Burnell v Jarvis [2024] QCAT 126

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Burnell v Jarvis [2024] QCAT 126 PARTIES: CAROL ESTHER BURNELL (applicant) v CHRISTOPHER ANDREW JARVIS (respondent) APPLICATION NO/S: BDL194-21 MATTER TYPE: Building matters DELIVERED ON: 1 March 2024 HEARING DATE: 30 August 2023 HEARD AT: Brisbane DECISION OF: Member Deane ORDERS: Christopher Andrew Jarvis is to pay Carol Ester Burnell the sum of $12,083.50 by 4.00pm on 2 April 2024. Any application for costs is to be made by filing in the Tribunal two (2) copies and giving to the other party one (1) copy of any submissions and evidence relied upon, by 4.00pm on 2 April 2024. If any application for costs is made in accordance with order 2 above, then: (a) The other party must file in the Tribunal two (2) copies and give to the party making the application for costs one (1) copy of any submissions and evidence in response, by 4.00pm on 16 April 2024. (b) The party making the application for costs must file in the Tribunal two (2) copies and give to the other party one (1) copy of any submissions and evidence in reply, by 4.00pm on 23 April 2024. (c) Unless otherwise directed, the application for costs will be decided on the papers and without an oral hearing after 23 April 2024. -- 1 of 21 -- 2 If no application for costs is made in accordance with order 2 above, then there shall be no order as to costs. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – where regulated contract did not comply with the requirements of the Queensland Building and Construction Commission Act 1991 (Qld) – consequences of noncompliance – where contract of no effect TORTS – NEGLIGENCE – DUTY OF CARE – STANDARD OF CARE, SCOPE OF DUTY AND SUBSEQUENT BREACH – DAMAGES AND CAUSATION – GENERALLY – where breach of duty by builder in undertaking building work – assessment of damages RESTITUTION – GENERAL PRINCIPLES – consideration of unjust enrichment Civil Liability Act 2003 (Qld), s 4, s 9, s 11, schedule 2 Human Rights Act 2019 (Qld), s 11, s 13, s 24, s 25, s 31, s 48 Queensland Building and Construction Commission Act 1991 (Qld), s 77, Schedule 1B s 1, s 3, s 4, s 5, s 7, s 13, s 14, s 19, s 30, Schedule 2 Queensland Building and Construction Commission Regulation 2018 (Qld), s 45 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 4, s 38, s 100, s 102, s 105 Queensland Civil and Administrative Tribunal Regulation 2019 (Qld), s 8 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86 Atkinson & Anor v Van Uden [2020] QCAT 259 Brookfield Multiplex Ltd v Owners Corp Strata Plan 61288 (2014) 254 CLR 185 Bryan v Maloney (1995) 182 CLR 609 Campbell v Queensland Building and Construction Commission [2021] QCATA 34 Canavan v Sutton [2020] QCAT 374 Cerda v Jacob [2020] QCATA 57 Ghama v Crew & Anor [2020] QCAT 149 Judd v McPhail [2022] QCAT 125 Knox v Bellamy [2021] QCAT 192 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 McSwan v Weaver [2023] QCAT 148 Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor [2019] QSC 49 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 -- 2 of 21 -- 3 Applicant: AJ Hobbs, daughter Respondent: Self-represented REASONS FOR DECISION [1] Mrs Burnell, a homeowner, engaged Mr Jarvis, a licensed plumber and building contractor, to perform work to rectify storm damage to her home, including installation of colourbond fascia and guttering around the total perimeter of the house. Mrs Burnell says that the storm damage work was defective. [2] Mr Jarvis denies that the work is defective. Somewhat inconsistently, he says he should be given an opportunity to rectify the discolouration issue and an opportunity to look at other issues of claimed defective work, which have arisen during the course of the proceeding. [3] Mrs Burnell commenced proceedings claiming approximately $8,000 for rectification of defective work and costs.1 Although the Application refers to seeking orders relating to a claim against the statutory insurance scheme (SIS) operated by the Queensland Building and Construction Commission (QBCC), these proceedings are only against Mr Jarvis. I do not consider any claims relating to the SIS. [4] At the hearing Mrs Burnell clarified that based on the evidence filed the compensation being sought is $17,083.50.2 [5] Mr Jarvis filed a Response and/or counter-application3 seeking orders the Application be dismissed and financial compensation. No filing fee was paid in respect of the counter-application. Mr Jarvis informed me, towards the commencement of the hearing, that he did not propose to pursue the counter-application. I therefore treat the document as a Response only.4 [6] The delay in finalising this matter since the oral hearing is regrettable and relates, at least in part, to resourcing issues and to the relative complexity of the legal issues arising in this matter. [7] Mrs Burnell, as applicant, is required to establish on the balance of probabilities that she is entitled to the orders sought. [8] A person involved in a building dispute may apply to the Tribunal to decide the dispute5 provided the person has complied with a process established by the QBCC 1 Application filed 11 August 2021(Application), (Exhibit 1). 2 Exhibit 3, Annexure W. 3 Filed 29 September 2021 (Response), (Exhibit 10). 4 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 38 (QCAT Act); Queensland Civil and Administrative Tribunal Regulation 2019 (Qld), s 8. (QCAT Regulations). 5 Queensland Building and Construction Commission Act 1991 (Qld), s 77(1) (QBCC Act). -- 3 of 21 -- 4 to attempt to resolve the dispute.6 I am satisfied that the QBCC’s dispute resolution process has been complied with enlivening the Tribunal’s jurisdiction.7 [9] A building dispute is defined to include a domestic building dispute.8 Domestic building dispute is defined to include a claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work.9 [10] Reviewable domestic work10 is defined to mean domestic building work under Schedule 1B section 4 of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), which includes the erection or construction of a detached dwelling11 or the renovation, alteration, extension, improvement or repair of a home12 or associated works.13 The undisputed evidence is that the works were works to repair storm damage to Mrs Burnell’s home. I am satisfied that the dispute is a domestic building dispute between a building owner and a building contractor relating to the performance of domestic building work or a contract for such work. Is Mrs Burnell entitled to claim damages for breach of contract? Is there an enforceable contract? [11] I find that there is not an enforceable contract between Mrs Burnell and Mr Jarvis. Mrs Burnell is not entitled to enforce the informal contract and therefore is not entitled to pursue Mr Jarvis for damages for breach of contract. Any claim for damages for breach