Kroll v Kovac[2024] QCAT 143

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

Background

1. [1]
   The respondent, Mr Kovac, carried out painting of the front facing section of the applicant, Mr Kroll’s house. The email quote indicates it was to paint the roof tiles, fretwork, gutters/facer, eves, post, handrails, a screen door and the letter box for the applicant homeowner, Mr Kroll. The contract price as per an email dated 22 April 2020 was $1,850.00, requested to be paid in cash with a $1,000 deposit and $850 on completion.
2. [2]
   Mr Kroll discussed the work with Mr Kovac before agreeing to him undertaking the work and believed him to be a professional painter as per his business card. Mr Kroll states Mr Kovac told him he had painted roofs previously and would prep the roof and apply a primer and special membrane paint, and guaranteed it would last 10-15 years, commenting it would probably last 20 years.^[1]
3. [3]
   Work was completed on or around 27 May 2020 and Mr Kroll paid the $1,850 in full.
4. [4]
   As is unfortunately not uncommon, the parties adopted a somewhat relaxed approach to the formation of the agreement for the performance of the building work. No written contract was entered into by the parties and the contract is limited to Mr Kovac’s email quote for the work on 22 April 2020 and oral conversations. 
5. [5]
   Mr Kroll’s claim against Mr Kovac is for defective work as he asserts the paint started to peel in large pieces after 6 months and he first contacted Mr Kovac by phone in January 2021. At that time Mr Kovac indicated he would repaint the roof, but never attended to rectify the work.
6. [6]
   There is evidence provided by the applicant that he contacted the respondent Mr Kovac by email on 25 October 2021; 3 November 2021; 10 November 2021; 19 April 2022; 12 May 202l; and 29 June 2022 and by text message on 9 & 19 February 2022; 3, 19 and 24 April 2022; and 15 and 18 May 2022. 
7. [7]
   Mr Kroll also stated he called Mr Kovac and left multiple phone messages in 2021 and 2022. During these calls Mr Kroll alleges that Mr Kovac promised to return to repaint the roof, but never attended.
8. [8]
   In or around November 2021, Mr Kovac sent a contractor to pressure wash the roof in preparation for painting, however Mr Kovac did not attend and advised he could not paint the roof before Christmas, due to other commitments.
9. [9]
   Mr Kroll discovered after the work was completed that Mr Kovac is not a registered painter.
10. [10]
    Mr Kroll lodged a complaint with the Queensland Building and Construction Commission (‘QBCC’). On 6 June 2022 the QBCC refused to direct Mr Kovac to rectify the complaint on the basis that the work was not building work.
11. [11]
    On 16 June 2022 Mr Kroll commenced these proceedings. While not clearly articulated in the application, the claim against Mr Kovac is one based in breach of contract or negligence. Mr Kroll claims that the building work, namely the painting performed by Mr Kovac, was defective.
12. [12]
    In the initial application Mr Kroll requests Mr Kovac return and rectify the defective paint job. However, in submissions dated November 2022 Mr Kroll confirmed that given the delay and Mr Kovac’s unwillingness to correct the painting, he now seeks compensation from Mr Kovac to cover the costs to rectify the defective work, associated with the repairs and correction of the painting of the roof by a professional company of his choosing. Mr Kroll also seeks costs in relation to his $358 QCAT application fee. Mr Kroll also sought QCAT request documentation from Mr Kovac which is outside the jurisdiction of QCAT.

Statutory framework – building disputes.

