LIDA Build Pty Ltd v Miller (No 2)
[2010] QCAT 431
•6 September 2010
CITATION: Lida Build Pty Ltd v Miller (No 2) [2010] QCAT 431
PARTIES: Lida Build Pty Ltd v Peter Miller & Susan Miller
APPLICATION NUMBER: BD314-09
MATTER TYPE: Building matters
HEARING DATE: 14, 15 & 22 July 2010
HEARD AT: Brisbane
DECISION OF: Mr Barry Cotterell
DELIVERED ON: 6 September 2010
DELIVERED AT: Brisbane
ORDERS MADE:
1. Therefore, after determining both Lida Build’s claim and the Millers’ counterclaim, the Order of the Tribunal will be that the Respondents pay the Applicant the sum of $47,479.31 less $8,572.00 making a total sum of $38,907.31 by 4:00pm on 27 September 2010.
CATCHWORDS : Contract – Domestic Building Contract - variation of - where variation not in writing;
Domestic Building Contracts Act 2000, section 84
Contract – Domestic Building Contract - Remuneration - Whether a building contractor can recover an amount for variation where variation not in writing;
Domestic Building Contracts Act 2000, section 84
Ross v Rangel [2004] CCT B432-02 followedAPPEARANCES and REPRESENTATION (if any):
APPLICANT: Lida Build Pty Ltd – self represented
RESPONDENT: Peter Miller & Susan Miller – self represented REASONS FOR DECISION
1. This is an application by Lida Build Pty Ltd (Lida Build) arising out of a contract with Peter & Susan Miller (the Millers) dated 7 October 2008 for the building of a pool house and ancilliary work.
2. Lida Build’s claim relates to $18,528 for its fixing stage, $15,675 for its practical completion stage, $5,329.50 for delay costs, $11,816.65 for electrical variations, $6,807.90 for tiling variations and $1,326.60 for roof variations amounting to a total claim of $59,483.65. The $1,326.60 for roof variations claim was abandoned at the hearing reducing the claim to $58,157.05. Lida Build have also claimed interest and costs.
3. The Millers are withholding money because they allege, amongst other things, that the works are defective and that Lida Build was late in completing the works. The Millers counterclaim of $72,521.15 is for reinstatement costs for defects and omissions of $58,903.94, damage to/loss of the Miller’s property $2,952, refund of monies paid direct to sub-contractors of $365.21 and liquidated damages of $10,300. In addition the Millers filed a valuation report that states that the diminution in value of the pool house equates to $62,500.
Witnesses
4. Lida Build filed a statement from Mr Darryl Jover but then sought and obtained a Notice requiring a witness to attend for Simon Baggio and Ben Sexton despite the fact that they had not filed statements. On the first day of the hearing the Tribunal was told that they simply were being called to confirm the evidence of Mr Jover. For this reason, and the fact that they had not filed statements when the topic of their evidence was always going to be in dispute, the Tribunal told Lida Build that they were not required. Lida Build also required the Queensland Building Service’s Authority Inspector, Mr Blair Lowrie, to attend for cross-examination.
5. The Millers filed a statement from Mr Miller and despite Lida Build referring to the involvement and alleged interference in the works by Mrs Miller, Mrs Miller neither filed a statement nor attended the hearing. On the first day of the hearing, Mrs Miller filed a medical certificate as to why she would not attend the hearing. This was despite Lida Build giving notice that she was required to attend. This left the allegations against Mrs Miller undisputed except where they depended upon hearsay. Attached to the statement of Mr Miller were two statements from Peter Flynn, a statement from Jason Harris, one from Ray Sweeney all of whom were required for cross-examination by Lida Build, and one by Gary Abel who was not required.
The contract
6. The written contract in Item 12 states that contract documents are:
- the Housing Industry Association QC3 2000 “Alteration, Addition and Renovation general conditions
- the Mondo Architects Job #1956 Issue D (Drawings W1001 -5001)
- Des Newport engineering drawings Job #06092 Rev B
- (Lida Build’s) Tender Conditions dated 21 September 2008 (Tender Condition)
7. At a meeting on 7 October 2008, the contract was signed by Mr Jover of Lida Build and the Millers and each page of the Tender Conditions, Mondo’s drawings, and the engineering drawings were initialled by the Millers to indicate that they were part of the contract.
8. I addition to these documents, the Millers allege that a hand drawn sketch relating to the bar, the cold room and cellar of the house and a Mondo’s Floor Plan W1001 with some hand written additions relating to concreting and sandstone tiling around both the bar, the cold room and cellar area of the house and the pool house (C-3) and a document headed Pool House Additions September 2008” formed part of the contract (D-2).
9. The Millers originally requested that Lida Build quote to build both the pool house and the bar, the cold room and cellar of the house. Due to financial constraints the Millers decided not to proceed with the bar, the cold room and cellar of the house in October 2008.
