Tsunoda v Decretal Pty Ltd
[2010] QCAT 416
•6 September 2010
| CITATION: | Tsunoda v Decretal Pty Ltd [2010] QCAT 416 |
| PARTIES: | Ms Sandra J Tsunoda |
| v | |
| Decretal Pty Ltd Decretal Pty Ltd as Trustee for the Noble Family Trust t/a Des Noble Builder Mr Desmond W Noble |
| APPLICATION NUMBER: | BDL028-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 16 July 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr Bridget Cullen Mandikos – Member |
| DELIVERED ON: | 6 September 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The Respondent’s application is dismissed. 2. The matter is listed for a Directions Hearing on Monday, 4 October 2010 at 1.00 pm in Brisbane. |
| CATCHWORDS : | DOMESTIC BUILDING DISPUTE - BUILDING CONTRACT – Unsigned contract - Nature of dispute – Necessity of builder to comply with provisions of Part 7, Domestic Building Contracts Act 2000 (Qld) in context of “variations” to unsigned contract – Part 7 not relevant as case is in nature of quantum meruit. Queensland Civil and Administrative Tribunal Act 2009, sections 60, 116 McElroy v Bailey [2004] QCCTB 89, considered |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT (in the proceedings, Respondent to the Application): | Mr Paul Freeburn, SC, instructed by Quinn & Scattini |
| RESPONDENT (in the proceedings, Applicant to the Application): | Mr Gregory I.Thomson, instructed by Sawford Lawyers |
REASONS FOR DECISION
This interlocutory Application, brought by the Respondents to a domestic building dispute application, seeks resolution of what is referred to as a “preliminary point”. In order to place the interlocutory application in context, it is necessary to firstly explain the nature of the underlying domestic building dispute; and secondly to traverse several points of pleading raised by the parties.
History of the dispute
The applicant in the originating proceedings, Sandra Joan Tsunoda (“Ms Tsunoda”), commenced proceedings in the Supreme Court of Queensland in December of 2008 by way of Claim and Statement Claim. Ms Tsunoda seeks the repayment of $743,640.00, or alternatively, a sum not less than $360,623.00, for payments she made in respect of building works performed at a house on Killara Avenue, Hamilton.
Ms Tsunoda’s claim has been made against three respondents: (1) Decretal Pty Ltd; (2) Decretal Pty Ltd as Trustee for the Noble Family Trust t/as Des Noble Builder; and (3) Mr Desmond W Noble (“Mr Noble”). The Respondents have filed a joint defence and admit that Mr Noble is a licensed builder, and a Director of the first respondent, Decretal Pty Ltd.
As outlined in the written submissions of Ms Tsunoda’s counsel, her claim has been pleaded on the following bases:
- The contract was of no effect and therefore the respondents were not entitled to the sum paid ($743,640), or were only entitled to a reasonable sum on a quantum meruit basis ($445,702) and should refund the balance ($297,938);
- There were ‘variations’ to the work but those variations were also not recorded in writing and so the respondents were precluded from recovering money for carrying out those variations, and so the sum claimed and paid for variations ($360,623) should be refunded;
- Only the third respondent held a builder’s license and so, to the extent that the first and/or second respondents carried out the work, they were not entitled to be paid for that work, or were limited to the extent permitted by s42(4) of the Queensland Building Services Authority Act 1991 (“QBSA Act”);
- The respondents have demanded a further $99,388 due and owing for the balance of money owing, and so, for the reasons previously pleaded, the applicant is entitled to be relieved from payment of that sum;
- The applicant has overpaid $297,938 – beyond the sum assessed as reasonable remuneration by the applicant’s expert, Mr Lowry – and therefore the respondents have been unjustly enriched to the extent of the $297,938.
In abbreviated terms, the Respondents’ joint defence asserts that the First and Second Respondents did carry out the renovation works, but for and at the direction of, the Third Respondent, Mr Noble (who is a licensed builder).
The proceedings were transferred to the Queensland Civil and Administrative Tribunal (“QCAT”) on 3 December 2009 by Order of the Supreme Court of Queensland.
