Gwin v Gabriel[2024] QCAT 525

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   This proceeding is about a building dispute.
2. [2]
   Mr Gabriel undertook building work at Ms Gwin’s residence. Ms Gwin says that the work was defective and required rectification. Ms Gwin claims the cost of the rectification works and related costs.
3. [3]
   The respondent has filed a response to the originating application in which he denies the work performed was defective.
4. [4]
   The parties were directed to file statements of evidence. Ms Gwin has complied with the direction. Mr Gabriel has not.
5. [5]
   On 8 March 2024 the Tribunal directed that the matter be determined on the papers.

Findings about jurisdiction

6. [6]
   As has been observed, Mr Gabriel has filed no evidence. I therefore accept the uncontested evidence of Ms Gwin.
7. [7]
   I find that:

   1. Ms Gwin is a building owner;
   2. Mr Gabriel is a building contractor;
   3. On or about 14 June 2020 the parties agreed that Mr Gabriel would undertake the following building work at Ms Gwin’s residence:
      1. The removal of a tiled path, slate paving, and part of slate path (with pavers to be removed);
      2. An area, calculated at 157 square metres, to be covered with:
         1. Sub grade bedded with 20mm of cracker dust;
         2. 100mm of smooth, exposed aggregate from Hytex;
         3. F72 mesh;^[1]
         4. 25MPa concrete;^[2]
      3. If additional material was required to cover the area, such material was to be supplied by Mr Gabriel at no additional cost;
      4. The nib wall was to be 100mm higher than the edge of the garden;
      5. An extra area was to be boxed to extend the path in line with the existing tiled path to the end of the existing area;
      6. The existing path extending beyond the house was to be removed and replaced with aggregate;
      7. A step up was required from the existing slate paved area to where the higher path and pavers were situated;
      8. All concrete was to be excavated and removed and the site left clean.
   4. The contract price was $14,850. A deposit of $1,400 was payable by Ms Gwin with the balance of the contract price payable upon completion of the works;
   5. The contract documents included plans and specifications which comprised four handwritten pages;
   6. The contract was silent on the number of construction days;
   7. The contract was signed by the applicant and by the respondent;
   8. The contract was not dated;
   9. The building work is domestic building work;
   10. The dispute is a domestic building dispute;
   11. The requirements of s 77(2) of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) have been satisfied;
   12. The Tribunal has jurisdiction to decide the dispute.
8. [8]
   The QBCC contract standard conditions are not in evidence.

Is the contract of effect?

9. [9]
   It is necessary to first deal with whether the contract is of effect. Schedule 1B of the QBCC Act is concerned with the regulation of domestic building contracts.^[3] Domestic building contracts may be level 1 regulated contracts (where the contract price is less than $20,000) or level 2 regulated contracts (where the contract price is $20,000 or more). Whether a contract is a level 1 regulated contract or a level 2 regulated contract, for the contract to have effect it must be: in writing; signed by the parties; and dated.^[4] A contract that is of no effect cannot be enforced by the parties.
10. [10]
    The contract between the parties would otherwise be a level 1 regulated contract. While it is in writing and signed, it is not dated. Arguably the contract is therefore of no effect meaning that the contract cannot be relied upon by either party to assert legal rights and responsibilities.
11. [11]
    Section 77(3) of the QBCC Act confers on the Tribunal a broad range of powers to resolve a building dispute. Section 77(3) provides ‘(w)ithout limiting the tribunal’s powers to resolve the dispute, the tribunal may exercise 1 or more of the following powers…’. Section 77(3)(e) empowers the Tribunal to ‘declare any misleading, deceptive or otherwise unjust contractual term to be of no effect, or otherwise vary a contract to avoid injustice’.
12. [12]
    The Tribunal’s powers extend beyond the determination and enforcement of contractual obligations and are more extensive than those ordinarily exercised by courts in determining claims under building contracts.^[5] The scope of the power conferred by s 77(3)(e) has been the subject of some, albeit limited, tribunal consideration. In Lavish Constructions Pty Ltd v Haywagner Investments Pty Ltd it was stated that a claim to vary a contract was in the nature of a claim for rectification.^[6] Rectification is a remedy available to correct an instrument which does not accurately reflect the common intention of the parties. Rectification, which is an equitable remedy, does not operate to vary the instrument. The tribunal has no general equitable jurisdiction. It was open to the legislature in drafting s 77(3) to confer upon the Tribunal a statutory power of rectification. It is relevant that this opportunity was not taken and the section expressed in clear terms confining the power of the tribunal to varying a contract. It is also relevant that other examples of the grant of what would otherwise be equitable jurisdiction on the tribunal may be found in the QBCC Act.^[7] The specific conferral of the power in s 77(3)(e) to make a declaration as to a term of a contract, and to otherwise vary a contract tells against the conferral of a broader equitable power to order rectification of a contract.  I therefore conclude that s 77(3)(e) does not empower the tribunal to order rectification of a contract.
13. [13]
    Even if there was jurisdiction in the Tribunal to order rectification, I do not consider rectification would be a remedy available to the applicant to address the failure by the parties to date the contract. In Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd Denning LJ stated:

