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  • Unreported Judgment

Kerr v Lyons

 

[2020] QCAT 148

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Kerr & Anor v Lyons [2020] QCAT 148

PARTIES:

justin kerr

jacqueline kerr

(applicants)

 

v

 

damien michael lyons

(respondent)

APPLICATION NO/S:

BDL350-18

MATTER TYPE:

Building matters

DELIVERED ON:

29 April 2020

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Kanowski

ORDERS:

Damien Michael Lyons must pay Justin Kerr and Jacqueline Kerr $221,353.64 by 27 May 2020.

CATCHWORDS:

DAMAGES – GENERAL PRINCIPLES – RECOVERY OF COSTS – where construction contract terminated – where advance payments had been made – where rectification required – where delay caused – whether losses recoverable

Queensland Building and Construction Commission Act 1991 (Qld), s 77

REPRESENTATION:

 

Applicant:

Self-represented

Respondent:

Self-represented

APPEARANCES:

This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

REASONS FOR DECISION

Introduction

  1. [1]
    Mr and Ms Kerr seek an order from the Tribunal that Mr Lyons pay them a total of $237,048.39. This represents the loss which Mr and Ms Kerr say they have suffered from breaches of a construction contract by Mr Lyons, and in connection with terminating that contract.
  2. [2]
    In 2016, Mr and Ms Kerr had engaged Mr Lyons, who was then a licensed builder, to build a house for them. Construction began but ended before the footing stage had been completed. Mr and Ms Kerr then terminated the contract in October 2017.
  3. [3]
    Mr and Ms Kerr commenced their proceeding in the Tribunal against Mr Lyons on 10 December 2018. On 28 August 2019, the Tribunal ordered that there was to be a final decision for Mr and Ms Kerr in the proceeding conditional upon the assessment by the Tribunal of damages. This was due to failures by Mr Lyons to comply with Tribunal directions.
  4. [4]
    This assessment of damages has been decided on the papers, pursuant to a direction made by the Tribunal on 28 August 2019 that damages would be assessed on the papers unless the Tribunal otherwise ordered or a party requested an oral hearing by 12 November 2019.
  5. [5]
    In the course of the proceeding, Mr and Ms Kerr have filed their originating application, a table setting out their claims, a statement, statutory declarations by themselves and a builder, and numerous supporting documents such as invoices and bank transfer records.
  6. [6]
    Mr Lyons has filed some interlocutory applications, but he has not filed a response to Mr and Ms Kerr’s application. He has not filed a statement of evidence, despite being directed on 28 August 2019 to file a statement on the question of damages by 29 October 2019. The only substantive piece of evidence he has provided, which he sent by way of an email on 11 May 2019, is a copy of a notice he received from Queensland Building and Construction Commission (‘QBCC’) dated 19 December 2017. That notice informed him that he was liable to pay QBCC $146,776.50. This was the amount that QBCC had decided to pay Mr and Ms Kerr for a non-completion claim under the statutory insurance scheme.
  7. [7]
    Mr and Ms Kerr have provided a copy of the QBCC review notice dated 18 December 2017 about that claim.
  8. [8]
    There is no indication that the insurance payment compensated Mr and Ms Kerr for any of the losses that they claim in the present Tribunal proceeding. I note, though, that the review notice does not set out the basis or bases for the insurance payment. It does indicate that Mr Lyons may have under-priced. This may explain why Mr and Ms Kerr were eligible for the insurance payment.
  9. [9]
    The evidence provided by Mr and Ms Kerr in support of their claim before the Tribunal is detailed and plausible. It is, to a large extent, backed up by source documents. It is uncontradicted by any evidence from Mr Lyons. I accept the evidence of Mr and Ms Kerr as truthful. Accordingly, I accept the evidence of Mr and Ms Kerr that:
    1. (a)
      they own a block of land;
    2. (b)
      on 28 October 2016 they entered into a contract with Mr Lyons to build them a home on that block;
    3. (c)
      work commenced with excavations on 1 March 2017;
    4. (d)
      under the contract, work was to be completed by 1 November 2017;
    5. (e)
      Mr Lyons’ builder’s licence was suspended by QBCC on 5 May 2017 but he did not inform them;
    6. (f)
      the licence remained suspended until it was cancelled by QBCC on 15 August 2017;
    7. (g)
      meanwhile, construction work ceased by 8 June 2017, without even the footing stage having been completed;
    8. (h)
      on 11 October 2017, Mr and Ms Kerr exercised a contractual right to terminate the contract;
    9. (i)
      they later had the house built, to a modified design, by a firm called Ausbuild; and
    10. (j)
      Ausbuild commenced construction on 6 December 2018, and handed over the completed house to Mr and Ms Kerr on 28 June 2019.
  10. [10]
    In this Tribunal proceeding, Mr and Ms Kerr have filed versions of the schedule, headed ‘Schedule for QBCC New Home Construction Contract’, to their contract with Mr Lyons. It contains details such as the progress payment amounts. However, Mr and Ms Kerr have not filed the body of the contract containing the terms.
  11. [11]
    Mr and Ms Kerr have quoted parts of clause 26 of the contract.[1] Clause 26 is to the effect that where party A is in substantial breach, party B may give party A a notice identifying the breach. If the breach is not remedied within 10 business days, party B may terminate the contract and may recover from party A ‘all damages, loss, cost or expense occasioned to the party so terminating by or in connection with the breach or that termination …’.
  12. [12]
    It is apparent from the material filed by Mr and Ms Kerr that clause 26 must go on to list instances of substantial breach. One, which is quoted in Mr and Ms Kerr’s material, is:[2]

