Delab Construction Services Pty Ltd v Olivares t/as Matador Tapas Bar [2013] QCAT 723

CITATION: Delab Construction Services Pty Ltd v Olivares t/as Matador Tapas Bar [2013] QCAT 723 PARTIES: Delab Construction Services Pty Ltd (Applicant) v Roberto Olivares t/as Matador Tapas Bar (Respondent) APPLICATION NUMBER: BDL090-13 MATTER TYPE: Building Matters HEARING DATE: 15 November 2013 HEARD AT: Southport DECISION OF: Member Favell DELIVERED ON: 5 December 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The respondent pay the applicant $5,748.30 forthwith. CATCHWORDS: Minor commercial building dispute – Claim for money for work done – Whether defects – Whether breach of contract APPEARANCES and REPRESENTATION (if any): APPLICANT: Steve Delabertauche (Director of the applicant) RESPONDENT: No appearance REASONS FOR DECISION [1] Delab Construction Services Pty Ltd in an application for a commercial building dispute applies to the Tribunal seeking an order for payment by Matador Tapas Bar of $5,748.30 together with collection costs of $1,260.92. [2] The claim arises out of work done pursuant to an agreement evidenced by the acceptance of a quotation by the respondent on 2 May 2012. [3] The quotation provided for certain work, the cost of which including GST was revised to $46,581.49. -- 1 of 10 -- 2 [4] The applicant claims that there was a variation to that amount of $3,432. That variation is evidenced by attachment E to the application. [5] Payment in the sum of $44,265.19 was made and the applicant claims for the difference not paid, namely $5,748.30. [6] The nature of the work was the fit out of the Matador Tapas Bar at the Chevron Renaissance Shopping Centre Surfers Paradise. The work was to start on 8 May 2012 and to be completed on 6 June 2013. Following that date, final invoices were issued by the applicant and a certificate of classification was issued by the certifier on 12 June 2012. The applicant says it received multiple promises for final payment but they were not paid. [7] The works carried out included electrical work which was carried out in accordance with electrical plan 148-12-06 issue F. The respondent in part refuses to pay any money claimed because a dimming control switch was not provided. The applicant says that there was no mention prior to the work being carried out that a control switch for dimming was required. It was not in the quotation nor on the building plans. [8] Another reason advanced for not paying the outstanding money was that some tiles were broken. The applicant says that the quotation accepted only allowed for laying of tiles. The applicant says that no tiles were broken during the course of construction works. [9] Another reason advanced not making the claimed payment is that a cut was made to a bench. The applicant says that the quotation made no allowance for a register counter or main bar. They say that the quote included „solid timber bench finished in two-pack colour black stain 35 inches thick ($2,218.18 exc) supplied by owner and managed by Delab Construction Services only’. [10] The respondent filed a response and counter application. The respondent seeks an order dismissing the applicant‟s application and demands the following: a) $7,000 ($500 per day) for the loss of income for two weeks delay and rent of $2,111.85 for two weeks; b) replacement of the lighting system at the cost of the applicant; c) compensation of $9,000 for the loss of business during nine months because of poor lighting; d) compensation of $5,000 for a bench top and labour costs of $1,000 for removing the bench top; e) $3,176 being the difference between the quotation cost and the actual cost; f) $326.70 for the replacement of tiles; g) replacement of a hand wash tap and reinstallation of a drain; -- 2 of 10 -- 3 h) repair of a frame; i) repair of a broken tile; j) repair of a ceiling; k) relocation of a gas switch to a better place. [11] The respondent bases its application on the Trade Practices Act 1974, the Fair Trading Act, Australian Consumer Law and the Queensland Building Services Authority Act. [12] The respondent makes various complaints summarised as below with the response set out after each complaint: a) The applicant did not provide a certificate of occupancy and a formal handover which includes a final inspection signed by all parties; The applicant gave evidence that it did a walk through and identified defects and then gave certification by email. b) No certificate of inspection, including a list of defects document, was provided; The applicant says that a list of defects was identified on inspection. c) The applicant did not hand over the key to the shop personally; The applicant says Roberto Olivares had the key. d) The applicant did not adequately supervise the building work; The applicant said the work was properly supervised. e) Defects were not fixed; The applicant said the identified defects were fixed. f) The building work was not completed; The applicant said that all the building work it was to do was completed. g) The contract did not contain the scope of work; The applicant