Success in Subcontractor case but beware of need to be licensed

In Australian Timber & Trusses Pty Ltd v T & M Buckley Pty Ltd [2012] QSC 110 the Supreme Court in Brisbane found in favour of McLaughlin’s client Australian Timber & Trusses, ordering that it was owed $605,881.20 in unpaid invoices and goods manufactured but not delivered, plus interest. Justice McMurdo rejected a counterclaim by the First Defendant for damages for faulty goods in the sum of $432,245.00 and reimbursement of past payments for goods in the sum of $624,409.89.

Australian Timber & Trusses manufactures and supplies timber trusses and frames. The First Defendant is a builder. Australian Timber & Trusses commenced supplying to the First Defendant trusses and frames for the First Defendant’s building project in a development at Wakerley in September 2008.

In March 2009, Australian Timber & Trusses was advised by the First Defendant that its contract with the owner of the development had been suspended and that Australian Timber & Trusses was to immediately cease carrying out any further work. There were no further deliveries by Australian Timber & Trusses to the site after that date.

As at that date, Australian Timber & Trusses had unpaid invoices, for timber delivered during February 2009, totalling $280,455.05 and had manufactured, but not delivered, further trusses and frames for the price of $191,047.83, which Australian Timber & Trusses was seeking to recover from the First Defendant.

At the trial, the First Defendant argued that Australian Timber & Trusses was not entitled to payment by virtue of section 42 of the Queensland Building Services Authority Act 1991 (Qld) (“the QBSA Act”). This section provides that a contractor is not entitled to any remuneration for unlicensed “building work”. Australian Timber & Trusses provided with each delivery of trusses a layout plan detailing how the items were to be installed on site. The QBSA Act provides that “building work” includes the preparation of plans and specification for the performance of building work.

It was argued by the First Defendant the production of the layout plans by Australian Timber & Trusses constituted “building work” for the purposes of section 42, and for which Australian Timber & Trusses did not hold a licence under the QBSA Act. It is important to note that the manufacture and supply of the timber frames and trusses by itself was not “building work” for which Australian Timber & Trusses was required to hold a licence.

Justice McMurdo found that because there was no charge for the layout plan, Australian Timber & Trusses was not seeking to be remunerated for any unlicensed building work and the QBSA Act had no effect on its claim against the First Defendant. His Honour found that “[the] entitlement to the price is not inconsistent with s 42 because the plaintiff is not seeking a consideration for the illegal work, the preparation of the plan. It is entitled to the agreed price for that which it provided legally.”

The First Defendant also brought a counterclaim against Australian Timber & Trusses, complaining about the quality of the trusses which were delivered. It was claimed that the hip trusses installed in many houses across the development, had an excessive deflection at the roof overhang, causing the First Defendant to suffer damages of $432,245.00.

His Honour heard expert engineering evidence from both sides as to whether the design of the trusses accorded with the relevant Australian Standards. Justice McMurdo preferred the evidence given by the expert engaged by Australian Timber & Trusses to the effect that the design of the trusses was in accordance with industry standards and the deflections were unlikely to be caused by incorrectly graded timber, timber with a less than average stiffness for the grade or excessively bowed timber, and accordingly, could not be attributed to Australian Timber & Trusses.

In any event, Justice McMurdo rejected the First Defendant’s claim that it was likely the Building Services Authority would require the First Defendants to rectify any defects in the future. His Honour said “the likelihood that the First Defendant would be called upon to either rectify or pay for the rectification of even those four houses is affected by the fact that there is no evidence that anyone, especially an owner of the house, has complained about it”.

In addition, the First Defendant counterclaimed for repayment of $624,409.89, being the total paid by the First Defendant to Australian Timber & Trusses for trusses and frames delivered to the site. This counterclaim was again advanced on the basis that Australian Timber & Trusses was not entitled to any payment by reason of the QBSA Act and failed for the same reasons as the First Defendant’s defence.

See access a full copy of the Judgment.

If you have a building dispute, please contact McLaughlins Lawyers.