Jaam Project Services Pty Ltd v Ben Coote - [2022] QCAT 314

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

JAAM Project Services Pty Ltd v Ben Coote [2022] QCAT 314

PARTIES:

jaam project service pty ltd

(applicant)

v

ben coote

(respondent)

APPLICATION NO:

BDL088-20

MATTER TYPE:

Building matters

DELIVERED ON:

25 August 2022

HEARING DATE:

29 July 2022

HEARD AT:

Brisbane

DECISION OF:

Member McVeigh

ORDERS:

1.     The contract is varied by inserting the words JAAM Projects Quote for works including Scope of Works dated 19 November 2018 Quote No.1850 into Part C of the Appendix under the heading Specifications.

2.     The respondent must pay the applicant $40,327.80 being the Practical Completion stage payment adjusted for the provisional sum.

3.     The respondent must pay the applicant interest at the contract rate of 10% on $40,327.80 from 24 October 2019 until the date payment is made.

4.     The respondent must pay the applicant $6,441.68 for variations.

5.     The respondent must pay the applicant interest on variations at the statutory rate of 10% from the date of this decision until the date the payment is made.

6.     The respondent must pay the applicant $2,490.80 costs under clause 11 of the contract.

7.     The applicant must refund the respondent $10,995.

8.     The applicant must pay the respondent interest on $10,995 at the statutory rate of 10% from the date of this decision until the date the payment is made.

9.     The applicant is ordered to rectify the finish to the plasterboard linings in the stairwell which do not meet a reasonable standard within 28 days of receipt of payment of the amount referred to in order 2.

10.     The applicant is ordered to install vents to the outside from the range hood and exhaust fans where it is appropriate within 28 days of the date of receipt of payment of the amount referred to in order 2.

CATCHWORDS:

CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT GENERALLY – whether a contract should be varied to avoid injustice – whether builder was entitled to final progress payment – whether owner was entitled to setoff – whether claims are time barred

LIQUIDATED DAMAGES – whether time set at large – whether agreed rate for liquidated damages a penalty

Queensland Building and Construction Commission Act 1991 (Qld), s 77(3)(e)

Peak Construction (Liverpool) Ltd v McKinney Foundations Limited 1971 BLR 111

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Becker Watt Lawyers

REASONS FOR DECISION

Background

As is the case with many building matters that come before this tribunal, the relationship between JAAM Project Services Pty Ltd (builder or applicant) and Ben Coote (owner or respondent) started as a collaborative one, but sadly soured as construction work progressed.
The parties entered into a residential building contract in December 2018, but neither paid much attention to its terms until it became apparent that the house would not be finished on 3 July 2019, the contractual date for practical completion.
There were disputes about variation claims, claims for extensions of time, a claim for liquidated damages and defects.
Despite the fact that the owner had not paid the final progress claim, the builder gave the owner the keys and the owner moved in to the house on 14 August 2019. The final certificate was received by the owner on 17 October 2019.
Neither party had the advantage of legal representation until late 2019.
I heard this matter, by telephone due to COVID restrictions, on 29 July 2022. The only witnesses were Mr Stay, the governing mind of the builder and Mr Coote, the owner. It is challenging to form views as to credit when the hearing occurs on the phone. Each man appeared to genuinely believe that he gave accurate evidence, however, as is always the case, the evidence was coloured by his own perspective. In my view evidence supported by contemporaneous documents is more credible than statements made by each witness without such support.

Claim

The builder claims:
(a)the final staged payment for the works described as the Practical Completion stage as adjusted for the provisional sum, of $40,524.61;
(b)payment for variations:
(i)      variation 21 for $1,065.80 relating to the installation of stairs to the back of the bathroom on the upper level;
(ii)      variation 22 for $594 relating to running a water line to the back of the fridge;
(iii)     variation 23 for $1,263.40 relating to the supply of camlock fittings to the water tanks;
(iv)     variation 24 for $77 relating to running power to the bushfire shutter;
(v)      variation 26 for $1,738 to undertake the set-out survey;
(vi)     variation 29 for $721.60 relating to installation of stairs from the laundry to the carport;
(vii)   variation 30 for $1,061.50 for installation of a new window for compliance with the BCA; and
(viii)     variation 31 for $1,269.18 for the cost of a second inspection by the building certifier.
(c)delay costs at the contractual rate of $100 per calendar day for 72 days;
(d)interest calculated in accordance with the contract;
(e)legal costs in accordance with the contract;
(f)the filing fee of $345.80.
Some of the builder’s claims exclude GST.
In the alternative, the builder claims a quantum meruit. I have had no regard to that claim as there is no doubt that the contract remains as the source of the builder’s entitlement.

Counterclaim

In his response to the claim the owner asks that the decision take account of his claims:
(a)for liquidated damages;
(b)defects;
(c)variations performed before written agreement; and
(d)items included in the design, but not constructed.
Some of those claims have been quantified in the counterclaim. If they have not been quantified in the counterclaim, I assume that they are not pressed.
The owner’s counterclaims $75,676.92 (sic), as follows:
(a)$2,745.18 to rectify a retaining wall which was the subject of agreed variation 4;
(b)$12,300 to install insulation underfloor and in ceilings;
(c)$10,000 to rectify the stairwell;
(d)$6,544.35 to construct a retaining wall under the house;
(e)liquidated damages of $13,800;
(f)a refund of $5,229.40 for agreed variation 11 for the fit out of the kitchen and laundry;
(g)$2,000 to install external venting to fans in the bathrooms, kitchen and laundry;
(h)a refund of $12,444.85 for agreed variation 12 for electrical work; and
(i)$23,057.99 to replace the glazing in the upstairs windows with Low-E glass.
At the conclusion of the hearing, the owner’s legal representative, who had been engaged on 14 March 2022, sought costs from that date and interest pursuant to section 77 of the Queensland Building and Construction Commission Act 1991 (QBCC Act).

Statutory remedies

Section 77 of the QBCC Act gives this tribunal a wide range of powers when resolving a building dispute. They include:
(a)ordering payment of an amount found to be owing by one party to another;
(b)awarding damages, and interest on the damages at the rate, and calculated in the way, prescribed under a regulation;
(c)varying a contract to avoid injustice;
(d)ordering rectification of defective work.

Contract

Master Builders Queensland Residential Building Contract – Level 2

The contract is a Master Builders Queensland Residential Building Contract – Level 2. The builder agreed to carry out the work and the owner agreed to pay the builder the contract price, as adjusted under the contract, in accordance with the provisions of the contract.
The owner makes much of the builder’s failure to comply with various time periods set in the contract for giving notices and claims. The contract does not contain any time bars in the event of non-compliance with the various time periods set in the contract for giving notices and claims.
The Contract Price was $449,598, including a provisional sum for timber flooring of $10,000. The Contract Price was GST inclusive.
The owner was responsible for obtaining building approval.[1]
[1]Item 14.
Contract is defined as:
… these general conditions, any special conditions set out in Part J of the Appendix, the Schedule, the Plans, the Specifications, and anything else annexed to, or incorporated by reference into, this Contract.
There were no special conditions.
The Plans were listed in Part C of the Schedule. They include 22 drawings prepared by the building designer and 17 engineering drawings. Part C of the Schedule does not describe any Specifications.
The parties acknowledged that the contract was an entire agreement[2], i.e., that the terms were fully set out in the contract.
[2]Clause 3.2.
The contractual order of precedence for resolving any discrepancy or ambiguity between the contractual documents was:
(a)the general conditions;
(b)the specifications;
(c)the plans;
(d)other contractual documents.[3]
[3]Clause 3.3.
The builder was required to bring the works to Practical Completion by the Date for Practical Completion,[4] 3 July 2019.[5]
[4]Clause 8.3.
[5]Item 10.
Practical Completion is defined as:
That stage of the Works when:
The Works are completed in compliance with the Contract, including all Plans and Specifications, and all statutory requirements applying to the Works, without any defects or omissions other than minor defects or minor omissions that will not unreasonably affect occupation…[6]
[6]Clause 1.
The Date for Practical Completion could be extended if:
(a)progress was delayed by any of the causes nominated in clause 15.1;
(b)within 10 business days of becoming aware (or when it ought reasonable have become aware), of both the cause and the extent of the delay the builder gave the owner a written claim for an extension of the Date for Practical Completion;
(c)the owner accepted the claim;[7] or
(d)the owner rejected the claim, by the process set out for resolution of the dispute in clause 28.[8]
[7]Clause 15.1.
[8]Clause 28.
If the builder failed to bring the work to Practical Completion by the Date for Practical Completion, the owner was entitled to give the builder a written claim for liquidated damages at the rate of $100 per day[9] for each day after the Date for Practical Completion until the Date of Practical Completion.[10]
[9]Item 18.
[10]Clause 18.1.
The builder was entitled to make progressive claims for payment at designated stages of the work.[11] The final designated stage was Practical Completion.[12] The practical completion stage payment was $44,959.80.[13]
[11]Clause 11.6.
[12]Item 21 Part D.
[13]Part D.
The owner was obliged to pay the claimed progress claim payment within 5 business days of receipt of the claim.[14] Save in respect of a claim for liquidated damages, the owner had no right to set-off against any progress claim.[15]
[14]Clause 11.7 and Item 20.
[15]Clause 11.8.
If the owner failed to make a payment when due, the builder was entitled to interest on the outstanding amount at the rate of 10% per annum calculated on daily rests.[16] The owner was also responsible to pay debt collection costs, including legal costs on a full indemnity basis associated with attempting to recover the amount.[17]
[16]Clause 11.9 and Item 19.
[17]Clause 11.9(b).
If the actual cost of provisional sum work was less than the amount allowed the difference was to be deducted from the contract price.[18]
[18]Clause 9.4.
Either party was able to request a variation of the works.[19] The builder was obliged to put the agreement to vary the work in writing in a variation document within 5 business days from the date of the agreement, and before any work the subject of the variation was started.[20] The owner was required to give the builder a written notice agreeing to the variation within 5 business days of receiving the variation document.[21]
[19]Clause 12.1.
[20]Clause 12.3.
[21]Clause 12.5.
The builder was required to comply with all statutory requirements.[22] If the cost to the builder increased because of complying with any requirement of a private certifier the amount of the increase was to be added to the contract price.[23] The builder was obliged to document the extra costs as it would a variation, within 5 business days and the owner was obliged to respond within 5 business days.[24]
[22]Clause 13.1.
[23]Clause 13.2.
[24]Clause 13.3
The builder was obliged to give the owner notice 5 business days before the day on which it anticipated that work would reach practical completion in order to organise a joint final inspection.[25] The owner was to give the builder a list of any minor defects or minor omissions identified at the final inspection.[26] The builder was to remedy minor defects or minor omissions within a reasonable period.[27]
[25]Clause 17.1.
[26]Clause 17.5.
[27]Clause 17.6.
The owner was not entitled to possession prior to making full payment, unless the owner had obtained the builder’s prior written consent.[28] If the owner took possession when not entitled to do so, the works were deemed to have reached practical completion.[29]
[28]Clause 17.8.
[29]Clause 17.10.
The builder was obliged to rectify defects during the defects liability period.[30]
[30]Clause 19.2.

