Crisp v 4 Cast Development [2013] QCAT 79

CITATION: Crisp v 4 Cast Developments Pty Ltd [2013] QCAT 79 PARTIES: Gregory John Crisp (Applicant) v 4 Cast Developments Pty Ltd (Respondent) APPLICATION NUMBER: BDL234-12 MATTER TYPE: Building matters HEARING DATE: 11 February 2013 HEARD AT: Brisbane DECISION OF: Robert King-Scott, Member DELIVERED ON: 15 February 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. 4 Cast Developments Pty Ltd pay Gregory John Crisp the sum of $21,016.05 by 31 March 2013 CATCHWORDS: BUILDING DISPUTE – where contract for sale of land and house – where agreement that fittings not to be installed - where cost of omitted fittings allowed Hissett v Reading Roofing Co (1970) 1 All ER 122, cited Jollife v Baker (1883) 11 QBD 255, cited APPEARANCES and REPRESENTATION (if any): APPLICANT: Gregory John Crisp in person RESPONDENT: Shayne Boyd as agent for the respondent REASONS FOR DECISION [1] By a contract dated 27 March 2008, 4 Cast Developments Pty Ltd (‘4 Cast’) agreed to sell to Gregory Crisp land situated at Ranlily Crescent, Coomera Springs for $600,000 (‘the sale contract’). There was a special -- 1 of 7 -- 2 condition of the sale contract that 4 Cast would complete construction of a dwelling on the land in accordance with the plans and specifications which form part of the sale contract. At the time of the sale, the land was vacant. Completion date for the sale contract was 16 February 2009. Settlement of the sale contract took place on that day. [2] The house was constructed by Bdun Constructions Pty Ltd (‘Bdun’). [3] It was also a special condition of the sale contract that on or before completion, Mr Crisp would enter into a licence agreement with 4 Cast to grant 4 Cast a licence to occupy the premises for a monthly licence of $4,000. It was intended that the house would be used as a display home for a period of two years. That period of two years commenced on the date of settlement. [4] Although the licence referred to in the sale contract was to be granted to 4 Cast, it was agreed between the parties that 4 Cast would not sublet the house. The licence, in fact, was granted to the builder, Bdun. [5] Mr Crisp did not inspect the house at the time of settlement. He visited on two occasions prior to taking possession from Bdun under the licence agreement in February 2011. Payments were made in accordance with the licence agreement. [6] In the application for a minor civil dispute, Mr Crisp made his claim against the builder, Bdun. Bdun’s obligations to Mr Crisp arose not out of the building contract as such, but out of the licence agreement. It was a condition of the licence agreement that Bdun yield up the premises in a state of repair and condition as they were at the commencement of the licence.1 [7] Subsequently, 4 Cast was joined as a party in these proceedings on 8 August 2011. [8] On 28 March 2012, the Tribunal at Southport ordered Bdun to pay $1,544 for repair and replacements in respect of items claimed in paragraphs [7] to [11] of the application. [9] Mr Crisp now seeks reimbursement from 4 Cast for Items 1 to 6 in his application. These are items which he says were agreed to be provided under the contract and which were not provided. The items were: a) ducted air conditioning; b) all window furnishings; c) all fly screens; d) granite bench tops for all vanities; 1 Exhibit 1, Licence Agreement, paragraph 6(a). -- 2 of 7 -- 3 e) Merbau2 decking to pavilion floor; f) Merbau decking to ceiling. [10] 4 Cast was represented at the hearing by its sole director, Mr Shayne Boyd. 4 Cast, generally, raised four grounds of defence, in essence, they were: a) The applicant was late in making the claim and was confused as to who was responsible for providing the items; b) The contract provided in its special conditions a mechanism for 4 Cast to alter any finishes specified in the schedule to another or equivalent quality without notice to Mr Crisp3, and such changes had been made in accordance with that condition; c) That as completion of the sale contract had taken place and the matters in dispute had not been raised, then the applicant was precluded from raising it now. This was akin to an argument of the doctrine of merger. The respondent also referred to a special condition that provided that if any disagreement arose in connection with the finishes, then Mr Crisp was to give notice before the expiration of 60 days after the date of completion and the