Welsh v Ross[2024] QCAT 367

REASONS FOR DECISION

1. [1]
   Mr Ross contracted with Mr Welsh to do concreting work at Mr Welsh’s home. Mr Welsh paid for the work, which was completed. Mr Welsh later discovered that a moisture barrier had not been laid prior to the ensuite concrete slab pour in accordance with engineering requirements, and as a result, engaged other contractors to do the rectification work.
2. [2]
   Mr Welsh filed in the Tribunal an application for a commercial building dispute (which the Tribunal considered to be an application for a domestic building dispute) and Mr Ross filed a response. Mr Welsh subsequently filed an application for miscellaneous matters claiming an additional amount for rectification costs. Mr Ross has not filed a response to the subsequent application or complied with any Tribunal directions.

Background

Mr Welsh’s evidence

3. [3]
   Mr Welsh’s documentary and statement evidence is summarised as follows:

3. (a)
   Text messages between Mr Kyle Stevens and Mr Ross in June, July and August 2023 regarding plans for extension works at Mr Welsh’s property at 44 Mark Road West, Little Mountain (‘the property’).

3. (b)
   Coastwide Concrete & Construction (which appears to be the then trading name for Mr Ross) raised quote number QU-00559 dated 7 July 2023 addressed to Salty Landscapes and Constructions for the ‘supply and installation of concrete slab’ at ‘Little Mountain’ in the amount of $7,502.00 inclusive of GST noting payment terms: ‘50% deposit required to secure dates and balance due upon completion of project’.

3. (c)
   On 7 July 2023, Mr Welsh emailed Mr Kyle Stevens (of [email protected]) the message (inter alia): ‘Just need to confirm the entirety of the work for both granny flat and ensuite?’.

3. (d)
   Coastwide Concrete & Construction raised quote number QU-00559 dated 7 July 2023 addressed to Salty Landscapes and Constructions for the ‘supply and installation of concrete slabs’ at ‘Mark Road, West, Little Mountain’ in the amount of $8,382.00 inclusive of GST noting payment terms: ‘50% deposit required to secure dates and balance due upon completion of project.’ (‘revised 7 July 2023 quote’).

3. (e)
   On 7 July 2023, Ms Jess Hamilton (of [email protected]), who appears to be the then partner of Mr Ross, emailed to Mr Kyle Stevens (of [email protected]) the revised 7 July 2023 quote.

3. (f)
   On 7 July 2023, Mr Kyle Stevens (of [email protected]) emailed the revised 7 July 2023 quote to Mr Welsh.

3. (g)
   On 1 August 2023, Ms Jess Hamilton (of [email protected]) emailed to Mr Kyle Stevens (of [email protected]) the revised 7 July 2023 quote.

3. (h)
   On 1 August 2023, Mr Welsh emailed Mr Kyle Stevens (of [email protected]) and [email protected] the message: ‘deposit paid’.

3. (i)
   On 1 August 2023, Ms Jess Hamilton (of [email protected]) emailed Mr Welsh and Mr Kyle Stevens ([email protected]) the message: ‘Thanks for that. We now have your works booked in for the 21^st and 22^nd of August.’

3. (j)
   On 17 August 2023, Mr Welsh emailed [email protected] the message: ‘Hi Jess. Please see attached.’ with attachments bearing file references: ‘23-010_WD_REV_D.pdf” and ‘23-0179 Engineering Certification – Issue B.pdf”.

3. (k)
   On 18 August 2023, Mr Welsh emailed [email protected] the message: ‘Hi Jess. Just in case I didn’t send this already.’ with attachment bearing file reference: ‘23-0179 Structural Issue B.pdf”.