Specifications

The Specifications are defined as:
The specifications relating to the works described in Part C of the Appendix.[31]
[31]Clause 1.
Part C of the Appendix is blank. However, the parties agreed that the builder’s updated quote letter dated 19 November 2018 which listed items that were included and items that were excluded from the price should have been described in Part C of the Appendix as had been the case with the original quote in the first version of the contract. That it was not referred to is not surprising as the revised contract was prepared and sent on 14 November 2018, two days before the owner asked for the updated quotation.
In order to avoid injustice, and because the parties agree it should be the case, pursuant to section 77(3)(h) of the QBCC Act, I vary the contract by inserting the words JAAM Projects Quote for works including Scope of Works dated 19 November 2018 Quote No.1850 into Part C of the Appendix under the heading Specifications. In this decision when I refer to the Specifications that is the document to which I refer.
The owner argued that the document he calls the Schedule of Finishes which he sent to the builder on 5 October 2018 should have been part of the contract specifications. Unlike the builder’s quote letter, it had not been referred to in the first version of the contract. While Mr Stay candidly confessed that he ‘stuffed up with the spec sheets sent back from you and Mel and never reviewed [them] in detail’ he did not go so far as conceding that the document should be part of the contract. Therefore, I make no variation to the contract to insert a reference to the Schedule of Finishes in Part C of the Appendix under the heading Specifications.

Findings of fact

Pre-contract

Following lengthy negotiations, the owner and the builder signed a contract on 26 October 2017 (first contract). The first contract included Specifications described as the builder’s quotation dated 1 September 2017 which listed items that were included and items that were excluded from the price.
The owner could not obtain the necessary funding to carry out the work. It is common ground that the parties abandoned the first contract.
The builder suggested modifications that might be made to the design to make it more economical. These changes included building in downstairs as part of the project, removing the external stairs and feature block wall and using the load bearing framing downstairs in lieu of posts.
The owner took these ideas on board and sketched his ideas. He emailed the builder, saying:
Apologies for the continued delays. We have managed to secure a bit more funding which should hopefully help move things along faster. As previously discussed we should like to build under the house, the game being to do it for around the same price as before.
Cost reductions
…
Cost increases
Enclose area under house
…
I have attached a copy of the original floorplans with modifications added…
Please let me know if you think that the cost increase would be offset by the cost reductions.
The downstairs would not need to be ‘finished’ and just bare bones, as would be looking to do it up over the next few years. Watertight would be a plus.
Have also attached a spreadsheet of our first and second preferences for the floor coverings, etc…
We are hoping that this can be the final edit and once we hear back from you with a ballpark figure, we can send this off to be re-drafted, re-engineered and back to you for sign off.[32]
[32]JAS2.
The owner’s building designer prepared revised drawings dated 6 August 2018. They became the contract plans.
On 5 October 2018 the owner provided the builder a list of selections for materials and fixtures.[33]
[33]BJC-1.
On 17 October 2018 the builder submitted its revised estimate budget ‘based on the new drawings’.[34]
[34]JAS3.
On 14 November 2018 the builder sent the owner a revised contract.
On 16 November 2018 the owner advised that he was happy with the contract and asked the builder to provide an updated copy of the quotation that had been provided in the previous round.
On 19 November 2018 the builder submitted an updated quote letter which listed items that were included and items that were excluded from the price.
On 19 December 2019 the owner and the builder signed the contract.[35] Unlike the previous version it did not refer to the builder’s quotation which listed items that were included and items that were excluded from the price.
[35]JAS3.2.

Work commenced

The owner was responsible for site preparation, survey set out and benching of the site.[36] Mr Stay’s evidence was that when work was to commence his men arrived and there were insufficient survey pegs to enable the set out to occur. The builder arranged for a surveyor to attend and set out the job. The owner says that the house is built on the location specified on the plan.
[36]Specification [2].
The owner says that on the first day that work commenced Mr Stay informed him that he had ‘a better idea’ for the carport and raised the relative level of the carport by approximately 1.5m. No written variation was sought.
It is common ground that the owner asked to change the internal layout of the lower floor in January 2019 and the builder agreed to make the changes.[37] On 31 January 2019 the builder asked the engineer to revise the drawings to take account of the changes to wall locations to the lower level. The engineer responded to both the owner and builder to check that he would be paid for the changes that would need to be made to five drawings to reflect the desired changes.[38] There was no evidence that the owner agreed to pay for the revisions.
[37]JAS22.
[38]BJC-7.
It is common ground that the builder departed from the contract plans by making the changes requested, despite the fact that the owner had not paid for the drawings to be revised. An obvious consequence of not obtaining revised drawings was that the approval of the building certifier for the changes was not sought. The changes included moving the laundry, adding a window to the laundry, and adding a window to the media room.[39] No written variation was sought.
[39]JAS19.
The certifier required an upgrade of the capacity of the water tanks. The builder offered the owner a choice of larger poly tanks on crusher dust or steel tanks on a slab. After 6 weeks of considering the question, the owner selected the latter option. Variation 1 for the upgraded water tanks dated 26 February 2019 was signed by the builder on 23 April 2019 and by the owner on 25 April 2019.[40] The owner paid variation 1.
[40]JAS4.

