HNT Civil Construction v Mahamoud
[2013] QCAT 36
•11 January 2013
| CITATION: | HNT Civil Construction v Mahamoud [2013] QCAT 36 |
| PARTIES: | HNT Civil Construction (Applicant) |
| v | |
| Osman Mahamoud (Respondent) |
| APPLICATION NUMBER: | MCDO167-11 |
| MATTER TYPE: | Other minor civil dispute matters |
| HEARING DATE: | 15 October 2012 |
| HEARD AT: | Holland Park |
| DECISION OF: | Kate Buxton, Adjudicator |
| DELIVERED ON: | 11 January 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The applicants claim to recover $18,000.00 in unpaid variations is dismissed. 2. The respondent’s counter application to recover $7,000.00 as an overpayment for works not yet undertaken is dismissed. 3. The applicant pay to the respondent the sum of $1,952.55 in claim for defects by 28 February 2013. |
| CATCHWORDS: | MINOR CIVIL DIPUTE – Building Contract – unwritten variations – whether payment properly characterised by homeowner as for variations or incomplete work – adequacy of evidence Domestic Building Contracts Act 2000, ss 79, 84 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | In person |
| RESPONDENT: | In person |
REASONS FOR DECISION
This application was filed as a minor civil debt and heard in the minor civil dispute jurisdiction at Holland Park. The applicant claims $18,000.00 for unpaid variations following a contract entered into between the parties for house extension and renovations. The contract was entered into on 8 January 2010 in the sum of $30,000.00. As at the date of the hearing the respondent had paid a total of $37,000.00 (including $7,000.00 over and above the amount stated in the written contract) and the applicant claimed a further $18,000.00 in unpaid variations (meaning the applicant claimed that $25,000.00 in variations were payable in total).
The applicant sent a letter of demand on 3 March 2011 and filed this application on 5 October 2011. Following a number of preliminary hearings during 2012 the matter came on for final determination on 15 October 2012. The parties then complied with further directions during October and the decision was reserved.
In his response Mr Mahamoud stated that he owed $8,000.00 in agreed unpaid variations. However, the respondent states that he paid the sum $7,000.00 to the applicant not by way of payment for variations but by way of a deposit for further works which the applicant agreed to undertake but which he has not yet commenced.
The respondent also advanced a counter-application to recover monies for various incomplete or defective works.
The evidence
A lump sum contract was entered into between the parties on 8 January 2010 for the sum of $30,000.00. No written variations were entered into for any further work.
At the hearing Mr Turcinovic, director of the applicant, and licensee for undertaking of the building works, gave oral evidence above the extensive nature of the variations. He did all this from memory and, when prompted by the Tribunal, by reference to a house plan that he was able to produce. When initially asked by the Tribunal how the money claim was made up he replied ‘I don’t know. It was a long time ago’. Allowing Mr Turcinovic as much latitude as possible, given he was representing himself, he then gave oral evidence as to the elements of the house renovations and the agreed variations. He also gave evidence of his estimate of their costs. It was perfectly plain during the hearing that this evidence was estimates which were not referable to any objective data, useful criteria or written evidence. In short, the claims for variations were not supported by any useful or reliable evidence whatsoever.
In response, Mr Mahamoud also gave oral evidence about the defects in the work. He filed a statutory declaration dated 19 October 2012 in further support of those allegations. He claims that he paid an additional $7,000.00 for works not yet started. However, somewhat confusingly, he also concedes that he owed $8,000.00 for variations which he did request. He asked that what he owed Mr Turcinovic be offset against the extent to which the work was defective.
Unwritten variations
The applicant, through Mr Turcinovic, was obliged to ensure that any variations to the building contract were in writing[1]. He has failed to comply with this statutory obligation and is therefore only able to recover an amount for variations if certain statutory requirements are met. Section 84(4) of the Domestic Building Contracts Act 2000 allows the Tribunal to approve the recovery of an amount for an unwritten variation only if the Tribunal is satisfied that:
a) Either
i)There are exceptional circumstances to warrant recovery; or
ii)The building contractor would suffer unreasonable hardship if he could not recovery those amounts; and
b) It would not be unfair to the building owner for the building contractor to recover the amount.
[1] Domestic Building Contracts Act 2000, s 79(1).
Mr Turcinovic filed material on 19 October 2012 in support of his application that exceptional circumstances or unreasonable hardship apply to this case. Having read that material, I cannot see that it places Mr Turcinovic or the applicant in any different position to any other builder who has not been paid for work. I acknowledge that Mr Turcinovic has dependants and a precarious financial situation but that is the case with any builder who manages his affairs in a way which makes it difficult for him to recover amounts which he says are owed to him.
