Steve Bagnall Homes Pty Ltd v Foley - [2021] QCATA 123

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Steve Bagnall Homes Pty Ltd v Foley [2021] QCATA 123

PARTIES: STEVE BAGNALL HOMES PTY LTD

(applicant/appellant)

v

IAN FOLEY AND BERNADETTE FOLEY

(respondents)

APPLICATION NO:

APL342-18

ORIGINATING APPLICATION, NO:

BDL090-15

MATTER TYPE:

Appeals

DELIVERED ON:

29 September 2021

HEARING DATE:

25 February 2020

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown
Member King-Scott

ORDERS:

1.   Leave to appeal is refused

2.   The appeal is dismissed.

3.   The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions on costs within fourteen (14) days of the date of this decision.

4.   The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions in reply within twenty one (21) days of the date of this decision.

5.   Costs of the appeal will be determined on the papers.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – where applicant undertook building work – where building work found to be defective – where applicant ordered to pay damages to respondents – where applicant sought to appeal on grounds raising questions of law, questions of mixed law and fact and questions of fact – whether expert evidence required to interpret the Building Code of Australia – whether findings of fact available on the evidence – whether Tribunal erred in preferring one expert opinion – whether Tribunal erred in interpreting the contract.

Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 142, s 146, s 147

Cachia v Grech [2009] NSWCA 232

Ericson v Queensland Building Services Authority [2013] QCA 39
Foley v Steve Bagnall Homes Pty Ltd [2018] QCAT 458, [739]
Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388
Harrison & Anor v Meehan [2017] QCA 315
McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577

QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41

APPEARANCES & REPRESENTATION:

Applicant:

Mr C Matthews instructed by Construct Law Group Pty Ltd

Respondent:

Mr S Kelly instructed by Active Law

REASONS FOR DECISION

In 2010 Mr and Mrs Foley entered into a contract with Steve Bagnall Homes Pty Ltd (SBH) to build a home. After the parties fell into dispute, Mr and Mrs Foley commenced proceedings in the Tribunal. On 31 October 2018 the Tribunal ordered SBH to pay to Mr and Mrs Foley $167,232.89. SBH has appealed the decision.
The background to the dispute
The Foley’s home was to be built at Toogoom, a seaside town near Hervey Bay. The building works commenced in August 2010. In December 2010, by agreement between the parties, the Foleys were given permission to occupy the house. On the same date, SBH issued to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] QCATA 123
Decision Date: 29 September 2021

CaseChat Overview and Summary

The matter of Steve Bagnall Homes Pty Ltd v Foley involves a dispute between the Foleys, who were the purchasers of a residential property, and Steve Bagnall Homes Pty Ltd (SBH), the builder of the property. The Foleys entered into a contract with SBH for the construction of their home, which was completed in 2011. The Foleys subsequently raised complaints about defects in the building work, leading to the initiation of proceedings in the Queensland Civil and Administrative Tribunal (QCAT). In 2018, QCAT ordered SBH to pay the Foleys $167,232.89 in damages, and SBH has appealed the decision. The appeal raises questions of law, mixed law and fact, and fact, including issues related to variations in the contract, defective and incomplete building work, and the calculation of the builder’s margin and GST.

The legal issues in this case primarily revolve around the interpretation of the contract between the Foleys and SBH, the application of the Building Code of Australia, and the proper calculation of damages. SBH argues that the Tribunal erred in its interpretation of the contract, particularly in relation to the calculation of the builder’s margin and the rectification costs. SBH also contends that the Tribunal should not have relied on expert evidence to interpret the Building Code of Australia and that it erred in preferring one expert opinion over another. The appeal involves both questions of law and mixed law and fact, necessitating the grant of leave by the Appeal Tribunal to proceed.

The Appeal Tribunal found that the learned member of QCAT did not err in its interpretation of the contract or in its assessment of the evidence. The Tribunal held that the rate of 20% for the builder’s margin was appropriately applied to the rectification costs, as it was the same allowance provided in the contract for Provisional Sums and Prime Cost Items. The Tribunal also found that the evidence was sufficient to support the Tribunal’s findings on the defective and incomplete building work, and that there was no basis to grant leave to appeal on the grounds presented by SBH. Consequently, the Appeal Tribunal dismissed the appeal and refused leave to appeal.

