Lida Build Pty Ltd v Miller
[2013] QCATA 131
•30 April 2013
| CITATION: | Lida Build Pty Ltd v Miller & Anor [2013] QCATA 131 |
| PARTIES: | Lida Build Pty Ltd (Applicant/Appellant) |
| v | |
| Peter Miller Susan Miller (Appellants/Respondents) |
| APPLICATION NUMBER: | APL123-12 / APL146-12 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | 22 October 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr Richard Oliver, Senior Member Mr Jim Allen, Member |
| DELIVERED ON: | 30 April 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | On the appeal of Lida Build Pty Ltd the appeal is allowed in part.1. The decision of the Tribunal made on 26 March 2012 is set aside.2. The respondent must pay to the applicant $25,795.78 by 30 May 2013.3. The decision of the Tribunal in regard to the roof pitch claim for rectification in the amount of $37,638.98 is set aside. 4. The Tribunal is directed to determine, in accordance with this decision that because the contract required the roof pitch of the pool house to match the roof pitch of the existing house whether damages should be awarded on the Millers counterclaim to be assessed on the basis of the cost to rectify the pitch to 25° or whether damages be assessed by way of diminution in value, and if so what amount.5. That in considering the question in direction 5 the Tribunal must give consideration to any amount to be allowed for rectification of the fascia.6. On the appeal of Susan Miller and Peter Miller the appeal is dismissed.7. |
| CATCHWORDS: | DAMAGES – where specific issues referred back to the Tribunal for further consideration, - where all matters not considered – where building work not defective but did not comply with the contract – where failure to follow the plans – whether a failure to comply with the plans would result in damages for the cost to comply or in diminution in value – whether unreasonable to incur the cost to comply with plans – whether diminution in value is the proper method of calculating loss Queensland Civil and Administrative Tribunal Act2009, s 28, s 29, s 143, s 146 Bellgrove v Eldridge (1954) 90 CLR 613 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Miller represented Mr and Mrs Miller |
| RESPONDENT: | Lida Build Pty Ltd was represented by ms McNeil of Counsel |
REASONS FOR DECISION
Lida Build and the Millers have been in disputation about building work carried out by Lida Build at the Millers residence since 2009. The building work involved the construction of a pool house for an initial contract price of $104,500.00. Lida Build originally commenced a proceeding in the Tribunal claiming payment for the balance of money owed under the building contract. The Millers, in response, counter-claimed for defective building work and late completion damages.
On 6 September 2010 the Tribunal made a decision that the Millers pay to Lida Build $38,907.31. After that decision, both parties filed applications for leave to appeal or appeal and on 9 August 2011, the Appeal Tribunal made a decision allowing both appeals in part, set aside parts of the original decision and remitted the matter back to the Tribunal Member to decide certain issues.
On 26 March 2012 the Tribunal, after a further hearing of the matter on 16 March 2012, made a decision that the Millers pay to Lida Build $11,820.00. From that decision, again, both Lida Build and the Millers have filed applications for leave to appeal or appeal.
Both appeals relate to whether the learned Member, on rehearing the matter as directed by the Appeal Tribunal, complied with or went beyond the matters that were referred back to him for further consideration.
The issues then raised in this appeal by Lida Build are as follows:-
(a) The learned Member, having found that the contract did not require the roof pitch of the pool house (30°) to match the roof pitch of the existing house (25°) should not have then assessed damages for the replacement of the roof.
(b) If the Appeal Tribunal finds that the learned Member was authorised to assess the cost of the replacement roof then Lida Build was denied procedural fairness in not being given an opportunity to provide evidence of rectification costs.
(c) Whether the Tribunal erred in finding the Millers were entitled to $4,200.00 for liquidated damages.
(d) Whether the Tribunal erred in finding that Lida Build was not entitled to legal costs in relation to recovery of its practical completion claim.
(e) Whether the Tribunal erred in limiting interest on the fixing stage claim from 24 June 2009 and that there was no entitlement to interest on the practical completion claim.
The issues raised by the Millers in their application are as follows:
(a) The Tribunal erred in extending the date for practical completion to 20 January rather than fixing the date for practical completion at 20 December 2012 thus depriving the Millers of 31 days of delay damages of $1,550.00.
