OJ Pippin Homes Pty Ltd v Curran & Anor [2026] QCAT 42

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9

D & L Events Pty Ltd v Opetaia [2024] QSC 245

Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115

LL UP Pty Ltd v Kegland Distribution Pty Ltd [2024] VSC 651

Miller v Queensland Building and Construction Commission [2022] QCAT 151

Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14

Shevill v Builders Licensing Board [1982] HCA 47

Stojanovski v Australian Dream Homes Pty Ltd [2015] VSC 404

[1] On 21 May 2020 OJ Pippin Homes Pty Ltd, a building company ('Builder'), and Brian Curran and Kerrianne Gamble ('Owners') entered into a building contract ('Contract').

[2] The Contract was for the construction of an extension to the Owners' residential dwelling situated in the Brisbane suburb of Bracken Ridge.

[3] Work under the Contract commenced in or about late July 2020 but disputes arose between the Owners and the Builder. These disputes became the subject of sharp disagreement in February and March 2021.

[4] The Tribunal is invested with jurisdiction to decide certain building disputes, including domestic building disputes. That jurisdiction is conferred on the Tribunal by the Queensland Building and Construction Commission Act 1991 (Qld) ('QBCC Act').[1]

[5] The Builder relied on the Tribunal's jurisdiction when, on 8 December 2021, it filed an application in respect of a domestic building dispute. By that application the Builder sought payment of an amount said to be owing under the Contract for a fixing stage claim in the sum of $17,087.60 together with interest in the sum of $2,334.21 and costs and fees.

[6] On 11 February 2022 the Owners filed their response and counter application with the Tribunal. By that document the Owners disputed the Builder's claim and countered it by seeking from the Builder payment of various sums totalling about $84,000. The gravamen of the Owners' counter application is that the Builder's work, including the work of its sub-contractors, was defective and what work that was done was not done in a timely manner. The counter application quantified the costs required to rectify defective works as $63,842 and the late completion damages as $20,050.

[7] The Contract is based on a HIA Queensland Alteration, Addition and Renovation Contract (QC3). The 'works' described in the Contract,[2] is for a house extension. Therefore, the dispute before the Tribunal falls within the definition of a domestic building dispute as that phrase is defined in the QBCC Act.[3]

[8] However, there is a further jurisdictional hurdle. For the Tribunal to decide this building dispute, its jurisdiction is predicated on the prior participation by the Builder, as applicant, in process established by the QBCC to attempt resolve the dispute.[4] Has this jurisdictional hurdle been cleared?

[9] The Tribunal's application form, in Part B section 10, seeks to confirm that there has been compliance with this process by asking a question about participation in the QBCC's dispute resolution process. The Builder answered this question by marking the 'Yes' box. The application form goes on to ask whether the Builder attached the formal notification letter from the QBCC to this application. Again, the Builder marked the 'Yes' box to indicate compliance.

[10] However, the Builder did not, in its application, put before the Tribunal what I regard as a 'formal notification letter' from the QBCC. Despite this, I am satisfied that the Builder has complied with a process established by the QBCC to resolve the dispute.[5] This is because the dispute is, in essence, a contract dispute. Both the Owners and the Builder have participated in what the QBCC describes in its letter to the Builder of 31 March 2021 as 'a detailed 4 stage process that ensures a fair and impartial process for you.'[6] As will be apparent from what is set out below, in May 2021 a QBCC inspector inspected the work at the Owners' residence. This inspection was a result of a claim by Ms Gamble on a statutory insurance scheme administered by the QBCC. Following this inspection and subsequent report the QBCC decided that Ms Gamble 'has not validly terminated the contract with' the Builder.[7]

[11] I am therefore satisfied that the Builder has participated in a QBCC dispute resolution process and thus, the Tribunal has jurisdiction to decide this dispute.

[12] The Tribunal, by directions made in August 2022, required the Builder and the Owners to prepare and file statements of evidence. In compliance with those directions, statements were prepared. After authentication, those statements became exhibits in this proceeding. The statement for the Builder was by a Mr Wade Robert Hastie (exhibit 1). The Owners' statements became exhibit 3 (statement of Ms Kerianne Gamble) and exhibit 4 (statement of Mr Brian Curren). There were two other exhibits. They were a QBCC Resolution Services Inspection Report/Statement of Reasons dated 18 May 2021 (exhibit 2), and an affidavit of a Mark Alexander Rowlingson, affirmed on 10 July 2023 (exhibit 5). Attached to and forming part of Mr Rowlingson's affidavit were reports that Mr Rowlingson prepared following inspections he conducted of the works at the Owners' request. These reports are entitled 'Defects report - prior to completion'. One of these reports, appendix 1, is dated 12 March 2021 and the other, appendix 2, is dated 22 March 2021.

[13] Oral evidence at the Tribunal hearing was given by Mr Hastie for the Builder. Both of the Owners gave oral evidence in support of their response and counter application as did Mr Mark Rowlingson.

[14] There are substantial matters that the parties either agree on or are apparent from the documents that the parties have put before the Tribunal.

