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  4. Jones v Daon Projects Pty Ltd - [2023] QCAT 329

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Jones v Daon Projects Pty Ltd[2023] QCAT 329

Jones v Daon Projects Pty Ltd[2023] QCAT 329

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Jones v Daon Projects Pty Ltd [2023] QCAT 329

PARTIES:

Keven Jones

Carmen Jones

(applicant)

v

Daon Projects pty ltd

(respondent)

APPLICATION NO/S:

BDL154-21

MATTER TYPE:

Building matters

DELIVERED ON:

29 August 2023

HEARING DATE:

24 July 2023

HEARD AT:

Brisbane

DECISION OF:

Member King-Scott

ORDERS:

  1. The Tribunal determines as a preliminary issue that the Contract dated 18 July 2020 was lawfully terminated by the Applicants either:
    1. By Notice of Termination issued on 21 October 2021 or, alternatively
    2. At common law.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – whether a building contract properly terminated – grounds for termination – Notice to Remedy Breach one day short of 10 days – whether reasonable time — unreasonable delay in progressing the build – termination at common law

Queensland Building and Construction Commission Act 1999 (Qld)

Queensland Civil and Administrative Tribunal Act 2009 (Qld)

Allen & Taylor v Queensland Building and Construction Commission [2020] QCAT 63

Kelly v Desnoe [1985] 2 Qd R 477

Schofield v QBCC & Anor [2019] QCAT 73

Shevill v Builders Licensing Board (1982) 149 CLR 620.

Stickney v Keeble [1915] AC 386

APPEARANCES & REPRESENTATION:

Applicant:

Self represented

Respondent:

T N Walker Solicitor

REASONS FOR DECISION

  1. [1]
    I am asked to determine this matter as a preliminary issue whether a building contract was lawfully terminated and, if so, by whom?

Introduction

  1. [2]
    The Applicants I will hereafter refer to as “the Owners” wished to make additions to their existing home in Caloundra by adding 3 bedrooms, 2 bathrooms and a carport. The purpose of the extensions was to accommodate the Owners’ elderly parents.
  2. [3]
    I will refer to the Respondent as “Daon Projects”. Its sole director was Jin Bong Choi known as Harry Choi. Mr Choi and the Owners were acquaintances before entering into the Contract.
  3. [4]
    The material filed by the Owners is difficult to understand and contains much irrelevant and indecipherable material. The Owners were represented by Mr Jones. Although, I am sure that the Owners made every attempt to place before me all material in accordance with the directions of the Tribunal, the manner in which they have done so, by reducing the size of large documents to fit within the page, rendered many documents to be only decipherable by a magnifying glass! Multiple documents have also been fitted into one page again making it difficult to decipher them. Consequently, marshalling all the facts of this case has been extremely tedious and time consuming.
  4. [5]
    The exercise was compounded by Mr Choi’s difficulty with English.
  5. [6]
    Neither party wished to advance their case by cross-examining their opponent in any detail but were content to rely upon the written material. In those circumstances, and doing the best I can, I have reached a decision for the following reasons.

Background to the dispute

  1. [7]
    Mr Jones says he engaged architects to prepare plans and specifications for the home additions. They asked  Mr Choi to provide a quote which he duly did. It was accepted and the parties entered into a QBCC New Home Construction Contract dated 18 July 2020 (“the Contract”) to complete the works described in the Contract as This construction includes 2 story house plan and an extra carport with Job details dated 17 July 2020 for $304.700.00. Completion date was to be 185 calendar days from 18 July 2020.
  2. [8]
    The schedule for the Contract states that Daon Projects provided the plans and specifications.[1]
  3. [9]
    Mr Choi in his statement of evidence said the completion date was to be 13 January 2021.[2] The schedule was revised, and the date was extended to 12 May 2021.[3]
  4. [10]
    The Owners complained that they were led to believe that Mr Choi’s company would be carrying out the build. Indeed, Mr Choi said he would live in a caravan on site and supervise the build from there. That did not occur, subsequently, the Owners became aware that he had sub-contracted the works out to various sub-contractors.
  5. [11]
    To date, the Owners have paid in accordance with the Contract:
    1. Deposit     $15,235.00
    2. Base     $48,705.00
    3. Frame     $60,940.00
    4. Enclosed     $76,175.00
    5. Fixing     $60,940.00
    6. Total      $261,995.00
  6. [12]
    By an invoice dated 14 June 2021, variations claimed of $43,461.00.[4] Of that sum, $10,000.00 had been pre-paid by the Owners on 1 April 2021, the remaining sums were disputed.
  7. [13]
    The Owners served on Daon Projects a Notice to Remedy Breach dated 28 September 2021[5] (“the Notice”).
  8. [14]
    Daon Projects, by its solicitors, responded to the Notice by email dated 12 October 2021.
  9. [15]
    On 12 October 2021 the Owners, by their lawyers issued a Notice of Termination.
  10. [16]
    On 1 November 2021 Daon Projects asserted that the Owners purported termination amounted to a repudiation of the Contract and elected to accept the repudiation and terminate the Contract.
  11. [17]
    An inspection report[6] from the QBCC dated 30 November 2021 revealed that the Enclosed Stage was 90% complete, the Fixing Stage had not been commenced and practical Completion stage had not been commenced.
  12. [18]
    Daon Projects issued a variation invoice dated 14 June 2021. Of the 8 items included in the invoice only the first 2 items had been completed at the time of inspection.[7]
  13. [19]
    The variation invoice did not comply with the terms of the Contract nor with the provisions of Schedule 1B of the Queensland Building and Construction Commission Act 1999 (Qld) (QBCC Act).

