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Vaiao v James Sharkie Constructions QCAT 264
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Vaiao & Anor v Sharkie  QCAT 264
MARK VAIAO AND JANE VAIAO
JAMES THOMAS SHARKIE T/AS JAMES SHARKIE CONSTRUCTIONS
4 September 2019
On the papers
Senior Member Brown
James Thomas Sharkie t/as James Sharkie Constructions must pay Mark Vaiao and Jane Vaiao TWELVE THOUSAND, TWO HUNDRED AND TWENTY-SIX DOLLARS AND FORTY-FOUR CENTS ($12,226.44) by 4:00pm on 1 October 2019.
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – LEGALITY - where domestic building contract does not comply with Schedule 1B of The Queensland Building and Construction Commission Act 1991 (Qld) – whether requirement for signature satisfied by electronic correspondence in accordance with the Electronic Transactions (Queensland) Act 2001 (Qld) - whether breach of contract
TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – SPECIAL RELATIONSHIPS AND DUTIES – OTHERS – where homeowner vulnerable – whether builder owed duty of care to homeowner – damages payable where work is defective
Electronic Transactions (Queensland) Act 2001 (Qld) s 14
Queensland Building and Construction Commission Act 1991 (Qld) s 77, sch 1B s 13(2), s 13(5) , Part 3, sch 2
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48
Basscorp Pty Ltd v Kosik  CCT B411-05
Bellgrove v Eldridge (1954) 90 CLR 613
Chad Roberts Constructions Pty Ltd v Johnson Tiles Pty Ltd  ABT BC9302692
Hall v Busst (1960) 104 CLR 206
Luxottica Retail Australia Pty Ltd v 136 Queen Street Pty Ltd trustee under instrument No 04350946  QSC 162
Perre v Apand (1999) 198 CLR 180
Robinson v Harman (1848) 1 Ex 850; 154 ER 363
Sablewell Pty Ltd V Kirstborough Pty Ltd and Ors QBT BC9505897
Stellard Pty Ltd v North Queensland Fuel Pty Ltd  QSC 119
Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515
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
- Mr and Mrs Vaiao entered into an agreement with Mr Sharkie for the performance of building work at their residential property (the building work). The building work consisted of the construction of timber decks at the front and rear of the dwelling.
- As is unfortunately not uncommon, the parties adopted a somewhat relaxed approach to the formation of the agreement for the performance of the building work. On 4 October 2017 Mr Sharkie advised that the total cost of the building work would be $5,767.77. On 6 October 2017 the Vaiaos paid to Mr Sharkie the agreed price for the building work.
- Mr Sharkie commenced the building work on 6 October 2017. On 15 November 2017 Mr Sharkie advised that there would be an additional cost to Mr and Mrs Vaiao of $527.34 to complete the work. Mr Sharkie advised that this was the cost of purchasing necessary additional materials. Rather than agree to this, Mr and Mrs Vaiao agreed to purchase the additional materials themselves. On 18 November 2017 Mr and Mrs Vaiao paid $208.34 to purchase the materials.
- The building work ceased on 9 December 2017. Mr and Mrs Vaiao were not satisfied with the work and attempted to resolve their issues of concern with Mr Sharkie. When this failed they lodged a complaint with the Queensland Building and Construction Commission (‘QBCC’). A QBCC inspection report dated 26 February 2018 found the building work was defective. On 6 March 2018 the QBCC issued Mr Sharkie with a direction to rectify the building works. Mr Sharkie did not comply with the direction to rectify.
- In November 2018 Mr and Mrs Vaiao commenced these proceedings.
- Mr and Mrs Vaiao claim the cost of rectifying the defective work, in an amount of $12,226.44.
The statutory framework – building disputes
- The relevant enabling Act in respect of the present dispute is the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’).
- The tribunal has jurisdiction to hear and decide building disputes. A building dispute may be a domestic building dispute, a minor commercial building dispute or a major commercial building dispute. A domestic building dispute includes a dispute between a building owner and building contractor relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work. Both ‘building contractor’ and ‘building owner’ are defined in the QBCC Act. Reviewable domestic work means domestic building work under s 4 of Schedule 1B of the QBCC Act. The renovation, alteration, extension, improvement or repair of a home is domestic building work. A home is a building or portion of a building that is designed, constructed or adapted for use as a residence.
- A domestic building dispute also includes a claim or dispute in negligence, nuisance or trespass related to the performance of reviewable domestic work, other than a claim for personal injuries.
- In deciding a building dispute the tribunal may award damages and may order the payment of an amount found to be owing by one party to another.
