Heritage Plus v Murphy
[2014] QCAT 530
•23 October 2014
| CITATION: | Heritage Plus v Murphy [2014] QCAT 530 |
| PARTIES: | Kenneth Vincent Picard trading as Heritage Plus (Applicant) |
| v | |
| Robert Murphy and Leslie Murphy (Respondent) |
| APPLICATION NUMBER: | BDL058–13 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 25 July 2014 |
| HEARD AT: | Townsville |
| DECISION OF: | Member Johnston |
| DELIVERED ON: | 23 October 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | The Tribunal makes the following orders: 1. The Respondent’s Response and/or counter-application is dismissed; and 2. The Respondent is ordered to pay the Applicant the sum of $8,343.56 by 4pm on Friday 21 November 2014. |
| CATCHWORDS: | Building matters – Dispute over the terms of the HIA Operations, Addition and Renovation Contract |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Kenneth Vincent Picard |
| RESPONDENT: | Mr Robert Murphy and Mrs Leslie Murphy |
REASONS FOR DECISION
Background
Mr and Mrs Murphy owned a property situated at 101, 13th Avenue Railway Estate, Townsville.
Mr Picard was engaged to renovate the dwelling under an HIA Operations, Addition and Renovation Contract (“the Contract”) dated 22 September 2010 which is Exhibit 4.
The works which would be undertaken were described in clause 4 of the Contract in these terms: “rear extension, new roof over concrete slab, under, new bathroom, plaster boarding, tiling, electrical, plumbing”.
Mr Picard’s evidence was that he started work on 1 November 2010 but that work was slowed down because Mr Murphy did not want him to take the roof off until after the wet season. Cyclone Yasi subsequently struck the North Queensland coast and Townsville received a large amount of rain in the wet season so it would appear that the decision not to take off the roof until after the season is a good decision.
Mr Picard told the Tribunal that this substantially put back his ability to complete the works.
Mr Picard proceeded to undertake the works and was paid to his work in stages as required by the Contract. The last payment he received was on 9 September 2011. This was meant to be the second last payment. Mr Picard’s evidence was that Mr Picard received a cheque final payment which bounced i.e. was not honoured on presentation.
Mr Murphy’s account was that the cheque was for the last two stages and he cancelled the cheque and only paid for the second last stage.
What is clear is that Mr Picard has not been paid for the final stage under the Contract. He told the Tribunal that Mr Murphy was not happy with the slab and had told him he would not be paid till it was fixed.
Mr Picard refused to give the Respondents the final certificate because he had not been paid for the work he had undertaken. The Contract provides that the builder is not required to give any certificate of approval as a precondition to payment of a progress claim. The Contract also provides that payments are to be made within 5 working days of receiving the claim. There is no provision allowing monies to be retained against defects.
The Contract in Clause 27 requires the builder to rectify any defects or other faults within 6 months of being notified by the owner in writing.
Mr Murphy complained that Mr Pilchard did not respond to the list of defects provided on 29 October 2011 till 9 March 2012. This is within the period specified by Clause 27.
The Respondents initially refused to pay Mr Picard because they were not happy with the time that he had taken to complete the renovation and they had a number of issues with the way in which the work had been completed. This led to a complaint to the Building Services Authority. The Authority wrote to Mr Murphy on 4 June 2012 reporting that the items in Mr Murphy's complaint form had been investigated and ‘determined that the items inspected were not defective building work’. The Authority declined to issue a Direction to Rectify to Mr Picard for that reason.
Mr and Mrs Murphy in their Response raise the following issues: firstly that Picard had taken too long to complete the works and the Respondents should be entitled to a set off under the Contract of $15 per delay for unreasonable delays; and secondly that the contract was null and void and the Respondent should not have to pay further monies to Mr Picard.
Did Mr Picard breach the Contract by taking too long to undertake the work?
The Contract provides for the builder to undertake the works in a period of 101 days. Mr Picard told the Tribunal that Mr Murphy did not want him to take the roof off for the wet season. Mr Murphy confirmed that he had given Mr Picard those instructions. The Tribunal accepts that the Contract was varied by agreement between the parties namely that the removal of the roof was postponed. Mr Picard told the Tribunal this change affected his whole schedule in terms of completing the works. The Tribunal accepts that evidence.
