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Newnham Constructions Pty Ltd v Anikin[2022] QCAT 374

Newnham Constructions Pty Ltd v Anikin[2022] QCAT 374

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Newnham Constructions Pty Ltd v Anikin & Anor [2022] QCAT 374

PARTIES:

newnham constructions pty ltd

(applicant)

v

denis anikin

elena anikin

(respondents)

APPLICATION NO/S:

BDL179-21

MATTER TYPE:

Building matters

DELIVERED ON:

18 October 2022

HEARING DATE:

12 October 2022

HEARD AT:

Brisbane

DECISION OF:

Member Deane

ORDERS:

  1. Denis Anikin and Elena Anikin are to pay Newnham Constructions Pty Ltd the sum of $2,600.40.
  2. The Registry is directed to provide a copy of this decision to the Master Builders Queensland and the funds held by the Master Builders Queensland in the amount of $2,600.40 are to be paid to Newnham Constructions Pty Ltd in satisfaction of order 1.
  3. Denis Anikin and Elena Anikin are to pay Newnham Constructions Pty Ltd’s costs fixed in the sum of $358 by 4.00pm on 18 November 2022.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – domestic building dispute – where builder performed work – whether amounts paid to be repaid – whether work performed was in breach of contract – whether proposed method of rectification both necessary and reasonable

Queensland Building and Construction Commission Act 1991 (Qld), s 77, Schedule 1B s 4, Schedule 2

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 38(2), s 100, s 102, s 105, s 107

Queensland Civil and Administrative Tribunal Regulation 2019 (Qld), s 5, s 8

Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86

Bellgrove v Eldridge (1954) 90 CLR 613

Campbell v Queensland Building and Construction Commission [2021] QCATA 34

Gates v The City Mutual Life Assurance Society Limited (1986) 160 CLR 1

Lyons v Dreamstarter Pty Ltd [2011] QCATA 142

Tabcorp Holdings Limited v Bowen Investments Pty Ltd (2009) 236 CLR 272

APPEARANCES &

REPRESENTATION:

Applicant:

Mr S Newnham

Respondents:

Mr D Anikin

REASONS FOR DECISION

  1. [1]
    Denis and Elena Anikin have had an unfortunate and stressful experience in renovating their home. Their expectations have not been met on multiple occasions.  They successfully made a claim against the Queensland Building and Construction Commission (QBCC) statutory insurance scheme (SIS) in relation to works performed at their home by a previous contractor.  The QBCC prepared a scope of works[1] and arranged for Newnham Constructions Pty Ltd, a licensed contractor, to perform those rectifying works in the Anikins’ home. The Anikins signed a contract dated 3 March 2021 with Newnham Constructions (Rectifying Contract) for $19,145.10.[2] 
  2. [2]
    Newnham Constructions also contracted to perform a small amount of additional work for the Anikins for $2,600.40.  The signed contract is also dated 3 March 2021 (Extra Contract).[3] Under the Extra Contract payment was due upon completion of the works.[4]  The parties agreed for the Master Builders Queensland (MBQ) to hold the money to be released by mutual consent or relevantly by order of a tribunal.  The parties agreed that any interest on the deposit was to be kept by MBQ to defray administration costs.   The Anikins paid $2,600.40 to MBQ in early March 2021.[5]
  3. [3]
    Newnham Constructions says it completed the works under both contracts and the Anikins took possession on or about 13 April 2021 but despite request the Anikins have refused to agree for the moneys held by MBQ to be released.  Mr Anikin sent a list of defects to Newnham Constructions on 14 April 2021.[6]  Item 2 on that email raises an issue with the aluminium tile trim on the window and niches.
  4. [4]
    It is not disputed that although the Anikins refused to ‘sign off’ on the Rectifying Contract works, the QBCC accepted the works were performed in accordance with the scope and paid all amounts owing under the Rectifying Contract. 
  5. [5]
    A person involved in a building dispute may apply to the Tribunal to decide the dispute[7] provided the person has complied with a process established by the QBCC to attempt to resolve the dispute.[8]  I am satisfied that the QBCC pre-proceeding dispute resolution process was undertaken prior to Newnham Constructions commencing these proceedings[9] enlivening the Tribunal’s jurisdiction.[10] 
  6. [6]
    A building dispute is defined to include a domestic building dispute.[11] 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.[12]  Reviewable domestic work[13] is defined to mean domestic building work under Schedule 1B section 4, which includes the renovation, alteration, extension, improvement or repair of a home.[14]
  7. [7]
    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.
  8. [8]
    At the hearing Newnham Constructions confirmed that it sought an order that it be paid:
    1. (a)
      $2,600.40 in respect of the Extra Contract;
    2. (b)
      $702.08 in respect of attending site to investigate a leak, invoiced 2 February 2022; and
    3. (c)
      $358 in respect of the filing fee.[15]
  9. [9]
    The Anikins dispute Newnham Constructions’ entitlement to the amounts claimed and counterclaim for a refund[16] of the ‘full amount’ under both contracts being $19,145.10 and $2,600.40.  The relevant counter-application filing fee was paid.[17]  Mr Anikin says, and I accept, that prior to signing the contract he stressed that no modifications to the work should be done without their authorisation. They say that the work was not completed in accordance with the Contracts because there were unauthorised modifications. 
  10. [10]
    The Tribunal may order the payment of an amount found to be owing by one party to another,[18] and costs.[19]
  11. [11]
    The Anikins were not legally assisted in formulating their claim.  The issues for determination are not whether the Anikins’ expectations were not met but rather whether Newnham Constructions breached the Contracts and if so, what damages are payable.  

