Ballina Building Services Pty Ltd v Doyle
[2010] QCAT 643
•23 December 2010
| CITATION: | Ballina Building Services Pty Ltd v Doyle [2010] QCAT 643 | |
| PARTIES: | Ballina Building Services Pty Ltd (Applicant) | |
| v | ||
| Dr Mark Doyle (Respondent) | ||
| APPLICATION NUMBER: | BD395-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 24 May & 17 September 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | Kerrie O’Callaghan, Senior Member |
| DELIVERED ON: | 23 December 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The Respondent pay to the Applicant the sum of $42,674.25 within 14 days. |
| CATCHWORDS : | S30 Domestic Building Contracts Act; Whether contract existed. |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Ballina Building Services Pty Ltd was self represented. |
| RESPONDENT: | Dr Mark Doyle was represented by Mr Laing of Counsel instructed by Michael Sing Lawyers. |
REASONS FOR DECISION
The Applicant, Ballina Building Services Pty Ltd (“Ballina”) sought from the respondent, Dr Mark Doyle (“Dr Doyle”) payment of the sum of $42,674.23 being monies alleged to be owing in relation to the performance of building works by Ballina for Dr Doyle at a property situated at 11 Camphorlaure Court, Tallebudgera Valley, Queensland. The works the subject of the claim involved an extension to a residence on the property and construction of other works such as a carport and alterations to an existing shed.
Dr Doyle in his response denied that the monies were owing on the basis that in requesting works be carried out by the applicant he was acting as the agent of the registered owner of the property Knott Hill Pty Ltd (“Knott Hill”).
Background to dispute
Ballina had carried out work on the property previously. These works consisted of landscaping works and were completed in 2006 (“the first stage works”). At the time these works were carried out Dr Doyle and his then wife Dr Hertess resided at the property. There was no written contract for these works and the arrangement reached between Ballina and Dr Doyle was that Ballina would issue accounts to Dr Doyle and Dr Hertess every 7 days. Payments were then made by Dr Doyle by direct deposit into Ballina’s bank account.
Towards the completion of those works it is common ground that Dr Doyle and Dr Hertess’ marriage ended and Dr Hertess vacated the site. Those works were completed and eventually all monies owing for those works were paid.
Subsequently, in August 2007 Dr Doyle contacted Mr Watt the director of Ballina and requested that he carry out the works subject of these proceedings.
There is a dispute between the parties as to whether a written contract was given to Dr Doyle. Ballina says that it did prepare a contract and provide it to Dr Doyle however Dr Doyle disputes that.
In any event it is accepted that Dr Doyle requested works be carried out and that invoices were delivered and paid by Dr Doyle. The amount of $42,674.25 was unpaid.
Dr Doyle in his defence maintained that any acts on his part were as agent for Knott Hill Pty Ltd (“Knott Hill”), the registered owner of the property. The sole director and shareholder of Knott Hill was Dr Doyle’s wife.
History of the matter in the Tribunal
This matter has an unfortunate history in the Tribunal and has suffered delay as a consequence of a breakdown in the process which fortunately is not typical of how matters progress in this Tribunal.
[10] The application was filed in the Commercial and Consumer Tribunal (CCT) and became part of QCAT’s jurisdiction when QCAT was established on 1 December 2009.
[11] Statements of evidence were filed by both parties and the matter was set down for a compulsory conference.
[12] The outcome of that compulsory conference was an order of the Tribunal made by Member Stilgoe on 21 April 2010 in the following terms:-
“1. The issue to be determined by the Tribunal is “with whom did the applicant contract”
2. If the Tribunal determines that the respondent is the party with whom the applicant contracted, the applicant is entitled to an order that the respondent pay it $42,674.25.”
[13] Neither party sought to vacate or vary this order.
[14] The matter came on for hearing before Member Scott Gregory on 24 May 2010 to determine that issue.
