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Tide Constructions Pty Ltd v Hakuna Matata Tiling (Qld) Pty Ltd QCAT 146
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Tide Constructions Pty Ltd v Hakuna Matata Tiling (Qld) Pty Ltd  QCAT 146
tide constructions pty ltd
Hakuna Matata Tiling (Qld) Pty Ltd
19 April 2022
On the papers
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – Domestic Building Dispute between a contractor and sub-contractor – whether defective work – whether rectification reasonable and necessary – cost of reasonable and necessary rectification
Queensland Building and Construction Commission Act 1991 (Qld), s 77, Schedule 1B s 1, s 3, s 4, s 5, s 13, s 14, Schedule 2
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 38
Queensland Civil and Administrative Tribunal Regulation 2019 (Qld), s 5, s 8
Bellgrove v Eldridge (1954) 90 CLR 613
Canavan v Sutton  QCAT 374
Gates v The City Mutual Life Assurance Society Limited (1986) 160 CLR 1
Tabcorp Holdings Limited v Bowen Investments Pty Ltd (2009) 236 CLR 272
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act)
REASONS FOR DECISION
- Documents filed by the applicant and online ASIC, ABN lookup and Queensland Building and Construction Commission (QBCC) license searches indicate that the correct name of the applicant is Tide Constructions Pty Ltd (Tide). The Tribunal amended the name of the applicant and the respondent at a directions hearing. I order the Tribunal record to be further amended.
- Tide, a licensed building contractor, engaged Hakuna Matata Tiling (Qld) Pty Ltd, a licensed tiler, to perform tiling work at a client’s home. Tide contends that the work performed by Hakuna Matata was defective. Tide seeks an order that Hakuna Matata rectify the works or pay for the works to be performed and pay costs.
- Tide contends that the work is defective as it is not in accordance with the QBCC Standards and Tolerances Guide (QBCC Guide). Tide sought assistance from the QBCC. It decided not to issue a direction to rectify as it considered it was a contractual dispute.
- The QBCC’s decision not to issue a direction to rectify does not of itself exclude the Tribunal making a finding that the work is defective. The Tribunal has likely received additional evidence and may make findings having regard to all the evidence as to which party is responsible for the alleged defects.
- A building dispute is defined to include a domestic building dispute.
- Domestic building dispute is defined to include a claim or dispute arising between 2 or more building contractors relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work.
- I am satisfied that the dispute is a domestic building dispute between two contractors relating to the performance of domestic building work or a contract for such work and that the QBCC’s dispute resolution process has been complied with enlivening the Tribunal’s jurisdiction.
- Although Hakuna Matata set out a counter-application in its Response document it informed the Tribunal that it did not wish to pursue it and did not pay the relevant filing fee. I do not consider the claims for orders made in the counter-application further. I have regard to the matters set out only as a Response to the claims made against it.
- As applicant, Tide, has the onus of proving its claim on the balance of probability.
- The parties, who were not legally represented, did not clearly state the legal basis for the claim or the reasons for disputing the claim.
- An order requiring Hakuna Matata to attend to rectification would require the homeowners, who are not parties to these proceedings, to provide access. I am not inclined to make such an order as there is no evidence before me that the homeowners agree to Hakuna Matata returning and given the evidence in this matter of previous rectification work being considered unsatisfactory, it is likely to lead to further disputes. I therefore consider the claim for damages.
- A claim for damages for defective work may arise in contract for damages for breach of contract or in negligence for damages for breach of a duty of care. Although it could be clearer, as I understand it, Tide claims damages for breach of contract.
Is Tide entitled to damages for breach of contract?
- I find that Hakuna Matata is to pay Tide the amount of $1,980 (incl GST) for damages for breach of an informal contract.
Is there an enforceable contract between the parties?
- I find that there is an enforceable informal contract between Tide and Hakuna Matata.
Is the contract a regulated contract?
- I find that the informal contract between Tide and Hakuna Matata is not a regulated contract.
- A regulated contract is a domestic building contract with a contract price of more than the regulated amount, a cost plus contract under which the total amount payable for the contracted services is reasonably estimated to be more than the regulated amount or a mixed purpose contract under which the amount referable to the contracted services is more than the regulated amount.
