Lewis Constructions Pty Ltd v Pollock
[2012] QCAT 236
•13 June, 2012
| CITATION: | Lewis Constructions Pty Ltd v Pollock and Anor [2012] QCAT 236 |
| PARTIES: | Lewis Constructions Pty Ltd |
| v | |
| Andrew Pollock Belinda Pollock |
| APPLICATION NUMBER: | BD429-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 5, 6, 9 October, 2010; 10 December, 2010; 8, 9, 10 August, 2011; and 7 November, 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Ann Fitzpatrick, Member |
| DELIVERED ON: | 13 June, 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] The respondents to pay the applicant the sum of $195,095.14, inclusive of GST, within 21 days of the date of this decision. [2] The applicant and the respondents to each file and serve submissions in writing in relation to costs by 21 June, 2012 and each to file and serve any submissions in reply by 29 June, 2012. |
| CATCHWORDS: | Restitution – quantum meruit Domestic Building Contracts Act 2000, s 30 Ahearn v Crouch [2007] QCCTB 64 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Lewis Constructions Pty Ltd represented by Mr Scott McConnel of Counsel, on 5, 6 October, 2010; represented by Mr Bill Walsh of Counsel on 9, 10 December, 2010; 8, 9, 10 August, 2011 and 7 November, 2011, instructed by Crouch and Lyndon, Solicitors |
| RESPONDENT: | Mr Andrew Pollock and Mrs Belinda Pollock represented by Mr Greg Thomson of Counsel on 5, 6 October, 2010 and 9, 10 December, 2010; represented by Mr Declan Kissane of Counsel on 8, 9, 10 August, 2011 and 7 November, 2011, instructed by Sawford Lawyers |
REASONS FOR DECISION
Background
This matter was commenced by Lewis Constructions Pty Ltd in the former Commercial and Consumer Tribunal on 17 September, 2009.
The hearing occurred over a period of 8 days with adjournments and significant delays incurred as a result of re-pleading, the addition of further items of counter-application by the respondents, the need for further expert evidence and the serious illness of an expert.
The applicant is a licensed building contractor. Mr Ian Lewis a Director of the applicant gave evidence on behalf of the applicant.
For some years prior to undertaking construction work for the respondents, the applicant engaged businesses conducted by the respondents or companies associated with them to perform bookkeeping work and taxation work for it. The bookkeeping work was managed by Mrs Pollock and involved receipt by her business of subcontractor and supplier invoices and timesheets of employees which were reconciled and paid by her business on behalf of Lewis Constructions from its bank account.
The Pollocks asked Lewis Constructions to renovate their home at 168 Oriel Road, Ascot (the Work).
The Pollocks intended to fund 100% of the cost of the renovation through borrowings from the ANZ bank.
Lewis Constructions gave an initial handwritten estimate for the cost of the renovation, in the sum of $628,000.00, based on conceptual drawings prepared by an architectural practice, Robert Eccles Pty Ltd. A document was prepared by Mrs Pollock based on the initial estimate, and emailed to Ian Lewis on 17 October, 2007 recording a brief description of the work, the estimated cost of the work and an estimated time frame for the work, as follows:
STAGE
BRIEF DESCRIPTION
ESTIMATED COST
ESTIMATED TIMEFRAME
1
Lift House and Restump
$80,000.00
4 weeks
2
Concrete Slab, Waste Plumbing and Stormwater
$40,000.00
3
Downstairs External Walls, Doors & Windows, including Front and Internal Stairs and Back Terrace
$130,000.00
8 weeks
4
Internal Walls Downstairs, Electricity & Light Fittings
$83,000.00
4 weeks
5
Fitout Downstairs Areas – Bathroom
Laundry, bar, Kitchen & Home Theatre
$60,000.00
4 weeks
6
Fitout Upstairs- Electrical Refit, Exterior Decks plus Bathroom Renovation
$70,000.00
4 weeks
7
Renovations to Master Bedroom Including WIR and Ensuite
$70,000.00
4 weeks
8
Landscaping & Pool Fencing
$60,000.00
4 weeks
9
Painting
$35,000.00
6 weeks
TOTAL
$628,000.00
The parties intended that the estimate be transposed to Lewis Constructions Pty Ltd letterhead and provided to the Pollocks’ financier, to enable funds to be borrowed to finance the renovation project. That was done in October, 2007, with a notation that the estimates do not take into account work for building installation of the kitchen or the wiring and fit-out of the movie room. “These costs will be paid directly by the client”. This document was signed by Mr Lewis.
Another version of the “Estimate” was prepared by the Pollocks in approximately January, 2008. It appears as Exhibit “D” to Exhibit 2, Statement of Ian Lewis, filed 1 October, 2010. The document does not bear the notation excluding kitchen and movie room costs. It is addressed to the Pollocks and is signed by Ian Lewis.
In May, 2008 a revised estimate was prepared by Mr Pollock in consultation with Mr Lewis for presentation to the bank financing the project. Mr Lewis signed the document, but asserts that both parties knew that the revised estimate of $469,207 for the project was inaccurate as it was in any event less than the cost of the works completed to 30 April, 2008.
No document setting out the scope of work and the cost of the work was signed by both Lewis Constructions Pty Ltd and Mr and Mrs Pollock.
Mr Lewis gave evidence that based on a conversation with Mr Pollock he understood the Pollocks wished to have flexibility in relation to the design, layout, fittings and finishes associated with the renovation as it progressed. Mr Pollock gave evidence that this was his intention. Lewis Constructions proceeded to work on a costs plus 10% basis for the project given the uncertainty as to what would ultimately be involved in the project. That was not, however, the Pollocks’ understanding of the nature of their arrangement with Lewis Constructions.
It does not appear that any form of contract was discussed between the parties at the time of commencement of the work. The Pollocks gave evidence that they considered they had a fixed price contract based on what they called the “quotation” given by Lewis Constructions.
Lewis Constructions was provided with Preliminary Drawings prepared by Robert Eccles Pty Ltd. Final plans dated 9 November, 2007 were approved on 11 December, 2007. Work commenced on 1 December, 2007 whilst the Pollock family was overseas.
Upon the family’s return they resided in the house during the course of the works from 8 January, 2008.
Consistent with Lewis Constructions’ arrangement with Mrs Pollock for other projects, she or her staff prepared job reports listing all subcontractor charges, material costs, equipment hire and labour in relation to the Works and prepared invoices directed to herself and Mr Pollock based upon the invoices and timesheets provided by Lewis Constructions in relation to the Pollocks’ renovation project.
On 2 February, 2008, Mrs Pollock sent Lewis Constructions a copy of the first invoice she prepared on the project, for work undertaken during the period 1 December, 2007 to 31 December, 2007. The invoice covered materials and supplies, subcontractors and labour plus GST in an amount of $86,833.85. Mrs Pollock also sent a draft job report for January, 2008 headed “Reimbursable expenses”.
On 8 February, 2008 the December, 2007 invoice was paid.
