Smith v Condie
[2010] QCAT 365
•29 March 2010
CITATION: Smith v Condie [2010] QCAT 365
| PARTIES: | Carl Stephen Smith |
| v | |
| Gary John Condie |
APPLICATION NUMBER: BD340-09
| MATTER TYPE: | Building matters |
| DECISION ON THE PAPERS OF: | Dr Bridget Cullen Mandikos |
DELIVERED ON: 29 March 2010
DELIVERED AT: Brisbane
ORDERS MADE: 1. QCAT is vested with jurisdiction to hear
the dispute in this matter.
2.The parties are ordered to attend a
Compulsory Conference, before a Member of the Tribunal, on 28 April 2010
| CATCHWORDS : | Jurisdiction of the Commercial and Consumer Tribunal to resolve building dispute where settlement agreement alleged; Objectives of QBSA dispute resolution process; s71A and s72 Queensland Building Services Authority Act 1991; Anderton v Parkes Horticultural Services Pty Ltd (1997) Qld Law Rep 48; Concept Concrete Constructions Pty Ltd v Kurtz, A&C [2008] QCCTB 60; Skaines v Kovac Enterprises Pty Ltd [2006] QSC 120 |
Background
On 15 July 2009, Carl Stephen Smith (“Mr Smith”) filed a Domestic Building Dispute Application with the Commercial and Consumer Tribunal (“the CCT”). Mr Smith alleged that the Respondent, Garry John Condie (“Mr Condie”), breached the terms of a BSA Minor Works Building Contract entered into between himself and Mr Condie in a number of respects.
Mr Condie filed a defence and counterclaim in the CCT, arguing (amongst other matters) that the CCT lacked jurisdiction to hear the matter.
The CCT has amalgamated into the Queensland Civil and Administrative Tribunal (“QCAT”). QCAT now hears and decides all matters previously dealt with by the CCT: section 256 Queensland Civil and Administrative Tribunal Act 2009 (“the QCAT Act”). As this is a matter to which the transitional provisions of the QCAT Act apply, QCAT has only the functions and decision making power that existed in the CCT: section 217 QCAT Act.
Decision on jurisdiction to be made “on the papers”
Following a review before QCAT on 27 January 2010, it was ordered that the Tribunal would make a decision on the papers with respect to jurisdiction, and the parties were ordered to file and serve any written submissions they wished the Tribunal to consider. Both Mr Smith and Mr Condie have filed materials outlining their positions.
In brief terms, Mr Condie asserts that Mr Smith is not entitled to raise the matters contained in his Domestic Building Dispute Application with the Tribunal, as he says that these matters formed the basis of a settlement agreement between the parties. Mr Smith says that there was no “settlement agreement” of the dispute now before the Tribunal, and argues that he was following the practice and procedure set down by the Queensland Building Services Authority (“the QBSA”). Specifically, Mr Smith argues that the payments he made to Mr Condie were not payments made in settlement, but were payments made as a precondition to the QBSA’s issuing a Direction to Rectify to Mr Condie.
