Mannix v Chris Neale Constructions Pty Ltd
[2011] QCATA 222
•22 August 2011
| CITATION: | Mannix v Chris Neale Constructions Pty Ltd [2011] QCATA 222 |
| PARTIES: | Mr Steven Mannix Mrs Rebecca Mannix |
| v | |
| Chris Neale Constructions Pty Ltd trading as Fantasy Homes |
APPLICATION NUMBER: APL105-11
| MATTER TYPE: | Appeals |
HEARING DATE: On the papers
HEARD AT: Brisbane
| DECISION OF: | Justice Alan Wilson, President Peta Stilgoe, Member |
DELIVERED ON: 22 August, 2011
DELIVERED AT: Brisbane
ORDERS MADE: Leave to appeal refused.
| CATCHWORDS: | APPEAL – LEAVE TO APPEAL – BUILDING DISPUTE – where builder in breach of contract – where Tribunal allowed further evidence to be filed after the hearing – whether owner permitted to produce fresh evidence – whether conduct amounted to repudiation – whether owner accepted repudiation or terminated contract – whether member erred in assessing cost of defective work – whether owner entitled to legal costs Queensland Civil and Administrative Tribunal Act2009, ss 102, 142(3)(b) Cachia v Grech [2009] NSWCA 232, cited Chambers v Jobling (1986) 7 NSWLR 1, cited Fox v Percy (2003) 214 CLR 118, cited Dearman v Dearman (1908) 7 CLR 549, cited Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17, cited Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, cited Kerr v Paku & Anor [2011] QCATA 157, cited McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, cited QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41, cited Robinson v Harman (1848) 1 Exch 850, cited |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Justice Alan Wilson
In this matter the Appeal Tribunal consisted of Ms Stilgoe, QCAT Member and me. I have had the benefit of reading her reasons in draft. I agree with her reasons, and her conclusions, and the order she proposes.
Ms Stilgoe
Mr and Mrs Mannix engaged Chris Neale Constructions Pty Ltd to build them a home. As often happens, Mr and Mrs Mannix did not pay the final payment and they have an extensive list of defects which, they say, means that the house will have to be demolished and rebuilt.
After a two-day hearing the learned QCAT Member who heard the matter found that Mr and Mrs Mannix should have paid the builder a final payment of $12,694.60. He also found that the builder was responsible for defects and costs totalling $36,711.74. He therefore ordered that the builder pay Mr and Mrs Mannix $24,017.14.
Mr and Mrs Mannix have sought leave to appeal the learned Member’s decision. Because their grounds for appeal involve questions of fact, or mixed fact and law, leave is necessary.[1]
[1] Queensland Civil and Administrative Tribunal Act2009, s 142(3)(b).
The question whether or not leave to appeal should be granted is usually addressed according to established principles: Is there a reasonably arguable case of error in the primary decision?[2] Is there a reasonable prospect that the applicant will obtain substantive relief?[3] Is leave necessary to correct a substantial injustice to the applicant caused by some error?[4] Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?[5]
[2] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[3] Cachia v Grech [2009] NSWCA 232 at 2.
[4] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[5]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 at 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 at 578, 580.
New evidence
It is apparent from the Member’s reasons that, on a number of issues, there was simply no evidence that enabled him to come to a decision.
Mr and Mrs Mannix have supplied the Appeal Tribunal with new evidence on a number of these issues. They acknowledge that new evidence should only be admitted in the appeal if: it could not have been obtained with reasonable diligence for use at the hearing; if admitted, it would probably have an important influence on the result; and, it is apparently credible. They say that, as the appeal is by way of rehearing rather than a ‘strict appeal’ (whatever that means) the threshold for satisfying that test should be low.
Much of the new evidence Mr and Mrs Mannix want to present is in response to the learned Member’s finding that there was insufficient evidence presented at the hearing. That does not mean that the evidence was not reasonably available to Mr and Mrs Mannix at the hearing; rather, it means that they did not appreciate that there was a gap in their material. That is not a ground for admitting fresh evidence.
It is also apparent that some of the new evidence is informed by the evidence already put before the learned Member, and the view that he took of that evidence. The Appeal Tribunal has often expressed the view that the Tribunal’s power to allow fresh evidence on appeal is not a mechanism by which parties can repair the holes in their original case.[6]
[6] See, eg, Kerr v Paku & Anor [2011] QCATA 157 at [7].
