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QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Imperial Homes (Qld) Pty Ltd v Boys  QCAT 299
Imperial Homes (Qld) Pty Ltd
Daniel Jay Boys
5 August 2020
10 October 201911 October 2019
CONTRACTS – BUILDING CONTRACT – PERFORMANCE OF WORK – TIME – NOTICES TO REMEDY SUBSTANTIAL BREACH, PRACTICAL COMPLETION AND TERMINATION – CLAIMS FOR DAMAGES AND DEFAULT INTEREST – where the parties entered into a home building contract – where the builder claimed practical completion – where the owner rejected the builder’s claim – where the owner issued a notice to remedy substantial breach which was rejected by the builder – where the owner issued a notice of termination of the building contract and entered into possession of the home – where the owner has claimed that the builder is in substantial breach of the building contract – where the owner has claimed damages and solatium – where the builder has accepted the owner’s repudiation of the building contract – where the builder has claimed default interest
Bellgrove v Eldridge (1954) 90 CLR 613
Williams v Stone Homes P/L and Anor  QDC 64
Avilake Pty Ltd v Tucker and Anor  QCATA 211
Prosser v Kimama Holdings Pty Ltd T/A Visual Diversity Homes  QCAT 77
Miller & Anor v Lida Build Pty Ltd  QCA 332
Thompson Residential Pty Ltd v Hart & Anor  QDC 132
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28
Queensland Building and Construction Commission Act 1991 (Qld), s 77; Schedule 1B s 40, s 41, s 42, s 43, s 44
Acts Interpretation Act 1954 (Qld), s 38
Corporations Act 2001 (Cth), s 109X
L Watt of Becker Watt Lawyers
D B Ferraro of Counsel instructed by Taylor David, Lawyers
REASONS FOR DECISION
- For the purposes of drafting the decision I will refer to the Applicant, Imperial Homes Pty Ltd, as Miller. Mr Miller was the contact for the Applicant company and it was Mr Miller who gave evidence on behalf of the Applicant company.
- Similarly, I will refer to the Respondent as Boys.
- On 27 April 2017, Miller and Boys entered into a Housing Industry Association (HIA) building contract (Building Contract) with attached schedules to construct a dwelling house (House) at 10 Churchwood Street, Greenslopes, Brisbane.
- Miller commenced work on 24 July 2017.
- On 1 May 2018, Miller received an issues register (dated 30 April 2018) (“Issues Register”).
- Miller alleges that the works under the Building Contract reached practical completion on 5 July 2018.
- On 12 July 2018, 22 July 2018 and 29 July 2018, Boys issued notices to Miller that practical completion had not been reached.
- On 29 July 2018, Boys served Miller with a second notice to remedy substantial breach. Miller responded to Boys's notice on 31 July 2018.
- On 11 August 2018, Boys gave Miller a notice of termination of the Building Contract and entered into possession of the House.
- On 21 September 2018, Miller commenced proceedings in the Tribunal claiming the final payment for achieving practical completion.
Proceedings and Hearing
- These proceedings were heard before me over two days on 10 and 11 October 2019. A further directions hearing took place on 7 April 2020.
- An issue that complicated these proceedings was the stance taken by the parties’ experts. That is, Mr Brent Smith for Miller and Mr Martin Helisma for Boys. I found that their opinions were diametrically opposed on many issues. Boys makes the point in his submissions that Mr Smith was acting as an advocate for Miller. I agree with this observation. However, I am also of the view that Mr Helisma was acting as an advocate for Boys. Therefore, I had to make difficult judgment calls when the experts were giving joint evidence in the hearing and when I was considering their reports and evidence.
- A further complication in this matter was how the alleged conflict between the Architectural Plans (Exhibit 10) and the Engineering Plans (Exhibit 11) should be interpreted. Evidence was given by Boys that he commissioned the drawing of the Architectural Plans and Engineering Plans separately and that he co-ordinated the drawing of these plans. There appears that there was little liaison between the architect and engineer. The apparent conflict relates to the doorways to the upper front balcony/rear deck and whether there should or should not be a step down from the interior house floor out to the front balcony/rear deck. This issue will be explored later.
- The property and House which are the subject of these proceedings is owned by Mr Daniel Boys and Ms Avena Linda Fernandez. Ms Fernandez is a party to the Building Contract and has signed some of the notices given to Miller. However, Ms Fernandez is not a party to these proceedings. Neither party raised this as an issue during the hearing.
- I have rounded the relevant figures/costs to the nearest dollar for the ease of calculation.
Termination of the Building Contract and Practical Completion
- I will first deal with the status of the notices to remedy substantial breach and whether Boys lawfully terminated the Building Contract either by way of the rights under the Building Contract or by way of common law rights.
- Boys gave a notice to remedy substantial breach on 27 June 2018 (Annexure NM-06 to the statement of evidence of Miller dated 8 April 2019). This notice was given pursuant to cl 28 of the Building Contract and contained six main issues. There was further correspondence and communication between Boys and Miller in regard to screens for some of the windows.
- On 5 July Miller advised Boys that Miller had achieved practical completion of the House but inadvertently failed to include the relevant notice in the communication. Miller provided the notice to Boys on 19 July 2019 (Annexure NM-09 to Miller’s statement dated 8 April 2019).
- Boys responded to this notice on 12 and 22 July that practical completion had not been achieved (Annexures A024 and A027 to the statement of Boys dated 8 April 2019).
- On 29 July 2019 Boys sent another notice to remedy substantial breach to the Miller raising five main issues (Annexure NM-13 to the statement of Miller dated 8 April 2019). By comparing the two notices to remedy substantial breach it is clear that many of the alleged defects in the two notices are duplicated.
- On 11 August 2018 Boys took possession of the House and changed the locks to prevent Miller from entering the House. Also, on 11 August 2018 Boys gave notice to Miller purporting to terminate the Building Contract pursuant to cl 28 of the Building Contract. These notices were given to Miller by email early on 11 August 2108. Clause 28.1 of the Building Contract states:
28.1 The owner is entitled to give a notice to remedy breach under clause 28.3 if the builder is in substantial breach of this contract. The builder is in substantial breach of this contract if the builder:
- (a)Suspends the carrying out of the works, other than under Clause 19;
- (b)Has the builder’s licence cancelled or suspended; or
- (c)Is otherwise in substantial breach of this contract.
- Clause 28.3 of the Building Contract states:
If a party is in substantial breach of this contract, then the other party may give that party a notice to remedy breach in writing:
- (a)Specifying the substantial breach;
- (b)Requiring that the substantial breach be rectified within 10 working days after the notice is given under this contract; and
- (c)Stating that, if the substantial breach is not rectified, the other party intends to end this contract.
- Clause 28.4 of the Building Contract states:
If a party is in substantial breach does not rectify or commence to substantially rectify the substantial breach stated in the notice to remedy breach within 10 working days of receiving that notice, the other party may end this contract by giving a separate notice to that effect.
- After receipt of this notice of termination Miller’s lawyers, Becker Watt Lawyers, wrote to Boys on 14 August 2018 (Annexure NM-14A of the statement of Miller dated 8 April 2019). This letter raises the issues of the possession of the House and the purported termination of the Building Contract. The letter goes on to say that the purported termination of the Building Contract is a repudiation of the Building Contract and Miller accepts the repudiation.
- Miller has submitted that the notice of termination is defective because the notice to remedy substantial breach was delivered by email to Miller at approximately 10pm Sunday 29 July 2018 and only nine working days elapsed between the service of the notices. Miller submits that because of the operation of s 38(1) of the Acts Interpretation Act 1954 (Qld) (AIA) the notice is only effective the next working day being Monday 30 July 2018. I am not convinced that this provision of the AIA assists Miller because s 38 of the AIA refers to the interpretation of statutes and not contracts between private parties.
- Similarly, Miller submits that s 109X of the Corporations Act 2001 (Cth) provides assistance to the interpretation of the terms of the Building Contract. I do not believe that this legislation provides any assistance to Miller.
- I agree with Boys’s submission that the notice to remedy substantial breach was served by email on the evening of 29 July 2018. Clause 31.1(d) of the Building Contract states:
Unless otherwise stated in this contract, a notice is deemed to be given and received if the notice is:
- (d)E-mailed to the party’s current email address.
- On a straight reading of this provision Miller received the notice on the evening of 29 July 2018. Therefore, it was effective on receipt and there were 10 clear working days between the notice to remedy substantial breach and the notice of termination.
- Boys says that even if the notice to remedy substantial breach served on 29 July 2018 did not allow 10 clear working days before the notice of termination was served on Miller on 11 August 2018, Boys can rely on the first notice to remedy substantial breach served on Miller on 27 June 2018. Given my finding regarding the second notice of substantial breach I do not need to make a finding regarding this submission.
- Boys has raised the issue that Miller did not serve a “defects document” when the notice of practical completion was served on Boys as required by cl 25.2 of the Building Contract. This issue will be explored later in this decision.
- A central question in these proceedings is did Miller achieve practical completion when notice was given to Boys on 5 July 2018? “Practical Completion” is defined in Schedule 2 of the Building Contract as follows:
“Practical Completion” means the day when the subject work is completed:
- (a)In compliance with the contract, including all plans and specifications for the work and all statutory requirements applying to the work; and
- (b)Without any defects or omissions, other than minor defects or minor omissions that will not unreasonably affect occupation; and
- (c)If the building owner claims there are minor defects or minor omissions, the building contractor gives the building owner a defects document for minor defects or minor omissions.
- To answer this question, it is necessary to determine if any of the alleged defects are minor, major or structural defects. Therefore, it is necessary to analyse and comment on all the alleged defects outlined in the Joint Expert Report – Scott Schedule (Scott Schedule) (Exhibit 5). The experts gave joint oral evidence and were questioned at length. These experts found very little common ground, so it is not surprising that the parties were not able to reach any resolution of this dispute before the hearing. The experts certainly advocated for their respective clients so their evidence must be treated with some reservation.
- I also note that Miller obtained certification from K-Spec, Building Consultants, dated 13 July 2018 (Annexure NM – 11 to the statement of Miller dated 8 April 2019) that the House had reached practical completion and listed a number of items that required rectification by Miller. These items could be generally described as minor. The items in this certificate do not mirror the extensive list produced in the Scott Schedule.
- Further, Boys made a complaint to the QBCC about the quality of construction of the House. QBCC investigated and commented on some 100 items. The letter is dated 5 February 2019 and is annexure NM – 19 to the statement of Miller dated 8 April 2019. QBCC advised Boys on 13 March 2019 (Annexure NM – 21 to the statement of Miller dated 8 April 2019) that it decided not to issue a direction to rectify any of the alleged defects because the items were:
- (a)Non-Structural Defects - Reasonability;
- (b)No Defect;
- (c)Not Building Work;
- (d)Contractual Matter;
- (e)Complaint Withdrawn; or
- (f)Compliant Item Removed.
- Miller consulted the HIA and the engineer for the construction, Inertia Engineering, in relation to the alleged defects outlined in the Issues Register. Kelvin Cuskelly, Assistant Director of Building Services of HIA and Codey Stonier of Inertia Engineering performed site inspections. Miller was informed that no major defects could be identified and the works were structurally adequate.
- Miller also contacted the QBCC on 2 July 2018 and submitted an early dispute resolution request. The request outlined the issues identified by Boys. On 4 July 2018 QBCC informed Miller that the matter was outside its jurisdiction and referred Miller to the Tribunal.