On 18 March, 2008, the January, 2008 invoice, prepared by Mrs Pollock, in an amount of $104,309.91 for subcontractors, materials, labour and GST was paid.
On 13 May, 2008 the February, 2008 invoice, prepared by Mrs Pollock, in an amount of $122,869.19 for subcontractors, materials, labour, equipment hire and GST was paid.
On 26 May, 2008 Mr Pollack advised Mr Lewis that they could not afford to keep paying and instructed him to cease work on Friday, 30 May, 2008. All tools and equipment were removed from site.
On 31 May, 2008 Mr Pollock asked for 2 employees to remain on site to continue working. Lewis Constructions agreed. A carpenter and an apprentice resumed work on site on 2 June, 2008.
On 4 June, 2008 a payment of $140,965 was paid for the March, 2008 invoice covering material and supplies, subcontractors, labour, equipment hire and GST. The payment also covered materials and supplies, subcontractors, equipment hire and GST for April, 2008. Labour costs for April were omitted from the invoice.
That was the last payment made to Lewis Constructions.
Work continued to be performed on site by the carpenter and apprentice until 26 September, 2008 when Mr Pollock requested that work cease. All tools, materials and scaffolds were removed from the site.
On 4 August, 2008, Mrs Pollock forwarded a copy of a tax invoice to herself and Mr Pollock for materials, supplies, subcontractors and GST for the months of May and June, 2008. No labour was included.
Following a request from Mrs Lewis, Mrs Pollock sent the following documents to Lewis Constructions:
(a) Job Summary recording:
·Payments from the bank – $454,972.02;
·Total materials, subcontractors, equipment hire and labour from December, 2007 to October, 2008 – $740,008.65.
(The covering email from Mrs Pollack dated 26 November, 2008, Attachment Z to Mr Lewis’ statement, filed 29 April, 2010, states “Please note that the summary does note (sic) include any costs that we have paid directly eg. Electrical, Kitchen, Movie Room, Painting, Bathroom fittings, Laundry, Landscape – these costs were approximately $175,000.00).
(b) MYOB/Excel Activity Slip (Job Detail) recording:
·Labour, supplier, subcontractor and equipment hire for July, 2008;
·Supplier, subcontractor and labour for August, 2008;
·Labour, supplier and subcontractor for September, 2008; and
·Materials for October, 2008.
No invoices to the Pollocks were provided for the months following June, 2008.
On 28 December, 2008, Lewis Constructions forwarded invoices it prepared, to the Pollocks for labour, subcontractors, suppliers, materials, equipment hire plus 10% for overheads for the months of April, May, June, July, August, September, October, and November, 2009. The total amount claimed as unpaid was $369,078.63. Lewis Constructions sought to apply interest at 8.89% for the period from July, 2008 and at 6.09% for the period from December, 2008, being the rate said to be paid by it on the outstanding money. Interest totalled $11,772.00 at that time.
Lewis Constructions provided a table to the Pollocks on 28 December, 2008 recording a total job cost of $824,050.65, an amount paid of $454,972.02, and an accumulated amount unpaid (including interest) of $380,850.63.
Lewis Constructions assert that reasons for the total cost of the job being higher than the original estimate include the number and cost of variations and additions to the original Plans. The Amended Statement of Claim filed 21 September, 2010 lists the following additional work:
· soil testing revealing Class P soil with the need for deeper stump depth, further excavation, further reinforcement, further concreting and further material and labour beyond that provided for in the Plans;
· raising the dwelling to the highest possible height, with the need for council approval, upgraded steel stumps, upgraded framing, further internal lining, further external cladding and further general materials and labour, not provided for in the Plans;
· changing the planned downstairs bathroom to two smaller bathrooms, with the need for an extra slab, structural alterations, waterproofing and alterations to the front deck, further materials and labour not provided for in the Plans;
· increasing the size of the garage and laundry with the need for extra structural work, more complicated finishing work and further general materials and labour, not provided for in the Plans;
· installing the 5,200 litre water tank underground and next to the dining room rather than above ground. This additional work resulted in the need for additional piers to the dining room footings as well as additional plumbing materials and labour, and further general materials and labour, not provided for in the Plans;
· enlarging several downstairs windows, removing theatre room windows, all downstairs French doors widened from 1.2 metres to 1.7 metres, fitted with 40mm highlights and 400mm sidelights. The additional work resulted in the need for further windows and materials, the installation of a steel portal frame system to provide adequate bracing, and further general materials and labour, which was not provided for in the Plans;
· installing an external laundry door with a circular glass insert and detailed mouldings. Changing the front door to a more expensive design with a curved highlight and a truncated sidelight and detailed mouldings. This additional work resulted in the need for more expensive doors and fittings and further general materials and labour, which was not provided for in the Plans;
· creating a new stormwater connection directly to the stormwater main pipe in the street. Council permits were required together with traffic control, hiring temporary road plates, carrying out further excavation and plumbing, repairing the road after the works and further general materials and labour not provided for in the Plans;
· raising the height of the garage door from 2.2 metres to 2.8 metres and upgrading to a larger panel lift door. This resulted in the need for purchasing a larger garage door and further labour, not provided for in the Plans;
· laying stringy bark flooring throughout on battens (including throughout the garage and storage room). To necessitate this, a ramp needed to be constructed and waterproofing had to be applied. This additional work resulted in the need for the purchasing of stringy bark flooring and waterproofing materials, which was not provided for in the Plans;
· lining the walls with quality hoop pine VJ boards, resulting in the purchase of further hoop pine VJ boards, added steel framing, and further general materials and labour, not provided for in the Plans;
· constructing an extra wall to enclose the storage room, which could be accessed by a solid core cavity slider door fitted with a brass deadlock. Insulating the lower ceilings and the movie room with high quality lining with a density of 32 kg per cubic metre. All external and internal doors be changed to solid core, and that an extra external door be installed;
· fitting all internal doors with a highlight above the frame, with solid brass hinges and expensive art deco style locks. Fitting a tall arched window in the stairwell landing. Installing two layers of sound check plaster lining, acoustic columns and doors, bulk heads, raised seating and a stage in the theatre room. Installing acoustic insulation in the movie room;
· installing high grade 32 kg per cubic metre acoustic insulation throughout the ceilings, as well as acoustic/thermal insulation in all external walls. Lining the storage room, garage, laundry and pantry with heavy 18 ml thickness VJ board sheeting (double thickness and double weight) and lining the living dining and bar area walls with hoop pine VJ boards;
· changing the layout of the bar and wine cellar (several times) which resulted in the extra costs of further plumbing and framing;
· installing all downstairs windows with deeper reveals to accommodate possible future shutters, which required extensive battening to increase the thickness of the walls;
· redesigning the master bedroom to fit a full width bank of casement windows on the eastern elevation, which resulted in the cost of installing two steel posts and a steel portal beam frame. This variation was subsequently withdrawn, despite the fact that the variation had already been carried out;
· enlarging the bedroom and ensuite and reconfiguring the ensuite several times. Dividing the upstairs family room into an office with walk-in robe. Removing a wall in the initial design from the ensuite and bedroom area, which required the installation of additional ceiling beams as well as heavy bracing within all walls. Installing a curved top bathroom window.
