Just Rite Australia Pty Ltd ACN 120 505 991 v Doyle (Civil Dispute) - [2024] ACAT 36

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

JUST RITE AUSTRALIA PTY LTD ACN 120 505 991 v DOYLE (Civil Dispute) [2024] ACAT 36

XD 1474/2023
Catchwords: CIVIL DISPUTE – claim in negligence – contract between applicant and respondent for installation of insulation in the respondent’s roof – property damage to ceiling and downlights consequent on negligent failure to reinstall roof tiles following applicant’s installation of insulation and subsequent rainfall causing damage – negligence admitted – applicant admitted duty to make good the loss – parties agreed applicant to provide a discount on contract price in lieu of itself making good the loss by carrying out necessary repairs – dispute as to quantifying the loss – applicant’s duty extends only to costs it would incur to make good the loss in a proper and competent manner, not costs the respondent would incur to make good the loss – discount assessed at $490, – respondent ordered to pay the applicant the balance owing under the contract, less the discount
Cases cited:Livingstone v Rawyards Coal Co (1880) 5 AC 25
List of Texts cited: Balkin and Davis, Law of Torts, (5^th edition) (2013)

Tribunal: Presidential Member G McCarthy

Date of Orders:  24 May 2024
Date of Reasons for Decision:         24 May 2024
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 1474/2023
BETWEEN:
JUST RITE AUSTRALIA PTY LTD ACN 120 505 991
Applicant

AND:

ALANA DOYLE
Respondent

TRIBUNAL:Presidential Member G McCarthy
DATE: 24 May 2024

ORDER

The Tribunal orders that:

The respondent pay the applicant $1,180.50 within 28 days.

………………………………..

