CONSTRUCTION ALERT: The “Big Konundrum” for Builders

2 May 2017

Publications

The recent Supreme Court of Queensland decision in Bigby v Kondra & Anor [2017] QSC 37 is a timely reminder of the obligations of builders in Queensland who have a duty to coordinate and supervise construction projects.

In this case, the Court found that a builder was liable to a homeowner in negligence for the failure to adequately supervise the construction of a residential dwelling following an over-pressurisation in and “explosion” of the residential dwelling, after defectively installed window frames blew in during a severe storm.

In doing so, the Court held that the duty of a supervising builder is not satisfied by simply relying on the professionalism of the subcontractors who the builder is employed to supervise.  Instead, the supervising builder must ensure that they have an adequate opportunity to inspect the work and make reasonable arrangements of a reliable nature to be kept informed of the general progress of the work.  As a builder must balance any supervision obligations with any other obligations to build, be offsite to organise materials and coordinate other aspects of a project, there is no doubt that this can be an onerous obligation for builders to discharge.

Background

In October 2003, Mr and Mrs Bigby (Homeowners) entered into a “Owner/Contractor Agreement” with Mr Kondra (Builder) for the coordination and supervision of the construction of a two storey residential dwelling (House).  In November 2003, the Homeowners and the Builder also entered into a standard form (as it was then) QBSA domestic building contract for the construction of the House.

The Homeowners (and not the Builder) contracted directly with Gateway Aluminium (Gateway) to supply and install various windows.  As a consequence of the “Owner/Contractor Agreement”, the Builder was required to supervise Gateway’s work, even though Gateway was not a subcontractor of the Builder.

The proper installation of these windows required an external aluminium frame to be fixed in each respective window cavity in the building frame using screws through evenly spaced fixing plates.  The window frames were then to be clipped into their respective fixing frames.

The Builder was not at the House when the window frames were installed by Gateway.  The Builder first found out about the installation when arriving at the House to find Gateway’s installer packing up.  As the window frames had been clipped and finished off, the only way for the Builder to inspect whether the window frames had been properly fixed to the building frame was to destroy the window frames themselves.  The Court found that none of the window frames in question had been properly fixed to the building frame.

On 16 November 2008, a severe storm hit the western suburbs of Brisbane, with wind gusts at the House reaching an estimated 216 kph.  As a result of the failure to properly fix the window frames to the building frame, the window frames suffered from “lateral deflection” and were pushed inwards by the force of the wind.  This in turn caused an over-pressurisation in the House and an “explosion” which destroyed the House.

In this unique case, the Homeowners were out of time to bring an action for breach of contract.  Consequently, the Homeowners brought an action against the Builder in negligence.

Issues

The Homeowner’s primary case was that the Builder owed the Homeowners a duty to exercise reasonable care and skill in supervising the work of the construction of the House, including the installation of the window frames.  The Builder’s failure to observe this duty resulted in the defective installation of the window frames by Gateway and caused the loss suffered by the Homeowners.

Decision and Reasoning

The Court found that where the Builder had expressly agreed to provide and be remunerated for supervisory services, the Builder owed the Homeowners a common law duty to exercise due care, skill and diligence in the performance of those supervisory services.  By failing to:

  • make reasonable arrangements of a reliable nature with Gateway to be kept informed of the timetable of installation of the windows; and
  • provide Gateway with clear and express instructions that the window frames were not to be installed to a point which would prevent the Building Contractor from inspecting the quality of the work,

the builder had breached its duty of care to the Homeowners.  The fact that the Builder experienced difficulties in communicating with and obtaining information from Gateway did not relieve the Builder of this duty, nor was the Builder’s duty satisfied by relying on Gateway, whose work the Builder was employed to supervise.  The Court found that the Builder’s proper supervision of Gateway’s installation of the window frames would have revealed the inadequacies of the installation and prevented the over-pressurisation and destruction of the House.

Accordingly, the Court found that the Builder was liable to the Homeowners in negligence.  The Builder was ordered to pay the agreed sum of $1,172,967.62 for reconstruction of the House and lost contents, plus interest of $649,522.81.

What is the “Big Konundrum” for Building Contractors?

Ultimately, regardless of how inconvenient it may be, this decision serves as a timely reminder that supervisors must be present at all times throughout a project, inspecting works as they progress, to ensure that works are performed to an acceptable standard.  As onerous as it may be, builders must be proactive in organising their time to ensure that all duties are discharged.

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Andrew Kelly has been recognised in the 2017 Expert Guide to Construction and Real Estate in Australia, one of only three Queensland based construction lawyers to be recognised.

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For further information please contact:

Andrew Kelly | Partner | +61 7 3338 7550 | akelly@tglaw.com.au

Chris Woodhouse | Lawyer | +61 7 3338 7908 | cwoodhouse@tglaw.com.au