Belmondos Kirra Pty Ltd v Food Equip Solutions Pty Ltd

[2011] QCAT 105

CITATION:	Belmondos Kirra Pty Ltd v Food Equip Solutions Pty Ltd [2011] QCAT 105
PARTIES:	Belmondos Kirra Pty Ltd
v
Food Equip Solutions Pty Ltd

APPLICATION NUMBER:   BDL103-10

MATTER TYPE: Building matters

HEARING DATE:     19 November 2010

HEARD AT:  Brisbane

DECISION OF: Mr James Allen, Member

DELIVERED ON: 1 April 2011

DELIVERED AT:      Brisbane

ORDERS MADE: The Applicant pay the Respondent the amount of $3,862.78 within 14 days.

CATCHWORDS:  Commercial building contract – defects and incomplete work – oral and informal variations to contract

APPEARANCES and REPRESENTATION (if any):

APPLICANT:	Mr Ryan Taylor, Director
RESPONDENT:	Mr John Sullivan, Director

REASONS FOR DECISION

INTRODUCTION

1. Belmondos Kirra Pty Ltd engaged Food Equip Solutions Pty Ltd trading as Foodfitouts to do the fit-out of a restaurant which the company intended to open at Kirra Beach. The parties entered a standard Australian Shop & Office Fitting Industry Association Inc. contract on 11 August 2008. The contract was for the Restaurant Fitout of Kirra Surf (Le Monde Kirra), the contract sum was $500,000 plus GST and the works were described in an addendum to the contract. There were no plans for the works annexed to the contract. Belmondos had engaged an architect, Mr Will Franklin to design the fit out though his involvement ceased sometime in early September 2008. A design company known as the Veca Group finalised the finishes for the job. A further document described as Second Stage was signed by the parties on 23 October 2008. This document sets out works which may variously be described as further works and variations to the original works with an amount of $190,000 plus GST noted on the bottom of the first page. This second document is not part of a standard form contract as the first contract was. The restaurant known as “Le Monde Kirra” commenced trading on 4 November 2008. At that stage there was still some work to be done and monies outstanding under the contract. On 6 November 2008 the amount outstanding under the contract was $20,900. Belmondos did not pay the final amount as it asserted that there were defects and incomplete work. Foodfitouts has counterclaimed that there are further amounts that it is entitled to as a result of work it has done for Belmondos. The counter application by Foodfitouts was in the amount of $80,517.00 which is in excess of the Tribunal’s monetary jurisdiction and as required under section 78 of the Queensland Building Services Authority Act 1991 the parties consented to the Tribunal hearing the application.

CONTRACTUAL RELATIONSHIP

1. The relationship between the parties is governed by the contract they entered and relevant legislation such as the Queensland Building Services Authority Act 1991 and general contractual principles. Particularly in relation to variations to the contract, clause 2 of the contract states they must be in writing. This is in accordance with section 67F of the Queensland Building Services Authority Act 1991. There is authority that a contract such as this one may be varied orally[1] or informally[2] and therefore careful consideration will need to be given to the evidence adduced by the parties in respect of any works which may constitute a variation to the contract.  This exercise and the interpretation of the scope of the works itself is made more difficult by the somewhat vague nature of the works described in the original contract of 11 August 2008 and the second contract of 23 October 2008.

   [1]Creamota Ltd v Rice Equalization Association Ltd (1953) 89 CLR 286 and Liebe v Molloy (1906) 4 CLR 347.

   [2]        Slee v Warke (1949) 86 CLR 271.

BELMONDOS CLAIM

1. Belmondos’ claim includes an amount of $10,912.10 in respect of defective work, $7,258.41 in respect of incomplete work and $29,503.03 in respect of what are described as out of pocket expenses.  Each of the items which make up these amounts will be dealt with separately below.

Floor Repairs

1. The floor in the kitchen of the restaurant was to be coated with a membrane in accordance with the addendum to the contract as follows “Rhino floor to kitchen and bar area complete with coving”.  An issue with the floor arose in January 2009 when there were a number of falls by staff in the kitchen.  Both parties agree that this matter was dealt with by having an extra non-slip layer applied and a credit of $4,547.40 was given to Belmondos against the final payment due.  Mr Taylor stated this was for a non-slip layer to be applied to the walkways.  There were two further issues with the floor membrane, the first was bubbling of the membrane under the cooking equipment which was reported by email to Foodfitouts on 15 July 2009.  The floor membrane under the cooking equipment was ordered to be rectified by the Gold Coast City Council on 7 August 2009.  The second issue was that the drains through to the basement car park were leaking which was reported by email to Foodfitouts on 14 October 2009.  The tradesman who installed the floor, Lance Warren is said to have stated to Belmondos that he had quoted on two coats of the membrane and was told to only apply one coat and not to tell Ryan (Mr Taylor).  A statement by Mr Derek Hogben, the franchisee of Rhino Beaudesert also recounted this exchange between Lance Warren and Mr Sullivan of Foodfitouts.  At the hearing Mr Sullivan denied that he had instructed the supplier of the membrane to use only one coat of the membrane and not to tell Mr Taylor.