In order to get rectification it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrong.^[8]

14. [14]
    The failure by the parties to date the contract was not a mistake about what the contract said and meant.  Nor does the failure to date the contract constitute a mistake as to the terms and conditions of the contract. 
15. [15]
    Having concluded that the power conferred by s 77(3)(e) of the QBCC Act does not extend to ordering rectification of a contract, the next issue to address is whether the power of the tribunal to vary a contract to avoid injustice extends to applying a date to an undated contract.
16. [16]
    The QBCC Act is consumer protection focussed. The objects of the Act include achieving a reasonable balance between the interests of building contractors and consumers.^[9] In the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.^[10] Section 77(3)(e) must be construed in light of the foregoing.
17. [17]
    The power conferred by s 77(3)(e) has been described as ‘far reaching’.^[11] In Woorabinda Aboriginal Council v Ealesrose Pty Ltd^[12] it was stated that the (then equivalent) power conferred by s 77(3) ‘… gives the widest of powers to the Tribunal.’ Wide they may be, but those powers are not unlimited.
18. [18]
    Section 77(3)(e) provides for two separate forms of relief: firstly, a declaration that a misleading, deceptive or otherwise unjust contractual term is of no effect; secondly, varying a contract to avoid injustice. As a matter of construction, it is clear that the power to ‘vary’ is not contingent upon a finding that a contractual term is misleading, deceptive or unjust. Rather, the power to vary may be exercised to avoid injustice which clearly has a broader application. The word ‘vary’ should be given its ordinary meaning: to make a partial change in or make different in some attribute or characteristic. The term must be construed in the context of the provision as a whole.
19. [19]
    The scope of the power conferred by s 77(3)(e) was considered in B M Culley & Assoc P/L & B M C Special Proj P/L vs Wickham Developments Ltd^[13] where the former Queensland Building Tribunal held that the power extended to ordering the joinder of a party to a contract. This decision was followed by the Building Tribunal in Dunne, David T v Tamawood Pty Ltd^[14] which also involved the joinder of a party to a contract. Dunne was the subject of an unsuccessful District Court appeal where it was held by Botting DCJ:

In the circumstances it is not necessary for me to analyse the process by which the Member arrived at the conclusion that she had the power to make the order. My opinion is that she was correct in concluding that in appropriate cases the power may be exercised by the tribunal.^[15]

20. [20]
    In R & R Leach Pty Ltd v Jamadon Pty Ltd^[16] the Building Tribunal said that the power in (now) s 77(3)(e) extended to varying a contract by deleting the name of the proprietor inserted in a contractual schedule and substituting the name of another legal person, if to do so would avoid injustice. In Darling Downs Constructions Pty Ltd, Brosnan v Thomas^[17] the Commercial and Consumer Tribunal relying upon the power in (now) s 77(3)(e) varied a contract to include a date for practical completion to be a specific date rather than a construction period expressed as a number of days.
21. [21]
    In Morris Rogers v Julie Jorgensen^[18] the Queensland Building Tribunal held:

In my view the addition of the words "or otherwise vary a contract to avoid injustice" shows that section 95(4)(d) goes both to injustice which arises by reason of the manner in which the contract was made ("procedural injustice") and injustice arising by reason of the operation of the contract in the circumstances which have come to pass ("substantive injustice") - I am adopting the terminology used by McHugh JA in West v AGC Advances Ltd [1986] 5 NSWLR 610 at 620E and Sheller JA in Nguyen v Taylor [1992] 27 NSWLR 48 at 68.

