Ardon Enterprises Pty Ltd v Mizen - [1999] WADC 83

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: ARDON ENTERPRISES PTY LTD -v- MIZEN [1999] WADC 83

CORAM: MACKNAY DCJ

HEARD: 31 MARCH, 1 APRIL 1999

DELIVERED : 15 OCTOBER 1999

FILE NO/S: CIV 2910 of 1995

BETWEEN: ARDON ENTERPRISES PTY LTD
Plaintiff
AND
COLLEEN MIZEN
Defendant

Catchwords:

Contracts - Illegal and void contracts - Building work carried out by unregistered builder - Whether builder may claim reasonable cost of the work on a quantum meruit - Builders Registration Act 1939 s4 - Claim in restitution not available

Restitution - Restitution arising from unenforceable, incomplete, illegal or void contracts - Building work carried out by unregistered builder - Whether building owner unjustly enriched in the event that the building work is not paid for - Owner may rely on illegality to defeat claim

Legislation:

Nil

Result:

Claim dismissed

Representation:

Counsel:

Plaintiff: Mr R D Shaw
Defendant: Mr J D Finlay

Solicitors:

Plaintiff: Phillips Fox
Defendant: J D Finlay & Co

Case(s) referred to in judgment(s):

Commercial Life Insurance Co v Drever (1948) 2 DLR 241
Cope v Rowlands (1836) 2 M&W 150
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Foran v Wight (1989) 168 CLR 385
Haddin v Le Feuvre (1969) 2 NSWLR 32
Hagenfelds v Saffron, unreported; SCt of NSW; Equity Division; 26 March 1986
J C Scott Constructions v Mermaid Water Tavern Pty Ltd [1984] 2 Qd R 413
Lee Gleeson Pty Ltd v Sterling Estates Pty Ltd (1991) 23 NSWLR 571
Nugent Investments Pty Ltd v Seeney, unreported; DCt of WA; Library No 1873; 2 October 1987
O'Connor v Leaw Pty Ltd (1997) 42 NSWLR 285
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Smith v Mawhood (1845) 14 M&W 425
Steelhomes (1985) Pty Ltd v Hutts (1993) 9 SR (WA) 143
Williamson v Diab (1988) 1Qd R 210
Zullo Enterprises Pty Ltd v Sutton [1998] QCA 417

Case(s) also cited:

Australia & New Zealand Banking Group Ltd v Westpac Banking Corp (1988) 164 CLR 662
Branigan v Saba [1924] NZLR 481
Builders Registration Board of WA v Roroka, unreported; SCt of WA; Library No 8776; 25 March 1991
Cowan v Milbourne (1867) LR 2 Ex 230
Franklin v Manufacturers Mutual Insurance Ltd (1935) 36 SR NSW 76
Holman v Johnson 98 ER 1120
Kearley v Thomson
Kiriri Cotton Co Ltd v Dewani [1960] AC 192
Langton v Hughes (1813) 1 M&S 593
Legione v Hateley (1983) 152 CLR 406
Nelson v Nelson, unreported; 9 November 1995
Oom v Bruce (1810) 12 East 225
Radford v Ferguson (1947) WALR 14
Re Central Queensland Leather Industries Ltd
Re Mahmoud and Isaphani (supra) Archibold (Freightage) Ltd v Spanglett (1961) 1 QB 374
Re Mahmoud v Isphani (1921) 2 KB 716
Renard Construction v Minister for Public Works (1992) 26 NSWLR 234
Scarisbrick v Parkinson (1869) 20 LT 175
Teatree Gully Builders v Martin (1992) 59 SASR 344
The Commonwealth of Australia v Verweyan (1990) 95 ALR 321
Waltons Store (Interstate) Pty Ltd v Maher (1988) 164 CLR 397
Waltons Stores (Interstate) Limited v Maher & Anor [1987-1988] 164 CLR 387
Yango Pastoral Co v First Chicago (1978) 21 ALR 585

MACKNAY DCJ:

Introduction

The plaintiff's pleaded claim was for $32,592 the balance said to be due for the value of building materials and labour supplied to the defendant by the plaintiff in respect to renovation work carried out to the defendant's house at 69 Mount Street, Perth, pursuant to an agreement said to have been made in April 1994 by Mr Murray Ladner on behalf of the plaintiff and the defendant.
The defendant denied that she was liable to pay any sum to the plaintiff as the work was building work but the plaintiff was not a registered builder, whilst the contract was in any event not in writing, and further said that the contract as originally made had been a lump sum contract, and that the various events that had taken place subsequent to that were such as to deprive the plaintiff of any right to moneys beyond those that had already been paid to it. The defendant then claimed, by way of counterclaim, $924, as the cost of additional or rectification work, and $3,279, as the cost of carrying out other work which it is said the plaintiff should have done, together with an injunction restraining the plaintiff from the maintenance of any claim to recover additional moneys for building works, in the light of a representation made by the plaintiff and reliance on it by the defendant.
Subsequent to those pleadings the parties arranged for an expert's determination in relation to the value of the work carried out by the plaintiff, and that resulted in a reduction in the sum that was able to be claimed by the plaintiff.
No amendment was made to the claim, however, to reflect that state of affairs.
Had such an amendment been made, the action would no doubt have been remitted to the Local Court for trial.
The plaintiff's claim against the defendant at trial was for a sum of $18,214.
As the pleadings were some 40 pages in length, apart from the Scott schedules filed by each party, and in addition no longer reflected the true position in regard to the issues between the parties, at the end of the trial it was arranged that a statement of issues would be agreed between the solicitors for the parties and would be filed, and that was eventually done on 5 May 1999 (the statement of issues).
The principal issues between the parties thrown up by the statement of issues are:
•It being conceded that the plaintiff was not entitled to recover any sum pursuant to a contract with the defendant, as the work done was building work within the meaning of the Builders Registration Act 1939 WA (the Builders Registration Act) s4 and as the plaintiff was not then a registered builder, and if as a result any contract was illegal and void, and the plaintiff having failed to ensure that the contract was in writing, and that the defendant was provided with the necessary notice, as required by the Home Building Contracts Act 1991 WA (the Home Building Act) s4, whether the plaintiff was entitled in the circumstances to recover any balance on a quantum meruit.
•If the plaintiff was entitled to recover on a quantum meruit, and if there had been an agreement as to the total cost, whether Mr Ladner had made representations as to the supply of various items so that a deduction ought be made for the cost of those and also for the cost of the additional and rectification work alleged in the counterclaim.
•If the plaintiff was entitled to claim on a quantum meruit whether a deduction ought be made on the basis that the plaintiff was estopped from claiming beyond a particular sum as representations had been made as to the supply of particular items, the overall cost of the work and given the need for the rectification and additional work set out in the counterclaim.
Negotiation prior to work and plaintiff's entitlement to claim
Mr Ladner was the principal, and with his wife a director, of the plaintiff company and has been in the building industry for 30 years, being a qualified carpenter and cabinet maker. Neither the plaintiff company nor Mr Ladner is nor ever has been a registered builder.
Mr Ladner has carried on business through the plaintiff company for 11 years, doing mainly renovation, maintenance and repair work.
Mr Ladner first met the defendant and her husband, a Perth solicitor Mr Alan Mizen, when he did some work for them on a house in Dalkeith about seven years ago.
At the same time Mr Mizen acted for Mr Ladner in relation to a building dispute which involved the latter, the issue there also being one of a lack of registration.
It was formally conceded by the defendant here that Mr Mizen was aware that Mr Ladner was not a registered builder in 1993.
In about April 1994 Mr Ladner said that the defendant asked him to go to 69 Mount Street, Perth, to look at the house there as she required a new kitchen.
That duly occurred and Mr Ladner said he was informed that the plaintiff wished to relocate the kitchen to a room then used as a sun room at the rear of that floor of the house. Photographs and other items from various books were shown to him, Mr Ladner said. Apart from the kitchen cupboards other consequential work was also required to the sun room, together with work to an adjoining hall, which was to be converted to a dining area.
Apart from that work three cabinets were to be constructed, two for the lounge and one for the sun room, he said.
Appliances for the new kitchen were to be purchased by the defendant and Mr Mizen, Mr Ladner said he had been told. There had been no mention of any granite bench top.
The kitchen cabinets were to be paid for by the defendant direct, he said.
