Exit Distraction Free Reading Mode
- Unreported Judgment
- Lee Manson v Brett[2016] QCAT 282
- Add to List
Lee Manson v Brett[2016] QCAT 282
Lee Manson v Brett[2016] QCAT 282
CITATION: | Lee Manson t/as Manson Homes v Brett & Purnell [2016] QCAT 282 |
PARTIES: | Lee Manson t/as Manson Homes (Applicant) v Stewart Brett Sarah Purnell (Respondent) |
APPLICATION NUMBER: | BDL117-14 |
MATTER TYPE: | Building matters |
HEARING DATE: | 13 October 2015, 10 November 2015 |
HEARD AT: | Brisbane |
DECISION OF: | Member Paratz |
DELIVERED ON: | 5 August 2016 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | BUILDING – Where the owners terminated a building contract – whether the termination by the owners was valid – where the builder amended the plans and then installed a roof material different to the amended plans – where the required Development Approval was not obtained prior to the builder installing the roof material Domestic Building Contracts Act 2000 (Qld) Thompson Residential Pty Ltd v Hart & Anor [2014] QDC 132 |
APPEARANCES: |
|
APPLICANT: | D. C. Kissane of Counsel Instructed by Gadens |
RESPONDENT: | B.J.Saal (Saal and Associates) |
REASONS FOR DECISION
- [1]Mr Brett and Ms Purnell (‘the owners’) entered into a Contract with Mr Manson (‘the builder’) to renovate a property at 16 Lind Street, Newmarket, in Brisbane.
- [2]A dispute arose, and the owners terminated the Contract on 28 April 2014.
- [3]A preliminary question has arisen as to whether the Contract was validly terminated by the owners.
- [4]The primary issue in the matter relates to the roof material of the house. The house originally had a tile roof. That roof was replaced with a metal roof in the course of construction. The proper approvals were not obtained for the change of roof material.
- [5]The questions at the heart of this matter are:
- (a)who was responsible for obtaining the proper development approvals; and
- (b)whether there was an agreement between the owners and the builder as to installation of the metal roof.
- (a)
- [6]I heard evidence on 13 October 2015 and 10 November 2015. Extensive submissions were made following the hearing, through until April 2016.
- [7]There are significant disputes of fact between the owners and the builder, and considerable legal argument as to the legal results that flow depending upon what findings of fact are accepted.
- [8]This is the decision on the preliminary question.
History of the proceedings
- [9]The builder filed an Application for domestic building dispute in the Tribunal on 26 May 2014 seeking the following orders:
- A declaration that the purported termination of the contract on 28 April 2014 was invalid.
- Further, an order that the Respondents pay the Applicant the sum of $96,932 for work performed.
- Further, an order that the Respondents pay the Applicant damages in the sum of $50,077 for breach of contract;
- Further, an order that the Respondents pay the Applicant interest on the amounts claimed at paragraphs 2 and 3 herein at the contract default rate applicable from time to time (18%) from 2 April 2014 to the date of payment;
- Further, an order that the Respondents pay the Applicant’s costs including legal fees to be agreed or assessed.
- [10]The owners filed a Response and Counter-Application on 3 July 2014, seeking the following orders:
- A declaration that the Respondents validly terminated the contract.
- Dismissal of the Applicant’s claim for payment.
- Dismissal of the applicant’s claim for an award for damages, interest and costs.
- An order that the Applicant pay the Respondents in the sum of $77,528.90 for breach of contract.
- An order that the applicant pay the Respondents in the sum of $8,400.00 for damages.
- An order that the Applicant pay the Respondents’ legal costs of this Application.
- [11]Directions were given by the Tribunal on 15 July 2014 requiring the filing of statements of evidence by the builder by 18 August 2014; the filing of statements of evidence by the home-owners by 19 September 2014; and listing the application for a Compulsory Conference on 30 September 2014.
- [12]Further Directions were given on 11 August 2014 requiring the builder to provide documents in support of his calculation of the claim for payment of $96,932.00, and the claim for damages of $50,077.00, by 29 August 2014.
- [13]The Directions of 15 July 2014 and 11 August 2014 were vacated by consent on 30 September 2014, and Directions by consent were made requiring the filing by the builder of documents evidencing the claims for payment and damages by 3 October 2014; the filing of statements of evidence by the builder by 3 October 2014; the filing of statements of evidence by the owners by 10 October 2014; and listing the application for a Compulsory Conference on 7 November 2014.
- [14]Those Directions also provided that any costs thrown away by vacating the Compulsory Conference on 30 September 2014 were the owners costs in the cause.[1]
- [15]A Compulsory Conference was held on 7 November 2014. The matter was not resolved, and Directions were made by consent for the filing of an amended application on quantum by the builder by 28 November 2014; the filing of a response to the amended application by the owners by 19 December 2014; the filing of a schedule as to the works by the builder by 23 January 2015; the filing of a schedule of works by the owners by 27 February 2015; the filing of a response by the builder by 20 March 2015; and the filing of a response by the owners by 20 April 2015.
- [16]Directions were made on 20 November 2014 listing the application for a Directions Hearing on 29 April 2015, and an Experts Conclave on 4 May 2015.
- [17]Directions were then made on 13 January 2015 vacating the Directions made on 7 November 2014, and the filing of an amended application by the builder by 23 January 2015; the filing of a response by the owners by 6 February 2015; the filing of a schedule by the builder by 20 February 2015; the filing of a schedule by the owners by 6 March 2015; the filing of a schedule in response by the builder by 20 March 2015; and the filing by both parties of their list of experts by 17 April 2015.
- [18]A striking out application was then brought by the owners and was heard on 28 April 2015. The striking out application was adjourned, and directions were given for the filing of an amended application by the builder by 8 May 2015; the filing of a response by the owners by 22 May 2015; the filing of experts reports by the builder by 8 June 2015; the filing of experts reports by the owners by 29 June 2015; the holding of an experts conclave on 10 August 2015; the holding of a compulsory conference on 31 August 2015; and as to any applications for costs of the striking out application hearing.
- [19]Further directions as to submissions on the costs of the striking out application hearing were made on 8 May 2015.
- [20]Directions were made by consent on 5 June 2015 for the owners to file their response to the amended particularised application by 5 June 2015; and for the builder to file his experts reports by 18 June 2015.
- [21]An order was made in an ‘on the papers’ hearing on 30 June 2015, ordering the builder to pay the owners their costs of the strike out application fixed at $1,000.00.
- [22]A second Compulsory Conference was held on 31 August 2015. The matter was not resolved, and directions were given for the filing of any further statements of evidence to be relied upon by the builder in relation to the issues of termination by 11 September 2015; and for the owners to file any further statements of evidence to be relied upon by them in relation to the issues of termination by 25 September 2015; and setting the application for a directions hearing on 23 September 2015, and for hearing on 13 October 2015.
- [23]At the Directions Hearing on 23 September 2015, the time for the owners to file any further statements of evidence to be relied upon by them in relation to the issues of termination was extended to 2 October 2015.
- [24]Also at the Directions Hearing on 23 September 2015, the hearing listed for 13 October 2015 was confirmed for the determination of a preliminary matter, namely whether the contract was rightfully terminated.
- [25]The first day of the hearing was held by me on 13 October 2015. A second day was required, which was held on 10 November 2015.
- [26]Oral evidence was given at the hearing by Mr Manson, Mr Brett, Ms Purnell, Mr Fowler and Mr Jones.
- [27]At the conclusion of the hearing on 10 November 2015, I gave directions. The builder’s Counsel sought to obtain a transcript before providing written submissions. No set dates were determined, after discussion with the legal representatives for the parties, as the time for obtaining of the transcript from the external provider could not be fixed. Directions were therefore framed in time periods after receipt of the transcript, as follows:
- Lee Manson is to apply for a full transcript of the Hearing, if he wishes, and obtain the transcript as soon as possible.
- Lee Manson will file his Submissions in the Tribunal, and give a copy to Stewart Brett and Sarah Purnell, within 14 days of receiving the transcript.
- Stewart Brett and Sarah Purnell will file their Submissions in Response in the Tribunal, and give a copy to Lee Manson, within 14 days of receiving the submissions of Lee Manson.
- Lee Manson may file any Submissions in Reply to the Response in the Tribunal and give a copy to Stewart Brett and Sarah Purnell; or advise the Tribunal and Stewart Brett and Sarah Purnell that he does not wish to file a Reply; within 14 days of receiving the response.
- The Tribunal will deliver a decision in writing, without further Hearing, after receiving the submissions of Lee Manson, or after being advised that no Reply is to be filed.
- [28]The builder filed his submissions of 33 pages, prepared by his Counsel, on 27 January 2016. The owners filed their submissions in response of 61 pages, prepared by their Solicitor, on 25 February 2016. No submissions in reply were filed by the builder within 14 days after that date, and the matter was referred to me for decision on 17 March 2016. The builder then did file Submissions in Reply of 77 pages, prepared by his counsel, on 6 April 2016, whilst I was in the course of drafting this decision.