10. However, it apparently was agreed between the parties that Lida Build would do the concreting in relation to the bar, the cold room and cellar of the house and along the wall of bedroom 1 of the house at the same time that it did other concreting on the site in relation to the pool house. This is the work referred to on the Mondo’s Floor Plan W1001 with the hand written additions. As there is also the word “sandstone” on this plan along the wall of bedroom 1 of the house the Millers contend that this requires Lida Build to carry out the paving of this area with sandstone pavers. Mr Jover stated that this extra work has not been charged for.
11. D-2 reads like a check list or a list of reminders of things to be checked and requires the addition of extra information before it could be acted on with certainty as part of the contract. However, it does contain some things additional to the contract which Lida Build has carried out and the Millers argue that this provides evidence that D-2 was part of the contract. Lida Build contends that some of these things were to be claimed as variations to the contract. The Tribunal finds that D-2 did not form part of the contract.
12. There is agreement that the Millers were to supply the following:
(a) All timber doors and windows including cupboard doors;
(b) Timber pool fencing;
(c) All external and internal tiles;
(d) All electrical fittings including fans, lighting and an air conditioning unit;
(e) Plumbing equipment including toilets, a Lomax pumping system, basins, taps shower heads, towel rails, soap dishes and toilet roll holders etc;
(f) Shower screens and mirrors, including installation of the same;
(g) Shelving for the pool filter area;
(h) Bathroom vanity including installation of the same;(i) A stand-alone sauna containing a CD player (N.B. Lida Build stated that it did not know about the CD player).
13. Apparently, because the Millers were to supply the items listed above Lida Build’s Tender Conditions contains many references to “No allowance made, to be supplied by owner”.
14. However, these references led to disputes about whether the Tender Conditions meant that no allowance had been made for both the items and the installation of those items.
15. The other item which resulted in dispute was the Schedule 3 Excluded Items where under Special Conditions it was stated:
Rectification work to existing concrete slab, electrical/ plumbing/ vermin and white ant protection/ engineering inspections and or consult to be strictly done as a variation to the agreed contract price.
Variation of rectification work done on a cost plus 15% builder’s margin.”
16. The problem arose because when this rectification work was carried out by Lida Build it failed to comply with the relevant sections of the Domestic Building Contracts Act 2000 (the DBC Act) in relation to variations.
17. The relevant sections are as follows:
Part 7 Variations of contracts
79 Variations must be in writing
80 General contents of variation document
82 Variation document must be signed
83 Copy of variation document for building owner
84 Right of building contractor to recover amount for variation
79 Variations must be in writing
(1) The building contractor under a regulated contract must ensure any variation of the contract agreed to between the building contractor and building owner is put into written form—
(a) within the shortest practicable time; and
(b) for a variation consisting of an addition to the subject work—before any domestic building work the subject of the variation is carried out.
Maximum penalty—20 penalty units.
(2) Subsection (1) does not apply to a building contractor for a variation of a contract if—
(a) the variation is for domestic building work that is required to be carried out urgently; and
(b) it is not reasonably practicable, in the particular circumstances, to produce a variation document before carrying out the work.
(3) Subsection (4) applies if—
(a) a proposed variation of a regulated contract has not yet been agreed to between the building contractor under the contract and the building owner, but is proposed to come into existence on the signing of a variation document by the owner and the contractor; and
(b) the variation document is to be the first and only agreement between the building contractor and the building owner for the particular variation.
(4) If the proposed variation consists of an addition to the subject work, the building contractor must ensure that no domestic building work the subject of the proposed variation is carried out until the variation document has been signed.
Maximum penalty—20 penalty units.
(5) When the variation document is signed, the following provisions do not apply for the variation—
(a) subsections (1) and (2);
(b) section 82;
(c) section 83(1)(b);(d) section 84(2)(a) and (3)(a)(i), to the extent the provisions concern sections 82 and 83(1)(b).
80 General contents of variation document
(1) The building contractor under a regulated contract must ensure a variation document for the contract complies with the formal requirements for a variation document.
Maximum penalty—20 penalty units.
(2) A variation document complies with the formal requirements for a variation document if the document—
(a) is in English and is readily legible; and
(b) describes the variation; and
(c) if the variation was sought by the building contractor—states the reason for the variation; and
(d) if the variation will result in a delay affecting the subject work—states the building contractor’s reasonable estimate for the period of delay; and
(e) for a fixed price contract—states the change of the contract price because of the variation, or how the change of the contract price is to be worked out; and
(f) for a cost plus contract—states a fair and reasonable estimate of the costs associated with the addition or omission the subject of the variation; and
(g) if the contract provides for progress payments—makes appropriate provision for payments under the contract to reflect any change of the contract price caused by the variation.
