Stelzig v Ireland
[2024] QCAT 237
•10 June 2024
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Stelzig v Ireland [2024] QCAT 237
PARTIES:
MIKE STELZIG (applicant)
v
SHANE EDWARD IRELAND (respondent)
APPLICATION NO/S:
BDL 339-22
MATTER TYPE:
Building matters
DELIVERED ON:
10 June 2024
HEARING DATE:
On the papers
HEARD AT:
Cairns
DECISION OF:
Member Taylor
ORDERS:
1. The respondent is to pay to the applicant $7,900 in restitution of that which the applicant paid to him for the construction of a driveway.
2. The applicant is relieved from paying to the respondent the remaining $800 of that which the applicant agreed to pay to the respondent for the construction of a driveway.
3. The respondent is to pay to the applicant $387 in costs of this proceeding.
4. The remainder of the applicant’s claim is dismissed.
CATCHWORDS:
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where a home owner contracted with a concreting trade contractor for the construction of a driveway at the homeowner’s residence – where there was no written contract between the parties – where under statute the contract was of no effect - where the construction of the driveway was substantially defective – where the only effective remedy to the defective work was to demolish the driveway and reconstruct it – where the homeowner claimed restitution of that which he had paid to the contractor – where the homeowner sought relief for payment of the remainder of the agreed amount – where the homeowner also claimed damages for the cost of demolition and other costs incurred
RESTITUTION – CLAIMS ARISING OUT OF INEFFECTIVE CONTRACTS – UNENFORCEABLE CONTRACT – BUILDING CONTRACT - where a home owner contracted with a concreting trade contractor for the construction of a driveway at the homeowner’s residence – where there was no written contract between the parties – where under statute the contract was of no effect - where the construction of the driveway was substantially defective – where the only effective remedy to the defective work was to demolish in total the driveway and reconstruct it – where the homeowner claimed restitution for money paid to the contractor – where the homeowner also claimed damages for the cost of demolition and other costs incurred
Queensland Building and Construction Commission Act 1991 (Qld) s 72, s 75, s 76, s 77, Schedule 1B s 1, s 3, s 4, s 5, s 6, s 14, s 86C, s 87, Schedule 2
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 21, s 32, s 102
Bellgrove v Eldridge (1954) 90 CLR 369
Bocquee v Baltus [2019] QCAT 280
Clarke v Queensland Building and Construction Commission [2020] QCAT 88
Cerda v Jacob [2020] QCATA 57
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Leyden v N J Tierney Constructions Pty Ltd [2015] QCAT 483
Pavey & Mathews Pty Ltd v Paul (1987) 162 CLR 22
Robinson v Harman (1848) 154 ER 363
Smart v Berry (Building and Property) [2016] VCAT 540
Vaiao & Anor v Sharkie [2019] QCAT 264Zhang v Todd [2019] QCAT 208
Hudsons – Building and Engineering Contracts 13th Ed. – referred to.
APPEARANCES & REPRESENTATION:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
Applicant:
Self-represented
Respondent:
Self-represented
REASONS FOR DECISION
Overview
The applicant wanted a new concrete driveway constructed to his residence. He engaged the respondent to do that work, agreeing a price for same. That agreement was oral only. The respondent constructed the driveway, and the applicant paid most of the agreed price on completion of the concrete work. Soon thereafter it started to crack. The applicant obtained evidence that the work was so substantially defective the only solution was to demolish the driveway and have it rebuilt. The respondent said such was unrealistic.
The applicant unsuccessfully sought assistance from the Queensland Building and Construction Commission. Despite the fact the Commission’s inspector found the work to be at least partially defective, he decided it would not be reasonable to direct the respondent to rectify the work. Even though the applicant sought internal review of that decision by the Commission, he was once again unsuccessful.
The applicant thus sought relief in this Tribunal. It was not by way of external review of the Commission’s internal review decision, but by way of action directly against the respondent seeking repayment of that which he had paid the respondent as well as relief for payment of the balance not paid of the agreed amount. He also sought payment of the costs of demolition and other costs to cover his own time in conduct of the proceeding plus his out of pocket expenses of the proceeding.
The challenge facing the applicant in this proceeding was the absence of a written contract. This meant, because of a prevailing provision of the relevant legislation, the oral contract he had with the respondent was of no effect. This directly impacted his entitlement to press his claim as one for breach of contract, or breach of guarantees under the Australian Consumer Law being the manner in which he purported to do so. Rather, his claim was one limited to restitution of money paid, such being as he had framed part of the relief he sought. That arose as a consequence of mistake and as a result of the total failure of consideration.
For the reasons I have discussed herein, the applicant succeeded in his claim for restitution and his claim for out of pocket expenses to the extent of the costs of the filing fee paid to commence this proceeding. He failed on the balance of his claims.
Ultimately the decision is favourable to the applicant. It requires the respondent to pay him $8,287, and he is relieved from the obligation to pay the respondent the remaining $800 of that which was agreed to be paid for the construction of the driveway.
