Brian Johnston Plan Design Pty Ltd v Strategic Developments Logan Pty Ltd [2021] QCAT 342

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Brian Johnston Plan Design Pty Ltd v Strategic Developments Logan Pty Ltd [2021] QCAT 342 PARTIES: BRIAN JOHNSTON PLAN DESIGN PTY LTD (applicant) V STRATEGIC DEVELOPMENTS LOGAN PTY LTD (respondent) APPLICATION NO/S: MCD/Q00516-20 MATTER TYPE: Other minor civil dispute matters DELIVERED ON: 5 October 2021 HEARING DATE: 15 July 2021 HEARD AT: Brisbane DECISION OF: Adjudicator Lember ORDERS: By 28 October 2021 the respondent is to pay the applicant the sum of $7,896.05 comprising: (a) $6,995.00 debt; (b) $751.85 interest; (c) $26.00 ASIC search fee; and (d) $123.20 filing fees. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – minor civil dispute – counter claim for debt or liquidated demand of money – where contract for supply of professional services Competition and Consumer Act 2010 (Cth), schedule 2, s 60, s 61, s 62, s 267(4) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 102, schedule 3 Australian Woollen Mills Pty Ltd v Commonwealth (1955) 93 CLR 546 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 Cox v J & M Phelan trading as Carrara Carmart [2020] QCAT 190 -- 1 of 8 -- 2 APPEARANCES & REPRESENTATION: Applicant: Self-represented Respondent: Self-represented REASONS FOR DECISION By an application for minor civil dispute – minor debt filed 6 May 2020 the applicant, represented by its director, Mr Johnston, sought orders that the respondent, represented by its director, Mr Thomson, pay the sum of $8,173.00 for unpaid invoices for planning work the applicant performed for the respondent, plus interest on the outstanding amount at 15% per annum, the filing fee of $123.20 and the ASIC fee of $26.00, for a total claim of $9,548.15. On 2 June 2020 the respondent filed a response seeking that the application be dismissed on the grounds that the work undertaken by the applicant was not in accordance with the quote provided by the applicant and accepted by the respondent. A hearing took place on 15 July 2021 however, each party sought to file additional material, and, by consent, the matter was adjourned for a decision on the papers after 2 August 2021. That decision and the reasons for it now follow. Jurisdiction The Tribunal has jurisdiction to hear minor civil disputes. Schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”) describes a minor civil dispute, amongst other things, as “a claim to recover a debt or liquidated demand of money of up to the prescribed amount”. Under schedule 3, the prescribed amount is currently $25,000.00. I am satisfied that the applicant’s claim is a matter over which the Tribunal has jurisdiction. Background The respondent intended to develop its property into townhouses and engaged the applicant to provide building design services for the project. The applicant says the respondent originally planned to construct twenty-three townhouses, but their design variations were able to achieve twenty-eight townhouses on the site. Ultimately, however, the respondent did not proceed with a townhouse development and opted instead for an eight-block residential subdivision. The applicant believes the respondent wishes to avoid paying the balance fees for the work the applicant undertook because the respondent was a habitual “bad payer” and because it no longer required the works produced by the applicant because the townhouse project did not proceed. A chronology of the relevant dealings between the parties is set out as follows: (a) On 15 November 2017, the applicant provided the respondent with a Quotation in the form of an unsigned Contract for “Job No 10209” for “professional building design services” for “proposed 28 units and one caretaker dwelling” (“the Quote”). -- 2 of 8 -- 3 (b) The summary page on the Quote estimated: (i) the total costs payable to the applicant would be $56,680 excluding GST; (ii) additional costs payable to third parties would be $37,380 excluding GST; (iii) various stages would cost as follows: A. Concept Plans - $1,000; B. Town planner and pre-lodgement meeting (3.02(b)) - $320; C. Plans for Development Approval (“DA”) (3.02(c)) - $26,060; D. Plans for Operational Works Approval (“OPW”) (3.02(d)) - $6,870; E. Plans for Building Approval (“BA”) (3.02(e)) - $20,930. (c) In terms of the disputed works, the scope of works went into further detail and included: (i) In 3.02(c) that the scope of works and fees included: A. Concept stormwater design at $4,000 to the applicant; B. Conceptual sewer design at $2,940 to the applicant; C. “Conceptual stormwater management