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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Campagnolo v Bennett  QCAT 13
JESSE SEABROOK BENNETT
24 January 2020
16 October 2019
The Tribunal directs by way of interim orders that:
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – Domestic Building Dispute – builder’s failure to progress work – builder abandons works – whether builder or owner entitled to terminate – whether subsequent incomplete and defective work found subsequently to repudiation a further basis for repudiation – where defective and incomplete work – reasonable costs of rectification – whether owner entitled to solatium
Queensland Building and Construction Commission Act 1999 (Qld)
Clarke ν President, Councillors and Ratepayers of the Shire of Gisborne  VR 971
Centreplex Pty Ltd v Noahs Rosehill Waters Pty Ltd  WASC 252
Keswick Developments Pty Ltd v Keswick Island Pty Ltd  2 Qd R 114
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623
Mersey Steel and Iron Co. v Naylor, Benzon & Co (1884) 9 AC 434
Ross T Smyth & Co Ltd v T D Bailey, Son & Co (1940) 3 All E R 60
Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359
Shevill v Builders Licensing Board (1982) 149 CLR 620
D McKinstry, solicitor of WGC Lawyers
REASONS FOR DECISION
- Myra Campagnolo owned a home at 35 Hargrave Street Kurrimine Beach situated approximately hundred kilometres or so south of Cairns. The Applicant, Donna Campagnolo is the homeowner’s daughter and resided in the home. She is authorised to bring this claim on her mother's behalf.
- In 2015 the Applicant's mother authorised her to carry out renovations to the home. The Applicant had been impressed with some work her cousin, the Respondent, had carried out at another property. The Respondent is an architect and, the time of negotiations in September 2004, recently had obtained a QBCC Builder's License in the class of ‘Builder-Low Rise’.
- The Applicant says she asked the Respondent to carry out the renovation work as she knew he was looking for work. She informed the Respondent that she wanted to remove the existing carport and build a single story extension including a kitchen, bathroom and bedroom and that her budget was $150,000. The Respondent prepared three sets of plans for the renovation and the Applicant chose one. An itemised quote was prepared and accepted by the Applicant at a higher figure of $208,500.
- On 25 November 2015 the Applicant and the Respondent entered into a QBCC Level 2 Renovation, Extension and Prepare Contract. The fixed-price component was $29,655 (including deposit) including GST. The prime cost component (brick and block supply) was $7,503 including GST and the provisional sum component was $163,620 including GST. There were 8 stages when progress payments were to be made. The work was to be completed in 111 days.
- The Applicant says she has paid $248,733 in total. The Applicant does not dispute the Respondent’s claims for provisional sums or prime cost items even though she has not been provided with any documentary evidence of the time of payment.
- During the course of construction, the Respondent issued progress claims but not in accordance with the staged payments provided for in the Contract. What occurred, according to the Applicant, was that the Respondent's wife Anne Marie Bennett simply made requests for payment which the Applicant attended to.
- The Applicant complains that there were many cost overruns and she was never given any prior notice. As an example, she says the roof decking and columns were costed at $12,400 but the actual cost was $23,694. This over run was never brought to her attention. The structural steel and paint had a provisional sum of $18,000 but cost $31,848. Again, she was not notified of this over run.
Progress of work
- Work commenced in December 2015. No extensions of time were requested under the terms of the Contract or at all. Work appeared to progress satisfactorily for a while.
- On 20 April 2016, despite paying $4,715.95 for Building Certifier's fees the Applicant has not received any certificates relating to stage completions or final completion of the work.
- The Respondent emailed the Applicant on 11 November 2016 to explain why completion was delayed. The Respondent replied, inter alia:
Looks like at the end of the day we’ve made approximately 24k, - means we haven’t been able to pay ourselves the 26k we were supposed to, though we’ve done a lot of extra work to keep costs down.
I know this isn’t your fault at all – and we are not unhappy or anything – just want you to know so you understand where we are at.
All of the materials in this costing have been costed using our trade price too (average of 5–30% off) – there is no builders margin on materials or contingency allowance as we agreed.
We also acknowledge that the build has taken longer than expected, a lot of this reason (sic) has been because as costs have mounted we have taken on other work to supplement our income.
We do really appreciate your amazing patience and know it must have been pretty stressful/frustrating at times when we have been off – site. We also really appreciate the opportunity to work on your house.
Now it is almost finished, I really hope you are happy with the outcome so far and like the extension, I think we’re achieved some pretty awesome spaces - the bathroom, bedroom and kitchen work well together well and the breezeway it well & truly working as planned cool the house. Once the turf is down it will be even better!
Regarding the deck and other things above, given the finances we will have to charge for any extra materials & work as we are flat out of cash. You’ve already waited for us so much, and I know we are busy with this job in TBA - I am wondering if you know a local carpenter to complete the deck when the kitchen is being done? It might be easier & cheaper to deal direct.
