Palmen v Dale Boys Builder Pty Ltd
[2023] QCAT 272
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- Unreported Judgment
- Palmen v Dale Boys Builder Pty Ltd[2023] QCAT 272
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Palmen v Dale Boys Builder Pty Ltd[2023] QCAT 272
Palmen v Dale Boys Builder Pty Ltd[2023] QCAT 272
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Palmen & Anor v Dale Boys Builder Pty Ltd [2023] QCAT 272 |
PARTIES: | douglas edwin palmen (first applicant) debra palmen (second applicant) v Dale boys builder pty ltd (respondent) |
APPLICATION NO/S: | BDL038-20 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 18 July 2023 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Howe |
ORDERS: |
|
CATCHWORDS: | CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where in the course of construction the owners and builder agreed to stand the work down for a period of time whilst the owners were overseas – where the builder did not return to the site on the return of the owners – where the owners purported to terminate based on the provisions of the contract but failed to put the general conditions of contract into evidence – where the owners were in any case entitled to terminate the contract under the general law on the repudiation of the contract by the builder – where the owners were entitled to liquidated damages calculated by the contract schedule – where the self-represented owners were not entitled to recover legal costs incurred before commencing proceedings as necessary steps taken prior to commencement of proceedings Queensland Building and Construction Commission Act 1991 (Qld), s 77(3)(c), s 77(3)(h), Schedule 1B s 10 Queensland Building and Construction Commission Regulation 2018 (Qld), s 54 Cachia v Hanes [1994] HCA 14 Harrison and Anor v Meehan [2017] QCA 315 Mazelow Pty Ltd v Herberton Shire Council [2002] QCA 119 Miller v Lida Build Pty Ltd [2015] QCATA 137 Rintoul v State of Queensland & Ors [2015] QCA 79 |
APPEARANCES & REPRESENTATION: | 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
- [1]Mr and Mrs Palmen (‘the owners’) engaged the respondent builder (‘the builder’) to do building work on their home. They signed a QBCC Level 2 Renovation, Extension and Repair contract on 24 February 2017.
- [2]The contract provided a date for practical completion of 3 June 2017.
- [3]The builder had not completed the work by that date. The owners were away from the property from 8 September 2017 through to 29 October 2017. It was agreed between the parties that further work under the contract would stop whilst the owners were away then resume on their return.
- [4]The owners returned but the builder did not. The owners gave written notice of default in respect of delay in completing the work (and other matters of complaint) on 9 January 2017, requiring rectification of outstanding matters and claimed breaches of the contract within 10 days.
- [5]When the builder continued absent the owners terminated the contract by written notice dated 1 February 2018.
- [6]The owners initially filed a minor civil dispute – minor debt claim in the Magistrates Court at Noosa. That was the wrong application, and the matter was referred to the Tribunal in Brisbane as a building dispute.
- [7]As with many matters involving self-represented parties, the material filed is confusing, important evidence is missing and irrelevant issues are pursued vigorously.
- [8]In the applicants’ statement of evidence filed 17 December 2020 the owners claim:
Liquidated damages $9,550.00
Directly Attributable Costs $3,762.00
Lodgement of QCAT application $ 338.20
Process server’s fee $ 100.00
ASIC reinstatement costs $ 57.00
Interest from 1 February 2018 for Liquidated damages at
4% per annum $ 700.33
interest from 1 February 2018 for Directly Attributable
Costs at 4% per annum $ 275.88
Total $14,783.41
- [9]The builder filed a statement of evidence but was generally unresponsive to the owners’ claims, raising as an issue instead the corporate builder’s director’s capacity to make decisions. In that regard, following an application filed in the Tribunal’s guardianship jurisdiction, administrators were appointed for Mr Boys and the action continued against the corporate builder.
- [10]The owners increased their claim to interest for liquidated damages to $1,798.00 in their final submissions filed 24 June 2022 and added the following new claims:
Interest for indemnity costs $707.00
Gyprock provisional sum overcharge$5,740.16
Interest on gyprock overcharge$1.081.00
- [11]The owners filed an application seeking production by the builder of invoices associated with provisional sum items of windows and gyprock. Certain orders were made directing the documents be produced. The claim about overcharging for windows was subsequently abandoned by the applicants but the claim about overcharge on the gyprock provisional sum continued.
