STEPHEN LESLIE RICHARDSON T/AS STEVE’S TOTAL KITCHEN SOLUTIONS & LOUISE OLDHAM (Civil Disputes)
[2010] ACAT 87
•18 October 2010
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
STEPHEN LESLIE RICHARDSON T/AS STEVE’S TOTAL KITCHEN SOLUTIONS & LOUISE OLDHAM (Civil Disputes) [2010] ACAT 87
XD 885 of 2010
XD 916 of 2010
Catchwords: CIVIL DISPUTE – kitchen renovation – oral agreement - communication through text messages – not providing written plans - disagreement about the terms of agreement – was the contract formed? – status of deposit paid - quantum meruit
List of Legislation: ACT Civil & Administrative Tribunal Act 2008
List of Cases: Masters v Cameron (1954) HCA 72
Tribunal: Mr A. Anforth, Senior Member
Date of Orders: 18 October 2010
Date of Reasons for Decision: 10 December 2010
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 885 of 2010
XD 916 of 2010
BETWEEN:
STEPHEN LESLIE RICHARDSON T/AS STEVE’S TOTAL KITCHEN SOLUTIONS
Applicant
AND:
LOUISE OLDHAM
Respondent
TRIBUNAL: Mr A. Anforth, Senior Member
DATE: 18 October 2010
ORDER
The Respondent is not indebted to the Applicant for work done.
The Applicant is to refund the sum of $5,250.00 to the Respondent, being the deposit minus $750.00 quantum meruit.
These orders resolve XD 916 of 2010 and XD 885 of 2010.
………………………………..
Mr A. Anforth
Senior Member
REASONS FOR DECISION
On or about 13 April 2010 the applicant entered into an oral agreement to renovate a kitchen for the respondent and a deposit of $6,000 was paid. Work was commenced by demolition of the existing kitchen after which the applicant commenced to build the pre-fabricated kitchen to be installed in place of the old kitchen. The house was a rental property owned by the respondent.
The parties exchanged phone calls and text messages over the period of 12 April 2010 to 5 May 2010 regarding the renovation work. Text messages sent by the respondent from 19 April 2010 to 30 April 2010 advise the applicant that she has changed her mind at various times about the design of the kitchen and materials to be used.
On 5 May 2010 the applicant sent the following text message to the respondent:
...Louise, I have tried to accommodate your inability to make firm decisions. Now you are telling me that this is my fault. I have been to your house 5 more times than necessary, received text messages at almost 10:30pm. I have spent over an hour on the phone with you at my cost & provided you all the information necessary for you to make decisions & still you haven’t made any firm decisions. You have increased the size of your kitchen/job & it sounds like you cannot afford the increased price. Based on the additional kitchen length & 5 extra visits & the tiles. Your kitchen has increased from the original $10,153.00 GST inclusive to $11,103.00 minus the $6,000.00 deposit with a balance of $5,103.00 This is payable prior to any further work. Steve...
The respondent, through her solicitors KJB Law, sent the applicant a letter of demand dated 17 May 2010. It directed the applicant to commence forthwith on the kitchen or return the deposit to her so that she could make other arrangements.
On 20 May 2010 the applicant faxed the respondent’s lawyers expressing concern about being paid upon completion, and advised that he would prefer the money to be put into KJB Law’s Trust Account until the job was done. The applicant then served a demand on the respondent in the following terms:
In the event that Louise had not provided:
a) The information required to enable the completion of this renovation.
b) The balance of funds to either KJB Law’s Trust Account or to Steve’s
Total Kitchens by close of business Friday the 28th of May, the already completed Kitchen [sic] components will have to be stored off site at Louise’s expense.
By letter dated 22 June 2010 the respondent’ solicitors formally notified the applicant that his services were no longer required. The letter also instructed that the applicant was not authorised to incur debts for any reason in the client’s name.
On 29 June 2010 the applicant replied that as he had received no response to his letter of 20 May he had no alternative other than to place the kitchen in storage. Sent with the letter was a copy of an invoice for $849.00 including GST. This amount was comprised of $600.00 for packaging and moving, and $171.82 for the cost of one month of storage.
The Proceedings
The applicant lodged an application for a civil dispute with the Tribunal on
28 June 2010, which named Louise Oldham as the respondent (XD10/885). The applicant claimed $5,952.00 as the debt owed by the respondent with $79.25 interest from the date 5 May 2010. The application contained the following grounds:a)
Louise gave her go ahead on a plan which was offered to her on
24 April 2010 at 3 Barwell Place, Curtin. She stated she did not require a copy of the plan.
b)The kitchen was then constructed on the 24 April 2010 and 25 April 2010, bench top was ordered on the 26 April 2010 only to have Louise once again change her mind on the layout of the kitchen.
c)Louise then requested 2 more kitchen plans to be drawn.
d)I received letters from KJB Law, the second letter stating that Louise has terminated the contract.
e)Copies of correspondence, invoices & plans have been included with this application. Also copies of text messages.
