Local Electrical Pty Ltd v Luppino
[2023] QCAT 34
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- Unreported Judgment
- Local Electrical Pty Ltd v Luppino[2023] QCAT 34
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Local Electrical Pty Ltd v Luppino[2023] QCAT 34
Local Electrical Pty Ltd v Luppino[2023] QCAT 34
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Local Electrical Pty Ltd v Luppino [2023] QCAT 34 |
PARTIES: | local electrical Pty Ltd (applicant) v Liam Luppino (first respondent) JOHN LUPPINO (second respondent) |
APPLICATION NO: | BDL139-22 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 31 January 2023 |
HEARING DATE: | 23 January 2023 |
HEARD AT: | Brisbane |
DECISION OF: | Member McVeigh |
ORDERS: |
|
CATCHWORDS: | CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – where applicant is an electrical contractor regulated under the Electrical Safety Act 2002 (Qld) – whether minor commercial dispute between an electrical contractor and a building owner is a ‘building dispute’ CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – whether applicant required to comply with s 77(2) Queensland Building and Construction Commission Act 1991 (Qld) – whether Queensland Civil and Administrative Tribunal has jurisdiction where the Queensland Building and Construction Commission has no Early Dispute Resolution Process for commercial disputes Electrical Safety Act 2002 (Qld), s 20, s 55(1)(a), s 56(1) Queensland Building and Construction Commission Act 1991 (Qld), s 75(1)(c), s 75(2), s 77(1), s 77(3)(c), s 77(3)(h), sch 2 Queensland Building and Construction Commission Regulation 2018 (Qld), s 54, sch 1, s 20 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 11, sch 3, s 1(a), s 2 Peter Broadbent Electrical Pty Ltd v Harrison [2022] QCATA 91 |
APPEARANCES & REPRESENTATION: | |
Applicant: | Self-represented |
Respondents: | Self-represented |
REASONS FOR DECISION
- [1]In 2018 the Luppinos leased premises in Queen Street Brisbane for use as a luxury hairdressing salon. As part of the leasing arrangements, the landlord contributed approximately $220,000 towards the fitout. The fitout was designed by an architect. It called for electrical work. The Luppinos received a quote of $57,678.77 for the electrical work.[1] However the contractor could not start until two weeks later than the date the Luppinos wanted the work to commence. Mr John Luppino contacted Mr Chris Tweedie, the principal of Local Electrical Pty Ltd, an electrical contractor with which he had done business in the past. In order to help out, Mr Tweedie agreed to take on the work.
- [2]The work was done in the period 18 September 2018 to 2 November 2018. The applicant issued three invoices for that work totalling $42,494.90. The applicant claims that $19,091.50 is outstanding. It also claims interest on the outstanding money.
- [3]The Luppinos defend the claim on the bases that the work was not done on time, was not up to the required standard, that the applicant should pay for the cost of repairing damage to other work caused by its employees and for costs incurred to rectify defective works.
Jurisdiction
- [4]This is a minor commercial building dispute. In Peter Broadbent Electrical Pty Ltd v Harrison[2] SM Brown navigated his way through what he fairly described as the ‘labyrinthine provisions’ of the Queensland Building and Construction Commission Act 1991 (QBCC Act), the Queensland Building and Construction Commission Regulation 2018 and the Electrical Safety Act 2002 (ESA) to conclude:
- As can be seen from the foregoing analysis, despite the fact that electrical contractors and electricians are not subject to the regulatory provisions of the QBCC Act on the basis that the work performed by such persons is electrical work under the ESA, a dispute involving an electrical contractor or electrician is nevertheless a building dispute.[3]
- [5]I agree with his reasoning. I am satisfied that the tribunal has jurisdiction to hear this dispute.
- [6]I am satisfied that the applicant need not meet the procedural hurdle imposed by section 77 of the QBCC Act. Section 77 mandates that before filing its claim every applicant must comply with a process established by the Queensland Building and Construction Commission (QBCC) to attempt to resolve the dispute. The QBCC does not have a dispute resolution process for commercial disputes. As this is a minor commercial building dispute the applicant is not prevented from making the application by the operation of section 77 of the QBCC Act.