1. The leak into the car park was with other concerns made the subject of a Queensland Building Services Authority (QBSA) complaint and it was accepted as a category 1 defect in the report of Mr Neil Dixon dated 6 February 2010, which was annexed to Mr Taylor’s affidavit of 15 October 2010.  In an undated letter to the QBSA, annexed to Mr Taylor’s affidavit, Mr Dixon confirmed that the car park leak had been addressed but noted that no access was available to the basement level.  Mr Taylor states in his affidavit that the drains are still leaking and referred to reports annexed to his affidavit from Frank Larson of Rhino Industrial Services dated 7 October 2010 and Adrian Zambelli of Dennis Cairns and Associates, Hydraulic Services Consultants dated 12 October 2010 to confirm this.  Mr Zambelli in his report concludes that “the cause of the leaks within the car park are from the water proof membrane on the kitchen floor above failing”.  Mr Larson states in his report that “the waterproofing material was not able to return into the type of grate used in the kitchen”.  He further states that Rhino do not have a 100% solution for this and are unable to help you.  Despite that a quote to repair the kitchen floor membrane in respect of the leaks and further bubbling under equipment and at the rear entrance in the amount of $2,470 plus GST from Rhino Industrial Services was annexed to Mr Taylor’s affidavit.  The quote notes though that this is a remedy to fix incorrect purchase and installation of floor grates by others and that there is no warranty for completed work.

1. Mr Sullivan is concerned that he has already given a credit for work in respect of the floor membrane and that he is being asked to make further payments in that regard.  Mr Taylor provided an invoice at the hearing from Satintouch dated 6 March 2009 in the amount of $4,547 in respect of cleaning and top coating of the bar and kitchen floor, which he stated was for the work for which Mr Sullivan credited the monies.  Mr Taylor has expended the money that was credited to him by Mr Sullivan.  Whether or not the current issues with the floor are as a result of there not being two layers applied or not the floor is defective due to bubbling and leaks and those defects need to be repaired.  The Tribunal notes that there has been no evidence raised that this damage is as a result of fair wear and tear.  There is independent evidence from Mr Hogben and Mr Zambelli that it is a failure of the membrane exacerbated by the incorrect grates in respect of the leaks which has caused the damage.  The claim will be allowed in the amount of $2,470 plus GST for repair of the damage to the floor.  There is an additional amount for the disconnection and reconnection of the gas appliances in the kitchen when the floor repairs were carried out in respect of the bubbling under the cooking equipment on 24 and 25 August 2009.  This is supported by an invoice dated 9 October 2010 from Flameright Services in the amount of $529.10, which was annexed to Mr Taylor’s affidavit.  This claim will also be allowed in the amount of $529.10. 

THE PIZZA OVEN

1. The addendum to the contract specified a “Wood fired pizza oven to kitchen area with complete surround to client specification Suggestion stainless steel surround”.  Mr Taylor stated at the hearing that when the restaurant opened he could not find a chef who had experience using wood in a wood fired pizza oven and that wood was not used as a heat source in the oven until approximately May 2009.  He stated he wanted the wood fired pizza smell in the air.  Following the introduction of wood burning in the oven there started to be smoke in the mezzanine level of the restaurant and the pizza hood motor did not seem to be sucking.  Mr Taylor in his affidavit of 15 October 2010 refers to a series of emails in regard to this issue which are annexed to the affidavit.  Mr Taylor advised Mr Sullivan by email on 19 June 2009 of the problem.  In an email on 16 July 2009 Mr Sullivan advised that the building should not be closed up as there would be no make up air.  Mr Ryan replied that “we don’t close up the building”.  Mr Sullivan advised Mr Taylor by email on 23 July 2009 that “he had spoken to Beech Ovens, the manufacturers of the pizza oven, who explained how wood should be burnt in the oven and that the duct work needs to be sealed at the intersection of interior to exterior”.  This did not resolve the issue and Mr Sullivan advised by email on 21 September 2009 that “the fan has been subject to wood fire smoke when you started using wood in the last couple of months and the pizza oven was not ever to be used for wood burning only gas.  Therefore there will be a cost of $1,500 for a new fan and a carbon filtering system would be required if timber was to be used at a cost of between $4,000 and $6,000”.  Belmondos is claiming the cost of the fan replacement and the carbon filtering system.

1. While the contract clearly states that there is to be a wood fired pizza oven, it is clear from an email dated 2 August 2008 provided by Belmondos that the oven was to use gas as well as wood.  Mr Taylor acknowledged that in an email exchange dated 23 August 2008 Mr Sullivan had said that the stone based pizza oven will not be using any timber, but that his comment of yes related to other matters in the sentence.  At the hearing Mr Taylor stated that his intention was to use wood for flavour but predominantly run it on gas.  Mr Taylor stated that a separate exhaust was used for the pizza oven as the kitchen system was Stoddart UV system and the warranty would be voided if wood smoke passed through it.  That the pizza oven operation had been demonstrated to him by Mr Sullivan in terms of turning it on and off and that he did not receive a manual for the oven.  Mr Taylor further stated that he had contacted Bob Beech of Beech Ovens after the issue arose and he had told John (Mr Sullivan) that you could use timber for flavour purposes.  Mr Taylor denied that there were any health department issues in having a wood fired pizza oven.

