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Platinum Property Group Pty Ltd v Dilworth Constructions Pty Ltd[2018] QCAT 267

Platinum Property Group Pty Ltd v Dilworth Constructions Pty Ltd[2018] QCAT 267

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Platinum Property Group Pty Ltd v Dilworth Constructions Pty Ltd [2018] QCAT 267

PARTIES:

PLATINUM PROPERTY GROUP PTY LTD

(applicant)

v

DILWORTH CONSTRUCTIONS PTY LTD

(respondent)

APPLICATION NO/S:

BDL169-16

MATTER TYPE:

Building matters

DELIVERED ON:

13 August, 2018

HEARING DATE:

15 September 2017

HEARD AT:

Maroochydore

DECISION OF:

Member Ann Fitzpatrick

ORDERS:

  1. The Respondent Dilworth Constructions Pty Ltd file and serve submissions in relation to the calculation of penalty interest pursuant to s 67P of the Queensland Building and Construction Commission Act 1991 (Qld) on the sum of $4,404.38, setting out the date on which the calculation commences and providing the calculation until 13 August 2018: by 4pm 27 August 2018.
  2. The Applicant Platinum Property Group Pty Ltd file and serve any submissions in reply: by 4 pm 10 September 2018.

CATCHWORDS:

Building dispute – principal and subcontractor – defective work – offset cost of rectification and moneys owed under the contract – interest and penalty interest

Queensland Building and Construction Commission Act 1991 (Qld), ss 67P and 77(2)

Barry Pitt Construction Pty Ltd v Smith & Anor [2014] QCATA 339

Clark v Macourt (2013) 253 CLR 1

Lida Build Pty Ltd v Miller & Anor [2013] QCATA 139

Robinson v Harman (1848) 1 Ex 850

Sterling Estates Development Corporation Pty Ltd v Malouf [2003] NSWCA 278

APPEARANCES & REPRESENTATION:

Applicant:

Mr A Stopka, Director

Respondent:

Mr G Dilworth, Director

REASONS FOR DECISION

The nature of the claim and cross-claim

  1. [1]
    This matter involves:
    1. (a)
      a claim by the Applicant for recovery of the cost of rectifying and completing work undertaken by the Respondent as its subcontractor, and an earlier subcontractor, in the construction of a house at 11 Nevis Court, Parrearra, Queensland, in an amount of $14,083.00 plus interest; and
    2. (b)
      a counter-application for recovery of unpaid invoices made by the Respondent against the Applicant, in an amount of $4,404.38, a further sum of $862.85 for the cost of materials, plus interest.

The proceeding

  1. [2]
    This matter commenced as a minor civil dispute in the Magistrates Court at Maroochydore.  It was then transferred to the Building Matters List in this Tribunal, following compliance with Section 77(2) of the Queensland Building and Construction Commission Act, 1991 (Qld).
  2. [3]
    Mr Anthony Stopka, Director of the Applicant, conducted the Applicant’s case.  Mr Stopka gave evidence. The Applicant also called Mr John Escher, Carpenter, and Mr Mike Watts, Building Consultant. 
  3. [4]
    The parties have filed many copies of material since the matter commenced. At the hearing the following documents were isolated and relied upon by the parties.
  4. [5]
    The Applicant relied upon the following material tendered as Exhibits at the hearing:
    1. (a)
      Statement Mr Anthony Stopka, filed 10 July 2017 (Exhibit 1);
    2. (b)
      Affidavit of John Escher, filed 30 March 2016 (Exhibit 2);
    3. (c)
      Photograph of floor installation and rectification (Exhibit 3);
    4. (d)
      Expert Report of Mr Mike Watts, filed 4 February 2017 (Exhibit 4);
    5. (e)
      Bundle of Invoices in relation to rectification work (Exhibit 7);
    6. (f)
      Reply document, plus attachments, filed 15 August 2017 (Exhibit 10).
  5. [6]
    Mr Grant Dilworth, Director, appeared on behalf of the Respondent.  Mr Dilworth gave evidence.  The Respondent also called an expert witness, Mr Nathan Moran, Building Consultant. 
  6. [7]
    The Respondent relied upon the following material:
    1. (a)
      Statement of Evidence of Grant Dilworth, filed 30 August 2017, together with attachments.  The attachments appear as attachments to the same statement of evidence which was undated but filed on 10 August 2017 (Exhibit 5);
    2. (b)
      Summary document in relation to Defects List, undated (Exhibit 6);
    3. (c)
      Report Mr Nathan Moran, filed 5 March 2017 (Exhibit 8);
    4. (d)
      Response and Counter-application for moneys owed, filed 24 August 2017 (Exhibit 9).
  7. [8]
    Mr Watts and Mr Moran participated in a conclave, resulting in a Conclave Report dated June 2017 to which I have referred.
  8. [9]
    The parties were also directed to complete a Scott Schedule, which was filed in the Tribunal on 19 May 2017, to which I have referred.
  9. [10]
    Finally, the Applicant relied upon an initial Inspection Report prepared by the Queensland Building and Construction Commission (QBCC), dated 26 November 2015, filed together with the original Application to which I have referred.

