Fox v Shooter
[2011] QCAT 359
•2 August 2011
| CITATION: | Fox v Shooter & Anor [2011] QCAT 359 |
| PARTIES: | Wayne Jeffrey Fox |
| v | |
| Gary Shooter and Rodney Snow |
| APPLICATION NUMBER: | BDL097-10 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 22 July 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Sandra G Deane, Member |
| DELIVERED ON: | 2 August 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] Mr Fox is to pay to Mr Shooter and Mr Snow the sum of $17,211.25 by no later than 9 August 2011. [2] By no later than 9 August 2011, Mr Fox is to deliver up to Mr Shooter and Mr Snow the outstanding certificates required by the Amended Building Approval dated 20 May 2011 being: a. Wet Area Sealing Certificates for retaining block wall and laundry area b. Glazing certificates for Doors and Windows c. Termite Part A d. Termite Part B e. Roof Covering Fixing f. Storm Water g. Slab. [3] The Queensland Building Services Authority (QBSA) is to appoint an inspector to inspect the Defective Work (as defined in 55a) and b) of the Reasons for Decision) prior to Mr Fox undertaking rectification work required. [4] Mr Shooter and Mr Snow are to provide to the QBSA a copy of this order, the Reasons for Decision and the list of the defects contained in the letter of 30 May 2011 to facilitate the inspection. [5] Mr Fox is to rectify the Defective Work to the satisfaction of the QBSA within 14 days of the QBSA’s initial inspection. [6] Mr Fox and Mr Shooter and Mr Snow are to advise the Tribunal and the QBSA when the rectification work is complete and then the QBSA inspector is to: a. inspect the rectification work; and b. provide a report to the Tribunal and to the parties as to whether the Defective Work has been rectified to its satisfaction. |
| CATCHWORDS : | Domestic Building dispute – claim for final payment by builder – delay in practical completion – claim for liquidated damages by owners – rectification of defective work |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Wayne FOX (in person) |
| RESPONDENT: | Mr Gary SHOOTER (in person) and Mr Rod SNOW (in person) |
REASONS FOR DECISION
Background
Mr Fox entered into a BSA Major Works Contract as Contractor with Mr Shooter and Mr Snow as Owners dated 19 March 2009 for the performance of building work at Mr Shooter’s and Mr Snow’s house at East Ipswich (the Contract). Mr Fox seeks payment of amounts under the Contract.
Mr Fox engaged Everlyn Building Certifications Pty Ltd (EBC) to act as building certifier in respect of the works under the Contract.
Mr Fox delivered to Mr Shooter and Mr Snow invoice No 000541 dated 15 July 2009 in respect of the Final payment or Practical Completion claim under the Contract.[1] The amount claimed was $16,478.59.
[1] Exhibit 3
Mr Shooter and Mr Snow have not paid this claim.
EBC carried out a final inspection on 27 July 2009. The inspection report[2] identified certain rectification works were required and a re-inspection.
[2] Part of Exhibit 2 – “WE2”
In or about August 2009 EBC, Mr Fox and the Owners became aware that there was a Council approval issue that had not previously been addressed as the property was in a Character Code Area.
Mr William Everlyn of EBC acknowledged in a statement dated 15 March 2010[3] that he had not picked up this issue in his initial searches. Addressing this issue caused a delay in the issuing of the Final Inspection Certificate by the Ipswich City Council.
[3] Part of Exhibit 2
A dispute arose between EBC and Mr Fox.
EBC engaged Handovers.com Pty Ltd to perform a further inspection and prepare a report. The report dated 9 March 2010[4] identified 25 defects.
[4] Part of Exhibit 2 – “RSGS1”
Mr Everlyn died on 28 July 2010.
[10] Ipswich City Council carried out a final inspection on 21 December 2010 and listed 2 defects required to be rectified prior to issue of the Form 21 – Final Certificate in its letter to Mr Fox dated 16 February 2011.[5]
[5] Part of Exhibit 2 - numbered page 3
[11] Upon rectification of the 2 items the Ipswich City Council issued a Form 21 – Final Inspection Certificate on 25 May 2011[6].