Mr Ladner said that he informed the defendant that his charge-out rate was then $25 an hour, or $28 an hour, he later said, and that materials would be supplied at cost to the plaintiff, which would give the defendant the benefit of a trade discount.
No request was made for a "firm quotation", Mr Ladner said, and he would and could not have provided such a figure in the absence of plans.
There was no discussion in relation to the financial position of the defendant or her husband, he said.
There was then a second meeting with the defendant, Mr Ladner said, and he became aware that a granite bench top was required for the kitchen cupboards.
A sketch plan of the work that was to be done in the kitchen was then prepared by Mr Ladner, he said.
A "budget estimate" of approximately $25,000 was also given to the defendant, that being an estimate which he would give so a client could budget and which he considered to be reasonably accurate.
In that regard a document dated 26 April 1994 in Mr Ladner's hand was produced. That was addressed to the defendant and Mr Mizen and headed "Re Budget estemate (sic) to complete proposed alterations". In it reference was made to lounge cabinets and a sun room cabinet. Reference was then made to kitchen cabinets and various items of proposed work in the sun room and the hall to a total of $24,630. There was no reference to any electrical appliances or granite bench top.
Mr Ladner was unable to recall the circumstances in which that document had been produced.
Nor was he able to recall whether there had been any agreement in relation to when the work would start.
There was no discussion about the fact that the plaintiff was not a registered builder, Mr Ladner said, and Mr Mizen had been aware that "it would take me four years to become registered".
The defendant agreed that she had asked Mr Ladner to see her, she thought in February 1994. There had been previous discussions about relocation of her kitchen, the defendant said.
When Mr Ladner duly came he was shown a file which contained photographs of cupboards, an island bench, appliances and finishes. The two then walked through the various areas. The work was relatively straightforward, the defendant said, and she knew exactly what she required.
There were subsequent discussions between Mr Ladner and the defendant, and those also involved her husband, the defendant said, as they had borrowed a sum of money for other purposes and wished to know how much relocation of the kitchen was going to cost.
In the course of those discussions the defendant said that she showed Mr Ladner the new appliances that she required and gave him the cost of the oven. There was also a discussion about a granite top for the kitchen cupboards and Mr Ladner suggested that would cost about $6,500.
There was then a meeting between Mr Ladner, the defendant and Mr Mizen arranged by the defendant to cover the question of price, she said. At that meeting Mr Ladner was asked to inform Mr Mizen of all of the work and costs involved, she said, and gave a figure of around $25,000. Mr Mizen asked Mr Ladner if he would put that in writing, and that was agreed to.
The defendant said that sometime in April or May 1994 she had telephoned Mr Ladner and told him that he could start work but that he would have to give her a quote. It was arranged that the work would commence in the second week of May, as the defendant and her husband wished it to be finished by 30 June 1994, she said.
Mr Ladner kept putting off the commencement of the work, however, and did not start until 10 August 1994, the defendant said.
The defendant said that it had been arranged with Mr Ladner that she would organise the supply of the granite bench top, as she was not dealing with the person that he wanted her to deal with, and that she would also order the appliances. Mr Ladner said that he did not require the invoices for those items and that it would be best for the defendant to pay for the same direct, she said.
No quote was ever received from the plaintiff, the defendant said, despite further promises from Mr Ladner that such would be provided.
The defendant said that prior to the initial discussions she had been aware that neither the plaintiff nor Mr Ladner had previously been registered as a builder, as she had worked in her husband's office and had been aware of the litigation which had involved Mr Ladner.
As a result the defendant said that before she told Mr Ladner to commence the work, and as her husband was adamant that she ascertained the position, she asked Mr Ladner whether he was registered "yet" and the response was affirmative. Mr Ladner further said "You don't have to worry about that. Everything's being taken care of", the defendant said.
In cross-examination the defendant said that during the previous year, when Mr Ladner had been doing some work for her, she asked him why he had not become registered in this State. The defendant said that Mr Ladner had replied that he had never had the time but that he planned to return to New Zealand and would obtain the necessary material then and "get it done".
The defendant said that she had a limited budget for the kitchen work, and the cost "couldn't go much over $26,000". Mr Ladner was always aware of that, she said.
Mr Mizen said that he was present on at least one occasion, and perhaps others, when the planned work was discussed with Mr Ladner and the defendant. The discussion that he recalled took place in the old kitchen and included a statement by the defendant that she wished to have new appliances. He then said that there was a further discussion about price, after a plan for the kitchen had been prepared, and he had asked Mr Ladner to tell him what the cost was to be and Mr Ladner had replied that "It's going to cost $25,000 maximum". Mr Mizen said that he had then asked Mr Ladner to be sure about that as he only had a certain amount of money from the bank to be used on the kitchen and the reply had been "No, that's a top figure. The only variation to it will be if the appliances and the bench top exceed what I have allowed".
