MINOR CIVIL DISPUTE - CONTRACT TO LAY ROAD FILL AND ASHPALT - claim that work was defective

[1] The Applicants blame the Respondent for problems appearing in the driveway where the Respondent's operatives had laid road fill and asphalt. In this claim they seek a complete refund of their payment to him of $17,000.

[2] In the claim, the Applicants have run against a difficulty in proving that the Respondent is responsible for all the problems in the driveway and in proving the loss that they have suffered. The Respondent has argued that some or all of the problems were as a result of cost-cutting, defects in the ground, inadequate drainage and inadequate support.

[3] Three hearings were required before all the evidence available to the parties and needed to resolve the matter fairly were before the Tribunal. At the first hearing the Applicant had not yet obtained quotes for remedial work, and the Respondent wished to conduct a borehole test. The matter was adjourned to allow these things to happen. The matter could not be concluded at the second hearing because the borehole test had not been done.

[4] The Applicants live in a house on a hill with a long driveway down to the road. They wanted certain work done to the driveway.

[5] The Respondent visited the site and gave a written quote which was not accepted. The parties then discussed the matter further and reached an oral agreement on 27 October 2011 about the work to be done and its price.

[6] The agreement was that the Respondent would be paid $14,600 to widen the driveway in a number of places and to lay asphalt to a depth of 30mm in an area covering some 700 square metres. In order to do this work an amount of road base was needed and it was agreed that this would be supplied and laid by the Respondent at $400 per 12 ton load. It was thought that between four and six loads would be required. The Respondent agreed to start work the following day and the Applicants paid him a deposit of $5,000.

[7] The next day, that is 28 October 2011 after the work had started, the First Applicant prepared some notes about the work and gave these to the Respondent. These described the work in some detail and stated a desire that the asphalt was to be suitable for heavy loads on the steep drive and with a thickness similar to or better than existing, and that there should be efficient water runoff without pooling. Since these notes were produced after the contract was entered into on the day before, they have no contractual effect.

[8] The work was finished on 25 November 2011 and the total payment made by the Applicants was $17,000. This was the $14,600 for the asphalting work and payment for the supply and laying of six loads of road base at $400 per load.

[9] After the work there was oil spill on the drive. The Respondent and the Applicant both worked to clean this area. Although this oil spill is mentioned in the claim, it was dealt with between the parties informally in this way.

[10] Although the Applicants have suggested that not all the road base for which they were charged may have been delivered, I accept the Respondent's evidence that there were six loads delivered and that he properly charged for these.

[11] In a letter dated 23 December 2011 the First Applicant asked the Respondent to see to certain problems which had arisen with the work, including pooling in some areas apparently due to the fall not being correct, water soaking into the asphalt in other areas and then running out of the asphalt lower down, and a crack in the concrete garage slab caused by the Respondent's roller. Despite these problems, in the letter the First Applicant stated that 'the good news is that we are happy with the overall job'. The explanation for this is that at that time the Applicants were not aware of the full extent of the defects which later appeared.

[12] After further correspondence between the two sides, the Applicants arranged for an independent inspection by a civil engineer on 10 April 2012. The resulting report referred to cracks in the asphalt of various sizes, differing surface texture, compaction marks left by the compaction equipment and varying layer thicknesses. The expert expressed a view as to the cause of these problems in the light of what he had been told by the First Applicant about the manner of delivery and laying of the asphalt. The expert's opinion was that the asphalt had arrived in loads which were too small and that it had been over worked, resulting in a loss of temperature and poor compaction. A similar view was expressed by another engineer in a separate report.

[13] The Respondent disagrees with the factual description of the delivery of the asphalt and argued that it was supplied in large enough loads. However, he was not on site himself to witness the delivery, and on my findings the Applicants' evidence is supported by the expert's opinion. I accept it. The Respondent also argued that there were access problems which meant that a larger paving machine could not be used. However, it was up to the Respondent to plan the job so that this was not a problem. I must conclude on this evidence that in the respect identified by the experts the work was not done with due care and skill.[1]

[14] The Applicants also say that there was other work which was not done properly, such as the laying of the road base and that there was a crack in the concrete garage slab, but I am not satisfied by the Applicants' evidence that these things amount to a breach of contract.

[15] The Applicants seek reimbursement for their total outlay of $17,000. However, that remedy is inappropriate unless they received no benefit from the contract. Some $2,400 of this money paid for the supply and laying of road base, which was done. Also there are large parts of the asphalt job for which there are no complaints. So it cannot be said that there was no benefit to the Applicants from the contract.

[16] Instead, the correct measure of damages based on the usual principle is that amount which would as far as possible put the Applicants in the position in which they would have been if the contract had been performed properly. This would normally be assessed based on the cost of rectification. However for the reasons given below, in this case the Applicants have difficulty proving their loss on this basis.

[17] The Applicants have obtained three quotes for remedial work[2] ranging from $16,500 to $39,000. I accept the Respondent's submission that each of these quotes involves work to the underlying ground and they are not limited to the work done by the Respondent. The reason for this on my findings is as the Respondent says, there are problems with the integrity of the underlying ground and those who quoted for the remedial work must also have realised this.

[18] The problems with the underlying ground arise from at least two things - one is an inadequate depth of road base in the driveway. This has been demonstrated by the test hole drilled at the request of the Respondent. Although there was only one test hole drilled at a place chosen by the Respondent, it seems to me that on the balance of probabilities the same problem is present in other areas. This means that the substratum of the driveway is not as firm as it should be.

[19] A second problem is that a lot of water comes down the driveway from the hill above, and that despite the drainage system present, this water seeps into the ground under the asphalt surface. This problem has caused movement of the substratum where some deep cracks have appeared in the asphalt as can be seen in the Respondent's photographs[3]. That this is movement below the asphalt was demonstrated on the Respondent's recent visit when he was able to put a steel ruler in one of the cracks and it went down into the crack by 200mm (whereas his asphalt layer is only 30mm).

[20] The Respondent has argued that there is a third problem: that there is a part of the drive which stands atop a retaining stone wall of uncertain integrity. From the photographs that I have seen, and in the absence of any expert opinion on this matter, I am not convinced that this is a contributory factor.

[21] So it seems to me that all the quotes are for work beyond that which was done by the Respondent because they involve remedial work to the substratum for the reasons given above. They are also partly for work to areas which have been done by the Respondent satisfactorily and which do not need remedial work.

[22] For both these reasons if the Applicants were to accept any of the quotes, then they would end up with a better driveway than they would have had if the Respondent had not been in breach of contract. Accordingly there would be a large element of betterment. For the same reason I do not think the Applicants truly propose to adopt any of the quotes.

[23] To my mind a more appropriate level of compensation for the Applicant is to make an allowance for the diminution in the value of the property as a result of the defective work. In this case this is the amount by which the value of the work done by the Respondent is less than it should have been - effectively an allowance to represent the defective work.

[24] Some part of the work is already known to be defective as can be seen from the photographs. But the experts also say that other parts of the work have a shortened lifespan because of the way it was laid. The timing and extent of this is currently uncertain.

[25] Doing the best I can with the information provided, I take the view that the value of the asphalting work done by the Respondent was about 65% of what it should have been. The asphalting work represented $14,600 of the total bill. This means that the correct compensation to award the Applicants is 35% of $14,600 which comes to $5,110.

[1] As required by section 60 of the Australian Consumer Law; there is a similar term implied under the Domestic Building Contracts Act 2000.