| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : STONEHENGE CONSTRUCTION PTY LTD and WHELAN [2013] WASAT 192 MEMBER : MS K LANG (SENIOR SESSIONAL MEMBER) MR P PINDER (SENIOR SESSIONAL MEMBER)
HEARD : 11 TO 13, 15 NOVEMBER AND 25 NOVEMBER 2013 DELIVERED : 25 NOVEMBER 2013 PUBLISHED : 28 NOVEMBER 2013 FILE NO/S : CC 653 of 2013 BETWEEN : STONEHENGE CONSTRUCTION PTY LTD Applicant
AND
TRISTAN WHELAN
DEBRA HAYES
Respondents
Catchwords: Home building work contract Unlawful termination Invalid default notice Owner/architect acted dishonestly Damages
(Page 2)
Legislation: Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 5(2)
Home Building Contracts Act 1991 (WA), s 17 Result: Application successful
Summary of Tribunal's decision: The applicant made a complaint to the Building Commission seeking damages arising from the respondent owners' breach of a home building work contract. The Building Commission referred the complaint to the Tribunal for hearing.
The parties had entered into a standard form contract for over $427,000, for additions and renovations at the owners' home. One of the owners was appointed architect under the contract. The parties fell out over delays in practical completion and unpaid progress claims.
The Tribunal concluded that the owners breached the contract by seeking to unlawfully terminate the builder's engagement. The builder had not failed to fulfil a 'substantial obligation'. The default notice was insufficiently connected to the termination in time or content.
The builder accepted the unlawful termination as repudiatory conduct and terminated the contract.
The Tribunal held that the owner/architect issued a false termination certificate, misled the builder about progress payments and was not a truthful witness during the hearing.
The Tribunal awarded damages to the builder for unpaid, completed works and proven variations with interest, and nominal general damages.
Category: B
Representation: Counsel:
Applicant : In person
Respondents : In person
(Page 3)
Solicitors:
Applicant : N/A
Respondents : N/A
Case(s) referred to in decision(s):
(Page 4)
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 This is an application under s 5 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act). The applicant builder claims damages arising from the respondent owners' breach of a home building work contract. 2 The hearing proceeded over four days. Mr John Marrapodi (builder), a registered builder and sole director of Stonehenge Construction Pty Ltd (applicant) testified, as did one of the respondent owners, Mr Tristan Whelan (owner). No witnesses were called. The Tribunal prepared a two volume hearing booklet of relevant documents and the parties tendered other documents during the hearing.
Credibility 3 We closely observed the parties giving evidence. The owner is an architect. The builder described himself as a simple man who cannot read well and does not fully understand the contract. However, he is an experienced builder who impressed us during the hearing as an honest and open witness, and we find his evidence is generally truthful. In contrast, the owner appeared evasive and selfserving. The demeanour of the owner and the lack of frankness evident in his answers indicated to us a clear propensity to mislead by failing to testify fully and honestly on occasion. 4 Of particular note is the owner's submission that the certificates that he issued as architect under the contract should not be relied upon by the Tribunal, as they were prepared for loan drawdown purposes rather than as an independent assessment of the works. He testified that although he certified 92% of the works complete, in truth the builder only completed 70% of the works. Mr Whelan's credibility is greatly damaged by such implausible evidence at odds with his role as contract architect. 5 On all occasions where the parties give contradictory evidence we prefer the evidence of the builder as the more credible witness.