matter was to be referred to an expert in accordance with the clause. Mr Boyd says this was not done, and the applicant has lost the opportunity of now making a claim, d) Finally, Mr Boyd referred the Tribunal to many variations made under the contract between 4 Cast and Bdun where Mr Crisp was said to have benefited by as much as $60,000 for additional and better quality finishings. DISCUSSION [11] A document that formed part of the sale contract (Exhibit 1) was a document described as “Inclusions for Display Home”. It had been initialled by Mr Crisp as being part of the contract and that is not disputed by Mr Boyd. [12] The document provided additional items to be added to the base plan. Those items included the ones in dispute, namely: • supply and install one ducted air conditioner; • all window furnishings; • provide standard fly screens to all aluminium windows and aluminium sliding doors; 2 I understand that to be a proprietary name for timber decking. 3 Exhibit 1, Special Condition 3(b)(ii), page 44. -- 3 of 7 -- 4 • granite bench tops to all vanities and kitchen; • Merbau decking to pavilion floor; • Merbau decking to pavilion ceiling. [13] Mr Boyd conceded that these items have not been provided as specified. For instance, variation 8.23 was ‘the installation of two split A/c systems’ at a saving under the contract of $1,400. The other saving was the removal of the requirement of fly screens that led to a saving of $631.40. [14] Mr Boyd agreed that these changes were not of equivalent value to what was provided for in the sale contract. [15] Window furnishings were understood by both parties to refer to blinds or curtains. [16] Mr Boyd said that instead of curtains, the premises had been fitted with cedar shutters at far greater expense than vertical blinds. Variation 8.42 allowed for an additional $4,310 for upgrade window coverings to cedar shutters. Mr Crisp says that a substantial number of windows were not provided with shutters and his claim relates to those windows. He has claimed for roller blinds which Mr Boyd says were more expensive. Mr Boyd states in evidence that vertical blinds had been initially specified. As the building contract was between 4 Cast and Bdun this is not a matter that Mr Crisp would have been aware of, as Mr Boyd conceded. Unfortunately, Mr Boyd did not obtain a quote for the cost of vertical blinds to enable the Tribunal to compare the respective costs. [17] Instead of granite bench tops, variation 8.29 allowed for laminated tops in the vanity, but for stone tops in the kitchen. The variation resulted in an extra expense of $770.88. That was for additional stone, presumably because one variation allowed for the enlargement of the kitchen and presumably the benches. However, the vanities in the bathroom were changed to laminated tops which could not be said to be of equivalent quality. [18] Generally, variations in respect to the kitchen provided for a larger kitchen and upgrade in quality in respect of appliances. [19] Finally, variation 8.30 changed the Merbau decking of the floor and ceiling to concrete and tile to the pavilion floor area and pool surround. In respect of the ceiling, Mr Crisp said that gyprock had been used instead of Merbau planking. [20] Before considering whether these variations amount to equivalent furnishings, it is necessary to refer to the provision relied upon by 4 Cast. [21] The relevant provision provides: ii. The Seller reserves the right without being required to give any notice to the Buyer to : -- 4 of 7 -- 5 A. alter any finish specified in the Schedule of Finishes to another finish of equivalent quality; and B. alter any item to be installed in the property as specified in the Schedule of Finishes to another item of equivalent quality. [22] The schedule of finishes is not identified as such in the documentation forming part of the sale contract, but the term can only refer to the document I referred to earlier as ‘Inclusions for Display Home’ and an additional document described as ‘Schedule of Inclusions’. [23] I am satisfied that the provision of laminated bench tops for the vanities is not of an equivalent quality to granite tops. I note Mr Boyd’s assertion that had the granite been installed at the same time as the kitchen, then there would not have been much difference in price. I find that difficult to accept as there appeared to be no other justification for using a laminated surface for the vanities