Freestyle Constructions and Maintenance Pty Ltd v Chen
[2015] QCAT 343
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- Unreported Judgment
- Freestyle Constructions and Maintenance Pty Ltd v Chen[2015] QCAT 343
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Freestyle Constructions and Maintenance Pty Ltd v Chen[2015] QCAT 343
Freestyle Constructions and Maintenance Pty Ltd v Chen[2015] QCAT 343
CITATION: | Freestyle Constructions and Maintenance Pty Ltd v Chen [2015] QCAT 343 |
PARTIES: | Freestyle Constructions and Maintenance Pty Ltd (Applicant) |
v | |
Li Meng Shu Chen (Respondent) | |
APPLICATION NUMBER: | BDL270-14 |
MATTER TYPE: | Building matters |
HEARING DATE: | 22 July 2015 |
HEARD AT: | Brisbane |
DECISION OF: | Member Howe |
DELIVERED ON: | 4 September 2015 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | The claim by the applicant is dismissed. The counter-application by the respondent is dismissed. |
CATCHWORDS: | Terms of contract - minor civil dispute - transfer to the building list - credibility –variations - application of Domestic Building Contracts Act 2000 (Qld) - unreasonable hardship - exceptional circumstances - lack of evidence to the building Better Homes Queensland Pty Ltd v O'Reilly & Anor [2012] QCATA 37 Poiner v Quirk & Anor [2007] QDC 299 |
APPEARANCES and REPRESENTATION (if any):
APPLICANT: | Cheuk Tik Kwok represented the applicant company |
RESPONDENT: | Li Meng Shu Chen represented herself |
REASONS FOR DECISION
BACKGROUND
- [1]Ms Chen owns a home at Sunnybank. She engaged a builder to do extension work at the property. The builder didn’t finish the work. She entered into a contract with Mr Kwok through his company to complete some or all of the work.
- [2]Mr Kwok did work at the property but he did not roof or finish off a carport at the house. The parties fell out about that. Mr Kwok maintained it was never within his contract. Ms Chen claimed to the contrary. Additionally Mr Kwok claimed extra for variation work he alleged he did. Ms Chen disagreed the variation work claimed for was additional to the contract.
- [3]Mr Kwok initially commenced proceedings in the Tribunal by way of Minor Debt application. He claimed $20,195.95 for the variations to the contract. Ms Chen sought to counter-claim against Mr Kwok. The counter-application was over the monetary limit for minor civil disputes ($25,000) and counter-claims are not allowed in minor debt actions. The file was transferred to the building list and orders made as to the parties filing statements of evidence. In the Minor Debt proceedings Mr Kwok had commenced the action in his own right. It appears after evidence was heard the Tribunal ordered the name of the applicant be changed to Mr Kwok’s company, Freestyle Constructions and Maintenance Pty Ltd.
- [4]The applicant’s claim remains for the sum of $20,195.95 for variations. Ms Chen has counter-claimed seeking $38,564.15 damages for failure to complete work under the contract plus she seeks liquidated damages of $37,150.
- [5]Ms Chen required an interpreter at hearing. She also had her son Kwan Hang Chen present to assist her.
The Issues for Determination
- [6]The issues for determination in this matter are as follows:
- Did the contract between the applicant and respondent executed 13 December 2012 include the installation of a roof to an external carport structure?
- If the answer to that is yes, what damages flow in result of the failure of the builder to do that?
- If the answer is no to question 1, is there otherwise incomplete or defective building work?
- If the answer to 3. is no, to what relief, if any, is the respondent entitled?
- Is the builder entitled to payment for variations to the contract?
The Carport Issue
- [7]Ms Chen and Mr Kwok signed a contract on 13 December 2012. The description of the work to be done under the contract was “Continue from the ex-builder. Please refer to quote ref 001 dated 8/12/12.”
- [8]Mr Kwok says the quote with the reference 001 dated 8 December 2012 makes no reference to building a new roof for the carport. That quotation sets the cost of the job at $62,000, which is the amount set out in the contract.
