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Nicholls & Anor v Kline Industries International Pty Ltd[2022] QCATA 103

Nicholls & Anor v Kline Industries International Pty Ltd[2022] QCATA 103

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Nicholls & Anor v Kline Industries International Pty Ltd [2022] QCATA 103

PARTIES:

serena nicholls

lyn nicholls

(applicants/appellants)

v

Kline industries international PTY LTD t/as KLINE HOMES

(respondent)

APPLICATION NO:

APL196-20

ORIGINATING APPLICATION NO:

BDL056-16

MATTER TYPE:

Appeals

DELIVERED ON:

4 July 2022

HEARING DATE:

19 May 2021

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown

ORDERS:

  1. The time to file the application for leave to appeal or appeal is extended.
  2. The application for leave to appeal is refused.
  3. The appeal is dismissed.
  4. The parties must file in the Tribunal two (2) copies and exchange (1) copy of submissions on the costs of the appeal by 4:00pm on 18 July 2022.
  5. The parties must file in the Tribunal two (2) copies and exchange (1) copy of submissions in response by 4:00pm on 18 July 2022.
  6. The submissions on costs filed by the parties in accordance with these orders must not exceed three (3) pages in length.
  7. The Appeal Tribunal will decide the cost of the appeal on the papers after 18 July 2022.

CATCHWORDS:

APPEAL AND NEW TRIAL – PROCEDURE-QUEENSLAND – TIME FOR APPEAL – EXTENSION OF TIME – WHEN REFUSED – CONTRACTS – BUILDING, ENGINEERING, AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS –  where applicants entered into a building contract with the respondent – where survey report erroneous – whether survey report formed part of contract documents – whether applicants liable for errors in the survey report – where second survey report resulted in variations to the contract – where the building works had reached practical completion save for works under an extended works agreement – where finding of finding practical completion not appealed – where applicants found liable for the increased building costs resulting from the variations to the contract – whether tribunal erred in finding material errors in first survey report – whether tribunal erred in accepting expert evidence – whether tribunal erred in finding retaining wall was landscape feature only and not structural – whether tribunal erred in finding exceptional circumstances pursuant to s 84(4) of the Domestic Building Contracts Act 2000 (Qld) in respect of variations claimed by the respondent – whether tribunal erred in the exercise of the discretion to allow recovery of amounts for non-compliant variations

Building Regulation 2006 (Qld) schedule 1, s 3

Domestic Building Contracts Act 2000 (Qld) s 84, s 84(4), s 84(4)(a)(i), s 84(4)(b)

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 61(1)(a), s 61(3), s 92, s 93(1)(a), s 142(1), s 142(3)(a)(ii), s 142(3)(a)(iii), s 142(3)(b), s 143(4)(b), s 143(5)(c), s 146, s 147, s 147(2), s 147(3), Sch 3

Allaro Homes Cairns Pty Ltd v O'Reilly & Anor [2012] QCA 286

Amundsen v Queensland College of Teachers [2011] QCATA 2

Australian Broadcasting Commission v Australasian Performing Rights Association (1973) 129 CLR 99

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139

Benson v Ware [2012] QCATA 24

Colagrande & Anor v D A Radic Pty Ltd trading as David Radic Prestige Homes [2019] QCATA 176

Coulter v Ryan [2006] QCA 567

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640.

Ericson v QBCC [2014] QCA 297

GDLA v GMG [2017] QCATA 18

Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455

House v The King (1936) 55 CLR 499

Housing Commission of New South Wales v Tatmar Pastoral Co. Pty Ltd [1983] NSWLR 379

Kline Industries International Pty Ltd t/as Kline Homes v Nicholls [2020] QCAT 227

Kline Industries International Pty Ltd t/as Kline Homes v Nicholls (no. 2) [2020] QCAT (unreported)

Legal Services Commissioner v Bradshaw [2009] QCA 126

Miller & Anor v Lida Build Pty Ltd [2013] QCA 332.

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451

Partington & Anor v Urquhart [2015] QCATA 67

Photo Production Ltd v Securicor Transport Ltd [1980] AC827

Pickering v McArthur [2005] QCA 294

Ryan v Worthington [2015] QCA 201

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Spalding v Kent [2022] QCATA 52

St Clair v Timtalla Pty Ltd [2010] QCA 304

Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43

Applicant:

No appearance

Respondent:

Mr S Taylor of counsel instructed by Robert Duncan Solicitors

REASONS FOR DECISION

What is this appeal about?

  1. [1]
    Kline Industries International Pty Ltd t/as Kline Homes (‘Kline’) built a house for Serena Nicholls and Lyn Nicholls (‘the Nicholls’).  There was already a dwelling on the land. The Nicholls planned to strata title the two houses.
  2. [2]
    The parties fell into dispute during the course of the build. Kline issued a notice of practical completion and final stage payment claim to the Nicholls. The Nicholls refused to pay. Kline commenced proceedings in the Tribunal claiming the amount it said was owing by the Nicholls under the contract. The Nicholls counter claimed for damages for incomplete and defective work.
  3. [3]
    On 17 March 2020, the Tribunal handed down the first decision. [1] The Tribunal found that Kline was entitled to the full amount of its claim totalling $82,302.59. On the counter application, the Tribunal allowed the Nicholls’ claim for rectification of defective work in the amount of $6,000.00 and liquidated damages in the amount of $555.00. The orders for payment were stayed pending submissions from the parties regarding interest and costs.
  4. [4]
    On 25 June 2020 the Tribunal handed down the second decision. [2]  Orders were made reflecting the orders made on 17 March 2020. Further orders were made for the payment of interest and costs.
  5. [5]
    In the application for leave to appeal or appeal, the Nicholls appeal the second decision of the Tribunal although, as these reasons reveal, they in fact seek to appeal both the first and second decisions.

Appeals – the statutory framework

  1. [6]
    A party to a proceeding may appeal a decision of the tribunal.[3] A decision includes a final decision.[4] To appeal a decision of the tribunal that is not the final decision in a proceeding, leave is required.[5] An appeal on a question of law is as of right. To appeal a question of fact or mixed law and fact, the leave of the appeal tribunal is required.[6] The principles governing the granting of leave to appeal are well established: there is a reasonably arguable case of error in the primary decision; there is a prospect that the applicant will obtain substantive relief; leave is necessary to correct a substantial injustice caused by error; and that there is a question of general importance upon which further arguments and a decision of the Appeal Tribunal would be to the public advantage.[7]
  2. [7]
    In deciding an appeal on a question of law only, the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision, or set aside the decision and return the matter to the Tribunal below for reconsideration.[8] The Appeal Tribunal may only substitute its own decision if the determination of the question of law decides the appeal in its entirety in favour of the appellant.[9]
  3. [8]
    In deciding an appeal on a question of fact or mixed law and fact, subject to leave to appeal being granted, the appeal must be decided by way of rehearing.[10] In deciding the appeal the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision, or set aside the decision and return the matter to the Tribunal below for reconsideration.[11]

