Goldstone v Patterson; Patterson v Goldstone
[2014] NSWCATCD 203
•22 October 2014
|
New South Wales |
Case Name: | Goldstone v Patterson; Patterson v Goldstone |
Medium Neutral Citation: | [2014] NSWCATCD 203 |
Hearing Date(s): | 29 May 2014 and 14 August 2014 |
Decision Date: | 22 October 2014 |
Jurisdiction: | Consumer and Commercial Division |
Before: | K Holwell, General Member |
Decision: | The claim by Graham Goldstone against Colleen Patterson is dismissed. |
Catchwords: | Builder claim for cost of works; Home Owner claim for relief against payment, compensation for defective work and costs |
Legislation Cited: | Home Building Act 1989 (NSW |
Category: | Principal judgment |
Parties: | Graham Goldstone (applicant in HB 14/12853 and respondent in HB 14/12859) |
Representation: | The parties in person |
File Number(s): | HB 14/12853 and HB 14/12859 |
Publication Restriction: | Nil |
JUDGMENT
Application
Graham Goldstone (“the builder”) has a claim for $22,847.90 (amended from $19,276.00) for building work claimed to have been performed for Colleen Patterson (“the home owner”).
The home owner has claims for $11,400.00 and $2,400.00 to rectify defective work, a claim for $2,800.00 for a refund of an insurance payment, a claim of $2,040 for costs and a claim to be relieved from payment of the amount being claimed by the builder.
Jurisdiction
The Tribunal has jurisdiction to hear and determine the applications pursuant to the Home Building Act 1989 (NSW). Residential building work was performed at a house at Suffolk Park. The builder is licensed. The claims are brought within the time limits in the legislation.
Proceedings
This litigation has a history. The builder made an application for payment of building work on file HB 13/27054. It was listed for hearing on 23 July 2013. However the builder did not attend the hearing and the application was dismissed. The builder made a second application for payment on file HB 13/42316. It was listed for hearing on 23 January 2014. However the builder did not attend the hearing and the application was dismissed. The home owner made an application in respect of allegedly defective work and for relief against payment on file HB 13/47678. On 23 January 2014 Member Bassett ordered the builder to pay the home owner $11,480.00 plus costs assessed in the sum of $2,040.00. On file HB 14/05828 the builder made an application for a re-hearing. The Tribunal granted that application and ordered that the builder’s claim and the home owner’s claim were to be re-heard. The Tribunal has stayed the orders on file HB 13/47673. The builder’s application was re-registered as file HB 14/12853 and the home owner’s application was re-registered as file HB 14/12859. A directions hearing was held on 21 March 2014. The cases could not be settled and they were set down for hearing. The cases were heard on 29 May 2014 and 14 August 2014. Thereafter the decision was reserved pending the giving of these reasons. The hearings were sound recorded.
Evidence
Oral evidence was given by the parties and the home owner’s partner, Mr. Crowley. A considerable number of documents and photographs were tendered. It is not practical to recount all the oral evidence and the contents of the documents. In making findings I shall endeavour to refer to the main features of the evidence. Findings are made on the balance of probabilities. The builder and the home owner have the onus of proof in respect of their respective applications.
Findings
In this case the Tribunal is being asked to try to sort out what can only be described as a contractual mess.
Whilst the home owner owns the Suffolk Park house, she lives in Sydney. In December 2012 she came north and stayed at a motel. An engineer had asked the builder to inspect the house in respect of required repairs and renovations. The builder says he made a handwritten list of the work to be done and discussed it with the home owner at the motel. The home owner says she was not shown any list and that the builder had told her at the motel that he kept the details of the work in his head. The builder could not produce the handwriting at the hearing. The builder says he told the home owner that $30,000.00 would have to be paid to sub-contractors and there would be additional payments to him for supervision and demolition. The home owner says this is untrue.
On 5 December 2012 the parties entered into a written lump sum contract. The contract price is $20,000.00 having been altered from $25,000.00. When questioned about why the builder had a written contract for $20,000.00 when he claims he told the home owner the costs would be more than $30,000.00 he said that the $20,000.00 contract only related to work until Christmas and thereafter further work would be reassessed.
In the section of the contract relating to the description of the work there are the words “see attached sheet”. However there is no sheet attached to the contract. The builder could not produce the sheet at the hearing. The home owner says she never saw it.
After signing the contract the home owner returned to Sydney and the builder started work.
On 28 December 2012 (three weeks after the contract was signed) the builder sent an email to himself with an outline of proposed work. It has amounts totalling $27,800.00 plus 8% for insurance, 10% for builder’s margin and $3,000.00 for builder’s supervision. This document was not sent to the home owner. It was obviously not part of the contract.
There has to be findings that there was a lump sum contract between the parties in the sum of $20,000.00, that there was no written scope or description of works in the contract, that there were no plans or specifications for the works and that there was no written variation of the contract.
In late December 2012 the home owner visited the house and claims that the builder had done a large amount of work that was not authorised and that some of the work was defective. She did not terminate the contract at that time because she says she received assurances from the builder that the defects would be rectified. The home owner was also at the house in early 2013. She said she asked the builder to stop work but he refused. She claims that the builder told her she had to leave the site because there was asbestos which could be harmful to her.
Between January and April 2013 the builder continued working. The home owner says much of the work was unauthorised particularly the removal of several walls. The builder claims he had to remove the walls whether the work was authorised or not because there were termites and he was following the termite trails in the house. It seems that the builder fails to understand that there needs to be an agreement with the home owner in regard to the required works and that he cannot unilaterally decide what should or should not be done.
