Baker v Aquatics Pool Painting Pty Ltd [2020] QCAT 280

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Baker v Aquatics Pool Painting Pty Ltd [2020] QCAT 280 PARTIES: SHAHLA BAKER (applicant) v AQUATICS POOL PAINTING PTY LTD (respondent) APPLICATION NO/S: BDL226-19 MATTER TYPE: Building matters DELIVERED ON: 8 July 2020 HEARING DATE: On the Papers HEARD AT: Brisbane DECISION OF: Adjudicator Stroud ORDERS: Aquatics Pool Painting Pty Ltd pay to Shahla Baker the sum of $1,252. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – where work performed by unlicensed builder – effect of non-compliance with s 42(1) of the Queensland Building and Construction Commission Act 1991 (Qld) – whether homeowner entitled to be reimbursed money paid for building work Queensland Building and Construction Commission Act 1991 (Qld), s 42; Schedule 1B s 13, s 33; Schedule 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 10 REPRESENTATION: Applicant: Self-represented Respondent: Self–represented APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) -- 1 of 6 -- 2 REASONS FOR DECISION What is this matter about? Shahla Baker engaged Aquatics Pool Painting Pty Ltd (APP) to apply a sealant to her swimming pool (the Works) for an agreed amount of $4,500. Ms Baker paid APP a deposit of $2,000. Ms Baker claims that APP refused to complete the Works and is seeking an order that that APP refund her the deposit. APP states Ms Baker terminated the contract with them and that they should not be required to refund the total amount as they have already spent over $2,000 on materials and labour for the job. No written contract was entered into for the Works and APP was not licensed to do the work. Does the Tribunal have Jurisdiction? The Tribunal has original jurisdiction to hear and decide ‘building disputes’.1 The definition of building dispute includes a ‘domestic building dispute’. 2 A domestic building dispute includes a claim or dispute arising between a building owner and a building contractor related to the performance of reviewable domestic work or a claim or dispute in negligence related to the performance of reviewable work.3 The building work performed by APP is associated building work. Domestic building work includes associated building work4 and is ‘reviewable domestic work’.5 No written contract No written contract for the Works was entered into between the parties. Ms Baker relies upon an email dated 6 June 2019 from APP and an undated quote/invoice in the amount of $4,5006 as evidence of the contract with APP. Because the Work is domestic building work above the regulated amount,7 a regulated contract was required to be entered into, and be in writing, dated and signed by the parties. Because the quote did not comply with the formal statutory requirements including signing by the parties, it has no effect.8 What happened? It is not in dispute that the terms of the agreement between the parties was that Ms Baker would pay a deposit of $2,000 with the balance of $2,500 to be paid on 1 Sections 9 and 10 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) and s 77(1) of the Queensland and Building and Construction Commission Act 1991 (Qld) (QBCC Act). 2 QBCC Act, Schedule 2 (definition of ‘building dispute’). 3 QBCC Act, Schedule 2 (definition of ‘domestic building dispute’). 4 ‘Domestic building work’ includes the renovation, alteration, extension, improvement or repair of a home and associated work – QBCC Act, Schedule 1B s 4. 5 QBCC Act, Schedule 2 (definition of ‘reviewable domestic work’). 6 Refer Applicant documents, date stamped by QCAT 14 November 2019. 7 QBCC Act, Schedule 1B s 1 – ‘regulated amount’ means $3,300 or the higher amount, if any, prescribed by a regulation. 8 QBCC Act, Schedule 1B ss 13, 14. -- 2 of 6 -- 3 completion of the work. The deposit was paid by Ms Baker on 6 June 2019 and on 7 June 2019 APP attended the property to commence work. It appears that at this attendance APP discovered that the pool had a leak and informed Ms Baker that the leak would need to be rectified by an alternate contractor before they continued with the work. The fact that APP were not prepared, or were not qualified, to rectify the leak is a source of contention by Ms Baker. Ms Baker asserts she had great difficulty in engaging another contractor to attend and repair the leak, and that after contacting more than 10 tradespersons she eventually engaged ‘John’ from Total Pool Renovations who discovered a further 14 leaks in