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Yeo v Queensland Building and Construction Commission[2023] QCAT 367

Yeo v Queensland Building and Construction Commission[2023] QCAT 367

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Yeo & Anor v Queensland Building and Construction Commission & Anor [2023] QCAT 367

PARTIES:

daxter yeo

helen shuk yee ng

(applicants)

v

queensland building and construction commission

(first respondent)

DE MARCO CONSTRUCTIONS PTY LTD

(second respondent)

APPLICATION NO/S:

GAR277-18

MATTER TYPE:

General administrative review matters

DELIVERED ON:

11 September 2023

HEARING DATE:

15 February 2021

16 February 2021

HEARD AT:

Brisbane

DECISION OF:

Member Deane

ORDERS:

  1. The decision of the Queensland Building and Construction Commission dated 16 July 2018 that the claim under the Queensland Home Warranty Scheme is disallowed is set aside.
  2. It is declared that the contract was properly terminated at the default of De Marco Constructions Pty Ltd.
  3. The matter is returned to the Queensland Building and Construction Commission for reconsideration with a direction that Daxter Yeo and Helen Shuk Yee Ng had properly terminated the building contract at the default of De Marco Constructions Pty Ltd.
  4. De Marco Constructions Pty Ltd is to pay Daxter Yeo and Helen Shuk Yee Ng costs fixed in the amount of $6,930 (incl GST) by 4:00pm on 13 October 2023.
  5. Any Application for other costs of the proceedings by a party is to be made by filing in the Tribunal two (2) copies and providing to the other parties one (1) copy of any submissions and evidence in support of the Application for costs by 4:00pm on 13 October 2023.
  1. If any such Application for other costs is made:
    1. the other parties must file in the Tribunal two (2) copies and provide one (1) copy of any submissions and evidence in response to the party making the Application for costs and the other party by 4:00pm on 10 November 2023;
    2. the party making the Application for costs must file in the Tribunal two (2) copies and provide one (1) copy of any submissions and evidence in reply to the other parties by 4:00pm on 24 November 2023;
    3. the Application for costs will be determined on the papers based on any documents filed unless a party requests an oral hearing not before 4:00 pm on 24 November 2023.
  1. If no Application for costs is made in accordance with Order 5 then there shall be no order as to other costs.

CATCHWORDS:

PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – review of decision disallowing a claim under the statutory insurance scheme – whether contract properly terminated upon the contractor’s default – whether termination invalid – whether the homeowners were in substantial breach at the time they purported to terminate – whether contractor unreasonably failed to perform the works diligently or unreasonably delayed or failed to maintain reasonable progress – whether contractor failed to carry out the work competently – whether contractor’s breaches were substantial breaches – whether contractor repudiated the contract

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INTERLOCUTORY PROCEEDINGS – GENERALLY – whether homeowners entitled to costs thrown away in relation to experts’ conclave where contractor’s expert no longer retained 

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 6, s 17, s 18, s 20, s 24, s 48, s 100, s 102, s 107

Queensland Building and Construction Commission Act 1991 (Qld), s 3, s 77, s 86, s 86E, s 87, Schedule 1B s 40, s 42

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

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337

Cowen & Anor v Queensland Building and Construction Commission & Anor [2017] QCAT 416

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978)138 CLR 423

Farrell Builders Pty Ltd & Anor v Hall & Anor [2018] QCAT 420

Foran v Wright (1989) 168 CLR 385

Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303

Howard v Pickford Tool Co Ltd [1951] 1 KB 417

Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58

Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115

Laidlaw v Queensland Building Services Authority [2010] QCAT 70

Maynard v Goode (1926) 37 CLR 529

Mazelous Pty Ltd v Herberton Shire Council [2003] 1 Qd R 174

Mousa & Anor v Vukabratich Enterprises Pty Ltd & Anor [2019] QSC 49

Roadshow Entertainment Pty Ltd v ACN 053006269 Pty Ltd Receiver & Manager Appointed (formerly CEL Home Video Pty Ltd) (1997) 42 NSWLR 462

Shepherd v Felt and Textiles of Australia (1931) 45 CLR 359

Shevill v Builders Licensing Board (1982) 149 CLR 620

Stojanovski v Australian Dream Homes [2015] VSC 404

Thunder Corp Pty Ltd v Queensland Building Services Authority [2011] QCAT 56

APPEARANCES & REPRESENTATION:

Applicants:

S Taylor instructed by Carter Newell Lawyers

First Respondent:

R Ensby, Gadens Lawyers

Second Respondent:

WDJ Macintosh instructed by Crouch & Lyndon

Table of Contents

Background5

Reviewable Decision and Review Jurisdiction5

Policy Conditions7

Witnesses8

Contract9

Notices to Remedy Breach12

Homeowners’ Notice to Remedy Breach dated 22 September 2017(the September Notice)12

Contractor’s Notice to Remedy Breach dated 29 November 201713

Homeowners’ Notice to Remedy Breach dated 29 November 2017 (November Notice)14

Homeowners’ Notice to Remedy Breach dated 19 December 2017 (December Notice)15

Did the Homeowners properly terminate the Contract lawfully under the contract or otherwise at law, upon the contractor’s default?16

Was the termination invalid because the Homeowners were in substantial breach for failing to pay amounts due and owing?17

Was the Contractor in breach of the Contract?  Was the breach a substantial breach?  Was the substantial breach not remedied by 8 January 2018 entitling termination?21

Was the Contractor in breach of its obligations by unreasonably failing to perform the works diligently or unreasonably delaying or failing to maintain reasonable progress as of 19 December 2017? Was any such breach a substantial breach?21

Suspension and the Christmas shutdown22

Failure to complete the works by the date for practical completion and the works being significantly delayed23

Staircase and Water ingress25

Variations28

Cashflow issues29

Suspension of the works30

Curtainwall30

Were the works unreasonably delayed?33

Was the Contractor in breach of its obligations by failing to carry out work under the Contract competently as of 19 December 2017? Was any such breach a substantial breach?34

Failing to construct the Curtainwall in accordance with approved plans34

Claiming non-compliant Variations and extensions of time (EOTs)35

Unreasonably failing to replace defective work or materials36

Failing to hold the current, active and appropriate licence to perform the works under the Contract38

Failing to comply with continuous indemnity provided by clause 11.1 of the Special Conditions of Contract39

Summary39

Repudiation39

Payment demand and suspension of the works41

What orders are appropriate?42

Application for miscellaneous matters filed 2 April 202043

Other Costs45

REASONS FOR DECISION

Background

  1. [1]
    Daxter Yeo and Helen Shuk Yee Ng (the Homeowners) contracted with De Marco Constructions Pty Ltd, then a licensed contractor (the Contractor), to finish building a new home for them following a previous contractor being placed in liquidation in December 2015 and that contract being terminated in January 2016. 
  2. [2]
    The Homeowners had received development approval from the Brisbane City Council (the Council) to build their home subject to conditions on 11 January 2013 (the DA).
  3. [3]
    Unsurprisingly, the Contractor identified prior to contracting that it was likely that it would need to undertake rectification work of the previous contractor’s work.[1] Subsequent to negotiating the terms, the Homeowners and the Contractor signed a contract dated 24 May 2016 (the Contract).[2]  There was no dispute that a complete copy of the Contract was in evidence before me.[3]
  4. [4]
    Disputes arose and the Homeowners purported to terminate the Contract on 8 January 2018 both under the Contract and by reason that they claim the Contractor repudiated the Contract.[4]

Reviewable Decision and Review Jurisdiction

  1. [5]
    The Homeowners made a non-completion claim to the Queensland Building and Construction Commission (QBCC).
  2. [6]
    The QBCC disallowed a claim under the Queensland Home Warranty Scheme also known as the statutory insurance scheme (the SIS) on the grounds that the Homeowners had not properly terminated the Contract for the default of the Contractor.
  3. [7]
    The Homeowners sought internal review of that decision.  On internal review the QBCC confirmed that the Contract had not been properly terminated at the default of the Contractor and therefore decided to disallow the Homeowners’ claim under the SIS (the Decision).[5]  The Homeowners applied to review the Decision.[6]  The QBCC filed a statement of reasons for the Decision and thousands of pages of documents, most of which were not referred to by any witnesses in these proceedings.
  4. [8]
    Following the oral hearing, after some delay, quite lengthy written submissions were filed.[7]  The delay in finalising this application since the submissions were filed is extremely regrettable and relates, at least in part, to resourcing issues. 
  5. [9]
    Section 17 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) provides:

The Tribunal’s review jurisdiction is the jurisdiction conferred on the tribunal by an enabling Act to review a decision made or taken to have been made by another entity under that Act.

  1. [10]
    Section 18 of the QCAT Act provides:

The Tribunal may exercise its review jurisdiction if a person has, under this Act, applied to the tribunal to exercise its review jurisdiction for a reviewable decision.

  1. [11]
    The relevant enabling Act is the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).[8]For the purposes of internal review, a decision to disallow a claim under the SIS wholly or in part is a reviewable decision.[9] For the purposes of an external review, ‘reviewable decision’ means a reviewable decision as listed in section 86 of the QBCC Act other than a decision that was the subject of an internal review or an internal review decision.[10]
  2. [12]
    I am satisfied the Decision is a reviewable decision.
  3. [13]
    A person affected by a reviewable decision of the QBCC may apply to the Tribunal for a review of the decision.[11]
  4. [14]
    On a review, the Tribunal has power to confirm or amend the decision, set aside the decision and substitute its own or set aside the decision and return it for reconsideration.[12] The Tribunal’s function is to reach the correct and preferable decision after a fresh hearing on the merits.[13] The Tribunal must decide the review in accordance with the QCAT Act and the enabling Act under which the decision was made. There is no presumption that the decision under review is correct.[14]
  5. [15]
    These proceedings focussed on the issue of whether the Homeowners properly terminated the Contract in accordance with the relevant policy of the SIS.[15] 
  6. [16]
    This is not a domestic building dispute proceeding where the Tribunal is empowered to make findings about a broad range of matters including amounts owing as between the Homeowners and the Contractor under the Contract or otherwise at law.[16]
  7. [17]
    The objects of the QBCC Act include to, amongst other things, achieve a reasonable balance between the interests of building contractors and consumers and to provide remedies for defective building work.[17]
  8. [18]
    The Tribunal has recognised that an applicant in review proceedings has no formal onus of proof but has an evidential or practical onus to adduce evidence which supports its case as the Tribunal must make its decision on the material before it. As stated in Laidlaw v Queensland Building Services Authority[18]

In the absence of appropriate evidence the tribunal will not be free to make the decision sought by the party. This has sometimes been described as an evidentiary burden, but there is no formal onus of proof. The question is whether the Tribunal is satisfied that the provision under consideration can be invoked on the information or material before it.

Policy Conditions

  1. [19]
    In these proceedings there was no dispute that the relevant terms of the SIS policy are set out in the Policy Conditions effective 1 July 2009, known as Edition 8 (the Policy).[19]
  2. [20]
    Clause 1.1 of the Policy provides:

Subject to the terms of this policy, the QBCC agrees to pay for loss suffered by the Insured in the event of the contractor failing to complete the contract for the residential construction work.

  1. [21]
    Clause 1.2 of the Policy provides in relation to payment for non-completion that:

The QBCC is only liable to pay for loss under this Part when the contract is for a fixed price and the Insured has properly terminated the contract with the contractor.[20]

  1. [22]
    Clause 11.1 of the Policy sets out definitions of certain terms used in the Policy, most relevantly:

“contract” means a contract for the performance of the residential construction work referred to in the certificate of insurance or, where there is no certificate of insurance issued, a contract for the performance of residential construction work which is afforded the benefits of the policy by virtue of the QBCC Act

“contractor” relevantly means (i) the licensed contractor referred to in the certificate; or (ii) where there is no certificate, a contractor who holds a licence which appears to signify that the contractor may enter into contracts with consumers to carry out residential construction work covered by the statutory insurance scheme, who enters into a contract with a consumer to carry out residential construction work or otherwise carries out residential construction work other than as a subcontractor

“fixed price” means a price which is certain, except for the effect of provisional costs or sums, prime costs or sums, variations and any costs escalation clause.

“insured” relevantly means the owner of the land or a consumer who has entered into a contract with the contractor to have residential construction work carried out in Queensland

“properly terminated”[21] means lawfully under the contract or otherwise at law, upon the contractor’s default which extends to, but is not limited to:

  1. (a)
    the cancellation or suspension of the contractor’s licence; or
  2. (b)
    the death or legal incapacity of the contractor; or
  3. (c)
    the insolvency of the contractor; or
  4. (d)
    any breach of the contract by the contractor.

“residential construction work” relevantly means residential construction work as defined in section 10 of the Regulation.

  1. [23]
    In these proceedings there was no dispute that the Contract was for a fixed price, that the Homeowners were the insured under the Policy, that the Contractor was a contractor and that the Contract was for residential construction work.
  2. [24]
    The Homeowners rely upon sub-clause (d) of the definition of “properly terminated”.

Witnesses

  1. [25]
    In this matter three witnesses gave evidence at the hearing.  Dr Ng and Mr Burgess for the Homeowners and Mr De Marco for the Contractor.
  2. [26]
    Mr De Marco's oral evidence was often contradictory with variously his written statement, contemporaneous documents including the Contract and other oral evidence he gave during the hearing. Generally, where there is a conflict, I prefer the evidence of Dr Ng, which was much more consistent with contemporaneous documents.  
  3. [27]
    The Contractor says that Mr Burgess’ opinion as to the value of work performed by the Contractor should be disregarded and its valuation of work performed should be accepted on the basis that Mr Burgess was not independent.  I accept that Mr Burgess, a quantity surveyor, retained by the Homeowners during the Contract to assess progress claims on their behalf is not a truly independent expert witness in these proceedings.  At the hearing no party relied upon evidence by a truly independent expert witness. Whilst Mr De Marco, who gave evidence of his 30 years of experience in the industry, has relevant experience, he is clearly not independent, being a director of the Contractor.  I take this into account in weighing the evidence.  Generally, where there is a conflict, I prefer the evidence of Mr Burgess given Mr De Marco’s oral evidence was often contradictory to other evidence as referred to at [26].  Mr Burgess’ evidence was much more consistent with contemporaneous documents.