plan” at $6,000 to a third party at the respondent’s cost; D. Soil testing at $1,800 to a third party at the respondent’s cost; E. Surveyors fees for contour plans to a third party at the respondent’s cost; F. Total stage cost $26,060 payable to the applicant and other fees to third parties; and (ii) In 3.02(d) that the scope of works and fees included: A. Soil testing at $2,400; B. Stormwater management report payable to a third party by the respondent; C. Total stage cost $6,870 payable to the applicant. (d) The Quote included terms of engagement such as: (i) a requirement that fees are paid in full before final plans are released to the client; (ii) that work may cease where invoices are unpaid; (iii) the imposition of interest at 1.5% per month on late payments; (iv) an acknowledgement that fees payable “are NOT subject to approval of plans by any regulatory person or body”; -- 3 of 8 -- 4 (v) that where the scope of work is varied as the project progresses, such additional work would be undertaken at $120.00 per hour for the principal and senior designer and $65.00 per hour for all others; and (vi) variations were permitted where unforeseen information is requested by approval authorities but must be agreed to by both parties in writing. (e) Over the course of the applicant carrying out the works, various invoices were issued to and paid by the respondent, summarised as follows: Stage Fee Invoice No. Date Invoiced Amount Paid Date Paid Concept Plans $2,750.00 216117 16/11/2017 $2,750.00 17/11/2017 Pre- lodge/Claim 1 DA $7,392.00 520217 20/12/2017 $7,392.00 21/12/2017 Claim 2 DA $21,626.00 714118 14/01/2018 $10,000.00 22/1/2018 $11,626.00 1/2/2018 Progress Claim $466.40 604182 30/04/2018 $466.40 1/5/2018 Work to 30/9/2018 $75.10 3/021018 3/10/2018 $75.10 12/11/2018 OP Works Plans $6,083.00 121812 6/12/2018 $6,083.00 28/12/2018 BA Plans to date $5,500.00 1218102 6/12/2018 $5,000.00 21/12/2018 $500.00 28/12/2018 Claim 2 BA $9,625.00 181218 18/12/2018 $8,333.00 8/1/2019 BA Plans completed $4,873.00 3/12219 12/2/2019 Nil Retention from 3/122219 $3,300.00 3/23319 23/3/2019 Nil Total $61,690.50 $52,225.50 On 20 November 2018, Mr Thompson replied to an email sent by Mr Johnston on a number of outstanding issues. Relevantly, within that email: (a) Mr Johnston asked for go ahead to proceed with the further designing works needed OPW and BA to which Mr Thompson replied “OK GOOD”; (b) Mr Johnston reiterated that he had been given the go ahead to proceed with working drawings for townhouses per the Quote from 15 November 2017 and the summary sent 7 January 2018 at a cost of $5,530.00 to which Mr Thompson replied “YES I UNDERSTAND”; (c) Mr Johnston confirmed that on 5 October 2018 he had confirmed that Mr Thompson had agreed he could proceed with the OPW instructions; (d) Mr Johnston confirmed his 1 November 2018 estimate of $900.00 for a bill of quantities to which Mr Thompson replied “YES GOOD”; and (e) Mr Johnston said: -- 4 of 8 -- 5 We will provide the relevant changes required to stormwater and sewerage and include the draft plans for the domestic side of the stormwater and sewerage along with the draft plans for the reticulation of water mains to each block of units. It would appear by the plans sent to me by Chris that you ended up getting the approval with the stormwater management plans which was a company called Moro. On 23 December 2018 Mr Johnston informed Mr Thompson by email that in accordance with clause 3.02(k) all work had ceased until payments were made. Ultimately, the respondent disputes the outstanding invoices for a number of reasons, summarised as follows: (a) The original quote was for a caretaker’s dwelling as well as twenty-eight townhouses and plans were never provided for the caretakers dwelling. This argument seems something of a nonsense because it is reasonably obvious on the evidence that the manager’s/caretaker’s residence was included in the twenty-eight townhouses and not ever intended to be additional to it; (b) The respondent says the charges for BA were $15,125 and $13,833 was paid, however the subsequent invoice, the disputed one, is for $2,195 of works not yet done plus a $3,000 retention. He says therefore $5,195 is not done and cannot be invoiced. This is also incorrect. It seems to me that $2,195 is for work not done, but the $3,000 retention was for work done, although invoicing it was being withheld in good faith by the respondent pending all works being completed. As all works were never completed, the $2,195 was not incurred by the applicant or invoiced to the respondent but there was no reason to hold the retention back and those monies