Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262

CITATION: Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262 PARTIES: Contrast Constructions Pty Ltd v Brett Andrew Bartlett APPLICATION NUMBER: APL370-13 PARTIES: Brett Andrew Bartlett v Contrast Constructions Pty Ltd APPLICATION NUMBER: APL332-13 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM Member Favell DELIVERED ON: 9 September 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The Appeals are allowed in part. 2. The order made that Contrast Constructions Pty Ltd pay Mr Bartlett the sum of $218,940.17 is reduced by $2900 to $216,040.17. 3. Interest should be allowed in addition on the sum of $216,040.17 ($218,940.17 less $2900) at the rate of ten percent per annum compounding monthly between 15 December 2009 and 4 February 2013. CATCHWORDS: APPEALS - BUILDING DISPUTE - whether error of law - whether leave to appeal required - whether acceptance of repudiatory conduct - whether reasonable to issue a notice to remedy after work abandoned - whether liquidated damages appropriate - whether interest awarded appropriate -- 1 of 22 -- 2 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). REASONS FOR DECISION Senior Member Stilgoe [1] In this matter the Appeal Tribunal consisted of Mr Favell, QCAT Member and me. I have had the benefit of reading his reasons in draft. I agree with his reasons, and his conclusions, and the order he proposes. Member Favell [2] Mr Bartlett contracted with a building company, Contrast Constructions Pty Ltd, on 23 June 2006 to build a house on the riverfront at 32 Hiron Street, St Lucia at a cost of $2,302,000. That sum was adjusted to $2,520,097.96. [3] The contract was administered by an architect who also acted as an assessor. The role of the architect was to provide instructions to the builder, to act independently in assessing claims for delay costs, costs for completion of work and any claims for liquidated damages arising from a change to the date of practical completion. [4] The architect for the purpose of administering and assessing the contract was initially Bligh Voller Nield Pty Ltd. The parties had agreed at the hearing of this matter that DM2 Architecture became the architect from 14 October 2008. [5] In a decision now sought to be the subject of appeal the learned Member described the house as unique in that it had various items to be used in its construction that were of a high quality and design. She gave the example that there were approximately 20 windows to be installed using a PBC product instead of wood. The PBC product is rare for Australian standards but not uncommon in the European and Asian markets and was, according to the builder, a difficult product to source. [6] Apparently there were difficulties associated with the supply of PBC windows and the application of paint to the surface which had to be sourced through a German automotive paint supplier. Mr Bartlett later elected to proceed with wood instead of PBC for the windows. [7] There were many disputed issues during the construction of the house, a change of architect and issues about incomplete and defective works. The parties could not resolve the issues and proceedings were commenced in the former Commercial and Consumer Tribunal in September 2009. [8] The contract came to an end on 15 December 2009. [9] The matter proceeded to a hearing before QCAT over five days. -- 2 of 22 -- 3 [10] The parties agreed on a list of issues to be determined by the Tribunal. [11] On 5 July 2013 the Tribunal ordered that Contrast Constructions Pty Ltd pay the respondent Mr Brett Bartlett the amount of $219,162.84 plus $130, 547.35 in interest. [12] The amount of $219,162.84 awarded to the respondent included an amount assessed by the Tribunal for alleged incomplete and defective works that was offset against money payable to the applicant by the respondent including the balance contract sum and adjustment of time and costs claims also assessed by the Tribunal. [13] On 15 July 2013 Contrast Constructions Pty Ltd filed an application seeking an order pursuant to section 135 of the QCAT Act to correct the amount awarded to the respondent on 5 July 2013 in relation to the assessed amount for incomplete and defective works, the amount of $415,429.78 and the amount awarded for interest, namely the amount of $130,547.35. [14] In the main, the Tribunal rejected the application to correct the amount awarded to the respondent and the amount awarded for interest. However, of its own motion, it corrected an order for an amount awarded for a particular item and ordered that the order made on 5 July 2013 be amended and the applicant Contrast Constructions Pty Ltd pay the respondent Mr Brett Bartlett the amount of $218,940.17 plus $130,363.36 in interest by 4pm on 15 September 2013. [15] On 5 August 2013 Mr Bartlett filed an appeal application and sought an order that the damages ordered by the Tribunal be increased by the amount of liquidated damages and correct calculation of interest to the sum of $619,232.14. He also sought his costs of and incidental to the appeal. [16] He did not seek leave to appeal. [17] The grounds of the appeal were set out as follows: (a) The Tribunal erred in law in finding that Mr Bartlett accepted the builder’s repudiatory conduct on 14 September 2009 by serving a notice to remedy default. (b) The Tribunal erred in law in finding that the claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder’s favour for the delay caused in providing the instruction. (c) The Tribunal erred in law in finding that Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some 9 months after the builder abandoned the site. (d) The Tribunal erred in law in not awarding Mr Bartlett any contractually prescribed liquidated damages for the period 21 -- 3 of 22 -- 4 March 2008 to 15 December 2009 (90.57 weeks at $2100 per week, equals $190,197. (e) The Tribunal erred in law in not awarding Mr Bartlett interest on the liquidated damages at the rate of ten percent per annum compounding monthly. (f) The Tribunal erred in law in awarding Mr Bartlett interest on damages at the rate of ten percent per annum when the contractual rate of interest was ten percent per annum compounding monthly. [18] On 30 August 2013 Contrast Constructions