Of course, we will sign off on our licence and organise the final inspection when this is done – just let us know your thoughts.
(reproduced without correction)
- The Respondent alleges he did not receive a reply to his 11 November 2016 email. The Applicant admits that is the case because she was unaware of it as she found it in her junk folder, at about Christmas time. She says that she had spoken to the Respondent’s wife, Anne Marie, on 4 November 2016 when she was advised the Respondent would be returning to the site in a week or so and had expected to receive a phone call to organise a meeting.
- The Respondent at no time followed up the email of 11 November 2016.
- Whilst construction work was slow and frustrating for the Applicant, she did not take issue with the Respondent about the slow progress until April 2017. At that time, she telephoned the Respondent and left a message asking him what was going on and when would he be returning to finish the house. She received no response. She telephoned again in June 2017 left a further message. The Respondent returned her call advising that they needed to meet and he would get back to her. He did not.
- On 7 November 2017 the Applicant emailed the Respondent requesting a meeting to discuss defects that needed fixing and to discuss why works required under the Contract have not been completed two years after the building work commenced. The Respondent advised that he was compiling all of the receipts and budget information and would provide copies of everything for the Applicant's records. He would be in touch the following week.
- On 10 November 2017 the Respondent sent a letter to the Applicant which I reproduce in its entirety. It reads as follows: –
As evidenced by Attachment 1 and as notified to you in writing on 11 November 2016 the budget and labour resources allocated to your project are actually beyond expended. As per discussions at the time and the lack of response from you or participation in the final scheduled meeting we effectively terminated our contract and handed site over to you at this time. This is in accordance with our contractual agreement.
The building thus far has been completed in accordance with the agreed plans, up until the time when you notified us verbally and in writing that we should stop work on the kitchen and bathroom due to your wish to deviate from the agreed plans.
As demonstrated by Attachment 2, the overall cost of the project thus far actually falls below the lowest expected cost estimated by the industry. Please note this estimation does not even include the beachfront-cyclonic location/engineering requirements, remote site allowance, entire carport area demolition works or GST.
Upon consideration the above information, I should think that you will be more than pleased with the value for money you have received.
If you, or Myra, have any further concerns in relation to this project not addressed by the above and enclosed information, please put them forward in writing to the address below so that they may be considered appropriately.
- The Applicant emailed the Respondent on 15 November 2017 in the following terms:
I don't want to have to go to the QBSA about the state the renovation is in. If you have no intention of doing anything about it I will have to take further action. It has been almost 2 years since it was started and you have a deadline of 111 days which I don't want to enforce but if this is not resolved I will have to.
- The Respondent did not reply to this email. In his statement in response he says the email contained threatening language but no actual complaint or details that the Respondent could respond to. The email speaks for itself. Although, short on detail, it is obvious that the writer is frustrated and wants the project finished.
- The Applicant says that it was apparent from the Respondent’s email to her of 11 November 2016 and letter of 10 November 2017 and his failure to respond to the 15 November 2017 email that he no longer considered himself to be bound by the Contract and did not intend to return to complete the renovation.
- The Respondent denies that the letter of 11 November 2016 represented a repudiation of the Contract as it invites the Applicant and/or her mother, if they had concerns about the project to forward them in writing to the Respondent. At the hearing, in evidence, he claimed no legal training and did not appreciate the significance of the letter.
- The Respondent had his solicitors respond by letter dated 29 June 2018. It alleged that the Applicant had since 10 November 2016 engaged another contractor to work on the kitchen and by such conduct was in repudiation of the contract. It in turn accepted that repudiation and elected to terminate the contract.
- Repudiation of a contract is a serious matter and is not to be lightly found or inferred: Ross T Smyth & Co Ltd v T D Bailey, Son & Co. In considering it, one must look to all the circumstances of the case to see whether the conduct ‘amounts to a renunciation, to an absolute refusal to perform the contract’: Mersey Steel and Iron Co. v Naylor, Benzon & Co.
- In Keswick Developments Pty Ltd v Keswick Island Pty Ltd  2 Qd R 114, Muir JA (with whom the other members of the Court agreed) set out the principles upon which repudiatory conduct was to be determined:
 The existence or otherwise of repudiatory conduct is to be determined by reference to [Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 658]:
An issue of repudiation turns upon objective acts and omissions and not upon uncommunicated intention. The question is what effect the lessor’s conduct ‘would be reasonably calculated to have upon a reasonable person’… It suffices that, viewed objectively, the conduct of the relevant party has been such as to convey to a reasonable person, in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it.”
