Colless Nominees Pty Ltd v Davidson
[2005] NTMC 66
•26th October 2005
CITATION: Colless Nominees Pty Ltd v Davidson [2005] NTMC 066
PARTIES: COLLESS NOMINEES PTY LTD
v
ALLISON GAYE DAVIDSON
TITLE OF COURT: Local Court
JURISDICTION: Local Court
FILE NO(s): 20326458
DELIVERED ON: 26th October 2005
DELIVERED AT: Darwin
HEARING DATE(s): 14, 15 April, 29 June, 6 July 2005
JUDGMENT OF: Mr R.J. Wallace SM
CATCHWORDS:
Contract – formation of contract – variation of contract - consideration – lack of consideration – lack of consideration not pleaded – promissory estoppel – “detriment” – “unconscionable” – uncertainty – interpretation contra proferentem
Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 not followed.
REPRESENTATION:
Counsel:
Plaintiff: B.O’Loughlin
Defendant: W. Piper
Solicitors:
Plaintiff: Clayton Utz
Defendant: Pipers
Judgment category classification: A
Judgment ID number: [2005] NTMC 066
Number of paragraphs: 115
IN THE LOCAL COURT
AT DARWIN IN THE NORTHERN
TERRITORY OF AUSTRALIA
No. 20326458
BETWEEN:
COLLESS NOMINEES PTY LTD
Plaintiff
AND:
ALLISON GAYE DAVIDSON
Defendant
REASONS FOR JUDGMENT
(Delivered 26th October 2005)
Mr WALLACE SM:
1. The defendant, Allison Gaye Davidson (“Ms Davidson”) owns a business, Barton Houseshift, and runs it with her partner Kym William Barton (“Mr Barton”). Barton Houseshift buys second hand houses, sells them on, and transfers the houses to the new owner’s site. This action arises out of Ms Davidson’s sale of a house to Colless Nominees Pty Ltd, the plaintiff, and its transportation from Strangman Court, Larrakeyah to a block at Mandorah on Cox Peninsula. Brian Martin Colless (“Mr Colless”), a retired civil engineer, is a director and the guiding mind of the plaintiff. A price of $77,000.00 was agreed for the house, its transportation to and its restumping on the Mandorah site. The plaintiff paid a deposit.
2. Before moving the house, the defendant was obliged to lop part of it off in order to make it narrow enough to be transported. At one time there seems to have been uncertainty as to whether they would lop off a back verandah, or the front eave to achieve this slimming, but in the end it was the eave which was cut off, and delivered separately to Mandorah.
3. The claim is a complicated one, but in essence it relates to two things. First is the matter of the eave: there is claimed a sum as the cost of reattaching it to the house (or, perhaps more accurately, putting on a new one). Connected with the defendant’s alleged failure to do that there is a claim for a series of consequential losses, there having been water damage attributable to leaks permitted by the eave’s absence, (no claim is made for that damage) and leading into further losses because the plaintiff was not able to let the premises, as it intended, as a short-stay holiday house, until the eave was in place, and the water damage made good.
4. Secondly, the plaintiff claims that the defendant failed to perform a series of other works, additional to the delivery and restumping of the house, which the defendant had agreed to do. (The non-completion of these works similarly prevented the letting of the premises.)
5. The original statement of claim was filed on 1 December 2003. A handwritten notice of defence was faxed to the court by Ms Davidson on 16 February 2004. (Ms Davidson lives near Katherine). An amended statement of claim was filed on 12 July 2004, to which a notice of amended defence was filed by Ms Davidson on 13 August 2004. This notice is typewritten, and consists almost entirely of the words “agree” and “disagree” in response to the various paragraphs of the amended claim. In their different ways the original defence and the amended defence each suggest that their author, Ms Davidson, did not have the benefit of any professional legal advice.
6. The plaintiff was granted leave and filed a further amended statement of claim on 20 August 2004 to which Ms Davidson responded with a further amended notice of defence faxed to the court on 24 August 2004. Again, this document appears not to be quite what a lawyer would produce. It effectively combines the contents of the two earlier defences.
7. Around this time Ms Davidson did start to instruct Messrs Morgan Buckley, but it appears that her relations with that firm never went very far, and Morgan Buckley never filed a Notice of Appearance. While a Ms McDonald of that firm was in receipt of earlier instructions, she did raise with Ms Gamley, of Messrs Clayton Utz, solicitors for the plaintiff, the matter of a proposed counterclaim. A counterclaim of sorts was lodged with the court (among a welter of applications) by fax on 17 November 2004. An amended counterclaim dated 1 March 2005 was eventually filed. Parts of it were abandoned at hearing. What remains is a claim by Ms Davidson for the value of certain works done by Barton Houseshift over and above those contracted to be done for the original $77,000. These additional works were in relation to the building of a balcony on the seaward side of the house after it was restumped on the Mandorah site. That the defendant did works for such a balcony is not in dispute. How much work, exactly what works, is, as is their value.
The Original Contract
8. The first discussions about the sale and purchase of the house took place between Mr Barton and Ms Caryl Warren. Ms Warren is Mr Colless’s partner. Ms Warren’s evidence – see p84 of the transcript – was that in the course of these very early discussions Mr Barton represented to her that the house was coded, i.e. that it complied with the building codes obtaining after Cyclone Tracy. The most persuasive evidence on this point was Mr Barton’s, in cross-examination (p210):
MR O’LOUGHLIN: Mr Barton, did you think that the – when you first became aware of this house in Larrakeyah, I think in evidence-in-chief you thought it was largely or partly up to code?---The owner of the house actually portrayed it to be up to code, but we were not sure it was up to code.
MR O’LOUGHLIN: Now, is it possible that you then passed that understanding on to either Brian Colless or his partner Carol Warren?
That was a ‘yes’?---Sorry – that it was partially up to code, or ---?
Well, no. You said the vendor – I think someone said it was Halkitis, or something – they told you or portrayed it to be up to code. Is it possible that you then passed that fact – portrayal – to Brian and/or Carol Warren?---No.
Did you believe their statement that it was up to code?---No.
Did you have any reason to doubt that it was up to code?---Yes.
What was that reason?---Well, every house is up to code until you shift it.
But apart from that – because – once it is removed has got to comply with a new code, is that your point?
And were you told by the previous owners that where it currently sits it is complying with the current code, the full cyclone code?---No”
That was a ‘yes’?---Sorry – that it was partially up to code, or ---?
Well, no. You said the vendor – I think someone said it was Halkitis, or something – they told you or portrayed it to be up to code. Is it possible that you then passed that fact – portrayal – to Brian and/or Carol Warren?---No.