82 Variation document must be signed
As soon as practicable after an appropriate variation
document is made, the building contractor must—
(a) sign the document; and
(b) take all reasonable steps to try to ensure the document is signed by the building owner.
Maximum penalty—20 penalty units.
83 Copy of variation document for building owner
(1) As soon as practicable (but within 5 business days) after a variation of a regulated contract is agreed to between the building contractor and building owner, the building contractor must give the building owner—
(a) a readily legible signed copy of an appropriate variation document for the variation; or
(b) if acceptable circumstances apply to the building contractor—a readily legible copy of an appropriate variation document for the variation, signed by the
building contractor.
Maximum penalty—20 penalty units.
(2) For subsection (1)(b), acceptable circumstances apply to the building contractor if the building contractor has taken all reasonable steps to try to ensure an appropriate variation document for the variation is signed by the building owner,
but the building owner has not signed the document.
84 Right of building contractor to recover amount for
variation
(1) This section applies if—
(a) the building contractor under a regulated contract gives effect to a variation of the contract; and
(b) the variation consists of—
(i) an addition to the subject work; or
(ii) an omission from the subject work that results in the building contractor incurring additional costs.
(2) If the variation was originally sought by the building owner, the building contractor may recover an amount for the variation—
(a) only if the building contractor has complied with sections 79, 80, 82 and 83; or
(b) only with the tribunal’s approval given on an application made, as provided under the QCAT Act, to the tribunal by the building contractor.
(3) If the variation is not a variation that was originally sought by the building owner, the building contractor may recover an amount for the variation—
(a) only if—
(i) the building contractor has complied with sections 79, 80, 82 and 83; and
(ii) the ground of unforeseen circumstances applies; or
(b) only with the tribunal’s approval given on an application made, as provided under the QCAT Act, to the tribunal by the building contractor.
(4) The tribunal may approve the recovery of an amount by a building contractor for a variation only if the tribunal is satisfied that—
(a) either of the following applies—
(i) there are exceptional circumstances to warrant the conferring of an entitlement on the building contractor for recovery of an amount for the
variation;
(ii) the building contractor would suffer unreasonable hardship by the operation of subsection (2)(a) or (3)(a); and
(b) it would not be unfair to the building owner for the building contractor to recover an amount.
(5) For subsection (3)(a)(ii), the ground of unforeseen circumstances applies if the variation became necessary because of circumstances that could not have been reasonably foreseen by the building contractor when the contract was entered into.
(6) If the building contractor is entitled to recover an amount for the variation of a fixed price contract, the amount is—
(a) the increase in the contract price stated, or worked out in the way stated, in the appropriate variation document for the variation; or
(b) if paragraph (a) does not apply—the cost of carrying out the variation plus a reasonable profit.
(7) If the building contractor is entitled to recover an amount for the variation of a cost plus contract, the amount is the amount worked out in the way stated in the contract.
18. Lida Build did not put the variations into writing and give a copy to the Millers. The Millers were not required to sign for the variations although they do agree that some were requested as variations and are prepared to pay for those. The Tribunal will deal with these later.
19. Each of the claimed variations must be dealt with separately. On the basis of the evidence, the Tribunal finds that the electrical variations constituted rectification work and was work sought by the building owner namely the Millers. The tiling variations also was work sought by the building owner namely the Millers. The roof variations are a little more difficult as the work was sought by both the Millers and Lida Build to rectify the problem that had arisen.
20. All of the rectification work was stated by Lida Build in the contract to be carried out as variations to the contract. This, however, required Lida Build to comply with the DBC Act in relation to variations. Its failure to do so meant that it could not claim for the amounts involved except under the limited circumstances in section 84 of the Act which sets out the builder’s right to recover for variations.
The electrical variations
21. The Millers have accepted that the supply and installation of decorative lighting was a variation to the Contract and accepts Lida Build’s claim in respect of this item in the sum of $682.22.
22. It was clear to the Tribunal that the other electrical work was always in contemplation by the parties so, in general, the ground of unforeseen circumstances cannot apply. Rectification work to existing electrical is specifically referred to under Special Conditions. Therefore, it could not be said that the variation became necessary because of circumstances that could not have been reasonably foreseen by the building contractor when the contract was entered into.
23. Therefore, Lida Build only may recover an amount for the variation with the tribunal’s approval given on an application made, as provided under the QCAT Act, to the Tribunal by Lida Build. The Tribunal recognises that Lida Build has applied to the Tribunal seeking to recover an amount for the variations.
24. Therefore, Lida Build only may recover an amount for the variation if the Tribunal is
satisfied that—
(a) either of the following applies—
(i) there are exceptional circumstances to warrant the conferring of an entitlement on the building contractor for recovery of an amount for the variation;
(ii) the building contractor would suffer unreasonable hardship by the operation of subsection (2)(a) or (3)(a); and
(b) it would not be unfair to the building owner for the building contractor to recover an amount.
