Albion Projects Pty Ltd v Simpson (No 2) [2014] QCAT 515

CITATION: Albion Projects Pty Ltd v Simpson (No 2) [2014] QCAT 515 PARTIES: Albion Projects Pty Ltd ABN 82 122 540 576 (Applicant) v Jonathon Simpson and Kim Simpson (Respondents) APPLICATION NUMBER: BDL104-13 MATTER TYPE: Building matter HEARING DATE: 25 and 26 March 2014 HEARD AT: Brisbane DECISION OF: Member King-Scott DELIVERED ON: 15 October 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. Jonathon Simpson & Kim Simpson will pay Albion Projects Pty Ltd the sum of $234,650.85 plus GST. 2. Jonathon Simpson & Kim Simpson will pay interest to Albion Projects Pty Ltd on the said sum at a rate of 15% for 2.5 years. 3. The Respondents’ Counter-claim is dismissed. 4. The Applicant must file in the Tribunal two (2) copies and give to the Respondents one (1) copy of written submissions in respect to the calculation of damages inclusive of GST, interest and costs, by 4:00pm on 3 November 2014. 5. The Respondents must file in the Tribunal two (2) copies and give to the Applicant one (1) copy of their submissions in reply, by 4:00pm on 10 November 2014. CATCHWORDS: Building dispute –Parties to the contract – Relevance of pleadings – Costs Plus Contract -- 1 of 15 -- 2 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr P Freeburn QC instructed by Feehly Project Law RESPONDENT: Mr G Del Villar instructed by ClarkeKann Lawyers REASONS FOR DECISION [1] The Respondents are the owners of a residential property situated at 22 Langside Road, Brisbane. [2] They are in dispute with the Builder, Albion Projects Pty Ltd. That company entered into a Contract dated 31 May 2010 with the Respondents to complete the construction of the house pursuant to a Costs Plus Contract, following the termination of the original Builder’s Contract in early May 2010. The Contract is in the form of the Master Builders’ Standard Costs Plus (Residential) Contract, CP-5 January 2010 edition. [3] The Respondents are named in the Contract as parties but it is a matter of dispute as to whether Kim Simpson was a party. [4] The estimated total cost of the works was $1,913,774 exclusive of GST. [5] The Applicant’s claim is for moneys owing under the Contract. At the outset of the hearing the Respondents abandoned a significant part ($500,000) of their counter-claim for rectification of bluestone tiles. [6] The areas of dispute can be categorised as follows: a) Identity of the parties to the Contract; b) Value of the Actual Cost of Works; c) Adjustment for Preliminaries or Costs Plus Fees; d) The $25,000 agreement in lieu of adjustments; e) Charges for additional duties; f) Testing of bluestone tiles and legal costs; g) Late interest payments; h) The Westpac Bank guarantee; i) Counterclaim: i) delay; ii) defects. -- 2 of 15 -- 3 Pleadings [7] The issues before the Tribunal were identified in pleadings filed by both parties. The Applicant filed a Statement of Claim and then an Amended Statement of Claim, the Respondents filed a Response and Counter- Application and then an Amended Response and Counter-Application. The Applicant has also filed a Reply to the Owners’ Response and Counter-Application. [8] The matter was conducted on the basis of the pleadings, at least up to the door of the Tribunal on the first day of hearing. [9] It is true that there are no provisions in the Queensland Civil and Administrative Tribunal Act 2009 or Rules for the filing or exchange of pleadings. Nevertheless, in complex building disputes before the Tribunal, it has become the norm, at least in my experience. [10] The Respondents, in their Submissions, as a general observation suggest the pleadings are a mere aid to understanding the respective positions of the parties and that admissions contained in the pleadings are not admissions in the sense used in the Uniform Civil Procedure Rules 1999. Though that may be the case, such “admissions”, from an evidentiary point of view, should be given significant weight. The parties here have chosen to plead their respective cases in some detail. In those circumstances, should a party decide to depart from the case pleaded, then, in the absence of a satisfactory explanation, an adverse inference may well be drawn. Parties to the Contract [11] The Contract identifies Jonathon George Simpson and Kim Simpson as ‘Owners’ in the Contract. Only Jonathon Simpson signed the Contract, but the Applicant submits he signed on behalf of his wife as his signature on the Contract is contained in a box prefaced with the description, ‘for and on behalf of the Owner [s]’. [12] Section 30 of the Domestic Building Contracts Act 2000 provides that: A regulated contract has effect only if it is signed by the building contractor and building owner (or their authorised agents). [13] In evidence, Mr Simpson said that until recently he thought his wife had signed the Contract and