of contract is dismissed. Was there a formal written contract signed by the parties? [12] I find that there was no formal written contract signed by the parties. [13] Mrs Burnell’s evidence is that Mr Jarvis only provided a written quote after he started the works and that the terms of the agreement for the storm damage work were not reduced to a written contract signed by both parties. The evidence is that Mr Jarvis started work about a week before he provided the written quote. During the hearing Mr Jarvis contended that there was a standard form HIA contract signed by the parties but could not explain why it was not in evidence. [14] The evidence is that Mrs Burnell engaged Mr Jarvis to perform bathroom renovations to her home. The undisputed evidence is that Mr Jarvis, who was still on site performing the initial work when a storm damaged Mrs Burnell’s home, offered to perform work to rectify the storm damage including installation of colourbond fascia and gutter around the total perimeter of the house. The parties agreed that the terms of the agreement for that initial work were the subject of a signed written contract. There was a difference in the evidence of Mrs Burnell and Mr Jarvis as to the form of that agreement. A copy of that agreement is not in evidence before me and is not directly relevant to this dispute. 6 Ibid, s 77(2). 7 Exhibit 1, Annexures, QBCC letters dated 15 January 2021 and 30 November 2020. 8 QBCC Act, Schedule 2. 9 Ibid. 10 Ibid. 11 Ibid, Schedule 1B, s 4(1)(a). 12 Ibid, s 4(1)(b). 13 Ibid, s 4(3)(b). -- 4 of 21 -- 5 [15] By direction dated 23 August 2021 Mrs Burnell was directed to file and serve a copy of the contract in respect of the building works the subject of the building dispute. In late August 2021 Mrs Burnell responded to that direction and relied upon the written quote provided by Mr Jarvis dated 15 April 2019. Mr Jarvis’ oral evidence was that it is his practice to have a standard HIA contract signed but did not specifically recall one being signed for the storm damage work. At the hearing Mrs Burnell denied that she had seen such a formal agreement and therefore denied signing such a document. [16] Mrs Burnell’s evidence is, and I accept, that: (a) Mr Jarvis gave her a written quote for the work after he had started the work. A copy of the quote is in evidence and is dated 15 April 2019.14 It is signed by Mr Jarvis. I note that Mr Jarvis’ evidence is that he provided an oral quote and about a week later provided the written quote. (b) she did not formally accept the quote in writing, nor by email nor by text message. (c) she did not recall whether she expressly accepted the quote orally, but she allowed Mr Jarvis to continue to perform the work once the written quote was received. (d) the work was performed in April 2019. There is evidence before me that the final payment was made by Mrs Burnell on 18 April 2019.15 Mr Jarvis returned to rectify some defects in May 2019. (e) several months later she noticed areas of discolouration. She raised the issues with Mr Jarvis, but no agreement could be reached. She then made a complaint to the QBCC. [17] I prefer Mrs Burnell’s evidence that there was no signed formal contract over Mr Jarvis’ evidence of usual practice. Mr Jarvis has had a number of opportunities to file documents to dispute Mrs Burnell’s contention and to refer to and produce a formal agreement if one existed. I find that an informal contract was made by the parties. The written quote sets out the terms of the offer. There was acceptance of the terms of the offer, at least, by conduct. Is the contract a regulated contract? [18] I find that the informal contract is a level 2 regulated contract. [19] A domestic building contract with a contract price of more than the regulated amount is a regulated contract.16 The regulated amount is $3,300.17 14 Exhibit 3, Annexure A. 15 Ibid, Annexure D. 16 QBCC Act, Schedule 1B s 5. 17 Ibid, s 1 (definition regulated amount). -- 5 of 21 -- 6 [20] The evidence is that the amount quoted by Mr Jarvis and paid by Mrs Burnell is $22,598.18 The contract was therefore a level 2 regulated contract.19 Does the informal contract meet the minimum requirements under the QBCC Act? [21] I find that the informal contract does not meet the minimum requirements. [22] The QBCC Act prescribes minimum documentary requirements for regulated contracts.20 A level 2 regulated contract must be in written form, dated and signed by or on behalf of each of the parties.21 It is not necessary to consider the additional requirements listed in section 14(3) because the informal contract is not signed by or on behalf of each of the parties. Mrs Burnell’s evidence is, and I accept, that she did not sign and return a copy of the written quote, nor did she accept the quote by email or text message. What are the consequences of an informal contract not meeting the minimum requirements? [23] At the hearing I raised the minimum requirements in the QBCC Act and sought submissions from the parties on this issue and the consequences for the claim. Neither party was legally represented. They were not in a position to make meaningful submissions. Both parties declined my offer to make directions to allow them to seek advice and file written submissions on this issue and submitted that I should consider what causes of action were open on the evidence. [24] If the contract does not comply with the requirements, then the contract has no effect22 and is unenforceable.23 [25] The Tribunal has previously found that a party to such a contract cannot maintain a claim for damages for breach of contract but a claim for damages for work negligently performed may be available.24 [26] I consider below whether a claim in negligence and on other bases are available on the evidence. Is a claim under the statutory warranty available? [27] I find that Mrs Burnell is not entitled to enforce the protections afforded by the statutory warranties. [28] The warranties set out in Division 2 of Schedule 1B of the QBCC Act are part of every regulated contract.25 The Tribunal has previously accepted, and I agree, that where a 18 Being the quoted $25,886 (incl GST) less the allowance of $3,288 for works agreed not to be performed in respect of the awning. 19 QBCC Act, Schedule 1B s 7. Queensland Building and Construction Commission Regulation 2018 (Qld), s 45. 20 QBCC Act, Schedule 1B ss 13-14. 21 Ibid, s 14(2). 22 Ibid, ss 13(5), 14(10). 23 Canavan v Sutton [2020] QCAT 374. 24 Ghama v Crew & Anor [2020] QCAT 149; Atkinson & Anor v Van Uden [2020] QCAT 259; Knox v Bellamy [2021] QCAT 192. 