Victorian Civil and Administrative Tribunal|2004-06-23|Before: Mr P

IVBP Designers & Builders v Mitrevski [2004] VCAT 1207 (23 June 2004)

Domestic building - Claim and Counterclaim - Claim for interest and costs - No interest or costs ordered.

2. On the counterclaim I order the Applicant to pay the Respondent the sum of $30,132.00.

1. This matter was commenced by application filed on 20 August 2002. Points of Claim were filed on 23 December 2002 and a Counterclaim was filed on 20 May 2003.

2. The parties have been unable to resolve this matter between themselves. They should have been able to do so if acting reasonably. The matter has gone to mediation on one occasion and to compulsory conference on two occasions. All to no avail.

3. Hearing of the matter commenced on 18 February 2004. The difficulty in finalizing the matter has been the unavailability of witnesses. Even on the final day of the hearing, 16 June, the Applicant's expert has declined to attend for reasons to do with his wife's medical condition.

4. The parties entered into a domestic building works contract dated 16 December 1999. The contract was to carry out works at the Respondent's premises at 1 The Oaks, Hillside for the all up figure of $350,300.00. The works commenced in about January 2002 and were due to be completed by September 2000. In fact the works were not completed until long after that time. The Respondent went into occupation in December 2001 and a Certificate of Occupancy was issued on 30 January 2002. During the course of these protracted works the Respondent, I believe, lost his wife to sudden illness. Yet at that time, as I recall, he found time to trouble himself about moneys due to the Applicant.

5. The Applicant is claiming all up a sum of $47,435.00. This includes a final stage invoiced figure of $35,030.00 and GST payments of $15,763.00. Extras and additions total $1,980.00. In this, he is prepared to allow the items in the report of C G Balmaceda ($2,578.00) less the garage floor item ($660.00). As well, the Applicant claims interest and costs.

6. In his Counterclaim, the Respondent claims a figure of $52,951.50. This includes a figure for rectification works made necessary it is alleged by the Applicant's faulty workmanship. In the Counterclaim this figure was put at $6,923.00. The BSS Report, however, gives a figure of $11,629.00. The Respondent agrees the staged payment of $35,030.00 was not paid by him. He claims, however, a right to certain deductions and it appears these total $6,923.00 (which is the figure incorrectly claimed as rectification costs). He agrees that an allowance for GST should be made if proper - "as deemed by the Tribunal". But he argues he is entitled to a liquidated damages sum of $15,250.00 (wrongly mentioned in the Counterclaim as $14,250.00). He claims as well a right to interest. If, in the result, the figures should work out to a payment to be made to the Applicant, the Respondent argues he should be ordered his costs nonetheless or that there should be no orders for costs at all.

7. Having heard the parties give their evidence, and having heard their submissions, I am in a position to make various findings of fact leading to the orders I shall make.

8. I accept and find on the evidence for the Applicant as follows:

(a) the Respondent has failed to pay him the final stage payment of $35,030.00;

(b) certain GST payments are due to him by virtue of the contract and these, I find, total $15,763.00. (I disagree (as was put to me on behalf of the Respondent) that I can only be satisfied on this point after hearing evidence given by someone from the Australian Tax Office);

(d) additions he is claiming (totalling $1,980.00) are properly claimable.

9. As regards rectification costs I have noted that the Applicant is prepared to allow the figure in the report of C G Balmaceda less the garage item. The total is $1,918.00. However, as I have also noted Mr Balmaceda declined to attend the hearing for personal reasons and was not, therefore, cross-examined. I have received his report (dated 15 June 2004) into evidence but its weight is another matter. The author of the BSS report (dated 11 September 2003) - Mr R Arends - did attend the hearing and gave evidence and was cross-examined. I saw no reason to decline to accept any part of his evidence. I accept his evidence in its entirety in preference to the other evidence. In consequence, I allow a figure of $11,629.00 as costs of rectification arising from poor workmanship. This includes a figure of $2,280.00 for the garage floor. I take note, in particular, of Mr Arends' description of workmanship in the first floor gallery as "terrible" and that his assessment of the front concrete porch is that it is a "disgrace". Mr Arends, I accept, has the relevant technical expertise to justify the making of such observations and is not, I would think, given to overstatement.