Timeline of relevant events
| 11 November 2008 | Mr Smith and Mr Condie enter into a BSA Minor Works Contract. |
| 5 December 2008 | Mr Smith files a complaint with the QBSA alleging defective work. |
| 8 December 2008 | QBSA sends Mr Smith’s complaint to “Resolution Services” Division. |
| 19 December 2008 – late 2008 | Termination of the contract by Mr Smith or Mr Condie (parties dispute the issue of entitlement to terminate, but agree that the contract has been terminated). |
| 18 February 2009 | Mr Condie’s Solicitor sends letter to QBSA, attaching letter delivered to Mr Smith’s then Solicitors. |
| 2 March 2009 | Onsite meeting with QBSA Inspector, Mr Blair Lowrie (“Mr Lowrie”). |
| 3 March 2009 | Mr Smith pays Mr Condie $7,101.00. |
| 4 March 2009 | Mr Lowrie prepares internal BSA report. |
| 9 March 2009 | The QBSA issues a Direction to Rectify. |
| 31 March 2009 | Mr Smith contacts the QBSA and advises that he does not want to continue with the BSA directed rectification, as he has been advised that he will bear costs of nearly $12,000.00 over and above the costs of the BSA directed rectification. |
| 31 March 2009 | Mr Condie contacts the QBSA and advises that he has agreed to Mr Smith’s request to no longer take part in the rectification. |
| 1 April 2009 | BSA closes file, noting that “both the Owner and Licensee have reached an amicable agreement with the regards the rectification Work identified on the Direction to Rectify dated 9/3/2009”. |
| 15 July 2009 | Mr Smith files Domestic Building Dispute Application in the CCT. |
| 3 August 2009 | Mr Condie files defence and counterclaim in the CCT. |
| 27 January 2010 | QCAT orders decision related to jurisdiction to be made on the papers. |
Review of the QBSA file in this matter
I have directed the QBSA to provide QCAT with their file No. 3-5687-08 in this matter, and they have done so. That file contains Mr Lowrie’s 4 March 2009 internal report, prepared after he attended the building site in issue here on 2 March 2009. The purpose of Mr Lowrie’s attendance was to inspect Mr Condie’s work and determine whether a Direction to Rectify would issue by the QBSA. Mr Lowrie summarised the inspection as follows:
“As part of the BSA intervention and discussions held onsite with the relevant parties the Owner paid the Licensee $7,101.00 consequently reducing the Amount Owing to the Licensee to $6,000.00. This amount represents the fair and reasonable cost of rectification of the defective Building Work as detailed below. Owner agreed to pay the amount still owning [sic] on satisfactory rectification of the defect items.”
It is this discussion that Mr Condie asserts forms the basis of an:
“[A]ccord” by compromise made on 2 March 2009 and “satisfaction” by the payment of monies by the Applicant to the Respondent and the Respondent performing further works at the Applicants home as a consequence.”
(Mr Condie’s submissions dated 22 February 2010, paragraph 29).
Mr Condie alleges that this “compromise” results in a lack of jurisdiction by the CCT, and therefore QCAT, to hear this dispute.
Additionally, the QBSA file contains correspondence delivered to the QBSA by the solicitors then acting for Mr Smith and Mr Condie (by Order of QCAT dated 21 December 2010, both parties have been ordered to be self-represented). On 18 February 2009, prior to the onsite meeting with Mr Lowrie, Mr Condie’s then solicitor, Ms Karen Schwede of Lawyers QLD, wrote to the QBSA, indicating:
“Our experience is that the BSA takes into account contractual issues between the parties when investigating complaints for that purpose we attach a letter from our firm to Mr and Mrs Smith’s Solicitors”.
Ms Schwede’s 18 February 2009 correspondence attaches a letter delivered by Lawyers QLD to the solicitors then acting for Mr Smith, Hollingworth & Spencer, wherein Ms Schwede sets out Mr Condie’s version of the dispute. Additionally, Ms Schwede provided the QBSA with a copy of the letter sent by Hollingworth & Spencer to Mr Condie, purporting to terminate the contract on 19 December 2008.
Limited role of the QBSA Resolution Services Division
The QBSA Resolution Services Division did not have jurisdiction to adjudicate contractual matters between the parties. Ms Schwede’s comments that it has been her experience that the BSA takes into account contractual issues must be viewed in light of the role of the QBSA. The QBSA is a statutory authority established by virtue of section 5 of the Queensland Building Services Authority Act 1991 (“QBSA Act”), for purposes of regulating the building industry. Within these parameters, the QBSA is charged with fulfilling the objects of the QBSA Act, as set out in section 3:
The objects of this Act are—
(a) to regulate the building industry—
(i) to ensure the maintenance of proper standards in the industry; and
(ii) to achieve a reasonable balance between the interests of building contractors and consumers; and
(b) to provide remedies for defective building work; and
(c) to provide support, education and advice for those who undertake building work and consumers.
There is no requirement for a building owner unsatisfied with the work a contractor has performed to proceed through the QBSA Resolution process. In this regard, it is also not necessary for the QBSA to have issued a Direction to Rectify, or for the QBSA to have had any involvement, to enable a building owner to make a claim against the builder in the CCT, or in QCAT. This is because the role of the QBSA is regulatory in nature, and is a parallel process to the role of the Tribunal, with different objectives. This distinction of roles, and of processes taken, is acknowledged by the QBSA on its website, extracted below.