Relevant Facts and Circumstances
The applicant is a home-owner. The respondent is a concreting trade contractor.
On 11 June 2022, the parties reached an agreement under which the respondent would remove four concrete tracks that were used as a driveway to the applicant’s house, and in turn construct a full 6m wide concrete driveway, together with adjacent landscaping to the extent of making good the ground to each side of the driveway so that turfing would be level to the new driveway.
No written contract document was signed by the parties. No such document was even prepared.
The extent to which the agreement was evidenced in writing was a written quote from the respondent dated 10 June 2022 and a subsequent exchange of e-mails between the parties on 11 June 2022 by which the agreement between them was confirmed. The agreed price for the works was $8,700
On 22 June 2022, the respondent commenced work on the construction of the new driveway.
On 25 June 2022, he placed the concrete to the new driveway. That same day the applicant paid him $7,900 in cash, leaving $800 to be paid on completion of the associated ground works.
The applicant asserts that “within days” after the concrete was placed, cracks developed in the driveway. He described it as a ‘lattice formation’. He thus called the respondent to raise the issue.
On 27 June 2022, the parties met at the applicant’s house. The applicant asserts that at that meeting the respondent inspected the driveway and the cracks which had shown up, at which time the respondent expressed the view that the cracks could not be rectified, and that the cause was ‘bad concrete’ delivered by Tandy Concrete.
On 29 June 2022, a second inspection occurred. On that occasion again with the parties but also with representatives from Tandy Concrete. The applicant asserts that the consensus at that meeting was the cracks could not be remedied and that the only solution was to remove and replace the driveway. The applicant also says that the respondent asserted the cost of doing so was the responsibility of Tandy Concrete. Later that day, the applicant sent an e-mail to the respondent in which the applicant demanded the respondent immediately carry out the requisite remedial work to remove and replace the driveway, all to be completed not later than 22 July 2022. He asserted that the work was defective as a result of poor workmanship.
On 30 June 2022, the respondent responded to that letter of demand. His response was effectively to deny liability, asserting that “concrete will always crack”, that it was “plastic shrinkage”, that the demand to remove and replace the driveway was “unrealistic”. He also asserted that “there are no standards for the acceptable number of cracks in concrete surfaces however if the cracks are within 1.5 mm they are classified as minor cracking and is acceptable by the qbcc (sic) regulations ….” and “… there was no faulty workmanship and the job was completed with the highest standards …”. He then concluded with this comment “… we think you should inform the qbcc (sic) for a meeting on site with there (sic) structural engineer to inform you on tolerances with shrinkage cracks.”
On 6 July 2022, the applicant then lodged a complaint with the Queensland Building and Construction Commission (QBCC) about the allegedly defective construction of the driveway, asserting:
The whole driveway is cracked in a lattice formation. The concrete is less than 30 mm thick above rebar, no control or expansion joints and uncompacted soil.
On 1 September 2022, an inspection of the driveway by a QBCC Inspector occurred, Both parties were in attendance. An engineer, Mr Jose Henriquez, was also in attendance at the applicant’s request.
On 21 September 2022, the QBCC Inspector produced a report of his inspection in which, as relevant in this proceeding, the following comments appear:
(a)As to the complaint of cracking:
Visual inspection noted cracking in the driveway …
Closed (sic) inspection noted the cracking in the driveway to measure from approximately 0.5 mm to 1.0 mm
Cracking appeared to align with the measurements of the reinforcement mesh.
When referenced to AS 3727.1-2016, section 2.2 Acceptance criteria the cracking in the driveway seen to measure approximately 0.5 mm to 1.0 mm is within the allowable tolerance.
(b)As to the complaint of inadequate concrete cover to the reinforcing steel:
Visual inspection could not identify that the concrete is less than 30 mm thick above the reinforcement mesh.
At the time of the inspection the QBCC could not definitively identify is there was adequate cover of concrete over the reinforcement mesh.
At the time of the inspection there was insufficient evidence to indicate that [the respondent] had carried out any defective building practices with regard to the concrete cover over the reinforcement mesh.
(c)As to the complaint of no control or expansion joints and uncompacted soil:
Visual inspection noted measures for crack control across the driveway … at 3.850 m, 4.0 m and 4.435 m.
Visual inspection noted there were no measures for crack control down the length of the driveway.
Respondent … indicated that … he had installed SL82 reinforcement mesh to the concrete driveway.
When referenced to AS 3727.1-2016, table 5.2, Concrete base parameters, concrete installed to driveways using SL 82 reinforcement mesh requires maximum control joint spacings of 4.5 meters.
No measures for crack control down the centre length of the 6-metre-wide driveway does not comply with AS 3727.1-2016.
At the time of the inspection the absent measures for crack control down the centre length of the 6-metre-wide driveway, did not appear to be adversely affecting the health or safety of persons residing in or occupying the building nor did not appear to be adversely affecting the functional use of the driveway.
Visual inspection noted there had been no means of isolation joints installed between the concrete driveway and the building.
