Cornelisse v Strongbridge Homes Pty Ltd - [2015] QCAT 415

CITATION:

Cornelisse v Strongbridge Homes Pty Ltd [2015] QCAT 415

PARTIES:	Tim Cornelisse (Applicant)
v
Strongbridge Homes Pty Ltd (Respondent)

APPLICATION NUMBER:

BDL148-14

MATTER TYPE:

Building matters

HEARING DATE:

17 February 2015

HEARD AT:

Brisbane

DECISION OF:

Member Ann Fitzpatrick

DELIVERED ON:

29 October 2015

DELIVERED AT:

Brisbane

ORDERS MADE:

1. The application of the applicant Tim Cornelisse is dismissed.

CATCHWORDS:

Domestic building contract – contractual terms entered into by mistake – no claim to set aside contract-payment of final progress claim – restitution- comparison of fulfilment of contractual obligation and payment made by mistake.

Newitt v Leitch (1997) 6 Tas SC 26

APPEARANCES:

APPLICANT:

Tim Cornelisse

RESPONDENT:

No appearance

REPRESENTATIVES:

APPLICANT:

Self-represented

RESPONDENT:

No appearance

REASONS FOR DECISION

At the hearing of this matter, the applicant Mr Cornelisse appeared and represented himself. No person appeared on behalf of the respondent. I am satisfied, by reference to the Tribunal’s file, that the respondent was informed of the hearing date. The matter was stood down for 45 minutes. A telephone call was made to the office of the respondent. The accounts manager confirmed the company was aware of the hearing and that its Director, Mr Burnitt was aware of the date of the hearing. A message as to the delayed starting time was left on the mobile phone of the Director of the respondent, Mr Burnitt. Despite these efforts no representative of the respondent appeared. Accordingly, in accordance with section 93 of the Queensland Civil and Administrative Tribunal Act 2009 I proceeded to hear and determine the matter in the absence of the respondent.
Mr Cornelisse gave evidence. His application together with attachments; statement of evidence dated 17 October 2014 and the response of the respondent were made exhibits in the proceeding. I accept Mr Cornelisse’s evidence and except as set out in this decision, find that the facts described by him occurred.
Mr Cornelisse entered into a Housing Industry Association form of contract for the construction of a duplex at Lot 26 Charlotte Court, Essington Rise Estate, Leichhardt, Queensland. The contract is dated 15 January, 2013 and is with Trilink Constructions Pty Ltd. The contract price is expressed to be $301,000.00. A progress payment table is set out in the contract requiring payments at given stages of the construction.
The land acquired by Mr Cornelisse is part of an estate developed to take advantage of a National Rental Affordability Scheme (NRAS), which gave certain tax advantages to investors who constructed homes for rental purposes.
Other businesses appear to have been involved in the development, including a marketer of the house and land package in question, Property Queensland and a project manager, AVA Developments. There is no evidence of the contractual relationship between these businesses and Trilink Constructions or the respondent, Strongbridge Homes.
By way of a written variation, dated 2 May, 2013 the contract price was agreed by Trilink Constructions, to be reduced to $275,000.00. Payments were made in accordance with the original progress payment table following presentation of the slab invoice, dated 14 August, 2013; the frame invoice, dated 21 August, 2013 and enclosed stage invoice, dated 12 September, 2013. Each of those invoices noted the variation reducing the contract sum by $26,000.00 and showed a contract balance reflective of the reduced sum.
