Whelan v Limowi Pty Ltd
[2011] QCAT 510
•28 October 2011
| CITATION: | Whelan and Anor v Limowi Pty Ltd [2011] QCAT 510 |
| PARTIES: | Shaun Whelan Linda Rae Whelan (Applicants) |
| v | |
| Limowi Pty Ltd trading as Harbour City Landscapes (Respondent) |
| APPLICATION NUMBER: | BDL058-11 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 13 October 2011 |
| HEARD AT: | Gladstone |
| DECISION OF: | Michelle Howard, Member |
| DELIVERED ON: | 28 October 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. (i) That Limowi Pty Ltd trading as Harbour City Landscapes pay to Shaun Whelan and Linda Whelan damages in the sum of $7,486.27 within 21 days from the date of these orders; (ii) That in default of payment in accordance with this order, interest shall be payable on the award at the rate of 10% per annum on any amount outstanding until the award is paid in full. 2. That Limowi Pty Ltd trading as Harbour City Landscapes pay to Shaun Whelan and Linda Whelan costs in the sum of $486 within 21 days from the date of these orders. |
| CATCHWORDS: | BUILDING DISPUTE – where final approval not obtained for pool and fence project at conclusion of construction – where owners incur costs in attaining compliance – where defect in concrete formwork construction on edge of pool Queensland Building Services Authority Act 1991, s 77(2)(c) Hungerfords v Walker (1989) 63 ALJR 210 Hadley v Baxendale (1854) 156 ER 145 Lyons v Dreamstarters Pty Ltd [2011] QCATA 142 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Shaun Whelan and Linda Rae Whelan |
| RESPONDENT: | Craig Mathison, director of Limowi Pty Ltd |
REASONS FOR DECISION
Shaun and Linda Whelan claim damages for breach of contract by Limowi Pty Ltd trading as Harbour City Landscapes arising out of the construction of a swimming pool and fence. The damages claimed total $15,109. They are broken down into $7,741 for pool compliance; $6,500 for defective stanchions; costs of $462 for the engineer’s report and filing fees of $255; and interest of $406.
The claim for $6,500 relating to the claim for the stanchions was withdrawn during the course of the hearing.
Limowi seeks orders dismissing the claim.
The Evidence
The Contractual Arrangements
The Whelans entered into a written contract with Limowi for the construction of a swimming pool in September 2007 at a cost of $29,100. Item 16 nominated the builder as responsible for obtaining building approval. The contract did not include the construction of the pool fence. The final payment for the pool was made in late January 2008. The Whelans sent a letter to Limowi confirming the payment had been made by direct debit and that it was for completion of pool construction and all relevant government compliances.
Although it was not reduced to writing, it is common ground between the parties that in about December 2007, it was agreed orally between the Whelans and Craig Mathison, a director of Limowi, that Limowi would install a metal pool fence for the Whelans and obtain full compliance with government regulations for $9,570. Mr Whelan says the agreement was to be reduced to a written variation, but this was not ultimately prepared by Limowi. Mr Mathison has no recollection of a conversation about a variation.
It is common ground that a lillypilly hedge, which has been in place at the Whelans’ home for some years was part of the original design, and that as part of the scope of works, it was to be retained.
The fence was apparently completed early in 2008, but the Whelans did not make payment for the fence until June 2008. After the final payment, the Whelans again sent a letter confirming their final payment had been made for completion of the pool fencing and council final approval.
Mr Mathison says that the Whelans knew that a final approval certificate had not been obtained, essentially because Mr Whelan would not allow him to undertake some modifications to the profile of a climbable pillar, which would make it unclimbable, which were required before approval would be obtained. He says that Mr Whelan told him that he did not want the column modified as it would not match the other pillars. He says that Mr Whelan told him he would speak with the certifier. He understood that Mr Whelan intended to seek to convince the certifier that the pillar remain unaltered.
The Whelans dispute that this was so. Mr Whelan denies any discussion to that effect. On the contrary, the Whelans say that in late January 2008, Mr Mathison told them that council approval had been finalised.
