1. The Respondent pay the Applicant the amount of $7, within ninety (90) days.

Transcription

1 CITATION: PARTIES: APPLICATION NUMBER: MATTER TYPE: The Watermark Body Corporate Community Title Scheme v Jon Diplock trading as Diplock Building Service [2015] QCAT 97 The Watermark Body Corporate Community Title Scheme (Applicant) v Jon Diplock trading as Diplock Building Service (Respondent) BDL Building matters HEARING DATE: 27 June 2014, 7 August 2014 HEARD AT: DECISION OF: Townsville Member Pennell DELIVERED ON: 20 March 2015 DELIVERED AT: ORDERS MADE: CATCHWORDS: Townsville 1. The Respondent pay the Applicant the amount of $7, within ninety (90) days. DOMESTIC BUILDING DISPUTE licensed building contractor low rise builder s licence no regulated contract scope of works exceeded the regulated limit dispute over actual repair costs Queensland Building and Construction Commission Act 1991, Schedule 2 Queensland Building and Construction Commission Regulation 2003, s 11, Schedule 2 Part 4.2 Domestic Building Contracts Act 2000, s 3, s 26, s 30, Schedule 2 Body Corporate and Community Management Act 1997, s 10 Queensland Civil and Administrative Tribunal Act 2009, s 28, s 95

2 2 APPEARANCES and REPRESENTATIONS (if any): APPLICANT: RESPONDENT: Mr M A McNabb Mr J S Diplock and Mr M W Diplock REASON FOR DECISION Introduction [1] The Watermark 1 ( the property ) is a four storey residential waterfront property located on the Strand at Townsville with views of Cleveland Bay and Magnetic Island. [2] The Applicant is The Watermark Body Corporate ( the Applicant ). The Body Corporate is a community titles scheme recorded by the registrar 2 and refers to the individually owned areas of the property including real property and common property. Upon purchasing their respective lots within the property, each owner automatically became a member of the body corporate, and collectively, all the property owners within the community titles scheme make up the body corporate. [3] The Applicant s role is defined in the Body Corporate and Community Management Act 1997 ( BCCM Act ). The BCCM Act provides the necessary powers for the Applicant to carry out its duties, which include the general responsibility to maintain, manage and control the common property for the benefit of the owners. [4] Jon Diplock trading as Diplock Building Services ( the Respondent ) was at the relevant time the holder of a Builder s licence and was carrying on a building service in partnership with his brother, Mark Diplock. The Respondent s licence was issued by the Queensland Building and Construction Commission ( the QBCC ) in the class of Builder Low Rise. 3 This class of Builder s licence will be revisited later in these reasons. Background [5] In about April May 2012 the Applicant engaged the Respondent to carry out building repair services to Unit 110 of the property, being the Penthouse on the top floor. The initial discussions between the parties occurred over the telephone and at a later face-to-face meeting. There was a general verbal agreement between the parties about what work was to be carried out, and the Respondent provided to the Applicant a quote dated 8 May Is also known for its Bar and Restaurant (separate entities to the residential property). Body Corporate and Community Management Act 1997 s 10. Respondent s Response, Annexure A. Exhibit 1.

