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- Unreported Judgment
Lees v Cochrane QCAT 321
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Lees v Cochrane  QCAT 321
DANIEL JOHN LEES
24 October 2019
30 September 2019
Member Richard Oliver
The Respondents pay to the Applicant the sum of $23,970.40.
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – where balance of monies claimed under a building contract – where monies claimed include variations to the building contract – where offsetting claim for rectification work – whether variations in writing
PROCEDURE – FAILURE TO ATTEND THE HEARING – where the respondents advised the Tribunal they would not attend the hearing – whether the Tribunal can proceed in the absence of a party
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 93, s 100, s 102
Queensland Building and Construction Commission Act 1991 (Qld), Schedule 1B, s 40
APPEARANCES & REPRESENTATION:
REASONS FOR DECISION
- The Cochranes are the owners of a property at Elizabeth Street, Eumundi. In the early part of 2017 they entered into a contract for the construction of a house at the property with Stirling Homes, a building company. After a couple of months when the frame and part of the roof had been constructed, the Cochranes fell into dispute with Stirling Homes and the contract was terminated. Then, on 30 June 2017, they entered into a contract with Mr Lees, a registered builder, to complete the construction of the house. The contract is a standard Queensland Building and Construction Commission Contract which provided for a fixed price contract of $262,084.90 which included $14,520 of provisional cost items.
- Under Schedule 5 to the contract, work was to commence on 17 July 2017 and the construction time was 110 days with 10 days allowed for inclement weather and like delays.
- The construction work was not without its difficulties and there were various disputes between Mr Lees and the Cochranes to the point where the Cochranes gave notice to terminate the contract on 27 March 2018. It is unnecessary for me to determine whether the contract was lawfully terminated because most of the work had been done by that stage and the Cochranes had taken up occupation of the house.
- This building dispute has arisen because Mr Lees claims that there is a balance of $47,962.13 owing under the contract. In the application filed 24 September 2018, the money owing is broken down to $37,824.40 owing under the contract plus additional variations of $10,137.73.
- The Cochranes contend that there is only $5,697.06 owing to Mr Lees and have provided a breakdown of that on page three (3) of the annexure to their response to the application filed on 30 October 2018.
- After a number of interlocutory applications, the matter came on for hearing on 30 September 2019. At about 9.20am on the morning of the Tribunal received an email from Tamara Cochrane indicating that she and her husband would not be attending the hearing because they did not have sufficient time to arrange witnesses in support of the contentions they raised about defective work, delays and unsigned variations. She indicated in the penultimate paragraph of the letter that:
I hope you still take the time to consider our evidence regardless of our absence…
- Mr Lees appeared and was in the hearing room for the commencement of the hearing. When he was informed of the Cochranes’ positions he indicated that he wanted to proceed with the hearing in their absence. In view of this, and that the Cochranes wanted the Tribunal to proceed on the material they had filed, I decided to proceed with the hearing under s 93 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’). The section provides that if a party does not attend:
(2) The Tribunal may hear and decide the matter in a person’s absence.
(3) This section applies even if the absent person is a party to the proceeding.
- Mr Lees confirmed that in accordance with his application, his claim was for the amount stated of $47,962.13. He made an oral application to add further claims. The first claim was for interest to the outstanding claim but when questioned about whether interest was permitted under the contract and in what circumstances, he said that he was prepared to abandon the interest claim.
- He then sought to claim $3,932 being monies owing to a plumber engaged by the Cochranes which he felt morally obliged to pay. When it was pointed out to him that on the basis of that submission there was no legal liability on his part to pay the plumber as that was a claim solely between the plumber and the Cochranes, he decided to abandon this claim.
- He also made a claim for $700 being paint supplied by his painter for work on the house in circumstances where after the paint was supplied, and he was left with it, the Cochranes wanted to engage another painter. Mr Lees acquiesced to this request but said he remains liable to the painter for $700. It would seem to me that this amount is recoverable.
- Mr Lees then raised the issues of costs. He engaged lawyers to assist with the formulation of his claim and one firm of lawyers charged him $1,550 and another firm charged him $1,487. It was pointed out to Mr Lees that costs were not recoverable as of right under s 100 of the QCAT Act which provided that each party must pay their own costs for the proceeding. There are exceptional circumstances which are set out under s 102 but nothing was identified in this application which would engage those special circumstances. Mr Lees accepted that in these circumstances, costs would not be recoverable.
- In the interests of fairness, he was then taken to the Cochranes’ schedule of claims which, as I have indicated, is annexed to the response and counter application. The first part of that claim is on page three (3) which claims the cost of rectification for ‘defective balustrades, fitting laundry sliding door and fit plugs and replace scratched tracks’. There is a breakdown for this work which includes carpentry work $2,255, painting work $2,178 and electrician $461. The total of these rectification costs is $4,894.07.
- There are also further rectification costs in respect of the pool balustrading and deck contract. The carpenter costs for that rectification is $2,255, the painter is $2,838 which has a total of $5,093.
