Glover and Glover v LG Building Solutions Pty Ltd and Newman
[2017] ACTMC 15
•11 August 2017
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Glover & Glover v LG Building Solutions Pty Ltd & Newman |
Citation: | [2017] ACTMC 15 |
Hearing Dates: Last Submissions: | 7 March and 3 May 2017 21 July 2017 |
DecisionDate: | 11 August 2017 |
Before: | Magistrate Theakston |
Decision: | 1. Judgment be entered in favour of the plaintiffs against the second defendant in the sum of $2,101.76. 2. The usual order as to interest, as described at rule 1622 of the Court Procedures Rules 2006. 3. Judgment be entered for the defendants to the counterclaim. 4. The second defendant pay the plaintiff’s costs of the proceedings. 5. Order 4 does not take effect if within seven days of this order a party notifies my associate in writing that it wishes to be heard in relation to alternative orders as to costs. |
Catchwords: | CONTRACT – Breach of building contract – Quality of renovation works undertaken by builders – Practical completion and maintenance liability period |
Legislation Cited: | Building Act 2004 (ACT) s 88 Construction Occupations (Licensing) Act 2004 (ACT) s 28 Court Procedures Rules 2006 (ACT) rr 220, 221 & 1622 |
Cases Cited: | Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64 Mass (Australia) Pty Limited v R & B Crane Rigging Pty Ltd [2008] ACTSC 23 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44 |
Parties: | Craig Glover (First Plaintiff) Jennifer Glover (Second Plaintiff) LG Building Solutions Pty Ltd (First Defendant) Lindsay Newman (Second Defendant) |
Representation: | Counsel Mr R Markham (First and Second Plaintiffs) Mr D Robens (First and Second Defendants) |
| Solicitors Chamberlains Law Firm (First and Second Plaintiffs) Kamy Saeedi Law (First and Second Defendants) | |
File Number: | CS 174 of 2016 |
MAGISTRATE THEAKSTON
Background
In 2013 Mr and Mrs Glover embarked upon the process of renovating their family home. They engaged a builder. The work was substantially completed by late 2014.
This is a claim by the Glovers, for a breach of contract, against the builder in relation to the quality of the work done.
At the time of the work, Mr Newman and Mr Gordon Stekovic were shareholders and directors of LG Building Solutions Pty Ltd.
The following issues are not in dispute:
(a)The content and timing of the building contract.
(b)The contract required the builder to carry out the work in a proper and skilful manner and, by operation of s 88 of the Building Act 2004 (ACT), the contract contained the warranties that:
(i)the work be carried out in a proper and skilful way; and
(ii)good and proper materials for the work be used to carry out the work.
(c)The Glovers had not made the final payment of $16,365.44.
There are disputes about the following matters:
(a)Which of the defendants was party to the building contract?
(b)What are the effects of the ‘practical completion’ and ‘maintenance liability period’ provisions within the building contract?
(c)What defects were established, do they amount to a breach of contract and what are the costs of their rectification?
(d)What is the appropriate builder’s margin to be added to the cost of any repairs?
(e)What are the net damages?
Additionally, LG Building Solutions counterclaimed for payment of the final instalment due under the contract. That counterclaim raises the issues:
(a)Can LG Building Solutions enforce the contract?
(b)If not, can Mr Newman be added or substituted as the plaintiff to the counterclaim?
I note that no issue taken in relation to the validity of the building contract, including fundamental elements such as legal capacity, intention to enter legal relations or the existence of sufficient consideration.
Who is the builder under the contract?
The building contract document appears on its face to be a complete contract, save that the precise scope of works is provided by reference to ‘plans’ that, while not attached, did exist at the time.
The document takes the form of a standard building contract with various fields requiring completion. The ‘builder’ field on the contract invites the relevant company, registered business or individual trader to be identified on the document as the builder. Mr Newman is personally identified within that field. Additionally, Mr Newman personally signed the agreement. There is no reference at all within the contract to LG Building Solutions. This is the case, notwithstanding that the initial quote for the work and subsequent invoices were issued under the letterhead of LG Building Solutions.
The relationship between Mr Newman and LG Building Solutions was complicated. Mr Newman was a shareholder, director and, at times, employee of LG Building Solutions. He may have also acted as agent for LG Building Solutions.
