Townsville Constructions Pty Ltd v Williams
[2011] QCAT 166
•27 April 2011
| CITATION: | Townsville Constructions Pty Ltd v Williams and Williams [2011] QCAT 166 |
| PARTIES: | Townsville Constructions Pty Ltd |
| v | |
| Mr Edward John Williams and Mrs Vicki Williams |
| APPLICATION NUMBER: | BDL142-10 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 10 and 11 March 2011 |
| HEARD AT: | Townsville |
| DECISION OF: | Mr John Carey, Presiding Member Ms Joanne Browne, Member |
| DELIVERED ON: | 27 April 2011 |
| DELIVERED AT: | Townsville |
ORDERS MADE: | 1. The respondents pay the applicant the amount of $115,405.29 by 4.00pm on 25 May 2011. |
| CATCHWORDS: | Contracted services plus reasonable profit – whether unfair to the building owner to make an award – dispute as to builder’s margin, delivery of materials to site, hours charged for labour – whether contract is unenforceable for failure to comply with section 55(1) Domestic Building Contracts Act 2000, s 55 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr A J Hockings instructed by Roberts Nehmer McKee Lawyers |
| RESPONDENT: | Mr A W Collins instructed by Connolly Suthers Lawyers |
REASONS FOR DECISION
Introduction
Mr Edward Noel Horscroft, a director of Townsville Constructions Pty Ltd, was well known to Mr and Mrs Williams. Mr Horscroft and Mrs Williams in her capacity as Mactrac Pty Ltd had completed eleven (11) separate construction projects together. Mr Horscroft was in the course of completing the construction of a house at 51 Yarrawonga Drive, Townsville (“the site”) which would become the principal place of residence for Mr and Mrs Williams when this dispute arose. The essence of the dispute was whether Mr and Mrs Williams had been overcharged for labour (time taken for lunch breaks), whether materials claimed by Mr Horscroft to have been delivered to site were in fact delivered to site and the application of a builders margin (at 15%). Other issues relating to GST were resolved at the hearing.
Prior to construction of Mr and Mrs Williams house described by Mr Horscroft as a “luxurious mansion”, a written Master Builders Australia contract was signed and dated 22 September 2008 (“the contract”).[1] The contract was a cost plus contract and for the purposes of section 55(1) of the Domestic Building Contracts Act 2000 (“DBCA”). Mr Horscroft argues that due to the difficult site location (Castle Hill) the cost of the construction could not be reasonably calculated at the time of entering into the contract.
[1]See exhibit 15 (attachment).
The Application filed on 7 May 2010 seeks an order for payment of an amount owing by Mr and Mrs Williams in the sum of $191,156.38 under section 55(4) of the DBCA. At the hearing and in final written submissions a number of concessions were made by Mr Horscroft which narrowed the issues in dispute. These concessions included the cost per hour for foreman/labourer was inclusive of GST, some materials claimed by Mr Horscroft were deducted and the builder’s margin of 15% was to be applied on GST exclusive amounts. The amount now claimed by Townsville Constructions Pty Ltd is $159,267.82 calculated as follows:[2]
Value of Contracted Services $ 2,580,999.69
Less payment received $ 2,421,731.87[2]See Application filed 7 May 2010 and Applicant’s Final Submissions dated 28 March 2011.
Amount claimed $ 159,267.82
Mr and Mrs Williams filed a Counter-Application on 11 June 2010 on the basis that they were overcharged for materials, wages and as a result of the miscalculation of the builder’s margin (15%). Mr and Mrs Williams claim that Townsville Constructions Pty Ltd owe them the amount of $483,546.85 due to those over-charges.
Documents were tendered at the hearing and witnesses were called to give evidence and were cross-examined under oath including the expert evidence given by Mr Troy Matthew Popham on behalf of Townsville Constructions Pty Ltd and Mr Laurence Bruce Coutts on behalf of Mr and Mrs Williams. The experts have also produced a joint report following an expert’s conclave on 30 August 2010.
Oral submissions were made at the hearing in relation to a further expert’s report of Mr Ian Jessup[3] sought to be tendered by Mr Collins of Counsel and whether Mr Jessup could give evidence on behalf of Mr and Mrs Williams. The Tribunal directed at the hearing that Mr Jessup would not be permitted to give evidence due to the lateness of the report and the fact that Mr Jessup had not participated in the expert’s conclave as required by the Queensland Civil and Administrative Tribunal (“QCAT”) Practice Direction number 1 of 2009. Mr Hockings of Counsel for Townsville Constructions Pty Ltd did not object to the report being admitted into evidence on the basis that it would be of assistance to the Tribunal as it provided a comprehensive summary of the issues in dispute, in particular whether the invoices issued by Mr Horscroft relate to the works performed at the site.
