Wu & Huang v Eimerl & Anor (Civil Dispute)
[2016] ACAT 113
•7 October 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
WU & HUANG v EIMERL & ANOR (Civil Dispute) [2016] ACAT 113
XD 1301 & 1302/2015
Catchwords: CIVIL DISPUTE – contract dispute – non-payment of subcontractors for tiling work – counterclaim for alternative unsatisfactory tiling work – onus of proof
Tribunal: Presidential Member G McCarthy
Date of Orders: 7 October 2016
Date of Reasons for Decision: 7 October 2016
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 1301/2015
BETWEEN:
SHU HUI WU
Applicant
AND:
SAMUEL ALEXANDER EIMERL
First Respondent
DIAMOND DEVELOPMENTS ACT PTY LTD
Second Respondent
TRIBUNAL: Presidential Member G McCarthy
DATE:7 October 2016
ORDER
The Tribunal Orders that:
The second respondent within 28 days pay the applicant $5,339.40.
The applicant’s claim against the first respondent is dismissed.
The second respondent’s counterclaim against the applicant is dismissed.
.......................................................
Presidential Member G McCarthy
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 1302/2015
BETWEEN:
QIAO FANG HUANG
Applicant
AND:
SAMUEL ALEXANDER EIMERL
First Respondent
DIAMOND DEVELOPMENTS ACT PTY LTD
Second Respondent
TRIBUNAL: Presidential Member G McCarthy
DATE:7 October 2016
ORDER
The Tribunal Orders that:
The second respondent within 28 days pay the applicant $7,519.27.
The applicant’s claim against the first respondent is dismissed.
The second respondent’s counterclaim against the applicant is dismissed.
.......................................................
Presidential Member G McCarthy
REASONS FOR DECISION
Shu Hui Wu is the applicant in proceeding XD 1301/2015. Qiao Fang Huang is the applicant in proceeding XD 1302/2015. For convenience sake I will refer to Shu Hui Wu as the first applicant and Qiao Fang Huang as the second applicant. Both are tilers who claim against Samuel Alexander Eimerl and a company, Diamond Developments ACT Pty Ltd (Diamond Developments), for unpaid invoices for tiling and associated work they performed for Mr Eimerl and/or Diamond Developments in several new houses in the suburbs of Casey, Crace and Coombs, ACT.
Where the facts and circumstances were materially similar, I heard the matters together.
Mr Zhewei Ling appeared for both applicants. Mr Warton, solicitor, appeared for the respondents.
Shu Hui Wu seeks an order that the respondents pay him $9,615.65 referenced to two tax invoices dated 17 June and 21 July 2015.
Qiao Fang Huang seeks an order that the respondents pay her $7,519.27 referenced to four tax invoices dated 8 April, 17 June, 21 July and 1 September 2015.
Mr Eimerl denies any liability on the basis that he, personally, did not contract with either of the applicants.
Diamond Developments is wholly owned and controlled by Mr Eimerl. He is the sole director and shareholder. Diamond Developments accepts that it contracted with the applicants to perform the tiling work the subject of each applicant’s claim.
Diamond Developments counterclaims against each applicant in identical terms. It claims that the applicant (in each case) performed works at “other building sites for the second respondent which were defective and required rectification.” It claims in each case for the same amount: $7,350. Mr Warton explained that the duplication arose from uncertainty as to which of the applicants was responsible for which defective work. For that reason, I treated the counterclaims as the one claim, but against both applicants.
At hearing, Mr Ling accepted that both applicants contracted only with Diamond Developments. The claims were brought only in contract. That circumstance obliges me to dismiss the claims against Mr Eimerl.
I have considered in turn each applicant’s claims against Diamond Developments and Diamond Developments’ counterclaim against the applicants.
Shu Hui Wu
The applicant’s claim is referenced to two tax invoices dated 17 June and 21 July 2015. The first invoice for $3,909.40 was for tiling work at a house on Arthur Tange Street, Casey, ACT. The second invoice for $5,706.25 was for tiling work at a house on Fred Daly Avenue, Coombs, ACT.
Mr Warton on behalf of Diamond Developments stated that there was no dispute about the amount payable under the invoices or that the work was done. The only basis for disputing liability was a claim that the work was not done properly. That being so, the only issue I needed to consider was whether the applicant’s work was defective and, if so, the extent to which the claim should be disallowed. It was for Diamond Developments to prove.
Regarding the applicant’s first invoice, the applicant tendered a letter dated 3 May 2016 from the owner of the property on Arthur Tange Street, who stated that he “purchased a house and land package from Diamond Developments for which Sam Eimerl was the Director in 2013.” The letter continued:
On the 23rd of February 2016 I had family members (his cousin) of Mr Wui contact me in person at my property asking whether I was happy with the tiling job of my house and whether I had complained to Sam about the completed works. They explained that Sam Eimerl had told them we were not happy with the tiling, therefore payment would not be made for their services.