[15] Dr Doyle did not attend the hearing. He was represented by a solicitor and counsel. He had not been advised that he was not required for cross examination at the hearing. His representatives explained that he was unable to attend because of work commitments.
[16] At this point his lawyers made a submission (not raised in the pleadings) to the effect that the answer to the question to be determined by the Tribunal was “the applicant contracted with no one” because any agreement reached did not comply with the requirements of the Domestic Building Contracts Act 2000. (“DBCA”)
[17] The applicant was not legally represented at the hearing. Mr Watt, a director of the applicant appeared on Ballina’s behalf. The Member acknowledged that Mr Watt was not in a position to respond to the issue raised by Dr Doyle’s representatives and on that basis gave Ballina an opportunity to file written submissions in response to the submissions handed up by Dr Doyle’s representatives.
[18] Submissions were filed and the matter came before myself for a directions hearing. I set the matter down for continuation of the hearing before Member Gregory and ordered Dr Doyle to attend the hearing.
[19] The matter came on for further hearing on 17 September 2010 before Member Gregory and the matter was concluded. Member Gregory reserved his decision.
[20] Unfortunately Member Gregory was unable to deliver his decision in this matter. It came on for a directions hearing before the President who gave the parties the option of having the matter reheard by myself or having me determine the matter on the basis of the material filed and a consideration of the transcript of the 2 days hearing.
[21] The parties elected not to have the matter reheard.
[22] I have read all of the material filed and the transcript of the hearing and am in a position to make a decision.
The issues
(1) What is the effect of section 30 of the DBCA on the issue that the Tribunal must determine?
[23] The submission of the respondent as outlined in the written material and as covered at length in both hearings is in effect that section 30 means that no contract came into existence between anybody.
[24] Section 30 provides:
A regulated contract has effect only if it is signed by the building contractor and building owner (or their authorised agents).
[25] It is accepted in this case that there is no signed contract between the parties. The parties concede that any contract made is a regulated contract for the purposes of the DBCA and therefore the provisions of that act apply. There appears to me some confusion in the submissions made by Dr Doyle’s representatives as to whether it was submitted that a contract did not exist or whether it existed but was unenforceable. I note the following:
§In the written submissions provided at the first hearing they referred in paragraph 10 to “questions regarding a contract that fails to be signed pursuant to section 30…” The starting point with such a statement must be that a contract has been formed but does not comply with section 30 of the DBCA Act
§At the first hearing counsel for the Dr Doyle submitted “the respondent’s defence is based on succinct legal argument that the failure to comply with section 30 of the Act, renders a contract unenforceable”
§At paragraph 11 of the first written submission the respondent submits “the jurisprudence sets a clear standard in these circumstances, where section 30 fails to be complied with the resulting contract (my emphasis) has no effect”
[26] Yet at times in submissions Dr Doyle’s representative argued that there was in fact no contract in existence. For example in the first hearing it was orally submitted:
§“I say there wasn’t a contract because the law requires a contract to be evidenced in writing and signed. The failure of that to be – to be effected means there’s no evidence before the Tribunal of a contract as such. There is no contract.”
§And again”… my submissions go to the point that it’s a matter of law that no contract is in existence”.
[27] Ballina provided written submissions on this point and they were to the effect that the respondents submissions were irrelevant.
[28] They say “the use of the word “contract” in the order regarding the issue for determination is a verb not a noun. Therefore there can be no suggestion or inference that the issue for determination was wether or not the parties entered into a particular form of contract. The issue for determination is simply, did the applicant contract with the respondent or with Knott Hill”.
[29] This is to some extent correct. The issue is not whether Ballina entered into a contract which complied with the requirements of the DBCA.
[30] All the same, if the effect of a provision in the DBCA rendered the contract void or non existent then the respondent may have been able to maintain the position that Ballina contracted “with no one”.
[31] The respondent maintained in submissions that the decisions on the effect of section 30 made by the former CCT supported the position that if section 30 was not complied with a contract did not exist.