9. I doubt whether Mr Barton ever asserted that, but he may have believed that the house might be up to code, and I accept that Ms Warren came to believe, for a short time, that it was. Mr Colless, who was away from Darwin at the time of these early discussions, made some enquiries on the subject, and himself went to the Building Board to check on the matter. There was no certificate of occupancy there to verify that the building was up to code. Mr Colless’s evidence – see p12 of the transcript - was that the lack of that certificate did not extinguish all hope: often enough householders have the necessary works done then fail to file the appropriate paperwork. So Mr Colless, of his own suggestion, or perhaps Ms Davidson’s or Mr Barton’s had an engineer, Mr Peter Russell, inspect the structure. Mr Colless and Ms Davidson were with him at the house at Larrakeyah while he carried out that inspection. Mr Russell’s report became Ex3. It seems from that report that the previous owners had done some upgrading work towards making the pre-cylcone) house compliant with the post-cyclone code. However, some of the necessary work had not been done, or had not been properly done. Mr Russell listed 15 items in Ex3 – the “15 bullet points” – which needed to be done to bring the house up to code. Mr Russell’s report, Ex3, is not dated, apart from its noting that the date of the inspection was 20 August 2001 (I presume that is a slip that should have read 2002). I assume that Mr Russell prepared and delivered the report that day or the next: such is the burden of the evidence of Mr Colless.
10. Much earlier than that, on 5 July 2002, Ms Davidson had faxed to Colless Nominees – actually to Ms Warren at her place of work – a letter dated 3 July 2002 described by Ms Davidson on her fax’s cover sheet as “the offer to purchase” (although it might better have been described as an offer to sell). This fax became Ex2. The letter sets out proposed terms of sale. It reads:
Dear Brian
We are pleased to offer you the 3 bedroom house inspected by yourself at 2 Strangman Circuit, Larrakeyah. Please find following the terms and conditions of the sale of the house.
Purchase price of the house delivered and restumped, is $77,000, including GST. The house will be available for us to commence work by the end of the month, and a Permit to relocate will be obtained for the following available weekend.
The price includes the following;
(a) Transportation of the house from the current location & delivery to you property at Number 10 Cox Drive, Mandorah NT.
(b) Restumping of the house at 2.85m,
(c) Footing holes, concrete & 100 ml box section piers.
Barton Houseshift gives no guarantees to the quality and/or structure of the house. You must rely upon your own inspections of the building to determine the condition of the house for its intended purpose.
Barton Houseshift will not be responsible for any of the following and the price does not include any of the following:
1 Access into the proposed site at No 10 Cox Drive, Mandorah,
2 Connection of services such as power, water and septics,
3 House plans, certificates or inspections,
4 Any verandah’s and stairways attached to the building,
5 Any further excavation costs, should we encounter soil irregularities such as rock etc in footing holes,
6 Transit Insurance for the building.
The payment details are $55,000.00 (including GST) on acceptance of this offer, and the balance of $22,000.00 (including GST) on the completion of the restumping at No 10 Cox Drive, Mandorah.
**Please Note: If further costs are incurred (such as clause No 5 above, or upgrading quotes), a separate invoice will be issued.
It is up to the discretion of the Motor Vehicle Registry if any verandah’s/landings etc may remain attached during the transportation. Therefore, we can not give any guarantee to the condition of such if they are required to be removed from the building.
If there is anything further that you wish to discuss, please do not hesitate to contact either myself or Kym.
Yours sincerely
Alison Barton
Barton Houseshift.
11. To the extent that the contract was reduced to writing, this is that writing. So far as statements by Ms Davidson or Mr Barton (or – who knows? – perhaps one of the house’s former owners) about its coding, the clear written disclaimer in the letter, “Barton Houseshift gives no guarantees…etc” clearly, in my judgment, establishes that the purchasers ought not to rely upon them (if they were made). I might also add that Mr Colless, a civil engineer whose familiarity with building codes is abundantly clear from his evidence passim, and who refers to his experience with older houses in Darwin, seems to me the least likely of men ever to rely, even for a moment, on any assurance from any less qualified person than himself.
12. An example of the quality of Mr Colless’s understanding of the building codes appears at p15 of the transcript, concerning the windows of the house:
“It’s not the type of thing that a lay person would know that a house in place could have substandard glazing and be acceptable to the building authority but the minute you move that house, you have to upgrade the glazing.”
13. If Mr Barton ever essayed an opinion about the cyclone coding of the house – and I am not persuaded on the balance of probabilities that he did – I do not believe that Mr Colless relied upon it at all. He may have had his hopes, but no more than that.
14. The offer was accepted and a deposit was paid. The payment of the deposit was not in accordance with the terms set out in the letter: “The payment details are $55,000.00 (including GST) on acceptance of this offer…etc”. The evidence in relation to the payment of the deposit is surprisingly (and frustratingly) vague. According to Mr Colless (transcript p11):
“I recall just as a matter of good faith making a payment of $7,000 initially and then I recall making a payment of $20,000. that brought it up to about, I think the first payment was $7,7000 of that order, then $20,000 and about a week or two weeks before the house was transported we paid the balance of the $55, 000 which was in the letter.”
15. In an answer to a question on p12, it is entirely unclear whether $7000 (or $7,700) or $27,000 had been paid over as at the time of Mr Russell’s inspection.
16. Ms Davidson’s evidence is no better. On p136, asked how much she had received by the time of the Cool Spot meeting – a few days after Russell’s inspection – Ms Davidson said (p136)
“I’m not sure if there was just the $7000. After the $7000 payment there was another split payment again of – I think it was 20 or might have been 23 or something like that but I’m not denying that they never paid the deposit but it wasn’t paid as per the letter of offer said it had to be paid.”
17. Earlier, apropos of the payment of the $7000, Ms Davidson said (p131 – “the 3rd or the 5th” is of August 2002):
“We were back in Darwin I think the following or the weekend after the 3rd or the 5th, we met at the house again and there was discussions about the actual relocation, getting it out of the site. There was basic discussions in relation to the letter of offer with the stairs and all that sort of stuff. There was a particular discussion about an eave having to be removed to reduce the width.
Before you go on with that meeting, had they accepted the offer by this stage?---Yes, yes.
How did they do that?---They offered to – a deposit was supposed to be paid on acceptance of the offer but it was our understanding that they had $7000 to offer at that time but they had to organise finances through – something I’m not quite clear on with their personal ---
So I think you received that $7000?---I believe so, yes.
And going back to that meeting on the weekend, who was there at the house?---I’m pretty sure there was Kym and I and Caryl and Brian.