In conclusion, the Appeal Tribunal found that SBH failed to demonstrate any grounds for appeal that warranted the granting of leave or a rehearing. The Tribunal dismissed the appeal and ordered the parties to file and exchange submissions on costs within the specified timeframe. The case underscores the importance of a builder adhering to the terms of the contract and ensuring that the building work meets the required standards as set out in the Building Code of Australia.

Orders

Orders of the court

1. Leave to appeal is refused

2. The appeal is dismissed.

3. The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions on costs within fourteen (14) days of the date of this decision.

4. The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions in reply within twenty one (21) days of the date of this decision.

5. Costs of the appeal will be determined on the papers.

Background

Background to the litigation

In 2010 Mr and Mrs Foley entered into a contract with Steve Bagnall Homes Pty Ltd (SBH) to build a home. After the parties fell into dispute, Mr and Mrs Foley commenced proceedings in the Tribunal. On 31 October 2018 the Tribunal ordered SBH to pay to Mr and Mrs Foley $167,232.89. SBH has appealed the decision.The background to the dispute The Foley’s home was to be built at Toogoom, a seaside town near Hervey Bay. The building works commenced in August 2010. In December 2010, by agreement between the parties, the Foleys were given permission to occupy the house. On the same date, SBH issued to the Foleys an invoice for the practical completion stage. Thereafter, communications ensued between the parties in relation to, inter alia, adjustments in respect of the final payment. In September 2011 the Foleys complained to the QBCC about defective building work. In May 2015 the Foleys gave notice terminating the contract. The tribunal proceedings The Foleys commenced the proceedings below in May 2015. SBH filed a response and counter application in June 2015. The hearing took place over five days in October and December 2016. The Tribunal was reconstituted after the hearing had concluded. With the consent of the parties, the proceeding was thereafter determined on the papers. SBH was ordered to pay the Foleys $167,232.89[1] which was calculated as follows:Total contract price: $590,642.49Less amount paid by the Foleys to SBH: $593,846.33Less cost of rectification and completion work : $166,689.00$169,892.84Add SBH entitlement for variation works: $ 2,659.95Amount payable by SBH to the Foleys : $167,232.89[1]Foley v Steve Bagnall Homes Pty Ltd [2018] QCAT 458.The grounds of appeal SBH originally relied upon twenty-two grounds of appeal. Grounds of appeal 1, 2, and 18 were subsequently abandoned. The remaining grounds can be conveniently grouped as follows:(a)Findings about variations – ground of appeal 19;(b)Findings about defective and incomplete building work – grounds of appeal 3 to 17; and(c)Findings about the calculation of the builder’s margin and GST – grounds of appeal 20 and 21. The grounds of appeal raise questions of law, questions of fact and questions of mixed law and fact.Appeals – the statutory framework An appeal to the Appeal Tribunal on a question of law is as of right.[2] An appeal on a question of fact or mixed law and fact requires the leave of the Appeal Tribunal.[3][2]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 142(1).[3]Ibid, s 142(3)(b). In deciding an appeal on a question of law only, the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and return the matter to the tribunal (either as originally constituted or differently constituted) for reconsideration.[4] [4]QCAT Act, s 146. Subject to leave to appeal being granted, if an appeal is against a decision on a question of fact only or a question of mixed law and fact, the appeal must be decided by way of rehearing, with or without the hearing of additional evidence as decided by the Appeal Tribunal.[5] In deciding the appeal, the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision, or set aside the decision and return the matter to the tribunal (either as originally constituted or differently constituted) for reconsideration.[6][5]Ibid, ss 147(1), (2).[6]Ibid, s 147(3).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

We are of the opinion that a margin should have been allowed, the only issue being whether it should be 10% or 20%. As observed by Mr Browning, rectification work would entail the owner letting a number of discreet contracts. The alternative would be to appoint a builder to supervise all work. The rate of 20% for the builder’s margin was the allowance in the contract for Provisional Sums and Prime Cost Items. We see no reason why it should not apply to the rectification costs. The learned member was not in error.Conclusion SBH has failed to make out any of the grounds of appeal. Leave to appeal is refused. The appeal is dismissed. We order accordingly. We will make orders for the parties to file and exchange submissions on costs.

