Hendy v Queensland Building and Construction Commission
[2025] QCAT 388
•13 October 2025
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Hendy v Queensland Building and Construction Commission & Anor [2025] QCAT 388
PARTIES:
NIGEL HENDY (applicant)
v
QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (first respondent)
STAR BUILDING SERVICES PTY LTD (second respondent)
APPLICATION NO/S:
GAR613-24
MATTER TYPE:
General administrative review matters
DELIVERED ON:
13 October 2025
HEARING DATE:
On the papers
HEARD AT:
Brisbane
DECISION OF:
Member Lambie
ORDERS:
The decision of the first respondent to disallow the applicant’s claim under the statutory insurance scheme is confirmed.
CATCHWORDS:
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – General Administrative Review – application by building owner to review a decision by the Queensland Building and Construction Commission to reject a claim by building owner – whether the building owner validly terminated a building contract – what is substantial breach
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTIONS FOR BREACH – REPUDIATION AND NON-PERFORMANCE – whether notice of intention to terminate contract complied with – what is sufficient notice to the party in breach – Generally – contractual right of termination – whether right to terminate at common law – whether notice effective to terminate on another ground
Queensland Building and Construction Commission Act 1991 (Qld)
Queensland Building and Construction Commission Regulation 2018 (Qld)
Queensland Civil and Administrative Tribunal Act 2009 (Qld)
Byrnes v Jokana Pty Ltd [2002] FCA 41
Elderslie Property Investments No 2 Pty Ltd v Dunn [2008] QCA 158
Freedom Homes Pty Ltd v Botros & Anor [2000] 2 Qd R 377
Harper Properties Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 56
Hopper & Anor v Queensland Building and Construction Commission (No 2) [2019] QCAT 212
Hounslow LBC v Twickenham Garden Developments Ltd [1971] 1 Ch 233
Kim v Queensland Building and Construction Commission [2025] QCAT 217
MacDonald v Queensland Building and Construction Commission [2014] QCAT 158
Mitchamy Developments Pty Ltd v Adams & Anor [2010] QCAT 484
Miller v Queensland Building and Construction Commission [2022] QCAT 151
Murphy Corporation Ltd v Acumen Design and Development (Queensland) Pty Limited & Anor (1995) BCL 274
Qline Interiors Pty Ltd v Jezer Construction Group Pty Ltd [2002] QSC 88
Re White Industries (Qld) Pty Ltd [1990] QSC 10
Schofield v Queensland Building and Construction Commission & Anor [2019] QCAT 73
Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359
Stickney v Keeble [1915] AC 386Yendex Pty Ltd v Prince Constructions Pty Ltd [1988] QSCFC 62
APPEARANCES & REPRESENTATION:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
On 21 March 2022, the applicant (Mr Hendy) and the second respondent (‘Star’) entered a contract for the construction of a new home at Jindalee. On 22 January 2024, Mr Hendy issued a termination notice (‘the Termination Notice’) to Star and, on 6 February 2024, lodged a Non-Completion Claim with the first respondent (‘the Commission’). On 16 May 2024, the Commission refused the claim on the basis that Mr Hendy had not validly terminated the contract (‘the Original Decision’). Mr Hendy sought internal review of the Original Decision. On 20 August 2024, the Commission affirmed the Original Decision (‘the Decision’). Mr Hendy has applied to the Tribunal for review of the Decision.
Background
The matter is complicated by the fact that Mr Hendy has not filed a document that comprehensively states his case, with the result that aspects of it must be inferred by reference to individual documents and items of correspondence. The Commission has, helpfully, sought to synthesise his position in its submissions but the Tribunal has independently perused all the material Mr Hendy has submitted in attempting to ensure it comprehends his position and arguments. Similarly, Star’s submission required interrogation of the source material to be properly understood.
Further, Mr Hendy was working to a tight budget, with the result that plans and specifications underwent significant revision. As a result, there are disputes as to whether certain items were within the scope of the contract and as to the validity of variations. This has had a bearing on the question of the validity of the termination.
The contract of 21 March 2022 was in the form of the QBCC New Home Construction Contract, which specified a price of $660,000 and a completion period of 200 construction days. Building, engineering and pool engineering plans were subsequently updated between April and June 2022. On 30 May 2022, Star provided an updated budget to Mr Hendy, containing cost-reduction measures.
On 3 August 2023, Star issued a variation (‘the 3 August Variation’) to Mr Hendy in the amount of $168,159.30 for excavation and demolition. On about 7 September 2023, Star issued an invoice for a progress claim for the Variation in the amount of $119,000. Mr Hendy obtained finance approval for this invoice and paid it on about 21 September 2023.
In about November 2023, Mr Hendy completed backfilling of the backyard.
On about 19 November 2023, Star issued an invoice to Mr Hendy for its final claim in the amount of $99,000. On about 10 December 2023, Mr Hendy took possession of the property. He sent an email to his financier attaching the final claim invoice on 11 December 2023. The claim was approved by the financier but not paid, in circumstances described below.
In or about December 2023, a leak from the swimming pool was detected. On 22 December, Star advised Mr Hendy that that it had inspected the leak and determined that the return pool outlet had been crushed. It also advised that it had arranged for the garage walls to be waterproofed.
On 23 December 2023, leak detectors engaged by Star issued a report on the water leakage. On 24 December 2023, Mr Hendy instructed Star to hold off on the waterproofing. On 28 December 2023, Mr Hendy hired a concrete saw and attended to the crushed pipe himself.
On 30 December 2023, Mr Hendy contacted his financier and instructed it not to pay any more funds to Star.
On 4 January 2024, Mr Hendy issued a breach notice (‘the Breach Notice’) to Star attaching a list of items which included both incomplete and defective items. The same day, Star emailed Mr Hendy requesting that he and his family vacate the house immediately to permit Star to attend to the listed works. Mr Hendy did not respond to this message and did not vacate the house.
On 11 January 2024, Star contacted Mr Hendy to seek access to the property to work on the listed items. On 15 January2024, Mr Hendy replied:
Apologies for late reply. Only just saw this. No problem, access is the same as always. Let me know if you would like a couple of extra days to get all the annexure items completed. Also please advise which trades are coming today.
Star responded that the tradespeople could not attend that day because of the lack to timely confirmation, but that arrangements had been made for their attendance later in the week.
On 16 January 2024, Star’s solicitors responded to the Breach Notice. That letter claimed:
(a)the notice was invalid because it did not contain sufficient particulars;
(b)the notice was invalid because it did not contain substantial breaches, being predominantly minor defects;
(c)Mr Hendy had failed to allow reasonable access to the property to complete any outstanding works;
(d)Mr Hendy was in substantial breach of the contract pursuant to clause 26.3(b), having failed to pay an invoice in the amount of $99,000 for Practical Completion;
(e)Mr Hendy was in substantial breach of the contract by taking early possession;
(f)the invoice for the 3 August Variation for excavation had only been partially paid; and
(g)any attempt by Mr Hendy to terminate the contract would amount to a repudiation of the contract.