addition to the one detected by APP. It appears that the leaks were rectified sometime in late July 2019 by Total Pool Renovations. It is not completely clear on either parties’ material what transpired after this date. Mr Todd Lindsay of APP seems to suggest it was Ms Baker who terminated the contract with APP as she was not happy that they were unable to repair the leaks.9 Ms Baker asserts that APP refused to return and complete the Works after the leaks were repaired.10 Ms Baker claims that she has suffered financial loss as a result of APP’s refusal to complete the Works as she had to engage Total Pool Renovations to complete the Works at the same cost as APP, namely $4,500 in addition to the $2,000 paid to APP. The email communication between the parties between 17 and 30 July 201911, indicates that it was Ms Baker who initially sought to terminate the contract between the parties but changed her mind after realising a full refund would not be given by APP. By that stage APP were no longer interested in completing the Works due to the communication that had ensued between them. What followed then was discussion regarding the amount of refund that would be given. APP offered Ms Baker a refund of $500. This was rejected by Ms Baker and APP made a second offer of $700 which was also rejected.12 Whilst not expressly stated, it appears the basis of the rejection by Ms Baker was that APP did not do work to the value they claimed. Is APP entitled to payment for the Works? APP were not licensed to carry out the work. Section 42 of the QBCC Act exhibits a clear intention to render illegal both the making and the performance of a contract by an unlicensed builder insofar as building work is concerned. The effect of s 42(1) of the QBCC Act is that an unlicensed person is prohibited from either entering into a contract to perform building work or actually performing building work. The consequence of this prohibition is that the contract is unenforceable by the builder. By s 42(3) of the QBCC Act, a builder is not entitled to any monetary or other consideration for undertaking building work in respect of which the builder does not hold a licence. By s 42(4) of the QBCC Act an unlicensed builder may claim reasonable remuneration for performing building work but only if the amount claimed: 9 Email of Todd Lindsay to CAD dated 29 April 2020. 10 Email of Shahla Baker to CAD dated 2 March 2020. 11 Refer Application for domestic building dispute filed 23 August 2019. 12 Email dated 30 July 2019 from Todd Lindsay to Colin Baker. -- 3 of 6 -- 4 (a) is not more than the amount paid by the person in supplying materials and labour for carrying out the building work; and (b) does not include allowance for any of the following— (i) the supply of the person’s own labour; (ii) the making of a profit by the person for carrying out the building work; (iii) costs incurred by the person in supplying materials and labour if, in the circumstances, the costs were not reasonably incurred; and (c) is not more than any amount agreed to, or purportedly agreed to, as the price for carrying out the building work; and (d) does not include any amount paid by the person that may fairly be characterised as being, in substance, an amount paid for the person’s own direct or indirect benefit. The onus is upon the builder, in this case APP, to prove a claim pursuant to s 42(4) of the QBCC Act. In Cook's Construction P/L v SFS 007.298.633 P/L (formerly trading as Stork Food Systems Australasia P/L)13 the Court of Appeal considered the operation of s 42: [37] Section 42(1) renders illegal the making and performance of a contract for building work by an unlicensed builder. It is the conduct of the builder which is struck at. The provision is plainly intended to operate for the benefit of the other party to the building contract. [38] It is clear from the terms of s42(3) and s42(4) that neither provision purports to create a right of action to recover money in any person. Rather, each subsection is concerned to regulate a cause of action for payment which is assumed to have arisen, either under contract or under the principles of the common law which permit claims for payment for work done at the request of another. These common law claims have variously been described as claims in quantum meruit or in quasi-contract or to prevent unjust enrichment. [39] Section 42(3) is, in terms, concerned to sterilise any claim which might otherwise be made under a contract or under