Turcinovic v Queensland Building Services Authority - [2013] QCAT 541

CITATION:

Turcinovic v Queensland Building Services Authority [2013] QCAT 541

PARTIES:	Hajrudin Turcinovic (Applicant)
v
Queensland Building Services Authority (Respondent)

APPLICATION NUMBER:

GAR114-12

MATTER TYPE:

General administrative review matters

HEARING DATE:

3 June 2013

HEARD AT:

Brisbane

DECISION OF:

Paul Favell, Member

DELIVERED ON:

15 October 2013

DELIVERED AT:

Brisbane

ORDERS MADE:

1. The direction to rectify and/or complete number 37292 dated 14 February 2012 is set aside and in lieu is substituted with a decision not to issue a direction to rectify and/or complete with respect to building work located at 60 Denham Street, Tarragindi.

CATCHWORDS:

REVIEW - Building and Construction – application to review a decision of the Queensland Building Services Authority to issue a direction to rectify – Circumstances where work completed – whether building work defective

Queensland Building Services Authority Act 1991 ss 72, 86

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Mr Hajrudin Turcinovic with
Mr R. Paul Baggaley (office manager)

RESPONDENT:

Ms Kirsty Stewart (in-house legal officer for QBSA) and Mr Gary Stick (resolution manager)

