Von Knorring v Baldwin - [2014] QCAT 704

CITATION:

Von Knorring v Baldwin [2014] QCAT 704

PARTIES:	Peter Von Knorring (Applicant)
v
David Alfred Baldwin (Respondent)

APPLICATION NUMBER:

BDL297-13

MATTER TYPE:

Building matters

HEARING DATE:

22 August 2014

HEARD AT:

Townsville

DECISION OF:

Member Gardiner

DELIVERED ON:

4 September 2014

DELIVERED AT:

Brisbane

ORDERS MADE:

1. Peter Von Knorring pay David Alfred Baldwin the sum of $12,832.00 within 14 days.

2. David Alfred Baldwin is to provide to Peter Von Knorring any outstanding building certificates, warranty documents and any keys held by him to the property upon payment of the amount of $12,832.00.

CATCHWORDS:

BUILDING – where the builder issued a claim for payment – where owner failed to pay the claim – where both home owner and builder purported to terminate the contract – where the builder seeks final payment for completed building work and variations – where owner alleged defects and incomplete work

Domestic Building Contracts Act 2000: ss 80, 84

APPEARANCES and REPRESENTATION (if any):

APPLICANT:	in person
RESPONDENT:	In person

REASONS FOR DECISION

Mr Von Knorring engaged the builder Mr Baldwin to undertake a major renovation on his property in Townsville. The plan was to convert duplex maisonettes into a single dwelling. Mr Von Knorring remained living on the premises during the renovations and for a period of time, there was a tenant in the other half of the property.
Mr Baldwin is a builder of long experience. Unfortunately despite this long experience, he did not keep good records or adhere clearly to the requirements of the contract with Mr Von Knorring or with the Domestic Building Contracts Act 2000.
These informal arrangements may work when relations are good between builder and client but they are generally a recipe for a dispute when relations sour, as they did between these two men quite quickly. They were forced to rely on the legal process to solve their problems and major difficulties have arisen for them both.
This is sadly a common occurrence in building matters before QCAT where parties do not properly document and adhere to the agreement between them.
When things became untenable for both men, each of them tried to terminate the building contract. On the evidence before me, this was not a valid process for either man.
Mr Von Knorring sought to terminate the contract on the basis that he was never given a consumer guide contained in a Building Services of Australia (as it then was) contract pack by Mrs Baldwin on 27 February 2013.
On his submission, this means the “cooling off” period under the contract has never run and therefore he has a right to terminate the contract.
Mrs Baldwin denies the consumer guide was not supplied and provided detailed evidence in writing and at the hearing about the circumstances, both of her general practice and specifically of the meeting in question with Mr Von Knorring, in which she says the guide was given to Mr Von Knorring.
The evidence given by Mr Von Knorring and Mrs Baldwin is completely contradictory and because of this, I must prefer one person’s recollection over another.
Having had the opportunity to hear and see Mrs Baldwin under cross examination from Mr Von Knorring and in response to questions from this tribunal, I prefer her version of events over the account given by Mr Von Knorring.
I found Mrs Baldwin to be a forthright witness who gave a detailed explanation of events as she recalled them. Although indignant, she was able to honestly answer the questions put to her and had a detailed recollection of events.
I accept her evidence and am satisfied that Mr Von Knorring did receive the necessary consumer guide at the meeting with Mr Baldwin of 27 February 2013.
As Mr Von Knorring relies on not receiving this documentation to ground his “withdrawal” notice to Mr Baldwin dated 24 October 2013, I am satisfied that this notice is invalid under section 72 of the Domestic Building Contracts Act.
Under clause 27 of the general conditions of the contract signed by both men, Mr Baldwin had a contractual process which he must undertake to terminate his contract with Mr Von Knorring because of any alleged breach by Mr Von Knorring.
This process involves a termination notice and time for Mr Von Knorring to remedy the alleged breach followed by the termination.
On 31 October 2013, Mr Baldwin sent a notice to Mr Von Knorring allegedly terminating the contract and cancelling all insurances. This notice does not conform with the requirements of the contract general conditions and, is in my view, also invalid.
The attempts by both men to unsuccessfully terminate this contract are examples of the state of the contractual arrangements generally.
The contract itself is unclear as to its terms. It is a BSA New Home Construction Contract. This was not a new home construction. Mr Baldwin says the BSA in Townsville didn’t have the renovation contract packs available so he was advised to use the new home contract. He says he didn’t think it mattered.
Certainly the same terms are similar but as the contract is for a new home and not a renovation, there was added confusion.
Mr Baldwin claims an amount as a final payment of $16,540.00. He is entitled to the final payment under the terms of the contract.
Mr Von Knorring is entitled to have the contract price amended by variations and adjustments for defects and incomplete work as I will discuss, but these do not affect his liability to make the final payment itself.
Item 1 of the contract sets out the particulars of the works in a brief description.
This written contract says “New colourbond roof and gutters, remove ext wall sheeting and replace, remodel bathrooms, new kitchen, new windows SG int and ext painting.
The last item “int and ext painting” is a dispute between the parties. Mr Von Knorring says this means complete painting inside and out. Mr Baldwin says this was not contained in his original quote dated 27 February 2013[1] and was never the agreement reached between the parties.
[1]Exhibit “B” to Mr Baldwin’s statement filed 26 February 2014.
Mr Baldwin says the only painting he undertook to do was as required to satisfy the building certifier – here the external new boards and the pantry so that kitchen cupboards could be installed.
Mrs Baldwin says the reference to painting in the invoice dated 7 August 2103[2] was her mistake as she thought (without asking Mr Baldwin) that the building certifier required the kitchen and bathroom to be painted also. Mrs Baldwin gave evidence that she was responsible for invoicing of jobs.
[2]Exhibit “a” to Mr Von Knorring’s statement filed 20 January 2014.
I am satisfied that both men had different views of the contractual arrangements concerning painting.
I must deal with the contract as I find it. It says internal and external painting without qualifications. But this clause is a brief description only as can be seen by the other descriptors, e.g. “remodel bathrooms”. It is necessary to look at the context of the clause to give it its proper meaning.
The quote, which lists the same price as the contract, does not refer to painting. There are no colours selected. There is no detail of the number of coats or type of paint to be used which would be expected to be specified in a contract for extensive painting.
I am satisfied that the painting referred to is, as Mr Baldwin suggests, only that required to meet the requirements of certification. I am not satisfied on the facts, that Mr Von Knorring can rely on the brief description to say that complete painting is required under the contract.

