Saccone v Ampezzo Pty Ltd
[2008] WADC 34
•27 FEBRUARY 2008
SACCONE -v- AMPEZZO PTY LTD [2008] WADC 34
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WADC 34 | |
| Case No: | CIV:2413/2004 | 10, 11 & 12 DECEMBER 2007 | |
| Coram: | STAVRIANOU DCJ | 26/02/08 | |
| PERTH | |||
| 28 | Judgment Part: | 1 of 1 | |
| Result: | Judgment for plaintiff on claim Judgment for defendant on counterclaim | ||
| PDF Version |
| Parties: | LORENZINA MARIA SACCONE AMPEZZO PTY LTD (373 355 827) |
Catchwords: | Contract Building dispute Breach of contract Claim for damages for defective and incomplete work Turns on own facts Contract Building and engineering contract Breach Right to terminate Whether repudiation Assertion that contract terminated Abandonment Right to damages |
Legislation: | Nil |
Case References: | DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
AMPEZZO PTY LTD (373 355 827)
Defendant
Catchwords:
Contract - Building dispute - Breach of contract - Claim for damages for defective and incomplete work - Turns on own facts
Contract - Building and engineering contract - Breach - Right to terminate - Whether repudiation - Assertion that contract terminated - Abandonment - Right to damages
Legislation:
Nil
(Page 2)
Result:
Judgment for plaintiff on claim
Judgment for defendant on counterclaim
Representation:
Counsel:
Plaintiff : Mr S G Alteruthemeyer
Defendant : Mr P A Kyle
Solicitors:
Plaintiff : Morgan Alteruthemeyer
Defendant : Kyle & Company
Case(s) referred to in judgment(s):
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
(Page 3)
- STAVRIANOU DCJ:
Introduction
This action concerns a home building contract between the plaintiff as owner, and the defendant, as builder. The defendant was to supervise subcontractors and was to be paid a commission.
2 The plaintiff alleges that the defendant breached the agreement by failing to properly supervise a plumbing contractor who had been engaged to work on site.
3 The plaintiff's case is that the contractor did not install and complete the work and that some of the work required rectification.
4 The plaintiff's pleaded claim is for $33,889.90 being the cost of completing and rectifying the plumbing work. In closing submissions the claim was reduced to $19,283.80.
5 The defendant counterclaims $11,317.90 as outstanding commission.
The Parties
6 The plaintiff is a restaurant proprietor and at all material times was the owner of a property in Attadale ("the land") upon which the home was built ("the home").
7 The defendant is a building and construction company associated with Umberto Sgro ("Mr Sgro") and his wife Giovanna Sgro ("Mrs Sgro"). When I need to refer to them together I will use the phrase "the Sgros".
8 The plaintiff and the Sgros were for many years close family friends. Mrs Sgro and the plaintiff's mother are first cousins. On occasions the plaintiff and the Sgro's would travel and socialise together.
The pleadings and the issues
9 The plaintiff relies upon an oral agreement made in or about April 2002 and pleads terms that:
1. The defendant would organise, supervise and be responsible for all aspects of the construction.
2. The defendant would be paid on a cost plus 10 per cent commission basis for each contractor subcontracted.
(Page 4)
10 The plaintiff pleads that the defendant subcontracted Lupica Plumbing and Drainage Specialists ("Lupica") to install and complete the plumbing work and that it breached the agreement in that:
1. It failed to properly supervise Lupica and refused to accept responsibility to organise or carry out the remedial work.
2. In or about December 2002, it refused to complete its obligations under the agreement and failed to attend to the completion of the construction.
11 The plaintiff further pleads that Lupica did not complete the works in accordance with the approved plans and after continued inaction by the defendant she instructed CPL Plumbing ("CPL") to complete the work.
12 The plaintiff’s case was opened on the basis of a failure to properly supervise. However at trial one of the principal issues related to the quality of the work done by Lupica. The plaintiff provided answers to particulars which detailed the alleged incomplete and defective work.
13 The defendant pleads that the plaintiff breached the agreement in December 2002 by commencing to instruct the defendant's subcontractors without its consent.
14 The defendant pleads that the plaintiff repudiated the agreement on 4 March 2003 when she orally informed Mr Sgro that she intended to manage the construction and terminate the agreement. The repudiation was accepted by letter dated 7 March 2003. It is pleaded the agreement was terminated and thereafter the defendant did not supervise the building work.
15 The defendant denies that it has breached the agreement as alleged by the plaintiff.
16 The defendant admits the agreement but denies that its commission was to be determined as alleged by the plaintiff. The defendant pleads that it was to be paid on a cost plus 10 per cent basis calculated on the total cost of construction of the home. The plaintiff's case is that the defendant would only be paid for work done by subcontractors arranged by the defendant.
17 In the reply and defence to counterclaim, the plaintiff denies the allegations made by the defendant.
(Page 5)
Overview
18 In 2001 the plaintiff decided to build a new home on the land and approached Mr Sgro. There were initial discussions which did not result in an agreement.
19 In November 2001 a demolition contractor, engaged and paid for by the plaintiff, cleared the land.
20 In about early 2002 the plaintiff again spoke to Mr Sgro. In April 2002 it was agreed that the defendant would build a new home to lock up stage for the plaintiff. It was a cost plus contract with the defendant's remuneration calculated by reference to amounts paid to subcontractors. The plaintiff was to meet payment of subcontractor's claims for payment together with what was referred to as a commission. The circumstances in which the defendant became entitled to commission was one of the principal controversies at trial.
