McCallum and Anor Trading As ABAC Homes and Construction v Tranquillity Homes Canberra Pty Ltd ACN 160 753 088 (Civil Dispute)

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

MCCALLUM & ANOR TRADING AS ABAC HOMES AND CONSTRUCTION v TRANQUILLITY HOMES CANBERRA PTY LTD ACN 160 753 088 (Civil Dispute) [2021] ACAT 60

XD 845/2020
Catchwords: CIVIL DISPUTE – oral contract for bulk excavation – unpaid invoices – counter claim for costs of rectification – dispute as to terms of agreement and approved variations
Legislation cited: Australian Consumer Law ss 60, 61, 62
Building Act 2004 s 43

Subordinate
Legislation cited: Building (General) Regulations 2008 s 33

Tribunal: Senior Member G Trickett

Date of Orders:  1 July 2021
Date of Reasons for Decision:      1 July 2021
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 845/2020

BETWEEN:
DOUGLAS HECTOR MCCALLUM & ELIZABETH ANNE MCCALLUM TRADING AS ABAC HOMES AND CONSTRUCTION
Applicant

AND:
TRANQUILLITY HOMES CANBERRA PTY LTD
ACN 160 753 088

Respondent

TRIBUNAL:Senior Member G Trickett

DATE:1 July 2021

ORDER

The Tribunal orders that:
1.The respondent is to pay to the applicant the sum of $6,426.94 comprising:
(a)     $5,782 for work done;
(b)     $319 for the ACAT filing fee;
(c)     $66.54 for the ASIC search fee; and
(d)     $259.40 interest.
2.The respondent’s counter claim is dismissed.
………………………………..
Senior Member G Trickett

REASONS FOR DECISION

Introduction

This matter concerns an oral agreement for building work. It illustrates the importance of ensuring terms of a contract are agreed in writing and any variations to such a contract are equally recorded in writing.
Mr McCallum, the applicant, was engaged by Tranquillity Homes Canberra Pty Ltd, the respondent, to complete top soil excavation and bulk excavation work for a dual occupancy residential site in Lyons, ACT. Mr Kevin Wilson is the sole director and the licenced builder responsible for that company. Only the bulk excavation work was in dispute.
The respondent paid the applicant $8,000 on 5 June 2020 of the $16,302 invoiced.
The respondent counter claimed for damages of $13,319.
At a hearing on 29 January 2021 the tribunal made orders which included, among others, that the respondent was to provide to the applicant, and the tribunal a Scott Schedule setting out the items in his counter claim by 5 March 2021. The respondent did not provide the Scott Schedule to the applicant or the Tribunal for this hearing. The issues for determination before the Tribunal are claims made by the applicant regarding the performance of a contract and payment of outstanding invoices for what the applicant says was the completed work, or otherwise not in accordance with what was agreed. And a subsequent counter claim by the respondent for costs incurred for delays and rectification work.

Summary of findings

Having regard to the evidence, I make the following findings.
The bulk excavation agreement between the parties was oral and based on three drawings, a “Landscape Concept Plan” (LCP) and two structural footing and slab plans. A fourth drawing, the “Site Plan”, was amended with hand written instructions and provided after the work had commenced as a variation to the contract. A fifth instruction was given, which was handwritten on another copy of the site plan, clarifying the split levels to dwelling 2. There were no other architectural or structural drawings in evidence.
There was an agreed hourly rate for the bulk excavation with the work to be invoiced once a payment due reached $2,000.
Some of the items described and specified in the four drawings were inconsistent and/or were amendments to the plans. The LCP indicated only one finished ground level, which the respondent said was the top of the retaining wall between the two dwellings. The two Finished Floor Levels (FFL) for the split level of dwelling 1 were not shown. The evidence was that one of those FFL was provided as a mark-up on the boundary fence. The levels on the LCP were ‘clouded’ using a computer and not hand drawn. In the construction industry clouding is something on a drawing which indicates that it is an amendment to either the prior information or it is a new addition to a drawing. The dwelling 2 footing and slab plan showed the step between the two levels of the split level dwelling in a direction inconsistent with the levels on the LCP. The structural plan showed that the step up was the reverse of the levels provided by the respondent. The retaining walls to the carport of dwelling 2 were not shown on the structural drawing. The site plan did not show FFL to either dwelling, other than what was an incorrect FFL of 610.75 for the northwest area of dwelling 2. The plan included notations placed inside the footprint of the dwelling, indicating that there was a BG (which I consider refers to a basement garage) and a ST (stair), which was not consistent with either the LCP or the structural plan.
The respondent varied the oral contract once work had commenced. He required the applicant to ignore the levels and set out as specified by him and provided by the surveyor, and as agreed in the original oral contract. He instructed the applicant to only provide two level platforms for the whole site, one behind the proposed landscape retaining wall at 612 and one in front of the same retaining wall at 610.
The applicant did the work as directed in the original oral contract. He did not do the work to the amended two levels as instructed. To some extent he over excavated the landscape area in front of dwelling 2 when compared to the one level on the LCP in the original oral contract. The applicant’s claim should be reduced by six hours to compensate the respondent for rectification of this over excavation.
The respondent did not supervise the work adequately. If he had, he would have easily identified during the work, and prior to the “Work as Executed Survey Plan” being produced, that the applicant was not following this site instruction. He most probably should have been aware of the area over-excavated when compared to the LCP and which could have potentially been resolved at that stage by the applicant at little or no cost to the development. As a result of this, I have estimated the time to rectify this work was six hours.
The respondent gave oral agreement as to additional payments to remove excess fill from the site and to reimburse the applicant for this work.
The applicant over excavated and/or over backfilled on at least one occasion which was observed by the respondent. The applicant should not be paid for the one day, eight hours, he worked on that area of the site.
The applicant did not over excavate the area of the carport and the front walls of dwelling 2 associated with the retaining walls. The extent of excavation was necessary to permit granular back fill and a drainage system to be installed.
The respondent should not have withheld payments of the applicant’s invoices.
The respondent varied the contract he had with the applicant to add the excavation of the strip footings thereby accepting the formed building platforms after the applicant had completed what the applicant considered was the required bulk excavation. This variation was added even though the respondent considered the applicant was not a capable contractor.

