Mitchamy Developments Pty Ltd v Adams

CITATION: Mitchamy Developments Pty Ltd v Adams & Anor [2010] QCAT 484

PARTIES:	Mitchamy Developments Pty Ltd
v
Mr Adams & Ms Adams-Atkinson

APPLICATION NUMBER:   BD062-06     

MATTER TYPE: Building matters

HEARING DATE:     Decision on the papers

HEARD AT:  Brisbane

DECISION OF: Thomas Bradley – Member

DELIVERED ON: 1 October 2010

DELIVERED AT:      Brisbane

ORDERS MADE:

The Tribunal declares that the respondents’ notice of termination dated 7 December 2005 was not valid or effective to terminate the domestic building contract between the applicant and the respondents dated 2 December 2004.

The Tribunal orders that paragraphs 6, 7 and the second sentence in paragraph 9 of the counterclaim in attachment “B” to the respondents’ Amended Defence filed on 8 February 2008 are struck out.

CATCHWORDS :  Domestic building contract – builder’s failure to reach Practical Completion by Date for Practical Completion – owners’ failure to pay progress claim on time or in full – owners’ notice of termination – whether builder in substantial breach of contract – whether owners entitled to give notice while in substantial breach

APPEARANCES and REPRESENTATION (if any):

Decision on the papers.

REASONS FOR DECISION

1. This is a decision on one of the issues arising in a dispute between the applicant Mitchamy Developments Pty Ltd and the respondents Michael Adams and Erica Adams-Atkinson.

Background facts

1. The applicant is a building contractor and the respondents are the owners of land at Twin Waters.  They were parties to a domestic building contract in the form of the Queensland Building Services Authority Major Works Contract. 

2. The work to be performed under the contract was the construction of a detached dwelling on the respondents’ land; and therefore was “domestic building work” for the purposes of section 8 of the Domestic Building Contracts Act 2000 and “reviewable domestic work” for the purposes of the Queensland Building Services Authority Act 1991 (the “QBSA Act”).The dispute between the applicant and the respondents relating to the performance of that work and the contract is a “domestic building dispute” within the meaning of the QBSA Act and the Tribunal has jurisdiction to determine the dispute pursuant to section 77 of the QBSA Act. That jurisdiction is original jurisdiction pursuant to section 10(1)(b) of the Queensland Civil and Administrative Tribunal Act 2009 (the “QCAT Act”).

3. The contract was dated 2 December 2004.  It provided for the applicant, as contractor, to build a house on the respondents’ land with a lump sum component of $693,520.00 and prime cost items of $149,395.  The building work commenced on 13 December 2004 with a Date for Practical Completion of the works on or about 15 August 2005.

4. The respondents paid a deposit of $34,676 (5% of the lump sum component) on 3 December 2004, before works commenced.  The applicant claimed and the respondents paid the first progress payment of $104,028 (15%) on 23 December 2004. 

5. In January 2005 the respondents obtained an approval of finance from the Bank of Queensland.  In a letter dated 10…