Coro 1 Pty Ltd & Ors v Quality Build Pty Ltd [2014] QCAT 62

CITATION: Coro 1 Pty Ltd & Ors v Quality Build Pty Ltd [2014] QCAT 62 PARTIES: Coro 1 Pty Ltd, Coro 2 Pty Ltd, Coro 3 Pty Ltd and Coro 4 Pty Ltd t/as The Coronation Partnership (Applicant) V Quality Build Pty Ltd (Respondent) APPLICATION NUMBER: MCDO1662-13 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 27 November 2013 HEARD AT: Brisbane DECISION OF: Adjudicator Bertelsen DELIVERED ON: 17 February 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The respondent pay to the applicants the sum of $25,284.60. CATCHWORDS: Contract – builder onsite – engagement of and payment to subcontractors – builder’s accountability for work completed in terms of agreement and subcontractors paid – non payment of subcontractors by builder. APPEARANCES and REPRESENTATION (if any): APPLICANT: Coro 1 Pty Ltd, Coro 2 Pty Ltd, Coro 3 Pty Ltd and Coro 4 Pty Ltd t/as The Coronation Partnership represented by Robert Machin & Coral Wilson, Directors RESPONDENT: Quality Build Pty Ltd represented by John Gray, Director -- 1 of 8 -- 2 REASONS FOR DECISION Application [1] The applicants Coro 1 Pty Ltd, Coro 2 Pty Ltd, Coro 3 Pty Ltd and Coro 4 Pty Ltd trading as the Coronation Partnership (Coro Partnership) claim $25,000 as monies paid to the respondent Quality Build Pty Ltd (Quality Build) the entity it asserts was contracted as a commercial builder in early December 2012 to undertake renovations of 2 small blocks of units at 16- 18 Muraban Street, Mooloolaba and which were never paid to subcontractors and suppliers by Quality Build but in fact retained by Quality Build. The sum claimed includes registration and insurance asserted as refundable. The sum of $25,000 only of $52,629.95 asserted as unpaid to subcontractors and suppliers or otherwise refundable is pursued to enable the claim to remain within the minor civil dispute jurisdiction. Background and evidence [2] Coro Partnership and Quality Build entered into an agreement shortly prior to or early in December 2012. There was no formal contract only Coro Partnership’s confirmation letter of 14 December 2012 which recorded that Quality Build would undertake renovations at $45 per hour (at least initially) using its own tools and paying for its own fuel with accommodation at no cost to be provided to Quality Build (for Mr Gray) in one of the units being renovated. There was to be full disclosure in respect of all rates and times worked by any person on site prior to payment; contractors for plastering, balustrading and demolition were listed. It was agreed that Coro Partnership would pay Quality Build’s workcover at $2,250.00 and Master Builder’s registration and insurance of $1,700.00. The confirmation records that Coro Partnership wanted full disclosure of “everything in relation to building costs incurred at all times” particularly as certain costs fell within repairs and maintenance and others as capital improvements. Under the heading “progress payments” it was clearly stated “we require full disclosure of all expenditure prior to any further payment”. It was asserted by Coro Partnership that it would supply quality materials and products from established sources wherever possible with balance materials to come from Bunnings via Quality Build’s credit card with that company. [3] In the period early December 2012 through 18 April 2013 Quality Build performed renovations initially estimated to take 3 - 4 months. Pro rata refund [4] Mr Gray of Quality Build stated that Quality Build was only ever employed as a Foreman/Project Manager/Supervisor/Labour Hire Company. However that Quality Build was a registered builder was not disputed nor the placing of Quality Build’s container onsite, erection of a construction fence and posting of safety signs. Due to monetary shortfalls on the part of Quality Build apparent in early December 2012 Coro Partnership, upon -- 2 of 8 -- 3 production of an invoice from Quality Build, arranged to pay Quality Build’s master builder’s registration and insurance $1,700.00 and workcover $2,250.00 for the ensuing year to 28 December 2013. Quality Build produced its invoice number 5 dated 15 December 2012 for $3,950.00. It was paid to Quality Build which then rather than paying the Master Builder’s registration and insurance and workcover annual fees proceeded to pay these monthly