Ricchetti v Lanbuilt Pty Ltd
[2011] QCATA 266
•15 September 2011
| CITATION: | Ricchetti v Lanbuilt Pty Ltd [2011] QCATA 266 |
| PARTIES: | Clem Ricchetti Angela Ricchetti Bruno Ricchetti (Applicants/Appellants) |
| v | |
| Lanbuilt Pty Ltd (Respondent) |
| APPLICATION NUMBER: | APL023-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | 7 June 2011 |
| HEARD AT: | Townsville |
| DECISION OF: | Justice Alan Wilson, President Ms Joanne Browne, Member |
| DELIVERED ON: | 15 September 2011 |
| DELIVERED AT: | Townsville |
ORDERS MADE: | Application for leave to appeal refused. |
| CATCHWORDS: | BUILDING DISPUTE – BUILDING CONTRACTS – DEFECTIVE BUILDING WORK – LEAVE TO APPEAL – QUESTIONS OF FACT OR MIXED LAW AND FACT – where applicants and respondent entered into a building contract – where dispute arose as to defective building work – where respondent sought final payment for completed building works – where Member found building works had reached practical completion – where Member also accepted expert evidence that some works were defective and required rectification – where Member ordered applicants to pay for work completed – where applicants allege Member’s decision contain typographical errors and errors of fact and law – whether Member erred in finding practical completion had been reached – whether there was a public advantage to grant leave to apply Domestic Building Contracts Act 2000 Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 462, cited |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Clem & Angela Ricchetti and Bruno Ricchetti represented by Mr A W Collins of Counsel, instructed by Boulton Cleary & Kern Lawyers |
| RESPONDENT: | Lanbuilt Pty Ltd represented by Mr A J Hockings of Counsel, instructed by Purcell Taylor Lawyers |
REASONS FOR DECISION
President:
I have had the advantage of reading draft Reasons prepared by Ms Browne. I agree with them, and with the orders she proposes.
It is regrettable that the learned Senior Member’s reasons for his decision contained typographical and other errors. That said, the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act) specifically provides for the correction of decisions containing clerical mistakes, miscalculations of figures or errors arising from accidental slips, or omissions.[1] Many of the errors of which the applicants complain can be easily remedied through this legislative provision. Naturally, I am sorry that the Ricchettis are offended and concerned that their name has been misspelt.
[1]Section 135.
That aside, however, it has not been shown that there is any inadequacy in the reasons constituting an error of law. As the Queensland Court of Appeal has recognised this is a Tribunal, not a court and the adequacy or otherwise of its reasons must be viewed in light of the simpler, expedited procedures it is obliged to adopt under the QCAT Act.[2]
[2]Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 462 at 485.
Importantly the reasons do set out the essential grounds upon which the decision rests.[3] Early in the decision the learned Senior Member identified the issues in dispute. He then went on to make material findings of fact about each issue, and set out his reasons for doing so. He did not, it is true, address a question concerning termination of the contract but it was raised at the commencement of the hearing. Thereafter, however, no party cross-examined on it. As Ms Browne has identified, the difficulty the Ricchettis face is that they sought to have Lanbuilt perform the contract after the alleged date of termination. It is inescapable that it must have remained on foot thereafter.
[3] Soulemezis v Dudley (Holdings) Pty Ltd [1987] 10 NSWLR 247 at 280.
A great deal of time was devoted to the stormwater drainage system. The learned Senior Member found that rectification should be in accord with the recommendations of a joint report of experts. Otherwise, for reasons Ms Browne has identified, the finding that it did not go to the question of practical completion was in accord with the weight of evidence and cannot be shown to have been made in error.
Further, as to practical completion, the learned Senior Member found that by a proper construction of clause 25 of the contract, and the correspondence between the parties, the works had reached the stage of practical completion on 9 August 2007. At that time it was not asserted by any of the Ricchettis that the stormwater system was defective. The contractual definition ‘practical completion’ reflects, essentially, the statutory definition in the Domestic Building Contracts Act 2000, which focus on two concepts: whether the works are complete except for minor omissions and defects, and whether they are reasonably suitable for habitation. The extent of the stormwater defect was simply not known at that time relevantly too, the evidence for the Ricchettis was that tenants have resided in the premises since at least late 2007.
