Cairns Building and Construction Pty Ltd ATF P&T Kelly Trust t/as Phil Kelly Builders v Kaminaras & Anor [2021] QCAT 374

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Cairns Building and Construction Pty Ltd ATF P&T Kelly Trust t/as Phil Kelly Builders v Kaminaras & Anor [2021] QCAT 374 PARTIES: CAIRNS BUILDING AND CONSTRUCTION PTY LTD ATF P & T KELLY TRUST T/AS PHIL KELLY BUILDERS (applicant) V THEO AND TAMMY KAMINARAS (respondents) APPLICATION NO/S: BDL247-19 MATTER TYPE: Building matters DELIVERED ON: 29 October 2021 HEARING DATE: 16 August 2021 17 August 2021 18 August 2021 19 August 2021 HEARD AT: Cairns DECISION OF: Member C.E. Taylor ORDERS: The applicant’s claim for damages, or alternatively for an amount owing, in the sum of $116,715.00, and interest thereon, is dismissed. Subject to Order 3 herein, the applicant is to pay the respondents damages in the sum of $44,206.32 plus interest at the rate of 10% per annum from 22 October 2019 until the date of payment. The applicant’s liability under Order 2 herein is off-set by the unpaid balance of the adjusted contract sum, namely $104,015.13, such that the nett result is that there is no amount to be paid by the applicant to the respondents in satisfaction of Order 2. The respondents’ claim for damages for loss of rental income is dismissed. The respondents’ claim for damages for inconvenience and loss of enjoyment is dismissed. Costs are reserved. -- 1 of 140 -- 2 Should the parties not agree on the issue of costs within 21 days of the date of this order, the issue of costs will be determined by this Tribunal in accordance with the following directions: (a) The respondents are to file 2 copies and serve 1 copy on the applicant any further material upon which they seek to rely, and their submissions, on costs, within 28 days of the date of this order. (b) The applicant is to file two copies and serve one copy on the respondents its material (if any) on which it seeks to rely, and its submissions on costs, including its reply (if any) to the respondents’ submissions, within 14 days of being served with the respondents’ material and submissions. (c) The respondents are to file two copies and serve one copy on the applicant of its submissions in reply (if any), within 7 days of being served with the applicant’s submissions. (d) Unless either party requests a hearing on costs within their submissions filed as per (a) to (c) herein, the issue of costs will thereafter be determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). CATCHWORDS: CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – REPUDIATION – builder asserted work was practically complete and final claim was due for payment – builder did not follow procedure for reaching practical completion and making final claim under contract – homeowner maintained work was not practically complete and payment of final claim was not due – each party asserted the other repudiated the contract – each party purported to terminate the contract CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – GENERAL – REMUNERATION – RECOVERY – homeowner alleged practical completion not reached because of defects or omissions – builder alleged minor defects or omissions did not prevent practical completion – whether practical completion stage achieved – whether builder entitled to payment of final claim – contract terminated – no alternative claim made for restitution – whether doctrine of substantial performance applied. -- 2 of 140 -- 3 CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – DAMAGES – MEASURE OF – where homeowner alleged defects or omissions in work required substantial remedial work – whether the cost of cure or diminution in value was the proper level of remedy – where there was an absence of evidence as to the proposed remedial action being reasonable – where there was an absence of evidence as to the reasonable costs of rectification. Queensland Building and Construction Commission Act 1991 (Qld), s 42, s 77(3)(c), Schedule 1B s 4, s 21, s 22, s 23, s 41(2)(f), Schedule 2 Queensland Building and Construction Commission Regulations 2018 (Qld), s 54 Bellgrove v Eldridge (1954) 90 CLR 369, referred to. Cochrane v Lees [2021] QCATA 74, followed. Freeth v Burr (1874) LR9 CP 208, cited. Koompahtoo Council v Sanpine P/L (2007) 233 CLR 115, cited Laurinda Pty Ltd v Capalaba Park Shopping Centre (1989) 166 CLR 623 – cited. Mann v Patterson (2019) 267 CLR 560 – referred to. McDonald & Anor v Dennys Lascelles Limited (1933) 48 CLR 457 – cited. Mersey Steel and Iron Co v Naylor, Benzon & Co (1884) 9 App. Cas 434 – cited. Michelsen v Pivovarova [2017] QCAT 235 – referred to. Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor [2019] QSC 49 – referred to. Mulder v Queensland Building and Construction Commission [2019] QCAT 395 – referred to. Partington v Urquhart (No 2) [2018] QCATA 120 – considered. Pivovarova v Michelsen (2019) QCA 256 - considered. Shepard v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 – cited. William George Carlsen t/as W & E Carlsen Builders v Tressider [2015] QCAT 260 – referred to. Hudsons – Building and Engineering Contracts 13th Ed. – referred to. APPEARANCES & REPRESENTATION: Applicant: C.J. Eylander instructed by Heatherstone Legal Respondent: D.Kissane instructed by Preston Law -- 3 of 140 -- 4 TABLE OF CONTENTS Background ......................................................................................................................... 5 The Contest ......................................................................................................................... 7 This Tribunal’s Jurisdiction .............................................................................................. 9 The Witnesses ..................................................................................................................... 9 The Applicant’s Witnesses ............................................................................................. 10 The Respondents’ Witnesses .......................................................................................... 16 Defective / Incomplete Work ........................................................................................... 36 Front Entrance Doorway and Door ................................................................................ 41 Security Screens ............................................................................................................. 44 Bathroom Niche.............................................................................................................. 46 Kitchen and Butler Pantry Sinks .................................................................................... 47 Salon Plasterboard .......................................................................................................... 54 Polished Concrete Floor ................................................................................................. 57 Feature Timber and Slat Aluminium Wall ..................................................................... 59 Painting ........................................................................................................................... 60 Boatshed Wall ................................................................................................................ 62 Streetscape Tiles ............................................................................................................. 64 Roofing, Box Gutter and Valley Gutters ........................................................................ 64 Underground / External Drainage .................................................................................. 75 Roof Awning .................................................................................................................. 85 Garage Door Sensors ...................................................................................................... 87 Cleaning.......................................................................................................................... 87 Electrical Solar Panels .................................................................................................... 87 Tender and project management tasks, engineering and drafting services .................... 89 Practical Completion........................................................................................................ 94 Disputed Variations ........................................................................................................ 101 The making of the ‘Final Claim’ & the respondents’ obligation to pay it ................ 103 Termination of the Contract ......................................................................................... 111 The Competing Claims .................................................................................................. 118 The Applicant’s Claim for Practical Completion Stage Payment and Variations........ 118 The Applicant’s Claim for Legal Costs for the Respondents’ Breach of Contract ...... 136 The Respondents’ Counterclaim for Damages ............................................................. 136 The Respondents’ Counterclaim for Loss of Rent ....................................................... 139 Conclusion ....................................................................................................................... 139 -- 4 of 140 -- 5 REASONS FOR DECISION Background [1] Clifton Beach is one of the northern beach suburbs of Cairns. In 2014 the respondents became the registered owners of land there.1 In July 2018 they entered into a contract with the applicant under which it, as builder, would construct a house for them, as owners, on that land.2 Whilst not an elaborate project, it was not modest. The contract price was $828,945.00. [2] The form of the contract document adopted was an ‘HIA Queensland New Homes Construction Contract (QC 1)’. Within that form, the ‘works’ was defined as meaning “the works to be carried out, completed and handed over to the owner in accordance with this contract as shown in the contract documents including variations”. In Item 9 of Schedule 1 therein, the ‘works’ was more specifically described as being “Building and construction (sic) of 1 level masonry block (sic) with time internal walls as per plans drawn by Peddle Thorp Project No No (sic) 183422 A-08 Issue 6 Dated 19/03/18 and including items listed on the attached Phil Kelly Builders Standard Inclusions List dated 30 June 2018.” The drafting of this description is not entirely clear but, on any reading, it is for the construction of a single level house. [3] Within the contract document there was no expression of which party was responsible for the provision of the design and the plans drawn by Peddle Thorp, which I understand to be an architectural design firm. However, by reference to the plans that are included within the contract document and referred to in the description of the works to which I have just referred, it is noted that the ‘Client’ shown thereon is the applicant. Accordingly, from this information and in the absence of any submission to the contrary, I infer that the contract was one for design and construction of the house and I proceed on that basis. [4] In commencing this proceeding, the applicant asserted that the works reached practical completion on or about 29 April 2019. It also says that on 10 May 2019 it issued to the respondents a Notice of Practical Completion, a defects document listing minor defects and omissions, and a final claim. That final claim is said to have been for the sum of $105,731.40 being the aggregate of the practical completion stage claim of $82,895 and variation claims save for Variation 3B for additional tiling.3 1 Ex.21 – para 2. 2 Ibid – para’s 3 & 4. Ex.1 – para 3. A copy of the contract document appears as an Annexure to both Ex.21 and Ex.1. There was a difference between the parties as to what was said to constitute the entirety of the contract documents, but as I understood that difference it was not fundamental to the relief each sought. Such is in effect as submitted by the respondents’ Counsel at para 11 of his written closing submissions. To the extent it arose in my deliberation of the issues in dispute I have addressed it in these reasons at the relevant time. 3 Annexure A to the Applicant’s Application for Domestic Building Dispute – para’s 10 to 12. Whilst I note that technically this Tribunal is a non-pleading jurisdiction in the ordinary sense of the use of the word ‘pleading’, it is convenient for simplicity to use that word in addressing the manner in which the parties have expressed their respective positions in their application and counter-application, and respective responses to each. Thus, for convenience I will refer to these documents in the more common language of the courts as the statement of claim, defence, counterclaim etc, and in terms of pleadings. Whilst paragraph 12 of the applicant’s pleading expresses the claim at $105,731.40 the remainder of that paragraph is confusing. It asserts the practical completion stage claim was $82,895 in contrast to the quantum of the same claim in the Table to paragraph 8 therein which states it to be -- 5 of 140 -- 6 [5] It is common ground that the respondents did not pay that final claim and the parties fell into dispute. By early September 2019 the payment had not been made and the dispute had not been resolved. Each party then purported to have terminated the contract, the respondents on 9 September 2019, the applicant on 10 September 2019. [6] On 19 September 2019 the applicant commenced this proceeding. The relief it seeks is expressed as ‘payment of an amount owing plus default interest’ in the sum of $116,715.00, alternatively ‘an award for damages and interest on damages’ in the same amount. This was expressed further in the statement of claim as being: (a) $105,731.40 for damages for breach of the contract (failure to pay final claim); (b) $4,238.74 for damages for breach of the contract (failure to pay the variation claim 3B); (c) $876.00 for damages for repudiation and wrongful termination of the contract (pool maintenance); and (d) $5,869.00 for damages for repudiation for wrongful termination of the contract (legal costs).4 [7] It sought interest on the first item under the contract, and interest on the other three items pursuant to s 58 of the Civil Proceedings Act 2011 (Qld). [8] It also sought costs of this proceeding. [9] By their amended response filed 25 March 2020,5 the respondents defended the claim in its entirety on the basis that: (a) they have paid all of the variation claims save only for Variations 3B and 6, neither of which the applicant is entitled to payment for; (b) the works did not reach practical completion at any time, and accordingly their liability for payment of the final claim did not arise at any time; and (c) they lawfully terminated the contract prior to the applicant’s purported termination and accordingly there is no basis for the applicant’s claim in damages. $80,414.50. As to the Variation Claims, the total and detail of those claims is shown in the Table to paragraph 6 therein as being $29,555.67 including Variation 3B of $4,238.74 thus giving a balance after excluding 3B of $25,316.93. The final claim of $105,731.40 is the aggregate of $80,414,50 and $25,316.93. 4 I pause here to note that the cumulative effect of these four items is the $116,715.14 expressed as its claim for payment of an amount owing or alternatively as an award for damages. Whilst not expressed in the applicant’s effective statement of claim, that being their Annexure A document to the Application for a Domestic Building Dispute, I read that annexure as being relevant to the claim in either of those forms, albeit it is entirely unclear as to the premise upon which it can be said that the last two items fall within the category of ‘an amount owing’ other that by way of damages. Notwithstanding that, given the decisions I have reached in this proceeding I have not concerned myself with addressing that in detail and have simply treated them all in the alternatives given that this is the way in which the applicant chose to express its claim in the originating document. 5 The respondents original ‘Response and/or counter-application’ is shown as having been filed 21 October 2019, but then amended with the revised document shown as having been filed 25 March 2020. -- 6 of 140 -- 7 [10] They simultaneously raised a counterclaim against the applicant, seeking damages for breach of contract, alternatively breach of warranty, alternatively in negligence, all for the following: (a) The reasonable cost of completing incomplete works - $114,434.89;6 (b) The reasonable cost of rectifying defective works - $45,870;7 (c) Loss of rent on a residential property they assert they had to remain in until such time as the house contracted to be built was completed – Unspecified quantum;8 (d) Inconvenience and loss of enjoyment of the house constructed by the applicant under the contract – Unspecified quantum.9; and (e) Interest on damages under the Civil Proceedings Act 2011.10 [11] The respondents also sought costs against the applicant. [12] By its amended response and answer filed 16 April 2020 the applicant defended the counterclaim in its entirety. The Contest [13] The contest between the parties engaged four days of hearing time, although in my opinion it should have been listed for at least five days possibly even six. Given that only four days were allocated, it necessitated early starts and late finishes together with truncation of time for closing address to fit it all in plus the need for further written submissions to be filed. Following the conclusion of the hearing and the filing of those further submissions, the respective position of the parties had slightly changed. [14] The applicant pressed its claim in the following terms:11 (a) payment of the practical completion stage payment of $80,414.50; (b) payment of the variations to the contract in the amount of $29,555.67 such including Variation 3B; (c) payment of interest on these two amounts at 18% per annum (being the contract rate) from 17 September 2019; (d) payment of damages for breach of contract for legal costs in the sum of $5,869.00 plus interest in the amount of $505.80; and 6 Amended counterclaim – para 3(a). The respondents did not express the total in their pleaded counterclaim. This is the total of the figures shown in the Table at para 4 of the amended counterclaim. 7 Ibid – para 3(b) and 5. 8 Ibid – para 3(c). 9 Ibid – para 3(d). 10 Ibid – Prayer for Relief Item 2. 11 Ex. 25 – See the draft order contained therein. The conceded parts of the counterclaim are as described in para 127 therein. Whilst originally the applicant’s claim was presented only in damages for breach of contract, as well as in debt for an amount owing, as I understood the closing submissions made by the applicant’s Counsel, the claim for the balance said to be owing under the contract was also pressed reliant on the doctrine of substantial performance, albeit not pleaded as part of its Application by which it commenced this proceeding. -- 7 of 140 -- 8 (e) it abandoned its claim for $876.00 for pool maintenance. [15] As to the respondents’ counterclaim, the applicant conceded $8,803.20 plus interest of $425.66, as being payable by it to the respondents for certain items of the alleged defective or incomplete work but submitted that the respondents’ claim for loss of rent be dismissed. [16] The applicant also sought an order that costs be reserved. [17] The respondents submitted that the applicant should pay them:12 (a) premised on that which I note in the next paragraph, damages in the amount of $50,275.04 representing the costs to rectify the incomplete and defective works; (b) damages for loss of rental income in the amount of $15,400; (c) interest on these damages pursuant to s 77 of the Queensland Building and Construction Commission Act 1991 (Qld); (d) costs of the proceeding. [18] The respondents’ claim for damages relating to incomplete and defective works is pressed as a nett amount after accounting for the balance said to be owing under the contract of $104,015.13, being the adjusted practical completion stage payment of $80,414.50 plus agreed variations of $23,600.93,13 deducting this from the total of that which they say is their claim for costs of rectification of $154,290.47 such being $6,014.42 less than that originally claimed.14 [19] As I noted it earlier, the respondents’ claim was premised on a number of alternative causes of action. At conclusion of the hearing, they maintained their claims pressed as not just breach of contract, but breach of the express warranty contained in clause 36 of the general conditions of contract, which is coextensive with the statutory warranties, as well as in negligence. But by the time the respondents filed their further submissions on 30 August 2021 in response to directions I gave for the provision of submissions on certain points of law, the respondents abandoned their claim against the applicant in negligence acknowledging that, at law, the applicant did not owe them a duty of care.15 [20] Also, notwithstanding that the respondents included a claim for inconvenience and loss of enjoyment in their counterclaim, it was not raised during their Counsel’s oral closing submissions nor in the written closing submissions that followed. Thus, I infer 12 Respondents’ written closing submissions (for convenience I will hereinafter refer to these as RWCS) – para’s 3 to 6 and 230. At the close of the evidence, the respondents’ Counsel informed me that he had experienced some technological difficulties such that his written outline of his oral closing submissions was not available. Accordingly, the hearing continued with him giving oral closing submissions but with directions given for the filing of his written closing material the day immediately following the close of the hearing. Ultimately these were received on the second business day following. 13 It may be immediately observed that there is a difference is what is said to be the total of the approved variations. The difference is $1,716 being Variation 6 for the extra pool fencing, a variation that was disputed on the pleadings. 14 Ibid – para’s 224 and 225. Unfortunately, the respondents did not include a Table in their written closing submissions from which concessions made or claims abandoned could be readily identified. To the extent such occurred I will note this in my reasons on each individual item of the counterclaim. 15 Respondents’ further submissions – para’s 39 to 42. -- 8 of 140 -- 9 that it was abandoned, and I need not have had further regard to it. As such I have not addressed it further in these reasons save only under the heading ‘Conclusions’. [21] All that being said, the resulting contest between the parties gives rise to a substantial number of separate issues. Whilst the respective Counsel for each party presented his written closing submissions in a particular order, my reasons for the decisions I ultimately made in this proceeding are presented in a manner different to their presentations. This is not to say that I disagreed with their approach. Rather, as I saw the issues, I considered it more appropriate to deal with them in the order of the headings as they appear below. [22] However, before doing so, I will touch briefly on the topic of this Tribunal’s jurisdiction and will then make some comment on the witnesses as they were presented to me. This Tribunal’s Jurisdiction [23] There is no challenge raised in this proceeding to this Tribunal’s jurisdiction to determine the matters as they arise from the ‘Application for a Domestic Building Dispute’ filed by the applicant on 19 September 2019, the ‘Amended Response and/or Counter-application’ filed by the respondents on 25 March 2020, and the ‘Amended Response and Answer to Respondents’ Amended Response and Counter-application’ filed by the applicant on 16 April 2020. Notwithstanding that, I make these few brief observations to note the jurisdictional basis upon which I proceed. [24] The work the subject of this proceeding falls within the definition of ‘domestic building work’ under Schedule 1B s.4 of the Queensland Building and Construction Commission Act 1991 (Qld), and in turn is ‘reviewable domestic work’ as that term is defined in Schedule 2 of that Act. The proceeding concerns a claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable domestic work, and accordingly it is a ‘domestic building dispute’, which in turn is a ‘building dispute’, as those terms are defined in Schedule 2 of that Act. This Tribunal is given jurisdiction to hear and decide a domestic building dispute under s.77 of that Act. The Witnesses [25] A total of twelve witnesses gave evidence during the hearing, nine for the applicant and three for the respondents. In addition, one statement of a witness for the applicant was tendered by consent, and one statement of a witness for the respondent, with those persons not being required for cross-examination. [26] For completeness I should also note the fact that there were five statements filed by the applicant of other persons, apparently with the intention of having them give evidence in the hearing. These were of Mr James Edward Paul, Mr Peter John Brett, Mr Michael James Daley, Mr Mark Gunn, and Mr Steven Brown. However, none of these persons were presented as witnesses nor did the applicant seek to tender any one of these statements.16 Accordingly, notwithstanding they appear on the Tribunal’s file as material filed by the applicant, I did not have any regard to them. 16 In his closing address, the applicant’s Counsel confirmed that his client did not seek to rely on these statements. T.2-76 - Lines 4 to 22. -- 9 of 140 -- 10 [27] As to the quality and content of the evidence overall, I found much of it to be lacking probative value. At various times statements were made that simply could not be substantiated. Thus, I was left hearing, and then having to consider, evidence which was mere bare assertion. Moreover, in some instances there was a complete absence of any evidence to support a claim. [28] By way of only two examples, there was the absence of satisfactory evidence from the applicant to support its claim for $5,869 in damages for that which it pleads is the legal costs it incurred arising from the respondents’ alleged wrongful termination of the contract. All that was presented is a statement by Mr Timothy Kelly as what those costs are said to be, annexing copies of WGC Lawyers tax invoices said to be for those services.17 There was no witness presented to prove the truth of the content of those invoices. Similarly, from the respondents, there was the absence of satisfactory evidence to support their claim for loss of rent. Whilst they presented evidence of what is said to have been the range of rent that could be obtained, and a lease that they later entered into at the upper end of that range, there was no evidence at all as to the vacancy rates in the region at the relevant time nor evidence of available tenants to whom they were not able to rent the property to at the relevant time. I raised this with the respondents’ Counsel during oral closing submissions, but notwithstanding the sparsity of evidence to support it the respondents maintained their claim.18 [29] More critically, notwithstanding it is common in disputes such as these that the outcome will usually turn to a large degree on expert evidence, in my opinion the expert evidence left much to be desired. Neither party’s expert impressed me as having thoroughly considered the issues and applied their mind to addressing them. This is despite there being an expert’s conclave and a joint report. [30] The relevant success or failure of the parties reflects the inadequacy of the evidence. The Applicant’s Witnesses Timothy Kelly [31] Mr Timothy Kelly’s evidence chief was his statement dated 30 April 2020.19 It is a large document, the text of which traverses 269 paragraphs over 33 pages, plus an additional 326 pages of annexed material. As stated therein, he was the applicant’s Director in the period 17 June 2014 until 26 November 2019. At the time of producing the statement he was employed by the applicant as a Site Supervisor. [32] Objection was taken early to part of Mr Kelly’s statement wherein he purported to give evidence as to conversations between Mr Philip Kelly and Mr Gilboy to which he was not a party. This was allowed and paragraph 127 was struck out. [33] The remainder of the statement was voluminous in its detail but not in all cases helpful. I experienced many difficulties with it, for example: (a) At paragraph 39 he refers to alleged meetings between Mrs Kaminaras and Barry at Beaumont Tiles, asserting that at those meetings she allegedly changed tile selections and layouts without the applicant’s knowledge. However, Mr 17 Ex. 1 – para 110(b). Annexure TMK 28. 18 RWCS – para 230(c). 19 Ex. 1. -- 10 of 140 -- 11 Kelly was not party to those conversations and the applicant did not present Barry of Beaumont Tiles as a witness to give evidence about these alleged conversations or changes; (b) At paragraph 67 he asserts that the works reached practical completion on 29 April 2019, an alleged fact upon which the applicant’s claim in this proceeding is apparently premised. Notwithstanding this he later refers at paragraph 69 to a purported ‘Notice of Practical Completion’ signed and dated for the applicant at 10 May 2019,20 and a defects document also dated 10 May 2019 wherein it is stated that certain works would not be completed until 16 May 2019.21 (c) At paragraph 69 he then asserts that “When we sent out the practical completion noticed (sic) 10 May 2019 we advised that occupancy and handover would be ready on 17 May 2019 …”, however no such statement appears in any of the documentation to which he refers and exhibits in paragraph 67, and it would seem that such is to be inferred from the statement I have just referred to that certain works would not be completed until 16 May 2019. (d) At paragraph 100, he asserts that whilst the applicant is said to have been ready willing and able to undertake necessary rectification works, it was “unable to do so due to the unreasonable attitude of the Respondents”, but without any explanation as to what that attitude was that allegedly prevented the applicant from carrying out such works. (e) In the same manner as he refers to alleged meetings between Mrs Kaminaras and a Beaumont Tiles representative but at which he was not present, at paragraph 174 he refers to alleged meetings between Mrs Kaminaras and representatives of the cabinetmaker at which she allegedly made changes, but at which he was not present. [34] These bare assertions, which are pure hearsay, detract from the value of his statement overall. [35] I also had the opportunity of seeing and hearing directly from him during that which was, in comparison to some of the other witnesses, relatively extensive cross- examination over approximately three and a half hours. In doing so I observed that Mr Kelly appeared to have poor recollection of many details, was confused at various times as to when meetings occurred, and that he was at times vague in his answering of questions that may or may not have been as a consequence of that poor recollection, but it could also have been intentionally evasive. Overall, I was left with the impression that Mr Kelly could not be considered a reliable witness and his evidence lacked probative value. Philip Kelly [36] In Mr Philip Kelly’s written statement, being his evidence-in-chief,22 he is described as being the applicant’s sole director, Mr Timothy Kelly’s father, and that he works closely with his son attending on-site meetings to discuss any ongoing building 20 Ex.1 – pg 188. 21 Ex.1 – pg 198. 22 Ex. 2. -- 11 of 140 -- 12 matters and any concerns his sone may have. He also says he had read and agreed with his son’s statement in this proceeding. [37] The cross-examination of Mr Philip Kelly was relatively concise. It once again afforded me the opportunity of observing the witness and I formed the view that, unlike Mr Timothy Kelly, Mr Philip Kelly had a good recollection of the facts and circumstances to the extent to which he was involved. That which became clear in the cross-examination is that it was Mr Philip Kelly who was responsible for the contract administration, namely issuing of variations, progress payment claims, notices, and the like, but in doing so he relied in many instances on Mr Timothy Kelly or others, such as suppliers or subcontractors, to provide him with information upon which he then raised variations etc. That being so, the weight to be afforded much of his evidence was reduced in that it was, in effect, second hand. [38] One point I did note with his evidence is that he asserted the applicant considered the work had reached practical completion as at 3 May 2019.23 This is not the date Mr Timothy Kelly states, nor is the applicant’s pleaded case, on which it is said that practical completion occurred, but rather this is the date on which Mr Timothy Kelly states a walk-through of the house occurred with the respondents.24 That singular fact left me with doubt as to the correctness of Mr Philip Kelly’s statement that he has read and agrees with his son’s statement. [39] Overall Mr Philip Kelly’s evidence was of no substantive assistance to me. Thea Jane Kelly [40] A written statement by Ms Kelly was tendered by consent.25 Therein she is described as a Chartered Accountant and the wife of Mrs Timothy Kelly. Her evidence was that she attended the walk-through on 3 May 2019 describing what she observed at that time. [41] Her evidence was of no assistance to me. Lachlan Ainsley [42] Mr Ainsley’s statement as his evidence in chief was short, it being one page only of text, accompanied with 24 pages of annexed documents.26 Therein he is said to be a director and owner of Northern Batten Services Pty Ltd, being the company contracted to do the roofing and guttering work on the house. [43] Whilst his primary statement was short, it was in the annexed documents that he effectively gave his statement, it said to be a ‘report’ in response to a report of Mr George Thirkell dated May 2019. Therein he also refers to a report of Mr Gilboy. Mr Ainsley’s statement also included comments as to his opinion on the costs of rectification of certain items of work. [44] To this extent, Mr Ainsley’s statement was effectively expert evidence and accordingly it should have been addressed within the experts’ conclave that occurred. 23 Ibid – para 35. 24 Ex.1 – para 68. 25 Ex. 3. 26 Ex. 4. -- 12 of 140 -- 13 However, whilst a general objection was raised by the respondents’ Counsel on the afternoon of Day 1 of the hearing to many of the applicant’s witness statement containing ‘opinions’ and purporting to give ‘expert evidence’,27 ultimately no specific objection was taken to Mr Ainsley’s statement and accordingly it was admitted with that information being contained therein. [45] For completeness I note Mr Ainsley also gave evidence about his company investigating a roof leak on 17 January 2019. [46] Mr Ainsley was cross-examined. Thus, I once again had the opportunity to directly observe a witness. That which became clear during the cross-examination was that, to the extent he gave evidence about investigation of a roof leak such investigation was not done by him personally but rather by other persons in his company’s employ, and to the extent he has referred to it in his ‘report’ it is based solely on computer records his company holds.28 [47] As I observed and listened to Mr Ainsley, and then at the conclusion of re-examination by the applicant’s Counsel I asked Mr Ainsley some questions myself as to the content of his ‘report’, I was left with the impression that he was unclear on much of what he stated therein. His report was in part confusing as to which reports of Mr Gilboy and/or Mr Thirkell he had referred to.29 [48] Overall, Mr Ainsley’s evidence was of some assistance to me but very little. Gregory Gilboy [49] Mr Gilboy is the Director of Gilboy Hydraulic Solutions, which I understand to be a hydraulic services design firm. Notwithstanding that occupation, he was presented as a lay witness, although his statement and accompanying report was more akin to being evidence of an expert witness.30 His statement was the subject of objection in that regard.31 [50] Ultimately part of the objections were conceded by the applicant’s Counsel with other parts abandoned.32 The remainder of that objected to was allowed to the extent it was evidence of that which Mr Gilboy observed, and provided advice on to the applicant, whilst the contract remained on foot and thus before the commencement of this proceeding.33 [51] In essence, as I understood it, such was said to be evidence of the steps taken by the applicant to address the respondents’ complaints regarding the roof plumbing and drainage issues. He was also asked to, and did, provide some comments on a report 27 T.1-99 Line 15 to T.1-102 Line 5. 28 T. 2-23 Line 7 to T.2-24 Line 43. 29 T. 2-25 Line 44 to T.2.27 Line 22. 30 Ex. 7. 31 Objection was taken to para’s 11 to 18 and Annexures D & E. See T.2-3 Line 12; T.2-6 Line 13 – 16 & 42; T.2-7 Line 10 and 38. 32 Annexures C, D & E, together with para’s 22 to 24 were removed. T.2-9 Line 27 to 33. Para 14 was abandoned – T.2-10 Line 3. 33 See T.2-10 to 13. Paragraphs 11, 12, 13, 15, 15, 17 and 18 remained as part of the Gilboy evidence. -- 13 of 140 -- 14 and proposed scope of remedial works prepared by Mr George Thirkell dated August 2019 in respect of that complaint.34 [52] Overall, Mr Gilboy impressed me as a witness. He was forthright in his answers, conceding points where appropriate to have done so, but also pressing his views on issues with conviction when questioned on them. His explanations were helpful. Many of the issues I had to decide in this proceeding turned on Mr Gilboy’s evidence, even though at times adverse to the applicant. Glen Chambers [53] Mr Chambers is a Building Certifier. He was the Certifier engaged by the applicant to provide it with building approval for the works under the contract, and to issue the Final Certificate for the works. Similar to Mr Gilboy, he was also engaged by the applicant to provide some advice / comment on the respondents’ complaint about the roof drainage works, more particularly in terms of the proposed solution presented by Mr Gilboy. In doing so he also addressed the report of Mr George Thirkell dated August 2019. To that extent he was presented as a lay witness with a statement tendered.35 [54] Again, like Mr Gilboy, such was more akin to expert opinion evidence. Again, the respondents Counsel raised objection to part of his statement, namely paragraph 10, subparagraphs (a) to (e). Notwithstanding the subparagraphs in paragraph 10 extended to also include (f) and (g), the respondents’ Counsel did not raise an objection to them but rather stated, given concessions made by the applicant on Day 1 of the hearing concerning the boatshed wall, such were no longer relevant.36 [55] The applicant’s Counsel argued against this objection on the same basis as he did against the objection to parts of Mr Gilboy’s statement, that is submitting that it is evidence of advice obtained by the applicant whilst the contract remained on foot in efforts to address the respondent’s complaints regarding roof plumbing and drainage issues. Ultimately the objection was not allowed for this reason.37 [56] His evidence was relatively short. Save only to a singular reference to him having issued a Form 21 – Final Inspection Certificate, his evidence did not assist me. Brad Stewart [57] Mr Stewart is the Director and owner of KC By Design Pty Ltd, the company engaged by the applicant to do the cabinetry work in the house. His statement primarily addressed the dispute regarding the sink installation in the kitchen and butler’s pantry.38 [58] Overall, his evidence was not helpful to me, other than the extent to which it highlighted that which appeared to me as being an underlying cause of much of the 34 It was not entirely clear from Mr Gilboy’s statement as to that which was the Thirkell Report of August 2019 to which he was referring. During cross-examination of him it was clarified that this was the Thirkell Scope of Works and Drawings that was tendered by consent and became Ex. 8 being that attached to a Thirkell letter dated 20 August 2019 which appears as Annexure TMK-24 to Ex.1. See T.2-40 Line T.2-39 Line 19; T.2-41 Lines 37 to 42. 35 Ex. 10. 36 T. 2-14. Lines 6 & 7. 37 T. 2-14 Line 32 to T.2-16 Line 42. 38 Ex. 11. -- 14 of 140 -- 15 dispute between the parties. This was what became apparent as being an absence of clear and precise communications between builder and owner, the applicant leaving much of those communications to its subcontractors / suppliers. A glaring example of this is the communications regarding the sinks which Mr Stewart explains therein, most of them being second hand to him, or simply between himself and Mrs Kaminaras, and critically without the applicant being part of those communications. [59] There was also the critical aspect of his evidence that arose during cross examination. It was only in cross-examination that Mr Stewart gave evidence that the ‘Reece Presentation’, being the document which identified the sinks in question, was not the Reece Presentation as it appears in the contract document annexed to Mr Timothy Kelly’s statement.39 Rather, he asserted that it was a different document said to clearly differentiate the sinks as being drop-in to the kitchen and undermount to the butler’s pantry, being the reverse of that which the respondent says was required. His evidence was, to that extent, inconsistent with Mr Timothy Kelly’s and Mr Philip Kelly’s to the extent Mr Philip Kelly stated he had read his son’s statement and agreed with its content. [60] Despite this being said in cross-examination, there was no re-examination on the point by the applicant’s Counsel to clarify this inconsistency nor to identify the other document such that it became part of the evidence. Ivan Gomizelji [61] Mr Gomizelji is a stonemason engaged by KC By Design and is said to have been the one who made the benchtops and was involved in conversations with the respondents concerning the placement of the kitchen and butler’s pantry sinks. His statement was in essence directed to that issue.40 [62] Like Mr Stewart he referred to a Reece Presentation document but did not annex any such document to his statement. However, unlike Mr Stewart, Mr Gomizelji asserted that the Reece Presentation in question showed that both sinks to the kitchen and butler’s pantry were to be drop-in sinks.41 In that regard, Mr Gomizelji’s evidence was inconsistent with both Mr Timothy Kelly’s and Mr Brad Stewart’s evidence. [63] Save only for the fact that his evidence once again showed the confusion that seemed to permeate the applicant’s manner of leaving its subcontractors and suppliers to deal directly with the respondents, and also with the inconsistency in the applicant’s evidence overall, Mr Gomizelji’s evidence was not helpful to me. Desmond Meredith [64] Mr Meredith is said to be a qualified electrician and the business manager at Richardson’s Electrical Service. His company was engaged by the applicant to do the electrical and solar installation in its construction of the house. His evidence was directed at the disputed issue of the solar panel installation.42 39 See TMK-6 to Ex. 1. 40 Ex. 12. 41 Ex. 12 – para’s 7 & 8. 42 Ex. 13. -- 15 of 140 -- 16 [65] Mr Meredith impressed me as a witness. He was direct and forthright in answering questions under cross-examination agreeing where appropriate to the need for additional work to be performed. Christopher Boyle [66] Mr Boyle was presented as the applicant’s expert witness. His written evidence was contained in two documents, one being his ‘report’,43 the second being his input to the Joint Experts’ Report which arose out of the Experts’ Conclave.44 The former was the subject of only one objection which I allowed, such being to the extent his report referred to part of Mr Gilboy’s report which was objected to and struck out.45 [67] He was cross-examined at length, giving his evidence via video link from Brisbane. During that cross-examination the respondents were permitted to have their expert Mr Thirkell in the hearing room assisting their Counsel in his cross-examination on technical issues. [68] Whilst overall Mr Boyle’s presentation as a witness was generally acceptable, I was unimpressed by the fact that he was engaged only to undertake a desktop study, and also that he did not give any consideration to the quantum of rectification/completion of the allegedly defective/incomplete work where he formed the opinion that the item in question was not defective or incomplete. On my reading of his report, it is apparent that this was as a direct result of his brief, such being restricted to providing an opinion on the reasonable costs of rectification/completion only if he was of the view that such work was defective.46 [69] This dramatically reduced the value of Mr Boyle’s evidence and left many questions unanswered. It was adverse to the applicant’s case. As the respondents’ Counsel appropriately and properly put it in his written closing submissions: Clearly, the opinions expressed in Mr Boyles (sic ) report are greatly diminished by the fact that he did not attend site, and a large number of those opinions expressed are not his own rather those of Mr Gilboy and Mr Bussell. Generally Mr Boyle’s opinions are of little assistance to the Tribunal in determining whether the works the subject of the dispute were incomplete or defective and to determine whether the costs incurred (or to be incurred) by the Owners are reasonable in the circumstances.47 The Respondents’ Witnesses Tammy Kaminaras [70] Mrs Kaminaras gave two written statements.48 The first of those was a direct response to various paragraphs of the statements of Mr Timothy Kelly, Mr Philip Kelly, and 43 Ex. 14. 44 Ex. 15. 45 Ex. 13 – para 70 second sentence. 46 Ex. 14 – para 6. 47 RWCS – para 105. The reference to ‘Mr Bussell’ is, as I read it, a reference to the QBCC Building Inspector who produced the QBCC Inspection Report which appeared in the material before me. I should also note that I read the reference to opinions of ‘Mr Gilboy and Mr Bussell’ as being ‘Mr Gilboy or Mr Bussell’ given that they gave separate opinions, not joint opinions. 48 Ex. 19 and Ex. 20. -- 16 of 140 -- 17 Mr Brad Stewart.49 The second statement sought to make some relatively minor corrections to the content of her first statement. [71] She was only briefly cross-examined at end of Day 3 of the hearing.50 Therein a proposition was put to her concerning the extent of the wall tiling in the bathrooms being a change to the contract. She did not agree with that proposition. Due to the applicant’s Counsel saying he needed to organise his material somewhat to allow cross-examination to continue, given that the hearing day was drawing to a close the cross-examination was then left to continue the next morning. However, and somewhat surprisingly, on resumption the applicant’s Counsel said that he had no further questions of Mrs Kaminaras.51 [72] Notwithstanding the shortness of the cross-examination, it was of value. Not only did it establish with some certainty Mrs Kaminaras’s understanding of the extent of wall tiling in the bathrooms, an issue in this proceeding relative to a variation claim, it afforded me the opportunity to view Mrs Kaminaras’s conduct as a witness. In doing so, what little I saw showed me that Mrs Kaminaras was quick to answer and confident in her recollection of the event in question. That being said, her written statements is in effect the entirety of her evidence, the content of which was not in any way substantially challenged so as to raise questions about it. As a general position, I had no reason to doubt the accuracy of that which she states therein. Theo Kaminaras [73] Mr Theo Kaminaras gave three written statements.52 In the same manner as Mrs Kaminaras’s first statement was presented, his first statement was responsive to the statements of Mr Timothy Kelly, Mr Philip Kelly, Mr Gomizelji, Mr Stewart, and Mr Ainsley. He also gave some evidence about the loss of rent claim and the roof gutters and underground drainage defects. His second statement was short, simply confirming that he and his wife had paid the cost of works carried out to date as referred to in Appendix Q of the Thirkell Report of June 2020. His third statement, tendered at the hearing, dealt further with the loss of rent claim. [74] Mr Kaminaras also presented a video he had taken of a rain event whilst the house was under construction. This was viewed during the hearing.53 As I understood it, this was relevant to the roof drainage issues. Just prior to and following the viewing of that video there was a short question and answer process between Mr Kaminaras and the respondents’ Counsel as well as with me. This afforded me a very small window to observe Mr Kaminaras’s conduct. Similar to that which I noted above regarding his wife, what little I saw showed me that Mr Kaminaras was confident in his recollection of the events in question. 49 Mrs Kaminaras also responded to a statement given by Mr Michael Daley but the applicant did not present Mr Daley as a witness or otherwise seek to tender his statement. 50 T.3-90 Line 38 to T.3-92 Line 27. 51 T.4-2 Line 47. 52 Ex.21, Ex. 22, and Ex. 23. 53 Ex. 24. -- 17 of 140 -- 18 [75] There was no cross-examination of Mr Kaminaras.54 Accordingly, his entire evidence is his written statements, the video, and that short oral evidence he gave during the Q&A engagement. Again, I had no reason to doubt the accuracy of that evidence. George Thirkell [76] Mr Thirkell was presented as the respondents’ expert witness. He gave an extensive report which was annexed to his statement.55 That is his report dated 19 June 2020. He was not taken to the Joint Expert’s Report56 by the respondents’ Counsel to confirm his input to it. Notwithstanding that, I proceeded on the basis that given it had been affirmed by Mr Boyle it was open for me to accept it as being correctly containing Mr Thirkell’s input. The applicant’s Counsel did not suggest otherwise. [77] In all respects, Mr Thirkell’s evidence was critical to the outcome of this proceeding. As I understood the circumstances by which it came about, it was Mr Thirkell’s advice and opinions that the respondents relied on to take the steps they had taken that are reflected in their position in the dispute with the applicant. The criticality of it was particularly so in terms of the extent of success ultimately gained by the respondents. Accordingly, for the respondents’ benefit I have gone to some length to explain my views on the inadequacy of that evidence so that they may hopefully be able to understand why the outcome, in terms of a monetary measure, was much less that what I assume they thought it would be. [78] There was at times during the hearing confusion in terms of the reports which Mr Thirkell had produced. He also produced earlier dated reports or letters/drawings, copies of which appear in the statement of Mr Timothy Kelly. These are a report dated 15 May 2019,57 a letter and drawings dated 20 August 2019,58 and a draft report dated 18 February 2020.59 It was these earlier reports or drawings that appear to have been the Thirkell documentation to which Mr Gilboy and Mr Chambers had reference as I have noted it above. [79] However, notwithstanding the existence of those earlier reports appearing in the applicant’s evidence, and Mr Thirkell having referred to documentation in his expert’s report that appeared from the description therein to be the same documents,60 at no time was Mr Thirkell called upon by the respondents’ Counsel to confirm the existence or accuracy of those earlier documents as part of his expert evidence. [80] Notwithstanding the limited manner of reference to those earlier documents in Mr Thirkell’s evidence-in-chief, the applicant’s Counsel raised those earlier reports with him during cross examination,61 and questioned him on the extent to which he was engaged by or for the respondents. 