Avilake Pty Ltd v Tucker and Anor [2012] QCAT 41

CITATION: Avilake Pty Ltd v Tucker and Anor [2012] QCAT 41 PARTIES: Avilake Pty Ltd ABN 341 105 202 71 v William Edward Tucker Julie Jean Tucker APPLICATION NUMBER: BD486-09 MATTER TYPE: Building matters HEARING DATE: 12 & 13 September 2011 HEARD AT: Brisbane DECISION OF: Ann Fitzpatrick, Member DELIVERED ON: 6 January 2012 DELIVERED AT: Brisbane ORDERS MADE: [1] The applicant’s application is dismissed. [2] The respondents’ counter- application is dismissed. [3] The applicant file and serve any further submissions in relation to costs by 13 January 2012. [4] The respondents’ file and serve any further submissions in relation to costs by 27 January 2012. [5] The applicant file and serve any reply by 7 February 2012. CATCHWORDS: Practical completion stage payment – claim for debt not damages – suspension of works – validity of notice of intention to terminate and termination of contract – wrongful repudiation – time for performance of defective and incomplete work Domestic Building Contracts Act 2000, s 67 APPEARANCES and REPRESENTATION (if any): APPLICANT: Avilake Pty Ltd represented by Mr Kym Flehr of Kym Flehr Legal Solutions -- 1 of 32 -- 2 RESPONDENT: William Edward Tucker and Julie Jean Tucker represented by Ms Gemma Robson of McCarthy Durie Lawyers REASONS FOR DECISION [1] The applicant, Avilake Pty Ltd filed an application in relation to a domestic building dispute in the former Commercial and Consumer Tribunal on 19 November, 2009. The functions of that Tribunal with respect to domestic building disputes are now performed by the Queensland Civil and Administrative Tribunal. [2] By its application, Avilake seeks an order for payment by the respondents, Mr and Mrs Tucker, of the following sums: (a) $25,500.00 being the amount alleged to be outstanding under a residential building contract between the parties; (b) $3,502.57 being the amount alleged to be owed pursuant to a preliminary agreement between the parties. [3] The applicant also seeks interest and costs. [4] The Tuckers deny that they owe any sum to Avilake and have lodged a counter-application, seeking orders for payment by Avilake of certain sums for rectification of alleged defects, completion of building works, the cost of a building inspection report and legal costs. In their final submissions, the Tuckers also sought an order that Avilake release all building certificates it holds. Background Facts [5] The following facts are set out in the various statements filed and tendered in these proceedings. I accept the evidence in relation to these matters, except where I note that the asserted facts are disputed. In which case a separate finding will be made, if necessary. [6] Avilake is a licensed builder. Its Director, Tim Jackson was the builder’s representative. [7] The Tuckers proposed that a house be constructed on their land at 15 Alkira Street, Macleay Island. [8] On 15 June, 2008, Avilake and the Tuckers entered into a written Queensland Master Builders Association form of preliminary agreement. Under that agreement the builder agreed to: have the site surveyed; obtain the foundations data, e.g. soil test/ contour plan; have drawings and specifications prepared; -- 2 of 32 -- 3 alter and amend such drawings and specifications as required by the owner; prepare an appropriate footings design for the site and if appropriate a concrete slab design based upon the foundations data; make an application to the relevant Local Authority or Private Certifier for approval of the building work shown on the drawings and described in the specifications; make application for approval to any other Authorities from which it may be necessary to obtain approvals; pay all fees necessary to obtain such approvals; prepare a tender to carry out the work shown on the original drawings and described in the specifications. Additional tasks: make amendments to plans on owner’s behalf. [9] The last dot point item was said to be handwritten by Mr Jackson’s wife. [10] Item 2 of the preliminary agreement bears the handwritten notation in Mr Tucker’s handwriting – “Provided cost of building works does not exceed $170,000”. [11] Item 3 of the preliminary agreement provides that in consideration of the builder performing the tasks, the owner agrees to pay the builder, upon completion of the nominated tasks a certain sum. The parties are in dispute as to whether the figure noted on the agreement is $1,200.00 or $7,200.00. [12] A Tax Invoice document with the words Tax Invoice/Statement struck through and the word Receipt handwritten, dated 16 June, 2008, notes in its body – “Received cheque (NAB) being for the amount of $2,118.00 ie i House plans by draftsman ii MCU (Preliminary Agreement) for No 15 Alkira St Macleay Island”. [13] Mr Jackson sent the Tuckers’ sketch of the proposed house to Butler Drafting, who did basic plans lodged for Town Planning Approval, dated 29 July, 2008. [14] A receipt dated 14 November, 2008 from Avilake to the Tuckers notes: “Received the amount of $935.93 being for preliminary agreement ie soil test, engineer letter, Redland City Council…”. [15] Avilake entered into a Master Builder’s Residential Building Contract with the Tuckers, dated 23 November, 2008, to construct a new house at 15 Alkira Street, Macleay Island (the Works). -- 3 of 32 -- 4 [16] The contract price was $170,000.00. The construction period was 250 days. The parties agreed to progress payments in accordance with section 66 of the Domestic Building Contracts Act 2000 (DBCA). That is, the contract was expressed to build all stages with a payment for the deposit and then payments at the base, frame, enclosed fixing and practical completion stages. The payment at practical completion stage was expressed to be $25,500.00. [17] A spa bath and vanity were expressed not to be included in the contract price, but were noted as shown on the plans and specifications. The spa bath, vanity and tiling (tiles and labour), were expressed to be material supplied or work to be carried out by the owner, with no warranties given by the builder. [18] The appendix to the contract dealing with allowances for prime cost items is blank apart from a notation said to be in Mrs Jackson’s handwriting – “All prime cost items are standard builders range”. [19] Mr Jackson attached to his statement, made 23 November, 2010 (Exhibit 1), a copy of what he asserts is a list of standard inclusions to be included as part of the construction cost. The facts surrounding the creation and status of this document are disputed by Mr Tucker. [20] By letter dated 9 December, 2008 from the Redland City Council to Avilake a development permit was granted following the development application for a material change of use to construct a dwelling house. [21] Mr Jackson instructed Butler Drafting Service to draw more detailed plans. He collected those plans on 18 December, 2008. The plans did not change the date in the identification box from the date of the earlier plans. [22] Mr Jackson contends the plans were different to what he had agreed to construct for the Tuckers, including by reference to a slab detail for the garage and laundry. Mr Jackson contends that he discussed changes to the plans with the Tuckers to ensure the construction cost of $170,000.00 was met, particularly in light of the cost of installing a treatment plant which the Council required and which added $6,000.00-$8,000.00 to the cost of the Works, not previously included in the cost of construction. He says that the Tuckers also sought changes to the plans which he agreed to implement. These conversations are in dispute. [23] Mr Tucker attached to his affidavit, made 21 January, 2011 (Exhibit 10), a copy of an invoice from Butler Drafting Service recording total fees of $1,631.30 for house plans, on stump design, RP Plan from Department of Natural Resources and prints for Material Change of Use and building application. After deducting moneys paid, the sum of $643.50 remained and that is noted as paid on 17 January, 2009. [24] On 10 February, 2009 the Redland City Council gave a plumbing and drainage compliance permit. The letter notes two inspections and a final -- 4 of 32 -- 5 plumbing and drainage inspection had been paid for. An Ozzi Kleen treatment plant is described in the plans attached to the permit. [25] Mr Jackson amended the 18 December, 2008 drawings to reflect what he contends was the agreement of the parties, purportedly exercising his entitlement to do so under the handwritten note on the preliminary agreement that he might “make amendments to plans on the owners behalf”. The Tuckers deny that Mr Jackson was entitled to make those amendments without reference to them. [26] Mr Jackson submitted to the Redland City Council a request to change an existing approval, enclosing the drawings he had amended. On 5 March, 2009, Avilake wrote to the building certifier, Applied Building Approvals requesting the plans be amended to reflect the changed drawings. The changes noted were: handrail and balustrading to lower deck deleted; all decorative material to lower level stumps deleted; fixed glass panels to front gable end deleted; size of sliding glass door in rumpus 21.18. Size of sliding glass door living room 21.18. Size of sliding glass door to dining front of house 21.18; laundry door is deleted and moved to rear of rumpus room as shown on drawings. Laundry wall has been moved back to make garage larger as shown on drawings; window size change; concrete to garage deleted. [27] Mr Jackson submits that Applied Building Approvals certified the amended plans, gave a copy to Mr Jackson and sent a copy to the Tuckers on 16 March, 2009. The Tuckers dispute that they