The Architects (Aus) Pty Ltd Architects Australia v. Bethany Brisbane International Church Inc
[2009] QDC 56
•11 March 2009
DISTRICT COURT OF QUEENSLAND
CITATION:
The Architects (Aus) Pty Ltd Architects Australia v Bethany Brisbane International Church Inc [2009] QDC 56
PARTIES:
THE ARCHITECTS (AUST) PTY LTD
ABN 12 010 362 937 TRADING AS ARCHITECTS AUSTRALIA
Plaintiffv
BETHANY BRISBANE INTERNATIONAL CHURCH INC
DefendantFILE NO/S:
2217/07
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
11 March 2009
DELIVERED AT:
Brisbane
HEARING DATE:
16 February` 2009 – 18 February 2009
JUDGE:
SEARLES DCJ
ORDER:
1. Judgment for the Plaintiff for $71,500 plus interest of $11,812 a total of $83,312.
2. The defendant to pay the plaintiff’s costs on an indemnity basis from the commencement of proceedings to Judgment.
CATCHWORDS:
CONTRACT – Agreement for payment of Architect fees.
The Architects Act2002 (Qld), s 18A
The Architects Regulation 2003 (Qld), s 108
Association’s Incorporation Act 1981 (Qld) s 28
Fair Trading Act 1989 (Qld)
Trade Practices Act 1974 (Cth)
COUNSEL:
M. Ambrose – Plaintiff
A. Stobie – Defendant
SOLICITORS:
BCI Duells Lawyers – Plaintiff
Pan & Partners Lawyers – Defendant
The plaintiff claims $71,500 for architect’s fees pursuant to a contract said to have been entered into in October 2006 whereby the plaintiff agreed to carry out the following design work:-
(a) a building for recreational and church services (with space for at least 50 persons per service) to be erected on the Land including space for basketball and badminton, male and female amenities, an office for pastoral and administration purposes, storage for seating, floor coverings and church equipment, separate access for parishioners and students, natural ventilation and soundproofing and 20 car parking spaces;
(b) student accommodation for 10 male and 10 female students on separate floors providing for two students per room, with each room to have its own amenities;
(c) common rooms including a kitchen, dining area, laundry and student’s library;
(d) 2 to 3 classrooms of approximately 20 m2 each;
(e) parking for 5 to 6 vehicles;
(f) privacy for the existing residents from the community facility;
The plaintiff alleges the contract was constituted by an unsigned standard Royal Australian Institute Client and Architect Agreement sent to the plaintiff by way of an offer and accepted by Mr Hanny Yasaputra on behalf of the defendant in a telephone conversation in or around November 2006. It is said Mr Yasaputra acknowledged receipt of the Architect Agreement and instructed Mr Kildey of the plaintiff to proceed with the work.[1]
[1]Further Amended Statement of Claim, paragraphs 3 and 4.
The defendant denies the claim and says:-
(a) no agreement was reached at any time for the plaintiff to provide any service, that the defendant sought from the plaintiff assistance in providing obligation-free quotes, drawings and design suggestions which the plaintiff agreed to and that all the work done by the plaintiff was done on a gratuitous basis;[2]
[2]Further Amended Defence, paragraphs 2 and 5.
(b) the plaintiff was at all times informed that:-
(c) (i) the chairman, Mr Yasaputra did not have power to
bind the defendant association;
(ii) all decisions had to be approved by the members of the defendant especially those who were to make donations necessary to finance the project;
(iii) the defendant’s budget was $800,000 and it would be unable to proceed with the project if costs exceeded that amount; and
(iv) the defendant would not enter into an agreement to engage the plaintiff until preliminary plans and designs were finalized and on the understanding that the plaintiff would assist the defendant to make its decision whether or not to enter into an agreement with the plaintiff;[3]
(d) that, in the event that an agreement was found to have been entered into by the defendant, reliance was placed on ss 37, 38 and 39 of the Fair Trading Act 1989 (Qld) and ss 51AB, 51AC and 52 of the Trade Practices Act 1974 (Cth) in that the plaintiff engaged in misleading and deceptive conduct inducing the defendant into entering into the agreement under the belief that the work was to be done on a gratuitous basis and that the plaintiff’s conduct was thereby unconscionable.
[3]Further Amended Statement of Claim, paragraph 3.
Apart from two expert witnesses there were three witnesses, Mr Kildey for the plaintiff and Mr Yasaputra and Mr Sudarmana for the defendant. Mr Kildey gave evidence of a series of meetings held with representatives of the defendant as his involvement in the project progressed.
FIRST MEETING – 25 SEPTEMBER 2006
Mr Kildey’s evidence of 25 September 2006 meeting
Mr Kildey said that in September 2006 he received a telephone call from Mr Yasaputra following which a meeting took place in Mr Kildey’s office on Monday, 25 September 2006. He said the meeting lasted a little over an hour and that was Mr Yasaputra’s recollection also.[4]
[4]Transcript 1.5.27, 2.58.35.
Mr Yasaputra explained to Mr Kildey in general terms that his church was looking to develop student accommodation and recreation facilities on its land at Eight Mile Plains which according to Mr Kildey, Mr Yasaputra said that they were looking to accommodate about 10 male and 10 female students. He said Mr Yasaputra provided him with a couple of aerial photographs and a single line sketch plan prepared by a building designer[5]. The plan showed a single line existing low set dwelling, a proposed barbeque area and a proposed two storey extension, car parking for 14 cars and a proposed swimming pool.
[5]Exhibits 1 and 2.
According to Mr Kildey, Mr Yasaputra explained that the defendant would like to build the student accommodation and use the multi-purpose building for church services as well as basketball. The accommodation was intended for international students. He said that Mr Yasaputra asked him what his architect’s fees would be and he explained the plaintiff charged on a percentage basis and the percentage was normally between 10% and 13% for a type of mixed development which the proposal involved. Mr Yasaputra asked him what figure the percentage was based on and he explained that in the first instance it was a percentage of the estimated cost until the exact cost was known after tenders were received. He went on to explain that the estimated costs were based on reliable information which the plaintiff received from quantity surveyors.[6]
[6]Transcript 1.11.1-20.
Mr Kildey said that he told Mr Yasaputra that his assessment was that this was unlikely to be a project achieved at a very modest cost and it was going to be expensive. Mr Yasaputra said that he had a feeling the defendant would like to spend around $900,000. Mr Kildey said he responded immediately by saying “this is not going to happen for $900,000”.
Mr Yasaputra then said he wanted to know what could be put on the land and how much it was going to cost. He did not, according to Mr Kildey, indicate that $900,000 was all that was available for the project.[7] He explained that the project was going to be financed from contributions paid and money the church would raise.
[7]Transcript 1.11.40.
Mr Kildey said that at no point during that meeting on 25 September 2006 was it suggested to Mr Yasaputra that he would not charge. He said that it was not the plaintiff’s mode of business to work without fee and that, had that been suggested to him by Mr Yasaputra, he would have said “thank you very much for coming in, don’t mean to be offensive but have a cup of coffee”. He said that at that time in September 2006 the building industry was busy, it was difficult to get builders and that the plaintiff’s practice was very very busy.
However Mr Kildey did tell Mr Yasaputra that he was prepared to commence work without having a contract signed after Mr Yasaputra told him that settlement of the acquisition of the subject property had not taken place but that the defendant wanted to get on with the project as quickly as possible. On that basis Mr Kildey said he told Mr Yasaputra ‘OK. I will require you to sign a contract like I require any of my clients to sign contracts but I will proceed with the work prior to that on a good faith basis’[8]. In fact settlement of the acquisition by the defendant took place around September 2006 and the previous owners were renting the property for a further three months.[9]
[8]Transcript 1.12.40
[9]Transcript 3.33.52.
