VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
CVIL DIVISION 
CIVIL CLAIMS LIST 	
vcat reference No. C212/2020	
CATCHWORDS	
Claim for failure to pay under an oral agreement for work and labour provided. Counterclaim for failure to conduct works with due care and skill in breach of s60 of the Australian Consumer Law. 	

first APPLICANT 	John Farrell 	
second applicant	Susan Farrell	
RESPONDENT 	Simon Thompson  	
WHERE HELD	Melbourne	
BEFORE	Member MJF Sweeney 	
HEARING TYPE	Civil Claims Hearing by video conference	
DATE OF HEARING	2 July 2020 	
DATE OF ORDER	29 July 2020 	
CITATION	Farrell v Thompson (Civil Claims) [2020] VCAT 794

Order
1.	The respondent, Simon Thompson, must pay the first applicant, John Farrell, and the second applicant, Susan Farrell, the sum of $2,788.11.

2.	On the claim in respect of proceeding C8167/2019, the respondent, Jack Farrell aka John Farrell, must pay the applicant, Simon Thompson, the sum of $2,863.96.

3.	The amount ordered to be paid under order 1 above may be set off against the amount ordered to be paid under order 2 above in satisfaction of these orders. Upon set off, the net amount that must be paid by the first applicant, John Farrell, and the second applicant, Susan Farrell to the respondent Simon Thompson, is $75.85. 

4.	All other claims dismissed.

MJF Sweeney 
Member			

APPEARANCES BY VIDEO LINK HEARING:		
For First Applicant  	In person 	
For Second Applicant	In person 	
For Respondent 	In person	

