Feldis Holdings Pty Ltd t/as PGS Constructions v Tweddell & Anor [2013] QCAT 164

CITATION: Feldis Holdings Pty Ltd t/as PGS Constructions v Tweddell & Anor [2013] QCAT 164 PARTIES: Feldis Holdings Pty Ltd t/as PGS Constructions (Applicant) v Rebecca Jane Tweddell Mr James Tweddell (Respondents) APPLICATION NUMBER: BDL228-11 MATTER TYPE: Building matters HEARING DATE: 23 and 24 August, 2012 and 9 November, 2012 HEARD AT: Brisbane DECISION OF: Member Ann Fitzpatrick DELIVERED ON: 12 April 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The respondents pay to the applicant the sum of $38,457.29 within 21 days of the date of this Order. 2. The parties file and serve written submissions in relation to costs by 19 April, 2013 and that they file and serve any submissions in reply by 26 April, 2013. CATCHWORDS: DOMESTIC BUILDING CONTRACT – implication of terms - variations not in writing – provisional sums – deemed practical completion stage Ansett Transport Industries v Commonwealth (1977) 139 CLR 54 Belgrove v Eldridge [1954] 90 CLR 613 Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Lida Build Pty Ltd v Miller (No.2) [2010] QCAT -- 1 of 30 -- 2 431 Q Line Interiors Pty Ltd v Jezer Construction Group Pty Ltd (2002) QSC 088 Ross v Rangel [2004] CCT B432-02 APPEARANCES and REPRESENTATION (if any): APPLICANT: Feldis Holdings Pty Ltd trading as PGS Constructions represented by Mr Paul Stringer, Director RESPONDENT: Rebecca Jane Tweddell and Mr James Tweddell represented by Mr J Hitchcock, Rudkin Hitchcock Grant, Lawyers REASONS FOR DECISION [1] The applicant is a building contractor. Its director Mr Stringer is its nominee. Mr Stringer conducted this matter on behalf of the applicant and was its principal witness at the hearing. [2] The history of this matter is that the respondents, Mr and Mrs Tweddell had engaged another building contractor, Palladio Homes Pty Ltd, to construct a home at Sovereign Island. Mr Stringer was employed as a supervisor on the job by Palladio Homes. [3] The contract with Palladio Homes was terminated before construction was completed. Feldis Holdings Pty Ltd trading as PGS Constructions agreed through Mr Stringer, to enter into a contract with the Tweddells‟ to complete the house. [4] Mr Stringer asserts that Feldis has not been paid the balance of the contract sum, payment for variations, including GST, payment for provisional sum items, including rectification of work performed by Palladio Homes, payment for repairs to flood damaged areas and interest calculated at 10% per day on outstanding money. During the course of the hearing certain concessions were made which affect the quantum of the applicant‟s claim. Feldis has not recalculated the quantum of its claim. I will attempt to do so at the conclusion of this decision. [5] The Tweddells‟ deny any liability to Feldis under the contract and assert by counter-application that they are entitled to payment of the sum of $55,091.22 from Feldis, calculated as follows:  Total Contract Value $747,311.55 Less  Bank payments $706,549.11  Advance payments from Tweddell to PGS $ 17,200.00 -- 2 of 30 -- 3 Contract Balance $ 23,562.44 Adjustments Provisional Sums Allowance in contract $156,500.00 Provisional Sums Allowance spend $120,964.84 Balance $35,886.76 (credit to Tweddells) Variations agreed $ 16,128.64 (credit to Feldis) Tweddell expenses $32,855.54 (credit to Tweddells) Liquidated damages 4/12/09 – 9/07/10 $ 55,091.22 Owing to Tweddells [6] The issues which arise in this case are: 1. the documents comprising the contract and the scope of the contract works; 2. entitlement to claim for variations and value of variations; 3. value of provisional sum items; 4. date of practical completion; 5. entitlement to liquidated damages; 6. validity of the Tweddells‟ termination notice; 7. entitlements of the parties upon termination of contract. The Contract [7] To determine the documents which comprise the contract and to then determine the scope of the contractual works, it is necessary to look first to the Master Builders Residential Building Contract signed by the parties on 11 September, 2009. [8] Item 3 of the Schedule to the contract records the description of works as “Completion of dwelling located at Lot 433 Sovereign Mile, as per attached quotation.” [9] Part J of the Appendix to the contract sets out Special Conditions, being: SC1 Works are to be carried out as per quotation attached. SC2 To be performed as per Flow Chart supplied and attached … [10] Item 5 of the Schedule to contract refers to Plans and Specifications. The contract refers to 13 pages of Plans prepared by Design Imagery, supplied by the Owner. During the hearing Mr Stringer agreed that the Plans in question were those attached to Mr Tweddell‟s statement filed 27 February, 2012. Specifications are said to be not applicable. -- 3 of 30 -- 4 [11] The quotation referred to in the contract is on PGS Letterhead and is dated 12 August, 2009. It declares that “pricing has been carried out in a bill of quantities style according to onsite inspections and Architects “Design Imagery” instructions. The quotation includes an eight page breakdown of work to be performed. [12] Part D of the Appendix to the contract in relation to the method of progress payments sets out a series of five progress payments by reference to a Flow Chart depicting job tasks. [13] I find that the Master Builders Contract including Schedule, Appendix and General Conditions together with the 12 September 2009 quotation, Flow Chart of job tasks and 13 pages of Design Imagery Plans are the documents which comprise the contract documents. [14] It was advanced on behalf of the Tweddells‟ that documents forwarded to Mr Stringer prior to the contract being signed which were ostensibly used by him to complete his quotation for the job form part of the contract. In particular a specification table prepared by Mrs Tweddell and provided to Mr Stringer. That document appears at page 69 of the Exhibit 10, the respondents‟ bundle of documents. [15] Mr Stringer denied that this document formed part of the contract because it was not referred to or attached to the Master Builders contract. [16] I find that the specification table does not form part of the contract. I note clause 3.2 of the General Conditions to the Master Builders contract to the effect that the contract is complete in itself and shall not be varied by reference to any prior representations, conditions or agreement, whether written or verbal. No submissions were advanced as to why the specification should by implication form part of the contract. In any event I find that no circumstances exist for incorporating the specification as an implied term of the contract.1 The specification table is not necessary to give the contract business efficacy. The contract has been reduced to writing and documents forming part of the contact outside the standard form have been specifically addressed. If the parties had intended the specification table to form part of the contract if should have been expressly included at Part J of the Appendix. Entitlement to claim for variations and value of variations/Actual cost of provisional sum items 1 See BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 which discuss implication of a term in order to give business efficacy to a contract, so that no term will be implied if the contract is effective without it. Further if the parties have gone to lengths to reduce their agreement to writing, especially in a standard form contract, it is unlikely the parties have omitted a term necessary to give their agreement business efficacy. See Ansett Transport Industries v Commonwealth (1977) 139 CLR 54. -- 4 of 30 -- 5 [17] The contract requires at clause 12 of the General Conditions that any agreement to vary the Works must be put in writing and signed by the contractor and the owner within a short time and before any work the subject of the variation is carried out. [18] This obligation is reflected in s 79 of the Domestic Building Contracts Act 2000 (DBC Act). The DBC Act also provides at s 84 that a building contractor may only recover an amount for the variation if s 79 has been complied with or only with the Tribunal‟s approval given on an application made under the QCAT Act to the Tribunal by the building contractor. The Tribunal may approve the recovery of an amount by a building contractor for a variation only if the Tribunal is satisfied that either there are exceptional circumstances or the building contractor would suffer unreasonable hardship by the requirement for compliance with s 79 and it would not be unfair to the building owner for the building contractor to recover an amount. [19] At the hearing Feldis Holdings applied under s 84 of the DBC Act for approval of recovery of claimed amounts for variations. [20] The Tweddells‟ object to Feldis Holdings recovering amounts for variations in circumstances where variations are not in writing, noting that on seven occasions variations were put in writing and agreed to by the parties. The Tweddells‟ raise a number of other objections including that the claimed variations were in fact work falling within the scope of the contract and that they at no time waived the requirement for compliance with the obligation to put variations in writing. [21] Mr Stringer gave evidence of a conversation with Mr Tweddell where he alleges that Mr Tweddell told him not to come to him with variations in writing, simply to do the work requested by Mrs Tweddell and that it would be sorted out at the end of the contract. Mr Tweddell strenuously denies that conversation. [22] I do not consider it necessary to make any finding in relation the alleged conversation. I do not consider it relevant to the