Auguste v Nikolyn Pty Ltd
[2016] FCCA 1045
•3 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUGUSTE v NIKOLYN PTY LTD & ANOR | [2016] FCCA 1045 |
| Catchwords: CONTRACT – Building contract – where contract did not stipulate price for part of the work to be undertake – additional work undertaken not part of the contract – claim for reasonable remuneration for work and labour done. |
| Legislation: Competition and Consumer Act2010 (Cth) schedule 2, ss. 4 and 18 |
| Cases cited: D & Z Constructions Pty Ltd v IHI Corporation [2013] WASC 265 DM Drainage & Constructions Pty Ltd v Karara Mining Ltd [2014] WASC 170 |
| Applicant: | ROBERT STEPHEN AUGUSTE |
| First Respondent: | NIKOLYN PTY LTD ACN 078 833 977 |
| Second Respondent: | DONATO COLASANTE |
| File Number: | PEG 324 of 2011 |
| Judgment of: | Judge Jarrett |
| Hearing dates: | 9, 10 & 11 June 2014 |
| Date of Last Submission: | 11 June, 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 3 May 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Rumsley Mr Rumsley with Mr Clifford (on 10 and 11 June, 2014) |
| Solicitors for the Applicant: | Alan Rumsley |
| Counsel for the Respondent: | Ms Breach |
| Solicitors for the Respondent: | D’Angelo Legal |
ORDERS
Judgment for the first and second respondents on the application filed on 11 November, 2011;
The application filed on 11 November, 2011 be dismissed;
Judgment for the first respondent against the applicant on the cross-claim filed on 10 January, 2012 for $99,523.67 plus interest;
The applicant pay to the first respondent the sum of $99,523.67 together with interest thereon in such sum as the parties might agree and failing agreement as fixed by the Court in pursuant to order (6) hereof;
The parties bring in agreed short minutes of orders dealing with:
(a)the question of costs on the application and crossclaim; and
(b)interest on the first respondent’s crossclaim
within 28 days of the date of these orders.
In the event that the parties are not agreed on orders for costs and interest within 28 days of the date of these orders, the application is listed for submissions about the form of orders in relation to the matters dealt with in order (5) hereof at 11.30am (Queensland time) on 13 June, 2016 in the Federal Circuit Court of Australia sitting at Brisbane.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 324 of 2011
| ROBERT STEPHEN AUGUSTE |
Applicant
And
| NIKOLYN PTY LTD ACN 078 833 977 |
First Respondent
| DONATO COLASANTE |
Second Respondent
REASONS FOR JUDGMENT
(As Corrected)
Building and construction cases are generally not within the jurisdiction of this Court. Those types of matters are generally dealt with in the relevant court of the State in which the cause of action arose.
By this application, however, Mr Auguste seeks to recover from the respondents what might ordinarily be seen as damages for delay in completing work allegedly contracted to be completed within a particular time. By way of cross claim, the first respondent seeks an award for the reasonable cost for work and labour done by way of variations and additional to the relevant building contract.
At this point, an informed reader might be wondering how these claims have come to be litigated in this Court. The answer, according to Mr Auguste, is simple. He pursues his claim for damages on three bases. First, he says that the respondents are liable to him pursuant to ss.82 and 87 of the Competition and Consumer Act2010 for breaches of s.52 and s.51A or alternatively Schedule 2 s.18 and Schedule 2 s.4 of the Competition and Consumer Act. Secondly, he argues that the respondents are liable to him pursuant to ss.77 and 79 of the Fair Trading Act 1997 (WA) for breach of ss.9 and 10 of that Act. Finally, he argues that he is entitled to “damages for breaches of an agreement between the applicant and the first respondent of March 2010”. He claims interest on damages plus costs.
This Court has original jurisdiction in respect of claims made pursuant to the Competition and Consumer Act. The Court has no original jurisdiction in respect of the other claims (save for interest and costs). The other claims, it is said, fall within this Court’s associated jurisdiction conferred by s.18 of the Federal Circuit Court of Australia Act1999.
The first respondent’s cross claim is one in respect of which the Court has no original jurisdiction. It arises by reason of the Court’s associated jurisdiction. Neither party argued to the contrary.
The applicant’s claim for misleading and deceptive conduct is formulated in this way:
a)In a telephone conversation said to have occurred in “March 2010”, the second respondent said to Mr Auguste:
“It should only take a couple of months to do the work”;
b)That was a representation as to the future matters for the purposes of the Competition and Consumer Act and Fair Trading Act;
c)In reliance upon the representation Mr Auguste entered into an agreement for the first respondent to carry out certain plumbing works at a residential subdivision that Mr Auguste was then undertaking;
d)The representation was false because:
i)The respondent should have completed the work within two months;
ii)To complete the work in two months, the first respondent needed to have one tradesman and one apprentice onsite for the duration of the works;
iii)The first respondent did not tell Mr Auguste that:
1. The first respondent did not have one tradesman and one apprentice onsite for the duration of the work; or
2. The one workman onsite would be removed from the site to work elsewhere.
iv)If the first respondent had disclosed the matters set out above Mr Auguste would not have engaged the first respondent to undertake the work.
The applicant’s misleading and deceptive conduct claim must fail. I am not satisfied that the second respondent for himself or on behalf of the first respondent made the representation claimed by Mr Auguste. Moreover, even if the representation was made I am not satisfied that when it was made:
a)Mr Colasante intended Mr Auguste should rely upon it as an accurate estimate as to how long it would take to complete the relevant work; or
b)Mr Auguste considered that Mr Colasante was giving an estimate of the length of time it would take to complete the work upon which Mr Auguste could rely; or
c)Mr Auguste relied, in fact, upon the representation as he alleges, or at all.
Further, Mr Auguste’s breach of contract claim must fail because I am not satisfied that the first respondent has breached the contract for the work in the way in which Mr Auguste alleges. Moreover, he has not proved any damages flowing from the breach alleged by him.
The first respondent’s cross-claim must succeed, but not to the extent claimed.