3 3 [6] Under the heading SCOPE OF WORKS, the quote outlined that work was to be undertaken in the bedroom, kitchen, lounge/dining room and main bedroom. The costs of the works was to be $15,678. [7] In late May 2012 the Respondent commenced work on the property and shortly thereafter the parties agreed to make a variation to the scope of the works. Those variations have been described by the Respondent as Variation 1 and Variation 2. [8] The scope of works for Variation 1 5 related to the ceilings in the kitchen, lounge room and bedroom in the Penthouse which would be levelled, replaced in part, patched, and the stain removed and repainted. The work was described as Dining/lounge/hallway areas (a) (b) (c) (d) (e) (f) (g) (h) Removal of approximately six square metres (6m²) of gyprock ceiling from the dinning/lounge area; Levelling of the ceiling battens by removal and replacement of batten clips; Stain sealing the kitchen, lounge and hallway ceilings of approximate area of 120 square metres (120m²); Repeated treatment of areas as described in (c) above on 90 square metres (90m²) on four additional occasions; Plaster an area of the ceiling of approximately six square metres (6m²) and skim coat this area on four additional occasions; Prepare and paint a wall approximately 12 square metres (12m²); Remove and dispose of parts of a gyprock wall measuring approximately four lineal metres; and Reconnect a light. Main bedroom (i) (j) (k) (l) Re-screw, patch and plaster the ceiling; Stain seal the ceiling, approximate area 16 square metres (16m²); Prepare and paint ceiling, area approximately 16 square metres (16m²); and Seal around the window. Back bedroom (m) (n) (o) Re-screw some of the ceiling; White set and patch approximately 10 square metres (10m²) of the ceiling; Stain seal an area of the ceiling approximately 16 square metres (16m²); 5 Respondent s Response, Annexure G1.

4 4 (p) (q) (r) (s) Prepare and paint an area of the ceiling approximately 16 square metres (16m²); Scrape back the plaster on approximately two lineal metres of a wall; Plaster patch a wall; and Prepare and paint an area of a wall approximately 13 square metres (13m²). [9] The scope of works for Variation 2 involved the Respondent carrying out repairs to the roof. A plumbing contractor was engaged by the Respondent to effect those repairs, described as (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) an on-site visit to determine the design and measurement of the flashings required; purchase of the flashings and materials; liaison with the Applicant for site access; the removal of the roofing screws; the peeling back of the roofing sheets; the removal of the old silicone; gaining access to the ceiling cavity; the repair and connection of the gutter overflow; the supply of two tradesmen to fit the flashings; the supply and fitting of the flashings to the underside of the roof sheeting; and an attempt to prevent water from tracking back underneath the roof sheets. [10] An invoice relating to the repairs for Variation 1 ( the first invoice ) was provided to the Applicant for the amount of $14, The Applicant subsequently paid this amount on 22 June [11] Between May and October 2012 the Respondent and a representative from the Applicant carried out inspections of the roof repairs. On 8 November 2012 the Respondent issued an invoice ( the second invoice ) to the Applicant for the amount of $3,465 for repairs carried out to the roof. The Applicant paid that invoice on 13 November [12] No quote was provided by the Respondent to the Applicant with regards to Variation 2, and there was no regulated contract, variation or otherwise entered into between the parties. Variation 2 became part of the scope of works and the Respondent informed the Applicant that 40 lineal metres of flashing had been installed on the roof.

5 5 Applicant s case [13] The Applicant does not dispute that the roof had issues, and nor does it argue what is or might have been perceived to be in defects in the Respondent s work. The dispute is only about being charged for work that had not been carried out, or had not been completed. The Applicant is willing to pay for the work actually carried out, but does not accept that it should be burdened with an expense for work that had never been undertaken by the Respondent. [14] With regards to Variation 1, the Applicant s position is that the Respondent issued an invoice claiming that it had replaced 60 square metres of plasterboard in the ceiling. The allegation by the Applicant is that the billing for the total size of the gyprock plasterboard in the ceiling was unacceptable as the installation of the gyprock was never undertaken and there was a gross exaggeration on the amount of square metres actually completed. 6 [15] The Applicant says that the Respondent s two invoices equated to $18, for the work on the property. This amount was paid before any final inspection was carried out. The Applicant further says that the costs for the work which the Respondent invoiced was far in excess of the actual repair work which was undertaken. [16] A number of subsequent inspections were carried out by the Applicant s representatives. The Applicant alleged that despite being invoiced by the Respondent for replacing approximately 60 square metres of plasterboard for Variation 1, there was no evidence that this amount of work had been carried out, although the Applicant was willing to concede that the Respondent did carry out work on a small portion of that area. [17] The Applicant was unable to provide the Tribunal with a firm monetary amount which it relied upon for the cost of the work carried out in Variation 1, but did pay another contractor $7,000 to complete the scope of works. [18] With regards to Variation 2, the Applicant s claims to have been told by the Respondent that 40 lineal metres of flashing had been installed on the roof. The Applicant disputes that figure and says that their inspection of the roof established that only eight (8) lineal metres of flashing had been actually installed 7. [19] Payment of $3,465 was made for Variation 2, which the Applicant claims was in excess of the actual costs that should have been billed. The Applicant sought to rely upon an dated 25 January 2013 from VP Roofing who quoted a figure of $2,596 for the same work carried out by the Respondent, an actual difference of $ Transcript 27/06/2014 at page 1-26; lines Transcript 27/06/2014 at page 26; lines and 07/08/2014 at page 25; lines 1 23.