The statutory framework – bringing tribunal proceedings to an early end
- Proceedings in the tribunal may be brought to early end. Where the tribunal considers a respondent in a proceeding, without reasonable excuse, is acting in a way that unnecessarily disadvantages the applicant by not complying with a tribunal order or direction, the tribunal may make its final decision in the proceeding in the applicant’s favour.
- I find that:
- (a)the work Mr Sharkie agreed to undertake, and undertook, was domestic building work;
- (b)Mr and Mrs Vaiao are building owners and Mr Sharkie is a building contractor;
- (c)the dispute between the parties is a domestic building dispute;
- (d)the Tribunal has jurisdiction to hear and decide the dispute;
- (e)service of the application for domestic building dispute has been properly effected upon Mr Sharkie.
- Mr Sharkie was directed on a number of occasions to file a response to Mr and Mrs Vaiao’s application and has failed to do so. The directions included a direction to file a response to Mr and Mrs Vaiao’s application by 15 July 2019, failing which Mr and Mrs Vaiao would be entitled to a final decision in the proceedings. I am satisfied that Mr Sharkie has failed to comply with a Tribunal direction without reasonable excuse and, in doing so, has acted in a way that unnecessarily disadvantages Mr and Mrs Vaiao. Mr and Mrs Vaiao have been, and are being, prevented from having the proceeding finally determined. Mr Sharkie has offered no explanation for his failure to comply with Tribunal directions. I have considered the matters at s 48(3) of the Queensland Civil and Administrative Tribunal Act 1991 (Qld). I am satisfied that it is appropriate to exercise my discretion and make a final decision in the proceeding in favour of Mr and Mrs Vaiao.
Claim for breach of contract
- Where a building contractor is in breach of contract the homeowner is, as far as money can do so, entitled to be placed in the same situation with respect to damages as if the contract had been performed. The measure of damages recoverable by a building owner for breach of a building contract is the difference between the contract price for the work and the cost of making the work conform to the contract, subject to undertaking the work necessary to achieve conformity being a reasonable course to adopt. Allowance must be made in favour of the building contractor for any unpaid balance of the contract price.
- A domestic building contract, where the contract price is more than $3,300 and less than $20,000 is a level 1 regulated contract. Here, the contract price was $5,767.77. The domestic building contract is a level 1 regulated contract. By s 13(2) and s 13(5) of Schedule 1B of the QBCC Act, a level 1 regulated contract, in order to have effect, must be in writing, must be dated and must be signed by the parties.
Was the contract in writing, dated and signed by the parties?
- In support of their claim, Mr and Mrs Vaiao have filed extracts of Facebook messages between the parties. The exchange is dated 4 October 2017. There appear to be eight messages in the exchange (with only part of the final message displayed). The extract commences with a message from Mr Sharkie:
5,767.77 for front and back decking
- In the absence of further context it seems to me that this is a reference to the contract price. The exchange then continues with two messages from the Vaiaos raising questions about the agreement and four messages from Mr Sharkie in response. This is followed by a final incomplete message from the Vaiaos:
Ok, I can help you too and make it easier/cheaper?
If the material is next to nothing is the main cost your time?
Our budget was around a couple of
- The Facebook messenger exchange is self-evidently in writing and is dated. Can the electronic communication be considered “signed by the parties”?
- Section 14 of the Electronic Transactions (Queensland) Act 2001 (Qld) (‘ETQ Act’) provides:
14 Requirement for signature
- (1)If, under a State law, a person’s signature is required, the requirement is taken to have been met for an electronic communication if—
- (a)a method is used to identify the person and to indicate the person’s intention in relation to the information communicated; and
- (b)the method used was either—
- (i)as reliable as appropriate for the purposes for which the electronic communication was generated or communicated, having regard to all the circumstances, including any relevant agreement; or
- (ii)proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence; and
- (c)the person to whom the signature is required to be given consents to the requirement being met by using the method mentioned in paragraph (a).
- (2)The reference in subsection (1) to a law that requires a signature includes a reference to a law that provides consequences for the absence of a signature.
- By s 13(2) of Schedule 1B of the QBCC Act a level 1 regulated contract must be signed by the parties. By s 13(5) of Schedule 1B of the QBCC Act, if a contract is not signed by the parties it is of no effect.
- Section 14 of the ETQ Act provides that, where an electronic communication is used, the requirement for a person’s signature may be met if a method is used to identify the person and to indicate the person’s intention in relation to the information communicated. The method used needs to meet the requirements set out under s 14(b) and needs to be consented to by the person to whom the signature is required to be given.