On 7 March 2019 the builder advised the owner that it would be necessary to put in additional retaining walls to the water tank slab to avoid debris collapsing into the tanks in any heavy weather events.[41] The builder offered either a timber sleeper wall or a concrete wall. The owner chose the latter. A photograph taken by the owner on 26 March 2019 shows that the work had commenced. Variation 4 for the wall, dated 15 April 2019, was signed by the builder on 23 April 2019 and by the owner on 25 April 2019.[42] The owner paid variation 4.
[41]JAS37 RFI#21.
[42]JAS4.
On 27 March Mr Stay cleared the air regarding his lack of attention to the list of selections for materials and fixtures that the owner had provided on 5 October 2018. He wrote:
Firstly I’ll say that I stuffed up with the spec sheets sent back from you and Mel and never reviewed in detail. …
Due to my stuff up with the specs I’m happy to provide the budgets for joinery, whitegoods, tiles, floor coverings … and give you copies of our quotes and let you make selections based on those budgets available.[43]
[43]BJC-5.
On 2 April 2019 the builder wrote to the owner:
Just wanted to bring an issue to light with the removal of W02 from the future media room. If we remove this window we have a potential issue with certification as the energy report is based on a calculation which includes the number of windows, their exposure and size. Due to this being a large window I don’t want to get caught out at the end of the project not meeting the required energy efficiency.[44]
[44]JAS19.
After an exchange about the correct identification of the windows, the owner decided that removing the window should not be a problem because the window had been added in February after the energy report had been done so would not have been taken into account in the approval.[45]
[45]JAS19.
On 3 April 2019 the builder wrote to the owner’s partner, pointing out that windows 03, 04 and 05 were located in the future media area in the energy report which was included in the building approval, warning:
You may get away with the certifier not picking up on this at his practical completion inspection, however, if he did and then in the worst case scenario the energy report needed to be redone and failed, the costs to install additional windows would be significant once plasterboard and cladding is up and painted.[46]
[46]JAS19.
On 3 April 2019 the builder provided proposed variation 10 relating to the lower powder room fit off claiming 7 additional days to perform these works.[47]
[47]JAS21.
On 4 April 2019 the builder advised:
The glass for the windows is Dowell’s standard glazing, not the low E.[48]
[48]JAS39.3.
The owner responded the following day seeking a cost to upgrade the glass to Low E as specified in the plans. The builder advised that Low E costs an additional 10% on top of the standard price and pressed the owner to resolve outstanding glazing selections to avoid delay to the finish date. The owner sought more information in order to decide whether the extra 10% was worth selecting in terms of energy rating. [49]
[49]JAS39.3.
On 5 April 2019 the builder sent the owner concept designs for the kitchen which had been put together by the joiner. The owner’s partner responded enthusiastically, saying:
Apart from the drainer on the sink being on the wrong side … this looks bloody amazing and pretty much bang on what I had in mind…[50]
[50]JAS37 RFI#43.
On 10 April the builder pressed the owner for instructions to confirm the window order. The owner asked for the schedule and raised various queries about particular windows. He expressed concern that the decision not to order low E glass might result in the need for tinting on the windows based on advice from the energy person when doing the initial report that the bedroom windows would need to be tinted or a shade built over the windows if Low E glass were not used. The builder pressed the owner to make decisions to avoid further delay to the project and deleted some windows from the order to give the owner tome to make decisions.[51]
[51]JAS39.4.
On 15 April 2019 the owner advised the builder that he had received approval for the septic amendment.[52]
[52]JAS24.
The owner requested an upgrade to the kitchen bi-fold window. Variation 7 dated 24 April 2019 was signed by the builder on 30 April 2019 and by the owner on 1 May 2019.[53] The owner paid variation 7.
[53]JAS9.
The owner requested a kitchen pantry slider. Variation 8 dated 26 April 2019 was signed by the builder on 25 April 2019 and by the owner on 25 April 2019.[54] The owner paid variation 8.
[54]JAS10.
While the joiner’s concept designs for the kitchen might have been ‘bang on’. unfortunately, the cost of the kitchen joinery as designed was not what the owner had in mind. On 15 May 2019 there was an email exchange between the owner and the builder, as follows:
(a)the owner wrote:
The kitchen is not listed as a PC sum and the specifications were provided before the build was quoted….
… My reasonable understanding was the price was including the requested specs.[55]
(b)Mr Stay responded, expressing his disappointment. He advised that the builder would revert to the requested specifications and delete from the agreed quote items not included, being 40mm stone, waterfall edge, overheads, fridge cabinet, oven stack, polytech cabinets in lieu of entry range BDW,[56] in other words the builder would provide what was listed in the 5 October 2018 list of selections for materials and fixtures, but no more than that.
(c)The owner said he thought it was reasonable that he pay a variation for the 40mm mitre and waterfall edge as they were not included in the 5 October 2018 list of selections for materials and fixtures.[57]
[55]JAS37 RFI#43.
[56]JAS37 RFI#43.
[57]JAS37 RFI#43.
The owner requested Bosch and Smeg whitegoods. Variation 2 was signed by the builder on 23 April 2019 and by the owner on 25 April 2019.[58] The owner paid variation 2.
[58]JAS5.
The owner requested an additional door to the master bedroom. Variation 3 dated 9 April 2019 was signed by the builder on 23 April 2019 and by the owner on 25 April 2019.[59] The owner paid variation 3.
[59]JAS6.
The owner requested an upgrade to the entry doors. Variation 9 dated 1 May 2019 was signed by the builder on 30 April 2019 and by the owner on 30 April 2019.[60] The owner paid variation 9.
[60]JAS11.
On 9 May 2019 the builder provided the owner with 2 options for additional electrical costs. The owner chose option 1. He asked how the prices compared to the contract allowance of $9,996 for electrical work as they were both under that amount. The builder explained that the quotes included items over and above the budget. The owner pointed out that the quotes were not just for the additional items requested, they were for all the items requested.[61]
[61]BJC-12.
On 15 May the builder emailed the owner advising:
We need decisions on some outstanding RFIs and selections so we can complete the project and not cause any delays.
The following need a decision on –
Kitchen selection / joinery selection / variation for cesear (sic) stone
…
Electrical fittings and fixtures selection.[62]
[62]BJC-15.
On 20 May 2019 the parties met to discuss outstanding items so the build could be completed in six weeks time. The minutes record the following:[63]
(a)the owner’s wife said they would approve the variation for the kitchen works with the Caesar stone benchtops;
(b)the owner asked not to tile the media room as it would be used as a garage for the first few years;
(c)the owner’s wife asked for stairs to the back of the bathroom on level one. Mr Stay suggested steel stringers, which satisfied the owner’s wife.
[63]Response, Attachment F
On 21 May 2019 the owner signed variation 11 for ‘Cesar stone and joinery’.[64]
[64]JAS12.
On 23 May 2019 the builder sent the owner proposed variation 18 for additional electrical items, as follows:
As requested additional electrical items: Ceiling fan x 4, power points x 11, data points x 5, air conditioning points x 1, lights x 39, 2 way switches x 3, , smoke alarms x 2, cooktop circuit x 1, satellite dish antenna x 1, TV points x 4, 15 amp points for heater on porch x 3 … and the repositioning of the metre box with 3 phase mains to side of house. The client is to supply all lighting fixtures at the time of fit off.[65]
[65]JAS20.2.
The variation noted that 2 additional days would be required to perform that work.[66]
[66]JAS20.2.
At the end of May the builder indicated that hand over would be on 3 July 2019, the contractual date for practical completion.[67]
[67]JAS22.
On 2 June 2019 the owner and the builder signed variation 12 (formerly proposed variation 18) for $11,313.50 (exc GST) for additional electrical items.[68]
[68]JAS13.
On 21 June 2019 the builder gave the owner requests for extension of time (EOT):
(a)2 days for the electrical variations which had been claimed in proposed variation 18;[69]
(b)14 days for delay in signing the joinery plan for the kitchen;
(c)21 days due to the change in the design of the septic.
[69]JAS20.2.
The owner alleges that on 21 June the builder informed him that handover would be delayed until 23 July 2019.
On 27 June 2019 the builder issued proposed variation 21 for external bathroom stairs.[70]
[70]JAS27.
On 27 June 2019 the owner’s partner advised the builder that a BAL rated shutter had been ordered for the kitchen window. She asked whether the electrician could come and run cabling prior to the cladding going on.[71] The builder responded that there would be an additional charge of $70 for the GPO.
[71]JAS17.1.
On Friday 28 June 2019 the builder advised that rain earlier in the week had meant that the scaffold could not safely be dismantled and as a result the scaffold would be dismantled the following Monday.[72] The builder sought an EOT for 7 days for wet weather delaying the removal of the scaffolding.
[72]JAS25.
On 1 July 2019 the owner advised that the shutter cable could be run to an existing power point. He wrote:
If a variation is required to complete the works, please proceed as required.[73]
[73]JAS17.1.
On 2 July 2019 the owner advised that the variation for the power GPO for the shutter had not been signed off because the roller shutter had to be hard wired, not plugged into a GPO. He advised that conduit had been run to an existing wall switch point and that the electrician would need to make the connection during or after the shutter was installed. He asked for an updated variation.[74]
[74]JAS17.1.
On 1 July 2019 the builder reminded the owner that he had still not signed an EOT regarding the purchase of camlock fittings for the water tanks, which was holding up the order.[75]
[75]Appendix 8, Stay’s response.
On 2 July 2019, in response to a request to sign off outstanding forms to enable orders to be placed, the owner wrote to the builder:
While I may be willing to sign an EOT to show good faith and agree a new end date, to delay the project unless I sign an EOT is just not right.[76]
[76]Appendix 8, Stay’s response.
On 3 July 2019, the Date for Practical Completion, the work was not practically complete.
On 9 July 2019 the builder pressed the owner for a decision on the claim for a variation for the camlock fittings to the tanks. The owner challenged the amount claimed for the variation as vexatious. He challenged a claim for $450 for fitting when the fitting was to be installed in the factory. The builder advised that the fitting charge was for work to be performed by the plumber on site.[77]
[77]JAS17.
On 9 July 2019 the owner advised the builder:
We will go without the stairs to the rear so will also need to reject variation 21.[78]
[78]JAS17.
On 22 July 2019 the builder provided the owner with a breakdown of the electrical variation with a total cost of $10,740 + GST.[79] It included:
[79]BJC-12.

