Baque v River Gum Homes Pty Ltd [2013] QCATA 24

CITATION: Baque v River Gum Homes Pty Ltd [2013] QCATA 24 PARTIES: Kenneth Charles Baque (Appellant) v River Gum Homes Pty Ltd (Respondent) APPLICATION NUMBER: APL484-11 MATTER TYPE: Appeals HEARING DATE: 20 August 2012 HEARD AT: Brisbane DECISION OF: Richard Oliver, Senior Member Kate Buxton, Member DELIVERED ON: 6 February 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. Leave to appeal is granted. 2. The appeal is allowed in part. 3. Order 2 of the orders made on 29 November 2011 in BD191-09 is set aside. 4. The parties may file in the appeal and serve on the other party any submissions on costs and interest in BD191-09 and the appeal by 28 February 2013. 5. The application for costs and interest will be determined on the papers without the need for an oral hearing after 28 February 2013. CATCHWORDS: DOMESTIC BUILDING CONTRACT – land transferred to spouse – whether new contract enforceable because not signed by respondent until enforcement – Quantum Meruit claim and Tribunal‟s jurisdiction to order – vesting of liability Domestic Building Contracts Act 2000, ss 7, 26, 30, 92 Land Title Act 1994, s 62 -- 1 of 9 -- 2 Queensland Building Services Authority Act 1991, s 77 Ballina Building Services Pty Ltd v Doyle [2010] QCAT 643 Mirvac Qld v Beioly [2010] QSC 113 Marchesi v Vividian Noosa Pty Ltd [2010] QSC 324 Queensland Premier Mines Pty Ltd v French (2010) 235 CLR 81 APPEARANCES and REPRESENTATION (if any): APPELLANT: Mr Wagner of Counsel appeared for the Appellant RESPONDENT: Ms Farhadi-Fard, Solicitor, appeared for the Respondent REASONS FOR DECISION [1] On 17 October 2008 River Gum Homes entered into a written contract with Mr Baque‟s then spouse, Avril Baque to deliver and install a Midas Urban transportable home on land which was then owned by Mrs Baque at 38 Heise Road, Hattonvale. Upon that land there is a new transportable home which was supplied and installed by the respondent, River Gum Homes. The home was never paid for and after the hearing Mr Baque was ordered by this Tribunal to pay River Gum Homes for the home. He has appealed that decision. The contract originally was signed by River Gum and Mrs Baque for the sum of $162,000.00. [2] After the contract was signed, River Gum Homes was informed by Mr Baque that ownership of the land at Heise Road had been transferred to him and therefore the contract should be changed to name him as the „owner‟. Instead of changing the existing contract, River Gum Homes prepared a new contract with the same details but naming Mr Baque as the owner and the contracting party. Mr Baque signed the new contract on 20 November 2008. River Gum Homes did not sign the contract until 16 February 2011. Mrs Baque became bankrupt on or about 19 June 2009 and has not participated in these proceedings as a result. [3] The contract works for the supply and installation of the home commenced on 19 November 2008 and was at the practical completion stage by 20 December 2008. A certificate of practical completion was given to Mr Baque together with a final claim for payment of $159,000.00. A deposit of $3,000.00 had previously been paid. As Mr Baque did not pay the final claim River Gum Homes commenced a proceeding in the former Commercial and Consumer Tribunal claiming the final payment. [4] The application went to hearing on 23 August 2011 and a decision was made on 29 November 2011 that Mr Baque was to pay to River Gum -- 2 of 9 -- 3 Homes $152,170.00 (allowing for costs of defects in the sum of $6,830.00) together with costs fixed at $64,000.00. The learned Member found that by virtue of s 62(1) of the Land Title Act 1994 Mrs Baque‟s liability under the contract she signed, vested in Mr Baque upon the transfer of the land to him. He found that as River Gum Homes signed the contract, albeit well after the work was complete, s 30 of the Domestic Building Contracts Act 2000 which says that a contract has effect only if signed by the building contractor and the owner, did not defeat the builder‟s claim. He also found that in the alternative River Gum Homes was entitled to payment by way of a quantum meruit. [5] On 23 December 2011 Mr Baque filed an application for leave to appeal or appeal. Mr Baque raised a number of contentions: firstly, the learned Member erred in his application of s 62(1) of the Land Title Act 1994; secondly, that s 30 of the Domestic Building Contracts Act 2000 did apply because the contract was not signed by the builder prior to or during the works; thirdly, that the Tribunal does not have jurisdiction to determine a quantum meruit claim. [6] Mr Baque contended that he was denied procedural fairness on the question of costs and that the learned Member‟s reasons are generally deficient, and in particular, deficient as to the basis of the costs order. [7] During the course of the hearing the parties were asked to consider whether Mr Baque was, in the circumstances, estopped from relying on s 30 of the Domestic Building Contracts Act 2000 if it is found that the section applied, because he allowed River Gum Homes to supply and install the transportable home, for which he has the benefit as an improvement on the land now owned by him. [8] The parties filed written submissions and the appeal was heard on 20 August 2012. Further written submission were received by the Tribunal on 3 September and 14 September 2012 in accordance with the Tribunal‟s directions. Domestic