[3]Dated 7 March 2011 (exhibit 15).
The parties also filed written submissions in compliance with directions made at the hearing on 11 March 2011.[4]
[4]See Applicant’s Final Submissions dated 28 March 2011, Outline of Submissions – Hearing (of respondents) dated 28 March 2011 and Applicant’s Submissions in Response dated 4 April 2011.
Would it be unfair to Mr and Mrs Williams to make an award under section 55(4) of the DBCA?
Mr Horscroft argues that the cost of construction could not be reasonably calculated at the time of signing the contract due to the type of house and site location.[5] Furthermore, Mr Horscroft argues that he and Mrs Williams in her capacity as Mactrac Pty Ltd had previous dealings in relation to several development projects, most of which were cost plus contracts.[6] It is Mr Horscroft’s submission that it would not be unfair to make an award in favour of Townsville Constructions Pty Ltd under section 55(4) of the DBCA because:
a)The services were performed at the request of Mrs Williams.
b)Mrs Williams is an experienced property developer.
c)Mrs Williams had the opportunity each month (either personally or by staff) to examine and approve the costs Mr Horscroft incurred to provide the contracted services. This was done in the presence of Mr Horscroft in Mrs Williams’ office.
d)Both parties agree that the builder’s margin of 15% on materials and subcontractors is reasonable.
e)Mr Horscroft as a Director of Townsville Constructions Pty Ltd has incurred expenses in carrying out the contracted services.
f)Mr and Mrs Williams have received the benefit of the supply of materials and labour for the contracted services.
g)Townsville Constructions Pty Ltd has been unable to pay various subcontractors and suppliers totalling the amount of $39,397.24.
[5]Application filed 7 May 2010 and Applicant’s Written Submissions.
[6]Ibid para 15 of written submissions.
Mr and Mrs Williams argue in written submissions that a failure to provide an estimate in accordance with section 55(2) of the DBCA could not be justified by Mr Horscroft because on 7 October 2008 he provided an estimate of the total cost of construction of two (2) million dollars for the purposes of effecting the compulsory Queensland Building Services Authority (“QBSA”) insurance policy. Furthermore, Mr and Mrs Williams argue:
a)There is a “paucity of evidence” provided by Mr Horscroft to sustain the claim and that this is a consequence of the failure of Mr Horscroft to keep a proper system of records. Mr and Mrs Williams refer to tax invoices received which they claim were incorrect and over billing for GST by Mr Horscroft.[7]
b)Mrs Williams repeatedly asked for better records to be kept.
c)The address provided on supplied invoices was either inaccurate or non-specific and therefore it is questionable whether the materials claimed in the invoices were actually delivered to the site.
[7]See submissions (Respondents) dated 28 March 2011 which sets out the “questionable invoices”.
Issues for Determination
The issues to be considered by the Tribunal in determining the amount to be awarded to Townsville Constructions Pty Ltd under section 55(4) of the DBCA are:
a)The value of materials delivered to the site by subcontractors and suppliers for which Mr and Mrs Williams are responsible (the “materials issue”).
b)The quantum of hours worked by employees of Mr Horscroft; in particular whether the hours charged included lunch breaks on the site (the “hours issue”).
c)Whether Mr Horscroft is entitled to apply a margin of 15% on an invoice from Minelec (electrical contractors) included in Townsville Constructions Pty Ltd claim number 15 (the “Minelec issue”).
d)Whether Mr and Mrs Williams are entitled to a rebate for the home insulation Federal Government scheme, alleged to have been claimed by Mr Horscroft.
e)Whether invoices issued for works carried out on the driveway at the site should be paid by Mr and Mrs Williams.