The decision at first instance

  1. [9]
    It is appropriate to outline the background to the dispute before turning to the grounds of appeal advanced by the Nicholls.
  2. [10]
    The Nicholls lived in a house on the Gold Coast. They decided to build another house on the same lot and then to strata title the houses. In mid-2014, the Nicholls approached Kline to build the second house.[12] In the period between when the Nicholls first contacted Kline and the signing of the contract the parties engaged in extensive negotiations.
  3. [11]
    Of significance in the current appeal, the Nicholls provided Kline with a contour survey report dated 24 May 2013 prepared by Alan Sullivan & Associates, consulting surveyors (the first survey report). The first survey report was used by Kline’s draftsman, Stuart Osman, to develop initial plans for the proposed second house.  It was also used by Mr Jason Anderson of All Round Scaffolding, one of Kline’s sub-contractors, to quote scaffolding costs for the build.
  4. [12]
    Following substantial amendments to the preliminary plans requested by the Nicholls, a building contract was signed on 23 October 2014.  The contract price was $400,342.00 inclusive of GST.  The price was agreed after the parties varied the preliminary plans to enable the Nicholls to obtain finance.
  5. [13]
    A set of plans, ‘Rev C’, was provided to the Nichols by Mr Osman on 27 October 2014, that is, after the parties had signed the building contract. Kline says that it became apparent after Rev C was developed that the first survey plan was incorrect. An updated survey was sought and provided by Alan Sullivan & Associates on 18 November 2014, which showed differences to the slope gradient on the lot (the second survey report). After the preparation of the Rev C plans, the parties worked through various further editions of the plans, ultimately leading to the Rev J plans.[13] The Rev J plans, which reflected a decrease in the size of the house, resulted in some building costs claimed by Kline increasing and some costs decreasing.  These additional costs related to framing, redrafting, external cladding, fix-out materials, and scaffolding. The total increased costs were $42,448.22. The decrease in costs, totalling $7,711.29, related to gyprock, roof, tiles, waterproofing and windows.
  6. [14]
    The second survey report resulted in variations to the contract and, ultimately, variations to the cost of the build.  As referred to above, the contents of the report also resulted in changes to scaffolding quotes and costs by All Round Scaffolding.
  7. [15]
    The contract incorporated a Client Confirmation of Building Products and an Excluded Works Agreement (EWA).[14] The EWA provided for a number of items of excluded works: $17,865 for timber flooring; $3,000 in reduction to window changes; $10,000 deck extension to existing house; $6,243 back landings; $1,862 water tank and pump; $4,300 air conditioning. These items were to be completed once the Nicholls refinanced their loan and paid to Kline $43,270.00. The EWA provided that the Nicholls would indemnify Kline in respect of any loss associated with the incomplete works until the payment to Kline was made.[15]
  8. [16]
    In the reasons for the first decision, the learned member found:
    1. the Nicholls were liable for the errors in the first survey report;[16]
    2. the building works had reached practical completion when Kline issued a Notice of Practical Completion on 22 September 2015;[17]
    3. the building contract was no longer on foot;[18]
    4. Kline completed all works under the contract save for the works under the EWA;[19]
    5. Kline was entitled to recover provisional sums claimed in the amount of $25,038.56;[20]
    6. Kline was entitled to recover the amount of $13,232.22 being the increased building costs the result of the change in the plans from Rev C to Rev J on the basis that the increase in costs was a deemed variation under clause 13.5 of the contract;[21]
    7. Kline was entitled to recover an amount of $3,000.00 in respect of works performed in connection with a window;[22]
    8. Kline was not liable for the installation of a sixteen-tread external staircase at the rear of the dwelling;[23]
    9. Kline was entitled to recover additional scaffolding costs of $29,216.00 in accordance with s 84 of the Domestic Building Contracts Act 2000 (Qld) (DBCA) on the following bases:
    1. i)
      There were exceptional circumstances (s 84(4)(a)(i) of the DBCA);[24]
    2. ii)
      It would not be unfair to the Nicholls for Kline to recover an amount for the variation (s 84(4)(b));[25]
    1. Kline was entitled to recover a total of $82,309.59;[26]
    2. The Nicholls were not entitled to recover the amount claimed of $45,000.00 for landscaping costs on the basis that the landscaping as undertaken by Kline complied with the terms of the contract;[27]
    3. The Nicholls were not entitled to recover any amount for flooring on the basis that flooring was not, and never was, intended to be included in the contract but was to be installed under the EWA;[28]
    4. In respect of the claim by the Nicholls for rectification of defective building work:
    1. i)
      Retaining walls – the learned member preferred the evidence of Kline’s expert, Bevan Sim, that the building work was not defective;[29]
    2. ii)
      Exterior painting; front entry step; concrete doming around steel columns; bottom tread of staircase. The learned member accepted the evidence of the experts that these items of work were defective. In the absence of evidence of the cost of rectification work, the Tribunal allowed $6,000.00 for such cost;[30]
    3. iii)
      Clean up and removal of waste – the learned member did not award damages in the absence of the claim being quantified;[31]
    1. The claim by the Nicholls for loss of rental income totalling $126,100.00 was not allowed on the following bases:
    1. i)
      Kline was not in breach of the contract. The Nicholls had not paid the contract price and were not entitled to possession of the property;[32]
    2. ii)
      The Nicholls had made no attempt to mitigate their loss;[33]
    1. The claim by the Nicholls for solatium was not allowed on the basis that there was no evidence of an adverse psychological condition as a result of the dispute;[34]
    2. The date for completion under the contract was 3 June 2015. The date of practical completion was 22 September 2015, a delay of 111 days. The claim for liquidated damages by the Nicholls in the amount of $555.00 was allowed.[35]

The appeal proceedings

The grounds of appeal

  1. [17]
    The Nicholls raise nine grounds of appeal, of which eight relate to the first decision:
    1. the learned member erred in finding there were material errors in the first survey report;
    2. the learned member erred in finding the first survey report was a ‘contract document’ which gave rise to a warranty from the Nicholls to Kline Industries;
    3. the learned member erred in concluding that the rear stairs could not be built, contrary to indisputable facts;
    4. the learned member erred by not deciding for himself whether the contract had been complied with by building alternative stairs;
    5. the learned member erred by relying upon expert evidence that the slope discrepancy would not have been discovered by a site inspection;
    6. the learned member erred in accepting evidence about survey plans from experts who did not have material training, qualifications, or experience in surveying;
    7. the learned member erred by accepting evidence that engineering or building approval was required for a ‘retaining wall’ on the lot, and then by making a contradictory finding that approval was not required on the basis that the wall was not ‘structural’; and
    8. the learned member erred by finding that the additional scaffolding costs constituted exceptional circumstances pursuant to section 84(4) of the DBCA.
  2. [18]
    The remaining ground of appeal relates to the second decision. The Nicholls say that the learned member failed to give adequate reasons for why he did not consider the Nicholls’ submissions on interest and costs and if the learned member did consider them, the learned member failed to intellectually engage with the submissions. Although somewhat inelegantly expressed, this ground of appeal may be understood to be a failure to give reasons ground on the basis that the reasons make no reference to submissions filed by the Nicholls.

The appeal hearing – the failure by the appellants to appear

  1. [19]
    At the hearing of the appeal Kline was represented by counsel. The Nicholls did not appear. Notice of the hearing was provided to the parties by the Tribunal registry by email on 5 May 2021. The notice was emailed to the counsel who had formerly represented the Nicholls and to another email address for the Nicholls. The other email address to which notice of the hearing was sent was an address from which Ms Serena Nicholls had forwarded emails and to which emails had been forwarded by the registry (and, it should be observed, by the Nicholls’ former barrister). I was therefore satisfied that the Nicholls had been given notice of the hearing of the appeal.
  2. [20]
    Attempts were made at the hearing to telephone the Nicholls after it became apparent that neither of the appellants had attended at the Tribunal in person. Despite delaying the commencement of the hearing, no telephone contact could be made with either Serena Nicholls or Lyn Nicholls.
  3. [21]
    Kline sought to proceed with the appeal hearing and to have the appeal determined on the merits.  By s 93(1)(a) of the QCAT Act, the Tribunal may hear and decide a matter in the absence of a person in circumstances where the Tribunal is satisfied that the person has been given notice of the hearing in accordance with s 92 of the QCAT Act. Having been satisfied that the Nicholls had been given notice of the hearing, and in the absence of any explanation or excuse for their failure to attend, I proceeded to hear the matter in the absence of the Nicholls.

Preliminary issues

  1. [22]
    Kline says that the application for leave to appeal or appeal has been filed out of time in respect of both decisions by the Tribunal.
  2. [23]
    Kline also says that the Nicholls require leave in respect of each of the nine grounds of appeal.  Kline says grounds of appeal 1 to 8 involve questions of fact or mixed law and fact, for which leave to appeal is required.[36] Kline says ground 9 relates to a decision on costs, for which leave to appeal is also required.[37]
  3. [24]
    In their submissions accompanying the application for leave to appeal or appeal, the Nicholls refer to applying to rely upon fresh evidence. Subsequently, in their further submissions the Nicholls expressly disavow any intention to rely upon new evidence. The Appeal Tribunal directed the parties to file an application should fresh evidence be sought to be relied upon. Neither party filed an application.

Does the application for leave to appeal or appeal relate to the first decision or the second decision or both?

  1. [25]
    In their appeal submissions the Nicholls say that the second decision was the final decision of the Tribunal and the operative decision for the purposes of any appeal. They say that the first decision was an interim decision. The grounds of appeal traverse the reasons for both the first and second decisions. What is not clear from the Nicholls’ submissions is how they say the first decision and the reasons for the decision should be treated in this appeal if the operative decision is, as they say, the second decision. 
  2. [26]
    It seems clear to me that the application for leave to appeal or appeal, despite referring to the date of the second decision, was in fact intended to relate to both the first and second decisions. I approach the determination of the application for leave to appeal or appeal filed by the Nicholls on this basis.

Was the application for leave to appeal or appeal filed within time?