13. [13]
    The relevant enabling Act is the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’).
14. [14]
    The Tribunal has jurisdiction to hear and decide building disputes;^[2] however, section 77(2) of the QBCC Act qualifies QCAT’s jurisdiction by first requiring an applicant to comply ‘with a process established by the commission to attempt to resolve the dispute’.
15. [15]
    I am satisfied that these obligations to have been complied with, based on the letter from the QBCC dated 6 June 2022 attached to the application.
16. [16]
    It is noted that the QBCC refused to deal with the matter on the basis that it was not building work. This does not prohibit the Tribunal dealing with this matter. The QBCC retains its jurisdiction of supervising and disciplining contractors performing “building work”. “Building work” is defined in Schedule 2 of the QBCC Act. It is similar to, but not as extensive as the Tribunal’s “tribunal work”. Schedule 1 of the Queensland Building and Construction Commission Regulation 2018 (Qld) (‘QBCC Reg’) contains a list of exclusions of work that is not “building work” for the purpose of the QBCC regulatory/supervisory role, which includes work of a value under $3,300,^[3] which would exclude this work from the definition of “building work”.
17. [17]
    For the purpose of the Tribunal, a building dispute includes a domestic building dispute, which is defined to include a dispute between a building owner and a building contractor relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work.^[4] For the Tribunal’s purpose, a building dispute is still a building dispute even where the contract is for $3,300 or less as the monetary threshold has no application to building disputes before the Tribunal.^[5]
18. [18]
    The terms “building owner” and “building contractor” are also defined in the QBCC Act.^[6]
19. [19]
    Reviewable domestic work means domestic building work under Schedule 1B, s 4 of the QBCC Act. Domestic building work includes the renovation, alteration, extension, improvement, or repair of a home.^[7] A home is a building or portion of a building that is designed, constructed or adapted for use as a residence.^[8]
20. [20]
    Roof restoration work and painting work are domestic building work, and as such, this claim relates to a contract for the performance of ‘reviewable domestic work’ within the Tribunal’s building dispute jurisdiction.^[9]
21. [21]
    I am satisfied that at all material times, Mr Kroll was the owner of the residential property where building work was to be completed, and that Mr Kovac was a building contractor who carried on a business that consisted of or included carrying out building work, namely painting. As such I am satisfied with the jurisdictional issues that this is a building dispute, and the tribunal has the jurisdiction to hear this matter.
22. [22]
    Pursuant to Schedule 2 of the QBCC Act, a domestic building dispute also includes a claim or dispute in negligence, nuisance or trespass related to the performance of reviewable domestic work, other than a claim for personal injuries.
23. [23]
    Pursuant to s 77(3) of the QBCC Act, in deciding a building dispute the Tribunal may award damages, interest, restitution, rectification or completion of defective or incomplete work, and cost.

Claims for breach of contract.