Exceptional circumstances
25. The Tribunal agrees with what was said by Member Lohrisch in Ross v Rangel [2004] QCCTB 98 (28 May 2004), when he considered the term "exceptional circumstances" and stated:
In the use of this terminology the DBC Act must envisage circumstances somewhat above the normal, that is something out of the ordinary: Fay v Fay [1982J All ER 922 at 926 per Lord Scarman; Re: Washington [1967J QWN 10 per Hart J.3
26. Member Lohrisch in Ross v Rangel[1] noted that it is not exceptional (nor can it be in terms of section 84 of the DBC Act) for a homeowner or, indeed, a builder to raise a variation to the works. It is a common occurrence.
[1] Ross v Rangel [2004] QCCTB 98 (28 May 2004) para 66
27. Lida Build contends that what is exceptional in relation to these proceedings is the dealings the Millers had with the Lida Build's subcontractors. According to Mr Jover, Mrs Miller was instructing Lida Build's subcontractor, Mr Simon Baggio, as to the wiring and fitting off of the additional lighting, data/phone repairs and power outlets to the main house including the existing water bladder storage area under the main deck. However, Mr Jover states that during these occasions he was not on the Site. Therefore, these allegations by Mr Jover are clearly based on the hearsay of others who were not called to give evidence by Lida Build.
28. Further, Lida Build contends that as a consequence of Mrs Miller's instructions to Lida Build's subcontractor, it was not until Lida Build received an invoice from its subcontractor that it became aware of the additional electrical work carried out for the Millers. An examination of the invoices from the electrical sub-contractor does not bear out this contention except in relation to the supply and installation of decorative lighting.
29. Therefore, the Tribunal is not satisfied in relation to the electrical variations that there are exceptional circumstances to warrant the conferring of an entitlement on Lida Build for recovery of an amount for the variation.
Unreasonable hardship
30. The term "unreasonable hardship" was also considered in Ross v Rangel by Member Lohrisch where he stated:
... There are as well two aspects to the word "hardship", namely that which the sufferer from the hardship thinks he is suffering, and that which a reasonable bystander with knowledge of all the facts would think he was suffering: Rukat v Rukat [1975] 1 All ER 343 at 351 per Lawton
LJ.
Further, the word "hardship" was determined as meaning, in the context of the Landlord and Tenant (Amendment) Act 1948 to 1986 (NSW) as comprehending any manner of appreciable detriment whether financial, personal or otherwise and that each case must depend on its own particular facts: O'Brien (FG) Ud v Elliott [1965] NSWR 1437 at 1475 per Asprey J.
It is in the context of the above that I should now consider the addition of the word "unreasonable" as a qualification to the meaning of "hardship" within the section. What I consider the meaning to be attributed to the word "unreasonable" is not as with perhaps the word "undue" which is, in some cases, associated with "hardship" (that is to say excessive or out of proportion), but more akin to concepts of equity, justice and fairness. Again the determination is to be made in all of the circumstances and does not, as might perhaps a qualification such as "undue", necessarily disqualify an applicant who has been guilty of inadvertence or misapplication of the correct procedures.[2]
[2] Ross v Rangel [2004] QCCTB 98 (28 May 2004), paras 72 to 76
31. In Ross v Rangel, in relation to section 84(4)(a)(ii), Member Lohrisch determined that it would be inequitable for the applicant to bear the burden of the costs of variations, and for the respondent to have their benefit without just remuneration, or any remuneration at all, to the builder. Accordingly the Tribunal held that, in terms of the section 84(4)(a)(ii), the builder would suffer unreasonable hardship if the Tribunal were to exclude the builder from recovery of the amount of the variations.
32. Further, in Black, G. v Toowoomba Resort Pty Ltd [2007] QCCTB 122 (3 September 2007), Member Lohrisch again considered section 84(4)(b) of the DBC Act, and stated:
Where, as in this instance, there has been a specific instruction by the proprietor to carry out works at variance to the contract works, the works have been carried out and the proprietor had received the benefit of the works, a builder would, in normal circumstances, in my view, suffer unreasonable hardship by not being able to recover an amount for the works subject of the variation. Further, in such circumstances, it would not be unfair to the owner were the builder to so recover. Indeed, one rationale for part 7 and section 84 is that, in my view, it is not intended that the builder be penalized unfairly, and the owner unjustly enriched, the balance to be achieved between these matters being in the Tribunal's discretion
33. Here the Tribunal heard evidence that when Lida Build started the pool equipment was under a temporary housing and the building was to be partially built around it. The electrical box was located on two star pickets to the right of the pool equipment where the bedroom/games room was to be built. It was relocated into the pool equipment room. The Tribunal also heard evidence that the electrical conduits from the house to the pool house were not deep enough and had to be dug to 400 mm depth and 100mm of concrete placed on top.
