David John Ward & Anor v Tailor Made Constructions Pty Ltd [2023] QCAT 35

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: David John Ward & Anor v Tailor Made Constructions Pty Ltd [2023] QCAT 35 PARTIES: DAVID JOHN WARD NICOLE SKY WARD (applicant) v TAILOR MADE CONSTRUCTIONS PTY LTD (respondent) APPLICATION NO/S: BDL188-18 MATTER TYPE: Building matters DELIVERED ON: 27 January 2023 HEARING DATE: 8 March 2022 HEARD AT: Brisbane DECISION OF: A/ Senior Member Fitzpatrick ORDERS: Tailor Made Constructions Pty Ltd ACN 135056914 pay the sum of $21,102.75 to David John Ward and Nicole Sky Ward within 21 days from the date of this decision. CATCHWORDS: CONTRACTS – PARTICULAR PARTIES – PRINCIPLE AND AGENT – CREATION OF RELATION OF AGENCY – FORMATION AND PROOF OF AGENCY – AGENCY CREATED BY OTHER MEANS – IMPLICATION OF AGENCY FROM PARTICULAR CIRCUMSTANCES – entering contract through authorised agents – relationship between principle and agent is constituted retrospectively CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – breach of contract – damages for breach of contract – relevant loss and contemplation of the parties – entitlement to terminate contract – entitlement to liquidated damages if contract terminated – calculating liquidated damages – costs associated with terminating a contract – naturally arising losses caused by breach – time spent is not a sufficient condition to determine loss – award for lost profit due to delay in contract competition – no interest on liquidated damages because it is recoverable as a debt – reasonably -- 1 of 14 -- 2 reliance on a representation and estoppel – fixed cost contracts and charges not part of the contract price Acts Interpretation Act 1954 (Qld), s20(2)(b) Domestic Building Contracts Act 2000 (Qld), s30. Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld), s62 Sustainable Planning Act 2009 (Qld), s648F(2) Planning Act 2016 (Qld), s144 Davison v Vickery’s Motors Ltd (in liq) (1925) 37 CLR 1 Hadley v Baxendale (1854) 9 Exch 341 Robinson v Harman (1848) 1 Exch 850 Trevorrow v Council of the City of the Gold Coast [2018] QCA 19 Trevorrow v Council of the City of the Gold Coast [2017] QSC 12 Triple Point Technology, Inc v PTT Public company Ltd [2021] UKSC 29 Worthington v Ryan; Ryan v Worthington [2021] QCATA 138 APPEARANCES & REPRESENTATION: Applicant: Self-represented Respondent: Self-represented REASONS FOR DECISION [1] At the hearing of this matter the applicants Mr and Mrs Ward appeared and gave evidence. Mr Andrew Williams, Director of the respondent Tailor Made Pty Ltd ACN 135056914 (Tailor Made), appeared and gave evidence on behalf of the respondent. [2] Mr and Mrs Ward seek damages for breach of contract from Tailor Made. After being de-registered Tailor Made was reinstated to the register by ASIC on 7 August 2019 upon the application of Mr and Mrs Ward. [3] Tailor Made confirmed that it was not proceeding with any counter-application. [4] The background to this matter is that Mr and Mrs Ward purchased land on which to construct a duplex to be used for investments purposes. The land is located in Toowoomba. Unless otherwise noted that factual matters derived from the evidence and set out in this decision are uncontentious. [5] The land is part of the Glenvale Rise Estate, which is land subdivided for the purpose of constructing dwelling houses. After discussions with a marketing agent Cashflow Property Experts, the Wards agreed to enter into a house and land package. A contract for sale of vacant land dated 18 September 2013 forms one part of the contractual arrangements. The seller of the land is Greenwattle Developments Pty Ltd ACN 14243083. The purchase price is $182,000.00. -- 2 of 14 -- 3 [6] A contract for a new home construction also forms part of the contractual arrangements. That contract is dated 9 August 2013.1 A person named Matthew Taylor has signed the contract purportedly as the building contractor named as Tailor Made. His signature is witnessed by Dean Morgan. The contract price is $330,000.00 [7] Mr Williams’ evidence is that Dean Morgan of New World Leisure was the developer of the site and that Matthew Taylor worked with him. Mr Williams says that he was approached by Dean Morgan and they agreed to an arrangement that Tailor Made would act as building contractor in the development but with all work subcontracted out to Goldberg Constructions. [8] Tailor Made entered into a subcontract agreement with Steven Goldberg trading as Goldberg Construction dated 16 May 2014, whereby the Wards’ duplex would be constructed by Goldberg Construction for the contract price of $242,174.00. [9] Personnel from Cashflow Property Experts were a point of contact with the Wards during the course of the construction. It