6 6 Respondent s case [20] At the relevant time the Respondent was operating as a business and undertaking repairs on behalf of various Body Corporates, as well and undertaking the occasional contract to rectify repairs funded by insurance claims. The partnership ceased at the end of [21] Ultimately, the Respondent seeks that the Applicant s application be dismissed. In support of that position, the Respondent contends that the parties entered into a contract for the Respondent to carry out the scope of works, which the Respondent says was partly written and partly oral. [22] In so far as the oral part of the contract, the Respondent says that there were various discussions with the Applicant s representatives, Seimon Griffiths and Mark McNabb. In so far as the written part of the contract, the Respondent relies upon a quote provided to the Applicant 9. The issue of building contracts will be revisited later in these reasons. [23] The Respondent further contends that the work was carried out as per the details on the quote, along with the additional work carried out in what is referred to as Variation 1 and Variation 2 and the value of all of that work was the amount invoiced to the Applicant. [24] The Respondent says that the scope of work carried with regards to Variation 1 10 are as described in paragraph [8] above and the invoice billed to the Applicant was less than his original quote 11. [25] With regards to Variation 2, the scope of works included 12 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) an on-site visit to determine the design and measurement of the flashings required; purchase of the flashings and materials; liaison with the Applicant for site access; the removal of the roofing screws; the peeling back of the roofing sheets; the removal of the old silicone; gaining access to the ceiling cavity; the repair and connection of the gutter overflow; the supply of two tradesmen to fit the flashings; the supply and fitting of the flashings to the underside of the roof sheeting; and an attempt to prevent water from tracking back underneath the roof sheets Transcript 27/06/2014 at page 1-48; lines Exhibit 1. See Respondent s Response at Annexure G1. Transcript 07/08/2014 at page 2-23; lines Respondent s Response, Annexures G1 and J1.

7 7 [26] The Respondent accepts that there were no daily time sheets maintained for the period when the work was carried out, and nor was there any other record kept of the amount of hours spent on the scope of works. 90% of the people on-site were subcontractors and not employed on an hourly rate 13. The Respondent also accepts that no evidence could be produced to validate the work said to have been carried out by sub-contractors, and indeed if a plumbing contractor had carried out the work on the roof, there was no evidence produced to the Tribunal as to what work was performed by the plumbing contractor. [27] The Respondent said that he was able to ultimately arrive at the amount billed to the Applicant after a calculation was carried out of the labour costs, costs of materials and the number of hours from invoices that he had received from the contractors, as well as placing a profit margin on the top of this amount. 14 [28] On an invoice dated 8 November 2012 the Respondent billed the Applicant $3,465 for work described as 15 Repair roof lift roof sheets. Repair and connect gutter overflow as to prevent water running down internal walls as was the case. Install flashings along edge of sheets. Remove and try to fix previous repairs. [29] No reference was made on that invoice as to the quantity of flashings installed. Evidence at the Hearing [30] The procedure for a proceeding is at the discretion of the Tribunal. The Tribunal is not bound by the rules of evidence; 16 however the Tribunal must act fairly and according to the substantial merits of the case. [31] In observing the rules of natural justice, the Tribunal may inform itself in any way it considers appropriate and must also ensure, as far as practical, that all relevant material has been disclosed so that the Tribunal is able to reach a decision on the relevant facts. [32] Evidence in a hearing may be given orally or in writing; and if the Tribunal requires, must be given on oath or by affidavit 17 and the Tribunal must allow a party a reasonable opportunity to call or give evidence; and examine, cross-examine and re-examine witnesses; and make submissions to the Tribunal. Both parties were given that opportunity. [33] The Applicant called evidence from Mark Andrew McNabb, Barbara Anne West, Seimon Griffiths and Ernest Arthur Nicholls Transcript 27/06/2014 at page 1-15; lines Transcript 27/06/2014 at page 1-15; lines Variation 2 invoice. Queensland Civil and Administrative Tribunal Act 2009 s 28. Ibid s 95.