received plans on that date. Mr Tucker attaches to exhibit 10 a copy of the approved decision notice and approved plans and specifications received on 29 April, 2009 from Approved Building Approvals, contending no amendments are shown on the approved plans and specifications and no variations were received or executed. The Tuckers deny receiving amended plans on or after 16 March 2009. [28] On 11 March, 2009 the Tuckers paid the base stage payment. [29] On 23 July 2009 a spa bath was delivered to site. It had the word “Renovator” printed on the side but otherwise had no markings. Mr Jackson contends that there were no identifications, specifications or warranty documents with it upon delivery. There is debate about the extent of packaging around the spa bath. [30] Without evidence of compliance with Australian Standards, the plumber and Mr Jackson were not prepared to install the spa bath. -- 5 of 32 -- 6 [31] On 27 July, 2009 Mr Jackson sent a fax to the Tuckers advising that the spa: “does not give sufficient detail to ensure the spa bath installation will allow the building and approval process to be finalized for your home. … I am unable to warrant its performance or that I will achieve building and plumbing final. …any consequential costs will be at your expense. If you wish to proceed with the installation of the spa bath as is, I will require that you acknowledge in writing that you will accept all responsibility for its performance and any consequential costs that may occur to achieve a building and plumbing final. …” [32] On 28 July, 2009 the Tuckers advised they had referred the matter to their solicitor. [33] On 29 July, 2009 Avilake sent a Practical Completion Notice to the Tuckers. The Notice, although sent ahead of the date, named 5 August, 2009 as the date of practical completion and nominated a final inspection for that day. [34] On 29 July, 2009 Avilake sent a tax invoice to the Tuckers for the progress payment for practical completion. [35] On 3 August, 2009, the Tuckers responded asserting Avilake was not entitled to exclude warranties with respect to the spa, requiring installation to proceed, denying that practical completion could be achieved on 5 August, 2009, requesting a different date for final inspection and asserting that delivery of an invoice for the practical completion stage was a breach of the DBCA. [36] On 4 August, 2009 the Tuckers wrote to Avilake asserting that the “Inclusions” list sent to them by their bank infringed the prime cost provisions of the DBCA. They also listed a number of alleged defects and incomplete items they required rectified and completed. [37] On 5 August, 2009 Avilake wrote again to the Tuckers indicating it was not prepared to take any responsibility for the spa and its installation, as the supplier was not able to provide the required approvals. [38] On 6 August, 2009 Avilake wrote to the Tuckers confirming 7 August, 2009 as the date for the final inspection. [39] On 6 August, 2009 the Tuckers responded saying outstanding matters should be attended to within 14 days and sending a copy of “Table 1 Marking of Products” extracted from a Standards Australia publication and a document headed “Renovator 1500 x 1500 x 525 or 1300 x 1300 x 500”. The document appears to be an extract from a Lanark manufacturer’s product book. The page bears Warranty details and a symbol which by -- 6 of 32 -- 7 reference to the Standards Australia publication page suggests plumbing safety testing had been undertaken. [40] By letter dated 6 August 2009 the Tuckers advised that until their concerns had been addressed and s 67(6) of the DBCA satisfied, they could not accept 7 August 2009 as the date for final inspection or that the Practical Completion Notice was valid under the DBCA. [41] On 11 August, 2009 lawyers for Avilake: withdrew the Practical Completion Notice, noting that the builder was still to obtain final certification; delivered a Notice of breach and suspension of works, asserting that the Tuckers were in breach of contract by failing to supply a spa bath which complied the Building Code of Australia and Australian Standards and able to be fitted to owner’s house. The Notice gave 10 days for the Tuckers to remedy the breach and advised that the builder may terminate the contract if the breach was not remedied. [42] On 17 August 2009, the solicitors for the Tuckers wrote to the solicitors for Avilake advising the spa bath is compliant with Australian Standards and enclosing what was said to be a copy of the spa bath specifications highlighting the fact “that it is compliant with Australian standards.” The solicitors for Avilake later said the letter was not received and when it was later sent said that there was no enclosure. The document referred to as the enclosure was an extract from AS3861 Australian Standard – Spa Baths. There was no reference in the documents to the model of spa bath purchased by the Tuckers or a statement from the manufacturer that the model in question complied. [43] The solicitors for the Tuckers sought immediate advice as to why the spa bath is said to be “non- compliant” and requested the Notice to Remedy Breach and Notice of Suspension of Works be withdrawn immediately. Avilake was put on notice that unless work recommenced the Tuckers would serve a Notice to Remedy Breach. [44] On 20 August 2009, Applied Building Approvals required Avilake to provide a Form 15 or certificate from the manufacturer stating compliance with current Australian Standards for the spa bath to be installed at the property. [45] On 21 August 2009 the solicitors for the Tuckers indicated by letter that the spa bath manufacturer would send through documentation regarding the spa bath’s compliance and raised other issues of concern, including a range of defects. [46] On 25 August 2009 the solicitors for the Tuckers wrote again referring to the request for a Form 15 and asserting that the manufacturer was not a competent person to give such a Form. The solicitors suggested that lack -- 7 of 32 -- 8 of a Form 15 was Avilake’s reason for suggesting the spa bath was non- compliant. [47] The letter asserts suspension of the works was unlawful as Avilake “cannot lawfully suspend works due to an issue with the spa bath.” [48] It was said: “As your client has refused to recommence works on our clients‟ property, despite numerous requests, we have been instructed to: 1. accept your client‟s conduct of suspending the building works as repudiation of the building contract; and 2. terminate the building contract.” Rights were reserved in relation to the Tuckers asserted claims against Avilake. [49] By letter dated 27 August 2009, the solicitors for Avilake said that the certifier, not their client required the Form 15. They pointed out that a Form 15 is supplied pursuant to regulation 46 of the Building Regulation 2006 to a certifier in relation to the design or specification of a product being installed as part of building works. They said that the building certifier would not issue a final certificate until he had the spa bath Form 15 compliance certificate. It was said that it was for this reason their client had been forced to suspend the works, as the job has not been able to proceed to practical completion. [50] It was denied that Avilake had received numerous requests to recommence works. [51] It was pointed out that the Notice to Remedy Breach had expired and had not been complied with. The termination of the contract was not accepted by Avilake. It was said that if the Tuckers took possession of the house there would be deemed practical completion. [52] In response on 31 August 2009 the Tuckers’ solicitor raised complaints in relation to defects and incomplete work and requested a time for a building inspector to attend site. [53] On 1 September 2009, Avilake’s solicitor again requested a Form 15 compliance certificate and said that upon receipt their client would lift the suspension, complete the works and issue a Notice of Practical Completion. It was said that the site remained in the possession of the builder. [54] On 8 September 2009 the Tuckers’ solicitors requested access to the property for an inspection and asserted breaches of contract by the builder. In relation to the spa it was said that the Redland City Council did not require a compliance certificate. It was submitted that Avilake could -- 8 of 32 -- 9 not lawfully suspend works pursuant to clause 16.1 of the contract as there are no issues with the spa bath. [55] On 9 September 2009 the Tuckers’ solicitors faxed to Avilake’s solicitors: An extract from AS3861 – 1991 Australian Standard – Spa Baths; SGS Australia Pty Ltd Test Report for “whirlpool baths and whirlpool spas”. [56] On 15 September 2009 the Tuckers’ solicitors requested by 16 September, advice as to when an inspection of the property could be carried out and sought advice by 16 September 2009 as to when Avilake intended to recommence work. [57] On 17 September the Tuckers forwarded a Notice of Intention to Terminate unless breaches were remedied within 10 days. The breaches and relevant clauses of the contract were described as: 1. Unlawfully suspending works (clauses 16 and 20.1(b)). 2. Breach of the builder’s warranty to carry out works in accordance with Plans and Specifications, by failing to lay concrete in the garage as specified in the plans and specifications (clauses 10.1(a)(iii) and 20.1(c)). 3. Unwillingness to compete and abandoning the works (clause 20.1(d)). 