Whatever are the limits of the jurisdiction of this tribunal to vary unjust contractual terms for procedural injustice, I think that one should not lose sight of the fact that the clause which has the alleged unjust effect is a liquidated damages clause for late completion of work.

22. [22]
    While I accept that a broad construction of s 77(3) ought to be taken, and while I also accept that inserting a date into a contract as was ordered in Darling Downs Constructions Pty Ltd may be within the power conferred by s 77(3)(e), the question here is whether the power should be exercised in order to overcome a specific statutory requirement, non-compliance with which renders the contract of no effect. For the reasons that follow, I have come to the conclusion that it should not.
23. [23]
    Section 13(2) and s 14(2) of sch 1B of the QBCC Act are expressed in clear and unequivocal terms. A regulated contract must, to be of effect, be in writing, dated and signed by the parties. This is a clear statement of intent by the legislature that a contract that does not meet these minimum requirements is unenforceable by either of the parties. The effect of these provisions is to cast upon both the building owner and the building contractor the responsibility of ensuring a regulated contract meets the minimum requirements. There is no prohibition on a building contractor undertaking building work absent compliance with the statutory requirements however a contractor is liable to the imposition of a penalty.^[19]
24. [24]
    It was open to the legislature, in drafting s 13(2) and s 14(2), to provide that a contract not complying with the requirements of the Act is not enforceable by the building contractor. That this opportunity was not taken supports the conclusion that responsibility for compliance with the relevant provisions is cast equally upon both building owner and building contractor.
25. [25]
    I therefore conclude that it would be impermissible to use the power conferred by s 77(3)(e) to subvert the clear legislative intent expressed in s 13(2) and s 13(4) of sch 1B.
26. [26]
    The result of the foregoing is that the contract between the parties is of no effect and cannot be relied upon by Ms Gwin in respect of her claim against Mr Gabriel.

Is Ms Gwin entitled to pursue a claim in negligence?

27. [27]
    I turn now to whether Ms Gwin is entitled to bring a claim in negligence against Mr Gabriel.
28. [28]
    In Karam v Chau’s & Sons Pty Ltd t/as Holiday Air Conditioning and Refrigeration Qld^[20] I considered the circumstances in which a building contractor may owe to a building owner a duty of care where the parties are in a direct relationship. I said the following:

In Bryan v Maloney^[21] the High Court recognised the special relationship between a building contractor and a building owner for whom building work is undertaken:

On the other hand, there are strong reasons for acknowledging the existence of a relevant relationship of proximity between a builder such as Mr Bryan and a first owner such as Mrs Manion with respect to the kind of economic loss sustained by Mrs Maloney. In particular, the ordinary relationship between a builder of a house and the first owner with respect to that kind of economic loss is characterized by the kind of assumption of responsibility on the one part (i.e. the builder) and known reliance on the other (i.e. the building owner) which commonly exists in the special categories of case in which a relationship of proximity and a consequent duty of care exists in respect of pure economic loss. There is nothing to suggest that the relationship between Mr Bryan and Mrs Manion was not characterized by such an assumption of responsibility and such reliance.^[22] (emphasis added)

The Court in Bryan v Maloney recognised that, in the context of domestic building work, the duty of care owed by a building contractor to the owner was concurrent in contract and tort:

Mr Bryan and Mrs Manion were the parties to a contract in relation to the building of the house. Whatever may have been the position in earlier times, the existence of such a contractual relationship between builder and client did not preclude the existence either of a relationship of proximity between them in relation to that work or of a consequent duty of care under the ordinary law of negligence.^[23]

While the High Court has, since Bryan v Maloney^[24], made clear that proximity is no longer the guiding principle in determining the existence of a duty of care, the aspect of the judgement dealing with the relationship between a building contractor and a building owner for whom domestic building work has been undertaken has not been overruled.