34. In relation to this work, Lida Build submitted invoices from its electrical contractor for rectification of the Pool Filter $1,513.49, Pool Pumps and Filters Fitoff $1,577.62, operation and testing of Pool Lights $1,931.16, rectification of Conduits to pool house $2,975.50 making a total of $7,997.77 which it has paid or is payable to the electrical contractor.
35. It is not in dispute that the Millers were to supply an air-conditioning unit but they contend that Lida Build were to install it because of their contention that D-2 formed part of the contract. However, Item 27 of Lida Build’s Tender Conditions states in relation to Air-conditioning “No allowance made, to be supplied by owner”. Lida Build submitted invoices from its electrical contractor for $1,595.39 in relation to the installation of the Air-conditioning unit which it has paid or is payable to the electrical contractor.
36. From the evidence before the Tribunal, it is clear that the Millers required this electrical work to be carried out and have obtained a benefit from the electrical work which they now hope to obtain without just remuneration, or any remuneration at all, to the builder because Lida Build did not submit variation claims. Accordingly the Tribunal holds that, in terms of the section 84(4)(a)(ii), Lida Build would suffer unreasonable hardship if the Tribunal were to exclude Lida Build from recovery of the amount of these variations in the sum of $7,997.77, $1,595.39 and the agreed sum of $682.22. This is a total of $10,275.38 which is payable by the Millers for the electrical variations.
37. Lida Build has sought to charge the Millers the cost of Lida Build's subcontractor plus a mark up of 20%. This margin was based on clause 20.7 of the Contract that states that the price of a variation is to include an amount for the contractor's margin. The definition of "contractor's margin" means "the percentage of an amount to cover the contractor's administration costs, overheads and profit being 20%". Where the builder has failed to comply with the relevant provisions of the DBC Act and depends upon the discretion of the Tribunal to recover the amount of a variation under the hardship provision, the Tribunal considers that it would be difficult to just a builder’s margin under these circumstances. Therefore, the Tribunal rejects this part of Lida Build’s claim for the electrical variations.
38. However, Lida Build is entitled to claim GST on this total which would amount to $1,027.53 making a total of $11,302.91 payable by the Millers for the electrical variations.
The tiling variations
External tiling
39. At paragraphs 21 and 26 of Mr Jover's statement of evidence, Mr Jover states that he had explained to the Millers on two occasions that the external tiling had been excluded from Lida Build’s Tender Conditions. This was because the Millers had already engaged their own subcontractor (Jason Harris of Queensland Tiling Group Pty Ltd) for the external tiling, who at the time the Contract was entered into, had completed some of the external tiling around the swimming pool.
40. This is said to be further supported by the Tender Conditions which expressly stated that no allowance had been made for external tiling. The Tender Conditions relevantly provided at paragraph 22:
22. External tiling
- No allowance made, to be supplied by owner
41. It is Lida Build’s contention that if the Millers were only to supply the external tiles, then the Tender Conditions would have specified "external tiles" rather than "external tiling" and stated which areas were to be tiled - for example, similar to the reference to ceramic tiles in the Tender Conditions:
20. Ceramic tiles
- No allowance made, to be supplied by owner
21. Ceramic tiler to lay wet area floor and walls to 2. Om in shower only
42. It is clear from the evidence that Lida Build’s sub-contractor carried out external tiling and that Mr Jover advised Mr Miller that further tiles would be necessary which Mr Miller then obtained. Lida Build claims the sum of $5,157.50 plus its 20% margin of $1,031.50 plus GST of $618.90 making a total of $6,807.90 by way of a variation claim.
43. However again Lida Build did not put the variations into writing and give a copy to the Millers. The Millers were not required to sign for the variations although they do agree that some were requested as variations and are prepared to pay for them. The Millers have accepted that the installation of 9M2 of ceramic tiles to the pump room floor and 8M2 of additional bathroom wall tiling amounting to $1,020 was a variation to the Contract and accepts Lida Build’s claim. This would also incur the 20% builder’s margin and GST amounting to $1,224 plus 122.40 GST and a total of $1,346.40.
44. According to Mr Jover's statement of evidence (paragraphs 48 and 49), on 19 January 2009, Mr Miller told Mr Jover while he was on site that he could not contact Mr Harris from Queensland Tiling Group Pty Ltd in relation to completing the external tiling and asked if the Applicant's tiling subcontractor could complete the remaining external tiling. As a consequence of Mr Miller's request, Mr Jover arranged for the Applicant's tiling subcontractor to complete the external tiling around the pool house.
45. The Millers claim that the external tiles were unevenly laid and slope towards the building causing ponding to occur after rain. This is confirmed by the report from Mr Lowrie of the Building Services Authority.