- [29]In all, 171 pages of submissions were filed.
- [30]The Submissions in Reply is a substantial document drafted by Counsel. The builder submits that reasons for the delay in filing it result from: the excessive length of the owners submissions; the need to respond to new grounds for terminating the Contract which were not previously raised; the misstating of propositions from various authorities; and the assertion of unsustainable arguments.
- [31]Having regard to the nature and content of the Reply, it would not be in the interests of justice for me to not take it into consideration, and I extend the time for the receipt of the Applicant’s Submissions in Reply to 6 April 2016.
History of the legal steps taken
- [32]The owners and the builder signed a Contract on 29 November 2013 for renovation and extension work to the property at 16 Lind Street, Newmarket.
- [33]The Contract was an HIA QC3 2011 Contract entitled ‘Alteration, Addition and Renovation Contract’.
- [34]The builder gave the owners a progress claim on 23 March 2014 for Stage 5 of the works, the ‘Enclosed Stage’ claim, in the amount of $85,800.75.
- [35]The builder gave a Notice of Suspension of Works on 2 April 2014. The notice provided as follows:
We are hereby giving notice that works will be suspended immediately under clause 18.1 of the contract dated 29 November 2013, until the owners gives written notice under clause 18.2 that the reason for suspension no longer exists.
We also hereby give notice that under clause 16.2 we intend to file for an extension of time due to the suspension of works yet to be determined.
We also hereby give notice that under clause 18.3 we intend to claim the contractor’s costs of suspending the works including the contractor’s margin yet to be determined.
We also hereby give notice that under clause 10.5 we are making a claim of $1800.00 inclusive of GST for consultation to date 1/03/2014 in regards to DA approval for change of material use in regards to roof material.
We hereby give notice that under Clause 11.4 we have carried out extra works as determined by statutory authorities was required and that under clause 19.6 we are making a claim of $3,139.00 inclusive of GST payable at fixing stage.
We hereby give notice that under clause 27.3 you are in substantial breach of contract and the progress payment dated 23/03/2014 in the amount of $85,800.75 needs to be paid to avoid any further action.
- [36]The owners then gave the builder a Notice to Remedy Breach on 4 April 2014, which provided as follows:
- This Notice is issued pursuant to clause 27.3 of the Contract.
- The Owners put the Contractor on Notice that it is in substantial breach of the following clauses of the Contract:
- (a)Clause 1.1 of the Contract, which provides that:
- (a)
- The contractor must:
- (a)complete the works in accordance with this contract; and
- (b)comply with all laws and lawful requirements of any statutory or other authority with respect to the carrying out of the works.
- (b)Clause 11.1 of the Contract, which provides that
- (a)
11.1 The contractor must, on behalf of the owners, comply with any lawful requirement of any statutory or other authority but only to the extent that such requirement relates to the carrying out and completing the works.
- The contractor has invalidly suspended the works, in breach of its obligation under clause 1.1 of the Contract.
- The Contractor has installed the incorrect roof currently on the Project and as such the Project will not obtain the required statutory approval, which is a breach of clause 1.1(b) and 11.1 of the Contract.
- The Owners puts the Contractor on Notice that, pursuant to clause 26.1:
26.1 the contractor must rectify any defects or other faults (except for minor settlement or minor shrinkage) due to the works not being in accordance with this contract that appear and are notified in writing by the owners to the contractor within 6 calendar months after the date of practical completion.
- The Owners puts the Contractor on Notice that it must immediately return to the Project and complete the Works and must within 10 business days of receiving this Notice remedy the breaches listed above.
- If the Contractor fails to remedy the breaches, the Owners, pursuant to its right under clause 27.3 of the Contract, may terminate the Contract by giving a separate notice to that effect.
- [37]The owners subsequently gave the builder a Notice of Termination on 28 April 2014, which provided as follows:
- This Notice is issued pursuant to clause 27.4 of the Contract.
- By way of notice dated 4 April 2014 (Show Cause Notice) the Owners put the contractor on notice that:
- The Contractor is in substantial breach of numerous clauses of the Contract (as detailed in Show Cause Notice) and that pursuant to clause 26.1:
- 26.1 the contractor must rectify any defects or other faults (except for minor settlement or minor shrinkage) due to the works not being in accordance with this contract that appear and are notified in writing by the owners to the contractor within 6 calendar months after the date of practical completion.
- The Contractor invalidly issued a progress claim on the Owners, seeking payment for completion of Stage 5 of the Project, when Stage 5 of the Project has not yet been completed.
- The Contractor has invalidly suspended the Works, in breach of its obligations under clause 1.1 of the Contract.
- The Contractor has installed the incorrect roof currently on the Project and as such the Project will not obtain the required statutory approval, which is a breach of clause 1.1(b) and 11.1 of the Contract.
- The Contractor has invalidly issued variations, in breach of section 79 of the Domestic Building Contracts Act 2000.
- The Contractor was to return to the Project and remedy the breaches listed in the Show Cause notice, within 10 business days of receiving the Show Cause Notice.
- If the Contractor failed to remedy the breaches, the Owners, pursuant to its right under clause 27.3 of the Contract, may terminate the Contract by giving a separate notice to that effect.
- The Contractor is in substantial breach of numerous clauses of the Contract (as detailed in Show Cause Notice) and that pursuant to clause 26.1:
- The Contractor has failed to rectify or commence to substantially rectify the breaches identified in the Show Cause Notice within 10 business days of receiving the Show Cause Notice.
- Accordingly, the Owners is exercising its right to terminate the Contract pursuant to clause 27.4 of the Contract.
The relevant Contract Provisions
- [38]Item 5A of the Contract provides as follows:
5A PLANNING AND BUILDING APPROVALS
The person to obtain and pay for all planning and building approvals, consent or approval required by a statutory or other authority (Clause 2.3 to 2.6)
Contractor
(If nothing stated the contractor)
- [39]Clause 1.1 of the Contract provides as follows:
Clause 1. PERFORMANCE
Contractor’s obligations
- The contractor must:
- (a)Complete the works in accordance with this contract; and
- (b)Comply with all laws and lawful requirements of any statutory or other authority with respect to carrying out of the works.
- (a)
- [40]Clauses 4.3, 4.5 and 4.6 provide as follows:
Clause 4. PROGRESS PAYMENTS
Contractor to claim
- The contractor must give the owner a written claim for a progress payment for the completion of each stage.
Due date for payments
- The owner must pay a progress claim to the contractor within 5 working days of receiving the progress claim.
No certificates required
4.6 The contractor is not required to give any certificate of approval from any relevant statutory or other authority to the owner as a precondition to the payment of a progress claim.
- [41]Clauses 11.1, 11.2, 11.3 and 11.4 of the Contract provide as follows:
Clause 11. COMPLIANCE WITH REQUIREMENTS OF LOCAL AND OTHER AUTHORITIES
Requirements of statutory and other authorities
11.1 The contractor must, on behalf of the owner, comply with any lawful requirement of any statutory or other authority but only to the extent that such requirement relates to carrying out and completing the works.
Variation to comply with a requirement
11.2 The contractor must:
- (a)notify the owner of any extra work required to comply with subclause 11.1; and
- (b)request a variation to carry out that extra work,
Owner to do acts
11.3 The owner must sign all documents and do all acts as requested by the contractor to obtain all permissions, consents and approvals required from the relevant statutory or other authority.
Owner’s works and other certificates
11.4 If the owner is to carry out other works and the failure to complete those works on or before practical completion prevents the contractor from obtaining a final certificate from the relevant statutory or other authority, the owner releases the contractor from any obligation to obtain the final certificate.
- [42]Clause 15.1 and 15.2 of the Contract provide as follows:
Clause 15. UNFORESEEN CIRCUMSTANCES
Contractor to give notice of unforeseen circumstances
15.1 If the contractor becomes aware of unforeseen circumstances, the contractor must promptly notify the owner in writing and cease the carrying out of the works.