Ceiling fan

4

Power points

11

Weather proof Power points

4

TV point

1

Satellite dish antenna

1

Air conditioning circuit

1

Phone points

1

Down lights

39

2 way switch

3

Smoke alarms

2

Cooktop circuit

1

15amp points for heater on porch

3

Repositioning meter box

On 23 July 2019, the date the builder had allegedly advised that the work would be ready for handover, the work was not practically complete. The owner gave notice of his intention to claim for liquidated damages as specified in clause 18 of the contract. The builder rejected the claim on the basis that absence of decisions on a number of key items had delayed the program. In response to the owner’s request to provide details, the builder referred to the 6 EOTs submitted to that time and identified the following items that had not been the subject of a claim, but had added time to the project:
9 quotes on the windows and glazing…
Changes made to downstairs that were requested on site after we commenced works…
Additional works and fit out to the downstairs bathroom
Delays in signing off joinery
Delays in final selection of front door…
Delays in the cladding to the kitchen.[80]
[80]JAS22.
The owner rejected all of the EOTs submitted up to 23 July 2019 on the basis that they had been submitted outside the 10 business days referred to in the contract. He also denied other claims foreshadowed by the builder on the basis that the builder’s errors had been their cause.[81]
[81]JAS22.
The owner alleges that on 27 July 2019 the builder informed him that handover would be on 2 August 2019.
On 29 July 2019 the certifier conducted what was to have been the final inspection. He concluded that the inspection outcome was unsatisfactory and that a reinspection was required. He reported:[82]
[82]JAS16.
Unsatisfactory requirements
1.Consistent with plans – unsatisfactory
2.External platform self-draining– unsatisfactory
3.External retaining walls and batters self stabilised– unsatisfactory
4.External suspended floors area beneath building provides positive drainage– unsatisfactory
5.External floor height above finished ground level– unsatisfactory
6.External roof and stormwater drainage as per approved plans– unsatisfactory
7.External driveways/paths/patio installed– unsatisfactory
8.…
9.External designated bushfire area requirements satisfied– unsatisfactory
10.Internal smoke alarms outside bedrooms and on every level – unsatisfactory
11.…
12.Internal wet-area silicon at joints installed – unsatisfactory.
Item 1 included a requirement to submit as constructed drawings for the lower level. Light and ventilation to the media room were to be reviewed to determine compliance.
Item 2 included a direction to provide drainage and falls to subfloor and upper level platform to prevent water ponding against the dwelling.
Item 3 required confirmation that the batter under the floor met NCC requirements.
Item 8 was reported to be a failure to provide external stairs/landings to the laundry and bathroom doorways.
He listed 22 documents that were required which he had not seen.
Mr Stay’s evidence was that the owner’s wife asked him to do her a favour and buy a window for the media room to meet one of the requirements of the building certifier. The owner does not deny that the window was provided.
On 2 August 2019, the further date the builder had allegedly advised that the work would be ready for handover, the work was not practically complete.
On 5 August 2019 the owner emailed the builder a list of things he had identified which appeared on the plans but which were not present:
1 first flush diverters on downpipes
2 underfloor insulation
3 external ducting for 3 extractor fans
4 power to the kitchen shutter[83]
[83]BJC-14.
The builder responded a few hours later, providing the defects list and advising:
(a)the plumber missed the first flush diverters and a credit of $68 would be provided;
(b)the underside of the floor had been fully sheeted in lieu of insulation;
(c)external ducting for extractor fans was not shown on the drawings; and
(d)the electrician had said that he had run power to the shutter.[84]
[84]BJC-14.
The owner responded:
(a)with a request to install the first flush diverters as a credit of $68 did not seem sufficient for the owner to get them installed;
(b)expressing his view that the sheeting under exposed sections of the house was a BAL requirement, not to be considered in lieu of another specified item;
(c)advising that external ducting for extractor fans was specified on the drawings;
(d)saying that the electrician had told him that he had been instructed by the builder not to power the shutter.[85]
[85]BJC-14.
On 6 August 2019 the electrician sent the owner a text message advising that he had been instructed not to connect power to the shutters.[86]
[86]BJC-14.
The builder claims that it sent the owner progress claim no. 8 on 8 August 2019.[87]
[87]Attachment E to the claim.
It is common ground that there was a handover inspection on 14 August 2019[88] and the owner moved in to the house.
[88]BJC-6.
On 19 August 2019 the builder asked the owner to send through a copy of the updated defects list from the walk through the previous week. The list allocates some items to the builder and some to the owner.[89]
[89]JAS41.
On 22 August 2019 the builder issued proposed variation 27 for ($4,032) as a PC sum credit for the flooring.[90]
[90]JAS35.
On 23 August 2019 the builder emailed the owner the final claim which included progress claim 8 for $40,524.61.[91] The owner has not paid this claim.
[91]JAS39.
On 26 August 2019 the owner sent the builder the updated defects list, noting issues that had been resolved, issues that were outstanding and adding items to the list.[92] The builder ticked off the majority of items allocated to the builder as having been done.
[92]JAS41.
The certifier conducted another final inspection. On 14 October 2019 he issued the final inspection certificate. The owner received the certificate on 17 October.[93]
[93]BCJ-17.
On 18 October 2019 the builder resent the owner progress claim 8 invoice for payment. [94]
[94]Response to counterclaim, Appendix 1.
On 22 October 2019 the owner responded indicating that he believed that he was not required to pay the practical completion invoice because:
(a)he was entitled to negative variations (specifically referring to the replacement of the bi-fold window in the bathroom, the removal of a window and for the feature beam in the lounge);
(b)he was entitled to liquidated damages; and
(c)the applicant had failed to provide a reasonable timeframe for rectification of defects. [95]
[95]Response to counterclaim, Appendix 1.
On 27 November 2019 the builder’s solicitors sent a letter of demand to the owner. The letter set out the reasons the owner was not entitled to the negative variations claimed:
(a)the bi-fold window in the bathroom had been replaced with 2 sash windows and screens;
(b)although the window had not been installed as requested and a wall had been constructed in its place, an additional window was subsequently required to be installed by the certifier;
(c)due to lack of co-ordination between architectural and structural drawings.
The letter also claimed interest on outstanding amounts under the contract and legal costs pursuant to the contract. [96]
[96]JAS39.1.

On 19 December 2019 the owner told the builder that walls in the stairway had begun to crack.
On 6 April 2020 an officer of the QBCC inspected the home. His report addresses the owner’s complaints about defects and about items that had not been built in accordance with the drawings.[97] As is the practice of the QBCC:
(a)directions were not given to rectify work identified as defective as the final payment had not been made;
(b)no opinion was expressed on contractual disputes.
[97]Response to counterclaim, Appendix 6
The QBCC officer identified the following work as defective:
(a)the finish to the plasterboard linings in the stairwell;
(b)the timber support block to the balustrade does not comply with the requirements of AS1170.1.
On 18 May 2020 Neil Mills of Australian Building Inspection Services Pty Ltd attended the site and performed an inspection. He said that the retaining wall does not extend sufficiently past the side of the water tank slab to deter soil erosion build up around the base of the metal tanks. He suggested that repairs, replacement or maintenance was required.

Findings

Final payment claim

The builder claims $40,524.61 as the Practical Completion stage payment, being the balance of the staged payment amount of $44,959.80 less the adjustment of the provisional sum for timber flooring. The builder credited the owner $4,032 (exc GST) after deducting:
(a)$4,880 (exc GST) from the PC of $10,000 for the supply and installation of new vinyl planks series 120 old mill blackbutt; and
(b)$1,088 (exc GST) from the PC of $10,000 to supply and install the yellow tongue subfloor.[98]
[98]JAS35.
The owner disputes the provisional sum adjustment on the basis that the $10,000 provisional sum for flooring was a ‘contingency’ and that the contract sum included the laminate floors supplied and laid.
The Specifications included:
4 Floor construction
…
Install yellow tongue flooring to house area
…
17 Flooring coverings
…
Timber floors (PC sum)
While the owner is correct in saying that the Schedule of Finishes which he sent to the builder on 5 October 2018 identifies the floor covering for the upper hallway, living, kitchen and dining areas as series 120 old mill blackbutt, I reject his argument that the contract sum included the laminate floors supplied and laid. The contract sum included a provisional sum for timber flooring. The Schedule of Finishes sets out the owner’s selection. Pursuant to clause 9.4 of the contract, as the actual cost of the flooring ($4,880 exc GST) was less than the amount allowed ($10,000 inc GST) the difference was to be deducted from the contract price. The builder was not entitled to deduct the cost to supply and install the yellow tongue subfloor from the PC of $10,000 as that was included in the Specifications as part of the work to be performed for the contract price.
The builder should have deducted a GST inclusive amount from the provisional sum because it is part of the contract price which was GST inclusive. The builder should have deducted $5,368 and therefore the owner should have been credited $4,632 (not $4,032) from the PC of $10,000 for the timber floors.
I find that the adjustment of the provisional sum for timber flooring should have been $4,632 with the consequence that the Practical Completion stage payment, less the adjustment of the provisional sum for timber flooring should have been $40,327.80.