Whilst some of the builder’s work may not have been authorised, there is evidence of text messages being sent to Mr. Crowley re work being done and a payment was made to the builder in February 2013. Also there were offers of further payments on certain conditions including repairs. Whilst the home owner is now claiming that the majority of the work in 2013 was not authorised it seems that the home owner and Mr. Crowley allowed work to proceed.
At the hearing the builder produced a spreadsheet with descriptions of work, variations and costings resulting in a project total of $60,938.70. This material was not disclosed to the home owner prior to the hearing and it is not the subject of any contract between the parties.
The home owner paid the builder $15,200.00. She paid $2,955.00 to sub-contractors and $5,456.00 for the supply or windows and doors. She paid $630.00 for removal of building debris.
There has to be a finding that the home owner has paid in excess of the price in the written contract.
In the absence of another contract or written variation to the contract, the builder can only recover additional moneys on a quantum meruit basis for the reasonable cost of the work subject to the vexed issue in this case as to whether some or all of any additional work was authorised.
The builder has produced invoices for work with a balance of $22,847.90. He has credited $12,000.00 in payments off those invoices instead of $15,200.00 which has been actually paid to him. In one of the invoices (number 77) the builder is claiming $2,750.00 for seeking to recover moneys from the home owner, preparing documents for the hearing and attending the Tribunal. This amount is not part of the claim for building works and payment for it is not maintainable.
Some of the invoices contain percentages of work claimed to have been done in various rooms at the house and costed at different times. There are no diary entries of work done on particular days, there are no time sheets, there are no names of sub-contractors or employees, no records of payments to workers and there are no invoices for materials.
The builder has not obtained any independent evidence from another builder or building consultant to price all the work he performed.
Mr Oke, a very experienced building consultant engaged by the home owner has reported that in his opinion some of the amounts in the builder’s invoices amount to overcharging. Mr Oke says that amounts of $2,682.00 (excluding GST) and $8,600.00 (excluding GST) should cost $860.00 and $3,940.00 respectively.
The builder has obviously expanded the scope of the works from the original $20,000.00 contract as shown by the spreadsheet he now produces showing a project cost in excess of $60,000.00. There has to be a finding that some of the work performed between January and April 2013 was not authorised by the home owner. However, on the other hand it seems that the builder has done additional work beyond the scope of works originally contemplated maybe with the acquiescence of the home owner whilst she was at the house.
The problems for the builder are (a) there is no further written contract or written variation; (b) there is no evidence (expert or lay) of the reasonable cost of any additional work; (c) there is no evidence of the items suggested in paragraph 18 which may substantiate the claim and (d) there is expert evidence from the home owner’s consultant that some amounts claimed are overcharged. There has to be a finding that the builder cannot prove the claim he is making for the payment of additional moneys.
The home owner has engaged another builder to perform further works at a cost of $11,400.00. This work includes rectifying defects in the sliding doors in the lounge area which Mr. Oke estimates at $1,800.00. The other works involved replacing kitchen walls, installing architraves to windows on the first floor and installing gyprock to the first floor walls. The home owner claims that all this work involves rectifying unauthorised work by the builder but in my view some of it is additional work and variations of previously contemplated work.
The home owner claims $2,400.00 for rectifying defective work with the sliding doors on the balcony. This claim is supported by the evidence of Mr. Oke. His estimate is $2,250.00 but there may need to be GST added which would approximate the amount being claimed.
The home owner is prima facie entitled to the amounts of $1,800.00 and $2,400.00 to rectify defective work but not the additional work performed by the second builder. However, in my view the payment of these two sums should be offset against the additional building work performed by the builder, the cost of which he cannot prove. If the builder does not get paid for the additional work and has also to pay for defective work, the home owner would be unjustly enriched at the builder’s expense.
The home owner claims a refund of $2,800.00 which the builder claimed for insurance. This amount was paid to the builder when the contract was signed on 5 December 2012. Invoice 37 dated 4 December 2012 states that builder’s risk insurance estimate is based on $35,000.00 and includes home warranty insurance. Whilst the invoice states an estimate of work of $35,000.00 the next day the builder signs a contract for $20,000.00. Home warranty insurance is not required if the amount is $20,000.00 or less. In any event the builder did not obtain home warranty insurance. He filled out an application form for this insurance but never lodged it. Surprisingly the builder stated on the form that there was a fixed price contract in the sum of $45,000.00. At the hearing the builder claimed that the payment of $2,800.00 was mainly for insurance he takes out for his business and is calculated at 8% of the estimate of the works. When pressed about 8% of the contract price being $1,600.00 and not $2,800.00 the builder said he would have credited the difference later but he never did. I am satisfied that the payment of $2,800.00 was made innocently by the home owner as a consequence of false pretences by the builder. This amount should be refunded to the home owner.
The home owner claims costs of $2,040.00 which were awarded to her by Member Bassett at the hearing on 23 January 2014 when the builder did not attend. The costs include travel from Sydney for the hearing. The home owner is entitled to these costs and the assessment made by Member Bassett should not be altered.
Conclusions
The builder cannot prove his case re the payment for additional work. Whilst the home owner has a prima facie claim for the cost of $4,200.00 for defective work that amount needs to be set off against the unproven builder’s claim. The builder has to refund the insurance payment of $2,800.00 and pay the costs of the previous proceedings in the sum of $2,040.00.
The home owner is to be relieved from payment of the moneys claimed by the builder.
Orders were made on 23 January 2014 on file HB 13/47678. Those orders were stayed by the Tribunal pending the re-hearing of the application. Those orders need to be set aside as they are replaced by the orders made herein.
K Holwell
General Member
Civil and Administrative Tribunal of New South Wales
22 October 2014
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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