I advised the family members that although there were several spaces left in the grout, that in fact the tiling was one of the only things I was satisfied with the property. ...
Please note that I am satisfied with the tiling completed in my house and that I made full payment to Diamond Developments. I am happy to provide further clarification for Mr Wui if needed and I am disappointed but not surprised that yet another person has been affected financially and emotionally by Mr Sam Eimerl.
The owner gave oral evidence consistent with the content of his letter.
By way of evidence that the tiling was defective, the respondent relied on a statement from Mr Eimerl in which he stated:
During the period in which the respondent [Diamond Developments] engaged the applicant, I raised with the applicant on many occasions the quality of their work. On each occasion the applicant promised to rectify the work but failed to do so.
Diamond Developments also relied on photographs said to evidence defective work, but all but one of the photographs referred to properties elsewhere.
When determining whether the tiling at the Arthur Tange Street property was defective, I prefer the independent evidence of the owner of the Arthur Tange property. The generalised statement of Mr Eimerl does not identify the nature of the defects or the property or properties to which the statement relates. I am unable to assess from viewing the photograph whether the tiling work at the Arthur Tange Street property was defective. I did not receive any evidence that rectification work was carried out at that property.
Where I am not persuaded on the evidence that there were any defects in the tiling work performed at the Arthur Tange property, and that was the only basis put forward as to why the invoice should not be paid, I allow the claim in full.
Regarding the applicant’s second invoice, Diamond Developments relied on a statement from the property owner about defective tiling but I did not need to consider it because Mr Ling accepted that the tiling work at the property was poor. At hearing, on behalf of the first applicant, he did not press for payment of the second invoice insofar as it related to tiling. He sought only payment for the screeding ($300) and the wet sealing ($1,000) plus GST, about which no complaint was made. I accept that submission.
Diamond Developments claims for the cost of tiling rectification work at the Fred Daly Avenue property. Its evidence in support of that claim is a letter dated 2 May 2016 from the principal tiler from Symmetry Tiling, who states:
This letter is to confirm that we were engaged for rectification work across the following sites:
The letter then states four properties, one of which is the Fred Daly Avenue property, and includes the following entry:
ensuite, bathroom, laundry - $7,430.00
Mr Eimerl gave oral evidence that the work was done, but I am not persuaded on the balance of probabilities that Diamond Developments incurred this rectification cost. Mr Warton accepted that he did not have an invoice from Symmetry Tiling, nor evidence of payment, nor independent evidence that the work was done for the stated price. Mr Warton admitted “we only have the letter”, but it states only that Symmetry Tiling “were engaged”. It does not state that they did any work. If they did, evidence by way of a tax invoice, evidence that it was paid and/or a witness statement from anyone who did the work could and should have been easily provided. I am not persuaded on the evidence that Diamond Developments incurred costs to rectify work that is the subject of the applicant’s second tax invoice.
For these reasons, I allow the first applicant’s second invoice to the extent of the screeding and wet sealing plus GST, being $1,430.
Qiao Fang Huang
The second applicant’s claim is referenced to four tax invoices all of which, save the invoice dated 1 September 2015 for ‘generator usage’ ($300), were for labour costs of tiling and associated works. The tax invoices related to works at four different properties.
Mr Warton, on behalf of Diamond Developments, accepted liability unconditionally for the second applicant’s invoice for the generator usage.
Regarding the other three invoices totalling $7,189.27, again there was no dispute about quantum or that the work was done. The only basis for disputing liability was a claim that the work was not done properly. That being so, again the only issue I needed to consider was whether the second applicant’s work was defective and, if so, the extent to which the claim should be disallowed.
Diamond Developments relied on a photograph said to be at a property in Casey which is said to depict some of the second applicant’s defective work at that property and an email from the owner of that property in which the owner set out his ‘defect list’ following an inspection upon completion of the house which included claimed defects regarding tiling. It also relied on the letter from Symmetry Tiling, which referred to two of the four properties where the second applicant performed tiling work referred to in her tax invoices. It relied also on the oral evidence of Mr Eimerl that rectification work was done.
I am not persuaded by this evidence that the second applicant’s tiling work was defective or, if it was defective, the extent of the defects or that Diamond Developments incurred any rectification costs.
The photograph is annotated with comment about the alleged defects, but those defects are not apparent from looking at the photograph. The tile cutting around the tap spindle is uneven but that is unremarkable where a flange is likely to cover that area of tiling around the tap.