All the additional work is said by Lewis Constructions to have resulted in the need for purchasing further materials and the provision of further labour, which was not provided for in the Plans.
The Pollocks do not deny that this work was done. However, they raise a number of issues, including variously, that the work was not additional to the original scope of work, that it was not requested by them or that it was necessitated by errors on the part of Lewis Constructions.
The Applicant’s claim
Lewis Constructions claims for money owed pursuant to an oral agreement, pursuant to which renovation work was carried out at the Pollocks’ request. Restitution is sought on the basis of a quantum meruit, in the sum of $238,942 said to be the actual unpaid cost of material and labour provided plus a margin of 10%, representing fair and just compensation for the benefit or enrichment actually or constructively accepted by the Pollocks. Interest is also claimed.
Lewis Constructions relies on the expert report of Mr Michael Davies, quantity surveyor who valued the work performed at $630,831.00 plus GST totalling $693,914.10. Taking into account the sum of $454,972.00 paid by the Pollocks, a balance of $238,942.10, inclusive of GST, is said to be owing.
The Respondents’ response and counter-application
The Pollocks in their closing submissions say that it is common ground between the parties that by virtue of the operation of section 30 of the Domestic Building Contracts Act 2000 (DBCA), any contract between the parties which is not in writing and signed by the parties is unenforceable. As a consequence they agree that any entitlement Lewis Constructions may have must arise by way of a quantum meruit.
The Pollocks rely upon the report of their expert Mr Paul Haskard who says that the reasonable value of the works is $365,033.80. Mr Haskard has said in describing his methodology that all his estimates are inclusive of GST. His estimate is calculated as follows:
(a) $584,336.18 representing the reasonable price of the work to complete the approved building plans ($478,528,83) plus the reasonable price of additional works outside of the scope of the approved plans ($105,807.35);
(b) Less $143,097.13 representing the cost of building work omitted from the approved plans;
(c) Less $66,669.32 representing the cost of Works which were incomplete;
(d) Less $9,530.93 representing the cost to rectify defective items.
The Pollocks say that they have overpaid Lewis Constructions in the sum of $89,933.21 in the mistaken belief that the agreement between the parties was enforceable and that Lewis Constructions was entitled to the payment of $454,972.00 instead of the lesser sum of $365,038.30 being the reasonable value of the works completed by Lewis Constructions.
They further claim the following three amounts by way of counterclaim:
(a) $8,984.31 for damages resulting from Lewis Constructions’ negligence, being the cost to rectify the drainage system in the north western corner of their property.
(b) $54,000.00 for damages resulting from Lewis Constructions’ negligence, being the cost to rectify 23 steel columns which are alleged to be corroding.
(c) $20,711.90 damages for Lewis Constructions’ negligence relating to the costs of removing asbestos sheeting damaged by Lewis Constructions during the course of the works.
Ineffective contract
I find that as submitted by the parties the arrangement entered into between the parties was a regulated contract pursuant to the DBCA to carry out domestic building work for a contract price more than the regulated amount. Accordingly, Part 3 Division 1 of the DBCA applies, including section 30 which provides:
“A regulated contract has effect only if it is signed by the building contractor and building owner (or authorised agents).”
Accordingly, I find that the arrangement entered into between the parties is of no effect.
Taking into account the evidence of Mr Pollock that he intended to have flexibility to determine layout, fittings and finishes as the works proceeded I accept the evidence of Mr Lewis that he was prepared to perform the works on that basis and that as a result he intended the arrangement between the parties to be on the basis of a cost plus contract. Although that may have been Mr Lewis’ intention I make no finding as to whether that was in fact the type of contract entered. Lewis Constructions is not seeking to enforce a cost plus contract and has not made any application pursuant to section 55(4) of the DBCA.
I make no finding as to whether a fixed price contract was entered as contended for by the Pollocks.
I make no findings in relation to these matters because it is unnecessary to do so in light of section 30 of the DBCA. Neither arrangement would be of any effect without the necessary writing and signatures.
Respondents’ submissions in relation to quantum meruit claim
The Pollocks in their Amended Defence and Counter-application filed 28 March, 2011 and in their closing submissions do not deny that they requested the work, labour and materials, the subject of the claim, to be performed and supplied, except in 3 instances discussed below. They do not deny that the work and labour was performed or the materials were supplied.
The Pollocks in their submissions in reply admit that there can be no dispute they have received a benefit from the works undertaken by Lewis Constructions.
They say that the true controversy between the parties is:
· was there a free acceptance of the benefit of all of the works provided; and
· what is the reasonable price for the works provided.
The Pollocks say that they could not have provided “free acceptance” with respect to works outside the scope of the approved plans unless they expressly requested those works. They say that it is incumbent upon Lewis Constructions to show that those additional works were requested by the Pollocks.
Their submissions give 3 “examples” where the Pollocks say that there has been no free acceptance. There are no other particulars given in the pleadings or ventilated at the hearing with respect to other specific items of work or materials. The examples given are:
· they did not request a steel portal frame and that it was unnecessary for a steel portal frame to be used in the upper floor of the house;
· they did not request the use of ply bracing to provide security to the premises;
· the provision of a water tank said to be required for local law purposes was not in fact required by law.
The Pollocks submit that in each of these examples there has not been “free acceptance” of those works because the Pollocks deferred to the purported expertise of Lewis Constructions, yet later found by reference to the expert opinion of Mr Haskard and Mr Van de Hoef that the works were unnecessary.
The Pollocks rely on the decision of Dowsett J in Balfour Beatty Power Construction Australia Pty Ltd v Kidston Goldmines Ltd[i] to the effect that in calculating a reasonable price, it is permissible to show what the actual cost is of the work in terms of hours spent and materials supplied. The Pollocks’ expert Mr Haskard employed a methodology which relied upon the actual costs incurred in performance of the work.
Applicant’s submissions in relation to quantum meruit claim
In view of the Pollocks’ acknowledgement that they requested performance of the renovation work, agreement that they received a benefit from the work and that Lewis Constructions is entitled to some payment for the work on the basis of a quantum meruit, it is not necessary to canvass in detail the submissions made by Lewis Constructions.
However, I note the submission that even if the Pollocks did not expressly request the work, a benefit can be demonstrated in a range of circumstances where no request has been made (Monks v Poynice Pty Ltd & Anor[ii] relied upon).
Lewis Constructions says that the work was performed with the knowledge of the Pollocks who accepted the work. They paid a significant amount of the costs incurred by Lewis Constructions and knew the work was not performed gratuitously. At no time was the work rejected. It says the Pollocks occupied the house spending time on site each day, thus accepting the benefit of the work. No submissions are made in relation to the 3 examples given by the Pollocks of there having been no free acceptance of the work because there was no request for the work in question.