was a party. Counsel for the Applicant submits that was some time after February 2014 as the pleadings up to that stage admitted that they were Owners. [14] Mrs Simpson is a party to the proceedings. Until recently, no issue was taken by her that she was not a party to the Contract. Her conduct during the course of the construction and matters peripheral to it suggest that she was a party. Counsel for the Applicant referred to insurance documents, invoices, progress claims, the demand on the bank guarantee, the engagement of solicitors and the pleadings in this case all of which -- 3 of 15 -- 4 have Mrs Simpson as a party. Counsel submitted that these are all facts from which an inference could be drawn that she acted and behaved as a party to the contract. [15] In determining whether Mrs Simpson was a party to the Contract, it is instructive to look at the intention of the parties when contracting. In Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, Mahoney JA said at 330 – 331: The proper view is … that the existence of a contract is a consequence which the law imposes upon, or sees as a result of, what the parties have said and done. Actual subjective intention to contract is a factor which the law takes into account in determining whether a contract exists but is not, or not always, the determining factor. … The result is therefore that intention to contract, in the subjective sense, is relevant to but not determinative of the existence of a binding contract. It acts, in a sense, as a limiting factor, that is, as a reason for not giving to what, on the face of it, is an exchange of congruent promises, the legal consequences which would otherwise be given to it. [16] In Babsari Pty Ltd v Wong (2000) 2 Qd R 576, Chesterman J said: [29] … When deciding whether a contract has been made the law has preferred to rely upon objective indications of agreement rather than assertions by one, or both, of the parties that no agreement was actually intended. As Blackburn J put it in Smith v Hughes (1971) LR 6 QB 597 at 607: If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms. [17] From an objective point of view the clear inference is, that in the absence of Mrs Simpson signing the contract, Mr Simpson signed on behalf of his wife who it was always intended was to be a party. It may be that it was an oversight that she did not sign at the time but the authority provision in the signing clause of the contract was sufficient to overcome that omission. I am satisfied that Mr Simpson was Mrs Simpson’s authorised agent when he signed the contract. [18] I note she was a party to the original Contract which was determined at an early stage. Mrs Simpson did not give evidence, except by filing a short statement in which she asserted that ‘she did not request Jonathon George Simpson to enter the contract on her behalf’. I find those words have been carefully chosen. I have no doubt that they are true. The situation did not arise where such a request was required. Clearly, it was assumed that she had signed. Pointedly, she does not say that he was not authorised to sign on her behalf, that it was never intended that -- 4 of 15 -- 5 she be a party to the Contract or it was a mistake that her name was stated to be as Owner. [19] I find that Mrs Simpson was a party to the Contract. Actual Costs of Works [20] The Owner is obliged to pay the Contractor the Contract Price in accordance with the Contract1. Further provision for payment is as follows: 11.5 Owner’s obligation to pay the Contract Price The Owner must pay the Deposit to the Contractor, upon signing of this Contract. 11.6 Contractor to make progress claims The Contractor is entitled to claim payment of the Contract Price progressively on completion of the stages set out in Part D of the Appendix to the Schedule. A progress claim must be in writing, certify that the Works have been completed to the relevant stage and set out the amount to be paid to the Contractor in accordance with Clause 11.7. 11.7 Owner to make progress payments On receiving a progress claim, the Owner must pay the Contractor, within the period stated in item 25 of the Schedule, a progress payment calculated in accordance with the following: (a) The Total Cost of the Works calculated in accordance with Clause 29.1 for completion of the relevant stage; or (b) The Total Cost of the Works based on a period of time; (c) any adjustment to the Total Cost of the Works under this Contract; (d) any other amount due and payable by the Owner to the Contractor under the Contract or otherwise. [21] Total Costs of Works is defined in clause 29.1 as: 29.1 Items constituting the Total Cost of the Works The Total Costs of the Works shall consist of the sum of the following: (a) The Actual Cost of the Works which shall include those items listed in Clause 29.2 being the cost of the Works together with