other than the fact that a laminate top would be cheaper. [24] In respect of the Merbau timber, I do not think that a gyprock ceiling is of equivalent value to a timber plank ceiling. I would allow that part of the claim. However, I do not allow the timber decking for the pavilion floor as I consider the concrete and tiled floor, which was constructed at considerable additional expense, to be of an equivalent quality. [25] The respondent opposed the application on several grounds. Firstly, he argued that there had been no contact with the applicant who appeared to deal mainly with the proprietors of Bdun. Mr Boyd said that he was unaware of the claims made until recently. The applicant conceded that he had mainly dealt with the proprietors of Bdun, but he believed it had been a collaborative effort between 4 Cast and Bdun and the clear inference from his evidence was that he believed that Bdun was acting as agent for 4 Cast. [26] It is largely irrelevant what the applicant or Mr Boyd believed and whether the applicant initially made demands upon Bdun that should have been made upon 4 Cast. The contract is clear in what was to be provided and who the contracting parties were and the respondent was in breach of the sale contract by either not supplying items or not supplying items of an equivalent value. [27] The respondent further relied upon clause 3(b)(iii) which provided: iii. If any disagreement arises in connection with paragraph a.i, paragraph b.i or both:- A. the Buyer may not make any objection, requisition or claim, delay completion of or rescind or terminate this contract; and B. either the Seller or the Buyer may before the expiration of sixty (60) days after the date of completion refer the disagreement to an Architect appointed by the Royal Australian Institute of Architects, New South Wales (called “the Expert”) for determination, acting as an expert and not as an arbitrator and the Expert’s determination will be final and conclusive and -- 5 of 7 -- 6 binding on the parties and the cost of the determination must be borne by the party against whom the Expert’s determination is made or if there is no such party then by the party or parties who the Expert determines is or are to bear the costs. [28] The clause refers to paragraphs (a)(i) and (b)(i). The clauses referred to are irrelevant to clause 3(b)(iii). I suspect the draftsman intended to refer to (b)(ii)A and/or B, however it is not necessary for me to refer to the clauses further. The applicant was entitled to bring his application before the Tribunal. [29] Further, it was argued that essentially the contract had merged in the conveyance, that is, that the applicant did not inspect the property at the time of settlement and did not object to changes and omissions from the original contract. The doctrine of merger is limited to questions of title and not the quality and quantity of the subject matter.4 Clause 10.6 of the sale contract provides: Despite settlement and registration of the transfer, any term of this contract that can take effect after settlement or registration remains in force. The respondent fails on this point. [30] The respondent argues that Mr Crisp has benefited because of the substantial improvements that were made to the house as variations under the contract and that in some way these should be set off against his claim. There is no basis in law for these items to be set off and I suspect that the variations were not made for Mr Crisp’s benefit but rather for the mutual benefit of 4 Cast and Bdun in promoting the display home. [31] The applicant claims the following items as being omitted from the contract: • Ducted air conditioning $12,358.00 • All window furnishings $2,015.00 • All fly screens $770.00 • Granite bench tops to vanities $962.50 • Merbau decking $12,100.00 [32] In respect of the last quote, there is no apportionment of cost between the floor and ceiling. As extra work would be required (as is apparent from the quote) to prepare the tiled floor for decking, I have reduced the quote to $3,000 as an approximate cost of applying the Merbau decking to the ceiling. [33] Therefore, the total claimed is $19,105.50. I will allow interest on that sum at 5% for 2 years. That amounts to $1,910.55. 4 Jollife v Baker (1883) 11 QBD 255; Hissett v Reading Roofing Co (1970) 1 All ER 122. -- 6 of 7 -- 7 [34] I order the respondent pay the applicant the sum of $21,016.05 by 31 March 2013. -- 7 of 7 --