21 Lupica provided a written quote dated 9 April 2002 for $13,379.30 for plumbing work in relation to the home which was accepted by the defendant. At about that time the construction work began and progressed uneventfully until about January 2003 when a question arose concerning the roofing contractor.
22 In about January 2003 the plaintiff telephoned Mr Sgro. Following the telephone conversation the defendant continued to work on the land.
23 On 20 January 2003 the plaintiff paid the defendant $20,000.
24 On 4 March 2003 Mr Sgro telephoned the plaintiff.
25 On 7 March 2003 the defendant sent a facsimile to the plaintiff in the following terms:
"Further to our telephone conversation of the 4th March 2003 advising that you would forward a letter confirming your instructions to discharge Ampezzo Pty Ltd as Builder for the construction of your house at the above address.
As we have not received this to date we therefore confirm the following.
Ampezzo Pty Ltd has been discharged from any responsibility, claims, liens and/or liability associated with the works at the site located at Lot 118 Warragoon Crescent Attadale WA, as of the
(Page 6)
- 20th December 2002. This extends to any matters that may arise with the Local Government, Statutory Authorities, Insurances, Subcontractors, Neighbours and any other entities being a sole trader, partnership, company etc.
For your records the work performed by Ampezzo Pty Ltd at the subject site up to the 20th December 2002 was limited to the following:
• Footings
• Ground Floor Slab
• Suspended Slab
• Brickwork (Brickwork at front elevation above the Tee bars is excluded. Ie this work was not performed by Ampezzo Pty Ltd)
Ampezzo Pty Ltd shall not take responsibility nor liability for any other work.
Please note that we shall advise the City of Melville, the Builders Registration Board and our Insurance Company regarding this matter. We shall also provide copies of relevant correspondence for their Information.
Attached for your information is a draft copy of the advice will be sending to the appropriate authorities.
We trust this is satisfactory and should you have any queries please do not hesitate to contact the undersigned (Mobile 0418926791)."
26 The defendant's letter to the plaintiff enclosed a copy of a letter from the defendant to the City of Melville dated 7 March 2003 which was in the following terms:
"Please be advised that as from the 20th December 2002 Ampezzo Pty Ltd (Registration No.10882) are no longer the Builder for the works associated with the site at above referenced address (Building Licence and Reference No BA411/2002/DBR issued 26th April 2002).
(Page 7)
- We have been advised by the owner 'Lorenzina Saccone', that she has taken over the remainder of the work, as at 20th December 2002.
We advise that Ampezzo Pty Ltd performed the following work at the site shown on approved Drawings.
Footings
Ground Floor Slab
Suspended Slab
Brickwork – Excluding front elevation above Tee Bars
Attached for you information is a copy of our facsimile to Lorenzina Saccone confirming Ampezzo Pty Ltd's discharge to any claims, liens, responsibility, etc in regards to the subject site.
…"
27 As at 7 March 2003 Lupica had been paid $8,000 of its quoted sum of $13,379.30.
28 On 9 April 2003 the defendant wrote to the plaintiff advising that $9,993.12 was due and owing to it. Attached to the letter was a three page document entitled "Account Inquiry 1/01/02 to 17/12/02". The account inquiry contained details of expenditure in relation to the supply of labour and materials by the defendant.
29 On 9 April 2003 the plaintiff wrote to the City of Melville and advised that as from 20 December 2002 the defendant was no longer responsible for "the structural building of my home".
30 On 14 April 2003 the plaintiff obtained an owner builder's licence.
31 On 17 April 2003 the plaintiff wrote to the defendant requesting copies of all invoices and the return of plans and specifications.
32 On 22 April 2003 the defendant wrote to the plaintiff enclosing copy invoices and plans.
33 On 2 May 2003 the plaintiff wrote to the defendant requesting details of one invoice.
(Page 8)
34 On 2 May 2003 the defendant replied by facsimile to the plaintiff's request. The facsimile included the following:
" … I am happy to reply to any query you have.
However I hope you realize that I can also request copy invoices of all goods and labour that you carried out at the above address (in whatever form payments were made) and that there are actual costs of works which have not been charged."
35 On 7 May 2003 the defendant paid the plaintiff $9,993.12.
36 On 13 February 2004 Mr Mario Carbone, a builder, engineer and employee of CPL, wrote to the plaintiff in relation to the plumbing work. In his letter he noted that prior to CPL commencing any work an inspection of the site was carried out. In the letter he detailed what he described as findings and remedial works carried out in relation to stormwater, drainage, water service and gas service.
37 On 29 June 2004 Mr Carbone sent a facsimile to the plaintiff which included the following:
"……We have assessed the quotation from Lia Nominees Pty Ltd dated 9 April 2002 and believe that this quotation was generally undervalued and to carry out the works as noted would cost considerably more than that allowed.
Also from attendance on site it also appears that approx.only 50% of the works as quoted were carried out prior to our commencement and of these works only approx. 20% to 30% have been carried out satisfactorily.
This has resulted in additional works to investigate and expose works, repair and/or complete the works accordingly…."