However for the purposes of the Glovers’ renovation, Mr Newman was the licensed builder. In contrast LG Building Solutions was not itself licensed, nor had it appointed a licensed nominee for the purpose of the company becoming eligible to hold a license, as is anticipated by s 28 Construction Occupations (Licensing) Act 2004. Further, Mr Newman and his wife were named on the Fidelity Fund Certificate invoice, and there is no evidence that LG Building Solutions made any contribution to such a fund. During cross examination, Mr Newman described LG Building Solutions as a subcontractor for the Glovers’ renovations. I understood that to mean that LG Building Solutions was subcontracted by Mr Newman, in his personal capacity, to perform work as part of the build.
The defendants’ final submissions noted the above use of LG Building Solutions’ letterhead for quotation and invoices, the use of email and physical addresses by the parties consistent with those of LG Building Solutions and the fact that Mr Stekovic was involved in onsite negotiations and discussions with the Glovers. However, those indicia do little to persuade me that the building contract was with LG Building Solutions. Instead, the contract on its face is patently with Mr Newman, and expresses in circumstances where LG Building Solutions could have very easily and clearly been identified as the builder, and therefore a party, if that was intended. This is not a case where Mr Newman simply signed a contract and there was uncertainty on the face of the agreement whether Mr Newman signed in his personal capacity or as an agent of the company. The agreement expressly describes Mr Newman as the builder.
Further, Mr Newman’s own evidence was that he intentionally placed himself, in his personal capacity, as the builder on the contract. That was done because LG Building Solutions did not have a builder’s license, and that LG Building Solutions involvement in the Glovers’ renovations was only as a subcontractor to him. Mr Stekovic also acknowledged during cross examination that the contract was with Mr Newman in his personal capacity.
When I consider what the parties did, in light of the surrounding circumstances, and what that would have led a reasonable person in the position of the Glovers to believe, I have no doubt that such a belief would be that Mr Newman was the builder and the other party to the building contract. Accordingly, I find that Mr Newman, and not LG Building Solutions, was a party to the contract.
What are the effects of the ‘practical completion’ and ‘maintenance liability period’ provisions within the building contract?
The defendants submit that following practical completion, the Glovers are not entitled to claim the work is incomplete or that there are any major omissions. They appear to further submit that any other defects must have been notified during the maintenance liability period, otherwise the contract bars any subsequent claims.
The relevant parts of the agreement are reproduced at Annexure A to this decision.
The significance of practical completion is that the maintenance liability period commences from that time and the balance of the contract sum becomes payable seven days after the builder issues a written request to the owners. Owners cannot withhold payment if practical completion has occurred, or is deemed to have occurred.
Practical completion is described within the contract as ‘when the works are complete except for minor omissions and/or minor defects which do not prevent the works from being reasonably fit for occupation or use by the owner’. It is deemed to occur if the builder serves a written notice as provided by the contract, and the owner does not respond in writing, within five days, listing items needing to be done to reach practical completion. There was no evidence that such a notice was issued. Practical completion is also deemed to have occurred if the owner possesses or uses the works without the written agreement of the builder. The evidence was that the Glovers moved back into the home at some point between 22 September and 17 October 2014. There was no evidence whether the builder did or did not provide written agreement for the Glovers to move back into the home. In any event there was no issue between the parties that practical completion had occurred in late 2014.
The defendants’ submissions note that clause 27 of the building contract provides the Glovers with an option to serve a written list of minor defects and or omissions within the three month maintenance liability period, and provides that the builder must rectify the work within 15 days. They go on to submit, it therefore follows that the Glovers do not have a right to complain of any minor defect or omission following the expiry of the maintenance liability period.
There are difficulties with that construction. The mere fact that a contractual provision provides that something may be done, does not, of itself, create a prohibition. Further, when the document is read as a whole and in the context of its purpose, being to regulate arrangements between an owner and a builder, there is no basis for a restriction on future claims by the owners.
The only obligation clause 27 imposes on the owners is to provide the builders with access to the home for the purpose of rectifying any defect or omission complained of. In relation to builders, it creates an obligation to rectify any minor defects or omissions to the work, if the owner provides a written list of such defects or omissions to the builder within the relevant period. It does not expressly, or by way of necessary implication, negate the intrinsic or extrinsic warranties available under the contract.
