Yan v Queensland Building Services Authority - [2012] QCAT 519

CITATION:

Yan v Queensland Building Services Authority and Anor [2012] QCAT 519

PARTIES:	Lihong Yan (Applicant)
v
Queensland Building Services Authority (First Respondent)
Anthony Brian Lapham (Second Respondent)

APPLICATION NUMBER:

GAR106-11

MATTER TYPE:

Building matters

HEARING DATE:

27 and 28 September 2012

HEARD AT:

Brisbane

DECISION OF:

R F King-Scott, Member

DELIVERED ON:

22 October 2012

DELIVERED AT:

Brisbane

ORDERS MADE:

1. Decision of the First Respondent affirmed;

2. Application dismissed.

CATCHWORDS:

Domestic building contract – Complaints made – Direction to Rectify – Further complaints – amended Direction to Rectify – Contractual disputes – Owner's relationship with builder

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Ms Li Li representing the Applicant

RESPONDENT:

Mr E T Bird, Solicitor

REASONS FOR DECISION

The Tribunal has before it an Application for a Domestic Building Dispute filed on 7 April 2011 and an Application to Review a Decision filed on the 19 April 2011. Both are filed on behalf the homeowner, Lihong Yan and relate to the property he owns which is situated at 18 Ebb Drive, Bellmere. The former application appeared to have been filed in error as the Queensland Building Services Authority (QBSA) was named as the Respondent. No further steps appear to have been taken in respect of this application. The application the Tribunal is considering is a review of the decisions of the QBSA. The initial decision sought to be reviewed was made by the QBSA on 7 March 2011.
Section 86 of the Queensland Building Services Authority Act 1991 (the “QBSA Act”) sets out the scope of QCAT’s review jurisdiction in respect of the QBSA’s decisions. The review jurisdiction of the Tribunal is by way of fresh hearing on the merits. The Tribunal’s function is to review the decision, not the process by which it was arrived at. There is no presumption that the decision of the QBSA was correct.[1] This Tribunal endeavours to produce the correct and preferable decision.[2]
[1] Kehl v Board of Professional Engineers of Qld [2010] QCATA 58.
[2] Sections 19 and 20 QCAT Act.
The building inspector at that time was Mr William Shipp who issued a decision letter of 7 March 2011 to which the review relates.
The builder was the Second Respondent Anthony Lapham.
Although, the Applicant homeowner is stated to be Lihong Yan, for all practical purposes, the real applicant is a Miss Li Li[3], who holds Power of Attorney for Mr Yan. Mr Yan resides in China and, although a permanent resident of Australia, visits here irregularly. He appeared to play no part in the pre-contractual negotiations, the construction of the house or post construction disputes.
[3]Ms Li has satisfied the Tribunal’s Direction of 9 February 2012 that Mr Yan provide a statement of evidence that he has instructed Ms Li to commence these proceedings on his behalf and that she has authority to conduct the proceedings on his behalf.
The issue involved in this review is complicated by the fact that the builder claims to have lived in a relationship with Ms Li Li for a period before and during the construction of the home. Towards the end of the construction, the relationship broke down.
The applicant retained Handovers.Com Pty Ltd to assess the construction of the building. The report identified 134 items that required attention. Before proceeding further, it would be beneficial to set out a chronology of events:
19/08/09Applicant entered into the contract with the builder
04/10/10First complaint received by Authority
21/10/10Second complaint received by Authority
18/11/10Applicant notified the builder of the defective and incomplete works at the property
07/12/10Third complaint received by Authority
11/01/11William Shipp, building inspector carried out an initial inspection at the property
02/03/11Authority had a meeting with the builder
07/03/11Authority’s decision
10/03/11Authority advised the Applicant of its decision
13/04/11William Shipp carried out a reinspection at the property
19/04/11Direction to rectify and/or complete No 36144 issued
10/08/11First Compulsory Conference
10/11/11Second Compulsory Conference
11/11/11Fourth complaint received by Authority[4]
21/12/11Reinspection carried out by Gary Stick
30/03/12Amended Direction to rectify and/or complete No 37437 issued
16/05/12Third Compulsory Conference
[4]This complaint was not subject to this review as the Applicant had not complied with the QBSA requirements, further, they related to Category 2 defects and were reported more than 6 months after completion or after the defects were left incomplete. See Rectification of Building Work Policy – Queensland Building Services Board.
The QBSA prepared a report dated 3 March 2011 that addressed each of the 134 items. The author of that report was Mr William Shipp. Following that report, the Direction to Rectify and/or Complete Number 36144 [DTR] issued.