Evidence of Mr Edward Noel Horscroft
Mr Horscroft filed an affidavit[8] and gave evidence at the hearing. Mr Horscroft’s evidence was that as invoices came in he copied them, bound them up with his tax invoices and delivered them to Mrs Williams as he had previously done with other projects. He stated that he had done numerous other projects with Mrs Williams and all but one was on a cost plus basis and all of the invoices were presented in this way. Mrs Williams and Mr Kerry O’Brien, who worked for her, would, in his presence, peruse and approve every invoice. Mr Horscroft stated that the construction at the site was the only major job in that part of Yarrawonga and all suppliers knew where the job was. Mr Horscroft conceded that the source documents to justify many of his claims were not in his possession. He said the originals would have been sent to Mrs Williams and he had not kept a copy. He conceded that he had charged a builder’s margin inclusive of GST for the first four (4) progress claims but that he had charged exclusive of GST after those claims. Mr Horscroft gave evidence that on all other occasions with which he had dealt with Mrs Williams the labour rates had been $65 plus GST and $55 plus GST. He said that his error in not inserting plus GST into the contract meant that he was not able to claim that amount. He conceded that neither time sheets nor wages records were provided to Mrs Williams.
[8]Exhibit 1.
Mr Horscroft was cross-examined in relation to his record keeping. Mr Horscroft conceded that “it was not the best”. However, he pointed out that all invoices for materials supplied were given to Mrs Williams every month. They formed Exhibits “A” to “P” to the Affidavit of Mrs Williams.[9] Mr Horscroft was also cross-examined about whether or not deliveries were made to the site or whether they were either delivered to other sites or not incorporated into the works at all. Mr Horscroft’s evidence was that, notwithstanding the different addresses on numerous invoices, other than the items conceded, the materials were delivered to the site. Mr Horscroft called nine (9) witnesses in support of this contention. Evidence was also given by Mr Horscroft during cross-examination in relation to whether he had overcharged Mrs Williams for thirty (30) minute lunch breaks for which he was not entitled to charge. In particular whether, after Mrs Williams’ complaint about the hours charged, he had merely extended his recording of the hours by thirty (30) minutes to overcome the fact that she had detected an error in his calculation of time. Mr Horscroft asserted that he had not charged for lunch breaks and that he had not extended the hours after Mrs Williams’ complaint. Mr Horscroft relies on the evidence of his site foreman (Mr Airens) in respect of the number of hours charged. In particular that the site foreman recorded the time each worker was on site and gave time sheets to Mr Horscroft at the end of every week.
[9]Exhibit 14.
Evidence of Mr Daniel James Airens
Mr Daniel James Airens (site foreman) gave evidence by affidavit and at the hearing in relation to the hours charged by Mr Horscroft’s employees and delivery of materials to the site. Mr Airens gave evidence that work commenced in or about October 2008 at the site and that he was in control of the whole site including recording the hours worked and signing off on invoices when orders where delivered. Mr Airens states that once invoices were signed they were “thrown out” so he was unable to verify whether any specific invoiced items were delivered. Mr Airens said this was common practice for all job sites as he would end up with a pile of paperwork if all invoices were kept. Mr Airens also gave evidence that all employee’s work times were recorded by him personally and then given to Mr Horscroft at the end of every week. Mr Airens said the usual start time was 6.30am working on a nine (9) to ten (10) hour day. During cross-examination Mr Airens was questioned about the hours worked, in particular whether it was likely that workers could manage a nine (9) to ten (10) hour day in summer without breaks. Mr Airens denied that workers regularly took breaks during the day and that only hours worked were claimed in the worker’s time sheets. Mr Airens also gave evidence that Mrs Williams did not regularly attend the site.
Evidence of representatives of various suppliers
Mr Horscroft relies on a number of witnesses including representatives of various suppliers of materials and equipment such as cranes, pumps, concrete blocks and timber, who gave evidence on behalf of Townsville Constructions Pty Ltd by affidavit and during cross-examination at the hearing. The witnesses gave evidence that all deliveries claimed by Mr Horscroft were made to the site. This was relevant to the materials issue.
Mr Wayne Thomas Gallagher is the local manager of One Steel. Mr Gallagher provided fabricated steel for the site. In cross-examination Mr Gallagher admitted that he had gone through the business records in order to determine what was delivered to site. Mr Gallagher pointed out that on a lot of occasions no one would be on site when materials were delivered and in that case the docket was either left on site or given to a person on site, if there was no one there.
Ms Anna-Jane Sperring is the Office Manager for Pittman Concrete Pumps. Ms Sperring gave evidence during cross-examination that each piece of equipment had its own invoice book. The use of different pieces of equipment on the site would be recorded in its own invoice book and that was the reason the invoices were not in chronological order. Ms Sperring gave evidence that Pittman Concrete Pumps’ personnel were responsible for recording the address of the site on the invoice. Ms Sperring gave evidence that she was not aware of any other lot in Yarrawonga being developed or constructed at the time these invoices were issued.