exercise of the Tribunal‟s discretion under s 84(4) of the DBC Act. [23] Consistent with other determinations of this Tribunal and its predecessor, I consider that Feldis should be entitled to recover an amount for a variation in accordance with s 84 of the DBC Act - if the variation was requested by the Tweddells‟; if the work fell outside the scope of works of the contract and the Tweddells‟ have the benefit of the work. The reasoning for this position is that it would be inequitable and it would cause unreasonable hardship for Feldis to bear the burden of the cost of a variation and for the Tweddells‟ to have its benefit without reasonable payment.2 2 Ross v Rangel [2004] CCT B432-02; Lida Build Pty Ltd v Miller (No.2) [2010] QCAT 431. -- 5 of 30 -- 6 [24] As to the amount Feldis may be able to recover, s 84(6)(a) of the DBC Act provides that if a building contractor is able to recover an amount for a variation the amount is the increase in the contract price worked out in accordance with the contract‟s provisions in relation to variations. Scott Schedule [25] During the hearing the parties referred to a Scott Schedule, Exhibit 12, which sets out in detail the claim by Feldis and the Tweddells‟ response. During the hearing Mr Stringer made certain concessions and changed his claim for variations to provisional cost items, including latent condition items. The following analysis utilizes the numbering system in the Scott Schedule. [26] Item ID. The Tweddells‟ argue that they are entitled to have the sum of $2,200.00 taken into account in the moneys they have paid pursuant to the contract, being a sum they say they paid PGS Constructions after receipt of its invoice dated 11 August 2009, for the cost of preparation of its quotation for performance of the work. By an email dated 25 June 2009, Mr Stringer told Mr Tweddell that the sum is included in the contract price if he is successful with the tender price. [27] There is no evidence of payment of the sum of $2,200.00. Mr Tweddell asserts the sum was paid, Mr Stringer denies that it was paid. I accept the evidence of Mr Stringer who was robust under cross-examination on the point and whose tendered bank statements show no deposit of that amount. [28] Item CP4. Feldis asserts the balance of the contract sum in an amount of $25,762.45 was never paid. The Tweddells‟ agree it was not paid, but say that after adjustments for the true cost of provisional sum items, expenses and liquidated damages, there is no balance owing to Feldis. [29] A finding on this question is made later in this decision. [30] Variation 1. The claim is for the sum of $469.65, including margin, administration fee and GST for sealing around windows after moisture was detected coming through existing seals. The claim is for materials and labour for two men for two hours. The Tweddells‟ say that this was foreseen and identifiable work. Mr Stringer says that this was unforeseeable rectification work related to the work of the previous builder. [31] I accept Mr Stringer‟s evidence on the basis of his building expertise that the work was not foreseeable. [32] I find that the work falls into the category of a latent condition as anticipated by the contract. [33] The contract allowed a provisional sum of $25,000.00 inclusive of GST to cover the cost of rectifying defective work performed by the previous builder, which was not immediately obvious and was therefore described -- 6 of 30 -- 7 as a latent condition. It appears from the breakdown of the contract price set out in the quotation forming part of the contract, that the sum of $25,000.00 did not form part of the contract price of $747,311.55. The quotation says that an amount is only to be claimed in the event that rectification work arising from previous building work is required. [34] During evidence Mr Stringer said that he wished to credit the sum of $25,000.00 to the Tweddells‟ and to claim for each item of work caused by a latent condition on an item by item basis. He also wished to claim a margin on each item. I do not think it is open to Feldis to unilaterally vary the contract in order to treat this work as other than work covered by the provisions in the contract in relation to provisional sums in order to recover a margin on each item of work. [35] The contract provides that a margin of 20% is payable on the extra cost of a provisional sum item. The contract does not allow for payment of an administration fee in relation to provisional sums. In this case the value of the work does not exceed the provisional sum of $25,0000.00 allocated for latent condition works, therefore no entitlement to a margin arises. [36] The only supporting evidence for the sum claimed is in a spreadsheet described as a collation of time and labour. On the basis of Mr Stringer‟s building expertise I am prepared to allow as reasonable the sum of $141.56 plus GST of $14.16 totalling $155.72 for the labour of two men for two hours, however I am not prepared to allow any margin or administration fee. [37] Variation 2. Feldis claims an amount of $109.08 plus a 25% margin of $27.27 an administration fee of $250.00 and GST totalling $424.99 for the cost of cutting and fitting an exhaust fan in the main bathroom after a request for exhaust fans in all wet areas by the Tweddells‟. [38] The contract provides at Item 6 of the Schedule to the contract for a margin of 25% on variations. The quotation forming part of the contract provides for an administration fee of $250.00 per variation. [39] The claim is supported by a time and labour spreadsheet. Based on Mr Stringer‟s building expertise I find this is a reasonable sum for the work performed. [40] The work is not shown in the quotation attached to the contract and is not shown in the Plans attached to the contract. It is shown in the specification which I have found does not form part of the contract. [41] There is no written variation document, however I find that Feldis is entitled under s 84(6)(a) of the DBC Act to recover the sum of $429.99 on the basis that the work performed is outside the scope of the contract, it was work required by the Tweddells‟ and it was performed to their benefit. [42] Variation 3. The sum of $1,274.99 including margin, administration fee and GST is claimed for the cost of supply of an Aneeta window. The work -- 7 of 30 -- 8 is said to have been required because the originally installed window did not conform to Building Services Authority Standards and certification would not be given, in view of the low height of the window. On this basis I find that the work was rectification work required as part of the latent conditions provisions of the contract. [43] I allow the sum of $800.00 inclusive of GST, being the amount of the Logan City Joinery Tax Invoice for the window. The amount falls within the provisional sum allowed for latent conditions as defined by the parties. For the reasons outlined above no margin applies. [44] Variation 4 and 5. A signed variation document, number 010, dated 13 October 2009 relates to these claims. The document records that the owner requested repair to a shower door in bedroom two ensuite and replacement of the shower screen in the master suite with a glass panel. [45] The variation document records a net cost of $2,422.00 a 20% margin of $484.00 and GST to total $3,196.60. The claim by Feldis is for a further $409.15, representing the $250.00 administration fee and a further sum for margin. [46] I reject this claim on the basis that Feldis has waived any entitlement to an administration fee or further margin, by failing to include a margin of 25% and an administration fee in the signed agreement and by performing the work. I reject the claim and find that Feldis is entitled only to the sum of $3,196.60 inclusive of GST as claimed in the variation document. [47] Variation 6. Mr Stringer agreed in evidence that the claim for an additional air conditioner properly formed part of the work performed for a provisional sum. I will deal with the claim later in this decision. [48] Variation 7. Mr Stringer gave evidence that Mrs Tweddell asked him to add aluminium strips to tile work. I accept that evidence. The variation was not recorded in writing. However, the work was performed for the benefit of the Tweddells‟. [49] The work is not described in the contract documents and falls outside the scope of work. I note from the Bunnings invoice dated 4 November 2009 that the cost of the materials was $34.09 exclusive of GST. [50] I find that pursuant to s 84(6) (a) of the DBC Act, Feldis is entitled to recover the amount claimed, being $321.87 comprised of the cost of materials, 25% margin, $250 administration fee and GST. [51] Variation 8. Feldis claims the sum of $514.95 for fitting timber trims to doors and windows in the master suite. The work was not referred to in the contract documents and is beyond the scope of the contract work. [52] The work was requested by the Tweddells‟ and performed for their benefit. No variation was put in writing. -- 8 of 30 -- 9 [53] Under cross examination Mr Stringer admitted that he had not produced any evidence of the subcontractor‟s time involved in performing the work. He relied on a time and materials spreadsheet which attributes a value of $174.51 to the work. The balance of the claim is comprised of the margin, administration fee and GST. [54] I am satisfied based on Mr Stringer‟s building expertise, that the value of the work is reasonable and that Feldis is entitled in accordance with the contract to the claimed margin and administration fee. I find that Feldis is entitled to an amount of $514.95 inclusive of GST, in payment for the variation. [55] Variation 9. Feldis claims the sum of $354.98 for sealing leaking windows. The claim