Hicks v Egc Building Pty Ltd
[2021] QCAT 335
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Hicks & Anor v EGC Building Pty Ltd [2021] QCAT 335
PARTIES: JOHN HICKS
PATRICIA HAWKINS(applicant)
v
EGC BUILDING PTY LTD (respondent)
APPLICATION NO/S:
BDL073-20
MATTER TYPE:
Building matters
DELIVERED ON:
28 September 2021
HEARING DATE:
12 February 2021
16 December 2020
Closing submissions filed 12 February 2021
HEARD AT:
Brisbane
DECISION OF:
Member Traves
ORDERS:
EGC Building Pty Ltd must pay John Hicks and Patricia Hawkins the sum of $4, 018.62 within 28 days from the date of this order.
CATCHWORDS:
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – whether work defective – whether applicants entitled to liquidated damages under the contract …
APPEARANCES & REPRESENTATION:
Applicants:
Self-represented
Respondent:
Self-represented
REASONS FOR DECISION
On 31 January 2020 the applicants, John Hicks and Patricia Hawkins, filed an application for a minor civil dispute seeking an order that the respondent, EGC Building Pty Ltd pay them $20, 503.15. The sum comprises:
(a)$3, 727.35 for the cost of rectifying painting and carpentry defects;
(b)$480.00 for the cost of a report identifying defects (Special Purpose Inspection Report);
(c)$15, 950.00 in the amount of liquidated damages; and
(d)$345.80 application fee.
On 3 April 2020 the matter was transferred as a “building dispute” to the Tribunal’s building list.
The respondent disputes that there were any painting and carpentry defects and claims the work although incomplete was work which it had not had an opportunity to complete. The respondent also submits that no liquidated damages are owed because the delay was caused through the fault of the applicants, not the respondent. The respondent raised a counter claim in its closing submissions filed after the hearing on 12 February 2021. This was too late to make such a claim and it has not been considered in determining the application.
Facts
The relevant contract was entered into by the parties on 5 July 2018. The commencement date of the contract was 5 July 2018 and the date for practical completion was 26 September 2018. It is not in dispute that practical completion was not achieved.
The works were described as follows:
Renovations to L1 including bathrooms, floor tiling, new doors internal & entrance, Plastering works, Demolition, Plumbing & electrical, Painting, Painting aluminium window frames.
The total cost of the works, estimated at the commencement of the contract, was $173, 140.00 (including GST).
The contract was a cost plus contract with weekly invoices or work completed to be provided by the respondent to the applicants. Simon Green, director of EGC Building Pty Ltd, was to be paid $85.00 for administration and management duties. A builder’s margin of 15% was to be paid on trades engaged by the respondent and on any materials incorporated in the works (clause 29.2(a)).
Applicants’ submissions
Mr Hicks, on behalf of the applicants, said that the job commenced very slowly and that by the end of September 2018 the main tiles to the floor throughout the property had not been installed. He said that the job continued to progress at a very slow rate with the majority of the works nearing completion by the end of December 2018.
At that time, Mr Hicks said he spotted defects in the stairwells. Mr Hicks said that Mr Green had given them yellow tape to put on the defects and that he had also emailed a list of the defects to him. Mr Hicks said that Mr Green had sent out his tradespeople a number of days later but did not come to the premises himself. Mr Hicks said that Mr Green was relying on his plasterer and painter to tell him what were legitimate defects and what were not.
After the work was completed the respondent forwarded the applicants an invoice for the work. Mr Hicks said that an invoice should not have been sent because the work was for defects only. Mr Hicks said that Mr Green had told him that his wife had mistakenly sent the invoice but payment for that work became a major issue between the parties.
Mr Green paid the plasterer’s share of the invoice because he was concerned he might otherwise lose his plasterer, but did not pay the painter.