8 8 Mark Andrew McNabb [34] At the relevant time, Mr McNabb was the holder of a Builder s licence described as Builder open class, Licence grade Site Supervisor 18. He is a member of the body corporate and advocated on behalf of the Applicant. He said that after the Applicant engaged the Respondent to carry out the scope of works 19, a quote was provided. The extent of the scope of works was to repair water ingress damage caused to the Penthouse from a leaking roof. [35] Upon meeting the Respondent on-site, they discussed the scope of works as there was only a small amount of plasterboard that had to be cut out. Part of a ceiling was drooping and the ceiling hangers required readjusting. Some patching and painting was also required in the rest of the areas. [36] The Respondent was on-site and carried out some work, and was subsequently paid by the body corporate manager. The scope of works was then inspected and found not to be completed in accordance with what was billed. The Applicant considered that the Respondent had over charged for the work. Barbara Anne West [37] Ms West is the Chairperson for the body corporate. Her evidence solely related to the receipt of the Respondent s invoice and the subsequent payments. The remainder of her evidence did not assist the Tribunal in determining this matter. Seimon Griffiths [38] Ms Griffiths was responsible for making the payments of the Respondent s invoices. She said 20 that once an invoice was received she forwarded it on to the body corporate committee. She waited about 10 days and then telephoned Mr McNabb to confirm if payment could be made. Mr McNabb asked her if the scope of works had been completed, and if so, then the Respondent had to be paid. She allowed a further 10 days before effecting payment of the invoice. Ernest Arthur Nicholls [39] Mr Nicholls is a retired builder and a committee member of the body corporate. He carried out his own investigation into the work completed by the Respondent. He saw that the ceiling in the areas of the kitchen, lounge and dining room hadn t been touched, and nor was the ceiling in the main bedroom. He added that he only saw evidence of one square metre of ceiling in those areas having been replaced. He went onto say that the wall of the back bedroom had not been touched, but the Respondent s Response, documents C1 C5. Transcript 27/06/2014 at page 1-9; lines Transcript 07/08/2014 at page 2-17; lines

