Murphy v Bangit Building & Maintenance Pty Ltd
[2014] QCAT 673
•22 December 2014
| CITATION: | Murphy v Bangit Building & Maintenance Pty Ltd [2014] QCAT 673 |
| PARTIES: | Kerry Murphy and Kath Murphy (Applicant) |
| v | |
| Bangit Building & Maintenance Pty Ltd (Respondent) |
| APPLICATION NUMBER: | BDL098-14 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 21 July 2014 |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Fitzpatrick |
| DELIVERED ON: | 22 December 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The respondent, Bangit Building and Maintenance Pty Ltd pay to the applicants, Mr and Mrs Murphy the sum of $43.79, within 21 days of the date of this decision. 2. The counter application is dismissed. |
| CATCHWORDS: | Building dispute – defective work –whether practical completion reached – wrongful repudiation – termination – damages. Bellgrove v Eldridge (1954) 90 CLR 613 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Kerry Murphy and Kath Murphy, self represented |
| RESPONDENT: | Bangit Building & Maintenance Pty Ltd represented by Michael O’Regan, Director and Trent Cavanagh, Director. |
REASONS FOR DECISION
Background
The applicants, Mr and Mrs Murphy entered into a BSA Renovation, Extension and Repair Contract with the respondent, BangIt Building and Maintenance Pty Ltd, dated 19 March, 2014.
The contract records that Bangit agreed to “Remove internal non load bearing walls, remove carpet and lay tile underlay. Remove and replace kitchen”. The work was to be carried out at the Murphys’ home at 10 Praeger Street, Chapel Hill.
Relevant to this dispute, Mr and Mrs Murphy required their old kitchen to be demolished and a kit kitchen and laundry purchased from Bunnings to be installed. On 25 February, 2014 Bangit was provided with a copy of the kitchen plan.
The work to be performed was domestic building under the Domestic Building Contracts Act 2000 (Qld).
A quote dated 2 March, 2014 was provided by Bangit to perform the work. That quote was accepted on 19 March, 2014. Work commenced on 23 March, 2014.
The contract price was $7,7798.40. The deposit and a progress payment were paid. An invoice has been rendered by Bangit for the balance owing upon Practical Completion in an amount of $3,169.28, inclusive of GST. That sum is comprised of the final instalment of $3,509.28, plus a variation for removal of plaster and re-sheeting in the sum of $150.00 less a credit for a damaged range hood in the sum of $490.00.
Bangit asserts that it completed the contract works on 8 April, 2014 and that the final instalment as adjusted is due and owing. Bangit has filed a counter-application for payment of that sum together with interest and costs.
Mr and Mrs Murphy filed an application for domestic building disputes in this Tribunal on 9 May, 2014. They assert that the contract works were defective and incomplete and that Bangit refused to complete the contract, leaving the job on 8 April, 2014. Mr and Mrs Murphy claim:
(a) the cost of repairing the defective work and completing the work in the sum of $3,172.79 ($2,884.79 plus GST $288.00). That sum was paid to Grant Ronnie Constructions Pty Ltd;
(b) refund of the cost of a new Westinghouse Canopy Rangehood 90cm - $619.00, being the cost of replacing a Rangehood damaged by Bangit;
(c) re-imbursement of solicitors costs of $595.00; and
(d) relief from the amount claimed by Bangit.
Issues to be determined
The following issues must be determined in this matter:
(a) the items of work agreed to be performed pursuant to the contract;
(b) whether the work was defective and incomplete as at 8 April, 2014;
(c) whether the job had reached practical completion;
(d) whether the contract was terminated;
(e) whether the parties are entitled to recover the amounts claimed.
Contract Works
The contract does not particularise the relevant work to be performed other than by the statement “remove and replace kitchen”. The question is whether the following represent terms of the contract:
(a) a pre-contractual discussion between Mr and Mrs Murpy outlining work to be done;
(b) the plans prepared by the architect from Bunnings, the supplier of the kit kitchen and laundry; and
(c) the quote prepared by Bangit, dated 2 March, 2014.
Item 16 of the Schedule to the contract, which sets out the contract documents, does not refer to any other documents as forming part of the contract. The box noted “N/A” or not applicable has been ticked. I take that to mean in the context of the information set out at Item 16 that plans and specifications are not required to be supplied by a party on a particular date.