Applicant case

  1. [20]
    At the time the Contract was signed the Owners were given only part of the documentation (Schedule for QBCC New Home Construction Contract) and believed it was only 5 pages long. They were not given the Contract General Conditions document nor the QBCC Guide.
  2. [21]
    Work commenced on a retaining wall at the back of the property on 3 August 2020. The slab was poured on 24 August 2020. No commencement of works form was completed as required by s. 16 Schedule 1B. Item 5 (Starting date) and 7 (date for Practical Completion) of the Schedule to the Contract were not completed.
  3. [22]
    A work schedule was provided setting a completion date of 13 January 2021. That schedule was revised, and a new schedule provided to the Owners on 5 February 2021. It set the completion date as 12 May 2021. No formal extension was applied for under the Contract as provided for by Clause 23 (Extension of Time).
  4. [23]
    On 28 September 2021 the Owners served the Notice on Daon Projects. The Notice allowed 10 days for compliance but because of a public holiday that intervened there was not the requisite 10 days to comply, and Daon Projects claimed the Notice was defective.
  5. [24]
    Mr Jones, in his statement[8] outlined a number of concerns that he had with the way the works were progressing. I will set them out hereunder.
    1. Work began on 3 August 2020 with the retaining wall at the back of the property. There was slab pour on 24 August 2020. The slab had been poured too big and the stair well had not been properly measured. Plans had to be redrawn and resubmitted to Council for relaxations to be approved.
    2. The plans were issued on 13 November 2020. The Owners were charged $650.00 variation to the plans even though the Owners say it was Daon Project’s fault that the stairs were measured incorrectly.
    3. Work progressed slowly. On 8 December 2020 the Owners requested an updated schedule of works.
    4. The breezeway plans required amendment. Something that the Owners say Daon Projects should have been aware of.
    5. Daon Projects advised on 20 January 2021 that all plans amended, and works were back on track.
    6. Advised by the Building Certifier that certificates had not been submitted, enquiries of Daon Projects, by email on 2 February 2021, did not result in a clear response.
    7. On 18 February 2021 BA Group, the certifier appointed under the Contract forwarded a Notice of Discontinuance to the Owners and the Sunshine Coast Regional Council. The Owners sought an explanation.
    8. The Owners were advised by the certifier that there were 18 defects including a major defect being that the entire verandah had been built with the wrong timber.
    9. New schedule prepared 5 February 2021 but works quickly fell further behind.
    10. The Owners emailed Daon Projects on 23 February 2021 seeking clarification of the certification requirements and the engagement of a new certifier.
    11. In February 2021 Harry Choi advised the Owners that they had underquoted by $60,000.00 and were running out of money and that his assistant Guk’s wife had cancer and he was under a lot of stress and that they were doing their best.
    12. Complaints about Daon Project’s messy work site and shard of metal flying off scaffold into neighbour’s property. Sent a text on 21 March 2021 asking them to keep the site clean.
    13. Recently installed spa bath chipped and waterproofing material deposited on bath.
    14. The Owners noticed that the glass louvres being installed were not green as specified. Request on 25 February that the louvres were to be double glazed green glass. Harry Choi stated that green glass had been specified. The Owners disputed this and were becoming very frustrated.
    15. In April 2021 when GJ James, glaziers, came to install louvres many were damaged and unusable after being left outside for prolonged periods.
    16. Meeting on site on 1 April 2021, the Owners paid $10,000 for extras but no variation document.
    17. Advised that new certifier had been appointed on 12 April 2021, over 2 months after the last certifier resigned.[9]
    18. On 12 April 2021 Daon Projects requested payment for Fixing Stage, Daon Projects would not continue work until payment made. The Owners requested certification that enclosed stage completed.
    19. Owners paid Fixing stage of $60,940.00.
    20. In mid-May 2021 the Owners were concerned with the further delays and the reduced number of workers on site.
  6. [25]
    Many of the items above were not canvassed during the hearing and were not disputed by Daon Projects.
  7. [26]
    The Notice set out a number of complaints that are not specifically referred to in the Owners complaints above.
  8. [27]
    The Notice raised complaints which I have summarised below:
    1. Not providing a commencement date for the works, which commenced on 3 August 2020,  as required by s. 16 of Schedule 1B of the QBCC Act.
    2. Failing to carry out the work diligently and maintain reasonable progress with the contract in breach of Clause 17.3 of the contract.
    3. Claiming for a progress payment of fixing when the relevant stage had not been started and the enclosed stage had not been completed contrary to Clause 19.1(b) of the Contract and s. 34 of Schedule 1B of the QBCC Act.
    4. Failing to perform the works in an appropriate and skilful way and with reasonable care and diligence in breach of s. 25 of Schedule 1B of the QBCC Act.
  9. [28]
    The Owners in their  submissions[10] (prepared by lawyers) to the QBCC in respect of their claim for Home Warranty Insurance the Owners set out the several substantial breaches of Daon Projects. They were:
    1. On 18 April 2021 Daon Projects claimed an amount for the fixing stage despite having not completed the enclosed stage and not having started the fixing stage. It is alleged that Daon Projects refused to return to the works until the progress payment had been made.
    2. Daon Projects failed to complete the works as required under the Contract and failed to return to the site after 21 May 2021.
    3. Daon Projects otherwise breached its obligations under the contract and Schedule 1B of the QBCC Act by failing to issue a commencement notice and failing to comply with the requirements for variations to be agreed.
  10. [29]
    The Owners issued and served a Notice of Termination dated 21 October 2021.[11]