Mr Duncan Bruce Harrison was production manager for Boral. Mr Harrison gave evidence by telephone and stated during cross-examination that he was able to determine that the products delivered to site were delivered because each vehicle had its own GPS tracking system and he had access to those GPS records.
Mr William Benjamin Scott, a partner of Scott Brickworks gave evidence that the number “98” appeared on the site at the time and that all their drivers knew where to go and knew that the “Williams site” was where the deliveries for this job had to go. Mr Scott’s evidence was that if no one was on site delivery would be made and no one would sign off that the bricks were delivered.
Mr Gordon Alexander Willocks is the managing director of Universal Cranes. During cross-examination Mr Willocks gave evidence that the addresses “Yarrawonga” “Yarra Drive” on the invoices would all have gone to the site. Mr Willocks’ evidence was that he drove cranes to the site on two (2) occasions and that the “Williams job” was the only job Universal Cranes had in the site area at the time.
Mr Rikki Mark Abraham is the manager of Force Rentals. In cross-examination Mr Abraham admitted that a number of the invoices said to be delivered to the site did not appear in his affidavit. They included one invoice for September, October, and two invoices for November. Mr Abraham stated that the evidence in his affidavit had been ascertained through computer based records. Mr Abraham also stated that the system may not be one hundred percent accurate but he had gone through the Townsville Constructions Pty Ltd account and the Yarrawonga address was their only job in that vicinity and the invoices would have been marked “Yarrawonga” or “Vicki”. Mr Abraham gave evidence that he could not verify whether the equipment went to the site or if the customer had picked it up.
Ms Tonya Fae Kyle is the general manager of Markwell Group. Ms Kyle stated that she was relying on the accuracy of her system and relied on the customer to give an accurate address. Ms Kyle also stated that to verify delivery of an order her drivers would sign the dockets and give the signed docket to the foreman on site but this did not happen if no one was at the site at the time of delivery. Ms Kyle gave evidence that she had gone through the Townsville Constructions Pty Ltd account and the information on which she had based her affidavit evidence was that the materials had gone to the site at Yarrawonga. Ms Kyle said she was unaware that there were any other projects at Yarrawonga for Townsville Constructions Pty Ltd at the time the deliveries were made.
Mr Alan Peter Reeks is manager of Big River Group which had taken over the business of Dale & Meyers. Mr Reeks’ evidence was that as manager he completed invoices and had access to business records to verify that the materials were delivered to the site. Mr Reeks also gave evidence that he had delivered a few things to the site himself. Mr Reeks referred to his records and confirmed there were various addresses citing “Yarrawonga Drive” with different numbers and various references to “Vicki’s house”, “Vicki”, “Williams” and other references to that job. Mr Reeks conceded that it was possible that wrong information had been given to him.
Mr Shaun Richard Williams is the North Queensland manager of Ramset and gave evidence by telephone. Mr Williams was cross-examined as to whether the materials were delivered to the site. Mr Williams stated that he had delivered some materials to the site himself and that all the items claimed to be delivered were for the site. Mr Williams gave evidence that Mr Horscroft’s account was the only job that his company had during the time deliveries of materials were made to the site at Yarrawonga.
Expert Evidence of Troy Matthew Popham
Mr Popham prepared a report[10] and gave expert evidence on behalf of Townsville Constructions Pty Ltd. Mr Popham attended the expert’s conclave and was one of the authors of the joint report dated 30 August 2011. Mr Popham’s evidence was that he was engaged for a reconciliation of the amounts of each claim provided to Mrs Williams for payment. Mr Popham said that the main difference between his assessment and the assessment of Mr Coutts (expert witness for Mr and Mrs Williams) was that Mr Coutts was engaged for an analysis of the quantum of the claims whereas he was engaged for a reconciliation of monies paid and monies outstanding. Mr Popham explained that his approach was different from Mr Coutts because Mr Coutts had access to the original invoices sent to Mrs Williams by Mr Horscroft. Mr Popham’s reconciliation did not include those documents. Mr Popham conceded that source documents were important for the analysis conducted by Mr Coutts and it would have been advantageous if he had had access to them.
[10]Exhibit 3.