54 T.4-12 Line 35 and T.4-14 Line 5. 55 Ex. 16. 56 Ex. 15. 57 Ex. 1 – Annexure TMK-21. 58 Ex. 1 – Annexure TMK-24 & 25. The drawings were also received as Ex. 8, being the Scope of Remedial Works for roof drainage and plumbing. 59 Ex.1 – Annexure TMK-29. 60 Ex.16 – Section 3. 61 T.3-42 – Line 2 re 15 May 2019 Report; T.3-43 – Lines 25 to 34. -- 18 of 140 -- 19 [81] It commenced with the inspection / walk through that occurred on 3 May 2019 with Mr Thirkell asserting that he was engaged at that time as an ‘expert witness’.62 It then continued with questioning him on the content of his February 2020 Report and his June 2020 report,63 each of which contain references to charges from ‘Thirkell Consulting Engineers and Building Design’, or similar names, for what is described as the provision of services including ‘project management’.64 [82] From this line of questioning, and the manner in which Mr Thirkell referred to those earlier reports and his engagement at the time, it left me with some uncertainty as to the extent to which the respondents were relying on Mr Thirkell as an expert in this proceeding, vis-à-vis that which appeared to me as being more a design and project management consultant to them. This is particularly so given the description of his engagements in August 2019 and then in November 2019, the former being prior to the termination of the contract,65 and latter being after the termination and after the commencement of this proceeding and the respondents having filed their original defence and counterclaim,66 which he described in this way: 20 th August 2019: I issued a scope of works to rectify the stormwater system and a cost estimate to render and paint the external boat garage wall including dis-assembly and re-assembly of the fence. November 2019: I received instructions from the Respondent to assist to obtain quotes from trades to rectify defective work and complete works that were deemed incomplete.67 [83] The cross-examination of Mr Thirkell by the applicant’s Counsel was extensive. As I followed it, the applicant’s Counsel was endeavouring to establish the correct nature of Mr Thirkell’s role in his dealings with the respondents.68 As I observed him during cross-examination, he appeared to either have not listened to a question being asked of him and so giving an answer that did not meet the question, or he misunderstood the question leading to a non-responsive answer, or more concerning he was simply being evasive in his answering of it. [84] I was very unimpressed with Mr Thirkell as an expert witness. Listening to the question and answer process engaged in, I was left with the impression that Mr Thirkell entirely misunderstood his role as an expert witness in this proceeding. The following are some examples of exchanges between the applicant’s Counsel and Mr Thirkell during cross-examination. [85] The first is in reference to Mr Thirkell’s initial engagement.69 Mr Eylander Mr Thirkell, you attended a practical completion inspection on the 3rd of May 2019 at the home? Mr Thirkell I attended site. It wasn’t put to me as a practical completion inspection. No. 62 T.3-42. Lines to 17. 63 It will be recalled that the latter report is the only ‘Expert’s Report’ from Mr Thirkell in this proceeding. 64 T.3-44 Line 43 to T.3-45 Line 15. 65 On the respondents’ case such occurred on 9 September 2021. 66 This occurred on 21 October 2019. 67 Ex.16 – para’s 3.2 and 3.3. 68 See T.3-42 to T.3-68. 69 T.3-42. Lines 1 to 17. -- 19 of 140 -- 20 Mr Eylander Did you attend site on the 3 rd of May 2019? Mr Thirkell I attended site. Yes. Mr Eylander And how long before that date were you engaged by the homeowners? Mr Thirkell There is no time as I was engaged by Preston at that time. Mr Eylander So before the 3 rd of May 2019 you were engaged by Preston Law? Mr Thirkell That’s right. Mr Eylander And what were you engaged to do? Mr Thirkell Expert witness. Mr Eylander An expert? Mr Thirkell I’m an expert witness. Yes. Mr Eylander You were engaged as an expert witness by Preston Law before the 3 rd of May 2019? Mr Thirkell Yes. [86] On the basis of this question and answer engagement it was readily apparent that Mr Thirkell saw himself as an expert witness for the respondents. But it became abundantly clear to me that he entirely misunderstood that role, and that it may more properly be said that his evidence was not what this Tribunal should have been presented with as independent expert opinion evidence. His conduct subsequent to his asserted engagement as an ‘expert witness’ goes beyond merely being a witness because it involved him pro-actively in the respondents’ undertaking of the remedial work upon which they premise their defence and counterclaim in this proceeding. [87] Mr Thirkell’s first ‘report’ is the one dated 15 May 2019. A copy of it appears in the statement of Mr Timothy Kelly, but without the Appendices ‘A’ to ‘I’ referenced in the report.70 Therein the following statement appears under the heading ‘Introduction and Instruction’. Thirkell Consulting Engineers & Building Design71 are engaged by Theo and Tammy Kaminaras to inspect the property at 8 Saxon Street, Clifton Beach. QLD 4879 (Lot 44 RP 748233) and provide a report addressing the following: (a) Whether practical completion has been reached; and (b) Whether there are defects, omissions and incomplete works; and (c) Provide reasons to how the defects, omissions and incomplete works affect practical completion. [88] Whilst Mr Thirkell stated that before 3 May 2019, when he first attended at an inspection of the house, he was engaged by Preston Law, the respondents’ solicitors, 70 Ex. 1 – Annexure TMK-21 pg 231. 71 Within that report there is a statement on the Contents page that the name ‘Thirkell Consulting Engineers & Building Design’ is “A trading name of Redgate Building Solutions PL.” -- 20 of 140 -- 21 as an ‘expert witness’, there is no reference to Preston Law or that engagement in this first report. To the contrary, it expressly states he was engaged by the respondents. [89] The second is in reference to an inspection with a representative of the Queensland Building and Construction Commission.72 Mr Eylander Now there was a Queensland Building Construction Commission inspection on 5 July 2019 and you attended that inspection? Mr Thirkell I’m just going to recall – I did attend site, as I said, but in attendance was a QBCC representative. So I did that once, so the questioning which suggests I’ve been there now twice, which wasn’t true, so I’m – I’m just trying to recall which one of those attendances was the one in question. So I did attend site with Phil Kelly and Co and the QBCC representative. [90] Mr Thirkell’s oral evidence in this regard was not entirely clear but, as I understood it, he disputed the suggestion that he had attended at the house twice for inspections, asserting that it was only once, such being on the occasion of 3 May 2019. If this is a correct understanding on my behalf, it is in contrast with the documentary evidence that is before me. [91] The following statement appears in Mr Thirkell’s report of 15 May 2019.73 I, George Thirkell the author of this report attended site on the 3rd May 2019. … My understanding of the visit was to be briefed by the owner of their concerns with the construction. It was conveyed to me by the owner that the builder had provided permission and that a Queensland Building and Construction Commission (QBCC) representative would be there. Upon my arrival we were advised that the QBCC representative could not make the meeting and that this site visit was a final inspection for defects or omissions before (sic) so that the builder could issue a practical completion notice. I refute the claim that this was a final inspection as adequate time was not allocated by me for this visit. [92] There is also the QBCC’s Inspection Report, a copy of which appears in Mr Timothy Kelly’s statement in which it is records the inspection has having occurred on 5 July 2019 with Mr Thirkell being present as an ‘RPEQ engaged by the Owners.’74 [93] Once again there is no suggestion in that material that Mr Thirkell has been engaged by Preston Law as an expert witness. However, I pause here to note that the second document produced by Mr Thirkell, being his letter of 20 August 2019 and accompanying drawings for rectification of the storm water system, is addressed to Preston Law.75 [94] There is also Mr Thirkell’s draft report of 18 February 2020, and in particular the Appendix thereto which is entitled ‘Project Expenditure Account as of 17 February 72 T.3-42. Line 43 to T.3-43 Line 7. 73 Ex. 1 – pg’s 233 and 234. 74 Ex. 1 – Annexure TMK-23 at pg 245. 75 Ex. 1 – Annexure TMK-24 at pg 270. -- 21 of 140 -- 22 2020’. A copy of that report is in Mr Timothy Kelly’s statement, on this occasion including the appendices referred to within it.76 Therein there are two pages, one entitled ‘Works carried out to date’ and one entitled ‘Works to be carried out’ each which list a number of line items of work with monetary amounts ascribed to each.77 On the second of those there is a line item described as ‘Engineering Consultancy and Inspections’ to which the amount of $19,800 is included with the accompanying comment ‘accounted for and projected’. In terms of that material the following was the discussion between the applicant’s counsel and Mr Thirkell during cross- examination.78 Mr Eylander With respect to the works carried out to date, as set out in this annexure, were your services that you provided, was that by way of engagement with the home owners and by that I mean by way of an agreement or contract with the home owners to perform these services? Mr Thirkell Yeah. The owners instructed me to review quotes and invoices of contractors, sometimes provide advice to them on my thoughts about it and to record it as part of this report. Mr Eylander Now, you said that they instructed you to give advice and do various other things. Now, we’ve heard that the engineering consulting and inspections, with an allowance of $19,800 in the works to be carried out, your engagement to do all of this was it by agreement with the home owners? Why I’m asking this, I’ll just take a step back, you’ve previously said you were engaged by Preston Law to be an expert. So what I’m trying to get from you, was your project management, as described in this document, was it with the home owners or was it with Preston Law? Mr Thirkell The recording of these invoices is part of my brief from Preston Law to carry out this service. Mr Eylander So you had an agreement with Preston Law to perform this work? Mr Thirkell Yes. [95] This exchange occurred shortly after the applicant’s Counsel had questioned Mr Thirkell as to his knowledge of contracts and invoicing for the performance of the remedial work, wherein the following was said. Mr Eylander So these description of services and material here, there are separate contract between the various entitled and the home owners. Is that your evidence. Mr Thirkell Yeah. Because they’re of separate prices there or separate costings, they must be on different invoices. So those invoices are – because they’re in works carried out, they’ve been completed and that would be the final charge of that building task. 76 Ex. 1 – Annexure TMK-29 at pg 297. 77 The relevant Appendix appears at pg’s 324 and 325. 78 T. 3-47. Lines 22 to 38. -- 22 of 140 -- 23 Mr Eylander Well, how did you know that those amounts were forming part of or a running account. How did you know that? Mr Thirkell Because my task as an expert was to record all expenditure to rectify the premises. [96] That short exchange is somewhat alarming. Not only am I unable to understand and find any meaning in Mr Thirkell’s first answer other than to conclude that he was entirely unclear on what the invoices were for, his second answer clearly demonstrates to me that he did not have a proper understanding of his role as an expert. [97] Moreover, it will be observed that whilst Mr Thirkell stated his brief to do certain work was from Preston Law as an “expert witness”, he also stated that he was ‘instructed’ by the respondents to review quotes and invoices and provide advice to them and to record it all. In that regard it is relevant to note the following as it appears in Mr Thirkell’s February 2020 report as the ‘Executive Summary’.79 Thirkell Consulting Engineers & Building Design80 are engaged by Theo and Tammy Kaminaras to inspect the property at 8 Saxon Street, Clifton Beach. QLD 4879 (Lot 44 RP 748233). This report outlines my findings over many visits to the premises to inspect defects and meet with the owners. The photos show the defective work and the annotation describes the actions to rectify. Appendix A Project expenditure account outlines the works that have been carried out and the works to be carried out to date. We deem the building works to rectify to be considerable and state that the residence had not reached practical completion as stated in our first report dated 15 May 2019. [98] This description suggests to me that, not only is it simply in furtherance of the initial report of May 2019 but, it is a record of the performance to date of remedial works undertaken. [99] There is also the exchange between the applicant’s counsel and Mr Thirkell concerning Mr Thirkell’s report tendered in this proceeding as his ‘Expert’s Report’. It is dated 19 June 2020 and, on this occasion, unlike the earlier ‘reports’ it is entitled ‘Report to QCAT’ c/- Preston Law.81 Mr Thirkell was taken to Appendix Q therein. It is very similar in its content to the Appendix included in his February 2020 report I mentioned a few paragraphs back in these reasons. I infer it is the same document and merely updated by the time of the June 2020 report. He was asked about two line items therein which appears as part of the ‘Works carried out to date’ spreadsheet. These each contain the description of the works as being “Tender and project management tasks, engineering and drafting services”. The first carries the amount of $7,062 including GST with the reference date of 28 March 2020. The second carries the amount of $9,680 with the reference date of 23 December 2019. In turn each of these respectively is cross referenced to a sub-appendix Q1 and Q2. [100] Q1 is a Tax Invoice shown to have been issued by Thirkell Consulting Engineers and Building Design with the subject description “Kaminaras Residence – Expert Witness, 79 This appears at Ex. 1 pg 299. 80 Within that report there is a statement on the Contents page that the name ‘Thirkell Consulting Engineers & Building Design’ is “A trading name of Redgate Building Solutions PL.” 81 Ex. 16. -- 23 of 140 -- 24 Tender & Project management tasks, engineering & drafting services – progress invoice’ with multiple entries thereon but all shown as covering the period 13 December 2019 to 27 March 2020. Notably this covers the period in which Mr Thirkell produced his report of 18 February 2020. The description of the services on each occasion varies in terms of references to ‘Meeting’ or ‘Travel to site/meeting’ but on some occasions reference it as ‘Engineering Tasks’, or ‘Admin’, or ‘Project Management’ and also includes references to not only ‘George’ which I infer to be a reference to Mr Thirkell, but also to ‘Caio’ and ‘Jack’ whom I understand to be employees of Thirkell Consulting Engineers and Building Design.82 [101] Q2 is a Tax Invoice also issued by Thirkell Consulting Engineers and Building Design but on this occasion, it carries the subject description “Kaminaras Residence – Tender & project management tasks, engineering & drafting services – progress invoice.” again with multiple entries but covering the earlier period of 26 October 2019 to 12 December 2019. The descriptions of those works were also similar to the Q1 document describing it on various entries as being ‘Tender Management’, or ‘Engineering Tasks’, or ‘Design’, or ‘Admin’. [102] I also note there is another line item entry on the second page of Appendix Q being the list of ‘Works to be carried out’ described as being for “Thirkell Consulting Engineers & Building Design – Tender & Project management tasks, engineering & drafting services.” stated to be in the amount of $6,600 including GST. [103] The following is an extract from the exchange between the applicant’s Counsel and Mr Thirkell. 83 Mr Eylander Now, if you could describe the tender and project management task, engineering and drafting services you performed? What were they? Mr Thirkell Well, firstly, it would be attending site, being instructed of engineering tasks, ensuring the engineering of that task, drafting and so drawing those tasks on paper so that they can be provided to various contractors to provide them instructions to understand the scope of works they are to perform and to provide a cost to those tasks. Mr Eylander Now, the first word “tender”, was there a tender involved in all of this? Mr Thirkell Well, it’s – no. It was just providing the information to – as instructed by the owners to various contractors to – so that tender is costings. So, really, it was information I provided to various people to cost up tasks to rectify the premises. Mr Eylander So when you say costs that you provided, did you get other contractors – I should say, did you get licensed contractors to provide you with prices to do works? Mr Thirkell Well, the owner and I agreed on licensed contracts to carry out or, at least, to cost the work. 82 See the discussion between Mr Eylander and Mr Thirkell at T.3-52 Lines 21 to 25. See also the discussion between me and Mr Thirkell at T.3-63 Lines 16 to 24. 83 T.3-49 Line 31 to T.3-50 Line 30. -- 24 of 140 -- 25 Mr Eylander Well, how did you and the owner agree, and I probably should start off, there are two owners here. When you say “the owner and I agreed”, which owner are you referring to? Mr Thirkell Theo. Mr Eylander Theo. And how did you go about agreeing for contractors for the tender of this work? Mr Thirkell There would just be suggestions of names. So Theo would know a whole lot of people and Tammy actually knows a lot of people as well and I would know some people. So we would just discuss who – who should we talk to and see – see how they respond. So in carrying out this task, these tasks, I may have spoken to various people and Theo and Tammy may have spoken to various people and I guess, at the end of the day, some decision was made to who would attend the site to do the task and for how much and when. I mean, that wasn’t a – that was a decision made by, generally, the owner. Mr Eylander So you said that you would’ve spoken to various people? Mr Thirkell Yes. Mr Eylander And, by various people, you mean various licensed contractors? Mr Thirkell Yes. Mr Eylander Yes. To be engaged – well, to be invited to provide a price for doing works? Mr Thirkell To at least – to at least express an interest or not in the project. Mr Eylander And how did you deal with these expressions of interest and by that I mean did you present those expressions of interest to Theo? Mr Thirkell I would’ve advised Theo of who could do it, who couldn’t do it and, yeah, that’s – that’s right. I would convey that information to Theo. Mr Eylander And would you speak to these licensed contractors about the scope of works that needed to be done to attend to the items that you refer to in your report or did you just give them a scope of works? Mr Thirkell I provided for the most significant tasks, drawings. Because that’s what we do. We provide drawings. [104] Despite that which Mr Thirkell stated in this oral evidence as to the production of drawings upon which the work was said to be costed and contracted, the only such drawings in evidence were those attached to Mr Thirkell’s letter of 20 August 2019 to Preston Law dealing with the roof drainage issues and the associated stormwater drawings which were in Appendix P to his June 2020 report.84 It was thus entirely 84 A larger more legible copy of this appendix was tendered separately by consent. It became Ex. 8. -- 25 of 140 -- 26 unclear what other drawings, if any, Mr Thirkell was referring to in terms of dealing with contractors for other works said to be required. [105] The line of questioning then turned to the content of the Appendix Q, in particular the entries concerning the costs of ‘Thirkell Consulting Engineers & Building Design’ to which I referred earlier. The following is relevant to the conclusion I have come to and express later in these reasons as to the probative value of Mr Thirkell’s evidence.85 Mr Eylander Now, Mr Thirkell, appendix Q1, it’s from Thirkell Consulting Engineers and Building Design and it has underneath it “Red Gate Building Solutions Proprietary Limited”. Now, am I correct that the entity is Red Gate Building Solutions Proprietary Limited trading as Thirkell Consulting Engineers and Building Design? Mr Thirkell Yes. Mr Eylander And the subject of the tax invoice is “The residence, expert witness, tender and project management tasks, engineering and drafting services, progress invoice”. That’s correct? Mr Thirkell Yes. Mr Eylander Now the first four items under description is then followed by a line above total for expert witness services is $5850 plus GST. Does that mean that those above services in the description are for expert witness services? Mr Thirkell Yeah. I was separating – that’s right. I was separating the costs for clarity of the invoice at the time. Mr Eylander And I should point out, the invoice is for the respondent. Was the invoice sent to Preston Law or to the respondents? Mr Thirkell I don’t have the information with me to ascertain that but generally I would email this invoice to Preston Law. I have Theo’s – and possibly at this time I’ve actually copied this one to Theo as well. Mr Eylander And the payment of monies pursuant to this invoice, and I’ll get to the monies in a minute, but the payment of monies for the invoice, did that come from Preston Law or did it come from the homeowners? Mr Thirkell I would actually have to check up on that because with regards to accounts at our office, I’m not certain. I would’ve believed Preston Law would’ve paid a lot of accounts for us and I would state that here but I believe some accounts later may have been paid by Theo later but I can’t – I can’t actually say at what point. Mr Eylander Well, I’ll revisit that in a moment, Mr Thirkell. So the next entry is a number, 19039 PM, Preston Law and the final part of that entry is tender management, contract admin, setting a period of time, 13 December 2019 to 27 March 2020 with 85 T.3-51 Line 25 to T.3-52 Line 39. -- 26 of 140 -- 27 an amount of $2250. Do you remember what work that was for, saying tender management? Mr Thirkell That – that would’ve – that line of item would be generally for issuing of drawings to potential contractors, liaising with Theo at the time, possibly answering phone calls from potential contractors and understanding who was interested in conveying that type of information to – back to Theo. Mr Eylander And would it – and I know it was some time ago. Would it have included looking at the invoices and the like for the work being completed? Mr Thirkell To March 2020. So, yes. I mean, there would’ve been invoices that was at hand. There was work that was being carried out. So I would’ve been reviewing invoices with Theo and recording – and recording it on my project expenditure sheet. Mr Eylander Now, I’ll take you over the page, Mr Thirkell, and the third entry down, the – it ends, “Caio, project management for the period 13 December 2019 to 27 March 2020 with an amount of $1500”. Do you recall what project management was performed and – sorry. I’ll leave you answer that because there’s probably something about Caio. Is Caio an employee of Thirkell? Mr Thirkell Caio is an ex-employee. Mr Eylander Do you recall what that project management work was? Mr Thirkell Yeah. And – and, look, it’s on here. In my eyes, he wasn’t project managing, he was liaising and doing and observing works on site to report back to me. That was his role. Mr Eylander So why would you describe it as project management? Mr Thirkell Yeah. It’s – I wouldn’t have. I would’ve been – that should’ve been really liaising or inspecting or visit the site. Mr Eylander Mr Thirkell, there’s a subtotal there of $12,270 plus tax, GST, and then a payment. Now the payment there minus $13,497, is a different figure to that in Q1 of your project expenditure account $7062. Can you explain that? Mr Thirkell No. I can’t explain that. [106] It then shortly thereafter continued with the following exchange between Counsel and Witness. The answers given by Mr Thirkell that I considered to be critical are emphasised by me in bold.86 Mr Eylander Now, during the period of time 13 December 2019 and 27 March 2020, there was works being performed at the respondent’s residence? Mr Thirkell Yes. 86 T.3-53 Line 7 to T.3-54 Line 26. Emphasis added. -- 27 of 140 -- 28 Mr Eylander And your evidence is that you would – and I’m probably using the wrong word here, Mr Thirkell, collating but you are recording the payments in relation to the works being performed? Mr Thirkell That’s right. As instructed. Mr Eylander And you’re doing that by way of spreadsheet? Mr Thirkell Yes. That’s a spreadsheet. Yes. Mr Eylander And these payments, they are in accordance with contracts that have been entered into by these contractors or suppliers? Mr Thirkell Well, the contract’s with Theo and I’m a – I receive the quotes as they arrive and --- Member Sorry. Mr Thirkell, again, listen to the question and simply answer the question. Were the payments in accordance with contracts with these contractors? Mr Thirkell I reviewed the payments in accordance with my drawings and the scope of works or my specifications that I provided. That’s my advice to Theo. They do the works I had on the plan and that’s – that’s really my – that is my reason for being there. Mr Eylander And for the contractors doing the work, have you sighted the contracts with the homeowners? Mr Thirkell I had – yes, some – some, I guess, contracts were reviewed with Theo and that – reason for that was for me to provide advice on what my thoughts about that were at the time. Mr Eylander Did you keep copies of the contracts between – well, with the licensed contractors for the performance of the works? Mr Thirkell I have what was provided to me. I don’t know if that’s all of them. I guess what I have recorded I have. That’s why I’ve recorded it. Mr Eylander So what was provided to you by whom? Mr Thirkell Theo. Mr Eylander And Preston Law? Mr Thirkell Sometimes Tammy would give me some information as well. So that’s true. So --- Mr Eylander Would you agree with me that in putting together or the recording of these amounts in your spreadsheet, that you would need to look at the contracts to see if these amounts were in accordance with the contracts? Mr Thirkell No. I – I wasn’t in detail with that. I mean, if Theo said he’s willing to pay that amount for that service or that building works, that was it. I mean, at the end of the day, my job is to see whether that work got carried out and advise Theo that, yes, I’ve inspected that work and I’m -- 28 of 140 -- 29 happy with it and you can close off that engagement or pay that contract but that was not in my hands. Mr Eylander So you weren’t aware whether the contracts required a deposit or progress payments or a final payment? Mr Thirkell No. I – that wasn’t my department of requesting deposits or – I have no financial ties with any of those contractors. Mr Eylander Do you recall which contracts you did sight, because I haven’t seen any in your statement? Mr Thirkell I only recall seeing emails and – so – so the process that I would go through would be probably more correspondence than seeing any contracts. I don’t recall actually seeing a contract but I’ve seen a lot of papers, so I’m going to say that maybe it’s been passed through at a meeting with Theo but I’ve never kept it. It’s just been – yeah. I’m just there for the record. I’m just there recording information. Mr Eylander Sorry, Mr Thirkell. Just one moment. Now, Mr Thirkell, you would agree with me that in the quantification of the monies to rectify the works that you’ve proposed, you would need to see those contracts to make an assessment of a reasonable amount or an amount to be paid to attend to those works? Mr Thirkell That – that’s – that wasn’t my role. My role is to ensure the works were carried out in accordance with my drawings. Mr Eylander Why I ask you that, Mr Thirkell, is in the joint experts’ report you have nominated amounts for cost to complete. Thirkell – that’s the cost to complete items that are nominated as incomplete or defective work. How did you decide what amount would be as the cost to complete? Mr Thirkell Well, as an engineer and building designer, I’m quite close to the builders and contracting industry in a sense of understanding their roles and I’d like to say that I’m fairly up to date with market rates at the time and that’s my role as a building designer and when I provide advice to my clients to how much building can I get for this price, I need to have an idea and I generally have a good idea and so I use that judgment and experience, dollars per square metre rates, to assess what these amounts are likely to be. Mr Eylander I take it from that, that you didn’t refer to the Rawlinson’s Guide? Mr Thirkell No. I did not. I’m familiar with that text. I – I – it’s in my opinion that I find that – that text is not very accurate for regional centres like Cairns. That’s just my opinion. So I prefer to use what I know is going on at the time in terms of the costs that are going – are generally spoken about at the time is what I meant by that. -- 29 of 140 -- 30 [107] After an adjournment for lunch, the exchange continued as follows.87 Mr Eylander Now, Mr Thirkell, I’ll take you to the document appendix Q2 in your statement. That one there has issue date 23 December 2019, and the second entry under description, at the end it says “George tender management contract admin for that period” in the amount of $5175. Do you remember what work was done for tender management contract administration? Mr Thirkell Precisely, no; generally, yes. Mr Eylander Well, what’s your memory of what that was? Mr Thirkell Well, the administra – the administration of the project, I guess, is understanding and discussing with the owner various quotes that might be coming in at the time, the various tasks, and most likely liaising with and discussing on the phone with contractors and the owner, that type of – that type of task. Now, tendering means providing drawings to contractors, subcontractors to obtain quotes, would be what I’d gather was happening at that time. Mr Eylander And were you perusing the quotes as they were coming in? Mr Thirkell I – Well, if they weren’t sent directly to me they would have been provided through Theo, and some were provided to me, so I would look at it and then, as I said previously, follow that on to Theo for his instruction – his further instruction of that. Mr Eylander And did this include quotes from multiple contractors for the same type of work? Mr Thirkell Yeah, look, yeah, for certain tasks I guess there would have been more than one quoting no doubt so, yes, I guess so. I can’t remember who and how many, but generally we – we’d expect multiple quotes or costs. [108] The answers given by Mr Thirkell, in particular those that I have emphasised in bold above, is once again alarming. It demonstrated to me that Mr Thirkell was not acting in the role of an independent expert giving his opinion on the state of the work and the reasonable costs of rectifying or completing it. He was acting in the role of a building designer / engineer / project manager for the respondents. To the extent work has been carried out, namely that listed in Appendix Q of his report under that heading, he merely ‘recorded’ the expenditure for that work as it was incurred. Even more concerning is that notwithstanding that he expresses an opinion in his written report that the costs were ‘reasonable’,88 such are bare opinions not backed up in any way as to basis upon which he went about to consider the costs and ultimately reach that view. [109] The exchange between Counsel and Mr Thirkell that I extracted in paragraph [106] is telling. When Counsel put the proposition to Mr Thirkell that he would have to take 87 T.3-55 Line 27 to T.3-56 Line 11. 88 Ex. 16 – See the second paragraph under the heading ‘Conclusion’ on pg 27. See also the last paragraph on pg 25 under the heading ‘Building Works Overview’. -- 30 of 140 -- 31 certain steps to assess a reasonable amount, his answer was “that wasn’t my role.” In my opinion this shows Mr Thirkell misunderstood his role as an expert in this proceeding. It was precisely his role to consider and opine on a reasonable amount to be paid to attend to the works. [110] I also note the following from my reading of Mr Thirkell’s report of June 2020, which I have extracted here for ease of reference. (a) From the ‘Executive Summary’ on pg 4 of the Report. Thirkell Consulting Engineers & Building Design attended the premises on 3 May 2019 at 8 Saxon Street, Clifton Beach. QLD 4879 (Lot 44 RP 748233). The report states our findings of incomplete and defective building work and uses information gathered and reported since May 2019. The owner provided us instructions to carry out and rectify some of the works which is described in the report along with photos, videos and other relevant evidence provided in the appendices. … It is my opinion that: (a) The house did not reach practical completion as at May 2019 and (b) The house did not reach practical completion as at September 2019. The costs expenditure to date to carry out the rectification works is $87,976.46 GST inclusive. The likely further costs to rectify is $66,660 GST inclusive. We provide a list of contractors used in the rectification works in the appendix. (b) From the ‘Introduction and instruction’ This report provides evidence and reasons to show that practical completion had not been reached and below I outline the list of defective and incomplete works along with my opinions as follows: 1.1 My opinion as to: (a) works which had not been completed in accordance with the Contract as at 15 May 2019; (b) works which had not been completed in accordance with the Contract as at 9 September 2019; and (c) works completed by the Applicant under the Contract that were defective as at 9 September 2019. 1.2 The reasons for my opinions mentioned in paragraphs 1.1(a), (b) and (c) above, including: (a) my observations of the works and when those observations were made; (b) evidence of my observations of the works, including photographs and video recordings and when such photographs and video recordings and when such photographs and video recordings were produced; and (c) how the works are either incomplete or defective, by reference to the terms of the Contract and any relevant laws, codes or standards. -- 31 of 140 -- 32 1.3 My observations, and evidence, of works that the Respondents have had carried out to complete the works and to rectify defective works, including: (a) when such works were completed; (b) by whom such works were completed; and (c) details of the works that were completed. 1.4 My opinion as to whether the works carried out by the Respondents, described as above, were reasonable costs incurred and the reasons for my opinion. 1.5 My opinions as to: (a) further works that are required to complete the works and rectify defective works and the reasons for your (sic) opinions; and (b) the reasonable costs likely to be incurred for the Respondents to have such works completed. (c) From the ‘Summary or previous inspections and reports’. 3.3 November 2019: I received instructions from the Respondent to assist to obtain quotes from trades to rectify defective work and complete works that were deemed incomplete. [111] Not only does he expressly state therein, “The owner provided us instructions to carry out and rectify some of the works which is described in the report”, he also refers to the likely further costs to rectify of $66,660 incl GST. This is that which he has noted in Appendix Q of his report entitled ‘Works to be carried out’.89 These figures have been carried through to the Joint Experts’ Report as the ‘costs to complete’ attributed to Mr Thirkell. [112] In terms of those costs, I return again to the discussion between the applicant’s Counsel and Mr Thirkell to which I referred in paragraph [106] wherein Mr Thirkell was asked about the costs, in particular how he decided what these costs should be. His answer was somewhat vague. It is in the paragraph wherein he starts “Well, as an engineer and building designer …”. At best, as he explains it is premised on the asserted fact that “I need to have an idea and I generally have a good idea and so I use that judgment and experience, dollars per square metre rates, to assess what these amounts are likely to be.” [113] With the utmost of respect to Mr Thirkell, whilst that might be an acceptable approach in estimating the costs of a building whilst he is designing it, it is an entirely inappropriate approach to take in forming and expressing an opinion as to the reasonable costs of rectification for the purposes of assisting this Tribunal in his role as an expert witness for a party. His report should have shown details of the work required and calculations of cost of that work. It was entirely absent any of that such that I could not in a meaningful way place any weight on his opinion as to the costs to complete. At best that opinion is based on Mr Thirkell having a ‘good idea’ of what it costs. 89 Ex. 16 – Appendix Q. -- 32 of 140 -- 33 [114] Whilst this is the basis upon which Mr Thirkell purports to have provided as ‘expert report’ as to his opinions, on my reading of Mr Thirkell’s report and having heard from him in the witness box under cross examination, I concluded that he had not in fact independently considered the reasonableness of the costs incurred to form any such opinion. In all respect, it is my firmly held view that Mr Thirkell, as the purported expert witness for the respondents, did not offer an independent opinion on the cost of remedial work but rather was simply reciting the cost of the work as he recorded it. With the utmost of respect to Mr Thirkell and the respondents, this is not independent expert opinion evidence. [115] There are also some other issues with which I have difficulty regarding Mr Thirkell’s evidence, and which lead me to conclude that he is not giving independent expert opinion evidence. [116] There are a number of invoices included within Appendix Q to his report of June 2020 that are addressed to Mr Thirkell personally90, or to Thirkell Consulting Engineers,91 or to Thirkell Consulting,92 or to Thirkell Consulting Engineers & Building Design.93 The presence of these invoices is consistent with the ‘instructions’ that Mr Thirkell states he received from the respondents to ‘carry out and rectify some of the works” as I have extracted that from Mr Thirkell’s ‘Executive Summary’ in his June 2020 report. [117] Notwithstanding those asserted instructions and the existence of the invoices addressed to Mr Thirkell in any of the forms just noted, under cross-examination Mr Thirkell stated that he was not a party to any contracts for the work, and whilst it was possible that some invoices might have been made out to him, that would have been in error and any final accounts would have been changed to the respondents’ name.94 That oral evidence is entirely at odds with his written ‘expert report’ evidence. [118] There are also some issues concerning the charges levied by Mr Thirkell to the respondents. Not only are these confusing in terms of the breakdown between what is asserted to be ‘expert’ work and ‘project management / design’ work, curiously there are no invoices or entries within the Appendices that reference services provided by Thirkell Consulting Engineers & Building Design, or by Mr George Thirkell personally, for the period prior to 13 December 2019. This is notwithstanding his attendance on site on 3 May 2019, the production of his first report of 15 May 2019, his attendance on site for inspection with the QBCC Representative on 5 July 2019, and the production of his ‘Scope of Works drawings’ sent to Preston Law under cover of letter dated 20 August 2019. The absence of such is unexplained. [119] What is also unexplained is the reference in Mr Thirkell’s report to his ‘opinions’ of the state of the work as at 9 September 2019 given the extent to which he refers to what is said to be works incomplete or defective at that date.95 It cannot be overlooked 90 Ex. 16 – Appendix Q3, Q 10 (it is noted that this is also addressed to the Respondents in conjunction with Mr Thirkell), Q11, Q15. 91 Ex. 16 – Appendix Q4. 92 Ex. 16 – Appendix Q16. 93 Ex. 16 – Appendix 21. 94 T. 3-16 Lines 9, 10, and 16 to 18. 95 Ex. 16 – para’s 1.1 and 4, and later in many paragraphs referencing separate allegedly defective items of work. -- 33 of 140 -- 34 that this is the date upon which the respondents purport to have terminated the contract with the applicant. It is entirely unclear as to whether Mr Thirkell inspected the works on that date, or whether he has simply adopted this date for the purposes of his report on the basis of the purported termination on that date. [120] In terms of Mr Thirkell’s evidence, Counsel for the applicant made these submissions in his written closing.96 26. The evidence of Mr Thirkell when cross-examined about his tender and project management of the works performed pursuant to the counterclaim is unsatisfactory and troublesome. His answers were guarded and obfuscated the contracts for the works performed pursuant to the counter- claim. … His evidence suggested at its highest there were conversations with Theo Kaminaras about the scope of works, contracts and invoices. Some invoices were made to Mr Thirkell and his business entity. He said Theo Kaminaras would have entered into any contracts. He said he may have seen written contract’s but did not recall these and did not keep a copy for his records. 27. Theo Kaminaras’s evidence is, at its highest, is he “incurred and paid the costs of works carried out to date mentioned in Appendix Q”. 28. Mr Thirkell’s evidence leads to the conclusion he project managed the works performed pursuant to the counter-claim, that included the tender, contract administration, construction management services, and supervisory services. The builder relied on the ‘Submissions of Applicant – Experts” dated 20 November 2020 filed pursuant to Direct 2 of the Directions of the Tribunal dated 18 September 2020. 29. The builder submits Mr Thirkell’s evidence of the alleged defects and costs for rectification of alleged defects is unreliable. Where the evidence differs, Mr Boyle ought to be preferred. … 31. George Thirkell was “instructed” by the homeowners “to carry out and rectify some [of] the works which is described in the report” dated 19 June 2020. The evidence leads to the conclusion the homeowners engaged Thirkell to perform “Tender & project management tasks, engineering & drafting services” and paid him the amount of $16,742.00 to perform this task. The monies are claimed and set out at Appendix Q. There was an allowance for a further $6,600.00 to be paid to Mr Thirkell for further “tender & project management tasks, engineering & drafting services”. This is a total of $23,342.00. 32. Mr Thirkell’s evidence is tarnished by the relationship with the homeowners., (sic) with a conflict between his role as an expert and the pecuniary benefit to project manage the homeowners works. 33. Further, the evidence of George Thirkell leads to the conclusion he is an advocate for the homeowners. [121] In contrast, the respondents’ Counsel made these submissions. 96. Mr Thirkell attended site, conducted inspections, and provided his opinion as to the nature and extent of the defective and incomplete works 96 Ex. 25. -- 34 of 140 -- 35 performed by the Builder. He also provided an opinion as [to ] ( sic ) the rectification of the works and the costs to complete the rectifications. Those opinions are contained within his June 2020 report and its appendices which form Exhibit 16.97 [122] Their Counsel also made this submission immediately following his submission as to the probative value of Mr Boyle’s evidence that I extracted in paragraph [69] herein. It is submitted that in the circumstances of this matter, Mr Thirkell’s report should be preferred over Mr Boyle’s report. [123] In my opinion, there is much force in the submissions from the applicant’s Counsel. Generally, I agree with them. I do not accept the submissions for the respondents. Whilst it is correct that Mr Thirkell attended site and conducted inspections, I do not accept it as correct that he provided his opinion as to the nature and extent of the defective work. [124] On a close reading of Mr Thirkell’s reports, much of what he had to say was premised entirely on the respondents’ complaints of allegedly defective work. I do not read this as being his opinion independently formed and held. This can readily be seen by reference to his first report of 15 May 2019, in particular that which he states in paragraphs 3(a) and (b), and the entirety of sections 4 and 5 of his report. On any reading of those parts of the report, the source of his ‘opinion’ of defective work is photos or a video provided to him by the respondents together with that which they ‘advised’ him of the asserted defective work. Whilst subsequent reports advanced these issues by reference to that which Mr Thirkell says he later observed and formed opinions about in terms of the extent of rectification work being, or that had been, carried out, the premise for his opinions as to the existence of defective work remained unchanged, that being what he had been ‘advised’ by the respondents. [125] In my reading of the entirety of the documentation prepared by Mr Thirkell I was unable to distil from it anywhere he independently, and without reference to the respondents, reviewed and then identified the existence of what is said to be defective work. In all respects Mr Thirkell’s evidence was entirely unsatisfactory as expert opinion evidence. [126] However, I do not accept as a blanket position where the evidence of Mr Thirkell differs from that of Mr Boyle, Mr Boyle’s evidence should therefore be accepted. The difficulty I have with that submission is that in many instances Mr Boyle simply did not give evidence on an issue, particular the reasonable costs of work, and to the extent he did so it is premised on only a desktop study and at times merely adopting what others have said. Katrina Gobbett [127] Ms Gobbett is a licenced real estate agent. She gave a short statement providing what was said to be a Comparative Market Analysis dated 26 May 2020 and her opinion as to the market rental value of the respondents’ rental property the subject of its claim for lost rent due to the delay in completion of the house. Her statement was tendered by consent.98 She was not required for cross-examination. 97 Respondents’ closing written submissions – para 96. 98 Ex. 17. -- 35 of 140 -- 36 [128] Whilst the statement contained her opinion of the anticipated rental that could have been achieved, it did not include any evidence of vacancy or take up rates, nor of lost opportunity for leasing the property that would have realised that which was said to be the lost rent. Ms Gobbett’s evidence was unhelpful. It possessed no probative value. Defective / Incomplete Work [129] I thus now turn to the substantive issues in this proceeding and my consideration of those issues based on this evidence. In my opinion this is the correct starting point. It is at the heart of the dispute. [130] As will be recalled from my discussion earlier in these reasons under the heading ‘The Contest’, the respondents press their claim for damages on the basis that the construction was extensively defective and accordingly they are entitled to damages for breach of contract including breach of express warranties. That being so, it seems to me necessary to start by identifying the warranties and thus what is said has been breached. For ease of reference, I extract here the relevant warranties as they are expressed in the general conditions of contract. Clause 36 Statutory Warranties 36.1 To the extent required by the Queensland Building and Construction Commission Act 1991 (Qld), the builder warrants: (a) … (b) the works will be carried out in accordance with all relevant laws and legal requirements, including, for example, the Building Act 1975 (Qld); (c) the works will be carried out in an appropriate and skilful way and with reasonable skill and care; (d) the works will be carried out in accordance with the plans and specification to this contract; (e) … [131] As the preamble of that subclause indicates, such warranties are a requirement of statute. Those are found in the Act Schedule 1B s.21, s.22, and s.23 respectively. The relevant standard of expectation for meeting such warranties is that dictated by the words of the statutory warranties – the most obvious of which is that work will be carried out “in an appropriate and skilful way” and “with reasonable care and skill”. Moreover, it is the specific nature of the work to be performed which provides the context in which the expected standards of appropriateness and reasonableness are applied.99 [132] With that as a premise upon which the issues of defective/incomplete work is to be addressed, before doing so a question that must be answered is whether the work constructed by the applicant was defective at the relevant time, that being when the applicant asserted practical completion was achieved and it made its claim for final payment. As I understand the contest, it is this fact which premises the subsequent conduct of the parties that led to termination of the contract and the circumstances that flow from it. 99 Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor [2019] QSC 49,[79] and [81] per Henry J. -- 36 of 140 -- 37 [133] Each party presented its evidence and submissions to me at various times referencing these items as defective / incomplete works, or using similar words. This appears to have arisen out of the manner in which the respondents pleaded their defence and counterclaim, asserting that certain work was defective, the rectification of some of which has been completed and the remainder incomplete. It is the latter which I understand to be the ‘incomplete work’. I did not understand the presentation of the competing cases to suggest that work required to be done under the contract simply was not done at all so as for it to fall within the description of being ‘incomplete work’. To the contrary, the work was done but simply not in accordance with the contract such that it was defective. [134] To me this is consistent with the fact that the applicant is asserting practical completion was achieved well before termination of the contract occurred. Its position must be that all work was complete albeit subject to some level of rectification being necessary for some minor defective work. Thus, from the applicant’s perspective the only ‘incomplete’ work was the requisite remedial work to attend to the minor defective work. Similarly, as I understand the respondents’ position much of the work was defective, thus incomplete for the purposes of practical completion being achieved. Thus the ‘incomplete’ work was the rectification needed to attend to the defective work. However, all that being said, as I will discuss later in these reasons, as the evidence unfolded, in particular that of Mr Gilboy, it became apparent that there was at least one item of work which could be considered as ‘incomplete’ by the applicant as builder, namely the underground drainage, such being associated with the defect in the roof drainage in terms of the guttering. [135] Notwithstanding that which I have just said, out of simple convenience where I discuss ‘defective work’ in these reasons it will encompass all items whether they have categorised as defective or incomplete by either party. [136] Before embarking on my discussion of the allegedly defective work there is one other threshold issue that in my opinion should be addressed. That is the issue whether, if I find the work is not as per the contract, should I then find it to be defective requiring rectification so as to give rise to the secondary issue of costs of that rectification, or should I proceed on the basis that the extent to which the work is not as per the contract is a permissible deviation from the contract but one that entitles the respondents to compensation for diminution in value. Whilst neither party’s respective Counsel made submissions to me on these points as discrete issues, they do arise on the material and argument that was before me. They were also the subject of a very brief and general exchange between me and the applicant’s Counsel during the delivery of his oral closing submissions,100 such opening the door for the respondents’ Counsel to address me on by way of reply submissions if he so chose to. There was however no such submission. [137] As I have noted it, this raises the question of cost of cure or diminution in value. As it was expressed by the learned author of Hudsons – Building and Engineering Contracts Where a builder has carried out work to a building which requires remediation, the issue that arises is whether the building Owner is entitled to the cost of 100 See T.4-12035 to 46. -- 37 of 140 -- 38 repairing that defective work – the cost of cure – or is limited to the diminution in the value of their building as a consequence of the defective quality of the work undertaken.101 [138] This is often referred to as the test in Bellgrove v Eldridge (1954) 90 CLR 369 wherein the Court adopted the following statement made in an earlier version of Hudsons, and thus expressing it as a correct statement of the law: … the measure of 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 the building conform to the contract, with the addition, in most cases, of amount of profits or earnings lost by the breach.102 [139] The Court, Dixon CJ, Webb and Taylor JJ, however expressed a qualification to that rule, it being The qualification, however, as to which this rule is subject is that, not only must the work undertaken by necessary to produce conformity, but it must be a reasonable course to adopt. ... Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of deal with the situation and in such cases the true measure of the building owner’s loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by the defective workmanship or material. As to what remedial work is both “necessary” and “reasonable” in any particular case is a question of fact. …103 [140] This then of course gives rise to the question of - what is necessary and reasonable? As I have noted it, neither party has addressed me with any clarity on this question and so the following is that which I can ascertain doing my best from that which is before me. [141] As I understand the applicant’s position, whilst in some instances it concedes that some of its work is not strictly in accordance with the contract documents, it says the rectification of it is neither necessary nor reasonable because it is fully functional as constructed and in no way does it affect the respondents’ ability to occupy the house, and moreover there is no diminished value. [142] As I understand the respondents’ position, rectification of all defective items is necessary and reasonable and, in all instances, they should be compensated for the cost of cure as distinct to the diminished value. [143] All of this gives rise to a related issue, again one on which I was not addressed with clarity by either party. That issue is – to what extent was the applicant permitted to depart from the design and specification but remain within the confines of, and thus 101 N. Dennys and R. Clay, Hudsons – Building and Engineering Contracts 13 th Ed (London: Sweet & Maxwell, Thomson Reuters (Professional) UK, 20150, at 7-006, p.828. 102 Ibid, p.829, see Bellgrove v Eldridge (1954) 90 CLR 369, 617. 103 Bellgrove v Eldridge (1954) 90 CLR 369, 618 and 619. -- 38 of 140 -- 39 satisfy, its contractual warranty that “the works will be carried out in accordance with the plans and the specification to this contract”. 104 [144] As the applicant’s case was advanced, it has complied with the contract, including all plans and specifications for the works, as that description is given within the definition of ‘practical completion’ under the contract.105 Thus, given its concession that some work was not strictly in accordance with the plans and specification but yet practical completion was achieved, I infer its position is that some deviation was permissible. [145] In contrast, as I understand the respondents’ case advanced, because of non- compliance strictly with the plans and specifications, and as such practical completion was not achieved, I infer their position is that no deviation is permissible. [146] That last issue can be readily disposed of by reference to two decisions of this Tribunal, the second adopting the reasoning of the first in terms of the question of non-compliance with the plans and specification by a builder. The following is as stated therein by the learned Members. [13] In Queensland, there is a statutory requirement that work under such contracts will be carried out in accordance with the plans and specifications. This requirement is also one of the contractor’s obligations in the building contract itself. … [14] In deciding whether there was a breach of this obligation, a line needs to be drawn. A deviation from the plans and specifications which falls one side of the line will not be a breach. But a deviation falling on the other side of the line will be a breach. Where should the line be drawn? [15] The legislature could easily have added a modifying expression immediately before the words ‘in accordance with the plans and specifications’. Examples would be, ‘generally’, ‘substantially’, ‘only’, ‘precisely’, or ‘strictly’. Such modifying words are found in other statutes and for example development permissions and sometimes in court orders. The absence of the word suggests that the legislature have left it to the Courts and to the Tribunal to decide how strictly the obligation should be construed. [16] It is only reasonable that some departure from the dimensions or position of a structure given in the plans is permissible, because for a number of reasons including errors by the designer or architect, differing size of materials, or unforeseen practical difficulties on site, it will often be very difficult for the builder to be exact. It could not be the intention of the legislature for example to say that if a bathroom was built very slightly narrower or wider than in the plans, this would be a breach of the obligation. [17] On the other hand, it would be wrong to read the obligation as requiring only ‘general’, or ‘substantial’ compliance. To do so, would be to add a 104 General conditions of contract – Cl.36.1(d). This is the contractual adoption of the statutory warranty imposed under s.23 of Schedule 1B to the Queensland Building and Construction Commission Act 1991 (Qld). 105 Ibid – Cl. 38.1 and Schedule 2. -- 39 of 140 -- 40 word to the statutory obligation which is not there. This would not be permissible. [18] The position of the line must lie somewhere between the two extremes.106 [147] As Member Gordon observed it in Carlsen, the alleged departure from the plans and specifications fell into a number of categories, namely, using different methods of construction from that specified, using different materials from that specified, omitting work specified, and positioning fittings differently from as shown on the plan. His conclusion was that in each case it was necessary to reach a finding of fact whether the work was carried out in accordance with the plans and specifications in all the circumstances.107 I have done the same and expressed my findings on each of the asserted defective items of work later in these reasons. [148] Before leaving the reasoning of the learned Member Gordon, it is also apposite to note the manner in which he considered the question ‘How should the owner’s compensation be assessed?’ in terms of an impermissible deviation from the plans and specifications. I respectfully adopt the following from his reasoning on that question and apply the same approach to the issues as they are before me. [23] The starting point for assessing compensation for breach of contract is that the innocent party should as far as financially possible be put in the position in which that party would have been if the contract had been properly performed. [24] The manner in which this is to be done will vary from case to case, and sometimes within a case, it will vary from breach to breach. On the one extreme, sometimes, particularly where the aim of the contract is to produce something unique but which has simply not been delivered, the correct compensation is the amount of money required to achieve that aim. At the other end of the extreme, there are cases where the builder despite being in breach of contract, has in fact delivered a building or part of a building which is just as good if not better than that required under the contract and the owner has no intention to change the work. In such a case, damages may be assessed as the diminution of value of the property by reason of the breach. If that valuation is zero or cannot be assessed it may be possible to award damages for loss of amenity. [25] Between the extremes are varying levels of awards, which all come down to a reasonable and fair level of compensation between the parties. The correct level of compensation may turn on whether it is reasonable and necessary to carry out remedial work. I apply these principles to the defective and incomplete work in this case.108 [149] In the paragraphs that follow I will also consider the question of quantum should I find the work to be defective, which I will carry through to a section later in these reasons under the heading ‘Respondents’ Counterclaim for Completion of the Work’. In doing so, whilst I will express my decision on what that cost is, it is not to be read as being a decision that the respondents are entitled to be paid that amount as part of their counterclaim. My decision on the respondents’ entitlement to payment is dealt 106 William George Carlsen t/as W & E Carlsen Builders v Tressider [2015] QCAT 260 per Member Gordon, cited with approval in Mulder v Queensland Building and Construction Commission [2019] QCAT 395 per Member King-Scott at [39]. 107 William George Carlsen t/as W & E Carlsen Builders v Tressider [2015] QCAT 260 at [18]. 108 Ibid at [23] to [25]. -- 40 of 140 -- 41 with separately after I consider the question of termination of the contract. I will also leave my discussion and decision on the question of whether practical completion was achieved by reference to the extent of defective work until later in these reasons. [150] Finally, before discussing each of the allegedly defective work items, for the sake of completeness I should say something about the existence of the QBCC Inspection Report dated 30 July 2019 and the extent to which the parties have referred to it, be it either the applicant that sought to at times rely on it as supporting its case, or the respondent in dismissing it as not assisting the resolution of the disputed issues. [151] In his written closing submissions, the applicant’s Counsel made this short submission as to the relevance of that report. … This report is independent evidence of the alleged incomplete and defective work. 109 [152] In his written closing submissions, the respondent’s Counsel made this short submission by reference to its author Mr Bussell. Mr Bussell was not called to give evidence on behalf of the Builder. His report is clearly hearsay, and the veracity of its contents are contested. In those circumstances, the Tribunal should give no weight to the contents of the report.110 [153] Save only in one respect, I agree with the respondents’ Counsel that the QBCC Report is not of any probative value in this proceeding. Whilst a copy of that report appears as an annexure to Mr Timothy Kelly’s statement,111 it was not tendered separately as evidence, nor was its author presented nor called for cross-examination. In my opinion, the only relevance the QBCC report has is that it shows me the parties have engaged in the early dispute resolution process required under s77(2) of the Queensland Building and Construction Commission Act 1991 (Qld) as a precondition to the commencement of this proceeding in this Tribunal. [154] I now turn to each of the allegedly defective work items. Front Entrance Doorway and Door [155] The contract called for a 1200 mm wide pivot hung front entrance door. The applicant constructed a 1020 mm wide side hung front entrance door. The respondents’ claim is to remove the front entry door and associated sidelights, and reconstruct them within the structural opening to fit a 1200 mm wide pivot hung door. [156] This is said to be estimated at a total cost of $8,030.00. That cost is as given by Mr Thirkell in his June 2020 report as part of the ‘Works to be carried out’.112 He does not provide any details as to the basis upon which he opines this estimate. [157] Mr Timothy Kelly’s evidence is that as a result of a change to the width of the hallway the wider door could not be installed because it could not open to the full width, and thus after what he says were discussions with Mr Theo Kaminaras it was agreed to get 109 Ex. 25 para 30. 110 RWCS – para 101. 111 Ex. 1 Annexure TMK-23, pg’s 245 to 269. 112 Ex. 16 Appendix Q – pg 2. -- 41 of 140 -- 42 a custom made door of the same style and fitted. Whilst he did not say so, I infer that he means at the reduced width. His written statement of evidence then continued and he states that after the custom door was fitted, he met with the respondents on site and they informed him they were happy with the door but still disappointed it had to be reduced in width. In that regard he then asserts the existence of an agreement he reached with Mr Theo Kaminaras for the applicant to pay the additional costs to increase the BBQ bench by 200 mm as a set-off for that disappointment.113 [158] Notwithstanding that this was his evidence in chief, under cross-examination Mr Timothy Kelly for the first time said that the door the respondents had selected114 only came as a side hinged door and not a pivot door. He also admitted that the door in question was contracted to be a pivot door, but then stated that it was a side-hinged door that would not fit whilst admitting that a 1200 mm wide pivot door would fit.115 [159] As I understood Mr Kelly’s oral evidence, he was then asserting that because the respondents had selected a ‘shiplap’ door, it could not be fitted as a pivot door and that is why it was a side-hinged door. He says that he definitely informed Mr Kaminaras of this.116 [160] As to the issue of the alleged reduction in the hallway, on questioning from the respondents’ Counsel he confirmed that it has been made during design stage.117 On questioning from me Mr Kelly confirmed that the width of the hallway was constructed as per the contract plans.118 Thus I infer that the change was made before the contract was entered into. Accordingly, I do not see this change as having any relevance to this issue given that the contract drawings also show the requirement for a pivot door and that door is specified as being 1200 mm wide. 119 The suggestion to the contrary made by the applicant’s Counsel as to there being an agreed ‘variation’ is not correct.120 [161] Mr Kaminaras’s evidence on this was contained in his first written statement.121 Mrs Kaminaras’s evidence on this is also contained in her first written statement.122 I need not go into that in detail, it being sufficient to note that it is directly at odds with Mr Kelly’s written statement of evidence and his oral evidence given during cross- examination. 113 Ex. 1 – para’s 207 to 210. As will become apparent in my reasons that follow, I have placed emphasis on Mr Kelly’s statement that a custom door was fitted. 114 I infer this was the original selection for the 1200 mm door. 115 T.1-54 Line 10 to Line 45. 116 T.1-55 Line 31. 117 T.1-53 Line 6. 118 T. 1-53 Linwe1-56 Lines 10 to 24. 119 See Ex.5 – Dwg A-02 and the identification of D 01 thereon, and Dwg A-13 and the reference to D 01 in the Door Schedule thereon. 120 See his closing submission to that effect in Ex. 25 para 38. 121 Ex. 21 para’s 12 to 17. 122 Ex. 19 para 31. -- 42 of 140 -- 43 Discussion [162] It is relevant to note that neither of the respondents were cross-examined on the assertion by Mr Kelly that arose from his oral evidence in cross-examination that he informed them a ship-lap door could not be fitted as a pivot door. [163] Similarly, the issue of the alleged ‘offer and acceptance’ between Mr Kaminaras and Mr Kelly as to the trade-off between door width and BBQ bench was not put to Mr Kaminaras in cross-examination. The applicant’s Counsel submits that this issue is not justiciable because of that agreement, such said to have arisen on the basis of Mr Kaminaras having made the offer, such said to have been admitted by Mr Kaminaras in his statement.123 However, I do not read Mr Kaminaras’s statement as saying he made an ‘offer’ that Mr Kelly ‘accepted’. Moreover, the evidence of Mr Kelly indicates a slightly different manner in which this ‘agreement’ is said to have arisen such that I am unable to find that in fact an agreement was reached with certainty. At its highest it is a discussion about a proposed quid-pro-quo. [164] Put simply, I do not accept the evidence of Mr Timothy Kelly on this issue. His written statement of evidence and his oral evidence under cross is not consistent. [165] As I have considered all of the evidence before me on this issue, it seems to me that there can be no doubt that the door was not constructed as per the plans and specifications. But equally, there is no suggestion anywhere in the evidence or submissions that the door, as it is constructed, is defective in the sense that it is defectively manufactured or it has been installed in a defective manner such that it does not function as a front entry door to the house. The complaint is that it is simply not as per the contract. This is then one of those issues that brings squarely into issue the question of cost of cure or diminution in value to which I referred earlier. [166] Regrettably, there is no evidence before me as to what the diminution in value could be if anything at all. The evidence is that the door should be rebuilt to give the respondents that which they contracted to give. [167] It seems to me that, because this is the front entry door to the house, and the untested evidence of the respondents is that they were, at the very least, disappointed with the as-built entry door, I infer that this was an important issue to them to get a wide pivot hung front entry door. Accordingly, it would be an issue of cure rather than diminution. [168] It also seems to me that it would not fall foul of the Bellgrove v Eldridge qualification because it could not be said that to remove the existing door and sidelights and reconstruct them within the structural opening would not be an unreasonable course to adopt. Such an approach is also consistent with that which I have described above where I have adopted the reasoning of Member Gordon in an earlier Tribunal matter. [169] Thus, it leaves me to determine the reasonable cost of the requisite remedial work. As I have noted, Mr Thirkell’s evidence is a bare assertion as to a value. Given my comments as to the probative value of his evidence overall I do not accept that as being sufficient to persuade me as to the reasonable value. [170] Unfortunately, Mr Boyle did provide any estimated cost of carrying out the work in either his report or in the Joint Experts’ Report. He was however cross-examined on 123 Ex. 25 para 30 said to reference Mr Kaminaras’s statement at para 18. -- 43 of 140 -- 44 the issue relatively extensively in an effort, at least as I understood it, to ascertain from Mr Boyle what he considered to be a reasonable cost of remedial work.124 Ultimately, the following short exchange between the respondents’ Counsel and Mr Boyle: Mr Kissane So the doorway would need to be reframed? Mr Boyle The – the doorway would need to be reconstructed. Yes. Mr Kissane Yes. The glass would need to be also changed? The side lights? Mr Boyle The glass would need to be changed. Mr Kissane Yes? Mr Boyle Yes. Mr Kissane And the new door? Mr Boyle And a new door. Yes. Mr Kissane Yes. And you agree that the costs of those works would be that – using round figures, about $8000. Mr Boyle. No. I don’t. I – I – I can’t comment on that. [171] Mr Boyle, as expert for the applicant, had the opportunity at that point in time to assist this Tribunal in dealing with this question. Unfortunately, it was not forthcoming and thus I am left with the proposition put to him as to a reasonable value. [172] Noting that which I have said earlier concerning my views on Mr Thirkell’s evidence and the absence of any substance to what seems to me a bare assertion only as to the value of this work, if that was all there was my finding would simply be that there is nothing before me to support the respondents’ claim of $8,030 for this item. However, given that the respondents’ Counsel put the proposition to Mr Boyle as the applicants’ witness, which whilst disagreed with initially it was qualified by Mr Boyle that he could not comment on it, on the basis of that cross-examination alone there is enough for me to find that the reasonable value of the remedial work necessary to deal with this issue is $8,000. Security Screens [173] The respondents claim that the contract called for the provision of security screens to all external doors, other than the front entrance door, and the windows. They say that what was installed was merely flyscreens. The respondents’ evidence is a reliance on the specification for security screens as it appears on the contract drawing A-14.125 [174] In his statement of evidence Mr Timothy Kelly made the following statements.126 189. In our dealings with the Respondents they always referred to flyscreens, not security screens. Security screens were never mentioned. 124 T.2-82 Line 21 to T.2-86 Line 14. 125 Ex. 21 – para 46 to 50. 126 Ex. 1 – para’s as noted. -- 44 of 140 -- 45 193. The Building Contract price and the Applicant’s Quotation allowed for flyscreens but the word “mesh” was inadvertently left out of the External Doors – Screens part of the standard inclusions. 194. GC 13.6(e) provides that the order of precedence is “other documents in the order listed in item 16”. 195. Item 16 of Schedule 1 when read with GC 13.6(e) provides that the Applicant’s Quotation and the Standard Inclusions take precedence over the Plans. 196. Alternatively, the Standard Inclusions must be regarded as the Specifications because the purpose of Specifications is to detail the work needed to complete a construction projects ( sic ) and describe in detail the scope of work and the materials, fitting and other products to be used which of course determines the Building Contract price. If the Standard Inclusions are regarded as Specifications GC 13(c) applies and the Standard Inclusions take precedence over the Plans. Discussion [175] This issue can be disposed of in relatively short terms. There is no dispute that security screens were not installed and that only flyscreens were installed. The question is whether, under the contract, those should be security screens. [176] The following notes appears on Dwg A-14127 WINDOW SCHEDULE Security screens with fly screen gauze to a ( sic ) DOOR SCHEDULE Security screens with flyscreen gauze to all SGD’s. No security screen or flyscreen to entry door. [177] The ‘General Inclusions’ list to which Mr Kelly refers includes the following note128 EXTERNAL DOORS Screens Aluminium wire to all screens as indicated on plans [178] For present purposes I accept Mr Kelly’s argument that the inclusions list takes precedence over the plans, and that this may be referred to as the ‘specification’. However, in my opinion, it does not assist the applicant. I confess to having difficulty understanding how it makes a difference that the word ‘mesh’ was inadvertently left out of the reference in the General Inclusions list as it makes no difference to the requirements for there to be ‘security screens’ as they are referred to in the Plans, namely Dwg A-14. If the word ‘mesh’ was read into the specification, that specification is for ‘aluminium wire mesh to all screens as indicated on plans’. The relative ‘plan’ is Dwg A-14 which expressly calls for the provision of ‘security screens’ with flyscreen gauze. That is, on any proper construction of these two parts of the contract document read together, the requirement of the applicant under the 127 Ex. 1 – TMK-2A pg 97. As Mr Thirkell comments on it in his report – “SGD is sliding glass door”, and as to the reference ‘a’ at the end of the sentence under the heading ‘WINDOW SCHEDULE’ he remarks “We reasonably assume it was to all windows.” I agree with those comments. 128 Ex. 1 – TMK-5 pg 102. -- 45 of 140 -- 46 contract was to supply and install security screens with aluminium flyscreen mesh. For this reason, I accept the respondent’s argument that the work was defective in that security screens were not installed. [179] That being said, the question is then one of quantum to rectify this defective work. In that regard the respondents assert that they have incurred a cost of $12,906 to install the requisite security screens.129 Whilst their evidence of this fact is somewhat sparse reliant only on the ‘recording’ of same by Mr Thirkell and a copy of an invoice from ‘Wintersun Glazing’,130 such which was not presented in a way that permitted the testing as to the truth thereof, the applicant concedes that this is a reasonable cost of rectification.131 Bathroom Niche [180] The respondents’ complaint is that the niches in the main bedroom ensuite are not the required depth. They claim $2,970 to rectify it.132 [181] It is common ground that the niches have been constructed and that a feature tile has been installed into the niche. It is also common ground that the niches were to be constructed to fit a shampoo bottle.133 As I understand the argument, there is not an issue with the tile that was ultimately used, the issue is simply the depth, it not being sufficient to hold the particular type of shampoo bottle being used by the respondents. [182] Mr Timothy Kelly gave oral evidence under cross-examination that Mrs Kaminaras was not happy with the tiling to the rear face of the niches because the grain of the tiles did not flow one to the other, so he had that corrected by tiling over the tiles as originally laid with tiles selected so as to show the flow of grain. He said that the decision was made to do it this way rather than cut out the originally laid tile thus avoiding damaging the waterproofing, and that such was discussed with the respondents, although there is some conjecture as to whether they agreed with that approach.134 [183] It is also common ground that there was a discussion regarding the need to fit a shampoo bottle. Both Mrs Kaminaras and Mr Timothy Kelly refer to that fact in their respective written statements.135 The difference is that Mrs Kaminaras asserts she showed Mr Kelly the relevant bottle, whereas Mr Kelly says that there was simply a discussion about it being required to fit a shampoo bottle although he cannot recall whether he was shown the relevant bottle. He also says that at no time was there ever a discussion about the required depth.136 [184] In his written closing the respondents’ Counsel submits that Mrs Kaminaras made particular mention to Mr Kelly that the niche needed to be sufficiently deep to accommodate the large shampoo bottles, and that given she was not cross-examined on this point her evidence should be accepted. He then continues and says that given 129 Ex. 16 para 4.2.6 and Appendix J & Q6. 130 Ex. 16 Appendix Q Line Item Q6. 131 Ex. 25 para 49. 132 Counterclaim para 5(d). 133 Ex. 1 para 234 & 235; Ex. 17 para’s 6 & 34. See also Ex. 18. 134 T.1-38 Line 35 to 1-39 Line 11. 135 Ex. 17 para 34; Ex. 1 para 234. 136 T.1.38 Lines 14 to 30. -- 46 of 140 -- 47 there are no dimensions stated in the plans for the depth of the niche, it is reasonable to infer that the niches should have been constructed to that required depth, that it was this depth the niches were constructed to but when the tiling remedial work was carried out the depth was reduced.137 [185] The applicant’s submission is that there is no defect, that the depth of the niche is dependent on the depth of the wall in which it is to be constructed, and that the work is acceptable.138 Discussion [186] As I understand the evidence, there can be no doubt that there was a discussion concerning the need for the niches to fit a shampoo bottle, and that the retiling of the niches reduced its depth. However, that is the limit of it. [187] I do not agree with the respondents’ Counsel’s submission that Mrs Kaminaras made it clear that the depth needed to be sufficient to house a large shampoo bottle. She did not give any such evidence, the reference to a ‘large bottle’ only arising in Counsel’s questioning of Mr Kelly. The extent of Mrs Kaminaras’s evidence is a reference to a shampoo bottle, without any reference to its size. [188] Nor is there any evidence to suggest that there was an express requirement for a particular depth or at the very least a greater than usual depth, whatever that might be. The common evidence is that no depth was specified, and that there is no ‘standard’ for any such depth. [189] That being said, I am unable to accept the argument from the respondents that the work is defective. The only ‘defect’ complained of is the depth and the evidence does not support that argument. Kitchen and Butler Pantry Sinks [190] The issue here is that a drop-in sink has been installed in the kitchen, and an undermount sink has been installed in the butler’s pantry. There is no dispute as to the type of sink used or the workmanship of those installations, the issue is that it should have been in reverse, that is the undermount sink in the kitchen and the drop-in sink in the butler’s pantry. The respondents claim $10,340 to rectify this work such including the removal and replacement of the stone bench top in the kitchen.139 [191] Mr Timothy Kelly’s evidence is that the ‘kitchen quotation’ was prepared prior to the respondents making their selection of the sinks, and that the ‘Kitchen and Butler’s Pantry’ part of the ‘Inclusions’ clearly shows which section each sink was selected for, and that the kitchen quotation details the kitchen sink followed by the butler’s pantry sink. He also refers to drawings shown to have been prepared by Kitchen and Cabinets by Design’ that he says shows the drop in sink to the kitchen and the undermount sink to the butler pantry, such which he says were ‘approved’ by Mrs Kaminaras.140 137 RWCS para 135. 138 Ex. 25 para 53. 139 Counterclaim para 4(e). This is the same figure that appears in Mr Thirkell’s report (Ex. 16 Appendix Q) and in the Joint Expert’s Report for this item. 140 Ex. 1 para’s 171 to 176. -- 47 of 140 -- 48 [192] Mr Kelly was extensively cross-examined on this issue.141 During that examination he gave evidence which did not appear in his statement as to alleged discussions regarding the change from a ‘right hand drainer’ to a ‘left hand drainer’ with Mr Brad Stewart, Director of KC by Design.142 [193] Mr Stewart also gave evidence both via a written statement and orally under cross- examination. Mr Stewart’s evidence was that he had provided for an undermount sink to the kitchen in the original quotation but that it was changed after the contract date once the selections had been finalised.143 He also stated that he was informed by Mr Gomizelji, his stonemason, that Mr Kaminaras had informed Mr Gomizelji that all sinks would be drop in and not undermount, he then sent drawings to Mrs Kaminaras that showed the drop in sink to the kitchen, and that the work was constructed in accordance with those drawings.144 [194] In his oral evidence under cross-examination, he stated that that he carried out the work in accordance with a Reece Plumbing presentation that was different to the one contained in the contract document, the version he held showing the selection to the butler pantry separately from the selection to the kitchen, which he says was given to him by Mr Phil Kelly. He did not however give any evidence of a conversation with Mr Timothy Kelly concerning a change from a ‘right hand drainer’ to a ‘left hand drainer’.145 [195] Mr Philip Kelly’s evidence on this issue was limited. It only dealt with his conversations with Mr Theo Kaminaras shortly after the alleged error was discovered by Mr Kaminaras.146 [196] Mr Gomizelji gave evidence that in his telephone conversations with both Mr and Mrs Kaminaras they each confirmed that all sinks, including the BBQ bench sink, were to be drop-in sinks.147 [197] Mr Boyle’s evidence as expert for the applicant was limited. In essence, whilst he notes that on the documents it is not clear which sink is to be installed in which location, he says the sinks as installed are functional and opines that the work is not defective. He ascribes a value of Nil to the rectification cost of same.148 He was not cross-examined on this opinion in any detail. The extent of that examination was that he was asked if the sinks had to be rectified whether he agreed that would require a new benchtop to which he said yes.149 [198] Mrs Kaminaras’s evidence, not challenged in cross-examination, is that she never wanted a sink in the kitchen but was ultimately persuaded by Mr Timothy Kelly that 141 T.1-56 Line 37 to T.1-72 Line 14. 142 T.1-65 Line 42 to T.1-68 Line 32. 143 Ex. 11 para 7 to 9. 144 Ex. 11 para’s 10 to 12 and 23. Notwithstanding he states he was informed that all sinks were to be drop-in, he does not make any reference to the butler’s pantry sink being drop in but rather refers to drawings he says he produced and which show it to be undermount. His evidence in this regard is not clear as to how it came about that the undermount sink was installed in the butler’s pantry. 145 T. 2-63. 146 Ex. 2 para’s 8 to 16. 147 Ex. 12. 148 Ex. 14 para’s 41 to 44. See also Ex. 15 Item 4. 149 T.3-26 Line 42. -- 48 of 140 -- 49 it would be advantageous to do so, but such could be an undermount sink with a stone or timber cover when not being used. As to the issue of allegedly approving the drawings from KC by Design, she says that nobody drew her attention to this detail, that she could not tell which sinks were being depicted in those drawings, there was not at any time discussion with her as to the installation of the sinks said to have been depicted in those drawings, and that her focus in reviewing the drawings was simply the cabinetry layout.150 [199] Mr Kaminaras gave similar evidence regarding his review of drawings, and also gave evidence of his communications with the applicant once he discovered the error in construction and his efforts to have it rectified.151 As to the alleged conversation with Mr Gomizelji, he denies that it occurred in terms of the kitchen and butler pantry sinks.152 Again his evidence was not challenged in cross-examination. [200] The evidence of Mr Thirkell as expert for the respondent was limited. He effectively simply expressed the above circumstances in a very general way. To the extent he gave evidence as to the reasonable costs of rectification, his evidence was also limited. It is nothing more than a reference to his ‘Appendix Q’ document wherein a one line entry exists within the spreadsheet entitled ‘Works to be carried out’ with the amount of $10,340 inserted therein. He does not provide any detail as to the basis upon which this figure has been ascertained.153 Whilst Mr Thirkell was cross-examined at length, he was not cross-examined on this specific issue in terms of an alternative hypothesis or the question of reasonable cost of rectification. Discussion [201] The applicant’s evidence on this issue is entirely unsatisfactory to support its challenge to the respondents’ case. It is replete with inconsistency. [202] Mr Stewart’s evidence is that he initially allowed for an undermount sink in the kitchen, which he later changed to a drop-in sink allegedly based on a Reece Plumbing presentation different to the document in evidence, but without that other presentation document being produced in evidence. Notwithstanding that it was not stated in his written statement or during oral evidence under cross-examination, as I understood his evidence, the reason for the installation of the undermount sink in the butler pantry was because of the way in which it was shown to him in that other Reece Plumbing presentation. But he also says that he received advice of Mr Gomizelji, said to have been based on a discussion with Mr Kaminaras, that ‘all sinks were to be drop in’. That being said, it remained entirely unexplained why then there was not a drop in sink to the butler pantry or, at that point in time, he did not raise a question with the applicant as to what was to be installed given that the presentation called for an undermount and a drop-in. [203] There is also a lack of consistency in Mr Timothy Kelly’s evidence. Whilst he confirms that which Mr Stewart has said about the ‘Kitchen Quotation’ allowing for an undermount sink in the kitchen, he says that it also allowed for a drop-in sink for 150 Ex. 19 para’s 26 to 28. 151 Ex. 20 para’s 45, 67 to 85. 152 Ibid para’s 83 to 85 and 89. 153 Ex. 16 para 4.4.8. -- 49 of 140 -- 50 the pantry, he goes on to assert that the applicant’s inclusion list clearly shows the selection in each location. However, that is not correct. [204] Within the contract document there is a document referred to as the ‘Reece Plumbing Presentation’, and a quotation by ‘Kitchen and Cabinets by Design’.154 The former does not separate kitchen and butler pantry and simply shows the selection of a drop- in sink and an undermount sink under a combined heading. The ‘Inclusions’ list refers only to the ‘Kitchen’ identifying the sink as being ‘as per Reece Plumbing presentation’, however there is no separate section in reference to the Butler’s Pantry’ although I note there is a line item within the section entitled ‘Kitchen’ that is described as ‘Pantry’ which I infer is a reference to the ‘Butler’s Pantry’ although that only cross references the KC By Design quotation.155 [205] As to the drawings said to have been produced which were allegedly ‘approved’ by the respondents, copies of these appear in Mr Timothy Kelly’s written statement,156 and also in Mr Stewart’s statement.157 On my reading of these drawings, which I note are 3-D representations and presented in very small scale, based on what I understood from Mr Timothy Kelly’s evidence under cross-examination as to the depiction of the drainer over the dishwasher in the kitchen thus showing a drop-in sink, I accept that they show what can be seen to be a drop-in sink to the kitchen and an undermount sink to the butler pantry. But, in my opinion such is only obvious with explanation, or would be evident to somebody who is knowledgeable in reading such drawings. This would not have included Mrs Kaminaras given that as she stated it, nobody brought this to her attention. [206] As to the assertion by Mr Gomizelji of a conversation with Mr Theo Kaminaras, whilst the existence of the conversation is not denied, to the extent Mr Gomizelji asserts Mr Kaminaras said that all sinks were to be drop in Mr Kaminaras emphatically denies this in his written statement, and as noted he was not cross-examined on the point such as to test the veracity of this statement. I have no reason to not accept Mr Kaminaras’s evidence on that point given the extent to which it is consistent with Mrs Kaminaras’s evidence that the undermount sink was to go into the kitchen, and the lack of consistency elsewhere in the applicant’s evidence. [207] The respondent’s Counsel makes this submission in his written closing: 140. The sinks that were installed in the Kitchen and the Butler’s Pantry were not in accordance with the Contract. 141. The incorrect sinks this is not a minor matter. The stone bench tops have to be specifically cut to accommodate the sinks. The bench top in the Kitchen is a stone bench top which was supposed to have the smaller under mount sink in it. However, the sink that was actually installed was a much larger sink that should have been installed in the butler’s pantry. 142. The key documents that identify the sinks are the: 154 Ex.1 Annexure TMK-3 & 6. See also Ex. 21 Ex TK-2. 155 Ex. 1 Annexure TMK-5 pg 104. 156 Ex. 1 Annexure TMK-37. Mr Kelly also refers to some text messages with Mr Kaminaras containing similar or the same drawings, but as he confirmed under cross-examination these messages were relevant only to issues concerning the fridge. See T.1-72 Line 24. 157 Ex. 11 Annexure B. -- 50 of 140 -- 51 (a) Reece Plumbing Presentation dated April 2018 – particularly pages 113 and 115 of Exhibit 1; and (b) KC By Designs quotation dated 26 June 2018 - page 98 and 99 of Exhibit 1. 143. The KC By Designs quotation specifies the kitchen sink as an undermount sink and the butler’s pantry sink as a drop-in sink. The Reece Plumbing Presentation specified that only the smaller sink that appears at page 115 of Exhibit 1 could be fitted as the undermount sink, whereas the larger sink, which appears at page 113 of Exhibit , could only be fitted as a drop-in sink. 144. Therefore, reading the KC By Designs quotation together with the Reece Plumbing Presentation, the smaller undermount sink was to be installed in the kitchen and the larger drop-in only sink was to be installed in the butler’s pantry. 145. This is consistent with Mrs Kaminaras evidence that the larger drop-in sink was to be in the butler’s pantry and the smaller undermount sink was to be in the kitchen.158 [208] In contrast, the applicant’s Counsel’s closing submissions reflect the evidence the applicant led as I have referred to above.159 However, his submissions go one step further with the following statement. Phil Kelly’s evidence is that a custom pressed undermount sink could be installed in the kitchen. This is admitted by Theo Kaminaras. The benchtop did not need to be replaced. The existing could have been honed. Alternatively, the benchtop could have been removed to the stonemasons for honing and reinstalled.160 [209] In my opinion there is much force in the respondents’ submissions. They place a reliance on the Kitchen and Cabinets by Design quotation wherein the following two lines relevantly appear:161 Included in quotation is: • 40mm Statuario Venato with undermount sink in Kitchen with waterfall ends allowed. • Option of 20 mm Mid-Range Recon or Laminated benches in Laundry and Butler’s Pantry. Drop in sinks allowed for both. [210] They submit that this must be read in conjunction with the ‘Inclusions’ list in the contract wherein the following relevant line items appear:162 KITCHEN Benchtop As per client selection from KC By Design – 40 mm Statutario Venato with waterfall edges Sink As per Reece Plumbing presentation. 158 RCS para’s as noted. Footnotes omitted. 159 Ex. 25 para’s 55 to 59. 160 Ibid para 61. 161 Ex.1 pg 98. My emphasis. 162 Ex.1 pg 104. -- 51 of 140 -- 52 Pantry As per client selection from KC By Design – 20 mm mid range recon or laminated benches. [211] Notably, the references to ‘client selection from KC By Design’ do not include an express reference to, or an adoption of, that which is stated in the KC By Design quotation of an undermount sink to the kitchen and a drop in sink to the butler’s pantry. Moreover, the reference to and adoption of the Reece Pluming presentation leaves open a degree of uncertainty because the contract document, being that presentation, does not differentiate between the sinks as specified for the Kitchen and Butler’s Pantry. It is for this reason, as I understand the submission, that the respondent’s Counsel submits the two documents are to be read together so as to be able to identify which sink goes where. [212] It is trite law that a contract document is to be read in its entirety to determine the proper meaning of any part of it. Thus, this submission carries considerable weight only if the KC By Design quotation is a contract document. [213] As I noted earlier in these reasons, there is a contest on the pleadings as to that which constitutes the contract document, however I was not taken to that contest in any way during the hearing nor in submissions. In that regard, as it relates to this issue, I note the following: (a) Mr Timothy Kelly’s evidence as to that which is the contract document does not contain this quotation,163 with the quotation appearing as a separate document.164 However, notwithstanding that presentation of the material, Mr Kelly also refers to the Applicant’s quotation V 1 and the Standard Inclusions List separately in his written statement and annexed them as documents separate from the contract document.165 The Applicant expressly pleads in its statement of claim that these two documents are contract documents.166 Such is consistent with the contract document itself wherein, at Item 16 of the Schedule, there is an express reference to the Applicant’s Quotation and Inclusions List as being contract documents.167 Mr Timothy Kelly’s evidence in that regard is misleading. (b) Mr Theo Kaminaras’s evidence is that the KC by Design quotation is a contract document.168 That is consistent with the respondents’ pleaded case.169 (c) In its Amended Response and Answer to the Respondents’ Amended Response and Counter-application, whilst it admits that certain documents are contract documents and denies others are such, it is silent on the issue of the KC by Design quotation. That is, it simply did not plead in response to the allegation. Accordingly, adopting the usual rules of pleading that apply in the Courts, in my opinion this would be deemed admitted. [214] All that being so, in my opinion it is appropriate to proceed on the basis of the respondents’ submissions that the documents must be read together to obtain a proper 163 Ex. 1 para 2 and Annexure TMK-2. 164 Ibid para 4(a) and Annexure TMK-3. 165 Ibid para’s 4(b) and (c) and Annexures TMK-4 and 5. 166 Application for domestic building dispute filed 3 September 2019 – Annexure A para 3(c) and (d). 167 Ex. 1 pg 51. 168 Ex. 19 para 3(g). 169 Amended Response and Counterclaim filed 25 March 2020 – para 2(vii). -- 52 of 140 -- 53 construction of the contract document in terms of identifying that which is the correct specification for the sink in the kitchen and that in the butler’s pantry. That is obtained only by reference to the KC by Design quotation. Even if I am wrong about the KC by Design quotation being a contract document, it is extrinsic evidence properly referred to in order to resolve an ambiguity within contract documents. [215] I do not accept the evidence of Mr Timothy Kelly, Mr Brad Stewart, or Mr Gomizelji that there was a change made to the specification so as to change the kitchen sink to a drop-in. As I have noted it, there are too many inconsistencies with that evidence to enable me to conclude that it was reliable in terms of its accuracy. This is particularly so because there is an entirety of acceptable evidence to establish why the drop-in sink ended up in the butler’s pantry. I prefer the evidence of Mr and Mrs Kaminaras that what was constructed is not what they required, the latter being as per the contract documents to which I have just referred. [216] All that being said, I find as a fact that the applicant was in error in its construction of the kitchen and butler’s pantry in terms of the installation of the sinks. The contract required an undermount sink to the kitchen and a drop-in-sink to the butler’s pantry, but the reverse was constructed. In that regard the work is defective. [217] That of course leads to the question of the reasonable cost of rectification. [218] Whilst not expressed in such clear terms, the submission from the applicant’s Counsel to which I have referred, namely that Mr Philip Kelly’s evidence is that a custom pressed undermount sink could be installed in the kitchen thus not necessitating the removal of the stone benchtop, brings into play the ‘cost of cure vs diminution in value’ argument to which I referred earlier in these reasons. [219] I do not however accept that submission as being correct. Firstly, this is not the evidence of Mr Philip Kelly, and nor could it be said that it was admitted by Mr Kaminaras. Mr Kelly’s evidence was nothing more than enquiries could be made of Reece Plumbing to see whether there was an off-the-shelf item that might fit or alternatively they might be able to get a custom made sink.170 In addition, there is no evidence on the issue of honing the benchtop in the circumstances of the sink being replaced. But that is not to say that it might be a viable alternative and one that could be achieved for a relatively smaller sum than is being claimed. The evidence simply does not address it. [220] There is also the issue as to why it is necessary to replace the undermount sink in the butler’s pantry with a drop-in sink. Mr Thirkell’s report suggests that it is necessary, but such is a bare assertion. Once again, the evidence simply does not address it. There is nothing to explain why, nor has it been raised by either Mr or Mrs Kaminaras, as to there being a need to change other than to simply meet their original requirements. [221] Additionally, there is the uncontested evidence of Mr Boyle that the as-installed sinks are functional. [222] What I am left with is the bare assertion by Mr Thirkell that the reasonable cost is $10,340 given that Mr Boyle, the applicant’s expert witness, has not provided any 170 Ex. 2 para 13. See also Mr Kaminaras’s statement at Ex. 19 para 76. -- 53 of 140 -- 54 opinion as to the reasonable cost, simply asserting it has a nil value because it is not defective.171 [223] The challenge that thus faces me is determining how to resolve this issue in terms of the respondents’ counterclaim given my finding of the work being defective, but the entire absence of adequate evidence to deal with the question of reasonable costs. [224] The submission from the respondents’ Counsel is that I should accept Mr Thirkell’s evidence, and that the respondents’ should be allowed the costs to rectify it so as it conforms with the contract.172 I do not accept that submission. The evidence is simply lacking to show me that such would be a reasonable course to adopt. I am not persuaded that the cost of cure in these circumstances is entirely warranted. Whilst quite evidently it is the case that Mrs Kaminaras agreed to an undermount sink in the kitchen and thus should not be left to accept a drop-in-sink in this location without some form of compensation, whether it be by way of remedial work to meet the specification or simply the payment of an amount as a solatium to off-set the disappointment she is seemingly experiencing in not getting the undermount sink, I cannot see any justifiable reason to change the sink in the butler’s pantry notwithstanding it is not as per the contract. [225] That then leaves me with the question of the reasonable cost of rectification. [226] Whilst I have found as a fact that the work in defective, and it seems to me that it would be in order for there to be some form of compensation for that fact, there is simply nothing before me that gives me any indication as to what a reasonable cost of doing so would be, particularly in the circumstances of the alternative possibilities being to remove the benchtop, install the sink as specified, with the benchtop being remade and replaced, or to have a custom made sink made to fit the opening in the benchtop with the associated remedial work in doing so. Nor is there anything to suggest to me a diminished value of the kitchen or even a reasonable amount as a solatium. [227] All that being so, in the absence of any satisfactory evidence on which I can make a finding as to the reasonable cost of rectification considering the question of ‘cost of cure vs diminution in value’ I am simply unable to make any finding as to the quantum of relief for this item to which the respondents would be entitled given my finding of the defective nature of construction. Salon Plasterboard [228] In their amended counterclaim, the respondents claimed $13,750 for rectification of mouldy plasterboard in the salon area of the house.173 As I understand it, that is the area from which Mrs Kaminaras operates her home-based hairdressing business. By the time of the hearing the claim was for only $4,129.40, such being said to be the actual costs incurred in February and March 2020.174 [229] Mr Thirkell’s evidence is that mould was evident to plasterboard walls in May 2019, and upon removal of the plasterboard in January 2020 mould was observed on the rear 171 See the discussion with Mr Boyle at T.2-90 Line 7 to T.2-91 Line 10. 