is unknown what relationship existed between the various entities involved in the house and land package acquired by the Wards. No evidence was given at the hearing on behalf of any of those entities. [10] It transpired that completion of the work was delayed and the work was defective, resulting in termination of the contract by the Wards and a Direction to rectify to Tailor Made by the Queensland Building and Construction Commission. Eventually a claim was made by the Wards on the statutory insurance scheme and some of their losses associated with completion and rectification of the works were recovered. Mr Williams says that his builder’s licence was cancelled and Tailor Made was disqualified from holding a company licence. [11] The Wards have satisfied the requirements of s77(2) of the Queensland Building and Construction Commission Act 1991 (Qld) and I am satisfied that the Tribunal has jurisdiction to determine the dispute between the parties. The contract [12] The contract is subject to the now repealed Domestic Building Contracts Act 2000 (Qld) (DBCA), in force from 17 May 2013, covering the date the contract was entered on 9 August 2013.2 [13] The DBCA provides that a regulated contract such as the contract in question, has effect only if it is signed by the building contractor and the building owner, or their authorised agents. 3 [14] Is the signatory for the building contractor, Matthew Taylor the authorised agent of Tailor Made? There is no evidence that Tailor Made authorised Matthew Taylor to sign the contract on its behalf. However, Tailor Made has proceeded with the contract, arranging for the commencement of work and taking responsibility for the work of its subcontractor. I find that by these actions it has ratified Mr Taylor’s otherwise unauthorised actions taken on Tailor Made’s behalf, so that the relation of principal 1 Exhibit 6 attachment 4 – signed Schedule for BSA new home construction contract; Exhibit 4 – attachment 5A General Conditions of BSA new home construction contract. 2 Acts Interpretation Act 1954 (Qld), s20(2)(b) – the repeal or amendment of an Act does not affect a right, privilege or liability acquired, accrued or incurred under the Act; Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld), s62. 3 Domestic Building Contracts Act 2000 (Qld), s30. -- 3 of 14 -- 4 and agent is constituted retrospectively and Tailor Made as principal is bound by Mr Taylor’s actions in signing the contract to the same extent and with all the same consequences as if it had been done by its previous authority.4 [15] I find that the parties entered into an enforceable contract. [16] The Wards terminated the contract by Notice of Termination dated 19 June 2015, relying upon s90(1)(b) of the DBCA, which provides that a building owner under a regulated contract may end the contract if the work is not finished within a period that is 1.5 times – if the contract has an effective completion period – the period. [17] In this case the Wards relied upon the Form 1 Commencement Notice5 provided by Tailor Made which certified that work commenced on site by 25 July 2014. The contract provided a period of 125 days for completion of work. I accept the evidence of the Wards that at the time of terminating the contract the works were not complete and required rectification. [18] I find that the Notice was validly given as a result of Tailor Made failing to complete the works within 1.5 times, the time stipulated in the contract for completion of the works, and that the contract was validly terminated. Tailor Made did not contend otherwise. Entitlement to damages for breach of the contract [19] The general principle is that where a party sustains loss by reason of a breach of contract, the party is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.6 The innocent party is entitled to recover their net loss after taking into account the cost to complete within the terms of the contract. I note that the Wards through the statutory insurance scheme engaged another contractor to rectify and complete the works and that the balance contract price following termination of Tailor Made was contributed to the cost of that work. The result is that the damages claimed by the Wards in these proceedings represents a net loss. [20] Relevant loss must in fact have been suffered, the loss must have been caused by the breach and the loss must not be too remote from the breach. That is loss must arise naturally from the breach of contract or may reasonably have been in the contemplation of both parties when they made the contract as the probable result of a breach.7 [21] The parties may also as a substitute for damages at common law, stipulate an amount payable in the event of default. In this case the parties have agreed to liquidated damages in the event of delay in completion. Claims made by the Wards [22] The Wards seek: 4 Davison v Vickery’s Motors Ltd (in liq) (1925) 37 CLR 1, 19 (Isaacs J). 