That is consistent with the evidence that a discussion was held between the parties detailing the work required and the plans were provided to Bangit prior to their quote.
Mr Murphy’s evidence at the hearing was that he held a discussion with Trent Cavanagh and Michael O’Regan from Bangit on 2 March, 2014 before the quote was given to them. He says it was verbally agreed that Bangit would, relevant to this dispute:
(a) mould the ceiling so that there would be no gaps between the top of the cupboards and the ceiling; and
(b) make shelves in the walk in pantry.
Mr Murphy said that he took it that would be done.
In evidence, Mr Cavanagh did not deny that the conversation occurred or that he agreed to perform the work. He said that the work was extra to the work quoted and that because the Murphys wanted to be back in their home by Easter, it was agreed that once the quoted work was performed, they would quote to perform the other work. The Murphys say that the only work falling into this category was removing tiles from the patio so that the tiler could do tiling on the patio and putting bookcases together from flatpacks.
Bangit contend that the items of work to be performed are only those set out in the quote, unless a variation was subsequently agreed to be performed.
Relevant to this dispute, the quote sets out the following items of work:
(a) remove existing kitchen carcases, laundry carcases and bench tops;
(b) extend existing wall frame through lounge room to close in walk in pantry. Extend wall frame to supply fridge recess and walk in pantry access
(All new wall framing to be MGP 12 T2 treated pine)
sheet all new wall frames in 10mm gyprock (setting plaster not included in price)
ceiling and floor mouldings installed to suit existing
(c) install kitchen and laundry cabinets according to specifications supplied by client, bench tops will not be fitted or supplied by Bangit Building & Maintenance.
The parties are in agreement that it was a variation to the work that Bangit would replace a Gyprock wall at a cost of $150.00.
The starting point for determining the scope of work covered by the contract is the fact that the parties have entered into a formal written agreement. The contract does not contain an entire contracts clause to suggest that no other documents or statements may form part of the contract.
The contract simply provides that Bangit will remove and replace the kitchen. Plainly plans and specifications are needed to make sense of that obligation.
The quote refers to installation of kitchen and laundry cabinets “according to specifications supplied by client”
Because of the use of these words, I find that it was the presumed intention of the parties that the quotation and specifications supplied by the client, including oral specifications and those set out in the plan, were to form terms of the contract. I find that the only extra work to be performed after completion of the contract was removal of tiles and constructing bookcases. They are items of work not relevant to the kitchen and laundry so it is probable that was the intention of the parties. Filling the gap between the cupboards and the ceiling and putting shelves in the pantry are entirely relevant to replacement of the kitchen. I accept the evidence of Mr and Mrs Murphy that the work was agreed to be performed and fell within the scope of the words “specifications supplied by the client”
I find that the discussion in relation to filling gaps between the cupboards and the ceiling and installing pantry shelves; the plan and the quote are terms implied into the contract for the purpose of giving it business efficacy.[1]
[1]BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410 and the statement of McHugh and Gummow JJ at p.442 that “the question is whether the implication of that particular term is necessary for the reasonable or effective operation of the contract in the circumstances of the case”.
Was the work defective and incomplete
Mr Ronnie gave evidence for Mr and Mrs Murphy. I found him to be a credible witness. He confirmed that he performed the work set out in his letter, dated 6 May, 2014, being to:
· finish installing kitchen units
· build and fill in above kitchen units
· pull out and re-install cupboards for oven and install heat strips/shield required under Certification
· finish skirting boards and cornices
· build and install shelves in Pantry
· move and re-attach left hand cupboard over cooktop.
· replace high gloss panels that were damaged due to incorrect fitting of rangehood by Bangit Builders; and
· adjust cupboards for fitting of sinks in kitchen and laundry.
Mr Ronnie said that he has never seen the quote or the plans for this job. He could not say if the work performed by Bangit was performed in accordance with the plan.
In evidence Mr Ronnie expanded on his letter to say that an overhead cupboard was installed too close to the rangehood and that he lined it up with the end cupboard of the base cupboards. The cupboard was moved 20mm to the left. Mr Murphy’s evidence is that the final position of the overhead cupboard was in accordance with the plan.
Mr Ronnie said that provision for the sink was not cut out. Finally he said that the cupboards were adjusted up at the legs to obtain the appropriate height level.