If the particular circumstances of a case fall into one of the established categories of duty of care it is unnecessary for an applicant to prove that the respondent owed a duty.^[25] This is what the High Court was referring to in Bryan v Maloney and the ‘special categories of case’.  Where however a novel set of circumstances arises, it is necessary for an applicant to prove that the respondent owed a duty of care. In Caltex Refineries (Qld) Pty Ltd v Stavar it was stated:

This rejection of any particular formula or methodology or test the application of which will yield an answer to the question whether there exists in any given circumstance a duty of care, and if so, its scope or content, has been accompanied by the identification of an approach to be used to assist in drawing the conclusion whether in novel circumstances the law imputes a duty and, if so, in identifying its scope or content. If the circumstances fall within an accepted category of duty, little or no difficulty arises. If, however, the posited duty is a novel one, the proper approach is to undertake a close analysis of the facts bearing on the relationship between the plaintiff and the putative tortfeasor by references to the “salient features” or factors affecting the appropriateness of imputing a legal duty to take reasonable care to avoid harm or injury.^[26] (emphasis added)

The salient features approach to determining, in novel cases, whether a duty of care is owed by a potential tortfeasor was referred to by the High Court in the recent decision of Mallonland Pty Ltd v Advanta Seeds Pty Ltd^[27]:

In Sullivan v Moody, the Court observed that "[d]ifferent classes of case give rise to different problems in determining the existence and nature or scope, of a duty of care ... The relevant problem will then become the focus of attention in a judicial evaluation of the factors which tend for or against a conclusion, to be arrived at as a matter of principle." Since Sullivan v Moody, other than in cases involving an assumption of responsibility, determining whether the relationship between the parties gives rise to a duty of care to avoid causing pure economic loss has been understood in Australia to involve such an evaluation. This "salient features" approach, as it is now known, has attracted significant academic and judicial criticism. (footnotes omitted)

The ‘salient features’ approach referred to in Mallonland involves a consideration of a range of matters in determining whether a duty of care arises. One of those matters is vulnerability to harm. Where however the relationship between the relevant parties is one involving an assumption of responsibility, the salient features approach to determining the existence of a duty of care does not arise for consideration.

In domestic building cases involving the original parties to the building work, as recognised in Bryan v Maloney, there is an assumption of responsibility on the part of the building contractor. Accordingly, consideration of the vulnerability of the building owner in determining the existence of a duty of care is not required. This was recognised by Edelmann J in Mallonland albeit in the context of a subsequent purchaser:

It suffices to say that if there were truly an assumption of responsibility in Bryan v Maloney, then any reference to "vulnerability" would be superfluous and confusing at best.

Edelemann J’s comment  has direct application  in circumstances where the building contractor and the building owner are in a direct relationship.

29. [29]
    I have no cause to revisit my approach in Karam. I am satisfied that the relationship between the parties involved an assumption of responsibility by Mr Gabriel as a building contractor and known reliance by Ms Gwin as a building owner and was therefore within that special category of case in which it is acknowledged that a duty of care is owed by the building contractor to the building owner.
30. [30]
    It follows that I am satisfied Mr Gabriel owed to Ms Gwin a duty to undertake the building work in an appropriate and skilful way, and with reasonable care and skill.
31. [31]
    The conclusion I have reached is consistent with the provisions of the QBCC Act. The Act is consumer protection focussed. It cannot, in my view, have been the intention of the legislature to leave a building owner without a common law remedy in circumstances where a building contractor has performed domestic building work found to be defective. It is relevant to note that the statutory protections afforded to homeowners by the Act are limited in their scope in respect of recourse by the homeowner to the statutory insurance scheme with its concomitant limitations as to the circumstances in which the provisions of the insurance policy are engaged. Nor could it be said to be consistent with the objects of the Act to leave a homeowner without a remedy for defective building work in circumstances where the contract with the builder is of no effect, and at the same time permit the builder to pursue the building owner for recovery of monies on a quantum meruit.

