Dutta v Kits t/as DesignBuild Homes [2013] QCAT 724

CITATION: Dutta v Kits t/as DesignBuild Homes [2013] QCAT 724 PARTIES: Prit Dutta (Applicant) v Guy Kits t/as DesignBuild Homes (Respondent) APPLICATION NUMBER: BDL212-13 MATTER TYPE: Building matters HEARING DATE: 29 November 2013 HEARD AT: Brisbane DECISION OF: Member McLean Williams DELIVERED ON: 5 December 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The Application is dismissed. CATCHWORDS: Minor building dispute - Where applicant retains design and construction firm and pays a fixed fee for design services - Where agreement in writing yet not actually signed by the applicant - Where applicant terminates the agreement late in the design process and seeks to be reimbursed the design fee. APPEARANCES and REPRESENTATION (If any): APPLICANT: Mr Prit Dutta, in person RESPONDENT: Mr Guy Kits, in person REASONS FOR DECISION These are my reasons for decision in matter BDL212-13. [1] The applicant is Mr Prit Dutta. The respondent is listed in the proceeding as “Mr Guy Kits trading as “DesignBuild Homes”. That trading name is in fact the trading name of DesignBuild Homes Qld Pty Ltd, and Mr Guy Kits is one of three directors of that company. The matter was heard by me as a minor building matter on 29 November 2013, yet I nonetheless -- 1 of 5 -- 2 determined to reserve my decision, in order to have an opportunity to read the full exchange of e-mail between the parties, which I was advised would no doubt inform my decision making. [2] In his Application for Domestic Building Disputes filed at QCAT on 30 August 2013, the applicant seeks to be refunded $8,000.00 that he paid to the respondent in relation to architectural design work performed on his behalf by the respondent in relation to the proposed renovation of his home at Hawthorne, in Brisbane. [3] At the end of it, Mr Dutta did receive a set of architectural plans from the respondent, but did not use these to guide his renovation. Instead, Mr Dutta had his house renovated using a set of plans from another architect, or draftsman. Having not used the respondent‟s plans Mr Dutta now expects to be reimbursed for the cost of them. [4] At the commencement of the hearing Mr Kitts, who appeared on behalf of the respondent, submitted that the applicant has sued the wrong respondent. At the time that the applicant engaged DesignBuild Homes (in September 2010), DesignBuild Homes was the trading name of the Avalon Property Group Pty Ltd („Avalon‟). At that time, Mr Kitts was a mere employee of the Avalon Property Group, yet subsequently, and prior to the commencement of this QCAT application, Avalon sold that trading name. DesignBuild Homes Qld Pty Ltd now owns DesignBuild Homes, and Mr Kits is one of its directors. In a strict sense, it is correct that the proceeding has been commenced against the wrong respondent. [5] However, I do note from clause 4(iv) of the contract by which DesignBuild Homes Qld Pty Ltd purchased the business from Avalon that one of the conditions of sale was that the seller would indemnify the buyer against all loss, claims, costs or liability in relation to the business in respect of any act, matter or thing which occurred prior to the date of the completion of the sale of the business. Because of that clause, and because Mr Kitts was at all relevant times a key employee at Avalon (whom would be required as a witness in all events), I have therefore allowed this matter to proceed without requiring the applicant to first substitute the Avalon Property Group as a party to these proceedings. [6] DesignBuild Homes is a design, project management, and construction firm. On 1 September 2010, the applicant met with a Mr Peter Chun who was a project consultant employed by DesignBuild Homes. [7] The applicant told Mr Chun that he wished to undertake a major renovation to his home in Hawthorne. During their first meeting Mr Chun explained the DesignBuild architectural process and at the end of that meeting Mr Dutta paid a $2,000 deposit towards the overall design fee of $8,800.00 ($8,000 + GST). The applicant then paid the balance of the design fee on 16 September 2010. -- 2 of 5 -- 3 [8] In would seem from the evidence that has been presented before QCAT that DesignBuild conducts its business processes in a highly routinised manner. As part of the formula, the design agreement is presented in the first meeting with any potential client. I accept that in this instance this would have occurred. It would certainly seem to be the case that Mr Dutta received a copy of the design agreement, yet it is also the case that at no stage did Mr Dutta sign it. This was a departure from the standard business practice ordinarily used by DesignBuild. Mr Kitts told me, and I of course accept, that the respondent always aims to have a signed copy of the design agreement on file before any work is undertaken on behalf any client. In his evidence, Mr Kitts acknowledged that on this occasion this was an oversight by employees of the respondent, which was only detected after several weeks of architectural services had already been performed on behalf of Mr Dutta. A further copy of the design agreement was sent to Mr Dutta, with a request that he sign it. However, Mr Dutta has still not signed the agreement. [9] The conventional design process - as are envisaged by the various stages specified in the DesignBuild design agreement - then commenced. Everything was proceeding in accordance with that schedule, until town- planning difficulties arose with some aspects of the draft concept that Mr Dutta had conceived. [10] Mr Dutta‟s home is situated within a Brisbane City Council demolition control precinct (DCP) and was required to comply with the small lot development code, as well. Yet, Mr Dutta‟s concept also called for the addition of a third storey, that would see the traditional Queenslander-style house exceed the standard 8.5m height envelope. That issue, together with some uncertainties caused by recent and fairly significant changes to the Brisbane City Council Flood Plan brought about by the „lessons‟ delivered to the City by the