25 QBCC Act, Schedule 1B s 19. -- 6 of 21 -- 7 regulated contract is unenforceable there is no right to enforce the statutory warranties implied into such contracts.26 Is a claim in negligence available? Is Mrs Burnell entitled to damages for negligently performed work? [29] I find that Mrs Burnell’s Application can be regarded as a claim for damages for negligently performed work. I find that Mrs Burnell is entitled to damages from Mr Jarvis for negligently performed work. [30] Domestic building dispute is defined to include a claim or dispute in negligence related to the performance of reviewable domestic work other than a claim for personal injuries.27 [31] The Application referred to issues of “poor workmanship” and “defective workmanship”. Mrs Burnell says that the storm damage work performed by Mr Jarvis was defective. As I understand it, she says that the work is defective because: (a) it is faulty or unsatisfactory; (b) it involves the use of a manufactured product and that product has been used or installed in a way that does not comply with the product manufacturer’s instructions; and (c) the work does not meet a reasonable standard of construction or finish expected of a competent licensed contractor. [32] Initially her complaint was that there was discolouration and that the fascia was not even at the back side of the house, which needed to be raised to make it even. [33] The Appeal Tribunal has previously accepted that where there was no enforceable contract ‘the parties’ rights fell for determination not under the contract, but in accordance with the Civil Liability Act 2003 (Qld) and the relevant principles relating to breach of duty and restitution.’28 In that case the Appeal Tribunal found that the homeowner’s claim against the builder was ‘confined to one in negligence for breach of duty’.29 [34] However, the Tribunal has relatively recently formed a contrary view in McSwan v Weaver30 finding in similar circumstances, that although the homeowners ‘relied on the respondent as builder, and thus the respondent owed them a responsibility to have done more, notwithstanding the decision in Cerda 2000 in my opinion the respondent did not owe a duty of care at law to the applicants.’31 The Tribunal in McSwan essentially found that no duty of care was owed because the homeowners were not vulnerable to loss because the homeowners could have ensured that they entered into a contract, which complied with the requirements of Schedule 1B of the QBCC Act, 26 Cerda v Jacob [2020] QCATA 57, [24]. 27 QBCC Act, Schedule 2 s 1 (definition domestic building dispute (c)). 28 Cerda v Jacob [2020] QCATA 57,[32]. 29 Ibid, [73]. 30 [2023] QCAT 148. 31 Ibid, [34]. -- 7 of 21 -- 8 which would have ensured the homeowners obtained the benefit of the statutory warranties implied into such a contract. [35] The learned Member’s reasons outlined the evolution of the law of negligence in Australia and having considered Queensland Supreme Court, Queensland Court of Appeal and High Court of Australia cases decided not to follow previous Tribunal and Appeal Tribunal cases. Whilst McSwan is not binding upon me I consider the learned Member’s reasoning and the cases he cited because one of the objects of the QCAT Act is to promote the quality and consistency of tribunal decisions32 and to achieve the objects of the QCAT Act the Tribunal must ensure like cases are treated alike.33 [36] With respect to the learned Member in McSwan, I do not accept the proposition apparently advanced that, the authorities cited require a finding that a duty of care can never be owed to a homeowner where the contract entered into fails to comply with the Schedule 1B requirements because such a homeowner can never be found to be vulnerable because the homeowner could and should have ensured in every case that a contract in compliance with the QBCC Act was entered into.34 [37] I accept that vulnerability as distinct from proximity is relevant to whether a duty of care is owed.35 Vulnerability has been described as a claimant’s “inability to protect itself from the consequences of a defendant’s want of reasonable care”36 or the claimant’s inability to protect itself from the risk of injury “by reason of ignorance or social, political or economic constraints.”37 Consistent with the High Court’s reasoning in Brookfield Multiplex38 it is necessary to consider the factual matrix or as referred to by the High Court the ‘salient features of the relationship’ to determine whether in a particular case the homeowner was owed a duty of care. This requires a consideration of whether the homeowner was vulnerable, which involves a consideration of whether they were capable of protecting themselves from the consequences of a builder’s lack of reasonable care and which also involves a consideration of whether there was reliance. [38] In Woolcock McHugh J stated:39 The better view in all cases – not merely building cases – is that the capacity of a person to protect him or herself from damage by means of contractual obligations is merely one – although often a decisive – reason for rejecting the existence of a duty of care in tort in cases of pure economic loss. [39] I consider these issues below. [40] A claim in negligence requires consideration of the Civil Liability Act 2003 (Qld) (CLA). The CLA applies to civil claims for damages for harm.40 32 QCAT Act, s 3(c). 33 Ibid, s 4(d). 34 [2023] QCAT 148, [108], [110]. 35 Brookfield Multiplex Ltd v Owners Corp Strata Plan 61288 (2014) 254 CLR 185. 36 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515, [23]. 37 Ibid, [80]. 38 Brookfield Multiplex Ltd v Owners Corp Strata Plan 61288 (2014) 254 CLR 185, [30]. 39 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515, [94]. 40 CLA, s 4(1). -- 8 of 21 -- 9 [41] The CLA defines ‘claim’.41 It includes a claim for damages based on a liability for damage to property or economic loss, whether that liability is based in tort or contract or on another form of action, including breach of statutory duty. ‘Harm’ is defined to include damage to property and economic loss.42 ‘Duty’ includes a duty of care in tort.43 ‘Duty of care’ means a duty to take reasonable care or to exercise reasonable skill (or both duties).44 [42] The Tribunal has held that to establish an entitlement to damages for negligent building work the following elements must be present:45 (a) a duty of care owed by Mr Jarvis to Mrs Burnell; (b) the duty of care was breached;46 (c) damage which is not too remote has been suffered by Mrs Burnell as a consequence;47 (d) any defence to the claim has been rebutted; and (e) the proportionate liability sections of the CLA have been applied. Was Mrs Burnell owed a duty of care? Was Mrs Burnell vulnerable? [43] I find that Mr Jarvis owed Mrs Burnell a duty to take reasonable care and to exercise reasonable skill in the performance of the work to the standard of a licensed contractor. I find that Mrs Burnell was vulnerable. [44] In Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor Henry J stated:48 It is noteworthy that in Brookfield Multiplex the unsuccessful plaintiff owners’ corporation did have the benefit of contractual protection. The Court’s discussion of that feature exposes the determinative difficulty with the argument now advanced for the Mousas. For example, in explaining vulnerability did not turn upon reliance alone Hayne and Keiffel JJ observed: The owners corporation was in no better position to check the quality of the builder’s work as it was being done than the original purchaser of the lot. Because these parties could not check the quality of what the builder was doing, it can easily be said that each relied on the builder to do its work properly. Reliance, in the sense just described, may be a necessary element in demonstrating vulnerability, but it is not a sufficient element. As noted earlier, vulnerability is concerned with the plaintiff’s inability to protect itself from the defendant’s want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. 