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- Unreported Judgment
Knorring v Baldwin QCAT 143
Knorring v Baldwin  QCAT 143
Peter Von Knorring
David Alfred Baldwin
23 October 2015
Member Steven Holzberger
18 January 2016
DOMESTIC BUILDING DISPUTE – omissions to the building works – whether the builder was entitled to recover – additional amounts of variations – whether the owner had validly withdrawn from the contract – whether the builder had validly terminated the contract.
Domestic Building Contract Act 2000 (Qld), s 84, s 27, s 36, s 39, s 64, s 65, s 75
Thompson Residential Pty Ltd v Tran & Anor  QDC 156
APPEARANCES and REPRESENTATION (if any):
REASONS FOR DECISION
- Mr Von Knorring sought a quotation from Mr Baldwin for the carrying out of renovations to his property at Pallarenda.
- On 27 February 2013 Mr Baldwin provided that quotation and at a meeting at Mr Baldwin’s home a contract or rather a schedule for a contract was executed by both parties.
- Construction commenced on 11 March 2013 and on 11 October 2013 Mr Baldwin advised that practical completion had been reached and demanded payment of the balance of moneys he claimed were owing.
- Mr Von Knorring did not accept that the works had reached practical completion and by letter dated 24 October 2013 purported to withdraw from the contract. Mr Baldwin in turn purported to terminate the contract in writing on 31 October 2013.
- On 29 November 2013 Mr Von Knorring applied to the Tribunal to offset certain defects and omissions against balancing the balance of the contract price. His claim was calculated as follows:
Contract price: $178,540.00
Less payments made: $160,000.00
Subtotal: $ 18,540.00
Less damages for defects and omissions: $ 11,858.00
TOTAL: $ 6,682.00
- On 2 January 2014 Mr Baldwin filed a response seeking orders for the final payment under the contract to be made and further payment for variations to the contract works. His claim can be particularised as follows:
Contract price: $178,540.00
Less payments received: $160,000.00
Subtotal: $ 18,540.00
Less allowance for omission of rendering work: $ 2,000.00
Subtotal: $ 16,540.00
Plus variations: $ 17,979.20
TOTAL: $ 34,514.20
- Mr Baldwin also sought interest at the rate of 5% and claimed in the alternate for “unjust enrichment”.
- The matter was heard on 24 August and a decision delivered on 4 September 2014. Both parties appealed that decision.
- The Appeal Tribunal published its decision on 14 July 2015. It allowed the appeal and remitted the matter to a differently constituted tribunal for determination.
Amendment of claims
- In his further statement of evidence filed in the Tribunal on 29 May 2013 in the original proceedings, Mr Von Knorring made an additional claim for liquidated damages at the rate of $50 per day from 25 November 2013. He concedes that if his purported withdrawal of the 24 October 2013 was valid that claim must fail.
- Also in that further statement of evidence he made reference to certain defects and omissions but did not particularise his damages and did not go so far as to make an additional claim.
- At the commencement of the hearing Mr Von Knorring sought to amend his claim to add the following additional items:
Unauthorised work to fit architraves to veranda windows and dissassemble: $2,000.00
Damages for disappointment, inconvenience, loss of amenity and devaluation of property arising from breach of contract involving front veranda windows $5,000.00
Internal architrave to window to wardrobes, 4 bedrooms $120.00
Missing timber cornices to wardrobes $50.00
Set up for dishwasher $125.00
External eaves $250.00
Paint front and rear railings $150.00
- Mr Baldwin was made generally aware of the minor defects and omissions in May 2013 however he was given no notice that a claim was to be made for them or the particulars of that claim. He was afforded no opportunity to call rebuttal evidence or dispute quantum. Mr Baldwin had no notice at all for the claims for unauthorised work or damages for disappointment inconvenience and loss of amenity. He was given no opportunity to properly consider those claims let alone call evidence in rebuttal. Mr Von Knorring had ample time since the appeal decision to seek leave to amend his application and did not. Mr Baldwin would be clearly disadvantaged if leave was granted and accordingly I refused leave to amend.
- At the commencement of the hearing I referred Mr Baldwin to the judgment of Appeal Tribunal and asked if he wished to amend his claim to add an application to the Tribunal to exercise its discretion under in relation to variations. Mr Baldwin said that he did not.