The meeting concluded on the basis that, before the plaintiff could do anything, Mr Kildey would first need to inspect the property and he arranged with Mr Yasaputra to meet on the property which they did on Friday, 29 September 2006.[10]
[10]Although Mr Kildey said it was set for the following Monday which would have been 2 October 2006 (Transcript 1.12.32). Exhibit 6 shows that the meeting took place on Friday, 29 September 2006.
Mr Yasaputra’s evidence of 25 September 2006 meeting
Mr Yasaputra agreed he met Mr Kildey at the latter’s office and explained what he called his vision for the project.[11] He explained he would like to have student accommodation and cater for it with an indoor stadium with a basketball court which could be used on Sundays for church services. He said Mr Kildey asked him how much was the budget and he quoted roughly $600,000 to $800,000 to which Mr Kildey responded that he would try his best to help him to have the kind of building he wanted. According to Mr Yasaputra there was no discussion of architect’s fees[12] and the meeting finished on the basis Mr Kildey would contact Mr Yasaputra.
End of 25 September 2006 meeting
[11]Transcript 2.57.45.
[12]Transcript 2.58.30.
Further meeting in Mr Kildey’s office approximately one week after 25 September 2006 meeting
According to Mr Yasputra, roughly a week after the meeting of 25 September, Mr Kildey telephoned him and said he had a sketch he would like to show him and asked if Mr Yasaputra could come to his office, which he did. He said Mr Kildey told him he wanted to help by putting Mr Yasaputra’s vision in a drawing so he could show that drawing to his people. Again, Mr Yasaputra said there was no discussion of fees at that meeting.[13]
[13]Transcript 2.58.10-30.
Mr Kildey denied any such a meeting ever took place. In cross-examination when it was put to him that he telephoned Mr Yasaputra and told him he had some preliminary plans, Mr Kildey said he had not done any plans at that stage because he had no knowledge of the property. He also denied that he had told Mr Yasaputra that his fees in relation to these plans were complimentary.[14]
[14]Transcript 1.60.
That sketch was not produced in evidence by Mr Yasaputra. In cross-examination, before he was asked specifically about his non-disclosure of that drawing, he was asked whether his solicitor had explained to him his obligations to disclose relevant documents in the case to which he replied “No”.[15] His explanation for failing to disclose the drawing was that he probably forgot to give it to his solicitor.[16] In the next question, seeking to clarify his understanding of his obligations of disclosure, he was asked again whether his solicitor had explained to him his obligations or the defendant’s obligations to disclose all relevant documents to which this time he replied “Yes”. He was then asked whether he had made such disclosure and replied again “Yes”.[17]
End of further meeting alleged by Mr Yasaputra
[15]Transcript 2.69.45.
[16]Transcript 2.70.48.
[17]Transcript 2.71.10-20.
Enquiries of Brisbane City Council by Plaintiff
Between the September 25th meeting and the meeting on site on 29 September, Mr Kildey asked Mr Dutton a senior architect employed by the plaintiff and who later worked on this project to enquire of the City Council whether there was any record of this proposal. That resulted in the plaintiff obtaining a copy of Exhibit 3 which is a pre-lodgement record recording details of a meeting between the Council and Evans Computer and Building Services Pty Ltd on behalf of the defendant where the project was discussed. That meeting took place on 7 September 2006. That gave Mr Kildey some better insight into the project. The following matters occurred to him as being issues which would have to be addressed in the project[18]:-
[18]Transcript 1.9-10.
(a) a relaxation of carparking numbers would need to be asked for;
(b) noise will be an issue given the reference to an acoustic report on page 4 of Exhibit 3.
(c) Mr Kildey was concerned about noise because the project would be within a residential area but contain a basketball court which can create quite a lot of noise.
(d) to him it meant that he would have to provide walls which were far more substantial than a simple portal frame and metal sheeting.
From that he concluded that the project would end up being a complex one.[19]
SECOND MEETING – 29 SEPTEMBER 2006
[19]Transcript 1.10.33.
Mr Kildey’s evidence of 29 September 2006 meeting
Mr Kildey and Mr Dutton met Mr Yasaputra on site. Also in attendance was Mr Yasaputra’s wife, Mr Sudarmana and another person who opened the building for them. Mr Sudarmana was a member of the Board of the defendant and the Treasurer. Mr Kildey said the return trip to his office at North Quay, Brisbane to Eight Mile Plains including the meeting, involved three hours during which time he walked around the property and made inspections, took a series of photographs and levels and then sat down and discussed the project with the defendant’s representatives.
During discussions Mr Kildey told the meeting he would need proper survey drawings to ascertain the levels of the property so that he could ascertain where the buildings would actually sit. He said he was asked whether he could obtain a price from a surveyor and there was also discussion about the defendant getting a price from its surveyor. Mr Kildey pointed out that if both he and the defendant were going to approach a surveyor then they would need to have both surveyors quoting from the same set of requirements. It was agreed that the plaintiff would prepare a brief on which any surveyor could quote and that both the plaintiff and defendant would obtain surveyor’s quotes.[20]
[20]Transcript 1.15.30-60, 1.16.1-35.
Prior to this site meeting, Mr Kildey said he had endeavoured to obtain a full bound client agreement from the Royal Australian Institute of Architects but was only able to obtain a short form contract.[21] At this site meeting he gave a copy of that short form contract in blank form to Mr Yasaputra, in his words, “to fill out what we’d explained in the first meeting, how architects function and the services that are provided.” Both Mr Yasaputra and Mr Sudarmana agreed that this fee document was handed to Mr Yasaputra by Mr Kildey who asked him to read it.[22] Mr Kildey said he discussed the short agreement in general terms with Mr Yasaputra and Mr Sudarmana and explained that he did not have a long form contract but would send one along when he received it.[23] The meeting concluded with an agreement that Mr Kildey would proceed to prepare preliminary sketch plans from the information and photographs he had obtained at this meeting. That sketch was completed later in October and collected by Mr Yasaputra.[24] Mr Kildey had no recollection of any budget discussions at this second meeting and said the discussions were more to do with architectural engagement and the content of the proposed development.[25]
[21]Exhibit 5.
[22]Transcript 2.73.5, 3.27.30.
[23]Transcript 1.17.45-60.
[24]Transcript 1.18.45-60, 1.19.10.
[25]Transcript 1.61.4.
Mr Yasaputra’s evidence of 29 September 2006 meeting
Mr Yasaputra said that at the meeting of 29 September both he and Mr Sudarmana quoted Mr Kildey the defendant’s budget of $800,000 to which they said Mr Kildey made no response. He said there was no discussion about architect’s fees and the meeting only lasted 35 to 40 minutes as opposed to Mr Kildey’s recollection of over three hours. Mr Sudarmana’s recollection was one hour.[26] Mr Yasaputra said that the meeting ended with Mr Kildey telling him he would contact him when the perfect sketch of the project was ready.[27]
[26]Transcript 1.13.38, 1.13.40 and 3.5.25.
[27]Transcript 2.59.37.
