Panel Concepts Pty Ltd v Apms Pty Ltd
[2012] QCAT 628
•20 December 2012
| CITATION: | Panel Concepts Pty Ltd v APMS Pty Ltd [2012] QCAT 628 |
| PARTIES: | Panel Concepts Pty Ltd (Applicant) |
| v | |
| APMS Pty Ltd (Respondent) |
| APPLICATION NUMBER: | BDL291-11 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 6 September 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Peter Walker, Member |
| DELIVERED ON: | 20 December 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The Application be dismissed. 2. The Counter-application be dismissed. |
| CATCHWORDS: | Where Work was Domestic Building Work – where agreement was not in writing – where parties were in dispute about the price and scope of the work Domestic Building Contracts Act 2000, ss 8, 65 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Bernadette Hennesy, Director |
| RESPONDENT: | Matt Maloy of DC Law, Solicitor |
REASONS FOR DECISION
These proceedings arose out an entirely oral contract whereby the Applicant, Panel Concepts Pty Ltd, was to construct a tilt panel concrete fence/retaining wall for the Respondent, named as APMS Pty Ltd, at 5 Munro Court Carrara (“the Property”).
For all relevant purposes the Applicant was essentially represented by John Hennessey and the Respondent by Scott McPhail and Sharyn Kent.
The contract arose primarily out of a discussion between Mr Hennessey and Mr McPhail and Ms Kent on or about 9 February at the Property.
The lack of a written contract makes it difficult to determine the full extent of what was agreed; nevertheless it appears that the work was to be in accordance with a plan drawn by the Applicant.[1]
[1] See Attachment 3 to Respondent’s Submissions.
It would appear that the tilt panels were to be poured on site. Before the new work could be done it would appear that an old fence and retaining wall had to be removed. It appears to be agreed that the removal was to be carried out by the Respondent but the parties are in dispute as to who actually carried out this work.
The Applicant’s submissions do not include a sum for the original agreed works in their submissions, but they do note variations charged of $175 for the inclusion of electrical conduits[2], $1,350 for removal of fence[3], and for $450 for waiting time associated with the crane[4]. Additionally they appear to claim a variation of $975 for removing concrete under the clothes line,[5] and $500 for a surveyor. The invoice in question shows a quoted price of $9,900 making a total price of $13,350. I am unable to reconcile this with the amount claimed in the Application,[6] even failing to take account of a credit of $840 in respect of crane hire. I can only assume this difference related to GST, though this is not clear to me.
[2] See statutory declaration of J Hennessey at paragraph 8.
[3] See statutory declaration of J Hennessey at paragraph 11.
[4] See statutory declaration of J Hennessey at paragraph 16.
[5] See invoice 101 dated 18 July 2011.
[6] $13,761 in Application.
Certainly it appears clear that the Applicant is now alleging that the original contract price was $9,900 plus GST. By way of contrast the Respondent states that the price of $9,900 was to include GST.
What does appear to be common ground is that in or about late May 2011 a final figure for an amount then owing was agreed at $4,865.[7] Even that figure, however, is the subject of some dispute with the Applicant saying it was a reduced figure acceptable if paid within a time frame, and the Respondent denying this and saying it simply represented an agreed price.
[7]See Statement of Sharyn Kent and Statutory Declaration of J Hennessey at paragraph 12.
Subsequent to this there was a problem over a crane to lift the panels into place. On 1 July 2011 the Applicant arranged for a crane that appears to have been inadequate for the job and was only able to lift a few panels into place.
Subsequently the Respondent arranged a crane for Sunday 3 July. Again there was dispute between the parties as to the process of lifting the panels into place, including issues over the time the lift was to start, delays associated with this and information passed over that delay, as well as the extent of work performed by the representatives of the Applicant in respect of the lift.
Ultimately, the Applicant maintains that it finished the work by 8 July 2011 and the site was cleaned up by it in the following 2 days. It does seem to be a matter of agreement that this was the last occasion that the Applicant performed work at the Property.
