Vanguard Blinds Construction Pty Ltd v Scott
[2023] QCATA 99
•20 July 2023
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Vanguard Blinds Construction Pty Ltd v Scott [2023] QCATA 99
PARTIES:
VANGUARD BLINDS CONSTRUCTION PTY LTD (applicant/appellant)
v
SANDRA SCOTT (respondent)
APPLICATION NO:
APL216-22
ORIGINATING APPLICATION NO:
BDL249-20
MATTER TYPE:
Appeals
DELIVERED ON:
20 July 2023
HEARING DATE:
On the papers
HEARD AT:
Brisbane
DECISION OF:
Member McVeigh
ORDERS:
The decision at first instance is confirmed.
CATCHWORDS:
APPEAL – GENERAL PRINCIPLES – in general – where appellant alleged lack of procedural fairness but did not seek to rely on fresh evidence
Queensland Building and Construction Act 1991 (Qld), Schedule 1B, s 25
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142, s 146
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61
Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd [1938] NSW St Rp 37
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)
REASONS FOR DECISION
In July 2019 Sandra Scott entered into a contract with Vanguard for supply and installation of an opening louvre roof over her patio. On 7 October 2020 Ms Scott terminated the contract on the grounds of unreasonable delay. She asked for a refund of her deposit.
The contract was a regulated domestic building contract under the Queensland Building and Construction Act 1991 (Qld) (QBCC Act).
At first instance
On 11 October 2021 Senior Member Brown made a final decision, on the papers, in favour of Ms Scott against Vanguard, conditional upon the assessment of damages. He directed the parties to file evidence to enable the assessment of damages. Ms Scott filed evidence but Vanguard did not. SM Brown directed that the assessment be undertaken on the papers unless either party requested an oral hearing. Neither party requested an oral hearing.
By a decision delivered on 7 June 2022, made on the papers, the following orders were made:
(a)Ms Scott was relieved from payment of any further monies under her terminated contract with Vanguard;
(b)Vanguard was ordered to pay Ms Scott $29,027.89 made up as follows:
(i) $22,000 deposit refund;
(ii) $5,865.89 interest;
(iii) $810 wasted approval fees; and
(iv) $352 filing fee.
The member noted:
Vanguard did not engage in proceedings and contravened various tribunal directions to file a response, to acknowledge receipt of the application, to participate in a conciliation conference and to file and serve its submissions.[1]
[1]At [8].
Appeal
On 19 July 2023 Vanguard filed an application for leave to appeal or appeal. The stated grounds of appeal were:
(a)Vanguard was not given notice of the hearing;
(b)Vanguard was entitled to withhold costs and expenses incurred ($4,389 + $575) because the client cancelled the job.
Neither party has been legally represented throughout the proceedings.
Vanguard was directed to:
(a)file an appeal book;
(b)file submissions in reply to Ms Scott’s submissions; and
(c)file an application for leave to rely on evidence that was not before the tribunal below (fresh evidence).[2]
[2]Directions made 3 August 2022.
Vanguard filed its appeal book but did not file any submissions in reply to Ms Scott’s submissions. It did not file an application for leave to rely on fresh evidence.
In its appeal book Vanguard seeks an order that the proceedings be returned to the original tribunal ‘due to the fact that lawful considerations have not been considered at first instance’. There is no need for an order that the proceedings be returned to the original tribunal as this appeal tribunal has power to:
(a)confirm or amend the decision; or
(b)set aside the decision and substitute its own decision.[3]
[3]Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 146.
It seems that the errors that Vanguard claims the member made at first instance were:
(a)failure to afford it procedural fairness; and
(b)failure to interpret the contract correctly by:
(i) failing to consider its alleged entitlement to additional reasonable time to complete the work due to delays caused by the COVID pandemic;
(ii) deciding that Ms Scott had a unilateral entitlement to terminate the contract;
(iii) failing to find that the contract entitled it to retain 10% of the value of the project in the event of cancellation of the project;
(iv) failure to adjust the amount ordered to be paid by not deducting the direct costs Vanguard incurred due to cancellation of the job.
At a directions hearing on 3 May 2023 the appeal tribunal directed that the application for leave to appeal or appeal be determined on the papers filed in the appeal tribunal unless a written request for an oral hearing was made by 15 May 2023. Neither party made such a request.
Is leave to appeal required?
The short answer is no: Vanguard does not need leave to appeal. Vanguard does not need leave to appeal if its appeal is limited to questions of law. However, if the issue is a question of fact, or a question of mixed law and fact, Vanguard needs leave to appeal.[4]
[4]Ibid, s 142.
Alleged lack of notice goes to procedural fairness; denial of procedural fairness is a question of law. Interpretation of the contract is a question of law. As neither alleged error is a question of fact, or a question of mixed law and fact, Vanguard does not need leave to appeal.
Procedural fairness
In order to succeed on the ground of denial of procedural fairness due to alleged lack of notice, Vanguard must prove it was not given reasonable notice of the hearings on the papers at first instance. In its submissions Vanguard maintains it was not given notice of the hearing ‘at the time or within a reasonable time of the hearing’ but, contrary to the directions made on 3 August 2022, failed to produce any evidence in support of that submission.
At first instance the member noted that Vanguard did not engage in the proceedings and contravened various tribunal directions to file a response, to acknowledge receipt of the application, to participate in a conciliation conference and to file and serve its submissions. If Vanguard had an explanation for its lack of engagement it could have provided evidence to explain the reasons for its failure to engage in the proceedings at first instance. In the absence of any application to rely on fresh evidence there is no basis on which to find that the member erred by denying Vanguard procedural fairness.