There is an error in [22] of the learned Senior Member’s decision but, as Ms Browne has again identified, the mistake was not based on what are alleged to be false premises raised for the Ricchettis. In that paragraph the learned Senior Member was, I accept, saying that he had a preference for the evidence of one expert witness called for Lanbuilt and his comments were made in the context of a discussion about the cost of rectifying the stormwater system.
It was also said, for the Ricchettis, that there would be an advantage in the Appeal Tribunal expressing a view whether a certificate of compliance, issued by a building certifier, establishes that works are in truth practically completed. As Counsel for Lanbuilt pointed out, however, the Ricchettis argued before the learned Senior Member that the certificate did not satisfy the requirements of practical completion, and he accepted that.
In essence the application by the Ricchettis involves, with respect, an attempt to revisit the case run before the learned Senior Member. It is, again, regrettable that the decision contained a number of minor errors which were upsetting to them; but, for the purposes of an application for leave to appeal it has not been shown that leave is necessary or warranted.
Member Joanne Browne:
In 2006 Lanbuilt Pty Ltd was contracted by Mr Clem Ricchetti and Mrs Angela Ricchetti, and their son Mr Bruno Ricchetti, to build townhouses at 137 Bayswater Road, Currajong, Townsville.
During the construction disputes arose between the parties about, among other things, alleged defective work; the construction of a stormwater drainage system; and, whether the contracted works had reached practical completion. (The Ricchettis contend they had not.)
Proceedings were commenced by Lanbuilt in QCAT’s predecessor, the Commercial and Consumer Tribunal, in 2007 seeking an order for final payment allegedly owing under the contract, plus default interest and legal fees and outlays.
In their defence and counter-claim the Ricchettis sought an order for rectification costs for alleged defective works, and damages for breach of contract – and, an order that the contract was validly terminated.
The matter was eventually heard by QCAT in Townsville on 13 and 14 October 2010 and the decision to which this appeal relates was delivered by the presiding Senior Member on 17 December 2010. Both parties were legally represented then, and in the appeal.
Leave to Appeal
The Ricchettis’ grounds of appeal allege errors of fact, or mixed law and fact, and under s 142(3)(b) of the QCAT Act they must therefore obtain the Appeal Tribunal’s leave before their appeal can be considered.
An applicant seeking leave to apply to appeal must establish a case of error in the primary decision,[4] and that there is a question of importance upon which further argument and a decision of the Appeal Tribunal would be of public advantage.[5]
[4] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[5]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.
The Ricchettis’ complaint is that the Senior Member’s decision contains many errors – typographical and spelling errors and errors in syntax. They contend, amongst other things, that these errors include an incorrect reference to the address of the townhouses where the building contractual works were performed, the spelling of their name, and a miscalculation of $1.00; and, that the Senior Member had not included GST on the rectification costs.
The Ricchettis also contend that the Senior Member’s decision contains many errors of fact which were then, wrongly, relied upon to ‘draw inferences which were contrary to their case and the evidence’.[6]
[6]Outline of Argument for the Applicant filed 21 March 2011, [5].
The alleged wrongful findings are that Mr Bruno Ricchetti was administering the contract, and that the contract proceeded without ‘complication’ save for ‘the firewall issue’ in February 2007. The Ricchettis argue that this was contrary to the correspondence exchanged between the parties which, they say, evidence of their intention with respect to the contract and the conduct of Lanbuilt throughout the building works.[7]
[7]Outline of Argument for the Applicant filed 21 March 2011, [123] and [124].
In particular, the Ricchettis contend that the correspondence demonstrates the fact that there were ‘defects’ identified throughout the building works. They argue that the Senior Member’s finding that the stormwater drainage system was constructed in compliance with the design, and the subsequent finding that the contracted works had reached practical completion, demonstrates a failure to provide reasons which properly and correctly addressed evidentiary issues they raised: whether Lanbuilt had discharged their contractual obligation.