As to registration, Mr Mizen said in cross‑examination that when he had ascertained in 1993 that Mr Ladner was not a registered builder he had advised him that he would continue to have trouble if he did not become registered and asked as to the difficulty in that. Mr Ladner had replied "No, it is easy. I just need to have some papers sent from New Zealand", Mr Mizen said.
In relation to the effect of the discussions which preceded the commencement of the work, I am not persuaded that Mr Ladner did represent, to the defendant, that he or the plaintiff had gained registration as a builder.
In that regard I do not rely on the defendant's evidence as to the events which occurred, where there is no support for that evidence, given the view that I formed of the reliability of her recollection.
Mr Mizen was only peripherally involved in the project, particularly at its outset.
I do find it difficult to believe that as an experienced solicitor, and having acted for Mr Ladner on a matter that particularly concerned the fact of non‑registration, Mr Mizen would not have required particulars of any alleged change in position, and indeed some satisfactory proof of the same, had a claim of that been made.
Although the recollection of Mr Ladner in relation to all aspects of the matter is far less than perfect, as appears below, I prefer his evidence on this question to that of either the defendant or Mr Mizen.
The defendant was aware that there was a need for registration.
The position is then that the defendant requested the plaintiff to do building work for her when aware that the plaintiff was not registered.
Notwithstanding those things the defendant now says that the absence of registration is a bar to the right of the plaintiff to recover any balance of the value of the work that was done for her benefit.
The Builders Registration Act relevantly provides, in relation to work in excess of the prescribed value:
"4. (1) Subject to this section, a person who is not registered under this Act shall not -
(A)(a) …
(aa)…
(b)enter into any contract or engagement to construct any building, or build any building for another in pursuance of any contract or engagement;
(c)be entitled to recover in any court any fee or charge under any such contract or engagement;"
A person who contravenes subs (1) commits an offence.
Despite those provisions courts in this State have in the past held that an unregistered builder is entitled to claim the reasonable value of work done on a quantum meruit or for unjust enrichment: see, for example, Steelhomes (1985) Pty Ltd v Hutts (1993) 9 SR (WA) 143.
The defendant says, however, that such cases ought not be followed, in the light of the change to the law brought about by the High Court in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 and David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353.
It is of course the case that in Pavey & Matthews Deane J (with whom Mason and Wilson JJ agreed) held that an action on a quantum meruit rested not on implied contract, as previously had been thought, but on a claim to restitution, or one based on unjust enrichment, and stated in that regard (at 256-257):
"To identify the basis of such actions as restitution and not genuine agreement is not to assert a judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate…. That is not to deny the importance of the concept of unjust enrichment in the law of this country. It constitutes a unifying legal concept which explains why the law recognizes, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognize such an obligation in a new or developing category of case."
In David Securities Pty Ltd Mason CJ, Deane, Toohey, Gaudron and McHugh JJ, after setting out the above statement of Deane J (at 378-379), said (at 379):
"Accordingly, it is not legitimate to determine whether an enrichment is unjust by reference to some subjective evaluation of what is fair or unconscionable. Instead, recovery depends upon the existence of a qualifying or vitiating factor such as mistake, duress or illegality."
Their Honours went on to say that once there was a prima facie obligation to make restitution the recipient "must point to circumstances which the law recognises would make an order for restitution unjust", the reason for that being:
'There can be no restitution in such circumstances because the law will not provide for recovery except when the enrichment is unjust. It follows that the recipient of a payment, which is sought to be recovered on the ground of unjust enrichment, is entitled to raise by way of answer any matter or circumstance which shows that his or her receipt (or retention) of the payment is not unjust."
The defendant then cites authority in support of the proposition that she is entitled to rely on statutory illegality as an answer to the claim by the plaintiff that retention of the benefit of the work without payment would be unjust: see Williamson v Diab (1988) 1Qd R 210; Hagenfelds v Saffron, unreported; SCt of NSW; Equity Division; 26 March 1986; Powell J; Smith v Mawhood (1845) 14 M&W 425; Cope v Rowlands (1836) 2 M&W 150; Haddin v Le Feuvre (1969) 2 NSWLR 32; Commercial Life Insurance Co v Drever (1948) 2 DLR 241.

