Scott Building Pty Ltd v Minogue & Coal Basin Equipment Pty Ltd
[2010] QCAT 420
•31 August 2010
| CITATION: | Scott Building Pty Ltd v Minogue & Coal Basin Equipment Pty Ltd [2010] QCAT 420 |
| PARTIES: | Applicant : Scott Building Pty Ltd |
| v | |
| Respondent/s: Mark Minogue and Coal Basin Equipment Pty Ltd |
| APPLICATION NUMBER: | BN080-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 5 August 2010 |
| HEARD AT: | Mackay |
| DECISION OF: | Ms R M Clifford |
| DELIVERED ON: | 31 August 2010 |
ORDERS MADE: | 1. That Coal Basin Equipment Pty Ltd pay Scott Building Pty Ltd the sum of $14,959.00 within 30 days of the date of this Order. 2. That there be no Order as to costs. |
| CATCHWORDS : | Building dispute – minor commercial - arrangements for scope of work – quotes – trade-off- goodwill - quality of work – opportunity to rectify - rectification costs |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Self represented |
| RESPONDENT: | Self represented |
REASONS FOR DECISION
Background
Scott Building Pty Ltd is a building company (Scott Building). Mr Barry Scott is a Director of the company and the licensed nominee.
Mr Mark Minogue is a Director of Coal Basin Equipment Pty Ltd (Coal Basin). Mr Minogue carries on the Coal Basin business at a property situated on the corner of Sugarshed and Glenella Roads, Mackay. Coal Basin is the property owner. The property includes an industrial shed with an amenities block and a demountable office block.
In February 2008 the amenities block suffered damage as a result of flood inundation and the office block suffered storm damage. Following this event Mr Minogue made an insurance claim for the damage through Coal Basin’s insurer. Mr Minogue then invited Scott Building to provide a quote to repair and rectify the damage.
On17 June 2008 Scott Building provided a quote. The quote description was for re-instatement of water damage to toilet and amenities block and office block due to inundation of contaminated flood waters on 15 February 2008. The quote outlined in short basic terms the scope of work relating to three areas which included the Amenities block; Office block and Preliminaries including builder’s margin. The quotation price totalled $21,480.00. There was no breakdown of the total costs attributable to the three areas noted above.
Around February 2009, following acceptance of a claim by Coal Basin’s insurer, Mr Minogue contacted Mr Scott and asked that the work commence as per the quote of 17 June 2008.
Work commenced around mid March 2009. The basic work was undertaken by Scott Building apprentice Mr Daniel Minogue,, son of Mr Mark Minogue, and a work experience assistant both under the supervision of Mr Scott. Painting and plastering were undertaken by sub-contactors on behalf of Scott Building.
Very shortly after the commencement of work there was discussion between Mr Scott and Mr Minogue as to the necessity of some of the work particularly the need for sanitising the framework in the Amenities block because a year had passed since the flood inundation and there was no evidence of mould or contamination. It appears some other work arrangements were then made to trade-off/off-set this and some other issues which will be discussed further in these reasons.
Mr Scott states that after the work was undertaken he approached Mr Minogue for payment on 8 May 2009. Mr Scott states Mr Minogue expressed dissatisfaction with the work. Mr Scott claims he offered to rectify the issues identified but Mr Minogue refused the offer. Mr Minogue was about to go to Cairns and advised he would discuss the matters on his return.
On 27 May 2009 Mr Minogue contacted Mr Scott and advised him he did not want Scott Building to return to rectify or complete the job. Mr Minogue requested Scott Building send him an invoice. On 7 July 2009 an invoice for the quote price of $21,480.00 was sent.
10. On 9 July 2009 Coal Basin replied requesting Scott Building adjust the invoice to reflect the true value of the work.
11. On 30 July 2009 Scott Building confirmed the amount owing and offered to return to the site and undertake certain work. There was no reply by Coal Basin.
12. On 17 September 2009 Scott Building lodged an application with QCAT for money owing.
13. On 14 October 2009 Coal Basin filed a defence denying it was indebted to Scott Building for the money claimed or at all.
14. Immediately prior to commencing the hearing I offered the parties another opportunity to resolve the matter. The opportunity was not taken up.
Legislation
15. The application relates to a building dispute pursuant the Queensland Building Services Act 1991 and is characterised as a minor commercial dispute pursuant to Schedule 2 of that Act. The Tribunal’s work is outlined at s.75 of the Act. There were no contentions or submissions from either party relating the Tribunal’s jurisdiction or the matter.
