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Buuts and Sherden v G & B Patios Pty Ltd QCAT 424
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Buuts and Sherden v G & B Patios Pty Ltd  QCAT 424
danielle buuts and rick sherden
g & b patios pty ltD
23 October 2023
25 September 2023
Member S M Burke
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – termination of contract – failure to comply with plans and specification in contract – rectification of defective works – rectification costs and cost to complete contract works – demolition and rebuild – whether necessary and reasonable
Bellgrove v Eldridge (1954) 90 CLR 613
Tabcorp Holdings Pty Ltd v Bowen Investments Pty Ltd  HCA 8
APPEARANCES & REPRESENTATION:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”).
REASONS FOR DECISION
- The Applicants, Danielle Buuts and Rick Sherden, filed an application for a domestic building dispute on 1 December 2021. Subsequently, directions of the Tribunal have been delivered and material provided by the Applicants in the way of statements and supporting material. An amended application was filed on 8 August 2022 with further material provided by the Applicants in support of their claim including a detailed statement of events by Ms Buuts and reports and material in support of the Applicants’ claim for rectification costs.
- The Respondent, G & B Patios Pty Ltd, has provided material constituting the evidence on which it relies including statements by Mr Goran Trifunov (director of the Respondent), Mr Scott Jones (sales manager of the Respondent), Mr Mark Jarvisalo (project manager) and Mr Shannon McKellar (director of Garage Door Doctor Qld Pty Ltd).
- The Applicants’ claim arises out of alleged multiple issues with the works performed by the Respondent and incomplete works seeking an entitlement to rectification costs or reinstatement of the works pursuant to the contract.
- The following orders were sought by the Applicants in the amended application:
- relief from payment to the Respondent;
- the Respondent at its cost and expense remove the carport and make good;
- the Respondent refunds all money paid by the Applicants;
- the Respondent pay the Applicants’ legal costs and expenses;
- the Respondent pay interest on the money paid by the Applicants.
- By response and counter-application dated 17 February 2022, the Respondent sought payment of an amount of $6,283.90 by way of damages for breach of contract or as a debt owing under the contract together with interest and costs. The Respondent claims, in the alternative, the same amount in quantum meruit.
- It is noted that the Applicants have commenced the proceedings, as owners, but that the contract was signed by Ms Buuts only and not by the male Applicant, Mr Sherden. For the purpose of my reasons, I will refer to the Applicants rather than to Ms Buuts only unless otherwise specifically in relation to one individual.
- On 8 October 2020, the Respondent’s representative, Scott Jones, attended at the Applicants’ property at 18 Emperor Grove, Upper Coomera Queensland (“the property”) to provide a quotation for an open carport. Lengthy discussions ensued during the meeting regarding the Applicants’ requirements and options available for the structure. These discussions have been tabled in detail in the statement provided by the Applicants and the statement of Scott Jones. Their versions differ in material respects.
- The structure to be constructed was a free-standing carport open at the entrance with horizontal slats on either side. The patio specification sheet dated 13 October includes design concepts, colours and sizes for the structure and identifies that the structure is single story, insulated, with aluminium posts, 2 downlights with a side gate with lock and closing hinges to match the slats.
- On 13 October 2020, a Master Builders Queensland Basic Works Contract Residential (‘the contract”) was signed by Scott Jones, on behalf of the Respondent, and Ms Buuts, on behalf of the Applicants. The contract price was $17,954.00.
- On 15 October 2021, a variation document was signed by Ms Buuts, on behalf of the Applicants, and Scott Jones, on behalf of the Respondent, which entailed a change in the roof from insulated 75mm to non-insulated and the fitting of an extra gate one each side of the carport. There was a decrease in the contract price of $300.03.
- Construction of the carport commenced as agreed and by the stage of the Frame up the parties had fallen into dispute primarily in relation to the height of the carport.
- The Applicants have paid to the Respondent the deposit of $3,590.80 and the amount for Stage 2 in the sum of $5,386.20.
- The Respondent issued a claim for Stage 2 (Frame up) on the 1 February 2021 in the amount of $6,283.90 however this amount was disputed by the Applicants on the basis that the Frame up stage had not been completed and the works were defective.