 A contract may be repudiated also if a party “shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way”. [Shevill v Builders Licensing Board (1982) 149 CLR 620, 625, 626 per Gibbs CJ, with whose reasons Brennan J agreed.]
- In my opinion, the conduct of the Respondent and his email to the Applicant of 11 November 2016, the Applicant’s email to the Respondent of 7 November 2017 and his email in response of 10 November 2017 and his failure to respond to April telephone calls and the Applicant’s 15 November 2017 email and his explanation for not doing so all evidenced an intention that he no longer considered himself to be bound by the Contract and did not intend to return to complete the renovation. I find that he repudiated the contract.
- The Applicant further submits that the joint report of the experts following the first of the Experts Conclave which related to liability issues showed such a high degree of ineptitude by the Respondent that it provided a further basis for termination of the contract. The ineptitude was as evidenced by the inappropriate and unskilful way in which the works were performed, the defects, subsequently, detected and the work that remained uncompleted. The Applicant relies upon the decision of Shepherd v Felt & Textiles of Australia Ltd as authority for the proposition that the termination can be justified by proof of prior existing circumstances that the terminating party was unaware of at the time of giving notice.
Where a promisee elects to terminate a contract, what matters is whether the promisee is entitled to do so, not the basis stated by the promisee for doing so. Termination of a contract may be justified by reference to any ground that was valid at the time of termination, even though it was not relied on at the time.
- I am of the opinion that the subsequent issues of defective and incomplete work are so grave as to be, itself, a basis for termination of the contract.
Uncompleted and defective work
- The Respondent has failed to return to complete the work. He asserted in his email of 10 November 2017 that the building ‘thus far has been completed in accordance with the agreed plans’. Subsequent investigations reveal that not to be the case. Consequently, the works have remained incomplete and exposed to the weather. Further, inspections have revealed significant defective work.
- During the course of the build the Applicant expressed dissatisfaction with the suitability and design of the kitchen, the workmanship in respect of the bathroom and ground floor deck. She asked the Respondent to stop work on those items and volunteered that she would attend to rectifying them at her cost. I have set out below the concerns and complaints in respect of those matters.
- The plans provided for the existing deck to be extended to create a larger outdoor space. It is disputed whether the existing deck was built on ground over gravel or on hardwood bearers, as the Applicant maintains. The Respondent alleges that the Applicant wished to use recycled timber from an old bridge. The timber would have to be re-milled to specifications provided by the Respondent.
- The Respondent says that on inspection of the existing deck it was noted to be riddled with pests and was rotten. This is disputed by the Applicant though she concedes that some planks had dry rot.
- The Respondent built some concrete strip footings to suit the size of the timber. The Applicant says she was not consulted about this. The timber did not arrive on site until September 2016.
- Eventually, the Applicant told the Respondent to leave the deck as the amount allowed for it was insufficient at $2,000.00. The Respondent claims he has not invoiced the Applicant for the cost of dismantling and shifting the rotten deck. The Applicant says he has been amply compensated.
- On 3 July 2016 the Applicant emailed the Respondent saying she was not happy with the bath tub design and wanted to discuss it on site. They met on site on 4 July 2016 and the Respondent says the Applicant advised she wanted a free standing bath. She denies that she said he preferred a free standing bath, she says she was more concerned as to the Respondent’s ability to waterproof and tile the fibre cement boxing around the bath. She sought advice from two tilers who confirmed her suspicions. On 7 July 2016 she said she would bear the costs of the new bath and plumbing expenses associated with its installation.
- The Applicant says that the variation resulted in time delays and cost increases to the project. The Applicant says he has not invoiced his costs in removing and storing the old bath tub off site, the cost of organising additional trades and redesigning the bathroom. That is denied by the Applicant who says the bath tub fitted into the open space with no requirement to redesign it. The old tub was stored at the Respondent’s father in law’s farm until removed by the Applicant. The Applicant says no additional costs were incurred, save for the plumber who the Applicant paid.
- The Respondent says that work progressed on the kitchen from February to July 2016. The Applicant disputes this and says that work did not start on the kitchen until late May 2016 according to the Respondent's invoices. The Applicant emailed the Respondent on 3 July 2016 advising she wished to discuss the kitchen's layout as she did not like the width of the benches. The Respondent estimate that the time of receipt of the email the kitchen was 90% complete. The Applicant says the kitchen was nowhere near finished and was about 50% complete.
- The Applicant's complaint was that the counters were not ergonomically designed to serve average sized people. It did not comply with Australian Standards AS 4386 and AS 1352. She says further the bench tops and other elements were not built according to the joinery plans because the kitchen plans were not scaled and had no dimensions. The dimensions of the house plans indicate that the bench tops should have been some 750mm deep not 950 mm deep and the sink would only have been 15-70mm setback from the edge, not 150mm. The Applicant says the Respondent just made a mistake but would not admit it.