1. Mr Sullivan stated in his affidavit of 28 October 2010 that originally the oven was to use timber as a heat source with gas back up.  That the ventilation ductwork was changed to comply with regulations due to there being apartments above the restaurant.  That the ductwork was not suitable and that it was agreed between Bob Beech, Ryan (Mr Taylor) and myself that timber would not be used and Ryan was fully aware of that.  Mr Sullivan refers to the email of 23 August 2008 which is mentioned above in support of this and a letter from Mr Bob Beech of Beech Ovens Pty Ltd dated 25 October 2010, which is annexed to his affidavit.  The letter from Mr Beech notes that:

The oven was originally specified as a gas backup oven which means that it needs wood to give the oven enough heat, for some reason wood became an issue and I suggested that Ryan put in a display burner as well as the tube burner to compensate for the loss of the wood heat source.  He was happy with this at the time.  I explained that wood could not be burnt as a heat source but a small smoker box could be used for flavour.  Our ovens are all made from the same materials and can be fuelled with either wood or gas or a combination of both, but it’s the burner system that define the difference and the display burner and tube burner in an oven it is sold as a full gas oven and wood cannot be used as a heat source for this oven.

1. Mr Sullivan annexed a copy of the invoice from Beech Ovens Pty Ltd for the pizza oven dated 25 August 2008 to his affidavit which states Full Gas System $6,300 plus GST.  Mr Sullivan confirmed that he sent the email of 23 July 2009 to Mr Taylor stating that this referred to putting a small amount of wood in the smoker box; Mr Sullivan also annexed a report from Speedy Ventilation dated 4 February 2010 to his affidavit.  The report states that:

makeup air was not required by owner, minimizing costs, as will always operate with shopfront open, to allow replenish of air being exhausted.  Pizza oven was not to have wood as fuel (gas only), as previously discussed with owner.  In regard to the burnout of the pizza oven fan motor the report stated “He had been called directly by Ryan in regard to the fan unit for the pizza oven.  He said he was losing smoke in his tenancy.  It was found, due to inclement weather, Ryan had closed off the front of the shop.  This caused the main fan unit to be starved for air, which would cause it to pull back air through the exhaust flue on the oven, not only resulting in smoke loss inside the restaurant but also cause reverse pressure on the booster fan, resulting in overload to the booster fan, thus resulting in burnout.

1. Mr Taylor denied that the fan had failed because he had closed the shopfront at the hearing stating that the fan failed because it did not have a carbon filter.  At the hearing Mr Sullivan stated that Beech Ovens supplied a manual to the chef Andre when they came out to demonstrate the oven, there was no manual on how to use timber as it was not a timber oven.  And Mr Beech had said you could put in a smoker box to get the smell.  Mr Sullivan stated that the problem with the ventilation was due to it being a horizontal discharge not a vertical one like the pizza restaurant down the road and that council regulations would not let the discharge go out.  In regard to the carbon filter system he said that this would not work and an electromagnetic system such as one provided by Stoddart for $50,000 would be required.

1. While the contract specified a wood fired pizza oven it is clear that the pizza oven which has been installed is a full gas system which according to the manufacturer is not compatible with the burning of wood but for which a wood smoker box may be used to give a wood flavour to the pizzas.  It is also clear from Mr Beech’s letter that if the pizza oven was to be dual use it would operate using both gas and wood at all times.  Mr Sullivan stated that wood was not used due to regulations in regard to the horizontal ventilation of the oven where there were residential apartments above the restaurant.  This was denied by Mr Taylor.  When the restaurant opened the oven was operated using gas only and Mr Taylor confirmed that when the oven had been demonstrated to him that he had been shown how to use it with gas.  It was only many months later that an attempt was made to use it with timber which failed, not in terms of the oven but in terms of the ventilation system.  Mr Taylor claimed that the ventilation system failed because there was no carbon filtering system installed.  Speedy Ventilation stated that it failed because the restaurant was closed up and the system was starved for air.  From the course of the emails Mr Sullivan continued to support the use of wood in the oven up until at least 21 September 2009.  At the hearing though Mr Sullivan denied that a carbon filtering system could be used to solve the problem.

1. While Mr Taylor maintains that the pizza oven was always intended to use wood when the restaurant opened it was operating as a full gas oven and he should have known from the instructions given by the manufacturer, Beech Ovens Pty Ltd that it was not suitable as a wood burning oven.  As it was never intended as a wood burning oven then there was no requirement for a carbon filtering system to be used with the ventilation and that claim is not allowed.  The Tribunal is satisfied that what Mr Taylor wanted to achieve was in his own words a wood fire smell in the restaurant and in accordance with the statement from Mr Beech that could be achieved by the use of a smoker box.  When Mr Taylor started to try to use wood in the pizza oven and there was a problem he contacted Mr Sullivan who tried to solve the problem but did not advise Mr Taylor that wood should not be burned in the oven.  The Tribunal discounts the statement of Speedy Ventilation in regard to closing of the restaurant as this practice was previously denied in an email by Mr Taylor.  While both Mr Taylor and Mr Sullivan should have known that wood should not have been burnt in the oven and that the ventilation system was not designed for wood smoke.  When there was a problem Mr Sullivan did not immediately state that wood should not be burnt in the oven as is clearly the case but tried to find other solutions to the problem which likely resulted in harm to the fan.  It is likely that if the use of wood had stopped the fan motor would not have failed so Foodfitouts is responsible for the cost of the fan motor in the amount of $1,500 in accordance with their email of 21 September 2009.