The job remained incomplete. Mr Hicks said he wrote to Mr Green saying that Mr Green needed to find another painter or to work out some agreement with the existing painter to get things moving. Mr Hicks said that that did not happen until very late in the job (April 2019) when the painter agreed to reduce his invoice from $1500 to $750. Mr Hicks said that he agreed to pay $375 of that invoice, if Mr Green paid the other $375. Mr Hicks said that he agreed to do this in an effort to get the project moving.
Mr Hicks said that he, Mr Green and the painter then discussed who was going to finish the painting work and that Mr Green, at the last minute, walked away. Mr Hicks said that Mr Green did not think he would be paid for the outstanding work. Mr Green said that he would complete the work but wanted the money for the work placed, in advance, into the Master Builders Trust account. Mr Hicks said that he agreed to that.
Mr Hicks said that, despite this, Mr Green refused to come out and complete the works and that that was the end. Mr Hicks said that the applicants were left in April/May in a house that was uncompleted with other defects and that ‘Simon Green just walked away, refused to come back, refused to do anything’.
Mr Hicks summed up what he believed was the essence of the problem that developed between the applicants and the respondent this way:
…because the painter and the plasterer believed that they should be paid for their hours irrespective of whether working on defects or not because the contract they were told by the builder was, “Hey, you guys are going to get paid for the hours,” but unfortunately in their brain they think we’re entitled to get paid for every hour that we work even if we do a really sloppy job and we’ve got to come back later on and paint it and fix it up again. In their brain they believed that they were entitled to that and that is where the problem arose.
…
So for a while there the builder just couldn’t get any further with the painter to make him believe he wasn’t entitled to the money, etcetera, etcetera. The painter held his guns and wouldn’t come back, but that was the – that was the builder’s problem.
That’s not my problem. The builder, is he can’t organise things with his trades and get him to come back, the should immediately say, “All right. Okay. I’ll get in somebody else to continue on the job.[1]
[1]Transcript 1-25.
Mr Hicks said that the applicants are only claiming for the cost of rectifying the defects, not the cost of completing the works. The applicants are also claiming liquidated damages from the date the works were supposed to be completed (practical completion) until the date the contract was cancelled. The applicants are also claiming the costs of the application fee to QCAT and the cost of obtaining the building inspection report.
The claim for rectification costs is calculated as follows:
(a)Performance Painting: $3 177.35;[2]
(b)CW Handyworks (carpentry): $550.[3]
Total: $3 727.35.
[2]Application, annexure L2.
[3]Application, annexure M2.
The claim for liquidated damages is for:
319 days at $50 per day: $15, 950.[4]
[4]Application for building dispute filed 31 January 2020, at 10 to 11.
The claim for costs is for:
(a)Building inspection report: $480; and
(b)QCAT filing fee: $345.80.
Respondents’ submissions
Mr Green, on behalf of the respondent, said the problem started with the trades that Mr Hicks was administering himself. Mr Green said that John Hicks had said that he had a lot of expertise in the building industry and was not willing to pay Mr Green to oversee his trades when he was fully capable of doing that himself and that that was where the problem started. The trades engaged directly by Mr Hicks were: air conditioning; cabinetry; floor levelling; carpets; handyman; blinds; windows; engineering; shower screen install; his own plumber at one point.
Mr Green said that it was very difficult for anyone, even a builder to co-ordinate all the trades, but to co-ordinate and not be allowed to deal directly with all the trades on site was obviously going to cause some delays and problems for the project.
Mr Green gave examples of the delays he claimed were caused by Mr Hicks’ involvement:
(a)The windows ordered by Mr Hicks were the wrong colour which led to delay.
(b)Mr Hicks refused to pay the tiler’s claim for completing half the stairs. Mr Hicks said it was too much money and so the tiler stopped work until they could determine how much he was going to be paid even though there was an agreed rate prior to commencement. Meanwhile the tiler took on another small job to do in the meantime, while the pay issue was sorted out.
(c)Mr Green said that he had measured and told Mr Hicks how many tiles were needed. Mr Green said that Mr Hicks had responded, to the effect, “I know exactly how many tiles are needed, you don’t need to tell me”. Mr Hicks proceeded to order all the tiles but Mr Green said they were short tiles which delayed the job and meant the bathrooms could not be finished on time.
