Allan Thompson Building and Development v Mecca Bah (Gold Coast) Pty Ltd [2014] QCAT 300

CITATION: Allan Thompson Building and Development v Mecca Bah (Gold Coast) Pty Ltd [2014] QCAT 300 PARTIES: Allan Thompson t/as Allan Thompson Building and Development (Applicant) v Mecca Bah (Gold Coast) Pty Ltd (Respondent) APPLICATION NUMBER: MCDO742-13 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 20 May 2014 HEARD AT: Southport DECISION OF: Adjudicator Bertelsen DELIVERED ON: 24 June 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The respondent pay to the applicant the sum of $6,792.32. CATCHWORDS: Cost plus contract for installation and repair – authority to source and arrange appliances and services – obligation to source on best terms – obligation to supervise – margin applicable to cost plus contract APPEARANCES and REPRESENTATION (if any): APPLICANT: Allan Thompson, Proprietor RESPONDENT: Stan Kravchenko, General Manager by authority REASONS FOR DECISION Application [1] By application filed 12 September 2013 the applicant Allan Thompson seeks the sum of $7,514.67 which he says is the balance of his invoice of $11,014.67 owing for repair and replacement construction work at the Mecca Bah Gold Coast together with $1,100 costs incurred in respect of -- 1 of 7 -- 2 an adjudication pursuant to the Building and Construction Industry Payments Act 2004 (Qld) and $900 in respect of document preparation to pursue his claim. Background and Evidence [2] During a severe storm event which occurred in the period 25-28 January 2013 the Mecca Bah alfresco dining area was damaged. The motorised blinds/awnings were torn from their mountings causing damage to the blinds/awnings, motors, brackets and ceiling areas. [3] At about the end of January 2013 Mr Thompson met with Mr Kravchenko the manager of Mecca Bah onsite. According to Mr Thompson he provided a verbal estimate of around $10,000 on a ‘cost plus’ basis ie the total cost was to be calculated based on cost of materials and labour, Mr Thompson’s hourly rate (supervision) and an 18 per cent builders margin which Mr Thompson asserted was below industry standard. The scope of works according to him was to replace the motors, supply materials and labour to install the motors and repair peripheral damage. [4] According to Mr Kravchenko, Mr Thompson was asked to quote for repairs to the alfresco area, roof cladding and motorised blinds/awnings shortly after the storm period 25-28 January 2013; that Mr Thompson quoted for the job at under $10,000; that he Mr Kravchenko accepted such quote on condition that Mr Thompson be responsible for the whole project; that the job was to be undertaken immediately. [5] Mr Thompson said he urgently approached supplier/installer Pauls Screens and Blinds (‘Pauls’) on 31 January 2013 to reinstall four café style awnings/blinds at Mecca Bah; that it became apparent the originally installed Italian brand motors were not available in Australia; that another supplier of motors, Somfy, was approached by Pauls; that, though available, motors were problematic in that there were issues with the supply of adaptors and brackets. He said that Pauls then approached Uniline a local supplier. Uniline, after site inspection, was able to source suitable motors, crown adaptors and brackets out of Sydney. An urgent order was placed for four motors. According to Mr Thompson this process of sourcing and arranging for Pauls to install four motors took to the middle of February 2013. During the same period Mr Kravchenko asserted he was eagerly awaiting commencement of works. Mr Kravchenko paid a deposit of $3,500 on 13 February 2013. [6] According to Pauls chronology of events produced to the Tribunal by Mr Thompson a purchase order was placed with Pauls on 14 February 2013; that on 21 February 2013 Pauls collected the motors from Uniline; that on 22 February 2013 Pauls installation team attended site; that between Friday 22 February 2013 and Tuesday 26 February 2013 installation of all four awnings/blinds was effected by Pauls. [7] According to Mr Kravchenko he waited an excessively long time for the awnings to be installed; that by 26 February 2013 he was desparate to get -- 2 of 7 -- 3 the job finished (it was costing him business); that Mr Thompson’s electrician who turned up onsite to programme the ‘blinds’ had no idea what he was doing and was simply unable to set any programme; that on 27 February 2013 he enquired of Mr Thompson by text regarding completion of the job; that on 27 February 2013 he was informed by Mr Thompson that the electrician would be ‘completing the tensioning today after which the steel frame and blue board will be fitted after which the painting will be done’. On 28 February 2013 Mr Kravchenko asked if plastering would take place that day. Mr Kravchenko stated that on 1 March 2013 plasterers turned up onsite with no safety equipment; that after repeated attempts to contact Mr Thompson by phone that day he finally sent a text