And the family was still living in the house at that time?---Not at the second time, no, they moved into the house right next door so they were still present when they weren’t in the house.
And going back to where you were, what occurred on that day?---We just had another look at it. Caryl was quite beside herself with excitement over the house, which I can relate to, we just had another look. We had put in a permit with the Motor Vehicle Registry to get some sort of an idea from there but it’s up to the discretion of the Motor Vehicle Registry to indicate to us what we have to do to reduce the width for each and every load, all of them. We had a talk about one of the eaves having to come off the house to reduce the overall width. There was a few options we could have went with, there was an eave on the front, on what I refer to as the dining room side of the house and there’s a verandah on what was then the back of the house at Strangman Court. It was more logical and economical to the purchasers that the eave on the front of the house come off because that was cheaper than obviously taking all the verandah and everything off the back. So then Caryl Warren indicated as well that if we were to take anything off the house they would prefer it to be on what is called the front side. When it was at Strangman Court it was the front eave over the dining room side because they intended to build a verandah out there.”
18. I accept this passage as truly representing Ms Davidson’s belief as that time of the state of contractual relations between the parties. (On the question pertaining to who said what when about the removal of the eave the truth is less clear.)
19. It seems to me that it is quite important to work out, as far as possible, whether a contract had been formed by the parties at this point. The payment of the deposit of $7000 or $7,700 by Mr Colless strongly suggests a desire on his part to seal a bargain, a p52:
“You wanted the house and you wanted to get it before anyone else which is why you put the money down fast? --- No, no, my partner wanted the house.”
20. Indeed, Mr Colless’s recollection that the money put down fast was perhaps $7,700, one tenth of the contract price, obviously echoes the most common practice in contracts for the sale and purchase of land. In those contracts there is a tried and true written contract covering nearly all foreseeable eventualities. In the case of the sale of this house to Colless Nominees, there is no such written contract, apart from the letter, the “offer to purchase” and a 10% deposit is not contemplated in that letter. I am left to do my best to discern the intentions of the parties from the evidence as to their words at the time – there is precious little of that – and their actions afterwards. I conclude that Ms Davidson’s acceptance of the $7000-odd deposit betokens a waiver by her of the letter’s requirement of “$55,000…an acceptance of this offer…” and a variation of terms accordingly. Instead it appears that both parties argued that Colless Nominees would pay the $55,000 total as quickly as it could and in any event before the house was moved. It seems to me that the vagueness of both Mr Colless and Ms Davidson as to the stage when the next $20,000-odd was paid points strongly to the conclusion that neither of them thought that that payment changed or indicated anything in particular – it was just a step along the way to the necessary $55,000. Meanwhile, Ms Davidson ceased to look for any alternative purchaser – her evidence was that there had been a number of people apparently interested in this house – and proceeded to approach the Motor Vehicle Registry to prepare the way for the move to Mandorah. In my opinion the vendor and purchaser of this house each thought, correctly, that an agreement to sell and buy had been struck on the payment of the $7000 (or $7,700). The terms of the agreement were those of the letter, the “offer to purchase”, varied in respect of the $55,000. The paragraph, “Barton Houseshift gives no guarantees’ to the quality and/or structure of the house…” etc, was a term of the contract.
A Variation To The Contract?
21. Having received Mr Russell’s report, Mr Colless sought a meeting with Ms Davidson to discuss the matters raised in it. He originally suggested that they meet at his house, believing it to be an advantage in bargaining to be “on your own territory” see p53. Ms Davidson and Mr Barton may have read the same texts on business tactics: they suggested that the meeting take place on neutral ground, and the parties settled on the Cool Spot, a coffee shop at Fannie Bay. They met within a day or two of the production of Mr Russell’s report. (Russell’s inspection had been on 20 August 2002 and, after the meeting Ms Davidson sent an email containing a sort of minute of the meeting, to Mr Colless on 23 August (the email became Ex4).
22. Mr Colless’s reasons for meeting to discuss the matter were clear enough when he was giving his evidence in chief, but their most explicit exposition came in cross-examination:
(p53) “I know that uncoded houses are a nightmare to upgrade and I was deliberately – I was definitely wanting a coded house…”
(p54) “… you know, I have a rough idea that you can spend $100,000 upgrading a house, I’ve supervised upgrading houses and I know what a nightmare they”-
(p54) “…but having this report and the items pinpointed I knew it wouldn’t be that order of cost, but if it was going to be too much, you know, certainly I would have pulled out and asked for my money back. I sort of got the impression that they were wanting the agreement to go ahead too and definitely my partner was wanting the agreement to go ahead.”
23. Mr Colless’s hope was that at the meeting he might persuade Barton Houseshift to carry out some of the works that would be needed to bring the relocated house up to code. As far as I can tell, neither Ms Davidson nor Mr Barton knew much about the detail, but they were aware that this was Mr Colless’s agenda, see Mr Barton’s evidence at p210-211, and Ms Davidson’s at p134. It also seems that both parties were contemplating that they might withdraw from the agreement. I have just quoted Mr Colless from p54, here is Ms Davidson at p134.
“Kym and I had discussions on the way to the Cool Spot on what we were prepared to do and that was to offer Brian Colless his deposit back and resell the house to one of the other lots of people that had rung up for it.”
24. Notwithstanding that, immediately before the Cool Spot meeting, both parties had reasons for dissatisfaction – Mr Colless at the now undeniable expense he faced to bring the house up to code, Ms Davidson and Mr Barton at the thought of being squeezed by Mr Colless - it is clear that, as Mr Colless noted, both did want to go ahead with the contract. On Mr Colless’s side he attributes that desire entirely to Ms Warren. That would be enough. On the Barton Houseshift side the source of the desire is less obvious. I set no store by Mr Colless’s theory (p64) that they may have been motivated by shame or embarrassment at the house’s having turned out to be not up to code. My suspicion is that their desire, and Mr Colless’s personal preference too originated from inertia. The agreement had gone a certain distance, expectations had formed, plans had been made and it was easier to go on than not.
25. There was also evidence from Mr Barton to the effect that it was not uncommon for purchasers to request him to do little pieces of work in need of doing as about the time a shifted house was restumped, and that it was not uncommon for him to do such work, free of charge, provided he had the necessary tools and labour on hand and the job were not too large. That being so, his apprehension before the Cool Spot meeting may have been allayed, or completely dispelled, by his understanding (which may have been correct or not) that what Mr Colless was asking of him was not too large.