- Mr Baldwin confirmed he was continuing with his “unjust enrichment” claim.
- During his closing submissions Mr Baldwin sought an order for payment of his legal costs of these proceedings in excess of $15,000. I did not understand this to be an application for leave to amend but indicated that if such application was made it would be refused for the same reasons Mr Von Korring’s application was refused. Mr Baldwin did not press it.
- The contract schedule executed by the parties on 27 February 2013 included in the section entitled “Brief description of the Works” the following particular:
Int & ext painting.
- The parties agree that the exterior of the building was painted by Mr Baldwin but that painting of the interior was limited to the walls of the pantry.
- Neither of those interpretations of the term “Int & ext painting” is attractive.
- Mr Baldwin’s evidence was that certain certifiers may not certify the works that were not properly sealed (undercoated) or waterproofed. Why that would require the pantry to be painted is unclear. It is also unclear why the exterior of the house would require painting.
- Mr Von Knorring’s evidence is that he understood “int & ext painting” to mean the interior and the exterior would be fully painted. I accept that evidence and find that the contract included interior painting.
- Mr Von Knorring provided a quotation from Classic Painting for complete interior painting for a total of $5,478. I allow that claim.
- Mr Von Knorring’s claim is for a shower screen in one of the bathrooms and mirrors in both. The draftsman’s drawings specify a shower screen and mirror in each.
- Mr Baldwin says that there was considerably more tiling required by Mr Von Knorring than he anticipated that changes were made to one of the bathrooms to install a bath rather than an oversized shower tray.
- Mr Von Knorring says that the tiling was what reasonably could be expected that the change from an oversize shower tray to a bath was at the suggestion of Mr Baldwin.
- Mr Baldwin is not, without the agreement of Mr Von Knorring, entitled to offset what he sees to be additional works against his other contractual obligations.
- Despite the lack of detail in the contract it is not unreasonable to assume that a bathroom renovation will include the installation of a shower screen and mirror and on that basis I allow Mr Von Knorring’s claim supported by a quotation from G & A Glass & Aluminium for a sum of $1,026.
Rendering and painting
- Mr Von Knorring asserts that the contract includes the painting and rendering of a two storey brick veneer wall. Mr Baldwin says it was his intention to apply painted render but acknowledges that some treatment of the wall was required by the contract.
- Mr Baldwin says there are structural issues with the wall and refused to render it. He proposed to reduce his claim for the balance of moneys owed under the contract by $2,000 to compensate for the omission.
- Mr Von Knorring says that the plans specify a “rendered brick wall or batton out”. He says that he chose for the wall to be rendered and painted and that at no time did Mr Baldwin suggest to him use of a rendered paint. I accept that evidence.
- Mr Von Knorring relies on a quotation from Twin City Renderer to supply and apply render to the external brick veneer walls totalling $3,300 and a quotation from Classic Painting for the painting of those walls for $1,760. I allow the sum of $5,060 as claimed.
- Mr Baldwin claims the following variations:
- a)new compressed floors to the bathroom $4,000.00
- b)new gyprock and cornice $5,000.00
- c)new jambs and architraves $5,000.00
- d)extra rubbish removal $500.00
- e)water damage remedial work to bathroom $3,379.20
- The variation documents in relation to (a), (b) and (c) were dated 8 July 2013 and in respect of (e) 2 August 2013. The variation document in respect of (d) is undated.
- Mr Von Knorring says all were delivered to him on 19 July 2013.
- It is not in dispute that the work involved in variations (b) and (c) had been performed prior to 8 July 2013.
- Mr Von Knorring argues that variations (a), (d) and (e) are not in fact variations but were included in the scope of works in the contract. In that regard I accept the evidence of Mr Von Knorring where it conflicts with Mr Baldwin.
- It is not disputed that none of the variation documents were signed by Mr Von Knorring. At least two of the variations claimed did not comply with section 79 of the Act. None complied with section 82. Accordingly they cannot be recovered by Mr Baldwin unless on an application made by him the Tribunal approves the recovery of an amount.
- Mr Baldwin did not make any application and accordingly I can make no orders under section 84(4).
- The necessity for Mr Baldwin to make an application was clearly flagged by the Appeal Tribunal in its decision. At the commencement of proceedings I asked Mr Baldwin if he wished to make any application under section 84(4). He declined.