5 Exhibit 1, attachment 2B. 6 Robinson v Harman (1848) 1 Exch 850, 855 (Parke B). 7 Hadley v Baxendale (1854) 9 Exch 341 (Alderson B). -- 4 of 14 -- 5 (a) Liquidated damages – $11,700.00 calculated from what is said by them to be the contracted date for Practical Completion to the termination date: 234 days x $50 per day; (b) Costs associated with terminating the contract – $3,139.97 including legal costs, building inspection report, changing the locks, site visit, and time involved in preparation of the QBCC complaint; (c) Council infrastructure charge $26,129.29; (d) Costs not covered by the QBCC Home insurance scheme of $854.87 being the cost of installation of a second conduit and telephone line together with the time spent in finalizing the issue; (e) Tribunal costs of $2,562.59 including filing fee, copying, printing, postage and time spent preparing Tribunal material; (f) Damages incurred between contract termination and duplex completion of $32,850, being lost rent from the date of contract termination until completion; (g) Interest. Liquidated damages Contractual provisions [23] Clause 12 of the Schedule to the contract provides for $50 per day for each calendar day of delay in achieving Practical Completion. [24] Clause 19 of the General Conditions to the contract provides that if the contractor fails to achieve Practical Completion of the Works by the Date for Practical Completion, then the Contractor must pay to the Owner liquidated damages calculated at the rate provided in Schedule Item 12. [25] Clause 19 further provides that liquidated damages may only be deducted by the Owner from the amount payable to the Contractor in respect of the Practical Completion Stage. If the Owner’s entitlement to liquidated damages exceeds the amount payable to the Contractor for the Practical Completion Stage, the excess may be recovered by the Owner as a debt due to the Owner by the Contractor. Is an entitlement to liquidated damages engaged? [26] The contract does not express when liability for liquidated damages comes to an end. The relevant provisions anticipate that the contract will remain on foot and that the contractor will at some later point bring the works to Practical Completion, so that liquidated damages are recovered from the progress payment due as a result of Practical Completion. The contract deals with how the liquidated damages are to be recovered. That is by offset against the progress claim due on Practical Completion and for sums in excess of that amount by means of recovery of a debt. [27] On 1 June 2015 Mr Williams advised the Wards by email that Practical Completion had been reached and that he was liaising with their property manager and inspector for inspections to be done that week. Tailor Made did not adduce any evidence that the works had in fact reached Practical Completion. [28] Section 67 of the DBCA defines the Practical Completion stage in the context of a requirement that a building contractor cannot demand the completion payment unless -- 5 of 14 -- 6 the Practical Completion stage has been reached. Practical Completion stage means when the subject work has been completed in accordance with the contract and all relevant statutory requirements either without any omissions or defects or apart from minor omissions or minor defects and the dwelling is reasonably suitable for habitation. [29] The contract provides at clause 15 of the General Conditions that following notice of Practical Completion there must be an inspection, and if all relevant certificates of inspection have been provided and all inspections and approvals are satisfactorily completed then a defects document and Certificate of Practical Completion can be given. [30] Tailor Made provided no evidence that clause 15 had been complied with, that all statutory requirements had been met and that apart from minor omissions or minor defects the duplex was reasonably suitable for habitation. [31] I find that as at the date of termination of the contract on 19 June 2015 Practical Completion had not been reached. [32] The contract was terminated after the dated for Practical Completion but before the date of Practical Completion and before the final progress claim fell due. [33] A question arises as to whether there is any entitlement to liquidated damages if the anticipated offset from the progress claim due on Practical Completion does not occur. [34] I consider the contract is attempting to deal with the situation where an owner may seek to deduct liquidated damages from an earlier