46. The Millers reject Lida Build’s claim for external tiling for 45M2 of external pavers etc amounting to $4,137.50 plus the 20% builder’s margin and GST on the grounds on defective work. Lida Build admits that some of this tiling is defective. It claims that the slab laid by others did not allow for adequate falls but the tiling does result in ponding which needs rectification.
47. The Tribunal accepts that the external tiling was not part of the contract and, therefore, it can only be claimed by Lida Build as a variation. The Tribunal accepts that the external tiling was requested by the Millers but that Lida Build did not comply with the requirements of the DBC Act.
48. Here again Lida Build only may recover an amount for the variation with the tribunal’s approval given on an application made, as provided under the QCAT Act, to the Tribunal by Lida Build. The Tribunal recognises that Lida Build has applied to the Tribunal seeking to recover an amount for the external tiling variations.
49. Therefore, Lida Build only may recover an amount for the external tiling variation if the Tribunal is satisfied that—
(a) either of the following applies—
(i) there are exceptional circumstances to warrant the conferring of an entitlement on the building contractor for recovery of an amount for the variation;
(ii) the building contractor would suffer unreasonable hardship by the operation of subsection (2)(a) or (3)(a); and
(b) it would not be unfair to the building owner for the building contractor to recover an amount.
50. The Tribunal is not satisfied that there are exceptional circumstances and is satisfied that it would be unfair to the Millers for Lida Build to recover an amount for the external tiling variation when the work is admitted to be defective. Therefore, Lida Build’s claim for this variation is dismissed.
Delay Costs
51. Lida Build contracted to build the pool house within 45 working days and to complete the project by 4 December 2008. It is common ground that the work commenced on 20 October 2008.
52. Lida Build claim 8 working days for wet weather in November and this was conceded by Mr Miller at the hearing. It also claims 4 working days for work carried out for electrical variations in November and December and 5 working days for interference by the Millers in October, November and December. 3 working days are also claimed for the roof rectification on 22 to 24 December 2008. Lida Build then claim 17 working days for the Christmas shut down from 24 December to 19 January 2009. The Tribunal is satisfied that if all of the claimed delays are allowed, the date for practical completion could be varied from 4 December 2008 to 4 February 2009 at the very latest. Therefore, the Tribunal finds that Lida Build was entitled to claim an extension of the completion date to 4 February 2009.
53. The Tribunal accepts Lida Build’s submission that under Clause 16.2 of the Contract 0.05% of the contract price of $104,500 results in an amount of $52.25 per day being the appropriate amount to use for calculating delay costs. This results in the following amounts:
(a)Delays associated with variations 7 days x $52.25 per day = $365.75
(b)Delays associated with interference 5 days x $52.25 per day = $261.25.
54. That results in a total of $627.
The Millers really have no defence to Lida Build’s claim of $18,528 for its fixing stage and $15,675 for its practical completion stage other than by way of set-off of their counterclaim which the Tribunal will shortly consider.
Lida Build’s Claim
Lida Build are entitled to the following amounts in relation to its claim:Claim for its fixing stage of $18,528.00
Claim for its practical completion stage of $15,675.00
Delay Costs of $ 627.00
Claim for electrical variations $11,302.91
Claim for ceramic tiling variations $ 1,346.40
Claim for external tiling variations nil
Claim for roof rectification withdrawn
Total $47,479.31The Miller’s Counterclaim
55. The Millers have counterclaimed the total amount of $58,903.94 for alleged defective work and/or omissions in the Works. However, the Millers have also filed a valuation report which is now to form the basis of their damages claim for the defects and omissions. This report states that the diminution in value in the pool house as a result of the alleged defects and omissions equates to $62,500.
Roof pitch
56. The Millers have complained that the roof pitch of the pool house does not match the roof pitch of the existing house as per the drawings provided by Mondo Architects.
57. Mr Sweeney of Mondo Architects gave evidence that plans would normally show the roof pitch but these did not. He also gave evidence that the pitch of the existing house was meant to be 25 degrees but was recently measured and found to have been built at 29 to 30 degrees. Mr Jover had given evidence that Lida Build had checked the pitch of the existing house and pitched the pool house to match.
58. Mr Sweeney did give evidence that by examining the height of the wall which was clearly shown as 2450 on C-C of Plan W-2001 and the width of the eaves on Plan W-1001 the pitch could be calculated. This obviously was not done, probably because the pitch of the pool house was set to match the pitch of the existing house.
59. Lida Build’s claim damages for this alleged breach of contract by Lida Build on two bases. Firstly, they claimed $37,638.98 based on a cost of $25,833.78 being the cost of replacement roof trusses etc to comply with the architect’s plans plus $11,805.98 being the cost of removal of the existing colorbond roof and replacement of it. Secondly the Millers have claim damages based on a valuation report which assesses the alleged diminution in value of the work at $62,500 resulting from the alleged sub-standard building work.