The Ricchettis contend that there is a public advantage in obtaining a finding as to whether the practical completion stage can be reached in circumstances where a party has failed to discharge its contractual obligations, but a building certifier has issued a certificate of compliance for the works performed.
The Ricchettis also contend that the alleged errors in the findings of fact in relation to the stormwater drain have their source in the Senior Member’s finding that ‘the builder simply complied with the design’[8] – this was contrary, they say, to the evidence before the Tribunal given at the hearing by Mr Lancini, director of Lanbuilt Pty Ltd.
[8]Lanbuilt Pty Ltd v Ricchetti [2010] QCAT 686, [22].
An explanation for the ‘error’ submitted before the Appeal Tribunal was that the Senior Member placed reliance on the expert evidence given by Mr Milton Messer (Northern Consulting Engineers).[9] It is submitted for the Ricchettis, however, that this was in itself an error in that the Senior Member’s finding was also inconsistent with Mr Messer’s evidence that the stormwater construction was not built in accordance with ‘the tender documents’.
[9]Lanbuilt Pty Ltd v Ricchetti [2010] QCAT 686, [18].
The Ricchettis contend that Mr Bruno Ricchetti, contrary to the Senior Member’s finding, did not design the stormwater drain and that Lanbuilt Pty Ltd did not build the stormwater drain in accordance with the drawings which formed part of the contract – the drawings which were certified by consulting engineers were never given to the subcontractor responsible for the drainage system.
The Ricchettis submit that had the Senior Member ‘correctly comprehended’ that the stormwater drain was not built in accordance with the plans, consideration should then have been given to the substantive issues of the application: that is, the failure by Lanbuilt Pty Ltd to seek a variation, the failure by Lanbuilt Pty Ltd to comply with the contract, whether the contract had been properly completed, and whether practical completion had been reached.
The Ricchettis further contend that the Senior Member, by stating that ‘the [Ricchettis], seemingly not satisfied with the opinion of the building expert engaged by them … decided to again fuel the fires of disputation by putting on another expert report…’,[10] has demonstrated a view which is unfavourable to them to a degree which suggests bias; and, that this is also consistent with the factual errors made in relation to the stormwater drain, such as a finding that Mr Bruno Ricchetti designed the stormwater system.
[10]Lanbuilt Pty Ltd v Ricchetti [2010] QCAT 686, [12].
Lanbuilt Pty Ltd principally argues that the Ricchettis are simply ‘re-agitating the same case that it ran in the primary proceeding’[11] and that the submission that the stormwater drainage system was not built in accordance with the design plans is flawed. In particular, Lanbuilt submits that the design plans were defective in any event, a conclusion said to be based on the joint findings of the expert evidence of Mr Brooke, and Mr Messer.[12]
[11]Submissions on behalf of the Respondent filed 22 March 2011, [3].
[12]Submissions on behalf of the Respondent filed 22 March 2011, [12].
Further, Lanbuilt argues that there is no public advantage in obtaining a ruling as to whether the practical completion stage had been reached, where there is an alleged failure to discharge contractual obligations as contended by the Ricchettis in this matter.[13]
[13]Submissions on behalf of the Respondent filed 22 March 2011, [17].
The Merits
The factual errors made by the learned Senior Member in relation to Mr Bruno Ricchetti designing the stormwater drain, and that Lanbuilt built the drain in accordance with the drawings, have no bearing on the Senior Member’s preference for the evidence of Mr Messer. The submissions advanced by the Ricchettis in relation to the Senior Member’s error as to findings of fact will not, for this reason, alter the position that the stormwater drain was defective; and the reasons provided by the Senior Member as to why Mr Messer’s evidence is preferred are clearly set out in the decision.[14]
[14]Lanbuilt Pty Ltd v Ricchetti [2010] QCAT 686, [18].
The Appeal Tribunal is not persuaded that the Senior Member has shown bias, or prejudice, against the Richettis. A reference made by the Senior Member to the ‘fires of disputation’, in a passage highlighted for the Ricchettis, appears to be an attempt (albeit unnecessary) to articulate a feature of the history of the proceedings – namely, that the Ricchettis engaged another expert opinion.
