Butler v New Age Living Pty Ltd (Civil Disputes)
[2009] ACAT 51
•14 December 2009
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
BUTLER v NEW AGE LIVING PTY LTD (Civil Disputes) [2009] ACAT 51
AA 14 of 2009
Catchwords: CIVIL DISPUTES – Building dispute – whether items shown on proposed plan of property but not in the inclusions list form part of contract for sale of land – standard building contract – statutory requirements – rainwater tanks – costs
Legislation: ACT Civil and Administrative Tribunal Act 2008 (ACT)
Articles/Documents: Harrison 3 Estate, Stages 1B, 1C and 2: Lease and Development Conditions, ACT Land and Development Agency (August, 2006)
Tribunal: Mr C.G. Chenoweth Acting Presidential Member
Date of Orders: 14 December 2009
Date of Reasons for Decision: 14 December 2009
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 14 of 2009
BETWEEN:
KEITH PAUL BUTLER
Appellant
AND:
NEW AGE LIVING PTY LTD
Respondent
TRIBUNAL:Mr C.G. Chenoweth
DATE: 14 December 2009
ORDER
The matter be heard as a new application under s 82 ACT Civil and Administrative Tribunal Act 2008 (ACT).
The order of Member Thompson of 18 February 2009 be set aside.
The Respondent pay to the Appellant the sum of $4247.30.
Subject to the payment of the amount in clause 3, the Respondent be permitted to enter the property to remove the existing water tank and must make good any resulting damage. One week’s written notice to be given to the Appellant. If tanks not removed within 60 days of the date of this order, the right to remove the tank lapses.
…………………………….
Mr C.G. Chenoweth
Acting Presidential Member
REASONS FOR DECISION
This is an appeal from the decision of Member Thompson made on 18 February 2009, dismissing the appellant’s claim for damages for breach of a building contract relating to the construction of a house on Block 4 Section 114 Harrison in the ACT ("the Property").
Where an appeal is launched, the Tribunal has the discretion under section 82 of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (“the ACAT Act”) to deal with the appeal either as a new application, or as a review of all or part of the original decision. The Tribunal can decide which is the more appropriate course. In this case, I considered that the lack of written reasons for the earlier decision and the lodging of further written material by the appellant made it necessary and appropriate to hear the matter as a new application.
The Property is situated in an area of the ACT where special planning provisions and obligations apply. It is situated in the Harrison Estate stage three. The development application approved by the ACT Planning and Land Authority for the estate imposes special provisions for the conservation and use of rainwater. The Property exceeds 500 m² in size. The requirements imposed by the development application in relation to the storage of rainwater are as follows:
"medium block: 500 -- eight 800 m²
(i) minimum storage: 4000 litres(ii) 50% or 100% of roof area whichever is the lesser, is connected to the tank and the tank is connected to at least the toilet, laundry cold water and all external taps. This is expressed to be a mandatory requirement.”[1]
[1] Harrison 3 Estate, Stages 1B, 1C and 2: Lease and Development Conditions, ACT Land and Development Agency (August, 2006) 47.
The obligation to provide the mandatory water conservation tanks and plumbing is imposed upon the lessee of the block that is subject to this condition. The Property was originally leased to the respondent by a crown lease for 99 years, commencing on 7 March 2007. The appellant and his wife subsequently became the lessees of the Property by transfer. Neither this transfer nor the issue of the Certificate of Completion destroyed the burden on the lessee to comply with the condition set out in paragraph 3.
In early 2007, the appellant and his wife wanted to acquire the Property and complete a house on it. Evidence from the respondent indicated that at the time they saw the property, construction had started and at least the slab and other foundations had been laid. The appellant and his wife had seen a display home similar to the house which the respondent had started to build and talked to the real estate agent responsible for the sales. The appellant and his wife expressed interest in purchasing the Property, and in contracting the respondent to complete the house under construction.
The respondent had prepared plans for a house on the Property in 2006. These had been approved by the Land Development Agency of the ACT Government on 15 December 2006, and building approval for the construction of a house on the Property was granted on 14 February 2007. The respondent commenced construction work sometime thereafter.
