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Augustine v S J Builders Pty Ltd[2018] QCAT 248

Augustine v S J Builders Pty Ltd[2018] QCAT 248

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Augustine & Anor v S J Builders Pty Ltd & Anor [2018] QCAT 248

PARTIES:

EBY AUGUSTINE

IRIN SUSAN AUGUSTINE

(applicants)

v

S J BUILDERS PTY LTD

SANTI PHILIP

 (respondents)

APPLICATION NO/S:

BDL232-16

MATTER TYPE:

Building matters

DELIVERED ON:

1 August 2018

HEARING DATE:

30 May 2018

HEARD AT:

Brisbane

DECISION OF:

Member Gardiner

ORDERS:

  1. S J Builders Pty Ltd and Santi Philip pay Eby Augustine and Irin Susan Augustine the sum of $57,913.57 in full and final satisfaction of this matter by 9 August 2018.
  2. Eby Augustine and Irin Susan Augustine file in the Tribunal two copies and give S J Builders Pty Ltd and Santi Philip one copy of any written submissions and supporting documentation in relation to costs by 31 August 2018.
  3. S J Builders Pty Ltd and Santi Philip file in the Tribunal two copies and give one copy to Eby Augustine and Irin Susan Augustine of any submissions and supporting documentation in response to the application for costs by 21 September 2018.
  4. Eby Augustine and Irin Susan Augustine file in the Tribunal two copies and give to S J Builders Pty Ltd and Santi Philip one copy of any submissions in reply by 5 October 2018.
  5. The application for costs be determined by the Tribunal on the papers without an oral hearing not before 5 October 2018.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – where claim made by homeowners on statutory insurance scheme  – where further dispute about matters outside statutory scheme – where defects and incomplete work – where claims for liquidated damages and consequential loss of rent

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS – where quantum of various variations in dispute

Queensland Building and Construction Commission Act 1991 (Qld) s 77

 Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364

Baltic Shipping Company v Dillon (1993) 176 CLR 344

Environmental Systems Pty Ltd v Peerless Holdings (2008) 19 VR 358

GEC Alsthom Australia Ltd v City of Sunshine Unreported, FCA, 20 February 1996

Hadley v Baxendale [1854] EWHC J70

Harrison and Anor v Meehan [2016] QCATA 197

Lyons v Dreamstarter Pty Ltd [2011] QCATA 142

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Self-represented

REASONS FOR DECISION

  1. [1]
    This matter came before the tribunal for hearing on 30 May 2018.  At the hearing only the applicants appeared.  The tribunal made a number of attempts to contact Mr Philip by telephone but he could not be contacted and at that point in the hearing, the tribunal was not aware of any application made by Mr Philip to attend by phone or any application for an adjournment.
  2. [2]
    At that time, the tribunal was satisfied that proper notice of the hearing date had been given to Mr Philip in the order sent to him dated 4 April 2018 and the hearing proceeded and concluded on 30 May 2018.
  3. [3]
    Although Mr Philip did not appear at the hearing, substantial material had been filed by him in response to the application and evidence of Mr and Mrs Augustine and to the building expert report.  The building expert appeared at the hearing to assist the tribunal in its deliberations.
  4. [4]
    The tribunal was satisfied that adequate evidence was before the tribunal to be informed of the view of Mr Philip on the items claimed by Mr and Mrs Augustine and that this evidence could be taken into account despite Mr Philip not being present.
  5. [5]
    At the conclusion of the hearing the decision was reserved.
  6. [6]
    On 6 June 2018, the tribunal was informed of an application received from Mr Philip in the mail on 30 May 2018 for an adjournment of the hearing on medical grounds.  This was the day of the hearing.  The mail is not completely processed in the registry of the tribunal on any day until at least 10.30am.  Receipt of this application by the tribunal would therefore have been after the commencement of the hearing at 9.30am.  The tribunal was unaware of Mr Philip’s application at any time during the hearing day and the application was not before the tribunal on the day of the hearing for consideration.
  7. [7]
    Mr Philip did not inform the tribunal using any other communication method that he had posted an application. 
  8. [8]
    At the directions hearing of this matter on 2 May 2018, an examination of the record shows that Mr Philip informed the Senior Member that he would be overseas for the period leading up to the hearing.  An oral application for an adjournment was made but dismissed by the member at that time.
  9. [9]
    Eby and Irin Augustine entered into a contract with S J Builders Pty Ltd to build a new home for them in July 2014.  After hand-over, Mr and Mrs Augustine identified numerous defects with the build and a complaint was made to the Queensland Building and Construction Commission (QBCC).
  10. [10]
    Many defective works are being attended to through the QBCC process, but a number of other defects alleged by Mr and Mrs Augustine are considered contractual matters between the parties and stand outside the QBCC process.
  11. [11]
    On 12 September 2016, Mr and Mrs Augustine filed an application for a domestic building dispute in this tribunal to have a determination made about these contractual matters.
  12. [12]
    All parties have provided detailed responses and statements of evidence supporting their positions. 
  13. [13]
    In addition, Mr and Mrs Augustine have filed statements from an independent building expert and from a rental property manager.  Mr Philip filed his own statement in response to the building expert.  An order of this tribunal dated 2 May 2018 allowed Mr Philip to rely on this statement as his own evidence – not that of an independent expert.
  14. [14]
    Mr and Mrs Augustine claim damages for breach of the contract by S J Builders, identifying what they say are defective or incomplete work arising under the contract. They also seek damages for delays in completion of the build, rent lost and their costs of this application. 
  15. [15]
    S J Builders through Mr Philip, deny liability for any defective or incomplete work, rent lost and delays other than acknowledged in the final invoice to Mr and Mrs Augustine. Mr Philip says that many of the allegations are outside the agreed contract or that he was denied access for maintenance or for restitution. He also alleges the company is owed money for variations. 
  16. [16]
    Mr and Mrs Augustine intended to rent out the property although they did live there for a short period once they took possession on 22 October 2015.
  17. [17]
    There were building covenants attached to the land.  Final approval in line with those covenants was received from the developer on 25 September 2014. 
  18. [18]
    Mr and Mrs Augustine say this final approval was delayed because the first plans drawn by S J Builders did not conform to the covenants and were rejected by the developer. 
  19. [19]
    After some required amendments to the council plans, the building permit was finally granted by the relevant Council in October 2014.  There is a discrepancy between the parties as to the exact date of approval although both parties agree it was in October 2014.  Construction started on 3 November 2014. 
  20. [20]
    At the hearing Mr and Mrs Augustine identified their outstanding claims by way of a schedule.[1]  The matters initially claimed at the beginning of the matter had been reduced as S J Builders had attended to some rectification works, these items had since been removed by Mr and Mrs Augustine from the final claim.  Mr and Mrs Augustine relied on the report of the expert to identify any items they say are defective or constitute incomplete work and the responsibility of S J Builders.
  21. [21]
    The further outstanding claims were for liquidated damages; variations from the contract amount; cleaning costs; rental loss; costs including the application fee, legal and expert expenses and witness fees.
  22. [22]
    Each of these will now be addressed.

