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- Unreported Judgment
Makarenko v Page QCAT 143
Makarenko v Page  QCAT 143
Peter William Page
On the papers
Dr Alan Collier, Member
21 May 2018
Respondent to pay Applicant $16,953.55 within 21 days.
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – LEGALITY – whether agreement formed by the parties satisfies the requirements of a level 1 regulated contract as prescribed in the Queensland Building and Construction Commission Act 1991 (Qld) – whether the contract has effect
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – STATUTORY WARRANTIES FOR RESIDENTIAL BUILDING WORK – where implied warranty that builder will perform the work for which he was engaged in an appropriate and skilful way and with reasonable care and skill – whether builder breached that warranty
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – whether builder breached guarantee relating to the supply of services under the Australian Consumer Law – whether builder breached guarantee as to due care and skill under the Australian Consumer Law
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – RECOVERY – whether the builder is entitled to payment for the work – whether the builder is entitled to recover the cost of work on quantum meruit – where work of such poor quality that the applicant obliged to have work performed again in its entirety – where applicant has received no benefit from the work performed by the builder and accordingly where quantum meruit is not applicable – where appropriate remedy is for applicant to be compensated in an amount equal to having the work done again in its entirety
Australian Consumer Law, s 60
Queensland Building and Construction Commission Act 1991 (Qld), sub-s 42(3); Schedule 1B, s 1, s 4, s 5, s 6, s 13, s 109A; sub-s 13(5); Part 3
Queensland Building and Construction Commission Regulation 2003 (Qld), reg 27AC
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 32, s 93
Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 39
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act)
REASONS FOR DECISION
- The Application commencing this matter was filed on 26 September 2017.
- There is an Affidavit of Service dated 13 October 2017 in which the deponent, the Applicant in this matter, Mr Makarenko, deposes that he posted a copy of the Application to the Respondent at 18 Tovey Road Boronia Heights Queensland 4124.
- Applying the relevant QCAT Rule (rule 39) in relation to service of the Application, in conjunction with s 109A of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), the enabling Act in this case, it is clear that service of the Application on the Respondent by post, in this instance, is sufficient.
- The Application was posted to the Respondent on or about 10 October 2017 by registered post. The file discloses no evidence that this letter was returned to the sender, the Applicant.
- Further, 18 Tovey Road Boronia Heights Queensland 4124 was the address used by the Queensland Building and Construction Commission (QBCC) to communicate with the Respondent throughout the duration of this matter and there is no evidence that documents sent to this address by the QBCC were not received by the Respondent.
- There is a further Affidavit of Service dated 7 February 2018 in which Megan Miles, Deputy Bailiff, deposes that she served a copy of the Application on the Respondent by leaving a copy with Sharon Page at 4 Tombildon Court Marsden Queensland 4132. This address appears to be the residence of the Respondent.
- The file discloses that the Respondent has been served all Notices and Directions issued by QCAT by post to both addresses of the Respondent, namely 18 Tovey Road Boronia Heights and 4 Tombildon Court Marsden, and by email.
- I am satisfied that the Respondent has been properly served with, or otherwise informed about, the Application in this matter, and with all QCAT documents.
- The file discloses that the Respondent, Mr Page, failed to participate in this matter at any stage. He did not file a response to the Application; he did not attend the site visit with the QBCC at the residence of the Applicant; he did not participate in the compulsory conference; and he did not make a submission when invited to do so prior to this matter being decided. In each case the Respondent has been given proper notice of the relevant step and the opportunity to participate.
- As a result of the Respondent’s failure to offer any evidence in this matter I have examined the evidence supplied by the Applicant in this matter and am satisfied that it represents a truthful account of the facts.
- I am, therefore, satisfied that it is fair and just that I make a decision in this matter without hearing from the Respondent, in accordance with sections 32 and 93 of the QCAT Act.
Background to the dispute
- Mr Justyn Makarenko, the Applicant in this matter, resides at 1 Watsons Court, Thornlands, Queensland 4164.
- In early January 2017 the Applicant sought to have tiling around the entertainment area and pool surround of his residence – about 84 sq m in all – replaced. He consulted the on-line marketplace Gumtree in order to locate a contractor to do this work.