4. Failing to allow the owner access to the property despite three written requests (clause 7.4). [58] By letter dated 23 September 2009 the solicitors for Avilake denied any breaches as alleged by the Tuckers in their Notice. They referred to the earlier purported termination and noted they would proceed on the basis that the termination notice had been withdrawn. They said that their client agreed to the Tuckers having access by notice in accordance with the contact. They requested that the Tuckers give notice to Avilake in relation to the proposed access. Finally they advised the building certifier had advised the documentation supplied in relation to the spa bath was insufficient. [59] By letter dated 25 September 2009, the solicitors for Avilake wrote to the solicitors for the Tuckers enclosing a letter from the certifier asserting the amended plans were posted to the Tuckers on 16 March 2009 and that as the concrete slab in the plan has been deleted Avilake is not in breach of the contract. It was also said “We reiterate that your client is free to have access to the premises by notice to our client as per the contract. It is just a matter of your clients getting in touch with our client direct.” [60] By letter dated 29 September 2009 the solicitors for the Tuckers advised that the breaches had not been remedied and that their clients elected to terminate the building contract. They advised that their clients would take possession on 30 September 2009. -- 9 of 32 -- 10 [61] The Tuckers engaged a locksmith to give them entry to the house on 3 October 2009. [62] By letter dated 6 October 2009 Avilake’s solicitors rejected the termination on the basis that Avilake was not in breach. Avilake accepted the Tuckers’ conduct in purported termination and re-entry into possession as repudiating the contract and gave notice of termination of the contract. They advised that because the Tuckers had taken possession of the house when not entitled to do so, the works were deemed to have reached practical completion from the date of possession on 2 October 2009. I note the evidence of the Tuckers that entry into possession occurred on 3 October 2009. A tax invoice for the practical completion stage of $25,500.00 and a tax invoice for $3,502.57, being the balance allegedly owed under the preliminary agreement were delivered under cover of the 6 October 2009 letter. Tribunal Directions [63] On 12 May 2010, this Tribunal directed that a Queensland Building Services Authority inspector be appointed as an assessor to carry out an inspection of the defective work, the subject of the respondents counter claim, and provide a report to the Tribunal. [64] It was directed that the parties be bound by the findings of the Authority’s inspector. [65] On 21 September 2010 the Tribunal directed that the questions for determination by the Tribunal are: a. whether the Tuckers lawfully terminated the contract; b. whether Avilake was entitled to suspend the works because of the spa bath issue; c. whether the spa complied with Australian standards; d. if the spa complied with Australian standards, whether sufficient evidence was supplied to the applicant; e. the loss and damage that flows from the above determination. QBSA Report [66] As Directed, the Queensland Building Services Authority (QBSA), provided a report dated 23 June 2010. [67] Mr Jackson complains that he was excluded from attending the inspection conducted by the QBSA. [68] Mr Jackson estimated the cost to remedy the defects found by the inspector to be $842.00. A quote from another builder to perform the work for $638.00 was filed in the Tribunal. -- 10 of 32 -- 11 [69] The Tuckers filed in the Tribunal a quote from Gary Phyland, Builder, dated 7 March 2011 in an amount of $21,475.00 to complete tasks noted in the QBSA report. This quote included work which Avilake contends was excluded from the scope of work by agreement. Claim for balance of money under Preliminary Agreement [70] This issue was not isolated as an issue for determination in the Tribunal’s directions of 21 September 2010. However it is a live issue between the parties and it was fully ventilated at the hearing. [71] The Tuckers assert that the figure on the preliminary agreement was altered from $1,200.00 to $7,200.00. Mr Tucker in exhibit 10 says at paragraph 8 that it is his handwriting on the preliminary agreement from Item 2 down. He suggests that the figure $1,200.00 is in his hand and that a stroke has been added in Mr Jackson’s hand to the “1” to create a “7”. [72] No forensic handwriting expert was called by either party. [73] In evidence before me is a poor copy of the preliminary agreement (Annexure 2 to Exhibit 10), which shows the imprint of the special conditions on the second page having transposed onto the front page as a result of the self-duplicating paper used. That document was put into evidence by Mr Tucker. It is not possible to clearly discern either “7,200.00” or “1,200.00”. [74] I also have reference to attachment TJ A1 to the statement of Mr Jackson made 30 May 2011, Exhibit 3, which is said to be a copy of the owners’ white copy of the agreement, made by Mrs Jackson at the time of making the agreement, which does not have the transposed handwriting obscuring the number in question. Mrs Jackson was not called to give evidence. That document clearly shows the number “7,200.00”. Mr Jackson also attached a copy of the document as TJ 3 to Exhibit 1, however that is illegible. [75] The Tuckers did not tender their original white copy of the agreement and Avilake did not tender its yellow builder’s duplicate copy of the agreement. [76] I am unable without expert evidence to say whether the agreement had been altered to suggest the sum “7,200.00” rather than “$1,200.00”. [77] Mr and Mrs Tucker’s evidence was that $1,200.00 was the cost of preparing a plan to submit to the financier and that the cost of council approval and other work covered by the agreement was to be met on presentation of invoices. They both gave evidence that invoices were paid as presented. -- 11 of 32 -- 12 [78] Mrs Tucker gave evidence at the hearing that the claim for $3,502.57 was not particularized as to what work it covered. Mr Jackson did not give evidence as to what work was covered by the sum. [79] Other than an invoice from Butler Drafting dated 28 November 2008 forming part of Annexure 2 to Exhibit 10, no invoice from suppliers of services required by the preliminary agreement is in evidence. General descriptions of work appear on the receipts given by Avilake. Working from those documents it would appear that payment has been made for soil testing, drawings and specifications being prepared, an engineer’s letter (this may be a reference to footings design, although there is no evidence of this) and applications to the local authority for approval. [80] Those items of work appear to cover the work described in the preliminary agreement. Without invoices from the parties who performed the work, it is not possible to say whether all the work anticipated by the preliminary agreement was completed. I note the evidence of Mrs Tucker that the site survey was not conducted. This was not disputed. [81] I do not have sufficient evidence to make a finding as to whether the cost of work under the preliminary agreement was altered from “$1,200.00” to “$7,200.00”. I do not consider it necessary to make such a finding in any event because of the following finding I make. [82] It is a matter for the applicant to prove his entitlement to the balance of the sum he alleges was the agreed contract sum. He has failed to do so. It is not possible on the evidence to say what extent and value of work has been performed and paid for and what work, if any, has been performed but not paid for. [83] On this basis, I am not prepared to order the Tuckers to pay the sum alleged to be owed under the preliminary agreement. What variations to the work and what amendments to the plans were agreed? [84] The parties are in dispute about whether agreement was reached to amend the building plans to effect the changes reflected in the 5 March, 2009 request for amendment, made by Avilake to the Redland City Council and to Applied Building Approvals. [85] Mr Jackson asserts that the Tuckers agreed to the changes in order to keep the cost of the construction to the contract price of $170,000.00 in light of the need to install a treatment plant at the site. [86] He asserts that some changes required by the Tuckers were also made. He relied upon the authority to amend the plans referred to in the Preliminary Agreement for his power to effect the changes to the plans. The Tuckers deny giving approval for these amendments to be made and deny receiving a copy of the amended plans approved by Council. -- 12 of 32 -- 13 [87] During cross examination the solicitor for Avilake put it to Mr Tucker that he had agreed to omit certain items of work in order to cover the cost of installing the treatment plant required by Council, yet still keep the construction cost to $170,000.00. Mr Tucker denied making any such agreement. In particular he refused to agree under cross examination that he had agreed to drop the height of the front deck and delete the handrail and balustrade to the downstairs deck. [88] In his affidavit made 21 January 2011(Exhibit 10), Mr Tucker denied the allegations made by Mr Jackson at paragraph 22 of his statement made 23 November 2010 in relation to the alleged agreement to offset items of work to meet the cost of the treatment plant and the extra items of work required by the Tuckers. However, Mr Tucker did say that Mr Jackson was authorised to extend a wall behind the rumpus room and alter a rear door from the rumpus room. He notes that no written variation was provided for this work. [89] Mr Tucker denied that Mr Jackson was authorized to alter the building plans to reflect any changes. During the hearing he said that he had forgotten