To understand those conclusions, it is necessary to know something of the facts.
The facts
In 2006 Mr Auguste owned a parcel of land situated at 20 (Lot 123) Hardey East Road, Wattle Grove. The lot was 1.6 hectares in area and title was reflected in one certificate of title.
Mr Auguste sought to develop Lot 123 by subdivision. By an application to the Western Australian Planning Commission for that purpose - application WAPC 127835 - in March, 2006 Lot 123 was approved for subdivision (subject to conditions) into five single dwelling lots and a balance landholding of 1.38 hectares.
By another subdivision application - WAPC 127834 - approved in March, 2006 the balance landholding of 1.38 hectares was approved for subdivision (again, subject to conditions) into five single house lots, a grouped housing lot and a public open space.
However, those subdivision applications were superseded by subdivision application WAPC 131308, which received conditional approval from the Western Australian Planning Commission on 25 August, 2006. That subdivision application sought to create four freehold lots (called in these proceedings ‘green title’ lots) and a public open space. The approval was valid for until August, 2009.
When that subdivision was ultimately completed in April, 2011 (after the events of immediate interest in this case and pursuant to another subdivision application) the four green title lots came to be Lot 1231 (existing house), Lot 1232 (northern lots), 1233 (existing house) and Lot 1234 (southern lots).
Mr Auguste planned to further develop Lots 1232 and 1234 by obtaining survey strata approvals - WAPC 711-06 and WAPC 863-062 respectively – in respect of each of those lots. He secured the survey strata approvals initially in 2006. However, each was subject to the creation of the new lot (created pursuant to WAPC 131308) which was to be the subject of each survey strata approval. Each survey strata approval depended upon, among other things, the issue of a new Certificate of Title creating each respective lot upon which it was based.
As counsel for the respondent helpfully summarised:
a)WAPC survey strata approval 711-06 dated 24 August 2006 is conditional upon Lot 1232 being created and a certificate of title being issued for that lot; and
b)WAPC survey strata approval 863-06 is conditional upon Lot 1234 being created and a certificate of title being issued for that lot.
WAPC 131308 expired in August, 2009. Mr Auguste then made another subdivision application - WAPC 140805 - which was approved on 3 February, 2010. By that application, the whole of Lot 123 would be subdivided into four green title lots and public open space. That approval was valid for three years from the date of approval. It was to lapse in February, 2013.
The approval WAPC 140805 was conditional upon Mr Auguste complying with a number of terms set out in the approval. Relevantly, the conditions included:
a)suitable arrangements being made with Water Corporation for water, sewerage and drainage, which included payment of a contribution towards infrastructure;
b)satisfactory arrangements being made with the Shire of Kalamunda for the making of a contribution towards infrastructure;
c)development, including landscaping and reticulation, of the public open space.
The first respondent carries on business as a plumbing contractor under the name CPL Plumbing. Mr Colasante, the second respondent is a director and shareholder of the first respondent.
Mr Auguste commenced negotiations with Mr Colasante for the performance of plumbing works at the proposed development in October, 2009. As the history set out above shows, the development had been on foot for some time. There was another plumber that Mr Auguste had engaged to do the necessary work, but Mr Auguste had a falling out with that plumber and so he needed another. They were already in discussion about another of Mr Auguste’s developments known as Mill Point Road.
Mr Auguste provided information about the required work to Mr Colasante by way of emails and attachments to those emails. There were two emails sent on 14 October, 2009. There were another two emails sent on 30 October, 2009.
Attached to the first of the emails of 14 October, 2009 was a site plan, clearly marked ‘PRELIMINARY ISSUE – NOT FOR CONSTRUCTION’. On it there was noted a drainage junction where a storm water drain from the proposed subdivision joined into a larger drain or creek noted on the plan as ‘Woodlupine Brook’. Where the smaller drain met the larger, the plan had noted on it, ‘PRECAST RC HEADWALL TO SUIT 450 DIA PIPE’. Then, underneath those words, the following appears, ‘HOLD TYPE PF CPNNECTIONTO EXISTING DRAIN PENDING CONFIRMATION FROM WATER CORP OF ACCEPTANCE’.
It was clear from a plain reading of the plan that:
a)it was not a ‘for construction’ drawing. It was a preliminary drawing only; and
b)the connection type at Woodlupine Brook was yet to be determined and approved by the Water Corporation.
Attached to the second of the emails of 30 October, 2009 were some drawings of the proposed connection at Woodlupine Brook drawn by Baker Drafting Services Pty Ltd. The connection was described a type ‘B’ connection. It was approved by the Water Corporation. In fact, as long ago as 2006 the Water Corporation had specified and approved a type ‘B’ connection for the Woodlupine Brook connection.
Mr Colasante’s evidence was that he had not seen the subsequent drawings from Baker Drafting Services. Nonetheless, he did not deny that he had received them. Thus it was clear, in my view, that following the last email from Mr Auguste (with its enclosures) there could be no doubt that the connection that was required at Woodlupine Brook was a connection that had Water Corporation approval. It was also beyond doubt that the relevant connection was that which was drawn by Baker Drafting Services. Mr Colasante had been provided with the emails from the Water Corporation signifying their approval to the connection detail drawn by Baker Drafting Services.
Mr Auguste alleged in his amended statement of claim and in his affidavit of evidence in chief that in October or November there was a meeting between Mr Auguste, Mr Colasante and Mr Robberto Potente at Mr Auguste’s offices in South Perth at which, he alleged, some additional plans and instructions were given to Mr Colasante concerning the work the first respondent was to quote on. In cross-examination, however, initially Mr Auguste agreed that no such meeting had occurred. When counsel for the respondents asked Mr Auguste about whether information from a person called Symington contained in an email dated 3 August, 2009 was given to Mr Colasante, he thought that there had been a meeting, but he did not know when. He could only say that it had taken place before the first respondent provided its quotation for the work that Mr Auguste wanted undertaken.