Contract

  1. [28]
    The evidence is that the Homeowners and the Contractor negotiated the terms of the Contract between March and May 2016. The written terms and conditions of the contract are contained in numerous documents including a formal instrument of agreement, special conditions, general terms and conditions, addendum documents prepared by the Contractor and drawings.[22] 
  2. [29]
    This was a significant contract with a price more than $3,700,000, including provisional and prime sums in the amount of $652,500 (excl GST).  The formal instrument of agreement described the works as ‘the Works and the work under this Contract comprise the construction of a premium quality new residential dwelling for occupation as per plans and specifications attached hereto and associated works as more particularly described in or reasonable to be inferred from the Contract documents’.[23] Item 3 of the Schedule described the works as ‘construction of a premium quality new residential dwelling for occupation as per plans and specifications attached hereto.’
  3. [30]
    The Contractor claimed that Dr Ng was the superintendent under the Contract.  The Contractor’s proposed condition, which provided for a superintendent was agreed to be deleted in the signed Contract.[24] The Contractor’s position set out in the 22 May 2016 Emails that Dr Ng should take on the role, despite the Homeowners stating there should be no superintendent, was clearly rejected by the Homeowners and agreed to by the Contractor.  Mr De Marco’s insistence that Dr Ng was the superintendent is contrary to the clear terms of the Contract and the agreed intentions of the parties. 
  4. [31]
    Dr Ng took a keen interest in the execution of the work under the Contract, which in my view was consistent with that of a homeowner, and particularly one who had had an unfortunate experience with a previous builder, and who was seeking to ensure that works progressed in accordance with the terms of the Contract for construction of a premium quality new residential dwelling. There is no evidence before me that Dr Ng held any relevant qualifications or experience to undertake the role of superintendent. This position is also consistent with the express acknowledgement by the Contractor in the second set of special conditions that the Homeowners were relying on the Contractor’s advice, skill and judgement in the execution of the work under the contract.[25]
  5. [32]
    The evidence is, and I accept, that Dr Ng, who was living nearby, attended site or drove past the site most days to see whether the Contractor’s staff or subcontractors were on site and therefore inform herself whether works were progressing to some extent.  Although Dr Ng on occasion referred to herself as the superintendent I am not satisfied this equates to undertaking the role of superintendent.[26]  The Contract provided for weekly meetings.[27]  Dr Ng’s attendance at these meetings and discussions about the works does not equate to undertaking the role of superintendent nor is there any evidence to support Mr De Marco’s evidence that it negated the Contractor’s obligations to comply with the terms of the Contract, which terms did not set out any rights or obligations of a superintendent. 
  6. [33]
    The Contractor essentially seeks to imply terms into the Contract.  I am not satisfied that it is necessary to give the Contract business efficacy to imply into the Contract a term that Dr Ng was superintendent and in any event the term is contrary to the terms expressly agreed by the parties.[28]
  7. [34]
    The Contract provided that the works were to commence on 23 May 2016, the construction period was 305 days[29] and practical completion was due 24 March 2017.  The Contractor did not expressly allow for likely delays for inclement weather or any other likely delays.  There is limited evidence as to how the 85 non-working days was calculated. 
  8. [35]
    The Contractor provided a draft works programme which showed various elements of the work being completed over a 45-week period. The Contract qualified the Contractor’s document 7, works programme by providing[30] that the Contractor shall not depart from the draft works programme without the prior written consent of the Homeowners.  The draft works programme highlighted three public holidays and identified a two-week Christmas break but indicated trades continuing during those two weeks.[31] A revised works programme dated 4 August 2016 is in evidence before me.[32] It indicates that excavation took 5 weeks longer than originally planned and that during the two-week Christmas break trades would not continue.  Mr De Marco gave evidence that the 45-week construction period was not to commence until after rock excavation had been completed.  The original draft programme clearly shows that excavation formed part of the 45-week programme.  Mr De Marco’s oral evidence was that the programme allowance related to other excavation work.  The Homeowners do not seek to dispute Mr De Marco’s evidence in this regard.  The evidence is that an extension of time to 20 July 2017 was granted.  This extension of time related at least in part to the excavation delay.  The Homeowners rely upon other delays by the Contractor in progressing the works to support termination of the Contract.
  9. [36]
    Clause 17.3 of the general conditions provided that 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.
  10. [37]
    Clause 26 of the general conditions, relevantly, provides:

26.1 If:

(a) a party is in substantial breach of this Contract; and

(b) the other party gives a notice to the party in breach identifying and describing the breach and stating the intention of the party giving notice to terminate the Contract if the breach is not remedied within 10 business days from the giving of the notice; and

(c) the breach is not remedied, then, the party giving that notice may terminate this Contract by further written notice given to the party in breach and may recover from the party in breach all damages, loss, cost or expense occasioned to the party so terminating by or in connection with the breach or that termination and may set off such claim against payment otherwise due by the party so terminating.

26.2 The right to terminate under this Condition is in addition to any other powers, rights or remedies the terminating party may have.

26.3 Substantial breach by the Owner includes, but is not limited to:

(a) [deleted by special condition]

(b) failing to pay any money due and owing to the Contractor for 5 business days; and

(c) substantially or persistently obstructing the Contractor in the performance of the work under this Contract.

26.4 Substantial breach by the Contractor includes, but is not limited to:

(a) failing to perform the work under this Contract competently;

(b) failing to provide materials which comply with this Contract;

(c) unreasonably failing to replace or remedy defective work or materials;

(d) unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress.

  1. [38]
    The Tribunal has previously found that on a strict interpretation of clause 26.1 of the general conditions, the notice period of 10 business days is mandatory and that a party does not act unreasonably in issuing a notice of default with such a notice period.[33] The learned Member considered any obligation to act reasonably would attach to the termination rather than the notice of default.[34]  
  2. [39]
    The second set of special conditions to the Contract set out various warranties as follows:[35]
    1. the Contractor warranted to the Homeowners that it had carefully examined all information relevant to the risks, contingencies and other circumstances which could affect the contract price.
    2. the Contractor warranted to the Homeowners that it had visited and carefully examined the site and its surroundings and fully informed itself as to all patent site conditions.
    3. the Contractor warranted to the Homeowners that it had satisfied itself as to the correctness and adequacy of the contract price for the performance of its obligations under the contract or otherwise at law.
    4. the Contractor warranted that it would supply and execute items not expressly mentioned in the Contract but which were necessary or reasonably inferred for the satisfactory completion and performance of the works.
    5. the Contractor warranted to the Homeowners that it had satisfied itself of its ability to comply with all legislative requirements.
    6. the Contractor acknowledged that the Homeowners were relying upon the contractor’s advice, skill and judgement in the execution of the work under the contract.

Notices to Remedy Breach

  1. [40]
    The Parties issued several notices.  The Homeowners contend that they rely upon each of the notices issued by them in terminating the Contract.

Homeowners’ Notice to Remedy Breach dated 22 September 2017(the September Notice)[36]

  1. [41]
    The September Notice contended that the Contractor was in substantial breach relying upon clause 3.1 and clause 26.4.
  2. [42]
    Clause 3.1 relevantly provides:

To the extent required by Schedule 1B of the QBCC Act the Contractor warrants that:

  1. the work under this Contract will be carried out in an appropriate and skilful way and with reasonable care and skill and reasonable diligence;
  2. ……
  3. ……
  4. the work under this Contract will be carried out in accordance with the plans and specifications and any other Contract documents described in Schedule item 15.
  1. [43]
    The Homeowners claimed that the Contractor had failed to carry out the works with reasonable diligence because of its failure:
    1. to adequately arrange trade contractors to ensure the timely completion of the works;
    2. to adequately maintain reasonable progress of the works;
    3. to adequately administer the Contract through the timely provision of notices; and
    4. to bring the works to practical completion by the date for practical completion.   It claimed that the Contractor was approximately 182 days behind schedule, which entitled the homeowners to $91,000 in liquidated damages.[37]
  2. [44]
    The Homeowners claimed that the Contractor had failed to construct the curtainwall in accordance with the approved plans.
  3. [45]
    The September Notice also claimed that the Contractor had unreasonably delayed the works by:
    1. requiring a letter from the Homeowners’ solicitor stating that it and its contractors are not responsible for future water entry along the eastern wall of Grid D at Garage Level above RL 34.05;
    2. requiring a letter from the Homeowners’ solicitor stating that the ground water at Mr Yeo's office area is not its responsibility;
    3. stating in its letter of 22 September 2017 that no work will start on the staircases until it receives a written letter from the Homeowners’ solicitor stating that the water entry is not its liability now or into the future, in circumstances where there was no term in the Contract conferring these entitlements nor any entitlement at law.
  1. [46]
    The Homeowners also claimed that the Contractor had failed to appropriately administer the terms of the Contract in breach of its statutory obligations under the QBCC Act.[38]
  2. [47]
    The September Notice called upon the Contractor to remedy the substantial breach within 10 business days and reserved the Homeowners’ rights including their rights available outside of the Contract.  The Contractor responded by email on 24 September 2017 raising items for discussion.[39]  Dr Ng gave evidence that despite the September Notice the Contractor did little to address the issues.[40]
  3. [48]
    The Homeowners did not take steps to terminate the Contract immediately after the notice period expired.  The Homeowners’ former solicitors reserved the Homeowners’ rights in relation to the September Notice by letter dated 5 October 2017.[41]The QBCC submits, and I accept, that the Homeowners were required to terminate within a reasonable time of giving the September Notice otherwise they could not rely upon the claimed breaches in the September Notice to terminate the Contract without giving a further notice.

Contractor’s Notice to Remedy Breach dated 29 November 2017[42]

  1. [49]
    On 29 November 2017 the Contractor issued a Notice to Remedy Breach claiming that the Homeowners were in substantial breach by:
    1. persistently and unreasonably failing to make payment to the Contractor for progress claims issued for works undertaken in contravention of clause 19.1 of the contract specifically:
      1. progress claim 23 dated 15 September 2017;
      2. progress claim 24 dated 7 October 2017;
      3. progress claim 25 dated 28 October 2017; 
      4. progress claim 26 dated 17 November 2017;
      5. variation 1 in the sum of $128,792.95 for the curtainwall works;
      6. variation 2 in the sum of $27,157.72 for the change to the level 4 media room to a bedroom with walk-in robe and bathroom;
      7. variation 11 in the sum of $12,282.33 for the pelmets on level three and six including prime cost adjustments for electrical works;
      8. variation 12 in the sum of $25,037.35 for one sided walls to bottom 4 levels;
      9. variation 20 in the sum of $22,768.36 for the eastern block wall and redesign of the front entry stairs.
    2. Unreasonably interfering with the performance of the work in contravention of clause 13.4 of the Contract by attending site and attempting to give direct instruction to the Contractor’s subcontractors and employees in contravention of clause 16.1 of the Contract and attempting to entice the Contractor’s subcontractors to work directly.
    3. Unreasonably withholding or failing to approve extension of time (EOT) claims as follows:
      1. EOT claim 2 dated 28 January 2017;
      2. EOT claims 3-11 each dated 29 October 2017;
      3. EOT claims 12-16 each dated 30 October 2017.
  2. [50]
    On 29 November 2017 the Contractor issued a notice of suspension[43] based on continued non-payment of progress claims and variations issued in accordance with the Contract.  The notice stated that no work will be re-commenced at the property until the disputes about the payments have been resolved and payment has been received.
  3. [51]
    The Homeowners disputed the Contractor’s contentions that amounts claimed were payable and disputed the Contractor’s entitlement to suspend works for non-payment or any other basis.[44]
  4. [52]
    The Homeowners contend that the suspension was unlawful and a repudiation of the Contract.
  5. [53]
    The Contractor withdrew both of its notices by letter dated 12 December 2017.

Homeowners’ Notice to Remedy Breach dated 29 November 2017 (November Notice)[45]

  1. [54]
    The November Notice claimed that the Contractor was in substantial breach by stating in an email on 28 November 2017 that it would be stopping work until the balance of the purported outstanding funds totalling $545,610.21 is paid and by not attending site on 29 November 2017 to continue work under the Contract.[46] 
  2. [55]
    The Homeowners say, and I accept, that the Contract provides no right for the Contractor to delay, suspend or fail to maintain reasonable progress of the works under the Contract.
  3. [56]
    The November Notice stated that the Homeowners considered the Contractor's refusal to attend site constitutes substantial breach of clause 26.4(d) of the Contract being an unreasonable failure to perform the work under the Contract diligently or unreasonably delaying, suspending or failing to maintain reasonable progress of the works under the Contract and constitute repudiation of the Contract at common law.
  4. [57]
    The November Notice called upon the Contractor to remedy the substantial breach within 10 business days and the Homeowners reserved their rights including rights available outside of the Contract.
  5. [58]
    As stated earlier in these reasons, the Contractor withdrew both of its notices by letter dated 12 December 2017.  It advised that its contractors would recommence the next day and foreshadowed that the works would be progressed until 12pm 22 December 2017 when the site would be shut down for Christmas with works to recommence on 8 January 2018.[47] 
  6. [59]
    The Homeowners disputed that the Contractor was entitled to shut down the site until 8 January 2018.
  7. [60]
    On 12 December 2017 the Contractor also withdrew progress claim 27 and submitted progress claim 27A, which removed its claim for disputed variations.[48] 
  8. [61]
    The Contractor submits, and I accept, that the contractual validity and the quantum of the variations are not directly relevant to these proceedings because the Contractor has withdrawn its payment claims. The Contractor concedes that the variations were not undertaken in accordance with the terms of the Contract nor in accordance with Schedule 1B of the QBCC Act.[49]
  9. [62]
    The Homeowners did not take steps to terminate the Contract immediately after the notice period expired.  The QBCC submits, and I accept, that the Homeowners were required to terminate within a reasonable time of giving the November Notice otherwise they could not rely upon the claimed breaches in the November Notice without giving a further notice.  In any event, given the Contractor’s withdrawal of its notices and the submission of Progress Claim 27A, the Contractor had at least in part remedied the claimed breaches. 