Practically speaking, an owner could not be expected to become aware of every defect or omission within a three month period. For example, heating or cooling may not be necessary during the maintenance liability period and any attempt to test such systems without adequate environmental conditions may make such tests unreliable. My construction of the provision is consistent with that reality.
What defects were established, do they amount to a breach of contract and what is the cost of rectification?
The defendants submitted that the observations of defects by the building expert Mr Tony Gray in 2016 and 2017 do not, of themselves, demonstrate the builder’s liability for the work completed in 2014. I understand that submission to be on the basis of the time between the build and the observations, and presumably because there may have been an intervening reason for the defect other than the work by the builder and or that the defects did not relate to the work carried out by the builder under the contract. However, the task given to Mr Gray was an ‘inspection of the works completed by Mr Lindsay Newman and LG Building Solutions’ and he was aware that the Glovers may rely upon his report for the purpose of seeking compensation. I understood the inspection was conducted on the basis of identifying what work had been carried out not in a proper and skilful manner. Inherent in that task was the identification by Mr Gray of the work carried out by the defendants. That initial step would not have been difficult as the scale of the build involved the entire home. The defendants accepted Mr Gray’s qualifications. Mr Gray is a qualified carpenter and builder, and experienced in conducting building inspections, including inspections for litigation. It was not put to Mr Gray that the defects did not arise from the defendants work. An experts’ conclave was conducted with Mr Gray and an expert of the defendants’ choosing and agreement was reached about the majority of items. The agreed values for rectifications described within the conclave Scott schedule was accepted at hearing by the defendants, and accordingly the defendants’ expert was not called to give evidence.
Further, the nature of the vast majority of the defects are patently building related. In those circumstances I am satisfied that a large number of items listed within the conclave Scott schedule, arose due to the Mr Newman’s failure to carry out the work in a proper and skilful manner and represent a breach of the building contract. Those items, along with the agreed cost of rectifying the defects are tabulated in Annexure B. The total cost of rectification of those items is $4,985.
I note that the following items within the Scott schedule were not pressed by the Glovers: 0, 3, 7, 11, 12, 14, 18, 19, 23, 25, 34, 40 and 45.
I turn now to the individual items that require further discussion.
Item 1 – Kitchen cabinetry
There was no dispute that the kitchen was installed by the defendants as part of the building contract. There were three residual complaints about the kitchen namely, the cupboard doors were not aligned, a cable behind the bin was in the way and the sink was not located in the centre of the window.
Mr Gray gave evidence that there was a quality problem with the alignment of the doors and the cable behind the bin, and estimated rectification would cost $140. This was consistent with the conclave Scott schedule. There was no evidence to the contrary.
I accept those two issues amount to a breach of the contract warranties and contract, and find the rectification cost is $140.
The complaint about the location of the sink is more complicated. There is a scarcity of evidence to form a complete view about this issue. The building plans, incorporated into the contract, show the sink located adjacent to the middle of the kitchen window. However, those plans are incomplete in describing the various components of the kitchen cabinetry, including their dimensions. Mr Gray indicated that in addition to building plans there is generally always a cabinetmaker’s plan. Mr Newman stated that at some point during the build he went through a process, with the Glovers, of covering the empty kitchen floor with melamine board and drawing in full scale the location of all kitchen elements. He attached to his affidavit a hand drawn plan of the kitchen elements. That was the only document in evidence approximating a cabinetmaker’s plan. It was unclear from his evidence if the hand drawn plan was a copy of what he said was provided to the Glovers or was a document created for another purpose.
Mr Glover disputed ever participating in that full scale process. He said the original kitchen would have been in place and it would not have been possible to lay boards on the floor. I also note there were issues in the evidence about precisely when such a full scale process may have taken place. Mr Glover described viewing, presumably with his wife, a kitchen in another home and then sitting down with Mr Newman and discussing what they wanted. Mr Glover’s evidence did not go so far as to say that it was agreed the sink would be located adjacent to the centre of the kitchen window.
