Fox v Shooter

[2012] QCATA 52

CITATION: Fox v Shooter and Anor [2012] QCATA 52

PARTIES:	Mr Wayne Jeffrey Fox t/as Wayne J Fox (Applicant/Appellant)
v
Gary Shooter Rod Snow (Respondents)

APPLICATION NUMBER: APL310-11

MATTER TYPE: Appeals

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Hon James Thomas, AM QC, Member

DELIVERED ON: 29 March 2012

DELIVERED AT: Brisbane

ORDERS MADE:

1.    Leave to Appeal granted;

2.    Appeal dismissed;

3.    Member’s orders of 2 August 2011 (QCAT file BDL097-10) are confirmed.

CATCHWORDS:

Appeal – Domestic building dispute – “date for practical completion” – “notice of practical completion” – requirements of clauses 13, 14 and 28 of General Conditions of BSA major works contract 2007

Queensland Civil and Administrative Tribunal Act2009, s 142

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).

REASONS FOR DECISION

1. This is an application by a builder “for leave to appeal or appeal” against the decision of a Tribunal Member in a domestic building dispute. The application is made under s 142 of the Queensland Civil and Administrative Tribunal Act 2009, under which appeals on a question of fact, or a mixed question of law and fact, may only be made by leave.

1. The applicant (Mr Fox) will be referred to as “the builder” and the respondents (Mr Shooter and Mr Snow) as “the owners”.

1. The proceedings were brought by the builder for $16,478.59 for the amount owing in respect of final payment on practical completion under the contract.  The owners cross-claimed for liquidated damages, alleging that substantial defects had not been remedied, and for liquidated damages under the contract.

1. In the result the Member held that the owners were entitled to liquidated damages and that they exceeded the amount of the builders claim.  She ordered the builder to pay the excess to the owners, mainly $17,211.25.  The Member also made orders requiring the builder to deliver various certificates to the owners, and made further directions concerning the completion by the builder of defective work which remained unrectified at the time of hearing.

1. The only ground stated in the notice of appeal is:

The Member has not taken into account the provisions of section 13 of the contract on the meaning of “practical completion” as defined under the definitions section of the contract.

1. However 3 specific points are raised in the builder’s written submissions and these will be addressed in due course.

1. In order to deal adequately with the questions raised on the present application it will be necessary to state some of the facts and issues that were raised in the proceedings before the Member.

Background Circumstances

1. The contract, described as a “major works contract for domestic building work”, was for the performance of specified works on the owners’ house for a total price of $153,650.00.  There was a conflict over which version of the “general conditions of BSA’s major works contract” applied, and the Member accepted the evidence of the owners that the 2007 edition had been used.  That finding appears correct, and I do not understand there to be any challenge to it.

1. The builder engaged the services of Everlyn Building Certifications Pty Ltd (“EBC”) to act as building certifier in respect of the contract.  EBC’s principal, Mr Everlyn, failed to advert to the fact that the house was in a “character code area” to which special design criteria would apply.  His oversight was not discovered until August 2009.

1. By that time, most of the work had been completed, although there were outstanding issues between the builder and the owners concerning defects about which the owners were complaining, and about some of which they still complain.

1. On 15 July 2009 the builder presented the owners with an ordinary invoice (headed “Tax Invoice/Statement”) for $16,478.59.  It listed an item of $23,270 as “final payment”, and allowed various credits leading to a claim for $16,478.59.  Twelve days later, on 27 July 2009, the owners were provided with EBC’s “final inspection report”.  That report listed six current defects that had not been attended to.  It also stated that re-inspection was required.  The owners were concerned over the unfinished work, and did not pay the account.

1. Shortly after this the fact that EBC's plans were non-compliant was discovered.  The history thereafter is one of inaction by the builder for a very long time.  No doubt the discovery of the Character Code Area listing produced problems for all parties, but it seems that these were mainly concerned with a garage awning and not with the issues that remained to be sorted out between the builder and the owners, that is to say, whether a notice of practical completion had been given by the builder in accordance with the contract, and whether the builder was obliged to remedy the defects (or some of them) before a valid notice of practical completion could be given.

Grounds

1. The applicant seeks to rely on several points to argue that the Member erred in finding that the “date for practical completion” was 19 July 2009 and in finding that the date on which the Member gave “notice of practical completion” was 26 May 2011.  These were the findings which resulted in the substantial assessment of liquidated damages.  The former date was the trigger for commencement of liquidated damages, and the latter date was the event that would cause the liquidated damages to cease.

1. The applicant’s first point is that the Member failed to give proper effect to clause 13 of the general conditions.  That clause provides a mechanism for extending the “date for practical completion”.  Relevantly, a contractor may claim an extension "if the contractor is delayed in achieving practical completion… by any of the following causes: … events occurring on or before the date for practical completion which are beyond the reasonable control of the contractor..”.

1. The builder’s submission is that the Member failed to take into account the words “events occurring on or before the date of practical completion which are beyond the reasonable control of the contractor..”.  His submission does not articulate the "event" on which he relies, but it may be assumed that he is referring to Mr Everlyn’s error and its consequences.