Effect of unforeseen circumstances
15.2 Subject to subclause 15.5, if the unforeseen circumstances differ from those either:
- (a)disclosed to the contractor prior to this contract being signed; or
- (d)shown in the contract documents
And:
- (c)If the effect of that difference requires more or less work than that which a reasonable contractor would have anticipated on the signing of this contract; and
- (d)That work is not provided for elsewhere in this contract,
then the contractor is to ask for a variation to carry out that work under Clause 19.3
- [43]Clause 18.1(a) of the Contract provides as follows:
Clause 18. SUSPENSION OF WORKS
Contractor’s right to suspend
18.1 The contractor may by written notice to the owner suspend the carrying out of the works if:
(a) the owner does not pay a progress claim as required by Clause 4
- [44]Clauses 27.1, 27.2(a), 27.4 and 27.7 of the Contract provide as follows:
Clause 27. TERMINATION BY DEFAULT
When the contractor is in substantial breach
27.1 The owner is entitled to give a notice to remedy breach under subclause 27.3 if the contractor is in substantial breach of this contract. The contractor is in substantial breach of this contract if the contractor:
(a) suspends the carrying out of the works, otherwise than under Clause 18;
(b) has the contractor’s licence cancelled or suspended; or
(c) is otherwise in substantial breach of the contract
When the owner is in substantial breach
27.2 The contractor is entitled to give a notice to remedy breach under subclause 27.3 if the owner is in substantial breach of this contract. The owner is in substantial breach of this contract if the owner:
(a) does not pay progress payments as required by Clause 4
Notice to end the contract
27.4 If the party 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.
When notice is ineffective
27.7 Neither party is entitled to give a notice to remedy breach while that party is in substantial breach of this contract. A notice given by a party in substantial breach is ineffective.
- [45]“Enclosed Stage” is defined in Schedule 2 of the Contract as follows:
- (a)The external wall cladding is fixed; and
- (b)The roof covering is fixed, but without:
- Soffit linings necessarily having been fixed; or
- For a tile roof pointing necessarily having been done; or
- For a metal roof scribing and final screwing off necessarily having been done; and
- (c)The structural flooring is laid; and
- (d)The external floors are fixed (even if only temporarily), but, if a lockable door separating the garage from the rest of the building has been fixed, without garage doors necessarily having been fixed; and
- (e)The external windows are fixed (even if only temporarily).
- (a)
The builder’s version as to what happened
- [46]There is considerable dispute as to what occurred in fact.
- [47]Mr Manson said in evidence that the parties had dispensed with the standard schedule, and completed a customised progress schedule, as the schedule could not be standard as it provided for an extra draw for demolition and excavation. The standard provisions in page 38 of the Contract were struck out, and it was his intention that the definitions that were previously on page 38 would apply to page 39.
- [48]He said that he retained Matrix as Certifiers on the project, and they provided a building approval on 8 January 2014.
- [49]In January 2014 he started cleaning the house of clothes, books and bags left in the house by Mr Brett’s grandmother.
- [50]He received an email from Mr Laa Tay from Matrix on 17 January 2014 which said that a siting variation needed to be lodged with the local council, and that consent by the neighbour would be required. Mr Laa Tay also advised that the property was in a development control precinct and may require a Minor Town Planning Application to council.
- [51]He said that between 17 January 2014 and 29 January 2014, he discussed those town-planning matters with the owners, and he paid the fee for the relaxation of the side boundary clearance.
- [52]He said that he forwarded the amended plans to Mr Laa Tay, and advised the owners that he had amended the plans to a tile roof.
- [53]However, he then proceed to install a metal roof. He maintained that he installed the metal roof at the owners’ request.
- [54]He said that did not issue any Variations as to changing the roof material before doing that work because it was a matter of urgency.
- [55]His evidence as to why he installed the roof material was:[2]
MEMBER: Mr Manson, at the time you installed the metal roof, you were aware that there was no development approval for it? –- The respondents told me that they were – they were certain that the designer and town planner were certain they would be able to get a development approval and it was going to be ---
Were you aware that at the time there was no development approval or not? – Yes. Yes, I was.
The metal roof that you installed, at the time you installed it, was different from the current approval plans at the time, was it? – Yes, that is right. Originally it was to be Colorbond and it was requested by the respondents to be Zincanneal which is just a plain metal finish. In regards to that development approval, I thought the process was underway and that we would, you know, eventually have that development approval for the final inspection and final certificate. I’m just not too certain of the dates then when I was told that there was a development approval for it, like I noted there the 14th of March meeting was just to show me that there was a development approval. So I had been told earlier that we’d got it – we’ll get it to you and on the 14th of March we had a site meeting and I saw a document that did say, this is the development approval but it wasn’t. It was to state that it was developed approvable.
And were you concerned at all if you were installing a roof that had neither development approval nor complied with the current approved plans? – Most of these things are normally passed. The council will let you do a lot of elements outside of their actual town planning guidelines. So I wasn’t too concerned, as normally you would make your application on these things would be passed.
Did you get any instruction in writing from the client to cover yourself, since this was a construction departing from the plans? – No, I didn’t see that as a ---
- [56]After the metal roof was installed, he issued the Enclosed Stage Claim on 23 March 2014.
- [57]He said that he issued the suspension of works notice because of non-payment of the enclosed stage, and also because Mr Brett’s father-in-law said there would be no payment.
- [58]He said that the metal roof ended up having an unusual shape because he was building the top quarter of the roof as a new roof structure, and was working off an existing roof. He said that he fixed what he could fix.[3]
- [59]He said that he did not have any plans of the existing roof frame, and that you ‘get to it and see what’s there’.
- [60]He said that everything had been submitted for building approval, and that it only hinged on development approval, which could take three months.[4]
The owners’ version as to what happened
- [61]The owners engaged Neo Building Design (‘Neo”) on or about 13 November 2012 to produce design drawings for the proposed renovation and extension of the property.[5]
- [62]They received preliminary drawings from Peter McPhee, the designer/draughtsman for Neo, on 18 December 2012.[6]
- [63]Mr McPhee sent the owners working design drawings in an email of 6 March 2013 and advised that the town planner was happy with the plans and saw no issue or need to go through any Development Approval process.
- [64]Mr Brett said that the house was always to have an iron roof. He had discussed designs with Mr McPhee onsite, who had produced the designs and working drawings. Mr McPhee had told him that no Development Approval was needed.
- [65]The working design drawings provided for the existing tiled roof to be removed and for a colourbond metal sheeting roof to be installed.
- [66]Mr Brett said that in the first discussions with the builder onsite on or about December 2013, that the builder had enquired about any advice he had had received from the designer regarding Development Approval and that:[7]
..we simply told Mr Manson that we had received an email earlier in the year from the designer stating that no DA was necessary
- [67]The owners received a finalised quote from the builder on 24 October 2013, which included provision for all building approvals and also the installation of a colour bond metal sheeting roof. The quote contained the following provisions:
Description: Renovation and Extension of existing brick low-set house as plans 12-4777 & email dated 21/07/13
Total Quote: $243,055: Includes GST, building approvals and inspections, QBSA fees and construction insurance. Includes schedule of finishes & prime costs listed below.
- [68]The Contract was then signed on 13 December 2013 pursuant to the Quote.
- [69]The builder sent the owners an email on 3 January 2014 which provided:
Attached is the owners consent form that needs your signatures, please sign and send back.
The form allows Lee Manson to make an application for Development Approval that allows for a Building Approval at 16 Lind St Newmarket.
- [70]The email attached a form which provided as follows:
Individual Owner’s Consent to the making of an IDAS development application
We Stewart Brett & Sarah Purnell as owners of the premises identified as follows: Lot 81; SP 50454; Site Address 16 Lind St; Suburb Newmarket Postcode 4051;
Consent to the making of a development application under the Sustainable Planning Act 2009 by Lee Manson on the premises described above for the purpose of Renovation & Extension.
- [71]
- [72]Matrix Certification Services were engaged by the builder to certify the works.
- [73]Mr Brett refers to an email he received on 30 May 2014 from the certifier at Matrix, Mr Laa Tay,[9] which provided as follows:
I can confirm that one of Matrix’s admin staff inputted the first plans received from Manson Homes into our computer system on 8th January 2014. These original plans showed a colour bond roof and on 17 January 2014 I wrote to Lee via email that I would confirm with him whether Town Planning would be required and will let him know within 2 days after discussing the matter with council. After discussing the matter with council, I then spoke with Lee on his mobile phone and confirmed to him that Town Planning would be required and that he will also need a qualified structural engineer to inspect the roof and tie downs due to changing it from tile to sheet metal roof.
On 28 January 2014, we inputted into our computer system amended plans showing the roof system will continue to be tiles. On 6 March 2014, I received a phone call from a concern neighbour regarding the roof being changed to sheet metal. I informed the concern neighbour that Matrix Certification Services did not approval the development to be sheet metal roof but tiles. Subsequently I contacted BCC again and they reiterated that a minor demolition application will be required for the change in roof material. Thereafter, I sent Lee an email on the 6 March 2014 informing him to obtain town planning and that Matrix cannot continue to approval this development without BCC’s approval for the change in roof material.
- [74]The builder sent Mr Brett an email on 29 January 2014 which provided:
Attached are the plan changes as requested by the building certifier.
The house has been assessed to require a relaxation in regards to a change of material on the roof (concrete tiles to corrugated iron).
I have changed the plan so that we can get the building approval today rather than wait the 3 weeks for the relaxation and subsequent building approval.
If it is acceptable to leave the concrete tiles on the roof then I will not make the application for relaxation while we are building and revise the roofing costs asap.
