Everett Constructions Pty Ltd v Martin and Anor [2012] QCAT 103

CITATION: Everett Constructions Pty Ltd v Martin and Anor [2012] QCAT 103 PARTIES: Everett Constructions Pty Ltd v Mr Llewellyn Ray Martin Ms Carmen Daniela Grigore APPLICATION NUMBER: BDL318-10 MATTER TYPE: Building matters HEARING DATE: 21 April and 19 May 2011 HEARD AT: Townsville DECISION OF: Keta Roseby, Member DELIVERED ON: 15 March 2012 DELIVERED AT: Townsville ORDERS MADE: 1. The defects listed in paragraph [48] to be rectified by Everett Constructions within four weeks; 2. Mr Martin and Ms Grigore to notify Everett Constructions, in writing and within 14 days, as to whether they elect option (a), (b) or (c) from the options listed in paragraph [58] and Everett Constructions must proceed accordingly. If option (a) or (b) is selected, Everett Constructions must complete the work within four weeks of notification; 3. Mr Martin and Ms Grigore to notify Everett Constructions, in writing and within 14 days, if they wish to have the mirrors secured with the bottom brackets provided and Everett Constructions must proceed accordingly and complete the work within four weeks of notification; 4. Mr Martin and Ms Grigore to pay to Everett Constructions the amount of $2,241.97, in respect of interest, within four weeks. -- 1 of 20 -- 2 CATCHWORDS: Residential building contract – where home owner alleged defects including dissatisfaction with interior paint colour – determinations as to contractual requirements including paint brand and paint colour – construction industry custom to tint paints – claim for interest under Master Builders Residential Building Contract Queensland Civil and Administrative Tribunal Act 2009, ss 100, 102 Queensland Building Services Authority Act 1991, s 77 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Steven Everett and Mr Glen Everett RESPONDENT: Mr Llewellyn Martin and Ms Carmen Grigore REASONS FOR DECISION [1] Mr Martin and Ms Grigore had entered into a residential building contract with Everett Constructions for the construction of their new home. Issues arose when Mr Martin and Ms Grigore were not satisfied with the interior paint colour of their new home and alleged that Everett Constructions had not used the correct paint as required by the contract. [2] From there, a number of further issues arose, resulting in Everett Constructions filing an Application in the Tribunal seeking payment of the balance $50,364.35, representing the payment due to the Practical Completion Stage of the contract, together with interest in accordance with the terms of the contract. [3] Mr Martin and Ms Grigore filed a Counter-Application in respect of their dissatisfaction with the interior paint colour together with a number of other, though more minor, issues and alleged defects. [4] The compulsory conference reduced the issues between the parties to1: a) the outcome of a report to be prepared by the Queensland Building Services Authority (QBSA) following an inspection of the property in respect of alleged defects; b) Mr Martin‟s and Ms Grigore‟s dissatisfaction with the interior paint colour (which was included as an alleged defect to be considered by the QBSA in any event); and c) Everett Constructions‟ claim for interest in accordance with the terms of the contract. 1 According to the written agreement signed by the parties. See also paragraph [77] herein. -- 2 of 20 -- 3 Alleged Defects [5] By order of this Tribunal, the QBSA inspected the property via two of its representatives together with Mr Steven Everett of Everett Constructions and Mr Martin and Ms Grigore. The QBSA subsequently prepared a report2 as to its findings in respect of the list of defects provided by Mr Martin and Ms Grigore (the QBSA Report). [6] Item 1 of the QBSA Report referred to the issue of the interior paint colour. Item 1 – All internal painted surfaces – paint brand and paint colour different than selected and signed on the contract and on the sample [7] The QBSA found that this “Item has been investigated and identified as being outside the ambit of building work.” This is by far the biggest issue between the parties for determination by the Tribunal. [8] There is a dispute because, in the words of Mr Martin and Ms Grigore, the colour on the internal walls, doors, skirting, architraves and window reveals is not Dulux White on White PCWF8 in accordance with Drawing No 09021- A01.3 More particularly, Mr Martin and Ms Grigore say that Everett Constructions were required to use Dulux paint tinted to the colour Dulux White on White, as opposed to the Solver paint tinted to the colour Dulux White on White as used by Everett Constructions and that, had the Dulux paint brand been used then, the interior of their property would have been painted in the correct colour. To be clear, there is no issue with the quality or characteristics of the paint, only the colour.4 [9] The questions to be answered by the Tribunal are therefore: a) What paint brand and paint colour does the contract require Everett Constructions use in terms of the interior of the property? b) Did Everett Constructions paint the interior of the property with that paint brand and/or paint colour? [10] Mr Martin and Ms Grigore state that: “The reason behind our interior colour selection was simple: white was meant to bring light into our otherwise dark house and to create a clean classical backdrop which would not limit our and our future buyer’s choice for furniture and decorations. The interior design consultant contracted by the builder at the time, Ms Kya Faust, suggested Dulux White on White.”5 At the hearing, Mr Martin said that, in a meeting on 25 March 2010, he and Ms Grigore signed off on all selections made. [11] Mr Martin said that he and Ms Grigore would then visit site on occasion to inspect progress of the construction of their new home. Once the property was at the enclosed stage, Mr Martin said that he would obtain the keys from Mr Steven Everett so that he and Ms Grigore could have a look and that this continued until July 2010 when Mr Martin says that Mr Everett of 2 Dated 25 January 2011. 3 Response and Counter-Application filed 3 November 2010. 4 Response to a direct question from Member Roseby to Mr Martin and Ms Grigore at the hearing. 