On 18 January 2024, Mr Hendy’s solicitors responded to Star’s solicitors’ letter with a further breach notice. They claimed:
(a)clause 26.1(b) of the contract only required a description of the breach and notice of the intention to terminate, and did not require detailed particulars;
(b)in any event, the completion period of 200 work days specified in the contract required completion by 8 March 2023, and that Star had not requested an extension of time;
(c)Mr Hendy denied that he had failed to allow reasonable access to the property, or that he had taken early possession, because Star had consented to and facilitated their occupation;
(d)Mr Hendy was not liable to pay the Practical Completion invoice because Practical Completion had not occurred, and that Mr Hendy was entitled to claim liquidated damages for Star’s failure to achieve Practical Completion; and
(e)the 3 August Variation was false and was not a valid variation under the contract because:
(i) it did not satisfy clause 21.10 of the contract, having not been issued within 5 days of Star becoming aware of the alleged further excavation;
(ii) the variation was raised after the end of the completion period and therefore could not comply with clause 21.10 of the contract in any event;
(iii) the variation was not signed by the parties as required by clauses 21.10 and 21.2 of the contract and also failed to satisfy the definition of a variation contract within clause 21.3(c);
(iv) therefore, the variation was not effective to extend the date of Practical Completion
(v) in the premises, the raising of the variation constituted “conduct intended to mislead and deceive” Mr Hendy; and
(vi) therefore, the amount of $119,000 paid by Mr Hendy towards the variation should be refunded to him.
On 22 January 2024, Mr Hendy’s solicitors issued the Termination Notice to Star’s solicitors. On 25 January 2024, Star’s solicitors responded to the Termination Notice and its accompanying letter stating, inter alia:
Your clients had no legal entitlement to terminate the Contract and … your clients’ unlawful termination amounts to a repudiation of the Contract.
…
Our client elects to accept your clients’ repudiation of the Contract and hereby gives notice that the Contract is terminated effective immediately.
On 30 January 2024, Mr Hendy’s solicitors responded to Star’s solicitors’ letter, repeating and relying upon previous claims and taking issue with the details of matters traversed in Star’s solicitors’ correspondence.
On 6 February 2024, Mr Hendy lodged the Non-Completion Claim the subject of the Original Decision and the Decision.
The Original Decision
The Commission’s Original Decision made the following findings:
(a)The terms of cover under the Queensland Home Warranty Scheme[1]provides cover to consumers for non-completion of building work where, inter alia, a fixed price residential contract has been ‘validly terminated on the default of the licensed contractor’.[2]
[1]Queensland Building and Construction Commission Regulation 2018 (Qld), Schedule 6.
[2]Ibid, Schedule 6, section 4.
(b)If a contract has not been terminated validly, it will not be considered to be ‘at an end’ for the purpose of allowing a claim.
(c)Clause 26.1 of the contract provides that if a party is in substantial breach of the contract, the other party may issue a notice allowing them 10 business days to remedy the breach. The earliest date a termination notice could be issued for the breaches identified on 4 January 2024 was 19 January 2024. The earliest date a termination notice could be issued for the breaches identified on 18 January 2024 was 2 February 2024.
(d)The notice of termination pursuant to clause 26.1(c) of the contract issued on 22 January 2024 could only be valid if the breach identified on 4 January 2024 was substantial and had not been remedied within the 10 business days.
(e)Clause 26.4(c) of the contract provides that the contractor may be in substantial breach where it has ‘unreasonably failed to replace or remedy defective work or materials.’ The clause does not refer to incomplete work. If Star had not unreasonably failed to remedy the defects prior to 4 January 2024, it will not be considered to have breached this term when the notice was issued.
(f)Other than the broken pool pipe and the leaking garage, there was no evidence that any other item had been raised with Star prior to 4 January 2024.
(g)Star emailed Mr Hendy on 22 December 2023 to advise that it had inspected the pool leak and confirmed that the ‘return pool outlet’ had been crushed. It also advised that it had arranged for the garage walls to be waterproofed ‘between Christmas and New Year’. On 24 December 2023, Mr Hendy emailed Star instructing that the engagement of the waterproofing contractor be put on hold until the pool pipe had been fixed. The parties were in disagreement about the cause of and responsibility for the broken pipe. In particular, the parties’ evidence conflicted as to the additional works carried out by Mr Hendy after he took possession of the property. On 28 December 2023, Mr Hendy hired a concrete saw to rectify the pipe.
(h)Accordingly, the Commission could not be satisfied that Star was in substantial breach for failing to rectify the pool pipe. Given the conflicting evidence and the fact that pipe had since been rectified, it could not determine the cause of the broken pipe.
(i)Star did not unreasonably fail to rectify the waterproofing to the garage wall before the issue of the breach notice. Mr Hendy did not inform Star that he had rectified the pool pipe some four days prior to the first Notice of Default.
(j)The Commission was not satisfied that Star was in substantial breach at the time the 4 January 2024 notice was issued, because:
(i) Star was not in breach in respect of the broken pool pipe because it had already been rectified;
(ii) Star did not unreasonably fail to remedy the waterproofing in the garage; and
(iii) Star did not unreasonably fail to remedy the remaining defective and/or incomplete items, having not been informed of them prior to 4 January 2024.
(k)The Commission considered whether the termination would otherwise have been valid, had Star been in substantial breach on 4 January 2024. It listed the following as relevant:
(i) On 4 January 2024, Star responded by email to Mr Hendy’s Notice of Default. It asked Mr Hendy and his family to exit the house and to inform Star once this had been done so that the list of incomplete and defective items could be attended to. There was no evidence that Mr Hendy responded to this.
(ii) On 11 January 2024, Star requested site access between 15 and 19 January 2024 to attend to the listed items and sought a response by close of business that day so that trades could be organised. On 15 January 2024, Mr Hendy responded to Star, allowing site access and offered ‘a couple of extra days’ for the items to be completed.
(iii) On 15 January 2024, Star advised Mr Hendy that, owing to his late response, trades would need to be rescheduled to later in the week. On 16 January 2024, Mr Hendy replied, suggesting that Star should prioritise the repairs. The Commission noted that Mr Hendy did not expressly agree to the new proposed dates.
(iv) Mr Hendy told the Commission that he had permitted full site access and that only some carpentry work had been completed. The Commission noted that Star had engaged a plumber to attend the site on or after 22 January 2024. After the contract was terminated, Mr Hendy asked the plumber not to attend, indicating to the Commission that, before the termination, Mr Hendy had been aware that the plumber had been engaged.
(v) Star told the Commission that Mr Hendy had given only limited access to the site for completion of the list of items, with the result that only some carpentry and electrical work (exhaust fans and range hood) were completed.
(vi) Mr Hendy and Star disagreed about whether Mr Hendy was allowed to take possession in November 2023. There was no evidence as to what was agreed at the time, but the Commission noted that Star did not object until later.
(l)The Commission could not be satisfied that Star was reasonably allowed access to the site to remedy the breaches alleged in the 4 January 2024 Notice of Default. Accordingly, Star could not have been in substantial breach as it had not ‘unreasonably failed to replace or remedy defective work or materials’. Star had sought to remedy the works on several occasions by Mr Hendy had interfered in circumstances where he and his family were residing in the property despite the works being incomplete.