  1. [27]
    The Appeal Tribunal’s jurisdiction to hear and determine an application for leave to appeal or an appeal is found in Part 8, Division 1 of the QCAT Act.  Relevantly, s 143, to which I have earlier referred, provides the procedure for appealing a decision of the Tribunal.  An appeal must be filed within 28 days after the day on which a person is given written reasons for the decision being appealed against.[38]
  2. [28]
    The first decision and the reasons for the decision were given to the parties on 24 March 2020 by email from the Tribunal registry. The second decision and reasons for the decision were given to the parties on 22 June 2020 by email from the Tribunal registry. The time to file an appeal in respect of the first decision expired on 21 April 2020. The time to file an appeal in respect of the second decision expired on 23 July 2020. The application for leave to appeal or appeal was filed on 16 July 2020.
  3. [29]
    There are three issues falling for determination. Was the first decision an interlocutory decision or a final decision? If the application for leave to appeal or appeal relates to both the first and second decisions, has the appeal been filed within time? If the application for leave to appeal or appeal has not been filed within time, should time be extended?

i.   Was the first decision an interlocutory decision or a final decision?

  1. [30]
    At [163] of the reasons for the first decision the learned member refers to making ‘orders by way of interim order.’ The parties were directed to file submissions on any award of interest and costs. After considering the submissions, the Tribunal below made the second decision in the form of final orders, giving effect to the first decision and deciding the issues of interest and costs.
  2. [31]
    A ‘final decision’ of the Tribunal is one that finally decides the matters the subject of the proceeding.[39]
  3. [32]
    I find that the first decision was the final decision of the Tribunal. The matters in dispute between the parties were: what was the proper construction of the contract; who was responsible for the errors in the first survey report and what flowed from this; had the building works reached practical completion; Kline’s entitlement to the final progress claim, an amount for provisional sums and amounts associated with variation works; was there defective building work and if so were the Nicholls entitled to recover an amount for rectification work; was there incomplete building work and if so were the Nicholls entitled to recover an amount for completion work; were the Nicholls entitled to recover amounts for consequential loss and liquidated damages. All of these matters were decided in the first decision. The only matters left to be determined related to interest and costs. Notwithstanding the reference in the first decision to ‘orders by way of interim order’ it is clear that the decision finally decided the substantive issues in dispute between the parties. That the issue of interest and costs remained to be determined does not mean that the first decision should be considered interlocutory.[40] Nor is the reference in the first decision to interim orders determinative of the nature of the decision. The reasons for the first decision, and the orders made, clearly address all of the substantive issues in dispute between the parties.
  4. [33]
    Further support for this conclusion may be found in the following passage from the judgment of the Court of Appeal in Miller & Anor v Lida Build Pty Ltd:[41]

The definition of “final decision” is sufficiently flexible as to permit that part of a decision of an appeal tribunal as finally decides a matter or matters between the parties to be characterised as a final decision for the purposes of s 150, notwithstanding that it may not have finally decided every one of the matters between them.[42]

ii.   Has the application for leave to appeal or appeal been filed within time?

  1. [34]
    Having found that the first decision was the final decision of the Tribunal, it follows that the application for leave to appeal or appeal, insofar as it relates to the first decision, has been filed out of time.

iii. Should time be extended for the filing of the application for leave to appeal or appeal in respect of the first decision?

  1. [35]
    The Tribunal may, by order, extend a time limit fixed for the start of a proceeding by the QCAT Act or an enabling Act.[43] The Tribunal may not extend or shorten a time limit if to do so would cause prejudice or detriment, not able to be remedied by an appropriate order for costs or damages, to a party or potential party.[44]
  2. [36]
    In Reeve v Hamlyn[45] Carmody J said the following about the exercise of the discretion to extend time:

… the discretion should not be exercised mechanically or automatically in circumstances where granting an extension of time to comply with procedural requirements would not cause irremediable detriment or prejudice to a party or potential party to the proceedings. The discretion must be exercised in accordance with the applicable common law and equitable principles, and any relevant statutory prescriptions. The Tribunal must also assign appropriate weight to the requirement of finality of proceedings, expedition in filing appeals, the avoidance of stale actions or appeals, and the prospects of parties and non-parties changing their position in reliance on the original Tribunal decision. [46]

  1. [37]
    The relevant considerations when considering an application to extend time are:
    1. (a)
      the duration of the delay;
    2. (b)
      whether there is a satisfactory explanation for the delay;
    3. (c)
      the merits of the application and its prospects of success;
    4. (d)
      the likelihood of any prejudice to other parties or potential parties; and
    5. (e)
      whether the extension of time is in the interests of justice.[47]
  2. [38]
    Kline’s submissions address these considerations. The Nicholls’ submissions do not.

Duration of the delay

  1. [39]
    The appeal against the first decision was filed a little over 3 months out of time. Of itself, this factor weighs against extending time however the delay must be seen in the context of the explanation by the Nicholls for the delay in filing the appeal.

Explanation for the delay

  1. [40]
    In their submissions the Nicholls do not say when they received either the first decision or the second decision and accompanying reasons however as referred to earlier in these reasons, I am satisfied that the parties were given the first decision on 24 March 2020 and the second decision on 22 June 2020. The second decision and reasons, dated 25 June 2020, post-date the email to the parties. Although somewhat anomalous, nothing turns on this.
  2. [41]
    The submission by the Nicholls is, in essence, that the operative decision is the second decision and that the appeal has not been filed out of time. In light of my finding that the first decision was the final decision for the purposes of this appeal, I infer that the explanation for delay is the mistaken belief by the Nicholls as to the effect of the first and second decisions. This is reflected in the submission by the Nicholls that ‘… it was impossible for them to meet a retrospective timeframe, and they did not delay.’ Presumably the ‘retrospective timeframe’ is a reference to the possibility of the Appeal Tribunal finding that the operative decision was the first decision.
  3. [42]
    Ms Serena Nicholls is a legal practitioner. She should have been aware of the relevant time limits for the filing of the appeal. Mistake is generally not a sufficient explanation for delay in adhering to time limits for the filing of documents. On the other hand, I accept that the reference in the first decision to an ‘interim order’ may have led the Nicholls to form the belief that time to appeal the decision would not run until further orders were made by the Tribunal. This is borne out by the relative speed with which the Nicholls acted in filing the application for leave to appeal or appeal after receiving the second decision.

The merits of the appeal and the prospects of success

  1. [43]
    I am satisfied that the Nicholls have at least an arguable case and that appeal could not be said to be hopeless or without merit.

The likelihood of any prejudice to Kline

  1. [44]
    The obvious prejudice to Kline is that it faces the prospect of the Nicholls achieving success in whole or in part if time to appeal is extended.

Whether extending time is in the interests of justice

  1. [45]
    In all the circumstances, balancing the considerations to which I have referred, I am satisfied that it is appropriate to extend the time for the filing of the application for leave to appeal or appeal in respect of the first decision.

Consideration of the grounds of appeal

Ground of appeal 1 - the learned member erred by finding there were material errors in the first survey report.

  1. [46]
    The Nicholls say that the learned member erred by accepting evidence which was glaringly improbable or self-contradictory or contrary to indisputable fact.  The Nicholls challenge three findings by the learned member:
    1. (a)
      his acceptance of the evidence of Kline’s expert, Mr Sim, that there was a material error in the first survey report which resulted in the need for an updated survey plan;
    2. (b)
      his acceptance of Mr Sim’s evidence that a site inspection would not necessarily have revealed that the first survey report was inaccurate; and
    3. (c)
      his acceptance of Mr Sim’s evidence that the ‘first survey report indicated that the front boundary and the land was larger than it was’.
  2. [47]
    The Nicholls seek to cast this ground of appeal as involving a question of law ostensibly on the basis that there was no evidence to support the findings complained of. It is an error of law to make a finding of fact without any evidence to support the finding.[48]  However the submissions by the Nicholls are not consistent with a ‘no evidence’ ground.
  3. [48]
    The learned member said the following about the errors in the first survey report and his assessment of the evidence of Mr Sim and the Nicholls’ expert, Mr Dyer:

[62] Mr Kline engaged Stuart Osman to draw plans.  Mr Kline frequently used Mr Osman as a draftsman.  However, he was engaged as an independent contractor.  He did not deal with the Homeowners.

[63] The Contract was signed on 23 October 2014.  Mr Kline says that the day after the Contract was signed he commenced preparations and reviewed the plans being Revision C prepared by Stuart Osman.

[64] On 27 October 2014 Kline Homes wrote to the Homeowners advising that there might be an error in the First Survey Report.  The Second Survey Report is dated 18 November 2014 and confirmed that the gradient of the slope was steeper than originally depicted in the First Survey Report.  That necessitated the plans to be redrawn by Stuart Osman.

[65] The error in the contour plans also caused problems with the placement of the house.  That was because the First Survey Report indicated that the front boundary and the land was larger than it was.  It was necessary in redesigning the house to make it narrower to fit on the smaller area.  The Homeowners were advised of this problem in around mid-November 2014.  Kline homes recommended the homeowners make an application for a relaxation from the local authorities for moving position of the works.  This they did and the relaxation was approved.

