Sovereign Homes Qld Pty Ltd v Edwards

Link copied
Case Copied 58 min read

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL


CITATION:

Sovereign Homes Qld Pty Ltd v Edwards [2018] QCAT 276

PARTIES:

SOVEREIGN HOMES QLD PTY LTD
(applicant)
v

DONALD BRUCE EDWARDS

(respondent)

APPLICATION NO/S:

BDL253 -15

MATTER TYPE:

Building matters

DELIVERED ON:

21 August 2018

HEARING DATE:

25 October 2017; 26 October 2017; 27 October 2017

HEARD AT:

Brisbane

DECISION OF:

Member King-Scott

ORDERS:

The Tribunal directs by way of interim orders that:

1.   Donald Bruce Edwards pay Sovereign Homes Qld Pty Ltd $46,155.20 plus interest to be assessed  in respect of its claim;

2.   Sovereign Homes Qld Pty Ltd pay Donald Bruce Edwards the sum of $79,938.30 in respect of his Counter-application;

3.   The directions to pay are stayed until further argument in relation to interest, costs and the form of final orders;

4.   The parties file written submissions as to those matters as follows:

(a)   Sovereign Homes Qld Pty Ltd by 4.00 pm 21 September 2018;

(b)   Donald Bruce Edwards by 4.00 pm 5 October 2018.

5.   The matter is adjourned for further oral argument, if any, to a date to be fixed.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – GENERAL – builder responsible for change in design of box gutter – failure to carry out in accordance with plans and specifications – Practical Completion – Certificate signed by Owner – Owner in possession – sufficiency of certificate as a Notice of Practical Completion – purpose of setting a date for Practical Completion – damage to works by weather events prior to practical completion – builder denied liability – insurance monies paid out to builder after practical completion – defects

Domestic Building Contracts Act 2000 (Qld) (repealed)

B.P. Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783
Baltic Shipping Company v Dillon (1993) 176 CLR 344 Batty v Metropolitan Property Realisations Ltd [1978] QB 554
Bellgrove v Eldridge (1954) 90 CLR 613
Bonchristiano v Lohmann [1998] 4 VR 82
Burke v Lunn [1976] VR 268
Chalet Homes Pty Ltd v Kelly [1978] Qd R 389
Coshott v Fewings Joinery Pty Ltd BC 960 2970 NSWCA 15 July 1996 (unreported)
Falko v Jones McKewen & Co Pty Ltd [1977] BR 447
Faulks v New World Constructions Pty Ltd [2013] QCAT 658
Hutchinson v Harris (1978) 10 BLR 24
Robinson v Harman (1848) 154 ER 363
Ruxley Electronics and Construction v Forsyth (1996) AC 344
Serisier Investments Pty Ltd v English [1989] 1 Qd R 678
Sovereign Homes Pty Ltd v Edwards [2016] QCAT 461
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 83 ALJR 390
Tranquility Pools & Spas v Huntsman Chemical Company Australia Pty Ltd [2011] NSWSC 75
Willshee v WestCourt [2009] WASCA 87

APPEARANCES & REPRESENTATION:

Applicant:

P W Evans, solicitor of McKays Solicitors

Respondent:

B J Saal, solicitor of Saal & Associates Lawyers

REASONS FOR DECISION

  1. The Respondent, Donald Bruce Edwards, is the owner of a residential home located at 35 Cameron Street, Fairfield in Brisbane hereafter referred to…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Sovereign Homes Qld Pty Ltd v Edwards and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2018] QCAT 276
Decision Date

CaseChat Overview and Summary

Sovereign Homes Qld Pty Ltd, a building contractor, initiated legal proceedings against Donald Bruce Edwards, the homeowner, in the Queensland Civil and Administrative Tribunal. The dispute arose from a renovation project involving the construction of an extension to the existing house. The contractor sought payment for the final amount owed under the contract, while the homeowner contested the validity of the Practical Completion Certificate, raised claims for defects, and sought compensation for damages caused by weather events.

The legal issues included the validity of the Practical Completion Certificate as a Notice of Practical Completion, the contractor's liability for defects and damages, and the homeowner's entitlement to compensation. The court examined whether the certificate was sufficient to mark the completion of the works, the extent of the contractor's responsibility for defects, and the homeowner's right to withhold payment due to alleged defects and damages. The court also considered the effect of weather events on the works before Practical Completion and the contractor's liability for insurance monies paid after Practical Completion.

The court found that the Practical Completion Certificate was sufficient to mark the completion of the works, and the contractor was not liable for defects and damages caused by weather events prior to Practical Completion. The court held that the homeowner's claims for defects and damages were not substantiated, and the contractor was entitled to payment for the final amount owed under the contract. The court also found that the homeowner's refusal to allow the contractor to complete any defects work and his refusal to make any decision about the insurance money until after the decision of the Tribunal was unreasonable.