[6] Exhibit 1
[12] On 26 May 2011 Mr Fox delivered to Mr Shooter and Mr Snow some certificates which he obtained from the Ipswich City Council.
[13] Mr Shooter and Mr Snow provided a list of defects to Mr Fox by letter dated 16 May 2011 and imbedded a copy of that letter in a further letter dated 30 May 2011.[7]
[7] Exhibit 6
[14] The letter of 30 May 2011 set out a number of certificates which the Owners acknowledged receiving from Mr Fox and identified a number of other certificates yet to be received.
Evidence and Discussion
GENERAL CONDITIONS
[15] An issue in this proceeding is what General Conditions of Contract formed part of the Contract.
[16] In response to the Tribunal’s direction to produce the General Conditions forming part of the building contract dated 19 March 2009, Mr Fox produced to the Tribunal General Conditions of BSA’s Major Works Contract dated November 2008.
[17] Mr Shooter and Mr Snow contend that the General Conditions were dated July 2007.
[18] Mr Fox gave evidence that he does not keep a complete copy of all the building contracts he enters into because he does not have the space to do so.
[19] Mr Fox was uncertain as to whether General Conditions dated July 2007 or November 2008 formed part of the Contract.
[20] Mr Snow gave evidence that on 19 March 2009 Mr Fox provided to he and Mr Shooter a number of documents including the Schedule[8] and General Conditions of BSA’s Major Works Contract issued July 2007.[9]
[8] Copy being part of Exhibit 2, numbered pages 14 – 17 (inclusive)
[9] Exhibit 5
[21] I accept Mr Snow’s evidence that the General Conditions were dated July 2007 because he gave clear evidence of the occasion upon which he received and signed the Contract and because it is consistent with the reference to the General Conditions in the Schedule.
[22] I therefore find that the relevant General Conditions were dated July 2007.
LIQUIDATED DAMAGES CLAIM
[23] Issues in this proceeding are:
a)the Date for Practical Completion under the Contract;
b)when Practical Completion was achieved; and
c)whether any entitlement to Liquidated Damages arose in favour of the Owners.
[24] General Condition 12 and Item 3 of the Schedule provided that Mr Fox was to commence building on 14 April 2009.
[25] General Condition 13 and Item 4 of the Schedule provided that the Date for Practical Completion was 96 calendar days from 14 April 2009.
[26] Item 5 of the Schedule states that there was an inclement weather allowance of 5 working days. This allowance is included in the time for completion set out in Item 4. General Condition 13 provides that an extension of time may be sought if the number of days actually delayed by inclement weather is more than that provided for in Item 5 and the delay allowed for was reasonable.
[27] I therefore find, based on my calculation of 96 calendar days from 14 April 2009, that the Date for Practical Completion provided for in the Contract was 19 July 2009.
[28] General Condition 14 provides that:
a)The Contractor must give the Owner 3 business days prior written notice of the date upon which the Contractor anticipates the works will reach Practical Completion;
b)On the date specified the Owner must inspect the works;
c)If:
i) the Owner is satisfied that the works have reached Practical Completion; and
ii) the Contractor produces to the Owner satisfactory evidence that all relevant inspections and approvals required have been satisfactorily completed,
the Contractor must complete the BSA Form 3 Defects Document and give a copy to the Owner;
d)The Contractor is to also give the Owner a Certificate of Practical Completion stating that date as the Date of Practical Completion.
[29] Mr Fox gave evidence that:
a)he did not seek any extensions of time in relation to the Date for Practical Completion and therefore the Date for Practical Completion remained as stated in the Contract.
b)the building work as provided for in the Contract was completed by him before that time.
c)No BSA form 3 Defects Document was given to the Owners.
d)No Certificate of Practical Completion was given the Owners.
e)The delay in obtaining the Final Certificate was not his fault but rather was EBC’s fault.
f)In his view Practical Completion was achieved in July 2009 and no liquidated damages were payable to the Owners.
[30] In Mr Fox’s application in this matter received by the Tribunal on 7 April 2010 in part C item 1 Mr Fox states “This application relates to case no: BDL001-10 and is being lodged following decision issued by Member T Bradley on 19 March 2010 – please refer to these proceedings in this matter”.