Evidence of Mrs Vicki Williams
Mrs Williams filed an affidavit[11] and gave evidence at the hearing. Mrs Williams disputed that a lot of the materials claimed by Townsville Constructions Pty Ltd were delivered to the site. Mrs Williams referred to many inaccurate addresses in various invoices attached to her affidavit to support her contention. Mrs Williams gave evidence that she believed that she had been wrongly charged for thirty (30) minute lunch breaks and Mr Horscroft was not able to produce time sheets to support this calculation of time. In relation to the calculation of hours it was Mrs Williams’ belief that Mr Horscroft had merely “rounded out” the hours; by that she meant that Mr Horscroft had merely added thirty (30) minutes to his daily calculations after she had questioned him on his methodology for recording the hours and in particular whether she was being charged for lunch breaks. Mrs Williams also stated that she had “major issues with supervision” and that “lots of things had to be fixed up”. Mrs Williams gave evidence in particular about the quality of the drive-way to her property and said it was not satisfactory. Mrs Williams stated that she obtained one (1) quote for a painter to perform work on the site. Mrs Williams claims that she never saw statements for delivery; only delivery slips as provided by Mr Horscroft. During cross-examination Mrs Williams was questioned about the circumstances surrounding the signing of the contract and whether she conceded it was a difficult construction site. Mrs Williams gave evidence that she “trusted [Mr Horscroft]” and that she signed the contract on that basis. Mrs Williams denied that she would described herself as a property developer and that she had simply been developing property for “quite sometime”. Mrs Williams also denied during cross-examination that she was rarely on site and stated that every morning and afternoon she would walk to site with her “puppies” and did not make herself known to the workers on site however she did this with a view to seeing her new house. It is Mrs Williams’ evidence that she would see the workers on site having lunch and “[she] was paying for it”. Mrs Williams also stated that she went on holiday for about five (5) weeks during the period of construction. Mr Williams was not called to give evidence although it was alleged in the affidavit of Mrs Williams that he visited the site regularly as well.
[11]Exhibit 14.
Expert Evidence of Mr Laurence Bruce Coutts
Mr Coutts prepared a report[12] and gave evidence at the hearing on behalf of Mr and Mrs Williams. Mr Coutts also attended the Experts Conclave on 30 August 2010. Mr Coutts gave evidence in relation to his view of the invoices presented for materials delivered to the site and the hours charged by Mr Horscroft and his opinion on a number of items charged such as fuel. Mr Coutts conceded that in relation to some items his calculations were based on instructions from Mrs Williams that she “did not believe” she should be paying for some items for which she was charged. Mr Coutts also gave evidence in relation to the analysis of the costs of the thirty (30) minute breaks in relation to the hours issue.
[12]Exhibit 16.
Submissions
In written submissions Mr Horscroft concedes that some errors were made in invoicing and that some concessions were made for particular items. Mr Horscroft also concedes that some of the subcontractor and supplied invoices incorrectly described or did not precisely describe the address or lot number of the site in their respective invoices. However, it is Mr Horscroft’s submission that an explanation has been given for this “occurrence” and that the evidence relied upon supports a finding that all the subcontractor/ supplier, invoices/statements relate to works at the site.
In relation to the hours issue (lunch breaks) Mr Horscroft argues that his evidence is supported by the evidence of Mr Airens and that Mr and Mrs Williams were never charged for lunch breaks as previously communicated to Mrs Williams.
Mr Horscroft also claims that he at all times supervised and coordinated the work performed by Minelec at the site and he is entitled to claim a builder’s margin for these accounts. Mr Horscroft also argues he has an entitlement to claim a builder’s margin on the cost of fuel and the hire of equipment and relies on “costs of works” as defined under the contract.[13]
[13]See written submission, para 11.
Mr Horscroft denied that he received a rebate for the home insulation scheme and that the evidence given by Mr Coutts in respect of this issue should not be accepted by the Tribunal on the basis that Mr Coutts has simply reported information given to him by Mrs Williams about this issue.
In relation to the works performed on the driveway at the site, Mr Horscroft relies on the evidence of Mr Airens that invoices issued for the driveway were verified by him and there was an issue about the cement bags which was later “rectified” by Boral.[14]
[14]See written submissions.
It is the submission of Townsville Constructions Pty Ltd that the Tribunal prefer the evidence given by Mr Popham on the basis that Mr Coutts has simply followed Mrs Williams’ instructions in relation to calculating the builder’s margin on fuel/hire of equipment items, the Minelec invoices and hours and labour. Townsville Constructions Pty Ltd should therefore be entitled to recover from Mr and Mrs Williams the cost of providing the contracted services plus a reasonable profit.