[15] Importantly, the parties agree on the terms of the Contract. This is apparent from the closing written submissions of the parties. In those submissions both the Builder and the Owners adopt the document contained in exhibit 3 at pages 76-162 as the Contract between the parties.

[16] For context it is appropriate to highlight certain provisions of the Contract that have direct relevance to the issues in dispute are as follows:

(a) The 'Contract price' was $85,438.00.[8]

(b) 'The Works' under the Contract were for a house extension of the Owners' house at Bracken Ridge.[9]

(c) The documents that constituted the Contract include, as well as the particulars and general conditions contained in the QC3 contract, a quote, design plans and a variation.[10]

(d) The 'Progress Payment Schedule'[11] outlines six stages. The fifth (and penultimate) stage in the schedule is the fixing stage. It was for 20% of the Contract price ($17,087.60). The final stage (which was not achieved) is practical completion.

(e) Clause 28 of the General Conditions addressed 'Termination by default'.

[17] The parties not only agree on the terms of the Contract, but they also agree that it has been breached and that it is now at an end. Where they disagree is on how the Contract was breached, which party was in default and what are the consequences of the default contended for by each party.

[18] To identify the issues for determination, and to assist in a consideration of the evidence relevant to the issues, it is appropriate to summarise the respective final positions of the parties - as expressed in their closing written submissions.

[19] The Builder's position is that, although the Owners took certain steps, in and around March 2021, to terminate the Contract, the steps did not constitute a valid termination of the contractual relationship between the parties. Rather, the Builder asserts that the conduct of the Owners constituted a repudiation of the Contract. This repudiation, the Builder claims, entitled it to payment of its fixing stage claim,[12] reduced by a minor reduction for works not completed. In adopting this position, the Builder relies on, amongst other matters, the conclusions reached by the QBCC in a decision notice, issued in September 2021. That decision was in relation to a claim by Ms Gamble on the statutory insurance scheme administered by the QBCC. The QBCC decision determined, in the Builder's favour, several issues that are now before this Tribunal.

[20] On the other hand, the Owners' contention is that the Builder breached its obligations under the Contract. As a consequence, the Owners issued, in March 2021, a notice to the Builder to remedy several asserted breaches. Despite this notice, the Owners contend that the Builder failed to respond properly to the notice. The Owners assert that this failure to respond appropriately gave them the ability to terminate the Contract which they then did. Further, or, in the alternative, the Owners contend that they terminated the Contract by acceptance of the Builder's repudiation of the Contract. The asserted repudiation by the Builder was that it had, by March 2021, evinced an intention to be no longer bound by the terms of the Contract.

[21] To give some context to these expressed final positions it is appropriate to set out the sequence of relevant events that are revealed by the exhibits and oral evidence and which are not in contest - other than as to their legal consequences. Those events are as follows:

(a) Work commenced onsite under the Contract on or about 28 July 2020.[13]

(b) The 'Building Period' provided for in the Contract was 90 days to practical completion - subject to delays and extensions of time.[14]

(c) Disputes arose regarding the work under the Contract. Indeed, these disputes, including inter-personal antipathy, arose early in the construction period and continued for the time that the Builder and its subcontractors were on site.[15]

(d) By a document dated 19 February 2021, the Builder made a progress claim on the Owners.[16] This progress claim, detailed as the 'Fixing Stage Claim', was for a total of $17,087.60 including GST.

(e) In or about late February 2021 the Owners engaged solicitors to assist them in relation to their disputes with the Builder.[17] By a letter dated 3 March 2021 the Owners' solicitors sent a letter to the Builder.[18] This letter enclosed a document entitled 'Notice to Remedy Breach' ('Breach Notice') - which was also dated 3 March 2021.[19] The Breach Notice stated, in its heading, that it was issued pursuant to clause 28 of the Contract. That clause, although headed 'Termination by Default' sets out a process by which either party, if that party considers that the other party is in substantial breach of the Contract, must employ prior to taking the step of terminating the Contract. This process appears to be designed to rectify the asserted breach whilst preserving, the extent possible, the contractual relationship.

(f) The Breach Notice asserted that the Builder was in breach of the Contract on various grounds including that the Builder had suspended the carrying out of the Works other than in accordance with the Contract and, further, that the Builder was in substantial breach on several other grounds.

(g) The Breach Notice required rectification of the asserted breaches within 10 working days. If there was no rectification, the Breach Notice foreshadowed the Owners' intention to terminate the Contract.

(h) Under the cover of a further solicitor's letter dated 18 March 2021[20] the Owners purported to terminate the Contract on two grounds. Firstly, termination based on clause 28. That is, termination because of the asserted failure by the Builder to rectify or to commence to rectify the breaches in the Breach Notice. The second ground of termination was based on an acceptance of an asserted repudiation of the Contract by the Builder. The essence of the asserted repudiation was that the Builder had evinced an intention to be no longer bound by the Contract.

(i) The Builder, by an email dated 18 March 2021[21] and in correspondence that followed, rejected the contention that the Contract was at an end and maintained that, at that stage, the Contract was still on foot.

