Halliday v Geason
[2014] QCAT 31
•23 January 2014
| CITATION: | Halliday v Geason [2014] QCAT 31 |
| PARTIES: | Jeffrey Halliday (Applicant) |
| v | |
| Dean Geason (Respondent) |
| APPLICATION NUMBER: | BDL137-13 |
| MATTER TYPE: | Building Matters |
| HEARING DATE: | 22 January 2014 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Hughes |
| DELIVERED ON: | 23 January 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Dean Geason pays to Jeffrey Halliday the sum of $120,000.00 forthwith; and 2. Dean Geason pays to Jeffrey Halliday costs of $275.00 forthwith. |
| CATCHWORDS: | BUILDING DISPUTE – assessment of damages - jurisdiction – oral contract - negligence – reckless destruction – economic loss – measure of loss - costs to rectify – no additional entitlement to refund – remoteness – loss of rent – interest – costs Domestic Building Contracts Act 2000 ss 8, 30 Barbi v Brewer [2013] QCAT 348 |
APPEARANCES and REPRESENTATION (if any):
This application was determined on the papers pursuant to section 32 of the
Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
What is this Application about?
Home owners who enter into oral or informal agreements with unlicensed builders do so at their peril. Jeffrey Halliday did this and suffered loss. He now wants the Tribunal to assess his damages.
On 16 January 2013, Mr Halliday entered into an oral contract with Dean Geason to perform building works at 157 Golden Four Drive, Bilinga, Queensland. The work commenced on 17 January 2013 and was to be completed on 7 April 2013.
Mr Geason was unlicensed. He did not perform the work properly. He caused substantial damage to the property. On 7 April 2013, Mr Halliday ordered Mr Geason to cease work immediately. The work remains incomplete.
The Tribunal has granted Mr Halliday’s application for a decision in default of Mr Geason filing a response and has directed quantum to be determined.[1]
[1]QCAT Practice Direction No. 9 of 2010.
What is the Tribunal’s jurisdiction?
The Tribunal has jurisdiction to determine a building dispute.[2] This includes a domestic building dispute.[3] A domestic building dispute relevantly includes a claim or dispute for reviewable domestic work or a contract for the performance of reviewable domestic work or in negligence or trespass related to the performance of reviewable domestic work.[4]
[2]Queensland Building and Construction Commission Act 1991, s 77.
[3]Queensland Building and Construction Commission Act 1991, Schedule 2 definition of ‘building dispute’.
[4]Queensland Building and Construction Commission Act 1991, Schedule 2 definition of ‘domestic building dispute’.
‘Reviewable domestic work’ means domestic building work under the Domestic Building Contracts Act 2000.[5] ‘Domestic building work’ includes the renovation, alteration, extension, improvement or repair of a home and associated work.[6]
[5]Queensland Building and Construction Commission Act 1991, Schedule 2 definition of ‘reviewable domestic work’.
[6] Domestic Building Contracts Act 2000 s 8(1) and (3).
Mr Geason agreed to perform work for Mr Halliday including: internal repainting; installing new light fittings; removing paint on the external walls and repainting; replacing lower boards on the outer wall and filling cavity with foam to stop termites; and replacing weatherboard on the front wall with shadow cladding.
Mr Geason also performed work without Mr Halliday’s knowledge or consent including: removing carpets and vinyl floor coverings; replacing wooden beams under the house with metal beams; and removing internal walls, the veranda and bathroom.
The work agreed to be performed by Mr Geason is reviewable domestic work. The unauthorised work performed by Mr Geason is also reviewable domestic work. The application relates to the performance of that work. The Tribunal therefore has jurisdiction.
The Tribunal may therefore award damages, interest thereon, restitution and costs.[7]
[7] Queensland Building and Construction Commission Act 1991 s 77.
What are the damages claimed by Mr Halliday?