Alternatively, it is said that the Pollocks have received an incontrovertible benefit at the expense of Lewis Constructions and to not reimburse Lewis Constructions for those costs would be unjust and unconscionable.
Lewis Constructions submit that it is entitled to the amount which has reasonably and actually been incurred or outlaid including any claim for a reasonable margin (Ahearn v Crouch[iii] relied upon).
Analysis of parties’ submissions and legal principles relevant to a quantum meruit claim
I accept the submissions of Lewis Constructions with respect to the principle expressed in Pavey & Matthews v Paul[iv] that
“An action on a quantum meruit … rests, not on implied contract, but on a claim to restitution or one based on unjust enrichment, arising from the respondent’s acceptance of the benefits accruing to the respondent from the appellant’s performances of the unenforceable oral contract…”
I would add that the starting point is to determine if the facts of the case give rise to an established cause of action, such as a claim for work and labour done and materials supplied. Lewis Constructions’ claim is cast as a claim for work and labour done and materials supplied. The High Court in Lumbers v W Cook Builders Pty Ltd (in liq)[v], held that a request for work and labour is an essential element of the claim and the concept of unjust enrichment as set out in Pavey’s case would not enable restitution without evidence of an express or implied request for the work and labour from the applicant. Accordingly I do not accept the submissions of Lewis Constructions that it is not necessary to establish a request for the work.
I find on basis of the evidence of Mr and Mrs Pollock that they asked Lewis Constructions to undertake the renovation work, that there has been a sufficient request for the work, labour and materials to found Lewis Constructions’ claim against them. I will deal below with the 3 items raised by the Pollocks in their submissions in reply, to determine whether there has been a request for the work in question.
Within the framework of a cause of action, such as an action for work and labour done, one may look to the elements of a claim in restitution if, as in this case, the contract is unenforceable. The elements are:
(a) the respondent must receive a benefit;
(b) the benefit must be at the applicant’s expense; and
(c) the benefit must be unjustified.[vi]
As to the first point, a benefit may be demonstrated on the facts of a case if a party has requested work, labour and materials, the party has freely accepted the work, labour and materials or the party has obtained an incontrovertible benefit from the work, labour and materials.[vii] I find on the basis of the Pollocks’ admission in their submissions in reply that they have received a benefit from the work performed by Lewis Constructions.
As to the second point, in this case the contractual relationship is between Lewis Constructions and the Pollocks, the work the subject of the claim was performed by Lewis Constructions at its cost. On the facts of this case there would not appear to be any need to explore this second element further.
The final element requires the existence of a factor that makes it unjust for the Pollocks to retain a benefit. It is not sufficient to merely allege that the retention of the benefit is unfair or unconscionable. The unjust factor alleged by the applicant must be a cause of the Pollocks’ receipt of the benefit.[viii] Lewis Constructions pleads a benefit actually or constructively accepted by the Pollocks.
Free acceptance is a specific ground or unjust factor identified by the Australian courts[ix]. Justice Warren in Andrew Shelton & Co Pty Ltd v Alpha Healthcare Ltd[x] provides a detailed analysis of restitution and the necessary elements, including whether or not free acceptance may serve a dual function within a claim for restitution based on unjust enrichment. That is, both as the measure of the enrichment and as the ground of restitution. Her Honour quoted from Goff and Jones, The Law of Restitution (5th ed) (1998):
“A defendant, who is not contractually bound, may have benefited from services rendered in circumstances in which the court holds him liable to pay for them. Such will be the case if he freely accepts the services. In our view, he will be held to have benefited from the services rendered if he, as a reasonable man, should have known that the plaintiff who rendered the services expected to be paid for them, and yet he did not take a reasonable opportunity open to him to reject the proffered services. Moreover, in such a case, he cannot deny that he has been unjustly enriched.” (Footnotes omitted)”.
Her Honour noted that the New South Wales Court of Appeal adopted the concept of benefit and free acceptance in Damberg v Damberg[xi], specifically citing the relevant extracts of Goff and Jones with respect to benefit and free acceptance in the context of a quantum meruit claim.
In relation to the Work, other than the 3 items referred to by the Pollocks, I find on the basis of the Pollocks’ acknowledgement of a request to perform the work and the fact that they have not submitted the elements of free acceptance are not made out, that they have freely accepted the renovation work performed by Lewis Constructions and that it would be unjust for them to receive the benefit of that work without making a reasonable payment for that benefit.
I will now consider the 3 items of work which are said not to have been freely accepted. I note that this issue is articulated for the first time in the Pollocks’ closing submissions in reply. The issue was not pleaded.
(1) The steel portal frame used in the upper floor of the house.
(a) I accept the evidence of Mr Lewis, set out in his statement filed 29 April, 2010, exhibit 1, that the portal frame was installed when Mr Pollock said in mid May 2008 that they wished to construct a bank of windows across the eastern elevation, however after the portal frame was installed they changed their mind and the frame became redundant.
(b) Mr Pollock, in his statement filed 10 September, 2010, exhibit 18, says that neither the plans nor the revised plans show any such bank of windows. I prefer the evidence of Mr Lewis, because Mr Pollock does not squarely address the assertion made by Mr Lewis of a conversation in mid-May, 2008 about the plan for a bank of windows.
(c) The Pollocks’ expert, Mr Van de Hoef admitted in cross examination that if a bank of windows across the wall in question was to be fitted, then use of the portal frame was reasonable because there would otherwise be insufficient wall for bracing purposes.
(d) I find that installation of the steel portal was a necessary incident of fitting a full width bank of double hung windows and that a request for the bank of windows was made, although later withdrawn after the portal had been installed. Accordingly, to the extent that a lack of request is complained about by the Pollocks as affecting free acceptance of the work, I find that is not the case.
(e) To the extent the Pollocks complain that the steel portal was unnecessary, Lewis Constructions agrees that is the case, however, I accept the evidence that it only became unnecessary after installation, when the plan for a bank of windows was withdrawn. The cost therefore lies with the Pollocks.
(2) Ply bracing affixed to the external lower floor walls
(a) In relation to the use of ply bracing affixed to the external lower floor walls, I accept the evidence of Mr Lewis given at the hearing and in his statements, exhibits 1 and 2, that he suggested use of ply bracing to Mr Pollock as a solution to Mr Pollock’s concern in relation to security of the site, particularly as there was a delay in delivery of the doors and windows. In cross examination Mr Haskard, the Pollocks’ expert, said that it was a matter for the builder to choose a means of securing the house. I accept Mr Lewis’ evidence that that the ply bracing was also used as bracing to address Mr Pollock’s concern about movement in the upper structure and that it provided acoustic and thermal benefits.
(b) I prefer the evidence of Mr Lewis to the evidence of Mr Pollock that he had no discussions with Mr Lewis in relation to the use of ply bracing. Mr Lewis was clear and consistent in his recollection of the discussion. The use of the ply bracing appears to be a reasonable response to a number of issues not disputed by the Pollocks. On this basis I find that Mr Pollock requested use of the ply bracing by agreeing to its use to meet the identified problems.