Mr Shipp left the employ of the QBSA and his superior, Mr Gary Stick, took over the file. Mr Stick reviewed Mr Shipp’s DTR and prepared his own report. That report is dated 7 February 2012. From that report, an Amended DTR Number 37437 issued on 30 March 2012.
At the hearing, the solicitor for the QBSA tendered a colour-coded document that identified, respectively, the items already rectified, those to be rectified under both directions, and those to be rectified under the second direction. As a consequence, the items still remaining in dispute are items 1, 3-5, 7-13, 15, 18-22, 24, 25, 27, 29, 32, 35, 37, 38, 46, 47, 51, 64, 65, 107, 111, 112 and 130 [34 items in total].
The bulk of the above items [17] comprise outside painting that the QBSA determined was not part of the contract.
With the exception of the external painting and incomplete landscaping, the other items in issue are not of great significance. The QBSA determined that some items were not part of the contract and others were contractual in nature. That is they were not defective or incomplete but allegedly did not comply with the contract.
The builder admits that he received payment for the various stages under the contract with the exception of one payment being the first stage payment. He says he received only $7,842.87 of that payment. I will deal with this further later in these reasons. In addition, Mr Lapham received other payments.
Mr Lapham admits that he received the bulk of those payments, but denies that he ever received an additional sum of $20,000 from the applicant or Ms Li Li for which he signed a receipt. He had no explanation for the receipt. The history behind these payments is unclear. However, it is relevant to describe how the construction was undertaken.
Mr Lapham gave evidence that he met Ms Li in 2008 as a customer at her business. They struck up a friendship and, subsequently, Ms Li asked Mr Lapham to construct a house for her. Mr Lapham was a registered builder, but had other business interests, including a furniture removalist business. He was not actively engaged in building at the time, and had not been for some time. Ms Li was anxious to progress the project. They visited some display houses for ideas. Mr Lapham then retained a friend who was a draughtsman to draw up some plans. He was able to obtain them at a discount price.
Initially, the building contract was to be in Ms Li’s name, however this was changed for reasons it is not necessary for me to relate here.
Mr Lapham says that in order for Ms Li to get finance from the bank, it was necessary to keep the price of the home at a level that would satisfy the bank.
In cross-examination by the QBSA, Mr Lapham stated that the true value of the house was about $500,000, but that he inserted the sum of $252,000 in the contract for the reasons stated above. According to Mr Stick, an Inspector employed by the QBSA, the value of the house would be considerably more than $252.000, possibly $350,000 but not as much as $500,000.
Mr Lapham made these concessions because at the time he was living in a relationship with Ms Li and they were building a home together. He advised that Ms Li assisted in some aspects of the construction and painting.
Mr Lapham was paid most of the progress payments under the contract save for the sum of $17,357.13 for which he issued a receipt but was not paid. This, he said in evidence, was to enable Ms Li to get some further finance or draw from the bank, or at least this is what he was told. When Mr Lapham put in his request for payment of the first stage of $25,200.00, that sum was deducted and he was only paid $7,842.87. The bank statements of the Applicant are consistent with this scenario. As he was reliant upon being paid for each stage to fund suppliers for the next stage, a short fall in an instalment meant that he had to fund it himself which he did.
It became apparent from the evidence that the contract was not an arms length transaction between a builder and home owner but rather a facility required by the bank to enable funding to continue. Further, Mr Lapham no doubt thought Ms Li and he would mutually benefit from their joint endeavours.
Ms Li is Chinese and a permanent resident of Australia. She had an interpreter to assist her in the course of the hearing and gave evidence that she has difficulty speaking and understanding English. She also gave evidence that she has difficulty reading and writing English. Mr Lapham tendered, in the course of his evidence, a “love letter” in English from Ms Li to him dated 20 May 2009. The letter appears to demonstrate Ms Li has a better understanding of English than she asserts. Subsequently, she explained that the love letter was dictated by her to a friend who wrote it in English and then she transcribed it in her own hand. I am not convinced that was the case.