Respondent’s case

  1. [30]
    Daon Projects, by its solicitors, responded to the Notice by email dated 12 October 2021. It took issue with the time allowed to respond in the Notice which did not take account of a public holiday in the period of 10 business days and hence it was submitted that the Notice was defective. Consequently, it did not provide sufficient time to comply with the demands of the notice.
  2. [31]
    The response raised other issues, namely:
    1. It did not adequately identify the breach or the factual matrix by which the breach might be discerned;
    2. The requirement of the non-delivery of the commencement notice had been waived by the Owners’ conduct;
    3. As to the progress of the works;
      1. (i)
        There has been verbal abuse by Mr Jones;
      2. (ii)
        The Owners have demanded expansion to the scope of works without formal variation;
      3. (iii)
        The Owners have interfered with the works. Subsequently, Daon Projects asserted that the Owners were in substantial breach for failure to pay a variation invoice.[12]
    4. The Owners are not in a position to give a breach notice as they are in substantial breach themselves, in that they have interfered with the works themselves.

The witnesses

  1. [32]
    Keven Jones gave evidence on his own behalf and for his wife, who did not attend the hearing. Mr Jones expanded on his written statements and was cross-examined by Ms Walker, solicitor for Daon Projects. He answered questions frankly and I found him to be a truthful witness.
  2. [33]
    I do not accept that Mr Jones’s alleged abuse amounted to anything more than robust criticism of Mr Choi and his associates, justified by the lack of progress and the frustration that he and his wife were experiencing as a consequence.
  3. [34]
    Mr Harry Choi requested, and had, the assistance of a Korean interpreter during the hearing. I asked him whether he could respond to some of the questions in English without the questions being interpreted. He was able to do so. However, he was difficult to understand, and I find it surprising that he was able to conduct his business with the Owners, if that was his level of understanding.
  4. [35]
    Having heard Mr Choi I am not surprised with Daon Projects’ failure to comply with the formalities of the Contract and the requirements of the QBCC Act which I have set out below. His level of understanding of these matters must be seriously doubted.

Had Daon Projects breached the terms of the Contract?

  1. [36]
    From the material filed by the parties I am able to categorise what appear to be various indisputable  breaches of the Contract by Daon Projects, some which might be considered substantial, others exposing Daon Projects to penalties. I will deal with each seriatim.

Provision of copy of Contract to Owner

  1. [37]
    Section 15 of the QBCC Act requires the building contractor to provide the owner a readily legible signed copy of the contract. Failure to do so exposes the builder to a maximum penalty of 60 penalty units.
  2. [38]
    The Owners say that they only received 5 pages of the Contract which would appear to be the Schedule for QBCC New Home Construction Contract. The Owners did not receive the General Conditions nor the Consumer Building Guide. They discovered these documents much later when they did their own research. The failure to provide the latter document exposes the building contractor to a further 20 penalty points.[13]

Non-issue of a commencement certificate.

