Keith v Wide Bay Stumping
[2011] QCAT 623
•2 December 2011
| CITATION: | Keith v Wide Bay Stumping [2011] QCAT 623 |
| PARTIES: | Mr Peter Keith (Applicant) |
| v | |
| Wide Bay Stumping (Respondent) |
| APPLICATION NUMBER: | MCDO989-11 |
| MATTER TYPE: | Other minor civil dispute matters |
| HEARING DATE: | 28 October 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Kate Buxton, Adjudicator |
| DELIVERED ON: | 2 December 2011 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | Application dismissed. |
| CATCHWORDS: | Claim for return of deposit – applicant purported to terminate the contract – wrongful termination – estimate of contractual losses |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Peter Keith |
| RESPONDENT: | Mr Page (by telephone) |
REASONS FOR DECISION
By application 989-11 Mr Keith, the applicant, who requested that Wide Bay Stumping, the respondent, undertake work at a property owned by him, sought to recover the deposit of $3,300.
Mr Keith claimed this amount as a debt on the basis that the work was not completed in accordance with the terms of the contract and, in particular, raised the following issues:
a)The scope of the work.
b)Inadequate customer service and delay.
c)Retention of the deposit in contravention of the Domestic Building Contracts Act 2000.
The respondent resisted the relief on the basis that the value of the works performed pursuant to the contract exceeded the deposit of $3,300 which the applicant has retained.
Scope of works
The key document setting out the terms of the contract between the parties is on Wide Bay Stumping letterhead, bearing the type written date 27 September 2010, and the heading “contract”. The first part of the document is a quote for the relevant restumping work in the sum of $10,960.00.
At the foot of the page is a paragraph setting out the terms upon which the parties would contract for the work, including for payment of the deposit, liability for costs incurred and retention of title over any goods supplied.
Mr Keith signed this paragraph on 9 October 2010 but stated that he did not appreciate that this amounted to entering into a contract for the works. Where the words of a written contract are clear, the subjective intent of one party is not to be preferred over the plain express meaning of those words.[1] The quoted amount of $10,960.00 is defined in the relevant paragraph as the “contract sum” and Mr Keith agreed by those words to pay (and, in fact, paid) a deposit said to be payable “on acceptance of this contract”.
[1]Byrnes v Kendle [2011] HCA 26 at [98] per Heydon and Crennan JJ; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179.
I accept, therefore, that on and from 9 October 2010 the applicant had contracted with the respondent to perform the works described in that document.
Mr Keith asserted that Wide Bay Stumping was to provide rails and palings as part of the scope of the contract. This is refuted by the respondent, who relied on the terms of the contract. It provided, expressly, for “removal of palings and rails” then provided “rails and palings to be fitted by others”.
Mr Keith sought to assert that these words should be interpreted as meaning that Wide Bay Stumping was to provide the rails and palings but those would be fitted by others. Wide Bay Stumping asserts an interpretation that both supply and installation of rails and palings was outside the scope of the contract. There is support for the latter approach in the document itself. The terms “supply and install” are used in relation to the posts but not in relation to the rails and palings. The contract therefore covers only the restumping and associated removal of palings, rails and debris. Mr Keith permitted Wide Bay Stumping to quote on the additional works of installing rails and palings immediately upon coming to the understanding that Wide Bay Stumping did not intend to supply the rails and palings within the scope of the contract. That conduct is also consistent with the respondent’s interpretation of the scope of works which, in this instance, I prefer.
[10] What then occurred was Mr Keith’s purported termination of the contract. If he was purporting to terminate the contract because of Wide Bay Stumping’s refusal to include the rails and palings within the scope of work then he was not entitled to do so for the reasons set out above. This leads to a consideration of the further issues raised in the application.