Variations

Five variation documents were provided by Mr Baldwin. They total $17,879.20. None of these variations are signed by Mr Von Knorring. He says he agreed to two variations - a cook top which he says has been paid for and the verandah windows for which there are now claims of defective work.

[32] Mr Von Knorring submits that none of the variations are due and owing because none of them met the requirements of the Domestic Building Contracts Act.

[33] A variation under the contract (clause 22 of the general conditions) must be written, signed by both parties and be in accordance with the terms of the Domestic Building Contracts Act section 80(2).

[34] However, section 84 (4) of the Domestic Building Contracts Act allows a variation sought by the building contractor and not otherwise complying with the Act, to be recovered if the Tribunal is satisfied that there are exceptional circumstances; the contractor would suffer unreasonable hardship; and it would not be unfair to the building owner.

[35] Mr Bill Piper, the area manager for the then BSA in Townsville recorded in an email dated 7 August 2013[3] the following comments about this build:

The contract signed by the parties was “poor” and there needed to be clarification;
The contract did not articulate the stages nor the scope of works to be performed in each stage and that assumption like “fixing stage” in the builder’s invoicing is not reflective of the contract;
The guidelines for variations had not been followed;
The contract was still active and still legally binding;
When a demand for payment was made, the builder must clearly define all works still to be undertaken to complete the project;
The only variation seen by Mr Piper that could be considered is the extra work in the bathrooms in demolition caused by unknown water damage behind a wall.

[3]Attached to Mr Von Knorring’s statement filed 29 May 2014 (Exhibit 4 to these proceedings).

[36] On the evidence before me, I generally agree with Mr Piper.

[37] In relation to variations, Mr Baldwin presented little evidence to support the requirements of section 84(4) and generally, I am not satisfied that these variations (except for the stud damage behind the bathroom walls) satisfies the requirements that there are exceptional circumstances; the contractor would suffer unreasonable hardship; and it would not be unfair to the building owner. I will generally disallow variations not signed by Mr Von Knorring.

[38] There is one exception to this general ruling. The variation dated 2 August 2013 refers to stud damage found after the bathroom walls had been removed and could not have been assessed prior to this. Mr Baldwin’s evidence is that this could not have been allowed for as it was not visible until the walls were removed. I accept this evidence. Mr Piper also saw this damage as an exception.

[39] I am satisfied that there are exceptional circumstance because the damage was not visible until the walls were removed; the contractor would suffer unreasonable hardship; and it is not unfair to Mr Von Knorring to have this extra work undertaken to make safe the property.

[40] I will allow this variation to be included, set at the sum of $3,379.20 being the price set in the variation unsigned by Mr Von Knorring and dated 2 August 2013.

Defects and Alleged Incomplete Work

Shower screen

[41] Although the plans show a shower screen in the left hand bath on the upper floor, there is no shower screen in that bathroom. There was an agreed change to the bathrooms - the shower trays were replaced with shower tubs during the build. An email to Mr Von Knorring from Mr Baldwin dated 19 August 2013[4] confirms that “shower screens are not included”.

[4]Attached to Mr Von Knorring’s statement filed 29 May 2014 (Exhibit 4 to these proceedings).