Certification Issues
[10] The Whelans were contacted in about mid-2010 by the private certification company which had been engaged by Limowi. It was at this stage that they became aware that final certification had not been obtained. Somewhat confusingly, the certifier then issued, in all, three non-compliance notices each giving different reasons for non-compliance. Subsequently, the certifier issued an enforcement notice under the Building Act 1975 requiring that the Whelans erect compliant fencing by mid-December 2010. The initial notice referred to the requirement for a CPR sign; the supply cap on bottom hinge of gate; and that the back section of fence was climbable from trees. However, consistent with a later notice, the certifier concerned gave evidence that the items requiring attention were as follows:
a)All parts of the pump and filter or climbable objects must be greater than 1200mm outside the pool fence;
b)Ensure there are no objects such as taps, pots or chairs within 300 mm inside pool fence;
c)CPR sign must be viewable from the pool;
d)Supply cap on bottom of gate hinge;
e)Back section of fence climbable from trees;
f)Ledge on column of house makes fence climbable.
[11] He says that the first notice, was raised in the absence of any response from the builder and the home owner to a mail reminder that the application had not been finalised. He went to the home, but as no-one was home, he completed a cursory inspection only listing some items, and posted the notice in an attempt to get a response from either party.
[12] Later, after contact with the owners, a complete inspection was done and a new more detailed notice sent. An error was discovered in the notice and another new notice was sent.
[13] The certifier gave evidence that the applicable standard was Australian Standard AS1926, which has been subject to amendments.
Rectification
[14] The Whelans’ evidence is that they made numerous attempts to engage with Mr Mathison and have Limowi attend to the outstanding items, but although Mr Mathison attended one meeting at their home after they sent him a notice of demand to rectify the issues, he did not accept responsibility and would not engage with them generally around the issues before or after that meeting. Their evidence is that they wanted Limowi to do the work.
[15] Mr Mathison confirms this, although he attempted to give some explanations including that he had ‘tried to leave messages’ for the Whelans and he left the meeting because Mr Whelan said his work was defective. He says that the lillypilly trees concerned had matured since the fence was completed, and that in any event, there were different interpretations about what was climbable. His evidence was that that the original certifier he dealt with, who had since on-sold the business to the certifier who issued the non-compliance notices, had not classed lillypillies as climbable. He suggested that certifier also had some discretion about this issue. The certifier who issued the certificates contradicted this, stating that under the old standard applicable at the time of construction the hedge was deemed climbable, but now under the current standard there are some grey areas.
[16] Mr Mathison says that at the time of construction, the fence was required to have a 900mm non-climbable zone, which was subsequently increased to 1,200mm, although it had not been changed again to 900mm. However, the certifier told the tribunal that the standard required a 1,200mm zone at the time of construction, but it had more recently been decreased to 900mm.
[17] Mr Mathison says that he had provided a CPR sign, but the Whelans deny they were given one. He says he had been prepared to attend to the items listed in the certifier’s original notice, but not all of the others later added. He considers that the Whelans are trying to get their fence upgraded to comply with the 2010 requirements at his cost and that the need for this arose because of the Whelans’ failure to obtain certification at the time of construction. He considers the rectification of the fence is extreme.
[18] The Whelans were concerned to ensure that final approval was obtained within the required timeframes. They had been issued with an enforcement notice. They say, that given Mr Mathison’s unwillingness to engage around the issues, they had no option but to obtain quotes for the work to be done, and subsequently instruct it to be done, by other contractors. The Whelans say they had Curtis Coast Pools look at how to mitigate costs. They also had what they considered to be a defect in the concrete edge of the pool rectified.
[19] In due course, the Whelans had the metal fence constructed by Limowi removed and replaced with a glass fence, which was placed behind the trees. The Whelans gave evidence that the metal fence when constructed by Limowi was 580mm from the pool pump; 300mm from a tap; 550mm from a second tap; 500mm from a down-pipe clamp; and 480mm from the filter pipes. As I understand the Whelans’ evidence, an additional gate had to be installed to facilitate access to the pool pump and filter as a consequence of the rectification undertaken.
