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- Unreported Judgment
Sullivan v Petreski QCAT 453
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Sullivan v Petreski  QCAT 453
LYNETTE JOY SULLIVAN
LOUIS (LUBE) PETRESKI
BDL270 – 17
11 December 2018
On the papers
The respondent Louis (Lube) Petreski pay the applicant Lynette Joy Sullivan damages in the sum of $53,703.33 plus interest thereon at the rate of 10% per annum as and from the date of judgment plus costs of $326.80 within 14 days of the date of judgment.
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – DEFAULT JUDGMENT – JUDGMENT IN DEFAULT OF OTHER REQUIRED STEP – where respondent failed to file material despite direction of the Tribunal to do that – where the failure continued despite a number of orders – where respondent failed to explain his failure to comply with orders
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where no contract entered into as required by the legislation – where claims made under the Australian Consumer Law but refused – where a complaint made to Queensland Building and Construction Commission (QBCC) – where direction to rectify defective building work issued by QBCC – where the builder failed to rectify defective building work – where a finding of negligent construction work by the builder open on the evidence and the complaints of the owner in filed statement of evidence – where damages for negligent construction work awarded – where award of interest made pursuant to the legislation – where costs claimed but award limited to the filing fee
Competition and Consumer Law Act 2010 (Cth) Sch 2 (Australian Consumer Law), s 21, s 236, s 237
Fair Trading Act 1989 (Qld), s 50(1)(a)
Queensland Building and Construction Commission Act 1991 (Qld), s 13, s 77(3)(c)
Queensland Building and Construction Commission Regulation 2018 (Qld), s 54
Thompson and Anor v Jedanhay Pty Ltd  QCATA 246
Venamore t/as Kobble Gardens v Reynolds  QCCTB 71
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
REASONS FOR DECISION
- Lynette Sullivan filed an application for a domestic building dispute with the Tribunal on 7 November 2017. In the application she claimed damages and interest of $56,500 against the respondent Mr Petreski, a builder, engaged by her to perform building work at her house at Little Mountain.
- Ms Sullivan served a copy of the application on Mr Petreski and the Tribunal ordered Mr Petreski file a response to the application by 11 December 2017. He did not do so.
- On 2 January 2018 the Tribunal extended time for Mr Petreski to comply with that order to 12 January 2018. Despite that extension Mr Petreski filed nothing.
- The parties were directed to attend a directions hearing on 20 June 2018. At the directions hearing Mr Petreski was again directed to file a response to the claim and to provide the Tribunal with an explanation in writing by 4 July 2018 why he failed to attend the directions hearing.
- The order made at the directions hearing specifically put Mr Petreski on notice that if he failed to comply with the direction to file a response and to provide an explanation for his failure to attend the directions hearing Ms Sullivan would be entitled to a final decision in the proceeding which might be adverse to Mr Petreski’s interests.
- Mr Petreski still failed to file a response and failed to provide an explanation for his failure to attend the directions hearing within the time set or at all.
- The matter has now been listed for a decision on the papers with reference to the material filed to date including any statement of evidence filed by Ms Sullivan without the necessity of an oral hearing.
- Ms Sullivan lists a number of bases upon which she asserts she is entitled to claim damages of $56,500. She refers to the Competition and Consumer Law Act 2010 (Cth) Sch 2 (Australian Consumer Law) (ACL) s 21, s 236 and s 237. She claims relief under s 243 of the ACL from having to pay the respondent any further amounts under the contract. Finally and alternatively she claims damages for breach of contract.
- The claim under the ACL is not available to her. By s 50(1)(a) of the Fair Trading Act 1989 (Qld) which incorporated the Commonwealth consumer legislation as laws able to be applied by Queensland courts, including the Tribunal, jurisdiction to deal with particular matters arising under the ACL was restricted in the case of the Tribunal to proceedings in minor civil disputes in the Tribunal. The matter at hand is a building matter, not a minor civil dispute, and therefore the provisions of the ACL do not apply.
- In any case, though in minor civil dispute matters claims to damages and compensation under s 236 are available, damages and compensation under s 237 (and the associated orders available under s 243) are only available by action taken in the District Court.