- [9]Ms Chen’s evidence however was that she had never seen that quote relied on by Mr Kwok before it was filed in the Tribunal. Her evidence is that the only document she was ever provided with was a document entitled Work Schedule Lists, also dated 8 December 2012, which described the stages of work under the contract. There are 4 stages mentioned. Stage 2 includes “install new roof for the carport area”. There is a cost noted at the end of that document of $62,000 which matches the price under the contract.
- [10]Mr Kwok’s evidence was that in fact there had been numerous quotes provided to Ms Chen before the contract of 13 December 2012 was signed, something in the order of 7 to 10. Mr Kwok did not tender those other quotes other than a quotation dated 25 October 2012 for $81,950 which did include the installation of a new roof for the carport area.
- [11]He said at the time Ms Chen was claiming from the BSA (now the Queensland Building and Construction Commission) against the previous builder and she had hoped the BSA would pay for or in some fashion be responsible for installing that new roof in the carport area.
- [12]Just what potential responsibility the Commission had for that was not made clear at hearing and is not explained in statements of evidence. In any case, Mr Kwok said he had provided two quotes, one including building the car port roof for a price of $81,950 (should the Commission refuse responsibility for building the car port), and the other for $62,000 (if the Commission did). He said the contract the parties signed on 13 December 2012 was based on his quotation for $62,000 reference 001 which did not include the car port.
- [13]The document relied on by Ms Chen, entitled Work Schedule Lists dated 8 December 2012, bears Mr Kwok’s initials at the bottom of each page. As stated, it showed a contract price of $62,000 but did include a reference to the carport. Mr Kwok said the contract was referring to the quote, not the work schedule. As with much of the evidence given orally at hearing by both parties, the evidence was confusing because the parties failed to file adequate statements of evidence before hearing and much of the evidence given was given as evidence-in-chief by oral testimony. Initially Mr Kwok said the reference in the work schedule to “install new roof for the carport area” was a grammatical error. He was actually referring to the installation of a gyprock ceiling to the existing internal garage.
- [14]Subsequently however Mr Kwok said during further cross-examination about the work schedule document dated 8 December 2012 that he had probably used an earlier draft work schedule that he had prepared for the $81,000 quote which included the installation of the roof to the car port area. He should have deleted the reference to the car port in the work schedule document relied on by Ms Chen.
- [15]Mr Kwok says he gave two work schedule documents and two quotes to Ms Chen at about the same time. This was because at that time, up to 8 December 2012, it was unclear whether the Commission would cover the cost of the car port work. It does not assist that the work schedule relied on by Ms Chen and the quote relied on by Mr Kwok both bear the reference 001. Mr Kwok maintains it was only after the Commission rejected Ms Chen’s claim for the car port that she decided to claim for that work against him.
- [16]The evidence adduced by the parties was confusing and inadequate and in no small measure their difficulties are as a result of their lack of documentation and attention to detail. To a large extent the parties are authors of their own misfortunes.
- [17]There is no documentary evidence produced by either party dealing with the period of 5 days between 8 December 2012 when the quotation for $62,000 and the work schedule document of the same date was said to be provided and the signing of the contract on 13 December 2012. There is no evidence about any determination of the Commission, nor indeed whether the Commission’s involvement was under the statutory insurance scheme or concerned a direction to rectify given to the previous builder.
- [18]During the hearing Ms Chen raised an additional complication concerning the previous builder and Mr Kwok. It appeared Mr Kwok was the project manager of the first builder during the term of the initial contract. Mr Kwok’s evidence however was that he did not work on Ms Chen’s site. He worked other sites for his employer. His only involvement before he became involved in work onsite was his delivery of his employer’s initial quote for the job to Ms Chen.[1]
- [19]What is clear is that Ms Chen paid the builder three progress payments of $18,600 each under the contract. In the work schedule of 8 December 2012 the construction of the car port roof was scheduled to be built as part of stage 2. Indeed it would appear to have formed the significant component of work in that stage. Yet that was not done. Yet Ms Chen paid the progress payment which covered that work on her interpretation of the scope of work under the contract. Mr Kwok produced at hearing a different work schedule list for what he said was the agreed work under the contract.[2] That different work schedule does not include any work on a car port, for stage 2 or otherwise.