The contract
- [7]It is common ground that the parties met on site to discuss the scope of work. They had the architectural plans in front of them.[4] Mr John Luppino’s primary concern was that Mr Tweedie would be available to start immediately. Mr Liam Luppinos’ primary concern was that the work be done in accordance with the architectural plans. He wanted the salon to be perfect and saw the lighting as highly important to achieve the desired result.
- [8]Mr Tweedie did not give a quote that day, just an hourly rate. He suggested that he could source material that would be as good as that specified which would be more cost effective.
- [9]The parties did not record the terms of their contract in writing. Mr Tweedie described the contract as a ‘do and charge’ agreement. Mr John Luppino described it as a ‘day to day’ agreement, which he said meant the same as a do and charge arrangement.
- [10]I find that the parties made an oral contract and that the terms of that contract were that:
- (a)the applicant would do the electrical work to fit out the salon for the agreed hourly rate;
- (b)the applicant would use materials specified, or alternate material of similar quality if approved by the respondents;
- (c)the applicant would commence work immediately;
- (d)the respondents would pay the applicant for the work done on a do and charge basis.
- (a)
The first invoice
- [11]The applicant issued invoice 4702 on 27 September 2018.[5] It was for $3,403.40 and dated 26 September 2018. It described the work done on 18, 19, 21, 22, 24 and 25 September 2018 and included claims for materials supplied.
- [12]While there was a suggestion in the material filed before the hearing that the invoice had been misdirected and may have gone to the wrong entity, at the hearing the respondents conceded that they had received the invoice. The applicant’s terms of trade were issued with the invoice.
- [13]Mr Tweedie’s evidence was that when he pressed for payment of the invoice he was told that it had been paid. He said that he did a quick check of the bank account and he thought the account had been paid. During the course of these proceedings, having checked the bank account more thoroughly, he discovered that the respondents had not deposited the money into the account. Mr John Luppino’s evidence was that he gave Mr Tweedie $3,000 in cash in payment of the invoice. Mr Tweedie denies receiving cash. I need not resolve that conflict in that evidence as the applicant does not press for payment of invoice 4702 in these proceedings.
The second invoice
- [14]Attention to detail in issuing invoices is not Mr Tweedie’s strength. On 27 October 2018 he issued a second invoice. It was also numbered 4702 and dated 26 September 2018. It was for $25,012.60.[6] It described the work done on 7, 8, 10, 15, 16, 17, 19, 22, 23, 24, 25 and 26 October 2018 and included claims for materials supplied.
The third invoice
- [15]On 6 November 2018 the third invoice was issued. It was numbered 4758 and but still dated 26 September 2018. It was for $14,078.90.[7] It described the work done on 29, 30 and 31 October 2018 and 1 and 2 November 2018 and included claims for materials supplied.
Part payment
- [16]The respondents paid the applicant $20,000 on 14 November 2018.
Complaints
- [17]Mr Tweedie’s evidence was that during the course of the work he pressed for payment on a daily basis but was told that payment would not be made until the job was finished. He acknowledged that complaints were made about the progress (or lack thereof) of the work but said that no complaint was made about the work itself.
- [18]Mr Tweedie provided a typed version of what he said was the content of a series of text messages he received from Mr John Luppino.[8] Unfortunately that version did not include the date of each text message. Mr John Luppino accepted that the typed version accurately set out the words he wrote.
- [19]The first complaint in the text chain was about too much rubbish in the salon, lights only half working and the applicant’s employee leaving the site. The second was about Mr Tweedie not being in site. The third was a list of things that needed to be done to finish off the work. One of those complaints was about the positioning of the lights at the front of the salon. Mr Tweedie said that all of those complaints were in respect of work that hadn’t been finished at the time the complaint was raised, but that all the work that needed to be done to finish the job was done and described in the invoices. I accept his evidence which is supported by the contemporaneous documents. The third invoice includes a claim for repositioning the lights at the front of the salon on 1 November 2018 which was a concern raised in the third text message.