Neither Mrs Glover nor Mr Stekovic gave evidence about what was agreed with respect to the elements of the kitchen. I was also left without clear evidence as to where the kitchen sink was eventually located. If I rely upon the hand drawn plans provided by Mr Newman, it appears the sink was located adjacent to the window, but offset to the right to some degree.
I note Mr Gray’s assessment that the kitchen was unusual but not wrong.
On the above evidence I cannot find that there was a breach of contract in relation to the location of the kitchen sink.
Were I to be able to find that there was breach of the contract, I would then have difficulty in making a finding about the cost of rectification. Mr Gray’s initial opinion could not be relied upon because he could not recall how he reached his estimate. Further, the submission made on behalf of the Glovers that I should allow 30% of the $24,000 itemised in the initial quote for the kitchen work, is made without any supporting evidence or stated reasoning.
This component of the claim is therefore not established.
Item 2 – Kitchen floor
There was simply no evidence about the current state of the kitchen floor or, if necessary, what it may cost to remedy any defect. It was conceded in the submissions made on behalf of the Glovers that Mr Gray could not be relied upon as an expert in relation to this component of the claim.
This component of the claim is not established.
Item 13 – Rectification of out of plum walls in the front entry family room
Notwithstanding the submissions made on behalf of the defendants’, Mr Gray gave the unchallenged evidence that this new wall, installed by the builder, was out of plumb ‘in excess of 15 millimetres’. The conclave Scott schedule noted that such walls should not be out of plumb greater than 4mm over a height of 2m. Mr Gray estimated the cost of rectifying this defect was $4,200. In evidence was a picture of the frame confirming that this was a new wall, as opposed to an existing wall. The rectification process was explained in detail and essentially involved stripping the wall back to a bare frame, packing the frame and then reinstalling the various components that had been removed. There would also be extra work associated with the adjacent doorway due to the increased thickness of the wall due to the packing.
I find this wall being out of plumb is a breach of the contract warranties and contract, and the rectification cost is $4,200.
Item 20 – Missing keys to laundry door and window
While an amount was included in the conclave Scott schedule if the keys for the laundry were missing, there was no evidence that such keys were in fact missing. Further, clause 26(e) of the building contract does not require production of the keys until the final payment is made, and it was common ground that the final payment had not been paid.
This component of the claim is therefore not established.
Item 21 – Manhole in laundry
The unchallenged evidence of Mr Gray is that the manhole currently located near the dryer in the laundry needs to be relocated to another room for the purpose of providing access to a lower level roof cavity. As the lower level roof cavity is no longer above the laundry, the laundry is not an appropriate place for such a manhole. Mr Gray assessed the cost of relocating the manhole to an appropriate location in the vertical wall at the end of the staircase at $900. It is clear from the building plans that changes to the location of the lower level roof cavity were part of the agreed work.
The submissions made on behalf of the defendants reference a clothes dryer, but do not address the need for there to be access into the lower level roof cavity.
I find the current placement of the manhole is a breach of the contract warranties, and contract and the rectification cost is $900.
Item 24 – Playroom window architraves
This item relates to the mitres opening up on the window architraves in the playroom. It was left open on the evidence that the architraves may have been damaged by the subsequent hanging of curtains by the Glovers. Mr Gray was not able to negate that possibility.
According, this component of the claim is not established.
Item 26 – Relocate and enlarge manhole at top of stairs
The conclave Scott schedule described that the manhole, located at the top of the stairs and that presumably provides access to the upper level roof cavity, should be relocated and increased in size to 600mm x 600mm. It needs to be relocated because it is located above the stairs and represents a hazard to those who use it. Rectification of this item was agreed during the conclave between Mr Gray and the defendants’ expert. The location and size of the new manhole in the upper story of the renovation patently relates to the building work. The conclave Scott schedule assesses the rectification costs at $780. The evidence of Mr Gray about this item was not challenged by the defendants.
In those circumstances I find that this defect arose due to the builder’s failure to carry out the work in a proper and skilful manner and represent a breach of the building contract. I find the cost of rectification is $780.