Background and the applicant’s claim

The applicant claimed compensation for $8,302 for work done and associated costs, $319 for the ACAT filing fee, $66.54 for search fees and interest. The amount for work done and associated cost was set out in the applicant’s Tender Bundle 1.[1]
[1] Exhibit A1 civil dispute application dated 11 August 2020
Mr McCallum said that he has held a Class C Building Licence since approximately 2006 and held a licence to operate excavation machinery since approximately 1988. He said that his work has mostly been excavation work on residential land and that this work is technical and requires an understanding of building and construction and related earthworks. He said that he estimates he has completed over 200 site cuts.
He claimed that the respondent conducted himself in a haphazard manner and provided incomplete and late instructions. He said that on or about 1 April 2020 Mr Sam Haddad, also an excavation contractor, contacted him saying to the effect that “we have a job to look at in Lyons”.[2] He said that on or about 8 April 2020 they both attended the site at around 4pm. He said that he observed the necessary characteristics relevant to the proposed work and noted the topsoil condition. He said that Mr Haddad told him that the respondent wanted an estimate to clean up the block and remove the green waste. And that “if we do the clean, we might get the site cut”.[3] He said that he told Mr Haddad that “he couldn’t do the site cut on a contract price because the soil is too loose. It will have to be compacted and rolled out. I don’t know how long that will take.”[4]
[2] Witness statement of Douglas Hector McCallum dated 6 January 2021 at [17]
[3] Witness statement of Douglas Hector McCallum dated 6 January 2021 at [21]
[4] Witness statement of Douglas Hector McCallum dated 6 January 2021 at [25]
Mr McCallum said that prior to commencing the work he was provided with plans for the construction of two dwellings on the site. He said that the plans were incomplete and did not represent the intended dwellings in several aspects. He said that while on site the respondent provided to him a site plan on which the respondent wrote the numbers 612 and 610. The plan was included in his Tender Bundle 1.[5] The plan showed the two hand drawn numbers either side of a proposed landscape retaining wall between the proposed dwellings.
[5] Page 13
The plan showed ground contours with reduced levels (RL) and the footprint of two single storey dwellings named House 1 and House 2. The site plan had been amended by hand showing the proposed landscape retaining wall extending to the side boundary and into the 3m side setback. The retaining wall was set parallel to the rear of dwelling 1. It was not dimensioned but was approximately 1.5m from the rear wall for dwelling 1, approximately 4m from dwelling 2 at one end, and 6m from the front terrace of dwelling 2 at the other end. The only FFL on the plan is 610.7 and was located at the northwest interior of dwelling 2.
The applicant included another copy of the same site plan in his Tender Bundle 1.[6] The handwritten amendments discussed above were not on this copy of the drawing, however, there were hand drawn amended levels to dwelling 2 and a hand drawn broken line across the centre of the footprint of the dwelling. At the northwest end of the dwelling, the original computer drafted FFL was crossed out and a new level of 613 added by hand. Directly below this number was 200 and, below that, 850. At the southeast end of the dwelling a FFL of 612.45 had been added by hand.
[6] Page 17
Mr McCallum said that best practice requires that the surveyor marks out the FFL on the site with timber pegs, or sometimes on permanent structures. The site would then be excavated to those levels.
Mr McCallum stated that the respondent said there were only two levels, however, Mr McCallum said there were five different levels, in addition to the driveway. He said he was never provided with plans that accurately reflected the levels that he was instructed to excavate. He said the slab plans he was provided with were inconsistent with the plans. He said the levels were not shown on the plans but were given to him verbally and drawn on the boundary fence. He said he was never given a complete set of the plans.
The applicant included two footing and slab structural plans in his Tender Bundle 1.[7] The slab plan for dwelling 2, dated 5 May 2019, showed strip footings and a square shaped 100mm thick slab at the northwest end of the dwelling, over what was noted as maximum 400mm thick compacted fill. The remainder of the slabs, including the terrace, were 120mm thick suspended concrete slabs on evenly spaced concrete piers. The plan showed that there was a step in the slab but it was not dimensioned and it stepped up from the northwest side of the dwelling to the southeast side of the dwelling. The step in the slab was also stepped in plan with three doglegs which extended approximately 3m in overall width from the centre of the dwelling at the rear up to the front external wall at the rear of the front terrace. There was a section detail cross referenced to another structural drawing through the front wall and the slab, however, this drawing was not in evidence. The notes on the drawing stated that; “All footings are to bear on same strata and on natural solid ground, otherwise bored piers may be required under.” This required the base of all footings to be placed on foundations that had the same bearing capacity. The notation ‘BRW’ referred to ‘block retaining walls’ in the footing schedule and it stated ‘refer to detail’. There are no BRW notations on the plan and no details in evidence. The walls below the floor at the rear of the carport were not identified as retaining walls. The slab plan for dwelling 1, dated 5 May 2019, showed strip footings and two rectangular shaped 100mm thick slabs, one at the rear of the dwelling and the other in the northern part of the lower level. The notes are the same for these slabs as for dwelling 2. The remainder of the slabs were suspended 120mm thick slabs on evenly spaced concrete piers. The plan showed that there was a step down between the suspended slabs, but the step was not dimensioned.
[7] Pages 18, 19
Mr McCallum said he commenced work on the rear of the site, dwelling 2, and was provided with 3 levels for dwelling 2. After completing the levels for the rear house he said the respondent instructed him to prepare two levels for dwelling 1. He said the levels where unknown to him up to this time.
He said that the levels were checked using a laser. Where levels were too low the site was filled in layers 100mm-150mm of fill which was then rolled to compact it repeatedly until it was higher than the subgrade level. Once this was achieved the filled and compacted area was cut back to the subgrade level. He said it was necessary to overfill a level, roll it out and then cut it to the necessary height. He said that the subgrade needed to have certain characteristics. He said that the respondent instructed him to excavate to 200mm above the FFL.
Mr McCallum said he worked on site from 14-16 April 2020 to do the site clearing for which he issued invoices and was paid for the work. He commenced the bulk excavation directly after the completion of the site clearing as he understood he was to carry out this work as he had been provided with the plans for the dwellings. He said that he worked for 5.5 hours on the bulk excavation, however, he said that he had also spoken to Mr Haddad on the 16 April 2020 and Mr Haddad informed him that as there was no agreement in place. The respondent had said that he would not pay for this work. Mr McCallum said that as a result he stopped work and it was not until 18 May 2020 that Mr Haddad contacted him to inform him that the respondent wanted Mr McCallum to continue the bulk excavation and that he had agreed to an hourly rate.
Mr McCallum said that he worked eight hours on 19 May, eight hours on 20 May, less one hour for additional green waste removal, and eight hours on 21 May when the site became impossible to work on due to the amount of excavated material. He said that on the same day Mr Haddad had come to an agreement with the respondent to remove excavated material from the site at a rate of $400 per truck load.
On 22 May he worked nine hours and also removed three loads of excavated material, with the last load taken away by Mr Haddad. On 23 May he worked five hours and also removed two loads of excavated material.
On 25 May he worked eight hours and also removed two loads of excavated material. On the same day he was informed by Mr Haddad that the respondent did not want any more excavated material removed from the site. Mr McCallum then stockpiled the material on site.
On 26 May he worked eight hours on dwelling 1 and also removed one truckload of concrete from the existing driveway. On about this date he said that the job was completed. He had contacted the respondent to confirm that the site for dwelling 1 was filled and compacted and that the surveyor was now required to mark out the final levels for the excavation of dwelling 1. He said that the levels were not known to him, that they were not marked on the plans and not marked on the site. He said that about the same day he spoke with the respondent on site and the respondent asked him if he had “got too much in there?” Mr McCallum replied that he had “to overfill to cut it back”. Mr McCallum said that from 27 May to 29 May he attended the site waiting for the surveyor to mark the levels for dwelling 1, and that this was done on the afternoon of the 29 May.
On 30 May he excavated into the compacted fill he had previously installed to form the first level for dwelling 1.
On 1 July he cut the second level for dwelling 1, working for seven hours. On this day and the previous day he stockpiled the excavated material on site. He said that this was to be his last day on site as he had completed the job, however, he said that the respondent had phoned him and requested he extend the edge 1.2m as a work platform. Mr McCallum said that to set up a waffle slab there was a need for greater access around its perimeter. He said that he did this work that afternoon and the following day which included three hours on 2 June. He said he did not charge for these two days.
Mr McCallum said that he did not complete the work on time due to the delay in the surveyor attending the site for dwelling 1. He said that at that time he was concerned that the respondent had not paid his accounts as promised. He referred to photographs he had numbered 1 to 9 and had taken of his completed job.[8] He said they showed the footings marked out and that his work was completed. He referred to other photographs numbered 10-17 that he had taken of the site in October 2020.[9] He said these showed the same soil that was on site in the photographs taken in June had remaining as it was then and that they showed the footings were dug based on his work. I note that photographs 2 and 10 are the same photograph, which were taken in October.
[8] Exhibit A1 (Tender Bundle 2) annexure 3
[9] Exhibit A1 (Tender Bundle 2) annexure 4
Photograph 1 was taken looking down the site and depicted three stockpiles of soil, two at the front of the site and one near the front of the proposed carport to dwelling 2.
Photograph 2 and 10 showed the front two stockpiles still in relatively the same form and the rear stockpile reduced in size.
Photograph 3 was taken from the front looking towards the southern corner of the site across dwelling 1. It showed surveyor pegs and the small batter related to the proposed landscape retaining wall. The larger batter at dwelling 2 could be seen at the rear, and to the right was the higher platform for dwelling 2.
Photograph 4 was a front on photograph of the large batter to dwelling 2 taken from the platform for dwelling 1 and showed the white lines depicting where the strip footings were to be dug as well as some surveyor pegs. It showed the location of the terrace front wall footing was forward of the batter and the front wall footing of the dwelling was located below the top of the batter, about a quarter of the distance down the slope.
Photograph 5 was taken from the side of dwelling 2 and showed footings set out and excavated at the proposed split floor level change.
Photograph 6 was taken just forward of the change in level.
Photograph 7 was of the top of the higher level and showed the cut into the rear of the site for the platform and the vertical cut at the rear of the carport.
Photograph 8 was taken just to the side of photograph 7 and showed the carport cut and the white marker for the strip footing at the rear wall of the carport.