Defects and Incomplete work

  1. [23]
    Mr Philip provided no independent expert opinion of the defects or otherwise of the work and no costings of any potential remediation.  Where I find remedial work must be undertaken, the only evidence I have before me is that of the building expert and I will accept that evidence. 
  2. [24]
    Where evidence is provided by Mr Philip on individual items this evidence is taken from Mr Philip’s statement undated[2] but provided in response to the report of the building expert.

Driveway

  1. [25]
    The building expert gave evidence that the driveway had been cut to remediate an electrical issue. He said the homeowners initially disagreed with the cut of the driveway and the builder offered to widen the driveway for compensation which was agree to.  The remediated section is now not bonded or fixed to the older pour and the colour match is wrong.  There has been settlement in the new work creating a trip hazard.
  2. [26]
    If the driveway was to be removed and repoured, the homeowners would have to pay for the widened section if they wanted to replace the existing structure.
  3. [27]
    Mr Philip submitted S J Builders is not responsible for the widened section.  This accords with the building expert’s view and I accept these submissions.
  4. [28]
    I accept there is a defect and accept the costing of remediation set by the building expert at $3,244.06.

Front Facade Design

  1. [29]
    The building expert gave evidence that the opening to the top of the wall on the left hand side of the entry porch was not created as shown in the drawings.  No variation have been agreed this.
  2. [30]
    Mr Philip says the opening in the front facade wall of the entry porch could not be done as it would require cutting the structural load bearing frame of the house. It was discussed and agreed with the client during construction and prior to completion. He says the building certifier approved the frame stage inspection with this amendment and issued a form 21 upon completion. Mr Philip believes there is also no change in the energy rating as it was approved by a building certifier and that this was communicated to the client during that stage.
  3. [31]
    Mr and Mrs Augustine deny approving any change.  The building expert denies any load bearing effect.
  4. [32]
    In the absence of a written variation, I accept there is a defect and accept the costing of remediation set by the building expert at $2,296.20.

Kitchen splashback

  1. [33]
    The building expert gave evidence that the circumstances of the colour choice for the splash back is a matter for this tribunal. 
  2. [34]
    Mr Philip gave written evidence that the splash back glass was ordered on 18 August 2015 with the selected colour "Bright delight".  Mr and Mrs Augustine were asked to advise of any colour change immediately. Mr Philip says despite various reminders, the request to change the colour was received on 8 September 2016. He says the supplier had already completed the application of the colour. The site manager echoes this evidence.[3]
  3. [35]
    Mr and Mrs Augustine say they selected “whisper white with sparkles” during the construction process and that the site manager was informed in August 2015 in a conversation.  They say the site manager then went on holidays.  Mr and Mrs Augustine did not recall a conversation on 8 September 2016.
  4. [36]
    In the absence of any clear evidence, I accept that there is a clear communication breakdown between the parties and I will apportion the change of the glass between the parties on a 50-50 basis.  Using the costings of the building expert, half is set at $264.05.

Three step cornices on garage, laundry and pantry

  1. [37]
    The building expert gave evidence that three step cornices are generally only used in the habitable parts of that building and that in other areas such as the garage, laundry and pantry the less expensive cove cornices are used. 
  2. [38]
    The building expert said the builder appears to have intended to only use the three step cornices as described above but this is not made clear in the contract. 
  3. [39]
    Mr and Mrs Augustine say they expected three step cornices throughout the home.
  4. [40]
    Mr Philip says the inclusion states three step cornice/coved cornices. He says it was meant and agreed to install three step cornices in the common living and habitable area and coved cornice in the non-habitable rooms.
  5. [41]
    I accept that the use of both three step and coved cornices in different parts of the build are a normal building practice and there is no requirement under the contract for three step cornices in every room.
  6. [42]
    I dismiss this item claim.

No linen chute

  1. [43]
    Mr Philip says during the design stage and at the approval of the working drawings, it was discussed and approved that a laundry chute was not possible as the media room is above the laundry. A laundry chute was also not shown in working drawing. He further says Mr and Mrs Augustine requested many changes after signing the contract and during the working drawing stage, including changes in the master bedroom ensuite, the powder room, walk in robe, kitchen and bed room 4 ensuite and bed room 4 walk in robe. The linen chute was cancelled at that time. Mr Philip says all these changes were done at the request of Mr and Mrs Augustine without any changes to the contract amount.
  2. [44]
    Mr and Mrs Augustine say S J Builders did not advise a laundry chute could not be constructed and no credit has ever been given for it not being installed.
  3. [45]
    The building expert gave evidence that he was not provided with a written variation for the removal of a chute. 
  4. [46]
    I accept there is no written variation for the removal of a chute from the contact and I therefore accept an allowance must be made for its inclusion in accordance with the contract.  The cost is set by the building expert at $266.63.