items listed in Clause 29.3 being the Contractor’s Preliminaries for the Works, and (b) The Cost Plus Fee component in consideration of the performance by the Contractor of providing services during the construction phase. The Cost Plus Fee component comprises the Contractor’s profit and margin 1 Clause 11.4. -- 5 of 15 -- 6 to meet a proportion of the Contractor’s off site overheads as set out in Clause 29.4. [22] Actual Costs of Work is defined in the Contract as the costs and expenses incurred by the Contractor and the Owner in the construction of the Works, whether paid for or not, excluding any fees, on costs and percentage charges or payable to the Contractor under Contract for the services or management of the construction of the Works2. [23] Items constituting Actual Costs of Works are set out in clause 29.2 and items forming Preliminaries, which form part of the Actual Costs of Works, are set out in clause 29.3. [24] The Actual Costs of Works comprises the items listed in clause 29.2 and clause 29.3. The former includes the actual costs of materials, supplies and equipment. It also includes the Preliminaries identified in clause 29.3 (insurance, the wages of foremen, etc). The parties agreed to a Preliminaries fee of $157,212 (excluding GST). That was subject to adjustment in accordance with clause 29.6(d). The parties also nominated a Costs Plus fee of $225,000. That covered matters such as the Contractor’s salaries and overheads. It too was subject to adjustment. [25] The Applicant claims that the Actual Costs of Works was $2,051,439. The Respondents say the figure should be $50,000 less, that is, $2,001,439. [26] The $50,000 difference represents a compromise of the sum of $74,722 which is an amount that the Respondents deducted because the sums were disputed or not substantiated. They comprise: a) cement render trade $10,000; b) tiling trade $65,828; c) painting trade $5,600. The total of those sums amounts to $81,428 but no explanation is forthcoming for that discrepancy. [27] The Applicant submitted a Progress Claim No 25 for an amount of $117,300.70 (inclusive of GST). The Respondents’ agent, Mintstone Pty Ltd, by letter dated 23 October 2011 (under the hand of Rohan Butcher), excluded the above items. [28] The additional tiling costs are said to arise from the fact that the original sandstone tiles that were quoted on were replaced by bluestone tiles chosen by the Respondents. It is submitted that the tiler, engaged by the Applicant, was required to lay an entirely different product, and charged accordingly. The bluestone tile required a pre-sealer, unlike the sandstone. That appears not to have been disputed.3 In their 2 See definition section of the Contract. 3 T2 – 37.18. -- 6 of 15 -- 7 Submissions, the Respondents say that an opinion4 from a Quantity Surveyor, Gary Robinson & Cottrell, supports their contention that the assessment costs for tiling variations were inflated. It is suggested that the opinion has not been refuted. The opinion referred to is lacking in sufficient detail to provide any real probative value of what it purports to establish. However, the Respondents say the letter shows that there was a basis for them to dispute the tiling costs. That, probably, is its only value. [29] The Respondents at the time did not address their refusal to pay the other items amounting to $15,600. [30] It is noted that clause 11.8 provides that the Owner has no right to set off or deduct any sum from a progress payment due under clause 11.7. [31] The Respondents take issue with the disclosure of the compromise sum as they allege that the correspondence relied upon was ‘Without Prejudice’ as was the offer to compromise. [32] The evidence is that there were two pieces of correspondence dated 10 September 2012 that passed between the parties: one was clearly marked ‘Without Prejudice’, and the other containing the offer of $50,000 was not so marked. [33] There is no magic in the use of the words ‘Without Prejudice’5. If the document clearly contains a bona fide offer of compromise, then a court will treat the communication as privileged.6 The letter certainly contains offers to compromise. [34] Here, the contents of the other letter are unknown as the privilege has been maintained. No explanation in Mr Simpson’s filed material explained why one letter was marked ‘Without Prejudice’ and the other letter containing the offer was not so marked. I note that Mr Simpson is an experienced commercial solicitor. He, initially, appeared confused that there were two letters. He was shown the correspondence marked ‘Without Prejudice’. From his evidence I draw the inference that the wrong letter was marked ‘Without Prejudice’. In my opinion the claim for privilege should be respected. I do not intend to place any weight on the compromise. [35] The basis of the rejection of the claim of $74,722 was that part of the claim was not substantiated and the other part disputed. The letter dated 13 December 2011 from the Respondents’ agent, Mintstone Pty Ltd, under the hand of Mr Butcher, set out the basis for the dispute with respect to the tiles.7 No explanation was forthcoming with respect to the cement render reduction or painting. 