Purnell v Manson

Case [2023] QCATA 77

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL


CITATION:

Purnell & Anor v Manson  [2023] QCATA 77

PARTIES:

SARAH PURNELL 

STEWART BRETT

(applicants/appellants)

v
LEE MANSON T/AS MANSON HOMES

(respondent)

APPLICATION NO/S:

APL346-19

ORIGINATING APPLICATION NO/S:

BDL117-14

MATTER TYPE:

Appeals

DELIVERED ON:

27 June 2023

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown, Presiding

Senior Member Traves

ORDERS:

1.     Leave to appeal granted.

2.     Appeal allowed.

3.     Order 1 of the decision dated 18 November 2019 is set aside and in lieu thereof it is ordered that Lee Manson t/as Manson Homes must pay Sarah Purnell and Stewart Brett the amount of $20,103.00.

4.     The parties must file in the Tribunal two (2) copies and exchange one (1) copy of any submissions on costs within fourteen (14) days and any submissions in reply within seven (7) days thereafter.

5.     The submissions on costs must not exceed five (5) pages in length.

6.     The Appeal Tribunal will determine the costs of the appeal, on the papers, upon the expiration of the time for compliance with order 4.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – OTHER CASES – error of fact or mixed law and fact – where the appellant homeowners were found to have terminated the contract with the respondent builder – where the tribunal below awarded the homeowners damages for the cost of completing the works and rental expenses – where homeowners’ damages reduced by builder’s entitlement to quantum meruit – whether the tribunal erred in assessing the homeowners’ entitlement to damages – whether the tribunal erred in allowing the builder to recover on a quantum meruit basis in respect of incomplete building stages – whether the homeowners failed to mitigate their loss

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – RECOVERY ON QUANTUM MERUIT – IN GENERAL – where the contract price was payable by progress payments for each stage – where the tribunal below found that the builder was entitled on a quantum meruit to reimbursement for work performed under the relevant stage of the contract where the stage was incomplete – whether the appellant homeowners freely accepted the benefits flowing from the builder’s part performance – whether basis exists for claim of quantum meruit

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(1), s 142(3)(b), s 147(2), s 147(3)

Amundsen v Queensland College of Teachers [2011] QCATA 2
Bellgrove v Eldridge (1954) 90 CLR 613
Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653
Earthworks and Quarries Ltd v FT Eastman & Sons Pty Ltd [1966] VR 24
GDLA v GMG [2017] QCATA 18
Harrison & Anor v Meehan [2017] QCA 315
Hasell v Bagot, Shakes & Lewis Ltd (1911) 13 CLR 374
Knott Investments Pty Ltd v Fulcher [2014] 1 Qd R 21
Lee Manson t/as Manson Homes v Brett & Anor [2017] QCATA 124
Lee Manson t/as Manson Homes v Brett & Purnell [2016] QCAT 282

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AGLC
Purnell v Manson [2023] QCATA 77
Case
[2023] QCATA 77
Decision Date

CaseChat Overview and Summary

In the case of Purnell v Manson, the appeal was brought by the homeowners, Sarah Purnell and Stewart Brett, against the builder, Lee Manson, trading as Manson Homes. The homeowners had terminated the building contract and sought damages for the cost of completing the works and rental expenses, while the builder sought to recover on a quantum meruit basis for the work done. The tribunal below awarded the homeowners damages, reduced by the builder's entitlement to quantum meruit. The homeowners appealed on several grounds, including the tribunal's assessment of their entitlement to damages, the builder's entitlement to recover on a quantum meruit basis, and the homeowners' failure to mitigate their loss. The legal issues before the court were whether the tribunal erred in assessing the homeowners' entitlement to damages, whether the tribunal erred in allowing the builder to recover on a quantum meruit basis, and whether the homeowners failed to mitigate their loss.

The court found that the tribunal erred in allowing the builder to recover on a quantum meruit basis. The court held that the builder was not entitled to recover on a quantum meruit basis for the work done under the relevant stage of the contract, where the work performed was not to the standard necessary under the contract. The court noted that there is no basis for a claim for quantum meruit in such circumstances, and that the application of quantum meruit does not depend on who treated the contract as discharged. The court found that the homeowners had not freely accepted the benefits flowing from the builder's part performance, and that it was difficult to demonstrate that the homeowners had a proper opportunity to reject, or accept, the work.

The court allowed the appeal and set aside the decision of the tribunal below. The court ordered that Lee Manson t/as Manson Homes must pay Sarah Purnell and Stewart Brett the amount of $20,103.00. The parties were required to file and exchange submissions on costs within a specified timeframe. The Appeal Tribunal would determine the costs of the appeal on the papers.