41 Ibid, schedule 2. 42 Ibid. 43 Ibid. 44 Ibid. 45 Knox v Bellamy [2021] QCAT192, [87]. 46 CLA, s 9. 47 Ibid, s 11. 48 [2019] QSC 49,[348] - [354]. -- 9 of 21 -- 10 It is neither necessary nor profitable to attempt to define what would or would not constitute vulnerability. It is enough to observe that both the developer and the original purchasers made contracts, including the standard contracts, which gave rights to have remedied defects in the common property vested in the owners corporation. The making of contracts which expressly provided for what quality of work was promised demonstrates the ability of the parties to protect against, and denies their vulnerability to any lack of care by the builder in performance of its contractual obligations. It was not suggested that the parties could not protect their own interests.” The latter observations resound in the present case. Admittedly Brookfield Multiplex involved the consideration of vulnerability in a commercial rather than domestic building setting. However it is elementary, even in the domestic building setting, that the building contract is a means by which owners are well able to protect themselves against economic loss. Importantly, the authorities do not suggest vulnerability is assessed by reference to whether the steps actually taken to protect against economic loss have in hindsight been effective. If that were so the determination of the existence of an action in negligence would be a lottery. The focus in assessing vulnerability is necessarily upon whether a plaintiff was able to take protective steps. As Crennan, Bell and Keane JJ observed in Brookfield Multiplex: “Vulnerability, in this field of discourse, is concerned not only with the reasonable foreseeability of loss if reasonable care is not taken by the defendant, but also, and importantly, with the inability of the plaintiff to take steps to protect itself from the risk of loss.” The unfortunate reality for the Mousas is that they were well able to take steps to protect themselves financially from disappointed expectations. Despite being aware of the apparent inexperience of the company in constructing high end dwellings they made a considered choice to contract with it. They negotiated aspects of the building contract before contenting themselves and deciding to enter into it. They could have but did not insist upon additional contractual protection such as a Director’s guarantee. They could have but chose not to go elsewhere and contract with some other builder. They did as a matter of fact have ample opportunity to protect themselves from the risk of economic loss from inept building work and elected to do so by negotiating and entering into a building contract with the defendant. Their entry into a building contract which expressly provided for, indeed warranted, the quality of promised work demonstrates their ability to protect against and denies their vulnerability to a lack of care in the oversight and execution of the promised work. It follows the duty in negligence propounded by the Mousas against Mr Vukobratich should not be accepted. The Mousas’ claim as against Mr Vukobratich must be dismissed. [45] In Brookfield Multiplex French CJ stated:49 The nature and content of the contractual arrangements, including detailed provisions for dealing with and limiting defects liability, the sophistication of 49 Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185, [3]. -- 10 of 21 -- 11 the parties and the relationship of Chelsea to the Corporation all militate against the existence of the asserted duty of care to either Chelsea or the Corporation. [46] The High Court in both Woolcock and Brookfield Multiplex chose not to overrule its earlier decision in Bryan v Maloney,50 which found that a builder of a house owed a subsequent purchaser of the house a duty to take reasonable care to avoid the economic loss which the subsequent purchaser suffered as result of the diminution in value of the house due to the inadequacy of the footings constructed. In these more recent High Court decisions it was noted that the contract between the builder and the original owner in Bryan v Maloney was not a detailed contract and there were no express limitations of liability sought to be imposed. Although Bryan v Maloney relied upon notions of proximity rather than the concept of vulnerability there is no suggestion in either of these decisions that a duty of care in the circumstances of Bryan v Maloney was not owed by the builder. [47] In Mousa a detailed contract was in place. At least one the homeowners appears to have been a well - educated professional and a somewhat sophisticated purchaser of building services. They negotiated a detailed contract with the building contractor for a high-end home. The building contractor went into liquidation and the Mousa’s sought unsuccessfully to claim in negligence against the contractor’s sole director, who had not provided a guarantee. [48] This is not a situation where a subsequent owner of a building with latent defects is claiming against the builder nor a homeowner who is claiming against the director of the building contractor where there were detailed contracts in place. Mrs Burnell, the original homeowner claims in negligence against Mr Jarvis, the building contractor. [49] In Brookfield Multiplex Gageler J stated:51 It has long been accepted that a common law duty of care can coexist with a duty in contract and that a duty of care can be to avoid economic loss. [50] In Woolcock McHugh J recognised that:52 Where a contract exists, however, the concepts of assumption of responsibility and reliance may create a duty of care in tort as well as obligations in contract. [51] The Appeal Tribunal has accepted, and I agree, that a duty to take reasonable care and exercise reasonable skill in undertaking building work is co-extensive with implied contractual terms, which would have applied if the contract had complied with the minimum QBCC Act requirements.53 [52] There is no evidence before me that Mrs Burnell: (a) was a sophisticated purchaser of building services or had any relevant construction expertise; (b) had any legal expertise or had knowledge of the minimum requirements for regulated contracts provided for in the QBCC Act. 50 (1995) 182 CLR 609. 