says the accepted quote identifies the scope of the work. h) The contract did not state when the building work was to be completed; The applicant says the contract had to be read with the email of 2 May which stated when the work was to be completed. i) Florescent lights were installed when a dimmer with down-lights was required; The applicant says that no dimmer was required and it was not specified on the electrical plan. j) The installation of a bench top (0.96metres x 5.2metres) was such that the bench top was required to be replaced; -- 3 of 10 -- 4 The applicant says that work was done by others. k) The applicant did not install and supply a stainless steel sink and bench; The applicant says that it supplied a stainless steel bench and sink as required. l) A number of tiles to the value of $326.70 required replacement; The applicant says that some tiles were broken but that was “normal”. m) A hand-wash tub was not installed properly and is leaking; The applicant says it was not aware of any leaking. n) A frame cover for a column was not sealed properly and caused accidents; The applicant has no knowledge of accidents but sealing can be replaced. o) A tile was broken when the hand-washing basin was installed; The applicant says that it is to be expected that there could be some broken tiles during construction. p) The ceiling of the shop has a big gap; The applicant says such a gap can be easily fixed. q) The gas switch is too high at 1.8 metres and is difficult to reach. The applicants says the location of the switch complies with Australian Standards. [13] The respondent in part relies on clause 12.1 of the contract which provides as follows: Subject to the conditions of warranty set out in Clause 12.2, the Contractor warrants that if any defect in any workmanship of the Contractor becomes apparent and is reported to the contractor within twelve months (12) of the date of delivery (time being of the essence) then the Contractor will either (at the contractor‟s sole discretion) replace or remedy the workmanship. [14] Clause 12.2 provides: The conditions applicable to the warranty given by clause 12.1 are: (a) The warranty shall not cover any defect or damage which may be caused or partly caused or arise through: (i) Failure on the part of the Client to properly maintain any Goods; or (ii) Failure on the part of the client to follow any instructions or guidelines provided by the Contractor; or (iii) Any use of any Goods other than for any application specified on a quote or order form; or (iv) The continued use of any Goods after any defect becomes apparent or would have become apparent to a reasonably prudent operator or user; or (v) Fair wear and tear, any accident or act of God. -- 4 of 10 -- 5 (b) The warranty shall cease and the /Contractor shall thereafter in no circumstances be liable under the terms of the warranty if the workmanship is repaired, altered or overhauled without the Contractor‟s consent. (c) In respect of all claims the Contractor shall not be liable to compensate the Client for any delay in either replacing or remedying the workmanship or in properly assessing the Client‟s claim. [15] The respondent relies on section 43A of the Queensland Building Services Authority Act 1991 (QBSA Act). It provides: Licensed contractor must ensure building work is adequately supervised (1) For a licensed contractor that is a company, the company and the company‟s nominee must each ensure that building work carried out by the contractor is adequately supervised. … (3) In deciding whether building work is adequately supervised, regard must have been had to the following – (a) Whether the licensed contractor has assisted with the supervision of the work and, if so, how the system has been implemented; (b) Whether the building work is in accordance with the plans and specifications set out in the contract for the work; … (e) Whether the building work is checked on its completion and before final payment by a person authorised to supervise the work. [16] The respondent also relies on section 267 of the Australian Consumer Law which provides as follows: Action against suppliers of services … (3) If the failure to comply with the guarantee cannot be remedied or is a major failure the consumer may – (a) Terminate the contract for the supply of services … … (4) The consumer may by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. [17] The respondent also relies on section 67G of the QBSA Act which provides as follows: Building contracts to be in writing … (4) A building contract in writing complies with the formal requirements for a building contract if the contract states the following – (a) The scope of the building work subject to the contract; (b) When the building work is to be completed… -- 5 of 10 -- 6 [18] Section 60 of the Australian Consumer Law provides as follows: Guarantee as to due care and skill If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill. [19] Section 61 of the Australian Consumer Law provides as follows: Guarantees as to fitness for a particular purpose etc. (1) If: (a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and (b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer; there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose. (2) If: (a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and (b) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made; the result that the consumer wishes the services to achieve; there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result. (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. (4) This section does not apply to a supply of services of a professional nature by a qualified architect or engineer. [20] Section 267 of the Australian Consumer Law provides as follows: Action against suppliers of services (1) A consumer may take action under this section if: (a) a person (the supplier) supplies, in trade or commerce, services to the consumer; and (b) a guarantee that applies to the supply under Subdivision B of Division 1 of Part 3-2 is not complied with; and (c) unless the guarantee is the guarantee under section 60--the failure to comply with the guarantee did not occur only because of: (i) an act, default or omission of, or a representation made by, any person other than the supplier, or an agent or employee of the supplier; or (ii) a cause independent of human control that occurred after the services were supplied. -- 6 of 10 -- 7 (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time--the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) terminate the contract for the supply of the services. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) terminate the contract for the supply of the services; or (b) by action against the supplier, recover compensation for any reduction in the value of the services below the price paid or payable by the consumer for the services. (4) The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. (5) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3). [21] Section 268 of the Australian Consumer Law provides as follows: When a failure to comply with a guarantee is a major failure A failure to comply with a guarantee referred to in section 267(1)(b) that applies to a supply of services is a major failure if: (a) the services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or (b) the services are substantially unfit for a purpose for which services of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (c) both of the following apply: (i) the services, and any product resulting from the services, are unfit for a particular purpose for which the services were acquired by the consumer that was made known to the supplier of the services; (ii) the services, and any of those products, cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (d) both of the following apply: (i) the services, and any product resulting from the services, are not of such a nature, or quality, state or condition, that they might reasonably be expected to achieve a result desired by the consumer that was made known to the supplier; (ii) the services, and any of those products, cannot, easily and within a reasonable time, be remedied to achieve such a result; or (e) the supply of the services creates an unsafe situation. -- 7 of 10 -- 8 [22] Section 74 of the Trade Practices Act provided as follows: (1) In every contract for the supply (otherwise than by way of competitive tender) by a corporation in the course of a business of services to a consumer there is an implied warranty that the services will be rendered with due care and skill and that any materials supplied in connexion with those services will be reasonably fit for the purpose for which they are supplied. (2) Where a corporation supplies (otherwise than by way of competitive tender) services to a consumer in the course of a business and the consumer, expressly or by implication, makes known to the corporation any particular purpose for which the services are required or the result that he desires the services to achieve, there is an implied warranty that the services supplied under the contract for the supply of the services and any materials supplied in connexion with those services will be reasonably fit for that purpose or are of such a nature and quality that they might reasonably be expected to achieve that result, except where the circumstances show that the consumer does not rely, or that it is unreasonable for him to rely, on the corporation's skill or judgment. (3) In this section, “services” means services by way of- (a) the construction, maintenance, repair, treatment, processing, cleaning or alteration of goods or of fixtures on land; (b) the alteration of the physical state of land; (c) the distribution of goods; or (d) the transportation of goods. [23] Section 77 of the QBSA Act allows a person involved in a building dispute to apply as provided under the QCAT Act to the Tribunal to have the Tribunal decide the dispute. [24] The Tribunal may exercise one or more of the following powers – a) Order the payment of an amount found to be owing by one party to another; b) Order relief from payment of an amount claimed by one party from another; c) Award