The Tribunal accepts that with the Cyclone and heavy wet season it would not have been prudent for a builder to remove the roof until May of 2011. The Tribunal is of the view that time should run from the end of the wet season namely the start of May 2011 to complete the work.
Mr Picard should have under the Contract notified Mr and Mrs Murphy that time for completion was being extended because of weather. However given that Mr Picard was working on Mr Murphy's direct instructions the Tribunal does not accept that the Respondents were prejudiced by Mr Picard's failure to issue a notice extending the time of completion.
The Contract provides in clause 17 for the reasonable extension of time caused by claimable delay. This makes allowances for inclement weather and the effects of inclement weather and includes a variation requested by the owner.
The Contract in item 10 provides where the project is delayed for more than four weeks past the date of completion then the owner is entitled to claim an amount of $15 per day by way of penalty against the builder.
The Tribunal notes that 101 working days from 2 May 2011 should be 22 September 2011. The Contract provides for the penalty will to accrue if completion is not affected within four weeks of that date. The evidence of the respondents is that the cheque paid to Mr Picard was dishonoured on or about 19 September 2011. This is evidence that Mr Picard had provided his final invoice by this time.
This is consistent with Exhibit 1 which is an e-mail dated 29 October 2011 from Mr Murphy to Mr Picard providing a list of defects because Mr Picard had nearly finished the house renovations.
The Tribunal is of the view that under the terms of the Contract there is no penalty payments payable. Mr Picard was within the extended period when he tendered his final account. Mr and Mrs Murphy were in breach of the Contract not paying Mr Picard at this time. The subsequent delays were brought about as a result of Mr and Mrs Murphy refusing to make the final payment. Mr and Mrs Murphy complained to the Building Services Authority about the work that Mr Picard had undertaken. The Authority reported that the defects complained about had been investigated and had been identified as being rectified. This included the complaint about cracking in the slab. There was accordingly no basis for Mr and Mrs Murphy not to pay Mr Picard for the work that he had undertaken.
The Tribunal accepts that Mr Murphy was unhappy with the finish of the concrete slab. However the Authority had taken the view that it did meet the requirements of the relevant Australian Standard. This did not support the claim that the work was defective.
The fact that there was a difference of opinion between the parties over the quality of the finish was evident. There were also issues over the communication between the parties.
Mr Picard’s claim is for Eight Thousand Three Hundred and Forty Three Dollars and Fifty Six Cents ($8343.56) being the final payment of $7453.56 plus $890 for extra concrete. He conceded that he had been paid for the bulkhead. He maintained that the final payment had been reduced from $7645.50 to take into account a credit for electrical work. He had been unable to quote the costs of some of the work such as the grey glass because that was made by GJ James.
The Respondents calculate the Final payment to be $7645.16 in Exhibit 5. The sum of $890.00 for the extra concrete was not disputed by the Respondents. They did dispute the variation in relation to the bulkhead which the Applicant conceded.
The Tribunal is of the view that the Respondents cannot rely on a penalty clause if the delays have come about because of the refusal to pay Mr Picard in accordance with the terms of the Contract.
The Tribunal is of the view that if there were unreasonable delays that this does not necessarily invalidate the Contract. The remedy for unreasonable delays the penalty provided by the Contracts.
The Tribunal does not accept the claim that Mr Picard did not complete the works within a period of four weeks after the completion date. The completion date was extended by the actions of the parties. The Tribunal finds that Mr Picard did not take an unreasonable period of time to complete the works.
The Tribunal does not accept the claim that the Contract is null and void. Mr Picard carried out the works. He was entitled under the Contract to make a claim for the final payment which he did. The Respondents refused to pay Mr Picard for the work which he had undertaken. The complaints about the standard of his work to the Authority were dismissed. This means that under the Contract there is no basis for not paying Mr Picard. The Respondents were required under the Contract to pay the builder. The Respondents made it clear to Mr Picard that they did not intend to pay his account. This placed them in breach of the obligations and that caused Mr Picard to take as long as he was entitled to attend to defects. The Tribunal accepts his evidence that this were minor defects.
The Tribunal has no doubt that if Mr Picard had been paid he would have provided the final inspection certificate and attended to defects promptly.
The Tribunal for these reasons makes the following Orders: the Respondent’s Response and/or counter - application is dismissed; and the Respondent is ordered to pay the Applicant the sum of $8,343.56 by 4pm on Friday 21 November 2014.
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