Item 30 – Plumbing upstairs bathroom
I understand from the submissions made on behalf of the Glovers that the claim in relation to the upstairs bathroom in now limited to $230 for the purpose of sealing tiled joints, tightening handrails and replacing the mixer cover plate. This is consistent with the description and assessment within the conclave Scott schedule and is supported by the uncontested evidence of Mr Gray. This item patently relates to the builder’s work.
Accordingly, I find that these upstairs bathroom defects represent a breach of the contract warranties and contract, and the rectification cost is $230.
Item 44 – Relocate front sump
While Mr Gray assessed the cost of relocating the front site sump and reshaping the adjacent ground levels, there is no evidence that the sump was installed by the builder or should have been relocated as part of the building work.
Accordingly, this component of the claim is not established.
Air conditioning
Both parties led evidence about the installation of the air conditioning system, subsequent complaints about its operation and actions taken. A report by Mr John Tisot assessing the installation and function of the air conditioning was in evidence. Ultimately, the Glovers only pressed the claims in relation to the following issues concerning the air conditioning:
(a)Rectify the condensation drain to conform to standards,
(b)Upgrade the circuit breaker for the electrical circuit powering the air conditioner,
(c)Install a junction box for wiring associated with air conditioning zoning motors, and
(d)Upgrade the power board main switch.
It is common ground that the installation of the air conditioning was part of the build performed by the builder in accordance with the contract. Mr Newman accepted the need to rectify the condensation drain and install the junction box at the assessed costs of $750 and $66 respectively.
Associated with the rectification of the condensation drain was the supply of mobile scaffolding, required if a PVC pipe could not be brought to a gutter from inside the roof space. This requirement was left as only a possibility and therefore there is inadequate evidence to establish it as part of the claim.
Mr Tisot’s report explained that the air conditioner was powered by a dedicated electrical circuit protected by a 25 ampere circuit breaker. I take judicial notice that the term ‘ampere’ is a unit of measurement of electrical current, which in this case would flow through the wires powering the air conditioner. However, the air conditioner was rated at 34 ampere and measurements of electrical current by Mr Tisot detected the air conditioner drew up to 25.7 ampere of electrical current. Mr Tisot, unsurprisingly, recommended the circuit breaker for this circuit to be upgraded and estimated a cost of $335 to do so. I accept that evidence.
Mr Tisot’s report also explained that total power demand calculations for the house, with the air conditioner installed, were in the region of 85 ampere. However the main switch for the power board was rated at only 80 ampere. He recommended that switch be upgraded immediately and proposed two solutions, namely:
(a)Replace the switch with one rated at 100 ampere at a cost of $350, or
(b)Replace the switch with an 80 ampere circuit breaker at a cost of $405.
The submissions on behalf of the Glovers appear to have claimed amounts for both solutions. Mr Tisot describes either solution as appropriate, but the second would have the advantage that the Glovers would know when they have exceeded 80 ampere. The report also commented on the option of upgrading the power supply from one to three phase, but did not advise that the same was necessary for power consumption between 80 and 100 ampere. I accept the evidence that an upgrade of the switch is required, the first solution would be adequate and the cost of that solution is $350.
For the above reasons, I find that the defects in relation to the condensation drain, the air conditioner circuit breaker, the junction box and the power board main switch are breaches of the contract warranties and contract, and the amount to rectify those defects is $1,501.
Builders’ margin
The unchallenged evidence of Mr Gray was that in cases where a builder was to be engaged to rectify the defects of another builder, the builder would charge a 35% margin on top of the amounts assessed.
It was common ground that 10% should also be added for the purposes of the Goods and Services Tax.
The above costs of rectifying the above defects total $12,736. Adding to that figure the builders’ margin and GST, the total would be $18,467.20.
What are the net damages?
In a claim for breach of contract, any assessment of damages must compare the position the claimant is in, to the position the claimant would have been in had the agreement been performed without a breach: Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64. Had the agreement been performed without breach, the Glovers would not have suffered the above loss, but they would also have paid the full price of the contract. Therefore, any outstanding balance of the contract price must be discounted from the above assessment of damages.
The outstanding contract balance is $16,365.44. Therefore the net damages are $2,101.76.