Issues
16. What constituted the arrangement for work to be performed? Did the quote constitute the entire arrangement or were other arrangements agreed upon to represent the total quotation cost?
17. Was the quality of the work performed in a tradesman like manner? If not did the respondent clearly identify the unsatisfactory work and give the builder sufficient opportunity to complete and or rectify?
18. What are the costs for completion and or rectification?
Evidence/submissions
19. Each party relied on the statements and materials it had filed in the Tribunal along with their own and witness oral testimony at hearing.
Scope of works
20. Neither party disputed the quote of 17 June 2009 was accepted. Work in fact commenced on the basis of the quote. At the hearing both parties agreed that shortly after commencement of the work further arrangements were made which broadened the scope of the work. These arrangements were made orally between Mr Scott and Mr Minogue and were not committed to writing. The further arrangements included trade-offs/off-sets for work in the quote not being performed and for the supply of some materials by Coal Basin. Unfortunately each party had a different understanding of what extra work represented what trade-off/off-sets or vice versa, however, it appears the parties were operating on the understanding that quote cost represented the total cost of the work.
21. Both parties agreed that Coal Basin provided materials that were used in the Amenities block work and the materials included various amounts of villaboard, door jambs and architraves. Both parties agreed that Scott Building did not undertake sanitation of the Amenities block framework as identified in the quote. Scott Building described the sanitising work as involving removal of all wall panels, applying bleach to the framework and reinstalling the panels. Scott Building claim as a trade-off/off-set it agreed to undertake work that was not in the quote which included installing ceiling panels in the Amenities block, installing a wall between the Amenities block and Office block and providing a rear door frame. Scott Building state that the installation of ceiling panels, where none previously existed, was extensive work and involved installing batons, installing water resistant plasterboard and cornices, plastering and painting for which it employed sub-contactors.
22. Coal Basin claims that as part of the trade- off/off-set for the materials and non santising work Scott Building also agreed to undertake water-proofing and tiling in the Amenities block. Mr Scott agreed he would undertake tiling of the Amenities block but denies this formed part of the trade-off/off-set, rather, Mr Scott claims this represented a goodwill gesture towards Mr Minogue as he employed Mr Minogue’s son as his apprentice. Mr Scott says he undertook the wet-sealing of the Amenities block floor in preparation of tiling.
23. It is clear from the above the parties do not agree what defined the scope of works. On balance I am satisfied that the materials supplied by Coal Basin and the omission of the sanitising work was amply offset by Scott Building installing ceiling panels in the Amenities block and installing a wall between the Amenities block and Office block and providing a rear door frame. This work involved the employment of two sub-contactors. In my view this represents increased skill and labour compared to that required by the work omitted which could have been undertaken by an apprentice. Although Mr Minogue thought wet-sealing and tiling of the Amenities block also formed part of the trade-off I am not convinced that it represented a trade-off/off-set. I note that there is no documentation outlining any of the trade-off arrangements and only each party’s representations and recollections to evidence the scope of work represented by the quote cost. I can understand and accept Mr Scott’s claim that he offered to undertake some extra work as a good will gesture as he employed Mr Minogue’s son and although I am satisfied that the water-proofing and tiling work may have represented a good will gesture it still formed part of the scope of works expected to be undertaken, however, it did not form part of any trade-off/off-set and thus was not represented in the cost of the quote which remained unchanged.
Quality of work
24. It is not exactly clear when the quality of work was first raised between the parties. Scott Building state that it only became aware that Mr Minogue was not satisfied with the quality of work after it was essentially completed and when Mr Scott approached Mr Minogue for payment on 8 May 2009. Mr Minogue claims he raised issues early but particularly on 11 May 2009, a day he was leaving for Cairns. Nonetheless, an exact date is not essential to the dispute as it is clear that there were discussions concerning the quality of work on and around the end of the first week of May 2009 and again in late May 2009. Neither party disputes that conversations either face to face or by telephone were heated.
25. Mr Scott claims that Mr Minogue raised relatively minor issues that required rectifying and that he offered to undertake the work. Mr Scott claims Mr Minogue reacted in a huff in a face to face meeting and hung up on a telephone conversation a few days later. Mr Minogue claims he told Mr Scott not to undertake any further work until he returned from Cairns. However, Mr Scott confirms he did remove some sheet panelling in Mr Minogue’s absence and ordered replacement sheets.