The approved plan for the house on the Property described as “Working Drawing”, “Proposed Single Dwelling” for Block 4 Section 114 Harrison was exhibit C in these proceedings. The respondent agreed that this was the approved plan that had been submitted by the company for construction of a house on the Property.
The approved plan shows on the site diagram provision for two water tanks on the south-west corner of the house. The notation adjacent to the location of the tanks is: “2 x 2000 litre MSN slimline rainwater tanks connected to toilets and laundry cold tap.”
The appellant and his wife entered into a building contract with the respondent, using the Housing Industry Association standard contract for new dwellings. While it is not dated, the evidence from both parties indicates that it was signed after and close to 20 May 2007. Up to that time, there had been discussions about aspects of the contract, particularly the list of inclusions of items and standards that should be annexed to the contract.
10.In the earlier proceedings, the respondent had filed an affidavit of Andrew Nicholas Sarri dated 16th February 2009. Mr Sarri was the selling agent for the respondent in relation to the Property. Mr Sarri's affidavit confirmed in paragraph 6 and 7 (a) that at a meeting on 20 May 2007 between the appellant and his wife, Mr. Haridemos and Mr. Sarri, there was a discussion about the size and location of the water tanks shown on the plan. The respondents agreed that the plan referred to in this affidavit would have been the same as the working drawing approved plan referred to in paragraph 8 above.
11.The affidavit of Mr Sarri also stated in paragraph 7 (b) that:
"Mr Haridemos had advised Mr Butler that the tanks were not included in the inclusions/selling price, however some type of water tank would still be required to be installed (or words to that effect)…"
The appellant denies that this comment was made. The affidavit of Mr Sarri also stated that Mr Haridemos offered Mr Butler a smaller slimline tank at no extra cost (or words to that effect). Again, this statement is denied by the appellant. The appellant does acknowledge that there was a discussion about the location of the water tanks.
12.At the hearing, the wife of the appellant produced and tendered to the Tribunal an affidavit which related to this discussion. The affidavit was in irregular form and had no date indicating when it was made. As Mrs. Butler was present at the hearing I took sworn evidence from her. She said that the affidavit document had been made earlier this year. She also confirmed that at the meeting on 20 May 2007, she had asked about the rainwater tanks as they were not included in the inclusions list. She said that she was told by Mr. Haridemos that "what's on the plan is what you will get." Mrs Butler gave evidence that at no time at this meeting was she told that the cost of the rainwater tanks was a separate item to be charged to the purchaser. Nor was it included in the list of inclusions or otherwise the subject of any written advice from the respondent to the appellant. In this failure to communicate on the particular point lies the conflict between the parties.
13.It should also be noted that the terms of the standard building contract referred to in paragraph 9 require the builder in clause 3 to finish the building works according to the contract, and all relevant laws and statutory requirements. The working drawings annexed to the contract form part of the contract, as they define the work that is to be done. The appellant’s evidence was that they understood that the installation of 2 x 2000 litre water tanks as shown on the plan was part of the building work to be undertaken by the builder, and as it was not mentioned in the inclusions list or in any other written reference indicating that the cost of these tanks was an extra charge to them, they believe that they formed part of the building works under the contract and were to be provided by the respondent.
14.The respondent maintained that the appellant and his wife should have understood from the discussions that the tanks were an extra item that had to be paid for as they were not included in the inclusions list as settled and attached to the contract. The appellant and his wife could not have thought of that they would be provided free of charge by the respondent. The fact that they were not included in the inclusions list while being shown on the working drawings was stressed by the respondent as a factor which should have alerted the appellant and his wife to the conclusion that they would have to pay for these separately. The respondent did acknowledge that there was nothing in writing from it that would have told the appellant and his wife of the need to pay for the tanks separately.
15.The respondent did install a rainwater tank on the Property, but of a smaller size that did not comply with the development requirements. Mr. Haridemos gave evidence that this was a goodwill gesture on his part, something that is sometimes done by a builder for the benefit of clients. Why this should be done when the installation of these tanks would be insufficient to comply with the development application conditions, and without any clear documentation between the parties as to why it was done and informing the appellant that he would still need to install and plumb in extra tanks to comply with the development conditions, was not explained. A consequence of this gesture is that the appellant and his wife as the lessees of the Property would still be required to add additional rainwater tanks to provide the minimum necessary to comply with the development conditions if they want to sell the Property.