- In response to an invitation by the Applicant the Respondent visited the Applicant’s residence on 13 January 2017 and sent an email on the same day to the Applicant offering to do the work in the following terms (sic):
Tilling $4032 48m2 [later agreed it was intended to be 84 m2]
Rip off old copping and prep for new copping $1500
Copping to lay 25lm $1500
Prep and pour levala around pool surround to get levals right $1200
Bullnose copping $300
Fix end of slab under pin
And concrete both sections front and back of pool $5000
Total before gst $14,732
With 10%gst comes to $16,205.2
CASH PRICE $14,500
- After some negotiation, the cost agreed for the work was $13,000 cash, with the parties understanding that this was to be done without paying GST.
- The value of the job being $13,000 is confirmed by an SMS from the Respondent to the Applicant on 9 February 2017 in which he says (sic):
… on all jobs we normally ask for a third deposit on all jobs over $5,000 your job dose this 2and a half times so we would ask for a deposit of $4,333 and our 2nd draw the same and the final when completed as job is cash we can do up a receit between the two of us ….
- The work to be completed by the Respondent is domestic building work within the meaning of that term in the QBCC Act.
- Further, the agreement between the parties is a level 1 regulated contract under the QBCC Act. Being a level 1 regulated contract requires that the agreement must conform to a set of requirements set out in the legislation. These include that the contract must: be in written form; dated; and signed by or on behalf of the parties.
- Insofar as there is an agreement between the parties it was formed by a series of emails and SMS messages between the parties sent and received between 5 January 2017 and 9 February 2017.
- Irrespective of the agreement formed by the parties, their agreement does not satisfy the requirements of a level 1 regulated contract as prescribed in the QBCC Act. In particular, the agreement does not contain the required information, nor was it dated or signed by or on behalf of each of the parties.
- As a result of these defects in the agreement between the parties, the QBCC Act declares that the contract between them has no effect.
- This provision does not, however, have the effect of excluding the statutory warranties imposed on the building contractor under a regulated contract.
- Based on documents in the file I am satisfied that the evidence set out below is correct on the balance of probabilities, which is the civil test.
- The Applicant sought to have approximately 84 sq m of tiling replaced around the entertainment area and pool surround at his residence, and the Respondent undertook to perform this work.
- The cost of the job agreed between the parties was $13,000 without GST being payable.
- The Respondent had much of the work performed under his direction by another person named ‘Jimmy’.
- At all relevant times the Respondent did not hold a contractor’s license of the appropriate class, or at all, as required under the QBCC Act to undertake building work.
- The work commenced on or about 25 February 2017 and continued until 20 April 2017 when the Respondent rescinded the agreement with the Applicant and walked off the job. The job was unfinished at this stage.
- Although the agreed cost was $13,000, the Applicant paid the Respondent a total of $13,500 as follows:
- $6,000 on 1 March 2017.
- $7,500 on 10 March 2017.
- The Applicant resisted demands by the Respondent for the payment of more money demanded by the Respondent to complete the job.
- As the result of a complaint made by the Applicant to the QBCC, on 4 July 2017 the QBCC, by its inspector, Mr Geoffrey Sanders, attended the Applicant’s residence to inspect the work done by the Respondent. The Respondent did not attend this inspection.
- The QBCC Initial Inspection Report dated 7 July 2017 made the following relevant findings, inter alia:
The installation of the tiles to the entertainment and surrounding pool area have not been completed in accordance with AS3958.1 Section 5.4 in that installed tiles are drummy, loose fitting, out of level and water is ponding on the finished surface resulting in health and safety concerns for the occupants of the dwelling which is unsatisfactory (at page 2); and
The tiled outdoor entertainment area and pool surrounds have not been provided with movement joints in accordance with AS3958.1 resulting in the finished work not being able to compensate the strains of expansion and contraction which is unsatisfactory (at page 5).
- By Direction dated 10 July 2017 the Respondent was ordered by the QBCC to remedy these defects within 28 days.
- By letter to the Applicant dated 29 August 2017 the QBCC advised the Applicant that the Respondent had not competed the rectification work ordered by the QBCC.