failing to hold the current, active and appropriate licence required to perform the Works, including, without limitation, a licence required under the QBCC Act.

  1. [13]
    I infer from Mr and Ms Kerr’s notice of default to Mr Lyons of 15 September 2017 that other types of substantial breach listed in clause 26 include, in summary, failure to perform the work under the contract competently, and unreasonable failure to perform the work diligently and failure to maintain reasonable progress.
  2. [14]
    The notice of default, and the subsequent termination notice, relied on three substantial breaches by Mr Lyons: failing to perform work under the contract competently; unreasonable failure to perform the work diligently and failure to maintain reasonable progress; and failure to hold a required licence.
  3. [15]
    There are four components to the overall amount claimed by Mr and Ms Kerr:
    1. (a)
      $95,153.50;
    2. (b)
      $25,000;
    3. (c)
      $34,927.50; and
    4. (d)
      $81,967.39.
  4. [16]
    I will consider these components in turn, after briefly explaining the basis for the Tribunal’s jurisdiction.

Jurisdiction

  1. [17]
    The Tribunal has jurisdiction to decide a ‘building dispute’.[3]
  2. [18]
    The dispute between the Kerrs and Mr Lyons is a ‘building dispute’ because it is a ‘domestic building dispute’, being a dispute between a building owner and a building contractor relating to a contract for the performance of ‘reviewable domestic work’.[4]
  3. [19]
    In resolving a building dispute, the Tribunal may exercise powers which include ordering the payment of an amount found to be owing, awarding damages, and ordering restitution.[5]