(m)Accordingly, Star was not in substantial breach of the contract as claimed in the 4 January 2024 Notice of Default and Mr Hendy was unable validly to terminate the contract relying upon that Notice of Default.
(n)Under clause 26 of the contract, the termination notice of 22 January 2024 was issued too early for Mr Hendy to rely upon the 18 January 2024 Notice of Default. However, at common law, where a party elects to terminate a contract in reliance on a specific legal right, the terminating party may later also justify the termination on any ground available at the time of electing to terminate. The contract does not purport to contain an exhaustive termination regime and, therefore, it was necessary to consider whether a common law ground of termination existed in respect of the claims in the 18 January 2024 Notice of Default.
(o)The 18 January 2024 Notice of Default alleged that Star failed to perform the works within the time specified in the contract schedule and that it had issued a false variation on 3 August 2023.
(p)Clause 21.2 of the contract provides that a variation may be a Form 5 or similar document, which describes the variation including, inter alia, the date of the request and delay arising from the work. Clauses 23.1(a) and (b) provide that a variation may be a valid reason for an extension of time and that a Form 2 or similar be issued to the consumer for signature.
(q)The 3 August Variation stated that the additional cost for the removal, excavation and other works amounted to $168,159.30 and would incur a 7 to 9 month delay. The document was not signed by Mr Hendy and, accordingly, did not meet the contractual requirements for a variation or extension of time request.
(r)On 21 September 2023, Mr Hendy paid $119,000 towards the 3 August Variation. The variation and the delay were accepted by Mr Hendy by performance (payment). In circumstances where there was agreement and payment, it could not be construed as a breach as at 18 January 2024. Accordingly, Mr Hendy’s acceptance of the 3 August Variation meant that the date for Practical Completion was extended by 7 to 9 months, to between 8 October and 8 December 2023. On that basis, Star was not in substantial breach of the contract for failing to complete the work within the time stipulated in the contract, nor was Star in substantial breach for issuing a false variation.
(s)Therefore, Mr Hendy was not entitled to terminate and, because the contract had not been validly terminated in accordance with the terms of cover, the claim under the warranty scheme was declined.
The Decision
On Mr Hendy’s application to the Commission for internal review, the Commission issued the Decision, dated 20 August 2024.
The Commission, in the Decision, accepted Mr Hendy’s submission that the termination notice relied upon Star’s failure to progress each of the listed incomplete items within the time required by the contract, and that the list of defective items was not relied upon as a ground for termination.
The Commission accepted that it was “likely that some of the elements of the Incomplete Works Items” were within the scope of the contract. It was therefore necessary to determine:
(a)whether Star was in delay of reaching Practical Completion; and
(b)if so, whether the delay was a substantial breach.
For the question of delay, the Commission considered that the starting date of the contract, by reference to Schedule 5 of the contract, should be taken to be 5 October 2022, being 10 business days after the issue of approved plans by the Assessing Certifier (on 20 September 2022). The date for Practical Completion, being 200 working days thereafter and not allowing for delays, would be 19 July 2023.
As to the 3 August Variation:
(a)clause 23.1 of the contract provides that contractor may be entitled to a reasonable extension to the date of Practical Completion if, among other things, the owner approves the extension claim in writing. Because this was not done, Star was not entitled to extend the date of Practical Completion, which therefore remained at 19 July 2023; and
(b)Star was in delay in achieving Practical Completion at the time the Breach Notice was issued on 4 January 2024.
The delay, however, was not a substantial breach of the contract because:
(a)the contract was entered at an early stage when the design had not yet been finalised and which was later amended by Mr Hendy and a revised budget was agreed;
(b)albeit that Mr Hendy did not respond, Star requested a 7 to 9 month extension in the 3 August Variation;
(c)Mr Hendy paid the variation, although for a reduced amount. Despite his claim that this was a false variation, he did not provide any evidence in support of that claim. His conduct in communicating with Star about the variation and paying $119,000 was contrary to his allegations that the variation did not accurately reflect the work to be performed and that no additional work was required.
(d)prior to the issue of the Breach Notice, there was no evidence that Mr Hendy was dissatisfied with the work completed by Star and, given that Mr Hendy had taken possession of the property, the incomplete works did not appear to be significant; and
(e)despite the delay, Mr Hendy willingly continued with the contract after the date for Practical Completion had elapsed. By communicating the variation and the scope of work to be completed after the date of Practical Completion, Mr Hendy had accepted Star’s breach of the contract.
Therefore, at the time of the issue of the Breach Notice, Star was not in substantial breach of the contract and Mr Hendy had not validly terminated the contract pursuant to its terms.
The Commission was therefore satisfied that the claim for non-completion under the Statutory Insurance Scheme should be disallowed.
Mr Hendy’s submissions
Mr Hendy submitted that he validly terminated the contract and is entitled to assistance under the Insurance Scheme. In summary, he submitted:
(a)The Breach Notice of 4 January 2024 sufficiently particularised the incomplete work items, although it did not expressly refer to clause 26.4(d).
(b)The incomplete work items were within the scope of the contract, as evidenced by the building plans, Star’s budgets of 30 May 2022 and June 2022, and the engineering plans. The contract was for a fixed price and did not entitle Star to depart from scope, timelines, or quality obligations based on Star’s perceptions of Mr Hendy’s capacity to pay. There were no formal variation requests, change orders, or scope amendments issued by Star that would justify Star’s claim that the incomplete work items were “over-specification”.
(c)Practical Completion was not achieved under the contract.
(d)By unreasonably delaying the works, Star substantially breached clause 26.4(d) of the contract.
(e)As Star did not claim any extension of time and Mr Hendy did not agree to any extension of time, the works remained substantially delayed at the time of termination.
(f)The contract did not require that prior notice be given to Star for delayed works or works not diligently performed prior to the issue of a breach notice.
(g)Mr Hendy took possession of the property on 10 December 2023, to which Star consented.
(h)Star substantially breached the contract by failing to provide materials that complied with the contract specifications.
(i)Star substantially breached the contract by unreasonably failing to replace or rectify defective work or materials[3].
(j)Star substantially breached the contract by prematurely issuing the tax invoice for the ‘enclosed stage’ of the works.
(k)While Mr Hendy does not need to rely on common law termination, Star’s delay in completing the incomplete work items provided a valid basis to terminate the contract at common law.
[3]Mr Hendy disclaimed this submission in his application for Internal Review, but pressed it in this application.
Star’s submissions
Star’s submissions, in summary, were:
(a)The Breach Notice was invalid, because:
(i) it did not contain sufficient particulars of the alleged substantial breach;
(ii) it did not allege substantial breaches, the alleged defective items being predominantly minor; and
(iii) Star was not in substantial breach of the contract, having demonstrated it was willing to diligently perform the works.
(b)While the final minor 5% of the works were not completed, Mr Hendy played a significant role in halting the progress of the works.