51 Ibid, [175]. 52 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515, [112]. 53 n 28 [76]. -- 11 of 21 -- 12 [53] As referred to earlier in these reasons, Mr Jarvis, who was on site performing other works under a separate contract, started repairing the storm damage prior to providing Mrs Burnell with a written quote. There is some evidence that the storm damage left Mrs Burnell’s home in an unsafe condition for her so that there was some urgency to commence the works. [54] This is not a circumstance where the parties had the opportunity to negotiate the terms and form of the contract over a lengthy period. Mrs Burnell’s evidence is, and I accept, that upon receipt of the written quote she felt that there was no option but to allow Mr Jarvis to continue because he had started the works. [55] The written quote did not contain terms excluding or seeking to limit Mr Jarvis’ liability for the performance of the work. To the contrary it provides that the materials and labour supplied will be guaranteed for ten years.54 A finding that Mr Jarvis owed a duty of care to Mrs Burnell, as original homeowner, to take reasonable care in the performance of the work to avoid reasonably foreseeable loss in the form of rectification costs does not seek to alter the allocation of risk, which would have existed in contract if the informal contract had met the minimum QBCC Act requirements.55 [56] The QBCC Act imposes various obligations on a building contractor including that for a level 2 regulated contract they must not start to provide the contracted services before the contract complies with the Schedule 1B section 14 requirements. It imposes a maximum penalty on building contractors of 100 penalty units for failure to do so.56 Mr Jarvis, as an experienced building contractor, can be expected to be aware of the requirements of the QBCC Act. [57] Homeowners with no legal or construction expertise may reasonably be expected to be aware that a detailed written contract is required to be entered into for the performance of substantial construction work such as a high-end new home. They may reasonably be expected to take care to protect themselves with appropriate terms and conditions including director’s guarantees where appropriate and protect themselves by doing due diligence on the contractor and its work before committing. [58] Homeowners with no legal or construction expertise are less likely to be aware that contracts for storm damage involving the replacement of guttering and fascia are required to comply with the minimum requirements in Schedule 1B of the QBCC Act. [59] I find that Mrs Burnell, who had no particular experience or expertise in construction matters, relied upon Mr Jarvis to carry out the works to an appropriate standard and that Mr Jarvis assumed such a responsibility. During the hearing Mr Jarvis essentially accepted that he owed Mrs Burnell a duty to take reasonable care and exercise reasonable skill in undertaking the building works. [60] In these circumstances, I find that Mrs Burnell was not capable of protecting herself from the consequences of Mr Jarvis’ lack of reasonable care in undertaking the building works and was vulnerable. [61] I therefore find that Mr Jarvis owed a duty to Mrs Burnell to take reasonable care. 54 Exhibit 3, Annexure A, paragraph 22. 55 Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185, [144]. 56 QBCC Act, Schedule 1B s 30. -- 12 of 21 -- 13 Did Mr Jarvis breach the duty of care? Did Mr Jarvis cause harm? [62] I find that Mr Jarvis breached his duty to Mrs Burnell to take reasonable care. I find that Mr Jarvis’ breach caused harm to Mrs Burnell, which was not too remote. Mr Jarvis has not sought to apportion liability to others. [63] Section 9 of the CLA provides that: (1) A person does not breach a duty to take precautions against a risk of harm unless – (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought reasonably to have known); and (b) the risk was not insignificant; and (c) in the circumstances, a reasonable person in the position of the person would have taken the precautions. (2) In deciding whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (among other relevant things) – (a) the probability that the harm would occur if care were not taken; (b) the likely seriousness of the harm; (c) the burden of taking precautions to avoid the risk of harm; (d) the social utility of the activity that creates the risk of harm. [64] In deciding whether a breach of duty caused particular harm it is necessary to consider: (a) factual causation i.e. the breach of duty was a necessary condition of the occurrence of the harm; and (b) scope of liability i.e. it is appropriate for the scope of liability of the person in breach to extend to the harm so caused.57 [65] It is reasonably foreseeable that if a licensed building contractor does not take care in performing the work a homeowner, for whom the work was performed, is likely to suffer loss and damage. [66] Mr Jarvis did not rely upon any independent expert evidence. I accept he has relevant experience and expertise, but he is not independent. I take this into account when considering the evidence. He points to the QBCC not giving him a direction to rectify. [67] Mrs Burnell relies upon the evidence of Mr Twible, formerly employed by Strammit, the manufacturer of the colourbond facia and gutter installed at Mrs Burnell’s home, and Mr Timms, a builder, as well as the QBCC inspection report. Mr Twible and Mr Timms were both available to confirm their written evidence and to be asked questions by Mr Jarvis and me. The QBCC inspector could not be located to confirm the evidence in his report or be questioned.58 57 CLA, s 11. 