No wash basin in upstairs WC

  1. [47]
    Mr Philip says the wash basin is shown only in powder room on the ground floor, not in first floor WC. He says it was a writing error in the inclusion list mentioning wash basin in all WCs. The vanity is not shown in the contract design and working drawing and it was mutually agreed that the vanity would only be installed in ground floor powder room. The installation was as per drawing approved by Mr and Mrs Augustine.
  2. [48]
    The building expert gave evidence that based on industry practice, he is of the opinion that a virtuous china wall basin, with matching tapware, plumbing and drainage should be installed in the upstairs WC.
  3. [49]
    I accept the evidence of the building expert and will allow this item set at a cost of $1,206.52.

Cabinets not as per design

  1. [50]
    The issue identified by the building expert is that the drawings show the vanity extending wall to wall.  The wall that separates the WC from the vanity has been removed and substituted with a glass panel so that the wall becomes a glass panel.  The builder provided a sketch showing the vanity unit design. 
  2. [51]
    The design shows a separation between the vanity unit and the glass panel.  What has been constructed is the vanity unit butting against the glass panel.  To seal the vanity unit against the glass a silicone sealant has been applied.  This is clearly visible from the toilet side of the glass.
  3. [52]
    Mr and Mrs Augustine say the vanity should have been constructed as shown in the sketch[4] and not manufactured two metres wide.
  4. [53]
    The building expert gave evidence of an unsightly finish and that what would be usual building practice was leave a gap there for the purpose of cleaning.
  5. [54]
    I accept the evidence of the building expert and will allow this item set at a cost of $4,930.63.

Poor paint finish in garage

  1. [55]
    Mr Philip says he has no objection to this claim if the matter is not attended to under the QBCC insurance claim.[5]
  2. [56]
    The claim was refused by the QBCC.[6]
  3. [57]
    The building expert gave evidence that rectification involved stripping and re-applying an epoxy finish. I accept the evidence of the building expert and will allow this item set at a cost of $2,291.83.

Wrong size door in garage

  1. [58]
    Mr Philip says all the internal doors installed are 2340 mm. Only the external door at this location was 2040 mm high. Normally, an external garage door is 2040 mm high. Mr Philip says it was an error of the draft person and that this was discussed with Mr Augustine and he agreed to the change.
  2. [59]
    Mr Augustine denied these discussions took place. 
  3. [60]
    There is no variation for the wrong sized garage door.  The building expert gave evidence that the door should be replaced to reflect the one specified in the drawings and the inclusions list. 
  4. [61]
    I accept the evidence of the building expert and will allow this item set at a cost of $604.25. This item has been declined by the QBCC under the insurance policy.[7] 

Poor paint and plaster finish

  1. [62]
    The building expert gave evidence that only a sealing and undercoat had been applied to the relevant walls.  No top coat was evident on his inspection.  I accept the evidence of the building expert and will allow this item set at a cost of $13,050.38.

Tiles not laid to design

  1. [63]
    Mr and Mrs Augustine say the wall tiles in the ensuite were to be laid floor to ceiling and were to be a brown metallic tile. 
  2. [64]
    The building expert gave evidence that the updated tiling plan is inconclusive.  The marked up floor plan seems to indicate the wall in question is shaded separately to the rest of the room.  In the building expert’s professional opinion it would be very rare to see a single wall not tiled to the same height as the rest of the room, particularly in a home with ‘high end’ finishes. It would be expected that a prudent builder would tile to match the existing height of the other walls. 
  3. [65]
    Mr Philip says tiles were laid in accordance with the selection by the owner and was a variation.  This is denied by Mr and Mrs Augustine.
  4. [66]
    I am satisfied on the balance of probabilities the height of the tiles should have matched the rest of the room.  I am not satisfied there is sufficient evidence before the tribunal to conclude there was agreement on the colour of the tiles. I accept the evidence of the building expert I will allow the cost of the extra tiling at $302.54.

Window locks are rusty

  1. [67]
    The building expert gave evidence that the home is located within one kilometre of the coast.  The external door hinges, window and door furniture are manufactured with metal surfaces not suited to the salt air environment to which the property will be exposed. 
  2. [68]
    The building expert says Mr and Mrs Augustine advised Mr Philip of the corrosion as part of the defect list issued in October 2015, prior to occupation. 
  3. [69]
    The building expert gave evidence that the hinges and door furniture are not ‘fit for purpose’ and should be replaced with stainless steel items.
  4. [70]
    Mr Philip says the window locks were not rusty at the time of hand over and they became rusty after the maintenance period.  He says this is the responsibility of the owners.
  5. [71]
    As the rusting was first identified in the defects period, I do not accept Mr Philip’s evidence. 
  6. [72]
    I accept the evidence of the building expert I will allow the cost of replacing hinges, window and door furniture at $1,781.16.

Intercom fitted in wrong position

  1. [73]
    Mr Philip says the position of the intercom was fixed after discussion and verbal consent from the owner.  This is denied by Mr and Mrs Augustine.
  2. [74]
    The building expert gave evidence that there is no written variation that he has seen and the intercom should be re-located to the position shown on the contract drawings.
  3. [75]
    I accept the evidence of the building expert I will allow the cost of the extra tiling at a cost of $688.64.

