ROBERTS v VIVEKANANDA (Civil Dispute) - [2020] ACAT 67

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ROBERTS v VIVEKANANDA (Civil Dispute) [2020] ACAT 67

XD 1286/2019
Catchwords: CIVIL DISPUTE – terms of the agreement a mixture of written and oral – sources used to identify the terms of the contract – whether there was a breach of contract – quantum meruit – what is a fair and reasonable amount of compensation

Legislation cited: Australian Consumer Law s 60

Cases cited:Madiana (owner of Steamship) v Comet (owner of Lightship)[1900] AC 113
Mann v Paterson Constructions Pty Ltd [2019] HCA 32
GEC Marconi Systems Pty Limited v BHP Information Technology Pty Limited [2003] FCA 50

List of

Texts/Papers cited: Peter Edward Nygh and Peter Butt, Butterworths Australian Legal Dictionary (Lexis Nexis, 1997)

Tribunal: Senior Member J Lennard

Date of Orders:  3 September 2020
Date of Reasons for Decision: 3 September 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL  XD 1286/2019

BETWEEN:
DEAN ROBERTS
Applicant

AND:
RAVI VIVEKANANDA
Respondent

TRIBUNAL: Senior Member J Lennard

DATE:3 September 2020

ORDER

The Tribunal orders that:

The respondent shall pay to the applicant, within 7 days of the date of these orders the amount of $15,889.27 being
(a)$13,809.37;
(b)Interest in accordance with the Court Procedure Rules 2006 on $13,809.37 from 22 August 2018 to the date of these orders $1,507.4; and
(c)ACAT filing fee of $572.50.

………………………………..
Senior Member J Lennard

REASONS FOR DECISION

Introduction

This case demonstrates the problems of entering into a complicated building contract without clear communication as to essential terms of the agreement.
The respondent was constructing a house for himself and his wife to occupy as their primary residence as an ‘owner builder’. The respondent was ‘project managing’ the building work. The construction commenced in August 2016.
First contact between the parties was in August 2016, when a quotation for metal roofing work to commence in January 2017, was supplied by the applicant to the respondent. The respondent informed the applicant in January 2017 that work was delayed in that the respondent would contact the applicant when he could commence work.
In June 2018, the parties entered into a contract in relation to premises being constructed by the respondent at block 15, section 43, Mawson in the ACT.
The only document relating to the contract is a quotation dated the 12 February 2018. The quoted price is $88,000 and the work is described as:
Supply and Fix Colorbond Custom Orb, .48 including Color Screws, Valleys, Ridge, Cappings and 55MM Anticon, Metal Roof Battens, Fascia and Guttering, panel rib eves (sic) and fix velux windows and gazebo.
On or about 22 June 2018, the applicant met with the respondent at the building site. The roof structure was not ready for the applicant to commence work. The respondent, in consultation with the applicant, prepared a list of omissions for rectification of the roof structure. The respondent consulted with his building certifier.
The carpenter who had erected the trusses returned to the building site and completed some of this work.
On 4 July 2018, the respondent paid the applicant $20,000. The applicant describes the $20,000 as a deposit in relation to the work covered by the quote above. The applicant gave evidence that the parties had a verbal agreement that regular progress payments would be made.
On or about 9 July 2018, the parties entered into a second contract for the applicant to undertake the work to rectify the roof structure and to bring the roof structure to a state of readiness for commencement of the work described in the quote of 12 February 2018. The Tribunal received evidence from the applicant, the respondent, and the building certifier in relation to the rectification work. The work, which was to be completed, was intended to bring the roof structure to a state of readiness for commencement of the roofing contract work. In that respect, it consisted of installing additional roof ties or L Brackets and straightening valleys to ensure that the ridge capping would be straight and the slopes of the roof would be correct.
It was common ground between the parties that this work was in addition to the work described in the roofing contract, as set out in the quote dated 12 February 2018.
On or about 16 July 2018 the applicant commenced that work. The applicant undertook some rectification work, installed the velux window frames and installed the fascia and gutter to the back of the house. The applicant also ordered the roofing materials and they were delivered to the building site, cut the insulation and roofing sheets to size. This work was completed on or about 15 August 2018.
The building certifier attended the site on 17 August 2018 and inspected the work. The building certifier provided a written statement and gave evidence at the hearing. In his written statement he says:
I inspected the roof structure on the morning of Friday, 17 August 2018, and the only person present at the site was the apprentice. At that time the roofing battens had been installed and some of the fascia and gutter to the rear of the house. I subsequently spoke to the owner and advised him that the roofing sheets could now be placed.[1]
[1] Statement of Donald John Waring dated 23 January 2020 at paragraphs 8 to 10
The building certifier gave evidence that he would not have given instruction to the applicant or the apprentice that the roofing work could commence. I found the evidence of the building certifier to be imprecise as to what had happened at particular times, and note that he did not provide copies of his inspection notes, his evidence was directed more to his usual practice, rather than any detailed explanation of his inspection, and communications with the builder and the home owner, on 17 August 2018.
At the conclusion of the certifier’s evidence about 17 August 2018, the Tribunal put to him:
What we have got there then, is [that] you are of the view [that] you have spoken to the builder [the respondent], perhaps you have spoken to the apprentice and you would have let the owner know that at this point it was fine, once the frames were replaced, to begin the sheeting of the roof? The building certifier replied: Yes, because it would not preclude the corrective actions that were still not completed.[2]
[2] Transcript of proceedings 13 March 2020, page 111, lines 27 to 35
The applicant gave evidence that he had spoken, by phone, to the building certifier on 17 August 2018 and was told that he could now begin the roofing work; that he visited the site and replaced the wall frames which had been removed to allow access for the scissor lift needed for the rectification work and that his apprentice had informed him that the certifier had visited the site and given the go ahead for the roof sheeting to be installed.
On 16 or 17 August 2018 the respondent requested a progress payment list from the applicant. On 19 August 2018 at 12:15pm the applicant sent to the respondent an email which included the following paragraph:
the original quote was $88,000. You have already paid $20,000. Next week on 27 August 2018 I will need $34,000. After the skylights have been fitted I will need $6000. After the eaves have been finished I will need $8000. After everything has been completed on the job I will need $20,000 in cash.
The respondent sent a return email at 3:41pm on Sunday 19 August 2018. Attached to that email was a letter terminating the contract.
The application is for payment of two amounts:
(a)Payment for work done pursuant to the roofing contract and the supply of materials in preparation for the commencement of the roofing work. The total amount claimed for that work and materials is $22,403.56: the respondent paid a deposit of $20,000 on 4 July 2018 which has been allocated to this, leaving a balance of $2,403.56.
(b)Payment for the rectification work in the amount of $16,490.

