ADBS Pty Ltd v Webster[2021] QCAT 249

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   ADBS engaged Mr Webster to undertake building works at commercial premises. ADBS says that the works are defective and claims damages for the cost of rectifying the defects. Mr Webster has failed to file a response or otherwise comply with tribunal directions, including failing to appear at a directions hearing.
2. [2]
   I am satisfied as to the following and make findings accordingly:

   1. (a)
      ADBS is a building owner;
   2. (b)
      Mr Webster is a building contractor;
   3. (c)
      The parties entered into an agreement for the performance by Mr Webster of reviewable commercial work;
   4. (d)
      Mr Webster undertook reviewable commercial work;
   5. (e)
      ADBS paid to Mr Webster $24,529.00;
   6. (f)
      The dispute between the parties is a minor commercial building dispute;
   7. (g)
      The tribunal has jurisdiction to decide the dispute;
   8. (h)
      Prior to commencing the proceedings, ADBS complied with the requirements of s 77(2) of the Queensland Building and Construction Commission Act 1991 (Qld);
   9. (i)
      Service of the proceedings has been effected upon Mr Webster;
   10. (j)
       Mr Webster has, without reasonable excuse, failed to comply with tribunal directions;^[1]
   11. (k)
       The failure by Mr Webster to comply with tribunal directions is unnecessarily disadvantaging ADBS. ADBS is entitled to progress the proceedings to final resolution;^[2]
   12. (l)
       ADBS is entitled to a final decision in the proceedings.^[3]
3. [3]
   ADBS was directed to file a detailed statement of evidence addressing, inter alia, details of the following: the agreement entered into with Mr Webster; the building work undertaken; the alleged defective building work and/or incomplete building work; and the cost of rectification and/or completion of the defective and/or incomplete works. ADBS failed to comply with the direction. The tribunal directed that ADBS have additional time to file the statement of evidence and further directed that the matter would proceed to final determination whether or not ADBS filed the statement of evidence. ADBS failed to comply with the direction. As these reasons will reveal, the failure by ADBS to comply with the directions has unfortunate consequences and is a salutary lesson for parties when they fail to comply with tribunal directions.
4. [4]
   In determining the matter I have reference only to the application for commercial building disputes filed by ADBS. No other material has been filed by ADBS.
5. [5]
   ADBS says that Mr Webster was unlicensed. The only evidence before the Tribunal in relation to this issue is a licence search in the name of Mark Antony Webster. Although similar, the name is different to the named respondent. Whether the person named in the licence search is one and the same person as the respondent in these proceedings is not clear. The search, undertaken in September 2020, reveals that Mark Antony Webster was unlicensed as at the date of the search. The relevant building work was undertaken prior to the date of the search. There is no evidence, for example, in the form of a letter from the QBCC that Mr Webster was unlicensed when he undertook the building work. I am not satisfied that the evidence is such that I can conclude Mr Webster was unlicensed at any time relevant to these proceedings.
6. [6]
   From the originating application filed by ADBS and the documents attached to the application the following appears to be the case:

   1. (a)
      ADBS operates a business, Canungra Pizza, from premises in Canungra;
   2. (b)
      ADBS advertised on Oneflare, an online marketplace, the opportunity for a building contractor to undertake renovation works at the business premises;
   3. (c)
      Mr Webster submitted to ADBS a quote for $16,379.00 inclusive of GST to undertake the renovation works. The proposed scope of works was set out in the quote;
   4. (d)
      In early August 2020 the parties reached agreement for the works to be carried out. It does not appear that the agreement was reduced to the form of a contract signed by the parties;
   5. (e)
      At some point in time the parties agreed either to vary the original agreement or enter into a new agreement for additional works to be carried out, the price of which was $7,150.00 inclusive of GST;
   6. (f)
      At some point in time the parties discussed the possibility of the installation of an air conditioning unit. Mr Webster advised that the additional cost of this would be $5,379.00 inclusive of GST. It appears that the parties agreed to vary the contract and that ADBS paid $5,500.00 although whether this was exclusively for the air conditioning unit or included other items is not clear;
   7. (g)
      Between 4 August 2020 and 1 September 2020, ADBS paid to Mr Webster a total of $24,529.00;
   8. (h)
      After commencing work, Mr Webster’s attendance at the premises became increasingly sporadic;
   9. (i)
      On various occasions after commencement Mr Webster undertook to complete the works within a stipulated period and failed to do so;
   10. (j)
       Mr Webster did not return to the site after 16 September 2020.  By late October 2020 communication between the parties had completely broken down.
7. [7]
   In the originating application ADBS says that the contract price for the works was $27,529.00. I am unable to reconcile this figure with the material attached to the application which seems to indicate that the contract price, as varied, was $28,908.00. Depending on which figure is correct, the unpaid balance of the contract price is therefore either $3,000.00 or $4,379.00.