- Ms Sullivan’s evidence is that on 4 November 2015 she entered into a partly oral and partly written contract with Mr Petreski whereby he would provide landscaping and concreting services for her. She exhibits to her statement of evidence an invoice number 62 dated 4 November 2015 from “Louie’s Concreting and Landscaping” (which appears to be a trading name for Mr Petreski) in which he refers to a number of things including removing timber works, performing block work, doing concreting work makes mention of a pool fence and states a “price for complete works” of $18,000.
- Subsequently the parties entered into an additional arrangement again only evidenced by an invoice numbered 70 dated 26 November 2015 with respect to provision of a shade sail and further concreting work, this time for a total price of $14,250.
- Finally there is invoice number 97 dated 28 March 2016 referring to work concrete cutting in the sum of $315.
- Mr Petreski did some or most of the work but very slowly and he never finished the job.
- According to Ms Sullivan she paid him $15,000 over the period 5 to 10 November 2015 for the first invoice and a further $11,850 for the second over the period 27 November to 2 December 2015, making a total paid of $26,850.
- In her statement of evidence Ms Sullivan states Mr Petreski required $15,000 paid before the work covered by the first invoice was completed and the balance $3,000 paid on practical completion.
- With respect to the second invoice Mr Petreski asked her to pay $11,850 immediately following the quotation and the balance $2,400 on completion.
- By s 13 of Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld), which effectively incorporates the provisions of the Domestic Building Contracts Act 2000 (DBCA) after its repeal on 30 June 2015, a Level I regulated contract, which means a contract for building work at a cost between $3,301 and $19,999, must be in writing, dated and signed by or on behalf of each of the parties, contain a number of essential matters including a description of the subject work, any plans and specifications for the work and the contract price and the date for practical completion. Failing that, the contract has no effect.
- Ms Sullivan is unable to recover damages for breach of her suggested contract with Mr Petreski by reason of s 13 of Schedule 1B.
- Despite that, it has been held that a similar provision in the former DBCA did not prevent a contractor from recovering on a quantum meruit for the value of his work. There the quotes forming and relevant to the contract delineated the work required of the builder and upon which the claim on a quantum meruit could be quantified. In line with that finding and reasoning with which I concur, I conclude that s 13 similarly does not prevent the owner from recovering in negligence against a builder for work done negligently arising through an ineffective contract by virtue of s 13, if the duty of care and breach of duty causing damages is made out.
- There are no pleadings in the Tribunal. Ms Sullivan made clear in Part C of her initiating application however, entitled “Details of What You Seek from the Tribunal”, that she sought damages.
- The issues to be determined in Tribunal matters are generally derived from the statements of evidence of parties. Ms Sullivan referred in her statement of evidence to breaches of guarantees under the ACL and obligations under the DBCA and complained about the work not having been done with due care and skill and a failure to exercise care and skill in the performance of the agreed services.
- I conclude Ms Sullivan’s application and supporting material clearly raises a claim that Mr Petreski performed negligent building work which has caused her loss and damage and the negligence claim may be pursued in these building dispute proceedings.
- Ms Sullivan asked the Queensland Building and Construction Commission (QBCC) to inspect the work. A building inspector did attend, inspect and prepare a report a copy of which is exhibited to Ms Sullivan’s statement of evidence. The report is dated 15 March 2017. The inspector found significant defects with the work.
- The QBCC issued a Direction to Rectify defective building work to Mr Petreski on 15 March 2017 but he failed to rectify the work. The defective work covers the concreting work done to pathways, the driveway, poor sealing coats applied to the concrete pool, a drainage channel and the swimming pool fence.
- Mr Petreski owed a duty of care to Ms Sullivan to perform the agreed work with all reasonable care and skill and to the standard to be expected of a licensed contractor. That standard included performing the work in accordance with the relevant laws governing residential building construction. I conclude Mr Petreski failed in that duty and the work was done poorly and not to the standard expected of a licensed contractor or in accordance with the relevant laws governing residential building construction. That finding is supported by the findings set out in the report of the QBCC inspector, which findings I accept as accurately identifying the deficiencies with respect to the work.
- Because of that negligent building work I find Ms Sullivan has suffered loss and damage.
