Core Concrete Pty Ltd v Murtrack Pty Ltd t/a R & F Steel Building Cairns [2024] QCAT 475

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Core Concrete Pty Ltd v Murtrack Pty Ltd t/a R & F Steel Building Cairns [2024] QCAT 475 PARTIES: CORE CONCRETE PTY LTD (applicant) v MURTRACK PTY LTD TRADING AS R & F STEEL BUILDING CAIRNS (respondent) APPLICATION NO/S: BDL200-19 MATTER TYPE: Building matters DELIVERED ON: 29 October 2024 HEARING DATE: 29 July 2024 HEARD AT: Brisbane DECISION OF: Member Lumb ORDERS: 1. The Respondent must pay to the Applicant the amount of $1,436.95 within twenty-one (21) days of the date of this Decision. 2. Any party seeking an order for costs must file with the Tribunal two (2) copies of, and give to the other party one (1) copy of, written submissions, no longer than four (4) pages, within 14 days of the date of the Decision. 3. If written submissions as to costs are filed, the party against whom an order for costs is sought must file with the Tribunal two (2) copies of, and give to the other party one (1) copy of, written submissions in response, no longer than four (4) pages, within 14 days of receipt of the written submissions. 4. If no written submissions as to costs are filed within 14 days of the date of the Decision, there shall be no order as to costs of the proceeding. 5. If written submissions as to costs are filed, the application for costs will be determined on the papers, without an oral hearing. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where commercial building -- 1 of 8 -- 2 dispute under the Queensland Building and Construction Commission Act 1991 (Qld) – where applicant/subcontractor performed concreting and associated work for respondent/head contractor – where respondent claimed work was defective – where respondent did not pay applicant moneys all owing under the agreement and under a previous agreement – whether work defective – whether set-off available Queensland Building and Construction Commission Act 1991 (Qld), s 75, s 76, s 77, Schedule 2 Allen & Anor v Contrast Constructions Pty Ltd (No 2) [2021] QCATA 43 Murphy and Anor v GDS Building Services Pty Ltd t/as Zen Roofing and Anor [2022] QCAT 197 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 Introduction [1] By an Application for domestic building disputes filed on 25 July 2019 (‘the Application’), the Applicant (‘Core Concrete’) claims the amount of $9,428.00 being the balance of moneys owing by the Respondent (‘Murtrack’) for the performance of concreting and associated work. The amount claimed comprises two separate amounts of $880.00 and $8,548.00. [2] By a Response and/or counter-application filed on 10 February 2020 (‘the Counter- application’), Murtrack claims the amount of $10,907.06 against Core Concrete as damages for breach of contract. [3] In considering the Application and the Counter-application, it is first necessary to give consideration to the issue of jurisdiction. Jurisdiction [4] Subsection 77(1) of the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’) provides that a person involved in a ‘building dispute’ may apply, as provided under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’), to have the Tribunal decide the dispute. [5] I am satisfied that the present matter involves a ‘building dispute’ within the meaning of s 77. The definition of a ‘building dispute’ in Schedule 2 to the QBCC Act includes ‘a minor commercial building dispute’. The phrase ‘minor commercial building dispute’ means ‘a commercial building dispute where neither the claim nor the counterclaim exceeds $50,000’. Plainly, the amount of the claim and of the claim made by Counter-application is less than $50,000.00. [6] The phrase ‘commercial building dispute’ is defined to mean, relevantly, ‘a claim or dispute arising between two or more building contractors relating to the performance of reviewable commercial work or a contract for the performance of reviewable -- 2 of 8 -- 3 commercial work’. The phrase ‘reviewable commercial work’ is defined to mean ‘tribunal work other than reviewable domestic work’. The phrase ‘tribunal work’ is defined by reference to sections 75 and 76 of the QBCC Act. [7] Section 75(1) provides, relevantly, that the following is ‘tribunal work’: … (b) the renovation, alteration, extension, improvement or repair of a building; … (e) any site work (including the construction of retaining structures, driveways, landscaping and the construction of a swimming pool) related to tribunal work of a kind mentioned in paragraphs (a) to (d); … [8] The definition of ‘building’ includes, relevantly ‘generally, includes any fixed structure’. [9] I am satisfied that s 