- Miller had some difficulty in regard to the issue of the Form 21 final certificate from Mr Phil Parkes of the Building Code Approval Group. The difficulty related to a height issue with the rear external stairs. Miller was dealing with this issue but had not commenced any work to resolve this issue. The solution was to remove the rear stairs so the certificate would issue. Boys removed the stairs and Mr Phil Parkes confirmed that the certificate dated 20 August 2018 was issued (Annexure NM – 14D to the statement of Miller dated 8 April 2019). Boys gave evidence at the hearing that the stairs have not been reattached to the House.
Scott Schedule Exhibit 5
Items 1 to 3 (inclusive)
- These items relate to the membrane or sarking in the wall and roof cavity. Boys’s building expert (Mr Helisma) says that the sarking used by Miller does not provide sufficient moisture protection or energy efficiency. He has made this assessment by taking samples of the sarking from the House and by considering photographs taken by Boys during the construction of the House. He states that the sarking should be further overlapped and the roof cavity should be a sealed envelope. See pages 10 to 17 of Mr Helisma’s report - Exhibit 4.
- Mr Helisma has pointed out in the photograph on page 15 of his report that the sarking has not been properly overlapped and water will enter behind the cladding and into the wall frame. I am not certain where this sarking has been installed and what work, if any, was undertaken on this sarking after the photograph was taken and when the cladding was installed.
- Mr Gilligan, who is Miller’s on-site carpenter and licenced builder, has provided a statement dated 15 May 2019 where he states that the membrane has been overlapped by a minimum of 150mms. He says that this is his standard practice. Further he states that a Bradford Thermo seal was installed prior to the installation of the building membrane.
- Mr Smith in giving evidence said that water entering behind the sarking was extremely unlikely because of the cladding installed on the outside of the House. In this regard I note that I have made an order to rectify any gaps in the cladding in item 4 of the Scott Schedule. This should provide further protection against water entering the wall behind the sarking.
- Mr Helisma says the sarking should be replaced by another product and be installed according to this manufacturer’s recommendations to give extra protection. These rectification recommendations involve removing all the cladding and the roof panels and replacing the sarking and then replacing the cladding and roof panels at a cost of $37,331 and $3,208 respectively. These are major works.
- Miller has outlined the sarking that he used in his statement dated 26 September 2019 (see NM - 05, NM - 06 and NM - 07 of this statement). He says that the sarking is a three wrap sarking. The thermal performance rating of this sarking appears to be similar to the sarking specified in item 12 of the Building Schedule of the Building Contract which states:
12 INSULATION AND SARKING
- (a)Ceiling Insulation Type: R2.5 Insulation Batts to ceiling space
- (b)Wall Insulation Type: R1.5 Insulation Batts to External Light Weight Walls
- (c)Wall Sarking Type: Wall sisalation Wrap to Exterior Perimeter
- It should be noted that the ratings specifications in the Building Contract for this House are very low.
- Mr Smith comments on the sarking used in the construction of the House. See pages 3 to 5 of Mr Smith’s report (Exhibit 3). Mr Smith says that the sarking used in the House shows no sign of water penetration in the walls and roof cavity. Further, Boys did not report that any water had penetrated the House when Mr Smith was inspecting the House on 29 March 2019. At that point Boys had been living in the House for over seven months.
- Smith also says that no formal testing has been undertaken by an appropriate expert to determine the energy efficiency of the sarking. He also observes that the QBCC investigated these items and concluded “there was insufficient evidence to reveal any obvious defective construction practices”.
- I also note that all roof sheeting, fascia, gutters and sarking serving the development was certified and a form 16 – inspection certificate has issued in respect of the work for items 1 to 3. See attachment NM-01 of the statement of Miller dated 26 September 2019.
- Mr Helisma also pointed out that there was some overlapping of the sarking in the roof cavity which was not taped properly. See the photographs on page 17 of Mr Helisma’s report and page 5 of Mr Smith’s report. Mr Helisma says that there should be sealed envelope in this roof cavity. Mr Smith estimated that this would require minor work costing only $50 to rectify this defect.
- I preferred the evidence of Mr Smith in respect of items 1 to 3.
- The principle relating to the law on this issue was explored in the High Court decision of Bellgrove v Eldridge (1954) CLR 613. At page 619 of Bellgrove the Court stated:
Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of dealing with the situation and in such cases the true measure of the building owner’s loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by defective workmanship or materials.
As to what remedial work is both “necessary” and “reasonable” in any particular case is a question of fact…
- In Bellgrove the Court held that the method of dealing with a defect must be reasonable and be a true measure of the owner’s loss. I preferred the evidence of Mr Smith that the sarking and insulation used in the construction meets the appropriate energy and moisture retention standards and meets the Building Contract requirements.
- Boys could not demonstrate that there is any moisture entering the interior of the House or what is the energy efficiency of the House. It does not seem reasonable to me to order works costing $37,331 and $3,208 when Boys can show little or no apparent benefit by carrying out such extensive works. Further no evidence has been presented to the Tribunal that the value of the House has been diminished by any departure from strict compliance with the Building Contract.
- On this basis I allow a nominal sum of $200 to properly seal the roof cavity and do not allow any further costs in respect of these items.
Item 4 – External cladding has been poorly installed as there are gaps between the horizontal laps and joints exceeding unacceptable tolerances
- Mr Helisma gave evidence that this issue could be resolved if the works ($37,331) for items 1 and 2 are undertaken. Alternatively, he says that to undertake this work as a single item he estimated it would cost $19,586 to rectify the issue.
- I preferred the evidence of Mr Smith that there were some gaps and that some water was entering the House when a hose is directed straight at the cladding. However, he gave evidence that this was not a realistic test and filler in the cladding could resolve this issue. He estimated a cost of $750 to rectify this issue. Mr Helisma gave evidence that using filler could alleviate some of the issues but estimated the cost would be higher than $750.
- Again, I refer to the doctrine in Bellgrove that the cost of $19,586 is not justified in this case. During the hearing I advised the experts that I would place an estimate of $1,500 to rectify this defect.
- Withdrawn by consent.
Items 6, 7, 8 and 9 – Head flashing has not been installed over Bed 2 sliding door and Rumpus Room stacker doors to rear patio. Where flashing has been installed to run past either side of the first floor window, door frames and Bed 1 front window and no sill flashing has been installed under aluminium doors
- Mr Smith gave evidence that flashing is not required for items 6 and 7 because there is protection from the water entering these areas as there is a roof and deck above these openings. Mr Smith gave evidence that there is very little chance of moisture entering these areas and that the QBCC statutory warranties apply to these items which provide a safeguard to the owner. Further Mr Smith stated there was no evidence of moisture from the ground or elsewhere and there is extra protection because the installed items are aluminium as opposed to timber which is more susceptible to moisture damage.
- The overall cost estimated by Mr Helisma is some $3,900. On these items I prefer the evidence of Mr Helisma who gave evidence that these items should stand up to very inclement weather and the flashing is essential. There was also discussion between the experts that the costs estimated by Mr Helisma are on the upper limit of the cost range and that these costs could be reduced. They agreed that items 7 and 8 could be rectified for an amount of $1,200.
- Item 7 is the rumpus room stacker doors. Later in this decision I have made an order that these stacker doors should be replaced. Flashing can be installed for these doors when this work is undertaken. Therefore, I have deducted the sum of $600 to rectify the flashing of this item.
- Taking into account the views of both experts and rounding off the estimates I allow the sum of $3,000 for items 6 to 9. I believe this is a relatively small cost to guarantee that no moisture enters the interior of the House during inclement weather.
Item 10, 11 and 25 – The incorrect Upper Level Stacker Door to accommodate the rear deck designed level. The deck has not been installed to the finished floor level.
- This item was the subject of much debate between the experts at the hearing. Boys says that it is clear that the rear deck should be the same level as the inside of the interior of the House so that there should be a seamless flow from the interior to the rear deck.
- The Architectural Plans (Exhibit 10) and Engineering Plans (Exhibit 11) are confusing. The Engineering Plans show a step down from the interior to the rear deck and make reference to the Architectural Drawings which show no step down. There is no clear interpretation between the two plans. Boys gave evidence that he commissioned the drawing of the plans and there was no co-ordination between the architect and the engineer in respect to the drawing of the plans. Also, there were no discussions regarding this issue between Miller and Boys in the negotiations leading up to the execution of the Building Contract or before the building work for the door and deck was commenced.
- Boys gave evidence that in early April 2018 he arrived at the House one day and noticed the difference in the levels. He said that he raised this with Miller’s carpenter on site who was Mr Gilligan. Mr Boys said that Mr Gilligan appeared surprised and told Boys that he did not have a copy of the plans. Further, Boys says that he raised this issue with Miller over the next week or so and he says that Miller was of the view that he had complied with the terms of the Building Contract and that he would take no steps to alter the level of the deck.
- However, Miller gave evidence that the issue of the step down was not raised with him until the end of April or the beginning of May 2018 which is some three or four weeks after the incident with Mr Gilligan. Miller gave evidence that Boys was a very regular visitor to the House construction. Miller stated that he estimated that Boys visited the House every second day. Therefore, I find it surprising that Boys did not formally raise this as an issue for a considerable period of approximately three weeks when work would have continued on the House for this period.
- Miller makes the point that the plans are confusing and inconsistent. Further Miller says the floor levels were not constructed at the same level as the interior to ensure that that no water enters the interior of the House. He gave evidence that this is standard building practice and this should also apply to the stacker doors.
- The conditions of the Building Contract give very little assistance. Clause 13.6 of the Building Contract gives the order of preference of documentation but does not make any distinction between architectural plans and engineering plans. The experts gave conflicting evidence and they could not agree which plans should take precedence and how the plans should be interpreted when viewed together.
- Boys makes the point that the Engineering Plans make references to the Architectural Plans regarding this issue. The Engineering Plans make references to the word “Arch”. Miller and his expert say that this is a reference to an arch or opening. I agree with Boys that the references to “Arch” in the Engineering Plans are references to architect. However, it is my view that the Architectural Plans are also not clear on the issue of the floors being flush. The only reference in the Architectural Plans to the interior floor level and exterior deck floor levels being the same is when you view the plans for the south east and north west elevations on pages 5 and 6 of the Architectural Plans. There is no other diametric or written reference to the levels in the either of the plans.
- Miller gave evidence that the sketches on pages 5 and 6 of the Architectural Plans are drawn to a scale of 1/100 and there are dotted lines for the finished floor levels at 35400 and the other dotted lines underneath at the finished ceiling level of 35000 for the rooms on the ground floor. He is of the view that they are confusing and there is not sufficient detail to determine the finished floor level of the deck. I agree that there should have been more detail in the plans to alert the builder to this issue.
- The Architectural Plans do not include any specific details to show that the bottom track of the stacker doors leading out to the rear deck will be flush with or almost flush (i.e. low profile track) with the inside floor level and the rear deck floor. As mentioned, the elevation plans on page 5 and 6 of the Architectural plans show the levels of the floors are to be at RL 35400. But plans for the elevations do not show any specific detail of how the stacker door is to be constructed.
- One of the impacts of building the rear deck lower than 35400 is that the back patio stairs do not have sufficient head height. Miller says that this issue could have been easily rectified by extending the top of the stairs out from the deck by a very short distance to allow sufficient head room at the bottom of the stairs. This issue is discussed in the next item.
- Page 14 of the Architectural Plans shows the stacker doors (D 29) are to have a recessed bottom track and to have a height of 2400. Page 14 does not show a head height of the stacker doors. The Architectural Plans are deficient in this regard and this issue is relevant to other items in the Scott Schedule. If the stacker doors were to be flush with the interior floor it would be necessary to recess the door further and to have a finished door height greater than 2400.