26. Prior to Scott Building lodging its application with QCAT in September 2009 it would appear that the only documentation that identified any defective work was that referred to in Mr Scott’s letter to Mr Minogue dated 30 July 2009. That letter noted door locks had not been fitted and that white strips instead of grey strips had been installed between the wall sheeting in the Office block. Although there was reference to the ceiling installation in the Amenities block there was no description or detail concerning any defect in the work only a reference that it was installed at no cost. Coal Basin’s letter to Scott Building dated 9 July 2009, in which the above letter was in response, noted the job was left in a far from completed state and that the works that have been carried out fell short of what was allowed in the original estimate.
27. Documentation subsequently filed in the Tribunal does not particularly assist. As the scope of works was not fully documented the parties claims and responses have been at odds and at cross-purpose in regard to the completion and the quality of work. This confusion stems from the fact that the 17 June 2008 quote represented the cost of the works but did not fully represent the scope of works agreed to either through trade-offs/off-sets or good will gesture. Given my earlier conclusions, in regards to scope of works, it is apparent that work outside the quote should be considered in assessing the quality of work and the non-sanitisation of the Amenities block framework should be excluded.
28. Because of the lack of clarity around the scope of works it is difficult to clearly outline what Coal Basin considered fully constituted the incomplete or defective work or what Scott Building accepted as incomplete or defective work. Scott Building and Coal Basin however filed photographs of the work site with the Tribunal for reference to various quotations they each obtained for particular work. It is clear that at the time the photographs were taken, and the parties do not particularly dispute this, that various wall and ceiling panels/sheets were missing, tiling had not been undertaken, vanity basin waste outlet was not accommodated for in the surrounding wall sheeting, gaps where evident where the ceiling and wall sheeting were to meet, plastic strips were not aligned and there was some patching of wall sheets.
Costs to complete or rectify
29. In regards to the quotations obtained unfortunately they also provided little evidence that the persons providing the quotes fully understood the scope of work and the arrangements made between the parties to undertake the work. This is a consequence of the poor and limited documentation between the building contractor and building owner. The quotes varied widely.
30. In relation to the Office block, Scott Building provided two quotes based on the filed photographs (Barry Green 14 May 2010 and Andrew Ivory 16 May 2010) to complete or rectify the work for around $4,500.00. Coal Basin provided two quotes (Cand Constructions 22 July 2010 and M&P Services 4 Sept 09) for around $17,500.00. At hearing it was clarified that the respective quotes took different approaches to rectifying the gaps where the wall and ceiling sheets met. Coal Basin’s approach required removal of all wall panels prior to the reinstallation of recut ceiling sheets, whereas, Scott Building’s approach required the fixture and painting of mouldings around the gaps.
31. In relation to the Amenities block the parties quotations related to different work to be undertaken. Coal Basin’s quote (Mark Quinn Building 24 May 2010) concerned replacing seven (7) door jambs and mouldings as Coal Basin contends the floor jambs fall well short of the floor level. This quotation was costed at $3,283.00 along with a further $1,223.00 for providing access in a wall panel for the waste outlet of the vanity basin. Scott Building quotes (Barry Green and Andrew Ivory referred above) related to competing the water-proofing only. One for $1,250.00 and the other for $1,500.00.
Opportunity for builder to complete or rectify
32. It is a well known practice in the building industry that around the completion stage of work that a building owner provide the builder with a list of work it considers incomplete or defective so that the builder has an opportunity to undertake that work. It is clear that Mr Minogue did not properly offer Mr Scott that opportunity. Within a 2 week timeframe Mr Minogue had expressed some poorly defined dissatisfaction with the work (except for what could be considered relatively minor issues for which Mr Scott offered to rectify), had in essence ordered Mr Scott off the site and requested Scott Building send its invoice as he did not want Mr Scott to return to site to undertake any further work. After receiving the invoice Mr Minogue still did not define the areas of work that he considered incomplete or defective and did not respond to Mr Scott’s offer to rectify the little work that had been so identified.