76 of the QBCC Act (which provides what is not tribunal work) has no application to the present case. [10] I find that: (a) the work performed by Core Concrete was ‘tribunal work’ within the meaning of s 75(1)(b) or (e) of the QBCC Act; (b) this matter involves a minor commercial building dispute, specifically, a claim or dispute arising between two or more building contractors relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work; (c) the dispute the subject of the Application is a ‘building dispute’ for the purposes of s 77(1) of the QBCC Act. [11] A person may not apply to the Tribunal unless the person has complied with a process established by ‘the commission’ (the Queensland Building and Construction Commission (‘the QBCC’)) to attempt to resolve the dispute (see s 77(2) of the QBCC Act).1 Core Concrete lodged a complaint form dated 24 June 2019 with the QBCC in relation to the non-payment by Murtrack. By email from the QBCC to Core Concrete dated 12 July 2019, the QBCC advised that it could not assist Core Concrete and stated, amongst other matters, that: ‘Or you can apply to QCAT the using this e-mail [sic] as evidence that you have satisfied Section 77 of the Queensland Building and Construction Commission Act 1991.’ I am satisfied that s 77(2) of the QBCC Act has been complied with. [12] I find that the Tribunal has jurisdiction to hear and determine the Application and the Counter-Application. [13] I now turn to the merits of the matter. 1 Allen & Anor v Contrast Constructions Pty Ltd (No 2) [2021] QCATA 43. -- 3 of 8 -- 4 Core Concrete’s claim [14] There is no dispute that the respective amounts of $880.00 and $8,548.00 were unpaid to Core Concrete under two separate agreements between the parties. [15] With respect to the amount of $8,548.00, Murtrack’s case is that it has a right of set- off against Core Concrete, by way of damages for breach of contract, in an amount that exceeds the amount of Core Concrete’s claim. This is addressed below. [16] With respect to the amount of $880.00, Murtrack formed the view that it was entitled to, and did, deduct that amount (which is inclusive of GST) by way of a ‘backcharge’ as a result of a deduction made by the principal on a previous contract in order to ‘Rectify floor falls’. Murtrack had subcontracted work to Core Concrete (involving the construction of a concrete slab).2 Murtrack contended that Core Concrete did not allow sufficient fall in the slab and the slab had to be rectified. [17] Core Concrete’s case is that the amount of $880.00 was wrongfully deducted. [18] Core Concrete points out that the plans for the works in question did not show any fall in the slab as alleged by Murtrack. Core Concrete has provided a copy of the relevant plans.3 On viewing the plans, it is evident that no fall is shown on them. Murtrack does not dispute that no fall is shown on the plans. In cross-examination, Mr Lammert asserted that Dean Arnold (‘Mr Arnold’), who performed the work, was aware of the falls. However, no evidence as to any such conversation had been filed by Murtrack. [19] In my view, the evidential burden falls upon Murtrack to establish, first, that there was ‘insufficient’ falls in the slab; second, that this amounted to a breach of the agreement by Core Concrete; and, third, that the work required rectification to comply with the agreement, the reasonable cost of which was the amount of $800.00 plus GST. On the evidence as a whole, I find that Murtrack has failed to establish such matters on the balance of probabilities. I find that Murtrack was not entitled to deduct the unpaid amount of $880.00. [20] I now turn to the Counter-application. The Counter-application [21] Murtrack’s case is that: (a) it was an implied term of the contract for the performance of the work by Core Concrete that the work would be carried out: (i) in an appropriate and skilful way; (ii) with reasonable care and skill; (iii) in accordance with the various identified project drawings (for a loading area and a workshop); (b) in breach of the implied terms: (i) with respect to the loading area, Core Concrete incorrectly positioned steel posts in the concrete slab with: 2 See exhibit 5, p 80. 