(b) Wrongly concluding that as the plumber Mr Flynn was recommended by the Millers to Lida Build, they were responsible for delays associated with plumbing work to be carried out by Mr Flynn thereby reducing delay damages.
(c) The Tribunal erred in its application of the “prevention principle” which resulted in a limitation of delay costs.
The grounds of appeal from both parties involve questions of law and fact and therefore leave to appeal is necessary.[1] Leave to appeal will ordinarily only be granted where there is some question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is: is leave necessary to correct a substantial injustice to the applicant, caused by some error?
Did the contract provide for a roof pitch of 25°
[1] QCAT Act, s 142(3).
The Millers house can be best described as a substantial dwelling on one hectare of land in the prestigious rural residential precinct of Bridgeman Downs.[2] The house has five bedrooms, three bathrooms, office, home theatre generous living and dining areas with a large covered deck, cellar and cold room. The house is about 383 square metres with about 140 square metres externally. The grounds are fully developed with a swimming pool and sealed driveway. The house itself has a metal colourbond roof and is some distance from the pool and the new pool house. It seems it was always intended that the pool house would match the existing house; this included roof style and pitch although the contract was silent with respect to roof pitch.
[2] Valuation of Action Property Solutions Pty Ltd page 3.
In the early part of the job, and to ensure consistency, Mr Jover of Lida Build “measured” the pitch of the roof on the house and came to the conclusion that it was 29° so he decided to build the roof of the pool house with a 29° pitch. However, it is now accepted by the parties that the house roof pitch is 25°.
The question referred to the Tribunal Member was whether the contract required the roof pitch of the pool house to match the roof pitch of the existing house. It is not contested that there was no express term in the building contract or any oral variation to this effect. The plans, which form part of the contract[3] prescribes the measurements of the frame to support the roof which, if followed, would have resulted in a 25° pitch.[4] Again this does not seem to be contested.
[3] Definition of contractual terms in the contract.
[4] Annexure to the statement of Mr Sweeney dated 29 July 2009.
The plans were deficient in not specifying the roof pitch and only making reference to “roof to match existing”.[5] This, however, only referred to the cladding on the roof and not the pitch. In respect of the roof not being built to match the house the learned Member found that both parties were to blame. He said that the Millers were responsible for supplying the plans which were clearly defective in not specifying the pitch. Lida Build was responsible because Mr Jover tried to match the pitch of the roof by measuring the house pitch but failed to get the measurement right by 4°. Lida Build relies on that summary in the reasons to contend that it was not a contractual term that the roof pitch of the pool house either matched the existing house or that it be 25°. The learned Member’s observations about the roof pitch , related to whether Lida Build should be allowed the time to rectify the fascia and not the contractual issue.
[5] Plan C-C section.
The submission then is that Lida Build has not breached the contract by constructing the roof pitch differently to the roof pitch of the existing house and constructing it at 29° as this is not inconsistent with the terms of the contract.
The contract, although silent as to the specific pitch of the roof, includes the plans for the construction of the pool house.[6] It was Lida Build’s obligation under the contract to build in accordance with the plans drawn by Mr Sweeney. Therefore to decide the question remitted to him, after considering the deficiency in the plans and Mr Jover’s measurements, the learned Member considered this question under the heading “Has the pool house been completed according to the contract”.
[6] Definition of contractual terms in the contract.
The learned Member relied on the evidence of Mr Sweeney, the architect who prepared the drawings. His evidence was that had the pool house been constructed in accordance with the drawings then a roof pitch of 25° would have been achieved. The plan referred to by the learned Member C-C (17.01.08) shows that the distance from the floor to the “top of the timber bearer” should have been 2450 whereas in fact, as constructed, the height was less than that. Alternatively, with an eave of 790, the height to the bottom of the eave would have been 2150 thereby providing sufficient clearance and compliance with the building code. The evidence of Mr Sweeney together with the notations on drawing C-C, attached to his statement, which has the roof pitch at 30° overlaid on the roof pitch as drawn, clearly demonstrates that the frame to support the roof was not constructed in accordance with the plans and therefore not constructed in accordance with the contract.
