Baxter v Wright [2012] QCAT 606

CITATION: Baxter v Wright [2012] QCAT 606 PARTIES: R D Baxter v Geoff Wright t/as Wright Tiling APPLICATION NUMBER: BDL364-11 MATTER TYPE: Building matters HEARING DATE: 20 July 2012 HEARD AT: Southport DECISION OF: Christine Trueman, Adjudicator DELIVERED ON: 30 November 2012 DELIVERED AT: Southport ORDERS MADE: [1] THAT the Application is dismissed. CATCHWORDS: Building Dispute – alleged defective tiling works – disputed rectification costs – whether agreement to settle rectification costs by retention monies – whether retention monies correctly applied to prior rectification works Domestic Building Contracts Act 2000 Queensland Building Services Authority Act 1991 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Robert David Baxter RESPONDENT: Mr Geoff Wright REASONS FOR DECISION [1] This is an application for domestic building dispute filed by the builder Mr Baxter relating to rectification of defective works performed by Mr Wright at a residential property located at 58 Bennett Road, The Gap in Brisbane. Mr Baxter signed a domestic building contracti to build the residence for the owners on 14 May 2010; works commenced on 7 June 2010 and were completed on 24 December 2012. Mr Wright performed the works under a contract with the building contractor. -- 1 of 7 -- 2 [2] Mr Baxter seeks orders from the tribunal for compensation for the cost of rectification of defective works carried out by Mr Wright in the sum of $2,023.70. There were three invoices for the work.ii He also claims for compensation to be paid to him for his expenses and time to organise materials, tradesmen and co-ordination of the rectification works in the sum of $495.00.iii The total claim is for the sum of $2,518.70. [3] This tribunal has the jurisdiction to hear and determine a building dispute by virtue of the Queensland Building Services Authority Act 1991.iv By definition a “building dispute” means a domestic building dispute and “building contractor” means a person who carries on a business that consists of or includes carrying out building work, and includes a subcontractor who carries out building work for a building contractor.v [4] This case is a domestic building dispute arising between 2 or more building contractors relating to the performance of domestic work under a contract.vi The works are domestic building works which is defined as work associated with the erection, construction, removal or resiting of a detached dwelling; and work associated with the renovation, alteration, extension, improvement or repair of a home.vii [5] In this case the domestic building dispute arises between Mr Baxter (a builder) and Mr Wright (a tiling subcontractor) and alleged defects of tiling works performed by Mr Wright at a residence being built by Mr Baxter pursuant to a domestic building contract. [6] Mr Wright states that he should not be liable for the costs of the rectifications works as he had already agreed and settled the issue of rectification costs on 1 February 2011. He alleges that an amount for rectification costs were agreed, deducted from the payment owed to him and that these further rectification costs are a second attempt by the builder to pursue him for the same issues. Mr Wright claims that he settled matters with Mr Baxter and that he was no longer liable for any of the tiling areas in the property as other tiling contractors had worked onsite after him. He said that the further works by other tilers had effectively negated any liability for any tiling works falling back on to him. Mr Wright claims that the further tiling problems and rectification works should not be his responsibility. [7] The tiling works were performed by Mr Wright. The total cost was $6,568.65.viii Mr Wright states that a dispute arose shortly after the tiling works were completed and rectification works were required. Mr Wright stated that he went back to the property and tried to attempt to rectify the issues raised by Mr Baxter. He said that he partly rectified some of the issues that included refitting tiles to the external corner of the bathroom between the door and shower. He said that after a heated discussion he did not wish to remain on site, he walked off the job and told Mr Baxter to find another tiler to rectify the tiling issues. It is not disputed that Mr Baxter engaged tilers from the Gold Coast to rectify the tiling works. That -- 2 of 7 -- 3 evidence was contained in a letter sent by Mr Baxter to Mr Wright detailing the rectification works and costs.ix [8] Mr Wright stated that the amount sought in this claim was for further rectification costs that did not form part of the first dispute relating to rectification works. Mr Baxter stated that the defects subject to the claim were not evidenced at the time when the other defective works were identified and rectified. Mr Baxter said that when the owners moved in on Christmas Eve they noticed some things that they thought were defective and gave a list to Mr Baxter. Mr Baxter states that he originally disputed some of the defects with the owners as trivial and minor. Mr Baxter stated that this claim related to those defects raised by the owners and not originally noticed by him and those items that could not be agreed. [9] Mr Wright stated that the area subject to this dispute was in the ensuite and not the area of the second bathroom in the previous rectification works. Mr Wright states that the agreement reached between the parties on 1 February 2011 distinguished each party’s entitlement to claim against the other and that included further payment to Mr Wright and claims for defects by Mr Baxter. [10] The agreement that was reached between the parties was contained in an attachment to