progress payment. In other words, if an offset is intended to be used it “may only” be utilised in relation to the final payment when due. [35] The more significant issue is the effect of termination of the contract on the Wards’ entitlement to liquidated damages. The contract deals with a party’s entitlement to recover from a party in breach for all damages, loss, cost or expense occasioned to a party terminating the contract under clause 27 of the general conditions, as a result of substantial breach. Clause 27.2 provides that the right to terminate under this condition is in addition to any other powers, rights or remedies the terminating party may have. Clearly the contract does not anticipate any limitation on a party’s entitlement at law to accrued rights following termination. [36] The Wards have availed themselves of a statutory right to terminate the contract. [37] The general law is that the accrual of liquidated damages comes to an end on termination of the contract. After that event, the parties’ contract is at an end and the parties must seek damages for breach of contract under the general law. Parties do not have to provide specifically for the effect of the termination of their contract, that is taken as read.8 [38] After the date of termination the building contractor’s liability to pay damages for late completion depends upon the owner proving its damage as general damages, according to the principles set out earlier. 9 The issue is dealt with later in the decision 8 Triple Point Technology, Inc v PTT Public company Ltd [2021] UKSC 29, 35. 9 Nicholas Dennys and Robert Clay (eds), Hudson’s Building and Engineering Contracts, (Sweet & Maxwell, 14 th ed, 2020) 720. -- 6 of 14 -- 7 in relation to the claim for consequential loss including the costs of terminating the contract, lost rental and holding costs on the property. [39] I find that the Wards are entitled to liquidated damages for delay in completion by Tailor Made. Calculation of liquidated damages [40] As to the correct calculation of liquidated damages it is necessary to determine the date for Practical Completion under the contract. [41] The Date for Practical Completion is set out at Clause 6 of the Schedule to the contract, being: 125 calendar days as calculated in Schedule Item 4 (Total Construction Period) from the Starting Date or the date on which the work under this contract is commenced, whichever is the earlier. [42] In this case the Starting Date is the date work commenced. [43] The Starting Date is referred to in clause 3 of the Schedule as “TBA”, meaning to be advised. The clause provides that the Contractor is required to ensure that the work under the contract starts by the latest of the starting date stated in the Schedule or relevantly 10 business days after the issue of approved plans by the Assessing Certifier. [44] By clause 12 of the General Conditions the contractor is required, within 10 business days after the date on which work under the contract commences on site, to give a Commencement Notice stating the date on which work under the contract commenced on site and the date for Practical Completion. The Commencement Notice was given late, on 16 September 2014, and records the date work commenced on site as 25 July 2014 and the date for Practical Completion as 27 November 2014. I note that date is 125 days from the date work commenced. [45] The Wards contend that the Starting Date must have been earlier based on information from Cash Flow Property Experts about work on site and advice from the private certifier that the approved plans were issued on 11 June 2014. No evidence was called from those persons. [46] I note an email from Mr Williams to Mr Ward dated 25 November 2014 confirming that his dates show work starting on 25 July 2014. He refers to delays because of a lack of contractors and trades, and indicates completion is anticipated in early February.10 [47] I find that the Starting Date was 25 July 2014 in accordance with the Commencement Notice, which is the latest of the relevant dates, accepting it as the date “TBA”, or to be advised, and in fact advised. [48] There is no evidence that Tailor Made sought an extension of time for Practical Completion within the terms of the contract, despite the anticipated delay. I find that the contractual date for Practical Completion was 27 November 2014. 