The report then continues with the following conclusion being expressed under the heading ‘QBCC Decision’
Item number 1 of your complaint form has been investigated and QBCC has determined that it would not be reasonable to direct the contractor in this instance to rectify the defective building work. …
The QBCC has determined that in this instance, it would not be reasonable to direct the contractor to rectify the absent measures for crack control and the absent measures for isolation to the building as the cracking identified is within the allowable tolerances outlined in AS 3727.1-2016, section 2.2, Acceptance criteria. Therefore, the QBCC will not issue a Direction to Rectify to the contractor in relation to this item.
On 23 September 2022, the QBCC conveyed this decision to the applicant.
On 29 September 2022, the applicant then applied to the QBCC for internal review of that decision.
By letter dated 26 October 2022, the QBCC informed the applicant that the required period for internal review had expired the day prior, i.e. on 25 October 2022, then stating therein: [1]
Because the application was not decided within the required period, the QBCC’s decision is taken to be the same as the original decision.
[1]As I discuss later in these reasons, such purported to be consistent with the Queensland Building and Construction Commissions Act 1991 (Qld) s 86C, but was not due to an error in the calculation of time. The internal review period had not actually ended. Also, whilst it was open for the internal reviewer to have sought an agreement with the applicant for a longer period, there is nothing in the material on the Tribunal file that addresses the issue as to whether any such agreement was sought, or if it was sought that no agreement was reached.
Having received this internal review decision, it was then open for the applicant to seek external review by this Tribunal.[2] However he did not do so. Instead, on 21 November 2022, he filed his Application for Domestic Building Dispute with this Tribunal in which he sought the following relief against the respondent:[3]
(a)Restitution of $7,900 being that which he paid to the respondent;
(b)Relief as to payment of the remaining $800 of the amount agreed to be paid for the work, such which he had not paid to the respondent;
(c)Payment of $3,080 as compensation for removal of the allegedly defective driveway;
(d)Payment of $387 of QCAT fees paid;
(e)Reimbursement of printing, postage, and other costs to be tabled at the QCAT hearing; and
(f)Unliquidated damages of $1,625.
[2]Queensland Building and Construction Commissions Act 1991 (Qld) s 87.
[3]This is stamped as having been filed at the Mackay Magistrates Court Registry, subsequently received at the Tribunal’s Brisbane Registry on 22 November 2022. Within the Tribunal’s Directions which followed the commencement of this proceeding, the date of the application is recorded as the latter.
On 9 December 2022, the respondent filed his ‘Response and/or Counter-application’ to the application against him. He defended the claim in its entirety on the following bases:[4]
The Driveway was completed within the Queensland Building Construction Commission Standards. Inspected by 2 QBCC Inspectors. The Final Outcome was Non Structural Cracks that do not Impose (sic) the Structural Integrity of the slab.
No Rectify Order given by Queensland Building Construction Commission.
Slab Strength & Performance remain Standard for a Passenger Car Driveway.
[4]This is as it appears in Part D of his Counter-application. The capitalisation is as it appears therein.
What then followed was a series of Directions given by this Tribunal for the conduct of the proceeding. That process also included a compulsory conference at which no resolution was found. Ultimately, by a Direction given on 2 November 2023 it was directed that the matter was to be determined on the paper, such being permissible under s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’).
It is against this background that the matter came before me for determination.
The Issues
The issues at the core of this dispute are narrow. They are effectively two questions:
(a)Was the driveway, as constructed, defective such that it requires demolition and reconstruction?
(b)If the answer to that is yes, what is the relief the applicant is entitled to?
Whilst narrow, and thus open to be perceived as a relatively straightforward one to be resolved,[5] its resolution is complicated by the fact that there was no written contract document executed by the parties in compliance with statutory requirements. As a consequence, by operation of legislation, the oral contract they entered into was of no effect. Thus, the relief open to the applicant is severely restricted, with it giving rise to a third question, that being - what is the cause of action the applicant has against the respondent?
[5]Such appears to be the perception held by the applicant. In correspondence to this Tribunal dated 19 July 2023, on 4 August 2023, and again on 26 September 2023, the applicant expressed a ‘request’ for a ‘default ruling’ or a ‘summary ruling’. However at no time had the applicant formally applied to this Tribunal in a manner contemplated by Chapter 2 Part 5 of the QCAT Act which provides for ‘Preliminary dealings with proceeding’. For completeness I observe here that even if he had done so, on the material that is before me as the Tribunal Record, there was no proper basis for him to have done so, and thus no premise for a ‘default’ or ‘summary’ ruling.
His claim is effectively a claim for damages to put him into the position he would have been in had the driveway not been, as he alleges, defectively constructed such that it requires demolition and reconstruction. This is the essence of damages for breach of contract or a breach of warranty.[6] The applicant appears to press his claim in both reliant on the guarantees imposed on a contracted party under the Australian Consumer Law, however he does not specify what provisions of that legislation he premises his claim on. His claim is confused and confusing in that regard.
[6]See Robinson v Harman (1848) 154 ER 363.