the common law by an unregistered builder. Section 42(4) is concerned to impose limitations upon the right of action at common law which it preserves against the sterilising effect of s42(3). Without s42(4), the entitlement of an unregistered builder to payment which would, apart from the Act, arise upon the performance of work by the builder, would be defeated by s42(1) and s42(3). … [41] It is true that, as the appellant argues, the operation of s42(3) of the Act is qualified by s42(4). But it is also clear that s42(4) permits an unlicensed builder to claim “reasonable remuneration” for carrying out building work, but only if the amount claimed satisfies the criteria in paragraphs (a) to (d). It is only the amount of the claim so quantified that the builder may recover despite s42(3). Absent a good claim so quantified, the operation of s42(3) is, for practical purposes, unqualified by s42(4) … 13 [2009] QCA 75. -- 4 of 6 -- 5 In Thompson v Shen and Kao14 Member Allen applying Cook's Construction P/L v SFS 007.298.633 P/L (formerly trading as Stork Food Systems Australasia P/L) stated at [10]: In my opinion it is clear that the effect of s42(1) is that a builder who is unlicensed is not able to make a claim under any contract for the performance of building work. This would without any other provision still enable the unlicensed builder to make a claim such as in quantum meruit. Where Keane JA says that s42(3) does not create rights he is stating that the right already exists in quantum meruit. On the one hand s42(3) sterilises that right which has the effect of enabling the home owner to avoid payments of any amounts claimable or paid under the contract. Section 42(4) on the other hand ensures that any claim the unlicensed builder makes for quantum meruit is limited to an amount which complies with the requirements of s42(4)(a) to(d) and the onus is on the builder to prove that claim to the fullest extent. That is that he must ensure that all of the requirements of paragraphs (a) to (d) are met otherwise his claim will not be allowed as was the case in Cooks Construction. The entitlement of a homeowner to recover monies paid to an unlicensed builder is the reciprocal of the builder’s disentitlement to receive the payment.15 In this case, Ms Baker is seeking a refund of the $2,000 paid to APP. APP has the onus to establish a statutory claim for reasonable remuneration for performing the work. APP assert that it incurred costs of $1,553 comprising: (a) Labour – $650; (b) 4 x Epotec Sealer (7 purchased @ $170 plus the GST each) – $748; (c) 3 x 4 litre acid wash – $65; and (d) Tapes, rollers etc – $90.16 It does not appear to be in dispute that some work was performed by APP. Ms Baker however, does dispute the 13 hours claimed for labour by APP as excessive.17 Pursuant to s 42(4)(b)(i) of the QBCC Act, the claim by APP for its own labour is disallowed; as such, this issue does not need to be traversed further. A further issue raised by Ms Baker is APP’s breach of the QBCC Act in claiming a deposit in excess of the 10% allowed.18 Whilst this may subject APP to a penalty imposed by the QBCC it does not impact on APP’s entitlement to payment for the Works. Deducting the claim for labour19 the maximum amount APP is entitled to receive is the cost of materials in the amount of $903 subject to those costs being reasonably incurred. The only evidence before the Tribunal in relation to the actual cost incurred by APP is a Tax Invoice dated 7 June 2019 from Hitchins Technologies for the supply of seven x Epotec WB sealer in the sum of $1,380.50.20 APP have conceded that only 14 [2017] QCAT 33. 15 Yongwoo Park v Betaland Pty Ltd [2017] QCAT 228, [22]. 16 Email of Todd Lindsay to CAD dated 29 April 2020. 17 Handwritten note on email from Todd Lindsay to Ms Baker dated 22 July 2019. 18 QBCC Act, Schedule 1B s 33(1)(a). 19 QBCC Act, s 42(4)(i). 20 Email of Todd Lindsay to CAD dated 29 April 2020. -- 5 of 6 -- 6 four of the seven sealants were used. I have calculated the cost of the four sealants to be $748. I am therefore satisfied that pursuant to s 42(4) of the QBCC Act, APP are entitled to retain the amount of $748 for the cost of materials and that the balance of the deposit of $1,252 is to be refunded to Ms Baker. I therefore order that Aquatics Pool Painting Pty Ltd pay to Shahla Baker the sum of $1,252. Orders The order of the Tribunal is that Aquatics Pool Painting Pty Ltd pay to Shahla Baker the sum of $1,252. -- 6 of 6 --