Counterclaim
LG Building Solutions claims $16,365.44 plus interest against the Glovers. That figure represents the unpaid balance of the building contract price. There is a fundamental difficulty with this claim, in that LG Building Solutions was not a party to the contract as discussed above at paragraphs 8 – 14. I will consider the resulting issues, notwithstanding that the unpaid balance has been taken into account when assessing the net damages for the Glover’s claim.
Unless LG Building Solutions falls within a limited exception, it is not able to enforce the contract: Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44. There is no suggestion that both the Glovers and Mr Newman contemplated LG Building Solutions would have the benefit of the contract. There is no basis to suggest that the instant case would fall within an exception to the requirement for privity of contract.
In these circumstances I was invited by counsel for the defendants to exercise my discretion and either join or substitute Mr Newman as a plaintiff to the counterclaim pursuant to r 220 or r 221 of the Court Procedures Rules 2006 (ACT). The submission is put on the basis that the Glovers joined both Mr Newman and LG Building Solutions as defendants in their claim, it is necessary for the administration of justice that the counterclaim not be dismissed due to any misdescription of the defendant to the counterclaim, the mistake was a function of the uncertainty about whether Mr Newman signed the building contract as a director of LG Building Solutions or in his personal capacity, there would be no prejudice to the Glovers as the facts and pleadings would remain essentially the same, and were the counterclaim dismissed, LG Building Solutions may be estopped from re-litigating the issue again between the same parties and on the same facts.
There are a number of difficulties with me exercising this discretion.
While it is correct that the Glovers joined both Mr Newman and LG Building Solutions as defendants to their claim, the Glovers’ position was always that their claim against LG Building Solutions was in the alternative to that against Mr Newman, with their principal position being that the contract was with Mr Newman. It was initially open to the defendants to include Mr Newman as the alternative plaintiff to the counterclaim. That course would have allowed relevant pleadings to have been put and the parties the opportunity to lead evidence relevant to that alternative claim. In the absence of that course, those opportunities were lost.
What has occurred here is more than a mere misdescription of the appropriate party and the request is more than merely correcting a mistake about the name used to describe a party. What is being requested is the replacement of one entity with another as the plaintiff to the counterclaim. That distinction was of significant comment in the decision of Master Harper in Mass (Australia) Pty Limited v R & B Crane Rigging Pty Ltd [2008] ACTSC 23.
Contrary to the defendants’ submissions there is a real possibility of prejudice to the Glovers should I exercise the discretion sought. For such substitution to have any effect, I would need to also substitute, at this very late stage of the proceedings, the pleadings of the original parties, presumably mutatis mutandis, and presumably consider the issues that arise in light of the evidence already before the court. In such circumstances the Glovers would not have had the opportunity to fashion their pleadings in response to a counterclaim by Mr Newman, nor lead relevant evidence. It would be presumptuous to assume that the pleadings and evidence would remain the same. The loss of such fundamental opportunities must amount to a prejudice against the Glovers.
The above concern about any future proceedings being estopped appears to be based on the assumption the litigation would be between the same parties based on the same evidence. However, the plaintiff to such proceedings would presumably be Mr Newman, not LG Building Solutions, and facts would presumably involve actions by LG Building Solutions as the agent of Mr Newman. I also note that there has been no suggestion that any limitation period would prohibit such a claim.
Further, the outstanding amount has been taken into account in the assessment of net damages for the Glovers’ claim.
For the above reasons, it is not appropriate for me to either substitute or add Mr Newton as a plaintiff to the counterclaim at this very late stage in the proceedings.
Accordingly the counterclaim must fail.
Orders
I make the final orders:
1. Judgment be entered in favour of the plaintiffs against the second defendant in the sum of $2,101.76.
2. The usual order as to interest, as described at rule 1622 of the Court Procedures Rules 2006.
3. Judgment be entered for the defendants to the counterclaim.
4. The second defendant pay the plaintiff’s costs of the proceedings.
5. Order 4 does not take effect if within seven days of this order a party notifies my associate in writing that it wishes to be heard in relation to alternative orders as to costs.
| I certify that the preceding eighty-two [82] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Magistrate Theakston. Associate: Taden Kelliher Date: 11 August 2017 |
Annexure A
25. PRACTICAL COMPLETION
a)Practical Completion is achieved when the Works are complete except for minor omissions and/or minor defects which do not prevent the Works from being reasonably fit for occupation or use by the Owner. For the purposes of this clause the Works do not include any labour or materials which are to be supplied or fixed by the Owner.