[20] For $6,518.85, Curtis Coast Pools Pty Ltd attended to removing the existing metal fence and footings; removing and replacing faulty gate hinges; purchasing and installing a CPR chart; grouting a 60 degree angle on a pillar and painting it; removing, supplying and relocating a down pipe bracket; removing the rear house ramp and replacing it with a level concrete slab for the filter gate; installing a pool glass fence footings and materials; installing a framed glass fence and gate and materials; installing caps on gate hinges. Julio the Tiler charged $180 to tile the concrete access to the pool filter gate and $470 to repair the faulty concrete pool edge. A tap also was moved at a cost of $317.24. Mr Whelan’s evidence was that it had to be moved and lowered when the glass fence was installed to comply.
[21] Mr Mathison says that he engaged a professional concreter for the purposes of completing the contract and denied that there were any defects in the concreting works.
The Engineer’s Report
[22] The Whelans subsequently had an engineer review the works and rectification. His report is dated August 2011 and was provided to the tribunal. His report refers to the front concrete edge of the pool as not complying with the engineer certified drawings, most likely as a result of failure of the slab formwork during pour due to inadequate construction. He considered $470 reasonable rectification costs. He did not see the actual construction prior to rectification, but was apparently given photographs taken previously which he included in his report.
[23] The engineer’s report also refers to Curtis Pools having two reasonable rectification options for the fencing to attain compliance. He states that the option chosen was ‘perhaps’ slightly more expensive but in accordance with the original design and retention of the rear hedge, whereas the other was not. He considered the option taken was the optimal solution to attain compliance given the available space, amenity of the pre-existing hedge and the original design specification requiring the hedge be retained. He notes that each of the items on the non-compliance report had been addressed.
[24] The report contains photographs, including of the lillypilly hedge during construction of the pool, in particular once the pool shell was installed. The Whelans relied on this photograph to demonstrate that the hedge was of a substantial height at the time of construction, contrary to Mr Mathison’s evidence that the trees had matured since the fence was built.
Final Certification
[25] The pool itself had been assessed and approved in September 2007. The Whelans requested a final inspection which included the fence on 17 February 2011 and a compliance notice was issued on that date for ‘pool and fence final’.
Consideration and Decision
[26] The Whelans submit that the contract required Limowi to build in compliance with the architectural design and to manage the construction project for them, including obtaining the relevant approvals. They submit that Limowi could have rectified the issues required, but chose not to engage with them to resolve the problems. They argue that they are entitled to recover damages for their loss occasioned by Limowi’s breach of contract.
[27] Mr Mathison for Limowi said that he did the job believing he would get approval for it. He submitted that the work could have been rectified in other ways, and suggested that the trees could have been cut down. He argues that the costs incurred by the Whelans are extreme. Regarding the concreting repairs, he submitted in essence that the concreting was structurally sound. He suggested that there was no basis advanced for the further tiling costs incurred and the additional concreting and tiling was only required because an additional gate was installed.
The Evidence and Credit Issues
[28] Mr Mathison’s evidence about why certification had not been obtained was to the effect that Mr Whelan was reluctant to have a pillar modified in a way that it made it different from the others in the house construction and he therefore intended to approach the certifier himself to finalise the certification. The suggestion seemed to be that this represented a variation to the agreement that Limowi was responsible for obtaining the approvals.
[29] Mr Whelan denied the allegation. The Whelans wrote to Limowi at the time of each final payment to confirm that relevant compliances, and after the fence completion, final approval had been obtained.
[30] Given the manner in which the Whelans approached this issue, on the balance of probabilities, I accept Mr Whelan’s evidence. It would be incongruous with the manner in which the Whelans conducted the matter with Limowi, that Mr Whelan would have acted in a manner which Mr Mathison contends, when approvals were clearly an issue with which the Whelans were concerned. Accordingly, I prefer the evidence of Mr Whelan over Mr Mathison regarding this issue.
[31] Also, the photograph included in the engineer’s report identified by the Whelans showing the lillypilly hedge was a mature hedge at the time that construction occurred demonstrated that Mr Mathison’s evidence was unreliable on this issue. I accept the Whelans’ evidence about it.
[32] Mr Mathison’s evidence was also contradicted by the certifier in a number of respects. In particular, whether the certifier had discretion at the time of construction regarding whether the lillypilly hedge was climbable and the non-climbable zone required at the time of construction. Mr Mathison is not a certifier. I accept the expert evidence of the certifier as correct and prefer it over Mr Mathison’s evidence wherever it is contradicted by it.