- Ms Sullivan has obtained quotes for rectification of the poor work.
- There is a quote from a gentleman called Wade Frazer to rectify the concreting work other than concreting associated with the pool. The quotation is dated 28 July 2017 and covers grinding off the existing concrete coating and wet stencilling at a cost of $11,000 plus GST. After that there is further work specified of grinding out the cracks and repairing them with construction grout and adding new expansion joints where necessary; etch priming then priming then resurfacing the concrete with one main colour and two fleck colours; then finally sealing the concrete. That further work is quoted as costing an additional $12,500 plus GST. The total for that concrete rectification work including GST is therefore $23,500.
- The difficulty with this quotation is that there is no reference to Mr Frazer being a licensed contractor. He does not give a business trading name in the quotation. He gives an ABN and refers to “LIC 1055869” but if that is a contractor’s licence it is not clear it is his.
- There is a quote from Mad Pool Interiors dated 25 July 2017 to “renovate” the swimming pool which includes draining the pool and sandblasting it, supplying and laying granite coping tiles, locating and repairing rust spots, injecting a crack in the pool wall, waterproofing and rendering tiles and supplying tiles at the waterline, applying a bond key coat then resurfacing the pool and applying a standard colour range finish, followed by acid washing and replacement of the hydrostatic valve, main drain cover and “eyeballs” and clean up at a cost of $23,850 inclusive of GST. Mad Pool Interiors is a licensed contractor.
- Finally there is a quote from Fencemac Pty Ltd dated 8 February 2017 quoting $4,785 inclusive of GST to dismantle and remove the fence put up by Mr Petreski and supply and installation of another pool fence and gate. Fencemac Caloundra is also a licensed contractor.
- Additionally Ms Sullivan says in April 2016 concrete pieces were dropping into the pool whilst Mr Petreski was doing work and this resulted in “obstructing the pool pump and causing it to overheat and be destroyed”. She maintains she was forced to spend $2,048 repairing the pump and purchasing water and chemicals. She has no supporting documentation to support that claim however.
- I accept the quotations from Mad Pool Interiors and Fencemac Pty Ltd as the reasonable costs of rectification of the poor work performed by Mr Petreski with respect to the pool and fencing work.
- Concerning Mr Frazer’s quotation, I note the original cost of the work by Mr Petreski was $18,000 in his invoice number 62 plus some part of the work ($10,800 value noted) in his invoice number 70. Invoice 70 was to “cover crete” all concrete areas, which I take to mean the driveways and concrete around the pool and the pool itself.
- Possibly half the value of Mr Petreski’s quote number 70 was referrable to the cost of concreting work outside the pool. If one subtracts the fencing cost (using the Fencemac quote of $4,785) from his first quote number 62 then one potentially arrives at the following cost of the original work according to Mr Petreski’s figures as near as can be on the material to hand:
Petreski first quote $18,000
Half second quote $ 5,400
Less fence (using Fencemac figure) $ 4,785
- It may well be the case that it would be cheaper to demolish the existing concrete work other than the pool and redo the work entirely. I have nothing before me however to assist me to that determination. I assume however that there would be a significant additional cost for the removal of the presently laid concrete over and above the original cost to Mr Petreski.
- In end result, in respect of the concrete work other than pool concreting, I accept that despite Mr Frazer’s unclear contractor status, his estimate of the cost of rectification is credible, and I have no other material before me to gainsay his estimate. Mr Petreski had every opportunity to say something about this and has stayed resolutely silent.
- Accordingly I determine that Ms Sullivan has suffered the following loss which is recoverable from Mr Petreski:
Cost of rectification of concrete work other than the pool $23,500
Cost of rectification of pool concrete work $23,850
Fence $ 4,785
- In respect of the claim to the replacement cost of the pool pump, there is no evidence about the age of the pump or its condition at the time of the failure and there is no independent evidence of the cost of replacement. I do not allow the claim for this item.
- But Ms Sullivan did not pay all of the contract price to Mr Petreski. My calculation of the total that would otherwise have been required of her had the work been completed is $32,565 which includes the cost of the additional work saw cutting for the drain ($315).