Photograph 9 looked along the front section of dwelling 1 with a stockpile to the right.
Photograph 11 was taken from the rear of the lower split level of dwelling 2 and showed the cut external to the dwelling, the excavated rear strip footing, and part of the footing at the split-floor level step. The trench mess was installed in the excavated footings.
Photograph 12 was just to the right of photograph 11 and showed the footing to the split-floor level step and the footing for the front wall of dwelling 2. The stepping of the floor in plan appeared to be amended from the layout shown on the structural drawings.
Photograph 13 was taken from on top of the slope of the larger batter. It showed the strip footing for the central front wall having been poured and the footing for the front wall of the dwelling, at the rear of the terrace, excavated into the batter and the trench mess installed. The excavation for this footing was relatively deep.
Photograph 14 was taken from a similar position as photograph 3, with slightly more of the right side of the site in the photograph. The strip footings of dwelling 1 were poured. There was excavated material adjacent to some footings which was most probably what was taken out to construct the footings. There was some excavated material between the two dwellings forward of the larger batter to dwelling 2. The material does not appear to be compacted.
Photographs 15 and 16 showed the two front stockpiles relatively untouched from the time of the earlier photograph.
Photograph 17 showed the stockpile in front of the carport which had been reduced in size by approximately 1/3 from the time of the earlier photograph.
Of the first set of photographs Mr McCallum took, he identified the stockpiled excavated material on photograph 1 and 2. He noted the surveyor pegs, the overall view of the work done and the batters towards the rear of the site on photograph 3. On photographs 4 to 8 he identified in more detailed the set out of the footings marked in white lines that had been done and also identified the batters he had constructed. Of the second set of photographs, he noted the state of the site and that the strip footings had been excavated and the reinforcement placed in the rear trenches, and that the footings to dwelling 1 had been poured. He identified the amount of stockpiled excavated material on site.
Mr McCallum said that the only complaint raised with him by the respondent in an email of 8 June 2020 was that he charged for overfilling on 26 May and changed for correcting the overfill on 30 May 2020. He said that the respondent didn’t understand that his approach to filling then cutting back to the required level was necessary. He said that the respondent then sought to bargain by paying part of the account, however it wasn’t the amount he promised.
In response to the respondent’s contentions, Mr McCallum said that the respondent did not raise any concern or complaint about his work until he requested payment for his accounts. He said that he did not agree to meet with the respondent on site to salvage the relationship, he did not make mistakes or cause delays, and that the job was not managed in a clear and pragmatic way by the respondent.
The applicant said that the chain of emails between the applicant and the respondent in the first half of June, set out in the applicant’s Exhibit A1, showed an endeavour to agree on a solution that would result in Mr McCallum doing the additional work to excavate the footings and piers, and the finalising of payment to Mr McCallum for work done.