(j) In or about early March 2021, the Owners engaged Mark Rowlingson of First Choice Inspections to advise them in respect of defects in the Work. Mr Rowlingson prepared two reports. They are dated 12 and 22 March 2021.[22] In those two reports Mr Rowlingson concluded that there was evidence of non-compliant works, of substandard workmanship and of incomplete works. Further, in the latter report, Mr Rowlingson also found what he said was evidence of safety hazards.

(k) Also, in March 2021, Ms Gamble made a claim with the QBCC under the statutory insurance scheme, the Queensland Home Warranty Scheme ('QHWS'). That claim was to fix or complete work under the Contract.[23]

(l) On 18 May 2021 a QBCC inspector conducted an onsite inspection and prepared a report.[24] The inspector's report addressed three items. The first of these (Item 1) was whether the Builder's Fixing Stage Claim was issued prematurely. The inspector concluded that the fixing stage had not been reached due to some incomplete work by the Builder. In respect of Items 2 and 3 - the Owners' claim that the Builder was in substantial breach of the Contract - the inspector concluded that there was no substantial breach of the Contract.

(m) I infer that the QBCC then considered the inspector's report and other information relating to Ms Gamble's claim. This is because by a letter dated 25 May 2021 a QBCC senior assessment officer informed the Builder that Ms Gamble's non-completion claim under the QHWS had been denied.[25] I further infer that Ms Gamble was also advised of this outcome.

(n) The QBCC's decision of 25 May 2021 was not its last word on the matter. That decision was repealed and reconsidered by the same senior assessment officer. The result of that reconsideration is set out in a QBCC letter to the Builder dated 26 July 2021.[26] That result was the same as the 25 May assessment - Ms Gamble's non-completion claim was denied on the basis that 'the contract termination did not satisfy the terms of cover under the Queensland Building and Construction Commission Regulation 2018.'

(o) Ms Gamble was dissatisfied by the 26 July 2021 decision and, in August 2021, sought an internal review of that decision.[27]

(p) The result of the internal review, conducted by a QBCC principal review officer, is set out in a decision notice dated 17 September 2021 ('Decision Notice').[28] The Decision Notice finding was that 'that the contract has not been validly terminated (by Ms Gamble) at the default of the affected party' (the Builder). As a result, Ms Gamble's claim under the QHWS was disallowed. The Decision Notice advised Ms Gamble of her right to have the decision externally reviewed by QCAT. There is no evidence before this Tribunal that Ms Gamble availed herself of a review of that decision by QCAT.

(q) On 8 December 2021 the Builder filed in QCAT an 'application for domestic building disputes' (Form 26) with a claim amount of $19,412.81. The calculation of this amount is set out in Attachment One to the application. It is the Fixing Stage Claim set out in the Builder's invoice No. 64263 (of $17,087.60) plus interest.

(r) The Owners responded to this claim by a response and counter application (Form 36) filed on 9 June 2022. By this document the Owners quantified their claim as payment of costs of $63,842 to rectify defective work done by the Builder and payment of late completion damages of $20,050 under clause 32 of the general conditions of the Contract. In addition, the Owners claimed further amounts for the change of locks ($364) and unquantified amounts for filing costs and legal costs.

[22] Given that the parties agree as to the terms of the Contract and that there has been a breach and that the Contract is at an end, the principal issues for determination can be summarised as:

(a) Was the Contract breached and, if so, by which party?

(b) What are the consequences of the termination of the Contract?

[23] Both principal issues give rise to a series of sub issues. In respect of the first question, the sub issues may be described as:

(a) Was the Breach Notice by the Owners valid? That is, was it in accordance with the requirements of clause 28 of the Contract? Specifically, did the asserted breaches fall within clause 28.1 and, if so, did the Breach Notice comply with clause 28.3?

(b) If the Breach Notice was valid, did the Builder rectify or substantially commence to rectify any substantial breach set out in the Breach Notice within 10 working days of receiving the Breach Notice as required by clause 28.4?

(c) If the Contract was not validly terminated by the Owners following a clause 28 'substantial breach', was it nonetheless terminated in March 2021, by the Owners' acceptance of what they assert was the Builder's repudiation of the Contract.

(d) If there was no valid termination of the Contract by the Owners, did their conduct amount to a repudiation of the Contract; a repudiation that was then accepted by the Builder?

[24] The Owners contend that there are two alternative grounds which support their contention that the Contract was breached by the Builder in a way that entitled them, on 18 March 2021, to terminate the Contract. They are:

(a) Firstly, that they took effectual steps under clause 28 to terminate the Contract by issuing the Breach Notice. That is, they specified in the Breach Notice the Builder's substantial breaches, required rectification of the asserted breaches and stated that if the breaches were not rectified within 10 working days, they intended to end the Contract. After the expiration of the nominated time, the Owners contend that the Builder had failed to remedy the asserted breaches. So, by a solicitors' letter dated 18 March 2021 they terminated the Contract pursuant to clause 28.4 of the Contract.