26. The meeting seems to have been quite amicable. There is no doubt that Barton Houseshift – Mr Barton seems to have been Mr Colless’s principal interlocutor at the meeting – undertook to do some work on the house after it had been relocated as part of the works necessary to bring it up to code. The scope of the work agreed by Mr Barton is a matter of strong dispute on the evidence. There is also no doubt that Ms Davidson sent to Mr Colless the email Ex4 mentioned above, where I described it as a sort of minute of the meeting.
27. Ex4 reads as follows:
BRIAN COLLESS
From: Allison Barton [[email protected]]
Sent: Friday, 23 August 2002 10:36AM
To: [email protected]
Subject: Upgrade works to No 2 Strangman Court
Dear Brian & Caryl
Further to the discussions and inspections with Peter Russell late on Tuesday
Afternoon (20.8.2002) at the house at No 2 Strangman Court, Larrakeyah regarding the work required to be completed for the coding of the house, and the discussions between Brian, Kym and myself at the Cool Spot, Fanny Bay, it is agreed that we will undertake the following to assist with the coding of the house.
As explained to Kym & myself, the following work is required:
The 100mm hollow box section is to be fixed (may already be fixed but is not visible at this stage) to the 6mtr split timber bearer that is exposed in the lounge/dining area inside the house. It is agreed that if there is no such fixture in place, a welded angle or flat bar bracket out from each side of the 100mm box section (a total of 4 brackets) with 2 coach screws on either side to catch the split bearer, a total of 8 coach screws, will be sufficient.
The rafters that are supported by the 6 mtr exposed bearer (same bearer as above) are required to be trip L gripped on each side.
The Z brackets on the outer perimeter wall along the bedroom side need to be bolted through the rafters.
The floor joists need to be trip L gripped to the bearers under the house. Where there is a split/joined joist, a trip L grip will be placed on both sides.
We will undertake the above work as agreed. However, we will not accept responsibility for any further work without further discussions or negotiations. The work will commence when the house is on side at No 10 Cox Drive, Mandorah.
Regards, Allison.
28. The works which Barton Houseshift at the Cool Spot meeting undertook to do are the works the non-performance of which forms the second limb of the plaintiff’s claim.
29. There is no doubt that there was no alteration of the contract price as a result of the Cool Spot meeting. In examination in chief Mr Colless, questioned by Mr O’Loughlin, at p16:
“Those other four or five items that they agreed they would do. Was there any mention in that conversation that they would not be at their expense and part of the contract price but at your expense?”
“It was definitely not at my expense. No like, I was already offering something at my expense [i.e. the glazing and other items] Much more than what they were offering.”
And at p17:
“..Was there any discussion about the contract price changing now from 77 to some other figure?”
“Definitely not”
Similarly, in cross examination at p55-56:
“What my client does not agree with is that while nothing was said it was implied and this is the question – and you would agree from the discussions there was no mention of an increase in price and it was not intended by either of the parties that there would be an increase in price by reason of their agreeing to do these further works?”
“That’s what I believe, yes.”
Consideration
30. These answers, and all the other consistent evidence on the point, brought into my mind the question, which I raised with Mr O’Laughlin towards the end of the second day’s hearing (p135): where is the consideration for the undertakings made by Barton Houseshift at the Cool Spot meeting?
31. In written submissions received on 21 July 2005. Mr O’Laughlin canvassed four possibilities. I will deal with them in turn.
“1. The Verandah Contract was Consideration for the Four Items
1.1 Evidence from Kym Barton was that the agreement to have the defendant build the verandah was reached at the same meeting at the Coolspot at which the additional four items described in the defendant’s email of 23 August 2002 were discussed. The plaintiff also gave evidence that the agreement to build the verandah was reached, discussed or confirmed at this meeting.
1.2 This opportunity to build the verandah should be regarded as consideration (i.e. the defendant can build the verandah at a profit).
1.3 Courts are not to look at the sufficiency of the consideration, simply to determine if there is any consideration .
1.4 Thus, in exchange for the additional profit of building a verandah, the defendant agreed to undertake the additional four items.
1.5 If this issue had been pleaded by the defendant (which it is not), the plaintiff would have specifically replied to the matter. Clearly, the plaintiff has not had this opportunity as the matter was not pleaded.”
32. The difficulty with that submission lies in the factual premise in paragraph 1.1. There is no doubt that Mr Colless had it in mind to add a new verandah (or balcony) to his translocated house, and there is no doubt that this verandah, and his desire that Barton Houseshift might do some of the works towards its erection, was brought up by Mr Colless during the Cool Spot meeting. And there is no doubt that, ultimately, Mr Barton did these works – principally drilling holes for concrete footings, then fixing steel uprights and beams. (These works are the subject of the counterclaim).
33. Here is Mr Colless on what was said at the Cool Spot (p125 – 127). This was in cross-examination. The passage is long and slightly confused but I can think of no fair way to edit it:
“It’s one I neglected to put to you in your earlier evidence and that is that at the Cool Spot there were discussions about the verandah and Mr Barton is going to be saying ---
HIS WORSHIP: The new verandah.
MR PIPER: The new verandah.
You were asking him for a price for the whole of the metal work and footings for the verandah? ---For the steelwork, yes.
You’d agreed that that was discussed?---Sorry, I never had included the beam up – the first floor beam with the cleats to pick up the verandah roof but ---
But not in your head?—Yeah, I had asked him for a price, yes.
And that was at the Cool Spot?---Mm mm.
And he said that he couldn’t give you – he wasn’t prepared to give you a flat price for the whole of the new verandah structural steelwork?---Mm mm.
And he said that he would just – he has a standard charge for holes for the footings and that’s $400 a hole. I know I didn’t ask you that in your earlier evidence and I should have but that’s what his evidence is going to be and you need to have an opportunity to respond?---Yes.
Now could he have said that – did he say it firstly?---He did mention a cost per hole he said – I asked him for a quote and he said, ‘Look, I can’t give you that now but those holes we’re doing for the main part of the house they’re $300 each’.
Well , he says the figure of $400 was said to you at the Cool Spot?—No.
You say that he gave the impression that the holes would be---?—For the main house and said that he would generally charge $300 a hole?---For those ones on the main house, yes, he said that’s his general charge. Now bearing in mind the ones on the house – that didn’t worry me too much because the ones on the main house are much deeper than the ones on the verandah.
And he said that he would otherwise charge you for the verandah at an hourly rate?---We didn’t agree on an hourly rate.
No, he admits he didn’t give you – no, in fact he says he can’t recall?---No, I wasn’t given any rates.
He says he can’t recall whether he gave you an actual figure?---No, he – well, I can’t recall him giving me a figure either.
He says that he said, ‘I’m not giving to you a quote’ and I think you’ve already accepted he wasn’t prepared to give you a quote for the whole verandah?---He said he couldn’t give me a quote then and there.
