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Pollock v Queensland Building and Construction Commission QCAT 286
Pollock v Queensland Building and Construction Commission  QCAT 286
Sharon Glenys Pollock
Queensland Building and Construction Commission
Martin Stephen Rutter
General administrative review matters
10 June 2016
17 August 2016
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where decision made to decline claim for insurance – whether the building contract was validly terminated at the fault of the contractor
Queensland Building and Construction Commission Act 1991 (Qld)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20, s 24
Yendex Pty Ltd v Prince Constructions Pty Ltd (1988) 5BCL 74; followed
Re White Industries (Qld) Pty Ltd (1990) 7 BCL 200; followed
Sharon Glenys Pollock
Queensland Building and Construction Commission represented by Ms C Farthing in house Solicitor
Mr Rutter represented by Mr E Bird Solicitor McInnes Wilson Lawyers
REASONS FOR DECISION
- Sharon Pollock signed a contract with Martin Rutter on 20 October 2014, a builder, to extend her home at Mt Archer. The contract price was $66,000.
- Work commenced on 23 October 2014. Ms Pollock says she was keen to have the project finished by Christmas of that year. Ms Pollock was on a tight budget.
- Practical completion of the project was 120 calendar days after the date work commenced, which would have been 5 February 2015.
- Problems arose, Mr Rutter says, fairly quickly after work commenced. There were difficulties aligning the new extension to the existing floor and the problem with the levels became the basis of an escalating dispute between the parties.
- Mr Rutter sought what he considered were variations to the contract to rectify the problem levels. In short, Ms Pollock considered this proposed rectification (involving re-stumping at least part of the existing home) to be part of the contract and something Mr Rutter should have been aware of when he quoted for the job.
- By 19 November 2014, Ms Pollock says Mr Rutter stopped work on the project. There is a substantial factual dispute about events occurring to this point but both parties agree that the relationship was at a crisis point by this date.
- Mr Rutter says on the morning of 19 November 2014, he and Ms Pollock had a telephone conversation. He says he suggested that, because the project was still at an early stage, it might be best for her to hire another builder.
- Mr Rutter says Ms Pollock agreed readily with this, saying she wanted to cancel the contract immediately.
- Mr Rutter says he acknowledged this and asked her to send an email confirming this so he had a written record.
- No written confirmation was received from Ms Pollock, so that evening, Mr Rutter sent his own email to Ms Pollock. The subject was ‘Confirmation of telephone conversation’. The email said as follows:
As per our telephone conversation this morning, 19/11/2014, this email is to confirm that you have verbally advised that you wish to cancel the QBCC contract that was taken out between yourself and The Rutter Family Trust T/A Rutter Family Homes on 22/10/2014. During this telephone conversation you requested that all work stops immediately and that you no longer wish to engage our services. This email is written confirmation of this telephone call and is a true and correct account.
- Ms Pollock did not respond to this email. She says the conversation was initially aimed at trying to set some compromise. These negotiations broke down and Ms Pollock says Mr Rutter suggested ‘she might prefer to work with someone with a better work relationship’. Ms Pollock says she agreed she would and that Mr Rutter told her to send an email to say she wanted to terminate the contract.
- She also says that Mr Rutter told her that as she had not paid for the stringers or the silver builder’s paper, he would take them back.
- Ms Pollock says she immediately rang the Commission and was told to seek legal advice and what mediation options were available.
- Later that evening she received the email detailed above from Mr Rutter but did not reply to him.
- Next morning (20 November 2014), Ms Pollock says she covered the materials and put a padlock on the gate. She says to safeguard the materials.
- Without any response from Ms Pollock, Mr Rutter assumed the contract was concluded and arrived on site to collect the stringers and the insulation on the morning of 20 November 2014.
- He found the gate to the site shut and padlocked. However, the padlock was not actually locked. Mr Rutter gained access and removed the materials.
- He returned the next day (21 November 2014), he says to ensure the remaining materials were correctly stored but found the gate shut and firmly padlocked.
- Mr Rutter says he had no further contact with Ms Pollock until he received a letter from her dated 8 December 2014.
- Ms Pollock says she emailed Mr Rutter on 21 November 2014 advising the contact was not terminated and that she was seeking advice on the Commission’s early dispute resolution process.
- However, prior to this, Ms Pollock had emailed Mr Rutter on 20 November 2014 at 12.03pm. This email read as follows:
I am writing to you about the refund of the money that we discussed on the phone on Wednesday morning. I am also copying Peter Shaw because he has kindly agreed to take delivery of the cash you said you would refund.
I have paid you $1800.00 in advance. $950 of this was towards the supply and install of insulation. The other $850 was the money you asked for towards fixing the problem with the levels under the house after you lowered one of the beams.
