Exit Distraction Free Reading Mode
- Unreported Judgment
Morris v Abbott & Ors QCAT 228
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Morris v Abbott & Ors  QCAT 228
john raymond morris
Helen anne morriS
ABBOTT BUILDERS (QLD) PTY LTD
22 August 2019
23 July 2019
CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – TIME – where the parties entered into a building contract – where one applicant was required to use a wheelchair – whether the contract included responsibilities of design to make the dwelling wheelchair friendly – where the builder claimed practical completion had been reached – where the owners rejected the builder’s claim – where the contract made specific provision for a procedure to be followed to reach practical completion – whether the builder complied with the contractual requirements – where alleged defects preventing practical completion appropriately to be completed in the defects liability period
Ownit Homes Pty Ltd v Batchelor  2 Qd R 124
Self-represented by Wayne Abbott, Ron Patterson, Kylie Sullivan
REASONS FOR DECISION
- Mr and Mrs Morris owned land at Banksia Beach. They entered into a building contract with the second respondent (‘the builder’) on 17 March 2018 to build them a new home on their land. The price was $313,346.90.
- Mr Abbott is a director of the builder and Mr Patterson is a supervisor working for the builder.
- The builder advised the owners it had finished the house to practical completion stage in or about September 2018. Mr and Mrs Morris (‘the owners’) rejected that claim claiming the work had many serious defects which meant practical completion stage had not been reached. The owners refused to pay the claim for the practical completion stage.
- The owners filed a building dispute application in the Tribunal. They sought rectification of defective building work and completion of incomplete work. They also said their claim was for an amount of money less than $10,000 but failed to say on what basis the money was claimed. In an attachment to the application they set out a list of orders they wanted the Tribunal to make. These were all orders directing the builder to rectify or complete work under the contract.
- Significantly, they said in the application that the contract had not been terminated.
- The builder in turn filed a response and counter application seeking an order that the owners’ claim be dismissed and requiring the owners to pay ‘for final payment…’ and ‘associated late payments’.
- The builder does not contest that the contract still remains on foot.
- The parties signed a 2015 HIA New Homes Construction Contract on 17 March 2018. The contract documents consisted of a schedule, plans and specifications and general conditions.
- Mr Morris is confined to an electric wheelchair. By the time of the hearing his problems with the builder’s work had changed, indeed it had mushroomed to a claim for ‘defective and incomplete work’ costed at $61,908 after engaging a building work consultant.
- Mr Morris was principal agitator in the proceedings. He filed the statements of evidence and he gave evidence at the hearing.
- At hearing Mr Morris’ general complaint was that it had been agreed prior to contract that the builder would build a ‘wheelchair friendly’ house but what he got was not that.
- The builder maintained in turn that Mr Morris got exactly what the contract called for pursuant to the plans and specifications forming the contract. The builder was not required by the contract to build a wheelchair friendly house.
- Clause 38.1 of the general conditions provides that in the contract, except where the context otherwise requires, ‘contract documents’ means:
these general conditions, any special conditions, the specification, the plans and other documents specified in item 16.
- The schedule to the contract has special conditions. None of the special conditions concerns wheelchair accessibility matters or the end result of the construction being a ‘wheelchair friendly’ house.
- A perusal of the material filed by Mr Morris shows very clearly that after the contract was signed there were many changes sought by him.
- The contract was signed on 17 March 2018. Within days of that, Mr Morris made changes to a document identified as a ground floor plan. The builder and Mr and Mrs Morris initialled the changed plan and importantly the builder initialled next to most of the individual changes made on the draft plan. Shortly after that a new plan was drawn incorporating the initialled changes. That new plan was dated 23 March 2018.
- The initialled changes referred to included bamboo flooring, reinforced ceiling area in the bedroom for a hoist, a mixer tap to be located at 900mm on a particular wall to the main bedroom ensuite, changes to cabinetry in the kitchen and a notation about a shower recess in the main bathroom.
- A notation about a lever actioned toilet cistern in the main bedroom ensuite, I note however, was not initialled. This and various other matters were in dispute in the hearing as matters either outside the specifications according to the builder, or not constructed to specification according to Mr Morris.