- [12]The builder also filed an interlocutory application to strike out or dismiss the proceedings and for a non-publication order. The application to strike out claimed, without supporting evidence, that it was the owners intention to bring harm on Mr Boys, and that a non-publication order should be made.
- [13]The owners replied to these applications with complaints about the behaviour of the builder’s solicitor, doubts about Mr Boys lack of capacity and concerning the company deregistration of the corporate builder, which deregistration had been countered by the owners applying successfully to ASIC to have the company re-registered.
The issues
- [14]In this mix of mostly irrelevant accusation and counter accusation the true issues in dispute are easily lost to mind. Once the distraction of the bickering between the parties is ignored however, the issues in dispute are few.
- [15]Did the owners validly terminate the contract on 1 February 2018? If yes, are the owners entitled to claim liquidated damages and the other amounts listed? If yes to all or some, in what amounts?
The contract
- [16]The owners rely upon a QBCC Level 2 Renovation, Extension and Repair contract entered into on 24 February 2017. There is only the schedule to the contract put into evidence. The general conditions to the contract to which the schedule items refer are missing. The general conditions are usually very important but it is not unusual that self-represented parties do not understand that.
- [17]The builder claims in its final submissions that the matter at hand is a building dispute relating to the construction by the builder for the owners of a dwelling in three stages on the owners’ block of land.
- [18]The first contract is said to be the initial construction of a small dwelling in 1999. There are no clear details provided about that.
- [19]The second contract, says the builder, was started in 2014. The builder has supplied a copy of a Master Builders Residential Building Contract Schedule bearing date 16 March 2013, with the contract price noted as $218,000 and the scope of work described in item 3 of the schedule as “addition to residence”. The general conditions to that contract is also not made available.
- [20]In the schedule the stages of work for the additions are described as deposit, base stage, frame stage and enclosed stage. The schedule notes the construction is to enclosed stage only. The total construction period is set at 180 days.
- [21]The third contract so-called is a QBCC Level 2 Renovation, Extension and Repair Contract dated 24 February 2017, which is the contract upon which the applicant owners are suing. The starting date is noted as 3 April 2017. The description of the work in item 3 of the schedule is “complete to paint stage existing roof area of partially constructed dwelling. Excluding electrical works, plumbing works, kitchen cabinetry and labour owner supplied front swinging doors.”
- [22]How the three contracts are linked and therefore to be considered together, and to what purpose or result, is not explained by the builder.
- [23]In the material filed by the builder there is a letter from QBCC dated 8 May 2013 confirming that the appropriate insurance had been paid in respect of the second contract with notifiable value of $218,000.
- [24]There is another document in evidence from QBCC (undated) confirming insurance cover taken out for the third contract with a notifiable value of $80,000, the cover commencing from 24 February 2017.
- [25]In the builders final submissions the following vague, confusing allegations without evidence to support the assertions are made:
- Regardless of the termination date, no liquidated damages should be paid to the owners as it was their conduct that caused the loss. As demonstrated in the explanation of the current proceedings the delays, repudiation and termination was caused by the applicants’ own actions.
- The builder’s case is that it was entitled to terminate the contracts on the basis that Applicant (sic) had repudiated the contracts by not performing its obligations under the contracts for a period of approximately three (3) years under the second stage contract and six (6) months under the third stage contract. The Applicant has not paid the complete sum under the second stage contract nor the third stage contract. The Application (sic) obstructed the site access, actively engaged in occupational workplace risks for employees and contractors and failed to make payments when requested.
- The owners conduct in 2014 to abandon the build and go overseas and again in 2017 did the same shows that they were unwilling or unable to perform its contractual obligations, that is, it has evinced an intention to no longer be bound by the contracts.
- Furthermore, the owners stated that it intends to fulfil the contracts only in a manner substantially inconsistent with its obligations and in no other way by requesting variations to the contracts, insisting on interfering with the contract works and obstructing the Respondents employees and contractors from working to meet the schedule.
- [26]The so-called third contract is clear on its face that it is a discrete and independent building contract.
- [27]The contract price is $80,000. It is signed by the parties. It had statutory warranty insurance taken out to its stated value. The description of the work to be done is different to that noted in the 2013 contract though it may well be a continuation of a long term construction plan devised for the dwelling by the owners. The stages of work under the contract are described as deposit $4,000, external cladding and soffits $40,000, internal linings $28,000, a total of $80,000. There is a nominated start date of 3 April 2017 and a practical completion date of 3 June 2017.