Unaware that the applicant had lodged a claim with the Tribunal, the respondent lodged her own application on 2 July 2010 (XD 10/916). In her application the respondent claimed the return of the $6,000.00 deposit, $2,870.00 loss of rental income for being $410.00 per week for a period of 7 weeks (from 3 May to 28 June 2010) and $212.00 in general out of pocket expenses. In her grounds for the application the respondent gave the following reasons:
a)On or about 13 April 2010, I entered into an oral agreement with the respondent to rebuild my kitchen.
b)It was orally agreed that I would pay a total amount of $10,800 for the work including GST.
c)A deposit of $6,000.00 was paid by me to the respondent by bank cheque in good faith on 13 April 2010. It was understood that the remainder would be paid on completion of the work. No construction plans, written quote or agreement detailing a break-up of costs and inclusions was provided to me by the respondent. The design of the kitchen was agreed orally by us.
d)The respondent advised he would complete the work within 3 weeks of 13 April 2010.
e)All building work which decreased the size of the existing kitchen ie widening of doors was done and associated electrical work was arranged and paid for by me, prior to engaging the respondent to install the kitchen.
f)The respondent entered the premises and dismantled the existing kitchen, disconnected the oven and stovetop and disconnected all electrics and placed all the components including appliances in the garage. The time taken to do the demolition was at most 45 minutes. The old kitchen was subsequently left in the carport by the respondent and not disposed of by him as per our oral agreement.
g)The respondent has failed or refused to complete the works within the time agreed or within a reasonable time.
h)In addition the respondent has demanded via SMS text full payment of the balance in advance prior to doing any kitchen installation. He also required an additional amount to that originally quoted.
i)On 22 June 2010 at my request, KJB Law, Solicitors [sic] wrote a letter addressed to the respondent in which the contract was terminated on the grounds of a failure to commence or install the kitchen or alternatively refund my deposit as previously requested.
j)Because of the respondent’s failure I am claiming from the respondent a full refund of all monies paid by me to the respondent consisting of $6,000.00 deposit together with an amount of $2,870.00 being for the loss of rental income on the premises at Curtin for the past 7 weeks at the rate of $410.00 per week (and continuing) until such time as the matter is determined. In addition I seek recovery of the costs associated with hiring a skip to dispose of the kitchen in the sum of $190.00 and an amount of $22.00 for miscellaneous expenses.
k)Interest is also claimed at a rate of 9% per annum up to the date of judgement.
On 15 July 2010 the respondent’s solicitors brought to the Deputy-Registrar that two separate applications had been filed and requested that both the matters be heard together.
The respondent’s solicitors filed a response to the application XD10/885 on 22 July 2010. The respondent resisted the applicant’s claim on the following grounds:
1. There was no written plan provided to the Respondent for the proposed
works to the property at Curtin.
2. The Respondent denies the Applicant’s assertion that she refused to be
provided with a written plan. On numerous occasions, the Respondent sought a plan from the applicant, yet was never provided with one. The Respondent requested a plan and consolidation of a design for the kitchen via SMS on 30 April 2010. The applicant refused this request via SMS on 30 April 2010.
On 30 July 2010 the applicant filed a response to the respondent’s application XD10/916 framed in terms of his application XD10/885.
By a letter dated 3 August 2010, the applicant authorised Lynn Richardson to act on his behalf in both matters.
A conciliation conference was scheduled for 17 August at which no solution was reached. Both matters were listed for hearing.
On 13 August 2010 the respondent’s solicitors faxed the Deputy-Registrar advising that KJB Law was no longer acting for Louise Oldham in either matter.
The Hearing
The Tribunal explained the process to be followed and the conduct expected of parties.
The Tribunal observed that from the materials filed the dispute appeared to revolve around the issue of whether a contract had ever been formed prior to the applicant carrying out the partial pre-fabrication of the kitchen on the weekend of 24-25 April 2010. The Tribunal endeavoured to explain the nature of the common law of contract and the test that emerged from the leading case of Masters v Cameron (1954) HCA 72 to the effect that a contract was only formed where the parties had passed the point of negotiations, had agreed the essential terms of the contracts and intended to be contractually bound without more ado.
The nature of the civil standard of proof and the onus of proof was explained.