38 On 29 July 2004 the plaintiff's solicitor wrote to the defendant and demanded $33,009.90 as the amount "expended plus GST in repairing the works carried out by your sub-contractor". The letter attached a schedule which contained a breakdown of remedial and completion costs totalling $30,809.
39 On 31 July 2004 the defendant wrote to the plaintiff's solicitors denying the allegations of faulty workmanship.
(Page 9)
40 On 22 October 2004 the plaintiff filed a writ of summons claiming $33,889.90 from the defendant.
41 On 4 November 2004 CPL sent a facsimile to the plaintiff which was described as a "Tax Invoice". It referred to costs totalling $30,889.90. The difference between that sum and the $33,009.90 referred to in the letter of 29 July 2004 relates to the inclusion of a claim for unrelated roof plumbing and to GST.
Witnesses
The plaintiff's witnesses
Lorenzina Maria Saccone
42 The plaintiff gave evidence that in 2001 she decided to build a new home on the land and discussed the matter with Mr Sgro. When she first saw him she took sketches with her and there was a general discussion. In about November 2001 she engaged Magic Demolition to clear the land.
43 In early 2002 there were further discussions between the plaintiff and Mr Sgro in relation to construction of a home on the land. It was the plaintiff's evidence that when she went to see him she had all the plans and a book of specifications. At that stage there was a discussion about the defendant's remuneration.
44 The plaintiff gave evidence that the agreement with the defendant was a cost plus contract. The defendant would supervise the job to lock up stage. She and Mr Sgro would obtain quotes from subcontractors. It was her evidence it was agreed that she would pay the defendant 10 per cent of the fee charged by all subcontractors arranged by Mr Sgro. She would not be charged for subcontractors engaged by her. Insurance was arranged and the work then began.
45 The plaintiff gave evidence that she had approved Lupica's quotation dated 9 April 2002 which provided for the supply and installation of three soakwells. In cross-examination she agreed with the proposition that as Lupica's quotation included only three soakwells she should not be entitled to claim for the additional eight soakwells installed by CPL.
46 The plaintiff gave evidence that in January 2003 she telephoned Mr Sgro in relation to the obtaining of quotes for the roof work. In the conversation he demanded she deposit $40,000 into the defendant's account. He said if this did not occur work would cease. The plaintiff gave evidence she told him she would not deposit the money. Mrs Sgro
(Page 10)
- then spoke to the plaintiff and told her that Mr Sgro had lost money on another site and that he was stressed.
47 It was the plaintiff's evidence that in March 2003 Mr Sgro telephoned her and asked whether she wished to continue with the contract. The plaintiff's evidence was that she said she did not have a problem but would not pay the $40,000 he had asked for. The plaintiff's evidence was that Mr Sgro said she would need to write to the local authority and advise it that the defendant was not doing the work. She gave evidence that she told Mr Sgro that he should write the letter.
48 It was the plaintiff's evidence that the only subcontractors she engaged prior to March 2003 were Avanti Glass, Metro Lintels and Mr Phil Bertolini.
49 It was the plaintiff's evidence that Mr Sgro continued to attend on site after 20 December 2002.
50 The plaintiff gave evidence that she did not see any of the plumbing work which had been done by Lupica. It was her evidence that she obtained her owner builder’s licence and then engaged CPL.
51 The plaintiff gave evidence that the problem with the plumbing was cracks and holes in pipes, wastes of different sizes and gas pipes which were not deep enough.
52 The plaintiff gave evidence that up until March 2003 she had no complaint about the quality of the defendant's work. She agreed that Mr Sgro's supervision from what she could see was exemplary and there was no reason to criticise his performance under the agreement.
53 The plaintiff was asked about the stage the work had reached as at March 2003. She denied that a considerable proportion of the rendering work had been done.
54 The plaintiff gave evidence that a considerable proportion of the electrical work had been done as at March 2003.
55 The plaintiff denied in her evidence that she had discharged the defendant as builder or that she had given instructions to subcontractors apart from Avanti Glass, Metro Lintels and Mr Bertolini.
56 The plaintiff gave evidence that she paid CPL by instalments to complete and rectify Lupica's work.
(Page 11)
57 The plaintiff gave evidence she did not give the defendant an opportunity to inspect the alleged defective work because of the breakdown in their relationship.
Donati Colesanti
58 Mr Colesanti is a director of Nikolyn Pty Ltd which trades as CPL. He has been a registered plumber for 26 years. He gave evidence as to the quality of the work done by Lupica and the cost of remedial and completion work carried out by CPL.
59 Mr Colesanti gave evidence that in about mid June 2003 he was asked by the plaintiff to attend the construction site. It was his evidence that there were problems with the work done by Lupica.
60 Mr Colesanti gave evidence he inspected the premises and that Mr Carbone's letter of 13 February 2004 and facsimile of 29 June 2004 were written on his instructions.
61 Mr Colesanti gave evidence that only 20 to 30 per cent of the gas service had been completed by Lupica. It was Mr Colesanti's opinion that the drainage work and stormwater pipe work done by Lupica was unsatisfactory. He gave evidence that an inspection revealed broken pipes.
62 Mr Colesanti described by reference to a number of photographs (Exhibit 2) his view as to the quality of the work done by Lupica. It was his evidence that the gas installation by Lupica was "grossly incorrect". It was his opinion that the gas pipes were undersize and had been installed to a depth of 300 millimetres rather than at the usual minimum depth of 450 millimetres.