- The Applicant sought compensation for the defective domestic building work under the Queensland Home Warranty Scheme administered by the QBCC. By letter dated 20 September 2017 the Applicant was advised by the QBCC that he was not eligible for compensation because the Respondent was not a licensed contractor.
- The parties were directed to attend a Compulsory Conference on 10 December 2017. There is no evidence on the file that the parties attended or that the matter was resolved at the conference.
- The cost to remedy the defective work performed by the Respondent and supply a job equivalent to that quoted by the Respondent is $15,301, including GST. This cost is based on a quote dated 15 January 2018 from Lee Garratt of Prestige Tiling.
- In his quote to perform the tiling work Lee Garratt makes the following comments on the work that had been performed by the Respondent:
[I recommend] removal of any levelling compound that has been put down as it appears to have separated from the original concrete substrate in multiple areas and there is evidence of water penetration which is coming through the grout. The falls are also not allowing water to run off correctly to the drain which is causing the water to pool in large area between the pool and the adjacent drain.
It is my recommendation to take up all of the tiles as over half of them are Drummy (glue has not stuck to the tiles or substrate) and I would expect the rest to go the same way over a short period of time.
- In his email of 15 January 2018 to the Applicant, Lee Garratt recommends that all tiles be removed except those around the pool coping, the removal of all levelling compound because of its unusability, that existing concrete be diamond drilled to permit the laying of new levelling compound, and that the area be retiled incorporating correct expansion joints. I accept this evidence as reliable and based on a sound assessment of the work needed to remedy the defective work of the Respondent.
- I am satisfied that in performing the work for which he was engaged by the Applicant the Respondent failed to carry out the work in an appropriate and skilful way nor with reasonable skill and care.
- I am further satisfied that the Respondent failed to render the work for which he was engaged by the Applicant with due care and skill.
- Despite directions issued by QCAT on 30 October 2017 and 7 February 2018 requiring the Respondent to file documents with QCAT there is no evidence of the Respondent having done so. I am satisfied that the Respondent has filed no documents as directed.
- In accordance with Direction 3 of the Directions issued by Senior Member Brown on 7 February 2018, that is: “If Peter William Page fails to comply with Direction 2 [dealing with the filing of reasons for non-attendance and a response to the Application], Justyn Makarenko may be entitled to a final decision in the proceeding”, I am entitled to, and hereby do, make a final decision in this matter.
Remedy Sought by the Applicant
- In his submission dated 11 February 2018 the Applicant seeks $16,953.55, made up as follows:
- Rectify defective works $15,301.00;
- Costs relating to completing work left incomplete by the Respondent $1,259.05;
- QCAT Application fee $326.80;
- Bailiff fee $66.70; and
- Fees and charges $393.50.
- The total claimed of 16,953.55 claimed by the Applicant includes all the amounts except item e), above, relating to Fees and charges.
- The $15,301 cost to rectify of the defective works is based on the written estimate from Lee Garratt of Prestige Tiling mentioned earlier.
- The $1,259.05 cost to complete the works left incomplete by the Respondent is based on the actual costs incurred by the Applicant in an attempt to complete the work left incomplete by the Respondent when the Respondent walked off the job and rescinded the agreement between the parties on 20 April 2017. These works were undertaken by the Applicant in an attempt to mitigate his loss by making the area that had been tiled by the Respondent useable. I am satisfied that the Applicant undertook these works and spent $1,295.05 in a genuine attempt to remedy the defects left by the Respondent.
- Each of the QCAT filing fee and the bailiff’s fee are supported by documentary evidence in the file in the amounts claimed.
- As noted earlier, by operation of the QBCC Act, the agreement between the parties is of no effect.
- Notwithstanding that the contract is of no effect, the Respondent, as the building contractor, remains bound by the statutory implied warranties provided in the QBCC Act relating to regulated contracts. Further, the Applicant is entitled to the benefit of the consumer protection provisions of the Competition and Consumer Act 2010 (Cth).
- While the agreement between the parties has no effect, the building contractor, the Respondent, may be entitled to recover his cost for work properly performed under a quantum meruit.
