Quoc Dat Vo t/a Brisland Building Services v Queensland Building Services Authority
[2010] QCAT 492
•8 October 2010
| CITATION: | Quoc Dat Vo t/a Brisland Building Services v Queensland Building Services Authority & Anor [2010] QCAT 492 |
| PARTIES: | Quoc Dat Vo t/a Brisland Building Services |
| v | |
| Queensland Building Services Authority |
| APPLICATION NUMBER: | QR293-09 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 26 July 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | Paul McGrath – Member |
| DELIVERED ON: | 8 October 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | It is ordered that the decision of the Queensland Building Services Authority of 16 October 2009 be set aside and that each party be given liberty to apply for costs. |
| CATCHWORDS : | Building Contract - Whether termination by alleged repudiation of builder. |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Quoc Dat Vo T/A Brisland Building Services represented by Ms Crystal Ray, Sanford Lawyers. |
| RESPONDENT: | Queensland Building Services Authority represented by Ms Jodie Stroud. First Respondent. Thanh Huu Tran, represented by Ms Dawn Tran, Gadens Lawyers. Second Respondent. |
REASONS FOR DECISION
On 26 March 2008 a domestic building contract was entered into between the Applicant and the second Respondent for the construction of a two story house at 28 Oudeman Street, Augustine Heights in the state of Queensland.
On or about 9 April 2008 the second Respondent and the Applicant entered into a HIA general housing specifications. Both the second Respondent and his partner, Ms Susan Vo, had relied upon the Applicant to complete the contract and the Applicant completed the contract in its entirity. The Applicant calculated and made provisions for 262 days construction period including delays and at the time the Applicant completed part C of the contract. He did not include any time for the traditional shut down over Christmas and new year.
By letter dated 9 March 2009 the second Respondent informed the Applicant inter alia that:
(1)Pursuant to the contract the Applicant is required to complete all works on 14 December 2008
(2)As at that date the Applicant had failed to reach even lock up stage despite the Applicant having paid the Respondent for the lock up stage and some of the brickworks
(3)The second Respondent had paid the Applicant more than he was entitled to under the contract
(4)The Applicant by his actions (or inaction) in:
(a) Failing to complete the works in accordance with the contract;
(b) Failing to continue the works after Christmas 2008;
(c) Indicating to the second Respondent that he intended to terminate the contract and clearly indicated to the second Respondent that the Applicant did not intend to fulfil his obligations and complete the works and accordingly the second Respondent accepted the Applicant’s rejection of his contractual obligations and terminated the contracts.
As at 9 March 2009 the Applicant had not completed the works to lock up stage, roof cover, brickworks, the entire fixing stage, painting of the entire house and practical completion still to be achieved.
On 27 March 2009 the second Respondent lodged a complaint form with the first Respondent. On the evidence by the parties the contract was terminated by the second Respondent.
On 16 October 2009 the Applicant received a letter from the first Respondent advising that the contract was terminated for reasons other than the failure of the owner entitling the owner to a claim under the insurance policy conditions being the relevant policy of insurance.
The first Respondent made a decision on or about 16 October 2009 that a domestic building contract had been validly terminated having a consequence of allowing a claim for non completion under the statutory insurance scheme with a review of that decision permitted by section 86(1)(i) of the Queensland Building Services Authority Act 1991 (the “QBSA Act”).
The reasons for the decision as set out in the Authority’s statement of reasons and the affidavit of June Blaney was based on information provided by the second Respondent to the Authority in its complaint form that the Applicant, by his conduct, had repudiated the contract with such repudiation accepted by the second Respondent. Despite an express invitation by the Authority to the Applicant to provide evidence to the contrary, no such evidence was provided by the Applicant.
The history of the matter is that following the signing of the contract to build the subject property the Applicant proceeded to lodge building plans with the relevant local Authority which plans were finally approved on 18 June 2008. The Applicant alleges that prior to that date the works were not able to be commenced as he had not received building approval for commencement of the works. There was some issue about whether or not any works had been carried out prior to the approval of the building works and it appears that on or about 11 June 2008 the Applicant engaged and Francis Excavation attended onsite to excavate clear and prepare the property and to remove topsoil.
10. The Applicant says that the slab stage and piers were laid around about the end of June 2008 and that building continued until approximately December 2008. The Applicant says that an inspection report from Phoenix Certifications dated 15 December 2008 showed that the inspection report is for the frame stage of the works, and that the works have not yet reached completion for the frame stage.
11. The Applicant says that after receiving this inspection report he and the subcontractors continued with the works to complete the frame stage. Between 15 and 18 December 2008 all the roofing tie downs were completed. After this work was completed the Applicant rebooked Phoenix Certifications to attend the property for a further inspection.
12. Further inspection report from Phoenix Certifications dated 18 December 2008 showed that the inspection report is for the frame stage of the works; that the works had almost reached completion for the frame stage; that permission was given to start lining the soffit.