But, in the absence of an effective contract, breach of contract, including breach of the warranties under the QBCC Act Schedule 1B, and guarantees under the ACL, the former which would have been incorporated into the contract had it been a contract of effect, the latter available as a consumer under a contract, are not causes of action open to him. That being so, if the applicant is entitled to relief for a wrong committed by the respondent, it requires identification of an available cause of action. In the present matter that falls to be determined solely under the law of restitution, such being at least one manner in which the applicant seemingly has sought relief.
The Relevant Law
A Domestic Building Contract
The work in question is the demolition of existing driveway tracks and the construction of a new slab driveway, to a house in which the applicant resides. Thus, it is ‘domestic building work’ as that term is used in the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’).[7] Accordingly, the applicants’ engagement of the respondent fell within the ambit of a ‘domestic building contract’ under that legislation.[8] In turn it was a ‘regulated contract’,[9] more specifically a ‘level 1 regulated contract’.[10]
[7]QBCC Act - Schedule 1B – s 41(a)(b), (3)(b), and 4(c) in that the construction of the driveway is a fixture associated with the home, further or alternatively associated with the improvement of the home.
[8]Ibid s 3(1)(a). The exclusionary provisions of s3(2) do not apply.
[9]Ibid s 5.
[10]Ibid – s 6. The applicant asserts the contract amount was $8,700. This is unchallenged. It thus exceeds the ‘regulated amount’, namely $3,300 but less than the level 2 amount of $20,000. See QBCC Act Schedule 1B s 6 read in conjunction with the definition of regulated amount found in Schedule 1B s 1.
As such, the contract was required to have been in written form, dated, and signed by or on behalf of each of the parties to it.[11] In the absence of it being so, the contract is of no effect.[12] The consequence is that the parties are unable to enforce any rights or obligations arising from the agreement for the works even though the parties could show a verbal contract had formed.[13]
[11]Ibid – s 14(2).
[12]Ibid – s 14(10).
[13]See for example – Smart v Berry (Building and Property) [2016] VCAT 540,[27]-[34] considering equivalent Victorian legislation.
There was one other potential impediment to the applicant in terms of him seeking relief in this Tribunal that arises under legislation that for completeness I discuss herein. It arises in terms of the provisions of the QBCC Act that empowers this Tribunal to decide the dispute he has with the respondent.
Jurisdiction
The jurisdiction of Tribunal to consider and decide this proceeding arises under the QBCC Act Part 7. The driveway in issue is a fixed structure, and thus for the purposes of the QBCC Act it is work which falls within the definition of a ‘building’,[14] and in turn ‘tribunal work’ under the Act.[15] Moreover, because the nature of the work is domestic building work, it is reviewable domestic building work and thus the substance of a building dispute that the Tribunal may decide, in terms of which the applicant is entitled to apply to this Tribunal for such a decision.[16]
[14]QBCC Act Schedule 2.
[15]QBCC Act s 75. The work does not fall within the exceptions under s 76 of the Act.
[16]See the definitions of ‘reviewable domestic work’ and ‘building dispute’ in Schedule 2 of the QBCC Act. See also s 77 of the QBCC Act which provides this Tribunal with the statutory power to decide the dispute.
It is here however that the further potential impediment arises. Under the QBCC Act s 77(2), the entitlement to apply to the Tribunal does not exist absent compliance with a process established by the Queensland Building and Construction Commission to attempt to resolve the dispute. Such process is the QBCC Early Dispute Resolution process (‘EDR Process’), which if completed without resolution the parties are provided a letter from the QBCC evidencing the fact that they have participated in the EDR Process, and as such enabling either of them to proceed with action in this Tribunal having satisfied the requirements of s 77(2) of the QBCC Act, the letter being proof of same that may readily be given to the Tribunal. The issue is whether in the present circumstances such was an impediment.
Whilst the applicant might consider he has complied with a requisite process, I offer the following comments for completeness. There is no evidence before this Tribunal that the parties have engaged in the EDR Process, but there is evidence that the parties have engaged in a process with the QBCC in an effort to have the driveway rectified. Whilst such is a process provided for under the QBCC Act, in particular s 72(6) therein, it is not a process for the purposes of s77(2) of the Act because it is not a process to resolve the ‘dispute’, but rather a process to resolve the ‘matter’, the matter being the asserted existence of defective work.[17] Thus, the potential impediment to the applicant.
[17]See the discussion in Leyden v N J Tierney Constructions Pty Ltd [2015] QCAT 483.
However, in my opinion in the present circumstances s 77(2) of the QBCC Act does not given rise to an impediment. This is because it is only engaged when the contract between the parties remains on foot. It does not have any application when the contract is completed. Nor would it have any application in the circumstances that, as is the case here, the contract between the parties is of no effect.
For all these reasons, in my opinion there was not any jurisdictional barrier to me considering the applicant’s Application that was before this Tribunal. I thus turn now to the relevant law under which the application has been determined.
