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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Stevanovic & Anor v Kirby  QCAT 428
Chad John Kirby
12 November 2020
9 October 2020
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where builder performed unlicensed building work – defective work – whether homeowner was owner/builder – whether compromise with insurer – effect of unlicensed building work on assessment of damages.
Electronic Transactions (Queensland) Act 2001 (Qld), s 14
Queensland Building and Construction Commission Act 1991 (Qld), s 42, s 77(2), s 77(3)(h), Schedule 1B, Schedule 2
Queensland Building and Construction Commission Regulation 2003 (Qld), repealed, Schedule 1AA
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(3)(c)
Bellgrove v Eldridge (1954) 90 CLR 613
Bocquee v Baltus  QCAT 280
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Commonwealth Development Bank of Australia Ltd v Kok, in the matter of Kok  FCA 90
Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  QCA 75
Grant v John Grant and Sons Pty Limited (1954) 91 CLR 112
Gunn v Steain  NSWSC 1076
Mertens v Home Freeholds Co.  2 KB 526
Robinson v Harman (1848) 1 Ex 850
Williams v Stone Homes P/L & Anor  QDC 64
Yongwoo Park v Betaland Pty Ltd  QCAT 228
REASONS FOR DECISION
- The applicants, Mr and Mrs Stevanovic, are owners of an investment property in Queensland. In 2018 they undertook a renovation of the property. The Stevanovics undertook some work themselves but otherwise engaged contractors to perform work.
- The applicants located the respondent on an internet referral site, known as “One Flare”. The respondent, Mr Kirby, answered the applicants’ enquiry and attended at the property in order to prepare a quote for the work. The following quotes were given:
- (a)Quote on letterhead bearing the name Chad John Kirby dated 8 January 2017 (sic: 2018):
- Remove existing tiles from shower walls and laundry splash back.
- Remove existing VJ sheet from half height of wall and plaster/prepare wall for tiling of the toilet walls, bathroom walls and splashback.
- Plaster kitchen splashback to prepare for tiling
- Prepare laundry splashback for tiling
- Prepare and level laundry floor, bathroom floor and toilet floor for tiling with suitable bedding material (existing tiles to be removed by client prior to works)
- Supply tiling glue and install tiles (tiles supplied by client).
- Supply tiling glue and install tiles (supplied by client) to 3 shower walls, bathroom splashback and full height of walls, full height of toilet walls, laundry basin splashback, kitchen splashback, toilet, bathroom floor, laundry floor.
- Supply and install grout to newly tiled areas.
- (b)Quote by Chad John Kirby dated 22 January 2017 (sic: 2018):
- Supply and install supporting framework for new bath
- Install new bath (supplied by client)
- (c)Quote by Chad John Kirby dated 24 January 2017 (sic: 2018)
- Prepare corner wall in kitchen for tiling
- Supply and install tiles on kitchen corner wall (supplied by client)
- The quoted work was performed at the property and completed on 30 January 2018. Work was performed by Mr Stephen Hale, a subcontractor to Mr Kirby.
- On 31 January 2018 Mrs Stevanovic flew from her home in Sydney to Queensland, to inspect the work. She was dissatisfied with the quality of workmanship and contacted Mr Kirby to arrange for him to inspect the work. Mr Kirby was out of Brisbane and unable to do so. He suggested Mr Hale attend the property but that was unacceptable to Mrs Stevanovic.
- The evidence is that Mr Kirby did not make arrangements to attend the property or make any proposal to undertake rectification work.
- Mr Kirby referred the Stevanovics to his insurer Allianz. Subsequently, the Stevanovics provided Allianz with all information in relation to their loss and damage, including loss of rental. Negotiations ensued between Mrs Stevanovic and Allianz on behalf of Mr Kirby.
- On 12 September 2018 Mrs Stevanovic entered into a Form of Release in favour of Mr Kirby. The document refers to Mrs Stevanovic as the Releasor and Mr Kirby as the Releasee. The bold print noted below appears in the document. Relevant terms are:
- (a)The Releasor has made a claim against the Releasee (hereinafter called “the claim”), in relation to loss and damage suffered by the Releasor as a result of an incident (hereinafter called “the incident”), which occurred on or about the 1 February 2018 when Faulty workmanship caused loss of rent to the third party.
