Mousa v Vukobratich Enterprises Pty Ltd - [2019] QSC 49

SUPREME COURT OF QUEENSLAND

CITATION:

Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor [2019] QSC 49

PARTIES:

GAMAL MOUSA and MARGARET MOUSA
(Plaintiffs)

v
VUKOBRATICH ENTERPRISES PTY LTD
ACN 074 668 161

(First Defendant)

and

MARK VUKOBRATICH

(Second Defendant)

FILE NO/S:

Cairns Registry No 130 of 2017

DIVISION:

Trial

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

11 March 2019

DELIVERED AT:

Cairns

HEARING DATE:

22, 23, 24, 25, 29, 30, 31 October 2018

JUDGE:

Henry J

ORDERS:

1.   The plaintiffs’ claim against the second defendant is dismissed.

2.   The first defendant’s counterclaims against the plaintiffs are dismissed.

3.   I will hear the parties regarding the course to be taken in determining rectification costs in the plaintiffs’ successful claim against the first defendant at 10am 15 March 2019.

4.   I will hear the parties as to interest and costs, if costs are not agreed, on a date to be fixed by mention at 10am 15 March 2019.

5.   The Registrar will forward a copy of these reasons to Mr McGrath of Miller Harris lawyers, solicitors for the first defendant’s liquidator.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – STATUTORY WARRANTIES FOR RESIDENTIAL BUILDING WORK – where the plaintiffs contracted the first defendant to build their dream home – where they claim the work did not meet the statutory standard of expectation – where they plead an entitlement to damages for breach of warranty on the basis that they have suffered or will suffer loss and damage, being the cost of carrying out remedial work to the house – whether the state of each item of work evidenced a breach of statutory warranty so as to require rectification

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGED, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – REPUDIATION – where the plaintiffs claim damages as against the first defendant for wrongful repudiation of the contract – where the amount claimed includes the cost of remedial work plus the cost of completing construction – whether the first defendant’s conduct manifested an intention to fulfil the contract only in a manner substantially inconsistent with their obligations under it and not in any other way

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – where the first defendant was a licensed contractor and the second defendant its appropriately licensed nominee – where there existed a statutory duty for a licensed contractor to ensure building work is personally and adequately supervised – whether the scope of liability for the statutory duty could be extended to infer the second defendant also owed a duty of care in negligence to the plaintiffs

Civil Liability Act 2003 (Qld) s 11
Domestic Building Contracts Act 2000 (Qld) ss 9, 81(3), Part 4
Queensland Building and Construction Commissions Act 1991 (Qld) ss 43, 43A

Brookfield Multiplex Ltd v Owners (2014) 254 CLR 185
Bryan v Maloney (1985) 182 CLR 609
DTR Nominees Pty Ltd v Mona Homes…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] QSC 49
Decision Date: 11 March 2019

CaseChat Overview and Summary

The plaintiffs, Dr and Mrs Mousa, engaged Vukobratich Enterprises Pty Ltd (the first defendant), through its managing director Mark Vukobratich, to construct their dream home. They subsequently sued the company for breach of statutory warranty, wrongful repudiation, and the second defendant, Mr Vukobratich, for negligence. The case was heard in the Supreme Court of Queensland. The plaintiffs claimed they suffered loss and damage due to the cost of remedial work on the house, which did not meet the statutory standard of expectation. They also argued the company repudiated the contract and Mr Vukobratich was personally liable in negligence for failing to properly supervise the building work.

The legal issues before the court included whether the state of each item of work evidenced a breach of statutory warranty, whether the company's conduct manifested an intention to fulfil the contract only in a manner inconsistent with their obligations, and if Mr Vukobratich owed a duty of care in negligence to the plaintiffs. The court examined the contractual relationship, the quality of the construction, and the statutory obligations of the company and Mr Vukobratich. It found that the company breached statutory warranties by not meeting the expected standard of work, repudiated the contract by its conduct, and that Mr Vukobratich did not owe a duty of care in negligence to the plaintiffs.

The court concluded that the plaintiffs were entitled to damages for the breach of statutory warranty and wrongful repudiation against the first defendant. It dismissed the plaintiffs’ claim against the second defendant for negligence. The court also dismissed the first defendant’s counterclaims against the plaintiffs and scheduled further hearings to determine the rectification costs and interest and costs. The judge ordered that a copy of the reasons be sent to the liquidator of the first defendant.

The court's final orders included dismissing the plaintiffs' claim against the second defendant, the first defendant's counterclaims against the plaintiffs, and scheduling further hearings to determine the rectification costs and interest and costs. The judge also directed that a copy of the reasons be sent to the liquidator of the first defendant.

Orders

Orders of the court

1. The plaintiffs’ claim against the second defendant is dismissed.

2. The first defendant’s counterclaims against the plaintiffs are dismissed.

3. I will hear the parties regarding the course to be taken in determining rectification costs in the plaintiffs’ successful claim against the first defendant at 10am 15 March 2019.

4. I will hear the parties as to interest and costs, if costs are not agreed, on a date to be fixed by mention at 10am 15 March 2019.

5. The Registrar will forward a copy of these reasons to Mr McGrath of Miller Harris lawyers, solicitors for the first defendant’s liquidator.

