Jakara Pools v Quinlan
[2024] QCAT 50
•1 February 2024
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Jakara Pools v Quinlan [2024] QCAT 50
PARTIES:
JAKARA POOLS PTY LTD (applicant)
v
SCOTT QUINLAN (respondent)
APPLICATION NO/S:
BDL303-20
MATTER TYPE:
Building matters
DELIVERED ON:
1 February 2024
HEARING DATE:
26 May 2022
HEARD AT:
Brisbane
DECISION OF:
Member Holzberger
ORDERS:
1. Scott Quinlan must pay Jakara Pools Pty Ltd the sum of $6,285.00 by 4:00pm on 15 February 2024.
2. The Application and Counterapplication are otherwise dismissed.
CATCHWORDS:
CONTRACTS – BUILDING where builder claims Stage payments – Home Owner claims damages for defects – whether contract lawfully terminated – whether builder entitled to extension of time
Queensland Building and Construction Commission Act1991 (Qld)
Queensland Building and Construction Commission Regulations 2018 (Qld)
APPEARANCES & REPRESENTATION:
Applicant:
Brett Haling, Director
Respondent:
Self-represented
REASONS FOR DECISION
On 14 July 2017 Scott Quinlan entered into a written contract (‘the contract') with Jakara Pool Pty Ltd (‘Jakara’) for the construction of a swimming pool at Mr Quinlan's property at Indooroopilly (‘the property’).
The contract was in the form of a Master Builder’s Pool Building Contract - level 2 and was signed on Jakara’s behalf by its director Brett Haling who represented the company at the hearing. All relevant communications and dealings from negotiations to completion or termination of the contract were between Mr Quinlan and Mr Haling.
The contract price was $92,240. The construction period was 84 days from the date of commencement.
Mr Quinlan had entered into a separate contract for the construction of a residence on the property with Davenport Homes. It was understood by Mr Quinlan and Jakara that both the pool and home would be constructed simultaneously.
Jakara claimed the pool reached practical completion on or about the 8th of June 2018. Mr Quinlan disputes this.
On 23 May 2018 Mr Quinlan's lawyers sent, by e-mail to Jakara, a letter alleging breaches of the contract and requiring the works to remedy the breaches be completed by 5:00 PM on 8 June 2018, failing which he might terminate the contract.
On 13 June 2018 Mr Quinlan's lawyers sent, by e-mail to Jakara, a letter purporting to terminate the contract for failing to complete the necessary works.
On 10 July 2018 Jakara's lawyers wrote to Mr Quinlan's lawyers stating that Mr Quinlan had repudiated the contract and was demanding payment of damages, including but not limited to two outstanding progress claims.
Jakara originally commenced these proceedings as an application for a Minor Civil Dispute. Those proceedings were transferred to the building list on 5 January 2021.
Jakara’s claim was for some of $17,776.48 for payment of unpaid invoices in the sum of $9,324.00, interest $2,356.83 and costs of $6,095.65.
Mr Quinlan's response to the application sought to claim relief from payment of the amount claimed. He counterclaimed for the cost of rectification work. Later, by a further counterclaim, his claims were increased to $21,135.55.
By the time the proceedings were heard, as a result of written submissions filed on Mr Quinlan’s behalf on 7 July 2020, I understand the counterapplication particulars to be:
(a)liquidated damages - $5,700
(b)incomplete or defective works - $11,013.40
(c)future rectification works - $4,112.50
(d)interest and costs - $309.65
The matter was heard in Brisbane on 26 May 2022 and the decision reserved.
The Contract
Between 27 March 2017 and 14 July 2017 Mr Haling and Mr Quinlan had a number of discussions in relation to the proposed pool. Mr. Haling provided 3 quotations.[1] The drawing plan specifications he had referenced to in preparing the quotation are not in evidence.
[1]Statement of Brett Haling 27 May 2021, BH-8, BH-8A, and BH-8B.
