Bocquee v Baltus [2019] QCAT 280

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Bocquee v Baltus [2019] QCAT 280 PARTIES: LYNN BOCQUEE (applicant) V LAURENCE ANTHONY BALTUS (respondent) APPLICATION NO/S: BDL010-19 MATTER TYPE: Building matters DELIVERED ON: 17 September 2019 HEARD AT: Brisbane DECISION OF: Senior Member Brown ORDERS: Laurence Anthony Baltus must pay Lynn Bocquee FIFTEEN THOUSAND, ONE HUNDRED AND TWENTY-SEVEN DOLLARS AND TWENTY CENTS ($15,127.20) by 4:00pm on 15 October 2019. Laurence Anthony Baltus must pay Lynn Bocquee’s costs fixed in the amount of THREE HUNDRED AND THIRTY-EIGHT DOLLARS AND TWENTY CENTS ($338.20) by 4:00pm on 15 October 2019. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – LEGALITY - where domestic building contract does not comply with Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) – whether a breach of contract can be established CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – DAMAGES – MEASURES OF – where contract entered into for the performance of building work – where builder is unlicensed - where builder performs unlicensed building work – where builder not entitled to consideration for performing building work – assessment of damages TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – SPECIAL RELATIONSHIPS AND DUTIES – OTHERS – where homeowner vulnerable – whether builder owed duty of -- 1 of 9 -- 2 care to homeowner – damages payable where work is defective Queensland Building and Construction Commission Act 1991 (Qld) s 77, sch 1B s 13(2), s 13(5), sch 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48 Basscorp Pty Ltd v Kosik [2007] CCT B411-05 Bellgrove v Eldridge (1954) 90 CLR 613 Chad Roberts Constructions Pty Ltd v Johnson Tiles Pty Ltd [1993] ABT BC9302692 Cook's Construction P/L v SFS 007.298.633 Pty Ltd (formerly trading as Stork Food Systems Australasia Pty Ltd) [2009] QCA 75 Corporation of the City of Adelaide v Jennings Industries Ltd (1985) 156 CLR 274 Mertens v Home Freehold Co [1921] 2 KB 526. Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound) [1961] AC 388 Perre v Apand (1999) 198 CLR 180 Robinson v Harman (1848) 1 Ex 850; 154 ER 363 Sablewell Pty Ltd V Kirstborough Pty Ltd and Ors QBT BC9505897 Ventura v Svirac (1961) WAR 63 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 REPRESENTATION: Applicant: Self-represented Respondent: No appearance APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION Ms Bocquee contracted with Mr Baltus to perform tiling works at Ms Bocquee’s townhouse. Ms Bocquee says that the works performed by Mr Baltus are defective. Background to the dispute On 31 October 2017 Mr Baltus provided Ms Bocquee with a written quote for the tiling of the patio at the rear of Ms Bocquee’s townhouse. The cost of the works was $4,226.00. The quote states ‘no GST charged’. The quote included the number of Mr Baltus’s builders’ licence. Ms Bocquee says that she was unaware that Mr Baltus was, in fact, unlicensed. -- 2 of 9 -- 3 Ms Bocquee verbally accepted the quote. Ms Bocquee says that the scope of works the parties agreed that Mr Baltus was to undertake were contained in the quote. The quote was not signed by either party. Mr Baltus was required to: (a) Etch wash existing surfaces with a suitable acid solution; (b) Lay 82 square metres of tiling and grout. [6] The quote stipulated that “[t]he project will be carried out in a professional manner using quality products to ensure a first class finish”. The works commenced on 5 November 2017 and were completed on 2 December 2017. Ms Bocquee says that during the course of the works she paid Mr Baltus $2,640.00 of the agreed price. Ms Bocquee says that the work performed by Mr Baltus was defective and that she refused to pay to him the balance of the contract price, being $1,586.00. Ms Bocquee lodged a complaint with the Queensland Building and Construction Commission (‘QBCC’). The QBCC advised Ms Bocquee that Mr Baltus did not hold a QBCC license for the work performed.1 The QBCC assessed the building works as defective and, because Mr Baltus was unlicensed, issued him with a direction to have the works rectified by a licensed contractor.2 Mr Baltus did not comply with the direction. The QBCC approved a claim under the statutory insurance scheme for the cost of rectification of part of the building works, being that section of the tiling under the awning at the property. The QBCC appointed All Seasons Building Services Pty Ltd (‘ASBS’) to complete the works under the insurance claim. As part of the claim, Ms Bocquee was required to pay $1,586.00 to ASBS. This reflected the balance payable to Mr Baltus under the original agreement. Ms Bocquee paid this amount to ASBS on 27 August 2018. Ms Bocquee also contracted directly with ASBS to rectify the remainder of the defective tiling work performed by Mr Baltus. Ms Bocquee paid to ASBS a total of $12,487.20 in respect of the rectification work in various instalments on 27 August 2018, 17 September 2018, 27 September 2018, and 5 October 2018. In order to complete the rectification work a shed in Ms Bocquee’s yard was required to be temporarily removed. Ms Bocquee paid to Brisbane Garden Sheds $510.00 to have the shed removed and then reconstructed once the rectification works had been completed. Ms Bocquee seeks damages of $12,997.20 being the total of the cost of the rectification works she paid to ASBS ($12,487.20) and the cost of removing and replacing the shed ($510.00).3 Ms Bocquee also claims the QCAT filing fee. 1 QBCC letter to Ms Bocquee dated 22 February 2018. 