58 Exhibit 7. -- 13 of 21 -- 14 Discolouration [68] I find that Mr Jarvis, an experienced licensed plumber and builder, ought to have known that: (a) spraying touch up paint on colourbond gutters and fascia was not approved by Bluescope Steel and would void the Bluescope Steel warranty; (b) air dried paint was likely to weather differently to colourbond steel and result in an unacceptable finish because of discolouration. [69] I find that the risk of voiding the manufacturer’s warranty and discolouration and the need for rectification was reasonably foreseeable. In the circumstances a reasonable person in Mr Jarvis’ position would have taken precautions against these defects occurring. I find that Mr Jarvis breached his duty of care to Mrs Burnell by not doing so. [70] I find that it was reasonably foreseeable that the costs of rectification would flow from Mr Jarvis failing to perform the work with the reasonable care and skill of a licensed plumber and builder. Mr Jarvis did not seek to apportion responsibility to others. I find that Mr Jarvis’ liability is not reduced on this basis. [71] The QBCC report clearly states that the inspector considered both the discolouration and the positioning of the fascia on the eastern elevation (back of the house) to be defective work but found that the complaint was out of time for the QBCC to issue a direction to rectify a non-structural defect. The QBCC inspection report dated 26 November 202059 is in evidence before me. It noted that approximately 20 locations around the fascia and gutter installation on the dwelling had an appearance of irregular faded paint. These areas were more evident at the joins of the profiles where pop rivets were located. The report notes that Mr Jarvis confirmed that he had used a touch-up paint on rivets at the joins of the fascia and gutter and any damaged areas. A number of photographs are attached to the QBCC report which shows irregular faded areas. Larger versions of the QBCC photographs are also in evidence before me.60 [72] The particular time limit which constrains the QBCC is not directly applicable to claims pursued by homeowners in the Tribunal in contract or negligence. [73] Mr Jarvis concedes there is discolouration where he used a metal touch-up paint. He says the touch-up paint manufacturer stated it was formulated for repair and maintenance of pre-painted metal. Mr Jarvis claims that he was not aware of the Bluescope Steel technical information. He says that he has successfully used the touch-up paint before with no issues. He concedes that the dark colour may be more prone to pigment break down after exposure to sunlight than the lighter shades he has previously used. He says he used the touch-up paint in good faith. [74] Both Mr Twible and Mr Timms essentially gave evidence, and I accept, that a reasonably competent contractor would not spray paint scratches on colourbond gutters and fascia. [75] Mr Twible’s evidence is, and I accept, that: 59 Exhibit 1, Annexure. 60 Exhibit 6. -- 14 of 21 -- 15 (a) Bluescope Steel has never recommended touch-up paint be used on colourbond and its use invalidates the Bluescope Steel warranty; (b) Technical bulletins setting out Bluescope Steel’s position on this have been readily available for decades and online for some time. A technical bulletin dated November 201561 is in evidence before me. It clearly sets out Bluescope Steel’s position; (c) Bluescope Steel does not have any recommended method of removing paint from colourbond. The only recommended rectification method is to replace the product. (d) The use of touch-up paint results in discolouration because air dried paint weathers differently to the baked on colour of colourbond; (e) A competent installer would not need to use touch-up paint and would be aware that touch-up paint is not recommended. [76] Mr Jarvis challenged the relevant expertise of both Mr Twible and Mr Timms based solely on whether they hold or held the same licences as Mr Jarvis. I accept that they have relevant experience and expertise. Their evidence on this issue is consistent with the QBCC inspector’s finding as stated in the QBCC report that this item is defective building work and did not meet the standard expected of a competent contractor. As stated earlier, Mr Jarvis did not rely upon any independent evidence. In these circumstances I prefer the evidence of Mr Twible, Mr Timms and the QBCC inspector to that of Mr Jarvis in relation to the discolouration evidencing defective work. [77] I am satisfied that the works performed by Mr Jarvis which resulted in the patchy appearance of the gutters and the fascia were not carried out in an appropriate and skilful way and with reasonable care and skill and that Mr Jarvis breached the duty of care he owed to Mrs Burnell. Positioning of the fascia and other installation defects [78] I find that Mr Jarvis, an experienced licensed plumber and builder, ought to have known that if the fascia was not positioned and installation work was not undertaken with reasonable care and skill that the need for rectification was reasonably foreseeable. [79] In the circumstances, a reasonable person in Mr Jarvis’ position would have taken precautions against these defects occurring. I find that Mr Jarvis breached his duty of care to Mrs Burnell by not doing so. [80] I find that it was reasonably foreseeable that the costs of rectification would flow from Mr Jarvis failing to perform the work with the reasonable care and skill of a licensed plumber and builder. Mr Jarvis did not seek to apportion responsibility to others. I find that Mr Jarvis’ liability is not reduced on this basis. [81] Mr Timms says that the visual look of the work is unacceptable for a new installation. As stated earlier, the QBCC report clearly states that the inspector considered the positioning of the fascia on the eastern elevation (back of the house) was defective work. 61 Exhibit 3, Annexure L. -- 15 of 21 -- 16 [82] Mr Timms also gives evidence about some other aspects of Mr Jarvis’ work, which he says are unsatisfactory and is likely to lead to water ingress. His evidence is that the installation of the gutters and fascia was not to the standard of a competent builder. The issues included inadequate fall to downpipes, dogleg joins, lack of spring clips inside the gutters to hold it in position, placement of the gutter too low down on the fascia requiring installation of flashing, lack of flashing to a corner allowing rain to run between the fascia and gutter as well as placement of fascia out of level. [83] Mr Jarvis did not file any statement of evidence responding to Mr Timms’ statement of evidence. I allowed him to give some oral evidence. He essentially says that when retrofitting fascia and gutters to an older house it is not always possible to perform the installation to such a high standard as contended for by Mr Timms. Mr Jarvis says that the QBCC inspector acknowledged he had done his best during the inspection. Mr Jarvis did not direct me to the particular part of the audio recording. I listened to the audio recording.62 I was unable to locate any such comment by the QBCC inspector. I note that the recording does not appear to be of the complete inspection. I am not satisfied that the QBCC inspector was of that opinion. [84] I accept the evidence of Mr Timms and the QBCC inspector that the installation of the fascia did not meet the standard expected of a competent contractor. [85] I also accept the evidence of Mr Timms, an independent witness, that the installation works as identified earlier at [82] did not meet the standard expected of a competent contractor. [86] Mr Timms raised an issue with movement in the eave soffit but he did not give clear evidence as