- [75]Mr Brett said in evidence that he had employed the builder to do all building work, including certification. He understood that all approvals were being handled by the builder.
- [76]He said that when he got the email from the builder on 29 January 2014 he had a brief look at it, but the builder did not call him to discuss it. At the time he was preoccupied with completing his Doctorate, and his wife was pregnant. It was only much later that he realised the gravity of what the builder had done.
- [77]He said that he did not make any elections as to the roof material. He denied that he agreed to any change to the plan so that it could go through Council. He denied that he had pressured the builder to put an iron roof on.
- [78]In relation to a conversation of 17 January 2014 alleged by the builder, he said that no such discussion with the builder took place as to changing the roof material. His evidence was as follows:[10]
Mr Kissane: Now, it’s the case, isn’t it, that in or around the 17th of January, Mr Manson had a conversation with you regarding the need to obtain a – an approval to allow the roof material – in relation to the roof material and that you agreed to change the plans to show the tiles so that the approval could go through?
Mr Brett: Absolutely not. No such discussion took place.
- [79]In his affidavit, Mr Brett strongly denies that he told the builder that he would agree to plan changes because the lease on their current property would run out if they had to wait for town planning approval. He notes that they had just entered into a six month fixed term rental agreement starting on 13 January 2014.[11]
- [80]Mr Brett’s summary of the installation of the metal roof is as follows:[12]
On or around the 21 February 2014, Mr Manson unlawfully demolished the existing tile roof at our property and installed the metal sheeting roof without any of the necessary consents or approvals, including demolition approval. Furthermore, the metal sheeting roof was installed in full knowledge that town planning was required. From receiving Mr Manson’s email on 29 January 2014 to the demolition of the tile roof and installation of the metal sheeting roof on or about 21 February 2014, there was no discussion with Mr Manson regarding town planning approval and neither Sarah nor I were in contact personally with the certifier as detailed above.
- [81]Mr Brett said in his affidavit that he received an email from Mr McPhee on 7 March 2014 informing him and Sarah of a quote from B Planned Pty Ltd, Town Planners (‘B Planned’) concerning a development application proposal for the extensions and roof material change. He said that his was the first correspondence he had received from the designer regarding the necessity for a Development Approval.[13]
- [82]Mr Brett said that he believed it was at that point that the builder ‘effectively absolved himself’ of all responsibility for obtaining the Development Approval, and that he and Sarah were left no choice but to attempt to initiate a Development Approval application through B Planned.[14]
The defective roofline
- [83]Mr Brett said in his affidavit that he noticed that the roofline didn’t look right in about late February 2014. He described these in his evidence as two massive bulges. He said that asked the builder numerous times to rectify the roof line.
- [84]Mr Brett says that he had a telephone conversation with the builder on 13 March 2014, when the builder informed him that he was going to “sheet up” the house. He arranged to meet the builder the next day to discuss the sheeting up.
- [85]Mr Brett says that in a meeting on 14 March 2014 between himself, his step-father Kevin O'Keefe and Mr Manson, that the questions of the roof line and the need for Development Approval were discussed. He said that Mr Manson said that he would rectify the roof line in due course; and that a Development Approval was necessary and that it was necessary for them to lodge an application as soon as possible.[15]
- [86]Mr Brett says that he received the Invoice for Stage 5 on 23 March, and rang Mr Manson on 28 March and stated that he could not pay the invoice for stage 5 until the defective roof line had been rectified.[16]
- [87]Mr Brett says that Mr Manson advised him on 28 March 2014 that the roof had been rectified, and sent him an email which attached part of an engineering roof frame inspection report by an engineer, Mr Cornell, dated 13 March 2014. Mr Brett says that Mr Manson did not reveal that the roof frame had failed the inspection.
Mr Fowler
- [88]Mr Fowler is a Town Planner and a director of B-Planned. He was originally engaged by Mr Brett in 2013 as to approval of a carport.[17]
- [89]He said that B-Planned was not part of any discussions regarding the change of roof material prior to 7 March 2014. On that date, Neo Building Design sent him an email requesting advice as to whether the removal of roof tiles would require Development Approval.
- [90]He contacted the builder to introduce himself. He subsequently provided advice to Mr Brett that the removal of the roof tiles would require a Development Approval, and provided Mr Brett with a fee proposal to undertake the necessary work to obtain approval for the partial demolition (removal of tiles) on 7 March 2014. On approximately 27 March 2014 Mr Brett gave B-Planned instructions to undertake that work. They were asked to cease work by Mr Brett around May 2014, and an application was never made.
- [91]Mr Fowler was asked about the email from Mr Laa Tay to the builder of 17 January 2014, and he described it as consistent with the process which would be required for changing a steel roof to a tile roof.
Mr Jones
- [92]Mr Jones is a builder who was engaged by the owners to give expert evidence as to:[18]
- Defective or incomplete work prior to ‘Enclose’ stage.
- Defective or incomplete work specifically relating to ‘enclose’ stage
- Defective work performed after ‘Enclose’ stage
- Process involved in installing the correct roof (terracotta tiled) to the property
- All work yet to be completed, including rectification work, so that job completion can be reached and Final Certification obtained.
- [93]He prepared a Report dated 28 June 2015. His conclusion in his report as to the enclosed stage was that the internal flooring was incomplete, that all defective work leading up to Enclosed Stage should be deemed ‘incomplete’, and he assumed that the stage had not been reached until defective work is rectified.[19]
- [94]His overall conclusion was that substantial sub-standard workmanship was evident throughout the property, and that in his professional opinion (due to the serious and expensive nature of rectification) that the entire extension needed to be demolished and started again.[20]
- [95]He was asked about the roof as constructed, and said that the roof line was unsatisfactory. He said a builder would know when putting up the framing as to the shape of the roof. He said that old houses can sag, especially on the ridges.
- [96]His opinion was that given so much roof framing was stripped back, that he did not know why the builder did not repitch the whole roof, and that it may not have cost any more to repitch the roof.
- [97]He described the roof as having a ‘huge hump’ in the hip, that it would not have been designed like that, and that he considered it unsatisfactory.
Other expert evidence
- [98]
- [99]
- [100]It is necessary to look at the individual reports of the experts in order to understand the conclusions summarised in the joint experts report.
- [101]Mr Davies in his report addressed the enclosed stage question in one paragraph as follows:[25]
Page 35 of the signed HIA contract nominates the works that comprise the Enclosed Stage. It is my opinion that Manson Homes have completed all of the works for the enclosed stage.
- [102]Mr Thornley addressed the enclosed stage question more particularly as follows:
In relation to the enclosed stage the roof covering required to meet the approved plans has not been installed, the lower level brickwork to the external walls has not been installed and the windows and doors shown on the plans including the high light windows have not been installed and therefore the requirement of the enclosed stage may not have been met.
Evidence
- [103]The owners did not obtain a statement from, or call, the certifier Mr Laa Tay. They said that they have been unable to locate him. The builder also did not or obtain a statement from him, or call him.
- [104]Neither party took issue with the course of events involving Mr Laa Tay, and I do not take any inference from his not being called by either party, particularly when it appears that he cannot be located.
- [105]Similarly, neither the owners or the builder called the designer, Mr McPhee. The emails and communication from McPhee were not in contention. I do not take any inference from his not being called by either party.
The Builders submissions
- [106]The builder submits that there were two reasons why the termination of the Contract was wrongful:[26]
8. The first reason that the termination was wrongful is that the respondents failed to satisfy the requirements of Clause 27.4 of the Contract. This is because the Notice to Remedy Breach document that the respondents gave to the Applicant was ineffective pursuant to Clause 27.7 of the Contract because the Respondents were themselves in substantial breach of the Contract, and that they were not permitted to issue the Notice to remedy breach to the Applicant.
9. The second reason that the termination was wrongful is that, as a matter of fact, the Applicant was not in substantial breach of the Contract.
- [107]The builder gave the owners a progress claim for the 5th stage (Enclosed Stage) on 23 March 2014. The owners did not pay that claim within 5 working days of receiving it. There is a dispute as to whether the builder had reached the enclosed stage.
- [108]The builder submits that the requirements for the enclosed stage have been completed.
The Owners submissions
- [109]The owners submit that it is obvious that the work required by the Contract required a Development Approval and a Building Approval,[27] and that it is uncontroversial that the builder did not:[28]
- Advertise pursuant to the Demolition Code and obtain approval from the Brisbane City Council to replace the tile roof with a steel roof;
- Obtain a development permit, by way of Development Approval or Building Approval, from the Brisbane City Council or the Certifier, Matrix Certification Services, to commence work and install a steel roof on the property.