to Mr Thompson stating his patience had run out; that he did not want Mr Thompson or his people back onsite; that he would get someone else to finish the job. [8] Mr Kravchenko said he retained a builder Darren Michels to complete plastering, rendering, painting and some metal framing at a cost of some $3,900. Despite opportunity particularly after the first hearing on 6 May 2014 Mr Kravchenko did not produce any invoice for that work. [9] Mr Thompson argued that any such work and any invoice for such was irrelevant as his invoice of 5 March 2013 was only ever for works completed to 1 March 2013 (the day his people were put offsite) pursuant to his cost plus oral contract. [10] Mr Thompson’s invoice dated 5 March 2013 charged for seven items as follows: 1. Screens and motors - $6,321; 2. Vinyl welding - $60; 3. Electrical work Robina Electrical - $456.50; 4. Metal frame repairs - $231; 5. Materials for framing and re-sheeting - $468; 6. Mr Thompson’s supervision - $1,530; 7. Mr Thompson’s builders margin - $1,631.97. [11] Items 2, 4 and 5 were agreed at hearing not to be in contention. [12] Mr Kravchenko said he agreed to 80 per cent of item 1; that items 3, 6 and 7 were otherwise in contention. Item 1 Motors and Blinds [13] Mr Thompson asserted that after a lot of time and effort particularly dealing with Pauls he was satisfied that suitable motors had been sourced and were available for installation by Pauls; that Pauls quote for supply of four motors was as invoiced by Pauls on 28 February 2013 the only addition being that this invoice included the labour charge at $1,800; that he paid Pauls $2,000 in good faith for Pauls to install the four motors and -- 3 of 7 -- 4 ancillary fittings; that Pauls tax invoice was properly and reasonably $6,321. Mr Thompson said he was required then in terms of his cost plus contract and in terms of his relationship with Pauls to pay Pauls the outstanding $4,321 ($6,321 minus $2,000). [14] Mr Kravchenko stated that whilst Pauls had done their job not to his complete satisfaction that in due course the job had been completed. He said that after terminating Mr Thompson there were numerous attendances with Pauls and that Uniline were called in twice to fix the installed awnings. He said that all of this had nothing to do with Mr Thompson. Mr Kravchenko said he was prepared to honour Mr Thompson’s invoice item 1 to 80 per cent of $6,321. Whilst Mr Kravchenko suggested Pauls was primarily a domestic installer Mr Thompson said this installation was within Pauls scope of works and that Mr Kravchenko was not qualified to pass opinions a long time after the event. [15] Mr Kravchenko suggested the cost of motors as quoted by Pauls was excessive but Mr Thompson said it was a commercially acceptable quote and that in any event the contract between himself and Mecca Bah was a cost plus contract. Mr Thompson contended that it was part of his cost plus contract for him to source the motors at a reasonable cost which he said he had done. Conclusion [16] Pauls as a third party commercially independent entity effected the installation at a commercially acceptable charge. That accorded with Mr Thompson’s cost plus oral contract brief. After installation of the motors and blinds/awnings by Pauls there were some initial operating problems. Mr Kravchenko having dismissed Mr Thompson on 1 March 2013 dealt directly with Pauls and Uniline. Those initial problems were attended to and the motors and blinds/awnings then functioned adequately. There was no evidence produced to the Tribunal supportive of the contention that Pauls quote was excessive. With the motors and blinds/awnings installed and functional the Tribunal finds Pauls invoice payable in full. Item 3 Electrical work Robina Electrical [17] Robina Electrical charged Mr Thompson $456.50 inclusive of GST for electrical work conducted onsite. Its invoice of 5 March 2013 charged for ‘connected motorised awnings, programmed controller and motors’. Labour consisted of five hours for an electrician and two hours for a trades assistant. [18] Mr Kravchenko asserted that he observed four powerpoints to have been connected; that the electrician who attended was unable to or was incapable of programming the blinds/awnings; that Nice (the manufacturer) and Uniline eventually programmed the blinds. -- 4 of 7 -- 5 [19] Mr Thompson argued that with the electrician charging five hours only that he had not ever charged for programming; that the electrician attended site on some three occasions; that travelling time, rewiring and connecting powerpoints would have taken at least five hours in any event; that there was never any charge in reality for programming. Conclusion [20] Though charged for it is was not prosecuted with credibility that the electrician ever programmed anything. Rather it was contended that the installation of four power points warranted payment of $456.50. But that is not what the electrician’s own invoice says. It would appear the