Neighbourhood Plumbing Pty Ltd v Hollander (Building and Property) [2025] VCAT 521

1. The respondent shall pay the applicant $5,875.00.
2. In addition, the respondent shall reimburse to the applicant the filing fee of $342.90 on the initiating Application.

1. In this Building and Property List small claim, Neighbourhood Plumbing Pty Ltd ("NP") seeks payment of $8,840.70 from Ms Hollander, for works performed at her residence in renovating an upstairs bathroom. The calculation of that claim is set out in an amended invoice dated 10 November 2023. NP says that Ms Hollander unlawfully cancelled its contract well before its work had been finished, with the result that NP was unable to finish the job or issue a Certificate of Compliance. NP also says that because Ms Hollander was not entitled to cancel its contract, it follows that NP is not bound by its contractual guarantee.
2. Ms Hollander says that she was effectively forced to cancel the contract because NP had constructed a defective membrane in the shower in her upstairs bathroom, which was doomed to fail, but that NP would neither recognise that there were defects or even send a plumber to her property to inspect the areas of concern. She says that instead, NP asserted the right to install tiles over the defective membrane and purport to give Ms Hollander a level of comfort by saying that if the shower leaked NP would fix it. Ms Hollander says she rejected this suggestion as she knew the damage that could be caused to her residence by water leaking from an upstairs shower.
3. It is common ground between the parties that Ms Hollander engaged NP to perform the work pursuant to a written contract which contained various contractual provisions, and that Ms Hollander electronically signed that contract and confirmed the creation of the contract by paying a deposit of $1,000.00.
4. In small claims in the Building and Property List the Tribunal uses very simple procedures to assist the parties to access the legal system without having to engage legal practitioners. In the Notice of Hearing which was sent to the parties in August 2024, the Tribunal directed them to file with the Tribunal and send to each other all documents which were relevant to the issues in dispute, at least 14 days before the hearing. The parties complied with that direction in a somewhat perfunctory manner.
5. The issues in dispute are these:
   1. given that NP ceased work before completing the job, whether Ms Hollander was entitled to "cancel the contract". As a matter of contract law, a contract can be brought to an end by:
      1. the parties completing their obligations under the contract;
      2. the parties agreeing to terminate the contract;
      3. by a party using a mechanism which has been expressly agreed [such as exercising a 'cooling off' period, or a contractual right to terminate]; or
      4. by a party exercising a common law right. At common law, if one party commits a serious breach of the contract, the other party - called the 'innocent party' - has the choice of accepting that conduct as being a repudiation of the contract, and by doing so bringing the contract to an end. This cancellation by the innocent party is called "recission". In theory, it is possible for both NP and Ms Hollander to be the 'innocent party': NP if it was unlawfully excluded from the premises, or Ms Hollander if NP's work was so bad as to constitute repudiation of its contractual obligations to her.

Ms Hollander did not bring a counterclaim against NP. In substance she said that she spent enough money on another contractor to replace NP's poor work and finish the job to extinguish NP's claim.

1. If NP is the innocent party so that its entitlement to be paid has not been extinguished, whether it has properly calculated its claim. If NP has sought less in this proceeding than its proper entitlement, then the amount payable to NP would be capped at the amount it had claimed. However, it would be possible for NP to win the case, but not be able to prove an entitlement to the $8,840.70 claimed.

1. The contract was between NP and Ms Hollander. NP issued a written quote on 26 December 2022, with the reference job number 6497. The document, which was created on a computer program that displayed the contract and its terms and conditions on an iPad, which Ms Hollander signed electronically, identified the customer as Naomi "Hollinder" (sic), but that spelling error is irrelevant.
2. After the parties' dispute had arisen, NP issued a revised invoice. NP says that Ms Hollander asked it to change the name of the Client to that of her company, Tati Holdings Pty Ltd. NP's revised invoice named the Client as "Tati Holdings Naomi Hollinder", both omitting the requisite "Pty Ltd" and continuing the spelling error. Ms Hollander did not deny asking for the company to be included on the revised invoice, saying instead that it was irrelevant to the issues in dispute. Whether there was some thought of making an expenditure on the renovation of a private home tax deductible by including the name of the company is neither here nor there in the sense that the evidence suggests that NP did not turn its mind to the taxation implications and that it simply included additional words on the revised invoice to accede to Ms Hollander's request. At the end of the day, the contract was between NP and Ms Hollander. Tati Holdings Pty Ltd was not a party to the contract and is not a party to this proceeding.