(c)The majority of the listed incomplete work items were outside the scope of the contract. The driveway, retaining wall core filling, wine racks, air conditioning of the wine cellar, and wall linings for the basement were not included in the contract. Star was aware that the budget for the works would be very tight and would not cover the designer features, lighting and bulkheads Mr Hendy was requesting during the build, which led to a misalignment of his expectations. The initial agreement was that they would work together to manage Mr Hendy’s budget and get the most out of it for him, and they had several meetings to do this. In their last correspondence, Mr Hendy was aware that he had no remaining funds to work with and “insinuated” that he would not be able to pay Star’s fee of $60,000 plus GST and requested that Star liquidate its business so that he could claim the insurance to cover items that were not included in the contract.
(d)Mr Hendy was in substantial breach of the contracts by:
(i) not paying the invoice in the amount of $99,000 for Practical Completion; and
(ii) taking early possession of the property despite Practical Completion not having been achieved and the house not having been certified. Star did not give Mr Hendy permission to take possession of the property.
(e)Star was willing to complete the items listed in the Breach Notice, despite there being items out of scope, but Mr Hendy delayed in responding to emails about access, and restricted access to the property.
(f)the pool leak was caused by Hendy and his concreter backfilling around the pool return pipes. Star informed Mr Hendy that it had arranged for a waterproofing contractor to attend the site and seal the basement wall, but Mr Hendy asked that Star not book the contractor.
(g)Mr Hendy filled the pool despite Star’s request that he not do so.
(h)Mr Hendy was satisfied with the works completed by Star until the occurrence of the pool leak.
(i)Mr Hendy was not entitled to rely on Star’s substantial breach in prematurely issuing the invoice for the enclosed stage of the works because he had not relied upon this ground for termination.
(j)Mr Hendy’s purported termination was invalid and was a repudiation of the contract. Star accepted Mr Hendy’s repudiation and terminated the contract.
The Commission’s submissions
The Commission submitted that the primary issue for determination is whether Mr Hendy validly terminated the contract within the meaning of section 4(1)(a) of Schedule 6 to the Regulation, i.e., on the default of the contractor.
It was submitted that, pursuant to clause 26.1 of the contract, which provides for termination by written notice, it is necessary to Mr Hendy to satisfy the Tribunal that:
(a)the Breach Notice was validly issued;
(b)Star was in substantial breach of the contract at the time the Breach Notice was issued; and
(c)Mr Hendy did not substantially breach the contract himself.
Although the contract sets out a termination regime, Mr Hendy could otherwise justify the termination if Star had repudiated the contract.
Did Mr Hendy validly terminate the contract pursuant to the terms of the contract?
(1) Was the Breach Notice valid?
The relevant Breach Notice is the one dated 4 January 2024, which attached a list incomplete and defective items and stated, relevantly:
We write to you pursuant to clause 26 of the Contract to notify you that You are in breach of the Contract and pursuant to clause 26(b) of the Contract, hereby give you notice that You are in breach for the reasons and examples set out in the annexed internal and external defects list.
It is our intention to terminate the Contract if the breaches above and are not remedied within 10 business days of this Notice.
For the Breach Notice to be valid, clause 26.1 requires it to identify and describe Star’s substantial breach, and state Mr Hendy’s intention to terminate the contract if the breach is not remedied within 10 business days of the Breach Notice.
It was submitted that the Breach Notice did not:
(a)identify the alleged substantial breach and reference the provisions of the contract Star was alleged to have breached; and
(b)specify what Star should do to remedy any alleged breach.
The Commission submitted that express notice requirements must be followed in all respects as to contents and timing, such that a recipient must “be left in no reasonable doubt as to its meaning”.[4] A notice must direct the recipient’s mind to what is said to be amiss and detail the default relied upon to ensure that the recipient is adequately informed about the allegations being made against it.[5]
[4]Harper Properties Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 56, [95].
[5]Ibid, citing Hounslow LBC v Twickenham Garden Developments Ltd [1971] 1 Ch 233, 265 and Re White Industries (Qld) Pty Ltd [1990] QSC 10.
The Commission directed the Tribunal’s attention to:
(a)Yendex Pty Ltd v Prince Constructions Pty Ltd[6], in which a breach notice stating that breaches were “exampled” by some specific matters, and a further claim of failure to provide materials was not accompanied by specifics, was held to be ineffective;
(b)Murphy Corporation Limited v Acumen Design and Development (Queensland) Pty Limited and Anor[7], in which a breach notice that failed to inform the recipient of what it had to do to remedy the breach was held to be invalid;
(c)Miller v Queensland Building and Construction Commission[8], in which the Tribunal, citing both of the cases above, held that a breach notice which did not adequately describe the alleged breach and did not sufficiently specify what the recipient must do was invalid;
(d)Qline Interiors Pty Ltd v Jezer Construction Group Pty Ltd[9], where Muir J held that:
[A notice] should be recognisable as a notice which clearly identifies a default under the terms of the subcontract and which states what must be done to remedy that default. The object of such a provision is to acquaint a party with the existence of an alleged event of default and to afford that party the opportunity of remedying default by complying with the stipulations in the notice. It might also be thought that a purpose of the notice is give the defaulting party warning of the existence of a state of affairs which might lead to termination of the contract if the default is not remedied. Consequently, it would be inappropriate to infer the giving of due notice in the absence of a document or documents which plainly and unambiguously fulfilled the requirements of [the] clause …
(e)Kim v Queensland Building and Construction Commission and Anor[10], where breach notices were held to be invalid because they were imprecise and ambiguous because they did not explicitly state the applicant’s intention to terminate the contract, nor did they provide 10 days’ notice to rectify the alleged breaches.
[6][1988] QSCFC 62.
[7](1995) BCL 274.
[8][2022] QCAT 151.
[9][2002] QSC 88, [28].
[10][2025] QCAT 217, [56] to [60].
The Commission submitted that the Breach Notice was not clear as to what the substantial breach was said to be, further illustrated by:
(a)the Original Decision proceeding on the basis that that substantial breach alleged was Star’s unreasonable failure to replace or remedy defective work or materials;
(b)Mr Hendy’s claim in the Internal Review application that the substantial breach was Star unreasonably failing to perform the work diligently, or unreasonably delaying the work;
(c)in the Tribunal application filed on 5 September 2024, Mr Hendy alleged the substantial breaches to be:
(i) Failing to provide materials that complied with the contract specifications;
(ii) Unreasonably failing to replace or rectify defective work or materials;
(iii) Unreasonably failing to perform the work diligently, or unreasonably delaying, suspending, or failing to maintain reasonable progress;
(d)in his submissions filed in the Tribunal on 6 May 2025, Mr Hendy alleged that Star had substantially breached the contract by:
(i) claiming progress payments prematurely; and
(ii) not achieving Practical Completion.
The Commission submitted that Star’s response of 16 January 2024 to the Breach Notice did not serve to validate the notice and that, in fact, the letter maintained that the Breach Notice was invalid.
Accordingly, it was submitted, the Breach Notice was not validly issued, and the purported termination was not valid under the terms of the contract.
Notwithstanding that submission, the Commission sought to address the additional questions it had identified.
(2) Was Star in substantial breach of the contract at the time of the Breach Notice?
The Commission submitted that Mr Hendy had alleged a range of substantial breaches, aggregating those referred to in paragraph 37 above.