NOW THIS AGREEMENT RECORDS as follows:
- Allianz on behalf of the Releasee promises to pay and the Releasor accepts the Releasee’s promise to pay the sum of Two thousand Four Hundred dollars ($2,400) inclusive of all costs and expenses
- The Releasor hereby releases and forever discharges the Releasee from all claims, suits, demands, causes of action, damages, costs and expenses related to the Loss of Rent suffered by the Releasor.
- It is an issue in the matter as to whether the Release amounts to a compromise of the Stevanovics’ entire claim against Mr Kirby or whether it relates only to their claim for lost rental. Mr Kirby asserts the former and the Stevanovics assert the latter.
- The Stevanovics engaged Mr Branislav Obradovic, remedial building consultant and director of Total Build Engineering Solutions to provide an expert report. Mr Obradovic concluded that all work performed by Mr Kirby’s subcontractor was defective.
- The Stevanovics engaged Mr Chris Roulstone, holder of a QBCC Licence – Low Rise, and trade qualified carpenter with 15 years’ industry experience to perform rectification work.
- The Tribunal has jurisdiction to hear and determine building disputes, once the parties have submitted to any dispute resolution process provided by the Queensland Building and Construction Commission.
- This matter involves a building dispute between a building owner and a building contractor relating to the performance of reviewable domestic work which includes tiling as part of the renovation or improvement of a home. Accordingly the Tribunal has jurisdiction to hear and determine the matter.
- The applicants filed an application in the Tribunal on 29 January 2019 seeking from the respondent the sum of $36,514.37. Subsequently the applicants’ claim for lost rental was abandoned in recognition of a compromise with Mr Kirby’s insurer.
- At the hearing it was clarified that the applicants frame their claim as one for damages for breach of contract, despite originally noting the claim as one for restitution.
- The applicants seek an order that the respondent pay them a total sum of $21,248.07 for rectification work, repair of damaged property, travel expenses and Tribunal costs.
- At the hearing of this matter Mr and Mrs Stevanovic gave evidence. They called as witnesses, a building expert Mr Obradovic, a builder Mr Roulstone and a property manager, Mr Roach. All statements and other written material filed by the Stevanovics were tendered and marked as exhibits in the proceeding.
- The respondent Mr Kirby gave evidence and called a plumber Mr Matthews to give evidence. All statements and other written material filed by Mr Kirby were tendered and marked as exhibits in the proceeding.
- I have referred to the oral evidence given at the hearing and all exhibits in considering this matter.
- Mr and Mrs Stevanovic say that the contract is comprised of the three quotations set out earlier in this decision. Mrs Stevanovic confirms accepting the first quote verbally.
- Mr Kirby attached an email thread to his statement of evidence dated 13 July 2020, attachment CK002. The thread commences on 20 January 2019 and refers to a quote to install a new bath. Importantly on 21 January 2018 at 10.32 am, Anthea Stevanovic advises: “So we are going with the first quote as previously confirmed”. The email bears a footer: “Kind regards, Anthea Stevanovic”. At the hearing Mr Stevanovic confirmed that Mrs Stevanovic acted on her own behalf and as agent for him in the steps she took in the matter.
- I find that the contract between the parties is comprised of the quote dated 8 January 2018 accepted verbally and subsequently in writing by Mrs Stevanovic on 21 January 2018. The contract was varied by the quotes dated 22 and 24 January 2018. I find that the contract as varied is a Level 1 regulated contract within the meaning of s 13 of Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). I find that because of s 14 of the Electronic Transactions (Queensland) Act 2001 (Qld) the contract is not ineffective because it is not written, dated and signed by the parties.
- The parties agree that a tax invoice dated 30 January 2018 in the sum of $3,860.00 reflects the work performed. The invoice has never been paid because of the applicants’ complaints about defective work.
Findings - Defective Work
- Mr Obradovic’s qualifications are set out in his report. I find that Mr Obradovic is a suitably qualified expert to express an opinion in this matter. I note that he works from New South Wales, however, I do not think that affects his expertise to express an opinion in this proceeding, particularly as he has assessed the work performed against the relevant Australian Standards and Queensland standards.