[33] I accept the evidence of the Whelans, the certifier and the engineer. I formed that view that, Mr Mathison’s evidence was not reliable and wherever it is contradicted by evidence of another person, I prefer that other evidence.
Liability
[34] It is common ground that the written contract for the pool and the further oral contract for the fence entitled the Whelans to a completed pool and fence which had final certification. Given the determination I have made about Mr Mathison’s credit, I am satisfied on the balance of probabilities that the oral contract was not later varied.
[35] Final approval was not obtained by Limowi. It is apparent from the evidence that final certification could not have been obtained at the time of construction.
[36] The Whelans became aware only several years later that final approval was not in place when contacted by the certifier. They then tried to engage with Limowi, as had the certifier in relation to the non-compliance issues raised with very limited success. Despite Mr Mathison’s assertions that he was prepared to rectify the issues set out in the first non-compliance notice, Limowi did not undertake any further work nor, as far as I understand it, advise the Whelans that he would rectify the issues or any of them.
[37] The Whelans were faced with an enforcement notice. They had to take action. Reasonably, in my view, they took action to have the issues referred to in the non-compliance notice rectified by other contractors.
[38] The Whelans also had Julio the Tiler repair the concrete pool edge. The engineer says the pool edge did not comply with the engineer certified drawings, most likely as a result of failure of the slab formwork during the pour of the concrete. Photographs with the report clearly show the defect. Despite Mr Mathison’s assertions that the concrete was structurally sound and that it had received certification, I accept that the concrete pool edge was not completed in accordance with the agreement between the parties.
[39] It is not apparent that the Whelans first gave the builder the opportunity to rectify this defect. However, given his unwillingness to engage with them generally around the non-compliance issues, it was reasonable for them to proceed to have this issue attended to at the modest cost of $470.
Quantum of Damages
[40] The primary purpose of damages is to compensate a party for the actual loss suffered as a result of the other party’s failure to perform the contract.[1] The person seeking damages must establish the amount of the loss suffered.[2] The loss suffered must not be too remote.[3] Also, a claimant must act reasonably to mitigate unnecessary loss.
[1] For example see, Hungerfords v Walker (1989) 63 ALJR 210.
[2] For example see, Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711.
[3] Hadley v Baxendale (1854) 156 ER 145.
[41] Mr Mathison submits that the rectification measures taken were extreme. However, I accept the engineer’s evidence that the approach adopted was in accordance with the original design and the retention of the hedge, whereas the other option was not. Mr Mathison concedes that the retention of the hedge was part of the original scope of works. I do not consider that the Whelans were required to cut down the lillypilly hedge in order to act reasonably, given that its retention was part of the original design.
[42] Therefore, I consider that the Whelans claim for damages to compensate them for the work undertaken by Curtis Pools at a cost of $6,518.85, Julio the Tiler to tile access to the pool filter gate for $180 and to Rayliz Services to move the tap for $317.24 reasonable as this work allowed compliance to be attained.
[43] Also, damages in the amount of $470 are claimed for costs of Julio the Tiler to repair the faulty concrete pool edge. Again, I consider the amount claimed is reasonable.
[44] I allow a total of $7,486.27 in damages to be paid by Limowi to the Whelans.
[45] An amount is claimed for costs namely for the engineer’s report of $462 and the tribunal filing fee. The engineer’s report addressed not only the issues which are the subject of these reasons for decision, but also the claim for the stanchions which was abandoned during the hearing. In the circumstances of this building dispute in which the Whelans have been substantially successful, having regard to the provisions of the Queensland Building Services Authority Act 1991,[4] I consider it appropriate to allow costs in the amount of 50% of the costs of the engineer’s report, namely $231. I also allow the cost of the filing fee.
[4] Lyons v Dreamstarters Pty Ltd [2011] QCATA 142.
[46] There is no contractual basis upon which the Whelans may claim the interest included in their claim. Under the Queensland Building Services Authority Act 1991,[5] I may award interest as prescribed by regulation from the date an amount becomes payable until it is paid at a rate of 10%. I will order that the damages awarded be paid in full within 21 days of these orders, and in default, interest shall be payable at the rate of 10% per annum on any amount outstanding until the award is paid in full.
[5] Section 77(2)(c).