63 It was his view that the gas installation would have resulted in appliances being starved of gas. This was because the diameter of the riser pipe was greater than that of the supply pipe.
64 Mr Colesanti's evidence was that pipes leading from internal downpipes down one side of the home had not been connected to the stormwater disposal. Mr Colesanti was asked about the repair and completion costs referred to in the invoice dated 4 November 2004.
65 Mr Colesanti gave evidence that CPL's document entitled "Tax Invoice" dated 4 November 2004 detailed money spent in repairing or completing Lupica's plumbing work. It was his evidence that the invoice was a break-up of where money had been allocated.
(Page 12)
66 It was the evidence of Mr Colesanti that CPL did the remedial and completion work on an hourly basis. This was because of the uncertainty as to the extent of the work required. Progress payments requests were sent to and paid for by the plaintiff.
67 Mr Colesanti gave evidence concerning items on the invoice. A table of some of the items appears in par 132.
68 It was his evidence the sum of $1,885 was for gas pipe work that was not deep enough and had to be changed from PVC to copper.
69 $2,213 was for gas completion work and included the connection to units that were going to use gas. It was his evidence that:
"Okay, like I stated before, they had left the gas main short of the meter box. They left the gas main short of the hot-water systems. They didn't have any of the gas pipework in the walls and then obviously the other completion, connecting out the gas appliances, things that Mr Lupica needed to do or would have had to be paid to do."
70 In relation to the sum of $1,723 for repair work for stormwater tanks it was Mr Colesanti's evidence that:
"Obviously they had to do some work to the tanks that had already been installed."
71 When asked about the charge he said he would need to look into it.
72 He gave evidence that the $4,156 described as completion of stormwater tanks was for eight tanks at $500 each.
73 The sum of $1,037 included the cost of broken drains, pipes that were broken and adding on t-pieces or junctions. When pressed about the precise work done Mr Colesanti said he needed to bring his whole file.
74 Mr Colesanti gave evidence that the sum of $2,095 was " --- Obviously drains that weren't connected ... ". He said he could not exactly describe the work done.
75 It was Mr Colesanti's evidence that the sum of $1,100 described as repairs to the stormwater main related to broken and crushed pipes.
76 The sum of $1,534 related to installation of stormwater that had not been run to specific places.
(Page 13)
77 CPL's invoice dated 4 November 2004 included claims for the completion of what was described as Sani 1 and Sani 2 and repairs in relation to Sani 1. Mr Colesanti gave evidence that Sani 1 related to work performed in the bathroom and in relation to the toilets. Sani 2 related to work done after tiling was completed in those areas. He gave evidence that the repair cost of $785 related to location of pipework. He gave evidence the completion cost related to the final connection.
78 It was his evidence that a builder would be required to supervise and inspect plumbing on site.
79 Mr Colesanti gave evidence that CPL did not install a spoon drain which was referred to in the breakdown dated 4 November 2004. He said it had been charged for but that it did not relate to the plumbing. It was his evidence that an associate company of CPL had done the work. He was unable to identify the entity which did the work and when pressed said he "would look into it".
The defendant's witnesses
Umberto Sgro
80 Mr Sgro is a director of the defendant.
81 It was his evidence that it was agreed the defendant would supervise the construction of the home on a cost plus 10 per cent basis. Preliminary drawings only were available when the agreement was entered into.
82 It was Mr Sgro's evidence that the agreement was probably entered into in 2001. He said he could not remember exactly when it was. He gave evidence that a written lump sum agreement dated 8 April 2002 was executed to enable the plaintiff to borrow money. However it was not the basis of the agreement between the parties.
83 It was his evidence that the selection of subcontractors was to be a joint decision of the plaintiff and himself. However, the ultimate choice of subcontractors was a matter for him. He agreed that in relation to Avanti Glass the plaintiff had selected Avanti Glass as the proprietors were her friends.
84 Mr Sgro obtained two quotes from Lupica. The second described as a revised quote was accepted.
(Page 14)
85 It was his evidence that he supervised Lupica's plumbing work. He would attend site twice a day. He gave evidence that he ensured that the work was done properly.
86 It was Mr Sgro's evidence that no pipes were damaged when he was on site. The pipes were on his evidence connected to the stormwater tanks. The pipes in the trenches were all straight. The sewerage lines were all completed in a proper manner. The gas pipes were on his evidence laid to a sufficient depth.
87 It was Mr Sgro's evidence that all pipe work was laid in a proper and workmanlike manner.
88 It was Mr Sgro's evidence that problems in the construction arose when the plaintiff began to engage subcontractors.
89 In December 2002 he spoke to the plaintiff concerning subcontractors. It was his evidence that the plaintiff was going to get back to the Sgros as to whether the contract was to proceed. In cross examination he agreed that in the conversation he had asked the plaintiff for $40,000. It was Mr Sgro's evidence that when the plaintiff did not get back to him and after waiting for a couple of weeks Mrs Sgro had written a letter to the plaintiff. Mr Sgro identified the letter as being dated 7 March 2003.
90 It was Mr Sgro's evidence that he was supervising the site until March 2003.
91 It was Mr Sgro's evidence that between November 2002 and March 2003 brickwork, roof work and some plastering was being done. He continued to attend site about once every second day during that time.