2 QBCC letter to Mr Baltsu dated 5 April 2018. 3 Affidavit of Lynn Bocquee sworn 3 July 2019. -- 3 of 9 -- 4 Statutory framework – building disputes The relevant enabling Act in respect of the present dispute is the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). The tribunal has jurisdiction to hear and decide building disputes.4 A building dispute can be a domestic building dispute or a minor commercial building dispute or a major commercial building dispute.5 A domestic building dispute includes a dispute between a building owner and building contractor relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work.6 ‘Building contractor’ and ‘building owner’ are defined in the QBCC Act.7 ‘Reviewable domestic work’ means domestic building work under s 4 of Schedule 1B of the QBCC Act. The renovation, alteration, extension, improvement or repair of a home is domestic building work.8 Domestic building work includes work associated with the renovation, alteration, extension, improvement or repair of a home.9 Associated work includes paving and landscaping.10 In deciding a building dispute the tribunal may order the payment of an amount found to be owing by one party to another.11 Statutory framework - bringing proceedings in the tribunal to an early end Proceedings in the tribunal may be brought to an early end in circumstances where the tribunal considers a respondent in a proceeding is acting in a way that unnecessarily disadvantages an applicant by not complying with a tribunal order or direction without reasonable excuse. In such circumstances, the tribunal may make its final decision in the proceeding in the applicant’s favour.12 Consideration I make the following findings: (a) Mr Baltus agreed with Ms Bocquee to undertake, and subsequently undertook, domestic building work; (b) Ms Bocquee was a building owner and Mr Baltus was a building contractor; (c) the dispute relates to the performance of reviewable domestic work; (d) the Tribunal has jurisdiction to hear and decide the dispute; (e) service of the application for domestic building dispute has been properly effected upon Mr Baltus;13 4 QBCC Act, s 77. 5 Ibid, sch 2 (definition of ‘building dispute’). 6 Ibid, (definition of ‘domestic building dispute’). 7 Ibid, (definition of ‘building contractor; definition of ‘building owner’) 8 Ibid, sch 1B, s 4(1)(b). 9 Ibid, sch 1B, s 4(3). 10 Ibid, sch 1B, s 4(4). 11 Ibid, s 77(3). 12 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 48. 13 Applicant’s Affidavit of Service filed 22 January 2019. -- 4 of 9 -- 5 (f) Mr Baltus has failed to comply with any directions made by the Tribunal including failing to file a response to Ms Bocquee’s application; (g) in failing to comply with Tribunal directions Mr Baltus has unnecessarily disadvantaged, and continues to unnecessarily disadvantage, Ms Bocquee. The disadvantage to Ms Bocquee is that she is unable to progress her claim to final resolution. [19] I have considered the matters at s 48(3) of the QCAT Act. In the absence of any evidence to the contrary I am satisfied that Mr Baltus has deliberately failed to comply with directions. I am satisfied that it is appropriate to make a final decision in the proceeding in favour of Ms Bocquee. The applicant’s cause of action Ms Bocquee does not frame her claim by reference to any specific cause or causes of action. Not unlike many applicants she says simply that the works are ‘substandard’. I will consider Ms Bocquee’s claim by reference to: (a) breach of contract; (b) breach of statutory warranty; (c) breach of duty. Ms Bocquee says that the building works completed by Mr Baltus were defective and that the defects were such that the works needed to be completely replaced. A domestic building contract for which the contract price is more than $3,300 is a regulated contract.14 A domestic building contract for an amount more than $3,300 and less than $20,000 is a level 1 regulated contract.15 By s 13(2) of Schedule 1B of the QBCC Act, a level 1 regulated contract must, in order to have effect, be in writing and signed by the parties. A level 1 regulated contract only has effect if it complies with these requirements.16 The quote provided by Mr Baltus to Ms Bocquee is not signed by either party. The quote does not satisfy the requirements for a level 1 regulated contract and as such has no effect. Accordingly, Ms Bocquee cannot rely upon the agreement in her claim against Mr Baltus. The QBCC Act implies into every regulated contract certain warranties.17 Because the quote relied upon by Ms Bocquee does not meet the requirements of a regulated contract, with the result that the contract is of no effect, the implied warranties also do not apply. 