Quilkey & Anor v Tractile Combined Pty Ltd & Ors [2023] QDC 204

Sian Keast  |  Sarah Cahill  |  Jarryd Cox

Key takeout

The parol evidence rule is a longstanding rule of contract and applies to exclude all forms of extrinsic evidence in determining the meaning or legal effect of words used in a contract.  The purpose of the rule is to protect the conclusiveness and integrity of the drafting in contracts.  However, there are exceptions to the rule. 

Where there is ambiguity or uncertainty in the subject matter of a contract, the parol evidence rule can be dispensed with, to allow courts to have regard to extrinsic material in interpreting the parties’ intended meaning of words in contracts.  Advertising material, including material published on a company’s website, and communications that are associated with a product or service provided under a building or construction contract may be relevant in determining a party’s obligations under that contract.

Facts

The Quilkeys (Quilkey) entered into a building contract with Tractile Combined Pty Ltd and Tractile Pty Ltd (Tractile).  The contract comprised of a quote and three pages of terms and conditions (Contract).  Under the Contract, Tractile was to supply and install a solar roofing system on Quilkey’s property (Tractile System).  The Tractile System, which was manufactured by Trac Group Holdings Pty Ltd (Trac Group), was designed to collect drinking water and provide solar power, solar heated hot water, insulation and roofing.

Quilkey claimed that Tractile breached the Contract because Tractile failed to provide a roof that was safe for collecting drinking water and heating hot water for domestic use.

Quilkey also alleged Tractile and the Trac Group breached warranties under sections 54 and 55 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL), which requires that the goods supplied are of acceptable quality and fit for purpose.

Quilkey contended that the supply and installation of a system that would be safe for collecting drinking water was a promise under the Contract.  Quilkey relied on information on Tractile’s website and an email sent by Tractile’s director attaching a document providing information on the Tractile System regarding the collection of rainwater for safe drinking.  Tractile asserted that they were under no legal obligation to deliver a system that was safe for the collection of drinking water, that the system otherwise did not require certification for its solar water heating system. They argued that the material on the Tractile website and in the director’s email did not form part of the Contract. 

Quilkey further contended that none of the defendants held the necessary licence to carry out the work in breach of section 42(1) of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). This section provides that only a person who holds a contractor’s licence of the appropriate class under the QBCC Act can undertake building work. Tractile conceded that no relevant building licence was held by the parties to the Contract.

Quilkey sought recovery of the money paid under the Contract and damages for the costs associated with the installation of a new roof that could safely collect rainwater for drinking, for loss of use of the property until the new roof was installed, and for distress and disappointment.

Decision

Judgment was given for Quilkey.

Breach of contract

The Contract was found to be too ambiguous to provide a clear specification for the Tractile System. The court decided to dispense with the parol evidence rule and gave consideration to extrinsic material in order to construe the Contract. The extrinsic material included the statements on Tractile’s website at the time of entry into the Contract and the information provided in the director’s email.

The court concluded that Quilkey was entitled to damages as Tractile failed to supply and install:

• a product that was safe for the collection of drinking water;
• a heated water system that achieved WaterMark certification; and
• hardware required for the water heating and solar power system.

Restitution claim

Tractile did not hold a licence of the appropriate class. As Quilkey had paid $177,645 to Tractile for work conducted in breach of section 42(1) of the QBCC Act, they were entitled to judgment for the same amount.

Consumer guarantees

Quilkey was entitled to damages of $203,274 under section 271 of the ACL against the Trac Group as the manufacturer of the goods.  The Trac Group was found to have breached consumer guarantees of acceptable quality and fitness for purpose under sections 54 and 55 of the ACL.