Boden v Martin & Roth [2014] QCAT 333

CITATION: Boden v Martin & Roth [2014] QCAT 333 PARTIES: Simon Boden (Applicant) v Ruth Martin and Marc Roth (Respondents) APPLICATION NUMBER: BDL203-13 MATTER TYPE: Building matters HEARING DATE: 9 May 2014 HEARD AT: Townsville DECISION OF: Member Johnston DELIVERED ON: 15 July 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The Tribunal Orders the Respondents to pay the Applicant the sum of $55. 2. The Tribunal dismisses the Respondents claims. CATCHWORDS: Dispute over nature of the agreement to build Domestic Building Contracts Act 2000 (Qld) ss 7, 8, 26-30, 55 APPEARANCES and REPRESENTATION: APPLICANT: Simon Boden RESPONDENTS: Ruth Martin and Marc Roth REASONS FOR DECISION Background [1] The Respondents were for the purposes of this decision the owners of the dwelling situated at 266 Williams Road, Alligator Creek. They wanted to build a patio to the rear of their existing dwelling. On 12 July 2012 the Respondents contacted Mr Boden the Applicant in response to an -- 1 of 8 -- 2 advertisement in The Alligator Creek Times, in which Mr Boden held himself out to be a builder. [2] Mr Boden was a licensed carpenter and his license allowed him to undertake building work of this nature. [3] On 22 July 2012 the Respondents sent to Mr Boden an e-mail outlining their requirements and attaching drawings/plans, requesting him to provide a quote to build a patio based on this information. [4] On 27 July 2012 Mr Boden provided a quote (‘the Quote’): “to construct a colour bond patio roof to the rear of the existing dwelling”. The Quote provided for a final cost of $19,247.69 [Exhibit 3]. [5] On 28 July 2012 the Respondents wrote to Mr Boden [Exhibit 4]. accepting the Quote The acceptance on its face is quite clear and unequivocal. [6] Mr Boden contends that rather than proceeding with the Quote the Respondents agreed to pay the Applicant on an hourly rate. He filed an Application for a minor civil dispute in which he claimed to be owed the sum of $12,605.65. He also claimed filing fees of $275 and interest at the rate of 10% totalling $562.55 at the time of filing. This came to a total amount of $13,443.20. [7] The Respondents contend that they accepted the Quote and did not agree to an hourly rate. The Respondents’ Response to the minor civil dispute asks the Tribunal to absolve the Respondents of any liability or debt claimed by Mr Boden along with several other remedies. The crux of the Respondents’ case is that they entered into a fixed contract and have paid Mr Boden for the work he has undertaken. The first decision for the Tribunal is the nature of the agreement between the parties! [8] Mr Boden's evidence to the Tribunal was that on 28 July 2012 the Respondents agreed by e-mail to pay him at an hourly rate on a cost plus basis. Mr Boden has however been unable to produce the e-mail and the Respondents have denied that it has ever existed. [9] Mr Boden has proceeded on the basis that he was entitled to charge on an hourly basis. [10] The Domestic Building Contracts Act (“the Act”) requires contracts to be in writing and to only have effect if signed by the building contractor and the building owner. Mr Boden conceded that this had not happened in this case. When the Tribunal asked Mr Boden whether he was aware of the use of contracts he told the Tribunal that he was familiar with the use of HIA Contracts. He produced an example of a contract that he had used in another matter (Exhibit 1). He also produced an example of a contract -- 2 of 8 -- 3 variation (Exhibit 2). Mr Boden acknowledged that he had not complied with the requirements of the Act. [11] Mr Boden's case is based on his hourly rate and the time he has spent on the job as outlined in his invoices. The Respondents deny that they have agreed to pay Mr Boden on an hourly rate. They seek a finding that they have met their obligations under the agreement with the Applicant. [12] Where there is a quotation in existence, which on the Respondents’ case they had accepted, there is an evidentiary onus on the Applicant to provide cogent evidence that this situation in relation to the agreement is not correct. The Tribunal is of the view that if such an e-mail did exist then it would have been produced. [13] The Tribunal prefers the evidence of the Respondents on this point. The Tribunal does not accept the evidence of Mr Kurt Hart who admitted that his memory of events was “hazy”. The Tribunal does not accept the written evidence of Mr Craig Myer as he was not called and therefore could not be cross examined. The Tribunal does not accept that the Respondents progress payments constituted evidence of their agreement to an hourly rate. The Respondents did what many consumers do namely pay their bills when presented. When the payments reached the total sum in the Quote the Respondents stopped any further payment and queried Mr Boden about the extra