What are the terms of the contracts?

The parties have entered into two contracts: the roofing contract and the rectification contract. The evidence establishes that the contracts were mainly oral and negotiated over a period of time. The task for the Tribunal is to determine the terms of the contracts.
Terms of a contract may be written or verbal, express and implied. The express terms of the contract are those contained in writing and those terms orally agreed by the parties. In this instance, there is considerable disagreement between the parties as to what is the meaning of their written correspondence and the content of their conversations, and in this instance, the terms of the contract must be identified by looking at a number of sources:
(a)Pre contractual conversations between the parties.
(b)The written quote dated 12 February 2018.
(c)Conversations between the parties on or about 12 February 2018.
(d)Conversations between the parties in mid-June 2018.
(e)Conversations between the parties during the course of the applicant’s work at the premises.
(f)Email and text messages between the parties.
(g)Custom or trade usage.
The contract for roofing work
The parties had been in discussions since August 2016. The applicant had provided a quote to the respondent on 25 August 2016. The work was delayed. In January 2017 the respondent informed the applicant that he would contact the applicant when the job was ready to commence. In late January 2017, the applicant met with the respondent and collected a hard copy of the house plans. The applicant gave evidence that the respondent had offered, before the quote was provided, to pay some of the cost of the roofing contract in cash.[3] The respondent denies this. I accept the applicant’s evidence that such an agreement had been reached.
[3] Transcript of proceedings 13 March 2020 page 57, line 40 and page 61, lines 15 and 45
The applicant gave evidence that it was a term of the contract that he would be paid in progress payments. The applicant was required to pay suppliers within 30 days and paid wages to his employees fortnightly: Progress payments were necessary to allow these payments. There was no schedule of payments but an invoice for a progress payment would be issued to the respondent as the work progressed. The exchange between the applicant and the Tribunal is reproduced below:
SENIOR MEMBER LENNARD: The roofing contract. Now, I think you say in your application that you expected to be paid in progress payments for that amount.
MR ROBERTS: Yes.
SENIOR MEMBER LENNARD: Was that discussed prior to the quote being accepted?
MR ROBERTS: Yes.
SENIOR MEMBER LENNARD: And was there in that discussion any detail of what those payments would be?
MR ROBERTS: No. Sort of like as the job progressed I’d ask for some more money, sort of thing, you know. I wasn’t - there was no certain dates or any times or anything else.
SENIOR MEMBER LENNARD: So it was expected that as you did the work, you would produce an invoice?
MR ROBERTS: Yes.
SENIOR MEMBER LENNARD: Showing what work had been done so far?
MR ROBERTS: Yes.
SENIOR MEMBER LENNARD: And this was to allow you the cashflow to continue.
MR ROBERTS: Yes. Yes, the materials would keep people - -[4]
[4] Transcript of proceedings 13 March 2020 pages 5-7
The respondent gave evidence that the only discussion about progress payments was on 17 August 2018. The exchange between the Tribunal and the respondent is reproduced below.
SENIOR MEMBER LENNARD: Okay. Do you agree that that was what was contemplated in this simple contract?
MR VIVEKANANDA: The discussion about the progress payments occurred on 17 August. I asked Mr Roberts to give me a list of - - -
…
MR VIVEKANANDA: I asked Mr Roberts on 17 August to give me a list of progress payments that we would have to make towards the end of the contract. I understood that I would have to do that as a matter of law. And he provided that on 19 August in an email, … [emphasis added]
When asked the question:
And certainly on 17 August when we’re at the stage where that work is ready to commence, you anticipated that you would be making progress payments, and so you asked for a list of those for your own budgeting and planning purposes.
The respondent replied “Yes”.[5]
[5] Transcript of proceedings 13 March 2020 page 8
I note that it is usual in building contracts for progress payments to be required. I am satisfied on the evidence before me that it was a term of the roofing contract that the respondent would make progress payments to the applicant upon being given an invoice.
The written quote dated 12 February 2018
A copy of the written quote was before the Tribunal. The quote is dated 12 February 2018 and is in relation to block 15, section 43, Mawson in the ACT. The quote is for the amount of $88,000, and under the heading “DESCRIPTION”, states:
Supply and Fix Colorbond Custom Orb,[6] .48 including Color Screws, Valleys, Ridges, Cappings and 55mm Anticon,[7] Metal Roof Battens, Fascia and Guttering, panel rib eves and fix velux[8] windows and gazebo.
[6] A corrugated steel roofing material
[7] Insulation wool
[8] A skylight-like window placed into the roof
The parties agree that this quote was accepted by the respondent in June 2018.
The quote does not set out any further terms.
The respondent had engaged a separate tradesman to undertake the installation of roof trusses and window frames. It was expected by both parties that the applicant would commence roofing work after the roof trusses and window frames were completed.
The rectification contract
On or about 22 June 2018, the applicant, together with his apprentice, met the respondent on the job site. The applicant formed the view that the roof trusses were not stable, or straight. The applicant and respondent compiled a list of work to be completed on the trusses and the building certifier was consulted. The building certifier, in his written statement, says:
6. I subsequently had a meeting with the carpenter who erected the trusses (another carpenter had erected the frames) at which I discussed the list of omissions and what work had to be done.
7. I understood that the carpenter did most of the work under the list, but the roofer still made complaints about the roof structure.
Both the applicant and the respondent concede that, on or about 9 July 2018, an oral contract was entered into for the applicant to complete the rectification work; and that the applicant would be paid. The work to be performed under the rectification contract was separate from, and in addition to, the roofing contract. Each party states that the hourly rate to be paid was not specified.[9]