- Mr Obradovic inspected the works on 26 May 2018. He referenced the scope of works agreed between the Stevanovics and Mr Kirby and concluded that those works must comply with:
- (a)AS3740-2010: Waterproofing of Domestic Wet Areas;
- (b)AS3958-2007: Ceramic Tiles – Guide to installation of ceramic tiles;
- (c)Queensland Building and Construction Commission Standards & Tolerances Guide May 2019; and
- (d)National Construction Code/Building Code of Australia 2016.
- A summary of the defects found by Mr Obradovic follows:
- (a)uneven tiling throughout all wall and floors of the bathroom, laundry and kitchen with tolerances in excess of the maximum as specified in the relevant controls;
- (b)uneven tiling joins throughout;
- (c)joint lines not uniform or even width and do not align and are not on the same plane.
- (d)chipped tiles, rough and flakey cuts and sharp edges throughout;
- (e)sharp tiled edges around the bathtub and along the nib wall in the bathroom;
- (f)gradients around the bathroom floor wastes drain away from the floor waste, posing a risk to surrounding areas and allowing the pooling of water;
- (g)no waterstop at the doorway thresholds of the bathroom and laundry as prescribed by AS3740, posing a hazard to building elements;
- (h)chipped tiles, rough and flaky cuts and sharp edges at the doorway threshold to the bathroom and laundry floor. Sharp exposed edge abuts the carpet at a slightly higher level, posing a trip and cut risk;
- (i)drummy tiles in the bathroom indicating tiles not adhered to the substrate;
- (j)tiling overlapping the bathtub lip is chambered significantly and not plumb/square with the remainder of the wall, causing concerns with waterproofing;
- (k)grout, flexible sealant and movement/perimeter joint were not installed as specified by the relevant controls throughout the bathroom walls and joints;
- (l)movement/perimeter joints were filled with grout in lieu of flexible sealant as prescribed by AS3958.1, which will result in cracking along the joint or potentially cracking/delaminating the tiles;
- (m)wall tiles are not racked to achieve a straight edge;
- (n)excess grout and sealant has been left throughout the recently completed works;
- (o)additional damage was caused to other building elements:
- grout/adhesive was splashed throughout the kitchen area including along the kitchen bench top, floor vinyl covering, cabinets and the like. The kitchen joinery and floor are otherwise new and recently installed;
- damaged/chipped paint surrounding the tiled areas including architraves and corridor walls;
- the area left unclean with grout, dust, splattered materials and the like throughout the work areas;
- finger marks and dirt present along the portion of the corridor at the doorway to the bathroom and laundry.
- Mr Obradovic concluded that the completed works were not suitable for occupation, the standard of workmanship was not acceptable, the works posed a safety risk to any occupant and the works were not undertaken to the relevant Australian Standards, the Building Code of Australia and to industry standards and tolerances. Mr Obradovic concluded the work was so defective that the necessary rectification involved demolition of all installed items and reinstallation to achieve a compliant, safe and waterproof outcome. He confirmed in oral evidence that there was no other way to remediate other than removal.
- At the hearing Mr Kirby did not challenge the evidence of Mr Obradovic in relation to his conclusions as to the defective work and the means of rectification.
- Mr Roulstone is a holder of a QBCC Builder Licence – Low Rise and is a trade qualified carpenter with 15 years’ industry experience. Mr Roulstone provided an initial quote to remove and reinstall all work done by Mr Kirby in an amount of $15,346.31. A subsequent quote was given which reduced the scope and cost of the rectification work. The work was limited to bathroom rectification and also reduced the scope from floor to ceiling tiles to skirting tiles throughout and tiles up to a height of 2 m surrounding the shower. The quote was for $11,124.33, inclusive of GST. That quote was accepted and the work performed. However, the Stevanovics maintain their claim for damages in the higher amount on the basis that the remaining rectification work is still to be performed.
- Mr Roulstone’s evidence is that upon initial inspection he was shocked at the state of the bathroom, kitchen and laundry tiling. He said that he could not salvage any of the works to provide a safe, watertight and compliant product.
- At the hearing Mr Kirby did not challenge Mr Roulstone’s evidence in relation to the nature of the defective work or the cost of rectification.
- I accept the unchallenged evidence of Mr Roulstone and Mr Obradovic and find that all work performed pursuant to the contract between the parties was defective and that the only reasonable rectification was removal of the work performed and re-installation of the tiling work along with associated works necessary because of removal of the contract works.
