Gateway Fence Installation P/L v Amstruct P/L (Home Building) [2006] NSWCTTT 450 (14 August 2006)

CONSUMER, TRADER & TENANCY TRIBUNAL

Home Building Division

ORDERS

1. That the Respondent pay to the Applicant the sum of six thousand, eight hundred and seventy five dollars ($6,875.00) on or before 25 August 2006.

REASONS FOR DECISION

THE APPLICANT’S EVIDENCE

The Applicant sought orders for the payment of the sum of $6875.

Mr. Ross, director of the Applicant company gave evidence that he was contacted by Tim Cassidy, an employee of the Respondent company, and asked to provide a quote for fencing work. The work was to be performed at residential premises at “…”, Killara. The Respondent had been retained by the homeowner to perform certain building works, and was seeking to sub-contract the fencing work.

Mr. Ross met with Mr. Cassidy on-site to discuss the requirements of the fencing job. The job could be roughly split into three distinct areas:

1. the section forming part of the dividing fence;

2. the section at the end of the tennis court; and

3. the further section off the tennis court to the boundary on the opposite side to the first section.

The first area was to be fenced with metal fencing. The second area was a gate to be constructed of glass. The third area is the one in dispute. Mr. Ross believed that this area was to be fenced with metal fencing and gave evidence that his quote was prepared on this basis. Plans were provided to Mr. Ross, including an architectural drawing of the second section. The plan states that the third area is to be fenced with “…semi frameless glass”. However, Mr. Ross gave evidence that a large part of his discussion with Mr. Cassidy centred on the second area, as it required some detail to comply with pool safety fencing regulations and meet the architect’s drawings. He understood that the third area would be fenced with metal fencing, as that area was at the rear of the garden, and the cost of glass fencing was so much higher than metal. Mr. Ross also gave evidence that he stated to Mr. Cassidy that glass fencing was much more expensive than metal fencing …“perhaps two to three times as much”.

The Applicant provided a quote for fencing work at the premises dated 6 June 2005. That quote states that the total amount payable for supply and installation of “level top and semi-frameless glass” fencing is $7601. The quote includes a diagram of the areas to be fenced, with the second section marked “GLASS”, circled and enlarged to contain construction detail. The quote was accepted and signed by Mr. Moeskops for the Respondent.

When the materials arrived on site, the Respondent realised that there was an excess of metal fencing and not enough glass panels for the job. Mr. Ross was contacted, and agreed to swap the unwanted metal panels for glass. Evidence was given that he again stated the higher cost of glass. He did not provide a written variation or amended quote, but proceeded to supply the correct panels and perform the work in order to meet the Respondent’s schedules.

On 18 July 2005, the Applicant sent an amended invoice to the Respondent which claimed the sum of $14,476. Some time later, the sum of $7601 was paid, but the remainder of the invoice is disputed under the Building and Construction Industry (Security of Payment) Act 1999.

THE RESPONDENT’S EVIDENCE

Mr. Moeskops gave evidence on behalf of the Respondent, and stated that the Respondent did not receive a variation on the contract from the Applicant, and if it had, it would have considered that variation at the time. Accordingly, the Respondent can no longer claim the amount of the variation from the client because of the expiration of appropriate time limits.

Evidence was also given that the Respondent had received advice that the cost of the fencing work would be around $7,500, and so accepted the Applicant’s original quote. There is no indication or further evidence as to who provided this information to the Respondent, and how such an estimate was formulated.

Mr. Moeskops argued that the Tribunal must focus on the agreement between the parties, and that was that the Applicant agreed to supply goods and perform work in accordance with the plans provided, for payment in the sum of $7,601.00.

FINDINGS

In order to decide this matter, it is necessary to determine the terms of the contract between the parties, or in fact whether any contract existed between the parties.