[32] The cases cited do not support that proposition.
[33] They do support the proposition that if section 30 is not complied with the contract (which still may exist) is unenforceable. The cases then go on to decide that as the parties could not enforce the contract if it does not comply with the DBCA then they must rely on the alternative claim of quantum meruit to recover the cost of work performed. For example from the decisions cited by the respondent
§Larson, J and L v Schimke [2007] QCCTB 83 the member of the CCT Ms Armitage said at 15
“I find that a contract came into existence, partly oral and partly written…” and at 16 “I find that by operation of section 30 of the DBCA, the contract has no effect. Neither the applicants nor the respondents therefore are able to maintain any claim in contract”
§Wieland v McCalpine [2007] QCCTB 108 where Member AW Collins said “… the difficulty for the applicant in this case is that he is seeking to recover payment from the respondents pursuant to a contract that fails to meet the formal requirements of the DBCA”.
The Member in that case went on to consider the effect of non compliance on the applicants entitlement to claim from the Respondents payment pursuant to the contract. In doing so he referred to the CCT decision of Member Lohrisch in Peter Venamore v Reynolds [2003] CCT BN9-03 and agreed with the view expressed by Member Lohrisch as to the potential application of sections 30, 92 and 93 of the DBCA in circumstances whether formal contractual requirements have not been met. He said:
“(v) Section 92 limits the civil, contractual consequences of any failure to comply with the DBCA by a builder to those instances where the effect of non compliance is specifically dealt with in those parts of the Act which lays down the compliance criteria for particular purposes.
(vi)Accordingly, the statutory result of non compliance in respect of a regulated contract appears confined to section 30 of the DBCA.
(vii) Section 30 does not prevent the contractor from recovering upon a quantum meruit.”
[34] The other cases cited are in the same vein and I agree with the outcomes.
[35] Section 92 of the DBCA specifically provides:
“Unless the contrary intention appears in this Act, a failure by a building contractor to comply with a requirement under this Act in relation to a domestic building contract does not make the contract illegal, void or unenforceable.”
[36] As such, if there is otherwise a contract, the effect of section 30 is not (as at times contended by the respondent) to make it non existent. There is still a contract however it is of no effect and the party who conducted the work is only able to recover on a quantum meruit basis.
[37] This may have been a problem for Ballina in this case but for part 2 of the order of Member Stilgoe which the respondent seems to have overlooked.
[38] The respondent contended that as a consequence of section 30 the applicant is limited to a claim in quatum meruit and they could not recover against the respondent because the respondent was not the owner of the land and therefore did not receive any benefit of the works carried out by the applicant (as is required to maintain an action of quantum meruit). This was in my view an irrelevant diversion because of the precise terms of the order made by the Tribunal.
[39] Part 2 of the order provides clearly:
“If the Tribunal determines the respondent is the party with whom the applicant contracted, the applicant is entitled to an order that the respondent pay it $42,674.25.”
[40] There is no need to consider whether the applicant could maintain a claim in quantum meruit against Dr Doyle. The order is quite clear, if the applicant contracted with Dr Doyle then a certain amount of money would be paid by Dr Doyle to the applicant.
[41] Therefore having found that a contract could have existed despite non compliance with section 30 of the DBCA, the next issue is:
(2) With whom did the applicant contract, Dr Doyle or Knott Hill?
[42] The Tribunal order could be taken by its terms to be a finding that a contract (with someone) existed, but for completion I will look at the issue of whether a contract was formed.
[43] The application and response and statements of evidence are of use in this regard.
[44] The applicants claim was that there was a request by Dr Doyle for Ballina to do certain works on certain terms which request was accepted and performed by Ballina and for the most part by the respondent (save for the payment of the balance of $42,674.25).