- Section 14 of the ETQ Act may be relied upon in appropriate cases to satisfy the requirements for a signature under s 59 of the Property Law Act 1974 (Qld). I see no reason why it would not be possible for a person, in an appropriate case, to rely on s 14 of the ETQ Act to satisfy the requirements of the QBCC Act that a regulated contract be in writing, dated and signed by the parties in circumstances where the agreement is contained in electronic communications.
- There is no evidence before the Tribunal that the parties consented to the use of electronic communications for the purposes of s 14(1)(c) of the ETQ Act. However in circumstances where parties have engaged in negotiation by email and, in particular, where an offer is made by email, then it is open to a court or tribunal to infer that consent has been given by conduct of the other party.
- The difficulty facing Mr and Mrs Vaiao is that the Facebook extract is, of itself, insufficient to satisfy the requirements for the formation of a contract. In my view the extract does not evince a clear acceptance of an offer by the Vaiaos. Nor are the terms of the agreement able to be determined, from the extract provided, with a ‘reasonable degree of certainty’. It is possible, even likely, that there were further Facebook messages between the parties. In aggregate these messages may satisfy the requirements for the formation of a contract. They are not, however, in evidence before the Tribunal. I also note that, in their application for a domestic building dispute, Mr and Mrs Vaiao state that the agreement was made “via facebook messenger and verbal dialogue”. Mr and Mrs Vaiao are unable to avail themselves of the operation of the ETQ Act if the electronic communications between the parties are not consistent with the formation of a concluded and binding agreement.
- Having said this, I accept that there was an agreement between the parties for the completion of domestic building work. I accept that the agreement was partly oral and partly in writing. On the evidence before me however, I am unable to conclude that the agreement between the parties complies with the requirements of s 13(2) of Schedule 1B of the QBCC Act. There is insufficient evidence to support the conclusion that there was a concluded agreement in writing, signed by the parties and dated.
- By s 44 of the QBCC Act, unless a contrary intention appears in the Act, a failure by a building contractor to comply with a requirement under the Act in relation to a domestic building contract does not render the contract illegal, void or unenforceable. The minimum statutory requirements for a level 1 regulated contract are straightforward: the contract must be in writing; it must be dated; and it must be signed by the parties. Unless those requirements are met, the contract is of no effect. Section 13(5) of Schedule 1B clearly expresses the legislative intent that the failure to meet the requirements of s 13(2) results in a contract being of no effect and thereby void.
- Mr and Mrs Vaiao cannot maintain a claim against Mr Sharkie for breach of contract.
Claim for negligence
- A domestic building dispute may include a claim or dispute in negligence relating to the performance of reviewable domestic work. In a claim for damages for negligence an applicant must prove that:
- (a)the respondent owed to the applicant a duty of care;
- (b)the respondent breached the duty; and
- (c)as a result of the breach of duty the applicant suffered loss.
- I find that:
- (a)Mr and Mrs Vaiao relied upon Mr Sharkie to perform the building works with appropriate care and skill. Mr and Mrs Vaiao were ‘vulnerable’ in their dealings with Mr Sharkie.
- (b)it was reasonably foreseeable that if Mr Sharkie failed to exercise appropriate care and skill in performing the building work that Mr and Mrs Vaiao may suffer loss;
- (c)Mr Sharkie owed to Mr and Mrs Vaiao a duty of care to perform the building work in a skilled and competent manner.
- Mr and Mrs Vaiao say that the deck as constructed by Mr Sharkie is not of the quality expected of a competent and skilled builder and has a number of defects including:
- (a)Deviations in the level of the decking between 10mm and 19mm.
- (b)The decking is not level with the existing door sill.
- (c)There is no physical termite barrier and there is unsuitable termite resistant timbers used in the subfloor frame.
- (d)A section of the deck does not cross two joists.
- (e)Recycled timber with unsightly nail holes has been used on a section of the deck.
- (f)An edge board has been cut short exposing the subfloor frame, a section of an edge board is not supported or secured and several edge boards have not been nailed.
- (g)Some decking boards have not been cut square and some have not been nailed to joists.
- In support of their claim, Mr and Mrs Vaiao rely on a report prepared by a QBCC Inspector. The report supports the Vaiao’s contentions and concludes that the building work is defective. Specifically, the report identifies the following defects:
- (a)A number of decking boards have not been nailed to the joists;
- (b)A section of the deck’s edge board has not been supported and secured;
- (c)The deck has deviations in level between 10mm to 19mm and is not level with the existing aluminium door sill;
- (d)There is no physical termite barrier or provision for a visual inspection to be conducted where the deck abuts the existing dwelling;
- (e)Unsuitable termite resistance timbers have been used in various areas of the sub floor frame;
- (f)A section of the deck does not cross a minimum of two joist spacings;
- (g)The vertical decking on the face of the stairs has not been completed with an infill board;
- (h)Several sections of the decking have not been scribed and cut around abutting decking to provide a neat and consistent finish;
- (i)The installation of the deck’s edge board has been cut short exposing the sub-floor frame;
- (j)The but join cuts of the on ground deck are not square and do not comply with AS 1684.3 2010;
- (k)The fixing of several of the edge boards of the on ground deck have not been nailed;
- (l)A section of the decking has been recycled from another area leaving unsightly nail holes.