It follows in our view that the Members discussion in paragraphs [50]-[60] of the reasons leads to the conclusion that Lida Build did not build according to the plans. In failing to follow the plans it breached its contractual obligations. The evidence clearly supports this conclusion and we see no reason to interfere with it.
It is unfortunate that the learned Member did not address the question specifically by reference to what was referred back to him for consideration by the Appeal Tribunal however we consider that on a fair reading of his judgment, the only reasonable conclusion is that the Members statement that the Tribunal finds that the pool house has not been completed by Lida Build in accordance with the contract can only mean that the contract provided a roof pitch of 25° which clearly it did by reference to the plans.
Should damages be calculated as costs of rectification or diminution in value
The second matter the learned Member was required to consider was “whether an amount should be awarded on the Miller’s counterclaim for rectification of the pool house or diminution in value”. After concluding that the contract required the roof pitch to match the house, the learned Member considered the first part of the reference but not the second. The only evidence on rectification was provided by the Millers son-in-law Simon of AJ Plumbing and Barrai Moran of MCD Carpentry in the total sum of $37,638.98. As no evidence was led by Lida Build as to the cost of rectification, the Tribunal assessed the cost of rectification in the sum of $37,638.98. If this methodology to assess damages is correct then, in the circumstances there can be no complaint, other than whether Lida Build was afforded procedural fairness.
However, the learned Member did not consider the second question in any detail, that is, whether the proper measure of the loss is a diminution in value. Both parties did produce valuation evidence at the hearing. Clearly this was an issue in the proceeding before the Tribunal. Lida Build made submissions that diminution in value was the appropriate method of assessing damages in the circumstances of this case and relied on the evidence of Mr Pullos, set out below.[7] That is why it did not lead any evidence as to the cost of rebuilding the roof to a pitch of 25°. The Millers took a similar approach and submitted to the Tribunal at the first hearing in July 2010 that any loss associated with the roof pitch should be assessed on the basis of a diminution in value.[8]
[7] Lida Build’s appeal submissions paragraphs [72] – [82].
[8] Transcript 22 July 2010 page 12, line 5.
Matthew Pullos, a Certified Practising Valuer of Planet Valuations prepared a valuation in April 2010. He adopted two assumptions for the purposes of his valuation. The first is that the property was exposed to the market for sale in a formal marketing campaign and the second that a prudent and informed purchaser would make the contract to purchase subject to a building inspection. On this hypothetical scenario and noting that there was no evidence of building defects, he formed the opinion that there would be no diminution in value. He said the difference in the roof pitch would not be discernable to any purchaser by the naked eye and more importantly it is only a small part of the overall dwelling as a whole.
We observe also that this area of Bridgman Downs is rural residential with substantial houses built around the subject property.[9] The value of the overall property would conservatively be in excess of two million dollars. The house and improvements and its environs as described above and general knowledge support such a conclusion.[10]
[9] Valuation of Action Property Solutions Pty Ltd page 3.
[10]QCAT Act, s 28(3)(c); photographs of the house and improvements filed with the statements of evidence.
Mal Messingham, a Certified Practising Valuer of Action Property Solutions Pty Ltd also prepared a valuation in March 2010. The description of the property on page three of the report is consistent with the observations made above. It describes the area as a “prestigious rural residential precinct of Bridgman Downs”. The report discusses the differential of the roof pitch, 29° as opposed to 25°, and Mr Messingham says that the visual variation is “probably not noticeable to the casual observer” although it has repercussions. These included the difference in the roof hip to fascia join, the fascia on the northern elevation is lower than designed and narrower, it is similar on the southern elevation, and the doors protrude marginally beyond the fascia. Mr Messingham concedes that there is no readily available methodology or market evidence to assess the impact of these characteristics. Therefore he suggests that any assessment of diminution in value must be subjective. He says it is obvious the construction of the pool house has “gone wrong”. His methodology, being subjective, is to assess the proposed added value to the property as a whole, say $75,000 - $100,000 and then discount that to arrive at a subjective loss in value of $62,500. As this includes some defective tiling work the loss in value of pool house with a 29° roof pitch is $52,500 in his opinion.