3 Exhibit 2, p 8. -- 4 of 8 -- 5 A. three of the four steel posts being positioned 4655 mm and 4630 mm apart rather than 4616 mm and 4566 mm apart as shown on the plan; B. three of the four steel posts being positioned 4640 mm and 4644 mm apart rather than 4616 mm and 4566 mm apart as shown on the plan; C. the posts from front to back were positioned 157 mm wider than as shown on the relevant plan; (ii) with respect to the workshop, Core Concrete incorrectly positioned steel posts in the concrete slab, the three left-hand side steel posts were positioned 6050 and 6054 mm apart, and the three right-hand side steel posts were positioned 6050 mm and 6056 mm apart, rather than 5874 mm apart as shown on the relevant plan; (c) as a consequence the breaches, Murtrack has suffered loss and damage in rectifying the work in the amount of $10,907.06. [22] Murtrack relied upon four affidavits in support of the Counter-application; three from Mr Lammert, the director of Murtrack;4 and one from Mr Clinton Clark,5 the Project Manager for the work performed by Murtrack (as main contractor) and Core Concrete (as subcontractor) in respect of the loading bay and workshop. [23] Core Concrete’s primary position was that Murtrack had not moved the alleged wrongly positioned posts. [24] However, that is not Murtrack’s case. Rather, Murtrack’s case is that it made adjustments to the loading bay and workshop roofs so that the roofs would fit the incorrectly positioned posts.6 [25] I find that there are implied into the agreement the following terms: (a) a term implied by law that Core Concrete would exercise reasonable care, skill and diligence in performing the work;7 (b) a term implied by fact, that the work would be carried out in accordance with the plans provided by Murtrack. [26] With respect to the term implied by fact, I am satisfied that it meets each of the following conditions identified by the High Court in BP Refinery (Westernport) Pty Ltd v The Shire of Hastings:8 (a) it must be reasonable and equitable; (b) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (c) it must be so obvious that it ‘goes without saying’; (d) it must be capable of clear expression; and 4 Exhibit 6, 7 and 8. 5 Exhibit 9. 6 Exhibit 6, [5]. 7 See Wilmar Sugar Australia Limited v Queensland Sugar Limited [2019] QSC 116, [114]-[118]. 8 (1977) 180 CLR 266. -- 5 of 8 -- 6 (e) it must not contradict any express terms of the contract. [27] Mr Lammert has provided evidence that establishes that the posts were not located in the positions identified by the plans.9 [28] Mr Lammert has also given the following further evidence:10 [3] When the incorrect positions the poster identified, I contacted Dean Arnold of Core Concrete and said words the effect of, “Mate, I don’t know what we going to do because all your posts or incorrectly positioned?” Mr Arnold responded with words to the effect, “Well can we just send the kits back and get new kits?” [4] I responded, “No, they are purpose-built. The kits are made to order and are not returnable and we’ll need new materials to fit the incorrectly positioned posts.” [5] Mr Arnold did not have anything further to say. [29] No contrary evidence was adduced by Core Concrete. Mr Arnold was not called as a witness by Core Concrete. [30] In cross-examination, Mr Lammert maintained the evidence given by way of affidavit. In particular, he maintained that the kits were ‘purpose-built’ and that the new materials were required in order to fit the (incorrect) positions of the posts. [31] Mr Clark’s affidavit evidence included the following:11 [4] Midway through the loading bay and workshop works project – After the concrete and posts were completed, I was informed by [Mr Lammert] of a construction issue. [Mr Lammert] asked me to assist in measuring the work carried out by the concrete contractor, as he believed there was an issue with the steel post locations. This post location issue was confirmed when we measured the post location. [5] Steel posts were incorrectly positioned in the concrete slabs. [6] I can no longer recall the precise details of the incorrect positioning of the steel posts but I do recall the Respondent had to re-order materials to suit the incorrectly positioned posts. [7] I have been shown the Project Drawings and drawings prepared by the Respondent’s director, [Mr Lammert], depicting the incorrect positioning of steel posts … and the drawings depicting the incorrect positioning of steel are generally in keeping with my recollection of how the posts were incorrectly positioned. [32] This evidence was not challenged by cross-examination. [33] Having regard to the evidence as a whole, I find that: (a) Core Concrete erected the various steel posts in the wrong locations, that is, not in the locations identified by the plans provided to Core Concrete for the performance of the work; 9 Exhibit 7, [6]-[7]; Exhibit 5 pp 69-70. 10 Exhibit 8, [3]-[5]. 