VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
civil DIVISION
CIVIL CLAIMS LIST		VCAT REFERENCE NO. C1900/2021
CATCHWORDS	
Contract between two welders – the respondent welder performs work for a customer, using the applicant welder as a subcontractor – agreement that the applicant would be paid callout fees plus an hourly rate – dispute as to whether that basis of payment was varied – defects in the work performed for the respondent’s customer – consequences of the defects – applicant held to be entitled to payment of his invoice less a set off of damages arising from the defects.	

APPLICANT	Zafar Iqbal (ABN:36 635 950 611) t/as Weld Master Mobile Welding	
RESPONDENT	Glyn Rowell (ABN:87 851 601 811) t/as Gnr Welding	
WHERE HELD	Melbourne	
BEFORE	Deputy President I. Lulham	
HEARING TYPE	Hearing	
DATE OF HEARING	6 July 2021	
DATE OF ORDER	14 January 2022	
CITATION	Iqbal v Rowell (Civil Claims) [2022] VCAT 50	
Order

The respondent shall pay the applicant $5,666.13, and the filing fee of $217.70 on this Application.

I. Lulham
Deputy President			

APPEARANCES:		
For Applicant	In person	
For Respondent	In person	
Reasons
1	This case was listed for a Fast Track Mediation and Hearing. The parties did not settle the dispute at mediation, and I heard it a few hours later.
2	Prior to the mediation, the parties had served upon each other copies of their relevant documents. They filed them with the Tribunal in the form of various emails before and after the hearing. Some of these documents were in the nature of written submissions rather than discoverable documents. None of them were without prejudice communications exchanged within the scope of the mediation. 
3	At the hearing both parties gave evidence orally, and there were no other witnesses. 
4	Mr Iqbal is a welder by trade, as is Mr Rowell. Mr Rowell is more established in the marketplace and has a client list that he can market to. For some time, the parties have “worked together”, not as partners but in a way which results in them sharing amounts paid by customers. In one sense Mr Iqbal has used  Mr Rowell to market his services, and has been paying Mr Rowell the equivalent of a commission of 20% of the invoiced amount. Customers would perceive that they had engaged Mr Rowell and that Mr Iqbal was one of his workers, either as an employee or a subcontractor. This arrangement between Messrs Iqbal and Rowel was fluid: there was no written or even firm agreement that set the rate of commission or obliged either party to do any number or types of jobs.
5	In this VCAT case, the parties are in dispute about an amount claimed by Mr Iqbal for work performed on an industrial concrete mixer owned by a concreting business. There is no need to identify that business and I will simply call it the “customer”. Mr Iqbal claims $6,525.00. He has issued an invoice in that amount covering work performed on 20-22 October 2020 and 1-16 November 2020, and including six callout fees each of $150.00. Mr Rowell alleges that Mr Iqbal performed work which was defective, and failed to finish the job, which caused Mr Rowell to have to spend a considerable period of time performing rectification work and which ultimately cost Mr Rowell future business from the customer. 
Mr Iqbal’s oral evidence
6	The arrangement between Messrs Iqbal and Rowell began in May 2019. Mr Iqbal mostly did small welding jobs. 
7	In October 2020, Mr Rowell said he wanted to refer Mr Iqbal a job for the customer, and so Mr Iqbal went to the customer’s premises to prepare a quote. Mr Iqbal saw that it would be a big job in the context of his usual work: welding work to be carried out on a concrete conveyor and bin for a fee of around $20,000.00. Mr Iqbal proposed that he receive 80% of the invoiced amount and Mr Rowell 20%. Mr Rowell said he was not interested because the job was too complex. Then he changed his mind and told Mr Iqbal that he would engage him as a subcontractor for this job, and that Mr Rowell would supervise the work. The parties negotiated that Mr Iqbal would be paid $150.00 as a callout fee, plus $150.00 per hour.
8	Mr Iqbal has invoiced Mr Rowell, and been paid for, his first day’s work.
9	After that first day, Mr Rowell negotiated with the customer that Mr Rowell would take possession of the conveyor and bin, and transport it to his premises. Mr Iqbal worked on the bin in accordance with Mr Rowell’s instructions. Mr Rowell consulted with a maintenance fitter named Dave to get guidance on the work to be done. One of Mr Rowell’s instructions was that Mr Iqbal repair the corners of the bin, and Mr Rowell gave him a 6 mm metal plate to fit. For another area of the bin, Mr Iqbal bought a 1 mm plate. Mr Rowell also had his machinist perform some work.