No drawings, plans, or specifications are attached to the contract and so far as I can see, they are not referenced in the contract. As a consequence, the contract is of little use in determining the scope of works.
Mr Haling and Mr Quinlan met on 14 July 2017 to sign the contract. Mr Haling says that they went through it together “line by line, page by page.”[2]
[2]Statement of Brett Haling 27 May 2021 paragraph 5.
Mr Haling says at that meeting they discussed “access issues” caused by the construction of the residence at the same time and agreed to work through those difficulties when they arose.[3] He says it was agreed that it would be “unfair” in the circumstances to charge delay costs or liquidated damages and that the crossing out of item 17 and 18 in the contract schedule are evidence of this. Mr Quinlan denies any such agreement.
[3]Ibid, paragraph 6.
In each of items 17 and 18 space is provided to insert a dollar amount for delay costs rate and liquidated damages rate respectively. A diagonal line has been drawn across each of those boxes provided for inserting that dollar amount. This does not in my view have an effect of showing an intention to delete the provisions of the contract relating to lay costs and liquidated damages.
Item 17 specifies that if no amount is selected the liquidated damages rate will be $25 per day. Clause 24.1 of the contract specifies that if no rate for delay costs is inserted in item 18 the rate will be the reasonable costs incurred by the builder as a consequence of the delay.
Had it been the intention of both parties to delete clauses 18 and 24 of the contract it would have been easy enough to do so by ruling through the provisions or preferably including a special condition in Part J of the appendix to the contract to that effect.
I find that clauses 18 and 24 have not been modified or excluded from the contract.
Commencement and Practical Completion
Mr Quinlan submits that the commencement date under the contract is 17 July 2017 and accordingly the date for practical completion is 9 October 2017. Assuming the commencement date is correct I agree with his calculation of the practical completion date.
Mr Haling disagrees:
This is false because the builder had not completed relevant block work such that work could not commence until 21st August 2017.[4]
[4]Second Statement of Brett Haling paragraph 11.
He also lists a number of delays where no work could be undertaken by him during the course of the build, which would entitle him to extensions of time. These include scaffolding erected around the residence, failure to install a temporary fence, driveway construction, tile selection, landscaping machinery, turf installation, changes to plans and 36 days of rain.
The length of those delays is quantifiable in some but not all cases.
No date for commencement is specified in item nine of the schedule to the contract. Clause 8 provides that in that case, the date for commencement is within 10 business days of the builder receiving a number of things from the owner including building approval, a signed copy of engineering specifications, and confirmation.
There is no evidence of the date on which these things (if they are applicable to this contract) were provided by either party.
Clause 8.2 requires the builder to give the owner written notice of commencement specifying the date of commencement and the date for practical completion within 10 days of starting the work. This was not done.
Clause 15 of the contract permits the builder to claim for extensions for a number of specified causes, including “any other cause not reasonably foreseeable at the date of formation of the contract and beyond the reasonable control of the contractor.” In my view all of the delays mentioned by Mr Haling would, if factual, permit a claim for extension.
Any such claim is required to be in writing signed by the contractor setting out the cause of the delay and its consequences within 10 business days of the date the contactor became aware or ought to have become aware of the cause and extent of the delay. Mr Haling did not make any claim for any of the delays.
Clause 15 permits the owner time to assess the claim and either accept or reject the claim in a timely manner. Similarly, on receipt of the notice under clause 8, if an owner disputes the contractor’s date of commencement or date for practical completion, any dispute can be resolved or at least flagged at the time, rather than, as is the case here, five years later.
I accept Mr Quinlan's evidence that he gave possession, albeit shared on 17 July 2017. It is likely that Jakara did experience some delays during the construction period that would have supported extensions but on the evidence, it could not calculate which days would be allowed and the period of any extension. Any entitlement for an extension requires Jakara to comply with the provisions of clause 15 of the contract. It has not done so, so no allowance can be made for those delays.
I find that the date for commencement was 17 July 2017 and the date for practical completion 9 October 2017.