damages and interest on the damages at the rate and calculate in the way prescribed under a regulation; d) Order restitution; e) Declare any misleading, deceptive or otherwise unjust contractual term to be of no effect or otherwise vary a contract to void injustice; f) Void a policy of insurance under a statutory insurance scheme; g) Order rectification or completion of defective or incomplete Tribunal work; h) Order costs. [25] “Building dispute” is defined is schedule 2 of the QBSA Act to include „a minor commercial building dispute‟. -- 8 of 10 -- 9 [26] Schedule 2 defines “minor commercial building” dispute as „a commercial building dispute where neither the claim nor the counterclaim exceeds $50 000‟. [27] “Commercial building dispute” means – a) A claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work; or b) A claim or dispute arising between two or more building contractors relating to reviewable commercial work or a contract for the performance of reviewable commercial work; or c) A claim or dispute in negligence, nuisance or trespass related to the performance of reviewable commercial work other than a claim for personal injuries; d) A claim or dispute arising from a building owner or building contractor and any one or more of the following relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work – (i) An architect; (ii) An engineer; (iii) A surveyor; (iv) A quantity surveyor; (v) An electrician or electrical contractor; (vi) A supplier or manufacturer of materials used in Tribunal work. [28] “Reviewable commercial work” means „Tribunal work other than reviewable domestic work‟. [29] I am satisfied that this dispute arises from a contract for the performance of reviewable commercial work and is a minor commercial dispute. [30] To prove its claim the applicant must prove that it carried out the terms of the contract and has not been paid as was agreed in the contract. [31] If there are defects and they are proved to be defects, the applicant should fix those defects. The identification of defects alone does not entitle the respondent to deny payment. [32] The warranty provided for in the contract would have to be adhered to and the defects fixed. The terms of the warranty specify the obligations and the conditions of the warranty. [33] The contract sets out the scope of works. The applicant was obliged to carry out the works so set out. -- 9 of 10 -- 10 [34] Insofar as the response and counter claim seeks or relies on a breach of the QBSA Act with respect to a failure of the building contract to contain a statement as to when the building work was to be completed, it is in my opinion, in that regard not relevant to the dispute. That is, if proved, a failure to comply with the QBSA Act is not within the Tribunal‟s jurisdiction in this dispute. However, in any event, it has not been established that there has been a breach of warranty or that due care and skill has not been exercised. [35] Insofar as the respondent seeks to rely upon alleged breaches of the Trade Practices Act or the Australian Consumer Law, in my view those alleged breaches are not part of a commercial building dispute. Specifically they are not a claim relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work or a dispute in negligence related to the performance of reviewable commercial work. [36] In order to obtain any order for the loss of income, loss of rent or compensation for the loss of business, the respondent would need to prove a nexus between a sustainable claim of wrongdoing and any claimed loss as well as the loss. This has not been done. [37] In order to obtain any order for the replacements of the lighting system, or cost of replacement tiles, hand wash top and re-installation of the drain, or repair of a frame, broken tile or ceiling the respondent would need to prove that the actions of the applicant caused the need to replace or repair the items and/or was contractually obliged to provide the items and either did not so supply or did so negligently or in breach of the contract. In my view this has not been done. [38] The respondent did not appear at the hearing of this matter. Upon being satisfied that he had notice of the hearing I determined to proceed in his absence. I nevertheless had regard to matters raised previously on his behalf. [39] I am reasonably satisfied that the work contracted to be done was done and the amount claimed has not been paid. I am not satisfied that there is a proper basis for the refusal to pay the balance of $5,648.30. In that regard I note the email of 14 June at 8:51pm from the respondent stating his acceptance of the work done. [40] As to the claim for “collection costs”, although clause 14 of the contract applies, I am not satisfied that such costs have been incurred. On the material filed it appears that the collection agency operated on a “no collection, no commission” basis. Given the agency was not successful, no commission should have been payable. Nothing else other than the $5,748.30 is claimed. In my view the respondent has not made out its counterclaim or defence. -- 10 of 10 --