The general rule for assessing damages for building work that is not in conformance with the contract is that a building owner is entitled to the difference between the contract price of the work and the cost of making the work conform to the contract.[11] That is what the learned Member did here. There is of course a qualification to the general rule that not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt.[12]
[11] Bellgrove v Eldridge (1954) 90 CLR 613 at 617.
[12] Ibid.
This approach was adopted in D Galambos & Son Pty Ltd v McIntyre[13] a case where there were several classes of defective building work. Defective work which could be remedied, defective work that the cost to remedy was unreasonable and defective work that could not be remedied. Woodward J allowed damages for the cost of rectifying the defective work that could be remedied and, following Bellgrove, he allowed a loss in valuation of about 15 to 16 percent for the work that the cost to remedy was unreasonable. He placed reliance on a valuer, who was also a builder, said the loss of market value was about $3,500 or $3,750 from a total value for the property of about $32,700. For the work that could not be remedied he made an allowance in damages for loss of amenity. The only distinction here is that the work the subject of this dispute is not defective.
[13] (1974) ACTR 10.
So the approach taken, which seems entirely sensible, is to look at the value of the property and then decide what amount, if any, that value would be reduced by the defective work where the cost of rectification would be unreasonable if that was found to be the case.
Here the contract called for a roof pitch of the pool house of 25° to conform to the house. Both valuers who inspected the property are of the opinion that the 4 ° difference in the roof pitch is not discernable. Having regard to the photographs and the proximity of the pool house to the house, this is undoubtedly correct. The question therefore has to be asked, is it a reasonable course of action to remove the roof and rebuild it at a cost of $37,638.98 even bearing in mind the differences referred to by Mr Messingham when the work is not defective?
In light of the reference back to the learned Member from the Appeal Tribunal, this is a question that should have been considered by the Tribunal. In our view by not addressing this issue the Tribunal made an error of law and on this point leave to appeal should be granted.
Is there any diminution in value
In deciding the appeal the Appeal Tribunal can, amongst other things, set aside the decision and substitute its own decision.[14] Having regard to Bellgrove and its application in D Galambos, and the valuation evidence it was certainly open to the learned Member to make a determination, in accordance with the reference whether, on the valuation evidence, there was any diminution. There is an argument that it would be unreasonable only because of the 4° differential in the roof pitch to remove the roof and undertake all of the associated works to rectify the roof pitch when, on all the evidence the difference is not discernable to the naked eye and the work, although not in compliance with the contract, is not defective. Had it been such a problem for the Millers one would have expected them to carry out the rectification work as part of their obligation to mitigate their loss and then claim that cost from Lida Build. This has not occurred and is unlikely to occur in the future.
[14] QCAT Act, s 146.
Although there is no valuation of the total value of the land and improvements, we are entitled to have regard to the comments by Mr Messingham as to the prestige status of the area, the size and quality of the improvements to assume it is worth some millions of dollars.[15] The approach taken by Mr Pullos is somewhat consistent with that taken in D Galambos and in our opinion is the preferable approach.
[15]Allow 523 sq m at a build cost of $2,000/sq m = $1,046,00 plus a hectare of land with a minimum value of one million dollars.
Mr Messingham’s approach is on the other hand, as he concedes, subjective which is of little assistance. What might be relevant to one purchaser may not be relevant to another. It is difficult to accept that with respect to a property with an overall value of some millions of dollars, any valuer would be able to say here that the sale price would be subject to a discount because of the differential in the roof pitch and associated facia heights and overhang. As Mr Pullos pointed out the items the subject of the dispute represents only a minute proportion of the overall decision making in what a buyer would offer to purchase this property. Although, Mr Messingham highlights some of the consequences of differential in roof pitch, the work is not defective and would pass a building inspection, if one relies on the report from the Queensland Building Services Authority.