Jakara’s Claim for Unpaid Invoices
Part Capital D of the appendix to the contract sets out the six stages at which claims for payment may be made in the amount of that claim. The stages included “stage four - completion of coping or tiling” in the sum of $9,224 and “stage six - practical completion” in the sum of $1,000.
Jakara is seeking orders for payment of two invoices it issued to Mr. Quinlan. The first, #2441, dated 4 June 2018, is for a stage four claim, less an allowance of “coping supply allowance”, of $900. The invoice claims the sum of $8,324. The second invoice is #2445 for a stage six claim, dated 8 June 2018, and is for $1,000.
It is not in dispute that the invoices relate to works completed prior to Mr Quinlan's purported termination of the contract although Mr Quinlan disputes whether the works were in fact completed.
There is no evidence of the payments made by Mr Quinlan to Jakara pursuant to the contract. Between stages four and six in the contract Jakara is entitled to claim a payment of $13,836 for “completion of internal lining (less stage six).” Potentially the payment or otherwise would be relevant to both the claim and the counterclaim but in the absence of any evidence in relation to it, I have not taken it into account.
It is Mr Haling's evidence that by 8 June 2018 the works had been brought to practical completion, the pool had been filled, and the water treated (albeit, according to Mr Quinlan, poorly).
Practical completion is defined in clause 1 of the contract as follows:
Practical completion means that stage of the works when:
(a)the works are completed in compliance with this 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 which will not affect occupation; and
(b)If the owner claims there are minor defects or minor omissions, the contractor gives the owner a defects document for minor defects or minor omissions.
Clause 17.1 of the contract requires that the contractor give written notice not less than five business days before the anticipated date the works will reach practical completion. The notice must specify the anticipated date of practical completion and a time on that date for a final inspection of the works.
Clause 17.5 requires the contractor to give a signed defects document listing all minor defects or minor omissions.
It is not in dispute that Jakara did not give notice of practical completion, nor did it arrange to attend the final inspection and did not prepare a defect document. Mr Haling says that on 11 June 2018 he endeavoured to telephone Mr Quinlan to arrange a time for handover and to discuss any issues, but Mr Quinlan refused.[5]
[5]Second Statement of Brett Haling paragraph 36.
Mr Quinlan says that Jakara did not complete the contract works and there were defects in the work that had been done namely:
(a)failing to tile around the trough and outside of the pool;
(b)poor installation of waterline tiles;
(c)failing to provide adequate pool chemicals;
(d)failing to hand over warranties on pool equipment;
(e)rendering and painting the exterior of the pool and trough;
(f)fixing the in-pool cleaning drain;
(g)inserting steel capping over the core drilled holes for chairs in the pool; and
(h)installing a pool bar.
In relation to Jakara stage four, the only relevant omissions or defects are failing to tile around the trough and outside the pool and the poor installation of waterline tiles. Tiling rectification work was carried out at a cost of $4,000 and it forms part of the claim against Jakara.
In the context of an ongoing contract, those defects, if proven to be defects, would not prevent Jakara making stage four claim. The stage four invoice was payable pursuant to Clause 11.7 of the contract within five business days that is 11 June 2018. It was not. That amount claimed is payable to Jakara although Mr Quinlan is entitled to offset the value of proven defects against it.
It does not appear to be in dispute that on 8 June the pool was completed and filled with water ready for use, albeit subject to alleged defects. In those circumstances I find that the pool was practically completed on 8 June 2018.
Termination
The Queensland Building Construction Commission have determined that Mr Quinlan's purported termination was unlawful. That decision is not, of course, binding on the Tribunal, or in my view particularly relevant to the Tribunal’s determination.
Clause 20.1 of the contract permits the owner to give the contractor written notice of the owner's intention to terminate the contract in a number of instances. The notice must describe the substantial breach and give a period of 10 business days for it to be remedied. Clause 20 permits the owner to terminate if the breach is not remedied within that period.