about the preliminary agreement and thought it was “done and dusted” by then. [90] Of particular significance is whether the plans required a concrete slab in the garage. [91] During the hearing Mr Tucker gave evidence he considered, based on the plans in his possession that he was to have a concrete slab laid. However, he admitted in evidence that he agreed to forgo the concrete slab. He said that he and his wife acquiesced to gravel being laid in the garage, to avoid confrontation with the builder. Mr Tucker also said in evidence that he thought they would ultimately have to pay for a concrete slab themselves. [92] On the basis of this evidence, I find that whether or not the Tuckers agreed to amend the plans, they subsequently agreed to omit the concrete slab in the garage and for there to be no consequent adjustment to the contract price. [93] The other area of significant dispute between the parties, which was canvassed thoroughly with Mrs Tucker at the hearing related to the kitchen. Mr Jackson asserts the cost allocated to the kitchen in his costings for the contract price was $3,500.00. All sets of plans show a basic layout for a kitchen. The list of inclusions which according to Avilake forms part of the contract provided for: Laminated post formed bench tops; Dishwasher opening; Laminated cupboard and pantry doors with handles from Builders standard range; -- 13 of 32 -- 14 Chrome flick mixer tap & 1.5 bowl stainless steel kitchen sink from Builders standard range; Electric hot plates and slide out range hood. [94] Mrs Tucker required a higher standard of kitchen and provided plans to Mr Jackson, which the cabinet maker quoted to install for $7,391.00. Mr Jackson required further payment to install the kitchen drawn up by the Tuckers. The Tuckers refused to pay any extra sum. In evidence at the hearing Mrs Tucker said that she was not happy but was prepared to accept the standard kitchen in fact installed because of the confrontational nature of Mr Jackson. The kitchen installed did not have overhead cupboards. Those cupboards were subsequently installed by the builder Mr Phyland. Mrs Tucker said in evidence that if Avilake had specified that the value of the kitchen was only $3,500.00, they would not have signed the contract. [95] Mr Calvert, the cabinet maker was unavailable to give evidence. His statement was tendered by Avilake with the consent of the Tuckers. Mr Calvert’s statement is exhibit 8. His evidence is that he quoted for the more expensive kitchen the Tuckers required, however, when that was unacceptable, he drew another plan which was closer to the budget at $4,251.50, but still had what the Tuckers wanted. The Tuckers signed the new plans and authorised proceeding with the work. There is no formal variation under the contract to reflect these changes. [96] On the basis of the unchallenged evidence of Mr Calvert, I find that the kitchen as constructed was more expensive than that anticipated in the original plans. I find that the kitchen was built to the agreed specifications of the Tuckers. I find that there has been no claim for additional cost by the builder. Accordingly, the dispute in relation to the kitchen does not sound in any loss or damage claim by either party. [97] Other evidence was given by the electrical contractor Mark Thomson of Macleay Island Electrical Pty Ltd. Mr Thomson was called by the builder as a witness. His company was engaged by Avilake to provide a basic electrical layout at the Alkira Street property. Macleay Island Electrical was paid $4,600.00 plus GST by Avilake. Mr Thomson’s statement, dated 30 May, 2011 (Exhibit 7), records that the Tuckers spoke to him directly about extra work which was performed on the basis of an agreement to pay him direct. He rendered an invoice for $2,320.84 to the Tuckers however that remains unpaid. [98] Neither party has made any claim for loss or damage relating to the electrical work. It would not appear to be relevant to the issues in dispute. Did the Tuckers lawfully terminate the contract? [99] This is the first of the issues directed to be determined as part of these proceedings. A determination on this issue requires a consideration and determination in relation to the other questions set out in the Directions, -- 14 of 32 -- 15 as to whether Avilake was entitled to suspend the works because of the spa bath issue; whether the spa complied with Australian standards and if the spa complied with Australian Standards, whether sufficient evidence was supplied to the applicant. [100] By facsimile transmission dated 17 September 2009 a Notice of Intention to Terminate dated 17 September 2009 was sent to the solicitors for Avilake. [101] The notice gave Avilake 10 days to remedy four nominated breaches of the contract by Avilake. [102] Relevant clauses from the general conditions of the contract are: 7.4 Owner’s right to inspect Works Upon written request by the Owner, the Builder must give to the Owner, or a person authorised by the Owner; (a) reasonable access to the Land, and (b) a reasonable opportunity to view any part of the Works, provided the Builder‟s performance is not obstructed. Access shall be by prior arrangement with the Builder and shall be during working hours or other times as agreed. 16. Suspension of the Works 16.1 Builder’s entitlement to suspend the Works The Builder may, without prejudice to any of the Builder‟s rights under this Contract or at law, suspend performance of the Works where the Owner; (a) … (b) Fails to comply with any of its obligations under Clause 11 … 16.2 Written notice to suspend the Works The Builder must immediately notify the Owner in writing of the suspension and the grounds for the suspension. The Date for Practical Completion Stage is deemed to be automatically extended by a period equivalent to the date the Builder gives its notice of suspension until the date the Builder recommences the Works on the Land. 16.3 Owner to remedy breach within 7 days The Owner must remedy the breach or breaches stated in any suspension notice given to the Owner in accordance with Clause 16.2 with seven (7) Days after receiving the notice from the Builder. 11. Owner’s Obligations 11.10 Materials supplied by Owner to be good and suitable for their purpose If the Owner supplies materials for use in the Works, the Owner must supply materials which are good and suitable for the purpose for which -- 15 of 32 -- 16 they are to be used and, unless otherwise stated in the Contract, materials are to be new. 20. Owner’s Rights To Terminate Contract 20.1 Owner’s right to serve notice of intention to terminate contract If the Builder: (a) … (b) unlawfully suspends the carrying out of the Works; (c) refuses or persistently neglects to remove or remedy defective work or improper materials, so that the Works are adversely affected; (d) is unable or unwilling to complete the Works or abandons the Contract; (e) is in substantial breach of this Contract (f) … the Owner may give a written notice to the Builder: (i) describing the alleged breach or breaches of the Contract by the Builder; and (ii) stating the Owner‟s intention to terminate the Contract unless the Builder remedies the alleged breach or breaches within ten (10) Days after receiving the Owner‟s notice. 20.2 If Builder fails to remedy breach, Owner may terminate Contract If the Builder fails to remedy the breach or breaches stated in any notice served by the Owner under Clause 20.1, the Owner may, without prejudice to any other rights or remedies, terminate this Contract by further written notice to the Builder, provided that such notice of termination shall not be given unreasonably or vexatiously and, if so given then any such notice of termination shall be null and void and of no force or effect. 20.3 Owner may not terminate Contract in certain circumstances The Owner may not terminate this Contract if the Owner is in substantial breach of this Contract. 22. Builder’s Rights to Terminate Contract 22.1 Builder’s right to serve notice of intention to terminate Contract If the Owner: (a)… (b) fails to comply with any of its obligations under Clause 11 … (a) fails to remedy any breach specified in a notice of suspension given under Clause 16 within ten (10) Days of receipt of that notice… the Builder may give a written notice to the Owner; (i) describing the breach or breaches of the Contract by the Owner; and -- 16 of 32 -- 17 (ii) stating the Builder‟s intention to terminate the Contract unless the Owner remedies the breach or breaches within ten (10) Days after receiving the Builder‟s notice. 22.2 If Owner fails to remedy breach, Builder may terminate Contract If the Owner fails to remedy the Owner‟s breach or breaches stated in any notice served by the Builder under Clause 22.1, the Builder may, without prejudice to any other rights or remedies, terminate this Contract by further written notice to the Owner. 22.3 Builder may not terminate Contract in certain circumstances The Builder may not terminate this Contract if the Builder is in substantial breach of this Contract. 