The Tribunal ordered that Donald Bruce Edwards pay Sovereign Homes Qld Pty Ltd $46,155.20 plus interest to be assessed in respect of its claim. The Tribunal also ordered that Sovereign Homes Qld Pty Ltd pay Donald Bruce Edwards the sum of $79,938.30 in respect of his Counter-application. The directions to pay were stayed until further argument in relation to interest, costs, and the form of final orders. The parties were directed to file written submissions on those matters. The matter was adjourned for further oral argument, if any, to a date to be fixed.

Orders

Orders of the court

The Tribunal directs by way of interim orders that:

1. Donald Bruce Edwards pay Sovereign Homes Qld Pty Ltd $46,155.20 plus interest to be assessed in respect of its claim;

2. Sovereign Homes Qld Pty Ltd pay Donald Bruce Edwards the sum of $79,938.30 in respect of his Counter-application;

3. The directions to pay are stayed until further argument in relation to interest, costs and the form of final orders;

4. The parties file written submissions as to those matters as follows:

(a) Sovereign Homes Qld Pty Ltd by 4.00 pm 21 September 2018;

(b) Donald Bruce Edwards by 4.00 pm 5 October 2018.

5. The matter is adjourned for further oral argument, if any, to a date to be fixed.

Background

Background to the litigation

Initial discussions about the renovation commenced on 6 November 2013 between Mr Firrell and Mr Edwards and his partner Ms Tina Ogilvie. A further five meetings, to determine the scope of the works, took place during the period up to the time of signing of the contract. On occasions, Sovereign’s Design Manager, Mr John Flatley was involved in discussions. Work commenced on 25 July 2014.Background The renovations involved the construction of an extension to the existing house adding a fourth level with three bedrooms, a bathroom, separate toilet and retreat for the children. Mr Edwards and his family intended to reside in the house during construction. Indeed, Mr Edwards intended to do most of the painting of the new work. Work progressed satisfactorily until the occurrence of the first of two weather events that occurred in August 2014. On that occasion, water penetration caused the ceilings in level 2 of the living area and laundry to collapse. Sovereign rectified much of the damage but Ms Ogilvie says the genesis of the breakdown in the relationship between them and Mr Firrell can be traced back to his conduct in response to the damage. [1]Exhibit 1, Volume 3, Ms Ogilvie’s statement, page 548.Ms Ogilvie says it is a reason why they withheld payment subject to the final claims being settled.[1] The relationship soured further, in November 2014, when Mr Edwards emailed Mr Firrell and Mr Dayne Marshall, Sovereign’s Project Manager, to inform them that a floor laying subcontractor had not arrived on site as scheduled and that he was withdrawing access to the site. Which he did.Claim and Cross Application Sovereign’s legal advisors have succinctly summarised these proceedings in their Overview contained in written submissions made on its behalf. Mr Edwards’ lawyers agree that the Overview is an accurate summary. From the summary the following issues can be identified: Sovereign seeks payment of an amount owing pursuant to the contract. The claim comprises:(a)The Final Claim of $46,155.20;(b)Interest at 18% per annum simple interest calculated as per clause 32.1 of the General Conditions of the Contract from the date when the payment was due, namely 11 December 2014;(c)Costs pursuant to clause 33 of the Contract being legal fees of Sovereign on a solicitor and own client basis, associated with recovering the final claim owed under the Contract. Mr Edwards in his Amended Response, inter alia: (a)Says that Practical Completion had not been completed; (b)Makes a cross claim in the sum of $133,379.30 (‘the Sum’);(c)That sum relates to various alleged defects which are listed in the schedules of the Conclave Report, more particularly, the defects comprise Schedule D and Schedule E (‘the Defects Claim’) and Schedule C (‘the Contractual Claim’) which relate to contractual defects, being work undertaken not in accordance with the Contract;(d)Schedule D of the Carpenter Report amounts to $6,568.28. Of that sum the claim has already been reduced as part of the conclave and is detailed in the Conclave Report by the experts. The amount of the claim has reduced by $1,964.93 making the maximum claim approximately $4,603.35;(e)Schedule E amounts to $1,847.79 in the Carpenter Report which is disputed for the reasons set out in the Conclave Report;(f)Schedule C of the Carpenter Report comprises alleged breaches of the Contract and that the work done is alleged to have not been done as per the obligations cast on Sovereign by the Contract. This is in the sum of $23,301.13. This section has been modified as part of the Conclave Report as follows and excluding gutters (where there is a margin of $3,500) the maximum amount of the claim has reduced by $10,851.13 making the maximum claim approximately $12,450;(g)The Sum also relates to an amount concerning an insurance payment made to Sovereign for damages that occurred to the House from two different storms;(h)The Sum also relates to consolation damages for the Defects Claim in the sum of $20,000;(i)Finally, the Sum relates to damages for delay, based on the allegation that Practical Completion has never occurred and, therefore, Sovereign is liable to pay a daily rate, for over two years;(j)The total for the Defects Claim and the Contractual Claim, if there is a liability, which is denied by Sovereign for most items, is a maximum sum of $18,901.24 comprised of:(i) Defects Claim (schedules D and E) - $4603.35 & $1847.79; and(ii) Contractual Claim (schedule C) - $12,450.10.(k)Mr Edwards also alleged fraud, as well as misleading and deceptive conduct, however, at the hearing he:(i) withdrew only the allegation of fraud at the end of the trial;(ii) led no evidence, nor put to any witness any allegation of, fraud; and(iii) led no evidence, nor put to any witness, any allegation of misleading or deceptive conduct. (l)Various other claims for amounts, such as whatever the project management component of the Contract was, have been abandoned;(m)There have been offers by Sovereign, including an open offer made in the weeks leading up to the hearing, to pay the insurance money to Mr Edwards, less the amounts allowed by the insurer to compile the same and for work already done, but this has been refused; and(n)Moreover, Mr Edwards in his affidavit expressly states that he refuses to make any decision about the same until after he has had the decision of this Tribunal handed down. In this regard, he has also refused access to Sovereign to complete any defects work and swears in his affidavit evidence that there was ‘already shattered relations’ from at least September 2014.

