Mitchamy Developments Pty Ltd v Morrison & Walsh
[2010] QCATA 51
•17 September 2010
| CITATION: | Mitchamy Developments Pty Ltd v Morrison & Walsh [2010] QCATA 51 |
| PARTIES: | Mitchamy Developments Pty Ltd (Applicants/Appellants) |
| v | |
| Suzanne WALSH & Dennis MORRISON (Respondents) |
APPLICATION NUMBER: APL024-10
| MATTER TYPE: | Appeal |
HEARING DATE: 4 June 2010
HEARD AT: Brisbane
| DECISION OF: | Justice Alan Wilson, President |
DELIVERED ON: 17 September 2010
DELIVERED AT: Brisbane
ORDERS MADE: Application for leave to appeal refused
| CATCHWORDS : | DOMESTIC BUILDING CONTRACT – VARIATION – TERMINATION – LEAVE TO APPEAL – where applicant and respondent entered into domestic building contract – where builder sought payment for variations – where builder terminated contract for failure by owners to pay for variations – where owners sought compensation for defective workmanship and unlawful termination – where Member found termination lawful and dismissed owners’ claims – where Member also accepted expert’s report suggesting some defective work requiring rectification – where Member ordered owners to pay only part of claim to builders with reduction for rectification – where builders allege Member erred in not awarding them their full claim and on accepting expert’s report – whether Member erred in awarding only part of claim or accepting expert’s report – whether error of law or mixed fact and law Queensland Civil and Administrative Tribunal Act 2009, s 142 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Gibson, a Director of the applicant/appellant (by telephone) |
| RESPONDENT: | Respondents in person (by telephone) |
REASONS FOR DECISION
This proceeding arises out the construction of a dwelling house at Buderim in 2006/7. The builder, Mitchamy Developments Pty Ltd, brought proceedings against the home owners Ms Walsh and Mr Morrison in the former Commercial and Consumer Tribunal which were ultimately heard and determined in QCAT after a two day hearing on 8 and 9 February 2010.
On 10 February 2010 the learned member who heard the matter delivered his reasons, and decision, under which it was ordered that Ms Walsh and Mr Morrison pay Mitchamy Developments the sum of $4348.00, and that the builder deliver to them the termite, engineering, frame, truss and window certificates relating to the building.
Mitchamy Developments seeks leave to appeal that decision. By order of this Appeal Tribunal the parties were directed to file and exchange written submissions, which they did. Then, a hearing was conducted on 4 June 2010 at which both parties were offered the opportunity to supplement their written submissions. Mr Gibson, the Director of Mitchamy Developments who appeared on its behalf, did so, but only very shortly.
Before the learned member it was agreed that the parties had entered into a ‘major works contract’ on 8 October 2006 under which Mitchamy Developments agreed to build a house for the respondents for a price of $297,970.00. The parties also agreed that the actual price for building the home shown in the plans the owners provided was $277,970.00, and that the additional $20,000.00 was to cover contingencies or unforseen items.
The contract provided for payments in stages, according to a schedule. Some of these stages were, the parties agreed, completed and four payments for a total of $163,882.00 were made. Mr Gibson also claimed that he had delivered four variation documents for additional costs for a full block base; changes to a sliding door and screen; alterations to the garage roof; and, costs of water proofing and termite protection.
On 12 February 2007 Mitchamy Developments gave a Notice of Default to the respondents alleging they had failed to pay for the variations, the first of which was said to involve an additional charge of $10,373.00. When the respondents did not ‘remedy’ the alleged breach Mitchamy Developments terminated the contract on 27 March 2007.
Mitchamy Developments asserted, before the learned member, that the respondent’s failure to pay for the variations entitled it to terminate the contract and to recover the variation claims and lost profits of $10,797.00. The respondents asserted that the contract was wrongly terminated and they are entitled to recover damages including the cost of completing the works and rectifying what they said was Mitchamy Developments defective work. They assessed those damages as $48,210.17.
In his decision the learned member assessed the builders claim for the variations at a total of $21,232.00. He accepted that three of the variation invoices had been properly signed by the respondents (as the contract required) and were payable by them. He also found that their wrongful failure to pay variation invoices totalling $8,358.00 meant Mitchamy Developments’ termination of the contract was lawful. He refused, however, to accept the builder’s claim for lost profits, said to be calculated at $10,797.00 and being the unpaid portion of the contract price less subcontractors’ costs to complete the job.
