Benn v Myles & Anor [2011] QCAT 567

CITATION: Benn v Myles & Anor [2011] QCAT 567 PARTIES: Mr Jason Benn (Applicant) v Mr Anthony James Myles AJ Myles & Co Pty Ltd ACN 111 244 823 (Respondents) APPLICATION NUMBER: BD492-09 MATTER TYPE: Building matters HEARING DATE: 19 and 20 July 2011 HEARD AT: Cairns DECISION OF: Ms Joanne Browne, Member DELIVERED ON: 18 November 2011 DELIVERED AT: Brisbane ORDERS MADE: 1. The Respondent, Mr Anthony James Myles pay the amount of $140,340.72 to the Applicant, Mr Jason Benn by 4.00pm on 16 December 2011. CATCHWORDS: Breach of contract – exclusion of liability – defective and incomplete work Section 77 Queensland Building Services Authority Act 1991 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr C J Ryall instructed by Robin Smith Solicitor RESPONDENT: Mr J J Sheridan instructed by Williams Graham Carmen Solicitors REASONS FOR DECISION Introduction [1] Mr Benn had plans to relocate his family from city life to live on a family farm (in El Arish). -- 1 of 28 -- 2 [2] Mr Benn and his wife (Suari Mason) were attracted to colonial style homes. In particular Mr Benn liked the “tongue in groove style” and wooden floors, typical features of colonial (Queenslander) style homes. [3] Mr Benn and his wife inspected a colonial style Queenslander house (circa 1921) with a local builder (Mr Gary Kuhn) in early September 2008 at 2 Mill Reserve, Mourilyan, prior to Mr Benn purchasing the house for $11,500.00.1 [4] It was Mr Benn‟s intention to relocate the house to the farm in El Arish. Mr Benn planned to undertake some renovations to the house prior to living in it with his family. [5] Mr Myles is in the business of house relocation. Mr Benn saw Mr Myles‟ advertisement on the yellow pages website (on the internet) for “Complete House Relocation Services” and contacted Mr Myles in early November 2008. [6] Mr Benn and Mr Myles signed a contract on 6 January 2009 to relocate the house from Mill Reserve, Mourilyan to 379 Granadilla Road, El Arish (approximately 30 kilometres distance). [7] The amount to be paid by Mr Benn to Mr Myles in consideration for the relocation of the house was $48,000.00. [8] The house was to be cut into two sections (halves) and transported in 2 stages – one half of the house and then the other. There was some delay in transporting the house due to heavy rainfall and a breakdown in the machinery used for relocation. [9] During completion of the works (relocation), a dispute arose between the parties. Mr Benn claims that there was damage to the house as a result of the rainfall prior to the contract being completed, and (amongst others) that Mr Myles failed to undertake the contracted work and complete certain repairs and replacements as agreed (and in accordance with the contract plans and the implied statutory warranty). [10] Mr Benn filed an application (and a further amended application) in the former Commercial and Consumer Tribunal on 26 November 2009 seeking an order for relief from payment in the amount of $4,800.00 plus an award for damages in the amount of $60,000.00. [11] Mr Myles filed a response and counter-application in the Queensland Civil and Administrative Tribunal (QCAT) on 22 December 2009. [12] Mr Benn claims (amongst others) the costs of repair, costs to complete works and damages (including GST) as follows:2 1 Letter from Bundaberg Sugar to Mr Jason Benn dated 16 September 2008, “5”, Exhibit 15, document 5. The house was also inspected by a builder (Mr Rob Wolf) in late September 2008. 2 Schedule of Amounts Claimed dated 11 March 2011, filed 15 March 2011, items numbered 1(a) and 1 to 26, including an amount for preliminaries. In accordance with a direction made at -- 2 of 28 -- 3 1) Costs to repair water damage $120,629.00 (b) Plus costs to remove damaged floors $ 96,860.00 2) Costs to complete works (“a to c”) $ 12,857.00 3) Extra rental expenses $ 6,460.00 4) Distress and inconvenience $ 10,000.00 The hearing [13] Witnesses gave sworn evidence and were cross-examined at the hearing. Documents were tendered including photographs of the house taken prior to and after relocation. [14] Prior to the hearing, a meeting of experts took place (experts conclave) between Mr Gary Thompson (Quantity Surveyor and Builder), Mr Gavin Stewart (Quantity Surveyor and Builder) and Mr Charles Michael Gianarakis (Civil Engineer) on 6 September 2010 and a joint experts report (with agreed costing) was prepared and filed in the Tribunal (dated 21 September 2010). [15] Mr Benn relies on his own statement and the statement of his wife (Ms Suari Mason). Mr Benn also relies on the evidence (statements) of Mr Gary Kuhn (Builder), Mr Graeme Arthur Coates (Electrical Contractor), Mr Charles Gianarakis, Mr Gary Thompson and the joint expert report. [16] Mr Myles relies on his own statements and the statements of Mr Robert Myles (his nephew), Mr Callan Myles (his son), Mr Gavin Stewart, Mr Charles Gianarakis and Mr David Fair (Drake Removal Homes). Jurisdiction under the Queensland Civil and Administrative Tribunal Act 2009 [17] The proceedings were commenced in the former Commercial and Consumer Tribunal (“the CCT”) which now falls under the jurisdiction of the Queensland Civil and Administrative Tribunal (“QCAT”). QCAT has jurisdiction to determine the application under section 256 of the Queensland Building Services Authority Act 1991 (“the QBSAA”) which includes a dispute under the Act. [18] For the purposes of section 77 of the QBSAA the tribunal is satisfied that this is a “building dispute” which may be determined under the Queensland Civil and Administrative Tribunal Act 2009 (“the QCAT Act”). The issues to be determined [19] The issues to be determined by the Tribunal are: 1) Who are the contracting parties; 2) What was the condition of the house prior to relocation; the hearing, a revised assessment of damages was filed (applicant‟s supplementary submissions dated 21 July 2011). -- 3 of 28 -- 4 3) Whether there is an exclusion of liability (under the contract) for water damage; 4) Was Mr Myles in breach of the contract in failing to complete the works in accordance with the warranty provisions under the Domestic Building Contracts Act 2000 (the water damage to the house); 5) Was Mr Myles in breach of the contract in failing to install cyclone rods in accordance with the contract (the plans); 6) The costs to complete the contracted works (as alleged); 7) The rectification costs for water damage to the house (as alleged); 8) Whether Mr Benn is entitled to rental expenses (as alleged); 9) Whether Mr Benn is entitled to a claim for distress and inconvenience; 10) Whether Mr Myles is entitled to payment of monies owing under the contract (final progress claim). The Contracting parties [20] It is not disputed by the parties that discussions took place between Mr Benn and Mr Myles personally in November 2008 prior to signing a contract on 6 January 2009. Mr Benn refers to discussions in November 2008 and January 2009. [21] Mr Myles is a director of AJ Myles & Co Pty Ltd and contends that he was acting as an agent of the corporate entity and the proper respondent liable for any damages (which is denied by the respondents) is AJ Myles & Co Pty Ltd. [22] On 6 January 2009, Mr Benn and Mr Myles signed a Minor Works Contract together with General Conditions (the date for practical completion was 135 days). Mr Myles contends that he signed the contract on behalf of AJ Myles & Co Pty Ltd. The terms of the Contract were partly oral and partly written. [23] The BSA Minor Works Contract (dated 6 January 2009) provides “contractor” details as “Anthony James Myles” together with Mr Myles‟ licence number and address. The details for “ACN” have been completed under “contractor” details. There is no reference in the contract to AJ Myles & Co. There is, however, reference to AJ Myles & Co House Relocators in the General Conditions attached to the contract. [24] Prior to Mr Benn and Mr Myles signing the contract, an earlier contract had been prepared by Mr Myles and was signed (only by Mr Myles) and dated 21 November 2008. The contract is in the same terms as the contract signed on 6 January 2009. [25] The QBSA issued notification of insurance to Mr Benn (by letter dated 21 November 2008) in the name of Anthony James Myles (as contractor) for “restumping &/or associated work as per contract” with a stipulated contract value of $20,000.00 effective from 21 November 2008. [26] During cross-examination Mr Myles confirmed that he did hold a trade licence as a carpenter and that relocation of a house was building work which he was able to perform under his respective licence. -- 4 of 28 -- 5 [27] Mr Myles agreed, during cross-examination, that when lodging the documents with the QBSA (for insurance) he told the QBSA that he would be the contractor, however, he maintained