- I accept the evidence of Mr Obradovic as to the additional damage caused to the premises by Mr Kirby’s workers. I note that the cost of cleaning and rectification work is claimed by Mr and Mrs Stevanovic in this regard.
Mr Kirby’s assertions
- Mr Kirby asserts:
- (a)the Stevanovics’ claims were compromised by the payment made by Allianz recorded in the Form of Release signed by Mrs Stevanovic.
- (b)The Stevanovics were owner builders and it was their responsibility to supervise Mr Hale and ensure the work he performed was not defective.
- (c)He was denied the opportunity to conduct rectification work.
- (d)He should not be responsible for the cost of any work which was not of the type he had contracted to perform.
- (e)Account should be taken of the contract price which had never been paid to Mr Kirby, even though he had attended to payment of Mr Hale for the work.
- (f)Some of the claimed items of damage should not be recoverable.
- (g)He was refused access to the site to have his expert measure the rectification work performed.
Form of Release
- In relation to the first point, the recital in the agreement refers to a claim for loss of rent arising out of “faulty workmanship”. The agreed release and discharge relates only to loss of rent. The Form of Release does not anywhere say that the payment made to Mrs Stevanovic is made in satisfaction of a claim for the cost of rectification of defective work, nor does the release and discharge refer to a claim for damages for breach of contract and the cost of rectification of defective work. That is consistent with the evidence of Mrs Stevanovic, which I accept, that after negotiation only the loss of rent claim was compromised. Mr Kirby did not call a representative of Allianz, nor did he give evidence that he was a party to the negotiations and that a broader claim was in contemplation upon settlement.
- Mr Kirby referred me to a Federal Court of Australia decision. The decision does not support his contention. The decision refers to the principle that general words in an instrument of release are limited to that thing specially in the contemplation of the parties at the time when the release was given. That is the position in this matter where the claim for loss of rent was in the contemplation of the parties and to the extent necessary limits any more general words in the document.
- I find that the Form of Release does not record a compromise of the Stevanovics’ claim in these proceedings and does not operate as a bar to these proceedings.
- Mr Kirby contends that given the extent of renovation work carried out by the Stevanovics they are owner builders within the meaning of section 43D of the QBCC Act and consequently, were responsible for supervision of Mr Hale’s work on site.
- Mr Kirby’s contention is that the Stevanovics must carry the consequences of Mr Hale’s defective work through failure to supervise his work and electing to contract an unlicensed, low cost handyman rather than a licensed contractor.
- If Mr and Mrs Stevanovic wished to “carry out” building work at the premises, and the value of the work was $11,000.00 or more, they were required to obtain an owner builder permit. They did not obtain a permit. Persons may still be found to be owner builders even if they do not obtain the relevant permit. It is likely that the total value of labour (as charged by a licensed contractor) and materials for all the renovation work carried out is more than $11,000.00. However, I do not consider in any event, that Mr and Mrs Stevanovic acted as owner builders in the renovation.
- The meaning of “carry out” owner builder work, appears in s 43D of the QBCC Act as:
- (a)carry out the work personally; or
- (b)do both of the following –
- engage one or more licensed contractors to carry out building work;
- provide building work services that would usually be carried out by a licensed contractor in the course of the contractor’s business; or
- (c)do a combination of (a) and (b).
Examples of an owner providing building work services –
- directing licensed contractors how to perform building work
- coordinating the scheduling of building work by licensed contractors
- arranging for payment of subcontractors.
- It is necessary to assess the evidence as to how the Stevanovics undertook the renovation in order to decide if they fall within the definition of “carry out”.
- The evidence of Mr and Mrs Stevanovic is that the work they performed themselves was to tear up carpet in order for fresh carpet to be laid by Harvey Norman. They removed an existing kitchen and installed an Ikea flat pack kitchen. Beyond that, they engaged contractors who they expected were licensed and they left the contracted work to be performed by those persons as experts in their field.
- The contract in this case is not between Mr Hale and the Stevanovics. The contract is between Mr Kirby and the Stevanovics. Their evidence is that they were led to believe by Mr Kirby’s online profile that he was licensed to do the work in question because he said that no job was “too big or too small” and his business covered a range of trades including carpentry. The Stevanovics say that Mr Kirby did not ever say he was unlicensed and could only perform work to a value of $3,300.00 or less. They note that his email communications with them record him as “Project Manager”. In the circumstances, I do not consider it unreasonable for the Stevanovics to consider Mr Kirby was licensed and qualified to perform the work he contracted to perform.