172 RCS – para’s 158 and 159. 173 Amended Counterclaim para 5(b). 174 Ex. 16. Appendices Q17 and Q 18. -- 54 of 140 -- 55 of the plasterboard.175 However, his evidence of the mould present in May 2019 is, as I understand it, a photo of mouldy plasterboard given to him by the respondents at around the time of his first inspection in May. This is as it is recorded in his first report dated 15 May 2019.176 Photos of the mould on the rear of the plasterboard appear in his report of 18 February 2020 together with photos of moisture metre readings being taken at that time.177 Copies of those reports appear as part of Mr Timothy Kelly’s evidence. Before turning to Mr Kelly’s evidence on this issue it is convenient to note the evidence from Mr Theo Kaminaras. [230] Mr Kaminaras says in his statement that he first became aware of mould on the salon wall when he was inspecting the site on 8 January 2019 with Mr Timothy Kelly, and said that Mr Kelly informed him that the rain had got in, possibly through the flashing in the roof but that it had been siliconed and all was OK, or alternatively through the expansion joint on the outside of the wall that had not been caulked.178 [231] Mr Timothy Kelly’s evidence was that he became aware that mould was present in the salon shortly after Christmas (which I understand to be a reference to 2018) but before they returned to work via a phone call from Mrs Kaminaras. He says he believes the rain might have got in from the door left open by the respondents over the Christmas period, or alternatively through the door when the gutters overflowed having been blocked by leaves. Regardless, he says it was rectified by having been treated, the board not saturated or damaged.179 As to the photo in the Thirkell report of May 2019, he says it is one taken on 9 January 2019 before mould killer was applied.180 [232] Mr Ainsley, the roofer who did the work, gave evidence under cross-examination that employees of his firm had attended at the site to investigate water ingress in this area, and he expressed the view that such was as a consequence of leaves being in the gutters.181 [233] Mr Boyle’s evidence in chief on this issue was relatively short. He expressed his view to be that the work was not defective because at the QBCC inspection on 5 July 2019 there was no evidence of mould being present, and otherwise deferred to the statement of Mr Timothy Kelly.182 [234] He was also cross-examined at some length on the issue. The following exchange as it occurred in terms of the photos in Mr Thirkell’s report that shows the mould and moisture meter readings being taken is indicative of that evidence.183 Mr Kissane So as I understand your evidence, you don’t know this is a defect – you can’t be sure that this is a defect because you don’t know – sorry – is it the case you were saying that you 175 Ex. 16 para 4.5.3. 176 Ex. 1 Annexure TMK-21 para 4.10 pg 237. Note that the photo referred to in this paragraph is not in evidence as part of that report. 177 Ex. 1 Annexure TMK-29 pg’s 315 to 317. 178 Ex. 19 para’s 56 to 61. 179 Ex. 1 para’s 217 to 219. 180 Ibid para 220. 181 T.2-23 to T.2-24. See also Ex. 6 being the plan on which Mr Ainsley highlighted in green the relevant area of the roof. 182 Ex. 14 para’s 46 and 47. 183 T.2-97 Line 21 to T.2-98 Line 18. -- 55 of 140 -- 56 don’t know when moisture may have occurred in there? Is that what you’re saying? Mr Boyle That’s what I’m saying. I don’t know what date those photographs were taken on. Do we know that somewhere? Mr Kissane So I suppose, irrespective of that point, you’re proceeding on the basis that – well, you didn’t consider that issue. Is it the case that you didn’t consider the time that those photos were taken when you determined your views in regards to whether this was a defect or not? Mr Boyle Sorry. I – I considered the fact that water got into the building during construction, and damaged some plasterboard. I understand the builder went back and rectified that damage, and then, there was another event, perhaps, that manifested moisture getting in, that’s the subject of these photographs at 4.5. Member I’m going to interrupt, if I may. … Mr Boyle, you’re saying that there was an event that caused water to get into the building, and the builder went back and rectified it. How do you know that? Mr Boyle Yeah. That’s from his statement. Member Okay. So it’s based on what Mr Kelly has told you, or said in his statement? My Boyle Yes. What he said in his statement. Yeah. Member Okay. Then, the second part of what you just said before is that at some time later, water had got into the building, that’s just an assumption on your part? Mr Boyle Well – well, I don’t know that it did. Member No. That’s right? … You don’t know, so your just making an assumption that it might’ve got in later. You don’t really know. Mr Boyle It – it may be the orig – I – as I said before, it may have manifested again from the original moisture ingress. It may well have been another source of moisture. Could’ve been a broken pipe. [235] The applicant’s Counsel sought to sum up this issue with the submission that the cause of the mould was not proven, and that the allegation the mould was caused by defective building work is speculative. However, in the alternative if I was to find against the applicant there is a concession that the cost to rectify in the amount of $4,129.40 is reasonable.184 184 Ex. 25 para’s 69 and 70. -- 56 of 140 -- 57 Discussion [236] It seems to me that there cannot be any doubt that mould was evident in this location during the time the applicant had possession of the site and the house was still under construction. In my opinion it does not matter whether a door was left open by the respondents or not. The applicant was in control of the house under construction at that time. [237] Also, it cannot be doubted that the mould was a manifestation of water entering into the internal space by some means, and that the applicant did undertake some remedial work by treating the mould on the surface of the plasterboard and repainting it. But notwithstanding that action, there is no evidence from the applicant that it investigated whether moisture was present in the substrate to the plasterboard at that time. [238] Whilst I accept on face value that there was no mould present at the time of the QBCC Inspection in July 2019, I do not accept the apparent argument that flows from it that there was not a remaining defect. There is no evidence to show me at that time that there was no moisture present either in the plasterboard or in the substrate to it. [239] Nor do I accept the evidence that there must have been some other later event to have caused the mould to be present again. Such is purely speculative. As Mr Boyle ultimately conceded at the conclusion of the exchange with him during cross- examination, the mould identified in January 2020 could readily be a manifestation of the original water ingress. [240] In all respects I am satisfied on the evidence that water penetrated the interior of the house during construction, and that caused mould to occur on the plasterboard in the salon in January 2019. I am unable to draw an inference that there must have been a second event of water penetration that was not the responsibility of the applicant as builder so as to give rise to a second manifestation of mould in the salon, and I am also satisfied that the original water penetration most likely caused moisture to be trapped in the substrate to the plasterboard that on the balance of probabilities manifested on a second occasion as mould on the plasterboard in January 2020. [241] Accordingly, I find as a fact that there was defective building work which caused water to penetrate the building, and on the balance of probabilities caused moisture to be trapped in the substrate which ultimately necessitated the removal and replacement of plasterboard in the salon, such being attended to by the respondents following termination of the contract. It follows therefore that the mouldy plasterboard may be properly considered as defective work. [242] On the concession made by the applicant I readily find that the reasonable cost of the rectification of this item $4,129.40. Polished Concrete Floor [243] The respondents’ complaint, as it is expressed in Mr Thirkell’s report, is that there are marks on the polished concrete floor to the external terrace area, which they assert is a result of material being placed there by the applicant during construction before the sealer had cured.185 In their counterclaim they seek payment of $15,400. By the time of the hearing the quantum was reduced to $9,460. 185 Ex. 16 para 4.6.2. -- 57 of 140 -- 58 [244] Mr Boyle agrees with Mr Thirkell that on or about 3 October 2019 marks to the polished concrete floor were evident. However, he goes on to note that the QBCC Inspection Report of its inspection of 5 July 2019 is silent as to the presence of any marks, and if practical completion was achieved on 10 May 2019 and the applicant was not made aware of the marks prior to that, then it is not defective work. Mr Boyle also opines that “The marks …may well have been the result of some action after the Builder left the site.”186 [245] In Mr Timothy Kelly’s statement, he correctly notes that the presence of the marks on the concrete floor was not noted in the Thirkell report of 15 May 2019, and that whilst it appears in the Thirkell draft report of 18 February 2020 such merely depicts a square mark on the floor but which he says was not there during the inspection on May 2019 or with the QBCC in July 2019. Similar to Mr Boyle’s speculation, Mr Kelly speculates that “…obviously something has been placed on the polished floor, maybe a storage carton, since the Respondent’s (sic) took possession of the Dwelling.” 187 [246] Mr Kelly also briefly addresses the rectification cost with this statement. In any event, the cost to remove the square mark would be no more than $1,500 in total.188 [247] In contrast, Mrs Kaminaras’s written statement of evidence contains photos which she states were taken on 28 March 2019 showing builder’s material and rubbish placed on the floor, in particular a small pile of rubbish on top of what appears to be a square piece of cardboard, and then on 5 May 2019 which, whilst showing the terrace area clear of materials and rubbish, quite clearly shows a square mark in what appears to be the same location as the square piece of cardboard I just mentioned as being visible in the March 2019 photos.189 Whilst not entirely clear, as best I can make it out, that appears to be the same square mark that appears in the photograph forming part of Mr Thirkell’s 18 February 2020 report as it is contained in Mr Timothy Kelly’s statement and referred to by him as I have mentioned above.190 [248] When Mr Timothy Kelly was referred to these photos in cross-examination, in particular the photo showing the presence of the builder’s material and rubbish, whilst initially somewhat vague when pressed on the point he confirmed that at that time the polished concrete floor had been finished.191 Discussion [249] On the basis of this evidence, I am satisfied that, contrary to the evidence of Mr Kelly, the relevant mark on the polished concrete floor was evident in May 2019. I conclude that on the balance of probabilities it was caused by the placement of rubbish or building material in that location during construction. That being so, I find as a fact that, notwithstanding that it was not raised in the QBCC Inspection Report following the July 2019 inspection, it is properly considered to be a defect in the building work. 186 Ex. 14 para 49. See also Ex. 15 at Item 6. 187 Ex. 1 para’s 246 to 251. 188 Ibid para 253. 189 Ex. 17 para’s 36 to 31. 190 Ex. 1 pg 314 (Photo 1). 191 T. 1-82 Line 16 to T. 1-83 Line 22. -- 58 of 140 -- 59 [250] Given what I can see from the photographs, it also seems to me that it is reasonable to expect that this should be rectified. Quite clearly this is one of those occasions where the cost of cure is warranted as to do so is not invasive or otherwise unreasonable for there to be an expectation that it should be done. [251] As to the reasonable cost to rectify this work, the applicant’s Counsel submits that should I find it is defective, the cost to rectify it is uncertain, and that there are no invoices or written contracts to supply the claimed cost to rectify.192 [252] That submission is not entirely correct. In Mr Thirkell’s report Appendix Q under the heading ‘Works carried out to date’ Mr Thirkell records that $9,460 has been expended by payment to Advanced Concrete Polishing which he references as Q20 and notes the relevant Invoice number as 112. Mr Kaminaras gives evidence he has paid this cost.193 The reference to Q20 is to his Appendix Q20 which follows, at which appears a ‘Receipt’ shown as being from Advanced Concrete Polishing. Therein it shows a total payment of that amount against that invoice number. However, that Receipt is entirely devoid of any detail as to what Invoice 112 was for in terms of work performed. [253] Once again, the evidence of Mr Thirkell, and in turn the respondents, is entirely unsatisfactory. No evidence is presented from a person representing Advanced Concrete Polishing to confirm the invoice details, the work performed, or that the payment was for that said work. At best, all the respondents have given evidence of is Mr Thirkell having ‘recorded’ the payment made with the unsubstantiated assertion that it is for this work. It is insufficient for me to readily find this is the reasonable cost of cure. [254] That being so, I am left with the evidence of Mr Timothy Kelly that the reasonable cost is only $1,500. Notwithstanding this was in his written statement of evidence, and it was contradictory to the evidence the respondents would be relying on, he was not cross-examined on this point and the contrary value was not put to him nor was he challenged on this value. [255] Given the absence of adequate evidence from the respondents, it seems to me that I should accept Mr Kelly’s evidence as to the reasonable value in my calculation of that which I may allow the respondents overall for their counterclaim. Feature Timber and Slat Aluminium Wall [256] As I understand this issue, there is a feature constructed in the entrance hall to the house which is a slatted wall panel. The respondents counterclaim includes an item for rectification of this wall in the sum of $2,970 which they say is required because the slats are misaligned and there are other defects in its construction which impacts on the aesthetics of the finished product. [257] The only evidence of this alleged defect from the respondents is in Mr Thirkell’s report wherein he described it as being “Some slats noticeably do not align and the 192 Ex. 25 para’s 77 and 78. 193 Ex. 23. -- 59 of 140 -- 60 spacing between the slats is non-uniform in parts”, and provides photos of the allegedly defective work.194 [258] The applicant’s evidence in response is also limited. Mr Timothy Kelly simply says that “the entrance feature wall was constructed in a good and tradesman like manner.”195 In Mr Boyle’s report he simply adopts that which was stated in the QBCC Inspector’s report wherein it was stated that whilst there was some minor non- alignment of the vertical slats with the timber lintel ends and the door jamb edge, these were of negligible impact to the overall appearance and the work was not defective.196 [259] In his written closing, the respondent’s Counsel made, inter-alia, these submissions: The slats are misaligned and demonstrate a poor standard of workmanship. … The wall is a feature wall which is intended to draw the attention of [a] passersby. … Further, the wall is supposed to be a feature, so it is reasonable to expect a higher degree of scrutiny. … Accordingly, the Owner is entitled to expect that the feature wall will be properly aligned, and it is reasonable for the it to be rectified in accordance with Mr Thirkell’s recommendations and costings. 197 [260] In contrast, the applicant’s Counsel’s closing submission is concise, stating There is no defect.198 Discussion [261] There is nothing in the evidence that points me to a specific part of the contract document that requires the feature to be constructed to specific tolerances. The only evidence from the respondents I have are the two photos that appear in Mr Thirkell’s report and his description of the work. This is inadequate for the purpose of me determining whether it could properly be said that the work is defective. Whilst Photo 7.2 appears to depict some misalignment and lack of uniformity of gaps, the angle on which the photo is taken does not permit a definitive finding to be made one way or the other. [262] On the basis of this evidence, it seems to me that whilst it might be said that the workmanship could have been better, it is not enough to say that it is defective to the extent it requires replacement either in whole or in part. Accordingly, I agree with the applicant. It is not defective. Painting [263] The respondents claim $2,200 for ‘external and internal painting touch ups and cleaning of paint splatter’.199 194 Ex. 16 para 4.7.2 and photos 7.1 and 7.2 to Appendix A therein. 195 Ex. 1 para 228. 196 Ex. 14 para 53. 197 RWCS para’s 174 to 177. 198 Ex. 25 para 82. 199 Amended Counterclaim para 5(g). -- 60 of 140 -- 61 [264] The purported evidence of this is that which appears in Mr Thirkell’s report wherein he states, “Many areas require sealing and painting touch-ups, particularly around edges of openings, columns and lintels.”, and in respect of which he includes three photos said to have been taken on 3 October 2019.200 He also states that this work has not been done. [265] Whilst Mr Thirkell’s expert’s report includes only three photos, in the second of his earlier reports, being that dated 18 February 2020 which appears as an Annexure to Mr Timothy Kelly’s statement, there are five photographs of allegedly painting defects.201 The first three of these are the same as those appearing in his later report. The fourth photo is said to depict painting defects above a window, the fifth photo depicting painting touch up to the corner of a column which appears to be near the BBQ bench on the external terrace. [266] In his written statement of evidence, Mr Timothy Kelly refers to these five photos in Mr Thirkell’s earlier report and expresses the view that the applicant’s ‘belief’ for the need for painting touch ups is as a result of the additional works the respondents have carried out since they took possession, and could be as a result of them moving furniture and items into the house.202 [267] In response to that statement, Mrs Kaminaras made this statement in her written evidence, although goes no further than this in terms of identifying the alleged defects at the time the respondents took possession. There were painting touch ups required as a result of works we have undertaken at the Site after we took possession. However, when we took possession, there were already some minor painting defects inside and outside of the house.203 [268] In his evidence Mr Boyle expresses his opinion simply as follows: There is nothing unusual for there to be paint touch up required during the first year after completion of a house. In the normal course of events the Builder would attend to such items during the defects liability period …204 Discussion [269] In terms of the allegedly defective painting work complained of as is depicted in the photographs which appears in the evidence, to the extent it is asserted this is the defective painting work, I do not agree with Mr Boyle that such would be attended to during the defects liability period. In my opinion any such defects are part of a builder’s touch up just prior to handover and should be attended at that time. As I understand the respondents’ case in this regard, this is the nature of defect they assert. [270] The issue however for the respondents here is that the evidence they rely on to prove that this defective work existed at the time they took possession upon termination of the contract, such being equivalent to the ‘handover’ which would have occurred in the ordinary course of any house building contract, in inadequate for that purpose. At its highest, there are only three photos contained in Mr Thirkell’s expert’s report purporting to show defective painting works at 3 October 2019, such being 200 Ex. 16 para’s 4.82 and 4.83. 201 Ex. 1 Annexure TMK-25, with the photos appearing at pg’s 22 and 23 therein. 202 Ex. 1 para 258 and 259. 203 Ex. 17 unnumbered paragraph on pg 4 of the statement. 204 Ex. 14 para 56. -- 61 of 140 -- 62 approximately three weeks after the date of termination of the contract. But there is no evidence of who took those photos, nor evidence from that person that he or she actually did so and that the photos depict accurately that which he or she personally observed. Additionally, the three photos which is effectively the only evidence the respondent has of the allegedly defective work is not sufficiently clear to identify the nature and extent of the defect such that at the very least an inference could be drawn that it is as a result of poor workmanship at the time the painting was done, or even some event subsequent to the completion of the painting in that location. [271] Whilst it may very well be correct to say, as the respondents’ Counsel did in his written closing, that it is purely speculative to suggest that the painting touch ups were required as a consequence of damage caused by the respondents when occupying the house,205 in my opinion it is entirely appropriate for the applicant to so speculate in the absence of the respondents having first met their evidentiary burden to establish the existence of the painting defects at the time. [272] Also, I do not accept the respondents’ Counsel’s submission in his oral closing that given Mr Boyle’s concession that it is something that would be rectified in the defects liability period, and thus in the circumstances where a contract has been terminated then it is a damage which ought to be allowed.206 Such is not the evidence of Mr Boyle. At best Mr Boyle’s opinion is that there is nothing unusual for painting touch ups to be required during the defects liability period. I do not read his opinion as being the items complained of would be attended to during the defects liability period. [273] In my opinion, the applicant’s Counsel’s written closing submission is correct, that being: The homeowners have not discharged their onus of proof the touch ups were as a result of the defective building work or incomplete work and the claim of $2,200 should not be allowed.207 Boatshed Wall [274] At the commencement of the hearing, the applicant conceded that this work was incomplete and, in that regard, may be considered defective.208 The issue however remained as to the cost of work required to attend to it. [275] Mr Theo Kaminaras addressed this issue in his statement of evidence. Therein he states that the work was done by Mr Stuart Walker, such work entailing the removal and replacement of a 10m section of boundary fence, which he says was damaged on removal “because of slurry that was attached to it from the concrete works done by the Applicant” and thus requiring replacement and painting.209 [276] Mr Timothy Kelly addressed this at some length in his written statement.210 Given the concession made it was not necessary for me to consider this statement further save only for the last paragraph wherein Mr Kelly makes the bare assertion that the fair and 205 RWCS para 181. 206 T. 4-91 Lines 18 to 25. 207 Ex. 25 para 121. 208 T.1-14 Lines 39 to 43. 209 Ex. 21 para 43. 210 Ex. 1 para’s 144 to 166. -- 62 of 140 -- 63 reasonable cost of doing the work is “approximately $1,100.” However, notwithstanding that, it the written closing submissions for the applicant the figure is stated to be $2,253.92, being the figure attributed to Mr Boyle in the Joint Experts’ Report,211 albeit that Mr Boyle does not provide any evidence of that calculation in his individual report and seemingly adopts therein Mr Kelly’s opinion as to cost.212 [277] The respondents’ position on cost is somewhat confused. Their original claim was $4,150,213 the figure attributed to Mr Thirkell in the Joint Experts’ Report is $4,550,214 whereas in their Counsel’s written closing submission it is stated to be $5,311.50, said to be the sum of line items Q13 and Q14 shown in Mr Thirkell’s report at Appendix Q.215 [278] In the production of his report, and thus the opinion he gives as to cost of the work, Mr Thirkell relies on two invoices shown as having been issued by S.W. Rendering and Stuart Walker Rendering respectively,216 the first of which is for $4,150 dated 29 November 2019 with a description thereon as to works performed including removal of boundary fencing and rendering and painting to a garage wall, the second of which is for $400 but undated describing the works therein simply as being for ‘Rendering patching and painting on house.’ Copies of these appear respectively at Appendix Q13 and Q14 of Mr Thirkell’s report, and are carried through into the cumulative Appendix Q document as line items Q13 and Q14. However, within his report Mr Thirkell does not give any detail to indicate why both of these is said to be for the work said to have been done.217 [279] Notwithstanding that the respondents’ Counsel refers to line items Q13 and Q14 as they appear in Mr Thirkell’s report, he has seemingly confused his submission with the figures inserted in the Joint Experts’ Report for both Mr Thirkell and Mr Boyle with those shown for Line 11. I therefore did not consider the submission any further in that regard. In terms of the competing opinions on cost as given by the experts, he then submits that because Mr Boyle did not provide any explanation as to how he derived the figure of $2,899.28, and Mr Thirkell relied on the amount shown on Mr Walker’s invoice, it showing a breakdown of the works completed which included the removal and then reconstruction and painting of the boundary fence, I should prefer “Mr Thirkell’s opinion as to the costs to rectify this aspect of the works.”218 Discussion [280] I am unable to accept the respondents’ position on this issue in terms of the reasonable cost of the work. It is reliant on an ‘opinion’ being given by Mr Thirkell that has, 211 Ex. 15 Line Item 9. 212 Ex. 14 para 59. 213 Statement of claim para 4(d). 214 Ex.15 Line Item 9. 215 RWCS para 214. 216 The first is a typewritten invoice, the second is a hand written document, and whilst showing different names as the entity issuing them they both show the same ABN. I thus accept that S.W. Rendering is the same as Stuart Walker Rendering. 217 Ex. 16 section 4.9 on pg 15. I pause here to note that it may be recalled from my earlier discussion of Mr Thirkell’s evidence generally I noted he referred to having provided an estimate of this work in his letter to Preston Law of 20 November 2019. A copy of that appears in Mr Timothy Kelly’s statement at Annexure TMK-24. In that letter Mr Thirkell gives the estimate at $4,500 + GST. 218 RWCS para’s 215 and 216. -- 63 of 140 -- 64 respectfully, not been given. All that Mr Thirkell has done has been to ‘record’ an item of expenditure. At its highest he incorporates this item of work in his ‘Building Works Overview’ and the cost of it in what he sums up as being “The total of reasonable building costs to date …”219 The respondents ‘evidence’ is a copy of a invoices of Mr Stuart Walker, the first of which is said to contain a ‘breakdown of the works completed’, and the second of which contains only a very general description of works, but Mr Walker has not been presented as a witness to prove the truth of those document, nor to permit the applicant the opportunity to cross examine him on the work claimed to have been done. Whilst it is correct that the first invoice contains a description of the work done, it does not in any way contain a breakdown of that work in terms of the costs but rather it simply gives a lump sum cost of $4,150. The second invoice is, as I have said, very general in its nature and only contains the figure of $400. [281] In contrast, Mr Boyle’s opinion as to cost is a very specific number of $2,253.92. Whilst it is correct that he has not provided any explanation as to his calculation of that figure, he was not cross-examined on it by the respondents’ Counsel. However, when Mr Boyle was cross-examined on other occasions relevant to similarly very specific numbers (e.g. Line 11 in the Joint Experts’ Report showing $2,899.28, it being the figure Counsel referred to in error for this item of work), Mr Boyle was able to quickly explain the calculation he had performed.220 [282] For that reason, I infer that if Mr Boyle had been cross-examined on this issue and his figure of $2,253.92, he would similarly have been able to readily explain it. Accordingly, I prefer Mr Boyle’s opinion on reasonable cost over the figure included by Mr Thirkell in his report, the latter not being proven. Streetscape Tiles [283] At the commencement of the hearing the applicant conceded this item as being defective work, that it had been rectified by the respondents, and the cost of it is reasonable at $550.221 Roofing, Box Gutter and Valley Gutters [284] These issues concern the fixing of the roof sheeting and the flashings thereto which is said to be inadequate in the manner in which it has been laid, the eaves guttering and downpipes which is alleged to be inadequate to handle certain rainfall, and the manner in which a box gutter and some valley gutters have been constructed alleged to be inadequate in terms of size. [285] The challenge I faced in considering it arose from the manner in which these issues have been dealt with in Mr Thirkell’s evidence, in Mr Boyle’s evidence, in the Joint Experts’ Report, and by the party’s respective Counsel in their closing submissions. Respectfully, it is confused and confusing. [286] The applicant’s Counsel has identified it as one item being ‘Item 11 - Roof Sheeting, Flashing and Downpipes’, and then a second item described as ‘Item 18 - Cupping 219 Ex. 16 section 5. See the first line of the last paragraph on pg 25 wherein Mr Thirkell uses the word ‘reasonable’. 220 T.3-5 Lines 5 to 33. 221 T.1-14 Lines 43 to 45. Ex. 25 para 90; RWCS para 185. -- 64 of 140 -- 65 and Fixing of Roof Sheeting’ combined with ‘Item 12 - Box and Valley Gutters’.222 These Item Numbers correspond with the line items in the Joint Experts’ Report.223 To some degree this appears to follow the manner in which Mr Boyle has dealt with it in his report, namely under the headings of ‘Roof sheeting, flashing and downpipes’, ‘Box and valley gutters’, and then ‘Cupping of roof Sheeting, Inadequate fixing of roof sheeting, Poor scribing of flashings, Inadequate falls to gutters’, but with the last of those three said to have been dealt with previously in the report although without reference being given as to where therein it was dealt with.224 [287] In contrast, the respondents’ Counsel has address it as two items, namely ‘Roofing’ and ‘Box gutter and valley gutters’, the former being expressed as relevant to Items 4.11 to 4.15 in Mr Thirkell’s expert report, the latter being relevant to Item 4.16 in that report.225 Mr Thirkell’s report expresses these items as follows:226 (a) Item 4.11 ‘Roof Sheeting – Installation’ which is said to be remedial work completed; (b) Item 4.12 ‘Roof Sheeting – Fixing’ which is said to be work that has not been carried out; (c) Item 4.13 ‘Roofing – Scribing of Ridge Flashings’ which is said to be partially complete and partially still to be completed; (d) Item 4.14 ‘Roofing - Fixing of Barge Flashings’ which is said to be work completed; and (e) Item 4.15 ‘Roof Drainage – Gutters & Downpipes’ which is said to be work completed. (f) Item 4.16 ‘Roof Drainage – Box & Valley Gutters’ which is said to be work that has not been carried out. [288] The first point I note about Mr Thirkell’s report is, as became apparent during the cross-examination of Mr Boyle during the hearing, despite Mr Thirkell including ‘Valley Gutters’ in the title to Item 4.16, he does not in any place refers to valley gutters in the body of his report, although the examination of Mr Boyle proceeded on the basis that valley gutters separate from the box gutter in question was covered by that item.227 [289] I pause here to also note another two points that became apparent during the cross- examination of Mr Boyle, namely: (a) Line Item 11 – ‘Roof Sheeting, Flashing and Downpipes’ in the Joint Report dealt with Items 4.11 to 4.15 of Mr Thirkell’s Report and paragraphs 67 to 72 of Mr Boyle’s report; 228 222 Ex. 25 para’s 91 to 99. 223 Ex. 15. 224 Ex. 14 para’s 68 to 72, 74, 75, and 90. 225 RWCS para’s 186 to 197. 226 Ex. 16 pages 16 to 20. 227 T.3-9 Line 16 to T.3-17 Line 17. 228 T.2-101 Line 39 to T.2-103 Line 18; T.3-20 Line 41 to T.3-21 Line 6. -- 65 of 140 -- 66 (b) Line Item 12 – ‘Box and Valley Gutter’ in the Joint Report dealt with Item 4.16 of Mr Thirkell’s Report,229 and by reference to the content of the Joint Report it can be seen that it deals with paragraphs 74 and 75 of Mr Boyle’s report. [290] To the extent work is said to have been performed, Mr Thirkell’s report also includes references to costs said to have been incurred for the performance of such work, however he does not tabulate these costs by direct cross-reference to these Item numbers but simply lists invoices said to have been issued by ELH Constructions PL and Dan McCall Plumber. These are the entities he reports performed the work in question. Monetary amounts are ascribed to each of those line items in Appendix Q of his report, and as best I can make it out, these are Line Item references Q8, Q9, and parts of Q15 and Q16. [291] There is a further difficulty in being able to follow Mr Thirkell’s evidence on these issues in terms of the Line Items to which I have just referred. In the summary Appendix Q, Line Items Q8 and Q9 are expressed as being for work done by ELH Constructions, described as being ‘Roof plumbing and rectification of roof sheeting and flashing’, both recording the relevant Invoice Number as 414 with Q8 dated 22 January 2020 in the amount of $1,320 and Q9 dated 29 January 2020 in the amount of $3,411. Copies of documents said to be the relevant invoices are then included by Mr Thirkell at Appendix Q8 and Q9 of his report. The first is an ELH Invoice reference number 414 dated 29 January 2020 in the amount of $1,320 but which merely describes the work as being 16 hours of labour on 7 January 2020 and 4 hours of labour on 8 January 2020. There is no description of what work the labour performed. The second is also an ELH Invoice, but in a different form to the earlier document although again showing the invoice number as 414 but on this occasion dated 16 February 2020. It is for the amount of $3,411. However, notwithstanding that Mr Thirkell records this in the summary as being for roofing works, the invoice is described as being ‘Pool glass panels installed – final payment’. [292] I pause here to make this observation. At Appendix Q7 of Mr Thirkell’s report there is an invoice from ELH dated 22 January 2020, being Invoice 413, in the amount of $378.99 said to be for the ‘Deposit’ of 10% of the quoted price of $3,790 to ‘Install glass pool fencing’. When one deducts this deposit amount from the quoted price, the remainder is $3,411, such being the amount of Line item Q9. There is also Line Item Q12 that Mr Thirkell also records as being for ELH and including the work of ‘Reinstalled glass pool panels’, which by reference to the copy of the invoice shown in Appendix Q12 that cost is $550 incl GST. As I discuss later in these reasons, it will be seen that part of what Mr Thirkell opined was necessary to do in remedying the defective roof drainage work was to construct some additional drainage under the slab, which as I understand it necessitated the removal and reinstatement of the glass pool fencing. In that regard I note here that which I observe in paragraph [331] herein that the costs shown by Mr Thirkell for Line Items Q7 and Q12 appear to be included as part of the total of the costs for remedying the Underground Drainage, yet, he includes some costs associated with the work of removing the pool fencing as part of the roof downpipe rectification. Thus, it is entirely unclear from Mr Thirkell’s report as to which line items are encompassed within his stated costs for remedial work, whether it be the roof drainage or the underground drainage issue. This is yet another example of the inadequacy of Mr Thirkell’s expert evidence and the challenges it created in 229 T.3-5 Line 41. -- 66 of 140 -- 67 terms of reaching a decision overall in this proceeding, and one that is reflected in the length of these reasons. [293] As to the Dan McCall Plumbing invoices, copies of these also appear in Mr Thirkell’s report. The first at Appendix Q15 is in the amount of $5,599 on which the work said to have been performed is described as “80% of original estimate, completion of excavation and inground works” and “Extra works completed: Excavate and install drainage from kerb to 4 x new drainage pits and drainage for new downpipe for gutter”. The second at Appendix Q16 is in the amount of $1,100 described as being for “Completion of works as per McCall Quote # 1176 dated 29/11/2019. Downpipes and stormwater.” A copy of the quote referred to therein is not in evidence.230 [294] The confusion was added to by the manner in which the Joint Experts’ Report was expressed, and the content thereof.231 As I have noted it above in terms of the closing written submissions from the applicant’s Counsel, there are three line items in that Joint Report, namely: (a) Item 11 – ‘Roof Sheeting, Flashing and Downpipes’, noted thereon as being agreed to in part as to whether the work is defective, with Mr Thirkell’s opinion of costs to complete being expressed as $5,311.50 and as having been paid, and Mr Boyle’s opinion of cost being given as $2,899.28; (b) Item 12 – ‘Box and Valley Gutters’, noted therein as being disputed as to it being defective but with Mr Boyles reasons being expressed as agreed with Mr Thirkell that “the gutter installed behind the boat garage is not compliant” but disagreeing with Mr Thirkell as to the method of rectification, and with Mr Thirkell’s opinion as to cost being given as $19,800 and Mr Boyle’s opinion as $2,000. (c) Item 18 – ‘Cupping of Roof Sheeting, Inadequate fixing of Roof Sheeting, Poor Scribing of Flashings, Inadequate falls to Gutters’, noted therein as being disputed as being defective, but there being a notation in the column for Mr Thirkell’s opinion as to costs of rectification simply including a note “Refer to Item 11.” The opinion therein attributed to Mr Boyle in summary is that he had not inspected the roof, that neither the QBCC Report nor Mr Gilboy’s report identifies any defects in these items, but if there are defects then these are issues that would ordinarily be dealt with during the defects liability period. [295] Whilst the figure of $19,800.00 is shown separately on page 2 of the summary Appendix Q as an item of work to be carried out described as being “Roofing work not completed to date plus the provision of compliant box gutter”, I am simply unable to reconcile the figure of $5,311.50 which Mr Thirkell states as being the relevant cost of the work completed. [296] Whilst line items Q8 and Q9 are described as being work to the ‘roof plumbing and rectification of roof sheeting and flashing’ the cumulative total of these two line items is only $4,731.00. I infer that the remainder could be part of the Dan McCall Plumber invoices referenced in Line Items Q15 and/or Q16 given the descriptions of the work 230 I pause here to observe that it seems to me that these costs are related entirely, or at least in part, to the next Item I consider in these reasons ‘Underground / External Drainage’. 231 Ex. 15. -- 67 of 140 -- 68 for those items I have just referred to. However, as it became apparent in the cross- examination of Mr Thirkell, he says Line Item Q11 is “the roofing and guttering” 232. But if I was to include the amount for this line item, and ignore any part of line items Q 15 or Q16, the cumulative total exceeds the total stated by Mr Thirkell in the Joint Expert’s Report. It may also be that Line Item Q7 and/or part of Q12 is included. Put simply, I cannot tell what it is from Mr Thirkell’s evidence. I will return to these Line Items, and the invoices raised, later in these reasons when I discuss the claim for external site drainage where the confusion, and thus the entirely unsatisfactory state of Mr Thirkell’s evidence is discussed further. [297] There is also the relevant issue of Mr Gilboy’s and Mr Ainsley’s evidence.233 Whilst both of these witnesses provided ‘reports’ which dealt with these issues, and thus on their face seemingly expert evidence, their evidence was received as lay witness evidence. This was because, to the extent Mr Gilboy’s evidence was allowed,234 in terms of this issue it dealt with his inspection and advice to the applicant prior to termination of the contract when the applicant was purportedly dealing with the respondents’ complaints concerning at least some of the allegedly defective work in terms of the roof drainage issue. Mr Ainsley’s evidence was to some degree responsive of the earlier report of Mr Thirkell dated 18 February 2020, it being a report that was not relied on by the respondents as expert evidence, and also in part commented on the content of Mr Gilboy’s report. [298] All that being said, the state of the evidence was entirely unsatisfactory to permit a proper comprehension and understanding of it in its entirety. Thus, given that the Mr Thirkell and Mr Boyle attended and engaged in an Experts’ Conclave, in my opinion it seemed appropriate that I should consider and deal with these issues by following the Joint Expert’s Report in terms of the manner in which the items have been grouped and referenced. [299] I thus turn to the manner in which all of this has been addressed and ‘summed up’ by each party’s Counsel in their respective closing submissions. [300] In terms of Item 11 – Roof Sheeting, Flashings and Downpipes, the applicant concedes that the work is defective and that it has since been rectified at the respondent’s cost. The applicant notes that this is said to be at a cost of $5,311.50, a figure which appears under the heading ‘Costs’ said to have been attributed to Mr Thirkell in the Joint Experts’ Report. The applicant’s Counsel then continues and notes that Mr Boyle estimates the cost to be $2,899.28 based on adopting the Gilboy solution, such supported by the evidence of Mr Ainsley, and accordingly it should be preferred.235 232 T.3-61 Line 44 to T.3-63 Line 2. 233 Ex. 7 and Ex. 4 respectively. 234 It will be recalled as mentioned earlier in these reasons that paragraphs 14 and 22 to 24 were either not relied on by the applicant or were struck out, the respondents’ objection to same being allowed. These were all responsive to opinions expressed by Mr Thirkell in various documents produced by him. It should also be observed at this point that it is only paragraphs 3 to 17 (excl 14) and 21 of his report that deal with the roofing issues under discussion in this section of these reasons, with paragraph 18 and 19 as well as in part paragraph 12 dealing with the associated issue of the ‘Underground / External Drainage’, being a separate item discussed in these reasons. 235 Ex. 25 paras 91 and 92. -- 68 of 140 -- 69 [301] As for Item 12 – Box and Valley Gutters, combined with Item 18 – Cupping and Fixing of Roof Sheeting, the applicant also concedes there is defective work, and once again defers to the reports of Mr Gilboy and Mr Ainsley, submitting that the Thirkell scope of works said to cost $19,800 (on Mr Thirkell’s evidence) is unnecessary and unreasonably costly. In doing so, the applicant’s Counsel notes that Mr Boyle assessed the cost at only $2,000 but acknowledged that which Mr Boyle conceded as being reasonable during cross-examination that an additional $2,000 could be added to incorporate at least part of the Thirkell solution in terms of the allegedly defective valley gutters which he had not considered given the absence of any specific references to them in Mr Thirkell’s expert report.236 [302] In contrast, the respondents’ Counsel’s submission, albeit as I have earlier noted it presented in a different manner in terms of the combination, press the respondent’s position that they be entitled to the relief they seek based on Mr Thirkell’s opinions and the costs that he expresses in the Joint Experts’ Report of $5,311.50 for work already done, and $19,800 for work remaining to be done in terms of that which Mr Thirkell addresses as Sections 4.11 to 4.16 of his report that is his expert evidence in this proceeding.237 Discussion [303] As I have already mentioned it, the evidence before me on these issues is confused and confusing. That being said, doing the best I can on the complex array of material that is before me and the difficulties I have explained in being able to reconcile much if it, it seems to be apposite to start with the evidence of Mr Gilboy. His evidence was at the very least not confusing within itself, and as I have noted he impressed me as a witness. I note the following as it is expressed in his written statement of evidence.238 3. My company was engaged to complete an inspection of the roof gutters and downpipe works at the “Respondents” property located at 8 Saxton Street, Clifton Beach (the “Property”). … 6. On the 11 July 2019 I attended the “Property” to carry out my inspection. At the inspection Philip Kelly and Lachlan Ainsley (Roofing subcontractor) were also present. .. 8. … In order to come up with my recommendations I conducted a site inspection, identified the gutter brand and style used, viewed vision of the installation and undertook detailed desk top calculations to assess the existing installation with the current Australian Standards and Codes. 9. The recommendation in my report was an Australian Standard Compliant ( sic ) proposal and it offered a solution that was costs effective, that did not require the destruction of existing slab finishes or removal of additional building elements (eg : pool fence). 236 Whilst the applicant’s Counsel did not express it in those precise terms, on any reading of his written closing submissions that is the effect of them. The relevant discussion with Mr Boyle during cross- examination appears in the transcript at T.3-17 Line 24 to T.3-22 Line 3. 237 RWCS para’s 186 to 197. 238 Ex. 7. -- 69 of 140 -- 70 10. The findings in my report advised that the following areas of the guttering were non-compliant : Pool 2, Patio 2, Pool 1 and Boat Shed. In order to bring these areas to Australian Standards, I advised that either an additional 90mm diameter downpipe be installed or the eaves gutter up- sized to suit cross sectional area limitation. 11. On the 22 August 2019 Phil Kelly … emailed me the report issued by Thirkell Consulting Engineers and Building Design. 12. On review of this report I found that their scope of works does address the non-compliant gutter sizing through adding an additional downpipe and adding additional underground drainage. 13. The adding of the additional downpipe does make the existing gutter cross-sectional area compliant, however the Thirkell Scope of Works relies on the removal of the concrete slab and disturbance of existing finishes to install additional stormwater drainage to achieve this. Gilboy Hydraulic Solutions approached the rectification works and compliance issues at this property from a different perspective, by way of minimizing the disturbance of the existing finishes. Either solution will achieve compliance resolution, the GHS approach provided the more cost- effective solution to the gutter non-compliance for the builder at the time. 15. The Thirkell Scope of Works recommends installing a box gutter to the parapet section of wall between the lounge room and the Boat Shed. At the time of inspection, the installed solution was not contributing to the eaves gutter overflow issue at the BBQ/patio area and therefore, was not required to be address in our report dated 17 July 2019. However since being raised with us, it is our opinion that the installation of a box gutter to the parapet section of the wall between the lounge room and the boat shed is only one rectification measure, there are others available to the builder to remove the need for the soaker flashing, for example: (a) the first alternative to installing a box gutter would be to alter the roof truss angles against the parapet using additional saddle trusses and directing water sheeting flows to a new valley gutter. The use of a valley gutter in this instance would achieve full deemed to satisfy compliance, or (b) ….239 [304] In cross-examination of Mr Gilboy, it became apparent that there was some uncertainty as to what it was that he referred to as the ‘Thirkell Scope of Works’. It appears from his reference to a Thirkell Report being emailed to him on 22 August 2019 that he could only have been referring to Mr Thirkell’s letter and attached drawings to Preston Law dated 20 August 2019.240 The drawings attached to that letter were separately tendered by consent and became Exhibit 8 in the hearing. [305] When Exhibit 8 was shown to Mr Gilboy and he was asked by the respondent’s Counsel whether that was the Thirkell documentation to which he was referred, Mr Gilboy’s response was that it was not.241 He was then referred to Mr Thirkell’s letter 239 Ex. 7 para’s as noted. 240 A copy of this appears in the statement of Mr Timothy Kelly Ex. 1 Annexure TMK-24 at page 270. 