- I find that the informal contract between Tide and Hakuna Matata is not a domestic building contract. Although the dispute is a domestic building dispute it is not a dispute about a domestic building contract because a contract between a building contractor and a sub-contractor for domestic building work is excluded from the definition of domestic building contract.
- I find that the informal contract between Tide and Hakuna Matata is not a cost plus contract. Cost plus contract is defined as a domestic building contract under which the amount the contractor is to receive cannot be accurately calculated when the contract is entered into. As the informal contract is not a domestic building contract it is not a cost plus contract.
- I find that the informal contract between Tide and Hakuna Matata is not a mixed purpose contract. Mixed purpose contract is defined to mean a contract entered into between a building contractor and building owner that entitles the contractor to be paid for carrying out or managing the carrying out of domestic building work and additional services. The informal contract is between two contractors.
Did Hakuna Matata breach the informal contract?
- I find that Hakuna Matata is in breach of the informal contract by failing to ensure the trim gap complied with the QBCC Guide.
- Mr Duffy’s evidence is that Tide subcontracted tiling works at the site on or around December 2019 and the scope of work included tiling to the front deck and stairs. Hakuna Matata concedes that it performed tiling work to the front deck and stairs.
- Mr Duffy says that purchase orders were sent to confirm acceptance of Hakuna Matata’s formal quote.
- Tide submitted the following purchase orders with the Application, each of which refer to the site in question:
- (a)#0270 created 6 November 2019 – please supply – Tiler – internal defects. Deliver on 8 December 2019;
- (b)#0689 created 14 January 2020 – “instructions” provides 2 pages of terms and conditions - Deliver on is blank;
- (c)#1073 created 15 March 2020 – please supply Tiler - front deck and stairs - Deliver on is blank.
- Hakuna Matata says that the relevant work was completed on 6 January 2020 and was performed pursuant to an informal agreement, the purchase orders attached to the Application were not sent to it and were created after completion of the work. It says that it first saw those documents when it received the Application.
- Tide submitted the following Hakuna Matata invoices with the Application, which each refer to the site in question:
- (a)Invoice #392 dated 8 December 2019 for $2354 (incl GST); purchase order is stated to be N/A. Work is described as Tiling/Install stair tredd (sic), risers, landings, supply and install matt black trim.
- (b)Invoice #399 dated 6 January 2020 for $4730 (incl GST); purchase order is stated to be N/A. Work is described as Install floor tiling 600 x 300 rectified tiles to pool area surrounding and step/splitting tiles in pool area; install floor tiling 900 x 900 rectified tiles to landing and entrance/splitting tiles; install dripp (sic) edge to balcony edge.
- (c)Invoice #456 dated 12 March 2020 for $1375 (incl GST); purchase order is stated to be 270. Work is described as Tiling/install 1 tile on top of pool retaining wall/install 1 tile in tiles insert on pool patio/replace 2 tiles at bottom of stairs/install 600x400 slate stone to pathway along back of house 3 m long/supply and install 15 mm retro l angle around pool cover.
- There is no dispute that Tide paid Hakuna Matata’s three invoices issued totalling $8,459.
- Although the evidence could be clearer, the alleged defective work, discussed in more detail later in these reasons, does not appear to relate to work invoiced in the 12 March 2020 invoice.
- The documentary evidence before me is that the purchase order was emailed to Hakuna Matata on 6 November 2019, the description of the work to be performed was not specific and did not refer to acceptance of a quote or a price.
- Hakuna Matata says there were no terms and conditions included in the purchase order as contended for by Tide above.
- Hakuna Matata says that the work performed by it, the subject of the Application, formed part of the works it invoiced in invoice 399 dated 6 January 2020 being install floor tiling 900 x 900 rectified tiles to landing and entrance/splitting tiles; install dripp (sic) edge to balcony edge, for which it charged $2310 (incl GST).
- There is documentary evidence before me that Hakuna Matata invoiced Tide on 6 January 2020, was requested to provide a copy of the purchase order and emailed a copy of purchase order 270 as described by it on 7 January 2020.