Has Newnham Constructions breached the Rectifying Contract or the Extra Contract?

  1. [12]
    I find that Newnham Constructions is not in breach of the Rectifying Contract or the Extra Contract.  I find that the Anikins are required to pay Newnham Constructions the Extra Contract price of $2,600.40 as it has completed the work under that contract. MBQ is required to release the amount held by it to Newnham Constructions.

Were the works modified without authorisation?

  1. [13]
    I am not satisfied that the Anikins have established, on the balance of probability, that the works performed did not comply with the scope of work under the Rectifying Contract and the Extra Contract. I am not satisfied that Newnham Constructions modified the works without authorisation.
  2. [14]
    The Anikins contend that the Rectifying Contract works and the Extra Contract works are required to be demolished and re-performed to:
    1. (a)
      reinstall the shower waterproofing angle to allow a frameless shower screen to be installed; and
    2. (b)
      install the window trims in the way performed by the previous contractor and for the niche tile trims to be installed to match the window tile trims when re-installed.
  3. [15]
    As stated earlier it is not disputed that the QBCC accepted the works complied with the Rectifying Contract. Despite this the Anikins contend that the Rectifying works were not in accordance with the Rectifying Contract because:
    1. (a)
      the shower waterproofing angle is excessively proud of the tiles, whereas the previous contractor’s waterproofing angle could not be seen.   They therefore contend that there was an unauthorised modification of the scope of the works.
    2. (b)
      the shower waterproofing angle is excessively proud of the tiles so that a frameless shower screen cannot be installed.  They therefore contend that there was an unauthorised modification of the scope of the works because Mr Anikin says that he told Mr Newnham that they intended to install a frameless shower screen so that the works should have been constructed in a way to permit a frameless shower screen.
    3. (c)
      the aluminium window tile trims were not installed in the same way as the previous contractor’s work.  They therefore contend that there was an unauthorised modification of the scope of the works.
  4. [16]
    The QBCC scope of works, being the scope of works under the Rectifying Contract, relevantly states:

Allow to prepare bed and waterproof including water stop angles to suit unenclosed shower (shower screen by owner) and to provide floor slope to required floor waste.