1. There is a further issue in regard to the pizza oven roof.  The roof which was installed was made from black fire rated plasterboard.  Mr Taylor claimed that the roof was temporary to seal the pizza oven roof to pass health certification and that it became broken and a cockroach haven.  Mr Taylor referred back to the contract and that he assumed the stainless steel surround would include the roof and the roof was to be to client specification.  Mr Taylor has provided a quote for $780 plus GST for a colorbond roof for the pizza oven.  Mr Sullivan stated that there was initially to be a stainless steel surround but this had been changed to mosaic tiles which were dearer.  He further stated that when in the second contract there was to be a new kitchen and extra things in the bar upstairs he wanted it for looking down on the top of the oven from upstairs.  The damage according to Mr Sullivan had occurred as a result of workmen installing the awning outside walking on the plasterboard.  The damage was the subject of part of the complaint by Mr Taylor to the QBSA mentioned above and this damage had been rectified by Mr Sullivan.  Mr Sullivan denied that the plasterboard was temporary at the hearing but accepted that the plasterboard had been installed without instructions from Mr Taylor.  Mr Sullivan annexed the QBSA defect list to his affidavit and it stated in regard to the pizza oven roof “Item 6 Roof over pizza oven is in various stages of disrepair due to being structurally unsound”.  Also annexed was the letter from Neil Dixon confirming that the work had been satisfactorily addressed.  While the roof to the pizza oven may not have been negotiated the Tribunal is satisfied that Mr Taylor elected to have the current roof rectified by complaining to the QBSA and that this work has now been attended to and the claim in regard to the pizza oven roof will not be allowed.

1. There is a window next to the pizza oven which was intended to have a stainless steel sill.  Mr Sullivan stated at the hearing that the health department would not allow the sill to be put in nor take away pizza served unless a sneeze guard was put in place, which was to be done by Mr Taylor.  Mr Sullivan agreed at the hearing that the work was required to be done but disputed the quote provided in the amount of $765 plus GST for the sill, which was annexed to Mr Taylor’s affidavit.  Saying that it was not on letterhead and that there would only be $200 worth of steel and $55 labour.  The email address of the quote is Enterprisemetal and the tribunal will accept the quote as genuine with the business identified as Enterprise Metal Industries.  The claim is allowed in the amount of $765 plus GST.

1. There is currently an empty space next to one part of the pizza oven.  Mr Taylor stated that there should be a stainless bench there and has a quote in the amount of $920 from Enterprise Metal Industries for the manufacture and fitting of one.  Mr Taylor stated at the hearing that it was not a defect but an unsupplied item and noted that the original contract has stated “wood fired pizza oven to kitchen area with complete surround to client specification and stainless steel benching from pizza oven around curved front returning to column”.  Mr Sullivan stated that this bench was not part of the contract and there was no defect from the health department when it was first inspected.  And that the bench described in the contract was on the other side of the column.  Mr Taylor further stated that rubbish and food falls into the void and it is basic in a kitchen fit out that a void be finished.  The Tribunal notes that this item was included in the list of items to be completed in the email of 16 March 2009 and that Mr Taylor therefore had an expectation that the bench would be supplied based on his interpretation of the contract and Mr Sullivan is not able to provide any sufficient evidence to support his interpretation such as a plan.  The Tribunal will allow this claim.

BAR COOL ROOM LIGHT REPAIRS

1. The QBSA report notes that the metal shelves in the bar cool room came into contact with the lights and this defect was a result of poor design of the shelf and light fitting detail.  Mr Taylor has requested an amount of $240 to rectify the defect and Mr Sullivan accepted that the repairs are necessary so the claim is allowed in the amount of $240.

CONVEYOR TOASTER

1. Mr Taylor claims that Belmondos was not supplied with a conveyor toaster in accordance with the second contract.  He has obtained a quote in the amount of $775.06 for a Birko Conveyor Toaster, annexed to his affidavit.  Mr Sullivan states that while a conveyor toaster was included in one of the quotes for the second contract, which is annexed to his affidavit, this was deleted from the final contract.  He states in his affidavit that part of the changes requiring the second contract were due to there originally only being a bar upstairs and Ryan (Mr Taylor) deciding he wanted a kitchen as well.  The original contract made provision for a salamander and servery toaster in the Mezzanine bar/servery.  While this was part of the original quotes for the second contract there was no mention of them in the final contract.  The Tribunal notes that Mr Taylor listed the conveyor toaster in his email of 16 March 2009 as an outstanding item.  There is no requirement under either of the contracts for the provision of a conveyor toaster and the claim will not be allowed.

GLASS SHELF ABOVE MAIN BAR

1. Mr Taylor has claimed an amount of $55 for a shelf which he says has not been supplied for the main bar.  He states that there were four sets of brackets supplied but only 3 shelves.  In his affidavit Mr Sullivan provided a photo of what he claimed at the hearing as the shelves in question which shows that there were four shelves supplied.  Mr Taylor claimed at the hearing that it was not those shelves but shelves above the bar inserts.  To this Mr Sullivan stated that if they were above the glass doors they would be at a height of 1750 mm.  The Tribunal notes that Mr Taylor included the shelf in his list sent to Mr Sullivan by email on 16 March 2009 as an item which was missing.  The Tribunal accepts that this item is missing based on it being included in the email of 16 March 2009.  Unlike the conveyor toaster this is an item which has been supplied but is incomplete.