- [28]If the builder was owed money under the earlier contracts the builder was entitled to file a building dispute application in the Tribunal but the builder has not done that (or if it has, the fact is not mentioned in the material).
- [29]The builder did file a minor civil dispute application in the Magistrates Court at Noosa in early August 2019. That was the wrong jurisdiction of the Tribunal to commence a building dispute. That being recognised by the Noosa Magistrates Court, the file was transferred to the Tribunal building list in Brisbane and the builder required to pay the additional appropriate fees for a building dispute. The builder failed to do that despite a number of requests from the registry. The file was eventually closed for failure to pay.
- [30]I find there is no basis laid for any entitlement in the builder to terminate the 2017 contract by linking it to earlier contracts between the parties.
Termination
- [31]By letter dated 14 September 2017, solicitors acting for the owners wrote to the builder noting that the owners had put the builder repeatedly on notice to complete the contract by 8 September 2017 to enable the dwelling to be left in a secure and liveable state for house sitters whilst the owners would be away for 6 weeks from 8 September 2017. The letter also noted the completion date of 3 June 2017 had passed and as at 8 September 2017, liquidated damages stood at $4,850.
- [32]The letter goes on to request that by 20 September 2017 a program of works be provided detailing how and when the contract would be completed based on resumption of work on the return of the owners.
- [33]The builder agreed to the request of the owners to put the construction on hold from 8 September 2017 to 30 October 2017. There is an email from the builder to the owners dated 19 September 2017 to that effect.
- [34]The owners returned on about 30 October 2017. The builder did not return to the job. The owners instructed their solicitors to send another letter to the builder on 9 November 2017 noting no program of works had not been provided and to request that again and that the builder return.
- [35]By email dated 22 December 2017 the owners wrote to the builder noting the requested program of works was still outstanding and the contract was more than 6 months past the agreed date of practical completion and that the builder had agreed to return to work the site when the owners returned, which had been 30 October 2017. The builder had not returned as at date of email.
- [36]The file material shows that on 9 January 2018 the owners gave a document entitled Notice of Default to the builder stating that the builder was in substantial breach of the contract for a number of reasons including failing to perform the work under the contract competently; failing to perform the work under the contract diligently; failing to complete the works within the time specified in the contract or within a reasonable time; despite multiple and reasonable requests failing to provide a detailed program of works to complete the project and account for the monies received by the builder; and failing to recommence work on site after 30 October 2017.
- [37]By the Notice of Default the owners advised that “pursuant to clause 26 of the contract” they intended to terminate the contract for the listed breaches if they were not remedied within 10 business days of the date of the Notice.
- [38]By further Notice dated 1 February 2018 the owners gave notice of termination of the contract based on a number of grounds including failure to return to the site to complete the work.
- [39]Clause 26 referred to is not available for consideration because the general conditions have not been put in evidence. The form of contract used is a 2015 version of the QBCC Level 2 Renovation, Extension and Repair contract, and as such is no longer available on the QBCC website (had it been appropriate to rely on a generic copy from the website). It is not necessary to turn to the conditions of contract however because termination was also available to the owners based on the common law, common law rights applying unless explicitly excluded.[1] There is no evidence of that here.
- [40]I find the failure to return to the site and engage further in the project despite notices to do so over nearly four months from 30 October 2017 amounted to repudiation of the contract by the builder. I find the contract was terminated by the owners consequent on the builder’s repudiation of its obligations on 1 February 2018 with the giving of the notice of termination.
Liquidated damages
- [41]The date for practical completion under the contract was 3 June 2017.
- [42]There was an agreed period from 8 September to 29 October 2017 (inclusive) when construction was delayed by agreement between the parties. That is a period of 52 days.
- [43]Though the general conditions to the contract are not in evidence the agreement that there would be liquidated damages paid for each calendar day that practical completion was not achieved is made clear by item 10 of the schedule to the contract. It says there that if the space provided for the notation of the amount of liquidated damages payable is left blank then an amount of $50 per day applies. The space is left blank and I find the liquidated damages agreed is $50 per day.
- [44]The contract was terminated on 1 February 2018. From 3 June 2017 to 1 February 2018 is 243 days, less the downtime of 52 days, that calculates to 191 days during which liquidated damages were payable at $50 per day. That totals $9,550. The owners are entitled to that amount.