Homeowners’ Notice to Remedy Breach dated 19 December 2017 (December Notice)[50]

  1. [63]
    The Homeowners claimed the Contractor was in substantial breach by:
    1. unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress;
    2. failing to carry out work under this Contract competently:
      1. failing to construct the curtainwall in accordance with the approved plans;
      2. claiming non-compliant variations;
      3. claiming non-compliant extensions of time;
    3. unreasonably failing to replace defective work or materials;
    4. failing to hold the current, active and appropriate licence to perform the works under the Contract;
    5. failing to comply with continuous indemnity provided by clause 11.1 of the Special Conditions of Contract.
  2. [64]
    The Homeowners purported to terminate the Contract on 8 January 2018 both on the basis they say the substantial breaches in the December Notice had not been remedied and as an acceptance of the Contractor’s repudiation at common law.[51] 
  3. [65]
    The Homeowners relied upon the Contractor’s breach of clause 26.1(c) of the Contract in that they say the Contractor had:
    1. unreasonably failed to perform the work diligently and/or unreasonably delayed, suspended and/or failed to maintain reasonable progress;
    2. failed to carry out work competently;
    3. failed to withdraw demands for money owing in respect of the curtain wall;
    4. failed to demolish and dispose of the curtain wall structure that is not required by the plans that received approval of the Planning & Environment (P&E) Court;
    5. failed to rectify defective swimming pool works;
    6. failed to comply with the indemnity for legal costs in special condition clause 11.1.
  4. [66]
    Later that day the Contractor contended that the Homeowners’ termination was a repudiation of the Contract and purported to accept the repudiation and terminate the Contract.[52]

Did the Homeowners properly terminate the Contract lawfully under the contract or otherwise at law, upon the contractor’s default?

  1. [67]
    I find that the Homeowners properly terminated the Contract lawfully under the Contract or otherwise at law upon the Contractor’s default for the reasons set out below.
  2. [68]
    The Contractor says that the Homeowners did not properly terminate the Contract because:
    1. The Homeowners were in breach for failing to pay the Contractor amounts due and owing; and
    2. the Contractor was not in breach of any term of the Contract which entitled the Homeowners to terminate.

Was the termination invalid because the Homeowners were in substantial breachfor failing to pay amounts due and owing?

  1. [69]
    I find that the Homeowners were not in substantial breach of their obligation to pay amounts due and owing at the time the December Notice was given nor as of 8 January 2018, the time they gave the notice of termination.  I therefore find that the termination was not invalid on that basis.
  2. [70]
    The parties did not adopt the usual staged milestone progress claim methodology.  Item 8B of the Schedule stated, ‘refer Document 5’.  Document 5 set out a ‘typical projected cash flow and the respective payment dates’.  The Contract provided that nothing in document 5 ‘shall entitle the Contractor to extensions of time to the date for Practical Completion, delay costs or for any other adjustment to the Contract Price. Further, nothing in this document shall entitle the Contractor for payment for work that has not been performed. It is an estimate only.’   In my view this demonstrates a clear intention by the parties that the Contractor’s entitlement to progress payments was conditional on actual performance of the work rather than a proportionate amount based simply on effluxion of time irrespective of work performed.
  3. [71]
    The Contract at CSC1, provided ‘progress claims presented every 21 days, paid within seven days of presentation’.[53]  Although the parties discussed the Homeowners’ intentions to engage a quantity surveyor to assess the progress claims before the Contract was signed, the Contract did not formalise such a process.[54]
  4. [72]
    The replacement of standard items 8A and 8B of the schedule with the 21-day payment claim system is significantly less precise than had the standard terms been adopted. 
  5. [73]
    The ‘new schedule 8B’ sits uncomfortably with the detailed procedures for making claims and raising and resolving disputes set out in clause 19 of the general conditions.  The process does not, as clause 19.1(b) of the general conditions states, require the Contractor to establish that any ‘stages’ have been completed in the usual sense of the clause.
  6. [74]
    Although the precise rights and obligations of the parties in relation to submitting progress claims and their assessment were not clear in the Contract, Mr De Marco did not dispute that it was agreed when the Homeowners engaged a quantity surveyor to assist to assess each progress claim that the methodology was that the Contractor would submit progress claims approximately 3 weekly setting out the value of work performed by trade for work claimed to be performed since the last progress claim. The progress claim would be assessed by the quantity surveyor based on the percentage value of work performed and that amount was payable by the Homeowners. 
  7. [75]
    Mr De Marco conceded that this agreed process was carried out from progress claim 4 onwards.  The first progress claim was for the deposit as agreed in item 2 of the Schedule of the Contract so that only two claims for work performed were made before Mr Burgess took on the role of assessing each further progress claim.
  8. [76]
    Until progress claim 27A neither party sought to invoke the dispute resolution process set out in clause 19 of the general conditions in relation to progress claims.
  9. [77]
    The Contractor contends that the Homeowners were not entitled to terminate on 8 January 2018 as they were in substantial breach of the Contract for failing to pay progress claim 27A.  It says the amount claimed in progress claim 27A was due and owing:
    1. as the Homeowners failed to dispute progress claim 27A within the time allowed; 
    2. as the amount claimed in progress claim 27A was validly due and owing.
  10. [78]
    It was not disputed that the Homeowners essentially disputed progress claim 27A on 20 December 2017 and that on a strict interpretation of clause 19 of the general conditions it called for a dispute notice no later than 19 December 2017.

What is the consequence of the Homeowners failing to dispute progress claim 27A within the time allowed?

  1. [79]
    I am not satisfied that the Contractor is entitled to require strict compliance with clause 19 of the general conditions.
  2. [80]
    The Contractor says that the Homeowners were required to dispute the claim delivered on 12 December 2017 by 19 December 2017, but the notice arrived on 20 December 2017[55] such that the amount claimed was essentially deemed due and owing.[56] 
  3. [81]
    As set out earlier at [37], the Contract provides that the Homeowners are in substantial breach if they fail to pay any money due and owing for five business days.[57]   The Contractor says that the amount claimed was due and owing from 20 December and therefore had been owing for a period of over five business days as at 8 January 2018.  I note that the Contractor represented (on its face) that progress claim 27 dated 7 December 2017 sent by email on 10 December 2017 was due for payment on 20 December 2017[58] and that it was withdrawn and replaced with progress claim 27A dated 12 December 2017.[59] 
  4. [82]
    By progress claim 27A the Contractor claimed the value of work completed to date was $3,001,373 (excl GST) or $3,301,510 (incl GST) against which it offset the amount said to have been previously paid, in the sum of $3,063,327 (incl GST). It claimed an amount of $238,183 (incl GST).  It states, ‘Could you please pay by Friday’.[60]As 12 December 2017 was a Tuesday, this request was apparently to pay the progress claim by Friday 15 December 2017.  This request was essentially for early payment as it was, on a strict interpretation, contrary to CSC1, which provided for payment within 7 days and clause 19.1, which provided for payment of undisputed amounts within 5 business days.
  5. [83]
    The difference between progress claims 27 and 27A is that the Contractor had removed the claimed value for disputed variation works and removed from amounts acknowledged as paid the amount, which had previously been allocated to variations.  In these proceedings the Contractor did not address me on the basis upon which it contends that it was entitled to treat payments in that way. 
  6. [84]
    The evidence is that progress assessment 24 was issued on 20 December 2017 based on an inspection on 19 December 2017.[61]  Mr Burgess’ assessment was that the value of total work completed, excluding the disputed variations removed, was $2,765,294.73 (excl GST). On my calculation this equates to $3,041,824.20 (incl GST). The Contractor seeks to discredit Mr Burgess’ assessment on the basis it asserts that Mr Burgess’ assessment was on a cost to complete basis.
  7. [85]
    Mr Burgess gave clear evidence, and I accept, that his original assessment was not on a cost to complete basis but rather he subsequently reassessed the value of the work completed on a cost to complete basis, which confirmed his original assessment as to the value of work completed contained in progress assessment 24.  In the absence of contrary independent evidence and for the reasons set out at [27], I accept Mr Burgess’ evidence of the value of the works completed. 
  8. [86]
    From this amount Mr Burgess deducted amounts claimed by the Homeowners, being a credit for the staircase work removed from the Contract at the Contractor’s insistence, liquidated damages and legal costs. 
  9. [87]
    By special condition, clause 19(j) was inserted into the Contract and provided that the Homeowners may deduct from moneys due to the Contractor any sum they claim is due and payable from the Contractor arising out of or in connection with the Contract or otherwise at law. 
  10. [88]
    I am not satisfied the Homeowners were entitled to deduct liquidated damages from this progress claim.  Clause 24.3 provides that the Homeowners were only entitled to deduct liquidated damages from the practical completion stage payment.  Deduction of liquidated damages from prior payment claims was not authorised by the Contract.
  11. [89]
    I do not consider whether the other deductions were authorised by the Contract because I find that the value of the work was less than the amount previously paid by the Homeowners, even as stated by the Contractor in the claim as referred to in [82], and therefore no amount was payable by the Homeowners.  I also do not consider whether the Contractor was entitled to apply monies previously paid by the Homeowners against variations, claims for which were withdrawn.  The Contractor did not clearly set out a basis upon which it contended it was entitled to treat amounts paid in this way.
  12. [90]
    The Contractor seeks to strictly enforce clause 19 of the Contract. It says that Progress claim 27A complied with the requirements of clause 19.1(d) of the Contract because the claim readily identified the value of the work completed[62] and the cover letter[63] specifically identified the time within which the claim was required to be paid.[64]
  13. [91]
    The evidence is that the Contractor did not itself strictly comply with clause 19 in presenting the progress claims, including there is no evidence that the progress claims including progress claim 27A were accompanied by a notice of dispute as required by clause 19.1(d) or similar appropriate written notice nor is there any evidence that the Contractor informed the Homeowners that it required strict compliance with the Contract.  The letter which enclosed Progress Claim 27A did not clearly call for strict compliance.[65] I am not satisfied that the cover letter was a ‘similar appropriate written notice’ to QBCC Form 4.  It did not contain the same or similar information.
  14. [92]
    There is no evidence before me that the parties followed the clause 19 procedures at any other time. To the contrary the evidence is that the Contractor regularly disregarded the terms of the Contract, in particular, in relation to progress claims, variations and extensions of time.  Mr De Marco conceded as much in his oral evidence and in correspondence.[66] 
  15. [93]
    The evidence before me is that there were other occasions of delay in conducting the assessment of progress claims and therefore payment.[67] There is no evidence before me that the Contractor put the Homeowners on notice that it required strict compliance.  I am not satisfied that the Contractor is entitled to require the Homeowners to strictly comply with clause 19 in respect of progress claim 27A in the absence of putting them clearly on notice that strict compliance was required.

Alternatively, was the amount claimed in progress claim 27A validly due and owing?

  1. [94]
    I find that the amount claimed in progress claim 27A was not validly due and owing. 
  2. [95]
    The Contractor says that progress claim 27A was in any event due and owing and sought to discredit Mr Burgess’ evidence as to valuation of work.  At the hearing Mr De Marco conceded that the amount owing was to be derived from the amount assessed by Mr Burgess as to the value of the works.  I am not satisfied that the Contractor is entitled to resile from the agreed methodology. 
  3. [96]
    As previously stated, I accept Mr Burgess’ evidence as to the valuation of the work.  The value of the work performed as assessed was less than the amount previously paid on any parties’ submissions, therefore no amount was due to the Contractor by the Homeowners in respect of Progress Claim 27A. 
  4. [97]
    The Homeowners were not in breach for failing to pay the amount claimed in progress claim 27A nor were they in breach for failing to pay any amount in respect of progress claim 27A.  The Homeowners’ termination was not invalid on that basis.

Was the Contractor in breach of the Contract?  Was the breach a substantial breach?  Was the substantial breach not remedied by 8 January 2018 entitling termination?

  1. [98]
    I find the Contractor was in substantial breach of the Contract as of 19 December 2017 and the breach was not remedied within 10 business days. I find that the Homeowners were entitled to terminate the Contract by notice on 8 January 2018.
  2. [99]
    There is no evidence that the Contractor attempted to remedy the claimed breaches within the 10-day period nor ask for an extension of time within which to do so. It denied it was in breach or claimed any breach did not give rise to a right to terminate.
  3. [100]
    Although the notice period operated over the Christmas period, the Contractor had been previously put on notice in the September and November Notices of the substance of the breaches claimed.  In those circumstances, I am satisfied that the Homeowners’ complied with any obligation on them to act reasonably, which obligation attached to the termination rather than issuing the notice of default.

Was the Contractor in breach of its obligations by unreasonably failing to perform the works diligently or unreasonably delaying or failing to maintain reasonable progress as of 19 December 2017? Was any such breach a substantial breach?