[9] Transcript of proceedings 13 March 2020 page 24
The respondent, in his written statement dated 24 January 2020, says that there was no discussion as to the rates that would be charged for this work[10] and:
there was no agreement between Mr Roberts and me concerning the hourly rate he would charge for himself and the first year apprentice for work under the oral agreement . I was however aware that I would be obliged to pay him a fair and reasonable amount of money for the work he undertook in the absence of any agreement on price.[11]
Further, the respondent says
as I mentioned I have always accepted that I would pay Mr Roberts on a quantum merit basis as assessed independently upon advice of the work actually undertaken for each day claimed by him.[12]
[10] Written statement by the respondent of 24 January 2020 paragraph 68
[11] Paragraphs 71 & 72
[12] Paragraph 76
I do not accept that an experienced lawyer, which I understand the respondent to be, would form the view at the time of formation of the rectification contract, that the work done by the applicant would be paid on a quantum meruit basis after independent assessment of the work. On several occasions in both written and oral evidence the respondent says the hourly rate was not discussed or agreed.[13] The respondent did not give evidence that the payment of a rate per hour was never discussed.
[13] Transcript of proceedings 13 March 2020 page 24
I am satisfied on the evidence before me that the parties had not agreed on the rate to be charged per hour for the applicant and his apprentice. I am, however, satisfied that the amount charged by the applicant would be calculated at an hourly rate: the hours worked multiplied by the rate.
The applicant has the onus of establishing the hours worked by himself and by his apprentice. Given the absence of any express term as to the hourly rate to be charged for either himself or his apprentice, the law implies a term that the rates would be reasonable, in accordance to the usual rates charged in the industry. The respondent states at paragraph 72 of his written statement of 24 January 2020:
I was however aware that I would be obliged to pay him a fair and reasonable amount of money for the work he undertook in the absence of any agreement on price.
The applicant gave evidence that he had written down the hours worked each day by his apprentice and himself but had not recorded specific tasks completed on each day.[14] The respondent in his written statement of 24 January 2020 says:
The circumstances that led to an verbal or oral ancillary contract whereby Mr Roberts was to ensure that the roof structure of the home met the installation requirements of the steel and truss manufacturer, … before he could undertake the Roofing Contract. This I have described in my response and this statement as the Oral Agreement In particular although the subject matter of the Oral Agreement, was defined by reference to whatever omissions appear in the installation of the roof trusses were to be rectified to allow performance of the Roofing Contract, and the identity of the contracting parties known, that is Mr Roberts and myself, no price had been agreed or for that matter even discussed [errors in the original].[15]
[14] Transcript of proceedings 13 March 2020 page 21
[15] Written statement of the respondent paragraph 2 (d)
The respondent in his written statement, submissions and oral evidence asserts that there were two express terms of the rectification contract:
(a)That the work would be done in accordance with the plans supplied by the manufacturer of the steel frames and trusses. The respondent says that the plans “were available to the applicant at all times in kept in the site shed”.
(b)That the applicant would keep a daily record of the work that he did.
The applicant denies that there was an express term that the work would be done in accordance with the plans supplied by the manufacturer of the steel frames and trusses. The applicant repeatedly stated in oral evidence that the respondent had not specified that the work be in accordance with the plans.[16] The applicant also gave an explanation that he was working to rectify work that had been completed more or less in accordance with the plans, by the carpenter that erected the trusses. The applicant stated he was putting in missing screws, straightening valleys and ridge lines, and putting in additional brackets. The applicant said:
Because all the trusses were already up and everything was down. All I had to, sort of, do is straighten things up, put some L‑brackets all over the place everywhere, fix up the tops of the ‑ the valleys and stuff like ‑ or – yeah.[17]
[16] Transcript of proceedings 13 March 2020 page 13, line 32; page 17 line 1-2
[17] Transcript of proceedings 13 March 2020 page 17, lines 8-12
The evidence before me establishes that the carpenter who had erected the trusses was recalled by the respondent and supplied with a list of omissions. That list was in evidence before the Tribunal. That carpenter undertook some remedial work but did not complete the work to the satisfaction of the building certifier, or the applicant. The respondent says in his written submission of 24 January 2020:
62.     As the progress of the construction was being delayed, I asked Mr Roberts if he could complete the work required under the Aussteelplans and ready the roof structure to enable roofing materials to be placed on the roof.
63.     There was no point in getting Mr Crouch back Mr Crouch despite working for MacDonald Jones Homes, and recommended to me by the managing director of a large building company which I had acted for, seemed not very competent or motivated to do further work. I had made the mistake of paying him fully, as he was in need of money and had a young family
64.     I was concerned that there was already enough delay due to tradesmen not completing their work in a proficient manner. Mr Roberts said he was being delayed himself.
65.     Mr Roberts said he knew what to do to complete the roof structure. It should be remembered that all the trusses and other components of the roof had already been erected, but what seemed to be incomplete were a number of bracing elements that made the roof structure rigid. These elements were bracketing, truss noggins and missing framing members that joined the bottom chord of trusses, … Mr Crouch had already inserted some of these elements but a number were missing.