SMALL ICEMAKER IN BAR UPSTAIRS

1. The original contract included a small icemaker to the bar upstairs.  Mr Taylor claimed that this was not supplied and obtained a quote, which was annexed to his affidavit, in the amount of $2,633.95 from Hiller Associates for an icemaker.  Mr Sullivan claimed that the icemaker had not been supplied as a result of the variation to the works when the upstairs kitchen was included.  He stated that this limited the space available and as an alternative a bigger icemaker was installed downstairs and an ice well was installed in the upstairs bar.  He provided invoices, annexed to his affidavit, in support of this.  Mr Taylor confirmed that while this had been orally agreed the restaurant ran out of ice every December.  Mr Taylor accepted at the hearing that he had compromised by getting the ice well and that he had no entitlement to the second icemaker.  The claim is not allowed.

ILLUMINATION OF OUTSIDE SIGN

1. The second contract included the following “Outside: one block garden, statue and signage”.  Mr Taylor stated that he was advised by Mr Sullivan that due to the demographics of the area and possible threat of vandalism that it would be better to put the statue inside.  And a basic sign was made with the restaurant’s name but it was not illuminated, although Mr Sullivan’s electrician had put in a transformer which would be available for that purpose.  Mr Taylor has obtained a quote, which is annexed to his affidavit, from Gold Coast Electrical Solutions in the amount of $1,050 to perform this work.  Mr Sullivan claimed that the external lighting was to be by the landlord and annexed a copy of the Landlord’s fixtures and fittings to his affidavit in support of this.  The list of fixtures and fittings states “external lighting – basic facade lighting as per DA by landlord”.  The lighting which is being spoken of in the landlord’s list only deals with what is to be provided by the landlord and clearly any signage of a restaurant would need to be illuminated at night so that prospective clients could see it.  The Tribunal is satisfied that as Foodfitouts provided the signage it should illuminate it and the claim will be allowed.

WAITER STATIONS

1. The original contract specified that there were to be 3 mobile waiter stations.  Mr Taylor is claiming that he was only supplied with two and has provided a quote, annexed to his affidavit, from Coolangatta Joinery Works in the amount of $891 for a new waiter station.  Mr Sullivan stated at the hearing that he did not know how many waiter stations were delivered and noted that the waiter station was not raised in the email of 16 March 2009.  This is not a case of Mr Taylor being mistaken about what the contract provided.  Clearly there were some waiter stations provided and if there had not been the correct number then it would be expected that the issue would have been raised in the email of 16 March 2009.  The Tribunal will not allow the claim.

STONE TOP AT CASHIER

1. The first contract specified “Pos area with 2 tier top, top tier to be stone (colour specified) to column”.Mr Taylor stated at the hearing that craft board had been supplied ready for the stone top to be put on but the top had not been supplied.  This item was also listed in the outstanding items in the email of 16 March 2009.  Mr Taylor has supplied a quote, annexed to his affidavit, from Extreme Marble & Granite in the amount of $330 for the stone top.  Mr Sullivan stated at the hearing that the stone people had come onto the site but he could not recall details.  The Tribunal is satisfied that the item is outstanding so the claim will be allowed.

AWNING LIGHT INSTALLATION

1. The construction of an awning was excluded from both contracts.  Mr Taylor is claiming the cost of the awning light installation in the amount of $781 in accordance with an invoice from Cover Solutions dated 27 July 2009, which is annexed to his affidavit.  Mr Taylor stated that it was a cost he had not expected to incur, he saw it as part of Mr Sullivan’s contract.  It is noted that this item was part of the list of items to be completed in the email of 16 March 2009.  Mr Sullivan stated that they had installed cabling out to the front bulkhead for awning lighting.  The awning was provided by a third party contractor engaged by Mr Taylor and Mr Sullivan provided an email dated 23 October 2008 from Mr Taylor to Dennis Cairns & Associates and Paul Roarty of Cover Structures which states that “Paul Roarty from cover structures is designing and building the awning with gas flares and power for lights”.  An email annexed to Mr Taylor’s affidavit from him to John@foodfitouts dated 13 July 2009 states that the awning is half built, it will be finished next Thursday and asking “When will Andrew be back to fix the pizza hood motor? Can he use that time to light up the awning and the sign in the garden bed”.  It is noted that there is no discussion as to who will bear the cost of this electrical work.  Mr Sullivan in his affidavit also noted that the landlord was to provide the external lighting.  The first contract does make specific mention about lighting in respect of some matters, for example “feature lights to front area hanging where there is no ceiling”.  The awning was not part of either contract and there is no clear evidence of an agreement between the parties that the lighting of it would be part of the scope of works.  While Mr Taylor may have assumed that to be the case the contracts indicate otherwise and the claim will not be allowed.