Building Contracts Act 2000, section 30 [9] Section 30 of the Domestic Building Contracts Act 2000 says that contracts for building work must be signed because a regulated contract has effect only if it signed by both the building contractor and the owner. Because River Gum Homes did not sign the contract until well after the work was done, Mr Baque says the contract has not effect and therefore River Gum Homes cannot recover the cost of supplying and installing the transportable home at Hattonvale. [10] It appears that the learned Member adopted a practical interpretation of s 30 and accepted the submission of River Gum Homes that the late signing by River Gum Homes of the contract of Mr Baque was adequate to discharge its responsibility under s 30. Although the learned Member‟s reasons for this conclusion are brief and more explanation would have -- 3 of 9 -- 4 been preferable, the arguments had been traversed generally within the reasons. [11] Section 30 of the Domestic Building Contracts Act 2000 is contained in Part 3 of the Act which deals with contracts and related documents. Section 26 of that Part requires a building contractor who enters into a regulated contract to ensure that the contract is in written form. Division 1 of Part 3 provides other details as to what is required to be included in that written document. Section 30 then provides as follows: A regulated contract has affect only if it is signed by the building contractor and building owner (or their authorised agents). [12] Section 92 of the same Act then provides: Unless the contrary intention appears in this Act, a failing by a building contractor to comply with a requirement under this Act in relation to a domestic building contract does not make the contract illegal, void or unenforceable. [13] Section 92 therefore indicates that a specific intent would need to be expressed within the plain words of the Domestic Building Contracts Act 2000 in order to make a contract unenforceable. It is submitted on behalf of Mr Baque that that is precisely what s 30 does and that it makes a contract of „no effect‟. [14] The obvious difficulty with this argument is that there is no temporal limitation set out in s 30. That is, there is no requirement as to when the regulated contract must be signed. Plainly, every day circumstances would require the contract to be signed at different times by the various parties unless they were in the same place at the same time whilst applying their signatures to the document. The contract relied upon by River Gum Homes in this instance has not been called into question by Mr Baque in terms of any other obligations set out in Part 3 Division 1 of the Domestic Building Contracts Act 2000 and s 92 requires a plain intention in order to deprive River Gum Homes of the ability to enforce that contract to recover payment for performing its obligations once it has been signed. [15] What then do the words „has effect only if it is signed‟ really mean? A common sense answer, and one that is consistent with s 92, and the balance of the provisions of the Domestic Building Contracts Act 2000 together with the aim of that Act which is to help the consumers avoid pitfalls in procuring building services,1 is that the signature is needed only when one party wishes the contract to have „effect‟. Put another way, it was only when Mr Baque failed to comply with his obligations under the contract (vis: to pay money) that River Gum Homes needed the contract to have „effect‟. At that point it applied a signature to the building contract and from then the regulated contract had effect consistent with s 30 of the Domestic Building Contracts Act 2000. Tested another way, if Mr Baque 1 Domestic Building Contracts Bill, explanatory notes 1999. -- 4 of 9 -- 5 sought to rely on the contract because River Gum Homes performed defective or incomplete building work, it would be surprising if Mr Baque was denied any relief because River Gum Homes had not signed the contract. Similarly, if River Gum Homes signed the contract half way through the works, and then completed the works, it is unlikely that would mean that it was only entitled to half of the contract amount. [16] Section 7(1)(a) defines a domestic building contract as a contract to carry out domestic building work. Because it is phrased in the present tense, Mr Baque says that for a regulated contract to have effect it must therefore be signed before any work is undertaken. However, we do not read that into s 7 or s 30. Section 7 is merely a statutory definition of domestic building contract and what it is intended to include, and s 30 contains no temporal requirement, when it would have been a simple matter of legislative drafting to do so. [17] That interpretation, whilst not set out in detail in the learned Member‟s reasons, is the only interpretation consistent with the findings he has made. As these findings are mixed questions of law and fact, leave to appeal would be necessary to disturb those findings notwithstanding the frugality of the words used to express his reasons. There has been no injustice caused to the appellant nor is any error on the part of the primary decision maker apparent. [18] Further, there is no demonstrable error in his calculation of the claim in the sum of $152,170.00 being the contract sum less some minor defects. We would therefore refuse leave on this ground. Quantum meruit jurisdiction [19] It was argued before the