(d)Mr Green said that no-one could be there while the toxic two-pack spray paint was going on.
(e)Mr Green said that the applicants swept all the floors while the tile grouting was still wet which damaged the grouting. Mr Green said that the tiler agreed to acid wash everything for free because they could not prove that Mr Hicks had caused the damage but that this also delayed the works.
(f)There were numerous issues associated with the installation of the air-conditioning, in particular the placement of the bulkheads, which was organised by Mr Hicks.
(g)There were unforeseen issues with a removal of a wall and the pipework in the kitchen that necessitated work being done through the neighbours’ premises below. Additional work was required in the applicant’s kitchen as well as in the neighbours’ premises below. This also delayed the project.
(h)Mr Hicks had initially told Mr Green that he would order all the internal doors directly. Mr Green said that Mr Hicks then changed his mind when he realised the doors all needed to be check measured. This caused further delay.
(i)Mr Green said that Mr Hicks constantly interfered with and changed the electrical works which then needed to be re-done.
(j)Mr Green said that the delay with the provision of kitchen and bathroom cabinetry (which was organised by Mr Hicks) had a major impact on the project.
Mr Green said in relation to the delays:
There’s not one- there’s not one email from John Hicks at any time during the process to say that he was unhappy with the progress of the works. This is because every week I was saying to John, “What’s going on John? This is – what you’re doing here is delaying the project. The cabinetry is not ready. The windows is delaying. It’s delaying the project. I can’t finish things if the things aren’t installed for me to work around,” and these are the problems that we had. Under any circumstances we couldn’t finish the project without the tiles and without the cabinetry being in place and that wasn’t there until late December.[5]
[5]Transcript of Proceedings, 1-30 to 1-31.
In relation to the issue with the defects and the painter, Mr Green said that this happened while he was on two weeks vacation. He said that Mr Hicks issued a defects list and that Mr Green immediately sent out all trades and attended to everything on the list, bar the painting and associated plaster work. The plasterer and painter went to site and said that Mr Green’s specific instructions were only to fix the defects. Mr Green said that they ended up doing all the work, including additional work, that Mr Hicks asked them to do.
Mr Green referred to an email from the painter, Rocco, where he says:
Works completed in these two days were not paint defects, mostly sanding and repainting stairwells.[6]
[6]Response, annexure 29.
Mr Green said that he did not walk off the job and that the only remaining work was outstanding painting to be done. Mr Green said that they had trouble getting the painter to complete that remaining painting work because of issues caused by Mr Hicks in refusing to pay for any of the work that had been done by the plasterer and painter in response to the ‘defects list’, which Mr Green maintains included additional work.
Consideration
This dispute centres around two main issues: first, whether the applicants are entitled to their claim under the contract for liquidated damages and, secondly, whether the respondent is liable to the applicants for their cost in rectifying allegedly defective work.
Liquidated damages claim
The applicants have claimed $15, 950 in liquidated damages, being 319 days at $50 per day. The applicants submit that they are entitled to this sum under clause 18.1. They say the contract had not reached practical completion as confirmed by the Gold Coast Building Inspector’s Report commissioned by them. They did not receive a “contractor’s Notice of Anticipated Practical Completion” as required under clause 17.1. Consequently, they argue, the applicants are entitled to damages of $50 a day from 26 September 2018 until the date the contract was terminated on 11 August 2018, a total of 319 days.
The respondent accepts that the works had not reached practical completion but submits that this was the fault of the applicants.
Clause 18 provides:
18.1 Owner’s entitlement to liquidated damages
If the Contractor fails to bring the Works to Practical Completion by the Date for Practical Completion, the Owner may, on Practical Completion, give to the Contractor a written claim for liquidated damages at the rate stated in Item 21 of the Schedule for each Day after the Date for Practical Completion until the Date of Practical Completion, or the Day on which this Contract is terminated, whichever is earlier.