  1. [39]
    Under s. 16 of the QBCC Act the building contractor must, within 10 business days of commencing the work give the owner a commencement notice signed by  the contractor stating the date the subject work started and the date for practical completion. Failure to do so exposed the contractor to a maximum of 40 penalty units. The provision of a commencement date is necessary to notify a homeowner of both the date of commencement and the date for practical completion and for the determination, if necessary, of liquidated damages.
  2. [40]
    Item 5 and 7 of the Schedule omit these dates. It is not sufficient to say that the owners can work the dates out themselves.

Extension of time

  1. [41]
    Daon Projects eventually provided a date for completion of the Contract which was to be 13 January 2021. However, a revised completion date of 12 April 2021 was communicated to the Owners with a revised schedule on 5 February 2021. No extension of time was sought as required by Clause 23 of the Contract or s. 42 of the QBCC Act.
  2. [42]
    The basis for an extension of time claim are set out in clause 23.1 (a) of the Contract. They are listed as a variation of the contract, delays caused by the owners, a delay event in Schedule 6B being availability of raw materials or inclement weather or another unreasonably foreseeable cause beyond the control of the contractor.
  3. [43]
    Section 42 of the Act sets out the requirements as follows:
  1. (1)
    The building contractor under a regulated contract may only claim for an extension of time under the contract if—
  2. (a)
    the delay causing the need for the extension of time was—
  3. (i)
    not reasonably foreseeable and beyond the reasonable control of the contractor; or
  4. (ii)
    caused by the building owner; or
  5. (iii)
    caused by a variation of the contract complying with schedule section 40; and
  6. (b)
    the claim is made to the building owner in writing; and
  7. (c)
    the claim is given to the building owner within 10 business days of the building contractor becoming aware of the cause and extent of the delay or when the building contractor reasonably ought to have become aware of the cause and extent of the delay; and
  8. (d)
    the owner approves the claim in writing.
  9. (2)
    A building contractor under a regulated contract must not seek to rely on an extension of time under the contract unless the contractor claimed for the extension of time in compliance with subsection (1).
  10. (3)
    A building contractor under a regulated contract must give the building owner a signed copy of a claim for an extension of time within 5 business days of the owner approving the claim.
  1. [44]
    Failure to comply with subsections (2) and (3) exposes the contractor to 20 penalty points in each case.
  2. [45]
    Needless to say, Daon Projects failed to comply with either the provisions of the Contract or the QBCC Act.

Workmanship

  1. [46]
    The original slab when poured was the wrong size.
  2. [47]
    One major defect was the use of the wrong timber on the verandah / deck. This was conceded by Daon Projects early in the build with a promise that the timber would be changed.[14] It never was.
  3. [48]
    Errors in stairwell design resulting in a need to redraw plans and  obtain further approvals.
  4. [49]
    Several reports criticise the standard of workmanship. See IBIS Report dated 19 May 2022[15] sets out a number of defects.

Failure to obtain written approval for variations.