[42] I am satisfied that the contract price should be reduced by the cost of this missing screen. Mr Von Knorring provides a quote attached to his application for an amount of $832.00 to supply and install the screen. I accept this amount and will allow $832.00 as the sum to be deducted from the contract price

Bathroom mirrors

[43] Mr Baldwin could give no reason why the two bathroom mirrors were not included in the renovation of the bathrooms but did agree that a bathroom generally has a mirror. I am satisfied that the contract price should be reduced by the cost of the missing mirrors. Mr Baldwin suggests $15.00 each. Mr Von Knorring provided a quoted price of $1,026.00 which included the costs of installing the mirrors set at $97.60 for each mirror, attached to his application. I will allow a deduction of $195.20 from the contract price being $97.60 for each of the two missing mirrors.

Rendering

[44] There seems to have been no agreement over the contract terms concerning rendering of two brick veneer walls. Mr Von Knorring submits this was included in the contract. Mr Baldwin denies this. The parties had email correspondence about this. In an email dated 14 July 2013[5], Mr Von Knorring states he agrees to Mr Baldwin painting these brick walls. In a later email to Mr Baldwin dated 14 August 2013[6], Mr Von Knorring instructs Mr Baldwin that he does not want the walls painted but will have them rendered. Mr Von Knorring then says “You can arrange for the rendering or you can leave it and I will have it done after you have finished.” There is no apparent agreement as to the costs of the rendering.

[5]Attached to Mr Von Knorring’s statement filed 29 May 2014 (Exhibit 4 to these proceedings).

[6]ibid.

[45] Mr Baldwin didn’t render the walls, saying they needed repair first[7]. However he agrees that the plan provided for either a render or clad finish. I accept that a render finish was included in the agreement and would include the painting of the walls.

[7]Para 5 of Mr Baldwin’s statement filed 26 February 2014.

[46] I I am satisfied that this omission was not a variation and that the contract price should be reduced by the cost of the rendering that wasn’t done. Mr Von Knorring says he was quoted $50 to $70 per square metre although this quote was not immediately apparent in his documentation. He also provides a quote attached to his application for an amount of $3,300.00 to complete the rendering. Mr Baldwin does not dispute this value. The wall is 50 square metres so these quotes are consistent. I accept the quote and set this amount at $3,300.00 which I will allow as a deduction from the contract price.

[47] Mr Von Knorring also provides a quote attached to his application for an amount of $1,760.00 to paint the rendered walls. Mr Baldwin does not dispute this value. I accept the quote and set this amount at $1,760.00 which I will allow as a deduction from the contract price.

[48] These two amounts total $5,060.00 which I will allow a deduction from the contract price.

Front Verandah windows

[49] The parties did agree to a variation in the height of the front windows so that Mr Von Knorring could take advantage of his view. However the windows which were suppled did not fit. Mr Baldwin says this was because these were metric windows in an imperially measured space. The evidence of the invoicing process for these windows was confusing both in the written material and in oral evidence at the hearing. I was left with the impression that Mr Baldwin had no proper recollection of what had occurred.

[50] What is evident from photographs provided by Mr Von Knorring is that the windows don’t fit the space. Whatever the reason Mr Baldwin gives, this is not work performed in a workmanlike manner to an acceptable standard and I accept this as a defect.

[51] The fixing of an amount to be allowed for this defect is more problematic. Mr Von Knorring annexed an email from Mr Baldwin to his statement of evidence and a signed variation was attached to his original application. Mr Baldwin provided neither.

[52] Mr Von Knorring submits Mr Baldwin is responsible for any amount over $3,100.00 “when I get this work done”. The variation amount was for $3,100.00. In the absence of any evidence of the cost of rectification of the windows, I will allow $1,000.00.

Keys and Certificates

[53] I am satisfied that Mr Von Knorring is entitled to all relevant keys, warranties and certificates once he has paid any final outstanding monies.

[54] I will direct all keys, warranties and certificates be provided to Mr Von Knorring as part of the order in these proceedings. Mr Baldwin agrees in his submissions to hand over all outstanding documentation on settlement and I will make orders in those terms. They should be provided upon payment in full as is usual.

[55] As Mr Von Knorring did not validly terminate the contract, he is not entitled to the costs of changing the locks to gain entry into the property.

Interest claimed

[56] As neither party validly terminated the contract and in view of the poor condition of the contract documentation, I am not satisfied that Mr Baldwin is able to establish an entitlement to interest on any outstanding monies under the contract.

Conclusion

[57] I find the amounts owing under the contract to Mr Baldwin are as follows:

Final payment  $16,540.00
Variation for work caused by stud damage  $ 3,379.20
Subtotal         $19,919.20

Defects allowed and deducted:
Shower screen  $832.00
Mirrors   $195.20
Rendering and painting                   $5,060.00
Windows  $1,000.00
Subtotal:        $7,087.20

Net amount final payment $12,832.00

[58] Mr Baldwin is awarded this amount of $12,832.00 in full and final settlement of this matter to be paid within 14 days, upon which Mr Baldwin will provide all outstanding keys, warranties and certificates to Mr Von Knorring.