While the Applicant maintains that it has completed all contractual works in a good and workmanlike manner the Respondents do not agree. Issues that they have include the following:
a) They maintain that there is a requirement for a person deemed competent in concrete construction to inspect and design the wall in accordance with AS3600. They say this has not occurred.
b) They maintain that there is an additional requirement for the wall to be certified as it exceeds the maximum permitted height of 1 metre without such certification.
c) They maintain that the Applicant failed to provide and/or make provision for adequate drainage.
d) They claim that electrical conduit as not properly inserted and cannot be used for 240 volt wiring.
e) Further they claim that the footings need rectification.
Evidence
For the Applicant statements were provided by Reiner Hennessey[8] and by John Terrance Hennessey.[9] In addition written submissions supported by various documents were provided.
[8] See exhibit 13 to Applicant’s material.
[9] See Applicant’s material.
For the Respondent evidence consisted of statement from Sharyn Kent, Scott McPhail, Rodney Walsh, a previous employee of the Applicant who did some work for the Respondent at the Property, Byron Glindermann who was employed by the Respondent to assist the crane driver, Lachlan Swain, an employee of the Applicant, and Gary Blick who is the person who ultimately provided the necessary crane.[10]
[10] See exhibits to Respondent’s submissions.
In addition reports from a BSA inspector and from Tim Ryan of Structerre Consulting Engineers were provided.
Discussion of Issues for Consideration
A. The Correct Respondent
An issue raised by the Respondent is that it is not in fact the proper Respondent and that should have been the two individuals involved, namely Mr McPhail and Ms Kent. This has already been resolved by Senior Member Peta Stilgoe.
B. Domestic Building Contracts Act 2000
It appears to have been conceded that the contract in question is domestic building work pursuant to section 8 of the Domestic Building Contracts Act 2000 (DBC Act). This concession appears to be correct as it appears to be “associated works” as they are defined in that section. Accordingly the work was required to be conducted under a regulated contract[11]. Equally plainly it was not. At its highest there was a written quote produced fairly late in the day.[12]
[11] See DBC Act, section 9.
[12] See exhibit 37 to Respondent’s material.
In respect of this issue the submission of the Respondent, with which I agree was that while this has certainly served to complicate issues, including issues of the contract price, variations and the scope of works it does not serve to defeat the Applicant’s claim in its entirety.
C. Necessity for Inspection and/or Certification
Further I am required to consider whether the scope of works included a requirement that it be appropriately designed and inspected and/or certified.
In short the response of the Applicant is that certification is not required as the height of the wall does not exceed one metre and it was properly designed, being based on a pro forma design of George Frame Engineers which, it seems is a division of Structerre Consulting Engineers.
Dealing first with the height of the wall I note that the evidence is inconclusive. For the Applicant it is said that heights were taken carefully prior to commencement and at no time were the works intended to hold more than a metre of fill. Further if existing levels had been adhered to they would not have needed to. I note further that the BSA inspector, Darren Girling, concluded that there was not more than a metre of fill, though this was based on a non invasive test.[13]
[13] See report findings.
By way of contrast the Respondent alleges that in the very corner the amount of fill is between one and one point one metres. They have shown photographs to Mr Ryan which he appears to accept they show this though I have not seen the photographs and even if I did I would be unlikely to be able to accurately assess them.
It seem clear to me that the area immediately adjacent to the wall was not backfilled by the Applicant and accordingly when it was backfilled by the Respondent they should have been able to take sufficient steps to ensure that this was not a problem. Even now one would think a small amount of fill could be removed to resolve this issue. I therefore find it was not incumbent upon the Applicant to provide certification in respect of the wall.
Nevertheless it seems to me to be rather a different proposition with respect to the issue of design and/or inspection.
The report of Mr Ryan makes it abundantly clear that the design relied on by the Applicant related to a one off construction at Ballina with significant differences to the construction in question; not least being that the wall on the Ballina property was not also required to act as retaining wall.