Claim for $95,153.50

  1. [20]
    Mr and Ms Kerr say that $95,130.50 represents the amount of prepayments they had made: that is amounts paid on invoices in advance of any contractual liability to pay. They say they had made these payments because of Mr Lyons’ ‘convincing explanations that [the invoices] were to bring forward delivery of long lead items’.[6] However, the items in question were never delivered, or even ordered by Mr Lyons so far as the enquiries of Ms Kerr revealed.
  2. [21]
    Mr and Ms Kerr have provided documents showing that they paid invoices issued by Mr Lyons for:
    1. (a)
      $43,900 described as deposit and administration payment;
    2. (b)
      $59,950 described as ‘Forwarded payment for frames. Amount payable is subtracted from footing payment as per contract schedule’;
    3. (c)
      $16,500 described as ‘Window payment for works …’; and
    4. (d)
      $12,053.50 described as ‘for supplied variation document …’.
  3. [22]
    There is a handwritten note on the last of those invoices: ‘pitched roof alfresco, flooring extra and pool deposit …’.
  4. [23]
    The contract schedule specified the deposit amount as $21,950. It is unlikely that there would have been any contractual basis for invoicing an ‘administration payment’ in addition to the deposit, though I cannot express a concluded view in the absence of the body of the contract.
  5. [24]
    The original contract schedule provided for progress payments:
    1. (a)
      $109,750 for the footing stage;
    2. (b)
      $153,650 for the frame stage;
    3. (c)
      $109,750 for the lockup stage; and
    4. (d)
      $21,950 for the practical completion stage.
  6. [25]
    However, a subsequent contract schedule, after a pool was removed from the scope of works, provided instead for:
    1. (a)
      $80,600 for the footing stage;
    2. (b)
      $100,750 for the frame stage;
    3. (c)
      $100,750 for the lockup stage;
    4. (d)
      $80,600 for the fixing stage; and
    5. (e)
      $18,350 for the practical completion stage.
  7. [26]
    I infer that Mr Lyons did not invoice Mr and Ms Kerr for any of these stages. I have accepted that work ceased before the footing stage was complete. According to a solicitor’s letter,[7] QBCC determined that work had progressed to only about half way through the footing stage.
  8. [27]
    It is apparent from the invoices that Mr and Ms Kerr made prepayments for materials to be installed at the frame and subsequent stages, with the understanding that some or all of these amounts would be deducted from the footing stage payment claim. Ms Kerr has described in a statutory declaration the later enquiries she made about whether the materials had actually been ordered from the suppliers indicated by Mr Lyons. Those enquiries revealed that orders had not been placed. I accept that orders were not placed by Mr Lyons.
  9. [28]
    The amount of $95,153.50 is claimed as a loss by Mr and Ms Kerr on the basis that this is the amount of prepayment specified in the QBCC review notice dated 18 December 2017. That amount, along with a retention amount, was deducted from the amount determined by QBCC as payable to Mr and Ms Kerr under their insurance claim for non-completion. How the figure of $95,153.50 was calculated is not explained in the review notice. Presumably QBCC calculated the value of work completed under the contract, and subtracted that value from the amounts paid by Mr and Ms Kerr on the invoices.
  10. [29]
    Although the calculation has not been explained, I note that Mr Lyons was a party to the QBCC review. Presumably he was consulted by QBCC for input when it calculated the amount of prepayment. In the present proceeding, Mr Lyons has not challenged the prepayment figure or provided any evidence that might indicate it is inaccurate. In these circumstances, it is appropriate to accept QBCC’s calculation of the prepayment amount.
  11. [30]
    I am satisfied, on the balance of probabilities, that Mr and Ms Kerr made prepayments which exceeded the value of the work performed under the contract by $95,153.50. I find accordingly. I also find that Mr Lyons was in substantial breach of the contract by, at least, failing to hold an active building licence from 5 May 2017. This entitled Mr and Ms Kerr to terminate the contract. Construction work was not completed under the contract. I find that Mr and Ms Kerr suffered a loss of $95,153.50 by paying that amount for materials that were not supplied, and possibly also for work that was not done.
  12. [31]
    This component of the claim could be characterised as a claim for restitution, rather than damages. However, the more straightforward approach is to characterise it as a claim for an amount owed to Mr and Ms Kerr under clause 26 of the contract for a loss occasioned by the termination.
  13. [32]
    Mr and Ms Kerr have established entitlement to be paid $95,153.50 by Mr Lyons.

Claim for $25,000

  1. [33]
    Mr and Ms Kerr’s account of relevant events is as follows. On 6 June 2017, Ms Kerr met on site with Mr Lyons to discuss a proposed retaining wall along the boundary with the neighbour at number 20. This had not formed part of the contractual works. They agreed upon a variation to the contract, such that the retaining wall would be built for $25,000. Mr Lyons issued an invoice for the $25,000 on 7 June 2017, and Mr and Ms Kerr paid it on 8 June 2017. Mr Lyons failed to provide a ‘Variation Document’ as required by the contract. He did not construct the retaining wall.
  2. [34]
    Mr and Ms Kerr have provided a statutory declaration by Ms Kerr about these events, and they have supplied a copy of the invoice and the bank transfer record. I accept their account of events.
  3. [35]
    I find that Mr and Ms Kerr paid $25,000 for the construction of a retaining wall that was never built because the contract was terminated.
  4. [36]
    The amount of $25,000 represents a loss to Mr and Ms Kerr occasioned by the termination. Accordingly, it is an amount owed to them by Mr Lyons under clause 26 of the contract.
  5. [37]
    Mr and Ms Kerr have established entitlement to be paid $25,000 by Mr Lyons.