- I also note that the doors D20 and D21 which are erected on the ground floor are to be recessed into the concrete slab by 50 mms. This is noted on page 15 of the Architectural Plans. However, there is no note anywhere in the Architectural Plans regarding the depth that D29 should be recessed.
- The as constructed step down between the interior floor level and the rear deck level floor levels is some 30 to 35 mms which I believe is minor. However, when one looks at the illustrations on page 26 of Mr Helisma’s report it shows the step down from the top of the stacker door track to the rear deck floor level is some 85 mms. I believe this is a significant height.
- Boys raised the issue of the track for D29 by way of an email to Miller on 4 April 2018. See attachment A013 to the statement of Boys dated 8 April 2019.
- I accept the evidence of Mr Helisma that the stacker doors should be recessed so the interior floor level is level or almost level with the top of the track of the stacker doors. Probably there was a need for stacker doors to have a lower track profile. This would bring the step down from the top of the track of the stacker door deck to the rear deck down to a more manageable height.
- The cost of replacing this stacker door is $5,159 which I believe is justified in the circumstances.
- There is no doubt there is some ambiguity and lack of clarity with the floor levels in the plans and the step down as shown in the Engineering Plans. I can understand why Miller was confused and Miller says the step down prevents water from entering the interior of the House. Further, I note that Inertia Engineering have certified that the rear deck is structurally sound. See attachment NM – 04 of the statement of Miller dated 26 September 2019. Therefore, there is no structural issue relating to item 11 (Rear deck joists do not butt into steel bearer).
- Even if item 10 (regarding the level of the floors) and item 11 are a deviation from the plans, I believe the principle outlined in Bellgrove should be applied. I am of the view that the small step down of some 30 mms does not justify a cost of $13,098 to resolve the issue. Further no evidence was presented to the Tribunal that the difference in the floor levels in any way diminishes the value of the House. In coming to this decision, I also take into account the fact that Boys did not formally raise his concerns with Miller but allowed construction to continue for a period of time.
- Further, if the stacker doors are further recessed or replaced with stacker doors with a lower track profile, this would mitigate the effect of the differing floor levels.
- The issues relating to item 10 and 11 also relate to item 25 (Front balcony floor level not on the same level as the interior floor) where there is an estimated rectification cost of some $5,988. This is a significant sum.
- I also note that the front balcony and rear patio deck have been certified as structurally sound. See attachments NM 03 to the statement of Miller dated 26 September 2019.
- Therefore, the total cost to make the floor levels flush for the front balcony and rear deck is the sum of $19,086 ($13,098 and $5,988).
- Accordingly, there is no order to rectify these items except for the cost of the replacement of the stacker doors which is $5,159.
Item 12 – Rear patio stairs and head height.
- These stairs were removed by Boys so that a final certificate of compliance for the House (form 21) could be issued from Mr Phil Parkes of the Brisbane Advisory Group on 20 August 2018. Miller accepts that the stairs must be reinstated to accommodate the reduced head height between the upper deck and the lower landing. Miller’s expert has allowed a cost of $970 whereas Boys’s expert has allowed a cost of $1,353.62. In the circumstances I allow a figure of $1,200 to reinstate the rear patio stairs.
Item 13 – Fixings for rear deck pole not in accordance with engineering drawings
- Miller accepts that fixing for the rear deck pole was not constructed in accordance with the Engineering Plans as drafted by Inertia Engineers. Inertia Engineers have confirmed that this departure is an aesthetic issue and does not affect the structural integrity of the deck. See Annexure NM – 02 to the statement of Miller dated 26 September 2019.
- On this basis and using the principle in Bellgrove there is no reason to order any rectification for this item.
Items 14 and 15 – Rear deck joists less than the dimensions specified in the Engineering Plans and the rear deck joists had part of treated layer removed.
- The deck joists were constructed of treated hardwood and during construction some parts of treated wood were planed off. I accept the evidence of Mr Smith that the joists are some two metres above a concrete surface and under cover and it very unlikely that the joists will be attacked by termites. Mr Helisma could not provide details of any building standard or code that there is a requirement to have the top surface of timber joists for decks to be treated. There does not appear to be any apparent benefit to require the top surface to be treated.
- Further, as previously mentioned Inertia Engineering have provided certification that the as constructed joists are adequate for the structural integrity of the rear deck. See attachments NM – 02 and 04 of the statement of Miller dated 26 September 2019. Also, no evidence was advanced by Boys that these issues would diminish the value of the House.
- Mr Helisma estimates that the costs to rectify these issues range between $2,400 to $6,900. On this basis and using the principle in Bellgrove it is my view that the cost to rectify these items is not justified and I make no order for rectification of these items.
Item 16 – Rear deck packed with timber packers on the timber pole and ribbon plate due to timber shrinkage
- Both experts agree that this is not a structural issue. However, it is important that the aesthetics of the house is also taken into account. It appears to me the way the shrinkage was rectified in this case is very untidy and visually very unattractive. The timber packers are some 20 mms in depth. Boys’s expert gave evidence that the cost to rectify this item is $400 to $500. Given the relatively small cost to rectify this item I believe that it is justified. Therefore, $450 should be allowed for this rectification cost.
Item 17 – Defects in decking boards
- Both experts agree on this issue and the agreed cost is $300.
Items 18 and 19
Item 20 – Termite barrier has been breached
- Both experts agree that the cost to rectify this issue is $350.
Item 21 – Front deck bearer is undersized relative to the engineering drawings
- Miller accepts this is the case. However, Miller presented a letter dated 30 July 2019 from Inertia Engineering that the bearer that was installed is structurally adequate for the purpose. See annexure NM – 03 to the statement of Miller dated 26 September 2019. See also the certificate form 16 from Inertia Engineering dated 30 July 2019 (Exhibit 8). The letter goes on to say that the as constructed bearer 200 PFC as opposed to the specified bearer PFC 230 would take less weight and have more flex. The letter says “The current beam will deflect slightly further than we would typically allow however from a strength point of view (failure) the beam is structurally adequate”.
- Boys says that he accepts the bearer is structurally adequate but says that the use of the smaller bearer is a departure from the Engineering Plans and the bearer should be replaced. I note that the letter from Inertia ends by saying “We also discussed this with the owner who was in agreeance.” This issue was not fully canvassed at the hearing however I note that the cost to replace the bearer with a 230 PFC bearer is estimated by Mr Helisma as some $6,000. By applying the principle in Bellgrove this significant cost is not justified. Therefore, there should be no cost relating to this item.
Items 22, 23 and 24
- Claims withdrawn.
- Comments previously with item 11.
Item 26 – Tannin from deck has stained the walls below.
- Boys has suggested that the decking boards should have been sealed and Mr Helisma says that rectification should be undertaken by removing the decking from both decks, sealing the new decking and replacing the decking at a cost some $7,300. This a significant cost.
- Mr Smith and Miller say that there is staining but this a natural process and that the tannin leaching process should now be almost complete. Normally these issues are rectified by some painting in the 12 months defect liability period after completion of the House. Mr Smith says that this can be rectified as part of the process and cost of rectifying item 4.
- I accept the evidence of Mr Smith and Miller on this issue and I cannot accept that there is any need or justification for a wholesale replacement and sealing of the decking boards for both decks at a cost of over $7,000. Therefore, there is no cost allowance for this item.
Items 27 and 28
- Agreed at conclave: $45.
Item 29 – Front door is bowed and does not seal properly
- Miller accepts this is the case but says that this item would have been rectified, probably by a claim against the door supplier, at no cost to Miller. Miller says that he was prevented from undertaking this rectification by Boys taking possession of the House.
- Mr Helisma has costed the installation of a new door at $1,086 whereas Mr Smith is suggesting that minor work of some $250 would suffice. Given the current situation that Miller will not be undertaking the replacement of the door and any work connected with the replacement of the door then I allow the sum of $1,086 for the cost of rectifying this item.
Items 30, 31 and 32 – French doors
- Both experts agree that the cost to rectify these issues is $500.
Items 33, 34, 35 and 36
Item 37 - Tiles have separated in the middle level storeroom, hall and laundry
- Both experts agreed that some work was required for this item but they could not agree on the scope or the cost. The cost ranged from $2,780 and $675. Because work is required for this item and the experts could not agree I have decided to attach a cost of $1,500 for rectification of this item.
Item 38 and 39 – The kitchen joinery MDF bulkheads have not been aligned with the doors and gables of the cabintery. Cupboards above fridge were not flush with adjacent walls
- Miller says that the works were built in accordance with the drawings and there are ambiguities in the drawings. Boys says that by email dated 16 March 2018 (Exhibit 9) he approved the plans subject to two changes but that these two changes did not include any reference to removal of the notation “flush with doors”. The plans dated 19 March 2018 were unfortunately drawn with no notation MDF bulkheads to “fit flush with doors”.
- Boys says that Miller knew about this requirement and he also did not notice the removal of the notation. On balance, I believe that the kitchen should have been constructed in accordance with the plans approved by Boys on 16 March 2018. That is, MDF bulkheads to fit flush with the doors. The protrusion may only be 2mms but I believe that this is significant in the context of a kitchen which is a high use area of the House.
- As to who should bear the responsibility for this omission this is a difficult issue to determine. On the basis that Miller is responsible for the overall supervision of the works it is my view that Miller should pay for the cost of rectification of $858.
Items 40 to 44 – Issues with kitchen cabinets and equipment
- Both experts agree that these items are minor items that require rectification by Miller. Miller says that these issues would have been resolved by Miller at very little cost to Miller in the 12 months defects liability period after completion of the House. Given my earlier comments that Miller will not now undertake these works I accept the estimates of Mr Helisma regarding the cost of rectifying these items. That is, $353 and $100 being a total of $453.
Item 45 – Installation of the rangehood
- This is an item which both experts agree that the cost to install is $250 and it should have been installed by Miller. Miller says that this item was to be supplied by Boys and it was not supplied before he took possession of the House. Miller says that he could have installed the rangehood as part of the whole building works at very little cost to him. Because this item was not supplied to Miller before 11 August 2018 then Boys should be responsible for the cost of installation of the rangehood .
Item 46 – Gaps in hardwood floors
- Agreed withdrawn.
Items 47 and 48 – The air conditioning (AC) system was not completed in accordance with the approved plans and the AC controller was not installed near the linen closet
- Both parties agree that the AC system was not completed in accordance with the Architectural Plans (Exhibit 10). The Architectural Plans call for three outlets to be installed. Miller’s subcontractor, Quality Air, installed two larger outlets and changed the position of the return.
- Mr Lyle Fitzpatrick and Mr Jason Fitzpatrick of Quality Air gave evidence that the AC system as installed is more efficient and more functional than the AC system as drawn in the Architectural Plans. Mr Lyle Fitzpatrick is the sales manager and Mr Jason Fitzpatrick is the AC expert and technician. Evidence was given that tests were undertaken by Quality Air and advice was given to Miller that a larger two outlet system would work more efficiently than the system as drawn in the Architectural Plans.
- Although there is a departure from the Architectural Plans Boys appears to have benefited from this departure.
- Boys gave evidence that the as constructed system does not always work efficiently and there is a hot spot in the dining room on hot afternoons. However, Boys did not present any expert evidence that contradicts the evidence of Jason Fitzpatrick or that placing an outlet in the dining room (as shown in the Architectural Plans) would be more efficient than the as constructed AC system. On this basis I must conclude that Boys has benefited from the installation of the as constructed AC system. Therefore, there should be no allowance to amend the AC system.