(c) Accordingly to the extent that lack of a request is complained about by the Pollocks as affecting free acceptance of the works, I find that is not the case.
(3) Water tank
(a) The evidence of Mr Lewis and Mr Pollock was that at the time of installation of the water tank Mr Lewis thought installation of a water tank was mandatory. Mr Lewis now agrees that he was mistaken. Mr Pollock does not dispute that he requested the water tank. He does not say the water tank is of no benefit to him. He does not say that at any time he rejected installation of the tank. His complaint appears to be that he would have rejected the tank if he knew it was not mandatory, because it was unnecessary.
(b) The real question is whether in light of the request for the water tank and the benefit accepted, it would be unjust for the Pollocks to retain the benefit of the water tank without paying a reasonable price for it. That is, even though the Pollocks would not have asked for the tank, if they had known its installation was not mandatory. On balance, I find that because of the undoubted benefit of an underground water tank, it would be unjust for the Pollocks not to pay a reasonable sum for it.
I conclude in relation to the 3 items isolated by the Pollocks as not having been freely accepted, that there has in fact been free acceptance and that it would be unjust if they did not pay a reasonable price for those items.
Accordingly, I find that Lewis Constructions is entitled to restitution on the basis of a quantum meruit in relation to all the Work he performed for the Pollocks.
The last principle to be considered is how assessment of the quantum of the restitution sought, should be conducted. His Honour Justice Deane said in Pavey’s case:
"What the concept of monetary restitution involves is the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or “enrichment” actually or constructively accepted. Ordinarily, that will correspond to the fair value of the benefit provided (e.g. remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied).”[xii]
Byrne J in Brenner v First Artists Management Pty Ltd said:
“The assessment then, must have regard to what the defendant would have had to pay had the benefits been conferred under a normal commercial arrangement. The enquiry is not primarily directed to the cost to the plaintiff of performing the work since the law is not compensating that party for loss suffered…But this is not to ignore these costs for the reasonable remuneration for work must have some regard to the cost of its performance…”[xiii]
[72] I consider these decisions to set out more clearly and authoritatively the principles to be adopted in assessing a quantum meruit than the decision of Ahern v Crouch[xiv] referred to by both parties.
The restitution to be made
[73] Lewis Constructions in its submissions refers to costings prepared by its expert Mr Davies and compares them to costings prepared by the Pollocks’ expert, Mr Haskard. It notes a discrepancy of $265,792.20 between them and says that is because different methodologies were used by each expert.
[74] Upon reference to exhibit 10, the revised report of Michael Davies Consulting Pty Ltd, dated September, 2010, I note that:
(a)Mr Davies assessed the cost of the initial design in the sum of $477,414.
(b)He deducted the assessed value of omissions from the plans in the sum of $111,236, being for:
·Wall framing
·Doors
·Plasterboard wall linings
·Ceilings
·Light fittings
·Skylights
·Painting
·Landscaping, pool and fence.
(c)He deducted $2,070.00 for incomplete work, being:
·Downpipes and plumbing
·Sand and polish upstairs floor.
(d)He added the assessed value of extras in the sum of $266,723.
(e)Defective items were excluded.
[75] Upon reference to the table attached to exhibit 42, the report of Mr Haskard, dated 27 July, 2011, I note that:
(a)Mr Haskard assessed the cost of the initial design in the sum of $478,802.
(b)He deducted the assessed value of omissions from the plans in the sum of $143,098, being for:
·D4, W3, W6 Bathroom Door
·Door furniture internal
·Labour
·Fire place
·Skylights
·Back terrace concrete
·Downstairs bathroom
·Light fixtures
·Electrical items
·Labour
·Plumbing items
·Labour
·Internal painting
·Laundry bench
·Window hardwood
·Labour
·Door hardware
·Labour
·Upstairs bathroom
·Kitchen
·Landscaping and pool, including fence
·Profit 10%
(c)He deducted $66,669.32 for incomplete works, being for:
·Stormwater
·Downpipes and plumbing (cost from owner)
·Shelves WIR
·Ensuite
·Vanity
·Tiling
·Labour
·Plumbing labour
·Shower screen
·Tank plumbing (pump not included)
·Robes 2, 3 and 4, linen
·Cornices, skirts, architraves
·Internal doors
·Sand and polish upstairs floor (cost from owner)
·Electrical (cost from owner)
·Bar (sink, tap cabinet, plumbing drainage done)
·Hotwater system (move from temporary position to final position)
·Render garage wall (make waterproof)
·Site clean (cost from owner)
·Painting (cost from owner)
·Plastering (cost from owner)
·Finishing off (cost by owner)
·Wall sheeting (cost by owner)
·Painting
·Profit 10%
(d)He added the assessed value of extras in the sum of $105,814.00.
(e)He deducted $9,530.93 for defective items.
It is apparent to me upon comparing the two analyses of the experts that some items of work have been assessed by different criteria, resulting in different amounts for items. Beyond that it appears that:
·Mr Davies has costed very little incomplete work. His evidence at the hearing was that he accepted advice from Mr Lewis that no other items were incomplete. Mr Haskard has costed a number of items of incomplete work and deducted the value from the value of the work pursuant to the approved plans.
·Mr Davies has not deducted any amount for defective work, whereas Mr Haskard has done so.
·Mr Davies has assessed a higher amount for additional work than Mr Haskard.
·Mr Haskard has assessed a higher amount for omissions, incomplete work and defective work.
I prefer the approach of Mr Davies and the conclusions reached in his report, exhibit 10. I accept the submissions of Lewis Constructions that Mr Davies is to be preferred because of his 40 years’ experience as a quantity surveyor and the detailed approach that he took.
Given the size of this claim and the scale of the assessment of costs involved in this matter, I consider the traditional quantity surveyor’s methodology used by Mr Davis is preferable to the methodology used by Mr Haskard. To the extent it was challenged, I accept that Mr Davies reliance on the publication “Rawlinsons” is appropriate for determining a fair and reasonable cost.
I accept Mr Davies’ evidence under cross examination that his extensive experience in commercial projects does not detract from his ability to assess costs in domestic projects and that he is also experienced in domestic work.
With one exception set out below, I accept the submissions of Lewis Constructions that Mr Davies’ evidence is preferable because he costed the job, as built, to 26 September, 2008, when Mr Lewis was required by the Pollocks to cease work. By contrast Mr Haskard costed off the plan and added the value of extra work, or variations, which he was able to sight or which were proven. As a result the value of certain work was missed. I accept the submissions of Lewis Constructions that:
·Mr Haskard omitted any allowance for site preparation, managing the job, supervising staff and subcontractors, ordering materials, insurances, administration, bookkeeping and overheads.
·Further, there is no allowance for bulk yard excavation, pier excavation, rock breaker to demolish old reinforced slab and footings, root barriers, temporary stairs and walkway, height survey, stormwater connection to Yabba Street council main, drainage system to remove surface water, rainwater tank, dining room portal frame, installation of external doors, windows and hardware, purchase of external door and window hardware.