thus delaying payment over time of a considerable portion of that sum. Mr Machin of Coro Partnership asserted those monies were only ever paid to Quality Build to enable it to start work promptly and were repayable in any event. Mr Gray of Quality Build did not raise any argument disputing or challenging that arrangement. Mr Machin claimed pro rata refund for the period 18 April 2013 through 28 December 2013. [5] Coro Partnership produced an affidavit of Abbey Rachel Benvegnu, bookkeeper and registered BAS agent, sworn 26 November 2013. She was retained by Coro Partnership to check and try to verify a number of Quality Build’s invoices based on financial details supplied by Quality Build. She says at no time during two site meetings at Mooloolaba did Mr Gray indicate that works “were being undertaken by anyone other than the respondent company in this action. If these works were being undertaken by J Gray personally or by some other person or upon some other basis, then this detail would certainly have been given to me by Mr Gray or some explanation given, as there would be important ramifications such as recording and claiming GST and collecting other financial data.” Ms Benvegnu’s statements refer in particular to Quality Build’s invoices 5, 6 and 7 for $3,950.00, $10,000.00 and $30,000.00 respectively. All 3 invoices were paid in full by Coro Partnership. Invoice 6 included electrical works at $7,277.89. Invoice 7 charged for a number of items including “plasterboard” at $15,499.00. Electrical reimbursement [6] Mr Machin asserted that Gilletts Electrical Contractors invoice (Gilletts) for $7,277.89, although included in and paid for as part of invoice 6 was never credited by Quality Build to Gilletts. This is confirmed by Gilletts letter of 15 October 2013 produced to the Tribunal. Subsequently this invoice was paid directly by Coro Partnership to Gilletts as a component of Gilletts later invoice of 7 March 2013. Mr Gray asserted Gilletts to be Coro Partnerships contractor. Mr Machin stated he only ever arranged Gilletts introduction to Mr Gray because it was a local business that could be more readily accessed locally in the future. [7] Apart from asserting general compliance with the Tribunal’s orders of 1 November 2013 which in essence required Mr Gray to provide receipts and invoices for all building materials as well as a reconciliation of building claims, no further evidence was forthcoming from Mr Gray. -- 3 of 8 -- 4 Gyprock plaster claims [8] Mr Machin asserted payment of ATP Plastering Service Pty Ltd’s invoice for $15,500.00 on 3 occasions and seeks reimbursement of two of those payments at $15,499.00 and $15,500.00. [9] Quality Build’s invoice number 7 of 23 January 2013 for $30,075.77 identifies “plasterboard - $15,499.00” as one of several components for payment. This invoice was paid promptly on 24 January 2013. [10] Quality Build’s invoice number 8 of 12 February 2013 for $30,000.00 identifies “plasterer - $15,500.00” as a component of that invoice. This invoice was paid promptly in 3 part payments. [11] Quality Build’s invoice numbers 9 and 10 of 27 February 2013 for $45,479.01 identifies “plasterer (deleted $200 for extra work by painter and clean up after all) - $15,300.00”. These two invoices were paid promptly by the Coro Partnership. [12] The sum of $15,300.00 was paid by Quality Build to the plasterer on 19 March 2013. [13] Mr Gray stated that simply because he wrote the plaster’s cost on invoices that did not mean that he did not require an additional $15,000.00 for plastering work. Mr Gray did not produce any evidence to indicate that some other person or entity may have been paid for plastering. Aluminium balustrading [14] Mr Machin asserted Brockys Fabrication invoice of 18 March 2013 for $4,793.80 was paid as part of Quality Build’s progress claim invoice number 17 for $19,626.80 dated 11 April 2013. The handwritten detail accompanying Quality Build’s invoice includes “Rob Brockhurst handrails - $4,793.80”. The additions within the detail are mathematically correct. It was not disputed that invoice 17 was paid in full immediately. Coro Partnership subsequently paid Brocky Fabrication the same $4,793.80 on 23 April 2013 when it was discovered, according to Mr Machin that Quality Build had not only failed to pay Brockys Fabrication’s invoice but that it had been outstanding