14 QBCC Act, sch 1B, s 5(a). 15 Ibid, sch 1B, ss 1 (definition of ‘regulated amount’), 6(1)(a), 7(2); Queensland Building and Construction Commission Regulation 2018 (Qld) s 45. 16 QBCC Act,, s 13(5) 17 Ibid, Schedule 1B, s 19. -- 5 of 9 -- 6 A domestic building dispute includes a claim or dispute in negligence related to the performance of reviewable domestic work. In a claim for breach of duty an applicant must establish: (a) the respondent owed to the applicant a duty of care; (b) the respondent breached the duty; and (c) as a result of the breach of duty the applicant has suffered loss. I am satisfied that Ms Bocquee relied upon Mr Baltus to perform the building works with appropriate care and skill. I am satisfied that Mr Baltus owed to Ms Bocquee a duty of care to perform the building work in an appropriately skilled and competent manner. I am satisfied it was reasonably foreseeable that in the absence of Mr Baltus exercising appropriate care and skill in performing the building work that Ms Bocquee may suffer loss. In her affidavit, Ms Bocquee says that the works carried out by Mr Baltus “were defective in that there were loose tiles, uneven tiles, missing grouting, incorrectly coloured grouting, missing tiling, ‘drummy’ tiling and lines between tiles being curved rather than staright”. Ms Bocquee relies on the report prepared by a QBCC building inspector.18 The report concludes: (a) The grout was not of a suitable trade quality leading to efflorescence; (b) The installation of the tiles was not of a suitable trade quality: (i) some tiles were significantly higher than others posing a risk to health and safety; (ii) some tiles had become debonded from the substrate leading to loose tiles; (iii) the tiles had not been installed true and straight; (c) The installation of drilled holes to the brickwork resulted in unfilled holes to the mortar; (d) The installation of the clothesline was not of a suitable trade quality. 18 Report of Simon Whitecross dated 27 March 2018. -- 6 of 9 -- 7 [28] The QBCC report also identified that Mr Baltus had not completed the installation of a small section of tiles behind the AC condenser unit in accordance with the contract. I take this to be a reference to incomplete works. Relying upon the uncontradicted evidence contained in the QBCC report, I find that Mr Baltus failed to perform the building work in a proper and workmanlike manner in breach of the duty owed to Ms Bocquee. Damages [30] The object of an award of damages for breach of duty is to restore the applicant to the position in which it would have been placed if the wrongful act had not been committed. Damages may include the cost of rectification work.19 [31] Ms Bocquee relies upon the contract she entered into with ASBS for the removal and disposal of the existing tiles and for the purchase and laying of new tiles. In the absence of any evidence to the contrary I am satisfied that this work was required to place Ms Bocquee in the position she would have been had Mr Baltus not failed to perform the works in a proper and workmanlike manner. The contract price, paid in full by Ms Bocquee, is $12,487.20. I allow this amount in full in respect of the cost of rectification of the building works. [32] In relation to the payment of $510.00 for the temporary removal of the shed and reconstruction of the shed I am satisfied that this was required to complete the rectification works and I allow the amount in full. Unlicensed Building Work By s 42(1) of the QBCC Act, a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class under the Act. By s 42(3) of the QBCC Act, a person who performs unlicensed building work is not entitled to any monetary or other consideration for doing so. Any monetary or other consideration paid to an unlicensed builder must be repaid.20 It is clear from the provisions of the QBCC Act that the prohibition on unlicensed building work is in respect of: (a) An unlicensed contractor agreeing to perform building works; 19 Damien J Cremean, Michael H Whitten and Michael F Sharkey, Brooking on Building Contracts (LexisNexis, 5 th ed, 2013) 349. 