The contract 6 In September 2011, the parties entered into a written contract for $427,520, for additions and alterations to the owner's dwelling, in the standard form 'Australian Building Industry Contract Simple Works (Page 5)
Contract' (Contract). The owner was appointed architect under the Contract. 7 The builder testified that he had never used this standard form contract before but agreed to it on reassurances from the owner that he would help him understand it. The owner filled in the Contract and the builder admits that he did not fully understand all terms. He was concerned that the owner was to be appointed architect but accepted that he would be fair and reasonable as provided in the Contract. 8 The evidence established that the owner had prepared general construction guidelines or 'Architectural Specifications' (Specifications) before he contacted the builder for an estimate of construction costs. The builder was given the drawings to price up and over time he presented a number of quotes to the owner. After meeting up to half a dozen times 'to agree what was in and what was out [of the Contract]' in the words of the owner, the parties settled on the scope of works and price in the builder's Addenda and Specifications (Addendum). 9 The parties signed the Contract, drawings, Specifications and Addendum on 16 September 2011. Schedule 3 of the Contract provides that the Specifications and Addendum are No 4 in order of precedence of contract documents. 10 The owner asserts that the builder is primarily bound by the Specifications, which take precedence as they are listed above the Addendum in Schedule 3. 11 The builder testified that the Specifications were not discussed during the precontractual negotiations and he did not appreciate at the time that they became contractual documents when signed. The Addendum alone reflected the agreed scope of works and contract price. 12 The Specifications were not amended at any time after the owner created them in January 2011. They were filed with the local authority for planning and building approvals before the owner commenced negotiations with the builder, months before the Contract was signed. The owner admitted that construction methods were finalised during the precontractual negotiations, which were not reflected in the Specifications. For example, the Specifications provide that the floor is on bearers and joists, although the owner admits that the parties agreed to a concrete floor. The Specification was not amended to reflect this change. (Page 6)
13 The Addendum is the more recently prepared written specification and the working document finalised by the parties after lengthy negotiations. The evidence is clear that the scope of works is accurately and specifically detailed with the contract price in the Addendum. In contrast, the Specification provides a general guide to construction with references to relevant Australian Standards. 14 Where the Specifications and the Addendum are inconsistent, we find that the Addendum, which provides the specific scope of works under the Contract, takes precedence over the general Specification, consistent with the legal principle generalia specialibus non derogant (where there is a conflict between general and specific provisions, the specific provisions prevail). 15 We are fortified in this finding by the conduct of the parties. The builder performed the works detailed in the Addendum and the owner, in his capacity as the architect, assessed the works and certified their completion by reference to the Addendum. The owner did not demand full compliance with the Specifications until after termination. We dismiss the owner's submission which was unsupported by the contemporaneous documents.
Termination 16 The relationship was strained over late practical completion and delayed payments. Both parties purported to terminate the Contract in February 2013. The builder claimed $126,779 for the balance of the Contract with variations. The owner claimed the builder owed him $10,665 after deductions for unfinished and defective works. The owner did not make a complaint and the Tribunal therefore does not have jurisdiction to determine the owner's workmanship claims. 17 The parties verbally agreed to a number of variations. The owner did not pay for the variations, despite the Contract providing for progressive payments, telling the builder repeatedly that his bank would not authorise claims for extras until the end of the works (booklet, pages 87 and 168). 18 The builder testified that he repeatedly requested payment for the variations and was distressed by the increasing burden of costs that he had to shoulder on behalf of the owner. 19 The owner did not agree that he refused to pay the variations progressively and stated, 'I don't recall' when asked if he repeatedly told the builder his bank would not pay until the end. We reject this testimony (Page 7)
as untruthful. The builder's evidence was highly credible and supported by the evidence. 20 It is common ground that the builder was desperate for payment by the time he issued a progress payment on 18 January 2013. The last payment received was on 22 November 2012. The progress payment was certified in the amount of $30,050 on 21 January 2013 (booklet, page 184) and was due for payment on 4 February 2013. The owner has never paid. 21 The builder's evidence is that the owner assured him that he would pay by 25 January 2013. When that date passed, the owner blamed the bank for the delay. The owner sent a text message to the builder on 29 January 2013 indicating that the bank would imminently make the progress payment, but to let him know if it was not deposited so he could chase up the bank before work the next morning (booklet, page 89). 22 At the hearing the owner testified that in fact he had not authorised the bank to make this payment. He was waiting for a declaration from the builder to the effect that all monies due to subcontractors were up to date, in compliance with clause N3.3 of the Contract. He was worried that the builder had not paid his subcontractors, as many of them had knocked on his door seeking payment because the builder was uncontactable. This was strongly denied by the builder. The owner did not identify the subcontractors or call any witnesses. 23 We reject the owner's evidence as a recent fabrication inconsistent with his contemporaneous text messages. We conclude that he lied to the builder in promising imminent payment when he well knew that payment would not be made. 24 The owner told the builder he could not speak to his bank about the delay in payment as his branch had closed and he only had a '1300 number'. This was another lie. On 4 February 2013, the builder telephoned the owner's bank and was advised that the progress payment would not be paid, as the owner had not submitted requested documents to the bank. The builder testified that he was also told that the bank had no policy of paying claims for variations at the end of construction and that the owner had never submitted any of the builder's claims for payment of variations. The owner responded furiously when the builder relayed to him the conversation with the bank and told the builder that he was 'gone'. Subsequent text messages support the builder's evidence (booklet, page 549). (Page 8)