18.2 Time for liquidated damages claim
The Owner will not be entitled to liquidated damages, or any other monetary consideration (including damages for breach of contract), for any failure by the Contractor to bring the Works to Practical Completion by the Date for Practical Completion unless the Owner gives to the Contractor a written claim for liquidated damages in accordance with Clause 18.1 within twenty-eight (28) Days after the Date of Practical Completion.
…
The Date for Practical Completion is defined to mean the date stated in Item 13 of the Schedule by which the Works are to be brought to Practical Completion, as adjusted under the contract. That date is 26 September 2018.
The Date of Practical Completion is defined to mean the date on which the works reach Practical Completion. Practical Completion is defined to mean that stage of the works when they have been completed in compliance with the contract without any defects or omissions other than minor defects or minor omissions that will not unreasonably affect occupation; and if the owner claims there are minor defects or minor omissions, the contractor gives the owner a defects document for the minor defects or minor omissions.
The parties agree, and I find, that the works did not reach practical completion by the date for practical completion, as specified under the contract. Further, the works were never completed by the respondent.
Under clause 18.2 the applicants are not entitled to liquidated damages unless they have given to the contractor a written claim for liquidated damages in accordance with clause 18.1, within 28 days after the Date of Practical Completion. As noted above, the Date of Practical Completion never arrived. On one view, because clause 18.2 contemplates a notice within 28 days after the Date of Practical Completion, the liquidated damages clause cannot respond in the present circumstances. That seems unlikely to have been the intention of the parties. Reading clauses 18.1 and 18.2 together, they may be given consonant effect if, where the contract has been terminated before the Date of Practical Completion, the notice is given within 28 days of the termination.
On the first view, clause 18 did not contemplate liquidated damages in the present circumstances. On the second and preferred view, notice was not given within 28 days of termination.
On either view, clause 18 is not satisfied.
I would add, that, had the proper notice been given, I would not have been satisfied on the evidence before me that the contractor was solely to blame for the failure to achieve practical completion. Indeed, the evidence was left in a state of considerable uncertainty as to who had caused the delay and to what extent. In the circumstances, the applicants have not, in my view, demonstrated what delay was caused by the respondent.
Accordingly, I do not allow this aspect of the applicants’ claim.
Defects claim
The applicants have claimed a total of $3, 727, essentially for the costs they have incurred in remedying painting and plastering work they allege was defective. The amount comprises: $3 177, 35 paid to Performance Painting and $550 paid to CW Handyworks for carpentry work.
The parties provided a Scott Schedule as directed by the Tribunal, dealing with each of the alleged defects.
The applicants engaged a building inspector to assess the works with a view to identifying any defective or incomplete work. The building inspector provided a report titled Gold Coast Building Inspector, Special Purpose Building Inspection dated 26 August 2019. The applicants are not claiming the cost for completing works that were incomplete.
The respondent did not call any expert evidence to rebut the evidence of the building inspector. Further, the respondent, by Mr Green, did not personally inspect the works around the time the last defects list was sent, or before or after he sent the plasterer and painter to the premises to fix up any defective work. As a consequence, the respondent was not in a position to refuse the evidence of the inspector.
I accept that, in the area where most of the defects are said to exist, namely the foyer, stair risers and stair walls, that the work had been completed. This is consistent with Mr Green having given Mr Hicks yellow adhesive tape in the week prior to Christmas with the request that tape be placed where defects were found. I also accept the evidence of Mr Hicks that he contacted the painter, Rocco, around 12 January 2019 and that he had asked him what painting work remained to be done and that Rocco had replied: the lift doors, some internal sections of the lift shaft, the French doors and the main entry doors. Mr Hicks said that during the conversation he had asked Rocco whether he had completed the entry foyer, stairs, dining, lounge and bedrooms and that Rocco confirmed that he had done so. This is reflected in an email Mr Hicks sent to Mr Green on 31 January 2019. The content of the conversation between Mr Hicks and Rocco was confirmed by Rocco under oath at the hearing.[7]
[7]Transcript at 1-116.