In terms of deductions, as there is some insulation here, I guess it would be fair for you to deduct the cost of that. Also there is the cost of clearing the holes that Brutie dug but that got filled in after the storm. I still believe it isn’t correct for you to charge me for moving the dirt from around the holes as you never said this was extra, and didn’t give me a chance to do the work myself.
You said the stringers and silver paper weren’t paid for. If you’re prepared to sell the stringers to me for a reasonable price, I will take them. If you want to pick up the silver paper, send me a text message - I’ll arrange a time to be there.
Please let me know about the stringers, and then we can agree on a refund.
- I have no reason to believe Mr Rutter did not receive this email. Ms Pollock says Mr Rutter did not reply, but by that time the stringers and the silver paper had been removed from the site by Mr Rutter that morning, through a closed but not sufficiently padlocked gate.
- In January 2105, Ms Pollock made a claim under the insurance provisions of the Queensland Building and Construction Commission Act 1991 (Qld). Ms Pollock based this claim on the contract being terminated for reasons other than the fault of the owner.
- Initially the Commission determined the contract had been validly terminated by the default of the contractor. But after further submissions from Mr Rutter and an internal review, this original decision of the Commission was reversed and Ms Pollock’s insurance claim was denied.
- Ms Pollock reviewed this decision to this Tribunal on 27 May 2015.
- Section 24 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) sets out the function of this Tribunal on review. The Tribunal may confirm or amend the decision, set aside the decision and substitute its own, or set aside the decision and return the matter for reconsideration to the decision maker with directions if appropriate.
- The purpose of the review is to produce the correct and preferable decision and is heard and determined by way of a fresh hearing on the merits.
- The question asked of this Tribunal is whether the contract was validly terminated at the fault of the contractor. If yes, the Commission will reconsider Ms Pollock’s insurance claim.
What then happened?
- An examination of the emails and events between these parties between 19 and 21 November 2014, satisfies me that both Ms Pollock and Mr Rutter intended to consensually discharge this contract. The consideration for this further oral contract was a mutual release of outstanding obligations between the parties.
- The evidence of this agreement can be seen in the actions of both parties around retrieval of the stringers and silver paper, negotiations about refunds or purchase of the stringers by Ms Pollock and finally, the locking out of Mr Rutter from the site by Ms Pollock.
- Indeed, if further evidence is required to show the intention of the parties to end this contract by agreement, on 24 November 2014, Ms Pollock reported the removal of the materials to the Kilcoy police, calling Mr Rutter’s actions ‘trespass’ and ‘theft’. Mr Rutter was interviewed by the police about the matter.
- I am comfortably satisfied on the balance of probabilities that, as evidenced by their correspondence and actions, both parties entered a further oral contract to consensually discharge the original building contract between them by 20 November 2014 and that this fresh oral contract had been acted on by both of them.
- I am also satisfied that at some point after this, probably around 21 November 2014, Ms Pollock changed her mind. This may have occurred because of advice she had received but, in my view, this action came too late. I am satisfied that the contract had been mutually discharged by the email of 21 November 2014 and could not be revived by the actions of one party alone.
- If I am wrong about this mutual discharge, I will now go on to consider the further action of the parties.
- On 19 December 2014 at 2.46pm by email, Ms Pollock served a Notice to Remedy Breach of Contract on Mr Rutter. This notice asserted Mr Rutter was in substantial breach of the contract by failing to perform the work competently, by unreasonably failing to replace or remedy defective work or materials and by failing to perform the work diligently or having unreasonably delayed, suspended or failed to maintain reasonable progress.
- If the contract was still on foot, it had a considerable period still to run to reach the intended date for practical completion of 5 February 2015.
- There were a number of problems with the notice that Ms Pollock served on Mr Rutter. The first was that it was served by email – not a method contemplated by the original contract, but not a point taken by the builder in the hearing.
- More importantly, service by email occurred on 19 December 2014 at 2.46pm. This was the Friday of the last week before the Christmas week that year. Mr Rutter’s office had closed at lunch that day (12 noon) and Mr Rutter had started his Christmas vacation, overseas. The email went to his work address. He didn’t see the Notice to Remedy the Breach or the following Termination Notice served by Ms Pollock by email and post until his first working day in the following January - 12 January 2015.
- I am satisfied that proper notice was never given to Mr Rutter. Even if the notices had been served in the manner contemplated by the original contract, because of the time of year, they never came to Mr Rutter’s attention until after the time specified in them had elapsed.
- The Notice to Remedy the Breach gave Mr Rutter 10 working days to remedy the alleged breaches listed as:
- Making good the subfloor levels that were affected by the beam Mr Rutter lowered under the house;
- Replacing the temporary spacers with permanent spacers on the side of the house that had been raised; and
- Replacing the joists put in place for the living room extension that had been exposed and had started to weather.