is very similar to the claim for variation 1. For the same reasons as those set out in relation to Variation I, I am prepared to allow the sum of $58.17, disclosed on the labour and materials spreadsheet together with GST of $5.81, totalling $63.99. I find that the claim properly falls within the category of latent conditions provided for in the contract as a provisional amount. [56] Variation 10. The parties signed a written variation number 0001 in relation to the supply and installation of caesar stone to the laundry bench instead of laminex. The agreed sum was $594.00. Feldis now seeks to recover an administration fee and margin, not originally claimed in the variation document. I find that Feldis has waived its entitlement to these amounts by failing to record them on the variation document and proceeding to perform the work. The claim is rejected. Feldis is entitled only to the sum of $594.00 as claimed in the variation document. [57] Variation 11. The claim relates to extra fluing required upon installation of the fireplace. During the course of the hearing it was agreed between the parties that the cost of new flue materials was $1,596.00. [58] I find that the work was required by the Tweddells‟, that it was performed for their benefit and that the work was unforeseen and outside the scope of the contract works. [59] There is no written variation, however, in accordance with s 84(6)(a) of the DBC Act I find that Feldis is entitled to an amount of $1,596.00 plus a margin of 25% and an administration fee totalling $1,919.50 including GST. [60] Variation 12. The Tweddells‟ object to paying a margin and administration fee on the cost of a mirror, which was to have been supplied by them, but which was then supplied by Feldis. They agree to pay the cost of the mirror being $143.00, including GST. I agree that installation of the mirror formed part of the contract works and that supply of the mirror by Feldis does not constitute a variation to the scope of contract works. I award the sum of $143.00 to Feldis. -- 9 of 30 -- 10 [61] Variation 13. This claim relates to connection of a stormwater pump line to the stormwater drain and supply and installation of a temporary pump line over Christmas, in an amount of $1,292.00 including GST. [62] I accept Mr Stringer‟s evidence that the work was required as a result of incorrect installation of stormwater drainage by the previous builder. [63] I find that the work falls into the category of latent condition work provided for as a provisional sum. I allow the sum of $1,421.70 inclusive of GST in accordance with the invoice from M&R Hudson Plumbing Pty Ltd. No margin or administration fee is allowed. [64] Variation 14. This claim is for supply of a gas hose. Feldis agrees that it was contractually obliged to install a barbecue supplied by the Tweddells‟. There was no gas hose available upon installation. Feldis supplied and installed the hose. [65] The Tweddells say that supply of the hose is not a variation to the scope of work. I disagree. Extra work was involved in sourcing and installing the gas hose so that the barbecue supplied by the Tweddells‟ could be installed. The work was required by the Tweddells‟, it was performed for their benefit and was outside the scope of the contract works. In accordance with s 84(6)(a) I find that Feldis is entitled to an amount of $405.63, being the cost of supply and installation of the hose in accordance with the M&R Hudson Plumbing Invoice in an amount of $104.50. In addition Feldis is entitled to a 25% margin, $250.00 administration fee and GST totalling $409.63. [66] Variation 15. Feldis claims a sum of $591.25 for the installation of a copper water feed pipe in a block retaining wall for a water feature near the Bali hut. Invoice Number 1079 form H& R Hudson Plumbing Pty Ltd records a price of $253.00 including GST for this work. [67] The Tweddells‟ deny that any water feature was planned for this area. It is not revealed on the plans and they deny giving instructions for the work. No water feature was in fact installed. Mr Stringer says Mr Tweddell gave the instructions and that the water pipe is installed and capped off. [68] In this case I accept the evidence of Mr Tweddell, given that no water feature appears on any plans and has not since been installed. Although the work appears to have been done I consider it would be unfair to the Tweddells‟ in the circumstances to order payment of any sum for this work. The claim is rejected. [69] Variation 16. Written variation number 2 was entered between the parties in relation to moving a refrigerator in the cellar to install another unit. The cost agreed in the variation document was $792.00. Feldis maintains a claim for an administration fee and margin. The claim is rejected on the basis that Feldis waived any entitlement to those claims by failing to record them on the variation document and performing the work. Feldis is entitled to $792.00. -- 10 of 30 -- 11 [70] Variation 17. Feldis agreed this claim should be properly dealt with as part of the provisional sums allocated for installation of wine cellar. The labour and materials spreadsheet shows an amount of $1,489.12 for the work of dismantling a refrigerator at Mr Tweddell‟s nightclub, relocating it and reassembling it at the dwelling. The Tweddells‟ have accepted this sum. I accept the claim in an amount of $1,489.12 excluding GST as part of the true cost of installing the wine cellar. The balance of this provisional sum item is dealt with later in this decision. [71] Variation 18. Feldis is seeking to recover by way of a variation the sum of $4,294.40 including GST, paid by it to Logan City Joinery to ensure that business would return to service all the windows and doors installed by it under contract to the previous builder. The sum relates to money unpaid by the previous builder plus a margin and administration fee. [72] Mr Stringer says the work was necessary to obtain certification. The Tweddells‟ say the work was necessary to meet the standards in the Building Code. Given it was within the scope of work of Feldis to complete the work and to obtain certification for the dwelling, I agree with the Tweddells‟ that servicing the windows fell within the scope of work of the contract. [73] I find that the work was not unexpected however I note that the cost to have it performed was unexpected, because it involved payment for work outside the scope of work agreed between these parties. [74] I find that there is no variation as the work was not outside the scope of work of this contract. Feldis has chosen an expensive means of performing the work. I accept the Tweddells‟ evidence that they did not authorize the payment to Logan City Joinery. The cost must fall to Feldis to bear. The claim is rejected. [75] Variation 19. During the hearing Mr Stringer agreed not to proceed with this claim. [76] Variation 20. During the hearing Mr Stringer agreed the claim for renewal of damaged wiring should be treated as part of the provisional sum for latent conditions. Feldis now claims the sum of $158.00 in accordance with the Home Theatrix invoice dated 16 November 2009. He seeks payment of a margin. I reject the claim for payment of a margin, on the basis that the provisional sum has not been exceeded. I award the sum of $158.00 inclusive of GST. [77] Variation 21. Feldis claims that Mrs Tweddell requested shelving be fitted to the pool pump areas. The work is outside the work described in the contract documents. Mr Stringer‟s evidence was that shelving was omitted from the room when it was changed from a store room to a pool pump area so no provision was made for shelving in the contract. I accept his evidence. -- 11 of 30 -- 12 [78] The work was performed for the benefit of the Tweddells‟. The only supporting evidence for the value of the work is Feldis‟ labour and materials spreadsheet which attributes a sum of $465.38 to the work. Mr Stringer says that represents one man hour of work and materials. On the basis of Mr Stringer‟s building expertise I accept that is a reasonable sum for the work. [79] I find that the work performed was a variation to the contract works. In accordance with s 84(6)(a) of the DBC Act I award Feldis the sum of $465.38 plus a 25% margin of $116.35, a $250.00 administration fee and GST totalling $914.90. [80] Variation 22. Feldis claims the sum of $232.69 plus a margin, administration fee and GST for four man hours of labour to assist Mr Tweddell‟s security company install cameras at the site. [81] I accept Mr Stringer‟s evidence that the work was performed at Mr Tweddell‟s request. It falls outside the scope of the contract works. The Tweddells‟ have the benefit of the work. [82] The only supporting evidence for the value of the claim is Feldis‟ labour and materials spreadsheet. In view of Mr Stringer‟s building expertise I accept that the amount claimed is reasonable. [83] I find that the work is a variation and in accordance with s 84(6)(a) of the DBC Act I award the sum of $594.95 inclusive of GST. [84] Variation 23. The plans forming part of the contract show a swinging door in the kitchen. The door was onsite upon commencement. It was within the scope of the contract works to hang the door. [85] This claim relates to the fact that the door was not glazed so that it complied with Building Code requirements for a swinging door. A new door cost $366.00 plus GST as per the Corinthian Industries invoice dated 27 November 2009. [86] Feldis claims for the door and labour of one man for two hours. [87] I do not consider the claim to amount to a variation as the work does not fall outside the scope of the contract. In order to give the contract business efficacy I find that it was an implied term of the contract