On 23 May 2018 Mr Quinlan’s solicitor forwarded by e-mail to Jakara a letter which, among other things, asserted that Jakara was in substantial breach of the contract by failing to complete the works within the construction period and required Jakara to rectify the breach by completing the works by 5:00 PM on 8 June 2018.
On 13 June 2018 Mr Quinlan’s solicitors forwarded by e-mail to Jakara a letter asserting that the breach had not been remedied because the works had not been practically completed or were defective and purported to terminate the contract.
I am satisfied that Jakara’s failure to complete the works within the construction period is, in the circumstances, a substantial breach of the contract. I am also satisfied that both notices forwarded by Mr Quinlan’s solicitors satisfied the requirements of clause 20 of the contract and that the contract permitted service by e-mail.
Clause 20.3, however, provides that an owner may not terminate the contract if the owner is in substantial breach. I have found that payment of Jakara’s stage four claim was due on 11 June 2018 and had not been paid. Mr Quinlan was at the time of the purported termination prohibited from doing so. Accordingly, the termination is unlawful.
On 10 July 2018 Jakara’s solicitors e-mailed the letter to Mr Quinlan’s solicitors asserting that the breach letter was invalid and had not been served properly.
Our client’s position is that your client:
(a) has repudiated the contract; and
(b) must pay damages to our client including, but not limited to, the payment of our clients last two (2) progress claims under the contract.
Wrongful repudiation of a contract does not result in its automatic termination. Rather, the other party is put to an election either to terminate the contract on the basis of the wrongful repudiation or affirm the contract and insist on its performance.
Jakara’s solicitors do not appear to have made an election. In my view the damages claim is equally consistent with either option. The contract remains on foot till the election is made.
It is my view that Jakara’s counterapplication in these proceedings terminated the contract.
Liquidated Damages
Clearly there were substantial delays in construction of the pool. The contract construction period was 84 days. From the date of commencement to practical completion took some 292 days. While it is likely that Jakara could have obtained extensions of time, its failure to do so in a timely fashion precludes it from applying for an extension in these proceedings. Five years later it is not possible, on the evidence, to apportion responsibility. It is clear from the evidence, however, that substantial delays were caused by Jakara.
No doubt Mr Quinlan has suffered damages as a result. He has not particularised the actual damage suffered, but rather relies on clause 18 of the contract, where the parties agree that liquidated damages apply for each day of delay until practical completion or the date of termination, whichever is earlier, at the rate of $25 per day.
Clause 18.2 of the contract provides that an owner will not be entitled to liquidated damages or general damages unless he gives the contractor a written claim for liquidated damages within 28 days after date of practical completion.
In written submissions Mr Quinlan’s solicitors rely on correspondence from them to Jakara on 23 May 2018,[6] which is in effect the notice to remedy breach.
[6]Statement of Scott Quinlan 7 July 2021 SQ-9.
Included in the letter is the following:
Mr Quinlan is presently entitled to liquidated damages of $5,700 and he reserves his rights and entitlements in respect of that. Of prime concern is ensuring that the prompt completion of the works. To that end Mr Quinlan will not claim liquidated damages if the works are promptly completed in accordance with the time frame set out in this letter.
The time frame allowed for the required rectification of the breach was 5:00 PM on 8 June 2018.
The letter continued:
Mr Quinlan reserves all of his rights and entitlements should you fail to remedy this, including to:
- claim liquidated damages for the delay;
- terminate the contract; and
- make a complaint to the Queensland Building and Construction Commission.
The letter was forwarded prior to practical completion on 8 June 2018 and the purported termination on 13 June 2018. That in itself does not invalidate it for the purposes of clause 18. The contract does not have to be terminated for a claim to be made.
The effect of the letter is to advise Jakara of Mr Quinlan’s entitlement to liquidated damages, offer that his right will be waived if Jakara rectifies the breach in the specified timeframe and reserve his right to claim liquidated damages if Jakara does not.
The letter from Mr Quinlan’s solicitors dated 13 June 2018 purports to terminate the contract, without prejudice to any rights or remedies, but does not include a claim for liquidated damages.