Background

  1. [11]
    The Applicant was the builder of a house at 11 Nevis Court, Parrearra, Queensland.
  2. [12]
    The Applicant originally contracted with a Mr Jack Rangely to undertake carpentry works as subcontractor.  Mr Rangely was unable to complete the contract due to an injury and the Respondent agreed to complete the work.  The terms on which the Respondent agreed to continue the work is in dispute.
  3. [13]
    The documents which potentially form part of the contract between the Applicant and the Respondent are:
    1. (a)
      A standard form Master Builders Period Subcontract, dated 1 July 2014, signed by the Applicant on 12 March 2015, but unsigned by the Respondent.  A registered post record purports to show the document being sent to the Respondent on 12 March 2015;
    2. (b)
      Work Order 0079/445, addressed to “Carpenter”, noting delivery date 1 October 2014;
    3. (c)
      Work Order 0079/450, addressed to the Respondent, noting delivery date 16 January 2015, emailed to the Respondent on 16 January 2015;
    4. (d)
      Email Matt Nilon, the Applicant’s site supervisor, to Jack Rangely and Grant Dilworth of the Respondent dated 20 November 2014;
    5. (e)
      Email Grant Dilworth to Matt Nilon dated 21 November 2014.
    6. (f)
      Text messages between Matt Nilon and Grant Dilworth in relation to the performance of extra work;
    7. (g)
      Construction plans.
  4. [14]
    The statement of Grant Dilworth refers to some discussions between himself and Matt Nilon at the time of reaching agreement to undertake subcontracting work. Mr Dilworth also refers to conversations between himself and Mr Nilon in relation to the performance of extra work and performance of rectification of work undertaken by Mr Rangely at the commencement of the agreement between the parties.
  5. [15]
    Work Order 0079/445 required carpentry works to erect frames, trusses, steel posts, bulkheads, cyclone rods and upper flooring and sarking. That work was to be undertaken by Mr Rangely.  Work Order 0079/450 required lockup and an extra allowance for top hung windows, external ceiling battens, steps to a theatre and installation of an extra bath.
  6. [16]
    Each Work Order bears a number of “Notes” at the base of the Work Order, including:

‘6. Progress claim invoices for part payment of this order will not be accepted.

8. All work must be completed prior to submitting invoice.’

  1. [17]
    The email dated 20 November 2014, from Matt Nilon to Jack Rangely and Grant Dilworth, said:

Hi Jack and Grant, I believe it has been worked out between you that Grant will be taking over the carpentry contract and there will be no moneys owed to Jack Rangely, by Platinum Residential Designer Homes, for works done on the project by himself or any of his workers.  Grant will take full responsibility for any hourly rate works owed to Jack Rangely and accept full responsibility for the carpentry contract in a financial and works liable manner.  Please can both of you respond formerly (sic) so we are all completely transparent and there is no disagreement.

  1. [18]
    The email from Grant Dilworth to Matt Nilon dated 21 November 2014, said:

Hello Matt, Yes I am quiet (sic) happy to take the contract of 875 Nevis Crt, Kawana, on from Jack.  As discussed with Jack, I will pay his labour in an hrly form.  To be invoiced at a later date when first payment is received from Platinum Homes.  Also, if any further rectifications due to work completed by Jack will be fixed either by himself or myself at cost.

  1. [19]
    It is an issue in the case as to whether the Respondent took responsibility for defective work performed by the previous subcontractor, Mr Rangely.  The Respondent denies that it took on that responsibility. The Applicant asserts that it did bear that responsibility, on the wording in the email.
  2. [20]
    It is uncontentious that when the Respondent commenced work on 17 November 2014, the following works were already completed by Jack Rangely:
    1. (a)
      the lower frames;
    2. (b)
      floor joists and flooring;
    3. (c)
      the majority of the upper frames.
  3. [21]
    At the time of taking on the job Grant Dilworth and Matt Nilon inspected the work undertaken by Mr Rangely, noted the need for some rectification and rectification work was undertaken by Grant Dilworth.
  4. [22]
    Work was commenced on site by the Respondent on 17 November 2014. At that time the frame stage was 80% completed.
  5. [23]
    Mr Dilworth’s statement of evidence records, and it was unchallenged, that after 17 November 2014 the Respondent attended to rectification of Mr Rangely’s work including frame rectification, steel post and beam rectification, ply bracing, cyclone strapping and beam rectification and living area back beam and post rectification.
  6. [24]
    The required work was performed including extra work which was verbally requested on site. The extra work included alteration of the garage frame, a window head/beam, alteration to the lower floor living /hall corner, cutting concrete for large sliding doors on the lower level, garage door entry, and lower level toilet wall relocation, removal of existing bath and replacement with a larger bath, 7 window alterations, kitchen bulkhead alterations, 2 door alterations and extra steel work in the study.
  7. [25]
    Mr Dilworth’s uncontested evidence is that many extras were verbally agreed and completed before any work order was issued.
  8. [26]
    On 19 February 2015 the Applicant’s site supervisor, Mr Escher emailed Mr Dilworth a list of rectification and completion work required following a frame check by him.  Mr Dilworth’s evidence is that the work had been completed by work on 5 February 2015 through to 25 February 2015, apart from some alterations or extras. That is a matter in issue.
  9. [27]
    The Respondent performed its last work on the site on 25 February 2015.
  10. [28]
    On 26 February 2015, Matt Nilon emailed the Respondent advising that:

You have three days to rectify the list John has or we will engage another contractor to complete the works…No further monies will be paid until a Period Trade Contract is signed and returned to the office.  If you want to forward me the time to meet to get this done then that is fine. I have tried repeatedly to meet with you but to no avail.  If the period trade contract is signed before tomorrow at 9am we will then be able to process your payments for this month’s pay run.  If we don’t get the Period trade contract back then it will go into the next month pay run and so on until it is finalised.

  1. [29]
    At the end of three days other contractors undertook work allegedly correcting and completing work for which the Respondent was responsible.
  2. [30]
    The Respondent issued invoices numbered 13 and 14 on the Nevis Court job, dated 27 February 2015.  The outstanding Nevis Court invoices were eventually the subject of an adjudication pursuant to the Building and Construction Industry Payments Act 2004 (Qld). The adjudicator did not consider he had jurisdiction to determine the matter. Invoices numbered 13 and 14 are now the subject of the counter-application.
  3. [31]
    On 2 March 2015 emails were sent from the Applicant to the Respondent requiring a Contract to be signed on the Nevis Court job.
  4. [32]
    On 2 March 2015 a Schedule of Payment relating to the Nevis Court invoices was issued setting out a list of required rectification work. That Schedule was delivered as part of the adjudication process.
  5. [33]
    On 3 March 2015 a request for an onsite meeting was made by Matt Nilon to Grant Dilworth, with no response.
  6. [34]
    On 12 March,2015 Matt Nilon and Grant Dilworth exchanged emails. The emails record receipt of the Respondent’s last two invoices numbered 13 and 14 and notes that other contractors are undertaking rectification of the Respondent’s work.  The Respondent requested documentation and pictures of work needing to be rectified and said that it had completed the work to a satisfactory standard. The Applicant replied that it had tried to talk to Mr Dilworth about the matter but he “grabbed gear and drove off”.  Mr Nilon records:

…You refuse to communicate verbally or meet then how can we possibly resolve anything with you? The contract with our client cannot wait for you to respond, outside of the three days formal notice given, hence the reason we moved forward after giving you the three days’ notice required to rectify the defective works.