The law as it applies to the proceeding
In the absence of the contract being of effect, the applicant cannot proceed on a cause of action for breach of contract.[18] The parties’ respective entitlements in respect of the work performed are therefore governed by common law principles, with the applicant left to pursue the relief he seeks within other areas of the law. As is relevant to the issue in this proceeding, one such area of law is the law of restitution, such being part of the relief he seeks.[19]
[18]Bocquee v Baltus [2019] QCAT 280,[24]; Vaiao & Anor v Sharkie [2019] QCAT 264,[28]; Zhang v Todd [2019] QCAT 208,[24]; Clarke v Queensland Building and Construction Commission [2020] QCAT 88,[8] to [17].
[19]Consider Pavey & Mathews Pty Ltd v Paul (1987) 162 CLR 221 and the related subsequent cases. In this instance it would in effect be a reverse quantum meruit claim. That is, it would require a determination of the reasonable value of the work performed by the respondent for which the applicant has received benefit, then deducting from that the amount the applicant paid to the respondent, the difference being the amount of restitution the applicant would be entitled to.
But, in cases such as these, there is also an overriding legal principle that applies, namely the question of cost of cure vs diminution in value. As it was expressed by the learned author of Hudsons – Building and Engineering Contracts:
Where a builder has carried out work to a building which requires remediation, the issue that arises is whether the building Owner is entitled to the cost of repairing that defective work – the cost of cure – or is limited to the diminution in the value of their building as a consequence of the defective quality of the work undertaken.[20]
[20]N. Dennys and R. Clay, Hudsons – Building and Engineering Contracts 13th Ed (London: Sweet & Maxwell, Thomson Reuters (Professional) UK, 20150, at 7-006, p.828.
This is often referred to as the test in Bellgrove v Eldridge (1954) 90 CLR 369 wherein the Court adopted the following statement made in an earlier version of Hudsons, expressing it as a correct statement of the law:[21]
… the measure of damages recoverable by the building owner for the breach of a building contract is … the difference between the contract price of the work or building contracted for and the cost of making the work or the building conform to the contract, with the addition, in most cases, of amount of profits or earnings lost by the breach.
[21]Ibid, p.829, see Bellgrove v Eldridge (1954) 90 CLR 369, 617.
Dixon CJ, Webb and Taylor JJ, expressed a qualification to that rule, it being:[22]
The qualification, however, as to which this rule is subject is that, not only must the work undertaken by necessary to produce conformity, but it must be a reasonable course to adopt. ... Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of deal with the situation and in such cases the true measure of the building owner’s loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by the defective workmanship or material.
As to what remedial work is both “necessary” and “reasonable” in any particular case is a question of fact. …
[22]Bellgrove v Eldridge (1954) 90 CLR 369, 618 and 619.
Whilst the observations made therein were cast in the language of a breach of contract, the same principles can be applied in cases of restitution. There is however a difference. When damages are assessed for breach of contract, it is the damages that would flow had the breach not occurred and the contract had been performed to completion, and so must be calculated relevant to the contract. When damages are being assessed under restitution, it is the amount which would flow had the wrong not occurred and so must be calculated relevant to the net position the applicant is left in after the work has been performed relative to what he should have paid for the work completed in the manner it was. That is, it takes into consideration the value of the work performed in contrast to that which he paid for it, and in so doing addresses the issue of diminished value. This then of course gives rise to the question of what is necessary and reasonable to remedy the alleged error made?
In order to deal with those issues, it is necessary to first consider the evidence as it was placed before this Tribunal. As I discuss in the paragraphs that follow here, I was satisfied on that evidence that there was no value in the work the respondent performed because it required complete demolition and reconstruction. I was also satisfied that such is a necessary and reasonable course to adopt.
Discussion on the Evidence
Findings of Fact
The respondent did not offer any meaningful probative evidence to support his defence of the claim against him. At its highest, he relied on the finding of the QBCC Inspector that no direction to rectify should issue. However, he seemingly ignored the finding by the inspector of defective construction work.
To the extent he sought to rely on a letter from Mr Luke Johnson of Tady Concrete (NQ), being the supplier of the concrete used in the construction of the driveway, wherein he opines that the driveway is not considered to be structural and merely it is aesthetically blemished, and that he suggests the product is fit for purpose, on my reading of this opinion is has no probative value. I give it zero weight. This is because, as the author also stated therein in terms of the issue raised with him as to the extent of the cracking, “I was not qualified to make this conclusion …”
In contrast, in my opinion the applicant’s evidence was highly persuasive. Therein, the applicant provides two statements from engineers with whom he has raised the issue of the cracked driveway.
The first of these, and the one which is in my opinion the most telling in the applicant’s favour, is the statement by Mr Jose Henriquez. The following is part of his statement dated 15 April 2023:
I attended the QBCC Inspection on 1 September 2022 upon Mr Stelzig’s request. The QBCC Inspector had poor knowledge of concreting. He did not know the sections of Australian Standard AS 3727.1 that Mr Stelzig was quoting that referred to crack widths; and when I asked the inspector what reference document or technical standard he was applying, because he only measured small cracks, he did not know. I have zero confidence in the Inspector who attended the site.