Mr Sudarmana’s evidence of the 29 September 2006 meeting
Mr Sudarmana could not recall specific dates with certainty but identified meetings by the content of the discussions. He said that he attended three meetings all of which were on site. I identified those from the evidence as 29 September 2006, late November 2006 and 29 January 2007.[28] This meeting of 29 September was his first meeting but the second for Mr Yasaputra. It was Mr Sudarmana’s first contact with Mr Kildey. His recollection was that the following matters were discussed[29]:
[28]Transcript 3.3.50, 3.5.35 and 3.8.25.
[29]Transcript 3.4.10.
(a) he said Mr Kildey wanted to know what the defendant wanted to build and what its budget was. He said Mr Yasaputra was then concerned with the detail of the building. Mr Sudarmana’s only concern was the accommodation because that would dictate the cash flow;
(b) he said he emphasised to Mr Kildey that his only concern was accommodation for the guest floor and the amount of the defendant’s budget which was between $700,000 and $800,000. He said he emphasized that the defendant needed accommodation for 30 people and that $800,000 was the maximum budget.
(c) In response to being told of the budget between $600,000 and $800,000 according to Mr Sudarmana, Mr Kildey said he could not give an answer at that time but would work out the actual amount for the construction. He said he did not say that he was going to do a drawing or that he was going to do a lot of things involving the project. All he said was that he would come back to the defendant with a figure hopefully closest to its budget.
(d) He recalls Mr Kildey taking photographs and having a book regarding fees which he asked the defendant’s representatives to read. According to Mr Sudarmana he said something to the effect of “Please read. This is the typical Australian architect’s fees or commissions, charges.” Apart from that he said that there was no mention about the plaintiff’s fees.
It was not quite clear precisely what budget Mr Sudarmana had in mind as he variously referred to the budget being between $700,000 and $800,000 with a maximum of $800,000 but that a range of $700,000 to $800,000 was given to Mr Kildey. Later he said that the budget was between $600,000 and $800,000.[30] The point he made however was that he being the Treasurer was “a finance guy and had to stick with the budget he was given”.
[30]Transcript 3.4.15-33.
End of 29 September 2006 meeting
Subsequent to the second meeting on 29 September 2006 Mr Kildey sent to the defendant a letter dated 6 October 2006 addressed to Mr Yasaputra enclosing a copy of a Client and Architect Agreement (Agreement) completed with all the details of the project.[31] The letter counselled Mr Yasaputra to be completely satisfied that the plaintiff had correctly understood and described the defendant’s requirements and that he understood the schedule of professional fees in Schedule 6 to that agreement and invited him to telephone Mr Kildey to discuss any aspect of the agreement which may be of concern to him. The letter also pointed out that the agreement set out four stages of professional services to be provided by the plaintiff which are set out in Schedule 2 to the agreement and are the Schematic design, Detailed design, Documentation and Contract administration. The letter then asked that the agreement be completed by the defendant in the highlighted sections, executed and one copy returned to the plaintiff and the other retained by the defendant.
[31]Exhibit 6.
Importantly, that letter confirmed the following matters discussed with Mr Yasaputra and Mr Sudarmana at the 29 September meeting:-
(a) That the plaintiff would obtain a quotation for the surveying of the property;
(b) That the defendant would like the opportunity also of obtaining a survey quote;
(c) The agreement reached that the plaintiff would detail the services to be provided by any surveyor asked to quote so that they would be quoting for the same services. That was subsequently done[32] and forwarded to the defendant on 6 October.[33] He subsequently obtained a quotation from a surveyor Landmark Consulting.[34]
(d) Enclosed the schedule of survey services referred to in (c) to be provided to the church’s surveyor.
[32]Exhibit 8.
[33]Exhibit 6, second last line, page ??
[34]Exhibit 9.
The letter explained that the enclosed Architect Agreement recorded the nature of the services the defendant wished the plaintiff to provide. It also recorded the respective responsibilities of the plaintiff and defendant in relation to the provision of those services and payment for them and explained that the project description in Schedule 1 was taken from notes taken by Mr Kildey at the 29 September 2006 meeting.
That letter further advised the defendant that it would also be necessary to engage the services of other professional consultants namely:-
·landscape architect;
·geotechnical consultant (soil tests);
·structural engineer;
·hydraulic consultant;
·mechanical and electrical consultants;
·possibly an acoustic consultant
The letter concluded with a request for the return of the executed fee agreement and instructions to proceed with the preparation of the Schematic design for the project.
After receipt of that letter Mr Yasaputra telephoned Mr Kildey requesting plans to be taken to the defendant’s board for discussion. Mr Kildey told him that he would commence to prepare the Schematic design. He did that and Mr Yasaputra collected that Schematic design later in October.[35]
[35]Transcript 1.19.5, 1.26.55, 1.27.1-10.
The Architect Agreement enclosed in the 6 October letter set out in Schedule 1 the project description. Schedule 2 detailed the four stages of the project above outlined, and Schedule 4 detailed the specialist consultancy services above referred to. Schedule 6, Item 1 dealt with the basis of charging fees and the four stages were again set out with three boxes alongside each stage under the headings “Percentage, Lump Sum, and Hourly Rate” being the alternative basis of charging. Alongside each of the four stages a cross had been put in each box under the hearing “Percentage” indicating that was the basis of charge of the three options available. Schedule 6, Item 2 set out the Percentage fees and recorded that they would be 10 per cent of the cost of building work. Again the four stages of the development were set out with an apportionment of that 10 per cent against each stage as follows:-
Schematic design 25 per cent
Developed design 25 per cent
Documentation 35 per cent
Contract Administration 15 per centTotal fee 100 per cent
Item 4 then set out certain hourly rates. On the face of the documents the hourly rates would appear superfluous given that that basis of charge was not chosen by the plaintiff. Mr Kildey explained that the hourly rates are relevant if, once the project work was done anything was added subsequently or anything was raised and needed to be looked at, whether during the building or in relation to a dispute between the client and the builder.[36] The contract did not specify that purpose of the chargeable hours.
[36]Transcript 1.20.58, 1.21.7.
Mr Kildey explained what was involved in the Schematic design stage. He explained that it was a broad form of design endeavouring to incorporate the client’s requirements involving ascertaining the sizes of the buildings, making sure the proposal was going to function, that is how it was going to be administered, how people would get access to it, whether there was enough room to ensure the accommodation could be split up on to two floors, whether there was enough room for class rooms and dining areas, would it be possible to provide a kitchen that would work, was that kitchen to be one which the students were catered for or alternatively where they would simply make occasional meals themselves.[37] Mr Kildey explained that the real architectural professional service involved the conception of the plan.[38] Upon completion, the two schematic plans[39] were collected by Mr Yasaputra from the plaintiff’s office.[40]
End of 29 September 2006 meeting
THIRD MEETING – LATE NOVEMBER 2006
[37]Transcript 1.26.30, 1.27.30-50.
[38]Transcript 1.28.15.
[39]Exhibit 7.
[40]Transcript 1.29.25, 2.74.35.
Evidence of Mr Kildey of November 2006 meeting
Following a telephone call from Mr Yasaputra to arrange a further meeting, Mr Kildey met him, Mr Sudarmana and other representatives of the defendant on site in the late afternoon in late November. He said the schematic plan (Exhibit 7) was discussed at length.
According to Mr Kildey the plaintiff was asked to make alterations to the plan including moving the kitchen out further so that it could be used for dual purposes, to re-name rooms and move the laundries around. These changes did not alter the relationship between the buildings but changed their function quite a lot.[41]
[41]Transcript 1.31.45.60, 1.32.15.
There was a discussion of materials particularly for the floors as to whether they would be concrete or timber floors with Mr Kildey pointing out that it was a little early to be talking of that issue before the actual form of the building was finally known.