Customer Service and delay
[11] Mr Keith’s evidence was to the effect that, having emailed the contract documentation back to Wide Bay Stumping and paid the deposit on 11 October 2010 he did not hear back from Wide Bay Stumping until Mr Keith himself contacted Wide Bay Stumping on 15 December 2010 to enquire about a start date. His evidence is to the effect that Wide Bay Stumping did not return his call and, on 12 January 2011, he again called Wide Bay Stumping to enquire about the start date. He then gave evidence that, in February 2011, the rental manager of the relevant property informed him that Wide Bay Stumping had attended at the property. This is the way in which he became aware that Wide Bay Stumping had begun the work. It is not until 18 February 2011 that Mr Keith wrote to Wide Bay Stumping advising that he wished to withdraw from the contract and requested the return of the deposit. By that stage, Wide Bay Stumping had undertaken part of the work including attending at the site, measuring up for the posts to be installed and commencing the production of those posts, according to the evidence of Mr Page on behalf of Wide Bay Stumping.
[12] It is necessary, in order to give business efficacy to this contract, for a term to implied into it that the work be undertaken within a reasonable time. However, the only evidence as to the reasonableness of the time came from Mr Keith. He had certainly become disappointed and frustrated with the length of time between signing the contract and commencement of the works. However, the communication did not reach the point where he stipulated to Wide Bay Stumping what he considered to be a reasonable time and indicated that he considered he would have been entitled to terminate the contract if the works were not performed by that nominated reasonable time. In all the circumstances, the complaints about customer service are not elevated to a sufficient status to constitute a breach of contract and there is insufficient evidence as to delay to constitute a fundamental breach going to the root of the contract which would have entitled Mr Keith to terminate.
[13] In those circumstances, neither customer service nor delay provided any further basis upon which the applicant was entitled to terminate the contract with the respondent.
Legislative obligations
[14] This is a contract regulated by the Domestic Building Contracts Act 2000. Section 64 of that Act provides-
64 Deposits
(1) The building contractor under a regulated contract must not, before starting to provide the contracted services, demand or receive a deposit under the contract of more than—
(a) if the contract price is equal to or more than the set amount—5% of the contract price; or
(b) if the contract price is less than the set amount—10% of the contract price.
Maximum penalty—100 penalty units.
[15] In this instance, the contract price was less than the set amount and a deposit of no more than 10% could have been requested within the terms of section 64 of the Domestic Building Contracts Act 2000. The significance of requesting and receiving a higher deposit is that the respondent left itself liable to the payment of a penalty. The evidence in these proceedings is to the effect that the respondent has in fact been subjected to a penalty as a result of this contravention.
[16] However the Domestic Building Contracts Act 2000 does not provide that the contract is unenforceable or the deposit returnable simply because it contravenes section 64 by being charged in excess of 10% of the contract price. These provisions do not, therefore, provide any additional basis upon which the applicant is entitled to retain the deposit of $3,300.00.
Conclusions
[17] At the time Mr Keith purported to terminate the contract, he has not demonstrated to this Tribunal that Wide Bay Stumping was in breach of its contractual obligations or that he was entitled to terminate. In those circumstances his termination is wrongful and it follows that he is not automatically entitled to the return of the deposit. Equally, the respondent is not automatically entitled to retain the deposit. The respondent is entitled to retain the amount properly attributable to its contractual loss. The evidence from Wide Bay Stumping (through Mr Page) in relation to this loss was sketchy. He gave evidence that he had attended at the site and that labour had been expended both in measuring up for the job and in commencing to produce the relevant stumps. However, whilst he also expressed the fact that there was some lost materials involved in the preparation of the work he also gave evidence that he was able to use (but not all) of those materials. He estimated that his losses would have been in excess of the $3,300.00 deposit but did not provide specific details. He has brought no counter claim for damages in excess of that amount and, to date, retains the deposit.
[18] In all the circumstances, I am satisfied that the retention of the deposit is a reasonable estimate of the losses and expenses to which the respondent has been put in commencing to fulfil its contractual obligations. It would of course be necessary, in assessing that loss, to take into account the benefit of any materials retained and reused by the respondent. However, in the absence of direct and detailed evidence and taking into account the fact that some genuine pre-estimate of this loss was likely undertaken in arriving at the figure of 30% when the contract was entered into, I am satisfied that the figure of $3,300.00 is a reasonable estimate of these contractual losses. It is therefore appropriate that the parties remain in their current positions that is, that the applicant is not entitled to the return of the deposit and the respondent is entitled to retain that deposit for the losses it has suffered as a result of the applicant’s breach of contract.
[19] The only order I need make in these proceedings is to dismiss the application.