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Lacie Enterprises Pty Ltd v Prokic QCAT 51
Lacie Enterprises Pty Ltd as trustee for KR & JL Smith Family Trust t/as KR Smith Plumbing Services v Prokic  QCAT 51
Lacie Enterprises Pty Ltd as trustee for KR & JL Smith Family Trust t/as KR Smith Plumbing Services
Michael Prokic aka Miodrag Prokic
Other minor civil dispute matters
30 November 2015
10 March 2016
Minor Civil Dispute – Building Dispute – Queensland Building and Construction Commission dispute resolution mandatory as prerequisite to application to the Tribunal – obligation to submit to QBCC dispute resolution process – preservation of cause of action
Queensland Building and Construction Commission Act 1991 (Qld), s 77
Redding v Simmons (Unreported, Queensland Civil and Administrative Tribunal, Dr Forbes - Member, 23 February 2016).
Keiron Smith, Director
Justine Smith, Office Manager
REASONS FOR DECISION
- By application filed 7 August 2015 Lacie Enterprises Pty Ltd t/as KR Smith Plumbing Services seeks $9,060.00 on account of outstanding invoices for variations on plumbing works carried out at 122 Salerno Street, Isle of Capri for the Respondent, Mr Prokic.
Background and evidence
- In July / August 2013 Mr Smith (on behalf of the applicant company), quoted Mr Prokic for plumbing works to be undertaken at Mr Prokic’s property at 122 Salerno Street, Isle of Capri. The existing structure was to be mostly demolished and a residence incorporating a dental surgery constructed. The three written quotes submitted by Mr Smith were for $9,900.00 under slab drainage, $8,880.00 rough in and stack work, hot water system and $4,400.00 fit off, the total being rounded off at $23,000.00. Mr Smith and Mr Prokic agreed to these works at $23,000.00 on a handshake.
- Mr Smith asserted that from the very outset works varied from those quoted in his three quotes; that the plans supplied by Mr Prokic and upon which he based his three quotes changed resulting in variations to the extent of work undertaken as well as additions.
- Four payments totalling $20,313.00 were made by Mr Prokic during the course of construction which spanned the period roughly later in 2013 through to approximately November 2014. A plumbing and drainage compliance certificate was issued by the Gold Coast City Council on 28 October 2014 with builder’s handover taking place on 26 November 2014, the latter being, it appeared, more symbolic than real, for the reason that Mr Smith, as well as other tradespersons it appears, dealt directly with Mr Prokic.
- Mr Smith’s variations were set out in four tax invoices as follows:
- Invoice 2183 involved addition of two vanity basins in the bathroom and ensuite, relocating toilet waste and change of shower waste to new location at a cost increase of $537.00;
- Invoice 2215 involved provision of two surface drain outlets, cutting and jacking up concrete, moving a downpipe, re-piping, relocation of laundry water pipes, relocating floor waste pipe, moving temperature valve and pool backwash to sewer connection at a cost increase of $1,100.00;
- Invoice 2378 involved repair of broken stormwater and water feeds under footings and water pipe adjustment at a cost increase of $508.00;
- Invoice 2437 involved extras associated with two additional vanity basins, provision of dual check valves, connecting cold water points, storm water pit connections, storm water repairs, kitchen plumbing relocation, basin waste pipe relocation, storm water drainage installation, pool backwash repair, water connection to fridge, supply of washing machine tap handles, adjustment of downpipe spreader and meeting with hydraulic consultant at a cost increase of $6,915.00.
- Mr Prokic seemed to suggest that variations were talked about at the beginning; that it was accepted by Mr Smith that variations would occur. Mr Prokic agreed that some additional works were performed, but denied that the variations ought to mean that any more money was payable.
- Mr Prokic stated that he had spoken to master builders, other builders and plumbers and the Queensland Building and Construction Commission (‘QBCC’). He said he was told by the QBCC that ‘the builder is responsible for anything that has to be rectified on site’. In further evidence he stated that he was advised by the QBCC ‘take another one if you are not happy with him’. That latter advice apparently was in reference to the alleged lengthy absence of Mr Smith during the course of construction. Mr Smith denied that to be the case.
- It was clear on the evidence that Mr Prokic had contacted the QBCC on occasion, but that is as far as it went. Mr Smith was the licensed contractor pursuing payment. Mr Prokic complained that he would be out of pocket for some rectification of Mr Smith’s plumbing work. However, his response was limited to seeking dismissal of Mr Smith’s claim.
- Section 77 of the QBCC Act provides:
77 Tribunal may decide building dispute
- A person involved in a building dispute may apply, as provided under the QCAT Act, to the tribunal to have the tribunal decide the dispute.
- However, the person may not apply to the tribunal unless the person has complied with a process established by the commission to attempt to resolve the dispute.
- In the Tribunal’s recent appeal decision of Redding v Simmons (delivered 23 February 2016) the question of whether the QBCC dispute resolution service was applicable generally or whether it applied only to certain types of building disputes was traversed. The Appeal Tribunal there referred to, in particular, the QBCC 2014 - 2015 report which stated the ‘dispute resolution service for disputes between contractors and homeowners concerning building defects, non-completion and contractual issues’ was a success. The Tribunal concluded that the terms of s 77 of the QBCC Act were broad ‘the general jurisdiction view’.
- That is the view accepted by QCAT which states on its website:
Before you make an application
Parties are required to participate in a dispute resolution process with the Queensland Building and Construction Commission (QBCC) before making a commercial or domestic building dispute application to QCAT.
A letter from the QBCC advising of the outcome of this process must be provided when commencing a QCAT application. Applications cannot be accepted at QCAT without this letter from the QBCC.
- The Tribunal in Redding’s case finally concluded ‘[s]ubmission to the Commission’s dispute resolution process is a necessary condition precedent to the commencement of a building dispute in this Tribunal’.
- Here unfortunately, time was taken to traverse the assertions and allegations regarding the contractual issues, defects and completion of works. However, in the light of Redding’s decision the Tribunal cannot determine those in the context of this application.
- Written evidence of QBCC dispute resolution having taken place is mandatory. The Tribunal’s jurisdiction cannot be enlivened, nor any application properly filed until that dispute resolution process is exhausted.
- The application must therefore be dismissed for lack of jurisdiction only, with Mr Smith retaining his right to file and serve a fresh application after the dispute resolution process has been completed.
- Accordingly, the order of the Tribunal is that the application be dismissed for lack of jurisdiction only.
- Published Case Name:
Lacie Enterprises Pty Ltd as trustee for KR & JL Smith Family Trust t/as KR Smith Plumbing Services v Michael Prokic aka Miodrag Prokic
- Shortened Case Name:
Lacie Enterprises Pty Ltd v Prokic
 QCAT 51
10 Mar 2016