Claudia Tiller Holdings Pty Ltd v Poulton [2012] QCAT 460

CITATION: Claudia Tiller Holdings Pty Ltd v Poulton [2012] QCAT 460 PARTIES: Claudia Tiller Holdings Pty Ltd trading as Luxury Gold Coast Pools v Ivana Poulton APPLICATION NUMBER: MCDO262-12 MATTER TYPE: Other minor civil disputes matters HEARING DATE: 14 August 2012 HEARD AT: Southport DECISION OF: Christine Trueman, Adjudicator DELIVERED ON: 11 September 2012 DELIVERED AT: Southport ORDERS MADE: 1. That the Respondent pay to the Applicant the sum of $7,202.00 within 30 days. CATCHWORDS: Contract for the construction of swimming pool – withdrawal from contract during “cooling-off” period – statutory rights to terminate the contract – requirements and consequences for withdrawal and liability for contractor – expenses reasonably incurred Acts Interpretation Act 1954 Domestic Building Contracts Act 2000 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Lupton Scott on behalf of Luxury Gold Coast Pools RESPONDENT: Ms Ivana Poulton REASONS FOR DECISION [1] This is a case involving a dispute about the construction of a swimming pool. Gold Coast Luxury Pools was contracted to construct a swimming pool at a residential property located at 5 Bexley Place, Helensvale on the -- 1 of 6 -- 2 Gold Coast. The contract price was $24,160.00 and dated 5 August 2011.i The property was owned by Ms Poulton‟s parents and Ms Poulton entered into and signed the contract with Gold Coast Luxury Pools on their behalf. [2] Ms Poulton terminated the contract with Mr Lupton in writing by letter dated 11 August 2011ii where she said she delivered the letter to the premises of Gold Coast Luxury Pools. The date the letter was served on Luxury Gold Coast Pools is disputed. [3] Mr Lupton claims that Ms Poulton owes Luxury Gold Coast Pools the sum of $7,607.00 plus filing fee and interest. He states that this amount is for cancellation costs of the contract and includes amounts for outstanding accounts, consultancy fees, engineering drawings, administration fees and loss of profit. Mr Scott provided an invoiceiii and evidence of some of the expenses incurred in preparing for the construction of the pool. Was the withdrawal from the contract affected during the “cooling off period”? [4] The first issue to be determined in this case is whether Ms Poulton terminated the contract within the “cooling off period”. The General Conditions of the Contractiv state that the owner may withdraw from the contract during the cooling off period.v Subject to clause 5.2 the Owner may withdraw from the Contract within five (5) Business Days after receiving both a signed copy of the contract and a copy of the Contract Information Statement approved by the Authority. It is not disputed that the date of signing the contract was 5 August 2011. [5] Ms Poulton claims she withdrew from the Contract within the “cooling off period” and Mr Scott alleges the withdrawal was after the “cooling off period” had lapsed. [6] Ms Poulton states that she wrote and delivered the letter terminating the contract during the “cooling off period” on 11 August 2011. She said she got “Bev” from Luxury Gold Coast Pools to sign a copy of the letter as having received the letter. The letter was not dated but signed and returned to Ms Poulton. Mr Lupton states that “Bev” dated the letter after Ms Poulton had left and only dated the copy she retained as being received on 12 August 2011. Mr Scott provided an affidavit sworn by Bev Graham on 18 May 2012vi deposing that Ms Poulton hand delivered the termination letter to her at 11.20am on 12 August 2012. [7] Mr Scott states that in his business he does not work Monday to Friday and that therefore business days for him include Saturday and Sunday. He stated that the calculation of days for the “cooling off period‟ should “include all days of the week being business days” as they were “for his business”. -- 2 of 6 -- 3 [8] It is clear that a business day means a day that is not a Saturday or Sunday or a public holiday, special holiday or bank holiday in the place in which any relevant act is to be or may be done.vii [9] Ms Poulton signed the contract on Friday 5 August 2011. She stated that as she withdrew from the contract during the “cooling off period” she is not required to pay any funds at all to Mr Scott. [10] It must be determined if two particular criteria were met before turning to the claim by Mr Scott. They are: a) Firstly, if Ms Poulton withdrew from the contract during the “cooling off period;” and b) Secondly, if the notice to withdraw complied with the Domestic Building Contracts Act 2000. These must be considered and determined and if found that both these criteria were