In his Affidavit in support of his request for a decision by default, Mr Halliday claims $183,282.46 from Mr Geason comprised of:
- $120,000.00 to reinstate damage caused by Mr Geason’s faulty work;
- $48,228.68 to refund the money paid by Mr Halliday to Mr Geason;
- $11,700 for loss of rental income;
- Interest on refund and loss of rent of $1,663.02; and
- Costs of $1,690.76 including travel expenses to inspect progress.
What is the basis upon which damages can be awarded?
Because the contract was oral, it has no effect.[8] Mr Halliday therefore has no contractual claim against Mr Geason. However, the Tribunal has previously noted[9] that it may still consider an oral agreement in any claim for negligence:
The fact that the law recognises the existence of concurrent duties in contract and tort does not mean that the existence of a contractual relationship is irrelevant to either the existence of a relationship of proximity or the content of a duty of care under the ordinary law of negligence. In some circumstances, the existence of a contract will provide the occasion for, and constitute a factor favouring the recognition of, a relationship of proximity…[10]
[8] Domestic Building Contracts Act 2000 s 30.
[9] Barbi v Brewer [2013] QCAT 348 at [10].
[10]Voli v Inglewood Shire Council (1963) 110 CLR 74 per Windeyer J.
The application is therefore grounded in negligence.
Was Mr Geason negligent?
It is trite that to establish negligence, Mr Halliday must prove that Mr Geason owed him a duty of care, Mr Geason breached that duty by failing to take reasonable care, the breach resulted in damage to Mr Halliday and the damage was not too remote.[11]
[11]In the builder context, see for example North v Paul Bongioletti Homes Pty Ltd and Pershouse [2011] QCAT 134.
Did Mr Geason owe Mr Halliday a duty of care?
In a claim for economic loss, proximity is the touchstone of a duty of care.[12] Although the oral contract between Mr Halliday and Mr Geason is of no effect by operation of legislation, its existence and the work performed under it establish proximity.[13]
[12]Bryan v Maloney (1995) 182 CLR 609.
[13]Ibid at [10], applied in Barbi v Brewer [2013] QCAT 348 at [52].
The High Court has emphasised the relationship of proximity between builders and home owners:
… there are strong reasons for acknowledging the existence of a relevant relationship of proximity between a builder… and a first owner… with respect to… economic loss. In particular, the ordinary relationship between a builder of a house and the first owner with respect to that kind of economic loss is characterised by the kind of assumption of responsibility on the one part (ie. the builder) and known reliance on the other (ie. the building owner) which commonly exists in the special categories of case in which a relationship of proximity and a consequent duty of care exists in respect of pure economic loss.[14]
[14]Bryan v Maloney (1995) 182 CLR 609 at [14].
Mr Geason represented himself as a licensed builder and engineer. He performed renovation work on Mr Halliday’s property. He used his own judgement in selecting suppliers and materials. Mr Halliday relied on Mr Geason’s (mis)representations and was vulnerable by not being able to protect himself from a failure by Mr Geason to take reasonable care in performing the work.[15] Mr Geason therefore assumed responsibility for the work.
[15]North v Paul Bongioletti Homes Pty Ltd and Pershouse [2011] QCAT 134 at [50].
Mr Geason therefore owed Mr Halliday a duty to take reasonable care in performing the renovation work.
Did Mr Geason breach his duty of care to Mr Halliday?
Because Mr Geason represented himself as a licensed builder and engineer, he assumes the standard of care of a licensed builder and engineer.[16] Therefore:
He is bound to exercise due care, skill and diligence. He is not required to have an extraordinary degree of skill or the highest professional attainments. But he must bring to the task he undertakes the competence and skill that is usual among (those) practising their profession. And he must use due care. If he fails in these matters and the person who employed him thereby suffers damage, he is liable to that person.[17]
[16]San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340.
[17]Voli v Inglewood Shire Council (1963) 110 CLR 74 per Windeyer J at [8].