for some weeks. [15] Mr Gray suggested that he was told not to pay invoices until the job was finished but this begs the question why was this cost included in Quality Build’s invoice number 17 dated 11 April 2013. Bunnings expenses and recycled bins [16] Mr Machin requested both these claims be withdrawn for the reason that because of Quality Build’s non compliance with the Tribunal’s orders of 1 November 2013 it was impossible to properly or meaningfully traverse these two issues. Mr Gray did not object. [17] The Tribunal’s orders of 1 November 2013 were as follows: -- 4 of 8 -- 5 1. The respondent provide receipts and invoices for all building materials and other items for all building and associated works at 16- Muraban Street, Mooloolaba for the period 1 December 2012 to 18 April 2013, as invoiced to the applicant for building works during this period. In particular, all invoices, receipts and statements from Bunnings hardware. 2. The respondent to also provide a written reconciliation from the respondent of all building claims made to and received from the applicant for the period 1 December 2012 to 18 April 2013. 3. This is to be provided to the Tribunal the business day prior to the scheduled hearing. [18] What Mr Gray provided to Wilson Teis, Chartered Accountants for Coro Partnership on Monday, 25 November 2013 (a few days prior to hearing) were bank statements as well as Bunnings statements, invoice book and some invoices. Wilson Teis provided a statement summarising what had been provided in terms of the Tribunal’s order of 1 November 2013. Wilson Teis was able to confirm that the reconciliation included all monies raised by Quality Build Pty Ltd and all payments received by Quality Build. Production of receipts and invoices as stated in the orders did not eventuate. As far as Bunnings was concerned the “transactions for account” pages 1 – 7 produced to Wilson Teis is simply a chronology of expenditure by reference to coded items. Invoices and receipts were not forthcoming. Nor did Quality Build provide any written reconciliation from it of all building claims made to and received from Coro Partnership. In the absence of not knowing what was being purchased by Quality Build from Bunnings and in the absence of any properly detailed reconciliation of Bunnings purchases it was impossible to take the Bunnings claim any further. [19] The same can be said for the recycled bins claim. All that was produced by Quality Build in terms of Tribunal’s orders of 1 November 2013 were three invoices from The Recycling Centre. In the context of provision of bins for rubbish as well as recycling and the free bin(s) arrangement apparently applicable to recycling all of which was discussed in some detail at hearing it was impossible to take this claim any further. [20] The Tribunal confirms the applicant as having been given leave to withdraw these two claims due to non compliance with the Tribunal’s orders of 1 November 2013 and on the basis the applicant should not be precluded from pursuing these two claims in the future. Witnesses [21] Mr Gray called Mr Prichard, painting contractor, as a witness. In short it seems he considered he was owed money by Coro Partnership. [22] Mr Gray then called his brother Paul Gray, Plumber. He stated that he was owed a sum of money for materials purchased by him before or other -- 5 of 8 -- 6 plumbers during his absence in the USA. He considered he was owed money for materials directly by Coro Partnership. [23] These two witnesses, as it transpired, were irrelevant but were allowed to be called in the interests of fairness to Mr Gray. Generally [24] Cessation of the construction agreement subsisting between the parties occurred on 18 April 2013. According to Mr Machin it was because Mr Gray refused to accept that he had to provide substantiation of expenditures; that people were ringing him direct saying that they had not been paid. It appeared however that works were fairly much complete in any event. Mr Machin stated the applicants did not have builder’s licences; that they always used registered builders; that he went to the site about once a week to keep abreast of progress. [25] The summary of Quality Build invoices to the Coro Partnership (exhibit 3) recording an overpayment of $7,840.99 was not challenged by Mr Gray. It included Coro Partnership’s refusal to