  1. [101]
    I find that as of 19 December 2017 the Contractor was in substantial breach of its obligations to progress the works under clause 3.1(a) and clause 17.3 of the Contract.  I find that the Contractor unreasonably failed to perform the works diligently and unreasonably failed to maintain reasonable progress. The delay was unreasonable in the circumstances.  I find that the Contractor did not remedy that breach or commence to remedy that breach by 8 January 2018.   
  2. [102]
    The Homeowners rely upon:
    1. Clause 3 by which the Contractor warranted that the works will be carried out in an appropriate and skilful way and with reasonable care and diligence as set out at [42]; and
    2. Clause 17.3 at set out at [36].
  3. [103]
    The Contractor contends that it did not fail to progress the works with reasonable diligence and denied it was in substantial breach.[68] The Contractor says that it was delayed by various factors and that none can be properly attributed to the actions of the Contractor. In particular, it points to ‘directions’ by the Homeowners to vary the works, the failure of the Homeowners to provide an indemnity in relation to the staircase works and due to the issues in relation to the council approval of the curtain wall.
  4. [104]
    Breach of a warranty may amount to a substantial breach if it is sufficiently serious. Breach of an essential term is not necessarily required.[69]
  5. [105]
    The Contract, by agreement of the parties, sets out a regime by which an entitlement to terminate for ‘substantial’, as distinct from trivial breaches, of the terms of the Contract may arise if the recipient of the notice does not within the time allowed rectify or substantially commence to rectify the claimed breaches, which right is in addition to the parties’ rights at common law.[70]  The Tribunal has previously accepted, and I agree, that a ‘substantial breach’ in the context of a clause such as clause 26 is distinguishable from one that would justify a common law determination.[71]
  6. [106]
    Given the types of matters listed in clause 26, I am satisfied that a substantial breach is one that is not trivial or of inconsequential significance but is not required to equate to a breach of a condition, which would enliven a right to terminate at common law.  Each of the matters in clause 26.4 which are defined as a substantial breach is ‘a significant matter that a reasonable reader would understand to involve a real and significant risk that the owner will not get what he bargained for from the builder’s performance of the contract.’[72]
  7. [107]
    It is necessary to consider the significance or consequences of the conduct alleged to determine whether a breach is substantial in each case.
  8. [108]
    The Homeowners point to several matters as evidence of the Contractor’s breach of its obligations.

Suspension and the Christmas shutdown

  1. [109]
    The Contractor contends that the period during which the works were suspended was between 29 November 2017 and 12 December 2017, the suspension had been withdrawn and the Contractor had returned to work such that the Contractor was not in breach as of 19 December 2017. The Contractor also disputed that it was not entitled to the industry practise of a Christmas shutdown.
  2. [110]
    The evidence is that although the Contractor had withdrawn the suspension, the Contractor’s foreman did not remain on site to continue work on 18 December 2017.  There is some evidence that Mr De Marco had instructed him not to work at the site pending payment from the Homeowners.[73]  There is also some evidence that the Contractor’s foreman did not attend site on 8 January 2018 because he was instructed by Mr De Marco not to do so.[74]  Whilst this is hearsay evidence it is consistent with Mr De Marco’s oral evidence that he told his foreman not to attend site.[75] 
  3. [111]
    There is no evidence before me that the Contractor accelerated the works to address delay caused by the suspension.  The Contractor contends that it was unable to do so because the Homeowners had not paid for the disputed variations.  I address the suspension in more detail later in these reasons from [162].
  4. [112]
    The Contract unlike some other standard form building contracts did not expressly provide that the Contractor was entitled to an extension of time for the ‘industry shutdown’ if it could not have reasonably been foreseen at the time of contracting and included in the construction period.  There is no clear evidence that the Contractor allowed the 2016 ‘industry shutdown’ as non-working days. To the contrary, the 45-week programme, which formed part of the Contract, which was not to be departed from without the written consent of the Homeowners, showed that work would continue during the 2016 ‘industry shutdown’.  I am not satisfied that the Contract can be construed to entitle the Contractor to the 2017 ‘industry shutdown’. 
  5. [113]
    I note that prior to termination, the Contractor did not seek an extension of time for the 2017 ‘industry shutdown’ as a delay not reasonably foreseeable and beyond its reasonable control.[76] 
  6. [114]
    Mr De Marco’s oral evidence was that despite the Contractor’s lawyers writing to the Homeowners, on his instructions, advising that the site would be shut down over the ‘industry shutdown’ that he, his son who was the administrator, his brother, who was the foreman, and his carpenters continued to work on site until 8 January 2018 except for public holidays. His evidence was that he went to the site daily during this time.  Mr De Marco reluctantly conceded that other than some correspondence sent during the shutdown period there was no evidence in his statement to support his contention that work continued.  Mr De Marco’s son and brother and the Contractor’s carpenters did not provide statements of evidence in these proceedings.  There was no evidence to support Mr De Marco’s evidence that work continued.
  7. [115]
    I am not satisfied that any work or any significant work continued on site during this time.  Mr De Marco conceded that subcontractors did not attend site during this period to progress the works during this time.  His evidence was that the electrician, plumber and cabinet maker attended site to carry out measurements to enable work to continue after the industry shutdown. 

Failure to complete the works by the date for practical completion and the works being significantly delayed

  1. [116]
    The undisputed evidence is that Practical Completion was not achieved by 24 March 2017, nor by 20 July 2017 nor by the time the Contract was terminated on 8 January 2018.  
  2. [117]
    The Homeowners point to the failure of the Contractor to achieve practical completion by the time of termination as evidence of breach.
  3. [118]
    The Contract provided for a 305-day completion period.  The work was to commence by 23 May 2016.[77] On this basis the date for practical completion was 24 March 2017, subject to any valid extensions of time.  There is evidence before me that the Contractor did not commence works until 27 June 2016 and contended that the date for practical completion was 25 May 2017.[78] Mr De Marco’s oral evidence was that there was some delay to commencement of the program of works caused by excavation works, which he maintained did not form part of the works under the Contract. The Contractor’s provisional and prime sum schedule included such works but did not include an estimate of the costs of those works as part of the total provisional and prime sum costs.
  4. [119]
    The Contractor sought an extension of time under the Contract, which was granted extending the date for practical completion to 20 July 2017.[79]    In these proceedings the Homeowners did not dispute the Contractor’s entitlement to an extension of time for excavation works.
  5. [120]
    There is evidence before me that on 30 January 2017,[80]16 February 2017,[81] 13 March 2017 and 15 May 2017 the Homeowners raised concerns in relation to the rate of progress.[82] On 19 September 2017, the Homeowners put the Contractor on notice that they required strict compliance with the Contract.[83] The Homeowners’ September  and November Notices also put the Contractor on notice that the Homeowners required strict compliance with the Contract.
  6. [121]
    The Contract contained various provisions which indicated the importance of maintaining progress as contemplated by the Contract.[84]  General condition clause 23.2 required the Contractor to take all reasonable steps to lessen the effect and duration of any delay.
  7. [122]
    I accept that the Contractor’s primary obligation was to bring the works to completion in accordance with the Contract save minor defects or omissions by the date for practical completion or where strict compliance with the terms of the Contract regarding the date for practical completion have been waived within a reasonable time. 
  8. [123]
    Evidence that the works were not brought to completion by the date for practical completion is some evidence of delay but does not necessarily equate to unreasonably failing to perform the works diligently or unreasonably delaying or failing to maintain reasonable progress.[85]  It is necessary to consider the causes of delay to determine if the Contractor’s delay was unreasonable in the circumstances.[86]
  9. [124]
    As of 8 January 2018, the construction period had extended, on Dr Ng’s calculation, to 594 days or almost twice the time set out in the Contract, being 305 days.[87]  This is not a case where the works were substantially complete at the time of purported termination.  Significant work remained to be performed. 
  10. [125]
    Mr Burgess assessed the percentage of work completed in his progress claim assessment reports.  Progress assessment 24 set out that Mr Burgess assessed that the works, excluding the disputed variations, were 81% complete.  Mr Burgess gave evidence that based on the value of contract works outstanding under progress claim 27A that he estimated that there was a minimum of two months of work to be completed such that the works would not be completed until at least early March 2018.[88] The evidence is that little additional work was performed between 12 December 2017 and 8 January 2018.  Mr Burgess gave evidence of his assessment of the costs to complete as at the date of termination based upon his inspections of 19 December 2017 and 23 January 2018.[89]  That assessment was in the order of $1,098,166 (excl GST).
  11. [126]
    There is very limited evidence before me of what period of time, in addition to the contracted construction period, was a reasonable time within which the Contractor ought to have performed the works. 
  12. [127]
    The Contractor points to:
    1. the information set out in the, mostly belated, extension of time claims;
    2. its estimate shortly before the Contract was terminated that it expected to be able to bring the works to completion within 12 weeks of the resumption of work on 8 January 2018 after the Christmas shutdown; and
    3. the Homeowners’ evidence that the subsequent contractor engaged by the Homeowners contracted to complete the works in 14 weeks. 
  13. [128]
    Neither the Homeowners nor the Contractor lead clear evidence of the effect of the claimed delays on the critical path of the works. I accept that the Contract does not expressly refer to the concept of delay to the critical path of the works.  The completion of the work, as a whole, is what is contracted to be undertaken. The order of performance is usually left to the Contractor. 
  14. [129]
    The Tribunal has recognised that ‘many of the particular parts of the works will be started and not completed but as the works progress to practical completion, step by step the works will be completed.’[90] 
  15. [130]
    Delays to some items of work will not result in practical completion being delayed because they can be completed at various times within the construction period but delay affecting works on the critical path will cause delay to the works reaching practical completion because it is required to be completed before other work reliant on it can be completed.  Such delay results in actual delay to the completion of the works as a whole.  Delay of that nature is required to justify an extension of time. 

Staircase and Water ingress

  1. [131]
    The Homeowners point to the Contractor’s refusal to suggest a solution to the ‘ingress of water’ issue it discovered on or about 22 March 2017, refusal to undertake work suggested by the Homeowners’ engineer to address the ‘ingress of water’ issue, demand for an indemnity and refusal to carry out the staircase works as causing unreasonable delay and failing to diligently progress the works. 
  2. [132]
    The Contractor contends that the Homeowners’ inactions or delayed actions caused the delay and that it was not responsible for the delay occasioned by this issue.
  3. [133]
    The Homeowners agreed to engage an engineer to prepare a report and scope of works and on or about 18 October 2017 the Homeowners ultimately agreed to remove the staircase work from the scope of work under the Contract and engaged another contractor to perform the work.  Dr Ng’s evidence is that they have not experienced any issues with the work.  Whilst the Homeowners could have decided to take this action earlier, I find that the Contractor’s conduct, in refusing to perform the work or insisting on an indemnity, was in breach of its obligations to diligently progress the works and in breach of its warranty to do all such works as reasonably necessary to complete the project.
  4. [134]
    Mr De Marco conceded that the timber staircase formed part of the original scope of work the subject of the Contract.  However, Mr De Marco says that the Contractor was not responsible for the ‘ingress of water’ discovered by him on or about 22 March 2017 and he did not agree with the Homeowners’ engineer’s scope of works as he had concerns that the works would not prevent the adjacent timber staircase deteriorating due to the presence of moisture. Other than suggesting the stairs be constructed of concrete, the Contractor did not suggest a way forward.  The evidence is that the Contractor did not or did not clearly link the water ingress issue with a claimed inability to progress the staircase works until 19 April 2017.
  5. [135]
    The Contractor did not produce to the Homeowners during the Contract nor produce to the Tribunal any independent, or indeed any persuasive, evidence as to the cause of the water ingress or why the water ingress issue was not its responsibility. 
  6. [136]
    During oral evidence Mr De Marco referred to a 2013 soil report, which he says supports his view that the water ingress issue was not the Contractor’s responsibility. He ultimately conceded that the report was not in evidence before the Tribunal.  Mr De Marco did not explain why, if he relied upon such a report, he had not ensured that it was put into evidence before me.   In the absence of the report being in evidence, I place no weight on Mr De Marco’s evidence that it supports his views.
  7. [137]
    Mr De Marco also gave evidence that based on his experience of a nearby building site, which had ground water issues, he formed the view that it was not the Contractor’s responsibility. His evidence on this issue was not well explained and I am not persuaded by it.
  8. [138]
    The Contractor appears to rely upon the document entitled builders specification[91] at paragraph 5(b).  It notes that the Contractor is not responsible for the existing eastern soldier pile wall, which work was performed by the previous contractor.  By special condition 1[92] the parties agreed that nothing in the specification document limits or modifies the Contractor’s obligations under the Contract. 
  9. [139]
    Even if I was persuaded that it modified the Contractor’s obligations, which I am not, there is no independent or persuasive evidence linking the water ingress with the eastern soldier pile wall.
  10. [140]
    An issue in the proceedings was whether the engineer’s scope of work to address the water ingress was a variation to the scope of work under the Contract, which the Contractor was not obliged to perform.  The Homeowners’ request for a quote is consistent with the work being a variation.  I accept that a Contractor is not generally obliged to perform varied work unless it voluntarily agrees to do so
  11. [141]
    However, in this case the Contractor, by entering into the Contract, had agreed to perform items not expressly mentioned in the Contract, which were necessary for the satisfactory completion and performance of the works.[93]  The Contractor had also warranted that it had carefully examined all information relevant to the risks, contingencies and other circumstances which could affect the Contract Price, that it had visited and carefully examined the site and fully informed itself of all patent site conditions and that it was responsible for and bears all risk in connection with both the construction of the Works, including the responsibility for co-ordination, management and interface of the processes necessary to complete the construction of the Works in accordance with the Contract.[94]
  12. [142]
    To the extent the water ingress arose from the previous contractor’s work, about which there is no or little evidence, the Contract provided for a contingency for works that may be required to rectify the previous contractor’s work.  This is consistent with the Contractor being required to complete or rectify works commenced by the previous contractor and to carry out items not expressly mentioned in the Contract, which were necessary for the satisfactory completion and performance of the works.  It is also consistent with the Homeowners seeking a quote for the works as such works could result in an adjustment to the allowance and therefore the Contract price.
  13. [143]
    Mr De Marco’s oral evidence was that the contingency sum for rectification of the previous contractor’s work included in the Contract was an amount in addition to the Contract price. 
  14. [144]
    Contrary to this evidence, the contingency sum of $25,000 was treated as a provisional and prime sum in the Contract and clearly forms part of the Contract price.[95]  The prime cost items schedule and the provisional sums schedule both state “see Document 4”.  Document 4 sets out the Contractor’s schedule of provisional and prime sums.  Item 12 is the contingency of $25,000 for ‘existing completed work error/rectification’.  The contingency forms part of a total of $652,500 (excl GST), for provisional and prime sums, which forms part of the Contract price.  I note that there were other items included in the schedule of provisional and prime sums for which no amount had been included in the Contract price.[96]
  15. [145]
    I am not satisfied that the Contractor was entitled to refuse to undertake the engineer’s scope of work nor the staircase work.  In the circumstances, the Contractor’s refusal was unreasonable and demonstrates that it did not intend to perform the Contract according to its terms.
  16. [146]
    I accept that the Contractor’s refusals caused delay to that part of the works.  
  17. [147]
    There is no or little evidence as to whether the issue with the staircase caused delay to achieving practical completion.  Mr De Marco’s oral evidence was that the issue with the staircase did not cause delay to the project overall as there were other means of accessing the different floors to undertake work. This evidence is inconsistent with the Contractor’s contention that the Homeowners’ inactions or delayed actions caused delay.
  18. [148]
    I am not satisfied on the evidence before me that the Contractor’s refusals caused delay to achieving practical completion.