that he had signed the contract for and on behalf of the corporate entity (AJ Myles & Co). [28] Ms Suari Mason (Mr Benn‟s wife), in her written statement dated 2 July 2010 (tendered at the hearing), states that Mr Benn did not sign the first contract (dated 21 November 2008) as “it was taking time to get the plans through council”.3 Ms Suari states that Mr Benn had “contacted Myles about relocating the house” on the basis of “good advice” previously given to Mr Benn about moving a house “around July 2008”.4 [29] The Tribunal accepts the non-contested evidence of Mr Benn that all discussions in relation to the contract (prior to signing) were between himself and Mr Myles. [30] The certificate of insurance issued by the QBSA and the contract dated 6 January 2009 are in Mr Myles‟ name and not the corporate entity (AJ Myles & Co). The Tribunal finds that Mr Myles in his personal capacity entered into and signed the contract as the contractor responsible for the contracted works to be performed. The condition of the house [31] There is conflicting evidence about the quality of the house prior to relocation. [32] Mr Myles contends that the house prior to relocation was “in need of major renovation works” and was “on the verge of demolition”.5 Mr Myles also states that when he first inspected the house (prior to relocation) he “noticed that the floor boards were splitting, floorboards coming loose in one part of the house”.6 [33] Mr Myles‟ evidence in relation to the condition of the house prior to relocation is supported by Callan Myles (his son) and Robert Myles (his nephew). [34] Callan (in his written statement dated 22 June 2010) states that the house was in “poor condition” but structurally the house was in “reasonable condition”. Callan states “aesthetically it was very run down with old painted floors around the extremities of the house, faded carpet and stressed lino covering the older style kitchen floor. This is not unusual with houses we’ve moved in the past”.7 [35] Mr Benn disputes Mr Myles‟ evidence. Mr Benn states that he did not see any evidence of “severe wood rot”. However, the roof “was rusty and part of the 3 Statement of Suari Mason dated 2 July 2010, Exhibit 7, [10]. 4 Exhibit 7, [4]. 5 Exhibit 10, statement of Anthony James Myles dated 4 June 2010, [6]. 6 Statement of Anthony James Myles dated 4 June 2010, Exhibit 10, [56]. 7 Exhibit 14, [13]. -- 5 of 28 -- 6 ceiling area was covered with black soot”.8 Mr Benn relies on a number of photographs of the house taken by him prior to the house being relocated. [36] Mr Benn states that prior to purchasing the house, it was occupied by tenants. During oral evidence, Mr Benn stated that the tenants vacated the house in August or September 2008. [37] During cross-examination, Mr Benn was referred to a number of photographs of the house taken by him prior to relocation. One of the photographs referred to showed the flooring of the house and the linoleum. Mr Benn did not agree that that the linoleum was of poor quality prior to relocation. Mr Benn did not agree, however, that the photographs showed the house as being in “poor condition” (prior to relocation) and stated that the photographs of the house show “poor maintenance”. Mr Benn stated that he had plans to renovate the house after relocation and did not agree that the house required “significant” renovations. [38] Mr Benn was also referred, during cross-examination, to documentation relating to the purchase of the house, obtained from Bundaberg Sugar. The documents (dated 16 September 2008) confirm that Mr Benn paid $11,500.00 for the house. The documentation states “payment must be received prior to commencement of removal or demolition [of the house]”.9 [39] The Tribunal has carefully looked at the photographs tendered at the hearing by Mr Benn, also included in the material tendered by Mr Myles on behalf of the respondents. The photographs do not show any evidence of water damage to the interior walls and floor. The photograph of the kitchen shows a tidy bench with cupboards and an oven. The lounge room photograph clearly shows the flooring (wooden floorboards) – the floorboards appear to be dry and there is a “shiny” appearance to the floor depicted in the photograph. [40] Mr Gary Kuhn (building contractor) inspected the house with Mr Benn in 2008 prior to its relocation. Mr Kuhn provided a written statement dated 29 April 2010 (tendered at the hearing) and gave evidence during cross-examination (by Mr Sheridan) at the hearing. [41] Mr Kuhn states (in his written statement) that the house appeared to be in “good condition and structurally stable”. Mr Kuhn states that (in September 2008) he saw “no obvious evidence of water damage to the ceiling”, he did not recall any “defects” to the wall and the floor “felt solid” and he did not “detect any rotten floor boards”.10 Mr Kuhn states that the exposed rafters and gutters showed “signs of some rot” and were in “poor condition” and that this was “minor work only”.11 Mr Kuhn refers (in his statement) to the quality of the floorboards. He states that the flooring was in good condition and “would come up well with 8 Exhibit 4, [17]. 9 Letter from Bundaberg Sugar to Mr Jason Benn dated 16 September 2008, attachment 5, Exhibit 15. 10 Statement of Gary Kuhn, dated 29 April 2010, Exhibit 8, [6]. 11 Exhibit 8, [7]. -- 6 of 28 -- 7 sanding and polishing” and that only the central room floor showed signs of polishing.12 [42] Mr Kuhn also inspected the house after its relocation. Mr Kuhn states that in mid March 2010 the floors showed “signs that it had been wet. The nail heads were rusty and a ring had formed around the top of the nails”.13 Mr Kuhn provided a quote to Mr Benn for work to the floor of the house and this included removal of the kitchen cupboards and bathroom fittings “so as to carry out the job properly”.14 [43] During cross-examination Mr Kuhn conceded that he did not walk around every square metre of the house. He stated, however, that you could look underneath the house and if the floors were rotten you would feel movement in the boards. Mr Kuhn stated that the condition of the house for its age was “quite good” and that even in the bathroom there was “no rot”. Mr Kuhn stated that he did not recall the condition of the carpet but did recall that the linoleum was “well aged”. [44] Mr Kuhn refers to the rafters near the gutters as showing signs of “rot” and that the gutters were in poor condition. Mr Kuhn does, however, corroborate the evidence given by Mr Benn that the house appeared to be in good condition and structurally stable. The Tribunal accepts the evidence of Mr Kuhn in relation to the quality of the house prior to relocation and the observations made by him after the house was relocated (in relation to water damage). [45] Mr Graeme Arthur Coates (electrical contractor) also inspected the house with Mr Benn (in March 2009) prior to relocation. Mr Coates prepared a statement dated 29 April 2010 (tendered at the hearing) and gave evidence by telephone (with leave) and was cross-examined at the hearing. [46] Mr Coates states that when he inspected the house in March 2009 “the structure looked generally dry and dusty”. Mr Coates inspected the house again on 10 May 2009 and provided a quotation to Mr Benn for the reconnection of the power supply. Mr Coates states “due to the extensive water damage throughout the house which was not evidenced during the initial inspection…” additional work is required including rewiring and replacing light fittings.15 Mr Coates did not inspect the roof battens and rafters, however, he states that the structure looked “generally dry and dusty”. [47] Mr Coates also states that on 10 May 2009 when he inspected the house that the two halves (of the house) were not joined – “a tarpaulin was loosely attached to the roof and [he] could see water damage down the walls, light fittings, ceiling fans and power points”.16 [48] Mr Coates stated during oral evidence that the quotation provided to Mr Benn included additional work (approximately 2 days) to rewire and replace light 12 Exhibit 8, [7]. 13 Exhibit 8, [10]. 14 Exhibit 8, [13]. 15 Statement of Graeme Arthur Coates dated 29 April 2010, [9], Exhibit 16. 