This refusal was based on Mitchamy Developments failure to tender any evidence about other work which was or wasn’t undertaken after the subject contract was terminated, and any profits arising from that work. The learned member said: ‘he may have made a greater profit on this new job than he would have on the contract’.
The respondents counterclaim of $48,210.17 was, the learned member said, based on two components: the rectification of defective workmanship by one of Mitchamy Developments subcontractors, and damages for breach of contract namely the cost to complete the job. In accordance with his decision that the builder had been entitled to terminate the contract, he rejected the counterclaim for damages.
The learned member was, however, persuaded by expert evidence that some block work had not been properly carried out and its rectification required expenditure of about $4,000.00.
Mitchamy Developments grounds of appeal are, with respect, difficult to understand. It appears to be contending that it should have recovered its full claims. In written submissions it is said that:
· The contract shows that the owner is responsible for any additional excavations and foundations, to be charged as a provisional sum of $50.00 per cubic metre. Mitchamy Developments charge was much lower.
· The claim for allegedly defective work was wrongly allowed because, under the contract, the works to which it was referred was included in the third stage for which the owners paid, without any notice of a dispute from the owners.
In oral submissions on 4 June 2010 Mr Gibson also asserted that he suffered a full loss of profits because he had no other work available at the time.
As I said, it is difficult to understand these allegations. If the external block walls were included in the third stage and the payment for it had been made earlier (as the contract, and the learned members reasons, confirm), that is not a defence to the claim that the work did not require rectification. Secondly, the learned member correctly found that any variations, to be valid, should have been signed by the owners and that the only variation relating to the block base was the first variation dated 27 October 2006, for $5,500.00. It was also found that signed variation invoices had not been produced to support the balance of the variations claimed. There is nothing to suggest any error, in these factual findings, by the learned member.
The second matter – the builders claim for lost profits – involved a finding of fact by the learned member that the builder had under-priced the job and would not have made any profit at all, based upon the evidence of an independent expert witness. The learned member explained why he accepted that evidence – because the quantity surveyor and cost consultant called by the owners, Mr Carey, advanced the opinion that the cost to finish the job was much greater than the unpaid portion of the contract price. There is nothing to suggest the learned member was wrong to accept Mr Carey as an independent expert, and to make findings in accordance with the evidence he gave.
In addition, of course, the learned member found that Mitchamy Developments had failed to tender any evidence showing actual lost profits, e.g. by reference to any other work. It is, with respect, unclear how that was relevant in the present case but, for the reasons just discussed, it does not matter.
Finally there is the question of the rate at which Mitchamy Developments charged per cubic metre for fill. Again, it is unclear on its case how or why it should now be entitled to charge $50.00 per square metre when it had previously chosen to charge $11.00. The submission smacks of an attempt to extract some further money from the building work which has no basis in the contract, or in law.
Under s 142 of the Queensland Civil and Administrative Tribunal Act 2009 a party seeking to appeal on a question of fact, or a question of mixed fact or law, can only do so if it obtains this Appeal Tribunal’s leave. It is apparent that Mitchamy Developments’ application involves mixed questions of law and fact, and it requires leave.
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?[1] Is there a reasonable prospect that the applicant will obtain substantive relief?[2] Is leave necessary to correct a substantial injustice to the applicant caused by some error?[3] 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?[4]
[1]QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[2]Cachia v Grech [2009] NSWCA 232 at [13].
[3]QUYD Pty Ltd v Marvass Pty Ltd (supra).
[4]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.
Nothing in the applicant’s submissions suggests any error of law or mistake of fact on the part of the learned member. Indeed, the reasons for his decision include a careful and comprehensive account of each of the complex (often, it appears, unnecessarily so) issues the parties raised at the hearing, a proper traverse of each of them, and clear, logical and sustainable reasons for each necessary finding. There is, then, nothing to suggest an appeal would have any apparent prospect of success; or, that there is anything in the matter of sufficient importance or interest to warrant a grant of leave.
For these reasons, leave to appeal is refused.
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