I am not satisfied that there was any meeting in October, 2009 as Mr Auguste alleged in his evidence in chief. Mr Auguste’s evidence on this point was most unsatisfactory. I am not satisfied that Mr Colasante was given additional plans and instructions beyond those attached to the emails of 14 and 30 October, 2009. Whilst Mr Colasante gave evidence that there was a meeting between he, Mr Auguste and Mr Potente at Mr Auguste’s South Perth office in February, 2010 according to Mr Colasante, that meeting was about work at another project known as Mill Point Road.
According to Mr Colasante the plans and other instructions that Mr Colasante had in October and November, 2009 were confused. His evidence in cross-examination was that the local authority plans referred to a ‘precast headwall’. Then there were the drawings from the Water Corporation that referred to a modified type ‘B’ headwall but which also had detail for the construction of a type ‘A’ headwall on them. There was also an email that referred to a ‘splayed type ‘B’ headwall’. Mr Colasante accepted (indeed, it was his evidence in chief) that in October, 2009 he had received all of the plans and drawings dealing with the connection and headwall to which I have earlier referred.
Mr Colasante’s suggestion that the detail surrounding the Woodlupine Brook headwall and connection was confusing was disingenuous. There was nothing confusing about the plans and drawings. The plan that referred to the precast headwall was not issued for construction. It had a clear notation that it was a preliminary drawing and that the Water Corporation was to provide its acceptance to the connection type for the drain. The subsequent email correspondence and drawing made clear what was to happen with the connection and headwall.
Ultimately, in November, 2009 Mr Colasante told Mr Auguste that he was not interested in quoting on the work. He thought that the plans were confused and the scope of works unclear. The parties fell silent for some months.
Contact was re-established in relation to this project in March, 2010 following the meeting in February, 2010 at Mr Auguste’s South Perth offices. Mr Colasante was trying to secure work from Mr Auguste on the Mill Point Road project. Mr Auguste told him that he was desperate for a plumber for the project at Lot 123. Mr Colasante thought that if he undertook that work, it might help his chances of securing that work at Mill Point Road. Mr Colasante gave evidence that at this meeting he discussed with Mr Auguste the pre-fabricated headwall. I do not accept that evidence. Mr Colasante’s evidence about that was very general. He did not attempt to give the conversation in which he claimed it was raised. That there was a discussion about the prefabricated headwall at that meeting was not put to Mr Auguste when he was cross-examined.
In November, 2009 Mr Auguste had obtained a quote for the work from another plumbing company, Ballantynes. The work that Ballantynes had quoted on included the installation of a precast concrete headwall at Woodlupine Brook. According to Mr Auguste’s evidence, Ballantynes was not asked to quote for the works on the basis of a type ‘B’ connection at Woodlupine Brook.
Mr Auguste says that in March, 2010 he had a telephone conversation with Mr Colasante about the plumbing work for his project. The first respondent had not, at that stage, given any quote for the work. Mr Auguste’s evidence, set out in his affidavit of evidence in chief, was:
22.During a telephone conversation between about 5 March and 11 March 2010, I recall discussing the quotation with Mr Colasante, as follows:
22.1I said words to the effect “I have not received your price for the work at Woodlupine Waters”.
22.2Mr Colasante said words to the effect “have you got another price for the work?”
22.3I said words to the effect “I have a quote from another plumber to do the work for $61,810 plus GST”.
22.4Mr Colasante said words to the effect “I will match it”.
22.5I said words to the effect “I get paid when the sales of the lots settle, so I need to get titles and settle before I pay you, so payment will be about 90 days from when the work is finished.”
22.6Mr Colasante said words to the effect “it should only take a couple of months to do the work, so payment 90 days from invoice is ok.”
22.7I said words to the effect “I will send you an email to confirm the details”.
Mr Colasante denied that this conversation took place. He said, and I accept, that he had never seen the quote prepared by Ballantynes until these proceedings. He gave evidence, again which I accept, that he would not match the price of another plumber without first understanding the basis for the quote that he was asked to match.
As I have set out above, the Ballantynes’ quote was prepared on the basis that the Woodlupine Brook connection was a type ‘A’ or precast connection. Oddly, Mr Auguste gave evidence that Mr Colasante said that he would match Ballantynes’ price for the work, although he would not accept that meant that Mr Colasante was quoting for the installation of a pre-cast or type ‘A’ headwall, not a type ‘B’ headwall.
Nonetheless, as I have found above, Mr Colasante knew that the connection at Woodlupine Brook was to be a modified type ‘B’ connection and headwall as approved by the Water Corporation.
Further, Mr Colasante did not accept that he had ever said that the work would take two months. He denied that in his evidence in chief. He was not cross-examined about that matter. I accept his denial.
In cross-examination Mr Auguste had a very poor recollection of this conversation. At best all he could say was that there were “discussions” about the work taking two months to complete. However, eventually he confirmed that the conversation took place in much the same way as set out in his affidavit of evidence in chief.
Nevertheless, I am not satisfied, on the balance of probabilities, that Mr Colasante ever mentioned that it would take ‘a couple of months’ to complete the work. Nor am I satisfied that Mr Colasante said words to that effect.
In that respect, I have taken into account, amongst other matters, that not once in the extensive correspondence that passed between the parties and those that represented them after the parties fell into dispute, did Mr Auguste suggest that there had been such a representation. These proceedings are the first time such an allegation was ever raised by Mr Auguste. In fact, the course of correspondence following the development of the dispute demonstrates that Mr Auguste contended that the work was to be carried out in a reasonable time and at one point contended that a reasonable time was three months rather than two. That is entirely inconsistent with such a representation having been made. Mr Auguste’s explanation for not raising the oral representation allegedly made by Mr Colasante earlier than these proceedings was utterly unconvincing.
I accept Mr Colasante’s evidence that in late February or early March, 2010 he attended a site meeting with Mr Auguste and another person at Lot 123 for the purpose of quoting on the work. The site of the headwall was not inspected because it was overgrown with long grass and Mr Colasante did not want to risk being bitten by snakes.