Reasons
BACKGROUND 
1	The first and second applicants, John Farrell and Susan Farrell, bring this proceeding by way of counterclaim against a claim of Simon Thompson, the applicant in proceeding C8167/2019. The proceedings were heard together. This determination and reasons are dispositive of all matters arising under both proceedings.     
2	In proceeding C8167/2019, Simon Thompson, claims against Jack Farrell, aka John Farrell, $2,863.96 under an oral agreement for provisions of labour and materials, as invoiced on 20 July 2019.    
3	The Farrells say that the works undertaken by Thompson were defective. In their ‘Amendments to Points of Claim’, dated 11 June 2020, they claim costs of rectification of $5,479.93.    
4	On or about 20 May 2019, the Farrells requested Thompson, a handyman carpenter, to undertake certain renovation works to convert a wooden garage into a studio at the rear of the Farrell’s property in Rye. The agreed fee was $45.00 per hour. The agreement was made orally and the scope of the works was not written. The works were as directed by the Farrells from time to time. 
5	There is some disagreement as to the initial scope of works. Thompson says the Farrells changed their minds on occasions on matters such as using pine wood for lining instead of plasterboard, requesting framing for a bathroom area and a later request for external works. Thompson says that, in addition to the works being changed or added to, the Farrells several times changed the order in which the works were to be done, such that that different parts of the works were not completed when he had to move onto other parts.    
6	Thompson says that at no time was it agreed that he was to complete the job as a total project for a cost of around $10,000. He says his agreement was simply to undertake works as directed by the Farrells from time to time at the agreed hourly rate for the conversion of the garage into a studio.        
7	The parties agree that the works ultimately requested were to line the internal walls with pine wood, the ceiling with plaster and to insulate both. The works included framing work for bathroom and appropriate bathroom lining to two walls, water run to bathroom basin and some associated ‘plumbing’ works, install a Bunning’s kitchenette, re-run wiring over beams, removal and replacement of two smaller windows for two larger ones, remove a roller door, insert a new door at back, undertake painting and install a hot water service to be supplied by the owner. Thompson says it was to be an internal hot water service. For the exterior, works requested included some soil excavation, replace external base plates, undertake weatherboard rot repairs and replacement, prepare frame for garden shed concrete slab and site clean up.  
8	Several weeks after the works started, Brandon O’Hehir was engaged to assist with labouring/odd jobs. O’Hehir was engaged by Mr Farrell and paid directly by him at an agreed rate of $30.00 per hour. O’Hehir gave evidence for the applicant and confirmed that he was engaged directly by Mr Farrell and that his four invoices were all paid by the Farrells. He also said that in the course of his work he stood on the kitchen cabinet causing the leg to break.  
9	Thompson says that the Farrells kept prioritising different aspects of the work so that he had to keep changing what he was doing. He says that this was in part due to Mr Farrell saying he was concerned whether he had sufficient funds to finish the studio works.     
10	Works started around 20 May 2019. The works ceased when Thompson left the site on or about 20 July 2019, after being instructed to do so by the Farrells. Thompson issued periodic invoices over the course of the works which were promptly paid, save for the last outstanding one. 
11	The invoice representing Thompson’s claim is dated 20 July 2018. It is generally expressed. It specifies 39.5 hours labour, being $1,777.50 and $1,086.46 for materials, a total of $2,863.96 including GST.
12	Thompson says that no complaint was made about his work and no request was made for him to rectify works that the Farrells later complained about. Thompson says that, given the Farrells paid all the invoices without complaint, except for the last invoice, they must be taken to have accepted the work and cannot now complain they were not done with care and skill.   
13	The Farrells say the overall works were not done with due care and skill and required rectification. Mr Farrell say that he does not dispute the claim amount under the unpaid invoice dated 20 July 2019, but says that he is entitled to claim for costs of rectification where it is demonstrated that there has been a lack of due care and skill.  
14	The Farrells’s defence in this regard was not entirely clear. From the totality of their evidence and as a matter of logic, I understand that their defence is that Thompson is entitled to be paid for works done, but that to the extent the works are defective, they are entitled to set off the unpaid invoice against their claimed costs of rectification. In other words, a set off. I have proceeded on this basis.  
15	The Farrells reject the proposition that they must be taken to have accepted the works up to the last invoice simply because they had paid the past invoices. Mr Farrell says that Thompson’s execution of the works was haphazard and disorganised. He says that most of the different segments of the work were done to an incomplete stage, so that at any given time, it was not possible to discern whether the works were being done to a proper standard. He paid the invoices nevertheless.  
16	Mr Farrell says the garage conversion into a studio was a total project and that he had hired Thompson to complete the works as a project. He says that the works were not a bunch of handyman jobs but a project. The project should not exceed $10,000. He does not deny that Thompson was hired on an hourly rate but says that the agreement was to complete the project.   