Variations

  1. [149]
    The Contractor contends that the Homeowners caused or at least contributed to the delay in progress of the works because the Homeowners sought variations which delayed progress of the works and that therefore delays occasioned by variations were not the Contractor’s fault. 
  2. [150]
    I accept that some variations may cause delay to elements of the works, and some may cause delay to the critical path. The Contractor did not give clear evidence of delay to the critical path by variations and did not give clear evidence that it had informed the Homeowners of delays to the critical path.
  3. [151]
    By special condition, clause 21 of the general conditions was varied by inserting clause 21.1A such that the parties agreed that the Contractor would provide the Homeowners with a written variation document within two business days after receiving a direction. The parties also agreed that the Homeowner's signature on a variation document was a precondition to an entitlement to payment for any variation.
  4. [152]
    By special condition, clause 23 of the general conditions was varied by inserting clause 23.1A such that the parties agreed that it was a precondition to the granting of an extension of time that the Contractor provide the Homeowners with written notice as required by clause 23.1(d) within the stipulated time i.e. 10 business days and provided that the Contractor would not be entitled to any claim for costs, expenses, damages or other amounts resulting from any delay or disruption arising from any cause.[97]
  5. [153]
    Mr De Marco conceded that, on the whole, he had not followed the Contract terms and conditions for claiming variations and that his process was to issue a variation document once the work was completed on a ‘do and charge’ basis.
  6. [154]
    The Contractor concedes it did not comply with the terms of Contract nor section 40 of Schedule 1B of the QBCC Act in respect of each of the 38 variations to the Works claimed by it.[98]  It says that the contractual validity and the quantum of the variations is not directly relevant because it has withdrawn the payment claims, which claimed payment for the variations works.[99]  It says that the variations were instructed by the Homeowners.  Dr Ng accepted that she requested variations 1, 2, 5 to 9, 11, 13 to 20, 22 to 27.  The Contractor says that the variations requested caused delay.
  7. [155]
    The Contractor contends that Dr Ng was superintendent and directed the variations to the Works, supervised the Contractor’s progress and knew of the extent of progress and delays.  For the reasons set out earlier, Dr Ng was not superintendent.
  8. [156]
    Mr De Marco’s evidence was that because Dr Ng was on site regularly and he held weekly meetings with her that the Homeowners were fully aware of the costs of varied work and ought not be permitted to rely upon the strict terms and conditions of the Contract. There is no sufficient evidence before me for me to form a view that the Homeowners waived their rights in relation to requiring strict compliance with provisions relating to variation claims. To the contrary the Homeowners wrote to the contractor requiring strict compliance with the Contract in relation to variations on 4 December 2016[100] and on other occasions.
  9. [157]
    The Contractor’s clear contractual obligation was to obtain the Homeowners’ prior agreement to variations and to inform them in the variation document of likely delays.  If the Contractor had complied with its obligations the Homeowners may not have proceeded with some of the variations. This is consistent with Dr Ng’s evidence in respect of the Homeowners’ decision to initially proceed with the curtainwall variation referred to later at [172].
  10. [158]
    I am not satisfied that the extent of the Contractor’s delay is excused by the Homeowners’ requests for varied work. The Contractor cannot rely upon its own wrong to excuse its failure to perform its obligations. 
  11. [159]
    It is a defence to a proceeding for a contravention of Schedule 1B section 40 (2) of the QBCC Act, for the contractor to prove that the variation was for work required to be carried out urgently and it was not reasonably practicable, in the particular circumstances, to produce a copy of the variation in writing before carrying out the work.  Variation 2 was the only variation about which Mr De Marco gave specific evidence, that was required to be performed ‘urgently’.  His evidence is that this variation was requested by Dr Ng at a time which required the changed work to be performed ‘on the spot’.  The Contractor claimed an EOT for 5 business days.[101]  Even if I accept this delay is reasonable it does not excuse the extent of the Contractor’s delay.

Cashflow issues

  1. [160]
    The Contractor contends that the Homeowners caused or at least contributed to the delay in progress of the works because the Homeowners did not pay for unapproved variations, and this caused it cashflow issues resulting in issues with its suppliers and sub-contractors, which resulted in delays to parts of the works.  It says that to the extent it could have employed more contractors to progress the works it was financially unable to do so as a result of the Homeowners not paying it.  The Contractor contends this is a reasonable excuse for not doing so.
  2. [161]
    The Contractor’s clear contractual obligation was to obtain the Homeowners’ prior agreement to variations failing which the Homeowners were entitled to refuse to pay.  To the extent that the Homeowners sought to enforce their rights, and this caused cashflow issues for the Contractor, which resulted in delay, that was an issue entirely within the control of the Contractor.  I am not satisfied that the Contractor’s delay is excused by the Homeowners’ insistence that the Contractor comply with the Contract. The Contractor cannot rely upon its own wrong to excuse its failure to perform its obligations. 

Suspension of the works

  1. [162]
    I find that the Contractor had no right under the Contract to issue a notice of suspension even if the Homeowners had failed to pay progress claims. 
  2. [163]
    I find that the Contractor unreasonably suspended or failed to maintain reasonable progress during the period 29 November to 12 December 2017.
  3. [164]
    Unlike other standard building contracts, the Contract did not contain a term allowing the Contractor to suspend the works for non-payment by the Homeowners.  During the hearing Mr De Marco claimed that despite issuing the notice of suspension he, some of his employees, the electrician and the plumbers continued to work on site.  He said this was because he had received legal advice that he had no right to suspend and that he needed to continue to work on site. His evidence was that he did not arrange for his other sub-contractors to attend site and that he ’90 per cent suspended’.[102]  The suspension was formally withdrawn on 12 December 2017.
  4. [165]
    The Contractor’s other employees, which include Mr De Marco’s brother and son, the electrician and the plumbers did not give evidence in these proceedings.  Even if I accept Mr De Marco’s evidence that some work continued on site, about which there is considerable doubt, the Contractor’s decision to restrict the work being done to only its staff and not all its sub-contractors was, in my view, a decision to not maintain reasonable progress during that period.
  5. [166]
    The Contract did not entitle the Contractor to suspend.  Mr De Marco conceded this.  The Contractor was in breach of Contract by suspending the works. Although the Contractor withdrew the suspension on 12 December 2017 there is no evidence before me that the Contractor took any steps to accelerate the progress of the works to address the delay caused by the unlawful suspension. 

Curtainwall

  1. [167]
    I find that the Contractor failed to carry out the works in an appropriate and skilful way in constructing the curtainwall when those works were not in compliance with the existing DA and approved plans.  Although the Homeowners persisted in attempting to obtain approval for the curtainwall they did so at express encouragement of the Contractor through its director, Mr De Marco. 
  2. [168]
    To the extent the curtainwall issue caused delay it is attributable to the Contractor’s failure:
    1. to properly check the existing DA;
    2. to properly check the DA’s currency; or
    3. to warn the Homeowners that they should check the existing DA prior to agreeing to vary the works to include such work.
  3. [169]
    The Contractor claims that it only took responsibility for organising the design, approval and construction of the curtainwall, the Homeowners persisted with their desire to have it built even after issues arose with Council approval and that the curtainwall did not affect the critical path of the works.  It says that the Contractor was not responsible for the delays as the Homeowners ought to have been aware that obtaining approval for the curtainwall design was not a certainty.
  4. [170]
    The Contractor warranted that the work under this Contract, which includes varied work,[103] will be carried out in accordance with all relevant laws and legal requirements including, for example, the Building Act 1975.[104]The Contractor also warranted that the Contractor shall carry out and complete the work under this Contract so that when completed the Works shall comply with all legislative requirements.[105]
  5. [171]
    It is uncontroversial that the Homeowners sought a quote to vary the works to incorporate the curtainwall and cost information was provided on 26 August 2016.[106]  The Contractor provided a variation document to the Homeowners dated 9 September 2016.[107] The work the subject of the variation included architect’s design fees.
  6. [172]
    Dr Ng’s evidence is, and I accept, the Homeowners were only interested in changing the design if the Contractor could guarantee that it would not result in any significant delay or disruption to the completion of their home.[108] The Contractor represented it could be built, advised the Homeowners that there should not be a problem getting it approved by the Building Certifier because in Mr De Marco’s view, based on his experience, it would be within the ‘generally in accordance’ principle and caused the design to be undertaken.  The Contractor claimed for work in relation to this variation from progress claim 6A dated 17 September 2016.[109]
  7. [173]
    The Contractor failed to properly check the existing DA and in particular its currency prior to proceeding with a permissible change application.  It did not warn the Homeowners that they should check the existing DA.
  8. [174]
    On 26 May 2017, upon being advised that the DA had expired on 11 January 2017 and that required a code assessable application to be lodged, the Contractor recommended the Homeowners proceed with the code assessable application and again represented confidence that it would be approved.[110]
  9. [175]
    By email dated 18 June 2017 Mr De Marco provided personal assurance to the Homeowners in relation to the construction of the curtainwall and stated, ‘if I thought there was a possible problem with the latest GIA drawing I would stop working on the various building elements.’[111]  On 19 July 2017 Mr De Marco informed the Homeowners that he would continue to build the curtainwall at his risk.[112] 
  10. [176]
    On 14 August 2017 the Council refused approval for the curtainwall works.[113]  Mr De Marco’s oral evidence was that he remained of the view approval would be obtained.  On 29 August 2017 the Council demanded that work which is inconsistent with approved plans cease.[114]
  11. [177]
    On 5 September 2017 the Homeowners took steps to attempt to mitigate their loss by appealing to the Planning & Environment Court (P&E Court).[115]
  12. [178]
    As referred to earlier at [44] the Homeowners issued the September Notice, which amongst other breaches claimed that the Contractor had failed to construct the curtainwall in accordance with the approved plans.
  13. [179]
    On 9 October 2017, the Homeowners put the Contractor on notice that the works were illegal in breach of the Contract, they were engaging with the Council to obtain an updated approval and called upon the Contractor to progress other works.[116]   They reserved their rights against the Contractor including in respect of the illegal works and under clause 21.7 of the general conditions.
  14. [180]
    On 12 October 2017, the Homeowners put the Contractor on notice that the works completed in relation to the curtainwall were illegal and they considered they were under no obligation to pay for them and continued to reserve their rights.[117]
  15. [181]
    By late November 2017 the Homeowners had decided to revert to the original front façade design to secure Council approval for the works.[118]  On 29 November 2017 the Homeowners informed the Contractor that amended plans were being drafted for consideration by Council.[119]
  16. [182]
    As referred to earlier at [63] on 19 December 2017 the Homeowners issued the December Notice, which amongst other breaches claimed that the Contractor was in breach of the warranty at clause 3.1(c) of the Contract by which it warranted that it would carry out works in accordance with all relevant laws and legal requirements and had failed to comply with the law including the Council planning approval requirements in relation to the curtainwall.  The Homeowners set out that the Contractor could remedy the breach by withdrawing any claim related to the curtainwall and by demolishing and disposing of the curtain wall structure that is not required by the plans that receive approval of the P&E Court at no cost to them.[120]
  17. [183]
    At that time the amended plans had not yet received the approval of the P&E Court.  Approval was subsequently obtained on 19 January 2018.[121]
  18. [184]
    I am not satisfied that the Contractor could have remedied the breach in the way contended for within the notice period.  There is some evidence before me that by about 12 December 2017 Council had accepted the most recent revised plans.[122]  
  19. [185]
    Before the P&E Court gave its approval, the Contractor could have agreed to demolish and dispose the curtain wall structure that was not required by the plans that received approval upon the approval being granted.  There’s no evidence before me that it agreed to do this.  The Contractor denied it was in breach and essentially took no steps to remedy the breach. 
  20. [186]
    Dr Ng’s evidence is that the total direct costs to demolish the existing curtain wall structure and rectify the roof and associated works in accordance with the Amended Development Approval was $109,697.41 (excl GST). [123]Dr Ng relies upon evidence by Mr Burgess.[124]
  21. [187]
    The Contractor gave some oral evidence but did not provide any detailed written evidence to challenge the rectification costs.  I accept the Homeowners’ evidence as to the costs to rectify this work.  Those costs are substantial and are certainly not trivial or minor.
  22. [188]
    Although I am satisfied that the performance of the works without relevant approval was a substantial breach, I am not satisfied that failure to demolish the works and dispose of the curtain wall structure that was not required by the plans that receive approval of the P&E Court was a failure to remedy the Notice to Remedy Breach by the time of termination.
  23. [189]
    Mr De Marco gave oral evidence that the curtainwall did not cause delay to the critical path. Inconsistently, he also accepted that it was a significant issue which delayed the project. Mr De Marco’s explanation, as to why the Contractor made a claim for delay costs ‘due to the Stop work notice issued in relation to the curtain wall variation’[125] if the delay to the curtain wall work did not affect the critical path, was unpersuasive.   The Contractor did not rely upon any written evidence as to any analysis performed.  As stated earlier, Mr De Marco’s oral evidence was inconsistent on this and on other issues.  I do not accept Mr De Marco’s evidence that the curtainwall did not affect the critical path of the works.