I accept that Mr Colasante telephoned Mr Auguste in early March and said the price for the works were working out to be about $61,000. He told Mr Auguste that he was not able to finalise the quote because he was waiting for a price for a component known as the GPT (or Gross Pollutant Trap) lid.
I also accept that Mr Colasante raised with Mr Auguste the state of the plans for the work. They were incomplete and insufficient for construction. Some aspects of the work lacked full design. I accept that Mr Auguste said to Mr Colasante in that telephone conversation that he would get completed plans showing full design of the works prior to the first respondent commencing work. I accept that Mr Auguste also said words to the effect the price was within his budget.
Mr Colasante gave evidence that Mr Auguste said he needed 90-day payment terms and that the first respondent would not get paid until 90 days after the works were completed. Mr Colasante accepted that proposition.
Mr Colasante appointed an employee of the first respondent, Mr Steve Sialtsis as the supervising tradesman for the project. Work was to start on 12 March, 2010. Mr Sialtsis gave evidence in the proceedings. His evidence confirmed that he was appointed by Mr Colasante to be the first respondent’s supervisor at the Lot 123 project.
Remarkably, Mr Colasante did not give Mr Sialtsis any documents or the plans that he had so as to assist him. Mr Sialtsis was told to speak with Mr Auguste and other employees of the first respondent on site to see what was needed. Those other employees – “Shep” and “Ian” had some plans in their possession, but they were not called to give evidence and it is impossible to determine what plans they had.
As the supervisor for the first respondent Mr Sialtsis was responsible for managing the works carried out by the first respondent on site, supervising staff and ensuring the plumbing works were compliant with the relevant plumbing regulations. He also had to organise the machinery and plant for each item of work in advance and ensure all the first respondent’s employees completed time sheets.
Mr Sialtsis kept a diary of the works on the site. The diary recorded the work done at the site on a daily basis. Mr Sialtsis made his entries on the day the entry appears in the diary or shortly thereafter. He annexed copies of his diary to his affidavit of evidence in chief. The veracity of his diary was not called into question.
Mr Sialtsis gave evidence that he would contact Mr Auguste regularly to obtain plans and instructions. There were problems from the outset. Mr Sialtsis sets out in considerable detail the difficulties that he encountered with obtaining reliable plans and instructions from Mr Auguste. I do not intend to set out his lengthy evidence. Mr Auguste did not take issue with much of Mr Sialtsis’ evidence. He was cross-examined on a few matters but by way of clarification. Mostly, his evidence was left unchallenged. There is no reason not to accept it in its entirety.
The first respondent commenced the plumbing works on the site on about 12 March, 2010. By the time that the first respondent commenced the work, the parties had negotiated the price for the first respondent’s engagement. However, it was not documented until an exchange of emails on 17, 18 and 19 March, 2010 between Mr Auguste and Mr Colasante. The agreed price was $61,810. The work to be performed was set out in the email of 17 March, 2010 as follows:
I confirm that you will be completing work in accordance with the plans and specifications as supplied and noted below:
1. Contract sum $59,500 , terms 90 days. I will advise the entity to Invoice (it maybe that we pay the builder and he pays you)
2. Storm water property pits and grated lids to 3 existing sumps
3. Replace GPT lid with correct flush mounted
4. Install headwall to existing out pipe in Woodlupine Brook, in ‘Soils aint Soils’
5. Install internal sewer
6. Install 50mm water service to suit Water Corp Multi metering to individual meters supplied by CPL, (to be read by Water Corp) and gas service by others; in coordination with Triventi Electrical
7. At additional cost to supply 50mm water run from bore to POS, using existing prelay and to dig a trench for future retic
8. At additional cost to locate and remove septic tanks from rear 20 A Hardey Rd, the large house next to the 150mm sewer
9. additional cost to locate, drain and remove septic tanks from rear 121 Sheffield Rd Wattle Grove
Please note that, to assist your subcontractors I have engaged the services of Civil Engineers Shawmac, Tony Shaw, or Ryan 9355 1300. They are providing set out details fo (sic) the property pits and sewer advice. please note that we wish to avoid the building envelopes as set out on the plans; that North Lot 10 is the mirror plan, with the alfresco on the Fennel Crs side
The surveyors are Survey 21, pls deal through me. They have visited site and provided a datum near the West Pwr box in Fennell Crescent
The price was corrected to $61,810 by Mr Colasante’s email of 18 March, 2010 and accepted by an email from Mr Auguste on 19 March, 2010.
There is no dispute that the price did not include the price of the last three items of work on the list. That was additional work to that which was disclosed in the emails of 14 and 30 October, 2009 and their attachments. Until the receipt of the email of 17 March, 2010 it seems that Mr Colasante did not know that Mr Auguste required that work to be done.
The first respondent completed all of the work asked of it by Mr Auguste by 23 October, 2010. There are some disputes about whether that work was within the original scope of works, but I will deal with those issues later in these reasons. In terms of the particular items in the email of 17 March, 2010, I find that the work therein was completed as follows:
a)Item 2 (including storm water pipe mains to interconnect the pits to the storm water outlet):
a.Pits:
i.Northern lots: commenced 8 April 2010 and completed 28 April 2010.
ii.Southern Lots: commenced 8 April 2010 and completed 28 April 2010.
b.Storm water main:
i.Northern Lots: commenced 15 April 2010 completed 20 April 2010.
b)Item 3
The GPT lid was a prefabricated pit and had been installed at the wrong height. The Applicant later attended to this after we had measured it on numerous occasions.
c)Item 5
a.Northern Lots: commenced 12 March 2010 and completed 25 March 2010.
b.Southern Lots commenced 26 March 2010 and completed 7 April 2010.
d)Item 6
a.Northern Lots: commence 24 May 2010 completed 28 May 2010.
b.Southern Lots: commence 24 May 2010 completed 27 May 2010.
I will deal with item 4 – the headwall later in these reasons.