Interpretation of the contract
Alleged entitlement to additional time
All regulated domestic building contracts include an implied warranty that the subject work will be carried out with reasonable diligence.[5] The contract provides an anticipated timeline of 12 – 16 weeks.
[5]Queensland Building and Construction Act 1991 (Qld), Schedule 1B, s 25.
It is implicit in the findings at first instance that the member found that the work had not been carried out diligently. In effect, Vanguard submits that the member at first instance failed to consider its alleged entitlement to extend the time to perform the contract work on account of delays incurred during the COVID pandemic.
Contrary to the directions made on 3 August 2022, Vanguard did not provide any fresh evidence in support of its claim that it suffered delays due to the COVID pandemic. Even if it was accepted as a matter of general knowledge that everyone engaged n the building industry in Queensland suffered delays due to the COVID pandemic, the member’s findings as to the chronology of events show that Ms Scott allowed Vanguard a number of extensions of time.
Had Vanguard met the timeline set out in the contract the louvre roof would have been installed by 8 November 2019.[6] The member at first instance found it was not until 28 November 2019 that Moreton Bay Regional Council approved the plans based on drawings provided late by Vanguard.[7]
[6]16 weeks after 19 July 2019.
[7]At [4].
The member at first instance also found that:
(a)installation was booked for 17 March 2020, but did not happen;
(b)installation was rebooked for 17 August 2020, but did not happen;
(c)Ms Scott reminded Vanguard of the pending lapse of the building approval on 25 August 2020;
(d)Vanguard indicated it would make contact to re-schedule installation on 21 September 2020, but did not.[8]
[8]At [5].
That chronology indicates that Ms Scott made more than generous allowance for the delays incurred during the COVID pandemic. She terminated the contract 63 weeks and five days after 19 July 2019. She allowed Vanguard almost four times the maximum anticipated timeline before terminating the contract.
The member did not err in failing to consider Vanguard’s alleged entitlement to additional reasonable time to complete the work due to delays caused by the COVID pandemic. Ms Scott gave Vanguard four times the estimated contract period to complete the work, but it failed to do so.
Did Ms Scott have a unilateral entitlement to terminate the contract?
The contract did not contain an express termination clause. The common law gives a party a right to terminate a contract for a breach of a fundamental term. A fundamental term has been defined as:
A term of the contract which went so directly to the substance of the contract or was so essential to its very nature that its non-performance may fairly be considered by the other party as a substantial failure to perform the contract at all.[9]
[9]Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd [1938] NSW St Rp 37.
The High Court of Australia has explained the test of essentiality as follows:
The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise.[10]
[10]Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61.
There can be no doubt that Ms Scott would not have entered into the contract unless she was assured of substantial performance, being supply and installation of an opening louvre roof, within a reasonable time. Vanguard’s failure to supply and install the roof by 7 October 2020,[11] by which time it would have been impossible to complete the work before the building approval lapsed, was a breach of a fundamental term entitling Ms Scott to terminate.
[11]The date of termination.
The member did not err in deciding in the circumstances that Ms Scott had a unilateral entitlement to terminate the contract.
Was Vanguard entitled to retain 10% of the value of the project in the event of cancellation?
In its submissions Vanguard argues that it ‘is according to law entitled to retain 10% of the value of the project as Sandy Scott had cancelled the works on her own accord.’ It also refers to the written term of the contract:
Cancellation of the order will forfeit the deposit, and payment of any further progress in production of the order will be due.
There are two reasons this argument must fail. First, because the law only entitles Vanguard to seek a 5% deposit. I assume that Vanguard’s reference to a 10% deposit is a reference, albeit mistaken, to deposits allowable in regulated domestic building contracts.[12] A 10% deposit can only be claimed if the contract price is more than $3,300. In fact, Vanguard committed an offence under the Queensland Building and Construction Act 1991 (Qld) when it received a deposit in excess of 5% of the contract price of $43,890. Second, because Ms Scott did not cancel the contract. She terminated the contract due to Vanguard’s breach of a fundamental term, as she was entitled to do.
[12]Queensland Building and Construction Act 1991 (Qld), Schedule 1B, s 33.
The member correctly addressed the measure of damages when she observed:
But for Vanguard’s breach, Ms Scott would have been enjoying her roofed patio by March 2020, at the very latest, having originally contemplated a November 2019 completion when the contract was first signed. Instead, she was without her deposit of $22,000, without her patio and without approval for it, which had lapsed. In short, she had to start the process again.[13]
[13]At [16].
The member did not err in deciding that Ms Scott was entitled to compensatory damages. That finding is based on the fact that Vanguard was in breach of a fundamental term. There was no finding, because there was no evidence, that Ms Scott ‘cancelled’ the contract.
Should the amount ordered to be paid be adjusted by deducting the direct costs Vanguard incurred due to cancellation of the job?
In its application Vanguard claims:
(a)$4,389 for check measure, drawings and engineering; and
(b)$575 for materials custom designed and manufactured.
As noted by the member at first instance Vanguard did not engage in those proceedings. Therefore, there was no evidence at first instance that Vanguard had incurred any costs which it might be able to claim as offsetting costs under the contract.
Contrary to the directions made on 3 August 2022, Vanguard failed to produce any fresh evidence in support of its submission that it undertook a check measure, produced any drawings, undertook any engineering analysis or manufactured any custom designed material for the project, nor the reasonable cost of such work.
The member did not err in failing to adjust the amount ordered to be paid by deducting the costs Vanguard allegedly incurred due to cancellation of the job because she had no evidence upon which such a finding could be made. I cannot consider the question because Vanguard did not apply to rely on any evidence in support of its claim.
Orders
The decision at first instance is confirmed.
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