16.The appellant tendered a letter from the ACT Planning and Land Authority dated 6 March 2009, confirming that it was a requirement of the development approval that the rainwater tanks referred to in paragraph 8 above be installed. The letter confirmed that it was the responsibility of the lessee of the block and those engaged to undertake the work to ensure that the development was undertaken in accordance with the approved plans. The letter also noted that an inclusions list was not submitted to ACT PLA and is not a requirement for seeking development approval. As such "the site plan indicating the design, capacity and location of the rainwater tanks would be the only enforceable component." This letter was admitted as exhibit "A". The letter does not state that the original lessee of the block is required to install this capacity. If it is not done by the original lessee, than it falls as an obligation on subsequent lessees.
17.As in so many cases of contractual dispute, the lack of clarity in the contract between the parties has led to the present conflict. It falls to this Tribunal to decide whether the appellant and his wife have made out their claim that they entered into a contract on the understanding that the rainwater tanks would be provided as shown on the working drawing and as part of the construction cost, and not as an additional item to be purchased by them.
18.In the Tribunal's opinion, the appellant has made out his case to the required degree. The fact that the tanks are shown on the working drawings, there is no reference to them in the inclusions list or in any other document which would warn the appellant and his wife that they were an item to be separately paid for by them, and the significance of the installation of that capacity of rainwater tank in order to comply with the development conditions supports the appellant’s claim that the tanks were part of the construction work. While the respondent did not concede that he had stated in relation to the tanks being shown on the plan "what you see is what you get", I accept the evidence of Mrs. Butler in this regard. Recollections vary about a discussion held several years ago.
19.The finding that the appellant has made out his claim and that the respondent has failed to provide the necessary capacity of water tanks in the location shown on the plan results in a decision that the respondent must pay the costs of installing this capacity. The appellant has made it clear at the hearing that in view of the antagonistic personal relationship between the parties he is not prepared to allow the respondent on to the Property to rectify the work. While this is unfortunate, it is a consequence of a drawn out dispute over the matter. The respondent has obtained quotations for the installation and plumbing of the required capacity of tank, upon which the sum of $4,247.30, the amount claimed in the original application, has been based.
20.As the new tanks will replace the capacity provided by the smaller tank installed by the respondent, the respondent must be given the opportunity to remove this tank, subject to him paying the amount claimed by the appellant and making good any damages resulting from the removal of the tank. The appellant must be given one week’s written notice of the proposed date of removal. If the respondent does not exercise this right within 60 days of the date of the order, the right to remove the tank lapses.
21.The appellant claimed a further sum of $254.10 to cover incidental and out-of-pocket expenses in relation to the appeal. Section 48 of the ACAT Act provides that the parties to an application must bear their own costs unless the Act otherwise provides or the Tribunal otherwise orders. Having considered the matters in section 48 (2) of the ACAT Act, I am not satisfied that any of these circumstances apply. The general policy set out in section 48(1) should apply. I therefore make no order as to costs in the matter.
22.The original order of Member Thompson under appeal will be set aside, and an order substituted that the respondent pays to the appellant the sum of $4,247.30 within 30 days of the date of the order. Subject to payment of this amount, and the conditions in paragraph 20, the respondent is entitled to remove the existing water tank on the Property, but must make good any damage resulting from this. Hopefully, this can be done at a time and under conditions which will avoid any further aggravation. The parties might find it useful to have an independent third person to supervise this process, but this is a matter for them.
…………………………….
Mr C.G. Chenoweth
Acting Presidential Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO: AA 09/14
APPLICANT: KEITH PAUL BUTLER
RESPONDENT: NEW AGE LIVING PTY LTD
COUNSEL APPEARING: APPLICANT:
RESPONDENT:
SOLICITORS: APPLICANT:
RESPONDENT:
OTHER: APPLICANT: SELF
RESPONDENT: HARIDEMOS
TRIBUNAL MEMBER/S: MR C.G. CHENOWETH
DATE/S OF HEARING: 7 DECEMBER 2009 PLACE: CANBERRA
DATE/S OF DECISION: 14 DECEMBER 2009 PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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