4 Exhibit 7. 5 Rogers v Rogers (1964) 114 CLR 608 at 614. 6 Field v Commissioner for Railways (NSW) (1957) 99 CLR 285. 7 See Exhibit 7. -- 7 of 15 -- 8 [36] Although the Respondents disputed the sums claimed, no amount has been allowed for any of the items. There is no justifiable basis for rejecting the items entirely. And I doubt that there is a valid basis for the dispute at all, in view of the lack of detail of reasons for the rejection of the claim. As I noted above clause 11.8 of the General Conditions do not permit any deductions or set-offs from the progress claims. [37] I would allow the full amount of the sum claimed but as the Applicant has indicated to the Tribunal that it would accept $50,000 in satisfaction of the amount outstanding, I have allowed that sum. [38] Therefore, I find that the actual costs of works is $2,051,439. No Adjustment for Preliminaries or Cost Plus Fee [39] No adjustment for preliminaries of $157,212 (excluding GST) or cost plus fees of $225,000 (excluding GST) has been paid. The Applicant says it is subject to an adjustment as provided by clause 29.5(d) of the Contract. The Respondents dispute that. [40] Clause 29.6(d) provides: Any amount so calculated or nominated by using the Alternative Method remains subject to adjustment pursuant to the terms of the Contract and shall be increased by or in relation to the proportion that the Total Cost of the Works exceeds the estimated Total Cost of the Works (after taking into account any deductions or omissions allowed under the Contract) and the adjusted amount shall be claimed and paid progressively. [41] Clause 29.10 provides adjustment of Costs Plus Fee component: In the event that any authorised additions, variations and other adjustments provided for under the Contract, including adjustment of the actual cost of the Works, increase the total cost of the Works over and above the estimated Total Cost of the Works, THEN the Contractor shall be entitled to an adjustment of the Cost Plus Fee component computed on a pro rata basis in proportion to the total increase after taking into account any deductions or omissions allowed under the Contract, which shall be claimed and paid progressively. [42] The Applicant claims an additional sum of $42,447 (excluding GST) for preliminaries and $60,750 (excluding GST) for the Cost Plus Fee based on an actual cost of works of $2,051,439. [43] The Respondents submit that the amounts are not recoverable because they should be claimed in the progress claim and not at the end of the Contract. They submit that the Applicant has no contractual entitlement to be paid the adjustment fee now. Further, if there was an entitlement, it is submitted that the entitlement has been compromised by an agreement by the parties that the Applicant accept a lesser figure, which has been paid. [44] The Respondents submit that the phrase at the end of the clauses to the effect ‘… which shall be claimed and paid progressively’ supports their contention. They argue that the evident purpose of the clauses is to avoid -- 8 of 15 -- 9 a situation where the Owner is faced, at the completion of the Works, with a demand that the adjusted amount calculated over the life of the Contract be paid. [45] The Applicant says that in fact the Costs Plus Fee was in fact paid progressively which was the case, but what was not claimed progressively, and what is now being claimed, was the adjusted Costs Plus Fee. [46] I do not agree that the sole purpose of the clauses such as 29.6(d) and 29.10 are to ensure that the Owners are not faced with a final claim calculated over the whole life of the Contract (the rude shock argument). There are obvious benefits to both parties arising from such a provision. [47] The Respondents submit that because the claims were not made progressively, the Applicant has now lost the entitlement to make such claims. I reject that argument. There is no support to be found in the Contract for such an interpretation. Further, the Applicant relies upon the decision of Ward v Eltherington [1982] Qd R 561. [48] I agree with the Applicant’s submissions that the words at the end of both clauses referring to adjustment and being claimed and paid progressively are machinery provisions about the time of claims. [49] The Respondents also allege that the claims have been compromised. They were referred to two letters from the Applicant to the Respondents of 4 November 2010 and 2 December 2010. In each of those letters, the Applicant offers to fix monthly preliminaries