I am not satisfied, to the civil standard, on the evidence before me that it was an express term of the contract that the applicant should undertake the remedial work in accordance with the manufacturer’s plans. The applicant was engaged to undertake work to complete another’s work and to ready the building for the roofing work.
I am not satisfied, to the civil standard, on the evidence before me that it was an express term of the rectification contract that the applicant records the work done on each day. There is, however, evidence before me, provided by the applicant of the hours claimed, the work undertaken, and the materials purchased.
The applicant makes a claim for payment based on a specified hourly rate. There is no express term of the rectification contract in which any hourly rate is specified. The roofing contract was for an amount of $88,000 and did not provide any breakdown of costings. The applicant’s claim is for work done under each of the roofing and rectification contracts.
On 13 August 2018, the applicant sent an email to the respondent. Attached to the email was a spreadsheet of dates and hours worked by the applicant and his apprentice pursuant to the rectification contract. The applicant charged $80 per hour for his work and $46 per hour for his apprentice. The respondent objected to the amount charged and there were some telephone conversations relating to these charges. On 16 or 17 August the respondent requested a list of progress payments for the roofing contract.
On 19 August 2018 at 12.16pm the applicant emailed the respondent in the following terms:
Hi Ravi,
After our discussion last Friday I’ve had another look at [the apprentice’s] hours and I have reduced his hourly rate to $40.00
…Last Thursday and Friday, [the apprentice] has already done 2.5 hours Thursday and 2.5 hours Friday. I was there for 3 hours on Friday and I know there is more work cutting trusses so I can fix the fascia and gutter. There will be no extra charges on the job.
The original quote was $88,000. You have already paid $20,000. Next week on 27 August I will need $34,000. After the skylights have been fitted I will need $6,000. After the eves have been finished I will need $8,000. After everything has been completed on the job I will need $20,000 in cash. [errors in the original]
The respondent in his written submissions in response to the application states that the roofing contract was terminated “because of the applicant’s breach of the roofing contract, for requiring a progress payment of $34,000.00 to be paid on 27 August 2018.” The respondent terminated the contract for the roofing work by a letter attached to an email on 19 August 2018. That letter on the letterhead “Ravi Vivekananda, Barrister”, was headed:
Demand for payment of $34,000 in breach of Contract for installation of roof at 6 MacRobertson Street Mawson.
…
9.       By seeking the payment of $34,000 to be paid on 27 August 2018 you are again seeking to vary the contract by requiring payment before work has been undertaken. You are not entitled to any payment of monies before work is undertaken in the demand for payment is a breach of the contract. This is a clear repudiation of the terms of the contract.
10.     Your repudiation of the terms of the contract entitles me to end the contract, which I do by this letter.
11.     Furthermore:
(a)You have advised that you will be going on holidays between 27 September 2018 and 16 October 2018, without any indication of what work will be completed by the commencement of your holiday;
(b)the seeking a cash payment for the work you are undertaking you are requiring me to engage in a conspiracy to defraud the Taxation Commissioner.
…
15.     As the contract has ended you are no longer permitted to enter the building site for the works.
The applicant responded to this letter later on 19 August 2018. The applicant appears to have accepted the respondent’s repudiation of the contract and attached to his email were two invoices for the work done by himself and his apprentice in relation to the rectification contract. On 22 August 2018, the applicant sent an email to the respondent. Attached to that email was a letter of demand for the work done pursuant to the remedial contract and for supply of materials and some work done pursuant to the roofing contract. The $20,000 already paid by the respondent to the applicant was accounted for in that demand.
The email of 19 August 2018 setting out the anticipated progress payments was not expressed by the applicant to be a demand for payment by the applicant. The respondent was required to make progress payments, the applicant has given evidence that he would render an invoice for each payment when it was required. The list of progress payments was supplied at the request of the respondent. The respondent gave evidence that he requested the list of progress payments for his own budgeting and planning purposes.[18]
[18] Transcript of proceedings 13 March 2020 page 8
The respondent did not produce any evidence to establish that, if a progress payment was demanded by 27 August 2018, then the applicant would not have completed sufficient work to entitle him to make that demand. The applicant gave evidence that there were further materials ordered and that they would be delivered as soon as he had started the work and there was room at the site. The applicant gave evidence that he intended to begin work on the roof on Monday 20 August 2018 and that the roof could be completed between two and five weeks from that time. The invoice rendered for the work pursuant to the roofing contract shows that that work was valued at $22,403.56, so the $20,000 already paid by the respondent had been exhausted.