24. [24]
    A home owner who enters into an agreement with a building contractor for the performance of building work and who sustains loss arising from the performance of the work in a defective manner may make a claim against the building contractor for breach of contract.^[10] Where the breach of contract is established, the homeowner is, as far as money can do so, entitled to be placed in the same situation with respect to damages as if the contract had been performed.^[11]
25. [25]
    I am satisfied that the parties had an informal agreement for Mr Kovac to perform domestic building work for Mr Kroll, on the basis of the quote provided by Mr Kovac in April 2020 which Mr Kroll accepted and made full payment.
26. [26]
    The QBCC Act sets out the requirements for domestic building contracts which are regulated contracts. A domestic building contract includes a contract to carry out domestic building work. 
27. [27]
    A regulated contract includes a domestic building contract for which the contract price is more than the regulated amount. A regulated contract must be in a written form, dated and signed by or on behalf of each of the parties to it.^[12] A regulated contract only has effect if it complies with these requirements.^[13]
28. [28]
    A domestic building contract, where the contract price is more than $3,300 and less than $20,000 is a level 1 regulated contract.^[14]
29. [29]
    A domestic building contract where the contract price is more than $20,000 is a level 2 regulated contract. 
30. [30]
    Given the low cost of the contract this was not a level 1 or level 2 regulated contract, and as such there was no requirement for it to be in writing and dated and signed.
31. [31]
    While this was not a signed contract there is no lack of clarity nor is there uncertainty as to the basis of the contract. The work and remuneration were clear as per the email quote. The work was performed, and payment was made.
32. [32]
    As there are no clear warrantees in the contract, the applicant would need to rely upon an implied warranty or on statutory warranty.
33. [33]
    Sections 19-29 in Part 3 Schedule 1B of the QBCC Act set out the implied statutory warranties, which include that the material used is suitable for the proposed use and the standard of work will be carried out with the reasonable skill and care.
34. [34]
    The statutory warranties apply to regulated contracts. As this contract is not a regulated contract, as it is under $3,300, sections 19 to 29 do not strictly apply in this matter.
35. [35]
    However, the relationship between a homeowner and building contractor is a professional relationship which relies on a level of trust, where there is an expectation that the building contractor will have a level of skill to complete the building work and a duty of care is owed to ensure the building works are completed to an appropriate standard. It is an established category of relationship where a duty of care is owed. That is because it is reasonably foreseeable that if care is not taken by a building contractor in performing building work, the building owner/homeowner is likely to suffer loss and damage.
36. [36]
    Accordingly, it would be reasonable to consider the implied statutory warranties set out in sections 19 to 29 in Part 3 Schedule 1B of the QBCC Act as implied terms in all contracts for building work, and I find that these are implied terms in this contract between Mr Kroll and Mr Kovac.
37. [37]
    It is clear that in this matter, Mr Kroll relied upon Mr Kovac to perform the building work with appropriate care and skill.
38. [38]
    It is clear from the photographs provided by Mr Kroll that the paint on his roof has peeled and there are three quotes provided from Durable Roofing Pty Ltd, Surepaint and TipTop Painters Services to rectify the paint on the applicant’s roof varying between $3,000 and $11,018.70.
39. [39]
    There is some dispute in terms of when notice was provided to the respondent, Mr Kovac, about the paint peeling, as to whether it was January 2021, as asserted by the applicant, (which was 8 months after the painting) or June 2021, as asserted by the respondent (being 13 months since the painting). It makes little difference whether it was January or June 2021, as in either case, this was well outside what was expected in terms of the durability of roof paint.
40. [40]
    The applicant asserts that Mr Kovak’s work was of an unacceptable quality and the material used to paint the roof was not suitable for the purpose, which has led to the roof paint peeling. In support of this position, Mr Kroll provided evidence from Durable Roofing Pty Ltd, Surepaint and TipTop Painters Services, all of which state primer and/or the appropriate membrane paint was not used on the roof.
41. [41]
    The email attaching the quote from Surepaint dated 31 October 2022 states “It would appear at this time that the tiles do not show any evidence of primer. The coatings that are peeling off the tiles do not in my opinion [appear] [sic] to be a membrane elastomeric coating”. The email from TipTop Painters Services dated 5 December 2022 stated that “…from what I can see, it looks like the roof was not primed from the oxidised surface of the tiles before painting”.
42. [42]
    Mr Kovac’s position in response is that Mr Kroll wanted a cheap job, that only $300 was spent on the roof and Mr Kovac used a contractor whom he can now not contact, and the cost should have been around $2,000. These facts are disputed by the applicant.
43. [43]
    Despite stating that Mr Kroll wanted the work on the cheap and did not follow his advice about the necessary budget, Mr Kovac states that the roof was pressure washed, and a primer and two topcoats applied.
44. [44]
    Unlike the applicant who provided independent evidence from other roof painting companies to evidence the reasons for the roof paint failing, the respondent Mr Kovac has not provided any independent evidence to support his position that the roof was appropriately pressure washed, primed and painted with two topcoats.
45. [45]
    In the circumstances, noting the evidence in the applicant’s material of the roof paint failing and the three quotes evidencing that there was insufficient primer/membrane coating, I prefer the evidence of the applicant and find that the work performed by Mr Kovac was defective in that the work was not carried out with reasonable skill and care and the materials used were not suitable for the purpose of painting a roof.
46. [46]
    That does not amount to a breach of contract unless Mr Kovac is given a reasonable opportunity to rectify the defects^[15] but he repudiates the contract by refusing to do so.^[16]
47. [47]
    The correspondence between the parties reveals that Mr Kroll was prepared to allow Mr Kovac to return to site to rectify the painting of the roof. Numerous attempts were made to contact Mr Kovac to achieve this, and Mr Kroll’s initial application requested that Mr Kovac return to rectify the work. Mr Kovac, however, never returned and only sent a contractor to pressure wash the roof, and then did not return to repaint. In his response dated 2 December 2022 Mr Kovac there is no clear reason why Mr Kovac did not return other than Mr Kovac stating that the budget to respray would be $2,000, that he does not work for free, and he is not interested in doing any future work with the Krolls. Accordingly, I find that Mr Kovac did refuse to correct the defects, thereby repudiating the contract.
48. [48]
    As such I find that there is a breach of contract in this matter.