16 Exhibit 16, [10]. -- 7 of 28 -- 8 fittings and that originally he was going to reconnect all circuits and this would have happened had there been no water damage. [49] Ms Suari Mason also states, in her statement dated 2 July 2010, that Mr Myles informed her and Mr Benn in January 2009 that the house was “a little beauty” and that the house would only need “[a] prep and repaint and the floor was suitable to sand and polish”.17 [50] The Tribunal accepts the evidence given by Mr Coates about the quality of the house prior to relocation and observations in relation to the “water damage” during his inspection of the house on 10 May 2009. Mr Benn does not dispute the fact that the house required some renovation work after relocation. The evidence of Mr Benn in relation to the condition of the house is supported by the evidence of Mr Coates and Mr Kuhn. [51] The Tribunal is satisfied, based on the evidence of Mr Kuhn, Mr Coates and Mr Benn, and its own observations made about the photographs (tendered at the hearing), that the condition of the house prior to relocation was good with the exception of some renovations to be undertaken by Mr Benn (not disputed) to the house. Evidence of Mr Myles (re water damage) [52] On 17 or 18 March 2009 Mr Myles transported the first half of the house (to El Arish). Mr Myles states that the stairs were inside the house – “the weather was fine and so I did not cover the house with tarp at the time as I expected I would be returning with the second part of the house that same day”.18 [53] Mr Myles was not, however, able to transport the second half of the house that same day due to his trailer breaking down during the move – the hydraulic rams required replacing/repair. [54] Mr Myles attributes the failure of his machinery to the site being “very boggy which put an additional strain on the truck”. Mr Myles states that it was the responsibility of Mr Benn to provide access “on and off site” and Mr Benn was therefore “partly responsible for the trailer breakdown and subsequent delays as the site was in a very wet and boggy condition which put extra strain on [his] truck”.19 [55] Mr Myles “determined” that it was not safe to remove the house (second half) from the broken down trailer and for “safety and precautionary reasons” decided to leave the house on the trailer.20 17 Exhibit 7, [17]. Mr Myles states (in his statement dated 4 June 2010, Exhibit 10) that the reference to “little beauty” was in relation to the “ease” at which he could cut the house for relocation (at [55]). 18 Exhibit 10, [28]. 19 Exhibit 10, [29]. 20 Exhibit 10, [30]. -- 8 of 28 -- 9 [56] Mr Myles states that he went back to El Arish to place a tarpaulin over the first half of the house shortly after the trailer broke down. Mr Myles states that he used a “brand new tarp and tied it down with rope and nails at several places”. Mr Myles did not use sheets of iron to hold it down because he states, “there was no sheets of iron available”.21 [57] Mr Myles states that he also placed a “brand new tarp on the second half of the house which was on the truck” and that it was only the “top part of the house that needed tarps”.22 [58] The second half of the house remained on the trailer until 7 April 2010 when the repairs to the trailer parts were completed. My Myles states that he did not tell Mr Benn that it would take 2 to 3 weeks for the truck to be repaired as he did not know how long the repairs would take – the parts had to come from Brisbane.23 [59] Mr Myles does not dispute that Mr Benn wanted the second half of the house to be moved as soon as possible and states that he started to relocate the second half of the house on 10 April 2010 (Good Friday). Mr Myles states that he does not recall, “what the weather was like at the time”.24 [60] Mr Myles states that upon arriving at El Arish (on 10 April 2009) he “fully tarped the roof and tied it down with at least 6 ropes” and “secured nails into each eyelet”.25 [61] Mr Myles does not dispute that Mr Benn requested, “on a number of occasions” to refit the tarpaulins due to rain and winds and that he, “complained that the tarps were shredded”. Mr Myles states that he sent his workers (Callan and Robert) to check the tarpaulins at the site and states that Callan told him that “either Mr Benn had unfastened the tarp or a worker under the control of Mr Benn’s had unfastened the tarp due to working on the extension”. Mr Benn contends that Mr Myles did not take any steps to adjust the tarps and did not take any steps to “lessen the water damage that he claims [Mr Myles] caused”.26 [62] Mr Myles stated during cross-examination that there were “lots of holes in the roof” but admitted that the house had a “full ceiling”. [63] Mr Myles also stated during cross-examination that he knew he would take time off work (over the Easter break) when he relocated the second half of the house on 10 April 2009. Mr Myles also had other work on during April 2009. Mr Myles did not dispute that there was a period of time from early April to 9 June 2009 (on 9 June 2009 Mr Myles told Mr Benn he could put the roof on) that Mr Benn “had to wait”. 21 Exhibit 10, [31]. 22 Exhibit 10, [31]. 23 Exhibit 10, [32]. 24 Exhibit 10, [34]. 25 Exhibit 10, [35]. 26 Exhibit 10, [40]. -- 9 of 28 -- 10 [64] Mr Myles also stated that one of the tarpaulins used to cover the roof of the house was brand new. Mr Myles states that he sent his workers to look at the tarpaulins when he received complaints from Mr Benn that there were holes in the tarpaulins. Evidence of Mr Benn (re water damage) [65] Although the contract was signed on 6 January 2009, Mr Benn “did not mind” that there was a delay to commence relocation (on 18 March 2009). Mr Benn states that there was rainfall during that time and he had been advised by Mr Myles and his workers that they were making the stumps for the relocated house. [66] Mr Benn denies that the truck (on 18 March 2009) was “bogged down” during the breakdown and states that he was “never informed of any access issues at the Mourilyan site”.27 [67] On 19 March 2009 Mr Benn was informed by Mr Myles that it would take four weeks for the rams to be fixed and Mr Benn states he requested Mr Myles get another trailer. Enquiries were made (by Mr Benn and his wife) to use another trailer (belonging to Mr Allan Damon). Mr Myles informed Mr Benn that a further payment of $8,000.00 was required for the hire of Mr Damon‟s truck to move the second half of the house. Mr Benn states that he offered to pay a company, Coastal Fluid Power, to fix the rams to avoid any delay.28 [68] Mr Benn states that on 21 March 2009 he also requested that Mr Myles “do something about the other side (the first half) of the house” as he was concerned about the roof as there had been some rainfall.29 [69] Mr Benn does not dispute that Mr Myles used a tarpaulin to cover the roof of the house (relocated) but states that the tarpaulins used were not of “industrial quality”, were “poorly fitted”, tied down by ropes that would “continually let go and the tarp came off several times”.30 Mr Benn states that Mr Myles did not use the old sheets of iron to secure the tarpaulin (as requested). [70] On 1 April 2009 the roof materials arrived and Mr Benn states that he stored the materials in the farm shed – he could not refit the roof until relocation of the other house and Mr Myles completed the cyclone upgrades. [71] Mr Benn claims that he and his wife refitted the tarpaulin on many occasions. Mr Benn states that Mr Myles nailed battens to the tarpaulin on the roof of the house at El Arish on 9 May 2009. The tarpaulin on the roof of the house left on the truck had “no such angled tarps to let out water”.31 [72] During the period 8, 9 and 10 April 2009 the surrounding area received 107mm of rain. Mr Benn states that when the second half of the house arrived it was 27 Exhibit 4, [24]. 28 Exhibit 4, [67]. 29 Exhibit 4, [63]. 30 Exhibit 4, [18], [27]. 31 Exhibit 4, [18]. -- 10 of 28 -- 11 covered with “a small tarp only”. The tarpaulin covered the two bedroom ceilings only and “filled up with water and sat inside the ceiling cavity like a swimming pool”.32 [73] Mr Benn states that during relocation of the second half of the house he had a tractor and train ready to assist Mr Myles with transporting the house “on to the pad” as the weather conditions had caused the truck to lose traction. Mr Benn states that the second half of the house was left “as it was without trusses back in place and without the open side being protected”.33 [74] On 10 April 2009 (Good Friday) the house arrived (according to Mr Benn) in “the middle of a rain squall, water had already started pooling in the ceiling and was dripping down the walls”.34 As the “small tarp was lying in the ceiling cavity and full of water”, Mr Benn states that he had tried to lift the tarpaulin to enable the water to “run off” rather than forming pools of water. Mr Benn states that the house was left with trusses temporarily in place and a tarpaulin over them. [75] Mr Benn alleges that he telephoned Mr Myles (on 12 April 2009) and requested that he “tip the truck slightly so the water could run out”. Mr Benn states that Mr Myles was unable to do this as “all staff were off on leave”. Mr Myles stated that “she‟ll be right, these old houses can take a lot of water”.35 [76] Mr Benn and his wife removed the floor coverings out of the house to stop water from soaking into the timber floor in an attempt to minimise water damage. Mr Benn also took photographs of the inside of the house. [77] The surrounding area received further rain – Mr Benn states that between 12 and 14 April 2009 there was approximately 150mm of rain. Mr Benn states the house was drenched with 370mm of rainfall from the time it was on site.36 [78] Mr Benn states that he attempted to “tie” down the tarpaulin (again) on 12 April 2009 and Tuesday, 14 April 2009. [79] On 24 April 2009 the two halves of the house were put in place (“chocked”) but not joined and a tarpaulin was again placed over the roof. Mr Benn states that there was no iron to help “prop up the tarp and help prevent rain entering the building”.37 [80] Mr Myles did not return to complete the works (re-joining and cyclone upgrading) on 29 April 2009 (Mr Benn states “as promised”). [81] On 2 May 2009, Mr Benn states that the tarpaulin was “off the house twice”. He states that “large holes were ripped in the tarp and there was water still all 32 Exhibit 4, [74]. 