(b) Secondly, that, by 18 March 2021, the Builder had evinced an intention to be no longer bound by the Contract as a result of failing to comply with the warrantees set out in clause 36 of the Contract and the failure to issue progress claims in accordance with the stage claims in the Contract. In short, the Owners maintain that the Builder's work was defective and that it had issued stage claims prematurely. This conduct, characterised by the Owners as repudiatory conduct, was accepted by them and they terminated the Contract.

[25] The ability to advance ground (b) above as an alternative ground stem, it would seem, from clause 28.8 which provides as follows:

28.8 If a party breaches (including repudiates) this contract, nothing in this Clause prejudices the right of the other party to recover damages or exercise any other right or remedy.

To distinguish the two grounds contended for by the Owners, I will refer to the first of these as the 'clause 28 termination' and the second of these as the 'common law termination'.

[26] The QBCC, in its internal review Decision Notice dated 17 September 2021, set out, in detail, the decision of a QBCC principal review officer. The issue before the QBCC officer was whether Ms Gamble's claim under the Statutory Insurance Scheme (the QHWS) was maintainable. To reach a decision on this issue the principal review officer had to address a question that now confronts this Tribunal - whether the Contract was validly terminated by the Owners.

[27] The principal review officer came to the view that the Owners' purported clause 28 termination was ineffective as the Builder had satisfied clause 28.4 by 'taking steps to commence to substantially rectify the alleged breaches within 10 working days after the (Breach) Notice was given.'[29]

[28] On the alternative, common law termination ground, the principal review officer concluded that 'when the evidence, as a whole is considered, the builder did not repudiate the contract and was ready, willing and able to perform its obligations consistent with the requirements of the contract.'[30] That is, the finding was that the Owners did not have the ability to elect to terminate the Contract.

[29] Although this proceeding is at the instigation of the Builder, to assess both the Builder's claim and the Owners' counter application it is necessary to firstly come to a determination on the Owners' claim that they validly terminated the Contract by their solicitors' letter of 18 March 2021.

[30] The decision of QBCC's principal review officer on the status of the Contract is not binding on this Tribunal. Rather, what is necessary here is for an assessment of the evidence presented to this Tribunal for the determination of the issues set out above.

[31] For the Owners to avail themselves of Clause 28 as a method of terminating the Contract the evidence before the Tribunal must establish three matters. Those matters are:

(a) That the Builder had committed a substantial breach (or breaches) of the Contract at the time the notice was given (clause 28.1).

(b) That Breach Notice was efficacious. That is, it satisfied clause 28.3.

(c) That the Builder did not, within 10 working days of receiving the notice, rectify or commence to substantially rectify the substantial breach (or breaches) specified in the notice (clause 28.4).

[32] Taking each of these matters in turn, the first question to be addressed is - as of 3 March 2021, was the Builder in substantial breach of the Contract?

[33] Clause 28.1 sets out the circumstances when the building contractor is in substantial breach of the Contract. Those circumstances are when the building contractor:

(a) suspends the carrying out of the works other than under clause 19; or

(b) has the building contractor's licence cancelled or suspended; or

(c) is otherwise in substantial breach of this contract.

[34] On the evidence before the Tribunal, item (b) above does not apply here. Therefore, the relevant issues, phrased as questions, are firstly - did the Builder suspend the carrying out of the works other than in accordance with clause 19 and (or) is the Builder otherwise in substantial breach of the Contract?

[35] Both the clause 19 contention, and the other asserted substantial breach assertions are based on the concept of a 'substantial breach'. It is appropriate to observe that the terms 'substantial' or 'substantial breach' are not defined in the Contract.

[36] Guidance as to what constitutes a 'substantial breach' in the context of a building contract of this type can be obtained from judicial consideration of that term. In Stojanovski v Australian Dream Homes Pty Ltd[31] ('Stojanovski') the Victorian Supreme Court, in an appeal from the Victorian Civil and Administrative Tribunal, gave extensive consideration to the phrase 'substantial breach'[32] in a residential building contract dispute.

[37] In his reasoning the judge gave guidance as to the approach to a determination of whether the breaches asserted by the Owners here are substantial breaches. At [56] His Honour said:

The proper approach in determining whether the builder was in substantial breach of the contract requires that the court should first identify the term or terms breached, and the breach must then be evaluated by considering its nature and the consequences of the breach.

[38] Prior to these comments His Honour, at [52], said that a substantial breach is:

is one that is more than ephemeral or de minimis in its character, the concept and purpose of evaluating, and limiting, the kind of breach that enlivens the owner's right to serve a default notice is given context by reference to the terms of the contract as a whole.

[39] To support the contention that the Builder suspended the carrying out of works other than in accordance with clause 19, the Breach Notice refers to the Builder's email of 23 February 2021.[33] That email stated that the Builder is 'putting the job on hold until we have clarity'. In my view, the quoted phrase can be interpreted in no other way than as written notice of a suspension of the works by the Builder.

