Helu v Yuan

Case [2023] QCATA 12

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Helu v Yuan [2023] QCATA 12

PARTIES:
PAUL HELU

(applicant/appellant)

v
HONGWEN YUAN

(respondent)

APPLICATION NO/S:

APL098-21

ORIGINATING APPLICATION NO/S:

BDL176-19

MATTER TYPE:

Appeals

DELIVERED ON:

10 February 2023

HEARING DATE:

5 April 2022

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown

ORDERS:

1.     Leave to appeal is granted.

2.     The appeal is allowed.

3.     Order 1 of the decision of the Tribunal made 3 March 2021 is set aside.

4.     Paul Helu must pay to Hongwen Yuan $23,782.63 within 28 days of the date of this decision.

5.     The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions, not exceeding three (3) pages in length, on the costs of the appeal within fourteen (14) days of the date of this decision.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL GENERAL PRINCIPLES – EXCESSIVE OR INADEQUATE DAMAGES – DAMAGES EXCESS – grounds of appeal – consideration of costs in appeal proceedings concerning building disputes – varying contract by oral agreement – evidence to varying a contract – right to rectification damages – cost of rectifying building works – what is necessary and reasonable in awarding costs – quantum meruit in assessing damages – termination of contract and assessment of damages

Queensland Building and Constitution Commission Act 1991 (Qld), sch 1B s 22, sch 1B s 23(2)

Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 142(1), s 142(3)(b), s 146, s 147(2), s 147(3)

Allesch v Maunz (2000) 203 CLR 172

Amundsen v Queensland College of Teachers [2011] QCATA 2
Bellgrove v Eldridge (1954) 90 CLR 613
Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192
Ericson v QBCC [2014] QCA 297
GDLA v GMG [2017] QCATA 18
Harrison & Anor v Meehan [2017] QCA 315
Pickering v McArthur [2005] QCA 294
Queensland Vedic Cultural Centre Pty Ltd v Lal [2022] QCATA 50
Ruxley Electronics and Construction Ltd v Forsyth [1996] 1 AC 344
Stone v Chappel [2017] SASFC 72
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272
Ventura v Svirac [1961] WAR 63

Yuan v Helu (unreported, QCAT, Member Hughes, 3 March 2021)

APPEARANCES & REPRESENTATION:

Applicant:

Mr J Hitchcock, solicitor, AJ & Co

Respondent:

Mr R Hii instructed by Dimension Legal

REASONS FOR DECISION

  1. The applicant/appellant (Mr Helu) constructed a swimming pool for the respondent (Mr Yuan). Mr Yuan said that the building work undertaken by Mr Helu was defective and that, inter alia, the pool as constructed was smaller than as specified in the building contract.

  2. On 3 March 2021, the Tribunal ordered that Mr Helu pay to Mr Yuan $59,010.00 for damages for breach of contract plus costs.[1] The Tribunal dismissed Mr Helu’s counter-application.

    [1]Yuan v Helu (unreported, QCAT, Member Hughes, 3 March 2021) 1.

  3. Mr Helu appeals the decision of the Tribunal.

    The decision below

  4. The learned member found:

    (a)Mr Yuan was entitled to have the works performed as required by…

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Details
AGLC
Helu v Yuan [2023] QCATA 12
Case
[2023] QCATA 12
Decision Date

CaseChat Overview and Summary

The appeal by Mr Helu against the decision of the Tribunal in the matter of Helu v Yuan concerns the contractual dispute between the parties over the construction of a swimming pool and spa. The dispute was heard and determined by the Queensland Civil and Administrative Tribunal (QCAT), and the appeal was heard by the Appeal Tribunal.

The appeal raised several legal issues, including the admissibility of evidence regarding an oral variation to the contract, the assessment of the cost of rectifying the defective building works, the application of the Domestic Building Contracts Act 2000 (Qld), and the entitlement to recover on a quantum meruit basis. The appeal also addressed whether it was necessary and reasonable for the pool to be demolished and rebuilt. The grounds of appeal focused on whether the tribunal erred in its findings on these issues.

In determining the appeal, the Appeal Tribunal considered the statutory framework governing appeals and the principles guiding the granting of leave to appeal. It was noted that the appeal tribunal may confirm, amend, set aside, or substitute the decision of the tribunal below, depending on whether the appeal concerns a question of law or a question of fact or mixed law and fact. The tribunal also considered the evidence presented by both parties and the independent contractors' quotes and reports regarding the proposed remedial works.

The Appeal Tribunal found that the tribunal below had erred in several respects. The tribunal had incorrectly excluded evidence of discussions between the parties, which could have been relevant to the oral variation of the contract. The tribunal had also erred in its assessment of the cost of rectification work, finding that it was not necessary and reasonable to demolish and rebuild the pool. The tribunal further erred in failing to consider the entitlement of Mr Helu to recover on a quantum meruit basis for the work completed.

Consequently, the appeal was allowed, and the order of the tribunal was set aside. Mr Helu was required to pay Mr Yuan $23,782.63 within 28 days of the decision. The parties were directed to file and exchange submissions on the costs of the appeal within fourteen days of the decision.