5 Exhibit 4, p1. -- 3 of 20 -- 4 Everett Constructions would no longer give them the keys to inspect the property and, as a result, they were no longer able to check on progress. [12] Mr Martin continued by saying that, in a meeting on 26 July 2010, with Mr Steven Everett at the property, they were able to inspect the property but that the internal painting had already been completed and that they discovered that the colour was wrong. Mr Martin said that the colour difference was “striking”, that it appeared blue and blue/grey and that you would “have to be colour blind to not see blue”. [13] In response, Mr Steven Everett (Mr Everett) gave evidence that it was industry standard to use another brand of paint and tint accordingly and he maintained that the colour used was Dulux White on White. Mr Everett continued in evidence that Everett Constructions gave no indication that it used Dulux paints and that it was not a requirement of the contract.6 [14] In terms of the contractual documents, the parties signed the following: a) Residential Building Contract dated 30 December 20097 together with the General Conditions of Contract8; b) Specification (undated)9; c) Contract Drawings dated 30 December 200910; d) Contract Drawings dated 25 March 2010.11 [15] Mr Everett said that Ms Faust was a sub-contractor to Everett Constructions and that she operated under the business name “Vanilla Design” at the time.12 He said that, once clients had chosen colours with her and checked them, the colour selections were then given to him to prepare final sign-off drawings. [16] The „Selections‟ document prepared by Ms Faust13 is very clear. It specifically makes reference to paint brand and states “Colourmatch to Resene Paints”14. On the same page, reference is then made to paint colour and the Dulux White on White is listed. [17] Mr Everett went on to say that, although the ceiling in the theatre room did not have to be painted in Dulux brand Dulux White on White, as per the specifications, Everett Constructions took the opportunity to paint it in Dulux 6 Further, p4 of the specification (Annexure C to Exhibit 15), specifically states, in relation to internal painting, that it will be carried out using paint “from the builder‟s standard range”. 7 Annexure A to Exhibit 15. 8 Annexure B to Exhibit 15. 9 Annexure C to Exhibit 15. 10 Annexure D to Exhibit 15. 11 Annexure E to Exhibit 15. 12 The Tribunal queried Ms Faust‟s availability to give evidence at the hearing but was advised that, due to health issues, neither party were going to call Ms Faust. 13 Annexure G to Exhibit 15, p7. 14 On an internet search for Resene Paints, the following is found: “Resene are manufacturers of colours, coatings, wood stains and paints for exterior and interior house painting plus commercial, industrial and marine painting applications”. -- 4 of 20 -- 5 White on White using Dulux paints to show that it matched perfectly with the walls painted in Dulux White on White using Solver paints.15 [18] Mr Everett said that he was sympathetic to the wrong colour choice made by Mr Martin and Ms Grigore and the reason why he stopped construction for a week (to allow time for a decision to be made as to what they wanted to do) and offered to repaint the house at a discounted rate as a solution to the problem. [19] Mr Everett also advised that there was no “conspiracy” in not allowing access to the property by simply giving them the keys as they had previously done. Mr Everett said that, at the outset, he had been giving Mr Martin and Ms Grigore the keys and allowing them to access the property as a favour, however, strictly speaking, Everett Constructions was required to have a health and safety representative on site with them for any inspection and Everett Constructions had received a warning for not complying with this and that was the reason why they could no longer simply give them the keys. Mr Everett said that Everett Constructions never denied Mr Martin and Ms Grigore any visits except if he was unavailable in which case they would make another time. [20] Everett Constructions called Ms Anne Sanker, an operator of a business known as “The Coloured House”. Ms Sanker said that she had operated that business for 11 years and had a total of 25 years in the industry. Importantly, Ms Sanker said that she had previously looked at the Dulux White on White colour and that she steers away from it as it “looks a bit blue”. [21] Everett Constructions then called Mr Martin Price to give evidence. Mr Price told the Tribunal that he was the Townsville representative for the Wattyl Group which sold Solver and Wattyl paints to the residential market and that he had been a representative for eight years and a trade painter for 15 years prior to that. [22] Mr Price said that it “happens heaps” that a client picks a colour and it‟s not what they wanted whether it be using the same brand or different brand paint. He agreed that it was standard practice to tint paint using a different brand and that “you won’t pick the difference”. Mr Price admitted that there will always be the possibility of human error in the tinting process or that some tinting may vary slightly from batch to batch. He went on to say that, in the tinting process, if it was not possible to get an exact colour match, then a “control flag” will show on the computer screen so you know. [23] Mr Price continued in evidence to say that he had attended a meeting at the property and painted a colour spot on the wall in the study (the room closest to the front door) using a Dulux brand Dulux White on White sample pot16 15 The painter who painted the theatre ceiling also stated in his letter that he was “unable to pick a difference in colour between the walls painted by the previous painter and the ceiling, which I painted”: Annexure A3 to Exhibit 15. In response to this Mr Martin said that the ceiling is a different colour to the walls in the room and that the ceiling colour is the colour he selected. 16 Mr Steven Everett confirmed that he had purchased the pre-prepared Dulux White on White sample pot from the Dulux Trade Centre prior to the meeting. -- 5 of 20 -- 6 and that, in his opinion, it was exactly the same as the existing paint on the wall painted using the Solver brand.17 [24] In cross examination, Mr Price admitted that lighting “makes a massive difference” to the colour and when reference was made to the most appropriate environment within which to assess and check the paint colour, he didn‟t think that there was a better environment, other than the house itself, within which to test the colour. [25] In response to questioning in cross-examination, Mr Price said that it was a “ridiculous claim to say that if it was not a Dulux brand then it was not a Dulux colour – everyone does it and match perfectly” and in specific response to questions about Dulux promotional material referring to only using Dulux brand paint for tinting to achieve the exact colour selected, Mr Price responded that it was a “marketing thing and a butt covering exercise”. [26] Mr