On 15 November 2010 the first respondent invoiced Mr Auguste at the end of the additions and variations to the contract and issued invoice 26405 for $61,810.00.
On 21 December 2010, CPL issued invoice 26674, for $68,410.00 (excluding GST).
On 4 March, 2011 the first respondent issued invoice 27086 for $66,840.00 (excluding GST) and on 30 May, 2011 it issued a final invoice for $20,538 (excluding GST).
Mr Auguste paid $10,000 to the first respondent on 21 December, 2010 and a further $57,991 on 9 June, 2011. A total of $67,991.00 has been paid (the contract price plus GST).
Mr Auguste’s claim
Mr Auguste’s claims based upon a representation about how long it would take to do the work must fail because, as I have set out above, I am not satisfied on the balance of probabilities that Mr Colasante made any representation as to time to complete the works.
However, even if that finding is erroneous, I am not satisfied that either:
a)Mr Colasante did not have reasonable grounds for making the representation; or
b)Mr Auguste was induced by those words to make the contract with the first respondent, or in any other way relied upon those words.
The evidence before me demonstrates that the first respondent was able to complete items 2 – 6 of the 17 March email (save for the Woodlupine Brook connection and headwall) within about 10 weeks of the commencement of the work. Thus, even if Mr Colasante had made the representation about how long it would take to complete the work the subject of those items in the 17 March email, the course of the work demonstrates that it was a reasonable time estimate.
Further, I am satisfied that Mr Auguste did not rely upon anything that Mr Colasante said about the time it would take to do the work. The context of the conversation set out by Mr Auguste in his affidavit of evidence in chief demonstrates that the statement about “a couple of months” to do the work demonstrates that Mr Auguste did not seek an estimate of the time for the work to be completed. It was offered by Mr Colasante in the context of a discussion about when the first respondent might be paid for its work. Even if the words were spoken, it was neither offered nor received as a genuine and reliable estimate of the time it would take to do the work then under consideration.
Moreover, Mr Auguste gave evidence that he never discussed his own time frames with Mr Colasante. He never told Mr Colasante that he needed the first respondent to complete its work within a particular timeframe because any of the relevant approvals were about to lapse.
Finally, any representation that Mr Colasante may have made in the relevant telephone discussion about the time it would take to complete the work was rendered unreliable by the inclusion of additional work in the contract by the 17 March, 2010 email. As to that matter, Mr Auguste said in cross-examination (T41 – 42):
All right. So while we’re looking at that page 48, items 7, 8 and 9, that’s work to be done by the first respondent at additional cost, isn’t it? Yes.
That’s not work that he knew he was doing when he was talking about – when he gave you the quote of 61-odd thousand dollars, is it? Correct.
That’s why it’s summary form, isn’t it, because you didn’t have the details at that point, did you? When you say “summary form”
Well, that’s why it was to be done at additional cost. Once you provided the necessary information, that work could be worked out and the price of it worked out, couldn’t it? It was intended to clarify that it was an additional cost and not included in the agreed sum.
Yes, I understand that. And it wasn’t something – you just said a moment ago, you’ve agreed – it wasn’t something Mr Colasante knew about when he provided you the quote? Correct.
So you could not possibly have thought at that time that any comment as to how long it would take could include work he didn’t even know about, would you? Correct.
So any comment he made about, “It should only take a couple of months,” couldn’t possibly have included the additional work, could it? Correct.
Or the variation work that followed? Correct.
Even if Mr Colasante had said that it would take a couple of months to do the work as Mr Auguste alleges, the requirement to undertake additional work must mean that the time estimate claimed to have been given by Mr Colasante was no longer reliable. Mr Auguste conceded as much in cross-examination.
Mr Auguste’s misleading and deceptive conduct claim has another aspect to it. He alleges that to complete the works within two months, a reasonably competent and diligent plumbing contractor would require one tradesman and one apprentice on the site for the duration of the works. He alleges that the first respondent or Mr Colasante did not tell him that he would not have those resources available on site for the duration of the works, or that the workman on site would be asked to go to other sites whilst the work was being carried out for Mr Auguste. He alleges that had he known those things, he would not have engaged with the first respondent to do the work.
However, Mr Auguste only led evidence about what a reasonably competent and diligent plumbing contractor would require by way of labour resources to complete the work from one witness, Anthony Shaw. Mr Shaw was not available for cross-examination. He is described as a civil engineer. In circumstances where Mr Shaw was not available for cross examination, I do not intend to give Mr Shaw’s evidence any weight. There was no evidence of a request from Mr Auguste for Mr Colasante to give details of the labour resources that the first respondent would deploy to complete the work.
Moreover, he did not plead, and made no attempt to demonstrate that in the circumstances of this contract there was an obligation upon the first respondent or Mr Colasante to inform Mr Auguste about the matters that he now says the first respondent ought to have told him. That is to say, there was no attempt to establish that there was a duty upon the first respondent or Mr Colasante to inform Mr Auguste about those things.
Mr Auguste’s claims based upon ‘sections, 52, 51A 82 and 87 and Schedule 2 sections 4 and 18 of the Competition and Consumer Act 2010’ and ‘Sections 77 and 79 of the Fair Trading Act 1987… in breach of section 10, including by operation of section 9, of the Fair Trading Act 1987’ must fail. Those causes of action are based upon a representation that was never made.
However, despite all of that, even if I was persuaded that the first respondent had engaged in misleading and deceptive conduct as Mr Auguste alleges, I am not satisfied that Mr Auguste suffered any loss because of the failure of the representation allegedly made by Mr Colasante.
Mr Auguste’s damages claim is for the loss due to the conditions of the survey strata approvals not being met in a timely way before they lapsed. Consequently, he says, there were additional financing costs and the costs of subsequent planning approvals.
The two survey strata approvals lapsed in August and October, 2010. Mr Auguste argues that had the first respondent completed its work in a timely way, the approvals would not have lapsed and the sales of the relevant properties would have settled by 1 July, 2010. He claims “interest charges” on the settlement funds that he says he would have received by 1 July, 2010. He also claims the cost of completing a noise assessment which was required by the subsequent approval.