25 The owner denied that he reacted badly. He confirmed at the hearing that his bank did not have a policy of not paying claims for extras, and he had never submitted any such claims to the bank for payment. 26 The owner testified that he terminated the Contract by notice handed to the builder on 6 February 2013 (but dated 1 February 2013) because the builder lied to him about having paid a deposit on leadlight windows. In addition, the Contract was to have been completed within 24 weeks but had taken 75 weeks. The owner gave the builder a notice of intention to terminate on 2 September 2012 with a list of items to rectify within 10 days, including the leadlight windows. The leadlight windows were not completed and the owner relies on this default notice in his termination of 6 February 2013. 27 The builder testified that the termination 'came out of the blue'. The owner had taken the leadlight windows out of the scope of works by text message prior to the termination notice (booklet, page 546). The builder estimated that construction was 95% complete at this time, with the progress payment for over $30,000 and $53,000 in variations outstanding, in addition to other completed works. 28 The builder testified that practical completion was delayed through the actions of both parties, including the owner and his family living on site without his agreement. Nevertheless, the builder had completed 42% of the works since the September default notice according to the owner/architect's certificates and the owner had not threatened to terminate the Contract again. The builder's workers were working when the owner served the termination notice and ordered them off site. 29 The builder testified that he was shocked when, six weeks later, the owner, in his capacity as architect, provided a termination certificate claiming over $10,000 from the builder. 30 At clause Q the Contract provides a process for termination of engagement by the owner. Q1 Termination of engagement Q1.1 If the contractor fails to meet a substantial obligation under this contract, the owner may give the contractor a written notice requiring the contractor to remedy the default within 10 working days. The notice must specify the default and state that it is given under this clause. (Page 9)
31 The parties did not address the Tribunal on the distinction between 'termination of engagement' and 'termination of contract'. 32 We find that the owner's termination was not lawful under the Contract. 33 The default notice of 2 September 2012 had expired with the failure of the owner to terminate the Contract at the expiry of the stated deadline. No 'additional days' were agreed by the architect. The owner was apparently satisfied by the builder's progress, having certified 42% of the works complete since the default notice. No further threats to terminate the Contract followed. 34 The default notice was not reasonably connected to the termination notice, either in content or time. We accept the builder's evidence that he was working hard and had no indication that the owner was thinking of terminating the Contract over leadlight windows or for any other reason. We conclude that the owner's furious response to the builder for contacting his bank, when he told the builder he was 'gone', was the trigger for the unlawful termination. The text messages between the parties support the builder's version of events (booklet, pages 549 - 564). 35 A failure to install leadlight windows would not comprise a failure of a 'substantial obligation' sufficient to trigger the termination of a contract of $427,520. In any event, we find the owner had taken the installation of leadlight windows out of the builder's scope of works by his text message to that effect prior to the termination. 36 The builder accepted the owner's unlawful termination as a repudiatory breach and terminated the Contract in writing on 12 February 2013. The builder was entitled to do so. (Page 10)
37 The owner's repudiatory breach is a breach of the Contract within the meaning of s 17 of the Home Building Contracts Act 1991 (WA)(HBC Act) giving rise to this complaint under s 5(2) of the BSCRA Act. 38 The builder seeks damages including full payment under the Contract, general damages and interest. The parties agree that the works were near completion but some aspects were outstanding. Payment of the full contract price, including the incomplete work, is not justified. The proper measure of damages is payment for all completed works, including the proven variations, with appropriate interest.
Value of the Completed Works 39 The builder's evidence is that at least 95% of the Contract was completed at the date of unlawful termination. The owner, in his capacity as architect, certified the works 92% completed at 18 January 2013 (booklet, page 184) and the parties agree that the builder continued to work on site until 6 February 2013. 40 The owner testified that the builder completed only 70% of the contractual works. He had only certified the works at 92% for loan drawdown purposes. In his termination certificate (booklet, page 488) the owner certified that he had completed all remaining works at a cost of $84,553.90, including $51,137.70 for rectification of unsatisfactory workmanship. The incomplete works were assessed at $33,416. The owner produced little independent evidence in support of this assessment. We reject his assessment that the builder only completed 70% as selfserving and dishonest. 41 The parties gave considerable conflicting evidence on the outstanding works. Although we prefer the builder's testimony, we are unable to value the incomplete works on the evidence. We conclude that the best available evidence is the architect's certificate of 18 January 2013 assessing 92% of the works completed. The value of the incomplete works is 8% of the contract price of $427, 520, being $29,926. We are satisfied that the builder is due the balance of $397,594, of which the owner has paid $366,006. 42 We conclude that the value of the proven completed contract works unpaid at termination is $31,588.