became payable; (c) The DA and OPW work invoiced and paid for, and the BA work invoiced included charges for work not done, or done incorrectly including: (i) lack of local council liaison, drainage and management plans, soil tests, surveys, formal stormwater design, water reticulation and harvesting, landscaping plans, traffic reports, council lodgement and information request responses, drainage plans for council approval, plans to Queensland Fire Services, building certifiers and utilities service providers, the six sets of plans, all included in the “scope of works”; and (ii) the BA and the OPW all require more work per the council information request and the design error due to inaccurate survey (overlooking the local council sewer line that truncates the site at a location where the applicant had incorrectly sited three townhouses). (d) In any event, for those reasons, the respondent says invoice number 181218 should not have been paid as the services mentioned in it have not been provided. (e) The quote for BA was $21,223, less $5,195 for work not done, amounts to $16,028 of which $13,833 is paid, leaving a balance owing of $2,140. For the reasons given below, this calculation is mathematically incorrect. The applicant disputes that any works the subject of earlier invoices was incomplete or defective and says that the work was not completed only because the invoices were -- 5 of 8 -- 6 outstanding and because Mr Dunkley, the respondent’s nominee to complete the project with the applicant, did not reply to the applicant’s requests for information, and denies any errors in the work that had been invoiced and paid for DA and OPW. In an email to Mr Dunkley on 21 January 2019, Mr Johnston requested information and also said: ..the only thing outstanding on the building approval process is to finalise the timber racing plans for the framework .. I will…have said works completed within an maximum of 14 days.. Obviously, I have absolutely no control over any consultant that Mr Thompson has engaged in respect to the approval process for both civil, structural, energy- efficiency, landscaping or the like for any other consultants required [to] finalise these works. Similarly, I have no control over timing that Council take to perform the approval process for both operational works, development approval, plumbing and drainage approval and the private certification of the building plans nor the consultants information/plans/certificates as required for said certification. On 5 February 2019, in the absence of a reply, the applicant indicated to the respondent that the applicant would close the file. The respondent instructed the applicant to proceed but in the absence of an agreement in relation to the use of drawings and payment for works, no further work was undertaken. On 6 February 2019 the respondent also informed the applicant that he had conferred with the applicant’s bookkeeper and confirmed the fees outstanding were around $2,000. On 12 February 2019 the first of the two disputed invoices was issued. It notes that: Costs for BA plans $23,458 Less claimed and paid $13,833 Less costs to complete $2,195 Less retention (until $2,195 works are completed) $3,000 Total $4,430. Mr Waning, a town planner engaged by the respondent provided a statutory declaration made 7 July 2021 in which he stated that: (a) An Information Request was issued by the Logan City Council on 8 January 2019 requesting further information be submitted for the OPW; (b) MR Johnston replied to the request on 11 January 2019 indicating that the further information would be provided; and (c) Mr Johnston never provided the requested information. Mr Morley, an employee of the Logan City Council confirmed that Mr Johnston provided a partial reply to the Information Request on 23 January 2019. On 8 December 2019, Mr Thompson wrote to Mr Johnston and asked if he was still willing to complete the work. He also sought to clarify: (a) that the quote for the BA was $21,326; -- 6 of 8 -- 7 (b) that he had paid $15,125; (c) that this left $6,201 to pay for the works to be completed; (d) that the statement indicated $4,873 was outstanding but could Mr Johnston check his records in this regard. The applicant seems to have intended to invoice consistent with the fixed fee pricing set out in the Quote and the respondent wants to hold the applicant to that quote. In saying that, each party seems to have made a mathematical error when referring to the BA costs on the Quote. The Quote is for $20,930 excluding GST, or $23,023 including GST. However, the Invoice for BA work refers to $23,458 and the respondent says it ought