The learned Member directed that Mr and Mrs Mannix file quotes in relation to all of the defective items by 6 December 2010. They filed extra material on 22 November and 6 December 2010. As they took advantage of the additional opportunity to put material before the learned Member, there really is no excuse for now asking the Appeal Tribunal to consider even more evidence at such a late stage.
The Appeal Tribunal’s approach to findings of fact
The sole duty of the Appeal Tribunal is to determine whether there is an error in the primary decision. It is not its task to decide where the truth lay as between the competing versions given by the parties.[7]
[7] Fox v Percy (2003) 214 CLR 118 at 129 per Gleeson CJ, Gummow and Kirby JJ.
Findings of fact by a tribunal will not usually be disturbed on appeal if the facts inferred by the Tribunal, upon which the finding is based, are capable of supporting its conclusions, and there is evidence capable of supporting any inferences underlining it.[8]
[8]Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125-126.
An appellate tribunal may interfere, however, if the conclusion at first instance is ‘contrary to compelling inferences’ in the case.[9] As the High Court said in Fox v Percy:
In such circumstances, the appellate court is not relieved of its statutory function by the fact the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion.[10]
[9] Chambers v Jobling (1986) 7 NSWLR 1 at 10.
[10] Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow and Kirby JJ.
The termination of the contract
The learned Member found that Mr and Mrs Mannix did not exercise their right to terminate the contract pursuant to clause 28 of the contract.[11]
[11] Chris Neale Constructions Pty Ltd v Mannix [2011] QCAT 68 at [8].
Mr and Mrs Mannix say that the learned Member failed to give effect to their common law right to terminate the contract by accepting the builder’s repudiation. I accept that a common law right to terminate the contract exists, in addition to rights arising under clause 28.[12]
[12] Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 55-56.
The learned Member accepted that the builder was in breach of the contract but he characterised the correspondence as a termination, not an acceptance of repudiation. The relevant document is an email dated 6 May 2009 from solicitors SR Wallace & Wallace to the builder in these terms:[13]
We confirm that we act for Mr and Mrs Mannix. We confirm that the house has been left locked by you and not only have you not made the keys available to our clients but you have “warned” local locksmiths not to change the locks to the house. In those circumstances we will advise our clients to engage a locksmith from outside Mackay and will claim against your company the additional costs.
[13] Statement Steve & Rebecca Mannix 22.09.09 attachment 52.
That email was sent in response to an email from the builder advising that the final payment was overdue and that interest was accruing under the terms of the contract.
Mr and Mrs Mannix say that it is immaterial that the email from SR Wallace & Wallace did not expressly rely on the builder’s ‘repudiatory conduct’ or that Mr and Mrs Mannix may not have been aware of all of the matters now relied on as justifying the repudiation. However:
The relevant question therefore is whether the events … evidence an intention on the part of the appellant to repudiate or renounce the contract or more precisely whether such an intention is to be inferred from those events.[14]
[14] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431.
Mr and Mrs Mannix have referred to numerous breaches of contract as evidence of the builder’s intention to repudiate the contract. Those breaches may be evidence of the builder’s view of the need to comply strictly with the terms of the contract, but I do not regard them as being evidence of the builder’s intention to repudiate or renounce the contract. Indeed, the builder’s email of 6 May 2009 refers specifically to the terms of the contract and is evidence of its intention to be bound by the contract.
In contrast, by advising that they intended to take possession of the house before the final payment, Mr and Mrs Mannix evidenced an intention not to be bound by the contract. The builder put this proposition to SR Wallace & Wallace in an email sent late on 6 May 2009. There is an email string debating this point which finished on the afternoon of 7 May 2009 with SR Wallace & Wallace finally advising the builder that Mr and Mrs Mannix will be entering into possession and pursuing defective and incomplete works and unauthorised variations with the QBSA.
The evidence does not support the submission that Mr and Mrs Mannix accepted the builder’s repudiation of the contract. The learned Member was correct in his finding that Mr and Mrs Mannix terminated the contract.
The slab
The learned Member found that it was a term of the contract that the slab would be 350 mm above ground. In fact, the slab was constructed 330 mm above the top of the footings, and the builder backfilled against the house to a level of 190 mm.
The purpose of building up the slab was to provide flood protection. The builder gives a detailed and complex explanation of why it built the slab as it did and backfilled to the house.[15] The Member’s reasons noted that the builder had credited back $23,929.40 in the final progress claim for site works that were not required. There is no suggestion in any of the material that the slab, as built, would not provide the flood protection sought by Mr and Mrs Mannix.