  1. [35]
    Mr Dilworth’s statement is not clear as to the date on which he drove off site, which is the incident referred to by Mr Nilon in the 12 March 2015 email. However, in the entry with respect to 12 March 2015 in his statement, Mr Dilworth refers to a site meeting with John Esher to discuss rectification items. Contentious matters between them were whether:
    1. (a)
      sill plates were to be done by the frame company;
    2. (b)
      frame alterations were complete;
    3. (c)
      the extra cavity slider alteration in the media room was an extra;
    4. (d)
      the slope of the media roof was completed as per plan issue H.
  2. [36]
    Mr Dilworth says that at that meeting Mr Escher accused Mr Dilworth of “dodgy work”.  Mr Dilworth says that after that he thought there was never going to be a conclusion to the issue and decided to pack up and leave the site. In doing so he drove past Mr Nilon.
  3. [37]
    On 26 November 2015 the QBCC provided an initial inspection report following complaints by the owner of the Nevis Court house, about defective and incomplete work.  Noise in the upper floor structure is relevant to the Respondent. The QBCC concluded that noise in the floor structure of the upper floor level was excessive and therefore a defect which required rectification.  The QBCC Inspector noted that there may be a number of reasons for the noise, including that:
    1. (a)
      the design plans indicate there is a combination of steel bears and timber floor joists in these locations.
    2. (b)
      the floor joists in the main bedroom area are just under maximum span for the size.
    3. (c)
      movement in the particle board floor tongue can be increased by wetting of the boards during construction stage.
  4. [38]
    Other items dealt with by the QBCC are not relevant to this dispute.
  5. [39]
    The cause of the squeaking floor and the question of who is responsible to rectify it are issues in this matter along with the question of responsibility to rectify other defects related to carpentry work.