  1. [17]
    Mr Anakin concedes that the QBCC scope of works and therefore the Rectifying Contract did not expressly provide that the window tile trims were to be installed in the same way as installed by the previous contractor. On its face the scope of works did not provide that the owner was to install a particular type of frameless shower screen or indeed a frameless shower screen. 
  2. [18]
    The scope of work is a reviewable decision under the QBCC Act.  Mr Anikin conceded that they did not dispute the scope of works nor did they provide a list of their requirements.  He says this is because there were so many. 
  3. [19]
    Mr Anikin gave evidence that the claim against the SIS was in respect of cosmetic tiling issues in the previous contractor’s works. There was little evidence before me in relation to the SIS claim.  A copy of the previous contractor’s scope of works is not before me nor is a copy of the complaint form nor the QBCC Building Inspection Report dated 22 May 2020 referenced in the QBCC scope of work, which was incorporated into the Rectifying Contract. Mr Anikin conceded he was not experienced in construction matters.  Mr Anikin says that they expected the works as previously constructed would be replicated. 
  4. [20]
    Mr Newnham’s evidence was that the SIS claim was not in respect of cosmetic issues but rather structural issues such that the QBCC scope of works was to address the structural issues.  I accept Mr Newnham’s evidence because he is experienced in construction matters and because it is consistent with other matters coming before the Tribunal.  It is much more likely that an approved SIS claim would be in respect of structural issues than cosmetic ones.
  5. [21]
    Given there were structural issues with the previous contractor’s work the rectifying contractor would need to ensure those matters were not replicated.  
  6. [22]
    Mr Newnham’s evidence was that:
    1. (a)
      the works have been performed in accordance with relevant standards and the QBCC’s consultant monitored the works to ensure the Rectifying Contract scope of works was carried out to the required standards and building best practice; 
    2. (b)
      although he could not recall whether Mr Anikin had informed him prior to demolition that they intended to install a frameless showerscreen, such a shower screen could be installed and that he had obtained a quote from a supplier to do so.[20]  The author of the quote was not available to confirm that evidence and be questioned.  I take that into account in weighing the evidence.
    3. (c)
      prior to the works being performed the Anikins did not provide any detail of the type of frameless shower screen they wished to install.
  7. [23]
    Mr Beatty, Newnham Constructions’ waterproofing and tiling contractor, gave evidence that the shower angle was above the tiles to comply with the waterproofing code and building code.
  8. [24]
    The Anikins relied upon email communications and a quote from HMD Building Pty Ltd.  Newnham Constructions did not object to me granting leave to the Anikins to call the HMD representative even though the Anikins failed to provide a statement of evidence as directed.  Mr Davies, who was unaware of the Anikins’ intention to use his quote and emails in evidence in these proceedings, gave evidence by telephone without the benefit of a copy of his quote or email correspondence in front of him. 
  9. [25]
    Mr Davies’ oral evidence was, and I accept, that:
    1. (a)
      he did not install showerscreens himself but rather contracted that work to a glazier;
    2. (b)
      it was possible to install a frameless shower screen to the Anikins’ bathroom;
    3. (c)
      because of the required fall towards the strip drain ‘there was nothing that could be done’ about the size of the internal waterproofing angle;
    4. (d)
      it was not necessary to demolish all of the works.  He described that course of action as a ‘waste of time and money’. 
  10. [26]
    Newnham Constructions say and Mr Anikin concedes that the Extra Contract did not expressly specify how the niche trims were to be installed. 
  11. [27]
    Mr Beatty gave evidence that the window and niche trims were installed in accordance with standard building practice to avoid water penetration, better allow water runoff and to avoid mould and discolouration.  He gave evidence that he explained to Mr Anikin prior to commencing the wall tiling that the angles around the niches would be different to the previous window tiling.  He says Mr Anikin accepted his advice.  Mr Anikin’s written evidence is that he does not recall he had such a conversation with Mr Beatty.[21] During the hearing he denied they had such a conversation.  Mr Beatty appeared to have a clear recollection of this discussion. It is difficult to reconcile this evidence although it is not uncommon that witnesses genuinely have different recollections. 
  12. [28]
    Even if Mr Anikin was not expressly told the angles around the niches would be different to the previous window tiling prior to the work being performed, I am not satisfied that the Anikins have established, on the balance of probability, that this difference in window and niche tile trims was an unauthorised modification to the scope of works constituting a breach of either or both contracts.  The scopes of work did not expressly provide for how the trims were to be installed.
  13. [29]
    Mr Davies’ oral evidence was that there did not appear to be anything wrong with the window or niche tile trims but if the trims were to be changed it was possible to do so without demolishing the entire bathroom.
  14. [30]
    Mr Anikin conceded that they have no issue with the quality of the work done but rather the aesthetics and that their expectation was that the tile trims would be installed with the same appearance as the previous contractors’ window trim. There is no evidence before me that the Anikins told Newnham Constructions that this was their expectation. I am not satisfied that the ‘instruction’ that there was not to be modifications without approval is equivalent.
  15. [31]
    During the hearing Mr Anikin contended that the work performed in relation to the shower did not comply with the Rectifying Contract as it did not comply with the QBCC scope of work requirement that it suit an unenclosed shower.  Mr Anikin suggested that the relevant Australian Standard for unenclosed showers, a copy of which was not in evidence before me, required more extensive waterproofing than had been performed by Newnham Constructions. 
  16. [32]
    Mr Beatty’s and Mr Davies’ oral evidence in response to Mr Anikin’s questioning did not support Mr Anakin’s contention as to the waterproofing requirements for unenclosed showers.  I am not satisfied that Newnham Constructions’ work was non-compliant with the waterproofing standards and therefore not satisfied that the work was done in breach of the contract.
  17. [33]
    The weight of evidence supports a finding that Newnham Constructions did not breach the contracts. 