Towel rail in upstairs ensuite

  1. [76]
    Mr Philip says the towel rail was installed as per industry standard and not reported at the time of handover or during the 3 month maintenance period.  He says he is not sure how the rail is not level.  He believes S J Builders is not responsible.
  2. [77]
    The building expert gave evidence that the towel rail is not level and as an installation defect, this should be rectified.  I accept the evidence of the building expert I will allow the cost of the extra tiling at $33.78.

Hot and cold kitchen tap back the front

  1. [78]
    This is clearly an installation defect and I accept must be corrected in the interests of safety.
  2. [79]
    I accept the evidence of the building expert and I will allow the cost of the rectification of the taps at $36.20.

Gap in bench top in kitchen

  1. [80]
    This item has been declined by the QBCC under the insurance policy as a matter of measurement, not building work.[8] 
  2. [81]
    The building expert gave evidence that the upright gas appliance is not flush and protrudes beyond the stone bench top.  The gas fitting should be located to align with the open space for this fitting at the rear of the appliance so the appliance can sit back hard against the wall. The builder has attempted to force it back to fit the rear space and has bent the back panel. The appliance needs to be pulled the out and repositioned.
  3. [82]
    Mr Philip says the owner selected a free standing cooking appliance and the usual gap from the wall to give a clear space was allowed for gas fitting elbow which allow removal and maintenance of the cooking appliance in the future. If the appliance is moved further back, the elbow may get damaged.  Hence, Mr Philip believes the current installation is correct and that the Commission’s inspection report dated 23  May 2016, confirms item number 18 is not defective work.
  4. [83]
    I accept the evidence of the building expert I will allow the repositioning cost at $45.00. 

Unsafe power points in bathroom

  1. [84]
    The building expert gave evidence that he believed there was a mistake in the upstairs bathroom where the electrician placed a blank plate over what was a power point. The power point has now been relocated but the blank plate behind the sink should be removed and replaced by a tile.
  2. [85]
    Mr Philip says a compliance certificate has been issued by the electrician and the building inspector. He states this item was not reported at handover or during the maintenance period.
  3. [86]
    I accept that this is a minor matter but agree with the building expert that the matter should be rectified.  I accept the evidence of the building expert I will allow the cost of rectification at $302.54.

External doors

  1. [87]
    This item was withdrawn by Mr and Mrs Augustine at the hearing.

Front deck

  1. [88]
    The building expert gave evidence that no gap exists where the deck abuts the exterior of the building.  No termite barrier is visible between the deck and the exterior wall – unlike the rear deck where a Kordon physical barrier was sighted. 
  2. [89]
    Mr Philip says installed a Kordon physical barrier was installed and provided enough gap between deck and building. A compliance certificate has been issued for termite treatment and relevant building certifier inspected and approved the work and issued Form 21.
  3. [90]
    In the absence of strong evidence from the building expert and based on the evidence of Mr Philip I am not satisfied on the balance of probabilities the barrier is not in place and I will disallow this claim.

Window sills

  1. [91]
    The building expert gave evidence that reconstructed window sills on two windows in the kitchen and the media room still don’t have the right slope away from windows.  Remedial work has been undertaken once, but the contractor builder has introduced a slope of six degrees.  A fifteen degree slope is what is typically required.  Since then, the Commission has not re-inspected to the knowledge of the building expert. 
  2. [92]
    In the opinion of the expert building inspector, this is a category one defect and should be reported to the Commission as water egress is possible, although this does not appear to have occurred so far.
  3. [93]
    Mr Philip says this item has been fixed by the sub-contractor when completing external cladding work and has been approved by the Commission.
  4. [94]
    I am satisfied on the balance of probabilities that this item should be referred back the Commission and I will disallow this claim.

Staircase

  1. [95]
    Mr Philip says the staircase was supplied and installed by the sub-contractor during construction and all the works were done as per manufacturer's specification. 
  2. [96]
    The building expert gave evidence that on inspection the stairs were found to squeak.  He says the wedges to the treads and rises are on one side only. In his view, the stairs were made too wide and cut down on one side on site to fit.
  3. [97]
    It will be necessary to put wedges in the treads and rises on the missing side of each stair to enable adjustment of the stairs to stop the squeaking.
  4. [98]
    The photographs provided in the building report show a lack of treads and rises on one side of each stair. 
  5. [99]
    I accept the evidence of the building expert I will allow the cost of remediation at $151.10.

Rear balcony

  1. [100]
    The building expert gave evidence that the outer edge of the balcony has been installed flush.  This is not in accordance with the Building Code and the Australian standards which require a 20 mm edge.
  2. [101]
    Mr Philip does not object to this item.
  3. [102]
    I accept the evidence of the building expert I will allow the cost of the remediation at $2,130.81.

Downstairs powder room 

  1. [103]
    The tiles in this area do not match the adjoining living room tiles.  The updated tiling plan shows these tiles to be the same as the hallway tiles.
  2. [104]
    Further, the downstairs powder room requires a metal angle water stop to be installed in this designated ‘wet area’ as required by the Building Code and the Australian standards AS3740-2010.
  3. [105]
    Mr Philip says these tiles were installed as per the owner’s selection but provides no evidence of this choice.
  4. [106]
    I accept the evidence of the building expert form the tiling plan and will allow the cost of the remediation at $770.94. 

Final amount

  1. [107]
    The total amount to remediate the above items is $34,397.26
  2. [108]
    These costs, as supplied by the building expert, are exclusive of an allowance for the builder’s margin and GST.  The evidence of the building expert was that both of these percentages should be added as a normal cost incurred as part of the remediation process.  I accept this evidence and will allow additional to the remediation amount, a builder’s margin of 15% and GST at 10%, totalling 25%.
  3. [109]
    The final amount for this category is $42,996.57.