- I am satisfied that, by virtue of sub-s 42(3) of the QBCC Act, the Respondent is not entitled to be paid for the building work which he undertook because he did not hold a contractor’s licence of the relevant class at the time when the work was performed.
- I am satisfied that in performing the work for which he was engaged by the Applicant the Respondent failed to carry out the work in an appropriate and skilful way nor with reasonable skill and care and has breached the statutory warranty provided in the QBCC Act.
- I am further satisfied that the Respondent failed to render the work for which he was engaged by the Applicant with due care and skill and has breached the consumer guarantees set out in section 60 of the Australian Consumer Law.
- These breaches are evident from the QBCC Initial Inspection Report dated 7 July 2017 mentioned above, by the opinion expressed by Lee Garratt of Prestige Tiling, by the numerous communications sent by the Applicant to the Respondent setting out the defects in the work and the failure of the Respondent to acknowledge these defects or remedy them, and from the photographic evidence on the file.
- The Respondent was given ample opportunity by the Applicant to remedy the defects in the Respondent’s work to which the breaches of the law relate, but the Respondent failed to take any action to remedy the defects.
- The Applicant has attempted, within the scope of his knowledge and understanding, to remedy the defective work. Notwithstanding this, the work performed by the Respondent was and remained defective.
- As a result of the Respondent breaching the QBCC Act and the Australian Consumer Law the Applicant is entitled to a remedy.
- I have considered whether the building contractor is entitled to a quantum meruit for the work he performed for the Applicant. In this regard I am satisfied that the work was of such poor quality that the Applicant is obliged to have the work completely performed again. The Applicant has received no benefit from the work performed by the Respondent.
- I am satisfied that the Respondent is not entitled to any benefit arising from a quantum meruit.
- The work that the Respondent undertook to do for the Applicant was not completed. The Respondent repudiated the agreement. The Applicant appears to have expended money and effort in an attempt to mitigate his loss by making the incomplete work by the Respondent safe and the area affected useable; but, given the poor quality of the Respondent’s work, this measure could only be temporary until the work is done again to an appropriate standard.
- I conclude that, because of the defective work performed by the Respondent, the Applicant must have the work done again in its entirety. I also note that the Respondent has been paid in full by the Applicant for the work.
- The appropriate remedy for the Applicant in this case is to be compensated in an amount equal to having the work done again in its entirety, plus the costs incurred by the Applicant in making the work done by the Respondent temporarily safe and useable, plus the costs incurred and allowable in this matter.
- In regard to the cost to remedy the unsatisfactory work done by the Respondent the Applicant is entitled to $15,301.00.
- In his attempt to mitigate the defective work done by the Respondent the Applicant is entitled to $1,259.05.
- The Applicant is entitled to recover the $66.70 paid for the bailiff.
- In my opinion, the Applicant is entitled to recover the filing fee in this matter of $326.80.
- The amount of $393.50 claimed by the Applicant has not been sufficiently particularised and there is no evident basis on which it can be allowed.
- Respondent to pay Applicant $16,953.55 within 21 days.
 QBCC Act, Schedule 1B, s 4.
 Ibid, s 5, s 6; Queensland Building and Construction Commission Regulation 2003, reg 27AC, being a contract with a value more than $3,300 and less than $20,000.
 QBCC Act, Schedule 1B, s 13 (as to a level 1 regulated contract).
 As to what constitutes written form for these purposes, this is defined in QBCC Act, Schedule 1B, s 1.
 QBCC Act, Schedule 1B, s 13.
 Ibid, s 13(5).
 Ibid, Part 3.
QBCC Act, sub-s 42(1).
 Which are the statutory warranties provided by a building contractor under the QBCC Act, Schedule 1B, s 22.
 Which are the statutory guarantees afforded a consumer under the Australian Consumer Law, s 60.
 Set out in the Australian Consumer Law, being Schedule 2 of the Competition and Consumer Act 2010 (Cth).
- Published Case Name:
Justyn Makarenko v Peter William Page
- Shortened Case Name:
Makarenko v Page
 QCAT 143
21 May 2018