- [110]The owners submit that obtaining Development Approval falls within the things described by Item 5A of Schedule 1 and clause 2.3 of the Contract as having to be obtained by the nominated person, and that it is an approval (or consent or permit) required by a ‘statutory or other authority’ as defined in clause 37 of the Contract.[29]
- [111]The owners submit that the original plans for the renovation included removing the existing tile roof and replacing it with a steel roof, and that it was the builder’s obligation to apply and pay for the applications for the approvals,[30] and that there was no variation of the written contract so as to make the owners become responsible for obtaining a Development Approval or Building Approval.[31]
- [112]The owners submit that at some point between 18 January 2014 and 29 January 2014, the builder knew that a Development Approval and Building Approval were required to have the roof comply with the Contract plans and have a steel roof instead of the existing tile roof, and that:
83. At this point, the (Builder) unilaterally decided:-
(a) Not to advertise pursuant to the Demolition Code and obtain approval from the Brisbane City Council to replace the tile roof with a steel roof;
(b) Not to apply for a Development Approval; and
(c) To change the plans for the works so as to leave the roof with tiles.
- [113]The owners argue that the builder knowingly then proceeded to install a steel roof despite being aware that to do so was contrary to the certifier’s building approval:
86. There is no dispute that on 29 January 2014 the (builder) resubmitted amended plans to the certifier and that those plans stated that the tiles were to remain. It is clear from the evidence at the hearing that the (builder), after receiving this Building Approval from the certifier for the amended plans, subsequently removed the tiles, or caused them to be removed, and installed a steel roof contrary to the certifier’s building approval.
- [114]The owners contend that they did not know about the issue with regards to no approval being obtained by the builder to install the steel roof until the builder forwarded them an email from the certifier on 6 March 2014,[32] and that it was not until or about 7 March 2014 that the owners received contact details and commenced to discuss the steel roof issue and Development Approval requirement with the town planner, and ultimately on or about 14 March 2014 retained the town planner.
- [115]The owners summarise the situation that the builder placed himself in as follows:[33]
121. As at the end of January 20-14, the (builder) had in his possession a set of plans approved by the certifier that required the roof to be tiled. He also had a contract that required a steel roof and he was aware that such a roof required a Development Approval and a Building Approval. Thus, he was obliged by law to undertake the construction work leaving the existing roof as a tile roof and any new roof structure also had to be tiled. On the other hand, his contractual obligation remained the same as it had always been, i.e. to remove the existing tile roof and replace it with a steel roof and to use steel roofing for any new construction. To be able to do that lawfully, the (builder) would have had to obtain a Development Approval and a Building Approval.
122. It may be appreciated that the (builder) was in a dilemma. The situation cried out for some calm, levelheaded discussions and with appropriate concessions being made. Many of any concessions would have had to come from the (builder) eg. that he had obtained certification of the construction by stating that the roof would be tiled and that he was responsible for applying for a Development Approval and a Building Approval for the steel roof if the (owners) insisted upon a steel roof being placed on the house.
- [116]The owners say that the actions of the builder in removing the tile roof and installing a steel roof by 20 February 2014 were unlawful.[34]
- [117]The owners acknowledge that they certainly wanted a steel roof on their building, and that it might even be said that they insisted on it.[35] The builder says that he was instructed by Mr Brett to install the iron roof instead of the tile roof despite there being no planning approval, but the owners deny giving any such instruction.[36]
- [118]The summary of the owners’ submissions is:[37]
284 It is submitted that for the reasons outlined in these submissions the (owners) were entitled to terminate the Contract with the (builder) on 28 April 2014 because:
- (a)The (builder) had breached a condition of the contract, ie. Not applying for and obtaining (at least so far as was possible) the relevant consents or approvals and not performing works under the Contract in accordance with all relevant laws and legal requirements;
- (b)The (builder) had repudiated the Contract by insisting on complying with it in a manner inconsistent with the obligations it imposed and upon his own idiosyncratic and fanciful interpretations of it;
- (c)Suspending the work when he was not entitled to because he had:
(i) Failed to reach the frame stage;
(ii) Failed to reach the enclosed stage;
- (d)He did not comply with the Notice to Remedy Breach served on him on 4 April 2014 within the time specified in the Contract, thus giving the (Owners) the contractual right to terminate the Contract
Issues as to the enclosed stage being reached
- [119]The builder submits that whether a stage was reached is not the subject of opinion evidence, but instead is a matter for the Tribunal to apply the facts as found to the definition.[38]
- [120]The builder submits that there is nothing in the definition of the Enclosed Stage which imposes a requirement that the enclosed stage works are to be free from defects, and that it is not until the Contractor reaches Practical Completion that the works are required to be free from defects, and even then minor defects are permissible.[39]
- [121]The builder submits that for the owners to demonstrate that the Enclosed Stage has not been reached they must satisfy the Tribunal that at least one of the following five requirements have not been met:[40]
- External wall cladding is fixed.
- Roof covering is fixed
- Structural flooring is laid
- External doors are fixed
- External windows are fixed.
Incomplete work – Structural flooring
- [122]The builder acknowledges that photograph 16 on page 19 of Mr Jones’s report shows that a small number of floor boards have not been laid in bedroom 3.[41] He submits that the evidence of Ms Purnell is consistent with his version of events that there was a change to the location of the wardrobe which impacted upon his flooring contractor’s ability to lay the remaining few floorboards in bedroom 3.
- [123]The builder submits that that there are four compelling reasons as to why the missing floorboards in bedroom 3 do not affect the builder asserting that the structural flooring has been laid:[42]
- The (Owners) cannot take advantage of their own wrong
- The doctrine of substantial performance applies
- The maxim de minimis non curat lex applies; and
- There is no evidence before the Tribunal that would permit the Tribunal concluding that the omitted flooring in bedroom 3 is structural flooring.
- [124]Taking advantage of their own wrong:- He alleges that the owners breached the ‘prevention principle’, that neither party shall do anything to hinder the other from performing the contract; and that by making the late changes to the wardrobe in bedroom 3 the owners are not permitted to take advantage of that breach.[43]
- [125]Substantial performance:- the builder submits that the extent of the flooring that has not been laid is very minor, and that the absence of the few final boards is purely a trivial failure such that the doctrine of substantial performance may be relied upon by the builder.[44]
- [126]De minimis non curat lex:- the builder submits that the extent of the flooring that has not been laid is so slight that the disparity between what has been done and what was required is negligible or trivial.[45] The maxim provides that the law will not cure trifling matters.
- [127]Structural flooring:- the builder submits that in order for the Tribunal to be satisfied that the omitted floorboards formed part of the structural flooring, the Tribunal needs to be satisfied that the floorboards in bedroom 3 performed a structural role, and that this requires expert evidence.[46]
Defective work
- [128]Roof DA:- the builder submits that the contract calls for an iron sheeting roof to be constructed in accordance with the plans that form part of the contract, and that the builder has constructed the roof using iron sheeting in accordance with those plans[47]
- [129]Hip on roof:- The builder submits that the alleged defect relates to the frame stage, not the enclosed stage; that the section of roof was pre-existing and not part of the works under the contract; and that the concern with the hip is aesthetic not structural.[48]
- [130]Flooring incorrectly laid:- the builder submits that the contractual requirements for the Enclosed Stage only require that the structural flooring has been laid to satisfy the contractual requirements, and that the alleged defects raised by Mr Jones have no relevance to the enclosed stage and must be ignored for the purpose of assessing whether the enclosed stage has been reached.[49]
- [131]Decking boards:- Mr Jones identifies defects regarding the decking. The builder submits that those alleged defects have no relevance to the Enclosed Stage and must be ignored for the purpose of assessing whether the Enclosed Stage has been reached.[50]
- [132]External cladding incorrectly installed - Mr Jones sets out defects regarding the external cladding, that there are horizontal cracks caused by incorrect placement of sheets, and that the texture coat finish is poor. The builder submits that the contract only requires that the external cladding be fixed. He similarly submits that those alleged defects have no relevance to the Enclosed Stage and must be ignored for the purpose of assessing whether the Enclosed Stage has been reached.[51]
Discussion as to Enclosed Stage
- [133]For a stage to be reached, it must be conducted in accordance with the Contract and the approved plans, and be completed to a point where it can achieve its designed function.
- [134]The definition of ‘enclosed stage’ refers to the roof covering being fixed. The expression ‘the roof covering’ must refer to the roof covering provided for in the Contract and the approved plans. In the normal course of events it would be anticipated that the approved plans and the Contract (or amended Contract) would be in accordance with each other.
- [135]At the time of the construction of the metal roof in February 2014 the only approved plans were those showing a tile roof (the plans having been amended, and approved as amended, in January 2014). The builder cannot be said to have completed the roof covering in accordance with the approved plans when he installed a completely different material.
- [136]The engineer, Mr Connell, advised the owners on 16 April 2014 that the tie downs which were required for the metal roof had not been completed, and that the engineer had not completed subsequent inspections as the necessary development approvals had not been obtained.[52]
- [137]Therefore, at the time of the builder’s claim for completion of the enclosed stage, the roof covering was not in accordance with the plans at the time, and did not have appropriate engineering and development approval.