REASONS FOR DECISION

The applicant, Mr Turcinovic, seeks a review of the decision of the Queensland Building Services Authority (QBSA) on 14 February 2012 to issue to the applicant a Direction to Rectify and/or Complete Number 37292.
The direction related to the building work he carried out at 60 Denham Street, Tarragindi.
The Tribunal is exercising its jurisdiction under the Queensland and Civil Administrative Tribunal Act 2009 (QCAT Act) to review a decision made by the QBSA. The Tribunal has all the functions of the decision maker and must hear and decide the matter by way of a fresh hearing on the merits.
Under section 24 of the QCAT Act the Tribunal may
a)    confirm or amend the decision; or
b)    set aside the decision and substitute its own decision; or
c)    set aside the decision and return the matter for reconsideration to the decision maker for the decision with the directions the Tribunal considers appropriate.
Section 86(1) of the QBSA Act provides that the Tribunal may review a decision to direct or not direct rectification or completion of work.
The power of the QBSA to require rectification of building work lies in section 72 of the QBSA Act which provides:
“1. If the Authority is of the opinion that the building work is defective or incomplete, the Authority may direct the person who carried out the building work to rectify the building work within the period stated in the direction.
2. In deciding whether to give a direction under subsection (1), the Authority may take into consideration all of the circumstances it considers are reasonably relevant, and in particular is not limited to a consideration of the terms of, including, the terms of any warranties included in, the contract for carrying out the building work.”
The power of the Authority to require rectification of building work is a discretion which must be exercised in accordance with the objects of the QBSA Act.
Section 3 provides: “the objects of this Act are –
a)    To regulate the building industry –
i)     To ensure the maintenance of proper standards in the industry; and
ii)    To achieve a reasonable balance between the interests of building contractors and consumers; and
b)    To provide remedies for defective building work; and
c)    To provide support, education and advice for those who undertake building work and consumers.”
In Stevenson v Queensland Building Services Authority [2005] CCT Q056-04 the Commercial and Consumer Tribunal stated
“in exercising this discretion, the Tribunal must consider the competing interests of the parties involved in their relevant positions. Such things as the innocence or blamelessness of the owners are, of course, relevant. Also relevant is whether or not it can be said that the builder is in some way at fault. Clearly in those cases where the cause of the defective building works can be attributed to the builder, then the exercise in the discretion to favour affirming the decision of the Authority to give the direction is more likely to occur.”
The respondent contends that the Tribunal is required to consider three issues:
a)    Was the work “building work” and was it “defective”?;
b)    Was the applicant responsible for the defective building work?; and
c)    Was the Authority’s decision to direct the applicant to rectify the defective building work reasonable in all the circumstances?[1]
I accept those contentions.
[1]        Barry v Queensland Building Services Authority [2012] QCAT GAR086-11 at [10].
The direction to rectify and/or complete number 37292 was SOR-20 annexed to the statement of reasons for the decision exhibit 2. It was issued on 14 February 2012. The body of the direction contained the following,
“a site inspection was carried out at the above property on 31 January 2012. As a result of this inspection and BSA investigations into the owner’s complaint, you are directed to have a licenced contractor carry out work at the property on your behalf, as per the list on page 3. The time period for completion is 7 days from the date of this document.” (underlining inserted)
Section 72 of the Queensland Building Services Authority Act 1991 provides as follows:
“72. Power to require rectification of building work.
(1) If the Authority is of the opinion that building work is defective or incomplete the Authority may direct the person who carried out the building work to rectify the building work within the period stated in the direction. …
(3) The period stated in the direction must be at least 28 days unless the Authority is satisfied that, if the direction is not required to be complied with within a shorter period –
(a) a substantial loss will be incurred by, or a significant hazard would be caused to the health or safety of, a person because of the defective building work; or
(b) the defective building work will cause a significant hazard to public safety or the environment generally.
(4) Subject to subsection (3), the period stated in the direction must be a period the authority considers to be appropriate in the circumstances.”
In my view, that direction in that form would be likely to be held to be void on the basis of the reasoning in McNabb Constructions Australia Pty Ltd v Queensland Building Services Authority [2013] QSC 057. This review is a review of the decision of the QBSA to issue the direction in the form that it was issued. Because the decision to issue the direction in that form, absent evidence that the authority was satisfied that the direction was required to be complied with within a shorter period would result in a void direction, it would not in my view be appropriate to confirm the decision.
Because section 24 of the QCAT Act allows the Tribunal to amend the decision or set aside the decision and substitute its own decision, it is appropriate for me to have regard to the evidence which has been presented at the hearing in order to determine whether to amend the decision or substitute a new decision.
The applicant entered into a contract with the owner of the land, Mrs Marina Combis to construct a new dwelling at the abovementioned address on 12 March 2009. The contract price was $1,800,007.00. The work was commenced in March 2009 and completed in April 2010.
On 22 November 2011 the owner made a complaint to the respondent, Queensland Building Services Authority, alleging defective building work in relation to the contract. She complained that:
a)    The rear balcony retains water and does not drain after rain;
b)    The ground level floods after heavy rain;
c)    The exterior wall timber feature has peeled; and
d)    There is poor painting work throughout the house.
The respondent subsequently discovered, on 22 November 2011, that the applicant’s ‘Builder – Low Rise’ licence was cancelled.
The respondent forwarded a copy of the complaint of Ms Combis to the applicant on 24 November 2011 by email. That email requested the applicant to attend the site and inspect the alleged defects. On 9 December the applicant indicated to a representative of the respondent that he would visit the property to inspect the defects that weekend.
On 10 January the owner advised the respondent that the applicant had not yet attended the property as agreed. In correspondence on 23 January 2012, the respondent advised the applicant that a QBSA officer, Mr MacDonald would attend the property on 31 January 2012, and requested the applicant to attend along with any subcontractor involved in the work.
On 31 January, Mr MacDonald and the applicant attended the property in the presence of the owner to carry out an inspection of the alleged defects. At that time, Mr MacDonald determined that:
a)    items 1 – 3 of the complaint were category 1 defects;
b)    item 4 of the complaint was a category 2 defect; and
c)    the applicant was responsible for the rectification of items 1 to 3 of the complaint items.
Mr MacDonald later advised the respondent that the applicant had given a verbal undertaking at the site inspection to take temporary measures to prevent further flooding to the lower level until a permanent solution could be reached.
On 9 February the owner’s husband called the respondent to advise that the ground level of the property had flooded and consequently damage had been caused to the property. He requested that the situation be attended to immediately.
On 12 February further damage was caused to the property as a result of flooding from a storm. The owner emailed the applicant requesting that a plumber attend to reduce the flooding from the roof. On 13 February the applicant and a plumber attended and erected a barrier in the water tank room entrance to stop water overflowing but did not stop the flow of water from the roof.
On 14 February 2012, the respondent issued the Direction to Rectify to the applicant, which directed him to engage a licenced contractor to rectify the defects as follows:
“1. The completed tiled floor surface of the rear upper level balcony does not comply with AS 3958.1 – 2007 Ceramic tiles – Guide to the installation of ceramic tiles, Appendix D – Falls in floor finishes in that water pools on surface resulting in a potential slip hazard / safety concern to the building occupants.
(Pertains to item 1 on the BSA complaint form)
