Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Wade and Wotherspoon Building Contractors v Bilski [2014] NSWCATCD 4 Hearing dates: 7 November 2013 Decision date: 08 January 2014 Jurisdiction: Consumer and Commercial Division Before: R Harris Decision: 1 The respondents are to pay the applicants the sum of $21,971.00 on or before 5 February 2014. Catchwords: Residential Building Work Legislation Cited: Home Building Act 1989 Category: Principal judgment Parties: Steven Wade and Andrew Wotherspoon t/as Wade and Wotherspoon Building Contractors (Applicant) Arthur Bilski and Nicola Bilski (Respondent) File Number(s): HB 13/40227 reasons for decision 1This matter was heard together with matter HB 13/36883 at Lismore on 1 October 2013 when judgment was reserved. Each of the parties appeared on their own behalf and relied upon documents that were admitted into evidence, Mr Wade gave evidence as did each of Dr and Mrs Bilski and Mr Sivewright. 2In matter HB 13/40277 the builders Wade and Wotherspoon sought to recover the sum of $21,971.00 from the respondent homeowners Dr and Mrs Bilski being the balance alleged to be owed in respect of residential building work carried out by the builders at the homeowners' residence at Richmond Hill in northern New South Wales in 2012. 3In matter HB 13/36883 the homeowners sought to recover the sum of $19,838.80 which was alleged to be the cost of completing the works that the builders had left unfinished. 4It is clear on the evidence that the builders entered into a contract with the homeowners to carry out extensive renovations to the homeowners residence on 14th June 2011. The contract price was $186,400.00. The contract had annexed to it a quotation which set out the scope of the works and a schedule of allowances. 5The contract provided in clause 4 as follows: "4. Variations of the work The work may be changed by way of addition, omission, or substitution. Such changes are to be agreed in writing between the parties or done as required by a competent authority. The owner and contractor are to sign off on any variation. Each party will do what is necessary to record the variation details in writing. The price to be paid or the allowance made for variations should be agreed. If no agreement is reached the variation will be valued using the cost of material and labour plus in all cases a reasonable margin to the contractor for administration overhead and profit. The reasonable margin for this agreement is noted in part c on page 1. If nothing is stated it will be 20%. The proper effect of GST is to be determined noting the value of the work done as a variation. If work is omitted the reduction in the amount to be paid is limited to the cost saved by the contractor." 6The contractor's margin noted at part C is 10%. 7Mr Wotherspoon's evidence was that the work was carried out from 27 February 2012 and that at all material times either he or Mr Wade or the partnership held the appropriate licence under the Home Builder Act 1989 to carry out the work the subject of the claim. 8Mr Wotherspoon's evidence was that there were numerous oral variations of the work that was to be carried out, that much of the original work agreed was deleted as more was spent on earlier stages of the renovation than was provided for in the original contract and quote as agreed with Mrs Bilski with whom he dealt with throughout the construction. 9In support of that contention the builders relied upon an email from Mrs Bilski to Mr Wotherspoon dated 26 June 2012 which the opening words of which are "Thanks so our variation is $33000.00. Our total job quotation including GST was $200,000.00 so what I need to know is what is our total expenditure to date (inclusive of the $33,000.00 variation) so that I can work out how much money we have left in the kitty to finish the current phase and which parts of phase two we complete and which parts we delete for now." 10Mr Wotherspoon's evidence was that the amount claimed in accordance with the agreed contractual basis and was a fair and reasonable charge for the work that was done on behalf of the homeowners. He further stated that the work quoted for by Mr Sivewright to finish the works was not work which the homeowners had already paid to be done but was work which would have attracted further charges under the contract. 11Mrs Bilski claimed in her evidence that there was a fixed price contract and that the work that was done ought to have been included in the quote. She denied that she agreed to any variations but agreed there had been cost over runs. Dr Bilski gave evidence that he understood that there was a fixed price contract. 12The homeowners also sought to resist the builders claim on the basis that the partnership Wade and Wotherspoons licence had expired on 26 September 2012 during the course of the work and that Mr Wotherspoon did not hold a license that enabled him to contract with consumers at the time he was carrying out the subject works. 13In this regard it is clear that the partnership of Wade and Wotherspoon held an appropriate licence at the time the contract was entered into. It is also clear that Mr Wotherspoon held a supervisors licence at the time the work was carried out whatever other conditions may have attached to that licence. The Tribunal is not satisfied that there has been a breach of the Home Building Act so as to disentitle the builders from relying on the contract. Even if there had been some technical breach this is clearly a case where the principles of unjust enrichment would apply and would entitle the builders to recover the value of the work done that the homeowners have the benefit of. 14The Tribunal has considered the whole of the evidence in this case both oral and documentary. Where there is a conflict in the evidence between that given on behalf of the builders and that given on behalf of the homeowners the Tribunal prefers the evidence given on behalf of the builders. Mr Bilski was an unconvincing witness. The email of the 26th June makes it quite clear that she was aware of variations. The Tribunal accepts the evidence of Mr Wotherspoon that the amount claimed was in respect of oral variations agreed by Mrs Bilski on behalf of the homeowners. The Tribunal further accepts that the work claimed for by the homeowners is not work that should have been done for the amounts already paid or to be paid by the homeowners but is work that the builders would be entitled to further charge for pursuant to the contract. 15It is clear that these variations were not signed as required by the contract. The builder therefore cannot recover for these variations unless the homeowners had actual knowledge that the variations were being carried out, knew that they were outside the contract and knew that the builder expected to be paid for these variations. (Liebe v Molloy [1906] HCA 67; (1906) 4 CLR 347.) The Tribunal is satisfied that these 3 conditions are met. The Tribunal is therefore satisfied that the builder is entitled to recover these amounts on the basis of an implied contract or alternatively on the basis of unjust enrichment. 16The Tribunal will therefore dismiss the homeowner's application and on the builder's application order the homeowners to pay the builder the sum of $21,971.00 within 28 days. ORDERS 17The respondents are to pay the applicants the sum of $21,971.00 on or before 5 February 2014. R Harris General Member Civil & Administrative Tribunal of New South Wales 8 January 2014 I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 March 2014