costs. The Respondents’ evidence is that they have paid to Mr Boden the sum of $19,247.69 in part payments being the total sum payable under the Quote. The Tribunal accepts this evidence and finds that the Respondents have paid the sum of $19,247.69 to the Applicant. [14] The Tribunal also notes that when the Respondents complained to the Building Services Authority that the BSA Inspector Mr Kevin Cameron in his report noted that: there were no approved variations; that payments of $19,247.69 had been made; and that no money remained outstanding. He also pointed out that all the works completed were able to be completed by Mr Boden who was a carpenter. He also commented on the fact that Mr Boden had supplied invoices which had been calculated on an hourly rate which was not as per the quote which was for a fixed price. [15] The Tribunal also agrees with the Respondents’ submission that cost plus contracts are prohibited under the Act (section 55), unless they meet certain strict criteria. The Tribunal is not satisfied that the use of such a contract is appropriate in these circumstances. [16] The Tribunal is of the view that the Applicant has not produced any evidence to give credence to his account of the agreement between the parties. The Tribunal does not accept the Applicant’s account of the agreement between the parties. The Tribunal finds that the agreement between the parties is made up of the e-mail of 22 July 2012 from the Respondents to Mr Boden and the attachments to that e-mail and the Quote sent by Mr Boden to the Respondents constitute the agreement between the parties. -- 3 of 8 -- 4 What does this mean? [17] The Tribunal does not accept the Applicant's contention that this was a cost plus agreement and that the Applicant was entitled to charge on an hourly basis. The Applicant should have prepared a contract under the Act and provided that to be Respondents. This was building work and it meets the requirements of a regulated contract under the Act. This would have amongst other things clarified the nature of the agreement between the parties; provided a mechanism for the timing of payments; and set out a process for variations. [18] The Quote was for a total amount of $19,247.09. However it contained a number of exclusions: BSA insurance/construction plans/facia boards/gutters/painting. This would indicate that these amounts were extra to the Quote. The Respondents e-mail of 22 July 2012 provided for the Respondents to do work that would offset the work required to be done by Mr Boden. Mr Boden conceded that this was the agreement but denied the quantum of the Respondents claim. [19] Mr Boden’s evidence was that once the plans had been drafted he met with the Respondents and they were happy with the changes that have been necessary. The plan involved changes to the sizes of materials and increased the cost of the job. His evidence was that the Respondents understood that the changes to the plans meant extra expenditure and would mean the variation of the total sum in the Quote. The Respondents dispute this allegation. They relied on the Applicant to undertake the work and say that he never raised the issue of variations with them. The fact is that Mr Boden did not provide a written variation of the job in relation to the extra costs. He acknowledged when questioned by the Tribunal that the agreement could be viewed as the Quote; the BSA Insurance, plus the construction plans. [20] The law in relation to variations is quite clear a builder is not entitled to claim a variation unless it has the agreement of both parties. Further under the Act it needs to be in writing. Mr Boden knew his obligations but chose to ignore them in this matter. The Tribunal was not persuaded by the Applicant that there were exceptional circumstances that might relieve the Applicant of his obligations and entitle him on the basis of hardship or any other reason to be relieved from the requirements of the law. [21] The Tribunal finds that there were no agreed variations to the building work to be undertaken. What the Applicant proposed was a fixed price contract and this is the agreement which the Respondents entered into. [22] Mr Boden’s evidence was that that the invoice dated 9 November 2012 [Exhibit 7] provided for: Engineers Specifications $490; Construction Plans/Form 2/Form 1 $400; and Certifier Approval Fees/inspection $965. The Quote provides for the payment of the Certifier as part of the total cost. The Quote allows $1000 for this to be undertaken and the Invoice is for $965 so there is a saving to the Respondents of $35. The Quote should be adjusted down for this amount. -- 4 of 8 -- 5 [23] The Quote does not provide for construction plans to be included in the Quote these are exclusions and accordingly additions to the Quote. These are extra costs that Mr Boden is entitled to claim against the Respondents. Mr Boden is entitled to claim