Were the works unreasonably delayed?

  1. [190]
    I find, that it is more likely than not, that the progress of the works was unreasonably delayed by matters for which the Contractor was responsible.
  2. [191]
    No party lead evidence from an expert programmer.  Although Mr Burgess is not a programming expert, I accept he has significant experience in the construction industry.  He attended site regularly.  In several of his progress claim assessment reports he expressed his opinion that the Contractor’s progress was variously behind program, slow, very slow or extremely slow.[126]  
  3. [192]
    Mr Burgess gave evidence that:

The incomplete contract works under Progress Claim 27A as at December 2017 shows that there was considerable delay on the Project.  Based on my assessment of the incomplete trades this delay is entirely separate to any delay allegedly caused by the Brisbane City Council’s stop work notice in respect of the Curtain Wall.[127]

  1. [193]
    In the absence of evidence from an expert programmer I accept Mr Burgess’ evidence that progress was slower than it ought to reasonably have been in the circumstances.  Having regard to the significance or consequences of the delay, I find that such a breach was sufficiently serious to constitute a substantial breach and that as there was no evidence before me that the Contractor proposed to remedy the breach by accelerating the works the Contractor had not remedied the breach prior to the Homeowners terminating on 8 January 2018. 

Was the Contractor in breach of its obligations by failing to carry out work under the Contract competently as of 19 December 2017? Was any such breach a substantial breach?

  1. [194]
    I find that as of 19 December 2017 the Contractor was in substantial breach of its obligations to carry out the work under the Contract competently.  I find that the Contractor did not remedy that breach or commence to remedy that breach by 8 January 2018.   
  2. [195]
    The Contractor contends that it competently carried out the work.
  3. [196]
    There was no specific independent evidence as to what a reasonably competent contractor would do.
  4. [197]
    The Contract defines ‘work under this Contract’[128] as ‘all that work necessary to build the Works in accordance with the plans and specifications and this contract, and, unless expressly excluded includes
    1. works to make the Site accessible to the Contractor;
    2. provision of any special equipment;
    3. work to clear the Site for building;
    4. set out of the Works and survey if necessary;
    5. necessary structural retaining walls;
    6. sewerage, draining and electrical connections;
    7. provision of temporary water and power during construction; and
    8. provision of clean up and disposal of waste material from the Site.
  5. [198]
    Works is defined as ‘the work described in Schedule item 3 to be built in accordance with this Contract, including variations authorised under the Contract, and which by the Contract is to be handed over to the Owner.[129]

Failing to construct the Curtainwall in accordance with approved plans

  1. [199]
    For the reasons set out earlier in these reasons, I find that the Contractor was in substantial breach as of 19 December 2017 by failing to carry out the works competently, as it failed to carry out the works in compliance with approved plans. 
  2. [200]
    I find that a reasonably competent contractor would have ensured that the works complied with approved plans because that is required for the works to be in accordance with all relevant laws and legal requirements.
  3. [201]
    As of 8 January 2018, the Contractor had not remedied this breach nor agreed to comply with the P&E Court order.

Claiming non-compliant Variations and extensions of time (EOTs)

  1. [202]
    I find that the Contractor was in substantial breach as of 19 December 2017 by failing to carry out the works competently, as it failed to claim EOTs in accordance with the terms of the Contract and in accordance with its obligations under schedule 1B of the QBCC Act. 
  2. [203]
    I am not satisfied that the Contractor was in substantial breach as of 19 December 2017 by failing to claim variations in accordance with the terms of the Contract and in accordance with its obligations under schedule 1B of the QBCC Act because it withdrew its claim for variations when it submitted progress claim 27A on 12 December 2017. 
  3. [204]
    I find that a reasonably competent contractor would have ensured that it administered the works in accordance with all relevant laws and legal requirements.
  4. [205]
    The definition of ‘work under the Contract’ refers to ‘all that work necessary to build the Works’ and goes on to list types of work included.  It does not expressly refer to administering the Contract according to its terms.  I accept that contract administration is work necessary to build the Works.
  5. [206]
    Mr De Marco conceded that, on the whole, the Contractor had not followed the contract terms and conditions in relation to claiming variations and EOTs and that many of the extensions of time claimed were sought many months after the time provided for in the Contract. The evidence is that the Homeowners agreed to at least one extension of time claim although their solicitors sought to resile from any agreement. As referred to earlier, in these proceedings the Homeowners did not dispute the extension of time to 20 July 2017.
  6. [207]
    Mr De Marco’s evidence was that because Dr Ng was on site regularly and he held weekly meetings with her that the Homeowners were advised of cost and delay implications and the Homeowners ought not be permitted to rely upon the strict terms and conditions of the Contract. 
  7. [208]
    If the Contract terms had been complied with such that the Homeowners received a copy of the variation prior to the works being performed, which set out the likely delay the Homeowners may have decided not to proceed with the variations however they were denied the opportunity to make a fully informed decision in relation the variations.
  8. [209]
    Dr Ng did not hold any relevant qualifications or significant experience in the construction industry.  The Contract contained special conditions imposing additional obligations on the Contractor relating to variations and EOTs.  By agreeing to these additional obligations, the Contractor was alerted to the importance the Homeowners placed on compliance by the Contractor with the Contract in relation to variations and the time for completion.
  9. [210]
    There is no sufficient evidence before me for me to form a view that the Homeowners waived their rights in relation to requiring strict compliance with provisions relating to variations or extensions of time claims. To the contrary they wrote to the Contractor a number of times seeking the Contractor’s compliance.  On 15 September 2017 and 19 September 2017, they clearly put the Contractor on notice that they required strict compliance with the Contract.[130] Despite this the Contractor made EOT claims 3-11 each dated 29 October 2017 and EOT claims 12-16 each dated 30 October 2017.
  10. [211]
    The Homeowners also relied upon variation claims having been issued which did not comply with schedule 1B of the QBCC Act and the Contractor claiming extensions of time which did not comply with the Contract and schedule 1B of the QBCC Act, which essentially mirror the contractual requirements.
  11. [212]
    I find that a reasonably competent contractor would have ensured that it complied with the Contract in relation to claiming variations and EOTs because it was required to comply with essentially the same obligations in the QBCC Act when claiming variations and EOTs.
  12. [213]
    Given the additional obligations in relation to claiming variations and EOTs agreed by the parties, which confirmed the importance of timely documentation, and having regard to the number of non-compliances by the Contractor, I find that the Contractor’s failure to comply with the Contract and the late submission of documentation are, having regard to the significance or consequences of the conduct for the Homeowners, sufficiently serious to constitute a substantial breach.
  13. [214]
    The Contractor did not withdraw the EOTs prior to 19 December 2017 nor prior to 8 January 2018.  I find that this substantial breach was not remedied by 8 January 2018. 
  14. [215]
    The Contractor withdrew its claim for variations when it submitted progress claim 27A. I am not satisfied that the Contractor was in substantial breach in this regard as of 19 December 2017. 

Unreasonably failing to replace defective work or materials

  1. [216]
    I am not satisfied, on the evidence before me, that the Contractor was in breach of the obligation not to unreasonably fail to replace defective work or materials as of 19 December 2017.  
  2. [217]
    The Contractor contends that it was not required to replace defective works and materials.  Neither party led any independent evidence as to the extent of the alleged defect from a witness who gave evidence in this proceeding.
  3. [218]
    The Homeowners purported to terminate prior to the Contractor claiming practical completion.  An issue is whether the works were defective or incomplete.  As observed in Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor[131]

In turning to each numbered or lettered defect what will be considered is whether the state of the allegedly defective work evidences a breach of statutory warranty, for instance whether the state of the work compels the inference it was not carried out in an appropriate and skilful way with reasonable care and skill. As part of that process it is necessary to bear in mind that on-site work ceased prior to completion, that is, the apparently defective state of some work may merely be because it was incomplete and not because such work as was performed was in breach of the statutory warranty. This is not a realistic possibility in respect of many of the defects discussed below but will be referred to where it does arise as a realistic possibility.

Swimming pool

  1. [219]
    The Homeowners contend that the Contractor had unreasonably failed to replace defective work or materials in relation to the use of reinforced concrete for the swimming pool. 
  2. [220]
    The Contractor contends that the pool was appropriately waterproofed and that the water was coming from sub-surface ground water.
  3. [221]
    In the absence of clear independent expert evidence from a witness giving evidence in these proceedings including as to the cause of the ‘swimming pool leak’, I am not satisfied that the Contractor’s work was defective. 

Air-conditioning

  1. [222]
    The Homeowners point to issues subsequently identified in relation to the air-conditioning.  This particular issue was not raised in the December Notice.  The Contractor contends that the work was incomplete rather than defective at the time of termination.
  2. [223]
    The Contractor claims that the time for rectification of any issue with the air-conditioning had not expired.  Progress claim 27A sets out that the air-conditioning work was 80% complete.[132]  Mr Burgess assessed this work as 53% complete.[133] Mr Burgess’ evidence[134]is that he later assessed the costs to complete this work at $53,750 (excl GST) at the time of termination. 
  3. [224]
    I accept that the works were incomplete but that does not necessarily exclude a finding that they were defective as well.  Mr Burgess’ evidence is that in June 2018 he assessed the costs to complete this work including rectification costs at $127,600 (excl GST), an increase of $73,850 (excl GST) over his February 2018 assessment.[135]
  4. [225]
    Dr Ng gave evidence of receiving correspondence from a contractor, which set out observations and recommendations.[136]  That contractor did not give evidence in this proceeding as to the nature of the claimed defects nor why they should be properly regarded as defects as distinct from incomplete works.  No clear evidence to this effect was given by any other relevant expert in this proceeding.   In the absence of clear independent expert evidence, I am not satisfied that the Contractor’s work was defective in this respect at the time of termination.   

Failing to hold the current, active and appropriate licence to perform the works under the Contract

  1. [226]
    I am not satisfied, on the evidence before me, that the Contractor was in breach of this obligation at the time the December Notice was given and if I am wrong on that, I am not satisfied that the breach as articulated was a substantial breach. 
  2. [227]
    The Homeowners rely upon a failure to hold a current, active and appropriate licence to perform the works under the Contract.  In this regard they refer to attendance on site of an unsupervised apprentice carpenter.   The Contractor denied there was a lack of supervision and confirmed it would comply with supervision requirements.
  3. [228]
    There is little evidence of what work the apprentice was alleged to have performed unsupervised.  Even if the Contractor was in breach, there is insufficient evidence, upon which I can rely, to find that any such breach was of such consequence that it was a substantial breach.

Failing to comply with continuous indemnity provided by clause 11.1 of the Special Conditions of Contract

  1. [229]
    I am not satisfied on the evidence before me that the Contractor was in breach of this obligation at the time the December Notice was given.
  2. [230]
    The Contractor contends that it was not liable to indemnify the Homeowner for any costs incurred.
  3. [231]
    The Homeowners contend that the Contractor had failed to comply with the indemnity provided by clause 11.1 of the special conditions relating to legal costs in relation to the P&E Court appeal and their dispute with the Contractor.  The Contractor disputed that this constituted a substantial breach.
  4. [232]
    Clause 11.1 of the special conditions provides:

The Contractor shall continuously indemnify the Owner against…. cost… which the Owner pays, arising directly or indirectly out of or in connection with:

  1. breach of this contract;

…..

arising out of or as a consequence of the carrying out of work under this Contract, but the indemnity shall be reduced proportionally to the extent that the act or omission of the Owner or others for whom it is directly responsible may have contributed to the injury, death, or damage.

  1. [233]
    There is little evidence in relation to this claimed breach.  The Contractor contends that it has never been provided with an invoice evidencing the costs claimed. No such evidence was before me.  There is insufficient evidence before me to be satisfied that the Contractor was in breach of this obligation as of 19 December 2017.

Summary

  1. [234]
    Although I am not satisfied that all the claimed breaches have been established on the balance of probabilities in this proceeding, I find that the Contractor was in substantial breach of the Contract as of 19 December 2017 and the breach was not remedied within 10 business days. I find that the Homeowners were entitled to terminate the Contract by notice on 8 January 2018.

