Contrast Constructions Pty Ltd v Bartlett

Case [2014] QCATA 262
CITATION: Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262
PARTIES: Contrast Constructions Pty Ltd
v
Brett Andrew Bartlett
APPLICATION NUMBER: APL370-13
PARTIES: Brett Andrew Bartlett
v
Contrast Constructions Pty Ltd
APPLICATION NUMBER: APL332-13

MATTER TYPE:

Appeals

HEARING DATE:

On the papers
HEARD AT: Brisbane
DECISION OF: Senior Member Stilgoe OAM
Member Favell
DELIVERED ON: 9 September 2014
DELIVERED AT: Brisbane
ORDERS MADE:

1.   The Appeals are allowed in part.

2.   The order made that Contrast Constructions Pty Ltd pay Mr Bartlett the sum of $218,940.17 is reduced by $2900 to $216,040.17.

3.   Interest should be allowed in addition on the sum of $216,040.17 ($218,940.17 less $2900) at the rate of ten percent per annum compounding monthly between 15 December 2009 and 4 February 2013.
CATCHWORDS: APPEALS - BUILDING DISPUTE - whether error of law - whether leave to appeal required -whether acceptance of repudiatory conduct -whether reasonable to issue a notice to remedy after work abandoned - whether liquidated damages appropriate - whether interest awarded appropriate

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

Senior Member Stilgoe

  1. In this matter the Appeal Tribunal consisted of Mr Favell, QCAT Member and me. I have had the benefit of reading his reasons in draft. I agree with his reasons, and his conclusions, and the order he proposes.

Member Favell

  1. Mr Bartlett contracted with a building company, Contrast Constructions Pty Ltd, on 23 June 2006 to build a house on the riverfront at 32 Hiron Street, St Lucia at a cost of $2,302,000. That sum was adjusted to $2,520,097.96.

  2. The contract was administered by an architect who also acted as an assessor. The role of the architect was to provide instructions to the builder, to act independently in assessing claims for delay costs, costs for completion of work and any claims for liquidated damages arising from a change to the date of practical completion.

  3. The architect for the purpose of administering and assessing the contract was initially Bligh Voller Nield Pty Ltd. The parties had agreed at the hearing of this matter that DM2 Architecture became the architect from 14 October 2008.

  4. In a decision now sought to be the subject of appeal the learned Member described the house as unique in that it had various items to be used in its construction that were of a high quality and design. She gave the example that there were approximately 20 windows to be installed using a PBC product instead of wood. The PBC product is rare for Australian standards but not uncommon in the European and Asian markets and was, according to the builder, a difficult product to source.

  5. Apparently there were difficulties associated with the supply of PBC windows and the application of paint to the surface which had to be sourced through a German automotive paint supplier. Mr Bartlett later elected to proceed with wood…

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AGLC
Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262
Case
[2014] QCATA 262
Decision Date

CaseChat Overview and Summary

Contrast Constructions Pty Ltd appealed against a decision of the Queensland Civil and Administrative Tribunal (QCAT) in a dispute with Bartlett regarding liquidated damages under a construction contract. The Tribunal had previously ruled in favour of Bartlett, ordering Contrast Constructions to pay Bartlett $218,940.17. Contrast Constructions contested this ruling, arguing that the Tribunal had erred in its decision. The appeal focused on the interpretation and application of clause M8 of the contract, which prescribed the entitlement to liquidated damages.

The central legal issue in the appeal was whether the Tribunal correctly interpreted and applied clause M8 in ruling that Bartlett's claim for liquidated damages should fail. Bartlett had argued that Contrast Constructions was liable for liquidated damages from 21 March 2008, the adjusted date for practical completion, until 15 December 2009, the date the contract was terminated. The Tribunal found that Bartlett's claim for liquidated damages should fail because outstanding instructions and other issues would have delayed practical completion, justifying an extension of time for Contrast Constructions. Furthermore, the Tribunal noted that Bartlett unreasonably delayed in serving a notice to remedy the breach.