22.4 Builder’s right to recover upon termination If the Builder terminates the Contract in accordance with this Clause, the Builder is entitled to recover from the Owner all loss, costs, expenses and damages in connection with the Owner‟s breach, and the termination, as if the Owner had wrongfully repudiated this Contract. … Alleged breaches [103] The Tuckers allege in their Notice of Intention to Terminate: “1. In breach of Clause 16 of the Contract (which outlines your entitlement to suspend works) by unlawfully suspending Works. This is on the basis that you had no entitlement to suspend Works pursuant to Clause 16 of the Contract. Clause 20.1 (b) of the Contract gives the Owners the right to terminate the Contract on this ground.” [104] By Notice dated 11 August, 2009 delivered to the Tuckers, Avilake asserted that in breach of Clause 11.10 of the contract, they had failed to supply a spa bath in accordance with the Contract which complies with the Building Code of Australia and Australian Standards and able to be fitted to the Owners’ house. [105] Avilake required supply of a spa bath in accordance with the Contract which complies with the Building Code of Australia and Australian Standards and able to be fitted to the Owners’ house. [106] Notice was given that work was suspended until the breach was remedied. [107] Avilake’s closing submissions assert that the contractual obligation to supply a spa bath which is “good and suitable for the purpose” means that the spa bath must comply with Part 1.2 of the Building Code of Australia -- 17 of 32 -- 18 which requires that materials used are “fit for the purpose for which they are intended.” [108] It submits that section 1.2.2 of the Building Code provides that evidence to support a performance requirement includes: (i) a report issued by a registered testing authority showing that the material has been submitted to testing to demonstrate suitability for use in the building; (ii) a current certificate of conformity or a current certificate of accreditation; (iii) a certificate from a professional engineer; (iv) a current certificate issued by a product certification body ; (v) any other form of documentary evidence that correctly describes the properties and performance of the material or form of construction and adequately demonstrates its suitability for use in the building. [109] I accept Avilake’s submissions and find that the Tuckers were obliged under clause 11.10 of the contract to supply a spa bath suitable or fit for its purpose and as a necessary incident of that obligation to provide evidence of that performance requirement. [110] Avilake submits that there are three schemes which evaluate and certify building products which will satisfy the requirements of the Building Code, including Standards Australia product marked Product Certification Scheme, the Codemark Product Certification Scheme and the Watermark Certification Scheme. [111] Avilake submits that there was no Australian Standards mark, no mark under the Watermark Certification Scheme and no mark under the Codemark Scheme affixed to the bath or on any document accompanying the bath to site. [112] The plumber contracted to install the spa bath Mr Nev Jones gave evidence and filed a statement (exhibit 6). His evidence was that the spa bath was delivered wrapped in plastic, but with no cardboard packaging. He said that there was no evidence of any mark on the spa bath to indicate compliance with Australian Standards. He observed only the work “Renovator” stamped on the spa bath. [113] Mr Jones’ evidence was that he had experience, as a plumber and plumbing inspector, of non- approved products with pipes blowing off after installation. He said it was irregular not to have some Australian Standards marking on a genuine product. [114] Mr Jones said that he was told by the plumbing inspector from Redland City Council that if he installed the spa he would be responsible for anything that went wrong with it. -- 18 of 32 -- 19 [115] I accept the evidence of Mr Jones as to the fact that there was no evidence of compliance with an Australian Standard on the spa bath or any accompanying documentation at the time it was delivered. I also accept the evidence of Mr Jackson on the same issues. [116] Avilake submits that the Plumbing Code of Australia calls up the Standards Australia “Manual for the Assessment of Risks of Plumbing Products”. A Level 1 risk applies to plumbing products whose non- compliance could have high impact on health and safety, infrastructure, water conservation and the environment. Such a product is required to bear a type one mark indicating full product certification. Level 2 applies to medium impact risk and is satisfied by a “type test” certification mark which must be on the product. [117] Mr Jackson gave evidence that he was particularly concerned by the lack of evidence of certification that the product was fit for its purpose, because of recent advice from the Building Services Authority about the risk of imported building products not complying with Australian Standards, his knowledge of a Public Health fact sheet in relation to the installation of spas and an article on the drowning of a young girl in a non-compliant spa. I accept Mr Jackson’s evidence as to the seriousness of the matter. [118] I accept that it was necessary for Mr Jackson and any plumber installing the spa to be satisfied the spa bath was certified as fit for its purpose in accordance with a recognized certification scheme or could be otherwise deemed fit for its purpose under the Building Code of Australia. [119] On this basis I find that it was appropriate and in accordance with the contract for Avilake to suspend work until a spa bath was supplied with evidence that it complied with the contractual and Building Code of Australia requirement, that it was fit for its purpose. [120] As to what was necessary to satisfy the builder the spa bath was fit for its purpose, on 20 August 2009, the building certifier, Applied Building Approvals required a Form 15 or certificate from the manufacturer stating compliance with current Australian Standards for the spa bath to be installed. [121] Avilake in its closing submissions refers to the Code of Conduct for Building Certifiers, issued by the Queensland Government Department of Infrastructure and Planning 14 November 2003 and section 56 of the Building Act 1975. [122] Mr Holley from Applied Building Certifiers gave evidence at the hearing, that he, not the Redland City Council, was responsible for certifying that plumbing products are fit for their purpose. He said that the Council are responsible for plumbing and drainage, not products. He said that he requires evidence that all spa baths he inspects meet Australian Standards. He said that the Building Act 1975 and Building Code of Australia set out the requirements that must be met. -- 19 of 32 -- 20 [123] I accept that in properly fulfilling his functions the building certifier must decide whether a design or specification complies generally with the Building Code of Australia and that materials used are fit for their purpose. [124] Avilake submits that pursuant to section 46 of the Building Regulation 2006 a competent person may give the building certifier a certificate that a building design or specification will if installed or carried out under the certificate, comply with the Building Assessment Provisions. [125] I accept that this is the legal position and that if required, a certificate must be in the approved form, which is a Form 15. I note and accept Avilake’s submission that a building certifier may request such a certificate from any person the building certifier has decided is competent to give the specification help. [126] Mr Holley said in evidence that he had recently received a Form 15 from the manufacturer of the spa bath, Lanark on another job in relation to another product for another builder. [127] By the time Applied Building Approvals wrote on 20 August 2009 requiring a Form 15 or a certificate from the manufacturer, the Tuckers had provided on 6 August 2011 an extract from the Australian Standards publication in relation to marking of products and an extract from the manufacturers product book suggesting the Renovator 1500 x 1500 or 1300 x 1300 x 500 had been type tested. It is not possible to tell if the model delivered by the Tuckers to site was the model referred to in the photocopy supplied. [128] Under cross examination at the hearing Mr Tucker said that the manufacturer’s product book sheet sent on 6 August 2009 related to a later model. He asserted that the model spa bath he and his wife purchased was exactly the same. I do not accept the evidence of Mr Tucker that the spa he and his wife purchased was exactly the same and therefore by implication must have the benefit of the type testing which appears to have been achieved for the later model. [129] Mr Tucker does not have the expertise to say what technical manufacturing differences may or may not be present from model to model. [130] I also note that under cross examination Mr Jackson denied that the spa bath depicted in the manufacturer’s product sheet was the same as the spa bath delivered to site. He said that the blowholes shown on the photograph were not part of the bath delivered to site. In response to a question from me, Mr Jackson said that the spa bath depicted in the photograph in the manufacturer’s product sheet differed from the one delivered to site in that the one at site had no Lanark marking and no blowholes. -- 20 of 32 -- 21 [131] On 21 August 2009 the solicitors for the Tuckers said that the spa bath manufacturer would send through documentation regarding the spa bath’s compliance. [132] On 9 September 2009 the Tuckers sent Avilake an extract from AS3861 1991 Australian Standard – Spa Baths and SGS Australia Pty Ltd Test Report for whirlpool baths and spas. It is not apparent from the face of the Test Report if the model of spa bath purchased by the Tuckers was tested and the significance of the testing to the Building Code of Australia requirement that the spa bath be fit for its purpose. [133] Under cross examination, Mr Tucker said that he did not know why the manufacturer had sent that test report. [134] On 21 September 2009, the Building Certifier wrote to Avilake saying it was not satisfied with these documents