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Ninth Avenue Pty Ltd v Euphoria Hair and Beauty Gallery QCAT 145
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Ninth Avenue Pty Ltd & Anor v Euphoria Hair and Beauty Gallery  QCAT 145
NINTH AVENUE PTY LTD AND NAC CEILINGS AND PARTITIONS PTY LTD
YVONNE JOAN GARDNER TRADING AS EUPHORIA HAIR AND BEAUTY GALLERY
BDL024-21 and BDL028-21
26 April 2022
10 March 2022
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – DAMAGES – PERFORMANCE OF WORK – an agreement between two friends to fit out a hair dressing and beauty salon – first scope of works carried out – the applicant builder did not invoice for the scope of works –the respondent proposed that the scope of work was carried out as per a ‘contra deal’ whereby hair dressing services would be provided to the applicant in lieu of payment – the respondent relocated her business and engaged the applicant to fit out the new premises – second scope of works carried out – the applicant invoiced the respondent for the second scope of works – the respondent disputed the total amount invoiced but paid a large portion of the amount – the remaining amount of the invoice remained unpaid – the applicant instituted proceedings for both scope of works
Keith Wilson, sole director of Ninth Avenue Pty Ltd and NAC Ceilings and Partitions Pty Ltd
Y D Gardner
REASONS FOR DECISION
- Keith Wilson (Mr Wilson) is a carpenter and the sole director of applicant companies, Ninth Avenue Pty Ltd and NAC Ceilings and Partitions Pty Ltd. The respondent, Yvonne Joan Gardner (Ms Gardner) is the owner of a hairdressing salon called Euphoria Hair and Beauty Gallery. Mr Wilson and Ms Gardner enjoyed a friendship for over 25 years, and for a period of time she was his regular hairdresser.
- On two separate occasions, Ms Gardner engaged Mr Wilson to carry out a scope of works at two different premises occupied by her hair dressing and beauty business. Those premises were located in the Townsville suburb of Mundingburra (‘Mundingburra premises’) and the Townsville CBD (‘CBD premises’).
- In 2017, Mr Wilson’s company Ninth Avenue Pty Ltd carried out the first scope of works for Ms Gardner’s business at the Mundingburra premises. Sometime later in 2020, Ms Gardner relocated her business to a new location and Mr Wilson’s other company, NAC Ceilings and Partitions Pty Ltd was engaged to undertake a fit out of the CBD premises.
Application BDL024-21 – Ninth Avenue Pty Ltd
- Ms Gardner had established her hair dressing and beauty business in the Townsville suburb of Mundingburra. In 2017, an opportunity arose for her to expand her business through the acquisition of the neighbouring vacant shop. Knowing of Mr Wilson’s skills, she approached him to undertake a scope of works that included the fit out of the intended extension. This included the installation of a doorway between the existing salon and the vacant shop, and the supply and installation of items such as vanity basis, mirrors and tiles.
- Because Mr Wilson and Ms Gardner were friends, there was no initial discussion about the costs involved in undertaking the work. They agreed there would be no written contract with Ninth Avenue Pty Ltd and Ms Gardner would be billed at a time after the work was completed.
- There is no dispute that a verbal agreement was reached between two good friends, there were no set terms to the agreement; no set date for the completion of the works and the work was to be completed as required and requested by Ms Gardner. This was the basis for the work undertaken.
- Mr Wilson said that the scope of works at the Mundingburra premises took place over the period of a few weeks. Ninth Avenue Pty Ltd employed four different tradesmen at the site, including a carpenter and a plasterer. He said that overall, the costs associated with completing the scope of works was $16,116.33 including materials and labour costs. This amount did not include the employee expenses of superannuation, holiday pay, workcover and payroll tax.
- It seems the works undertaken by Ninth Avenue Pty Ltd was not in any way defective or required remedial work, and it was after the work was completed that Mr Wilson gave Ms Gardner an estimate of what costs were involved. This was later described at the Tribunal hearing as a rough estimate of $8,575.