- Copies of the quotes Tide claimed to have been provided by Hakuna Matata are not in evidence before me. The purchase orders do not specifically refer to quotes. Mr Bergman’s evidence does not refer to providing quotes except in relation to options in April 2020.
- I find that it is more likely than not that Purchase order #270 created 6 November 2019 attached to the Response is the document evidencing an instruction to Hakuna Matata by Tide to perform work at the site. There is no detail as to the work required to be performed.
- Tide does not give specific evidence as to the sending of the purchase orders and the basis on which the detailed terms and conditions form part of the informal contract between the parties. Tide’s evidence is that the purchase order, which contained the claimed terms, is dated after the informal engagement in December 2019 and after the works were invoiced in December 2019 and January 2020. I am not satisfied, on the balance of probabilities, that the terms and conditions form part of the informal contract for the work.
- I accept that Tide requested Hakuna Matata to perform tiling works at this site, Hakuna Matata performed tiling works and received payment. Other than the description of the work contained in the invoices, there is no clear evidence as to the scope of work to be performed under the informal contract.
- I also accept that Hakuna Matata as a licensed tiler was obliged to perform the tiling works with reasonable skill and care and in accordance with relevant industry standards including the QBCC Guide. Hakuna Matata effectively conceded this.
Was the work performed by Hakuna Matata defective in breach of the informal contract?
- I find that the trim gap was defective work performed by Hakuna Matata in breach of the informal contract.
- Mr Duffy says that on or about 12 March 2020 the defects to the front deck and stairs were first noticed.
- Mr Duffy attached photographs to his statement. He gives evidence of claimed defects and says that Hakuna Matata returned to site around 4 May 2020 and attempted rectification of them. He refers to various parts of the QBCC Guide:
- (a)Calcium and water ponding on stairs – contrary to paragraph 14.8 of the QBCC Guide, which provides if calcium is present within 12 months it is considered a defect;
- (b)Chrome coloured trim used and spray painted black. Tide says paragraph 13.1 of the QBCC Guide provides that if paint is used for a surface it must be suitable for wear and tear for 12 months;
- (c)Calcium and improper installation of trim leaving the tile edge visible – contrary to paragraph 14.8 of the QBCC Guide;
- (d)Calcium present on front balcony edge – contrary to paragraph 14.8 of the QBCC Guide;
- (e)No silicone present on side balcony trim. Tide says paragraph 12.5 of the QBCC Guide provides that grouting is defective if it becomes loose or dislodged.
- (f)Side balcony trim – gap in tile trim exceeding 2 mm. Tide says paragraph 12.7 of the QBCC Guide provides that uneven tiling is defective if exceeding 2 mm.
- (g)Right balcony trim – large gap in tile trim exceeding 2 mm. Tide says paragraph 12.7 of the QBCC Guide provides that uneven tiling is defective if exceeding 2 mm.
- There are no dates on the photographs. Mr Duffy’s statement does not set out when the photographs were taken to provide evidence as to whether these photographs are said to be taken before or after the attempted rectification.
- The photograph of the right balcony trim in Annexure 1H appears to be a close-up of a photograph sent by Mr Duffy to Mr Bergman on 21 July 2020. I accept that the right balcony trim item above is a claimed defect after the rectification work had been attempted. There is insufficient evidence before me to make a similar finding in relation to the other items listed.
- Mr Duffy says that the defects were not rectified to a standard acceptable under the QBCC Guide. With the exception of the right balcony trim there is no supporting photographic evidence of this contention. The evidence is that Mr Duffy advised Hakuna Matata that Tide required the trim rectified or it would refer the matter to the QBCC. Mr Bergman suggested that ‘a bit of grey silicone or caulking would hide that gap’. Mr Duffy considered that method unacceptable.
- Mr Bergman advised that Hakuna Matata did not wish to return to site, for various reasons, and would pay for another contractor to variously replace the trim or correct the drip edge. Tide referred the dispute to the QBCC and then to the Tribunal. The schedule of defective work filed together with the Application lists one defect, being gap in tile trim said to have been noticed and notified on 18 July 2020. The QBCC letter of 30 November 2020 refers to the claimed defect as large gap in tile trim. Grout missing. The gap is referred to as a 7mm gap. This description is consistent with the right balcony trim item above.