to its cause.63 I am not satisfied that Mrs Burnell has proven, on the balance of probabilities, that Mr Jarvis breached his duty of care to Mrs Burnell in this respect. Failure to inform of termite damage [87] I am not satisfied that Mrs Burnell has proven, on the balance of probabilities, that Mr Jarvis breached his duty of care to her in relation to the termite damage. [88] Mrs Burnell contended that Mr Jarvis’ work was also unsatisfactory because she claims that he must have found evidence of termite damage when performing the work, he failed to inform her of the damage and he ought not to have glued the soffits onto damaged beams, which she says were unable to support their weight. [89] During the proceeding Mrs Burnell claims that there had been water damage to her home and on inspection there appears to be termite damage. Whilst she says Mr Jarvis is not responsible for the termite damage, he failed to inform her that termite damage existed and failed in his duty to alert her to the damage. [90] There were photographs in evidence before me as to termite damage found by a subsequent contractor and a short document by which that contractor expresses the view that the damage should have easily been seen when doing the work to soffits in 2019.64 Mrs Burnell does not seek any orders in respect of this alleged failure. The subsequent contractor who found the damage did not give a formal statement and was 62 Exhibit 3, Annexure Z1. 63 Ibid, Annexure U and Exhibit 9. 64 Exhibit 4, Annexure 10. -- 16 of 21 -- 17 not available to be questioned by Mr Jarvis and by me at the hearing. I therefore place less weight on that evidence than I would have if the contractor had confirmed his evidence. Mr Jarvis denies finding evidence of termite damage while performing the work. His evidence is that, and I accept, there is no reason why he would not have alerted Mrs Burnell if he had found such damage and that it would have been in his interests to alert her because it would have resulted in a variation to his scope of work and therefore additional payments. I prefer Mr Jarvis’ direct evidence. I am not satisfied that Mr Jarvis breached his duty of care to Mrs Burnell in this respect. What damages are payable? [91] I find that Mr Jarvis is to pay Mrs Burnell damages in the amount of $12,083.50. [92] The Appeal Tribunal in Cerda v Jacob65stated: In an action in negligence, the claimant is entitled to damages to put the claimant into the position which the claimant would have enjoyed but for the commission of the negligent act. The measure of damages is the cost of the work necessary to remedy the defects. In Kirkby v Coote (‘Kirkby’) it was stated: [46] In Bellgrove v Eldridge, the High Court affirmed the following statement of principle: “The measure of the damages recoverable by the building owner for the breach of a building contract is … the difference between the contract price of the work or building contracted for and the cost of making the work or building conform to the contract.” [47] One may pause here to observe that this is a case where the building owner claims in negligence rather than breach of contract, but neither party suggested that a different approach should be adopted to the measure of damages where the negligent breach of duty has produced a result which falls short of the result which reasonable skill and diligence would have produced. [48] The High Court, having referred to authority for the proposition cited above, went on to say: “In none of these cases is anything more done than that work which is required to achieve conformity and the cost of the work, whether it be necessary to replace only a small part, or a substantial part, or, indeed, the whole of the building is, subject to the qualification which we have already mentioned and to which we shall refer, together with any appropriate consequential damages, the extent of the building owner's loss. The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt. … As to what remedial work is both ‘necessary’ and ‘reasonable’ in any particular case is a question of fact. But the question whether demolition and re-erection is a reasonable method of remedying defects does not arise when defective foundations seriously threaten 65 n 28 [57] (citations omitted). -- 17 of 21 -- 18 the stability of a house and when the threat can be removed only by such a course. That work, in such circumstances, is obviously reasonable and in our opinion, may be undertaken at the expense of the builder.” [93] Further the Appeal Tribunal found that:66 Where, as here, there is no enforceable contract between the parties, the measure of damages is the cost of bringing the works into conformity with what would have been the result had the works been carried out in an appropriate and skilful way subject to the remedial work being necessary and reasonable. [94] Mrs Burnell has produced a quote to replace all of the gutters and fascia in the sum of $12,083.50.67 There is also evidence that there may be additional carpentry work required, to replace all existing soffit sheets, for which the contractor estimates it may cost between $3,000 to $5,000.68 The author of the quote and email did not confirm his evidence at the hearing and was not available to be questioned by Mr Jarvis and by me. [95] The evidence before me as to the circumstances under which this additional carpentry work may be required and its likelihood of being required is not well explained. I am not satisfied that this work is necessary because the evidence is that it may be required. The evidence as to which claimed defective work performed by Mr Jarvis that this possible rectification work relates to is not clear. As I understand it the possible additional carpentry work relates to the area referred to by Mr Timms to which I referred earlier at [86]. I found that I was not satisfied that Mr Jarvis breached his duty of care to Mrs Burnell in this respect. I therefore find that no damages are payable for that work. [96] Mr Jarvis accepted that the quote was reasonable for the work described but he disputed that such work was necessary. He says the complete replacement of the gutters and fascia is unnecessary and unreasonable. He has offered to clean the affected areas with a good quality mineral turpentine to remove the touch up paint and further to re-paint all of the guttering if Mrs Burnell is not satisfied with the cleaning. He says these steps should be taken prior to a complete removal and re-installation. [97] Mrs Burnell says the proposed method of rectification is not suitable because she will not receive the benefit of colourbond gutters, which do not need to be repainted over time nor the 10-year colourbond warranty. [98] I am satisfied that it is reasonable and necessary to replace the gutters and fascia, in order for the works to be brought into conformity with what would have been the result had the works been carried out in an appropriate and skilful way i.e. colourbond gutters and fascia with the benefit of the manufacturer’s warranty and which do not require re-painting and which are installed with reasonable care and skill. [99] During the hearing Mr Twible gave evidence, and I accept, that it was likely not practicable or economical to only replace the sections with the discolouration, including because of the number of sections affected and because any new product used was likely to have a colour variation to the older product installed. Mr Jarvis gave evidence that in installing colourbond gutters and fascia joins should be 66 Ibid, [80]. 