17	The Farrells agree that they were on site most days throughout the works but did not seek to ‘micro manage’. They say the works were of poor quality. Mr Farrell gave evidence, supported by a number of photos, which included misaligned weatherboards, poor plastering, lack of flashing around windows and doors and door sill, incorrect waterproofing and sewer line plumbing and insufficient excavation. He says there were issues with the purchase of an inappropriately sized hot water service and that Thompson had given incorrect advice about the appropriate size, causing them loss.
18	Giving evidence for the Farrells was Christopher Tumminello, a general carpenter, since 2004. He has run his own carpentry business since 2014. Tumminello did not provide an expert report. The material he did provide does not comply with the VCAT Expert Witness Practise Note. The material provided is not independent. Tumminello was engaged by the Farrells to undertake rectification of the allegedly poor work and to complete the studio conversion. He gave evidence for the Farrells in respect of his view of faulty works and the costs of rectification. The costs of rectification were identified the full written quotation for works.    
19	Tumminello’s business, True Cut Carpentry & Landscaping, provided the Farrells with a detailed quote dated 4 August 2019. The quote was for rectification works and completion of the conversion of the studio. Unlike their engagement of Thompson, the Farrells sought and accepted a fixed price detailed quote and description of works for the total studio conversion project. The fixed price was $10,560. Unlike the generalised and oral works description provided to Thompson from time to time, the scope of works agreed with Tumminello was precise and presented considerable detail over three pages. Tumminello undertook the works to completion. 
20	At the request of the Farrells, Tumminello separated out from the total cost of the works, an ‘invoice’ of the costs that, in his opinion, should be attributed to rectification. Invoice No. 1039 dated 14 August 2019 is exhibited at page 33 of the respondent’s hearing book. In his opinion, the cost of rectification including GST is $4,972.75. 
21	The Farrells’s claim for cost of rectification is set out at page 5 of the respondent’s hearing book as its ‘Amendments to Points of Claim’, dated 11 June 2020. The total claimed is $5,479.93. It is comprised as follows:
(a)	‘Reworks costs per True cut carpentry Invoice 1039’: 	$4,042.00
(b)	Earthworks:							$1,100.00
(c)	Other costs:							$   337.93
Total claimed: 							           $5,479.93
22	The amount claimed under (a) above is less than the amount stated in the respondent’s original application before the amendment to points of claim. The amount claimed in the original application is as stated in True Cut invoice 1039 (exhibited at page 34 of the hearing book) being $4,972.45. Whilst the Farrells have made their claim on the basis of the ‘Amendments to Points of Claim’, it is supported by documentary evidence, including the above, for a claim of $4,972.45 for rectification costs. 
23	In all the circumstances it is clear to me that the case was both presented and defended, on the question of rectification costs, based on the True Cut invoice 1039 for $4,972.45, not the lesser amount. I have proceeded on that basis.      
24	The issues for determination and which may be considered together are:
(a)	Whether the works of Thompson were conducted with due care and skill;
(b)	To the extent the works may be found not to have been conducted with due care and skill, whether the Farrells are entitled to damages for costs of rectification.    
JURISDICTION
25	Pursuant to s182 of the Australian Consumer Law and Fair Trading Act 2012, the dispute under the agreement constitutes a ‘consumer and trader dispute’ arising between a purchaser and supplier of goods or services. Under s184 of that Act, the Tribunal has jurisdiction to hear and determine the dispute.  
26	Pursuant to s224 of the above Act, the Tribunal also has jurisdiction to hear and determine disputes involving the application of the Australian Consumer Law (ACL). This includes s60 of the ACL which provides that where a person supplies services in trade of commerce there is a guarantee that the services will be rendered with due care and skill. 
27	In the present case, the services are provided in trade or commerce. It follows that, implied into the agreement between Thompson and the Farrells, is a term that the services are to be provided with due care and skill. A proved breach of the guarantee entitles the wronged party to seek damages pursuant to s236 of the ACL.
WHETHER THE WORKS WERE CONDUCTED WITH DUE CARE AND SKILL
AND WHETHER ENTITLEMENT TO DAMAGES FOR COSTS OF RECTIFICATION    
28	The circumstances surrounding the Farrells’s complaints about the works have been generally set out above. They are also set out in their claim at pages 2 to 5 of the Farrells’s hearing book (Hearing Book).
29	The Farrells also rely on the evidence of Tumminello for a description of what works were allegedly defective. As referred to above, the opinion evidence of Tumminello cannot be accepted as the opinion of a duly qualified, experienced and independent person who has conducted all necessary and reasonable enquiries entitling the Tribunal to receive such evidence as expert evidence. 
30	Nevertheless, whilst the material provided by Tumminello is not expert evidence, it may be considered by me, as the view of another carpenter, with some caution and attention to the weight given to such evidence in my determination of whether the works or some part of them may fall short of the required standard.