Lost rent - A consequential loss?

  1. [110]
    Mr and Mrs Augustine claim loss of rent under the contract.  It was their evidence that this home was always intended to be an investment property.  They took possession of the property on 22 October 2015 and rented the property from 4 January 2016.
  2. [111]
    Evidence of the rental return from this date was given by the rental manager for the agency managing the property.  The property manager said:
    1. (a)
      The weekly rental for the first tenancy agreement was $800 per week;
    2. (b)
      The first tenants were under a lease from 4 January 2016  to 16 January 2017;
    3. (c)
      There was a rental reduction from 28 January 2016 to 3 March 2016 of $50 per week due to ongoing issues including water entering the property and building repairs;
    4. (d)
      The tenants broke the lease on 15 August 2016 but rent was paid up until 4 September 2016;
    5. (e)
      The second and current tenants pay $750 per week;
    6. (f)
      Due to ongoing building works, this rent has at times been reduced depending on the severity of the building issues as follows:
      1. In December 2016, a once off reduction of $1,000;
      2. From 5 September 2016 to 12 March 2017, a weekly reduction of $50;
      3. From 13 March  2017 to 12 November  2017, a weekly reduction of $375;
      4. From 18 December 2017 and continuing, a weekly reduction of $50.
  3. [112]
    The property manager opined that if there were no leaks or other defective building work issues with the property, the weekly rent in the current market should be $750.
  4. [113]
    It is reasonable, in her view, to reduce the rent paid by tenants in properties where there is a loss of amenity, building defects and issues with quiet enjoyment of the property. The property was subject to ongoing rectification works and as such tenants were entitled to a reduction in rent.
  5. [114]
    The total rent lost up until the date of the hearing was $6,425.00.

Discussion

  1. [115]
    Mr and Mrs Augustine are claiming this loss of rent as a consequential loss from the building contract. 
  2. [116]
    The Appeal Tribunal[9] has previously provided guidance concerning ‘consequential loss’ explaining this category of claim as first subject to the rules in Hadley v Baxendale:

… prescribe the measure of damages in respect of breach of contract to include not only damage naturally resulting from the breach ("i.e. according to the usual course of things") but also damage which might "reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it". Additional or special knowledge known to both parties may widen or contract the scope of liability for breach. These rules have been merged in a single principle.[10]

  1. [117]
    The Appeal Tribunal also point to a distinction between normal loss and consequential loss. Normal loss is loss that every plaintiff in a like situation will suffer. Consequential losses are anything beyond the normal measure, such as profits lost or expenses incurred through breach.[11]
  2. [118]
    The learned Appeal Tribunal members further refer to Environmental Systems Pty Ltd v Peerless Holdings,[12] where the Victorian Court of Appeal held:

In my view, ordinary reasonable business persons would naturally conceive of “consequential loss” in contract as everything beyond the normal measure of damages, such as profits lost or expenses incurred through breach. Despite the construction which has been put on “consequential losses” by cases such as Millar and Croudace, it would be unrealistic to suppose that the appellant and the respondent employed the expression “consequential loss” in cl 8.9 of the agreement advisedly in that sense. It is more likely in this context that they intended the expression to have its ordinary and natural meaning. Accordingly, I would construe the expression “consequential loss” in cl 8.9 as intended to have that meaning. Read in the light of the contract as a whole, and giving due weight to the context in which the clause appears, including the nature and object of the contract, I see no ambiguity which as a matter of principle would warrant a departure from that view. It follows as I see it that, although the judge’s approach in this case was in accordance with the English cases, it was not correct to construe “consequential loss” as limited to the second rule in Hadley v Baxendale.

  1. [119]
    The learned Appeal Tribunal members point to GEC Alsthom Australia Ltd v City of Sunshine which held that:[13]

…the term consequential loss connotes a loss at a step removed from the transaction and its immediate effects.

  1. [120]
    I am satisfied that this claim is more than a normal loss arising from a domestic building contract and is characterised more properly as a consequential loss. 
  2. [121]
    Mr and Mrs Augustine gave oral evidence at the hearing that it was their intention to rent the house.  Yet for the first two months after taking possession of the property they did reside in it.
  3. [122]
    I do not accord a lot of weight to this fact.  What is more important is whether renting the home on completion was within the contemplation of both parties at the time they made the contract (the company through Mr Philip and Mr and Mrs Augustine) and that loss of rent would be a probable result of a breach of the contract (my emphasis added).[14]
  4. [123]
    Mr Philip’s only response to the claim for lost rent is that it does not form part of the contract.[15]
  5. [124]
    There is no evidence before me that the intention of Mr and Mrs Augustine to rent the property was known to the builder at all. Likewise, there is no evidence to show it was within the contemplation of both parties, (in particular the builder) at the time they entered into the contract.
  6. [125]
    On that basis this claim for rent lost must fail.