Termination of the Contract
- By letter dated 2 March 2021, the solicitors for the Applicants advised the solicitors for the Respondent that the Applicants asserted that the carport constructed by the Respondent did not conform with the plans and specifications under the contract in that the minimum height of the front entrance to the carport was not 2535mm and accordingly was a major defect.
- It was also asserted that:
- the Respondent was unable or unwilling to rectify the major defect and was therefore in substantial breach of the contract;
- the Applicants were neither able to park their car comfortably under the carport nor was the carport height suitable for the installation of a panel style roller door which required a minimum clearance of 2500mm;
- as a result of the defective work, the carport was not fit for its purpose;
- the invoice for the framing stage of the works in the amount of $6,293.90 forwarded on 1 February 2023 was not paid and payment for Stage 2 of the works was not due as the works had not been completed according to the plans and specification.
- The Respondent was given 5 days to remedy the breach and raise the carport to the height indicated in the plans, being 2535mm as measured from the ground to the underside of the gutter, with the Applicants rights reserved.
- By reply dated 9 March 2021, the Respondent’s solicitors stated that:
- the left side of the ceiling height is approximately 2450mm and the centre of the carport approximately 2540mm and the right side 2650mm. Accordingly the centre of the carport meets the required height under the contract;
- there is nothing in the contract requiring the carport to allow for a landcruiser with attached roof racks in the carport;
- the carport is compliant with the contract given that the centre point of the carport measures 2540mm, being 5mm higher than minimum height asserted by the Applicants;
- the carport is functional and fit for purpose;
- the works are deemed to have reached Practical Completion on 30 January 2021when the Applicants took possession of the carport in accordance with clause 9.3 of the contract;
- the Applicants have failed to make payment of the invoice in the amount of $6,283.90 for Stage 2 of the works, being the Frame up stage, which was due on 3 February 2021;
- in the event that it is determined by a Court or tribunal that the works had not reached Practical Completion, the letter serves as a notice pursuant to clause 4.10(b) of the contract of immediate suspension of the works for a period of 5 days after the payment of the Frame up invoice is received by the Respondent;
- without admission of liability, the Respondent offered on 19 February 2021 a course of action to resolve the Applicants’ concerns regarding the height of the carport;
- the letter was a demand for payment of the amount of $6,283.90 to be paid within 5 days;
- the Respondent reserves the right to recover interest and debt collector costs.
- On 15 March 2021, the solicitors for the Applicants responded:
- disputing the measurements of the carport outlined by the letter of 9 March 2021 providing evidence that the centre of the carport was 2460mm and not the measurement of 2535mm as shown on the plans for the underside of the left-hand side of the carport;
- stating that, on 9, 12 and 15 October, the Respondent’s representative was advised that the panel style roller door would be installed at a later date by the relevant contractor;
- payment of the Frame up stage was withheld and Practical Completion had not been met on 30 January 2021;
- the Respondent has not issued a Final Progress claim for the purpose of the Practical Completion stage, being the amount of $2,693.10 nor has it provide all the materials comprising the kit as required for Stage 1 of the contract;
- that the Applicants reserve their rights to terminate the contract immediately pursuant to clause 13.2 of the contract;
- that a quotation in the sum of $16,780.00 had been obtained for the cost of rectification of the carport including removal of the carport and reinstallation of a new structure to conform with the plans and specifications;
- setting out a “without prejudice” offer to resolve the dispute.
- On 19 March 2021, the solicitors for the Respondent set out a counter-offer which was rejected by the Applicants through their solicitor on 24 March 2021.
- On 17 May 2021, the Applicants’ solicitor purported to terminate the contract effectively immediately given that the Respondent had failed to remedy its breach of contract by 7 March 2021, in accordance with the notice dated 2 March 2021.
- On 20 May 2021, the solicitors for the Respondent stated that it was their client’s position that the Applicants had no legal entitlement to terminate the contract under clause 13.2 or at all and that the termination was unlawful and amounts to a repudiation of the contract.