2. The completed roof water / rain water tank drainage system located to the lower level basement area is not fit for purpose resulting in the back up of roof / storm water causing flooding to the lower level areas and further resulting in significant water damages to various building elements. The matter further poses a serious health and safety concern to the building occupants.
(Pertains to item 2 on the BSA complaint form)
3. The completed applied clear coat finishes to the RHS Upper level external timber clad wall are not fit for purpose resulting in the back up roof / storm water causing inadequate sealing / weatherproofing of the timbers and further affecting the performance of the building.
(Pertains to item 3 on the BSA complaint form)”
The applicant submits that:
a)    he complied with the hydraulic engineer’s drawings and specifications, as confirmed by the plumber and to the satisfaction of the BCC plumbing and draining inspectorate;
b)    this was not a ‘design and build’ contract and subsequently he is not liable if the design is deficient;
c)    under the terms of the contract he was not liable for design issues and has simply complied with directions;
d)    that the tiling to the balcony was completed in accordance with the owner’s wishes in order to have ‘a continuous surface from the inside to the outside’, and that the fall to the outside was constructed with mind to the height of the lounge entry so that a ‘serving trolley would not run off the edge’;
e)    he cannot see how the tiles ‘could be re-laid to provide the falls necessary to comply with the BCA standards, without actually creating a step at that junction.’
f)     the original tiles were ‘non-slip flat tiles’ but the final result included pebbled tiles as a border around the flat tiles which ‘form a trap for water, before evaporation.’ This is not a safety hazard.
g)    the feature timber panels are constructed of a material chosen by the owner and will require repainting every 12 months. This is similar to other forms of periodic maintenance such as termite inspections. The base structure has its own waterproof membrane. It poses no risk ‘to the health or the function of the building’ and ‘there is no evidence of mould.’
The respondent submits that:
a)    The relevant “building work” the subject of the Direction to Rectify includes:
i)     The installation of the tiles to the rear upper balcony; and
ii)    The installation of the roof water/rain water tank drainage system
b)    In respect of “defective work”:
i)     The respondent submits that item 1 of the Direction to Rectify is defective because water ponds on the surface of the tiles, resulting in a potential slip hazard or safety concern to the building occupants and is non-compliant with Australian Standards.
ii)    The respondent submits that item 2 of the Direction to Rectify is defective because the completed roof water/rain water tank drainage system was not fit for its purpose and posed a serious health and safety concern to the building occupants due to inadequate water tank overflow pipes and inadequate floor waste drainage outlets.
c)    The applicant is not entitled to rely on a defence of following plans/orders to avoid liability. The respondents submit that the QBSA Act specifies that the builder is made responsible for any defective work, notwithstanding the involvement of other professionals.
d)    It was fair in all the circumstances to issue the Direction to Rectify.
On 31 January 2012 Mr Scott MacDonald attended the property in the presence of Mrs Combis and Mr Turcinovic and observed that items 1 to 3 of the complaint items were category 1 defects, item 4 of the complaint items was a category 2 defect and the applicant was responsible for the rectification of items 1 to 3.
His inspection in his opinion revealed that:
a)    the tiled floor surface of the rear upper level balcony does not comply with AS3958.1 – 2007 Ceramic tiles (pertains to item 1 of the complaint);
b)    the completed roof water/rain tank drainage system located atop the lower level basement area was not fit for the purpose resulting in the back up of roof/storm water causing flooding to the lower level areas and further resulting in significant water damages to various building elements. The matter poses a serious health and safety concern to the building occupants (pertains to item 2 of the complaint);
c)    the completed applied clear coat finish to the right hand side of the upper level timber clad wall is not fit for purpose and is adversely affecting the structural integrity of the building because it has deteriorated to the point where the finish is delaminating away from the cladding causing inadequate sealing and weatherproofing of timbers (pertains to item 3 of the complaint).
“Defective building work” is defined in the Defects Policy as “building work that is faulty or unsatisfactory and includes, for example, work that… does not comply with… an applicable Australian Standard”. Category 1 defective building work is defined in the Policy as “building work… that is faulty or unsatisfactory because it …
a)    adversely affects the structural performance of a building work;
b)    adversely affects the health or safety of persons residing in or occupying a building;
c)    adversely affects the functional use of a building;
d)    allows water penetration into a building.”
On 9 February 2012 the QBDSA was notified that the underneath of the house had flooded the previous night due to the alleged defect and as a result the carpet had to be ripped up and possessions were damaged. Mrs Combis’ husband was anxious that something be done immediately. Mrs Combis informed the Authority that Mr Turcinovic had given Mrs Combis and Mr MacDonald a verbal undertaking at the site meeting to put in place some temporary measures until he was able to satisfactorily rectify the defects.
By 14 February 2012, after further rain and flooding, Mr Turcinovic and his plumber attended the property and erected a wooden barrier in the tank room entrance to prevent further flooding. On that same day, Mrs Combis was advised by the QBSA that it issued the direction to rectify to the Applicant. The Direction required Mr Turcinovic engage a licenced contractor to rectify items 1 – 3 at the property within 7 days.
With respect to item 1 of the complaint Mr MacDonald noted in his report that “inadequate grade (fall) of the tiled surface to the centre area of the floor… water test performed on the tiled surface revealed that water pools adjacent to the central floor area around the outdoor table setting and to the path of travel. The inspection identified that the water remained on the tiled surface for the duration of approximately 45 minutes after the cessation of the water test”.
I was informed during the hearing that the tiles used were non-slip tiles. There was no evidence of how water on those tiles could adversely affect the health or amenity of the occupants. The report by Mr MacDonald identified a minimal grade (fall) to the central area of the tiled floor.
Mr MacDonald concluded, however, that this contravened AS3958. In Appendix D and D1 it states that: “the primary consideration for falls in floor finishes is to ensure water does not remain on the finished floor in a manner that can adversely affect the health or amenity of the occupants or deteriorate building elements”. Item 1 was deemed defective by Mr MacDonald because the installation contravened the Australian Standard and adversely affected residents’ safety.
On the evidence presented to me, I am not satisfied that the item 1 issue was a category 1 defect. I am not satisfied that it was adversely affecting the structural integrity or the performance of the building, nor was I satisfied that it constituted a health or safety issue. Appendix D provided that water should not pond on the floor with the exception of residual water remaining due to surface tension. That aspect was not really addressed and I do not know whether the residual water remained because of surface tension and the type of tiles used. The photographs which were provided, to my mind, did not identify pooling but seemed to indicate likely residual water remaining due to surface tension.[2]
[2] Exhibit 6.
With respect to item 2 of the complaint, Mr MacDonald observed that the entire roof water is being directly conveyed to the rain water tanks which are located in the lower level basement area of the building…. Rain water tank overflow pipes appear to be inadequate in size… the 1 x 100mm diameter of floor waste drainage outlet installed to the entire stank storage room… is considered to be inadequate. The Applicant contends that the item was done “in accordance with hyrdraulic drawings”.
Mr MacDonald concluded, however, that the Applicant had not complied with the drawings because he installed only 2 instead of 4 rain water tanks; connected 100mm PVC drainage outlet lines to a 150mm PVC main storm water drainage line (instead of 150mm lines to a 225mm main line) and installed only one 100mm overflow outlet instead of one 300mm x 300mm sump/overflow outlet.
I am satisfied from the evidence given that item 2 of the complaint concerned with the inadequate drainage system outlets/discharge was a category 1 defect and was adversely affecting the structural integrity and performance of the building. Further, I am satisfied that it would constitute a health or safety issue.
Mr Anthony Allen gave evidence of remedial work that had been carried out and I am informed that the work the subject of the directions has been carried out.