- [20]It is common ground that during the course of the fitout one of the custom-made benchtops was damaged. When Mr Tweedie was told that it was one of his employees who did the damage, he asked for evidence of the cost of the replacement benchtop so he could make a claim against the applicant’s insurance. Mr John Luppino declined to provide the evidence, instead advising that ‘we are not going to do insurance claim, we are taking off $10,000 for incompetence poor workmanship, and stress u (sic) gave us…’.[9]
- [21]The respondents claim an offset of $1,568.60, which was an amount invoiced by Sparke Power Pty Ltd for work described as ‘emergency out of hours work required to complete setup of the venue’.[10] The invoice related to hanging chandeliers and track lighting over the bar and repair of strip lighting around a mirror. The invoice was dated 6 November 2018. Mr John Luppino said he paid cash so has no record of the payment.
- [22]Mr Tweedie said that if he had been told that there was a need to repair the strip lighting he would have returned to the job and fixed the problem. He speculated that the fault may have been a faulty clip which would have been replaced under warranty.
- [23]The respondents rely on an email from Matthew Weller dated 25 October 2021 which describes a number of visits he made to the salon and repairs he made to the electrical work.[11] He did not attend the hearing. Mr Tweedie addressed each issue in turn, pointing out that the email was sent three years after the applicant had finished its work. I accept Mr Tweedie’s evidence that:
- (a)had he been told that clips to the LED lights were faulty he would have replaced them under warranty;
- (b)he used the appropriate cable to the switchboard;
- (c)the salon was wired to manage the load he had been advised would be imposed; he cannot be responsible if the respondents plugged more appliances into the points than advised;
- (d)the cables to the switchboard were installed in accordance with relevant Australian Standards.
- (a)
- [24]I also accept Mr Tweedie’s evidence that it is unlikely that the aluminium extrusion holding the LED lights over the basin area failed shortly after the salon opened as alleged. If that had happened it seems unlikely, given Mr John Luppino’s propensity to send vitriolic text messages, that he would not have mentioned it in the text exchange that preceded the meeting scheduled for 19 November 2018.
- [25]After proceedings were commenced a complaint was made about damage to the floor. The basis of the complaint is that the applicant’s employees did not chase a deep enough channel in the concrete floor with the consequence that the conduit placed in the channel sat too high. The consequence of that, according to the respondents, is that the floor in that area is not level. However, because there would be no way of addressing the issue without damaging the expensive epoxy finish covering the whole floor the respondents decided they would ‘live with it’. I need not resolve the conflicts in the evidence about this matter as even if there was a defect in the work the respondents have not suffered any loss because of it.
Termination of the contract
- [26]The track lighting came with 5 watt bulbs, but could be upgraded to 10 watt bulbs. Mr John Luppino told Mr Tweedie that they would try the 5 watt bulbs first and then consider making the change after the salon had been operating for a short time.
- [27]Mr Tweedie made arrangements to meet Mr John Luppino at the salon to trial the 10 watt bulbs on 19 November 2018. At 5:47pm on 19 November 2018 Mr John Luppino sent a text to Mr Tweedie saying ‘mate don’t bother coming back’.[12]
- [28]I find that this conduct amounted to repudiation of the contract.
What amount does the respondents owe the applicant?
- [29]I note that in his text message sent on 19 November 2018 Mr John Luppino did not deny that any further amount was owing above the $20,000 that had been paid. To the contrary, he indicated that it was his view that $10,000 should be deducted from what was then owing, i.e., the balance of the second invoice and all the third invoice. At that time the applicant claimed to be owed $19,091.50. Effectively Mr John Luppino offered to split the difference. However, no payment was made.
- [30]I am satisfied that the respondents owe the applicant $19,091.50. The applicant’s claim to be paid for the work done at hourly rate is supported by contemporaneous evidence describing the work done in the invoices. The materials supplied is also described. There is no contemporaneous evidence that the respondents challenged any of the claims for work done at hourly rate as described in the invoices or that materials invoiced had been supplied.
Are the respondents entitled to make any deductions?
- [31]The respondents have the onus of establishing that they are entitled to make deductions from the amount owing due to the complaints they have raised.