as there was no Form 15 signed by a competent person. It required information as to the brand of spa bath given the reference in the testing to “Whirlpool spa and baths”. In evidence Mr Holley said that he could not confirm the forms he was sent were for the right spa. He also said he rang Lanark but could not get a satisfactory response. [135] As to the Tuckers’ submissions on this point I note their submissions that the spa bath was delivered new and packaged. That is not the key point. I accept that the bath delivered was new and was at least wrapped in plastic. [136] The key point is whether the builder and the building certifier could be satisfied, at the time the contract was on foot, that the spa bath met Australian Standards as to fitness for purpose, by reference to an acknowledged testing and certification regime relevant to the spa, or by a certificate in Form 15 under the Building Regulation 2006 given by a competent person. I find that they could not be satisfied on the basis of the information provided to them by the Tuckers. [137] It is not relevant that Mr Holley may now accept that certain Lanark products comply with Australian Standards. Given the evidence, which I accept, that the plumbing inspectors’ role relates to plumbing and drainage work and not the status of particular plumbing products, I do not think it is relevant that the plumbing at the property complied with Council’s requirements. [138] I accept the evidence of Mr Holley, such that, as at 21 September, 2009 the Tuckers had not given any sufficient evidence as contemplated by the Building Code of Australia that the spa bath at the site was fit for its purpose. I find that as a necessary incident of their obligation under Clause 11.10 of the contract the Tuckers were obliged to provide that evidence. -- 21 of 32 -- 22 [139] I find that the Tuckers failed to comply with their obligations under Clause 11 of the contract and on that basis Avilake was entitled to give the Notice of breach and suspension of Works, on 11 August 2009. I find that Avilake did not unlawfully suspend carrying out of the Works which may have entitled the Tuckers to serve a notice of intention to terminate the contract under Clause 20.1(b) of the Contract. Accordingly this was not a ground on which the Tuckers could rely to give their Notice of Intention to Terminate the Contract. [140] The next breach alleged by the Tuckers in the Notice of Intention to Terminate is: “2. In breach of Clause 10.1 (a)(iii) of the Contract… “you will carry out the Works (iii) In accordance with Plans and Specifications” by failing to lay concrete in the Garage as specified in the plans and specifications, despite numerous requests by the Owners.” [141] I have previously found that the contract was varied by consent to omit the concrete slab in the garage. Further, I note the evidence of the QBSA in its report that the house has been built substantially in compliance with the final approved plans. I have found that there was to be no adjustment to the contract price as a result of the Tuckers agreement that no concrete slab was to be laid in the garage. [142] On this basis I find that Avilake was not in breach of contract by failing to construct a concrete slab in the garage. [143] I am conscious that the requirements of the contract and the Domestic Building Contracts Act 2000 (DBCA) have not been met in relation to preparation of a variation document to record the variation and agreement by the building owner. However, a failure to document the agreed variation does not mean that the variation was not agreed nor that the works were not constructed in accordance with the consequently changed plans and specifications. Section 92 of the DBCA provides that a failure by a building contractor to comply with a requirement under the Act in relation to a domestic building contract does not make the contract illegal, void or unenforceable. [144] I accept the evidence of Mr Jackson that the variations were necessary to keep the cost of the Works to the contract sum in light of Council’s requirements that a treatment plant be installed on site. Accordingly, I find that there is consideration for the variation. The significance of a failure to prepare a written variation document is the impact on the builder’s ability to recover the additional cost of varied work, unless the provisions of section 84 of the DBCA are met. [145] I find that failure to lay concrete in the garage is not a ground on which the Tuckers could rely to give their Notice of Intention to Terminate the -- 22 of 32 -- 23 Contract, because there has been no breach of contract by Avilake by failing to lay concrete in the garage. [146] The third asserted breach is: “3. In breach of the Contract in that you are unwilling to complete the Works and have abandoned the Works…”. [147] I do not consider there is any evidence that Avilake was unwilling to complete the Works or had abandoned the Works. [148] I have found that the works were validly suspended under the contract. The evidence reveals consistent efforts on the part of the builder and the certifier to obtain evidence of compliance of the spa bath with the legal and contractual requirement that it was fit for its purpose so that work might resume and the construction be completed. [149] In particular I note the letter from the solicitors for Avilake to the Tuckers’ solicitors dated 27 August, 2009 sent after the first purported termination of the contract by the Tuckers. It explained the need for a Form 15 and gave the legal basis for the request for the Form. It denied numerous requests to recommence work had been received. Indeed there was no such evidence given in this matter. By a further short letter sent on the same day the solicitors for Avilake said: “if your client would like to "unterminate” the Contract (and get the Certifier the Form 15 for the spa bath) I will get from my client a list of what is needed to be done to finish the house (and you can get instructions as to whether there are any other items)”. Again on 1 September, 2009, the solicitors for Avilake advised that upon supply of the Form 15 their client would lift the suspension, complete the contract works and give Notice of Practical Completion. It was said “in the meantime our client is in possession of the works pursuant to the contract.” [150] I find that Avilake was not unwilling to complete the Works nor had it abandoned the Works. Accordingly, I find that Avilake was not in breach of the contract for these reasons and that failure to complete or abandonment was not a ground on which the Tuckers could rely to give their Notice of Intention to Terminate the Contract. [151] The final breach asserted in the Tuckers’ Notice of Intention to Terminate is: “4. In breach of Clause 7.4 of the Contract which provides: “Owner‟s right to inspect Works Upon written request by the Owner, you must give to the Owner, or a person authorised by the Owner; (a) reasonable access to the Land; and (b) a reasonable opportunity to view any part of the Works provided your performance is not obstructed… -- 23 of 32 -- 24 In failing to allow the Owner‟s reasonable access to the property despite three (3) written requests. This has now become a substantial breach as you have received three written requests for access to the property…”. [152] I find that whatever the position might have been in relation to allowing the owners access to the site for an inspection prior to service of the Notice of Intention to Terminate, after receipt of the Notice, the solicitors for the Tuckers were advised on 23 September 2009 and 25 September 2009 that the builder agreed to the Tuckers having access and requested that the Tuckers contact the builder direct to give notice in relation to the proposed access. There is no evidence that the Tuckers did so. [153] Accordingly, I find that if there was any breach of the contract in this regard, it was remedied within the specified time so that this was not a breach on which the Tuckers could rely to terminate the contract. [154] I find that the Tuckers did not lawfully terminate the contract. In addition to the reasons for this finding set out above, I find that the Tuckers failed to supply evidence of the spa bath’s fitness for purpose and were themselves in breach of contract as at the date of their wrongful termination. Clause 20.3 of the contract provides that the owner may not terminate the contract if the owner is in substantial breach of the contract. The Tuckers conduct in this regard provides further evidence of wrongful termination. Findings [155] On the basis that I have found Avilake was not in breach of the contract as alleged in the first three grounds of the Notice of Intention to Terminate and in the case of access to the property, that any breach had been remedied; I find that the Tuckers did not lawfully terminate the contract as a result of failure by Avilake to remedy the breaches set out in the Notice. [156] I have found that Avilake was entitled to suspend the works because of the spa bath issue. [157] I make no finding as to whether the spa complied with Australian Standards as there is insufficient evidence before me to do so. I do not consider that is in any event germane to the issue of whether Avilake had validly suspended the works. The relevant issue is whether sufficient evidence had been supplied to Avilake as to compliance with Australian Standards. I have found that insufficient evidence was supplied to Avilake on this issue and that suspension of the works was justified pending receipt of that information. [158] For completeness, it is necessary to consider Avilake’s subsequent actions in terminating the contract. Avilake’s