- Mr Wilson claimed that there was no written contract for the work undertaken on the Mundingburra premises because Ms Gardner had taxation issues, she was struggling with an ATO debt and could not pay her BAS statements. Essentially, she was drowning in debt and working on a payment plan with the ATO. He felt sorry for her and suggested that for the time being, she could just provide her services as a hairdresser free of charge to him and his family members to work off the amount owed. This arrangement continued through to November 2020 until their relationship soured over a dispute regarding payment for the scope of works undertaken at her CBD premises. It was only then that he decided to issue Ms Gardner an invoice for the full outstanding amount for the work undertaken on the Mundingburra premises.
- Ms Gardner denied and disputed Mr Wilson’s claim about the taxation debt. She said their agreement for the work undertaken was a ‘contra deal’ and there was never any discussion about him being paid for the work carried out. Instead, she was to provide hair dressing services to Mr Wilson and other members of his family. As time went by, she recorded each occasion when either Mr Wilson or a member of his family attended her salon. For the period of a little over three years, the value of the services her salon performed amounted to $3,236.55.
- Ms Gardner told the Tribunal that she specifically recalls that on 11 May 2018 Mr Wilson provided her with details of some wage amounts for the work undertaken, along with some invoices for materials used. She recalls the total amount being $8,575. That amount included $3,350 for wages.
- It is apparent from the evidence of both parties that the dispute between the parties for the payment of the work carried out on the Mundingburra premises only arose after they disagreed over the payment for the work later carried on Ms Gardner’s CBD premises.
Application BDL028-21 – NAC Ceilings and Partitions Pty Ltd
- After Ms Gardner secured the CBD premises for her business, work was required to fit out those premises. Sometime around September or October 2020, she again approached Mr Wilson to undertake the fit out, which he agreed. At that time, they were still very good friends.
- Just like the work undertaken on the Mundingburra premises, the basis for the carrying out the work was a verbal agreement between two good friends. They did not set any terms to the agreement; and there was no set date for the completion of the work.
- On this occasion, Mr Wilson utilised his other company, NAC Ceilings and Partitions Pty Ltd, and the work was completed in December 2020. He then presented Ms Gardner with an invoice for $8,011.29.
- Ms Gardner disputed the invoiced amount. She claimed she was overcharged. Notwithstanding her disagreement with the overall amount of the bill, she paid Mr Wilson $5,000, leaving an outstanding balance of $3,011.29. By this time, the earlier good relationship between the parties had evaporated.
- Mr Wilson then filed an application in the Tribunal seeking payment from Ms Gardner for what he claimed was the outstanding balance owed for the work undertaken on the CBD premises, along with proceeding relating to the Mundingburra premises.
- In support of her case, Ms Gardner engaged another builder to provide a costing of the work undertaken by NAC Ceilings and Partitions Pty Ltd on the CBD premises. That other builder estimated that the fit out undertaken would have cost $6,875. It is noted that even on her own costings, the amount of $5,000 she paid Mr Wilson was less than the estimated amount arrived at by the other builder.
Conclusion and Damages
- The applicant companies through their director Mr Wilson, seeks two separate amounts for work undertaken at the Mundingburra premises in 2017 and the CBD premises in 2020.
- The parties do not dispute that there was no written contract for either of the scopes of work undertaken; it was a verbal agreement with no set terms.
- Ms Gardner accepts that the work undertaken at both premises was carried out with due diligence and without any requirement for rectification or remedial work.
- Ms Gardner argued that the agreement with Mr Wilson for the work undertaken on the Mundingburra premises was a ‘contra deal’ whereby she would provide hairdressing services to him and his family members. Both Mr Wilson and Ms Gardner agree that for a period of time, she did perform hairdressing services for him and members of his family. Because the agreement was by way of a ‘contra deal’, Ms Gardner kept records of the hairdressing services provided to Mr Wilson and his family, along with the monetary amount for those services.