The Appeal Tribunal is satisfied that sufficient reasons have been given by the Senior Member and, as referred to in the decision of Littlejohn v Julia Creek Town and County Club Inc,[15] the ‘essential ground or grounds upon which the decision rests [have been] articulated’.[16] The many typographical errors and material errors in the decision are to be regretted, but they are errors of fact, not law – and, while disappointing, do not have the effect of destroying the efficacy of the decision.
[15][2010] QCA 361.
[16]Littlejohn v Julia Creek Town and Country Club Inc [2010] QCA 361, [31] citing Soulemezis v Dudley (Holdings) P/L (1987) 10 NSWLR 247, [280].
The Appeal Tribunal must consider whether the Senior Member erred in failing to make a finding that practical completion had or had not been reached. It was found that practical completion had been reached on 9 August 2007.[17] If practical completion had not been reached, the relevant issue is whether the Ricchettis would be in a different position. The arguments advanced on behalf of the Ricchettis are not without substance: a significant defect, like the stormwater drain, might be more than minor.[18]
[17]Lanbuilt Pty Ltd v Ricchetti [2010] QCAT 686, [33].
[18]Outline of Argument for the Applicant filed 21 March 2011, [112].
However the stormwater drain, although defective, worked (in the sense it was functional) and required rectification costing $16,000.00 – consistent with the findings of the Senior Member that it should properly be categorized as a minor defect. It was reasonably open for the Senior Member to make such a finding, notwithstanding any error of fact identified in the reasons for the decision.
It was argued, on behalf of the Ricchettis, that it was a term of the contract that the stormwater drain be constructed in accordance with the drawings, and that this was not done. Therefore, it is said, there can be no practical completion and Lanbuilt, in accordance with the principles in Highmist Pty Ltd v Tricare Ltd,[19] is unable to seek final payment.
[19][2005] QCA 357.
If, however, the stormwater drain was a serious error and not a minor defect, and practical completion had not been reached, then the Ricchettis would be in no better position: they must give credit to Lanbuilt for sums due under the contract, on the premise that the Ricchettis can not be placed in a better position had the contract been performed properly.[20]
[20]Nguyen v Luxury Design Homes Pty Ltd [2004] NSWCA 178; see Chesire and Fifoot, Law of Contract (9th Aus Ed, 2008) p 1081.
Had the Senior Member found that the changes in the stormwater design were serious and that it would, therefore, be reasonable for the Ricchettis to rely on that defect by Lanbuilt as something evincing an intention to no longer be bound by the contract, in the absence of any variation sought, the evidence showed that the parties nevertheless continued to exchange correspondence which is indicative of an intention that the contract was to ‘remain on foot’.[21]
[21]Submissions on behalf of the Respondent filed 22 March 2011, [25].
In particular, the Ricchettis did not elect to terminate the contract – even though, as the Ricchettis assert, by correspondence dated 20 September 2007 Lanbuilt repudiated the contract. Lanbuilt Pty Ltd is still, however, entitled to recover its reasonable costs for the work performed.
The Appeal Tribunal has also considered the measure of damages, had the Senior Member determined that practical completion had not been reached. Where the damages would also include any claim for liquidated damages, such a claim would be insignificant. The additional amount for GST on the rectification costs which the Ricchettis contend was not included as a calculation in the Respondent’s favour in the final payment to Lanbuilt would also be insignificant and, for the purposes of establishing the necessary elements to grant leave to apply, does not enliven the appeal jurisdiction.
In relation to the Ricchettis’ submission that there is a public benefit, in this matter, in giving leave to appeal to address the question whether the practical completion stage can be reached where there is an alleged failure to perform contractual obligations, I am not persuaded that is appropriate here. There is no apparent benefit where, based on the factual circumstances in this matter, the parties have by virtue of an exchange of correspondence acted as though the contract is to continue (notwithstanding the contention that Lanbuilt failed to discharge its contractual obligations).
Conclusion
The Ricchettis have not been able to establish the necessary elements to persuade me that this is an appropriate case in which there should be leave to appeal. They have not been able to establish that leave is necessary to correct a substantial injustice, or that there is a question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage. Leave to appeal should be refused.
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