The express terms and conditions of the contract

1. On page 2 of NP's quote, in the text that immediately precedes Ms Hollander's electronic signature, there appears a list of the work to be performed by NP for the contract price of $16,650.00.
2. Item 1 was headed "Shower renovation" and sets out 5 items of work beginning with demolition, followed by installation of sanitary drainage, installation of waterproofing, installation of tiling and grouting, the labour component of installation of bathroom fixtures, and then handover. Removal of building waste using a skip is also referred to. This whole item is charged at $13,500.00.
3. There then followed 5 items of supply "and installation" of plumbing features: a ceramic basin, a toilet trap suite, and a mini tap. Because labour is covered in Item 1, I can only construe these 5 items as referring to the goods, and not the labour, despite the presence of the words "& install". The toilet trap item is repeated. As two items of $750.00 are charged,[1] and as those numbers fit in with the total of $16,650.00, I must read these items as meaning that 2 toilets were being installed in the bathroom. On the other hand, the mini tap is also repeated but both items are costed at zero. Ms Hollander did not raise any arguments about this part of the contract price. Perhaps the parties agree that the document charges one toilet at $750.00 and one mini tap at $750.00.
4. On page 3 of NP's quote, below Ms Hollander's electronic signature, is the heading Terms and Conditions, followed by some sentences. I must say that this part of the document is very poorly expressed. A paragraph starting with 2 asterisks is expressed to be a statement by the representative[2] of NP who prepared the quote, stating that before the Client entered into the contract they "discussed the nature and extent of the scope of work and its cost". They "have given the customer a copy of this contract"- which is somewhat remarkable with a contract displayed on the screen of an iPad - and "All work has or will be done in compliance with company standards".
5. The next paragraph is expressed to be a statement by Ms Hollander: "I hereby acknowledge commencement and satisfactory completion of the work described above...". Those words cannot literally have been true at the moment Ms Hollander signed the contract. They are nonsensical. There is however a sentence in bold: "I agree to a 1.75% interest charge for past due contracts". NP relies on those words to claim interest in this proceeding. Clause 9, to which I refer below, also deals with interest but has its own difficulties.
6. The problem confronting NP is that interest is usually charged periodically, for example 1.75% per week, month, quarter et cetera. No time period is stated in this sentence. Further, the expression "past due contracts" is difficult to understand. I could not interpret those words to mean invoices which are outstanding beyond their due date. I conclude that these words about 1.75% interest are meaningless and unenforceable.
7. Frankly, the Terms and Conditions appear to have been cobbled together by means of copying and pasting from other businesses' contracts. This is not unusual in small business but leads to poor outcomes. It is arguably done in breach of other persons' copyright.
8. Clause 2(a) says that "Payment is due on completion of the work".
9. Clauses 2(b) - (d) contain various provisions about adjustments to the price, which on even a superficial reading would be unfair terms within the meaning of section 23 Australian Consumer Law (Victoria).[3]
10. Clause 3 is headed Defects and Returns. Its subclauses seek to protect or even exempt NP from liability, but aspects of them would be void under section 23 of the Australian Consumer Law (Victoria). Similarly, clause 4 is headed Warranty which word might imply that it is giving the Client certain rights, but it purports to make the conveyance of those rights conditional and is ineffective. Clause 5 is headed Limitation of Liability and clause 5(c) reads as satire. Clause 7 is headed with the names of legislation which has long been repealed.
11. Clause 9 is headed Default & Consequence of Default. Clause 9(a) seeks to entitle NP to be paid compound interest in certain circumstances. Compound interest is arguably an unenforceable penalty but grammatical errors in the clause, including the use of future tense to identify past invoices render the clause ambiguous. Clause 9(b) seems to be an attempt to extract an indemnity from the client, but an unfortunate typographical error results in the word "identify" appearing instead. Ambiguities in onerous clauses of this nature must be read 'against' the party who drafted them and placed them before the other party.
12. Clause 9(c) is arguably operative, and if certain excessive phrases were read down, it would be consistent with the common law position of an innocent party in a serious breach of contract being entitled to rescind the contract. The common law is not excluded by the Terms and Conditions.
13. Clause 11 purports to give NP a mortgage and/or charge over all of the client's interest in any asset, and to authorise NP to lodge a caveat. NP is not seeking to assert that it is a secured creditor in this proceeding. It is possible that clause 11 has been included in the Terms and Conditions in an attempt to apply pressure to the client.
14. Clause 12(d) says that, "In the event that the Client cancels delivery of Goods the Client shall be liable for any costs incurred by [NP] up to the time of 24 hours prior to work commencing". The definition clause on page 3 of the document, defines Goods to include Services.
15. Clause 24 is headed Cancellation Policy. Clause 24(a) says that cancellation "must be made 24 hours prior to work commencing" (not "at least 24 hours") and clause 24(b) says that cancellation "must be formally emailed to" NP.
16. When NP issued its revised invoice on 10 November 2023, it did so by creating again a document which could be displayed on an iPad. As I said above, the text on the first page was different because it named the client as "Tati Holdings Naomi Hollinder". On page 2 it set out its itemised invoice which totalled $8,840.70.
17. The font and pagination are a little different but the Terms and Conditions in this document seem to be the same as in the quote. However, there is no Clause 24 in this document, containing a Cancellation Policy. Because one party to a contract cannot unilaterally vary its terms, the revised quote does not have the effect of deleting Clause 24.