10. I accept and find on the evidence for the Respondent as follows:-

(a) the Respondent rightfully claims, thus, rectification costs of $11,629.00;

(b) the Respondent rightfully claims deductions (for which he should be given credits) of $6,923.00; however, I take off such sum, allowances the Applicant is prepared to make, as I have mentioned, of $3,420.00 (which leaves a balance of $3,503.00). In respect of tiles and tiling I allow respectively the sums claimed by the Applicant as allowable ($1,485.00 and $1,845.00) and not the sums claimed by the Respondent ($1,710.00 and $1,927.00);

(c) the Respondent is entitled to liquidated damages for delay at $250.00 per week, which is the contract figure. I allow 60 weeks and not 61 weeks and the figure totals not $15,250.00 but $15,000.00. I have no hesitation is making the finding that the Applicant was late, by over a year, in bringing the contract to completion. The Applicant's delay was inexcusable, in my view, in all the circumstances but is largely to be explained by reference to the bad relations, which had developed between the parties.

11. On the claim, therefore, the figure I should allow the Applicant is $49,353.00. This consists of the following figures being added - $35,030.00; $15,763.00; $1,980.00 - less $3,420.00.

12. On the Counterclaim, the figure I should allow the Respondent is $30,132.00. This consists of the following figures being added - $11,629.00; $3,503.00; $15,000.00.

13. On the claim, therefore, I order the Respondent to pay the Applicant the sum of $49,353.00. On the Counterclaim, however, I order the Applicant to pay the Respondent the sum of $30,132.00. The difference between the two figures is, thus, $19,221.00.

14. I am asked also to make orders with respect to interest and costs. Reference is made to the Penalty Interest Rates Act 1983. Reference is not made in the Applicant's figures in the Submissions to a sum for contract interest. This was a matter, however, which was mentioned by the Respondent.

15. I do not consider I am obliged to order interest either on the claim against the Respondent or on the Counterclaim against the Applicant. No such obligation appears to arise under ss. 53(2)(b)(ii) or 53(3) of the Domestic Building Contracts Act 1995 each of which is expressed in terms of what the Tribunal "may" do. I was given no information, in any event, on what the appropriate rate or rates might be. If a case for interest is to be put forward, the Tribunal should be assisted. There is a possibility also that interest payments, if ordered on both, might cancel one another out or might almost do so. That would be futile. I decline, therefore, to order interest for or against either party.

16. Costs also were sought by both parties. Reference was made to s109 of the Victorian Civil and Administrative Tribunal 1998 and it was said, on behalf of the Applicant, that costs should follow the event. As I have noted, the Respondent also asked for costs or submitted that, otherwise, there should be no orders for costs.

17. I cannot agree that under s109 costs follow the event. By s109(1) the position plainly is otherwise. Before costs are ordered under s109(2), by a departure from s109(1), the Tribunal must be satisfied it is fair to do so having regard to the matters in s109(3).

18. I am not satisfied I should order costs for or against either the Applicant or the Respondent. The Applicant and the Respondent have both succeeded to some extent and have both failed to some extent also. There is nothing else, however, which I can identify which persuades me I should depart from the position established in s109(1), whereby each party must bear its own costs. Both parties have engaged in discreditable conduct on occasions, I should add. Certainly this is not an occasion on which I would order costs for the Applicant only even though a net balance is due to him. Costs orders in favour of both parties might cancel each other out, in any event, and there is futility in that also. If there was a factor in s109(3) which I could identify, it would still be a question whether I should exercise a discretion to order costs in favour of one party or the other. The Tribunal is never obliged to order costs, in any event. Considering the conduct, on occasions, of both parties, nothing persuades me, on the materials, that either should gain a favourable exercise of discretion if, as I say, a s109(3) factor could be identified.

19. The result is that there are no orders for costs.

IVBP Designers & Builders v Mitrevski [2004] VCAT 1207

At a glance

Court

Decision date

Before

Source

Judgment (31 paragraphs)

IVBP Designers & Builders v Mitrevski [2004] VCAT 1207 (23 June 2004)

Parties