Price was asked by Mr Martin whether he thought “the average punter on the street was aware that it is only a colour and not a brand?” Mr Price said that whilst he could see why he was disgruntled, that was the practise. [27] Everett Constructions then called Mr Mark Krunes as a witness. Mr Krunes told the Tribunal that he was the Townsville representative for Dulux paints and had been in that position for two years. [28] Mr Krunes confirmed that it was industry practice to colour match between the paint brands. [29] In respect of the sample patch painted on the study wall using Dulux brand Dulux White on White, Mr Krunes said that he arrived at the property after the sample had been painted on the wall and that, at first, he couldn‟t see where the sample had been painted but then, when he was shown, he could see the brush marks on the wall – though not a difference in colour.18 [30] On questioning from the Tribunal, Mr Krunes advised that, whilst at the property, he had walked through the home, except for a couple of rooms, and that the colour “looked consistent and White on White” and that he was satisfied that the size of the sample carried out in the study was sufficient to determine that it was the correct colour. [31] A great deal of evidence was given by the parties in respect of this issue, both in terms of material filed with the Tribunal and in oral evidence at the hearing. The Tribunal has carefully considered all of this evidence, even if not specifically referred to in these reasons for the decision. [32] In terms of the paint brand and paint colour Everett Constructions was required to use in the interior of the property, the contract between the parties is clear. The contract clearly refers to paint „colour‟ as opposed to 17 Mr Martin later stated that he did not see Mr Everett buy the sample pot nor Mr Price paint the wall and, in fact, he could see no evidence on the study wall of the sample having been painted. The Tribunal also notes the comments made by Mr Martin and Ms Grigore regarding the size of the test patch and the size of the sample pot at p11 of Exhibit 4. 18 This evidence was consistent with a letter Mr Krunes provided to Everett Constructions dated 5 August 2010, Annexure I to Exhibit 15. -- 6 of 20 -- 7 paint „brand‟19. Accordingly, Everett Constructions was well within its legal rights to mix the Dulux White on White colour using Solver brand paints to achieve the same colour. Admittedly, there is nowhere in the contract that refers to paint brand. Accordingly, in the event that a particular brand was to be used, then this would have had to have been inserted as a special condition. If Mr Martin and Ms Grigore did choose the Dulux brand of paint, not just colour, then that is not referred to in the contract.20 [33] To assist in determining whether Everett Constructions painted the interior of the property with the paint colour Dulux White on White, the Tribunal member personally attended the property to inspect the internal paint colour. [34] At the inspection, two things became very clear to the Tribunal member: a) The interior colour of the home, although white, definitely had a blue overtone to it, as alleged by Mr Martin and Ms Grigore. The colour certainly looked out of place with the clean white finishes and furniture in the home; and b) The areas that had been painted in Dulux brand Dulux White on White and those areas painted in the Solver equivalent looked exactly the same and both matched the Dulux White on White colour sample, as alleged by Everett Constructions.21 [35] Mr Martin and Ms Grigore say that the colour on the ceiling in the theatre room is the colour they selected. At the inspection, the Tribunal member was unable to distinguish between the colour on the ceiling in the theatre room and the other surfaces painted in the Solver brand paint. In their Response and Counter-Application, Mr Martin and Ms Grigore seek “a colour to match the selected sample the Respondent’s signed as per contract” and the Tribunal believes that this is what they already have. [36] There is no doubt that it is customary, in the construction industry, for the paint colour chosen by a home owner to then be mixed using the preferred paint brand for that particular contractor. Whilst there is nothing new about this, for those new to the construction industry, such as someone building their first home, it is conceivable that they may not be aware of the practice. [37] The Tribunal is satisfied that Mr Everett and Mr Price carried out the test patch in the study in Dulux brand Dulux White on White. The Tribunal suggests that, even if Everett Constructions had checked the colour using a test pot prior to painting, the painter would have continued painting because it would have matched the colour sample chosen by Mr Martin and Ms Grigore; a small test would not have highlighted the blue overtone which was evident when viewed on a large scale. 19 Annexure E to Exhibit 15, sheet 1 of 17. 20 In any event, the Tribunal Member couldn‟t tell difference and so, taking away the element of industry practice, the issue appears to be with the choice of colour itself rather than brand choice. 21 Although the colour may have varied from room to room, depending on lighting, so did the Dulux White on White paint sample which matched the paint in each room. -- 7 of 20 -- 8 [38] The Tribunal accepts that Everett Constructions did not prohibit Mr Martin and Ms Grigore access to the property and that it did not thereby interfere with their opportunity to mitigate any loss by reason of their colour choice. [39] The Tribunal accepts the evidence of Everett Constructions and finds that Everett Constructions painted the interior of the property with the colour Dulux White on White, in accordance with the terms of the contract. From the evidence, it would appear that the blue overtone to the Dulux White on White is inherent in the paint colour itself, and therefore, it comes down to a colour choice issue, rather than some error on Everett Constructions‟ behalf in the tinting of the paint. [40] Therefore, whilst the Tribunal has a great degree of sympathy for the position that Mr Martin and Ms Grigore find themselves in and can understand why they are dissatisfied with the colour the interior of their home is painted in, based on the evidence presented to the Tribunal, Everett Constructions is not responsible. [41] Mr Martin and Ms Grigore made a number of references to various standards and guidelines, suggested to the Tribunal that they were mandatory and that any non-observance would be cause for the Tribunal to find in favour of Mr Martin and Ms