Cooper & Anor v Callianiotis t/as Marathon Homes & Anor [2018] QCAT 256

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Cooper & Anor v Callianiotis t/as Marathon Homes & Anor [2018] QCAT 256 PARTIES: DAMIEN THOMAS COOPER and ELIZABETH AMY ROSE COOPER KNOWLES (applicants) v CHRISTOPHER NICHOLAS CALLIANIOTIS T/AS MARATHON HOMES and DEIDRE CALLIANIOTIS T/AS MARATHON HOMES (respondents) APPLICATION NO/S: BDL140-16 MATTER TYPE: Building matters DELIVERED ON: 7 August 2018 HEARING DATE: 25 May 2017; 26 May 2017; 7 August 2017; 5 September 2017 HEARD AT: Rockhampton, Brisbane DECISION OF: Member Deane ORDERS: 1. Christopher Nicholas Callianiotis and Deidre Callianiotis t/as Marathon Homes are to pay Damien Thomas Cooper and Elizabeth Amy Rose Cooper Knowles the sum of $11,760 by 4:00pm on 7 September 2018. 2. Any Application for costs including for reserved costs by a party is to be made by filing in the Tribunal two (2) copies and providing to the other party one (1) copy of any submissions and evidence in support of the Application for costs by 4:00pm on 7 September 2018. 3. If any Application for costs is made: (a) the other party must file in the Tribunal two (2) copies and provide one (1) copy of any submissions and evidence in response to the party making the Application for costs by 4:00pm on 28 September 2018; (b) the party making the Application for costs mus t file in the Tribunal two (2) copies and provide -- 1 of 30 -- 2 one (1) copy of any submissions and evidence in reply to the other party by 4:00pm on 12 October 2018; (c) the Application for costs will be determined on the papers on the basis of any documents filed unless a party requests an oral hearing not before 4:00 pm on 12 October 2018. 4. If no Application for costs is made in accordance with Order 2 then there shall be no order as to costs. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – domestic building dispute – whether home owners validly terminated the contract because the works were not finished within a period that is 1.5 times the building period – whether builder validly extended time for completion – whether practical completion of the works achieved prior to termination – whether works were substantially complete – whether builder entitled to payment of final claim – whether home owners are entitled to damages for incomplete and defective work – whether home owners entitled to damages for solatium – whether liquidated damages are payable – whether the liquidated damages daily rate is unjust and ought to be increased Domestic Building Contracts Act 2000 (Qld), s 18, s 79, s 90, Schedule 2 Queensland Building and Construction Commission Act 1991 (Qld), s 77 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28 Agricultural and Rural Finance Pty Limited v Gardiner [2008] HCA57 Archibald v Powlett [2017] VSCA 259 Bellgrove v Eldridge [1954] HCA 36 Chelbrooke Homes Pty Ltd v Russell & Anor [2011] QCAT 278 Coshott v Fewings Joinery Pty Ltd [1996] NSWSC 270 Dyer v Spence [2017] QCAT 211 IC & DL McKay Pty Ltd v Johnstone [2015] QCAT 501 Ownit Homes Pty Ltd v Bachelor [1983] 2 Qd R 124 QLine Interiors Pty Ltd v Jezer Construction Group Pty Ltd & Ors [2009] 2 Qd R 566 Ricchetti v Lanbuilt Pty Ltd [2011] QCATA 266 Ruxley Electronics & Constructions Limited v Forsyth [1996] AC 344 Sun Building Services Pty Ltd v Minh & Anor [2015] QCAT 134 -- 2 of 30 -- 3 Tabcorp Holdings Limited v Bowen Investments Pty Ltd [2009] HCA 8 Tropical Traders Ltd v Goonan [1964] HCA 20 APPEARANCES & REPRESENTATION: Applicant: B Gimbert, solicitor of John Crossan & Company Respondent: B Long, solicitor of Celtic Legal REASONS FOR DECISION [1] Mr Cooper and Ms Cooper Knowles (‘the Home Owners’) entered into a contract with Marathon Homes (‘the Builder’) to build their first new home. The Builder is no longer a licensed builder. [2] The Home Owners commenced these proceedings seeking various orders, includ ing relief from being required to pay amounts claimed to be owing to the Builder and a declaration that they validly terminated the contract. They initially sought an interim order seeking the appointment of an assessor in respect of the claimed incomplete and defective work, which ultimately they did not pursue. [3] The Home Owners contend that: (a) they validly terminated the contract prior to practical completion being achieved; (b) the Builder is therefore not entitled to the final payment under the contract and they should be relieved from payment of the amount claimed; (c) certain work was incomplete or defective; (d) liquidated damages are payable to them for delayed completion; (e) the Tribunal should vary the per day liquidated damages amount specified in the contract from $30 to $50 because it is unfair because it does not represent the true costs incurred by them due to the delay; (f) they are entitled to claim the costs to complete and rectify defective work as damages and to the extent that the work performed was not in accordance with the contract they should be awarded damages for solatium. [4] Despite being legally represented, both parties’ cases suffered from significa nt deficiencies, in particular in relation to the evidence produced and in the articulatio n of the claims made. [5] The Home Owners, as applicants, are required to prove their claims on the balance of probabilities. To the extent the Builder made counter-claims, it is required to prove its claims on the balance of probabilities. -- 3 of 30 -- 4 [6] The Tribunal is not bound by the strict rules of evidence,1 but I am required to observe the rules of natural justice.2 There must be sufficient credible evidence upon which I can rely to make findings. [7] As I understand the evidence and the submissions, the Home Owners claim, in addition to an amount for solatium in an amount to be determined by me, the following: Contract Sum $328,500.00 Plus variations paid voluntarily $3,900.00 Less negative variation – invoice 383 $6,194.00 Less amount paid including for variations $299,550.003 Amount owing to Builder $26,656.00 Less cost to complete defective/incomplete work Plumbing (incl GST) $2,409.00 Final plumbing certification (incl GST) $1,870.00 Battering (incl GST) $4,273.50 Replace feature tiles (incl GST) $550.00 Re-do tiling (incl GST) $6,536.20 Plastering (incl GST) $18,260.00 Oiling posts (incl GST) $3,080.00 $36,978.70 Amount owing to Home Owners $10,322.70 Plus Locksmith costs $453.50 Plus Liquidated damages @ $304 x 434 days $13,020.00 Amount owing to Home Owners $23,796.20 1 Queensland Civil and Administrative Tribunal Act (Qld) 2009 (‘QCAT Act’), s 28(3)(b). 2 Ibid s 28(3)(a). 3 Exhibit 2. 4 The Home Owners contend the rate should be $50/day so that the liquidated damages claimed would be $21,700. -- 4 of 30 -- 5 [8] The Builder disputes the Home Owners’ entitlement to such orders. It contends that practical completion was effectively achieved prior to the purported termination, any defective or incomplete work was generally minor in nature and that its Notices of Extensions of Time were valid such that no amount is owing for liquidated damages ,5 and the Home Owners’ purported termination was not valid. [9] In the Amended Counter-Application,6 the Builder sought $83,759.06 includ ing amounts in respect of undocumented variations. During the final oral submissio ns hearing,7 Mr Long advised that the Builder did not pursue the claims for variatio ns and therefore the Builder’s claim was reduced. [10] The Builder seeks payment of the Practical Completion stage claim and delay costs in accordance with Schedule 5 of the Contract at 0.125% of the Contract Price.8 It also claims an entitlement to interest on unpaid amounts and legal costs on the basis the Home Owners were at fault for delays. Did the Home Owners validly terminate the contract under section 90(1)(b) of the Domestic Building Contracts Act 2000 (Qld) (‘DBC Act’)? [11] I find that the Home Owners validly terminated the Contract under section 90(1)(b) of the DBC Act as: (a) the building period was not validly extended; (b) the work was not finished within a period significantly more than 1.5 times the building period as set out in the Contract; (c) the Builder could have reasonably foreseen the reason for the increase in the time. [12] I set out below the reasons for each of these findings. [13] The parties agree that: (a) the Contract was signed on or about 29 April 2012; (b) construction commenced on 22 October 2012; (c) section 90(1)(b) of the DBC Act entitles a building owner to end a contract if the work is not finished within a period that is 1.5 times the building period; (d) the building period was 180 calendar days and that the period that is 1.5 times the building period (i.e. 270 days) expired on 19 July 2013 unless the build ing period was validly extended; (e) the Home Owners delivered a termination notice under section 90(1)(b) of the DBC Act on 27 June 2014. 5 Other than as already allowed in invoice 248B dated 4 August 2014, in the amount of $1,980 or 66 days at $30/day. Exhibit 3, Statement Chris Callianiotis, exhibit 11, page 77. 6 Filed 2 May 2017. 7 5 September 2017. 