“What is defective building work?
QBSA's Rectification of Defective Work Policy provides information on the types of defective building work BSA is able to investigate and the time limits that apply to notification, and investigation, of these defects - click here to read the policy.
This policy provides information on:
Tier 1 Defective Work (grossly defective)
Category 1 Defective Work (leaking roof, shower, health and safety issues, structural inadequacy etc)
Category 2 Defective Work (sticking doors or windows, cracking of plasterboard etc)
What can BSA not assist with?
A list of specific exemptions can be found in the Queensland Building Services Authority Regulation 2003 - s5. Generally BSA can not investigate complaints where:
The work carried out is valued at $3,300 or under. Note - plumbing, drainage, gas fitting, termite management system installation, building design and completed building inspections are exempt from this threshold and can be investigated regardless of the value of work.
Where the complaint is over fulfilment of contract conditions or disputed payment of monies.
The Queensland Civil and Administrative Tribunal (QCAT) provides a cost effective dispute resolution service (and mediation) for disputes of a contractual nature. There may also be remedies available to you under your contract (e.g. liquidated damages where you receive a prearranged amount of money per week if the contractor fails to complete the project on time), or, in certain circumstances (e.g. a major blowout in costs or construction time) termination of your contract.Note - you should seek legal advice to investigate your options BEFORE taking any steps. This is particularly important if you intend to terminate your contract.
Lodging a complaint
1. Can BSA Help? - Check that BSA is able to assist with your complaint (see above) and that you are within the timeframes in which an investigation can be carried out.
2. Communication - Try to resolve the problem by talking to the contractor and clearly identifying all individual items you believe are defective or incomplete. You should provide reasonable access to the site to give the contractor an opportunity to address your concerns.
3. Written Notification - If this is not successful put your concerns in writing to the contractor (you should keep a copy as if you choose to lodge a complaint BSA will need to see written confirmation that you notified the contractor) giving them a reasonable timeframe (e.g.14 days) to rectify the defective work.4. Lodgement of Complaint - If the contractor does not rectify the defective work or the negotiations are not successful you should complete a Residential and Commercial Building Complaints form. It is important that all the requested information and attachments are provided as failure to do so may result in processing delays - a checklist is provided on the form which identifies the required documentation.
5. Negotiation - Once the complaint is assessed by BSA and accepted a site inspection may be carried out by a BSA Building Inspector or Technical Consultant. Note - both parties are encouraged to try to resolve the problems prior to a site inspection.
6. Resolution - By assisted negotiation or direction to the contractor to rectify (in most cases this requires a 28 day minimum rectification period).
If a contractor fails to comply with a direction: BSA may commence disciplinary action in the QCAT or Magistrates Court
If residential construction work (covered by a Certificate of Insurance) have the work rectified as a claim under the relevant policy terms and conditions”
The QBSA inspection was for purposes of determining whether a Direction to Rectify would issue
In arranging the site inspection, and in issuing the Direction to Rectify (and requiring Mr Smith to pay a further sum to Mr Condie), Mr Lowrie was not acting as a mediator to resolve all the matters in conflict between Mr Smith and Mr Condie. Rather, Mr Lowrie was acting on the complaint made to the QBSA about the allegedly defective building work, and in accordance with section 71A of the QBSA Act:
“Dispute resolution before rectification of building work ordered
(1) This section applies to a consumer who wants the authority to consider whether to direct rectification of building work under section 72.
(2) The consumer must apply in writing to the authority stating—
(a)the name of the person who carried out the building work; and
(b)details of the building work the consumer considers is defective or incomplete; and
(c)other details the authority reasonably requires to consider the matter.
(3) The application must be accompanied by the fee prescribed under a regulation.
(4) Before it considers whether building work is defective or incomplete, the authority may require the consumer to comply with a process established by the authority to attempt to resolve the matter with the person who carried out the building work.”
Commonly, and in keeping with s71A(4) of the QBSA Act, the QBSA will require that an owner pay fair market value for the work that is the subject of the request for the Direction to Rectify before issuing same. This practice is also in keeping with section 3(a)(ii) of the QBSA Act, to balance the interests of building contractors and consumers. This is precisely what has happened in this case, as reflected in Mr Lowrie’s 4 March 2009 internal report (the particulars of which are set out at paragraph 6, above).