The expert evidence[18] of the standard of Mr Geason’s work is adumbrated as follows:
[18]QBSA Report of Inspector Peter Campbell dated 21 April 2013 and Ensure Building Pty Ltd Report of Matthew Wilson dated 2 May 2013.
· Asbestos sheet Super 6 corrugated roof left in extremely poor condition;
· Bathroom removed;
· Internal walls stripped of all linings apart from kitchen;
· Asbestos lining of kitchen disturbed exposing asbestos fibres;
· Electrical wiring to walls removed;
· Weatherboard cladding partially or fully removed to front, side and rear elevations;
· Steel support and timber joists not suitable for exterior use;
· No engineer drawings, plans or designs to indicate licensed engineer to supervise or design works;
· Front wall in lounge left unsupported;
· Entire wall frame supporting roof removed;
· Work on rear of house and front façade is poor quality and would not pass frame inspection;
· Welds poor quality.
Mr Geason’s work was less than poor. It was tantamount to a reckless destruction of Mr Halliday’s house. Mr Geason thereby breached his duty of care owed to Mr Halliday.
What damage did Mr Halliday suffer damage as a result of Mr Geason’s breach of duty of care?
The below table is a summary of the expert evidence[19] of the damage and work required to Mr Halliday’s house.
[19]QBSA Report of Inspector Peter Campbell dated 21 April 2013 and Ensure Building Pty Ltd Report of Matthew Wilson dated 2 May 2013.
| Area | Description | Date noticed | Work required | Invoice / Quote[20] |
| Bedroom and lounge room front wall | Removed | 8 February 2013 | Reline with plasterboard | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Internal walls (excluding kitchen) | Removed without consent | 26 March 2013 | Reline with plasterboard | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Veranda and roof | Removed without consent, disturbing asbestos | 23 February 2013 | Rebuild and remove and replace with Colorbond roofing | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Bathroom | Removed without consent | 20 March 2013 | Complete new bathroom | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Bathroom | Refit not started | 2 April 2013 | Complete new bathroom | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Veranda frame | Inadequate steel | 7 April 2013 | Remove and replace | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Structural beams | Inadequate steel | 7 April 2013 | Remove and replace | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| External cladding | Not started, shadow cladding and Colorbond | 2 April 2013 | Reinstate weather boards | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Re-wiring | Not completed | 2 April 2013 | Complete re-wiring | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Re-plumbing | Removed and not started | 2 April 2013 | Fix and make good | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Roof | Not blasted and painted | 2 April 2013 | Replace with Colorbond fencing | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Red oak windows | Not supplied or installed | 2 April 2013 | Replace existing windows | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Entry door | Not supplied or installed | 2 April 2013 | Replace existing door | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Spa bath | Not supplied or installed | 2 April 2013 | Complete new bathroom | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Internal painting | Walls removed | 26 March 2013 | Repaint | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Kitchen | Uncertified and incomplete - asbestos lining exposed | 9 April 2013 | Replace | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Kitchen appliances and air conditioners | Removed | N/A | Repair and reinstall | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Front veranda | Concrete to be fixed and painting not started | 2 April 2013 | Rebuild | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Gutters | Not supplied or installed | 2 April 2013 | Replace | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Garage separation wall | Not started | 2 April 2013 | Reline with plasterboard | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Floorboards | Not sanded and sealed | 2 April 2013 | Replace | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Floor of granny flat | Carpet not laid | 2 April 2013 | Rebuild | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Walls and ceiling of granny flat | Not started | 2 April 2013 | Rebuild | Part of QN687 of 25 September 2013 for $132,000 plus GST |
| Garage bathroom | Removed and not supplied and installed | 2 April 2013 | Replace | Part of QN687 of 25 September 2013 for $132,000 plus GST |
[20]Although Mr Halliday also provided Interhull Constructions Quote 72 dated 25 September 2013 for “$130,000 plus”, Soanes Constructions Pty Ltd Quote QN687 dated 25 September 2013 for $132,000 is preferred as it itemises the work required and is based on an examination of the expert reports and an inspection of the property.