Grigore. Specifically, references were made to: a) Building Services Authority: Paint and Plasterboard – A guide to best practice methods, Edition 3 – June 2008 (the BSA guide);22 b) AS/NZS 2311:2000 Australian/New Zealand Standard Guide to the painting of buildings (the 2000 Painting Standard);23 c) AS/NZS 2311:2009 Australian/New Zealand Standard Guide to the painting of buildings (the 2009 Painting Standard);24 and d) AS/NZS 1580.601.1:1995 Australian/New Zealand Standard Paints and related materials – Methods of test (the Methods of Test Standard).25 [42] The BSA guide refers to the 2000 Standard Guide and, as the name suggests, sets out a guide to best practice methods. It is not incorporated into the terms of the contract between Everett Constructions and Mr Martin and Ms Grigore and, even if it were, it is difficult to see where any alleged non-compliance with the guide by Everett Constructions has contributed to the issue complained of by Mr Martin and Ms Grigore as the BSA Guide refers, in broad terms, to methods and finishes as opposed to paint colour. [43] Both the 2000 and 2009 Painting Standards “provide guidance and recommended practice for the design, application and maintenance of decorative paint systems for use by the paint industry in the development of painting specifications.”26 Importantly, the 2000 and 2009 Standards “cannot be nominated as a painting specification, but [they] can be used as a basis for the preparation of appropriate paint specifications to suit 22 Annexure AI to Exhibit 2. 23 Annexure AJ to Exhibit 2. 24 Annexure AK to Exhibit 2. 25 Annexure AW to Exhibit 2. 26 Preface to both the 2000 and 2009 Painting Standards. -- 8 of 20 -- 9 individual contracts”.27 Further, both Standards state that, in terms of their application, “the Standard is intended to assist trades people, architects or building owners in the preparation of painting specifications for inclusion in contracts”.28 [44] Everett Constructions used a standard Master Builders Residential Building Contract, as it is entitled to do and as is quite standard for a project of this kind. That standard contract does not refer to, or otherwise require, a painting specification. If it did, then the Painting Standards could have been incorporated into such a specification. However, in the absence of this requirement (as is the case here), Everett Constructions has complied with its contractual requirements in this respect. [45] The Methods of Test Standard states that, in terms of its scope, “This Standard sets out a method of assessing colour in a test light booth.”29 There is no requirement in the contract for assessing colour in a test light booth and, accordingly, a standard that sets out the method to do so is not relevant. [46] Accordingly, there is nothing in these standards and guidelines which can impact upon the outcome of this case. [47] At both the hearing and the property inspection that followed, the parties advised the Tribunal that a determination was not required in respect of a number of the alleged defects because they had either come to an agreement or the item was no longer an issue. Those items, as referred to in the QBSA Report, are as follows: a) Item 2 – Garage – no power to electrical outlets, adjacent to cabling hub – no longer an issue; b) Item 16 – Laundry – door has no weather seal – Everett Constructions to install weather seal; c) Item 17 – Main bathroom – non fitting plug for bath tub – Everett Constructions to rectify; d) Item 21 – Ensuite – spa not working, no manufacturer’s warranties, no user’s manual, no instructions etc – no longer an issue; e) Item 22 – Ensuite – spa has multiple black marks in different areas which could not be removed by non abrasive means – Everett Constructions to arrange and pay for someone who works with acrylics to inspect the spa and, if possible, fix30; f) Item 29 – Doorway between bedroom 1 and WIR – damage to carpet – Everett Constructions to contact Carpet Force to confirm can cut thread to rectify; 27 Preface to both the 2000 and 2009 Painting Standards. 28 Clause 1.2 of both the 2000 and 2009 Painting Standards. 29 Clause 1 of the Methods of Test Standard. 30 The Tribunal notes that, prior to the agreement being reached, Mr Steven Everett had given evidence that this issue had not been raised until 4 January 2011, following the final inspection on 14 September 2010 and the handover of the keys. -- 9 of 20 -- 10 g) Item 30 – Bedroom 2 – masking tape (2-3cm) on outside of window but inside security screen (impossible to remove and clean without removing security screen) – rectified prior to inspection; h) Item 35 – Living area – both sliding doors fail to meet freely/properly – Everett Constructions to arrange for NuLite to attend the Property and if NuLite considers it requires rectification, then Everett Constructions will rectify, otherwise, if NuLite does not consider it requires rectification, then both parties will agree with that determination. [48] The QBSA found a number of the items being complained of by Mr Martin and Ms Grigore to be defective building work. The Tribunal agrees with and adopts the findings of the QBSA and therefore orders that such defects must be rectified by Everett Constructions within four weeks of receipt of this decision.31 Those items are as follows: a) Item 4 – Bedroom 2 – crack in wall or plasterboard; b) Item 6 – Kitchen – sink with brown spots and badly scratched on the base; c) Item 7 – Internal walls – paint runs, lumps, scratches, scuffs, black spots, etc visible from more than 1.4 – 2m as per AS/NZ2311:2009 and per BSA Paint and Plasterboard Guide to Best Practices; d) Item 8 – Gloss paint areas (doors, door frames and skirting) – paint runs, splashes, scratches, scuffs, marks, etc; e) Item 11 – Theatre Room – splashes of render on the window frame; f) Item 13 – Facade – poor placement of the downpipe to the left of the garage, flooding the related garden bed every time it rains; g) Item 18 – Main bathroom – chipped tile on the floor; h) Item 27 – Ensuite – scratched / damaged drain metal cover; i) Item 31 – Garage – paint and render spills over large areas of floor; j) Item 32 – WIR – patch of different colour paint on the wall above skirting, right hand corner of external wall; k) Item 33 – Living area – damage to ceiling (hole); l) Item 36 – Theatre – feature wall: poor paint delineation; m) Item 37 – Theatre – small holes in the wall above one electrical outlet; n) Item 38 – Theatre – sticking sliding door; o) Item 39 – Study – sticky sliding door; p) Item 41 – Back house wall – tap 2 installed too close to the spa pump, cannot be used due to water splashes; 31 The Tribunal