- Hakuna Matata effectively concedes that the gap in the trim is defective work for which it is responsible as it has offered to pay for this work rather than attend site to perform the rectification work itself.
- Tide prepared a rectification scope of works, dated 30 June 2021, which sets out work it contends is required to rectify claimed defects. It refers to the balcony edge trim gaps but also claims:
- (a)The balcony trim has been installed with a 15 mm overhang on one side to flush from the deck making it unsightly from below.
- (b)Significant efflorescence on the tile on the right-hand side due to water ponding under the tiles;
- (c)Significant efflorescence leaching from the balcony trim along the front edge of the balcony;
- (d)Significant efflorescence on a stair tread that has caused damage to the tile trim on the second flight of stairs;
- (e)Tile trim has been supplied as chrome instead of black and spray painted to match, which has warn (sic) away and now showing as chrome;
- (f)Drummy tile at the entry to the external stairs.
- The established measure of damages for breach of contract is to award an amount so that the person is placed in the same position, in so far as money can, as the person would have been in had the contract been performed. Where works are found to be defective, this requires an assessment of the cost of work, which is both reasonable and necessary to ensure Tide receives the benefit of the contract entered into by the parties.
- Tide obtained a quote from another tiling contractor to perform the work set out in the rectification scope of work. The quote is for $5,940 (incl GST). The tiling contractor, which provided the quote, does not indicate whether it considers Hakuna Matata’s works are defective and does not indicate whether it considers the scope of works are both reasonable and necessary to rectify the claimed defective work.
- Mr Duffy says that in addition to the quote Tide will incur:
- (a)costs of a skip bin. Tide has obtained a quote for a skip bin in the amount of $401.50 (incl GST).
- (b)painting touch ups. Mr Duffy conservatively estimates $700 (incl GST).
- (c)Costs of replacement tiles. Tide has produced an order in the amount of $1,468.98 (incl GST).
- (d)management costs. Mr Duffy estimates a project manager for two days for 7.5 hours per day at $90 per hour, totalling $1,485 (incl GST).
- Tide does not explain why the QBCC complaint and these proceedings, when commenced, only related to the trim gap but the rectification scope of works is much more extensive. Although it could be clearer, as I understand it, Tide’s evidence is that because of the delay in rectifying the gap in the trim other defects have manifested.
- Hakuna Matata does not accept that it is responsible for rectification of the other defects.
- There is no clear evidence before me as to when these additional items manifested and, in particular, whether they manifested within 12 months of the work being completed as referred to in the QBCC Guide, so that they would constitute defective work. The evidence before me is that the work was performed by about 6 January 2020, being the date of the second invoice and the rectification work was performed on or about 4 May 2020. The rectification scope of works is dated 30 June 2021. Although it is possible, there is insufficient evidence before me to make a finding that it is more likely than not that they manifested within 12 months.
- Hakuna Matata has obtained a quote from another tiling contractor to carry out rectification to the gap in the trim. The quote provides that the contractor concludes that there is no structural issue with the tiles which justifies more extensive work, referred to as replacing the entire balcony. The quoted amount for replacing the trim and associated works is $1,980 (incl GST). Hakuna Matata have also obtained a quote from the same contractor to replace the entire front balcony in the amount of $4,180 (incl GST).
- Mr Duffy says that Quote 1 does not include the entire scope of work necessary to rectify the defects. He says Quote 1 does not include harnessing for working at heights, stipulate the m2 area, allow for tiles and trims to the two stair treads and the loose landing tile, reinstatement of balustrade or painting damaged adjacent surfaces. He notes that Tide has already purchased replacement tiles. A copy of a sales order is before me.
- Tide has not provided any evidence by an independent expert or contractor as to whether the items set out in the rectification scope of works are defective, the reasonable and necessary work required to rectify the alleged defects nor evidence that failure by Hakuna Matata to rectify the gap in the trim has caused other defects to manifest for which Hakuna Matata is responsible. Whilst Mr Duffy no doubt has relevant experience, he is not independent. I take that into account when assessing the evidence. Importantly, Mr Duffy does not explain why all the work in Tide’s rectification scope of work is reasonable and necessary to rectify Hakuna Matata’s defective works.