to be $21,326, neither of which is correct. The final invoice for BA works should have been for: Costs for BA plans $23,023 Less claimed and paid -$13,833 Less costs to complete -$ 2,195 Balance $ 6,995. I do not turn my mind to any unbilled variations as they do not form part of the current claim, but I understand they have now been invoiced and may be the subject of future claim by the applicant. The question in this application is therefore is whether the respondent has reason to dispute the balance invoice, and/or a right of set-off for contractual breaches that would reduce its liability to the applicant in this case. Contract law [27] A legally enforceable agreement (contract) requires an offer, acceptance of that offer, consideration for the promises made and an intention to create legal relations.1 The terms must be certain, and the parties must have capacity to contract. [28] The Quote, although not signed by the respondent despite numerous and ongoing requests by the applicant did form the basis of the contract between the parties because both parties acted in accordance with it and their conduct therefore formed their adoption of its terms. The respondent in fact seeks to rely on the Quote by insisting that the applicant be held on the fixed fee quotes contained in it. [29] Where there is a contract – and in this case there was – to dispute liability to pay the respondent must establish that work was not done, or that it was done defectively. In Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd,2 where there was a contractual obligation to handover a strata plan at the end of the work, the contract was found to require that the plan be handed over. Nonetheless, it is an implied term of the contract that services will be rendered with due care and skill and within a reasonable time, not dissimilar to the Australian 1 Australian Woollen Mills Pty Ltd v Commonwealth (1955) 93 CLR 546. 2 [2012] NSWCA 184. -- 7 of 8 -- 8 Consumer Law guarantees,3 in respect of a breach of which losses are recoverable as liquidated damages. [31] There is an obligation on the party claiming to have suffered loss to mitigate its loss.4 Findings [32] The applicant was engaged on the terms of the Quote to provide services to the respondent. The respondent had implied obligations to provide the respondent with adequate information and instructions to enable the services to be carried out and an express obligation to pay invoices when issued for various stages. [33] Whilst the respondent questioned the calculation of invoices and balances owing, he does not appear to have queried or questioned the quality of the work done until these proceedings were on foot. In fact, in December 2019 the respondent was clearly still prepared to engage the applicant to complete the outstanding work which would suggest that he was not genuinely dissatisfied with the applicant’s work. I am not convinced that the applicant made errors in or over-charged the DA and OPW stages of work. There is no third-party evidence to support the respondent’s suggestion that the sewer line was missed or incorrectly dealt with by the applicant [35] Further, the respondent cannot rely upon the applicant’s failure to respond to Council’s information request in denying the applicant payment: the applicant was under no obligation to continue working whilst invoices were outstanding. This was an express term of the Quote. [36] In summary, the respondent has not satisfied me that the applicant breached its obligations under the agreement. I find that the respondent did not have any reasonable excuse for refusing to pay the applicant’s invoice. The claims of breach are not made out. [37] For those reasons the applicant is successful in its claim for payment of the outstanding invoice, albeit in the sum of $6,995.00. [38] In terms of interest, it is appropriate to award the applicant interest on the outstanding sum from 30 March 2019, when the second invoice became payable, until the hearing date. I award interest to the applicant applying the court scale in the amount of $751.85. I do not award the amount sought at the rate of 15% because it does not accord with the agreement and seems excessive in all of the circumstances given current lending rates. [39] It is also appropriate that the respondent be reimbursed for the filing fee on the application and the ASIC search fee, and I award those in the respective amounts of $123.20 and $26.00 pursuant to section 102 of the QCAT Act. 3 Sections 60 and 62 of the Australian Consumer Law, respectively. 4 Cox v J & M Phelan trading as Carrara Carmart [2020] QCAT 190, [34]. -- 8 of 8 --