notes correspondence received from Everett Constructions on 14 February 2011 stating that it would “rectify all defects listed by the building inspector, to a standard satisfactory to the building inspector within 4 weeks from the date the decision is handed down by the Tribunal”. -- 10 of 20 -- 11 q) Item 42 – Laundry – apparently water not coming through the laundry door: towels dry; r) Item 43 – Laundry – skirtings in the laundry cupboard in worse condition, mouldier – probably due to water on low sheen paint applied instead of paint as per contract; s) Item 44 – Laundry – walls in good condition, we cannot identify the source of what appears to be a leak – refer to Item 42; t) Item 46 – Top of doors – some partially painted (only undercoat): laundry (internal), bedroom 2, 3 and 4 and some not painted: WIR, hallway/garage, laundry (external); u) Item 47 – Study – top louver in the lowest bank not closing; v) Item 48 – Bedroom 4 – the wardrobe left mirror: brown spot near the frame. [49] Obviously, in order to allow Everett Constructions to rectify these items, Mr Martin and Ms Grigore will need to provide Everett Constructions (together with its servants and agents) with reasonable access to the property and Everett Constructions will contact Mr Martin and Ms Grigore to arrange a mutually convenient time to do so. [50] It is worth noting, for the record, that many of these defects should have been apparent to Everett Constructions and rectified without having to be requested or subsequently ordered by the Tribunal to do so. Mr Martin and Ms Grigore should refer back to the QBSA in respect of any issues encountered regarding the rectification of these defects. [51] The QBSA found that “there was insufficient evidence to reveal any obvious defective construction practices at the time of inspection” in respect of a number of the items being complained of. The Tribunal agrees with and adopts the findings of the QBSA and makes no further orders in respect of those items, as follows: a) Item 5 – Kitchen – sink mixer not stable; b) Item10 – All windows and glass doors – paint splashes; c) Item 12 – Lot 12 – Block not properly levelled. Soils and grass seeds washed away after each rain in multiple areas. Loam added repeatedly; d) Item 14 – Exterior – gaps around rubber seal between driveway/footpath and slab; e) Item 19 – Main bathroom – bath tub unsupported near drain, allowing for flexure and noise; f) Item 20 – Toilet has significantly stained while ensuite toilet perfectly clean; g) Item 23 – Ensuite – spa unsupported near drain, allowing for flexure and noise; h) Item 24 – Ensuite – spa has chipped tile on a vertical wall; i) Item 26 – Ensuite – tiles on the floor: scratched, spotted / damaged; -- 11 of 20 -- 12 j) Item 34 – Living area – dirty light fittings and dead bugs in down lights; k) Item 40 – Inside of the roof and on the relevant house all – plumbing for the third tap for the kitchen on patio area missing; l) Item 45 – Skirtings – some painted in low sheen: entrance hall on the left side, all skirtings in the WIR, all skirtings in the laundry; m) Item 49 – External – aircon next to clothesline – noisy; n) Item 50 – Aircons – cannot run all at once, circuit breakers tripped; o) Item 51 – Garage – electrical outlet resolved, when firstly checked no power due to circuit breaker tripped. [52] In terms of the remaining items of complaint contained within the QBSA report, the QBSA identified the items as either outside the ambit of building work (Items 3, 15, 25 and 28) or a contractual issue (Item 9). Therefore, the Tribunal makes a determination in respect of these items as follows. Item 3 – Bedroom 1 – Mirror wrongly placed on the door, off centre [53] The architectural door schedule32 clearly shows that the mirror was to be placed centrally on the door with a uniform 100mm setback on all four sides of the door. The photograph provided by Mr Martin and Ms Grigore clearly shows that the mirror has not been placed centrally and as required by the drawings.33 The Tribunal member also viewed this door upon inspection of the property and can therefore confirm that the photograph is a true representation of what Everett Constructions have provided Mr Martin and Ms Grigore. [54] It would seem that, perhaps, in the planning stage, sufficient thought has not been given to the type of door lever to be fixed to the door and still be able to achieve the 100mm setback because the mirror has been fixed immediately beside the door lever and yet the correct setback has not been achieved. This should have been apparent to Everett Constructions in preparing to fix the mirror to the door. [55] It would have been advisable for Everett Constructions to have notified Mr Martin and Ms Grigore that an ambiguity in the contract had been detected34 and attempts made to resolve the ambiguity before fixing the mirror to the door. At this point, there would have been simple options available such as the selection of a smaller door lever / handle. [56] For the Tribunal to order that Everett Constructions achieve the 100mm setback with the existing door lever would require that the mirror be cut to accommodate the chosen door lever and that the mirror thereby partly wrap 32 Signed and dated 31 March 2010. 33 The Tribunal notes the comment by Mr Everett that the door pictured in the drawings is off its hinges whereas the photograph is taken when the door is closed and the door jamb is covering a portion of the door, however, this does not account for the measurement difference. 34 Pursuant to clause 3 of the General Conditions of Contract: Annexure B to Exhibit 15. -- 12 of 20 -- 13 around the door lever. This is not a practical solution to the issue both from an aesthetic and commercial point of view.35 [57] On speaking with Mr Martin and Ms Grigore, it appeared that they wanted the mirror to cover as much of the door as possible and to be evenly and centrally placed on the door. It then comes down to whether they are prepared to sacrifice mirror size to retain the door lever originally chosen or whether they are prepared to change the door lever to maintain maximum mirror size. [58] Rather than making just one order on this issue, Mr Martin and Ms Grigore can choose which of the following options they would prefer: a) Change the door lever: Everett Constructions replace the door and affix to it a mirror in accordance with the contract documentation but with a smaller door lever / handle (which will therefore not be in accordance with the contract documentation but) which will fit within the 100mm setback. The lever to be chosen by Mr Martin and Ms Grigore from options provided by Everett