33 Exhibit 4, [77]. 34 Exhibit 4, [79] 35 Exhibit 4, [82]. 36 Exhibit 4, [85]. 37 Exhibit 4, [88]. -- 11 of 28 -- 12 through the house”.38 Mr Benn states that Mr Myles told him he would send his workers (to fix the tarpaulin). [82] During the period from 5 May 2009 to 12 May 2009, Mr Benn states that he had discussions with Mr Myles (on 5 May 2009) in relation to the water penetration. Mr Benn states that Mr Myles informed him “that‟s what ya get in the tropics, it‟s a tropical climate”.39 [83] Mr Benn states that on 7 May 2009 the water damage continued (there was further rainfall) to the internal parts of the house and he again attempted to contact Mr Myles. Exclusion of liability for water damage (the exclusion clause) [84] There is an exclusion clause in the general conditions of the contract. It provides that “any water damage to house whilst roof is off” is “not included in contract price”. [85] The Tribunal has considered the written submissions filed and oral submissions made by counsel (at the hearing) in relation to whether the contract provides Mr Myles with an exclusion of liability for any water damage to the house (as alleged). [86] In the decision of Darlington Futures Ltd v Delco Australia Pty Ltd40 the High Court of Australia held that: interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity.41 [87] That is, in “interpreting” the exclusion clause, the Tribunal must consider the contract (in writing) and the context in which it was prepared including the nature of the works to be performed by Mr Myles, to determine its objective purpose with respect to the contract. [88] Mr Sheridan of counsel, on behalf of the respondents, argues that the exclusion clause brings to the attention of Mr Benn that there is no liability for any water damage. [89] Mr Ryall of counsel, on behalf of Mr Benn, argues that in determining the terms of the contract it is necessary to consider the relevant facts and objective purpose of the contract.42 Furthermore it is argued that the exclusion from liability in relation to water damage would only have effect to the extent that such 38 Exhibit 4, [91]. 39 Exhibit 4, [98]. 40 (1986) 161 CLR 500. 41 (1986) 161 CLR 500, p 8. 42 Applicant‟s Outline of Argument, [8]. See Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500. -- 12 of 28 -- 13 water damage did not arise from a breach of the statutory warranty as provided under s 44 of the Domestic Building Contracts Act 2000 (DBCA).43 [90] Mr Ryall submits that the exclusion clause ought not apply to any damage because: 44 1) the majority of the damage occurred after the time the need to have the roof removed for transport had passed; 2) the tarpaulins were not fixed in an appropriate way or were not of the right size or quality; 3) the tarpaulins once damaged with holes were not replaced and this was a breach of the implied obligation to use good quality materials; 4) the work was poorly scheduled delaying the time during which the roof could be replaced. [91] The contract dated 6 January 2009 provides that the following items are included in the contract price: House prepared for relocation House relocated Sited/levelled Restumped Cyclone upgraded All costs of police, pilot and ergon escorts arranged by AJ Myles & Co BSA insurance Transit insurance [92] The Tribunal has considered the wording of the exclusion clause in the context of “items” to be included in the contract and the representations made by Mr Myles to Mr Benn in relation to the work to be carried out by him (relocation). [93] Mr Myles, on his own admission, agreed to “put tarps” on the roof once the roof was removed. Mr Myles states (in his written statement) that he told Mr Benn on site prior to relocation of the house that “we will endeavour to limit the amount of rain or water that gets into the house by putting tarps on the roof once it is removed, but it is not possible to stop this entirely”.45 [94] Mr Benn states that he “wanted [Mr Myles] to quote on a complete house relocation with the only difference to the existing building to lower the height from highest to 800mm off the ground, refit the stairs and realign the rear roof”.46 [95] Mr Benn states that in January 2009 he asked Mr Myles about what he had to do once he had “finished [the work]” and Mr Myles replied, “nothing, when we are finished you don‟t need to do anything, you put on the new roof”.47 43 Applicant‟s Outline of Argument, [9]. 44 Applicant‟s Outline of Argument, [15]. 45 Exhibit 10, [12]. 46 Exhibit 4, [5]. 47 Exhibit 4, [19]. -- 13 of 28 -- 14 [96] Mr Benn does not dispute that tarpaulins were placed on the roof (on the two halves of the house) but contends that the tarpaulins used were inadequate and (amongst others) not fitted properly to prevent water penetrating the interior of the house during completion of the works. [97] Mr Benn states that representations were made by Mr Myles, his son (Callan Myles) and nephew (Robert Myles) that it would take “two weeks” to move the house and that Mr Myles stated that “it would not take long” to move the house.48 During cross-examination, Mr Myles did not dispute that it would be reasonable to expect that the roof would be off the house for 3 to 5 days. [98] The Tribunal accepts the submission made by Mr Ryall of counsel on behalf of Mr Benn that the reference to the “roof being off” in the exclusion clause is a reference to the roof of the house having to be removed to lower its height to enable transport on a trailer. It is reasonable for Mr Benn to expect (at the time of signing the contract) that Mr Myles would take care of the house and take all reasonable steps to schedule the works to minimise the time the roof is off and to use good quality materials (tarpaulins) during completion of the works. [99] The Tribunal accepts the submission made by Mr Ryall that the exclusion clause (in the contract) should not apply to any damage caused by Mr Myles‟ failure to schedule the works so as to minimise the time the house remains unroofed, to use good quality materials and to carry out the works as required under the implied warranty in s 44 of the DBCA. Alleged Breaches of Contract (water damage) [100] The alleged breaches of contract by Mr Myles include:49 1) The delay caused by the breakdown of the trailer rams resulting in the house being left in two parts for long periods; 2) The decision to move the second part of the house in the rain and then left without a roof over the Easter period; 3) The failure of the contractor to replace the iron on the roof prior to leaving to complete other work; 4) A failure to replace the roof and or provide effective cover for the house during the rain period (when work could not be completed); 5) A failure to replace torn and damaged tarpaulins (with holes); and to properly fix the tarpaulins. [101] There is an implied warranty under sections 43 and 44 of the DBCA that the work carried out by the contractor (Mr Myles) will be in accordance with “all relevant laws and legal requirements, including, for example, the Building Act 1975” and that the work will be “carried out” in an “appropriate and skilful way” and with “reasonable care and skill”. 48 Exhibit 4, [27]. 49 Applicant‟s Outline of Argument, [14]. -- 14 of 28 -- 15 [102] The Tribunal must determine whether the works completed by Mr Myles were carried out in an appropriate and skilful way and with reasonable care and skill. Furthermore, did Mr Benn give Mr Myles a sufficient or reasonable opportunity to complete or rectify any defective work (as alleged).50 [103] It is not disputed that: 1) The roof of the house had to be removed prior to transportation – it was necessary to lower the height of the house to facilitate transport on a trailer. 2) Mr Benn was responsible for reroofing the house. 