  1. [50]
    Daon Projects invoiced the Owners on 14 June 2021[16] for a variety of variations totalling $43,461.00. Daon Projects’ solicitors in their submissions stated that their client would not continue work until this invoice was paid.[17] They had last attended the site on 18 May 2021.
  2. [51]
    The QBCC Act requires the following procedure for a variation.
  1. 40
    Variations must be in writing
  2. (1)
    This section applies if there is to be a variation of a regulated contract.
  3. (2)
    The building contractor must give the building owner a copy of the variation in writing before the first of the following happens—
  4. (a)
    5 business days elapse from the day the building contractor and the building owner agree to the variation;
  5. (b)
    any domestic building work the subject of the variation starts.
  6. Maximum penalty—20 penalty units.
  7. (3)
    The building contractor may give the building owner the variation under subsection (2)—
  8. (a)
    personally; or
  9. (b)
    by sending it by post, facsimile or email; or
  10. (c)
    in accordance with any provision in the contract providing for service of notices on the building owner by the building contractor.
  11. (4)
    In a proceeding for a contravention of subsection (2), it is a defence for the building contractor to prove that—
  12. (a)
    the variation is for domestic building work that is required to be carried out urgently; and
  13. (b)
    it is not reasonably practicable, in the particular circumstances, to produce a copy of the variation in writing before carrying out the work.
  14. (5)
    The building contractor must not start to carry out any domestic building work the subject of the variation before the building owner agrees to the variation in writing.
  15. Maximum penalty—20 penalty units.
  16. 41
    General contents of document evidencing a variation
  17. (1)
    The building contractor under a regulated contract must ensure a document evidencing a variation of the contract complies with the formal requirements for a variation.
  18. Maximum penalty—20 penalty units.
  19. (2)
    The document evidencing the variation complies with the formal requirements if it—
  20. (a)
    is readily legible; and
  21. (b)
    describes the variation; and
  22. (c)
    states the date of the request for the variation; and
  23. (d)
    if the variation will result in a delay affecting the subject work— states the building contractor’s reasonable estimate for the period of delay; and
  24. (e)
    states the change to the contract price because of the variation, or the method for calculating the change to the contract price because of the variation; and
  25. (f)
    if the variation results in an increase in the contract price—states when the increase is to be paid; and
  26. (g)
    if the variation results in a decrease in the contract price—states when the decrease is to be accounted for.
  27. (3)
    Any increase in the contract price as a result of the variation can not be required to be paid before work the subject of the variation is started.
  1. [52]
    Clause 21 of the Contract provides:
  1. 21.1
    The work under this Contract may be varied by way of an increase, decrease or substitution of work under this Contract agreed between the Contractor and the Owner provided that, before work commences and before any additional payment is required, the details of the variation are put in writing in a Variation Document agreed in writing by both parties.
  2. 21.2
    The Variation Document maybe a QBCC Form 5 - Variation Document, or other similar appropriate document with the particulars completed in accordance with the requirement of Schedule 1B of the QBCC Act, agreed in writing by both parties.
  1. [53]
    Clause 21.3 further requires that the variation document comply with the requirements of Schedule 1B of the QBCC Act referred to above.
  2. [54]
    The invoice was itemised.[18] Item 1 had been paid. Items 3 and 7 of the invoice had already been paid as part of the $10,000.00 advanced on 1 April 2021. Item 2 and 6 required Daon Projects to replace the verandah timber which they conceded was their mistake and was not a cost that the Owners were required to pay. Item 4 Kitchen Cabinets were not installed. Items 5 and 8 refer to a cabinet door change which were not requested and not needed.
  3. [55]
    Contrary to the provisions of the Act and the Contract, there appears to have been no agreement by the parties in writing to the variations, and Daon Projects had demanded payment before the work had been carried out. Daon Projects committed an offence under the QBCC Act with a maximum penalty of 20 penalty points.

Failure to carry out the works and failure to maintain reasonable progress

  1. [56]
    Clause 17.3 of the contract provides:

the contractor must diligently carry out the work under this contract and must not except as permitted by this contract, delay, suspend or fail to maintain reasonable progress in the performance of that work.”

  1. [57]
    It is noted that Daon Projects have not been on site since 21 May 2021 and the works remain incomplete. Clause 26.4 of the Contract defines substantial breach as including but not limited to a number of events including (d) unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress.

Demanding stage payments not completed

  1. [58]
    Daon Projects claimed for payment of stages not completed or even not started contravenes Section 34 of Schedule 1B of the QBCC Act. The section provides:
  1. (1)
    The building contractor under a regulated contract must not claim an amount under the contract, other than a deposit, unless the amount -
  2. (a)
    is directly related to the progress of carrying out the subject work at the building site; and
  3. (b)
    is proportionate to the value of the subject work that relates to the claim, or less than that value.
  4. Maximum penalty - 50 penalty points
  5. …
  6. (3)
    For subsection (1), a building contractor is taken to claim an amount if the contractor demands or receives the amount.
  1. [59]
    In my opinion, its demand for payment of stages of the project that had not been started let alone completed, and retention of those monies when paid, amounts to a breach of the Contract.

Daon Project’s reasons for delay

  1. [60]
    In a response to an email from the Owners, Daon Projects responded by email dated 28 June 2021,[19] that the main causes of the delay were:
    1. Shortage of timbers in Australia;
    2. Site evacuation caused by payment delay.
  2. [61]
    Additionally, Daon Projects relied upon amendments to the layout by the Owners, in particular:
    1. Kitchen on ground floor;
    2. Laundry upper floor;
    3. Plywood garage;
    4. Skylight position change;
    5. Roof type change on the verandah and carport.
  3. [62]
    In respect to the second schedule of works that Daon Projects presented, it said it was dependent on everything being ok, but it wasn’t, so they did not feel bound by the schedule.[20]
  4. [63]
    Daon Projects further responded that the delays in construction were caused by problems they faced:

Being exposed to asbestos when we worked at the balcony and then our contractors complained and almost sued Daon Projects for personal damages;

Payment delay caused the depreciation (sic.) of Daon Projects from contractors and suppliers;

Your verbal abuses toward our workers incurred mental anguish.[21]

  1. [64]
    Daon Projects relied on Clause 13.4 of the Contract which provides:

The Owner … must not unreasonably interfere with the performance of the (works) when at the site.

