Curgenven v OB Building Pty Ltd [2024] QCAT 279

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: PARTIES: Curgenven v OB Building Pty Ltd [2024] QCAT 279 CAROLINE FAY CURGENVEN (applicant) v OB BUILDING PTY LTD A.B.N. 12 142 627 870 (respondent) APPLICATION NO: BDL151-23 MATTER TYPE: Building matters DELIVERED ON: 5 July 2024 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Jensen ORDERS: The respondent is required to pay the applicant $8,517.00. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – where the applicant brought an application for liquidated damages for delayed completion – consideration of contract provisions relating to extensions of time to the Date for Practical Completion and consideration as to whether liquidated damages are payable in accordance with the contract and if to what extent. Queensland Building and Construction Commission Act 1991 (Qld), s77(1). 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] The sole issue is whether the applicant is entitled to liquidated damages from the respondent for late completion of the works and, if so, in what amount. Domestic building dispute [2] The applicant is a homeowner. The respondent is a building contractor. The subject work was the construction of a residential dwelling. This application proceeded as a domestic building dispute and no challenge has been raised to this Tribunal’s jurisdiction to decide this dispute. -- 1 of 8 -- 2 [3] The Tribunal has jurisdiction to hear and decide building disputes1 which includes domestic building disputes.2 [4] A domestic building dispute is a dispute about reviewable domestic work or a contract for the performance of reviewable domestic work between a building owner and a building contractor. Reviewable domestic work means domestic building work.3 [5] Domestic building work includes the erection or construction of a detached dwelling.4 According to the unchallenged evidence before me, the respondent carried out and completed the construction of the property at 158 Burleigh Street, Burleigh Waters Queensland of which the applicant is the owner, and the respondent is the building contractor. This work therefore satisfies the meaning of domestic building work. I find that the work performed by the respondent constituted domestic building work and that this dispute is a domestic building dispute (and therefore a building dispute) within the jurisdiction of this Tribunal. The contract [6] It is common ground that the contract is constituted by a Master Builders Residential Contract, level 2 and signed by the parties on 18 December 2020. The contract includes the Schedule (including appendices Part A to Part J – including special conditions), the General Conditions and plans and specifications supplied by the respondent (the ‘contract’). Relevant terms of the contract are: (a) a construction period of 236 days (item 8 of the Schedule); (b) a rate of liquidated damages - $50.00 per day (item 18 of the Schedule); (c) the Contractor is required to bring the works to practical completion by the Date for Practical Completion (clause 8.3); (d) delays and extensions of time claims (clause 15); (e) a right to liquidated damages (clause 18); (f) a Time Allowance of 20 days (special condition No 7). [7] According to the applicant, the contract has not been terminated and the respondent does not contend otherwise. I shall therefore proceed on the basis that the contract has not been terminated. The claim under the contract for liquidated damages [8] Extracts of relevant parts of the contract clauses appear below. Clause 8.3 of the General Conditions provides: The Contractor must bring the Works to Practical Completion by the Date for Practical Completion. [emphasis added] 1 Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’), Section 77(1). 2 QBCC Act, Schedule 2 Dictionary. 3 Ibid. 4 QBCC Act, Schedule 1B, section 4(1). -- 2 of 8 -- 3 [9] Clause 15.1 of the General Conditions relates to extensions of time claims to the Date for Practical Completion (‘EOT’) and relevantly provides: If the progress of the Works is delayed as a result of any of the following causes: ……….. l) the unavailability of any labour (whether under a subcontract or a contract of employment) necessary for the Contractor to carry out the Works with reasonable diligence; m) the unavailability of any materials necessary to carry out the Works. the Contractor must, within ten (10) Business Days of the Contractor becoming, or ought reasonably to have become, aware of the cause and extent of the delay, give to the Owner a written claim, signed by or on behalf of the Contractor, for a reasonable extension of the Date for Practical Completion that sets out the cause and consequences of the delay. [10] Pursuant to clause 15.3 of the General Conditions, the Owner must assess the extension of time claim within 10 business days of receiving same, and if not assessed or rejected, clause 15.4 requires the dispute arising to be resolved under clause 28. [11] Clause 18.1 of the General Conditions provides: If the Contractor fails to bring the Works to Practical Completion by the Date for Practical Completion, the Owner may, on Practical Completion, give to the Contractor a written claim for liquidated damages at the rate stated in item 18 of the Schedule for each Day after the Date for Practical Completion until the Date of Practical Completion, or the Day on which this Contract is terminated, whichever is earlier. [emphasis added] [12] Terms defined in the contract relevant to clause 18.1 and this dispute are: (a) ‘Works’ means the whole of the work to be carried out by the Contractor under this Contract, a description of which is contained in item 5 of the Schedule, and includes variations to the Works; (b) ‘Date for Practical Completion’ means the date stated in, or otherwise determined in accordance with item 10 of the Schedule by which the Works are to be brought to Practical Completion, as