The claim in negligence

32. [32]
    The concreting work undertaken by Mr Gabriel was located to the front entry of the applicant’s residence, extending around the left side of the residence to the swimming pool. At various points, several downpipes and a stormwater pipe were located in the slab. The front section of the slab was surrounded by the residence and stone garden edging.
33. [33]
    The evidence before the Tribunal about the standard of the work undertaken by the respondent may be summarised as follows:

    1. Report, Karl Aldrich, KMA Consulting Engineers dated 2 December 2020. Mr Aldrich is a forensic engineer. Mr Aldrich opines that:
       1. The slab installed by the respondent is non-compliant with the requirements of AS3600 Concrete Structures;
       2. The slab in the area of the path is non compliant with the National Construction Code, there being inadequate fall away from the building permitting water to pool;
       3. The external slab level is too high in regards to the internal slab level leading to ponding of water. In addition, the base of steel wall mullions were left exposed leaving dangerous edges exposed;
       4. Articulation joints have not been installed in the slab. The absence of such joints will lead to uncontrolled cracking of the slab;
       5. Isolation joints have not been installed around embedded items such as posts, or between garden edging or between the building itself. The absence of such joints will lead to uncontrolled cracking of the slab;
       6. The exposed stormwater pipe has been incorrectly installed. This will lead to the concrete around the pipe to crack and/or break away. There is a risk that expansion and compression of the concrete slab will lead to the stormwater pipe breaking;
       7. The concrete installed by the respondent has compromised the termite management system.
       8. Mr Aldrich makes a number of recommendations. In summary, Mr Aldrich recommends the removal and replacement of the concrete laid by the respondent.
    2. Report, Concrete Scanning and Investigation dated 5 August 2021. The author of the report, Mr Alex Myer, undertook ground penetrating radar and electromagnetic detection scanning of the concrete slab laid by the respondent. Mr Myer opines that:
       1. In some areas, the one layer of reinforcing was detected; the slab varied from 80mm to 120mm thick; the reinforcing is 40mm above ground level; the majority of the slab was 100mm to 120mm thick with cover to reinforcing being 60mm to 80mm;
       2. In some areas, the average concrete cover to reinforcing was 40mm with average thickness of concrete being 80mm;
       3. In some areas no reinforcing was detected with average concrete thickness being 100mm;
       4. In some areas the average concrete cover to reinforcing was 40mm and thickness of concrete was 80mm;
       5. In some areas no reinforcing was detected with average concrete thickness being 80mm;
       6. In some areas the average concrete cover to reinforcing was 80mm and thickness of concrete was 120mm;
       7. In some areas the average concrete cover to reinforcing was 60mm and thickness of concrete was 100mm;
    3. Report, Scott Hayman, QBCC technical officer dated 15 December 2020. Mr Hayman’s inspection was confined to the concrete path along the house which the applicant said was uneven and of inadequate thickness. Mr Hayman found that the path was defective insofar as the finished surface was not drained to move surface water away from the building 25mm over the first 1 metre being contrary to part 3.1.3.3(a)(i) of the BCA 2019;
    4. In his report, Mr Aldrich refers to a report prepared by Organic Pest Control. The report is not before the Tribunal. Mr Aldrich quotes from the report:

The new concrete slab that has been laid … allows water to build-up adjacent to the building … and even worse in and around the buildings footing and slab edge. This condition can not only promote high soil moisture and ideal climatic conditions under the slab for termites (b)ut excessive moisture around our treated zone and reticulation system will potentially leach out our treatment from the soil areas.

The reticulation system was installed prior to reinforcing being installed with the pump-up point being installed to the end of the pathway with the box and hose being left for the concreter to raise and lower to the right height once the concreter had his levels correct.

When working with the concreter’s the recognised practice is to leave the hose in a hose in a box not filled in so the concreter can lower or raise the hose and box … to the level he wants. The method that this particular concreter applied has now compromised our termite reticulation and treated zone.