[66] Ms Nicholls submitted that Mr Kline conceded that he had considered the extra costs associated with the new survey plans.  Mr Kline does not recall any such concession.  In any event it would not affect the additional costs incurred in amending the plans.

[67] Under the Contract the Homeowners were responsible for the errors of the First Survey Report and warranted the accuracy of the documents.  The Homeowners by paying for the revised plans by implication accepted the error as theirs.

[68]  It is alleged that Mr Kline should have inspected land prior to the signing of the Contract and had he done so he would have been aware of the discrepancy in the First Survey Report.  Mr Dyer thought Mr Kline should have checked the site, whereas, Mr Sim considered the builder had no reason to doubt the accuracy of the plan.  He also testified that a site inspection may not necessarily have revealed the inaccuracy of the First Survey Report.

[69] I should interpolate here that I did not find Mr Dyer to be an impressive witness.  During cross-examination his answers, frequently, were not responsive to the questions being asked and he often volunteered answers that were not responsive but advanced the Homeowners’ case.  Essentially, he was an advocate for the Homeowners.  For these reasons, his evidence has to be approached with caution.  I am hesitant to accept his opinion unless corroborated by other evidence.  Where his opinion disagrees with Mr Sim, I prefer Mr Sim’s evidence.[49] (emphasis added)

  1. [49]
    The Nicholls seek to characterise the first survey report as containing ‘irregularities’ rather than errors. This was not the case run by the Nicholls below nor for the following reasons is it an accurate characterisation. The submission by the Nicholls that the first survey report merely contained irregularities rather than errors was not put to Kline’s witnesses nor the Nicholls’ own expert. Indeed, the focus of the cross-examination of Mr Kline was upon Kline’s liability for the increased build costs associated with the amendments as a result of the error in the first survey plan. 
  2. [50]
    The evidence of the experts in the joint report was that the first and second survey plans were different.[50] The evidence of Mr Sim at the hearing was that the first and second survey plans were ‘drastically different’.[51] In the joint expert report Mr Sim said that the first survey plan was incorrect to the extent it would have been impossible to build the building in accordance with the original building plans.[52]
  3. [51]
    A finding of fact that is perverse, or contrary to the overwhelming weight of the evidence, or against the evidence and the weight of the evidence, or ignores the probative force of the evidence which is all one way or is a finding that no reasonable person could have made is an error of fact and not an error of law.[53] These are the very types of errors asserted by the Nicholls. Ground of appeal 1 raises a question of fact, not a question of law.
  4. [52]
    The Appeal Tribunal observed in Spalding v Kent:[54]

It is not an appellable error to prefer one version of the facts to another, or to give less weight to one party’s case than he or she thinks it should receive. Findings of fact will not normally be disturbed if they have rational support in the evidence, even if another reasonable view is available. Where reasonable minds may differ, a decision cannot properly be called erroneous, simply because one conclusion has been preferred to another possible view.[55]

  1. [53]
    The Nicholls submit that the evidence of Mr Kline, Mr Sims and Mr Osman was inherently flawed.  They refer to various aspects of the evidence including: evidence about the disparity in height of the rear stairs between Rev C (which drew them as being 450mm) and the final outcome of the build which would have required stairs 4.8 meters in height; Mr Kline’s evidence on his first sight inspection after the contract was signed that the elevations ‘didn’t look right’; and the evidence of the scaffolder that the posts (which were ultimately built on plans incorporating the second survey plan’s scale) were substantially taller than he had anticipated based on the first survey report. However, none of this suggests that the learned member was wrong to ultimately prefer the evidence of Mr Sims over Mr Dyer. That the Nicholls disagree with the evidence of Mr Sims is not an appealable error.
  2. [54]
    It is clear however from the evidence to which I have referred that the learned member was entitled to make the findings the Nicholls seek to impugn.
  3. [55]
    There was no error by the learned member. This ground of appeal is not made out.

Ground of appeal 2 - the learned member erred in finding the first survey report was a ‘contract document’ which gave rise to a warranty from the Nicholls to Kline Industries.

  1. [56]
    Clause 13 of the Contract provided:

13.1 The owner warrants the accuracy of the contract documents supplied by the owner and the suitability of the design, materials and methods of working each specified therein.

13.2 If either party becomes aware of any error, ambiguity or inconsistency in or between the contract documents, that party must               within 5 working days of becoming aware, give the other party written notice detailing the problem.

13.3 The owner must within 5 working days of becoming aware of such problem, give to the builder such written instructions as are necessary to enable the builder to proceed with the works.

13.4 If the owner does not give written instruction as required by subclause 13.3, the owner is deemed to have instructed that the builder carry out the works using the order of precedence.

13.4 If:

  1. (a)
    compliance with the owner’s instructions involves more or less cost than a reasonable builder would have anticipated on signing of this contract; and
  1. (b)
    the problem is not solely caused by documents provided by the builder.

The owner is deemed to have asked for a variation for the builder to comply with those instructions.

  1. [57]
    The Nicholls do not take issue with the finding by the learned member as to the effect of a document falling within clause 13.1. Rather, this ground of appeal relates to the finding that the first survey plan was a document falling within the scope of ‘the contract documents’. 
  2. [58]
    The Nicholls say that, properly construed, the contract documents are limited to the documents described in item 12 of schedule 1 of the contract.  They say that clause 13.1 is inserted purely for the benefit of Kline and should be read down to the extent of any ambiguity,[56] and that the intention of the clause is to cover a circumstance in which a building owner provides to a builder a completed home plan which the builder will simply build.  The Nicholls say that a construction which indicates that any ‘plan’ which is given to a builder by a homeowner is subject to a warranty would be unreasonably broad and problematic.
  3. [59]
    Kline says that the interpretation pressed by the Nicholls is impermissibly narrow.
  4. [60]
    The proper construction of a contract is a question of law.[57]
  5. [61]
    Upon a proper construction of clause 13 of the contract, the accuracy of any contract document supplied by the Nicholls was warranted by the Nicholls. The issue for consideration in this appeal is, did the learned member err in proceeding on the basis that the first survey plan was a contract document?
  6. [62]
    Whether the first survey plan was a contract document does not appear to have been in issue in the proceeding below. Perhaps it would be more correct to say that neither of the parties appear to have turned their minds to the issue.
  7. [63]
    The general principles applicable to the construction of a contract are:
    1. (a)
      ascertain the meaning which the words of the contract would convey to a reasonable businessperson with the knowledge of the contracting parties;[58]
    2. (b)
      identify the meaning of the words used, and then give effect to that meaning within the context of the contract construed as a whole;[59]
    3. (c)
      a common-sense approach should be adopted to give the contract an interpretation that avoids absurdity and in which all the parts of the contract are given effect and operate harmoniously together.[60]
  8. [64]
    Clause 37 of the contract is an interpretation clause. The ‘contract’ is defined as ‘the agreement between the parties set out in the contract documents’. One then turns to the meaning of ‘contract documents’ which is defined as ‘… these general conditions, any special conditions, the specification, the plans and other documents specified in item 12’.  Item 12 is contained in schedule 1 of the contract. The contract includes five schedules. The schedules are stated to form part of the contract. The documents referred to in item 12 are identified as: client confirmation of building products; formal tender; working drawings; engineering drawings. 
  9. [65]
    The words in clause 37 ‘and other documents specified in item 12’ have particular meaning when read with item 12 in schedule 1. At item 12, after the ‘other contract documents’ are listed, the following words appear: ‘These documents are documents that form part of this contract and are in addition to any special conditions, these general conditions, the specification and the plans.’ (emphasis added).
  10. [66]
    I do not accept the Nicholls’ submission that the ‘contract documents’ were confined to the four documents identified in item 12 of the contract. The construction urged by the Nicholls is inconsistent with the plain words of the contract.
  11. [67]
    It is clear from clause 13.1 that ‘contract documents’ may be supplied by the building owner. The obvious intent of this clause was that if the Nicholls supplied a ‘contract document’ it was the Nicholls and not Kline who was liable for, inter alia, the accuracy of the document.
  12. [68]
    The term ‘plans’ is not defined in the contract. Although the reasons for the first decision do not specifically refer to the basis upon which the learned member found that the first survey plan formed part of the contract documents, it seems reasonably readily apparent that the learned member considered the first survey plan to form part of ‘the plans’.
  13. [69]
    The Nicholls’ property was steep with a significant sloping gradient from the front of the property down to the rear. The steepness of the land, a matter well known to both parties, was of central importance in the design and construction of the dwelling. The first survey plan was a document relied upon by Kline and Mr Osman (the draftsperson) in the preparation of the Rev C plans and by the parties in forming the contract. It follows that a survey plan of the land would be a significant document in the formation and construction of the contract and in determining the parties’ obligations and liabilities under the contract. A reasonable person in the position of the parties would understand the first survey plan to be part of the ‘plans’ and thereby part of the ‘contract documents’.
  14. [70]
    On a proper construction of the contract, the first survey plan formed part of the ‘contract documents’. It is not contentious that the Nicholls supplied the first survey plan to Kline.
  15. [71]
    It follows that there was no error by the learned member. Ground of appeal 2 is not made out.