- Boys accepts that the AC control pad is functioning, however Boys claims that the AC control pad has not been installed in accordance with his direction and should be relocated at a cost of some $460. Boys in his statement dated 8 April 2019 (annexure A 052 to Boys’s statement dated 8 April 2019) makes reference to a direction to Miller regarding the preferred location of the control pad. In giving oral evidence Miller conceded that Quality Air made a mistake in the positioning of the AC control panel. On this basis the AC should be relocated at a cost of $460.
Item 49 – Floor lights in the internal stairs are unevenly spaced
- Miller says that the lights were installed as evenly as the conditions would allow as there are studs and bearers which prevented the electrician from the placing of the lights evenly. Mr Bradley Adrey, electrician, gave oral evidence that one of his electricians (“Tim”) advised him that he could not position the lights evenly because of the studs and bearers.
- Boys complains that Mr Adrey’s evidence is hearsay and should not be accepted. Further Boys states that this issue was never put to Boys in cross-examination. However, Boys was represented by counsel in the hearing and he had the opportunity to challenge or further ventilate this issue. Further, s 28 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) states that in conducting proceedings the Tribunal is not strictly bound by the rules of evidence and is obliged to conduct the hearings with as little formality as possible.
- On this basis I accept the evidence of Miller and Mr Adrey on this item and there should be no order for rectification of this item.
Items 50 and 52 – No cornices installed to the ground floor to first floor stairs. No skirting boards installed above stringers in the internal stairs. Gaps now appear between the wall and stringers where sealant has split
- Miller says that this is his standard practice not to include cornices and skirting to these areas and it was Miller’s submission that there is no express provision in the Building Contract regarding this issue. Miller says that the gaps are usually rectified in the 12 months defect liability period after practical completion.
- Boys says that items 18(d) and 19(b) of the Building Schedule of the Building Contract are relevant in determining these issues. They state:
18 Internal Linings… (d) cornice
19 Internal Fixing Timbers… (b) skirting
- Boys has given evidence that the stairs are unsightly with no cornice or skirting. I prefer the evidence of Boys and his expert on these issues. While the issue of compliance with the terms of the Building Contract is not absolutely clear, some rectification work is required on the stairs and on balance I believe that the work as outlined by Mr Helisma should be allowed for these items. Mr Helisma has estimated that the cost to rectify items 50 and 52 are $225 and $325 making a total of $550.
Items 53 to 55 – These items relate to what could be described as minor repairs, and maintenance repairs
- Both experts agree that work is required. Miller says that he could have resolved these issues at very little cost as part of the maintenance program after he handed over possession of the House to Boys. Also, item 54 will be resolved with the rectification work for items 50 and 52. There was wide range of costings between the two experts and their reluctance to compromise was difficult to accept given they are the independent experts on these costings. On this basis I propose to draw a line between the two experts’ estimates and allocate a sum of $800 to rectify these issues.
Item 56 – AC Pipework installed above lift shaft void
Item 57 – Roof trusses have been installed in the void preventing lift installation and overrun requirements as specified on the Engineering Drawings
- On drawing S33 the Engineering Plans clearly show “Trusses to allow for lift requirements (overrun etc)”. Miller says that the current overrun is sufficient to accommodate a lift and he also says that Boys should have allowed structural steel in the plans. Miller says that he consulted one lift manufacturer who advised him that there was sufficient space above the void as constructed.
- Mr Helisma says that only minor work costing $209 is required to rectify this issue and he does not accept Miller’s position on this issue. I prefer the evidence of Mr Helisma on this issue and given the relatively small cost involved I allocate $209 to rectify this issue.
Items 58 and 59 – Bed 2 and Rumpus Room sliding doors heights are not in line with the adjacent windows in these rooms
- The window and door details are outlined on pages 13 and 14 of the Architectural Plans. On page 13 the relevant doors are shown as D 20 and D21 and on page 14 the doors (D 20 and D 21) are shown at 2400 in the “Height” column. On page 14, D 20 and D 21 have an extra notation in the “Details” column which states “Recessed Bottom Track”.
- On page 15 of the Architectural Plans there is a reference to D20 and D 21 as “sliding glass door slab recess” in column 3 of that page where there is a requirement to recess these doors 50 mms into the concrete slabs.
- Boys’s concern is that the tops of the windows in these rooms have been erected at a height of 2400mm from the floor whereas the doors have been erected at a height of approximately 2350mm from the floor. The reason for this difference is that the doors have been recessed into the concrete floor by some 50mms. No allowance has been made for this recess.
- Miller says that he has complied with the Architectural Plans as the heights of D 20 and D 21 are in fact 2400. He says that the height of the doors on page 14 of the Architectural Plans refers to the dimensions of the particular door. He says there is no head height specified on page 14 for the doors as there is for the windows. On page 14 of the Architectural Plans there is a separate schedule for the windows where there is a separate column “Head Height”. There is no such column or detail in the door schedule on page 14.
- In giving oral evidence Miller stated that it is not unusual in the construction of dwelling houses for there to be a difference in the height of the doors and windows. In fact, he said that this is the case with his own house.
- The experts could not reach a consensus on this issue and Mr Smith did point out that from an aesthetics point of view this is not an issue because the windows are not on the same walls as any of the doors. Miller says that the difference in height is very difficult to detect. Boys has not raised any practical or access problems in relation to the difference in levels of the doors and windows. Also, the cost estimate to replace the doors is some $5,368 which is a significant sum.
- On balance I believe that Miller has complied with the Architectural Plans and I prefer the evidence of Miller and his expert on these issues and make no allowances for rectification of these issues.
- Even if there was to be a departure from the Architectural Plans the principle in Bellgrove applies to these items. The cost of approximately $5,368 is not justified to remedy such a minor aesthetic issue and no evidence was provided to the Tribunal that these items will diminish the value of the House.
Items 60, 61, 63, 64, 65, 66, 67 and 68
Item 62 – Shower mixer tap
- Agreed: $85.
Item 69 – chips in blockwork render
- Agreed: $85.
Items 70 and 71 – two lights on one switch
- The issue in both these items is that two lights have been installed in the upstairs WC and the downstairs WC and have one switch for both lights in each WC. The electrical plan shows that each light in the WCs should have a separate switch. This a departure from the plans and the cost to rectify these items is the relatively small cost of $94. On this basis the sum of $94 should be allowed for these items.
Item 72 – Garage exhaust fan is not fit for purpose
- This variation was requested by Boys. See pages 36 and 37 of the statement of Miller dated 4 June 2019. In this statement Miller says the only exhaust fans allowed for in the Building Contract were in the ensuite and bathroom. He says that no exhaust fan was allowed for in the garage. Miller goes on to say that Boys is incorrect in stating that that the Prime Cost (PC) allowance in the Building Contract was for light fittings and ceiling fans only. Miller says that the PC allowance included all electrical fittings to be supplied for the electrician to fit at electrical fit-off, including the bathroom exhaust fans/heater lights and the electrician supplies and installs any ducting associated with the fitting of exhaust fans/heater lights.
- Miller was not provided with any specifications for the exhaust fan in the garage and he says that there were limitations regarding external venting. He goes on to say that the electrician supplied and installed a high performance 150 mm fan with extraction at 335m3/hour.
- Boys requested a change from an exhaust fan to a power point in the garage. By that point the exhaust fan had been purchased and installed in the garage by the electrician as per Boys’s original on-site instructions to the electrician.
- Boys relies on paragraphs 232 and 233 of Mr Helisma’s report (Exhibit 3). This report states that the exhaust fan that was installed is inadequate for the purpose and is a bathroom type. He says that garages require six to eight changes per hour. However, Mr Helisma is not an expert in this field nor has he conducted any tests or calculations of the exhaust fan or the garage itself. On that basis I cannot accept his evidence and I find that there is no proven defect in regard to the exhaust fan installed in the garage.
Item 73 – Conduits required for external lights. Intercom and power to the wrong side of the property
- Boys and his expert say that the electrical conduit has been installed on the wrong side of the front of the property. Boys says that the conduit has been installed to the opposite side of the front boundary to where the intercom was to be located.
- Miller says that the conduits for external lights, intercom and power have been installed to the front boundary in accordance with item 25 of the Building Schedule of the Building Contract. Item 25 (x) says:
(x) Eternal Provision For: Lights/Power/Intercom to Future Front Fence.
- Miller says that there is nothing in the plans stipulating where the conduit should be situated on the front boundary. In giving oral evidence he stated that he installed the electrical conduits to connect to the temporary power pole erected near the front boundary. Further Miller says that there was no agreement or communication between the parties regarding the position of the conduit on the front boundary.
- Miller also stated that Boys did not immediately raise any concerns regarding the position of the conduit and Boys has not presented any evidence of any such communication or agreement regarding the position of the conduit on the front boundary. This issue is also connected to item 75 – Driveway re-alignment.
- During the hearing Boys gave evidence that since his occupation of the House in 2018 he had commissioned works to alter the alignment of the driveway. The works to relocate the electrical conduits suggested by Mr Helisma in the Scott Schedule were to take place with the works for the “driveway relocation”. No evidence was provided by Boys or his expert of the details and cost of these works.
- On this basis there should be no requirement for Miller to pay for this item.
Item 74 - External wall lights near garage not on the same circuit as the entry path
- This requirement is outlined on the Electrical Drawings which are on pages 11 and 12 of the Architectural Drawings. This requires a two-way switch circuit.
- Miller accepts that this work was not undertaken but says that the Building Contract only allows for six two-way switches to be installed in the House and by the time work had commenced on this area six two-way switches had already been installed in the House.
- There was no communication between the parties regarding this issue and I believe that this is an issue that Miller should have managed and taken up with Boys before making the alteration. It may have required a claim for a variation or it may have meant not installing a two-way switch in another area of the House.
- Also, I believe that having a two-way switch for this circuit is important as there are safety and security issues relevant to this item.
- I find this is a departure from the plans and this item should be rectified by Miller at a cost of $345.
Items 75 and 76 – Driveway alignment not as per plans and transition to the council footpath from the driveway and entry path is too steep and unsafe
- The proposed driveway configuration is on page 2 of the Architectural Plans and the as constructed driveway with a comparison of the proposed driveway is outlined on page 50 of Mr Helisma’s report (Exhibit 4).
- Miller agrees that the driveway was not constructed in accordance with the Architectural Plans. He gave oral evidence that in his experience a driveway layout in plans is indicative only and a final plan for a driveway can only be planned and constructed once the building is erected and the levels and site conditions are assessed. He gave evidence that he invited Boys to meet on site to discuss the proposed layout and discuss other work with his concreter, Mr Wayne Upton of Upton Concreting.
- Both parties differ as to which particular date this meeting took place but both parties agree that a meeting did take place in or about the end of May/early June 2018.
- Mr Upton gave evidence that he is a concreter and was contracted by Miller to construct concrete works for the driveway, side path, AC pad and a rear stair landing. He recalls meeting once with Boys and Miller to discuss these works. He said that it was necessary to change the position of the step layout due to the right hand side boundary retaining wall foundations from the neighbour’s block wall. He says that he and Miller suggested amending the driveway layout as access into the right hand side of the garage was not practical if the driveway was constructed according to the proposed plan. He also says the driveway falls were determined by the council main running down the footpath. Mr Upton invited Boys to inspect the final boxed layout before the concrete pour. However, Mr Upton never met Boys again before the concrete pour.