Mr and Mrs Williams criticise the evidence provided by Townsville Constructions Pty Ltd in the form of affidavits prepared by various witnesses (of suppliers) as being “cut and paste” affidavits which are unreliable.[15] The affidavits are in almost identical terms but for the various descriptions of the different suppliers, the witnesses’ roles and invoice numbers. Mr and Mrs Williams argue in their submissions that the evidence of the witnesses relied upon by Townsville Constructions Pty Ltd in relation to the materials issue is reliant on business records and not from the witnesses own recollection. The evidence cannot be one hundred percent accurate because addresses were wrong and there is a possibility that the materials were either not delivered to the site or not correctly ordered.
[15]See written submissions.
Mr and Mrs Williams assert that they were charged for lunch breaks for thirty (30) minutes each day. They assert that the Fair Work Act 2009 and other relevant legislation provide that they must not be charged for those thirty (30) minutes. The “questionable invoices” identified by Mr and Mrs Williams in their submissions are argued to “clearly illustrate a very sloppy system of bookkeeping, which gives rise to the very real possibility of error”.[16] Mr and Mrs Williams submit that the issue of overcharging relating to GST was conceded by Mr Horscroft and the allegation of overcharging concerning wages was the subject of a change in billing practice.
[16]See written submissions.
In relation to the expert evidence Mr and Mrs Williams argue that had Mr Horscroft kept better records then Mr Popham may have been able to complete a more thorough assessment. However, notwithstanding Mr Horscroft’s poor record keeping as alleged, Mr and Mrs Williams argue that Mr Horscroft’s affidavit sets out several of the disputed invoices.
Findings
The Tribunal must make its findings in relation to the disputed issues on the balance of probabilities. The civil standard is not applied as a mathematical or scientific exercise, but as a reasonable search for the truth in the circumstances of each particular case.[17] As Dixon J (as his Honour then was) explained in Briginshaw v Briginshaw:[18]
“… when the law requires the proof of any fact, the Tribunal must feel an actual persuasion of its occurrence or its existence before it can be found... Reasonable satisfaction is not a state of mind but is obtained or established independently of the nature and consequence of the fact or facts to be proved”.
[17]TNT Management Pty Ltd v Brooks (1979) 53 ALJR 267.
[18](1938) 60 CLR 336 at 361-2.
The Tribunal has carefully considered all of the material filed in these proceedings and the evidence given at the hearing, in particular evidence given by Mr Horscroft and Mrs Williams. There was a voluminous amount of material before the Tribunal comprising of invoices attached to various affidavits filed by both Mr Horscroft and Mrs Williams. Evidence was adduced by some ten (10) witnesses on behalf of Townsville Constructions Pty Ltd and Mr and Mrs Williams required all witnesses to be cross-examined at the hearing. There have been numerous calculations undertaken by the expert witnesses as to the various invoices presented to determine the correct value of the costs of construction works and to identify the invoices disputed by Mr and Mrs Williams.
The contract between the parties does not comply with section 55(1) of the DBCA. However, a contravention of section 55(1) of the DBCA does not prevent the Tribunal from making an award pursuant to section 55(4). The reference to the “cost of providing the contracted services” as set out in section 55(4) of the DBCA is the actual cost that could have been charged by Townsville Constructions Pty Ltd had the contract been a lawful cost plus contract and otherwise be enforceable.[19] In determining whether it would be unfair to make an award under section 55(4) of the DBCA, the Tribunal prefers the evidence given by Mr Horscroft about the circumstances surrounding the signing of the contract. During cross-examination of Mrs Williams at the hearing the Tribunal found that she was vague in her recollection of the circumstances surrounding the signing of the contract. Mrs Williams’ evidence was that she simply signed the contract when it was presented to her on the basis that she trusted Mr Horscroft. However Mrs Williams could clearly recall previous contractual dealings with Mr Horscroft, in particular that not all of the contracts signed by her in her capacity as Mactrac Pty Ltd were on a cost plus basis such as the Mooney Street development. During cross-examination Mrs Williams also denied at first instance that she was a property developer until it was pointed out to her that that was the occupation ascribed to her in her own affidavit.
[19]Versace v Lavis [2005] QCCTB 2.