- [32]The respondents were twice ordered to file all the evidence on which they wished to rely at the hearing.[13] They did not file any statements from the applicant’s employees despite Mr John Luppino submitting that their evidence would support his argument regarding poor workmanship. Nor did they file any documentary evidence that they had paid anyone to repair alleged defects.
- [33]As to the complaint that the materials supplied and installed were of lesser quality than the material listed in the finishes schedule,[14] while Mr John Luppino accused the applicant of using products suitable for domestic, not commercial work, he freely conceded that such matters were too technical for him. The only evidence the respondents relied on from a qualified person came from Mr Weller. Mr Weller did not say that the material used was only suitable for domestic work. As stated above I prefer Mr Tweedie’s evidence regarding workmanship.
- [34]Although Mr John Luppino made complaints about the delay in completing the work during the course of the work, which he said delayed the opening, there was no evidence that it had been agreed that the work would be finished by a particular date. Nor was there any evidence about when the salon was planned to be opened or when it was actually opened. Mr John Luppino claims to have lost two weeks profit due to the delay. There was no evidence of the profit that is made at the salon, either during its first weeks of operation or at any time since. Even if I had been given such evidence, I would have had some doubt as to its accuracy given Mr John Luppino’s frank concession regarding his propensity to operate a cash business.
- [35]Before paying another contractor cash to effect ‘repairs’ the respondents should have given the applicant to opportunity to rectify. They elected not to do so. I also note that there is a time limit on the applicant’s obligation to repair items. The respondents had no evidence of the date when repairs were made. Given the time that has elapsed I suspect that some alleged repairs might more accurately be described as maintenance or changes to meet operational requirements.
- [36]I am not satisfied that the Luppinos have discharged the onus of proving their claims that the work was not done on time, was not up to the required standard, that the applicant should pay for the cost of repairing damage to other work caused by its employees and for costs incurred to rectify defective works. Accordingly I find that they are not entitled to make any deduction from the amount owing.
Interest
- [37]Section 77(3)(c) of the QBCC Act gives the tribunal power to:
award damages, and interest on the damages at the rate, and calculated in the way, prescribed under a regulation.
- [38]Section 54 of the Queensland Building and Construction Regulation 2018 (Qld) (QBCC Regulation) provides:
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.
- [39]There is no contractual rate for interest provided in the oral contract. The parties have not agreed a rate of interest. Therefore, the applicant is entitled to interest at the rate of 10%.
- [40]The oral contract did not contain a term about when payment was to be made. The applicant cannot unilaterally impose a payment period of COD by stating that on the invoices issued after the contract was formed.
- [41]I find that payment should have been made within a reasonable time. Section 67W of the QBCC Act contemplates that progress payments in commercial building contracts will be made no later than 14 business days after submission of a payment claim. I find that 14 business days after submission of a payment claim is a reasonable period in which the claim should have been paid.
- [42]I find that interest is payable from 26 November 2018, the date that is 14 business days after 6 November 2018, the date the third invoice was issued, at the rate of 10%.
Costs
- [43]As the applicant has been entirely successful in its claim it is entitled to recover the filing fee of $352.[15]
Orders
- [44]The respondents must pay the applicant $19,091.50.
- [45]The respondents must pay the applicant interest at the rate of 10% on $19,091.50 from 26 November 2018 to the date the payment is made.
- [46]The respondents must pay the applicant $352 costs.
Footnotes
[1] Exhibit 3 p 77.
[2] [2022] QCATA 91.
[3] At [35].
[4] Exhibit 3, pages 10 – 57.
[5] Exhibit 1, page 11.
[6] Exhibit 1, page 18-19.
[7] Exhibit 1, page 21.
[8] Exhibit 1, page 13.
[9] Exhibit 1, page 15.
[10] Exhibit 3, page 89.
[11] Exhibit 3, page 87.
[12] Exhibit 1, page 16.
[13] See orders dated 8 June 2022 and 19 September 2022.
[14] Exhibit 3, page 13.
[15] Section 77(3)(h) Queensland Building and Construction Commission Act 1991 (Qld).