The building inspector’s report dated 26 August 2019 states that a visual site inspection was carried out on 26 August 2019 to confirm the finished paint and plaster workmanship carried out to the newly renovated premises. The report separately identifies 34 alleged defects and provides that “plaster and paint finishing’s throughout interior appear to be below average and Industry Standards and will require further attention to bring it to the appropriate Standard.”
The painter gave evidence which, in effect, corroborated the evidence of the applicants, that there was work that needed to be done to address dents and patches on the walls. While I accept that some of the dents may have possibly been caused by sub-contractors engaged by the applicants, the evidence in this regard is scant and I am not in a position to make a positive finding as to which, and if so what, defects may have been caused by other trades. I think it unlikely that it comprises a significant proportion of the matters identified by the building inspector. Further, I accept that the applicants employed painters to remedy work they reasonably considered to be defective. Although, in my view, the surface substrate was the cause of a large number of the defects, the builder was responsible for co-ordinating the plasterer and painter so that the painter did not proceed to apply second and third coats before the plasterer and properly rectified any plaster issues.
Mr Green took issue with some defects which he said were properly categorised as additional work or not work for which he was responsible. Mr Green referred to one defect: the tile stopping short of the curved skirting which he claimed was the responsibility of the tradesperson who installed the skirting. As Mr Green had not employed that person, he claimed he should not be responsible. The estimated cost for rectifying the defect was $100.00. In my view, the issue was that the tile had not been brought to the edge of the wall. This was a defect caused by the tiler rather than by the installer of the skirting. Accordingly, I have allowed that item.
I have not allowed an amount of $31.35 for roller door stop marks on the walls (item 5 of the Scott Schedule), given the roller doors were installed by trades engaged by Mr Hicks.
I have not allowed an amount of $62.70 for repainting the ceiling because I accept the evidence of Mr Green that this was caused by Mr Hicks re-locating the position of the ceiling fan.
I do not allow an amount of $47.03 for poor repairs to previous settlement crack (item 42 of the Scott Schedule) because I accept the evidence of Mr Green that this cracking is due to works by a previous builder and to movement in the building for which the respondent can not be made liable.
Finally, I do not allow an amount of $344.85 for repair to settlement cracks in the VJ ceiling (item 50 of the Scott Schedule) because I accept the evidence of the respondent that they did not install a VJ ceiling and I am not satisfied on the evidence that the cracks were caused by the respondent’s works.
In total, having considered the 55 items of alleged defective work, I have disallowed works for amounts totalling $485.93.
On 4 November 2019 Mr Hicks was invoiced by Performance Painting Co for $3, 177.35 including GST ($2, 888.50 plus GST of $288.85) for all “remedial painting as outlined in the Gold Coast Building Inspector Report of 26 August 2019”. Mr Hicks paid that invoice on 27 November 2019. There is also an invoice from CW Handyworks for $550 dated 8 October 2019 which was paid on 10 October 2019 which I accept was also for defective work.
Given that I have disallowed some items of defective work as noted above which total $485.93, the amount of $2, 888.50 should be reduced by that amount, to $2, 402.57. With GST of $240.25 that amount totals $2, 642.82. I also allow the amount of $550 paid to CW Handyworks for other miscellaneous defective works.
In total, I allow $3, 192.82 for the claim for defective work.
Costs
The applicants have claimed costs, namely the cost of the building report and the Tribunal filing fee.
I have relied upon the report of the building inspector in determining the defects claim. In the circumstances I will allow the amount of $480 for the building report. I will also allow the cost of the filing fee at $345.80.
Conclusion
For the reasons above, the applicants’ claim against the respondent is allowed in the sum of $4, 018.62, determined as follows:
(a)Defects claim: $3, 192.82;
(b)Costs: $480 + $345.80.
Total: $4, 018.62.
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