Site survey

The builder claims $1,738 (exc GST)[99] to undertake the set-out survey (variation 26). The owner agrees that he was responsible for site survey. He says he had a survey done, but does not produce any evidence of what was done or when it was done. I accept Mr Stay’s evidence that when work commenced there were insufficient survey pegs to enable the set out to occur. There would have been no reason for him to engage a surveyor if there were sufficient pegs to do the set out.
[99]JAS31.
The owner does not deny that the builder had the survey done. The owner’s reason for non-payment is that the claim is ‘fraudulent’ and the costs claimed are excessive. Essentially though, his complaint is about the delay in making the claim. Instead of presenting the claim within 5 business days, as required by clause 12.3, and before the work commenced, as required by clause 12.6, the claim was not made for months after the survey was done.
Apart from his own evidence, the owner, who conceded that he has no expert knowledge of costing in the building industry, did not provide any evidence that the surveyor’s costs of $1,580 were excessive. I find that they are reasonable. I also accept that a 10% margin on variations is reasonable. Not only is it within the range charged in the domestic construction industry, it is also the margin that the parties agreed as an appropriate margin on provisional sum adjustments.
The contractual notice requirements are not expressed as time bars. As a consequence, a failure to adhere to the timing requirements would sound in breach of contract, not disentitle the builder from making a claim. The owner has suffered no loss as a result of the builder’s delay in making the claim. Had the builder claimed the variation at the time the survey was needed, the owner would have had to choose either to engage a surveyor and pay the surveyor or to approve the variation. One way or the other the survey had to be done at the owner’s expense.
I find that the builder is entitled to be paid $1,738 plus GST for the set-out survey.

Installation of stairs to the back of the bathroom on the upper level

The builder claims $1,065.80 (exc GST) for installation of stairs from the back of the bathroom on the upper level (variation 21).
It is common ground that Drawings A-06 rev 1 and A-08 rev1 do not show stairs from the back of the bathroom on the upper level. Item 18 of the Specification has a dot point ‘timber stairs and stainless wire balustrade’ in the list of inclusions.
On 20 May 2019 the owner’s wife asked for stairs to the back of the bathroom on level one. The builder proposed a variation to install stairs with steel stringers. The owner rejected the variation on 9 July 2019 on the basis that he would ‘go without the stairs’ in his eagerness to get an end date for the project.[100]
[100]JAS17.
The building certifier required that stairs be provided from the bathroom. The builder’s subcontractor built the stairs. The builder claims the subcontractor’s costs plus a 10% margin.
The owner denies liability for this variation:
(a)first, because he says the builder should have constructed the stairs as part of his obligation to comply with the NCC;
(b)second, because the stairs were included in the contract price because they were listed on the Specification;
(c)third, because the builder has breached the warranty given in clause 10.3 that prime costs and provisional sums have been calculated with reasonable care;
(d)finally, because the claim is in breach of section 31(10) of the QBCC Act.
There is no doubt that the stairs had to be constructed to comply with the NCC. The real issue is whether the cost of construction of the stairs should have been included in the contract price despite the fact the stairs were not on the drawings, but timber stairs were listed inclusions in the Specifications. I find that the reference in the Specification to ‘timber stairs and stainless wire balustrade’ was not a reference to stairs with steel stringers as proposed by the builder in response to the owner’s wife’s request for stairs at a location not shown on the drawings.
I reject the owner’s argument that the builder has breached the warranty given in clause 10.3 that prime costs and provisional sums have been calculated with reasonable care because the stairs are neither a prime cost or a provisional sum.
Section 31(10) of the QBCC Act relates to entitlement to a contractor’s licence. It is irrelevant.
I find that the builder is entitled to be paid $1,065.80 (the subcontractor’s costs plus a 10% margin) plus GST for the installation of stairs from the back of the bathroom on the upper level.

Running a water line to the back of the fridge

The builder claims $594 (exc GST) for running a water line to the back of the fridge (variation 22).
It is common ground that the plumber did the work at the owner’s request. The owner’s evidence was that the plumber did not charge the builder for this extra work. Despite knowing this was the owner’s evidence, the builder did not provide any evidence of a claim from the plumber. Accordingly, I am not satisfied that the builder has discharged the onus of proof in respect of variation 22. I reject this claim.

Running power to the bushfire shutter

The builder claims $77 (exc GST) for running power to the bushfire shutter (variation 24). In fact, the builder’s proposed variation, which the owner refused to sign, was to install a GPO to which the shutter cable could be connected. When the owner discovered that the roller shutter had to be hard wired, not plugged into a GPO, he asked for an updated variation, which was not provided. It is common ground that the electrician did not connect power to the shutters. There is a dispute between the builder and the owner about the reason the connection was not made which I need not resolve to deal with the builder’s claim for a variation to install a GPO for the shutter. I find that the builder is not entitled to claim for a variation for work that was not performed.

Supply of camlock fittings to the water tanks

The builder claims $1,263.40 (exc GST) relating to the supply and factory fitting of camlock fittings for a 10,000 litre firefighting limit to the water tanks (variation 23). The fitting was required to meet building certification requirements.
The owner agrees that the water tanks have camlock fittings but disputes the value of the claim. The owner produced a quote from a tank supplier that indicates that a 50mm camlock fire kit could be installed in a tank at the factory for $179 inc GST.
I am not satisfied that the builder has discharged the onus of establishing the amount claimed was reasonable. It appears to be common ground that camlock fittings were fitted in the factory. The builder has not produced anything from either the tank supplier or the plumber that justifies a claim for $1,263.40. The builder is not entitled to this claim.

Installation of stairs from the laundry

The builder claims $721.60 (exc GST) for installation of stairs from the laundry to the carport (variation 29).
Drawing A-06A rev 1 does not show stairs from the laundry to the carport. Item 18 of the Specification has a dot point ‘timber stairs and stainless wire balustrade’.
The owner denies liability for this variation:
(a)first, because he says the builder did not present the claim during the course of the work;
(b)second, because he says the builder should have constructed the stairs as part of his obligation to comply with the NCC;
(c)third, because the builder should have been aware of the need for the stairs more than 10 days before presenting the variation.
This claim is not identical to the claim regarding the bathroom stairs. The builder’s proposed variation 21 issued on 27 June 2019 in response to a request from the owner’s wife, related only to the bathroom stairs, not to stairs from the laundry to the carport.
It is common ground that the parties agreed to depart from the design on Drawing A-06A rev 1 after the work commenced. There is no reason that the owner’s obligation to supply drawings under item 7 of the contract should not extend to revised drawings. The owner did not have a revised drawing produced. Had a revised drawing been produced, it should have called for stairs from the laundry to the carport in order to comply with the NCC. The builder could have priced all the changes, including the stairs. However, none of this happened as in the early days of the work the parties were acting collaboratively, without regard to their obligations and entitlements under the contract.
I reject the owner’s claim that the stairs were included in the contract price because they were listed on the Specification. Logically, the inclusions must relate to the drawings, they cannot relate to a change to a drawing made after the contract was entered into.
The building certifier required that stairs be provided from the laundry. Pursuant to clause 13 the builder was required to comply with the requirements of the private certifier. The cost of doing so should be added to the contract price. I find that the builder is entitled to be paid $721.60 (the subcontractor’s costs plus a 10% margin) plus GST for the installation of stairs from the laundry to the carport.

Installation of a new window in media room

The builder claims $1,061.50 (exc GST) for installation of a new window in the media room as required by the building certifier (variation 30).
The owner agrees that a window was installed but denies liability for this variation:
(a)because he wanted a door, not a window;
(b)because the colour of the window frame does not match the colour of the rest of the window frames (monument versus black);
(c)because the builder breached the statutory warranty to exercise care and skill;
(d)as no variation was presented before the work was done, contrary to the requirements of sections 40(2) and 40(3) and 108B(1) of the QBCC Act.
This is another instance where the problem arises due to the failure to produce revised drawings reflecting the changes to the media room. Had the revised drawings been produced it would have been clear whether a door or window was required. Absent a revised drawing, the only evidence that the owner wanted a door, not a window, is found in his statement.
The owner did not deny Mr Stay’s evidence that when the issue emerged the owner’s wife asked for the window. I draw an adverse inference from the fact that the owner’s wife did not give evidence. I find that the builder was asked to vary the contract by supplying a window for the media room.
While the certifier did not expressly require the installation of an additional window, his call for a review of light and ventilation to the media room to determine compliance was the eventuation of the possibility about which the builder warned the owner in April. The certifier picked up on the absence of sufficient light and ventilation at his inspection therefore the owner did not get away with the change.
I reject the owner’s claim that the builder breached the statutory warranty to exercise care and skill. The builder was alert to the risk that a certifier might spot that the as constructed work did not comply with the approved drawings and that the changes requested by the owner might not meet the energy requirements or the building approval requirements. The builder warned the owner of the possible consequences in April. The owner elected to run the risk.
I reject the owner’s claim that the builder failed to meet the requirements of sections 40(2) and 40(3) and 108B(1) of the QBCC Act as such a failure is not justiciable in these proceedings. This is a building dispute, not a claim by the QBCC for the application of a statutory penalty.
I find that the builder is entitled to payment of $1,061.50 (exc GST) for installation of a new window in the media room.