Were the owners entitled to terminate the contract?
Development Approval
- [138]The history of the construction of the roof in particular is conflicting. The builder says that the owners knew that the plans were to be amended in January 2014 and instructed him to change them from a metal roof to a tile roof.
- [139]That version is strongly contested by Mr Brett who says that at no time did he agree to change the plans from a metal roof to a tile roof. Ms Purnell says she did not give any such agreement either.
- [140]Why were the plans changed in January 2014? The answer seems to be that Mr Laa Tay had at that time identified that there was a problem with work proceeding to install a metal roof without Development Approval. The builder was onsite and conducting works, he was in between stages. He gives the impression that he was confident that a Development Approval would be achieved, but that he was concerned that might take three months and delay the progress of the works.
- [141]The implication is that the builder was anxious to proceed with the work, and to obtain the next stage payment, without a three month delay arising. The strong suggestion from the circumstances and the timing, and from his own evidence, is that the builder chose to take a risk on the Development Approval coming through and retrospectively authorising the installation of the metal roof.
- [142]Unfortunately, the development approval did not come through, and matters came to a head when the builder sought to be paid the enclosed stage claim.
- [143]There is no evidence that the owners, who had limited building experience, were aware of the risks of proceeding to install a metal roof in the absence of a Development Approval.
- [144]The builder however could be expected to be aware of the risks. The builder had contact with the Town Planner, Mr Laa Tay, and was far more familiar with the building and approvals process than the owners.
- [145]The most probable scenario is that the builder was the one who made a conscious decision to firstly amend the plans so that the Certifier would approve them and he could continue with the work; and then knowingly installed a completely different roof from the original plans, in the hope that the Development Approval would come through, and the owners would then get the metal roof they wanted all along.
- [146]Unfortunately, events did not transpire as the builder hoped. No Development Approval was achieved, and the owners were left with a structure with a metal roof that was not approved.
- [147]I am not satisfied that the owners did at any time agree to amending the plans to show a tile roof. They clearly wanted a metal roof all along. If the question had been clearly put to them in January 2014 as to whether they agreed to amending the plans to show a tile roof, they would have asked many questions, and there is no evidence that they did so.
- [148]Further, the later behaviour of the owners suggests that they would have immediately sought advice from other persons, as they did when the problem came into focus in March 2014, such as from a Town Planner. That did not occur, on their evidence, in January 2014, which reinforces the strong implication that the owners were oblivious of both the fact, and the consequences, of the changing of the plans by the builder.
- [149]A different course of action was open to the builder when he became aware in January 2014 of the need to obtain Development Approval – instead of proceeding to amend the plans, and to then construct a metal roof without approval, he could have invoked Clause 15 of the Contract as to unforeseen circumstances and have asked for a variation.
- [150]The builder says that a variation was not issued when the work was done because of urgency. The Contract provides in Clause 19.6 that:
19.6 Notwithstanding the above, the contractor is not required to create a variation document before carrying out the varied work if that work is required to be carried out urgently and it is not reasonably practicable in the particular circumstances to do so.
- [151]However, he does not identify any basis for urgency. The building apparently already had a satisfactory tile roof on it in January, so the building was not exposed to the elements. Further, there is no correspondence from the builder referring to urgency at the time, and no reason shown as to why it was not reasonably practicable to issue a variation before commencing the works.
- [152]The builder’s evidence as to issuing a variation was as follows:[53]
Member: Did you advise the client that as a matter of urgency there was some work you were having to do that would generate a variation, that you weren’t able to comply with the usual procedure as to issuing a variation before the work was conducted, approved? – I did it at a later date, yes. At the date of the invoice.
No, at the time of doing the urgent work did you give any notice to the client? –- No, not on that particular day because it had to happen that day so I wasn’t in a position to be at the office and, as I say, we did not know the amount of work it was going to undertake, the amount of hours it was going to undertake.
So it was about a month later that the client was advised of the variation? – No. That work was ongoing. So it was – no. It would have probably only been about three weeks. As the roof was installed, some of the strapping was put in place, ready, and then the work was completed, sort of, towards the end of – it would have been in March. So we did the works over a period of two weeks. We did what we needed to do straight away, to set up for it, where we couldn’t get back to that area later and then we completed it at a later date and that’s when I issued the variation, when I knew what the costs were.
- [153]The absence of any variation being issued in January 2014 at the time the plans were amended casts great doubt on the proposition that the amending of the plans was done in a regular and authorised fashion. Such a significant change would certainly require a variation before commencing the work and as soon as is reasonable, as provided for in Clause 19 of the Contract.
- [154]The Contract plainly requires the builder to obtain Development Approval. The builder sent the owners a consent form which specifically authorised him to obtain Development Approval ‘for the purposes of Renovation and Extension’.
- [155]The entire course of conduct until 15 March 2014 shows that Mr Manson was the one inquiring as to development approval, and discussing it with Matrix.
- [156]I am satisfied that the version of the owners is the more understandable and logical version, and more consistent with the course of events. I prefer the evidence of Mr Brett and Ms Purnell where their version of events conflicts with that of Mr Manson.
- [157]I therefore do not accept that the builder was instructed by the owners to amend the plans in January 2014.
- [158]I am satisfied that the builder changed the plans without obtaining approval from the owners.
- [159]The builder has submitted that the enclosed stage was reached in regards to the fixing of the roof covering as the builder fixed a metal roof. That submission is difficult to reconcile with the evidence of the builder that the plans were amended in late January, on the express instructions of the owner, from a metal roof to a tile roof.
- [160]The effect of amending the plans by consent would be to amend the Contract. If the argument of the builder, that the plans were changed by agreement in January to a tile roof, is accepted, then in proceeding to install a metal roof, the builder was contravening the amended contract, not complying with it. The submission of the builder that the roof covering was fixed in accordance with the Contract is then unsustainable.
- [161]The builder submits that it is not open to the Tribunal to find that the builder has failed to comply with any law or lawful requirement of any statutory or other authority,[54] as evidence was not led at the hearing that the property is located within the Character Residential Area, or within a Demolition Control Precinct under the Brisbane City Plan, or falls within the Grange District Local Plan area.
- [162]Those submissions of the builder do not attract weight, as no witness took issue with any of those categorisations at any stage. It is stated in the evidence of Mr Fowler that Development Approval was required, and that evidence was not challenged.
- [163]The owners submit that the property falls within the relevant planning schemes:[55]
21. The residential address of the subject land is 16 lind Street, Newmarket Qld 4051, more fully described as Lot 81 on RP50454 and is located in the Brisbane City council local government area. Planning Scheme map 1 shows the site being located in the Character residential Area, while Planning scheme Map 3 shows the site as being in a Demolition Control Precinct (DCP) under the City plan. Planning Scheme Map 3 also shows that the subject site falls in the Grange District Local Plan area.
- [164]
11. In order to ensure what we were proposing would be acceptable by Council we reviewed the plans and sent an email to Council for advice. Based on the advice received from Council we advised the client that the proposal would not be accepted by the RiskSMART team and that we would need to lodge the application through the normal process.
- [165]The builder in his Submissions in Reply questions the correctness of the alleged requirements of the Brisbane City Council[58] as attested to by the witnesses discussed, and submits that:
55. Without satisfying the threshold requirements to enliven the Demolition Code there is no substance to the Respondents’ assertions that the Brisbane City Plan and various provisions of the Building Act and SPA lead to the ‘obvious’ conclusion that ‘the work required by the Contract required a Development Approval and a Building Approval’.
- [166]If the builder considered that the interpretation of the requirements of the Council, firstly by Mr Laa Tay, then by Mr Fowler, were not well founded, then he could have taken up those issues with them at that time when he was informed of the issues.
- [167]That advice, as to the Character Residential Area, and as to the Demolition Code, was apparently accepted by both the owners and the builders as professional advice at the time of the events.
- [168]If the builder did not accept the professional advice of Mr Laa Tay in January 2014, that there was a regulatory requirement to obtain approval to change to a metal roof, then why would the builder amend the plans in January 2014 at all? The builder says that the owners agreed to amend the plans, but why would he even ask them to do so, or agree to do so himself, if he did not accept that there was a requirement to do so? Clearly the builder did accept that the work required by the Contract to install a metal roof required a Development Approval and a Building Approval.
- [169]It is not open to the builder to now look back and to question the professional advice upon which both parties relied, in analysing their conduct under the Contract at the time, and to now question whether there is a demonstrated requirement for development approval.
- [170]I am comfortably satisfied that there is a sufficient basis for the Tribunal to find that there was a breach of relevant laws or lawful requirements, based upon the evidence, and the conduct and statements of the parties, and of the various certifiers and town planners who were involved.