·Ceiling battens in the lower floor were calculated from the plan rather than what had actually been constructed.
·In relation to the root barrier, Mr Haskard said that he saw no invoices, it wasn’t on the plan therefore he did not allow it. Likewise he did not make an allowance for acoustic ceiling insulation.
Whilst acknowledging the expertise of Mr Haskard, I find in this case that the methodology adopted by Mr Davies more comprehensively addresses the full extent of work performed and therefore gives a better indication of a fair and reasonable cost for the work. I do not form this view on any basis other than as set out above. In particular I have not relied on the matters submitted which were not the subject of cross examination, such as the alleged selective use of invoices by Mr Haskard or that he made no allowance for labour in his costings.
For the reasons set out in Brenner’s case, and as a general proposition, I do not think that a claim for restitution based on a quantum meruit requires that the actual costs of Lewis Constructions must form the basis for assessing the claim or as submitted by the Pollocks that it is unjust to accept that a fictitious figure rather than the an actual cost should be utilised.
The exception to the general proposition in this case relates to Mr Davies’ costs attributed to “preliminaries”. I accept the submissions of the Pollocks that the 13% attributed by Mr Davies for “preliminaries”, being $43,400 exclusive of GST, is excessive in light of the actual costs of $11,411.94, inclusive of GST.
Otherwise, and without yet considering any offset for defective work, I find for the reasons set out above that a fair and reasonable sum for the work performed by Lewis Constructions is $657,585.94, inclusive of GST, being:
·the total amount costed by Mr Davies in the sum of $630,631 exclusive of GST,
·less the assessed sum for preliminaries in the sum of $43,300 exclusive of GST,
·plus GST (coming to $646,174.00),
·plus the actual cost of preliminaries in the sum of $11,411.94 inclusive of GST.
Alleged defects
Mr Haskard set out a number of defects in the work at paragraph 29 (a)-(p) of his report dated 10 September, 2010, Exhibit 40. In the Pollocks’ submissions in reply they say that no cost is attributed to a number of defects listed by Mr Haskard, however, the real controversy lies with the following alleged defects:
29 (b) Inadequate termite protection
29(e) Unsafe loads on upstairs ceilings
29(j) Defective plumbing
29(l) Faulty building work inside and out ( missing trim, damaged door, picture rail removed, hall VJ not nailed, hot water system incomplete - previously mentioned, missed nails in laundry wall sheeting, window jambs downstairs too far to the outside, upstairs window - poorly joined reveal)
29(n) Water damaged unprimed windows and doors
29(o) Unpainted timber poor quality and requires arising.Lewis Constructions’ expert, Mr Neil Dixon, in a report dated 27 August, 2010 found in relation to the matters noted by Mr Haskard, that:
(a) 29(b) – the termite protection was incomplete work;
(b) 29(e) – storage of timber in the roof cavity was not a defect;
(c) 29(j) – leak in ensuite and ground floor pedestal noted as rectified;
(d) 29(l) – the various items of faulty work were incomplete work;
(e) 29(n) – painting was the responsibility of the Pollocks, consequently the work was incomplete;
(f) 29(o) – the unpainted timber weather boards, eaves soffit linings and trim on the external east elevation were not a defect but were incomplete work.
Mr Lewis in his statement filed 1 October, 2010, exhibit 2, gives the same response to assertions of defective work by Mr Haskard.
Both Mr Haskard and Mr Dixon costed rectification or completion work. Mr Haskard noted in an early report that his estimates all included GST. Mr Dixon has not said whether his estimates include GST. I have assumed that they do on the basis that he is responding to Mr Haskard’s estimates and that like is being compared with like.
In the context of a quantum meruit claim, unlike a contractual claim, the issue is not whether early termination of the contract caused defective or incomplete work, with the result that the builder should not have to meet the cost of rectification or completion, but rather what would the owners pay in a normal commercial arrangement for the work, as built, which they had requested. I find that in a normal commercial arrangement the full value of defective or incomplete work would not be paid by the owners. Rather there would be an offset for rectification or completion to arrive at a value of the work to the building owners.
I accept the assessment of Mr Haskard in relation to the cost of rectifying and completing the termite protection in the sum of $450.00. I prefer his evidence as being more comprehensive on this point.
I agree with Mr Dixon that storage of timber in the roof cavity is not a defect.
I accept the assessment of Mr Haskard in relation to the cost of rectifying the allegedly leaking plumbing in the sum of $490.00. I prefer his evidence as being more comprehensive.
I accept the assessment of Mr Haskard in relation to the cost of rectifying the range of work described at item 29(l) in the sum of $1,760.00. Mr Dixon does not address each of the listed items.
I accept the assessment of Mr Haskard in relation to the cost of rectifying unprimed windows and doors. I accept his evidence that priming is the responsibility of the builder and that it was not done or not done adequately in the instances set out in his report. I do not accept the evidence of Mr Dixon and Mr Lewis that because painting more generally was the responsibility of the Pollocks that Mr Lewis was excused from the obligation to prime. I accept that the cost of rectification is $1,194.00 in relation to the windows and $1,542.00 in relation to the laundry door.
I accept the evidence of Mr Dixon and Mr Lewis that painting was to be undertaken by the Pollocks. On this basis I do not consider that any offset should be made for painting unpainted weatherboards or that Mr Lewis is responsible for arising, sanding and filling the weatherboards.
In all I find that the sum of $5,435.00, inclusive of GST, should be offset for the cost of rectification of defects or incomplete work.
Accordingly I find that the reasonable value of work performed by Lewis Constructions is $652,150.94, inclusive of GST, taking into account the cost of rectification of defective work. I find that Lewis Constructions has established an entitlement to restitution in this amount less the sum of $454,972 paid by the Pollocks, being an amount of $197,178.94 inclusive of GST.
Pollocks’ claim for restitution for over-payment
On the basis of my finding that a reasonable value for the work performed is $652,150.94, I find that there has been no overpayment by the Pollocks taking into account the sum of $454,972.00 paid by them to Lewis Constructions. Accordingly I will make no order for restitution in favour of the Pollocks as claimed by them.
Pollocks’ counter-application
The Pollocks seek by way of counter-application damages for negligence relating to:
·the cost to rectify 23 steel columns which are alleged to be corroding;
·the cost to rectify the drainage system in the north western corner of their property;
·the cost of removing asbestos sheeting damaged during the course of the works.
23 steel columns
[100]The Pollocks claim the sum of $54,000.00 for remedial work to 23 steel columns located on the perimeter of the ground floor which are said to be corroding.
[101]The Pollocks submit that the controversy is whether:
(a) the columns were adequately treated with Duragal as an appropriate substitute for use of hot dipped galvanised steel columns; and
(b) the steel columns are in fact corroding.
[102]Mr Van de Hoef, Mr Vrbancic and Mr Haskard gave evidence as experts on behalf of the Pollocks. Mr Lewis and his expert, Mr Dixon gave evidence in relation to this issue.