- Miller gave evidence where he said the proposed layout would not work regarding access to the right hand side of the garage because the fall was too steep. He also suggested the configuration of the driveway was governed by the height of the council services which were buried in the footpath. He said that excavation of these services took place to the lowest possible level without interfering with the council services. He says that Boys was present with Mr Upton where the problems were discussed and Boys was given an indication of how the driveway should be constructed. Miller says that Boys verbally agreed with the proposal. Miller says that Boys was invited to return to view the boxing for the driveway but Boys did not return before the concrete was poured.
- Miller also expressed some surprise with Boys’s claim regarding the driveway because Boys did not raise any immediate concern with the configuration of the constructed driveway. He gave oral evidence that he was not aware of this concern until he was advised of the Scott Schedule. However, the driveway issue is mentioned in point 2(o) of the second notice that practical completion had not been reached dated 22 July 2018 (Annexure NM – 12 of the statement Miller dated 8 April 2019). Whatever the case it appears that Boys did not make any complaints to Miller regarding the configuration of the driveway for some weeks after the concrete pour in or about early June 2018.
- Boys says that at his meeting with Mr Upton and Miller he was informed that the driveway configuration should be altered to make room to swing the nose of a vehicle when reversing out of the garage. He says that the configuration does not make any sense as it is possible to reverse a vehicle straight of the garage. Further he does not accept that the driveway as constructed accords with what he agreed in his discussions with Miller and Mr Upton.
- Mr Helisma’s report says the departure from the driveway plans in the Architectural Plans has created only a marginal fall for water runoff along the garage. He goes on to say in his report that had the driveway been erected as per the Architectural Plans there would have been a fall of approximately of 150 mms along the garage (see pages 49 and 50 of Mr Helisma’s report (Exhibit 4)). Mr Helisma also makes a reference to the landscaping being unbalanced in regard to the driveway as constructed. These landscaping issues are not relevant to these proceedings.
- I have some reservation with Mr Helisma’s evidence and report as he does not appear to have undertaken any formal tests or surveys to reach his conclusions. In fact, Mr Helisma acknowledges that he not undertaken any tests or surveys in his comments in the Scott Schedule for item 76. Further I also question his expertise in coming to these conclusions as he is a building consultant and I am not aware of his expertise or experience in drainage and concreting. This evidence is in conflict with the evidence of Mr Upton who undertook the actual works and has experience in the preparation and construction of concrete driveways. I prefer Mr Upton’s evidence in respect of this issue.
- As mentioned in the previous item, Boys gave evidence that he has undertaken some works on the driveway since he has taken possession of the House. No evidence was advanced by Boys regarding the details of these works, why the works were required and the cost of these works. Further, no evidence was advanced by Boys that any water has been entering the garage.
- Boys has claimed the sum of $5,702 to rectify this item. This is a significant sum for the works to demolish the driveway up to the midway control joint, regrade the fall and install a new driveway up to the midway control joint.
- I find that Boys has not demonstrated why the driveway as constructed by Miller is not fit for purpose and I find that the driveway was constructed in accordance with the agreement reached on the day of the visit in or about early June 2018. This conclusion is supported by the independent evidence of Mr Upton.
- I accept Miller’s evidence that the plans regarding the driveway and the entry path in the Architectural Plans are indicative only and any final works must be subject to site conditions. Miller says that the height and position of the entry path was determined by the position of the footings from the neighbouring property which were encroaching onto Boys’s property.
- Notwithstanding the above findings I believe the principle in Bellgrove also applies to this item and Boys has not demonstrated the need for the expenditure of the $5,701 for item 75 and possibly a further $1,600 for item 76. In fact, Mr Helisma suggests that to rectify items 75 and 76 would require the demolition of the entire driveway. He does not give an estimate for this cost but I presume that the cost would be substantially higher than $7,301.
- Therefore, there is no allowance for the claims for items 75 and 76.
Item 77 – No compressible filler or joint sealant has been installed in the expansion joint between the driveway and the garage
- Both experts agree an expansion joint has been installed but Mr Helisma suggests that the expansion joint should have been constructed to prevent debris entering the joint. No evidence was adduced by either party on this issue. Mr Smith suggests that this is not a code requirement and it is not a critical issue. On balance it is good building practice to ensure there is a clear expansion joint between two concrete slabs and the relatively low cost of $184 to install the joint sealant should be paid by Miller.
Item 78 – Retaining wall constructed without notice or approval on right side boundary, face of which is 400mms off the face of the neighbour’s retaining wall
- The issues that are of concern to Boys is that the wall was constructed without his approval or direction and the wall is constructed 400 mms into his property thus causing access problems. He says that there is one metre between the House and the side boundary and the retaining wall reduces access along this side of the House to 600mms.
- Boys also says that had he been consulted before the construction of the retaining wall he could have arranged an alternate design for the retaining wall to reduce its impact and width by at least 200mms. Boys is claiming the sum of $5,814 to undertake works to rectify this issue. Such works would involve demolishing the retaining wall, saw cutting the rear concrete patio, excavation and reconstructing a new reinforced block wall.
- Boys has provided the Tribunal with an alternate engineering plan (Exhibit 1) which would provide further access space along this boundary.
- Boys is not concerned with the retaining wall on the left side of the property if you are looking at the House from the front boundary and the rear retaining wall. See paragraphs 240 to 270 of the statement of Boys dated 8 April 2019.
- Miller says that he met with Boys on 10 August 2017 to discuss the three retaining walls. He was concerned that the ground below the neighbour’s retaining wall on the right hand side boundary was unstable and the footings were exposed. He gave evidence that there was a potential for those footings to be undermined in the event of inclement weather. See paragraphs 4 to 8 of the statement of Miller dated 8 April 2019.
- Boys denies that the meeting took place in August 2017 and says that it was not until 16 September 2017 when he took photos of the site which showed the construction of the relevant retaining wall. See photo 17 on page 59 of the statement of Boys dated 8 April 2019. He also denies that he approved or gave any direction to Miller regarding the design or construction of the retaining wall before it was erected.
- Whatever versions of events is accepted, a period of between six and seven months elapsed between the alleged discussions/construction of the retaining wall and the time that Boys first complained about the retaining wall in or about the end of April 2018.
- Therefore, there are two divergent versions of events of what transpired leading up to and after the retaining wall was erected. I am of the view that some discussions must have taken place given the time of approximately six to seven months elapsing between the construction of the retaining wall and when Boys first complained of his issues with the retaining wall, that is access difficulties, cost implications, no approval or direction and compliance issues. In paragraph 9 of the Issues Register Boys raises issues with the retaining wall. He was alerted that there could be a cost for the retaining walls in an email from Miller to Boys dated 26 April 2018. See attachment A010 of the statement of Boys dated 8 April 2019. One of Boys’s main concerns is the fact that this is the first time that Boys was given notice by Miller that he could be liable for the cost of the retaining wall. Boys says in the Issues Register:
No notice or consultation was provided to me about this wall, and the only reason I let this go at the time was because you hadn’t invoiced me for it and I didn’t want to rock the boat early in the contract…
Since this claim is for work not requested, is not justified under the contract, and creates an adverse outcome costing me more to rectify I dispute that I’m liable for this work, and instead reserve my rights to recover the costs of rectification.
- Miller was cross examined about the alternate engineering plan (Exhibit 1) and he stated that in his opinion the plan was not feasible or practical as it required the excavation and underpinning of the next door neighbour’s block wall. He stated that this was a dangerous process and also required the consent of the neighbour. Boys did not call any expert evidence to prove that the alternate plan was feasible or practical. Therefore, I must give the report little weight in my consideration of the issues relating to item 78.
- I find it difficult to accept Boys’s version of events given that he did not raise any of the access or compliance issues with the retaining wall until he was aware that he may be liable for a variation to the Building Contract for the cost of the retaining wall. Boys must have visited the building site on many occasions during this six to seven month period and admits that he raised no concerns. On this basis I prefer the evidence of Miller that he did raise the issue of the retaining wall with Boys in the early stages of construction and obtained approval or acquiescence for the erection of the retaining wall as constructed.
- Miller says that the footings of the retaining were inspected by Codey Stonier of Inertia Engineering on 12 September 2017 before concrete was poured for the foundations of the retaining wall. See paragraph 4 of the statement of Miller dated 4 June 2019 and the Inspection Certificate from Inertia Engineering dated 30 May 2018 attachment NM – 01.
- I also accept Miller’s version of events that there was urgency in having the retaining wall constructed as the neighbour’s footings of their block fence were exposed and there was some danger of these footings collapsing if inclement weather was to occur.
- Boys says that the retaining wall has compliance issues and does not properly support the neighbour’s retaining wall. He says that it has been constructed for aesthetic reasons. However, this is his personal view as the homeowner and an engineer. He has not provided any independent expert evidence and no tests were undertaken to support this view. On this basis I cannot accept his view of the state of the retaining wall and any compliance issues.
- Another issue that is relevant in this item is the question of whether this variation request was properly made under the terms of the Building Contract. This will be addressed in a separate section of this decision.
- Therefore, there should be no allowance for any rectification costs for this item.
Item 79 and 80 – The tiled steps leading to the front entry and front entry concrete path – uneven risers
- Mr Helisma gave evidence that the concrete steps and pathway to the entrance has uneven risers which vary between 131mms and 183mms in height which creates an unsafe environment when using the steps and path. Mr Smith gave evidence that the steps and path complies with the relevant National Construction Code (Building Code of Australia) NCC (BCA) guidelines. Further Miller says that there were drainage issues in these areas and that is why the steps and path were constructed in this manner. On balance any safety consideration should take precedence for these items and I prefer the evidence of Mr Helisma that the difference in the heights of the risers is not safe for users.
- This is the front entry to the House and likely usage will be high and visitors to the House will use this entry. Therefore, these areas must be safe to use. The relevant performance requirements for stairs and ramps is contained in P2.5.1 of Part 2.5 of the NCC (BCA) 2016. This provision states:
P 2.5.1 Stairways and ramps
So that people can move safely to and within a building-
- (a)Walking surfaces must have safe gradients; and
- (b)Any stairway or ramp must –
- (i)Have suitable handrails where necessary to assist and provide stability to people using the stairway or ramp; and
- (ii)Have suitable landings to avoid undue fatigue of users; and
- (iii)Be suitable for safe passage in relation to the nature, volume and frequency of likely usage; and
- (iv)Have slip–resistant walking surfaces on ramps, and on stairway treads or near the edge of the nosing.
- Rectification works should take place. Mr Helisma has estimated that the cost of rectification is $1,705 (item 79) and $550 (item 80) being a total of $2,255. Miller says that Boys installed the tiles and Mr Helisma’s estimate includes costs for removal and installation of tiles. There is no mention of supply of tiles in his estimate and the question of the cost of the tiling was not explored in the hearing or in documentation. There should be a discount for Miller for the tiling works for the purposes of this decision. I place an arbitrary figure of $800 for these works. Therefore, I make an allowance of $1,455 for the rectification costs of items 79 and 80.
Items 81 to 85
- Keys, remote controllers and manufacturers’ warranties are issues related to Boys’s right or otherwise to terminate the Building Contract and take possession of the House and whether the Applicant reached practical completion of the House. These items should be delivered to Boys.
- After considering my analysis of the items in the Scott Schedule I must conclude that there were defects with the House that required rectification when Miller gave notice of practical completion to the Respondent on 5 July 2018. The question to be answered is whether any of those defects were major, structural or substantial defects?