that the door supplied would be fit for its purpose. In circumstances where it was not and Feldis was compelled to replace the door with a compliant door, it should be entitled to recover the cost of the door from the Tweddells‟. I find that Feldis is entitled to recover the sum of $402.00 inclusive of GST. [88] Variation 24. Mr Stringer gave evidence that Mrs Tweddell requested two bins to take removal rubbish and that she agreed to pay for them. Feldis obtained two bins from Gold Coast Bin Hire Pty Ltd at a cost of $640.00 paid by it. Mrs Tweddell says that Mr Stringer offered the use of the bins he had on site at no cost. -- 12 of 30 -- 13 [89] Mr Stringer does acknowledge the bins contained builders rubbish and he has adjusted the claim to a sum less than that invoiced to Feldis to take account of this. [90] On the basis Feldis was using the bins I prefer the evidence of Mrs Tweddell and find that there was no variation of the contract for the hire of bins for her use. The claim is rejected. [91] Variation 25. Feldis claims Mr Tweddell requested a block wall be raised by 1100 mm because the area was a fall area along the driveway and stairs. The claim is comprised of $2,000.00 for rendering, $2,160.69 for blocks and labour together with margin and administration fee, totalling $5,995.95. Supporting invoices are given by McDonald‟s Sold Plasterers, dated 28 November 2009 and BGM Bricklaying Pty Ltd dated 23 November 2009. [92] It was put to Mr Stringer in cross-examination that the block wall was depicted on Drawing No. 2967-02-09 Issue D forming part of the contract. [93] Mr Stringer acknowledged the reference to “1000 high solid wall”, but said that was a reference to a retaining wall and that Feldis constructed a wall above that. [94] It was put to Mr Stringer that he was seeking the cost of building the originally planned wall as a variation. [95] The author of the plans was not called to interpret the plans. [96] Mr Tweddell denied instructing Feldis to construct the wall. His evidence is that the Plans required the wall as constructed. [97] I accept the evidence of Mr Tweddell that he gave no instructions for construction of the wall as the wall appears to be required by the Plans. [98] I find that there is no variation as contended for by Feldis. The claim is rejected. [99] Variation 26. Feldis claims the sum of $5,885.00 together with margin, administrative fee and GST for the cost of rectifying faulty rendering performed by the previous builder and rendering bare concrete balconies. [100] Mr Stringer said that he did not quote to do this work and it does not fall within the scope of works under the contract. [101] He said that he was instructed to do the work by Mr Tweddell. Mr Tweddell denies this is the case because he thought the work was all required under the contract. [102] Mr Stringer was referred in cross-examination to Drawing No. 2967-02-09 Issue D forming part of the plans in the contract which states “Render and Paint all Walls”. -- 13 of 30 -- 14 [103] I find that rendering all walls formed part of the contract works on the basis of the plans forming part of the contract. By s 45 of the DBC Act the builder warrants that if plans form part of the contract, work will be carried out in accordance with the Plans. [104] On this basis I find that there is no variation as contended for by Feldis. I reject the claim. [105] Variation 27. Mr Stringer agreed in evidence that this claim properly falls within the provisional sums allowance. The sum allowed for pool coating was $12,000.00. The two supporting invoices from Spectrum Stone for pool tiling, are for $2,640.00 and $4,775.00 exclusive of GST, totalling $7,415.00. [106] Variation 28. Feldis claims as a variation the cost of supply and installation of feature wallpaper. The contract documents do not refer to wallpapering although the specification found earlier not to form part of the contract does refer to Dulux “Moods” wallpaper for the living room and entrance wall. The quotation forming part of the contract refers to painting the living room. [107] I find that wallpapering was a variation to the scope of works. I find it was supplied and installed to the benefit of the Tweddells‟ at their request. I find that Feldis is entitled to an amount to the extent that it affects the contract price. Feldis has included the cost of painting the living room in the contract price. Some credit should be given for the difference between the cost of painting and the cost of wallpapering the walls in question. Presumably wallpapering is more expensive, however there is no evidence on this point on which I can safely proceed. On that basis I am not prepared to allow an amount for the variation. The claim is rejected. [108] Variation 29. Feldis claims the cost of supplying a new outside toilet pan which was found to have been incorrectly fitted by the previous builder. The Tweddells‟ dispute that there has been any variation because they say that a pre-contractual quote from Reece Pty Ltd, dated 14 July 2009 given to Mr Stringer, provided for the supply of a toilet and that it was therefore part of the contractual scope of works. [109] I find that the quote from Reece Pty Ltd does not form part of the contract documents as it is not referred to in the contract. Provision of a toilet does not appear in the contract documents. [110] I find that the cost falls within the latent conditions provision in the contract and that Feldis is entitled to recover the sum of $915.42 inclusive of GST for rectifying the previous builder‟s faulty work which was not apparent until water was installed. There is no entitlement to any margin. [111] Variation 30. Feldis claims the sum of $2,089.99 being the cost of resubmitting and paying for fresh development approval after the first application was cancelled by the previous builder. The sum claimed appears from Feldis‟ spreadsheet to include an amount for margin, -- 14 of 30 -- 15 administration fee and GST. The supporting documentation for the claim reveals a payment to AI Express Plan Approval Service of $2,252.00 inclusive of GST of which $1,724.00, inclusive of GST appears to relate to fees to authorities. [112] It is not apparent how the claimed amount was calculated given the supporting documentation provided as evidence. [113] However, it is clear that by Item 14 of the Schedule to the contract the owner is responsible for obtaining building approval and responsible for obtaining development approval if applicable to the works. By clause 4 of the General Conditions the owner is responsible for payment of any relevant fee to obtain the necessary building and/or planning approvals. [114] It appears Feldis has paid fees on behalf of the owner, as his agent for the purpose of ensuring building approval and development approval so that the contract works could proceed. Under the contract the fees should have been paid by the owner. The Tweddells‟ have put the builder in a position where one would reasonably consider that the builder is acting on their behalf as an agent. By accepting the benefit of the approvals they have ratified its actions in paying the fees on their behalf. Feldis as agent has an entitlement to recover its costs incurred in acting as the Tweddells‟ agent.3 [115] I do not think this transaction involves a change to the scope of work resulting in a variation, nevertheless, I consider Feldis is entitled to recover the fees paid on behalf of the owner. I find that it is entitled to repayment of the sum of $1,724.00, inclusive of GST, calculated by reference to the Invoice from Express Plan Approval Service for „Other Bodies and Fees”, which the receipt of the Certifiers shows as having been paid. [116] Variation 31. Feldis claims that the previous builder never lodged plans in relation to the swimming pool for approval, prior to construction commencing. Mr Stringer gave evidence that Feldis submitted plans for approval and paid all fees necessary on behalf of the Tweddells‟. [117] I accept Mr Stringer‟s evidence and find that Feldis acted as agent for the Tweddells‟ in lodging swimming pool plans for approval and paying fees they were otherwise obliged to pay under the contract. I find that Feldis is entitled to recover the cost of three invoices from Total Building Consult, dated 9, 14 and 21 December 2009 totalling $1,006.50. [118] I find that this is not a variation to the scope of work, but another example of Feldis acting as agent for the Tweddells‟ in paying the appropriate fees, which gives rise to an entitlement to reimbursement. [119] Variation 32. During the hearing Mr Stringer said that this claim would not be pursued. 