The Court of Appeal found that the Tribunal had indeed erred in its interpretation of clause M8. The Court held that the Tribunal should not have considered the outstanding instructions and other issues in determining whether Contrast Constructions was liable for liquidated damages. The Court further found that Bartlett's delay in serving the notice to remedy the breach did not affect the liability for liquidated damages. The Court of Appeal thus allowed the appeal in part, reducing the amount Contrast Constructions had to pay Bartlett and allowing interest on the reduced amount.

The final orders of the Court of Appeal were that the appeals were allowed in part, reducing the payment from Contrast Constructions to Bartlett to $216,040.17 and allowing interest on this amount at a rate of ten percent per annum compounding monthly from 15 December 2009 to 4 February 2013.

Orders

Orders of the court

1. The Appeals are allowed in part.

2. The order made that Contrast Constructions Pty Ltd pay Mr Bartlett the sum of $218,940.17 is reduced by $2900 to $216,040.17.

3. Interest should be allowed in addition on the sum of $216,040.17 ($218,940.17 less $2900) at the rate of ten percent per annum compounding monthly between 15 December 2009 and 4 February 2013.

Background

Background to the litigation

In the context of an appeal, a party has an obligation to present an identifiable argument that an error has been made by the Tribunal in reaching its decision. It must be more than mere disagreement with the Tribunal’s finding on a contested issue. The primary function of the Appeal Tribunal is to correct errors made by the Tribunal. It is not to allow an applicant to have a second opportunity to present or argue their case in the hope that the Appeal Tribunal will consider the evidence differently and the party will achieve a different result on the issues appealed.[13][13] Lida Build Pty Ltd v Miller and Another [2011] QCATA 219, [11]-[12]. Facts found by the Tribunal Mr Bartlett’s counsel in written submissions conveniently sets out a number of facts found by the Tribunal as follows. The entitlement to liquidated damages is prescribed in clause M8 of the contract.[14] The requirements for that clause to operate are that the works have not reached practical completion (as defined in clause M1.1) by the date for practical completion.[14] Paragraph [58] Reasons for Decision. The parties agreed that the adjusted date for practical completion was 21 March 2008 and that the contract was terminated on 15 December 2009.[15][15] Paragraph [59] Reasons for Decision. Mr Bartlett claimed liquidated damages between 21 March 2008 and 15 December 2009 (inclusive) plus interest at ten percent.[16][16] Paragraph [60] Reasons for Decision. Mr Bartlett gave notice of the intention to claim liquidated damages as required by the contract on 30 December 2008.[17][17] Paragraphs [61]-[65] Reasons for Decision. The builder’s contention was that they were awaiting instructions.[18][18] Paragraphs [66]-[67] Reasons for Decision. In late December 2008 and early January 2009 the builder elected to no longer proceed with the works.[19][19] Paragraph [68] Reasons for Decision. As at 12 January 2009, notwithstanding the outstanding instructions, there were incomplete works for which instructions had been provided.[20][20] Paragraph [76] Reasons for Decision. As at 12 January 2009 the builder abandoned the works under the contract.[21][21] Paragraph [78] Reasons for Decision. Mr Bartlett accepted the builder’s repudiatory conduct on 14 December 2009 by serving a notice to remedy default.[22][22] Paragraph [79] Reasons for Decision. The claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give reason to an extension of time claim in the builder’s favour for the delay caused in providing the instructions.[23][23] Paragraph [80] Reasons for Decision. Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some nine months after the builder abandoned the site.[24][24] Paragraph [81] Reasons for Decision. In paragraph [80] of the Decision, the Member found: The claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues that would delay practical completion and that would otherwise give reason to an extension of time claim in the builder’s favour for the delay caused in providing the instructions. Mr Spender, the builder’s expert witness, gave evidence at the hearing that the installation of the hot water system was necessary for practical completion to be reached. The Tribunal has already made a finding that this instruction was outstanding as at 18 December 2008.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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