The Tribunal prefers the evidence given by Mr Horscroft and finds that he advised Mrs Williams that the cost of construction would be between two (2) and three (3) million dollars and that he took out an insurance policy with the BSA for two (2) million dollars.[20] The Tribunal also accepts the evidence given by Mr Horscroft that the construction site was difficult due to its location, some of the subcontractors engaged have not been paid by him and that he had previous dealings with Mrs Williams involving a number of contracts which were on a cost plus basis and that Mrs Williams was an experienced property developer who with the assistance of her staff examined each monthly invoice issued by Mr Horscroft. The Tribunal is therefore satisfied that it would not be unfair to make an award under section 55(4) of the DBCA.
[20]See section 69(2) of the Queensland Building Services Authority Act 1991 which provides that a policy of insurance comes into effect when a contract for construction work is entered into.
In relation to the materials issue, the Tribunal accepts the evidence of Mr Gallagher, Ms Sperring, Mr Harrison, Mr Scott, Mr Willocks, Mr Abraham, Ms Kyle, Mr Reeks and Mr Williams that the materials as referred to in various invoices claimed by Mr Horscroft were delivered to the site (except for some items conceded by Mr Horscroft). The various witnesses gave evidence during cross-examination at the hearing and stated without exception that the materials referred to in various invoices would have been delivered to the site because they examined their business records and were satisfied that the materials were delivered to the site. Some witnesses such as Mr Williams, Mr Reeks and Mr Willocks gave evidence that they had personally delivered some of the materials to the site. The Tribunal is satisfied to the requisite standard that the evidence given during cross-examination adequately addressed the issues raised by Mr and Mrs Williams in relation to certain billing and delivery practices adopted by Mr Horscroft such as a failure to accurately record the site address on the invoices representing materials to be delivered; and that the materials as claimed were delivered and was a cost incurred by Townsville Constructions Pty Ltd in relation to the construction of the house at the site.
The Tribunal is also satisfied that the items claimed by Mr Horscroft in relation to invoices issued for the driveway at the site were a cost in relation to the construction of the house and were therefore properly charged to Mr and Mrs Williams.[21] Mr and Mrs Williams also claimed a number of other minor items were not payable. These relate to fuel, generator hire and other miscellaneous items. It is clear from the special conditions to the contract that all costs incurred by Townsville Constructions Pty Ltd in relation to construction were to be reimbursed. The Tribunal rejects any assertion that the amounts claimed in the invoices for fuel, generator hire and other hire items are not payable to Townsville Constructions Pty Ltd. The wording of the special conditions indicates that the parties contemplated that these items would be reimbursed at the time of signing the contract. The parties agree that 15% is a reasonable margin for profit. That was also the profit margin contemplated in the special conditions to the contract. The builder’s margin should therefore be applied to the cost of materials supplied by Mr Horscroft to Mr and Mrs Williams as claimed by Townsville Constructions Pty Ltd.
[21]During cross-examination Mrs Williams stated that she was not satisfied with the work performed on the driveway at the site. The Tribunal notes however that there was no other specific complaints made by Mrs Williams during cross-examination about defective work, nor did Mr and Mrs Williams’ Counter-Application include any claim for defective works.
In relation to the hours issue, the Tribunal finds that the evidence given by Mr Horscroft and Mr Airens was not supported by any source documents or other independent witnesses. Mr Horscroft states that he handwrote the hours worked onto the tax invoices delivered to Mrs Williams and that he relied on information provided to him as was his work practice for several years. It was both Mr Horscroft’s and Mr Airens’ evidence that Mr Airens would record the hours of every worker on site on a daily basis and provide those timesheets to Mr Horscroft at the end of each week. Mr Horscroft would then tally those hours onto the tax invoices delivered to Mrs Williams. Both witnesses gave evidence that the thirty (30) minute lunch break was not included in the hours recorded and that Mrs Williams was never charged for that time; however no timesheets were produced by Mr Horscroft to support his claim for the time charged. During cross-examination Mr Horscroft denied that the invoices claimed for up to ten (10) hours per day did not reflect the reality of the situation; that is, it is unlikely that his workers worked ten (10) hour days during the summer period without breaks. Mr Horscroft gave evidence that his employees/workers “busted their guts”. He also stated that he changed his billing practice to record the amount of hours claimed to satisfy Mrs Williams on the basis that “she asked for it to be changed, we changed it”.The Tribunal is not satisfied to the requisite standard that the number of hours claimed by Mr Horscroft for labour/foreman work on site was properly charged and that the amount claimed did not include thirty (30) minute lunch breaks. Without source documents such as timesheets and/or evidence of independent witnesses such as workers on the site the Tribunal cannot be satisfied on the evidence of Mr Horscroft and Mr Airens alone. The Tribunal in considering the amount to be deducted from Mr Horscroft’s claim in relation to the hours issue has considered the expert evidence. The evidence of Mr Coutts is that the amount of $8,547.50 should be deducted in respect of claim numbered 1. The Tribunal has undertaken a perusal and calculation of claim numbered 1 and is satisfied that Mr Coutts’ calculation is correct and that the total amount of $43,862.53 should be allowed as follows:[22]
[22]The calculation for “hours” in exhibit 17 is claimed to be $8,247.50 which on the Tribunal’s own calculation of claim numbered 1 is not correct. See Mr Coutts’ affidavit (exhibit 16) and paragraphs 12, 20, 28, 34, 41, 47, 53, 58, 63, 68, 74 and 89 for the respective claims numbered 1 to 10, 11, 14 and 15.