3 LexisNexis Butterworths, Halsbury’s Laws of Australia, Vol 1(2) (as at 15 March 2013), 15 Agency, “Rights of reimbursement and indemnity” (15-240). -- 15 of 30 -- 16 [120] Variation 33. During the hearing Mr Stringer said that the claim for applying epoxy seals around outlets to stormwater tanks would be treated as part of the provision for latent conditions. The Tweddells‟ accepted the claim as one for latent conditions. The cost of the work was $286.00 inclusive of GST in accordance with the Wetfix invoice dated 11 December 2009. I find that Feldis is entitled to recover the sum of $286.00 inclusive of GST. [121] Variation 34. Feldis claims that the cost of waterproofing the main bathroom did not form part of its scope of works and that the cost of doing so is a variation. Mr Stringer gave evidence that waterproofing is required by law, but as he had not included it in his quote it did not fall within the contractual scope of work. Based on the legal obligation to waterproof as part of bathroom work, I find that waterproofing was a necessary incident of installation of the bath and that it forms part of the scope of works. I reject the claim on the basis that the work was not a variation to the contract. [122] Variation 35. Feldis undertook work to rebed stairs at the property constructed by the previous builder, because the stairs, risers and treads were non-compliant with the Building Code. The claim relates to work to rebed all external stairs built by the previous builder other than the front stairs. [123] Mr Stringer‟s evidence was that he knew the front stairs were non- compliant and rectification work formed part of the scope of works in the contract, however, he did not know the remaining stairs were non- compliant and accordingly they were not incorporated in the contract. I accept this evidence and note that Mr Tweddell says in his statement dated 10 August 2012, that if Mr Stringer‟s evidence is accepted then the claim should be treated as part of the latent condition provisional sum items. [124] On the basis that the work is rectification work discovered in the course of the contract, I find it falls within the provision for latent conditions in the contract. I find that Feldis is entitled to the sum of $2,574.00 inclusive of GST in accordance with the invoices of Spectrum Stone dated 23 October 2009 and 10 November 2009. [125] Variation 36. Feldis claims it arranged for a contractor to install a satellite dish on the roof of the house at a cost of $385.00, inclusive of GST, which it paid. Mr Tweddell acknowledges this was done, but says the work was done pursuant to a contract direct between Sound Media Systems and himself, which should have been invoiced direct to him, but was for an unknown reason invoiced to Feldis. [126] I accept Mr Stringer‟s evidence that he arranged for the contractor to install the satellite dish. That is consistent with the contractor invoicing Feldis rather than Mr Tweddell. -- 16 of 30 -- 17 [127] The work was required by Mr Tweddell. It was work outside the scope of contractual works. It was done for the benefit of the Tweddells‟ and paid for by Feldis. I find that the work constituted a variation and find that in accordance with s 84(6)(a), Feldis is entitled to payment of the sum of $385.00 plus a margin of 25%, an administration fee of $250.00 and GST totalling $756.25. [128] Variation 37. The parties signed a written variation in relation to installation of insulation in bedroom ceilings. The variation is Variation Number 5 for $1,940.00. This claim seeks payment of a further margin and administration fee. I reject the claim on the basis that Feldis has waived its entitlement to those payments by failing to include them on the written variation document and performing the work. I find that Feldis is entitled only to the sum of $1,940.00 inclusive of GST. [129] Variation 38. During the hearing the parties agreed that the requirement to move the gas feed was a latent condition falling within the provisional sums set out in the contract. On this basis I find that Feldis is entitled to the sum of $187.55 inclusive of GST for the cost of the work in accordance with the M&R Hudson Plumbing Pty Ltd Invoice dated 24 November 2009. [130] Variation 39. The parties entered into written Variation document number 8 in relation to installation of lights for the stairwell and front fence. The agreed amount was $2,415.27. Feldis now claims for a further margin and the administration fee. I find that Feldis has waived any entitlement to these amounts because they were not included in the variation document and Feldis proceeded to do the work. I find that it is entitled to the sum of $2,415.27. [131] Variation 40. The parties entered into written Variation document number 3 to paint a wall in the garage for the sum of $3,649.36. Feldis now claims for a further margin and the administration fee. I find that Feldis has waived any entitlement to these amounts because they were not included in the variation document and Feldis proceeded to do the work. I find that it is entitled to the sum of $3,649.36. [132] Variation 41. During the hearing all parties accepted this claim as part of the latent condition provision in the sum of $916.00. I find that Feldis is entitled to the sum of $916.00 inclusive of GST. [133] Variation 42. Feldis says that door furniture was left on site by the previous builder. It later transpired that some furniture was missing, which was purchased by Feldis. The question of who is to supply door furniture is not addressed in the contract. [134] The Tweddells‟ rely on the pre-contractual specification to establish that provision of door furniture formed part of the contract. On the basis that the specification has been found not to form part of the contract, I find that there was no contractual obligation on Feldis to do so. Given that most of -- 17 of 30 -- 18 the door furniture was present at site, I find by implication that missing door furniture would be supplied by the owner. [135] I do not think it is a variation to the scope of work for Feldis to have purchased the extra items, however, it did so as agent on behalf of the Tweddells‟ and it is entitled to be reimbursed for the cost. I find that Feldis is entitled to the sum of $1,608.74 inclusive of GST in accordance with the invoice from Corinthian Industries (Australia) Pty Limited dated 15 December 2009. [136] Variation 43. Feldis claims the cost of fabrication and installing a handrail on the pool stairs which was necessary to make the stairs comply with the Building Code. It says the plans did not disclose a handrail and the work did not form part of the scope of works. The quote forming part of the contract refers to forming and pouring stairs to the pool area. [137] Mr Tweddell‟s evidence was that the previous builder built a rectangular pool, not a curved one in accordance with the plans. As a result the pool stairs were changed and a handrail became necessary. [138] I find that installing a handrail to stairs constructed by Feldis is a necessary incident of the work of constructing the stairs because of the requirements of the Building Code of Australia. I do not think the scope of work has been varied. The claim is rejected. [139] Variation 44. Feldis claims that it supplied various lights and fittings for external lights which did not form part of the contract. During evidence Mr Stringer said that he was prepared to treat the claim as part of the electrical fit off provisional sum item in the contract. The Tweddells‟ did not object. I find that the sum of $1,840.79 exclusive of GST, in accordance with the invoices from Ideal Electrical Suppliers dated 13 and 26 October 2009 forms part of the actual cost of the provisional sum for electrical fit off. [140] Variation 45. During the hearing Mr Stringer agreed to treat this claim for the repair of a water damaged wall, as part of the provision for latent conditions. The Tweddells‟ through their solicitor accepted the claim in an amount of $2,403.06. I find that Feldis is entitled to the sum of $2,403.06 exclusive of GST, for this work. [141] Variation 46. Feldis claims as a variation the cost of collecting the balance of an order from the Lighting Superstore which Mrs Tweddell did not have time to collect. The Invoice from The Lighting Superstore is addressed to James and Bec Tweddell, in an amount of $1,497.30. I find that this was not a variation to the scope of work, however Feldis was acting as agent for the Tweddells‟ in collecting and paying for the goods and it is entitled to be reimbursed the sum of $1,497,30 inclusive of GST. [142] Variation 47. Feldis claims that the previous builder incorrectly installed pipework to the spa and pool and that a pump should have been installed at the time the pipework was done. Mr Stringer said in evidence that it was -- 18 of 30 -- 19 not evident this had not been done because the work is underground and it became necessary during the course of the work by Feldis for this to be rectified. On this basis, the claim was changed during the hearing from a claim for a variation to a claim arising from a latent condition as provided for in the contract. No objection was raised by the Tweddells‟. On this basis I find that Feldis is entitled to the sum of $555.00, inclusive of GST as part of the latent condition provisional sum, in accordance with the invoice from Active Pool Supplies, dated 25 March 2010. [143] Provisional Sum Item 1. The contract at Part B of the Appendix records a provisional sum item as “Electric Gate to Entrance”. Mr Stringer said in evidence that he had made a mistake by not making it clear that the provisional sum item was to cover both the driveway and the pedestrian gate. It is clear from the contract that both gates were to be installed. [144] Mr Tweddell submits that he relied on only one gate being a provisional sum item. [145] Given that the contract does not include the pedestrian gate in the provisional sum items, I cannot make any finding that Feldis is entitled to recover the cost of the gate as a provisional item. [146] Accordingly, I find that Feldis is entitled to recover the sum of $4,800.00 exclusive of GST for the electric gate. The sum of $1,700.00 being the difference between the provisional sum allowance of $6,500.00 and the actual cost of the item is to be deducted from the contract price. [147] P2. The claim for fitting the champagne bar is abandoned so that the whole of the provisional allowance of $8,000.00 is credited to the contract price. [148] P3. The provisional sum allocated to installing a wine cellar is $13,000.00. The actual cost is comprised of:  the amount for installation of the refrigerator which was previously claimed as Variation 17, in an amount of $1,489.12 exclusive of GST;  $1,845.00 exclusive of GST (Invoice Jansson Family Trust