Claim for $34,927.50

  1. [38]
    This claim relates to a retaining wall built along the boundary with the neighbour at number 14.
  2. [39]
    Mr and Ms Kerr’s account of events may be summarised as follows:
    1. (a)
      in pre-contractual discussions with Mr Lyons, they indicated their desire for a timber fence along that boundary because they did not have the budget for a retaining wall on that side;
    2. (b)
      Mr Lyons’ quotation letter dated 15 September 2016 ‘made no provision for earthworks or for structural retaining walls’[8] along that boundary;
    3. (c)
      retaining walls were not included in the contract;
    4. (d)
      on 1 March 2017 Mr Lyons supervised a cut and fill at the site;
    5. (e)
      a cut of approximately one metre was created along the 31 metre boundary;
    6. (f)
      on 2 March 2017 Mr Kerr met with Mr Lyons on site and raised serious concerns relating to the depth and location of the bench cut created on the boundary, and the fact that a sewer main had been exposed and damaged;
    7. (g)
      Mr Kerr commented that retaining walls were not included in the scope of works; that the Kerrs had made no financial provision for a retaining wall along this boundary; and that they had always discussed a timber fence along this boundary;
    8. (h)
      ‘Mr Lyons offered no explanation and stated that we would have to build retaining walls now’;[9]
    9. (i)
      Mr Lyons proceeded to pour footings without any retaining wall having been constructed along the boundary;
    10. (j)
      after the contract with Mr Lyons was terminated, the Kerrs approached other builders, including Ausbuild, about proceeding with construction;
    11. (k)
      Ausbuild would not proceed until a retaining wall was constructed along the boundary;
    12. (l)
      in January 2018 Mr and Ms Kerr investigated options to construct a block retaining wall, and for this purpose they paid Couzens Regan Engineers $880;
    13. (m)
      however, Couzens Regan verbally advised that a block retaining wall would not be suitable, and that a sleeper retaining wall was outside their area of expertise;
    14. (n)
      Mr and Ms Kerr engaged Newport Consulting Engineers to design a sleeper retaining wall, and paid that firm $1,133 for its services in April 2018;
    15. (o)
      Mr and Ms Kerr engaged Trojan (Qld) Pty Ltd trading as Trojan Landscapes to supply materials for the sleeper retaining wall, and S&P Building Solutions to build the wall;
    16. (p)
      meanwhile, in May 2018, Mr and Ms Kerr received an engineering report dated 26 April 2018 from Lynskey Structural Consultants Pty Ltd (‘Lynskey’) that had been commissioned by the neighbour;
    17. (q)
      that report noted that excavation at the Kerrs’ property had exposed footings of the retaining walls at number 14, along the mutual boundary;
    18. (r)
      this had undermined those retaining walls, resulting in movement, and would ultimately lead to failure of those walls;
    19. (s)
      Lynskey recommended, amongst other things, that a reinforced block retaining wall be built on the Kerrs’ property that would support the cut face of the excavation and the applied load from the footings of number 14’s retaining walls;
    20. (t)
      Mr and Ms Kerr then engaged Brisse Pty Ltd, structural engineers, at a cost of $1,650, to ‘devise a stabilisation scheme’[10] along the boundary;
    21. (u)
      Mr and Ms Kerr then had a sleeper retaining wall built along the boundary, and for this purpose they paid the following invoices:
      1. S&P Building Solutions invoices issued in July 2018 totalling $10,540.50; and
      2. Eagle Alliance Earthmoving invoices issued in June and August 2018 totalling $3,224; and
    1. (v)
      Mr and Ms Kerr have calculated that $17,500 of the more than $53,000 paid to Trojan (Qld) Pty Ltd between May and August 2018 was for materials for the retaining wall along this boundary.
  3. [40]
    In support of their account of events, Mr and Ms Kerr have provided photographs, invoices, a statutory declaration by a co-owner of S&P Building Solutions, and other documents such as the Lynskey report. I accept that they incurred the expenditure described above, totalling $34,927.50.
  4. [41]
    I also accept the opinion given in the Lynskey report that the excavation undermined the neighbour’s retaining walls, and that a retaining wall was needed on the Kerrs’ property to support the cut face and the neighbour’s retaining walls. I also accept Mr Kerr’s unchallenged evidence about his conversation with Mr Lyons on 2 March 2017.
  5. [42]
    Mr and Ms Kerr contend that they are entitled to recover the $34,927.50 from Mr Lyons under clause 26 of the contract. As discussed earlier, that clause allows for recovery of expenses occasioned by the ‘substantial breach’ on which the termination of the contract was based or by the termination. One of the ‘substantial breaches’ relied on by Mr and Ms Kerr to terminate the contract was failure to perform the work competently, and the particulars given in their notice dated 15 September 2017 included excavation along the relevant boundary so as to expose, and potentially undermine, the footings of the neighbour’s structures.
  6. [43]
    Mr Lyons’ quotation dated 15 September 2016 indicated that it allowed for:

Excavation for block retaining walls. Supply and lay blocks for rear retaining walls.

  1. [44]
    Whether this included excavation along the relevant boundary is not apparent.
  2. [45]
    As Mr and Ms Kerr have not filed all of the contractual documents, such as the body of the contract, the plans and the specifications, I am not in a position to determine with certainty whether the excavation in question was contrary to the plans. However, on the available evidence, it can be inferred that it was. Had the excavation been shown in the plans, Mr Lyons would surely have pointed that out to Mr Kerr during their discussion on 2 March 2017. Accordingly, I find that Mr Lyons was responsible for the excavation which undermined the neighbour’s property and that this work was contrary to the plans. In the absence of any explanation justifying this deviation from the plans, I find that the undermining of the neighbour’s property demonstrated incompetence by Mr Lyons in carrying out the work, as did his failure to then remedy the undermining by constructing a retaining wall. This conduct constituted a ‘substantial breach’ under the contract. It was a substantial breach relied on by Mr and Ms Kerr in terminating the contract. Under clause 26, Mr and Ms Kerr are entitled to recover from Mr Lyons expenses incurred in connection with the breach.
  3. [46]
    The right of recovery must be limited to expenses reasonably incurred, as otherwise the connection with the breach would be too remote. For this reason, I have had some doubts about whether Mr and Ms Kerr are entitled to recover the $880 paid to Couzens Regan Engineers for a block retaining wall design, as that firm went on to advise that a block design would not be suitable. However, I note that Lynskey later recommended a block wall. I note that a sleeper wall was ultimately built, on the basis of other engineering plans. Overall, it seems that there were differing engineering opinions about the most appropriate remedy. In these circumstances, the payment to Couzens Regan Engineers was reasonably incurred in the course of investigating a suitable remedy.
  4. [47]
    I am satisfied that all of the payments making up the total of $34,927.50 were reasonably incurred in connection with remedying the relevant substantial breach committed by Mr Lyons.
  5. [48]
    Mr and Ms Kerr have established entitlement to be paid $34,927.50 by Mr Lyons.

Claim for $81,967.39

  1. [49]
    This claim relates to expenses incurred because of delays in having the house built, and associated with terminating the contract. These amounts are claimed under clause 26 of the contract.
  2. [50]
    Mr and Ms Kerr say that the failure of their contract with Mr Lyons led to a series of delays before their home was built. They say they could not carry out any work prior to 18 December 2017, while their insurance claim was being assessed by QBCC. They then remediated the site and had retaining walls built, up to 6 August 2018. They then engaged Ausbuild, which began construction in December 2018 and handed over the completed house on 28 June 2019.
  3. [51]
    There are several subcomponents to this part of the claim.

Rent

  1. [52]
    Mr and Ms Kerr claim $52,500 from Mr Lyons for rent paid in the period 13 January 2018 to 24 June 2019, at $700 per week. Mr and Ms Kerr say they rented a home after earlier having stayed rent-free with Mr Kerr’s mother for a year. Mr and Ms Kerr have provided a copy of the tenancy agreement.
  2. [53]
    I accept that this expense was reasonably incurred, and that it is a loss occasioned to Mr and Ms Kerr in connection with the termination of the contract. Had Mr Lyons performed the contract correctly, Mr and Ms Kerr would not have incurred rent expenses in 2018 or 2019.
  3. [54]
    Mr Lyons is liable under clause 26 of the contract. 