There is no evidence of any other correspondence in which the claim is made. Neither the letter of 23 May 2018 nor the letter of 13 June 2018 satisfy the requirements of clause 18.2.
In those circumstances Mr Quinlan's claim for liquidated damages must fail for failure to notify his claim.
Defects
Let me say at the outset the lack of plans and specifications or scope of works and the lack of written variations or supporting documents has not assisted any evaluation of the various items. It appears to me that Mr Haling and Mr Quinlan had formed very different ideas of what the contract involved.
Mr. Quinlan’s list of defects is contained in paragraph 43 of these reasons. I will deal with them in order.
Failing to tile around the trough and outside of the pool
Poor installation of water line tiles
Brett Wilkins, one of the tilers engaged by Mr Quinlan, provided a statement filed on 14 July 2021. In it he describes the works undertaken as follows:
(a)The water line tiles and the Infinity edge tiles which were not laid straight require us to remove and replace them;
(b)The rendering and laying of tiles in the bottom trough and the laying of vertical edge tiles was not completed and was exposed concrete.
Mr. Quinlan's evidence is that both the water line tiles and Infinity edge tiles were cracked and that the contract required the bottom trough to be rendered and tiled.
Mr Haling says that tiling the outside face of the rear wall was not included in his quote or part of the contract. He makes no comment on the rectification of the waterline tiles and Infinity edge tiles.
Mr Haling says he did not agree to tile the outside face of the rear wall and this is supported in his last quote, and I prefer his evidence on this point. I accept that the tiles which were laid by Jakara were not straight and did need to be replaced. Unfortunately, however, the claim has not been particularised, and I cannot reasonably determine the cost of removing and replacing them from the other works undertaken. Mr Quinlan bears the onus of proof and has failed to discharge it, and I disallow his claim for $4,000.
Failing to provide adequate pool chemicals
I accept Mr Quinlan's evidence that the pool had turned green within a week and his retention of Poolwerx to balance the pool is reasonable. I allow his claim for $192.40.
Rendering
Mr Quinlan says that Mr Haling, at the signing of the contract on 14 July 2017, agreed to render the side of the pool to match with the rest of the house.[7] Mr. Haling denies it, saying there was no mention of it in his quote and the contract.
[7]Statement of Scott Quinlan paragraph 39.
While I do not find the quote or the contract definitive or, in the latter case, even helpful in this regard, Mr Quinlan bears the onus of proof and in the absence of corroboration of some description, he failed to provide such. The claim is disallowed.
Water tanks inspection and plumbing works leak in the conduit
It is not in dispute that the water tanks were defective and have been rectified.
I do not understand Mr Haling to take issue with the replacement of undersized overflow pipes on the balance tanks and with respect to the repair of the leaky conduit.
I accept that the repairs were reasonable and allow the sum of $1,251, being payment made by Mr Quinlan, to Purify Plumbing for those items.
Holes in the pool
There are 5 drilled holes on the floor of the pool. Mr Quinlan's evidence is that at the signing of the contract and again in May 2018, he requested Jakara drill holes and insert a stainless-steel cap in each so that he could insert removable chairs in them. Mr Haling agreed to drill the holes and did but is silent on the installation of stainless-steel caps in them. On the evidence I have some difficulty understanding how that is supposed to work or what it looks like.
The claim is not supported by a quote or invoice setting out what is actually involved here in the material and labour costs of so doing. Rather, Mr Quinlan says that the process will involve emptying the pool, inserting the caps, and refilling it.
He claims that the cost of emptying and refilling the pool is estimated at $2,612.50. I am not satisfied that this is necessary. No rectification work has been carried out and no particulars of what is involved have been given. The claim is disallowed.
In-floor cleaning drain
Mr Quinlan says that the in-floor cleaning system does not rotate through the cycle, but rather is stuck on one cleaning group:
Possible cause [sic] of this could be the amount of grout, dust or dirt put into the pool after it was filled up due to coping tiles being completed once the pool was filled.[8]
[8]Ibid, paragraph 58.