That the property owner provided a ‘defect list’ does not mean Diamond Developments accepted the defects or what work was done to correct them or that Diamond Developments spent money to correct them. Mr Eimerl gave oral evidence that Symmetry Tiling corrected the defects, but did not provide any independent evidence to that effect, for example an invoice, a record of payment or a statement from anyone who performed the work or a statement from the property owner as to what work was done. As Mr Warton said, “We only have the letter”, but the letter does not claim that Symmetry Tiling did any work.
Where I am not persuaded on the evidence that there were any defects in the tiling work performed at the four properties referred to in the second applicant’s four tax invoices, and that was the only basis put forward by Diamond Developments as to why the invoices should not be paid, I allow the second applicant’s claim in full.
The counterclaims
In addition to its claims for the cost of rectifying work that was the subject of the applicants’ invoices, Diamond Developments claims for the cost of rectifying other work performed by the applicants on two other sites in Crace and Ngunnawal. In support of those claims, Diamond Developments relied on photographs of the tiling work said to be defective, the letter from Symmetry Tiling and Mr Eimerl’s evidence that Symmetry Tiling performed work to rectify defects in the work performed by the applicants on the other sites.
Again, I am not persuaded on the evidence that either applicant should be held liable for defective work on the other sites.
Diamond Developments did not produce any independent evidence, for example a tax invoice from either applicant, to establish that either applicant performed the allegedly defective tiling work depicted in the photographs. Assuming that the applicants or either of them did this work, there is also no evidence as to what rectification work was done, who did the work (which might have been done by either or both of the applicants) or what cost Diamond Developments incurred to rectify the work or how its counterclaim for $7,350 was incurred.
Also, if the applicants did the initial work, I have no evidence that Diamond Developments paid them for it, or (if it did pay them) why it paid them when the work was defective or whether it paid them only after the defects were corrected.
The second applicant tendered an invoice which included an amount of $411 for work at the Crace property, but that was for ‘silicon labour & material’ not tiling. As previously discussed, I am not persuaded by the letter from Symmetry Tiling that it did any work at any of the four properties listed in the letter.
For these reasons, the counterclaims are dismissed.
Concluding remarks
These two matters have many hallmarks of disputes that too often arise in the ACT building and construction industry.
Diamond Developments is wholly owned and controlled by Mr Eimerl. For all practical but not legal purposes, Diamond Developments and Mr Eimerl were and are ‘one and the same’. All communication about the work in issue in these proceedings was between the applicants and ‘Sam’ Eimerl, who told the Tribunal that he was not a builder but “worked in real estate”. Yet all the tax invoices were rendered to Diamond Developments.
Mr Warton submitted that Diamond Developments’ claims for the cost of rectifying the applicants’ work (meaning the work the subject of the applicants’ tax invoices and other work carried out by the applicants as claimed in Diamond Developments’ counterclaim) exceeded the applicants’ claims for work done, but stated that Diamond Developments would waive the excess if neither it nor Mr Eimerl were ordered to pay the applicants anything. It became apparent during the hearing that Mr Warton’s primary aim was to ensure that any claim against Mr Eimerl personally was dismissed.
Mr Eimerl calmly explained to the Tribunal that Diamond Developments “doesn’t own anything” and is not “doing any work”. I anticipate that the applicants will be unable to obtain payment for their work, despite my orders, because Diamond Developments does not have any assets against which the applicants could proceed.
These circumstances of subcontractors with limited means who are left unpaid for work done; who are forced to claim against an impecunious ‘shell’ company and, when they claim, face crossclaims for defective work is an all too depressingly familiar story in the industry. The problem is so rife that I question why those who own and/or control companies in the industry should not, at least in some circumstances, by regulation be liable to meet the obligations of their companies.
Nevertheless, I will make the following orders:
1. The second respondent within 28 days pay the applicant in XD 1301/15 $5,339.40.
2. The second respondent within 28 days pay the applicant in XD 1302/15 $7,519.27.
3. The applicants’ claims against the first respondent are dismissed.
4. The second respondent’s counterclaims against the applicants are dismissed.
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Presidential Member G McCarthy
HEARING DETAILS
FILE NUMBER: | XD 1301 and XD 1302/2015 |
PARTIES, APPLICANTS: | Shu Hui Wu and Qiao Fang Huang |
PARTIES, RESPONDENTS: | Samuel Alexander Eimerl and Diamond Developments ACT Pty Ltd |
COUNSEL APPEARING, APPLICANTS | N/A |
COUNSEL APPEARING, RESPONDENTS | N/A |
SOLICITORS FOR APPLICANTS | N/A |
SOLICITORS FOR RESPONDENTS | Mr W Warton |
TRIBUNAL MEMBERS: | Presidential Member G McCarthy |
DATE OF HEARING: | 25 May 2016 |
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