Following an investigation, the QBSA inspector will then decide whether (or not) to issue a Direction to Rectify, in accordance with section 72 of the QBSA Act. This is not a mediation process of the issues in dispute between the homeowner and builder, rather, is part of the QBSA’s role as industry regulator. Section 72 provides (relevant portions extracted):
“72 Power to require rectification of building work
(1) If the authority is of the opinion that building work is defective or incomplete, the authority may direct the person who carried out the building work to rectify the building work within the period stated in the direction.
(2) In deciding whether to give a direction under subsection (1), the authority may take into consideration all the circumstances it considers are reasonably relevant, and in particular, is not limited to a consideration of the terms of, including the terms of any warranties included in, the contract for carrying out the building work.”
Ms Schwede’s comments that the QBSA will take into account contractual matters are consistent with section 72 (2) above. However, this can not be translated to mean that the QBSA undertakes to resolve contractual matters in building disputes, properly within the domain of the CCT, as part of this process.
Jurisdiction of the CCT, and therefore of QCAT
As Mr Condie asserts in his written submissions, it is well settled that the CCT, and therefore QCAT, does not have jurisdiction to hear matters where it would be necessary for the Tribunal to make a decision regarding the nature of an agreement: Anderton v Parkes Horticultural Services Pty Ltd (1997) Qld Law Rep 48 (“Anderton”). In Anderton, McGill DCJ held:
“Accordingly in my opinion, a dispute between the parties to a settlement agreement about that agreement is not one within para. (a) of the definition of ‘domestic building dispute’ merely because the dispute settled by the agreement was within that definition, or because it would be necessary to have regard to matters which occurred in the course of that earlier dispute, or in the performance of domestic building work, in order to resolve the dispute.”
In Concept Concrete Constructions Pty Ltd v Kurtz, A & C [2008] QCCTB 60 “Concept Concrete”, then Member Lohrisch accepted the submissions of the respondent therein, alleging that the CCT did not have jurisdiction to determine the nature and effect of settlement or compromise agreements. The respondents’ submissions in Concept Concrete were cast in the following terms (at paragraphs 16 and 17):
“Any decision regarding the nature of the initial agreement or agreements does not concern a claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable domestic work and therefore does not fall within the definition of “Domestic Building Dispute” in the QBSA.”
Was there a compromise agreement?
While I accept Mr Condie’s submissions that QCAT does not have jurisdiction in circumstances where a compromise agreement can be said to exist, I do not share his view that there was any agreement here. In circumstances where no such agreement can be demonstrated on the evidence, and I think this the case here, the Tribunal retains its jurisdiction. This view is consistent with the observations of His Honour Justice Fryberg in Skaines v Kovac Enterprises Pty Ltd [2006] QSC 120 (“Skaines”). Skaines was an application in the Supreme Court to determine if the CCT had jurisdiction to consider whether an application involving a building dispute had been compromised. In Skaines, it was alleged that there had been a mistake as to the compromise reached in that the applicant made an offer to settle the matter for a payment of $80,000.00, instead of $8,000.00 that appeared due to the offer containing a typographical error. Subsequently, the $8,000.00 offer was withdrawn and the offer for $80,000.00 issued. However, the respondent purported to accept the more favourable first offer of $8,000.00 and it was that dispute that remained unresolved. His Honour said:
“In the present case, it (the Tribunal) can only determine its jurisdiction by resolving the question whether the dispute which undoubtedly existed at the time the proceedings were commenced in the Tribunal had ceased to exist. It can only do that deciding whether the compromise alleged by Kovac was indeed a compromise, whether the agreement for compromise has been terminated, or whether for some other reason the alleged compromise became ineffective. I intend these expressions in a very general sense. These matters must necessarily be resolved in order to determine the mixed question of fact and law which governs the jurisdiction of the Tribunal: that is, whether there now exists a dispute which founded the proceedings.”