10 Exhibit 1 – attachment 2A. -- 7 of 14 -- 8 [49] A final inspection certificate was given by the replacement certifier for completion of an existing dwelling on 23 June 2016. [50] I find that the Wards are entitled to liquidated damages from the date for Practical Completion under the contract on 27 November 2014 to the date of termination of the contract on 19 June 2015. That is 205 days x $50 per day resulting in liquidated damages of $10,250.00. Costs associated with terminating the contract [51] On the basis of evidence that the QBCC directed Tailor Made to rectify defective work11 I find that Tailor Made was in breach of its obligation under clause 3 of the General Conditions of Contract and in breach of the DBCA statutory warranty to carry out the work in an appropriate and skilful way and with reasonable care and skill. [52] Although some damages claimed by the Wards have not been characterised as damages for breach of these obligations it is clear from their material that the losses claimed were caused by such a breach. [53] I find that the cost of a building inspection and report was incurred as a result of the breach of contract relating to defective work. A receipt for the work and report has been provided. Such a cost arises naturally from the breach of contract. I find that the Wards are entitled to recover the sum of $370.00 from Tailor Made. [54] Likewise, I find that the cost of a site visit during the QBCC dispute resolution process was incurred as a result of the breach of contract for defective work. Receipts for relevant costs have been provided. The costs arise naturally from the breach of the contract. I find that the Wards are entitled to recover $424.46 for the cost of travel from Tailor Made. [55] A claim is made for Mr or Mrs Ward’s time spent travelling. Their time is valued by reference to the minimum wage for 2015/2016. I refuse that claim on the basis that no actual loss has been established. Time has been spent but that does not mean a loss has been sustained. I make a similar finding in relation to all of the claims for time spent and disallow those claims. [56] As to the delay in Practical Completion giving rise to an entitlement to terminate the contract, that breach gives rise to certain other claims by the Wards. [57] A claim is made for legal costs of $1,414.65 in terminating the contract. A copy of the lawyer’s invoice as been provided. The cost arises naturally from the breach. The Wards are entitled to recover the sum of $1,414.65 from Tailor Made. [58] A claim is made for $343.00 for the cost of changing locks when the keys to the duplex were not returned by the builder upon request. Evidence of the expenditure has been provided. The costs arise naturally from the breach. The Wards are entitled to recover the sum of $343.00 from Tailor Made. [59] The total award of damages under this head is $2,552.11. Infrastructure Charges [60] After acquiring the land and entering into the building contract the Wards received a copy of a letter from Toowoomba Regional Council addressed to Tailor Made, dated 11 Exhibit 1 – attachment 2C. -- 8 of 14 -- 9 23 June 2014, attaching an adopted infrastructure charges notice in an amount of $26,112.00.12 [61] By email on 7 July 2014 Mrs Ward asked Melanie Shaharudin of Cash Flow Property Experts whether they needed to action the invoice for development costs. No reply to that query was given. [62] Mr Ward’s evidence is that he immediately contacted Mr Williams by telephone to express his concern that the charge would be passed on to Mr and Mrs Ward. Mr Ward asserts that Mr Williams told him that the charges would be paid by the builder. [63] Mr Williams denies that conversation occurred. He suggested that the conversation may have occurred with Mr Morgan.13 He denied the conversation when it was put to him in cross-examination. [64] Both Mr Ward and Mr Williams were creditable witnesses. I am unable to determine whether the alleged conversation occurred or not, however, if it occurred such a promise to pay the infrastructure charge is not enforceable the representation was made after the contract was entered, it was not supported by writing as a variation of the contract and no consideration was given for the promise. The Wards do not assert the facts necessary to establish an estoppel. [65] The Wards assert that it was represented to them by Heidi Titterness of Cashflow Property Experts that the total house and land package would cost no more than $512,000 and the associated borrowing costs. A property investment analysis was given to them by Cashflow Property Experts which referred to property costs of $512,000. No reference was made to an infrastructure charge. The Wards relied upon the representation as to their total costs when deciding to enter into the house and land package arrangement. [66] On 27 September 2017 the Wards received a letter from the Toowoomba Regional Council advising that the charge fell due for payment when the certificate of classification for the building work was given on 23 June 2016. Payment was required by 31 October 2017. The Wards applied for a waiver which