- The defects that I have identified are:
- (a)Item 3 - sealing of wrap in ceiling cavity - $200;
- (b)Item 4 – Gaps in external cladding - $1,500;
- (c)Items 6,7, 8 and 9 - Flashing to windows and doors – $3,000;
- (d)Item 10 – Stacker doors - $5,159;
- (e)Items 12 – Back patio stairs - $1,200;
- (f)Item 16 – Rear deck timber packers - $450;
- (g)Item 17 – Defects to decking board - $300;
- (h)Item 20 – Termite barrier - $350;
- (i)Item 27 and 28 – Minor work to balustrade tops - $45;
- (j)Item 29 – Front door bowed - $1,086;
- (k)Items 30, 31 and 32 – Painting and issues with French doors - $500;
- (l)Item 37 – Tiles separated in various rooms and control joint ground floor slab and timber junction is inadequate - $1,500;
- (m)Items 38, 39, 40, 41, 42, 43 and 44 – Kitchen joinery, equipment and exhaust fan issues - $858, $353 and $100. Total: $1,311;
- (n)Item 48 – AC control pad - $460;
- (o)Items 50 and 52 – Skirting and cornices to internal stairs - $225 and $325. Total: $550;
- (p)Items 53, 54 and 55 – Top of stairs stringer is not flush with floor nosing, gaps and in stair risers and minor painting throughout House - $800;
- (q)Item 57 – Lift void - $209;
- (r)Item 62 – Shower mixer tap - $85;
- (s)Item 69 – Chips in blockwork render - $85;
- (t)Items 70 and 71 – One light switch in upstairs and downstairs WC - $94;
- (u)Item 74 – Wall lights two-way switch - $345;
- (v)Item 77 – Install sealant in expansion joint in driveway - $184;
- (w)Items 79 and 80 – steps to entry level and front entry path risers at different heights - $1,455.
- It should be noted that Mr Helisma’s estimates for the cost of rectifying the defects includes an additional margin of 45%. This is for mark ups for rectification work (20%), builder’s margin (20%) and preliminaries (5%). I will discuss this margin later in the decision.
- Practical completion is defined in Schedule 2 of the Building Contract.
- Clauses 25.2 and 25.3 of the Building Contract state:
25.2 When the builder believes the works have been completed the builder must give the owner:
- (a)a defects document listing minor defects and minor omissions:
- (i)That are agreed to exist and the time for when those items will be completed or rectified;
- (ii)That the owner claims to exist but the builder does not agree with; and
- (iii)That is signed by the builder; and
- (b)a notice of practical completion stating the builder’s opinion of the date of practical completion; and
- (c)the final claim.
25.3 Subject to clause 25.4, the owner must, within 5 working days of receiving the final claim, pay the amount of the final claim to the builder.
25.4 If the owner believes that practical completion has not been reached the owner must, within 5 working days of receiving the notice of practical completion, give the builder a written notice stating:
- (a)the owner’s requirements for the works to reach practical completion; and
- (b)the provisions of this contract that relate to each requirement.
25.5 The builder must, on receiving the owner’s notice, complete those requirements that, in the builder’s opinion, are necessary to reach practical completion.
- On 27 June 2018 Boys sent a notice to remedy substantial breach to Miller. On 9 July 2018 Becker Watt Lawyers responded on behalf of Miller to this notice. This letter comments on the items raised in the notice and concludes that none of the items would be considered a substantial breach of the Building Contract. This letter is A022 of the statement of Boys dated 8 April 2019.
- On 5 July 2018 Miller sent correspondence to Boys advising that practical completion had been reached and advising of details of the claim. The correspondence purported to attach a notice of practical completion. See annexure NM-09 to the statement of Miller dated 8 April 2019. This email also attached details of a progress payment certificate and a project summary and reconciliation. However, the notice of practical completion was inadvertently omitted from the correspondence dated 5 July 2018 and not provided to Boys until 19 July 2018. The notice makes reference to three defects. They are:
- (a)replace or strengthen split joist on the rear deck;
- (b)add stiffener on the front deck;
- (c)fit rangehood in the kitchen.
- On 12 July 2018 Boys gave a notice to Miller that practical completion had not been reached. The notice dated 12 July 2018 is attachment NM-10 to the statement of Miller dated 8 April 2019. This notice alleges that Miller has not included a defects document as required by cl 25.2 of the Building Contract and lists items (a) to (k) which Boys alleges are items that require rectification in accordance with cl 1 of the Building Contract.
- Miller arranged for K-SPEC, building inspectors, to inspect the House. K-SPEC provided a certificate dated 13 July 2018 that the House had reached practical completion. This certificate is attachment NM-11 to the statement of Miller dated 8 April 2019 and makes reference to other items requiring rectification. Miller did not provide a copy of this certificate to Boys before Boys gave notice of termination of the Building Contract on 11 August 2018.
- On 17 July 2018 Becker Watt Lawyers responded to items (a) to (k) in Boys’s notice. In summary this letter rejects that practical completion has not been reached, items (a) and (b) of the notice are being attended to by Miller and the other items are not defects or substantial defects.
- On 22 July 2018 Boys gave Miller another notice that practical completion has not been reached. See Attachment NM-12 of the statement of Miller dated 8 April 2019. This notice includes new items as well as items listed in the two previous notices that practical completion has not been reached.
- On 26 July 2018 Miller responded to this notice by way of an email. This email is attachment A028 to the statement of Boys dated 8 April 2019. The email makes reference to the certificate of K-SPEC and confirms that it is the position of Miller that practical completion has been reached. The email does not specifically comment on items (l) to (p) contained in Boys’s notice.
- On 29 July 2018 Boys served another notice that practical completion had not been reached. See attachment A029 of the statement of Boys dated 8 April 2019. This notice includes a list of items (a) to (u). Some of the items in this notice are items which were included in the two previous notices that practical completion was not reached.
- The above notice dated 29 July 2018 was sent to Miller together with the notice to remedy substantial breach. Becker Watt Lawyers responded to these notices by way of an email dated 31 July 2018. The letter does not specifically refer to any individual defect but relies on previous correspondence and states that the issues raised in the notice to remedy substantial breach are not defects, not supported by any direct evidence or factually and/or legally incorrect. See attachment A031 to the statement of Boys dated 8 April 2019.
- Boys gave notice of termination of the Building Contract on 11 August 2018 and entered into possession of the House.
- There is evidence that Miller was working on some of the issues regarding the House right up to 11 August 2018. They include the back patio stairs, strengthening the joist supporting the front balcony, replacing a rear deck joist and other general work. There is also evidence that Miller had arranged for tradesmen to attend the House on the morning of 13 August 2018 and they were prevented from entering the House.
- Miller probably had reached practical completion from the perspective of using the House as a residence on 5 July 2018 and this is confirmed by K-SPEC on 13 July 2018. However, I believe that Miller has not fully complied with the processes set out in cl 25 of the Building Contract. I make this finding because:
- (a)No purported “defects document” as set out in cl 25.2 of the Building Contract was included in the notice of practical completion that was sent to the Boys on 5 July 2018. It was inadvertently omitted from the notice and sent to Boys on 19 July 2018;
- (b)The purported defects document is a very short document and lists only three defects which require attention and gives an estimate that these items will be rectified “by the end of July 2018”;
- (c)The notice does not contain details of defects which Boys claims exist but Miller does not agree with as is required under cl 25.2 (a)(ii) of the Building Contract. This is the case despite the Issues Register sent by Boys to Miller at the beginning of May 2018. See attachment A017 to the statement of Boys dated 8 April 2019. This Issues Register contains some 30 items which Boys says require attention;
- (d)The lawyers for Miller responded to each item raised in the first notice dated 12 July 2018. It may be argued that the requirements of cl 25 of the Building Contract are satisfied by considering all the documents from each party as a whole. However, Boys sent two further notices on 22 and 29 July 2018. Boys was responding to the certificate of practical completion dated 5 July 2018 sent on 19 July 2018. There were no specific references to the further items mentioned in these notices when Miller and Miller’s lawyers wrote to Boys on 26 July 2018 and 31 July 2018 respectively;
- (e)Miller must have been aware of all the issues of concern to Boys because QBCC were involved at or about this point in time; and
- (f)Miller did not obtain a form 21 – Final Inspection Certificate from the Building Code Advisory Group (Mr Phil Parkes) until 20 August 2018. See attachment A037 to the statement of Boys dated 8 April 2019. This occurred after Boys had removed the back patio stairs.
- Therefore, what is the effect of this noncompliance? The Respondent has referred to various authorities on this issue.
- The issue of practical completion was canvassed in Thompson Residential Pty Ltd v Hart & Anor  QDC 132. In Thompson the builder claimed payment for the enclosed stage of the house. There had been issues with the selection of windows and the builder placed temporary boarding on the windows to claim for the stage. McGill SC DCJ found that the enclosed stage had not been reached. At page 15 McGill SC DCJ said:
 In my opinion the contract means what it says, what matters is whether the enclosed stage as defined has been reached, and the plaintiff had not satisfied this element of the definition of enclosure stage: the reference to windows and doors means the windows and doors required to be installed under the contract, and the plaintiff had not installed those, even if only temporarily. In my opinion there is nothing in the wording of the contract to justify giving the document the interpretation contended for by the plaintiff. Accepting that the court should strive to give a practical commercial interpretation to a document of this nature, it seems to me that the interpretation for which the plaintiff contends really amounts to changing the terms of the contract. In circumstances where the term “enclosed stage” is defined, it is not a question of whether the building is enclosed in a practical sense by a process which does not meet the definition, or whether that process would in practice serve the function or requirement of enabling the fitting of gyprock internal wall sheeting to proceed. The function of the progress payment schedule is to provide for certain amounts to be payable when certain stages in the building work are achieved, and the definition of the enclosed stage is expressed in terms such that the supply and at least temporary installation of the windows and doors is to be achieved as part of the enclosed stage. The windows and doors for this building had not been supplied, and therefore that element of the work required for the enclosed stage had not been satisfied. The plaintiff’s argument to the contrary is rejected.
- As mentioned, I believe that the House could be used as a residence in July 2018. There were no issues with the House, such as temporary boarding on the windows, that were identified in Thompson. Further K-SPEC advised Miller on 13 July 2018 that the House had reached practical completion (subject to certain minor defects being rectified) and the Building Code Advisory Group provided certification for the House dated August 2018 once the back patio stairs were removed.
- It is also significant that Boys took possession of the House on 11 August 2018 and started moving personal items into the House on 12 August 2018.
- Boys has made submissions and directed the Tribunal to caselaw on this issue. I will comment on this caselaw:
- (a)In Miller & Anor v Lida Build Pty Ltd  QCA 332 at paragraph 41 Morrison JA comments on cl 25.3 of a building contract which has similar wording to cl 25.3 of the Building Contract. Morrison JA says that the clear words of cl 25.3 require the owner to pay the final claim within the stipulated period. The exception to this obligation is if the contractor does not give the owner notice under cl 25.4 or the owner disputes that practical completion has been reached under clause 25.5.
- (b)In the other case law referred to by Boys the courts have made similar rulings.
- Therefore, in these proceedings there was no obligation on Boys to pay the final claim until Miller fully complied with the processes outlined in cl 25 of the Building Contract. Miller has not fully complied with these provisions.
- The rights and obligations contained in the processes outlined in cl 25 relate to the payment of the final claim and provide protection for the owner to ensure that all defects are identified, categorised, if necessary disputed and there is some timetable for rectification of the minor defects.