3) The first half of the house was moved on 17 or 18 March 2009 (the weather was fine). 4) The second half was moved on 10 April 2009 and was left on Mr Myles‟ truck due to concerns about possible fractures to the “footing holes”. 5) Mr Myles commenced joining the 2 external sides of the house on 19 May 2009, and installation of the roof was completed (by Mr Myles) on 19 June 2009. 6) On 22 May 2009, Mr Benn referred certain issues he had in relation to the work to be performed by Mr Myles to the Queensland Building Services Authority (QBSA). 7) There was rainfall during the completion of the works in Mourilyan and El Arish – in early February 2009, early/mid March 2009, early to mid April 2009 and in May 2009.51 [104] The Tribunal does not accept Mr Myles‟ argument that Mr Benn is responsible for the breakdown in the machinery on 18 March 2009 which caused the delay in transporting the second half of the house. [105] The Tribunal prefers the evidence of Mr Benn that he was not informed about any “access” issues at the time of relocation (on 17 March 2009). Mr Benn gave evidence that he assisted Mr Myles with transporting the second half of the house on 10 April 2009. Mr Benn states “I had to tow the truck with the house on it into place with a farm tractor as the rain caused the truck to lose traction. The truck was never bogged down, just unable to move effectively due to loss of traction on hard slippery clay surface”.52 [106] Mr Myles does not dispute that Mr Benn wanted the second half of the house relocated as soon as possible and he was able to successfully transport the first half of the house (on 18 March 2009) without any “access” issues (to the site). 50 See Scott Building Pty Ltd v Minogue & Coal Basin Equipment Pty Ltd [2010] QCAT 420. 51 Australian Government Bureau of Meteorology, Daily Rainfall for 2009 (South Johnstone), attachment C6, Exhibit 4. There are also rainfall statistics for the Mourilyan and El Arish areas attached Exhibit 14. 52 Exhibit 4, [24]. -- 15 of 28 -- 16 [107] The Tribunal has also considered the photographs taken by Mr Benn of the house (at the Mourilyan site) on 16 March 2009 prior to the first half of the house being transported. The site appears to be dry and there is green grass surrounding the house.53 [108] The Tribunal finds that the breakdown of the trailer delayed relocation and extended the time during which the house was left unroofed and exposed to possible water damage from the rainfall. Mr Myles does not dispute that he had time off and other work over Easter (April 2009). The Tribunal finds that this again delayed relocation and completion of the contracted works (i.e. re-joining of the house). [109] Mr Benn alleges the house was damaged by water (rainfall) in March 2009, during the Easter break (mid April 2009) and on 5 May 2009, as a result of the tarpaulins blowing off. The tarpaulins were, however, replaced according to the evidence of Mr Callan Myles. [110] There is conflicting evidence about the quality of the tarpaulins used to cover the house (the two halves) and whether the tarpaulins were properly and securely fixed as to the prevent water penetration and damage to the house. [111] Callan (Mr Myles‟ son) corroborates the evidence given by Mr Myles that the tarpaulins used were of good quality and were large enough to cover the roof of the house. Callan states “we placed and secured tarps on this house like every other, however with the heavy rain and squalls it is almost impossible to stop everything that ‘mother nature threw at it’. I used the best of my ability to keep the tarps tied down”.54 [112] Callan states that he attended the site (El Arish) on at least 3 occasions after relocation to “adjust the tarps which had moved due to heavy rain and wind…on each occasion the tarps were intact and I only needed [to] refasten small sections of the tarp that had come loose”.55 Callan also refers to attendances at the site when he noticed the ropes used to tie down the tarpaulin had been untied and that work had commenced on the house (construction of an extension) and that rain could enter the unprotected area.56 [113] During cross-examination Callan did not dispute that one of the photographs taken by Mr Benn of the tarpaulin showed a hole. When questioned about whether he knew the tarpaulin was ineffective and that water was getting through the tarpaulin, he stated that during the months of April and May 2009 they “did their best”. [114] Robert (Mr Myles‟ nephew) also gave evidence about the quality of the tarpaulins used to cover the house. Robert states that after relocation of the first half of the house to El Arish the old roofing materials were removed to perform 53 Exhibit 5, p 9. 54 Exhibit 14, [31]. 55 Exhibit 14, [32]. 56 Exhibit 14, [33]. -- 16 of 28 -- 17 cyclone upgrades and two-thirds of the iron was left on the house. A new tarpaulin was purchased (from a local store and placed over the roof). Robert states “[Mr Myles] appeared later that day or the following morning and gave to me the industrial tarps that was then used to replace the other tarping. It covered the entire area and securely tied down and secured into place”.57 [115] Robert, during cross-examination, agreed that the roof could not be fitted until he had finished the cyclone upgrades. Robert did not deny that the tarpaulin had holes and stated that this was “mainly from ripping off the roof”. Robert stated that they tied the tarpaulins back down. [116] Mr Coates also gave evidence about the tarpaulin on the house, during his inspection on 10 May 2009 (at El Arish) and states that the tarpaulin was “loosely attached” to the roof. [117] The Tribunal prefers the evidence of Mr Benn about the quality of the tarpaulin used to cover the first half of the house after relocation (to El Arish), that the tarpaulin was too small, was not fitted properly and was damaged (ripped). Mr Benn refers to several occasions when he says he attended to refitting and re- tying the tarpaulin and dates of when he says he informed Mr Myles about his concerns – on 21 March 2009 (concerns raised with Mr Myles), on 12 April 2009 (tie down of tarpaulins by Mr Benn), 14 April 2009 (tie down of tarpaulins by Mr Benn), 2 May 2009 (tarpaulins off house), 5 May 2009 and 12 May 2009 (discussions with Mr Myles about the tarpaulins). [118] Mr Benn gave evidence at the hearing that he used his own rope to tie down the tarpaulin to prevent lifting, as the tarpaulin was “short” on one side. A photograph taken by Mr Benn on 9 May 2009 (tendered at the hearing58) shows the tarpaulin tied down by green rope. Mr Benn referred to other photographs taken by him in early and mid May 2009 which show the tarpaulin (on the first half of the house) ripped with holes and the tarpaulin left on the second half of the house which Mr Benn was also inadequate as water pooled in the centre of the tarpaulin as a result of the rainfall.59 Cyclone Upgrades (alleged breach of contract) [119] The contract included “cyclone upgrading” and was therefore was contracted work to be performed by Mr Myles. [120] In November 2008 plans were prepared for certification to enable Mr Benn and his family to live in the house once relocated. The building designer provided in the plans for the installation of cyclone rods – a method of cyclone upgrading. [121] Mr Benn states that Mr Myles recommended an alternative tie down method – because of the “tongue and groove timber” the cyclone rods method would look 57 Statement of Robert William Myles dated 22 June 2010, Exhibit 13, [20]. 58 Exhibit 5, p 12. 59 Exhibit 5, pp 12, 13. -- 17 of 28 -- 18 “ugly”. Mr Benn states that Mr Myles indicated he would speak to “the engineer” about the tie down method and would “get back to [him]”.60 [122] Mr Myles agreed, during cross-examination, that it was his job to ensure that the roof and the rest of the house was upgraded according to the plan (details in the drawings). However, Mr Myles contends that there was a variation to the contract with the approval of Mr Gianarakis which provided for an alternative method of tie down instead of cyclone rods.61 [123] Mr Benn argues that he did not receive any contract variation documents in relation to an alternative tie down method and that Mr Myles delayed in carrying out the cyclone upgrading and that the works carried out were defective and incomplete.62 [124] The incomplete and defective works included (as alleged) – split rafter blocks under batten joints, poorly fitted cyclone straps, ceiling rafters that had been cut during the relocation process and not re-joined, and the installation of batten joints without rafter blocks. Mr Benn claims rectification expenses in the amount of $4,757.00 (inc GST).63 [125] Furthermore, Mr Benn argues that the plans which formed part of the contract required Mr Myles to install 24 cyclone rods and Mr Myles has failed to give credit or to make an adjustment of the contract price in Mr Benn‟s favour on the basis that the alternative method of tie down (as opposed to installation of cyclone rods as required under the contract) attracted a saving of $2,860.00. [126] The following evidence is relevant to this issue: 1) There was an inspection by Mr Crawford on 5 June 2009. Mr Benn and Callan attended the inspection. A compliance inspection report was issued on 5 June 2009 (No. 01114) listing further work required to comply with the development permit.64 2) On 10 June 2009 Mr Benn (as owner builder) and Mr Dave Bevan (Unique Roofing) fitted fascia and gutters to the house prior to reroofing. 