And he said he’d do it on his – well, after the discussion about the holes he said that otherwise hourly rates?---No, because Allison Davidson’s fax or e-mail to me she says that he will be providing a quote at a later date.
The question is ---
HIS WORSHIP: The question is just what you can recall of the conversation at the Cool Spot, Mr Colless?---Yes.
It’s being suggested to you that Mr Barton said to you that any work he agreed to do he’d charge you at an hourly rate?---Mm mm. He---
I don’t think it’s being suggested to you that you said ‘All right fine’, I think it’s just being said that that was put as a proposition by Mr Barton and left hanging in the air?---Yes.
Is that right Mr Piper?
MR PIPER: Well, there are two parts I suppose and I will deal with them individually.
I mean it does seem a natural progression in the conversation, do you recall him actually saying that he’d do it at an hourly rate?---Do the whole work at an hourly rate?
Not the holes, do steelwork at an hourly rate?---No, I don’t, I don’t recall that.
He will say that that was how it was left and agreed?—Mm mm.
Would you accept that?---No.
Well, he did do the formwork – the steelwork on the verandah?---No formwork, you keep mentioning formwork.
But he did do the steelwork so was there some other arrangement that was between then and – that we haven’t heard about yet between then and when he did start the work on the verandah?---No, no there was none. Before he left site I asked him to sit down with me and work out the price, this was before it was finished.
Before what was finished?---Before the steelwork he did on the verandah was finished”.
34. And here is Mr Barton, in chief (p186):
“Was the verandah discussed at that meeting?---Yea, well it was---
What was discussed about the verandah at that meeting?---He actually asked me whether I’d be interested in doing the footings and steel work seeing as he had all the equipment there, to save him mobilising someone else to go around and do the work. And I told him our standard rate was $400 a day, and we worked on $95 an hour for a welder and labour.
Do you recall whether you said it was an hourly rate or just – you actually gave a figure, or just used the words ‘hourly rate’?---Yeah, I told him our hourly rate. You cannot – there was just no way you can quote on a job like that because you don’t know what you’re in for. We didn’t even have a set of plans to go with at that time, and what he wanted. Because one minute he wanted a full verandah around the house and then it was changed.”
35. The nearest any testimony came to establishing an agreement was Mr Barton in cross examination (p216-217):
“The construction of the new verandah was discussed at the Cool Spot, was it not? ---I believe so.
And you asked for plans and Brian said he had not got them at that stage, and that was about as far as he could take it. You said ‘well, I can’t do a costing or an estimate if I don’t have plans’?---He asked me what I would charge.
He did?
And what did you say?---$400 a hole. And $95 an hour.
That was said at the Cool Spot?---I think so, yes.
You think so?---It was discussed.
You think it might of happened at the Cool Spot or might have happened somewhere else?---Look, I could not recall.
It might not of happened at all?---No, it did happen.
But this is pretty important, is it not? This is a – well what did he say – ‘yes that is okay’ or ‘by golly that is a lot’?---Are you insinuating that we are too dear?
What did he say in response?---He did not say anything actually. I don’t think. He was writing some things down when we were – he was trying to scribble down a bit of a plan of his verandah at the time.
Did he say anything to indicate ‘Yes, I agree with those rates’?---No, but he did not disagree either.
And did you take that to mean anything? That ‘I have told him my rates, if he asked me to do the work he knows the terms’?---Yes, I took it like, if he did not want us to do it he would not get us to start on it.
And in a fact, we have an agreed contracted rate as to how much your work would cost for the verandah?---Verbal agreement, yes.
You are not sure where it happened, Cool Spot or somewhere?---Well there is only a couple of place it could have been. It could have been Mauna Loa Street or the Cool Spot, where we had our discussions, or at tea. We went out to tea one night as well.
And this is a contracted term, the claim now in relation to the verandah is based on a contractually agreed rate for works that you would provide before the work was done?---That’s right.
And I put it to you that you have made up that evidence, and that no conversation at all was had by you and Mr Colless where you stated a rate of $95 an hour because I told him and he then asked me to do the work’?---Exactly.
Which one? I have you an alternative, then?---The second one. I told him the price and he agreed on it, otherwise we would have never started on the job and he would have never let us start on the job.”
36. In my opinion, taken as a whole the evidence of both Mr Colless and Mr Barton establishes that there was no contract formed at the Cool Spot meeting. It seems not have been certain that Mr Colless would want the work done. If he did, Mr Barton had quoted at least for the hole drilling part of the job. The matter was left there, at least until Mr Colless showed Mr Barton the plans for the verandah at some later date. Just how and when the parties agreed on contract after that is obscure – see below, concerning the counterclaim. The last answer quoted from Mr Barton evidences that obscurity: it could be a layman’s statement of a sort of estoppel.
37. There remains the point raised in paragraph 1.5 of Mr O’Loughlin’s submissions: the issue of consideration was not pleaded. I will return to this. Mr O’Loughlin’s second line of argument was:
“2. The First Contract was Rescinded by Consent
2.1 Alternatively, no additional consideration is required if the earlier contract has been rescinded, such that the earlier obligation is regarded as discharged. A new contract is created and there is no need to look for additional consideration .
2.2 In this case the existing duty (to pay the purchase price) may be viewed as having been discharged by a new contract which includes a promise with the same content as the original obligation (plus the additional four items). The obligation will be regarded as binding because consideration is present in the parties’ agreement that the original obligation is to be discharged.
2.3 In this case there was no express agreement for discharge of the obligation or termination of the contract, however, there was evidence upon which this should be implied or inferred.
2.4 Evidence from the defendant and her husband, was that on driving at the Coolspot they were of the view that if an agreement could not be reached, then the house could be taken elsewhere and the deposit returned. It can be inferred that the parties approached the meeting where each knew that the original contract could be discharged and a new contract may (indeed was) reached.
2.5 The decided cases suggest that this inference will be readily drawn in the earlier agreement can be lawfully, terminated, as there is a general dissatisfaction with the rigidity of the general rule .
2.6 Unless the circumstances are such that it is impossible to interpret the later contract as a termination of the first, a court will discern an implied agreement to terminate the original contract and consideration will be present .”