92 It was Mr Sgro's evidence that there was no complaint about the plumbing work until demand from the plaintiff's solicitors.
93 It was Mr Sgro's evidence that the plan he provided to Lupica dated November 2001 did not make provision for soakwells.
94 There was a plan dated 28 March 2002 which identified 11 soakwells.
95 It was Mr Sgro's evidence that the provision of three soakwells was adequate.
96 Mr Sgro could not remember a telephone call with the plaintiff in March 2003.
(Page 15)
97 It was Mr Sgro's evidence that Mr Barry Saxon, a registered builder, actively supervised the construction.
98 Mr Sgro gave evidence that the percentage of work completed by each contractor by the end of March 2003 was:
Avanti Glass: 70 – 75 per cent
Metro Lintels: 90 per cent
All Fix Stop: 90 per cent
Rendering: 50 per cent
Texture Coating: 50 per cent
Neerabup Electrical: 70 per cent
Demolition 100 per cent
99 Invoices were produced through Mr Sgro from Avanti Glass dated 25 October 2002, 30 May 2003 and, 31 July 2003.
100 Mr Sgro agreed in cross examination that when the defendant ceased acting as builder less than one half of the windows had been done by Avanti Glass.
101 Mr Sgro gave evidence that on 23 January 2003 All Fix Stop provided a quotation for work. On 12 November 2003 an invoice for work done was provided.
102 It was Mr Sgro's evidence that Mr Bertolini was paid cash. There was no documentation concerning payment to Mr Bertolini.
103 It was Mr Sgro's evidence that World of Plaster Pty Ltd did work on site in February 2003.
104 Mr Sgro gave evidence in cross-examination that he was not on site when demolition took place.
Carmello Lionti
105 Mr Lionti is a licensed electrician with 24 years experience.
106 He gave evidence that he did the electrical work in relation to the construction from about 2002 until the end of 2003 or 2004. In about the middle of 2003 a crane was brought onto site. At that stage Mr Lionti noticed that there was an excavation in the garage and there were some crushed pipes in that vicinity.
(Page 16)
107 He gave evidence that he saw the ground excavated towards the rear of the land. He said in evidence that he had seen crushed and broken white PVC pipes.
Sebastiano Lupica
108 Mr Lupica is a director of Lia Nominees Pty Ltd which trades as Lupica. He is a licensed plumber and has been in business for in excess of 30 years.
109 Mr Lupica gave evidence that the defendant provided him with a set of plans dated 13 February 2002. The plans did not contain any provision for stormwater.
110 Lupica provided two quotes in respect of plumbing work for the construction. The first made no provision for stormwater. He was then asked to quote for additional items including stormwater services. He prepared a revised quote dated 9 April 2002 which included installation of three soakwells. The revised quote was accepted and the work proceeded.
111 Mr Lupica gave evidence as to the required installation depths for different services. He said that for sewerage it was 300 millimetres, for water it was 250 millimetres and for gas it was 450 millimetres. He accepted that the gas pipes were installed at a depth of less than 450 millimetres.
112 Mr Lupica gave evidence that he would supervise work on site. He gave evidence that when he was on site he did not see any broken stormwater or water pipes. The water service had in his opinion been installed by Lupica in accordance with water authority regulations.
113 Mr Lupica gave evidence that there was an area of pipework which could not be completed because there was no groundwork in place.
114 It was Mr Lupica's evidence that the cost to complete the gas installation was between $400 and $500.
115 It was his evidence that when Lupica left site the sewerage was completely connected, the stormwater installation was not complete and the gas installation was complete other than connection to the gas box and the final connections. The groundwork was in his opinion 90 per cent complete.
(Page 17)
116 It was Mr Lupica's evidence that pipework was often broken on site. He identified a variety of ways this could occur including the conduct of other workers.
Giovanna Sgro
117 Mrs Sgro is a director of the defendant.
118 It was Mrs Sgro's evidence that there were discussions with the plaintiff which resulted in a cost plus 10 per cent agreement.
119 Mrs Sgro gave evidence she told the plaintiff that the way the defendant operated was to require a deposit. She said that there was no discussion about details because "that's what it is".
120 She gave evidence the defendant was to supervise the construction to lock up stage. She described in evidence that the defendant had an option. The plaintiff could obtain quotes and Mr Sgro would obtain quotes and they would then come to a decision together but with Mr Sgro's approval. As I understand this evidence Mr Sgro was to make the ultimate decision in relation to selection of subcontractors.
121 Mrs Sgro gave evidence that in relation to the concrete subcontractor the plaintiff had wanted a particular person who Mr Sgro did not want to engage. Ultimately Mr Sgro's contractor was selected.
122 It was Mrs Sgro's evidence that at the plaintiff's request the defendant executed a lump sum contract. It was her evidence that the plaintiff told her the contract was required for the bank.
123 Mrs Sgro gave evidence that an accounting programme was maintained by her on behalf of the defendant. This involved entering details of materials and labour and amounts paid by the defendant on account of the plaintiff. The programme recorded items paid for by the defendant but not items paid for by the plaintiff.
124 Mrs Sgro gave evidence that before Christmas 2003 the plaintiff had rendered an invoice to the defendant for $41,627.51. It was Mrs Sgro's evidence that at that time the defendant needed money to pay bricklayers.