Cost of a second inspection by the building certifier

The builder claims $1,269.18 (exc GST) for the cost of a second inspection by the building certifier (variation 31).
There is no doubt that a second ‘final’ visit was necessary due to the number of unsatisfactory items listed at the inspection on 29 July 2019.
The owner argues that he is not obliged to pay the cost of the second final inspection because:
(a)the builder was responsible for the 12 reasons the certificate was not issued on the first final inspection;
(b)as no variation was presented before the work was done, it is contrary to the requirements of sections 40(2) and 40(3) of the QBCC Act;
(c)the claim was never agreed and hence not presented within 5 business days of agreement, as required by clause 12.3, and the work was done before the claim was made, contrary to the requirements of clause 12.6.
I reject the submission that the builder was responsible for all 12 reasons the certificate was not issued on the first final inspection. I have already found that the owner was responsible for the first reason for failure, i.e., the call for a review of light and ventilation to the media room to determine compliance. External landscaping, driveways and retaining walls had been excluded from the builder’s work in the Specifications, hence the owner was responsible to address items 3, 7 and 9.
I reject the owner’s claim that the builder failed to meet the requirements of sections 40(2) and 40(3) of the QBCC Act as such a failure is not justiciable in these proceedings. This is a building dispute, not a claim by the QBCC for the application of a statutory penalty.
I reject the owner’s argument that the claim should fail because it was never agreed and hence not presented within 5 business days of agreement, as required by clause 12.3, and the work was done before the claim was made, contrary to the requirements of clause 12.6. None of the time requirements are mandatory. The owner suffered no loss as a consequence of the builder not making the claim at the time it incurred the costs, indeed he achieved a benefit as he was the party responsible under the contract for obtaining building approval.[101]
[101]Item 14 contract schedule.
I find that the builder is entitled to be paid $1,396.09 ($1,269.18 plus GST) for the cost of a second inspection by the building certifier.

Counterclaims

Retaining wall which was the subject of agreed variation 4

The owner claims $2,745.18 (plus GST) to rectify a retaining wall behind the tanks which was the subject of agreed variation 4. He claims that the wall that was built will have to be demolished and replaced with a wall that stops debris falling onto the slab on which the tanks sit.
He does not provide any expert evidence in support of this claim. He did not call Mr Mills of Australian Building Inspection Services Pty Ltd who had identified this issue. Even if the wall requires replacement, the most extreme of the options suggested by Mr Mills, the owner did not provide evidence from an appropriately qualified person to support his claim for the costs of demolition and reinstatement. I reject this claim.

Insulation

The owner claims $12,300 to install insulation but does not specify the location of the ‘missing’ insulation.
Drawing A-03 rev1 requires:
26. Insulation
Roof …
Ceilings – R2.5 165mm Greenstuff Batts by Autex; or R3.0 165mm Bradfords’ Gold Batts
External walls – R2.5 165mm Bradfords’ Gold Batts
Under floor – Retroshield 7mm to underfloor.
The sections in Drawings A-09 rev1 and A10 rev 1 show the location of the insulation. However, these drawings were not revised when the parties agreed to make changes to the lower floor in January 2019. There was no evidence one way or the other that the revisions included changes to the insulation requirements.
When the builder undertook the revised work, without claiming a variation, it installed a ceiling to meet the BAL19 Code requirements. The builder concedes that underfloor insulation was not installed.
Absent revised drawings that take account of the changes made by agreement in January 2019[102] I am not satisfied that the builder’s failure to install insulation occurred in an area that was covered by Drawing A-03 rev1 as the general note can only relate to the contract drawings, not revisions to them made by agreement between the parties after the date of the contract. I reject this claim.
[102]It was the owner’s responsibility to have the drawings revised.

Rectification of the stairwell

The owner claims $10,000 to rectify the bowing walls in the stairwell.
The builder acknowledges that the work is defective. Mr Stay told the QBCC officer and repeats in his evidence that the builder was prepared to rectify the defect once the outstanding payment had been made.
The owner could not get a quote from a tradesperson to undertake the repair, so he seeks ‘a conservative fair value’.
Rather than guess what the rectification might cost, I will order the builder to rectify the defective work pursuant to section 77 of the Queensland Building and Construction Commission Act 1991 (Qld).

Retaining wall under the house

The owner claims $6,544.35 to construct a retaining wall under the house. The owner claims that the batter to the undercroft does not meet NCC requirements and requires retaining.
The owner’s statement made reference to an exchange between the builder and the certifier about the site soil classification, but the document was not attached to the tendered statement. Given that the final certificate was eventually issued, I can only assume that the certifier was satisfied with the response to his request for confirmation that the batter to the undercroft met NCC requirements.
I am not satisfied that the owner has met the onus of proving that it is necessary to construct a retaining wall under the house. I reject this claim.

Refund for agreed variation 11 for the fitout of the kitchen and laundry

The builder claims a refund of $5,229.40 for agreed variation 11 for the fitout of the kitchen and laundry.
The Specification required the builder to provide a kitchen with the following features:
Fronts are laminate with pencil round edges
20mm standard range smart stone tops
Standard range handles
Hinges and runners are Hettich with lifetime warranty
1 bank of 4 draws (sic)
Overhead cabinets.
The owner submits that variation 11 was for items already listed in the Specification. His evidence was that he signed variation 11 for Caesar stone and joinery on 21 May 2019 under threat of not having a functional kitchen or laundry. I reject that submission as it is not consistent with the contemporaneous documents. During the course of the disagreement about the cost of the kitchen which had been designed in accordance with the owner’s wishes, the builder offered to revert to the kitchen with the features described in the 5 October 2018 list of selections for materials and fixtures which was a functional kitchen that had been included in the contract price, albeit lacking features included by the joiner in his proposal.
The owner has not provided any breakdown of the variation price, therefore I have no way of finding that it included items that were in addition to the requirements of the Specification. Indeed, the owner has acknowledged that he should pay for the 40mm mitre and waterfall edge to the benchtops. I am not satisfied that the owner has discharged the onus of proof for this claim.

External venting to fans

The owner claims $2,000 to install external venting to fans in the bathrooms, kitchen and laundry.
Contract drawings E-01 rev1 and E-02 rev1 each state:
Exhaust fans & rangehoods are to be vented directly outside & not into the roof cavity…
The builder argues that the IXL light and ventilation unit chosen by the owner is designed to vent into the ceiling cavity. It makes no submission regarding the failure to vent the rangehood directly outside.
I find that the builder is in breach of its obligations in the contract drawings to vent exhaust fans directly outside. There was no evidence about whether or not it is possible to vent the IXL light and ventilation units directly outside. This breach is the type of minor omission that would typically be remedied during the defects liability period. When the builder is on site to remedy the defect in the stairwell it can attend to this omission at the same time. I will order the builder to install vents from exhaust fans and the range hood to the outside in instances where it is appropriate to do so pursuant to section 77 of the Queensland Building and Construction Commission Act 1991.

Refund of $12,444.85 for agreed variation 12

The builder claims a refund of $12,444.85 (inc GST) for agreed variation 12 which relates to electrical work.
The electrical installation was not a provisional sum item. Item 11 of the Specification provides that the contract price included the following:

Fan & light combinations

2

Ceiling fan

1

Power points

26

TV point

3

Air conditioning points

2

Phone points

1

Down lights

20

Kitchen oyster light

1

IXL

2

2 way switch

3

Smoke alarms

5

HWS circuit

1

Oven circuit

1

Porch wall light

1

Carport LED

1

Deck LED

2

The builder advised the owner that $9,996 had been included in the contract price for that electrical work.
The owner accepts that he increased the number of lights and power points that the electricians had been instructed to install. He says he did so because at the time the electricians were doing the rough in, the electrician explained that the house would be underlit and underpowered if the number of lights and points were not increased. The owner spent the day with the electrician directing the positioning of lights and switches. He also approved other additions and deletions to the electrical work.
The owner made a number of requests for a breakdown of the proposed variation but the builder did not provide the detail until weeks after the owner signed variation 12 for $11,313.50 (exc GST) for additional electrical items on 2 June 2019. The detailed breakdown differed from the Specification in numerous ways. The differences were not limited to different numbers of specified items to be installed, some items had been deleted, others had been added.
I find that the variation should not have been for the entire cost of the electrical work, it should have been limited to those items that were in excess of the items included in the contract price and have taken account of items deleted from the original scope. The variation should have been $1,317.50 + GST (the difference between $9,996 and $11,313.50). The owner paid $11,313.50 + GST when he should have paid $1,049 + GST. He is entitled to a refund of $10,995.