3. (l)
   On 21 August 2023, Ms Jess Hamilton (of [email protected]) emailed Mr Welsh quote number QU-00576 (VAR 02) dated 21 August 2023 for ‘VARIATION 02 Additional labour and steel required’ in the amount of $2,332.00 inclusive of GST noting payment terms: ‘50% deposit required to secure dates and balance due upon completion of project.’ (’21 August 2023 quote’)

3. (m)
   On 1 September 2023, Ms Jess Hamilton (of [email protected]) emailed Mr Welsh invoice number INV-00188 dated 1 September 2023 for ‘VARIATION 03 Crusher dust required per m³ (final quantity TBA on Wednesday 30^th Aug) VARIATION 04 Additional 6m³ concrete required’ in the amount of $1,955.80 inclusive of GST noting payment terms: Due Date 1 September 2023. (‘1 September 2023 invoice’)

3. (n)
   On 1 September 2023, Mr Welsh emailed [email protected] the message: ‘Hi Jess. Just confirming, is the additional concrete for the upcoming Wednesday job?’

3. (o)
   On 1 September 2023, Ms Jess Hamilton (of [email protected]) emailed Mr Welsh the message: ‘Not sure if you recall however our last phone conversation we discussed that 6m³ had been allowed for and you agreed that any additional concrete would be added to the same variation as the crusher dust. They ended up needing 12m³ so 6m³ was added to the variation, at cost price.’

3. (p)
   On 5 September 2023, Mr Welsh emailed [email protected] the message (inter alia): ‘As you know, you were instructed by engineer to lay plastic down. I definitely remember seeing it on granny slab but not on ensuite. Engineer has also flagged this. Did you lay any plastic on ensuite? Any photos to share I can pass along to engineer?’

3. (q)
   On 5 September 2023, Ms Jess Hamilton (of [email protected]) emailed Mr Welsh the message (inter alia): ‘As far as Pete is aware, plastic was laid on both however no photos were taken by us.’

3. (r)
   Emails between Mr Welsh and Ms Hamilton and/or Mr Ross over September and early October 2023 in which (inter alia) Mr Welsh requires the removal/replacement of the ensuite slab and associated rectification work at their cost due to the failure to lay a moisture barrier according to the engineering plans, and in response to which Ms Hamilton and/or Mr Ross offer to remove the ensuite slab, but not re-pour the slab, stating that all processes were followed, and questioning ‘if photos were taken of the prep works without the plastic, why the pour was then given the go ahead?’

3. (s)
   On 3 October 2023, Mr Welsh emailed Ms Hamilton advising that he would be seeking reimbursement for the following work as a result of ‘your faulty work’:

3. (i)
   Source concrete cut and removal.

3. (ii)
   Replace plumbing and electrical should they be damaged.

3. (iii)
   Replace pest controls that were done.

3. (iv)
   Prep and pour concrete again.

3. (v)
   Finance all of the above works, out of pocket.

3. (vi)
   Unknown additional costs as a result of this process.

3. (t)
   Photographs of concrete samples (without descriptions) and of an outdoor area featuring broken up/cut concrete on dirt and related equipment (with description ‘evidence of no plastic under slab shown’), under cover of an email dated 6 October 2023 from Mr Chris Blyde of Complete Concrete Cutting to Mr Welsh with a message referring to photographs taken onsite the previous day.

3. (u)
   HR Design Proposed Extension Job Number 23-0179 relating to the property (‘Extension document’).

3. (v)
   HR Design Engineering Certification Report Number 23-0179 Issue B relating to the property (‘Engineering Certification’).

Mr Welsh’s application

4. [4]
   On 8 November 2023, Mr Welsh filed an application for a commercial building dispute and related alleged defective work/incomplete work schedule claiming from Mr Ross an amount owing of $10,005.24, award for damages and interest of $500, and costs of $379.50 for not following plans and the advice of the engineer to lay plastic on the concrete pour.
5. [5]
   Mr Welsh attached to his application evidence of compliance with Queensland Building and Construction Commission (‘QBCC’) pre-proceeding processes enlivening the Tribunal’s jurisdiction.^[1] QBCC advised that the issue between the parties was contractual and outside its jurisdiction.
6. [6]
   On 20 November 2023, Mr Welsh served a copy of the application on Mr Ross.^[2]
7. [7]
   The Tribunal directed^[3] (inter alia) that:

   1. Mr Welsh’s application proceed as an application for a domestic building dispute.
   2. The Tribunal’s record be corrected to reflect that the respondent is Peter Ross.
   3. Mr Welsh file a copy of the building works contract.
   4. Mr Ross file a response to the application.
   5. Mr Welsh file a statement of evidence and any witness statements.
   6. Mr Ross file a statement of evidence and any witness statements, and Mr Welsh file a statement in reply.
8. [8]
   On 29 November 2023, Mr Ross filed a response disputing Mr Welsh’s claims and requesting that the application be closed.^[4]
9. [9]
   On 20 December 2023, Mr Welsh filed his statement of evidence referencing and attaching the documentary evidence listed in paragraph [3] of these reasons.
10. [10]
    On 7 May 2024, Mr Welsh filed an application for miscellaneous matters seeking, in addition to the amounts claimed in his earlier application, an amount of $7,000.00, described as a refund of half of the work that was fully paid for on the basis that the work was faulty.^[5]
11. [11]
    The Tribunal directed^[6] (inter alia) that:

    1. The orders sought by Mr Welsh in the application for miscellaneous matters be considered as part of the final relief sought by Mr Welsh in the proceeding.
    2. Mr Ross comply with previous directions.
    3. The matter be listed for a compulsory conference on 24 July 2024.
12. [12]
    On 12 June 2024, two days after the directions hearing on 10 June 1024, Mr Ross emailed the Tribunal advising that ‘Coastwide Concrete & Construction is no longer operating. Apologies that we are not able to assist in this instance.’
13. [13]
    Mr Ross having failed to attend the compulsory conference, the Tribunal directed^[7] that the matter be listed for hearing on the papers, and the parties file any final submissions. Neither party filed final submissions.

Consideration and findings

Tribunal’s jurisdiction

14. [14]
    The relevant enabling Act is the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’).
15. [15]
    The Tribunal has jurisdiction to hear and decide building disputes.^[8] A building dispute includes a domestic building dispute.^[9] A domestic building dispute includes a dispute between a building owner and building contractor relating to the performance of reviewable domestic work.^[10] Both ‘building contractor’ and ‘building owner’ are defined in the QBCC Act.^[11] Reviewable domestic work means domestic building work under s 4 of Schedule 1B of the QBCC Act. Domestic building work includes the renovation, alteration, extension, improvement or repair of a home.^[12]
16. [16]
    A person involved in a building dispute may apply to the Tribunal to decide the dispute provided the person has complied with a process established by the QBCC to attempt to resolve the dispute.^[13]
17. [17]
    I am satisfied and find that:

    1. Mr Welsh is a building owner and Mr Ross is a building contractor.
    2. While Mr Stevens of Salty Landscapes and Constructions was included in the early exchange of emails regarding the revised 7 July 2023 quote, the contracting parties were Mr Welsh and Mr Ross.
    3. Mr Ross contracted to carry out, and carried out, domestic building work for Mr Welsh.
    4. The dispute between the parties is a domestic building dispute.
    5. Mr Welsh complied with the QBCC pre-proceeding processes.
    6. The Tribunal has jurisdiction to hear and decide the dispute.

Bringing proceeding to an early end

18. [18]
    A proceeding in the Tribunal may be brought to an early end in circumstances where the Tribunal considers a respondent in the proceeding is acting in a way that unnecessarily disadvantages an applicant by not complying with a Tribunal order or direction without reasonable excuse. In such circumstances, the Tribunal may make its final decision in the proceeding in the applicant’s favour.^[14]
19. [19]
    I am satisfied and find that:

    1. Mr Ross has paid no monies to Mr Welsh in respect of the amounts claimed.
    2. Other than filing a response to Mr Welsh’s initial application, Mr Ross has since failed to comply with the Tribunal’s directions and failed to attend the compulsory conference.
    3. Mr Ross’s advice to the Tribunal that his business was no longer operating and he is not able to assist demonstrates a lack of understanding and care on Mr Ross’s part in relation to his legal responsibilities associated with and consequent upon the conduct of his contracting business.
    4. Mr Ross has unnecessarily disadvantaged, and continues to unnecessarily disadvantage, Mr Welsh. The disadvantage to Mr Welsh is that he has been unable to progress his claim to final resolution.
20. [20]
    I have considered the matters at s 48(3) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). Given that Mr Ross filed a response to Mr Welsh’s initial application and two days after the directions hearing on 10 June 2024 advised the Tribunal that his business was no longer operating and he is not able to assist, I consider that Mr Ross has the capacity to understand and act on the Tribunal’s orders and directions, and in failing to comply with directions and to attend the compulsory conference, he acted deliberately in making that choice.
21. [21]
    I am satisfied that it is appropriate to exercise my discretion and make a final decision in the proceeding in favour of Mr Welsh.

Contract and breach

22. [22]
    Ordinarily the failure by a building contractor to complete works without reasonable excuse and/or the performance of defective work by a building contractor is a substantial breach of contract, constituting repudiatory conduct, and giving rise to an entitlement by the building owner to terminate the contract. In such event, the building owner is entitled to claim damages for the builder’s breach. Where a building owner sustains a loss by reason of a breach of contract by a builder, the building owner is, as far as money can do it, entitled to be placed in the same situation, with respect to damages, as if the contract had been performed.^[15] The measure of damages recoverable by a building owner for breach of a building contract is the difference between the contract price for the work and the cost of making the work conform to the contract, subject to undertaking the work necessary to achieve conformity being a reasonable course to adopt.^[16] In assessing the building owner’s damages, the builder must be given credit for any unpaid part of the contract sum.^[17]
23. [23]
    The QBCC Act provides that a domestic building contract for an amount between $3,300 and $19,999 is a level 1 regulated contract.^[18] A level 1 regulated contract, inter alia, must be in writing, dated and signed by or on behalf of each of the parties, and only has effect if these requirements are complied with.^[19]
24. [24]
    On the evidence before me, the contract between the parties comprises the revised 7 July 2023 quote, the 21 August 2023 quote and the 1 September 2023 invoice, and related email exchanges, followed by the payment of money by Mr Welsh and the performance of work by Mr Ross.
25. [25]
    I find that the contract between the parties (as described) does not comply with the requirements for a level 1 regulated contract. A contract that has no effect is void and cannot be enforced. Mr Welsh cannot rely on the contract as described to make a claim against Mr Ross.

Negligence and breach of duty

26. [26]
    A domestic building dispute may include a claim or dispute in negligence relating to the performance of reviewable domestic work.^[20] A building owner, in order to establish negligence by a builder, must prove that: the builder owed to the owner a duty of care; the builder breached the duty; and as a result of the breach of duty, the owner has suffered loss.
27. [27]
    Generally speaking, a builder owes to an owner a duty to perform building works with reasonable care and skill, and therefore a builder may be liable to an owner for any negligence arising from defective work.^[21]
28. [28]
    Mr Welsh’s central claim is that Mr Ross failed to lay a moisture barrier (loosely referred to by the parties as ‘plastic’) prior to the ensuite slab pour in accordance with the engineering requirements emailed to Mr Ross on 17 and 18 August 2023.
29. [29]
    I note the Extension document includes the following sub-paragraph under the heading, 5 – REINFORCED CONCRETE:

3. 5.15
   A vapour barrier (200µm thick polythene sheet) shall be placed beneath the slab on the ground so that the ground surface under the slab and thickenings is entirely covered in accordance with AS3610 and AS2870.