Once the concrete levels have been rectified Organic Pest Control must reinstall and replenish the termite reticulation system. (emphasis added)

34. [34]
    On 23 December 2020 the QBCC issued to Mr Gabriel a direction to rectify in respect of the concrete path as identified in the report of Mr Hayman. Mr Gabriel did not comply with the direction to rectify.
35. [35]
    In order to determine whether Mr Gabriel breached the duty of care he owed to Ms Gwin the provisions of the Civil Liability Act 2003 (Qld) (CLA) must be considered. The CLA applies to any civil claim for damages for harm.^[28]
36. [36]
    The relevant provisions of the CLA may be summarised thus:

    1. A person does not breach a duty to take precautions against a risk of harm unless: the risk was foreseeable (that is, it is a risk of which the person knew or ought reasonably to have known); the risk was not insignificant; in the circumstances, a reasonable person in the position of the person would have taken the precautions.^[29]
    2. In deciding whether a reasonable person would have taken precautions against a risk of harm, the Tribunal is to consider the following (among other relevant things): the probability that the harm would occur if care were not taken; the likely seriousness of the harm; the burden of taking precautions to avoid the risk of harm; the social utility of the activity that creates the risk of harm.^[30]
37. [37]
    I am satisfied it was foreseeable that if Mr Gabriel failed to carry out the concreting work in an appropriate and skilful way and with reasonable care and skill the work would be defective requiring rectification. I am satisfied that the risk was not insignificant.
38. [38]
    I am also satisfied that if Mr Gabriel failed to take care in undertaking the concreting work Ms Gwin would suffer loss in incurring cost in having the defective work rectified. There was no additional burden imposed upon Mr Gabriel to take precautions against the risk of defective work. As a competent and experienced building contractor, Mr Gabriel was required to undertake the concreting work in an appropriate way, free from defects.
39. [39]
    But for Mr Gabriel’s breach of duty Ms Gwin would not be required to expend monies to have the defects rectified.^[31] The defects were the direct result of the way in which Mr Gabriel undertook the concreting work.^[32]
40. [40]
    I am therefore satisfied that Mr Gabriel breached the duty of care he owed to Ms Gwin in undertaking the concreting work.
41. [41]
    In making the findings of breach of duty by Mr Gabriel I accept the evidence of Mr Aldrich, Mr Hayman and Mr Myer to which I have earlier referred.
42. [42]
    I accept the evidence of Mr Aldrich in relation to the required rectification works. I find that the concrete laid by Mr Gabriel was required to be removed and further concrete laid.
43. [43]
    Ms Gwin has had the rectification work undertaken by a licensed contractor. Before the Tribunal is evidence of the payment by Ms Gwin to the contractor in respect of the rectification work in the amount of $22,400. I am satisfied that the rectification work was both necessary and reasonable. I allow the amount claimed in full.
44. [44]
    Ms Gwin claims the cost of the reinstallation of the termite trap. I accept the evidence contained in the report of Mr Aldrich that the reinstallation and replenishment of the termite reticulation system was necessary following the rectification work. The amount claimed by Ms Gwin is $500. There is evidence of the payment of this amount by Ms Gwin. I allow the amount claimed in full.
45. [45]
    Ms Gwin claims the cost of removing rubbish and undertaking temporary repairs to a set of broken stairs. I accept that this cost related to the removal of the concrete laid by Mr Gabriel. There is evidence of the payment of this amount by Ms Gwin and I allow the claim in full.
46. [46]
    Ms Gwin claims the costs of investigations undertaken in relation to the work carried out by Mr Gabriel. I accept that these costs were incurred by Ms Gwin in the conduct of the proceeding and relate to the preparation of the reports by Mr Aldrich and Mr Hayman. The amounts claimed total $1,518 and I allow them in full. I also allow the filing fee paid by Ms Gwin.

Conclusion

47. [47]
    I make the following orders:

    1. The respondent must pay to the applicant the amount of $22,950;
    2. The respondent must pay the applicant’s costs fixed in the amount of $1,876.