38. As Mr O’Louglin notes at paragraph 2.3, there certainly was no express agreement to this effect. Nor, in my opinion is there any evidence pointing towards the conclusion that the parties at the Cool Spot meeting agreed to rescind the original agreement and to start again. Indeed there is no reason to believe that either party even mentioned the possibility of one or other of them wishing to withdraw from the original agreement. (There is evidence that both parties had given thought to that course of action outside the meeting.) It likewise seems to me that the parties’, and in particular Mr Colless’s silence on this matter at the meeting, takes this case out of the class of cases where his forbearance from suit - based presumably on a breach of a representation that the house was up to code (however feeble the chances of such a suit succeeding might be) can be consideration moving from the promisee in exchanged for the promisor’s undertaking additional obligations. As I have written already, I do not accept that there ever was any such representation, and even if there ever was, it could not have survived the communication of the terms of the “offer to purchase”. But irrespective of my findings, the evidence bearing on the Cool Spot meeting is very much not in the form that Mr Colless came to that meeting to say either that he would withdraw (by reason of that misrepresentation) or to threaten Barton Houseshift with a suit for the price of the extra works needed to bring the house up to code. There is no evidence that at the meeting Mr Colless offered anything for the additional obligations, except to go ahead and complete the contracted purchase of the house.
39. Nevertheless, Mr Colless did lay before Mr Barton and Ms Davidson his problems in bringing the house up to code, and it was in the light of this disclosure that Barton Houseshift agreed to do some of the works. This gives rise to O’Laughlin’s third submission:
“3. Alternatively, The Agreement to continue with the Purchase was Consideration
3.1 It is suggested that the plaintiff already had an existing duty to pay the $77,000 for the house.
3.2 In Ward v Byham , Denning LJ stated: “..a promise to perform an existing duty or, or the performance of it, should be regarded as good consideration, because it is a benefit to the person whom it is given”.
3.3 This principle has been applied in other jurisdictions in England and in Australia:
Popiw v Popiw .
3.4 Thus the plaintiff by agreeing to pay the remainder of the $77,000, even, though it has been an existing duty, should be regarded as good consideration.
3.5 Further, the defendant obtained the practical benefit of not having to transport the house all the way to Katherine.
3.6 Carter on Contracts refers to authorities where the principle that consideration may not be required does not apply to situations where one party has applied duress . There is no evidence to suggest that there was any extortionate behaviour on the part of the plaintiff. The evidence from the defendant was that her husband was quite keen or not fussed in doing the extra work. The defendant gave evidence that taking the house to Katherine was a viable alternative such that the defendant was not put under pressure by the plaintiff.
3.7 Santow J. in Musumeci v Winadell Pty Ltd considered the authorities and confirmed that such a principle should apply (see page 747). Likewise, Trietel, in The Law of Contract , after considering the case law and the policy factors doubted whether consideration should be applied in this type of situation:
“In view of these developments, it may be doubted whether the doctrine of consideration continues, in this type of case, to serve any useful purpose; and in particular whether the new promise should not be enforced if it was obtained, without duress, in the course of commercially reasonable renegotiation”
40. The judgment of Santow J. in Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 does indeed support Mr O’Laughlin’s contention. Santow J followed in part the judgment of the English Court of Appeal in Williams v Roffey Bros and Nicholls (Contractors) Ltd [1991] 1 QB 1. Musumeci v Winadell Pty Ltd was a case in which a landlord had agreed during the currency of a lease that the tenant might pay a lesser rent than the lease prescribed. Williams v Roffey Bros was a case where a subcontractor who had got into difficulties performing his underpriced contract was promised by the head contractor that he would be paid more than the contract price. Santow J’s conclusion was that the law in such cases could be stated as follows (at p746-747)
“Accordingly, I am satisfied to conclude that, subject to the earlier recasting of the five elements of Glidewell LJ, Williams v Roffey should be followed in allowing a practical benefit or detriment to suffice as consideration. For convenience, I set out below the re-cast elements, changes indicated by italics. I recognise that they will be further refined in light of experience. One particular issue is the extent to which a benefit or detriment, said to be “practical”, as distinct from explicitly bargained for, must nonetheless be consistent with, and not extraneous to, the bargaining process, as at least its intended result if not necessary its moving force:
“The present state of the law on this subject can be expressed in the following proposition:
(i) If A has entered into a contract with B to do work for, or to supply goods or services to, B in return for the payment by B, and
(ii) At some stage before A has completely performed his obligations under the contract B has reason to doubt whether A will, or be able to, complete his side of the bargain, and
(iii) B thereupon promises A an additional payment or other concession (such as reducing A’s original obligation) in return for A’s promise to perform this contractual obligation at the time, and
(a)As a result of giving his promise to B obtains in practice a benefit, or obviates a disbenefit provided that A’s performance, having regard to what has been so obtained, is capable of being viewed by B as worth more to B than any likely remedy against A (allowing for any defences or cross-claims), taking into account the cost to B of any such payment or concession to obtain greater assurance of A’s performance, or
(b)As a result of giving his promise, A suffers a detriment (or obviates a benefit) provided that A is thereby foregoing the opportunity of not performing the original contract, in circumstances where such non-performance, taking into account B’s likely remedy against A (and allowing for any defences or cross-claims) is capable of being viewed by A as worth more to A than performing that contract, in the absence of B’s promised payment or concession to A.
(iv) B’s promise is not given as a result of economic duress or fraud or undue influence or unconscionable conduct on the part of A nor is it induced as a result of unfair pressure on the part of A, having regard to circumstances, then,
(v) The benefit to B or the detriment to A is capable of being consideration for B’s promise, so that the promise will be legally binding.”
41. On the way to coming to that conclusion Santow J was able to cite some judgments where Williams v Roffey Bros had been applied, for example (at p746)
“It remains to note two recent examples, one in Australia and one in the United Kingdom, where Williams v Roffey has been applied. In each the practical benefit was to B as an employer, in avoiding potential workplace disruption, in return for B increasing severance payments of posting a redundancy package. The first, Lee v GEC Plessey Telecommunications [1993] IRLR 383 was the English case, in which Connel J stated (at 389):
“The situation is similar with an increase in severance due to redundancy, for a redundancy payment is part of the remuneration package. The employee continues to work for the employer, thereby abandoning any argument that the increase should have been greater and removing a potential area of dispute between employer and employee. The employer has both secured a benefit and avoided a detriment.”
The second, Ajax Cooke Pty Ltd t/a Ajax Spurway Fastners v Nugent (Supreme Court of Victoria, Phillips J, 29 November 1993 unreported), though obiter, concuded in a Victorian case of a redundancy package (at 12):
“…The benefit to the plaintiff [the employee] is obvious. As for the defendant [the employer], was it not open to infer that, in posting notice of the redundancy package, and thereby announcing the benefits to be paid during the relevant period, the defendant acted to secure some benefit or advantage to itself, whether by inducing its employees to refrain from further industrial disputation or by encouraging them to continue in their present employment? After all, as was said by Lord Hailsham, LC, in Woodhouse AC Israel Cocoa Ltd v Produce Marketing Co Ltd [1972] AC 741 at 758 (quoted by Purchas LJ in Williams at 21):
‘Businessmen know their own business best even when they appear to grant an indulgence’.”