30. [30]
    I note the Engineering Certification includes sub-paragraphs under the heading, 2.0 CONSTRUCTION REQUIREMENTS, the relevant extracts as follows:

3. 2.1
   Floor Slab Details…The slab is to be poured on a minimum 50mm compacted sand bed, with a visqueen vapour-moisture barrier…

3. 2.2
   Waterproof Membrane…Ground slabs and internal beams will be underlain with 0.2mm thickness polythene film moisture barrier, continuous under the whole slab area…

31. [31]
    I note Mr Welsh emailed Mr Ross on 5 September 2023, a date after the completion of the ensuite slab pour, stating (inter alia) ‘As you know, you were instructed by engineer to lay plastic down.’ … ‘Did you lay plastic on ensuite?’, and on the same date, Ms Hamilton responded by email stating (inter alia) ‘As far as Pete is aware, plastic was laid on both…’.
32. [32]
    I note Ms Hamilton emailed Mr Welsh on 3 October 2023 questioning ‘if photos were taken of the prep works without the plastic, why the pour was then given the go ahead?’. There is no evidence before me that photos were taken, and exist, of the preparation work prior to the ensuite slab pour or that the pour was given the go ahead by anyone, for example, Mr Welsh’s engineer. There is also no evidence before me that Mr Welsh’s engineer was required to check/sign-off the preparation work prior to the ensuite slab pour going ahead.
33. [33]
    I am satisfied and find that:

    1. Mr Welsh emailed the Extension document and Engineering Specification to Mr Ross on 17 and/or 18 August 2023, dates prior to the commencement of the concreting work.
    2. The only sensible explanation for Mr Welsh providing the Extension document and Engineering Specification to Mr Ross is that Mr Welsh intended to make Mr Ross aware of the concrete-related engineering requirements, including the moisture barrier requirements for the slabs.
    3. Mr Ross was thereby made aware of the moisture barrier requirements for the slabs.
    4. Mr Ross understood the moisture barrier requirements for the slabs as Ms Hamilton acknowledged in an email to Mr Welsh that as far as Mr Ross is aware, plastic was laid on both (meaning both the granny flat and ensuite slabs).
    5. Mr Ross failed to lay a moisture barrier for the ensuite slab.
    6. Mr Ross demonstrated that he was aware he should have laid a moisture barrier for the ensuite slab when he offered to remove the slab.
    7. Mr Ross owed Mr Welsh a duty to ensure a moisture barrier was laid for the ensuite slab, and in failing to do so, Mr Ross breached that duty.
34. [34]
    The question next to be addressed is what loss has Mr Welsh suffered as a result of Mr Ross’s breach of duty and what evidence is available to demonstrate that loss?
35. [35]
    Mr Welsh claims in his initial application an amount owing of $10,005.24 and an award for damages and interest of $500. However, he fails to particularise how these amounts are derived. I therefore disallow these amounts from Mr Welsh’s claim.
36. [36]
    Mr Welsh claims in his subsequent application a further amount of $7,000.00 as being a refund of half the work fully paid for. However, he fails to explain or provide evidence of the contractual basis of the claim. I therefore disallow this amount from Mr Welsh’s claim.
37. [37]
    Mr Welsh engaged contactors to carry out the rectification work as evidenced by the copies of the following invoices provided by Mr Welsh and referenced in his statement of evidence:

    1. Flick Anticimex Pty Ltd for preconstruction termite application: $330.00.
    2. Kennards Hire for Hammer demolition and pair of Hilti Moils: $122.00.
    3. Complete Concrete Cutting for sawing and drilling of concrete: $1,304.24.
    4. Coastworx for preparation of footings, and supply and installation of steel, formwork, and concrete: $7,150.00.
    5. Rocktek for excavator hire and concrete disposal: $1,012.00.
    6. Yandina Plumbing Pty Ltd for installation of hot and cold rough in and labour: $583.00.
    7. Your Coast Electrical for repair/replacement of gate power cabling damaged during slab removal: $479.00.
38. [38]
    Mr Welsh did not take up Mr Ross’s offer to remove the ensuite slab, and in doing so Mr Welsh elected to incur a cost that would otherwise have been borne entirely by Mr Ross. I therefore disallow the amounts of $122.00, $1,304.24, and $1,012.00 from Mr Welsh’s claim.
39. [39]
    Mr Ross contracted to supply and install concrete slabs (that is, the granny flat and ensuite slabs) at the property. There is no reference in the revised 7 July 2023 quote, the 21 August 2023 quote or the 1 September 2023 invoice, or related email exchanges, to a termite application or the installation of hot and cold rough in. I therefore disallow the amounts of $330.00 and $583.00 from Mr Welsh’s claim.
40. [40]
    Mr Ross is not reasonably responsible for the cost of the repair/replacement of the gate power cabling damaged during the slab removal. I therefore disallow the amount of $479.00 from Mr Welsh’s claim.
41. [41]
    Mr Ross is reasonably responsible for the cost of the preparation of footings, and supply and installation of steel, formwork and concrete relating to the replacement of the ensuite slab that he installed without a moisture barrier. I therefore allow the amount of $7,150.00 in Mr Welsh’s claim.
42. [42]
    I therefore assess damages for breach of duty at $7,150.00.