In this case, the Tribunal must, in accordance with Skaines, resolve the threshold question as to whether a compromise agreement had arisen at all. Notably, in Skaines, the applicant’s proceeding was already commenced in the CCT at the time of the alleged compromise. In contrast, here, Mr Smith commenced his proceeding several months after the alleged compromise. It is my view that there was no compromise agreement, and in the circumstances, the participation by Mr Smith and Mr Condie in the QBSA process could never be seen as a mediation process designed to resolve all of the issues in dispute. Rather, the process Mr Smith and Mr Condie took part in assists the QBSA in resolving the dispute before the QBSA – that is, the determination by the QBSA as to whether a Direction to Rectify, or some other disciplinary action, should be taken against Mr Condie.
It is of note that Mr Condie has not provided the Tribunal with any evidence of any written terms of settlement. It is my view that the email from Mr Smith to the QBSA dated 31 March 2009, indicating that he did not wish to continue with the QBSA directed rectification is not evidence that Mr Smith had entered into a settlement agreement. In contrast, it could be seen as evidence that Mr Smith had now formed the view that participation in the QBSA process would not advance his dispute, and he intended to now proceed in a forum that could make a final determination about the building dispute.
The allegations made in Mr Smith’s subsequently filed Domestic Building Dispute Application shed some light on the dispute. Mr Smith alleges that Mr Condie performed work that he was not licensed to do, and further alleges that Mr Condie failed to provide him with plans. He further alleges that as Mr Condie was not licensed to perform the rectification work, he obtained a quotation from a licensed contractor, Mr Jeffrey Hills and Associates Pty Ltd (“Mr Hills”). It is then alleged that:
“Jeffrey Hills also advised us that Garry Condie had not properly plumbed the stormwater drainage to the street, so his quote including finishing the plumbing of the stormwater drainage. The quote came to $10,530 + GST, or $11,583. This meant that in order to complete the works and rectify the driveway we would have had to pay Garry Condie $28,236 plus Jeffrey Hills $11,583 (a total of $39,819). Since we were limited to a budget and had already committed $60,000 to the building of the deck and carport, we were not in a position to pay the extra money required to fix the driveway. We also felt that fixing the driveway to make it fit for purpose should have been included in the BSA direction to rectify works issued to Garry Condie. Being put in this difficult situation, we contacted Blair Lowrie from the BSA and told him that we could not afford to go ahead with the BSA direction to rectify the works because it would leave us with a driveway that would cost us an extra $11,583 to fix.”
Mr Smith disputes the interpretation Mr Lowrie placed on the exchange of correspondence between Mr Smith, Mr Condie and Mr Lowrie on 31 March 2009, as being “an amicable agreement was reached regarding the items listed in the BSA’s direction dated 9/3/2009”. Mr Smith’s letter to Mr Lowrie indicated that:
“Going ahead with the BSA directed rectification work without undertaking the additional work quoted by Jeffrey Hills would still leave us with a driveway that we cannot use due to inadequate room and turning circle, and stormwater drainage that does not meet council requirements. Therefore completing this work would be pointless.”
Mr Lowrie’s description of this correspondence as “amicable” was, in my view, a most unfortunate choice of language that missed the point of what Mr Smith was saying. Regardless, the meeting onsite was for purposes of determining whether a Direction to Rectify would issue.
Conclusion
In these circumstances, the alleged settlement agreement pointed to by Mr Condie could never be viewed as having had more scope than resolving the complaint made to the QBSA, particularly when Mr Smith had not yet filed an Application in the CCT. The QBSA complaint may have resulted in regulatory, or disciplinary, action by the QBSA. However, the QBSA complaint, though based upon some of the same matters that might have been brought before the CCT, was a parallel process to the making of an application in the CCT.
Thus, if the factors Mr Condie points to could be seen as a settlement agreement, it resolved a potential conflict between Mr Condie and the QBSA; that relating to a decision relating to the issuing of a Direction to Rectify. While a decision by the QBSA to issue (or not to issue) a Direction to Rectify may have a practical effect on the homeowner, it does not affect any contractual rights that exist between a homeowner and builder. These issues fall squarely within the jurisdiction of the Tribunal, whether the CCT or now QCAT.
Orders
QCAT is vested with jurisdiction to hear the dispute in this matter.
The parties are ordered to attend a Compulsory conference, before a Member of the Tribunal, on 28 April 2010
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