satisfied, then Mr Scott‟s claim will fail. [11] The actual definition of the time frame for the “cooling off” period is relevant. The parties disagreed as to when the “cooling off period” expired. Mr Scott stated that the date when the cooling off period ended was Thursday 11 August 2011. Ms Poulton agreed with Mr Scott on this point. Ms Poulton said she served the withdrawal notice on the 11 August 20011. Mr Scott disagreed and said the withdrawal notice was served on his office of Luxury Gold Coast Pools on Friday 12 August 2011. He relied upon the evidence of Bev Graham in that regard. [12] The issue to consider is the actual time from when the 5 business days begin and end and that time frame that is referable to the determination of the actual “cooling off period”. [13] The period is calculated from when the contract was signed and the calculation of 5 business days from that date is calculated therefore from 6 August 2011. The period beginning on a given day, act or event that is provided or allowed for a purpose by an Act and the period is to be calculated by excluding the day, or the day of the act or event.viii That is the date of the signing of the contract is excluded from the calculation period. [14] It is the case that if the period is expressed to be a specified number of clear days or at least a specified number of days then it is to exclude the day on which the purpose is to be fulfilled.ix In this case the period is not expressed as clear days. In all other cases the period is calculated by including the day on which the purpose is to be fulfilled.x The period of cooling off is then calculated at 5 days from the day after the contract was signed, being the Monday 8 August 2011 and therefore the “cooling off period” ceases on Friday the 12 August 2011. -- 3 of 6 -- 4 [15] I find that the letter giving notice to terminate the contract was therefore, served during the relevant “cooling off period”. Did the notice to withdraw from the contract comply with the Domestic Building Contracts Act 2000? [16] The second criteria provide that the obligation on the owner is that the owner must withdraw from the contract by giving a written notice to the contractor.xi The general conditions state that the written notice must state that the owner withdraws from the contract under section 72 of the Domestic Building Contracts Act 2000. [17] Ms Poulton must provide in her written notice to withdraw from a regulated contract under section 72 stating that she withdraws from the contractxii, leave a withdrawal notice at the address shown as the building contractor's address in the contractxiii and the withdrawal notice must state the section of the Act under which the withdrawal is made.xiv [18] The withdrawal notice prepared, signed and served by Ms Poulton on Luxury Gold Coast Pools states that the reason for the withdrawal from the contract is due to “increased site costs since the contract has been signed”. The withdrawal notice does not refer to the reason of withdrawal being for reasons under the cooling off period nor any reference to Part 6 section 72 of the Domestic Building Contracts Act 2000. [19] The withdrawal from the contract does not give notice under the relevant section of the Domestic Building Contracts Act 2000. Ms Poulton has not given the appropriate notice to withdraw from the contract during the cooling off period. As such I find that the contact remains in force. [20] Ms Poulton claims in the notice to withdraw that she is terminating the contract due to increased costs. An owner is entitled to terminate a contract as a statutory right if the contract price increases by 15% or more after the contract is entered into because of the operation of a cost escalation.xv [21] Mr Scott said that he advised Ms Poulton that there would be an increase in the cost of the pool works but only gave an estimate, the amount was not reduced to writing and it was estimated to be due to additional costs of preparing the site due to it being highly reactive and classified as an “H” site. Mr Scott stated that the engineer had advised him orally of this information after soil test reports were to hand. Mr Scott stated that he never actually provided a written quote for the extra costs as after the phone call with Ms Poulton “all contact ceased and there were no further discussions” and that the contract was terminated by Ms Poulton before he could speak to her about the matter or prepare the quote. [22] Mr Scott states that the contract has not been lawfully terminated and the owner‟s statutory rights to terminate the contract, which is suggested in Ms -- 4 of 6 -- 5 Poulton‟s notice to terminate, is referable