Accordingly I find that the Applicant was not entitled to rely upon the design which they did. Further I find that the provisions of AS 3600-2009 indicate that the wall should have been designed by an appropriate person. At the least it will now require a fairly invasive inspection.
D. Electrical Conduit
A further issue raised by the Respondent relates to the insertion of the electrical conduit. The Respondent gave evidence that they wanted to be able to utilise 240 volt lighting in the wall and, due to the depth of the conduit provided they were not able to do so. Having regard to the depth that would have been required to enable this to have been done I find that this was never a feasible option as it would have been necessary for these to have been 600 milimetres below the soil surface. Further, in the material provided by the Applicant the issue primarily seems to relate to the visual aspects of the matter.[14] A quote for $1,800 plus GST was put in evidence[15] but it seems to me that an electrical contractor would always needed to have been engaged. It is certainly not clear to me what, if any part, of that invoice relates to rectification work. Accordingly I find that I am not satisfied that the Respondent has established a breach of contract by the Applicant in this regard.
[14] See Statement of Ms Kent at paragraph 29.
[15] See exhibit 39 to Respondent’s submissions.
E. Claim for Extra for Removal of Fence
Part of the claim by the Applicant relates to alleged extra work relating to the removal of the fence, which the Respondent claims to have carried out. It seems to me that it is not necessary for me to decide this point. What I am required to do, given the lack of a written contract, is determine a fair value for the works performed. The alleged extra work was carried out in mid May 2011 and in or about 31 May 2011 the parties appear to have agreed that a fair price to complete the works at that stage was $4,865. One way or another this figure must have taken into account all extras performed to that time, including any extra work involved in removal of the old fence and fittings.
The Applicant, of course, says that this was a negotiated figure based on a quick payment. This is denied by the Respondent. What is plain is at this time the works had not been completed. Under the provisions of the DBC Act the Applicant would not have been entitled to this payment. Section 65 of the DBC Act states in part:
65 Progress payments for contracts other than designated stages contracts
a) This section does not apply to a designated stages contract.
b) The building contractor under a regulated contract must not demand or receive an amount under the contract, other than a deposit, unless the amount is directly related to the progress of the work—
(a) carried out under the contract;
F. Adjustments to Agreed Price
The major issue for my consideration then is what, if any amounts should be deducted from this in determining amounts payable under the contract. The first and most obvious issue here is crane hire. In this respect I note the Applicant has allowed a credit of $840. By way of contrast in the breakdown provided[16] there was an allowance of $1,400 in respect of one fence and $500 in respect of the other fence.
[16] See Exhibit 37 to Respondent’s material.
The amount actually paid by the Respondent for the crane hire was $840 plus GST, being a total amount of $924.[17] The Applicant asserts that this is the only amount it should have to credit and says that to allow any different amount would be to ignore associated labour, driver and rigger costs he incurred. It is alleged on behalf of the Applicant that it incurred some costs in respect of the crane hire organised on Friday 1 July 2011 despite the fact that it is conceded that the crane hired was completely inappropriate. Despite this it appears it was able to do a small amount of the work and a small allowance should be made for this.
[17] See exhibit 34 to Respondent’s material at paragraph 9.
However I am not satisfied that any additional allowance should be given to the Applicant in respect of labour. It seems to me that exhibit 37 to the Respondent’s material more likely refers to direct hire costs only and that labour is built into the price elsewhere.
It seems some comment is appropriate on the claim by the Applicant for waiting time on the Sunday. I can only say that the claim by the Applicant in this regard appeared to be inflated, both as to time and hourly rate. This appeared from answers from Mr Hennessy to answers given by him to questions in cross-examination. The work was only necessitated on the Sunday because the Applicant had failed to properly organise it on the previous Friday either personally or through his agent. In my view it was fortunate that Mr Blick was so accommodating as to do the work on the Sunday and then come back on the Monday, which was necessitated, I accept, because of some problems in the construction which had to be redone by the Applicant before the work could be completed.[18]
[18] See affidavit of Mr Blick at paragraph 7.