1. The first problem facing this submission is that on the evidence it could not reasonably be held that the builder’s delay in attaining practical completion was caused by Mr Everlyn’s error.  The error of the certifier could not possibly justify the inaction of the builder over a period of almost two years (between August 2009 when Mr Evelyn's error was discovered, and the period shortly before July 2011 when the builder finally attended to some of the defects of which the owners had complained).  The problems which arose following the zoning problem cannot justify any postponement of rectification of the items that were in issue.  They should have been rectified irrespective of any need that arose to satisfy the Council in relation to other matters arising from Mr Everlyn's error.

1. Further, as pointed out in the respondent’s submissions, clause 13 is concerned with the means by which a “reasonable extension” for the date of practical completion may be obtained.  It provides a process which would enable a builder’s claim for extension to be considered and granted.  Unfortunately at no stage did the builder seek to activate any such process, or request any such extension.  He has maintained, and continues to maintain, that the date of practical completion was achieved in July 2009, and that he did not need an extension.  The prescribed process for claiming an extension requires the submission of a stated form.  This is expressed in mandatory terms in clause 13.  There is no issue of “substantial compliance” to be considered, as the builder at no stage did anything that could be said to be an attempt at compliance.  It would seem then, that even if the builder had an arguable case for having the time for practical completion extended, he at no time exercised his right to seek an extension.  The Member so found. 

1. No error, factual or legal, can be seen in the Member’s finding that practical completion was not achieved until the builder belatedly attended to some up the defects in 2011.  He could have rectified the defects at any time had he chosen to do so, and was not prevented from doing so by any necessary consequences of Mr Everlyn's error.

1. The builder also referred to another alleged cause of his delay, which in his submission entitled him to a reasonable extension of the date for practical completion.  He referred to the words in clause 13 of the general conditions “for a variation not requested by the owner, then only if the variation was required due to circumstances which the contractor could not reasonably have foreseen when the contract was made.”  Those are the words of another event mentioned in clause 13 for which the builder may claim an extension.

1. There are a number of reasons why this provision cannot assist the builder.  Firstly he did not identify any variation.  The submission also conveniently overlooks the contractual requirement that for the purpose of that clause the variation must be "a variation which is the subject of a variation document in accordance with the provisions of condition 21 of this contract.”  No such document is in evidence.  Furthermore, if it be assumed that there was a variation to the extent that the builder should perform whatever was necessary to be done to comply with Council requirements, it is by no means clear that this was “a variation not requested by the owner”.  Even if it be assumed that there was such a variation, its nature was not litigated, and it was not at any stage raised by the builder as a ground under clause 13 which the owners should consider for the purposes of granting a reasonable extension.

1. There are also provisions in clause 14 which stand in the way of the essential findings sought by the builder, namely that the date of practical completion was 15 July 2009, and that he gave the owners a certificate of practical completion on that date.  I do not propose to set out that clause or discuss the many ways in which the builder failed to follow the steps that are there stated as necessary to ascertain and fix a "date of practical completion" for the purposes of the contract, and to present the owners with a certificate of practical completion.  It is enough to say that the builder failed to comply with practically every requirement of clause 14.

1. The builder also referred to the definition of “practical completion” in clause28, and submitted that the Member did not have proper regard to the words “minor omissions or minor defects”.  No details are provided by the applicant of the respects in which the Member is said to have erred, or of evidence which shows that the omissions and defects which were admittedly present, as identified by his own certifier on 27 July 2009 must be regarded as “minor” ones.  There is a conflict of evidence on this issue, in that the report obtained by the owners from “Handovers” on 9 March 2010 identifies a serious list of defects containing 25 items.  On the evidence available to the Tribunal it could not be said that the Member was bound to find that on 15 July 2009 (the date contended for by the builder as the date of practical completion) the works were complete “apart from minor omissions or minor defects”.

1. Finally the applicant contends that the Member erred under the “Wednesbury” rule of reasonableness.  Once again, apart from assertions of disagreement with the Member’s ultimate determination, no particulars are given on this ground, and on the available material it could not be made out.

1. In the result, although events occurred which were not within the control of the builder, and the result is an unfortunate one from his point of view, he did not make out a satisfactory case of entitlement to an extension of time, and the documents upon which he relies did not establish practical completion on the date for which he contends.  The owners were not responsible for the delays, and on the findings of the Member, they were blameless, and were subjected to considerable inconvenience through the non-completion of the work.  The findings of the Member of the date for practical completion (19 July 2009) and of the notice of practical completion (26 May 2011) were open on the evidence.  These resulted in a substantial assessment of liquidated damages, exceeding the amount claimed by the builder.

1. No error of law can be shown on the part of the Member.  Her orders for payment of money by the builder, and directions concerning further action by the builder in relation to certificates and rectification of defects are consistent with the findings of fact, and should be affirmed.

1. While I have some doubt as to whether any true questions of law were raised (as distinct from questions of mixed law and fact), issues were raised that were worthy of examination.  In the circumstances the appropriate orders will be to grant leave to appeal, dismiss the appeal, and confirm the Member’s orders.