In my view, the severe cracking of the driveway is due to non-compliance with Australian Standard AS 3727.1 and best practice. Not having isolation and control joints means that the concrete could not expand without cracking. The extremely thin concrete cover over the steel wire mesh was insufficient and also contributed to the surface cracking. In fact, the whole slab has cracked all the way through in several places. The poor preparation of the subsoil, inadequate plastic chairs to maintain an even wire mesh spacing and a concrete truck driving across the wire mesh also contributed to the cracks.
Mr Stelzig has documented the process from start to finish with high quality images. The images speak for themselves. The poor site preparation and non-compliance with basic concreting standards is the only conceivable reason that the concrete has cracked.
The driveway will not be able to handle standard loads and will continue to crack until it becomes unusable.
As I understand this evidence, Mr Henriquez does not have first hand knowledge of the asserted “poor preparation of the subsoil, inadequate plastic chairs … and a concrete truck driving across the wire mesh”, with his knowledge of same arising from review of photographic images shown to him by the applicant. In that regard there were a substantial number of images appearing as Annexures to the applicant’s statement. I inferred that the images to which Mr Henriquez referred were at least some of those images. In particular I note Image 4 therein which shows a concrete truck having been driven over the reinforcing mesh within the prepared driveway slab, and Image 5 that shows the absence of compaction and absence of requisite sub-base material in preparation of the driveway construction.
As I also understand the evidence, those same images were viewed by the other engineer, Dr Kumarage, who also gave a short statement which the applicant filed as part of his evidence. Having specifically referred to a number of the images he reviewed, with copies of same being included in his statement, those copies being the same as they appear in the applicant’s statement, in a concluding summary Dr Kumarage expressed the following opinion:
In summary, as a civil engineer, it is my professional judgement (sic) that:
·these cracks are plastic shrinkage cracks and are most likely caused due to the low cover of concrete above the wire mesh re-inforcement (sic), and lack of isolation and weakened plane joints.
·Site preparation and formwork does not comply with Australian Standard AS3727.1 or best practice.
·The entire work demonstrates poor workmanship. …
·Due to the many non-compliance with the Standard and best practice in concreting, this driveway’s lifespan will be severely/significantly limited compared to a driveway built professionally and in accordance with standards and best practice.
·In its current condition, the driveway does not meet the acceptance criteria and no civil engineer would sign-off on this.
·As per the Standard, the driveway is unlikely to deliver the expected performance required to handle motor vehicles.
·Given the above context, the known remedies are unlikely to be effective for this driveway. Therefore, in my view, this driveway needs to be removed and professional rebuilt.
This evidence is unchallenged by the respondent.
I accepted the evidence as being accurate, and on the basis of it I found as a fact that the driveway, as constructed by the respondent, is so substantially defective that the only reasonable remedy is to demolish it and reconstruct a driveway so as the applicant is provided that which he sought to have built by the respondent.
That then leads to the question as to what relief the applicant is entitled to in this proceeding, an issue I will turn to shortly.
A Brief observation regarding the QBCC Inspector’s Findings & the QBCC Internal Review Process
Before doing so however, I considered it necessary to express here a few observations about the QBCC Inspector’s findings and also the QBCC Internal Review process.
In my opinion, based on the material that was before me as the Tribunal Record, the QBCC’s conduct in this matter was entirely unsatisfactory.
The Inspector’s assessment and findings in his report were, as I understood it from my reading of that report, premised on his application of Table 2.2 ‘Acceptance Criteria’ in AS 3727.1. To the extent he identified cracking as being within the range of 0.5 mm to 1.0 mm and as such within allowable tolerance, under that Table such cracking is in terms of ‘random cracking’. However, it is apparent on reading of his report that whilst the Inspector reached his conclusions in such a manner, he entirely overlooked Appendix B1 of the Standard entitled ‘Random Crack Width’ in which the following statements appear:
This Appendix provides a new definition of ‘random cracking’ to describe those cracks that occur in between or away from planned joints and which are generally regarded as aesthetically unacceptable by homeowners. …
In terms of what may be considered an aesthetically pleasing width for a random crack, a limit of 1mm has been included in Table 2.2 Acceptance Criteria.
There are many different types of cracks that may occur in a concrete pavement from factors such as the following:
(a) Plastic surface shrinkage
…
The random cracking referred to in this Standard is related to the long-term drying shrinkage of the concrete, and not one of the other causes listed above or as a result of poor quality construction practices.
It seemed to me that the QBCC Inspector not only overlooked this provision of the standard, but simply failed to consider, either at all or at the very least in any meaningful manner, the evidence that could be gleaned from the photos Mr Stelzig had taken of the work in progress which clearly shows poor quality construction practices. Moreover, much of the cracking was not random, rather it was a relatively uniform lattice pattern consistent with the layout of the reinforcing steel mesh. That left with me the general perception that the comments made by Mr Henriquez as having zero confidence in the QBCC Inspector were validly made.