[103]Mr Van de Hoef is a senior structural engineer employed by NJA Consulting Pty Ltd. His report dated 4 November, 2010, Exhibit 33, records that he has prior experience in relation to corroded columns in similarly constructed buildings. In light of Mr Van de Hoef’s particular expertise and the consistency of his evidence at the hearing, I prefer his evidence to that of Mr Dixon.
[104]I find in accordance with the evidence of Mr Van de Hoef that an effective treatment of the protective bitumen paint had not been administered below the soil line or the base of the external pavement and that there was evidence of rust on the columns tested. I find, based on Mr Van de Hoef’s investigations and those of his work colleague Mr Vrbancic, that the rust was consistent with corrosion and that the substance was unlikely to be stray ferrous material from the work site.
[105]Lewis Constructions submitted that the issue had arisen because the concrete paving had not been completed correctly by the Pollocks’ concreter, in that the paving concrete was set too high, soil was allowed to be placed against the columns and the concrete butted up to the relevant columns. Such a submission appears to recognize that there is an “issue” or problem and is inconsistent with an assertion that the bituminous coating had been applied and that there was no evidence of rust on the columns. In any event I am not satisfied sufficient technical evidence was presented that the paving concrete was the cause of the rust problem on the perimeter steel columns. I accept the submissions of the Pollocks that to the extent Mr Dixon postulated that use of an accelerant in the paving concrete may have caused an abrasive effect, he was wrong in that the evidence of the concreter was that no accelerant was used.
[106]I accept the submissions of the Pollocks, that the prima facie measure of damages for defective building works is the costs of remedial work which is not only necessary but reasonable to give the home owners a result which is substantially in accordance with what they bargained for.[xv]
[107]Although the Pollocks claim the amount of $54,000.00, based upon Mr Haskard’s proposed method of rectification the Pollocks acknowledge that Mr Van de Hoef prefers a cheaper alternative method of rectification as proposed by Mr Dixon. That method involves the cutting of the concrete around the columns, treating the columns and then replacing the concrete.
[108]Mr Van de Hoef did not provide a costing in his report but under cross examination stated that the work would be inexpensive. Mr Dixon provided a costing for the cheaper method of rectification. His estimate was in the order of $36.00 for each of the columns. Mr Haskard also costed this method of rectification at $90.60 per column.
[109]Lewis Constructions submitted that if it is found liable the approach of Messrs Van de Hoef and Dixon is reasonable in all the circumstances.
[110]Given the particular expertise of Mr Van de Hoef, and the fact that his evidence as to lack of effective application of the bituminous coating and corrosion of the columns has been accepted, there is no good reason not to accept his evidence as to an acceptable method of rectification.
[111]I find that the method of rectification proposed by Mr Van de Hoef and Mr Dixon is appropriate. I accept the costing of $90.60 per column, for rectification, set out in Mr Haskard’s report dated 27 July, 2011, Exhibit 42. Mr Haskard’s costing is more comprehensive than that undertaken by Mr Dixon. I have assumed that sum is inclusive of GST.
[112]I do not accept Mr Haskard’s criticism of this method of rectification that it will create a problem with the termite treatment, electrical and plumbing. This complaint was raised and recorded in the joint experts report dated 31 March, 2011 however it was not acknowledged by either Mr Van de Hoef or Mr Dixon.
[113]I find in favour of the Pollocks in relation to their counter-application with respect to a claim for damages for remedial works to 23 columns located on the perimeter of the ground floor, in the sum of $2,083.80.
Failure to provide adequate system of drainage
[114]The Pollocks seek damages in the amount of $8,984.31 representing the cost of remedial works to place a reflux valve on the drainage system in the northwest corner of the property.
[115]The Pollocks’ claim is not for damages arising from the actual flooding of their property but rather the rectification of an inappropriately designed and constructed drainage system in the northwest corner which has left their property susceptible to flooding as a result of the potential backflow.
[116]It is asserted by the Pollocks that if a reflux valve is installed in the drainage system running from the north-west corner of the property on to Yabba Street, it will prevent water being forced from the stormwater drains on Yabba Street up the drainage pipes into the Pollocks’ property.
[117]The Pollocks submit that the issues in contention are:
(a) whether Lewis Constructions planned to construct the drainage system with a reflux valve in the drainage system on the north western corner;
(b) whether the absence of a reflux valve is in fact a defect in the drainage system or merely incomplete works;
(c) whether the appropriate location for the installation of the reflux valve was outside the Pollocks’ property or inside the boundary of the Pollocks’ property.
[118]I accept the evidence of the plumber Mr McGrath and Mr Lewis that it was intended to install a reflux valve when a sullage pump was fitted, however, the work was not completed at the time Lewis Constructions was asked to cease work. Both Mr McGrath and Mr Lewis gave convincing evidence under cross examination. Mr Lewis said that his programme of work was to put pumps in later in the job and that until a pump was installed there was no point in installing a reflux valve. He said it was a simple matter to install the reflux valve by digging out approximately 18 inches of soil at the appropriate place.
[119]I accept the evidence of Mr McGrath that the pipework he laid included a pipe with one end to the street and one end to a pump out pit. A pump was required to pump out the pit if it filled up. His evidence was that a reflux valve can jam closed and it should not be in place without a pump. The pump was to go in at the end of the job when there was power and it could be put in safely with no risk of damage.
[120]I find on the basis of the evidence of Mr McGrath and Mr Lewis that the absence of a reflux valve is not a defect, but is incomplete work as a result of early termination of the arrangement with Lewis Constructions.
[121]I do not consider Lewis Constructions was negligent in the performance of drainage work whilst it was engaged by the Pollocks. I accept the evidence of Mr Lewis that there was sufficient site storage and gravity to deal with stormwater, at the time he left the site.
[122]I accept the evidence of Mr McGrath that he planned to install the reflux valve on the footpath. As to whether that was an appropriate location or not, there was no evidence before me to suggest that the Brisbane City Council may object to that location.
[123]For these reasons I find against the Pollocks in relation to this part of their counter-application.
Removal of damaged asbestos sheeting
[124]The Pollocks claim an amount of $20,711.90 for damages for negligence relating to damage to asbestos wall linings and ceiling sheets.
[125]The sum of $20,711.90 arises from a quotation given by BBM Contracts Pty Ltd to remove asbestos cement wall lining from the library games room and from the family room office, to remove asbestos cement ceilings from bedrooms 2 and 5, and the linen cupboard. The quote also covers ancillary work.
[126]The question the Tribunal has to answer is whether the work performed by Lewis Constructions was performed with due care and skill. If it was not, was the alleged damage caused by the conduct of Lewis Constructions.
[127]The evidence given by the Pollocks as to a lack of care and skill on the part of Lewis Constructions came from Mr Pollock. He expressed his opinion that the plumber and the electrician had compromised the asbestos ceiling. He referred to the removal by Lewis Constructions, of a panel in the study leaving a piece of ply with pieces of asbestos panelling attached; he said that in the lounge room exposed asbestos was left during the course of works to remove an entry door and install sheeting for the gap created. He said that the activities of Mr Lewis and his worker resulted in cracked asbestos sheeting in the storeroom. Finally he considered that the weight of timber stored by Lewis Constructions in the ceiling resulted in cracking of the ceiling.