Ground of appeal 3 - the learned member erred in concluding that the rear stairs could not be built, contrary to indisputable facts.

  1. [72]
    This ground of appeal raises a question of fact.
  2. [73]
    The Nicholls say that the learned member found the rear stairs could not be built at all and that the evidence did not support this finding. Kline says the finding was that the stairs could not be constructed in accordance with the original plans and that Kline’s alternative solution was appropriate and, in adopting the alternative solution, Kline discharged its contractual obligations.
  3. [74]
    The Nicholls say that the consequence of the failure by Kline to construct the rear stairs is that the works did not reach practical completion. The learned member found that Kline had achieved practical completion.[61] The Nicholls do not appeal this finding.
  4. [75]
    The learned member considered whether the stairs could be built in accordance with the first set of plans:

[101] The plans in Rev C had the rear steps only of two treads to ground level.  When the errors of the First Survey Report were discovered the Second Survey Report was commissioned and provided and the plans revised.  That resulted in amended drawings described as Rev J with a differently designed stairs case of 16 treads.  Subsequently, Kline Homes established that to comply with the Building Code an 18 tread stair case was required with an intermediate landing.  Kline Homes, in its letter of 1 October 2015, offered two options, either a variation to build the stairs in accordance to the amended design at a cost of $7,635.00 or to remove the stairs from the Contract and provide a negative variation of $490.00.  It advised that if no option was selected it would assume the negative variation.

[102] The Homeowners submit that the issue should have been raised much earlier than when it was, and that may be the case, but that does not change the fact that if they wanted stairs constructed as per the revised plans it would have required a variation and an additional cost to the Homeowners.[62]

  1. [76]
    The evidence of the draftsman, Mr Osman, was that a 17-tread stair was in the Rev J plans, could be built and would be compliant.[63]
  2. [77]
    The evidence of Kline’s expert, Mr Sim, was that the rear stairs could not be constructed in accordance with the original plans (as opposed to the Rev J plans referred to by Mr Osman in his evidence) and that Kline fulfilled its contractual obligations by constructing the stairs in an alternative position.[64]  The learned member accepted the evidence of Mr Sim:

[106] Mr Sim believed Kline Homes fulfilled the Contract by building an equivalent set of stairs in a different place because it was impossible for them to be built on the location provided by the contract plans.  The alternative two tread staircase built by Kline Homes off the front deck provided the Homeowners with appropriate access to the rear yard. I accept his opinion on this issue.[65]

  1. [78]
    Contrary to the Nicholls’ submission, the learned member did not find that the rear stairs could not be constructed at all. What the learned member found was that the stairs could not be constructed in accordance with the original plans which is quite a different matter. On this point, the learned member was entitled to accept the evidence of Mr Sim.
  2. [79]
    The finding at reasons [101] that Kline offered to the Nicholls an alternative solution in relation to the construction of the stairs is not appealed. Nor do the Nicholls contest the finding at reasons [102] that construction of the stairs in accordance with the revised plans would require a variation. Indeed, the Nicholls say that Kline was obliged to provide them with a variation request. However, that was the effect of the letter from Kline to the Nicholls of 1 October 2015.[66] That letter was in response to an email from the Nicholls in which they identified what was said to be incomplete work and which they required to be undertaken to bring the works to practical completion.[67]  Kline set out the two options in respect of the rear stairs as referred at [101] of the reasons for the first decision referred to above. The Nicholls did not respond to that letter and Kline proceeded to remove the stairs from the contract with a resulting negative variation.
  3. [80]
    There was no error by the learned member. This ground of appeal is not made out.

Ground of appeal 4 - the learned member erred by not deciding for himself whether the Contract had been complied with by building alternative stairs.

  1. [81]
    This ground of appeal is related to the preceding ground.
  2. [82]
    As I have noted earlier in these reasons, the finding by the learned member that the works had reached practical completion is not appealed.
  3. [83]
    This ground asserts that the learned member fell into error by simply adopting the evidence of Mr Sim that, by building alternative rear stairs, Kline had met its contractual obligations.
  4. [84]
    I have found that the learned member was entitled to accept the evidence of Mr Sim that the rear stairs could not be constructed in accordance with the Rev C plans as a result of the errors in the first survey plan.
  5. [85]
    As I have noted, the Nicholls do not appeal the finding by the learned member that the works had reached practical completion. Whether the works reached practical completion was an issue to be determined by the Tribunal on the facts as found.[68]
  6. [86]
    The learned member:
    1. (a)
      Accepted Mr Sim’s evidence that the rear stairs could not be constructed in accordance with the Rev C plans;[69]
    2. (b)
      Found that by building an alternative two tread staircase off the front deck of the dwelling, the Nicholls had appropriate access to their rear yard;[70]
    3. (c)
      Found that the rear stairs in accordance with the Rev J plans were not included in the original contract price;[71]
    4. (d)
      Found that Kline had no liability to construct the rear stairs in the absence of an agreed variation.[72]
  7. [87]
    The critical finding by the learned member relevant to this ground of appeal was (d) which was made in the context of findings (a) to (c). In making the finding that Kline had no liability to construct the rear stairs in the absence of an agreed variation, the learned member was not relying upon the evidence of Mr Sim. This is clear from the learned member’s findings in relation to the first survey report[73] and the works having reached practical completion.[74]  Indeed it is entirely likely, and consistent with the foregoing analysis, that the reference at reasons [106] to ‘the issue’ is a reference to the appropriateness of the alternative staircase and not, as the Nicholls suggest, Mr Sim’s opinion as to whether Kline had discharged its contractual obligations.
  8. [88]
    There was no error by the learned member. This ground of appeal is not made out.

Ground of appeal 5 - the learned member erred by relying upon expert evidence that the slope discrepancy would not have been discovered by a site inspection.

  1. [89]
    This ground of appeal relates to those matters traversed in relation to appeal ground 1. The evidence of Mr Sim was that the discrepancy between the first and second survey plans would not necessarily have been revealed at a site inspection.[75] The learned member was entitled to prefer the evidence of Mr Sim. There was no error by the learned member.

Ground of appeal 6 - the learned member erred in accepting evidence about survey plans from experts who did not have material training, qualifications, or experience in surveying.

  1. [90]
    In this ground of appeal the Nicholls seek to challenge the evidence of Mr Sims and, somewhat paradoxically, their own expert Mr Dyer.
  2. [91]
    Neither the expertise of Mr Sim nor the expertise of Mr Dyer was challenged in the proceedings below in relation to any aspect of their evidence either prior to, or at, the hearing. It is, in my view, a matter of common sense that a building expert will have some level of experience in reading and interpreting survey plans.
  3. [92]
    Ultimately, it was for the learned member to assess the relevance of, and the weight to be given to, the evidence of the experts. It was not contentious in the proceedings below that the first survey plan was erroneous (regardless of how the errors might have been characterised). Mr Sim and Mr Dyer gave evidence, within the area of their expertise as a building consultant, as to the effect of the errors in the first survey plan on the design and construction of the dwelling. For the reasons I have earlier set out, there was no error by the learned member in preferring the evidence of Mr Sim.
  4. [93]
    There was no error by the learned member. This ground of appeal is not made out.

Ground of appeal 7 - the learned member erred by accepting evidence that engineering or building approval was required for a ‘retaining wall’ on the Lot, and then by making a contradictory finding that approval was not required on the basis that the wall was not ‘structural’.