[31] As requested by Mr Fox I reviewed the BDL001-10 file. In that file Mr Fox and his then legal representatives made what appeared to be inconsistent statements as to the Owners’ entitlement to liquidated damages to the evidence given at this hearing by Mr Fox.
[32] By letter dated 2 November 2009 from Walker Pender Group to EBC Mr Fox’s then legal representatives stated “Pursuant to the contract the Owner is, quite rightly, withholding final payment and is deducting $50 per day by way of liquidated damages.”
[33] By letter dated 11 February 2010 from Mr Fox to the Tribunal Mr Fox stated “the owners are holding approximately $20,000 in final payment for the work completed at the property and according to the contract are deducting $50 per calendar day until resolution of this matter. As of today’s date the penalties amount to approx. $10,400.”
[34] Mr Fox initially denied that any such letters were sent. Mr Fox was afforded the opportunity to read these letters in full and stated that they were sent in the context of the dispute with EBC and not relevant to this matter.
[35] The taking of such inconsistent positions does reflect on the credibility of Mr Fox’s evidence in relation to his view of the achieving of Practical Completion and the Owners’ entitlement to Liquidated Damages.
[36] There is no evidence to suggest that the Owners delayed the obtaining of the Final Certificate or the attaining of Practical Completion under the Contract.
[37] To the contrary there is evidence that Mr Shooter and Mr Snow took steps to expedite Council’s approval by engaging with officers of Council and the Mayor.[10]
[10] Part of Exhibit 2, numbered pages 1, 4 – 6 (inclusive)
[38] I find that the Date for Practical Completion was 19 July 2009 as there were no extensions of time sought or granted.
[39] Despite the fact that the steps provided in General Condition 14 were not carried out as contemplated by the Contract I find that the Date of Practical Completion was 26 May 2011, being the date that the Final Certificate and evidence of inspections and approvals were provided by Mr Fox to the Owners.
[40] General Condition 18 and Item 12 provided that if the Contractor fails to achieve Practical Completion by the Date for Practical Completion then the Contractor must pay to the Owner Liquidated Damages in the sum of $50 per day for each calendar day of delay in achieving Practical Completion.
[41] I therefore find that Mr Shooter and Mr Snow are entitled to claim from Mr Fox Liquidated Damages at the rate of $50/calender day for the delay from 19 July 2009 until 26 May 2011, on my calculation a period of 676 days, being a total of $33,800.
PAYMENT CLAIM AND INTEREST
[42] General Condition 16 provides that the Progress Claim for the Practical Completion Stage must:
a)be in writing;
b)certify that the work under the Contract has been completed to the relevant stage;
c)be accompanied by a completed and signed BSA Form 3 Defects Document.
[43] General Condition 16 also provides that upon receipt of such a claim the Owner must pay so much of the claim as is not in dispute within 5 business days.
[44] Mr Snow gave evidence that Mr Fox hand delivered to Mr Shooter and Mr Snow Invoice No 30321 dated 26 May 2011.[11] The amount claimed was $16,478.59. Mr Fox did not seek to challenge this evidence. I therefore accept it.
[11] Exhibit 4
[45] Mr Fox gave evidence that his terms for payment are 7 days from invoice. Those terms are included on the invoice dated 26 May 2011 but not on the invoice dated 15 July 2009.
[46] Mr Fox gave evidence that the relevant payment claim was the one dated 15 July 2009 and that the later invoice had been issued by his bookkeeper and not by himself and should be disregarded. This does not appear to be consistent with Mr Fox hand delivering it to Mr Shooter and Mr Snow. Both invoices appear to have been signed by Mr Fox.
[47] Mr Fox did not comply with General Condition 16 in making either final payment claim.
[48] In view of my finding that Practical Completion was not achieved until 26 May 2011 I find that any final payment claim was not properly able to be made until 26 May 2011.
[49] In these circumstances the invoice dated 15 July 2009 was premature and therefore invalid until that time and either became valid as a claim for payment on 26 May 2011 or continued to be of no effect and was replaced by the invoice dated 26 May 2011. The latter is, in my view, the preferable construction of what occurred.