Mr Murphy’s evidence is that as at 8 April, 2014 when Bangit left the site:
· there were no doors on cupboards
· the upper cabinet on the left was in the wrong place;
· there were no fittings in the top cupboard in the laundry;
· there were no running boards under the base cabinets; and
· doors fitted to the cupboards were out of alignment
On 8 April, 2014 Mr Cavanagh removed the range hood which Mr Murphy said was in the wrong place because it was not over the stove. A hole in the range hood was evident where it had been screwed to an adjoining cupboard. The Murphys ordered a new range hood, however it cost more than the old one because that had been purchased as part of a package deal. The new range hood cost $619.00. The old one cost $490.00. Mr Murphy said that someone else fitted the new range hood, but they are not claiming that cost.
I accept the evidence of Mr Ronnie as to the work performed. I accept the evidence of Mr Murphy as to the need for the rectification work and where relevant its non-compliance with the plan and the agreement.
Mrs Murphy gave evidence that she took photographs of the work as it progressed. Exhibit 5 in the proceedings is an album of photographs. I accept that the photographs as annotated in relation to the date they were taken and what they depict is a true record of the state of the kitchen and laundry on the date the photographs were taken. I accept that on 8 April, 2014, the photographs reveal defective and incomplete work.
I find that the work was defective and incomplete as at 8 April, 2014 and that it required the work performed by Mr Ronnie to accord with the contract and the plan.
Practical completion
To the extent that the contract works were incomplete, it is not possible to say that the contract had reached practical completion on 8 April, 2014.
The most serious item of incomplete work was the failure to install heat strips/ shields in the stove cavity. Photograph 7 of Exhibit 5 reveals the shields lying at the bottom of the cabinet, with the notation that the shields were not fitted when the cabinet was assembled.
Practical completion is defined under the contract to mean “the date upon which the Works are completed in accordance with the requirements of this Contract, including Condition 2 and Condition 12.2”
Condition 2 of the contract sets out warranties that, inter alia, the work under the contract will be carried out in an appropriate and skilful way and with reasonable care and skill; and that the work will be carried out in accordance with the plans and specifications.
Condition 12.2 requires a written notice of practical completion to be given 3 business days before the contractor anticipates the works will reach practical completion. On that date an inspection should be carried out and a defects document identifying minor defects and minor omissions must be completed by the contractor and given to the owner. A Certificate of Practical Completion must be given by the contractor to the owner.
I find that neither of these conditions were met when Bangit finished work on 8 April, 2014.
Bangit refer to a written acknowledgement dated 8 April, 2014, signed by the parties, which reads “We acknowledge that Bangit Building & Maintenance have left the site in a clean and tidy state. As per Original contract we agree that Bangit Building & Maintenance have reach their practical completion and we are happy with the quality of their work.” Mr and Mrs Murphy handwrote a note on the document prior to signing to the effect: “This is signed subject to our report.”
I do not consider the document is evidence of practical completion. I note the evidence of Mr and Mrs Murphy that they signed the document out of anxiety to see Mr Cavanagh leave their home and wanted to ensure by their notation that they were not agreeing to anything without their own assessment. Mr and Mrs Murphy’s evidence was that Mr Cavanagh refused to leave their home until the document was signed.
I find that the works had not reached practical completion as at 8 April, 2014. I do not consider the defects and omissions were so minor that one could say the contract was substantially performed.
Termination of contract.
Mr and Mrs Murphy and Bangit have different versions of events in relation to Bangit finishing work and leaving the site on 8 April, 2014.
Mr and Mrs Murphy gave evidence that on 7 April, 2014 they challenged Mr Cavanagh in relation to the quality of the work being performed and requested he move the upper left cabinet and take down the rangehood. Mr Cavanagh refused. Mrs Murphy threatened to call the Building Services Authority (BSA, now known as the Queensland Building and Construction Commission). After that Mr Cavanagh and Mr O’Regan went outside. On Mrs Murphy’s evidence, when they returned they said words to the effect: “We’ve contacted the BSA and they have advised us to finish what we are doing, then down tools and leave the job.”
Mr and Mrs Murphy said that Mr Cavanagh and Mr O’Regan tried to finish the work that day, but the work was done poorly and in a rush and had to be rectified by Mr Ronnie.
Mr Cavanagh and Mr O’Regan returned on the 8th April, 2014 to collect their tools and remove the range hood. They refused to move the cupboard. They then left the site returning only with the practical completion document to sign.