- Over the following weeks Mr Morris made other changes to plans and commented on items in the specifications. It is unclear whether all the changes were accepted by the builder and incorporated into the contract scope of works as variations. There were no variation documents completed, or at least only one exhibited in the material filed by the parties, a variation dated 24 April 2018 concerning reduction of the ensuite opening, a window change and adding a sliding door.
- Some changes were obviously agreed because they were incorporated into the construction, such as the changes initialled by both parties in the plan reissued on 23 March 2018.
- The builder’s material is singularly deficient in detail about what the builder says were the agreed amended plans and specifications of the contract and what was not agreed. The builder’s position in its statements of evidence and throughout the hearing was simply, unhelpfully, that it constructed the dwelling ‘in accordance with the specifications’ but without detailing what the final specifications were.
- It is unclear the extent of the changes to plans and specifications made and agreed between the parties. The parties failed to address the matter with any precision in their material. I note the careful initialling by the builder to each change made in the plan reissued on 23 march 2018 but that care is not apparent in respect of other apparent changes.
- What is clear however and I find is that it was no part of the contract that the builder be responsible for designing a wheelchair friendly house. The only reference to a wheelchair in any of the contract documents is a reference in the specifications to the ‘Patios to have minimal fall grate to all door ways to comply with Council & wheelchair.’
- On 31 January 2018 the builder sent an email to the owners saying the builder had:
…included all special features to home that will support your wheelchair manoeuvrability…
- Then on 11 February 2018 Mr Morris wrote back apparently attaching an amended plan and talking about additional things to be added such as bathroom basins, and higher ceilings not required and adding a bedroom ceiling hoist amongst other things.
- The builder responded that they looked forward to line drawings ‘of the design you would prefer.’
- Design is different to construction:
…in an ordinary building contract the builder is only responsible for bringing the works to completion according to their design.
- I conclude whilst the builder knew Mr Morris was forced to use a wheelchair, the builder was not engaged as part of the contract to design a wheelchair friendly house. His responsibility was only to construct the home according to the plans and specifications agreed between the parties.
- If the end result is that the house is not fit for the purpose intended by Mr Morris, that does not mean the work done by the builder is defective.
- The original agreed cost of the build was $313,346.90. There are no details about added or reduced costs of construction after variations to the contract given by any of the parties.
- Initially on 15 August 2018 the builder sent an invoice claiming the amount provided for in the contract for practical completion, $15,667.34. Payment was requested within 5 working days and the date for practical completion was nominated as 24 August 2018. There was no defects document attached nor certificate as to practical completion as provided for in clause 25.2 of the general conditions.
- That claim was not paid.
- On 30 August 2018 the builder advised handover would occur on 7 September 2018. Another invoice for the practical completion stage, this time for $12,898.34, was sent. Though the evidence from the parties provides scant detail, it appears and I find that on 7 September 2018 Mr Morris met with the representative for the builder, Mr Patterson, on site and provided him with a document entitled certificate of practical completion with a number of items listed by the builder as minor defects and omissions with a period of 7 days noted for their rectification or completion.
- Mr Morris apparently pointed out a number of different defects such as the ensuite not being built to plan, non-functioning power points at incorrect heights, the position of the laundry door being unsuitable and not functional, security screws not being fitted, and there being a hob to the bathrooms. The builder’s representative added those items to the document but Mr Morris refused to sign it.
- I conclude that the builder complied with the requirements of clause 25.2 of the general conditions which states that when a builder believes the work has been completed the builder must give the owner a defects document listing minor defects and omissions and listing defects the owner claims to exist but the builder does not agree with signed by the builder together with a notice of practical completion and the final claim.
- Accordingly by clause 25.3 the owner was required within a further five working days of receiving the final claim to pay the amount of the final claim to the builder. Given Mr Morris believed practical completion had not been reached at that stage, which was his evidence at the hearing, by clause 25.4 he was required within five working days of receiving the notice of practical completion to give the builder a written notice stating his requirements for the works to reach practical completion and the provisions of the contract that related to each such requirement.
- Mr Morris did not do that. It was not until 20 September 2018 that the owners’ engaged solicitors to write to the builder detailing complaints about the work.
- By clause 25.8 of the general conditions the date stated in the last notice of practical completion is deemed to be the date of practical completion unless the owner gives written notice disputing the date and detailing the reasons why the date is disputed within five working days. That written notice disputing the date and giving reasons was not given within the required five working days and accordingly practical completion occurred on 14 September 2018.
