Deceptive tradie ordered to pay $30,000

A contractor has been ordered to pay $30,000 after abandoning a minor dwelling build halfway through – with the Disputes Tribunal finding his conduct “misleading and deceptive” under the Fair Trading Act 

In M Ltd v KQ, M Ltd contracted C Ltd, a company directed by KQ, to build a minor dwelling at the rear of an existing property. The turnkey contract, signed in 2023, was for a fixed price of $84,323.80. 

Work began in August 2023 but was abandoned in October 2023 when KQ left for Australia. By then, M Ltd had already paid $70,540.84 for incomplete work and later incurred further costs to fix and finish the project. 

As the sole director and sole employee of his company, KQ had instructed contractors, conduced site inspections, completed gas works and retained sole control of the work. 

Disputes Tribunal Referee John Hogan found that the abandonment caused a loss exceeding $30,000, including remedial costs, additional labour and materials, and new contract works insurance. 

Misleading and deceptive conduct 

The Tribunal considered whether KQ’s actions breached section 9 of the Fair Trading Act, which prohibits conduct in trade that is misleading or deceptive. 

Among the behaviours highlighted in evidence were:  

• KQ presenting himself as an experienced project manager. 

• KQ signing a contract at a price far lower than the likely true cost. 

• KQ demanding progress payments up front. 

• A failure to communicate. 

• A failure to pay subcontractors. 

• Abandoning the project without notice. 

Hogan noted that there is no single test for such conduct but that the law must be applied “objectively” to the circumstances. He stated: 

“All the examples submitted by [the applicant] were supported by oral and exhibited documentary evidence. Cumulatively and separately, I find they amount to misleading and deceptive conduct by KQ or were likely to mislead or deceive”. 

Company liquidation not a shield 

C Ltd, the contracting company, went into liquidation in September 2024. Hogan made it clear this did not absolve KQ of responsibility. 

“C Ltd going into liquidation does not relieve KQ of possible personal liability as a director”. 

Hogan also emphasised that directors closely involved in their company’s operations cannot escape liability under the Fair Trading Act: 

“It is a rare case where a director who participates directly in his company’s business can avoid section 9 liability, simply on the basis that he was acting only on his company’s behalf.” 

While the Tribunal dismissed claims based on director’s liability in negligence – noting that economic loss from an abandoned project does not meet that legal threshold for liability for negligence – the Fair Trading Act findings were sufficient to make KQ personally liable for the $30,000. 

The order 

“I find they [KQ’s behaviour] amount to misleading and deceptive conduct by KQ, or were likely to mislead or deceive, and, as a consequence, I find he is liable for the loss incurred and therefore the $30,000.00 claimed by the applicant,” said Hogan. 

What builders should know 

This decision underlines several key lessons for those in the construction industry: 

• Progress payments must reflect actual work completed – demanding money ahead of delivery risks breaching the Fair Trading Act. 

• Abandoning a project carries consequences – walking away without notice is likely to be ruled misleading and deceptive. 

• Liquidation doesn’t protect individuals – directors can still face personal liability where their conduct crosses the line. 

• Good records are vital – M Ltd’s evidence of payments, incomplete work and additional costs was central to the Tribunal’s ruling.