- Mr Baldwin did not seek to adduce any evidence to address the matters the Tribunal must consider in the event an application is made.
- In those circumstances Mr Baldwin’s claim for the variations must fail.
Quantum meruit claim
- Mr Von Knorring submitted that Mr Baldwin’s quantum meruit claim must fail because section 84 excludes any restitution claim brought by a builder in respect of variation works. He relies on the District Court judgment in Thompson Residential Pty Ltd v Phong Tran and Chi Pham.
- I accept his submission. I also note that Mr Baldwin did not adduce any evidence to support his claim for restitution. His claim fails.
Was is the status of the Contract?
- It is common ground that:
- a)the parties met at Mr Baldwin’s home on 27 February 2013. It was a lengthy meeting. Mrs Baldwin was in attendance during the meeting but generally was not involved in it;
- b)Mr Baldwin completed a document entitled “Schedule for BSA New Homes Construction Contract” which is a carbonated document;
- c)the price included in the contract was based on Mr Baldwin’s quotation provided that day;
- d)both Mr Baldwin and Mr Von Knorring signed the contract on that date and Mr Baldwin retained both copies of the schedule;
- e)Mr Baldwin provided the carbon copy of the schedule to Mr Von Knorring in May 2013.
- Mr Baldwin says that his wife provided to Mr Von Knorring prior to his departure two documents namely:
- a)General Conditions of BSA New Home Construction Contract; and
- b)Consumer Guide for BSA New Home Construction Contract.
- He also says that a “contract pack” which I understand included those two documents and the schedule was opened in front of Mr Von Knorring at the meeting.
- Lin Baldwin, in a witness statement dated 10 February 2014 filed in the Tribunal on 26 February 2014 says that the contract pack was opened in front of Mr Von Knorring and asserts:
On leaving I handed to him the Consumer Guide and the General Conditions booklets.
- Mr Von Knorring denies that the contract pack was opened in front of him and denies receiving a copy of the Consumer Guide and the General Conditions booklets.
- Mrs Baldwin was present at the hearing. Mr Baldwin declined to call her to give oral evidence and Mr Von Knorring declined to cross-examine her. That is unfortunate where clearly there is a conflict of evidence.
- Mr Baldwin cross‑examined Mr Von Knorring on the point. His evidence under cross‑examination was entirely consistent with his evidence in chief.
- Mr Von Knorring provided in evidence correspondence from Queensland Building and Construction Commission dated 4 February 2014 advising him that it proposed to issue infringement notices to Mr Baldwin for failure to ensure the contract complied with formal requirements, failure to give a copy of the contract to the owner, failure to give the owner a copy of a certificate of inspection and receiving a deposit in excess of the limits imposed by the Act. Mr Baldwin confirmed in evidence those infringement notices had issued.
- Mr Von Knorring made a compelling case for Mr Baldwin demanding and receiving amounts not related to the progress of the work. Mr Baldwin struggled in cross-examination to identify his obligations in relation to claims procedure and variations to the works.
- I prefer the evidence of Mr Von Knorring. It also seems improbable to me that Mr Baldwin would choose to comply with his obligation to deliver the consumer guide and general conditions in circumstances where his lack of knowledge of his obligations under the Domestic Building Contracts Act and the contract and his consistent lack of compliance with those obligations during the course of the contract were established during the proceedings.
- For those reasons I find that Mr Von Knorring did not receive the general conditions or consumer guide at the meeting at Mr Baldwin’s home on 27 February 2013 or at all.
- Mr Von Knorring argues that that failure gives him an entitlement to withdraw from the contract under section 72 Domestic Building Contract Act 2000.
- Section 72 permits a building owner to withdraw from a contract within 5 business days after “the receipt date”.
- The term “receipt date” is defined in section 72(5) as the day on which the building owner receives a copy of the signed contract and a copy of the appropriate contract information statement.
- The term “contract information statement” is defined as a statement approved from time to time by the Commissioner under section 99. The information statement consists of the general conditions and consumer guide.
- The parties agree that the executed contract schedule was provided by Mr Baldwin and received by Mr Von Knorring sometime in May 2013. I have found that the contract information statement was not provided to Mr Von Knorring at any stage.