[40] Was this suspension in accordance with clause 19? Clause 19.1 sets out in sub paragraphs (a)-(k) the circumstances that the Builder may, by written notice, suspend the carrying out of the works. I do not consider that the Builder's email of 23 February 2021 satisfies clause 19.1 as it does not specify, with what I consider to the requisite degree of particularity, the circumstances that permitted it to suspend the works under the Contract.

[41] To have a residential building project carried out in a timely manner and in accordance with the terms of the contract are important. There are serious consequences for an owner of a suspension. It is important for an owner to be fully appraised of the contractual basis for any suspension. This enables the owner to understand the basis for the suspension and, if appropriate or possible, take remedial action.

[42] In the circumstances, I consider that the suspension of works by the Builder otherwise than in accordance with clause 19 means that the Builder was in breach of the Contract and the Owners therefore had a sound basis to issue a breach notice in respect of this failure.

[43] The Breach Notice then goes on to specify various other alleged 'substantial breaches.' They are that the Builder failed to:

(a) 'proceed with the works with reasonable diligence as required by clause 36.1(e) of the Building Contract'.

(b) 'issue a progress payments (sic) at the completion of each stage as required by clause 4.3 of the Building Contract'.

(c) 'carry out the works in an appropriate and skilful way with reasonable care as required by clause 36.1(c) of the Building Contract'.

(d) 'carry out the works in accordance with the plans and specification as required by clause 36.1(d) of the Building Contract'.

Each of these asserted substantial breaches are accompanied, in the Breach Notice, by particulars.

[44] As to whether the asserted breaches set out in the previous paragraph were substantial breaches it is necessary to evaluate each of them by considering the nature and consequences of each breach by reference to the terms of the Contract as a whole. Each of the asserted breaches will be considered in turn.

[45] Firstly, the asserted failure of the Builder to proceed with reasonable diligence. The Contract, in schedule 1, contemplated a 90-day construction period from commencement to practical completion.[34] Without extensions for delays, the 90-day period would have expired about late October 2020. This was not achieved. On its face, this would suggest a failure to proceed with reasonable diligence.

[46] The Contract contemplates that building progress may be delayed and provides, in clause 17, for delays and extensions of time. The evidence does not contain any documents that relate to claimable delays under clause 17 - a clause that is quite precise in setting out when written notices are necessary. In the absence of such evidence, I find that the clause 17 process was not followed.

[47] Timely completion of a building project is important, especially for an owner. I am of the view that a delay of over four months, unsanctioned by the clause 17 process, is a substantial breach of the Contract.

[48] The second asserted substantial breach relates to a claim by the Builder for a progress payment for the fixing stage. In respect of this contention, the drafter of the Breach Notice appears to have fallen into error. Clause 4.3 of the Contract does not require the Builder to issue 'progress payments.' Rather, that subclause requires the Builder to give the Owners 'a written claim for a progress payment for the completion of each stage'. Clause 4.4 goes on to specify the contents of a progress claim. I assume, from the particulars provided, that the substance of the Owners' contention is that the Builder's claim for the fixing stage, made on 19 February 2021, was premature and that this constituted a substantial breach. I proceed on that assumption.

[49] The Breach Notice does not specify in what way that the work to be carried out under the fixing stage was incomplete. The statement of Ms Gamble[35] does detail the incomplete works as 'internal steps & tiling in the wet areas not being completed' but these details are absent in the Breach Notice.

[50] The Contract, in Schedule 2, does contain a definition of 'Fixing stage'. It means as follows:

the stage when all internal lining, architraves, cornice, skirting, doors to rooms, shower trays, wet area tiling, built-in cabinets (excluding shelves) and built-in cupboards (excluding shelves) of a building are fitted and fixed in position.

[51] This asserted breach was considered by the QBCC inspector as Item 1 in the report dated 18 May 2021.[36] The QBCC inspector concluded that, with two exceptions, the work had been completed to the fixing stage. The exceptions related to some tiling and skirting to the downstairs bedroom. Based on this evidence, I am persuaded that the fixing stage claim was premature and thus a breach of the Contract, but I do not consider that it attains the status of a substantial breach when those matters are considered in the context of the Contract as a whole.

[52] The third asserted substantial breach is the failure by the Builder to carry out the works in an appropriate and skilful way with reasonable care. The particulars detail this complaint as being water ingress into the downstairs bedroom and the laundry. Is this a substantial breach?

[53] Although they post-date the Breach Notice, the inspection observations set out in the Report of Mr Rowlingson,[37] prepared as a result of inspections by him on 12 and 22 March 2021, gives support to the asserted breaches, as particularised. His defects report compiled after an inspection on 22 March 2021 does refer to water penetration to internal areas and high moisture in wall sheeting in the laundry.[38]

[54] Again, this matter was considered by the QBCC inspector as Item 2. The conclusion reached by the inspector was that this defect 'is not considered a substantial breach of the contract.'