Liquidated damages

  1. [126]
    Mr and Mrs Augustine claim for liquidated damages for 204 days under the contract item 18 which allows $50 for each day of delay in achieving practical completion.[16] 
  2. [127]
    The clause requires the builder to pay these damages if the builder fails to bring the works to the practical completion stage by the date set in the contract for that stage and ends on the day practical completion is reached or the owner takes possession of the works, whichever first occurs.
  3. [128]
    The contract was signed on 31 July 2014.  Item 8 of the contract allowed a construction period of 241 days.  Item 9 fixed the date of commencement as 1 September 2014 and practical completion as 31 March 2015 – 211 days after the commencement of construction (item 10).  The building permit period was set at 19 days which means construction should have commenced on 1 September 2014. In reality, building approval was gained on 9 October 2014.  The difference is 37 days (excluding both days).
  4. [129]
    Mr and Mrs Augustine say there was delay in getting approval to commence building as the builder did not conform to the developer’s covenants when drawing the plans and the developer would not consent to the plans on two occasions until they were amended.  The developer’s approval was gained on 25 September 2014.  Mr and Mrs Augustine say the covenants were supplied to the builder before the contract was signed.
  5. [130]
    Once the developer’s consent was given, the building permit was granted dated 9 October 2014.
  6. [131]
    There were 2 steps to be able to commence the building works – first developer’s approval and second council approval.  There does not seem to be an unreasonable delay on gaining council approval.  On the dates provided by Mr and Mrs Augustine this took about 2 weeks.  The time allocated in the contract by the builder was 19 days.  Minus two weeks or 14 days, the builder seems to have allowed five days for the developer’s approval. 
  7. [132]
    This seems to be a short period.  If the equivalent time is reasonably allowed for the developer as was taken by the council, the whole building permit period should have objectively been about 4 weeks or 28 days.  I will allow this 28 day period as a reasonable period for this stage of the building process.
  8. [133]
    I am satisfied therefore, on the balance of probabilities that that the extra delay of 9 days was due to the delay in the developer’s consent.  In the absence of any comment from the builder, I accept the evidence of Mr and Mrs Augustine that this was due to the plans not being drawn in conformity the developer’s covenants and will allow a period of nine days in the calculations of liquidated damages under the contract as attributable to this delay.
  9. [134]
    Work commenced on site on 3 November 2014.  The clause 8 period of 241 days minus the 19 days allowed for building approval leaves a construction period of 222 days or 31 weeks 5 days.  Counting forward this ends (rounded up by one day) on 5 June 2015.
  10. [135]
    I am satisfied that the intervening three weeks from council approval is not an unreasonable period for construction preparations between approval and commencement.
  11. [136]
    The building was handed over on 22 October 2015.  The difference between 5 June and 22 October (excluding both days) is 19 weeks and 4 days or 137 days.  Added to this is the extra 9 days referred to above becoming a total of 146 days.[17]
  12. [137]
    At $50 per day this is $7,300.00.
  13. [138]
    I am satisfied this is an appropriate amount on balance between the parties to this dispute and will allow this amount as the claim by Mr and Mrs Augustine for liquidated damages set at $7,300.00.

Variations from the contract amount

  1. [139]
    Mr and Mrs Augustine gave evidence that the total contract price was $370,000.  This amount has been paid to the builder.[18]
  2. [140]
    At the conclusion of the build, the builder provided a final tax invoice.[19] Mr Augustine identifies a number of items on the final tax invoice of variations from the builder dated 1 October 2015[20] that he disputes, in particular landscaping provisional suMrs not used.
  3. [141]
    The items on the tax invoice that are disputed or credited will now be addressed.
  4. [142]
    Mr and Mrs Augustine say the contract was varied by requests from them for upgrades of the following items:
    1. (a)
      Wiring for OH projector     $ 385.00
    2. (b)
      Electrical switch upgrades   $ 1,525.00
    3. (c)
      Additional LED lights     $ 1,500.00
    4. (d)
      Additional lights rear side   $ 200.00
    5. (e)
      2-way switches     $ 200.00

Total owing to builder  $3,810.00

  1. [143]
    Mr and Mrs Augustine say the contract was also varied by credits to them for work not carried out by the builder in the following items:
    1. (a)
      Free standing bath tub    $ 400.00
    2. (b)
      Bath hardware     $ 300.00
    3. (c)
      Kitchen appliances     $ 439.00
    4. (d)
      Letterbox      $ 51.00
    5. (e)
      Fencing and retaining wall   $ 5,500.00
    6. (f)
      Additional light fittings    $ 3,000.00
    7. (g)
      Landscaping     $ 3,500.00

Total owing to owners $13,190.00

  1. [144]
    Mr and Mrs Augustine say the other variations in dispute are:
    1. (a)
      Water filter dispenser

Mr and Mrs Augustine say there is one installed but not listed in the inclusions list.[21]  They say they asked for a quote before deciding whether to install but did not receive it.  They say there were given an approximate cost verbally but it was ordered and fitted by the builder without their permission. 

This item is not included in the inclusions list.  Although there is a dispute around the installation of this item, I am satisfied that Mr and Mrs Augustine have the benefit of this item and the builder should be paid for it. I will allow the item as an additional payment to the credit of the builder fixed at $450.00.

  1. (b)
    Scratch coat rendering

Mr and Mrs Augustine say the builder applied scratch coat rendering but say the rendering has to be re-applied and the scratch coat rendering could not be re-applied so that now it is a normal smooth rendering only. 

I am satisfied on the evidence before me that Mr and Mrs Augustine do not have the benefit of this item and the builder should not be paid for it.

  1. (c)
    Glass balustrades for stairs

The inclusions list shows “Hardwood timber stairs with polished finish from builder’s range”.  Mr and Mrs Augustine say the range shown to them included glass balustrades – which they chose.

I am satisfied this glass was chosen as described by Mrs Augustine from the builder’s range and is included under the contract as an inclusion.  I will not allow this item as an additional payment to the credit of the builder.

  1. (d)
    Under counter mounted sinks for kitchen

Mr and Mrs Augustine say the kitchen sink is under mounted because the builder allowed them to choose how the sink would be installed. They say they were not told there was an extra charge to under mount the sink. 

I am satisfied that Mr and Mrs Augustine have the benefit of this item and the builder should be paid for it. However, as the cost was not discussed on the evidence of Mr and Mrs Augustine, I will allow the item as an additional payment to the credit of the builder fixed at half the cost claimed $150.00.