Ratio Decidendi

Legal Principle Established

If different grounds of appeal raise questions of law and questions of fact or mixed law and fact, it is appropriate to address first those grounds involving questions of fact or mixed law and fact. If leave to appeal is granted then the appeal must be decided by way of rehearing and all of the matters the subject of the grounds of appeal should be dealt with in the rehearing, although the Appeal Tribunal is not required to address distinctly each question raised by an appellant.[12] It is sufficient that the reasons of the Appeal Tribunal explain how its conclusion is reached.[13]Consideration[12]Harrison & Anor v Meehan [2017] QCA 315.[13]Ibid, per McMurdo JA at [50].Ground of appeal relating to variations Ground of appeal 19 relates to variation 034. This variation formed part of SBH’s counter application. The learned member found:[189] Variation V034 is dated 29 March 2011 and was converted to invoice 790 dated 29 March 2011. [190] The authority for variation to contract document describes the variation work as follows: Extra plumbing PC items supplied above our allowance as per Tradelink and Sandy Strait invoices: Credit 2 x shower heads (returned) Debit 2 x shower heads Debit 1 x grab rail Debit 1 x set of spa taps [191] The authority for variation to contract document is not signed by the Foleys and relates to an amount of $253.49. [192] This variation forms part of SBH’s counterclaim regarding variations which are not compliant with s 80 of the DBC Act and will be dealt with separately. In dealing with the claim for the variation the learned member found:[712] Variation V034 relates to extra plumbing work which included a credit for two shower heads and payment for other items including two showerheads, a grab rail and a set of spa taps in accordance with invoices from Tradelink and Sandy Straits relied upon by SBH. [713] The Specifications allow for the supply of two showerheads. There is no evidence that there has been a change in the scope of works. [714] Further the specifications provide for ‘hand shower rail’ and ‘sundeck to have hot and cold taps for spa’. [715] I have formed the view that the items claimed are not variations to the scope of works and therefore no payment is allowed. SBH does not cavil with the learned member’s finding that the specifications allowed for the supply of two showerheads. SBH says, however, that the learned member erred in finding that there was no evidence that the scope of works changed. The specifications provided for the installation of two shower heads described as ‘Olympic Shower arm and rose’. The contract did not specify that any of the items in variation 034 were prime cost items. Mr Bagnall’s evidence at the hearing was that Mr Foley requested variation 034. The evidence of Mr Foley was that the Foleys did not request the variation[14] and that the change in the type of showerheads was the result of an issue arising out of the manner in which the plumbing work had been undertaken.[15][14]Transcript T2-41 lines 42-45, T2-42 lines 1-8.[15]Transcript T2-35 lines 5-15.

CITATION:	Steve Bagnall Homes Pty Ltd v Foley [2021] QCATA 123
PARTIES:	STEVE BAGNALL HOMES PTY LTD
(applicant/appellant)
v
IAN FOLEY AND BERNADETTE FOLEY
(respondents)
APPLICATION NO:	APL342-18
ORIGINATING APPLICATION, NO:	BDL090-15
MATTER TYPE:	Appeals
DELIVERED ON:	29 September 2021
HEARING DATE:	25 February 2020
HEARD AT:	Brisbane
DECISION OF:	Senior Member Brown Member King-Scott
ORDERS:	1. Leave to appeal is refused 2. The appeal is dismissed. 3. The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions on costs within fourteen (14) days of the date of this decision. 4. The parties are to file in the Tribunal two (2) copies and exchange one (1) copy of submissions in reply within twenty one (21) days of the date of this decision. 5. Costs of the appeal will be determined on the papers.
CATCHWORDS:	CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – where applicant undertook building work – where building work found to be defective – where applicant ordered to pay damages to respondents – where applicant sought to appeal on grounds raising questions of law, questions of mixed law and fact and questions of fact – whether expert evidence required to interpret the Building Code of Australia – whether findings of fact available on the evidence – whether Tribunal erred in preferring one expert opinion – whether Tribunal erred in interpreting the contract. Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 142, s 146, s 147 Cachia v Grech [2009] NSWCA 232 Ericson v Queensland Building Services Authority [2013] QCA 39 Foley v Steve Bagnall Homes Pty Ltd [2018] QCAT 458, [739] Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 Harrison & Anor v Meehan [2017] QCA 315 McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41
APPEARANCES & REPRESENTATION:
Applicant:	Mr C Matthews instructed by Construct Law Group Pty Ltd
Respondent:	Mr S Kelly instructed by Active Law