  1. [65]
    On 17 May 2021 Daon Projects emailed the Owners as follows:

Just wondering if someone made visit to the site and did some works while we are away from the site.

I found out some plasters were sanded by someone upstairs, which is quite weird.

Please refer to attached photo.

  1. [66]
    The tenor of the above email does not suggest any great concern by Daon Projects. At least not the great concern that it expressed in its submissions, where it was alleged that the Owners had a third party remove asbestos material from the site.  Some photographs were attached but are of little probative value. The issue was not developed further at the hearing and was denied by the Owners.  I do not consider that it was seriously advanced as a reason for not continuing with the works.
  2. [67]
    Having heard Mr Jones’s explanation and Mr Choi on the issue of abuse and bullying  I accept Mr Jones’s version that he was upset at the delays and lack of explanation, but the exchange, as I have already found, was not such as to amount to abuse or bullying as alleged by Daon Projects.
  3. [68]
    The shortage of timber was not delaying the project according to Daon Projects in its email to the Owners of 12 April 2021 where it stated … I think the timber delivery does not affect the total schedule because remaining carpentry works are not heavy on the interior site.
  4. [69]
    Daon Projects said it would attend to the outstanding list of uncompleted matters when they  were paid.[22] The following is the Owners list of incomplete items with Daon Projects’ comments.[23]
    1. Lockable doors and garage doors. Comment: locks will be applied to specific doors, mentioned on the contract, the others have only doorknob. Garage stores ready to be able to after the plywood installation
    2. Breezeway completion. Comment: only the roof will be installed, the others are the scope of the client.
    3. Carport and verandah completion. Comment: Once we start your jobs over (sic.), the process will be going on.
    4. Eaves finished and second coat of paint. Comment: once we start your job over, the process will be going on.
    5. Block work sealed, rendered and painted. Comment: Once we start your job over, the process will be going on, however, negotiation with the neighbour regarding the administration is your scope.
    6. Flooring for new house. Comment: once we start your job over, the process will be going on.
    7. Wardrobe installs. Comment: once we start your job over, the process will be going on.
    8. Bathrooms fully installed. Comment: once we start your job over, the process will be going on.
    9. Kitchens fully installed. Comment: once we start your job over, the process will be going on.
    10. Old plumbing and electrical works. Comment: once we start your job over, the process will be going on.
  5. [70]
    Many of the problems that have arisen in this build arose from the failure by Daon Projects to comply with the Contract and the QBCC Act. The purpose of those requirements was designed to avoid as much as possible disputes of the kind that have arisen here. Disputes in relation to variations and extensions of time may have been avoided.
  6. [71]
    Daon Projects has demonstrated, by its conduct, a complete disregard to the requirement and formalities of the Contract. It failed to provide copies of the General Conditions or the Consumer Building Guide. It demanded payment for stages when work had not been completed or indeed started. It failed to respond to the certifier’s requirements.
  7. [72]
    On the other hand, the material suggests that the Owners had paid all stages of the build on time and when requested and they had even paid some monies in advance to show good faith in an attempt to have the workers remain on site.
  8. [73]
    Nothing in the material filed by Daon Projects or in the oral evidence leads me to the conclusion that the Owners were in breach of the Contract.

Was the Notice Defective?

  1. [74]
    The notice was issued on 28 September 2021 and demanded the breaches be remedied by 12 October 2021. Monday 4 October 2021 was a gazetted public holiday in Queensland and was excluded from the definition of “business day” under the contract. Therefore, the requisite 10 working days was not given. That does not necessarily mean that the notice is ineffective unless it can be demonstrated that the breach could have been remedied had proper length of notice been given.[24]
  2. [75]
    In my opinion Daon Projects would not have remedied the alleged breaches in 10 days. The Notice required it to:
    1. provide a commencement notice pursuant to s. 16 of Schedule 1B of the QBCC Act; and
    2. Recommence the works pursuant to the contract; and
    3. Provide a date for practical completion; and
    4. Refund the sum of $60,140.00 to K & C Jones.
  3. [76]
    Some of those demands were not achievable, such as notification of commencement dates and providing a date for practical completion as the dates for compliance with the QBCC Act had passed. Nevertheless, dates may have been able to have been provided. However, in my opinion, Daon Projects based on their conduct up to the time of the Notice, were not going to return to work until the amount they were claiming for the variation was paid, nor were they going to refund the $60,140.00.
  4. [77]
    The decision of Schofield v QBCC & Anor[25] is very similar to the instant case. In Schofield the contract was a divisible contract. The builder was paid according to the completion of stages of the house. The owners, the Schofields, were contractually constrained from taking possession of the property and using it until practical completion had been reached by the builder and the contracted price paid in full by the owner. The contract did not provide that time was the essence of the contract. There was a requirement under Schedule 1B of the QBCC Act that the builder proceed with reasonable diligence and to that extent time was relevant.
  5. [78]
    The facts in Schofield are remarkably similar. The Tribunal found:

[54] In the case here, the delay in completing the house to practical completion was a breach of a term 15 of the contract but for the Schofields’ indulgence in permitting practical completion to be extended on several occasions. Certainly, the parties had agreed that practical completion would be extended to 29 September 2017 and that the Schofields could terminate the contract unilaterally if that date were not met. By this stage [the builder] had been given ample time to complete the job and ample notice of the consequences of failing to do so. If nothing more had to be considered, the Schofields were entitled to give [the builder] a notice of termination on 30 September 2017, but they did not do so. They indulged [him] a little more by allowing him additional time to complete the job. They did not issue a notice of intention to terminate until 3 October 2017.

[55] Having issued a notice of intention to terminate under cl 20.1(h) of the contract the Schofields had to allow [the builder] 10 business days after he received the Schofields’ notice in which to remedy his breach. The Schofields’ solicitor issued a premature termination notice on [the builder] on 17 October 2017 that was, insofar as it purported to rely on the contract, ineffective as noted in paragraph [45].

  1. [79]
    The Tribunal relied upon the decision of Stickney v Keeble[26] where Lord Parker of Waddington said:

The time limited by such a notice is sometimes referred to as having become, by virtue of the notice, of the essence of the contract. In considering whether the time so limited is a reasonable time the Court will consider all the circumstances of the case. No doubt what remains to be done at the date of the notice is of importance, but it is by no means the only relevant fact. The fact that the purchaser has continually been pressing for completion, or has before given similar notices which he has waived, or that it is specially important to him to obtain early completion, are equally relevant facts..

  1. [80]
    The Tribunal found in Schofield that in all the circumstances the notice, issued by their solicitor terminating the contract, was effective.
  2. [81]
    The error in the Notice is not fatal to its effect in making time of the essence of the Contract. I find that the Contract was validly terminated by the Owners on 21 October 2021 by the Notice of Termination.

Termination at common law

  1. [82]
    At common law where a party renounces its liability under a contract demonstrating an intention to no longer be bound or to fulfil its obligation under the contract in a manner substantially inconsistent with its obligations, then an innocent party is entitled to accept the repudiation and terminate the contract.[27] All of the circumstances relevant to performance should be considered when determining whether there has been a repudiation. A party that is in breach of a contract may still accept repudiation provided that it has not itself repudiated the contract.[28]
  2. [83]
    The right to terminate at common law is not excluded by the Contract. The Contract provides that the right to terminate under Clause 26.2 is in addition to any other powers, rights or remedies the terminating party may have.
  3. [84]
    There were numerous requests by the Owners for Daon Projects to progress the build and incentives by the Owners for them to do so by payment of progress payments and variations to which they were not entitled.
  4. [85]
    The accumulation of breaches of the Contract by Daon Projects was indicative of an intention not to be bound by its contractual obligations. I have already commented on the scant disregard that Daon Projects had to the observance of its obligations under the Contract. 
  5. [86]
    The revised completion date was advised to the Owners on 5 February 2021. The following event occurred between the parties leading up to Daon Projects refusing to attend the build until they were paid for extra work they alleged that they had performed:
    1. The Owners expressed by email dated 27 March 2021 their concern as to the progress of the build from late March 2021. At that time there was concern as to lack of progress in good weather and no workers on site for a week.[29]
    2. The Owners expressed concern by email dated 12 April 2021 that the schedule of works was not being followed and timber had not been ordered. Daon Projects agreed schedule not being adhered to and timber had not been ordered in advance but only ordered that day.[30]
    3. Because of the late appointment of a certifier certain stages had not been certified and the Owners were precluded in drawing down funds from their bank until certification. The new certifier certified the framing stage with some exclusions.
    4. By email dated 10 May 2021 the Owners again expressed concern with progress of the build with no hope of  the completion date was 12 May 2021. Advised that bank had approved payment of fixing stage and no more funds would be available until house finished.
    5. Fixing stage payment of $60,940.00 paid on 12 May 2021.
    6. Daon projects advised that it would resume works on 17 May 2021.[31]
    7. Owners email Daon Projects on 17 May 2021 only one contractor on site. Request for confirmation of building schedule for various matters itemised in the email.
    8. Owners email Daon Projects on 19 May 2021 expressing concern that email of 17 May 2021 has not been responded to. Daon Projects advised that no extension of time has been agreed to and that the Owners reserved their common law rights.
    9. Daon Projects advised the Owners by email dated 21 May 2021 that two contractors engaged one working on site the other was backup to supply material.
    10. Owners email Daon Projects on 6 June 2021 expressing concern that schedule not being adhered to and only one tradesman on site. List of items requiring attention.
    11. Daon Projects advised the Owners by email dated 6 June 2021 that they are doing the best that they can.[32]
    12. The QBCC was engaged and Daon Projects advised the Owners by email dated 7 June 2021 they would hold work until everything is clarified, and advised that they are struggling with the verbal abuse and being treated like subordinates.
    13. Daon Projects advised the Owners by email dated 11 June 2021 that they should take responsibility for delay.
    14. Daon Projects advised the Owners by email dated 22 June 2021 that another contractor had been on site that they had been required to do extra work which had not been paid for and they would not be returning to site until paid for extra work.[33]
  6. [87]
    It is clear from the above events that the Owners could have little faith in Daon Projects completing the build, particularly when they made clear that they would not do so unless they were paid for the extra work. They seemed to overlook the fact that they had received significant amount of funds which they were not entitled to.
  7. [88]
    In my opinion at this stage, by 22 June 2021, Daon Projects had exhibited an unwillingness to perform the Contract and continued to do so. That amounted to a substantial breach and entitled the Owners to terminate the Contract at common law.