Constructions; b) Change the mirror: Everett Constructions replace the door and affix to it, centrally, a mirror that is reduced in size and will allow for even setbacks taking into account the size of the chosen door lever; or c) Retain the existing door as is. [59] Mr Martin and Ms Grigore must notify Everett Constructions, in writing, within 14 days of receipt of this decision as to which option they elect and Everett Constructions must proceed accordingly and, if option (a) or (b) is selected, complete the work within four weeks of notification. Item 9 – Ensuite and main bathroom – mirrors not stable against the wall [60] Mr Everett responded that Everett Constructions supplied the mirrors as per the specification and affixed the mirrors to the wall in accordance with the manufacturer‟s specifications. [61] Sheet 13 of the contract drawings36 contains, among other things, a fixture schedule in respect of the bathroom. Item 8 of that states: “Hayman ADP 1200 x 900 Mirror”. Sheet 14 of those same contract drawings contains, among other things, a fixture schedule in respect of the ensuite bathroom. Item 3 of that also states: “Hayman ADP 1200 x 900 Mirror”. [62] Neither Mr Martin, nor Ms Grigore, gave any evidence to the effect that the mirrors installed by Everett Constructions were not Hayman ADP 1200 x 900 mirrors in accordance with the terms of the contract. The only issue then is the method of fixing. [63] Although Mr Everett said that the mirrors were affixed in accordance with the manufacturer‟s specifications, in an undated letter from Everett 35 Although the Tribunal notes that in the Final Inspection Report (Annexure Y to Exhibit 15) the defect is listed by Mr Martin and Ms Grigore as “Mirror on WIR narrow was to go around handle” even though this is not what is shown by the drawings. 36 Signed by Ms Grigore on 25 March 2010. -- 13 of 20 -- 14 Constructions to Mr Martin and Ms Grigore37, paragraph 2(g) of the letter states: “The mirrors come from the manufacturer with a mounting bracket built into the back of the mirror. The mounting brackets are at both the top and bottom. We have in the past fixed the mirror using both the top and bottom brackets however feedback from clients has suggested that this makes the border of the mirror very hard to clean. This is why we leave the bottom brackets unsecured.” [64] By Mr Everett‟s own admission, it would appear that the mirrors have not been affixed in accordance with the manufacturer‟s specifications. [65] In the material filed with the Tribunal38, Mr Martin and Ms Grigore comment that “A bathroom mirror is normally fixed to the wall. In the drawings and selection list there is no mention that these types of mirrors are not mounted by conventional means so that we could have rejected the system.”39 [66] Everett Constructions responded: “A normal bevelled edge mirror fitted by “conventional” methods is simply glued to the wall, where this method is secured with screws making it more secure. If you would like this mirror fitted by “conventional” means we can simply put some glue behind the mirror and we will happily do this if it is your specific request, however, it is against our recommendation and we take no responsibility if the result is not as you expected.”40 [67] At the hearing, Mr Everett also commented that Mr Martin and Ms Grigore had an opportunity to see the sample mirror at Reece had they wanted to do so. [68] From a contractual perspective, Everett Constructions are required to affix the mirrors in accordance with the manufacturer‟s specifications, that is, fixing the mirror using both the top and bottom mounting brackets as supplied by the manufacturer. If Mr Martin and Ms Grigore wish for another method to be adopted, then this is their decision and one that will be at both their cost and their risk in the event that the method proves unsatisfactory. [69] Accordingly, if Mr Martin and Ms Grigore wish to have the mirror secured with the bottom brackets provided, then they are to notify Everett Constructions, in writing, within 14 days of receipt of this decision and Everett Constructions must proceed accordingly and complete the work within four weeks of notification. 37 In response to the List of Defects and in compliance with the Direction of this Tribunal dated 7 December 2010. 38 List of Defects prepared by Mr Martin and Ms Grigore in compliance with the Direction of this Tribunal dated 7 December 2010. 39 Refer Annexure E to Exhibit 15, Sheet 13 and Annexure G to Exhibit 15. It would appear that Mr Martin and Ms Grigore initially spoke to Mr Everett and then, following that, completed their selections with Ms Faust. Ms Faust then gave the selections to Everett Constructions before Mr Everett and Ms Grigore signed off on the contract. 40 In response to the List of Defects and in compliance with the Direction of this Tribunal dated 7 December 2010. -- 14 of 20 -- 15 Item 15 – Side boundary – water, soil, cracker dust, stones etc run off to neighbour’s yard [70] Mr Martin told the Tribunal that this was not as much an issue for himself and Ms Grigore as it was for their neighbours. Mr Everett, in his oral evidence, said that the block falls away from the house as required by the QBSA and that it follows the natural flow. Mr Martin and Ms Grigore did not provide any evidence to the Tribunal that the level of the site is not as it should be. Accordingly, the Tribunal declines to make any orders in respect of this issue. Item 25 – Ensuite – spa spare tiles: only one and damaged [71] The contract does not require that spare tiles be provided. Accordingly, there is no obligation to provide spares, only a courtesy. Mr Everett suggested that Mr Martin and Ms Grigore could return to Majer Tiles and obtain spare tiles if they wished to and the Tribunal agrees with this suggestion. Item 28 – Ensuite – inadequate decision regarding the diameter of the spa spout: water flow rate disproportional with the spa volume (30 minutes to achieve minimum fill of the spa) and with the area to be cleaned after use [72] The cover sheet on the contract drawings41 has notes regarding Water Conservation and states: “To achieve water efficiency, class 1 and 2 buildings that are serviced by a water service provider, are to be fitted with tapware and fixtures that satisfy the minimum requirements listed below:” and the list that follows refers to 3-star water efficiency labelling and standards (WELS) for shower roses, laundry tubs, kitchen sinks and basins. There is no minimum requirement in respect of spa or regular baths. Presumably, this is because the purpose of bath tapware and fixtures is to fill the bath, not free