43. [43]
    By s 77(3)(c) of the QBCC Act, the Tribunal’s powers to resolve a building dispute include the power to award damages and interest on the damages at the rate, and calculated in the way, prescribed under a regulation. The relevant regulation provides that where not otherwise agreed between the parties, interest is payable on the amount of damages awarded at the rate of 10% on and from the day after the day the amount became payable until and including the day the amount is paid.^[22] In the circumstances of a claim for unliquidated damages, until a decision to award damages is made, no amount is payable.^[23]
44. [44]
    I find there should be an award of damages in Mr Welsh’s favour against Mr Ross in the amount of $7,150.00 plus interest at 10% per annum on that amount as and from the date of this decision.

Unlicensed building work

45. [45]
    A person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class.^[24] A person who carries out unlicensed building work is not entitled to any monetary or other consideration for doing so.^[25] Any monetary or other consideration paid to an unlicensed builder must be repaid.^[26]
46. [46]
    An unlicensed builder may claim reasonable remuneration for carrying out building work. However, it is limited to an amount that complies with the statutory requirements.^[27]
47. [47]
    An Australian Business Register online search conducted by the Tribunal on 10 September 2024 records Peter John Ross as an individual/sole trader under registered business name Coastwide Concrete & Construction, registration date 24 May 2021 and the ABN status as cancelled from 15 March 2024.
48. [48]
    A QBCC licence online search conducted by the Tribunal on 10 September 2024 does not reveal any records of Peter John Ross having held or holding a contractor’s licence of any class.
49. [49]
    I note in the response to Mr Welsh’s initial application, Mr Ross states that ‘Coastwide Concrete & Construction are not builders (commercial building dispute)’.
50. [50]
    I am satisfied and find that:

    1. Mr Welsh paid Mr Ross (or his trading entity) $12,669.80, being the total of the revised 7 July 2023 quote ($8,382.00), the 21 August 2023 quote ($2,332.00) and the 1 September 2023 invoice ($1,955.80).
    2. At the time Mr Welsh contracted with and paid Mr Ross, and at the time Mr Ross carried out the building work, Mr Ross was not a licensed contractor.
    3. Mr Ross was not permitted to carry out the building work and is therefore in breach of s 42(1) of the QBCC Act.
    4. Pursuant to s 42(3) of the QBCC Act, Mr Ross was not entitled to the $12,669.80 he received from Mr Welsh, and he has no entitlement to retain that money.

51. [51]
    There is no application before the Tribunal by Mr Ross pursuant to s 42(4) of the QBCC Act claiming reasonable remuneration.
52. [52]
    I find that Mr Ross must repay to Mr Welsh the amount of $12,669.80.

Costs

53. [53]
    Mr Welsh has claimed the filing fee of $379.50 associated with his QCAT application.
54. [54]
    The Tribunal has the power to award costs in building disputes.^[28] The discretion to award costs is a broad one which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the proceeding.^[29]
55. [55]
    The Tribunal may make an order against the party causing the disadvantage to compensate the other party for any reasonable costs incurred unnecessarily.^[30]
56. [56]
    I find Mr Welsh is entitled to recover the filing fee on the application. This cost was reasonable and necessary to enable Mr Welsh to pursue his legal entitlements. I fix the total costs payable by Mr Ross in the amount of $379.50.