I have formed the opinion from her responses to some questions, some of which were in English, that Ms Li has a better understanding of English than she claimed. Although I accept that she has difficulty speaking English, I am not convinced that she had difficulty understanding it. She is an intelligent person, as she demonstrated in the course of the hearing by an acute understanding of the evidence, particularly, evidence that assisted her case.
I also formed the opinion from her reluctance to answer questions directly on issues that might embarrass her case, that she was not being candid in her evidence. This was clearly so when she was asked questions about her relationship with Mr Lapham. She was not forthright about her relationship with Mr Lapham. Indeed, if Mr Lapham had not been made a party to these proceedings, a step that Ms Li opposed in written submissions, the Tribunal may never have been aware of the close relationship that existed between the two.
She denied that there was any close relationship but admitted some occasional sex. This is inconsistent with Mr Lapham’s evidence, the love letter I have already referred to, and a photographic album of a trip that Mr Lapham took to China accompanied by Ms Li. In it, he is photographed with Ms Li and her parents and other relatives and friends in what appear to be happier moments.
I gave Mr Lapham an opportunity to give evidence even though he had not complied with the directions about filing statements of evidence. It would have been impossible to make sense of the matter without some explanation from Mr Lapham and, the interests of justice warranted this course.
As Mr Lapham’s relationship with Ms Li was not clearly put to her by Mr Lapham and the love letter was tendered without Ms Li having an opportunity to address it, I then gave Ms Li a further opportunity to respond to these matters. She accused Mr Lapham of having raped her shortly after their initial meeting and before the building contract was entered into. She attacked his integrity, accused him of all sorts of dishonesty and attempted to blacken his character in the eyes of the Tribunal. However, during the time these events were alleged to have occurred she remained in a relationship with him, wrote a love letter to him, travelled to China with him and, ultimately, built a house with him.
It is clear from my comments above that I have difficulty accepting Ms Li’s evidence where it is contentious. At the same time, I do not necessarily accept Mr Lapham’s version where it is uncorroborated. I am able to reach the findings I have on other evidence.
Mr Stick said he had some concern whether he should exercise his discretion, under s 72(14) to order rectification on a number of issues because in the circumstances it would be unfair to Mr Lapham. I presume because Mr Lapham, allegedly, is still owed money under the contract. Ultimately, he decided against that course. However, in my opinion, the relationship between Mr Lapham and Ms Li is a consideration that counters the exercise of the discretion in Mr Lapham’s favour. One of the objects of the QBSA Act is the maintenance of proper standards in the industry[5], which I take to mean proper standards of workmanship and construction. There is no reason why those standards should be overlooked because of the relationship between the building contractor and consumer. Fortunately for Ms Li, the QBSA have issued DTRs in 100 of the 134 items complained of, and, although, I am obliged to look at the matters afresh, I have come to the conclusion that I should not interfere with that decision.
[5] Section 3 (a)(i) QBSA Act.
It is necessary for me to consider each of the remaining items. However, I can consider the external painting together and they comprise items 1, 3, 4, 5, 7, 8, 9, 10, 11, 15, 18, 19, 20, 22, 25, 29, 32, 35 and 37. The QBSA say that external painting was not part of the contract.
Before considering the matter further I should say something about the contract. The contract comprised the standard QBSA Major Works Contract for Domestic Building Work. Mr Stick who gave evidence said the specifications in this case were in the usual form and comprised a number of standard form addendums on Mr Lapham’s letterhead. Those relating to painting, clearly included internal painting but not external painting. Mr Lapham gave evidence that he painted the external soffits. Why he did so is not explained save for their relationship and that, at the time, both would mutally benefit from the work. There were 2 documents that related to external painting, the first contained a handwritten insertion of “owners choice to value of $850”. That was said by Ms Li to relate to the entry door, which makes sense when one looks at the form. The second specification form contained an entry “tbd” an abbreviation for “to be decided”. In my opinion, it is clear from the contractual documents that external painting was not included.
There were no variations to the contract that complied with the requirements of the contract or with Part 7 of the Domestic Building Contracts Act 2000.