- The letter of 20 May 2021 further states that:
- the Applicants had taken possession of the carport and Practical Completion had been reached under the contract;
- the Applicants were in breach of contract having not paid the Stage 2 invoice for the Frame up stage;
- the works had been validly suspended by the Respondent at the time the Applicants purported to terminate the contract on 17 May 2021;
- the Respondent was not required to carry out any works during the period of a valid suspension of the works;
- the Respondent was at all times ready, willing and able to perform the contract;
- the Respondent accepts the Applicants’ repudiation of the contract and elects to terminate the contract effective immediately.
Basis for Termination of Contract – Which party was in breach of contract?
- The Respondent alleges that the Applicants unlawfully terminated the contract and that in the circumstances repudiated the contract. The Respondent accepted the Applicants’ repudiation and subsequently terminated the contract.
- It is necessary to set out the relevant clauses of the contract to assess which party was in breach of the contract and therefore which party was entitled to lawfully terminate the contract as the party not in default.
- Relevantly, the contract provides:
- Item 9 – Progress Claims (Clause 4.9)
Each progress claim must not exceed an amount directly related to the progress of Work under this contract.
Stage of Work
Works included in the Stage
% of Contract Price
Amount due (GST inclusive)
Payable withing 2 Business Days of signing contract
2nd progress payment when kit arrives
- Item 12 – Other Contract Documents
Provided by/Prepared by
Scope of Works/Quotation
- Clauses 4.8 and 4.10 relevantly provide:
4. Owner’s Obligations
4.8 The Contractor is entitled to claim payment of the Contract Price progressively on completion of the stages of work set out in Item 9 of the Schedule. The Owner must pay the Contractor the Progress Claim within the Payment Period stated in Item 11 of the Schedule.
4.10 If the Owner fails to make any payment to the Contractor within the Payment Period, the Contractor is entitled to:
- interest on the outstanding amount at the Interest Rate, payable from the due date for payment until the date of payment;
- by giving written notice to the Owner, immediately suspend the Works for a period ending five (5) Business Days after the payment is received by the Contractor;
- be paid as a debt due by the Owner, its actual costs and expenses of recovering amounts owing including debt collection, solicitors costs and related fees and expenses.
- Obligations of both Parties Upon Practical Completion
9.1 On reaching Practical Completion, the Contractor must give the Owner:
- a final Progress Claim;
- a notice stating the date the Works have reached Practical Completion;
- if the Owner claims there are minor defects or minor omissions, a Defects Document.
9.2 The Owner must pay the final Progress Claim for the Practical Completion stage before Possession of the Works and before being entitled to receive any manuals, warranties (other than statutory) or instructions applicable to the Works.
9.3 if the Owner takes Possession of the Works, or any part of the Works, when not entitled to do so under the Contract, the Works are deemed to have been completed by the Contractor free of all defects and omissions and the Owner is liable to the Contractor to pay the final Progress Payment Claim and any loss or damage arising as a result.
13.1 If either party:
- fails to make payment under the Contract within five (5) Business Days of the due date pf payment; or
- fails to comply with any of its obligations under this Contract; or
- is in substantial breach of the Contract; or
- subject to clause 13.4, becomes insolvent or takes advantage of the laws of bankruptcy,
the party not in default may give written notice to the defaulting party:
- describing the breach or breaches of the Contract by the party in default; and
- stating the party’s intention to terminate the Contract unless the defaulting party remedies the breach or breaches within five (5) Business Days after receiving the notice referred to in this clause.
13.2 If the defaulting party fails to remedy the breach or breaches stated in any notice served pursuant to clause 13.1, the party not in default, may immediately, without prejudice to any other rights or remedies, terminate the Contract by a further written notice to the defaulting party.
- For the purpose of determining which of the parties was in default first, it is necessary to identify the initial breach by the defaulting party.
- There is no dispute that the deposit and the payment of the second Progress Claim for Stage 1 was paid on time and in full in compliance with clause 4.8. of the contract. The question to be asked on the flip side is whether the works the subject of Progress Claim 2 had been completed to the stage of work set out in Item 9 of the Schedule.