Variation claims 43 Various changes to the scope of works were agreed during construction. The builder failed to prepare written variations as required (Page 11)
by the HBC Act and the Contract. The owner breached the Contract at clause A4.1(f) by failing to issue instructions to the contractor only through the architect. The owner, in his capacity as architect, failed to provide instructions in writing to the builder as required under the Contract. Instead, the owner verbally instructed the builder, or his subcontractors, to vary the works, which they did. Sometimes the builder was unaware of a variation until the works were completed and he received the relevant subcontractor's invoice. 44 As outlined above, the owner refused to pay claims for variations until the completion of the Contract. For this reason, the builder did not invoice the owner for most of the variations prior to termination, despite the Contract providing for progressive payments. The process of determining the agreed variations was consequently an involved process at the hearing, with both parties giving lengthy conflicting evidence. 45 The builder claimed the following unpaid variations:
1) Cavity sliders, balustrade, brickwork and outdoor shower (management fee) $706 46 The builder testified that the owner requested this extra work. The work was completed and invoiced on 14 July 2012 (booklet, page 94) and then certified completed by the owner, in his capacity as architect (booklet, p 93). However, the builder's 20% management fee was not approved or paid by the owner. 47 In the Scott Schedule (booklet, page 446) the owner states that he did pay the '$709 [sic] builder's fee'. During the hearing the owner testified he made full payment by cash cheque at the builder's behest. The builder denied this and referred to the owner's cheque (booklet, page 422) made out to Stonehenge Constructions. The management fee for the variations is not included in this payment. 48 The owner provided no credible evidence that he had paid the management fee, or any reason why he failed to certify the full amount of the invoice in his capacity as architect. He did not dispute that the builder is entitled to charge 20% on variations under Schedule 1 Item 17 of the Contract. 49 The owner submitted in relation to each variation claim that the builder is not entitled to payment as he failed to comply with clause H2 of the Contract. We agree that the builder did not comply with the Contract in some regards: for example, by failing to identify 'the architect's instruction' in the relevant invoice and not detailing any required (Page 12)
adjustment to the date for practical completion. However, the owner's instructions to vary the Contract were verbally issued to the builder, or his subcontractors, in breach of clause A4.1(f) and clause J1.1 of the Contract; no architect's written instructions were issued and it was therefore impossible for the builder to strictly comply with clause H2 of the Contract. 50 By accepting the builder's work and certifying the relevant noncompliant invoice for these variations (booklet, page 93), we find the owner has waived the requirement for strict compliance with clause H2 of the Contract. The builder accepted the owner's instructions, although they also offended the Contract. The parties effectively agreed to amend the Contract by their conduct and are estopped from retrospectively demanding strict compliance. The owner's submission also offends the legal principle against unjust enrichment and is rejected for this, and each of the following, variation claims. 51 The builder has proved to our satisfaction that the parties came to an agreement to change the builder's scope of works. The owner instructed the builder to undertake extra works, the works were properly completed and fairly invoiced and the owner is legally obliged to pay the builder's relevant invoice, including the unpaid management fee of $706.