A Claim in Negligence

49. [49]
    Even if implied warrantees could not be inferred into the contract in this matter, as referred to above, a domestic building dispute may include a claim or dispute in negligence relating to the performance of reviewable domestic work.^[17]
50. [50]
    The Tribunal has recognised in previous decisions that it may still consider an informal agreement in any claim for negligence,^[18] finding that in agreeing to perform the work and performing the work, the building contractor owed the homeowner a duty to take reasonable care in performing the work.^[19]
51. [51]
    To establish a claim in negligence, the applicant Mr Kroll must prove that Mr Kovac owed him a duty of care, that Mr Kovac breached the duty, and as a result of the breach, Mr Kroll has suffered loss.^[20]
52. [52]
    As noted above, a relationship between a homeowner and building contractor is an established category of relationship where a duty of care is owed. I find that Mr Kovac owed a duty of care to Mr Kroll to avoid harm^[21] to him by performing the agreed work in compliance with all relevant laws and legal requirements and with all reasonable care and skill, supplying and using materials which were suitable for the purpose for the painting work contracted. These are in line with the warranties implied into the contract between the parties in Schedule 1B of the QBCC Act, which provide the scope of the duty of care owed by Mr Kovac to Mr Kroll.
53. [53]
    I find that it was reasonably foreseeable that if Mr Kovac failed to exercise appropriate care and skill in performing the building work that Mr Kroll may suffer loss and that Mr Kovac owed to Mr Kroll a duty of care to perform the building work in an appropriately skilled and competent manner.
54. [54]
    In line with the evidence provided from Surepaint and Tiptop Painters Services, that there was no use of appropriate primer or membrane paint, and the photos and evidence provided by the applicant of the peeling paint on the roof, I find that Mr Kovac has failed to perform the building work in a proper and workmanlike manner in breach of the duty owed to Mr Kroll, and that Mr Kovac is liable to Mr Kroll for damages as a result of this breach of duty.
55. [55]
    Accordingly, I am satisfied that the elements are made out for a claim in both contract and a claim for negligence.

Damages

56. [56]
    The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, or for a breach of duty in tort, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. Damages may include the cost of rectification work.^[22]
57. [57]
    The applicant is the only party who provided any quotes on the costs to rectify the roof. The applicant did invite the respondent to seek his own inspection and quote for rectifying the paint on the roof if he did not agree with the applicant’s quotes, but the respondent did not take this step and the only information from him was his opinion that repair costs would be closer to $2,000.
58. [58]
    Mr Kroll acknowledged the quote from Surepaint is considerably higher than the other two quotes and he was not seeking to engage Surepaint given the significant difference in the quote amount. The quotes from Durable Painting at $3,000 and Tiptop Painters Services at $3,300 were very comparable. Less detail was included in the Durable painting quote and it was not clear whether this included GST.
59. [59]
    I am satisfied on the uncontested evidence that the scope of the work outlined in the quote of Tiptop Painters Services is reasonable. I am satisfied on the uncontested evidence that the cost of the work is reasonable. Given the limited detail and uncertainty in the Durable quote whether it included GST, I allow the amount from the TipTop quote of $3,300 being $3,000 + GST.

Costs

60. [60]
    The Tribunal may award costs in a building dispute.^[23]
61. [61]
    It is clear from Mr Kroll’s application that he paid a filing fee of $358 in QCAT. However, there are no other costs apparent from the material filed by Mr Kroll.
62. [62]
    The amount of the filing fee is reasonable and was necessarily incurred by Mr Kroll in pursuing his claim. I therefore consider it is in the interests of justice to award the filing fee, and I fix the total costs payable in the amount of $358.

Orders

63. [63]
    I order Mr Kovac to pay Mr Kroll $3,658 within 60 days, which consists of:

    1. Damages of $3,300 plus
    2. Costs of $358.