Mr Kildey was asked to prepare a preliminary estimate of the cost of the whole project.[42]
[42]Transcript 1.31-32.
Mr Yasaputra’s evidence of November 2006 meeting
Mr Yasaputra said that at this meeting Mr Kildey produced a costing of $1.8 million which is at odds with Mr Kildey’s evidence that he was only asked to produce a costing at this meeting and provided it at the next (fourth) meeting on 29 January 2007.[43] Mr Yasaputra said there was further discussion about the defendant’s budget and he and Mr Sudarmana quoted their budget at $800,000 to which Mr Kildey, again, made no response.[44] According to Mr Yasaputra the plans were not perfect and a lot of things needed to be revised. It was not what the defendant wanted. He said he required 30 rooms or probably 25 to 30 rooms to generate the money the church required and the sketch provided by the plaintiff only had 15. When asked about the alterations said by Mr Kildey to have been requested at that meeting, Mr Yasaputra said he could not remember any request to relocate the kitchen, to provide separate rooms for the library and lounge on the ground floor. He disagreed that the plaintiff was asked to relocate the laundry and consider the installation of a water tank. Mr Kildey did not mention in examination-in-chief the provision of separate rooms for library and lounge on the ground floor although he did refer to the re-naming of rooms.[45]
[43]Transcript 2.59.50, 1.32.50, 1.34.1.
[44]Transcript 2.59.15-25.
[45]Transcript 1.31.55
Mr Yasaputra did agree in cross-examination that Mr Kildey was requested to prepare a cost estimate for the whole project[46] which is at odds with his earlier evidence that Mr Kildey provided the cost estimate of $1.8 million which was discussed at this meeting.
[46]Transcript 2.76.10.
Evidence of Mr Sudarmana of November 2006 meeting
Mr Sudarmana’s recollection of this meeting was that Mr Kildey brought along his drawings and explained everything. Mr Sudarmana said he looked at the plans only from a distance because it was Mr Yasaputra’s responsibility to check the details. Mr Sudarmana said he was concentrating on the number of accommodation spaces because the cashflow from the rental of the rooms was important. He said that the drawings showed only five rooms on top and five on the ground floor which is not what the defendant had asked for.[47]
[47]Transcript 3.6.
As with Mr Yasaputra, Mr Sudarmana said, contrary to the evidence of Mr Kildey, that there was a discussion about the cost estimate of $1.8 million which Mr Kildey brought to the meeting. He said that he told Mr Kildey he was “the finance guy” and said he had a budget of $700,000 to $800,000 and rhetorically asked Mr Kildey how he could talk to his board about costings of $1.8 million. He said Mr Kildey’s response was that $800,000 was not an important issue and he kept asking Mr Yasaputra and Mr Sudarmana why the defendant could not increase its budget because $1.8 million was the cost. Mr Sudarmana said that any increase could only involve a 10 per cent margin which would take the budget to $880,000.[48]
[48]Transcript 3.7.10-45.
On the issue of the number of rooms Mr Sudarmana said he asked Mr Kildey whether he could keep the accommodation at 30 people. Contrary to the evidence of Mr Yasaputra[49] who said the issue of fees was not discussed, and the evidence of Mr Kildey[50] who did not mention fee discussion, Mr Sudarmana said that architect’s fees were discussed towards the end of the meeting.[51] He said that Mr Kildey asked him whether the fee agreement he had given to the defendant had been signed. Mr Sudarmana said he was looking at Mr Kildey in awe and said to him:-
“I not normally sign anything when we don’t come up with such an agreement between us, what we want to do about it, and even that my principle is that I have to know the people that I work with, whether we can work with the character. We are building a relationship, whether we can trust, you know and also we have to come to an agreement with the main thing between the purport? … and what we need for the construction.”
[49]Transcript 2.60.28.
[50]Transcript 1.31.
[51]Transcript 3.8.1.
End of November 2006 meeting
Subsequent to this third meeting of late November 2006 Mr Kildey said he went back to the design process to incorporate the changes discussed and to look at the type of accommodation as requested of him at the meeting. He looked at such things as where the windows could be located, car parking in the context of an increase in the number of rooms to avoid any Council requirement of increased car parking.[52]
FOURTH MEETING – 29 JANUARY 2007
[52]Transcript 1.33.1-40.
Evidence of Mr Kildey of 29 January 2007 meeting
The next meeting of the parties was on site on 29 January 2007 and according to Mr Kildey the same people who attended the previous meeting attended. He said one of the main purposes of the meeting was to provide the updated plans and the preliminary cost estimate. He said, and Mr Yasaputra agreed,[53] they were provided at the meeting, the preliminary development cost estimate being Exhibit 10 and the revised plan Exhibit 11. The cost estimate was $1,894,000. Those costs were arrived at by calculating the size of the area of the building and applying costing rates of material provided to the plaintiff on a monthly basis by a quantity surveyor.[54]
[53]Transcript 1.34.1.
[54]Transcript 1.34.1-30.
There was discussion on the revised schematic plan and Mr Kildey took notes of the matters discussed and the following day tidied those notes up into a more logical format which is Exhibit 12. Those notes read as follows:
“BETHANY 30 Jan 2007
Notes from Meeting with Board members 29 Jan 07 – G Kildey
1. Driveway: relocate entry to south west corner.
2. Recreation: delete seating.
3. Stop administration: increase size of office
(a) store
(b) amenities
4.Accommodation: (a) relocate stairs;
(b) delete lounge to first floor;
(c) increase rooms on first floor to 10;(d) show each room on both levels as single bedroom only
5.Prepare estimates: (a) for purposes of Prelodgment
Meeting - Lodgement fees
- Architect’s fees
- Time frame (b) for purpose of DEA
- Lodgement fees
- Architect’s fees
- Acoustic consultant
(c) for (Certification)Q.S. Estimate
- Certificate fees
- Architects, geotechnical
- Prelim engineering.”
Mr Kildey said this meeting was more concentrated on the development but he asked where his signed contract was to which the response received from the defendant’s representatives (the precise one not identified) was “we’ll get it to you”. The explanation given as to why it had not by then been given to him was that all the board members needed to read it.[55]
[55]Transcript 1.37.1-20.
Mr Kildey said there was a lot of discussion about the cost of the building, whether different materials could be used, whether the construction could be staged and if so, the extent of what could be done in varying stages.[56]
[56]Transcript 1.35.45-53.
Mr Kildey said that he saw others at the meeting taking notes.[57] This is consistent with the evidence of Mr Sudarmana who said that he took some notes at the meetings he attended although he described them as “hardly anything” and said he did not keep them but rather threw them in a bin.[58] He said that of the three meetings he attended the defendant’s secretary also attended and he observed the secretary taking notes.[59] No such notes were discussed or put in evidence.
[57]Transcript 1.35.58.
[58]Transcript 3.37.20-60?, 3.38.1-5.
[59]Transcript 3.38.15-35.
Evidence of Mr Yasaputra of 29 January 2007 meeting
Mr Yasaputra attended this meeting and said the others present were Mr Sudarmana, Mr Yojan Phan, Paster Heins and a Mr Henry Louw. Mr Phan was a board member but Mr Louw was not.[60]
[60]Transcript 3.62.35-50.
Mr Yasaputra said that Mr Kildey brought more plans to the meeting but he said they did not really evidence any changes but just divided the room he did not identify. He said that Mr Kildey gave a suggestion to put two students in each room so that it could accommodate 30 students.[61]
[61]Transcript 2.63.1.