8 Exhibit 3, page 25. Contract, Schedule 5, Item 4. -- 5 of 30 -- 6 [14] I accept the Home Owners’ calculation that the building period up to terminatio n amounted to 613 days, which was significantly more than 1.5 times the build ing period. Was the work ‘finished’ for the purposes of the DBC Act prior to the purporte d termination? [15] I find that: (a) the work was not ‘finished’ prior to the purported termination. (b) practical completion within the terms of the Contract was not achieved prior to the purported termination. (c) while much of the work required to achieve practical completion was complete prior to the purported termination there was at least plumbing work required to be undertaken before the house could be regarded as substantially complete apart from minor defects and omissions. [16] The Builder contends that the works were substantially completed and that the house was habitable. [17] The term ‘finished’ is not defined in the DBC Act. Schedule 2 of the DBC Act sets out the definition for ‘stated completion date’ as: for a regulated contract, means, if applicable, the date stated in the contract as the date by which the subject work is to be finished. [18] In the current context, I accept that ‘finished’ equates to practical completion under the Contract. [19] The Contract9 provided variously that: practical completion means the stage when the works: (a) have been completed in accordance with this contract and all relevant statutory requirements apart from minor defects or minor omissions; and (b) are reasonably suitable for habitation. [20] Clause 24 of the Contract sets out the builder’s obligations on achieving practical completion. This includes giving a notice of practical completion together with the final claim. The final claim is not due until the builder gives the owner a defects list as described.10 The undisputed evidence is that the Builder did not comply with this clause. [21] This is not a case where practical completion had effectively been achieved but only the ‘paper work’ obligations had not been complied with to achieve practical completion under the Contract. 9 Exhibit 3, Contract, page 22, Schedule 2. 10 Exhibit 3, page 47. Contract, General Condition 24.4. -- 6 of 30 -- 7 [22] The evidence is, and I accept, that after the purported termination, the Home Owners were required to engage a plumber to perform works prior to the house being habitable. I accept that they incurred costs in doing so in the amount of $2,409.11 [23] Neither party provided any expert reports about the state of the dwelling, proposed methods of rectification of incomplete and defective work and the costs of such rectification or incomplete work. Such evidence is relevant to a determination of damages payable to either the Home Owners or to the Builder upon a finding of whether or not the termination was valid. [24] Attached to Ms Cooper Knowles’ statement is a Form 61 Non-compliance notice dated 2 June 201412 certifying that in the private certifier’s opinion the following works were required to be performed so that the final stage complied with the build ing development approval: a) Complete all electrical fitoff; b) Install range hood; c) Install AC units or seal around wall penetrations; d) Install termite stickers to metre box and kitchen cupboard; e) Supply a form 16 for termite protection listing the relevant Australian Standards for certi (sic); f) Arrange for another inspection when all works are completed. [25] By letter dated 12 June 2014, the Home Owners’ solicitors called upon the Builder to complete the works to practical completion within 7 days.13 Ms Cooper Knowles’ evidence was that items (d) and (e) were required to be completed by the Builder and that the Home Owners had agreed to complete some other items. There is little evidence before me about the status of that agreement. [26] An agreed point was that the Home Owners were responsible for: Installation of rangehood canopy and sealing holes in the wall but only agreed after reviewing the non-compliance notice.14 [27] The evidence is, and I accept, that the Builder did not progress the works as demanded prior to the Home Owners terminating the Contract.15 [28] The Home Owners relied upon evidence by a Queensland Building and Constructio n Commission (‘QBCC’) Inspector, Mr Wright. His evidence was that the plumb ing work undertaken by the Home Owners was required to be undertaken prior to practical completion being achieved and would be regarded by him as incomplete work. I accept Mr Wright’s evidence in this regard. 11 Exhibit 4, Cliff Tucker Plumbing Pty Ltd. 12 Exhibit 3, pages 168-169. 13 Exhibit 3, page 170. 14 Exhibit 2, [11 h]. See also Exhibit 3, page 185. Mr Cooper’s statement, [46]. 15 Exhibit 3, page 172. -- 7 of 30 -- 8 Was the building period validly extended? [29] I find that the building period was not validly extended. [30] The Builder contends that: (a) its Notices of Extension of time validly extended the building period; (b) the Home Owners’ impeded its progression of the critical path of the build, in particular by causing delay to the kitchen. [31] The Home Owners contend that the Builder waived strict compliance with the requirement for the Home Owners to provide it with colours and finishes and that they provided instructions as the work progressed such that they did not cause delay. [32] The evidence, is and I accept, that Mr Cooper undertook most of the communicatio ns with Mr Callianiotis. Mr Cooper’s evidence is supported by a number of contemporaneous email exchanges with Mr Callianiotis. The evidence is, and I accept, that Mr Cooper responded promptly to Mr Callianiotis’ communications. The parties concede that the Home Owners did not make all choices required prior to commencement as provided for in Special Condition 3. The Builder elected to commence works despite the Home Owners’ breach. I find that it waived strict compliance and that the Home Owners relied upon that waiver in providing the choices as the Contract progressed. The Builder ought not to be able to resile from that waiver unless it clearly put the Home Owners on notice.16 I find that the Builder did not clearly put the Home Owners on notice. [33] Mr Callianiotis gave evidence that he had issued a Notice to Remedy Breach in respect of the Home Owners’ failure to provide their paint colours and finishes during the course of the Contract. His evidence was that he no longer had a copy of the Notice and was unable to produce it in these proceedings. There was no clear evidence as to when Mr Callianiotis contends that it was delivered. [34] I note that an email from Mr Callianiotis dated 17 October 2013 was in evidence before me.17 It states that he was considering issuing correspondence claiming a breach of contract for failing to provide information. [35] The Home Owners gave evidence that they did not receive any such notice at any time prior to their termination of the Contract. If such a notice was sent, the Builder had an election if it considered the breach was not remedied. The evidence was that the Builder did not take any step in reliance on such a Notice e.g. suspending the works or terminating the Contract. I find that it again waived strict compliance and that the Home Owners relied upon that waiver in continuing to provide the choices as the Contract progressed. The Builder ought not to be able to resile from that waiver unless it clearly put the Home Owners on notice. There is no clear evidence that the Builder put the Home Owners on notice. 16 Agricultural and Rural Finance Pty Limited v Gardiner [2008] HCA57; Tropical Traders Ltd v Goonan [1964] HCA 20. 17 Exhibit 3, page 244. -- 8 of 30 -- 9 [36] By email dated 17 December 2012, the Home Owners provided some selections and asked the Builder if there were other materials, which it needed to order at that time. Mr Cooper offered to send through the colour selection form that night.18 [37] By email dated 14 October 2013, Mr Cooper also asked if any information was required from the Home Owners to progress the works.19 [38] Ms Cooper Knowles’ evidence was that at the start of 2013 Mr Callianiotis told them that the paint colour choice could be supplied at a later date, was not required until the walls were ready to paint and the paint could be sourced locally and was easy to get.20 Mr Cooper’s evidence is to a similar affect. I accept the Home Owners’ evidence on this point. Mr Callianiotis’ statement as referred to by the Home Owners is a further waiver of the Home Owners’ breach upon which the Home Owners’ relied. [39] The evidence is that there was an error in relation to the paint colour and that replacement paint was, in fact, sourced locally very quickly. The Home Owners contend that only half a day’s delay was caused by the error. On the evidence before me, I am not able to make a finding that this delay is part of the delay claimed. The Home Owners seem to accept that they were responsible for the error. There is no clear evidence before me that this short delay caused an actual delay to the critica l path. [40] Ms Cooper Knowles’ evidence was that: (a) in late October 2012 there was a delay with the concreter pouring the slab. Mr Callianiotis said that it would put the job behind a couple of weeks. (b) at the start of 2013 the Home Owners drove to Yeppoon to liaise with Capricorn Kitchens, the Builder’s kitchen sub-contractor and Ten Commandments, the Builder’s granite supplier. (c) Mr Callianiotis was rarely on site to check progress and regularly asked the Home Owners to inform him about progress. (d) when the Home Owners left Emerald at the start of April 2013 for their wedding the slab was down, the frame was up and the roof was on. (e) on their return in mid May 2013, after 5 weeks away, the only additional work completed was that the windows had been installed. (f) in November 2013, she contacted Capricorn Kitchens who informed her that the Builder had not paid a deposit. (g) in November 2013 she contacted Ten Commandments who informed her that they had sent quotes to Mr Callianiotis, had not heard from him and he had missed the cut off date for the end of the year shut down. 18 Exhibit 3, page 219, DTC2. 