JW & Mm Haylock Pty Ltd v Bakker & Kramer
[2014] QCAT 120
| CITATION: | JW & MM Haylock Pty Ltd v Bakker & Kramer [2014] QCAT 120 |
| PARTIES: | JW & MM Haylock Pty Ltd (Applicant) |
| V | |
| Mr Jan Bakker and Ms Anna Kramer (Respondent) |
| APPLICATION NUMBER: | BDL266-11 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 28 January 2014 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Allen |
| DELIVERED ON: | 4 April 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Mr Bakker and Ms Kramer are ordered to pay to JW & MM Haylock Pty Ltd the amount of $5,149.75 within 14 days of today. |
| CATCHWORDS: | BUILDING DISPUTE – swimming pool - wrongful termination of contract – whether subject to Anshun Estoppel - calculation of damages Queensland Building and Construction Commission Act 1991 (Qld) s 77 Ms Anna Kramer and Anor v JW & MM Haylock Pty Ltd [2011] QCAT 296 Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Wayne Haylock, director appeared for JW & MM Haylock Pty Ltd |
| RESPONDENT: | Mr Bakker and Ms Kramer were self-represented |
REASONS FOR DECISION
Introduction
JW & MM Haylock Pty Ltd trades as Burleigh Pools as a pool builder and was engaged by Mr Bakker and Ms Kramer to build a pool on their land at 10 Barton Street, Reedy Creek for the amount of $24,890.00 under a contract dated 1 September 2007[1]. Mr Bakker and Ms Kramer terminated the contract when the pool shell was completed due to their belief that it was at an incorrect height. They made application to the Tribunal claiming that Burleigh Pools failed to carry out the works in an appropriate and skilful way and sought damages in the amount of $21,400.05 for the money paid to Burleigh Pools of $17,421.00 and the amount of $3,983.05 paid to have the pool removed. That application[2] was dismissed on the ground that Mr Bakker and Ms Kramer were not entitled to terminate the contract.
[1]Exhibit 7.
[2]Ms Anna Kramer and Anor v JW & MM Haylock Pty Ltd [2011] QCAT 296.
Burleigh Pools made this application seeking damages due to Mr Bakker and Ms Kramer not being entitled to terminate the contract. The claim was for:-
a) Excavation
Cancellation of excavation due to
owners not showing up
(incl. GST plus 20%) $1,161.00
Extra rock excavation as invoiced
(incl. GST plus 20%) 6,597.00
Less contract allowance 2,000.00
$5,758.00
Interest from 14/11/07 to 10/08/12 6,388.00
Sub-Total $12,146.00
b) Loss of profit due to cancellation
of contract 1,489.00 Interest from 23/11/07 to 10/08/12 1,628.00
Sub-total $ 3,117.00
c)Filing costs $ 250.00
Total $15,513.00
ANSHUN ESTOPPEL
Mr Bakker and Ms Kramer have raised the question of whether an Anshun Estoppel[3] applies in relation to the application made by Burleigh Pools on the basis that the claim for damages should have been made at the time of the first application to the Tribunal. The Tribunal notes that Burleigh Pools was the respondent in that application and the decision was made in their favour. While Burleigh Pools could have indeed made a counter application against Mr Bakker and Ms Kramer at the time of the original application the doctrine of Anshun Estoppel does not require that it did so[4]. There was that option and if there had been a counter application made there would have been no filing fee payable by Burleigh Pools and any interest on damages to be awarded to Burleigh Pools would have been calculated to the date of the original decision on 28 June 2011. The Tribunal considers that on that basis the claim for filing costs should not be allowed and interest will be limited to the period between the date of wrongful termination and 28 June 2011.
[3]Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45.
[4]Ibid at para 27.
BURLEIGH POOLS INVOICES
Burleigh Pools issued the following GST inclusive tax invoices to Mr Bakker and Ms Kramer which were paid:-
a) No. 212840 dated 1/9/07 for Deposit $1,244.00
b) No. 214464 dated 11/7/08 for preliminary agreement 1,244.00
c) No. 212693 dated 4/10/07 for 60% of contract price 14,933.00
Total $17,421.00
A further tax invoice no. 213142 was issued on 5 November 2007[5] after the parties fell into dispute in the amount of $5,788 which was amended to $5,758 in respect of the first excavation which was called off and the additional excavation. Burleigh Pools has provided sub-contractor invoices to support the amounts claimed which are accepted by the Tribunal.
[5]Exhibit 2.
BURLEIGH POOLS EXTRA EXCAVATION COSTS
The amount of $1,161.00 as mentioned above represents the amount claimed in respect of the first time Burleigh Pools attended at the site on 4 October 2007 with its sub-contractors to mark out the pool area. Mr Bakker had been advised that he was required to be there on 26 September 2007 and a follow up call had been made on 3 October 2007. At that time Mr Bakker said he would not be able to attend and a representative of his builder would attend to sign the mark out form. The builder’s representative did attend but he was not authorised by the building company to sign the mark out form on behalf on Mr Bakker and Ms Kramer and so the pool builder and sub-contractor were not able to begin the work.