1. Section 98(1) of the Victorian Civil and Administrative Tribunal Act 1998 is crucial to the government policy goal of making the legal system accessible and inexpensive. NP would have to have a lawyer in a Court proceeding but can be represented by company officers in the Tribunal. The Tribunal is not bound by the rules of evidence, which releases parties from the need to learn concepts like admissibility and hearsay evidence. Section 98(1) is not, though, a licence to the Tribunal to ignore legal principles of fairness.
2. The applicant's witnesses Mr Zakhary and Ms McCue were not directly involved in the events giving rise to this claim, with the one exception that Ms McCue had attempted to speak to Ms Hollander when the dispute arose (and NP's revised invoice had not been paid) but found that Ms Hollander would not answer her calls or emails. NP did not call as a witness the person who prepared the quote, or the plumber/s who did the work. Ms Hollander had first-hand knowledge, in the sense that the dispute arose from the renovation of her bathroom, but she is not qualified to give opinion evidence on the quality of plumbing work, and her evidence was largely hearsay. In asserting that NP's work was defective, Ms Hollander essentially relied on a few sentences in an email from Plumbing Bros dated 20 November 2023 - about 10 months after the parties' contract was terminated. The author of Plumbing Bros' email was not called as a witness. He is identified as that business's General Manager, and the email is not expressed in the first person. So, the author does not even say that he saw the bathroom. Instead, Plumbing Bros' email says

Regarding our works ... Client called to request a shower renovation. Upon inspection found main bathroom shower had work started by others, these works were around the shower area which had tiles removed and new shower base and screed installed. Walls had been waterproofed. The waterproofing although installed was not to the perimeter of the shower recess, this had to be removed and screed at shower base removed, new base installed, and new walls installed with waterproofing to the entire shower area. A quote was provided and accepted, works were carried out and completed.

1. As the email does not say "Upon inspection by me ..." or "works were carried out and completed by me ..." I do not assume that the General Manager himself did these things. Therefore, assuming the email to be genuine, the text is based on hearsay.
2. Ms Hollander produced a quotation by Plumbing Bros dated 13 February 2023, in the sum of $8,019.00. The first sentence of this document says that it is an Amended Quote. Ms Hollander did not produce its predecessor. The quote says, "shower screen removed by others" and "complete waterproofing to shower walls" (which reads as if it means that Plumbing Bros were quoting to complete the waterproofing which was partially present, as distinct from meaning that Plumbing Bros would completely waterproof the shower walls). The quote does not refer to the condition of the waterproofing at the time the quote was given. The quote describes different items of work, but only a lump sum figure and not separate amounts for each item.
3. Ms Hollander did not produce any objective evidence that she had paid $8,019.00 to Plumbing Bros, although it stands to reason that as NP did not complete the work she would have had the shower completed by somebody.
4. Ms McCue denied the allegation that NP's plumber wanted to install tiles over a defective membrane and said that if the shower leaked NP would fix it. Clearly, Ms McCue did not purport to be present during any such conversation between a plumber and Ms Hollander. Ms McCue argued from the basis of logic, first that NP was well aware of plumbing regulations and its obligation to issue a certificate of compliance, and that if its work resulted in an upstairs shower leaking it would be liable for expensive repairs; and additionally that would not walk off the job "leaving in" a substantial contract price that was waiting to be earned. These arguments by Ms McCue are sensible, but don't really amount to evidence.
5. The only objective evidence of NP installing a waterproof membrane that did not go to the perimeter of the shower, is one of 2 photographs. However those photographs are not taken in a way which is helpful. There is no expert's report. An expert witness would have taken photographs from a proper angle to demonstrate defects that they were identifying. The 2 photographs produced in this case, though, are singularly uninformative.
6. On the basis of the evidence presented, and in the knowledge that the parties chose the level to which they would comply with the Tribunal's directions for the production of evidence, I reach the following conclusions:
   1. NP did some work for Ms Hollander on her upstairs bathroom. This is common ground between them, and the 2 photographs show that some work was performed.
   2. NP was engaged pursuant to a written quote, which Ms Hollander accepted by signing the document on the iPad and by paying $1,000.00. The terms and conditions in the quote are basically pointless because they are so badly drafted, and because some are rendered void by statute.
   3. NP did not finish its work. This is common ground between the parties.
   4. Ms Hollander caused NP to stop work. She excluded them from the site. This is clear from Ms Hollander's evidence that she regarded NP's work to be seriously defective.
   5. The onus is on Ms Hollander to justify her exclusion of NP from the site. She asserts that the shower base was not sufficiently waterproofed. NP denies that allegation, on the basis of Ms McCue's submissions that NP knows its obligations under plumbing regulations rather than on the basis of evidence. I do accept NP's position on this issue. Of course a plumber would understand that allowing an upstairs shower to leak into a residence would necessitate an expensive repair. I think it more likely than not that if someone said to Ms Hollander that if the shower leaked NP would fix it, that they meant that NP would not walk away if its work turned out to be defective. It was not intended to mean that Ms Hollander's only remedy was to wait for the shower to leak and then hope that NP would fix it. No other interpretation is realistic. If the words were said, Ms Hollander misconstrued them.
7. I also mention here that Ms Hollander said that this comment about NP fixing the work if it leaked was made when someone was on-site to apply tiles. Ms McCue said - on the basis of her general knowledge of how NP operates, and not on the basis of first-hand evidence that she could give of the particular conversation - that the person was there to check the tiles which would remain in the bathroom, for the purpose of specifying matching tiles. The person was not there to apply tiles there and then. I think the evidence from NP is too scant on this point to enable me to reach a conclusion, but I will say that I respect the logic of Ms McCue's assertion.
8. In the circumstances stated above, I find Ms Hollander repudiated the contract by excluding NP from the site, and that by not coming back to the site and by much later issuing the revised invoice, NP accepted that repudiation as bringing the contract to an end. Accordingly, I find Ms Hollander is liable to pay NP.