- By email dated 7 July 2016 the Applicant confirmed that if the bench tops were required, she would pay for them as well as the final electrical and plumbing work associated with finishing the kitchen.
- There were further emails about the kitchen but the Applicant had determined that she had lost confidence in the responsibility to build the kitchen to a quality that met Australian standards and had wasted several sums of money on the poor workmanship today. She determined that she would finish the kitchen herself and late in October 2016 she advised Respondent that she would hire another tradesman to install a traditional style kitchen and was happy to organise this herself.
- The Applicant engaged another tradesman and a new kitchen was built and is currently stored inside the property.
- The parties engaged experts to assess the state of the works. The Tribunal directed a conclave of experts to address both liability and quantum issues. The first conclave was held and a joint report was prepared. The second conclave was not held as the Respondent did not produce an expert. There is a Scott Schedule relating to discussions between Mr Sultana and Mr Thirkell, who were retained by the Applicant.
- None of the experts, who provided reports, were required for cross-examination.
Thirkell Consulting Engineers and Building Design report
- Thirkell Consulting Engineers and Building Design, in addition to providing an expert report relating to the liability issues, also provided the engineering drawings to the Respondent on 20 October 2015 for the purpose of the project.
- Mr Thirkell was critical of the manner in which the building contract was framed as it was not in accordance with QBCC consumer guidelines having too large a provisional and prime cost sums which together amounted to 85% of the original contracts sum. It should have provided the Respondent’s best estimate of cost of providing the contract service excluding GST and included the estimated quantity and unit cost of materials (if any), estimated labour cost and any other costs (e.g. equipment hire). He noted that the schedule provided a ‘sum’ that had no basis. He was of the opinion that calculation of the contract sum had not been carried out with reasonable care and skill.
- He attended the site on 15 August 2018.
- On first appearances he noted that the dwelling had an appearance of being at the ‘enclosed stage’ but on closer inspection noted that sliding doors, security grills and windows had only been temporarily fixed into place with minimal fixings and were not operable or fit for purpose. The timber frames of the doors and windows were discoloured with weathering as though they had not been furnished adequately with a clear finished polyurethane to protect them against weathering. Window frames had not been fixed in accordance with structural requirements as they were not waterproofed in accordance with the Building Code of Australia requirements. That was mainly due to render being applied to the walls before installing windows which created varying gaps between the window frames from the wall render. Mr Thirkell thought it would be a difficult task to weatherproof this in a neat and acceptable way with flexible sealant. The exercise was likely to be unsuccessful.
- The timber strip ceilings to the outside appeared light in clear finish, though it was the extent of water staining to the timber strips ceiling that posed questions as to the level of completeness to its roof. Upon inspection from on top of the roof it could be seen that the brickwork parapet had not been completely core filled with concrete and there was no flashing over the brickwork to prevent rainwater entering the ceiling space. The flashing around the open skylights was not carried out in accordance with current practice and enabled rain water to enter the ceiling space. Waterproofing in the planter boxes looked questionable and it was observed by Mr Thirkell that the finer details of waterproofing such structures had not been carried out.
- The appearance from the outside was that the build to ‘enclosed stage’ had been achieved. Mr Thirkell found this not to be the case as the upper infill walls had not been placed on structurally adequate walls and the infill walls would need to be removed and reinstated. This was also the case for all the windows and doors which would require labour to remove render and then make good. The roof required flashings and correctly placed flashings around the open skylights
- It was noted that the contract had a stage 2 payment of $70,201.75 represented 35% of the contract price for the order of materials. On 7 December 2015 a total of 40% of the contract price had been paid before the ground concrete slab had been poured in December 2015. He referred to the QBCC Consumer Building Guide in Appendix L which advised that progress payments were proportional to the value of the work performed "on-site". At the time 40% of the contract price had been paid to the builder and the ground concrete slab had not been completed.
- The monies paid were not proportional to the work performed "on-site". It was also noted that a 20% maximum deposit may be requested where more than 50% of the works is performed "off-site". The monies invoiced to the owner was not industry standard practice and that amount of money should not have been paid before the slab on the ground was complete as that represented only 5% or so of the total works to complete. When the ground slab was completed and a further 10% of the contract price was paid in terms of the work performed "on-site", at that instance, the owner had paid 50% of contract sum. The total amount paid to the Respondent was $244,272. The value of the Contract for the fully completed building was $210,000 approximately. The value of the building work carried out to date of inspection, with no consideration to defects, was 90% of $210,000 being $189,000 approximately.
