Cool v Davana Timber Industries Pty Ltd [2011] QCAT 688

CITATION: Cool v Davana Timber Industries Pty Ltd [2011] QCAT 688 PARTIES: Adrian Cool (Applicant) v Davana Timber Industries Pty Ltd (Respondent) APPLICATION NUMBER: BDL122-11 MATTER TYPE: Building matters HEARING DATE: 28 September 2011 HEARD AT: Brisbane DECISION OF: Michelle Howard, Member DELIVERED ON: 27 October 2011 DELIVERED AT: Brisbane ORDERS MADE: 1. That Davana Timber Industries Pty Ltd pay to Adrian Cool the sum of $48,070.80 within 21 days. CATCHWORDS: BUILDING DISPUTE – claim against supplier – where contract for supply of timber for use as flooring – where timber not fit for purpose – where floor must be removed DAMAGES FOR BREACH OF CONTRACT – where claim against supplier only of timber – timber supplied to be installed as flooring in renovation of house property – special knowledge of supplier – where claim for costs of the timber, installing and polishing it, and removing it – remoteness of loss Domestic Building Contracts Act 2000, s 8 Queensland Building Services Authority Act 1991, ss 75, 77, Schedule 2 Sale of Goods Act 1896, ss 16, 17, 54 Hadley v Baxendale (1854) 156 ER 145 Hungerfords v Walker (1989) 63 ALJR 210 Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 -- 1 of 6 -- 2 Want v Majer Tiles Pty Ltd [2010] QCAT 103 Hill-Douglas v Brkan [2008] QCCTB 148 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Cool appeared representing himself. RESPONDENT: There was no appearance for Davana Timber Industries Pty Ltd. REASONS FOR DECISION [1] Mr Cool renovated his house at Norman Park during 2010. He project- managed the work done. The renovation included installation of a hardwood timber floor on the ground floor. He paid Davana Timber Industries Pty Ltd $7,150 for the supply of select grade grey ironbark kiln dried flooring which was ordered through Tony Mann, a builder who completed some of the work during the renovation. Grey ironbark was ordered to match stairs in Mr Cool’s home. [2] Mr Cool’s evidence is that Davana is a timber mill at Gatton. Timber for decking was also ordered from Davana for use in the renovation. Tony Mann told him that he had been using Davana as a timber supplier for several years. Mr Cool provided to the tribunal a copy of an email from Tony Mann to David Collison at Davana dated 17 August 2010 asking for details of a day for delivery of the ‘Gray Iron Bark flooring to Norman Park’. Mr Cool also spoke with Mr Collison about the timber for flooring several times before its delivery. [3] The timber was delivered in August 2010. Mr Cool paid for the timber on a COD basis. Mr Cool says that an invoice was not issued by Davana. [4] Mr Cool says that the timber was immediately placed inside the house, and installed 2 weeks later as flooring in the downstairs area of the house. The preparatory work was done by Tony Mann who installed a membrane and the plywood underlay. The timber was then laid by a flooring contractor, Ken Fang. Mr Cool had the floor sanded and polished shortly afterwards by JB Floor Sanding. [5] Shortly after installation, Mr Cool observed a problem with the flooring and obtained technical advice from the Australian Timber Flooring Association (ATFA) who took moisture readings and advised him that the moisture content in the timber was above legal specification. This has resulted in what is referred to as ‘cupping’ and gapping between the boards in the timber flooring. [6] Mr Cool notified David Collison, a director of Davana, with whom he had previously spoken, about the problem. However, he says that Mr Collison denied that he had any responsibility in the matter. Mr Collison refused to inspect and has subsequently failed to return Mr Cool’s letters, emails and telephone calls. -- 2 of 6 -- 3 [7] With the passage of some months the problem with the flooring worsened. A report from ATFA confirms that moisture content of the boards is responsible. The boards were 130mm wide when supplied. The minimum width of some recorded in the ATFA report which is dated 11 February 2011 was 125mm. Some of them have more recently been measured by Mr Cool at 124 mm. [8] Mr Cool seeks orders for the payment to him of the costs of purchasing, installing, sanding and polishing the timber flooring, as well as removal of it. Removal involves removing and refitting the architraves, and kitchen