The defendant acknowledges that the decision of the Qld Supreme Court in J C Scott Constructions v Mermaid Water Tavern Pty Ltd [1984] 2 Qd R 413 appears to be to the contrary.
That decision was relied on by White DCJ in Nugent Investments Pty Ltd v Seeney, unreported; DCt of WA; Library No 1873; 2 October 1987.
Nugent Investments Pty Ltd and J C Scott Constructions were followed by Heenan CJDC in Steelhomes (1985) Pty Ltd.
As stated, the defendant says those decisions ought not be followed. Reference is also made to the decision of the Qld Court of Appeal in Zullo Enterprises Pty Ltd v Sutton [1998] QCA 417.
That case concerned a claim by an unlicensed builder for the reasonable cost of building work on a quantum meruit. It also concerned the Queensland Building Services Authority Act 1991(Qld) (the Qld Act) s42, which is the equivalent of s4 of the Builders Registration Act.
The Qld Act provides in s42(1) that a person must not carry out, or undertake to carry out, building work unless that person is the holder of an appropriate licence under the Act. The Qld Act then provides, in s42(3) that a "person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so". Section 42(7) also provides that a person who contravenes s42 commits an offence.
There were two reasoned judgments in Zullo, delivered by McPherson JA and Pincus JA, respectively. Jones J expressed agreement with each.
McPherson JA was of the view that as a matter of statutory construction the term "any monetary or other consideration" in s42(3) included a claim for restitution or on a quantum meruit. His Honour observed (p 9) that the relevant statutory provision was "materially different" from those in other States in respect of which reliance had been placed on the appeal, and which included Lee Gleeson Pty Ltd v Sterling Estates Pty Ltd (1991) 23 NSWLR 571 and O'Connor v Leaw Pty Ltd (1997) 42 NSWLR 285. After a reference to the fact that in many cases an owner did not have the ability to reject the benefit of the work McPherson JA said that since the "undertaking to do and the carrying out of the building work are both prohibited … it is difficult to see why the expression 'monetary consideration for' doing the work should not receive a correspondingly wide meaning preventing recovery of restitutionary compensation for the prohibited work".
Pincus JA considered (p 6) that it was relevant that the legislature had chosen, unlike the position in Pavey & Matthews to prohibit the doing of the relevant work, and it was "principally that prohibition which suggests that the result of Pavey & Matthews should not necessarily govern the construction of s42(3) of the (Qld) Act". His Honour then found that the term "consideration" in the Qld Act did not preserve to an unlicensed builder a right to recover the reasonable cost of the work done.
Pincus JA reiterated that the "most important point of distinction" between the legal situation in Pavey & Matthews and that before the Court there was that the restitutionary suit was one to recover a price for work the performance of which had been prohibited by statute, the work being done under a promise the making of which was also prohibited by that statute (p 9). His Honour observed that the Court had not been referred to any appellate decision in which such a suit had been held to be permissible on the basis of unjust enrichment and that the "extension of Pavey & Matthews which we are invited to make here is into new territory". Reference was made to Restitution Law in Australia, (1995) Mason and Carter, where it is said (at 887):
"… where a contract is illegal for failure to obtain a licence for building work, a quantum meruit claim, to recover reasonable remuneration has routinely been denied … we must even today be sceptical of the restitutionary claim which is based on a request to do work expressed in an illegal contract, where acceptance of benefit takes place under the contract and the only reason for claiming in restitution is the legality."
Pincus JA observed that those authors had not referred to, and neither had he found, "any reported instance in which such a claim has succeeded". His Honour said (p 10) that he did not accept that the principle in Pavey & Matthews to the effect that a claim for a quantum meruit might be made under an unenforceable contract, ought be extended to include a case in which a statute prohibited each of the making of the contract and the doing of the work.
As a matter of statutory construction, there would seem no reason to distinguish the provision in Zullo from the position under s4(1) of the Builders Registration Act.
If one looks at the plain words of s4(1)(A)(b) and (c), the preservation of a claim in restitution or on a quantum meruit would seem an odd result. Further, there is no good reason why such an intention ought be imputed. Rather, a construction which excluded a right to make such a claim would appear more consistent with the purpose of the Builders Registration Act: see Interpretation Act 1984 (WA) s19.
The NSW Legislation considered in Lee Gleeson Pty Ltd and O'Connor is materially different to that here.