- The time limits set in respect of practical completion are usually very important and of significance to both parties. Clause 25 fixes a time mechanism to clarify when practical completion is achieved. A failure to achieve practical completion within time opens the builder, for example, to claims for liquidated damages. Here that was $50 per day. The requirements and responsibilities for insurance cover may be impacted by it as effecting both parties; the financial arrangements of the owner to pay for the build may be governed by it; the cash flow of the builder affected by the date; and the right of occupation by the owner set by it.
- The builder achieved practical completion in accordance with the terms of the contract on 14 September 2018 and was entitled to be paid its claim for that stage on that date.
- There was no requirement under clause 25 that a form 21 final inspection certificate be given before the works could be said to have reached practical completion, which seems to have been a position advocated by Mr Morris. That certificate was given by the certifier, effective for 7 September 2018, in any case.
- The defects liability period under the contract commenced after 14 September 2019. It remains on foot. Any defects under the contract must be rectified. But the defects cannot be relied on to claim practical completion has not been reached. Mr Morris had the opportunity to do that, utilising the process set out in clause 25, but failed to act within time.
- Mr Morris engaged an expert to inspect the work in April 2019. Mr Carpenter, the expert, provided a report. The expert’s report, unfortunately, is in most respects of little assistance. This is because the expert’s conclusions were very much affected by his assumption that the builder was obliged, under the contract, to take into account Mr Morris being confined to an electric wheelchair. The expert assumed that situation “…would require specific considerations to meet his requirements”. This assumption resulted in the expert imposing implied terms and obligations of design into the contract on the part of the builder contrary to my findings about the terms of the contract.
- In respect of the defects, in any case, save for his assertion that there was a problem with the termite barrier, the same expert agreed that all the complaints by Mr Morris were defects that were appropriately capable of being rectified during a defects liability period following practical completion.
- In respect of the termite barrier, Mr Carpenter said a termite barrier was not installed appropriately or at least he saw no evidence of appropriate installation.
- The builder disagreed that the appropriate termite barrier had not been installed. I allowed the builder leave to file Form 16 certificates in respect of the termite barrier after the hearing. The certificates were filed and certify completion of appropriate termite barriers in the build.
- A Form 16 informs the building certifier that a particular aspect of work has been done and complies with the approved plans and relevant standards. The building certifier is entitled to rely on the Form 16 which he did when he issued a Form 21 in the matter at hand.
- It is not necessary to delve any deeper into the matter of the termite barrier at this stage of the contract. The contract is still on foot. The issue in the matter at hand was whether practical completion had been achieved. The defective items, including the issue raised by Mr Carpenter about the termite barrier, were relied on to maintain practical completion had not been reached. I have found otherwise. The issue concerning the termite barrier arose very late, after practical completion had been achieved pursuant to the provisions of the contract.
- As stated, practical completion was achieved on 14 September 2018. The defects liability period is 12 months and currently in force. The builder now has an opportunity to remedy defects.
- The appropriate limited order to make in this matter is to order the owners to pay the outstanding claim for practical completion. The owners claim must be dismissed. The counter application of the builder seeks payment of the final claim plus ‘associated late payments’. The amount of the final claim due is $12,898.34.
- The associated late payments refers to interest. That is an appropriate claim given the final payment should have been paid on 14 September 2018 and the builder has been out of pocket for a significant period. The agreed interest rate under the contract is 18% and, as at 20 August 2019, that amounts to $2,169.04.
- There should be an order in favour of the builder, the second respondent, for payment of $12,898.34 plus interest of $2,169.04. The first and third respondents have been wrongly joined in the action.
- There is no claim for costs by any party, and accordingly, no order for costs is made.
 Application, Part B, item 2.
 Ibid item 12.
 Exhibit 5, Expert’s report, Scott schedule.
 Schedule 4.
 Exhibit 1 attachments, page 6.
 Ibid attachments page 58.
 Ibid page 67.
 Ibid page 1.
 Ownit Homes Pty Ltd v Batchelor  2 Qd R 124, 134
 Halsbury’s Laws of Australia, online as at 31 July 2019, [65-995].
 Ibid page 44.
 Exhibit 5, page 9, .
- Published Case Name:
Morris v Abbott & Ors
- Shortened Case Name:
Morris v Abbott & Ors
 QCAT 228
22 Aug 2019