What would be the measure of damages? 

  1. [34]
    I find that, even if the Anikins had established a breach of contract, the Anikins have not established an entitlement to damages.
  2. [35]
    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.[22] Where works are found to be not in compliance with the contract, this requires an assessment of the cost of work, which is both necessary and reasonable to ensure the innocent party receives the benefit of the contract entered into by the parties.[23]  Generally, that requires giving credit for the amount which was to be paid to the contractor but which remains unpaid.
  3. [36]
    Mr Newnham’s and Mr Davies’ evidence is, and I accept, that it is not necessary or reasonable to demolish the entire works to install a frameless showerscreen and reinstall the window and niche tile trims. There is no evidence before me as to the necessary and reasonable cost of rectification.  Given that the claimed non-conformance issues are cosmetic, I am not satisfied that there has been a complete failure of consideration such that the Anikins should get a complete refund under both or under either contract. 
  4. [37]
    The Anikins have failed to prove on the balance of probability the extent of their damages.  There is no basis upon which I could find any amount should be offset from the amount unpaid.

Is Newnham Constructions entitled to be paid for inspection works?

  1. [38]
    I find that Newnham Constructions is not entitled to be paid for the inspection works.
  2. [39]
    In January 2022, Mr Anikin contacted Newnham Constructions in relation to a leak inside the vanity unit and damage to the vanity cabinet.  Mr Newnham and Mr Suliman, Newnham Constructions’ plumbing contractor, attended to inspect the reported leak, conducted various tests and could not establish any leak. Mr Anikin informed them there had been no leak for approximately four days prior to the inspection.  On 2 February 2022 Newnham Constructions invoiced the Anikins $702.08 for the inspection.[24] 
  3. [40]
    Mr Anikin says that, if he had been informed that there was to be a charge, he would not have required them to attend to inspect. Mr Newnham conceded that he did not inform Mr Anikin that there may be a charge for the inspection. Mr Newnham’s evidence was that practical completion was achieved on or about 13 April 2021, the defects liability period under the contract was six months and the request to attend fell outside that period so that it was reasonable to expect the Anikins to pay a callout fee for the inspection where no leak was found.  He says that he and his plumber had to travel from the Gold Coast to Brisbane to attend to the inspection.
  4. [41]
    I accept that the Extra Contract defects liability period was six months from practical completion.[25] However, the undisputed oral evidence was that works under the Rectifying Contract included the removal and reinstatement of the vanity basin and that Newnham Constructions installed a new vanity S bend fitting.  I find that the works relating to the vanity formed part of the Rectifying Contract, which provided for a 12 month defects liability period, which had not expired.[26] In these circumstances, I am not satisfied that the inspection fee is payable, particularly where it was not made clear prior to attendance that a fee may be charged.