- Mr Rutter complains that the notice itself was extremely vague and he would have had a hard time actually knowing what he had to do to rectify the alleged problems. He says:
- The notice did not make it clear which part of the works were incompetently performed or how the works were to be performed ‘differently’ to be competent;
- The notice did not particularise which parts of the works or materials were defective;
- The notice did not particularise which parts of the works he unreasonably delayed or suspended or that were behind or where he had failed to maintain reasonable progress.
- A Notice to Remedy the Breach requires the default to be clearly indicated.
- Allowing that this original contract, if it had remained on foot, was still a number of weeks off from the date for practical completion, it is difficult to understand how Ms Pollock could have been alleging defects at that point in the construction process.
- The building inspector from the Commission, Mr Chris Coombes, provided a report based on an inspection on 15 June 2015. Mr Coombes inspected three items – the floor slope, the floor joists and the damage to decking boards.
- Mr Coombes’ report on the floor slope indicated that Mr Rutter had not been contracted to correct the existing floor levels or undertake any significant works to the existing dwelling. The adjustment using temporary packers was an effort to create a reasonable level starting point for the installation of the new floor framing adjacent to the original dwelling.
- Re-stumping and re-levelling of the original floor were not budgeted for by Ms Pollock.
- Because the original contract did not include correction works or improvements to the original dwelling, Mr Coombes did not consider it fair or reasonable that Mr Rutter correct or adjust the entire existing living room floor. In any event, he considered it a contractual matter, not a matter of incomplete or defective work and therefore outside the scope of the Commission.
- I accept this evidence and am satisfied it was outside the scope of the original contract and therefore not reasonable that Mr Rutter correct or adjust the entire existing living room floor.
- Mr Coombes opined that the temporary spacers were better characterised as incomplete work as the original contract had not reached practical completion. The temporary spacers Ms Pollock complained of would have been replaced with permanent ones by the completion of the works.
- The laminated joists for the living room had started to degrade by the time of inspection by Mr Coombes. This was some six months after work finished on site by Mr Rutter. This was because of weather exposure. As Ms Pollock had banned Mr Rutter from site, I fail to see how this deterioration is anything other than Ms Pollock’s responsibility. I agree with Mr Coombes’ assessment that it was not fair or reasonable to hold Mr Rutter responsible.
- The final matter (the decking boards) Mr Coombes said Mr Rutter had agreed to replace.
- Of the three issues readily identified by Ms Pollock in her Notice to Remedy the Breach, I am satisfied that the two major issues (the out of level floor and the joists) are not reasonably matters that are the responsibility of Mr Rutter.
- I was first satisfied that on an examination of the emails and events between these parties between 19 and 21 November 2014, that both Ms Pollock and Mr Rutter intended to consensually discharge the original contract. The consideration for this second oral contract was the mutual release of outstanding obligations between the parties. I am also satisfied this second fresh oral contract had been acted on by both of them.
- If I am wrong about that, I am satisfied that proper notice of the Notice to Remedy the Breach or the following Termination Notice was never given to Mr Rutter.
- Finally, concerning the alleged breaches in the notices themselves, I am satisfied
- it was outside the scope of the original contract and therefore not reasonable that Mr Rutter correct or adjust the entire existing living room floor;
- the temporary spacers were better characterised as incomplete work as the original contract had not reached practical completion; and
- it was not reasonable to hold Mr Rutter responsible for the degrading of the laminated joists for the living room because of weather exposure, as Ms Pollock had banned Mr Rutter from site.
- For the reasons above, I am therefore satisfied the original contract was not validly terminated by Ms Pollock because of a fault of Mr Rutter as the contractor. I am satisfied it was either consensually discharged by the parties themselves or that Ms Pollock’s attempts to unilaterally terminate were ineffective for the reasons given.
- I confirm the decision of 1 May 2015 of the Queensland Building and Construction Commission to wholly decline the applicant’s insurance claim.
 Exhibit 7: Attachment MSR-1.
 Exhibit 2 - Attachment 6 note for 19 November 2014.
 Ibid, Attachment 9.6.
 QCAT Act, s 24(1).
Ibid, s 20.
 Exhibit 2, Attachment 7.
 See clause 24 of the general conditions of the contract – Exhibit 2, Attachment 3b.
 Yendex Pty Ltd v Prince Constructions Pty Ltd (1988) 5 BCL 74; Re White Industries (Qld) Pty Ltd (1990) 7 BCL 200 at 202.
 Exhibit 2, Attachment 10.
- Published Case Name:
Pollock v Queensland Building and Construction Commission
- Shortened Case Name:
Pollock v Queensland Building and Construction Commission
 QCAT 286
17 Aug 2016