The Applicant’s Case

  1. [40]
    Mr Stopka’s statement of evidence provides that the Respondent agreed to take over a subcontract from Mr Rangely and to take full responsibility for any possible rectification works that may result.
  2. [41]
    Mr Stopka gave evidence that the work performed on the site was defective and that some works were incomplete.  Mr Stopka’s evidence is that the working relationship with the Respondent broke down so that rectification and completion was not finalised by the Respondent, resulting in cost to the Applicant in engaging other persons to rectify and complete.
  3. [42]
    Mr Stopka’s Statement of Evidence refers to a list of defects prepared by Mr John Escher and provided to the Respondent by email on19 February, 2015.
  4. [43]
    The Scott Schedule refers to items from that list of defects and adds the squeaking floor defect as Item 52.
  5. [44]
    The Applicant’s claim is for the sum of $14,083.38 referred to in the following Tax Invoices forming Exhibit 7 in the proceedings:
    1. (a)
      Platinum Residential Designer Homes Tax Invoice 1053, dated 14 March 2016 – “Costs incurred by other trades to rectify defective works discovered prior to 4/11/15” - $7,652 (inclusive of GST). The description is otherwise unparticularised but goes on to show an offset of invoices 13 and 14 from the Respondent resulting in a claim of $3,227.62.
    2. (b)
      Rob Sibbons Tax Invoice No. 31, dated 8 March 2015 – “Repair and rebuild parapet wall; packing out walls for NRG board to suit brickwork; removal and reinstall insulation” - $1,200.00 (no GST charged);
    3. (c)
      Natt Dieperink Invoice No. 15, dated 20 March 2015 – “Batten out existing external walls to suit NRG foam to brickwork.  Build parapet walls to suit 450mm centres fixing point for NRG foam” - $1,080.00 (no GST charged);
    4. (d)
      Tim Viner Invoice No. 42, dated 20 March 2015 – “Carpentry labour” - $2,300.00 (no GST charged);
    5. (e)
      Peter Clark Building Invoice No. 226, dated 23 March 2015 – “Frame restoration” - $1,012.00 (inclusive of GST);
    6. (f)
      Rob Sibbons Invoice No. 35, dated 23 March 2015 – “Repair and rebuild parapet wall, install new bulkheads, packing out walls for NRG board to suit brickwork; remove and reinstall front door framing, install front door jamb, install cavity sliding door tracks, removal and reinstall insulation” - $1,200.00 (no GST charged);
    7. (g)
      Natt Dieperink Invoice No. 17, dated 30 March 2015 – “Batten out existing soffits to suit NRG foam to 450mm centres. Build bulkhead around steel beam to suit 450mm centres fixing point for NRG foam” - $860.00 (no GST charged);
    8. (h)
      Platinum Residential Designer Homes Invoice No. 1054, dated 14 March 2016 – “Invoice for costs incurred by other trades to rectify defective works… Invoice for Project Officer to oversee rectifications of works” - $6,431.38 (inclusive of GST);
    9. (i)
      Platinum Residential Designers Homes Invoice No. 1064, dated 5 April 2016 – “Invoice for Project Officer to oversee rectification of works” - $900.00 (inclusive of GST);
    10. (j)
      Coastal Fasteners Pty Ltd Invoice No. 289964, dated 2 February 2016 – “Screws, washers, drill – squeaky floor maintenance” - $44.42 (inclusive of GST);
    11. (k)
      Coastal Fasteners Pty Ltd Invoice No. 291356, dated 24 March 2016 – “Ultraset sausage, s/hanger” - $68.33 (inclusive of GST);
    12. (l)
      Mick Lewis Painting Contractors Invoice No. 1315, dated 14 March 2016 – “Repainted loungeroom ceiling following rectification work” - $374.00 (inclusive of GST);
    13. (m)
      Integrity Plastering Invoice dated 16 February 2016 – “Repairs to living room ceiling plus materials” - $2,378.20 (inclusive of GST);
    14. (n)
      Sorensen Family Trust Invoice dated 5 February 2016 – “Relay and repair carpet” - $220.00 (inclusive of GST);
    15. (o)
      Coastal Fasteners Pty Ltd Invoice No. 289510, dated 27 January 2016 – “Batten screws” - $26.40 (inclusive of GST);
    16. (p)
      Coastal Fasteners Pty Ltd Invoice No. 289422, dated 22 January 2016 – “Ultraset sausage and two nozzles, batten screws” - $71.50 (inclusive of GST);
    17. (q)
      JC Hire Invoice No. KIN11962, dated 31 January 2016 – “Vacuum cleaner wet dry three days hire” - $151.28 (inclusive of GST);
    18. (r)
      Couzens Cleaning Services Invoice No. 356, dated 14 March 2016 – “Final clean 2.5 hours” - $107.25 (inclusive of GST);
    19. (s)
      Escher Family Trust Invoice No. 100, dated 15 February 2016 – “Fix squeak in upstairs bedrooms floor” - $2,090.00 (inclusive of GST).
  6. [45]
    Under cross-examination, Mr Stopka could not allocate many of the Invoices to specific items of defective or incomplete work.  No person who undertook the work described in the invoices was called to give evidence.
  7. [46]
    The Applicant’s part of the Scott Schedule does not provide any clarity as to what cost can be allocated to what item of allegedly defective or incomplete work.
  8. [47]
    Mr Stopka agreed in cross examination the following invoices are insufficiently particularised to know what work they relate to or do not relate to work on the defects list:
    1. (a)
      Platinum Invoice 1053, dated 14 March 2016;
    2. (b)
      Rob Sibbons Invoice No 31, dated 8 March 2015;
    3. (c)
      Natt Diepering Invoice No 15, dated 20 March 2015;
    4. (d)
      Tim Viner Invoice No 42, dated 20 March 2015;
    5. (e)
      Peter Clark Building Invoice No 226, dated 23 March 2015;
    6. (f)
      Rob Sibbons Invoice No 35, dated 23 March 2015;
    7. (g)
      Natt Dieperink Invoice No 17, dated 30 March 2015;
    8. (h)
      Platinum Invoice No 1064, dated 5 April 2016.
  9. [48]
    The work the subject of these invoices does not appear on the Scott Schedule and does not form part of the claim.  Accordingly, they will not be considered further.
  10. [49]
    Mr Stopka’s evidence was not clear as to how the invoices in relation to the Vacuum Hire and Cleaning Service related to allegedly defective work. I therefore exclude these invoices from further consideration.
  11. [50]
    The evidence of Mr Stopka was that the remaining invoices related to rectification of the squeaking floor.  Under challenge as to why it was necessary to pull up the carpet when the floor could be seen from below, he responded that it was easier to do so.
  12. [51]
    In cross-examination, it was put to Mr Stopka that the Respondent was only to take on work from the previous subcontractor, not take it over.  It was put that the Respondent was not responsible for the previous subcontractor’s defective work. Mr Stopka denied that was the case, referring to the email exchange of 20 and 21 November 2014 between Matt Nilon and Grant Dilworth.  He also gave evidence that the Respondent accepted payment for the whole job, which is not disputed.
  13. [52]
    In relation to the inspection for defects undertaken by Mr Escher, Mr Stopka said that Mr Escher worked under the builder on-site, Mr Nilon.  He acknowledged that Mr Escher was not on-site to view lifting of the flooring frames. 
  14. [53]
    In relation to the squeaking floor, which is Defect number 52 in the Scott Schedule, Mr Stopka relied upon the QBCC Report as evidence of the defect. The QBCC Inspector was not called to give evidence. Mr Stopka gave evidence that the flooring system was sound and passed certification, but it was discovered at Practical Completion stage that there was a squeak in the floor in the master bedroom and passage way. His evidence was that a timber bearer was rubbing against steel, causing the squeaking. Mr Stopka’s statement of evidence attaches a flooring specification as attachment 4. He was clear under cross examination, having reference to that specification, that there should have been up to a 3mm gap between the joist and beam and that the gap was not there. He said that inserting a wedge to create a gap, as demonstrated in the photograph being Exhibit 3, corrected the problem.
  15. [54]
    Mr Stopka denied that there was inadequate supervision on-site.  Mr Stopka denied that rain had caused the chipboard timber flooring to swell, because it was covered by the roof and further, every house with a chipboard floor is rained on. 
  16. [55]
    It was put to Mr Stopka that three business days were not given for rectification because the Notice Requiring Rectification was given on a Friday and a new contractor was appointed on Monday to conduct rectification work. Mr Stopka’s response was that previous emails had not been responded to and that the Respondent had more than 3 days to deal with the issues.
  17. [56]
    Mr Escher gave evidence on behalf of the Applicant.  He is a qualified Carpenter and Cabinet Maker.  His role was as a contractor working under Mr Nilon to check the frame.  He compiled a list of defects and provided the list to Mr Dilworth.
  18. [57]
    Mr Escher said that he was informed by Mr Dilworth, two days after he received the list, that all the rectification work had been done.
  19. [58]
    Mr Escher said he then checked and noted that not all matters had been attended to.  He was unable to say in evidence which items had been attended to out of the list of 52 and which items had not been attended to.
  20. [59]
    Mr Escher gave evidence that he was present when photographs of alleged defects were taken. The photographs are attached to Mr Stopka’s statement.  When taken through the photographs, it appeared that many of the photographs did not depict matters on the list of 52 defects.  In relation to some photographs, it was not possible for Mr Escher to make out what the photograph depicted.
  21. [60]
    Mr Escher’s evidence was that after giving the list to Mr Dilworth, he could see that there were no rods, strapping or framing of the parapets done by the Respondent.  Otherwise, he did not note down what was done and not done.  He acknowledged that some of the defective items were rectified.
  22. [61]
    In relation to the squeaking floor, Mr Escher said that the ceiling under the upper floor was taken down in order to inspect the floor.  He saw that the joists were hard against the steel beam and timber was rubbing.  There was no gap.  Mr Escher gave evidence that he rectified the defect by inserting a wedge and gluing the floor.
  23. [62]
    Mr Escher was unable to say whether the floor had been installed correctly.  He did not observe the installation.
  24. [63]
    When asked how the house could progress to plastering if the floor was not correctly installed, Mr Escher said that the problem showed up later.
  25. [64]
    Mr Dilworth put it to Mr Escher that the Site Supervisor should have checked the floor.  Mr Escher responded that a qualified Carpenter should have installed the floor properly.  Mr Escher said that the tradesperson is responsible for his work.
  26. [65]
    No evidence was given that the Respondent was called upon to rectify the squeaking floor.
  27. [66]
    Mr Watt was called by the Applicant as an expert.
  28. [67]
    The Joint Experts Report provided to this Tribunal indicates that defects were rectified and completed prior to inspection by either expert.  As a consequence, neither expert was able to say whether the work was defective.
  29. [68]
    Mr Watt was able to give evidence that the cost of rectification and completion with respect to the list of 52 items appeared to be reasonable.  He did not break down the Invoices by reference to the defects.