Pty Ltd filed an appeal application. It seeks an order that the damages awarded be reduced by the correct calculation of interest and costs caused by delay to the sum of $90,401 plus interest in the amount of $24,459.76 and its costs of and incidental to the appeal. [19] It did not seek leave to appeal. [20] The grounds it advances are as follows: (a) The Tribunal erred in law in finding that the time assessed contractually for extension of time by notice dated 14 April 2008 was 50 days instead of 79 days. (b) The Tribunal erred in law in finding that Contrast Constructions Pty Ltd was not contractually entitled to interest on the amounts owing as (sic) to it as determined by the Tribunal. (c) The Tribunal erred in law by finding that item 327 in the amount of $30,000 was a defect. (d) The Tribunal erred in law in finding that item 438 was a defect in the amount of $20,000 instead of $8,000. (e) The Tribunal erred in law by allowing preliminaries in the amount of 12% to be applied to defective and incomplete items by reason of the joint expert report dated 7 September 2011. The legal considerations for appeals in QCAT [21] A party may appeal on a question of law without the Appeal Tribunal’s leave, unless the decision falls into certain limited categories that do not apply in these proceedings.1 A party may generally appeal to the Appeal Tribunal on a question of fact, or a question of mixed law and fact, only if the Appeal Tribunal gives leave to appeal.2 [22] Finality in litigation is highly desirable because any further action beyond the hearing can be costly, and unnecessarily burdensome on the parties.3 [23] A finding of fact will generally not be disturbed on appeal if the evidence before the Tribunal supports the inferences drawn and the facts found.4 It 1 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) s 142. 2 QCAT Act s 142. 3 See Fox v Percy (2003) 214 CLR 118, 128 per Gleeson CJ, Kirby and Gummow JJ; Lida Build Pty Ltd v Miller and Another [2011] QCATA 219. 4 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 355 per Mason CJ. -- 4 of 22 -- 5 is not the Appeal Tribunal’s task to decide where the truth lay as between the competing versions given by the parties.5 [24] Whether a decision is based on findings of fact which are open on the available evidence, is a question of law.6 The appeal jurisdiction is not generally the proper forum to receive evidence on disputed facts.7 [25] Leave to appeal will ordinarily only be granted when a question of general importance upon which further argument and a decision of the Appeal Tribunal is to public advantage;8 there is a reasonably arguable case that the primary decision maker made an error9 and there are reasonable prospects that the applicant would be granted orders in its favour; 10 or to correct a substantial injustice to the applicant caused by the error.11 [26] The statutory regime under which Queensland Civil and Administrative Tribunal operates places obligations upon parties themselves: to take care in their dealings with Tribunal matters, and to act in their own best interests. QCAT resources for the resolution of disputes are in high demand and serve, as the High Court has recently observed in relation to court resources, “the public as a whole, not merely the parties to the proceedings”.12 [27] In the context of an appeal, a party has an obligation to present an identifiable argument that an error has been made by the Tribunal in reaching its decision. It must be more than mere disagreement with the Tribunal’s finding on a contested issue. The primary function of the Appeal Tribunal is to correct errors made by the Tribunal. It is not to allow an applicant to have a second opportunity to present or argue their case in the hope that the Appeal Tribunal will consider the evidence differently and the party will achieve a different result on the issues appealed.13 Facts found by the Tribunal [28] Mr Bartlett’s counsel in written submissions conveniently sets out a number of facts found by the Tribunal as follows. [29] The entitlement to liquidated damages is prescribed in clause M8 of the contract.14 The requirements for that clause to operate are that the works 5 Fox v Percy (2003) 214 CLR 118. 6 Kostas v HIA Insurance Services Pty Ltd trading as Homeowners Warrant (2010) 241 CLR 390. 7 See discussion in Georgalis v Andoras (1993) 113 FLR 196; Doherty v Liverpool District Hospital (1991) 22 NSWLR 284. 8 Glenwood Properties Pty Ltd v Delmos Pty Ltd [1986] 2 Qd R 388, 389; McIber Bulk Liquid Haulage v Fruehauf Australia [1989] 2 Qd R 577, 578 and 580. 9 QUYD Pty Ltd v Marvass Pty Ltd (2009) 1 Qd R 41. 10 CAC HIA v Grech [2009] NSWCA 232, [13]. 11 QUYD Pty Ltd v Marvass Pty Ltd (2009) 1 Qd R 41. 12 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 217; Lida Build Pty Ltd v Miller and Another [2011] QCATA 219, [10]. 13 Lida Build Pty Ltd v Miller and Another [2011] QCATA 219, [11]-[12]. 14 Paragraph [58] Reasons for Decision. -- 5 of 22 -- 6 have not reached practical completion (as defined in clause M1.1) by the date for practical completion. [30] The parties agreed that the adjusted date for practical completion was 21 March 2008 and that the contract was terminated on 15 December 2009.15 [31] Mr Bartlett claimed liquidated damages between 21 March 2008 and 15 December 2009 (inclusive) plus interest at ten percent.16 [32] Mr Bartlett gave notice of the intention to claim liquidated damages as required by the contract on 30 December 2008.17 [33] The builder’s contention was that they were awaiting instructions.18 [34] In late December 2008 and early January 2009 the builder elected to no longer proceed with the works.19 [35] As at 12 January 2009, notwithstanding the outstanding instructions, there were incomplete works for which instructions had been provided.20 [36] As at 12 January 2009 the builder abandoned the works under the contract.21 [37] Mr Bartlett accepted the builder’s repudiatory conduct on 14 December 2009 by serving a notice to remedy default.22 [38] The claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give reason to an extension of time claim in the builder’s favour for the delay caused in providing the instructions.23 [39] Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some nine months after the builder abandoned the site.24 [40] In paragraph [80] of the Decision, the Member found: The claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues that would delay practical completion and that would otherwise give reason to an extension of time claim in the builder’s favour for the delay caused in providing the instructions. Mr Spender, the builder’s expert witness, gave evidence at the hearing that the installation of the hot water system was necessary for practical 15 Paragraph [59] Reasons for Decision. 