There is not sufficient evidence before me for me to determine that the applicant would have been entitled to ask for a progress payment of $34,000 on 27 August 2018. There is sufficient evidence to show that the applicant would have completed further work, including arranging for delivery of materials to the site.
I accept the evidence of the applicant that the list of progress payments was a guideline only, that he had not demanded any payment in the email of 19 August 2018, that he would render an invoice when the progress payment was required and that he was open to negotiation about the timing of the progress payments.
The applicant gave evidence that he would send an invoice when a progress payment was required, that he had not sent an invoice in relation to a progress payment and further in his oral evidence:
Yes, but he asked me for that. I didn’t demand any money. He just asked me random - roundabout time that - that’s why I sent the email and that’s when he used the email against me. There was demand of payment. I didn’t say, ‘Oh, because the roof sheets are gunna go on.’ I didn’t say that. I would - if I got to that date, if nothing was done I wouldn’t have even asked for any money. He asked me for it and he’s used that against me to terminate the contract. That’s why there was those bits of things.[19]
[19] Transcript of proceedings 13 March 2020 page 87, lines 30-37
The respondent asks me to draw the conclusions that the applicant had demanded a progress payment to be made on 27 August 2018, and that such a demand was not in accordance with the terms of the contract. I am not satisfied on the evidence before me that I should reach either of those conclusions. I take into account to consistent evidence of the applicant, the haphazard approach to the contract and the lack of formality or certainty in both the conduct and the communications of the parties.
The applicant submitted that the respondent had set him up by requesting the list of progress payments: the respondent was not happy with the rates being charged for the rectification work; was looking for a way to avoid that payment and used the list of progress payments in the email of 19 August 2018 as an excuse to terminate the contract and so avoid payment for the rectification work. In all the circumstances these are not unreasonable submissions.
The respondent referred to two other matters: the planned holiday of the applicant and the request for cash payment giving rise to a fraud on the revenue. The first cannot be a breach of contract. The second is not established on the evidence before me.
The applicant gave evidence that the respondent had agreed to pay him cash. The respondent denies this. I accept the evidence of the applicant that he uses a lot of cash in his business. I take into account that the amounts requested by the applicant in the list of progress payments totals the quoted price of $88,000; the communications from the applicant are in writing, not secret; there is nothing illegal in asking to be paid in cash. The respondent submitted that the ‘tax dodge’ was established by the applicant’s reference to the payment for the apprentice “going through the books”. The applicant gave the following explanation when asked by the Tribunal why he had offered a discount for cash:
MR ROBERTS: Because it’s straight money in your hand. You don’t have to wait three or four days or five days by the time they transfer it from their bank account into your bank account and it takes another, you know, a few, three or four days. It’s already right there. Like, I - you know, as I said, I run it through my business. It’s always good to have a little bit there. I always, you know, get cash receipts, you know, all the bits and pieces.
Like, even just last week when the hail come through, I had to buy about seven or eight of those roof tiles and they didn’t have any EFTPOS or anything else. I had to use cash to pay. So I just - I’m using it through the business all the time. You know, the other time the skylights were busted, they didn’t have EFTPOS or anything else. I had to use cash there. So it runs through the business. I’ve got an accountant, a fulltime accountant, and he said it’s all right to do it that way.
SENIOR MEMBER LENNARD: And what about the email then on page 21 where you say, ‘After everything has been completed on the job, I will need 20,000 in cash.’
MR ROBERTS: Yes. Well, that’s what I mean. That’s just - yes, that was discussed before - at the end, like, when the tenants were in earlier, that was discussed, yes. I’ve still got to run it through my business. I’ve got to pay for materials and everything else. The only thing I can’t do is pay Max’s MBA one. That’s why I needed to run different things because the MBA takes it straight out of the bank sort of thing, out of my - out of stuff, and the rest I just use for my business and that. It’s not as if it’s a million dollars or something. You know, like, I run it through my business all the time. That’s what I said. He can’t tell me what - he doesn’t know what I’m going to do with the cash.
MRS ROBERTS: And the point is you discussed it, otherwise - - -
MR ROBERTS: Yes.
MRS ROBERTS: - - - you would[n’t] have just said final payment, 20,000.[20]
[20] Transcript of proceedings 13 March 2020 pages 78-79
I find that the applicant had not breached the contract by demanding payment for work not done, or engaging in a conspiracy to defraud the revenue. I am satisfied on the evidence before me that the contract terminated on 19 August 2018 by the respondent’s repudiation of the contract, as set out in his letter, and the acceptance of that repudiation by the applicant, as evidenced by his conduct in sending invoices and a letter of demand. I note that the respondent refused the applicant access to the site after 19 August 2018.