- While it seems counter‑intuitive to permit withdrawal from a contract under a cooling off provision when the terms of the contract have been all but performed by the parties, section 72(3) provides that where there is no receipt date, and this is the case here, the building owner may withdraw at any time.
- The Act requires the withdrawal notice either be given (handed) to the building contractor, left with the building contractor at the address specified in the contract or otherwise served in accordance with any provision in the contract providing for the service of notices.
- Clause 30 of the general conditions permits, in addition to the methods specified in the Act, service by facsimile but not by email.
- Mr Von Knorring put into evidence a copy of his notice and a copy of the email to which it was attached. He does not assert that a copy of it was handed to Mr Baldwin, left at his address or sent by fax.
- The provisions of the Act are mandatory. Accordingly I find that the purported withdrawal is invalid because it was not served on Mr Baldwin as the Act requires.
- On or about 28 October 2013 Mr Von Knorring retained the services of Jim Roberts Locksmiths to change the locks of the premises effectively preventing Mr Baldwin from re-entering the property.
- On 31 October 2013 Mr Baldwin gave written notice to Mr Von Knorring purporting to terminate the contract “due to your default in failing to pay moneys owing under the contract and further, due to your taking early possession illegally under the terms of the contract”.
- The purported termination did not satisfy requirements of section 27 of the contract in that Mr Baldwin did not prior to terminating give notice of default as required by clause 27.1.
- I also suspect although it is not clear from the evidence that Mr Baldwin’s notice was served by email and accordingly was defective for the same reasons Mr Von Knorring’s notice of withdrawal was defective.
- While Mr Von Knorring’s failure to properly serve his notice of withdrawal is not necessarily a repudiation of the contract, changing the locks and excluding Mr Baldwin clearly evidences his lack of intention to be bound. He has in effect repudiated the contract.
- Mr Baldwin’s notice of termination while unfortunately worded and improperly served is in my view acceptance of that repudiation and effective termination of the contract. Both parties by their subsequent actions clearly indicated that they did not intend to be further bound by the contract and there has been no further performance of the contract by either party.
- Mr Von Knorring claims the sum of $294 being the costs of changing the locks after he purported to withdraw from the contract. I have found that his withdrawal is ineffective and accordingly I am not prepared to allow those costs.
- Mr Von Knorring claims for the return of the original keys to the property which were given to Mr Baldwin. Although these keys would appear to be of little use to anyone they do remain Mr Von Knorring’s property and he is entitled to their return.
- Mr Von Knorring is entitled to all the certificates of inspection which have issued during the course of construction by Mr Baldwin.
- I have found that the contract was validly terminated in October 2013 and accordingly Mr Von Knorring’s claim for liquidated damages must fail.
- Accordingly I order:
- a)Mr Von Knorring pay to Mr Baldwin the sum of $6,976.00 as final payment under the contract;
- b)That Mr Baldwin deliver to Mr Von Knorring:
- i)all keys he holds in relation to Mr Von Knorring’s property; and
- ii)all certificates relating to building works carried out by him on Mr Von Knorring’s property.
 Domestic Building Contracts Act 2000 (Qld), s 84(4).
 Response and/or counterclaim annexure A para 3
 Further statement of evidence of David Alfred Baldwin, para 2.3
 Domestic Building Contracts Act 2000 (Qld), s 84(2).
 Domestic Building Contracts Act 2000 (Qld), s 84(2)(b).
 Domestic Building Contracts Act 2000 (Qld), s 84(4).
  QDC 156.
 Domestic Building Contracts Act 2000 (Qld), s 27(1).
 Domestic Building Contracts Act 2000 (Qld), s 36.
 Domestic Building Contracts Act 2000 (Qld), s 39(2).
 Domestic Building Contracts Act 2000 (Qld), s 64(1).
 Domestic Building Contracts Act 2000 (Qld), s 65(2).
 Domestic Building Contracts Act 2000 (Qld), s 75.
 Domestic Building Contracts Act 2000 (Qld), s 75(2).
 Domestic Building Contracts Act 2000 (Qld), s 75(1).
- Published Case Name:
Knorring v Baldwin
- Shortened Case Name:
Knorring v Baldwin
 QCAT 143
Member Steven Holzberger
18 Jan 2016