19 Exhibit 3, pages 239–240. 20 Exhibit 3, page 149, [8]. -- 9 of 30 -- 10 (h) later in November 2013, the Home Owners found a different granite supplier, Whitsunday Marble. The alternative supplier Mr Callianiotis suggested was unsatisfactory. (i) at the start of December 2013, the kitchen cabinets were installed so she contacted Whitsunday Marble and was informed that Mr Callianiotis had not requested they come to measure up for the granite. She arranged for them to attend the following week. They installed the granite at the end of January 2014. (j) the Home Owners went to the site every day to check on the progress of works. [41] The Home Owners and Mr Wright agreed with Mr Long that the kitchen is an important part of a house. Mr Long submitted as there was delay to the progress of the kitchen that any such delay would delay practical completion. There is no clear evidence before me as to the impact of any delay to the kitchen or any other part of the house caused by the Home Owners as distinct from the Builder. [42] The evidence is that Mr Callianiotis received plans for the kitchen on 30 April 2013 but did not forward them to the Home Owners until 21 September 2013. His evidence was that he assumed the kitchen sub-contractor would have sent them direct to the Home Owners but it is clear that he made no attempt to ensure that had actually occurred. Having regard to the documentary evidence before me, I do not accept that the Builder was only responsible for introducing the Home Owners to Capricorn Kitchens and do not accept that it was for the Home Owners to finalise quotes and plans before the Builder had any role to play. I accept the Home Owners’ evidence that Mr Callianiotis informed them that they were to forward quotes to him to enable him to organise the build and that they did so.21 [43] Mr Callianiotis attached a letter from Ten Commandments to his statement, which attached quotes dated 12 April 2013, 17 April 2013 and 30 July 2013.22 The letter contends that they refused to ‘do the job’ for the Home Owners because they would not listen to their advice. The author of the letter was not made available to be questioned by the Home Owners nor the Tribunal. To the extent that the Home Owners gave contrary evidence, I accept the Home Owners’ sworn evidence over the unsworn evidence attached to Mr Callianiotis’ statement. [44] The evidence is that the Home Owners accepted the alternate granite quote on 25 November 2013 prior to the installation of the cabinets.23 The quote is dated 19 November 2013 with a note that the colour was selected on 22 November 2013. I find that the Home Owners acted promptly upon receiving information to enable the progress of the works. [45] The building period of 180 days included 16 days for inclement weather and the effects of inclement weather and 35 days for weekends, public holidays, rostered days off and other days not generally available for the carrying out of the works.24 The works were required to reach practical completion within 180 days after commencement subject to extensions of time pursuant to clause 16. Ms Cooper 21 Exhibit 3, page 178, [18]. 22 Exhibit 3, Statement Chris Callianiotis, exhibit 7. 23 Exhibit 3, Statement Chris Callianiotis, exhibit 8. 24 Exhibit 3, page 20. Contract, Schedule 1, Item 10. -- 10 of 30 -- 11 Knowles refers to 20 April 2013 in her statement as the due date for completio n.25 I accept that practical completion was to be achieved by no later than 20 April 2013 unless the building period was validly extended. [46] The Builder is entitled to a reasonable extension of time to the building period if the carrying out of the works is delayed by a claimable delay.26 It is not sufficient to point to a circumstance in clause 16.2 beyond the builder’s sole control that was not reasonably foreseeable at the time the builder entered into the contract. The works are required to actually be delayed by the claimable delay e.g. it is not sufficient to say there was rain, therefore, I am entitled to an extension of time. Where it is a calculable delay the claim for an extension of time is to be for the delay in excess of the allowance in item 10. [47] The Home Owners accept that they were responsible for a minor delay in relation to the brick colour arising out of a query by them upon the bricks arrival on site of less than a day. I accept that the Home Owners had requested a variation, which the Builder had not documented contrary to its responsibilities. In any event, the Home Owners elected to continue with the bricks as delivered. There is no clear evidence before me that this short delay caused an actual delay to the critical path. [48] The Builder claims it issued six extensions of time notices to the Home Owners: (a) dated 15 April 2013, claiming an extension of 122 days from the date of the notice:27 ‘due to delays caused by Wet Days (33) Industry Shutdown (December 2012) (21) and the owners not supplying all required information as per the Special Condition’. The notice states the new date for practical completion is 24 August 2013,28 (First EOT Notice). The Home Owners’ evidence is that this EOT Notice was only received by email on 2 June 2013 and was not received through the post.29 (b) dated 23 July 2013, claiming an indefinite number of days due to delays ‘caused by information regarding colour selections and finishes required from you.’ The notice states the new date for practical completion ‘cannot be determined until you supply a full list of all colours and finishes and pay the balance of outstanding invoice due’,30 (Second EOT Notice). There is a notation on the bottom of the page ‘Copy Posted 23 July ‘13’. The other EOT Notices do not have a similar notation. (c) dated 18 June 2014, claiming an extension of 70 days due to wet days. The notice states the new date for practical completion is 1 August 2013. During the 25 Exhibit 3, page 150, [12]. 26 Exhibit 3, page 41. Contract, General Conditions, clause 16.1. 27 Rather than an extension to the building period as provided by the Contract. 28 Exhibit 3, Statement of Chris Callianiotis, page 24. 29 A copy of another notice of extension of time dated 15 April 2013 claiming 33 days for wet days and claiming the new date for practical completion would also be 24 August 2013 was within the hearing bundle at page 85. It bears a notation that it was posted on 16/4/13. Although the evidence is unclear, it appears that the Builder relies upon the version of the notice appearing at page 84 rather than the notice at page 85. An extension of 33 days would not have made the new date for practical completion 24 August 2013. 30 Exhibit 3, Statement of Chris Callianiotis, page 25. -- 11 of 30 -- 12 hearing that date was identified as a typographical error and that the intended extended date was 1 August 2014,31 (Third EOT Notice). (d) a further notice also dated 18 June 2014, claiming an extension of 56 days due ‘the effect of wet weather (allowing frames to dry out) as per agreement with Damien’. The notice states the new date for practical completion is 26 September 2013. During the hearing that date was also identified as a typographical error and that the intended extended date was 26 September 2014,32 (Fourth EOT Notice). (e) a further notice also dated 18 June 2014, claiming an extension of 123 days due to delays ‘caused by information regarding colour selections and finis he s required from you.’ The notice states the new date for practical completion is 27 January 2014. During the hearing that date was also identified as a typographical error and that the intended extended date was 27 January 2015 (Fifth EOT Notice). (f) a further notice also dated 18 June 2014, claiming an extension of 50 days due to delay in granite bench tops for the kitchen. The notice states the new date for practical completion is 18 March 2014. During the hearing that date was also identified as a typographical error and that the intended extended date was 18 March 2015 (Sixth EOT Notice). [49] Mr Callianiotis gave evidence that all Notices of Extension of time were sent to the Home Owners by post by his wife. Mrs Callianiotis did not give evidence but was present within the hearing room while her husband gave evidence. She was not made available to be questioned on this point. [50] The Home Owners’ evidence was that: (a) the only notice received directly from the Builder was dated 15 April 2013, which was received on 2 June 2013 by email. (b) they did not receive the Second EOT Notice, except under cover of a letter from the Builder’s then solicitors dated 30 June 2014, after they terminated the Contract.33 (c) the four EOT Notices all dated 18 June 2014 were delivered under cover of a letter from the Builder’s then solicitors dated 20 June 2014 and that they were disputed by letter dated 23 June 2014.34 [51] To the extent relevant, I accept the Home Owners’ evidence on this point, as it is more consistent with the contemporaneous documentary evidence before me than the evidence given by Mr Callianiotis, including that the Bureau of Meteorology (‘BOM’) data apparently relied upon to make the wet weather claim has a footer, which indicates it was printed on 2 June 2013.35 31 Exhibit 3, Statement of Chris Callianiotis, page 26. 32 Exhibit 3, Statement of Chris Callianiotis, page 26. 33 Exhibit 3, page 187. 34 Exhibit 3, page 188. 