ACT CIVIL & ADMINISTRATIVE TRIBUNAL

KELLY & ARGALL (Civil Dispute) [2011] ACAT 75

XD 1294 of 2009

Catchwords: CIVIL DISPUTE – commissioning work to redesign and reconstruct garden – difference between work commissioned and work actually performed - did any work that was not authorised carried out because it was necessary? Instruction to do work outside the scope of what was agreed to- valuation of work carried out - counterclaim

List of legislation: ACT Civil and Administrative Tribunal Act 2008

Tribunal: Mr P.R Thompson, Member

Date of Orders: 25 August 2010Date of Reasons for Decision: 22 November 2011

AUSTRALIAN CAPITAL TERRITORY )CIVIL & ADMINISTRATIVE TRIBUNAL )

XD 1294 of 2009

BETWEEN:

ALBERT JOHN KELLYApplicant

AND:

MS C ARGALL Respondent

TRIBUNAL: Mr P.R Thompson, Member

DATE: 25 August 2010

ORDER

1 Judgment for Applicant in the sum of $5,000.00

2 Respondent be allowed 28 days to pay.

3 There is no order as to costs.

4 The counter claim is dismissed.

………………………………..Mr P.R Thompson

Member

REASONS FOR DECISION

1. On 23 October 2009, Mr Albert John Kelly of Kingston in the ACT lodged a

debt application in relation to a civil dispute in the ACT Civil and

Administrative Tribunal (ACAT), naming Ms C Argall of O’Connor as the

respondent.

2. The amounts claimed by the applicant were as follows:

Fee for commencing proceedings $115.00Amount of debt claimed $10,000.00

Total $10,115.00

3. The list of attachments was as follows:

“A” Brief version of summary of Claim

“B” The preliminary estimate, describing in general terms a program of work, forming the basis of the original agreement

“C” The schedule of fees and Charges used by Ambience. This document presents approach to projects and clearly defines the difference between a quotation and an estimate as use [sic] by Ambience

“D” E-Mail confirmation of work to be undertaken

“E” A written list of work requested by Ms Argal [sic]

“F” Invoice and notes sent to Ms Argal [sic] on 7 July 2009

“G” Invoice to Ms Argal [sic] on 7 august 2009

“H” Offer of compromise by Ambience

(Note: I have not corrected the miss-spelling of Ms Argall’s name by Mr Kelly in any of the documents lodged by him)

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GROUNDS OF APPLICATION

4. Mr Kelly’s ‘Grounds of Application’ are set out in full hereunder:

A brief summary is at Attachment “A”.

Ms Argal [sic] approached Ambience Garden Design in March 2009 regarding the redesign and reconstruction of her garden at (address deleted) O’Connor ACT.

I visited the site on several occasions and discussed the generalities with her. I was accompanied once or twice by a sub contractor. Ms Argal [sic] was unsure of the design she wanted but stated that she wanted it to be “smich” and “well built”. She further stated that she had had trouble with the rear elevated deck and the pool (approx 14 m x 3 m) surrounds and soil stability. She was clear that in the front garden she wanted a new driveway, an off street parking area with access to the front door, some sort of stone walls and modern gardens. She wanted the rear gardens to be cleaned up, to be wilder in nature and more use made of the space and existing structures. A significant problem was the rear deck, which while solid had significant problems.

During these initial conversations I discussed with her the difficulties inherent in the front garden owing to the block having 4 m (approx) fall from the public footpath to the front wall of the house. Similarly, I explained that the same or bigger fall in the back yard created a further set of problems. Ms Argal [sic] indicated that she understood the site was a difficult one.

The philosophy of Ambience’s approach was outlined during these meetings and it was made clear to Ms Argal [sic] that conceptual sketches, not detailed plans, were the preferred development mode with more detailed plans used only if necessary. Ms Argal [sic] accepted this method of proceeding, but indicated that she would want to do a detailed general design of the front garden after the preliminary excavations and structural work on the front garden had been completed. I undertook to work with her in this process.

Arising out of these discussions Ms Argal [sic] was given two documents by Ambience:

A preliminary estimate, describing in general terms a program of

work. (Attachment B)

The Schedule of Fees and Charges used by Ambience (Attachment C).

Ms Argal [sic] indicated that she understood the difference between a quotation and an estimate as used by Ambience, and that she was

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proceeding on an estimate basis, on the ‘cost plus’ model set out in Attachment C.