Background and the respondent’s claim

The respondent disputed the applicant’s claim and counter claimed for $13,319, made up of:
(a)$2,200 for each truck load of excavated material removed from site in error;
(b)$4,000 for engaging a new contractor to rectify the mistakes by the applicant;
(c)$2,800 for the additional machine hire and trucks to bring fill back to the site;
(d)$4,000 for delays and rescheduling trades due to mistakes made; and
(e)$319 for the ACAT filing fee.
The amounts were set out at page 3 of his Appendix 1 attached to the Response – Civil Dispute ACAT form.
Mr Wilson said that he has held a Class B Building Licence since approximately 2011. He said that he has worked on large scale residential and commercial building projects.
Mr Wilson said that he engaged the applicant to complete the cut for the site. He gave the applicant clear written instructions to cut the back of the block behind the proposed retaining wall to the level 612 and the remainder of the site in front of the proposed retaining wall to 610. He said he didn’t mark these levels on either of the dwellings or ever refer to these as the heights for the proposed residences or FFL. He gave the applicant a plan with the written instructions, stating that the applicant needed simple instructions as he had called him back to site on multiple occasions to clarify things.[10]
[10] Witness statement of Kevin Wilson dated 10 March 2021 at [12]-[15]
Mr Wilson said that he came to site one afternoon to find the applicant filling a section of the site that was already too high and needed to be cut lower. He said that the applicant was initially apologetic when he realised his mistake and said he would work out something on the hours. The following day he was on site and said that the applicant explained that he needed to fill that part of the site before cutting down. Mr Wilson said that this was not required and it made no logical sense as the area was already too high and had to be cut much lower before reaching the required level, so he was essentially just creating more work for himself. He said that he never gave the applicant any instruction to fill in levels of the block. He never asked him to use his initiative or what he thought was best.
Mr Wilson said that the only variation he gave from his original instruction of forming two levels for the site was that he instructed the applicant to allow for a step in the rear dwelling. He said that he had clearly marked where the step was required and gave written instructions.
Mr Wilson said that after he removed the applicant from the site due to the issue now before the Tribunal, he still tried to negotiate in good faith, as he didn’t want to waste time and needed to get the job moving forward. He offered to pay $3,500 beyond the $8,000 already paid, as he didn’t want to be seen doing the wrong thing by Mr Haddad.
Mr Wilson said that he had a survey prepared of the applicant’s work and as a result he was now going to have to engage someone else to fix it for him. He said that the applicant had not followed his instructions and left the site in a mess. He said he told the applicant that he would now not pay the additional $3,500 and would seek damages for the mistakes made on site. Mr Wilson said that he engaged a new contractor in July to fix the site and included in his witness statement an invoice for the work from the new contractor. Mr Wilson said that the applicant, in addition to not providing the two levels as instructed, had overcut an additional section of the site related to the retaining walls.
Mr Wilson said that in April the architect provided the applicant with a site plan by email that showed the site levels and also gave him a copy himself on site. The plan he gave to the applicant on site is Annexure D to his statement.[11] It is titled “Proposed Dual Occupancy Landscape Concept Plan, drawing number BA002”, dated 23 April 2020. The plan did not include contour lines or building dimensions. Relevant to the bulk excavation work it included three levels for dwelling 2 and one level for dwelling 1. The rear dwelling footprint had a level shown of 613.3 at the northwest area of the dwelling adjacent to a carport level of 610.8 and a lower level for the remainder of the dwelling of 612.45. The plan for the front dwelling footprint included a level for the carport of 610.3 and did not include levels for the dwelling. There were also two steps, one next to the carport of the dwelling, in front of a fence line, and the second between the landscape retaining wall and dwelling 2. There was a stair with five steps that led down from the terrace. There was a level 611.33 in the landscape located a little behind the rear of the dwellings, on or adjacent to the proposed landscape retaining wall. The landscape retaining wall extended to the northwest, just beyond the adjacent external wall of dwelling 1 and up to a proposed path next to the driveway. In the opposite direction the landscape retaining wall extended just short of the 3m side setback. The internal planning, including the split levels, was not shown on either plan. Each level was ‘clouded’. Mr Wilson said they were clouded by him to make it clear to the applicant what was required.
[11] Exhibit R1
Mr Wilson said that the applicant didn’t understand the drawing and that is why he gave him the instruction to provide two levels either side of the proposed retaining wall, to cut to 610 at the front and to cut to 612 at the rear. This instruction was given to the applicant and was accompanied by a site plan, drawing number BA001, dated 24 January 2020.[12] This site plan included, amongst other information, the footprint of the dwellings, contour lines and the proposed landscape retaining wall with the Mr Wilson’s hand written number 612 behind the retaining wall and 610 in front of the retaining wall. The site plan included only one level for dwelling 2, 610.75, which was located in the northwest of the dwelling. The carport level was not shown. There were two notations inside the dwelling ‘ST’ and ‘BG’. The entry stair was notated ‘ST’. The notation on this site plan may be read as stating that there was a basement garage at level 610.75 with an internal stair up to the level above. This was inconsistent with the landscape plan and the structural drawings provided by Mr Wilson. There did not appear to be any other similar notations relevant to the internal planning. The drawing notes state that. “All cuts & FFL to be verified on site by a registered surveyor.”
[12] Exhibit R1 annexure E, page 3