Presidential Member G McCarthy

REASONS FOR DECISION

By application dated 17 November 2023, but not filed until 20 December 2023, the applicant applied for an order, among others, that the respondent pay the applicant $2,224.40 – comprising $1,280, as the amount owing under a contract for removal of existing ceiling insulation and the supply and install of new installation (the contract); $330, as the ACAT filing fee; and $614.40, as the amount of interest accrued.
The applicant relied on the order confirmation dated 23 July 2021 as constituting the contract, which described the work to be done for a quoted amount of:
(a)$2,114 for removal of existing insulation;
(b)$2,713 for the supply and installation of batts; and
(c)$150 for a “lifetime re-install” promise if the batts were removed.
The order confirmation refers to GST of $429.73 to a “total outstanding” of $4,727 inclusive of GST.
The three components of the order confirmation total $4,977. The stated total amount included a discount of $250 for accepting the quote within a fortnight of receiving it.
At hearing, the applicant proceeded on the basis that the total amount owing under the contract was $4,727. I have done likewise.
On 15 December 2021, employee installers of the applicant attended the respondent’s property to complete the agreed works. Unfortunately, the installers failed to reinstall roof tiles that had been put aside while installing the new insulation. More unfortunately, a rainstorm went over the respondent’s property that evening. Rainwater entered the respondent’s property causing damage to at least one downlight and to the ceiling.
The respondent properly admitted liability and agreed to make good the respondent’s loss.
The respondent claimed six downlights were damaged. The applicant did not agree but, nevertheless, agreed to replace six downlights.
The applicant offered to arrange for tradespersons to come to the respondent’s property to supply and install six new downlights and repaint the ceiling at its own cost, but the respondent did not accept the offer. The respondent wished instead to receive a deduction from the final monies owing under the contract. At hearing, the respondent said she intended to have the repair work done by others as part of other work being done at her house.
The applicant agreed to that course, but agreement could not be reached as to what the deduction would be. The amount to be deducted, to arrive at the net amount owing under the contract, is the issue to be decided for the purpose of determining the applicant’s claim for monies owing under the contract.
By email sent on 21 January 2022 at 10:12 am, an employee of the respondent (David Alexander) noted the respondent’s preference for a deduction from the contract price rather than the applicant making the repairs. By way of a deduction, he said –
[S]o I removed 16m2 off maxi bill and 16 m2 of the ceiling
Maxi final invoice ended up being $1819 saving of $170
Ceiling final invoice ended up being $2471 saving of $267
Total being $437
If you prefer us having the issues fixed, we can do that.
The reference to 16m2 is, as I understood it, a reference to the area of insulation that was damaged and an area of the ceiling that needed to be repainted, although the logic underpinning the proposed deductions was difficult to understand.
As I understood it, the references to the maxi final invoice and the ceiling final invoice are references to the tax invoices numbered 225672 and 225674, both dated 21 December 2021, sent to the respondent by email on 21 December 2021.
Invoice 225672 concern removal of the existing insulation batts and vacuuming using a “maxi vac”, hence Mr Alexander referring to the “Maxi final invoice”. It contains the words:
AMENDED JOB TOTAL $1,819
16M2 COULDN’T BE DONE
Invoice 225672 stated the deposit paid to be $994.50 and the amount payable on completion to be $824.50, to a total of $1,819. The lower price is consistent with the order confirmation that priced the insulation removal at $2,114, however the difference between the contract price ($2,114) and the discounted price ($1,819) is $295, not $170 referred to in Mr Alexander’s email.
Invoice 225674 for supply and installation of the new batts stated the job total to be $2,471, the deposit paid to be $1,369, and the amount payable on completion to be $1,102. There is no mention of any discount or deduction in the tax invoice, but a deduction was obviously applied because the order confirmation describes the ceiling insulation to be installed for $2,713. However, the difference between the contract price ($2,713) and the discount price ($2,471) is $242, not $267 referred to in Mr Alexander’s email.
The discrepancies between the “savings” stated in Mr Alexander’s email in the lower prices stated in the tax invoices was not explained.
By reference to the two tax invoices, the total discounted price was $4,290, producing a total discount of $537 from the contract price. In my view, when working out what the discounted price should be under the contract, the amounts stated in the tax invoices should be preferred to the total amount stated in Mr Alexander’s email. What is clear, however, is that the invoices contained discounts or deductions offered in lieu of the applicant repairing the damage.
The amounts owing under the tax invoices, $824.50 and $1,102, totalled $1,926.50.
At first, I doubted the tax invoices made any allowance by way of a discount referable to the damage because they were sent on 21 December 2021 prior to Mr Alexander making his offer of a discount from each invoice. However, on closer review of the documents, I am satisfied the tax invoices made an allowance. Several factors drew me to that conclusion:
(a)The discount of $1,819 stated in the maxi invoice is consistent with the offer Mr Alexander made in his email.
(b)The reference to 16m2 is a reference to the ceiling area which could only have been made in the context of the damage.
(c)Mr Alexander refers to the maxi final invoice “ended up being” $1,819 which clearly implies an invoice rendered consequent on the respondent wanting the discount instead of the applicant making the repairs.
(d)It seems clear from her email sent on 16 February 2022 at 3:00 pm, the respondent understood the tax invoices involved a deduction referenced to the repairs because she refers to “the $ David applied when he put forward the proposed $437 in reduction.”
(e)Mr Kapila Wijewardene’s email sent on 16 February 2022 stating, “We are happy to come do the repairs now” and that if that was not convenient “we are happy to provide you with a discount as provided by David” was simply stating a willingness to honour the discounted offer Mr Alexander had previously made.
The respondent did not accept the proposed deduction. She contended the proposed deduction of $437 would not cover the cost of repairs. She wanted the applicant to provide quotes for the cost of repairs which she indicated she would accept as an appropriate amount to deduct from the amount owing.
The applicant did not provide quotes and so, on 25 January 2022, she sent the applicant an email stating:
I have worked through the cost to repair as outlined below:
1.       16m2 paint roof where water damaged occurred at $40 per hour = $640
2.       replacing 6 downlights brackets transformers were exposed and rained on which will corrode in time) @ $40 each = $240
3.       electrician to replace 6 downlights@ $80 per hour x 5 hours = $400
Cost of repairs = $1280.
On 16 February 2022, she sent the applicant another email stating she had taken the deduction offer of $437, applied it on a pro-rata basis to her claimed costs of repairs and had then paid $325.30 towards invoice 225672 and $321.20 towards invoice 225674, being a total of $646.50. The email concluded with a statement that she regarded the matter as “closed”.