As to an unreasonable failure to replace or rectify defective work or materials, the Commission relied on the findings in the Original Decision (see subparagraphs 18(j) to (l) above) that it was not satisfied that Star was in substantial breach in respect of these claims.
Further, applying the findings summarised in subparagraph 18(k) above, Mr Hendy was not entitled to terminate the contract on this ground because his own behaviour was a significant reason for the alleged defects not being rectified.
As to unreasonably failing to perform the work diligently, or unnecessarily delaying, suspending, or failing to maintain reasonable progress, the Commission submitted on the question of delay:
(a)the starting date of the contract was 5 October 2022 for the reason stated in paragraph 22 above;
(b)the date for Practical Completion was 19 July 2023, being 200 working days after the starting date, as provided in Schedule Item 6 of the contract;
(c)the extension of 7 to 9 months sought by Star in the 3 August Variation was reasonable in the circumstances. While there was contention between Mr Hendy and Star as to the circumstances surrounding the issuing of the 3 August Variation and as to subsequent events, there was consistency in the variation document and the invoice approved by Mr Hendy as to the substantial additional out-of-scope works to which the documents related; and
(d)however, because the extension claim was not approved in writing, the date for Practical Completion remained 19 July 2023 and, at the time of the Breach Notice, Star was in delay of completing the works;
As to whether the delay was unreasonable, the Commission submitted:
(a)The contract was entered at an early stage when the design had not yet been finalised. The plan was not approved until 20 September 2022; similarly, the engineering plan was not issued until 22 July 2022, and the pool engineering plan and structural drawing for the property were not issued until 28 June 2022. Therefore the Construction Days stipulated in the contract of 21 March 2022 could not have been accurate. The contract itself was described by Star as a “preliminary contract for loan purposes”.
(b)If the extension of time had been granted, the date for Practical Completion would have been at some time between 19 February and 19 April 2024. At the time of the Breach Notice, therefore, the date for Practical Completion would not have been reached.
(c)It seems that the property was substantially completed by 10 December 2023 because Mr Hendy took possession of it from that date.
(d)There was no evidence that Mr Hendy was concerned with the progress of the work before the Breach Notice (and it is not clear from the Breach Notice that he was). There were messages from Mr Hendy to the director of Star in November 2023 expressing great satisfaction with the progress of the works.
(e)While the contract did not require Mr Hendy to give prior notice to Star for delayed works, there is authority that prior notice is relevant in considering whether the contractor’s delay was unreasonable[11].
(f)After receiving the Breach Notice, Star proactively approached Mr Hendy to resolve the dispute, but Mr Hendy did not engage other than to provide the contact details of his solicitor.
(g)It was therefore submitted that, in these circumstances, Star was not unreasonably failing to perform the work diligently or unreasonably delaying, suspending, or failing to maintain reasonable progress.
[11]Mitchamy Developments Pty Ltd v Adams & Anor [2010] QCAT 484; Hopper & Anor v QBCC (No 2) [2019] QCAT 212; Schofield v QBCC & Anor [2019] QCAT 73; Kim v QBCC (supra, n 10).
As to failing to provide materials that comply with the contract specifications, Mr Hendy provided no evidence of the material Star failed to provide, or how failing to provide them constituted a substantial breach of the contract.
As to claiming progress payments prematurely, it was submitted that Mr Hendy did not rely on this ground in the Termination Notice and is therefore unable to rely upon it to terminate the contract under its terms. It is, however, relevant to whether the termination could be justified at common law and is the subject of further submissions below.
As to Practical Completion not being achieved, it was submitted that the same considerations apply as for the claim that Star unreasonably failed to perform the work diligently, or unnecessarily delayed, suspended, or failed to maintain reasonable progress. It was further submitted that Mr Hendy willingly continued the contract with Star after the date for Practical Completion had passed and had thereby elected to continue with the contract and waive the breach. This, it was submitted, was evidenced by the correspondence between Mr Hendy and Star after the date for Practical Completion has passed, in which Mr Hendy had expressed his satisfaction with the works.
(3) Did Mr Hendy substantially breach the contract himself?
The Commission noted Star’s allegations that Mr Hendy had breached the contract by:
(a)not paying the tax invoice in the amount of $99,000 for Practical Completion, despite Mr Hendy having approved it;
(b)taking possession of the property despite Practical Completion not having been reached and the house not being certified;
(c)restricting Star’s access to the property;
(d)Mr Hendy’s backfilling work caused the pool leak; and
(e)filling the pool despite Star’s request that he not do so.
Mr Hendy responded to these allegations:
(a)Because Practical Completion has not been achieved and no payment was due, any amount claimed by Star would be set off against liquidated damages payable by Star;
(b)Mr Hendy’s occupation of the house was approved by Star and his occupation did not hinder or interfere with Star’s ability to attend to the incomplete works;
(c)Any claimed restriction of access to the site was meaningless because minimal site access was sought;
(d)The pool leak was caused by the use of improper glue, not backfilling; and
(e)The pool was filled by the “contractor” on about 13 December, which was the day the internal lining was completed.
The Commission submitted that Mr Hendy was likely in substantial breach of the contract at the time of the termination and provided detailed reasons for that conclusion. For the reasons given below it is unnecessary for the Tribunal to traverse those reasons.
Did Mr Hendy validly terminate the contract under common law?
The Commission submitted that, although the contract set out a termination regime, Mr Hendy could justify the termination at common law if Star had repudiated the contract at the time of the termination.
Termination of a contract at common law does not require that the grounds relied upon at the time of termination were valid, providing that a valid ground does exist.[12] Mr Hendy, in his submissions for internal review, relied upon common law termination as an alternative basis for assistance, citing ‘gross delays’ in completion. For completeness, the Commission submitted that Hendy’s aggregated grounds (see paragraph 37 above) should all be considered to assess whether they, or any of them, could be characterised as a repudiation of the contract by Star.
[12]Freedom Homes Pty Ltd v Botros & Anor [2000] 2 Qd R 377, [8], citing Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359, 377-378.
The Commission submitted that, of the grounds claimed by Mr Hendy – with the exception of that of claiming progress payments prematurely – the evidence did not suggest that Star had evinced an intention to no longer be bound by the contract or to fulfil it only in a manner substantially inconsistent with the parties’ obligations. Rather, Star:
(a)Constantly updated Mr Hendy with detailed spreadsheets of the budget;
(b)Issued a notice of extension of time;
(c)Had substantially completed the works by the time the Breach Notice was issued;
(d)Actively responded to the Breach Notice and purported to rectify the listed items;
(e)Proactively approached Mr Hendy to resolve the issues in dispute and complete the works, even after the Original Decision had been made.
As to the allegation that Star had claimed progress payments prematurely, namely the invoice of 23 May 2023 for ‘Enclosed Stage’, the Commission submitted that, in circumstances where:
(a)Mr Hendy had accepted the invoice for the enclosed stage and paid it; and
(b)at the time the Termination Notice was issued, the enclosed stage had been completed;
Mr Hendy’s actions showed an unequivocal intention to elect to continue the contract whether or not the progress claim had in fact been issued prematurely. Therefore, it was submitted, Mr Hendy was not entitled to rely upon this ground to justify the termination.