adjusted under this Contract; (c) ‘Day’ means calendar days; (d) ‘Date of Practical Completion’ means the day on which the Works reach Practical Completion. [13] The respondent gave notice on 27 May 2021 that the works commenced on site (on that same date) and that the Date for Practical Completion was scheduled for 17 January 2022. [14] It emerged that there were delays to the progress of the works which I will discuss later. For the moment, suffice to say that the claimant contends in its email dated 4 January 2023 (claiming liquidated damages) that the period of delay was 288 days calculated from an adjusted Date for Practical Completion of 24 February 2022 to a completion date of the works of 9 December 2022. -- 3 of 8 -- 4 [15] The respondent recognises there was delay to the progress of the works but argues that it was entitled to EOTs, which if granted would have reduced the period of delay to 93 days. [16] Below is a table outlining the respondent’s EOT claims and the applicant’s position in respect thereof: EOT request date Days claimed Respondent reason for delay Applicant response to request for EOT (per email dated 4/1/2023) 15/7/2021 81 Frame delay Rejected 27/10/2021 12 Structural steel delay Rejected 21/12/2021 18 Christmas shutdown Agreed 14/02/2022 11 VJ lining delay of materials Retracted Rejected 5/05/2022 21 Cabinetry delay Rejected 13/05/2022 9 Cabinetry delays Rejected 23/06/2022 81 Industry wide critical delays Rejected 21/07/2022 9 Painter delay Rejected [17] There are 8 EOT claims listed above. Of those listed: (a) the respondent has withdrawn its claim for 11 days for VJ Lining delay of materials; and (b) the applicant accepts the Christmas shutdown extension of 18 days.5 [18] The applicant, also in the email dated 4 January 2023, accepts the 20 days ‘Time Allowance’ for delays as per special condition No 7 of the contract. [19] Therefore, the applicant’s adjusted Date for Practical Completion is 24 February 2022 ie, the original Date for Practical Completion of 17 January 2022 plus 38 days. [20] The applicant contends in its email dated 4 January 2023 that Practical Completion was achieved on 9 December 2022. By contrast, the respondent contends it was achieved on 7 December 2022. I have had regard to the Practical Completion Notice (the ‘notice’). The notice clearly provides that the Date of Practical Completion was 7 December 2022. The parties have agreed to this date by them both signing the notice. The date 9 December 2022 does appear in the notice. However, its only purpose is to record the date the parties signed the notice. I therefore find that the Date of Practical Completion was 7 December 2022 and not 9 December 2022 as claimed by the applicant. [21] I shall now consider the EOT claims individually. 5 Email dated 4 January 2023. -- 4 of 8 -- 5 EOT claim 15 July 2021 [22] The respondent’s construction supervisor sent an email dated 7 June 2021 which provided: Good afternoon all, The supply shortages are really in full affect now. We have received Langs delivery schedule today and I have outlined the date changes to our frame deliveries. These changes are suppliers based due to shortages. There is nothing we can do to prevent them which is frustrating for us and yourselves. I have attached the langs schedules for you to look at: [other projects shown]………….. Lot 352 Burleigh street, Burleigh waters Was 21/9 Now 13/10. [23] On 15 July 2022, the respondent claimed an EOT of 81 days ‘due to frame delay’ pursuant to clauses 15.1 l) and m) which relate to unavailability of labour necessary to carry out the works with reasonable diligence and the unavailability of materials necessary to carry out the Works. The claim consisted of the following: (a) 20 days pursuant to special condition 7; (b) 6 days for concrete slab delay; (c) frame delivery (91 days). [24] The applicant rejected this claim. The grounds of rejection are to the effect that: (a) the claim was not made within ten business days of becoming aware of the cause and extent of the delay; and (b) the slab was delayed due to inclement weather and not lack of labour or materials and the contract has already set aside 4 weeks for inclement weather. [25] The applicant asserts that the respondent was aware of the delay before the site meeting on 1 June 2022 but only sent the EOT claim on 15 July 2022. [26] In my view, the proper construction of the closing paragraph of clause 15.1 is not to create a time bar for the giving of an EOT claim. Even though the word ‘must’ is used the clause, properly construed, is only a machinery provision that sets out the procedure for the claiming of an EOT. By contrast, time bar provisions typically require notice by a certain time as ‘a condition precedent to the making of claim’ or ‘a claim not made by a certain time will be prohibited’. The clear words required for the clause to be construed as a time bar are missing from clause 15.1. Accordingly, the making of the claim on 15 July 2022 is not time barred and this reason for not allowing the claim is rejected. [27] The respondent’s director has provided a statement and submissions in support of the EOT claims generally and has outlined a ‘comprehensive explanation of the delay that occurred during the COVID – 19 lockdown period, impacting our project’. The respondent submits that his team encountered several obstacles during this period including: (a) government mandates and regulation; (b) supply chain disruptions; -- 5 of 8 -- 6 (c) workforce challenges; (d) subcontractor limitations; and (e) unforeseen circumstances. [28] The director maintains that the EOT claims were made in accordance with the contract. I accept this evidence of the difficulties confronted by the respondent during the COVID-19 lockdown period as reliable. The director was working in the industry during the lockdown period and therefore I infer that he was very familiar with conditions during that time (this paragraph and