Footnotes

[1] Appendix A (page 3) to Statement of evidence of Keven Jones filed 20 June 2022

[2] Statement of Harry Choi dated 24 August 2022 paragraph 17

[3] Ibid. paragraph 25

[4] Exhibit 1

[5] Appendix 7 Keven Jones Statement filed 27 October 2022

[6] Appendix 3 Keven Jones Statement filed 18 January 2022

[7] Exhibit 1

[8] Statement of Keven Jones dated 5 July 2021 attached to the Application for domestic building disputes filed on 6 July 2021

[9] Appendix 24 to Application for domestic building disputes filed on 6 July 2021

[10] Annexure K to statement of Keven Jones filed 20 June 2022

[11] Appendix 8 Keven Jones Statement filed 27 October 2022

[12] Respondent’s submissions date 24 February 2023.

[13] Section 18 QBCC Act

[14] Appendix 15 to Application for domestic building disputes filed on 6 July 2021

[15] Annexure M to statement of Keven Jones filed 20 June 2022

[16] Harry Choi statement HC21

[17] Letter Robinson Locke  to QBCC dated 12 November 202

[18] Exhibit1

[19] Harry Choi statement HC-23

[20] Harry Choi statement HC-23 page 1

[21] Ibid page 2

[22] Statement of Harry Choi HC-22

[23] Statement of Harry Choi HC-23

[24] Visual Building Construction Pty Ltd v Amistead (No 2) [2019] NSWCA280

[25] [2019] QCAT 73

[26] [1915] AC 386.

[27] Shevill v Builders Licensing Board (1982) 149 CLR 620.

[28] Kelly v Desnoe [1985] 2 Qd R 477

[29] Appendix 22 to Application for domestic building disputes filed on 6 July 2021

[30] Appendix 25 to Application for domestic building disputes filed on 6 July 2021

[31] Appendix 28 to Application for domestic building disputes filed on 6 July 2021

[32] Appendix 30 to Application for domestic building disputes filed on 6 July 2021

[33] Appendix 31 to Application for domestic building disputes filed on 6 July 2021

Close

Editorial Notes

  • Published Case Name:

    Jones v Daon Projects Pty Ltd

  • Shortened Case Name:

    Jones v Daon Projects Pty Ltd

  • MNC:

    [2023] QCAT 329

  • Court:

    QCAT

  • Judge(s):

    Member King-Scott

  • Date:

    29 Aug 2023

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
Allen v Queensland Building and Construction Commission [2020] QCAT 63
1 citation
Jump To
Cite 1 - [2020] QCAT 63
Kelly v Desnoe [1985] 2 Qd R 477
2 citations
Jump To
Cite 1 - [1985] 2 Qd R 477
Cite 2 - [1985] 2 Qd R 477
Schofield v QBCC & Anor [2019] QCAT 73
2 citations
Jump To
Cite 1 - [2019] QCAT 73
Cite 2 - [2019] QCAT 73
Shevill v Builders' Licensing Board (1982) 149 CLR 620
2 citations
Jump To
Cite 1 - (1982) 149 CLR 620
Cite 2 - (1982) 149 CLR 620
Stickney v Keeble (1915) AC 386
2 citations
Jump To
Cite 1 - (1915) AC 386
Cite 2 - (1915) AC 386
Visual Building Construction Pty Ltd v Amistead (No 2) [2019] NSWCA 280
1 citation
Jump To
Cite 1 - [2019] NSWCA 280

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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