31	In considering the claim of the Farrells, it is important to make a clear distinction between a question of costs of rectification and costs of completion. The Farrells claim the cost for rectification. If that is proved they will be entitled to damages for those proved costs. However, it is not open for the Farrells to seek any costs related to completion of the garage conversion to a studio. It is not open because I do not accept the inference urged upon me by the Farrells that the agreement with Thompson was to complete the job as a ‘project’ with some understanding that the cost of the project would be around $10,000.  
32	The Farrells’s course of making an oral agreement for a job on an hourly rate is inconsistent with a course that seeks to agree on a total project with a total cost. If that was the desired course, then a written scope of works for a lump sum or with some other defined cost parameters could have been expected. Indeed, a detailed agreement for a fixed price of the nature that the Farrells later made with Tumminello for a total project is such an example. 
33	Mr Farrell acknowledged in his evidence that perhaps he should have made such an agreement in the first place with Thompson. But that was not the course in fact adopted by the Farrells in respect of Thompson. The oral agreement was not for completion of a project, but to do works as directed from time to time for payment on an hourly basis for works done up to the date of relevant invoices. 
34	My finding on this has added importance. It is that Thompson cannot be taken to have agreed to undertake provision of services beyond those for the hiring out of his skill and labour as a carpenter. On the evidence before me, the oral agreement with the Farrells does not extend beyond hiring out of his skill and labour as a carpenter, such as for the provision of advice or design.
35	The examination required is therefore limited to a determination of whether the works done by Thompson were defective and below the required standard and, if so, the reasonable cost of rectification. Costs of completion are not claimable.
36	The Farrells’s evidence was given by reference to their claim stated in ‘Amendments to Points of Claim’ (pages 2 to 5 of the Hearing Book) and relies for further support on Tumminello’s True Cut Carpentry ‘cost of Re-Do work 14/8/2019’ and its associated cover note (pages 33 to 36 of the Hearing Book). 
37	Each of the defects are now considered taking into account all the evidence put by the parties in the order of the items as referred to in the Tumminello cover note referred to above.
38	The Tumminello cover note first addresses items of cost of rectification materials, some of which are mixed with a plumber’s overall cost of labour and materials. The cover note then addresses separately Tumminello’s cost of labour for undertaking rectification works. For the sake of ease of understanding, I have sought to follow that order below.
39	MATERIALS (INCLUDING PLUMBER CHARGES)  
(a)	Timber door frame on back west wall: It was not denied that the door failed to have an adequate sill. Rectification for defect. Materials allowed	$235.00
(b)	Hot water service – plumber charge for supply and installation: The text messages in evidence support the evidence of Thompson that the size and location of the unit was always a matter for the Farrells. I also refer to paragraph 34 above concerning the limited nature of the engagement of Thompson. A larger unit chosen by the Farrells and installed at a later time is a cost properly for them. The claim of $1,500.00 is disallowed.
(c)	Missing flashing and gap fillers: Filler disallowed. This is a part of finishing the job which Thompson was not allowed to do and which had not been charged. Flashing rectification allowed, consistent with Australian Guide to Standards and Tolerances 2015 (S&T), chapter 8, windows and doors.                                                                                                       Materials allowed: 	$27.95
(d)	Pine lining boards unfinished: The job was admitted as being terminated by Farrell. Works not completed are not claimable where that is a result of the termination and where Thompson has not invoiced for or been paid for such work. I refer to my findings at paragraphs 31 to 34 above. Disallowed.
(e)	Bathroom shower, no trap and rebed – including plumber charge: Rectification allowed for trap and puddle flange rebed consistent with requirements of the building code and S&T. The mode of installation by Thompson is defective. Thompson conceded this part of the claim.  Materials/plumber allowed: 	$407.15
(f)	Weatherboard repairs: Total materials claimed of $102.11 plus GST. This includes incomplete works unable to be completed due to termination and not paid for (as one example, missing boards on back wall). Otherwise, allowed for defective weatherboard works which is demonstrated in pictures including at pages 21 and following showing non alignment and gaps left. Percentage allowed is 80% for works that have been done but are defective. For materials being:	 $81.68   
(g)	Shower tap mixer and outlet – including plumber charge: This includes the cost of the plumber’s labour. Farrell said that the garage contained a shower and sink. The shower had taps. A claim of $280.00 plus GST is made for the plumber’s cost to remove the shower taps and convert for the installation of a mixer tap and relocate shower head outlet. There is insufficient evidence that supports this claim as being within the oral scope agreed and charged for by Thompson. The evidence points to Thompson not having done the conversion for a mixer tap and adjustment of the shower head outlet. Thompson agreement is for labour at an hourly rate, not a lump sum for a defined project. I refer to paragraphs 31 to 34 above. If he has not done the work, has not charged for it and has been terminated, he cannot be held liable. Claim is disallowed.      
(h)	Bathroom rectification: Including removal of blue board (not fit for specified purpose), floor waterproofing demonstrated as inadequate (peeling material picture page 37), consequential rehanging of door. This part of the claim has been proved by the Farrells supported by the photos and by the evidence of Tumminello, which I accept, about manufacturer’s specification for use of blue board. 