- Mr Wilson does not accept that the work carried out at the Mundingburra premises was for exchange of services. He said he held off billing Ms Gardner because she was experiencing financial difficulties. Ms Gardner denies this.
- At the Tribunal hearing, Ms Gardner revealed that she had seen a bill from Mr Wilson for the amount of $8,575 for the Mundingburra premises. She accepted that this amount is a fair representation for the work undertaken by Mr Wilson at those premises, but argued that if anything was owed to Mr Wilson, then her services to Mr Wilson and his family totalling $3,236.55 should be considered and deducted accordingly.
- It is my view that there is a compelling argument that Ms Gardner’s suggestion of a ‘contra deal’ does carry some weight. At the time of establishing an agreement that Mr Wilson would carry out the scope of works at the Mundingburra premises, the parties were very good friends and they trusted each other. That trust was such that any thought of a contract between them was not even considered. When the work was completed, there were no issuing of invoices, no demands for payment and an acceptance by both parties that Ms Gardner would provide hairdressing services to Mr Wilson and his family.
- Even when engaged to undertake the scope of works at the CBD premises, there does not seem to be any issue raised by Mr Wilson with Ms Gardner about any outstanding payment for the Mundingburra premises. This only became an issue when she questioned the cost of the work undertaken on the CBD premises. I note the arrangement between them regarding the hair dressing services continued through to until their relationship soured over the dispute about the scope of works undertaken at her CBD premises.
- In regard to Mr Wilson’s claim regarding the Mundingburra premises, it is my view that this was an afterthought following the dispute between the parties over the costs of the work undertaken on the CBD premises. The work undertaken on the Mundingburra premises was carried out some three years prior to the CBD premises, and it is only when proceedings were instituted for the latter work that Mr Wilson decided to commence proceedings relating to the Mundingburra premises. I accept that it was Mr Wilson who suggested that in lieu of payment, he and his family could receive hair dressing services from Ms Gardner. It is for those reasons just explained that Mr Wilson’s application relating to the Mundingburra premises should be dismissed.
- In respect to the CBD premises, Ms Gardner’s position is that she would have paid the entire amount billed by Mr Wilson had he provided to her invoices to clarify the actual amount. Because she did not accept the total amount billed, she paid some of the bill and then engaged another builder to assess the true value of the work undertaken. On this point, I accept that it is not an unusual circumstance whereby one builder’s estimate for a scope of works differs from another builder’s estimate. The difference in the amounts arrived at by Mr Wilson and the other builder are in my view within the range of what can be expected as a reasonable variance in estimates.
- Having considered all the evidence relied upon by both parties, including their individual testimony to the Tribunal and submissions relied upon, I am satisfied that the Orders are as follows.
- Mr Wilson’s application relating to the work undertaken on the Mundingburra premises by Ninth Avenue Pty Ltd should be dismissed for those reasons already explained.
- In respect of the work undertaken on the CBD premises, Ms Gardner is to pay NAC Ceilings and Partitions Pty Ltd the sum of $3,011.29 for the work undertaken. That payment is to be made by 4:00pm on 27 May 2022.
- Each party was self-represented during these proceedings and as such they should each bear their own costs of the proceedings.
 Application BDL024-21 filed 05/02/2021.
 Application BDL028-21 filed 05/02/2021.
 Not including GST.
 Payment made on 16/12/2020.
 Costings undertaken by Alexander McClure who is a QBCC registered carpenter and Low-rise Builder.
 Pursuant to the Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100.
- Published Case Name:
Ninth Avenue Pty Ltd & Anor v Euphoria Hair and Beauty Gallery
- Shortened Case Name:
Ninth Avenue Pty Ltd v Euphoria Hair and Beauty Gallery
 QCAT 145
26 Apr 2022