Peter McNamara of Morse Building Consultancy
- Mr McNamara was engaged by the Respondent and attended the site on 8 December 2018. He noted that the building was still under construction and had not reached practical completion stage. The dwelling appeared to be at lock-up stage with various areas of incomplete works. He considered the dwelling was uninhabitable and had not been attended to for approximately 15 months. The windows located in the original part of the dwelling were in the open position at the time of inspection. The carport structure appeared almost to be complete (92%) with security grills yet to be provided with fixings. The timber framed windows had not been completed in regard to flashings, fixings and jamb trimmers.
Allan Sultana Constructions Pty Ltd
- Mr Sultana has provided a pricing schedule for the rectification and completion of works certified in the Thirkell Consultants Inspection and Building Assessment report. He assessed the cost of rectification at $266,247.17 inclusive of GST. Mr Thirkell assessed the cost of rectification at $196,840.
Matt Heritage Building
- Matt Heritage provided a quotation for the rectification of defective work and the completion of the incomplete work. He assessed the cost at $192,261.00 inclusive of GST. He included the costs of demolishing and rebuilding the kitchen and ground floor deck. Both should be excluded. Unfortunately, the quotation is not itemised to enable me to determine the cost of those items.
- The Respondent agrees that only one inspection was carried out and that was the slab inspection. Six inspections were required and paid for by the Applicant. The Respondent says that practical completion had not been reached so the time for further inspections had not been reached. An issue arose in respect of a concrete awning which the Applicant said should have been inspected. The Respondent says he was advised by the certifier, All Construction Approvals, that the concrete awning was not a substantial building and did not require an inspection. The Applicant disagrees.
- The Respondent says that no inspections were arranged as the works never got to practical completion because of the Respondent’s variations in respect of the bathroom and kitchen.
- The Applicant denies that the variations in respect of the kitchen and bath delayed progress, she says that the Respondent had many other items in the build to attend to but did not do so.
- The Respondent claims that there were 97 inclement weather days where there was 4mm or more of rain or the temperature was over 35 degrees. The Applicant says that 4 mm of rain is not a significant rain day when the evaporation rate is 6-8 mm.
- I am not satisfied that the project was unreasonably delayed by the Applicant’s variations in respect of the bathroom and/or kitchen. The Respondent’s email of 11 November 2016 sufficiently explains who was responsible for the delay and the cause of delay.
- The Respondent was required for examination and gave evidence. There were no other witnesses required to be cross examined. The Respondent was unimpressive as a witness; he assumed a cavalier attitude to the whole affair and did little to assist his case.
- The Respondent was given an opportunity to cross examine the Applicant and the experts but chose not to do so. He was invited to lodge written submissions. He accepted the opportunity but unfortunately raised matters not in evidence before the Tribunal. It is submitted by the Applicant’s legal advisors that those submissions had little regard for the evidence, were overly emotive, vitriolic in attacking the Applicant’s character and conduct, offensive and lacking in objectivity. There is a basis for this criticism. The following serve as examples:
- (a)In his submissions he challenges the authority of the Applicant to represent the owner of the property her mother. The authority of the Applicant to enter into the contract was never challenged at the time, and there appears to be no basis for doing so now. There is a statement on the file signed by Myra Campagnolo clearly authorising her daughter to commence and conduct proceedings on her behalf. That material was before the Tribunal when it made directions on 20 July 2019 resulting in Direction 5 of the directions made on 26 June 2018 being vacated. That direction was that Myra Campagnolo be substituted for Donna Campagnolo unless Myra provides documentation authorising Donna to commence proceedings.
- (b)He denies the validity of the contract and argues that it was not signed by him. This is despite the fact that in his Response and Counter – Application the Applicant states that ‘The contract was prepared according to the above verbal agreement, and it was signed by both parties in late 2015’. Nevertheless, he drafted the contract and presented it to the Applicant for signature. Exhibit DC-2 contains 2 signatures, one as owner and one as a witness. The Applicant says it shows that both signed it. That is not apparent on the face of the document, but I am satisfied that the Contract represents the terms of the agreement that the parties entered into on that date. Of course, under s. 67G of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) the contract is not required to be signed but is required to be in writing.
- (c)The Respondent says that from the Applicant’s actions and intentions she was not fit, nor qualified to deliver such a project. He says she had an inability to communicate and a had staggeringly poor level of communication. On the other hand, in his statement he says she visited the site approximately every second day to discuss progress, the budget and other matters with the Respondent.
- (d)For the first time, the Respondent suggests that the Applicant, in August 2016, told him to leave the site and that she would finish the project herself. This allegation was not raised in the written statements or at the hearing and appears for the first time in his written submissions. It is also inconsistent with the tenor of his email of 11 November 2016.
- (e)The Respondent accuses the Applicant’s expert Mr Alan Sultana as being closely associated with the Campagnolo family and a friend of the Applicant’s mother and father. No such allegation was made in the material filed in the proceedings or in evidence. Further, the Respondent did not retain an expert to attend the second conclave on costing the defective work, nor did he wish to cross examine any expert.