The site plan showed that the site sloped from the west rear corner at 615 to the front east corner at approximately 608.8, a fall of approximately 6.2m. The contour line on the lower side of the landscape retaining wall where Mr Wilson marked 610 was 610. The slope along the boundary at this location, from the rear corner to the proposed retaining wall, was approximately 612.5 to 610. The slope in the central axis of the site perpendicular to the rear boundary up to the proposed retaining wall was approximately 614 to 611.4. The datum ground level (natural ground level) at the northwest end of the retaining wall was approximately halfway between the 611 and 613 contours and therefore it can be extrapolated to be approximately 612. The carport to dwelling 2 had a contour line across its centre of 613. The carport to dwelling 1 had a contour line at its side of 611. There was a fall across dwelling 1 of more than 2m. There was a fall across dwelling 2, including the raised terrace of approximately 3.5m. There are additional retaining walls at site cuts to the west of dwelling 2 and beside the driveway to much of the northwest boundary.
The site plan was amended by hand to show the landscape retaining wall extending beyond the 3m side setback and up to the side boundary at the southeast end.
Mr Wilson said that he had a “Work as Executed Survey” prepared in July by M & M Surveys which he said highlighted the areas where the applicant had not done the bulk excavation as directed.[13] The first page was a letter from Mark Murphy, dated 11 February 2021, which stated that in April 2020 they were engaged by the respondent to do a mark out for the site for excavation purposes. It also stated that on the request of the builder they attended the site on further occasions to confirm marks, and that on 10 July 2020, at the request of the builder, they conducted a “Work as Executed Survey”. Mr Wilson said he had highlighted in colour the applicant’s errors with the site cut on the “Work as Executed Survey”. The areas highlighted were all associated with dwelling 2 and the landscape area in front of dwelling 2. It extended from the area southeast of the terrace and for the full extent of the landscape area behind the proposed landscape retaining wall, and then a short distance behind the proposed location of the front walls of the dwelling.
[13] Exhibit R1 annexure E
Some of the numbers on the exhibit are very small, were difficult to read and were occasionally overlapped by the contour lines. The survey plan showed a batter just behind the front of the proposed terrace, extending down from just over 1m inside the proposed dwelling 2 footprint at a level of 612.23 to approximately 610.7. The site then appeared to be relatively flat towards the rear of the proposed retaining wall where the top of the batter was 610.63 and the bottom was 610.27. The level at the carport area to dwelling 2 was 610.7. The site was then relatively flat up to the midsection of dwelling 1.
There was a batter extending along the front of dwelling 2 in a dogleg from the rear of the carport and up to the centre line of the dwelling which was located approximately a metre inside the footprint of the dwelling. The height of the batter varied from approximately 3m at the corner nearest to the boundary down to approximately 2.3m at the forward most section of the dwelling. There was an approximate 800mm high batter extending across the dwelling footprint perpendicular to the front batter at the centre line of the forward most part of the dwelling footprint.
Mr Wilson attached two photographs to his statement,[14] which he said showed that the applicant had overcut by 800mm and over 1m in some areas all around the second dwelling. He said that the applicant knew he was using ‘Dincel’ retaining walls for the dwelling and that he had instructed him to cut 100mm–200mm past the point marked by the surveyor. This, he said, meant he would require more fill behind the retaining walls to bring the site back to the correct levels. Mr Wilson did not identify the specific location he had photographed, however, it is most likely the area at the carport to dwelling 2. The photographs showed the ‘Dincel Walls’ (proprietor permanent formwork for walls) in place. The first photograph shows a vertical cut at the side of the formwork, with the foreground cut being slightly more cutback. The second photograph was taken looking down and shows a sloping side to the excavation.
[14] Exhibit R1 annexure C
Mr Wilson said that he had to engage another excavator, Group of Trades Pty Ltd, to rectify the site. In a letter dated 12 February 2021,[15] Mr Sammy Hajj confirmed the engagement and stated that he met the respondent on site in July 2020 and that the respondent told him that too much soil had been removed from the site and the respondent now had a large area of the site well below the required height to start construction. Mr Hajj stated that his firm moved six trucks of fill onto the site and filled where required so Mr Wilson could commence construction. Mr Hajj attached the invoice for the work. The tax invoice, No. 0015147, is dated 20 July 2020. The invoice states it is for machine hire and labour to move and fill soil across the block where required, and six trucks of fill trucked to site and unloaded for use: total $7,480 including GST.
[15] Exhibit R1 annexure B
At the request of the applicant, Mr Wilson provided a statutory declaration from Mr Sammy Hajj, the sole director of Group of Trades Pty Ltd. It confirmed his engagement. It said that the work performed was to bring trucks of fill to the site and use machinery and labour to fill sections of the site that had been cut too low, that the trucks brought the fill to site in July 2020 and the work was completed in November after the proprietary ‘Dincel Walls’ were erected on site. He confirmed he had been paid for the full invoice No. 0015147 provided to the respondent on completion of the works in December 2020. He attached a receipt dated 18 December 2020 for $7,480.
Mr Wilson relied on the July date for when the fill was delivered to the site. It was open to the respondent to support this with photographic evidence of the additional substantial stockpile of fill on the site from July up until November. It was open to him to include photographs of the area after it had been backfilled and compacted when Mr Hajj said the work was completed. He did neither. Mr Wilson was asked questions in relation to photographs 10-17 taken by Mr McCallum of the site in October 2020,[16] as to the filling of the site. Mr Wilson said that the larger batter at dwelling 2 had been filled and was not the same slope as the applicant had formed. He also stated that the area in front of the poured footing in photograph 13 showed stockpiled fill. He referred to this as the alfresco area. I understand this to be the front of the dwelling and not the terrace footing, as the photographer is standing on the batter where the proposed terrace was to be constructed. The fill that Mr Wilson identified is also seen in photograph 12 forward of the centre of dwelling 2. It is not a large stockpile of fill and is similar to other areas of the site where the strip footing trenches have been excavated and the excavated material then set to the side, away from the building platform, in an elongated form.