33. It seems unusual, particularly given Scott Building employed Mr Minogue’s son as it’s apprentice and much of the work was based on discussions between the parties, that the relationship deteriorated to such an extent in a relatively short period of time over an issue that businessmen such as the parties in this minor commercial building arrangement could not discuss the quality of the work in a level headed and reasonable manner. Neither party put any further light on this situation at the hearing. Nonetheless, it is my view that Scott Building was denied not only a reasonable opportunity to complete and or rectify the work, but he was denied any opportunity to undertake the work. The consequence of this should be considered in the overall outcome of the matter.
Conclusion
34. There was no written contract in relation to this matter, the scope of works was based on a quote, various oral trade-off/off-sets and goodwill for which the cost of the quote remained unchanged from the original. Although it is clear there was further work to be undertaken that work was not clearly or easily outlined. The builder was denied an opportunity to complete an/or rectify the work he had undertaken. Furthermore it must be recalled that the work was based on flood and storm damage for which an insurance claim has been paid and was not based on a complete refurbishment of the facility. This matter requires a just and reasonable decision in regards to all the circumstances outlined above. The starting point in my view is the quote cost for the sum of $21,480.00.
35. Coal Basin’s averaged quote for completion and/or rectification of the Office block is $17, 432.00. Coal Basin obtained quotes for two different bits of work for the Amenities block, one for $3283.00 and the other for $1,223.00.
36. Scott Building’s averaged quote for the Office block work is $4,535.00 and averaged quote for Amenities block work is $1375.00.
37. In relation to the Office block I am not convinced, on the quotes and evidence provided by Coal Basin, that the costs for completing or rectifying the work truly represent the necessary work required to complete and or rectifiy. There was insufficient evidence that the extensive work identified, particularly in relation to the gaps at the ceiling and wall junctions, was necessary work to rectify the defects. Scott Building’s quotes and evidence claimed that the ceiling could be adequately supported through the ceiling batons and the installation of mouldings at the ceiling and wall junction. Although I acknowledge Scott Building’s quotes and evidence were based on photographs only, I am satisfied that the method described by Scott Building and it’s witnesses would be sufficient to properly correct the ceiling gaps and the other defects in the Office block. In the circumstances $4,535.00 should be deducted from the quote price of $21,480.00 leaving $16,945.00
38. In relation to the Amenities block, Coal Basin’s quotes refer to a concept drawing, a drawing which has never been raised as part of this dispute. The quotes are not completely relevant to this dispute except insofar as one relates to a concern Coal Basin had in relation to the gap between the door jambs/moulding and the floor and the other relates to the cost of providing access for the waste pipe for the vanity. In relation to the gap between the floor and doorjambs/mouldings, it is my view that this is relatively minor issue and for which I accept Scott Building’s claims that the gap originally allowed for the laying of tiles after which sealant would be applied to prevent moisture or rot and to improve the appearance. I therefore reject as unnecessary work Coal Basin’s quote, which includes removing seven (7) doors, door jambs and moulding, replacing them with new mouldings and repainting the new mouldings. In relation to the work quoted to provide access for the waste outlet for the vanity again I am not convinced this is necessary work because it includes removing an entire wall sheet, plumbing which was not part of the scope of works and painting the new wall sheet. However, as Scott Building accept there was no access provided for the waste outlet I will allow half of that quote, the sum of $611.00, be credited to Coal Basin and thus deducted from the remaining cost of $16,945.00, leaving $16,334.00. Scott Building‘s averaged quote to complete water-proofing in the Amenities block was for $1,375.00 and although I previously concluded this work and the tiling work were not part of any trade-off costs it did represent part of the scope of work and should therefore be reasonably included in these final calculations. I therefore allow this cost to be credited to Coal Basin and thus deducted from the remaining cost of $16,334.00 leaving $14,959.00.
39. As a general rule parties to disputes must reasonably try to mitigate any losses. Both parties found themselves in a difficult situation essentially because of a lack of specificity and clarity around the scope of works. However, it is my view Mr Minogue further escalated the dispute by not providing Scott Building a reasonable opportunity to complete and or rectify the work it had undertaken. It is open to me to add a percentage or sum that represents this failure to the remaining costs owing to Scott Building by Coal Basin. However, as there was lack of clarity around all of the work that is required to complete or rectify the works I am prepared to leave that aside in the circumstances and conclude that the building owner, Coal Basis Equipment Pty Ltd, owes the building contractor, Scott Building Pty Ltd the total sum of $14,959.00.
40. Finally, in all the circumstances it is only fair that each party is to bear it’s own costs.
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