2) Plastering and 2nd fix carpentry: Invoice No 520 $14,021 52 Both parties agreed that this work was undertaken for the owner following which the builder issued an invoice for $14,021 on 6 September 2012 (booklet, pages 96 - 97). The owner, in his capacity as architect, did not approve payment of the entire invoice, disputing charges for the installation of plastered ceilings, a 3,445 mm stainless steel floor grate and 2nd fix carpentry (hanging internal doors). The invoice remains unpaid. 53 The builder's evidence was that the owner instructed him to perform the extra work and that he should pay the fair price. 54 The owner requested a variation to install new ceilings in the existing house and attended Plasterline Industries to make the cornice and ceiling selections. Plasterline Industries installed the owner's selection of cornices and ceilings as instructed and invoiced the builder for the materials and labour (booklet, pages 192 - 193). The owner disputes the fitting component on the basis that had he known the subcontractor's labour price ($80 per lineal metre?) he would not have proceeded with this variation. The builder testified that the owner was well aware of the costs in advance, having personally attended Plasterline Industries to (Page 13)
discuss their requirements and make selections. The owner requested the variation and must pay the builder's invoice for the labour component, which we consider is fair and reasonable. 55 The Contract provides at Schedule 8 that all plumbing fixtures and fittings are supplied by the owner (booklet, page 245). The owner disputes the claim, stating that this item should have been included in the contract price. The builder's evidence is that the owner made his selection on the custommade ensuite grate after the Contract was signed (booklet, pages 194 - 195). The builder testified that he gave the owner the price before ordering the construction of the grate, with the owner's approval. We are satisfied that the grate is a specialised plumbing fixture to be supplied by the owner, who agreed to the cost in the amount claimed. 56 The Contract states that the contract price includes installation of doors and windows (booklet, page 245). However, the Addendum provides that the owner is responsible for both materials and installation of doors and windows (booklet, page 581 - 582). 57 The builder testified that the parties never agreed that the installation of doors and windows was included in the contract price and the owner mistakenly wrote this provision in into the wrong section of the Contract. The agreement as set out in the Addendum was that the owner would undertake both installation and supply of doors and windows in order to avoid paying the builder's management fee. 58 The builder testified that the owner directly engaged his friend, Mr Carlo Gosatti of Inglewood Joinery, to undertake these works. At some later point, the owner instructed the builder to take on the installation of the doors and windows, which then became 'an extra' (booklet, page 541). This is verified by Mr Gosatti by statutory declaration (booklet, page 500). 59 The owner did not dispute this evidence but submitted that the Contract takes precedence over the Addendum. 60 The owner's own conduct defers to the Addendum, by previously authorising and paying for window cabinetry by the builder as a variation (cavity sliders, variation (1) above). In these circumstances, we resolve the conflict between the Addendum and the Contract by reference to the conduct of the parties and the surrounding circumstances, which clearly demonstrate that the parties considered themselves bound by the Addendum in this regard. To determine otherwise, in the face of clear evidence of a mistake in the Contract, would result in an injustice. (Page 14)
3) 2nd fix carpentry and electrical variations: Invoice No 524 $5,766 61 The builder's evidence is that the owner instructed him to undertake extra 2nd fix carpentry and electrical work, which he completed. The invoice was issued on 11 October 2012 (booklet, page 97). The owner, in his capacity as architect, did not approve payment of the entire invoice, disputing some of the carpentry charges. 62 We conclude that the parties agreed to change the builder's scope of works under the Contract. The builder has proved to our satisfaction that the owner instructed the builder to undertake these extra works, the works were properly completed and fairly invoiced and the owner is legally obliged to pay the builder's relevant invoice, which remains unpaid. 63 We allow the claim, minus $400 (plus management fee of 20%) for the window seat, which we find is not a window as argued by the builder, and is an item detailed in the drawings that ought to have been included in the contract price. 64 This claim is allowed in the amount of $5,286.
65 The builder testified that the parties discussed the electrical extras. The owner instructed the subcontractor electrician directly. 66 The owner testified that he did not request these works and should not have to pay for them. 67 We are satisfied that an agreement was reached by the parties to change the builder's scope of works under the Contract. The builder has proved to our satisfaction that the owner instructed the builder to undertake these extra works, the works were properly completed and fairly invoiced, and the owner is legally obliged to pay the builder's invoice, which remains unpaid. We allow the claim.
68 The builder testified that the owner's selection of cabinetry exceeded the provisional sum in the Addendum (booklet, page 214) and the owner is required to pay the additional costs. (Page 15)
69 The owner's evidence was that the Contract did not provide for any provisional sums but in good faith he would pay for the work without the builder's margin. We reject this submission. 70 We conclude that the builder's claim for the agreed extras is fair and reasonable and that the owner has no credible argument to refuse to pay the builder's invoice in full. We allow the claim.