16 Paragraph [60] Reasons for Decision. 17 Paragraphs [61]-[65] Reasons for Decision. 18 Paragraphs [66]-[67] Reasons for Decision. 19 Paragraph [68] Reasons for Decision. 20 Paragraph [76] Reasons for Decision. 21 Paragraph [78] Reasons for Decision. 22 Paragraph [79] Reasons for Decision. 23 Paragraph [80] Reasons for Decision. 24 Paragraph [81] Reasons for Decision. -- 6 of 22 -- 7 completion to be reached. The Tribunal has already made a finding that this instruction was outstanding as at 18 December 2008. [41] At paragraph [81], the Tribunal found: Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some nine months after the builder abandoned the site. It would not be fair to allow Mr Bartlett’s claim for liquidated damages in circumstances where he knew the builder had abandoned the site in late December 2008 and early January 2009. Mr Bartlett is entitled, however, to be put in the position that he would have been in had the contract been performed properly but he must give credit to the builder for work performed or any money outstanding in relation to the work performed under the contract. [42] Mr Bartlett contends as his first ground of appeal that the finding that he accepted the builder’s repudiatory conduct on 14 December by serving a notice to remedy default is wrong. [43] Paragraphs [78] and [79] of the Reasons are as follows: [78] The Tribunal finds that the builder has, as at 12 January 2009, abandoned the works under the contract and has otherwise failed to continue completion of the works. The builder’s failure to return to the site and continue completion of the work was repudiatory conduct such as to evince an intention to no longer be bound by the contract, or to be bound by the contract only on terms other than those provided for in the contract.25 [79] Mr Bartlett has accepted the builder’s repudiatory breach some nine months later, on 14 December 2009,26 when a notice to remedy default referring to, amongst others, the builder’s abandonment of the site and a failure to complete works was issued. Mr Bartlett elected to terminate the contract by notice dating 15 December 2009.27 [44] The exhibit relied on in paragraph [78] of the Reasons was a letter on Contrast letterhead dated 18 November 2008 which contained the following: Architect’s failure to act – contractor may suspend if default not remedied  Pursuant to Q12, Contrast will suspend the works with full extension of time with costs from the State. Contrast is entitled to any loss, expense or loss due to this suspension of works. This is for the following reasons – o Pursuant to Q11 the owner has failed to make progress claim as per certificate number 24 dated 23.09.2008 o Pursuant to N8 the architect has failed to issue a certificate from last progress payment submitted o Pursuant to A8 have not received a response to the failure to act notice dated 22.10.2008 25 Shevill v Builders Licencing Board (1982) 149 CLR 620. 26 Exhibit 1, tab 63 27 Exhibit 1, tab 65. -- 7 of 22 -- 8 [45] The exhibit relied on to support the finding in paragraph [79] of the Reasons is a document headed ‘Notice to Remedy Default’. It purported to be given under clause Q1 of the contract. It alleges that the contractor had failed to meet substantial obligations under the contract which obligations are particularised. It then requires the contractor to remedy those defaults within ten business days after the giving of the notice. It also contains the following: The owner hereby gives notice that he intends to terminate the contract if the contractor does not remedy the above defaults, or show reasonable cause why they cannot be remedied within ten business days after the giving of this notice. [46] Mr Bartlett contends that the word “acceptance” is used in the context of repudiation to describe the promisee’s election to terminate the performance of the contract28 and acceptance must generally be communicated to the promisor.29 [47] Contrast Constructions Pty Ltd concedes that “acceptance” in the context of repudiation describes the election by a party to a contract to terminate.30 [48] In Marshall v Council of the Shire of Snowy River the Court stated31: An examination of the decision of the High Court of Australia in Progressive Mailing House Pty Ltd v Tabali (1985) 157 CLR 17, particularly per Deane J at 55, demonstrates that, a lease being a contract, when one party to it repudiates it or commits a fundamental breach or a breach of one of its essential terms the other party may “accept” the repudiation or breach and terminate the lease. [49] Contrast Constructions concedes in circumstances where the Tribunal found that Contrast Constructions Pty Ltd had abandoned the works on 12 January 2009 and such conduct was repudiatory that the notice to remedy breach was not an “acceptance” of repudiatory conduct but rather the notice of termination was. [50] The notice of termination was on 15 December 2009.32 [51] In my view, there was error in a finding that Mr Bartlett accepted the builder’s repudiatory conduct on 14 December 2009 by serving a notice to remedy default however the difference in date does not affect the finding that Mr Bartlett did accept the repudiatory conduct. 28 Bowes (trading as British Tyre Co.) v Chaleyer (trading as J. Chaleyer & Co.) (1923) 32 CLR 159, 169. 29 Hooper Bail Associated Ltd v Natcon Group Pty Ltd (1992) 28 NSWLR 194, 213. 30 Appeal outline for Contrast paragraph 2 31 Marshall v Council of the Shire of Snowy River (1994) 2 BP R 14, 447 per Meagher JA, agreed to by Powell JA stated at page 14, 457. 