Orders

Orders of the court

1. Leave to appeal is granted.

2. The appeal is allowed.

3. Order 1 of the decision of the Tribunal made 3 March 2021 is set aside.

4. Paul Helu must pay to Hongwen Yuan $23,782.63 within 28 days of the date of this decision.

5. The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions, not exceeding three (3) pages in length, on the costs of the appeal within fourteen (14) days of the date of this decision.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Mr Helu appeals the decision of the Tribunal. The decision below The learned member found:(a)Mr Yuan was entitled to have the works performed as required by the contract;[2](b)Evidence of an oral variation to the building contract in respect of the size of the pool and inclusion of heating was inadmissible;[3](c)Mr Helu failed to:(i) undertake the works with due care and skill;(ii) complete the works to a proper standard or at all;(iii) supply and use materials in accordance with their specifications or otherwise fit for their purpose;[4](d)the cost of rectifying the defective building works, which rectification work was necessary and reasonable, was $59,000.00;[5] (e)Mr Yuan was entitled to liquidated damages in the amount of $10.00;[6](f)As the works were not completed by the due date under the contract, Mr Helu was not entitled to the final PC payment of $6,000.00.[7] [2]Reasons at [13].[3]Reasons at [6] and [7].[4]Reasons at [19].[5]Reasons at [20].[6]Reasons at [24].[7]Reasons at [25].The grounds of appeal Mr Helu relies upon six grounds of appeal:(a)Ground 1 and Ground 3 – the tribunal erred in finding that the parties had not agreed to vary the contract and that evidence of discussions between the parties was inadmissible;(b)Ground 2 – the tribunal erred in its finding as to the quantum of the costs of rectification work;(c)Ground 4 – the tribunal erred in applying the Domestic Building Contracts Act 2000 (Qld) when considering the issue of contractual variations;(d)Ground 5 – the tribunal erred in failing to take into consideration the entitlement of Mr Helu to recover on a quantum meruit basis for the work completed;(e)Ground 6 – the tribunal erred in finding that it was necessary and reasonable for the pool to be demolished and rebuilt.Appeals – the statutory framework A party to a proceeding may appeal a decision of the tribunal.[8] An appeal on a question of law is as of right. To appeal a question of fact or mixed law and fact, the leave of the appeal tribunal is required.[9] The principles governing the granting of leave to appeal are well established: there is a reasonably arguable case of error in the primary decision; there is a prospect that the applicant will obtain substantive relief; leave is necessary to correct a substantial injustice caused by error; and that there is a question of general importance upon which further argument and a decision of the Appeal Tribunal would be to the public advantage.[10][8]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 142(1).[9]Ibid, s 142(3)(b).[10]Pickering v McArthur [2005] QCA 294 at [3] per Keane JA; Amundsen v Queensland College of Teachers [2011] QCATA 2 at [6]; GDLA v GMG [2017] QCATA 18. In deciding an appeal on a question of law only, the appeal tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and return the matter to the tribunal below for reconsideration.[11] The appeal tribunal may only substitute its own decision if the determination of the question of law decides the appeal in its entirety in favour of the appellant.[12][11]QCAT Act, s 146.[12]Ericson v QBCC [2014] QCA 297 at [10] per Homes JA.

Ratio Decidendi

Legal Principle Established

In deciding an appeal on a question of fact or mixed law and fact, subject to leave to appeal being granted, the appeal must be decided by way of rehearing.[13] In deciding the appeal the appeal tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and return the matter to the tribunal below for reconsideration.[14][13]QCAT Act, s 147(2).[14]Ibid, s 147(3).Consideration Noting the distinction between appeals on questions of law and appeals on questions of fact and mixed law and fact, it is necessary to identify whether each of the particular grounds of appeal raises a question of law or a question of fact or mixed law and fact. This in turn determines the way in which the appeal must be decided. Generally speaking, the appropriate approach is to first determine whether the appeal is required to be decided by way of rehearing. If so, then in the course of the rehearing the other grounds of appeal should be considered. In giving reasons for the disposition of the appeal the Appeal Tribunal is not required to discuss distinctly each of the questions raised by an appellant if the reasons sufficiently explain how the Appeal Tribunal reaches its conclusion. Directions were made following the hearing of the appeal for the parties to file submissions addressing whether the appeal should be decided pursuant to s 146 (appeal on a question of law) or s 147 (appeal on a question of fact or mixed law and fact) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). Before proceeding to consider the grounds of appeal it is necessary to revisit the circumstances in which the dispute between the parties arose.The background to the dispute On 21 December 2018 the parties entered into a QBCC standard form, level 2 renovation extension and repair contract for the construction of a swimming pool and spa. The contract was for a fixed price of $46,000.00. There were no prime cost items or provisional sums. The contract works were described as ‘building new swimming pool as per drawing with spa, four led light and water feature’. The completion period was 60 days from commencement. Progress payments were required at each of 5 stages. The contract provided for the payment of liquidated damages of $1.00 per day. The contract documents included the plans, specifications and foundations data. The plans were in evidence.[15][15]Respondent’s appeal book, 3.2. In addition to the contract for the construction of the swimming pool, the parties entered into two further contracts in respect of additional building works.[16] These additional works were not relevant to the dispute that subsequently arose between the parties.[16]Respondent’s appeal book, 2.3 and 2.4. Both parties filed statements of evidence in the proceeding below and gave evidence at the hearing. Mr Yuan relied upon the evidence of three independent contractors who appeared at the hearing. None of these witnesses provided statements of evidence however all three had provided quotes in various forms in respect of proposed remedial works and, in the case of one of the witnesses, a report regarding the construction of the pool and spa and rectification work.What was the evidence about the size of the pool?