Further, and as I will expand upon below, one of the difficulties with the proper determination of this dispute is the lack of cogent evidence. Poor communication between the parties seems to have exacerbated this situation. It is in such circumstances where it is imperative that the statutory obligation to ensure that contractual terms are written down whether in the first instance or whether for variations. In this circumstances it would be unfair to the building owner for unwritten variations to be claimed in circumstances where, even now, the applicant’s evidence as to those variations appears unreliable. I therefore reject the application for an order of the Tribunal under s 84(4) of the Domestic Building Contracts Act 2000 by reason of exception circumstances or unreasonable hardship.
I have, however, continued to consider the applicant’s substantive claim as in the event that s 84 did not apply to limit his recovery in this way.
Mr Turcinovic gave evidence that the following variations were agreed verbally and undertaken by him at Mr Mahamoud property:
a) A new kitchen, although Mr Turcinovic had no recollection of its cost;
b) Plumbing for the kitchen in the sum of $1,500.00;
c) Stairs in the sum of $1,740.00;
d) External painting $2,000.00;
e) Storage in two downstairs bedrooms and relocation of doors $4,000.00;
f) Lining of gutters $5,000.00;
g) Bathroom $12,000.00.
The total of these claims is $26,240.00, plus the kitchen.
Mr Turcinovic conceded that Mr Mahamoud had agreed, and in fact purchased tiles and had had them laid in the bathroom. Mr Mahamoud gave evidence that his cost for this was $1,920.00 and asserted that this ought to be deducted from the contract sum. I note that the written contract expressly provides for tiles to be purchased by Mr Mahamoud at his expense so it does not follow that a deduction could be claimed by him or allowed by Mr Turcinovic. The sums above are similar to, but not precisely the same as the sum claimed of $25,000.00 for variations. Mr Turcinovic claims that, over and above the original contract sum of $30,000.00, total variations of $25,000.00 were agreed and $7,000.00 of those have been paid.
However, the estimates referred to above for the various elements of the variations were conjourned from Mr Turcinovic’s memory on the day of the hearing. He did not produce a single document in support of any amount and I do not regard the oral evidence given by him as sufficient to support the allegations either that these amounts were in fact variations from the original contract or that, even if they were, that they had been properly quantified.
Having said that, Mr Mahamoud conceded that he had agreed to certain variations and that they had been undertaken. Again, no particularility was produced as to the agreed variations or the value of them. Mr Mahamoud agreed that the written contract for $30,000.00 was performed, subject to some alleged defects to which I will refer below. He asserted that he owed $8,000.00 for those variations but that this should be offset against the cost of rectifying the defects.
Mr Mahamoud asserted that the $7,000.00 he paid in addition to the contract works was part of an agreed $15,000.00 for further works to be carried out but which were never commenced by the applicant. He seeks a refund of that $7,000.00 part payment.
Defective Building Works
Mr Mahamoud’s evidence of the defective works centred around a list he had prepared (Exhibit 1) of works described as ‘incomplete’ and ‘hasn’t started’, together with a bundle of photographs (Exhibit 2) which he says showed the defective works. He gave oral evidence about both the list and the photographs. He did not produce any report of an independent builder or other independent evidence.
In response to a direction from the Tribunal Mr Mahamoud filed, on 19 October 2012, a statutory declaration further detailing his defects claimed. Mr Turcinovic gave evidence in response to the listed items which were identified by Mr Mahamoud during the hearing the evidence of the parties can be summarised thus:
a) Painting the rear of the house:
Mr Mahamoud states that this was part of the original contract and was not complete. He seeks an allowance of $4,200.00 and has produced a quote in support. Mr Turcinovic stated that this was not part of the original contract for works. He claimed a $2,000.00 variation for painting. I accept that there was no requirement in the contract to paint and find that the failure to paint is not a defect in respect of the works in the written contract.
b) Front door
Mr Mahamoud claims that the front door was never provided, forcing him to purchase one for the sum of $452.55. He also claims the amount of $112.45 for a lock for the door. Mr Turcinovic could not recall one way or the other whether the door had been provided and noted that Mr Mahamoud had not produced a receipt. He has now done so (annexed to his statutory declaration dated 19 October 2012) for the door but not for the lock. Mr Mahamoud has satisfied the Tribunal that the door was part of the original contract and an allowance should be made for the proven amount of $452.55 as damages for failure to complete this work, but has not met the evidentiary burden with respect to the lock.
c) Tiling
I have already indicated that this claim is misconceived as the written contract provides that the tiling be done at Mr Mahamoud’s expense.
d) Guttering and wiring
Mr Mahamoud claims that both the guttering and wiring were defective but has not discharged the evidential burden of proving why this is so. There is no report or independent evidence and the photographs are unconvincing. These defect claims must fail.
