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Volck v Moratti t/as Italia Concrete Services Qld QCAT 443
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Volck v Moratti t/as Italia Concrete Services Qld  QCAT 443
(applicant) v Jacob anthony moratti t/as ITALIA CONCRETE SERVICES QLD (respondent)
Jacob anthony moratti t/as ITALIA CONCRETE SERVICES QLD
22 December 2021
On the papers
The Tribunal orders:
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where the respondent was contracted to construct a concrete slab for the applicant – where the work did not meet a reasonable standard of construction or finish – where the applicant filed an Application for domestic building dispute – where the applicant claims $3,300.00 – whether the work performed by the applicant is “domestic building work” – whether the Queensland Civil and Administrative Tribunal has jurisdiction to hear the matter
DAMAGES – ASSESSMENT OF DAMAGES IN ACTIONS FOR NEGLIGENCE – demolition costs and costs of reconstruction
BANKRUPTCY – PROCEEDINGS IN CONNECTION WITH SEQUESTRATION – PETITION AND SEQUESTRATION ORDER – EFFECT OF BANKRUPTCY ON PROPERTY AND PROCEEDINGS – ACTIONS BY AND AGAINST BANKRUPT – STAY OF PROCEEDINGS AGAINST BANKRUPT AFTER PRESENTATION OF PETITION – IN RESPECT OF PROVABLE DEBT – where builder became bankrupt after work performed – whether action for damages for negligence is a provable debt – whether action can be pursued against bankrupt builder
Bankruptcy Act 1966 (Cth), s 58(3), s 82
Queensland Building and Construction Commission Act 1991 (Qld), s 77
Queensland Building and Construction Commission
Regulation 2018 (Qld) Reg 5 Schedule 1 s. 2
Atkinson and Anor v Van Uden  QCAT 259
Benson v Legg  QCAT 270
Bryan v Maloney (1995) 183 CLR 609
Skinner v FTP Contracting Pty Ltd & Anor (No 2)  QCATA
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
- The Applicant is Renee Volck. Her mother Lou-Ann Volck gave her daughter a spa bath. It required a concrete base. Lou-Ann Volck engaged the Respondent to construct a concrete slab (approximately 40 m2) as a base for a spa bath at her daughter’s residence at Daisy Hill. The respondent was paid $3,300.00 cash on completion of the work. The work was carried out on 7 November 2019.
- The Applicant alleges the work was defective in that large cracks appeared in the slab. These exceeded the Queensland Building and Construction Commission Standards and Tolerances Guide, Section 2.1 in that the surface cracking to the concrete paving exceeded the allowable crack width under Table 2.1 and did not meet a reasonable standard of construction or finish. The Respondent was directed to rectify the work under s. 72 of the Queensland Building and Construction Commission Act 1991 (Qld) but failed to do so.
- The Respondent has failed to comply with the Directions of the Tribunal first made on 12 November 2020 and repeated on 26 May 2021. He was put on notice that if he failed to comply with the directions on 26 May 2021 the Tribunal will make a final decision in favour of Renee Volck conditional upon an assessment of damages.
- Ms Volck has made a claim of $5,000.00 restitution. Although not specifically described as a claim for unliquidated damages it clearly is. This is of some relevance as will appear later in these reasons.
The jurisdiction of the tribunal
- The jurisdiction of the Tribunal to decide building disputes is governed by 77 of the Queensland Building and Construction Commission Act 1991 (Qld). In exercising its powers, the Tribunal may award damages.
- Prior to commencing the proceedings, the Applicant has complied with the process established by the commission to attempt to resolve the dispute.
- A ‘building dispute’ is defined in Schedule 2 as relevantly as meaning a domestic building dispute, which in turn is relevantly defined as:
- (a)A claim or a dispute arising between a building owner and a building contractor relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work;
- (c)A claim or dispute in negligence, nuisance or trespass related to the performance of reviewable domestic work other than a claim for personal injuries;
- The term ‘reviewable domestic work’ means domestic building work under schedule 1B, section 4, except that for applying schedule 1B, section 4(8), the definition excluded building work under the schedule is taken not to mean anything mentioned in paragraph (b), (c) or (d) of that definition.
- The building work was domestic building work.
the exclusion from building work of work of a value of $3,300 or less in section 2 of Schedule 1AA of the Queensland Building and Construction Commission Regulation 2003 (Qld) (‘QBBC Regs’), only applies to the definition of ‘building work’ in the QBCC Act Schedule 2, which is relevant to the need for a licence. This can be seen from section 5 of the regulation. The provision does not apply to the definition of ‘domestic building work’ in Schedule 1B which is part of the definition of a ‘building dispute’.
- I observe that the relevant regulations now are the Queensland Building and Construction Commission Regulation 2018 (Qld) which in respect to the provisions referred to are not materially different to their predecessors.