pay Quality Build’s final invoice number 18 on 18 April 2013. [26] Mr Gray asserted he had previously handed in receipts to Coro Partnership posing such questions as “What more do you want from me” and “What would you like me to do”. Mr Machin denied receiving any such receipts; that if he had them at hand the present argument may well have been very much diminished. Conclusions [27] Mr Gray failed to comply with the Tribunal’s orders of 1 November 2013. Those orders were obviously designed to give Mr Gray the opportunity to properly account for all monies paid to Quality Build which on the face of it appeared either not properly accounted for or in respect of which there was an absence of information. In fact the only summary/reconciliation of any consequence was the material provided by Wilson Teis Chartered Accountants dated 26 November 2013 on virtually 2 days notice. No cogent rebuttal on the part of Mr Gray to Coro Partnership’s evidence in support of its contentions was forthcoming. Exclamations such as “what more do you want” do not constitute a rebuttal. [28] Coro Partnership contracted with Quality Build, a registered builder (or at least thought to be so), to carry out renovations and improvements. The sums of money paid to Quality Build clearly indicate it to be the builder not just a foreman/project manager/supervisor/labour hire company. Quality Build’s onsite container, erection of a construction fence and posting of safety signs are simple but compelling indicia of its builder’s role. [29] Coro Partnership paid for Quality Build’s work cover $2,250.00 and master builders registration and insurance at $1,700.00 for the year through to 28 December 2013. Mr Gray did not deny payment by Coro -- 6 of 8 -- 7 Partnership to Quality Build. The Tribunal finds that it was never envisaged that Coro Partnership pay for these particularly for any period beyond that which was applicable to renovations at Muraban Street. The sum of $2,633.00 is the portion of prepayment by Coro Partnership that is repayable to it. [30] It is clear from Quality Build’s invoice number 6 that Gilletts invoice formed part of that invoice number 6. The Tribunal accepts Coro Partnership’s evidence that despite being included in Quality Build’s invoice that Quality Build never paid Gilletts and that Coro Partnership was subsequently compelled to pay Gilletts direct. That was an overpayment to Quality Build of $7,277.89. [31] It is clear from Quality Build’s invoices numbers 7, 8, (9 and 10) that plastering was charged for Quality Build on 3 occasions and paid only once. The sums of $15,499.00 and $15,500.00 are repayable by Quality Build to Coro Partnership. [32] It is clear from Quality Build’s invoice number 17 that Brockeys Fabrication invoice to Quality Build formed part of that invoice number 17. Quality Build after being paid in full by Coro Partnership did not pay Brockeys Fabrication. Coro Partnership was compelled at a later date to pay Brockeys Fabrication the same $4,793.80. There was therefore an over payment to Quality Build of $4,793.80 repayable to Coro Partnership. [33] The Bunnings expenses and recycled bins claims were not pursued at hearing for reasons already given. [34] The overall summary of Quality Build’s invoices to Coro Partnership prepared by Wilson Teis Chartered Accountants recording overpayment of $7,840.99 were not challenged even though it included Coro Partnership’s refusal to pay Quality Build’s final invoice. That is to say that Quality Build did not bring any evidence to bear to refute that it had already been overpaid despite non payment of its final invoice presented to Coro Partnership. [35] The claims proved on balance to the Tribunal’s satisfaction are pro rata refund $2,633.00, electrical reimbursement $7,277.89, two gyprock plaster claims $15,499.00 and $15,500.00 respectively and aluminium balustrading at $4,793.80, a total of $45,703.69. [36] Coro Partnership has capped its claim at $25,000.00 and therefore forgoes any claim it may have for any balance in excess of $25,000.00 (except of course the Bunnings expenses and recycled bins claims) which is the monetary limit for claim and interest in the minor civil dispute jurisdiction. [37] The Tribunal allows the filing fee of $284.60. -- 7 of 8 -- 8 Order [38] The respondent pay to the applicants the sum of $25,284.60. -- 8 of 8 --