10	Mr Rowell sought to renegotiate the fee. He offered Mr Iqbal $80.00 per hour instead of the previously agreed $150.00. Mr Iqbal counter-offered that each of them receive 50% of the invoiced amount – which represented a significant increase to Mr Rowell from his previous offer of an 80% / 20% split – and that Mr Iqbal would retain the $150.00 callout fee. Mr Iqbal proposed that this offer apply to the six hours of work which he had just performed, but that for future work for the customer Mr Rowell could keep the callout fee.
11	Mr Iqbal did not give evidence that these negotiations resulted in a variation of their agreement.
12	Mr Iqbal says that he took some directions from the customer as to what work to do, and that the customer expressed satisfaction with his work.
13	The next part of the job was work on the conveyor. Mr Iqbal is a welder, not a boilermaker. He worked all day with Mr Rowell, and together they finished that part of the job. The customer then collected the machine on its own truck. It was then that Mr Rowell said he wasn’t happy. 
14	Mr Iqbal told Mr Rowell that he was not available to install the machine back at the customer’s premises, and that Mr Rowell would have to get another worker – Ryan – to install it. 
15	After the machine was reinstalled, Mr Rowell turned on Mr Iqbal and blamed him for alleged defects in the work. Mr Iqbal’s view is that he worked under Mr Rowell’s directions so that if any incorrect decisions were made as to how to carry out the work, the consequences fell on Mr Rowell.
16	Mr Rowell told Mr Iqbal that he was going to invoice the customer $13,000.00, and so Mr Iqbal claims his 50% being $6,500.00.
Mr Rowell’s oral evidence
17	Mr Rowell says that Mr Iqbal’s work was defective, and that when it was time to install the machine back at the customer’s premises, he effectively abandoned the work to play cricket. Mr David Fair was the engineer employed by the customer, and Mr Fair gave instructions to Mr Iqbal in the absence of Mr Rowell. As such Mr Rowell denies giving directions to Mr Iqbal or being liable for decisions.
18	Mr Rowell had never done work on a concrete conveyor of this size.  He told the customer that he did not want the job, but Mr Iqbal spoke to the customer directly and said he wanted to do it.
19	When Mr Iqbal finished his work, Mr Fair said to Mr Rowell that everything was “out” and needed to be rectified. Because Mr Iqbal had left the site, Mr Rowell had to engage another subcontractor to finish the job. Mr Rowell also worked very long hours himself with the subcontractor to finish the project in the agreed timeline of six weeks. At the end of the process, the work was finished satisfactorily, but it was no thanks to Mr Iqbal. Mr Fair deducted $1,700.00 from the price that should have been paid to Mr Rowell. Mr Rowell invoiced the customer and was paid the invoiced sum.
20	Mr Rowell acknowledges that the parties had an agreement where they would split the invoiced amount 50/50, and he says he would have paid Mr Iqbal on that basis had the job not been such a debacle. Mr Rowell says that the 50/50 split came about because, after the initial stage of the work, Mr Iqbal was using Mr Rowell’s premises and consumables which made that hourly rate unsustainable.
21	When cross-examined, Mr Rowell admitted that he had not told Mr Iqbal that his work was defective, but he said the reason for that was that Mr Rowell was not sufficiently qualified in concrete conveyor systems to form a view on his own that the work was defective. It was only when Mr Fair identified the defects that they became known to him. All Mr Rowell could look at, using his own skill set, was the welding. He could not comment on whether the conveyor was straight, but he says that he observed that Mr Fair was furious with the state of the machine. Mr Iqbal had dismantled but not completely reassembled the conveyor.
The parties’ discovered documents
22	Mr Rowell tendered a handwritten document dated “Saturday 21 November” which began with the words, “Fix hopper because of Zafar negligence (can’t bill) installation (can bill)”. The document sets out a list of “costs” including “Zafar $3,500” and “Dave $4,500”, “Glyn wage $3,500” and “Glynn incidentals $1,000”.
23	In this document “Glynn” means Mr Rowell, and “Dave” means Mr Fair.  The document concludes by saying the total of the costs was $25,767.12 and the invoiced sum was $25,980.00, the implication being that Mr Rowell made no money from this job.
24	Mr Iqbal has pointed out that no invoices or other objective pieces of evidence support the figures in this list of “costs”, which also includes “transport”, “materials”, “consumables”, and “yard” all of which would be expected to be reflected in invoices.
25	In a document from Mr Rowell explaining the significance of his discovered documents, Mr Rowell wrote that “Zafar $3,500” referred to the amount paid to Mr Iqbal for the earlier parts of the job (which in the document Mr Rowell calls phase I and phase 2), and as such it is a payment made for work in respect of which there is no dispute.