The legislative scheme

[16] Exhibit A1 Tender Bundle 2

Both parties are subject to the provisions of the Australian Consumer Law (ACL), the building work in question is considered a service under the ACL, as such sections 60, 61, and 62, apply:
60Guarantee as to due care and skill
If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.
61Guarantees as to fitness for a particular purpose etc.
(1)     If:
(a)a person (the supplier) supplies, in trade or commerce, services to a consumer; and
(b)the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer;
there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose.
(2)     If:
(a)a person (the supplier) supplies, in trade or commerce, services to a consumer; and
(b)the consumer makes known, expressly or by implication, to:
(i)the supplier; or
(ii)a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made;
the result that the consumer wishes the services to achieve;
there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result.
(3)     This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier.
(4)     This section does not apply to a supply of services of a professional nature by a qualified architect or engineer.
62Guarantee as to reasonable time for supply
If:
(a)a person (the supplier) supplies, in trade or commerce, services to a consumer; and
(b)   the time within which the services are to be supplied:
(i)is not fixed by the contract for the supply of the services; or
(ii)is not to be determined in a manner agreed to by the consumer and supplier;
there is a guarantee that the services will be supplied within a reasonable time.
Under the contract both parties must act reasonably. The work is to be carried out in accordance with the guarantees of the ACL. The applicant must provide the work with due care and skill.[17] Upon completion, the work must be fit for the specified purpose and it must be completed within in a reasonable time.[18] The respondent must give the applicant the necessary information to allow the applicant to properly undertake the excavation work, including setting out the work by a licensed surveyor and sufficient information such as properly coordinated plans with the required levels. The respondent must supervise the work competently and direct the manner of performance of the work of the applicant.

The nature of the excavation works

[17] Australian Consumer Law section 60
[18] Australian Consumer Law sections 61, 62

Top soil excavation is the removal of the top most material on the site and any vegetation.
Bulk excavation is the removal and/or addition of soil to bring the site to the right level to prepare for the building of footings and slabs, and, where required, landscaping. It may involve both cut (reducing higher levels) and fill (adding fill to lower levels) with the aim to reuse as much of the excavated material in the fill as possible if the material is appropriate for compacting. Fill is required to be compacted in layers. I am satisfied that none of the backfilled areas of the work were required to be compacted to take building loads such as footings and slabs.
Over excavation is where the site is excavated in addition to the amount required to be removed. Over excavation will require additional work to compact the added fill. Over filling is where the site is filled higher than the levels required. Over excavation and/or over filling would not normally be paid for under a standard contract.
Bulk excavation is a critical construction activity as it is part of the necessary work that, if delayed, will have a direct effect on subsequent activities, and therefore on the date of completion of the building work. The completion of excavation is one part of the first stage of building work that a building certifier must inspect to determine if the work can be certified and proceed to the next stage.[19]

What, if anything, is the applicant not entitled to?

[19] Building (General) Regulations 2008 section 33(a), see also Building Act 2004 section 43