[15]Email Chris Neale Constructions Pty Ltd to Mannix 26 January 2009, attachment 23 to the statement of Steve & Rebecca Mannix dated 22.09.09.
It is implicit in his decision that the learned Member did not consider it reasonable to demolish the slab, even though it did not conform to the contract requirements. The Member’s conclusions can be supported by the evidence, and I can find no compelling reason to come to a different view.
Cut-to-fill
Mr and Mrs Mannix concede that they agreed to allow cut and fill on the block but they say that they did not agree to a variation and the builder did not obtain any amended engineering plans for the footings or submit any amended plans to the certifier.
The learned Member found that that the builder had not satisfied the Tribunal that the footings had been constructed appropriately. The reasons noted that Mr and Mrs Mannix had a ‘real concern’ about the integrity of their footing, and that there needed to be an ongoing investigation.[16]
[16] At [18], page 11.
A ‘real concern’ is not the same thing as evidence that the footings are failing. Mr and Mrs Mannix did not provide any evidence to the Tribunal that justified their fears and they do not now allege that the footings are failing.
The Member considered that the issue could be handled by the Queensland Building Services Authority. Mr and Mrs Mannix have not provided any evidence that the Authority cannot deal with the issue if it becomes a problem. I see no reason to disturb the learned Member’s decision.
Damp proof course
The learned Member accepted that the damp proof course was blocked in some places and extended beyond the outer face of the brick wall. He did not accept that the appropriate method of rectification was to replace the damp proof course, and the termite barrier, at a cost of $31,522.00. Rather, he considered that the blockages could be removed and the damp course trimmed back for minimal cost. He also accepted the evidence of Ms Quick that the moisture levels in the house were within normal range. He found that there was no evidence to support the need to dry out the house and replace plasterboard at a cost of $46,819.50.
Mr and Mrs Mannix complain that the learned Member did not accept the qualifications of one of their witnesses, Mr Mustey. I read the learned Member’s comments in this regard as a comment on Mr Mustey’s ability to cost the rectification works, rather than his ability to give evidence about the need for the works.
Mr and Mrs Mannix have produced fresh evidence about the mould in their home. They say that the Appeal Tribunal should accept the new evidence because:
a) Ms Quick’s report called for further investigation. There was not enough time between the provision of Ms Quick’s report and the hearing to obtain a further report about mould contamination;
b) There was material before the learned Member that suggested significant health concerns; and
c) The damp proof course was defective and a breach of contract.
Mr and Mrs Mannix were aware of the contents of Ms Quick’s report. The evidence of Ms Quick was in short compass. She had an exchange with the learned Member[17] in which this point was raised by him. Mr and Mrs Mannix asked Ms Quick questions to clarify the point. They did not request an adjournment but were content to rely on the evidence of Mr Mustey and Ms Quick. They should not now be allowed to produce further evidence which could have been available at the hearing if they had turned their minds to it, simply because the learned Member did not accept their evidence at the hearing.
[17] Transcript: page 100, lines 28 to page 101 line 9.
Damages
Mr and Mrs Mannix remind the Appeal Tribunal of the general propositions that:
a) So far as money can do it, a party is to be placed in the same position with respect to damages as if the contract had been performed without breach;[18]
b) The measure of damages is the difference between the contract price and the cost of making the work conform to the contract provided that the works are necessary to produce conformity and are reasonable.[19]
[18] Robinson v Harman (1848) 1 Exch 850 at 855.
[19] Martin v Cahill [2008] QCCTB 37.
Mr and Mrs Mannix say that, because the builder substantially departed from the plans, and necessary rectification requires complete demolition and reconstruction of the house, the measure of damages should be the cost of demolition and rebuilding.
For reasons I have already addressed, the learned Member did not consider that demolition and rebuilding is necessary, and that finding was open to him on the evidence. Therefore, the measure of damages should not be the cost of demolishing and rebuilding the house.
Mr and Mrs Mannix argue, in the alternative, that the learned Member should have allowed the following amounts:
1.
Contract overpayment
6,1023.48
2.
Replacement of water meter
125.00
3.
Installation of water meter
91.20
4.
Replacement of locks
551.80
5.
Installation of security hardware
720.01
6.
* Sleepers to retain timber fence
523.40
7.
* Removal of excess fill
847.00
8.