The Respondent’s Application presently before QCAT
On 14 April 2010, the Respondents made an application to QCAT seeking that the following matters be heard and determined separately and in advance of any final hearing in the matter:
“Whether Part 7 of the Domestic Building Contracts Act 2000 (“the DBC Act”) (comprising sections 79 to 84 (inclusive)) applies to contracts which are, by force of section 30 of the DBC Act, of no effect, which is a question of law arising in this proceeding within the meaning of section 116 of the Queensland Civil and Administrative Tribunal Act 2009 (“the QCAT Act”);
Alternatively, a declaration pursuant to section 60 of the QCAT Act that, if the contract referred to in paragraph 13A of the Applicant’s Amended Statement of Claim is of no effect by force of section 30 of the DBC Act as is alleged there, then Part 7 of the DBC Act does not apply to such contract.”
Section 30 of the DBC Act provides as follows:
Contracts must be signed
A regulated contract has effect only if it is signed by the building contractor and building owner (or their authorised agents).
The Respondents assert, in their written submissions filed 3 June 2010, that it
“is common ground in the proceedings that there was a contract of some sort between the parties for carrying out domestic building work to the house at Hamilton, which was a “regulated contract” within the meaning of the DBC Act”.
10. I do not think that this statement is correct. The case advanced by the Applicant in these proceedings is that there is no contract, by virtue of the fact that “the (unwritten) contract was of no effect” and that none of the Applicant’s claims “relies on the contract or on variations to the contract”.[1]
[1] Applicant’s submissions filed 7 July 2010, paragraph 5.
11. Both parties agree that there was no signed contract, and that s30 of the DBC Act therefore prevents any unsigned “contract” from having effect. While it is true that a contract, at common law, does not need to be signed to be considered to be a “contract”, in these circumstances, the intent of the legislature was to “achieve a reasonable balance between the interests of building contractors and building owners[2]” by regulating contracts for more than the value of the regulated amount of $3,300.00. As a consequence of the statutory regulation of domestic building contracts, any entitlement for a builder to recover for works performed in circumstances where there was no written contract is constrained to non-contract based remedies, such as quantum meruit.
[2] s3 DBC Act.
What is the nature of the parties’ dispute?
12. The extent of the Applicant’s reliance upon the DBC Act in the pleadings is to assert that Part 7 of the DBC Act was not complied with. Having also pleaded that “the Contract was of no effect by operation of section 30”[3] of the DBC Act, it appears that the Applicant’s claim for relief against the Respondents is not premised upon the existence of a contract.
[3] Applicant’s Amended Statement of Claim, filed in the Supreme Court of Queensland on 18 August 2009, paragraph 13A(b).
13. The Applicant has alleged that whilst the Third Respondent was licensed by the Queensland Building Services Authority, the First and Second Respondents were not. As such, the provisions contained in s42(1) and (2) of the QBSA Act will have some bearing on the proceedings. Those provisions provide that:
(1) A person must not carry out, or undertake to carry out, building work unless that person holds a contractor's licence of the appropriate class under this Act.
(3) Subject to subsection (4), a person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.
14. In turn, section 42(4) of the QBSA Act provides as follows:
A person is not stopped under subsection (3) from claiming reasonable remuneration for carrying out building work, but only if the amount claimed--
(a) is not more than the amount paid by the person in supplying materials and labour for carrying out the building work; and
(b) does not include allowance for any of the following--
(i) the supply of the person's own labour;
(ii) the making of a profit by the person for carrying out the building work;
(iii) costs incurred by the person in supplying materials and labour if, in the circumstances, the costs were not reasonably incurred; and
(c) is not more than any amount agreed to, or purportedly agreed to, as the price for carrying out the building work; and
(d) does not include any amount paid by the person that may fairly be characterised as being, in substance, an amount paid for the person's own direct or indirect benefit.
Rationale for the Respondents’ Application
15. The crux of the Respondents’ Application is this – the Respondents are concerned that, despite the assertions to the contrary by the Applicant, they will be called upon at the time of hearing to produce evidence of the sort that would support a claim for unsigned variations under Part 7 of the DBC Act.