20 Cook's Construction P/L v SFS 007.298.633 Pty Ltd (formerly trading as Stork Food Systems Australasia Pty Ltd) [2009] QCA 75. -- 7 of 9 -- 8 (b) An unlicensed contractor performing building works; (c) An unlicensed contractor receiving payment for performing building works; (d) An unlicensed contractor retaining any payment received for performing building works. Ms Bocquee has not filed a copy of Mr Baltus’s QBCC licence history. In conducting a proceeding the tribunal may inform itself in any way it considers appropriate.21 A search of Mr Baltus’s license on the QBCC licensee database reveals that Mr Baltus held a valid QBCC license up until 4 March 2016 at which time Mr Baltus’s licence was suspended.22 Accordingly, I find that Mr Baltus was in breach of s 42(1) of the QBCC Act when he undertook to carry out the building work in September 2017 and when he subsequently performed the building work. I find that Mr Baltus was not permitted to carry out the building work nor was he entitled to any monetary consideration for so doing. I find that, pursuant to s 42(3) of the QBCC Act, Mr Baltus was not entitled to the payment of $2,640.00 that he received from Ms Bocquee after he commenced the work and before the work was concluded. Mr Baltus has no entitlement to retain the money he was paid by Ms Bocquee. There is no application before the Tribunal by Mr Baltus pursuant to s 42(4) of the QBCC Act. Mr Baltus must therefore pay to Ms Bocquee the amount of $2,640.00. The balance payable under the agreement [38] The agreed price for the building works was $4,226.00. Ms Bocquee paid to Mr Baltus an amount of $2,640.00 leaving a balance payable of $1,586.00. How should the unpaid balance of $1,586.00 be treated in assessing Ms Bocquee’s entitlement to damages? [39] Where a building contractor is in breach of contract, the measure of damages recoverable by a building owner as a result of the breach is the difference between the contract price of the work and the cost of making the work conform to the contract23 subject to the building owner giving credit for any unpaid balance of the contract price.24 [40] The Court of Appeal has held that s 42(3)of the QBCC Act sterilises any claim which might otherwise be made under a contract or under the common law by an unregistered builder.25 [41] Does s 42 operate to modify the common law position in relation to the assessment of damages for a building contractor’s breach? Firstly, the effect of s 42 is to render illegal a contract for the performance of unlicensed building work.26 The section operates for the benefit of the building owner. Secondly, an unlicensed builder has no 21 QCAT Act, s 28(3)(c). 22 QBCC licence search 19 August 2019. 23 Mertens v Home Freehold Co [1921] 2 KB 526. 24 Ventura v Svirac [1961] WAR 63. 25 Cook's Construction Pty Ltd v SFS 007.298.633 Pty Ltd (formerly trading as Stork Food Systems Australasia Pty Ltd) [2009] QCA 75 26 Ibid. -- 8 of 9 -- 9 entitlement to recover any consideration for performing building work. A building owner therefore is not obliged to pay to an unlicensed builder any part of an agreed price for the performance of building work and an unlicensed building contractor has no entitlement – other than as provided for in s 42(4) – to recover anything for performing building work. The balance of the contract price is therefore not payable by the building owner or recoverable by the building contractor. To give credit for the unpaid balance of the contract price would circumvent the clear legislative intent of s 42 in circumstances where an unlicensed building contractor has no entitlement to any consideration whatsoever for performing building work. Where an unlicensed building contractor does not avail themselves of s 42(4) that is the end of the matter. Mr Baltus has made no such claim. [42] Is the result that Ms Bocquee is unjustly enriched? Ms Bocquee could only be unjustly enriched if she received a benefit gained at Mr Baltus’s expense. The only ‘expense’ incurred by Mr Baltus would arise if he had an entitlement to recover any monies pursuant to s 42(4). Otherwise, Mr Baltus had no entitlement to receive any consideration for the work performed. In my view, Ms Bocquee has not gained a benefit at Mr Baltus’s expense. Even had she gained such a benefit it would not, in my view, be unjust to assess Ms Bocquee’s entitlement to damages without giving credit for the unpaid balance of the contract price. This is because s 42(1) of the QBCC Act rendered illegal the making and performance of the contract for building work by Mr Baltus. I also note that Ms Bocquee has previously been required to pay the balance payable under the agreement as part of her claim under the statutory insurance scheme. [43] I see no reason why the approach outlined above should be any different whether assessing damages for breach of contract or breach of duty. [44] Accordingly I do not take into consideration, nor give credit for, the unpaid balance of the contract price. Costs The tribunal may award costs in building disputes.27 The discretion to award costs is a broad general one which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation. I find Ms Bocquee is entitled to recover the filing fees on the application. This cost was reasonable and necessary to enable Ms Bocquee to pursue his legal entitlements. I fix the total costs payable by Mr Baltus in the amount of $338.20. Orders There will be a final decision for Ms Bocquee as follows: (a) Repayment of monies for unlicensed building works $ 2,640.00 (b) Damages $12,487.20 (c) Costs $ 338.20 27 QBCC Act, s 77(3)(h). -- 9 of 9 --