b)When in the opinion of the Builder the Works have reached Practical Completion, the Builder will serve on the owner a written Notice of Practical Completion (Appendix F, Form 6).
c)Within five (5) Days of service of that notice the Owner must serve on the Builder a written notice stating those things (if any) which in the Owner’s opinion are required by this Contract to be done to reach Practical Completion.
d)The Builder will within fourteen (14) Days of service of that notice do all those things necessary for Practical Completion and serve upon the owner written notice upon completing them.
e)If the Owner does not give notice in sub-clause 25(c), the Works are deemed to have reached Practical Completion.
f)If the Owner possesses or uses the Works or any part of them without the written agreement of the Builder, the date of Practical Completion is the date of possession or use, unless Practical Completion has already been reached.
g)The Works are at the risk of the owner on Practical Completion or on the date of possession or use under sub-clause (f). The Owner is responsible for insuring the completed Works in either case.
26. PAYMENT ON PRACTICAL COMPLETION
a)On Practical Completion, the Builder is entitled to receive the unpaid balance of the Contract Sum together with any other money which is payable under the Contract.
b)The amount due must be paid to the Builder within seven (7) Days of service on the Owner of a written request by the Builder giving particulars of the claim for final payment, or within the period stated in item A12 of Appendix A (if any).
c)If the Builder does not receive payment in full by the due date, in addition to other rights it may have, the Builder is entitled to interest at the rate of item A15 of Appendix A on the shortfall.
d)The Owner is not entitled to possession of the Works nor to receive the keys until payment to the Builder of all money due under the Contract.
e)On such payment, the Builder will hand all keys and certificates to the Owner.
f)the Owner is not entitled to withhold any money from the Builder for Works which are:
i)deemed to have reached Practical Completion;
ii)which have minor omissions and/or minor Defects which do not prevent the Works from being reasonably fit for occupation or use.
27. MAINTENANCE LIABILITY PERIOD
a)The Maintenance Liability Period commences upon Practical Completion and continues for the period in Item A14 of Appendix A, or if none is stated, for 90 calendar days.
b)Within the Maintenance Liability Period, the Owner may serve on the Builder a written list of any minor Defects and/or omissions, which must be rectified within fifteen (15) Days of service, unless otherwise agreed.
c)The Builder must also rectify any minor omissions and/or minor Defects that they have listed in the Notice of Practical Completion (Appendix F, Form 6) within fifteen (15) Days of service of that Notice, unless otherwise agreed.
d)The Owner will provide access for the Builder to carry out its obligations during normal builders’ working hours between Monday and Saturday.
e)If the Builder does not comply with its obligations under sub-clause 27(b) and 27(c), the Owner may engage others to rectify the notified minor omissions and/or minor Defects and recover the reasonable Actual Costs from the Builder.
Annexure B
Item Description Quantum
Finalise gaps in pantry $100
Fill caps in kitchen cornice mitres $60
Refit architrave in highlight window above front entry door $240
Correct wall adjacent to front entry sliding door $240
Adjust front entry sliding door runners $70
Remove lump above living room sliding doors $250
Replace hinges, mirror, vanity and paint door to toilet $790
Refit toilet roll holder and towel rail $35
Fill cornice mitres in laundry $60
Sand timber work to office cupboard architraves $150
Fill cornice mitres in hallway stairwell $60
Refit door and architraves to door to Isabel’s room $300
Replace hinges, striker plate and refit loose fittings to toilet $280
Relocate power point upstairs bathroom $580
Complete painting to upstairs bathroom doorway $30
Replace short architraves to Lucas’ wardrobe $100
Re-align wardrobe doors in Lucas’ room $20
Refit entry and sliding doors in master bedroom $70
Remedy problem with cavity sliding door in master bedroom $450
Refit loose towel rails and toilet roll holders $30
Adjust shower door $110
Complete application of sealant to tiled intersections $150
Reinstall roof flashing $600
Re-level roof gutters at front of house $160
Close of external gaps around windows $50
Total $4,985
0
3
3