The applicant is not entitled to claim for one day where he excavated and/or over filled then, on the following day, cut the same area. Over excavation and/or over filling is not ordinarily claimable in the construction industry. While the work undertaken extended over two days, the applicant needed to form a platform and, if done in the standard way, it would have taken a reasonable time to complete. The claim is reduced by eight hours at an hourly rate of $180 for a sub-total of $1,440 including GST.
The respondent was given a direction at the previous abandoned hearing to provide a Scott Schedule to address the extent of his claim, with respect to his assertion that the applicant had over excavated the site. The respondent did not provide a Scott Schedule to either the applicant or the Tribunal for this hearing. My assessment of the over excavation, set out below, is an attempt to examine this assertion.
I am not satisfied that the excavation in front of dwelling 2 associated with the carport retaining walls and the front of the dwelling up to the terrace, but excluding the terrace area, is over excavation with respect to the vertical cut, as set out in highlighter by the respondent in Annexure E, the “Work as Executed Survey”, and Annexure C of his witness statement.[20] This work is to the proper standard.
[20] Exhibit R1
The proper standard of work once excavation was completed at the cut area of the front of dwelling 2, where the retaining walls were proposed to be constructed, is generally accepted in the construction industry to be either one of the following. Option one would be a near vertical cut, as shown in the respondent’s photographs. The retaining wall would be installed with a drainage system, such as an agricultural line located at the bottom of the cut behind the wall. The area between the cut face and the back of the retaining wall would then be backfilled with granular material, all to minimise hydrostatic pressure on the retaining wall and possible collapse of the excavated face onto the wall. Option two would be to form a stabilised angled cut so that the existing foundation material does not collapse onto the wall. This does not necessarily need to be backfilled, however, a drainage system would still be required at the base of the angled cut behind the wall.
The work of backfilling with granular material behind the retaining walls was not part of the oral agreement. The retaining walls to the carport were also intended to support the concrete floor level above and this would require a transition slab that spans, and is suspended over, the granular backfill or the void at the angled cut. The retaining walls and this slab were not drawn or notated on the structural drawings provided.
Photographs 7 and 8 in the applicant’s Tender Bundle 2 record the well-formed vertical cut at this location in early June 2020.[21] The two photographs at Annexure C of the respondent’s witness statement are not overall views of the areas photographed.[22] Each was a close up of an area after the strip footings had been poured and the proprietary retaining wall permanent formwork was in place. The respondent did not identify the exact location of the photographs, however, the first photograph shows an area of cut eroded back, which I have concluded may be just before the front of the carport and the corner of the cut, which returns 90 degrees. In the background of the photograph it showed a vertical cut. The second photograph may or may not be in the same location. The photographer is standing on a small area of slab which is stepped up from the strip footing below. It showed what appears to be either a sloped stabilised cut or a batter with the proprietary retaining wall form installed. As the slab was located in what will be the subfloor area, it is unclear where this photograph was taken. It is possible that the act of excavation of the footing in this area, and what appears to be a small slab area, may have resulted in some damage to the original cut face.
[21] Exhibit A1
[22] Exhibit R1
The respondent did not identify any stockpiles of granular fill on site after July 2020 nor was there any shown in the photographs taken in October 2020 which were in evidence.
I am satisfied that what has been described by the respondent as over excavation of the site, as coloured on Appendix E, the “Work as Executed Survey”,[23] between the two dwellings but excluding the areas referred to directly above, was correct and needs to be assessed against the applicant’s claim. The level for either the top of the landscape retaining wall or the level of the landscaping at that specific location on the LCP was 611.33. The datum ground level at this location before excavation was approximately 611, which I have extrapolated from the site plan.[24] A nominal 200mm of top soil and laid turf to complete the landscaping would suggest that at this single point no excavation was necessary to achieve the finish ground level on the rear side of the retaining wall, other than for the installation of the retaining wall, granular back fill and an agricultural line. On the opposite side of this proposed landscaped area at the base of the stair that extends down from the terrace of dwelling 2 the finished ground level (FGL) is approximately 611.35 (an approximate 1.1m being a total of five steps and a threshold step below the FFL of 612.45). This approximates to the level at the retaining wall.
[23] Exhibit R1
[24] Exhibit R1 annexure E, page 3
The datum ground level at the southeast end of the retaining wall, located just over 3m from the boundary, was slightly above 610. There was no excavation required to achieve the landscape levels at the southeast end of the retaining wall.
The datum ground level at the northwest end of the retaining wall was approximately 612, which I have extrapolated from the site plan. The required carport FFL for dwelling 2 was 610.8 and the datum ground level at this carport was on average 613. The FFL for the carport to dwelling 1 was 610.3. The FFL for dwelling 1 was not provided on any drawing however it was stated by the applicant to be 610 as marked by the surveyor on the boundary fence. The retaining wall at the northwest end does not return back towards dwelling 2 to retain soil, therefore the FGL would need to be at the path level which should not be below the adjacent floor level of the upper split-level of dwelling 1, 609.9 (610 – 100 mm). The level of the path was not shown. The level excavated to on the “Work as Executed Survey” is difficult to read, however there is a small batter where the top may be 610.6 and the bottom 610.28. This area has not been over excavated.
The level at the gate adjacent to the entry stair to dwelling 2 is three steps up from the carport, which equates to approximately 550mm. The FGL, less 200mm for top soil and laid turf, at the gate would be approximately 611.15 (610.8 + 0.55 - 0.2). The level at the base of the cut adjacent to this location is shown as 610.67. As referred to above there was not an approximate 400mm high retaining wall at the fence line to this end of the grassed area that would be necessary to maintain the FGL of 611.35 above the path level of 610.95 (610.8 + 0.15) on the northwest side of the fence. This area is over excavated at the proposed gate by nearly 500mm (611.15 - 610.67). This over excavation reduces in depth to nought as the landscape slopes toward the proposed landscape retaining wall. The over excavation can be mitigated due to the lack of clarity as to how the soil is to be retained at this location. It is not unreasonable for the applicant to have maintained this area with a minimal slope between the two dwellings.
The proposed soft landscaped area is open to be interpreted in at least two ways because of the limited landscape levels on the LCP. One interpretation is that it was designed as a level area with a mostly consistent height but sloping down at each end. The other interpretation is that it was designed as an area that slopes down to the northwest and the southeast from about the line of the bottom of the proposed terrace steps and the only level shown at the proposed retaining wall. The lowest points would be at the ends of the retaining wall.
The “Work as Executed Survey” drawing showed this whole area between the two dwellings was excavated down to a relatively consistent level of between 610.7 & 610.6. The area has an average width of just under 6m and an approximately length of 15-16m. Allowing for the addition of a nominal 200mm of top soil and laid turf, the over excavation is approximately 400 to 500mm at the centre and along some of the front wall to dwelling 2. As this is nominally the highest point in the finished landscape, the extent of over excavation reduces to nominally nought at the lower side ends. This is a relatively small depth of over excavation.
I have determined that the area did not require substantial additional backfilling as claimed by the respondent. The applicant’s evidence shows that there was a substantial amount of fill stockpiled on site when his contract terminated. The photographs taken later in October show an additional amount of fill on site as a result of the excavation of the strip footings. I do not consider that there was a need to have additional fill transported to the site for this specific purpose.
The height of backfill that would be required to rectify the proposed landscaped area between the two dwellings is relatively minor. The work would entail moving fill from the stockpiles on site to the existing flat platform. The compaction could be completed in three rolled layers where the areas required 400mm to 500mm of fill. The work could be completed in less than one day. The applicant’s claim is reduced by six hours at an hourly rate of $180 a sub-total of $1,080 including GST.
Less the amounts set out above for the 14 hours of work, the applicant is entitled to be paid for the work that was done as on completion. Except for a minor over excavation in the proposed landscape area, the work was fit for the specific purpose and it was done in a reasonable time given the inconsistent information provided to the applicant at the commencement of the work. The evidence is that the respondent proposed to engage the applicant to excavate the strip footings into the levels as formed.

