA, but the circumstances of these proceedings indicate that in an important area, which the applicant’s expert has described as a Life threatening non compliance, little if anything is known about the product used in the penetration of the fire wall.

Disposition of the application

53. The applicant has been successful in obtaining findings that a number of items that are the subject of its claim are defects which should be rectified by the respondents.

54. Those items are CP. 503, CP. 506, CP. 507, CP. 508, CP. 509, CP 511, CP. 80, CP. 302 and all similar instances in all residential lots in the strata scheme.

55. I will order the parties to file a joint work order which reflects these reasons within 14 days of the date of these orders, or if no agreement is reached, the parties must within 21 days of this order file a work order which they say is appropriate supported by short written submission of no more than three pages.

Costs

56. In the event that a party wishes to bring a costs application, such application must be lodged in the Tribunal and served on/given to the costs respondent within 14 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.

57. The costs respondent will have 14 days after the date it receives the costs application to lodge in the Tribunal and serve on/give to the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.

58. The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.

59. Subject to the parties’ submissions, the Tribunal will determine any costs application made on the basis of the papers lodged in the Tribunal.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 08 August 2024