the preceding one is referred to as the ‘director’s evidence’). I place a lot of weight on the director’s evidence. [29] I have also had regard to what appears to be a general letter to customers from Langs Building Supplies dated 16 March 2021 which explains the anticipated delay with material supply. [30] I find the email of 7 June 2021 to be credible because it outlines delays not only to this project, but also to several other projects. I therefore place a lot of weight on this email as evidence of claimable delay. [31] For the above reasons, I am satisfied that the respondent has an entitlement to an EOT of 81 days and I find accordingly. EOT claim 27 October 2021 [32] On 27 July 2021 the respondent claimed an EOT of 12 days due to the unavailability of labour and relies on clauses 15.1 l) and m) of the General Conditions. [33] The respondent rejects the claim on the basis that it relates to steel and should have been part of the normal building process and not extra time that should be claimed. [34] However, I accept the evidence of the respondent’s director that the claim only relates to labour and not steel. He stated that there were 12 days of labour unavailability which I find to be reliable evidence. Also, he has provided evidence that the steel was ordered on 30 August 2021 and did not impact the EOT. [35] For the above reasons, I am satisfied that the respondent has an entitlement to an EOT of a further 12 days and I find accordingly. EOT claim 21 December 2021 [36] The applicant has accepted this claim and has incorporated it into working out her adjusted Date for Practical Completion of 24 February 2022. [37] I am therefore satisfied that the respondent has an entitlement to an EOT of 18 days and I find accordingly. EOT claim 14 February 2022 [38] In his statement, the respondent’s director has retracted this claim. I therefore do not allow the respondent an EOT. EOT claim 5 May 2022 [39] On 5 May 2022 the respondent claimed an EOT of 21 days due to the unavailability of labour and relies on clauses 15.1 l) and m) of the General Conditions. The respondent submits that the delay was due to unavailability of labour relating to cabinetry. -- 6 of 8 -- 7 [40] The applicant rejects the claim and submits that she believes it was due to poor scheduling. [41] However, the EOT claim is supported by the evidence of Mr Cristaldi of A & R Cabinets. He states to the effect that: (a) There was a spike in construction activity due to the HomeBuilder stimulus which caused immense pressure on his business; (b) During late 2021 and 2022 the increase in construction activity meant that his business was unable to source trades and it experienced major delays in materials; (c) The labour shortages became critical in April 2022 and in May he informed the respondent’s director of revised installation dates. [42] The evidence of Mr Cristaldi is unchallenged. I accept the evidence of Mr Cristaldi which I find to be reliable and I place a lot of weight on it, and I also place weight on the director’s evidence. I find that the respondent has an entitlement to an EOT of 21 days. EOT claim 13 May 2022 [43] On 13 May 2022 the respondent claimed an EOT of 9 days due to the unavailability of labour and relies on clauses 15.1 l) and m) of the General Conditions. The respondent submits that the delay was due to unavailability of labour relating to cabinetry. [44] The applicant rejects the claim and submits that she believes it was due to poor scheduling. However, I place weight on the director’s evidence and that of Mr Cristaldi and find that the respondent has an entitlement to an EOT of 9 days. EOT claim 23 June 2022 [45] On 23 June 2022 the respondent claimed an EOT of 81 days due to industrial wide critical delays and relies on clauses 15.1 l) and m) of the General Conditions. [46] When pressed by the applicant for details of how the 81 days delay was worked out, the respondent’s contract administration replied as follows on 30 June 2022: Your supervisor is estimating to reach Practical Completion by 7/9/2022. Therefore, we are claiming an additional 81 days to the contractual Practical Completion date. 18/6/2022 – 7/9/2022 = 81 days [47] This response is not acceptable in terms of clause 15.1 because it does not provide details of the cause of the delay to the applicant to justify an entitlement to an EOT. I am not satisfied from the evidence provided by the respondent that it is entitled to an EOT of 81 days, and I find accordingly. EOT claim 21 July 2022 [48] On 21 July 2022 the respondent claimed an EOT of 9 days due to painter delays and relies on clauses 15.1 l) and m) of the General Conditions. [49] The director of the respondent states that the ‘order for the painter was sent to him on 22 March 2022 and he was advised of the schedule in advance by the supervisor. The painter failed to attend site when agreed.’ -- 7 of 8 -- 8 [50] In my view, the failure of the painter to attend site when scheduled is not a reason that is within either clause 15.1 l) or m) or special condition 7. [51] I do not allow this EOT claim. Conclusion [52] I accept the applicant’s adjusted Date for Practical Completion as 24 February 2022 as the starting point. I have found that the respondent is entitled to 123 days of EOTs bringing the further adjusted Date for Practical Completion to 27 June 2022. I have found the Date of Practical Completion to be 7 December 2022. The period of culpable delay (from 28 June 2022 to 7 December 2022) is therefore 163 days. The rate of liquidated damages under the contract is $50.00 per day. [53] Pursuant to clause 18.1 of the General Conditions, the respondent is liable to pay liquidated damages to the applicant for the period of delay which I calculate to be $8,150.00 (163 x $50). [54] The respondent is also liable to reimburse the applicant for the Tribunal filing fee of $367.00. Order 1. The respondent is required to pay the applicant $8,517.00. -- 8 of 8 --