Paton v Burleigh Pools
[2011] QCAT 396
•12 August 2011
| CITATION: | Paton and Anor v Burleigh Pools [2011] QCAT 396 |
| PARTIES: | Mr Lawrence Paton Mrs Sonia Paton |
| v | |
| Burleigh Pools |
| APPLICATION NUMBER: | BDL085-10 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 24 March 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Paul McGrath, Member |
| DELIVERED ON: | 12 August 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. That the contract between the applicants and respondent dated 4 January 2010 was validly terminated by the applicants. 2. That no further moneys are owed by either party to the other. 3. That the respondent arrange with the applicants to attend on site to remove any outstanding steel and other items left by the respondent. |
| CATCHWORDS: | A claim for excavation and other costs by the respondent, together with a claim by the applicant following the termination of the contract, relating to re-establishment of the building site |
APPEARANCES and REPRESENTATION (if any):
| APPLICANTS: | Mr Lawrence Paton & Mrs Sonia Paton appeared in person |
| RESPONDENT: | Burleigh Pools was represented by Mr Wayne Haylock |
REASONS FOR DECISION
Lawrence Clifford Paton and Sonia Lesley Paton (the applicants) filed an application for a domestic building dispute in the Tribunal which was received on 31 March 2010. The application was against Burleigh Pools (the respondent).
The applicants subsequently amended their application and are seeking to terminate the contract between themselves and the respondent for the building of a swimming pool and claim compensation for monies expended to reinstate the site following the failure of the respondent to continue with the construction of the swimming pool. In the amended application the applicants state that they had paid an amount of $3,100.00 to the respondent out of a total construction cost of $31,160.00 and that they have incurred additional costs totalling $7,874.00.
The respondent filed a response and counter application on 22 June 2010 which sought to have the contract between them and the applicant cancelled and to recover expenses incurred to the date of the cancellation. The respondent sought an amount of $11,000.00, including GST, as a result of what he says was a variation of the contract required to continue with the construction of the swimming pool.
In October 2009 the respondent was invited by the applicants to discuss the construction of a swimming pool at their property at 123/40 Cotlew Street, East Southport. The applicants had prepared drawings and at a meeting various landscaping contingency and possible latent conditions in the soil were discussed. A formal quote was prepared on 26 October 2009 subject to a soil report and recommendations. The applicants were advised to engage a geotechnical engineer to identify the subside conditions on the property and Border Tech were engaged by the respondent on behalf of the applicant to provide a report. A soil test was obtained and a report from Border Tech of 21 January 2010 indicated that the fill material encountered was well compacted with dynamic cone penetrometer results indicating uniform medium dense sands continuing down for 3 metres. The report further stated that the water table was not encountered during the investigation but if it is encountered during pool excavation Border Tech should be notified and the pool would then need to be designed for buoyancy considerations.
The applicants then entered into a contract with the respondent to construct a standard pool without screw piers. Access was given to the property and construction commenced. As excavation started soft wet ground was encountered and a further report was requested. Border Tech was engaged to prepare a further report and in that report, dated 23 February 2010, they noted that the base of the pool excavation comprised of saturated loose sands extending approximately 2 metres depth below the excavated level. The report recommended that the pool could not be supported on this fill material as the differential settlements would not be tolerated (preliminary calculations of greater than 50mm). It was therefore recommended that a piled foundation be adopted using steel screw in piles.
This recommendation was conveyed to the applicants and a variation of the contract to construct the pool was requested as regard to the fact of a latent condition had been encountered. Screw piers were not required or an allowance was not made in the original contract and the respondent quoted that an approximate amount of $11,000 to enable the construction to continue with the use of screw piers. The contract was entered into by the parties in clause 11 dealt with variations to the initial contract. A clause tentative “variation for latent condition” stated “if in carrying out the works or intending to gain access to the site for materials or equipment the contractor becomes aware of any latent condition which affects the performance of the works, a contractor must give the customer a written notice describing the latent condition and the contractors estimate of the work and costs required to overcome the latent condition. Subject to this clause the contractor may with the written consent of the customer vary the works to overcome the latent condition.
The customer must not unreasonably withhold its consent to a variation due to a latent condition and must take all steps to sign the variation document provided by the contractor.
The contractor may not recover additional payment for a variation in respect to a latent condition where the need for the variation arose because:
a)“Where required the contractor failed to obtain the appropriate foundations data before entering the contract and, had the contractor obtained the foundations data the need for additional work could reasonably have been established; or
b)The contractor obtained the foundations data before entering the contract, and the need for additional work would reasonably had been established from the foundations data.”
The respondent contended that the site over the weeks between the first and second soil test reports had been inundated by an extreme change of weather and that some 500mm of rain had fallen in approximately 6 weeks. The respondent stated that all due care and diligence was demonstrated before entering into the contract and that only 3 pools in 10 built on the estate required screw piers.