flowing water for another purpose. [73] Everett Constructions, at the request of the Tribunal, obtained documentation from Harvey Norman advising as to the WELS ratings for the plumbing fixtures supplied for installation at the property. This was subsequently provided42 and states that the shower is 3 star and the sink and basin mixers both 4 star. It also states that the bath outlets are: “Full flow, no restriction on bath outlets”. The Tribunal has no reason to doubt that the plumbing fixtures supplied by Harvey Norman were installed at the property as intended. [74] The Tribunal is satisfied that Everett Constructions has met its contractual requirements in respect of the “spa spout” and makes no orders in respect of this complaint. [75] Obviously, in order to allow Everett Constructions to rectify the issues with the mirrors detailed in Items 3 and 9 above, Mr Martin and Ms Grigore will need to provide Everett Constructions (together with its servants and 41 Annexure E to Exhibit 15. 42 Email from Mr Steven Everett to the Tribunal and Ms Grigore on 20 May 2011 forwarding an email and attached letter from Tim McFarlane (Projects Account Manager Townsville, Harvey Norman Commercial Qld) dated 20 May 2011. -- 15 of 20 -- 16 agents) with reasonable access to the property and Everett Constructions will contact Mr Martin and Ms Grigore to arrange a mutually convenient time to do so. Additional Issues [76] In addition to the issues outstanding following the compulsory conference (discussed above), Mr Martin and Ms Grigore advised, at the hearing, that a number of further issues were also outstanding and required determination by the Tribunal. At various points throughout the hearing of the matter43 all such issues were resolved between the parties as follows: a) Manufacturer‟s warranties and instruction manuals that Mr Martin and Ms Grigore believed they should have, but didn‟t and they were concerned that if they had to make an insurance or warranty claim, that they wouldn‟t have the necessary documentation to do so. Mr Everett advised that Everett Constructions had no issue with providing manuals and warranties to Mr Martin and Ms Grigore but that Everett Constructions had provided all the documentation that they had in that regard and had nothing further in respect of the items raised, for example, the hot water system, the insinkerator and the spa bath. After some discussion, Mr Everett offered to provide Mr Martin and Ms Grigore with contact details for any list of supplies provided by Mr Martin and Ms Grigore and both parties agreed to finalise the issue in this manner. b) Claims with respect to PC Items. This issue was resolved by the parties during an adjournment and the Tribunal was advised by both parties that there were no further issues in respect of the PC Items. c) Data and phone points allegedly not installed. During the hearing, Everett Constructions advised that it would provide an additional 20 patch leads to rectify the issue and Mr Martin and Ms Grigore confirmed that, on this basis, there was no longer any issue. d) Two-way switch allegedly not installed. During the hearing, Everett Constructions agreed to install the two-way switch. e) Wardrobe issue – no tall hanging space in walk-in robe. During the hearing. Everett Constructions agreed to reaffix the hanging rail higher in the wardrobe to rectify the issue and Mr Martin and Ms Grigore confirmed that this would rectify the issue. [77] It appeared clear to the Tribunal, following the compulsory conference, that the issues in dispute had been reduced to the items referred in paragraph [4] above. However, at the hearing, Mr Martin and Ms Grigore raised again their original damages claim in respect of rental expenses incurred44 and liquidated damages from the date of completion allowed for in the contract until the date they were provided with the keys, as referred to in their counter application. Although it would appear that these claims were in fact 43 Whilst giving evidence, during adjournments and at the property inspection. 44 Mr Martin and Ms Grigore incurred weekly rental costs of $310 from 16 September 2010. -- 16 of 20 -- 17 either resolved or abandoned in the compulsory conference, the answer is simple in any event. [78] There was no evidence to suggest that Everett Constructions had brought the property to practical completion at a date outside the terms of the contract.45 However, because Everett Constructions had not been paid the payment due to the practical completion stage of the contract, it did not deliver the keys to Mr Martin and Ms Grigore. Had payment been made by Mr Martin and Ms Grigore in accordance with the terms of the contract, handover would have been achieved at an earlier point in time.46 [79] Specifically, clause 17.8 of the general conditions of contract state: 17.8 Owner’s entitlement to keys and possession of the Works The Owner must not take Possession of the Works, nor is it entitled to the keys to the Works prior to payment to the Contractor of the final progress claim unless the Owner has obtained the Contractor’s written consent. Interest [80] In its application, Everett Constructions claimed interest on the balance $50,364.35, representing the payment due to the Practical Completion Stage of the contract at the rate of 15%, from the day following inspection47 to the date of payment48, in accordance with clause 11.9 of the contract which states: 11.9 Interest payable on outstanding payments If the Owner fails to make any payment to the Contractor within the time for payment under this Contract, the Contractor is entitled to interest on the outstanding amount at the rate specified in Item 19 of the Schedule, payable from the time payment is due until the date of payment. [81] Item 19 of the Schedule states that interest on overdue payment is 15%, calculated on a daily basis. [82] It was contended by Mr Martin and Ms Grigore that interest should not be payable because either: a) They had terminated their contract with Everett Constructions on the basis of Everett Constructions‟ breach of contract in using Solver paints; 45 In fact, on Mr Martin‟s and Ms Grigore‟s on evidence (Exhibit 2), the end of the construction period was 2 December 2010. 46 Mr Martin and Ms Grigore say that they wanted to pay the disputed amount into trust and the remainder to Everett Constructions so that handover could be effected and although they were unable to avail themselves of the Master Builders‟ Queensland Trust Account, as per the contract, they did not pay the remainder, that was not in dispute, to Everett Constructions in any event. 47 15 September 2010. 