35 Exhibit 3, Statement of Chris Callianiotis, pages 32-38. -- 12 of 30 -- 13 [52] The Home Owners contend that: (a) the notices were not valid as they did not contain the information required and were not given within the required time; and (b) they objected to them within the terms of clause 16.5 which requires a home owner to dispute a notice within 5 working days of receiving the notice. [53] The builder is to give the owner written notice of the extension of time detailing both the cause of the delay and the extension of time within 20 working days of when the builder became aware of both the cause and the extent of the delay and the notice is to be accompanied by supporting documents.36 The clause gives examples of such documents and specifically refers to a list of business days affected by incleme nt weather. [54] The evidence is, and the Builder’s final submissions concede, the EOT Notices were not accompanied with supporting documentation. The Builder contends that whils t not being as fulsome in description as the Contract may envisage there was sufficie nt information for the Home Owners to understand the basis of the claims. I do not accept this contention. It is contrary to the evidence before me that in response to the First EOT, Mr Cooper by an email dated 12 June 2013 requested further information ‘in regard to the nature and times of delays’ and offered to meet ‘to get the remaining ordering done’.37 [55] I am not satisfied that the Builder substantially complied with the requirements for notices for extension of time. The Tribunal has previously found, and I accept, that a Builder cannot issue notices for extensions of time retrospectively.38 First EOT [56] I find that the First EOT Notice did not validly extend the building period. [57] The First EOT Notice appears to claim 33 days delay for wet weather. The Builder provided to the Tribunal some BOM data about rain in Emerald during October 2012 – May 2013.39 [58] The original building period included 16 days for inclement weather. The evidence is unclear as to whether this allowance has been taken into account. There is no evidence before me as to how the allowance of 16 days was derived. During cross-examinatio n, both Home Owners gave evidence that the weather was not particularly wet. Ms Cooper Knowles’ evidence was that it was ‘normal Emerald weather’. I accept the Home Owners evidence in this regard. [59] The Builder also provided a one page table,40 which indicated the total number of wet days in the period October 2012 – April 2013 were 53. The BOM data41 indicates that a number of the days on which rain was recorded fell on Sundays or public holidays and on my calculation on 17 of the days only 0.2 mm of rain was recorded. The table 36 Exhibit 3, page 41. Contract, General Conditions, clause 16.3. 37 Exhibit 3, page 227, DTC 4. 38 IC & DL McKay Pty Ltd v Johnstone [2015] QCAT 501, [28]. 39 Exhibit 3, Statement of Chris Callianiotis, pages 32-38. 40 Exhibit 3, Statement of Chris Callianiotis, page 30. 41 October 2012 – May 2013. -- 13 of 30 -- 14 sets out that there was a total of 119 wet days. The period to which this informatio n relates is not altogether clear. The table is headed ‘2012/13/14’. At the bottom of the document in addition to total wet days of 119, it also has the figures ‘86’, ‘33’ and ‘16’. The difference between 119 and 33 is 86. If one deducts 16 from 86 you arrive at 70, which was the number of days claimed in the Third EOT Notice for wet weather. [60] I find that it is more likely than not that the First EOT Notice claiming an extensio n of 33 days for wet days did not take into account the allowance in item 10 and therefore was overstated by at least 16 days. [61] Mr Callianiotis gave oral evidence to the effect that if there is one day of rain that could result in a delay of a week depending upon the soil and that rain could impact access to the site, which might result in delay later in the works. I accept that evidence. [62] There was, however, no specific evidence from Mr Callianiotis or anyone else as to the delay caused to the critical path or indeed actual delay caused by any of the matters claimed under any of the EOTs. [63] Much of Mr Callianiotis’ evidence was vague and in generalities. I found his evidence for the most part unconvincing. [64] His evidence was that he worked out the 33 wet days by reference to his work diary or possibly by reference to BOM data. His work diary was not in evidence before me. [65] Under cross-examination, he was unable to say what work was performed during the period October 2012 – April 2013, nor how long it took to construct the slab nor how soon after the slab was constructed the frames went up. He acknowledged that there was some delay with the concreter in pouring the slab. He said the delay was out of his control. There is no suggestion that the Home Owners were responsible for the concreter. In any event, none of the EOTs appear to relate to the concreter caused delay. [66] There was no evidence from an expert as to the delay that a builder would experience as a consequence of the rain identified in the BOM documents given the stage of the works. [67] There was no evidence before me as to when Mr Callianiotis became aware of both the cause and the extent of the delay caused by the wet weather. [68] I am not satisfied that the First EOT notice, in respect of wet weather, was given within time i.e. within 20 working days of when the builder became aware of both the cause and the extent of the delay. It seems more likely that the Builder realised that the building period expired on or about 20 April 2013 and that it should seek to extend time. [69] The First EOT Notice appears to also claim 21 days for the 2012 industry shutdown. Clause 16.2 provides that the industry shutdown is a three week period commenc ing on or about 22 December. The Builder did not lead any evidence, as distinct from submissions from the bar table, of when it reasonably expected the building period would commence such that it was not foreseeable that it would include the industr y shutdown in December 2012. -- 14 of 30 -- 15 [70] The Contract42 provided that Commencement was to take place on or before the start and price review date stated in item 6 (30 days from Contract Date) or within 20 working days from the day that various information was provided or the builder received all approvals required. Mr Cooper gave evidence that on 27 July 2012 he received an email from his mortgage broker that the valuation on the property was delayed due to the Builder not supplying some documentation.43 Mr Callianiotis gave evidence that commencement was delayed due to the Home Owners’ financing. In this respect his evidence was also quite vague and in generalities. [71] There is insufficient evidence before me to make a finding: (a) as to the cause of the delay between the signing of the Contract and Commencement and whether the delay was a claimable delay. (b) that it was not foreseeable that the building period would include the industr y shutdown period. [72] Even if it was not foreseeable that the building period would include the industr y shutdown period, there is no evidence upon which I can rely to find that the notice in respect of industry shutdown was given within time i.e. within 20 working days of when the builder became aware of both the cause and the extent of the delay. The notice was dated 15 April 2013. The industry shutdown commenced on or about 22 December 2012. It would have ended on or about 11 January 2013. There is no evidence about when the Builder became aware of the extent of the delay. [73] The BOM data indicates that there was rain on some days during the industr y shutdown period. It is unclear to me how the First EOT reconciled this overlap. Item 10 also allowed 35 days for weekends, public holidays, rostered days off and other days not generally available for the carrying out of the works. There is no evidence before me as to how that allowance was calculated nor how it has been taken into account in respect of the industry shutdown claim. [74] The First EOT Notice appears to also claim 68 days delay for the owners not supplying all required information as per the Special Condition. There is no evidence upon which I can rely to find that the notice in respect of failure to provide information was given within time i.e. within 20 working days of when the Builder became aware of both the cause and the extent of the delay, even if the Builder was entitled to rely upon such a breach by the Home Owners. [75] The Builder claims the critical path was affected by the non-provision of informatio n. There is no evidence before me of what impact these matters caused to the critica l path and how the impact on the critical path was determined. There was no evidence from an expert as to the delay that a builder would experience as a consequence of the failure to supply the particular information at the stage of the works. [76] I am not satisfied that the Builder was delayed by 122 days by the matters set out in the First EOT Notice. Given the state of the evidence, I am not satisfied that the Builder was delayed at all by the matters set out in the First EOT Notice. 42 Exhibit 3, page 31; Contract, General Conditions, clause 2. 