Rintoul v Harding

[2017] NZHC 2638

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI TERENGA PARĀOA ROHE

CIV-2017-488-000072 [2017] NZHC 2638

UNDER

the District Courts Act 1947

IN THE MATTER

of an appeal against the decision of the
District Court

BETWEEN

KENNETH ALAN RINTOUL AND PHYLLIS RINTOUL

Appellants

AND

ROGER DANIEL HARDING Respondent

Hearing:	25 October 2017
Counsel:	RC Mark for Appellants GA Day for Respondent
Judgment:	27 October 2017

JUDGMENT OF DOWNS J

This judgment was delivered by me on Friday, 27 October 2017 at 1 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel: Richard Mark, Kerikeri. Law North Ltd, Kerikeri.

RINTOUL v HARDING [2017] NZHC 2638 [27 October 2017]

A recalibrated appeal

[1]      Mr and Mrs Rintoul very much liked the kitchen made by Mr Harding for their friends, the Crowes.  Mr Harding is a cabinetmaker.  He works alone.

[2]      In late 2014 Mr and Mrs Rintoul entered an oral contract with Mr Harding to build and install a new kitchen in their home.  Mr and Mrs Rintoul were to supply the  finishing  timber—rimu.     The  project  took  longer  than  anticipated.     On

5 November 2015 the Rintouls cancelled the contract.   On 15 December that year they issued proceedings against Mr Harding in the District Court claiming $45,000 general damages, $25,000 special damages, interest and costs.   Mr Harding counterclaimed    for    $9,728.18,    the    sum    owing    on    an    unpaid    invoice. Judge D J McDonald dismissed the Rintouls’ claim.  The Judge upheld Mr Harding’s counter claim.1   Mr and Mrs Rintoul appeal.

[3]      Mr  Mark’s  written  submissions  contended  the  Judge  erred  in  fact  in concluding there was no agreed price or completion date.  However, at the hearing, Mr Mark accepted it was “very difficult” to sustain this argument.   Mr Mark recalibrated the grounds of appeal.   He submitted ss 30 and 31 of the Consumer Guarantees Act 1993 required Mr Harding to complete the kitchen within a reasonable time for a reasonable price.  It followed when Mr Harding had not done so, the Rintouls were entitled to cancel the contract on the basis those terms were essential.  Mr Mark also contended Mr Harding repudiated the contract by making clear  he  would  not  complete  the  kitchen  until  Mr  and  Mrs  Rintoul  paid  his September invoice.

[4]      Mr Day resisted the appeal relying on the Judge’s findings and reasoning. And,  on  the  basis  it  was  disingenuous  for  the  Rintouls  to  complain  about Mr Harding’s idiosyncratic approach when that very feature had attracted them to his work.

Background

[5]      This account of the background is based on the Judge’s factual findings, which are no longer contested.

[6]      The Rintouls and Mr Harding first met in late October or early November

2014.  The Rintouls wished to see if Mr Harding was available and interested in the job.    Mr  Harding  was  available—but  also  reluctant.    He  did  not  like  “doing kitchens”.2   Mr Harding also had other work to complete, including for the Crowes. They and the Rintouls applied what the Judge described as “gentle pressure” to take the job.

[7]      A contract was entered during a second meeting at the Rintouls’ home in November 2014.  Mrs Rintoul had plans she showed Mr Harding.  These had been prepared by a kitchen making company.  The contract was not reduced to writing. Hence the litigation.

[8]      Judge McDonald accepted Mr Harding’s evidence he would build and install a kitchen for the Rintouls:

(a)       On an hourly basis, at a cost of $45 per hour. (b)         Progress payments were required.

(c)       Materials beyond those supplied by the Rintouls were an additional cost.

(d)      There was no fixed completion date.

[9]      The Judge’s conclusion is consistent with a diary entry made by Mr Harding.

[10]     On 1 December Mr Harding sent an email to the Rintouls:

Been thinking more on the payment side of things probably better to do a forward payment of 4 k, then 8 k at the beginning of january and another

payment at the start of February by then we should have a real good idea of the costs.

The Rintouls did not respond.

[11]     The  Rintouls  paid  Mr  Harding  $4,000  on  4  December  2014;  $8,000  on

2 February 2015; $4,000 on 22 March 2015 and $5,000 on 29 April 2015.  Or, a total of $21,000 by the end of April 2015.

[12]     Throughout the project, Mrs Rintoul sent Mr Harding many emails.   Some related to detail, which had not been settled when work began.  Design changes were made along the way.