was declined. The charge was paid by them on 20 October 2017. [67] The Wards assert that Tailor Made was responsible for payment of the charge under the contract and that it should re-imburse them for the expenditure. The basis of the claim that the builder is responsible for the charge is that they entered a “turn key”, fixed price contract with the builder and that they expected to receive the completed duplex with no other cost. I note that the infrastructure charge does not form part of the contract price. The Wards do not say that the contract expressly referred to an infrastructure charge. [68] The Wards point to the fact that the builder applied for a discount on infrastructure charges for other property owners with whom it had building contracts, at the Glenvale Rise Estate, and suggest that Mr Williams would not have done so if Tailor Made had no obligation to pay the charge on their behalf. Following a Right to Information request, materials received from Toowoomba Regional Council included a receipt in 12 Application for domestic building dispute, filed 6 July 2018, attachment “O”. 13 Exhibit 8 – paragraphs 2 and 8. -- 9 of 14 -- 10 favour of “Taylor Made Constructions Pty Ltd” for payment of the sum of $20,480 for an infrastructure charge for an unidentified property. [69] The Wards say that an entitlement to a discount on the infrastructure charge was available under a Temporary Urban Consolidation Incentives Policy14 between 19 February 2013 and 30 June 2014. They say that if Tailor Made had applied at the relevant time on their behalf they would have been entitled to the discount as occurred with some of the properties at the Estate. They contend that the builder failed in its contractual obligation to minimise costs to them by failing to inform them of the infrastructure charge and their obligation to pay, to inform them of the incentives policy and to lodge an application for a discount on their behalf. [70] Mr Williams evidence is that he was asked by Dean Morgan to apply for a relaxation of the infrastructure charges. He did not give any explanation as to why no application was made for the Wards. Mr Williams evidence is that he understood Mr Morgan may have paid some infrastructure charges. Mr Morgan was not called to give evidence. [71] Mr Williams strenuously denied ever making a payment to the Toowoomba Regional Council for any property owner’s infrastructure charges. He says that the receipt15 showing a payment from “Taylor Made Constructions” was never made by him or the company. He points to a wrong spelling of the company name. He suggests Mr Morgan may have made the payment and fraudulently attributed it to the company. [72] Mr Williams evidence is that the charge relevant to the Wards’ property had not been raised by the Toowoomba Regional Council at the time the contract was entered. He did acknowledge in cross-examination that he applied for a discount for one property in the development in June 2013 and that he was aware of the incentive scheme whereby a paperwork rebate could be given by Council. Mr Williams could not recall why he did not tell the Wards about the available discount. [73] I note by reference to a letter from the Infrastructure Charges Officer at the Toowoomba Regional Council to a different owner, provided pursuant to the Right to Information application, that applications were to be submitted during this period and building work for the purposes of approval were to be substantially started by 30 June 2014 (that is at Framing Stage). In the Wards’ case the approval for carrying out building work was given on 11 June 2014.16Work commenced on 25 July 2014. It would appear that the Wards fell outside the policy in any event. [74] When asked in cross-examination why Mr Williams was doing something he was not responsible for (that is making applications for discounts on infrastructure charges), he replied: “No comment”. [75] Mr Williams evidence is that he was contracted to build the duplex. The contract did refer to the infrastructure charge and did not require the builder to pay that charge. [76] He says that: “Infrastructure charges would always be listed as an extra charge on the build contract as this is a substantial extra as banks would not value up the contract.”17 [77] I observe that if the infrastructure charge had been included as an expense in the property investment analysis the investment would have a less favourable financial 14 Exhibit 3 – attachment 3K. 15 Exhibit 3 – attachment 3C. 16 Exhibit 4 – attachment 5B. 17 Exhibit 6 paragraph 17. -- 10 of 14 -- 11 outcome. Similarly, if the charge was added to the cost of the land or the construction costs, in circumstances where the whole of those costs are borrowed, the