The purpose of damages is to restore Mr Halliday to the position he would have been in had the wrongful act not occurred.[21] The condition of the house is directly attributable to Mr Geason performing the renovations work without a builder licence or qualifications, failing to perform the work without due care and skill, failing to complete the work to a proper standard or at all, performing work without authorisation and supplying and using materials not fit for the purpose. Mr Halliday is left with a house that is a hazard and not fit for habitation.[22]
[21]Robinson v Harman [1848] EngR 135.
[22]See for example QBSA Report of Inspector Peter Campbell dated 21 April 2013: “no bathroom exists” and “asbestos lining of the kitchen has been disturbed exposing asbestos fibres” and Ensure Building Pty Ltd Report of Matthew Wilson dated 2 May 2013: “entire wall frame supporting roof load has been removed”, “work performed to the rear of the house and the front façade… would not pass a frame inspection” and “the deck is resting on unfilled blockwork the quality and stability of which is unknown”.
The quote for $132,000 plus GST represents the cost to rectify the damage caused by Mr Geason. Mr Halliday claims $120,000. I am satisfied that because of the substantial damage to the house caused by Mr Geason rendering it a hazard and not fit for habitation, the cost claimed to rectify of $120,000 is necessary and reasonable.[23]
[23]Bellgrove v Eldridge (1954) 90 CLR 613.
Mr Halliday also claims $48,228.68 refund of payments relating to Mr Geason. The documentary evidence supports the following amounts were paid by Mr Geason without Mr Halliday’s authorisation or by Mr Halliday for Mr Geason’s incomplete and defective work:
| Date | Description | Amount | Document |
| 17 January 2013 | Deposit | $2,000.00 | Receipt dated 17/01/13 |
| 24 January 2013 | Skip | $250.00 | Kartaway Mini Skips Invoice No. Q199808 dated 24/01/13 |
| 25 January 2013 | Skip | $36.30 | Kartaway Mini Skips Invoice No. Q202190 dated 25/01/13 |
| 28 January 2013 | Progress payment | $5,000.00 | Receipt dated 28/01/13 |
| 8 February 2013 | Fence and gates | $900.00 | Bendigo Bank Receipt dated 08/02/13 |
| 13 February 2013 | Skip | $250.00 | Kartaway Mini Skips Invoice No. Q202317 dated 13/02/13 |
| 27 February 2013 | Skip | $363.00 | Kartaway Mini Skips Invoice No. Q203669 dated 13/02/13 |
| 22 February 2013 | Progress payment | $4,250.00 | Bendigo Bank Receipt dated 22/02/13 |
| 28 February 2013 | Steel | $1,225.00 | Marshall Steel Centre Invoice 32392 dated 28/02/13 |
| 28 February 2013 | Materials and equipment | $1,088.28 | Mitre 10 Invoice No. 4234413 dated 28/02/13 |
| 1 March 2013 | Materials and equipment | $794.29 | Mitre 10 Invoice No. 4236016 dated 01/03/13 |
| 1 March 2013 | Materials and equipment | $135.77 | Mitre 10 Invoice No. 4236340 dated 01/03/13 |
| 8 March 2013 | Progress payment | $5,000.00 | Bendigo Bank Receipt dated 08/03/13 |
| 8 March 2013 | Skip | $363.00 | Kartaway Mini Skips Invoice No. Q199164 dated 08/03/13 |
| 13 March 2013 | Skip | $250.00 | Kartaway Mini Skips Invoice No. Q231566 dated 13/03/13 |
| 19 March 2013 | Skip | $250.00 | Kartaway Mini Skips Invoice No. Q203062 dated 19/03/13 |
| 20 March 2013 | Skip | $363.00 | Kartaway Mini Skips Invoice No. Q203062 dated 20/03/13 |
| 21 March 2013 | Progress payment | $4,000.00 | Bendigo Bank Receipt dated 21/03/13 |
| 22 March 2013 | Materials and equipment | $2,112.46 | Mitre 10 Invoice No. 4264993 dated 22/03/13 |
| 22 March 2013 | Materials and equipment | $652.26 | Mitre 10 Invoice No. 4265581 dated 22/03/13 |
| 22 March 2013 | Skip | $363.00 | Kartaway Mini Skips Invoice No. Q202683 dated 22/03/13 |
| 23 March 2013 | Skip | $250.00 | Kartaway Mini Skips Invoice No. Q203088 dated 23/03/13 |