What would have been the result if the applicant had followed the respondent’s contract variation?

The respondent said that he instructed the applicant to cut back the block behind the proposed retaining wall to the level 612 and the remainder of the block in front of the wall to 610. I have determined that this was a variation to the original oral contract. He said that he did this because the applicant had called him back to the site on multiple occasions to clarify things and it became clear that the applicant needed very simple instructions to get the job done. The respondent said that he did not refer to these heights as FFL. He said that he never instructed the respondent to fill levels on the block and he never asked him to use his initiative or what he thought was best. In an email to the applicant on 12 June 2020 he said that he gave the applicant clear instructions on site of what he wanted regardless of what the surveyor or the applicant worked out. He said that the original pegs were irrelevant to the instruction given in his Annexure E.
The respondent said that the only variation from that instruction was to allow a step in the rear residence which he marked on a plan.[25] I consider that this was done when the respondent realised or was informed by the applicant his instruction would result in the upper level being cut 850mm too low.
[25] Exhibit A1 Tender Bundle 1, page 17
The following would have most probably incurred additional cost and resulted in time delays to the development had the applicant followed these two instructions that were given to him after he had commenced work on site. The dwelling 2 carport and associated driveway would have been excavated to 612 and not the documented 610.6 (610.8 - 0.2 for slab and base). This would have required another contractor to excavate the area to achieve the FFL set out. The landscape retaining wall would have had to be increased in length by 3m and in height by 670mm for the full length. The increase in length of the landscape retaining wall would most probably have required an amendment to the development application as it would have extended into the side setback of 3m. Once the excavation for the driveway and adjacent path was done by another contractor, an additional retaining wall would have been required at the northwest end of the landscaped area between the two dwellings with a height of approximately 2m at the northern end. The split level to dwelling 1 would not have been excavated. This would have required another contractor to excavate the area to achieve the FFL set out. Contrary to the respondent stating that he did not want the applicant to do any fill, a large extent of fill would have been required to the landscape area both sides of the terrace to dwelling 2 as well as at the terrace to raise the FGL to 612.

What, if anything, is the respondent not entitled to?

The respondent is not entitled to his claim of $13,319. He is not entitled to $2,200 for each truck load of excavated material removed from site in error. He agreed to these loads being removed and a rate for each load. The loads were not removed in error. The respondent is not entitled to $4,000 and $2,800 for the engagement of a new contractor, machine hire, and trucks to bring fill back to the site. As I have determined there was only the need for some minor filling in front of dwelling 2. An amount has been deducted from the claim by the applicant for this work. He is not entitled to $4,000 for delays and rescheduling trades due to mistakes made. The documentation provided by him to the applicant was not properly coordinated, he did not supervise the work adequately, the work completed was done to a reasonable standard, and he proposed to vary into the oral contract he had with the applicant to include the excavation of the strip footings into the work the applicant had completed; thereby accepting the bulk excavation work completed by the applicant. He has not been successful in his claim and therefore the application fee cannot be recovered.

Conclusion

The parties entered into an agreement to excavate the block to form stepped platforms to construct two single storey split-level dwellings with attached carports, a shared driveway and landscaping. The agreement was oral and based on agreed drawings. What was depicted on those drawings was not always consistent.
The respondent varied the contract and instructed the applicant to develop the whole of the block to only two levels, 612 at the rear and 610 forward of the line of the proposed landscape retaining wall, instead of the levels and set out he had required under the original verbal agreement.
The applicant is entitled to the full payment less 14 hours of work at $180/hour an amount of $5,782 ($8,302 - $2,520).
The applicant has been successful in most of the claim. In such circumstances the Tribunal may award the application fee be recovered by a successful applicant. In this case, the applicant has claimed $319 for the ACAT filing fee and $66.54 for the ASIC search fee and interest. I award the applicant those amounts.
The Tribunal orders:
(a)The respondent is to pay to the applicant the sum of $6,426.94 comprising:
(i)      $5,782 for work done;
(ii)     $319 for the ACAT filing fee;
(iii)   $66.54 for the ASIC search fee; and
(iv)   $259.40 interest.
(b)The respondent’s counter claim is dismissed.
………………………………..
Senior Member G Trickett

Dates of hearing:	24 March 2021
Solicitor for the Applicant:	Mr L McCallum, Uther Webster & Evans Solicitors
Solicitor for the Respondent:	Mr D Griffiths, Capon & Hubert Lawyers & Mediators

[2021] ACAT 60

1 July 2021

Key Legal Topics

Areas of Law

Contract Law

Legal Concepts

Contract Formation

Breach of Contract

Compensatory Damages