lender’s valuation may not have reached the cost of the house and land. Plainly these are matters which relate to the business of the developer and its marketers. [78] Although the Wards informed the Tribunal that they were obtaining an affidavit from Ms Titterness of Cash flow Property Experts, it was never provided and she was not called to give evidence. [79] The relationship between Tailor Made and the entities involved in the development and its marketing and sale are unknown. The little conveyed in evidence by Mr Williams in relation to his involvement with Mr Morgan, said to be from the development company, suggests that there was at least a working relationship. Whether the relationship amounted to a joint venture or a partnership is unknown. It is not possible on the state of the evidence to fix Tailor Made with liability for the actions of the developer and its marketing and sales entities, if indeed their actions do give rise to liability. What does the contract say? [80] The contract provides for construction of 2x3 bedroom units as per attached plans and specifications supplied by the contractor. The plans reveal a duplex dwelling. Clause 16 of the General Conditions refers to the Lump Sum component: The Lump Sum Component of the Total Price is the sum for which the Contractor must supply, in accordance with this Contract, everything necessary for the proper completion of the Works and for the performance of the work under this Contract… [81] The contract is silent in relation to an infrastructure charge. I do not consider the contract itself imposes any obligation on Tailor Made to pay the infrastructure charge as payment of the charge is not necessary for actual construction of the duplex. What does the legislation say? [82] The legislation governing infrastructure charges is complex and has been the subject of considerable amendment over the period from the date of issue of charge on 23 June 2014 through to the date it fell due upon issue of the final inspection certificate on 23 June 2016 and then as at the date of demand for payment from the Wards on 27 September 2017. [83] However, working from the date the charge was issued, s648F(2) of the Sustainable Planning Act 2009, in force on 23 June 2014, provided that an adopted infrastructure charges notice may be given in relation to, relevantly, a development approval. By s648F the local government must give the notice to the applicant. By s638F(4) the charge is not recoverable unless the entitlements under the development approval are exercised. [84] By s648H an adopted infrastructure charge is payable before the certificate of classification for the building work is issued. [85] By s648L(1) an adopted infrastructure charge levied by a local government is, for the purposes of recovery, taken to be rates. -- 11 of 14 -- 12 [86] Subsequent iterations of the Act applying as at 23 June 2016,18 and upon the demand being made on 27 September 2017,19 all have in common a provision to the effect that a levied charge for the purpose of recovery is taken to be rates of the local government that levied it, subject to any agreement between the local government and the applicant. There is no evidence of any agreement between those entities. The provisions do not expressly state that the applicant must pay any infrastructure charge, merely that the charge is to be given to the applicant. [87] An earlier equivalent section to s648L was considered by Jackson J in Trevorrow v Council of the City of the Gold Coast.20 The decision was affirmed by the Queensland Court of Appeal.21The effect of the decisions is that the provisions of the legislation whereby the charge is taken to be rates make the proprietor liable to pay the infrastructure charge. The reasoning is that the owner is in control of the use of the land and is in a position to protect its interests by appropriate avenues of recourse to the applicant for unpaid infrastructure charges. [88] The upshot is that at the time of entering into the contact to purchase the land and to build the duplex, the Wards through their legal advisor could have conducted a search to determine if the Toowoomba Regional Council would levy an infrastructure charge and if so required a contractual term as to the party responsible for payment and if necessary required an indemnity. That does not seem to have occurred. [89] On the basis of Trevorrow’s case, I find that there was no express statutory requirement for the builder to pay the infrastructure charge. The charge was at all relevant times recoverable from the Wards. Any different outcome would require an agreement between the Wards and the builder. [90] The claim for recovery of the infrastructure charge is refused. Cost of installation of a