Foley v Steve Bagnall Homes Pty Ltd - [2018] QCAT 458

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Foley v Steve Bagnall Homes Pty Ltd [2018] QCAT 458

PARTIES:

IAN FOLEY and BERNADETTE FOLEY
(applicants)

v

STEVE BAGNALL HOMES PTY LTD

(respondent)

APPLICATION NO/S:

BDL090-15

MATTER TYPE:

Building matters

DELIVERED ON:

31 October 2018

HEARING DATE:

24, 25, 26, 27 October 2016; 1 December 2016; and
On the papers August 2018

HEARD AT:

Brisbane

DECISION OF:

Member Burke

ORDERS:

1.   The Respondent is to make payment to the Applicants in the sum of $167,232.89 in satisfaction of the Applicants’ claim for restitution and damages for breach of contract and/or negligence and in satisfaction of the Respondent’s counterclaim.

2.   The parties are to provide submissions to the Tribunal in writing within 21 days in relation to:

(a)   the interest, if any, to be imposed; and

(b) costs of the proceedings.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – domestic building dispute – whether premature issue of progress claim for Practical Completion stage – where owner terminates contract for builder’s failure to complete works by Date for Practical Completion – damages for breach of contract for defective and incomplete work – restitution for PC and PS items under contract - assessment of whether rectification work necessary and reasonable course to adopt

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS – whether variations compliant with Domestic Building Contracts Act 2000 (Qld) – right of building contractor to recover amount for variation

Domestic Building Contracts Act 2000 (Qld), s 67, s 69,
s 79, s 80, s 82, s 84
Queensland Building and Construction Commission Act 1991 (Qld)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 168(1)

Allaro Homes Cairns Pty Ltd v O’Reilly & Anor [2012] QCA 286
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Bellgrove v Eldridge (1954) 90 CLR 613
Cardona v Brown (2011) 27 BCL 194
CMF Projects P/L v Rigall & Anor [2014] QDC 90
Codelfa Construction Pty Ltd v State Railway Authority of NSW (1982) 149 CLR 337
D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Radford v De Froberville [1977] 1 WLR 1262
Robinson v Harman (1848) 1 Exch 850; [1848] EngR 135
Ruxley Electronics & Construction Co Ltd v Forsyth [1996] AC 344
Tabcorp Holdings Pty Ltd v Bowen Investments Pty Ltd [2009] HCA 8
Thompson Residential Pty Ltd v Tran [2014] QDC 156
Tranquility Pools & Spas Pty Limited v Huntsman Chemical Co Pty Limited [2011] NSWSC 75
Willshee v Westcourt Ltd [2009] WASCA 87

APPEARANCES & REPRESENTATION:

Applicant:

S Kelly, instructed by Paul J Hick Special Counsel at Active Law, Solicitors

Respondent:

M Panayi, Principal Solicitor of Industry Lawyers

REASONS FOR DECISION

This application is to be…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] QCAT 458
Decision Date: 31 October 2018

CaseChat Overview and Summary

The case of Foley v Steve Bagnall Homes Pty Ltd involved the Foleys, who were the owners of a residential property, and Steve Bagnall Homes Pty Ltd (SBH), the building contractor. The dispute arose from the construction of a two-storey house on the Foleys' property. The primary issues in the case were whether the building contractor had breached the contract by failing to complete the works by the specified date and whether the Foleys were entitled to damages and restitution for the incomplete and defective work. Additionally, the case addressed whether variations in the contract were compliant with the Domestic Building Contracts Act 2000 (Qld) and the contractor's right to recover amounts for variations.

The court examined the contractual terms, the progress of the construction, and the nature of the variations made. It was determined that SBH had failed to complete the works by the Date for Practical Completion, leading to the Foleys terminating the contract. The court found that the premature issue of a progress claim for the Practical Completion stage was not justified, and the Foleys were entitled to restitution for the Practical Completion and Practical Completion items under the contract. The court also assessed whether the rectification work was necessary and a reasonable course to adopt, concluding that the Foleys were entitled to damages for the breach of contract. Regarding the variations, the court found that they were not compliant with the Act and that SBH was not entitled to recover the amounts claimed for variations.

The court ordered that SBH pay the Foleys $167,232.89 in satisfaction of their claim for restitution and damages for breach of contract and/or negligence, as well as SBH's counterclaim. The parties were also required to submit written submissions regarding the interest and costs of the proceedings within 21 days.

Orders

Orders of the court

1. The Respondent is to make payment to the Applicants in the sum of $167,232.89 in satisfaction of the Applicants’ claim for restitution and damages for breach of contract and/or negligence and in satisfaction of the Respondent’s counterclaim.

2. The parties are to provide submissions to the Tribunal in writing within 21 days in relation to:

(a) the interest, if any, to be imposed; and

(b) costs of the proceedings.