learned Member that if s 30 prevented recovery for the undisputed balance owing under the contract, then as an alternative claim, River Gum Homes relied on the doctrine of quantum meruit to recover the amount claimed. Mr Baque specifically says that the Tribunal does not have jurisdiction and actually submits that previous decisions in the QCAT and the previous Tribunal have proceeded on the basis that there is a „belief‟ the Tribunal has quantum meruit jurisdiction without reference to any actual and enabling statutory source.2 [20] However, the learned Member specifically addressed the source of power to award damages by way of quantum meruit. He quite rightly referred to the Tribunal‟s jurisdiction to hear and decide a building dispute contained in the enabling Act, Queensland Building Services Authority Act 1991. Section 77 provides that a person involved in a building dispute can apply to the Tribunal to have it decide the dispute. In doing so the Tribunal can exercise certain powers to decide a building disputes which includes ordering restitution under s 77(2)(d). Reference was made to Pavey v Matthews Pty Ltd v Paul3 where the claim was for restitution in the form of 2 Respondent‟s submission in the original hearing dated 16.09.2011 at [5.4]. 3 (1987) 162 CLR 221. -- 5 of 9 -- 6 reasonable remuneration for the work done under a contract rendered unenforceable by statutue.4 The claim in Pavey was in the nature of a quantum meruit which is a form of restitution and has been recognised as such.5 [21] We see nothing wrong with the approach taken by the learned Member in coming to the conclusion that the quantum meruit claim was available and that the Tribunal had jurisdiction to make such an order. [22] Therefore, as an alternative, if it was found that s 30 was a bar to recovery we see no reason why River Gum Homes could not recover the amount of the claim by way of a quantum meruit because clearly by not being able to do so Mr Baque would be unjustly enriched. The learned member made a proper assessment of the value of that benefit. This ground of appeal is therefore rejected. Estoppel against s 30 [23] In the circumstances of our findings on s 30 and quantum meruit, it is unnecessary to decide whether Mr Baque is now estopped from relying on s 30 in the circumstances of this case. However, we make the following observations. [24] Whether a party may be estopped from enforcing a right or entitlement in a statute will depend upon whether the provision generates a private right or a right for the public benefit. Only private rights can be the subject of an estoppel.6 [25] Section 30 does not apply any penalty for non-performance, an indication that s 30 bestows a private, rather than a public right.7 [26] The following facts are relevant: (a) Mr Baque himself signed the contract and gave it to River Gum Homes on 20 November 2008. (b) Mr Baque allowed the home to be constructed on the land. He executed a land title transfer on 18 December 2008. (c) Practical completion was reached on 20 December 2008. (d) The land transfer was registered on 9 February 2009. (e) River Gum Homes signed the contract on 16 February 2011. [27] In those circumstances it would be unfair, and inequitable, to permit Mr Baque to rely upon s 30 to avoid his obligation to pay for the services 4 Restitution Law in Australia; 2nd Ed; Mason and Carter page [914] and [1425]. 5 As an example see Freitag v Brunderle [2011] QCA 313 at paragraph 13; and Eagle Sea Pty Ltd v Radford [2012] TASSC 41 6 Mirvac Qld v Beioly [2010] QSC 113 at [32]-[33]. 7 Marchesi v Viridian Noosa Pty Ltd [2010] QSC 324 at [17]. -- 6 of 9 -- 7 received by River Gum Homes. The equitable jurisdiction of this Tribunal in determining a building dispute is long established, as mentioned above.8 [28] The proper result is that River Gum Homes should receive from Mr Baque a sum equal to the benefit of the home constructed on Mr Baque‟s land. Any other result would unjustly enrich Mr Baque at the expense of River Gum Homes. This is consistent with our findings above. Vesting of liability under the contract [29] It was common ground between the parties that, immediately prior to Mr Baque becoming the owner of 38 Heise Road, Hattonvale a new contract was presented by River Gum Homes to Mr Baque for signature. Mr Baque signed the document on 20 November 2008 and then executed the land transfer on about 18 December 2008. This transfer was registered on 9 February 2009. [30] In his reasons for decision the learned Member indicated that the agreement in writing entered into between Mr Baque and River Gum Homes on 20 November 2008 was so entered on the basis that Mrs Baque was transferring the site to Mr Baque and that Mr Baque was to become the owner of the site.9 A Mr Haddon, who was the building operations manager of River Gum Homes at the relevant time, provided written statements and gave oral evidence at the hearing. Two copies of the contract documents were issued in the name of Kenneth Charles Baque in identical terms and were posted to him for execution and return to River Gum Homes. On 25 November 2008 River Gum Homes received the contract documents executed by Mr Baque and dated 20 November 2008. Those documents were not executed by River Gum Homes as Mr Haddon said he was awaiting advice of the transfer of the site to Mr Baque which, despite demand, Mr Baque failed to provide.10 It was not until Mr Baque‟s much later refusal to