[10] The contract between the parties in clauses 16 and 17 dealt with the issue of the termination of the contract. Clause 16 provides for the termination of the contract by the contractor and it says, inter alia, that if the customer fails to sign a variation document or give its consent to a variation due to a legal requirement or latent condition, the contractor may, if the failure or default is capable of being remedied by the customer, give the customer a notice in writing setting out the specific details of the failure or the fault and stating that the contractors intention to terminate the contract if the failure or default is not remedied within 5 working days or such longer time as is specified in the notice.
[11] Clause 17 provides for the termination of the contract by the customer and it states that the customer may end the contract by giving notice in writing to the contractor if the estimated cost of carrying out any variation of the works due to a latent condition would increase the contract price by an amount equal to or greater than 20% of the contract price. If the contract is ended under the previous clause the contractor is entitled to a reasonable amount for the value of works carried out under the contract to the date the contract is ended together with any other costs associated with ending the contract.
[12] On 9 February 2010 the respondent wrote to the applicants referring to the latent condition encountered in the excavation of the pool site. An estimate was provided to install screw piers at a cost of $12,250.00. On 12 February the applicants’ response to the respondent’s letter indicating that they were unhappy with the additional cost variation and referred to the original tender when it said in the worst case scenario screw piers would cost $6,670.00. The applicants suggested that the work be completed for a fixed price with no further additional costs. The respondent, on 15 February, emailed the applicants saying they were unable to accept the offer of the fixed price to pier the pool and on 2 March a further letter was sent to the applicants by the respondent indicating the contract variation of $11,000 including GST to complete the pool.
[13] On 6 March 2010 the applicants responded disagreeing with the amount the additional costs and proposing mediation by the Queensland Civil and Administrative Tribunal.
[14] The respondent subsequently contacted the applicants by letter indicating that they were prepared to make a final offer of completing the work at cost plus a 25% margin basis failing which they would have to exercise their option to cancel the contract as per clause 16(1)(c) of the contract.
[15] The applicants sought a copy of the second soil test report and the engineer’s recommendations and ongoing discussions ensured in relation to both the costs of terminating the contract and or the cost of proceeding with the contract as well as various mediation options.
[16] No agreement was reached as a result of these negotiations and the applicants subsequently filed the application on 31 March 2010.
[17] The evidence given at the hearing by the respondent indicated that the pool was to have been closer to the house then to the revetment wall but that the applicants sought to move the pool further from the house and it may have been the case that if the pool was constructed on the original site piers may not have been needed.
[18] The applicants submitted that if the original soil test had been carried out to the proper depth it may have exposed the unsuitable soft material found on the first day of excavation. There was no indication that the original soil test was not appropriately done and the Border Tech company geotechnical engineers with more than 20 years experience the applicants were advised of the latent defect in the soil immediately upon it becoming known to the respondent and had the option to either continue with the construction or terminate the contract as did the respondent. The applicants took the view that the proposed additional costs to continue with the construction of the pool were outside the terms of the contract and were within their rights to terminate the contract based on the relevant clause. In the response the respondent indicated that the expenses up until the date of excavation totalled some $11,849.00 made up of a sub total of various costs of $8,977.00, GST of $897.70 and a contractors margin of 20% of $1,974.94. The amount received by the respondent from the applicants at that time was the sum of $3,100.00. The respondent therefore claimed an amount of $8,749.64 plus the amount of $600.00 for a supervisor totalling an amount of $9,349.64.
[19] In the normal course of events the applicants would be responsible for this amount or a large proportion of it however, the applicants has incurred costs in the restoration of the property to its former condition. These amounts referred to excavating and returfing damaged lawns, reinstating garden beds, repairing broken stormwater pipes and watering systems, body corporate approval fees, an engineers report to fill the excavation and moving and replacing water tanks and air conditioners to provide access to the property as well as providing temporary buttressing to the excavation to prevent further collapse, this amount appears to total some $7,774.00.
[20] There appears to be a claim by the respondent against the applicants for $9,349.00 as against a counterclaim by the applicants against the respondent for $7,874.00. In the normal course of events there would be a payment by the applicants to the respondent of an amount of $1,475.00 being the difference between the competing claims, however in the circumstances and having regard to the need of the Tribunal to deliver a decision that is fair and equitable in the circumstances such a payment would not be warranted.
[21] There is also the issue of outstanding steel and other miscellaneous items that were delivered to the site by the respondent which have been abandoned by the respondent on site since the excavation work was commenced. The Tribunal is of the view that the contract was validly terminated by the applicants and that no further payment should be made by either party to the other and that the respondent should attend on site after having given notice to the applicants to remove any outstanding steel and other items left on site by the respondent.
Orders
[22] That the contract between the applicants and respondent dated 4 January 2010 was validly terminated by the applicants.
[23] That no further moneys are owed by either party to the other.
[24] That the respondent arrange with the applicants to attend on site to remove any outstanding steel and other items left by the respondent.
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