3) On 15 June 2009 Mr Myles completed further works (cyclone upgrading). Mr Bevan was present during the works when an issue arose about the quality of the battens – Mr Bevan dropped one of the battens to the ground to demonstrate its poor condition. Robert (Mr Myles‟ nephew) gave evidence that he cannot dispute that some of the battens broke apart 60 Exhibit 4, [35]. 61 Mr Gianarakis in his report dated 23 August 2010 (Exhibit 2) states that Rob Wolf Designs amended the plans for the “tie down” method and approved the plans on 20 May 2009 (at [4.2]). The report of Mr Gianarakis provides that Mr Myles used the tie-down method with additional nailing of Vee-J wall boards also referred to in the report of Mr Gary Thompson, Exhibit 9, [28]. 62 Applicant‟s Submissions dated 17 May 2010, [24]. 63 The amount claimed is based on the agreed costing (joint expert report), Exhibit 10 and Exhibit 4, [48]. 64 Attachment C3, statement of Jason Benn dated 4 May 2010, Exhibit 4. -- 18 of 28 -- 19 when they were thrown onto the ground to reveal that they were rotting on the inside.65 4) On 16 June 2009, Mr Benn completed a number of repairs to the house frame – battens and rafter ends and cyclone straps. 66 Mr Crawford inspected the site. 5) On 19 June 2009 a new roof was fitted to the house by Mr Benn (as owner builder) with Mr Bevan. 6) On 22 July 2009, the QBSA (Billy Courtney) inspected the site. 7) On 25 June 2009, Mr Benn wrote to Mr Myles (AJ Myles & Co) requesting that he attend to outstanding floor upgrades to enable the building to comply with cyclone upgrades.67 8) On 7 August Mr Gianarakis (CMG Consulting Engineers) inspected the site and provided a handwritten report on work to be completed. Mr Myles completed the work on 20 August 2009 and on 1 and 2 September 2009, the wall bracing was completed. 68 Mr Gianarakis in his report dated 23 August 2010 states that his inspection on 7 August 2009 identified “a number of items requiring completion and or rectification. This work has been carried out and is structurally adequate”. 9) On 20 August 2009 Mr Myles completed work required by CMG (except for wall bracing). 10) On 1 September 2009 the tie down and bracing was completed. 11) On 16 September 2009 Mr Gianarakis issued an inspection certificate (Form 16) in relation to the sub-floor framing, roof upgrade framing and bracing. [127] There is conflicting evidence about what was agreed between the parties. Callan (Mr Myles‟ son) gave evidence that they were waiting for Mr Benn to indicate when the roof was to be refitted before they “upgraded” the roof. The reason for this was so as to minimise the exposure to water – it was necessary to remove the remaining iron on the roof. Callan states that the cyclone upgrade involved “battening and screwing, the installation of cyclone strapping as well as the tailing out of the rafters that had rotted away on the outside”.69 Robert conceded during cross-examination that the roof could not be put on until he had finished doing the cyclone upgrades. 65 Exhibit 13, [18]. 66 Exhibit 4, [115]. 67 Exhibit 4, Attachment B1. 68 Exhibit 4, [152]. 69 Exhibit 14, [22]. -- 19 of 28 -- 20 [128] Mr Myles states that in January 2009 Mr Benn “represented” to him that he (Mr Benn) would attend to all rafter repairs, batten replacement and cyclone strapping. [129] The contract refers to cyclone upgrade items included in the contracted works. Mr Myles, during cross-examination at the hearing, stated that the bracing was not included in the contract but he “did it”. [130] Mr Gianarakis gave evidence at the hearing in relation to the work performed by Mr Myles. His report dated 23 August 2010 refers to the nailing of the vertical wall lining to the bearer and states that the work “demonstrates poor workmanship” but the nails are structurally sufficient. [131] Mr Gianarakis states that the installation of cyclone rods would be more cost effective for the house and the use of “vertical lining for tie-down requires all boards to be double nailed top and bottom” and is therefore “labour intensive”. Mr Gianarakis states that the cyclone rods would provide a “more structurally effective tie-down”, however, each method (cyclone rods and alternative tie- down method) is with respect to “structural adequacy” of equal preference. [132] Mr Benn states that he completed the works (on 16 June 2009) in accordance with Mr Matthew Crawford‟s inspection report. Mr Benn states “for this reason I concluded extra work had to be carried out by me before the roof frame could comply with the Council approval allowing for the roof to be fitted”.70 [133] Mr Myles argues that the repairs completed by Mr Benn were extra work and in any event were not necessary for Council approval. Mr Myles states that he recalls Mr Crawford saying to Mr Benn that “those repairs to the house frame [were] not necessary for Council approval purposes, but if it were my house I would do it”.71 [134] Unfortunately Mr Crawford was not available to give evidence at the hearing. It is not contested, however, that Mr Benn together with Mr Bevan fitted a new roof to the house (completed on 19 June 2009). Mr Gianarakis, in his report dated 23 August 2010 does not refer to any completed work as being unnecessary for the purposes of certification as suggested by Mr Benn. However the Tribunal notes that this question was not specifically put to Mr Gianarakis during cross- examination. [135] The Tribunal prefers the evidence of Mr Benn that Mr Crawford inspected the work on 16 June 2009 and indicated that the roof frame was compliant and that the extra work performed by him was necessary prior to re-roofing. The Tribunal finds that cyclone upgrades included all necessary work to enable certification and was work to be performed by Mr Myles and this included the installation of cyclone rods as per the contract plans. The amount claimed by Mr Benn in relation to the extra work performed is therefore allowed in the amount of $4,757.00 (inc GST). 70 Exhibit 4, [46]. 71 Exhibit 10, [52]. -- 20 of 28 -- 21 [136] The Tribunal is not satisfied, however, that Mr Benn is entitled to a deduction or saving for the alternative tie-down method used (in lieu of cyclone rods). Mr Gianarakis states (in his report dated 23 August 2010) that the installation of cyclone rods would be more cost effective and the tie-down method is more labour intensive. Mr Benn has claimed an amount for the incomplete work and his claim has been allowed (in full). Costs to complete works [137] On 19 May 2009 Mr Myles commenced work on joining the external sides of the house but not the internal sections. Mr Myles (in his statement dated 4 June 2010) states that he joined the external sides of the house and the internal ceilings. [138] There is reference to the “bracing” including the re-joining of internal and external walls where they have been cut for the house to be relocated in the report of Mr Gianarakis (date 23 August 2010). Mr Gianarakis states that he has viewed photographs supplied by Mr Benn which show “misalignment and gaps in the join of the internal wall. These have subsequently been covered with a timber quad section and filler to rectify the aesthetics”.72 [139] Mr Benn contends that it was an implied term of the contract that Mr Myles would relocate and reinstate the house and that Mr Myles would “adequately” join (the house) both externally and internally. [140] Mr Benn states that Mr Myles told him during contract negotiations that he would “re-join the house and place strips on all cuts, make a join in the floor boards that would be hardly noticeable”.73 [141] Robert (Mr Myles‟ nephew) refers to a conversation that he says took place between Mr Myles and Mr Benn, prior to relocation – Mr Benn stated (allegedly) that he would replace the ceiling sheeting with VJ to match the rest of the veranda. Mr Benn disputes this. [142] The Tribunal prefers the evidence of Mr Benn that it was an implied term of the contract that Mr Myles would re-join the house both internally and externally. Mr Benn has been consistent in his evidence as to the representations made by My Myles prior to relocation that all he was required to do (after relocation) was to re-roof the house. [143] The Tribunal finds that the amount claimed by Mr Benn for completion of the re- joining of interior walls in the amount of $825.00 (inc GST) is therefore allowed. [144] Mr Benn also claims an amount for incomplete work relating to re-fitting the stairs, re-aligning the roof and fitting of piers to the pantry on the basis that this 72 Report of Charles Gianarakis dated 23 August 2010, Exhibit 2. 