[13]     By April 2015 the Rintouls began to express anxiety about progress.   For example, on 7 April 2015 Mrs Rintoul asked Mr Harding for “a timeline to when you can start fitting [the] kitchen”.  Mr Harding replied that day he could “probably set bases in at [the] end of [the] week”.

[14]     On 4 May 2015 Mrs Rintoul sent an email to Mr Harding:

Hi Roger,

Could you please give Ken and I a break down of what has been done, matched with the costs to date.

When island will be finished and in place. What has been completed.

What is left to do.

What time frame to complete job. Regards

Phyllis

[15]     On 6 May 2015 Mr Harding responded.  He annexed a handwritten document entitled  “Estimate”.   That  document  implied  a further 214  hours  of work  were required at a cost of $10,930 (including materials).  Mr Harding estimated he would require seven weeks more week to complete the kitchen, assuming he was able to work 30 hours per week.

[16]     On 17 June 2015 Mr Harding sent the Rintouls an invoice for the weeks between 10 May and 14 June 2015.   The invoice was for $5,803.59.   Mr and Mrs Rintoul promptly paid.  By then, they had paid a total of $26,803.59.

[17]     On 8 July 2015 Mr Harding asked the Rintouls if they had a completion date in mind.   They responded the next day saying they wanted the kitchen finished urgently.  And, they understood the kitchen would have been completed by February

2015.

[18]     On  3  September  2015  Mr  Harding  sent  an  invoice  to  Mrs  Rintoul  for

$9,728.18.  On 11 September he sent this email to Mrs Rintoul:

Delivered off some pieces yesterday.  Had a flood through both sheds last

Friday night and still cleaning up the mess.

Anne has asked me to finish all work on her place before change over day on the 23rd of this month.  I have started.

Have finished sink side cabinet so will try and fit it in when waiting for polishes to cure, so will see you when time allows. Will contact you before coming in case it doesn’t suit.

Regards Roger.

[19]     On  24  September  2015  Mrs  Rintoul  discussed  Mr  Harding’s  September invoice.   She said they would not pay it given delay.   Mr Harding responded by email the same day:

Hi Phyllis,

You have refused to pay me for work done on the reconciliation dated Thursday 3rd of September until all work is completed ‘because of the length of time the job has taken’.

I do not accept this as a valid reason for non payment for work previously undertaken.  I feel now that I should stop all work until this concern and payment is resolved.  Should we set an acknowledgement date of this email, say mid day Friday 2nd October?

Regards Roger

[20]     On 15 October 2015 Mrs Rintoul gave Mr Harding 10 days to provide “a detailed completion strategy”.   Mrs Rintoul also said she and her husband would engage another contractor if that was not forthcoming.   Mr Harding replied on

20 October 2015:

Good morning. The meeting was to get an understanding of what a completion strategy is, I am just a cabinetmaker enjoying his work. These modern terms baffle me.

Does it mean I will be paid?  If so then it would be good because last

month’s bills were paid with borrowed money and there is not enough in the

kitty to pay this months current accounts.

If it means am I able to complete the kitchen the answer is yes. There is not a lot of cabinet work to be done just the fiddly finishing and pulling together of the panel work. Time wise I still don’t know.  It is a bespoke kitchen and

as such much care has to be taken to achieve the overall finish but a completion by Christmas should be possible if started as soon as, accidents and major changes or a massive weather bomb would be the only reason for that not happening.

I am quite willing, after payment of monies disputed, to finish your kitchen using it as full and final payment and providing the extra wood from my stores to complete the shortfall. We may have to share the glass cost and as you paid for the stone tops you may again if stone is still a preference for the dining room display.

Hoping that this [fulfils] the meaning of a [completion] strategy, Regards Roger Harding.

[21]     It follows Mr Harding agreed to complete the work by Christmas (all going well), providing the Rintouls paid him the outstanding amount of $9,728.18.

[22]     The Rintouls cancelled the contract on 5 November 2015.