[45] Dr Doyle does not contest that he requested works be carried out, that the invoices were sent to him and that invoices were paid. The only basis upon which he disputes the claim is that he says all of these actions were done by him as agent of the owner of the property. Having read the statements of evidence I find (and there does not seem to be any dispute that there was) an agreement as claimed was entered into and that was certain in its terms. The applicant would carry out certain works at the site, he would invoice the respondent and he would be paid. I find that there was a contract. Ballina did contract with someone, therefore, the question is was it Dr Doyle or Knott Hill?
[46] Dr Doyle maintained that any acts on his part were as agent for Knott Hill. He dealt with this issue in his response and statements of evidence but not at the hearing or in submissions because by that stage the respondent was convinced that it was not necessary and irrelevant as there was no contract because of the provisions of the DBCA.
[47] Dr Doyle says in his written statement:
“During the first stage works the invoices were issued to him and paid by him in his capacity as agent for Knott Hill”.
He produced a written authority given to him by his then wife in 2006 which provided:
“I Isolde Evelyn Hertess, director of Knott Hill Pty Ltd, hereby authorise Mark Doyle to liaise with Ballina Building Services Pty Ltd and others as necessary for completion of the works on the Knott Hill trust property at 11 Camphorlaure Court Tallebudgera Valley Queensland.”
[48] Dr Doyle does not suggest he gave a copy of this to the applicant but he does state that “numerous times it was made clear by me to Mr Watt and the applicant that I did not own the property, and the property was owned by the company. The works were therefore carried out for the company.”
He says he authorised payment of invoices as agent for the company. It is noted that at no time does he state that the invoices were actually paid from the company funds.
[49] The issue was not dealt with at the hearing by the respondent. Indeed the respondent did not even turn up to the first hearing to be cross examined when clearly there was an issue as to credit. The applicant had denied any knowledge of the company or its ownership of the property.
[50] It is noted at the first hearing Dr Doyle’s counsel said when put to him by the Member that a lot of work was done on site and paid for-
“That’s correct, and my instruction would be that the work was paid for by the owner of the site the company known as Knott Hill Pty Ltd.”
[51] However sometime later in the hearing when the Member noted by looking at bank statements produced by the applicant that “the material seems to indicate that a number of – majority of the payments seem to have in fact been made by Mr Doyle… I don’t know whether you are going to contest that”. He did not contest that and simply said “well, I would submit that it’s irrelevant”.
[52] In summary the thrust of the respondents limited argument confined to the pleadings and the statements was that Knott Hill was the owner of the land, Dr Doyle was authorised to act as agent for the company and in dealing with Ballina all steps he took was as agent for the company and he had made Ballina aware of this.
[53] The applicant has a different version of events and it is dealt with in Mr Watt’s statements and in his oral evidence at the hearing.
[54] The relevant evidence in his statements is as follows:
§During the First Stage Works he dealt exclusively with Dr Doyle but was aware that Dr Hertess, his wife and children lived at the property. He assumed they owned the property.
§Payments were made by direct deposit to Ballina’s bank account with the description inserted by the payee “M Doyle”. This is supported by copies of bank statements provided by the applicant.
§Sometime towards completion of the First Stage Works he become aware that the respondent and Dr Hertess had separated and Dr Hertess had moved out of the property.
§The first he heard of Knott Hill was when he was owed a substantial amount of money he stopped work and contacted Dr Doyle about payment. He said Dr Doyle said to him words to the effect-
“Get your solicitor or a debt collection agency to send an account for outstanding invoices to Knott Hill Pty Ltd. That’s my wife’s company.”
He said he didn’t take it from that, that the company owned the land but rather that Dr Doyle wanted to retaliate against his wife in the divorce process. He did send the invoice to Knott Hill as asked.
§With respect to the works the subject of these proceedings he said that after being asked to do the work he asked Dr Doyle to sign a contract. He said Dr Doyle said to him “I don’t want to sign a contract” and asked him to operate on the basis that they continue the 7 day payment arrangement with Ballina that it existed for the First Stage Works.
§He said at no time did Dr Doyle tell him Knott Hill owned the site or that he was acting as agent for Knott Hill.
