Ashcroft Constructions Pty Ltd v Jones [2013] QCAT 192

CITATION: Ashcroft Constructions Pty Ltd v Jones [2013] QCAT 192 PARTIES: Ashcroft Constructions Pty Ltd (Applicant) v Duane Jones (Respondent) APPLICATION NUMBER: BDL181-12 MATTER TYPE: Building matters HEARING DATE: 11 March 2013 HEARD AT: Brisbane DECISION OF: Dr B Cullen, Member DELIVERED ON: 22 April 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. Duane Jones to pay the sum of $96,220.29 to Ashcroft Constructions Pty Ltd no later than 31 May 2013. 2. Duane Jones’ Counterclaim is dismissed. CATCHWORDS: BUILDING – Domestic Building Dispute – homeowner‟s conduct amounts to admissions that costs of variation were agreed – builder entitled to recover costs of variation to contract. APPEARANCES and REPRESENTATION (if any): APPLICANT: Ashcroft Constructions Pty Ltd was represented by Alastair Stout. RESPONDENT: Duane Jones was self represented. REASONS FOR DECISION Contract for a “New Home, Pool & Shed” [1] The applicant, Ashcroft Constructions Pty Ltd, entered into a “Major Works Contract for Domestic Building Work” with the respondent, Duane Jones on 9 July 2010. The contract was a fixed price contract, for the total -- 1 of 5 -- 2 price of $250,000.00,1 and purports to be for the construction of a “new home, pool & shed”. Ashcroft was to receive a 14% builder‟s margin as profit.2 [2] Mr Jones is himself a tradesperson, but does not hold a licence to conduct building work. The parties agreed to an arrangement whereby Ashcroft, which does hold a relevant “Builder – Low Rise” license, would employ Mr Jones and then pay him for work that he would do under Ashcroft‟s supervision in completing the contract works on what was to be Mr Jones‟ new home. The existence of this employment relationship is not disputed by the parties. Contract first, plans second [3] Matters between the parties did not go to plan, in large part because there was no building plan at the time the parties entered into the building contract. This fact is not disputed. At some stage, a plan was produced, although the parties do not agree about the date that this happened. At the hearing, Alastair Stout, the Director of Ashcroft, gave evidence that when he eventually saw the plans for the first time, he says on 14 October 2010,3 it became apparent to him that there was no possible way the “new home, pool & shed” could be constructed for the fixed price of $250,000.00. Mr Jones says that he provided the plans at an earlier juncture than 14 October 2010, via email.4 [4] Mr Stout says that when he saw the plans, he informed Mr Jones that the proposed work would – for the dwelling alone – cost more than the contract sum of $250,000.00. He further states that Mr Jones undertook to secure further funding in order to complete the proposed structures according to the plans. [5] Mr Stout says that because he knew Mr Jones, he did not believe he would do the “wrong thing by him”. Mr Stout also says that having a practical discussion about variation costs was difficult, as Mr Jones‟s wife was very ill with a terminal illness. Sadly, Mrs Jones died, and never got to live in the house Mr Jones planned to build for them. Staged progress payments [6] The parties agreed upon a series of stages to complete the structures, with each stage associated with a particular estimated cost.5 Mr Stout alleges that Mr Jones, in the course of his employment with Ashcroft as site supervisor,6 ordered materials required for the building work in a manner that altered the contractually agreed building stages without 1 Ashcroft‟s Application, Annexure A, Item 1-3. 2 Ashcroft‟s Application, Annexure B, Item 2-3. 3 Ashcroft‟s Application, Annexure A, Item 1-4, 2-1- 2-24. 4 Jones‟ Application, Annexure C, Item 1-1. 5 Ashcroft‟s Application, Annexure A, page 3; Ashcroft‟s Application, Annexure B, Item 1- 1- 1-5. 6 Ashcroft‟s Application, Annexure B, Item 3-1. -- 2 of 5 -- 3 Ashcroft‟s knowledge or consent.7 Mr Jones denies Mr Stout‟s claim that he was a site supervisor, and says that he acted as a “foreman carpenter”. As a result, he argues that his access to trade accounts and subcontractors was limited to research, collection and acceptance of materials.8 Mr Jones further alleges that it was Ashcroft that ordered and paid for the disputed materials.9 For reasons that will become apparent later in this decision, I have determined that it is not necessary for the Tribunal to resolve this issue of disputed fact. [7] Mr Stout states that he believes Mr Jones altered the progress of the contract stages in order to facilitate his being able to move into the shed structure and cease renting another property. In fact, Mr Stout did move into the shed, and continues to reside there. The shed is habitable, at least in the sense that it has electric and plumbing. Mr Stout complains that Mr Jones ordered materials to fit-out the shed at an earlier juncture than was appropriate, and which had the effect of significantly increasing the progress payment in issue. [8] The progress payment that is the subject of this dispute is “Invoice 184,” dated 7 February 2011 in the amount of $98,438.35, representing the payment for the “Fixing Stage”. Ashcroft has subsequently amended this amount to reflect a figure owing by Mr Jones of $95,915.79, following revision of the relevant “Job Profit and Loss” statement.10 The non-payment of Invoice 184 [9] Mr Jones did not, following requests by Mr Stout, pay Invoice 184, and as a consequence, Ashcroft ceased all work on the building site.11 After approximately five months had passed, Mr Jones terminated the contract between the parties on 11 July 2012, following Ashcroft‟s cessation of work on the site. It is not disputed that there has since been significant damage, due to weather exposure, to the works that were completed before Ashcroft ceased work. In order to recover damages for the rectification of the damaged works, Mr Jones would need to demonstrate that his termination of the contract was valid. [10] With respect to this issue, Mr Jones says that Ashcroft requested the “Fixing Stage” stage payment, yet did not complete the works necessary to reach either the earlier due “Enclosed Stage” when the roof covering and wall cladding would be fixed, nor the “Fixing Stage” when the internal works, doors, and cabinets would be installed. [11] It is clear that neither the “Enclosed Stage” nor the “Fixing Stage” as defined by the contract have been reached. This alone is not a sufficient basis for the Tribunal to determine that Ashcroft should not be entitled to 7 Ashcroft‟s Application, Annexure A, Item 4-5. 