prolongation cost of $25,000 exclusive of GST. The first letter assumes a Practical Completion Date of 14 February 2011; the second letter a Practical Completion Date of 14 March 2011. The first letter provides for the Respondents’ agent to sign as confirming acceptance of the proposal. [50] The Respondents say the offer was accepted. The Respondents paid the sum of $25,000 for each month that the Works continued after 16 December 2010, the Date for Practical Completion. [51] The Applicant submits that even if there was an agreement, it was not beyond the three months. [52] Although in evidence Mr Butcher referred to further discussions taking place between him and Mr Neville, there is no evidence that the Offer was ever accepted. I find that there was no agreement. The fact that the payments were made does not necessarily mean that any agreement was reached as a liability existed to make such payments; in any event, it was only a matter of how much. [53] It follows that the Applicant has proved its claim of $42,447 for adjusted preliminaries and $60,750 for adjusted Costs Plus Fee. -- 9 of 15 -- 10 Additional duties [54] Clause 29.11 provides: Reimbursement for additional duties. The Owner and Contractor may agree that the Contractor undertake additional duties for which the Contractor shall be reimbursed at the rates nominated in Part K(4) of the Appendix. The Contractor shall be entitled to an adjustment of the Cost Plus Fee component in relation to these additional duties including any other additional labour, materials, plant, goods or services provided by the Contractor under the Contract. The Cost Plus Fee component shall be applied additional to, either pro rata or as a percentage of, all goods and services provided by the Contractor. In the absence of agreed charge out rates, the Owner and Contractor shall negotiate a reasonable remuneration. [55] The Applicant claims the sum of $9,318 representing 5% of $186,364 which comprised 56 items of additional service. [56] It is submitted by the Respondents that the claim is baseless as no rate was ever agreed. That is true. There is no Appendix so no Part K(4) to the Appendix. [57] In paragraph 17 of the Amended Statement of Claim, the Applicant claims they made payments of $186,364 (exclusive of GST) for items identified as Owner-supplied materials in the Contract. The Respondents admit that the sum was paid on the Respondents’ behalf. However, it disputes its liability to pay the said sum as there was no contractual agreement as to a reasonable rate. [58] The Respondent have admitted that there was some work involved in the Applicant providing this service. For instance, it calculated quantities and cutting lists, liaised with suppliers, and coordinated deliveries. It was not simply a matter of paying an invoice. [59] It is well established by authority that where a contract does not fix a price or a rate, a contractor is entitled to a reasonable sum for the work carried out on a quantum meruit basis. 8 [60] As no rate was provided for in the Contract, the Applicant has applied a 5% administration fee which it alleges is considerably less than a builder’s usual margin. I agree. I allow the sum. Test of bluestone tiles and legal costs [61] This part of the claim dealt principally with the bluestone tiles. Defects in the laying of the blue tiles arose from the method of laying the tiles or the tiles themselves. The Applicant says that Mintstone Pty Ltd, as agent for the Respondents, directed the Applicant to carry out testing of the tiles. 8 Powell v Braun [1954] 1 WLR 401. -- 10 of 15 -- 11 See letters 13/10/2011 and 26/10/2011 from the Applicant to the Respondents. [62] In the first letter, Mr Neville says: In accordance with your directions to undertake our investigations, Albion Projects engaged the services of NATA Accredited Laboratory, Stone Initiatives and Materials Testing Group Pty Ltd to undertake tests of the bluestone tiles and three tiles were forwarded to that testing facility in South Australia for testing. [63] The cost of testing was $1,500. Legal costs of $2,520 were also incurred in obtaining legal advice on the allegations of poor workmanship. The nature of the advice sought and the party liable was not explored. The total sum of $4,020 the Applicant says is recoverable from the Respondents under the General Conditions of the Contract, particularly clause 29.2(II) which refers to legal and other professional charges reasonably incurred in connection with the Works; or clause 29.2(mm) which refers to losses, expenses and damages to the extent not recoverable from insurances; and clause 29.2(oo) any loss and damages that relates to or arises out of the Works occasioned through no fault or omission of the Contract. [64] Mr Simpson in his statement at paragraph 13 said: In or about September 2011, Paul Neville indicated to