Clause 6 of the contract general conditions contains the requirement for Mr Bakker and Ms Kramer to identify the site, boundaries to the site and the location of the works. Clearly Burleigh Pools has incurred costs as a result of the agent for Mr Bakker and Ms Kramer not having the authority to sign the mark out form and the Tribunal is satisfied that as the costs have been incurred as a result of the failure of Mr Bakker and M Kramer to ether attend themselves or have an authorised attend at site on 4 October 2007 to sign the mark out form they are liable for the costs incurred by Burleigh Pools in the amount of $1,161.00.
The next claim was in respect of extra rock excavation. The contract provided for a provisional sum of $2,000.00 for rock excavation and cartage. Clause 13(3) of the contract deals with provisional sums and states that “if the actual cost for a Provisional Sum is greater than the amount allowed, the excess amount together with the contractor’s margin on the excess amount is to be added to the contract price. Burleigh Pools provided invoices in respect of the excavation works which total when GST and the contractors margin is added $6,597.00. After allowing for the provisional sum of $2,000.00 an additional amount of $4,597.00 is payable.
BURLEIGH POOLS LOSS OF PROFIT
There is also a claim for loss of profit. The Tribunal notes that the purported termination by Mr Bakker and Ms Kramer by letter from their solicitors, Arcuri Lawyers of 23 November was wrongful as previously determined. Where Mr Bakker and Ms Kramer are in substantial default under the contract Burleigh Pools had a right to terminate under clause 16 of the general conditions of the contract. In which case Burleigh Pools would be entitled to all losses and expenses arising form Mr Bakker and Ms Kramer’s default.
Clearly the profit which would have been achieved if the contract had have been completed is part of the losses incurred by Burleigh Pools. The contract price was $24,890.00 and Burleigh Pools have estimated that their total profit would have been $4,156.00. This was based on the profit made on 8 other similar jobs[6]. The average profit based on this sample was 16% and if that figure is applied to the contract price here the expected profit would be $3,982.40. As the contract price here is known then the average percentage for profit should be applied to that price. Burleigh Pools provided the following summary in their claim for profit:-
a) Payment received $17,421.00
b) Extra excavation invoice outstanding 5,758.00
$23,179.00
c) Less costs to date (GST inclusive 20,512.00
d) Profit to date $2,667.00
e) Expected profit $4,156.00
f) Less profit to date 2,667.00
Profit lost $1,489.00
[6]Exhibit 3.
CALCULATION OF DAMGES
When the total costs of the pool are considered, a printout was provided by Burleigh Pools, it is clear that this includes the amounts for the extra excavation costs of $5,758.00 and an amount of $4,525 GST exclusive for overheads which Mr Haylock at the hearing confirmed was simply a global amount representing 20% of the contract total. When the amount of $4,977.50 (overheads plus GST) is taken out the total costs for the work done on the pool are $15,534.50. If a contractor’s margin of 20% and 10% for GST is added that then the amount for costs to date is $20,505.54.
This includes the amount for the extra excavation. There is no reason why that amount should be included twice as it is above in item a) and then as part of item c). The amount that is unpaid is then $20,505.54 less $17,421.00 which equals $3,084.54. This reduced amount takes account of Mr Bakker and Ms Kramer’s concern that they had paid a large portion of the initial contract amount and they were being asked to pay substantially more even though the shell of the pool only had been built.
The amount for loss of profit based on 16% of the total contract price of $24,890.00 would be $3,982.40. When 16% is applied to the costs to date the amount of profit that has already been accounted for is $3,280.88. The amount of lost profit is then $701.51.
The total amount of damages that Burleigh Pools is entitled to is then $3,084.54 plus $701.51 which is $3,786.05. There is also an entitlement to interest[7]. Burleigh Pools claimed interest on the basis of the clause 10(5) of the contract general conditions, which is 10% per annum plus the relevant Reserve Bank of Australia interest rate for 90-day bank bills. This interest rate applies in respect of overdue progress payments. The entitlement here does not rest on an overdue progress payment as the amount claimed in the progress payment is incorrect. The regulations specify that interest is payable at the rate specified under the contract, as agreed between the parties or 10%[8]. There was no agreement between the parties so the rate of 10% will apply. Interest will be calculated from the date of the purported termination to the date of the decision in the first application.
[7]Queensland Building and Construction Commission Act 1991 (Qld) ss 77(2)(c).
[8]Queensland Building and Construction Commission Regulations 2003 (Qld) s 34B(1).
That is the period from 23 November 2007 to 28 June 2011 as follows:-
a) 23/11/07 to 22/11/08 $3,786.05 x 10% = $378.60
b) 23/11/08 to 22/11/09 $3,786.05 x 10% = $378.60
c) 23/11/09 to 22/11/10 $3,786.05 x 10% = $378.60
d) 23/11/10 to 28/6/11 $3,786/05 x 218/365 x 10% = $227.90
e) Total $1,363.70
ORDER
The amount payable is then $3,786.05 in damages plus $1,363.70 a total of $5,149.75. Mr Bakker and Ms Kramer are ordered to pay to Burleigh Pools the amount of $5,149.75 within 14 days of today.
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