Accordingly, it was submitted, Star did not repudiate the contract and Mr Hendy’s termination could not be justified at common law.
For the reasons above, it was submitted, Mr Hendy had not validly terminated the contract under the terms of the contract or at common law.
Discussion
In these proceedings, the Tribunal exercises the functions of the Commission in accordance with the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’), the enabling Act under which the decision, being a reviewable decision, was made[13].
[13]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’), section 17.
Pursuant to Section 86(1)(h) of the QBCC Act, a decision to disallow a claim under the Scheme, wholly or in part, is a reviewable decision.
In exercising its review jurisdiction, the Tribunal must decide the review in accordance with the QCAT Act and the enabling Act (in this case the QBCC Act and subordinate legislation) under which the reviewable decision was made[14]. In doing so, it has all the functions of the decision-maker for the reviewable decision being reviewed[15]. It does not have any greater or lesser powers than that possessed by the original decision-maker at the time the relevant decision was made.
[14]QCAT Act, section 19(a).
[15]QCAT Act, section 19(c).
Mr Hendy has claimed assistance under the statutory insurance scheme provided for by Schedule 6 to the Queensland Building and Construction Commission Regulation 2018 (Qld). Sections 6 and 7 of Schedule 6 provide that a consumer is entitled to claim assistance for the reasonable cost of completing residential construction work, provided that:
(a)the work is carried out under a fixed price contract; and
(b)the contract ends within two years after the day work starts under the contract; and
(c)the work is incomplete.
There is no contention that the contract in this matter is a fixed price contract as defined in section 3 of Schedule 6. There is also no contention that the works under the contract are incomplete.
Subsection 4(1)(a) of Schedule 6 provides that a fixed price residential contract ends if the contract is validly terminated on the default of the licensed contractor. All the parties accept that a consumer may validly terminate the contract pursuant to the terms of the contract, or under common law in reliance on the contractor’s repudiation of the contract.
It is also common ground that Mr Hendy terminated the contract. What is in dispute is whether the termination was valid.
Termination pursuant to the terms of the contract
(1) The Breach Notices
The operative provisions are in clause 26 of the contract (‘Termination after notice of default’). Specifically:
26.1 If:
(a) a party is in substantial breach of this Contract; and
(b)the other party gives a notice to the party in breach identifying and describing the breach and stating the intention of the party giving notice to terminate the Contract if the breach is not remedied within 10 Business Days from the giving of the notice; and
(c)the breach is not so remedied, then the party giving that notice may terminate this Contract by a further written notice given to the party in breach and may recover from the party in breach all damages, loss, cost or expense occasioned to the party so terminating by or in connection with the breach or that termination and may set off such claim against payment or otherwise due by the party so terminating.
26.2The right to terminate under this Condition is in addition to any other powers, rights or remedies the terminating party may have.
26.4Substantial breach by the Contractor includes but is not limited to:
(a)failing to comply with any necessary approvals associated with the work under this Contract;
(b)failing to provide materials which comply with this Contract;
(c)unreasonably failing to replace or remedy defective work or materials;
(d)unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress;
(e)failing to effect or maintain any insurance required by this Contract;
(f)failing to hold the current, active and appropriate licence required to perform the Works, including, without limitation, a licence required under the QBCC Act; and
(g)the Contractor failing to pay a judgement debt.
[Bold in original]
It was purportedly pursuant to this clause that Mr Hendy issued the Breach Notice of 4 January 2024. It read:
Re: Notice of Default
I refer to attached QBCC New Home Construction Contract (Contract) between Star Building Services Pty Ltd ABN 21 619 425 517 with QBCC Licence Number 1279589 (You) and Nigel and Donna Hendy.
We write to you pursuant to clause 26 of the Contract to notify you that You are in breach of the contract and pursuant to clause 26(b) of the Contract, hereby give you notice that You are in breach for the reasons and examples set out in the annexed internal and external defects lists.
It is our intention to terminate the Contract if the breaches above are not remedied within 10 business days of this notice.
[Bold in original]
The list attached to the letter comprised 27 internal issues and 19 external issues, briefly described, with photographs. Most of the items listed are minor defects (e.g., “bath filler tap loose”, “missing power point cover”, “shower drain cover missing”, “seal missing from under window”, “tiled edge not finished”, “bolts not covered”), some apparently more serious (those matters related to the ingress of water into the garage and storage area), and a small number relating to incomplete work (driveway, wine cellar, retainer blockwork, backfill).
(2) Legal requirements for termination under a contractual clause
Hudson’s Building and Engineering Contracts,[16] referring to contractual determination clauses, states:
Express notice requirements are often in “two-tier’ form, without a requirement of continuation of the breach for a specified period of time after a “first” notice or instruction before a “second” definitive notice of actual determination can be given. In every case the clause must be carefully considered and closely followed in all respects, both as to the contents and timing of the notices, but the courts will usually regard the notices as commercial documents, and the modern approach is to interpret notice clauses with regard to their commercial purpose [Mannai Investments Co v Eagle Star Assurance [1997] AC 749]. Provided a reasonable recipient of the notice can be left in no reasonable doubt as to its meaning, the form of words used will usually not be important. The contents of the notice will then have to be matched against the relevant requirements in order to determine whether it meets them [see Trafford MBS v Total Fitness (UK) Ltd [2002] QWCA Civ 1513 at [49]]. Applying this principle, notices referring the reader to the applicable clause of the contract and identifying the default are likely to be sufficient [Re Stewardson Stubbs & Collett Ltd [1965] NSWR 1671].
[16]Hudson’s Building and Engineering Contracts (14th ed), 8-047.
As to the contents of the notice:
[A]ny required preliminary notice should sufficiently identify the particular ground relied upon, if that is called for by the contract (and particularly where continuation of the default is made a condition for the second notice), but further detail, particularly in regard to a generalised ground like lack of due diligence, will not usually be called for … [A] notice specifying defective work and not referring to slow progress would not normally entitle [an owner] to rely on slow progress to justify the determination.[17]
[17]Ibid, 8-048. See also Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99.
In Re White Industries (Qld) Pty Ltd[18] a notice of intention to terminate was given pursuant to a provision similar to clause 26.1 of the contract in this matter. On the question of whether the notice provided insufficient detail of the breaches, Byrne J held (at page 4 of the report):
Plainly the requirement imposed by [the clause] that notice should not only “specify” but also “detail the default relied on” was intended to ensure that the builder was adequately informed of the allegations of breach of contract made by the proprietor. It is only if the notice descends to such particularity that the builder could avail himself of the opportunity [the clause] provides to remedy the default “in terms consistent with this Agreement” and avoid the proprietor’s determining the contract, with all the serious consequences that step involves.
(3) Were the Notices valid?
[18]Supra, n 5.
The Breach Notice and its attached list did not identify and describe which of the items was said to amount to a substantial breach (as required by subclauses 26.1(a) and (b) of the contract), or into which class in subclause 26.4 they were said to fall. If they were said to fall into subclauses 26.4(c) and/or (d), there was no description of why the alleged failures were, inter alia, unreasonable.