241 T.2-38 Line 44 to T.2-39 Line 4. -- 70 of 140 -- 71 dated 20 August 2019 which he confirmed it was the Thirkell documentation to which he was referred. The following exchange then occurred between Counsel and Mr Gilboy.242 Mr Kissane Right. So you receive the letter but you didn’t receive the attached – the drawings? Mr Gilboy I may have received the drawings but they don’t look familiar. Mr Kissane They don’t look familiar to you? Mr Gilboy Yeah. Mr Kissane So your observations – your subsequent observations that are made inside your letter relate only to this letter; is that correct? Mr Gilboy Relate to the report and the subsequent information received, yes. [306] Apparently not content with that answer, the respondents’ Counsel pressed further and the following exchange occurred in respect of paragraph 11, 12, 13 and 14 of Mr Gilboy’s statement as I have extracted it above. 243 Mr Kissane Now, the letter that you were looking at a moment ago … that single page, is that the document you’re referring to in paragraph 11? Mr Gilboy Yes. Mr Kissane And you weren’t referring – those drawings did not form part of the references that you’ve made to that 22 August 2019? Mr Gilboy They may have but I don’t remember the drawings. Mr Kissane Okay. I’d like – I’d like you to – I’d like to take you to the rest of – so paragraphs 12, 13 and 14. Mr Gilboy Yes. Mr Kissane Are you familiar with those paragraphs or would you like an opportunity to read – reread them? Mr Gilboy No, I’m familiar with them. Mr Kissane Yes. So when you were making the observations in each of those paragraphs, were they in relations to simply that letter at TMK24, the single letter, or are they in relation to also the drawings? Mr Gilboy They would refer to a set of drawings as well. Mr Kissane To what – which drawings were they? 242 T.2-39 Lines 21 to 28. 243 Whilst the respondents’ Counsel referred Mr Gilboy to paragraph 14 of his report, it was not relied on by the applicant, but as I followed the line of questioning nothing turned on the reference to it. -- 71 of 140 -- 72 Mr Gilboy Well, they may be the ones that you’re – you’ve given me. [307] There was then an objection from the applicant’s Counsel to the line of questioning given that Mr Gilboy had said he could not remember the drawings. That then ultimately prompted an exchange between me and the witness which was as follows.244 Member Well, let’s – let’s – let’s answer the question, Mr Gilboy. Address that again. So you’ve been referred to a number of paragraphs within your statement. Just take a moment to just have another read of those paragraphs. You don’t need to read them aloud. Just quickly read them to yourself. So just in particular I want to take your attention to paragraph 12 … On review of this report, I found their scope of works does address the non-compliant gutter – etcetera? Mr Gilboy Correct. So what I found was that … Member No. No, I’m not asking you what you found. Mr Gilboy Okay Member We’re trying to establish as to whether or not this Thirkell report of the 20th of August 2019 that you’ve been referred to back within exhibit 1, was it the – just the letter or the letter and the attached drawings. So your reference in paragraph 12 was that “their scope of works”. So just having another look at that letter from Mr Thirkell dated the 20th of August 2019, he says there: We provide a scope of works – And he goes on and says: We hereby respond as follows. The scope of works for the rectification is shown on our drawing SW01. We provide calculations on drawing numbers HA01 to HA06. Okay? Mr Gilboy Then they must be the drawings. Member Yes. So just having now taken the time to refresh your memory by looking at what you said in paragraph 12 and then having a look at that letter, go back to the question you were asked. So the drawing – the drawings that you were shown, which is exhibit 8 and particularly the second page HA01, would that have been one of the drawings you were referring to when you made those comments about the Thirkell scope of works? Mr Gilboy Yes, very much so. 244 T.2-40 Line 36 to T.2-41 Line 42. -- 72 of 140 -- 73 [308] It was thus without doubt that, notwithstanding the earlier assertion by Mr Gilboy that the Thirkell Scope of Works to which he was referring was not that shown in Ex. 8, it was in fact that document. [309] That then leads me to Mr Ainsley’s evidence.245 His ‘report’ is also somewhat confusing. He also refers to a Thirkell report. In his ‘statement’ he says that this is in respect of a Thirkell report dated May 2019 “specifically in relation to the guttering and downpipes”.246 But, he then refers to his ‘report dated 7 April 2020’ wherein he states it to be written “in response to the Thirkell Engineers rectification report on … 18/2/2020, 247 a copy of which appeared at Annexure TMK-29 to the statement of Mr Timothy Kelly.248 He does not make any reference to the Thirkell documentation of August 2019 to which Mr Gilboy referred. [310] In my opinion, on any proper reading of Mr Ainsley’s written evidence, he was not referring to the earlier May 2019 report by Mr Thirkell, but rather it was the report of February 2020. The reason I draw this conclusion is that the earlier report did not contain any reference to downpipes or gutters, the latter being the occasion in which there was a detailed reference to same together with a relatively large number of photographs, and that it is copies of those photographs that appear in Mr Ainsley’s report. [311] However, notwithstanding his reference to that later Thirkell documentation, Mr Ainsley then provides some costings which, as was confirmed by Mr Ainsley in answering a question by me following re-examination are in respect of the proposed solutions by Mr Gilboy,249 namely installing a larger gutter around the pool area with an overflow, or alternatively a larger gutter to the whole house. It is these costings which the applicant’s Counsel appears to be referring to in his closing submissions.250 [312] To the extent those costings are apparently relied on by the applicant, it must be noted that they are incomplete in that they do not include any amount for labour, although the number of labour hours is shown therein, and it is unclear whether margin is included or excluded. On these issues, under cross-examination Mr Ainsley stated that an applicable hourly rate would be $80 all up, and that a margin of 10 to 15% on materials would be appropriate.251 Thus, applying the hourly rate and the higher % margin to the costings by Mr Ainsley therein, the results are: (a) Cost to change to larger gutter around pool and install overflow - $1,083; and (b) Cost to install larger gutters to the whole house - $4,223. [313] This is the extent of the ‘costings’ Mr Ainsley has included in his report. He does not address costing of the box and/or valley gutter issue anywhere therein, nor was the costing of same raised with him during cross-examination. [314] I do not accept the submission for the applicant that Mr Boyle’s opinion of reasonable cost for the Item 11 – ‘Roof Sheeting, Flashing and Downpipes’ remedial work of 245 Ex. 4. 246 Ex. 4 para 6. As I understand that reference it is to Mr Thirkell’s first report dated 15 May 2019, a copy of which appears at Annexure TMK-21 of Mr Timothy Kelly’s statement, being Ex. 1 pg 231. 247 Ex. 4 pg 11. 248 Ex. 1 pg 297. 249 T.2-27 Line 22. 250 Ex. 25 para 92. 251 T.2-20 Lines 34 to 46. -- 73 of 140 -- 74 $2,899.28 is supported by the evidence given by Mr Ainsley, and accordingly this amount should be preferred. Put simply, it is not. Firstly, Mr Boyle’s figure is a very specific number and I am unable to ascertain from the evidence before me the detail of that calculation number so as to consider it in comparison to Mr Ainsley’s somewhat detailed calculation. When questioned on it in cross-examination, it got no higher than the following exchange as it occurred between Counsel and Witness. Mr Kissane Now, where have you drawn that calculation from? The calculation for that figure. Mr Boyle I’ve shown that calculation by working out the additional downpipes, the extension to the spreader, the additional downpipe to the boat garage, additional graded pits and the work to the box gutter. Mr Kissane You mentioned the word to the box gutter. So is that different to the work that you have costed at item 12? Mr Boyle Sorry, no, it doesn’t include the box gutter. The box gutter is included separate at $2,000. Mr Kissane Did that include a cost for labour? Mr Boyle That included a cost for labour. [315] I contrast all of this to Mr Thirkell’s figure of $5,311.50 inserted in the Joint Expert’s Report. Earlier in these reasons I referred to the figures he includes in his Appendix Q to his report and the purported supporting invoices. As I have already noted it, the difficulty I have is in being able to reconcile the figures in that Appendix Q and his figure of $5,311.50. Nor am I able to identify in any way the basis upon which he opines the cost of $19,800 for Item 12 – Box and Valley Gutters line item in the Joint Experts Report. The only place this appears in his report is a single line item on page 2 of Appendix Q which is described in the following manner Roofing work not completed to date plus the provision of compliant box gutter - $19,800 [316] The respondents’ Counsel makes this submission in summing up these issues.252 The Tribunal should accept Mr Thirkell’s evidence on the costs to rectify which appear at page … of Appendix Q to Exhibit 16. Clearly, the Builder’s work is defective and requires rectification. The Owners should be allowed the costs to rectify this aspect of the works. [317] I agree with the last of those two submissions. There can be no doubt that the work is defective. Mr Gilboy’s evidence as I have referred to it in paragraph [303] herein given for the applicant identifies it as such. Moreover, I accept it as being evidence of what is reasonable in terms of remedial action. However, I do not agree with the former. I am simply not persuaded in any way by Mr Thirkell’s opinion of that which is said to have been, or is still required to be, done to remedy the defective work, nor am I persuaded by his record of costs incurred, or his opinion on costs to be incurred. They are simply unexplained and without substance. 252 RWCS – para’s 191 and 192 relative to Roofing, being sections 4.11 to 4.15 of the Thirkell Report, and para’s 196 and 197 relative to Box Gutter and Valley Gutter, being Section 4.16 of the Thirkell Report. -- 74 of 140 -- 75 [318] For these reasons, I find as a fact that the work covered by the reference to ‘Item 11 – Roof Sheeting, Flashing and Downpipes’, ‘Item 12 – Box and Valley Gutters’, and ‘Item 18 – Cupping and Fixing of Roof Sheeting’ as it appears in the applicant’s Counsel’s closing submissions, and ‘Roofing (Thirkell Report 4.11 to 4.15); and ‘Box gutter and valley gutters (Thirkell Report 4.16)’ in the respondents’ Counsel’s closing written submissions, is defective and required rectification. [319] That then leaves the question of the quantum of the reasonable cost of reasonable rectification. Overall, it seems to me that Mr Gilboy’s proposed solutions, and in turn Mr Ainsley’s costing and Mr Boyle’s costing are more reasonable. To that end, I prefer the more detailed costing of Mr Ainsley to the extent he has addressed the issues, and where he has not, I accept Mr Boyle’s costing particularly given that he readily conceded the appropriateness of some additional costing. On that premise, my finding as to the reasonable cost of rectification is as follows: (a) For ‘Item 11 – Roof Sheeting, Flashing and Downpipes’, it is $4,223 applying the higher of the alternative costings of Mr Ainsley as I have concluded them to be in paragraph [312](b) herein; and (b) For ‘Item 12 – Box and Valley Gutters’ together with ‘Item 18 – Cupping and Fixing of Roof Sheeting’ it is $4,000 applying the costings of Mr Boyle as I have noted them in paragraph [301] herein. Underground / External Drainage [320] As I understand the contest between the parties, this issue is related to the issues just addressed under the last heading, and it is appropriately summed up as follows: (a) For the respondents, as it appears in their Counsel’s closing written submissions. The underground drainage installed by the Builder was in adequate (sic ). … The installed system had 100mm diameter pipes that were unable to handle a 1:20 year event. This system was constructed by the Builder to discharge all of the water captured by the roof catchment area. As both Mr Gilboy and Mr Thirkell agreed, this was well under capacity. The drainage constructed could only handle a 1:5 year event. Whereas (sic ) it needed to be able to satisfy the performance criteria for a 1:20 year event for the purposes of the BCA and the relevant standards. While it was possible for there to have been an alternative solution which would have permitted the excess water to be discharged via secondary pathways to the legal point of discharge, this was not how the drainage system was constructed by the Builder. … Clearly this aspect of the works was defective on any view. … Further, during the course of undertaking the rectification works further defects were identified. Mr Thirkell noted that the plumbing contractor uncovered further defects which included a Y junction in the underground drainage that joined two 100mm diameter pipes into a single 100mm diameter pipe and also examples of where the pipes that were -- 75 of 140 -- 76 installed were not graded appropriately such that they were able to discharge the water from the system leaving water sitting in the pipes.253 (b) For the applicant, as it appears as a statement attributed to Mr Boyle in the Joint Experts’ Report.254 I agree with Mr Thirkell that the provisions for external drainage provided by the [applicant] was inadequate. I prefer the remedies offered in the Statement of Gregory John Gilboy dated 28.4.2020. Paragraphs 18 and 19 of that report detail the adequacy of the installed system. [321] Mr Thirkell’s report on this issue is extensive in its detail, therein expressing in conclusion that the work has been done and no further work is required.255 There is also the ‘Scope of Works’ drawings he prepared which is partly related to this issue, such being Exhibit 8, that being the drawings to which Mr Gilboy has referred in the preparation of his ‘report’ to the applicant prior to termination of the contract as I discussed under the last heading. In addition, in the Joint Experts’ Report Mr Thirkell states that the cost of rectifying this work is $34,531.35and that it has been paid for. [322] In contrast, despite Mr Boyle stating that he agrees that the work as constructed by the applicant was ‘inadequate’, marking the Joint Report as to his agreement it is ‘defective’,256 and preferring the remedies offered by Mr Gilboy, Mr Boyle does not express any opinion as to the costs of remedial work, inserting ‘Nil’ in the costs column of the Joint Experts’ Report. [323] In my opinion the majority of that which I have said in terms of the last issue and the confused and confusing nature of much of the evidence similarly applies here. I need not repeat it. That being said, given the references Mr Boyle makes to paragraphs 18 and 19 of Mr Gilboy’s statement once again it seems to me that is the proper place to start, and accordingly I extract those paragraphs here.257 18. On review of the inground drainage system a single 100mm pipe taking collected roof water from the roof and discharging to the rear stormwater easement alone will not cope with the litres/second volume that it needs to effectively remove the stormwater from the system. However, the grated surge pits installed in this pipe section do create relief points, provided that the secondary drainage paths (the surface) can be established and maintained to remove the extra water that exists the underground system that the single 100mm diameter pipe can’t cope with. 19. At the time of my inspection the secondary drainage paths were adequate to remove any extra water. Under current code required, gutters and downpipes are sized to 1:20 year storm events, with inground drainage systems designed to cope with 1:5 year storm events resulting in reliance on maintaining the secondary drainage paths for the system to operate compliantly. 253 RWCS para’s 198 to 202, and 204. 254 Ex. 15 Line item 13. 255 Ex. 16 section 4.17 which traverses pages 21 to 24 plus photos. 256 See Ex. 15 Line Item 13 under the Column ‘Incomplete or Defective Work’ Mr Boyle has inserted A as an agreement to Mr Thirkell’s insertion of D as being the work is defective. 257 Ex. 7 para’s as noted. -- 76 of 140 -- 77 [324] There was also an extensive cross-examination of Mr Gilboy on this issue which in my opinion was very informative. Following on from a discussion regarding the gutters and downpipes, the following extensive exchange occurred between Mr Gilboy and the respondents’ Counsel.258 Mr Kissane And you identify that there was essentially deficiencies in – in the – the drainage coming off the roof. Mr Gilboy In the gutters and downpipes, yes. Mr Kissane Yes. Yes. Now, the system that’s ins – that was installed there when you went and inspected, the downpipes fed into the underground drainage system. That’s right, isn’t it? Mr Gilboy That’s correct. Mr Kissane Yes. And – and so the capacity that’s contained within that underground system, do you agree that that was insufficient to address the – the drainage that came off the roof? It couldn’t handle the volume which – which it was required to for a one in 20 year event. That’s right, isn’t it? Mr Gilboy For a one in 20 year event ... that’s correct. Mr Kissane Yes. And so – now, where you depart from Mr Thirkell’s proposed solution is that your solution was that rather than upgrading the underground pipes which was at 100 mil, you would – in addition to – to dealing with the roof guttering and downpipes, you would also put in a system whereby the excess water that couldn’t be handled would be dealt with by way of overland flow or surface – it would become surface water and then it would be – pass out of the property? Mr Gilboy Correct. … So what happens is in a downpipe design when you have a system for the roofs, you actually calculate the roofs at one in 20 … an overflow system at one in 100 and the inground drainage system at one in five. So under the – under the code, the drainage system that normally operates in the ground actually isn’t efficient in its – in its capacity by general design, so you use the surge pits that we put in in the ground – in the drainage system to allow it to surge up and then that overland path which is called a secondary drainage path to then take that excess water away. Mr Kissane All right. So when you say in relation to which – which – is it one in 20, one in five or one in 100 is it deficient? Is it the one in – one in five year … Mr Gilboy One in five is actually … what the drainage system in the ground is normally designed to. Mr Kissane Yes. But this – this one didn’t – there was a shortfall, was there? 258 T.2-35 Line 26 to T.2-37 Line 45. -- 77 of 140 -- 78 Mr Gilboy No, not for a one in five. … For a one in 20 when you asked the question. Mr Kissane One in 20? Mr Gilboy That’s correct. … But not for a one in five. Mr Kissane Yes. So, in essence, the system would be, for the purposes of the one in – one in 20, it would handle the – the overflow and I use that term in – in the – from a – in all – from a lay person’s perspective, but you can no doubt correct me, that excess water would be dealt with by – on – on the surface? Mr Gilboy Correct, yes. Mr Kissane Yes. And you refer to that as a secondary path; is that right? Mr Gilboy A secondary drainage path, yes. … So the primary system being the underground pipes system … and the secondary drainage system … the overflow system. Mr Kissane Now, when you attended – when you came to the property, did you observe a designed secondary path? Mr Gilboy The landscaping wasn’t finished at that stage when I visited the site. The pits that were the surge pits weren’t completed and the pipes actually came out of the ground. So the finished levels throughout that site, I believe, weren’t done at that stage. Mr Kissane Yes. Now, ordinarily, would you – to control that water that you would – you would expect that that secondary – water flowing down that secondary path would need to be controlled in some fashion. That’s right, isn’t it? Mr Gilboy Yeah. It’s got to actually have a path off the property … towards the lawful point of discharge. Mr Kissane Yes. And some – some ways in which that might be achieved would be using a swale? Mr Gilboy Correct. Mr Kissane Using some form of concrete guttering? Mr Gilboy Correct. Mr Kissane Installing some below ground aggregate, some system like that? Mr Gilboy Yeah, you could do that. Mr Kissane Yes. But none of those were installed when you were there? Mr Gilboy Not at that stage, no. Mr Kissane And did you return to the property after that? Mr Gilboy No, I’ve only visited … the property once. Mr Kissane So is it correct to say then there was no secondary – there was no system in place when you observed the property that -- 78 of 140 -- 79 controlled a secondary path out of the property to a legal discharge? Mr Gilboy No finished system. Mr Kissane Right. So what was present then? Mr Gilboy So the – the location of the pits were actually off those paths and were in the landscaped areas that could be shaped to the rear easement. Mr Kissane So they could’ve been shaped? Mr Gilboy Yes. Mr Kissane Yes. And when would that usually occur in your experience? Mr Gilboy At the – just the last week before the property is handed over, generally. … Mr Kissane Yes. So you’d expect that there would be something in place before the handover of the property to the clients? Mr Gilboy That’s correct. Discussion [325] In my opinion, this series of questions and answers establishes clearly, that on the applicant’s own witness’ evidence, there can be no debate that the applicant had not completed the work in question such that it fell within the category of being completed subject only to a ‘minor defect or minor omission’. This is despite its insistence that the entirety of the work had reached practical completion. I return to this a bit later in these reasons when I discuss the question of whether practical completion was achieved so I will not address the evidence on that aspect of it here. [326] That being said, as to the question of whether it is defective work, in my opinion it can be disposed of with very little discussion. [327] Mr Gilboy’s evidence is that the extent and nature of work proposed by Mr Thirkell to deal with the asserted lack of adequate drainage on the site, and that the respondents have had done seemingly on his advice, was not required. But it does not mean it was not required at all such that the work could not be considered defective. On Mr Gilboy’s own evidence, it was incomplete but there was a more economical and viable solution available that met the code requirements in contrast to the solution proposed by Mr Thirkell. Moreover, as I will discuss later in these reasons on the issue of practical completion as I have just averted to, it is abundantly clear it was not done. Critically, as Mr Gilboy answered it on the questioning of the respondents’ Counsel, the shaping of the secondary pathways and the placement of swales, concrete guttering, or below ground aggregate, should all have been done before handover of the house to the respondents. [328] In the premise of this evidence, I find as a fact that the work the subject of ‘Item 15 – External Site Drainage’ as it is referred to in the applicant’s Counsel’s written closing submissions, and ‘Underground/external drainage (Thirkell Report 4.17)’ as it appears in the respondents’ Counsel’s closing written submissions was defective in that it was -- 79 of 140 -- 80 incomplete and thus required work to be performed on it after the contract was terminated. [329] That then of course leads to the question of the cost of that rectification. It is not so simply to enable it to be quickly disposed of. [330] As I have noted it earlier, in the Joint Experts’ Report Mr Thirkell states this amount to be $34,531.55.259 However, that figure does not appear anywhere in his report tendered as the respondents’ expert evidence in this proceeding.260 Nor does he in any way explain in the Joint Experts’ Report how that figure has been calculated. [331] The applicants’ Counsel submits that in seeking payment of that amount, the respondents are relying on Appendices Q3, Q4, Q15, Q16, and Q19.261 These appear as separate line items in the tabulation of the individual sub-appendices on the first page of the cumulative Appendix Q. However, the cumulative quantum of those five line items is only $28,966.08. But using that as a starting point, it appears to me that the figure shown by Mr Thirkell might also include the line items Q7, Q10, Q11, and Q12. With the addition of those line items to the one noted by the applicant’s Counsel it gets to a cumulative figure of $34,531.55, which is at least equates to the figure stated by Mr Thirkell and thus I infer it must be the correct calculation. [332] I should also note that on the description given by Mr Thirkell for each of these line items in the cumulative Appendix Q, the work the subject of them covered concrete cutting and removal of same, removal and replacement of the glass balustrading (which I understand to be the pool fence), and plumbing works described as including excavation, drainage, stormwater pits and downpipes. As I read Mr Thirkell’s report, his ‘scope of works’ document of August 2019, and having listened to him under cross-examination, I accept as a fact that this is descriptive of the work in question for rectifying this defective item of work. [333] All that being so, before going further it seems to me it would be helpful to any reader of these reasons that I set out here those line items, in part,262 as they appear in the cumulative Appendix Q. As will observed should one undertake their own calculation, the cumulative total of these line items is $34,531.55. Ref Contractor Description Total Q3 JPM & Sons Concrete Constructions Pty Ltd Supply materials and labour to set up and place and finish exposed agg pathways around house. Match existing concrete $13,038.08 Q4 Breakthrough Group Concrete cutting, labour and dumping $9,053.00 Q7 ELH Construction Pty Ltd Balustrade Reinstatement $378.99 Q10 ELH Construction Pty Ltd Removal of Glass Panels $605.00 Q11 ELH Construction Pty Ltd Labour $3,976.50 259 Ex. 15 Line 13. 260 Ex. 16. 261 Ex. 25 para 103. 262 For simplicity I have excluded the columns entitled ‘Date’, Invoice Number’, ‘Amount’, and ‘GST’. -- 80 of 140 -- 81 Ref Contractor Description Total Q12 ELH Construction Pty Ltd Reinstalled glass pool panels, supplied cover plates, installed fixtures in salon $604.98 Q15 Dan McCall Plumber Plumbing – Excavation, Drainage System, Stormwater Pits and Downpipes for Gutter $5,599.00 Q16 Dan McCall Plumber Completion of plumbing works – Downpipes and Stormwater $1,100.00 Q19 Pisces Labour to saw cut concrete, jackhammer out trench for future storm water drains – this is prior to blockwork being installed at front left hand perimeter fence. $176 [334] Mr Thirkell was cross-examined at some length on some of these line items and the invoices which appear in his report said to be evidence of the work having been done and its cost.263 As I followed this line of cross-examination, that which became very clear to me was that whilst Mr Thirkell had some knowledge of these contractors being involved and the work they did, it was not firsthand knowledge but rather that passed on to him by others, and he was not entirely clear on what had been done by whom. But more importantly he did not at any time see a contract for the work said to have been done, nor in any way check the correctness (in terms of a contract) of the claimed amount. [335] Moreover, and critically in respect of his evidence in this proceeding, he did not consider nor opine in any meaningful manner as to the reasonable value of such work in terms of the claimed amount. The following exchange between the applicant’s Counsel and Mr Thirkell concerning Line Item Q15, a line item on which I will comment again shortly, during cross-examination is indicative of that. Mr Eylander Now, Mr Thirkell, I’ll now take you to Q15. This is an invoice from Dan McCall Plumbing dated 23 December 2019, invoice … and it says, “80 per cent of original estimate, completion of excavation in ground works with some extra works.” Now, how did Dan McCall Plumbing come around to being the successful tender? Mr Thirkell He would have provided, I guess, the best estimate on the phone, and he was available. There was a number of plumbers called. Mr Eylander Did you make note of the other plumbers and what their estimates were? Mr Thirkell No. Mr Eylander Now, this invoice is to yourself? Mr Thirkell Mmm. 263 For Q3 see T.3-56 Line 13 to T.3-58 Line 11; For Q4 see T.3-58 Line 13 to T.3-61 Line 12; For Q10 see T.3-61 Lines 14 to 33; For Q 11 see T.3-61 Line 35 to T.3-62 Line 8 and T.3-63 Line 45 to T.3-64 Line 2; For Q7 see T.3-62 Line 10 to T.3-63 Line 23; For Q12 see T.3-63 Lines 25 to 39; For Q15 see T.3-64 Line 28 to T.3-65 Line 16; For Q16 see T.3-65 Lines 18 to 23. -- 81 of 140 -- 82 Mr Eylander Did you pay this invoice? Mr Thirkell No. Mr Eylander What did you do with this invoice? Mr Thirkell Passed it on to Theo. Mr Eylander Did you sight a contr – a written contract from Dan McCall Plumbing? Mr Thirkell No. Mr Eylander So when it says 80 per cent of original estimate, how did you know it was 80 per cent of the original estimate? Mr Thirkell It was provided to me over the phone. Mr Eylander But you were doing contract management, recording prices. Mr Thirkell I was recording … Mr Eylander In a schedule? Mr Thirkell Mmm. Mr Eylander You didn’t check whether these prices were accurate? Mr Thirkell That’s a discussion. That – they were discussed with Theo, so whatever the prices were from who, I can’t recall everybody, all the contractors and all their prices, but it would have been discussed with Theo, Theo would have made the decision to go ahead or not. [336] The discussion regarding Line Item Q 11 is also indicative of the difficulties with Mr Thirkell’s purportedly expert evidence. It will be recalled as I noted it in paragraph [296] herein, Mr Thirkell stated that this line item was to do with roof plumbing works. The discussion was as follows which seems to be in line with that statement.264 Mr Eylander Now, the next document, appendix Q11, it’s again to ELH Construction Proprietary Limited, billed to George Thirkell for an amount of $3976.50. … And that invoice is broken down into a number of sections: material costs plus 15 per cent profit margin, labour and hours for a number of days. What’s that invoice in relation to? Mr Thirkell Okay. That would relate to works carried out as per my drawings on the rectification – so his tasks were to rectify all roof leaks for the wet season, which was December, January, February, so immediate tasks; re-scribe ridges, I believe he re-scribed a hip flashing; he would have – he would have screwed down some roof sheeting over the boat shed that was wavy and not tied down, and that was an 264 T.3-61 Line 35 to T.3-62 Line 8. -- 82 of 140 -- 83 immediate task; and instal additional downpipes and – amongst other things, but that’s just something I can recall. Mr Eylander Do you recall any other work? Mr Thirkell There may have been and – but I’m – I’m just giving you what I remember. [337] I pause here to make one observation about the answers given by Mr Thirkell. He states that the work done to the roofing would have been as per his drawings. However, as I have noted it earlier in these reasons the only drawings shown to have been produced by Mr Thirkell are those that became Exhibit 8 in this proceeding. None of those drawings show any such work being required to the roof in the manner described by Mr Thirkell as I have just mentioned. Yet again, this is an example of the inadequacy of Mr Thirkell’s evidence. [338] There was a return to Line Item Q11 again shortly thereafter in the cross-examination wherein the following was the discussion.265 Mr Eylander … There’s also appendix Q11, material costs plus 15 per cent profit margin and labour totalling $3615. What are these bundle of invoices for? Are they all to remove and reinstall that glass pool fence? Mr Thirkell No, well, Q11 we went through. That’s the roofing and guttering. [339] Whilst it thus seems clear that on Mr Thirkell’s view Q11 is work to the roof plumbing issue, as I have explained it on my reading of his report and the Joint Experts’ Report it is entirely unclear that this amount is included in the total given for that work in the Joint Experts Report, either in whole or in part, yet it appears to me to have been included in the calculation of his total in the Joint Experts Report for the drainage issue. A similar statement can be made concerning Q15 and Q16. [340] Related to this is the confusing nature of that which is said to evidence line Item Q9. As I observed in paragraph [291] herein, notwithstanding that Mr Thirkell described it in his cumulate Appendix Q document as being for ‘Roof Plumbing and rectification of roof sheeting and flashing’, the invoice is described as being ‘Pool glass panels installed – final payment’. 266 [341] The following exchange between the applicants’ Counsel and Mr Thirkell, which immediately followed Mr Thirkell’s confirmation that Q11 was for ‘roofing and plumbing’ works, is relevant to that issue and, in my opinion, essentially sums up the confusion.267 Mr Eylander Okay. We still have 7, 9, 10 and 12 talking about glass pool panels? 265 T.3-63 Line 45 to T.3-64 Line 2. 266 I pause here to make this observation. If I was to swap Q9 and Q11 in the calculation of the totals for the ‘Roof Plumbing’ and the ‘Drainage’ works, not only would it increase the cumulative total for the Drainage works beyond the total given by Mr Thirkell, the total does not match his total for the Roof Plumbing work. 267 T.3-64 Lines 4 to 26. The $3,411 to which Mr Thirkell refers is for Line Item Q9 described in the cumulative Appendix Q document as being ‘Roof plumbing and rectification of roof sheeting and flashing’. -- 83 of 140 -- 84 Mr Thirkell I’m just looking at the dates so I can understand it. I again say I did not instruct ELH directly to do these tasks so I’m looking at the invoices on face value. So if we look at it logically, in the earliest invoice he must have removed the existing pool fence. I’m saying that logically. In February there’s a larger invoice of $3411, as you say. So, obviously, it would take more to reinstate the glass pool fencing with its posts, because the posts would have had to be re- established in the concrete – in the new concrete – as it was originally taken out to redo the concrete, and obviously do drainage. Maybe there is a larger costs in reinstating it with new posts and new footings, and that was happening in – well, this is dated 16th of February. This one in April, I really can’t recall why, if it was reinstated in February – maybe there was something that had to be done later, but I can’t recall. I don’t know. Mr Eylander Mr Thirkell, you just don’t know, do you, what they did? Mr Thirkell I know – well, I didn’t make the instruction, but I saw the work completed. Mr Eylander And you didn’t sight a contract – a written contract, I should say? Member I think that’s been made clear, Mr Eylander. Mr Eylander Yep. Mr Thirkell No. [342] From this exchange, and the confusion that reigned throughout Mr Thirkell’s evidence, both his report and his answers given under cross-examination, I form the conclusion that Mr Thirkell simply did not know what work was done in its entirety and in many, possibly all, cases he simply took the invoices he was provided with, in his own words ‘on face value’ and ‘recorded’ them as his purportedly independent expert opinion evidence. [343] All this having been said, as I have stated previously in these reasons, Mr Thirkell’s evidence is simply of no real value in terms of this issue when it comes to the question of reasonable value of the work. That being so, in all respects the respondents have failed to meet their evidentiary burden in this regard. There is also the fact that there is nothing at all from Mr Boyle as the applicant’s expert in terms of evidence as to reasonable value. He has ascribed Nil to it in the Joint Experts’ Report, and as he confirmed during the giving of his evidence where he ascribed Nil it is to be read as he has not considered it.268 [344] That being so, there is simply no evidence before me that in any way carries weight sufficient for me to reach a finding on the reasonable value of the requisite remedial works, that being so whether I was to accept Mr Thirkell’s proposed scope of rectification or Mr Gilboy’s proposal. This is so notwithstanding my finding that the work was defective. 268 T.2-90 Line 22 to T.2-91 Line 10. -- 84 of 140 -- 85 Roof Awning [345] The respondents’ complaint is that there is not an awning constructed over the BBQ bench at the pool terrace area such that rainwater can fall on to the BBQ, the range hood over it, and the cabinetry work. They claim $11,000 to rectify this. [346] Neither Mr Kaminaras nor Mrs Kaminaras gave any specific evidence on this issue, however there was the video presented by Mr Kaminaras which did show, during that event, water did overflow the roof gutters on to the BBQ as well as onto the rangehood and cabinetry.269 However, as I understood it, the presentation of that video was for the purpose of showing the inadequacy of the guttering to the roof and the associated roof drainage, that being the subject of other issues to which I have already referred, not specifically in terms of the need for a roof awning, although I accept on face value they are related issues. Otherwise, the respondents appear to be entirely reliant on that which Mr Thirkell has to say about it. [347] That is very little in terms of his evidence in this proceeding. I will comment on that shortly, but before doing so it is convenient to note that which the applicant had to say about this issue in its evidence. [348] That evidence is relatively sparse in its substance, albeit not in content. It is from Mr Timothy Kelly and Mr Boyle. [349] Whilst Mr Kelly comments at some length on that which Mr Thirkell has stated in his draft February 2020 report, in my opinion he says only one thing of substance. The Thirkell report and the Respondents’ position also fails to note that an awning over the barbecue/patio would have been a variation to the Contract, and it was not part of the original scope of works.270 [350] Mr Boyle’s evidence is succinct. In reference to that which Mr Thirkell states at paragraph 4.15.4(iii), he says this. This may be a design solution however is clearly additional work currently not included in the contract. There is no need I am aware of to have an external barbeque area weatherproof. 271 [351] In the ‘reasons’ attributed to him in the Joint Experts’ Report, Mr Boyle also says this. This item is beyond the scope of the contract and therefore has no relevance. If it were to be included in the contract it would require an agreed and signed variation to the contract.272 [352] I thus return to the respondents’ evidence. [353] A copy of Mr Thirkell’s draft report of February 2020 as was referred to by Mr Kelly appeared in Mr Kelly’s statement,273 but as I have noted it such is not evidence given by Mr Thirkell. Whilst Mr Thirkell referred to that earlier document in his expert report given in this proceeding, that being his June 2020 report, he simply did so as a 269 Ex. 24. 270 Ex. 1 para 139. 271 Ex. 14 para 82. 272 Ex. 15 Line Item 15. 273 Ex. 1 Annexure TMK-29. -- 85 of 140 -- 86 statement of fact as to the existence of that earlier report.274 He did not expressly adopt it as part of the later report nor at any time state that his opinions therein remained current and were to be read as part of the June 2020 expert’s report. Notwithstanding that, it is identified as a separate item in Joint Experts’ Report.275 In the notes attributed to Mr Thirkell therein, this item is recorded as being an ‘Incomplete’ item, with the cost to complete the work being stated at $11,000, and the ‘Reasons’ given as follows: This item is a remedy to an inadequate gutter system (refer item No. 18 below) that causes rainwater to overflow the eaves. … [354] The only reference to this issue in Mr Thirkell’s expert’s report is at para 4.15.4 (iii) which appears as part of the item ‘Roof Drainage – Gutters & Downpipes’,276 wherein he states the following. The design that places the electrical rangehood and cabinetry under the eaves is poor. … The addition of a roof awning is appropriate to weatherproof the barbeque on the patio. [355] He then concludes his report on that item with the following statement No further work is required.277 Discussion [356] I have already dealt with the Roof Drainage & Gutter issue at some length earlier in these reasons and made my decision on that issue in its entirety. I need not repeat that which I say there, but it seems to me that on the respondent’s own expert’s evidence the extent to which that issue has been dealt with should have also dealt with this issue. That is in effect what Mr Thirkell is saying. As I have noted it, he states with clarity, ‘No further work is required’ such which must include the need for a roof awning given that he says all work is done to deal with the roof drainage and gutter issue. Such is also consistent with that which he says in the Joint Experts’ Report, namely that the item is a remedy to an inadequate gutter system. From the totality of Mr Thirkell’s evidence, the only conclusion that is open to draw from that statement is that if that inadequacy has been remedied by other means, then the awning is not required. [357] However, if I am wrong on my reading of his report, I note that which both Mr Kelly and Mr Boyle have had to say about this item. I agree with them. Whilst I will agree that the design placing a barbeque, bench and rangehood under eaves without further additional protection in the event of a large rainfall and overflowing gutters is not ideal, such as is depicted in the video, it is the design that appears on the contract drawings. That design did not require the construction of an awning. Thus, if one was to be constructed it would be a variation to the contract. There is no assertion by the 274 Ex. 16 para 3.4. 275 Ex. 15 Line Item 15. 276 Ex. 16 Section 4.15. 277 Ex. 16 para 4.15.8. I pause here to note that in his written closing submissions, at the heading to paragraphs 208 to 211 which addressed this issue, the respondent’s Counsel noted the reference to the Thirkell Report as being sections 4.15 and 4.17, the latter being the item for ‘External Drainage Channels and Stormwater Pits’, however whilst it is a related issue as I have discussed it earlier in these reasons, I do not read any part of section 4.17 as addressing the need for a roof awning. However, even if it does in some way relate, Mr Thirkell also notes therein at para 4.17.8 “No further work is required”. -- 86 of 140 -- 87 respondents that they instructed and agreed to such a variation that was not performed by the applicant. [358] In all respects, for the reasons I have just given, I am unable to find as a fact that the asserted need for, and absence of, a roof awning over the barbeque bench can properly be described as defective work. Either the ‘defect’ complained of has been remedied by other means, such in effect being the evidence of the respondents’ expert Mr Thirkell, or the requirement for it was not part of the contract. Garage Door Sensors [359] The Respondents abandoned their claim regarding this issue.278 I have not had further regard to it. Cleaning [360] It is common ground that the respondents are entitled to $1,100 for the cost of a ‘builder’s clean’ at completion of the works as part of their counterclaim.279 Electrical Solar Panels [361] There is confusion on this issue. [362] In its closing submissions, the applicant asserts that this issue is in respect of alleged damage to a solar panel.280 The source of that assertion is not known to me as it does not appear within any of the material that is before me that I can readily identify. [363] As I understand the respondents’ complaint, it is that the installation of the solar panels was not carried out in accordance with current codes or practice. This is premised on Mr Thirkell’s opinion as he expresses it in his Expert’s Report, namely that all DC cables are to be secured and not resting on the roof, conduit penetrations are to be glanded, all cables and fixings are to be stainless steel, and further investigations to be carried out with any other defects identified rectified.281 There is however no complaint that the solar panels are damaged or inoperative. [364] Mr Thirkell’s evidence is premised on a third party’s account of what was observed, namely a Mr Sean Callard who apparently inspected the installation and sent an e- mail to Mr Theo Kaminaras dated 10 June 2020 which provided a number of photographs with ‘red circles’ added to them showing the asserted defective work. Mr Thirkell has simply then adopted this as his ‘opinion’.282 This is again an example of the inadequacy of Mr Thirkell’s report as an expert’s report. [365] Mr Callard was not called as a witness. His evidence is pure hearsay and thus has limited to nil weight. [366] Mr Meredith gave evidence on this issue for the applicant. 283 In his statement he says he has considered the report of Mr Thirkell in regard to this item and in particular the photos of the work therein. In response to what is said therein, Mr Meredith’s stated: 278 Respondents’ closing written submissions – para 217. 279 Ex. 25 para 118; RWCS para 218. 280 Ex. 25 – para’s 105 to 110. 281 Ex. 16 – para’s 4.18.4 and 4.18.8. 282 Ex. 16 – para 4.18.3. A copy of that e-mail appears in Appendix M to Ex. 16. 283 Ex. 13. -- 87 of 140 -- 88 We completed the solar installation in accordance with the current electrical and solar standards. I have attached and marked “B” photos taken of the completed installation on 16 April 2019 which shows the installation was carry (sic) out in accordance with the relevant standards. … We also requested the Electrical Safety Office to carry out an electrical inspection of the entire electrical and solar installation of the property. No defects were located by the electrical safety officer. As far as I am concerned the electrical and solar installation and the panels were installed correctly and were not damaged at any timer (sic) during or after installation certainly at least up until 11 July 2020.284 [367] It is entirely unclear why Mr Meredith refers to the date of 11 July 2020. It is also purely hearsay as to the inspection by the Electrical Safety Office. To that extent his statement does not assist me. However, notwithstanding those aspects of his statement, as I have noted it in paragraph [65] herein Mr Meredith impressed me as a witness. The cross-examination and re-examination of him was short and succinct taking only 10 minutes and not venturing off into unnecessary territory.285 As to the allegedly defective work which is identified by the red circles on the photographs in Mr Callard’s e-mail referred to above, and the need for glanding and stainless steel cable ties, Mr Meredith’s responses were direct. [368] His oral evidence was that whilst he accepted the proposition that it was possible the work as shown in those photographs was the same as it was when his company completed the work, he expressed doubt that this would be so. As to the issue of the need for glanding of the cables where they penetrate the roof, he said this was dealt with by the use of a proprietary product known as a ‘Dektite’ which he described as a “rubber membrane that is designed specifically for bringing objects through the roof”. As to the need to use stainless steel cable ties, his answer was “Its a requirement now under the Solar Act that you must … use metal stainless steel cable ties. It wasn’t at the time of that installation in 2019.” [369] He did however admit that he would prefer to see some better workmanship from his staff than what is shown in the photos stating the following Well, the conduit comes through the roof sealed properly with the Dektite and then it continues on underneath the solar panel. And it looks to me … like a DC cable’s coming out of that conduit, and it’s taped up at the end. I would rather prefer to see that – under the new legislation, that’s got to go all the way to an isolator now, and that’s where the gland comes into play. You actually put a gland on the end of the conduit into the bottom of the isolator to seal – to weatherproof seal the isolator, not the penetration through the roof. And – but at the time, that rule wasn’t applied, but I would have liked to see better workmanship than that from my staff. 284 Ibid – para’s 8, 11, and 12. 285 T.2-72 Line 10 to T.2-75 Line 6. -- 88 of 140 -- 89 [370] I accept Mr Meredith’s evidence as being correct and reflects the state of the work as it was completed by his company and thus in turn by the applicant as the contracting party. I also accept that it shows the work could be improved. [371] Whilst the applicant’s Counsel closing submission is that “liability for the damage cannot be proved”, and thus seemingly suggesting that nothing should be allowed for this item,286 as the respondents’ Counsel correctly submits Mr Boyle and Mr Thirkell agree that the solar panel installation is defective and that the total cost of $1,100 for rectification is reasonable.287 However, notwithstanding Mr Boyle’s agreement to the cost, his statement in his Expert’s Report on this issue is that “I am not qualified to comment on this item.”,288 thus I do not understand the basis upon which he can then agree to the cost of rectification being reasonable. [372] To the extent it appears premised on the complaint being damaged solar panels which I have noted is not the complaint as I understand it to be, I do not accept the applicant’s Counsel’s submission, but otherwise I do accept the submission as the complaint is not sufficiently proven. This is so notwithstanding the apparent agreement of the experts. [373] There is also a furtherance of the confusion that has led me to the conclusion I reached. Notwithstanding the respondents’ Counsel’s submission to which I have just referred, in his oral closing he informed me that he had received instructions to concede this item and that the respondents were no longer pursuing the item.289 There was however even more confusion with that submission as when I questioned the Counsel on the concession given the agreement between the experts as recorded in the Joint Report, he said he would defer to the experts.290 [374] In light of all that confusion, Mr Boyle’s statement that he was not qualified to comment on this item, and notwithstanding what I have said about Mr Meredith’s evidence, I proceed on the basis that either this item is not pressed or alternatively it is not proven, such that the ultimate conclusion I reach is that this item is not a defect. Tender and project management tasks, engineering and drafting services [375] The respondents do not raise a separate claim for this item in their counterclaim. It does however appear in Mr Thirkell’s report Appendix Q as three separate line items, each described as being “Tender and project management tasks, engineering and drafting services” for a total of $16,742 said to be for ‘Works carried out to date’, and $6,600 said to be for ‘Works to be carried out’.291 In his written closing submissions, the respondents’ Counsel captures these items within that which he submits should be the award of damages to the respondents.292 Accordingly, I have considered them as part of the respondents’ claim. [376] Save only for the evidence of Mr Theo Kaminaras that he and his wife have paid all of the invoices for the ‘Works carried out to date’,293 such obviously including the 286 Ex. 25 – para 110. 