[55] Based on Mr Rowlingson's observations I consider that there is substance in the Owners' contention that the defects particularised in the Breach Notice are breaches of the Contract. However, I do not consider that the breaches rise to the level of substantial breaches. In this regard I agree with the assessment of the QBCC inspector.[39]

[56] The fourth and final asserted substantial breach is the failure to carry out the works in accordance with the plans and specifications. Again, the particulars provide some substance to this contention. The particulars refer to the failure by the Builder to install a smart waste with tile inset to 'floor and shower wastes' and 'black fixings to the ensuite'. Again - are these substantial breaches?

[57] The report of Mr Rowlingson does not address these specific items. In contrast the QBCC inspector does specifically consider these matters (as Item 3) and comes to the view that the particularised breaches are not substantial breaches. Based on the inspector's report I find that the asserted departures from the plans and specifications are not substantial breaches.

[58] In summary, the only substantial breaches that I have found are that the Builder suspended the carrying out of works other than in accordance with clause 19 and the Builder failed to carry out the works with reasonable diligence in breach of the warranty contained in clause 36.1(e).

[59] Was the Breach Notice efficacious? Specifically, did the Breach Notice sufficiently set out one or more substantial breaches and then specify what the Builder must do, within a 10-business day period, to properly remedy the breaches? That is, did the Breach Notice satisfy clause 28.3?

[60] Having regard to the wording of clause 28.3, what is required to render a breach notice efficacious? The answer to that question was succinctly summarised in a recent Tribunal decision, Miller v Queensland Building and Construction Commission, in the following terms:

To be effective at law, a Notice to Remedy Breach 'must be unequivocal in order to convey what was amiss so as to identify the default in respect of which cause was to be shown' And, the Notice must 'inform [the recipient] what it had to do, to remedy the alleged breach'.[40]

(footnotes omitted)

[61] Applying this formulation to the wording of the Breach Notice, I find that it conveyed, with sufficient clarity, what I have found to be amiss (i.e. failure of the Builder to proceed with the works with reasonable diligence and the Builder's suspension of the works other than in accordance with clause 19) and what must be done by the Builder. As a result, the finding that I make is that the Breach Notice is efficacious in respect of the substantial breaches that I have found.

Did the Builder commence to substantially rectify the substantial breaches?

[62] In this regard it is of note that clause 28.3, which addresses the breach notice refers to 'requiring the breach to be rectified within 10 working days.' By contrast, clause 28.4, which addresses the further separate notice to be given to end the contract, predicates the giving of the further separate notice on a failure 'to rectify or commence to substantially rectify the substantial breach within 10 working days' (emphasis added).

[63] Clause 28.4 thus directs attention, in this matter, to what was done by the Builder within 10 working days of receiving the Breach Notice. The Breach Notice was received by the Builder on 3 March 2021.[41] The 10-working day period expired on 17 March 2021. Did the Builder commence to substantially rectify, in that 10-working day period, the two substantial breaches that I have identified?

[64] To address this question, I consider that it is appropriate to have recourse to the contemporaneous documents that are in evidence and the probabilities that can be derived from these documents. These documents are the most compelling evidence for the events under consideration.[42]

[65] The contemporaneous documentary evidence before the Tribunal as to the relevant events in that 10 working-day period consists of the following documents:

(a) A letter from the Owners' solicitors to the Builder dated 3 March 2021.[43]

(b) An email in response from the Builder to the solicitors for the Owners dated 3 March 2021.[44]

(c) A letter from the Owners' solicitors to the Builder dated 4 March 2021.[45]

(d) An email from the Builder to the Owners' solicitors dated 18 March 2021.[46]

(e) An email from the Owners' solicitors to the Builder also dated 18 March 2021.[47]

[66] From an examination of these documents the following is apparent:

(a) The letter by the solicitors for the Owners of 3 March 2021, although it enclosed the Breach Notice it also addressed matters that were relevant to the progress of the project. For example, the conduct of the Builder's site supervisor, a Mr Wade Miller, and a request that Mr Miller conduct himself civilly and refrain from 'unacceptable behaviours.' Further, other matters are addressed in the letter that are consistent with the Owners seeking completion of the works under the Contract.

(b) The Builder's (Mike Nancarrow's) email in response, also of 3 March 2021 indicates that the Builder was seeking to commence to rectify matters raised by the Breach Notice. There is a reference to Mr Miller being 'counselled' regarding his interactions on site. There is also an acknowledgement by the Builder that 10 days is insufficient to rectify all the matters raised in the Breach Notice.

(c) The letter by the solicitors for the Owners of 4 March 2021 also addresses matters were raised by the Breach Notice. It speaks of prospective matters required to complete the works under the Contract including stating that 'the flooring to be installed is as per our clients (sic) selection detailed in Variation 001.'

(d) The Builder's email to the Owners' solicitor of 18 March 2021, written without prejudice and prepared after receipt of the notice of termination of the Contract lists courses of action that the Builder has undertaken to respond to the Breach Notice and to progress the works.

[67] Having considered the evidence, and particularly the documentary evidence, the conclusion that I have come to is that the Builder was, in the 10-working day period after receipt of the Breach Notice, commencing to substantially rectify the substantial breaches that I have identified.