60. On the basis of Mr Sweeney’s evidence, the Tribunal finds that Lida Build complied with the architects plans by following the pitch of the existing house. Co-incidentally it is clear that this was what the Millers required but the Millers were confused by their belief that the pitch of the existing house was 25 degrees. This confusion was extended by the architects becoming involved in the dispute and initially assuming was 25 degrees, rather than measuring the pitch.
61. Lida Build had claimed $1,326.60 for roof variations which arose out of its costs to rectify the roof when it was discovered that pitching the roof to match the existing house resulted in the fascias being below the required height of 2000mm under the Building Code of Australia. The pitch also resulted in the eaves being narrower than required by the plans which means that the French doors extend slightly out under the fascias. Lida Build by withdrawing this claim have paid for the cost of rectifying a mistake which arose from pitching the roof to match the existing house.
62. The BSA Report shows that the fascia outside the pool equipment room is still 1970mm and because it is in a traffic area to the pool gate the BSA assert that it needs to comply. Lida Build conceded this at the hearing. The Tribunal would have assessed the cost of this rectification on the basis of half of the previous cost claimed of $1,326.60 amounting to $663.30 but as Lida Build have quoted $880 to rectify this work adopts Lida Build’s quote.
63. Given the Tribunal’s findings that Lida Build complied with the architects plans by following the pitch of the existing house the Millers claim of $37,638.98 for rectification and their claim for diminution in value of the work of $62,500 must both be dismissed.
64. The Millers claim against Lida Build under three further headings as follows:
(a) Damages to the Millers' property by Lida Build;
(b) Items lost or thrown away by Lida Build in the course of the works
(c) Late Completion Damages
Damages to the Millers' PropertyDamages to Swimming Pool
65. The Millers allege that on frequent occasions during the works period from October to November 2008, Lida Build and its subcontractors, without the Miller's knowledge or consent, disconnected the pool filtration system in order to use power points for operating electrical power tools. There were several occasions when the filtration equipment was not reconnected for lengthy periods of time and overnight. The Millers allege that as a result the pool water became contaminated and it was necessary for the Millers' contractor to correct this contamination. Work was carried out between 13 November and 27 November 2008, at a cost of $711.00. The Millers require re-imbursement of this sum as damages. An invoice from the contractor reflecting this cost is included in Exhibit G-l.
66. However, an examination of this invoice by the Tribunal did not identify an amount of $711.00 let alone any proof that a payment was made to correct the alleged contamination. This claim must be dismissed.
Damages to Lawn
67. The Millers allege that Lida Build and all his subcontractors drove on the Millers' lawn on almost every occasion that they attended site. Traffic included delivery trucks, cement trucks as well a normal utility vehicles. The damaged area according to the rectification quote attached as Exhibit G-2 covers an area of 50m2 between the septic and the house. The Millers claim damages of $1,496.00 to rectify the damages.
The Tribunal finds that this claim does not arise from the contract between the parties and, therefore, must be dismissed.
Items lost or thrown away by Lida Build
Swimming pool filter Timer
68. The Millers allege that during the course of construction and demolition of the temporary structure, the timer for the filtration equipment was either lost of thrown away by Lida Build. The Millers require, as damages, reimbursement of the cost of replacement of the timer of $445.00.
69. The Tribunal is not satisfied that Lida Build has been shown to be the cause of the loss of the timer for the filtration equipment and, therefore, this claim must be dismissed.
CD Player for Sauna
70. The Millers allege that the CD player that attaches to the Sauna erected by Lida Build has been lost by Lida Build or its staff. This item was present when works commenced on the site. The Millers apparently are unable to replace the CD player separately as this brand is no longer imported into Australia. The Millers have estimated damages at $200.00.
71. The Tribunal is not satisfied that Lida Build has been shown to be the cause of the loss of the CD player and, therefore, this claim must be dismissed.
Late Completion Damages
72. The Tribunal has found that Lida Build was entitled to claim an extension of the completion date to 4 February 2009. Beyond this date penalties for late completion accrued from 4 February 2009 until the contract was terminated on 22 June 2009. This means that the Applicant is responsible for 138 days penalty at the rate stipulated in the contract of $50.00 per day or a total sum of $6,900.00. In this regard, the Tribunal finds that practical completion was achieved on 22 June 2009.
73. The Tribunal considered the fact that the Millers applied in March 2009 to the Brisbane City Council for a third water meter to connect to the pool house and only received approval resulting in a connection in early June 2009. This clearly delayed the plumber, Mr Flynn, from completing his work on the project and contributed to Lida Build finishing on 22 June 2009. Because this delay, which was attributable to the Millers requirements, occurred after the extension of the completion date to 4 February 2009 no deduction has been made to the penalties for late completion.