dated, 2 November 2009) and $1,396.65 exclusive of GST (Invoice Greenmount Timber dated 7 October 2009). [149] An invoice for painting wine racks has been provided in evidence but it is not possible to separate the amount for this work from the total painting charge shown on the invoice for a variety of painting jobs. [150] I find that the true cost of the provisional item of work is $4,730.77 exclusive of GST. The sum of $8,269.23 being the difference between the provisional sum allowance and the actual cost of the work is to be deducted from the contract price. -- 19 of 30 -- 20 [151] P4. At the hearing Mr Stringer conceded that a full credit of $12,500.00 should be given for the epoxy finish to floor provisional allowance. [152] P5. A provisional sum allowance of $6,000.00 was given for patching the walls of the elevator. No invoices supporting the value of the work done were provided. On this basis I can make no finding as to the actual cost of the work. A credit of $6,000.00 should be given. [153] P6. At the hearing Mr Stringer conceded that a full credit of $5,000.00 should be given for the provisional sum allowance for verandah outside mouldings. [154] P7. A provisional allowance of $12,000.00 was given for inside coating pool. Burleigh Pools Invoice dated 15 January, 2010 for $8,181.82 exclusive of GST supports the actual cost. The sum of $7,415.00 being the previously claimed Variation 27 was agreed at the hearing to form part of the actual cost of this work. The parties agreed that the actual cost of this item of work was $15,596.82. Accordingly the actual cost exceeds the provisional allowance by $3,596.82. Feldis is entitled to a margin of 20% on this sum, giving an amount of $4,316.18 by which the contract sum should be increased. [155] P8. A provisional allowance of $25,000.00 was given for electrical fit off work. I accept the evidence of Mr Stringer, based on his building expertise that electrical fit off means all electrical work. Supporting invoices to the value of $23,540.42 exclusive of GST are in evidence. In addition the sum of $1,840.79, exclusive of GST has been allowed as part of the cost of electrical fit off from the previously claimed Variation 44. In total the actual cost of the electrical work was $25,381.21. Accordingly the actual cost exceeds the provisional allowance by $381.21. Feldis is entitled to a margin of 20% on this sum, giving an amount of $457.45 by which the contract sum should be increased. [156] P9. A provisional allowance of $10,000.00 was given for the handrail to the internal stairs. Both parties are agreed that the sum of $10,837.50, exclusive of GST, is the actual cost of the work and that it is supported by an invoice from Coastline Glass dated 23 September 2009. Accordingly, the actual cost exceeds the provisional allowance by $837.50. Feldis is entitled to a margin of 20% on this sum, giving an amount of $1,005.00 by which the contract sum should be increased. [157] P10. A provisional allowance of $20,000.00 was given for air-conditioning fitoff . A written variation was signed by the parties, being for “Price variation to complete air-conditioning including installation of additional unit to the main bedroom. PS Allowance is $20,000.00. Total $22,647.00 difference of $2,647.00”. The extra cost plus a margin and GST in an amount of $3,494.04 is said by the Tweddells‟ to have been paid resulting in no extra money being payable. [158] Mr Stringer‟s evidence is that a sum of $9,872.00 (originally claimed as Variation 6), represents an increase in the provisional sum and that the -- 20 of 30 -- 21 variation is irrelevant because at the time the variation was agreed there was still more work to do on the air-conditioning. [159] To demonstrate the actual cost of the air-conditioning work, Mr Stringer has tendered three invoices from Glenn Airconditioning and a quotation for supply and installation of a Daikin ducted system to the master bedroom. The three invoices add up to $32,498.90, exclusive of GST. If one deducts the sum of $3,176.40 paid by way of variation and margin, the balance is $29,322.50. That is $9,322.50 more than the provisional sum. [160] I am satisfied on the basis of the invoices that the actual cost exceeded the provisional sum by $9,322.50. I am satisfied that although a variation was agreed for the extra air-conditioning unit, that did not resolve all the costs associated with the air-conditioning installation for the dwelling. Feldis is entitled to a margin of 20% giving an amount of $11,187.00 exclusive of GST by which the contract sum should be increased. [161] PS 11. A provisional sum allowance for carpet of $10,000.00 was given. Invoices reveal the actual cost to be $15,681.82 exclusive of GST. The Tweddells‟ take no issue with that amount. Accordingly the contract price should be increased by $5,681.82 plus a margin of 20%, totalling $6,818.84. [162] PS 12. A provisional sum allowance for cabinetry to the lanai of $3,500.00 was given. An invoice from Smart Joinery Pty Ltd, dated 25 November 2009, reveals the actual cost to be $3,830.00 exclusive of GST. The Tweddells‟ take no issue with that amount. Accordingly, the contract price should be increased by $330.00 plus a margin of 20% in an amount of $396.00. [163] Latent conditions. A provisional sum allowance for latent conditions of $25,000.00 was given, which did not form part of the contract price, but was to be claimed if required. Work previously said to be variations, but which was changed during the hearing to form part of the latent conditions cost, covered Variation Claims 33, 38, 41, 45 and 47. Further, I have found that Variation Claims 1, 3, 9, 13, 20, 29 and 35 form part of the latent conditions cost. I have found that the work covered by these claims was rectification work falling within the scope of the latent conditions provision of the contract. [164] The total actual cost of performing the latent conditions work is $10,430.44, inclusive of GST. Interest [165] Feldis claims interest on the outstanding amount at the rate set in the contract. I find that there is no entitlement to interest, because of Feldis‟ failure to deliver supporting invoices in relation to the provisional sum items of work, which meant no proper claim for payment was made on which interest could be charged. -- 21 of 30 -- 22 Reconciliation [166] The following reconciliation is based on my findings in relation to Feldis‟ claims. Total contract value: $747,311.55, inclusive of GST Less Bank Payments: $706,549.11 Less Deposit: $ 15,000.00 $ 25,762.44 Plus reimbursement: $ 6,381.54 Plus variations: $ 18,902.03 Plus the amount by which the actual cost of provisional sum items exceeds the allowance, inclusive of GST: $ 26,598.51 Plus cost of rectification of latent conditions: $ 10,430.44 $ 88,074.96 Less provisional sums not expended: $ 41,469.23 Amount claimed by Feldis: $ 46,605.73 inclusive of GST. [167] In arriving at these amounts I have relied only on the evidence of Mr Stringer and Mr and Mrs Tweddell. Mr Coleman, Quantity Surveyor, prepared a report for Feldis in relation to the reasonableness of its claims. Mr Coleman gave his evidence by telephone, but he did not have any plans or documents relevant to the claim with him, so that he was unable to be of assistance to the Tribunal when cross-examined about various items of work. Further it appeared he had not visited the site before preparing his report. His report did not set out the bases on which his conclusions were reached. I accept the submissions of the Tweddells‟ that it did not appear from the report Mr Coleman had done any measurements or calculated any quantities or compared prices to known or published schedules. On these grounds I have attributed no weight to Mr Coleman‟s report. Chronology of events [168] The following chronology of events assists in determining the remaining issues. [169] The completion date on the contract is 4 December 2009. -- 22 of 30 -- 23 [170] The Tweddell family took up occupation of the dwelling on 30 November 2009. Under cross-examination Mr Stringer said that he agreed to the family moving in. There is no evidence that Feldis agreed in writing to early occupation. [171] Mr Tweddell‟s 23 February 2012 statement sets out the following key dates and events, following the family‟s occupation of the house. These facts are not contested. 1. 3 December 2009, a faulty tap/pipe connection failed causing flooding and damage to the home. As a result the family moved out. Accommodation costs were $4,854.00. 2. 1 February 2010 Mr Tweddell gave Mr Stringer a list of items to complete works. 3. Early to mid -February, porte cochere completed. 4. 23 February to 16 March 2010 and 6 April to 13 April 2010 repair works carried out to flooded areas. 5. 24 February 2010 Mr Stringer advised of leaking in basement. Agreed to be rectified as a latent condition. 6. 19 March 2010 Mr Stringer sent a final invoice dated 5 March 2010, for practical completion and balance of contract totalling $121,423.94 together with a spreadsheet setting out costs. 7. A couple of days later Mr Tweddell and Mr Stringer met. Mr Tweddell said practical completion was not reached, because certification was not complete. He sought copies of all variation documents and invoices for provisional sum items. 8. 30 March 2010 quote for repairs to basement approved. 9. 3 May 2010 Mr Tweddell sent Mr Stringer a complete list of items to be completed and photos. 10. 5 May 2010 and 10 May 2010 Mr Tweddell removed epoxy to garage and fit out of bar in champagne bar from contract, sought completion date, when final certificate will be complete, copies of all signed variation documents and details of costs of provisional items. 11. 