Repudiation

  1. [235]
    I find that the Contractor repudiated the Contract and that the Homeowners accepted the repudiation and properly terminated the Contract on 8 January 2018.[137]
  2. [236]
    The Homeowners contend that, even if they have not established an entitlement to terminate through the issuing of Notices to Remedy Breach, they are entitled to terminate because the Contractor repudiated the Contract. 
  3. [237]
    Strong grounds are needed to support unilateral termination of a contract.[138]
  4. [238]
    The Contractor submits that the Homeowners were in substantial breach of the Contract and therefore were not entitled to terminate at law. I accept that a party who is in breach of a term, which gives the other party the right to terminate, has no right to terminate a contract.[139] I also accept that a party who is not ready, willing and able to perform the contract has no right to terminate for breach by the other party even if that breach would otherwise justify termination.[140]
  5. [239]
    As at the date of termination, 8 January 2018, I find that the Homeowners were not in substantial breach of their obligations, which precluded them from relying upon the Contractor’s breaches to terminate the Contract and that they were ready and willing to complete the Contract.[141]   
  6. [240]
    If I am wrong in relation to my finding that the Homeowners were not in substantial breach under the Contract due to the amount of progress claim 27A being deemed to be owing in the absence of the Homeowners disputing it by 19 December 2017, I consider whether the failure to dispute prevents the Homeowners from terminating the Contract upon a repudiation.  The Contractor submits that equity may intervene where the Homeowners failed to strictly comply with the requirements of the Contract.[142] For the reasons set out earlier, I find that in the absence of the Contractor complying with clause 19 itself in making the claim and clearly putting the Homeowners on notice that it required strict compliance, the Contractor ought not be permitted to rely upon the Homeowners failure to dispute the progress claim strictly in accordance with the terms of the Contract.  In those circumstances, any such breach by the Homeowners is not one which entitled the Contractor to terminate and therefore does not invalidate the Homeowners’ acceptance of the Contractor’s repudiation.    
  7. [241]
    A contract may be repudiated if one party evinces an intention no longer to be bound by the contract or shows that it intends to fulfil the contract only in a manner substantially inconsistent with its obligations and not in any other way.[143] There may be valid termination on any available ground even if it was not relied upon at the time of termination.[144]
  8. [242]
    The Homeowners particularly point to the requirement by the Council to demolish the curtainwall even though the true extent of the ‘defect’ was not known until after termination.  The P&E Court order was not made until after the Homeowners purported to accept the Contractor’s repudiation.
  9. [243]
    As A/Senior Browne (as she then was) stated:[145]

More than one breach that, when viewed together, indicate an intention to no longer be bound by the contract.

  1. [244]
    Mr De Marco conceded that, on the whole, the Contractor had not followed the contract terms for claiming variations and EOTs and that most of the claims for variations and EOTs were significantly out of time.  His oral evidence was that he was aware of the terms of the Contract, which reflected the Contractor’s obligations under the QBCC Act, but essentially chose not to follow them.  Mr De Marco’s oral evidence is that he habitually does not follow such contract terms. In addition to the usual terms, the Contractor had agreed to special conditions,[146] which ought to have put it on notice of the importance the Homeowners placed on timely documentation and the need to follow the contract terms.
  2. [245]
    The Contractor’s breaches of contract viewed collectively are evidence that the Contractor was unwilling to be bound by the terms of the Contract and that the Contractor intended to fulfil the contract only in a manner substantially inconsistent with its obligations and not in any other way.
  3. [246]
    As referred to earlier at [145] the Contractor was not entitled to refuse to perform the staircase work.  The Contractor’s refusal to follow the engineer’s instructions and build the staircase is evidence that the Contractor was unwilling to be bound by the terms of the Contract.

Payment demand and suspension of the works

  1. [247]
    The Contractor made claims for payment to which it was not entitled, made demands for delay damages when it was expressly excluded by the Contract and suspended the works when not entitled to do so and failed to accelerate the works after it withdrew the suspension.  This conduct demonstrates that the Contractor was unwilling to be bound by the terms of the Contract.
  2. [248]
    On 24 November 2017 the Contractor by its legal representatives demanded payment of $545,610.21[147]to avoid the Contractor ‘being forced to suspend works’.  The letter did not clearly set out how the amount demanded was calculated but appeared to be a demand for payment of amounts incurred by the Contractor including in respect of the curtainwall and amounts in relation to variation 1 relating to the curtainwall, which work was illegal as the Council had refused the DA, which included the curtainwall on 14 August 2017. The claim was also for noncompliant variations.  The claim was not a progress claim under the terms of the Contract.  The amount claimed was not consistent with progress claim 26 dated 17 November 2017.[148] 
  3. [249]
    On 28 November 2017 the Contractor stated in its email that it would be stopping work until the balance of the purported outstanding funds totalling $545,610.21 were paid.[149] 
  4. [250]
    As set out earlier at [55] the Contract did not entitle the Contractor to suspend the works even if amounts were unpaid, which were payable.  In his oral evidence Mr De Marco conceded that the Contractor issued a Notice of suspension when it was not entitled to do so.  The Homeowners contend, and I accept, that this conduct is evidence that the Contractor was unwilling to be bound by the terms of the Contract.
  5. [251]
    On 23 December 2017 the Contractor claimed delay damages in the amount of $312,447.41.[150] During his oral evidence, and despite being afforded the opportunity to review the Contract during the lunch break, Mr De Marco was unable to identify any provision of the Contract, upon which the Contractor relied to claim delay damages. By special condition, general condition clause 23.7 of the Contract was inserted.  It expressly excluded a claim for delay damages resulting from any delay or disruption from any cause.  The Contractor’s conduct in making such a claim is evidence that the Contractor was unwilling to be bound by the terms of the Contract. 
  6. [252]
    On 4 January 2018 the Contractor disputed the assessment of progress claim 27A, claimed it was entitled to an adjustment in its favour of $550,000 and demanded payment of progress claim 27A.[151] As set out earlier, no amount was payable in respect of progress claim 27A.
  7. [253]
    The Homeowners contend, and I accept, that the delay in undertaking the works was so significant that it was a repudiation of the Contract as well as a substantial breach under clause 26.  They say and I accept that the excessive delay demonstrated that the Contractor was unable to diligently progress the works.
  8. [254]
    The Contractor undertook works in connection with the curtainwall, which were ultimately illegal and ordered to be demolished in breach of its warranty that the works will be carried out in accordance with all relevant laws and legal requirements.[152]
  9. [255]
    In view of my earlier findings in relation to breaches by the Contractor, I am satisfied that the Contractor’s conduct, viewed as a whole, would convey to a reasonable person in the situation of the Homeowners renunciation either of the Contract as a whole or of fundamental obligations under it by demonstrating an intention to fulfil the Contract only in a manner substantially inconsistent with the Contractor’s obligations and not in any other way.

What orders are appropriate?

  1. [256]
    I declare that the Homeowners properly terminated the Contract. The correct and preferable decision is to set aside the Decision and return the matter to the QBCC for reconsideration with a direction that the Homeowners had properly terminated the Contract at the default of the Contractor.
  2. [257]
    The Homeowners contend that I should set aside the Decision and substitute it for a decision that the Homeowners claim against the SIS is accepted.
  3. [258]
    The central focus of this proceeding was whether the Homeowners properly terminated the Contract.[153]
  4. [259]
    As referred to earlier at [20] payment for loss is subject the terms of the Policy.
  5. [260]
    Clause 1.7 of the policy provides that the QBCC is only liable for loss under this Part where the Insured has properly terminated the contract with the contractor within two years from the date of payment of the insurance premium or the date of entering into the contract (whichever is the earlier). There is no evidence before me as to when the insurance premium was paid. I accept that the Homeowners terminated the contract within two years from the date of entering into the contract.
  6. [261]
    Clause 7.1 of the Policy provides that the QBCC may refuse to make a payment for loss under this policy where residential construction work has been completed or rectified (as applicable) without the prior written approval of the QBCC.[154]
  7. [262]
    The evidence is that the Homeowners engaged another contractor to complete their home.   The QBCC have not addressed the Tribunal on the application of clause 1.7 or 7.1 of the Policy.  No evidence in relation to whether there was any prior written approval obtained or sought has been drawn to my attention.  I am not satisfied that I am able to make findings about whether the Homeowners’ claim against the SIS should be accepted because I am not satisfied that I am able to make findings that all the terms of the Policy have been satisfied.

Application for miscellaneous matters filed 2 April 2020

  1. [263]
    I find that the Contractor is to pay the Homeowners’ costs thrown away fixed in the amount of $6,930 (incl GST).
  2. [264]
    The Homeowners filed an Application for miscellaneous matters seeking costs thrown away in respect of an expert conclave.  The amount claimed is stated as $6,781.50[155]and $6,930[156](Costs Application).  The respondents were directed to file submissions.[157]  The Homeowners rely upon an affidavit of Julian Pryde.[158] The Contractor relies upon an affidavit of Mardee Campbell.[159]
  3. [265]
    Subsequently, the Costs Application was directed to be determined together with the final hearing.[160]  I now proceed to determine the Costs Application.
  4. [266]
    The conclave limited to the question of entitlement under progress claim 27A took place on 27 August 2019.[161]  Directions were issued for the exchange of a draft joint report and exchange of amendments to it between the experts and for the filing of an agreed joint report by Mr Burgess.  The Homeowners say Mr Burgess was unable to comply as the Contractor’s expert failed to provide him with any amendments to the draft report.   
  5. [267]
    After the conclave, the Tribunal directed that the Contractor was not permitted to rely upon the evidence of the expert, who attended the conclave on its behalf and vacated the direction for the filing of an agreed joint report.[162]
  6. [268]
    The Homeowners contend that the consequence of the events was that they have incurred the unnecessary cost of their expert preparing for and attending the conclave and drafting a joint report.  They say that it is in the interests of justice that their costs be paid.
  7. [269]
    The Contractor submits that both parties should bear their own costs or alternatively the Contractor should pay costs on the District Court scale on a standard basis as agreed or assessed.
  8. [270]
    The evidence is, and I accept, that:
    1. the Contractor was of the view that there was no utility in progressing a joint report where ‘less than a handful of minor items were agreed’.[163]
    2. the Contractor’s expert advised Mr Burgess that he had been instructed to do no further work until advised otherwise.[164]
    3. on or by 14 October 2019, the Contractor terminated its expert’s engagement.[165]
  9. [271]
    The purpose of a conclave is for the experts to attempt to clarify any areas of agreement and where there is disagreement to clarify the reasons for disagreement.[166] The purpose of setting out these matters in a joint report is to reduce the time during the final hearing for the giving of expert evidence. 
  10. [272]
    The Contractor contends that Mr Burgess’ conduct led to costs being thrown away by both it and the Homeowners and as a complete draft report was not provided so its expert was prevented from being able to meaningfully respond to the draft joint experts’ report.  I accept that an incomplete draft was sent to the Contractor’s expert at least initially.  The evidence is that further in person discussions were proposed and agreed to, but they did not occur.  The evidence is that an updated draft report was sent to the Contractor’s expert, but he did not send his response to that updated draft report.
  11. [273]
    The Contractor submits that although it terminated its expert’s engagement, its expert had a duty to the tribunal to comply with the directions to provide an amended draft joint report and that both experts misunderstood their obligations.   I accept that experts have a separate duty to the Tribunal. This is not an application for the Contractor’s expert to pay costs.
  12. [274]
    The starting point is that parties are to bear their own costs,[167] however, the Tribunal may make an order requiring a party to pay all or a stated part of the costs of another party to the proceeding if the Tribunal considers the interests of justice require it to make the order.[168] In deciding whether to award costs the Tribunal may have regard to factors set out in section 102(3) of the QCAT Act,  including whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding including as mentioned in section 48(1)(a)-(g).[169]
  13. [275]
    Section 48 of the QCAT Act provides that if the Tribunal considers a party is acting in a way that unnecessarily disadvantages another party including by not complying with a Tribunal order or direction without reasonable excuse[170] then it may make an order under section 102 against the party causing the disadvantage to compensate another party for any reasonable costs incurred unnecessarily.
  14. [276]
    I am satisfied that the Contractor has acted in a way that unnecessarily disadvantaged the Homeowners.
  15. [277]
    The evidence is, and I accept, that the Contractor’s expert’s conduct resulted in non-compliance with a Tribunal direction.  I find that it is more likely than not that the Contractor’s conduct in:
    1. instructing its expert to do no further work; and
    2. terminating its expert’s engagement in these proceedings, resulted in the non-compliance with a Tribunal direction.
  1. [278]
    The Contractor did not seek to have the orders in relation to the joint report varied. 
  2. [279]
    The Contractor says it has also expended costs, which have been thrown away.  The Contractor’s decision to disengage its expert resulted in the costs it expended being thrown away. 
  3. [280]
    If the Tribunal makes a costs order it must fix costs if possible.[171]
  4. [281]
    Attached to Mr Pryde’s affidavit are itemised tax invoices for work performed by Mr Burgess which total $6,930 (incl GST).[172]  Having regard to the itemisation, I accept the costs were reasonably incurred and were thrown away.  I fix the costs in the amount of $6,930 (incl GST). 

Other Costs

  1. [282]
    As the parties were legally represented in the proceedings, it is appropriate to make directions to allow the parties to seek costs of the proceedings not addressed above.

Footnotes

[1]Statement of Reasons and indexed bundle of documents filed 9 November 2018 (collectively referred to as SOR), SOR 5, email 8 April 2016, paragraph 2.