The applicant’s claim for payment

Quantum meruit

Quantum meruit may be contractual or restitutionary in character. It is contractual where a contract fails to state a price for services and the law implies a term requiring the payment of a reasonable sum. It is restitutionary where there is no contract between the parties, or a valid or unenforceable contract has been discharged for breach or repudiation. The Latin phrase quantum meruit mean so much as he has earned or so much money as the plaintiff reasonably deserves to have in return for the services or work done.[21]
[21] Peter Edward Nygh and Peter Butt, Butterworths Australian Legal Dictionary (Lexis Nexis, 1997)
Where the parties enter into a contract, but a fixed price is not a term of the contract, and the parties have not provided any formula for determining the price of the work done, then the law implies a term that a reasonable price shall be paid.
In the usual course of events the applicant would be entitled to recover from the respondent the contract price for all work completed and for which he had accrued a contractual right of payment prior to the termination of the contract. This would include any work completed under the roofing contract where that work was sufficient to give rise to a right to a progress payment and all work completed pursuant to the rectification contract had the contract specified an hourly rate. Where there was work done but no contractual right to payment for that work at the time of termination, the applicant would be entitled to be paid for that work on a quantum meruit basis.[22]
[22] See Mann v Paterson Constructions Pty Ltd [2019] HCA 32
Court and tribunals have not set out a definitive list of factors to be considered in the calculation of a quantum meruit award, nor is there any one equation that can be universally applied. However, I note the following principles:
(a)The Tribunal’s task is not to make an assessment of damages for breach of contract but to ascertain what is the fair and reasonable amount of compensation to be paid to the applicant for the benefit received by the respondents for the work performed.
(b)The assessment of what is a fair and reasonable amount of compensation to be paid for the applicant is not to be based solely on actual costs incurred by the applicant in performance of the work, but those costs must be considered.
(c)Any price or payment rate, or method of calculation, agreed between the parties may be considered as evidence of the value the parties put upon the services performed, but is not the sole determinative factor.
The calculation of an amount in quantum meruit includes costs of material, cost of labour and profit. Builders charge a margin of 15-20%. In determining what is a fair and reasonable amount of compensation, the tribunal may have regard to, inter alia, the following factors:
(a)The nature of the work performed, including the level of difficulty and specialist knowledge required.
(b)The experience of the applicant.
(c)The qualifications of the applicant.
(d)The extent of supervision of other workers required of the applicant.
(e)Any ancillary work requirement, such as ordering materials and arranging delivery or collection of materials.
(f)Whether the applicant supplied his own tools.
(g)Whether the respondent supplied materials or equipment.
(h)The usual commercial rates charged for such work.
(i)General commercial costs such as insurance, equipment hire, wages and superannuation.