48 Mr Martin and Ms Grigore authorised payment on 24 December 2010 but it was not received by Everett Constructions until 31 December 2010. -- 17 of 20 -- 18 b) They were prepared to make payment of the disputed amount into the Master Builders‟ Queensland Trust Account49, in accordance with clause 17.7 of the general conditions of contract, however, as Everett Constructions was not a member at the time, and this was not possible. The relevant portion of Clause 17.7 states: If the Owner wishes to take Possession of the Works but disputes the amount payable to the Contractor and the Contractor is a member of the Master Builders Queensland, the Owner may pay the disputed amount into the Master Builders’ Queensland Trust Account. [83] In terms of the alleged termination of the contract, leaving aside whether or not the interest clause would survive a valid termination, by reason of the decision of this Tribunal regarding the painting issue, Everett Constructions did not breach the contract by using Solver paints and therefore the contract was not validly terminated in any event. [84] In terms of Mr Martin‟s and Ms Grigore‟s inability to make payment into the trust account, clause 17.7 is couched in discretionary, not mandatory, terms. That is, Everett Constructions was not obliged to be a member and likewise, Mr Martin and Ms Grigore were not required to make payment into the trust account however the clause did provide a mechanism for the home owner to take possession and dispute the amount payable.50 [85] Had Everett Constructions been a member, this would have been useful, particularly in light of Clause 11.8 of the general conditions of contract which states: 11.8 No retentions or set off The Owner acknowledged that, subject to Clause 18.2, the Owner has no right of set-off under the Contract or otherwise, that is to deduct any amount from a progress payment due to the Contractor under Clause 11.7, or to hold any retentions for defects or omissions. [86] However, even if Mr Martin and Ms Grigore had been able to deposit the disputed amount into trust, this would not have constituted „payment‟ for the purposes of Clause 11.9 and interest would have continued to accrue in any event and, as it should do, when the contractor does not yet have access to (and therefore use of) the payment. [87] Clause 17.7 of the general conditions of contract (relevantly) states: 17.1 Practical Completion Stage claim payable by Owner upon achieving Practical Completion Stage On giving the defects document51 to the Owner, and notwithstanding that Practical Completion Stage may have been reached with minor omissions or defects, the Owner must pay the Practical Completion Stage claim to the Contractor in accordance with the Contract. 49 Attachment Q to Exhibit 2. 50 It is also noted that the total $50,364.35 was not in dispute in any event. 51 See Clause 17.5 of the general conditions of contract. -- 18 of 20 -- 19 [88] Item 20 of the Schedule to the contract states that the time for payment of the practical completion stage is 7 days.52 [89] It is also relevant to note that both Mr Martin and Ms Grigore signed the final inspection report declaring that, as owner, they have “inspected this property and authorise the builder to be paid the final payment as per the contract”.53 [90] The Tribunal finds that Mr Martin and Ms Grigore were not entitled to hold any retention for the alleged defects or omissions and that the $50,364.35 received by Everett Constructions on 31 December 2010 should have been paid within seven days from the date of practical completion, (that is 16 September 201054) and that, accordingly, Everett Constructions is entitled to interest for this period of time. [91] Accordingly, the Tribunal orders that Mr Martin and Ms Grigore pay interest in the amount of $2,241.97 on $50,364.35 calculated daily at 15% per annum from 17 September 2010 to 31 December 2010 (or 106 days)55. Costs [92] Neither party specifically claimed costs in their respective applications56, nevertheless, both parties made submissions as to costs at the hearing. [93] It is most unfortunate for the parties that this matter has resulted in both parties incurring significant legal costs in an attempt to resolve the issues in the dispute, however, when there is a breakdown in communication and relationship, to the extent experienced by these parties, it is almost impossible to do so without legal assistance.57 [94] The starting point concerning costs in the Tribunal is that each party must bear its own.58 This presumption may, however, be displaced if the Tribunal considers it in the interests of justice to order a party to pay all or part of the costs of another party.59 The phrase “in the interests of justice” is not defined in the Act but is to be construed according to its ordinary and plain meaning, which obviously confers a broad discretionary power on the decision-maker. In determining whether it is in the interests of justice to award costs against another party the Tribunal may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and, whether a party has acted in a way that unnecessarily disadvantages another party.60 52 See also Clause 11.7 of the general conditions of contract. 53 As per the Final Inspection Report: Annexure Y to Exhibit 15. 54 Practical Completion being 9 September 2010 per Practical Completion Stage Notice dated 9 September 2010: Annexure X to Exhibit 15, with the final inspection on 14 September 2010. 55 See calculations in Annexure Z to Exhibit 15. 56 Although it is noted that the Applicant, in its Response to the Respondent‟s Counter- Application, sought orders as to costs. 57 Although both parties represented themselves at the hearing, both parties had previously engaged solicitors to correspond on their behalf. 58 Queensland Civil and Administrative Tribunal Act 2009 (the “Act”), s 100. 59 Ibid, s 102(1). It is also noted that the Tribunal may award costs pursuant to section 77(2)(h) of the Queensland Building Services Authority Act 1991. 60 The Act, s 102(3). -- 19 of 20 -- 20 [95] Having regard to the discretionary power to award costs, the Tribunal has taken into consideration a number of specific factors, including the outcome of the case as determined by the Tribunal, Everett Constructions‟ offer to repaint the home at a reduced cost at an early point in time, the inability of Mr Martin and Ms Grigore to pay the disputed amount into the Master Builders‟ Queensland Trust Account and the lengthy list of defects to be rectified by Everett Constructions. Following consideration, the Tribunal is not satisfied that it is in the interests of justice to make an order for costs. -- 20 of 20 --