- [20]Payment of the stage 2 progress claim supports Mr Kwok’s version of affairs, not Ms Chen’s.
- [21]The evidence of the parties conflicts in nearly all respects. Neither party impressed me as entirely reliable witnesses though I found the builder’s evidence to be more precise and persuasive than that of Ms Chen, who adopted a very broad brush recall of events. Generally I preferred the evidence of the builder, Mr Kwok, to that of Ms Chen concerning discussions prior to contract about the scope of work to be performed under the contract.
- [22]Ms Chen said she signed the contract but admitted she did not read it. The reference in the contract to the scope of work to be completed under the contract is clear. It is the work referred to in quote 001, not a work schedule reference 001.
- [23]In final result I accept the evidence of the builder that the scope of work under the contract between the parties did not include installation of the car port roof.
The Performance of the Work Under the Contract
- [24]Is there otherwise incomplete or defective building work under the contract? The contract consists of only the schedule to a 2006 BSA major works contract. That document refers to additional standard general conditions of contract, but no general conditions were tendered at hearing.
- [25]Ms Chen claims Mr Kwok failed to erect fence panels and perform agreed landscaping work and that he damaged roof gutters.
- [26]Dealing first with the gutters, she said all the gutters leaked. She blamed Mr Kwok.[3] Why he was responsible for leaking gutters surrounding the house she does not explain. He was not the builder who installed the gutters save for that small part attributable to a room extension. He denies responsibility for defective or damaged guttering. He said any damage to the gutters was done by plaster renderers who were engaged by Ms Chen. Mr Kwok did say in his closing submissions that he was happy to return and fix the gutters. However I do not take that statement to be any admission of liability but simply an offer to perform work voluntarily with a view to resolving some issues between the parties. In the absence of any adequate explanation why he is responsible for damage to gutters I accept his evidence that he is not responsible because he did not install them or damage them. Despite his offer to perform work on the gutters, I conclude it is not appropriate that he be ordered by the Tribunal to perform such work.
- [27]Mr Kwok does admit however that he did not finish the fence panelling. He said that work was more appropriately done after the brick posts supporting the panels were rendered and painted. He said Ms Chen agreed to leave that pending the rendering and painting of the fence posts.[4] Ms Chen’s evidence is vague on this point. I accept the evidence of the builder that the parties agreed to wait for that rendering and painting before installing the panels. I also accept the builder’s evidence that he was never advised prior to the parties falling out that the renderer had completed his work. The home owner has not had the panelling work done, but has not paid anything to the builder for that work either. In any case there is no evidence as to independent cost of completion. There is still an amount of $3,100 unpaid under the contract. Mr Kwok says that covered the cost of the panelling. There is no evidence from Ms Chen that that is not the case. Accordingly no order is made against the builder concerning the failure to complete the fence.
- [28]There is an additional matter of power points and lighting. In Ms Chen’s statement of evidence[5] she claimed lighting and power points have not been supplied to the car port area. It is not clear how many points or lights are involved. There is no estimate of the cost of that work submitted by her.
- [29]Mr Kwok disputes the claim. He says the power points and lights have all been installed.[6] He does say something in a statement of evidence filed by him that suggests a contradiction of that assertion,[7] but the statement of evidence is difficult to understand and he gave sworn evidence at hearing that the only thing outstanding under the contract was the fence panelling. I conclude his sworn evidence on this point should be accepted. In any case as stated, there is no adequate evidence from the owner as to what outstanding electrical work is involved nor evidence of cost of completion by a third party contractor. It is impossible to calculate a cost based on the quote. The builder is not responsible for this suggested further work.
- [30]Finally Ms Chen claims for the cost of landscaping the front yard area. Mr Kwok says he did that work but the work was damaged by the renderers working on the house and the fence.[8] I accept his evidence on this point. Again in any case there is no evidence of cost of completion by an independent contractor.
- [31]I therefore am unable to conclude there is incomplete or defective building work under the contract entitling the owner to recover damages or compensation from the builder.
