Muqaddas v Faraimo[2022] QCAT 303

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Bushra Muqaddas (the Homeowner) says that she and her neighbours entered into informal agreements with Sapati Michael Faraimo (the Contractor) for work including the demolition and reconstruction of dividing fences and retaining walls and a gate at their homes.  The Homeowner says that she paid amounts to the Contractor, he commenced the work but despite request failed to complete the works and that she and her neighbours have been required to engage other contractors to rectify and complete the works at additional cost.
2. [2]
   The Homeowner applied for orders that the Contractor refund $2,950 paid to him by her, pay the cost to rectify and complete his defective and incomplete work and pay costs.^[1]
3. [3]
   The evidence is that the Homeowner applied for and was granted a waiver of the filing fee usually payable to the Tribunal.  There is no evidence of other costs incurred to support an order for costs.  I find that there should be no order as to costs.
4. [4]
   The neighbours are not parties to this proceeding.  I make no findings as to amounts which may be owed to them by the Contractor.
5. [5]
   The Homeowner’s evidence^[2] amends her claim.  She seeks the amount of $3,490 from the Contractor, details of which are set out below. 
6. [6]
   A person involved in a building dispute may apply to the Tribunal to decide the dispute^[3] provided the person has complied with a process established by the Queensland Building and Construction Commission (QBCC) to attempt to resolve the dispute.^[4] The Homeowner attached to the Application evidence of complying with QBCC pre-proceeding dispute resolution processes enlivening the Tribunal’s jurisdiction.^[5]
7. [7]
   A building dispute is defined to include a domestic building dispute.^[6] Domestic building dispute is defined to include a claim or 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.^[7] Reviewable domestic work^[8] is defined to mean domestic building work under Schedule 1B section 4, which includes the renovation, alteration, extension, improvement or repair of a home^[9] or associated works.^[10] Associated work includes retaining structures and fencing.^[11]
8. [8]
   I am satisfied that the dispute is a domestic building dispute between a building owner and a building contractor relating to the performance of domestic building work or a contract for such work and that the Tribunal has jurisdiction to determine it.
9. [9]
   The Contractor has failed to comply with directions to file a response to the Application.^[12] The Homeowner has requested a decision by default.^[13] She is entitled to a final decision.  The Contractor has also failed to comply with directions to file any statements of evidence.^[14] The Contractor has failed to engage in these proceedings at all. 
10. [10]
    I am satisfied that the Homeowner has served a copy of the Application on the Contractor in accordance with the directions made 15 September 2021 and the amended directions dated 18 October 2021.^[15] I am also satisfied that the Homeowner has served a copy of the documents in support of her application for a decision by default on the Contractor.^[16]
11. [11]
    I am satisfied that the Contractor’s failure to comply with the directions of the Tribunal is an appropriate basis for granting the Homeowner final relief under the QCAT Act.^[17] Further or in the alternative, I am satisfied that, as a result of the Contractor’s failure to file a response, the requirements of section 50A of the QCAT Act in regard to the granting of a decision by default have been met.
12. [12]
    The Homeowner’s evidence is undisputed.  I am required to assess the evidence to determine whether it is sufficiently persuasive to be accepted.  The evidence is that there were two ‘projects’.  I deal with each project separately.

Back Fence

13. [13]
    I find the Contractor is to pay the Homeowner $4,350 in respect of the Back fence works.
14. [14]
    The Homeowner’s evidence is that:

    1. (a)
       On 28 January 2021, the Homeowner, her neighbour and the Contractor entered into an agreement for the Contractor to perform works set out in ‘Fix it’ invoice no 27 dated 25 January 2021, including to remove the existing retaining wall, dismantle the colourbond fence, install a new concrete sleeper retaining wall with galvanised steel posts, reinstall the colourbond fence, provide temporary fencing and clean both yards (Back fence works).  The Back fence works were agreed to be performed in two and a half days.  The contract price was agreed as $3,900.^[18]
    2. (b)
       The agreement was in writing, consisting of an offer to perform the works contained in ‘Fix it’ invoice no 27 dated 25 January 2021 signed by the Contractor and acceptance by the Homeowner and her neighbour signing the invoice on 28 January 2021.
    3. (c)
       The Homeowner and her neighbour agreed to contribute $1,950 each, being 50% of the Back fence works contract price.
    4. (d)
       The Homeowner paid $1,200 to the Contractor on 28 January 2021 by bank transfers.^[19] On 28 January 2021, the Homeowner provided to the Contractor vouchers for rubbish removal to the value of $200.  There is no supporting evidence as to the nature of the vouchers and their value.  On 6 February 2021 the Homeowner paid the Contractor a further $150 in cash at his request to purchase materials for the Back fence works.
    5. (e)
       On 7 February 2021 the Contractor commenced work and performed some work between 7 and 18 February 2021 but the Back fence works were incomplete as at 18 February 2021 despite the contract providing the works would be completed in two and a half days.  The Contractor failed to return to site after 18 February 2021.
    6. (f)
       On 23 February 2021, by email, the Homeowner requested the Contractor to return to complete the works and advised that if he did not do so within 7 days, she would take further action.^[20]
    7. (g)
       On 1 March 2021, by email, the Homeowner again requested the Contractor to return to complete the works and called upon him to respond by that evening failing which she would seek quotes from other contractors to complete the works and commence legal action to recover losses. 
    8. (h)
       The Contractor did not return to site or respond.
    9. (i)
       The Homeowner and her neighbour sought a quote to complete the Back fence works.  The subsequent contractor’s quote states that the incomplete works were substandard.  The amount quoted was $4,544.10 (incl GST) to rectify and complete the Back fence works.^[21] The Homeowner and her neighbour contracted with the subsequent contractor to rectify and complete the Back fence works.
    10. (j)
        The Contractor installed substandard garden posts, rather than the galvanised steel retaining wall posts specified in the contract, requiring all work to be re-performed.
    11. (k)
        On 6 April, 9 April and 12 April 2021, the Homeowner paid the subsequent contractor a total of 2,938.12 of which the Homeowner claims $2,900.^[22]
    12. (l)
        The Homeowner engaged another different contractor to remove rubbish left by the Contractor.  She paid $100 in cash and gave them vouchers for rubbish removal to the value of $125.  There is no evidence of the identity of this contractor nor any supporting evidence such as a receipt nor any evidence as to the nature of the vouchers and their value.
    13. (m)
        She claims that had the Contractor performed the Back fence work in accordance with the contract her share was to be $1,950 but she has paid $4,675^[23] such that her loss is $2,725 in respect of the Back fence work.
15. [15]
    The QBCC Act prescribes minimum documentary requirements for regulated contracts.  A regulated contract is a domestic building contract with a contract price of more than the regulated amount, being $3,300 (incl GST). 
16. [16]
    I find that the contract with the Contractor for the Back fence work was for domestic building work with a price of $3,900 and is a level 1 regulated contract.^[24] Such a contract only has effect if it is in writing, dated and signed by or on behalf of the parties.^[25]
17. [17]
    The undisputed evidence is, and I accept, that the Back fence work contract is in writing, dated and signed by or on behalf of the parties and is therefore enforceable.^[26]

What is the effect of the Contractor being unlicensed?

18. [18]
    I find that the Homeowner is entitled to recover from the Contractor, pursuant to section 42(3) of the QBCC Act, the sum of $1,350.
19. [19]
    The Homeowner notes in the Application that the Contractor was not licensed.  An online QBCC licence search reveals that the Contractor is not currently and was not the holder of a licence at the time he agreed to undertake the work in January 2021 and at the time he carried out the work in February 2021.  There is no clear evidence before me as to when the Homeowner first became aware that the Contractor was unlicensed.
20. [20]
    A person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class under the QBCC Act.^[27] A person who performs unlicensed building work is not entitled to any monetary or other consideration for doing so.^[28]
21. [21]
    Building work is defined relevantly to mean:^[29]

1. (a)
   the erection or construction of a building; or

1. (b)
   the renovation, alteration, extension, improvement or repair of a building; or

1. (c)
   the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage in connection with a building; or

1. (e)
   any site work (including the construction of retaining structures) related to work of a kind referred to above; or

…….

but does not include work of a kind excluded by regulation from the ambit of this definition.