[23]     Judge   McDonald   concluded   the   contract   between   the   Rintouls   and Mr Harding contained no provision, express or implied, in relation to either price or completion.  However, the Judge considered s 30 of the Consumer Guarantees Act

1993 operated to require Mr Harding to provide his services within a “reasonable time”. That section provides:

30   Guarantee as to time of completion

Subject to section 41 of this Act, where services are supplied to a consumer there is a guarantee that the service will be completed within a reasonable time in any case where the time for the service to be carried out is not—

(a)   Fixed by the contract; nor

(b)   Left to be fixed in a manner agreed by the contract; nor

(c)   Left to be determined by the course of dealing between the parties.

[24]     The Judge concluded Mr Harding had not breached s 30:

[64]    Mr Marley, an expert called by the plaintiffs, said it would take 500 hours  to  “build  that  kitchen  from scratch”.   Two  months  work  for  two cabinet-makers from his firm, one cabinet-maker four months.  I, however, must bear in mind Mr Marley’s much more sophisticated set-up.   His company completes all the cabinets within their factory and then transports all of them to the site to be installed.   That is a different way to which [Mr Harding] works.  He produces some, takes them to the site and installs them.  Unlike Mr Marley, Mr Harding required good weather over a number of days to dry the finishing coats as some of that was done outside.

[65]    Mr Harding was, and I mean no disrespect to him, an old-fashioned cabinet-maker, more intent in getting a long-lasting superior product than a mass-produced one in a factory.

[66]    From the limited evidence before me I cannot say that Mr Harding’s estimate to complete the job was unreasonable.  Mr and Mrs Rintoul did not want a kitchen built by a kitchen company.  They already had quotes from two kitchen companies prior to approaching Mr Harding.  They wanted one to rival their friends, the Crowes, and so wanted and did engage Mr Harding to ensure that.

[67]    As good friends of the Crowes they would have known how long it would take, given the way that Mr Harding worked.  It was not until many months into the project that [Mrs Rintoul] starts with gentle enquiries as to how long it is going to take, and then they become more persistent until the letter of 1 October 2015.

[68]  In my view, the time to complete the kitchen was reasonable.

First ground of appeal: completion within a reasonable time?

[25]     Mr Mark submitted the Judge erred in reaching this conclusion.  He noted the Judge  had  earlier  referred  to  the  time  the  Rintouls  were  without  a  kitchen—a different inquiry.   Mr Mark emphasised the Rintouls’ correspondence expressing frustration at delay, Mr Harding’s May estimate the kitchen  would be complete within seven weeks, and Mr Marley’s  expert  testimony a project  of this nature should take approximately four months from start to finish for one efficient tradesperson working alone.  Mr Mark observed by 3 September 2015, Mr Harding had submitted invoices for 676 hours of work and yet the job remained incomplete.

[26]     Mr Mark is correct to observe the Judge did consider the time the Rintouls were without a fully functional kitchen.  However, this inquiry did not distract the Judge from the statutory one, as the Judge then expressly considered whether the completion time was reasonable.  I consider it was, for reasons which reduce to the proposition reasonableness is a function of circumstance.

[27]     To elaborate, Mr Marley said it would “take over 500 hours”3  to make this kitchen.  This testimony presupposed the tradesperson was operating as Mr Marley does: with design detail settled in advance; all cabinetry delivered simultaneously; and factory manufacture—albeit to a very high standard of quality.  But Mr Harding

did not work this way.  Detail was not settled before work commenced, and design changes were made as things progressed.  Cabinetry was constructed and installed piecemeal.  And, Mr Harding did not have a factory (he had a shed).   Stained or painted cabinetry sat outside to dry, in turn requiring good weather.

[28]     The  Judge’s  analysis  respected  these  differences.     Moreover,  Mr  and Mrs Rintoul wanted Mr Harding to construct and install their new kitchen because of his idiosyncratic approach.   Mr Harding was undoubtedly slow.   But the Rintouls must have known that.

[29]     Like Judge McDonald, I am satisfied Mr Harding’s services were reasonable in terms of s 30.  If Mr Harding had been allowed to complete the project, it is likely he would have done so by Christmas 2015.   True, that is a long time for a new kitchen.   But again, Mr Harding’s approach had impressed the Rintouls.  And, he had, after all, spent six years doing various work for their friends, the Crowes.

[30]     Furthermore, the weather was not kind to Mr Harding, in turn affecting his ability to dry the cabinetry.  And, Mr Harding spent approximately 200 additional hours polishing and sanding.  Other work meant he not could concentrate exclusively on this project.

[31]     In summary, Mr Harding’s craftsmanship and “one-man” approach meant the likely  timeframe  for  completion,  December  2015,  was,  as  the  Judge  found, reasonable in the circumstances.