- The above are just some of the matters raised by the Respondent in his final submissions. Many are irrelevant and have not been the subject of evidence.
- It is an unfortunate consequence of doing business with family members that contractual obligations are not always observed or expected to be observed. The Respondent admits that the parties had an agreement but it was a casual one that permitted the Applicant to make changes, alterations and decisions as the job progressed. Interestingly, the fact that the Applicant made changes, as the work progressed and the alleged delay caused, appears to be the basis of his claim that the Applicant repudiated the contract.
- The Applicant certainly gave the Respondent considerable leeway before she took action. The Respondent gave me the impression that he was doing his cousin a favour in undertaking the contract, and to some extent he did so, for example, by not charging a builder’s margin. On the other hand, the Respondent took liberties that he would not have taken with a stranger, some are apparent from his email of 11 November 2016.
- When the Respondent did not receive a response to his email of 11 November 2016 he made no attempt to follow it up and was content to ignore his obligations under the contract. This was convenient for him, at the time, as he had other projects to attend to and was short of funds. He did not respond to the Applicant’s telephone call in April 2017. When questioned at the hearing about his failure to follow up the 11 November 2016 email which, possibly, may have avoided this litigation, he saw no basis for criticism of his actions and saw the Applicant as being solely at fault.
- Where there is disagreement between the Applicant and the Respondent on factual issues then I prefer the evidence of the Applicant.
- A joint report dated 3 June 2019 was produced following a conclave held with Mr Thirkell and Mr McNamara. Later their comments were inserted in a Scott schedule that also contained costings from Mr Thirkell and Mr Sultana but not Mr McNamara.
- The experts agreed on a substantial number of defective and incomplete items. Those items that the parties disagreed on relating to either liability or quantum I have set out below:
- Item 1 Breezeway Eastway Entry Sliding Door. The experts agreed that the doors as installed were non-compliant with AS2688-1984 Timber Doors: and AS 4654.2-209 Waterproofing membrane systems for exterior use. Mr Sultana says that the doors were not even in accordance with the contract documents (drawings). They required removal and reinstatement of existing doors and made compliant or were to be replaced with new compliant doors. The cost difference was $4,514.00 using the existing doors or $14,298.29 for new doors. I note that the cost of new doors amounts to $8,492.00. It is submitted by the Applicant that Mr Sultana’s quote ought to be preferred as being in accordance with industry costs and trade quotations.
- Item 2 Rectify multiple sets of windows. Mr Sultana and Mr Thirkell agree on the need for rectification but differ marginally on cost. Mr Thirkell assessed $22,600 and Mr Sultana assessed $25,889.32. In relation to item 2 (c) Bedroom North and South, Mr Thirkell noted that the window timber bottom plates were cracked and discoloured due to inadequate timber finish and protection. Mr McNamara stated that it was a maintenance issue as the windows had been exposed to the elements for 22 months with no maintenance in the interim. I accept Mr Thirkell’s assessment.
- Item 3 related to the finishing of roofing and parapets and walls. Mr Thirkell referred to inadequately installed windows with the intention of achieving an enclosed stage that the Applicant had paid for. Mr McNamara had no knowledge of the payment to the enclosed stage. I accept Mr Thirkell’s assessment. So far as cost of rectification is concerned there Mr Thirkell assessed $10,500.00 and Mr Sultana costed it at $15,402.04. Mr Thirkell conceded the estimate may have been conservative as the reinforcement may be corroded and require replacement.
- Item 4 Rectification of F.C. exterior sheeting. The experts agreed that it did not comply with an adequate level of finish. Mr Thirkell estimate the cost at $2,000.00 Mr Sultana quoted the cost at $4,762.07 in accordance with industry costs and licensed trade quotations.
- Item 5 Rectification of interior F.C. Sheeting. Agreed to be defective by experts costed at $2,000.00, as an estimate, by Mr Thirkell and $4,726.07 by Mr Sultana.
- Item 6 Rectification of gaps, protect and seal electrical penetrations. Agreed to be defective by experts costed at $4,000.00, as an estimate, by Mr Thirkell and $11,508.92 by Mr Sultana.
- Item 7 Rectification of waterproofing and tiling to walls and floors to bathroom. Agreed to be defective by experts costed at $10,000.00, as an estimate, by Mr Thirkell and $12,909.65 by Mr Sultana.
- Item 8 Provide impervious finish to concrete slab and kitchen. Agreed to be defective by experts costed at $1,600.00, as an estimate, by Mr Thirkell and $3,782.20 by Mr Sultana.
- Item 9 Rectification to tanking to both roof gardens. Agreed to be defective by experts costed at $10,50.00, as an estimate, by Mr Thirkell and $17,148.21 by Mr Sultana.