32 Exhibit 1/65. -- 8 of 22 -- 9 The second ground of appeal [52] Mr Bartlett contends that the finding that the claim for liquidated damages by him must fail on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder’s favour for the delay caused in providing the instructions is wrong. [53] He contends that it is inconsistent with the findings of fact that as of 12 January 2009, notwithstanding the outstanding instructions there were incomplete works for which instructions had been provided and as at 12 January 2009 the builder abandoned the works under the contract. He says that there is no evidence available from which it could be found that outstanding issues including instructions that would delay practical completion and that there would have been an extension of time claim in the builder’s favour for the delay caused in providing the instructions. Mr Bartlett submits that the absence of evidence is highlighted by clause L6 of the contract in relation to simultaneous delays and the builder was not entitled to an extension of time for an absence of instructions, if it coincided, as it did, with a period in which the builder had abandoned the site and formed the intention of not returning. [54] Contrast Constructions argues that the determination on liquidated damages is not inconsistent with the findings identified by Mr Bartlett. They say that the member determined as at 12 January 2009 there were outstanding instructions that delayed practical completion33; and on 14 October the architect specified in the contract was removed by Mr Bartlett and replaced34; that the change in architects has caused a delay in the works35; and that Mr Bartlett had acted unreasonably in issuing a notice to remedy breach to Contrast some nine months after Contrast had abandoned the site and terminated the contract after some twelve months.36 [55] The practical date for completion was 21 March 2008. Contrast had sought instructions from the architect on 21 September 2008. Contrast say that by operation of clause L1.3 and L1.6 of the contract Contrast was able to make a claim for adjustment of time for practical completion and time costs from the architect. They say that the reference to clause L6 is of no assistance to Mr Bartlett as it applied to the period around Christmas 2008 for eight working days outside a period for which an adjustment to time would apply, namely in the period beginning 21 September 2008. [56] Contrast also says that the ground of appeal is from a finding of fact and Mr Bartlett needs leave to appeal in respect of something he has not done and is now out of time to do. [57] It is correct that Mr Bartlett did not seek leave to appeal. 33 Paragraph [16], [45], [52], [54], [56], [66], [76] and [80] Reasons for Decision. 34 Paragraph [3] Reasons for Decision. 35 Paragraph [55] Reasons for Decision. 36 Paragraph [81] Reasons for Decision. -- 9 of 22 -- 10 [58] In my view the finding that there are outstanding instructions that would delay practical completion which would otherwise give rise to an extension of time claim in the builder’s favour is not an appeal from a finding of fact when that finding is not based on evidence. I am not able to find evidence which would support such a finding. That being so, in my opinion, the finding was an error of law. However the because of the reasoning with respect to the third ground of appeal there will be no change to the finding concerning liquidated damages. Third ground of appeal [59] Mr Bartlett contends that the finding that he otherwise failed to act reasonably by issuing the notice to remedy breach some nine months after the builder abandoned the site is wrong. Although there was an allegation by the builder that Mr Bartlett had acted unreasonably in issuing the notice to remedy default nine months after it had abandoned the site, Mr Bartlett says that the builder’s evidence was to the contrary. He says that the builder by its solicitors denied it had vacated the site and asserted that it had intended to return to complete the works.37 He also says that the builder’s director Mr Dirking conceded shortly before the hearing38 and during his oral evidence that the denial that the builder had vacated the site was false. He contends Mr Dirking justified the substantial period of inaction by reference to without prejudice negotiations.39 [60] In my view the third ground concerns a finding of fact for which leave has not been sought or obtained. Mr Bartlett is now out of time for seeking such leave. [61] The Tribunal had found that Contrast had abandoned the site by 12 January 2009 and that Mr Bartlett had knowledge of the abandonment. That being so, in my view it was not unreasonable or wrong for the learned Member to make the finding. [62] The Tribunal was referred to Payalba Commercial Gardens Pty Ltd v Braxco Pty Ltd and others40 in which Wilson AJA stated: [97] Although it is commonly said that an injured party has a “duty” to mitigate its loss, as Irvine CJ said in Driver v War Service Homes Commissioner: … This expression, I think, does not mean that he is under any duty in the ordinary sense, towards the party breaking the contract, but that he cannot be said to have really incurred any loss which might have been avoided by his taking such steps as a reasonably prudent man in his position would have taken to avoid further loss to himself; and the best test is, what would such a man do to avoid such a further loss to himself, supposing that, from insolvency form the other party, or for some other reason, he could not get any damages. 37 Exhibit 2/115 and exhibit 2/116. 38 Exhibit 10, paragraph 29 39 Exhibit 10, paragraph 31 40 [2011] QCA 148. -- 10 of 22 -- 11 [63] In my view, on the material before me, it was open for the learned Member to determine that Mr Bartlett had acted unreasonably and was not entitled to liquidated damages. Fourth and fifth grounds of appeal [64] Mr Bartlett contends the quantum of his entitlement to liquidated damages was purely arithmetic on the agreed facts in evidence; $2100 per week41 for the period of 21 March 2008 to 15 December 2009 (90.57 weeks) equals $190,197. [65] He says the entitlement to liquidated damages was also set out in the architect’s certificates42 thereby entitling Mr Bartlett to interest on the same in accordance with clause N15 of the contract, ten percent per annum compounding monthly. [66] Contrast submits that, if the decision that Mr Bartlett was not entitled to liquidated damages is not overturned, then the quantum is irrelevant. It says that in the event that he is entitled to liquidated damages there will need to be a retrial of that aspect of the case on the basis that the question of what period he is entitled to needs to be determined. [67] Given that I have determined that the finding that the claim for liquidated damages must fail should not be set aside this ground of appeal should be dismissed. Sixth ground of appeal [68] Mr Bartlett in the amended defence and counterclaim filed 5 February 2013 sought interest as follows: “Interest on damages in accordance with the terms of the contract or otherwise”. [69] The power to award interest is contained in section 77(2)(c) of the Queensland Building Services Authority Act 1991 (Qld). 