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Working as an unlicensed builder – What could go wrong?

A ‘domestic building dispute’ is a type of dispute between a building (or home) owner and a contractor in respect of the performance of work or dispute in negligence towards the work.1 Mr Hutchins seeks damages against Mr Ouks, an unlicensed builder, for negligence of work on his driveway. The Queensland Civil and Administrative Tribunal (“Tribunal”) heard and made judgment on ‘building disputes’ and considered that Mr Ouks owed a duty of care to Mr Hutchins regardless of being an unregistered builder.  

The facts are Mr Hutchins engaged Mr Ouk to perform work on his driveway. Mr Ouk provided a quote for his services to pressure clean, acid wash, prepare and paint Mr Hutchin’s driveway. The original quote for the works involved was $4,400.00 and was later signed by Mr Hutchin’s wife. Mr Hutchins relied on the signed quotation as evidence of an agreement as there was no contract between the two parties. Mr Hutchins made part-payment in the amount of $3000.00 for the works a couple of days after. 

Mr Ouk incorrectly applied and used the wrong colour on the driveway on two occasions, causing it to bubble and lift off the driveway. To rectify the defects of his works, he provided additional invoices to Mr Hutchins to strip and clean, blast and repaint the driveway for the amount of $9,166.10. Mr Hutchins made a complaint to the Queensland Building and Construction Commission (“QBCC”) to inspect and provide report for Mr Ouk’s works.  

The QBCC Inspector found that the works provided were defective and did not conform with building standards. The report also found:  

(i) Mr Ouk is an unlicensed builder; 

(ii) The bubbles were evident over the entire area of the driveway; 

(iii) There were inconsistent levels of the paint’s quality; and 

(iv) The product used was not appropriate; and  

(v) The colour used was incorrect. 

QBCC ordered Mr Ouks’s to rectify the defects, however, no action was taken by him. The matter was referred to the Tribunal thereafter.  

The Tribunal found that the signed quotation for works is an informal agreement and would be considered a valid ground for a negligence claim. 

WAS MR OUK’S NEGLIGENT? 

A builder owes a duty of care to an owner to exercise reasonable care in domestic building work to avoid foreseeable risk of injury and economic loss.2 Mr Ouk held himself as a competent builder albeit the fact that he is an unlicensed builder, he owed Mr Hutchins a duty of care to take reasonable care when doing the work. 

QBCC Inspector’s report showed that Mr Ouk’s performance of the work was not consistent with the duty of care owed to Mr Hutchins. Mr Ouk’s duty of care includes competently stripping, painting and resealing the driveway. The Tribunal was satisfied that Mr Ouk’s breached his duty of care owed as the standards were not met. Mr Hutchins suffered monetary loss as a result of the breach and was awarded $9,166.10 to make good of such loss. 

WORKING AS AN UNLICENSED BUILDER 

A contract entered by an unlicensed builder will not be enforceable. As per s 42 of the QBCC Act, an unlicensed person is prohibited into entering contract for performing building work or performing the work itself. The effect of s 42 renders it illegal for an unlicensed builder to enter into a contract for making and performing building works.3 

Furthermore, a builder is not entitled to payment for doing work if he does not hold a licence. An unlicenced builder may only claim for reasonable payment for the materials supplied and labour carrying out the building work. A reasonable remuneration does not include allowance for personal labour, making of profit from carrying out the work, more than any amount agreed to or any amount paid for the builder’s benefit.  

Mr Ouk did not file any documents in response to the proceedings. The Tribunal found that Mr Ouk, an unlicensed builder, is not entitled to receive payment for his work. Mr Hutchins was entitled to recover the payment of $3000.00 for part performance of his work. Damages awarded to Mr Hutchins totalled to $12,166.10 

In addition to the award of damages, Mr Hutchins was also entitled to claim the Tribunal’s filing fee of $120.50. Mr Ouk was ordered to pay Mr Hutchins the sum of $12,286.60 for restitution, refund and costs of proceedings. 

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This article was written by Pernnelle Balu

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