Barry Pitt Constructions Pty Ltd v Smith - [2014] QCAT 25

CITATION:

Barry Pitt Constructions Pty Ltd v Smith & Anor [2014] QCAT 025

PARTIES:	Barry Pitt Constructions Pty Ltd (Applicant)
v
Shane Harold Smith Agnieszka Smith (Respondents)

APPLICATION NUMBER:

BDL037-13

MATTER TYPE:

Building matters

HEARING DATE:

13 – 14 November 2013

HEARD AT:

Mackay

DECISION OF:

Member Dooley

DELIVERED ON:

23 January 2014

DELIVERED AT:

Brisbane

ORDERS MADE:

1. Shane Smith and Agnieszka Smith pay to Barry Pitt Constructions Pty Ltd the sum of seventy four thousand, four hundred and thirty one dollars and fifty cents ($74,431.50), by:

4:00pm on 14 February 2014

2. The claim for costs is refused.

CATCHWORDS:

BUILDING DISPUTE – failing to follow Plan - whether damages should be calculated as costs of rectification or diminution of property’s value – whether rectification costs reasonable

Domestic Building Contracts Act 2000

Lida Build Pty Ltd v. Miller (2013) QCATA 139

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Barry Pitt Constructions Pty Ltd represented by Mark Williams, Counsel instructed by Bill Cooper & Associates

RESPONDENTS:

Shane Harold Smith
Agnieszka Smith

REASONS FOR DECISION

The Applicant/Builder commenced an Application QCAT on 14 February 2013 claiming the sum of $74,431.50 pursuant to a Domestic Building Services Authority Contract entered into with the Respondents in the amount of $220,000.00 for the construction of a house at Lot 10, 94 Bedford Road, Andergrove in the State of Queensland.
The Applicant calculated the claim as follows:-
Contract Price  $220,000.00
Plus Contact PC approved items           $ 4,431.50
$224,431.50
Less payments  $150,000.00
Claim  $ 74,431.50
The Applicant’s add on items of $4,431.50 were calculated as follows:-
a)    Tiles and carpets – Contract allowed for a Prime Cost of $2,500.00. Applicant claims the Respondents chose items costing an extra $1,500.00
b)    Cabinet making – Contract allowed for a Prime Cost of $9,900.00. Applicant claims Respondents chose items costing an extra $2,271.50.
c)    Provision was not made in the Contract for the installation of air conditioning. Applicant charged an extra $660.00.
The Respondent filed a Response and Counter claim on 10 April 2013. The Respondents refute the Applicant’s claim for $4,431.50 and at the hearing set out their counter-claim seeking the following:-
a)    Jackhammering – seeking a refund of $1,500.00
b)    $10,000.00 compensation for the house being sited in a position some 34cm different to that shown on the plan
c)    $10,000.00 compensation for the patio roof height shortfall
d)    $20,000.00 compensation for the house eaves width
e)    $5,280.00 compensation for scratches, dents and other deficiencies regarding the roof
f)          $500.00 compensation for damage to the water tank
g)    $186,870.00 for rectification works to the residence to make the residence comply with the original plans
h)   compensation for the use of chipped and cracked bricks in the residence
i)          $4,550.00 damages for delay including $500.00 per week loss of rent
At the hearing the following list of issues was drawn up:-
1.    Tiles/carpet
2.    Cabinet making
3.    Air-conditioning provision
4.    Water tank
5.    Roof
6.    Bricks
7.    Position of house
8.    Patio height and supports
9.    Jackhammering
10.     Eaves
11.     Contract delay and damages
12.     Insulation and Vents
13.     Rectification costs
(1)    Tiles/Carpet
Various Prime Cost items were listed in the Contract. Total tiles were listed as $2,500.00. Evidence was given at the hearing by the Applicant Mr Pitt that the Respondents selection of the tiles and carpets totalled $1,500.00 above the allowed P.C. cost. The Applicant stated in evidence that he contacted the Respondent Mrs Smith prior to her boarding a plane to go overseas. The Applicant said that he advised her of the extra costs and she said to go ahead. The Respondents deny this.
(2) Cabinet Making
A Prime Cost amount for cabinetry was allowed in the Contact for an amount of $9,900.00. The Applicant gave evidence that the actual cost of the cabinetry chosen by the Respondents was $12,171.50 adding an extra $2,271.50 to the cost. Benjamin Sharpe, the Cabinet Maker gave evidence confirming these extra costs. The Respondent in cross examination put to the Cabinet Maker that the Respondents were only there to choose colours. The Cabinet Maker denied this and stated that they were there to design the kitchen. Respondents deny this.
(3) Air Conditioning Provision
Applicant gave evidence that he advised the Respondent that providing for the proposed air conditioning systems pipe–work was easier and cheaper at this stage before the bricks were up.
The Respondent gave evidence that the Applicant said this would not cost more than $500.00. The Applicant denied this and says that he quoted $600.00 plus GST.
With respect to items 1-3, the Applicant’s account of events appears to be the more reasonable and credible account. In the circumstances I find that the Respondent is liable for the Applicant’s additional Contract amount of $4,431.50.
(4) Water Tank
The Contract provided for the installation of a 5,000 litre Water Tank at a cost of $1,600.00.
Evidence was given by Neil Kelly at Woodman’s Mitre 10. His evidence was that the Tank was new and in an acceptable condition. He stated that the Tank was in the same condition as other Tanks supplied at that time. No evidence produced by the Respondent with respect to the alleged decreased value of the Tank. Respondent is seeking $500.00 compensation but has failed to quantify this amount in any way. In the circumstances I find that the Respondents claim for $500.00 fails.
(5) Roofing
The Respondent alleges that the Bluescope steel roof has scratches and rust spots on same. It is the Respondents submission that the roof is defective and that the installation has invalidated the warranty for the roofing product.
Evidence was given by Alan Stevens of the Steeline Roofing Centre. Mr Stevens gave evidence that he had been the Manager for Steeline Roofing for 9 years. He stated that he carried out roofing inspections and had observed scuff marks and scrapes on the top of the subject roof. He stated that the marks were not visible from the ground and that the marks were normal and did not alter performance.
In cross examination the Respondent asked the witness if he was aware of rust marks on the roof. The witness said he was and that they were “squaffe” caused by fragments of steel filings after the screws were put in place. He said they do not in any way hurt the roof.
The Respondent put into evidence a quote from M.J. Brady to repair the roof for $5,280.00. This witness was not made available for cross examination. The quote was very brief and gave no detail or an expert opinion as to the necessity to carry out repairs.
In the circumstances I dismiss this claim.
(6) Bricks
The Respondent is claiming compensation for badly cracked and chipped bricks that he alleges were used in the house.
Evidence was given by Robert Ford who stated that he was the State Sales Manager for PGH Bricks for 6 years and had been with Boral for 25 years. He gave evidence that the bricks were up to industry standard and that the imperfections were not noticeable if viewed according to industry standards ie at a distance of 4-6 metres.
Respondent is claiming $1,000.00 for the bricks but has provided no explanation of how this amount was calculated or any expert evidence to support his claim.
(7) Position of the Residence 6.35m from the affronting road rather than 6.4m as specified in the Plans
Both parties agree upon the position of the house. The Respondent is claiming $10,000.00 compensation but fails to quantify how this compensation amount has been calculated or to produce expert evidence as to the diminution of the property’s value due to the house being positioned slightly closer to the front road.
The Respondent also claims that he is unable to access the property’s back area and that this affects its value. The Respondent’s own material contains a rental valuation from Red Pepper Realty in which the property is described as “fully fenced with huge double bay shed located at the rear with side access”.
This defect is at most a defect in name only. There is no evidence of a resulting decrease in the property’s value. In the circumstances I dismiss this claim.
(9) Jackhammering
The Respondent disputes a payment of $2,000.00 for the hire of Jackhammers during the footing stage. The Respondent in their counter claim Application states that a bystander on the neighbouring property stated that the work took approximately 1 hour. The Respondent seeks to pay $500.00 only for this item.
The Applicant gave evidence that the site was originally identified as a “S” site. It was later identified as a “P” site (due to the discovery that it was an uncontrolled fill site). Two previous existing pool walls had to be removed and further piers had to be put into place. This required the wages of 5 men for 5 hours. Jackhammering, concrete, engineering costs and bobcat hire was also required. The Applicant requested $2,500.00 plus GST but reached an agreement to receive $2,000.00 cash from the Respondent. The Respondent denies this but failed to produce the independent witnesses referred to in the Respondent’s Counter-claim.
In the circumstances I dismiss this claim.
(8) Patio Height and Columns
(to be considered together with issues 10, 12 and 13)
The Respondent is seeking compensation in the sum of $10,000.00 for the Patio Height at 2.3m (it is marked on the plan at 2.4m) and the residence was completed with two round columns instead of one square post as set out in the plans. The Respondent claims that the reduction in the patio ceiling height now means that it is no longer legally possible to close in this patio area and use it as a livable space.
In evidence the Applicant stated that he was unaware of the Respondent’s intention to close in the patio area in the future. Asked about the two columns as opposed to the square post on the plan the Applicant states that that Respondent was frequently on-site and in discussions advised the builder that he wanted his house the same as other houses around the corner completed by the Applicant. The Applicant states that he therefore put in the same columns and made the soffiet level same all the way through including the patio as he had in the other houses. The Applicant states that the Respondent Mr Smith was on the site every day and although the patio was constructed in October/November, did not make complaint until late November when payment become due.
The Respondent when cross examining the Applicant asked if these alterations were a variation to the plan and the Applicant stated yes. The Respondent asked the Applicant if he had drawn up a variation and had it signed and the Applicant said no.
The Applicant later gave evidence that the alterations did not result in any claims for extra payment by the Applicant.
(10) Eaves
Evidence was given regarding this issue from the Applicant, the Respondent and Nathan Galea (a builder for the Respondent who prepared a quote for the rectification of the house to accord with the original plans).
The Respondent is seeking the sum of $20,000.00 for a variation of the width of the eaves to the width shorter than the 600mm required for the overhang in the plans. The Respondent believes that this will have an affect on the residences energy rating. The Respondent was unable to quantify how the sum of $20,000.00 was calculated as the damages being sought.
The evidence provided, particularly that from the builder Nathan Galea provided ample opinion that the eaves were shorter in overhang width than that required by the plan. Michael Plunkett provided evidence for the Respondent that the energy rating for the residence was 5.5. This was however disputed by the Applicant.
(12) Insulation and Vents
The Respondent’s witness Michael Plunkett gave evidence that the insulation in the roof of the residence was not installed in accordance with the code. He believed that there were some shortcomings. Applicant gave evidence that the house was compliant and has no defects.
Argument also included a discussion with respect to a vent in the kitchen. Respondent gave evidence that there should have been a vent but that workmen sheeted over the area. Applicant gave evidence that the house was approved.