Claim # Amount 1 $8,547.50 2 $6,515.00 3 $4,721.38 4 $4,133.65 5 $1,425.00 6 $2,905.00 7 $2,895.00 8 $2,495.00 9 $2,785.00 10 $3,495.00 11 $1,530.00 14 $1,747.50 15 $667.50 Total $43,862.53
In relation to the Minelec issue, the Tribunal accepts the evidence given by Mr Horscroft that he supervised and managed the work undertaken by the subcontractors and this justified the application of the 15% builder’s margin. Mrs Williams, when asked during cross-examination whether Mr Horscroft had supervised the work undertaken by Minelec, answered “if you say so”. Mrs Williams stated that she had issues with the supervision of the subcontractors work and stated that it “cost [her] money to fix it up”. The Tribunal accepts Mr Horscroft’s evidence that he supervised the works and finds that Townsville Constructions Pty Ltd is entitled to claim the builder’s margin of 15%.
The Tribunal, having been satisfied that it would not be unfair to Mr and Mrs Williams to make an award under section 55(4) of the DBCA for the cost of providing the contracted services being the construction of Mr and Mrs Williams’ house at the site plus a reasonable profit, has also determined that the amount of $43,862.53 should be deducted from the total amount claimed by Townsville Constructions Pty Ltd as follows:
Amount claimed $159,267.82
Less deduction (for the hours issue) $ 43,862.53TOTAL $ 115,405.29
Costs
The starting point concerning costs in QCAT is that each party must bear its own.[23] This presumption may, however, be displaced if the Tribunal considers it in the interests of justice to order a party to pay all or part of the costs of another party.[24] The phrase “in the interests of justice” is not defined in the Act but is to be construed according to its ordinary and plain meaning, which obviously confers a broad discretionary power on the decision-maker. In determining whether it is in the interests of justice to award costs against another party the Tribunal may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party.[25]
[23]Queensland Civil and Administrative Tribunal Act 2009 (“the Act”), s 100.
[24]Ibid, s 102(1).
[25]Ibid, s 102(3).
There was no claim made for costs by Townsville Constructions Pty Ltd in its Application filed on 7 May 2010 or in its final written submissions. Mr and Mrs Williams in their Counter-Application filed on 11 June 2010, claim an amount to be ordered by the Tribunal together with costs, however the issue of costs was not addressed in their final written submissions.
The issues to be determined by the Tribunal in this matter were strongly contested by both the parties. There was a voluminous amount of material to be considered and calculations to be reconciled with the evidence adduced and tested by way of cross-examination at the hearing. The Tribunal has addressed the issues raised by Mr and Mrs Williams in their Counter-Application and in written submissions and having determined that an amount be awarded to Townsville Constructions Pty Ltd the Tribunal has also determined that a deduction be made in respect of the hours issue. The Tribunal is not satisfied having regard to the discretionary power to award costs under section 100 and the issues to be determined in this matter that it is appropriate to make an order for costs.[26]
[26]Interest was also claimed by Mr and Mrs Williams in their Counter-Application filed 11 June 2010 however no submissions were made in respect of interest in final written submissions. The Tribunal has made no order in respect of interest.
The Tribunal orders that Mr and Mrs Williams pay Townsville Constructions Pty Ltd the amount of $115,405.29 by 4.00pm on 25 May 2011.
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