10 May 2010 revised list of items for completion sent together with photos by Mr Tweddell to Mr Stringer. 12. 11 May 2010, Mr Stringer emailed a copy of an inspection certificate dated 30 April 2010, which revealed compliance in all but provision of a completion certificate for termites. Mr Stringer asserted in that email that practical completion was reached on 30 April 2010. Final payment on the contract of $37,365.57 was said to be due and that no work would be conducted on site until the account is settled. -- 23 of 30 -- 24 13. 11 May 2010 Mr Tweddell emailed Mr Stringer requiring the final certificate and copies of variations and details of costs for provisional sum items. 14. 3 June 2010 Mr Stringer emailed Mr Tweddell with a copy of a letter from Express Plan Approval Service advising a number of certificates were required before the final certificate could issue. He said that the insulation, waterproofing and termite certificates were unable to be obtained by him because they related to work done by the previous builder. Mr Stringer advised he had obtained all other certificates. 15. 8 June 2010 Mr Stringer advised he had signed off on an insulation certificate. 16. 16 June 2020 Mr Tweddell confirmed he was sourcing termite and waterproofing certificates which were affected by the Palladio dispute and settlement of that dispute. 17. 22 June 2010 Rudkin Hitchcock, lawyers for the Tweddells‟ sent a notice to remedy breach to Feldis. The breach was said to be suspending work under the contract, failure to advance the contract work towards completion and certification by performing building work or obtaining certificates, including the final certificate. 18. 9 July 2010 Rudkin Hitchcock wrote to Feldis terminating the contract for failure to remedy breach. 19. 12 July 2010, facsimile received from Harris Sushames, lawyers for Feldis, dated 28 June 2010 asserting the dwelling reached practical completion when the Tweddells‟ took occupation; because of the involvement of Palladio it was not within Feldis‟ power to obtain final certification; payment is required given practical completion stage has been reached.; Feldis suspended work because of a failure by the Tweddells‟ to make payment and the only remaining work is rectification of defects. [172] After termination of the contract the Tweddells‟ proceeded to have further work performed and obtained the final certificate. [173] In cross-examination Mr Stringer admitted that supporting documents for provisional sums were only provided in stages, including in February, 2012 and at the hearing. [174] Mr Stringer‟s evidence is that from late February/early March Feldis was locked out of the property, however he had earlier met with Mr Tweddell in October and discussed a list of work remaining and thereafter undertook work. He said that a defects list was provided . I note that the only lists of defective or incomplete work before the Tribunal are those prepared and revised by Mr Tweddell. -- 24 of 30 -- 25 [175] Mr Stringer also gave evidence that he met with Mr Tweddell in January 2010 taking with him a list of claims for extra work and claiming the balance of the contract sum. [176] In evidence Mr Tweddell agreed he met with Mr Stringer in January 2010, but denied he was given any document other than items in relation to the Palladio matter which he said had nothing to do with the Feldis contract. His evidence was that he had paid for everything except payment due on reconciliation of provisional sums for which there was no supporting evidence. Did the contract reach practical completion? Are the Tweddells entitled to Liquidated Damages? [177] Practical completion stage is defined in the contract as “that stage of the Works when the Works completed in accordance with the Contract and all relevant statutory requirements, apart from minor omissions or minor defects, and the Works are reasonably suitable for habitation. Where the Owner has engaged consultants including the Building Certifier, then Practical Completion under the contract means the stage of the Works when the Works are completed, are reasonably suitable for habitation, with minor omissions and minor defects. The Builder shall only be required to provide support documents to the Owner to allow a Certificate of Completion to be issued.” [178] Relevant to the issue is clause 17.9 of the General Conditions, relied on by Feldis. The clause provides that: “If the Owner takes Possession of the Works, or any part of the Works, when not entitled to do so under this contract, the Works are deemed to have reached Practical Completion Stage on the date of Possession and the owner is liable to the Contractor for any loss or damage arising as a result.” [179] Within the terms of the contract the Tweddells‟ would ordinarily be entitled to take possession of the dwelling when the definition of Practical Completion Stage has been met and when the steps set out in clause 17 of the General Conditions have been met. That is, the giving of a final progress claim and Practical Completion Stage Notice by Feldis; attendance at a final inspection and signing of a defects document by the parties; and payment of the final progress claim to Feldis. Alternatively they are entitled to possession prior to payment of the final progress claim if they have Feldis‟ written consent. [180] The Tweddells‟ took possession of the dwelling before these steps were taken and without any written consent. Accordingly it would appear that Practical Completion is deemed to have been reached. However the Tweddells‟ submit that they took possession with the consent of the builder and that Feldis‟ own conduct in claiming a later date of practical completion suggests that he placed no reliance on this clause. [181] I take this submission to be an assertion that Feldis is estopped by its conduct from relying on the deemed practical completion provision of the -- 25 of 30 -- 26 contract and the requirement for written consent to early possession. For this to be the case Feldis would need to have made a clear representation that it did not rely on clause 17.9 or the requirement for written consent at the time the Tweddells‟ advised they were moving into the dwelling. The Tweddells‟ would need to establish that they relied on the representation to their detriment. 4 [182] There is no evidence of any of these matters. I find that there was no sufficient representation by Feldis that it was waiving its right to assert a deemed practical completion. Feldis gave no written consent to the occupation. To the extent that the representation may be implied from Feldis‟ conduct in failing to raise the implications of early possession, I do not think this is a sufficiently clear representation. In any event the Tweddells‟ would not appear to have relied on such a representation. Mr Tweddell‟s statement reveals that the family sought no consent to their moving into the dwelling, they simply arranged to do so because their existing lease was expiring and informed Mr Stringer of their plans. No implied representation that deemed practical completion would not be asserted encouraged the family to move in the house. [183] Given these matters I find that the contract is deemed to have reached Practical Completion as at 30 November 2009, in the terms of clause 17.9 of the contract.5 Contrary to the submissions made on behalf of the Tweddells‟, I do not consider that reaching the practical completion stage or being deemed to have reached the practical completion stage discharges the contract. The obligation to complete the contract and to attend to defective work remains extant. Liquidated Damages [184] Insofar as liquidated damages are concerned there may be little consequence from my finding that deemed practical completion occurred on 30 November 2009. By clause 18.1 of the General Conditions liquidated damages are payable for the period commencing from the date for Practical Completion Stage and the day the works reach Practical Completion Stage or the date the Owner takes possession, whichever is the earlier. The date for Practical Completion Stage was 4 December 2009. The date the Tweddells‟ took possession was 30 November 2009. Accordingly the Tweddells‟ have no entitlement to liquidated damages. 4 LexisNexis Butterworths, Halsbury’s Laws of Australia, Vol 12 (as at 21 March 2013), 190 Estoppel, “Estoppel by representation” (190-240). 