There was no attempt to identify any particular work done by the first respondent with any particular approval. For this purpose, the first relevant approval is that which would create the green title lots. The second group of approvals were the survey strata approvals for the northern and southern lots. The headwall works were relevant to the first approval. Until that was done, the green titles could not be issued. There were other conditions that needed to be met, such as the payment of infrastructure costs to the local shire council.
The evidence demonstrates that soon after the completion and acceptance by the Water Corporation of the Woodlupine Brook connection, Mr Auguste applied to the Western Australia Planning Commission for further survey strata approvals in respect of the northern and southern lots. He claims that he had to do so because of the first respondent’s delay in completing the work.
However, Mr Auguste did not achieve the issue of the green title lots upon which the survey strata approvals were dependent until much later than when the first respondent completed its work. He did not fulfil the conditions and requirements of application 140805 until at least March, 2011. The conditions of that approval needed to be fulfilled so that the titles to Lots 1232 and 1234 could be issued and thereby satisfy the first condition of the survey strata approvals issued in respect of the proposed northern and southern lots.
The issue of the lot titles under the green title subdivision and the issue of the survey strata titles for the northern and southern lots could happen more or less simultaneously if the relevant approvals remained current. Thus had the survey strata approvals for the northern and southern lots not lapsed by the time the first respondent completed its work, if might have been the case that the subdivisions could have been completed under the original survey strata approvals obviating the need for fresh applications. However, the evidence demonstrates that even if that the first respondent had completed its work before the lapse of the survey strata approvals for the northern and southern lots, the subdivisions could not have been completed before they lapsed.
The survey strata approvals for the northern and southern lots were each subject to a condition, amongst others, that the electricity reticulation throughout the subdivision would be approved by the electricity authority Western Power. In that respect, I have evidence from Vincenzo Lanza-Volpe, a licensed electrician and the owner of TES Electrical Services. TES was engaged in September, 2009 by Mr Auguste to quote on the supply and installation of underground electricity reticulation for the purposes of the survey strata approvals for the northern and southern lots. According to Mr Lanza-Volpe’s evidence, which was not the subject of challenge, TES Electrical Services commenced work on the site on 27 May, 2010. It did not complete the electricity reticulation until February, 2011. It was not until 17 March, 2011 that Mr Auguste obtained the necessary approvals from Western Power in relation to the electricity reticulation for the subdivision of the northern and southern lots.
Accordingly even if the first respondent had completed its works under the contract before the survey strata approvals for the northern and southern lots had lapsed, the conditions of those approvals would not have been met before they expired. Accordingly any delay for which the first respondent might be seen as responsible had no impact upon Mr Auguste’s ability to complete the subdivision according to the original or the refreshed approvals. The original approvals were always going to lapse because the electricity reticulation was not approved by Western Power until March, 2011. According to Mr Lanza-Volpe there was nothing done, or not done, by the first respondent which delayed the completion of the electricity reticulation by TES Electrical Services.
Counsel for the respondents submits, and I accept, that none of the conditions in 140805 which needed to be satisfied in order to get the four lots the subject of that application approved (and their respective certificates of title issued) had anything to do with the work being done by the first respondent.
Thus, even if Mr Auguste could make out his misleading and deceptive conduct case, any relevant conduct by the first respondent was not the cause of any of the loss claimed by Mr Auguste.
Mr Auguste also claims that, aside from his misleading and deceptive conduct claim, there was an implied term in the contract that the work would be carried out by the first respondent within a reasonable time. His case now is that a reasonable time to complete the work was two months from commencement.
The respondents accept the proposition that the contract was subject to an implied term that the work would be carried out within a reasonable time.
I find that a reasonable time for the completion of the works was about three months excluding any variations. That finding is consistent with Mr Auguste’s case as at 27 May, 2011 when his solicitor wrote to the first respondent about the dispute that had developed between the parties. In that correspondence, Mr Auguste, by his solicitor, argues that “A reasonable time for the works was no more than 3 months excluding variations”. As to the variations, he said, “A reasonable time for the variations was no more than an additional 2 months.”
Mr Sialtsis gave evidence about the progress of the works on site from their commencement. As I have already said, his evidence was not the subject of challenge. I accept his evidence unreservedly.
Annexed to his affidavit are copies of the plans that Mr Sialtsis was given by Mr Auguste from time to time for the work. Many of the plans are different in material respects. Mr Sialtsis explained in his evidence the difficulty that the inconsistencies caused him when programming and carrying out the work. The lack of proper reliable and consistent plans caused delays while issues were clarified.
Moreover, some of the plans had incorrect levels on them. For example, Mr Sialtsis’ evidence about the incorrect sewer levels on the plans for the northern lots was unchallenged. According to him the incorrect levels caused delays and extra work.
Another example of the lack of proper plans resulting in extra work and delay concerns the location of “sleeves” that had been installed by a previous contractor. The sleeves were installed under roadways and other installations and permitted the passing of other pipes and services through them so as to avoid disturbing the roadway or other installation. There were no plans showing where they had to be installed. According to Mr Sialtsis, Mr Auguste pointed out the general area where the sleeves were installed, but he was wrong and much time and effort was required to properly locate them.
There are many other examples. They are set out in Mr Sialtsis’ evidence as I have said. He was not effectively challenged about any of them.
The evidence demonstrates that, aside from the Woodlupine drainage connection and the GPT lid, all of the work requested by Mr Auguste was completed by 31 May, 2010. Mr Barry Tonkin, a civil engineer was called to give evidence for the first respondent, amongst other things, about the nature and extent of the work undertaken by the first respondent in relation to this contract. His evidence, which I accept, was consistent with the evidence of Mr Colasante and Mr Sialtsis that the work required by items 2 – 9 in the email of 17 March, 2010 (aside from item 4 which was also complete but not in accordance with the contract and separately, the GPT lid) was complete by 31 May, 2010. The GPT lid was completed on 16 June, 2010. All that work was completed within the time found by me to be a reasonable time for the completion of the contract work and the additional work (a total of 5 months).