- I am satisfied on the basis of the QBCC inspection report that Mr Sharkie failed to perform the building work in a proper and workmanlike manner in breach of the duty owed to Mr and Mrs Vaiao.
- Mr and Mrs Vaiao say that in order to rectify the defective building work the deck built by Mr Sharkie needs to be removed and completely replaced. They rely on a quote from Black Square Construction Pty Ltd, a licensed builder, dated 23 July 2019. The quote refers to the QBCC inspection report. The quote details the work to be undertaken including the demolition of the existing deck, the removal of the building debris and the construction of a deck to meet the requirements set out in the QBCC report. The total price quoted for the work is $12,226.44.
- The quote prepared by Black Square Construction refers to:
Demolish existing decking and timber framing to prepare site ready for new deck to be built. In line with QBCC Inspection report…
- I am satisfied on the uncontested evidence before the Tribunal that the quote prepared by Black Stone Construction reflects the cost of rectifying the building works in accordance with the observations and recommendations contained in the QBCC report. I am satisfied on the uncontested evidence that the scope of the work outlined in the quote is reasonable. I am satisfied on the uncontested evidence that the cost of the work is reasonable. I allow the amount in full.
- There will be a final decision for Mr and Mrs Vaiao for damages for rectification costs in the amount of $12,266.44.
 QBCC Act, s 77.
 Ibid, sch 2 (definition of ‘building dispute’).
 Ibid, (definition of ‘domestic building dispute’).
 Ibid, (definition of ‘building contractor; definition of ‘building owner’)
 Ibid, sch 1B, s 4(1)(b).
 Ibid, sch 1B, s 9(1).
 Ibid, sch 2.
 Ibid, s 77(3).
Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 48.
 QBCC Act, sch 1B, s 4(3), ‘associated work’.
 Email from Applicants to Dennis Scott dated 11 February 2019 (pursuant to order for substituted service dated 4 February 2019).
Robinson v Harman (1848) 1 Ex 850; 154 ER 363.
Bellgrove v Eldridge (1954) 90 CLR 613.
 QBCC Act, sch 1B, ss 1 (definition of ‘regulated amount’), 6(1)(a), 7(2); Queensland Building and Construction Commission Regulation 2018 (Qld) s 45.
 Statement of Mark Vaiao and Jayne Vaiao, filed 29 July 2019, Annexure MJV-01.
Stellard Pty Ltd v North Queensland Fuel Pty Ltd  QSC 119; Luxottica Retail Australia Pty Ltd v 136 Queen Street Pty Ltd trustee under instrument No 04350946  QSC 162.
Stellard Pty Ltd v North Queensland Fuel Pty Ltd  QSC 119.
Hall v Busst (1960) 104 CLR 206.
 Application for domestic building disputes filed by Mark Vaiao and Jayne Vaiao on 2 November 2018 (emphasis added).
 QBCC Act, Schedule 1B, s 44 of Schedule 1B of the QBCC Act.
 QBCC Act, sch 1B, s 13(5).
 Ibid, sch 1B, Part 3.
 See for example Basscorp Pty Ltd v Kosik  CCT B411-05.
 Ibid, sch 2 (definition of ‘domestic building dispute’); Chad Roberts Constructions Pty Ltd v Johnson Tiles Pty Ltd  ABT BC9302692; Sablewell Pty Ltd V Kirstborough Pty Ltd and Ors QBT BC9505897.
Perre v Apand (1999) 198 CLR 180; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515.
 Statement of Mark Vaiao and Jayne Vaiao, filed 29 July 2019.
 Report of Christopher Smallwood dated 26 February 2018.
Kaze Constructions Pty Ltd v Housing Indemnity Australia Pty Ltd
 Damien J Cremean, Michael H Whitten and Michael F Sharkey, Brooking on Building Contracts (LexisNexis, 5th ed, 2013) 349.
- Published Case Name:
Mark Vaiao and Jane Vaiao v James Thomas Sharkie t/as James Sharkie Constructions
- Shortened Case Name:
Vaiao v James Sharkie Constructions
 QCAT 264
Senior Member Brown
04 Sep 2019