The Queensland District Court in the recent decision of Thallon Mole Group Pty Ltd v Morton considered whether estoppel stands in the face of the statutory obligation in section 40 of Schedule 1B of the QBCC Act (applied to domestic building contracts) for variations to be writing. Section 40(5) of Schedule 1B requires that a building contractor must not start to carry out work the subject of the variation before the building owner agrees to the variation in writing.
The builder Thallon Mole argued that it received a verbal direction from an authorised agent of the owner to vary the design of the pool balustrade and the owner was now estopped from denying that the builder was not authorised to alter the design or otherwise rely on the design change as a breach of contract by the builder.
On the evidence, the Court was satisfied a direction to change the design was given by an authorised person, albeit without the knowledge of the owner and the builder relied on that direction and suffered loss as a result.
However, the Court rejected the builder’s estoppel argument. The Court considered the legislative background to section 40 of Schedule 1B of the QBCC Act and its purpose of reinforcing consumer protection, and section 108D of Schedule 1B, the prohibition from contracting out of the requirements the Act, finding that allowing the estoppel would in effect exclude the owner’s statutory right to have variations in writing and offend s108D of Schedule 1B.
The Court held that estoppel cannot be relied upon to avoid consumer protections in Schedule 1B. Ironically, the owner’s claim for rectification to install the pool balustrade as per the original design also failed, the Court finding it unreasonable because apart from aesthetics, the design change had a practical engineering purpose by redirecting water overflow across the pool slab