- Mr Kirby’s evidence is that Mr and Mrs Stevanovic confirmed when the contract was entered that they would be available on site to assist with works, supervise and oversee the building works. I take that to be an allegation that the Stevanovics were providing building work services. That allegation is denied by the Stevanovics. Mr Kirby called evidence from a plumber working on site, Mr Matthews, as to his observation of the way in which the renovation was being undertaken. Mr Matthews said that his work was co-ordinated by Mrs Stevanovic to be concurrent with work carried out by Mr Hale. He said that he was on-site for one day but did not engage with other workers. He did observe other workers on site. I do not think Mr Matthew’s evidence establishes that Mr and Mrs Stevanovic were carrying out building work.
- The Stevanovics say that they did not agree to supervise Mr Hale and it was their expectation that Mr Kirby would take responsibility for the contract works. That is consistent with their conduct when they observed a problem with works being carried out. I accept the evidence of the Stevanovics that when they raised an issue with Mr Kirby, he arranged for the problem to be rectified, for example in relation to faulty installation of the bathtub and delays in progress of the works. There is no evidence that Mr and Mrs Stevanovic sought to, or in fact directed Mr Kirby or Mr Hale as to how work should be performed.
- I accept the evidence of Mr and Mrs Stevanovic and find that they were not owner builders with any responsibility to supervise the quality of Mr Hale’s work.
- The elements of section 43D of the QBCC Act have not been met. In particular, Mr and Mrs Stevanovic have not sought to provide building work services that would usually be carried out by a licensed contractor in the course of the contractor’s business. There is no evidence from Mr Kirby as to how the Stevanovics could have avoided or mitigated their loss by supervision of Mr Hale. Mr Kirby remains liable for failure to perform the contract works in an appropriate and skilful way and with reasonable care and skill. Even if Mr and Mrs Stevanovic did unwittingly fall within the relevant definition, so as to carry out building work, that does not relieve Mr Kirby of his contractual obligation to them to perform the contract works with due care and skill.
Denied the opportunity to conduct rectification work
- Mr Kirby asserts he was denied the opportunity to undertake rectification work. Mrs Stevanovic’s evidence is that when she saw the defective work on 31 January 2018 she immediately contacted Mr Kirby to have him inspect the work. He did not do so and made no arrangements to do so. On 1 March 2018 a letter of demand was sent to Mr Kirby asking him to:
- (a)make arrangements for an assessment and quote by a qualified builder and make payment for all of the claims or arrange for Mr Kirby’s insurer to do so within seven days; or
- (b)agree in writing to immediately commence rectification of the defects.
- I accept Mrs Stevanovic’s evidence that no reply was received from Mr Kirby. Mr Kirby simply left the matter with his insurer. I accept Mrs Stevanovic’s evidence that she wanted the defective work fixed and would have been happy for Mr Kirby to do the work.
- On this basis I find that Mr Kirby has not been denied the opportunity to carry out rectification work.
Work outside the scope of the contract works
- Mr Kirby objects to being held responsible for installation of a shower curtain, mirror and vanity on the basis that he was never engaged to do that work. I do not understand that this work was done and had to be removed and re-installed as part of the rectification work. Mrs Stevanovic said that the work was not done once Mr Hale finished and it remained to be done. I accept Mr Kirby’s submission and consider that the cost of these three items of work would have been borne by the Stevanovics even if there had not been a need for rectification. After the hearing I requested that the parties address the cost of that work. The Stevanovics sent the Tribunal an email, copied to Mr Kirby, advising that Mr Roulstone calculated the cost of the three items of work at $575.00. Mr Kirby did not address the cost of the work but referred me to items of work being: waste removal and site clean, transport and deliveries and demolition, which he said should be considered in the formulation of the cost of the three items. I take it he is submitting that these items of work are not recoverable as damages. That submission is made too late in the matter to be considered. I accept that the cost of the three items of work is $575.00 and that this cost should be removed from the damages claim.