- Item 9 of the Schedule specifically states that Stage 1 works include “when kit arrives”. The Applicants assert that full payment was made for Stage 1 even though all of the materials for the Works had not been delivered. There is no dispute that the slats and materials for the side gate had not been delivered to site at the time the second Progress Claim was issued.
- In response to the allegation that the Respondent was in default at this stage, Mr Goran Trifunov, director of the Respondent, asserts that the delivery of the slats and gate would form part of the works the subject of the Practical Completion stage and thus is not included in the delivery of materials for Stage 1.
- It is noted that the percentage of the Works for the Practical Completion stage is 15% with a value of $2,693.10. Curiously, Mr Trifunov claims in his statement dated 3 November 2022 that this amount is still owing by the Applicants despite any evidence that the materials have been supplied or delivered to site.
- I do not accept Mr Trifunov’s explanation that the amount for the deposit and Stage1 does not include the materials for the Works in total. The amount for the Practical Completion stage appears to be for the labour involved after the Frame up stage with the cost of materials being allowed in the Deposit and Stage 1 progress payments. This assumption is consistent with the Applicants’ evidence and with a comparison of the quotations provided in their claim for rectification costs.
- I am satisfied that the Deposit stage and Stage 1 (being Progress Claim 2) relates to the supply and delivery of materials.
- In the circumstances, I am satisfied that in breach of clause 4.8 of the contract, the Respondent made a claim for works which had not been performed (and were never performed) pursuant to the contract. The result is that the party first in default was the Respondent rather than the Applicants, as asserted by the Respondent.
- From this time onwards, the Applicants were entitled to engage the mechanism of clause 13.1 of the contract and seek to terminate the contract in accordance with clause 13.2 of the contract.
- In addition to the failure of the Respondent to “comply with its obligations under the contract” as identified as one of the bases for seeking to notify its intention to terminate the contract unless the breach was remedied, the Applicants notified the Respondent on numerous occasions, personally and through their solicitors, that the Respondent was in substantial breach of the contract in failing to complete the works in accordance with the plans and specifications.
- The most significant issue raised in relation to this substantial breach was the failure of the Respondent to erect the carport to the correct height as shown on the plans which formed part of the contract.
- The Applicants maintain that the left hand side of the carport was designated as 2535mm and that the carport height as constructed at that point is 2380mm. The shortfall is alleged to have a significant effect on the use of the carport and also the ability to install a panel style roller door at a later date.
- The Respondent’s reply to this complaint is that the contract does not require the Respondent to build the carport to this height and the height on the plans was an estimate only. Mr Trifunov further states that the measurement on the plan “was never intended to be binding on the Respondent”.
- I do not accept the evidence of Mr Trifunov in this regard and am satisfied that the obligation of the Respondent was to install the carport in accordance with the measurements identified on the plans.
- Further, it is Ms Buuts’ evidence that at the initial meeting with Scott Jones a lengthy discussion took place concerning the needs of the Applicants and the style of carport required. Scott Jones disputes Ms Buuts’ version that there was a discussion regarding the type of car owned by the Applicants and the desire to install a panel style roller door at a later date. Ms Buuts also states that she identified a carport of a neighbour stating that she was interested in a similar carport with minor changes which were discussed. Scott Jones’ recollection was contrary to Ms Buuts’ record in that he was of the view that the Applicants did not want a carport similar to that installed on the opposite neighbour’s property. I accept the evidence of Ms Buuts where it differs from Scott Jones.
- In the circumstances, I am satisfied that the contract was lawfully terminated by the Applicants by the letter dated 17 May 2022 from the Applicants’ solicitors to the Respondent.
Deemed Practical Completion of the Works and Suspension of the Works
- In addition to the alleged failure to pay for Stage 2 Frame up of the contract as a basis for lawful termination of the contract, the Respondent alleges that the works were deemed to have been completed by the Respondent free of all defects and omissions and the Applicants were liable to pay the final Progress Claim and any loss or damage arising as a result. The Respondent relies upon clause 9.3 of the contract.