- Compliance with the giving of a defects document relates to the obligation to pay the final claim. It is my view that a failure to comply with these provisions by Miller gives a right to Boys to refuse to pay the final claim but it is not a substantial breach of the Building Contract. Therefore, Boys was entitled to refuse to pay the final claim up to giving notice of termination of the Building Contract on 11 August 2018.
- Boys has submitted that the conduct of Miller by claiming practical completion, claiming the final payment, not satisfying the conditions precedent for claiming the final payment and not rectifying defects and omissions amounts to a repudiation of the Building Contract.
- Boys has submitted that the precedent outlined in Prosser v Kimama Holdings Pty Ltd T/A Visual Diversity Homes  QCAT 77 applies to these proceedings. The facts in Prosser relate to a home building contract where part of the works was the construction of a boulder wall. In Prosser, Member Howe found that development approval had not been obtained for the boulder wall before its construction and certification by the builder. Member Howe found this was a breach of an essential term of the contract. Development approval was obtained some months (13 October 2014) after the claim for practical completion by the builder (19 February 2014). Further the owner in Prosser did not obtain possession of the dwelling until 18 October 2014. In Prosser, Member Howe found that the conduct of the builder regarding the claim and denying the owner possession amounted to a repudiation of the building contract by the builder and the owner was entitled to damages.
- The facts and circumstances in these proceedings are very different to the facts and circumstances in Prosser. In these proceedings Boys has taken possession of the House and all approvals/certificates have been obtained for the House. The relationship between the parties was very strained and unfriendly involving differing opinions and contract disputation. However, I do not believe it was extraordinary. In these proceedings there is no evidence of any illegality or deceit on the part of Miller.
- It is my view that Boys has failed to identify any facts or circumstances relating to the conduct of Miller that would be a basis for a claim that Miller has repudiated the Building Contract. Therefore, this claim must fail.
- The defect items listed (a) to (w) above are not major or structural defects or substantial breaches of the Building Contract.
- The defect items listed (a) to (w) above are not a major or structural defect or a substantial breach of the Building Contract if they are considered collectively.
- The defects could have been rectified while Boys was residing in the House. The rectification of these defects would not unreasonably interfere with the occupation of the House by Boys.
- Pursuant to cl 27.1 of the Building Contract these defects could have been rectified by Miller during the defects liability period of 12 months from the date of practical completion.
- Boys has made a claim that the costs of rectification should be increased by 45% for preliminaries, builder’s margin and rectification costs of the defects. Miller has been prevented from rectifying any defects by Boys taking possession of the House. Miller gave evidence that many of the defects could have been rectified by him at little or no cost during the 12 month defect liability period. Therefore this claim must fail.
- Miller gave notice of practical completion and made a claim for the final payment (together with a claim for variations) to Boys on 5 July 2018.
- Boys gave notices dated 12 July, 22 July and 29 July 2018 that the House had not reached practical completion.
- Boys gave a notice to remedy substantial breach to Miller dated 29 July 2018. The notice included a reference to external back steps which were removed at Boys’s request not having sufficient head height in regard to the rear deck bearer.
- At the time of giving the notice to remedy substantial breach none of the actual issues raised by Boys (i.e. issues listed (a) to (w) above, including the external back stairs) were major, structural or substantial defects.
- Miller obtained a certificate from K-SPEC, building inspectors, on 13 July 2018 that the House had reached practical completion and listing some defects to be rectified. This certificate was not provided to Boys before 11 August 2018.
- Despite Boys offering to provide Miller with a copy of Mr Helisma’s report which was commissioned by Boys detailing his issues with the House, no report was provided to Miller before Boys gave notice of termination of the Building Contract on 11 August 2018.
- On 11 August 2018 Boys entered into possession of the House and Boys gave notice of termination of the Building Contract pursuant to cl. 28 of the Building Contract. Boys stated in the notice that Miller had not rectified or commenced to rectify “any of the substantial breaches” stated in the notice to remedy substantial breach.
- By a letter dated 14 August 2018 Becker Watt Lawyers sent an email to Boys advising Boys that he was not entitled to give notice of termination of the Building Contract or take possession of the House and accepting Boys’s repudiation of the Building Contract.
- Miller referred the dispute to the QBCC on 15 August 2018.
- On 17 August 2018 Boys wrote to Miller advising that the head height for the external back stairs which Boys had requested was non-compliant. The issue was discussed with Mr Phil Parkes of the Building Code Approval Group, and he advised that the issue could have been easily rectified by extending the steps out from the deck by a short distance – “a couple of pieces of kwila ( to match the stairs) bolted as a pole plate to the blockwork”. Miller took steps to arrange this timber. However, on 20 August 2018 Mr Parkes advised Miller by email that Boys had removed the steps and all relevant certificates could issue. This included the form 21 – Final Certificate.
- Boys took possession of the House in breach of cl 26.1 of the Building Contract which states:
26.1 The owner is not entitled to:
- (a)take control of, possession of or use the works or any part of the works; or
- (b)receive the keys for the works,
until the builder has been paid the contract price, adjusted by any additions or deductions made under the contract.
- Boys was not entitled to give notice of termination of the Building Contract and take possession of the House on 11 August 2018. Therefore, pursuant to cl 26.3 of the Building Contract Miller was entitled to accept the repudiation of the Building Contract. Clause 26.3 of the Building Contract states:
26.3 If the owner breaches 26.1 then unless such control, possession or use is with the written consent of the builder under cl 26.2 or after the owner has lawfully ended this contract under clauses 28 or 29, the owner commits a substantial breach of this contract entitling the builder to elect to either:
- (a)Treat the owner’s action as a repudiation of this contract and to accept that repudiation; …
- Miller has not complied with the provisions of cl 25 of the Building Contract with regard to the provision of a defects document to Boys. The breach of the provisions of cl 25 of the Building Contract is not a substantial breach of the Building Contract by Miller. However, Boys was not obliged to pay the Applicant’s claim until the provisions of cl 25 were fully satisfied. This did not occur before 11 August 2018.
- Once Miller accepted Boys’s repudiation of the Building Contract all the issues, rights and obligations under the Building Contract merged. Therefore, Miller’s claim for the final payment arises from 11 August 2018.
Respondent’s Counterclaim and Claim for Solatium
- It is my finding that Boys was not entitled to give Miller a notice of termination of the Building Contract and was not entitled to take possession of the House. Therefore, any counterclaim that the Respondent may have under the Building Contract or under the commom law must fail.
- The Respondent has submitted that damages may also be awarded to an owner where that owner has wrongfully terminated a building contract. The Respondent has referred the Tribunal to the decision of Avilake Pty Ltd v Tucker and Anor  QCATA 211 where the Appeals Tribunal at paragraph 20 stated that “where there is a wrongful repudiation of a building contract the measure of damages has been held to be the difference between the contract price less any amounts for progress claims received and less the cost to complete the works and rectify any defective works”. In these proceedings Boys is entitled to the costs to rectify the items (a) to (w) above. However, no evidence has been provided to the Tribunal in these proceedings that there are any other costs that must be expended by Boys over and above the rectification of these items. Therefore, any further award of damages or costs under this counterclaim must fail.
- Boys also claims solatium for himself and his partner for loss of enjoyment, inconvenience and distress suffered in excess of what is normally incurred by an owner in a building dispute. I make the following comments regarding this claim:
- (a)Boys gave evidence that he has suffered distress during this process. However, no expert medical evidence was provided to the Tribunal to support or corroborate this claim; and
- (b)Boys claims that he will suffer inconvenience whilst rectification works are undertaken on the defects. There is no evidence that this will be the case except for the view of Mr Helisma that the rectification work would be disruptive to the occupants. Mr Helisma’s view should be treated with some reservation as I have found that there should be no order to rectify many of the items, such as the deck, front patio and sarking in his report. Further it is my view that the rectification works will not unreasonably affect the occupation of the House. The rectification to the flashing and stacker doors can be carried out by removal of some outside cladding and then undertaking the rectification works. The rectification works to the front entry are outside works and access can be obtained from other areas of the House. The only items that may cause some minor disruption are the repairs to the kitchen which could be minimised by co-ordinating the timing of the rectification works with the relevant contractor; and
- (c)Boys claims inconvenience for not having access to the backyard via the back patio stairs. This is not a significant issue and Miller was taking action to remedy this problem when he was advised of the problem by Mr Phillip Parkes, the principal certifier, on 17 August 2018. On 20 August 2018 Miller was advised by the principal certifier that the steps had been removed by Boys and a form 21 certification could now be issued for the House. Further this defect can be easily and quickly rectified for the relatively small cost of $1,200; and
- (d)Boys has also raised the issue of the removal of the microwave by Miller after Boys took possession of the House. He says that this issue has caused distress. I note that this issue was reported to the police who elected to take no action in respect of this complaint. I am of the view this is not an issue that should reasonably have caused any serious distress or disappointment when viewed in the context of the overall contractual dispute. The microwave was returned to Boys on 20 August 2018; and
- (e)Boys took possession of the House on 11 August 2018. On or about 11 August 2018 Boys started moving personal items into the House. Boys then began residing in the House; and
- (f)Boys has also claimed solatium for his partner, Ms Fernandez. Apart from the issues raised by Boys, no other evidence was provided to the Tribunal to support this claim; and
- (g)Boys has claimed for loss of enjoyment of the House and inconvenience. No evidence was provided to the Tribunal that supports this claim or demonstrates that there are any special circumstances of loss of enjoyment or inconvenience over and above any late completion damages that can be claimed under item 15 of Schedule 1 and cl 32 of the Building Contract; and
- (h)The Respondent took possession of the House and gave notice of termination in contravention of the conditions of the Building Contract.
- The Respondent has cited the authority of Williams v Stone Homes P/L & Anor  QDC 64. In Williams, Dorney QC DCJ at paragraph 21 stated that in this particular matter although no direct evidence was presented to the court “it is, as well, obvious from the material which became evidence in the case that there was distress on the part of both plaintiffs about what occurred.” In Williams, the plaintiffs purchased a kit home which was erected in a high wind location. The kit home was not rated for such high winds and there were problems in obtaining certification for the kit home. The rectification work required the plaintiffs to remove and store their personal items/furniture and move out of their home for four weeks. The court found that it would be inconceivable that some disappointment or distress would not flow from such “physical inconvenience”.
- The facts and circumstance in Williams are very different to the facts and circumstances in the current proceedings. Here Boys and his partner took possession of the Home, have used the Home since 11 August 2018 and final certification of the Home was obtained on 20 August 2018. Further, it is very unlikely that Boys and his partner will have to move out of the Home whilst rectification works are carried out on the Home.
- Taking into consideration the above issues I am of the view that the claims for solatium must fail.
Late Completion Damages
- Late completion damages can be claimed pursuant to cl 32 of the Building Contract. The quantum of late completion damages is $50 per day as outlined in item 15 of Schedule 1 of the Building Contract. “Day” is calendar day as set out in cl 38.1 of the Building Contract.
- In item 13 of schedule 1 of the Building Contract the works must reach practical completion within 212 days after commencement, subject to clause 17. Therefore, the late completion damages are payable for delays up to practical completion.
- Boys has claimed $8,550 for late completion damages pursuant to cl 32 of the Building Contract. This claim is made on the basis that Boys gave notice of termination of the Building Contract, Miller had not achieved practical completion on 5 July 2018 and Boys took possession on 11 August 2018. That is, late completion damages are payable by Miller up to 11 August 2018.