Similarly, the Qld Legislation under consideration in J C Scott Constructions was significantly different, whilst the observations made about the same were obiter, the builder there being registered.
In coming to the conclusion that a claim in restitution lay in this State, notwithstanding s4(1) of the Builders Registration Act, Heenan CJDC said in Steelhomes (1985) Pty Ltd (at 145) that the prohibition against recovery of a fee under any contract ensured that "instead of merely proving the agreement and construction of the building in accordance with it, the builder is required to justify recovery of the amount claimed by proving that it is reasonable remuneration for the work done and that the owner has accepted the benefit of that work".
With respect, I find it difficult to accept that the legislature would prohibit recovery of "any fee or charge under any … contract" merely so as to see that an unregistered builder did not recover more than a reasonable charge.
Rather, I prefer the analysis in, and consider that I ought follow Zullo, and therefore hold that a claim by an unregistered builder in restitution or on a quantum meruit for the reasonable value of building work carried out must fail, as such a claim is prohibited by s4(1) of the Builders Registration Act.
It follows that the plaintiff's claim here must be dismissed.
If the plaintiff was able to make out a prima facie claim for restitution then I consider that in any event the defendant could rely on the defence of statutory illegality, and that the claim would fail for that reason also.
It is not therefore necessary to consider the provisions of the Home Building Act.
In the circumstances I will, however, deal briefly with the other issues raised for decision, and that requires some further consideration of the evidence.
Progress of the work and further negotiation
Mr Ladner said he had started work on 9 August 1994. He rendered an account for "progress payment No.1" on 31 August drawn on the basis of "labour" and "materials", together with a claim for what were apparently disbursements, and that, and similar further accounts dated 14 September and 19 October, for progress payments Nos 2 and 3, were duly paid. Those three accounts were for a total of $29,163.
Throughout the work, and indeed before it commenced, Mr Ladner said the defendant had made changes to what was required, and each morning in the course of the work there would be a discussion about it. That had included the question of renovation of an office, in the house level below the kitchen, and he said the defendant first raised that about halfway through the work, and asked for an estimate. After some discussion of other figures Mr Ladner said that he gave a verbal estimate of $10,700 to the defendant, and "that was accepted", although he denied it was a quote.
Mr Ladner said that he became concerned with the cost of the work in the light of the many extras and in late September raised that with the defendant and Mr Mizen.
An agreement had then been made that the cost of the work, apart from the downstairs office, would be $44,000. Again, notwithstanding that agreement, Mr Ladner denied the estimate was a "firm figure".
Despite the further agreement other changes to the work were sought by the defendant and made afterwards, Mr Ladner said, and the defendant informed him that she had "a little bank account" of her own.
A carpenter employed by the plaintiff, Adam Eastoe, was also called to say that he had heard the defendant make reference to such an account, on Mr Ladner raising a concern about the "estimated budget".
Mr Ladner said that a list of "extras to estimate" was eventually provided in the plaintiff's final account, sent on 6 January 1995, those items being extra to the work the subject of the $44,000 estimate given to the defendant and Mr Mizen, he said.
There was then a meeting with the defendant and Mr Mizen, and Mr Ladner said Mr Mizen's first words had been "well, I suppose we had better sit down and work out whether this job's on a charge up or a fixed price".
In the course of discussions between Mr Ladner and Mr Mizen the defendant had come in and abused him, Mr Ladner said, and he had then left.
When asked in cross‑examination why he would prepare and send a list of extras in circumstances where he said that the plaintiff was being paid for labour on an hourly rate, Mr Ladner responded:
"What I would actually like to know is whether I actually sent that to - was that actually sent to (the defendant)?"
Mr Ladner was also shown a document, partly in his handwriting, addressed to the defendant which had originally set out, in his hand, the office alterations at a cost of $10,700, carpentry work $23,000, kitchen $5,500, bench top $6,500 and $2,000, and appliances $7,000. A later alteration, said to have been made by the defendant, altered the bench top and appliance figures and noted in each case that was the actual cost, reference being made to invoices.
Mr Ladner was quite unable to explain when the document came into existence, or its purpose. The total of the original amounts for the various items, apart from the office alterations, was $44,000, including the bench top and appliances.