22. [22]
    Queensland Building and Construction Commission Regulation 2018 (Qld) lists work that is excluded from the definition of building work.^[30]
23. [23]
    Having regard to that list and the definition of building work, I find that the Back fence work was building work as the contracted work was site work within paragraph (e) of the definition and not excluded by regulation from the definition.
24. [24]
    It is well established that if any monetary or other consideration has been paid to an unlicensed builder then it must be repaid.^[31] I find that the Contractor was in breach of section 42 of the QBCC Act when he undertook to carry out the building work and when he performed the work.  I find that he was not entitled to be paid for the building work and he is not entitled to retain the payments received.
25. [25]
    The Contractor has not engaged with this proceeding and therefore has not counterclaimed for any amount pursuant to section 42(4) of the QBCC Act, which provides that an unlicensed person may claim reasonable remuneration not exceeding the amount paid in supplying the materials and labour if reasonably incurred but not including any amount for the person’s own labour or any amount for profit.  I do not consider any counterclaim, which may have been available to the Contractor.
26. [26]
    The consequence is that a contract entered into, in breach of section 42 of the QBCC Act, is unenforceable by the contractor but may be enforced by the owner.^[32] There is no evidence before me that the Homeowner should be disentitled from enforcing the contract e.g. that the contract was for an unlawful purpose.
27. [27]
    The entitlement of a homeowner to recover monies paid to an unlicensed builder is the reciprocal of the builder’s disentitlement to receive the payment.^[33] I accept the Homeowner’s evidence that she paid $1,350^[34] to the Contractor under the Back fence work contract. I am not persuaded of the value of the vouchers provided to the Contractor because there is little evidence in relation to the nature of the vouchers.
28. [28]
    The Homeowner is entitled to recover from the Contractor, pursuant to section 42(3) of the QBCC Act, the sum of $1,350.

Claim for damages

29. [29]
    I find that the Contractor is to pay damages for breach of contract in the sum of $3,000.
30. [30]
    I am satisfied that the Contractor was in substantial breach of the contract and also repudiated the contract entitling the Homeowner to terminate the contract and engage others to complete the works and claim damages.  The evidence is, and I accept, that he was in substantial breach of the contract as he failed to install galvanised steel posts as required by the contract, which was central to the durability of the works and that he repudiated the contract by failing to complete the work within the time provided by the terms of the contract, being two and a half days, and by ceasing work prior to its completion by abandoning the site and refusing to communicate with the Homeowner.  I find that the Homeowner effectively terminated the contract upon entering into contracts for the performance of the work by others or by commencing these proceedings.
31. [31]
    The measure of damages for breach of contract is the amount which will put the innocent party in the position they would have been in, in so far as money can do, as if the contract had not been breached.  Generally, that requires giving credit for the amount which was to be paid.  However, the Tribunal has previously found that:^[35]

To give credit for the unpaid balance of the contract price would circumvent the clear legislative intent of s 42 in circumstances where an unlicensed building contractor has no entitlement to any consideration whatsoever for performing building work. Where an unlicensed building contractor does not avail themselves of s 42(4) that is the end of the matter.

32. [32]
    Where works are defective or incomplete, in breach of the contract, this requires an assessment of the cost of work, which is both reasonable and necessary to ensure the homeowner receives the benefit of the contract entered into by the parties.^[36]
33. [33]
    The only evidence I have before me is the subsequent contractor’s quote/invoice and in the absence of any evidence from the Contractor, I accept the work to rectify and complete as both reasonable and necessary.  I accept the Homeowner’s evidence that she paid a total of $ 2,938.12 to the subsequent contractor of which the Homeowner claims $2,900.^[37]
34. [34]
    I accept that it was a term of the Back fence contract that the yards were to be left clean and that the Contractor breached that term of the contract.  The Homeowner’s evidence is, and I accept, that she paid another contractor $100 to remove the rubbish left behind by the Contractor.  I am not persuaded of the value of the vouchers provided to the cleaning contractor because there is little evidence in relation to the nature of the vouchers. 
35. [35]
    I find that the payments of $2,900 and $100 to rectify and complete the Back fence works were reasonable. 

Left fence

36. [36]
    I find the Contractor is to pay the Homeowner the sum of $1,250.
37. [37]
    The Homeowner’s evidence is that:

    1. (a)
       On or about 3 February 2021, the Homeowner, a different neighbour and the Contractor entered into an informal agreement for the Contractor to perform works set out in ‘Fix it’ invoice no 32 dated 3 February 2021, including to supply and install a colourbond fence ($3,000) and to supply and install colourbond pedestrian gates ($500) (Left fence works).  The Left fence works contract price was agreed as a total of $3,500.^[38] The Contractor required a deposit of $2,500 to purchase materials.
    2. (b)
       The agreement was at least partly in writing, consisting of an offer to perform the works contained in ‘Fix it’ invoice no 32 dated 3 February 2021 signed by the Contractor. There is no documentary evidence of acceptance by the Homeowner and the neighbour.  The Homeowner does not give evidence as to how the Contractor’s offer was accepted.
    3. (c)
       The Homeowner paid $2,000 to the Contractor on 9 February, 2021 by bank transfers^[39] and a further $500 in cash was paid to the Contractor.  The Contractor acknowledged payment of the deposit of $2,500 by signing a copy of the invoice.^[40]
    4. (d)
       The Homeowner and her neighbour agreed to contribute $1,750 each, being 50% of the Left fence works contract price.
    5. (e)
       The Contractor ordered and supplied some materials, which cost approximately $890,^[41] but as I understand the Homeowner’s evidence did not commence the onsite work.
    6. (f)
       As stated earlier, the Homeowner requested the Contractor to complete the works and he failed to do so and failed to respond.
    7. (g)
       In or about mid-March 2021, the Homeowner and her other neighbour sought a quote to complete the fencing part of the Left fence works.  The subsequent contractor’s quote is for $1,650 (incl GST) to complete the fencing part of the Left fence works.^[42] The Homeowner and her other neighbour contracted with the subsequent contractor to complete that part of the Left fence works by accepting the quote on 18 March 2021. 
    8. (h)
       On 18 March 2021 the Homeowner paid the subsequent contractor $1,000.^[43] On 29 March 2021 the Homeowner paid the subsequent contractor $560.^[44] She says that her share of those moneys was $1,185.  She also says that another contractor was retained to build the pedestrian gates and that she made a cash payment to that contractor in the amount of variously $400^[45] or $500.^[46] There is no evidence of the identity of this contractor nor any supporting evidence such as a receipt.  She says that she paid a total of $1,685 to subsequent contractors to complete the Left fence works. ^[47]
    9. (i)
       She claims that had the Contractor performed the Left fence work in accordance with the contract her share was to be $1,750 but she has paid $2,935^[48] such that her loss is $1,185 less half the value of the fence material supplied of approximately $445 in respect of the Left fence work, being $740.
38. [38]
    I find that the contract with the Contractor for the Left fence work was a contract for domestic building work with a price of $3,500 and is a level 1 regulated contract.^[49]
39. [39]
    There is no evidence before me that the Left fence work contract was signed by or on behalf of all the parties.  The document in evidence relied upon is dated but only signed by the Contractor.^[50] I find that the informal contract for the Left fence work is, therefore, of no effect and is unenforceable by either the Contractor or the Homeowner.^[51]
40. [40]
    The Tribunal has previously found that a party to such a contract cannot maintain a claim for damages for breach of contract but a claim for damages for work negligently performed may be available.^[52]

What is the effect of the Contractor being unlicensed?

41. [41]
    I find the Homeowner is entitled to recover from the Contractor, pursuant to section 42(3) of the QBCC Act, the sum of $1,250.
42. [42]
    Having regard to the Regulations and the definition of building work, I find that the Left fence work was also building work as such work was site work within paragraph (e) of the definition and not excluded by regulation from the definition.
43. [43]
    I accept the Homeowner’s evidence that $2,500 was paid to the Contractor and her share of that amount was $1,250.  I find that the Contractor was not appropriately licenced in February 2021 when he undertook to carry out the works.  For the reasons set out earlier, the Homeowner is entitled to recover from the Contractor, pursuant to section 42(3) of the QBCC Act, the sum of $1,250 paid under the ineffective Left fence work contract.

Claim for damages - negligence

44. [44]
    I am not satisfied that the Homeowner has established a claim for damages in negligence.
45. [45]
    The Homeowner was directed to provide a statement of evidence, which addressed issues such as whether the Contractor owed the Homeowner a duty of care in undertaking the work, the duty of care owed and whether the duty was breached where there was no written agreement between the parties.^[53] The Homeowner did not address these items because she relied upon the Contractor’s offer as if that was an enforceable written agreement. 
46. [46]
    I am not satisfied that the Homeowner can maintain a claim in negligence as the evidence, as I understand it, is that the Contractor did not perform any of the works required to be performed under this informal agreement, except ordering and supplying some materials.  The Homeowner’s claim is for incomplete works rather than defective works or works negligently performed. 
47. [47]
    There is no evidence before me upon which I can rely to find that the works were performed in breach of a relevant duty of care, even if I found a duty of care existed.

Summary

48. [48]
    I find that the Contractor is to pay the Homeowner a total of $5,600.