6) Washed aggregate: $2,400 71 The builder testified that the owner changed the location of the carport due to the presence of tree roots, which resulted in an increase in the length of the driveway. The termination certificate (booklet, page 488) shows the owner, in his capacity as architect, approved this variation. 72 The owner testified at the hearing that he now disputes the claim as he only agreed to the change to benefit the builder, and the builder failed to claim the variation in accordance with clause H of the Contract (which submission we rejected above). 73 We are satisfied that the extra work described at page 102 of the booklet was requested by the owner and should be at his cost. The claim is allowed.
74 The builder's evidence is that tree removal is not included in the Contract (booklet, page 205). The owner had agreed to the work as an extra and requested the invoice, which the builder emailed to him (booklet, page 146). 75 The owner's evidence is that site clearing was included in the works according to the drawings and Specifications (booklet, page 323). 76 We are satisfied the work was varied by the owner and should be at his cost. The claim is allowed.
77 The builder testified that a letterbox was not in his scope of works. The owner directly instructed the builder's subcontractor, Pharaoh's Choice, to construct a limestone letterbox. The subcontractor followed the owner's instructions by installing the letterbox twice, and (Page 16)
issued his invoice to the builder (booklet, page 103). The owner disputed the charge for the second installation. 78 The parties disagreed as to why the letterbox was installed on two occasions - either it was in the wrong location or the owner decided he preferred that it be constructed from uncut blocks. Either way, we find the owner instructed the subcontractor directly, and personally supervised this scope of works, which must therefore be at his cost. The claim is allowed.
79 The builder testified that the owner changed the length of the pool fence. The owner testified that he would happily pay for the variation except that it is noncompliant with relevant Australian Standards. The builder denies this. 80 We conclude that the variation to the pool fence was undertaken on behalf of the owner for which the builder should be paid. The owner has not made a workmanship complaint. We allow the claim in full.
10) Roof redesign: $1,869 81 The builder testified that the owner's roof design was faulty and that the owner agreed with the builder and his subcontractor roof carpenter, Mr Martin Cooper (booklet, page 425 and page 504), to necessary variations. He did not charge the owner for the consequential variations to the brickwork, as he is a bricklayer and therefore could do this part of the works himself. 82 The owner did not dispute this evidence but testified that the builder's then partner, Mr Steve Diblasi, told him there would be no charge for the variation. The builder denies this. 83 We are not persuaded by the owner's evidence, and conclude that although the builder agreed not to charge for extra brickwork, the cost of the necessary roof variations is a fair and reasonable charge payable by the owner. The claim is allowed.
11) Tiling wet areas: $5,349 84 The builder testified that the owner selected marble and mosaic tiles in excess of the prime cost allowance of $45m2. The owner does not dispute this but submits that a credit was due as the scope of work was reduced. (Page 17)
85 The Tribunal is not satisfied that the scope of work is reduced and concludes that the fair and reasonable cost of the variation on the available evidence is $2,451 for labour and $1,477 for materials (booklet, page 105 page 108). We allow $3,928 for this claim.
12) Wood flooring: $3,318 86 The builder testified that the owner engaged his own floor sander and therefore removed this part of the work from the Contract. The owner sought a credit of $6,699. The builder's evidence was that the cost of floor sanding and finishing the new timber floor under the Contract was $3,381, which he agrees to credit back to the owner (booklet, page 109). The owner changed the polyurethane finish to an oil finish and extended the works to the existing timber floor at an additional cost of $3,318, which was not within the builder's scope of works and is therefore at the owner's expense. 87 The Tribunal concludes that the owner is due a credit of $3,381 for this item.
88 The builder testified that he ordered a new box for the meter box, which he installed on the perimeter wall as a variation. He only charged the owner for the materials. The meter was sitting in the ground when he commenced work and there was no existing meter box to his knowledge. 89 The owner's evidence was that there was a preexisting meter box that should have been relocated and he therefore refuses to pay this claim. The drawing (booklet, page 591) makes no reference to an existing meter box. 90 We prefer the evidence of the builder and allow the claim.
14) Council verge permits: $312 91 The builder testified that it became necessary to use the verge for the site toilet after the owner changed the location of the perimeter wall, preventing access to the external sewer connection from inside the property. Other materials were delivered to the verge during construction, such as yellow sand, limestone, bricks and the site bin. 92 The owner testified that the builder did not need to use the verge but did not dispute the builder's evidence in relation to the sewer line. The owner also testified that the Contract took much longer than agreed to complete, which was the reason for the permits. We are satisfied that the (Page 18)
owner's variations contributed to the delay in achieving practical completion. 93 The local government authority issued two verge permits to the builder during the works resulting from the owner's variation to the perimeter wall. The claim is allowed.