Mr Murphy said that on the 7th April, 2014 he felt that they had been left with an unserviceable kitchen and laundry. Accordingly, on the 8th April, 2014, Mr and Mrs Murphy engaged Mr Ronnie to complete the work.
Mr Cavanagh gave evidence that his advice from the BSA was not to do any extra work, just to complete the job in the contract. He said that because shelves in the pantry and filling in from cupboard to ceiling was not in the quote they did not have to do this work. He said that he repeated this position on 8 April, 2014 telling Mrs Murphy that the BSA said to limit the work as per the quote, clean up and leave it there.
Mrs Murphy put it to Mr Cavanagh in cross examination that she had repeated to him on the 8th, his words said on the 7th that the “BSA said down tools”. Mr Cavanagh denied to her the words attributed to him.
On the state of the work as at 8 April, 2014 it is not possible, even on Bangit’s version of the contract and Mr Cavanagh’s statement as to why they were finishing up at the site, that the work was complete. For that reason I do not accept Mr Cavanagh’s evidence as to what he told the Murphys about when they would finish work.
I find that Mr Cavanagh and Mr O’Regan decided to leave the job as soon as possible. In all likelihood that was because of the disagreements and tensions with Mr and Mrs Murphy. I accept the evidence of Mr and Mrs Murphy that Mr Cavanagh said the BSA had advised them to finish what they were doing and leave the job.
I find that Mr Cavanagh and Mr O’Regan repudiated the contract. That is, they evinced an intention to no longer be bound by the contract. I find that Mr and Mrs Murphy accepted this repudiation and terminated the contract by engaging Mr Ronnie to complete the work.[2] Under condition 21.3 of the contract, Mr and Mrs Murphy retained their rights at common law to terminate the contract, apart from the provisions of the contract.
[2]Shevill v Builders’ Licensing Board (1982) 149 CLR 620 at 625-626.
I find that the contract was lawfully terminated by Mr and Mrs Murphy.
Recovery of amounts claimed
Mr and Mrs Murphy are entitled to recover from Bangit an amount sufficient to put them in the same position as if the contract had been performed.[3] The measure of their damages is the difference between the balance owing pursuant to the contract, assuming it was completed, and the cost incurred by them to complete the works and rectify defects.[4]
[3]Robinson v Harman (1848) 1 Ex 850.
[4]Bellgrove v Eldridge (1954) 90 CLR 613.
I find that the work performed by Grant Ronnie Constructions Pty Ltd was reasonable and necessary and that Mr and Mrs Murphy took reasonable steps to minimize the loss that flowed from termination of the contract. Mr O’Regan gave evidence that if notified of defective work Bangit would have attended to rectification. In circumstances where the contract had been terminated and given the acrimony between the parties and dispute over the scope of contract works, I do not consider it reasonable that Bangit carry out any rectification and completion work. Accordingly Mr and Mrs Murphy are entitled to include in their calculation of damages the sum paid to Grant Ronnie Constructions Pty Ltd, of $3,172.79, inclusive of GST.
They are also entitled to include the extra cost to them of purchasing another, more expensive range hood in an amount of $619.00. Given that Bangit have provided them with a credit in the sum of $490.00, their loss is $129.00.
I am not satisfied that Mr and Mrs Murphy have established that damage to their crimsafe front door was caused by Bangit’s workers. Accordingly I decline to order payment of the cost of repair of the door.
In relation to the claim for legal costs met by the Murphys in responding to Bangit’s letter of demand, I decline to award payment of those costs because the expense was discretionary and did not flow as a direct consequence of Bangit’s breach of contract.
Accordingly, Mr and Murphy’s damages amount to $43.79.
In relation to Bangit’s counter-application for the value of the completion payment, I have found that practical completion had not been reached. By section 67(2) of the Domestic Building Contracts Act 2000 (Qld) a building contractor must not demand all or part of the completion payment unless the practical completion stage has been reached.
Because I have found that Bangit wrongfully repudiated the contract prior to practical completion being achieved, it has no entitlement to damages for breach or to recover the completion payment as a debt.
The counter-application is dismissed.
Orders
I order that the respondent, Bangit Building and Maintenance Pty Ltd pay to the applicants, Mr and Mrs Murphy the sum of $43.79, within 21 days of the date of this decision.
I order that the counter application be dismissed.
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