The applicant’s evidence:
The applicant said the respondent contacted him on the 9 April 2010 via text message. The respondent’s text message asked the applicant to provide a quote. After that the applicant contacted the respondent by phone and made up to eight consultation visits to the house before the whole saga was over.
On or about 8 April 2010 [sic 13 April 2010] the applicant said he provided a verbal quote to the respondent based on the respondent’s oral description of the kitchen she wanted and on the one visit to the house that had occurred by that time. The quote was for $10,153 including GST, and a plan was drawn up (exhibit 1). Several more consultations were needed following changes sought by the respondent.
The applicant claims that he showed the final plan to the respondent during a visit to the house on 24 April 2010, which the respondent approved. This date is probably a mistake on the applicant’s part. It is more likely that the visit in question was on 13 April 2010 although the applicant may also have visited the house on the morning of 24 April 2010 and may also have had the sketch with him then. The applicant said that during the visit, whether it was the visit on 13 April 2010 or the morning of 24 April 2010 is not clear, he told the respondent that once the plans had been approved they could not be changed as the kitchen was to be constructed on the weekend of 24 and 25 April 2010.
The applicant said that even in the absence of a plan that he marked out in chalk on the existing kitchen wall the proposed placement of the parts of the kitchen that were to be installed the kitchen in the presence of the respondent. That process took about 10 minutes. This probably occurred on 13 April 2010. The respondent denied that this ever took place.
The applicant acknowledged receiving 9 texts from the respondent between 19 and 20 April 2010. One of the texts of 19 April said ‘call u tomorrow change of plan possible going to look for cupboards in Bunnings hold off till then.’
A text of 20 April 2010 said ‘call u later been to Bunnings rethinking it!’
The texts of 21-23 April 2010 informed the applicant of the respondent’s new thoughts on the set out of the kitchen. On 23 April 2010 the respondent texted ‘…sorry changed my mind possible to lose (sic) open shelf to make enough swing 4 fridge and leave in corner’.
The applicant says he commenced construction of the kitchen in his warehouse on Saturday 24 April 2010 presumably after the morning visit to the respondent’s house. There was some confusion on the part of the applicant during the construction of the kitchen on 24 April 2010 which caused the applicant to invite the respondent to the warehouse to inspect the kitchen in construction.
The respondent attended the warehouse that day. According to the applicant when the respondent saw the kitchen she said that it was not what she wanted and that she wanted a galley kitchen. The applicant said that he informed the respondent that it would not be possible to have a galley design because the stove would be too close to the window and that there would have been nowhere to put the range-hood.
On 30 April 2010 the respondent texted the applicant and advised that she had purchased various whitegoods. She asked the applicant to drop off the plans for the galley kitchen with measurements.
The applicant sent the respondent a return text on 30 April 2010 informing her ‘you will need to decide now on your kitchen or your job will have to be postponed for a month…’ The applicant said that he would not be drafting plans.
The Tribunal inquired as to whether there would be any salvage value in the kitchen that had been partially built in the applicant’s warehouse, but the applicant said there would be very little value as it would be easier and more cost-efficient to build any new kitchen with completely new materials.
The applicant estimated that it there was about $9,000 or $10,000 in labour and materials expended on the job to that point.
The Tribunal asked the applicant why he did not supply a written quote. The applicant responded that he had never in all his time in business provided a written quote to anyone or had any of his customers sign a written contract.
The respondent’s evidence:
The respondent put into evidence her various text messages to the applicant and his replies covering the period 9 March 2010 to 5 May 2010.
The respondent confirmed that she went to the factory on the weekend of 24-25 April, but denied that she was shown anything that resembled her kitchen. She said that there was nothing there at all that resembled a fully-assembled kitchen, rather there were only 2 cupboards. The respondent said that she always wanted a galley kitchen, and that she had continually asked for a written quote with plans and denied receiving the plans that the applicant tendered in Exhibit 1. The respondent admitted seeing a rough diagrams or drawings; and could not recall whether they were the same diagrams that were tendered into evidence or whether she saw them on 13 April or 24 April 2010.
The respondent said that she had a conversation with the applicant about the position of the stove near the window but this occurred sometime around the deposit cheque being handed over.
The respondent denied that there were eight visits to the house by the applicant. The respondent said that there were only four visits to the house that she could remember. When the Tribunal asked the applicant to cross-check the dates in his diary, the applicant could only find entries for three visits.
The Tribunal asked the respondent about the text of 20 April 2010 to the applicant where the respondent says that she has been to Bunnings, and may change her mind about some things in the kitchen. The respondent said that because she said that she had not received and agreed to any plans she was free to change her mind on concepts. She had gone to Bunnings to see displays and a visualisation of how the kitchen might look.