Estoppel
- [171]The builder submits that whilst the express provisions of the Contract did provide for him to obtain the relevant planning approvals, that the owners are estopped from relying on the provision placing the obligation on to him with regard to any planning approvals associated with the roof, or that he breached clauses 1.1(b) and 11.1.[59]
- [172]The basis of the alleged estoppel is that the owners made representations upon which the builder relied to his detriment.
- [173]One alleged representation is as to Clause 6.3 of the Contract which provides that the owners warrant that all easements, covenants, caveats and zoning restrictions that may affect the works being carried out and constructed on the site are disclosed in item 8 of the Contract.
- [174]The owners submit that a failure to comply with the warranty in Clause 6.3 is not a representation:[60]
235 A breach of the obligation to list all the ‘easements, covenants, caveats and zoning restrictions’ of which they were aware might entitle the Applicant to claim any damages referable to that breach. Damages is the remedy applicable to a breach of warranty. However, it does not constitute a representation, let alone a representation that leads to an estoppel. The Applicant has not made any claim for such damages. His sole contention is that an alleged breach of this warranty leads to an estoppel against the respondents.
- [175]I accept that submission of law. The failure to identify a zoning restriction in Item 8 of the Contract is not a representation. A failure to comply with Clause 6.3 would act as a breach of warranty. I do not consider that such a failure would give rise to an estoppel.
- [176]The other alleged representation is that Mr Brett instructed the builder to install the iron roof instead of the tile roof, despite there being no planning approval.[61]
- [177]If the owners’ version of events is accepted, then no such representation can be found, and no estoppel can arise. As I accept the version of events of the owners, as previously discussed, which is that no instruction was given by the owners to the builder to install the iron roof instead of the tile roof despite there being no planning approval, no estoppel arises.
Reliance on own wrong
- [178]The builder submits that the owners cannot take advantage of their own wrong; and that by failing to disclose to the builder the zoning restrictions relating to the need to obtain a planning permit for the roof, the owners were in breach of clause 6.3 of the Contract.
- [179]The evidence of the owners however, which I accept, is that they were not aware until 7 March 2014 that any zoning, or other, restrictions were in place which resulted in planning approval being required. They therefore did not fail to disclose to the builder any relevant matter of which they were aware, and committed no wrong.
- [180]I am satisfied that the builder proceeded on his own volition to conduct the roofing works by fitting a metal roof, without first obtaining appropriate statutory approval, which was required, when it was his obligation to obtain such approval.
Defects:-
Hip Roof
- [181]The defect as to the hip of the roof is clearly visible in the photographs. The contract provides for the construction of the new sections in continuation with the pre-existing roof. The new work needs to be done in a good and proper manner so that the complete finished product is both structurally and aesthetically satisfactory.
- [182]The work as to the hip is clearly not visually satisfactory. No customer would be happy to accept the roof finished in that way. It is unrealistic to say that aesthetics do not matter, because, for example, if the owners were ever to try and sell the house, then any prospective purchaser would immediately see the defective hip and may be dissuaded from a purchase altogether, or want the price reduced. The owners are not required to accept work that is obviously poorly executed, simply because they cannot establish that it is structurally unsound.
Timber flooring
- [183]Mr Jones identified defects as to the laying of the timber flooring as to: excessive ground moisture, lack of adequate ventilation, low ground clearance beneath the floors, an absence of gaps at the perimeter of the flooring and an absence of appropriate expansion joints across the width of the flooring, and failure to allow the flooring adequate time to acclimatise prior to laying.
- [184]I accept the evidence of Mr Jones, and prefer it to the evidence of the builder where it may conflict.
- [185]The fixing of the internal flooring forms part of the Enclosed Stage. It is not sufficient that the floor is merely fixed – it must be fixed in a good and proper way. The submission of the builder, that these defects must be ignored, overlooks the implicit and overriding basis of the contract that the work will be performed in a good and proper way. The builder is not able to claim for the Enclosed Stage until its components are properly completed.
- [186]I accept the evidence of Mr Jones that the internal floorboards have not been completed properly.
- [187]The builder submits that the defects as to the floorboards are minor, that the floorboard work was substantially completed, and that the owners prevented the work being completed.
- [188]I am not satisfied that the floorboard work can be described as minor, in that any absence of floorboards poses an obvious safety risk. If the work was minor, then the proper course for the builder would have been to quickly complete it before submitting the Enclosed Stage claim.
- [189]Whilst the owners did instruct a change as to the wardrobe location in consultation with the builder, I am not satisfied that their doing so would have unduly affected the flow of the work. If their actions were impeding the builder, then the proper course for the builder would have been to issue a variation notice or a claim for time extension accordingly, but he took neither action, which suggests that the builder was not in fact impeded by the owners.
- [190]The builder raises issues as to when flooring is structural. There is no definition in the contract. The expression however must refer to a surface that bears weight or stress, and forms part of the overall structure of the building.
- [191]I find that the internal timber flooring can properly be described as structural flooring, as it is permanently attached to the joists and bearers and forms part of the overall structure, and would come within the Enclosed Stage definition; that the defects are not minor, and that the owners are not precluded from raising objection due to their own actions as to the change of wardrobe location.
External timber decking
- [192]The builder says that the external decking boards are not defective, and do not fall within the Enclosed Stage definition. It is unclear whether the external decking boards are an integral part of the building structure, or are a separate section attached to the perimeter of the structure.
- [193]In light of that uncertainty, I am not satisfied that the external timber boards do fall within the Enclosed Stage definition.
External Cladding
- [194]The owners have raised issues as to the quality of the work as to the external cladding. That evidence does not extend to the overall quality of the work or the structural aspects of the cladding or fixing, and relates to defects as to gaps and as to the coating, which could be rectified at later stages. The cladding had been fixed, and the defects are not shown to be of such a magnitude where it can be found that the fixing of the cladding was not done in a good and proper manner.
- [195]I am therefore not satisfied that the defects as to the cladding prevent the making of the Enclosed Stage claim.
External windows and doors
- [196]Mr Jones identifies a number of defects as to the external windows and doors. These were that the wrong doors were installed in some locations, that the doors and windows have clear gaps between them and the HardiTex Base sheeting, that they do not have any galvanised metal flashing, and that they have insufficient fall for a kitchen window.
- [197]The builder submits that the Enclosed Stage only requires that the windows and doors be fixed.
- [198]There is disagreement as to whether the windows and doors as provided for in the plans were installed.
- [199]Mr Jones notes in his report:[62]
The large glass door leading onto the Alfresco from the Dining is to be a 24-51 bi-fold with highlights over (see Building Approved Plans WDB-4 & 8). The installed door is a sliding/stacking door with no highlights over.
Similarly, the door leading onto the Alfresco from bed 3 is to be a 21-27 bi-fold. The door installed is a sliding door.
On Plan WDB-08 the side and rear elevations state: ‘Timber Framed Windows” and ‘Timber Framed Bi-Fold Doors with highlight Windows above”. The windows and doors installed by the builder, Mr Manson, are aluminium.
- [200]The builder refers to an email from Mr Brett dated 23 July 2013 which refers to ‘stacker doors out to alfresco rather than bi-folds’. However, as the owners submit, that email was before the Contract was entered into, and no Variation was entered into. The Contract refers only to the plans as identified by Mr Jones.
- [201]
..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 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 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.
- [202]I accept the evidence of Mr Jones as to the plans attached to the Contract. The windows and doors that were supplied cannot be said to be the windows and doors required to be installed under the Contract.
- [203]The builder sought to distinguish the present situation from that in the decision referred to because there the builder had merely boarded up the cavities. He also queries why the owners had not agitated earlier that the windows and doors were wrong before engaging Mr Jones.
- [204]The comments of McGill DCJ above are relevant as he refers to ‘the windows and doors required to be installed under the Contract’. The owners do not accept that they agreed to any change, and there is no any variation to that effect. I am not satisfied that the owners did agree to any such change.
- [205]I therefore accept that the element of the work as to the windows and doors required for the Enclosed Stage claim was not satisfied.
Roof gutter
- [206]Mr Jones refers to the defects as to the roof gutter. The builder submits that the roof gutter is not relevant to the requirement of the Enclosed Stage that the roof covering be fixed.
- [207]The definition of as to the fixing of the roof covering in Schedule 2 of the Contract requires the roof covering to be fixed, but specifically omits some associated components such as soffit linings or roof pointing. There is no mention of guttering in that definition.
- [208]In the absence of any specific mention of guttering, and noting that some components of the roof are not included, I am not satisfied that guttering does fall within the Enclosed Stage definition.
Failure to reach enclosed stage
- [209]I find that the builder had not reached the enclosed stage at the time he issued the Claim for that stage, in respect of the roof covering, the internal timber flooring, and the external windows and doors, as discussed above.
- [210]Accordingly, the builder was not entitled to suspend work on the basis of non-payment of the Enclosed Stage Claim by the owners, as that payment was not claimable under the Contract at that time.