77 Tribunal may decide building dispute (1) A person involved in a building dispute, may apply, as provided under the QCAT Act, to the Tribunal to have the Tribunal decide the dispute. (2) Without limiting the Tribunal’s power to resolve the dispute, the Tribunal may exercise one or more of any of the following powers: (a) … (b) … (c) Award damages, and interest on the damages at the rate, and calculated in the way prescribed under a regulation; (d) … [70] The rate of interest is prescribed by section 34B of the Queensland Building Services Authority Regulation 2003 (Qld): 41 Item 18, schedule 1 to the contract. 42 Exhibit 2/87 (page 3) and exhibit 2/128. -- 11 of 22 -- 12 34B Interest (1) For section 77(2)(c) of the Act, interest is payable on the amount of damages awarded – (a) If the parties have entered into a contract at the rate specified under the contract; or (b) At the rate agreed between the parties; or (c) Otherwise at the rate of ten percent. (2) The interest is payable on and from the day after the day that the day became payable until and including the day the amount is paid. [71] Interest was calculated by the learned Member on the amount of $415,429.78 in accordance with section 77(2)(c) of the Queensland Building Services Authority Act 1991 (Qld).43 [72] Mr Bartlett contends that interest could also have been calculated at the contractual rate of ten percent compounding per month in accordance with the relief. [73] There is no assertion made by Mr Bartlett that the learned Member erred in exercising the discretion to award interest in accordance with Regulation 34B(1)(c) from the date of termination of the contract. [74] In my view, on the proper construction of section 34B a discretion does not exist to choose between the alternatives in Regulation 34B(1). On a proper construction if the parties have entered into a contract and a rate is specified under that contract then that is, for the purposes of section 77(2)(c) of the Act, the interest payable on the amount of damages awarded. It is an error of law to conclude otherwise. [75] The calculation of interest was not in accordance with the method provided for in the contract and interest should be allowed on the sum of $216,040.17 ($218,940.17 less $2900) at the rate of ten percent compounding monthly. [76] Contrast Constructions has also appealed the decision. The grounds of the appeal are: (a) The Tribunal erred in law in finding that the time assessed contractually for extension of time by a notice dated 14 April 2008 was 50 days instead of 79 days. (b) The Tribunal erred in law in finding that Contrast Constructions Pty Ltd was not contractually entitled to interest on the amounts owing as to it as determined by the Tribunal. (c) The Tribunal erred in law in finding that item 327 in the amount of $30,000 was a defect. (d) The Tribunal erred in law in finding that item 438 was a defect in the amount of $20,000 instead of $8,000. 43 Paragraph [97] Reasons for Decision. -- 12 of 22 -- 13 (e) The Tribunal erred in law by allowing preliminaries in the amount of 12% to be applied to defective and incomplete items by reason of the joint expert report dated 7 September 2011. [77] Again no leave to appeal was sought with an assertion that leave to appeal was not required. Extension of time in paragraphs [17]–[30] [78] The learned Member identified the dispute as being about whether the builder should be entitled to claim costs in relation to the delay and (notwithstanding) whether ATN (adjustment of time notice) number 3 assessed the builder’s extension of time claim at 50 days or 79 days. The learned member was not satisfied “that the builder is entitled to 79 days for the delay caused by the window based on the architect’s assessment in ATN number 3.” She found that the evidence given by Mr Thompson about the relevant number of days was not consistent with what was stated in the ATN number 3 in the reference as it appears to the relevant claim: “delays in instructions regarding paint finish to the windows”. She said: [29] The ATN number 3 refers to 50 days in relation to “[Extension of Time] 23.02.07-07.06.07”. The dates referred to in the ATN number 3 are within the date range claimed by the builder. There is (notwithstanding) no evidence before the Tribunal that the builder disputed the architect’s assessment ATN number 3 under clause A8.1 of the contract within 20 working days. [79] The Member determined as follows: [30] The Tribunal determines that the time assessed is 50 days and the amount of $30,17544 is allowed for costs caused by the delay based on the evidence of Mr Thompson in relation to the amount of costs that would have been allowed being one half of the preliminaries amount of $1207 per day. [80] Contrast in its submissions says that the undisputed evidence at the hearing was that the architect had issued an “Adjustment of Time Notice number 3 dated 14 April 2008”45 with the time of 79 days but the member only allowed 50 days because they related it to the date range claimed by Contrast.46 [81] Contrast argues that the member erred in law in circumstances where the architect vaguely determined a period other than claimed by Contrast in accordance with clause H6 of the contract. It says that on the undisputed evidence before the Tribunal it was not open to go behind the architect’s determination and the amount of the adjustment in favour of Contrast on 44 The amount of $603.50 per day (half the preliminaries rate of $1207) for 50 days is $30,175. 