Mr Haling says that he tested the in-floor cleaning system after the pool was filled and that it worked properly.
There is no evidence that supports Mr Quinlan's theory nor a quote for rectification of it. I do not accept that the Queensland Building and Construction Commission’s estimate is sufficient to justify the claim and I disallow it.
Pool bar
Mr Quinlan says that Jakara agreed to install a concrete pool bar as part of the contract works.
There does not appear to be anything in the contract or quotes and no other documentation which supports the claim, but it is apparent from the evidence that Mr Haling was aware of it and altered the works to permit its installation.
There is corroborating evidence from David Crivello, director of Davenport Homes, which built the residence.
Mr Crivello recommended Jakara to Mr Quinlan. He verifies that in conversations with Mr Haling in August and September of 2017 he was made aware that Mr Haling had agreed to construct the pool bar.[9]
[9]Statement of David Crivello 7 July 2021 paragraph 11.
Mr Crivello was not required for cross examination.
On that basis, I prefer the evidence of Mr Quinlan on this point. I am satisfied that Jakara did not supply and install the pool bar and that Mr Quinlan has acted reasonably in having the bar supplied and installed by Mixed Element. I allow the sum of $3,820.
Jakara’s claim
On the basis of my earlier finding that Jakara brought the works to practical completion on 8 June 2018, albeit with a number of minor defects and minor omissions, it is entitled to be paid the balance of the contract price, namely the stage four claim and the practical completion claim after the cost of rectification of those defects and omissions is set off.
Debt collection costs
Clause 11.9(b) provides that in the event of the owner failing to make a payment when due, a contractor is entitled to recover from the owner debt collection and legal costs of a recovery or attempted recovery on an indemnity basis.
Jakara’s application claims the following:
- All Building Law invoices - $2,722.01
- Challenge Commercial Collection invoices - $520
- Henley Recovery Group invoices - $2,432.05
Attached to the application are invoices from All Building Law, dated 1 February 2019 in the sum of $1,949, and 21 July 2018 in the sum of $722.20. In each, the description of the work undertaken is “professional fees”. Also attached to the application is a copy of an invoice dated 31 August 2 [sic] For $520, which refers to Mr Quinlan’s filing fees, service costs and QCAT claim and agents’ fees and a letter from Henley Recoveries Group to the Holland Park Magistrates Court – Registry Office apparently documenting enclosing documents for case 0050223/20.
There is no further evidence or even comment in relation to them in Mr Haling’s two witness statements or in his oral evidence.
Clause 11.9(b) is restricted to the recovery costs. It would not cover, in my view, giving advice about or responding to the purported termination of the contract or some of the costs of responding to Mr Quinlan’s counter applications.
The All Building Invoices do not particularise any of the work done. I can only identify that it relates to Scott Quinlan. While I accept that some part of the invoices, probably the major part of the invoices, relates to Jakara’s claim, it is insufficient to allow recovery particularly on an indemnity basis.
There is no evidence at all of the charges from Henley Recovery Group. The invoice from Challenge Commercial Collections is not, in my view, sufficiently clear to establish the items charged as debt recovery costs. I disallow Jakara’s recovery cost claim.
Interest
Mr Quinlan claims interest pursuant to Section 77 of the Queensland Building and Construction Commission Act1991 (Qld). That section empowers the Tribunal to award interest on damages as prescribed in the Queensland Building and Construction Commission Regulations 2018 (Qld) (‘the Regulation’).
Section 54(2) of the Regulation provides for interest “on and from the day after the day the amount became payable” that is, the day after the Tribunal’s decision. It does not provide the Tribunal to award interest from the date the claim arose.
Jakara’s claim for interest is made under the contract. Unlike Section 77, interest is payable from the date payment was due under the contract. In the circumstances, I have calculated interest to the amount of the claims after deduction of the offsets allowed in the sum of $2,225.
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