- She actually paid $26,850 and though she states in her statement of evidence that in August 2016 she sent Mr Petreski a list of the work outstanding, there are no details about that. She does mention an awning was to be supplied and installed as part of the contract and that had not been supplied or installed and she refers to the cost for that as $3,450.
- Leaving out the supply and installation of the awning the cost of the work would have been $29,115. Ms Sullivan must credit Mr Petreski with the amount she would have had to pay to have the contract completed properly, that is the difference between the agreed cost of the work (without the awning) of $29,115 and $26,850, the amount she actually paid, that is $3,265, to establish her true loss.
- Accordingly the cost to Ms Sullivan rectifying the negligent building work done at her property by Mr Petreski is $48,870.
- However that is not the end of the matter. At a directions hearing on 20 June 2018 the status of Mr Petreski as a licensed contractor when he agreed to perform building work for Ms Sullivan and when he actually did it was raised as a possible issue. A QBCC licensee search from Ms Sullivan discloses that from June 2015 through to January 2016 Mr Petreski’s Concreting licence had been cancelled. Accordingly he was not entitled to perform building work and recover remuneration for it over that period.
- By s 42 of the QBCC Act:
Unlawful carrying out of building work
(1) Unless exempt under schedule 1A, a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class under this Act.
(3) Subject to subsection (4), a person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.
(4) A person is not stopped under subsection (3) from claiming reasonable remuneration for carrying out building work, but only if the amount claimed—
(a) is not more than the amount paid by the person in supplying materials and labour for carrying out the building work; and
(b) does not include allowance for any of the following—
(i) the supply of the person’s own labour;
(ii) the making of a profit by the person for carrying out the building work;
(iii) costs incurred by the person in supplying materials and labour if, in the circumstances, the costs were not reasonably incurred; and
(c) is not more than any amount agreed to, or purportedly agreed to, as the price for carrying out the building work; and
(d) does not include any amount paid by the person that may fairly be characterised as being, in substance, an amount paid for the person’s own direct or indirect benefit.
- Mr Petreski performed the work himself. That seems clear from the exchange of emails between the parties. All the monies paid by Ms Sullivan for the job was paid by 2 December 2015. Invoice 62 detailed that the cost of the work was attributable $14,000 to materials and $4,000 presumably to the builder’s margin. Similarly with invoice 70, leaving aside the awning cost of supply and erection, the cost of materials was $9,000 and builder’s margin $1,800. That makes a total builder’s margin for the work $5,800.
- It is not clear what aspect of the costs was left unpaid (materials or builder’s margin) however applying a proportionality discount of one sixth (the ratio of unpaid monies to total cost excluding the cost of the awning) the builder’s profit or payment for his labour for the work done actually received might fairly be assessed at $4,833.33. That is recoverable by Ms Sullivan from Mr Petreski pursuant to s 42 QBCC Act.
- Ms Sullivan also claimed interest. There is no explanation as to the basis upon which the claim is made. By s 77(3) of the QBCC Act the Tribunal may award damages, and interest on the damages, at the rate and calculated in the way prescribed under a regulation. Section 54 of the Queensland Building and Construction Commission Regulation 2018 (Qld) says for s 77(3)(c) interest, interest is payable on the amount of damages awarded if the parties have entered into a contract, at the rate provided under the contract; or at the rate agreed between the parties; or otherwise, at the rate of 10%. The interest is payable on and from the day after the day the amount became payable until and including the day the amount is paid.
- As previously noted, there is no effective contract between the parties. The appropriate award is therefore at the rate of 10% on the sum of $52,135 as and from the date of judgment.
- With respect to Ms Sullivan’s claim for costs, again there is no submission made to support the claim for costs. There is no solicitor noted on the record as acting for Ms Sullivan. In the circumstances I allow the filing fee of $326.80 only.
- There should be judgment for Ms Sullivan against Mr Petreski in the amount of $53,703.33 plus interest at 10 per cent on that amount from judgment plus the filing fee of $326.80.
- Published Case Name:
Lynette Joy Sullivan v Louis (Lube) Petreski
- Shortened Case Name:
Sullivan v Petreski
 QCAT 453
11 Dec 2018