9 9 Respondent had made an attempt to replaster an area of water damage to a wall, but did not replace the gyprock. [40] When he inspected the roof he saw that the box gutter was bodgied up with silicone and the overflow spouting was leaking. He added that the flashing replaced by the Respondent measured about 8 metres in length 21 and not the 40 metres as quoted. The Respondent did not challenge this evidence. [41] Mr Nichols took a series of photographs 22 of the back bedroom wall of the Penthouse, along with photographs inside of the ceiling and the roof. He said that the photographs show that instead of replacing the portion of the bedroom wall, the Respondent just filled the hole with bog. The photographs taken inside the ceiling show a distinction between the colourings of the glue used. The blue glue was the original glue used on the gyprock sheeting and the pink coloured glue is the new glue used by the Respondent. What prompted him to take the photographs was to show that the ceilings had not been taken out as the Respondent billed for. [42] Mr Nicholls went on to say that another contractor was engaged because the Respondent had not completed the scope of works, being the walls, the ceilings and the roof. He said that it cost the Applicant $7,000 to repair the scope of works to an acceptable standard 23. [43] Although no evidence was provided by the Applicant to support this amount, the Respondent appeared to accept the amount by commenting that he had heard that the Applicant paid $10,000 to another contractor for the subsequent rectification 24. Report of Shane Grant [44] The Applicant had filed a single page typewritten report under the hand of Shane Grant trading as Mister Patchit Plastering Services of Townsville. The Tribunal is not assisted by this report as it was unsigned and unsworn, and Mr Grant was not called to give evidence. The Respondent Mr Jon Diplock [45] Mr Diplock gave evidence. He said that work was carried out on the ceiling, such as putting extra hangers in and by adjusting the ceiling. He added that instead of replacing the ceiling, it was stain sealed. When queried about the notation on Exhibit 1 lounge/dining room, remove, dispose of and replace gyprock ceiling, approximately 90 square metres 25 the Respondent made a concession that it wasn t 90 square metres done and the 90 metres was not claimed in the invoice. He added Transcript 07/08/2014 at page 2-24; lines Exhibit 4. Transcript 07/08/2014 at page 2-31; lines Transcript 07/08/2014 at page 2-26; lines Transcript 07/08/2014 at page 2-12; lines

10 10 that he was charging for other works carried out. He gave an example of having to get the painter to come back four times, at a $1,000 a time 26, although it was never explained why the painter had to keep returning to paint the ceiling. [46] In an to his legal representative dated 11 September he provided an estimate of the times that the Respondent was on-site at the property. It appears that although he may have looked back at diary notes, s, invoices sent and invoices received from contractors he used, he merely arrived at a general approximation of the actual time onsite. For example, the internal areas took approximately four to five days in late May 2012, the internal roof work was carried out about the same time and the installation of the flashings on the roof took place in late July There were three visits to the property for roof leaks and repainting the ceiling, with each visit requiring attention to both the leak and the painting. The comment in the about the number of visits for the painting is at odds with his evidence; he told the Tribunal that the painter had been back four times 28. [47] Mr Diplock conceded that 90 square metres of ceiling was not replaced, only a small number of square metres was replaced, but claimed there was enough work undertaken to take the final amount invoiced up to $14, [48] Mr Diplock said he was aware that the Applicant had engaged another contractor to attend the property subsequent to the Respondent being on the site at a cost of $10,000 to fix the same problems that he did. Although this is disputed by Mr McNabb who said that the other contractor fixed the problems caused by the Respondent. 30 Domestic Building Contracts [49] The Queensland Building and Construction Commission (QBCC) governs the building and construction industry. Building licences are issued by the QBCC and building work (labour and materials) exceeding the regulated amount in value must be carried out by a licensed builder. [50] The term regulated amount means an amount above $3,300 prescribed under a regulation 31 and the term carried out includes physically carrying out building work, directly or indirectly being responsible for others who carry out building work, and/or providing administrative, managerial, advisory or supervisory services such as quoting for building works; entering into contractual agreements; supervising labour or subcontractors; and other responsibilities Transcript 07/08/2014 at page 2-16; lines Respondent s Response, document H2. Transcript 27/06/2014 at page 1-55; lines Transcript 07/08/2014 at page 2-23; lines Transcript 07/08/2014 at page Queensland Building and Construction Commission Regulation 2003 (QBCC Regulation) s 11.