Variations to the Contract
- [32]This matter commenced as a Minor Civil Dispute – Minor Debt claim in the Tribunal with Mr Kwok seeking recovery of the cost of variations to the contract. None of the variations were agreed to in writing between the parties. Had they been it is unlikely much of the present dispute would have arisen between the parties.
- [33]Given this dispute arose prior to 1 July 2015, the applicable law to be applied is that covered by the Domestic Building Contracts Act 2000 (Qld) (DBCA). The building contract was a regulated contract.[9] By s 79 of the DBCA variations to a regulated contract must be put into writing signed by the parties before any building work associated with the variations is done.
- [34]Section 80 sets out the required contents of the variation document. They are quite particular, and include a description of the variation, the change in the contract price and when payment for the variations is to be made. By s 83 a copy of the variation document must be provided to the building owner by no later than 5 days after the variation is agreed.
- [35]None of these requirements were complied with by Mr Kwok. By s 84 if the variation was originally sought by the owner, the contractor may recover for the variations with the Tribunal’s approval. The Tribunal’s approval may be given if either there are exceptional circumstances warranting the builder’s recovery or the builder would suffer unreasonable hardship because of the enforcement of obligations set out in the DBCA, and then that it is not unfair to the building owner that the builder recover an amount.
- [36]Here Mr Kwok gave no evidence about exceptional circumstances warranting his recovery for variations. There was no evidence that he even attempted to reduce the variations to writing, let alone seek the owner’s signature to written variations.
- [37]I conclude Mr Kwok either ignored the requirements of the DBCA concerning variations or was ignorant of them. In either case, I cannot conclude there are any exceptional circumstances here warranting recovery of the variations to the contract. Nor am I able to conclude, on the paucity of supporting evidence concerning Mr Kwok’s financial affairs and circumstances, that he would suffer unreasonable hardship within the meaning and intent of that term in the DBCA.
- [38]He simply suggested he would suffer unreasonable hardship if he was not paid for the work done and it would be unfair for the owners not to pay him. He filed no documentary evidence however to support that claim.
- [39]“The test of unreasonable hardship requires an assessment of the impact of that sanction on the builder in the circumstances in which the non-compliance occurred. That is both a subjective and an objective inquiry: subjective, in that evidence must be led to demonstrate hardship to the builder; and objective, in that the nature and extent of the hardship must be unreasonable in the circumstances in which it occurs.”[10]
- [40]An applicant must needs adduce evidence to support a claim that he would suffer unreasonable hardship if the provisions of the DCBA were enforced. It is not simply a question about the builder suffering a loss of money if his variations are unpaid. As stated by McGill DCJ in Poiner v Quirk & Anor:
“…It does not appear from the written submissions on behalf of the appellant that any exceptional circumstances were even alleged: p 13. Indeed those submissions do not address the requirements of s 84 at all; they proceed on the basis that it is sufficient that the work was carried out on instructions from and with the knowledge of the respondents, which is not enough to satisfy s 84. There is nothing to indicate that there would be any unreasonable hardship to the building contractor in enforcing the requirements of ss 79, 80, 82, and 83 in the present case.”[11]
- [41]Mr Kwok gave oral testimony that he was owed other money by other people and he had judgments outstanding for that. He also said he needed capital to commence jobs. His evidence was no more precise or more detailed than that however. There was no documentary evidence filed. In the circumstances I find there is no satisfactory evidence adduced by the builder to indicate that there would be any unreasonable hardship to the building contractor in enforcing the requirements of ss 79, 80, 82, and 83 in the present case. Accordingly the builder’s claim for the cost of variations fails.
Conclusion
- [42]The appropriate orders here are that both the applicant’s claim and the respondent’s counterapplication be dismissed.
Footnotes
[1] Transcript page 42 L3.
[2] Ex 5.
[3] T14 L13.
[4] Ex 1 page 1.
[5] Ex 3.
[6] T94 L21 and 33.
[7] Ex 2 at [1b].
[8] Ibid at [1d].
[9] Domestic Building Contracts Act 2000 (Qld) s 9.
[10] Better Homes Queensland Pty Ltd v O'Reilly & Anor [2012] QCATA 37 at [28] per Kingham DCJ.
[11] [2007] QDC 299 at [73].