287 RWCS – para 219. This is in reference to the Joint Experts’ Report which is Ex 15 at Items 14 and 18. 288 Ex. 14 para 97. 289 T.4-91 Lines 27 to 33. 290 T.4-91 Lines 34 to 47. 291 Ex. 16 - Appendix Q. 292 RWCS – para 221. 293 Ex. 22. -- 89 of 140 -- 90 $16,742 paid for Mr Thirkell’s services, the respondents’ evidence on this issue is limited to solely that which Mr Thirkell includes in his report, being that to which I have just referred accompanied by a copy of two invoices showing as having been issued by Redgate Building Solutions PL t/as Thirkell Consulting Engineers & Building Design. I touched on this aspect of Mr Thirkell’s evidence earlier in these reasons at paragraphs [80], and [99] to [108]. Related to this is that which I note at paragraph [94] herein in terms of Mr Thirkell’s reference to such work in his earlier February 2020 report. I need not repeat all of that here and simply note it as being applicable to my decision on the respondents’ entitlement to recover this expenditure from the applicant. [377] In his report, Mr Boyle notes that part of his engagement as expert for the applicant was to consider “Whether you have any comments in response in relation to matters in the report of George Thirkell, or in relation to the matter generally.”294 Seemingly in response to that, Mr Boyle expressed these views in his report in terms of Mr Thirkell having undertaken the work the subject of this part of the respondents’ claim.295 103. From the statement of George Robert Thirkell dated 19 June 2020, I note that Thirkell Consulting Engineers and Building Design as (sic ) a trading name of Redgate Building Solutions Pty Ltd. George Thirkell is a Registered Professional Civil Engineer, Registered (sic ) number RPEQ 7279, noting Thirkell Consulting Engineers and Building Design as the Company. A QBCC Licence search confirmed that George Thirkell is the nominee (licence No. 1164409) for the licence of Redgate Building Solutions Pty Ltd which holds a Building Design Medium Rise licence No. 1211127. … 104. … 105. I believe that as a Civil Engineer it is appropriate that Mr Thirkell inspect and report on any Civil Engineering aspects of the house … 106. I believe that as an appropriately licenced Building Design Medium Rise licensee, Redgate Building and Design Solutions Pty Ltd could inspect the design of the building and provide design advice and administrative services associated with any design provided by it. 107. I believe that by inspecting, reporting on, and project managing or administering all other matters referred to in the Statement of George Robert Thirkell, Mr Thirkell undertook such work as an unlicenced contractor. 108. I note that in Section 42(3) and S 42(4) of the Queensland Building and Construction Commission Act there are limitations on the entitlement to monetary or other considerations for undertaking unlicenced contracting. …. [378] At paragraph [120] herein I extracted part of the written closing submissions handed up by the applicant’s Counsel that addressed the evidence from Mr Thirkell. It is convenient to extract again here only part of that to the extent it directly relates to the fees charged, or proposed to be charged, by Mr Thirkell for this work. 294 Ex. 14 para 6.4. 295 Ex. 14 para’s as noted. References to annexures therein are excluded. -- 90 of 140 -- 91 28. Mr Thirkell’s evidence leads to the conclusion he project managed the works performed pursuant to the counter-claim, that included the tender, contract administration, construction management services, and supervisory services. The builder relied on the ‘Submissions of Applicant – Experts’ dated 20 November 2020 filed pursuant to Direct 2 of the Directions of the Tribunal dated 18 September 2020. [379] It is the second sentence therein which is directly relevant. It has its genesis in Directions of this Tribunal dated 25 June 2020 whereby the matter was listed for an Experts Conclave to be conducted on 18 September 2020. By Directions given at that conclave, the respondents were directed to file and serve submissions on the issue raised in paragraph 107 of Mr Boyle’s report, with the applicant being afforded the opportunity to file submissions in response. [380] The respondents’ submissions were filed on 8 November 2020. Therein the following submissions appear relevant to paragraph 107.296 45. This is a statement of broad personal opinion held by Mr Boyle, and not a matter about which the parties are in dispute. … 46. … Mr Boyle does not identify what “all other matters referred to” actual mean in terms of his broad opinion that Mr Thirkell undertook that work as an unlicensed contractor. There is no specificity in the report of Mr Boyle which enables either the Respondent or the Tribunal to make any finding in relation to this issue. Without Mr Boyle identifying the particular works to which he is referring, the Respondents and the Tribunal are required to speculate as to what works are said to be in issue. … 57. The work which Mr Thirkell can carry out pursuant to both his qualifications as a civil and structural engineer, and as a building designer (through his respective licences with the QBCC) is broad. 58. The effect of Mr Boyle’s unspecified allegation at paragraph 107 is that notwithstanding Mr Thirkell as the qualifications and expertise to design a building … he cannot inspect a building for the presence of defects of ( sic ) incomplete work because he is not a builder and/or he did not design this building. 59. This would require a conclusion to be reached by the Tribunal notwithstanding Mr Thirkell’s expertise and qualifications enable him to design every aspect of a building, including provision of a specification or scope of works, that he cannot inspect this building and provide an expert report in respect of whether or not the works have been carried out in accordance with the building as designed and specified by him, because he does not hold a builder’s licence, and did not design this building. 60. Such a position is, with respect, a nonsense, [381] The respondents then concluded these submissions noting that in the absence of it being afforded an entitlement to provide written submission in response, they may be 296 Respondents’ submissions filed 8 November 2020 pursuant to Directions of the Tribunal dated 18 September 2020, para’s as noted. Emphasis in original. -- 91 of 140 -- 92 denied procedural fairness and thus submitted that these issues should be the subject of an oral hearing.297 [382] The applicant’s submissions in response were dated 20 November 2020.298 It is these submissions that the applicant’s Counsel before me referred to as I have noted it above, and whilst he does not indicate in that submission the parts of those submissions he specifically relies on, as I read them the relevant parts are as I have extracted them here.299 7. To be clear, at no point has the Applicant or any of the Applicant’s witnesses (including Mr Boyle) questioned the expertise or qualifications of Mr George Thirkell. In fact, it is clear that the Boyle Report respectfully recognises Mr Thirkell’s qualifications as an (sic ) Registered Professional Civil Engineer. 8. The Applicant’s position (partly articulated in the Boyle Report) is that, despite Mr Thirkell’s qualifications, he is not appropriately licensed to have undertaken certain building work services for the Respondents and, therefore, any costs associated with those building work services should be disregarded by both the Tribunal and the experts when considering the issues of quantum. 11. The Respondents’ counter application contains a claim for 20 items of alleged defective building work … 12. In relation to those 20 items, the Respondents’ claim a sum of $23,342 as payment made to Mr Thirkell for project management of the rectification works. It is this claim and Mr Thirkell’s ability to maintain this claim that was a question for the Applicant’s expert. … 17. In circumstances where Mr Thirkell and/or Redgate Building Solutions did not design the Respondents’ house, Mr Thirkell was therefore not licensed to undertake project management services, contract administration services or inspections of the works for the Respondents that are sought as part of the Respondents’ counterapplication. 18. Therefore, and on the basis of section 42 of the QBCC Act, Mr Thirkell and/or Redgate Building Solutions (and therefore the Respondents) are precluded from claiming remuneration for those tasks, most notably in relation to the labour element of those amounts. 19. Again, the Applicant’s submission and issue is not, nor has it ever been, in relation to questioning Mr Thirkell’s expertise, simply a question as to the ability of the Respondents to claim funds for unlicensed work undertake by Mr Thirkell in providing project management and/or construction administration services, unless it was work directly related to a design that Mr Thirkell did for the purposes of rectification. 297 Ibid – para’s 63 and 64. 298 A copy of these submissions appears in the material I was provided by the Tribunal Registry date stamped as being received 12 November 2020, however I infer that this should be 20 November 2020. 299 Applicant’s submissions – para’s as noted. The reference in paragraph 12 to the claim is confusing because no such claim appears as a separate line item in the respondents’ counterclaim, however my understanding of that reference is to the three line items in his Appendix Q to which I referred earlier even though $6,600 is for works yet to be carried out and as such not yet paid. -- 92 of 140 -- 93 Discussion [383] It is convenient to deal first with the issue of the respondents being denied procedural fairness in the absence of being afforded an opportunity to respond to the applicant’s submissions, and that an oral hearing should occur. That hearing did occur, it being the substantive hearing in this proceeding, and the respondents were afforded the opportunity to respond to the issue therein. However, notwithstanding that the opinion of Mr Boyle as he expresses it in paragraph 107 of his report was in evidence in the substantive hearing, it was not responded to in any way in the respondents’ closing. It was also a topic of an express submission in the applicant’s Counsel’s written closing with a very clear reliance on the earlier submissions of November 2020, however, the respondents did not then address it as a point of law in responsive submissions that they were entitled to make by virtue of my Directions given at the conclusion of the hearing and issued to the parties in writing dated 20 August 2021. In all respects the respondents have been afforded the requisite procedural fairness on this issue. [384] As to the respondents’ submissions of November 2020 to which I have referred, in my opinion they go beyond the issue. It is not a matter of whether Mr Thirkell can provide expert opinion evidence, it is a matter of whether he is lawfully entitled to be paid for the contract administration and/or project management work he says was done by himself or his company, and thus in turn whether the respondents are entitled to their claim for same from the applicant. [385] That being so, as I understand the applicant’s submission, it goes to only to the claim for ‘Tender and project management tasks’ as they appear in Mr Thirkell’s material. Whilst not identified by the applicant, as I read his company’s invoices, copies of which appear as Appendix Q1 and Q2 of his report, it seems to me that this is only the following entries, the cumulative total of these being $11,220.00: (a) For the period 13/12/2019 to 27/03/2020 (i) George – Tender Management $2,250.00 (ii) George – Admin $187.50 (iii) Caio – Project Management $1,500.00 (iv) Caio – Site Inspection $300.00 (v) Jack – Admin $45.00 (b) For the period 26/10/2019 to 12/12/2019 (i) George – Tender management – Contract Admin $5,175.00 (ii) George – Admin $112.50 (iii) Caio – Site Inspection $187.50 (iv) Caio – Project Management $1,462.50 [386] As to the entry for $6,600 in ‘Tender & project management tasks, engineering & drafting services’ as part of works to be carried out, there is no breakdown of what that estimated amount is for such as enables me to identify project management separate from design or engineering tasks. -- 93 of 140 -- 94 [387] In my opinion there is much force to the applicant’s argument on this issue. Whilst I agree with the respondents’ submission that Mr Thirkell would be permitted to undertake project management work as an RPEQ, such would not extend to project management of work that was not engineering work. That is, it would not extend to project management of building work that was not work which would ordinarily be within the ambit of a registered professional engineer in the conduct of his or her business as an engineer. [388] Under cross-examination, as I have noted it in paragraphs [94] and [99] to [108], Mr Thirkell explained the work that he did for the ‘Tender and project management tasks’. This was, on my understanding of his answers, something well beyond the usual practice of an engineer. It fell squarely within the ambit of ‘administration services’ and/or ‘management services’ for building work, which in turn is ‘building work services’, the provision of which is to ‘carry out’ building work, as all of those terms are defined under Schedule 2 of the Queensland Building and Construction Commission Act 1991 (Qld). [389] That then brings into operation s.42 of that Act to which Mr Boyle referred. This provides that a person or company must not carry out building work if that person or company is not properly licenced under the Act, and in turn subject to some exceptions,300 is not entitled to any monetary or other consideration for doing so. [390] The uncontroverted evidence of Mr Boyle is that Mr Thirkell or his company was not properly licenced under that Act to perform such works. Accordingly, the provisions of s.42 are engaged and Mr Thirkell or his company was simply not entitled to receive payment for same from the respondents. I accept that evidence as being correct. The respondents have not provided any evidence or argument to the contrary. It then follows that the respondents should not be entitled to recover same from the applicant. Accordingly, I will not allow the respondents’ claimed recovery of the $11,200 to which I have referred earlier in terms of works completed to date. [391] As for the $6,600 for the ‘works to be carried out’, as I understand the entirety of Mr Thirkell’s evidence, in the absence of anything specific as to what is left for him to do in terms of the asserted incomplete rectification work, I infer that it is entirely project management and/or contract administration work and accordingly I do not allow it for the same reasons. [392] All that being said, this leaves $5,542 only recoverable against the invoices at Appendices Q1 and Q2. Practical Completion [393] Having thus now disposed of the question whether work was defective, I turn to the question of whether practical completion was achieved. As I have noted it earlier, the applicant presses its claim on the premise that practical completion was achieved on or about 29 April 2019 whereas the respondents assert that it was never achieved. 300 Those exceptions are as expressed in s.42(4) of the Act but they have not been engaged here by way of any submission to me or evidence which shows the permitted ‘reasonable remuneration’. For that reason, I have not had further regard to it. -- 94 of 140 -- 95 [394] Whilst Mr Timothy Kelly’s evidence was in part consistent with the applicant’s assertion,301 as I noted it in paragraph [38] herein Mr Philip Kelly’s evidence was that it occurred on 3 May 2019.302 It appears to me that the difference arises from the following uncontested facts: (a) On 29 April 2019 the applicant sent an e-mail to the respondents inviting them to undertake ‘a final walk through / inspection’ of the house; (b) On 3 May 2019 a walk-through occurred with the respondents. [395] There are two other pieces of evidence that in my opinion are relevant to this issue. [396] The first is the evidence of Mr Timothy Kelly that I refer to in subparagraphs [33](b) and [33](c) herein, which for present purposes I summarise as being: (a) a ‘Notice of Practical Completion’ dated for the applicant 10 May 2019 said to have been sent to the respondents that day, wherein it was stated that certain works would not be completed until 16 May 2019; and (b) his assertion that the applicant had at the same time informed the respondents that occupancy and handover would be ready on 17 May 2019. [397] The second is the uncontested fact that it was not until 15 May 2019 the private certifier, Mr Glen Chambers, issued the Form 21 – Final Inspection Certificate.303 [398] In the alternative, the applicant submitted that by the respondents’ act of taking possession of the house, or terminating the contract, practical completion occurred no later than 10 September 2019. In support of that submission, it relied on Cl. 26.1 of the general conditions of contract.304 [399] The applicant’s Counsel also made an oral submission that is relevant and necessary to note. He submitted that my consideration of the question of practical completion will turn on an analysis of the items asserted by the respondents as being defective in its notice of 17 May 2021.305 He also cited a case which he said is directly relevant, namely Pivovarova v Michelsen (2019) QCA 256.306 [400] As to the respondents’ opposing contention, as I understand their Counsel’s closing written submissions it is premised on the extent of defective work present in the construction of the house such that the definition of practical completion under the contact was not satisfied, and the fact that, ultimately, they terminated the contract before the work was rectified so as to be complete for that purpose.307 301 Ex. 1 para 67. 302 Ex. 2 para 35. 303 Ex. 10 para 7. 304 Ex. 25 para 18. 305 As I will discuss it later in these reasons, this is the respondents’ solicitors letter sent in response to the applicant’s purported Notice of Practical Completion, the letter being sent expressed as in satisfaction of subclause 25.4 of the general conditions of contract. A copy of it appears in the statement of Mr Timothy Kelly at Ex. 1 Annexure TMK-16. 306 T.4-98 and 99. 307 RWCS – para’s 77 to 90. -- 95 of 140 -- 96 Discussion [401] It is convenient to dispose of the applicant’s alternative submission first. I do not accept it as having any substance. [402] Primarily, as I understand the submission, it relies on the fact of the respondents having taking possession of the house, such occurring contemporaneously with their act of termination or immediately following the applicant’s act of termination. In that regard it is expressed as being reliant on sub-clause 26.1 of the contract terms, which for ease of reference I extract here. 26.1 The owner is not entitled to: (a) take control of, (sic ) possession of or use the works or any part of the works; or (b) receive the keys for the works, until the builder has been paid the contract price, adjusted by any additions or deductions made under the contract. [403] Whilst I am readily able to conclude that the respondents had not paid the contract price as adjusted at the time they took possession of the house, that conclusion naturally arising from the fact of the applicant having commenced this proceeding, the difficulty I have with the written submission is that I am unable to discern the premise for such a submission being found in the words of sub-clause 26.1 by which it can be said that if the respondents take possession prior to payment then practical completion occurs. That is simply not part of the operation of that clause. Whilst there are related subsequent provisions of the contract terms that work in conjunction with sub-clause 26.1, namely sub-clauses 26.3(c) and 26.6 read together with Cl. 25, the latter being the ‘Practical Completion’ clause in the general conditions, the applicant has not referred to them nor in any other way indicated a reliance on them. [404] As an alternative to the act of taking possession, as the submission is expressed it relies on the act of termination which I infer from the structure of the written submission it is a reference to the respondents’ action in purporting to terminate the contract. Once again, I am unable to discern the premise for such a submission. There is nothing within the contract terms, nor otherwise at law, that leads to such an outcome. [405] I thus turn to the evidence and the express terms of the contract to determine whether the stage of practical completion had been reached. [406] I agree with the submission from the applicant’s Counsel. It is a factual enquiry that must be made in terms of the allegedly defective items of work. In Pivovarova, the case cited by the applicant’s Counsel, the Court was concerned with the definition of ‘practical completion stage’ as it appeared s.67 of the then Domestic Building Contracts Act 2000 (Qld). To the extent it referred to ‘practical completion’ that definition was very similar to the definition in the contract.308 Therein, Crow J made these observations that are relevant to the present issue. 308 That legislation was repealed on 1 July 2015 and was in effect replaced by Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld). There is no equivalent provision -- 96 of 140 -- 97 In order to determine whether the practical completion stage has been met, a factual enquiry is undertaken. It is a question of fact whether work has been completed in accordance with the contract and all relevant statutory requirements apart from minor omissions or defects, and whether the detached dwelling or home is reasonably suitable for habitation. Given the applicant moved into the home prior to the issue of the certificate of practical completion, it cannot be doubted that the home was reasonably suitable for habitation. The factual question then required for determination is whether the work had been completed “apart from minor omission or defects”. …309 [407] But, in my opinion it goes further that just determining whether the work is defective, the issue is whether the work has been completed in the sense that there is something more than simply minor omissions or defects. This is the effect of the reasoning in Pivovarova, which stands as authority for that proposition. [408] To start with, there are a number of difficulties with the applicant’s assertion that practical completion occurred on 29 April 2019. The evidence of Mr Timothy Kelly and Mr Glen Chambers is contrary to that assertion. As I have noted it: (a) It was not until 15 May 2019 that the Form 21 – Final Inspection Certificate was issued; and (b) The applicant issued a Notice of Practical Completion dated 10 May 2019 whilst simultaneously stating that the house would be ready for occupancy and handover on 17 May 2019. [409] On those facts alone, I fail to see how it can be said that the works were practically completed until at least 17 May 2019 when it was said that the house would be made ready for handover. The statement that it would not be ready until then is consistent with the fact that, at the time it was made, the Final Certificate had not been issued. As the Appeal Tribunal most recently observed in terms of the question whether practical completion had been achieved under two contracts, one for a house the other for a pool deck, in in Cochrane v Lees [2021] QCATA 74. Without final inspection certificates, neither construction was complete. A final inspection certificate evidences a successful final mandatory inspection which is a requirement under the legislation. In addition, the building approval usually requires issue of a final certificate as a condition of approval. The absence of a final inspection certificate may present substantial difficulties ahead for an owner.310 to s.67 however there is now a definition of ‘practical completion’ therein applicable to domestic building contracts, such being nature of the contract between the parties in this matter, which is identical to the definition of practical completion under the contract. For that reason, I consider the reasoning of the Court of Appeal to be relevant and applicable to any consideration of that definition in the contract. 309 Pivovarova v Michelsen (2019) QCA 256,[51] and [52]. Subject only to a qualification about the conclusion of Crow J that given the homeowner moved into the house prior to practical completion having been achieved it could not be doubted that the home was reasonably suitable for habitation, at [1] Fraser JA agreed with this part of Crow J’s reasoning. Boddice J at [13] to [15] also agreed with this part of the reasoning. 310 Cochrane v Lees [2021] QCATA 74,[45]. Footnotes omitted. -- 97 of 140 -- 98 [410] I also infer that the applicant was aware, or at the very least expected, the Final Certificate would not be issued until around 15 or 16 May 2019. [411] However, even if I am wrong on that point, in my opinion the existence of defective work was sufficient to result in the position that practical completion was never achieved. Before I explain my reasoning for that opinion, I will make one brief observation on an issue which pervaded the applicant’s evidence, that being the defective work in question was said not to have been such that “it did not unreasonably affect the use and occupation of the dwelling”,311 or it “would not impact on the occupation of the building”.312 Whilst not expressed in such direct terms, as I understood the oral closing submissions from the applicant’s Counsel concerning the question of practical completion, to some degree there was a continued reliance on the test of occupation.313 [412] As I understand the applicant’s reliance on such a test it arises from the presence of the words “that will not unreasonably affect occupation” in the definition of ‘practical completion’ in the general conditions of the contract. If that understanding is correct, in my opinion such is misplaced. As I will note it shortly, in that definition those words have the effect merely of qualifying the requirement for the work under the contract to have been completed “without defects or omissions” by permitting the existence of “minor defects or minor omissions” which will not unreasonably affect occupation. That is, the applicant is effectively saying that the defective work complained of by the respondents is at best ‘minor’. As I will explain it shortly, I do not accept such a proposition. At the very least, to the extent of the roof drainage and underground drainage issues, the defective work was far from being minor. [413] I thus then turn to the contractual requirement for achieving practical completion. The definition of practical completion under the contract terms is expressed as follows. ‘Practical completion’ means the day when the subject work is completed: (a) in compliance with the contract, including all plans and specifications for the work and all statutory requirements applying to the work; and (b) without any defects or omissions, other than minor defects or minor omissions that will not unreasonably affect occupation; and (c) if the building owner claims there are minor defects or minor omissions, the building contractor gives the building owner a defects document for the minor defects or minor omissions. [414] The respondents’ submission is that there were a number of significant defective work items, namely the front entrance doorway and door, the security screens, the butler’s pantry and kitchen sinks, the roofing, the box gutter and valley gutters, the underground drainage, and the boatshed wall, that has the result practical completion was not achieved.314 They argue that because of certain of these items being ‘significant’ defects, the work has not been completed in compliance with the contract including all plans and specifications for the work and all statutory requirements 311 Phraseology used by Mr Timothy Kelly – see Ex. 1 e.g. para’s 128 and 182 amongst many others. 312 Phraseology used by Mr Boyle – see Ex. 14 e.g. para’s 72 and 78 amongst many others. 313 See T.4-98 and T.4-99. 314 RWCS para 85. -- 98 of 140 -- 99 applying to the work, and it does not matter whether the items are such that they may not unreasonably affect occupation.315 [415] I do not accept that submission as being correct. It ignores the uncontested fact that the private certifier, Mr Glen Chambers, issued the Form 21 – Final Inspection Certificate which I accept is prima-facie evidence of the work being completed in satisfaction of all statutory requirements. [416] In contrast, the applicant’s submission is that given existence of the Form 21 – Final Inspection Certificate, the entirety of the work can be considered to have been completed in satisfaction of the first element of that definition, and thus any remaining work whether it be defective or incomplete must be considered to be minor providing it does not unreasonably affect occupation. 316 [417] I also do not accept that submission as being correct. It ignores the express requirement that the work be completed ‘without any defects or omissions’ and the cumulative effect of the definition. It would be to leave those words without meaning or purpose, such that paragraph (a) and (b) in the definition could be read as being ‘in compliance with the contract, including all plans and specifications for the work and all statutory requirements applying to the work, other than minor defects or minor omissions that will not unreasonably affect occupation’. [418] Whilst I will accept that some of the complained of items, namely the security screens, the polished concrete floor, the boatshed wall, the streetscape tiles, the cleaning, and the electrical solar panels, and possibly even the kitchen and butler’s pantry sinks and some of the roofing works, all might fall within the category of being minor in that, applying the reasoning as I discussed earlier in these reasons, they can be readily compensated for by a diminution in value rather than the need for work being performed so as to get to a point where the work is completed for handover, I do not agree that it applies to all the complained of items. I note here again that which I said in paragraph [134] and later when I discussed the evidence of Mr Gilboy, it became apparent that there were at least two items of work which could properly be considered as ‘incomplete’ by the applicant as builder, namely the underground drainage, such being associated with the defect in the roof drainage in terms of the guttering. [419] This is, at least as I understood it, the essence of the somewhat sparse submission for the respondents wherein their Counsel expressed it in this manner in his written closing: This clearly demonstrates that the works the Builder performed under the Contract were not … complete and free from defect or omissions, except for minor omissions.317 [420] As I have noted it, I accept the argument that at the very least the roofing issues in terms of gutters and downpipes in combination with the underground external drainage issues are properly considered as being defective or incomplete to reach that result. I discussed these issues at length at paragraphs [284] to [344] herein. I do not consider it necessary to repeat that which I said there. It is sufficient for present 315 RWCS para’s 79 to 82 and 87. 316 See the applicant’s Counsel’s oral submissions at T.4-98. 317 RWCS – para 89(b). That to which this submission referred was the earlier listing of the ‘significant’ defective work items as they are described in paragraph 85, such including the roof gutters and the underground drainage. -- 99 of 140 -- 100 purposes to note that which is directly relevant to the question of practical completion is the evidence of Mr Gilboy as I have extracted it in paragraphs [303], [323], [324], and in particular that which I noted at paragraph [327]. As he observed it on his inspection of the works when it was still in the applicant’s possession prior to termination, the roof plumbing works was not of an acceptable standard, and the underground drainage was inadequate given the absence of shaping of the secondary pathways and the placement of swales, concrete guttering, or below ground aggregate, all which should have been done before handover of the house to the respondents. [421] It is this evidence that in my opinion is critical to the question of whether practical completion was achieved. It was entirely unexplained on the evidence from the applicant as to why this was not done. At its highest, the evidence is that presented by Mr Timothy Kelly in his statement where he says the following after noting the scope of works shown in the August 2019 Thirkell documentation: We considered the approach of the Respondents to be very difficult and uncooperative. There was no acknowledgment of the Gilboy Report or the offer to do the works. There was not even an explanation of why the Respondents and their Engineer considered the advice and recommendations of a Hydraulic Specialist should be disregarded. At all times, the Applicant was ready, willing and able to undertake the necessary rectification work, however was unable to do so due to the unreasonable attitude of the Respondents.318 [422] Whilst on one reading of this statement in terms of the paragraphs that precede it, it may appear to be directed solely to the issue of the gutter and downpipe issue, in my opinion it must be construed as equally being applicable to the underground drainage issue because the issues are interrelated and together dealt with by both Mr Thirkell in the scope of works documents he produced in August 2019 and Mr Gilboy’s report overall. That being so, despite Mr Kelly making this statement he does not explain what the approach is that is said to have been attributed to the respondents such that it prevented the applicant from doing the work in terms of Mr Gilboy’s advice. At that point in time, being when the applicant had the report of Mr Gilboy on the drainage issues, both roof drainage and site drainage, possession of the site remained with it. The applicant could readily have simply proceeded and done the work regardless of that which the respondent was asserting needed to be done. Yet, the applicant did not do so. [423] To sum that up, the applicant did not do that which it was being told by Mr Gilboy needed to be done to complete the work that Mr Gilboy said under cross-examination would ordinarily be done before handover of a house. [424] It is no excuse to say that some of this work, namely the creation of secondary pathways, would have been done as part of the landscaping work, such not being included under the contract. This was the topic of a lengthy discussion between the respondents’ Counsel and me during his oral closing and I accept that which he says therein. That which was constructed was a ‘closed system’ and not one which contemplated overland secondary pathways, and accordingly it would not matter whether landscaping was done or not.319 318 Ex. 1 para’s 99 and 100. 319 See the discussion at T.4-86 Line 28 to T.4-89 Line 12. -- 100 of 140 -- 101 [425] However, and more importantly, there is nothing in evidence from the applicant to show me, nor even suggest, that to the extent Mr Gilboy’s proposed solution called for secondary pathways the provision of such would fall within the ambit of landscaping work and thus be excluded from, or otherwise extra to, the contract. Such seemed to be the suggestion from the applicant’s Counsel in his oral closing submissions.320 If that was the applicant’s position, in my opinion it should have raised this with the respondents at the time and sought a variation under the contract to perform the work, such being a course of conduct open to it whilst the site remained in its possession and the contract remained on foot. It did not do that. Rather, it seemingly sat on its hands and did nothing to remedy the circumstances as they were identified by Mr Gilboy. [426] That being so, in my opinion, as a result of this work being defective or incomplete, and the applicant still being in possession of the site up to the date of termination but not proceeding to deal with it in line with the recommendations from Mr Gilboy whom it engaged for the sole purpose of reviewing the issues and providing to it his advice on them, practical completion was not achieved and could never have been achieved until the work was rectified. [427] Put simply, I find as a fact that the work was not without defects or omissions. This is because it was not at any time prior to termination complete to a point where it was ready for handover. Disputed Variations [428] Whilst an issue arose on the pleadings as to the asserted unpaid variation claims as agreed to not having been paid, the respondents originally asserting they had paid these, it is now common ground that there is an amount of $23,600.93 for agreed variations that has not been paid, such to be taken into account in the final reconciliation of the competing claims in this proceeding. There is also common ground that the applicant has given a credit for a glass splashback in the sum of $2,035 and a wardrobe in the sum of $445.50 as part of the final claim for payment, neither of which are challenged by the respondents.321 [429] That being said, there remains two disputed variation claims which the applicant presses for payment as part of its claim. These are Variations 3 B – Additional Tiling for $4,238.74, and Variation 6 – Extra pool fencing for $1,716. [430] The respondents challenge this claim on the basis that at no time did they agree to this work being done as a variation prior to it being performed and, in that regard, they rely on the provisions of sub-clause 20.3 of the general conditions of contract, which for ease of reference I extract here together with sub-clauses 20.2 and 20.5 that must be read to give context to the reliance on 20.3. 20.2 The builder must give the owner a copy of the variation document before the first of the following happens: (a) 5 works days elapse from the day the builder and the owner agree to the variation; or (b) any work the subject of the variation starts. 320 T.4-98 Lines 4 to 6. 321 Ex. 25 para’s 8 and 9. RWCS para 224. -- 101 of 140 -- 102 20.3 The owner must agree to the variation in writing prior to the builder commencing the variation works. 20.5 Notwithstanding the above, the builder is not required to create a variation document before carrying out the varied work if that work is required to be carried out urgently and it is not reasonably practicable in the particular circumstances to do so. [431] As to these two variations, save only that which I say in the next paragraph, I need not address the detail of the applicant’s evidence,322 as it can be effectively summed up by reference to the closing written submissions from its Counsel, namely: (a) The pool fence variation was required to comply with the fencing laws under the Building Act 1975 (Qld), and in turn relies on sub-clause 20.8 of the general conditions;323 (b) The tiling variation arose because the respondents liaised directly with the supplier and contractor (I infer that is a reference to the tiling subcontractor), and that the applicant reduced the variation to writing upon receiving notice of the change, such being when it received invoices from the tiler, and thus it was done as soon as reasonably practicable.324 [432] To understand the reference to sub-clause 20.8 it is necessary to set out that provision of the contract. The owner must not refuse a request by the builder for a variation where the variation is required for the works to comply with the law. [433] I do not accept these submissions. Even if the pool fence variation was required to comply with the law, the provision only arises if the applicant has first ‘requested’ the variation, such which in my opinion must be read as meaning ‘as a consequence of a requirement to comply with the law’. Whilst Mr Timothy Kelly’s evidence is that in his discussion with the respondents on 28 January 2019, he informed them that the work would be a variation, it was simply on the basis that the contract did not allow for the number of metres of fencing that they wanted done. To the extent he also says that the height of the fence panels needed to be increased to comply with pool safety regulations, seemingly as a consequence of the change in the BBQ bench, there is nothing in his evidence to indicate that he requested the variation to the pool fencing for that reason.325 Moreover, the ‘request’ for the variation was not made until 30 April 2019, after the work had already been done and the applicant had received invoices from its supplier and subcontractor for the fence work. That is, the applicant had not complied with sub-clause 20.3, a provision that still must be complied with even if the variation is required to comply with the law. [434] A similar circumstance exists with the tiling variation. Notwithstanding Mr Timothy Kelly’s assertion that Mrs Kaminaras made the change to full height tiling in the main bathroom on 24 October 2018,326 a date he maintained under cross-examination as 322 Re Variation 3B see Ex. 1 para’s 25, (b) and (d), 28 to 41 and Annexure TMK-7 pg 170. Re Variation 6 see Ex.1 para’s 42 to 49 and Annexure TMK-9. 323 Ex. 25 para 11. 324 Ex. 25 para’s 12 and 13. 325 Ex.1 para’s 43 to 46. 326 Ex. 1 para’s 31 to 33. -- 102 of 140 -- 103 being correct,327 the applicant’s variation document records the ‘Date of Request’ at 16 April 2019, thus not consistent with Mr Kelly’s evidence, and in turn the document is dated 8 May 2019.328 Thus, it is seen that it took the applicant 6 ½ months to produce a variation document from what is said to have been the relevant date. But what is more critical and adverse to the applicant’s claim is that, as Mr Kelly confirmed under cross-examination, the applicant did not give a variation document to the respondents before the work was carried out.329 I infer from the submission made as I have noted it above that such conduct was prompted only by the receipt of invoices from the tiler. [435] I accept the evidence of both Mr and Mrs Kaminaras that neither of them agreed to these variations, and moreover that Mrs Kaminaras informed the applicant prior to the contract being signed that, at least, the main bathroom was to be fully tiled from floor to ceiling.330 Despite the applicant’s contention to the contrary, it was unchallenged on cross-examination.331 [436] Subject to one qualification, I also accept the submission from the respondent’s Counsel that under cross examination Mr Timothy Kelly and Mr Philip Kelly conceded that there was no urgency, as I understand it in the sense of the provisions of sub-clause 20.5, and there is no evidence of the asserted agreement being in writing.332 That qualification is that there is evidence of the variation being reduced to writing namely that which is Annexed to the statement of Mr Timothy Kelly,333 but these are not signed by or on behalf of the respondents. [437] All of this evidence clearly shows that the applicant failed to, or possibly even simply ignored, the requirements of the variation clause in the general conditions of contract. It did so at its peril. Given such non-compliance and the absence of any other premise advanced by the applicant for payment of the work the subject of these variation claims,334 there is no basis upon which I can find for the applicant. Its claim payment of these purported variation claims is rejected. The making of the ‘Final Claim’ & the respondents’ obligation to pay it [438] On or about 10 May 2019 the applicant made its claim for the practical completion stage payment from the respondents. It was in the amount of $80,414.50.335 It is common ground that this amount includes the credit for the splashback and the 327 T1.35 Lines 29 to 42. 328 Ex. 1 Annexure TMK-7 pg’s 170 and 171. Whilst the variation document asserts a change to both the main bathroom and the ensuite, Mr Kelly’s evidence only deals with the main bathroom and is silent on the issue of the ensuite. 329 T.1-35 Lines 23 to 27. 330 Ex. 19 para’s 4, 7, and 12 to 17. Ex. 20 para’s 22 to 29. 331 There was a very short cross-examination of Mrs Kaminaras wherein she confirmed that she always required full height tiling. See T.3-91 and 92. Notwithstanding that cross-examination did not appear to be finished on this issue, on resumption the next day the applicant’s Counsel informed me that he did not require Mrs Kaminaras for further cross-examination and accordingly her answers given in terms of requiring full height tiling remained unchallenged. 332 RWCS – para 32. See the XE of Mr Timothy Kelly at T.1-35 and 77, and Mr Philip Kelly at T.1-91 and 92. 333 Ex. 1 Annexures TMK-7 pg 170 and TMK-9. 334 As the respondents’ Counsel has properly noted it at paragraph 37 of his written closing submissions, the applicant has not advanced an alternative claim on a quantum meruit basis for this work. 335 Ex. 1 para 69(b) and Annexure TMK-11 pg 192. -- 103 of 140 -- 104 wardrobe that I mentioned in paragraph [428] herein deducted from the stated practical completion stage payment amount given in the contract document.336 [439] This was bundled as part of what is said to be the ‘final claim’ of $105,731.40 which is shown as being the ‘Total Amount Due’ on a statement of account which lists not only the invoice for $80,414.50 but also nine other invoices of varying amounts.337 By cross-referencing these other invoices to the list of ‘Variation Claims’ in the statement of Mr Timothy Kelly I can see that these nine invoices are for Variations 1, 2, 3A, 4, 5, 6, 7, 8 and 9.338 [440] Later in these reasons I address the applicant’s entitlement to be paid the claim it presses in this proceeding. Here I address only the issue of whether the applicant did actually make a ‘final claim’ under the contract, and thus whether there arose an obligation on the respondents to pay it. The reason I do so separate from the entitlement to be paid the claim pressed in this proceeding is that it is an issue which relates to the question of termination of the contract, that being the next issue I discuss in these reasons. One of the reasons given for the applicant’s purported termination of the contract is the respondents’ refusal to pay the claim as made. [441] It is also common ground that the respondents have not paid this claim. They assert that they are not liable to pay the claim, but do not elaborate on the reason for doing so with any clarity in their pleaded defence to the applicant’s claim,339 although in my opinion their pleading can be construed as saying they are not liable because practical completion was never reached. That absence of clarity was dealt with by the respondents’ Counsel in both his oral and written closing submissions. In essence his submission was that the applicant did not at any time trigger its entitlement to payment pursuant to clause 25 of the general conditions of contract, that being the only provision by which its entitlement to claim its final claim under the contract arose.340 [442] It is thus convenient for me to start by setting out the relevant parts of that clause 25. Clause 25. Practical completion … 25.2 When the builder believes the works have been completed the builder must give the owner: (a) a defects document listing minor defects and minor omissions: (i) that are agreed to exist and the time by when those items will be completed or rectified; (ii) that the owner claims to exist but the builder does not agree with; and (iii) that is signed by the builder; and 336 Ex. 25 para’s 8 and 9. RWCS para 224. 337 Ex. 1 para 69(c) and Annexure TMK-15. 338 I pause here to note that an invoice was not raised, nor any amount included in the final claim for Variation 3B, it being one of the disputed invoices, however variation 6, being the other disputed invoice had been invoiced and included in the final claim. There was no explanation given in the evidence as to why this was so. 339 Amended Response and Counterapplication – para 8(b). 340 T.4-18 Lines 19 to 23. -- 104 of 140 -- 105 (b) a notice of practical completion stating the builder’s opinion of the date of practical completion; and (c) the final claim. 25.3 Subject to Clause 25.4, the owner must, within 5 working days of receiving the final claim, pay the amount of the final claim to the builder. 25.4 If the owner believes that practical completion has not been reached the owner must, within 5 working days of receiving the notice of practical completion, give the builder a written notice stating: (a) the owner’s requirements for the works to reach practical completion; and (b) the provisions of this contract that relate to each requirement. 25.5 The builder must, on receiving the owner’s notice, complete those requirements that, in the builder’s opinion, are necessary to reach practical completion. 25.6 On completion of those requirements the builder must give a further notice of practical completion stating the new date of practical completion, and the owner must, within 5 working days of receipt pay the amount of the final claim to the builder. … [443] The other relevant provision is the definition of ‘final claim’ given in clause 38 of the general conditions, namely: ‘final claim’ means the claim by the builder for payment of the balance of the unpaid contract price as adjusted by any additions or deductions made under this contract, plus all other moneys owing under this contract. [444] Given that definition, it is necessary for me to say something about the ‘claim’ that is the subject of the discussion under this heading. [445] It will be recalled that it is common ground that agreed variations totalling $23,600.93 have not been paid, and the applicant also maintains a claim for payment of $5,954.74 for disputed variations. It will also be recalled that it is common ground that the ‘practical completion claim’ is $80,414.50. Together those claims total $109,970.17, that being the amount the applicant seeks relief for in this proceeding, plus other claims less concessions made in terms of the respondents’ counterclaim. 341 It seems to me that this total is in effect the ‘final claim’ that should have been presented by the applicant in accordance with the operative provisions of clause 25. [446] However, the applicant did not do so but rather presented only a claim for the practical completion stage amount less credits, together with, as I noted it earlier, a ‘Statement of Account’ which listed what was said to be the unpaid invoices including the invoice for the Practical Completion Claim, and a covering letter which contained the following sentence Please find attached copies of the invoices owing. The total of Final Claim is $105,731.40. 