- Item 10 Kitchen joinery. Agreed to be defective by experts but not costed by Mr Sultana as excluded from items to be rectified. Mr Thirkell estimated cost at $16,000.00. If included Mr Sultana agreed with the estimate.
- Item 11 Rectification of steel feature grills. Agreed to be defective by experts costed at $8,000.00, as an estimate, by Mr Thirkell and $20,764.52 by Mr Sultana.
- Item 12 Provide waterproofing to GPOs. Agreed to be defective by experts costed at $360.00, as an estimate, by Mr Thirkell and $284.00 by Mr Sultana.
- Item 13 Remove brick wall supporting clerestory louvres in North and South elevation. Agreed to be defective by experts costed at $14,000.00, as an estimate, by Mr Thirkell and $24,491.62 by Mr Sultana.
- Item 14 Structural issues. Agreed to be defective by experts not costed by Mr Thirkell and $990.61 by Mr Sultana.
- Incomplete Item 1. Grout fill to formwork tie holes in concrete and paint columns, wall cladding, eaves, guttering and fascia. Disagreement by experts as Mr McNamara states that the owner did not want concrete columns painted. He questioned whether the scope of works provided to paint the remainder of the existing dwelling. Mr Thirkell stated that the Respondent completed the full painting of the fascia to the Southern elevation. Estimated at $4,000 by Mr Thirkell and costed at $5,062.82 by Mr Sultana.
- Incomplete Item 2. Ground floor deck and BBQ, table and sitting. This was agreed as an excluded item. Costed by Mr Sultana at $13,479.39.
- Incomplete Item 3 Level 1 deck and balustrading. Agreed to be incomplete and estimated at $6,000 by Mr Thirkell and costed at $11,744.04 by Mr Sultana.
- Incomplete Item 4 Provide finishes to cut internal wall servery opening. Mr McNamara thought this was a variation. Mr Thirkell agreed but maintained it was incomplete. Estimated at $500 by Mr Thirkell and costed at $1,059.83 by Mr Sultana.
- Incomplete Item 5 Close in laundry. Mr McNamara noted that his item was not in the original scope of works but may have been a matter discussed by the parties. Mr Thirkell agreed but maintained it was incomplete and was necessary and a reasonable expectation to obtain acoustic insulation of the laundry from the living areas. Estimated at $4,000.00 by Mr Thirkell and costed at $7,823.39 by Mr Sultana.
- Incomplete Item 6 Make good loose pavers and brickwork. Agreed to be incomplete and estimated at $1,000 by Mr Thirkell and costed at $2,272.43 by Mr Sultana.
- Incomplete Item 7 Completion of air conditioning, gas and electrical works. Agreed to be incomplete and estimated at $5,000 by Mr Thirkell and costed at $10,043.31 by Mr Sultana.
- Incomplete Item 8 Completion of plumbing and Termite Treatment Plan. Agreed to be incomplete and estimated at $2,500 by Mr Thirkell and costed at $7,263.71 by Mr Sultana.
- Incomplete Item 9 Shower screen and shower floor grate. Agreed to be incomplete and estimated at $2,000 by Mr Thirkell and costed at $2,148.30 by Mr Sultana.
- Incomplete Item 10 Provide joinery to bathroom, kitchen, living, laundry, kitchen, store and outdoor areas as required. The experts disagree as not provided for in original scope of works. Mr Thirkell states that they are shown in the original drawings. Estimated by Mr Thirkell at $10,000.00 not costed by Mr Sultana.
- Incomplete Item 11 Install tap fixtures and plumbing by licensed plumber. Agreed to be incomplete and estimated at $2,000 by Mr Thirkell and costed at $2,783.34 by Mr Sultana.
- Incomplete Item 12 Other – overheads, fees and site costs. Mr Thirkell estimated the costs of professional consultants, local authority and building certifier fees including QBCC payments and insurance at $32,500.00. Not costed by Mr Sultana. Mr Sultana costed insurances at $22,092.00 but this was allowed for by Mr Thirkell in the cost of fees and insurance. Height access and fall protection where required assessed at $14,000.00 by Mr Thirkell and costed at $19,449.05. Site establishment and handover was estimated by Mr Thirkell at $2,000 and costed by Mr Sultana at $2,207.98. Incomplete work.
- In the Scott Schedule Mr Thirkell’s estimates total $196,840 and Mr Sultana $266,247.17. Mr Thirkell’s estimate does not differ greatly from the Matt Heritage Building quotation of $192,261.00. All are inclusive of GST.