The applicant’s claim

The rectification contract

The applicant claims $16,940. He has provided a spreadsheet which sets out the dates and hours worked by himself and his apprentice. The applicant has claimed 131 hours for himself at $80 per hour and 123 hours at $40 per hour for his apprentice. The applicant gave evidence that he recorded the hours worked every day. The work sheets completed by the apprentice and the tax invoices paid by the applicant to the Master Builders to cover the apprentice’s wages show that the hours claimed by the applicant for the apprentice corresponded to the hours on the work sheets. The invoices establish that the applicant was invoiced the amount of $4,008.73 during the period 16 July to 13 August 2018. The applicant has invoiced the respondent the amount of $5,412 for the apprentice’s work. This represents a 25% premium or mark up.
The respondent says that the hours claimed are not accurate and that the hourly rate is excessive. The spreadsheet provided by the applicant show eight hours claimed for each day the apprentice worked but also show that he was only on site for eight hours and took a 30 minute meal break each day. Therefore, the apprentice only did 7.5 hours work each day. The invoices from Master Builders show that the applicant paid the apprentice for eight hours every day. I therefore conclude that the meal break is a paid break, and the costs have been passed on by the applicant to the respondent.
The respondent gave evidence that on 30 July 2018 he visited the site at 12:30pm, the applicant was not present. The apprentice said the applicant had gone to pick up screws. The respondent was still on site at 2:30pm and the applicant had not returned. The apprentice said that the applicant had gone home after collecting the screws. The applicant said he could not remember this day. The respondent said the Tribunal should doubt every claim for eight hours worked daily.

The roofing contract

The applicant provided invoice 1173, dated 22 August 2018, for an amount of $2,403.56 on the evidence before me that invoice covered:
(a)Supply screws and fix only metal roof battens (1020 m by $8 per linear metre plus GST) = $8,976.
(b)Fixing fascia and gutters (58.7m at $20 per linear metre plus GST) = $1291.40.
(c)Cut and reroll Anticon insulation (five hours by apprentice at $40 plus GST) = $220.
(d)Payment by the applicant of invoice dated 15 August 2018 from Lysaght Steel = $9,766.09.
(e)Payment by the applicant of invoice dated 13 July 2018 from Fletcher Insulation = $1,418.45.
(f)Payment by the applicant of invoice dated 15 August 2018 from Fletcher Insulation = $731.62.
(g)Credit of $20,000 paid by the respondent on 4 July 2018.
The task for the Tribunal is to determine what is a fair and reasonable amount to be paid to the applicant.
The respondent provided a copy of a three page report from a quantity surveyor. The report was based on a site inspection made, in the company of the respondent and his wife, on 18 October 2019. The roofing work had been completed at that time. The respondent had provided a letter of instruction to the quantity surveyor, a copy of which was before the Tribunal. The report states that the assessment is done on a quantum meruit basis, but contains no definition of that term or any information as to methodology. The list of work contained in the quantity surveyor’s report corresponds to the works set out in the application and the invoices issued by the applicant.
The quantity surveyor, whom I note has given evidence for clients of the respondent in other matters, gave the following evidence:
(a)The reports were generally based on publication such as Rawlinsons[23] or in-house databases. The databases used were not in evidence before the Tribunal.
(b)Standard rates were used for the work done, so no allowance was made for extra time that could be involved in rectification of another’s work prior to the applicant’s own work.
(c)The rates allocated per hour for work were $50 for the tradesman and $45 for the apprentice.
(d)The estimated number of hours work was 150, 75 hour each, assuming they worked together.
(e)The figures in the table were calculated on hourly rates and hours attributed to each of the scopes of work. No breakdown of the hours attributed to each item was given; and some costed items are calculated per linear metre.
(f)He had not factored in extra hours for cutting the timber supplied by the respondent for the Velux windows and this would be an extra seven to 14 hours.
(g)The number of hours claimed by the applicant was excessive for work done.
[23] Presumably Rawlinsons Construction Cost Guide
I am unable to accept that a tradesman of thirty years’ experience should charge only $5 per hour more than apprentice rates. I have determined that a fair and reasonable rate for the applicant’s work is $70 per hour.