- Mr Kirby objected to the cost of waterproofing the bathroom, on the basis that it was not in his scope of works. I do not accept that a contract for tiling a bathroom, laundry and kitchen does not implicitly require adequate waterproofing. I consider the cost of waterproofing is an appropriate claim. I accept the unchallenged evidence of Mr Stevanovic that Mr Kirby informed them that preparing the walls and floors as specified in the quote included waterproofing. I accept that waterproofing was undertaken in the shower area, for the kitchen splash back and in some other areas, however the work was defective.
Account taken of the cost of the contract works/ Some claims not recoverable
- I will address these issues later in the decision when considering assessment of damages.
No access for an expert
- I accept Mr Kirby’s evidence that he was refused access to the premises for his expert to conduct an inspection, for the purpose of measuring the rectification work. The request was made on short notice in circumstances where the premises are tenanted. Mr Kirby did not seek any directions from the Tribunal, nor seek an adjournment of the hearing on the basis of any prejudice. He did not challenge Mr Roulstone in cross-examination in relation to any aspect of the rectification work.
- Mr Kirby did not submit what relief he seeks as a result of not being able to call an expert witness. I do not consider the issue gives Mr Kirby any defence to the claim.
Breach of Contract
- I find that the contract between the parties has been breached by Mr Kirby in that he failed to perform the contract works in accordance with the warranty implied at law and the statutory warranty that the work will be carried out in an appropriate and skilful way; and with reasonable care and skill.
- Because Mr Kirby has breached the contract, the Stevanovics are entitled to such damages as would put them in the position they would have been in, had Mr Kirby performed the contract.
Effect of unlicensed work on the contract
- Mr Kirby gave evidence that he and his sub-contractor were only handymen. He said that he did not hold any contractor’s licence of the appropriate class to perform the contract works.He did not think that Mr Hale held any contractor’s licence. Upon a search of the QBCC website I cannot find that Mr Hale holds a contractor’s licence or that he held one at the relevant time.
- Mr Kirby’s evidence was to the effect that he and his sub-contractor did not need a contractor’s licence to perform work to a value of less than $3,300.00. The contract price was in fact $3,860.00 after the agreed variations. In any event the relevant threshold of $3,300.00 in determining if a licence is required, is calculated by the “value” of building work, which means an amount representing the reasonable cost to a consumer of having the work carried out by a licensed contractor on the basis that all building materials are to be supplied by the contractor (whether or not the work is in fact carried out by a licensed contractor on that basis). Given the quotes provided to reinstall the contract work, I find that the value of the work exceeded $3,300.00 and that Mr Kirby or Mr Hale were required to hold the relevant contractor’s licence for wall and floor tiling.
- By s 42(1) of the QBCC Act a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class under the Act. By s 42(3) of the QBCC Act an unlicensed contractor is not entitled to any monetary or other consideration for carrying out work when unlicensed. By s 42(4) of the QBCC Act an unlicensed contractor is entitled to reasonable remuneration for carrying out building work, but only if, relevantly, the amount claimed is not more than an amount paid by a person in supplying materials and labour for carrying out the building work and does not include the supply of his own labour or any profit.
- Mr Kirby did not file a counter-application seeking payment of any part of the contract sum. However, in his statement of evidence dated 13 July 2020, Mr Kirby states that he has paid for the cost of materials used to complete the tiling works and the cost of labour for Mr Hale in the sum of $3,278.90. He says in his statement that he is seeking reasonable remuneration in payment of those costs.
- I do not accept that claim as a counter-application. No filing fee has been paid to justify treating the assertion as a counter-application. In any event, I find that Mr Kirby had no entitlement to claim moneys paid to Mr Hale for labour performed when Mr Hale was unlicensed. Because of the sub-contract between Mr Kirby and Mr Hale, Mr Hale was not an employee, he was in business on his own account and undertook the work for Mr Kirby in circumstances where he was unlicensed and in breach of s 42(1) of the QBCC Act. Mr Hale had no entitlement to payment for his own labour or profit. Accordingly, any money paid by Mr Kirby is not recoverable from the Stevanovics under s 42(4) of the QBCC Act as the cost of labour. The money is not recoverable because it falls within s 42(4)(b)(iii) as a cost which was not reasonably incurred.
- I accept the evidence of Mr and Mrs Stevanovic that because of Mr Kirby’s online profile and because he did not tell them he or his subcontractor were unlicensed, they did not know Mr Kirby and Mr Hale were not licensed to perform the contract works. I observe that there is no question they are in pari delicto (in equal offence) with Mr Kirby.