- I accept the independent evidence contained in the quote dated 12 August 2021 as to the scope of work required to rectify the trim gap issue and the reasonable costs of doing so.
- I am not satisfied that Tide has established that it is more likely than not that the other items in Tide’s rectification scope of works are defective work for which Hakuna Matata is responsible nor am I satisfied that Tide’s rectification scope of works sets out the reasonable and necessary works to rectify the items even if I was satisfied that they are defects for which Hakuna Matata is responsible.
- Tide has succeeded in establishing some claims and not others. It is appropriate to make directions to allow a party to make an application for costs in light of my reasons.
 Directions made 24 June 2021.
 Application for domestic building dispute filed 15 January 2021 (Application). Costs of $1702 include a claim for Tide’s personnel’s time at 18 hours at $75 per hour ($1350) and apparently the filing fee of $352.
 Directions 24 June 2021.
 Statements of Jarryd Duffy for Tide filed 23 July 2021 and 8 September 2021. Statement of Jake Bergman for Hakuna Matata filed 18 August 2021.
 Application Annexure 2. QBCC letter dated 30 November 2020.
 Queensland Building and Construction Commission Act 1991 (Qld), s 77(1) (QBCC Act).
 Ibid, s 77(2).
 Ibid, Schedule 2.
 Ibid, Schedule 1B, s 4(1)(b).
 Ibid, Schedule 1B, s 4(3)(b).
 Application Annexure 2. QBCC letter dated 30 November 2020.
 Filed 22 January 2021.
 QCAT Act, s 38. QCAT Regulation 2019, s 5 and 8.
 Tide email of 14 April 2021 in response to Directions made 8 April 2021.
 QBCC Act, Schedule 1B s 13, s 14.
 Ibid, Schedule 1B, s 13(5), s 14(10).
 Canavan v Sutton  QCAT 374.
 QBCC Act, Schedule 1B, s 5.
 Ibid, Schedule 1B, s 3(2)(a).
 Ibid, Schedule 1B, s 1 (definition ‘cost plus contract’).
 Ibid, (definition ‘mixed-purpose contract’).
 Statement filed 8 September 2021, .
 Application, Annexure 3.
 Ibid, Annexure 4.
 Application Annexure 4, invoice dated 392 dated 8 December 2019, invoice 399 dated 6 January 2020, invoice 456 dated 12 March 2020.
 Reasons (a).
 A copy is attached to the Response, document 2.
 Statement filed 18 August 2021, document 1.
 Reasons (b).
 Statement filed 18 August 2021, document 4.
 Statement filed 23 July 2021, , Annexures 1A, 1B, 1C, 1E, 1F, 1G, 1H.
 Ibid, .
 Ibid, Annexure 1A.
 Ibid, Annexure 1B.
 Ibid, Annexure 1C.
 Ibid, Annexure 1E.
 Ibid, Annexure 1F.
 Ibid, Annexure 1G.
 Ibid, Annexure 1H.
 Statement filed 18 August 2021, text message 1, p 18.
 Statement filed 23 July 2021, .
 Statement filed 23 July 2021, Annexure 2, Email 28 July 2020.
 Response, Attachment 9, message 21 July 2020.
 Statement filed 23 July 2021, Annexure 3, Email 28 July 2020; Response, attachment 6, email 29 July 2020; Response, attachment 8, Email 21 October 2020.
 Statement filed 23 July 2021, Annexure 5.
 Gates v The City Mutual Life Assurance Society Limited (1986) 160 CLR 1.
 Bellgrove v Eldridge (1954) 90 CLR 613; Tabcorp Holdings Limited v Bowen Investments Pty Ltd (2009) 236 CLR 272.
 Statement filed 23 July 2021, Annexure 6.
 Statement filed 8 September 2021, .
 Statement filed 18 August 2021, quote 1.
 Ibid, quote 2.
 Statement filed 23 July 2021, Annexure 9.
- Published Case Name:
Tide Constructions Pty Ltd v Hakuna Matata Tiling (Qld) Pty Ltd
- Shortened Case Name:
Tide Constructions Pty Ltd v Hakuna Matata Tiling (Qld) Pty Ltd
 QCAT 146
19 Apr 2022