As I have set out above, it was part of the original scope of works that the first respondent would install a type ‘B’ connection and headwall in accordance with the Baker Drafting Services drawings. The first respondent did not do that. The work associated with the installation and then removal of the precast headwall that was initially installed, is not work for which the first respondent should be paid. However, I will deal with the costs of that later when I deal with the counterclaim.
For present purposes, it is the delay caused by the re-working of the headwall that is important. The evidence of both Mr Sialtsis and Mr Wray, an inspector from the Water Corporation, is that the rebuilt, type ‘B’ connection was in place and complete by 25 August, 2010. It was Mr Wray’s task, on behalf of the Water Corporation, to inspect and accept drainage infrastructure such as the Woodlupine drainage connection. Without that acceptance, the necessary conditions for the subdivisional approval could not be met.
Thus, by a week or so outside of the five- month period I have found was a reasonable time to complete the contract works and additional works, the first respondent had completed all of the matters required of it by the contact reflected in the email of 17 March, 2010.
However, Mr Wray would not accept the completed type ‘B’ connection because the bank surrounding the connection had been compromised by the construction works. Accordingly he directed that remediation works be carried out to the bank to stabilise it. The first respondent carried out the works at Mr Auguste’s direction, and by 22 September, 2010 Mr Wray was happy with the connection and associated works. He signified his acceptance of them.
Mr Wray points out in his evidence that none of the plans of the Woodlupine drainage connection (including the drawings by Baker Drafting Services) provided for any stabilisation works for the bank surrounding the drainage connection. That work only became necessary after the Water Corporation required it to be carried out following the inspection on 25 August, 2010. In my view, it was not work that was within the original scope of works. Neither Mr Auguste nor the first respondent suggested that the work was foreshadowed or ought reasonably to have been anticipated as part of the construction of the type ‘B’ headwall. That work was to be undertaken by the first respondent at additional cost to Mr Auguste and was not work that was to be undertaken within the reasonable time period for the carrying out of the work pursuant to the email of 17 March, 2010.
The evidence shows that apart from the work which was the subject of the 17 March email, from 25 August, 2010 the following additional work was undertaken:
a)the remedial works necessary to restore the creek bank at the headwall at Woodlupine Brook;
b)constructing a revised stormwater layout;
c)the repair of some pipework damaged by others; and
d)the cleaning out of man holes and some footpath work.
Of those matters, only the first was the subject of the dispute. I have dealt with it immediately above. The other work was accepted by Mr Auguste as additional work that he had requested beyond the original agreement, although he had some issue with the amounts claimed by the first respondent in respect of those works.
I am satisfied that the work required by the original scope of works and the variations requested by Mr Auguste up to the end of August had been completed within the time frame that I have found was a reasonable time for the completion of those works (a total of five months). The work completed after 25 August, 2010 was additional work to that required by the original scope of works, including the remedial works necessary to restore the creek bank at the headwall on Woodlupine Brook.
I am not satisfied on the balance of probabilities that the first respondent did not complete the contracted works and associated variations within a reasonable time from the commencement of the works. Mr Auguste’s claim based upon a breach of the implied term that the work would be carried out within a reasonable time must fail.
In any event, for the reasons that I have discussed above, even if there had been a breach of the implied term, Mr Auguste has not proved that he suffered any loss by reason of that breach. At best, his entitlement would be to nominal damages only.
For the reasons given above, Mr Auguste’s claim in these proceedings must fail.
The crossclaim
By its crossclaim the first respondent seeks payment for work undertaken by it by way of additional works and variations to the original scope of works.
Mr Auguste claims that he is not liable for the amounts claimed by the first respondent because the contract between the parties is a construction contract for the purposes of the Construction Contracts Act2004 (WA) and so is subject to an implied term that in respect of work claimed to be a variation or in addition to the work for which a price was agreed a payment claim must meet a number of requirements, including to ‘itemise and describe the obligations that the contractor has performed and to which the claim relates in sufficient detail for the principal to assess the claim”: Construction Contracts Act, Div 4 clause 5(2)(f) read with section 16 of that Act.
He argues that the first respondent has not delivered a payment claim in accordance with the Act. However, I do not accept that argument. The first respondent has delivered invoices to Mr Auguste for its work. The invoices lacked detail, but the detail has been provided by the first respondent and Mr Colasante at Mr Auguste’s request and that of his lawyer. He provided significant detail about the claims. The first provision of that information was on 22 March, 2011. The second was on 29 April, 2011. The details were contained in a spreadsheet. In my view the information within that spreadsheet was plainly sufficient to inform Mr Auguste of the nature and extent of the work being claimed by the first respondent and allowed him to assess the first respondent’s claims. Notwithstanding that, on 8 August, 2011 and 2 September, 2011 Mr Colasante provided further particularity to the first respondent’s claim.
Mr Colasante’s evidence sets out in detail how he calculated the amounts claimed by the first respondent. The basis for his calculations is explained and the primary evidence – the work diaries kept by Mr Sialtsis are in evidence. Mr Sialtsis was not challenged on his evidence about his record keeping.
Mr Auguste complains that he has never been given sufficient detail to properly assess the first respondent’s claims. I reject that argument. The first respondent has provided the necessary detail. The evidence of Mr Colasante concerning his dealing with Mr Auguste after the first respondent completed its work and sough payment demonstrates a concern on Mr Auguste’s part not to obtain more information about the claims for genuine purposes, but to do so as a means of delaying payment to the first respondent.
Apart from the contract sum for items 2 – 6 in the 17 March, 2010 email no rates or other remuneration was agreed between the parties for:
a)The work required for items 6 – 9 in the 17 March, 2010 email; and
b)the variations requested to the original scope pf works; and
c)the additional work performed at Mr Auguste’s direction.
In those circumstances the amounts to be allowed for that work must be amounts which are in all of the circumstances fair and reasonable.