FIRE HOSE REEL

1. The building work performed by Foodfitouts was to be certified by Certis building certification.  An issue arose in regard to the placement of the fire hose reels for the premises which is set out in an email from Travis Craig of Certis to Ryan Taylor and John Sullivan dated 10 December 2008.  The issue was in regard to the placement and reach of the fire hose reel.  A letter from Certis to Belmondos Kirra Pty Ltd attention John Sullivan dated 28 January 2009 notes that the building work has not been signed off by Certis and that the tenancy will be unlawful without a certificate of classification.  Some of the matters required to be finalised are the Fire Hose Reel installer’s certificate and Fire Hose Reel photo of installation at bottom of stair.  Mr Sullivan stated at the hearing that the fire safety equipment was the landlord’s responsibility and was category 1 building work and outside of the scope of his contract.  Mr Sullivan accepted that it was his responsibility to ensure that the required certificates were obtained.  Mr Taylor stated in his affidavit that the applicant was under pressure from the landlord to occupy the tenancy lawfully with a certificate of occupancy so he undertook the works out of its own pocket.

1. Mr Taylor is claiming in respect of two invoices from Tweed Heads Plumbing, annexed to his affidavit, for fire equipment.  The first invoice is in the amount of $662.37 and is for work performed on 27 November 2008 described as addition of 1 x 36 metre hose reel (supplied by client) and connection to existing fire service.  The second invoice is in the amount of $991.76 and is for work performed on 15 December 2008 to disconnect fire hose reel in back corridor and re-install at fire exit at front of cafe as per certification in the amount of $991.76.

1. Although Mr Sullivan states that fire safety equipment is the landlord’s responsibility the landlord’s fixtures and fittings list he has provided only states “Fire Sprinklers, fire detection” in regard to Fire Protection.  An issue arose in regard to the fire hose reels in the certification process and Mr Taylor attended to this.  From the certifier’s response to the first installation it is also clear that this was not correctly placed and further work was required.  Mr Sullivan has accepted that he is responsible for ensuring that the work has a certificate of classification and that his company should have attended to the fire hose reel issue.  If Mr Sullivan’s company had attended to that work it is also anticipated that the work would have been carried out correctly and there would only need to have been the additional work performed.  Also that if Belmondos was to carry out the work it should also have ensured the work was done correctly.  On that basis the claim will be allowed in respect of the first invoice only in the amount of $662.37.

JT MASTER BUILDERS

1. J T Master Builders were engaged by Belmondos to build the stairs to the mezzanine level of the restaurant.  Mr Taylor stated at the hearing that Mr Sullivan then engaged them to perform some other work for the fitout.  An unsigned statement from Mr Jason Tawse of JT Master Builders was annexed to Mr Taylor’s affidavit.  This statement sets out the additional work which Mr Tawes says his company was asked to perform by Mr Sullivan.  It notes that Mr Sullivan disputed the invoice which he was given by J T Master Builders indicating that he would only pay $4,670 plus GST and that he ended up paying $5,000 plus GST.  And that Ryan Taylor had to pay the outstanding balance.  Mr Tawse indicated that he had re-cut and installed plywood ceiling panels which was disputed by Mr Sullivan.  The original JT Master Builders invoice, annexed to Mr Sullivan’s affidavit, for the work for Foodfitouts was in the amount of $11,436 and dated 15 November 2008.  The amended invoice, annexed to Mr Sullivan’s affidavit, dated 5 December 2008 is in the amount of $5,500.  A separate invoice dated 5 December 2008 to Ryan Taylor in the amount of $5,000, is annexed to Mr Taylor’s affidavit.  Mr Taylor stated at the hearing that he had paid Jason so that things would end well with him, and to keep the whole thing solid.  He said this always came up in future talks and in March he disputed it with Mr Sullivan stating that it was clearly part of his contract.  It was listed as an outstanding issue in the email of 16 March 2009.

1. There has been a dispute about work performed by a subcontractor, JT Master Builders, probably due to in part to the fact that the contractor and the client had both separately engaged the subcontractor to perform work at the premises.  In this case the dispute was resolved by the contractor issuing new invoices to the parties in place of its original invoice and the parties paid their individual invoices.  It is not the case that Belmondos paid an invoice which was issued to Foodfitouts or that the payment was made on the basis of Belmondos paying it under protest and reserving its rights against Foodfitouts.  The claim will not be allowed.

DOUGH DRAWER

1. A dough drawer was supplied by Food Equip Solutions which was to be used for the proving of dough.  A health department inspection resulted in a defect notice dated 7 August 2009, annexed to Mr Taylor’s affidavit, which required the following relevant work to be carried out, “Seal the exposed wooden drawer (inside) used to store dough”.  Mr Sullivan stated that the drawer was purposefully made to hold dough and had a melamine finish.  Mr Taylor stated that the drawer was surface ply.  Mr Sullivan stated in his affidavit that you could not leave dough in the drawer and that it was mouldy because dough was left in it.  Mr Taylor provided a quote, annexed to his affidavit, from Hiller & Associates for a stainless steel bench and drawer in the amount of $961.35 which he stated he had used to replace the dough drawer.  The replacement of the dough drawer is not something which Food Equip Solutions can be expected to pay as all that was required was that the original drawer be sealed.  The claim will not be allowed.

SEALING OF PLINTHS TO FRIDGES

1. The health department inspection also required that “Seal the bench refrigeration units to the plinths below”.  Mr Sullivan stated in his affidavit that the refrigeration units had been silicon sealed originally and that the item was not listed in the health department record of audit dated 24 November 2008 in respect of the premises, which was annexed to his affidavit.  Mr Taylor had annexed to his affidavit an invoice dated 25 September 2009 from Edward Keogh for work including the sealing of the refrigeration units in the amount of $724.90.