5 See Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302, where White J agreed with a finding of a referee that “In order to prevent unintended disruption of performance and responsibilities under the Contract, a particularly strict code is laid down to cover occupation of part of the Works prior to completion of the whole. I think that strict regime applies especially to non-consensual occupation of that kind by the Proprietor, but also extends to a consensual occupation.” In this case clear steps are laid out in clause 17 to be undertaken prior to occupation of the dwelling or written agreement to early occupation is required. If those steps are not followed, the fact of consent to early occupation cannot change the consequences of early occupation. -- 26 of 30 -- 27 Was the contract lawfully terminated so that the Tweddells’ might recover their further costs? [185] As to whether the contract was lawfully terminated, Feldis submits that by clause 20.3 of the General Conditions, the Tweddells‟ were unable to terminate the contract because they were in breach through failing to pay the final progress claim on practical completion, as required by clause 17.7 of the Contract. It further submits that the notice of intention to terminate was not a valid notice as it was uncertain in critical respects. [186] The Tweddells‟ argue that practical completion stage had not been reached and that they were not provided with sufficient invoices to reconcile the final progress claim. [187] I have found that the contract was deemed to have reached Practical Completion Stage. However, I agree with the Tweddells‟ that Feldis had not delivered a final progress claim in the terms of the contract on which payment could be made. Mr Stringer acknowledged in cross-examination that he did not provide copies of invoices necessary to support the actual cost of provisional sum items, until February 2012 and some only at the hearing. [188] Feldis was obliged under clause 9.7 of the General Conditions to provide copies of invoices prior to seeking payment for the relevant item of work. [189] I find that the Tweddells‟ are not in breach of contract by failing to pay the final progress claim on the basis that Feldis failed to comply with clause 9.7 of the General Conditions. [190] As to whether the notice of intention to terminate was a valid notice, the Tweddells‟ were entitled to deliver such a notice in the circumstances set out in clause 20.1 of the contract. They assert a substantial breach of contract by Feldis suspending work under the contract and/or failing to advance the contract work towards completion and certification by performing building work or obtaining certificates as may be needed. [191] A notice of intention to terminate needs to clearly identify a default under the terms of the contract, so that it is clear what must be done to remedy the default.6 [192] Suspension of work is said to be a default. Mr Stringer informed Mr Tweddell on 11 May 2010 that he would not do further work until the final progress claim was paid. Despite this, it appears from the chronology of events that he continued to pursue the final certificate. He did not however undertake any further building work. He said in evidence that the only remaining work was rectification of work performed by the previous builders. 6 Q Line Interiors Pty Ltd v Jezer Construction Group Pty Ltd (2002) QSC 088. -- 27 of 30 -- 28 [193] Feldis is contractually obliged to complete the contract works. To the extent that works remain incomplete or defective they must be completed or rectified during the defects liability period given that the practical completion stage has been deemed to be reached. That is during the six month period from 30 November 2009. [194] The question is whether Feldis was entitled to refuse to do further work during that period, until the final progress claim was paid. I do not think that it was entitled to do so, given that it had not complied with the Contract by presenting the final claim unsupported by provisional sum item invoices. [195] On this ground I do not think the Tweddells‟ issued an invalid notice of intention to terminate as a result of suspension of work. [196] The other default relied upon by the Tweddells‟ was a failure to obtain final certification. Mr Tweddell admitted in his statement that the waterproofing and termite certificates were not within Feldis‟ ability to obtain because of the earlier dispute with Palladio. He undertook to obtain those certificates. Mr Stringer advised that he had obtained all other certificates necessary to achieve a final certificate before the Notice of Intention to Terminate was given. On this basis I find that the default relied upon was not in fact a default within the power of Feldis to remedy and accordingly the Notice was not a valid notice insofar as it relied upon this alleged default. [197] I find that while Feldis failed to deliver a proper final claim supported by invoices, it was not entitled to suspend work during the defects liability period and as a result the contract was lawfully terminated by the Tweddells‟ on this ground. Entitlement of the parties upon termination of the contract. [198] By clause 20.5 of the General Conditions, if the contract is ended under clause 20 (as is the case here), Feldis is entitled to a reasonable amount for the value of the Works carried out under the contract to the date the Contract is ended. [199] The Tweddells‟ do not say that the final claim, properly adjusted to take account of the actual cost of the provisional sum items and allowed variations is not a reasonable amount for the value of the work carried out under the contract to the date the contract was ended. I note that the work performed by the Tweddells‟ after termination was largely for rectification of minor defects. There was no substantive item of work uncompleted. [200] I find that the sum of $46,605.73 calculated earlier in this decision is the balance owing for the value of works carried out under the contract to the date of termination and that it is a reasonable amount. I find that the sum of $46,605.73, inclusive of GST, is the amount to which Feldis is entitled under the contract. -- 28 of 30 -- 29 [201] The Tweddells‟ are entitled under clause 20.4 of the General Conditions to recover the cost of engaging another contractor to complete the Work. They are also entitled to recover their loss and damage as a result of Feldis‟ breach of contract.7 [202] The Tweddells‟ claim the sum of $32,855.54 for expenses incurred as a result of the need to terminate the contract. The claim is supported by invoices forming part of Mr Tweddell‟s statement filed 27 February 2012 and is set out in table form in attachment JHT4 to the statement of Mr Tweddell, filed 27 February 2010. [203] Feldis did not seek at the hearing to cross-examine Mr Tweddell in relation to any of these amounts. Nor did Feldis file a response to the counter- application putting the claim in issue. [204] The Tweddells‟ rightly complain that Feldis seeks in its submissions to raise new evidence which did not form part of the hearing. Insofar as new matters are raised by Feldis in its submissions, those matters have been ignored. Otherwise, the question as to whether the Tweddells‟ have proved their claim is based on the evidence at the hearing. [205] The Tweddells‟ agreed in their submissions in reply to withdraw claims for epoxy paint to the garage floor, champagne bar cabinetry, the cost of final certification, sink mixer for the champagne bar and Q Leave levy liability totalling $14,145.72 inclusive of GST. [206] On the basis that Mr Tweddell took over responsibility for obtaining the termite and waterproof certificates, because he acknowledged it was not possible for Feldis to obtain those certificates in light of the Palladio dispute, I reject the claim for the costs of obtaining termite and waterproofing certificates and the cost of the final certificate application. [207] Invoices tendered in support of bath leak damage to ground floor ceiling, pool pump leak detection, removal and reseal of pool lights, rubbish removal, mulching troughs and pressure clean, render repair and other items, power points for the dishwasher and fridge, window cleaning, paint for patch ups and electrical fault for the stove all appear to be as a result of incomplete work or a failure, in breach of clause 10.1 of the General Conditions, to perform work in an appropriate and skilful way or with reasonable care and skill. I accept these claims in an amount of $7,587.44 [208] I reject the claim for cool room shelves on the basis that the invoice said to support the claim is directed to Chilled Vision (a business associated with Mr Tweddell). The date of the invoice is 17 December 2009, a date when the contract with Feldis was still on foot. The invoice suggests that the contract between Andicool and Chilled Vision was a separate arrangement to the contract with Feldis and that the work is not something for which Feldis bears responsibility under the contract. 7 Belgrove v Eldridge [1954] 90 CLR 613. -- 29 of 30 -- 30 [209] I reject the claims for re-hire of temporary fencing and scaffolding. The invoices are addressed to Bec Tweddell and the hire period runs during the course of the contract with Feldis suggesting the contract with Rent a Fence Australia Pty Ltd was independent of the Feldis contract and never formed part of its contractual obligations. [210] I reject the claim for a meeting between Active Pool Supplies and the Builder to advise and hand over on the basis that the Tweddells‟ have not established that commissioning of the pool forms part of the contract scope of works. [211] I reject the claim for reimbursement of accommodation costs in the sum of $4,854.00, borne by the Tweddells‟ whilst repair work to their floors was carried out after a leak from a dishwasher. A consequence of the Works being deemed to have reached Practical Completion Stage is that under clause 17.9 of the contract, the Owner is liable to the Contractor for any loss or damage arising as a result. If the Tweddells‟ had not taken early occupation they would not have had to move out and incur accommodation costs while the repair work was undertaken. The Tweddells‟ must under the contract bear liability for that loss and damage. [212] I accept the claim for water tank inspection and plumbing inspection by Andrew Cotis Plumbing in the sum of $561.00 inclusive of GST. Feldis‟ email dated 3 June 2010 is evidence of Feldis accepting responsibility for the relevant plumbing inspections and obtaining Forms 16. The Tweddells‟ are entitled to recover the cost of performing this contract work. [213] In total I award the Tweddells‟ the sum of $8,148.44 inclusive of GST which they are entitled to offset against the moneys owing to Feldis. Orders [214] I order that: 1. The respondents pay to the applicant the sum of $38,457.29 within 21 days of the date of this Order. 2. The parties file and serve written submissions in relation to costs by 19 April, 2013 and that they file and serve any submissions in reply by 26 April, 2013. -- 30 of 30 --