[128]Mr Pollock gave no credence to the assertion by Lewis Constructions that the damaged asbestos related to the work of the air conditioning contractor. He said that the damaged asbestos proximate to the air conditioning holes in the ceiling was a small part of the damaged asbestos.
[129]The allegations against Lewis Constructions were denied by Mr Lewis. Mr Lewis’ evidence was that after testing, asbestos was identified in the air conditioning riser cupboard ceiling sheeting, not elsewhere. Mr Lewis said that the air conditioning contractor was engaged directly by Mr and Mrs Pollock. He denied responsibility for that contractor’s work.
[130]Mr Dixon in his report filed 28 September, 2010, Exhibit 8 noted that cracks in the ceiling may have been caused by installation of air conditioning given that cracks radiated from the air register and area adjacent to the register.
[131]Mr Dixon thought remedial work to the ceilings could be achieved by a skim coat over cracks and painting for a cost of $500.00.
[132]In relation to the wall linings he noted that Lewis Constructions had taped and sealed the affected areas. The wall lining were observed by Mr Dixon to have been disturbed at the vertical butt joints so that filler material and nail heads were popped or displaced. In his view this may have occurred during the lifting of the house. In any event he thought that filling the cracks and painting was sufficient rectification work at a cost of $300.00.
[133]The Pollocks submit on the balance of probabilities that:
(a) damage to the sheeting was sustained during the course of the works undertaken by or at the direction of Lewis Constructions; and
(b) the sheeting is asbestos.
[134]The Pollocks say that because there is no other evidence of the cost of removal of the asbestos sheeting, BBM’s quotation should be accepted as evidence.
[135]I note that Mr Berry from BBM was subpoenaed to give evidence, however he did not appear. In his absence I am unable to attribute any weight to the purported evidence of the cost of removal of asbestos sheeting. I prefer the evidence of Mr Dixon that it is possible to rectify the cracking by filling and painting for a total cost of $800.00.
[136]Further, I am not satisfied on the evidence that it is necessary to remove the sheeting referred to by BBM. I accept the submissions of Lewis Constructions that the certificate of analysis in relation to the presence of asbestos was taken some two years after Lewis Constructions ceased work on the site. I find that is too long a period after Lewis Constructions left the worksite to attribute the asbestos particles found to any actions of Lewis Constructions.
[137]I do not consider Mr Pollock’s suppositions as to the cause of cracking in the ceiling to be evidence of a lack of due care and skill on the part of Lewis Constructions. I do not consider he has the construction expertise to form the conclusions he submitted.
[138]No expert on behalf of the Pollocks has given any evidence of work performed with a lack of due care and skill which has caused cracking in the ceilings and movement of wall panels.
[139]There are a number of possible explanations for the cracking. It is possible that cracking in the ceiling was caused by the work of the air conditioning contractor. In this regard, I find that the air conditioning contractor was engaged directly by the Pollocks to install air conditioning at their home. I accept the submissions of Lewis Constructions and the evidence of Mr Maher of Electra Air Pty Ltd that he was contracted directly to the Pollocks to install air-conditioning. I find that Lewis Constructions was not responsible for the work of the air conditioning contractor.
[140]I note the evidence of Mr Maher, referred to in the submissions of Lewis Constructions, that his workers had been working quite a long time up in the ceiling and that they repaired cracks which appeared.
[141]Although Mr Haskard says in exhibit 40 that timber stored in the ceiling is placing excessive loads on the ceiling he does not say it has caused cracking. I am unable to find that the stored timber was a cause of the ceiling cracking because of a lack of evidence on the point. I accept the evidence of Mr Lewis that the load in the ceiling was not excessive.
[142]It is possible that the cracking was a normal incident of work performed at the house, given the age and structure of the house, and that there was no negligence involved.
[143]In this vein I accept the evidence of Mr Dixon being the only expert evidence on the point, that the movement in the wall panels may have been caused when the house was lifted. That of itself is not evidence of negligence, merely a consequence of a major movement to the house. I accept that Lewis Constructions took protective measures by taping the raw edges of wall panels in case the panels contained asbestos, however, that was not clear to it at the time.
[144]I do not find that there has been any negligence on the part of Lewis Constructions which caused damage to asbestos sheeting in the house as there is insufficient expert evidence of any lack of care or skill on the part of Lewis Constructions which can be shown to have caused damage to the sheeting.
[145]The Pollocks fail in relation to this part of their counter-application.
Orders
[146]I have found that Lewis Constructions is entitled to restitution based on a quantum meruit in an amount of $657,585.94, inclusive of GST, less the cost of rectification of defective work in the sum of $5,435.00, inclusive of GST. Taking into account the sum of $454,972.00 paid by the Pollocks to Lewis Constructions the applicant is entitled to the sum of $197,178.94 inclusive of GST by way of restitution.
[147]Lewis Constructions has also claimed interest. I decline to order the payment of interest on the basis that Lewis Constructions’ recovery is by way of restitution, calculated by reference to the value of the work performed for the Pollocks, not as compensation for loss incurred by it. Accordingly interest is not payable on the sum awarded.
[148]I have found in favour of the Pollocks in relation to their counter-application with respect to a claim for damages for remedial works to 23 columns located on the perimeter of the ground floor, in the sum of $2,083.80.
[149]After offsetting the award in favour of the Pollocks on their counter-application, I order the respondents to pay to the applicant the sum of $195,095.14, inclusive of GST, within 21 days of the date of this decision.
[150]Both parties have submitted that they wish to be heard in relation to costs. I order that they each file and serve submissions in writing in relation to costs, by 21 June, 2012 and that they file and serve any submissions in reply by 29 June, 2012.
[i] [1989] 2 Qd R 105.
[ii] (1987) 8 NSWLR 662.
[iii] [2007] QCCTB 64.
[iv] (1987) 16 CLR 221 at 227.
[v] [2008] HCA 27 at para 82.
[vi]L. Willmott, S. Christensen, D. Butler, B Dixon, Contract Law, 3rd edition, Oxford University Press, Australia and New Zealand, 2009, p 794.
[vii] Ibid, p 794.
[viii]Ibid, p 800; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353.
[ix] Brenner v First Artists’ Management Pty Ltd [1993] 2 VLR 221.
[x] [2002] VSC 248 from para 96.
[xi] [2001] NSWCA 87.
[xii] (1987) 162 CLR 221 at para 24 of Deane J’s judgment.
[xiii](1993) 2 VR 221 at p.262-263 and considered in Len Lichtmauer Developments Pty Ltd v James Trowse Constructions Pty Ltd [2005] ACA 214.
[xiv] [2007] QCCTB 64.
[xv] Bellgrove v Eldrige (1953-4) 90 CLR 613.
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