8 Jones‟ Application, Annexure C, Items 4-1 – 4-3, 5-49, 5-51. 9 Jones‟ Application, Annexure C, Items 5-1, 5-6, 5-14, 5-16, 5-18 – 5-31, 5-41, 5-43, 5- 44, 5-46 – 5-48. 10 Ashcroft‟s Application, Annexure B Item 2-1 to 2-3. 11 Ashcroft‟s Application, Annexure D, Item 1-21. -- 3 of 5 -- 4 payment. I say this for the reason that as works progress, the amount that may be claimable by the parties for each stage may be varied. The parties themselves both argued that there were no signed variations for this project. I am not satisfied that this is the case. Instead, I consider Invoice 184 to be both an invoice and a variation document. Invoice 184 was also a signed variation document [12] Invoice 184, under the subheading “Description” reads: “Invoice – Variations (Not included in original scoping or contract as per attached costings and as per agreement by Duane Jones).” [13] Mr Jones admits that he has signed the bottom of Invoice 184, but says that it is not evidence of his agreement with respect to the variations, for the reason that he signed “Recieved [sic].” It is his argument that this places the variations in dispute. I do not agree. On this point, I do not believe that use of the term “received” is sufficient to indicate that a variation is disputed. Were it genuinely disputed, one would expect language indicating that there was a dispute, in addition to the receipt, of the invoice. There is no evidence of this nature before the Tribunal. [14] Rather, the issue about whether the variations were legitimate was raised only after Mr Jones‟ bank advised him that they would not lend further monies to him, nor release the monies it had already agreed to lend to him. It appears that the bank was still of the belief that this house, pool and shed, could in fact be built for the fixed price of $250,000, as that was what Mr Jones had communicated to the bank. [15] In his Statement of Evidence, Mr Stout alleged that Mr Jones admitted that he „ordered materials that he should not have‟12 and that he would speak to his bank for variation payments. Mr Jones applied for $140,000.00 additional funds for variations,13 which was denied.14 At the hearing, Mr Jones admitted that he did apply to his bank for additional funding to make the variation payments requested of him by Ashcroft. I find that this is an admission on the part of Mr Jones, as the term admission is understood in the context of the laws of evidence as they relate to civil proceedings. I find that the Tribunal is entitled to draw the inference that Mr Jones, in having acknowledged that he received Invoice 184, and having then applied to his bank for finance, has accepted the variations contained on Invoice 184. [16] In view of this finding, Mr Jones was obliged to make payment to Ashcroft, and was not entitled to terminate the contract. It is unfortunate that Mr Jones found himself in a difficult lending position, and tragic that the dream he had built with his wife has not been realised. However, the finance arrangements were beyond the control of Ashcroft, and it should not suffer a loss due to the position ultimately taken by the bank. 12 Ashcroft‟s Statement of Evidence, page 4. 13 Ashcroft‟s Application, Annexure D, Item 1-9. 14 Ashcroft‟s Application, Annexure D, Item 1-15, 1-19. -- 4 of 5 -- 5 Ashcroft should be paid for the work it performed [17] At the time Invoice 184 was issued, Ashcroft had already incurred the costs for the work associated with the variations to the contract, though it had not completed the stages in accordance with the contract. Mr Stout gave evidence that Ashcroft has paid all of the outstanding debts detailed in the relevant “Job Profit and Loss” statement. Even if Ashcroft could not recover these sums against Mr Jones on the basis of a contractual variation, it could recover them on a quantum meruit basis, as Mr Jones has had the benefit of the work performed, and Ashcroft has substantiated the costs it incurred by submitting the invoices for its actual expenses to the Tribunal. [18] In its application, Ashcroft claimed $105,158.21 for materials, labour and builders margin for works completed. At the hearing, Ashcroft amended its application to make claim for $95,915.79, a figure that excludes interest paid by the Ashcroft, and amendments to the original invoice. [19] Ashcroft additionally seeks the costs of filing in the Tribunal ($304.50 - comprised of a $265.00 filing fee and $39.50 service fee). In all of the circumstances of these proceedings, Mr Jones is ordered to pay the sum of $96,220.29 to Ashcroft ($95,915.79 for works completed and costs incurred on Mr Jones‟ behalf, plus the $304.50 cost of the Tribunal proceedings). [20] For the foregoing reasons, and by virtue of the Tribunal having decided in Ashcroft‟s favour, Mr Jones‟ counterclaim in this matter, which sought a refund of monies paid, damages, funding to complete the contract, and costs, is dismissed. Orders [21] Mr Jones to pay the sum of $96,220.29 to Ashcroft no later than 31 May 2013. [22] Mr Jones‟ Counterclaim is dismissed. -- 5 of 5 --