The defendant said that after she received the plaintiff's second, or September, invoice, she spoke to her husband and then contacted Mr Ladner and asked about the accounts as such exceeded his quote.
Mr Ladner had then come to the house and said that he had "some bad news" and the quote "was going to go over", the defendant said.
The defendant said that she then asked her husband to join the discussion, and after he had come in Mr Ladner had said that he "had done his revised figures" and the cost would be $44,000.
After Mr Mizen said that they might have enough money to finish the kitchen, Mr Ladner had said that "because he felt really bad" he would be prepared to keep his men on site and to immediately carry out a renovation of the downstairs office and to do that work for a price of $10,700.
In relation to the office the defendant said that she had discussed the doing of that work with Mr Ladner a year or two before.
Mr Mizen had then asked what assurance he would have that the plaintiff would not exceed the stated cost again, and Mr Ladner had said "this is absolutely the top figure. This is tops. As a matter of fact, I'm sure it will come in under this but I am giving you the absolute top figure". Mr Mizen had then said that he would need to think about it and speak to the bank, and he then left, the defendant said.
The defendant said that she then asked Mr Ladner to give her a written breakdown so that the information could be given to the bank. The document setting out the various items was then written out by Mr Ladner, the defendant said. The additional material was then added by the defendant, although she said that she was not sure when that was done. The defendant also said that she had told Mr Ladner that she would use money in an account she held for the office.
In relation to the granite bench top, the defendant produced a quote from WA Marble & Granite Co dated 29 September 1994, in the sum of $4,454, the altered amount in the document.
Mr Mizen said that in September 1994 the defendant had shown him two invoices from the plaintiff which, when added to the cost of the electrical appliances and the granite bench top, exceeded $25,000 so that he asked the defendant to contact Mr Ladner.
The defendant subsequently informed him that Mr Ladner was there and on joining them he was informed by Mr Ladner that "the cost is now going to be $44,000", Mr Mizen said.
Mr Ladner then said that his men were on site and he would be able to immediately start on the office and do the work for $10,700.
On being asked how the defendant and Mr Mizen could be assured that "this is not going to happen again" Mr Ladner had said that the "figures that I have given you are absolutely tops figures", Mr Mizen said. He had then said that he would have to contact the bank to borrow money for the office, if he and the defendant proceeded with that, and then left the room.
The defendant agreed that the plaintiff's October account had subsequently been paid, but said that was simply in order to get the work finished. She had not informed Mr Ladner that she had any additional money for extras.
Conclusions in relation to other issues
The plaintiff, through counsel, conceded that no finding as to the understanding of the parties other than that included within the sum of $44,000 with the cost of the granite bench top and electrical appliances was open, given the document in Mr Ladner's handwriting to that effect.
However, in relation to both that figure, and the earlier figure, the plaintiff contended that the scope of the work had constantly changed.
As to that, my impression was, and my finding after a further consideration of the evidence is that the evidence on both sides is unsatisfactory.
The absence of a written contract, which the plaintiff or Mr Ladner would have been obliged to procure had either have been a registered builder, is plainly a factor in that.
It is hard to imagine a more disorganised job.
I would not be prepared to find that the work ultimately done by the plaintiff was materially greater in scope than that contemplated at the time the figure of $44,000 was given.
That amount was plainly intended to be a firm price for the balance of the work.
As such, if a quantum meruit or claim in restitution had been available the plaintiff would have been limited to it, assuming the work was completed, and less a credit for the actual cost of the bench top and appliances: Pavey & Matthews Pty Ltd per Deane J (257).
Alternatively, the statement as to price was a representation of fact such that it bound the plaintiff: see Foran v Wight (1989) 168 CLR 385, 435-436.
The relevant amount as adjusted is $41,211.
Apart from the total amount paid by the defendant, being $29,163, there would be deducted the amounts paid in respect of the bench top and appliances, being $12,711, and $924 being the agreed cost of rectification work. I would not find there ought be any deduction for work not done. The balance in the defendant's favour is then $1,587, apart from the cost of the office works.
However, for the reasons given the plaintiff's claim should be dismissed.