- I consider that despite Mr Kirby and Mr Hale being unlicensed, the contract is enforceable by Mr and Mrs Stevanovic against Mr Kirby.I find that Mr and Mrs Stevanovic are entitled to recover damages for breach of the contract.
- I discuss in the next section of this decision, the impact of the unlicensed status of Mr Kirby and Mr Hale on the calculation of damages.
Calculation of damages
- Mr and Mrs Stevanovic claim:
- (a)Rectification of defective works - $15,346.31
- (b)Cleaning of grout from timber - $907.50
- (c)Landscaping due to property being uninhabited when unable to rent - $600
- (d)Flights for Anthea Stefanovic to inspect work on 31 January 2018 - $149.49
- (e)Car hire 31 January 2018 - $45.00
- (f)Flights to meet assessor from Allianz 14 May 2018 - $204.00
- (g)Car hire 14 May 2018 - $48.30
- (h)Flights for Aleksandar Stevanovic to inspect rectification by Roulstone Renovations 20 to 22 May 2018 - $339.35
- (i)Taxi airport - $50.00
- (j)QCAT filing fee - $338.20
- (k)Cost of preparation of building report - $1,980.00
- (l)Cost of flights to attend QCAT Directions Hearing 23 May 2019 - $145.40
- (m)Car hire 23 May - $35.00
- (n)Parking 23 May - $25.00
- (o)Postage QCAT documents - $91.10
- (p)Time to re-paint damaged areas and cost of materials (performed by applicants) $200.00.
- (q)Flights to attend directions hearing 9 March 2020 - $143.42.
- Generally, the measure of damages recoverable by a building owner for breach of a building contract is the difference between the contract price of the work and the cost of making the work conform to the contract. The principle is subject to any rectification work being a reasonable course to adopt. Further, to be recoverable damages must not be too remote. That is, the loss and damage must arise naturally from the breach of contract and should have been in contemplation by the builder if the works were not performed with due care and skill.
- I find that the cost of rectification as estimated by Mr Roulstone in his quote Q1018 in an amount of $15,346.31, less the sum of $575.00 for the three items of work described previously, is the amount necessary to put the Stevanovics in the position they would have been in had the contract been performed. I find that the cost of rectification is not too remote as it arises naturally from the breach and should have been in contemplation if the works were not performed with due care and skill.
- On the basis of the expert evidence and the evidence of Mr Roulstone, I find that removal and re-installation of the contract work is a reasonable course to adopt to achieve conformity with the contract.
- I allow the sum of $14,771.31 for the cost of rectification.
- As to the remaining claims:
- (a)Mr Obradovic records and Mr and Mrs Stevanovic claim that the premises were left in a dirty and damaged state by Mr Hale. A quote from Absolute Cleaning Solutions dated 29 May 2018 is in evidence in the sum of $907.50 inclusive of GST. I accept that the site was not left clean, which is what one would expect if works were carried out with due care and skill. I allow the sum of $907.50 for cleaning.
- (b)It is said that because rental of the property was delayed by dealing with Mr Kirby’s insurer and attending to rectification, additional costs were incurred at the property including landscaping. I am not prepared to allow an amount for this item. I consider the cost is part of the cost of maintaining a property for investment purposes and that it forms part of the loss of rental claim otherwise compromised by the Stevanovics.
- (c)Claims are made for flights on 31 January 2018 and car hire. I do not allow that claim because those are costs which would have been met by Mrs Stevanovic in any event as part of conducting a renovation when she and her husband live interstate.
- (d)I disallow, as too remote, the cost of flights and car hire to meet the insurance assessor on 14 May 2018, on the basis that these costs are not a naturally occurring consequence of the defective work which should have been in the contemplation of the parties.
- (e)I allow the cost of flights and a taxi for Mr Stevanovic to inspect the rectification work in May 2018 in an amount of $389.35 as arising naturally out of the need for rectification and finalisation by the owners of the property.
- (f)At the hearing Mrs Stevanovic revised the claim for the cost of repair of damaged paint work to just the cost of materials in the sum of $200.00. I allow that amount.
- The total amount of recoverable damages is $15,458.16.
- The remaining claims relate to costs of the proceeding which I will deal with separately.