Ms Argal [sic] engaged Ambience to commence the program of work during the week ended 5 April, stipulating however that the elements of the program relating to the rear deck were not to be undertaken. The details of the agreement to commence work are set out in attachment D. Following her receipt of that email I met with Ms Argal [sic] and Chaminda the stonemason. At that meeting she further requested that work be undertaken on the front deck but insisted it must not interfere with access to the front door. She gave specific instructions that the front deck was to have steel supports and if possible steel bearers and joists. I told her that steel supports would be expensive. She also wanted me to investigate the plastic decking. I told her that this would be an expensive option. She made several other requests for the front deck which she was also informed would be expensive. By the end of the conversation she had agreed to a proposed deck which would be twice the size of the deck proposed and cost estimated in Attachment B and we had agreed that Ambience would proceed with installing the steel supports (except one row to allow access to the front door) and other ground work as far as possible pending her return and decisions regarding plastic decking and steel bearers and joists which affected heights and fixing methods. She also forbad the normal attachments of a timber bearer to the house front along the 10m length off the deck again adding severally hundred dollars to the cost in extra steel supports and labour.

During a further conversation on or about this time whilst standing in the back yard, Ms Argal [sic] also asked for paths in the back garden. Ms Argal [sic] requested formed paths which were not included in the cost estimate in Attachment B, and subsequently paved paths. She was informed that the more formal the path the more expensive and that paved paths would be expensive.

Ms Argal [sic] also gave specific instruction that work was to be done to the extent necessary to prevent the subsidence problem around the pool. She subsequently asked for additional works to those I found necessary to be done. This again added significant cost.

Conversations about the work were held over the period of approximately a week before Ms Argal [sic] departed for an overseas trip. She gave instructions that work was to commence as detailed in Attachment C and as necessary in addition as per the conversations outlined above. Ms Argal [sic] knew that structural work was being undertaken on the garden and consented to that work as a Bobcat was at the site well before she left the country. She was also very clearly told that there was a financial imperative requiring all structural work to be done in a logical sequence from the back to the front.

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Ms Argal [sic] then went on her holiday and in her absence works as per the agreement in Attachments B, D and the later conversations were undertaken.

Work continued, a further invoice was issued and again Ms Argal [sic] agreed to pay.

In late May and prior to proceeding further with bearers and joists for the deck, Ms Argal [sic] accompanied me to the timber merchant and the paver merchant. She was informed that the plastic decking would cost twice as much as good quality timber, and that steel bearers and joists would be extremely expensive. Prior to ordering the timber I stood with her on site amongst the in place steel uprights and specifically asked her if she wanted to continue with the 4 meter wide deck as relatively little would be wasted if we reverted to a 2 meter wide deck at that point. She asked that we continue with the 4 meter wide version.

On or about the 8th of June Ms Argal [sic] brought her payments up to $35,000. A further $3,565 was outstanding contrary to the original agreement that there would always be some payment in advance. Shortly after this, she gave me written lists of work to be undertaken (one is Attachment E). The items on this list included some work envisaged in Attachment B and the conversations which built on the plan, and additional work never before contemplated – inter alia, removing agapanthus from the pool fence, repairs to that fence, removing wisteria, digging a concrete sleeper retaining wall around the pool fence and providing camellias, moving and installing her clothes line, constructing steps down to the lowest level. Ms Argal [sic] asked for the work on the written lists to be done immediately, without settling the balance of the account. I gave her a rough estimate of the cost to do these works and she directed that the work be done. The work was undertaken and the estimate was accurate.

She also asked for a quote to do all outstanding work outlined in the original proposal not included on her written lists, plus significant additional work never contemplated in the original estimate. This additional work was a formal paved area from the front door right up to the public path at the front of the house and extensive level changes in the driveway. I gave her a full formal quotation for that work (plan and quote is available). Ms Argal [sic] did not want to proceed on that basis.

Ambience sent an invoice for $12,000 to Ms Argal [sic] on 7th July (Attachment F). This invoice related to the unpaid balance of $3,565, the work undertaken in accordance with Attachment D and in relation to the deck. At this point the work in the back yard was substantially complete as per her request. She was advised that the watering system was installed but not ready for use for a variety of reasons pending planting and mulching. Ms Argal [sic] has only paid $5,000. Ms Argal [sic] has refused to pay any more.

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Ms Argal [sic] terminated her contract with Ambience by telephone on or about 24 July.

On 7 August a further invoice was sent to Ms Argal [sic] for $13,000 (Attachment G). This invoice was for the $7,000 outstanding, plus $2,000 for consultations with Ms Argal [sic] that had not been charged previously, $1,000 commissions on materials that had not previously been charged and $3,000 for loss of profits on the works that she had originally contracted to have done but are not to be done now she has unilaterally terminated the contract without cause.