- The problem with this argument is that it ignores clause 9.1 of the contract which provides:
“On reaching Practical Completion, the Contractor must give to the Owner:
- the final Progress Claim;
- a notice stating that the works have reached Practical Completion; and
- if the owner claims there are minor defects or minor omissions, a Defects Document.”
- No final Progress Claim was issued at any time. No works the subject of the stage identified as Practical Completion have been carried out. There is no evidence that the Applicants were not entitled to take possession of the works once a lawful termination of the contract had occurred.
- The Respondent maintains that Practical Completion was reached on 30 January 2021. There is no evidence to this effect.
- Further, the Respondent alleges that the works were validly suspended by its solicitor’s letter dated 9 March 2021 pursuant to clause 4.10(b) of the contract and that in the circumstances it was not required to carry out the remainder of the works until the Applicants had remedied their breach by making payment for the Frame up stage of the works.
- This argument ignores the fact that the Respondent itself was in breach of its obligations under the contract as at 9 March 2021 as it had issued a Progress claim for works which it had not carried out. The materials, being the whole kit for the carport, had not been delivered as required under the contract in Schedule Item 9. The Applicants had paid the Respondent for this stage of the works and thus were not in breach of its obligations at that stage. The Respondent continued the breach and additionally was in substantial breach of the contract in installing a carport which was non-compliant with the plans and specifications.
Other Defects additional to the Non-compliance with the Plans
- On or about 13 September 2021, an inspection of the property was carried out by an inspector from the Queensland Building and Construction Commission (“QBCC”) to assess the list of complaints submitted by the Applicants.
- The list of complaints included:
- Item 1 – incorrect height of the carport;
- Item 2 – leaking through where sheets not joined properly;
- Item 3 – silicone around house mot done properly;
- Item 4 – damage to ceiling roof sheet near house gutter;
- Item 5 – swarf damage to carport roof and gutter.
- A QBCC initial inspection report was provided on 22 October 2021 by Mr Steve Jeynes, with the following findings:
- Item 1 – The measurement of the left hand site of the patio height was approximately 2385mm (underside of the gutter – adjacent to the front downpipe). The patio roofing system has been completed to an acceptable standard (fit for purpose) and only had minor non-structural defects as per complaint items 3, 4 and 5.
- The QBCC determined not to issue a direction to rectify to the licensee due to the fact that the solicitors for the builder had informed the owners that they had unlawfully terminated the contract.
- The dispute regarding the height of the carport was a contractual issue and thus the QBCC was not able to adjudicate such an issue.
- Item 2 – There was no evidence of roof sheets not being installed as per the manufacturer’s specification. The roof was assessed with a ladder and there was no evidence of the roof sheets not being overlapped or the roof screws being loose.
- Item 3 – There was evidence of the silicone applied around the top of the gutter has not been completed or finished to an acceptable standard.
- Item 4 – There was evidence of minor dent to the underside to one roof sheet.
- Item 5 – There was evidence of swarf to the roof system, which is clear indication the licensee did not clean correctly after the roof install.
- On 15 November 2021, the QBCC decided to approve a scope of works for the rectification of items 3, 4 and 5. This decision was confirmed in an internal review on 6 January 2022.
- In a Scott Schedule dated 27 May 2022, the Applicants set out the rectification works alleged to be required and the costs claimed for each:-
- Incomplete/incorrect height of carport – $14,157.00 per Scally Projects quotation or alternatively $12,854.00 per Homestyle quotation.
- Incomplete side slats, gates posts – $9,129.41 as per Applicants’ estimate or alternatively $8,776.00 per Scally Projects quotation.
- Defective silicone, gaps around downpipe/roofing sheet inferior/swarf damage/leaking of roof sheets – $2,000.00 including refund for inferior sheeting material or $3,850.00 for replacing all sheets.
- Council and Certifier fees expired – $2,346.00.
- The Respondent says that all these defects are minor and would have been remedied prior to completion of the works.
- In addition to the defects set out in the Applicants’ Scott Schedule, the Applicants have raised further defects in the amended application. These include:
- defective footings;
- incorrect gradient of the roof to comply with Gold Coast City Council required gradient of 1 in 20.