pay the contract price for the home delivered by River Gum Homes that River Gum Homes itself signed the contract document. [31] The arguments advanced by each of the parties in relation to whether or not Mrs Baque‟s obligations under the contract which she had originally signed had vested in or been transferred to Mr Baque were traversed in some detail in the learned Member‟s reasons for decision. Particular attention was paid by the learned Member to River Gum Homes‟ arguments and submissions in relation to the operation of s 62(1) of the Land Title Act 1994. River Gum Homes‟ argument11 was that the rights and liabilities under the contract which had been signed by Mr Baque vested in Mr Baque upon the transfer, he noted in the decision that s 62(4) of the Land Title Act 1994 did not have the effect of confining the 8 [25]-[26] of these reasons. 9 Reasons for decision at [13]. 10 Reasons for decision at [20] and [21]. 11 Reasons for decision at [52], [53] and [54]. -- 7 of 9 -- 8 definition of „rights‟ to those which existed under the mortgage or lease but define rights in relation to particular instruments. Having set out that argument the learned Member went on to find: [t]hat as and from that date, 9 February 2009 (the date of transfer) the second respondent became the owner of the site and the liability of the first respondent under the contract vested in the second respondent. The Tribunal finds that the second respondent was well aware of his rights and obligations under the second contract even to the extent that he informed the applicants workmen on site that he didn‟t want the premises and he was not going to pay for it well knowing that he did not have the appropriate funds to pay out both his wife in her property settlement and the applicant for the premises erected on his now land. (My addition in brackets) [32] With respect to the learned Member, we do not agree with his broad interpretation of s 62(1) of the Land Title Act 1994. The rights and liabilities transferred under that provision must be rights and liabilities „in relation to the lot‟. The rights and liabilities in relation to the building contract between Mrs Baque and River Gum Homes were personal. They were not registered and did not touch and concern the land. As Kiefel J stated in Queensland Premier Mines Pty Ltd v French12: The primary concern of the Act, as reflected in s 62(1), is to convey the rights of the transferor in relation to their interest in "the lot", which is defined to mean land. [33] In that case only the registered mortgage, but not a related loan agreement, was transferred by operation of s 62(1). To suggest that a building contract between individuals ought to be caught by s 62(1) is to draw an even longer bow. We do not accept that as a proper interpretation of s 62(1). [34] It is therefore necessary to grant leave to appeal to correct this error. [35] However, for the reasons set out above, we affirm the learned Members decision on the basis we have outlined. Costs and Interest [36] Mr Baque submitted that he was denied natural justice or procedural fairness in the making of an order for costs under the terms of the contract. Mr Baque submits he had no opportunity to make submissions on costs. [37] Under s 100 of the QCAT Act costs do not follow the event. Costs can be awarded but it is necessary to address the matters set out in s 102 of the Act. The learned Member recorded submissions from the River Gum Homes about Mr Baque‟s conduct of the proceeding alleging that his conduct unnecessarily disadvantaged River Gum Homes and also he failed to comply with directions in a timely fashion and vexatiously 12 (2007) 235 CLR 81 at [55]. -- 8 of 9 -- 9 conducted the proceedings. However, there is no finding about these contentions. Impliedly the submissions were accepted by reference to the comment by the learned Member about the “attitude of the second respondent” but this does not go far enough in satisfying the matters in s 102. [38] We have had regard to the submissions of the parties at first instance. The written submissions of River Gum at first instance13 are silent on the issue of costs and Mr Baque‟s written submissions14 contain the bare assertions that because the contract is unenforceable the claim should be dismissed with costs. [39] We accept the submission made by counsel for Mr Baque15 that he should have been afforded an opportunity to make further submissions as to liability for costs and to understand the nature of the Tribunal‟s concerns in relation to his conduct in defending the application. We would grant leave to appeal this aspect of the decision and vacate the costs order. We invite written submissions from the parties on the issue of costs, both of the appeal and of the primary application, and interest. Orders [1] Leave to appeal is granted. [2] The appeal is allowed in part. [3] Order 2 of the orders made on 29 November 2011 in BD191-09 is set aside. [4] The parties may file in the appeal and serve on the other party any submissions on costs and interest in BD191-09 and the appeal by 28 February 2013. [5] The application for costs and interest will be determined on the papers without the need for an oral hearing after 28 February 2013. 13 Written Submissions of River Gum filed 23 August 2011. 14 Written Submission of Mr Baque filed 16 September 2011. 15 Written Submissions filed 21 February 2012, especially paragraph 5.34(i) to (iii). -- 9 of 9 --