73 Exhibit 4, [153]. -- 21 of 28 -- 22 was work that formed part of the contract. Mr Myles disputes this and argues that he has complied with his contractual and statutory obligations. [145] The Tribunal has made findings of fact about Mr Benn‟s evidence in relation to the contracted works to be performed by Mr Myles. Notwithstanding those findings and a preference for Mr Benn‟s evidence in relation to discussions that took place prior to relocation of the house (in March 2009), there are some unresolved issues in relation to the re-fitting of the stairs and what was agreed. [146] Mr Benn states that it was an implied term of the contract that the stairs would be relocated and installed. The front stairs were allegedly stolen from the Mourilyan site – only the rear stairs were transported by Mr Myles (on 18 March 2009). Mr Myles states that Mr Benn took the front stairs to the new site (El Arish). [147] There was no evidence adduced by Mr Benn during cross-examination at the hearing in relation to whether he had transported the front stairs, as alleged by Mr Myles. [148] Callan (Mr Myles‟ son) refers to the inspection with Mr Crawford on 5 June 2009 (in his statement dated 22 June 2010) and that Mr Crawford stated, “the stairs must be taken down as they did not comply with Council regulations”. Mr Benn does not dispute that he re-fitted the stairs – he removed the stairs he “temporarily affixed and later refitted them with a landing to comply with Council requirements”.74 [149] The Tribunal can not be satisfied based on the evidence (unchallenged) before it, that it was an implied term of the contract that Mr Myles would fit the front stairs and that Mr Myles was responsible for transporting the front stairs to the site (El Arish). [150] The Tribunal is, however, satisfied as to the remaining amounts claimed by Mr Benn in relation to incomplete work for realignment of the rear roof and fitting piers to pantry, and that this was work that formed part of the contract. Mr Gianarakis (in his report dated 23 August 2010) states that re-aligning of the roof and fitting piers to the pantry section of the house is “generally accepted practice or standard applied to the building industry”. [151] The amount claimed by Mr Benn based on the agreed costing (in the joint expert report) is therefore allowed. Rectification costs (water damage to house) [152] The Tribunal has made findings about the condition of the house at the time of purchase (by Mr Benn prior to relocation). The Tribunal did not accept Mr Myles‟ evidence that the house was in very poor condition. 74 Exhibit 4, [39]. -- 22 of 28 -- 23 [153] The Tribunal is satisfied that the house sustained water damage as alleged by Mr Benn during relocation (between 18 March 2009 to 10 May 2009). The Tribunal has considered the evidence of Mr Benn and the various photographs tendered at the hearing which clearly show water damage to the ceiling, walls and floor. [154] The Tribunal has also considered the evidence of Mr Coates who states (in his report dated 29 April 2010) that he could see water damage during his inspection of the house on 10 May 2009 to the walls, light fittings, ceiling fans and power points. [155] There is also evidence (reports) included in the statement of Mr Benn (dated 4 May 2010), from Mr Wayne Parfitt (ACCS) and Mr Bill Courtney (QBSA) who make observations (in their reports) about water damage to the house during inspections on 13 June 2009 and 22 July 2009 (respectively). [156] The relevant authority in determining the quantum payable by a builder for completing and rectifying the building works in accordance with the contract is the decision in Bellgrove v Eldridge 75 where the rectification work to be performed must be both necessary and reasonable.76 [157] The Tribunal was referred to the decision in Wheeler & Anor v Ecroplot Pty Ltd77 which held in determining the reasonableness of rectification costs that:78 In the case of a building contract such as the present the prima facie measure of damages is the „amount required to rectify the defects complained of and so give to [the plaintiff] the equivalent of a building on [his or her] land which is substantially in accordance with the contract [158] It was further held in applying the principle in Bellgrove that the work undertaken must be necessary and reasonable where “the test of „unreasonableness‟ is [as held in the decision of Tabcorp Holdings 79 ] only to be satisfied by fairly exceptional circumstances”.80 [159] Mr Sheridan (of counsel) submits that it is necessary for the Tribunal to determine whether the cost of repairs (as claimed) are reasonable having regard to the principle in Bellgrove or whether it would be reasonable to award the cost of replacement of a house (of equal value). [160] Mr David Fair gave evidence about the cost of transporting a house from Brisbane to far north Queensland. Mr Fair stated that the cost of relocation (for a colonial style house) is $53 per kilometre distance. However, in his experience houses are not relocated beyond a 3 to 4 kilometre, as it is very 75 (1954) 90 CLR 613 referred to in Pulitano v Mikescapes Pty Ltd [2010] QCAT 248 and Franklin v A&S Bricklaying Service [2010] QCAT 69. 76 See Tabcorp Holdings Limited v Bowen Investments Pty Ltd [2009] HCA 8. 77 [2010] NSWCA 61. 78 Wheeler & Anor v Ecroplot Pty Ltd [2010] NSWCA 61, [80]. 79 See Tabcorp Holdings Limited v Bowen Investments Pty Ltd [2009] HCA 8. 80 Wheeler & Anor v Ecroplot Pty Ltd [2010] NSWCA 61, [80], [81]. -- 23 of 28 -- 24 expensive to relocate. Mr Fair also stated that colonial style houses sell very quickly if they are in good condition and these houses are not always available. [161] The Tribunal prefers the submissions of Mr Ryall in relation to whether it would be reasonable to award the replacement value of the house or the reasonable costs of repairs. Mr Ryall submits that Mr Benn and his wife wanted “this particular house” notwithstanding that it might have been unattractive from the outside. The Tribunal accepts the submissions made that a replacement house would attract further delay (waiting for a suitable replacement) and costs of relocation, cyclone upgrading and demolition and removal of the existing (current house). [162] The Tribunal must determine the amount of damages (rectification costs) as claimed having regard to the agreed costing and damages claimed by Mr Benn. [163] The agreed costing (joint expert report) includes a claim for preliminaries – an allowance made by a builder to cover costs for such items as (amongst others) insurance, statutory fees and charges and scaffolding. The preliminaries are calculated using a percentage or calculated on preliminary items individually. It is agreed between the parties that a suitable percentage for preliminaries is 16%. [164] Mr Gavin Stewart and Mr Gary Thompson gave evidence at the hearing that an owner builder would incur costs associated with the renovation work (i.e. preliminaries). The Tribunal is satisfied that Mr Benn is entitled to a claim for preliminaries at the rate of 16% as agreed. [165] There are two proposed methods of rectification in relation to the wooden floorboards – replacement of the wooden floors and the alternative floating floor system method (a cheaper method). [166] Mr Benn also claims an alterative amount of $96,860.00 (inc GST) being the costs of removing the damaged floors in accordance with the report of Mr Gary Kuhn (builder) dated 30 April 2010. [167] It is not disputed that both floor systems are suitable. [168] Mr Sheridan submits that the Tribunal should, however, prefer the least expensive option in relation to the proposed flooring (item 20 on the agreed costing) on the basis that there is no evidence before the tribunal as to why the more expensive option (proposed by My Kuhn) should be preferred. [169] Mr Ryall argues that had the contract been performed properly Mr Benn would have had a timber floor with floorboards. It is therefore reasonable to claim for the cost of a replacement floor system as quoted by Mr Kuhn. [170] The Tribunal prefers the submissions made by Mr Sheridan in relation to the reasonableness of the amount claimed for the preferred floor system. [171] There is evidence before the Tribunal being the joint experts report