- For the latter, the Applicants rely upon a Contour Survey plan prepared by Arnold Development Consultants on 27 July 2022 which shows that the approximate gradient is 1:12 which is more than 1:20 as required.
- For the non-compliance of the footings, the Applicants rely upon the report of Mr Jed Rogers, to which I refer below. Mr Rogers says:
“There is no evidence that items 6 and 7 in the general notes of the carport manufacturer, Ausdeck Engineering and Constructions Manual, have been complied with. The failure by the Respondent means that the integrity of structure is seriously compromised especially in strong wind conditions. Exhibited hereto and marked with the letter “E” is a true copy of the Decision Notice-Approval with a copy of the Ausdeck Engineering and Construction Manual.”
- Given the reasons above that the structure will require demolition and rebuilding in order to comply with the plans and specifications of the contract, it is not necessary for the Tribunal to address the additional allegations of defects in the works.
- The Applicants’ claim is that the height of the structure is 2380mm instead of the height of 2535mm as stated on the plans.
- The Respondent denies this calculation based on its own measurements.
- No independent expert report has been provided by the Respondent to support its contentions nor does the Respondent provide any evidence supporting its measurement figures such as photographic evidence.
- The Applicants rely upon three reports to support the assertion that the roof height is not compliant with the plans, namely:
- inspection report from the Queensland Building and Construction Commission (“QBCC”) dated 22 October 2021;
- the report dated 29 August 2022 prepared by Baxter Consulting Engineers (“the Baxter report”);
- report by building inspector, Mr Jed Rogers, identified as Standard Property Report dated 28 July 2022.
- The QBCC report states that:
“there was evidence of the approved drawings showing a height dimension of 2535mm and the left hand side of the patio height was approx. 2385mm (underside of gutter – adjacent to the front downpipe).
- The QBCC report further opined that:
“given the licensee can only construct the roofing system to suit the contours of the current driveway height and land slope and is also governed by the height of the current house height (fascia). The carport roof pitch has been installed at a 2 degrees (as informed by the licensee during site inspection). It seems going by the height restrictions the licensee had to work with, the height of the 2535mm was not going to possible under this circumstances.
The patio roofing system has been completed to an acceptable standard (fir for purpose) and only had minor non-structural defects (as per complaint items 3, 4 & 5).
The QBCC has identified that it is not fair or reasonable to issue the licensee a Direction to Rectify, based on the circumstances and given the height issue has been classified as a contractual issue and not a defect. The item has been identified as a contractual issue.”
- The Baxter report concluded:
- the plans forming part of the contract between Ms Buuts and the Respondent provided for the following:
- (i)a quantity of six posts to the carport roof system being three on each side of the carport structure;
- (ii)clearance height of 2535mm at the front left side of the carport;
- only four posts were installed to support the carport roof system;
- the true clearance height provided to the underside of the roof system was measured to be 2305mm on the left side front of the carport being 230mm less than the clearance stated on the plans;
- the measured height to the underside of the gutter system to the front of the carport was 2385mm being 150mm less than the distance stated on the plans;
- the connection of the carport roof system into the roof system to the front of the garage area of the residence is inadequate;
- it is required that the carport roof system be reconstructed as a freestanding structure, separated from the residence, strictly in accordance with an engineer approved design;
- the observed steel member continuing across the front of the carport was not adequate to support the proposed installation of an electric panel lift door;
- inadequate footing construction was provided to the carport structure in that there was no footing or thickening beam provided to the base of the post at the front left corner of the carport;
- not all six posts as shown on the plans were present at the time of the inspection on 25 August 2022;
- no reeords identifying the size and depth of the attempted footing construction to the base of the post at the front right corner of the carport.
- the plans forming part of the contract between Ms Buuts and the Respondent provided for the following:
- The Baxter report also observed that inadequate construction of the existing carport structure at the time of inspection presents the significant risk of hazard of catastrophic failure and wind borne debris during a Wind Load event.