The Respondent’s Case

  1. [69]
    Exhibit 6, headed “52 defects list”, is a list of the alleged defects and incomplete work, prepared by Mr Dilworth, with the addition of the squeaking floor. Exhibit 6 includes Mr Dilworth’s comments as to rectification and completion.
  2. [70]
    By reference to Exhibit 6, Mr Dilworth’s evidence is that all the work on the “52 defect list” was completed, except for that set out below.  As to the completed work, Mr Dilworth relied on diary notes as evidence that the rectification work was completed. The diary notes form part of his statement of evidence (Exhibit 5). The following work was not completed by the Respondent and the reasons for non-completion appear in Exhibit 6 and in the Scott Schedule:
    1. (a)
      (defect list item No. 3) - Move front door frame to suit concrete. Mr Nilon told him that he would get a concrete cutter in to remove the excess concrete and keep the wall in that position as per the plan;
    2. (b)
      (defect list item No. 6) - Put 230 x 70 nib on foyer/garage wall all the way to the ceiling (left side of garage 820 door marked on concrete).  Mr Dilworth was waiting on a variation costing as this was an extra and not present on Sheet 5 of 21 of the plans;
    3. (c)
      (defect list item No. 20) - Fit 90 x 45 studs to create bigger pocket for one 500-millimetre cavity slider.  This was an alteration from the issued plans “H”, agreed as an extra on which Mr Dilworth was waiting for a costing;
    4. (d)
      (defect list item No. 21) - Put in solid head and fix track. This was an alteration from the issued plans “H”, agreed as an extra on which Mr Dilworth was waiting for a costing.
    5. (e)
      (defect list item No. 22) - Fix bottom track.  This was an alteration from the issued plans “H”, agreed as an extra on which Mr Dilworth was waiting on a costing.
    6. (f)
      (defect list item No. 23) - Get lower roof falling to riverside and create box gutter.  This was an alteration from the issued plans “H”, Mr Dilworth was waiting on a variation costing and materials.
    7. (g)
      (defect list item No.24) – Put floor through the whole stairwell.  Set-up for 168mm rise. There was no allowance for this work in Works Order 0079/450 and no materials on-site. Mr Nilon told Mr Dilworth the stair company was to do the work;
    8. (h)
      (defect list item No. 31) – Drop aircon box. Matt Nilon was to reorganise the refrigeration company to come back and extend their duct work.  The bulkhead had changed from the original design.  The bulkhead alteration was an extra.  The air-conditioning duct work was too short to be lowered to the new ceiling height;
    9. (i)
      (defect list item No. 33) – Need triple window sill.  The rectification work was performed by Simon Home Frame & Trusses;
    10. (j)
      (defect list item No. 34) – Need triple window sill – rumpus.  This was rectified by Simon Home Frame & Trusses;
    11. (k)
      (defect list item No. 36) – Need double window sill – rumpus. This was rectified by Simon Home Frame & Trusses;
    12. (l)
      (defect list item No. 44) – Need to stiffen bottom sill window. This was rectified by Simon Home Frame & Trusses;
    13. (m)
      (defect list item No. 52) – Squeaking floor. The floor was installed by Jack Rangely. Mr Dilworth asserts that the agreement in the 21 November 2014 email with Matt Nilon was that Jack Rangely was responsible for rectification of defective work undertaken by him. Further, the work in question was constructed before 1 June 2015, falling under the QBCC’s Accountability for Subcontractor Defects Policy.
  3. [71]
    Apart from the question of who is responsible for work undertaken by Mr Rangely, none of the matters in Exhibit 6 were expressly challenged by Mr Stopka.
  4. [72]
    In cross-examination, Mr Stopka put to Mr Dilworth that the Respondent accepted the contract and received all money under the contract when he took over the work of Mr Rangely. This was not disputed.
  5. [73]
    Mr Dilworth referred to communications between himself and Mr Rangely in relation to payment for work done by Mr Rangely to the point of the takeover. The arrangement was that the Respondent would pay Mr Rangely an hourly rate for work done by him, once the Applicant paid the Respondent.  Mr Dilworth denied that there was any arrangement with Mr Rangely to recover from him if Mr Dilworth had to fix his defective work.  I note in the material before me at page 19 of the second bundle of attachments to Mr Dilworth’s Statement of Evidence, an email from Mr Dilworth to Mr Rangely.  The email says:

Hey Jack, Don’t know how you got that figure??  I ran the numbers you gave me in the previous email and got a total of $7,414.00 including GST.  Not to mention the 20 hours wages I’ve lost fixing your things up!!  Revise the invoice please.