An example of avoidance of a very substantial practical disbenefit held as sufficient consideration arose in Anangel Atlas Compania Naviera SA v Ishikawajima-Harima Heavy Industries Co Ltd (No 2). There the disbenefit avoided arose through the fact that at the time of delivery of a ship, the market was very bad and the plaintiffs were the core customers of the defendants. If they took delivery of a ship (induced by a concession) then other customers were likely to follow suit. As well the plaintiffs would cease their efforts to postpone delivery of the boat."
42. The statement of law by Santow J is on the face of it more demanding than that of Phillips J, which could be unkindly paraphrased to the effect that the compromising party must have thought there was something in it for him, to have accepted the lesser payment. I am not certain whether, the requirements of Santow J’s alternative propositions (iv)(a) and (iv)(b) would be, in practice, all that much more demanding.
43. As the learned authors of the eighth Australian edition of Cheshire & Fifoot’s Law of Contract write (p200):
“The attempt to elaborate on the principles of Glidewell LJ in relation to questioning of practical benefit runs into difficulties because the court appears to be assessing the commercial costs and benefits of the contract modification, something that the common law has traditionally eschewed. If we accept that practical benefit is to be regarded as consideration, it would be preferable to make the necessary modifications to the existing duty rule in terms of saying that, prima facie, if two commercial people have chosen to modify their business relationship, then it is presumed that they know what they are doing and it is not the court’s business to second guess their judgment of their own interests. Only if proof of duress is shown would this presumption be overturned and the contract modification be set aside.”
44. As to whether Musumeci v Winadell Pty Ltd represents the law of New South Wales, I find it difficult to say. It is curious that a judgment so radical and so well researched and, if I may say so with respect, ably constructed, should be so little cited, except in the textbooks, but the only case listed in the Australian Case Citator as citing Santow J’s judgment is Re AK Freund Pty Ltd and Kameel Pty Ltd (2004) 55 ATR 705 – and althought Musumeci v Winadell Pty Ltd may have been cited therein, the citation does not in fact appear in the ATR report of the case (the reasons of the Tribunal being reported only in part).
45. I think I must conclude that the law of the Northern Territory is still as it was established in the great case of Foakes v Beer (1884) 9 App Cas 605. Such, it seems, is the view, somewhat regretfully, of Cheshire and Fifoot (op.cit.) At p203:
“The present rule does protect creditors from extortionate demands by debtors . But, as argued earlier in relation to existing duties, it would be desirable if this problem was taken care of by the rules of duress rather than the doctrine of consideration, which takes no account of whether the settlement is amicable or extortionate. Santow J in Musumeci v Winadell Pty Ltd has certainly thrown out a challenge in the rule in Pinnel’s case by holding that a landlord was bound by a promise to accept reduced rent payments on the basis of consideration rather than promissory estoppel: see [4.35]. In terms of fulfilling the expectations of commercial people, a rule that forgiving part of a debt is binding rather than not binding is preferable. It is (along with the existing duty rule) an area of the law of contract that provides an out for people who want to break their word on a purely technical ground. Indeed, one suspects that most business people would not know that they have an out until they consult a lawyer.”
46. (In this case, the earlier defences pleaded by Ms Davidson personally bear out the expectation of the authors. It appears that she did not suspect that she might have an out – and in her case, even after consulting lawyers.)
47. If I am right about the law then I must reject the O’Louglin’s third line of argument and conclude that there was no consideration moving from the promise in return for the new promises made by Ms Davidson (or Mr Barton on her behalf) at the Cool Spot meeting.
48. Mr O’Loughlin has a fourth line of argument.
“Defendant is Estopped
4.1 The defendant made a clear commitment to undertake the four tasks (or on the defendant’s case: a clear statement that it would provide 2 men for 2 or 3 days to complete the tasks).
4.2 The plaintiff relied on this statement.
4.3 The defendant indicated, as did Kym Barton, that the contract could have been rescinded and the deposit returned to the plaintiff if this offer by the defendant had not been made.
4.4 It would appear then that the plaintiff remained in the contract because of the offer by the defendant and it would be unconscionable to now allow the defendant to walk away from that agreement.
4.5 Denning J. in Central London Property Trust Ltd v High Trees House Ltd after noting that there was no consideration and referring to past cases and the development of estoppel, stated at 135:
“The logical consequence, no doubt is that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration; and if the fusion of law and equity leads to this result, so much the better”.
4.6 The plaintiff clearly acted on the statement, in either affirming the contract or entering into a new contract. The plaintiff would presumably not have taken on modifying the house if the defendant had not made the statement.”
49. The plaintiff seeks by this argument to enforce the performance of the promise made by the defendant at the Cool Spot meeting, so Mr O’Loughlin might have cited Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 rather than, or in addition to the High Trees House case, estoppel here being brought forward as a sword, not a shield.
50. In Walton Stores (Interstate) Ltd v Maher, Mason CJ and Wilson J wrote (at p404):
“One may therefore discern in the cases a common thread which links them together, namely, the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has “played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it”: per Dixon J. in Grundt; see also Thompson. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption.”
51. And at p406, their Honours wrote:
“The foregoing review of the doctrine of promissory estoppel indicates that the doctrine extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment, does not bring promissory estoppel into play. Something more would be required. Humphreys Estate suggests that this may be found, if at all, in the creation or encouragement by the party estopped in the other party of an assumption that a contract will come into existence or a promise will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party.”
52. Similarly, Brennan J at p423-424:
“Parties who are negotiating a contract may proceed in the expectation that the terms will be agreed and a contract made but, so long as both parties recognize that either party is at liberty to withdraw from the negotiations at any time before the contract is made, it cannot be unconscionable for one party to do so. Of course, the freedom to withdraw may be fettered or extinguished by agreement but, in the absence of agreement, either party ordinarily retains his freedom to withdraw. It is only if a party induces the other party to believe that he, the former party, is already bound and his freedom to withdraw has gone that it could be unconscionable for him subsequently to assert that he is legally free to withdraw.