Additionally, a comment should be made about the QBCC Internal Review process. The outcome of that process was effectively to confirm the original decision made by the QBCC Inspector. As I noted it earlier herein, such being based on the QBCC recorded information, the application for internal review was made by the applicant on 29 September 2022. That review was to have been completed within 28 days or a longer period requested by the internal reviewer and agreed to by the applicant. However, not only does it appear that no longer period was requested, the QBCC informed the applicant via a ‘Decision Notice’ date 26 October 2022 that the required period for internal review expired on 25 October 2022 and it was because the application was not decided within the required period the internal review decision was taken to be the same as the original decision.
The QBCC internal reviewer erred in this action. Given that the application for internal review was made on 29 September 2022, the 28 day period did not expire until 27 October 2022. Thus the purported internal review decision being the same as the original decision was flawed in that it could not be that it was not decided within the required period of time because that time had not expired.
As I said earlier herein, in all respects my opinion is that the QBCC’s conduct in this matter was entirely unsatisfactory. If the applicant had sought to proceed to external review in this Tribunal, and if the such application for review was heard by me, subject of course to having heard from the QBCC’s representative in any such review in the capacity of the decision-maker assisting me to reach the correct and preferable decision,[23] I most likely would have set aside the decision and substituted it with the decision that a Direction to Rectify should be issued.
Application of the Relevant Law to the Evidence
[23]See QCAT Act s 21(1).
The action in contract
As noted earlier and merely repeated here for convenience and completeness, in the absence of an effective contract the applicant does not have a cause of action in contract and in turn under the ACL. His claim turned to be decided in restitution.
The claim for restitution
As I have noted it earlier herein, the contract between the parties is of no effect. It has however been discharged by performance, the respondent effectively arguing he completed all the works, albeit there remaining $800 to be paid. Accordingly a restitutionary claim had become available on completion of the work.[24] Such would be a claim in restitution by the respondent as to an entitlement to retain that which was paid to him as well as the remaining $800, alternatively a claim in restitution by the applicant to be repaid that which he paid effectively by mistake. In each instance the relevant factor is the extent to which, if any, the applicant received and retained a benefit from the work performed. As I discuss in the paragraphs that follow here, there was no such benefit.
[24]Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 254 to 256 per Deane J. Such was discussed in terms of a claimant pressing a claim in restitution for work done under an unenforceable contract, however in my opinion it is equally apposite to a claim pressed in restitution for recovery of money paid for work done under an unenforceable contract where the work was substantially defective.
In this regard, the most telling fact is that, as I have found it to be, the driveway is substantially defective such that the only remedy is demolition and reconstruction. What that means in the language or a restitutionary claim is that the applicant has not received, nor accepted, any benefit at all from the respondent’s work performed. That is the premise of the quantum of the applicant’s claim for restitution.
There is also his claim for the costs of demolition of the driveway, plus his costs of the proceeding including his own time in its conduct, each of which I return to shortly in these reasons.
Given the finding that demolition and reconstruction is required, it could thus readily be said that there was a total failure of consideration such which would entitle the applicant to his claim in restitution of the $7,900 paid, as well as an order that he be relieved from paying the remaining $800 unpaid from the agreed amount. Such arises because, combined with the issue of the contract being of no effect, the applicant had effectively made payment to the respondent under a mistake, and so has a right to recover the payment made which if not recovered would effectively leave the respondent unjustly enriched.[25]
[25]See the discussion in the joint judgment of Mason CJ, Deane, Toohey, Gaudron, and McHugh JJ in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353,379
For these reasons, I found the applicant was entitled to that which he sought, namely:
(a)payment of $7,900 to him by the respondent; and
(b)relief from payment of $800 being the amount unpaid of the agreed amount for the performance of the works.
Orders were made to that effect.
The applicant’s other claims
The applicant also seeks orders that the respondent pays him:[26]
(a)$3,080 as compensation for removal of the driveway;
(b)$387 being the QCAT fees he paid;
(c)$1,625 being his calculation of what he says was his loss of income in attending to this proceeding; and
(d)Reimbursement of printing, postage and other costs in an undefined amount.
[26]I pause here to observe that the applicant did not advance any claim for interest on the money he had paid to the respondent, thus no such issue was addressed by me.
I address each of these briefly in turn.
Compensation for Removal of Driveway
There is no basis in restitution for recovery of the $3,080 for removal of the driveway. Such would ordinarily be a claim in damages for breach of contract if there was an enforceable contract between the parties. But, for the reasons I have discussed herein, such a claim was not open to the applicant to make given the absence of a contract which had effect.
What however should be noted is that there was a component of the amount agreed between the parties for the performance of the work which was to cover the cost of removing the existing driveway tracks and preparing the ground for the construction of the new driveway, an amount included in that which I ordered the respondent to pay to the applicant in restitution. There was also the relief the applicant obtained to the extent he no longer had the obligation to pay the remaining $800 of the agreed amount. Thus, the applicant has received orders which in part should be considered to have compensated him for the cost of demolition, removal, and attending to preparing the ground as well as making good the ground on completion. It seems readily apparent that this may not equate to the cost of demolition etc, but such is as a direct consequence of the absence of an effective contract.