- The Applicant claims $10,000 for damages for solatium for the three and a half years she has been precluded from enjoying her newly renovated house and she will continue to suffer the inconvenience of rectification. There is very little in the way of evidence from the Applicant on this issue. There is no medical or psychological evidence to support her claim. Undoubtedly, in every case where there is litigation by a home owner against a builder the owner would be disappointed with the outcome. Litigation is nearly always stressful to those involved. For a claim to be compensable it should be outside of the realm of what most litigants would experience from litigation.
- Mere inconvenience will not suffice; nor will the inconvenience of having to litigate an action. If coupled with physical inconvenience leading to an adverse psychological reaction such as stress or nervous condition then damages may be recoverable in tort or under the Hadley v Baxendale principles. There is no evidence here to justify such a claim.
- I am satisfied that the Applicant is entitled to recover damages for breach of contract. Varying estimates have been provided supported by expert evidence that is largely undisputed by the Respondent. The experts agree that there is defective and incomplete work that requires rectification or completion. Although, the Applicant argues that the basis of the agreement was not as formal as the terms and conditions contained in the Contract agreed to by the parties, the Contract was a necessary requirement for the Respondent to undertake the work as a Licensed Builder under the QBCC Act.
- I am satisfied that the parties intended their contractual relationship to be governed by the terms of the written contract. Nevertheless, the manner in which payments under the Contract were formulated were unusual and, presumably, designed to relieve the Respondent of any prolonged or substantial financial outlay.
- The works appear to have been left abandoned to the weather for a significant period of time. Some of the defective work can be attributed to the weathering. An example would be the kitchen bench tops which were of stainless steel but are now pitted with rust and would require replacement. I note that they were to be replaced anyway and replacement is not compensable as the Applicant has made her own arrangements to replace the kitchen at her cost. However, it serves as an example that the house was exposed to the weather. Neither, party has addressed this issue and in the absence of any submissions I do not intend to make any findings as to who is responsible for the deterioration or the reasons why the house was allowed to deteriorate.
- I note that the Applicant has paid the Respondent a total of $248,733.00 being $47,928.00 more than the contract price for an incomplete and largely defective renovation.
- I was referred to the Contract General conditions 4.4 and 4.5 (prime cost items) and 4.11 (provisional sums) which are relied upon by the Applicant as a basis for submitting that nothing further was owed under the contract either because the works were included in the fixed price component of the contract, or the prime cost items and provisional sums were warranted by the Respondent as having been prepared with reasonable skill and care and no further increase should have been required.
- The range of costs of rectification and completion of the incomplete works based on the assessment of the experts is $198,340.00 to $292,247.00.
- The assessment of the damages in this case cannot be assessed with the degree of precision that can often be achieved in other building cases. I agree that Mr Sultana’s quotation, probably, is closer to the actual costs of rectifying and completing the works. However, the estimates and quotations differ substantially in some cases, and it is not always possible to disentangle excluded items and incidental costs associated with those items. For those reasons, I have assessed damages more broadly at $220,000.00. I note that the Applicant has requested an opportunity to make submissions in relation to costs. The Respondent has indicated that in the event that I find against him that I allow him some time to pay any sum he is ordered to pay.
- By way of interim orders:
- I order Jesse Seabrook Bennett pay Donna Campagnolo the sum of $220,000.00 in respect of her claim;
- I dismiss Jesse Seabrook Bennett’s counter-application;
- The directions to pay are stayed until further argument in relation to costs and the form of final orders;
- I invite the parties to make submissions in relation to costs;
- I direct the parties file written submissions, if any, as to costs as follows:
- (a)Donna Campagnolo by 4.00 pm 7 February 2020;
- (b)Jesse Seabrook Bennett by 4.00 pm 14 February 2020.
 Item 8 of the Contract.
 Exhibit DC-3.
 Exhibit JB-9 to Statement of Jesse Bennett, filed 1 March 2019.
 Statement of Donna Campagnolo, filed 6 February 2019, .
 Exhibit DC -7, Statement of Donna Campagnolo, filed 6 February 2019.
 Statement of Donna Campagnolo, filed 6 February 2019, .
 Statement of Jesse Bennett, filed 1 March 2019, .
 Statement of Donna Campagnolo, filed 6 February 2019, .
 Exhibit DC-10.
 Exhibit JB-40.
  3 All E R 60, 71.
 (1884) 9 AC 434, 439.
 (1931) 45 CLR 359.
 Centreplex Pty Ltd v Noahs Rosehill Waters Pty Ltd  WASC 252 per Le Miere J at [32}
 Exhibit JB-11.
 Paragraph 14 of the Respondent’s statement.
 Clarke ν President, Councillors and Ratepayers of the Shire of Gisborne  VR 971.
- Published Case Name:
Campagnolo v Bennett
- Shortened Case Name:
Campagnolo v Bennett
 QCAT 13
24 Jan 2020