45 Exhibit 2, document 5. 46 Paragraph [29] Reasons for Decision. -- 13 of 22 -- 14 the basis of the member’s decision as to the daily rate of such adjustment is the amount of $17,501.50. [82] Mr Bartlett says that the applicant reduced its claim at the commencement of the hearing from $106,154.20 for 115 days in the period 18 January 2007 to 16 July 2007.47 [83] The architect (BBN) in an Adjustment of Time Notice number 3 dated 14 April 200848 allowed 50 days within the date range. Contrast did not dispute under clause A8.1 the architect’s decision that exhibit1/18 was within 20 working days or at all and it argues that as a consequence Contrast is not entitled under clause A8.2 to dispute the matter at all and the claim for more days than the 50 allowed is doomed to fail. It is argued that Contrast could not rely upon the additional 29 days allowed by BBN as extension for another period. [84] I accept the argument advanced and it seems to me that the issue posed by both parties limited the finding open on the evidence. In my view the finding by the learned Member was correct on the evidence. Appeal Ground 2 [85] Contrast Constructions claims that the Tribunal erred in law in finding that it was not contractually entitled to interest on the amounts owing to it as determined by the Tribunal. [86] I am unable to find in the decision where such a finding was made. [87] Contrast Constructions in its submissions refers to paragraph [98] of the reasons for decision. It reads: [98] I will also allow the claim for preliminaries at a rate of 12% on the total amount of the assessed incomplete and defective works. I will allow interest on the incomplete and defective items (as assessed from the date of termination 15 December 2009) to the date of the hearing at the rate of 10%. It would not be fair to the builder to allow interest from the date of assessment by DM2 of the alleged incomplete and defective works as claimed by Mr Bartlett on the basis of the findings made by the Tribunal. [88] Contrast Constructions submits that as a matter of statutory construction once the Member exercised the power to award interest on damages then it must apply to all the damages awarded for each party and not selectively against one party. It says the Member awarded interest to Mr Bartlett without setting off the damages awarded to Contrast and it is incongruous to allow Mr Bartlett interest from the date of termination of the contract on the measure of damages without setting off the damages awarded to Contrast. 47 Paragraph [5]-[8] and Exhibit 1, 2 and 11 dated 14.10.11. 48 Exhibit 2/5. -- 14 of 22 -- 15 [89] Mr Bartlett summarises the ground of appeal in the following way: The applicant asserts that it was entitled to interest on the amounts deducted from the damages assessed in favour of the respondent for defective and incomplete works. [90] The two components that were deducted from the damages assessed in favour of the respondent for defective and incomplete works were, as set out in paragraph [99] of the reasons, namely the balance contract sum of $137,123.94 and the four extension of time claims in the sum of $59,143. Mr Bartlett submits that in respect of the balance contract sum no interest is or was payable because: (a) As a matter of fact the amount of incomplete and defective work exceeded that sum; (b) That sum was a notional calculation by reference to the adjusted contract sum less amounts paid to the applicant, not actually an amount due to the applicant; and (c) No claim for interest was made by the applicant in respect of that sum in the Amended Statement of Claim. [91] I accept those submissions as being correct. [92] In respect of the four extension of time claims Mr Bartlett says that interest was claimed pursuant to section 77 of the Act in paragraph BB of the Prayer for Relief in the Amended Statement of Claim but the quantum of those claims only became clear at the trial as a consequence of the evidence of Mr Thompson given for the first time at the trial. He says that the applicant was not entitled as a matter of discretion to interest based upon excessive claims made prior to the trial. [93] In my view it has not been shown that there is an error of law in the exercise of any discretion by the learned member. Third ground of appeal – determining item 327 as a defect [94] Item 327 is in respect of the construction of stairs under the contract. [95] In paragraph [97](r) the Tribunal said: Item 327 – stair flight width different It is accepted that the stair width differs from the plans. Mr Spender gave conflicting evidence about the measurement of the stairs at the time. If I accept Mr Spender’s evidence (at first instance) about the measurements of the as constructed stairs from wall to wall as being 805mm (compared to a design width of 879mm) and 750mm (compared to design width of 850mm) it is accepted that the stairs are a defect having regard to the “Guide to Standards and Tolerances” and the expert opinion of Mr Fox. I am unable to accept to Mr Spender’s further contradictory evidence given in relation to the measurement of the stairs. Mr Spender gave -- 15 of 22 -- 16 evidence that the stairs as constructed differ from the drawings and that they (as constructed) are narrower than the drawings. I am satisfied based on the evidence before me that the stair width was not in accordance with the drawings and based on the evidence of Mr Fox the as constructed stairs although functioning as a stair would be narrow taking into account a railing. Notwithstanding the evidence before the Tribunal about standards and tolerances of stairs this item should also be considered in the context of the work to be undertaken by the builder in that construction of the house included many fixtures that were of a high quality design and this would include the construction of the stairs. I will allow the assessed amount of $30,000. [96] Defect is defined in the contract to be “work that is in breach of any of the warranties set out in the contract documents or not in accordance with the standard or quality of building work specified in the contract documents”. [97] Contrast Constructions identifies the issue in this ground as whether the stairs were defective or not depends on whether the stairs had