- Miller has submitted that practical completion was achieved on 5 July 2018 and late completion damages should only be paid up to 5 July 2018 and late completion damages should be reduced by 37 days which equates to $1,850.
- I have found that Miller had not achieved practical completion on 5 July 2018 because Miller had not complied with cl 25 of the Building Contract with regard to the provision of a defects document. Therefore, Miller was not entitled to claim for the payment for practical completion until Miller accepted Boys’s repudiation of the Building Contract and Boys took possession of the House on 11 August 2018.
- I find that late completion damages should be paid up to 11 August 2018 and Miller should pay Boys the sum of $8,550 for late completion damages. This amount should be deducted from any award that is ordered to be paid by Boys to Miller in these proceedings.
- Clause 20 of the Building Contract outlines the process for documenting, claiming and approval of variations.
- Part 6 of Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) contains the provisions relating to variations in domestic building contracts. It states:
40 Variations must be in writing
- (1)This section applies if there is to be a variation of a regulated contract.
- (2)The building contractor must give the building owner a copy of the variation in writing before the first of the following happens—
- (a)5 business days elapse from the day the building contractor and the building owner agree to the variation;
- (b)any domestic building work the subject of the variation starts.
Maximum penalty—20 penalty units.
- (3)The building contractor may give the building owner the variation under subsection (2)—
- (a)personally; or
- (b)by sending it by post, facsimile or email; or
- (c)in accordance with any provision in the contract providing for service of notices on the building owner by the building contractor.
- (4)In a proceeding for a contravention of subsection (2), it is a defence for the building contractor to prove that—
- (a)the variation is for domestic building work that is required to be carried out urgently; and
- (b)it is not reasonably practicable, in the particular circumstances, to produce a copy of the variation in writing before carrying out the work.
- (5)The building contractor must not start to carry out any domestic building work the subject of the variation before the building owner agrees to the variation in writing.
Maximum penalty—20 penalty units.
41 General contents of document evidencing a variation
- (1)The building contractor under a regulated contract must ensure a document evidencing a variation of the contract complies with the formal requirements for a variation.
Maximum penalty—20 penalty units.
- (2)The document evidencing the variation complies with the formal requirements if it—
- (a)is readily legible; and
- (b)describes the variation; and
- (c)states the date of the request for the variation; and
- (d)if the variation will result in a delay affecting the subject work—states the building contractor’s reasonable estimate for the period of delay; and
- (e)states the change to the contract price because of the variation, or the method for calculating the change to the contract price because of the variation; and
- (f)if the variation results in an increase in the contract price—states when the increase is to be paid; and
- (g)if the variation results in a decrease in the contract price—states when the decrease is to be accounted for.
- (3)Any increase in the contract price as a result of the variation can not be required to be paid before work the subject of the variation is started.
44 Effect of failure by building contractor to comply with requirement
Unless the contrary intention appears in this Act, a failure by a building contractor to comply with a requirement under this Act in relation to a domestic building contract does not make the contract illegal, void or unenforceable.
- Boys’s position is that Miller has not complied with the provisions of the Building Contract and ss 40, 41, 42 and 44 of Part 6 of Schedule 1B of the QBCC Act with respect to documenting variations and obtaining the written approval of Boys to each variation. Boys submits that Miller now cannot claim for these variations because Miller has not complied with these provisions. There is no doubt that Miller’s processes for documenting variations were far from perfect, but this does not of itself preclude Miller from making these claims because of this noncompliance. Section 44 of Part 6 of Schedule 1B of the QBCC Act states that a failure by a building contractor to comply with a requirement under the legislation does not make the contract unenforceable.
- I do not need to decide whether Miller may be the subject of any possible compliance action which is something for other statutory authorities to consider. I must consider whether the claim is a variation to the Building Contract, whether there was agreement/consensus between the parties, the variation work was completed, and the cost of the variation work was reasonable.
- Boys has conceded variations 16, 24, 29, 33, 36, 39, 40, 45 and 46, totalling $1,907. Boys has conceded $2,300 of variation 49 ($6,900 relating to three retaining walls). Boys has submitted that these concessions are made notwithstanding there is no contractual obligation to pay these variations. See page 10 of Boys’s submissions filed on 8 October 2019.
- Therefore, I must now consider the other claims:
Variation 20 - $430
- This is a claim for removal of fill associated with works for the driveway, paths and steps. This claim of $430 is for $380 plus GST plus a builder’s margin of 15%. The claim is part of work undertaken by Upton’s concreting in June 2018. The invoice is annexure IH-005 to Miller’s submissions filed 15 November 2019. Boys is not questioning the quantum of the claim but says the claim relates to removal of fill for other purposes or should be part of a fixed cost item under the terms of the Building Contract.
- Miller has provided a copy of an invoice from Upton’s Concreting. In this invoice there is a charge for removal of fill relating to the works for the driveway and other concreting.
- In paragraphs 152 to 155 of Boys’s statement dated 8 April 2019 Boys outlines his objections to the payment of this claim. However, he has not provided any other evidence to support his contention.
- On balance I accept Miller’s claim that the removal of the fill related to the driveway works and the provisional sum items referred to in Schedule 3 of the Building Contract.
- I have previously found that Miller is not liable for any defects relating to the works connected with the driveway and some associated concreting works.
- Therefore, this variation should be paid by Boys.
Variations 30 to 47 (excluding agreed items 33, 36, 40, 45 and 46) - Electrical work.
- Boys concedes that on 23 January 2018 he had a walk through of the House with his mother, Miller and the electrician, Mr Adrey. Miller was not present during the whole of the walk through that day. According to Boys the walk through lasted some two to two and a half hours. During this time Mr Adrey discussed the positioning of lights and circuits. Mr Adrey provided a statement dated 31 May 2019 and gave evidence at the hearing. Mr Adrey says that he made suggestions regarding the lights and electrical work, acknowledges no pricing was mentioned but also says that he never mentioned that this work was to be undertaken at no cost to Boys. Mr Adrey says that some of the work was required for practical reasons e.g. power requirements for the Miele cooktop. Mr Adrey says that some of this work was undertaken at no cost.
- Boys’s main concern is whether these costs were part of the prime cost items and the extra costs were not specifically approved by him. There is no doubt that there was a lack of communication between the parties but it seems to me that this work was undertaken at a reasonable cost at the direction and/or knowledge of Boys. There is a great deal of email communication between the parties. See annexure IH-007 of the submissions of Miller filed 15 November 2019. Indeed, some of this communication is directly between Boys and Mr Adrey.
- Boys has raised the issue of the NBN connection in variation 44 with a cost of $442.75. Mr Adrey gave evidence that this is “standard requirement for some time…This includes conduit provision to the lead in position, power, phone data positioning into the house.” Boys says in paragraphs 223 to 225 of his statement dated 8 April 2019 that the NBN connection is free. Boys has attached a single two sided document regarding the connection of the NBN. See attachment A045 of Boys’s statement. This is a marketing document which is very general in nature. Page 2 of this document refers to a port and says “From there, the service on that port is the responsibility of your phone or internet service provider.” No expert evidence was presented to the Tribunal to provide clarity of what work is free and what work is required on top of the free work provided by NBN and how this work includes or excludes any work undertaken by Mr Adrey.
- On balance, I prefer the evidence of Mr Adrey and Miller on these items and all these variations, including variation 44, should be paid by Boys.
Variation 47 – Supply and install high performance exhaust duct to the garage.
- This item was the subject of examination regarding the defects in the Scott Schedule. Previously I found that the installation of the exhaust fan was not a defect and it was installed at the direction of Boys. Boys changed his mind and requested that a power point should be installed in the garage instead of the exhaust fan but the exhaust fan had already been installed. On this basis this variation should be paid by Boys.
Variation 49 – Block wall retaining walls to front left hand side and rear right side of property.
- This issue was the subject of examination regarding the defects in the Scott Schedule. Previously I found that there was some discussion about the erection of these walls in or about August 2017. There was no complaint about these works until Miller indicated that a variation claim would be made for these works.
- Miller says in paragraphs 16 to 20 of his statement dated 4 June 2019 that the only retaining that was included in the contract price was for the erection of the walls shown in the Architectural Plans to retain the House structure itself. He says that the other retaining walls were outlined in Schedule 4 - Excluded Items in the Building Contract. The items outlined in Schedule 4 include “fencing and retaining” and “support to neighbour block wall – engineering required”. On balance I find that the retaining walls were excluded items under the Building Contract and were variations.
- I find that the Respondent must have been involved in discussions when these works were proposed but the parties probably did not clarify the question of cost or whether these works were excluded or included in the contract price. There would have been some cost advantage in having all the retaining walls for the House and the retaining walls erected at the same time.
- Also, on balance I find that there was urgency with the erection of the right hand side retaining wall because the neighbour’s block wall footings were exposed and would have been in danger of collapse if there was any inclement weather. If this was to occur the cost to rectify any collapse would have been very significant. Therefore, there was justification for Miller to proceed with this work in accordance with cl 20.5 of the Building Contract.
- I also note that Boys did not raise any issue with these walls for some months and when he was informed his main focus appeared to be the cost implications.
- Boys has not raised any issue with the quantum of this claim of $6,900. He raised the issue of access to the right hand side of the property and says that he should have been afforded the opportunity to arrange a different design to the retaining wall so it could be erected closer to the boundary a further 200mms access room from the side boundary. These issues were canvassed in my comments when examining the defects in the Scott Schedule.
- On balance, I prefer the evidence of Miller on these items and Boys should pay for this variation.
- I also note that Miller has claimed quantum meruit for the value of work undertaken by him on the House. See paragraph 221 of the statement of Miller dated 4 June 2019. It is my view that even if Miller was unsuccessful in the above claims for variations under the Building Contract, he would be successful in a claim for quantum meruit for these items.
- After examining the facts and circumstances of this dispute I find that Boys should pay Miller for the final claim. The spreadsheet and calculation of this claim was sent to Boys on 5 July 2018. See A023 to the statement of Boys dated 8 April 2019. This calculation has not been disputed by Boys except that certain items for variations should not be included in the claim and should be deducted from the claim. On this basis I find the final claim for practical completion is $53,678.25.
- The cost of rectifying the defects is $20,868 which should be deducted from the final claim.
- The Late Completion damages are $8,550 which should also be deducted from the final claim.
- The final claim is $24,260.25.
- Clause 8 of Schedule 1 of the Building Contract states that the default interest is 18% per annum. The final claim became payable from 11 August 2018. Therefore, interest calculated at the rate of 18% per annum should be paid on the sum of $26,863.50 until the full payment is made.
- The orders of this Tribunal are:
- The Respondent pay to the Applicant the sum of $24,260.25 within 30 days of the date of this order.
- The Respondent pay default interest of 18% per annum to the Applicant on any monies owing to the Applicant in respect of Order (1) hereof calculated from 11 August 2018.
- The Applicant should deliver all keys, remote control devices, all certificates and warranty/operational documents relating to the House to the Respondent within 30 days of the date of this order.
- The parties are at liberty to make submissions to the Tribunal in respect of any application for the award of costs pursuant to s 77 of the Queensland Building and Construction Act 1991 (Qld) or clause 34 of the Building Contract within 21 days of the date of this order. Such submissions should comment on the orders/directions of Senior Member Brown made on 8 August 2019 and Member Oliver made on 11 September 2019.
- Published Case Name:
Imperial Homes (Qld) Pty Ltd v Daniel Jay Boys
- Shortened Case Name:
Imperial Homes (Qld) Pty Ltd v Boys
 QCAT 299
05 Aug 2020