43 Exhibit 3, page 177, [8]. -- 15 of 30 -- 16 [77] In view of these findings, it is not necessary to consider whether the Home Owners disputed the First EOT Notice within 5 working days. The Builder did not contend that an invalid notice was deemed valid if it was not disputed within time. Clause 16.5 of the Contract does not expressly deem the extension valid if not disputed within the stated time. Second EOT Notice [78] I find that the Second EOT Notice did not validly extend the building period, even if I accepted that the notice was sent to the Home Owners. I accept the Home Owners’ evidence that it was not received. [79] The Second EOT Notice claims an indefinite extension of time for the owners not supplying all required information as per the Special Condition. I am not satisfied that the Second EOT Notice fulfils the requirements of clause 16.3 because an indefinite extension is at odds with the builder becoming aware of the extent of the delay and notifying it. [80] As referred to earlier in these reasons, there is no clear evidence before me of what impact these matters caused to the critical path and how the impact on the critical path was determined. [81] I am not satisfied that the Builder was delayed indefinitely or at all by the matters set out in the Second EOT Notice, even if the Builder was entitled to rely upon such a breach by the Home Owners. Third EOT Notice [82] I find that the Third EOT Notice did not validly extend the building period. [83] The Third EOT Notice claims a 70 day extension for wet weather. Mr Callianio tis gave evidence that he calculated the delay in the same way as for the claim in the First EOT Notice. For the reasons outlined in respect of the First EOT Notice, I am not satisfied that the Builder was delayed at all by wet weather as set out in the Third EOT Notice. Fourth EOT Notice [84] I find that the Fourth EOT Notice did not validly extend the building period. [85] The Fourth EOT claims an extension of 56 days due to ‘the effect of wet weather (allowing frames to dry out) as per agreement with Damien’. [86] There is limited evidence about the contended agreement including whether there was any consideration for the agreement. [87] As set out earlier in these reasons: (a) Ms Cooper Knowles’ evidence was that the frames were installed by early April 2013; (b) Mr Callianiotis could not recall when the frames were installed. -- 16 of 30 -- 17 [88] According to Exhibit 5, submitted by the Builder, the Frame stage claim was dated 2 March 2013. I accept that the frames were installed by early April 2013 at the latest. The Fourth EOT Notice was dated 18 June 2014 considerably more than a year later. There was no evidence before me as to when Mr Callianiotis became aware of both the cause and the extent of the delay. I am not satisfied that the Fourth EOT Notice was given within time i.e. within 20 working days of when the Builder became aware of both the cause and the extent of the delay. Fifth EOT Notice [89] I find that the Fifth EOT Notice did not validly extend the building period. [90] The Fifth EOT claims an extension of 123 days due to delays ‘caused by informatio n regarding colour selections and finishes required from you.’ This EOT notice gave some limited details: Delays we are referring to are changing the tiler and electrician at your request (wanting to use your own contractors), paint selections, tapware, moving shower spout, niche’s (sic), kitchen etc [91] To the extent the EOT relates to the niches, this relates to a variation requested by the Home Owners, which the Builder failed to put in writing. Despite Mr Callianiotis ’ suggestion during his evidence that the Home Owners were at fault in not reducing variation requests in writing, such an obligation was squarely the Builder’s obligatio n. So much is very clear in the Contract,44 and the DBC Act.45 [92] Through the course of these proceedings, the Builder had pursued claims for variations not reduced to writing in accordance with the Contract or the DBC Act. During the final oral submissions’ hearing, Mr Long on behalf of the Builder conceded that the Builder did not pursue the variations claims. Mr Long also conceded that the Builder did not contend that any of the variations caused delay so that it did not seek to rely upon a limited right to apply to the Tribunal for extensions of time where the contract is varied but the builder had not complied with the variation provisions in the Contract or the DBC Act. 46 [93] I am not satisfied that all of the delay in respect of the matters referred to in the notice including the kitchen is a claimable delay for the reasons set out earlier. [94] There is no clear evidence before me of what impact these matters caused to the critical path and how the impact on the critical path was determined. [95] I am not satisfied that the Fifth EOT Notice was given within time i.e. within 20 working days of when the Builder became aware of both the cause and the extent of the delay, because there is no clear evidence of these matters, even if the Builder was entitled to rely upon such a breach by the Home Owners. Sixth EOT Notice [96] I find that the Sixth EOT Notice did not validly extend the building period. 44 Exhibit 3, Contract, clause 19.2, 19.3. 45 DBC Act, s 79. 46 Ibid s 18. -- 17 of 30 -- 18 [97] The Sixth EOT Notice claims an extension of 50 days due to delay in granite bench tops for the kitchen. [98] There is no clear evidence before me of what impact these matters caused to the critical path and how the impact on the critical path was determined nor how the period was calculated. [99] I am not satisfied that the delay in respect of the kitchen granite bench tops is a claimable delay. I accept Ms Cooper Knowles’ evidence as set out earlier in these reasons,47 and find that at least some of the delay in the installation of the bench tops was a delay for which the Builder was responsible. [100] I also accept Ms Cooper Knowles evidence that the granite was installed in late January 2014.48 The Sixth EOT Notice was dated 18 June 2014. I am not satisfied that this notice was given within time i.e. within 20 working days of when the Builder became aware of both the cause and the extent of the delay. Could the Builder have reasonably foreseen the reason for the increase in the time when the contract was entered into? [101] I find that the Builder could have reasonably foreseen the reason for the increase in the time. [102] I find that the primary reason for the increase in the time was the less than reasonably diligent administration of the Contract by the Builder including organis ing tradespeople and subcontractors to perform the work. Many examples of the Builder’ s lack of diligence are set out in these reasons and further examples are set out in the Home Owners’ evidence including that Mr Cooper sought information from Mr Callianiotis and there were invariably delays in sending it and errors in the information provided. [103] I note that the Builder was required to provide the Home Owners a written notice of commencement within 20 business days of commencement. The commenceme nt notice was dated 9 November, 2012 but was sent to the Home Owners by email on 2 June 2013. [104] The Builder was uniquely placed to foresee its administration of the Contract at the time of entering into the Contract. Entitlement to Damages for defective or incomplete works [105] Both parties accept that the correct measure of damages is the cost of work, which is both reasonable and necessary to ensure the Home Owners receive the benefit of the contract entered into by the parties.49 [106] As stated earlier in these reasons, there is little evidence about the claimed incomplete or defective work and the reasonable costs of rectifying or completing that work. Somewhat unusually, copies of quotes obtained by the Home Owners were attached 47 See [40]. 48 See [40]. 49 Bellgrove v Eldridge [1954] HCA 36; Tabcorp Holdings Limited v Bowen Investments Pty Ltd [2009] HCA 8. -- 18 of 30 -- 19 to Mr Callianiotis’ statement. In his statement, he claimed that these invoices had been sent to him by other suppliers for payment. [107] During the hearing, it became apparent that these quotes were provided by the Home Owners’ lawyers to him. So much is consistent with the facsimile transmission time and date stamping, which the documents bear. Despite putting them into evidence, the Builder has sought to discredit them. Mr Long submitted that I could not be confident that the documents were for the work the Home Owners contend needs to be performed. [108] None of the authors of the quotes were called to give evidence about the work to be performed or the amount of the quotes and therefore were not available to be questioned. During the hearing in Rockhampton, I enquired of Mr Long whether he required the contractors, who had given the Home Owner quotes to be made available for cross-examination. He advised that he did not. [109] Mr Wright’s written report is in evidence.50 Mr Wright’s report was written in order to determine whether the QBCC would direct or not direct the Builder to rectify defective building work under section 72 of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). It was not written to determine whether the works were in accordance with the Contract, nor to recommend methods of rectification of incomplete and defective work nor the costs of such rectification. [110] Mr Wright gave oral evidence. His evidence was that in his opinion the reasonable costs to complete and to rectify the defective work were less than the amount of the practical completion stage claim, which had not been paid by the Home Owners. This was one reason why the QBCC did not issue a direction to rectify. He did not offer, and during his evidence he was not asked for, any opinion on how much it would cost. [111] The Builder submits that Mr Wright’s views with respect to defects ought to be preferred over the quotes. I do not necessarily accept this contention. Mr Wright was not taken to each of the quotes and asked for his views as to the work to be performed and the cost. Mr Callianiotis’ evidence was that the work was not required. He did not give evidence that disputed the reasonableness of the quotes if there was a finding that the work was required. Plumbing costs - $2,409 [112] I find the Builder is to pay the Home Owners $2,409. [113] As stated earlier in these reasons the Home Owners engaged a plumber and incurred $2,409 in order to make the house habitable. Final plumbing certification - $1,870 [114] I am not satisfied on the evidence before me that the amount claimed is owing. [115] Mr Cooper gave evidence that the Home Owners had received one quote from Prime Plumbing to provide plumbing certification in the sum of $1700 (excl GST). 