26	Mr Rowell wrote that had Mr Iqbal done the last stage of the work properly, he would have been entitled to $2,500.00. I take this to mean that Mr Rowell would have invoiced the customer $5,000.00 for that last stage of the work, which the parties would have split 50/50.
27	Mr Rowell did produce a document which verified that the customer insisted on a deduction of $1,717.74 from Mr Rowell’s charge for the work. In an email dated 3 December 2020, the customer acknowledged receipt of Mr Rowell’s final invoice for $5,460.00 and said that the customer had contributed 8 man-hours to the rectification work. The customer said its cost was $1,717 .74 and that it would be fair to deduct that from Mr Rowell’s invoice, to result in a payment to Mr Rowell $3,742.26.
Analysis
28	The parties were self-represented, which is common in small claims because the Tribunal is not empowered to award costs and this makes engaging legal practitioners uneconomical. I have no doubt that the parties’ evidence would have been given more thoroughly and in a better and more logical sequence had they engaged legal practitioners.
29	The Tribunal can only decide cases on the basis of evidence.
30	My conclusions on the basis of the evidence are as follows:
a)	Mr Iqbal was Mr Rowell’s subcontractor in the performance of work for the customer. Accordingly, Mr Rowell was entitled to be paid by the customer, and Mr Rowell was obliged to pay Mr Iqbal in accordance with their agreement.
b)	Because Mr Iqbal has been paid for his first day’s work in respect of the customer, we may put that day aside.
c)	The parties’ agreement was that Mr Rowell would pay Mr Iqbal a call out fee of $150.00, plus $150.00 per hour. Mr Iqbal says that he did not agree to vary that basis of payment. He said there were negotiations over changing the arrangement to an 80/20 split or a 50/50 split of the sum which Mr Rowell would invoice the customer, but he did not give evidence that those negotiations resulted in a variation. Mr Iqbal’s invoice to Mr Rowell, dated 20 October 2020 in the sum of $6,525.00 is expressly calculated as being for several call out fees each of $150.00, and labour at $150.00 per hour. In those circumstances I take Mr Iqbal’s statement in evidence that as Mr Rowell told Mr Iqbal that he was going to invoice the customer $13,000.00, that Mr Iqbal claims his 50% being $6,500.00, to be a recreation of sorts which seeks to show  the claim for $6,525.00 to be fair.
d)	Mr Rowell says that the arrangement was varied, to the effect that the parties would have a 50/50 split of the amount Mr Rowell invoiced the customer. There is logic behind Mr Rowell’s desire to change the arrangement, in the sense that the $150.00 hourly rate was to cover Mr Iqbal’s work but was not intended to require Mr Rowell to let Mr Iqbal use Mr Rowell’s facilities and equipment without a financial adjustment in Mr Rowell’s favour. But it does not necessarily follow that the parties’ agreement was varied. There is nothing in writing from Mr Rowell’s side to verify a variation of the agreement.
31	On the basis of the evidence, then, I find that the agreement was not varied, and that Mr Iqbal was entitled to invoice Mr Rowell at the rate of $150.00 an hour.
32	A subcontractor is not devoid of obligations to its principal. Mr Iqbal cannot assert that complaints by the customer are solely Mr Rowell’s problem. Equally though, Mr Rowell cannot hold Mr Iqbal solely responsible for defects in the work performed for the customer, given that Mr Iqbal and Mr Rowell worked on the customer’s industrial concrete mixer together and Mr Rowell had some control over Mr Iqbal’s work.  
33	I accept Mr Rowell’s evidence that the customer deducted $1,717.74 when paying one of Mr Rowell’s invoices. Some photographs were tendered in evidence which undoubtedly show rough welds, and I think it more likely than not that the customer was justified in deducting that sum. Accordingly, I conclude that Mr Rowell suffered damages of $1,717.74 under his contract with the customer. Mr Rowell’s other evidence of additional expenses and losses, based on his handwritten document dated “Saturday 21 November” which is frankly just a list of round figures and is not supported by other objective evidence, is not persuasive on the question of whether Mr Rowell suffered additional damages because of Mr Iqbal’s defective work.
34	On the basis that Mr Iqbal and Mr Rowell worked on the customer’s industrial concrete mixer together and that Mr Rowell had some control over Mr Iqbal’s work, I find that each of Mr Iqbal and Mr Rowell should bear one half of those damages of $1,717.74, being $858.87. It follows that Mr Rowell must pay Mr Iqbal $6,525.00 less $858.87, a total of $5,666.13. 
35	Because Mr Iqbal substantially succeeded in the proceeding, Mr Rowell must also reimburse to him the filing fee of $217.70 on this Application.

I. Lulham
Deputy President