In its cross-claim filed on 10 January, 2010, the first respondent alleges that Mr Auguste directed the first respondent to carry out work additional to that provided for in the email of 17 March, 2010 as follows:
a)on or about 30 March 2010: provide pipe manufacture information and dates, pressure test, pressure gauge calibration, disinfection plan and headwall;
b)on or about 6 April 2010: rectify the broken Stormwater main;
c)on or about 29 April 2010: locate and test previously installed water mains;
d)on or about 30 May 2010: to hand-dig a section of storm water line;
e)on or about 13 May 2010: to lower the GPT and to disinfect the water main installed by a previous contractor;
f)on or about 31 May 2010: to dig test holes on the adjoining property;
g)on or about 31 May 2010: to make changes to the gas supply, fire hydrant and sluice valves;
h)on or about 16 June 2010: to carry out additional works due to changed levels on site;
i)on or about 17 June 2010: to apply protective coating to fittings installed by previous contractor;
j)on or about 24 June 2010: to change flush points;
k)on or about 28 June 2010: to carry out works to Stormwater tanks and bollards;
l)on or about 9 July 2010: to carry out rectification of the sluice valve box installed by previous contractor;
m)on or about 14 July 2010: to carry out paint markings for water main fittings;
n)on or about 15 July 2010: to carry out further testing of previously installed water main;
o)on or about 27 July 2010: to carry out modifications to the entry to access ways;
p)on or about 18 August 2010: to carry out works for the revised stormwater layout;
q)on or about 1 September 2010: to carry out the repair of pipework damaged by road works contractor;
r)on or about 2 September 2010: to carry out additional works to meet Water Corporation requirements;
s)on or about 12 October 2010: to carry out the removal of base and bitumen from manholes; and
t)on or about 5 February 2011: to carry out the patching of manholes.
These claims were varied in some respects by the evidence given by Mr Sialtsis. His evidence, however, establishes that the work the subject of what is described as a ‘Scott schedule’ (exhibit 12 in these proceedings) was work that was done by the first respondent at Mr Auguste’s request. Subject to what appears below, his evidence also establishes that the work was not within the scope of the original agreement between the first respondent and Mr Auguste.
The work alleged by Mr Sialtsis to have been requested by Mr Auguste was, I am satisfied, requested by him as the first respondent alleges. It was work which was in addition to the work required by the original scope of works. It was work in respect of which there was no agreement about payment. In those circumstances the first respondent is entitled to a reasonable sum for the work that it has performed.
In submissions Mr Auguste’s counsel sought to argue that the claim by the first respondent was a total costs claim as those claims are described in cases such as D & Z Constructions Pty Ltd v IHI Corporation [2013] WASC 265 and DM Drainage & Constructions Pty Ltd v Karara Mining Ltd [2014] WASC 170. But his is not such a claim. The first respondent’s claim is for the cost of work and labour done, the price for which was not agreed between the parties. It is not a claim for the loss suffered by a contractor by reason multiple interacting events for which the principal is responsible and which cannot be separately identified.
Further, to the extent that Mr Auguste argues that there is no room in this case for the first respondent to succeed on its claim because there is a contract between the parties, the argument cannot succeed because:
a)the contract between the parties did not cover the work the subject of the first respondent’s claims; and
b)the contract did not provide a price for that additional work.
Mr Tonkin’s evidence establishes the reasonableness of the claims made by the first respondent, both in terms of the work undertaken and the price claimed subject to three exceptions. The first relates to the digging of a common trench. Mr Tonkin excluded that claim on the basis that the first respondent did not do that work. It did and so the amount should be allowed to the first respondent ($7,548.50). There were two other items that were not seen as properly claimable. The first related to the measurement and installation of a conversion slab to the GPT. Mr Tonkin thought only half of that cost was reasonable. I accept his evidence about that. The second related to the final site meeting to close off the job – something which Mr Tonkin thought was standard practice and within the contract scope.
However, there are two further matters that I am not satisfied should be allowed in the crossclaim. The first concerns the digging of hard rock. There was no express term in this contract that the digging of hard rock would be at additional cost. The first respondent’s case must be that based upon an implied term, the cost of digging hard rock would be additional to the contract sum. However, I am not prepared to find that there was an implied term in the contract to that effect. I accept that ordinarily the cost of digging hard rock is an additional cost, but as the evidence demonstrates that is the subject of an express term. The Ballantynes’ quote, for example made express reference to such a term. That the first respondent did not see fit to include a term to that effect in the contract does not mean that such a term should be implied. The obligation under the contract was to dig the relevant trenches. The contract is perfectly able to operate without the implication of a term about the costs of digging rock. The claim for the additional cost for digging rock must be rejected and removed from the crossclaim. Those costs as assessed by Mr Tonkin were $2,667.50
The cost of demolishing the precast headwall cannot be allowed in the crossclaim. The first respondent and Mr Colasante knew what was required for the Woodlupine drainage connection. That was not what was initially installed. The cost of rectifying that error is properly the responsibility of the first respondent. Those costs were $7,353.98.
Accordingly, I find that the amount to which the first respondent is entitled is $99,523.67. Having regard to Mr Tonkin’s evidence that amount is calculated as follows:
Cost for additional and un-priced work $101,996.65
Plus common trench allowance $7,548.50
Less:
Digging hard rock $2,667.50
Demolish and construct headwall $7,353.98
Total $99,523.67
Conclusion
Mr Auguste’s claim must be dismissed with costs.
The first respondent is entitled to judgment on its crossclaim for $99,523.67 plus interest and costs.
The parties did not address me on costs or interest. I will make provision in the orders for the parties to bring in minutes of orders dealing with costs and interest. In the event that they are unable to agree about those matters I will provide a further date for argument about those matters.
I make the orders set out at the commencement of these reasons.
I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Associate:
Date: 3 May 2016
CORRECTIONS
Paragraph 84 line 7 – include the words “for the variations was no more than an additional 2 months”.
2
5