to a right under section 90 of the Domestic Building Contracts Act 2000. [23] Ms Poulton states in her withdrawal notice that the reason she is withdrawing from the contact is due to the increased site costs. She states that “since the contract has been signed she had been advised that there were going to be possible price increases over and above the contact price.” The parties both gave oral evidence on this point. It was uncontested that Mr Scott did tell Ms Poulton that there would be an increase in site costs due to the fact that after the contract had been signed he had been advised, by the engineer, that a soil test had revealed that the location for the pool was rated a “H” site and highly reactive. It is agreed this conversation occurred and Ms Poulton stated that after this discussion with Mr Scott she “became nervous” and worried as she had a “strict budget” for the pool works and could not afford any additional costs. She said she got advice from the BSA and a solicitor who advised her to terminate the contract during the “cooling off period”. However I note that her notice to withdraw does not mention the reason for withdrawing from the contract as she is entitled to during the “cooling off period” but relies on the fact of increased site costs. [24] Mr Scott states that the increased site costs were permitted in the contract. I agree with Mr Scott on this point. The contract states in its “General Conditions” that if the contract price increases by 15% or more after the contract is entered into the owner may terminate. In this case though the estimated additional costs of $1,500.00 is approximately 6.5%. As the additional increase in costs is less than the specified percentage in section 90 of the Domestic Building Contracts Act 2000 the owner does not have a statutory right to terminate under this provision. [25] If the notice of withdrawal is defective in that it does not comply with the Domestic Building Contracts Act 2000 then Mr Scott has an entitlement to make a claim for costs and expenses. [26] If the contract has been unlawfully ended by Ms Poulton then Mr Scott may be entitled to be paid a reasonable amount for the value of the works carried out under the contract to the date the contract is ended.xvi He will be not entitled to receive an amount that is more than the amount the building contractor would have been entitled to receive under the contract.xvii [27] Mr Scott has claimed for the sum of $7,607.00 which are for the following: a) Consultancy fee including 3 site visits & marking out poo $1450.00 b) Engineering Drawings 330.00 c) Administration fees 495.00 d) Loss of profit (20% builders margin) 4832.00 e) Legal expenses 500.00 TOTAL $7607.00 -- 5 of 6 -- 6 Findings [28] The claim for legal expenses and costs are refused in this claim. If Mr Scott obtained legal advice or assistance in preparing his claim then that is a matter for him and such costs must be borne by him. [29] I find that Ms Poulton did not affect service of a notice of withdrawal during the “cooling off period” on Mr Scott and therefore the contract remained in operation. The claims for the expenses incurred by Mr Scott in relation to the pool works appear to be therefore reasonable in all the circumstances. [30] I find that Ms Poulton then has unlawfully terminated the contract for the pool works and that Mr Scott is therefore entitled to be paid for the profit he would have made if the contract had proceeded. I am satisfied that the calculation of lost profit at the builders margin of 20% is a fair calculation in all the circumstances. [31] I find that Ms Poulton must pay costs of fees, expenses and loss of profit in the sum of $7,107.00 accordingly. I will not allow the claim for interest but will permit the claim for the filing fee of $95.00. ORDERS [1] That the Respondent pay to the Applicant the sum of $7,202.00 within 30 days. i Exhibit 1. ii Attachment „b‟. iii Attachment „a‟. iv Exhibit 2. v Masters Builders Pool Building Contract General Conditions 5.1. vi Exhibit 4. vii Acts Interpretation Act 1954, section 36. viii Acts Interpretation Act 1954, section 38 (1). ix Acts Interpretation Act 1954, section 38(1)(a). x Acts Interpretation Act 1954, section 38(1)(b). xi Masters Builders Pool Building Contract General Conditions 5.2. xii Domestic Buildings Contract Act 2000, section 75(1)(a). xiii Domestic Buildings Contract Act 2000, section 75(1)(b). xiv Domestic Buildings Contract Act 2000, section 75(2)(b. xv Domestic Buildings Contract Act 2000, section 90(1)(a). xvi Masters Builders Pool Building Contract General Conditions 21.3. xvii Domestic Buildings Contract Act 2000, section 77(3). -- 6 of 6 --