The applicant did not agree. It asked the respondent for quotes to support her estimated cost of repairs, but (for reasons explained at hearing) the respondent did not provide any quotes. Where the tax invoices had already applied a discount by reference to the damage, leaving a balance owing of $1,926.50, the applicant applied to the Tribunal for payment of the balance owing: $1,280.
Where the applicant had admitted negligence, namely the failure of its contractor to reinstall the roof tiles, and where damage resulted, the applicant was required to put the respondent in the same position as was the case before the tort was committed.[1] The principle underpinning an award of compensatory damages is to achieve that outcome.
[1] Balkin and Davis, Law of Torts, (fifth edition), paragraph 27.22, citing Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 at 35
Monetary compensation is not necessarily payable. The only obligation on a person who has committed a tort of negligence is to make good the loss or damage caused by the negligence. In the case of property damage, if the damage is rectified in a proper and reasonable manner, the cost of doing so (if any) is a private concern of the person required to make good.
In this case, however, at the request of the respondent the applicant agreed to provide monetary compensation rather than make good the loss itself.
The evidence regarding an appropriate amount of monetary compensation was scant.
As mentioned above, in February 2022, the applicant (via the email from Mr Anderson) offered $437 in lieu of making good the damage itself but was never forthcoming as to how it calculated that amount, save for a reference to the square metreage of the insulation, despite repeated requests from the respondent for that information. At the hearing on 17 May 2024, the applicant proposed a different discount and quantified it by different means.
For replacement of the six downlights, the applicant relied on a quote of $330 from Konnex Electrical for “supply and installation” of the downlights. Konnex Electrical provided the quote to the applicant in February 2022, but the applicant did not provide a copy of the quote to the Tribunal until 8 May 2024 and did not provide a copy to the respondent until the day of the hearing and only then at the Tribunal’s request.
To repaint the ceiling, the applicant had in mind its employee, Mr Kevin Walton. Mr Wijewardene, on behalf the applicant, explained that Mr Walton had prior experience in painting and that his hourly rate as an employee of the applicant is $40 per hour. By allowing four hours to repaint the ceiling, in the sense that Mr Walton would be repainting the ceiling rather than performing work for the applicant during that time, Mr Wijewardene allowed $160 (four hours at $40 per hour) by way of compensation in lieu of Mr Walton performing the work.
With this reasoning, the applicant submitted the Tribunal should allow $490 as compensation for the damage by way of a discount from the total amount that was owing under the contract prior to the respondent making her payments of $325.30 towards invoice 225672 and $321.20 towards invoice 225674, being a total of $646.50.
At hearing, the applicant submitted the total amount owing under the contract was $4,727 from which should be deducted the respondent’s payments of $1,989, $325.30, $321.20 and $374 totalling $1,717.70, less Mr Alexander’s proposed deduction of $437.50, to arrive at an amount owing of $1,280.20.
At hearing, the respondent said she quantified the amount she sought by way of compensation ($1,280) by reference to ‘over the phone’ quotes or at least estimates she obtained from electricians and painters to do the work. She did not provide any written evidence in support. That was, perhaps, understandable given she had no intention of engaging anyone to do the work and intended to have the defects addressed by others on site who were doing other forms of work.
Nevertheless, the respondent’s approach made it difficult if not impossible for the Tribunal to accept her viewpoint about appropriate compensation. For example, there was no evidence regarding her descriptions to the tradespersons of the work to be done; no evidence about who provided the quotes and no evidence about how many tradespersons provided oral quotes or estimates.
I was left to quantify an appropriate amount to allow by way of compensation for the damage, doing the best I could with the evidence I had.
Regarding replacement of the downlights, the best evidence was the quote from Konnex Electrical. I see no reason to doubt the quote, especially where replacing an existing downlight with a new downlight is materially no more difficult than replacing a light globe. To install a new downlight where there was, previously, no downlight at all is a very different task and may, perhaps, explain the respondent’s estimate of five hours labour at $80 per hour for work that was not applicable in this case. I allow $330 for replacement of the downlights.
Regarding repainting the ceiling, the applicant has the right to use who it chooses to do the work provided the person can reasonably do the work in a proper and competent manner. I had no evidence regarding Mr Walton’s prior experience as a painter and so no evidence as to whether the respondent would have been entitled to resist Mr Walton doing the work. It follows I had no evidence to reject the applicant’s proposal for Mr Walton to do the work or to reject an offer of compensation referenced to what it would cost the applicant to direct Mr Walton to do the work.
A remaining question is the estimated costs. Both parties contended a painter could do the work at $40 per hour but differed as to how many hours would be required to do the work. The respondent claimed she obtained a quote or estimate to paint the ceiling of $640 at $40 per hour. That equates to 16 hours work to paint the ceiling. The applicant proposed four hours to paint the ceiling.
I am not persuaded any competent painter would take 16 hours to paint a ceiling, even with two coats.
Doing the best I can, I accept the applicant’s estimate of four hours to paint the ceiling. Where the parties agreed on an hourly rate of $40 per hour, I apply that rate. Whilst that appears low for an independent painting contractor, it appears reasonable as an hourly rate paid by the applicant to Mr Walton as an employee of the applicant. I allow $160 for repainting the ceiling.
On the evidence, I accept the applicant’s submission that the discount or deduction the contract price should be $490.
Returning to the tax invoices, the applicant has already allowed a discount of $537 from the contract price. Where I have determined the discount should be $490, it follows that no further discount should be allowed.
The complication is that the appellant allowed only $437.50 by way of a deduction. Meanwhile, the actual deduction provided per the tax invoices was $537. Applying the stated amount owing under the contract ($4,727) and the discount actually provided ($537), I calculate the respondent owes the applicant a further $1,180.70 for work done under the contract.
I am not persuaded the respondent should also pay the applicant the filing fee ($166) or interest. The need for the applicant to bring this application was its own making. From the outset, the respondent was agreeing to pay the amount outstanding under the contract once the applicant provided quotes or evidence of some kind to quantify its proposed discount. For reasons not stated, the applicant never did so and never explained why it would not do so. It did not explain how its discount was quantified until the day of the hearing. Had the applicant explained its proposed discount and provided Konnex Electrical’s quote which, apparently, it had held since February 2022, more than likely the respondent would have paid the remaining amount owing at least two years ago and this application to the Tribunal would never have been necessary.

………………………………..

Presidential Member G McCarthy

Date of hearing:		17 May 2024
Applicant:		Mr K Wijewardene, authorised representative
Respondent:		In person