I am also informed that the applicant is no longer licenced to carry out building work. In my view the circumstances to which the guideline policy applies do not require rectification of the building work. That is because the rectification has already occurred. In my view given that I have already decided for the reasons given that the actual direction given should not have been given and the decision to so give that direction was flawed, there is no utility in amending the decision under review or substituting a new decision. If there was some utility in substituting a decision or amending the decision under review the decision would only be that there be a direction to rectify that which was identified as item 2 on the BSA complaint form and which was the second direction in item 2 on the schedule to the direction dated 14 February 2012. Further the direction would necessarily allow the time for rectification provided for in section 72. As I understand it the parties did not need to address that which was item 3 in the schedule and in those circumstances I would not have made a direction with respect to that item.
In my view the work which was identified in this review was building work but only the work identified in item 2 was defective in the sense that it was faulty or unsatisfactory.[3] Further insofar as the tiling on the balcony was concerned having regard to what was actually constructed, the lack of adequate evidence as to the work being defective and the directions given by the owners as to the construction of the balcony in my view it would not be reasonable to direct the applicant to remedy the tiling to the rear balcony.
[3] Definition of “defective” in schedule 2 QBSA Act.
As to the second item, I am satisfied that the hydraulic design was not followed, the rain water tank overflow pipes were inadequate, the effective discharge of storm water was restricted, there was inadequate drainage provided in the tank storage room, and there was overflow of tank water to a height greater than the hob located in the tank storage room allowing it to penetrate lower levels of the house. In my view those matters constituted a category 1 defect under the defects policy and they adversely affected the structural performance of the building, adversely affected the health and safety of persons residing in or occupying the building and allowed water penetration into the building.
The Tribunal declines to confirm the decision of the Authority to direct the applicant to engage a licenced contractor to rectify defective building work as particularised in items 1 and 2 of the direction to rectify and/or complete number 37292 dated 14 February 2012 and sets aside that decision and substitutes the decision with a decision not to issue a direction to rectify and/or complete with respect to building work located at 60 Denham Street Tarragindi completed by the applicant.