| 27 March 2013 | Progress payment | $2,000.00 | Bendigo Bank Receipt dated 27/03/13 |
| 28 March 2013 | Progress payment | $1,250.00 | Bendigo Bank Receipt dated 28/03/13 |
| 6 April 2013 | Contribution to fence | $300.00 | Receipt No. 70 dated 06/04/13 |
Mr Halliday received no benefit from this expenditure of $33,446.36. Therefore no offsets are appropriate. However, they are not recoverable in addition to the costs of rectification. This is because they represent costs Mr Halliday has incurred to renovate the house. They therefore form part of the costs of rectification referred to above. To award this expenditure in addition to the costs of rectification would amount to ‘double-dipping’. The costs of rectification encompass the amounts expended by Mr Halliday.
What damage is too remote?
Mr Halliday also claims $11,700 due to the lost opportunity of rental income of $450 per week for 26 weeks from February 2013 to July 2013 (26 weeks). This is on the basis that he had tenants ready to move in shortly prior to the renovations.[24]
[24]Ray White rental valuation letter dated 10 January 2013 and email Danni Robinson, Director and Property Manager, Ray White Mermaid Beach dated 9 May 2013.
This is a claim for consequential damage and remoteness therefore needs to be considered:
The rule of remoteness of damages restricts compensation to those elements which are reasonably in the contemplation of the parties at the time the contract was made.[25]
[25]Williamson & Williamson v McErlean t/a P & D Patios [2013] QCAT 272 at [15].
There is no evidence of any residential tenancy agreement or application to rent. I am not satisfied the agent’s email is sufficient evidence of tenants being ready to move in. It is dated some four months after the renovation work commenced. It does not state a start and end date of the alleged tenancy. Even if tenants were available, it was Mr Halliday’s decision to renovate.
There is also no evidence of any mitigation of loss of rent by Mr Halliday.
Because of these elements, I consider that the claim for loss of rent is too remote.
Are interest and costs payable?
Because I have not allowed damages by way of refund or loss of rent, no interest is payable on those amounts.
Because the rectification costs awarded are based on a quote, Mr Halliday is yet to incur those costs. The award of damages is therefore based on the current cost to Mr Halliday to rectify the work and it is therefore inappropriate to award interest on this amount.[26]
[26]Ibid at [18].
Mr Halliday also claims costs of $1,690.76 “including travel expenses to inspect progress”. No particulars of dates or times are provided or evidence of this amount being incurred. The Tribunal cannot award an amount claimed without proof of the amount and how it has been calculated:
In the face of poorly prepared material, the tribunal cannot make assumptions or guess at facts and events or the meaning or importance of material. The tribunal cannot make findings of facts where there is no evidence. It cannot award damages if there is no material that points to the quantum of the damage suffered. Parties must take responsibility for the preparation of their own case.[27]
[27]Clarke v Cascade Pools (Qld) Pty Ltd [2010] QCAT 323 at [3].
Mr Halliday did incur a fee of $275 to file the Application. As Mr Halliday has predominantly succeeded in his Application, I consider it in the interests of justice to award him his filing fee.[28]
[28] Queensland Building and Construction Commission Act 1991 s 77(1)(h).
What are the appropriate orders?
The appropriate orders are that:
- Dean Geason pays to Jeffrey Halliday the sum of $120,00.00 forthwith; and
- Dean Geason pays to Jeffrey Halliday costs of $275.00 forthwith.
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