It is essential to the existence of an equity created by estoppel that the party who induces the adoption of the assumption or expectation knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation: see per Lord Denning M.R. in Crabb v. Arun District Council (28). When the adoption of an assumption or expectation is induced by the making of a promise, the knowledge or intention that the assumption or expectation will be acted upon may be easily inferred. But if a party encourages another to adhere to an assumption or expectation already formed or acquiesces in the making of an assumption or the entertainment of an expectation when he ought to object to the assumption or expectation – steps which are tantamount to inducing the other to adopt the assumption or expectation – the inference of knowledge or intention that the assumption or expectation will be acted on may be more difficult to draw.
The unconscionable conduct which it is the object of equity to prevent is the failure of a party, who has induced the adoption of the assumption or expectation and who knew or intended that it would be relied on, to fulfil the assumption or expectation or otherwise to avoid the detriment which that failure would occasion. The object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting therein.
If this object is kept steadily in mind, the concern that a general application of the principle of equitable estoppel would make non-contractual promises enforceable as contractual promises can be allayed. A non-contractual promise can give rise to an equitable estoppel only when the promiser induces the promisee to assume or expect that the promise is intended to affect their legal relations and he knows or intends that the promisee will act or abstain from acting in reliance on the promise, and when the promisee does so act or abstain from acting and the promisee would suffer detriment by his action or inaction if the promisor were not to fulfil his promise. When these elements are present, equitable estoppel almost wears the appearance of contract, for the action or inaction of the promisee looks like consideration for the promise on which, as the promisor knew or intended, the promisee would act or abstain from acting.”
53. As to the meaning of the “detriment” there spoken of, in Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR298, Handley JA wrote (at p307-308):
‘In my opinion the decisions of the High Court in Foran v Wight (1989) 168 CLR 385 and The Commonwealth v Verwayen (1990 64 ALJR 540; 95 ALR 321, establish that estoppel now embraces not only representations of existing fact but all promissory representations as well. The excuses and promises made by Mr Barnao to Mr Bartlett during the weeks after 5 March 1987 conveyed representations of fact to Mr Bartlett that the respondent company had a present intention of performing the contract by paying the agreed debt. Mr Barnao also made promissory representations that the respondent company would perform the contract in the future. As a result of these representations the respondent “bought” time, in the form of a forbearance by the appellant from suing to enforce the contract. The appellant was also put to trouble and some expense in having staff attend at the respondent company’s premises in fruitless attempts to collect the cheque. This forbearance and inconvenience constituted detriments suffered by the appellant. “Some degree of forbearance” not necessarily for any definite or particular time can constitute sufficient consideration to support a contract: See Glegg v Bromley [1912] 3 KB 474 at 480-481. In these circumstances I have considered carefully whether these detriments were sufficient to support an estoppel binding the respondent to the contract of 5 March.
Given the necessary reliance and the later attempt by the representor to abandon the assumption adopted by the representee the question whether the representee’s change of position entitles him to hold the representor to the original assumption depends on whether the representee, in the words of Dixon J in Thompson v Palmer (1933) 49 CLR 507 at 547:… “will have placed himself in a position of material disadvantage if departure from the assumption be permitted.” (My emphasis.)
108. As to how long the work took, I am less impressed with Mr Barton’s evidence. As on other topics, my reasons for caution about it derive not from my apprehending that Mr Barton is consciously exaggerating, but rather that he was recklessly expanding on hazy memories. It emerged in the evidence that it was many months before an invoice was prepared for these works (just how many months is not altogether clear) and I am not persuaded that Mr Barton had any greater resources in terms of contemporaneous records, timesheets etc at the time the invoice was made out, than he had at the time he gave his evidence, when he had none. Apart from the usual haze created by the effluxion of time, his recollection may have been imperfect because his falling ill and missing a day or two’s work on the site.
109. It seems to me that better evidence, both of what might be reasonable rates of pay per hour, and of the time the work should have taken, is to be found in the evidence of Clive Towell, quantity surveyor, called in the plaintiff’s case. Mr Towell was a witness apparently very certain of his evidence. He prices the boring of the holes at $90 each, assuming the ground to be sand. As I have said above, whatever else may be uncertain about the agreement between Mr Barton and Mr Colless, a price of at least $300 each was agreed. I would for that reason allow 7 x $300 for the holes drilled, but I would adopt Mr Towell’s figures for supplying and placing concrete, for erecting the steel columns and floor beam attachments, $480 and $560 respectively, a total of $3,140 (see Ex22, report by Mr Towell supplementary to his main report Ex21.)
110. The plaintiff agrees that he owes the defendant a further $381. The original contract, the “offer to purchase”, specified that the house was to be restumped on steel stilts of 100mm square section. Mr Colless later asked that that be varied to stronger sections, 125mm square, and that was agreed. Ex5 is an invoice from OneSteel, setting out the price Mr Colless paid for various bits of steel. Mr Colless’s evidence is that he could, from that invoice, work out the difference in price and had calculated the figure of $381. It appears that the defendant accepts that calculation, which is just as well, because I’m not sure I understand it.
111. Mr Barton made the point in his evidence that the change from 100mm sections to 125mm meant that every weld, on all four sides of each pier, was 25% longer than it would originally have been, and would take 25% longer to do. This is in relation not only to the 7 verandah piers, but to all these of the house, a total of about 30. Of course the job as a whole would not be 25% longer – it would take the same amount of time to set up a 125mm pier as a 100m one, and the same time to shift from pier to pier. But in terms of time actually welding, and the consumption of welding rods, it would add up.
112. There is, as usual, no evidence of any discussion as to who would carry the cost of this extra. Perhaps Mr Barton may have been willing to toss it in as all part of the service, but more probably not. As usual, his evidence is wretchedly lacking in specifics as to how much time and material the extra 25% would have taken, but even at an extra 5 minutes per pier, one would be looking at about 2.5 hours work. At a rate to include the cost of materials, say $80 per hour – another $200.
113. There is one other item which appears to me to be made out, just, on the counterclaim. This is in relation to the cleats which Mr Barton says he welded onto the beams of the new verandah. Mr Colless was reluctant to accept that Mr Barton had done this task. He believed that one Marcello had done it as part of later works. He might be right, but Mr Barton’s evidence seemed more persuasive. I would allow the claim to the extent Mr Towell valued that job, $640.
114. In my judgment therefore, the counterclaim succeeds to the extent of $3140+$381+$200+$640, total $4,361. I think GST should be added to that: + 10% is $4797.10. Deducting from that the judgment on the claim, $1320, order that the plaintiff pay the defendant $3,477.10. I think there should be no order for costs, but I will hear the parties should they wish to apply.
115. It seems likely that the work on the verandah involved mobilisation costs, but, if it did, there is nothing in the evidence that permits me to put a figure on them.
Dated this 26th day of October 2005
_________________________
R.J. Wallace
STIPENDIARY MAGISTRATE
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