Low-E glass

The owner claims $23,057.99 to replace the glazing in the upstairs windows with Low-E glass.
Drawing A-13 rev1 is the contract window schedule. It lists each window by location, style, height, width and glazing type. The glazing types listed are either 6mm toughened or Low E 6mm toughened.
The glazing schedule prepared in April 2019 did not call for Low E glazing and therefore Low E glass was not installed. I find that the builder is in breach of its contractual obligation to install Low E glazing.
The measure of damages is to put the owner in the position he would have been if Low E glazing had been installed. The owner has not provided any evidence that the necessary energy rating has not been achieved due to the absence of Low E glazing. Absent any expert evidence, I am not satisfied that the owner has discharged the onus of proving that his loss is to be measured by the cost of replacing the glass (and I note that he provides no evidence from an appropriately qualified person to support his claim for $23,057.99). On the evidence before me the likely solution to the problem is to apply tinting to the windows. There is no evidence of the cost of tinting the windows. I reject this claim.

Defects

In his response to the claim the owner submitted that remaining defects should be taken into account. Mr Stay says that the builder only stopped attending to defects due to non-payment.
While the owner complains about the way the builder went about rectification of defects identified by the certifier, it appears from the fact the certifier signed off on his second final inspection, that the rectification satisfied the certifier.
The only defect identified by the QBCC that the owner pressed at the hearing was the finish to the plasterboard linings in the stairwell which I have addressed above.
I note that the owner did not call Mr Mills of Australian Building Inspection Services Pty Ltd who had identified a number of alleged defects in his report. The builder had no chance to test those opinions in cross-examination.
In the absence of any expert evidence that there are remaining defects, save for the stairwell addressed above, I have no means of taking remaining defects into account when assessing the amount owing.

Delay damages and liquidated damages

EOTs

In order to address the builder’s claim for damages for delay and the owner’s claim for liquidated damages it is first necessary to consider the builder’s claims for extensions of time. To be entitled to an EOT under clause 15 of the contract the builder must prove that:
(a)progress was delayed as a result of any of the causes nominated in clause 15.1;
(b)when it was aware of both the cause and the extent of the delay it gave the owner a written claim for an extension of the Date for Practical Completion within 10 business days of becoming aware of both the cause and the extent of the delay.
Relevantly, the causes nominated in clause 15.1 include:
(a)a breach of contract by the owner;[103]
(b)a variation;[104]
(c)a failure by the owner to give a written notice agreeing to a variation;[105]
(d)inclement weather;[106]
(e)any other cause not reasonably foreseeable at the date of entry into the contract.[107]
[103]Clause 15.1(e).
[104]Clause 15.1(a).
[105]Clause 15.1(b).
[106]Clause 15.1(i).
[107]Clause 15.1(n).
The test is a retrospective one: not only must there have been a potential cause of delay of the type listed in clause 15.1, but that cause of delay must have resulted in actual delay to the progress of the work. I reject the owner’s argument that the builder is not entitled to its claims for EOTs because they were made outside the 10 business day period when the builder was, or should have been, aware that a cause of potential delay had arisen. I find that the time for giving the notice commenced to run when the builder became aware of the extent of the impact of the delay on the Date for Practical Completion, not when the event that that might cause delay occured.
Mr Stay did not challenge the owner’s evidence that at the end of May, and again in the week before the EOT claims were lodged on 21 June 2019, he assured the owner and his banker that hand over would be on 3 July 2019, the original Date for Practical Completion. Logically, in making such a statement, it could only have been the case that despite the potential causes of delay that had arisen before then (and there were numerous examples of the builder pressing the owner for decisions and warning that delay in reaching decisions could have adverse impact on completion by that time), the builder was not seeking an extension to the Date for Practical Completion as a result of any of those causes.
In his statement Mr Stay advanced the following claims for claims for EOTs submitted by 23 July 2019:
(a)a claim for 2 additional days relating to additional electrical items, submitted 23 May, which the owner approved;[108]
(b)a claim for 7 days relating to the lower powder room fit off;
(c)a claim for 14 days for delay in signing the joinery plan for the kitchen;
(d)a claim for 21 days due to the change in the design of the septic.
(e)a claim for 28 days for delay caused by the owner in providing information regarding suitable firefighting fittings (the camlock fitting) and location of the water tanks.
[108]JAS20.1.
The owner rejected all these claims (despite having approved the variation for the additional electrical items) on the basis they were presented more than 10 days after the builder became aware, or ought reasonably to have become aware of the cause of the delay.
During cross-examination Mr Stay did not refer to the 7 day claim relating to the lower powder room fit off, but identified a different claim for 7 days EOT due to wet weather which delayed the scaffold removal.
The owner’s evidence, unchallenged by the builder, was that the electricians worked alongside other trades. I am not satisfied that the builder has discharged the onus of proving that the Date for Practical Completion was actually delayed by the additional electrical work.
The owner’s evidence, unchallenged by the builder, was that the kitchen was installed as soon as the walls were plastered. I am not satisfied that the builder has discharged the onus of proving that the Date for Practical Completion was actually delayed by delay in signing the joinery plan for the kitchen.
During his cross-examination Mr Stay accepted that the builder’s scope of work included installation of the septic system. The owner obtained the necessary approval for the revised septic design in April 2019. If there was a delay in obtaining the approval, I find it was not the proximate cause of the delay to the Date for Practical Completion. The delay in installation of the septic was due to lack of access. The septic could not be installed until the scaffolding had been removed. The builder was responsible for removing the scaffolding. That is not a cause of delay which gives the builder an entitlement to claim an EOT.
The construction period included a 20 day allowance for wet weather.[109] The builder provided no evidence that the allowance had been fully utilised by 28 June 2019, the date it advised the owner that rain earlier in the week had meant that the scaffold could not safely be dismantled and as a result the scaffold would be dismantled the following Monday.[110] I am not satisfied that the builder has discharged the onus of proving that 7 days of wet weather claimed was in addition to the 20 day allowance for wet weather. I reject the builder’s claim for an EOT for delay caused by the removal of the scaffolding.
[109]Schedule item 8.
[110]JAS25.
While it is the case that considerable time was spent in February and March 2019 while the owner explored options regarding the water tanks, it is also the case that by 18 March 2019 the builder had closed the RFI regarding the tanks. The requirement for the camlock fittings appears to have arisen in June 2019. It is common ground that the fittings were installed in the factory. I am not satisfied that the builder has discharged the onus of proving that installation of the camlock fittings in the factory actually caused delay to the works.
For the reasons set out above I find that the builder is not entitled to any of the claimed EOTs.

Liquidated damages

On 23 July 2019 the owner gave notice of his intention to claim for liquidated damages. He did so on the basis that the Date for Practical Completion had come and gone but the work still had not reached practical completion. He claims liquidated damages of $13,800, i.e., 138 days between 3 July and 17 October 2019 at the rate of $100 per day.
To succeed in his claim, the owner must establish:
(a)the Date for Practical Completion remained 3 July 2019;
(b)the Date of Practical Completion was 17 October 2019.
Had the builder been legally represented it may have argued that the owner was not entitled to enforce strict adherence to the contractual date for practical completion as he had prevented the builder from fulfilling its obligations. This is known as the prevention principle, which is aligned to the principle that a party cannot benefit from its own breach of contract.[111]
[111]Derived from Peak Construction (Liverpool) Ltd v McKinney Foundations Limited (1971) BLR 111
Instead of responding promptly to requests for decisions and considering the merits of the extensions of time claims made before the date for practical completion, the owner rejected claims on the basis they were made late, or in the mistaken belief that approving the claims would be to give in to blackmail. His statement on 2 July 2019 that:
While I may be willing to sign an EOT to show good faith and agree a new end date, to delay the project unless I sign an EOT is just not right.[112]
demonstrates his lack of appreciation of the requirements of the contract. Despite having agreed a variation for extra electrical work which indicated 2 extra days would be needed, he refused to sign the EOT. It seems that rather than turn his mind to whether or not there had been a delay caused by each event claimed, he rejected claims on the basis the event claimed to have been the cause of the delay had occurred more than 10 business days before the notice had been given. He failed to appreciate that the claim was to have been made after both the event and resultant delay was known.
[112]Applicant’s response, Appendix 8,.
To use his own words, it was just not right to ignore the obligations placed on him by the contract, nor to impose unilateral time bars. I find that the owner cannot benefit from his unilateral imposition of time bars and failure to consider claims on their merits to insist that the builder is not entitled to any extension of time. I find that the effect of the owner’s conduct was to set time at large. The consequence is that the builder is relieved of any obligation to pay liquidated damages as there is no longer a date from which such a claim can run.
For completeness I also address to question of whether the entitlement to liquidated damages extended to 17 October 2019. The builder submits that the period during which any claim for liquidated damages might run should end on 14 August 2019, the date the owner took possession of the house. Mr Stay’s evidence was that despite the fact that the second final inspection had not occurred, as there were only a few items to attend to for the final certification and because he felt sorry for the owner and his family, including a toddler, living in a caravan on site, he gave the owner the keys and allowed the family to move in.
Under clause 17.7 of the contract the owner was not entitled to possession prior to making full payment to the builder, unless he had the builder’s prior written consent. I reject the builder’s claim that the works were deemed to have reached practical completion on 14 August 2019 pursuant to clause 17.10, because although the owner took possession before making the final progress payment he did so with the permission of the builder.
The purpose of a liquidated damages clause is to give the parties certainty about the damages the owner will claim in the event of a breach of contract by the builder in failing to bring the work to practical completion. The purpose is not to penalise the builder. Had the builder been legally represented he might have argued that liquidated damages of $100 per day was not a genuine pre-estimate of the owner’s loss as the owner was living in a caravan on site during construction.
I reject the owner’s claim for liquidated damages on the basis that by his conduct he set time at large. Alternatively, because the rate of liquidated damages was a penalty.