- The Respondent refutes the Baxter report and sets out its response to each of the issues raised in the evidence provided by Mr Trifunov. Relevantly, at page 14 of Mr Trifunov’s statement, no evidence is provided which supports the conclusion that the carport height on the left side of the carport should have been less that the measurement stated on the plans, namely 2535mm from the underside of the gutter.
- A further affidavit was provided on behalf of the Applicants by a registered builder and Gold Coast building inspector, Mr Jed Rogers, who undertook an inspection of the carport on 28 July 2022 and produced a report entitled “Standard Property Report”.
- Mr Rogers concluded that:
- the roof pitch is 2 degrees;
- a roof with a 2 degree roof pitch will fall 209.6mm over 600mm;
- the maximum carport floor gradient allowed by Gold Coast City Council is 1:20 (2.86 degrees);
- at 1:20 the carport floor will only fall 299.7mm over 6450mm;
- given the minimum fall on the new carport roof is 2 degrees and maximum fall of the carport floor is 1:20, the maximum ceiling height which can be achieved at the front of the carport can only be 90.1mm more than the eave height;
- as the eave height is 2210mm the maximum achievable height at the opening is 2300.1mm;
- as the front beam of the carport is 150mm deep the maximum clearance which can be achieved at the front of the carport is 2150.1mm;
- carport floor gradient as drawn to achieve the nominated ceiling height of 2535mm must be 1:12. This has been confirmed by the contour survery
- The Standard Property Report outlined a number of major defects in Part D of the report including photographic evidence of the roof pitch, height of the carport being 2380mm rather than 2535mm as shown on the plans, lack of footings for post on left hand side and incorrect measurement of the external corner of the front post from the house fascia being 5820mm instead of 6000mm.
- I accept the evidence of the Baxter report particularly in the absence of any independent expert opinion to the contrary provided on behalf of the Respondent.
Damages for Breach of Contract
- For the reasons above, I have considered that the Applicants are entitled to damages for breach of contract.
- It is a well-established rule that, subject to the qualification identified by the High Court in Bellgrove v Eldridge (1954) 90 CLR 613:
“the measure of damages recoverable by the building owner for the breach of a building contract is, it is submitted, the difference between the contract price of the work or building contracted for and the cost of making the work or building conform to the contract, with the addition, in most cases, of the amount of profits or earnings lost by the breach.”
- The High Court in Bellgrove v Eldridg stated at p. 618:
“But the work necessary to remedy defects in a building and so produce conformity with the plans and specifications may, and frequently will, require the removal or demolition of some part of the structure. And it is obvious that the necessary remedial work may call for the removal or demolition of a more or less substantial past of the building. Indeed – and such was held to be the position in the present case – There may well be cases whether the only practicable method of producing conformity with plans and specifications is by demolishing the whole of the building and erecting another in it place. In none of these cases is anything more done than that works which if required to achieve conformity and the cost of the work, whether it be necessary to replace only a small part, or a substantial part, or, indeed , the whole of the building is, subject to the qualification which we have already mentioned and to which we shall refer, together with any appropriate consequential damages, the extent of the building owner’s loss.”
- The qualification to which the rule is subject is that, not only must the work to be undertaken be necessary but it must also be a reasonable course to adopt.
- As to what work is both “necessary” and “reasonable” is a question of fact in each case.
- I am satisfied that no evidence has been produced by either party to provide a solution which would involve only partial demolition and rebuilding of only part of the carport. No evidence has been provided by the Respondent to support the contention that lifting the offending side of the carport would achieve the desired result of a carport in compliance with the plans and specification.
- I am satisfied that the only reasonable result and also necessary solution to achieve conformity with the plans is to demolish the carport and replace it.
- The Applicants have provided two quotations for the necessary works for replacement of the works provided under the contract to date. Those works do not include the slats and gates as such work had not been carried out at the time of termination of the contract.
- The first quotation is from Scally Projects – quotation 2021548 dated 15 March 2021. It sets out the works required to install a carport without slats and gates and includes the cost of removing the existing carport. It is noted that the existing materials cannot be used in order to achieve the height required by the original plans as amended to attain compliance.