  1. [94]
    The learned member found that timber walls constructed by Kline were not defective building work.[76]
  2. [95]
    The issue in dispute relating to the timber walls was whether they were retaining walls or a landscape feature.  Kline’s expert’s evidence was that the timber wall, while 1.2 metres high, was retaining less than 1 metre of soil.[77] The Nicholls’ expert’s evidence was that the timber wall was a retaining wall[78] and being over 1 metre in height required engineer design and approval.[79]
  3. [96]
    The Nicholls submit that the walls were a ‘retaining wall’ which was not self-assessable, that is to say a development permit from the local authority was required for the construction of the walls.  The Nicholls rely on s 3 of schedule 1 of the Building Regulation 2006 (Qld).  It is useful to set out part of the relevant provision:

3 Work for particular retaining walls

  1. (1)
    Building work for a retaining wall is prescribed if—
  1. (a)
    there is no surcharge loading over the zone of influence for the wall; and
  1. (b)
    the total height of the wall and of the fill or cut retained by the wall is no more than 1m above the wall’s natural ground surface; and
  1. (c)
    the wall is no closer than 1.5m to a building or another retaining wall.
  1. [97]
    The Nicholls say that because the wall was over 1 metre high, it is not a ‘prescribed’ retaining wall. 
  2. [98]
    The Nicholls say that in the absence of approval for the timber walls, the works did not reach practical completion. The corollary of this is that the learned member erred in finding that the works had reached practical completion. As I have earlier observed the learned member’s finding that the works reached practical completion is not appealed. I therefore approach this ground of appeal on the basis that the consequence of any asserted error is confined to the failure by the learned member to award damages for the cost of appropriate rectification work.
  3. [99]
    The learned member said the following about the timber walls:

[138] These were constructed as part of the landscaping.  An issue arose as to whether the walls were retaining walls or whether they were a landscape feature only.  They were constructed of sleepers and the walls measured 1.2 in height.  The walls would have to be designed by an engineer if they were retaining walls.  Mr Dyer believed it was constructed to retain the terrace part of the yard.  Mr Sim did not think it was structural as it was only holding back mulch, soil and plants.  He described the wall as a glorified garden edge.  It was not located within 1.5m of a building and was not part of the Contract plans.

[139] Mr Dyer believes that the retaining walls failed to meet a reasonable standard of construction and finish and had defects in that the top sleeper was coming away from the post due to insufficient fixing, to be usable the lower level would require another retaining wall to tier the yard and because the height above ground was over 1m, the Building Code of Australia required them to be designed and approved by an engineer.

[140] Mr Sim believed the timber sleeper walls were not defective.  He believed the fact that the sleepers were not precisely level and the uprights were not precisely plumb was inevitable with the passing of time and was not defective construction.  He said that sleepers shrink dry and curl after time which was natural in exposed locations.

[141] I also note that the garden has been neglected and not maintained which may have contributed to the appearance of the walls.

[142] I do not allow any claim in respect of these walls.[80]

  1. [100]
    It is clear from the reasons that the learned member accepted the evidence of Mr Sim over Mr Dyer.  The evidence of Mr Sim was that there was no load on the walls and that the walls served no useful purpose.[81] Mr Sim said that the walls were only holding back soil, mulch and plants.[82] He described the walls as a ‘glorified garden edge’.[83] It seems reasonably clear from the evidence of Mr Sim, and the acceptance by the learned member of Mr Sim’s evidence, that the learned member found the timber walls were not a ‘retaining wall.’ Accordingly, further consideration of whether the construction of the walls required approval was unnecessary.
  2. [101]
    In the absence of any actual finding by the learned member that the timber walls were retaining walls, this ground of appeal is misconceived. There was no error by the learned member.

Ground of appeal 8 - the learned member erred by finding that the additional scaffolding costs were exceptional pursuant to section 84(4) of the Domestic Building Contracts Act 2000 (Qld) (‘the DBCA’).

  1. [102]
    One of the consequences of the errors in the first survey report was that additional scaffolding was required to enable construction of the dwelling. Kline claimed $29,216.00 in respect of the costs associated with the additional scaffolding.
  2. [103]
    The learned member found that Kline had established ‘exceptional circumstances’ for the purposes of s 84(4)(a)(i) of the DBCA and allowed the claim for the additional scaffolding costs.
  3. [104]
    Section 84 of the DBCA provides:

84 Right of building contractor to recover amount for variation

  1. (1)
    This section applies if –
  1. (a)
    the building contractor under a regulated contract gives effect to a variation of the contract; and
  1. (b)
    the variation consists of –
  1. (i)
    an addition to the subject work; or
  1. (ii)
    an omission from the subject work that results in the building contractor incurring additional costs.
  1. (2)
    If the variation was originally sought by the building owner, the building contractor may recover an amount for the variation-
  1. (a)
    only if the building contractor has complied with sections 79, 80, 82 and 83; or
  1. (b)
    only with the tribunal’s approval given on an application made, as provided under the QCAT Act, to the tribunal by the building contractor.
  1. (3)
    If the variation is not a variation that was originally sought by the building owner, the building contractor may recover an amount for the variation-
  1. (a)
    only if-
  1. (i)
    the building contractor has complied with sections 79, 80, 82 and 83; and
  1. (ii)
    the ground of unforeseen circumstances applies; or
  1. (b)
    only with the tribunal’s approval given on an application made, as provided under the QCAT Act, to the tribunal by the building contractor.
  1. (4)
    The tribunal may approve the recovery of an amount by a building contractor for a variation only if the tribunal is satisfied that-
  1. (a)
    either of the following applies-
  1. (i)
    there are exceptional circumstances to warrant the conferring of an entitlement on the building contractor for recovery of an amount for the variation;
  1. (ii)
    the building contractor would suffer unreasonable hardship by the operation of subsection (2)(a) or (3)(a); and
  1. (b)
    it would not be unfair to the building owner for the building contractor to recover an amount.
  1. [105]
    The learned member referred to the following passage from the decision of the Court of Appeal in Allaro Homes Cairns Pty Ltd v O'Reilly & Anor:[84]

The phrase “exceptional circumstances” is not defined.  It is found in an act whose purpose or object is to achieve a reasonable balance between the interests of building contractors and building owners and to maintain appropriate standards of conduct in the industry.  It may be vague but that matters that might be considered relevant to such an inquiry will be indicated by the particular way in which the Act was not complied with and the circumstances particular to the dispute.  In this Act, it directs attention to those circumstances which are exceptional and warrants conferring upon the building contractor an entitlement to recovery for the variation which its conduct, by failing to meet the obligations imposed by the statute, deprived it.  It would therefore suggest, in the context of this dispute, attention might be directed to the circumstances that applied that prevented compliance or explained non-compliance with s 80(2)(e), which required the building contractor to state the change of the contract price because of the variation or how the change in price might be worked out.  Circumstances such as an unanticipated event requiring work to be done urgently might, for example, afford an explanation and constitute an “exceptional circumstance”.  But this comment should not be regarded as exhaustive, the term is broad and it is not desirable to attempt an exhaustive statement of what might be in any given dispute an exceptional circumstance.[85]

  1. [106]
    In Colagrande & Anor v D A Radic Pty Ltd trading as David Radic Prestige Homes[86] the QCAT Appeal Tribunal said this about ‘exceptional circumstances’:

As the Court of Appeal observed in Allaro one might expect the evidence regarding ‘exceptional circumstances’ to be directed to the circumstances preventing compliance or explained non-compliance with s 80(2)(e), requiring the building contractor to state the change of the contract price because of the variation or how the change in price might be worked out. The relevant provisions of the DBC Act are protective in nature and, as was observed by the High Court in Paterson, designed to prevent the kinds of problems likely to arise where variations are dealt with informally, and to avoid the disputes likely to arise where variations are undertaken without the formality required by the Act.[87]