the letter sent by Mr Baxter to Mr Wright on 1 February 2012. The agreement sets out the cost of the works and rectification costs, it stated: 24m2 Floor tiling and bedding $2,040.00 50m2 Wall tiling $3,250.00 15 L/M skirting $ 405.00 (silicone sealing(replaced and deducted) $5,695.00 Plus GST 569.50 $6,264.50 Rectification:- 2 men 2 days (32 hours@$60/hr +GST) $1,920.00 Liquidated Damages (2 weeks2$550/wk) $1,100.00 Repairs to Plasterboard $ 180.00 Repairs to Waterproofing $ 126.00 Supply of additional tiles $ 113.00 $3,439.00 Builders margin to organise normally 15% no charge Plus GST $ 343.90 TOTAL $3,782.90 Total to be paid $2,481.60 [11] Mr Wright said he accepted the payment of $2,481.60 based on the fact he did not want to have to go back to the property. He said he felt frustrated as he had fixed the rectification work but it was not to the satisfaction of the owners. He said the owners were “extremely difficult, had lived next door to the building works while the job was being done, came on site daily and -- 3 of 7 -- 4 were generally demanding and difficult, often directed the tiler what to do, where to lay tiles and how to lay them”. Mr Wright said that he felt he had done the rectification works to a suitable standard, had replaced the tiles that were identified as needing to be relaced and then the owners said to him that they wanted other tiles pulled up and replaced. Mr Wright said he felt the owners were being difficult and no matter what he did they would not be satisfied. He said there were some minor issues with the grout. He said as soon as he fixed one problem the owners found something else needing to be done. Mr Wright said he agreed to leave the site and allow Mr Baxter to get other tilers to finish off the works and to reduce the payment to him accordingly. [12] Mr Wright said that although he reluctantly agreed to accept the final payment, he disputed some of the items. As an example he said that he was charged liquidated damages due to the extra time it took to rectify the tiling works and yet he disputed the delay was caused by him. He said that in fact he was delayed in starting his job by some 2 weeks because other “tradies” had not finished their work. He said as he was late starting his tiling job that he alone did not cause delays in the completion of the house. He said that there was no evidence to prove that the builder actually had to pay liquidated damages to the owners for being late and for any delays. He further stated that the charges for the labourers to undertake the works was excessive, was likely to have been done on a “do and charge” basis and so therefore expensive. He also stated that there was no proof or invoice for the rectification cost of the labour component of two men and the cost of $1,920.00 and he challenged the amount that Mr Baxter had actually paid. [13] Mr Wright said he met with Mr Baxter to discuss the payment and rectification works and that he was presented with the letter of 1 February 2011 with an attached summary. He said that there was a part of the letter where the parties were to sign as agreement reached and payment received. Mr Wright said he was not given any invoices to prove the amounts claimed, he just took the cheque and “walked away”. Mr Wright stated that he already felt ripped off by Mr Baxter but agreed to the much lesser payment just to have it “all go away”. [14] The agreement signed by the parties stated: “I, Geoff Wright of Wright Tiling accept payment of $2,481.60 as payment in full for tiling works carried out at 58 Bennett Road, The Gap…….No further payment claim for tiling works will be the responsibility of RD Baxter. Yours faithfully….R.D. Baxter.” [15] The agreement did not particularly exclude the liability of Mr Wright and any further tiling rectifications if necessary. Findings -- 4 of 7 -- 5 [16] The evidence was clear and unambiguous that there were defective tiling works. The BSA had conducted an inspection of the property to investigate various complaints made by the owners. The owners claim that they became aware of the defects on 24/12/2010. The parts of the BSA report and photos of the ensuite that were relevant to the claim were provided.x The report identified “inadequate grading of tiles to the floor water troughs in the ensuite bathroom, causing undrained ponding water remaining on the floor tiling in the ensuite shower cubicle… creating slippery conditions…. Described as a health and safety issue." [17] I find from the evidence that there were other rectification works that were required to be undertaken. [18] At the conclusion of the hearing it was evident that Mr Baxter should have provided to the tribunal the evidence to support the monies he retained from paying to Mr Wright for the initial rectification works and as such the decision was reserved and leave was granted for him to file further evidence. The order stated that Mr Baxter must file on or before 24 August 2012 a copy of the evidence of the rectification works as outlined in the offer to settle letter dated 1 February 2011 in the sum of $3,782.90. Mr Baxter elected not to file any further evidence in relation to his application. [19] I could therefore not determine what actual tiling works had been completed by the Gold Coast tilers during the first rectification works and if the actual labour cost had been the sum of $1,920.00. I could not make any findings that Mr Baxter was required to pay liquidated damages to the owners, being a further cost he passed on to Mr Wright in the sum of $1,100.00. I find that if those costs cannot be substantiated then it would be unfair to order that Mr Wright pay further costs for rectification works when he has already paid them. Conclusion [20] Although this is a claim for the recovery of costs for rectifications works relating to a BSA report and defect notices, it is necessary to revisit the original rectification costs already conceded by Mr Wright, the facts and circumstances surrounding that agreement when considering if the further claim for rectification costs are fair and reasonable in all the circumstances. I have done that and concluded that the funds initially retained by Mr Baxter in the sum of $3439.00 were not substantiated. I find that the rectification works were performed as clearly Mr Wright conceded he left the site and there were some works that required completion. As to the extent of those works I am unable to assess what was required to finish the initial defective works and what would be a reasonable cost for such completion. [21] I find that the agreement between the parties reduced to writing and dated 1 February 2011 had the intention to finalise all the disputed matters between the parties. I find that it would be reasonable for Mr Wright to assume that the agreement to accept a greatly reduced payment for the -- 5 of 7 -- 6 tiling works would end his liability in relation to any defective works either identified or otherwise. I find that the payment made by Mr Baxter to Mr Wright was intended to be a final payment for all the tiling works. In light of the fact that the ensuite defects as identified by the owners had already been brought to the attention of Mr Baxter as the BSA report and Mr Baxter’s evidence was that the defect list was prepared by the owners on Christmas Eve in 2010. I am therefore satisfied that Mr Baxter was aware and knew of the other defects and that if he contemplated any further rectification costs that he would have withheld any final payment to Mr Wright. The fact that the final payment was made, I find, suggests, that Mr Baxter also considered the matter as final and the payment was in full and final satisfaction of all matters in dispute between the parties. The involvement of other tiling contractors on site, payment of prior rectification work and a dispute as to the actual cost of the works that were paid only adds confusion to the issues in dispute in this claim and as to liability. I find there is merit in the proposition that without the evidence of the actual work that the Gold Coast tilers did for the rectification works it may be that they worked on the shower floors in the ensuite and are therefore liable for defects. [22] On the basis that Mr Baxter has been unable to substantiate his claim, in that he could not provide any explanation or evidence that the initial retention monies of $3,782.90 were not sufficient funds to cover all the rectification works performed, that no invoices were provided for the alleged rectification works including the repairs to plasterboard and waterproofing, the labour costs of 2 men and the liquidated damages, the finding is that those funds were withheld by Mr Baxter without justification. [23] I find that there are two main reasons that the claim must fail. The first reason is that the retention monies of $3,782.90 set off against any payment to Mr Wright was done so without sufficient or any evidence, proof or explanation that the costs were justified, fair and reasonable. In that case Mr Wright has already paid more than the current amount claimed for rectification costs for further tiling works. The second reason, that the claim would fail, even if I found that the rectification costs already paid were justified is based on the evidence that would support a finding that the agreement on 1 February 2011 was a settlement and a conclusion of all matters in dispute between the parties. I find that the payment eventually made to Mr Wright was in full and final satisfaction to resolve the dispute between parties in relation to all matters and to finally conclude all rights, obligations and liabilities between them. I find that the final payment by Mr Baxter to Mr Wright was confirmation that there was an expectation and agreement that there would be no further dispute between the parties. Although the written agreement did not particularise the ceasing of Mr Wright's obligations to further defects, I find that the parties had agreed to such a condition, it was an oral term that formed part of their agreement to the settlement and that it was the intention of the parties that the agreement and payment of 1 February 2011 would finalise all matters between them. -- 6 of 7 -- 7 [24] As Mr Baxter’s claim for the reimbursement of rectification costs in the sum of $2,023.70 has failed so, therefore, must his claim for his costs and expenses in the sum of $495.00. [25] After considering all of the evidence of the parties, and having carefully considered the content of all the exhibits provided to the tribunal and for the reasons set out above I make the following decision and order as follows: ORDERS [1] THAT the Application is dismissed. i Domestic Building Contracts Act 2000, section 7. ii Prompt Tiles Invoice dated 13/11/11 for $1,611.50, Superior Glass Tax Invoice dated 28/11/2011 for $297.00 and Tiles World Tax Invoice dated 27/10/2011 for $115.20 annexed to the Alleged Defective Work schedule. iii R D Baxter Master Builder Tax Invoice dated 9/12/2011. iv Section 77. v By definition in Schedule 2 and section 4 of the Queensland Building Services Authority Act 1991. vi By definition in Schedule 2 of the Queensland Building Services Authority Act 1991. vii Domestic Building Contracts Act 2000, section 8(3). viii Document 3 of Respondent's submissions. ix Document 1 of Respondent's submissions. x BSA Report, photos and Defect notices annexed to the Alleged Defective Work schedule. -- 7 of 7 --