electrician has included a charge for at least attempting programming. There is no individual monetary itemisation in the invoice just the recitation of connecting and programming. It is reasonable to conclude that half of this invoice only ought to be allowed ie $228.25. Item 6 Supervision [21] Mr Thompson asserted his supervision of the job in the period end January 2013 through 1 March 2013 was in fact more than 18 hours; that supervision was not restricted to onsite supervision but included telephone calls, correspondence and attendances with Pauls particularly in the first few weeks of February when sourcing suitable motors was a priority. He contended there were real difficulties in sourcing motors and relied on Pauls letter of 20 March 2013 to himself confirming a substantial amount of time spent by both himself and Pauls on phone calls and enquiries; that in any event he claimed supervision only to the date he was dismissed by Mr Kravchenko. [22] Mr Kravchenko estimated that Mr Thompson had spent no more than two hours onsite; that it was he Mr Kravchenko who repeatedly had to manage various contractors onsite; that there was no supervision of contractors using scaffolding; that Mr Thompson’s inattention to the job at hand meant that to the time he dismissed Mr Thompson the job had already taken a month; that there was a complete disregard for OH & S factors. Conclusion [23] There was no written record of onsite supervision only Mr Thompson’s assertion that he spent 18 hours plus onsite. Mr Kravchenko was the restaurant manager present onsite and would have been better placed to remember when Mr Thompson visited and supervised the site particularly so given his eagerness to have the job completed quickly. There was no evidence to the effect that nor was it asserted that Mr Thompson attended the site on 22 February 2013 and 26 February 2013 in a supervisory capacity when the installation of motors and blinds/awnings took place. [24] Mr Thompson’s assertion of offsite supervision is not supported by any reference to time. If it was agreed that an hourly rate be charged for supervision and the Tribunal finds that it was, then it was encumbant on -- 5 of 7 -- 6 Mr Thompson to maintain some reasonable record of dates and times. It is not enough to assess the degree of supervision by reference to the size of the job. The Tribunal accepts that some supervision would have taken place for the job to get as far as it did by 1 March 2013. Based on all the evidence the Tribunal allows an estimate of 9 hours supervision ie $765. Item 7 Margin [25] Mr Thompson stated that he was a licensed builder of many years standing and a person familiar with industry margin standards. He asserted that his margin at 18 per cent was less than industry standard; that a margin of 20 per cent was usually applicable to a job over $200,000; but a job less than $100,000 was usually subject to a margin of between 25 per cent and 27.5 per cent; that in hindsight his margin here was too low; that his margin included his administration; that it was agreed that the contract being a cost plus contract included a builders margin. Mr Kravchenko pointed to a lack of proof of industry standards. Conclusion [26] That the contract between the parties was always a cost price contract was not disputed. Rather Mr Kravchenko sought proof of the percentage margin that ought to apply. There is no regulation or schedule setting out what builders margin ought to apply in this particular instance. The Tribunal accepts Mr Thompson’s evidence that 18 per cent is reasonable in the circumstances. The Tribunal allows a builders margin at $1.453.18 being 18 per cent of the adjusted total of items 1 to 6 ($8,073.25) of Mr Thompson’s invoice of 5 March 2013. In Finality [27] The Tribunal accepts Mr Thompson’s assertion that he provided an oral estimate of around $10,000 rather than guaranteeing his invoice would be less than $10,000. Given his years of experience the Tribunal finds it is unlikely he would have subjected himself to such a constraint. [28] Items 1 to 7 of the invoice of 5 March 2013 are allowed at $9,526.43. GST is allowed on items 6 and 7, being the two charges not already subject to GST in terms of the cost plus contract, at $221.81. $3,500 was paid on the 19 February 2013 leaving $6,248.24 as properly payable. Mr Thompson’s costs claim of $1,100 is not allowed. It is not for the Tribunal to make orders for costs incurred in what is effectively another jurisdiction quite apart from the fact that there is no authority to award costs in the context of a minor civil dispute. Document preparation falls within the ambit of costs and is disallowed. Interest at the QCAT calculator rate is allowed for the period 30 April 2013 to 20 May 2014 on $6,248.24 in the sum of $442.68 together with the filing fee of $101.40. The total allowed therefore is $6,792.32. -- 6 of 7 -- 7 Order 1. The respondent pay to the applicant the sum of $6,792.32. -- 7 of 7 --