50 Exhibit 3, page 70–83. -- 19 of 30 -- 20 [116] The quote was not in evidence before me and apparently had not previously been made available to the Builder. [117] Mr Long contended, and I accept, that there was insufficient evidence that such certification was required. Battering costs - $4,273.50 [118] I find, on the balance of probabilities, that the Builder is to pay the Home Owners the sum of $4,273.50 in respect of these incomplete works. [119] Mr Callianiotis contends that he undertook the battering works during a site visit. Ms Cooper Knowles’ evidence is that she was on site the day Mr Callianiotis claims to have performed the work. As indicated earlier in these reasons, Mr Callianiotis ’ recollections were vague, which is, to an extent, understandable. This was unlikely to be the only contract he was performing at the time and presumably one of many he performed over his career. In contrast, this was the Home Owners’ first home and their recollections of events are likely to be more vivid and precise. I prefer her evidence that the Builder performed some site clean-up work but not battering work. [120] The Home Owners’ claim is supported by a quotation by Emerald Garden Creations dated 14 August 2014.51 The document is somewhat confusing as it contains an invoice number. [121] The Home Owners’ evidence is that: (a) Mr Cooper had performed some work himself; (b) they had not yet engaged Emerald Garden Creations to perform the work the subject of the quotation. [122] Mr Cooper’s evidence was that the contractor provided the quote after attending on site and being given the Contract plans to review. On the face of the quote, it was obtained a relatively short time after the Home Owners terminated the Contract. [123] As referred to earlier in these reasons, Mr Callianiotis did not expressly dispute the reasonableness of the quoted amount. In the absence of evidence to the contrary, I accept the Emerald Garden Creations quote as the reasonable costs of completing this work. Replace feature tiles - $550 [124] I am not satisfied, on the balance of probabilities, that the installation of the tiles was defective work for which the Builder is responsible. [125] The Home Owners claim that the bathroom feature tiles are not performing as intended and that there are lines on the back of the tiles. They claim $550 to replace them. The Home Owners’ claim is supported by a quote from Five Star Tiling dated 17 July 2014.52 51 Exhibit 3, Statement Chris Callianiotis, exhibit 12 at page 80. 52 Exhibit 33, Statement of Chris Callianiotis, page 81. -- 20 of 30 -- 21 [126] Mr Cooper’s evidence is, and I accept, that: (a) the Home Owners supplied the heat sensitive colour changing tiles; (b) he provided the manufacturer’s installation instructions to the Builder’s tiler and informed the tiler that a particular glue was recommended to be used. [127] The Builder’s tiler did not give evidence in these proceedings to dispute Mr Cooper’s evidence nor to give evidence about whether or not he followed the manufacturer’ s instructions. [128] There are at least two reasons why the tiles are not performing as intended: (a) the tiles were not installed with due skill and care in accordance with the manufacturer’s instructions in which case the Builder would be responsible; or (b) the tiles supplied by the Home Owners were defective, in which case the Builder would not be responsible. 53 [129] Mr Cooper gave evidence that he was informed by the tile supplier that the defect would be attributable to the tiler not following the manufacturer’s instructions. Such evidence is hearsay evidence. Whilst the Tribunal is not bound by the strict rules of evidence, the Tribunal is required to afford natural justice. Natural justice requires that the evidence be able to be tested by the person making that statement being available to be questioned. [130] There is no independent expert evidence as to the cause of the defect. [131] Mr Wright’s evidence was that he had been unable to identify through his research any particular attributes for these tiles and that they are substantially performing their function as tiles. The Home Owners’ evidence is, and I accept, that Mr Wright did not perform any heat related tests. [132] There is insufficient evidence, upon which I can rely, to find that the installation was defective work. Re-do Tiling - $6,536.20 [133] I find that the installation of the tiles was defective work for which the Builder is responsible. However, there is insufficient evidence to be satisfied as to the reasonable method and costs of rectification and therefore the quantum of damages to which the Home Owners would be entitled. [134] The Home Owners’ claim is supported by a quotation from Five Star Tiling dated 17 July 2014.54 Mr Cooper gave evidence that he had been informed by a representative of Five Star Tiling that the tiles required removal and replacement in order to be completed in a proper “tradesmanlike” manner. Such evidence is hearsay evidence and the maker of that statement did not give evidence to explain why the tiles required removal and replacement. 53 Exhibit 3, page 46, Contract, clause 23.2. 54 Exhibit 3, Statement of Chris Callianiotis, page 82. -- 21 of 30 -- 22 [135] Mr Wright gave evidence that there were some areas at the top of the skirting tiles where the glue coverage had not reached. He accepted this was a category two defect and was of the opinion that a sealant ought to be applied to the top edge junction. As stated earlier, Mr Wright did not give any evidence as to the costs of this method of rectification. Plastering - $18,260.00 (incl GST) [136] I find the plastering was defective work for which the Builder is responsible. I find that the Builder is to pay the Home Owners the sum of $18,260 (incl GST). [137] The Home Owners’ claim is supported by a quotation by Emerald Painting dated 27 July 2014.55 [138] Mr Wright gave evidence in relation to cornices, plastering and paint finishes: (a) there were numerous minor crack and blemishes throughout the dwelling. (b) door jambs had not been appropriately sized leaving gaps between architraves and wall sheeting. (c) areas had been poorly prepared and plaster damage had been painted over. (d) door edges had not all been painted. (e) over painting onto aluminium windows and door joinery had not been addressed together with other cleaning. He expressed a view that this work would normally be attended to prior to hand over but that the contract had been terminated. (f) a shelf unit at the end of a built in cupboard had not been scribed to the wall leaving gaps up to 8 mm wide. He accepted this was a category two defect as there had been a plaster build up in the corner of the internal partitions creating an out of square corner. [139] Mr Cooper gave evidence that the Emerald Painting quote is to fix the bows in the walls and the defects referred to by Mr Wright and to then repaint because of the extent of the defects. Mr Callianiotis gave oral evidence that he did not believe the work in the quote was required to be done but did not comment on the reasonableness or otherwise of the quote if I found the work ought to be performed. [140] Mr Wright offered an opinion that one aspect of the defects could be rectified in about 10 minutes but did not offer a global view. [141] Having regard to Mr Wright’s report including the photographs forming part of Mr Wright’s report in respect of complaints 6, 7, 8 and 11, I am satisfied that the plastering work was defective in significant respects and that once rectified a significant amount of painting would be reasonably necessary to ensure a satisfactor y finish. [142] In the absence of evidence to the contrary, I accept Emerald Painting quote as the reasonable costs of rectifying these defects. 55 Exhibit 3, Statement of Chris Callianiotis, page 83. -- 22 of 30 -- 23 Oiling posts - $3,080.00 [143] I find that the oiling of the posts was defective work for which the Builder is responsible. However, there is insufficient evidence upon which I can be satisfied as to the reasonable method and costs of rectification and therefore the quantum of damages to which the Home Owners would be entitled. [144] The Home Owners’ claim is supported by a quotation by Emerald Painting dated 27 July 2014.56 [145] Mr Cooper gave evidence that the posts were poorly painted having visible paint runs. I accept Mr Cooper’s evidence. There is no photographic evidence before me as to the extent of the defects. Mr Wright’s report does not appear to specifically address this defect. Locksmith - $453.50 [146] I find the Builder is to pay $453.50 to the Home Owners. [147] The Home Owners’ evidence is that they were required to engage a locksmith to gain entry after terminating the contract. The evidence is that correspondence was sent to the Builder calling for it to finalise the work, that it did not finalise the work and that the Home Owners sent a notice terminating the contract in accordance with section 90 of the DBC Act.57 That notice requested that entry to the premises be reinstated and keys to be delivered by 30 June 2014. [148] The evidence is that the Home Owners’ incurred $453.50 to change the locks,58 and that there was glue in the front door lock apparently attempting to prevent a key from opening it.59 [149] Mr Long submitted that this cost was unnecessary, as the Home Owners could have asked for access. In the circumstances, such a submission is, with respect, disingenuous. The Home Owners had sought access to perform work to fulfil their part of an agreement they had struck with the Builder. They were denied access. I find it was reasonable for them to assume that access would continue to be denied. Other defects and incomplete work [150] I find that there were a number of other defects and incomplete work for which the Builder was responsible. There is insufficient evidence to make a finding as to the reasonable costs of rectification or completion for those items and therefore the quantum of damages to which the Home Owners would be entitled. [151] Mr Wright gave evidence that the positioning of the power switch to the oven and bench top power points, which were installed in the splash back, did not comply with the relevant Australian Standard and was a category one defect as it was a fire hazard. 