- Generally, the assessment of damages for breach of a building contract requires any amount due and payable to the builder by the homeowner, had the builder completed the building works in accordance with the contract, to be deducted from the costs of rectification, in order to achieve compensation for a net loss.
- In this case, Mr Kirby is not entitled to any payment under the contract. Section 42(4) of the QBCC Act is an exhaustive statement of any entitlement he may have. It would be antithetical to the intention of the Act to grant Mr Kirby a credit for moneys he has never had any entitlement to receive and which the Stevanovics had no obligation to pay. I therefore make no reduction in the assessment of damages for the unpaid contract sum or for the money Mr Kirby unreasonably paid to Mr Hale as an unlicensed sub-contractor. I note that this is the approach taken in other similar cases before the Tribunal.
- Mr and Mrs Stevanovic are entitled to recover damages for breach of contract in the sum of $15,458.16 from Mr Kirby.
- I have received no submissions in relation to interest and I make no award.
- The Tribunal may award costs in building disputes. I find that Mr and Mrs Stevanovic are entitled to recover costs reasonable and necessary to enable them to pursue their legal entitlements. I do not consider the cost of flying to Brisbane to attend Directions Hearings is reasonable, given that attendance could be arranged by telephone. I allow costs in the amount of $4,009.30 comprised of:
- (a)Filing fee: $338.20
- (b)Cost of building report: $1,980.00
- (c)Cost of expert witness attending hearing: $1,600.00
- (d)Postage of QCAT documents: $91.10.
- I order that:
- The respondent Chad John Kirby pay to the applicants Aleksandar and Anthea Stevanovic the sum of $15,458.16 by 4pm on 8 December 2020.
- The respondent Chad John Kirby pay the applicants Aleksandar and Anthea Stevanovic’s costs fixed in the amount of $4,009.30 by 4pm on 8 December 2020.
 Section 77(2), Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act); letter QBCC to Anthea Stevanovic dated 22 June 2018 – attachment 15 to Application filed 29 January 2019.
 Schedule 1B and Schedule 2, QBCC Act: definitions of ‘building dispute’; ‘domestic building dispute’; ‘reviewable domestic work’.
 Exhibit 12.
 Section 13 of Schedule 1B, QBCC Act; section 14, Electronic Transactions (Queensland) Act 2001 (Qld).
 Exhibit 14.
 Exhibit 9.
 Statement of Chris Roulstone made 9 July 2019, attachment A (Exhibit 16).
 Ibid, attachment B.
 Commonwealth Development Bank of Australia Ltd v Kok, in the matter of Kok  FCA 90, , citing Grant v John Grant and Sons Pty Limited (1954) 91 CLR 112, 126.
 Gunn v Steain  NSWSC 1076.
 Statement of Aleksandar Stevanovic dated 10 July 2019 (Exhibit 2) attachment 9.
 Statement of Aleksandar Stevanovic dated 10 July 2019 (Exhibit 2) at para 9.
 Damien J Cremean, Michael H Whitten and Michael F Sharkey, Brooking on Building Contracts (LexisNexis, 6th ed, 2020), 62-63.
 Section 22 of Schedule 1B, QBCC Act.
 Robinson v Harman (1848) 1 Ex 850, 855; Commonwealth v Amann Aviation (1991) 174 CLR 64.
 Section 42, QBCC Act.
 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(3)(c).
 Schedule 1AA, Queensland Building and Construction Commission Regulation 2003 (Qld), now repealed, but current as at the date the work was performed.
 Schedule 2, QBCC Act: definition of “value”.
 Exhibit 12, para 29.
 Yongwoo Park v Betaland Pty Ltd  QCAT 228,  – ,  and Williams v Stone Homes P/L & Anor  QDC 64.
 Bellgrove v Eldridge (1954) 90 CLR 613.
 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64.
 Mertens v Home Freeholds Co.  2 KB 526, 535.
 Cook’s Construction P/L v Stork Food Systems Australasia P/L  QCA 75, .
 Yongwoo Park v Betaland Pty Ltd  QCAT 228; Bocquee v Baltus  QCAT 280.
 QBCC Act, s 77(3)(h).
- Published Case Name:
Stevanovic & Anor v Kirby
- Shortened Case Name:
Stevanovic v Kirby
 QCAT 428
12 Nov 2020