- Mr Lees conceded that the work complained of under those items was defective and required rectification. He said that he was always ready, willing and able to carry out that rectification work but the Cochranes refused to allow him on site to do that work. He says, and I accept, that he could have done it for a lesser price and his estimation, which I accepted, was that for the house rectification work it would have cost about $3,000 if he did it himself. He, estimated a similar amount for the pool balustrade and deck. Therefore, on his argument, the rectification costs should be reduced to about $6,000.
- The Cochranes then claimed overtime (delay damages) on the contract of $10,600. The evidence does demonstrate that the contract extended beyond the contract dates but in the schedule, there is no allowance for liquidated damages under Item 10. That being the case, it is difficult to see how the Cochranes could recover liquidated damages for delay which is the essence of their claim.
- That then brings me to the variations. Mr Lees produced a schedule of variations which total $37,824.40. The only statement of evidence he has provided, which he was taken to in respect of the variations, is that contained in the statement filed on 29 January 2019 in which he says:
All variations to the contract were openly identified and discussed with both Mr and Mrs Cochrane. Verbal estimates were given, and it was verbally agreed that I would do the requested variations for their exact cost, based on the hours taken and the costs of materials with no mark up or profit margin added. These costs were recorded in the ‘to do list’ on the page of the day they occurred within my diary. Mr and Mrs Cochrane were also aware of contractual obligations regarding variations to the contract and did not insist that the variation certificates were completed before work commenced. There were several variations reducing the contract price which were presented to me by Mr Cochrane and signed by myself on 7/12/17, which was after the date of occurrence.
- This is a familiar story about variations under domestic building contracts. However, Mr Lees must still comply with s 40 of Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) which is the provision that provides that variations must be in writing. Sub-section 5 provides that:
The building contractor must not start to carry out any domestic building work the subject of the variation before the building owner agrees to the variation in writing.
- The Cochranes certainly take the point that they are not obliged to pay for those variations that have not been authorised in writing by them. The convenient place where this is set out, is in a letter from their then solicitors, Spire Law dated 30 January 2018 and Annexure 4 to their response. These variations include the following:
Insurance for building site
Aprons in cement board
Extra ceiling battens
Starter bars in fire place
Raise bath frames
Bulkhead above stacker door
Bath Tap Plumbing
Excavation of front yard
Dressing of hardwood
- There are variations which have been agreed to be paid by their solicitor, and they total $5,706 which is also set out on page 3 of that correspondence.
- The variations agreed to be paid are:
Flashings between deck and house
Metre Box Inset in Cladding
Delivery Front Door
Swing Chair Beam
Insulation Bed 4
Kitchen Alcove Cladding
Concrete Pads at Bottom of Steps
Concrete Slab for A/C Unit
- By reference to the tax invoice issued by Mr Lees on 8 May 2018 and comparing that with the Schedule contained set out in page 3 of the annexure to the response, both parties accept that the balance owing under the contract at that time was $58,920. It is also agreed, it would seem, that the Cochranes are entitled to a credit of $38,799.70 against the outstanding balance. Leaving aside the variations, the outstanding balance then is $20,120.40. If one adds back the total variations, the total payable is $37,824.40 which accords with the tax invoice.
- Mr Lees accepted, after he was taken to s 40 on Schedule 1 of the QBCC Act, that as a number of the variations were not in writing and agreed to by the owner, these amounts were not allowed except that he produced to the Tribunal a document prepared by the Cochranes which is titled ‘Variations as at 13 September 2017’ and it is as follows:
Four x new posts (2 x back & 2 x front) = $
Insurance policy (not QBCC – other) = $
Extra noggins for VJ sheeting = $
Cement board/flashing around base of house = $
Bulkhead over stacker doors/nib wall on end/raised deck ** = $
- He submits that by this document the Cochranes accepted these variations even though they were not priced on the documents. They were yet to be priced up and undertaken but he contends that this complies with s 40(5). By reference to the Schedule 2 above, these are variations 1, 2, 9, 6 and 24. It is noted that variation 1 has already been accepted. The total amount of these additional variations is $4,144. In my view, the document emanating from the Cochranes is a sufficient acknowledgement in writing by them of the variations authorising the builder to proceed despite the fact that the costings had not been completed on that document.
- As the agreed variations are $5,706 plus the additional variations as per the additional charges document, the total payable for variations is $9,850.
- Therefore, having regard to Mr Lees’ invoice, the amount payable can be calculated as follows:
Balance owing under the contract
Variations payable under the contract
Less cost of rectification work
- Having considered all of the evidence and doing the best I can in the absence of the Cochranes at the hearing of the application, I have concluded that they are indebted to Mr Lees in the sum of $23,970.40.
- Published Case Name:
Daniel John Lees v Vincent Cochrane and Tamara Cochrane
- Shortened Case Name:
Lees v Cochrane
 QCAT 321
Member Richard Oliver
24 Oct 2019