What was the agreement between the parties?

8. [8]
   I find that the parties agreed that Mr Webster would perform renovation works at ADBS’s business premises.
9. [9]
   I find that the original scope of works included the following works:

   1. (a)
      Removal of existing counter-mirrors, power points and data points;
   2. (b)
      Supply of concept designs, colours and samples;
   3. (c)
      Supply and installation of:

      1. POS counter stone top;
      2. Gloss black brick pattern façade;
      3. Bench seating to right side;
      4. Storage units cash draw behind;
      5. Storage cupboards and swing door;
      6. New timber flooring to match existing flooring;
      7. New panel over electrical main distribution board;
      8. Sand and re-stain bifold timber doors;
      9. Relocate existing light box to shop front;
      10. Painting throughout;
      11. LED downlights or similar;
      12. Pendant lights over POS;
      13. Power data eftpos to new POS;
      14. Removal of rubbish and professional clean.
10. [10]
    I find that the agreed price for the works was $16,379.00 inclusive of GST.
11. [11]
    I find that the parties subsequently agreed to vary the contract as follows:

    1. (a)
       Additional works including installation of a shed with an agreed increase in the contract price of $7,150.00 inclusive of GST;
    2. (b)
       Installation of an air-conditioning unit with an agreed increase in the contract price of $5,379.00 inclusive of GST.
12. [12]
    I am unable, on the evidence, to make any findings as to the actual dates upon which the contract was varied as above.

Did Mr Webster breach the contract?

13. [13]
    ADBS says that the parties agreed the works would be completed within fourteen days after commencement. ADBS says that the works commenced on 13 August 2020. I accept that the parties agreed the works would be completed by 27 August 2020.
14. [14]
    I find that the parties agreed to various extensions to the completion date. On 15 September 2020 ADBS advised Mr Webster that the works were required to be completed by 17 September 2020. I find that on 22 September 2020 the parties agreed to extend the date for completion to 5 October 2020. I find that the parties did not agree to any further extensions of the date for completion beyond this date. I find that the works were incomplete on 5 October 2020 and remain incomplete.
15. [15]
    The agreement between the parties was, to say the very least, poorly documented. Notwithstanding this, I find that it was an implied term of the agreement that the works would be carried out in an appropriate and skilful way and with reasonable care and skill. I find that it was an implied term of the agreement that Mr Webster would carry out the works with reasonable diligence. I find that such terms:

    1. (a)
       are reasonable and equitable;
    2. (b)
       are necessary to give business efficacy to the contract;
    3. (c)
       are so obvious that they ‘go without saying’;
    4. (d)
       are capable of clear expression; and
    5. (e)
       do not contradict any express term of the contract.^[4]
16. [16]
    I find that on or about 5 October 2020 Mr Webster abandoned the works and thereby evinced an intention not to be bound by the contract nor to perform his obligations under the contract. I find that in abandoning the works Mr Webster repudiated the contract entitling ADBS to elect to terminate the contract. I find that in commencing these proceedings, ADBS has communicated both its clear and unequivocal acceptance of Mr Webster’s repudiatory conduct and its election to terminate the contract and claim damages.
17. [17]
    Having found that Mr Webster repudiated the contract entitling ADBS to terminate, and having found that ADBS lawfully terminated the contract, I turn now to the assessment of damages.

Assessment of damages

18. [18]
    The relief sought by ADBS in the originating application is ‘costs’ in the amount of $25,000.00. This is presumably intended to be a reference to damages. ADBS seeks orders ‘so I can hire a licensed builder to fix the unsatisfactory and defective items and complete my shop renovations.’
19. [19]
    In cases of contractual breach, a principal who is the innocent party is entitled to claim from the at fault building contactor damages that enable the principal to be placed in the same position as the principal would have been in had the contract been performed according to its terms.^[5] This is subject to rectification or completion works being both reasonable and necessary.^[6] Credit must also be given for any unpaid part of the contract price.^[7]
20. [20]
    ADBS must prove the following:

    1. (a)
       That building work undertaken by Mr Webster was defective or incomplete;
    2. (b)
       The rectification or completion work required to be undertaken;
    3. (c)
       The cost of rectifying or completing the work;
    4. (d)
       The rectification or completion work is both necessary and reasonable.
21. [21]
    In respect of the alleged defective or incomplete building work, ADBS relies upon a table listing 22 items of defective or incomplete work. The only evidence to support the assertions by ADBS regarding the defective or incomplete nature of the works (other than brief details contained in the table) is a series of photographs.
22. [22]
    Photographic evidence, without more, will rarely be sufficiently compelling to form the basis of a finding of defective or incomplete building work. In this case, the difficulty facing ADBS is compounded by the lack of clarity in relation to the scope of works and the contractual terms generally. There are no plans or formal specifications before the Tribunal. There are no diagrams or designs relating to the renovations. Accordingly, the photographs are of no real assistance in identifying what works had been agreed between the parties, what works were actually performed by Mr Webster and whether that work was defective or incomplete.
23. [23]
    Two examples of particular items of work illustrate the shortcomings in the evidence I have identified. ADBS relies upon a photograph of bifold timber doors. The agreement required Mr Webster to sand and re-stain the doors. It is not apparent from the photograph whether this work has or has not been done. There are various photographs of the timber floor both internal and external. Although the flooring appears marked and scratched, this could be the result of usage since the works were carried out. ADBS complains of discoloration and marks on the floor. Again, this could be the result of normal usage and in any event, any discoloration is not immediately apparent from the photographs. The photographs to which I have referred are, in my view, not persuasive evidence of defective building work. The photographic evidence relied upon by ADBS in relation to the remaining items of work complained of suffers from the same evidentiary shortcomings. 
24. [24]
    Even if I were to accept that all or some of the photographs relied upon by ADBS were sufficient evidence of defective or incomplete work, and I do not, ADBS has placed no evidence before the tribunal regarding what works are required to be carried out to rectify the defects or complete the works and what the cost of that additional work may be. As I have observed, an innocent principal is entitled to recover the cost of rectification and completion work subject to the cost being reasonable and necessary. However the innocent party bears the onus of placing before the tribunal all necessary evidence to enable an assessment of damages to be undertaken. In the absence of such evidence, the tribunal would be impermissibly invited to speculate on the amount of damages.
25. [25]
    In the absence of any evidence from ADBS as to the cost of rectification or completion works it is not possible to undertake an assessment of damages. Nor is it possible to make any findings as to whether rectification or completion works are necessary and reasonable.
26. [26]
    By s 77(3)(g) of the QBCC Act, the tribunal may order rectification or completion of defective or incomplete tribunal work. Again, in the absence of any cogent evidence in relation to defective and incomplete work and what further remedial works are required to be undertaken, an order pursuant to s 77(3)(g) of the Act cannot be made. This is because any such order must necessarily carefully identify each item of defective or incomplete work and the remedial work required to be undertaken in relation to the item of work. The absence of such specificity in an order would inevitably lead to uncertainty and confusion in complying with the order and would be likely to make the order difficult, if not impossible, to comply with.
27. [27]
    I am not satisfied that on the evidence ADBS has established to the requisite standard the following matters: that the works undertaken by Mr Webster were defective or incomplete; what works are required to be undertaken to rectify or complete the works; that such further works are necessary and reasonable; and the cost of such remedial works. Accordingly, the tribunal is unable to award any damages to ADBS.
28. [28]
    I referred earlier in these reasons to tribunal directions requiring ADBS to file a statement of evidence. Had ADBS complied with the directions its attention would have been drawn to the very deficiencies in the evidence to which I have alluded and this unhappy outcome (for ADBS) might have been avoided or at the very least mitigated.

Conclusion

29. [29]
    I have found that Mr Webster repudiated the agreement entitling ADBS to terminate the contract. I have found that ADBS lawfully terminated the contract. ADBS has failed however to establish loss as a result of Mr Webster’s breach. Notwithstanding this, ADBS is entitled to recover nominal damages. The party suing on a breach of contract is entitled to nominal damages where it establishes breach, even where it has not expressly sought such an order. Where breach of contract is established, an order for nominal damages must follow even though the claimant has not proved loss.^[8]
30. [30]
    An award of nominal damages serves two purposes. Firstly, it is a means of vindicating a legal right. Secondly, it enables costs of the proceedings to be awarded in favour of a successful claimant who has not recovered damages.^[9]
31. [31]
    Despite the absence of evidence, I am prepared to accept it is more probable than not that the cost of rectification and/or completion of the works undertaken by Mr Webster would likely exceed the balance payable by ADBS to Mr Webster under the contract. Accordingly, I award nominal damages of $100.00. There will be a final decision for ADBS against Mr Webster for this amount.
32. [32]
    It is appropriate that ADBS also recover the filing fees on the originating application. Mr Webster is ordered to pay costs fixed in the amount of $352.00.