[2]Exhibit 9.  The Formal Instrument of Agreement is dated 24 May 2016.  The Schedule for QBCC New Home Construction Contract (Schedule) at item 16 is signed by both parties and dated 25 May 2016.  A copy of part of the Contract formed SOR7.  Exhibit 9 includes the documents forming SOR7.  It also includes emails between the Homeowners and the Contractor dated 22 May 2016 (22 May 2016 Emails) as well as construction issue plans prepared by Hayes Anderson Lynch Architects Pty Ltd, construction issue structural drawings prepared by Michael Bale & Associates, structural and civil engineering consultancy and ‘BA/Tender’ issue hydraulic services drawings prepared by Hydraulic Design Solutions. 

[3]Exhibit 9.

[4]The Notice of Termination was dated 8 January 2017, being apparently a typographical error. SOR69, p 634 – p 637.

[5]Decision dated 16 July 2018 received 17 July 2018.

[6]Application to review a decision filed 13 August 2018 (Application). 

[7]The Homeowners’ submissions filed 9 April 2021, 4 May 2021 and 1 October 2021; The Contractor’s submissions filed 9 April 2021; QBCC’s submissions filed 10 September 2021.

[8]Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 6 (QCAT Act).

[9]Queensland Building and Construction Commission Act 1991 (Qld), s 86(1)(h) (QBCC Act).

[10]Ibid, s 86E.

[11]Ibid, s 87.

[12]QCAT Act, s 24.

[13]Ibid, s 20.

[14]Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58, [9].

[15]Thunder Corp Pty Ltd v Queensland Building Services Authority [2011] QCAT 56, [45]-[47].

[16]QBCC Act, s 77.

[17]Ibid, s 3.

[18][2010] QCAT 70, [23] (references omitted).

[19]SOR 1.

[20]Ibid, p 31.

[21]Ibid, p 71.

[22]SOR7; a complete copy forms Exhibit 9.

[23]SOR7, p 95, clause 2.

[24]SOR7, p 102 SC15, p 142 (item 15).

[25]Ibid, at p 99.

[26]Exhibit 4, HN11.

[27]CSC14.

[28]BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266; Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337.

[29]SOR7, p 124, item 6.  The period included 85 non-working days including weekends, RDOs, public holidays etc.

[30]Ibid, p 103.

[31]Painter, Lift shaft rough-in and Roof sheeting.

[32]Exhibit 4, HN6, p 152-p 153.

[33]Farrell Builders Pty Ltd & Anor v Hall & Anor [2018] QCAT 420.

[34]Ibid, [92].

[35]SOR7, p 99.

[36]SOR56, p 592.

[37]Clause 24.3 provides that the Homeowners were only entitled to deduct liquidated damages from the practical completion stage payment. 

[38]QBCC Act, Schedule 1B, s 40(2) and 42(1).

[39]Exhibit 4, HN 25, p 283-284.

[40]Ibid, [115].

[41]Ibid, HN 36.

[42]SOR62, p 611-612.

[43]SOR40, p 437.

[44]Exhibit 4, HN49.

[45]SOR63, p 614.

[46]Exhibit 4, HN48.

[47]SOR65, p 621.

[48]SOR65, p 619.

[49]Final submissions filed 9 April 2021, [44]–[45].

[50]SOR66, p 622.

[51]SOR69, p 634.

[52]SOR70.

[53]SOR 7, p 102 and p 141.

[54]22 May 2016 Emails.

[55]Exhibit 4, HN58.

[56]Clause 19.1(h).

[57]Clause 26.3(b).

[58]Exhibit 6, attachment PB 26.

[59]Ibid, attachment PB 27.

[60]Ibid, attachment PB27, p 422.

[61]Ibid, attachment PB28.

[62]Satisfying the obligation to submit the claim in QBCC Form 3 or similar appropriate document.

[63]Exhibit 8, attachment RPD22, p 58.

[64]Satisfying the obligation to submit the claim in QBCC Form 4 or similar appropriate written notice.

[65]Exhibit 8, attachment RPD22, p 58.

[66]Exhibit 6, attachment PB26.

[67]E.g., Progress Claim 18 dated 2 June 2017. Exhibit 6, attachment PB 17; Progress Claim 19 dated 25 June 2017, Exhibit 6, attachment PB18.

[68]SOR68, p 630.

[69]Mousa & Anor v Vukabratich Enterprises Pty Ltd & Anor [2019] QSC 49, [195].

[70]Mazelous Pty Ltd v Herberton Shire Council [2003] 1 Qd R 174, 182-183; Allen & Taylor v Queensland Building and Construction Commission [2020] QCAT 63, [36].

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

[72]Stojanovski v Australian Dream Homes [2015] VSC 404, [55].

[73]Exhibit 4, HN57.

[74]Exhibit 4, HN61.

[75]Transcript 2-44, line 39.

[76]SOR 7, cl 23.1(b).

[77]Contract schedule, item 5.

[78]SOR15, p 193.

[79]EOT claimed 28 January 2017 SOR15, p 193. Accepted by the Homeowners 9 February 2017, SOR 15, p 194.

[80]SOR 16, p 196

[81]SOR18.

[82]Exhibit 4, attachment HN11 and HN9 respectively.

[83]Ibid, attachment HN7.

[84]Special conditions amending clause 23 in relation to extension of time claims; The Contract qualified the Contractor’s document 7, works programme by providing that the Contractor shall not depart from the draft works programme without the prior written consent of the Homeowners.

[85]Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303.

[86]Maynard v Goode (1926) 37 CLR 529 at 538 per Isaacs J.

[87]Exhibit 4, [26].

[88]Exhibit 7, [21]

[89]Exhibit 6, PB 29.

[90]Allen & Taylor v Queensland Building and Constriction Commission [2020] QCAT 63, [119].

[91]Exhibit 9, Document 1.

[92]SOR7, p 102.

[93]Ibid, p 99, SC1(a)(viii).

[94]Ibid, SC1.

[95]Exhibit 9, CSC17.

[96]Items 8 and 9 related to rock excavation and completing rock anchor, instal whaler beam for $40,000 cost plus 10% and $60,000 cost plus 10% respectively but no amount was included in the total of the provisional sum items.

[97]Clause 23.7.

[98]Submissions filed 9 April 2021, [45].

[99]Ibid, [44].

[100]SOR 78, p 1221.

[101]Exhibit 4, HN43, p 434.

[102]Transcript 2-30, line 45.

[103]SOR7, general conditions clause 1.1 (cc).

[104]Ibid, clause 3.1(c).

[105]Ibid, SC1(xi).

[106]Exhibit 4, HN 28.

[107]SOR11, p 170.

[108]Exhibit 4, [95].

[109]Exhibit 6, PB5.

[110]SOR22, p 217.

[111]Exhibit 4, HN30.

[112]Ibid, HN31, p 325.

[113]Ibid, HN33.

[114]SOR78, p 1379-1380.

[115]Exhibit 4, [111].

[116]SOR60, p 604-605.

[117]SOR61, p 607.

[118]SOR40, p 410.

[119]Ibid, p 417.

[120]SOR66, p 624.

[121]Exhibit 4, HN65.

[122]Exhibit 8, attachment RPD22.

[123]Exhibit 4, [175].

[124]Exhibit 6, attachment PB30.

[125]Exhibit 4, attachment HN60, p 616, p 620.

[126]Exhibit 6, PB3, PB13, PB15, PB16, PB17, PB18, PB21, PB22.

[127]Exhibit 7, [21]

[128]SOR7, general conditions clause 1.1(bb).

[129]Ibid, clause 1.1(cc).

[130]SOR54, p 585-p 589; Exhibit 4, attachment HN7.

[131][2019] QSC 49, [92].

[132]Being $68,000 of $85,000.

[133]Being approximately $45,000 of $85,000.

[134]Exhibit 6, PB29.

[135]Exhibit 6, PB30.

[136]Exhibit 4, HN 66 and HN67.

[137]Howard v Pickford Tool Co Ltd [1951] 1 KB 417 at 421.

[138]Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at 148.

[139]Roadshow Entertainment Pty Ltd v ACN 053006269 Pty Ltd Receiver & Manager Appointed (formerly CEL Home Video Pty Ltd) (1997) 42 NSWLR 462, 479-480.

[140]Foran v Wright (1989) 168 CLR 385, 402 per Mason CJ.

[141]DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978)138 CLR 423, 433.

[142]Submissions filed 9 April 2021, [70].

[143]Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-626.

[144]Shepherd v Felt and Textiles of Australia (1931) 45 CLR 359 at 377.

[145]Cowen & Anor v Queensland Building and Construction Commission & Anor [2017] QCAT 416, [37].

[146]Clause 21.1A and clause 23.1A.

[147]SOR46, p 466.

[148]Exhibit 6, PB25.

[149]SOR40, p 440-p 441.

[150]Exhibit 4, HN59, HN60.

[151]SOR52, p 557.

[152]SOR7, clause 3.1(c).

[153]The Contractor’s submissions filed 9 April 2021 at [26] stated this was the sole issue.

[154]SOR1, p 66.

[155]Costs Application, [2]. 

[156]Ibid, [28].

[157]The Contractor’s submissions were filed 28 August 2020.  On 13 August 2020 the QBCC advised it made no submissions in relation to the Costs Application.

[158]Filed 2 April 2020.

[159]Filed 26 August 2020.

[160]Directions 28 January 2021.

[161]Direction 4 made 12 March 2019.

[162]Direction made 23 October 2019.

[163]Affidavit Julian Pryde, attachment JGP4, email 17 September 2019.

[164]Ibid, attachment JGP9, text message 4 October 2019.

[165]Ibid, [15].

[166]QCAT Practice direction 4 of 2009.

[167]QCAT Act, s 100.

[168]Ibid, s 102(1).

[169]Ibid, s 102(3)(a).

[170]Ibid, s 48(1)(a).

[171]Ibid, s 107.

[172]Affidavit Julian Pryde, attachment JGP13.

Close

Editorial Notes

  • Published Case Name:

    Yeo & Anor v Queensland Building and Construction Commission & Anor

  • Shortened Case Name:

    Yeo v Queensland Building and Construction Commission

  • MNC:

    [2023] QCAT 367

  • Court:

    QCAT

  • Judge(s):

    Member Deane

  • Date:

    11 Sep 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
4 citations
Jump To
Cite 1 - [2020] QCAT 63
Cite 2 - [2020] QCAT 63
Cite 3 - [2020] QCAT 63
Cite 4 - [2020] QCAT 63
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
2 citations
Jump To
Cite 1 - (1977) 180 CLR 266
Cite 2 - (1977) 180 CLR 266
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 C.L R. 337
2 citations
Jump To
Cite 1 - (1982) 149 C.L R. 337
Cite 2 - (1982) 149 C.L R. 337
Cowen v Queensland Building and Construction Commission [2017] QCAT 416
2 citations
Jump To
Cite 1 - [2017] QCAT 416
Cite 2 - [2017] QCAT 416
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 C.L.R 423
2 citations
Jump To
Cite 1 - (1978) 138 C.L.R 423
Cite 2 - (1978) 138 C.L.R 423
Farrell Builders Pty Ltd v Hall [2018] QCAT 420
2 citations
Jump To
Cite 1 - [2018] QCAT 420
Cite 2 - [2018] QCAT 420
Foran v Wight (1989) 168 CLR 385
2 citations
Jump To
Cite 1 - (1989) 168 CLR 385
Cite 2 - (1989) 168 CLR 385
Hometeam Constructions Pty Ltd v McCauley (2005) NSWCA 303
2 citations
Jump To
Cite 1 - (2005) NSWCA 303
Cite 2 - (2005) NSWCA 303
Howard v Pickford Tool Co Ltd [1951] 1 KB 417
2 citations
Jump To
Cite 1 - [1951] 1 KB 417
Cite 2 - [1951] 1 KB 417
Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58
2 citations
Jump To
Cite 1 - [2010] QCATA 58
Cite 2 - [2010] QCATA 58
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115
2 citations
Jump To
Cite 1 - (2007) 233 CLR 115
Cite 2 - (2007) 233 CLR 115
Laidlaw v Queensland Building Services Authority [2010] QCAT 70
2 citations
Jump To
Cite 1 - [2010] QCAT 70
Cite 2 - [2010] QCAT 70
Maynard v Goode (1926) 37 CLR 529
2 citations
Jump To
Cite 1 - (1926) 37 CLR 529
Cite 2 - (1926) 37 CLR 529
Mazelow Pty Ltd v Herberton Shire Council[2003] 1 Qd R 174; [2002] QCA 119
2 citations
Jump To
Cite 1 - [2003] 1 Qd R 174
Cite 2 - [2003] 1 Qd R 174
Mousa v Vukobratich Enterprises Pty Ltd [2019] QSC 49
3 citations
Jump To
Cite 1 - [2019] QSC 49
Cite 2 - [2019] QSC 49
Cite 3 - [2019] QSC 49
Roadshow Entertainment Pty Ltd v C.E.L. Home Video Pty. Ltd. (1997) 42 NSWLR 462
2 citations
Jump To
Cite 1 - (1997) 42 NSWLR 462
Cite 2 - (1997) 42 NSWLR 462
Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359
2 citations
Jump To
Cite 1 - (1931) 45 CLR 359
Cite 2 - (1931) 45 CLR 359
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
Stojanovski v Australian Dream Homes Pty Ltd [2015] VSC 404
2 citations
Jump To
Cite 1 - [2015] VSC 404
Cite 2 - [2015] VSC 404
Thunder Corp Pty Ltd v Queensland Building Services Authority [2011] QCAT 56
2 citations
Jump To
Cite 1 - [2011] QCAT 56
Cite 2 - [2011] QCAT 56

Cases Citing

Case NameFull CitationFrequency
Yeo & Anor v Queensland Building and Construction Commission [2025] QCAT 905 citations
1

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