13. The Applicant says that the following works were carried out at the property between 18 December 2008 and 20 January 2009:
a)Lining of the soffits
b)Lining of the gabels
c)Installation of the external wall cladding the areas where brickwork could not be installed.
14. The second Respondent and his partner, Ms Vo, had provided payments to the Applicant mostly in cash following the signing of the contract and by 23 June 2008, the second Respondent had already paid to the Applicant $165,000 equivalent to nearly 40% of the agreed contract price. The second Respondent states that those payments have been made to the Applicant as requested in a genuine belief that the Applicant was proceeding with the works and in reliance upon the Applicants assurance.
15. The Applicant says that he had never made any demands or issued invoices or progress claims for payment of the second Respondent and prior to 23 June 2008 the second Respondent had always made a number of payments to the Applicant for the works with the payments in cash, on the basis that the second Respondent or Ms Vo would bring cash to the Applicant and insisted he keep the money as the second Respondent was, it is alleged, a gambler and that Ms Vo was concerned that if the money were not paid it would be used in gambling.
16. There is no indication that any progress claims were made by the Applicant, and Ms Vo, on behalf of the second Respondent, indicated that she was not aware of the difference between a receipt and an invoice, although it was subsequently ascertained that Ms Vo and her partner had previously built a house and were aware of the need for progress payments in respect of that property.
17. On or about 29 November 2008 the second Respondent attended the property without the Applicant’s knowledge or consent although the Applicant was subsequently in attendance and provided a report of Jeffrey Hills & Associates in respect of damage that occurred to the property following recent heavy rain. The report related to the condition of the construction work and the damage and defects after the house was flooded. At or about that time, according to the second Respondent, the date for completion of the contract was due as the second Respondent stated that the date for commencement was the date of signing the contract and some 262 days from that date. The Applicant denies that the date for commencement was the date of the contract and states that the date was in fact the date when site works commenced on the property.
18. There was little work done on the property over the Christmas New Year break, which is common on building sites, and the second Respondent stated that on her frequent visits to the property at that time she noted that there was no work taking place on the property.
19. Ms Vo states that it was only due to her and the second Respondent dealing with, and paying the Applicant’s subcontractors and suppliers direct, between January 2009 and 9 March 2009 that works were carried out on site.
20. The second Respondent states that Ms Vo approached the Applicant in or about January regarding the delay to the construction and that the Applicant informed Ms Vo that he was not able to pay his subcontractors and continue works. It is clear the Applicant did continue work on the premises up until 9 March 2009 as there was work done by tradesman as well as invoices obtained from suppliers.
21. The Applicant states that as at February 2009 a large amount of the work had been done in respect of the property pursuant to the contract. The Applicant states that on his calculation the actual commencement date of works on the property was 23 June 2008, and the building period being 262 days the date for the works reaching practical completion was 12 March 2009.
22. The Applicant states that between 23 June 2008 and late February 2009 he carried out the works under the contract without having any disputes with the owner.
23. The Applicant states that on or about 26 February 2009 the owner and Susan Vo attended his office with a man introduced to him as “Paul” and demanded that the contract be terminated because Ms Vo felt that there were unreasonable delays in the works. The Applicant says he advised Ms Vo that the works were progressing and that there were no unreasonable delays in the carrying out of the works.
24. The Applicant says at this meeting he advised Ms Vo that he refused to terminate the contract but that if she wanted to walk away from the contract that any outstanding balance to the works and variations. in an approximate amount of $20,000, would have to be paid.
25. Ms Vo denies that this meeting took place.
26. Subsequently on 9 March 2009 the Applicant received a copy of the letter from the second Respondent and Ms Vo purporting to terminate the contract and on or about 11 March the Applicant received a letter from Gadens Lawyers confirming the owners’ termination of the contract. The Applicant says that on receiving these letters he made a commercial decision not to contest the legality of the owners’ termination, but he did not agree that the termination was lawful.
27. In relation to the letter sent by Gadens Lawyers on 11 March 2009, it states that under the building contract the Applicant had agreed to construct a new 2 story home on the property in accordance with the plans and specifications provided for a total fixed price contract of $450,000 and to achieve practical completion and complete all works by no later than 14 December 2008. The letter goes on to state that nearly 3 months have elapsed since the required practical completion and on their instructions the Applicant had not yet completed lock up stage.
28. The letter goes on to say that lawyers were instructed that the Applicant had ceased work on the property since mid to late December 2008 and had indicated to the second Respondent his intention to terminate the building contract hence these actions amount to a clear repudiation of the Applicant’s obligations under the building contract.