Interest

  1. [55]
    Mr and Ms Kerr claim $24,334.75 in interest on a Bank of Queensland loan ‘for monies paid to Mr Lyons’.[11] The basis for this aspect of their claim is not further explained. Mr and Ms Kerr have supplied two supporting documents relating to the loan. One is an email exchange between Ms Kerr and the bank manager dated 13 December 2017. Ms Kerr requested ‘the total interest paid so far on the funds drawn down on the account from its instigation until today’. The manager responded: ‘… interest paid is $11,122.75’. Someone, presumably Ms Kerr, has handwritten on the printout of the emails: ‘Start of loan (~ May 2017) thru. to Dec 2017’. The first ‘7’ is written over a ‘6’. The second document is a transaction list for the loan account for the period 1 January 2018 to 23 October 2018. This list shows monthly interest debits in the months January to September, totalling over $13,000.
  2. [56]
    Neither document shows the interest rate. The second document shows the amount ‘available’, which presumably is the additional amount that Mr and Ms Kerr could draw down. Neither document shows loan balances, so I have been unable to check whether the borrowings relate solely to amounts paid to Mr Lyons.
  3. [57]
    It is also unclear why the loan would have been instigated only in May 2017, when payments to Mr Lyons began in September 2016. Perhaps the correct date was May 2016. The amount of interest seems high, particularly if the period in question was less than 18 months. Further, while the total amount paid by Mr and Ms Kerr to Mr Lyons was $157,403.50, these payments were made over time:
    1. (a)
      $21,950 on 20 September 2016 (first payment on the invoice for deposit and administration);
    2. (b)
      $21,950 on 22 September 2016 (second payment on that invoice);
    3. (c)
      $59,950 on 12 January 2017 (payment on the invoice for frames);
    4. (d)
      $5,000 on 5 February 2017 (first payment on the invoice for windows);
    5. (e)
      $11,500 on 6 February 2017 (second payment on that invoice);
    6. (f)
      $12,053.50 on 15 March 2017 (payment on the variation invoice noted to be for pitched roof alfresco etc.); and
    7. (g)
      $25,000 on 8 June 2017 (payment on the invoice for the retaining wall along the boundary with number 20).
  4. [58]
    The drawdowns would, correspondingly, have been made over time.
  5. [59]
    In any event, even if the borrowings on the loan account were made solely to pay Mr Lyons, I am not satisfied that the whole of the interest amount can be characterised as a loss recoverable by Mr and Ms Kerr. Some of the money would have gone to work actually performed by Mr Lyons, such as the levelling of the site and some foundational work, which was presumably of enduring benefit. The true value of the loss to Mr and Ms Kerr would be the amount of interest they would not have been required to pay had the contract been properly performed and completed by Mr Lyons. This cannot be accurately calculated on the fairly scant information provided by Mr and Ms Kerr on this issue.
  6. [60]
    However, it is fair and reasonable to make what is probably a conservative estimate of the loss, or at least part of it, on the available information in the following manner. First, it is relevant to take into account that the building project was delayed by approximately 20 months on account of Mr Lyons’ substantial breach in relation to progressing the work, and on account of the termination with the consequent need to engage a new builder. The termination was entirely justified, given that Mr Lyons no longer held a builder’s licence, and for other reasons as well. Second, it is relevant to take into account that Mr Lyons received payments from Mr and Ms Kerr for frames, windows, roofing etc. without even placing orders for those items. Effectively, then, Mr and Ms Kerr incurred an additional 20 months’ worth of interest on their borrowings for those items. Third, they borrowed $25,000 for a retaining wall which Mr Lyons was not in a position to build as he lacked an active builder’s licence. It appears that Mr and Ms Kerr had the wall built by August 2018, so it is reasonable to proceed on the basis that they incurred an additional 12 months’ worth of interest on this borrowing. Fourth, it is reasonable to adopt an interest rate of 5% per annum, being the rate specified at item 11 of the contract schedule. This was the rate set for overdue payments, rather than for the present purpose, and it may well be different to the rate actually charged by the bank. However, in the absence of evidence of the actual rate, the rate agreed by the parties for a purpose related to the contract is the best available indicator of an appropriate rate.
  7. [61]
    The above approach does not factor in any interest on the September 2016 borrowings for payments to Mr Lyons, but some at least of that money was contractually due, and some at least would have gone to work actually performed by Mr Lyons and of benefit to Mr and Ms Kerr. Accordingly, those payments should be left out when calculating the loss relating to interest.
  8. [62]
    On the above bases, then, I calculate the estimated loss relating to interest as follows.
  9. [63]
    First, for the amounts borrowed between January and March 2017, totalling $88,503.50, the loss is calculated at 5% per annum over 1.67 years (20 months), which is $7,390.
  10. [64]
    Second, for the $25,000 borrowed in June 2017, the loss is calculated at 5% per annum over one year, which is $1,250.
  11. [65]
    The total estimated loss is therefore $8,640. Accordingly, Mr and Ms Kerr will be awarded $8,640 for the loss occasioned by additional interest they had to pay as a result of the termination of the contract and the substantial breach by Mr Lyons in relation to progressing the work.