16. I gather from the oral submissions of the Respondents at the hearing of this application that they are particularly concerned by the provisions contained in s84(4) of the DBC Act, those being:
The tribunal may approve the recovery of an amount by a building contractor for a variation only if the tribunal is satisfied that--
(a) either of the following applies—
(i)there are exceptional circumstances to warrant the conferring of an entitlement on the building contractor for recovery of an amount for the variation;
(ii) the building contractor would suffer unreasonable hardship by the operation of subsection (2)(a) or (3)(a); and
(b) it would not be unfair to the building owner for the building contractor to recover an amount.
17. Digesting the pleadings down to their most basic level, the central dispute between the parties relates to whether or not the Respondents are entitled to a quantum meruit payment representing the fair and reasonable cost of the works allegedly performed by the Respondents for the Applicant. If the Respondents establish they are so entitled, the question then becomes what amount is appropriate.
The Respondents’ Application is not necessary
18. The Respondents’ entitlement to recover on a quantum meruit basis does not hinge upon compliance with either s30 or Part 7 of the DBC Act.
19. In view of this determination, I do not consider it necessary for QCAT to add further to the body of decisions previously made relating to the interplay of s30 and Part of the DBC Act. I agree with the logic employed by both then Member Lohrisch in McElroy v Bailey [2004] QCCTB 89 and then Member McVeigh in Ngyuen v Dang [2004] QCCTB 16, in finding that Part 7 of the DBC Act can have no application to quantum meruit claims. I do not, however, share the view of the Respondents that resolution of this question, either by making a declaration[4] or deciding a point of law[5], is necessary. I take the Applicant’s view that this point is not, in practical terms, in issue in these proceedings.
[4] Section 60 of the QCAT Act provides that a declaration may only be made by a judicial member of QCAT. For the reasons elaborated upon above, I decline to refer the Respondents’ application for a declaration for judicial consideration.
[5] Section 116 of the QCAT Act provides that QCAT may decide a question of law that arises in a proceeding. I do not consider that determination of the question of law posed by the Respondents’ application in this matter is necessary to resolve the dispute.
QCAT’s treatment of the pleadings process
20. Whilst I do not think that this application by the Respondents was necessary, it appears to have been motivated by a desire of the legal representatives to be cautious in appropriately managing their clients’ case. By virtue of the fact that this matter has been transferred to QCAT by the Supreme Court, it arrived on QCAT’s doorstep with all the trappings and trimmings associated with the lodgement of pleadings and amended pleadings and requests for particulars that one would anticipate finding at the Law Courts Complex, 304 George Street, Brisbane. It should be of some comfort to the Respondents that as QCAT is a tribunal, and not a court, the strict rules of procedure and evidence that would be applicable in the courts are not applicable here. Specifically, s28(3)(b) of the QCAT Act provides that in conducting proceedings, QCAT “is not bound by the rules of evidence, or any practices or procedures applying to courts of record, other than to the extent the tribunal adopts the rules, practices or procedures”.
21. Of course, that does not mean that QCAT does not apply the rules of practice and procedure in any sense. As in the courts, pleadings in QCAT provide a terribly useful vehicle for the exchange of the material allegations that parties make against one another. But in this instance, the Applicant has denied pleading reliance on Part 7 of the DBC Act, save to assert that it was not complied with in that the contract was not in writing. I do not think it necessary for the Respondents to be provided with any further assurance that they will not be compelled to prove that there are “exceptional circumstances” or that the respondents would “suffer unreasonable hardship” in the context of s84(4) of the DBC Act. The pleadings, together with the submissions of the Applicant in response to the Respondent’s application, provide as much assurance as can ever be given to a party entangled in litigation about the case they will need to meet at hearing.
22. As the pleadings presently stand, I cannot contemplate a scenario whereby the Respondents could reasonably be expected to put on proof of the sort required by Part 7 of the DBC Act. Having asserted, in written submissions of Counsel[6], that the Applicant does not consider this to be a live issue in the proceedings, it would certainly raise questions of procedural fairness if the Applicant was to then assert to the contrary at any eventual hearing of the matter
[6] Submissions of Mr Paul Freeburn SC, Counsel for the Applicant, dated 9 June 2010.
Orders
The Respondents’ application is dismissed.
The matter is listed for a Directions Hearing on Monday, 4 October 2010 at 1.00 pm in Brisbane.
0
0
3