56 Exhibit 3, Statement of Chris Callianiotis, page 83. 57 Exhibit 3, page 67. 58 Exhibit 3, page 175. 59 Exhibit 3, page 155, [35]. -- 23 of 30 -- 24 [152] Ms Cooper Knowles’ evidence is that the Home Owners, at a meeting on or about 11 or 12 May 2012 requested a 900 mm appliance rather than a standard 600 mm appliance.60 Mr Cooper also gave that evidence.61 [153] Mr Wright’s report notes that there would have been ample time to reposition the switches, which were set for a standard 600 mm appliance prior to completion of installation. There is no evidence before me as to the reasonable costs to rectify this defect. Mr Wright’s evidence was that the cost to rectify would be substantially less than the amount outstanding under the Contract. Mr Wright noted he did not seea variation document changing the appliance from a 600 mm appliance to a 900 mm appliance. [154] Despite Mr Callianiotis’ contention to the contrary any failure to document such a variation was the Builder’s failure and not the Home Owners. It was the Builder’ s obligation to ensure that any work actually performed was performed in accordance with all relevant laws and legal requirements, including Australian Standards and carried out in an appropriate and skilful way and with reasonable skill and care.62 This is clearly a defect for which the Builder is responsible. [155] I note, from the photographs in Mr Wright’s report, that the splashback appears to be tiled such that the rectification is likely to at least require both an electrician and a tiler. I observe that the kitchen cabinets were constructed in such a way to accommodate the 900 mm appliance such that the Builder was clearly aware that the appliance to be installed was not a 600 mm appliance. In this regard, the kitchen cabinet plans sent to Mr Callianiotis by the subcontractor on 30 April 2013 clearly shows a 900 mm appliance. [156] Mr Wright also gave evidence that the stove’s removable and adjustable legs had been installed in different fixing positions. He accepted this was a category two defect and was of the opinion that the kick plate beside the stove could easily be made square by repositioning one stove leg. [157] Mr Wright’s report noted that there was incomplete work in the master bedroom walk in robe as conduit and cables were protruding from holes in the wall sheeting. Solatium [158] I am not satisfied that any amount is payable to the Home Owners for solatium. [159] The Home Owners contend that I should award an amount for solatium to compensate for the inconvenience of not receiving the contracted works. Claims for solatium have generally been allowed to natural persons in building disputes where rectification has been found to be not both necessary and reasonable and there is no evidence of a diminution of value.63 In Dyer v Spence,64 the Tribunal awarded $5000 for solatium to the home owner, in circumstances where the expert’s evidence of rectification costs 60 Exhibit 3, Statement Ms Knowles, page 148, [3]. 61 Exhibit 3, Statement Mr Cooper, page 176, [7]. 62 Clause 35.1 of the Contract. 63 Coshott v Fewing Joiner Pty Ltd [1996] NSWSC 270; Ruxley Electronics & Constructions Limited v Forsyth [1996] AC 344. 64 [2017] QCAT 211. -- 24 of 30 -- 25 did not include amounts in respect of a number of defects because they would be difficult to rectify short of demolition. [160] The Victorian Court of Appeal recently considered the issue of awarding solatium and stated:65 [62] The general rule is that damages for anxiety, disappointment and distress are not recoverable in an action for breach of contract. The principal exceptions to that rule are where the contract is one whose object is to provide enjoyment, relaxation or freedom from molestation, and where the damages proceed from physical inconvenience caused by the breach. It is the latter exception upon which the respondent relied. [63] The respondent pointed to several cases in which damages for anxiety, distress and disappointment have been awarded following breach of a building contract giving rise to physical discomfort or inconvenience. However, all of these cases involved physical imposition upon the plaintiff, whether by virtue of having to live with offensive odours or a leaking roof, or in unsanitary or dirty conditions, or being obliged to vacate the defective premises. Nothing of this kind was alleged in the present case, where the respondent’s premises were intended for the conduct of a business rather than her own occupation. [161] The apparent need to rely upon a general claim for solatium is a function of the lack of evidence as to the reasonable method of rectification for a number of the identified defects or incomplete work and the reasonable cost of that method of rectification or completion. This, in large part, appears to be a consequence of a contention, only abandoned at the final hearing, that the Tribunal should make various orders by way of interim order such as appointing an assessor. Any request for interim order ought to have been pursued by the Home Owners earlier in the proceedings. There was also no independent or documented evidence of diminution of the value of the house. [162] The Home Owners submit that in the alternative the Tribunal should consider awarding nominal damages. Nominal damages are generally awarded when a breach has been established but no real loss has been suffered. In this case, the Home Owners had legal assistance to prepare and present evidence as to both liability and quantum issues and simply did not provide cogent evidence in respect of a number of items. In these circumstances I am not satisfied that I should award nominal damages.66 Liquidated Damages [163] I find that the Home Owners are entitled to liquidated damages in the amount of $13,020. [164] Clause 31.1 of the Contract provides that the owner is entitled to liquidated damages for each day after the end of the building period to and including the earlier of: (a) the date of practical completion; or (b) the date the contract is ended; or 65 Archibald v Powlett [2017] VSCA 259 (citations omitted.) 66 Sun Building Services Pty Ltd v Minh & Anor [2015] QCAT 134. -- 25 of 30 -- 26 (c) the date the owner takes control of, possession of, or uses the site or any part of the site. [165] The rate specified in the contract schedule is $30 per day. The Home Owners claim that the rate should be varied to $50 per day. [166] There is no evidence before me that the Home Owners took control of, possession of or used the site or part of it prior to purporting to terminate the contract on 27 June 2014. [167] The Tribunal has power to declare any mislead ing, deceptive or otherwise unjust contractual term to be of no effect, or otherwise vary a contract to avoid injustice .67 Mr Gimbert on behalf of the Home Owners was unable to refer me to any authority for the contention that I should vary the per day rate from $30 to $50 per day on the basis that it is an unjust term. [168] I find that there is insufficient evidence before me, upon which I could be satisfied on the balance of probabilities, that the rate of $30 per day should be varied as an unjust term. [169] The Home Owners contended that $30 per day may have been appropriate for a short delay but that for such a long delay it was insufficient and unjust. The Builder contends that it can be implied, that the rate was derived by agreement as the default rate, if no rate is specified, is $50. There is no specific evidence before me as to how the figure of $30 per day was derived prior to the entering into of the Contract. There is also no specific evidence before me as to the ‘true cost’ of the lengthy delay in terms of additional rent, storage fees and excess council rates charged on a non-owner occupied basis. The Home Owners bear the onus of proving their claim. There is insufficient evidence to make a finding that the term is unjust. [170] The Builder conceded that liquidated damages in the sum of $1,980 were payable as that amount was allowed in invoice 248B dated 4 August 2014. This offset was inconsistent with its claim that the Notices of Extension of Time validly extended the date for practical completion to 18 March 2015. [171] The Home Owners calculated, and I accept, that the date the Contract was terminated was 434 days after the end of the building period so that liquidated damages at the rate of $30 per day equates to $13,020. Are the Builder’s invoices payable? [172] I find that no amount is payable by the Home Owners in respect of the Builder’ s invoices. [173] The Builder claims amounts owing as set out in four invoices. 