Background

Background to the litigation

Despite the importance of the Mousas’ argument that Mr Vukobratich ought be found personally liable in negligence, it is sensible to deal firstly with the cases against the company of breach of statutory warranty and wrongful repudiation of contract. That exercise will turn in part upon detail of the parties’ dealings and of the construction, detail which is also relevant in the case against Mr Vukobratich. Some of that detail is now reviewed by way of background.Background On 8 October 2012 Dr Mousa initiated enquiries with the company as a potential builder of their dream home. The company’s contracts administrator emailed him documents including the company profile, which included propositions such as:“Started by Mark Vukobratich, MV Designer Homes operates under Mark’s philosophy ‘My team and I hold people’s dreams in our hands’ … We pride ourselves on delivering superior quality, elegant, imaginative, value for money homes, whatever the budget… Budgets from $100,000 to $10 million … We specialise in split level homes and sloping or difficult block builds.”[3][3] Ex 12. The document concluded:“Thank you for considering MV Designer Homes. We guarantee to provide you with a home – that will not only be a pleasure to live in – but could also be your award winning design.Mark VukobratichManaging Director/Builder”[4][4] Ex 12. The company’s contracts administrator emailed Dr Mousa to confirm an appointment “with Mark our builder and our designer Dragan”.[5][5] Ex 13. The appointment proceeded on 14 October 2012 at the company’s office in Mulgrave Road at Cairns with Dr and Mrs Mousa, Mr Vukobratich and Dragan Vukelic, the company’s designer.[6] At that meeting Dr Mousa explained he was looking for a house which was elegant but not extravagant. He explained he wanted to build a house for his family in which they would eventually retire and wanted high ceilings, large open spaces and nothing blocking the view from their block of land – a block for which they had paid a lot of money to enjoy the view.[7] Dr Mousa sought Mr Vukobratich’s assurance that the company could cope with what would be a big house construction on a block with a slope component to it, and Mr Vukobratich so assured him.[8][6] T1-59 L13.[7] T1-59 LL30 – T1-60 L8.[8] T1-60 L37 – T1-61 L2. Mrs Mousa later had some further general discussions with Mr Vukobratich about the house the Mousas wanted to build, delivering drawings and pictures to him.[9][9] T2-91 L24. Momentum towards engaging a builder developed during 2013 after the Mousas sold their farm. Dr and Mrs Mousa met again with Mr Vukobratich and Mr Vukelic in September 2013.[10] Mr Vukobratich and Mr Vukelic showed the Mousas some drawings of what the house might look like. It showed three columns present on the first floor and one on the ground floor.[11] Dr Mousa indicated he did not want columns, both because he has an architectural dislike of them and because they would tend to obstruct the view outside. Dr Mousa also expressed concern that the plans showed large wall areas and little windows which tended to block the view from inside out.[12] Mr Vukobratich and or Mr Vukelic explained the columns were to provide structural support but that they would look into alternatives.[13] Dr Mousa testified that at a subsequent meeting prior to the finalising of the plans “they” – an apparent reference to Mr Vukobratich and or other company representatives – informed him that, having spoken with an engineer, they could get rid of some columns but one would have to remain and the windows could not be varied.[14] Dr Mousa explained he took the attitude he would “have to live with” that outcome, but only because it was said to be based on the expert advice of an engineer.[15][10] T1-62 L27; T3-36 L13.[11] T1-63 L3; T1-64 L7.[12] T1-63 LL3-27.[13] T1-63 L39.[14] T1-68 LL5-25.[15] T1-68 LL10-21.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor [2019] QSC 49
PARTIES:	GAMAL MOUSA and MARGARET MOUSA (Plaintiffs) v VUKOBRATICH ENTERPRISES PTY LTD ACN 074 668 161 (First Defendant) and MARK VUKOBRATICH (Second Defendant)
FILE NO/S:	Cairns Registry No 130 of 2017
DIVISION:	Trial
PROCEEDING:	Trial
ORIGINATING COURT:	Supreme Court at Cairns
DELIVERED ON:	11 March 2019
DELIVERED AT:	Cairns
HEARING DATE:	22, 23, 24, 25, 29, 30, 31 October 2018
JUDGE:	Henry J
ORDERS:	1. The plaintiffs’ claim against the second defendant is dismissed. 2. The first defendant’s counterclaims against the plaintiffs are dismissed. 3. I will hear the parties regarding the course to be taken in determining rectification costs in the plaintiffs’ successful claim against the first defendant at 10am 15 March 2019. 4. I will hear the parties as to interest and costs, if costs are not agreed, on a date to be fixed by mention at 10am 15 March 2019. 5. The Registrar will forward a copy of these reasons to Mr McGrath of Miller Harris lawyers, solicitors for the first defendant’s liquidator.
CATCHWORDS:	CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – STATUTORY WARRANTIES FOR RESIDENTIAL BUILDING WORK – where the plaintiffs contracted the first defendant to build their dream home – where they claim the work did not meet the statutory standard of expectation – where they plead an entitlement to damages for breach of warranty on the basis that they have suffered or will suffer loss and damage, being the cost of carrying out remedial work to the house – whether the state of each item of work evidenced a breach of statutory warranty so as to require rectification CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGED, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – REPUDIATION – where the plaintiffs claim damages as against the first defendant for wrongful repudiation of the contract – where the amount claimed includes the cost of remedial work plus the cost of completing construction – whether the first defendant’s conduct manifested an intention to fulfil the contract only in a manner substantially inconsistent with their obligations under it and not in any other way TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – where the first defendant was a licensed contractor and the second defendant its appropriately licensed nominee – where there existed a statutory duty for a licensed contractor to ensure building work is personally and adequately supervised – whether the scope of liability for the statutory duty could be extended to infer the second defendant also owed a duty of care in negligence to the plaintiffs Civil Liability Act 2003 (Qld) s 11 Domestic Building Contracts Act 2000 (Qld) ss 9, 81(3), Part 4 Queensland Building and Construction Commissions Act 1991 (Qld) ss 43, 43A Brookfield Multiplex Ltd v Owners (2014) 254 CLR 185 Bryan v Maloney (1985) 182 CLR 609 DTR Nominees Pty Ltd v Mona Homes…