Mr Yasaputra was asked about the amendments to the plans said by Mr Kildey to have been requested by the defendants at the January 2007 meeting and recorded in Mr Kildey’s notes of that meeting Exhibit 12.
This was the relevant exchange[62]:-
[62]Transcript 2.77-78.
“ Question: And in fact at that meeting you requested or
instructed Mr Kildey to make a number of amendments to the plan, including relocating the vehicle entry to the south west corner of the property. Agree, disagree, can’t remember?
Answer: Can’t remember.
Question: To delete parking in the recreation hall?
Answer: Sorry I can’t remember.
Question:To increase the size of the office, storeroom and
amenities?
Answer: Can’t remember sir.
Question:To relocate stairs and delete a loungeroom on the
first floor of the accommodation building?
Answer: Can’t remember.
Question:To increase the number of bedrooms on the first floor to ten?
Answer: Yes.
Question:And without changing the size of the bedrooms, to show each bedroom on both levels of the accommodation building as single room only to comply with Council car parking requirements?
Answer: Can you repeat again please?
Question:To show the bedrooms as being single bed only to affect the number of carparks that would be required by Council for the building?
Answer:This is the idea about how this project can be lodged in the – can have permission in the lodgement.
Question:But do you agree that you asked Mr Kildey to undertake that exercise to show?
Answer: I initiated.
Question: Sorry?
Answer: Did you ask that I the initiator of the ---
Question: Did you instruct Mr Kildey?
Answer: No.
Question:Did anyone on behalf of the defendant instruct Mr Kildey to …?
Answer: I don’t recall.
Question: You don’t recall?
Answer: No.”
Mr Yasaputra agreed he had instructed Mr Kildey to tell him the costs of pre-lodgement including the costs to get to the pre-lodgement meeting with the Council.[63]
[63]Transcript 2.78.35.
He said it was Mr Kildey’s idea, not the defendant’s, that the works be staged so that they would not all have to be done at once. He said the estimate was over twice the budget of the defendant and that the project was something that just could not work.[64]
[64]Transcript 2.76.35-6, 2.77.1-5.
Mr Yasaputra also said that, at that meeting, Mr Kildey rendered an invoice for $40,000 for his architect’s fees.[65] No mention of this invoice was made by Mr Kildey and no such invoice was put in evidence. To this point in the chronology there had been no mention of any fee of $40,000. To understand this issue of the $40,000 fee invoice it is important to understand the inconsistency between the evidence of Mr Kildey and Mr Yasaputra as to the meeting when the costing of $1.6 million was given to the defendant’s representative. Mr Kildey said, and as I have said above Mr Yasaputra agreed, the cost estimate given at this 29 January 2007 meeting was the estimate of $1.894 million (Exhibit 10).[66] Mr Yasaputra said that Mr Kildey mentioned the fee of $1.6 million at this meeting.[67] However according to Mr Kildey the figure of $1.6 million, or more precisely $1,628,650, first materialized in the written preliminary development estimate enclosed in a letter dated 6 February 2007[68] a week after this meeting. I don’t accept that figure was discussed at this meeting.
[65]Transcript 2.63.15.
[66]Transcript 1.34.1.
[67]Transcript 2.63.20-25.
[68]Exhibit 17.
The client fee agreement (Exhibit 6) sent by the plaintiff to the defendant evidences that the plaintiff was to charge 10 per cent of the project cost and that 25 per cent of that fee was due at the first stage. That figure of 25 per cent of $1,628,650 ($40,716.25) closely equates to $40,000. But, as I have said, the figure of $1,628,650 was not known to Mr Yasaputra at the date of this meeting so I don’t understand how there could have been a discussion about fees of $40,000 or the rendering by the plaintiff of an invoice for that amount based upon a figure not yet calculated or made known to the defendant. I don’t accept that occurred.
Evidence of Mr Sudarmana of 29 January 2007 meeting
Mr Sudarmana attended that meeting and said that the plan which Mr Kildey brought to the meeting was exactly the same plan as he had earlier produced.[69] As to the costing he said that Mr Kildey produced a cost estimate of $1.6 million rather than the $1.8 million Mr Yasaputra and Mr Kildey recalled, and he said he told Mr Kildey that he would just stick to his budget of $880,000. He also said as did Mr Yasaputra that it was Mr Kildey who had suggested that the building could be done in modules (staged) but that the total cost would still be $1.6 million.
[69]Transcript 3.8.45.
When asked if the issue of architect’s fees was discussed, Mr Sudarmana said that Mr Kildey merely mentioned a figure of 10 to 13 per cent of the project cost but did not give details. That may seem an odd statement against the background of the fee agreement (Exhibit 6) sent to the defendant on 6 October 2006 but it makes sense when one understands that Mr Sudarmana, although a member of the board and although the treasurer to that board, had not seen Exhibit 6 before he gave evidence.[70] According to him, Mr Yasaputra mentioned the document but did not show it to him.
[70]Transcript 3.13.35-45.
At the meeting in the same context of architect’s fees, Mr Sudarmana said he raised the figure of $40,000 which I have dealt with in relation to Mr Yasaputra’s evidence.[71] He said that he initiated the conversation about fees because he wanted to know what Mr Kildey was going to charge. He said that in response Mr Kildey mentioned the figure of $40,000. For the same reasons I have outlined in relation to Mr Yasaputra’s evidence, I don’t accept that Mr Kildey raised the figure of $40,000 or rendered an invoice for that amount.
[71]Transcript 3.10.28.
That was the last contact Mr Sudarmana had with Mr Kildey.[72]
[72]Transcript 3.11.50.
End of 29 January 2007 meeting
Mr Kildey said that subsequent to the 29 January 2007 meeting the plaintiff attended to the action items in Exhibit 12 including an updated costs estimated (Exhibit 14) in the sum of $1,574,000. That was never sent to the clients because although it was prepared and dated 6 February 2007, before it could be sent to the defendant Mr Kildey received a text message from Mr Yasaputra on 12 February 2007[73] in these words:-
“Mr Kildey this is P.s. hanny of Bethany Church; I would like to add one kitchen in the Sports Hall as a café kitchen type. So there are two kitchens now, one for students at the back (as it is) and one for the church. TQ.”
[73]Exhibit 13.
The plaintiff wrote to the defendant by letter dated 16 February 2007 providing the information it was requested to do at the January meeting.[74] One of the enclosures to that letter was the abovementioned revised preliminary development estimate of the cost of construction of $1,628,650. The letter outlined the architect’s fees for the schematic design stage at $40,716.25 which is 25 per cent of 10 per cent of that figure calculated in accordance with the fee agreement sent to the defendant on 6 October 2006. That letter, in the final paragraph, again requested the return of the Agreement sent to the defendant on 6 October 2006.
FIFTH MEETING - 20 MARCH 2007
[74]See Exhibits 15, 16 and 17.
Evidence of Mr Kildey of 20 March 2007 meeting
Subsequently Mr Kildey arranged a further meeting on site on 20 March 2007.[75] At the request of the defendant Mr Kildey had, since the last meeting in January, proceeded to create further plans showing elevations and sections which plans were never in the end result finalized.[76] He explained that there was a fair bit more work involved to create those plans and they differed completely from anything the plaintiff had done before.[77] By then Mr Yasaputra had given Mr Kildey a plan prepared by the church’s surveyor, Mr C A Wincop, land surveyor dated 24 November 2006 which formed the basis of these plans.[78]
[75]Transcript 1.50.45.