me an intention to obtain expert evidence to support its argument that the damage to the Bluestone tiles was due to defective material. I consented to Albion removing a Bluestone tile for analysis but made clear to Paul Neville that I disputed Albion’s position and expert report must be at Albion’s own expense, as a cost of the dispute. [65] In cross-examination, Mr Simpson said he did not use the words ‘as a cost of the dispute’ and said it must have been a mere flourish. I do not accept that. In my opinion, the cost of testing the tiles is a recoverable expense. [66] The Applicant submits that “in connection with” is of wide import and cannot be construed narrowly as meaning “for the purpose of completing the Works”, as submitted by the Respondents. It is assumed by the Respondents that the legal costs were incurred in a dispute with the Respondents and the Applicant. From the material I have seen, that is far from clear. It may involve the manufacturers or the sub-contractor tiler. Indeed, the Applicant alleges in its submissions that the advice may be the basis of the Respondents’ claim in the District Court against the supplier. I am prepared to allow the legal costs. [67] I allow the claim of $4,020. Late Interest [68] Under Clause 11.7 the Respondents were obliged to pay the Applicant within 14 days of receipt of the progress claim. -- 11 of 15 -- 12 [69] Clause 11.9 of the Contract provided: Interest payable on outstanding payments If the Owner fails to make any payment to the Contractor within the time for payment under this Contract, the Contractor is entitled to interest on the outstanding amount at the rate specified in Item 24 of the Schedule, payable from the time for payment until the date of payment. [70] Item 24 of the Schedule provided for a 15% interest rate. [71] The Applicant claims the sum of $12,786 as late interest. That is contained in a calculation of interest on late payments in Attachment 4 of its Statement of Claim which is the total of the sums less progress claim number 26. [72] The Respondents dispute the amounts on two bases. First, they allege that the parties frequently agreed on variations to the amounts payable in the progress claims. The practice was to negotiate on the progress claims. The varied amount was then reflected in a tax invoice sent by the Applicant, although the tax invoice did not reflect a new date. Second, they allege that the language of the clause is open to two interpretations. They say that one interpretation would appear to be capricious, unreasonable, inconvenient or unjust even if it is the most grammatically accurate construction. [73] Mr Neville was cross-examined on the issue9. He made it very clear in his responses that it was expected that the progress payments would be paid within 14 days. Out of courtesy, they gave the Respondents’ agent, Mr Butcher, an opportunity to comment. It is quite clear that they expected the payments to be made on time. [74] The Respondents maintain that on a proper construction of the clause, where there was an agreed variation, interest was not payable until 14 days after that agreement. Accordingly, on recalculating the amount owed, the Respondents admit an amount of $4,222.56 is owed. [75] I reject their argument and I find that the sum of $12,786 is the correct amount. Bank guarantee [76] On 14 September 2010, under Special Condition 7 of the Contract, the Applicant gave the Respondents a Bank Guarantee for the sum of $47,845. Special Condition 7 provided as follows: In relation to Part D – Progress Payments of the Appendix, the progress payments shall be subject to a 5% cash retention. The Contractor shall be entitled at his sole discretion to substitute the cash retention, in part or full, with an unconditional bank guarantee in favour of the Owner. Upon achieving Practical Completion, the Owner shall return 2.5% of the 9 Transcript 1-28. -- 12 of 15 -- 13 cash retention (and/or retention guarantee) to the Contractor within 14 days. Upon expiry of the Defects Liability Period, the Owner shall return the balance 2.5% cash retention (and/or retention guarantee) to the Contractor within 14 days. In Clause 19.1, delete the second sentence “No retention money is to be held by the Owner during the Defects Liability Period. [77] The Applicant claims the Defects Liability Period expired on 20 June 2012 because on that date the Owner took possession. The Respondents refused to release the Bank Guarantee. A demand was made by letter dated 10 May 2013 by the Applicant, over some two days after receipt of these proceedings. The Respondents claimed they were entitled to call up the Bank Guarantee because of three alleged defects:  the Bluestone tile defects;  the main ensuite tile defects;  plumbing defects in the main bathroom on level 2. [78] The Respondents maintain that there is at least one acknowledged