67 Exhibit 3, Annexure W. 68 Ibid, page 93. -- 18 of 21 -- 19 minimised and that replacement of discoloured sections would not achieve that objective. [100] Mr Jarvis submitted that he should be permitted to rectify the works should I find the works defective. He says he has not had the opportunity to return to look at the further issues raised by Mrs Burnell’s evidence. He says he did not ask to go and look at them nor did he ask the Tribunal for a direction to allow him to inspect. He says he was unaware that he could do so. [101] As I understand it Mr Jarvis says that by not permitting him to return and attempt to rectify the issues that Mrs Burnell has not taken any or any sufficient steps to mitigate her loss. I am not satisfied that it was unreasonable of Mrs Burnell to refuse Mr Jarvis an opportunity to rectify the discolouration defect as his proposed method of rectification was not reasonable in the circumstances. [102] I am not satisfied that Mr Jarvis should now be permitted to return to inspect and rectify the further issues raised in the evidence. I am satisfied that the rectification work, which is necessary and reasonable to rectify the discolouration defects, is to replace all the gutters and fascia. I accept the quote as being the costs of doing so. The other defective installation issues as found will also be rectified by that work. [103] The relationship of trust between Mrs Burnell and Mr Jarvis has clearly broken down. If Mr Jarvis was ordered to return and rectify the works that is likely to result in further disputes, which is an outcome to be avoided. Is a claim in restitution available? [104] I am not satisfied, on the evidence, that a claim in restitution has been proven. [105] As the Tribunal has previously found69 A claim for restitution arises independent of contract and is based upon unjust enrichment. Put simply, restitution is a claim to restore to person A a benefit conferred on person B at the expense of person A in circumstances which make it unjust that person B should retain that benefit. [106] There is no suggestion that Mrs Burnell paid for work not performed by Mr Jarvis. The claim is that the works performed were defective requiring rectification. [107] Mrs Burnell contends that the extent of discolouration of the gutters and fascia reduces the street appeal of her home and therefore its value. There is no evidence of diminution in value by any relevant expert. Even if I was satisfied that Mrs Burnell was entitled to restitution, there is no evidence upon which I could rely to quantify a restitutionary claim. Human Rights Act (HR Act) [108] The HR Act commenced on 1 January 2020. All individuals in Queensland have human rights.70 A human right may only be subjected to reasonable limitations.71 69 Judd v McPhail [2022] QCAT 125, [28]. 70 Human Rights Act (Qld) 2019, s 11 (HR Act). 71 Ibid, s 13. -- 19 of 21 -- 20 The parties who were not legally represented did not make any submissions about the application of the HR Act. [109] In deciding this application: (a) I am not acting as a public entity because I am not acting in an administrative capacity.72 (b) I have interpreted statutory provisions, to the extent possible that is consistent with their purpose, in a way that is compatible with human rights.73 [110] I accept that this application and the hearing potentially impacts both parties’ rights to a fair hearing and I considered them in conducting the oral hearing by allowing each party to give evidence and make submissions and in coming to my decision by considering the documents filed by and the oral evidence given by or on behalf of each party.74 [111] I accept that these proceedings and my decision potentially impacts other rights, in particular property rights75 and the right to privacy and reputation.76 I have considered the parties’ human rights and am satisfied that the decision is compatible with their human rights as any limitations on those rights are reasonable and justifiable.77 Any limitation of the parties’ human rights is consistent with the objects of the QBCC Act78 and the objects of the QCAT Act.79 Costs [112] Mrs Burnell sought an order for costs. [113] It is a well-established principle that the Tribunal’s discretion to award costs in a building dispute80 is a broader and more general discretion than the one conferred by the QCAT Act.81 [114] The Tribunal, in exercising its general discretion to award costs, may consider the matters referred to in section 102(3) of the QCAT Act. It may award costs where a party makes a written offer to settle the dispute, the offer is not accepted within the time the offer is open and in the opinion of the Tribunal the decision is not more favourable to the other party than the offer.82 Even if the formal requirements to invoke this additional power are not met an offer to settle and whether it was unreasonably not accepted may be a relevant factor in the exercise of the discretion.83 [115] There is some evidence that Mrs Burnell incurred costs in bringing this proceeding. Mrs Burnell paid Mr Timms $300 for his initial building inspection report with 72 Ibid, s 9(4)(b). 73 Ibid, s 48. 74 Ibid, s 31. 75 Ibid, s 24. 76 Ibid, s 25. 77 Ibid, s 8, s 13, s 31, s 48. 78 QBCC Act, s 3. 79 QCAT Act, s 3. 80 QBCC Act, s 77(3)(h); Lyons v Dreamstarter Pty Ltd [2011] QCATA 142. 81 QCAT Act, s 100, s 102. 82 QCAT Act, s 105; Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86. 83 Campbell v Queensland Building and Construction Commission [2021] QCATA 34. -- 20 of 21 -- 21 photos.84 At the oral hearing, Mrs Burnell also sought the costs of Mr Timms and Mr Twible attending the hearing in the amounts of $105.05 (incl GST)85 and $210 respectively. [116] Mrs Burnell sought the filing fee paid. However, the Tribunal record shows that the filing fee was waived. [117] It is appropriate to make directions for submissions and further evidence to be filed in view of my findings set out above, including that Mrs Burnell was substantially but not completely successful in her claims, prior to deciding whether the discretion to award costs should be exercised. 84 Exhibit 3, Annexure V. 85 $95.50 (plus GST). -- 21 of 21 --