Although we could come to our own view about the valuation evidence we have two concerns. Firstly, the reference back to the Tribunal was to consider this very point in circumstances where the learned Member not only has a better understanding of the evidence, he had in fact visited the site and had the defects pointed out to him so he could make a judgment as to how it impacted on the overall finish of the building. Secondly, although the question of diminution of value was touched on in the written submission, it was not addressed orally, nor was it specifically referred to by us during the oral submissions.
Reluctantly, we consider that in these circumstances, and also because of what we have to say about procedural fairness, it is best if we refer this issue back to the Tribunal for further consideration. That is the issue of whether, after having decided that the contract required the roof pitch to match the roof pitch of the existing house , an amount should be awarded on the Miller’s counterclaim for rectification of the pool house or diminution in value. The Tribunal notes that as part of this consideration needs to be given to the amount if any to be allowed for rectification on the fascia.
Fascia height
While there has not been any amount allowed in respect of the failure of Lida Build to comply with the contract in regard to the roof pitch there is a subsidiary issue in regard to the height.. An amount of $880 had been allowed in the original decision but this had been set aside in the first appeal and remitted back to the Tribunal for consideration with the question in regard to the roof pitch. The correction in the height of the fascia still needs to be attended to.
Lida Build provided a quote from Adroit Project Pty Ltd in the amount of $1,500 exclusive of GST which it accepted should be grossed up to $1,950 to include a 20% margin and GST. Lida Build submitted that this amount has been accepted by the Millers and that was not denied by the Millers in their written submissions. At the hearing Mr Miller contended that the only true issue was the roof pitch issue which would require rectification. Clearly the correction in question requires remedial work separate from any consideration in regard to the contractual matter in respect of the roof pitch. We accept Lida Build’s evidence in regard to the costs of this work and the Millers are therefore awarded an amount of $1,850.
Procedural fairness
As an alternative in regard to the roof pitch issue, Lida Build complains that if the approach of the learned Member to determine damages is correct, then it says it was denied procedural fairness at the second hearing. It says that the learned Member should have afforded it an opportunity to lead evidence about the cost to correct the pitch of the roof when he decided that the contract called for a 25° pitch. Reliance only on the evidence of AJ Plumbing and MCD Carpentry put Lida Build at a disadvantage because it did not contemplate that it would have to address the cost of this rectification work.
There is some support for this contention in the transcript. The discussion about the roof pitch in the second hearing is quite brief. No further evidence was led or taken at this hearing, it was more in the nature of submissions from both parties. When it was put to Mr Jover that Lida Build had not put in any evidence about the cost to rectify the pitch of the roof Mr Jover’s response indicates that he was obviously confused between roof height from the fascia board and the pitch of the roof. In a response to a comment by the learned Member that the only evidence on this cost of rectification was from the Millers, Mr Jover said:
I understood that to be the rectification of the roof height, the height being the problem, the legal roof height. When I submitted my stuff I certainly wasn’t appreciating that … Looking at those quotes there referring to I guess looking at doing the whole roof, I guess it comes back to whether you deem roof to match existing is not profile or colour and its roof pitch and its all of those things to deem that that’s what needs to be rectified when what we were talking about with the certification all that sort of stuff being that the fascia height was the issue not the roof pitch. Does that answer your question or not?
It seems clear from this exchange that Mr Jover did not appreciate that if the Tribunal was to accept the contract provided for a 25° roof pitch the only evidence of the cost of rectification was from AJ Plumbing and MCD Carpentry and if this was to be challenged he would have to produce some evidence as to the cost of rectification. In fact as a builder he could have given an estimate of this cost himself if asked.
Lida Build was self represented. The Tribunal has an obligation under s 29 of the QCAT to ensure the parties understand the nature of the assertions made and the legal implications of the assertions. It was not explained to Mr Jover explicitly that in the absence of any evidence to the contrary, if the Tribunal found the contact called for a 25° roof pitch, the only evidence about the cost of rectification was from the Millers and the finding would be a cost of $37,638.98. We are of the view that the Tribunal should have given Mr Jover an opportunity to adduce evidence on the cost to rectify the pitch of the roof. We therefore propose that Lida Build should be given an opportunity to adduce evidence in regard to the cost of rectification of the roof to correct the pits pitch.
Did the Tribunal make an error in finding the Millers were entitled to $4,200.00 for liquidated damages?