  1. (e)
    Stone top an cabinets at WI Pantry

The inclusions list under “Kitchen” shows the inclusion of a 20 mm thick stone bench top in the pantry.  I am satisfied these are included under the contract as an inclusion and will not allow this item as an additional payment to the credit of the builder.

  1. (f)
    Concealed flush tank WC for powder room

Mr and Mrs Augustine asked for a quote for this installation as the room is small.  The room size required this type of installation.  I am satisfied that Mr and Mrs Augustine have the benefit of this item and the builder should be paid for it. I will allow the item as an additional payment to the credit of the builder fixed at $95.00.

  1. (g)
    Plain concrete at rear of house

Mr and Mrs Augustine say there is a slab of concrete outside the rear of the house that is part of the landscaping.  They say they were told it would cost $800.  No costing of the concrete laid was in evidence. 

I am satisfied that Mr and Mrs Augustine have the benefit of this item and the builder should be paid for it.  I will allow the item as an additional payment to the credit of the builder fixed at half the sum claimed at $1,000.00.

  1. (h)
    Glass  door LIN 1 for WIR

Mr and Mrs Augustine say this was a particular door and not covered in the inclusions list.  Mr and Mrs Augustine say they were told in an email the extra cost would be $68.00.  I accept this evidence.

I am satisfied that as Mr and Mrs Augustine have the benefit of this item and the builder should be paid for it. I will allow the item as an additional payment to the credit of the builder fixed at $68.00.

  1. (i)
    Speakers for the music system

The inclusions list shows “Hills music hub with cabling and sockets”.  Mr and Mrs Augustine say this included the speakers claimed here by the builder.  I accept this evidence.

I am satisfied this item is included under the contract as an inclusion and will not allow this item as an additional payment to the credit of the builder.

  1. (j)
    Vanity lights above mirror

Mr and Mrs Augustine say these were not installed at all.  I accept this evidence and will not allow this item as an additional payment to the credit of the builder.

  1. (k)
    Skirtings from 67 to 92 mm

Mr and Mrs Augustine say they did not request this enlargement. 

I accept this evidence and will not allow this item as an additional payment to the credit of the builder.

  1. (l)
    Splashback with sparkles

Mr and Mrs Augustine say the splashback was installed without sparkles.  I accept this evidence and will not allow this item as an additional payment to the credit of the builder.

  1. (m)
    Upgrade the entrance porch to timber decking

Mr and Mrs Augustine say they did not ask for a deck at the front of the house but one was installed and that the builder said there was no difference between tiling and timber for the surface.  No variation has been signed for this porch – in fact, no variations are in evidence at all.

I am satisfied that Mr and Mrs Augustine have the benefit of this item and the builder should be paid for it. I will allow the item as an additional payment to the credit of the builder fixed at $500.00.

  1. (n)
    Upgrade to phase 3

I accept this is a mistake by the builder and not an additional item.  I will disallow this claim.

  1. (o)
    Fix bath mix

Mr and Mrs Augustine say in one ensuite there was a particular bath tap mixer that was supplied by Mr and Mrs Augustine.  The builder installed the hardware. I am satisfied this is a responsibility of the builder under the contract as an inclusion and will not allow this item as an additional payment to the credit of the builder.

Cleaning Costs

  1. [145]
    Mr Philip says he undertook both an internal and external clean prior to handing over the property.[22]  Mr and Mrs Augustine claim $1,030.97 for further cleaning internally ($500) and externally ($530.97).  Mr and Mrs Augustine produced an invoice for the hire of a bobcat to support the cost of the external clean[23] but no further evidence on the cost of the internal clean.
  2. [146]
    Mr and Mrs Augustine say the bobcat was necessary to level a pile of soil in the corner of the back yard.  The inclusions lists identifies ‘cleaning site on completion’ but does not list a requirement to level the ground.  I am not satisfied the builder is responsible for this item.
  3. [147]
    Mr and Mrs Augustine say the inspection report they returned to the builder identified that the house required cleaning.  There was a bill for the internal clean but that has been lost in moving.  They gave evidence that this cost them about $500.
  4. [148]
    I accept this evidence and will allow this item set at an amount of $500.00.

Conclusion

  1. [149]
    The final amounts are calculated as follows:

Owing to the homeowners:

Category

Amount ($)

Defects and incomplete work

  42,996.57

Lost rent

nil

Liquidated damages

7,300.00

Variations from the contract amount owing to the owners

13,190.00

Other variations in dispute to  be paid to the owners

nil

Cleaning costs

500.00

Total costs to owners

63,986.57

Owing to the builder:

Category

Amount ($)

Defects and incomplete work

Nil

Lost rent

nil

Liquidated damages

Nil

Variations from the contract Amount owing to builder

3,810.00

Other variations in dispute to  be paid to the builder

2,263.00

Total costs to builder

6,073.00

  1. [150]
    The net amount therefore to be paid to Mr and Mrs Augustine is $ 57,913.57

Costs

  1. [151]
    Mr and Mrs Augustine claim the following costs arising from this application:
    1. (a)
      Fees of building expert for the report and giving evidence:  

$  7,660.00

  1. (b)
    Fees of real estate manager for the report and giving evidence :

$  400.00

  1. (c)
    Legal fees for preparation of documents:

$  5,987.95

  1. [152]
    Mr and Mrs Augustine provided invoices for all of the above amounts except a verbal amount indicated by the real estate manager for preparation and attendance at the hearing.[24]
  2. [153]
    Directions will be made for the filing of submissions in support of this application for recovery of costs for the report and attendance of the real estate manager at the hearing.
  3. [154]
    As all parties to this application are self-represented, the Tribunal makes the following comments concerning costs to assist the parties.
  4. [155]
    The starting point for a decision on costs is s 77(3)(h) of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’).
  5. [156]
    The section modifies the general position under the QCAT Act to give the Tribunal a broad general power to award costs in cases caught by these enabling provisions.[25] This enabling Act allows that while the power must be exercised judicially, it is ‘in markedly different terms from s 100 of the QCAT Act’[26] which starts with the parties bearing their own costs.
  6. [157]
    The Tribunal has discussed the principles applicable in a costs application in a building dispute in these matters:[27]
    1. (a)
      The Tribunal’s discretion to award costs in a building dispute is a broader and more general discretion than the one conferred by the QCAT Act because there is an express power to award costs conferred by the QBCC Act, the relevant enabling Act. Unlike in the QCAT Act, there is no strong contra-indication in s 77 of the QBCC Act against a costs order.
    2. (b)
      It remains necessary to consider whether an award of costs is justified in the circumstances.
  7. [158]
    As his Honour, the then President of QCAT determined in the appeal decision of Lyons v Dreamstarter Pty Ltd[28] about s 77 of the QBCC Act,

“The discretion to award costs starts with the proposition that it is just and reasonable that a party who causes another to incur costs should reimburse the other party for them. Otherwise the factors affecting the discretion will vary in each case.”

  1. [159]
    The Tribunal, in exercising its general discretion to award costs, may consider the factors referred to in s 102(3) of the QCAT Act.  The then Deputy President of QCAT, Judge Kingham in Ascot v Nursing & Midwifery Board of Australia[29] stated:

“The considerations identified in s 102(3) are not grounds for awarding costs.  They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order.”

  1. [160]
    Section 102 of the QCAT Act provides that the Tribunal may make an order as to costs in the interests of justice, having regard to certain factors. That section relevantly provides:

(102) Costs against party in interests of justice

(1) The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.

……

(3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following relevant sections–

a. whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g):

b. the nature and complexity of the dispute the subject of the proceeding

c. the relative strengths of the claims made by each of the parties to the proceeding

d. ….

e. the financial circumstances of the parties to the proceeding;

f. anything else the tribunal considers relevant.

  1. [161]
    These considerations can be characterised as either ‘entitling’ or ‘disentitling’ factors.
  1. [162]
    It would be of assistance to the Tribunal if these listed sections could be addressed by the parties in any further submissions.

Footnotes

[1]Exhibit 10.

[2]Exhibit 11.

[3]Exhibit 9.

[4]Expert Building Report attached to Exhibit 4, pg 28.

[5]Exhibit 11, page 3, item 15.

[6]Exhibit 7 Annexure 12 Item 22.

[7]Exhibit 7 Annexure 12 Item 24.

[8]Exhibit 7, Annexure 12 Item 8.

[9]Harrison and Anor v Meehan [2016] QCATA 197 starting at [95].

[10]Baltic Shipping Company v Dillon (1993) 176 CLR 344.

[11]Harrison and Anor v Meehan [2016] QCATA 197 starting at [96].

[12](2008) 19 VR 358.

[13]GEC Alsthom Australia Ltd v City of Sunshine (Unreported, FCA, 20 February 1996, Ryan J).

[14]See para 116 above

[15]Exhibit 2, Annexure para 12.

[16]Contract clause 18.

[17]The builder allowed an amount of $4,600 for a delay of 92 days  - see Annexure to Exhibit 2.

[18]Exhibit 5 para 34.

[19]Exhibit 13.

[20]Exhibit 13.

[21]Inclusions list annexed to contract dated 31 July 2014.

[22]Exhibit 11 para 26 and para 27.

[23]Exhibit 5 annexure ‘J’.

[24]Exhibits 14, 15 and 16.

[25]Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 at para [33].

[26]Ibid [10].

[27]Ryan v Worthington Simmons Builders [2016] QCATA 116.

[28]Ibid [11].

[29][2010] QCAT 364 at para [9]; see also Rintoul v State of Queensland & Ors [2018] QCA 20 at para [38].

Close

Editorial Notes

  • Published Case Name:

    Augustine & Anor v S J Builders Pty Ltd & Anor

  • Shortened Case Name:

    Augustine v S J Builders Pty Ltd

  • MNC:

    [2018] QCAT 248

  • Court:

    QCAT

  • Judge(s):

    Member Gardiner

  • Date:

    01 Aug 2018

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Ascot v Nursing & Midwifery Board of Australia [2010] QCAT 364
2 citations
Jump To
Cite 1 - [2010] QCAT 364
Cite 2 - [2010] QCAT 364
Baltic Shipping Company v Dillon (1993) 176 CLR 344
2 citations
Jump To
Cite 1 - (1993) 176 CLR 344
Cite 2 - (1993) 176 CLR 344
Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd (2008) 19 VR 358
2 citations
Jump To
Cite 1 - (2008) 19 VR 358
Cite 2 - (2008) 19 VR 358
Hadley v Baxendale [1854] EWHC J 70
1 citation
Jump To
Cite 1 - [1854] EWHC J 70
Harrison and Anor v Meehan [2016] QCATA 197
3 citations
Jump To
Cite 1 - [2016] QCATA 197
Cite 2 - [2016] QCATA 197
Cite 3 - [2016] QCATA 197
Lyons v Dreamstarter Pty Ltd [2011] QCATA 142
3 citations
Jump To
Cite 1 - [2011] QCATA 142
Cite 2 - [2011] QCATA 142
Cite 3 - [2011] QCATA 142
Rintoul v State of Queensland [2018] QCA 20
1 citation
Jump To
Cite 1 - [2018] QCA 20
Ryan v Worthington Simmons Builders [2016] QCATA 116
2 citations
Jump To
Cite 1 - [2016] QCATA 116
Cite 2 - [2016] QCATA 116

Cases Citing

Case NameFull CitationFrequency
Sharma v Woolfson [2020] QCAT 2712 citations
1

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