Gyprock overcharge
- [45]The owners claim return of $5,740.16 which they say they paid the builder but which was an overcharge for gyprock material and work, a provisional cost item in the contract.
- [46]The owners say they have been advised by QBCC that gyprock should never have been a provisional cost item. That may generally be the case with most jobs, but there may be situations where the builder has difficulty, after making all reasonable enquiries, in calculating a definite amount for that part of the work at the time of entering into the contract. By the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) Schedule 1B s 10:
10 Meaning of provisional sum
- (1)A provisional sum, for a domestic building contract, is an amount that is an estimate of the cost of providing particular contracted services.
- (2)However, subsection (1) applies only to contracted services for which the building contractor, after making all reasonable enquiries, can not state a definite amount when the contract is entered into.
- (3)The reference in subsection (1) to the cost of providing the contracted services includes a reference to the cost of supplying materials needed for the subject work.
- [47]The difficulty is that the owners do not say what gyprock (and corresponding plastering work) has not been supplied and fixed on site. Their claim is focused, rather, on what they say is the builder’s failure to provide evidence of the cost of materials and labour for the plastering work done.
- [48]As the party asserting an entitlement to recover money already paid, the owners bear the onus of proving their claim.
- [49]In the solicitors letter to the builder dated 14 September 2017 is a list of items of claimed defective and incomplete work. There is a reference to plastering around the front entrance and around two doors and a manhole not having been done. That suggests all the other plastering work has been done.
- [50]The owners were provided with a copy of a CSR order for plasterboard in the amount of $2,637.25 and a handwritten invoice from Mr MacDonald to the builder who they identify as a plasterer.
- [51]The builder has provided broad brush details of the value of plastering work in its final submissions filed 17 June 2022 as follows:
CSR$ 2,637.25
A MacDonald$ 3,902.00
Labour$ 2,900.00
Melco$ 200.00
Margin$ 1,927.85
Total$ 11,567.10
- [52]The provisional sum for plastering was $13,915. It is unclear whether the builder claimed payment for all the plastering work. It is unclear what plastering work was paid for when the owners paid the builder $62,000 representing part of the contract price.
- [53]The owners’ calculations are not supported by any independent assessment of the value of the plastering work done, nor independent evidence supporting the claim that there has been an overcharge. Instead the owners “suggest” amounts that they, the owners, consider would have been reasonable charges for the work done. That is not enough.
- [54]The owners’ claim to a partial reimbursement for the money paid for plastering is not made out.
Interest
- [55]In the contract schedule there is reference at item 11 to payment of interest on overdue payments.
- [56]The scope of application of the provision is quite narrow however. It applies to overdue payments. I determine it refers to payments due under the contract, such as the progress payments referred to in item 8 of the schedule, but not paid.
- [57]There is no due date for payment of liquidated damages under the contract. They only occur in circumstances where the builder is late in completing the contract as agreed. Liquidated damages cannot be described as due under the contract given, if the contract is completed as agreed, they will never arise to be due.
- [58]Generally, by s 77(3)(c) of the QBCC Act, the Tribunal is granted power to award damages and interest on the damages at the rate, and calculated in the way, prescribed under a regulation in the course of resolving a building dispute.
- [59]By s 54 Queensland Building and Construction Commission Regulation 2018 (Qld):
Interest—Act, s 77
- (1)For section 77(3)(c) of the Act, interest is payable on the amount of damages awarded—
- (a)if the parties have entered into a contract—at the rate provided under the contract; or
- (b)at the rate agreed between the parties; or
- (c)otherwise—at the rate of 10%.
- (2)The interest is payable on and from the day after the day the amount became payable until and including the day the amount is paid.
- [60]Careful perusal of the Regulation will show that the Tribunal has no power to award interest from the date of termination of the building contract or other date prior to hearing but only from the date of judgment: Miller v Lida Build Pty Ltd [2015] QCATA 137 [37]:
The tribunal has power to award interest on damages at the rate and calculated in the way, prescribed under regulation 34B of the Queensland Building and Construction Commission Regulations 2003 (Qld). Regulation 34B(2) provides that interest is payable on and from the day after the day the amount became payable. Until a decision to award damages is made no amount is payable.