  1. [74]
    Mr Nathan Moran gave evidence as an expert on behalf of the Respondent.  Like Mr Watt, he was unable to comment on having observed any defective work.
  2. [75]
    In relation to the squeaking floor, he suggested that any problems were the fault of a lack of supervision by the builder and the possibility that rain could have affected the chipboard and the gap between timber and steel.  Mr Moran expressed the opinion that searches reveal the men on site were not properly qualified to engage in supervision.  He expressed the view that under the relevant QBCC policy, the builder is responsible for the work in question.
  3. [76]
    Mr Dilworth gave evidence in relation to his counter-application that the sum of $4,404.38 remains owing for work performed, set out in Invoice No. 13 in the sum of $3,104.38 and Invoice No. 14 in the sum of $1,320.00. He also referred to a sum of $862.85 for the cost of materials used on the job, but said that an invoice had never been rendered for that amount.
  4. [77]
    When Mr Stopka gave evidence in relation to the counter-application, he acknowledged the work the subject of the Respondent’s outstanding invoices was done, and that payment was due.  Mr Stopka gave evidence that he with-held payment because he intended to set-off the amount of the Respondent’s Invoices against any moneys found to be owing to the Applicant in these proceedings.

Issues to be Determined

  1. [78]
    Neither party made final submissions, indicating instead that they were satisfied their position was set out in their statements.
  2. [79]
    The following issues need to be determined in this matter:
    1. (a)
      what were the relevant terms of the contract between the Applicant and the Respondent;
    2. (b)
      has the Applicant established that there was defective and incomplete work for which the Respondent is responsible;
    3. (c)
      has the Respondent established that it has rectified and completed work for which it is contractually responsible;
    4. (d)
      has the Applicant established the cost of rectification and completion not performed by the Respondent;
    5. (e)
      does the Applicant have a legal basis on which to recover the cost of rectification and completion;
    6. (f)
      is the Respondent entitled to an order for payment of money claimed pursuant to its counter-application?

Findings

The Contract

  1. [80]
    I am unable to find that any formal contract governs the terms of the agreement for the Respondent to perform work as a subcontractor for the Applicant.  The Period contract was not signed by both parties. It was forwarded to the Respondent after the last work was performed by the Respondent. There is no evidence that the Respondent agreed to its terms.
  2. [81]
    On the evidence, the contract is comprised of terms which are partly oral and partly written.
  3. [82]
    Plainly the parties agreed that work would be performed by the Respondent for the Applicant. I find that the express terms of the contract are set out in Work Order 0079/445; Work Order 0079/450; the email exchange between Matt Nilon, Grant Dilworth and Jack Rangely dated 20 and 21 November 2014; text messages in relation to the performance of extra work dated 4 and 5 February 2015; and construction plans provided to the Respondent during the project. 
  4. [83]
    I accept Mr Dilworth’s evidence that there were also verbal agreements for extra work to be performed, which was in fact performed.
  5. [84]
    I accept Mr Dilworth’s evidence that some extra work was agreed to be performed, which fell outside the scope of the original work orders, but no costing had been agreed. That work is noted as items 6, 20, 21, 22 and 23 in Exhibit 6 referred to earlier in this decision. 
  6. [85]
    As to the meaning of the email exchange between Mr Nilon, Mr Dilworth and Mr Rangely, dated 20 and 21 November 2014, I find that it is a term of the contract between the parties that the Respondent will meet the cost of rectification work and will undertake any necessary rectification work, including in relation to work performed by Mr Rangely at its own cost.  That finding arises from:
    1. (a)
      the words in the 21 November 2014 email that: ‘…if any further rectifications due to work completed by Jack will be fixed either by himself or myself at cost’. I note that Mr Rangely was injured and unable to work so the prospect of him performing work is unlikely. As an express alternative to Mr Rangely undertaking rectification work Mr Dilworth agreed to rectify “work completed by Jack”;
    2. (b)
      the Respondent being paid in accordance with the Work Orders for all carpentry work including all work performed by Mr Rangely; and
    3. (c)
      the Respondent in fact undertaking rectification of Mr Rangely’s work but not seeking to recover the cost of that work from Mr Rangely; and
    4. (d)
      the fact that the invoices from the Respondent to the Applicant do not seek to recover the cost of rectification work from the Applicant.
  7. [86]
    I do not accept the evidence of Mr Dilworth that he was not contractually bound to rectify Mr Rangely’s work, in the face of his express agreement to do so.  Mr Dilworth did not give any evidence as to what he meant by the words “fixed…by myself at cost”. Mr Stopka’s evidence was that he understood those words to mean that rectification would be at the Respondent’s cost. That is consistent with the usual position whereby a subcontractor bears the cost of rectifying its own work and in this case by extension, the work for which it has been paid.
  8. [87]
    As to any implied terms in the contract, I find that the work to be performed by the Respondent must be performed with due care and skill.[1]
  9. [88]
    The Applicant is seeking to recover the cost to it of rectifying defective work or completing incomplete work which was contracted to be performed and where necessary rectified by the Respondent. In other words, the Applicant is seeking damages for breach of the Respondent’s contractual obligation to rectify Mr Rangely’s work and breach of the implied term that work would be performed with due care and skill.

Has the Applicant established that there was defective or incomplete work for which the Respondent was responsible?