I have considered whether, nevertheless, the Notice was “recognisable as a notice which clearly identifies a default under the terms of the subcontract and which states what must be done to remedy that default.”[19] As the Commission submitted, citing Yendex Pty Ltd v Prince Constructions Pty Ltd,[20] simply to provide a list of examples, some of which may amount to substantial breaches and many of which, on their face, do not, is insufficient.
[19]Qline Interiors Pty Ltd v Jezer Construction Group Pty Ltd, supra, n 9.
[20]See paragraph 36(a) above.
Mr Hendy submitted that the Breach Notice was referring, among other things, to Star’s unreasonable failure to maintain reasonable progress and therefore was referring to clause 26.4(d) of the contract. In circumstances where there is no explicit reference in the Notice to such a breach and where Mr Hendy has not provided evidence of any complaint prior to 4 January 2024 as to progress, it is difficult to see how this complaint can be divined from the contents of the Notice. Mr Hendy’s claim in this respect can be distinguished from the facts of, for example, Hopper & Anor v QBCC (No 2)[21], where there was a substantial history of complaints as to progress, including a reference of the question to the Commission’s early dispute resolution process. While there is no obligation under the contract for prior notice of a failure to maintain reasonable progress, where the Notice itself does not explicitly make the claim, the existence of prior notice may make the purported claim intelligible. I do not accept that such a claim was intelligibly made in Mr Hendy’s Breach Notice.
[21]Supra, n 11.
Mr Hendy’s complaints as to Practical Completion not having been achieved and progress claims being made prematurely are not mentioned in the Breach Notice (and nor is there a request to remedy them[22]) and there is no basis upon which to imply them into the terms of the Notice.
[22]See Murphy Corporation Limited v Acumen Design and Development (Queensland) Pty Limited and Anor, supra, n 7.
In all the circumstances, I am satisfied that the Breach Notice of 4 January 2024 was not issued in accordance with the requirements of the contract and was invalid.
The breach notice of 18 January 2024 could not found the Termination Notice in accordance with clause 26 because the Termination Notice was issued only 6 days later.
Accordingly, I am satisfied that, the Breach Notice being invalid, the Termination Notice was not validly issued under the terms of the contract. It follows that Mr Hendy’s purported termination of the contract pursuant to clause 26 was not valid.
Termination at common law
Clause 26.2 of the contract provides that:
The right to terminate under this Condition is in addition to any other powers, rights or remedies the terminating party may have.
Accordingly, Mr Hendy is not confined by the terms of the contract to its termination regime[23], and it is necessary to consider whether the contract was validly terminated at common law.
[23]MacDonald v Queensland Building and Construction Commission [2014] QCAT 158
Hudson’s Building and Engineering Contracts describes the nature and effect of termination of building contracts at common law as follows:
An innocent party will become entitled to bring the contract to an end at common law when either the other party has breached a term of the contract which is sufficiently serious to justify termination or where a party has acted in such a manner as to show that it no longer intends to be bound by the terms of the contract. The effect of such a common law termination is to release both parties from further performance and to entitle the innocent party to damages for breach of contract (including those resulting from the loss or abandonment of the contract itself), although certain alternative or supplementary remedies may also be available … While a common law determination will provide a high degree of freedom and flexibility of remedy to the determining party, therefore, that party must assume the burden of establishing that the breach of contract was, either intrinsically or on the particular facts, sufficiently fundamental to justify the termination in law.[24]
[24]Hudson’s Building and Engineering Contracts, op cit, 8-002 [citations omitted].
The innocent party must act upon a repudiatory breach in clear terms:
There will be no successful repudiation, whatever the nature or extent of the guilty party’s breach, unless there has been a clear and unequivocal acceptance of the breach by word or action on the part of the innocent party. It is open to the innocent party to affirm the contract in which case it will be taken to have elected to waive the breach. The innocent party will only be taken to have waived the breach if it does so in clear and unequivocal terms [Motor Oil (Hellas) Corinth Refineries SA v Shipping Corp of India [1990] 1 Lloyd’s Rep 391]. A party may reserve its position but if it does nothing for too long then it will be taken to have affirmed the contract [Stoznia Gdanska SA v Latvian Shipping Co (No 2) [2002] EWCA Civ 889 at [87]] … [I]n the case of a sustained failure to proceed with due diligence, acceptance is possible after delay as long as the continuation or repetition of the breach is repudiatory in character … [A} party will not be entitled to treat a contract as repudiated in a doubtful situation if a manifest intention not to be bound has not been sufficiently indicated by the guilty party. Disputes over defective work, with work suspended on one side or a refusal of possession on the other, are extremely common and deciding which party’s conduct amounts to a repudiation may not be easy on the facts … What will be required will be conduct evincing an intention no longer to be bound by the contract on one side, coupled with a clear acceptance of that conduct as a repudiation by the opposing party [see Trimis v Mina [2000] BCL 288 (NSW Court of Appeal)].[25]
[25]Ibid, 8-010, 8-012.
Importantly, from Mr Hendy’s perspective, it is not necessary that the breach relied on for termination was valid, provided that another valid ground is shown to exist.[26] However, in order to find that Mr Hendy had validly brought the contract to an end, it is necessary for the Tribunal to be satisfied that Star had committed a repudiatory breach which Mr Hendy had accepted by giving notice of termination. In addition to the matters raised in the purported Breach Notice, Mr Hendy claimed unreasonable delay/failure to achieve Practical Completion and prematurely claiming progress payments, as described in more detail in the submissions above.
(1) Unreasonable delay/failure to achieve Practical Completion
[26]See n 12.
In Mitchamy Developments Pty Ltd v Adams & Anor,[27]it was held that failure to reach practical completion by the date for practical completion does not, in itself, amount to a substantial breach of contract. It is a question of degree as to whether the delay in completing works could be construed as a repudiation by Star.
[27]Supra, n 11.
While both the Queensland Building and Construction Commission Act[28] and the contract[29] provide warranties that the builder will carry out the works with reasonable diligence, there is no clause in the contract stipulating that time was of the essence. It is possible for time to become the essence of a contract after it has commenced by, for example, the giving of notice that the contract is to be performed within a reasonable time.[30] The essential quality of the time for performance may be deduced by repeated complaints about the builder’s delay and a demand for completion by specific date. A failure to perform in these circumstances may give rise to a right of the aggrieved party to terminate the contract.
[28]Queensland Building and Construction Commission Act 1991 (Qld), Schedule 1B, s 25
[29]Clause 3.1(a)
[30]Stickney v Keeble [1915] AC 386; Elderslie Property Investments No 2 Pty Ltd v Dunn [2008] QCA 158.
As indicated in the parties’ submissions, there was substantial disagreement on the question of the date of Practical Completion and the degree of delay to which the works were subject. Because the contract was entered into at a point well before a commencement date was settled, there was inherent uncertainty about the date of Practical Completion. The contract, signed by Star’s director, was sent to Mr Hendy under cover of an email dated 21 March 2022[31] with the subject line, “FW: house plans rough draft” and the text, “Please find attached preliminary contract for loan purposes.” The schedule to the contract was incomplete as to, inter alia:
(a)completion period (item 6), providing only for 200 working days but blank as to allowances for delays and non-working days, and blank as to the final completion period; and
(b)the date for Practical Completion, providing only for a completion period of “TBC” calendar days.