The first point for consideration here is whether there is any error in the learned Member’s conclusion that the date of practical completion is 20 January 2009. After calculating the days that are excluded for the purpose of the calculation[16] the Tribunal originally held that the date for practical completion was 4 February 2009. However at the second hearing Lida Build was unable to justify its claim that it should be given an allowance of five days because of the Miller’s interference in the progress of the work and this was then disallowed.
[16] Reasons paragraph [12].
Accepting the date of practical completion as 20 January 2009, Lida Build now say in this appeal that the time over which liquidated damages should be calculated should only be to either 27 January 2009 or 3 February 2009. The reason for this submission is that the Millers requested Lida Build to carry out further tiling work to the external areas of the pool house and also in the pump room. It is submitted that as a result of this request Miller’s, in effect, prevented Lida Build from reaching practical completion. It says that under the “prevention principle” time ceases to run.[17] This principle operates where the conduct of the home owner prevents the builder from being able to complete the works by the practical completion date. As a general principle, it makes good sense not to burden the contractor with liquidated damages where it is the conduct of the home owner which results in delays.
[17] SMK Cabinets v Kili Modern Electrics Pty Ltd [1984] 391 at 397.
However the difficulty for Lida Build here is that there is a specific mechanism in the contract for dealing with delays that involve variations. The extra tiling work was a variation to the contract. That is asserted by Lida Build and although not necessarily agreed to by the Millers it was found to be the case by the Tribunal. Therefore, the extra work, as a variation, then falls within the original contract. Lida Build agreed to undertake this work and could have sought an extension of time, at the time of the agreement, under clause 17 of the contract. It chose not to do so and the Appeal Tribunal held that clause 17 does not operate retrospectively. Therefore it is difficult to see how Lida Build can rely on the prevention principle when it agreed to do the work. As it did not apply to extend the practical completion time prior to agreeing to do the work under clause 17, it remains bound by the timeframe specified in the contract for this extra work.
Mr Miller, in his submissions challenges the finding of fact that the plumber Mr Flynn was engaged by the Millers. The learned Member carefully set out the basis for this finding of fact which was open on the evidence before him. Findings of fact by a Tribunal will not usually be disturbed on appeal if the facts inferred by the Tribunal, upon which the finding is based, are capable of supporting its conclusions, and there is evidence capable of supporting any inferences underlining it.[18] Similarly we see no basis for disturbing his finding that the Millers conduct in deciding to install a separate water meter for the pool on 20 March 2009 prevented Lida Build from reaching practical completion.
[18]Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125-126.
The end result is that the leaned Members assessment of liquidated damages must stand.
Whether the Tribunal erred in finding that Lida Build was not entitled to legal costs in relation to recovery of its practical completion claim.
Lida Build’s claim for legal cost is made pursuant to 34 of the contract. The clause is quite specific.
The owner must pay to the contractor any debt collection costs, including any legal fees on a solicitor and own client basis, associated with recovering or the attempted recovery of an amount under the contract.
The complaint here is that the Tribunal said that the claim for practical completion was subject to the Miller’s set off and therefore could not be regarded as a debt until the Tribunal determined all issues. Regrettably we disagree with this contention. All stage payments are moneys payable under the contract once the stage has been reached. Here the Tribunal found the date for practical completion was 20 January 2009 and practical completion had been reached by 19 June 2009 and the payment for this stage became a debt payable from 24 June 2009.[19]
[19] Reasons paragraph [75].
Lida Build’s claim for payment is liquidated and not a claim for general damages for breach of contract. Although in a practical sense when determining the end result in the case the parties respective claims will be offset one against the other as occurred here. But Lida Build’s entitlement to a judgment for money owed under the contract stands alone. The Miller’s claim for delay damages, cost of rectification or diminution in value all result from Lida Build’s breach or non performance in a timely fashion. This is not a case of the type contemplated by Thomas J (as he then was) in Ownit Homes v Batchelor[20] where the claim for money due under a progress claim was merged in the right to recover damages for breach of contract. In this case the claim for damages was treated separately from the homeowners claim for damages for rectification of the defective building work. Here there is no claim for damages for breach, but liquidated claim for money owed.