and laundry, as well as painting and repairing any damage to walls and other things during removal. [9] The timber cost $7,150. Mr Cool estimates the total costs of installation at $19,050. This includes the costs of 40 sheets of ply estimated at $2,000; nails at an estimated cost of $1,000; glue $600; plastic $400; labour of Tony Mann $2,000; costs of flooring contractor Ken Fang $3,600; and half the costs of sanding and polishing of upstairs existing floors (85 metres squared) and downstairs (100 metres squared) charged by JB Floor Sanding being $2,300. [10] Scott Harris Constructions have quoted $30,000 to remove the downstairs flooring. A detailed quote for this work was provided to the tribunal. The floor has not as yet been removed. Mr Cool says that he has no option but to remove and replace it as it is a hazard because some of the boards have now popped up. Scott Harris also quote $18,070.80 to install a new floor using select grade grey ironbark flooring. [11] Mr Cool seeks orders for the payment to him by Davana totalling $49,050. [12] Davana was served with the application by Mr Cool. The tribunal directed Davana to file and serve a response to the application by 10 August 2011. The directions provided that in the event of non-compliance with that direction, the application would be determined on the papers. A response was not filed by Davana. [13] When the matter came to me for hearing on the papers, I considered that an oral hearing was necessary. I made directions for the filing of further material by Mr Cool and listed the matter for hearing. Davana was provided with notice of the hearing by the tribunal. However, Davana did not attend. Jurisdiction of the Tribunal [14] The tribunal has jurisdiction to decide building disputes under the Queensland Building Services Authority Act 1991 (the QBSA Act).1 To resolve a building dispute, it may, among other things, make orders awarding damages.2 Schedule 2 of the QBSA Act defines a building dispute to include a domestic building dispute. A domestic building dispute is defined in Schedule 2, relevantly to include 1 QBSA Act, s 77(1). 2 QBSA Act, s 77(2). -- 3 of 6 -- 4 (d) a claim or dispute arising between a building owner or a building contractor and any 1 or more of the following relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work-- …….. (vi) a supplier or manufacturer of materials used in the tribunal work. [15] Tribunal work includes renovation of a building.3 Reviewable domestic work means domestic building work under the Domestic Building Contracts Act 2000 (DBC Act), subject to exceptions which are not relevant in this proceeding.4 Section 8 of the DBC Act provides that domestic building work includes, among other things, the renovation of a home.5 [16] Davana is a supplier of materials used in tribunal work, because renovation of a building is tribunal work. Domestic building work under the DBC Act includes renovation of a home, and is therefore, reviewable domestic work under the QBSA Act. [17] The dispute arises between the building owner, Mr Cool, and a supplier of materials, Davana, used in reviewable domestic work. Courts have afforded a wide construction to the phrase ‘relating to’.6 Accordingly, I accept that the dispute arises relating to the performance of reviewable domestic work. The Contract Between the Parties [18] The Sale of Goods Act 1896 provides for an implied condition in a contract for the sale of goods by description: the goods shall correspond with the description.7 Also, subject to an exception which is not relevant, generally when a buyer expressly or impliedly makes the seller aware of the particular purpose for which the goods are required, and the goods are of a description which it is in the course of the seller’s business to supply, a warranty is implied that the goods shall be reasonably fit for that purpose.8 [19] When there is a breach of a condition, in circumstances that the buyer cannot terminate the contract, the buyer can maintain an action against the seller for damages for breach of warranty.9 The damages recoverable are the loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.10 [20] The evidence is that the contract between Mr Cool and Davana was for the supply of select grade kiln dried grey ironbark timber for use as flooring. On the basis of the AFTA evidence, it is established that the timber supplied was inappropriate for the purpose of timber flooring because the moisture content was too high. Davana was aware that the timber was to be used as timber flooring. The evidence is that Davana Timber Industries Pty Ltd is in 3 QBSA Act, s 75(1)(b). 