341 See the Draft Order 3 as attached to the applicant’s written closing submissions – Ex. 25. -- 105 of 140 -- 106 [447] The difference between the figure noted in that letter as being the Final Claim and that which I mentioned above as to what I consider should have been the amount of the Final Claim is the amount given for Variation 3B. [448] Whilst the applicant asserts that the variation claims, whether they be agreed or not agreed, have not been paid, I am unable to discern from the evidence that is before me where or when the applicant actually claimed payment for these variations. At its highest, the applicant’s evidence shows that it is said to have issued ‘Invoices’ for Variations 1, 2, 3A, and 4 to 9 to the respondents, such having occurred in the 3 to 4 weeks prior to the practical completion stage payment invoice being raised.342 However, notwithstanding the express requirements of the variation clause of the general conditions, specifically subclause 20.1(d) which requires the variation document to include a statement as to when the price increase was to become payable, and the express requirements of s.41(2)(f) of Schedule 1B to the Queensland Building and Construction Commission Act 1991 (Qld), the applicant did not comply with these requirements in the provision of its variation documents to the respondents save only for variations 3A, 3B in which it was stated that they were to be paid together with the practical completion stage payment.343 Curiously, what is not explained is why, when it was asserted that the Variation 3B had not been paid, the unpaid amount was not included as part of the making of the ‘final claim’ in the manner provided for under clause 25. [449] I raise this here because it shows that the payment of the variations, notwithstanding that an invoice for each, other than variation 3B, was raised separate from and prior to the practical completion stage payment invoice, the respondents were not formally notified as part of the variation document, other than for variations 3A and 3B, as to when payment for same was to be made. Thus, at the earliest, the variations became payable only after they were included in and formed part of the final claim. I pause here to also note, for the applicant’s benefit, it explains why the applicant is not entitled to payment for at least the agreed variations separate from its claim for the practical completion stage amount. [450] It also shows, or at the very least suggests to me, that the applicant apparently failed to understand and follow the operative provisions of the contract and the requirements of the legislation. Such failure has seemingly permeated its conduct on the issue of practical completion and the making of the final claim as I will discuss it in the following paragraphs. In my opinion this is all to the applicant’s detriment in the pursuit of the relief it seeks in this proceeding. [451] On my reading of the respondents’ Counsel’s written closing submissions,344 they appropriately and properly capture the circumstances the applicant finds itself in and why it suffers that detriment. They are succinct and to the point. I shall not attempt to 342 Ex. 1 para 24. Copies of the Invoices are not in evidence and there is inconsistency within the statement of Mr Timothy Kelly as to the date of Invoice 425 for Variation 5. In the Table at paragraph 24 he states it to be 30.04.2019, whereas in the Statement of Account that appears in TMK-15 as being part of the final claim it states it to be 20 Feb 2019. 343 Ibid and annexure TMK-7 wherein copies of the variation documents appear. 344 Such are consistent with his oral closing submissions. See T.4-19 to T.4-28. -- 106 of 140 -- 107 paraphrase or otherwise summarise them, and it is apposite that I extract them here to the extent relevant to this issue.345 13. The Owners say that the Builder never accrued a right to payment for its final claim because it didn’t satisfy the requirements of clause 25 of the General Conditions. 14. Specifically, the Owners say that even if there was a valid final claim gave ( sic ) by the Builder pursuant to clause 25.2 of the General Conditions, the Owners were not obliged to pay the final claim. This is because they have a [given] notice pursuant to clause 25.4 of the General Conditions. 15. The effect of that notice was to set in motion the procedure contained in clauses 25.5 and 25.6 of the General Conditions. Unless the Builder completed these steps in both clauses 25.5 and 25.6, there is no obligation on the Owners to pay the final claim. … 18. Exhibit 1, the Statement of Timothy Kelly contains the various notices passing between the parties pursuant to clause 25 of the General Conditions. 19. The substance of the evidence may be summarised as follows: (a) Paragraph 69 on page 9 and the documents referred to in that paragraph appear to comprise the Builder’s final claim, notice of practical completion and the Builders defect list. These documents appear on pages 188, 189, 190, 191, 192, 198, 202 and 203. At paragraph 69 Mr Timothy Kelly says that these documents were sent by an email to the Owners on 10 May 2019. However, there is no email to that effect. (b) Paragraph 74 on page 10, whereby Mr Timothy Kelly confirms receiving a letter from the Owners solicitors Preston Law. That letter appears at pages 204 through to 210. That letter is the Owners’ notice given pursuant to clause 25.4 of the General Conditions. Therefore, on Mr Kelly’s own evidence, the Owners’ notice given pursuant to clause 25.4 was received by the Builder within 5 working days of the Owners receiving the Builder’s notice of practical completion. (c) Paragraph 75 on page 10 where Mr Timothy Kelly says the Builders solicitors, WGC Lawyers responded to the Owners solicitors letter dated 17 May 2019 (being the Owners notice written pursuant to clause 25.4). The WGC Lawyers letter appears at pages 211 through to 216. 20. Importantly, the WGC Lawyers’ letter of 27 May 2019 expressly refutes the requirement for the Builder to issue a further notice of practical completion to the Owners. That is to say, they refute the need to comply with clause 25.6 of the General Conditions – see page 206 of Exhibit 1. 345 Parts of these submissions are relevant to the applicant pressing its claim in this proceeding as a claim for breach of contract, or a debt due under the contract. I have not extracted those parts here. -- 107 of 140 -- 108 21. There is no evidence of the Builder giving the Owners the further notice of practical completion in accordance with the mandatory requirements of Clause 25.6. 22. It is clear on the evidence that while the Builder may have issued a final claim to the Owners pursuant to clause 25.2, the obligation for the Owners to pay that final claim within 5 working days of receiving the final claim was not triggered by clause 25.3 of the General Conditions because the Owners gave the Builder a notice pursuant to clause 25.4 of the General Conditions. 23. Upon receiving the Owners’ notice pursuant to clause 25.4 of the General Conditions, the Builder was obliged to undertake those steps mandated by clauses 25.5 and 25.6 of the General Conditions. 24. It can be seen from the evidence, or rather lack thereof, that the mandatory requirements in clauses 25.5 and 25.6 were never satisfied by the Builder. 25. Had those mandatory requirements been satisfied, then the mechanism within clause 25.6 would set a time frame for the 5 working days for the Owners to pay the amount of the final claim to the Builder. 26. It is only by operation of either clause 25.3 or 25.6 that the Owners obligation to pay the Builder the final claim may arise. It does not matter whether the Owners were correct in their assertion that the Builder had not reached practical completion for their notice under clause 25.4 to be valid. That is simply not a requirement of clause 25.4 27. In the circumstances, it is clear that the Owners’ obligation to pay the Builder the final claim never arose. …346 [452] In presenting his oral submissions in similar terms, the respondents’ Counsel emphasised the operation of subclauses 25.3, 25.4, 25.5, and 25.6. As I understood those submissions, they can be distilled down to these propositions: (a) The applicant’s Notice of Practical Completion dated 10 May 2019 is the applicant’s notice under subclause 25.3.347 (b) The respondents’ solicitor’s letter in response dated 17 May 2019 is the respondents’ notice under subclause 25.4.348 (c) By operation of subclauses 25.5 and 25.6, upon receipt of the respondents’ notice under subclause 25.4, the owner must complete the requirements noted thereon, and then issue a further notice of practical completion and it is only upon receipt of that does the respondents’ obligation to pay the final claim arise.349 346 RWCS – para’s as noted. 347 See Ex. 1 para 69 - Annexure TMK-11. 348 See Ex. 1 para 74 – Annexure TMK-16. I pause here to observe that it is expressly stated therein to be such a Notice. 349 Emphasis added by underlining. -- 108 of 140 -- 109 (d) The applicant did not at any time present a further notice of practical completion, but rather expressly by way of its solicitor’s letter of 27 May 2019 refuted any obligation to do so.350 [453] The following related facts must also not be overlooked. (a) Amongst other items, the respondents’ notice under subclause 25.4 expressly raised the issue of the roof drainage and downpipes, and underground drainage. (b) That notice expressly drew the applicant’s attention to the operation of subclauses 25.5 and 25.6 in terms of the need for the applicant to attend to these items and then issue a further notice of practical completion. (c) As I noted it in paragraphs [421] to [423] herein, on the applicant’s own evidence that it was aware of these issues, it had a remedy to them based on Mr Gilboy’s report to it, and it was ‘ready willing and able to undertake the necessary rectification work’, yet it simply did not do so. (d) Despite that which I have just said, in the applicant’s solicitor’s response of 27 May 2019, the applicant expressly denied that the roof drainage and downpipes, and the underground drainage, was defective or incomplete, and on any reading of the letter was communicating to the respondents that it would not be undertaking any further work to these items. But moreover, the letter expressly states “it is not necessary to issue a further Notice of Practical Completion.”351 [454] The respondents’ Counsel then aptly summed it all up with this oral submission. Member, that’s where everything went wrong in this instance for the builder because that notice – it’s unclear whether or not clause 25.5 was satisfied, arguably if they consider that nothing needed to be done, they would do nothing. So that, essentially, could be easily satisfied but what they do need to do, even if they formed that view, is issue the further notice under clause 25.6 and if they don’t, the obligation under clause 25.6 for the owner to pay does not arrive.352 [455] In response to these submissions and argument, the applicant’s Counsel made the following oral submission in his closing.353 Now, as I understand my learned friend’s submission, that the trap that the applicant is in is that if the owner believes that practical completion has not been reached, the owner must, within five working days of receiving [notice ] of the practical completion, give the builder a written notice stating the owner’s requirements for the works to reach practical completion and the provisions of this contract that relate to each requirement. That definition there is different to the definition of practical completion. If practical completion is met where there is minor defects and minor omissions, and the homeowner identifies those and gives notice of minor omissions and minor defects, then practical completion is met. In clause 25.4, talks about – in the owner’s requirements for the works to reach practical completion, that goes to something more than just minor defects and omissions and, in my submission, that is in plain reading of the contract because 350 See Ex. 1 para 75 – Annexure TMK-17. 351 This statement appears at Item 5 on page 6 of that letter. 352 T.4-21 Lines 11 to 16. 353 T.4-100 Lines 3 to 24. -- 109 of 140 -- 110 if it was a situation where the procedure had to follow for minor defects and minor omissions, practical completion could never be met. This situation would go on in perpetuity. Rock up, there’s a squeaky door. I don’t agree with practical completion, et cetera, and you go through the whole process again. The owner’s requirements for the works to reach practical completion must be something more than just owner’s minor defects and minor omissions. Discussion [456] In considering the competing arguments on this issue, it is apposite to note again my observations in paragraph [417] herein as to the proper reading of the definition of practical completion in the general conditions of contract. There is a meaning to be placed on the words “defects or omissions” as that term is used in paragraph (b) of the definition separate from the reference to “minor defects or omissions” that follow them. [457] As I read subclause 25.4, it is the presence of those “defects or omissions” which are being referred to in terms of “the owner’s requirements for the works to reach practical completion.” This is precisely that which the respondents have notified the applicant of by way of its solicitor’s letter of 17 May 2019. My observations already made on the existence of such defects or omissions need not be repeated again. [458] Given that which I have just said, it should be apparent that subclause 25.4 is dealing with something more than minor omissions and defects. That seems to be the interpretation placed on that subclause by the applicant’s Counsel given that which I note from the third paragraph of his oral submissions as I have noted it above. However, notwithstanding that we appear to be consistent on our interpretations of the subclause to that extent, I do not accept as being correct the remainder of his submission as I have noted it above. As I understand the submission, it is that the reference to ‘practical completion’ in subclause 25.4 is something different to ‘practical completion’ as it is defined in Schedule 2 of the general conditions of contract, and/or that the reference to ‘the owner’s requirements’ in paragraph (a) of the subclause can only be in terms of ‘minor defects or minor omissions’ as that term is used in the Schedule 2 definition. Respectfully, that submission is confused and confusing. I do not accept it as being correct. [459] The references to ‘practical completion’ in subclause 25.4 is to ‘practical completion’ as it is defined in the general conditions. The words therein in the printed document are in bold. As it is expressed in subclause 38.2 of the ‘Interpretation’ provision of the general conditions, “Whenever a defined term appears in this contract it is in bold text.” That being so, there is only one ‘definition’ of practical completion and the submission that there is some different definition is without substance. [460] The same applies to the reference to the ‘notice of practical completion’. That is a defined term, which is stated in the Interpretation provision to hold the meaning given to it by the entirety of Clause 25 of the general conditions. That clause provides for circumstances by which more than one notice may be given, the effect of which the latter supersedes the former. The circumstances are those arising on the engagement of subclause 25.4 by the respondents. [461] Upon the respondents engaging subclause 25.4 and issuing their notice to the applicant, the respondents’ obligation to pay the final claim ceased. That is the operation of the subclause 25.3 that makes the obligation subject to subclause 25.4. It then required the applicant to issue a ‘further notice of practical completion’ under -- 110 of 140 -- 111 subclause 25.6 to once again trigger the respondents’ obligation to pay the final claim. This is so even if the applicant did not agree with the content of the respondents’ notice and asserted that there were no defects or omissions that it was required to complete. Under subclause 25.5, it was required to attend to only those that it considered were “necessary to reach practical completion”, such which may be none at all. But even if it were none, such which would be complete without doing anything at all, it was still required to issue the ‘further notice of practical completion.’ [462] In that regard the operation of subclause 25.8 must not be overlooked. Had the applicant simply issued the further notice of practical completion effectively repeating the earlier notice and asserting practical completion occurred without the need to attend to the respondents’ requirements, then the contract terms provide a means by which the inevitable dispute would be addressed. [463] On my reading of the applicant’s solicitor’s letter of 27 May 2019 given in response to the respondents’ notice under subclause 25.4, it seems to me that the author of that letter proceeded on an erroneous understanding of the operation of the entirety of clause 25, such being, if the applicant’s position was that practical completion was achieved consistent with the giving of its Notice of Practical Completion dated 10 May 2019, then that Notice forever became the ‘notice of practical completion’ within the meaning of clause 25, and thus any engagement by the respondents of subclause 25.4 had no effect. Respectfully, that is not correct. [464] As I noted it earlier in these reasons at paragraph [451], the respondent’s Counsel’s written closing submissions appropriately and properly capture the circumstances the applicant finds itself in to its detriment. I respectfully adopt those submissions as being correct and forming part of my reasons for decision on this issue [465] I also agree with his oral submission as I have noted it at paragraph [454] herein, that’s where things went wrong for the applicant. As I observed it during my discussions with him on that correspondence, it had complete disregard to the express terms of the contract.354 [466] In all respects I conclude that whilst the applicant issued what is said to be its final claim on or about 10 May 2019 together with its Notice of Practical Completion, in the circumstances of that which followed and the absence of any further notice of practical completion, the applicant’s entitlement to be paid that final claim never arose. That is telling on the issue of termination of the contract to which I now turn. Termination of the Contract [467] On 9 September 2019, by letter from their solicitor to the applicant’s solicitor, the respondents purported to terminate the contract.355 [468] The essence of that letter was that the applicant’s refusal to complete certain works, namely, installation of adequate number of downpipes to ensure that rainwater did not overflow from the roof gutters, installation of gutters to ensure that rainwater did not overflow on to the BBQ areas, finish the boat garage external boundary wall, correct the installation of the correct kitchen and butler’s pantry sinks, and install security 354 T. 4-27 Lines 9 to 18. 355 Ex. 1 para 101. A copy of the letter appears at Annexure TMK-26. -- 111 of 140 -- 112 screens. I note these were the ‘requirements’ of the respondents’ issued pursuant to subclause 25.4 to which I have referred earlier. [469] In terms of that letter, Mr Timothy Kelly gave the following evidence in his written statement, which I have extracted in full rather than attempt to paraphrase it because as expressed it gives a clear picture of the applicant’s position adopted at that time. 102. We did not consider the reasons given by Preston Law for terminating the Contract to be valid reasons for terminating because: (a) The Respondent’s requirements for Practical Completion were either: (i) Attended to before 3 May 2019; (ii) Attended to before the Notice of Practical Completion was issued; (iii) Attended to before the Date of Practical Completion stated in the Notice of Practical Completion; or (b) The matters raised by the Respondents were no valid requirements for Practical Completion. 103. The only item of work outstanding as at 9 September 2019 was rectification of the drainage in the central patio downpipes and roof gutters which the Applicant had offered to rectify in the manner recommended in the Gilboy Report. 104. If other work was defective as at 9 September 2019 (which is denied) such works were minor defects or omissions. 105. The Applicant had plainly demonstrated that it was ready and willing to perform its part of the Contract by offering to rectify the drainage in the manner recommended in the Gilboy Report. 106. The Respondents on the other hand had plainly demonstrated their intention to not perform their part of the Contract by: (a) Failing to pay the Applicant’s Variation Claims; (b) Failing to pay the Practical Completion Claim; (c) Insisting on the Applicant performing rectification works in respect of minor defects and omissions before Practical Completion; (d) Insisting on the Applicant performing works not required by the Building Contract for no reward; and (e) Changing the locks and taking possession of the Dwelling before the time the Applicant was requested to deliver up possession of the keys to the Dwelling … 107. The Respondent’s (sic ) purported to (sic ) termination of the Contract amount to a repudiation of the Contract by the Respondents.356 356 Ex. 1 para’s as noted. -- 112 of 140 -- 113 [470] On 10 September 2019, by letter from its solicitor to the respondents’ solicitor, the applicant purported to accept the respondents’ conduct of purporting to terminate the contract as a repudiation and it in turn purported to terminate the contract.357 [471] The submissions from the respondents’ Counsel on this issue are relatively extensive.358 I need not detail all of that here other than to note that he referred to other letters that were exchanged subsequent to the applicant having purportedly given its final claim and Notice of Practical Completion on 10 May 2021 and the respondents’ notice under subclause 25.4 is response on 17 May 2021.359 These are: (a) The applicant’s solicitor’s letter of 27 May 2019, to which I referred earlier, in which the applicant maintained its position that practical completion had been achieved and there was no requirement to issue a further notice of practical completion; (b) The respondents’ solicitor’s letter of 4 June 2019 which in effect repeated that which was contained in the earlier letter of 17 May 2021 in terms of the respondents’ requirements;360 and (c) The applicant’s solicitor’s letter of 12 June 2019 in response wherein the applicant essentially repeated its position of 27 May 2019, but it also included this statement:361 By continuing to assert that the works have not reached practical completion and by repeatedly and without valid grounds refusing to attend a Practical Completion handover meeting, your client’s (sic ) have breached and expressly refused to perform fundamental obligations of the owner under Clause 28.2 of the Contract and are therefore in substantial breach. [472] As was also noted by the respondents’ Counsel, it is relevant to also observe here in terms of the chronology of events that it was between the time of the applicant’s solicitor’s letters of 12 June 2019 and 9 September 2019 that the applicant obtained the report of Mr Gilboy to which I have had extensive regard already in these reasons, and by which the applicant was squarely on notice of his opinion as to the defective/incomplete nature of the roof drainage in terms of the gutters, downpipes and underground drainage system. [473] The Counsel’s submissions for the respondents continued and identified another ground to justify termination in the alternative to that contained in the exchange of letters to which I have just referred, it being the applicant’s insistence it was entitled to payment of its final claim in the circumstances where the entitlement to that payment had not clearly been triggered, all of which I have discussed earlier in these reasons.362 [474] In contrast, there was no substantive submission for the applicant on the issue of termination but I note that it expressly maintained its claim for legal costs which it says in incurred as a result of the asserted repudiation of the contract by the 357 Ex. 1 para 108 – A copy of the letter appears at Annexure TMK-27. 358 See T.4-30 Line 30 to T.4-51 Line 11. RWCS – para’s 39 to 70. 359 RWCS – para’s 44 to 50. 360 A copy of this letter appears at Annexure TMK-18 pg’s 217 to 220 of Ex. 1. 361 A copy of this letter appears at Annexure TKM-19 pg’s 221 to 224 of Ex. 1. 362 RWCS – para’s 68 and 69. -- 113 of 140 -- 114 respondents. Notwithstanding the absence of same, I did not infer that it had abandoned the point, but rather, as I understood the applicant’s Counsel’s closing, the applicant simply relied on three positions, namely that practical completion had been achieved, that any remaining works were minor defects or omissions, and that it was entitled to be paid the final claim. Discussion [475] The respondents’ position is that they were justified in terminating the contract due to what they say was the applicant’s repudiatory conduct. In that regard they refer me to the decision in Laurinda Pty Ltd v Capalaba Park Shopping Centre (1989) 166 CLR 623.363 To the extent they rely on the alternative ground to justify termination that was not expressed in their solicitor’s letter of 9 September 2019 they refer me to inter-alia the decision in Shepard v Felt and Textiles of Australia Ltd (1931) 45 CLR 359.364 [476] Curiously, in the letter of 9 September 2019, the respondents’ solicitor did not refer to the underground/external drainage issue although it appeared in the 17 May 2019 letter. Whilst not expressed in such precise terms, as I understand the respondents’ Counsel’s closing submissions the respondents also rely on the fact of this item of defective work and the applicant’s failure to have dealt with it whilst the site remained in its possession prior to termination to also be a ground for termination on the basis of repudiation.365 [477] Since 1874, the relevant principles as to the existence of repudiatory conduct were described by Lord Colleridge in Freeth v Burr (1874) LR9 CP 208 as being acts or conduct which … do or do not amount to an intimation of an intention to abandon and altogether to refuse to performance of the contract or … evince an intention no longer to be bound by the contract. 366 [478] Such was followed by the Earl of Seabourne LC in Mersey Steel and Iron Co v Naylor, Benzon & Co (1884) 9 App. Cas 434 wherein his Honour observed I am content to take the rule as stated by Lord Coleridge in Freeth v Burr, which is in substance, as I understand it, that you must look at the actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the conduct of the other; you must examine what that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other party may accept it as a reason for not performing his part. 367 363 Ibid – para 64 to 67 and 69. 364 Ibid – para 70. 365 Ibid – para’s 55 to 63. 366 Freeth v Burr (1874) LR9 CP 208 at 213, cited with approval by Brennan J in Laurinda Pty Ltd v Capalaba Shopping Centre Pty Ltd (1988) 166 CLR 623 at 647-648. 367 Mersey Steel and Iron Co v Naylor, Benzon & Co (1884) 9 App. Cas 434 at 438-439, cited with approval by Brennan J in Laurinda Pty Ltd v Capalaba Shopping Centre Pty Ltd (1988) 166 CLR 623 at 647-648. -- 114 of 140 -- 115 [479] In Mersey, Lord Blackburn described the relevant principle in slightly different terms, generally as being …where there is a contract between two parties, each side having to do something, if you see that the failure to perform one part of it goes … to the foundation of the whole, it is a good defence to say, ‘I am not going to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct. 368 [480] When noting the dicta in Mersey, Brennan J made these observations as to the relevant principles in Laurinda Pty Ltd v Capalaba Shopping Centre Pty Ltd (1988) 166 CLR 623: Repudiation is not ascertained by an inquiry into the subjective state of mind of the party in default; it is to be found in the conduct, whether verbal or other, of the party in default which conveys to the other party the defaulting party’s inability to perform the contract or promise of his intention not to perform it or to fulfil it only in a manner substantially inconsistent with his obligations and not in any other way. … The question whether an inference of repudiation should be drawn merely from continued failure to perform requires an evaluation of the delay from the standpoint of the innocent party. Would a reasonable person in the shoes of the innocent party clearly infer that the other party would not be bound by the contract or would fulfil it only in a manner substantially inconsistent with that party’s obligations and in no other way? Different minds may easily arrive at different answers. 369 [481] As was also observed in Laurinda Pty Ltd v Capalaba Shopping Centre Pty Ltd by Deane and Dawson JJ: Lord Wrights oft-quoted admonition that “repudiation or a contract is a serious matter, not to be lightly found or inferred” is, no doubt, a wise one. It should not, however, be allowed to cloud the fact that an allegation of repudiation of contract in a civil case does not involve an assertion that the alleged repudiator subjectively intended to repudiate his obligations. … An issue of repudiation turns upon objective acts and omissions and not upon uncommunicated intention. … It suffices that, viewed objectively, the conduct of the relevant party has been such as to convey to a reasonable person, in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it … 368 See the observations of Lord Blackburn in Mersey Steel and Iron Co v Naylor, Benzon & Co (1884) 9 App. Cas 434 at 443; 53 LJQB 497 at 502, referred to in Rhymney Railway v Brecon & c. Railway (1900) 69 LJ Ch 813 at 818-819, cited with approval by Gavan Duffy and Starke JJ in Adami v Maison De Luxe Ltd (1924) 35 CLR 143 at 155. 369 Laurinda Pty Ltd v Capalaba Shopping Centre Pty Ltd (1988) 166 CLR 623, 647-648 per Brennan J. Emphasis added. -- 115 of 140 -- 116 It is not necessary for repudiation of a contract that the repudiator make plain that he will never perform his contractual obligations at all. What Lord Dunedin described as the assumption of “shilly-shallying attitude in regard to the contract” and what Lord Shaw of Dunfermline called “procrastination … persistently practised” can, in some circumstances, reach the stage of repudiation even though accompanied by assurances of ultimate performance at some future time.370 [482] Having noted those observations of Lord Wright, their Honours continued observing what they opined as a correct statement of the law by Lord Shaw, such being: If, in short, A, a party to a contract, acts in such a fashion of ignoring or not complying with his obligations under it, B, the other party, is entitled to say: ‘My rights under this contract are being completely ignored and my interests may suffer by non-performance by A of his obligations, and that to such a fundamental and essential extent that I declare he is treating me as if no contract existed which bound him.’ … In business over and over again it occurs – as, in my opinion, it occurred in the present case – that procrastination is so persistently practised as to make a most serious inroad into the rights of the other party to a contract. There must be a stage when the person suffering from that is entitled to say: ‘This must be brought to an end. My efforts have been unavailing, and I declare that you have broken your contract relations with me’”. 371 [483] Finally, as was explained by Gleeson CJ, Gummow, Heydon and Crennan JJ in Koompahtoo Council v Sanpine P/L (2007) 233 CLR 115: The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations. It may be terms renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation of the contract as a whole or of a fundamental obligation under it. … Secondly, it may refer to any breach of contract which justifies termination by the other party. 372 [484] In considering these legal principles as they relate to the issues that arise on the evidence and submissions to which I have just referred, it seems to me that the respondents took the relevant steps available to it under the contract to have the applicant do that which they contracted it to do. [485] In contrast, whilst the applicant asserts it was always ready and willing to perform the requisite works in terms of the roof drainage and underground drainage issues, at least to the extent of that which Mr Gilboy opines was defective and the necessary degree of remediation, as I have observed it the applicant did not do so. As the respondents’ Counsel has aptly put it in his written closing submissions: 62. This proposition seems to be entirely at odds with what actually occurred. Further, if that was what Mr Gilboy proposed and it was an appropriate 370 Ibid at 658-659 per Deane and Dawson JJ – citations omitted. Emphasis added. 371 Ibid at 659 – Emphasis added. 372 Koompahtoo Council v Sanpine P/L (2007) 233 CLR 115, 135-136, [44] – Citations omitted – Emphasis added. -- 116 of 140 -- 117 solution, there was nothing stopping the Builder from undertaking the works that Mr Gilboy said needed to be completed. At that stage the Contract hadn’t been terminated and the Builder was in possession of the property. The Builder could easily have undertaken the works of its own accord. 63. Had it done so, it would be in a totally different situation. However, it did not do so.373 [486] I agree with that submission. Whilst I have found that much of that which they complained of is not of such a kind that would fall outside of ‘minor defects or minor omissions’ such that it would properly be a ‘defect or omission’ for the purposes of paragraph (b) of the definition of practical completion, as I have found it the roof gutters and downpipes together with the underground drainage is a ‘defect or omission’. Moreover, it is this work that the applicant was aware of that needed rectification, and that it had a solution for even if it was one not agreed to with the respondents. But, for an inadequately explained reason, it simply chose not to do. [487] As to the respondents’ reliance on the applicant’s continued insistence on its entitlement to be paid the final claim as made but in circumstances where it was not entitled to because it had not triggered that entitlement under sub-clauses 25.3 and 25.6, the former being expressed in its solicitor’s letter of 9 September 2019 but not the latter, there is no reason for me to reject that submission as being incorrect. [488] It is trite law that the respondents are not now limited to the conduct referred to in the letter of 9 September 2019 in this proceeding. They can readily rely on other conduct of the applicant committed pre-termination but of which they have only become aware post-termination.374 [489] I should also say something about the applicant’s solicitor’s letter of 12 June 2019 in which the assertion was made that the respondents had expressly refused to perform fundamental obligations under clause 28.2 of the contract by repeatedly and without valid grounds refusing to attend a practical completion handover meeting. As the respondents’ Counsel has correctly and properly identified in his written closing submission, there is no such express obligation in the contract. As I discussed it with Counsel during oral closing submissions, whilst in my opinion such may be implied, it seemed to me that to the extent the respondents were under any such obligation they fulfilled it by their attendance at the walk-through on 3 May 2019 following which their notice under sub-clause 25.4 was issued, and thereafter they waited for the applicant to fulfill its obligations under the contract. As I see it all, the steps taken by the respondents via their solicitor’s letters following the giving of that notice up to the point of termination attest to that. [490] In my opinion all of this is enough to justify the respondent’s act of termination for repudiation. It seems to me that the respondents got to the point which was observed by Lord Shaw as I have noted it in paragraph [482], that being their efforts to have the applicant do that which it was required to do must be brought to an end, their efforts were unavailing and they concluded that they must declare that the applicant had broken its contract with them. It might also be said that the applicant’s approach was, in the words of Lord Dunedin and Lord Shaw of Dunfermline respectively, as noted 373 RWCS – para’s as noted. 374 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 per Dixon J at 378. -- 117 of 140 -- 118 with approval by Deane and Dawson JJ, a “shilly-shallying attitude in regard to the contract” and “procrastination … persistently practised”. [491] In all respects, I find that the respondents have shown that the applicant repudiated the contract and they acted properly in bringing the contract to an end on 9 September 2019. As such, it follows that the applicant’s purported termination of the contract by its solicitors’ letter of 10 September 2019 was of no effect. The Competing Claims The Applicant’s Claim for Practical Completion Stage Payment and Variations [492] As I have noted it earlier, in this proceeding the applicant presses its claim for its final claim, such being its practical completion stage payment as adjusted and its variations, including the disputed variations. Cumulatively that is $109,970.17. [493] It does so on two bases, namely payment of an amount owing under the contract, in effect a claim in debt, alternative as an award for damages for breach of the contract, expressed as a failure to pay the final claim and the variation claim 3B.375 It does not however, despite the termination of the contract, express its claim in the alternative one in restitution on a quantum meruit basis, and one was not advanced in the hearing, although in his oral closing address the applicant’s Counsel raised for the first time the doctrine of substantial performance seemingly to ‘plug a hole’. I will return to these two issues shortly. The claim in damages and/or debt [494] In my opinion, these claims can be readily disposed of. [495] As I have already addressed at some length earlier in these reasons, the applicant’s entitlement to payment under the contract never arose because it did not trigger that entitlement by the correct application of the provisions of clause 25 of the general conditions of contract. In that regard, not long after making the oral submission that I noted in paragraph [454] herein where the respondents’ Counsel summed up that issue, he then summed up this issue with the following submissions, which again I consider to be apt and worthy of notation. Now, Member, as I mentioned at the start, it is only by operation of either clause 25.3 or clause 25.6 that the owner’s obligation to pay the builder the final claim may arise. It doesn’t matter whether the owners were correct in their assertion that the builder hadn’t reached practical completion for the – for the notice under clause 25.4 to be valid and simply not a requirement under clause 25.4. So in the circumstances, it’s clear that the owner’s obligation to pay the builder the final claim never arose. As such, the final claim is not a debt due or owing under the contract and there was not a breach on the part of the owners for failing to pay the amount of claim in the final claim. So to that extent, we’re dealing with both aspects of the orders sought by the builder.376 375 See Application for Domestic Building Dispute filed 19 September 2019 Part B Item 1. See also Annexure A thereto at paragraphs 21(a) and (b). The quantum of the claim in Part B Item 1 is higher than that pressed because it includes other amounts as they are identified in Annexure A paragraph 21. The total of the figures in paragraphs 21(a) and (b) is slightly different to this total but only by a few cents and nothing turns on that. 376 T.4-29 Lines 26 to 35. See also RWCS at para’s 71 to 75. -- 118 of 140 -- 119 [496] I agree with this submission. In the absence of an entitlement arising under the contract prior to termination, such being an accrued right that would have survived termination by the respondents,377 there is no debt due, nor a right that has not been satisfied such as to constitute a breach. On that basis, there is simply nothing to support the applicant’s claim for payment of these amounts. Can a claim in restitution proceed in the alternative? [497] I thus return to that which I noted above, being the absence of the applicant expressing its claim, at least in the alternative, as one in restitution. [498] In his oral closing submissions, the respondents’ Counsel referred me to a decision which he stated to be in Partington v Urquhart (No 2) [2018] QCATA 132. However, there is no such decision.378 The citation for Partington v Urquhart (No 2) is [2018] QCATA 120. [499] In that matter, the primary issues on appeal concerned the builder’s entitlement to a payment of a progress stage claim under a building contract in circumstances were the work was defective or incomplete, there was the need for assessment of the costs of rectification, and whether, in the alternative to its claim under the contract, the builder was entitled to payment on a quantum meruit basis.379 In that matter whilst the builder purported to terminate the contract, on appeal it was held that it had not lawfully terminated the contract.380 The owners however did not terminate the contract. It will thus be immediately observed that there are some similarities to the present case save only for the issue of termination. [500] The respondents’ Counsel specifically referred me to paragraph 200 of the decision in Partington. It is convenient to extract that and the relevant paragraphs that follow it here.381 [200] Having concluded that builder was not entitled to make the enclosed stage progress claim or terminate the contract, it follows that the builder had no entitlement to damages for breach of contract from the homeowners. Accordingly, we must turn to consider whether the builder is, nonetheless, entitled in the alternative, to restitutionary relief by way of a claim on a quantum meruit. …. [201] The High Court in Pavey & Matthews Pty Ltd v Paul held that the right to recover on a quantum meruit does not depend on an implied contract, but rather on a claim to restitution or one based on unjust enrichment. The basis for the action lies in the defendant’s acceptance of works performed by the party claiming a quantum meruit. It is not enough to show that the work was beneficial to the defendant. [202] We are satisfied that the Partingtons accepted the benefit of the work done by the builder. They have utilised and built on the work done by the builder in the enclosed stage, and although rectifying it where necessary, have otherwise had the benefit of it. 377 See McDonald & Anor v Dennys Lascelles Limited (1933) 48 CLR 457, 476-477. 378 The medium neutral citation given by Counsel is to the matter of Baker & Anor v Body Corporate for Elanda on the Park, such being irrelevant to the subjects of this proceeding. 379 Partington v Urquhart (No 2) is [2018] QCATA 120, [1]. 380 Ibid, [183], [199], and [213]. 381 Partington v Urquhart (No 2) is [2018] QCATA 120 paragraphs as noted. Footnotes omitted. -- 119 of 140 -- 120 [203] The contractor in such a case is entitled to recover the fair and reasonable value of the work performed. The assessment of this value is a question of fact to be determined according to all the relevant circumstances. This ordinarily will involve an assessment of the reasonable cost of the benefit provided. In the case of materials, this will be the fair market price, and in the case of work, reasonable remuneration at current rates. [501] At first reading of this, one might form the view that it supports the applicant in terms of being able to press its claim as one in restitution. This is because it would seem appropriate to say that the respondents have accepted the benefit of the work done by the applicant notwithstanding that they have had to rectify it. Such a view would, in my opinion, not be correct. This is because of the reasoning in Cochrane v Lees [2021] QCATA 74, a matter to which I have referred earlier. It is apposite to once again do so to the extent the Appeal Tribunal considered the question of a builder’s entitlement to payment on a quantum meruit basis, in that matter in the circumstances of where the builder was seeking payment of the practical completion stage payment after the contract in question had been terminated by the homeowners. [502] In that matter the Appeal Tribunal considered Partington expressing these views.382 [101] In Partington v Urquhart (No 2) the builder purported to terminate the contract when the owner did not make a stage payment. The QCAT Appeal Tribunal held that the builder had not lawfully terminated. Despite this, the builder was found to be entitled to claim on a quantum meruit basis for the work carried out in respect of the relevant stage. Unlike Hoenig v Isaacs however, Partington did not address whether the building contract concerned was entire. [102] There is an obvious tension between the strictly limited entitlement of a builder to recover payment for work done under an entire contract, and the principles applicable to claims for recovery by a builder on a quantum meruit basis. If a builder is disentitled from claiming the unpaid balance under an entire contract on the basis that the condition precedent to payment, the completion of the entirety of the works, has not been satisfied, permitting the same builder to recover on a quantum meruit basis would clearly seem to undermine the bargain entered into between the parties in the contract. [503] The Appeal Tribunal then went on to consider the decision of the High Court in Mann v Patterson (2019) 267 CLR 560, in particular noting the reasoning of Gageler J therein that where it is the defaulting party who seeks to recover the value of services rendered to the innocent party it is a more difficult category of case, and the case law to which his Honour referred therein.383 [504] The learned Members of the Appeal Tribunal then noted the following secondary source commentary: [105] Carter on Contract offers the following commentary regarding the entitlement of a plaintiff to recover on a quantum meruit where it is the plaintiff who is in breach: 384 382 Cochrane v Lees [2021] QCATA 74. Footnotes omitted. 383 Ibid, [103] and [104]. 384 Ibid. Footnotes omitted. -- 120 of 140 -- 121 Where the plaintiff is the party in breach a restitutionary claim for the value of partial performance will not usually be available. The general principle is therefore that where the plaintiff was the party whose breach or repudiation led to termination, a restitutionary claim to recover as on a quantum meruit is not available unless the benefit of the work done has been freely accepted. Since the defendant's request (as expressed in the contract) has not been satisfied, it is open to the defendant to deny that any benefit was received from the plaintiff's performance, or to deny that retention of the benefit is unjust. Thus, where an employee is lawfully dismissed under a lump sum employment contract, the employer is not at common law obliged to pay for the employee's service prior to dismissal. The classic decision is Sumpter v Hedges, where the plaintiff abandoned a building contract after doing work on the defendant's land. It was taken for granted that, as the contract was entire, the plaintiff was unable to recover on the contract. The plaintiff's claim to a quantum meruit was rejected because it was impossible to imply a right of recovery while the contract between the parties governed their rights and obligations. In addition, the defendant had no choice but to accept the work as it had been done on his land. Therefore, no obligation to pay could be implied from the receipt of partial performance. However, when completing the work himself the defendant had used certain building materials which the plaintiff had left on the ground. As the defendant had clearly accepted the benefit of the materials which could have been returned, the plaintiff was entitled to be paid. Nothing was said on appeal to doubt the correctness of that aspect of the trial judge's decision. [505] As will be observed there is a reference therein to Sumpter v Hedges. The Members noted the approval of Sumpter v Hedges by the High Court in Steel v Tardiani, being a decision to which Gageler J had referred in Mann v Paterson, observing that to the extent it concerned the principles governing the right of recovery by a party in breach, it remains good law, and that the principles apply in respect of entire contracts.385 [506] The learned Members then continued and, in my opinion, it is apposite to simply extract the remainder of these reasoning on this issue as it is directly apposite to the present circumstances.386 [107] Accordingly, where a builder is in breach and seeks to recover for work performed on the basis of a quantum meruit, it is not sufficient that the builder establishes that building work has benefited the owner. The builder must establish that the owner had a free choice as to whether to accept or reject the alleged benefit. We will return to this issue later. [108] The terms of the contract between the parties are also directly relevant when considering a builder’s claim in quantum meruit. In Mann v Paterson Constructions Pty Ltd the High Court, referring to the right of a builder to recover on a quantum meruit without reference to the contract between the parties, said that: 385 Ibid, citing Steele v Tardiani (1946) 72 CLR 386; Forman & Co Pty Ltd v The Ship `Liddesdale’ [1900] AC 190; Cooper v Australian Electric Co Ltd (1922) 25 WALR 66. 