Discussion of issues 8, 10, 12 and 13

To summarise the Respondent is seeking the following amounts of compensation to be reduced from the Contract Price:-
a)    for the patio height and columns                   $10,000.00
b)    Eaves  $20,000.00
c)    Insulation and Vents – no amount
claimed
Total:  $30,000.00
The Respondent has not provided any method for the quantification of these amounts. In other words as alleged by the Applicant these amounts were chosen “as if plucked from the air” by the Respondent.
The Respondent has provided an alternative method for compensation, namely the sum of $186,870.00 plus GST as set out by the Builder Nathan Galea in evidence. This amount is for the alteration of the house to conform with the original house plans. It in effect requires the almost total demolition and rebuilding of the house.
The difficulty in this matter is that the evidence definitely indicates that the residence does not conform to the original plans in the following areas:-
a)    set back of the residence
b)    Patio height and columns
c)    Eaves
The Applicant may argue that the Patio height and columns were by verbal agreement with the Respondent and that the house has been approved. This however does not alter the fact that written variations were not provided to the Respondent and were not signed by the Respondent in accordance with the Domestic Building Contracts Act 2000.
I refer to Lida Build Pty Ltd v. Miller (2013) QCATA 139. The question in this matter related to the roof pitch of the pool house which was to be 29 degrees so that it accorded with the roof pitch of the existing house. The completed pool house had a pitch of 25 degrees which did not accord with the plans. In failing to follow the plans it breached its contractual obligations. In this decision it was considered whether the damages should be calculated as costs of rectification or diminution of the property’s value.
Evidence was provided that the rectification cost would be $37,638.98.
“The general rule for assessing damages for building work that is not in conformance with the contact is that the building owner is entitled to the difference between the contract price of the work and the costs of making the work conform to the contact. There is of course a qualification to the general rule that not only must the work undertaken be necessary to produce conformity but that also it must be a reasonable course to adopt.”
This was the approach adopted in D. Galambos & Son Pty Ltd v. McIntyre. The correct approach appears to be to look at the value of the property and to decide what amount, if any, that value would be reduced by the defective work, where the cost of rectification would be unreasonable.
In this particular matter I found that the cost of rectification, some $186,870.00 plus GST, would be wholly unreasonable in the circumstances as a method to compensate the Respondent for the variations to the building plan.
At the commencement of this matter I indicated my concerns regrading this particular part of the evidence to the parties. I recognise that the Respondent was self represented while the Applicant was legally represented. I did however make my concerns known to the parties in a very plain manner.
The Respondent was also asked on several occasions during cross examination to provide a quantification of the damage amounts claimed or at least some insight into the rationale used to calculate these amounts. The Respondent provided no insight into this issue at all during evidence.
No expert evidence was provided by the Respondent at all with respect to the possible diminution of the value of his property due to the Applicant’s non compliance with the plans. Also, no expert building evidence was provided by the Respondent as to the variations affecting the habitability of the residence or it’s general compliance with the building code and thus it’s general approval.
It is not possible for this Tribunal to make awards of damages without evidence upon which to base these calculations.
Awards must be transparent and reasonable in all the circumstances. No evidence of loss has been shown by the Respondent. Direction hearings were conducted prior to the hearing and both parties were made aware of the importance of producing their best evidence at the hearing. Matters cannot be delayed if parties after such a process fail to provide reasonable evidence to prove their claims.
It is procedurally unfair to the Applicant for the matter not be decided in a timely fashion.
In all the circumstances I dismiss the Respondent’s claim for damages with respect to issues 8, 10, 12 and 13.
(11) Liquidated damages for Contract delay
The Respondent is claiming liquidated damages for delay in the completing of the residence in the sum of $4,500.00. The contract provided for the completion of the residence by end of October. The Applicant claims the property was completed by 12 December 2012 but Respondent claims final completion by 11 February 2013.
Either way I must refer to the provision of the Contract for “late compensation damages”. The words ‘N/A’ were inserted here in lieu of a set amount per day. If there had been nothing stated in this section damages would have been set at $50.00 per day. However this is not the case. The parties both signed this Contract agreeing that there would be no liquidated damages for late completion. In the circumstances I dismiss this claim.

Summary

In summary I find for the Applicant in the sum of $74,431.50.
I dismiss the Applicant’s claim for costs on the grounds that the Respondents were able to prove their case at least in part, even though this did not result in an award of damages in their favour.