4 QBSA Act, Schedule 2. 5 DBC Act, s 8(1)(b). 6 See for example, discussion in Want v Majer Tiles Pty Ltd [2010] QCAT 103; Hill-Douglas v Brkan [2008] QCCTB 148. 7 Sale of Goods Act 1896, s 16. 8 Sale of Goods Act 1896, s 17, especially 17(a) and (b). 9 Sale of Goods Act 1896, s 54. 10 Sale of Goods Act 1896, s 54(2), (3) and (4). -- 4 of 6 -- 5 the business of supplying timber to purchasers. Tony Mann, a builder, told Mr Cool that he had used Davana as a supplier for several years. In any event, it would be reasonable to infer from its name and the nature of the contract between Mr Cool and Davana, that it is a timber supplier. Under the Sale of Goods Act 1896 a warranty was implied that the goods supplied were reasonably fit for the purpose disclosed. Davana, as the seller, supplied timber which was not reasonably fit for the purpose disclosed, that is, for flooring. [21] Accordingly, Mr Cool is entitled to damages for breach of contract. Quantum of Damages [22] The primary purpose of damages is to compensate a party for the actual loss suffered as a result of the other party’s failure to perform the contract.11 The person seeking damages must establish the amount of the loss suffered.12 The loss suffered must not be too remote: a party will be liable for damage arising as a reasonable and natural course from special circumstances of which the party is aware at the time of entry into the contract.13 Also, a claimant must act reasonably to mitigate unnecessary loss. [23] Mr Cool’s claim was initially for the costs of removing the floor, and installing a new floor, but during the hearing, he clarified that he seeks damages for the cost of the floor, including the cost of the timber and its installation and the cost of removing the existing defective flooring. He submits that these are the monies effectively wasted or lost as a result of Davana’s breach of contract. [24] Davana’s representative knew that Mr Cool intended to use the timber for flooring in his home. This constitutes special knowledge. I am satisfied that that the reasonably foreseeable loss to Mr Cool in the event that Davana supplied defective timber includes not only the cost of the timber itself, but also the costs of installing it, sanding and polishing it, and subsequently removing it. [25] I am also satisfied that Mr Cool has acted reasonably. He waited for the floor to be reviewed despite early problems. Unfortunately, because the timber is defective, the floor must be removed. [26] There evidence of the installation costs is an estimate made by Mr Cool which totals $19,050. He did not produce the tax invoices and receipts, other than for JB Floor Sanding. However, he estimated the costs of the ply sheeting and nails based on a recent costing of ply for other reasons. He recalled the square metre charges for Ken Fang and explained how he did the calculation of his charges. [27] The estimate is slightly more than the quote provided by Scott Harris Constructions to replace the floor. On the balance of probabilities, I accept 11 For example see, Hungerfords v Walker (1989) 63 ALJR 210. 12 For example see, Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711. 13 Hadley v Baxendale (1854) 156 ER 145. -- 5 of 6 -- 6 that Mr Cool has genuinely endeavoured to estimate the costs of installing and sanding and polishing the flooring. However, without the documentation to confirm the actual costs of the various components, I consider it is reasonable to accept the costs as quoted by Scott Harris Constructions for installing an equivalent floor as more likely reflective of the actual costs. Therefore, I find the costs of installing and sanding and polishing the floor were $18,070.80. [28] On the evidence provided, I accept that the floor must be removed. I accept that the cost of removing it, and attending the associated removing and refitting of the architraves, kitchen and laundry, together with painting and damage repair necessary as a result is $30,000. [29] Therefore, Mr Cool is entitled to damages totalling $48,070.80. I make orders accordingly. -- 6 of 6 --