Background

Background to the litigation

The Respondent’s counterclaim was revised marginally to the sum of $4,258.03.Factual Background The Applicants, Mr and Mrs Foley (‘the Foleys’), are the owners of a property at 44 Moreton Street, Toogoom, Queensland (‘the site’). Toogoom is a small seaside settlement located 20km from Hervey Bay. The site is on the shoreline as indicated in attachment ‘FS2’ to Mr Foley’s second statement dated 7 March 2016.[2][2]Mr Foley’s second statement dated 7 March 2016 – Exhibit 7. Between May and July 2010, the Foleys engaged a building contractor, Mr Steven Bagnall, on behalf of the Respondent (‘SBH’) to provide a quotation for the construction of a two storey brick and cladded house on their property in accordance with plans and engineering drawings provided by the Foleys to SBH. Four quotations were provided by SBH during the period May to July 2010 with the last quotation dated 30 July 2010. After the first quotation in May 2010, the final plans for construction including engineering plans were prepared. The final plans were prepared by Payten Rodger being drawing file number 080629, pages BA 1 to 3. Structural drawings were prepared by Cardno (Qld) Pty Ltd consisting of 12 drawings for job no. 29270575. The plans and drawings were lodged with the building certifier in June 2010 and the stamped plans were received from the Fraser Coast Regional Council (‘FCR Council’) in July 2010. There was some confusion during the evidence of Mr Foley and Mr Bagnall regarding the plans relied upon by Mr Bagnall in providing his final quotation. Exhibit 2 comprises the Payten Rodger plans and Cardno structural plans which Mr Foley states were the contract plans relied upon by Mr Bagnall in preparing his final quotation. Mr Bagnall gave evidence that the Cardno structural plans relied upon by him are the same as those in Exhibit 2 but disputes that the Payten Rodger plans relied upon by him consisted of 3 pages. Mr Bagnall asserts that he prepared his quotation on a set of plans containing only 2 pages.[3] [3]Exhibit 21 – 2 pages of plans Mr Bagnall provided a final quotation on 30 July 2010.[4] In evidence, Mr Bagnall accepted that it was possible that he had relied upon the Payten Rodger 3 page plans as some of the items on which he provided his quotation were not relevant to the 2 page plans. The quotation formed part of the contract as the Specifications identifying details of the works to be carried out.[4]Exhibit 3 A standard form Queensland Master Builders’ Residential Construction Contract (RBC 07/10) was signed by the Foleys and SBH on 4 August 2010.[5] The contract sum for the works was $614,200.00.[5]Exhibit 4 SBH commenced work on the site on 3 August 2010. Progress claims for the deposit and the base stage were issued to the Foleys on 4 August 2010 and 2 September 2010 respectively.[6][6]Annexures “F5” and “F6” to Exhibit 6, the first statement of Mr Foley dated 30 November 2015 Further progress claims were issued by SBH in relation to the Frame Stage on 6 October 2010, the Enclosed Stage on 1 November 2010 and the Fixing Stage on 19 November 2010.[7] The amounts of $109,385.00 for the Frame Stage, $189,498.28 for the Enclosed Stage and $157,478.05 for the Fixing Stage as claimed were duly paid by the Foleys.[7]Annexures “F9” to “F11” to Exhibit 6

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Foley v Steve Bagnall Homes Pty Ltd [2018] QCAT 458
PARTIES:	IAN FOLEY and BERNADETTE FOLEY (applicants)
v
STEVE BAGNALL HOMES PTY LTD (respondent)
APPLICATION NO/S:	BDL090-15
MATTER TYPE:	Building matters
DELIVERED ON:	31 October 2018
HEARING DATE:	24, 25, 26, 27 October 2016; 1 December 2016; and On the papers August 2018
HEARD AT:	Brisbane
DECISION OF:	Member Burke
ORDERS:	1. The Respondent is to make payment to the Applicants in the sum of $167,232.89 in satisfaction of the Applicants’ claim for restitution and damages for breach of contract and/or negligence and in satisfaction of the Respondent’s counterclaim. 2. The parties are to provide submissions to the Tribunal in writing within 21 days in relation to: (a) the interest, if any, to be imposed; and (b) costs of the proceedings.
CATCHWORDS:	CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – domestic building dispute – whether premature issue of progress claim for Practical Completion stage – where owner terminates contract for builder’s failure to complete works by Date for Practical Completion – damages for breach of contract for defective and incomplete work – restitution for PC and PS items under contract - assessment of whether rectification work necessary and reasonable course to adopt CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS – whether variations compliant with Domestic Building Contracts Act 2000 (Qld) – right of building contractor to recover amount for variation Domestic Building Contracts Act 2000 (Qld), s 67, s 69, s 79, s 80, s 82, s 84 Queensland Building and Construction Commission Act 1991 (Qld) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 168(1) Allaro Homes Cairns Pty Ltd v O’Reilly & Anor [2012] QCA 286 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Bellgrove v Eldridge (1954) 90 CLR 613 Cardona v Brown (2011) 27 BCL 194 CMF Projects P/L v Rigall & Anor [2014] QDC 90 Codelfa Construction Pty Ltd v State Railway Authority of NSW (1982) 149 CLR 337 D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Radford v De Froberville [1977] 1 WLR 1262 Robinson v Harman (1848) 1 Exch 850; [1848] EngR 135 Ruxley Electronics & Construction Co Ltd v Forsyth [1996] AC 344 Tabcorp Holdings Pty Ltd v Bowen Investments Pty Ltd [2009] HCA 8 Thompson Residential Pty Ltd v Tran [2014] QDC 156 Tranquility Pools & Spas Pty Limited v Huntsman Chemical Co Pty Limited [2011] NSWSC 75 Willshee v Westcourt Ltd [2009] WASCA 87
APPEARANCES & REPRESENTATION:
Applicant:	S Kelly, instructed by Paul J Hick Special Counsel at Active Law, Solicitors
Respondent:	M Panayi, Principal Solicitor of Industry Lawyers