125 Mrs Sgro gave evidence that there was a discussion with the plaintiff as the defendant needed more money in circumstances where the roof was to be done and additional contractors engaged. She gave evidence that Mr Sgro said to the plaintiff that because the defendant had already spent money it could not continue with the job.
(Page 18)
126 It was Mrs Sgro's evidence that the plaintiff was going to let her know as to whether she wanted the defendant to continue. It was her evidence the plaintiff subsequently rang and told her that she wanted to go on as things were and did not want to discuss anything that had happened.
127 Mrs Sgro gave evidence that on 20 January 2003 the plaintiff deposited $20,000 into the defendant's bank account without the defendant's knowledge.
128 It was Mrs Sgro's evidence that thereafter work was being done on site but by subcontractors arranged by the plaintiff. She gave evidence that she had other matters of concern at the time. I am not satisfied as to the accuracy or the reliability of her recollection.
129 She gave evidence she was not present when there was a telephone conversation between the plaintiff and Mr Sgro on 4 March 2003.
130 It was Mrs Sgro's evidence that she pushed to terminate the agreement because the plaintiff was arranging her own contractors. She gave evidence that the invoice dated 11 April 2003 for $9,993.12 was prepared by her son and contained errors. It was her evidence she did not do anything about charging the plaintiff any extra commission because she had a sick father and the defendant let it go so as not to cause any problems.
131 It was her evidence that it was the defendant's intention by its letter to the City of Melville dated 4 March 2003 to limit its responsibility for work done to the 20 December 2002.
The plumbing work
132 The quantum sought to be recovered by the plaintiff for remedial and incomplete work was $19,283.80 which was particularised in closing submissions as follows:
(Page 19)
Item | Repair ($) | Completion ($) |
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*Difference between Lupica's quote of $13,379.30 and $9,701.70 paid by the plaintiff.
133 The relationship between the parties began to deteriorate in December 2002.
134 The evidence of the plaintiff and the Sgros was generally vague and unsatisfactory as to what occurred between December 2002 and March 2003. However, I am satisfied on all of the evidence that both parties regarded the contract as on foot from December 2002 until March 2003.
135 The evidence of Mrs Sgro which I accept was that the plaintiff told her that she wanted the defendant to continue with the contract. In January 2003 the plaintiff paid $20,000 to the defendant.
136 Between December 2002 and March 2003 the plaintiff continued to supervise to some extent work being done in relation to the home. I accept the evidence of Mr Sgro in this regard.
137 On 6 March 2003 the defendant wrote to the City of Melville making it clear it was not responsible for the construction after 20 December 2002. However what the defendant wrote three months later does not affect what was occurring on site. The letter was clearly written by the defendant in an endeavour to limit its responsibility.
(Page 20)
138 The defendant remained on site until March 2003.
139 Between December 2002 and March 2003 the plaintiff became involved in the construction. However I am not satisfied that the plaintiff breached the agreement by instructing the defendant's subcontractors regarding the building works. I prefer the plaintiff's evidence in this regard to that of the Sgro's.
140 I do not accept that in December 2002 the defendant breached the contract by failing to complete the work or remedy any defective work. The evidence establishes that the first time the defendant became aware of any complaint concerning the workmanship was when the plaintiff's solicitors wrote on 29 July 2004.
141 There had been no request by the plaintiff to the defendant to complete the work or remedy any defective work. There was no response by the plaintiff to the defendant’s letter of 7 March 2003. There was no repudiation by the defendant.
142 I am not prepared to accept that the plaintiff repudiated the agreement as alleged by the defendant. Mr Sgro did not give evidence as to the conversation of 4 March 2003 during which the plaintiff's alleged repudiatory conduct took place.
143 I am satisfied there was a conversation in March 2003 as outlined by the plaintiff. The defendant refers to the conversation in its letter of 6 March 2003. Each party thereafter regarded itself as discharged from the requirement for further performance.
144 In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 each party to a contract sought to rescind it on the ground of the repudiation of the other, in circumstances where neither was entitled to do so. In a joint judgment Stephen, Mason and Jacobs JJ said (at 434):
"26. Thus the contract in the present case was still on foot on and after 25th July 1974. Neither party had effectively rescinded. But there can be no doubt that by 5th December 1974, when these proceedings were commenced, neither party, whatever may have been their reasons, regarded the contract as being still on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract."
(Page 21)
145 Following the defendant's facsimile to the plaintiff of 7 March 2003 the defendant submitted a final invoice which was paid and the defendant took steps to obtain her own licence.
146 The plaintiff and the defendant regarded the contract as discharged by about the middle of March 2003. Neither party had effectively terminated the contract for breach; regarded the contract as still on foot or intended that it should be further performed. The consequence of the finding is that the plaintiff's claim is limited to the remedial cost of any defective work.
147 The evidence adduced in the plaintiff's case as to the work done by Lupica was unsatisfactory.
148 I am not satisfied that the plaintiff is entitled to recover from the defendant the alleged cost of completion of $14,344 from the plaintiff.
149 Whilst Mr Colesanti gave evidence that he was involved in the work done by CPL he did not prepare the letter dated 13 February 2004. Mr Carbone, the writer of the letter, was not called as a witness. The distinct impression I formed of Mr Colesanti's evidence was that he did not have a reliable and precise recollection of the work done on site either by Lupica or CPL. He said on a number of occasions he would get information and get his file.