[68] As a result, I find that the Owners' purported termination of the Contract by their solicitors' letter of 18 March 2021 was not effective as a termination of the Contract under clause 28.4.

[69] Although raising similar matters to the Owners' claim of clause 28 termination, the Owners' alternative ground, that of common law repudiation, needs to be independently considered.

[70] In summary, the Owners support their claim that the Builder has evinced an intention to no longer be bound by the Contract by contending, in summary, that the Builder:

(a) failed to carry out the works in accordance with the warranties contained in clause 36 of the Contract - such as not carrying out the works in an appropriate and skilful way and with reasonable diligence; and

(b) issued premature progress claims.

[71] As to (b) above, the letter of the Owners' solicitors of 18 March 2021[48] which sets out these contentions, refers to 'progress claims' but does not identify the 'claims' in issue. This lack of clarity is also reflected in the Owners' closing written submissions. On balance, the evidence suggests that it is a reference to the Builder's Fixing Stage Claim. That is, the claim that was the basis of the Builder's application to this Tribunal. I proceed on that basis.

[72] As to the status of the provisions in the Contract, the alleged clause 36 breaches are as the Breach Notice makes clear alleged breaches of 'warranties' not conditions.

[73] As to contention that the issue of a premature progress claim evinces an intention by the Builder to be no longer bound by the Contract, I note that the Contract, in clause 4.3, does require ('must') the Builder to give the Owners a 'written claim for a progress payment for the completion of each stage.' However, the Contract also contemplates, in clause 4.8, that such a claim may encompass works that may not have been performed. It does this by providing that payment by an owner of 'a progress claim is on account only and any such payment is not to be taken as evidence against or an admission that works have been performed in accordance with the contract.'

[74] In assessing the Owners' contention that the matters set out above evince an intention by the Builder to be no longer bound by the Contract it is necessary to bear in mind that repudiation of a contract is a serious matter and is not to be lightly found or inferred.[49]

[75] The wording of the letter of the Owners' solicitors of 18 March 2021 suggests that the Owners are asserting through their solicitors that the repudiation (or renunciation) sought to be relied on is that the Builder has evinced an unwillingness or an inability to render substantial performance of the contract. The test to be applied in these circumstances is whether the conduct of the Builder is such as to convey to a reasonable person, in the situation of the Owners, that there has been a renunciation of either of the contract as a whole or of a fundamental obligation under it.[50]

[76] In applying this test the High Court has said, 'contractual renunciation actions may speak louder than words.'[51]

[77] Recently, Treston J in a Queensland Supreme Court decision, summarised what I understand to be the Owners' position regarding the conduct of the Builder in the following terms:

A failure by one party to perform, even if not a breach of an essential term, may evidence unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This may occur in a situation where a number of breaches taken together evince an intention not to be bound by the terms of the contract even though the consequences of such breaches might be relatively minor.[52]

(footnotes omitted)

[78] As mentioned, the solicitors for the Owners have set out a collection of asserted breaches of the statutory warranties in clause 36 of the Contract, together with the contention that the Builder issued a premature progress claim for the Fixing Stage in breach of clause 4.3 of the Contract.

[79] As to the asserted clause 36 breaches, based on Mr Rowlingson's evidence[53] and the report of the QBCC inspector I consider that the Builder did not act at all times in an appropriate and skilful way and with reasonable care and skill. Further, as I have found, the Builder did not carry out the works under the Contract with reasonable diligence.

[80] In addition, I am satisfied, relying on the report of the QBCC inspector,[54] that the Builder did issue its Fixing Stage claim before all the work under that stage had been completed.

[81] I do not consider that taken individually the matters relied on by the Owners, as establishing the Builder's renunciation of the Contract, evince an intention not to be bound by its terms. However, do they collectively evince that intention?

[82] Given that the repudiation of a contract is a serious matter I am of the view that the matters relied on by the Owners, taken together, do not objectively support the finding that the Builder has evinced an intention to be no longer bound by the Contract.

[83] In coming to this conclusion, I observe that the Builder, after 18 March 2021, the date of the Owners' purported termination, was still looking to continue work on the site and was addressing matters raised by the Owners as being problems, such as the conduct of Mr Wade Miller.

[84] After 18 March 2021 the parties became involved in QBCC processes because of Ms Gamble's claim on the QHWS. What then was the status of the contract after 18 March 2021? The Owners conducted themselves on the basis that they had validly terminated the Contract - a basis that I have found cannot be maintained. The approach of the Builder was that the Contract was still on foot as of 18 March 2021. However, the Builder could no longer carry out work on site because of the Owners' purported termination and the consequent exclusion of the Builder from the site.