386 Ibid. Footnotes omitted. Emphasis added. -- 121 of 140 -- 122 To allow a restitutionary remedy by way of a claim for the reasonable value of work performed unconstrained by the terms of the applicable contract would undermine the parties' bargain as to the allocation of risks and quantification of liabilities, and so undermine the abiding values of individual autonomy and freedom of contract. … (this would) allow a windfall to the respondent that is distinctly inconsistent with the respect due to the contract made by the parties as the charter whereby their commercial risks were allocated between them and their liabilities limited. To allow a restitutionary claim would be to "subvert the default remedial regime of contract law, to which the parties, by contracting, have submitted", and accordingly to subvert the contractual allocation of risk. [109] Putting to one side the fact that here it was Mr Lees the builder who was the defaulting party, the statement in Mann is relevant for present purposes. The house contract, being an entire contract, required completion of the works by Mr Lees before he was entitled to the contract price. To enable Mr Lees, in circumstances where because of his breach the contract was terminated and the building works were therefore left incomplete, to recover on a quantum meruit would be to impermissibly subvert the contract between the parties which required entire performance of the building works as a condition precedent to payment. The allocation of risk in the contract was clear. Mr Lees was not entitled to be paid unless he performed the building works in accordance with the contract. [110] This is sufficient to dispose of Mr Lees’ entitlement to recover on a quantum meruit for any part of the unpaid house contract price, including variations claimed which were not agreed. However even if we are not correct in thus concluding, we are not satisfied that the Cochranes freely accepted the benefit of the work performed by Mr Lees. [111] The work performed by Mr Lees in respect of the practical completion stage was not completed in accordance with the contract. On the evidence before us, the Cochranes had no choice but to accept the work done as performed, given it was work on their land. As such there cannot be said to have been any choice about it. We make this finding in the absence of evidence from Mr Lees about the circumstances in which the variation works came to be performed. Had Mr Lees led evidence that, for example, the Cochranes had acquiesced in the works being undertaken, we may have formed a different view as to whether they had freely accepted the benefit of the variation works. The outcome is, in large part, the consequence of the way in which Mr Lees conducted his case. [112] Accordingly, Mr Lees has no entitlement to claim recovery on a quantum meruit in respect of the work performed under the house contract. This includes the variations. [507] There is also one more critical aspect. Whilst the issue is that no such claim has been advanced, moreover there is no evidence at all387 as to the reasonable cost of the benefit provided in terms of materials provided and their fair market price, or work 387 This is as correctly noted by the respondents’ Counsel in his oral closing. See T.4-29 Line 15 to 17. -- 122 of 140 -- 123 done and the remuneration for which valued at rates current at the time of performance. [508] For this reason, and in particular the emphasised passages within the authorities to which I have referred, in my opinion there is simply no basis upon which the applicant’s claim could be assessed or awarded on a restitutionary basis. What about the doctrine of substantial performance? [509] Given these circumstances, as I have noted it earlier it is apparent that the applicant’s Counsel embarked on an admirable effort to recover the applicant’s case to some degree by arguing that the applicant is entitled to rely on the doctrine of substantial performance as a premise for its entitlement to payment in the alternative to its claim in debt or in damages.388 This is so notwithstanding that no such premise was pleaded in the applicant’s originating documents nor raised in the applicant’s Counsel’s opening. [510] In doing so he again referred me to the decision in Pivovarova v Michelsen (2019) QCA 256, on this occasion citing that which Crow J said therein at [63], but in order to understand that which his Honour said it is helpful to also consider the preceding paragraph and following paragraphs given that is the entire extent to which his Honour considered this doctrine, and accordingly I extract them here: Grounds 16(iv) and 19 – Substantial Performance [62] By grounds 16(iv) and 19, the applicant alleges that the Second Appeal Tribunal erred in law: “16. In finding that there has been no denial of natural justice and errors in law and failing to find that: … (iv) The learned Member at first instance, as an alternative, based her decision to award the funds including interests (sic) to the Respondent pursuant to the substantial performance doctrine on the evidence, cross-examinations of the witnesses, materials, etc. which were related to the Practical Completion stage only; 19. In failing to find that by awarding the payment to the Respondent pursuant to the substantial performance, the learned Member automatically rejected any payment to the Respondent pursuant to the Practical Completion due to two claims, being substantial performance and practical completion, cannot apply at the same time and with the same circumstances in accordance with the contract, the Domestic Building Contracts Act 2000 and the doctrine of the substantial performance.” [63] Whilst it may be accepted by grounds 16(iv) and 19 that an error of law is alleged, the difficulty, again, for the applicant, is that she needs 388 See T.4-102, 105, and 106. -- 123 of 140 -- 124 the leave of the Court of Appeal to appeal these grounds of appeal. These grounds of appeal have no prospects of success because the Member made findings on the applicability of the doctrine of substantial performance as an alternative to the finding that practical completion works had been reached. This was an orthodox and prudent finding of the Member. [64] If the Second Appeal Tribunal had accepted the applicant’s argument that the respondent was not entitled to payment on the basis of practical completion then the respondent may have succeeded on the basis of the doctrine of substantial performance. Absent the later conclusion, it would have been necessary for a further hearing before the tribunal if the respondent had failed on the practical completion issue. [65] Sections 3 and 4 of the Act require efficiency in the conduct of tribunal proceedings and the Member’s alternative findings on the basis of the doctrine of substantial performance are therefore entirely appropriate. [511] The decision of the Member to which Crow J refers is the decision at first instance in Michelsen v Pivovarova [2017] QCAT 235. Therein the learned Member made these observations on the doctrine of substantial performance and the case as it was presented before her: [29] The law relating to substantial performance was set out in Thompson Residential Pty Ltd v Hart & Anor [2014] QDC 132 at [65]: The position in relation to building contracts was summed up recently by Bathurst CJ, with whom the other members of the court agreed, in Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 at [94]: “In the case of contracts which at least on their face appear to be entire contracts, particularly lump sum building contracts, courts have been reluctant to construe complete performance of the works as an essential pre- condition for payment. Rather, in circumstances where there has been substantial performance they have treated a failure to complete as a breach of a non-essential term of the contract not disentitling the builder to contractual payment for the work done but, rather, giving the proprietor a right of setoff or claim for damages for the cost of completing the work or rectifying any defects.” [30] This work was performed pursuant to a lump sum building contract. Not all breaches of a contract are actionable. Mr Michelson has substantially performed his obligations under the contract, with only minor flaws and incomplete work, and as such, should not be found to be in breach on the basis of the minor deviations from the strict terms of the contract. [31] Ms Pivovarova has also complained that Mr Michelsen has not provided her with all of the documents required according to the contract. This is a nonspecific complaint, which does not identify exactly which documents she believes are missing. Given that Mr Michelsen’s evidence is that he has provided her with all of the documents in his possession, and there is no specific evidence before -- 124 of 140 -- 125 me that supports any documents being missing, I do not consider this a basis for a finding that the contract has been breached by Mr Michelson. This is also consistent with the evidence that the certifier has issued the final inspection certificate. Even if Mr Michelsen did not provide every certificate, the fact that the property has been certified supports a finding of substantial compliance with his obligations. [512] The applicant’s Counsel also referred me to that first instance decision and that passage, in particular the passage of Bathurst CJ referred to therein, and made the submission “It’s exactly what’s happening here”.389 As I understood that submission and the short exchange that followed between Counsel and me, it was that the work was substantially complete sufficient to make it practically complete, albeit not precisely in accordance with the contract, and so it was really a question of diminution in value that is addressed by the counterclaim.390 [513] Given that this was raised only in closing oral submissions by the applicant’s Counsel, it was not something the respondents’ Counsel had addressed me on and, accordingly, I afforded him the opportunity of doing so by way of further written submissions. The applicant was afforded the opportunity to replying to any such submissions. [514] The respondents’ submissions were once again relatively extensive.391 Whilst these submissions addressed the nature of the doctrine and the manner in which it has been applied, I do not consider it necessary to discuss them all in any detail, save only for one which I extract here: 31. The Respondents submit that, in the context of the Contract the Applicant was required to strictly comply with the Contract such that doctrine of substantial performance did not apply. This is because: (a) Clause 4.8 of the General Conditions expressly denies the Respondents the opportunity to set-off any claim they may have against the Applicant for defective or incomplete performance of the works. This provision is entirely inconsistent with the operation of the doctrine of substantial performance which contemplates the entitlement of the Respondents to claim a set-off; 392 (b) the Contract provided: (i) an objective standard within the meaning of the term ‘practical completion’; and (ii) a specific procedure for the parties to resolve disputes regarding whether the works were practically complete (clause 25.2 to 25.6); and (c) the obligation of performance under the Contract was divisible, as was the right to recovery in respect of the completed stages, which 389 T.4-102 Line 33. 390 See T.4-102 Line 35 to T4.103 Line 1. 391 Respondents’ further submissions filed 30 August 2021 para’s 27 to 36. 392 There is a readily apparent typographical error here. The relevant subclause wherein the respondents are denied a right of set-off is subclause 4.9. -- 125 of 140 -- 126 was limited to the amount due under the Contract on completion of those stages. [515] The applicant’s submissions in reply were short.393 It relied on its Counsel’s oral closing submission in terms of the Court of Appeal decision in Pivovarova v Michelsen394 at [63] and [64], submitting that I am “bound to consider its application”, and then continues simply stating: The works have been substantially performed and certified by the Form 21 – Final Inspection Certificate. The assessment of [the] doctrine must proceed in the ordinary way, being the practical completion stage payment adjusted for credits and variations minus damages for rectification of defects and omissions. [516] The reliance on Pivovarova can be quickly dealt with. Whilst I agree that I am ‘bound to consider it’ it does not mean I am bound to follow it if I consider it is distinguishable or otherwise not relevant. [517] When Counsel first referred me to this case on the issue of practical completion, he stated that both Fraser JA and Boddice J agreed with the reasoning of Crow J.395 He then referred me to paragraphs [51] and [52] of Crow J’s reasons. I extracted those at paragraph [406] herein and in the footnote thereto I noted the express agreement of their Honours to that reasoning. However, Counsel did not qualify his submission in any way that the agreement of their Honours was limited. I thus understood the submission to be that their Honours had agreed with the reasoning of Crow in its entirety, later note the qualification expressed by Fraser JA. [518] In his further written submissions, the respondents’ Counsel properly brought to my attention that neither Fraser JA nor Boddice J agreed with Crow J in respect of his reasoning in paragraph [63]. On my reading of the entirety of the Court’s reasoning in that matter, I agree. Whilst Fraser JA agreed with Crow J that the applicant had not identified any error of law affecting the decision of the QCAT appeal tribunal affirming the finding that practical completion had been reached, to the extent the ground of appeal under consideration concerned the doctrine of substantial performance, Fraser JA said That question should be left for a case in which it is necessary to decide it. It is not necessary to decide it or any aspect of grounds 16(iv) and 19 in this matter.396 [519] A similar observation was made by Boddice.397 [520] The respondents’ Counsel also appropriately referred to the first instance decision of this Tribunal under consideration by the Court of Appeal, that being Michelsen v Pivovarova [2017] QCAT 235 to which I referred in paragraph [511] herein, submitting that it is clearly distinguishable on its facts given that the decision therein related to minor deviations to the plans and specifications that were “so trifling that 393 Applicant’s further submissions filed 3 September 2021 – para’s 13 to 16. 394 Supra. 395 T.4-99. 396 Pivovarova v Michelsen (2019) QCA 256, [11]. 397 Ibid, [16]. -- 126 of 140 -- 127 they do not have any bearing on whether practical completion was reached”.398 I agree. The issue of the roof drainage and the associated underground drainage in the present matter go well beyond being trifling. [521] All this being said, in my opinion the applicant’s reliance on the Court of Appeal decision in terms of an asserted entitlement to relief on the doctrine of substantial performance is misplaced. It does not assist the applicant. [522] I thus turn to the respondents’ Counsel’s submissions to the extent I have extracted them above. He makes a valid point. Sub-clause 4.9 of the general conditions expressly denies the respondents the opportunity to set-off any claim they may have against the applicant for defective or incomplete work, and that this provision is entirely inconsistent with the operation of the doctrine of substantial performance. [523] Whilst not expressed as such in the respondents’ further submissions on this issue, it seems to me given that which I discuss in the following paragraphs it should be read in conjunction with subclause 4.8, the respondents’ Counsel having raised this subclause in his further submissions on the issue of whether the applicant has an accrued right to payment. For ease of reference, I extract both of the subclauses here: 4.8 Other than in relation to the final claim, payment of a progress claim is on account only and any such payment is not to be taken as evidence against or an admission that the works have been performed in accordance with the contract. 4.9 Subject to the rights provided in Clause 32.2, the owner is not entitled to set-off against, or in reduction of any amount due to the builder under this contract, any claim that the owner may have against the builder. [524] As the respondents’ Counsel has correctly noted in his further submissions, those provisions fall within clause 4 of the general conditions that provide the mechanism for payment of each of the progress claims, whilst the procedure for the final claim is dealt with separately in clause 25. [525] In my opinion, those provisions are directly relevant to the question of whether the doctrine of substantial performance is open to be engaged by the applicant. It may be recalled that the respondents’ Counsel had earlier referred me to the decision in Partington v Urquhart (No 2) is [2018] QCATA 120 in terms of the question whether there was an option available to the applicant for a claim in restitution. Whilst not referred to by either Counsel on the question of substantial performance, the reasoning of the Appeal Tribunal in that matter is instructive to the extent it also considered the doctrine of substantial performance, and particularly in light of the respondents’ submission to which I have just referred in terms of subclause 4.9. Therein the Appeal Tribunal also considered some of the authorities to which the learned Member referred at first instance in Michelsen v Pivovarova [2017] QCAT 235 within her reasons which I have extracted in paragraph [511] herein. In my opinion it is apposite to extract the relevant parts from the Appeal Tribunal’s reasons, albeit they are lengthy, which I do here.399 398 Respondents’ further written submissions filed 30 August 2021 para 36 referring to Michelsen v Pivovarova [2017] QCAT 235, [18]. 399 Partington v Urquhart (No 2) is [2018] QCATA 120. Footnotes omitted. Citations as included in footnotes embedded within the text. Emphasis by way of italics is as it appears in the Appeal Tribunal’s reasons. Emphasis by way of bold is mine. -- 127 of 140 -- 128 [79] Clause 4.8 provides that payment of a progress claim is on account only, and the owner has no right of set-off. The intention of a clause requiring payment on account, with no set-off, was considered in Miller v Lida Build Pty Ltd [2013] QCA 332. It reflects a contractual intention that there be an unimpeded flow of progress payments whilst the contract is on foot. The proposition presupposes that the stage for payment has been reached. If that be so, then a progress payment is not to be reduced by a sum which represents the cost of rectification of defects, a sum which will inevitably be difficult to quantify. [80] The submission of a progress claim does not automatically entitle the contractor to payment of the amount claimed. It is only if the enclosed stage works have been completed and a written claim issued which states the matters required by clause 4.4, that the obligation to pay will arise. [81] The meaning of the word “completion” in clause 4.3 turns on the proper construction of the contract. In Thompson Residential Pty Ltd v Hart [2014] QDC 132 it was held: Once the entitlement to a progress payment is based on the completion of a particular stage as defined, it is satisfaction of that definition rather than practical or functional considerations which determines whether the enclosed stage has been achieved for that purpose. It is not enough to say that what has been done also achieves enclosure of the building in a practical sense, if the contractual definition has not been satisfied. [82] Thus, the question whether the stage was “complete” and whether the builder was entitled to the enclosed stage progress payment depends on whether, on the facts and proper construction of the contract, the definition of enclosed stage was satisfied at the time the builder made the claim. For the reasons below, the contract terms make completion of each stage a condition precedent to payment of the progress payments. [83] In reaching this conclusion, we considered whether the doctrine of substantial performance applies. Whether the doctrine of substantial performance applies is itself a question of construction of the contract. Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184, [95] citing Hoenig v Isaacs [1952] 2 All ER 176, 180-181. It has been held that the doctrine of substantial performance does not apply to the question of whether individual progress stages have been completed. Thompson Residential Pty Ltd v Hart [2014] QDC 132; McGibbo Pty Ltd v Willex Projects Pty Ltd [2013] QDC 313, [71] cf Bolton v Mahadeva [1972] 1 WLR 1009. However, there are decisions to the contrary. Tan Hung Nguyen v Luxury Design Homes Pty Ltd [2004] NSWCA 178, [79]. [84] In our view, for the reasons below, the doctrine of substantial performance does not apply under this contract in assessing whether the payment stage has been reached. Whether a stage has been completed requires a common sense approach to the interpretation of the definition in the context of the contract as a whole. Such an approach has been held not to justify a substantial difference between what has occurred and what is required. Tan Hung Nguyen v Luxury Design Homes Pty Ltd [2004] NSWCA 178, [72]. Conversely, a slight or trivial difference might mean that, in a practical sense, the definition has been satisfied. [85] McGill DCJ in Thompson Residential Pty Ltd v Hart said as follows: -- 128 of 140 -- 129 The question therefore is whether the contract is to be construed as one where completion of a particular stage of the work is a condition precedent to payment of the progress payment in relation to that stage, or is one where a failure to complete is seen as a breach of a non-essential term not disentitling the builder to contractual payment. In circumstances where there is no separate obligation on the builder to complete the work required for each particular stage, a failure to do so cannot be characterised as a breach of a non-essential term: it is not a breach of a term at all. The position is simply that the contract provides that, if the builder does X, the owner is obliged to make a specific payment. In these circumstances, I cannot see how the doctrine of substantial performance can apply. Unless the builder does X, the obligation to make the payment does not arise. [86] That the doctrine does not apply here is also consistent with the fact that clause 4 does not permit any set-off. As McGill DCJ held in Thompson Residential Pty Ltd v Hart in considering a similar clause: It has always been part of that doctrine that substantial performance would not give rise to an obligation to recover the whole of the price, but only the price subject to a reduction in one way or another in respect of the incomplete or deficient work. But cl 4 is clearly inconsistent with that approach, the amount payable is specified expressly in schedule 2 of the contract, and cl 4.8(b) provides expressly that the owner has no right of set-off. It is one thing to say that something less than strict and complete performance of the entire contractual obligation is sufficient to give rise to an obligation to pay the contract price with an adjustment for any deviation from the requirements of the contract, and another to say that something less than strict and complete performance will justify the obligation to pay the contract price without any reduction. In the circumstances it seems to me clear that this clause on its true construction provides a condition precedent to payment of the progress payments, at least in respect of all of them except the last, so that the approach adopted by Samuels JA in HDFI is applicable. The doctrine of substantial performance does not apply. [87] This was also the approach applied in Chelton Pty Ltd v Stanton (Unreported, NSW District Court, 5875 of 2000) and McGibbo Pty Ltd v Willex Projects Pty Ltd [2013] QDC 313, [71] where the owners were held entitled to strict compliance with the contract requirements before a progress payment claim could be made. [88] The rationale for requiring strict compliance rather than substantial compliance was discussed in Morgan v S & S Constructions Pty Ltd [1967] VR 149, 156 where it was held: For where compliance with the standard of completion required by the contract, affects other obligations than payment, …400 there is no room for the application of a principle which substitutes substantial 400 I have excluded part of this reasoning where it raises the prospect of’ guarantors’ being affected, such not being relevant to the present matter. -- 129 of 140 -- 130 performance for the standard of a completion which is specified. It is a principle foreign to the considerations involved. [89] …401 [90] Finally, this has been the approach applied in the Tribunal. In Perkins v Queensland Building and Construction Commission [2017] QCAT 283. it was held: In the case of stage payments it has been held that there is no scope for the application of any theory of substantial performance, excluding trivial failures or failures borne of impracticalities (Cardona v Brown [2012] VSCA 174, [74], referring with approval to Hudson’s Building and Engineering Contracts, 12th ed, Sweet & Maxwell, [3-076]). The approach has been described as a relatively strict one which only requires progress payments to be made where noncompliance with the documented requirements for that stage is “purely trivial” and, while “extreme exactitude” is not envisaged, “effective and satisfactory completion” of the stage is required. (Maples v Winterview Pty Ltd v Liu [2015] ACTSC 58, [77]). The strictness of this approach could be addressed by alternative drafting such as existed in the contract considered in Hometeam Constructions Pty Ltd v McCauley ([2005] NSWCA 303) which imposed an obligation to make a progress payment for the “substantial completion” of each stage. [91] Here, the contract provides for a stage claim to be made after the completion of each specified stage of construction: clause 4. As a matter of construction, we are satisfied that the contract provides that completion of the stage in each case is a condition precedent to payment for that stage. Adopting the reasoning of McGill DCJ, we find that the doctrine of substantial compliance does not apply under the contract. [526] On reading of this lengthy extract, it may be observed that in Partington the circumstances were such that the payment for the ‘enclosed stage’ was in issue, that being a ‘progress’ payment, and thus it is different to the present case where it is the ‘final claim’ that is in issue, one which may be viewed not as a progress payment. But, in my opinion, they may be readily read as applicable to the circumstance where the question of practical completion stage being reached is in issue. This is because it will be recalled that for clause 25 to operate in terms of the applicant’s entitlement to be paid the ‘final claim’ practical completion has to have been reached, it being a defined ‘stage’ as provided for under Schedule 2 of the general conditions of contract. [527] The concluding submission from the applicant that I have extracted in paragraph [515] should also be recalled. It speaks in terms of the ‘practical completion stage payment’. In that regard it is apposite to refer to the decision of the Appeal Tribunal in Cochrane v Lees [2021] QCATA 74 once again. It will be recalled that therein the builder was seeking payment of the practical completion stage payment, after the contract in question had been terminated by the homeowners. 401 Ibid, but on this occasion in terms of ‘financiers’. -- 130 of 140 -- 131 [528] The reasoning on that issue is somewhat lengthy, much of it to some degree addressing that which I have already discussed above. There is no need for me to repeat it. I merely note the following parts of the reasoning which I respectfully adopt, and on which I should say I consider I am bound to follow, in reaching the conclusion I have on this issue.402 [87] The doctrine of substantial performance operates to mitigate the application of the entire obligation rule. In order for the doctrine to operate, a builder must establish that the contractually stipulated works have been performed save for defects of a minor character. [88] According to the learned authors of Hudson’s Building and Engineering Contracts, citing Romer LJ in Hoenig v Isaacs: This doctrine is that payment is due in an entire contract if there is substantial performance, that is “a man fully performs his contract in the sense that he supplies all that he agreed to supply but what he supplies is subject to defects of so minor character that he can be said to have substantially performed his promise.” [91] In Thompson Residential Pty Ltd v Hart & Anor McGill DCJ considered the authorities on substantial performance under an entire contract, including Hoenig v Isaacs. [92] He considered the proposition (said to be formulated from Hoenig v Isaacs) that the authorities say that the promise to complete the work should be construed as a term of a contract rather than a condition, so that only a breach going to the root of the contract would entitle the other party not to pay the contract price. [93] McGill DCJ rejected that proposition. Instead, he suggested the following question should be asked: whether the contract is to be construed as one where completion of a particular stage of the work is a condition precedent to payment of the progress payment in relation to that stage, or is one where a failure to complete is seen as a breach of a non-essential term not disentitling the builder to contractual payment. [94] … [95] The obligations set for Mr Lees to achieve practical completion were stated in clause 28.2 of the house contract: (a) To produce to the Cochranes satisfactory written evidence that all relevant inspections and approvals required by the Sustainable Planning Act 2009 and the Building Act 1975 and by any body having relevant jurisdiction had been satisfactorily completed; (b) To complete and sign a Form 6 defects document or similar identifying agreed and non-agreed minor defects and minor omissions; (c) Say when he would remedy the agreed matters; 402 Cochrane v Lees [2021] QCATA 74. Footnotes omitted. Emphasis added. -- 131 of 140 -- 132 (d) Give the Cochranes a completed and signed form 7 Certificate of Practical Completion stating that date as the date of practical completion; (e) Hand over the works to the Cochranes. [96] He did none of that. In our opinion his failure in these matters cannot be treated as a breach of a non-essential term. His failures amounted to breach of an essential term and as such it disentitled him to payment for any part of the practical completion stage. [529] Whilst the factual circumstances in that matter are different to that which occurs in the present matter to the extent of what was not done therein to achieve practical completion, it is not enough to then say the case is distinguishable. I have already found that practical completion had not been reached by the applicant. This is enough to equate it to the circumstances in that matter and the findings of the Appeal Tribunal as to the application of the doctrine of substantial performance in circumstances where the payment being sought is that which becomes payable only on practical completion being achieved. [530] All that being said, for the reasons I have given in the preceding paragraphs, and in particular the emphasised passages within the authorities to which I have referred, in my opinion, in the circumstances of this contract and this proceeding, the doctrine of substantial performance has no application. Was there otherwise an accrued right to payment? [531] I thus now turn to the final point for discussion under this issue. [532] Given the manner in which the applicant’s case unfolded in its Counsel’s oral closing submissions, it seemed to me that an argument was being made that the applicant had retained an accrued right to payment should I find that the respondents had lawfully terminated the contract. This arose from that submission on the question of practical completion I noted in paragraph [398] and discussed in paragraphs [402] to [404] herein.403 There was then the following exchange between Counsel and me:404 Mr Eylander … The owners have taken possession of the site, which triggers clause 26. The owners have taken possession, in their evidence, on the 9th of September 2019. 26.1 comes into play and the builder must be paid the contract price. Member I want to ask you a question about that. Mr Eylander Yes. Member The owners took possession upon termination of the contract. They didn’t take possession before the contract was terminated, is that right? So they terminated the contract. They then took possession of the house. Mr Eylander Well, there’s a termination letter of the 9th of September and their evidence is they took possession of the home on the 9th of September as well. Whether it’s a case of one occurred at a certain time in the morning or whether the locks were 403 T.4-100 Line 29 onwards. 404 T.4-100 Line 29 to T.4-101 Line 30. -- 132 of 140 -- 133 changed first thing in the morning, there’s no evidence of that before the tribunal. Member But is it not open on the material as it has been presented that upon termination of the contract – where do I find the termination letter again, the Preston Law termination letter? Mr Eylander That is at TMK26. …. Member So if we read that letter, the last two paragraphs: Our clients accept your client’s repudiation and elect to terminate the contract effective immediately. Our clients are now entitled to immediate possession of the site to the exclusion of your client. … and then requests delivery of keys and remote controls, et cetera, et cetera, et cetera. It seems to me, and I’ll give this some further thought and consider any submissions you want to make about it, but it seems to me that the communication of the acceptance of the repudiation and the election to terminate has been made and then, because it says, “Our clients are now entitled”, that is something that immediately follows that, to possession of site. So you’ve got the act of taking possession following the very next second, in theory, upon the termination of the contract. So what occurs upon termination of the contract is the clause that you’re referring me to that says upon taking possession of the site, practical completion is deemed to have been achieved, does that survive termination or is it no longer operative? Mr Eylander I may have to consider that further. [533] Accordingly, I gave directions for the filing of further written submissions on this point, such to be given in conjunction with any further submissions to be made on the question of substantial performance. Each side did so, these forming part of the further submissions to which I have already referred on that question. [534] As I understand it, the applicant’s further submission on this issue was as a result of the further consideration to which the applicant’s Counsel averted. It was a continued reliance on sub-clause 26.1 of the general conditions, which forms part of ‘Clause 26 – Owner taking possession’, but one to be read in conjunction with subclause 26.10 therein. Whilst I extracted the first of those subclauses earlier in these reasons, for ease of reading I will do so again here, on this occasion together with subclause 26.10. 26.1 The owner is not entitled to: (a) take control of, (sic) possession of or use the works or any part of the works; or (b) receive the keys for the works, -- 133 of 140 -- 134 until the builder has been paid the contract price, adjusted by any additions or deductions made under the contract. … 26.10 The rights of the builder and obligations of the owner under clause 26 continue to be in effect after the ending of this contract. [535] The applicant’s Counsel then makes this submission: The owners purported to terminate the contract on 9 September 2019 … after which the homeowners took possession of the works. Accordingly, the homeowners were obligated to pay the contract price, adjusted by any additions or deductions made under the contract. [536] As I understood that submission, it is that the applicant had an accrued right at the time of the termination of the contract, such being sufficient to support its claim for payment in this proceeding advanced as either damages or debt. I touched on this briefly at paragraph [496] herein as to why I did not agree with such an argument, although I will elaborate on it in some more detail given the applicant’s express reliance on subclause 26.10. [537] Whilst the respondents’ Counsel’s further written submissions preceded the making of the applicant’s further submissions, they have aptly dealt with this point. To some degree they repeated the essence of the earlier submissions in regard to the operation of clause 25 of the general conditions in terms of the applicant’s entitlement to be paid the final claim, which I have already discussed at length in these reasons and need not revisit here. However, their Counsel also made these further submissions which I consider directly relevant to my determination of this issue and thus I extract them here:405 Legal Principles 5. When a contract is terminated at common law, both parties are discharged from the further performance of the contract, except that the rights that have already been unconditionally acquired are not discharged unless the contract provides to the contrary. 6. Whether a term operates after discharge is a question of construction of the contract. No accrued right to payment beyond the fixing stage progress claim. … 8. Schedule 2, Part B sets out the progress payment schedule agreed between the parties.4 The parties agreed to a non-standard progress payment schedule which provided for six (6) stages. Schedule 2 Part B expressly states that: “NOTE: All progress payments, other than the deposit, must directly relate to the progress of carrying out the subject works at the building site, and must be proportionate to the value of the subject work that relates to the claim, or less than that value.” 405 Respondents’ further written submissions filed 30 August 2021 – para’s as noted. Footnotes and emphasis omitted. -- 134 of 140 -- 135 9. The Practical Completion stage is the sixth (6th) and final progress claim stage that was agreed in the progress payment schedule. 10. Clause 4 of the Contract provides the mechanism for payment of each of the progress claims. However, the procedure for the final claim is dealt with separately in clause 25.5. … 12. It is clear that the Contract expressly provided for stages, specified that progress payments were payable upon completion of each stage, and that the obligation of performance under the Contract was divisible. Therefore, the right to recovery in respect of the completed stages was limited to the amount due under the Contract on completion of those stages (together with any variations that may have agreed). … 21. The consequences of the applicant failing to satisfy these requirements is that the right to payment of the final claim did not unconditionally accrue to the Applicant prior to termination on 9 September 2019. 22. Accordingly, the Respondents were discharged from the performance of any obligation that had not unconditionally accrued, which clearly included payment of the final claim. 23. As to the question of which terms, if any, survive termination, the only provision that appears to deal with this issue in any way appears to be clause 26.10 which states: “26.10 The rights of the builder and obligations of the owner under this clause 26 continue to be in effect after the ending of this contract.” 24. However, clause 26 relates to a circumstance where the owner has taken possession of the works at a time in which the contract remained on foot. At a time prior to the termination of the contract at common law due to the Applicant’s repudiation. 25. Once the contract has been terminated the Applicant no longer had an entitlement to possession of the land such that there was no “illegal early possession” on the part of the Respondents. That being the case, the obligations and rights contemplated within clause 26 have not accrued such that there are no continuing rights which could have survived for the purposes of clause 26.10. 26. Accordingly, there are no provisions of the Contract which preserve the Applicant’s entitlement to payment of the final claim after the Contract was terminated on 9 September 2019. [538] I agree with these submissions in their entirety, and respectfully adopt them as part of my reasons. Notwithstanding the words of subclause 26.1 that disentitles the respondents to take possession or receive the keys until payment has been made, and the asserted corresponding ‘right’ of the applicant to be paid if possession is taken earlier, if one does exist, upon the respondents’ act of lawful termination no such right accrued. The accrued rights of the applicant contemplated by subclause 26.10 are only those afforded it as they are expressed in clause 26, namely those in subclauses 26.3 to 26.9, when the respondents breach subclause 26.1, which they can only do whilst the contract remains on foot when this subclause remains in force. On a reading of -- 135 of 140 -- 136 clause 26 of the general conditions as a whole, this must be so. In no place within clause 26 is there a right to payment created that has not otherwise accrued under the contract. [539] For these reasons, in my opinion the applicant’s reliance on subclause 26.10 is also misplaced. I do not accept its submissions on it having an accrued right as being correct. [540] In all respects, on the basis of that which I have discussed in paragraphs [532] to [539] herein, I find that there is no accrued right to payment. The Applicant’s Claim for Legal Costs for the Respondents’ Breach of Contract [541] The applicant claims $5,869.00 plus interest for the legal costs it asserts it incurred as a consequence of the respondents’ asserted breach of contract by wrongfully refusing to pay the final progress payment after practical completion, and/or their repudiation of the contract, and/or them taking possession.406 This can be disposed of quickly. [542] I have already found that the applicant was not entitled to payment of the final claim, that practical completion had not occurred, that the respondents did not repudiate the contract but rather their termination of the contract was lawful, and that they took possession only after the act of termination. Accordingly, there is simply no basis for the applicant’s claim. Such was properly and appropriately conceded by the applicant’s Counsel in his oral closing submissions.407 [543] I do not allow this claim. The Respondents’ Counterclaim for Damages [544] As I observed in paragraph [130], the respondents’ claim for damage is premised on a breach of statutory warranty, inter-alia a failure to have carried out the works in accordance with all relevant laws and legal requirements, and that the works will be carried out in an appropriate and skilful way, with reasonable skill and care, and in accordance with the plans and specifications. [545] On the premise of my discussion earlier in these reasons under the heading of Defective Work, I have found as a fact that much of that complained of by the respondents was defective. In my opinion, based on that which I have said earlier, the following words of Henry J in Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor, are apt and I respectfully adopt them. The nature and extent of the defective works went well beyond the superficial and readily remedied flaws which might occur in progressing an otherwise competent construction process. … It is difficult to think of a more fundamental requirement of a construction contract that that the works are to be performed in an appropriate and skilful way, with reasonable care and skill, in accordance with plans and specifications and in accordance with relevant law.408 [546] Given this finding of fact, and my finding that the respondents lawfully terminated the contract, a result of which is that they became entitled to pursue a claim in damages 406 Ex. 25 – para 19. 407 T.4-106 Line 21. 408 Mousa & Anor v Vukobratich Enterprises Pty Ltd & Anor [2019] QSC 49,[196] and [197]. -- 136 of 140 -- 137 against the applicant such being their counterclaim raised in this proceeding, I find that the respondents are entitled to relief they seek for the costs of rectification of the said works. But this is not for the entirety of that relief sought. As I have noted in my discussion on those defective work items, they have not been successful on all of them in terms of me finding the work to be defective, and in some instances whilst I have found the work to be defective the respondents’ evidence was insufficient for me to be able to reach a finding on the reasonable cost of rectification. [547] The items which I found not to be defective are the ‘Bathroom niche’, the ‘Feature timber and slat aluminium wall’, the ‘Painting’, and the ‘Roof awning’, and ‘Electrical solar panels’, whilst also noting that the respondents did not press their claim for the ‘Garage door sensors’. [548] The items which I found to be defective are the ‘Front Entrance Doorway and Door’, the ‘Security Screens’, the ‘Kitchen and butler pantry sinks’, the ‘Mouldy plasterboard to the salon’, the ‘Polished concrete floor’, the ‘Boatshed wall’, the ‘Streetscape tiles’, the ‘Roofing, box gutter and valley gutters’, the ‘Underground/external drainage’, and the ‘Cleaning’. Associated with the existence of this defective work is part of the ‘Tender and project management tasks, engineering and drafting services’ as claimed by Mr Thirkell. [549] It follows from those findings that the respondents have succeeded in their case for breach of contract, namely the breach of warranty, and as such their claim for damages should be quantified at the reasonable cost of rectification. The unfortunate reality however for the respondents is that for many of the items I found to be defective, there was an absence of sufficient evidence as to the issue of cost to remedy at the amounts they pressed for at the conclusion of the hearing. Accordingly, my assessment of the damage has been determined solely on the evidence that was before me. That was particularly so in regard to the ‘Kitchen and butler pantry sinks’ and the ‘Underground / external drainage’. However, notwithstanding that absence of evidence there is the finding that this work was defective and to that end, in my opinion, an award of damages should reflect that. Accordingly, I will allow the respondents nominal damages of $1.00 on each of these two items. [550] The cumulative effect of my findings on the issue of defective work, and the reasonable costs of rectification of same, is that the respondents are entitled to their counterclaim in the sum of $44,206.32 the calculation of which is shown in the following Table. Item # Description of Work Quantum 1 Front entrance doorway and door (See paragraphs [155] to [172] herein) $ 8,000.00 2 Security screens (See paragraphs [173] to [179] herein) $12,906.00 3 Bathroom niche (See paragraphs [180] to [189] herein) $0.00 4 Kitchen and butler pantry sinks $1.00 -- 137 of 140 -- 138 Item # Description of Work Quantum (See paragraphs [190] to [227] herein) 5 Salon plasterboard (See paragraphs [228] to [242] herein) $4,129.40 6 Polished concrete floor (See paragraphs [243] to [255] herein) $1,500.00 7 Feature timber and slat aluminium wall (See paragraphs [256] to [262] herein) $0.00 8 Painting (See paragraphs [263] to [273] herein) $0.00 9 Boatshed wall (See paragraphs [274] to [282] herein) $2,253.92 10 Streetscape tiles (See paragraph [283] herein) $550.00 11 & 12 Roofing / Box Gutter and Valley Gutters (See paragraphs [284] to [319] herein $8,223.00 13 Underground / external drainage (See paragraphs [320] to [344] herein) $1.00 14 Roof awning (See paragraphs [345] to [358] herein. $0.00 15 Garage door sensors (See paragraph [359] herein. $0.00 16 Cleaning See paragraph [360] herein. $1,100.00 17 Electrical solar panels (See paragraphs [361] to [374] herein) $0.00 18 Thirkell Engineers – Tender and project management tasks, engineering and drafting services (See paragraphs [375] to [392]herein. $5,542.00 Total $44,206.32 [551] This however is not the end result for the respondents. As the respondents’ Counsel has properly and correctly noted in his closing submissions, the balance of the adjusted -- 138 of 140 -- 139 contract price is to be deducted from this amount, such being $104,015.13 being the adjusted practical completion stage claim, namely $80,414.50, plus the aggregate of the agreed variations, namely $23,600.93.409 [552] What of course will be immediately observed is that deduction has the net effect that the amount payable to the respondents is Nil. The Respondents’ Counterclaim for Loss of Rent [553] The respondents press a claim for $15,400 for loss of rent on their property in which they had to continue to reside pending completion of their new house the subject of this proceeding. This is said to cover the period commencing 9 September 2019 when the contract was terminated by them, ending 25 March 2020 being the date they said they could occupy the new house.410 [554] This claim can be disposed of quickly. Whilst there is evidence from Ms Katrina Gobbet as to her opinion of a reasonable weekly rental value that could have been earned on the property,411 and evidence from Mr Theo Kaminaras of a lease he and his wife entered into with a tenant commencing 12 November 2020,412 there is no evidence of lost opportunities to rent the property during the period in question. That is, the respondents’ evidence is entirely inadequate to prove this claim. They have failed to meet their evidential burden such that there is simply not an issue for me to consider. Accordingly, I do not allow their claim for this item. Conclusion [555] My reasons given in the preceding paragraphs for the decisions I have ultimately reached in this proceeding are extensive. One of the reasons for this was the confused and confusing nature of much of the evidence, as well as the absence of probative value in much of that which was presented. [556] The very nature of building disputes means that in most instances the outcome will turn on the expert evidence. This proceeding is no exception. It is unfortunate that the expert evidence presented to this Tribunal was not of the quality that should be expected, and the outcome for the parties reflects that. It is regrettably a sad state of affairs when parties to a contract to build a house as a home end up in this Tribunal and the outcome is a hollow one. The end result has often been described as a shattered dream for the owners. I fear that this is one of those. [557] At the start of these reasons, in paragraphs [6] to [8], and then as it was narrowed by the conclusion of the hearing as I have described it in paragraphs [14] to [16], I set out the applicant’s claim in this proceeding. In paragraphs [10] and [11], and then as it was narrowed by the conclusion of the hearing as I have described it in paragraphs [17] to [20], I set out the respondents’ counterclaim in this proceeding. On the basis of all which I have discussed in these reasons, the following is my conclusion on those respective claims and the outcome of the contest between the parties. 409 RWCS para’s 223 to 225. 410 RWCS para 226 to 228. 411 Ex. 17. 412 Ex. 23. -- 139 of 140 -- 140 [558] The applicant’s claim for damages for breach of contract, or alternatively its claim for payment of an amount owing, expressed as the respondent’s failure to pay the final claim and variation claim 3 B, should be dismissed. [559] The applicant’s claim for damages for the respondents’ asserted repudiation and wrongful termination, or alternatively its claim for payment of an amount owing, being claims for pool maintenance and legal costs, should be dismissed. [560] The applicant’s claim for interest on damages, or alternatively on an amount owing, should be dismissed. [561] Subject to that which I say in the next paragraph, the applicant should pay the respondents damages in the amount of $44,206.32, representing the costs to rectify the incomplete and defective work. [562] The unpaid practical completion stage payment of $80,414,50 and the unpaid agreed variations of $23,600.93 should be set-off against the applicant’s liability to pay those damages, with the net result being that there is no amount to be paid by the applicant to the respondents in satisfaction of the said damages. [563] The respondents’ claim for damages for loss of rental income should be dismissed. [564] The respondents’ claim for damages for inconvenience and loss of enjoyment should be dismissed. [565] In terms of the interest claimed by the respondents, it was originally expressed in their counterclaim as a claim under the Civil Proceedings Act 2011 (Qld), however by the conclusion of the hearing it was expressed as being one pursuant to s.77 of the Queensland Building and Construction Commission Act 1991 (Qld). Under s.77(3)(c) of that Act, this Tribunal is afforded power to award interest on damages at the rate, and calculated in the way, prescribed under a regulation. That regulation is the Queensland Building and Construction Commission Regulations 2018 (Qld) s.54. There is no contract rate applicable to damages payable to the respondents, nor is there any evidence before me of a rate otherwise agreed between the parties. As such subparagraph 54(1)(c) of the Regulations governs the rate, such being 10% per annum, and under subparagraph 54(2) therein it is payable on and from the day after the day the amount became payable until and including the day the amount is paid. In my opinion the relevant date is the day after the respondents effectively commenced their counterclaim in this proceeding, such effectively being 22 October 2019. [566] In terms of costs, at the conclusion of the hearing the respondent pressed for an order that the applicant pay their costs of the proceeding, whereas the applicant sought an order that costs be reserved. Given the outcome of this proceeding in my opinion the prudent course of action is that I hear further from the parties on the issue of costs, and as such it seems to me that the proper present order is that sought by the applicant together with directions for the filing of any relevant material and submissions on the issue of costs. [567] Orders will be made reflecting the outcome as I have described it in these concluding paragraphs. -- 140 of 140 --