  1. [89]
    The claim relates to work on the defect list prepared by Mr Escher with the addition of the squeaking floor.  The work the subject of the claim is set out in the Scott Schedule. The evidence of the witnesses demonstrates that there is no agreement on which items of work were defective or incomplete.
  2. [90]
    The experts were unable to assist me in relation to these questions.
  3. [91]
    Apart from the squeaking floor, I am not satisfied that the Applicant has proved which items of work on the list of 52 defects were not rectified or completed. Neither Mr Stopka nor Mr Escher were able to say which items of work for which the Respondent was responsible, had not been rectified and completed.
  4. [92]
    Mr Dilworth’s evidence is that all work on Mr Escher’s list was completed, except for work extra to the contract on which no cost had been agreed, and apart from the squeaking floor, for which he denied liability.  Mr Dilworth’s evidence is supported by diary notes which record the work performed by the Respondent on a given day and support his evidence that the work on the list was completed. I accept Mr Dilworth’s uncontradicted evidence that work not completed was work extra to the contract for which no agreement as to cost had been reached. I find that the Respondent was not bound to complete that work.  I prefer Mr Dilworth’s evidence and accept that rectification work was completed for all work for which the Respondent was responsible except the squeaking floor.   The evidence given by Mr Stopka and Mr Escher on this issue was uncertain and unreliable.
  5. [93]
    In relation to the squeaking floor, I accept that the upper level floor was defective as found by the QBCC Inspector.  Of the possible causes of the squeaking I accept the evidence of Mr Stopka and Mr Escher that there was an insufficient gap between joist and beam as required by the flooring specification, which caused the squeaking.  It is Mr Escher’s uncontested evidence that inserting a wedge and gluing the floor corrected the problem.  That suggests that the gap between joist and beam was the problem.
  6. [94]
    The respondent contends that if there was any fault on the part of Mr Rangely who installed the floor, then that should have been picked up by the site supervisor before any internal work was done. I note Mr Stopka and Mr Escher’s evidence that the fault was not picked up until the squeaking could be heard upon inspection at Practical Completion stage.
  7. [95]
    I accept the evidence of Mr Stopka that the floor was sound and that certification was given. That would seem to satisfy the obligations of a supervisor.  There was no evidence called to the effect that a supervisor must inspect every aspect of a tradesman’s work. Practically, I cannot see that the obligation to supervise goes that far. 
  8. [96]
    As to whether the Respondent is responsible for correcting the squeaking floor, I find that the Respondent took on responsibility for the floor when he took over Mr Rangely’s work. The Respondent is responsible for the costs of rectification of the squeaking floor.
  9. [97]
    I do not accept the Respondent’s contention that as this work pre-dated the QBCC’s “Accountability for Subcontractor Defects Policy” the builder is responsible for all defects.  With respect, that is to misunderstand the purpose of the QBCC’s policies which are an aid to its statutory power to direct rectification following a complaint about defective work.  The policies do not impact on contractual liability for defective work, which is a matter between builder and sub-contractor. If there is contractual liability for defective work, that is not impacted by the power of the QBCC to direct rectification by either builder or subcontractor.
  10. [98]
    Other than the squeaking floor, I am not satisfied that the Applicant has established any of the allegedly defective or incomplete work the subject of this claim, not being an extra, has not been rectified by the Respondent.

Cost of Rectification

  1. [99]
    Given my finding in relation to the work rectified by the Respondent, the only relevant findings I can made in relation to the cost of rectification go to the cost of repairing the squeaking floor.
  2. [100]
    Even apart from this finding, I am not satisfied that the Applicant has proved what costs are attributable to what defects in their claim for recovery of costs of rectification and completion. Mr Stopka admitted that some of the invoices purporting to establish the Applicant’s loss related to issues not raised with the Respondent as defects or were insufficiently particularised.
  3. [101]
    However, with respect to the squeaking floor, the following invoices are relevant:
    1. (a)
      Coastal Fasteners Invoice No 289965, dated 2 February 2016 - $44.42;
    2. (b)
      Coastal Fasteners Invoice No 291356 dated 24 March 2016 - $68.33;
    3. (c)
      Mick Lewis Painting Invoice No 1315 dated 14 March 2016 - $374.00;
    4. (d)
      Integrity Plastering Invoice dated 16 February 2016 - $2,378.20;
    5. (e)
      Sorensen carpet laying Invoice dated 5 February 2016 - $220.00;
    6. (f)
      Coastal Fasteners Invoice No 289510 dated 27 January 2016 - $26.40
    7. (g)
      Coastal Fasteners Invoice No 289422 dated 22 January 2016 - $71.50;
    8. (h)
      Escher Invoice No 100, dated 15 February 2016 - $2,090.00.
  4. [102]
    I accept the evidence of Mr Stopka and find that the costs disclosed in these invoices were properly incurred in rectifying the squeaking floor. The total amount is $5272.85.

Legal basis for recovery

  1. [103]
    Neither party has sought to terminate the contract for breach by the other. Neither party has made submissions that any conduct amounts to a breach of contract disentitling the other to recover any damages for breach. Accordingly, I will not consider those issues further and will treat the contract as remaining on foot between the parties at all relevant times.
  2. [104]
    In relation to the defect in the upper floor, I have found the defect arose as a result of failure to install the flooring system with an adequate gap between the relevant bearer and joist. That amounts to a breach of the implied term to carry out the work with due care and skill, giving rise to a claim for damages for breach. The breach occurred at the time of construction.  The defect was not discovered until after completion of the job.  Nevertheless, the cause of action accrued before completion of the job and the Applicant is entitled to be put in the position it would have been in had the contract been performed.[2]
  3. [105]
    I have found that the Respondent adopted responsibility for the upper floor despite it being constructed by Mr Rangely. The Respondent agreed to rectify that work at its cost. 
  4. [106]
    The Respondent complained about a failure to give sufficient time to rectify the original list of defects. As it transpires I have found that relevant items on the list were rectified.  In relation to the squeaking floor, the Respondent has not complained that the Applicant did not call on it to rectify the floor before undertaking the work itself. In other words, the Respondent has not submitted that there is any unreasonable conduct on the part of the Applicant in carrying out the rectification work itself, which amounts to a failure to mitigate.  The Respondent’s position has been that it was not responsible for any defect in the floor. The Respondent bears the onus of proving a failure to mitigate. It has not led any evidence on the issue.
  5. [107]
    I accept the evidence of Mr Stopka and Mr Escher that the mode of rectification was appropriate.  I find that the invoices reflect the cost of finding the defect and correcting it.
  6. [108]
    I order that the Respondent pay to the Applicant the sum of $5272.85 by way of damages for breach of contract. 
  7. [109]
    As to the claim for interest, I have a discretion to award interest under s 77(3) (c) of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), on damages at the rate and calculated in the way prescribed under Regulation 34B of the Queensland Building and Construction Commission Regulation 2003 (Qld).  As there is no rate of interest agreed in the contract documents or between the parties, the rate is 10% payable on and from the day after the day that the amount became payable until and including the day the amount is paid. The original application reveals that demand was made for payment of the rectification costs within 14 days of 14 March 2015.  I intend to award interest from 29 March 2015 to the date of this decision - 13 August 2018. The amount of interest awarded is $1,782.66, making a total of $7,055.51.
  8. [110]
    I do not consider the Applicant is entitled to with-hold payment of any money owing to the Respondent for the value of work performed and to apply it against the cost of rectification, because there is no entitlement to do so on the terms of the contract between the parties.
  9. [111]
    The outcome of this proceeding will mean that the amount ordered in favour of the Applicant will be offset against any amount ordered in favour of the Respondent.