It is quite apparent from the original quote that Mr. Ross made a mistake. He believed that he was quoting on a fence largely made of metal, when in fact the section in dispute was marked on the plans as glass. There is no evidence that the Respondent induced this mistake or acted in any fraudulent way to cause this belief to exist in Mr. Ross’ mind, which may have voided the contract. It may very well have been the situation whereby the Respondent’s employee had not noticed the mistake until the fence had been installed, and had then refused to pay. However, in these circumstances the mistake was discovered before installation and corrected.

Mr. Ross has given evidence that he advised the Respondent that the cost of glass would increase the overall cost of the fence. He gave evidence that he stated this on several occasions, including at the time that the mistake was discovered. The Respondent has not denied this, but has stated that they did not receive a variation on the contract. It is not in dispute that there was no written variation.

Section 7 of the Home Building Act 1989 provides that:

(1) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it .

However, Section 15 of that Act states:

The holder of a contractor licence is exempt from the requirements of section 7 of the Act (Form of contracts) if the contract concerned:

(a) is subordinate to a principal contract to do residential building work (for example, if the contract concerned is a contract between a licensed builder and a licensed subcontractor)…

Therefore, it is apparent from the legislation that neither the contract nor the variation needed to be in writing. The question then remains whether the parties entered into an agreement in the terms as alleged by the Applicant.

As in all cases before the Tribunal, the Applicant has the burden of proving its case in order to succeed. The standard of proof required is the civil one. That is, the Applicant must prove that it is more likely than not that the events happened as claimed by it.

In this situation, I am satisfied that the parties entered into an agreement for the supply and installation of a fence and for the subsequent payment of $7601 to the Applicant upon completion. I am satisfied that Mr. Ross was mistaken in terms of what he agreed to supply to complete the contract. I am also satisfied that the Applicant has proved that the contract was varied to change certain of the materials and to charge the Respondent the commensurate cost. As can be seen from the legislation, it is not fatal to the Applicant’s claim that the variation was not in writing. I am satisfied that the expediency required by the Respondent in performing the work (albeit possibly arising from the Applicant’s mistake) made it more effective from both parties’ point of view to simply proceed with the work and put the Respondent on notice of the likely increased cost, without providing a written variation at that time.

Mr. Moeskops gave evidence that he accepted the Applicant’s original quote on the basis that he had received advice that this amount was a reasonable one for the goods supplied and work to be done. I accept that this evidence is put forward on the basis that it goes towards showing the reason for acceptance of the Applicant’s quote. However, as evidence it is lacking in weight. I have not been told who provided the advice nor if that person or body had some expertise in assessing construction costs for this type of work. In any event, the parties are able to negotiate an agreement in such terms as they like, including cost. Unless there is a vitiating factor, such as duress, fraud or unconscionability, it is not usually open to the Tribunal to overturn the terms of agreement reached between the parties to a contract.

The Respondent has also stated that, as a result of not having received a written variation to the original quote, it was not able to pass on the cost to its client. From the evidence put before me from both parties, it appears that the original quote was dated 6 June 2005, and the final invoice dated 18 July 2005. This is a period of approximately five weeks. I cannot see any reason why the Respondent would be stopped from claiming the amount from its client in that short time. Indeed, there is no evidence put before me that shows that the contract between the Respondent and its client had ended by 18 July 2005, or that the client had paid the original amount or even been advised of the situation existing between the Applicant and the Respondent. Simply put, apart from the statement made by Mr. Moeskops, I have no evidence in support in relation to the agreement between the Respondent and its client.

In any event, it would appear that the Respondent has had the benefit of the work, and the Applicant is out of pocket in terms of the cost of materials supplied. As previously stated, I have no evidence that the Respondent could not have claimed the cost from its client. It may be simply a matter of fairness in the sense of a quantum meruit claim that the Applicant be entitled to restitution in terms sought. In any event, I do not believe that it is necessary for me to consider this aspect of the matter, as I accept the Applicant’s evidence for reasons set out above.

Accordingly, I order that the Respondent pay to the Applicant the sum of $6,875.00.

L. E. Williams

Member

Consumer, Trader & Tenancy Tribunal

14 August 2006