Build beyond scope at your peril
A recent District Court of Queensland decision is a timely reminder for builders that performing work on a project outside of scope, without properly documenting the variation, will leave the builder unable to recover anything for the work done.
The decision of Judge McGill of the Queensland District Court in Thompson Residential Pty Ltd v Tran confirms that section 84(2) of the Domestic Building Contracts Act 2000 (Qld) ("the Act) excludes any contractual or restitutionary remedy where a builder doesn't comply with that section.
Thompson Residential Pty Ltd contracted with Tran for the construction of a domestic home.
Tran terminated the contract when the work was almost complete. The builder claimed compensation for the construction work completed under the contract as well as $286,533 for variations to the contract work.
Tran's lawyers relied on section 84(2) of the Act. That section provides that a builder is only able to recover an amount for a variation where:
- it has complied with sections 79, 80, 82 and 83 of the Act; or
- it makes an application to the Queensland Civil and Administrative Tribunal (QCAT) which is approved.
The builder had not signed the variation, nor given a copy to Tran to sign, with a copy then to be given to the owner within 5 working days.
No application to QCAT had been made and approved either. Given the builder hadn't complied with section 84(2) of the Act, the builder had to rely on a claim based on quantum meruit under the common law.
The Court had to determine whether section 84(2) excludes any liability of the owner for a claim in restitution (quantum meruit) brought under the general law. McGill J ordered that this question be decided separately and in advance of the trial.
His Honour further ordered that the question be answered 'yes' such that the owner was not liable for the builder's claims in respect of the variations. Those claims were struck out, which meant that the builder could not proceed with them at trial.
It was held that section 84(2) operated to restrict the builder to the specific statutory restitutionary claim under the Act which required an application to QCAT.
Judge McGill found that the words in section 84(2) are quite clear and excluded the general law restitution based remedy of quantum meruit.
There is also previous authority for the proposition that the Act excludes any general law restitutionary or contractual claim.