termination of contract -- 24 of 32 -- 25 [159] By letter dated 6 October, 2009 the solicitors for Avilake wrote to the solicitors for the Tuckers saying they were instructed “to accept your clients‟ conduct in purported termination and re-entry into possession as repudiating the contract and to give on its behalf notice of termination of the contract. Your clients have taken possession of the house when not entitled to do so. Accordingly pursuant to clause 17.9 of the contract the works are deemed to have reached practical completion from the date of possession on 2 October, 2009.” [160] I find that the conduct of the Tuckers in delivering a Notice of Intention to Terminate when there was no default in relation to three of the four grounds of breach nominated and proceeding to terminate when one ground of possible breach had been remedied, together with taking possession of the house, amounts to a repudiation of the contract. [161] Repudiation involves a party renouncing his liabilities under the contract by evincing an intention to no longer be bound by the contract.i [162] I find that Avilake, by the letter of 6 October 2006 has accepted the repudiation and terminated the contract. That termination has been effected in accordance with a common law right. The contract at clause 22.2 specifically recognises that termination pursuant to the mechanism set out in the contract is “without prejudice to any other rights or remedies”.ii By entering into possession of the house the Tuckers have made further performance of the contract by the builder impossible, leaving Avilake with no alternative but to accept the repudiation and terminate the contract.iii Loss and Damage [163] I have found that the contract was terminated on 6 October, 2009, when Avilake accepted the Tuckers’ repudiation of the contract arising out of their wrongful termination and taking possession of the property. Avilake is therefore entitled to recover loss or damage which had accrued at that time, including any debt owing at the time of termination. Dixon J in McDonald v Dennys Lascelles Ltd explained the consequences of termination on existing contractual rights as follows: “When a party to a simple contract upon a breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from the further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected.”iv -- 25 of 32 -- 26 [164] Apart from the sum claimed under the preliminary agreement, which has been dealt with in this decision, Avilake claims: the practical completion instalment of $25,500.00; less the sum of $638 being the quote of Mr Hawkins for repair of minor defects; plus interest on the total outstanding amount pursuant to Clause 11.9 of the Contract and Item 19 of the Appendix at 15% per annum calculated on a daily basis, calculated from the date of possession on 3 October, 2009 to the commencement of the trial on 12 September, 2011 and continuing until payment is made. [165] Avilake relies upon clause 17.9 of the Contract to establish that its entitlement to the final payment under the contract at practical completion arose upon the Tuckers taking possession of the house on 3 October 2009. [166] Clause 17.9 provides that: “If the Owner takes Possession of the Works, or any part of the Works, when not entitled to do so under this Contract, the Works are deemed to have reached Practical Completion Stage on the date of Possession and the Owner is liable to the Builder for any loss or damage arising as a result.” [167] The Tuckers admit to taking possession of the works on 3 October 2009. They took possession without the consent of the builder in circumstances which I have found amount to a repudiation of the contract. Accordingly, I find that the Tuckers were not entitled to take possession and there has been deemed practical completion under clause 17.9 of the contract. [168] Avilake has not claimed damages for breach of contract. It has claimed money owing under the contract. That is, it has claimed a debt. The significance of such a claim is that the amount of the debt is a fixed and certain sum, due and owing under the contract. [169] Having found that deemed practical completion occurred under the contract, it is necessary to determine whether the practical completion stage payment became payable when that occurred. [170] Avilake must satisfy the requirements of the contract and section 67 of the DBCA to demonstrate an entitlement to payment of the practical completion stage payment. [171] Clause 11.6 of the contract provides that the “Builder is entitled to claim payment of the Contract Price progressively, on completion of the stages set out in Part D of the Appendix to the Schedule. A progress claim must be in writing, certify that the Works have been completed to the relevant stage and set out the amount to be paid to the Builder in accordance with Clause 11.7”. -- 26 of 32 -- 27 [172] Part D of the Appendix refers to the “Practical Completion Stage” and a value of $25,500.00. [173] Practical Completion Stage is defined in the contract to mean: “that stage of the Works when the Works are completed in accordance with the Contract and all relevant statutory requirements, apart from minor omissions or minor defects, and the Works are reasonably suitable for habitation.” [174] Clause 17.1 of the contract provides that upon reaching the practical completion stage, the builder must give to the owner the final progress claim and a practical completion stage notice stating the date the Works reached practical completion stage and providing for a final inspection of the works. [175] Clause 17.3 provides that if the owner fails to attend the inspection the practical completion stage payment is due and payable. [176] Clause 17.4 provides that if the owner agrees the works are complete and that there are no minor defects, the claim becomes due and payable. [177] Clause 17.5 provides that if at the final inspection the owner claims defects or the works are incomplete, the builder must give the owner a defects document and pursuant to clause 17.6 attend to rectification or completion of agreed items. [178] However, clause 17.7 provides that on giving the defects document to the owner and notwithstanding that the practical completion stage may have been reached with minor omissions or defects, the owner must pay the final progress claim to the builder in accordance with the Contract. [179] Finally, if the amount claimed is disputed the owner may pay the claimed sum into the Master Builders’ Trust Account, take possession and then resolve the dispute. [180] The relevance of the contractual obligations as to a date for inspection and delivery of a defects notice by the builder is that, under the terms of the contract, the practical completion stage payment does not become due and payable until these steps have been undertaken. The amount may not even become due and payable under the contract, if the amount if disputed and paid into the Master Builders’ Trust Account. [181] In other words it does appear that the structure of the contract is that mere practical completion or deemed practical completion is a trigger for payment of the practical completion stage payment without further steps having been taken. [182] As to Avilake’s statutory obligations upon claiming the practical completion stage payment, section 67 of the DBCA provides that a building contractor must not demand all or part of the completion payment -- 27 of 32 -- 28 unless the practical completion stage has been reached. If the owner claims the stage has been reached with minor defects or minor omissions a defects document must be given by the builder to the owner. The Act is cast in mandatory terms. The evidence reveals that the Tuckers had been complaining of defects and incomplete work for a considerable period of time before the contract was terminated. [183] By letter dated 6 October 2010, Avilake terminated the contract and under cover of that letter delivered an invoice for the practical completion stage payment. It is a nice question as to whether the invoice was delivered before or after the termination. If it was delivered after communication of acceptance of the Tuckers’ repudiation of the contract and consequent termination of the contract, the practical completion stage payment claim may not have been made under the contract and may not be enforceable. [184] In any event, Avilake did not prior to termination set a date for inspection of the property and deliver a defects document as required by the contract and section 67 of the DBCA. An earlier purported delivery of a practical completion notice and nomination of a time for inspection was withdrawn some time before. [185] Avilake made an unequivocal decision to accept the Tuckers’ wrongful repudiation and to terminate the contract. [186] Similar issues arising out of the same form of contract have been considered in the case of Martin v Cahillv. Member Armitage of the former Commercial and Consumer Tribunal, said at paragraph 160: “The operation of clause 17.9 of the GCOC (general conditions of contract) does not give rise to a demand being made for payment of all or part of the „completion payment‟ or an entitlement for the applicant to receive all or part of the „completion payment‟ as a consequence of the respondent having taken possession of the works when not entitled to do so under the Contract. Nor does it give rise to an obligation for the respondent to pay all or part of the „completion payment‟ to the applicant irrespective of whether or not the requirements of section 67 had been satisfied. Clause 17.9 of the GCOC provides that the respondent is liable to the applicant for any loss or damage arising as a result of her having