1. The Tribunal accepts that the sealing of the plinths was not an issue at the time the restaurant commenced trading in accordance with the health department audit and so the claim will not be allowed.  Even if the claim were to be allowed there is insufficient evidence available as to the cost of sealing the plinths.

GAS HEATERS AND GAS FLARES

1. Mr Taylor claimed various amounts for the provision and installation of gas heaters and flares to the outside of the premises.  At the hearing it was acknowledged by him that that these items did not form part of the contract.  There was one item which was the installation of a gas flare to the statue of Le Monde in the amount of $426.25 which Mr Sullivan confirmed he had agreed to.  The claim will be allowed to the extent of $426.25 which he had agreed to in his affidavit.

REPAIR BAR FRONT

1. Mr Taylor stated at the hearing that he had wanted a particular look for the bar front at the restaurant and that his architect, Mr Franklin had told him this was achieved through off form concrete.  He said that Mr Sullivan had advised that he had no experience in this type of work.  Mr Taylor’s response was that it was the look we want and it would be fine if the look was achieved through a render.  Mr Taylor stated that when the bar was built it was done with a smooth face render which did not match the finish he wanted.  Mr Sullivan then got another company to put on a paint finish.  Mr Taylor stated many customers said the bar looked unfinished and it looked like a primary coat.  He was concerned because it was a major part of the restaurant.  As a result he had someone else come and do something completely different.  Mr Taylor annexed to his affidavit an invoice dated 17 March 2009 from Shannon Doyle Art in the amount of $2,200 for bar front finish.  This involved a textured paint with foam in it being applied to the bar and then having petrol applied on top to give a pumice stone look.

1. Mr Sullivan stated at the hearing that Mr Taylor was trying to get a post form concrete finish which the architect was supposedly working out.  That in the photos he had annexed to his affidavit of Mr Taylor looking at the render he looked happy and that when the restaurant was opened it looked very good.

1. Mr Taylor could not point to a defect in the work just that his customers did not appreciate the look of it and that as a result he had the bar front redone.  This was Mr Taylor’s choice and not something which Foodfitout should be liable for and the claim will be disallowed.

ELECTRICAL WORK

1. Mr Taylor stated at the hearing that he did not want to pursue this claim in the amount of $875.05.

CURTAIN TO FREEZER

1. Mr Taylor stated that he had never worked in a cold room without a curtain as chefs leave doors open and the temperature can rise quickly.  Mr Taylor had annexed to his affidavit an invoice from Jade A & R dated 10 December 2008 in the amount of $506 for the cold room curtain.  Mr Sullivan stated that 90% of his clients don’t have them and it was not part of the contract.

1. The contract went into some detail in regard to the cold room as follows “Coolroom freezer room combination with sliding doors concrete insulated floors and heater blankets to protect downstairs car park.  Adjustable shelving to suit.  Remote refrigeration”.  There is no mention of a curtain in the specification and while Mr Taylor may have assumed one would be included this is not sufficient as the attributes of the coolroom are well set out.  The claim will be disallowed.

FIXING SALAMANDER TO KITCHEN WALL

1. The contract stated “Electrolux salamander complete on brackets”.Mr Taylor stated that when Mr Sullivan left the job the salamander was sitting on the bench.  Mr Sullivan claimed that in Queensland a gas salamander cannot be fixed to the wall.  Mr Taylor stated that the salamander was electric.  Mr Taylor annexed to his affidavit an invoice from Edward Keogh dated 12 January 2009 for the fixing of the salamander and fitting of a door in the amount of $220, of which he was claiming half.

1. The salamander was to be fixed to the wall in accordance with the contract.  The claim will be allowed in the amount of $110.

FOODFITOUT’S COUNTERCLAIM

1. The counterclaim includes the amount for the final invoice as well as various other items discussed below.  The amount for the final invoice is claimed at $20,900.  This is the final 10% of the second contract which was in the amount of $190,000 plus GST.  In his affidavit Mr Sullivan had annexed an e-mail of 18 February 2009 which stated the final adjusted amount was $11,292 after credits for a bulkhead which was not provided of $5,060 and $4,547 for the additional non-slip layer to the floor.  There is also a further letter of 20 September 2009 which showed a balance due of $9,942 after allowances for a water jug tap of $850, fire door $200 and shelves in dry store $300.  This was not expressed to be subject to payment within a certain period or any offer to settle.  The entitlement of Foodfitout to claim the completion payment is in accordance with the contract.  By clause 5(ii) of the standard conditions completion shall be deemed to have taken place when the Purchaser occupies the premises and in accordance with clause 10(iii) final payment is due on completion.  The claim for the final payment is allowed to the extent of $9,942.

PIZZZA OVEN

1. This is a claim for the amount charged for the pizza oven to be a full gas system.  On the invoice from Beech Ovens Pty Ltd the amount stated is $6,300 plus GST.  Mr Sullivan claimed that this was an additional cost as a result of the need for there to be a full gas system when it was found the oven could not operate with wood.  While as discussed above the contract was varied so that the oven was a full gas system there was no evidence that the question of additional cost was discussed with Mr Taylor.  Nor was the pizza oven a prime cost item.  There is also no evidence as to the amount that the oven would have cost if it had been a dual system of gas and wood.  The claim will not be allowed.