Drying of house
25,000.00
9.
Replacement carpet
6,979.00
10.
Removal of plaster board and replacement of skirting and architrave
11,819.50
11.
Replacement of plasterboard
15,268.00
12.
Construction of driveway and path
14,828.00
13.
Installation of air conditioning units
2,783.00
14.
* Rectification of gables
3,811.50
15.
Installation of termite protection system
5,522.00
16.
Third coat of paint
8,756.00
17.
Rectification of brick ties
44,742.50
18.
Rectification of plumbing
620.70
19.
Removal of air conditioning units
5,390.00
20.
* Preparation of surfaces for installation of carpets
281.69
21.
Supply and installation of carpets
5,637.00
22.
* Installation of insulation
3,356.10
23.
* Rectification of garage entrance
291.50
24.
* Replacement of garage door
3,388.00
25.
Replacement tiles
3,693.49
26.
Replacement of defective tiles
15,944.50
27.
Removal of bathroom vanity
540.00
28.
* Internal doors
7315.00
29.
Plastering
4,500.00
30.
Realignment of roof peaks
8,827.50
31.
* Plumbing and stormwater pipes
6,800.31
32.
Legal costs
2,500.00
33.
* Cardno Ullman report
6,780.13
34.
Building inspection report
280.00
35.
Cleaning
1,177.20
Total
280,714.51
The learned Member has already allowed those items marked *: that is, items 6, 7, 14, 20, 22-24, 28, 31 and 33.
The claim for overpayment of the contract price arises from a recalculation prepared for the application for leave to appeal. Finality in litigation is highly desirable because any further action beyond the hearing can be costly and unnecessarily burdensome on the parties.[20] The parties had prepared numerous spreadsheets about costs prior to the hearing. The new claim for overpayment is based on assumptions from evidence the builder gave at the hearing. There is no basis for allowing a fresh claim at this late stage of the litigation, particularly as the assumptions underpinning the claim have not been tested.
[20] See Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Kirby and Gummow JJ.
The learned Member determined that he would not allow Mr and Mrs Mannix costs claimed relating to the water meter or the locks and security hardware because they wrongly terminated the contract and took possession of the house. As the learned Member’s finding has not been overturned on appeal, those costs are still unrecoverable.
I have already identified that the learned Member did not consider the cost of drying the house, replacing plasterboard and carpets as reasonable. For this reason, items 8 to 11 inclusive should not be allowed.
Item 12 relates to the driveway. The builder did not construct it and the learned Member reduced the builder’s claim by $13,200 accordingly. The cost to Mr and Mrs Mannix was available to the learned Member. He accepted a reduction of $13,200 rather than $14,828.00. Mr and Mrs Mannix have not provided any good reason for the Appeal Tribunal to form a different view.
The builder reduced his claim by $11,880 for the air conditioning. That reduction must take account of item 13, a claim for the installation of air conditioning.
The learned Member relied on a letter from J & B Pest Control dated 28 October 2010 in finding that the termite barrier had not been compromised by work required to rectify the slab.
Mr and Mrs Mannix say that the learned Member was in error in not finding that the termite barrier was not installed in accordance with the current requirements. They draw the Appeal Tribunal’s attention to evidence that was available to the learned Member during the hearing. He had the benefit of hearing from the parties and preferred the evidence from the installer of the termite barrier. I can find no compelling reason to come to a different view of the evidence and would, therefore, allow item 15.
As to item 16, the learned Member accepted that there were many minor paint defects but he found that there was no evidence that a third coat of paint had not been applied. The learned Member rejected the claim for a complete repaint and, in the absence of any other quote for painting work, he rejected the claim.
Mr and Mrs Mannix say that, during the hearing, the builder admitted that he did not apply three coats. They did not point to any particular part of the transcript to support that assertion and I note that, at the conclusion of day two of the hearing, they were calling for proof from the builder that three coasts had been applied.[21] The learned Member was not satisfied that the builder did not provide three coats. Even though they had the opportunity, Mr and Mrs Mannix did not submit a quote for partial repainting of the house. They have not given the Appeal Tribunal any reason to come to a different view.
[21] Transcript: page 178, lines 33-47.
Items 17 to 19 relate to a claim for rectification of the roof ties to achieve C2 wind classification. The learned Member did not accept a report provided on behalf of Mr and Mrs Mannix because it did not identify the author and did not identify the extent of the problem. The learned Member found that the problem did not justify the cost of rectification.