Orders

Orders of the court

1. Leave to appeal granted.

2. Appeal allowed.

3. Order 1 of the decision dated 18 November 2019 is set aside and in lieu thereof it is ordered that Lee Manson t/as Manson Homes must pay Sarah Purnell and Stewart Brett the amount of $20,103.00.

4. The parties must file in the Tribunal two (2) copies and exchange one (1) copy of any submissions on costs within fourteen (14) days and any submissions in reply within seven (7) days thereafter.

5. The submissions on costs must not exceed five (5) pages in length.

6. The Appeal Tribunal will determine the costs of the appeal, on the papers, upon the expiration of the time for compliance with order 4.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

In deciding an appeal on a question of fact or mixed law and fact, subject to leave to appeal being granted, the appeal must be decided by way of rehearing.[32] In deciding the appeal the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision, or set aside the decision and return the matter to the Tribunal below for reconsideration.[33][32]QCAT Act, s 147(2).[33]Ibid, s 147(3).Application to adduce fresh evidence Before considering the grounds of appeal it is necessary to deal with the application by the respondent to rely upon fresh evidence. The Appeal Tribunal made directions for any party seeking to rely upon fresh evidence to file an application and for the application to be determined together with the appeal. The respondent has not filed an application for leave to rely upon fresh evidence. Rather, the respondent has simply filed submissions addressing the issue. As there has been no objection however to the respondent’s approach, we will deal with the submissions as an application to rely upon fresh evidence. The Appeal Tribunal will only accept fresh evidence if it was not reasonably available at the time the proceeding was heard and determined. A party seeking to adduce fresh evidence must satisfy the Appeal Tribunal that:(a)The evidence could not have been obtained with reasonable diligence before the hearing at first instance; (b)The evidence would probably have had an important impact on the result of the case; and (c)The evidence is credible. For fresh evidence to be admitted all of these requirements must be satisfied. The fresh evidence sought to be relied upon by the respondent is a photograph of the kitchen and rear deck of the house. The respondent says that the photograph is relevant to the issue of the installation of the timber doors. The respondent says that it did not have a copy of the photograph at the time of the hearing below. The respondent does not address whether the photograph could, with reasonable diligence, have been obtained before the hearing. The photograph was, says the respondent, used by the appellants in the sale of the property in 2017 and was uplifted from online material used by the appellants’ agents. The hearing was conducted in November 2018, some considerable time after the sale of the property by the appellants. The respondent offers no explanation as to why the photograph could not have been, and was not, obtained before the hearing. Accordingly, we are not persuaded that the photograph could not, with reasonable diligence, have been obtained before the hearing below. It is not necessary for us to consider the other requirements for the admission of fresh evidence in light of our conclusion. The application to rely upon fresh evidence is refused. Consideration For reasons that will become apparent, we will first consider appeal ground 4. Did the tribunal err in allowing the builder to recover on a quantum meruit for the enclosed stage works, and further works, which were completed by the builder? – ground of appeal 4

Decision

Reasons for decision

In deciding that the appellants had lawfully terminated the contract, the learned member found:(a)At the time of the builder’s claim for completion of the enclosed stage, the roof covering was not in accordance with the plans at the time, and did not have appropriate engineering and development approval;[5][5]First decision, [137].(b)The builder changed the plans without obtaining approval from the owners to show a tiled roof and not a metal roof;[6][6]Ibid, [158].(c)The builder proceeded of his own volition to conduct the roofing works by fitting a metal roof, without first obtaining appropriate statutory approval which was required when it was his obligation to obtain such approval;[7][7]Ibid, [180].(d)The builder was not entitled to claim for the enclosed stage until the components of the stage were properly completed;[8](e)The following defective or incomplete work meant that the enclosed stage had not been reached:[9](i) Defect in the hip roof;[10](ii) Internal floorboards not properly completed;[11](iii) Windows and doors supplied were not those required to be installed under the contract;[12](f)The builder was not entitled to suspend work on the basis of the non-payment by the owners of the enclosed stage claim as that payment was not claimable by the builder under the contract at that time;[13](g)The builder had not repudiated the contract;[14](h)The builder was in substantial breach of the contract by failing to comply with his obligations under clauses 1.1 and 11.1 of the contract;[15](i)The owners were entitled to give a notice to remedy breach under clause 27.1 of the contract;[16](j)The owners were entitled to terminate the contract under clause 27.4 upon the builder’s failure to comply with the notice to remedy breach.[17][8]Ibid, [185].[9]Ibid, [209].[10]Ibid, [181]-[182].[11]Ibid, [186], [191].[12]Ibid, [202], [205].[13]Ibid, [210].[14]Ibid, [222].[15]Ibid, [224].[16]Ibid. [17]Ibid. The second decision Relevant to the present appeal, the learned member found:(a)The builder was entitled, on a quantum meruit, to reimbursement for work performed in the enclosed stage which the owners utilised and had the benefit of;[18][18]Second decision, [133].(b)The bi-fold doors referred to by the homeowners’ quantity surveyor, Mr Thornley, and those referred to by the builder, were one and the same;[19](c)The bi-fold doors should not be included in the valuation of uncompleted works;[20](d)The value of the completed works under the enclosed stage was $67,091.00;[21](e)The builder was entitled to recover $67,091.00 on a quantum meruit for the enclosed stage;[22](f)The builder was entitled to recover $10,141.30 on a quantum meruit for works completed beyond the enclosed stage;[23](g)The homeowners had failed to adduce cogent evidence as to loss in the sale value of the property directly attributable to the builder’s failure to provide inspection certificates and the amount claimed by the homeowners was not allowed;[24](h)Accepting the evidence of the homeowners’ quantity surveyor, Mr Thornley, the amount of $29,768.30 was allowed for the cost of completing the works;[25](i)The homeowners were entitled to recover consequential damages for rental expenses incurred between 30 April 2014 and 30 September 2014, a period of 22 weeks, in the amount of $9,240.00;[26](j)No award of interest was made on the amounts payable to the homeowners;[27](k)The total amount recoverable by the builder was $77,232.30 and the total amount recoverable by the homeowners was $51,978.30.[28][19]Ibid, [143].[20]Ibid, [144].[21]Ibid, [145].[22]Ibid, [146].[23]Ibid [150].[24]Ibid, [179].[25]Ibid, [198].[26]Ibid, [220].[27]Ibid, [249]-[250].[28]Ibid, [253]-[254].The grounds of appeal