e) Roller doors
The written contracts provide for the existing roller doors to be removed and for new doors with remote control to be supplied. This has not occurred. Mr Mahamoud stated that the applicant quoted $2,700.00 for this work and that this amount should be credited. Mr Turcinovic stated that there was a difficulty with the site and driveway which made it impossible to install the roller doors on which the parties had originally agreed. He submitted that $900.00 (being the cost price of 2 roller doors) should be deducted in recognition of this. No evidence was produced by either party to support these figures. Mr Turcinovic’s figure of $900.00 seems too low having regard to the fact that a contract would ordinarily assume a margin on such items and there is no reason to depart from that approach here. The figure from Mr Mahamoud seems high and again is unsupported by evidence. It would have been a simple matter to produce a quote for 2 roller doors but neither party managed to do so. Doing the best I can having regard to the cost price quoted by Mr Turcinovic I allow the sum of $1,500.00 by way of deduction for this uncompleted item.
f) Room sizes, doors and windows
Mr Mahamoud advanced a variety of claims for room sizes and window locations with which he was unhappy. However, there is no expressed term or work description in a written contract which supports his claims that these were breaches of that contract. There is also no evidence that the bathroom door required replacement. More is needed by a home owner than a simple expression of dissatisfaction to prove that works are defective or incomplete. These claims must fail.
g) Cleaning
Mr Mahamoud has not produced any evidence in support of his claim for $300.00 for cleaning and has therefore not discharged the evidential burden in respect of this claim.
Summary of findings
Generally, where the parties’ views have departed in relation to claims and counter-application in this matter the evidence points to a consistent difficulty in communication between the parties. Mr Mahamoud genuinely believes that he had paid $7,000.00 towards works not yet started and Mr Turcinovic genuinely believed that those payments were for variations. However, because the parties failed to communicate effectively with one another at the time the payments were made or at any time between then and now it is left to this Tribunal to determine who is entitled to what. This exercise must be undertaken having regard to the limited available evidence to which I have referred above.
Based on the observations I have made above as to the evidence in relation to defective works I am satisfied that from the $30,000.00 written contract price a deduction should be made for the front door and roller doors which, together, total $1,952.55.
I find that the $7,000.00 paid by Mr Mahamoud which he characterised as a payment for works not yet completed was in fact a part payment for variations. Given the history and timeline it simply does not hang together that Mr Mahamoud would have paid for works not yet undertaken but not paid for works which he conceded had been undertaken. The proper characterisation of that $7,000.00 payment was for partial payment of variations. Section 84 of the Domestic Building Contracts Act 2000 limits Mr Turcinovic’s right to ‘recover’ amounts not yet received for unwritten variations. However, here, there is no application to ‘recover’ for the first $7,000.00 as, consistent with my finding, it has already been paid. Mr Mahamoud sought to recover that sum on a different basis, that it was paid for a different purpose, but I do not accept his recollection or characterisation of that payment. It would be a surprising result in circumstances where he concedes that $8,000.00 worth of variations have been undertaken but not yet paid for. On the view that I take, $7,000.00 have been paid for variations and Mr Turcinovic, or the applicant, does not need to ‘recover’ for those amounts. The applicant does however have to account for the incomplete or defective work in the sum of $1,952.55. I therefore make no orders in relation to the payment which has been inproperly characterised by Mr Mahamoud as a payment works not yet made and I dismiss his claim to recover that amount.
The sum of $1,952.55 should be repaid by Mr Turcinovic to Mr Mahamoud for the defective or incomplete works under the written contract.
As to the applicant’s claim for $17,000.00 in unpaid variations I find:
a) The applicant is not entitled to ‘recover’ this amount because of the application of ss 79 to 84 of the Domestic Building Contracts Act 2000. There are no special circumstances or unreasonable hardship which would justify the applicant being treated differently to any other builder and it would be unfair to Mr Mahamoud to allow any further recovery in circumstances where the scope of the alleged variations is completely unclear. This is the very reason why both contracts and any variations to those contract ought be in writing.
b) Even if s 84 did not apply to defeat the applicant’s claim, for the reasons set out above, the applicant’s evidence of the scope and worth of the variations is so manifestly inadequate and unreliable as to be incapable of supporting any further claims. The claim for $17,000.00 for unpaid variations must therefore be dismissed.
Orders
The applicant’s claim to recover $18,000.00 in unpaid variations is dismissed.
The respondent’s counter application to recover $7,000.00 as an overpayment for works not yet undertaken is dismissed.
The applicant pay to the respondent the sum of $1,952.55 in claim for defects by 28 February 2013.
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