been constructed in accordance with the approved drawings. [98] Contrast Constructions identifies the evidence given by Mr Spender and says that when he first gave evidence it was that “the width of the stairs instead of being 805mm and 879mm as per the drawings was in fact 750mm and 805mm”.49 [99] When Mr Spender returned to give evidence it is said that he corrected his previous evidence on the basis that he had not included the 35mm dimensions either side of the stairs as per the drawings.50 It is said that he gave evidence that in fact the width of the stairs were 820mm and 875mm as compared with the dimensions in the drawings of 805mm and 879mm.51 [100] The learned Member said: Notwithstanding the conflicting evidence given by Mr Spender about the stair measurements, the Tribunal preferred the evidence of Ms Russel in relation to the assessment of incomplete and defective works on the basis that she inspected the works on 5 November 2008. [101] In paragraph [89] the learned Member said: There is an issue of credit that the Tribunal must address in relation to Mr Spender and his reliability as a witness. Mr Spender gave evidence at the hearing about the measurement of the stairs (item 327) and was referred to drawings in relation to the stairs and the measurement of the as constructed stairs. Mr Spender’s evidence was interposed and when giving his evidence some three days later he changed his opinion about the measurement of the as constructed stairs. [102] Contrast Constructions say that: 49 Transcript 2-115/1630-1637. 50 Transcript 5-5/58-78. 51 Transcript 5-5/80 (92). -- 16 of 22 -- 17 Ms Russel could not give any evidence as to whether the stairs had been constructed in accordance with the approved drawings because she never measured them to determine whether they were.52 [103] It says that when Mr Fox was asked about Mr Spender’s evidence about the width of the stairways it was before Mr Spender had finished his evidence and explained that he had not included the 35mm gap between the width of the stairs and the wall. The defect alleged was that at 750mm the width of the stairway was too narrow.53 It submits that the member erred as there was no evidence of the dimensions of the stairway before the Tribunal other than from on Mr Spender. It says that Mr Spender’s evidence was that the dimensions were in accordance with the approved drawings. That seems to be contradictory of the statement that Mr Spender gave in evidence that in fact the width of the stairs was 820mm and 875mm as compared with the dimensions in the drawings of 805mm and 879mm. [104] Ms Russel and Mr Spender addressed the issue of different widths between the approved shop drawings and what was constructed in exhibit 6. Mr Bartlett says that Ms Russel restates her assessment and Mr Spender observes correctly that the drawings54 show flights of differing widths. It is not the different widths that is the source of the defect but that the flights that were to be of different widths had not been constructed in accordance with the shop drawings. Mr Bartlett says materially each flight as constructed was narrower than the approved shop drawings. [105] References were made to the “Guide to Standards and Tolerances 2007”55 the purpose of which is expressed as “to set out in a single document some of the regulated standards and a reasonable position on standards that can be applied to non-regulated aspects of domestic building construction” and “this document may be used as a guide to determine whether or not an item is defective.”56 The Guide provides “departures from documented set out for… and stairs are defects if they exceed L/100 or 5 mm, whichever is the greater, where L is the documented dimension.”57 [106] Mr Bartlett submits that whatever version of the evidence of Mr Spender was accepted the departure from the shop drawings was so great as to “still constitute a defect according to the Guide or the evidence given by Mrs Fox and Medhurst”. [107] That seems to be correct. [108] The learned Member did not accept the second version given by Mr Spender and in part based her determination on the acceptance of Mr 52 Transcript 4-84/1355-1364. 53 Transcript 3-12/159-162. 54 Attachment E to exhibit 6. 55 Exhibit 28. 56 Exhibit 28 page 8 and page 9. 57 Exhibit 28 page 18. -- 17 of 22 -- 18 Spender’s initial evidence and the Guide to Standards and Tolerances 2007 and the expert opinion of Mr Fox. She clearly rejected the second version given by Mr Spender. [109] No error has been shown. Fourth ground – calculation of item 438 [110] The Tribunal determined that item 438 (stonework rectification) was payable in the amount of $20,000 on the basis of the evidence of Ms Russel. [111] The learned member said at paragraph [92](ee): Item 438 – budget for general stonework rectification Mr Spender gave evidence that in his opinion the work necessary was not extensive. I prefer the evidence of Ms Russel who stated at the hearing that the sandstone was not laid well, the joints were not aligned and not finished and there were damaged tiles. I will allow the amount assessed by Ms Russel in the amount of $20,000. [112] Contrast Constructions say that Ms Russel conceded during the hearing that items 34, 105, 125, 205, 206, 209, 256, 289, 349, 399 and 424 (totalling $2900 in exhibit 3) were items she had also included in the calculations of rectifying item 438.58 [113] It submits that the learned member erred by allowing Mr Bartlett to claim damages twice for the same defects. They say the amount allowed should have been $17,000. [114] The submissions made on behalf of Mr Bartlett are to the effect that the Tribunal preferred the evidence of Ms Russel over the evidence of Mr Spender. They do not address the contention of Contrast Constructions. [115] In my view it is clear that there has been an error made by including an allowance of $2900 in the assessment made for item 438. Fifth ground – allowance for preliminaries [116] In the decision delivered on 5 August 2013 the learned Member at paragraph [9] said: The respondent included a figure of $387,357.30 as the value of the alleged incomplete and defective works. The respondent did not specify in the agreed list of issues document whether the figure of $387,357.30 was inclusive of preliminaries 12%, the builder’s margin (10%) and GST (10%). 