Counter-application

  1. [112]
    On the basis of Mr Stopka’s admission in evidence that the work the subject of the Invoices had been performed and the money claimed was owed by the Applicant to the Respondent, I find that the Applicant must pay the sum of $4,404.38 to the Respondent.
  2. [113]
    In relation to the claim for the cost of materials, comprising miscellaneous hardware items such as nails and drill bits, I note that these items have not been agreed by the parties to be separately met. Further no invoice has been rendered for the items. For those reasons, I decline to make any award in relation the sum claimed.
  3. [114]
    The Respondent has claimed interest on the outstanding invoices. The unpaid invoices relate to work ordered for an agreed price and performed, pursuant to a contract which has remained on foot. On that basis, I find that the claim is for recovery of moneys owed under the contract as a debt.[3] As no award of damages is made it is not possible to award interest unders 77(3)(c) of the QBCC Act.
  4. [115]
    The unpaid invoices do however have the character of progress payments.  That term is defined in the QBCC Act with respect to a domestic building contract (which the contract between the Applicant and the Respondent is not).  The term progress payment is defined in other legislation.  The Building and Construction Industry Payments Act 2004 (Qld) defines a progress payment for the purpose of that Act as payment to which a person is entitled under the Act and includes a final payment for construction work, a single payment for construction work or a payment based on an event or date.
  5. [116]
    In its ordinary sense a progress payment is a payment of the contract price in progressive increments.
  6. [117]
    The material filed with the Response and Counter-application (Exhibit 9) reveals earlier invoices rendered at various stages of the job, including Invoice No. 7, dated 27 November 2014 described as 80% draw and Invoice No. 7B dated 18 December 2014 described as 20% draw.  Payment of these invoices are a waiver by the Applicant of the note in the Work Orders that progress payments will not be met. Invoices Numbered 13 and 14 are the final invoices for the job, representing lock up and a variation.
  7. [118]
    I find that Invoices Numbered 13 and 14 give rise to an entitlement on the part of the Respondent to progress payments within the scope of s 67P of the QBCC Act.
  8. [119]
    S 67P of the QBCC Act provides that if a contracting party for a building contract is required to pay an amount as the whole or part of a progress payment and that amount is unpaid, the contracting party is required to pay the contracted party interest at the penalty rate, as applying from time to time, for each day the amount is unpaid.
  9. [120]
    Penalty rate means the rate made up of the sum of 10% a year and the rate comprising the annual rate, as published from time to time by the Reserve Bank of Australia, for 90 day bills unless the building contract provides for a higher rate.
  10. [121]
    I am unable to calculate that sum without submissions from the parties; however, I am prepared to award penalty interest under s 67P of the QBCC Act on the sum of $4,404.38 from the date on which payment fell due until 13 August, 2018. The Invoices are silent in relation to the due date for payment.
  11. [122]
    I require submissions from the Respondent setting out its calculation of interest under s 67P of the QBCC Act.  The submissions should make clear the date on which it is said payment of Invoices 13 and 14 fell due and set out the workings for calculation of the interest amount.  The Applicant may file and serve submissions in reply.

Orders

  1. [123]
    I Order that:
    1. (a)
      the Respondent file and serve submissions in relation to the calculation of penalty interest pursuant to s 67P of the Queensland Building and Construction Commission Act 1991 (Qld) on the sum of $4,404.38, setting out the date on which the calculation commences and providing the calculation until 13 August, 2018:  by 4pm 27 August 2018;
    2. (b)
      the Applicant file and serve any submissions in reply by 4pm 10 September 2018.
  2. [124]
    Final orders will be made upon receipt of the submissions.

Footnotes

[1]Sterling Estates Development Corporation Pty Ltd v Malouf [2003] NSWCA 278.

[2]Clark v Macourt (2013) 253 CLR 1; Robinson v Harman (1848) 1 Ex 850.

[3]Barry Pitt Construction Pty Ltd v Smith & Anor [2014] QCATA 339 at [23]; Lida Build Pty Ltd v Miller & Anor [2013] QCATA 139 at [44] – [45].

Close

Editorial Notes

  • Published Case Name:

    Platinum Property Group Pty Ltd v Dilworth Constructions Pty Ltd

  • Shortened Case Name:

    Platinum Property Group Pty Ltd v Dilworth Constructions Pty Ltd

  • MNC:

    [2018] QCAT 267

  • Court:

    QCAT

  • Judge(s):

    Member Fitzpatrick

  • Date:

    13 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
Barry Pitt Constructions Pty Ltd v Smith & Anor [2014] QCATA 339
2 citations
Jump To
Cite 1 - [2014] QCATA 339
Cite 2 - [2014] QCATA 339
Clark v Macourt (2013) 253 CLR 1
2 citations
Jump To
Cite 1 - (2013) 253 CLR 1
Cite 2 - (2013) 253 CLR 1
Lida Build Pty Ltd v Miller & Anor [2013] QCATA 139
2 citations
Jump To
Cite 1 - [2013] QCATA 139
Cite 2 - [2013] QCATA 139
Robinson v Harman (1848) 1 Ex 850
2 citations
Jump To
Cite 1 - (1848) 1 Ex 850
Cite 2 - (1848) 1 Ex 850
Sterling Estates Development Corp Pty Ltd v Malouf [2003] NSWCA 278
2 citations
Jump To
Cite 1 - [2003] NSWCA 278
Cite 2 - [2003] NSWCA 278

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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