Should the applicant consider that such is an adverse outcome for him because he was merely a home-owner, and it should have been a responsibility cast upon the respondent as a contractor to have provided him with a written contract, the following comments should be noted.
As the Appeal division of this Tribunal observed in Cerda v Jacob in reference to both Level 1 and Level 2 regulated contracts: [27]
In our view the s 13(5) and s 14(10) of Schedule 1B are clear on their face. A regulated contract that is not in writing, signed by the parties and dated is of no effect, with the consequence that the contract is void and unenforceable by either party. These minimum mandatory requirements are neither difficult for builders and building owners to comply with nor onerous in circumstances where persons contract for the performance of domestic building work. If parties contract for the performance of domestic building work without complying with these requirements they do so at their own peril and without the protections afforded by a contract or the statutory warranties implied into such contracts.
[27]Cerda v Jacob [2020] QCATA 57,[26]. My emphasis.
A similar observation, but one with a more expansive point being covered, was made in this Tribunal at first instance in Clarke v Queensland Building and Construction Commission:[28]
More to the point, level 2 regulated contracts are significant contracts. The statutory requirement for them to be in writing, dated and signed by or on behalf of both parties is there for a self-evident reason – to minimise disputes, of which the current matter is an example, about the terms of such contracts. There is obviously a consumer protection element to the evident policy of the legislation, but there is also a broader public interest in the minimisation of disputes the resolution of which, through publicly-funded mechanisms such as the Commission’s and Tribunal’s review processes, comes at a cost to the general public. It is prudent for owners entering into significant arrangements with builders to ensure they have a written contract signed by both parties and dated. Parliament’s plain intention is that owners or builders who fail to observe that requirement do so at their peril.
[28]Clarke v Queensland Building and Construction Commission [2020] QCAT 88,[27]. My emphasis, both bold and via underlining. Notwithstanding these comments are made in terms of a Level 2 Regulated Contract, and this matter concerns only a Level 1 Regulated Contract, in my opinion they remain relevant and apposite.
For this reason, an order was made effectively dismissing this part of the applicant’s claim.
Claim for QCAT Fees / Claim for Reimbursement of printing and other costs
Under s 77(3)(h) of the QBCC Act, read in conjunction with s 102 of the QCAT Act, this Tribunal is seized of jurisdiction to award costs of a proceeding, notwithstanding the provisions of s 100 of the QCAT Act which is often cited as the basis for an argument that the usual order is each party bears their own costs.
The applicant has achieved a relatively substantive success in this proceeding. In contrast, the respondent took a stance in his defence of the claim which simply could not be supported in the face of overwhelming evidence of his work being substantially defective work. His apparent choice not to provide any evidence to the contrary but rather rely on what I ultimately found to be a defective opinion of the QBCC Inspector was also telling of his conduct in this proceeding being somewhat ignorant of the seriousness of that which was being alleged against him. For these reasons, in my opinion the interests of justice here dictate that the applicant should be paid this $387 by the respondent. Accordingly an order was made to that effect.
As to the asserted claim for reimbursement of printing and other costs, there was nothing before me to show what these costs were. Accordingly there was no basis upon which I could consider it nor make any decision in the applicant’s favour for it. Accordingly an order was made which effectively dismissed this part of his claim. I should also say for completeness that even if there was the relevant information before the Tribunal, I would not have allowed the applicant these costs. In my opinion they are costs he should simply have incurred as his costs of conducting the proceeding for the same reason I give under the next sub-heading.
Claim for the Applicant’s Own Time
There is no premise for the applicant being entitled to this part of his claim. To the extent he has had to expend time and effort in attending to the conduct of this proceeding, and in turn he may have had to take time off work and so incurred a loss of income, that is an unfortunate reality of him being a home-owner who found himself in the unfortunate, and I would expect stressful, circumstances of having to deal with the respondent and this Tribunal.
For this reason, an order was made which also effectively dismissed this part of his claim.
Conclusion
In all respects, the applicant’s evidence was persuasive so that he was able to satisfy me he was entitled to at least part of the relief he sought from this Tribunal.
It was regrettable, and somewhat concerning for me, to see the manner in which the QBCC dealt with his complaint in the face of what was overwhelming evidence of poor construction practice by the respondent, such having left the applicant with a substantially defectively constructed driveway. The QBCC should have directed the respondent to rectify it. Had it done so, this proceeding and thus the use of this Tribunal’s limited and already overstretched resources might have been avoided.
The applicant has succeeded for the most part in the claim he pressed. To the extent he failed in terms of his claim for the cost of demolition, such is directly as a result of his failure to have ensured he had a written contract with the respondent that complied with the requirements of the prevailing legislation. All homeowners should be aware of the need for same. Once that message is finally understood by homeowners, then many of these sorts of disputes may either be avoided or result in better outcomes for homeowners.
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