  1. [107]
    The learned member referred to the following factors as relevant considerations in determining whether there existed ‘exceptional circumstances’:
  1. (a)
    If the build was to continue the additional scaffolding was necessary as there was no alternative;
  1. (b)
    Despite the error in the first survey plan the Nicholls instructed Kline to amend the plans and continue with the build;
  1. (c)
    The increased costs arose from the inaccuracy of the first survey plan, a report provided by the Nicholls;
  1. (d)
    The cost of the scaffolding was paid by Kline to a third party, All Round Scaffolding and Kline did not profit from the additional cost;
  1. (e)
    Ms Nicholls erroneously advised Mr Kline that she had legal advice that the additional amount for the scaffolding was not recoverable;
  1. (f)
    Kline did not become aware of the full amount of the increased cost of the additional scaffolding until 29 May 2015; and
  1. (g)
    The costs of the additional scaffolding were reasonable in all the circumstances.[88]
  1. [108]
    The learned member also found that the survey discrepancy was an ‘unanticipated event’.[89]
  2. [109]
    The Nicholls do not appear to dispute the findings considered by the learned member to be relevant circumstances. What they say is that the circumstances were ‘incapable of causing the Builder’ to fail to comply with the statutory obligations regarding variations. 
  3. [110]
    As was stated in Allaro and Colagrande whether ‘exceptional circumstances’ are established will depend upon the facts of the particular case. Certainly, the discovery of the errors in the first survey plan was an unanticipated event. This had significant consequences for the build. The first survey plan was a contract document provided by the Nicholls. Kline was entitled to accept it as accurate and to proceed accordingly. When the error in the first survey plan was discovered a number of events transpired. In November 2014 the second survey plan was prepared.[90] On 20 April 2015 the scaffolder inspected the site and advised Kline that additional scaffolding would be required.[91] On 11 May 2015 Mr Kline advised Ms Serena Nicholls that additional scaffolding costs would be incurred as a result of the error in the first survey plan.[92] Whether on that date or subsequently, Ms Nicholls told Mr Kline that she had received legal advice that she was not obliged to pay the cost of the additional scaffolding . On 29 May 2015 the scaffolder provided Kline with a new quote for the scaffolding works.[93]
  4. [111]
    The Nicholls say the need for the scaffolding did not prevent Kline Industries from providing a written variation; that Kline Industries had access to the second survey report from 15 December 2014 but had neglected to send it to All Round Scaffolding prior to that date. The Nicholls say that Kline Industries incorrectly represented to them on 15 December 2014 what the total amount of the additional costs which would need to be incurred as a result of the survey error had been offset by modifications to the Rev C plans. The Nicholls say they were not made aware of the total costs of the scaffolding until 15 August 2015. Finally, the Nicholls say that Ms Serena Nicholls’ statement to the builder that she had obtained legal advice and was not liable for the scaffolding costs ‘could not be said to have prevented the builder from providing an appropriate written variation’.[94]
  5. [112]
    In this appeal, the Nicholls seek to reargue the exercise of the discretion rather than engage with the reasons why they say the discretion miscarried. It is not enough that I might exercise the discretion differently to the learned member. Some error must be established.[95]  The task of the learned member was to identify and weigh the relevant considerations and to determine whether there was a basis for finding that exceptional circumstances existed.
  6. [113]
    The learned member relevantly and correctly identified that an unanticipated event had occurred in the form of the erroneous first survey plan. While it may be that Kline could have sent the second survey plan to the scaffolder earlier, and thereby have identified the increased scaffolding costs earlier, it is unclear how the Nicholls say that the events that would thereafter have unfolded were in effect any different to what actually transpired. Presumably, and as pointed out by the learned member,[96] they would simply have raised the dispute about the scaffolding earlier.  As the learned member correctly noted, the additional scaffolding works were required for the build to continue and the Nicholls, while clearly quite determined not to pay the increased cost, were adamant that the build proceed.
  7. [114]
    The learned member considered it relevant that Ms Nicholls effectively ‘bluffed’ Mr Kline when advising him that she had obtained legal advice that the homeowners were not obligated to pay for the cost of the additional scaffolding.  It was for this reason, the learned member found, Kline did not issue a written variation.[97] This finding is not appealed nor do the Nicholls’ submissions address how this consideration is said to be irrelevant. 
  8. [115]
    The learned member found that the first survey plan was a contract document, the accuracy of which was warranted by the Nicholls. It is self-evident that consideration of the document and its importance in the chronology of events was central to the determination of whether Kline had established exceptional circumstances.
  9. [116]
    As North J made clear in Allaro, the term ‘exceptional circumstances’ is broad and whether the requirement is established will turn upon the facts of the particular case. This was not a case where, for example, the builder simply failed to inform the building owner of the cost of a required variation only to demand payment after incurring the cost and thereby presenting to the owner as a fait accompli the claim for the variation. Kline raised the issue of the increased cost of the scaffolding work reasonably promptly after it became apparent that the erroneous first survey plan would result in additional scaffolding being required to undertake the build. That error was the responsibility of the Nicholls. When the issue of the additional cost was raised by Kline, the response of the Nicholls was to advise that they had legal advice they were not required to pay the cost. In fact, they were. Unfortunately for Kline, and as found by the learned member, the builder succumbed to the Nicholls’ bluff. The Nicholls were insistent that the build proceed. They knew that additional scaffolding costs would be incurred. They simply did not want to pay for it. It was open to the learned member to conclude that there were exceptional circumstances in accordance with s 84(4)(a)(i) of the DBCA.
  10. [117]
    The Nicholls do not appeal the finding by the learned member that it would not be unfair to them for Kline to recover the additional cost of scaffolding.
  11. [118]
    There was no error by the learned member in awarding Kline the additional scaffolding cost. This ground of appeal is not made out.

Ground of appeal 9 - the learned member erred by failing to give adequate reasons for not considering submissions by the Nicholls, or by not considering those submissions.

  1. [119]
    This ground of appeal relates to a decision about costs. Leave is required to appeal a costs order.[98]
  2. [120]
    After the first decision the learned member directed the parties to file and serve submissions on costs: Kline’s submissions were to be filed by 20 April and the Nicholls’ submissions by 15 April.
  3. [121]
    Kline attempted to file submissions in accordance with the directions but it appears in so doing, and when emailing the documents to the Tribunal registry, omitted to attach the submissions and an accompanying affidavit.  On 16 April 2020, the Nicholls filed their submissions and an affidavit.  What followed was a period of some confusion. Suffice it to say, Kline eventually filed and served the submissions and affidavit it had originally intended to file. It seems that the Nicholls, misapprehending what had transpired and under the mistaken understanding that Kline had filed further submissions, filed additional submissions on 15 June 2020 (the additional submissions).
  4. [122]
    This ground of appeal largely relates to what the Nicholls’ say was the failure by the learned member to engage with the additional submissions. Each party was directed to file submissions. This each party did albeit not strictly in accordance with the timeframes directed by the Tribunal. The additional submissions were filed by the Nicholls without leave. It seems that the central complaint by the Nicholls is that the Tribunal directions, had they been complied with by Kline, would have afforded them the opportunity to respond to the builder’s submissions. The Nicholls say that the failure by Kline to comply with the directions meant that their only opportunity to respond to Kline’s submissions was in the additional submissions filed on 15 June 2020.
  5. [123]
    However, there is nothing in the reasons to suggest that the learned member did not consider the totality of the parties’ submissions.[99]
  6. [124]
    Reasons for a decision need not be extensive or provide a detailed explanation.[100] Reasons need be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them in respect of it.[101] It is not necessary for a decision maker who is exercising a discretionary judgment to detail each factor which the decision maker has found to be relevant or irrelevant.[102] It is sufficient for a decision maker’s pathway of reasoning to be tolerably clear.[103]
  7. [125]
    Other than what they say was a failure by the learned member to provide adequate reasons, the Nicholls identify no specific error in the second decision. The Nicholls do not engage with any aspect of the reasons for the second decision and identify error. If the purport of ground of appeal 9 is to assert that the second decision is in error because the learned member did not accept the Nicholls’ submissions in their entirety then, in the absence of any attempt to identify specific error, it is a submission that cannot be accepted. It is not for the Appeal Tribunal to divine what is said to amount to error in the reasons for the second decision merely on the baldest of assertions by the Nicholls that, presumably, had the learned member engaged with their submissions the learned member would have come to a different conclusion.
  8. [126]
    The learned member’s reasons set out clearly why the second decision was made and to allow the parties to exercise their appeal rights.[104] That the Nicholls have not engaged in a substantive way with the reasons for the second decision is a matter for them. It was not necessary for the learned member to refer to each and every submission made by the parties nor was the learned member required to identify each and every matter the learned member considered relevant or irrelevant in exercising the discretion to award costs.
  9. [127]
    There was no error by the learned member. This ground of appeal is not made out.

Conclusion

  1. [128]
    The Nicholls have failed to establish any of their grounds of appeal. Insofar as leave to appeal is required, leave is refused. The appeal is otherwise dismissed.
  2. [129]
    I will direct the parties to file submissions on costs.

Footnotes

[1]Kline Industries International Pty Ltd t/as Kline Homes v Nicholls [2020] QCAT 227 (‘first decision’).

[2]Kline Industries International Pty Ltd t/as Kline Homes v Nicholls (no. 2) [2020] QCAT (unreported) (‘second decision’).

[3]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 142(1).

[4]Ibid, schedule 3 (definition of ‘decision’).

[5]Ibid, s 142(3)(a)(ii).

[6]Ibid, s 142(3)(b).

[7]Pickering v McArthur [2005] QCA 294; Amundsen v Queensland College of Teachers [2011] QCATA 2; GDLA v GMG [2017] QCATA 18.

[8]QCAT Act, s 146.

[9]Ericson v QBCC [2014] QCA 297, [9].

[10]QCAT Act, s 147(2).

[11]Ibid, s 147(3).

[12]First decision, [5].

[13]Ibid, [94].

[14]Ibid, [24].

[15]Ibid, [27].

[16]Ibid, [67]

[17]Ibid, [80] - [81].

[18]Ibid, [83].

[19]Ibid, [90].

[20]Ibid, [91].

[21]Ibid, [98].

[22]Ibid, [99] – [100].

[23]Ibid, [107].

[24]Ibid, [116].

[25]Ibid, [119].