Storage

  1. [66]
    Mr and Ms Kerr claim $3,136.50 for storage costs incurred in the period January 2018 to July 2019,[12] while they were living in rental accommodation. They have provided relevant records. I am satisfied that this is an expense they incurred as a result of the termination and Mr Lyons’ substantial breach in relation to progressing the work. Accordingly, Mr and Ms Kerr are entitled to this amount under clause 26 of the contract.

Legal costs

  1. [67]
    Mr and Ms Kerr claim for the costs of legal services they used:
    1. (a)
      $825 for advice on terminating the contract in 2017; and
    2. (b)
      $687.14 for a solicitor’s letter of demand to Mr Lyons in June 2018.
  2. [68]
    They have provided copies of the invoices.
  3. [69]
    I am satisfied that these were expenses incurred in connection with terminating the contract. Mr and Ms Kerr are entitled to reimbursement under clause 26 of the contract.

Pool safety fencing

  1. [70]
    Mr and Ms Kerr claim $484. They have provided a copy of an invoice from Advantage Pools and Tennis Courts for that amount, with the service described as ‘Variation: 6 month temporary fence hire’.
  2. [71]
    The basis for this claim is not articulated, but I infer that Mr and Ms Kerr needed to erect temporary safety fencing because the house had not been completed on time. Accordingly, I am satisfied that this was an expense occasioned to Mr and Ms Kerr by the termination and by Mr Lyons’ substantial breach in relation to progressing the work. Mr and Ms Kerr are therefore entitled to reimbursement under clause 26 of the contract.

Conclusion on this component

  1. [72]
    Of the $81,967.39 claimed by Mr and Ms Kerr, I am satisfied that they are entitled to be awarded $66,272.64.

Conclusion

  1. [73]
    The total amount to which Mr and Ms Kerr are entitled is $221,353.64. I will order that Mr Lyons pay this amount to Mr and Ms Kerr within 28 days.

Footnotes

[1] In a table filed on 8 May 2019 and in their statement filed on 1 October 2019, [3.15].

[2] Table filed by Mr and Ms Kerr on 8 May 2019.

[3] Queensland Building and Construction Commission Act 1991 (Qld), s 77.

[4] Ibid, definitions in Schedules 1B and 2.

[5] Ibid, s 77(3).

[6] Mr and Ms Kerr’s statement filed 1 October 2019, [4.3].

[7] From Russells Law, for Mr and Ms Kerr, to Mr Lyons, dated 4 June 2018.

[8] Mr and Ms Kerr’s statement filed 1 October 2019, [6.2].

[9] Mr Kerr’s statutory declaration dated 5 March 2019, appended to the statement of Mr and Ms Kerr filed 1 October 2019.

[10] Mr and Ms Kerr's statement filed 1 October 2019, [6.15].

[11] Mr and Ms Kerr's statement filed 1 October 2019, [7.9.2].

[12] The period is incorrectly stated as January 2017 to 31 July 2018 in Mr and Ms Kerr's statement filed 1 October 2019, [7.9.3].

Close

Editorial Notes

  • Published Case Name:

    Justin Kerr and Jacqueline Kerr v Damien Michael Lyons

  • Shortened Case Name:

    Kerr v Lyons

  • MNC:

    [2020] QCAT 148

  • Court:

    QCAT

  • Judge(s):

    Member Kanowski

  • Date:

    29 Apr 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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