On 1 October, 2013 the Queensland Building Services Authority advised that Trilink Constructions’ licence was suspended.
Mr Cornelisse has attached to his application a copy of a Deed of Assignment and Novation of Building Contract, dated 8 November, 2013 between Tellus Constructions Pty Ltd formerly Trilink Constructions, Peter Burnitt trading as Strongbridge Homes Pty Ltd and Tim Cornelisse. Mr Burnitt is described as the new builder and the holder of QBSA licence number 67005.
The Deed refers to the contract dated 15 January, 2013 between Trilink Constructions and Mr Cornelisse. It makes no reference to any variation. The Deed contains at clause 3 an agreement that “the contents of the “Payment Schedule” attached to this Deed are correct”. The original payment schedule is attached to the Deed showing the contract sum to be $301,000.00.
The respondent has filed a different version of the Deed as part of its response. Its Deed has had reference to Strongbridge Homes struck out and initialled by one party. I do not know who has initialled the changes. In the absence of evidence from the respondent I have relied upon the version supplied by Mr Cornelisse.
At the time of entering the Deed the final two stages of construction remained to be completed.
Strongbridge Homes invoiced Mr Cornelisse the sum of $60,200.00 on completion of the fixing stage. No reference was made to the reduced contract sum. Mr Cornelisse raised the fact that the variation to the contract price was not recognized by Strongbridge Homes on its invoice. He raised the issue with Ian Hipwood, Project Manager; Sean Cawley, Bank of Queensland and Graeme Shiels, Property Queensland. On Mr Cornelisse’s evidence an agreement was reached on 21 January, 2014 to pay the sum of $60,200.00 in accordance with the original progress payment schedule, however, the final payment would be reduced to $4,100.00. This arrangement is confirmed in an email dated 21 January, 2014 from Paul Powell of Ava Developments to Sean Cawley, Bank of Queensland. The Bank of Queensland provided the finance for construction of the duplex.
A Strongbridge Homes tax invoice, dated 4 April, 2015 was provided to Mr Cornelisse in the sum of $30,100.00 inclusive of GST for the practical completion stage. Again, the invoice did not recognize the reduced contract sum agreed with Trinlink Constructions.
On Mr Cornelisse’s evidence Mr Burnitt agreed with him on 24 May, 2014 to handover the property upon payment of $4,100.00. Despite payment of this amount there was no handover of the duplex.
Mr Cornelisse’s evidence is that he had no further contact or response from Strongbridge and he was unable to secure the release of the property and relevant documentation. He says that he was incurring increasing costs, financial losses and the threat of losing the NRAS government entitlement due to delays.
Mr Cornelisse says that he sought legal and financial advice, which recommended payment of the disputed amount and subsequent legal action upon release of the property to recover the amount allegedly overpaid.
At the hearing Mr Cornelisse said that he recognized his options to be:
(a)   go to Court, which he considered too long and expensive a process;
(b)   forcibly take possession; or
(c)   source the money, pay out the contract and secure the property quickly.
Mr Cornelisse obtained a personal loan in order to pay the disputed sum. He appointed agents K-Spec Building Consultants to attend to payment of the sum of $26,000.00 and to take possession of the duplex. That was done on 11 June, 2014. Mr Cornelisse gave evidence that the money was not paid with any reservation of rights and with no explanation for the payment.