1. NP's revised invoice dated 10 November 2023 contains 11 items. The first 2 are $1,316.70 as 1.75% interest, and $250.00 as a cancellation fee. The clause dealing with 1.75% interest is unenforceable for the reasons set out above, and the contract does not provide for a cancellation fee. NP's claim for payment of these 2 items are dismissed.
2. The third item is skip bin hire, $649.00. In the original quote, the cost of skip bin hire was included in item 1, which totalled $13,500.00. NP did not produce a bin hire invoice from a supplier, or evidence of payment. In the absence of that evidence I cannot award $649.00 because as NP knows, Ms Hollander has denied the claim, and in the face of that denial NP has not proven it. I accept, though, that a skip was used to remove debris and I allow around half of the amount claimed, $325.00, on the basis of quantum meruit.
3. The fourth item is called Management and admin fee, $950.00. The contract does not provide for any such fee. If instead of being for a "fee" this item is intended to be a claim for damages, then there is no proof of the activities which would be properly costed at $950.00. This claim is dismissed.
4. The next items, 5 - 10, are claims for the value of work performed: rough in, tiling, installation of screed, installation of membrane, and installation of cement sheeting/water resistant board. These items of work were included in item 1 of the original quote, which totalled $13,500.00. However on the documents, it is not possible to connect the amounts claimed in this revised invoice with that global sum of $13,500.00. The claim for tiling is $125.00, and the description is "Material restocking fee - direct from the supplier - due to cancellation". It is not possible to understand this item and it must be rejected. Doing the best I can on this information, I allow rough in at $850.00, zero for tiling, installation of screed at $575.00, installation of membrane at $800.00, and installation of cement sheeting/water resistant board at $1,075.00.
5. Item 11 is demolition charged at $750.00. There is no doubt that NP carried out some demolition. The sum seems reasonable, especially given the absence of evidence to the contrary. I allow it.
6. Item 12 is a charge of $1,500.00 for two toilets, which is consistent with the initial quote. The revised invoice says the installation of these toilets was completed and the work tested. It must be allowed at $1,500.00.
7. The amounts which I find to be proven [$325.00 + $850.00 + $575.00 + $800.00 + $1,075.00 + $750.00 + $1,500.00] total $5,875.00.
8. NP has substantially succeeded in the proceeding, and sections 115A, 115B(1)(a), 115B(3)(a) - (c) and 115C(1)(b), 115C(2), and 115C(3) of the Victorian Civil and Administrative Tribunal Act 1998 together require the Tribunal to order the respondent to reimburse to the applicant the filing fee of $342.90 on the initiating Application.

[1] That is, both in this quote and in NP's revised invoice dated 10 November 2023.

[2] Clauses 1 (d), (f) refer to "Director", "plumbing agents or representatives" and "manager".

[3] There are several other clauses which run afoul of section 23 of the Australian Consumer Law (Victoria), such as in clause 23, which purports to give NP the right unilaterally to vary the contract, and limits the Client's right to compensation to the contract price.