[85] At the time of the institution of this proceeding in December 2021 the Builder was seeking payment of the amount outstanding for its Fixing Stage Claim as a finalisation of its entitlement under the Contract. In effect, the Builder had accepted what it characterised, in its closing submissions as the Owners' repudiation of the Contract and, by necessary implication, accepted that the Contract was at an end. Also in the Builder's closing submissions was an acceptance that there should be a 'minor reduction for the works not completed' in the Fixing Stage Claim. After this reduction the Builder quantifies its Fixing Stage claim at $16,233.22. An adjustment down of the Builder's claim is appropriate given the report of the QBCC inspector[55] that the incomplete work under the Fixing Stage consisted of the Builder's failure to install skirting to the downstairs bedroom and the tiling to the laundry where the stairs were to be installed. I quantify the Builder's Fixing Stage claim as $16,200.

[86] The Builder, in its closing submissions also seeks an amount for interest under clause 33 of the Contract. The rate of interest specified in schedule 1, item 8 of the Contract is 18%. The Builder quantifies its claim for interest as $11,375.

[87] Accepting this figure, I quantify the Builder's total claim as $27,575.

[88] Although I have found that the Owners did not validly terminate the Contract on the basis of the Builder's repudiation, that does not deprive the Owners of the ability, by their counter application, to seek recompense for the Builder's breaches of the Contract prior to work ceasing on site. In particular, the loss that the Owners have suffered because of the Builder's breaches of the clause 36 warranties.

[89] As to the Builder's failure to carry out the work in accordance with the Contract, in their closing submissions the Owners quantify what they assert is the defective and non-compliant works done by the Builder, as detailed in the report of Mr Rowlingson, as $63,842. This quantification is based on a quote from Dare Constructions.[56]

[90] The difficulty with accepting this quantification of the Builder's defective works is that the author of the quote, Mr Dare, was not called as a witness and thus the Builder's representative was not afforded the opportunity of questioning the basis of the quote and the extent of the work required.

[91] Other evidence as to the extent of the work required to address the failure by the Builder to carry out the works in accordance with the plans and specifications, as required by clause 36, is contained in the May 2021 report of the QBCC inspector.[57] Although the QBCC inspector did identify the incomplete works, there was no quantification of the cost to rectify the short comings in the Builder's work.

[92] For this matter to be finalised it is necessary for this amount to be quantified. Doing the best I can on the material before me I quantify the defective and non-compliant work as found by the QBCC inspector as being in the order of $20,000 to $20,600.

[93] By 18 March 2021, the date that was the effective end of the Contract, the Builder was approximately 140 days over the 90-day building period. Taking that period and applying the late completion damages agreed to by the parties of $50 a day,[58] I consider that an appropriate quantification of the damages due to the Owners for the failure of the Builder to carry out the works with reasonable diligence, contrary to clause 36.1(e) of the Contract is $7,000. Given that I have found that the Owners repudiated the contract by purporting to terminate it on unsupportable grounds, I find that they are not entitled to late completion damages beyond 18 March 2021.

[94] What this means is that the quantification of the Builder's claim and the Owners' counter application result in approximately the same amount.

[95] As a result, the decision that I have come to is that the claim of the applicant, OJ Pippen Homes Pty Ltd, is quantified in the sum of $27,575 and the counter application of the Owners is quantified in virtually the same amount. That is there is no net payment after a set off. In the circumstances, I further order that each party is to bear their own costs.

[1] QBCC Act s 77(1). The term 'building dispute' is defined in sch 2.

[7] Decision made on 25 May 2021which was repealed and reconsidered and replaced with an identical decision dated 26 July 2021.

[12] A stage specified in Schedule 2 of the Contract.

[13] Exhibit 3 (statement of Kerrianne Gamble) at paragraph 4.

[14] Schedule 1 of the Contract, Item 13.

[15] The statements of Ms Gamble at paragraphs 6.1 - 6.29 (exhibit 3 pages 14-9) and Mr Curran at paragraphs 7 and 8 (exhibit 3 at page 3).

[17] Ibid page 19 (statement of Ms Gamble at paragraph 6.30).

[22] Both reports are part of exhibit 5.

[23] Statement of Ms Gamble at paragraph 9 (exhibit 3, page 20). See also the QBCC letter to the Builder - exhibit 3, page 412.

[26] Ibid, page 414 and exhibit 1, page 30.

[27] See the email from the QBCC to the Builder dated 23 August 2021 - exhibit 3, page 415.

[31] [2015] VSC 404.

[34] Contract, schedule 1, item 13 - exhibit 1 at page 83.

[38] Ibid items 1.01 and 2.03 in Appendix 2.

[39] Exhibit 2, item 2 under the heading of 'Technical Advice'.

[40] [2022] QCAT 151, [34].

[42] LL UP Pty Ltd v Kegland Distribution Pty Ltd [2024] VSC 651, [22].

[43] Exhibit 3, pages 231, 232. This is the letter that enclosed the Breach Notice.

[49] Shevill v Builders Licensing Board [1982] HCA 47, 633; Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14, [36].

[50] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; (2007) 233 CLR 115, [44].

[52] D & L Events Pty Ltd v Opetaia [2024] QSC 245, [67].

[53] In his written report, exhibit 5, Mr Rowlingson finds evidence of safety hazards, non-compliant works and substandard workmanship.

[56] The quotation is at exhibit 3 pages 290-2.