Costs

  1. [42]
    I find that the Anikins are to pay Newnham Constructions’ costs fixed at $358. 
  2. [43]
    It is a well-established principle that the Tribunal’s discretion to award costs in a building dispute[27] is a broader and more general discretion than the one conferred by the QCAT Act.[28]  The Tribunal, in exercising its general discretion to award costs, may consider the matters referred to in section 102(3) of the QCAT Act. 
  3. [44]
    The Tribunal may award costs where a party makes a written offer to settle the dispute, the offer is not accepted within the time the offer is open and in the opinion of the Tribunal the decision is not more favourable to the other party than the offer.[29]  Even if the formal requirements to invoke this additional power are not met an offer to settle and whether it was unreasonably not accepted may be a relevant factor in the exercise of the discretion.[30]
  4. [45]
    Attached to the Application are some without prejudice email communications attempting to resolve the matter prior to filing the Application.[31] I did not read them until I made my decision on the merits of this case.   Newnham Constructions offered to accept less than $2,600.40 to resolve the dispute.  The Anikins refused the offer. 
  5. [46]
    It was necessary for Newnham Constructions to bring these proceedings to resolve this matter.   Having regard to the matters referred to in section 102(3) of the QCAT Act and the settlement offer made on 15 June 2021, I exercise my discretion to award costs to Newnham Constructions fixed in the amount of $358 in respect of the filing fee.[32]

Footnotes

[1]  Exhibit 5, attachment SN1.

[2]  Ibid, attachment SN2.

[3]  Exhibit 1, attachment, pages 7-9.

[4]  Ibid, Schedule, clause 6(a).

[5]  Ibid, attachment, pages 14-16.

[6]  Ibid, attachment, page 19.

[7] Queensland Building and Construction Commission Act 1991 (Qld), s 77(1) (QBCC Act).

[8]  Ibid, s 77(2).

[9]  Exhibit 1, Application for domestic building disputes filed 30 July 2021 (the Application).

[10]  Letter QBCC dated 1 July 2021.

[11]  QBCC Act, Schedule 2.

[12]  Ibid.

[13]  Ibid.

[14]  Ibid, Schedule 1B, s 4(1)(b).

[15]  Newnham Constructions did not pursue other claims made in the Application including for interest.  I do not consider those claims.

[16]  Exhibit 9, Response and/or counter-application filed 2 September 2021.

[17] Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 38(2) (QCAT Act); Queensland Civil and Administrative Tribunal Regulation 2019 (Qld), s 5 and s 8 (QCAT Regulation).

[18]  QBCC Act, s 77(3)(a).

[19]  Ibid, s 77(3)(h).

[20]  Exhibit 5, attachment SN4.

[21]  Exhibit 10.

[22] Gates v The City Mutual Life Assurance Society Limited (1986) 160 CLR 1.

[23] Bellgrove v Eldridge (1954) 90 CLR 613; Tabcorp Holdings Limited v Bowen Investments Pty Ltd (2009) 236 CLR 272.

[24]  Exhibit 6, attachment C.

[25]  Exhibit 1, attachment, Schedule, clause 11, page 9.

[26]  Exhibit 5, attachment SN2, p 13.

[27]  QBCC Act, s 77(3)(h); Lyons v Dreamstarter Pty Ltd [2011] QCATA 142.

[28]  QCAT Act, s 100, s 102.

[29]  Ibid, s 105; Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86.

[30] Campbell v Queensland Building and Construction Commission [2021] QCATA 34.

[31]  Exhibit 1, attachment, pages 21-22.

[32]  QCAT Act, s 107.

Close

Editorial Notes

  • Published Case Name:

    Newnham Constructions Pty Ltd v Anikin & Anor

  • Shortened Case Name:

    Newnham Constructions Pty Ltd v Anikin

  • MNC:

    [2022] QCAT 374

  • Court:

    QCAT

  • Judge(s):

    Member Deane

  • Date:

    18 Oct 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Bellgrove v Eldridge (1954) 90 CLR 613
2 citations
Jump To
Cite 1 - (1954) 90 CLR 613
Cite 2 - (1954) 90 CLR 613
Campbell v Queensland Building and Construction Commission [2021] QCATA 34
2 citations
Jump To
Cite 1 - [2021] QCATA 34
Cite 2 - [2021] QCATA 34
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
2 citations
Jump To
Cite 1 - (1986) 160 CLR 1
Cite 2 - (1986) 160 CLR 1
Lyons v Dreamstarter Pty Ltd [2011] QCATA 142
2 citations
Jump To
Cite 1 - [2011] QCATA 142
Cite 2 - [2011] QCATA 142
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272
2 citations
Jump To
Cite 1 - (2009) 236 CLR 272
Cite 2 - (2009) 236 CLR 272

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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