[76]Transcript 1.45.40; Exhibit 18.
[77]Transcript 1.47.1.
[78]Transcript 1.48.30.
At the 20 March 2007 site meeting the earlier attendees attended as well as a Mr Louw who Mr Kildey said he had not recalled meeting earlier. Quite a number of aspects of the project were discussed and Mr Kildey said it was at this meeting that for the first time the question of his fees was raised. They were questioned when he asked again where the signed contract was. It was, according to Mr Kildey, Mr Louw the non-board who queried his fees about half way through the meeting. Mr Kildey said that he asked where his contract was and said he needed to get it signed, that he had done a lot of work and needed to get some fees for that work. It was at that point that Mr Louw raised the need for Mr Kildey’s fees to be compared with the fees for of which other architects could charge.[79] By this stage, the defendant was in receipt of Exhibit 17, the letter of 16 February 2007 particularizing the plaintiff’s fees stages 1 and 2 cost $40,716.25 each (25% of 10% of $1,628,650). Both prior and subsequent to the raising of this issue the parties continued to discuss the project and Mr Kildey said he was left with the impression the defendant wanted the work to continue to prepare to go to the pre-lodgement meeting with Council and he proceeded accordingly.
[79]Transcript 1.51.10 – 20.
Evidence of Mr Yasaputra of 20 March 2007 meeting
Mr Yasaputra said that at this meeting he was still working to see whether the project cost could be decreased from $1.6 million to close to the defendant’s budget.[80] He said he asked Mr Kildey to reduce his fees from $40,000 and that although he understood Mr Kildey was providing professional services the figure of $40,000 was a little too much.[81] He said he understood that the defendant had to pay for those services but he was shocked by the figure of $40,000. This $40,000 figure referred to by Mr Yasaputra is, in my view, likely to be referring to the figure of $41,716.25 in the 16 February 2007 letter. When it was put to him that the defendant had been in possession of the fee agreement since October 2006 which set out the basis of charge this exchange took place:
[80]Transcript 2.81.5.
[81]Transcript 2.81.
“But we haven’t reached agreement that we will work with Australia-Architect Australia. Because the sketch that they gave to us still in revision and still revision and until we reach an agreement. Yes I want to …
Question: Reach an agreement about what?
…
About what we want and that what we get.”
Later this exchange too place:-[82]
[82]Transcript 2.82.10.
“Question:You were working on the basis that Mr Kildey was to be paid for his professional services?
Answer:Yes. If that reach what we want, what we get he shall be paid.
Question:So he would only get paid if he gave you exactly what it is you wanted?
Answer:At that time yes. Because when I reach this – this – what you call it? The 40,000 one I just realised oh, you know.
Question:And so if it didn’t meet with your complete satisfaction you didn’t have to pay him anything?
Answer:We have to pay, but not as much as one. Because he work for us you know.
Question:And was there any conversation with Mr Kildey about the fact that the amount he might get paid would depend on your satisfaction with the work?
Answer:Say again?
Question:Was there a discussion with Mr Kildey where you said, we’re only going to pay you in accordance with our satisfaction with your work?
Answer:Oh, no.”
Mr Sudarmana did not attend this meeting.
Two days after the meeting on 20 March 2007,[83] Mr Yasaputra sent Mr Kildey another text message in these terms:-
“Mr Kelsey (sic), I think you need to break down the charges that you put in writing on the pre-lodgement stage. The number was over 40K, please adjust whatever that you thought is proper with your works in drawing the plan etc. Please make everyone happy in this pre elementary stage. TQ for making me easier to talk to so many people here. This is not one man project. Thanks for your understanding and considerations. PS Hanny.”
[83]Exhibit 20.
Subsequent to the 20 March meeting, Mr Kildey wrote to the defendant by letter dated 12 April 2007[84] offering to reduce the amount of fees payable at that time.[85] There may be some debate as to whether or not that offer achieved what Mr Kildey set out to achieve namely the reduction of the amount payable at that point rather than a reduction of the fees absolutely but it is unnecessary for me to determine that because the offer was never accepted.
[84]Exhibit 21.
[85]Exhibit 21.
SUBSEQUENT DISCUSSIONS RE PLAINTIFF’S FEES SUBSEQUENT TO 12 APRIL 2007
Mr Kildey said that subsequent to sending that letter of 12 April 2007 Mr Yasaputra arranged a meeting with him and with Mr Louw but in the result Mr Yasaputra did not attend that meeting.[86] Mr Yasaputra said he did attend.[87] The meeting lasted about half an hour and then subsequent to that Mr Kildey had two or three telephone conversations with Mr Louw. He made notes of those conversations.[88] I shall set out the complete note. I have inserted dates from the evidence from the relevant passages from the transcript. The note reads:-
[86]Transcript 1.54.20.
[87]Transcript 2.82.30.
[88]Exhibit 22.
“I rang Henry Lowe on Monday (25 June 2007 – Transcript 1.69.10) to advise that I required payment of the fees that are due. Henry said he would contact Pastor Hanny and the committee & get back to me. Henry rang back on Tuesday (26 June 2007) and advised that the church wished to terminate the agreement because they did not think they would be able to develop the property. They did not believe they would obtain approval from the BCC.
Henry said that the committee wanted to know how much I would now charge them. I advised that I had sent correspondence on 12 April 2007 which set out the fees which I was prepared to take at that time if the commission was ongoing.
Henry rang back on Wednesday (27 June 2007) and said the committee was prepared to pay me 10% of my fees which they believed would compensate me for the time I spent with them in meetings. The drawings were of no value to them. I advised Henry that I would not accept that but to avoid taking legal action if $15,000 + GST was paid today I would not take the matter any further.
Henry rang back at 3.20 pm on Wednesday (27 June 2007). I was not in however I returned his call at 3.40 when I returned to my office. He said the committee wanted to proceed with the application if they paid me $15,000. I advised Henry that the church had terminated the contract and I was not willing to work for an organisation that was not prepared to honour an agreement. Additionally I repeated to Henry that the $15,000 offer was a once only offer which he confirmed had been rejected.
I further advised Henry that the matter would now be placed in the hands of my lawyers and his response was that we will just have to respond to the lawyers.
These notes were made by me at 3.50 pm Wednesday 27 June 2007.
G Kildey”.
WITNESSES CREDIBILITY
I found Mr Kildey to be a frank and truthful witness who appeared to have a good recollection of events and who had kept appropriate notes of meetings on occasions. As to Mr Yasaputra I did not have the same confidence that he had a clear recollection of events. As the outline of his evidence above showed he had no recollection of some matters at some meetings yet on issues which had the capacity to advance the defendant’s case he was at times quite adamant as to what occurred. I refer to his insistence that he kept mentioning his Budget to Mr Kildey.
As to Mr Sudarmana I formed the impression that he did not really have any great personal recollection of the details of the three meetings in which he was involved and he relied on the evidence of others to refresh his memory. I found him an evasive witness who sought to promote the defendant’s case at any opportunity rather than answer the question. A good example is his questioning in relation to the taking of notes by him and the secretary at site meetings.[89] Another concerning feature of his evidence was that he had sat in court whilst evidence was given by Mr Kildey, Mr Simpson and Mr Yasaputra and had taken notes to “try to remember”.[90] He said that he took the notes of previous witnesses to try to understand what was actually happening at a given time and so that he could recall exactly what happened and to make sure that he could talk about what he exactly knew at that time. He said the other evidence reminded him on a step to step basis which would allow him to “explain exactly clearly”.[91]
[89]Transcript 3.19, 3.37.25 – 60, 3.38.1 – 35.