I have had regard to the following factors:
(a)The work required by the rectification contract included cutting supplied timber to size and undoing and/or adjusting work done by the previous carpenter.
(b)The applicant has 30 years’ experience in the building industry.
(c)The applicant was supervising an apprentice on site.
(d)The applicant arranged for ordering of materials and delivery or collection of those materials.
(e)The applicant supplied his own tools.
(f)The respondent supplied the scissor lift and scaffolding.
(g)The applicant is entitled to a builder’s margin, covering costs as insurance, wages, superannuation and profit.
I have calculated a fair and reasonable amount to be $13,809.37 being:
(a)Applicant’s work on the rectification   contract 175 hours by $70   $12,250.
(b)Applicant’s costs
(i)      Apprentice costs paid to Master Builders            $4,008.73
(ii)     Lysaght Steel invoice  $9,766.09
(iii)   Fletcher Insulation   $1,418.45
(iv)   Fletcher Insulation   $731.62
(c)20% builder’s margin  $5,099.40
(d)Credit for amounts paid by respondent   $20,000

The respondent’s counter claim

The first part of the respondent’s counterclaim is for breach of section 60 of the ACL, which provides:
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.
The respondent says in his written counter claim: “the services provided by the applicant were not fit for purpose, namely, to ensure the roof was secure and complied with all requirements, both legal and engineering”. If services are not fit for purpose, then the applicable section is section 61 of the ACL.
The building certifier gave evidence that on 17 August 2018 he inspected the roof structure. The only person present at the site was the apprentice. At that time the roofing battens had been installed and some of the fascia and gutter to the rear of the house. He subsequently spoke to the owner advised him that the roofing sheets could now be place.[24] The certifier gave evidence that, on 17 August 2018, he was of the view that there was still some corrective action to be done but that it was possible to undertake that action at the same time as the subsequent roofing work was done.
[24] Statement of Donald John Waring dated 23 January 2020 at paragraphs 8-10
It was on a subsequent inspection, after the respondent had repudiated the contract, that the certifier determined that the cyclone straps had not been fixed to the frame in accordance with the manufacturer’s specifications. The certifier gave evidence that the cyclone straps could be fixed prior to the roof sheeting going on, or after the sheeting was on. In either case it would not be a major job, but “more fiddly” and time consuming once the sheeting was on.[25]
[25] Transcript of proceedings 13 March 2020 page115
The respondent did not set out a failure to do the work in an acceptable manner as a breach of contract in the letter of 20 August 2018. Indeed, he did not discover the lack of cyclone ties until early September 2018. The evidence establishes that the applicant had installed a number of cyclone ties to the building; that the building certifier did not make a complaint that more work was needed to tie the roof down on 17 August 2018; that the building certifier told the owner that the roof sheeting could be installed; that any additional ties could be installed as the sheeting work continued and that such work would not be a major job. I am not satisfied on the evidence before me that the applicant has failed to undertake the work with due care and skill. If there had been a breach of the ACL by the applicant, it was a minor breach and would not justify termination of the contract.
The second part of the counter claim is for damages for delay in the completion of the roofing work caused by the termination of the contract. The respondent claims damages for loss of use of the house. This follows from a string of cases beginning with the decision in 1900 in the Mediana.[26] The principle is that the loss of use of property from a breach of contract is grounds for damages, and not merely nominal damages. These are often referred to as vindicatory damages. Where the innocent party has not lost income, or hired a substitute, the calculation of damages can be difficult. In cases such as this the damages are often calculated by reference to the rental value of the building.[27]
[26] The Mediana – Madiana (owner of Steamship) v Comet (owner of Lightship)[1900] AC 113
[27] GEC Marconi Systems Pty Limited v BHP Information Technology Pty Limited [2003] FCA 50
The innocent party is still obliged to take steps to mitigate the loss. I note that the respondent engaged the services of a new roofer, who was the only roofer to quote for the job; who said he would start in November, but did not commence until December 2018. There is no evidence that the work could not have been commenced sooner had the respondent looked further. The respondent gave evidence that the bricklayer was able to undertake work in the interim period. The respondent gave evidence as to his state of health and this may also have been a factor in the delay.
Given my finding that the applicant had not breached the contract by demanding payment for work not done, or engaging in a conspiracy to defraud the revenue; and that the contract was terminated by the respondent’s repudiation of the contract and the acceptance of that repudiation by the applicant; there is no call to consider further the application by the respondent for damages. The counter claim is dismissed.
………………………………..
Senior Member J Lennard

HEARING DETAILS

FILE NUMBER:	XD 1286/2019
PARTIES, APPLICANT:	Dean Roberts
PARTIES, RESPONDENT:	Ravi Vivekananda
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member J Lennard
DATES OF HEARING:	13 March 2020