In the circumstances it would seem to me that an appropriate credit would be $1,780, being the difference between the amount allowed and the amount apparently paid to Preston Cranes[19].
[19] See statutory declaration of S Kent at paragraph 37.
There is an additional setoff claimed with respect to $300 paid by the Respondent to Lachlan Swain. The Applicant asserts that this was not money paid towards the contract price but was additional money due from the Respondent to Mr Swain. Mr Swain however asserts that was part payment of outstanding wages due to him.[20] I cannot see any reason why Mr Swain would not give truthful evidence in this regard and I accept his evidence. However this payment was made in March 2011 and must be considered in light of the finding that I have made that it is agreed that as of the end of May 2011 the sum of $4,865 was the amount due and owing to complete the contract works.[21] I can only conclude that this payment was also taken into account by the parties in determining this figure and accordingly I find that no further adjustment is appropriate.
[20] See exhibit 32 to Respondent’s material.
[21] See paragraph 26 hereof.
The final adjustment that it seems to me I need to consider is whether or not the works were complete. In this respect I note that Mr McPhail concedes that at least at one stage Mr Hennessey informed him that it would be necessary to provide gravel and aggie pipe to the back of the wall for drainage purposes.[22] Mr McPhail said that if Mr Hennessey informed him when it was required he would ensure it was there. From this it seems clear that the cost of the materials at least it is agreed would be met by the Respondent. Mr Hennessy says that he did not finish off the backfilling because this was not provided. Whatever the reason for this it seems that it is at least arguable that the Applicant did not complete the work. However the cost of completion would have been quite minor once the materials were on site.
[22] See statement of Mr McPhail.
I need to return then to the issue of the relevant Australian standard and my finding that the wall should have been designed and inspected by a relevantly qualified person. One of the main issues that needs consideration in this respect however, is that it is plain that neither side contemplated the necessity for this expense. It is apparent from the hand written breakdown of costing[23] that there was no allowance for this and one that basis, given that I am effectively performing a quantum merit assessment one must question whether an allowance should be made. However it is apparent that it would be far more difficult, and presumably expensive, to carry out the inspection at this stage. While there are queries raised by both Mr Girling and Mr Ryan[24] neither of these gentleman have been able to actually conclude that there are structural difficulties with the design or construction. However they both agree that inspection should be carried out having regard to the fact that there was no site specific plan drawn. Accordingly I find that further investigations are warranted. However it seems to me that the only allowance that should be made in respect of this is the difference in cost between having to carry out the inspection at this stage and the cost that would have been incurred had it been carried out in a more orderly manner. I am not given any guidance as to what this figure may be.
[23] See exhibit 36 to the Respondent’s material.
[24] See reports of Structerre and BSA.
In the circumstances if one takes account of the matters I have determined the following is the situation:
Price to complete as end of May 2011 $4,865
Less amount paid the next day $2,100
Less allowance for crane hire $1,780
Balance owing: $ 985
However doing the best that I can it seems to me that the issues of the failure by the Applicant to actually finish the work together with the additional costs that may be incurred by reason of the necessity for more invasive testing to determine structural issues are appropriately set off against the amount strictly owing.
Orders
Accordingly I find that that the matter should be dealt with by dismissing the Applicant’s application and the Respondent’s counter-application.
An alternative approach that would result in the same outcome would be to allow the Applicant the sum of $985 in respect of its claim and the Respondent the sum of $985 in respect of its counterclaim.
Costs
I note that there is a further claim for legal costs in the submission and right from the time of the counterclaim. It is clear to me that both sides incurred costs in respect of this matter. It was not a complex matter legally and was determined virtually solely on issues of fact, despite the fact that the Respondent had leave to be legally represented, albeit only just before the hearing. Even taken at its highest it was a case involving relatively small sums of money. On the face of it this seems to be a case where the ordinary presumption raised by section 100 of the Queensland Civil and Administrative Act 2009 would prevail, namely that each party bear their own costs.
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