defect that remains unrectified in the period for which interest and Bank Guarantee maintenance costs are claimed and that the Bank Guarantee has not been appropriately held for that period and no such liability to the Applicant arises. The remaining alleged defect relates to 5 or so discoloured tiles in the main ensuite area. The cost of repair of those tiles is unlikely to approach $10,000 according to the Applicant’s submission. [79] It is submitted there is no proper basis under the Contract for the Guarantee to be held beyond 20 June 2012. Under the contractual regime, the Respondents were obliged to provide a written list of any alleged defects and upon giving them that list, the Contractor, that is the Applicant, was obliged to rectify them within 28 days. After that period, the Respondents were obliged to return the Bank Guarantee. The Respondents did not pursue their rights under the Contract, therefore, there is no contractual basis for withholding the Bank Guarantee. [80] It is apparent from the absence of any justification by the Respondents to have retained the Guarantee pursuant to the contractual provisions that there is no basis for doing so. I allow the sum of $1,431.42 being the maintenance cost of the Guarantee and the further sum of $6,480.19 for interest on the proceeds of the Bank Guarantee. Counterclaim for unrectified defects [81] The Respondents submit that there was delay by the Applicant in completing the Works caused by it having an insufficient number of tradesmen and contractors on site during the period. They claim $2,000 per week for a total of $8,000 to $12,000. [82] In addition there are claims for defective workmanship estimated by Mr Butcher to be in the region of $25,000. The defects are alleged to be as follows: -- 13 of 15 -- 14 a) LED lights fitted in the main entry; b) Tiling to the pool deck being stained and damaged due to poor sealing of the tiles; c) The decision by the Applicant to relocate the water condensers had delayed certification; d) Water leaks above the main entry vestibule; e) Discolouration of white marble tiles. [83] The Respondents have reduced their claim for damages on account of delay from $134,000 to $8,000 to $12,000. [84] There were delays, but delays were caused by the Respondents or what have been described as neutral delays. The Practical Completion date was extended by agreement to 24 June 2011.10 Practical Completion was achieved on 20 June 2011, when the owners took possession. In any event, I find the claim for damages for delay is lacking in detail in respect of substance and time. A claim for rental is unsupported by any evidence of rent being incurred or the amount of rent. I disallow the claim for damages for delay. [85] The defects claimed other than the bluestone tiles, main ensuite tiles and the plumbing issue were not pleaded and were raised for the first time in Mr Butcher’s evidence. They were not mentioned by Mr Simpson when he gave his evidence in chief earlier in the hearing. In any event again the claim lacks detail of what was the precise cause of the defect and what would be the reasonable costs of rectification. [86] I disallow the claim. [87] In summary the Applicant has succeeded in its claim as follows: a) Balance of Progress Claim 25 exclusive of GST $50,000.00 b) Adjustment of Preliminaries exclusive of GST $42,447.24 c) Adjustment of Cost Plus fee exclusive of GST $60,750.00 d) Fee for additional duties exclusive of GST $9,318.00 e) Tile testing costs and legal costs exclusive of GST $4,020.00 f) Interest on late payment exclusive of GST $12,359.00 g) Bank Guarantee refund $47,845.00 h) Costs of continuing Bank Guarantee $1,431.42 i) Interest on Bank Guarantee $6,480.19 $234,650.85 [88] The Queensland Building Services Authority Regulation 2003 provides that for the purposes of section 77(2)(c) of the QBSA Act interest is 10 Email Fyfe to Butcher dated 5 May 2011, statement of Neville Exhibit 1. -- 14 of 15 -- 15 payable on the amount of damages awarded at the rate specified under the contract11 and is payable on and from the day after the day that the amount became payable until and including the day the amount is paid.12 Item 24 of the Contract allowed for an interest rate of 15% p.a. [89] Therefore the orders of the Tribunal will be: a) Jonathon Simpson & Kim Simpson will pay Albion Projects Pty Ltd the sum of $234,650.85 plus GST. b) Jonathon Simpson & Kim Simpson will pay interest to Albion Projects Pty Ltd on the said sum at a rate of 15% for 2.5 years. c) The Respondents’ Counter-claim is dismissed. [90] I will receive written submissions in respect to the calculation of damages inclusive of GST, interest and costs. Such submissions to be filed by the Applicant by 4:00pm on 3 November 2014 and the Respondents by 4:00pm on 10 November 2014. 11 Section 34B(1)(a). 12 Section 34B(2). -- 15 of 15 --