[50] The Owners concede that $16,478.59 is payable in respect of the final claim but have withheld payment because the defects listed in their letter dated 30 May 2011[12] have not been acknowledged or addressed by Mr Fox to their satisfaction.
[12] Exhibit 6
[51] The payment claim was due for payment on 2 June 2011 (being both 5 business days and 7 days from 26 May 2011).
[52] General Condition 19 and Item 13 provide that the Owner must pay interest on overdue payments at the rate of 4% per annum calculated on a simple interest basis.
[53] I therefore find that Mr Fox is entitled to payment of the sum of $16,478.59 and interest on the sum of $16,478.59 at the rate of 4% per annum.
DEFECTS AND MISSING CERTIFICATES
[54] Mr Snow gave evidence that he had reviewed the Amended Building Approval dated 20 May 2011[13] and identified a number of certificates stated in that document as ‘required’ which had not been provided by Mr Fox. Those certificates are listed on the 1st page of the letter dated 30 May 2011[14].
[13] Copy of first page being Exhibit 7
[14] Exhibit 6
[55] Mr Fox gave evidence that:
a)upon reviewing photographs produced by the Owners that the workmanship of the alternative solution to the laundry was defective in that the corner could be better performed and the tiles did not line up across the laundry doorway;
b)prior to the hearing he had not considered whether the items listed as defects in the letter of 30 May 2011 on the 4th and 5th pages were in fact defects.
c)upon reading and considering the list he accepted that the items were minor defects and that he would attend to rectification of them.
d)he had obtained from the Ipswich City Council a bundle of certificates and provided them to the Owners on 26 May, 2011.
e)he did not check the bundle and could not be certain that all required certificates were in the bundle.
f)he would check with his termite contractor and his file, which he did not bring to the hearing, and provide the missing certificates.
[56] I therefore find that the items identified by the Owners and acknowledged by Mr Fox set out at [55 a) and b)] are defects requiring rectification (the Defective Work).
[57] Based upon Mr Snow’s and Mr Fox’s evidence I find that all of the required certificates have not been delivered to Mr Shooter and Mr Snow.
SUMMARY OF AMOUNTS PAYABLE
[58] Mr Fox is to pay to Mr Shooter and Mr Snow Liquidated Damages in the sum of $33,800.
[59] Mr Fox is entitled to set off against this sum the amounts payable to him by Mr Shooter and Mr Snow, being:
a)$16,478.59; and
b)$110.16 (being 4% interest for 61 days, being the period from 2 June 2011 until 2 August 2011, the date of this decision).
[60] Mr Fox is therefore to pay to Mr Shooter and Mr Snow the sum of $17,211.25.
Orders
[61] Mr Fox is to pay to Mr Shooter and Mr Snow the sum of $17,211.25 by no later than 9 August 2011.
[62] By no later than 9 August 2011 Mr Fox is to deliver up to Mr Shooter and Mr Snow the outstanding certificates required by the Amended Building Approval dated 20 May 2011 being:
a)Wet Area Sealing Certificates for retaining block wall and laundry area
b)Glazing certificates for Doors and Windows
c)Termite Part A
d)Termite Part B
e)Roof Covering Fixing
f)Storm Water
g)Slab.
[63] The Queensland Building Services Authority (QBSA) is to appoint an inspector to inspect the Defective Work (as defined in [56a) and b)] of the Reasons for Decision) prior to Mr Fox undertaking rectification work required.
[64] Mr Shooter and Mr Snow are to provide to the QBSA a copy of this order, the Reasons for Decision and the list of the defects contained in the letter of 30 May 2011 to facilitate the inspection.
[65] Mr Fox is to rectify the Defective Work to the satisfaction of the QBSA within 14 days of the QBSA’s initial inspection.
[66] Mr Fox and Mr Shooter and Mr Snow are to advise the Tribunal and the QBSA when the rectification work is complete and then the QBSA inspector is to:
a)inspect the rectification work; and
b)provide a report to the Tribunal and to the parties as to whether the Defective Work has been rectified to its satisfaction.
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