15) Piston hinges for window seat: $136 94 The builder testified that the owner requested piston hinges for a living room window seat and was aware that there would be a cost, which was not included in the Contract. The owner does not dispute the amount claimed or that he received the benefit of the supplied materials, or that he was on notice when he received Invoice No 524 on 11 October 2012 (booklet, page 97), that the builder intended to charge him for the cost of the piston hinges for the window seat. The owner disputes the charge as falling within the original scope of works. 95 The Contract drawings at A7002 detail the window seat with an adjustable gas piston brake. On this basis, we conclude the piston hinges should have been included in the contract price and are not a valid extra. 96 The claim is disallowed.
16) Longer limestone wall: $566 97 The builder testified that by reason of the owner's instruction to relocate the carport due to the proximity of a large tree, the perimeter limestone wall was extended by 11 metres. Twelve additional limestone blocks at $12 each were required, with mesh and concrete and a brick header, and labour at $40 per block. 98 The owner testified that he should not have to pay for the variation as the carport was moved for the builder's convenience. 99 We reject that submission and allow the claim.
17) Second pool light: $660 100 The builder testified that the owner instructed the pool subcontractor to install a second pool light. One pool light was included in the contract price. The variation was undertaken by the pool contractor and invoiced to the builder. The owner refuses to pay the builder. 101 The owner denied requesting a second pool light. We find the owner's evidence lacks credibility, that he did request the light, has received the benefit of the light, and is required to pay the fair and reasonable costs. The claim is allowed. (Page 19)
18) Pool tiler and material/dewatering: $1,212 102 The builder testified that the owner removed pool tiling from the Contract. However, the owner required the builder to make the area ready for his tiler, which amounted to extra preparatory works by the builder not included in the Contract (booklet, page 110). 103 The owner refused to pay, and submitted that the scope of works was unchanged. We are not satisfied that the work undertaken by the builder was an extra at the owner's expense rather than standard site maintenance included in the Contract. 104 We disallow this claim.
19) Asbestos removal bin hire: $963 105 The builder testified that asbestos was identified in the existing house at the commencement of the works, and that its disposal was an extra. He only charged for the hire of the asbestos bin, not the labour required. 106 The owner stated that the builder caused damage to asbestos soffits during the reroofing works which resulted in further asbestos disposal. The builder should therefore pay half the cost of the bin. 107 We accept the builder's evidence that the broken soffits were separately disposed of by the builder at no cost to the owner, after the asbestos bin had been filled and removed from site. We are satisfied that the bin was hired solely to dispose of the asbestos identified in the existing house, as a variation payable by the owner. 108 The claim is allowed in full. 109 The total allowed for the claimed variations is $43,855.
Interest 110 The builder claims interest on the outstanding contractual sum, which we determined is $75,443. The Contract provides at Schedule 1 Item 28 that interest at 10% is payable on outstanding claims for payment (booklet, page 236). 111 If the owner had properly effected the termination on 6 February 2013 he was bound to comply with clause Q9 [of the Contract] by, in his capacity as architect, promptly preparing a termination certificate for the amount payable to the builder. We find that the termination certificate should have reasonably issued within 14 days, and that final payment then fell due after a further 14 days, under Schedule 1 Item 10 of the Contract. (Page 20)
112 The outstanding progress claim for $30,050 was due on 4 February 2013. Interest on this amount is allowed at 10% for 10 months, being $2,504. 113 We find that the owner should pay interest on the outstanding contract sum and variations from 6 March 2013. We are satisfied that the progress claim for these works would have issued by this time, in any event, had the owner not unlawfully terminated the Contract. We allow nine months' interest on the completed works and variations ($45,393) at 10%, being $3,404. 114 Total interest awarded: $5,908.
Conclusion 115 We are satisfied that the owner breached the Contract and the appropriate remedy is for the owner to pay the builder the amount payable under the Contract. We find that the sum of $81,351 is payable to the builder. 116 The builder also claimed compensation for general damages. As the builder provided no objective evidence, only nominal general damages of $100 are allowed. 117 The builder's remaining claims in the Scott Schedule are misconceived and are dismissed.
Orders |