Breach of Contract
- [211]The owners submit that in the absence of the required approvals the builder was not entitled to start work on the property or replace the tile roof with a steel roof whether pursuant to the Contract or at law; and that the builder was therefore in breach of the contract and law, and that the owners were entitled to terminate the Contract.
- [212]I accept the submission of the owners that the builder was in breach of the Contract by replacing the tile roof with metal roof without first obtaining the required approvals.
- [213]The builder submits that a breach of clauses 1,1(b), 2.3 and 11.1 is not a breach of a condition; or it has not been shown that the particular requirements alleged actually exist; or that a breach of those clauses was not a sufficiently serious breach.[64]
- [214]I have found that the obtaining of a building approval from the Certifier, to undertake the works with a tile roof, was not done with the owners’ knowledge and agreement.
- [215]The builder refers to, and accepts, the submission of the owner that clause 1.1(b) of the Contract mirrors statutory warranties implied by the Domestic Building Contracts Act 2000 (Qld) (DBC Act).[65] However, the owners also submit that even the statutory warranty given by the DBC Act, is in fact a statutory condition despite the term ‘warranty’.[66]
- [216]The builder submits that whether a provision of a contract is a condition is a matter of interpretation having regard to the words of the relevant clause.[67] The builder then queries why Parliament only categorised this implied term as a warranty (giving a right to damages rather than a right to terminate) and submits that clauses 1.1(b) and 11.1 should similarly properly be categorised as warranties.
- [217]The importance of the reference in the DBC Act is that even if such a provision was not included in the contract, that it would be imputed into the Contract. It is open to parties to contract for a term to be a condition notwithstanding that the Act may refer to them only as warranties. The Contract is quite explicit in providing in both clauses 1.1 and 11.1 for compliance with requirements of any statutory or other authority as actions that the Contractor ‘must’ take.
- [218]The obtaining of approvals to allow work to be lawfully performed is fundamental to performance of a building contract. The Contract provides that it is something the builder must do. A failure to obtain approvals is clearly a substantial breach, as work cannot be lawfully performed without first obtaining appropriate approvals.
- [219]The builder submits that non-compliance with the building certifiers building approval has not been shown, and that it is not shown that the evidence supports the conclusion that by the builder removing the tiles (or causing them to be removed) and installing the metal roof, he acted contrary to the certifier’s building approval.[68]
- [220]The positive obligation is on the builder however to show that he did comply with all requirements – in the absence of such evidence, the conclusion that he did not do so, by constructing a different roof structure with different material, is compelling. I am satisfied that the builder has not obtained building approval as required.
- [221]The owners submit that the builder repudiated the contract by his conduct giving rise to rescission based on the alleged breach of a condition. The builder submits that this argument is totally inconsistent with the owners exercising the right to terminate the contract based on an express term of the Contract, and that having affirmed the Contract by issuing the Notice to remedy breach and the Notice of Termination, it is not then open to the owners to attempt to accept the builders alleged repudiatory conduct and rescind the contract.[69]
- [222]I am not satisfied that repudiation of the Contract by the builder is shown. The builder evidenced an intent to continue and enforce the contract, albeit based upon his interpretation of the responsibility to obtain approvals and consents, and his interpretation of whether the enclosed stage had been reached.
- [223]I do find that there was a substantial breach of a condition of the Contract by the builder, by not applying for and obtaining the relevant consents or approvals, and not performing those works under the Contract in accordance with all relevant laws and legal requirements.
- [224]I find that the builder was in substantial breach of the Contract by failing to comply with his obligations under clauses 1.1 and 11.1; that the owners were entitled to give a notice to remedy breach under clause 27.1 of the Contract; and that the owners were entitled to terminate under clause 27.4 upon non-compliance with it.
Conclusion
- [225]I find that:
- (a)It was the duty of the builder pursuant to clauses 1.1 and 11.1 of the Contract to obtain all required approvals and consents, and that he failed to do so in relation to the metal roof which he installed.
- (b)The failure of the builder to obtain all required approvals and consents was a substantial breach of the contract.
- (c)The builder had not properly completed the works required to complete the Enclosed Stage, and was not entitled to claim for the Enclosed Stage.
- (d)The owners were not required to pay the progress claim for the Enclosed Stage Claim at the time it was made.
- (e)The builder was not entitled to issue the Notice of Suspension of works on 2 April 2014.
- (f)The owners were entitled to issue the Notice to Remedy Breach dated 4 April 2014.
- (g)The builder did not comply with the Notice to Remedy Breach.
- (a)
- [226]I accordingly find that the owners were entitled to terminate the contract on 28 April 2014 based upon:-
- (a)The breach of the contract by the builder as to obtaining relevant consents or approvals; and
- (b)The suspension of work by the builder when he was not entitled to do so because the Enclosed Stage had not been reached (due to the failure to conduct the works that fell within the definition of Enclosed Stage in a complete and good and proper manner as to the roof covering, the internal flooring, and the external windows and doors); and
- (c)The failure of the builder to comply with the Notice to Remedy Breach dated 4 April 2014.
- (a)
- [227]I accordingly declare that the Contract, between Lee Manson trading as Manson Homes and Stewart Brett and Sarah Purnell dated 29 November 2013, was validly terminated by Stewart Brett and Sarah Purnell on 28 April 2014.
Footnotes
[1] Direction 6 dated 30 September 2014.
[2] Transcript of Proceedings 1- 42 lines 6-34.
[3] Transcript of Proceedings 1-37 line 9.
[4] Ibid 1-47 lines 23-39.
[5] Affidavit of Stewart Brett filed 6 October 2015 at [13].
[6] Ibid at[14].
[7] Ibid at [23].
[8] Affidavit of Stewart Brett filed 6 October 2015 at [33].
[9] Ibid at [37].
[10] Transcript of Proceedings 1-59 line 19.
[11] Affidavit of Stewart Brett filed 6 October 2015 at [54].
[12] Ibid at [77].
[13] Affidavit of Stewart Brett filed 6 October 2015 at [88].
[14] Ibid at [90] – [91].
[15] Ibid at [96].
[16] Ibid at [101].
[17] Affidavit of Brodie Fowler dated 19 December 2014.
[18] Report of Greg Jones dated 28 June 2015 at page 1.
[19] Ibid at [4.2.2].
[20] Report of Greg Jones dated 28 June 2015 at [4.6].
[21] Report of Michael Davies Consulting Pty Ltd dated 18 June 2015.
[22] Report of WT Partnership Aust Pty Ltd dated 29 June 2015.
[23] Joint experts report at [11].
[24] Ibid at [12].
[25] Report of Michael Davies Consulting Pty Ltd dated 18 June 2015 at 6.
[26] Applicant’s submissions filed 27 January 2016 at 4.
[27] Respondents’ closing submissions filed 25 February 2016 at [31].
[28] Ibid at [33].
[29] Respondents’ closing submissions filed 25 February 2016 at [49].
[30] Ibid at [72].
[31] Ibid at [76(i)].
[32] Ibid at [100] – [101].
[33] Respondents’ closing submissions filed 25 February 2016 at [121] – [122].
[34] Ibid at [127].
[35] Ibid at [128].
[36] Ibid at [246] – [247].
[37] Ibid at [284].
[38] Applicant’s submissions filed 27 January 2016 at [24].
[39] Ibid at [66], [70].
[40] Ibid at [22].
[41] Ibid at [35].
[42] Ibid at [42].
[43] Applicant’s submissions filed 27 January 2016 at [49].
[44] Ibid at [51].
[45] Ibid at [55].
[46] Ibid at [59].
[47] Ibid at [78].
[48] Ibid section 2.4.2, 17-18.
[49] Ibid at [97].
[50] Applicant’s submissions filed 27 January 2016 at [104].
[51] Ibid at [110].
[52] Ibid at [125].
[53] Transcript of Proceedings 1-44 line 35 to 1-45 line 4.
[54] Applicant’s submissions filed 27 January 2016 at [167].
[55] Respondents’ closing submissions filed 25 February 2016 at [21].
[56] Statement of Brodie Fowler dated 19 December 2014 at [9].
[57] Ibid at [11].
[58] Applicant’s submissions in reply filed 6 April 2016 at 3.1.2.
[59] Applicant’s submissions filed 27 January 2016 at [169].
[60] Respondents’ closing submissions filed 25 February 2016 at [235].
[61] Applicant’s submissions filed 27 January 2016 at [174].
[62] Report of Greg Jones dated 28 June 2015at [4.1.15].
[63] Thompson Residential Pty Ltd v Hart & Anor [2014] QDC 132 at [37].
[64] Applicant’s Submissions in Reply filed on 6 April 2016 at [22].
[65] Ibid at [80].
[66] Respondents’ Closing Submissions filed 25 February 2016 footnote 9.
[67] Applicant’s Submissions in Reply filed on 6 April 2016 at [81].
[68] Ibid at [103].
[69] Applicant’s Submissions in Reply at [184].