Item 8 was the colour of the mortar in the front window. Ms Li said she was not concerned about that and it did not require any further rectification.
Item 10 was damage to a pool fence. Mr Lapham admitted that he had hit it with the bobcat. He estimated the cost of rectifying this was would be the replacement of a post from Bunnings at a cost of $110; Ms Li, on the second day of hearing, produced a quote for $1,215, which related to the replacement of 4 posts. This is not a matter for review.
Items 12 and 13 relate to the termite barrier. Mr Lapham said that the termite barrier had been completed in accordance to the specifications and that a Form 16 had issued, but no form was tendered. Subsequently, after Mr Lapham had given evidence, Ms Li’s specific concerns became apparent. Ms Li referred to the sketch attached to the warranty that indicated that the treated area appeared to go round only part of the building perimeter. I am unaware that she has any other basis for her concern other than the reference in the Handovers.com document which was addressed by both building inspections. However, there are warranties provided by Smartfilm Termite Protection dated 23 December 2009. The QBSA found there was no defect in relation to these 2 items. Mr Stick’s attention was drawn to the incomplete perimeter in the sketch. He explained that there were a number of explanations. One could be that there was a reticulated system in place or that the slab edges were exposed. I am inclined to the view that the barrier has been properly installed and no rectification is necessary.
Item 24 related to a gutter that was 25mm short. From the photograph, it is difficult to identify any actual defect. The QBSA have found there to be no defect. If there is a defect, it is of minor aesthetic impairment. I do not consider it a defect.
Item 27 – landscaping incomplete. This was not part of the contract and it is the reason why the QBSA did not direct any rectification. Ms Li relies upon a handwritten document signed by Mr Lapham that is dated 17 June 2010 and includes a number of items, one of which is landscaping to the yard. The document states: “I Anthony Brian Lapham have agreed to complete work as follows to obtain final payment from Ms Li” and one of those items is landscaping to the yard. The work was to be completed by 17 June 2010 but the document is undated. There is no quantification of the landscaping required nor is there any description of the landscaping to be carried out. Further, the document acknowledges that Mr Lapham has agreed to carry out this work in order to receive his final payment, which he was entitled to in any event. It appears that there was in fact no consideration for the promise to carry out such additional work.[6] This is not a matter for rectification.
[6] Roscorla v Thomas (1842) 3 QB 234.
Items 46 and 47 – cabinet handles and speaker wire exposed. The QBSA rejected these items as being contractual. There is a photo of the cabinet which does not have handles on the exterior draws. Mr Lapham gave evidence that he made this cabinet himself and installed it himself and that he did not have an opportunity to put the handles on because the relationship between them came to an end and Ms Li took occupation of the house on 22 May 2010. The speaker wiring was carried out by his brother. It is contractual and not within the contract. In any event it appears to be a minor matter and again I am not prepared to make any order that it be rectified.
Item 51 – ball catch on lounge room door. This was rejected by QBSA as contractual. It appears that there is no stopper there and it is not clear whether one was actually required. Ms Li did not consider it a matter requiring attention.
Items 64 and 65 – sound deadening mats under sink and splashback tile lip on the breakfast bar. Again, these were rejected by the QBSA as not amounting to a defect. Ms Li did not consider that they required rectification.
Item 107 – architraves do not match rest of the house. Ms Li did not consider this required rectification. The QBSA considered it was contractual.
Items 111 and 112 – the kitchenette sink was slow to drain and kitchenette splashback silicone finish. It was suggested in the QBSA report that there may be a blockage in the sink. Apparently, the flat, since completion, had been used by backpackers. The suggestion was that a plumber should be retained to have the sink cleared. The QBSA said there was no defect. Ms Li, in cross-examination, admitted that she had not had a plumber look at the problem. She said that the plumber who had been engaged as a subcontractor in the construction of the building had not returned to complete his work. She was waiting for him to do so.
In conclusion, the items for which DTRs have not been made by the QBSA, are in my opinion, without exception, not matters which fall within the QBSA’s power to order rectification.

I confirm the decision of the QBSA and dismiss the application to review by the Applicant.