Ratio Decidendi

Legal Principle Established

The application to rely upon fresh evidence is refused. Consideration For reasons that will become apparent, we will first consider appeal ground 4. Did the tribunal err in allowing the builder to recover on a quantum meruit for the enclosed stage works, and further works, which were completed by the builder? – ground of appeal 4 The contract price was payable by seven progress payments: deposit, demolition and excavation, base, frame, enclosed, fixing and final. The appellants paid the first four stage payments. The respondent submitted a claim for the enclosed stage which the appellants disputed. It was at this stage that the appellants terminated the contract. The respondent claimed that he was entitled to be paid for the work performed until the termination of the contract. The learned member found that, notwithstanding the builder was in breach, the builder was entitled to recover from the homeowners $77,232.30 on a quantum meruit for works completed up to, and beyond, the enclosed stage. The learned member did not consider the building contract to be entire.[34] The parties approached the dispute both below and in the appeal on the basis that the contract was not entire, but rather a series of entire obligations which were defined by the stages of payment contemplated by the contract. [34]Second decision, at [132] - [135]. It is clear that, in respect of the enclosed stage the subject of dispute and the work undertaken beyond the enclosed stage, the work performed by the respondent was not to the standard necessary under the contract to give rise to an obligation under the contract to pay for it.[35] [35]Thompson Residential Pty Ltd v Hart & Anor [2014] QDC 132 (McGill SC DCJ). The question becomes, therefore, whether the builder was entitled to a payment on the basis of a quantum meruit for work done under the relevant stage of the contract, but not to the standard required by the contract to permit payment pursuant to it. That is, may the builder in default in the present circumstances recover on the basis of quantum meruit, where no claim under the contract may be made? In our view, there is no basis for a claim for quantum meruit in the present circumstances. There is support for the proposition that in some circumstances a builder in default of completion of a stage may recover a reasonable sum for work done within that stage. In Steele v Tardiani,[36] Latham CJ adopted as correct the following rule:Where work is done by one party under a special contract, but not according to its terms, the other may refuse to accept it; but if he does accept it and takes the benefit of it, he may be sued for the value on this [common indebitatus] count [for work done].[37][36](1946) 72 CLR 386.[37]Ibid, 393; see also at 402; Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221, 234, 246; Earthworks and Quarries Ltd v FT Eastman & Sons Pty Ltd [1966] VR 24. It follows that the application of quantum meruit does not depend on who treated the contract as discharged. The learned authors of Mason & Carter’s Restitution Law in Australia express the view that, in principle, there is no reason why the fact that the plaintiff breached the contract should be conclusive.[38] However, for a builder in breach to recover under a quantum meruit it must be demonstrated that the innocent party accepted the benefit of the work, within the meaning of the authorities.[39] These circumstances will be rare and will ordinarily not be established where the owner has done no more than build upon work which was incomplete under the contract.[40] In such circumstances, it will be difficult for a builder to demonstrate that the owner had a proper opportunity to reject, or accept, the work.[38]K Mason, J W Carter and G J Tolhurst, Mason & Carter’s Restitution Law in Australia (LexisNexis, 3rd ed, 2016) [1155].[39]Sumpter v Hedges [1898] 1 QB 673; Steele v Tardiani (1946) 72 CLR 386, 403.[40]Ibid.