- The Scally Projects quotation is for the sum of $16,780.00 incl GST with the preliminary works component of plans and certification being $1,680.00 incl GST and the carport construction being $15,100.00 incl GST.
- The second quotation is provided by Homestyle Living Outdoors for the sum of $14,200.00 for the construction of a custom designed carport without slats and gates. It does not appear to include removal of the existing carport but includes supply of plans and elevations, standard building permit, relaxation permits and certification and QBCC insurance.
- The third quotation is another quotation from Scally Projects dated 26 May 2021 which comprises the demolition of the existing structure and rebuilding of the carport with slats and gates as required under the original scope of works. The quotation for demolition of the structure and rebuilding is in the sum of $25,280.00.
- It is this third quotation which allows an assessment of the difference between the contract price and the cost of demolition and rebuilding within the scope of works of the contract.
- No evidence has been provided by the Respondent to assist in assessing the reasonable rectification costs which would be incurred to demolish and rebuild the carport. Thus I have no competing expert report or quotation to consider for the purpose of assessing the Applicants’ damages.
- I am of the view that it is preferable to compare the quotation applicable to the whole of the contract scope of works with the contract price rather than a comparison of the quotation for the scope of works at the time of termination of the contract and endeavour to assume that the Practical Completion stage included both the costs of materials and installation of the slats and gates as asserted in the Respondent’s evidence.
- The calculations below take into account that the Respondent has been paid the amount of $8,976.00 and that the Applicants would have incurred the cost of $17,954.00 had the breach not occurred.
- Thus, the damages to which the Applicants are entitled are calculated as follows:
Cost to demolish and rebuild to ensure compliance with the plans and specifications - $25,000.00.
Cost incurred to date - $8,976.00
Amount Applicants would have paid under the contract - $17,954.00
TOTAL OWED: $16,302.00
- The Applicants have made a claim for all the costs incurred in engaging solicitors in relation to the dispute between the parties. Given that neither party was given leave to be legally represented in the hearing, I do not propose to make any order as to costs. In any event, in the usual course, the Applicants would not be entitled to their costs on an indemnity basis and I have no material on which to rely to determine the Applicants’ costs on the standard basis.
The Respondent’s Counter-application
- The Respondent’s counterclaim filed on 17 February 2022 sought the following relief:
- the sum of $6,283.90 be paid by the Applicant to the Respondent by way of damages for breach of contract or as a debt owing under the contract;
- alternatively, the sum of $6,283.90 assessed on a quantum meruit basis;
- debt collection costs and Legal costs on an indemnity basis or in the alternative on the standard basis;
- interest on the amount owed at 10% per annum.
- Given my reasons above that the Respondent was in breach of contract and thus the Applicants are entitled to the damages which I have assessed above, I have formed the view that the Respondent has no entitlement to any amount by way of damages for breach of contract.
- Further, given that the carport frame installed by the Respondent was non-compliant with the plans and specifications, the Respondent has no entitlement to payment as a debt owing under the contract or on the basis of quantum meruit.
- In my assessment of the Applicants’ damages, I have taken into consideration that the Applicants would have incurred the cost of the Frame up stage as part of the contract price.
- Based on the reasons provided above, the Tribunal determines that the following orders should be made:
- The Applicants’ application is allowed.
- The Respondent is to make payment to the Applicants the sum of $16,302.00, being the reasonable amount to be incurred by the Applicants by way of damages for breach of contract.
- The Respondent’s counter-application is dismissed.
 Hudson on Building Contracts, 7th ed. (1946) at p. 343; Thornton v Place  Eng R 767; Chapel v Hickes (1833) 2 C&M 214; H. Dakin & Co. v Lee (1916) 1 KB 566; Pearson-Burleigh Ltd v Pioneer Grain Co (1933) 1 DLR 714; Hardwick v Lincoln (1946) NZLR 309.
 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd  HCA 8.
- Published Case Name:
Buuts and Sherden v G & B Patios Pty Ltd
- Shortened Case Name:
Buuts and Sherden v G & B Patios Pty Ltd
 QCAT 424
Member S M Burke
23 Oct 2023