11 11 [51] The Domestic Building Contracts Act 2000 ( the Act ) is relevant to the dispute between the parties. The purpose of the Act (in regulating domestic building contracts) is to achieve a reasonable balance between the interests of building contractors and building owners; and to maintain appropriate standards of conduct in the building industry 32. The Act provides that all building work which exceeds the regulated amount must be performed under a regulated contract, which has effect only if it is signed by the building contractor and building owner (or their authorised agents) 33. [52] A building contractor 34 who enters into a regulated contract must ensure the contract is in written form when it is entered into, or ensure that it is put into written form as soon as practicable (but within 5 business days) after it is entered into, and before a start is made in carrying out the subject work 35. [53] There is no dispute that the Respondent fell within the ambit of the definition of a building contractor, and nor was there any dispute that the Respondent undertook domestic building work. Builder low rise licence [54] The Queensland Building and Construction Commission Regulation 2003 ( the Regulation ) provides for various classes of building licences. The Respondent is the holder of a low-rise Builder s licence. [55] The Regulation 36 provides the scope of works permitted for a low-rise licence holder. The Regulation also outlines what types of buildings can be worked on by the Respondent, namely a class 1 or a class 10 building. The Respondent can carry out building work on building classed from 2 to 9, however those buildings must have a gross floor plan area not exceeding 2,000 square metres, but not including a Type A 37 or Type B 38 construction. [56] The Penthouse where the Respondent carried out the building work is the top floor of a four storey residential complex. The definition of a class 1 building is a single dwelling being a detached house, or one or more attached dwellings, each being a building, separated by a fire-resisting wall, including a row house, terrace house, town house or villa unit. The definition of a class 10 building is not relevant to this matter Domestic Building Contracts Act 2000 s 3. Ibid s 30. Ibid Schedule 2 defines what a building contractor is. Ibid s 26. Regulation Schedule 2, Part 4.2(1) and Part 4.2(2). Type A, for construction, means Type A construction under the Building Code of Australia. Type B, for construction, means Type B construction under the Building Code of Australia. See classification summary of buildings and structures at

12 12 [57] From analysing the relevant provisions of the Act and the Regulations and the dynamics of the property, it seems that two issues are clear. Firstly, the scope of works exceeded the regulated amount and this should have automatically triggered the utilisation of a regulated contract, and secondly, the scope of works undertaken by the Respondent on the Penthouse were outside the perimeters of the conditions prescribed for the Respondent s own Builder s licence. [58] It is not clear whether the Respondent advised the Applicant that it did not hold a prescribed Builder s licence to undertake the scope of works on the property. The costs of the scope of works exceeded the regulated amount under the Regulation and nor was it clear why the Respondent disregarded its obligations under the Act by carrying out of the scope of works without a regulated contract. [59] The Applicant s application seeks an Order that the Respondent pay to the Applicant $15,000 inclusive of all of the scope of works. Its argument is that the Respondent had only carried out about $3,000 worth of work 40. The Applicant seeks further $327 for costs associated with the filing and service fees. Considerations [60] When analysing each of the Respondent s invoices, the amount invoiced by the Respondent for Variation 2 was $3,465. The Applicant has since obtained a quote from another roofing company 41 who quoted a figure of $2,596 for the same work. It is not unusual for different contractors to quote difference prices for the same work, and given the small difference in the amount 42, the Tribunal accepts that the amount invoiced by the Respondent for Variation 2 was reasonable in the circumstances. [61] Considered by the Tribunal was the Applicant s payment of the Respondent s invoices totalling $18,096.50, albeit apparently without first inspecting the scope of work undertaken. A further consideration was the necessity for the Applicant to have another contractor attend the property and carry out work to rectify the scope of works. There was no dispute by the Respondent that this had occurred, and nor was there any dispute that the Applicant paid the other contractor. [62] With regards to the scope of works invoiced for Variation 1, the Tribunal is satisfied that the work was either not carried out as invoiced, or was incomplete, whereby the Applicant found it necessary to engage another contractor to rectify the scope of works at an additional cost of $7,000. The Tribunal is further satisfied that the Respondent should pay that amount to the Applicant Transcript 07/08/2014 at page 2-26; lines VP Roofing. A difference of $869.

13 13 [63] The Tribunal is also satisfied that the Respondent should pay the Applicant $327 for the costs associated with filing and service fees. Decision [64] That the Respondent pay the Applicant the amount of $7, within ninety (90) days.