- [61]This was confirmed by the Appeal Tribunal in Worthington v Ryan; Ryan v Worthington [2021] QCATA 138 [73]. In this regard the Tribunal is different to courts.[2]
- [62]The current default rate of 10% I apply from date of judgment.
Directly Attributable Costs
- [63]The claim for “directly attributable costs’ is a claim for legal costs incurred by the owners prior to commencement of proceedings.
- [64]The tribunal’s power to award costs is found in s 77(3)(h) QBCC Act. It is broad brush. The provision simply says the Tribunal has the power to “award costs”.
- [65]The Court of Appeal said in Rintoul v State of Queensland & Ors [2015] QCA 79 that a self-represented party cannot recover compensation for the time spent in preparing his or her case although outlays might be recoverable but only to the same extent that they would be recoverable if the party had been legally represented.[3]
- [66]The question is would a legally represented party be entitled to claim the costs referred to here as “directly attributable costs”?
- [67]It is unclear whether the costs orders available to the Tribunal are cost orders simpliciter or more extensive than that and include costs of and incidental to the proceedings.
- [68]According to the Law of Costs by G E Dal Pont, 5th Ed [1.21] where a statute empowers a court to award costs ‘in relation to’ or ’in respect of’ a proceeding, those words are of wide import, and so it is unlikely that the legislature intended to oust the power to order costs ‘incidental to’ the proceedings, citing Hobart City Council v Triffett [2001] TASSC 139.
- [69]Though the Uniform Civil Procedure Rules (‘UCPR’) applying in Queensland courts do not apply to the Tribunal, the definition in the UCPR of what ‘costs of the proceeding’ means gives helpful guidance. By r 679 UCPR costs of the proceeding means:
costs of all the issues in the proceeding and includes—
- (a)costs ordered to be costs of the proceeding; and
- (b)costs of complying with the necessary steps before starting the proceeding; and
- (c)costs incurred before or after the start of the proceeding for successful or unsuccessful negotiations for settlement of the dispute.
- [70]I see no reason why the Tribunal does not have similar power to make like award in building disputes, that is, the Tribunal may award the party costs of complying with necessary steps before starting the proceeding.
- [71]Having said that, had the applicant owners here been legally represented would they be entitled to claim the expense of $3,762 covering general legal advice before commencing proceedings?
- [72]I have found the contract was terminated pursuant to the general law, not pursuant to any terms of contract requiring certain prescribed formal notices to terminate to be given
- [73]The invoices from the solicitor are very general in description of work done and lack particulars. They cannot be described as directly attributable costs associated with the litigation. The last of them was an invoice dated 17 January 2018. The within proceedings (if commencement is taken from date of filing of the application for minor civil dispute in the Noosa Magistrates Court – both parties filed their initial applications there) were not commenced until some 18 months had elapsed after attending on the solicitors.
- [74]I determine the costs concerned would not be allowed had the owners been legally represented, and they are not to be allowed where the parties are self-represented.
- [75]The owners are entitled to recover some outlays however, which I shall fix. The filing fee of $338.20 is recoverable. Similarly the process server’s fee of $100.00 is allowed. There is an invoice for the cost of that in the final submissions filed by the owners. The amount charged is reasonable.
- [76]I also allow the ASIC reinstatement costs of $57. According to the applicants, after the proceedings had commenced, the builder’s director Mr Boys applied to ASIC to have the respondent company deregistered. There is a letter from ASIC dated 30 September 2020 in the material stating that the company had been “reinstated” by ASIC on that date. There is no receipt for the cost claimed but there is a cost to reinstate a deregistered company and the amount claimed is reasonable.
Conclusion
- [77]The builder must pay the owners liquidated damages of $9,550, plus costs fixed at $495.20, a total of $10,045.20, plus interest thereon from date of judgment until paid.
- [78]The builder’s applications to strike out or dismiss the proceedings and seeking a non-publication order are refused. The builder claims perjury, defamation and harassment on the part of the applicants. There is no evidence offered to support such claims. The parties seem to be generally at odds and view each contrary position taken by the other as evidence of falsehood and deceit, rather than simply different views about common issues.
- [79]The Tribunal has no jurisdiction to deal with defamation. If a party claims harassment the appropriate authority is the police service. None of the factors listed in s 66(2) QCAT Act as a basis for a non-publication order are addressed by the builder and it is not appropriate to grant such simply on whim.