Claim

Mr Cornelisse seeks payment to him, by the respondent, of the sum of $26,000.00 by way of restitution. He asserts that he was placed in a position where he was required to pay the disputed amount in excess of contractual requirements. He asserts that the property had already been fully paid for but was not released in a timely manner, adding to an already much delayed build and further financial burden on him.
Although Mr Burnitt filed a statement of evidence in the proceeding, he was not at the hearing to swear to the truth and correctness of the matters set out in the statement. Accordingly, I have not treated the statement as in evidence. However, I have had reference to the response filed by the respondent to determine that the basis of its defence is that the previous builder did not provide it with details of any variation at the time the Deed of Assignment was entered into. I make no finding in that respect. It is asserted that Strongbridge Homes completed the fixing and practical completion stages of the contract and claimed payments in accordance with the progress payment table forming part of the Deed of Assignment. This assertion is apparent on the facts before the Tribunal.
A difficulty for Mr Cornelisse is that he signed the Deed of Assignment and Novation in a form which did not refer to the varied contract sum and the reduced outstanding balance. I accept that Mr Cornelisse did vary the amount of the contract sum by agreement with Trilink Constructions, however, he did not ensure that was reflected in the new contract he entered into with Strongbridge Homes pursuant to the Deed of Assignment and Novation. In fact, Mr Cornelisse gave an express agreement that the terms of the attached progress payment schedule were correct.
A further difficulty for Mr Cornelisse is that upon realizing the error once the fixing stage invoice was rendered, he relied upon representations made by Paul Powell of Ava Developments that the contract sum would be adjusted upon the final payment. There is insufficient evidence before me as to the relationship between Ava Developments and Strongbridge Homes to determine whether Strongbridge Homes is bound by Mr Powell’s representation. I cannot judge on the state of the evidence if Mr Powell was an agent for Strongbridge and entitled to bind it to arrangements reached by Mr Powell. At the hearing, Mr Cornelisse said that Ava Developments was subcontracted to Strongbridge Homes. There was no supporting evidence to this effect. I am unable to find that Strongbridge Homes was bound to reduce the contract sum on the basis of Mr Powell’s representation.
I find on the terms of the contract entered into between Strongbridge Homes and Mr Conrelisse that there was no overpayment of the contract sum referred to in the Deed of Assignment and Novation.
However, Mr Cornelisse is seeking restitution. To succeed, Mr Cornelisse must establish that Strongbridge Homes has been unjustly enriched through payment of the sum of $26,000.00. Mr Cornelisse must establish a recognized unjust factor and he must show that but for the unjust factor, the benefit would not have been conferred on Strongbridge. Mr Cornelisse has not specifically pleaded any unjust factor. However, the effect of his evidence is that he mistakenly entered into a contract whereby he agreed to pay $60,200.00 upon completion of the fixing stage of the contract and $30,100.00 upon practical completion, rather than a total of $64,300.00 for the two stages.
That mistake may have given rise to an entitlement to set the contract aside or to seek rectification of the contract. Once the mistake was realized, Mr Cornelisse did not pursue these remedies. He negotiated what he thought was an acceptance of his position by Strongbridge. When Strongbridge did not reduce its claim, Mr Cornelisse did not assert an estoppel or pursue any other form of remedy.
Mr Cornelisse took legal advice and determined that the least costly and most expeditious way of achieving hand over of the duplex was to pay the further sum of $26,000.00, despite the mistakenly entered contract.
The sum of $26,000.00 was not money paid by mistake, but rather money paid because the contract requiring payment was entered into on mistaken terms.
A useful analysis of circumstances such as these can be found in Mason and Carter’s “Restitution Law in Australia” at [404]:
“Payments made in fulfilment of a contractual obligation stand in a different position from a mere payment made by mistake. There is a fundamental distinction between contractual and non-contractual mistakes. A payment made pursuant to a valid and enforceable contract cannot be recovered. The contract has allocated the relevant risk. In the case of contractual mistakes, the contract must first be set aside, on the ground of mistake or otherwise, before a restitutionary remedy to recover the payment is available (subject to proof of mistake, duress or some other restitutionary basis). These principles were pellucidly stated and then applied by Wright J in Newitt v Leitch.”[1]
[1]Mason K, Carter JW, Tolhurst GJ, Mason and Carter’s Restitution Law in Australia”, 2^nd ed., LexisNexis Butterworths, Sydney, 2008, p.138. Newitt v Leitch(1997) 6 Tas R 396 at 408-9. Footnotes otherwise omitted.
On the basis of this reasoning I am unable to find that Mr Cornelisse is entitled to restitution of the sum of $26,000.00. Mr Cornelisse was bound by the Deed of Assignment and Novation because he did not seek to have it rectified or set aside. He did not pursue any remedy related to the alleged representation that the last progress claim would be reduced. Lastly, the final payment was not made by mistake so as to give rise to a claim for restitution.
Mr Cornelisse’s claim is dismissed.