dated 21 September 2010 and the report of Mr Gavin Stewart dated 18 October 2010 -- 24 of 28 -- 25 which addresses the issue of preferred floor system. The experts (Mr Thompson, Mr Stewart and Mr Gianarakis) state “CG (Mr Gianarakis) advised that both [floor] systems were suitable for the intended application”. Furthermore, Mr Thompson in his report dated 15 March 2010 states that he, Mr Thompson and Mr Gianarakis “investigated some alternative products that could be laid on top of the existing floor that was reported to be structurally sound”. [172] The Tribunal finds that the alternative floor system (item 19 referred to in the joint expert report) should be allowed in the amount of $34,609.00 (plus GST). [173] In relation to the claim for electrical expenses, Mr Coates gave evidence at the hearing about the quote provided in the amount of $4,235.00. Mr Coates stated that the amount included replacing wires in the roof, rewiring of lights and switches and replacing lights, fans and power points. Mr Coates stated that had there been no water damage to the house he would have reconnected all the circuits. [174] The Tribunal accepts the evidence of Mr Coates in relation to electrical expenses necessary to replace wires, rewiring and replacing of lights and that such costs are reasonable in the amount of $4,235.00 (plus GST). [175] The Tribunal accepts the evidence of the joint experts in relation to the remaining items listed in the agreed costing having found that there was water damage to all areas of the house (walls, ceilings and floors) and finds that the amounts claimed in relation to items numbered 7, 8, 10, 11, 14, 21, 22, 23, 24, 25 and 26 are reasonable:81 Additional rental expenses [176] Mr Benn seeks leave to amend his claim to include additional expenses incurred while he waited for the house to become habitable. Mr Benn claims the amount of $6,460.00 for 34 weeks at the rate of $190.00 per week. Mr Benn relies on his own evidence in support of the claim. [177] The Tribunal is not satisfied on the evidence that Mr Benn has incurred additional expense (rent) for reasons attributed solely to Mr Myles. [178] There is evidence before the Tribunal to indicate that during completion of the contracted works Mr Benn was also undertaking additional works (as owner builder) to the house – installation of a large septic system and trenches, construction of a large carport shed. 82 [179] The Tribunal is not satisfied that the delays in reaching practical completion were solely attributable to Mr Myles or whether it was in fact necessary for Mr Benn to complete the additional works prior to occupation and whether it was 81 Agreed costing, Exhibit 3. Items are exclusive of GST. The Tribunal refers to the report of Mr Gavin Stewart dated 18 October 2010, Exhibit 18, which provides further clarification as to the findings made in relation to the water damage to the house (at [2]). Item 9 of the schedule refers to “sanding” which is included in item 19. 82 Memorandum of Billy Courtney (QBSA) undated, attachment C1, Exhibit 4. -- 25 of 28 -- 26 therefore necessary to make alternative arrangements for living (rental expenses) while the owner builder works were being completed. [180] Notwithstanding the finding that Mr Benn was completing additional works, there is no evidence before the Tribunal evidencing expenditure of the rental expenses. The claim for rental expenses is not allowed. Claim for distress and inconvenience [181] Mr Benn claims an amount of $10,000.00 for distress and inconvenience as a result of Mr Myles‟ breach of contracts and the warranties, inconvenience and distress and anxiety. [182] Mr Ryall, in written submissions, refers to the decision in Pearce t/a Freestyle Projects v Caswell.83 [183] In the decision of Pearce an award of $2,000.00 for compensation was allowed to represent the “distress” that arose as “a direct result of the situation with the [builder] in terms of the defective work, the need to involve the BSA, the need for extensive rectification, and the significant delay in the completion of their dream home”.84 [184] Mr Myles and his wife (Suari) have given evidence about the distress and inconvenience caused by the delay in relation to the relocation of the house, the damage to the house caused by water penetration and the need to undertake work not completed by Mr Myles including completion of cyclone upgrades and re-joining of the house. [185] The Tribunal finds that it is appropriate that Mr Benn receive some nominal compensation for his distress, inconvenience and loss. The Tribunal will allow the amount of $2,000.00. Entitlement to final progress claim (money owing to Mr Myles) [186] The commencement date of the contract is disputed. Mr Myles argues the start date of the contract was 18 March 2009 and Mr Benn argues it was 6 January 2009. The issue is relevant as to the date for practical completion (135 days from the date of commencement). [187] Mr Myles contends that the works were practically completed on 20 August 2009 and Mr Benn argues that Mr Myles is yet to bring the works to practical completion. [188] Mr Myles, during cross-examination at the hearing, stated that during the period from 6 January 2009 to 18 March 2009, there was preparation of the house prior to its relocation on 18 March 2009 (first half of the house). Mr Myles also states 83 [2009] QCCTB 192. Also see Paans v Phil Martyn Constructions Pty Ltd & Tamawood Homes Pty Ltd [2004] QCCTB 111. 84 [2009] QCCTB 192, [93]. -- 26 of 28 -- 27 (in his statement dated 4 June 2010), that he started some “preparatory work on site prior to 16 January 2009”.85 [189] Mr Benn states that on 15 January 2009 he paid $14,400 to AJ Myles & Co as required under Item 10 of the contract (commence works). Mr Benn states that he did not receive all the necessary contract documents from Mr Myles as required under the QBSA Minor Works Contract. [190] The Tribunal accepts the evidence of Mr Myles that prior to the house (first half) being relocated Mr Myles was undertaking preparations for the relocation. This is consistent with the evidence of Mr Benn in that he states, “nothing much happened with the relocation” during January and February 2009 as he had been informed (by Mr Myles) that the stumps were being prepared for the house relocation and there was rainfall during this time.86 [191] The Tribunal finds that the date of commencement of the contract was 6 January 2009 as provided in the contract and the date for practical completion (135 days) was 21 May 2009. [192] Mr Myles contends that he completed the works on 20 August 2009 and that Mr Myles has failed to pay the final progress claim in the amount of $4,800.00. [193] The final progress payment is due under the contract upon completion of the works. Practical completion for a regulated contract is defined under the DBCA as the stage when the works are completed in accordance with the contract and relevant statutory authority without any “omissions or defects” or apart from “minor omissions or minor defects” and the home is “reasonably suitable for habitation”. [194] The Tribunal does not accept Mr Myles‟ submission that the contracted works were completed (by him) on 20 August 2009. The Tribunal has made findings about the non-completion of contracted works and has allowed amounts (as claimed) to complete the work. Mr Myles is, however, entitled to recover the money owing for the works completed (by him) on the basis that Mr Benn has had the benefit of the works, less any claim for defective and incomplete work.87 The Tribunal will allow the amount of $4,800.00 to be offset against any award of damages payable by Mr Myles. Calculation of damages [195] The Tribunal has assessed damages (based on the findings made) as follows: Preliminaries at 16%88 $17,948.68 7. Level & re-hang ceiling $ 5,190.00 8. Replace floor coverings $ 2,550.00 10. Interior walls $26,663.00 85 Exhibit 10, [23]. 86 Exhibit 4. 87 See Nguyen v Luxury Design Homes Pty Ltd [2004] NSWCA 178. 88 Based on the total of the items listed below. -- 27 of 28 -- 28 11. Interior painting $10,774.00 14. Kitchen cabinets $ 7,436.25 21. French doors $ 1,608.50 22. Internal doors $ 1,608.50 23. Exterior door $ 407.50 24. External door $ 407.50 25. Casement windows $ 6,983.00 26. 5 hopper windows $ 1,018.00 13. Electricals $ 4,235.00 19. Replace damaged floors $ 34,609.00 18. Re-join interior walls $ 750.00 3. Realign rear roof $ 2,014.00 4. Fit piers (pantry) $ 1,600.00 5. Rafter end repairs $ 900.00 6. Replace battens $ 3,425.00 $130,127.93 PLUS GST $ 13,012.79 PLUS claim for inconvenience & loss $ 2,000.00 Total $145,140.72 LESS money owing to Mr Myles $ 4,800.00 $140,340.72 [196] The Tribunal orders that Mr Myles pay the amount of $140,340.72 to Mr Benn by 4.00pm on 16 December 2011. -- 28 of 28 --