Mr and Mrs Mannix have now provided a report from a Mr Perkins to the effect that the roof ties do not achieve C2 classification. The latest report required destructive testing. Mr Perkins provided three reports to the Tribunal. Mr and Mrs Mannix chose not to have him undertake destructive testing before the hearing. They cannot now ask the Appeal Tribunal to consider evidence that could reasonably have been available to the learned Member.
The contract provided a PC item of $9,000 for floor coverings. Mr and Mrs Mannix say that they supplied the carpet for the house and there was no credit provided, therefore, they are entitled to a credit of $5,637.00 (item 21). The PC item is for floor covering, including tiles and the laying of tiles. The builder’s evidence is that the cost of tiling the kitchen was $9,000.00,[22] so that the allowance was spent. Mr and Mrs Mannix have not pointed to any contrary evidence. There is no reason to allow this claim on appeal.
[22] Transcript: page 119, lines 26-30.
The builder did not install floor wastes. Although this is a breach of contract, the builder gave uncontested evidence that floor wastes were not a requirement of the Building Code.
Mr and Mrs Mannix provided the Tribunal with a quote for the replacement of all tiles. The learned Member did not accept that full replacement was necessary. He allowed $3,444.50 for replacement of skirting and bathroom tiles based on a quote from Beaumont Tiles provided in compliance with directions issued after the hearing. The learned Member’s finding can be supported by the evidence, to the extent there was evidence, and there is no reason for the Appeal Tribunal to come to a different view. That deals with claims 25 to 27 inclusive.
On 22 November 2010 Mr and Mrs Mannix provided a quote for five items of plasterwork in the sum of $4,500.00. The learned Member determined that Mr and Mrs Mannix were entitled to compensation for three of those items. He did not allow for the cost of repairing inspection holes or to repair the plasterboard after the bathroom tiles had been removed. As the learned Member did not allow for the replacement of the tiles, his refusal to allow for consequential damage to the plasterboard is reasonable. There is no detail of the location or purpose of the inspection holes. The learned Member’s decision in this regard is also reasonable.
Because the plastering quote did not provide a breakdown which would have enabled the learned Member to fix a reasonable cost, his decision not to allow any amount for this claim is reasonable.
The realignment of the roof peaks was not an issue raised at the hearing. The learned Member noted that the house had been inspected by many people prior to this date and this defect had not come to the attention of any expert earlier. The learned Member was right to reject a claim that arose after the hearing, was not referred to by any of the experts, and the evidence of which had not been tested.
The learned Member rejected the claim for legal costs because they were not referrable to representation before the Tribunal. An examination of the narrative of the bill shows this to be true. Mr and Mrs Mannix have not identified any reason why they should be awarded costs pursuant to either s 77(2)(h) of the Queensland Building Services Authority Act1991 or s 102 of the QCAT Act. The learned Member had good reason to reject the claim for costs and I see no reason to come to a different view.
The learned Member did not allow the cost of the building inspection report. Mr Ingledew provided a pre-purchase inspection report. As it was not specifically connected to the conduct of the dispute, the learned Member’s decision in this regard is reasonable.
Mr and Mrs Mannix also claim as yet unspecified damages for the following:
1.
Sealing of slab
2.
Mould treatment
3.
Installation of floor wastes
4.
Installation of metal roof battens
5.
Medical costs
6.
Damages for stress, disappointment and inconvenience
7.
Rent
It is now nine months since the conclusion of the hearing, two years since the commencement of the dispute and over two years since Mr and Mrs Mannix took possession of the house. If damages cannot be quantified in that time, there is no good reason for the Tribunal to give them any consideration.
Mr and Mrs Mannix also want the Appeal Tribunal to refer certain matters to the Queensland Building Service Authority for further investigation. Section 77(2)(g) of the QBSA Act allows the Tribunal to order the rectification of defective work. It does not allow the Tribunal to require the Authority to carry out investigations on apparently defective work. Mr and Mrs Mannix have their rights under s 72 of the QBSA Act. I see no reason to interfere with the statutory regime.
There is no question of general importance that should be determined by the Appeal Tribunal; there is no reasonably arguable case that the learned Adjudicator was in error; there is no reasonable prospect of substantive relief on appeal; and there is no evidence that a substantial injustice will result if leave is not granted. Leave to appeal should be refused.
Mannix v Chris Neale Constructions Pty Ltd [2011] QCATA 222
0
4
2