- Consequently, I order that a final decision in favour of the Applicant Renee Volck against the Respondent Jacob Anthony Moratti t/as Italia Concrete Services Qld conditional upon the assessment of damages. I will no assess damages.
The effect of bankruptcy
- In accordance with a direction made on 18 March 2021 Renee Volck filed evidence of the bankruptcy of Jacob Anthony Moratti t/as Italia Concrete Services Qld. The evidence took the form of an extract of the National Personal Insolvency Index. It disclosed that the date of bankruptcy was 9 April 2020 and that the Applicant is an undischarged bankrupt as at 24 March 2021 being the date of the search
- I am indebted to Member Kanowski’s decision in Benson v Legg for the relevant principles in relation to a claim for a domestic building dispute against a builder who, subsequently, becomes bankrupt. I produce the relevant passages in full.
 Mr Benson’s application asserts that the basis for entitlement to damages is that Mr Legg owed Mr Benson a duty to take reasonable care in performing the construction work, and that this duty was breached. This is a claim in negligence. The principal authority cited in Mr Benson’s application is Bryan v Maloney, which is a leading High Court case on the liability of builders in negligence.
 In the Bankruptcy Act 1966 (Cth), ‘provable debt’ is defined as a debt or liability that is, under the Bankruptcy Act, provable in bankruptcy.
 Section 82 of the Bankruptcy Act explains which debts are provable in bankruptcy. It casts a very wide net in subsection (1), encompassing (subject to following exceptions):
… all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of bankruptcy …
 However, one of the exceptions that follows is in section 82(2):
Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy.
 Mr Legg’s claim for damages is a demand for unliquidated damages: unlike liquidated damages, which would arise if there was an agreed amount for damages in a contract. Although there would have been a contract, albeit an informal one, between Mr Benson and Mr Legg for the construction work, the demand made by Mr Benson is not one made by reason of the contract. Nor is it one made by reason of a promise or a breach of trust. Accordingly, Mr Benson’s claim for damages is a demand that is not provable in the bankruptcy. There is no ‘provable debt’. Mr Benson is able to pursue the claim against Mr Legg despite Mr Legg’s bankruptcy.
- Member Kanowski went on to observe that:
The relationship of professional licensed builder to a homeowner client is an established category of relationship where a duty of care is owed. That is because it is reasonably foreseeable that if care is not taken by the builder the client is likely to suffer loss and damage. The owner of a house, in the absence of evidence to the contrary, may be assumed to rely on a professional builder to carry out the work with care and skill and the builder generally accepts the responsibility arising from that reliance. Atkinson and Anor v Van Uden  QCAT 259 paragraph 
- Even though there may be a contractual relationship between the parties that does not preclude an aggrieved party from electing to proceed in tort rather than contract, subject to the limitation that such a course will not be permitted where it may circumvent or escape a contractual exclusion or limitation of liability. None exists here.
Assessment of damages
- The Applicant has filed 2 quotes for replacement of the concrete slab, one for $4,410.00 with an additional $590 for a charcoal finish the other quote was for $6,693.50.
- In the instant case the Applicant has claimed $5,000.00. The defects in the slab could only have arisen as a consequence of lack of due care on the part of the Respondent. The Respondent, on his own admission, considered the concrete delivered to be inferior or ‘poor quality’. Indeed, he is recorded as saying that had he not proceeded to lay the concrete his men would have lost a days’ work. Therefore he proceeded using on his own admission using inferior concrete. In any event, the building inspection by the QBCC found the work did not meet a reasonable standard of construction or finish.
- It will be necessary to demolish the existing defective slab, dispose of the rubble and reconstruct it. Such a course is necessary and reasonable in the circumstances. I am satisfied, in the light of the quotes obtained, that the claim for damages of $5,000.00 is reasonable.
- I am satisfied that the claim is not a provable debt and order the Respondent to pay damages of $5,000.00 and filing fee of $345.80 a total of $5,345.80 by 4:00 pm 28 January 2022.
 Directions of Senior Member Brown dated 18 March 2021.
 See Application for domestic building disputes filed 13 July 2020.
 Section 77 (3) (c) Queensland Building and Construction Commission Act 1991 (Qld).
 Ibid, s 77(2).
 Queensland Building and Construction Commission Act 1991 (Qld) Schedule 1B, s 1.
 Ibid, Schedule 1B, s 4(3)(b).
 Ibid, s 6(1).
 (No 2)  QCATA 12 footnote 21.
 Ibid, Schedule 2.
 Ibid, s 77(1).
  QCAT 270
 Bankruptcy Act 1966 (Cth), s 5.
 Bryan v Maloney (1995) 183 CLR 609 at 622.
 Statement of Evidence of Lou Ann Volck attachment E.
 Bellgrove v Eldridge.
- Published Case Name:
Volck v Moratti t/as Italia Concrete Services Qld
- Shortened Case Name:
Volck v Moratti t/as Italia Concrete Services Qld
 QCAT 443
22 Dec 2021