Second ground of appeal: a reasonable price?

[32]     Mr Mark contends s 31 of the Consumer Guarantees Act required the price for the kitchen to be reasonable, when it was not.4  The point was not taken below.

[33]     Section 31 is similar to s 30 of the Act.  It provides:

31   Guarantee as to price

(1)   Subject to section  41  of this Act,  where services are supplied to a consumer there is a guarantee that the consumer is not liable to pay to the supplier more than a reasonable price for the service in any case where the price for the service is not—

(a)   Determined by the contract; nor

(b)   Left to be determined in a manner agreed by the contract; nor

(c)   Left to be determined by the course of dealing between the parties. (2)   Where there is a failure to comply with the guarantee in this section, the

consumer's right of redress is to refuse to pay more than a reasonable price.

(3)   Nothing in this Part of this Act confers any other right of redress.

[34]     There are obvious difficulties with this ground of appeal.

[35]     Mr Harding offered to charge no more than $9,728.18 for the remaining work.   So, if he had been allowed to complete the kitchen, the likely price would have been $36,531.77.  Mr Marley, the Rintouls’ expert witness, said in evidence-in- chief the kitchen would take “over” 500 hours to make “from scratch”.  His company charges $55 per hour.   This produces a figure of $27,500.   In cross-examination, Mr Marley said he could not produce this type of kitchen for $33,000, and that figure would be a “severe under quote”.  Mr Marley stressed the quality of his company’s work.   Consequently, it is awkward to consider Mr Harding’s price unreasonable, even allowing for the provision of timber by the Rintouls.

[36]     Mr Marley said it would cost $45,000 if he completed the kitchen given the idiosyncratic nature of the part-finished job; hence the Rintouls’ claim for $45,000 general damages.  Mr Harding had, however, offered to complete the kitchen without additional cost (beyond payment of $9,728.18).

[37] Mr Mark stressed Mr Harding’s inefficient approach to the job; see [27]. But Mr and Mrs Rintoul knew Mr Harding worked alone. And, they must have known Mr Harding could not bring efficiencies consistent with a larger factory-run cabinetry business.

[38]     Finally, s 30 makes clear the Rintouls’ right of redress for a breach of the provision could not extend to a claim for general damages based on the cost of another contractor to complete the work, or compensatory damages.  The statutory right of redress is confined to paying no more than the reasonable price; see subs (2) and (3).

Third ground of appeal: cancellation for repudiation

[39]     Judge McDonald dealt with this argument this way:5

Mr Mark submitted that Mr Harding repudiated the contract by refusing to continue to perform it.   He refers me to s 7(2) Contractual Remedies Act

1979; that provision provides that:

A party to a contract may cancel it if, by words or conduct, another party repudiates the contract by making it clear that he does not intend to perform his obligations under it or, as the case may be, to complete such performance.

Mr Mark submitted that it needs to be established the defaulting party has made clear his intention to no longer perform his side of the bargain.  As I have already found there was no fixed price, nor completion date, in relation to this contract.  Mr Harding did not, in my view, clearly indicate that he was not going to complete his side of the bargain, that is, that he was not going to fully perform his side.  He wanted to get paid for the work and materials for the preceding three months before he continued.  He made it clear that if he was paid $9728.18, the amount of his last invoice, he would complete the contract.  That is, install the kitchen cabinets at no further cost.  That would be  done  he  hoped  by  Christmas.    It  was  the  plaintiffs  who  refused  to entertain that.

[40]     Mr Mark contended the Judge erred as Mr Harding had, by his conduct, clearly repudiated his obligations to complete the kitchen within a reasonable time, and at a reasonable price.  However, I have already concluded price and completion time were reasonable.

[41]     Mr Mark  emphasised  Mr Harding  had  declined  to  continue  work  in  the absence of payment of his outstanding invoice.   However, Judge McDonald concluded  the  contract  was  on  an  hourly  basis.    And,  as  the  Judge  observed, Mr Harding offered to complete the kitchen by Christmas at no cost beyond the outstanding sum.  I agree with the Judge’s conclusion Mr Harding did not repudiate

the contract.

5      Rintoul v Harding, above n 1, at [74]–[75].

[42]     The appeal is dismissed.  Mr Harding is entitled to costs on a 2B basis.

……………………………..

Downs J