1. There is also a claim of $2,000 in respect of mosaic tiles which were used on the pizza surround instead of the stainless steel indicated in the contract.  It is noted that the contract specifies “wood fired pizza oven to kitchen area with complete surround to client specification suggestion stainless steel”.  Again there was no prime cost or provisional sum allowance for this item.  Mr Sullivan stated stainless steel would have cost $900 and the tiles cost $5,760 to supply and fix and that he was being quite generous in only claiming $2000.  Mr Taylor stated that if he had known it would break the budget he would have chosen something else.  Mr Sullivan acknowledged that the item was not a prime cost or provisional sum item and that there was no variation in accordance with the contract.

1. The contract stated that the surround was to be to client specification and Mr Taylor choose mosaic tiles.  There was no particular allowance made for the surround and therefore there is no reason to adjust the contract price.  The claim will not be allowed.

REMOVAL OF VENTILATION DUCTWORK

1. Mr Sullivan claimed that he had to do additional work for the demolition of two sections of ductwork which was to be negotiated with the landlord.  He stated he was supposed to connect to existing ductwork.  The claim was in the amount of $4,000 but not supported by any invoice.  There was an email dated 17 August 2008 from Mr Sullivan to Mr Taylor which states “we now have to do a demolition of duct etc, when will I get the ok to take this out”, annexed to Mr Sullivan’s affidavit in support of the claim.  Mr Taylor stated that the work took no more than one hour and that it involved two sections of ductwork taken apart with a drill.  The contract states “also duct to exhaust points downstairs”.  There is no evidence to support that this is additional work or that any amount has been agreed for it if it was; the claim is not allowed.

BRACKETS FOR REMOTE MOTORS

1. This claim is described as “supply brackets, insulation and labour to corridors required to remote motors as Will (architect) did not negotiate position and landlord did not allow for remote refrigeration units”.  Mr Sullivan confirmed that he had not spoken to the refrigeration company and that there had been no variation or invoice.  He said he had estimated  the additional cost of heavy steel brackets which were required as a result of the place where the motors needed to be installed.  Mr Taylor stated he did not see any of this as incurring additional expense and there had been no mention of extra cost.

1. The contract stated “remote refrigeration” and there is no evidence that a certain amount was set aside for that purpose nor that any additional amount was incurred.  The claim is not allowed.

CONSULTING AND DESIGN WORK

1. Mr Sullivan is claiming an additional amount of $34,500 representing 5% of the total contract price for consultancy and design work.  Mr Sullivan stated that this was for extra work he was required to do as a result of the architect, Will Franklin ceasing his involvement with the project.  Mr Taylor stated that any additional work which Foodfitouts provided as a result of Mr Franklin’s involvement ceasing was included in the second contract of 23 October 2008.

1. While it is clear that there may have been additional difficulties in the job as a result of Mr Franklin ceasing to be involved Veca Group became involved and the time of the second contract was the proper time to raise this issue if the contract price was to be varied to include an additional amount for consultancy.  This claim was not included at that time and there was no negotiation in regard to payment for any additional work.  The claim will not be allowed.

NG STEBBING CERTIFICATION

1. The contract excluded all council and approval fees and FoodFitout paid an invoice in the amount of $275, a copy of which is annexed to Mr Sullivan’s affidavit, for a site inspection from NG Stebbing.  Mr Taylor accepted that this amount should have been paid by Belmondos and the claim will be allowed.

TIMBER SEAT

1. The quotes for second contract which are annexed to Mr Sullivan’s affidavit show that there was to be a box seat supplied.  The final contract has the seat deleted.  Foodfitout paid an invoice, annexed to Mr Sullivan’s affidavit, from Edward Keogh dated 28 November 2008 in the amount of $1,672 for items including a box seat.  Mr Sullivan estimated that the box seat cost $700.  Mr Sullivan was also required by the QBSA to rectify a defect with the seat and paid an invoice from Coolangatta Joinery Works, annexed to Mr Sullivan’s affidavit, dated 30 April 2010 including an amount of $290 for seat replacement.  Mr Taylor accepted that the box seat was not part of the contract and the claim will be allowed in the amount of $1,019.

PLATE DISPENSER

1. Mr Sullivan made a claim for two plate dispensers and annexed a copy of an invoice from FSM to his affidavit.  The invoice is dated 18 September 2008 and is for 2 plate dispensers in an amount of $4,022.70.  The delivery address is Attention John Sullivan Foodfitouts at Buddina.  Mr Sullivan was claiming $3,100 each for the plate dispensers which he stated was the retail price in accordance with a brochure annexed to his affidavit.  Mr Taylor confirmed that he had wanted 2 plate dispensers but he had only received one.  Mr Sullivan stated that the plate dispensers were not part of the original contracts and this was accepted by Mr Taylor.  The claim will be allowed in the amount of $2,100 at the invoiced price for the one plate dispenser which Mr Taylor confirmed he had received.

CONCLUSION

1. As mentioned at the start of these reasons this decision has required careful consideration of the contract and the evidence to determine whether a claim is allowed as a result of being part of the contract whether originally or by variation of the contract.  When all of the claims and counterclaims are added and a final reconciliation is done the balance is in favour of Foodfitouts in the amount of $3,862.78.  The amount allowed to Belmondos was $9,473.22 and the amount allowed to Foodfitouts was $13,336.00.  The order will be that the Applicant pay the Respondent the amount of $3,862.78 within 14 days.