67 QBCC Act, s 77(3)(e). -- 26 of 30 -- 27 Invoice 248B dated 4 August 2014 for $30,870 [174] I find that no amount is payable to the Builder in respect of Invoice 248B as any entitlement to claim for work performed since the previous stage claim merged in a claim for damages upon termination on 27 June 2014.68 [175] The Builder claims the Practical Completion stage claim, $32,850, less conceded liquidated damages payable $1,980.69 [176] Earlier in these reasons, I found that Practical Completion under the Contract was not achieved prior to the Home Owners’ termination on 27 June 2014. The Practical Completion stage claim was not due and owing under the Contract at the time it was made. [177] As the Home Owners’ seek damages for incomplete or defective work, the value of work performed by the Builder is required to be taken into account in determining any entitlement to damages.70 Invoice 240C also dated 4 August 2014 for $4,323.19 [178] I find that no amount is payable to the Builder in respect of Invoice 240C. [179] The Builder claims variations in the sum of $5,754.98 together with interest in the sum of $2,468.21 on overdue payments less $3,900 paid. During the final oral submissions, Mr Long conceded the Builder did not pursue the claim for variatio ns. Mr Gimbert conceded that the $3,900 in respect of variations was paid voluntarily and recovery of that amount was not pursued. [180] Some details of the interest claim were set out in Exhibit 5. It calculates interest at 16.25%. Clause 32.1 of the Contract provides that default interest is payable if the owner does not pay the amount owing in full by the due date. Clause 37.1 of the Contract provides that default interest means the annual rate equal to the Commonwealth Bank overdraft index rate: quarterly charging plus 5%. [181] There is no documentary evidence before me as to the relevant Commonwealth Bank interest rate at various relevant times. Mr Callianiotis gave oral evidence that he looked the rate up on the website. I am not satisfied, on the balance of probabilitie s, that the interest rate claimed is in accordance with the Contract. Interest rates are likely to change over a period of time. Only one rate has been used to calculate the amount claimed despite the period to which it was applied extending from 30 October 2012 to 4 August 2014. I am not satisfied that a claim for interest in any particular amount has been established. [182] In any event, three of the entries in Exhibit 5 relate to the now abandoned claim for variations. The Builder did not document the variations as required by the Contract and the DBC Act. No amount was therefore payable under the Contract and therefore interest was never payable under the Contract on those amounts. 68 Ownit Homes Pty Ltd v Bachelor [1983] 2 Qd R 124; QLine Interiors Pty Ltd v Jezer Construction Group Pty Ltd & Ors [2009] 2 Qd R 566; Chelbrooke Homes Pty Ltd v Russell & Anor [2011] QCAT 278. 69 Equates to 66 days at $30/day. 70 Ricchetti v Lanbuilt Pty Ltd [2011] QCATA 266. -- 27 of 30 -- 28 [183] Further, I am not satisfied, on the balance of probabilities, that each of the invoice s were due on the dates they bear nor am I satisfied that the Home Owners were responsible for the delay. There is evidence before me that the invoice for the fixing stage was submitted early and rejected by the bank. There is also evidence before me that there was a delay in the bank paying the enclosed stage claim due to incorrect paperwork being submitted by the Builder. Invoice 383 dated 31 October 2015 for $42,686.03 [184] I find that no amount is payable to the Builder in respect of Invoice 383. [185] The credit to the Home Owners in the sum of $6,194 forming part of this invoic e ought to be taken into account in determining any amount owing as between the parties. [186] The Builder claims for delay in the sum of $37,613.25, less a credit in respect of Whitsunday Marble and Granite in the sum of $6,194, a claim for interest on overdue payments in the sum of $5,376.28 and a claim for legal costs to date in the sum of $5,890.50. Delay claim [187] I find no amount is payable to the Builder for the delay claim. [188] The invoice seeks 0.125% of the Contract price per day. The period of delay is described as enclosed stage to fitment of kitchen tops, 5 June 2013 to 20 January 2014. [189] Mr Long clarified during the final oral submissions that the Builder relied upon Schedule 5 clause 4(d) of the Contract to make the delay claim. [190] Clause 4(d) provides to a builder a right to claim amounts in respect of a delay to commencement of longer than 4 weeks: (a) at a rate of 0.125% of the contract price for each week or part of a week of the delay after the first 4 weeks of the delay; (b) where commencement was delayed due to a cause for which the builder was not responsible. [191] The delay claimed in invoice 383 purports to be for delay after commencement rather than before commencement and claims the amount per day not per week or part of a week. [192] Schedule 5 clause 4(d) of the Contract does not support the claim made in the invoic e. [193] The amount a builder is entitled to under Schedule 5 clause 4(d) is the greater of the amount of the costs incurred by the builder because of the delay and the amount calculated by reference to 0.125% of the contract price. There is no evidence of the amount incurred by the Builder. [194] Even if other elements of this clause were satisfied, there is insufficient evidence to find the amount calculated by reference to the formula was greater than the costs actually incurred. As set out earlier in these reasons, there is also insufficient evidence to make a finding as to the cause of the delay to commencement. -- 28 of 30 -- 29 [195] For completeness, a claim, if made under Schedule 5 clause 5, for a delay after commencement caused by the owner at a rate of 0.05% of the contract price per day would also fail as there is no evidence of the amount incurred because of the delay even if other elements of this clause were satisfied. There is insufficient evidence to find the amount calculated by reference to the formula was greater. [196] The Builder has not proved any entitlement to any amount for delay. Interest [197] I am not satisfied that a claim for interest has been established. [198] The Builder claims for interest on overdue payments accrued to 30 June 2015. There are no details in the invoice as to amounts claimed to be overdue. [199] For the reasons set out earlier, there is insufficient evidence before me to enable me to make a finding of the rate of interest payable. To the extent that interest is claimed on the practical completion stage claim or the undocumented variations claimed no interest is payable as those amounts were not due and payable under the Contract at the time this invoice was generated. The Builder has not proved the claim to interest on the balance of probabilities. Legal costs [200] I find no amount is payable to the Builder in respect of legal costs claimed in invoic e 383. [201] The basis for the Builder’s claim for legal costs is not set out in the invoice. [202] Mr Long submitted that legal costs were payable as the Home Owners were at fault for the delays. During the hearing, I was referred to clause 33.1 of the Contract, which provides that The owner must pay to the builder any debt collection costs, including any legal fees on a solicitor and own client basis, associated with recovering or the attempted recovery of an amount under this contract. [203] To the extent the claim for legal costs relates to a claim under clause 33.1 in respect of the unsuccessful delay cost claim, I am not satisfied that an entitlement to legal costs arises because the Builder has not established an entitlement to any amount under the Contract. [204] Further, there is no invoice in evidence before me setting out what services were rendered to the Builder, to be satisfied that such amounts were expended and are validly claimed under clause 33.1. [205] There is insufficient evidence to prove any entitlement. Invoice 393 dated 31 October 2015 for $5,879.84 [206] I find that no amount is payable to the Builder in respect of Invoice 393. [207] The Builder claims for interest on overdue payments accrued to 31 October 2015. There are no details in the invoice as to amounts claimed to be overdue. -- 29 of 30 -- 30 [208] For the reasons set out earlier in respect of interest claims, there is insufficie nt evidence before me to prove any entitlement. To the extent that interest is claimed on the practical completion stage claim or the undocumented variations claimed no interest is payable as those amounts were not due and payable under the Contract at the time this invoice was generated. Summary [209] I find that the Builder is to pay to the Home Owners the amount of $11,760, calculated as follows: Contract Sum $328,500.00 Plus variations paid voluntarily $3,900.00 Less negative variation – invoice 383 $6,194.00 Less amount paid including for variations $299,550.00 Sub-total amount payable to the Builder $26,656.00 Less cost to complete defective/incomplete work Plumbing (incl GST) $2,409.00 Battering (incl GST) $4,273.50 Plastering (incl GST) $18,260.00 $24,942.50 Sub-total amount payable to the Builder $1,713.50 Plus other damages Locksmith costs $453.50 Liquidated damages @ $30 x 434 days $13,020.00 Amount payable to Home Owners $11,760.00 Costs [210] Each party seeks their costs of this proceeding. During the course of the matter some costs were reserved. It is appropriate to make directions for the receipt of submissio ns on costs. -- 30 of 30 --