these amounts as additions to be adjusted up by $890. Ms Martin conceded in evidence that the plans were extra. Upgrade to the roof [24] Mr Boden’s evidence was that after the original plans were sized up, sketched and provided to the engineer he determined as the patio structure was quite high with a large roof area so that the sizes of posts needed to be increased and other changes made. Mr Boden refers to the report by Mr Kerry Adams dated 20 September 2012 as support for this point. Mr Boden stated that the work which he undertook was an upgrade to the roof of the existing dwelling. He told the Tribunal that the roof needed to be attached and this involved pulling off the roof sheets and strengthening the members to take the wind pressure on its structure when it was attached. He told the Tribunal that none of this was part of the Quote. [25] Mr Boden states that Invoice 9 [Exhibit 7] is for the supply of and installation of roof flashing and timber roof framing totalling $4,591.25. This represents a variation to the agreement reached between the parties. Mr Boden acknowledged that this was a variation and that he had not drawn this to the attention of the Respondents. He accepted that there was nothing on the face of the Tax Invoice to indicate that this was a variation to the Quote that had been provided. [26] What is quite clear to the Tribunal from their evidence is that the Respondents were not aware of the variation. This was never discussed with them. The onus is on the builder were a situation arises that the contract needs to be varied to take into consideration a factor that was not in existence of time the agreement was entered into by the parties. Mr Boden did not do this he simply built it into his accounts. This is an unacceptable practice. [27] The Tribunal does not allow the variation. It was not in writing; never explained to the Respondents; and therefore was undertaken without their agreement. Balance of the building work [28] Mr Boden proceeded with job and his invoices outline various stages of the project. Mr Boden says that on 27 December 2012 the Respondents made a payment of $10,279.39. From that date the final invoices were not paid. Mr Boden told the Tribunal that after Christmas the roof was finished off and he undertook all the work that was necessary to have the project certified. He told the Tribunal that the engineer had signed off regarding the strength of the structure [Exhibit 5]. He told the Tribunal that the final inspection certificate had been signed [Exhibit 6]. -- 5 of 8 -- 6 [29] Ms Martin’s evidence was that they had provided Mr Boden with a sketch of what they wanted and he had responded at providing the Quote [Exhibit 3] to undertake the work. She had on 28 July 2012 sent an e-mail [Exhibit 4] to Mr Boden accepting the Quote and instructing Mr Boden to proceed. She denied sending Mr Boden an e-mail on that date agreeing to an hourly rate. She told the Tribunal that she had quotes from other builders and wanted the job to be completed at the price that had been quoted. Her view was that the contract was for a fixed price. She did however accept that the plans were extra. [30] Ms Martin told the Tribunal that having accepted the quote that Mr Boden needed to manage his labour so that he could complete the work in accordance with the Quote. She told the Tribunal that Mr Boden had not advised her that there were any variations to the contract for work outside the Quote. She told the Tribunal that her training was as a social worker and she was dependent on Mr Boden to explain to her any issues that arose from constructing the patio in accordance with the plans. Mr Boden provided her with invoices and they were paid up to the total provided by the Quote. She refused to pay Mr Boden for any other work and complained to the BSA about his conduct. [31] Ms Martin told the Tribunal that they first became aware there was a problem when on 23 December 2012 they received invoices 4 -7 totalling $22,283.06 and were told that they had 24 hours to pay the same. They had already paid $8,968.30 so they paid the balance due under the Quote of $10,279.39 on 25 December 2012.They relied on Mr Boden to take responsibility for the project. He was responsible for managing the project to budget. The amount Mr Boden is seeking is $31,853.36 which is substantially more than had been agreed. [32] The Tribunal accepts the evidence of the Respondents that they engaged Mr Boden to undertake the work on their behalf. The Tribunal accepts the evidence of the Respondents that Mr Boden had the sole responsibility for undertaking the work as the builder. Do the Respondents have a set off on the basis of work that they have undertaken to assist with the Applicant undertaking the building work? [33] Mr Boden agreed that if the Respondents undertook certain work that the Applicant might otherwise have to undertake in doing the