58 Transcript 5-2&3/24-88. -- 18 of 22 -- 19 [117] The joint expert report did not provide for preliminaries in assessing the value of damages (agreed or otherwise) but did allow for a builder’s margin of 10% (see schedule page 13 of joint expert report).59 [118] In the decision delivered on 5 July 2013, which is the decision under appeal the learned Member allowed preliminaries at the rate of 12% ($36,785.40). [119] The joint expert report (exhibit 3) included a builder’s margin (10%) and GST (10%). [120] Contrast Constructions say that on the basis that the joint expert report did not provide for preliminaries or raise any dispute about them but did provide for a builder’s margin and GST Mr Bartlett elected not to claim for preliminaries and it was not an issue that was put to the experts during trial. It submits that on the basis of the expert evidence before the learned member preliminaries were not an issue determined by the Tribunal and as such the learned member erred in allowing for preliminaries. [121] The submission made on behalf of Mr Bartlett is that reports prepared by Mitchell Brandtman Quantity Surveyors made it clear that in addition to the amounts ascertained as due and owing for each particular defective or incomplete work there must be an added allowance for overheads. They say that each of the reports of Mitchell Brandtman suggest an allowance of 12% for preliminaries on the total assessed amount of either incomplete or defective works.60 [122] It is said that Contrast Constructions did not challenge the evidence of Mitchell Brandtman in that regard. [123] In paragraph [98] the learned Member said: I will allow the claim for preliminaries at a rate of 12% on the total amount of the assessed incomplete and defective works and referred to the amended respondent’s outline filed 13 March 2013 and exhibit 2 tabs 87 and 126. [124] In my view no error of law has been demonstrated in this regard. [125] In respect of the appeal by Contrast Constructions Mr Bartlett contends that the appeal has been made out of time because it was not filed within 28 days of the decision by the Member. He also submits that each ground of appeal is from a finding of fact and that the applicant’s prospects on appeal are not good. 59 Exhibit 6. 60 Exhibit 2-87 and 126. -- 19 of 22 -- 20 [126] The relevant section for the timing or commencing of an appealing the Queensland Civil and Administrative Tribunal Act 2009 is section 143 which states as follows: 143 Appealing or applying for leave to appeal (1) This section applies to— (a) An application for the appeal tribunal's leave to appeal to the appeal tribunal against a decision of the tribunal or a decision of another entity under an enabling Act; or (b) An appeal to the appeal tribunal against— (i) A decision of the tribunal; or (ii) a decision of another entity under an enabling Act. (2) The application or appeal must— (a) be in a form substantially complying with the rules; and (b) state the reasons for the application or appeal; and (c) be accompanied by the prescribed fee (if any). (3) An application for the appeal tribunal's leave to appeal must be filed in the registry within 28 days after the relevant day. (4) An appeal must be filed in the registry within— (a) if the appeal tribunal's leave is required for the appeal— 21 days after the leave is given; or (b) otherwise—28 days after the relevant day. (5) In this section— relevant day, for an application or appeal, means— (a) if a person makes an application under part 7, division 5, 6 or 7 about the decision being appealed against within 28 days after the person is given written reasons for the decision—the day that application is finally dealt with under that division; or (b) if written reasons have not been given for the decision being appealed against and reasons have not been requested under section 122 or are not required to be given—the day the person received notice of the decision; or (c) the day the person is given written reasons for the decision being appealed against. [127] On 15 July 2013 Contrast filed an application for correction which is made under section 135 in part 7, division 6 of the Act and on 5 August 2013 the Amended Decision in response to the application for correction was delivered. -- 20 of 22 -- 21 [128] Twenty eight days from the date of the Amended Decision was 2 September 2013. The appeal was commenced by Contrast on 30 August, within the 28 day period. [129] If leave to appeal was required it would not be within time however if leave to appeal was not required the appeal would be within time. [130] In my view the grounds of appeal 1, 2, 3, and 5 were not errors of law and accordingly required leave to appeal. There being no application for leave to appeal in respect of those grounds and in any event for the reasons I have given those appeals should be dismissed. [131] Appeal ground number 4 is an error of law and for the reasons I have given should be allowed. Costs [132] Each party seeks their costs for the appeal. [133] Section 100 of the QCAT Act provides: 100 Each party usually bears own costs Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party's own costs for the proceeding. [134] Section 102 of the QCAT Act provides: 102 Costs against party in interests of justice (1) The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order. (2) However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section. (3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following— (a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g); (b) the nature and complexity of the dispute the subject of the proceeding; (c) the relative strengths of the claims made by each of the parties to the proceeding; (d) for a proceeding for the review of a reviewable decision— (i) whether the applicant was afforded natural justice by the decision-maker for the decision; and -- 21 of 22 -- 22 (ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits; (e) the financial circumstances of the parties to the proceeding; (f) anything else the tribunal considers relevant [135] In these appeals there has been some limited success by each party. In my view it is appropriate that each party bear their own costs. . -- 22 of 22 --