The respondent said that when she received the text message of 30 April telling her to make a decision or her job would be put off, she said she could not make a decision because she had not been given any plans. Notwithstanding this the respondent had purchased the whitegoods for the kitchen.
The Tribunal put to the respondent that it was hard to understand why she would buy the whitegoods before seeing the plans, as the plans would contain the dimension of the spaces for the whitegoods. The respondent had no response.
Consideration of the evidence:
The Tribunal expressed surprise that:
(a)the applicant had never provided written plans or a written contract to any customer;
(b)the respondent would hand over a substantial deposit without having the plans and agreeing the content of the plans.
The Tribunal noted that in other jurisdiction there were express statutory provisions governing home building which would have prevented the present situation arising.
The Tribunal was satisfied on the balance of probabilities that:
(a)the parties had entered into negotiations on or about 9 April 2010 for a new kitchen;
(b)the applicant commenced the construction of a pre-fabricated kitchen on the weekend of 24 and 25 April 2010;
(c)between the 9 and 24 April 2010 the parties met on four occasions to discuss concepts and a number of texts passed between them on the same issue:
(d)between 9 April and 24 April the respondent advised the applicant of changes to her concept of the kitchen on at least 9 occasions, the last being on 20 April 2010;
(e)on about 13 April the applicant provided a written quote but no plans to the respondent. The respondent probably did see a copy of the sketch that forms exhibit 1 at some time on or shortly after 13 April;
(f)the applicant commenced the construction of the pre-fabricated kitchen in his warehouse on 24 April. The applicant’s state of uncertainty was such that he called the respondent to the warehouse on the weekend to check various items required for the kitchen. At this time the respondent advised the applicant that the proposed kitchen under construction did not accord with any agreement reached with her.
(g)by the time the respondent attended the warehouse on 24 April only two cupboards had been constructed by the applicant.
At the point of commencing construction on 24 April 2010 the applicant was well and truly on notice that the respondent was in a state of uncertainty about the kind of kitchen she wanted. He was no doubt frustrated at not being able to secure a clear and binding agreement with the respondent on the point and hence the applicant’s text of 30 April. But this frustration does not substitute for a clear agreement with the respondent on the terms of the kitchen. It seems that the applicant decided to go ahead notwithstanding the communications from the respondent between 19 and 23 April 2010 and commenced the construction.
On 24 April 2010 the applicant had only constructed cupboards when the respondent arrived and called a halt to further work. It is difficult to see when this amount of work give rise to a claim to work and materials that equal to the whole contract price by the applicant.
The Tribunal is satisfied that no agreement had been reached between the parties for the content of the new kitchen. The applicant’s actions in commencing construction were premature and carry the connotation of a ‘hard sell’ approach in trying to pressure the respondent into the final deal.
The Tribunal informed the parties that it proposed to apply the common law principles arising from Masters v Cameron [1954] HCA 72 in finding that objectively viewed, at no time prior to commencement of work by the applicant on 24 April 2010 had the respondent commitment to a binding contract and that no agreement had been reached on the basic design of the kitchen. The parties had not moved beyond the negotiation and concept phase of their dealing.
The fact that the deposit had been paid did not detract from this finding. In Masters v Cameron (1954) HCA 72. The High Court stated where a deposit was paid but no binding contract entered into:
… the prima facie inference is that the intention was to provide a sum which should take on the character of a deposit upon the making of a contract, but in the meantime should not become the property of the intending vendor. [16]
Because there was no final agreement reached between the parties there is no contract for the applicant to sue upon. At best the applicant was entitled to reimbursement for the materials provided to the respondent which were retained by the respondent, assessed at $750.00.
The Tribunal is critical of the applicant’s approach of conducting his contractual arrangements by word of mouth and not providing proper written plans and quotes. The danger inherent in proceeding on a purely oral basis is amply demonstrated by the facts of the present case.
………………………………..
Mr A. Anforth
Senior Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO: XD 10/885 & XD 10/916
APPLICANT: STEVE’S TOTAL KITCHEN SOLUTIONS
RESPONDENT: LOUISE OLDHAM
COUNSEL APPEARING: APPLICANT:
RESPONDENT:
SOLICITORS: APPLICANT:
RESPONDENT:
OTHER: APPLICANT: Mr Richardson, Steve’s Total Kitchen Solutions
RESPONDENT: Louise Oldham
TRIBUNAL MEMBER/S: Mr A. Anforth, Senior Member
DATE/S OF HEARING: 18 October 2010 PLACE: CANBERRA
DATE/S OF DECISION: CANBERRA PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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