150 I was not at all impressed in relation to his evidence concerning the spoon drain. He gave evidence-in-chief that the work particularised in the invoice of 4 November 2004 had been done by CPL. In cross-examination he said that an associated company was involved in carrying out the work on the spoon drain. This evidence was unsatisfactory and reflected adversely upon the reliability of his evidence generally and the accuracy of his recollection.
151 It was Mr Colesanti's evidence that progress accounts were rendered. No progress accounts were produced in evidence by the plaintiff.
152 The evidence of Mr Colesanti was vague and unconvincing. Whilst both he and Mr Lupica had many years experience I preferred the evidence and opinions of Mr Lupica. He had been on site when the work was done. I formed a favourable impression of his evidence. He was prepared to make a concession concerning the gas installation and in my view was doing his best to accurately recall the events. In contrast Mr Colesanti did not appear to have a clear recollection of the work done.
(Page 22)
- His recollection of the precise remedial and completion work required was unsatisfactory.
153 The plaintiff submitted that CPL's invoice of 4 November 2004 should be considered on the basis that it represented the cost to complete and rectify Lupica's work. I am not prepared given the view I have formed of Mr Colesanti's evidence to approach the assessment of the cost of remedial and incomplete work on that basis.
The gas service
154 I accept that some remedial work was required in relation to the gas service. In his letter of 13 February 2004 Mr Carbone noted that the gas service pipes needed to be lowered as they did not conform to Alinta gas requirements. It was the evidence of Mr Lupica that the service had not been installed at the required depth of 450 millimetres. From the photographs tendered it is apparent the gas service was close to ground level. I am satisfied the gas service was installed at a depth of less than 450 millimetres and in doing so Lupica did not carry out the work in a proper and workmanlike manner. Remedial work was required. I am satisfied that reasonable supervision by the defendant would have ensured that the gas service pipes were installed at the appropriate depth. This did not occur and the plaintiff is entitled to the reasonable cost of rectification.
155 Mr Cabone's letter of 13 February 2004 refers to two further problems with the gas service. First that it finished approximately 6 metres from the meter box. Second the requirement to remove a 40 millimetre gas riser in the proposed location of the pool filter. I accept that the gas service installed by Lupica terminated 6 metres from the meter box. The connection to the meter box was part of the completion work which Lupica would have done if it had completed its work. There is no basis for this claim.
156 The plaintiff decided that the 40 millimetre gas riser was not required. There is no basis for the claims in respect of the gas riser or the connection to the meter box.
157 Mr Carbone in his letter of 13 February 2004 noted that the "gas service being only 20 millimetres was not considered large enough for the number of gas fittings to be installed and a 40 millimetre line was installed to the first hot water unit". Mr Colesanti's evidence was that Lupica's installation utilised 25 millimetre gas pipes.
(Page 23)
158 The claim for repairs to the gas service is for $1,885. This evidence was not the subject of significant challenge as to quantum. I am prepared to accept that sum as reasonable.
159 Whilst I have found that the plaintiff does not have an entitlement to the cost to complete, I would prefer Mr Lupica's evidence to that of Mr Colesanti and find that the reasonable cost to complete the gas work was between $400 and $500.
Stormwater tanks and mains
160 The plaintiff claims $5,879 in relation to repair and installation of stormwater tanks. Lupica's revised quotation was based upon a plan which did not contain any detail as to soakwells. Lupica installed three soakwells. The revised plan dated 28 March 2002 made provision for 11 soakwells.
161 The work required for an additional eight soakwells would have been an extra cost to the plaintiff in any event. I am not satisfied in the circumstances that there was any requirement for the defendant to arrange for installation of 11 soakwells.
162 There is no basis for the claim.
163 I am not satisfied that the plaintiff is responsible for any of the alleged defects in the drainage and sewerage pipes. Mr Carbone in his letter dated 13 February 2004 noted that a check of sewer lines revealed a number of broken pipes. Photographs of broken pipes were produced in evidence. I am satisfied that when CPL inspected the plumbing there were some broken pipes. However I am not satisfied that the pipes were damaged by Lupica or that they were damaged at a time when the defendant was in control of the construction or that reasonable supervision by Lupica would have prevented the damage.
164 Mr Lionti's evidence which was unchallenged was that there had been earthwork carried out on site. He saw a crane on site in the middle of 2003. At that time he noticed excavation in the garage. Mr Lupica's evidence was that he did not see broken pipes when he was on site. I accept his evidence in that regard.
165 It seems improbable that Lupica's employees would have filled in trenches which contained broken or damaged pipework.
166 The plaintiff also claimed for additional pipework and for pipework to be repaired and altered to suit the revised layout of the stormwater.
(Page 24)
- There was no detailed particularisation of the claim. I am not satisfied there is any basis for this claim.
Water service
167 Mr Carbone's letter of 13 February 2004 referred to a request to lower the water service to conform to Water Authority regulations. Mr Lupica gave evidence that the pipes were at the correct depth. I accept his evidence. The claim is disallowed.
168 Mr Carbone's letter referred to one crushed pipe requiring repair. Again I rely upon and prefer the evidence of Mr Lupica and Mr Lionte. I am not satisfied that the pipe was crushed in circumstances in which the defendant was responsible.