[20] 2 Qd R124 at 134.
Because Lida Build had an entitlement to the progress claim under the contract, it was entitled to recover the cost to recover that sum under clause 35 of the contract. To be clear these are not being sought to be recovered under the costs provisions of the QCAT Act.[21] Having accepted that the costs incurred by Lida Build to recover both the claims for the fixing stage and practical completion at $7,830.68[22] we see no reason why that should not be the sum allowed for recovery costs under clause 34 of the contract.
Whether the Tribunal erred in limiting interest on the fixing stage claim from 24 June 2009 and was not entitled to interest on the practical completion claim.
[21] Section 100.
[22] Reasons paragraph [76].
The Tribunal awarded interest under the contract for the non payment of the fixing stage in the sum of $7,954.65. The interest on the fixing stage has now risen to $9,111.49. We see no reason why the additional interest should not be allowed.
In addition, and it follows the discussion on the legal costs claimed to recover the practical completion payment, Lida Build says it is entitled to interest on this claim. The claim is for $7,475.54 calculated on the same basis as the interest on the fixing stage payment.
Once it is determined that Lida Build was entitled to be paid the practical completion progress claim on 24 June 2009, there is no reason why interest would not be awarded on this sum in the amount claimed.
This is of course opposed by the Millers. They say that there is no debt owed because after offsetting their counterclaim and deducting the award of interest ($7,954.65) and legal costs ($2,487.02) from the Tribunals award of $11,820.34 there is no debt upon which interest would accrue. The submission fails to address the contractual right to these claims by Lida Build under the contract. This is so even if there is a counterclaim for the cost of rectification or incomplete work.
We are of the view that Lida Build is entitled to this interest in the sum claimed.
Therefore the decision on interest will be substituted for an award of $16,587.03.
Miller’s cross appeal
In respect of the grounds of appeal in the Millers cross appeal we have largely dealt with those matters above. We see no error in the learned Members conclusion as to the date for practical completion being 20 January 2009. As for the findings about who was responsible for Mr Flynn’s work, again the conclusions by the learned Member were open on the evidence and no basis was established to interfere with that finding.
The learned Member carefully considered the application of the “prevention principle” as it related to the conduct of the Millers in deciding to install an additional water meter. This application of the principle depended on findings of fact about the conduct of the Millers. Once again those findings were open on the evidence and we see no basis to interfere with them.
The result is that the Millers cross appeal is dismissed.
Summary
As for Lida Build’s appeal, it is allowed in part. The award of damages in respect of the rectification of the roof pitch is set aside with an amount to be allowed to the Millers of $1,950 for the defective height of the fascia to the pump room. The decision to allow Lida Build’s claim for interest in the amount of $7,954.65 will be set aside and in lieu thereof $17,587.03 will be allowed. Similarly the amount of legal costs of $2,487.02 will be set aside an in lieu thereof $7,830.68 will be allowed.
This result will mean an adjustment to the table referred to in paragraphs 81 and 82 of the reasons as follows:
Claim for fixing stage $18,528.00
Claim for practical completion $15,675.00
Delay costs $ 367.75
Claim for electrical variations $12,433.21
Claim for ceramic tiling variations $ 1,346.40
Claim for interest $16,587.03
Claim for costs $ 7,830.68
Total $72,767.47
On the Millers side of the ledger the following:
Late completion damages $ 4,200.00
Claims for Shuttering etc $ 3,865.21
Minor Defects $ 1,267.50
Total $ 9,332.71
The only outstanding issue then is the question of whether the damages for Lida Build’s breach in not construction the pool house in accordance with the contract, that is with a 25° pitch is to be assessed as to the cost of remedying the breach or in diminution of value. Associated with this issue is to give Lida Build an opportunity to lead evidence as to the cost of the rebuilding the roof to 25° pitch.
Although the result of our findings is that the Millers should pay to Lida Build $61,484.76 we propose to direct that only $25,795.78 should be paid by 30 May 2013 with the payment of the balance stayed pending determination of the issues referred back to the Tribunal for further consideration.
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