second conduit and telephone line [91] The Wards assert that it is an industry standard for two separate conduits, one to each side of the duplex with one cable in each to be installed. I accept their evidence that Telstra refused to connect the telephone for the tenant in unit 8A until a second conduit was installed. The cost fell outside the statutory insurance scheme. The installation of the second conduit and telephone line cost $803.00. Proof of expenditure has been provided. [92] I have previously refused the claim for time spent by the Wards on this issue. [93] The plans attached to the schedule for the construction contract22 do not reveal any conduit for telecommunication services. Nevertheless, I accept that the subcontractor on site installed one conduit. On the basis of the Wards’ evidence I accept that was unacceptable to Telstra and that a second conduit was necessary. I find that the work conducted by way of installation of telecommunications services was defective. I find that the Wards are entitled to recover the cost of installing a second conduit and line to unit 8A in the sum of $803.00. The cost is a natural consequence of the breach of contract. 18 Sustainable Planning Act 2009 (Qld), in force from 23 March 2016 to 18 May 2017, s664. 19 Planning Act 2016 (Qld), in force from 3 September 2017 to 31 December 2017, s144. 20 [2017] QSC 12. 21 [2018] QCA 19. 22 Exhibit 6, attachment 4. -- 12 of 14 -- 13 [94] At the hearing Mr Williams deflected responsibility for the second conduit, saying that the Wards should look to the subcontractor for recovery. The Wards’ contract is with Tailor Made, not the subcontractor. I do not accept his submission. Financial losses [95] The Wards seek recovery of lost net rental income for a period of 370 days between the date of contract termination on 19 June 2105 and the date when the duplex was actually completed, in an amount of $32,850.00 calculated as 365 days x $315/week per unit less expenses of $26,133.05 resulting in a loss of $6,716.95. [96] Such a loss in a natural consequence of breach of the contract in failing to bring the contract to completion within the stipulated time. The Wards are entitled to recover the sum of $6,716.95 for lost profit. [97] The Wards also seek to recover their expenses for borrowing costs, council rates, water rates and lawn mowing. Those expenses would have been incurred by the Wards if the contract had been performed. Given the object of damages is to put them in the position they would have been in had the contract been performed, the amounts claimed are not recoverable. [98] Other than contending that there was no liability for the claim Tailor Made did not challenge the likely rent or the calculation. Outlays associated with the proceeding [99] The Wards have largely succeeded in their claims. I consider it is in the interests of justice that they recover the filing fee, copying costs, postage and the cost of re- instatement of Tailor Made. For the reasons given earlier I do not allow an amount for their time. The Wards are entitled to recover the sum of $780.69. Interest [100] The Wards claim interest on: (a) Unpaid liquidated damages since they fell due at the date of termination; (b) The costs of terminating the builder from the date of termination; (c) The infrastructure charge from the date of payment. [101] The power to award interest falls under s77(3)(c) of the Queensland Building and Construction Commission Act 1991 (Qld) and s54 of the Queensland Building and Construction Commission Regulation 2018 (Qld). A power exists only to award interest on damages. Liquidated damages are recoverable as a debt, not damages.23 Accordingly, no interest will be awarded. [102] The claim for recovery of the infrastructure charge was unsuccessful. No interest will be awarded. [103] As to the costs of terminating the builder those damages are not payable until the date provided for in this decision. Until a decision to award damages is made no amount is payable.24 No interest will be awarded. 23 Worthington v Ryan; Ryan v Worthington [2021] QCATA 138, [73]. 24 Ibid., [74]-[75]. -- 13 of 14 -- 14 Conclusion [104] Tailor Made Constructions must pay to David John Ward and Nicole Sky Ward the following sums: (a) Liquidated damages - $10,250.00 (b) Costs associated with terminating the contract - $2,552.11 (c) Cost of installing a second conduit and telephone line - $803.00 (d) Net profit on lost rental - $6,716.95. (e) Outlays associated with the proceeding - $780.69 [105] The total amount payable is $21,102.75. [106] I order that Tailor Made Constructions Pty Ltd ACN 135056914 pay the sum of $21,102.75 to David John Ward and Nicole Sky Ward within 21 days from the date of this decision. -- 14 of 14 --