building work that he would make an adjustment to the total sum payable. An example was that the Respondents had a bobcat that could be used to level the area and to dig holes for the posts required in the construction. [34] The Respondents evidence was that they had raised this in their e-mail of 22 July 2012 and that Mr Boden had agreed to them undertaking this work. They say that they have contributed to the work to be undertaken by the Applicant to the extent of 58 hours. They have valued that at a rate of $42.50 per hour being an average of Mr Boden's value of labour rates. This comes to a total of $2,465. -- 6 of 8 -- 7 [35] The Respondents state that Mr Boden agreed to the total price being varied by $400 if the footings were excavated. The Respondents accepted this variation and excavated the footings to Mr Boden's specifications. Mr Boden did not dispute this arrangement. The Tribunal accepts that the work was undertaken and allows an adjustment of $400 against a total price. [36] The Respondents states that Mr Boden agreed that he would reduce the total price by $400 if the Respondents would drill holes. They referred to the e-mail of 27 July 2012 from Mr Boden [Exhibit 4]. Mr Boden says in the e-mail: “if your bobcat drills the holes the price would be approximately $400 less”. Mr Boden did not dispute this arrangement. The Tribunal accepts that the work was undertaken and allows an adjustment of $400 against the total price. [37] The Tribunal does not accept the claim for a set off outside of these adjustments. Whilst it was contemplated by the parties that the Respondents might do work there was never any agreement reached about the terms of that engagement. There is no information about what work with the undertaken and the rates that would be paid in relation to that work. The Respondents have calculated their claim on the basis of an average in Mr Boden's pay rates. There is no evidence that Mr Boden agreed to any rate. There was clearly never any agreement on the essential terms of the engagement. This claim must fail for this reason. [38] The Tribunal is of the view that the total price provided under the Quote should be adjusted as follows: Total sum payable under the Quote $19,247.09 Basis of the adjustment Less $35 See paragraph 22 Plus $890 See paragraph 23 Less $400 See paragraph 35 Less $400 See paragraph 36 Adjustments plus $55 Total $19,302.09 [39] This leaves a balance of $55 owing to the Applicant under the total sum payable under the Quote. [40] The Applicant claims interest in his application. There was clearly no agreement between the parties to pay interest so that this part of the application has been completed incorrectly. The Tribunal dismisses the Applicant’s claim for interest. The Applicant has not proven his case so the Tribunal does not allow the filing fees. -- 7 of 8 -- 8 [41] The Tribunal Orders the Respondents to pay the Applicant the sum of $55. The Tribunal otherwise dismisses the Applicants claims. Respondents’ relief [42] The Tribunal has made findings in relation to the agreement between the parties and the money payable to the Applicant which has addressed the remedies the Respondents have sought in relation to paragraph 1 of the Response. [43] The Tribunal has made findings in relation to the work undertaken by the Respondents which has addressed the remedies the Respondents have sought in relation to paragraph 2 of the Response. [44] The Tribunal notes in relation to paragraph 3 that a Final Inspection Certificate has been signed off by the building certifier [Exhibit 6]. The Tribunal notes further that the Respondents did not call any evidence to support their claims in relation to the work being incomplete or not up to a workmanlike state. The Respondents provided pictures showing work that was allegedly defective or incomplete together with a quotation from Heritage Plus to undertake work at the dwelling [Exhibits 15 & 16]. The Tribunal does not accept that this constitutes sufficient evidence to prove these matters. Ms Martin acknowledged that the Respondents did not have the relevant expertise to give evidence on these matters. The usual course is for the builder providing the quote to be called to give evidence why the work is necessary and what is the basis of the costs claimed. This allows the Applicant to cross-examine the witness and make submissions to the Tribunal. [45] The Tribunal notes in relation to relief claimed at paragraphs 4, 5 and 6 that the Respondents have complained to the Building Services Authority about the state of the work that has completed and the BSA has issued Directions to the Builder to Remedy [Exhibit 12] [46] The Respondents have sought the assistance of the Building Services Authority and have a remedy through that service in relation to defective and incomplete building work. [47] The Tribunal otherwise dismisses the Respondents Response. -- 8 of 8 --