29. The letter went on to state that the Applicant was no longer authorised or permitted to enter the property.
30. The second Respondent submitted that he had accepted the Applicant’s alleged repudiatory conduct and terminated the contract for breach by the Applicant. As at 9 March 2009 the Applicant was in breach of the contract, according to the second Respondent:
a)By failing to abide by the terms of the contract and to carry out the works in accordance with all laws and legal requirements.
b)By receiving payments in excess to that which he was entitled to under the contracted law.
c)By failing to proceed and perform works with due diligence and in a competent matter post Christmas 2008 as required by the contract.
d)By failing to carry out the works with reasonable care and skill.
e)By failing to complete the construction works and achieve practical completion in accordance with the contract.
f)At the time the contract was terminated being unable to pay his subcontractors and suppliers.
g)By informing the second Respondent and Ms Vo that he did not have financial capacity to complete the works under the contract.
h)By indicating to the second Respondent and Ms Vo that he intended to terminate the contract.
That he was not ready, willing and able to carry out the works as required under the contract as at the date of termination.
31. It is unfortunate that perhaps there was no corroboration of Ms Vo’s evidence and her partner did not give evidence as his command of English was not sufficient to enable him to do so. The evidence remained an issue between the Applicant and Ms Vo, as a lot of the allegations made about either of them were not able to be substantiated.
32. The first Respondent, the Queensland Building Services Authority, submitted that it made a direct decision that the Applicant had terminated the contract based on the information it had in its possession at the time of the decision. Notwithstanding that new evidence has been submitted by the Applicant throughout the proceedings. The Authority submits that the issues to be resolved remain the same, namely whether the contract has been terminated, and assuming the contract has been terminated, whether it was properly terminated for reasons other than the fault of the second Respondent.
33. The second Respondent alleges that the Applicant repudiated the contract with such repudiation accepted by the second Respondent by way of his letter to the Applicant dated 9 March 2009. The Applicant asserts that he did not repudiate the contract as alleged by the second Respondent and was at all times ready willing and able to carry out the works under the contract.
34. The conduct alleged by the second Respondent to constitute repudiatory conduct included the Applicant:
a)Failing to complete construction works in accordance with the contract.
b)Failing to return to the site since Christmas 2008.
c)Informing the second Respondent that he did not have financial capacity to complete the works under the contract.
d)Indicating to the second Respondent that he intended to terminate the contract.
35. The Applicant asserts in reply that the termination by the Applicant was unlawful as he did not repudiate the contract as:
a)He continued with the works until March 2009.
b)He did not say that he wanted to terminate the contract.
c)He paid all subcontractors and suppliers.
d)He was at all times ready willing and able to complete his obligations under the contract.
36. The first Respondent submits that the evidence adduced at the hearing does not support the assertion that the Applicant was ready willing and able to carry out the works under the contract as at the date of termination and it is open to the Tribunal to find that as at the date of the termination of the contract by the second Respondent the Applicant in breach of the contract:
(a)Failed to carry out works in an appropriate and skilful way.
(b)Failed to carry out works with reasonable care and skill.
(c)Failed to carry out the works in accordance with all relevant laws and legal requirements.
(d)Failed to proceed with the works with due diligence.
(e)Was unable and unwilling to complete the works under the contract.
(f)In laterally imposed on the second Respondent the conditions of a kind for which there is no contractual warranty or authority.
37. The Applicant submits that it is open for the Tribunal to find:
(a)That the Applicant was at all material times ready willing and able to perform the works under the contract.
(b)That the works commenced on 23 June 2008.
(c)The date for achieving practical completion under the contract was 18 March 2009 excluding any claims for extensions.
(d)The Applicant continued performing the works under the contract after 25 December 2008.
(e)The contract was unlawfully terminated by the second Respondent before the Applicant was able to bring the works to practical completion under the contract.
(f)The second Respondent interfered with the works.
(g)The second Respondent paid for the works in cash and often in advance.
(h)The Applicant paid all subcontractors’ in accordance with relevant contracts and in any event non payment of subcontractors does not amount to a breach of the contract.
The Applicant could afford to complete the works.
(j)The Applicant did not demand payment of any money to terminate the contract.
(k)The Applicant did not want to terminate the contract.
38. The Tribunal is satisfied that on the evidence before it the Applicant continued with the works post Christmas 2008 and indeed until March 2009. The Applicant did not say to the second Respondent that he wanted to terminate the contract. The Tribunal is satisfied that the Applicant was at all times ready willing and able to carry out his obligations under the contract, and was only hindered in this by the interference of the works through the second Respondent and or Susan Vo. The date for practical completion the Tribunal finds was at least 12 March 2009, that is after the termination date of the contract by the second Respondent.
39. The Tribunal finds that the second Respondent unlawfully terminated the contract, as the second Respondent was not willing to perform his obligations under the contract. It is therefore the finding of the Tribunal that the contract had not been properly terminated by the second Respondent by its actions of 9 March and following.
40. It is ordered that the decision of the Queensland Building Services Authority of 16 October 2009 be set aside and that each party be given liberty to apply for costs.
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