Evidence

Evidence Before The Court

Mr Edwards would not be precluded for claiming for defective work under clause 26 or under a statutory warranty under clause 35 of the Contract, if the insurance work was not completed by Sovereign after settlement of the claim.Expert evidence A conclave of experts was held on 15 May 2017. At that conclave, certain points were agreed, and the hydraulic experts prepared a further report dated 14 August 2017. The experts were:(a)Gary Carpenter a carpenter and joiner by trade but having wide experience in the construction industry;(b)Christopher Boyle, a building consultant with wide practical experience in the building industry as well as having once held the position of Executive Manager of Resolution and Regulatory Services for the Queensland Building Construction Commission;(c)Neil Blair of Neil Blair Associates Pty Ltd a licensed plumber, drainer and gas fitter and hydraulic consultant; (d)Alan Kwan, a hydraulic engineer; and(e)Richard Ray, quantity surveyor and director of Accurate Estimating Services. The experts gave their evidence together on the second day of the hearing and were cross-examined.Schedule A This claim related to the Hail Event on 27 November 2014. In Mr Edwards’ email of 5 January 2015, which was the first indication of Mr Edwards’ dissatisfaction with Sovereign following Practical Completion, he detailed his claim for rectification of the storm damage not already rectified. He advised he was withholding $7,000.00. The items were:(a)Hire of a wet dry vacuum cleaner at $74;(b)Replacement of tube and diffuser in skylight;(c)Replacement of carpet in bedroom 3 which had been replaced but was not the same carpet as the other 2 rooms; and(d)Damage to sliding window frame in retreat and bedroom 3. In a letter to the Loss Adjuster dated 5 March 2015,[28] Sovereign set out the damage to the house following the hailstorm on 27 November 2014. Mr Marshall was the author of the letter and stated that following inspection the following was revealed:1. Several of the windows have been damaged (sic) to the aluminium frame and will need replacement.2. Some of the external flashings above the windows that have been integrated within the cladding have been damaged beyond repair and will need to be replaced. 3. Some of the external cladding has, in particular the flat FC sheeting and some of the timber work surrounding windows and cover beads, been dented by the hail and will need replacing.4. The roofing and cappings have been damaged and will need replacement.5. The metal facia and barges in particular areas have been dented and need replacing.6. There is a broken window that has since been repaired that need replacement.7. The skylight in the bathroom was broken and needed replacement. 8. There has been a piece of timber dislodged from the string on the veranda stairs.[28]Exhibit 1, Volume 3, Attachment 24, page 91. Sovereign quoted $76,927.40 as the cost of repairs, QBE assessed $70,594.18. I do not accept Mr Edwards’ contention that Mr Firrell or Sovereign intended to ‘pocket the insurance monies’. His letter to the insurer dated 4 May 2015 protesting QBE’s response to the quoted cost of repairs which contained, in Mr Firrell’s view, unsubstantiated reductions in the quote suggests he was always going to carry out the repairs, if allowed to do so. The letter describes the difficulties Sovereign has had with their ‘pedantic’ client and his (the client’s) requirement that Sovereign ‘abide with all facets of the law’.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.