taken possession of the works when not entitled to do so under the Contract. There is a clear distinction between a right to monies owing under a contract, such as a progress payment or completion payment, and a right to damages for breach of contract. I consider that section 67 of DBCA applies to the former, and not the latter. Although I accept that the natural meaning of section 67 of the DBCA may operate to prevent a builder from being able to validly demand or receive a completion payment under the contract in circumstances where an owner has taken unlawful possession of the works before the builder is able to meet the requirements of section 67, I am unable to accept that section 67 of the DBCA operates to also prevent a builder from claiming loss or damage suffered as a result of -- 28 of 32 -- 29 having been denied the ability to validly demand or receive a completion payment due to the unlawful conduct or breach of contract of the owner. Such a construction is not supported by the plain words of section 67 and would lead to the absurd result of permitting an owner to take advantage of the non-fulfilment of the section 67 pre- conditions in circumstances where the owner‟s conduct has denied the builder the ability to fulfil the statutory requirements.” [187] As its claim is currently cast Avilake cannot succeed against the Tuckers for the amount of the practical completion stage payment, because the practical completion stage payment was not due and payable at the date of termination. The payment was not due and payable because the requirements of both the contract and section 67 of the DBCA had not been met in relation to delivery of a defects notice by Avilake to the Tuckers. I have considered the principle which “exonerates one of two contracting parties from the performance of a contract when the performance of it is prevented and rendered impossible by the wrongful act of the other contracting party”vi. It is arguable that the Tuckers conduct in wrongfully repudiating the contract meant that Avilake could not fulfil the contractual requirement to arrange an inspection and deliver a defects notice and that the Tuckers thereby lost the right to the defects notice, with the result that the practical completion payment became due and payable. Whatever view one takes of that argument, I do not think it applies in the case of a statutory obligation such as that set out in section 67 of the DBCA. I agree with the reasoning of Member Armitage in Martin v Cahill. [188] Although Avilake may have a claim for damages for breach of contract against the Tuckers, I am unable to determine such a claim because it has not been formulated as part of these proceedings. [189] For these reasons, I find that Avilake fails in its claims for the practical completion stage payment of $25,500.00 and interest. [190] Upon the same principle as set out earlier from McDonald v Dennys Lascelles Ltd, the Tuckers are entitled to pursue a claim for damages which has accrued up to the date of termination of the contract. The Tuckers have claimed in their Amended Response and Counter- application: (a) $5,478.00 for rectifying paint work; (b) $1,500.00 for reinstallation of the tank; (c) $2,600.00 for enclosing underside of the property and installing one entry door; (d) $2,100.00 for installation of handrails; (e) Rectification work recommended by Rod Hall – cost to be advised; (f) $1,245.00 for rectification of rain-water connection; and (g) $800.00 for building inspection report. -- 29 of 32 -- 30 [191] The Tuckers later filed a Scott Schedule which set out claims for rectification of defects and completion of work, consistent with the BSA report. The Tuckers rely upon a quote from Gary Phyland, Builder, dated 7 March 2011 in a total amount of $21,475.00. That sum includes $10,583.00 for rectification work; $3,751.00 for installation of head flashings for all external windows and doors and $7,141.00 for installation of a concrete slab, wall linings and an exit door in the garage. [192] Avilake estimated the cost of rectification of defects, excluding head flashing for external windows and the slab, linings and door in the garage, for which it denied any liability, in the amount of $842.80. Avilake filed a quote from Glen Hawkins Constructions Pty Ltd, for rectification of the same defects, in an amount of $638.00. [193] Avilake’s evidence was that upon provision of a Form 15 compliance certificate for the spa bath and subsequent lifting of the suspension, it would complete the contract works and give a notice of practical completion, including a proposed time and date for a final inspection in relation to defects (see attachment TJ 44 to the statement of Tim Jackson dated 23 November, 2010). [194] I find that the effect of the Tuckers’ repudiatory conduct in wrongful termination of the contract and taking possession of the house, which gave rise to termination of the contract; was that Avilake was prevented from completing the work, inspecting the work, preparing a defects list and attending to rectification of agreed defects. [195] I find that it was the Tuckers’ own conduct which resulted in them having a range of defects and incomplete work at the house exposing them to the cost of rectification and completion.vii I find that at the date of termination of contract, no cause of action for breach of contract arising out of incomplete or defective work had accrued. [196] Clause 19 of the contract provides that the builder must rectify defects and omissions in the works which become apparent and are notified to the builder during the defects liability period. Provided the works have been brought to practical completion, there is no contractual obligation to attend to defects at any earlier time. In the absence of a contrary provision in the contract the builder is not obliged to rectify defective work at the time when it becomes apparent but may wait until the work has reached practical completion or final completion.viii [197] On the basis that at the date of termination of the contract: the works were lawfully suspended; there was no obligation to attend to completion of work during a period of suspension; the time for rectification of defects during the defects liability period had not arisen; and -- 30 of 32 -- 31 the Tuckers’ repudiation of the contract prevented performance of the contract by Avilake. I find that there was no breach of contract by Avilake which might give rise to an entitlement by the Tuckers to damages for the cost of rectification or completion of works. [198] Accordingly, the Tuckers’ counter-application fails. Building Certificates [199] The Tuckers submit that they have suffered loss and damage in that they are unable to complete the house as Avilake will not release certification for various building work. [200] Under cross examination, Mr Phyland, the builder who undertook further work at the request of the Tuckers upon termination of the contract with Avilake, said that he had received the sum of $20,000.00 for the performance of construction work, but was unable to finalize the job because he did not have the relevant certificates. He referred to the energy efficiency certificate, framing certificate and foundations certificate. The solicitor for Avilake put it to Mr Phyland that the certificates were held by the Certifier, but would not be handed over until the final instalment had been paid to Avilake. Mr Phyland agreed that was usual and that he himself only hands over certificates when paid. [201] The claim made by the Tuckers for provision of the relevant building certificates was not raised at a time which enabled Avilake to call evidence or to respond. In these circumstances I am disinclined to make the orders sought. The Queensland Building Services Authority Act 1991 empowers the QBSA to direct a builder to rectify or complete work. Provision of relevant certificates forms part of the completion of work. It is possible that the QBSA may on application to it give consideration to requiring provision of the certificates by Avilake to the Tuckers. Costs [202] Each party seeks costs. Avilake seeks costs on an indemnity basis. [203] Avilake has submitted that consequent upon the determination of the Tribunal on the merits, it reserves its rights to make a further submission on costs on the basis of the QCAT Act and Rules. [204] I therefore order that Avilake file and serve any further submissions in relation to costs by 13 January 2010; that Mr and Mrs Tucker file and serve any further submissions in relation to costs by 27 January 2012; that Avilake file and serve any reply by 7 February 2012. Orders -- 31 of 32 -- 32 [1] I order that: (a) the applicant’s application is dismissed; (b) the respondents counter-application is dismissed; (c) the applicant file and serve any further submissions in relation to costs by 13 January, 2012; (d) the respondents file and serve any further submissions in relation to costs by 27 January, 2012; and (e) the applicant file and serve any reply by 7 February, 2012. i Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-626. ii Amann Aviation Pty Ltd v The Commonwealth (1990) 92 ALR 601. iii White and Carter (Councils) Ltd v McGregor (1962) AC 413. iv McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477. v [2008] QCCTB 37. vi Panamena Europea Navigacion (Compania Limitada) v Frederick Leyland & Co Ltd [1947] AC 428 cited with approval by Muir J in QLine Interiors Pty Ltd v Jezer Construction Group Pty Ltd & Ors [2002] QSC 088. vii Ibid. viii Lexis Nexis Butterworths, Halsbury‟s Laws of Australia, Vol 3 (2) (as at 28 December, 2011), 65 Building and Construction, “Contractor‟s Liability to Proprietor” (65-1505). -- 32 of 32 --