Sani 1 and Sani 2
169 There was very little evidence concerning these items of claim. Save for $785 the claims were for completion and are disallowed. Mr Colesanti's evidence as to the repair cost was not challenged and I would allow $785.
The counterclaim
170 The defendant's counterclaim is for $11,317.90 particularised as:
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(Page 25)
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171 The claim is limited to contractors who had worked on site up until 7 March 2003.
172 I prefer the evidence of the plaintiff to that of Mr and Mrs Sgro in relation to what was agreed as to the defendant's remuneration. The plaintiff gave her evidence in a straight forward manner and I consider she was generally accurate and reliable.
173 The plaintiff and the Sgro's were in a close relationship when the terms of the agreement were being negotiated. In my view it is probable that the Sgro's would have been prepared to adopt a generous approach to the negotiations.
174 At the time of the negotiations the parties contemplated that the plaintiff would arrange some subcontractors. This was not a case where the plaintiff was intending or was it contemplated that she was to arrange and engage a number of subcontractors. That was the evidence of the plaintiff and the Sgros. The primary responsibility was always to be with Mr Sgro and he was to have the final say as to selection of subcontractors.
175 The plaintiff requested a final account from the defendant. This was provided and she made payment of the amount claimed as soon the detail was provided. The defendant did not seek to recover any further sum from the plaintiff until after action was commenced.
176 Mr Sgro in his evidence was unconvincing. He said on a number of occasions that the plaintiff should pay the commission because he was responsible for the subcontractors on site. Whilst this has some persuasive force, having considered all the evidence and having had the opportunity to observe the witnesses and in the circumstances of the then existing relationship between the parties I prefer and accept the plaintiff's evidence as to the terms of the agreement.
(Page 26)
177 Mr Sgro's evidence as to the stage the work of the subcontractors had reached as at 7 March 2003 as I have said was vague and imprecise. I am not prepared to rely upon it. The subcontractors who did the work did not give evidence.
178 I now consider each item of the counterclaim.
Avanti Glass, Metro Lintels and Magic Demolition
179 The defendant has pleaded that the plaintiff would be responsible for the demolition of the existing home on the land and preparation of the land for construction. The demolition work occurred in November 2001 before the parties had entered into the agreement.
180 I accept that Avanti Glass, Metro Lintels and Magic Demolition were subcontractors arranged by the plaintiff. Given my finding as to the circumstances in which the defendant became entitled to commission, the claims are not made out.
All Fix Stop
181 All Fix Stop is a subcontractor arranged by the defendant. Mr Sgro's evidence was that 90 per cent of this subcontractor's work had been completed as at the date of termination.
182 On 23 January 2003 All Fix Stop gave a quote to the defendant for $31,900 and on 12 November 2003 rendered its invoice. This was for $27,000. No other invoice was produced.
183 The documentary evidence does not support the claim.
184 I am not satisfied that work was done prior to the date of termination by All Fix Stop.
185 I am not satisfied the claim is made out.
Phil Bertolini
186 The defendant also claimed that it was entitled to a commission in relation to work done by Mr Bertolini in the erection of roof steel.
187 The plaintiff's evidence which I accept was that the subcontractor was not paid. Mr Bertolini was arranged by the plaintiff.
188 I am not satisfied the claim is made out.
(Page 27)
- Colombo and Christides / Rendering
189 Mr Sgro's evidence was that 90 per cent of this subcontractor's work had been completed as at the date of termination.
190 Eurotext Texture Coating is a subcontractor which supplied texture coating. The evidence of Mr Sgro was that 50 per cent of the work had been completed as at the termination date. Mr Sgro's evidence as to the stage the work of each of these subcontractors had reached at termination was vague and lacked detail. The invoices produced from the contractors did not support the claims made.
191 World of Plaster Pty Ltd delivered invoice 4676 dated 24 February 2003 in the sum of $4,616 and invoice 4852 dated 20 March 2003 in the sum of $330. There are also invoices produced which post date the termination.
192 The plaintiff's evidence was that very little of the inside and outside rendering work had been done by March 2003. I accept that evidence. This accords with the documents.
193 I am satisfied that the defendant is entitled to commission on the two pre termination invoices totalling $4,946. The entitlement is $494.60.
Neerabup Electrical Service
194 The evidence of Mr Sgro was that at the date of termination 70 per cent of the work of the subcontractor Neerabup Electrical was complete. The plaintiff’s evidence was that electrical work had been done as at March 2003.
195 I accept based upon the plaintiff’s evidence that some work had been done.
196 I would allow the claim as pleaded in the sum of $462.
Lupica Plumbing Service
197 This claim in relation to Lupica was for a commission on its invoice dated 14 April 2003 for $1,701.70. The invoice was in relatively close proximity to the date of termination. It was Mr Lupica's evidence that no further work was done on site after the defendant left site. In the circumstances I accept that the $1,701.70 invoice from Lupica did relate to work done before the date of termination. However, I am not satisfied given the problems which arose in relation to the work done that there was proper supervision of the work done.
(Page 28)
198 I am not satisfied the claim is made out.
Conclusions
199 The plaintiff should have judgment on her claim for $2,937 (inclusive of GST).
200 The defendant should have judgment on its counterclaim for $956.60.
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