[31]Commission’s Statement of Reasons for the Decision (‘SOR’), vol 2, SOR-67, p 973.
The contract also provided for “NA” in liquidated damages per day for each calendar day of delay in achieving Practical Completion. Save for the addition of Mr and Mrs Hendy’s signatures, the contract was unchanged on execution.
There is therefore nothing in the contract that would suggest that time was of the essence. This impression is strengthened by the 3 August Variation, which proposed a significant delay of 7 to 9 months, and to which Mr Hendy did not respond.
There is no other evidence prior to the issue of the Breach Notice that indicated any dissatisfaction with the progress of the works. Rather. the material that is in evidence is strongly suggestive that, at 30 November 2023 (well beyond a putative Practical Completion date of 19 July 2023), Mr Hendy was highly satisfied with the progress of the works.
On all of the evidence, I am unable to be satisfied that time was of the essence of the contract, that Mr Hendy expressed dissatisfaction with progress prior to the issue of either of the breach notices, or that there was anything in Star’s conduct that provided a clear indication that it was not ready or willing to perform the contract. The Tribunal, therefore, finds that Star did not repudiate the contract by unreasonable delay and/or failing to achieve Practical Completion.
(2) Unreasonably failing to provide specified materials/remedy defective work
Grounds for termination of the contract or Star’s implied repudiation by reason of unreasonably failing to supply specified materials or to remedy defective work were not the subject of discrete claims by Mr Hendy for this application, rather being cited as evidence of failure to achieve practical completion. However, these claims formed the basis of the Breach Notice and were reiterated in the notice of 18 January 2024, and are therefore considered for completeness. The details of these claims are discussed elsewhere above.
The considerations applicable to assessing the degree of seriousness of claimed breaches to warrant termination or amount to repudiation are discussed by Allsop J (as his Honour then was) in Byrnes v Jokana Pty Ltd[32]. Those relevant to this application include:
(a)the uncertainty or not surrounding future compliance with the contract;
(b)the history of the standard of contractual compliance hitherto;
(c)the expressed or otherwise evident attitude of the party in breach of its obligations; and
(d)the ability of either party to cure the breach.
[32][2002] FCA 41, [80]
The Tribunal has found above that there was no history prior to the issue of the Breach Notice that suggests that Star was not complying with the contract or might not continue to do so. The material in evidence indicates that Star remained willing to deal with Mr Hendy’s complaints in response to the Breach Notice and – where items were not in dispute as to whether they were within scope – remained so even when the contract had been terminated. Further, Mr Hendy provided no evidence or particulars as to how any failure by Star in respect of this claim was unreasonable. In these circumstances, the Tribunal cannot find that any of the indicia warranting termination in respect of the claimed failure to provide specified materials or to remedy defective works have been met.
(3) Prematurely claiming progress payments
The evidence provided by Mr Hendy in respect of his claim that Star was in substantial breach of the contract by prematurely claiming progress payments is provided in his submission received in the Tribunal on 2 May 2025. He referred to an invoice dated 23 May 2023 for the ‘enclosed stage’ in the amount of $165,000, and provided a photograph 28 May 2023 which he said showed the enclosed stage was not completed at that date. He claimed that this was a substantial breach by reference to clause 26.4 and schedule item 8A of the contract. Unhelpfully, this claim is not particularised but it would seem that Mr Hendy is referring to the builder’s warranty in Schedule item 8A:
In presenting each progress claim … you are warranting that the work on the site has reached the relevant Stage … and that the total amount claimed to date (including the deposit) is proportionate to the progress of the contracted work at the Site.
It would therefore seem that the substantial breach of the contract said to have been committed by reason of the issue of the progress claim is of clause 26.4(d) (unreasonably failing to perform the work diligently, etc).
The relevant progress claim forms are not among the material provided by the parties to the Tribunal. However, the relevant contractual form for a progress claim (Form 3) contains the following:
Note to Owner: … If you dispute all or part of the Contractor’s progress claim, you must, within 5 Business Days of receiving the claim, give the Contractor a QBCC Form 4 – Notice of Dispute of Progress Claim or similar written notice stating that you dispute all or part of the progress claim and your reasons for doing so.
There is no evidence that Mr Hendy gave any notice by way of Form 4 to Star. In any event, the project spreadsheet provided by Star to Mr Hendy on 5 November 2023[33] indicate that the progress claim had been duly paid, as had that for the next stage. There is no evidence that the works failed to achieve the Enclosed Stage (the matter is not raised at all in his affidavit of 12 June 2024) and, to the extent that Mr Hendy alleges that the claim constituted a substantial breach or a repudiatory breach, I am satisfied that, if it ever did constitute such a breach, Mr Hendy had waived it[34] well before he sought to terminate the contract.
(4) Other matters
[33]SOR, vol 1, SOR-11, pp 88 to 96.
[34]See paragraph 80 above.
Over the course of this matter in the Commission and before the Tribunal, Mr Hendy has sought to raise the matter of the propriety of the 3 August Variation. At paragraphs 24 to 26 of his affidavit of 12 June 2024, Mr Hendy claimed that the Variation was “created” for the purposes of securing further funding from his lender, and that the contents of the variation were untrue. The material before the Tribunal includes a series of emails among Mr Hendy, Star and the lending agent with whom Mr Hendy was dealing[35]. The correspondence is suggestive of a degree of contrivance among all of the participants to create documents calculated to satisfy the principal lender that further financial accommodation was required. However, the Tribunal cannot be satisfied that Star leveraged this process to secure a non-agreed variation of time to Practical Completion as Mr Hendy claims. Given that the time for Practical Completion (on the various calculations) had already expired, it is at least equally possible that the Variation included the time estimate to forestall questions as to that matter from the lender.
[35]SOR, vol 1, SOR-9 to SOR-12, pp 81 to 97.
In any event, the 3 August Variation, which was originally quoted at $178,159 (including GST)[36] was subsequently invoiced at $119,000, exactly the amount of additional finance approved, and in accordance with discussions among Star, Mr Hendy, and the lending agent between 4 and 6 September 2023[37]. There is insufficient evidence to satisfy the Tribunal that there was any misleading and deceptive conduct on the part of Star against Mr Hendy, or that any repudiatory or otherwise substantial breach of the contract arose from this episode.
[36]SOR, vol 2. SOR-67, pp 1054 to 1055.
[37]SOR, vol 1, SOR 9 to SOR 10, pp 81 to 87.
I am satisfied that, insofar as Mr Hendy’s complaint about responsibility for the pool and associated water ingress is pressed, the matter had been remedied prior to termination of the contract.
Conclusion
In the result, I am satisfied that Mr Hendy did not validly terminate the contract, and that the Commission’s Decision should be confirmed.
Both Star and the Commission submitted that, in several respects, Mr Hendy was himself in substantial breach of the contract. Having found that Mr Hendy did not validly terminate the contract, I do not consider it necessary to decide that issue.
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