Helu v Yuan[2021] QCATA 80

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Mr Helu undertook domestic building work for Mr Yuan. The parties fell into dispute. On 3 March 2021 the tribunal decided the dispute, ordering Mr Helu to pay Mr Yuan $59,010.00 plus costs of $338.20 and dismissing Mr Helu’s counter-application (the decision).
2. [2]
   Mr Helu has appealed the decision and has applied to stay the decision pending the outcome of the appeal. 
3. [3]
   The start of an appeal does not affect the operation of the decision under appeal or prevent the taking of action to implement the decision.^[1] The tribunal may make an order staying the operation of the decision being appealed until the appeal is finally decided.^[2]
4. [4]
   The principles in relation to the granting of a stay of a decision under appeal are well established:^[3]

   1. (a)
      There must be a good arguable case on appeal;
   2. (b)
      The applicant will be disadvantaged if the stay is not ordered;
   3. (c)
      The balance of convenience favours the granting of the stay – that is, the disadvantage to the applicant if the stay is not granted outweighs the disadvantage to the respondent if the stay is granted.
5. [5]
   All of these considerations must be satisfied in order for a stay to be granted.

Prospects of success

6. [6]
   Mr Helu relies upon six grounds of appeal:

   1. (a)
      Ground 1 - The tribunal erred in making findings about the oral agreement between the parties to vary the size of the pool;
   2. (b)
      Ground 2 - The tribunal erred in assessing Mr Yuan’s entitlement to damages;
   3. (c)
      Ground 3 - The tribunal erred in finding that evidence of oral variations to the building contract was inadmissible;
   4. (d)
      Ground 4 - The tribunal erred in applying the provisions of the Domestic Building Contracts Act 2000 (Qld) (DBC Act);
   5. (e)
      Ground 5 - The tribunal erred in not permitting the recovery by Mr Helu of the value of building work undertaken by him on a quantum meruit basis;
   6. (f)
      Ground 6 - The tribunal misapplied the principle in Bellgrove v Eldridge^[4] in assessing Mr Yuan’s entitlement to damages. This ground is related to ground of appeal 2.
7. [7]
   Before considering the grounds of appeal it is appropriate to say something about the building work the subject of the dispute.
8. [8]
   The parties entered into a written contract for the construction by Mr Helu of a swimming pool. The contract price was $46,000.00. The pool was to be 4 metres wide (in total) with an internal width of 3.4 metres, and 8.5 metres long (in total) with an internal length of 8.050 metres. The pool was to range in depth from 1.2 metres to 1.6 metres. The pool design also incorporated a spa on one side of the pool and a feature wall on the opposite side of the pool. The spa was to be 2.6 metres long (in total) with an internal length of 2 metres, and 1.5 metres in width.
9. [9]
   Before the tribunal below was evidence from a building contractor that the pool as constructed had an internal width of 3.18 metres, being 22 centimetres less than the plans and that the spa had an internal length of 1.24 metres, being 76 centimetres less than the plans.
10. [10]
    It would appear common ground between the parties that, during the build, Mr Yuan identified that the dimensions of the pool under construction did not accord with the plans. Mr Helu said that the parties agreed to vary the contract accordingly with an appropriate adjustment of the contract price upon completion. Mr Yuan denied any such agreement to vary the contract.
11. [11]
    In his amended application for a domestic building dispute Mr Yuan claimed damages in the amount of $59,010.00 for the cost of the replacement of the pool and spa. Mr Helu filed a response and counter-application claiming $7,500.00 for the unpaid balance of the contract price and ‘equipment they agreed’. At no time did Mr Helu pay the filing fee on the counter-application nor is there anything on the tribunal record to indicate that payment of the filing fee was waived. It seems clear however that the tribunal below proceeded on the basis that Mr Helu was pursuing a counter-application.
12. [12]
    The learned member gave his decision on 3 March 2021, finding:

    1. (a)
       Oral statements made by the parties about the size of the pool and spa and purporting to vary the contract were not admissible as evidence of additional terms of the contract;
    2. (b)
       Oral statements made by the parties were not sufficient to constitute representations sufficient to induce Mr Helu to continue the building work;
    3. (c)
       The variation claimed by Mr Helu in the amount of $1,500.00 was not in writing and the tribunal could only order recovery of an amount for a non-compliant variation if there were exceptional circumstances, the builder would suffer unreasonable hardship and it would not be unfair to the building owner for the building contractor to recover an amount for the variation;
    4. (d)
       The tribunal was not satisfied that Mr Helu had established a basis to recover an amount for the variation;
    5. (e)
       The tribunal was satisfied that the demolition and reconstruction of the pool was reasonable and necessary to rectify and complete the building work undertaken by Mr Helu and that the cost of this was $59,000.00;
    6. (f)
       The contract did not include heating and the amount claimed by Mr Yuan for this item was disallowed;
    7. (g)
       Liquidated damages of $10.00 were allowed;
    8. (h)
       Mr Helu was not entitled to recover the final payment under the contract of $6,000.00.
13. [13]
    The learned member cited Codelfa Construction Pty Ltd v State Rail Authority of NSW^[5] in support of the passage from the reasons that ‘(w)here a contract is reduced to writing, oral evidence is not admissible to add to or vary the contract unless the language is ambiguous.’ The learned member was here referring to the parol evidence rule which might be succinctly stated thus: extrinsic evidence cannot be used to explain the meaning of the written terms of a contract - the court must interpret the contract by giving the terms of the contract their plain and ordinary meaning. One of the exceptions to the parol evidence rule is that extrinsic evidence may be considered in construing a contract if the terms of the contract are ambiguous.^[6]
14. [14]
    It is not entirely clear from the reasons why the learned member considered inadmissible the evidence of the parties concerning the asserted agreement to vary the contract.  The evidence ruled inadmissible does not appear to have gone to the issue of interpreting the contract. Rather, the evidence appears to have been relevant to whether there had been a subsequent agreement between Mr Helu and Mr Yuan to vary the scope of works and the contract price. Unless there is a contractual stipulation to the contrary, or there is a statutory requirement to the contrary, parties to a written contract may agree orally to vary the contract.
15. [15]
    The schedule to the QBCC level 2 renovation, extension and repair contract was in evidence however the general conditions were not. Neither party appears to have contended in the proceedings below that the contract prohibited oral variations. In the reasons, the learned member referred to the circumstances in which a building contractor was entitled to recover an amount for variations. It seems reasonably readily apparent from the reasons that the learned member was referring to the provisions of the Domestic Building Contracts Act 2000 (Qld) (“DBCA”). This conclusion can be inferred from, firstly, the language used by the learned member in referring to the recovery of amounts for variations which mirrors that found in the DBC Act and, secondly, the authorities cited by the learned member which relate to the application of the DBC Act.
16. [16]
    The contract between Mr Helu and Mr Yuan was not governed by the provisions of the DBC Act but rather by the Queensland Building and Construction Commission Act 1991 (Qld). Under the repealed DBC Act, unless a building contractor complied with strict requirements in relation to variation works, the building contractor was not permitted to recover an amount for a variation absent an order of the tribunal. Further, under the DBC Act, a builder was not entitled to recover an amount for non-compliant variations on a quantum meruit basis. The QBCC Act however does not restrict the recovery by a builder of an amount for non-compliant variations as did the DBC Act. The somewhat draconian variation provisions under the DBC Act did not, upon the repeal of the Act, find their way into Schedule 1B of the QBCC Act. If, as it would appear, the learned member in fact applied the provisions of the DBC Act in determining Mr Helu’s entitlement to recover for variation works, this was an error.
17. [17]
    The learned member did not permit recovery by Mr Helu of the balance owing under the contract. However the amount remaining unpaid was relevant in assessing Mr Yuan’s entitlement to damages. The principles relevant to the assessment of damages in building cases are well established. As the learned member correctly observed, where it is the building contractor in breach, the building owner is entitled to be placed in the same position the owner would have been in had the contract been performed according to its terms. This is subject to the requirement that the remedial works are necessary and reasonable,^[7] and in calculating the building owner’s entitlement to damages, credit must be given for any unpaid part of the contract price.^[8] While the learned member addressed the first requirement, it appears the second requirement was not considered. 
18. [18]
    It follows from the foregoing that it is at least arguable that there was error in the decision below. I am satisfied that Mr Helu has a good arguable case in the appeal.  

Disadvantage to the appellant if the stay is not granted

19. [19]
    A stay will be granted on the basis that compliance with the decision under appeal will cause the appellant inconvenience.^[9] The disadvantage to the appellant must be sufficiently serious that the appeal would be pointless if the stay is not granted and the disadvantage to the appellant impossible to put right. The Queensland Court of Appeal has stated:

Accordingly, the focus of this Court's attention must be upon whether Cook's appeal might be rendered nugatory by a refusal of the stay and whether Cook would be irremediably prejudiced if the stay were not granted and its appeal were ultimately to be upheld.^[10]

20. [20]
    Mr Helu fails to address the issue of the disadvantage he might suffer if the stay is not granted. 
21. [21]
    Accordingly, Mr Helu has not demonstrated that this consideration weighs in favour of the granting of the stay.

Balance of convenience considerations

22. [22]
    As I have observed, Mr Helu has offered no evidence nor made any submissions addressing the disadvantage he will suffer if the stay is not granted. The relative disadvantage to Mr Helu if the stay is not granted is relevant to balance of convenience considerations.
23. [23]
    There is nothing before me to suggest, for example, that there is a real risk that the decision amount will be dissipated or removed from the state by Mr Yuan pending the hearing of the appeal or that compliance with the orders under appeal would result in Mr Helu’s bankruptcy. Even if the latter were a real possibility, the fact that compliance with the judgment would result in the applicant becoming bankrupt will not necessarily weigh in favour of granting a stay.^[11]
24. [24]
    In the absence of any meaningful submissions from Mr Helu, I am not satisfied that the balance of convenience favours the granting of the stay.

Conclusion

25. [25]
    As I earlier observed, in order to be successful in the stay application Mr Helu is required to establish all three requirements relevant in determining such applications. Whilst I am satisfied that Mr Helu has an arguable case on appeal, he has failed to address, and therefore satisfy, the other requirements.
26. [26]
    The application to stay the decision of the tribunal is refused.