Damages for delay

The builder claims $7,200, 72 days at the contractual delay costs rate of $100 per day. The builder bases its claim for delay damages on:
(a)its claim for delays of 72 days as claimed in EOTs 1 – 5;
(b)on alleged breaches of clause 11.12(a), i.e., the owner’s obligation not to interfere with the carrying out of the works by delaying making selections, requesting revisions of variations before approving them; and
(c)the site foreman being on site 72 days longer than budgeted.
This seems to be a hybrid claim as it is said to be a claim for damages for breach of contract, yet the loss is calculated in accordance with the delay cost entitlement given by clause 24.

While the builder’s claim for delay costs is not subject to it claiming an extension of the Date for Practical Completion,[113] it must prove that:
(a)progress of the works was delayed as a result of the causes set out in clause 15.1; and
(b)it gave a written claim setting out the relevant cause of the delay and the time during which the progress of the work was delayed as a result of the cause.[114]
[113]Clause 24.3.
[114]Clause 24.1.
As set out above, I am not satisfied that the builder has discharged the onus of proving that progress of the works was delayed as a result of the causes set out in EOTs 1 – 5. Accordingly, insofar as the builder relies on those claims as the relevant causes of delay in its delay damages claim I reject the claim.
As to the alleged breaches of clause 11.12(a), Mr Stay’s evidence was that it took the owner considerable time to provide instructions and make decisions. He relied on a number of lengthy RFI print outs attached to his statement, but did not produce a program so there is no means of assessing whether or not any of these issues impacted on the critical path of the project. I have already taken the owner’s conduct into account when I relieved the builder of its obligation to pay liquidated damages. I am not satisfied that the builder has proved that it is entitled to any further relief.
I reject the builder’s claims for delay damages.

Interest

Relevant legislation

Section 77(3)(c) of the QBCC Act gives the tribunal power to:
award damages, and interest on the damages at the rate, and calculated in the way, prescribed under a regulation.
Section 54 of the Queensland Building and Construction Regulation 2018 (Qld) (QBCC Regulation) provides:
Interest—Act, s 77
(1) For section 77(3)(c) of the Act, interest is payable on the amount of damages awarded—
(a) if the parties have entered into a contract—at the rate provided under the contract; or
(b) at the rate agreed between the parties; or
(c) otherwise—at the rate of 10%.
(2) The interest is payable on and from the day after the day the amount became payable until and including the day the amount is paid.

Under the contract

The builder claims interest under the contract at the rate of 10%[115] on:
(a)the practical completion stage payment claim;
(b)progress claims that were not paid within 5 business days of receipt of the claim;
(c)variations.
[115]The rate provided in Clause 11.9 and Item 19 of the contract.
The owner argues:
(a)the practical completion stage payment claim was premature and that time for payment should only run from 17 October 2019, i.e., the date the final inspection certificate was issued;
(b)the practical completion stage payment claim was not correctly dated;
(c)interest is not payable on the GST component of the invoice;
(d)liquidated damages and negative variations for major omissions should be deducted from the practical completion stage payment claim;
(e)he should not have to pay interest as the amount claimed is in dispute;
(f)the amounts claimed were not owing;
(g)the builder is not entitled to claim interest on variation claims that were not made in accordance with the contract;
(h)he did not know that the bank had made late payments on three progress claims and that was not raised at the time.
I reject the builder’s claim that the work reached Practical Completion on 14 August 2019. The builder allowed the owner to go into possession, the owner did not take possession, hence clause 17.10 does not operate to deem practical completion. The builder acknowledges that it was working to rectify issues identified by the certifier, which I do not consider to be minor defects or omissions, after 14 August.
I find that the works did not reach Practical Completion as defined until 17 October 2019.
I reject the owner’s claim that he does not have to pay interest because the practical completion stage payment claim was made early, was not properly dated or otherwise ran foul of the timing requirements in the contract. None of those requirements were time bars. The owner suffered no loss as a result of the builder’s failure to adhere to contractual time frames.
The owner had no right to set off any amount from a progress payment claim other than liquidated damages,[116] hence is obliged to pay interest at the contract rate of 10% on the amount properly claimed in the practical completion stage payment claim less any properly claimed liquidated damages, from the day 5 business days after 17 October 2019 (24 October 2019) until the date payment is made. Above I have found:
(a)that the amount properly claimed in the practical completion stage payment claim was $40,327.80;
(b)no liquidated damages are to be deducted.
[116]Clause 11.8.
Under the contract the builder’s entitlement to interest on variations not paid runs from the date that payment was due.[117] Some of the variations claimed were disputed at the time they were made, others were raised for the first time in these proceedings. I reject the builder’s claim for interest on variations under the contract as it has not established that payment was due until these proceedings were heard.
[117]Clause 11.9.
I reject the owner’s claim that interest is not payable on the GST component of the invoices. He presents no authority for the argument. The builder is obliged to include GST in its invoices in order to comply with the taxation legislation. The owner is obliged to pay the amount claimed including GST.
I reject the builder’s claim for interest on progress claims 2, 3 and 4 that allegedly were not paid within 5 business days of receipt of the claim. Those interest claims were first made in Mr Stay’s statement.[118] There was no evidence of the date the claims were received by the owner and therefore there is no way to test the accuracy of Mr Stay’s statement that the payments were late. I am not satisfied that the builder has discharged the onus of proving these claims.
[118]JAS40.
Unlike offsets for liquidated damages, the contract makes no provision to setoff negative variations for major omissions. The interest calculations for the practical completion stage payment claim will not reflect the refund due to the owner for the negative variation for the electrical works.

Under the QBCC Act

I find that the builder is entitled to interest on variations at the statutory rate of 10% from the date of this decision until the date the payment is made.
I find that the owner is entitled to interest on the claims for which he has been successful at the statutory rate of 10% from the date of this decision until the date the payment is made.

Legal costs

Under the contract

The builder is entitled to claim debt collection costs, including legal costs on a full indemnity basis under the contract.[119] It claims:
(a)$2,145 for legal fees to prepare the submissions; and
(b)the filing fee of $345.80.
[119]Clause 11.9(b).
I find that these are reasonable costs recoverable pursuant to clause 11 of the contract.

Under the QCAT Act

Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) provides that, subject to an enabling Act, each party must bear its own costs of the proceedings. The QBCC Act is the relevant enabling Act for these proceedings. Section 77(h) of the QBCC Act confers specific jurisdiction on this tribunal to award costs in building disputes.
The owner’s legal representative submitted that his client should be entitled to legal fees incurred since 14 March 2022 for preparation and hearing.
While the owner enjoyed some success in his claims, the nett outcome favours the builder. In the circumstances, I find it is appropriate not to make any order for costs under section 100 of the QCAT Act.

Outcome of the claims

The builder is entitled to payment of $40,327.80, being the Practical Completion stage payment of $44,959.80, adjusted by ($4,632) for the provisional sum for timber flooring.
The builder is entitled to interest at the contract rate of 10% on $40,327.80 from 24 October 2019 until the date payment is made.
The builder is entitled to be paid a total of $6,441.68:
(a)$1,911.80 ($1,738 plus GST) for the set-out survey;
(b)$1,172.38 ($1,065.80 plus GST) for the installation of stairs from the back of the bathroom on the upper level;
(c)$793.76 ($721.60 plus GST) for the installation of stairs from the laundry to the carport;
(d)$1,167.65 ($1,061.50 plus GST) for installation of a new window in the media room;
(e)$1,396.09 ($1,269.18 plus GST) for the second inspection by the building certifier.
The builder is entitled to costs of $2,490.80 under clause 11 of the contract.
The owner is entitled to a refund of $10,265.50 for electrical variations.
I will order the builder to rectify the defective work pursuant to section 77 of the Queensland Building and Construction Commission Act 1991 (Qld).
I will order the builder to install vents from exhaust fans and the range hood to the outside in instances where it is appropriate to do so pursuant to section 77 of the Queensland Building and Construction Commission Act 1991 (Qld).

Ceiling fan	4
Power points	11
Weather proof Power points	4
TV point	1
Satellite dish antenna	1
Air conditioning circuit	1
Phone points	1
Down lights	39
2 way switch	3
Smoke alarms	2
Cooktop circuit	1
15amp points for heater on porch	3
Repositioning meter box

Fan & light combinations	2
Ceiling fan	1
Power points	26
TV point	3
Air conditioning points	2
Phone points	1
Down lights	20
Kitchen oyster light	1
IXL	2
2 way switch	3
Smoke alarms	5
HWS circuit	1
Oven circuit	1
Porch wall light	1
Carport LED	1
Deck LED	2