Materials allowed:	$666.75 
(i)	Total materials/plumber claim is found at $1,418.53 plus GST of $141.85 being a total of $1,560.38. 
40	LABOUR
(a)	‘Other labour’ is claimed by the Farrells identified in True Cut invoice 1039 as $1,200 (plus GST). 
This labour claim must be adjusted down to reflect a lesser labour component for labour otherwise associated with the use and installation of materials not allowed for the reasons given in paragraph 39 above. The labour in respect of those disallowed materials is disallowed on the same findings and for the same reasoning in making the adjustments below as a percentage of the total labour cost claimed. The proportionate assessment is made in view of all the circumstances on the available evidence required as I am required to do in the absence of an itemised labour cost breakdown. For these reasons, the reduction of the labour claim of $1,200.00 is found as follows:      
(i)	‘unfinished’ pine lined wall referred to in paragraph 39 above:	($150.00)
(ii)    ‘unfinished’ weatherboards referred to in paragraph 39 above:	($200.00)  
(iii)   referred to in invoice 1039 by Tumminello as ‘extra cost’ to the labour of $1,200.00. This appears as a reference to the labour cost related to repair of the kitchen unit, but not included in the ‘Re-do’ invoice 1039. As found, O’Hehir was directly employed by the Farrells. O’Hehir admitted he broke the unit. The cost of labour for reinstallation and repair, which is not identified, if it had been claimed, would not be allowed as it is not due to a want of care on the part of Thompson. No adjustment required;
(b)	Plaster join in ceiling labour is separately claimed at $80.00. The repair and charge were not refuted by Thompson. Allowed: $80.00;  
(c)	Total net labour found as adjusted: $1,200 + $80 – $350: $930.00. Labour found $930.00 + 10% GST: $1,023.00.  
41	In addition to the above claims, the Farrells’s counterclaim includes a claim for costs of excavation of $1,100.00. Farrell gave evidence that additional excavation was required beyond that undertaken by Thompson and that the failure to do so caused him to have to engage a digger to complete the task. 
42	In his evidence and at page 48 of the hearing book, Farrell describes his complaint that the removal of soil around the slab area was good, but the earth was still uneven, way too high all around the site’. According to Thompson, Farrell requested levelling of a site for the building of a shed adjacent to the garage/studio area. He described this as one of the additional tasks requested by the Farrells as the job went along. 
43	This part of the claim I find is reflective of the relationship that existed between the Farrells and Thompson in this dispute. In the Farrells’s mind, certainly according to Farrell’s evidence, they viewed the conversion job as a total project. They viewed it as something that Thompson was responsible to deliver. Yet they did not contract accordingly. Instead they hired a handyman carpenter at an hourly rate with an ill defined oral work scope. 
44	In fact, it was the Farrells who were the owner ‘builders’ in this relationship. It was the Farrells who were responsible for their own outcomes and for overseeing Thompson in his hourly employment. This is heightened in the excavation works. If the Farrells wanted a particular outcome, a particular standard of levelling, a particular volume of soil removed, then they should have been in charge of the works so that Thompson could be directed to the unwritten outcome desired by them.  
45	As I have referred to above in paragraphs 31 to 34, the oral agreement made was not for completion of a project, but to do works as directed from time to time for payment on an hourly basis for works done up to the date of relevant invoices. The agreement did not encompass placing the burden on Thompson for acting as some sort of works manager with all the risks attendant to that role. Such a role that is not usually undertaken on an hourly rate pursuant to an oral work scope. 
46	I find that the Farrells were responsible for achieving whatever outcome they desired in the soil excavation and that it would have been a simple matter for them to oversee the works given their general availability.
47	There is insufficient evidence that the agreement between the parties was such that the outcome delivered by Thompson was in breach of his duty to act with care and skill in the circumstances of the soil excavation. The claim in that regard is dismissed. 
48	The Farrells also claim minor expenses of $337.93. Thompson admits liability to pay for the drill set, Irwin set and bar of $126.73 but denies that he should pay for the straps. He says the straps were left at the Farrells property securing various bundles. There is no other probative evidence for me to not accept this position. Thompson also admits liability for the tipping fee of $78.00, making a total of $204.73. Farrell presented insufficient evidence to prove his claim that there was a $90.00 overcharge on the last invoice. That part of the claim is dismissed.                 
CONCLUSION 
49	On the counterclaim, the Farrells have proved entitlement to costs of rectification for materials of $1,560.38 and labour of $1,023.00, a total of $2,583.38 (including GST). Also proved is that part of the claim for $204.73. The claim for excavation is dismissed. The total amount found for the Farrells is $2,788.11.  
50	The Farrells did not dispute Thompson’s entitled to payment on his unpaid invoice dated 20 July 2019 (other than claiming an overcharge of $90.00 which was not proved). The amount found payable to Thompson is $2,863.96. 
51	Setting off the amount found payable by the Farrells with the amount found payable by Thompson, the net amount that the Farrells must pay Thompson is $75.85.

MJF Sweeney
Member