[90]Transcript 3.19.18.
[91]Transcript 3.19.120-35.
As to notes he took of Mr Yasaputra’s evidence he said he took notes to try “to get the memory to confirm everything that I understand and I remember that becomes a confirmation. Oh, that’s right, that that’s right ‘that point was there, that point was not there. It’s only to help me to recall, sir just to confirm what steps at – what I can understand, what I was involved.’ ”[92]
Of course there is nothing objectionable in Mr Sudarmana sitting and listening to the evidence of the plaintiff’s witnesses but to sit in court whilst Mr Yasaputra gave evidence when he, Mr Sudarmana, was later to give evidence on the same matters is unacceptable. I do not know whether, and if so to what extent, his evidence was his own recollection or a recollection taken from notes made of Mr Yasaputra’s evidence.
[92]Transcript 3.20. 10-30
Another aspect of the evidence of Mr Sudarmana which I found difficult to accept was the fact that he insisted that he only focussed on one issue at the three meetings, namely the question of the accommodation because of its importance to cash flow considerations. That is understandable. However he was the treasurer to the defendant’s board and was responsible for the financial aspects of the project. Given that, it is unusual to me that he did not seek to acquaint himself with the details of the fee agreement which he had been told by Mr Yasaputra had been sent to the defendant. On that important issue of fees, as I have above outlined, he had never seen Exhibit 6 the fee agreement until he gave evidence. I find those matters difficult to believe and I do not accept his evidence of such limited involvement in the details of planned changes and his ignorance of the content of the Agreement sent on 6 October 2006.
On the defendant’s case generally there was another feature which was concerning and that was the reference by Mr Sudarmana to the taking of notes by him and the secretary, Pastor Hein Arianto. None of those notes were disclosed[93] or put in evidence and I would have thought that if they assisted the defendant by recording its version of events they would have assisted the court. Further, the evidence was that the secretary kept minutes of the defendant’s board meetings but again none of those were disclosed or tendered. An inference is open to me that the notes and minutes would not have assisted the defendant’s case. I draw that inference in relation to the notes of meetings taken by the secretary and board minutes. I accept that Mr Sudarmana destroyed his notes of meetings.
[93]Exhibit 29.
Overall I was not impressed with either Mr Yasaputra or Mr Sudarmana as reliable witnesses. Where there is conflict between their evidence and that of Mr Kildey I prefer that of Mr Kildey.
FORMATION OF CONTRACT
The defendant denies a contract ever came into existence and raises various matters. Firstly it says that Mr Yasaputra did not have power to bind the defendant and it relies in that regard on the Board of Architects of Queensland Code of Practice referred to in Regulation 18A of The Architects Regulation 2003 enacted pursuant to section 108 of The Architects Act2002. That regulation approves the code of practice made by the Board of Architects of Queensland on 23 November 2004. Section 108(1) of the Act provides for the Board to make a code of practice to provide guidance to architects as to appropriate conduct or practice.
Section 5 of the Code of Practice sets out its objects which are to:-
(a) ensure that architects provide architectural services in a professional and competent way;
(b) provide guidance to architects as to:-
(i) appropriate professional conduct and practice;
(ii) a reasonable standard of conduct for architects; and
(iii) competent conduct in the practice of architecture;
(c) protect consumers of architectural services and ensure that they can fully inform themselves about the skills of architects and the nature of the architectural services to be performed;
(d) promote and maintain high standards in the provision of services by architects; and
(e) promote public confidence in the architectural services provided by architects.
Paragraph 14 of the Code provides:-
“Where an architect intends to provide services to a client or prospective client, the architect must enter into an agreement with the client in writing where the professional fees and costs or anticipated professional fees and costs for provision of the services exceed $1500.”
Paragraph J of the Explanatory Notes to the Code provides:-
“Failure to comply with the Code may amount to ‘unsatisfactory professional conduct’ defined in the Act as:-
(a) conduct that is of a lesser standard than that which might reasonably be expected of the architect by the public or the architect’s professional peers;
(b) conduct that demonstrates incompetence or a lack of adequate knowledge, skill, judgment or care in the practice of architecture;
(c) misconduct in a professional respect;
(d) fraudulent or dishonest behaviour in the practice of architecture; or
(e) other improper or unethical conduct.”
Whilst Object 5(c) of the Code does speak of protecting consumers of architectural services, nowhere in the Act, Regulation or Code of Conduct is there anything I could find or which was referred to me to support an argument that the Code is intended to regulate or effect contractual relations between architects and their clients. To my mind the Codes is one which is common to all professions, namely a reduction to writing of appropriate standards expected to be observed by members of the profession. Breach of those standards may visit a disciplinary proceeding upon a member. There is no support in the Code of Conduct, Act or Regulation for the defendant’s proposition, as I understand it, that as a matter of contract law, all contracts with architects must be in writing if the fees are to be over $1500.
The defendant relied upon the necessity for writing which I have just rejected, to then rely on section 28 of the Association’s Incorporation Act 1981which provides:-
“28. Contracts
(1)
Contracts entered into by an incorporated association shall
be made as follows:-
(a) A contract which, if made between private persons,
would be required by law to be in writing and under
seal shall be made in writing under the common
seal of the incorporated association;(b) A contract which, if made between private persons,
would be required by law to be in writing signed by
the parties to be charged therewith shall be made in
writing signed by any person acting under the express
or implied authority of the incorporated association;
(c) A contract which, if made between private persons
would be valid in law although made by verbal
agreement, and not reduced into writing, may be
made by verbal agreement on behalf of the
incorporated association by any person acting under
authority at the incorporated association.”
The defendant church is an incorporated association.
From the premise of the requirement of the contract for fees to be in writing, the defendant then sought to rely upon section 28(b) as being a contract required by law to be in writing thus requiring the contract with the defendant to be in writing. I reject that argument. There is no requirement at law for the relevant fee contract to be in writing.
In denying the existence of the fee agreement the defendant alleged that the plaintiff knew that it sought assistance from the plaintiff to provide obligation free quotes, drawings and design suggestions and that the defendant would not enter into an agreement to engage the plaintiff until the preliminary plans and design were finalized. It also alleged that Mr Yasaputra constantly advised the plaintiff at every meeting that the defendant’s budget was $800,000 and that it was unable to proceed if the estimated cost exceeded that amount.[94] I do not accept that the defendant told the plaintiff that it had a budget of $800,000 or any other figure. What I do accept is that the defendant indicated to Mr Kildey as Mr Kildey said in evidence that they were hoping to spend around $900,000 to which Mr Kildey replied spontaneously that it would not happen for that figure. The defendant led him to believe the necessary funds would come from contributions paid and money the church would raise. The defendant had numerous opportunities to convey to the plaintiff that it did not intend to proceed with the project because of the costings and insist that work cease but it did not do so. Rather it continued to give instructions to the plaintiff and allow the plaintiff to carry out work for it in furtherance of the project.
[94]Further Amended Defence paragraphs 2 and 3.
As to the suggestion that Mr Kildey and the plaintiff continued to do all the work carried out on the basis that it would all be gratuitous until it reached the stage where preliminary plans and design was finalized, I find this a fanciful proposition and reject it. It is inconsistent with the evidence given by Mr Yasaputra who agreed he knew the plaintiff was providing professional services, and that the defendant had to pay but it was the size of those fees which troubled him.