[26]Ibid, [120].

[27]Ibid, [129].

[28]Ibid, [136].

[29]Ibid, [69] and [142].

[30]Ibid, [145].

[31]Ibid, [146].

[32]Ibid, [147].

[33]Ibid, [148] – [153].

[34]Ibid, [157].

[35]Ibid, [161].

[36]Pursuant to s 147 of the QCAT Act; cf. QCAT Act, s 146.

[37]Pursuant to s 142(3)(a)(iii) of the QCAT Act.

[38]QCAT Act, s 143(4)(b), s 143(5)(c).

[39]Ibid, schedule 3 (definition of ‘final decision’).

[40]See St Clair v Timtalla Pty Ltd [2010] QCA 304 applying Coulter v Ryan [2006] QCA 567. See also Legal Services Commissioner v Bradshaw [2009] QCA 126.

[41][2013] QCA 332.

[42]Ibid, [8].

[43]QCAT Act, s 61(1)(a).

[44]Ibid, s 61(3).

[45][2015] QCATA 133.

[46]Ibid, [35].

[47]Benson v Ware [2012] QCATA 24, [9].

[48]Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, [109].

[49]First decision.

[50]Applicants’ Appeal Book, p 350.

[51]T3-55, line 32.

[52]Applicants’ Appeal Book, p 352.

[53]Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139.

[54][2022] QCATA 52.

[55]Ibid, [20]

[56]Relying on Photo Production Ltd v Securicor Transport Ltd [1980] AC827, 846.

[57]Ryan v Worthington [2015] QCA 201, [12].

[58]Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, 461–2 [22]; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640.

[59]Australian Broadcasting Commission v Australasian Performing Rights Association (1973) 129 CLR 99, 109.

[60]Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455, [10].

[61]First decision, [80].

[62]Ibid.

[63]T2-22 – line 23.

[64]Appeal Book p 355; T3-86, lines 9-11.

[65]First decision.

[66]Appeal Book, p 213.

[67]Appeal Book, p 221.

[68]Partington & Anor v Urquhart [2015] QCATA 67 (‘Partington (No 1)’).

[69]First decision, [105].

[70]Ibid, [106].

[71]Ibid, [107]; And thus not within the scope of works.

[72]Ibid.

[73]Ibid, [101]-[102].

[74]Ibid, [80].

[75]T3-56, line 19.

[76]First decision, [138]-[142].

[77]T3-63, lines 27-28; Appeal book p 38-39; p 354.

[78]T3-24, line 39.

[79]Appeal book, p 323.

[80]Final decision, [138]-[142].

[81]T3-64, lines 30-33.

[82]Appeal book, page 38.

[83]T3-66, lines 3-4.

[84][2012] QCA 286.

[85]Ibid, [15].

[86][2019] QCATA 176.

[87]Ibid, [72].

[88]First decision, [115].

[89]Ibid, [116].

[90]Ibid, [29].

[91]Ibid, [31].

[92]Ibid, [32].

[93]Ibid, [31].

[94]The applicant’s submissions filed 15 October 2020, [41](e).

[95]House v The King (1936) 55 CLR 499, 505.

[96]First decision, [110]-[111].

[97]First decision, [109].

[98]QCAT Act, s 142(3)(a)(iii).

[99]Second decision, [2].

[100]Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247.

[101]Housing Commission of New South Wales v Tatmar Pastoral Co. Pty Ltd [1983] NSWLR 379.

[102]Ibid.

[103]Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43, [55].

[104]Housing Commission of New South Wales v Tatmar Pastoral Co. Pty Ltd [1983] NSWLR 379.

Close

Editorial Notes

  • Published Case Name:

    Nicholls & Anor v Kline Industries International Pty Ltd

  • Shortened Case Name:

    Nicholls & Anor v Kline Industries International Pty Ltd

  • MNC:

    [2022] QCATA 103

  • Court:

    QCATA

  • Judge(s):

    Senior Member Brown

  • Date:

    04 Jul 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Allaro Homes Cairns Pty Ltd v O'Reilly [2012] QCA 286
2 citations
Jump To
Cite 1 - [2012] QCA 286
Cite 2 - [2012] QCA 286
Amundsen v Queensland College of Teachers [2011] QCATA 2
2 citations
Jump To
Cite 1 - [2011] QCATA 2
Cite 2 - [2011] QCATA 2
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
2 citations
Jump To
Cite 1 - (1973) 129 CLR 99
Cite 2 - (1973) 129 CLR 99
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
2 citations
Jump To
Cite 1 - (1990) 170 CLR 321
Cite 2 - (1990) 170 CLR 321
Azzopardi v Tasman UBE Industries P/L (1985) 4 NSWLR 139
2 citations
Jump To
Cite 1 - (1985) 4 NSWLR 139
Cite 2 - (1985) 4 NSWLR 139
Benson v Ware [2012] QCATA 24
2 citations
Jump To
Cite 1 - [2012] QCATA 24
Cite 2 - [2012] QCATA 24
Colagrande v D A Radic Pty Ltd [2019] QCATA 176
2 citations
Jump To
Cite 1 - [2019] QCATA 176
Cite 2 - [2019] QCATA 176
Coulter v Ryan[2007] 2 Qd R 302; [2006] QCA 567
2 citations
Jump To
Cite 1 - [2006] QCA 567
Cite 2 - [2006] QCA 567
Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd and Ors (2014) 251 CLR 640
2 citations
Jump To
Cite 1 - (2014) 251 CLR 640
Cite 2 - (2014) 251 CLR 640
Ericson v Queensland Building and Construction Commission [2014] QCA 297
2 citations
Jump To
Cite 1 - [2014] QCA 297
Cite 2 - [2014] QCA 297
GDLA v GMG [2017] QCATA 18
2 citations
Jump To
Cite 1 - [2017] QCATA 18
Cite 2 - [2017] QCATA 18
Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455
2 citations
Jump To
Cite 1 - (1983) 153 CLR 455
Cite 2 - (1983) 153 CLR 455
House v The King (1936) 55 CLR 499
2 citations
Jump To
Cite 1 - (1936) 55 CLR 499
Cite 2 - (1936) 55 CLR 499
Housing Commission of New South Wales v Tatmar Pastoral Co. Pty Ltd [1983] NSWLR 379
3 citations
Jump To
Cite 1 - [1983] NSWLR 379
Cite 2 - [1983] NSWLR 379
Cite 3 - [1983] NSWLR 379
Kline Industries International Pty Ltd t/as Kline Homes v Nicholls [2020] QCAT 227
2 citations
Jump To
Cite 1 - [2020] QCAT 227
Cite 2 - [2020] QCAT 227
Legal Services Commissioner v Bradshaw [2009] QCA 126
2 citations
Jump To
Cite 1 - [2009] QCA 126
Cite 2 - [2009] QCA 126
Miller v Lida Build Pty Ltd [2013] QCA 332
2 citations
Jump To
Cite 1 - [2013] QCA 332
Cite 2 - [2013] QCA 332
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
2 citations
Jump To
Cite 1 - (2004) 218 CLR 451
Cite 2 - (2004) 218 CLR 451
Partington v Urquhart [2015] QCATA 67
2 citations
Jump To
Cite 1 - [2015] QCATA 67
Cite 2 - [2015] QCATA 67
Photo Production Ltd v Securicor Transport Ltd (1980) AC 827
2 citations
Jump To
Cite 1 - (1980) AC 827
Cite 2 - (1980) AC 827
Pickering v McArthur [2005] QCA 294
2 citations
Jump To
Cite 1 - [2005] QCA 294
Cite 2 - [2005] QCA 294
Reeve v Hamlyn [2015] QCATA 133
1 citation
Jump To
Cite 1 - [2015] QCATA 133
Ryan v Worthington [2015] QCA 201
2 citations
Jump To
Cite 1 - [2015] QCA 201
Cite 2 - [2015] QCA 201
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
2 citations
Jump To
Cite 1 - (1987) 10 NSWLR 247
Cite 2 - (1987) 10 NSWLR 247
Spalding v Kent [2022] QCATA 52
2 citations
Jump To
Cite 1 - [2022] QCATA 52
Cite 2 - [2022] QCATA 52
St Clair v Timtalla Pty Ltd [2010] QCA 304
2 citations
Jump To
Cite 1 - [2010] QCA 304
Cite 2 - [2010] QCA 304
Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43
2 citations
Jump To
Cite 1 - [2013] HCA 43
Cite 2 - [2013] HCA 43

Cases Citing

Case NameFull CitationFrequency
Boys v Imperial Homes (Qld) Pty Ltd [2024] QCATA 352 citations
Department of Education v Poyton [2023] QCATA 1102 citations
Gould v Cornell [2024] QCAT 5872 citations
1

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