11 Exhibit 9, [3]-[6]. -- 6 of 8 -- 7 (b) the incorrect locations were as identified by Mr Lammert; (c) in erecting the steel posts in the wrong locations, Core Concrete breached each of the implied terms identified in paragraph [25] above; (d) as a result of the breach of contract by Core Concrete, Murtrack was required to rectify the work. [34] The amounts claimed by Murtrack in its Counter-application are itemised in a tax invoice to Core Concrete dated 1 July 2019.12 A number of the items are corroborated by invoices issued by third parties to Murtrack. Having regard to those invoices, I consider that Murtrack has established that it suffered the following damages (totalling $7,991.05) in rectifying the defective or non-compliant work by Core Concrete: (a) the purchase of new materials from Lysaght for the loading bay in the amount of $4,442.56;13 (b) work performed by Gilman Contracting on the loading bay in the amount of $572.00;14 (c) provision of additional screws by Normist in the amount of $162.03;15 (d) the purchase of new materials from Lysaght for the workshop in the amount of $2,143.46;16 (e) work performed by Gilman Contracting in respect of the workshop in the amount of $396.00;17 (f) further work performed by Gilman Contracting in respect of the workshop in the amount of $275.00.18 Whilst the total amount of the invoice is $407.00, I have disallowed $132.00 on the basis that, on the face of the invoice, that component of the rectification work refers to ‘mistakes on canteen’ which indicates that it related to separate work performed by Core Concrete, and, in respect of which there was no evidence to justify the basis for claiming that component. [35] As to the balance of the items claimed in the tax invoice dated 1 July 2019, I find that Murtrack has failed to establish an entitlement to those amounts. There is an absence of corroborating evidence to establish that that Murtrack incurred costs in the amounts claimed. Additionally, with respect to the amounts claimed as ‘hours’ for performing various work, there is an absence of corroborating evidence of the number of hours of work, and how that work relates to the rectification of the loading bay and workshop respectively. I find that Murtrack has established that it has suffered damages for breach of contract in the amount of $7,991.05. [36] I am satisfied that there is such a connection between that component of Core Concrete’s claim in the amount of $8,548.00 and the subject matter of the Counter- 12 Exhibit 5, p 71. 13 Exhibit 5, pp 72-73. 14 Exhibit 5, p 74. 15 Exhibit 5, p 75. 16 Exhibit 5, pp 76-77. 17 Exhibit 5, p 78. 18 Exhibit 5, p 78. -- 7 of 8 -- 8 application as can be said to ‘impeach’ that component of the claim so as to make it unfair for the claim to be allowed without taking account of the Counter-application.19 I find that Murtrack is entitled to set off the amount of $7,991.05 against Core Concrete’s claimed amount of $8,548.00. This leaves a balance of $556.95 to be added to the separate amount of $880.00 also owing by Murtrack to Core Concrete. The total of the two amounts is $1,436.95. Order [37] Pursuant to s 77 of the QBCC Act, the Respondent is ordered to pay to the Applicant the amount of $1,436.95 within twenty-one (21) days of the date of this Decision. Costs [38] In circumstances where both parties were self-represented, where Core Concrete had success on the Application, where Murtrack had substantial success on the Counter- application, where each of the parties incurred a filing fee of $345.80, and where the amount recoverable by Core Concrete is less than $1,500.00, my provisional view is that the starting or default position under s 100 of the QCAT Act, namely that each party must bear the party’s own costs for the proceeding, should apply here. [39] However, to allow either party to make a costs order if they so wish, I make the following orders as to costs: (a) any party seeking an order for costs must file with the Tribunal two (2) copies of, and give to the other party one (1) copy of, written submissions, no longer than four (4) pages, within 14 days of the date of the Decision; (b) if written submissions as to costs are filed, the party against whom an order for costs is sought must file with the Tribunal two (2) copies of, and give to the other party one (1) copy of, written submissions in response, no longer than four (4) pages, within 14 days of receipt of the written submissions; (c) if no written submissions as to costs are filed within 14 days of the date of the Decision, there shall be no order as to costs of the proceeding. (d) if written submissions as to costs are filed, the application for costs will be determined on the papers, without an oral hearing. 19 See Murphy and Anor v GDS Building Services Pty Ltd t/as Zen Roofing and Anor [2022] QCAT 197, [96]-[100] (and the cases cited therein). -- 8 of 8 --