§Work proceeded and Dr Doyle started delaying payment. Ballina left site on December 07 and the amount of $42,674.25 was owing.
§He said he met Dr Doyle on site on 1 February 2008 to discuss payment. Dr Doyle raised the issue of costs but did not mention at anytime anything about Knott Hill being responsible for payment.
§What followed was a series of letters from Ballina seeking payment of overdue monies. Ballina received a letter on 1 March 2008 from Dr Doyle. It refers to Knott Hill in the senders address but nowhere in the text of the letter does it refer to Knott Hill as the owner or being responsible for account. The letter is signed by Dr Doyle.
§The applicant pointed out that the letter contains the following statements made by Dr Doyle:
(a)“I am not prepared to pay…”
(b)“… there were materials included on my bill…”
(c)“How much material have I paid for…”
(d)“Why should I pay…”
(e)“I have said…”
(f)“I asked if you had included 2 payment of mine”
§These statements he says are not consistent with any assertion that Knott Hill is responsible for any obligations including payment under the contract.
§Ballina also points out that he subsequently discovered Dr Doyle lodged a caveat over the property (presumably during divorce proceedings). The caveat provided:
“The applicant Mark Andrew Doyle claims that Knott Hill Pty Ltd holds the whole of the property on trust for the applicant and therefore the applicant has an equitable interest in the said property (consequently the applicant is the beneficial owner of the whole of the subject property)”
§With respect to the written authority issued by Dr Doyle’s wife in 2006 the applicant’s evidence was that the first time he saw that authority was when it was annexed to the respondent’s letter in July 2009 after the dispute had arisen.
§At the hearing Mr Watt did give evidence and was cross examined. I note that during the cross examination of Mr Watt it was never put to him that he was told by Dr Doyle (as Dr Doyle contends) that Knott Hill was the owner of the site and responsible for payment.
§Unlike Dr Doyle, Ballina did address in its submissions the issue of whether the applicant contracted with Dr Doyle or Knott Hill and confirmed that the evidence of Mr Watt was that:
o All negotiations were with Dr Doyle
o Dr Doyle never disclosed that Knott Hill was the owner of the land and that he was acting as Knott Hill’s agent
o Dr Doyle gave all directions and approvals for variations
o Accounts were issued to Dr Doyle and he paid them
o As to the written authority given in 2006 he never saw it and in any event one would infer that it was revoked upon the respondent’s separation from his wife.
o The lodging of the caveat by Dr Doyle claming to be the beneficial owner is consistent with the applicant’s version of events.
[55] I have not had the benefit of hearing the oral evidence from the parties. I have read all the documents and I accept the evidence of Mr Watt that he was never told by Dr Doyle that he was not the owner of the property. I accept the applicant’s evidence because it is consistent with the documents. The respondents evidence is not. For example in none of the correspondence when the dispute arose did Dr Doyle raise the issue of Knott Hill being responsible for payment. To the contrary he used language which would lead the applicant to believe that he was clearly responsible for the obligations (if any existed) to Ballina. He paid the invoices. Despite some submissions to the contrary it appears that this fact seems to have been subsequently conceded and certainly there was no evidence put forward by Dr Doyle that the money came from the company.
[56] I find that the applicant did contract with Dr Doyle. I do not find that in contracting with the applicant Dr Doyle was acting agent of Knott Hill. The acts and conduct of Dr Doyle as I have found above to have occurred are inconsistent with that assertion. He negotiated the contract and gave all directions to the applicant, he at no time disclosed that Knott Hill was the owner of the property. He never gave the applicant a copy of the authority issued to him by the company. I accept in any event the inference was that it would have been revoked once the marriage broke down. The accounts were issued to Dr Doyle and he paid them from his own funds.
Findings
[57] As a consequence of the self executing order made by the Tribunal in April I order that the respondent must pay to the applicant the sum of $42,674.25. These monies are to be paid within 14 days.
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