January 2011 floods meant that the project had an element of town planning uncertainty around it. These factors required that the respondent seek some town planning advice from officers within the Brisbane City Council. Yet, the respondent ended up receiving three conflicting opinions from three different City Council planning officers. Because of this, in February 2011, the respondent recommended to Mr Dutta that they should write to the Brisbane City Council seeking a formal “Request for Written Information” in order to obtain greater certainty from the Council regarding these matters. As is clearly indicated in the design agreement, extra fees are expected from clients in the event that town planning approval are required. [11] It would seem that about the time that all of this was occurring Mr Dutta was beginning wary about additional fees, and anxious to get his project underway. By 17 February 2011 Mr Kitts and Mr Domingo, the head designer at DesignBuild, were advising Mr Dutta that the easiest way by which to avoid any town planning fees, as well as avoid any delay for the project that would be caused by the need to obtain town planning approvals, and ensure that the project could be delivered within Mr Dutta‟s budget would be for him to simply abandon the third storey, and instead -- 3 of 5 -- 4 build the house as a conventional two level structure. For its own commercial reasons the respondent also agreed to waive any fees that it would ordinarily charge in order to re-design the project as a two-storey version. Mr Dutta agreed. [12] On 18 February 2011 Mr Domingo emailed the applicant with a revised two-storey plan. Mr Dutta took this as an opportunity to then further re- design the house. On 22 February Mr Domingo emailed Mr Dutta and advised that, although that it was one thing for DesignBuild to have agreed to absorb the re-design costs to change the draft plans from a three-storey version into a two-storey version, any further changes beyond those strictly necessary to achieve that would necessitate further architectural fees. This piece of advice appears to have been something of a watershed moment in the commercial relationship between the applicant and the respondent. [13] On 23 February 2011 Mr Dutta emailed Mr Kitts to indicate that he no longer wished to proceed with DesignBuild. Ultimately, Mr Dutta did proceed to renovate his house at Hawthorne and to use another builder (one from outside the DesignBuild stable), and a different set of plans, provided by another draftsman. [14] Mr Dutta now seeks to be reimbursed the $8,000.00 that he paid to the respondent for services delivered by them before he terminated their retainer. [15] As grounds for this application, Mr Dutta contends that the respondent deliberately misled him. He contends that DesignBuild committed to deliver an approved design for his home renovation works for $8,800.00. He contends that after paying this amount he did not receive the approved plans, and indeed the respondent made a number of additional requests for further payments. He says that these were all just a grab for fees, because a firm of architects ought know the town planning constraints they must work within. That particular argument is however rejected. It is an obvious instance of very superficial, sophistical reasoning. [16] Mr Dutta further argues that he never signed the agreement. Although it be true that Mr Dutta did not sign the agreement, and it be further true that the design agreement states in part: In signing this agreement you acknowledge and agree to the following… I do not accept the essential contention in the applicant‟s case that he is not bound by the terms or conditions of the design agreement unless and until such time as he has signed it. In this regard I accept the evidence given by the respondent that a copy of the design agreement was provided at the initial meeting to Mr Dutta. I also accept that the process followed by the parties - at least until the point at which Mr Dutta indicated that he wished to proceed no further - was consistent with the design and construction process outlined in the respondent‟s design agreement. I find that Mr Dutta ought to have been aware of the terms of the written (albeit -- 4 of 5 -- 5 unsigned) agreement, and that he had, by his conduct, agreed to be bound by the terms of it. [17] Consistent with the steps outlined in the design agreement the fixed fee of $8,800.00 becomes due and payable at the commencement of the design process and no further fees are payable by the owner (save and except for any third party fees necessitated by soil surveys, town planning, landscape design or structural engineering, all of which is clearly outlined in the design agreement) until such time as the design process has been completed. There is however also a caveat to that. The design agreement clearly articulates that the fixed fee is predicated on a “fixed numbers of actions and attendances by [DesignBuild]”; here, see standard terms and conditions No.8. [18] Ultimately, DesignBuild has diligently worked towards the delivery of a set of plans for Mr Dutta for the fixed sum of $8,800.00 consistent with the design stages set out in the design agreement, although it also be true that these plans were not quite finalised at the time when Mr Dutta walked away from the agreement. Yet, that is not the fault of DesignBuild. At that juncture DesignBuild remained ready, willing, and able to continue the process all the way through to final council approval, and then on to construction. Despite that, Mr Dutta has, by his own conduct, wrongfully repudiated the contract. In these circumstances the applicant has no entitlement to be repaid the fee for architectural services that were performed for him and for which he agreed to pay a fixed fee. [19] The applicant is obligated to pay the sum that he has agreed to pay for the services that have been rendered to him by the respondent, irrespective of whether he ultimately proceeded to use those plans to build his house, which he did not. Conclusion [20] The application is dismissed. -- 5 of 5 --