To accept that proposition would mean that Mr Kildey, a successful, experienced and very busy architect at the relevant time late 2006, with no previous association with the defendant or formal introduction to the defendant by any person known to the plaintiff, would embark upon an arrangement to carry out all the work required to reach acceptable preliminary plans and design stage in the hope that at that point the defendant might enter into a fee agreement. That is to my mind commercially unrealistic and implausible as is the allegation that all the work done by the plaintiff was done on a gratuitous basis.[95] I reject it.
[95]Further Amended Defence paragraph 5.
The defendant then says that, in the alternative, if the agreement alleged by the plaintiff is found to have been entered into, the Fair Trading Act 1989 (Qld) and the Trade Practices Act 1974 (Cth) apply because the plaintiff engaged in misleading or deceptive conduct and thereby induced the defendant to enter into the agreement under the belief that the work was to be done on a gratuitous basis thereby acting in an unconscionable manner.[96] That argument was developed to include a further alleged misrepresentation that the inclusion in the agreement of a reference to hourly rates as well as a percentage basis for charging was reckless, reflecting a carefree approach to fees by Mr Kildey. I have already rejected the allegation that the defendant agreed at any stage, to work on a gratuitous basis. As to the inclusion of the hourly rates in the agreement, that to my mind does not constitute any form of misrepresentation. Schedule 6 Item 1 of the Agreement (Exhibit 6) could not be plainer as to the basis upon which fees were to be charged, that is on a percentage basis. Schedule 6 Item 2 then goes on to specify the relevant percentages for the four stages of the project. I reject any suggestion that the inclusion of the plaintiff’s hourly rates in Item 4 of Schedule 6 amounted to a misrepresentation. On a plain reading of the agreement the defendant would have been well aware of the basis of the charge as being a percentage of the estimated cost of the project.
[96]Further Amended Defence paragraph 19.
I am satisfied that the defendant was at all times aware of the plaintiff’s rate of charge and that it entered into an agreement upon the terms of the fee agreement[97] as alleged by the plaintiff. I find that Mr Yasaputra at all relevant times had the authority of the defendant to enter into the Agreement and to instruct the plaintiff in relation to the project as he did. The contract was constituted by that fee agreement and the conduct of the plaintiff in instructing the plaintiff commence the work the subject of the Agreement October 2006[98]. The plaintiff is entitled to be paid for the work performed on the basis of the percentages set out in that agreement.
[97]Exhibit 6.
[98]Transcript 1.27.1 – 10.
QUANTUM
It remains to determine how much is owing to the plaintiff. The plaintiff called Mr Simpson an experienced architect, who provided a report[99] . He has practised as an architect since 1973 and for a period of over 40 years he has been responsible for the design documentation and contract administration of many large building projects[100]. After reviewing all the relevant documentation he considered the project to be one of a complex nature and considered that the work undertaken by the plaintiff constituted 100 per cent of the first stage (schematic design) of the four stages of the project and 65 per cent of Stage 2 (detailed design).
[99]Exhibit 25.
[100]Exhibit 25 paragraph 3 Curriculum Vitae.
The defendant called Mr Karrasch, also an experienced architect who also prepared a report.[101] As I understand his experience it is different from that of Mr Simpson in that Mr Karrasch had 38 years as inspector of construction and contract or administrator of compliant Government, commercial and domestic buildings and he is still involved in that and has for 22 years conducted an independent consulting architect practise as a forensic architect identifying building defects and causes. His report was predicated on an agreed fixed construction budget of $800,000, that the project was not a complex one but rather quite simple and that the appropriate fee percentage of the total budget costs was 8 per cent not 10 per cent charged by the plaintiff. He analysed the work he understood the plaintiff had undertaken from the material supplied to him and concluded that the total architectural services completed by the plaintiff represented 7.275 per cent of Stage 1 and 7.5 per cent of Stage 2 so that the total architectural service amounted to 14.775 per cent. He then ran that figure over the 8 per cent of budget he considered appropriate, arriving at a figure of 1.182 of the total budget of $800,000 totalling $9,456. He then reduced that by a figure of 15 per cent representing the overheads and profit of the plaintiff’s practice leaving a net figure of $8,222 exclusive of GST.
[101]Exhibit (26)
Proceeding on the basis that the average charge out rate for a draftsman at that time in the profession was between $70 and $90 per hour depending on whether the draftsman was average or highly proficient, he calculated that the $8,222 represented 118 hours maximum for an average draftsman and 92 hours maximum for a highly proficient draftsman. Calculations excluded any time for the input of an architect. Mr Simpson gave evidence that the creating of drawings involved two different skills. One was the conceptualization by the architect of the project and the second was the draftsman translating that concept into drawing.[102] Mr Karrasch agreed that it was the role of an architect to bring his intellectual capacity to bear and that a draftsman’s role was quite different.[103] He conceded that he did not include any architect time in his calculation of $8,222 being his opinion of what the reasonable fees for the work done[104] were. He agreed that, based on the mid-range charge out rate of $200 per hour for an architect, there would have been no more than six hours of architectural time taken in the matter with the balance being technician time doing drawings.[105]
[102]Transcript 1.80.30.
[103]Transcript 2.43.15-30.
[104]Transcript 2.44.38.
[105]Transcript 2.45.1-10.
I found the evidence of Mr Karrasch a little academic and slightly unrealistic in his approach and outcome having regard to the evidence of the work done by the plaintiff on the project. I prefer the evidence of Mr Simpson who I regarded as having had more experience in design than Mr Karrasch. On the basis of Mr Simpson’s conclusions that the work performed by the plaintiff constituted 100 per cent of Stage 1 and 65 per cent of Stage 2, that translates to on the following:-
(a) Stage 1
25 per cent of 10 per cent of $1,628,650 $40,716.25
(b) Stage 2
65 per cent of 25 per cent of 10 per cent $35,465.55
Of $1,628,650_________
TOTAL $76,181.80
_________
I order that the defendant pay to the plaintiff its claim of $71,500 plus interest. As to interest, the plaintiff claimed 11 per cent from 14 July 2007 or interest under s. 47 of the Supreme Court Act 1995. It led no evidence on the issue of interest so I consider that it is appropriate that interest be calculated under s. 47 of the Act.
Under s.47 interest is payable from the date the cause of action arose to the date of judgment. As to the date when the cause of action arose the plaintiff claims interest from 14 July 2007. Mr Kildey’s evidence was that he rendered an invoice to the defendant[106] dated 28 November 2007. In cross-examination, Mr Stobie for the defendant showed and tendered an earlier invoice for that amount dated 25 June 2007. In Paragraph 10 of the Further Amended Statement of Claim, the plaintiff alleges forwarding that invoice dated 25 June 2007 on 2 July 2007. I intend calculating interest on the basis that the defendant did not receive the invoice of 25 June 2007 until 2 July 2007 as alleged.
[106]Exhibit 23
Under Schedule 6, Item 7 of the Fee Agreement, fees were due within 10 working days of rendering which means that the fees would have due and payable by the defendant from 3 July 2007 which would have been when the defendant received the 25 June invoice in the ordinary course of the post. Calculating 10 days from 3 July excluding that date rendered the fees due on 17 July 2007.
I consider the appropriate rate of interest to be 10 per cent and that is payable from 17 September 2007 to judgment, a total of 603 days. Interest at 10 per cent on $71,500 for 603 days is $11,812.
Accordingly, judgment will be entered for the plaintiff for $71,500 plus interest of $11,812, a total of $83,312.
As to costs, I order the defendant to pay the plaintiff’s costs on an indemnity basis from the commencement of proceedings to Judgment.
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