The payments for Plumbing74. Lida Build made an allowance in the contract of a provisional sum for plumbing of $4,500. The Tribunal finds that this included GST which was not specifically mentioned. Lida Build employed Mr Flynn as the plumbing contractor for the job at the request of the Millers who had had prior dealings with him going back to at least 2006, when according to Mr Miller at the hearing Mr Flynn retained a toilet pan for the pool house project. Mr Flynn had prior experience with the Lomax pumping system required by the Millers and with which Lida Build had no experience.
75. The Millers’ prior relationship and their subsequent dealings with Mr Flynn during this work resulted in points of dispute with Lida Build. Mr Flynn submitted all of his invoices to the Millers and the first invoice for $1,297.80 was paid by the Millers and deducted from Lida Build’s invoice dated 30 January 2009 for the Enclosed Stage of $36,575. This amount related to the $4,500 provisional sum work. Apparently Lida Build subsequently accepted that this payment had occurred.
76. According to Mr Flynn at the hearing, he was advised by Mr Miller that there was an agreement between the Millers and Lida Build that Mr Flynn should invoice the Millers. This was denied by Lida Build and apparently never confirmed by Mr Flynn directly with Lida Build.
77. On 2 October 2009, Mr Flynn provided the Millers with a “Breakdown of plumbing, drainage & gas fitting as requested by Peter Miller for work completed to pool house…”. In summary this included Plumbing $2,217.80, Drainage $3,339.66, Excavator & bobcat hire for landscaping $2,330.84, Sanitary items $3,412 and Gas fitting $652 making a total of $11,952.30. According to Mr Miller, the Millers have paid all of this amount with the exception of $3,200which has not yet been invoiced by Mr Flynn. Of this amount the Millers have been reimbursed $1,297.80 by Lida Build.
78. The Tribunal finds that the total of $11,952.30 was payable by the Millers for plumbing under the contract with the exception of the $4,500 provisional sum which was payable by the Millers as a provisional sum and included in the contract payments. Therefore, the Tribunal finds that Lida Build is responsible for the final $3,200 outstanding for plumbing if and when Mr Flynn decides to submit an invoice.
Pool Equipment Room Door
79. The Millers contend that this door was required to be ventilated. Lida Build supplied a door to match the garage door of the existing house as referred to in the Mondo Plans. Therefore, the Tribunal finds that if they want a ventilated door that the additional cost of such a door was their responsibility and this claim by the Millers must be dismissed.
Minor Defects
80. There are a number of minor defects which would have been required to be attended to by Lida Build if this contract had not ended in a dispute.
The Millers have alleged in their counterclaim that minor issues defects exist at the Site. These alleged defects with the Tribunal’s assessment of each are as follows:
(a) Overflow downpipe from water tank requires painting.
(b) Doors require sealing -BSA found no defect.
(c) Cupboard doors are not properly fitted -BSA found defective and Lida Build accepts liability to rectify.
(d) Hinge on French doors requires fixing -BSA found defective and Lida Build accepts liability to rectify.
(e) Fitting of bathroom fittings is incomplete .
(f) Grouting is required in front of games room -BSA found no defect.
(g) The pool gate requires adjustment so that it closes automatically -The Millers have withdrawn this claim.
(h) Concrete splashing to pillars below main deck requires removal - Lida Build accepts liability to rectify.
(i) Nails in the pool filter area have come loose and require rectification - Lida Build accepts liability to rectify.
(j) The trap door in the ceiling of the pool-filter room - Not proved.
(k) The Applicant disconnected the drain pipe at the northern end of the main house and has not reconnected the same -BSA found defective and Lida Build accepts liability to rectify.
(l) The cupboard door on the patio area requires sanding and sealing – The Tribunal accepts that this was not a new door and that Lida Build is not liable to rectify.
(m) Main house bedroom door is not fitted correctly and is painted stained -BSA found defective and Lida Build accepts liability to rectify.
81. In assessing a reasonable cost for rectifying these minor defects the Tribunal adopts Lida Build’s quote of $600 but adds a 20% builder’s margin and GST amounting to a total of $792 including GST.
Summary of the Counterclaim
Roof Pitch
- Claim for rectification $37,638.98 Dismissed
- Claim for diminution in value of the work of $62,500 Dismissed
- Rectification of fascia outside the pool equipment room $880
Damages to the Millers' Property
·Damages to Swimming Pool Dismissed
·Damages to Lawn Dismissed
Items lost or thrown away by Lida Build
·Swimming pool filter Timer Dismissed
·CD Player for Sauna Dismissed
Late Completion Damages $6,900.00
Rectification of Minor Defects identified in BSA Report $792.00
ORDER
Therefore, after determining both Lida Build’s claim and the Millers’ counterclaim, the Order of the Tribunal will be that the Respondents pay the Applicant the sum of $47,479.31 less $8,572.00 making a total sum of $38,907.31 by 4:00pm on 27 September 2010.
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