Therefore Ambience is claiming payment of the $10,000 of the outstanding invoices

Ms Argal [sic] has had the work she initially requested done at the cost it was estimated and had significant additional requested work done at a reasonable cost. She has also been given formal quotations for all the outstanding work from attachment B at comparable figures to the estimates originally provided. All work has been charged for in accordance with the Schedule of Fees she was given during the initial negotiations.

ATTACHMENT A

5. Marked Attachment A was the applicant’s ‘Brief Summary of claim. That

document is also set out hereunder as follows:

As part of the original negotiations Ms Argal was given two documents;

A preliminary estimate, describing in general terms a program of work.(Attachment B)

The Schedule of Fees and Charges used by Ambience. This document clearly defines the difference between a quotation and an estimate as used by Ambience. (Attachment C).

The philosophy of Ambience’s approach was outlined during these meetings. Ms Argal [sic] actually engaged Ambience during the week ending 5 April, she agreed to proceed on a cost plus basis. She stated that work on the rear deck was not to proceed.

The issue is that Ms Argal [sic] entered a contract for work to be done on a cost plus basis. The work has been done and the materials etc supplied as per the contract. She also accepted and paid invoices clearly charged on that basis. Ms Argal [sic] has also unilaterally terminated that contract without just cause with various things unfinished. This is the basis of the claim. It can be demonstrated also that the original elements of the project were on estimate.

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From another approach, the problem is that Ms Argal [sic] has continually requested or authorised work, on the same cost plus basis, clearly in excess of that outlined in the preliminary estimate.

Ms Argal [sic] was given a preliminary estimate of $59,000. She has continually added extra work, without that extra work her project is closely on or under estimate. Recently Ambience gave Ms Argal [sic] a firm quotation to complete all work she now wants done. This figure is $87,000 including work already done. Given that she has ended Ambiences engagement mid way through the project, the following analysis may assist in sorting through the details. Working from $59,000 to the $87,000 to demonstrate that work done from the original specification is below estimate.

The front deck is twice the original size and a higher structural standard than in the preliminary estimate adding $6,000.

In place of a “path” (approx 5m x 1.2m) from the off street parking area she has requested the creation of a formal area approx 7m x 6m including paving of an additional 5m x 3m area plus linking paths and a series of formal steps from the front door to this area using expensive pavers when the original estimate included a “path”. This is an additional cost of approx $7,500. ($8,500 calculated cost for quote minus $1,000 for original path)

Additional work in the back garden around the pool etc plus additional back steps costing around $2,500 all up was specifically requested.

In lieu of the informal paths not actually mentioned in the preliminary estimate she initially asked for formed paths and then for some to be paved and finally for all paved. She was not concerned regarding the cost as she wanted whatever is the easiest to keep clean. This is 120 sq m of paving and steps on a steep site. An extra $9,000 is very reasonable (for supplying pavers at $40 per sq m and laying, $12,000 would be acceptable but a little high)

There are other minor additional works totalling around $3,000

This all adds up to $28,000 of additional requested work, and when taken away from the new estimate of $87,000 leaves $59,000 as the cost of the original work or on estimate.

ATTACHMENT B

6. Attachment B to the application was a typed advice addressed to ‘Cathy’

containing some “suggestions and costings for the reconstruction’ of

Ms Argall’s garden. Apart from the cost estimate set out hereunder, I have not

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reproduced that document in full in these ‘reasons’ for my decision. I have

however referred to or reproduced certain parts of the document later on when

dealing with specific issues.

Total Cost Estimate

Front garden and Driveway $40,000Watering system $ 5,000Mulching $ 2,000Rear Garden $ 4,500Pool area and deck $ 7,000Folly $ 3,000The Link garden $ 3,500

Total $65,000

7. At the foot of Attachment B Mr Kelly had included the following comment.

Comment. The total cost as derived from the summation of the elements accords with my general overall estimate based on similar size redevelopments. There are substantial savings to be achieved if the job is done as a whole, even if it is staged over an extended period. Various tasks need to be completed before others are started (e.g. removal of concrete in link garden area before driveway and carport work).

ATTACHMENT C

8. Attachment C to the application was a document headed ‘AMBIENCE

GARDEN DESIGN’ and was a schedule of fees and charges. Part of the

document is set out hereunder:

Ambience is happy to provide a written quotation but we prefer to provide an estimate of probable costs under the “cost plus” approach. In both cases the figure is based on the schedule of fees and charges below.

A quotation is a fixed price for the specific works. Any changes to the original agreed specifications will require a fixed price to be quoted for the changes.

At Ambience we do not regard ourselves as traditional landscapers; we prefer to work with our clients over a period allowing ongoing thought, observation and inspiration to modify original plans and achieve excellent results from the client’s viewpoint within the context of a specific realistic budget and overall concept. We find that the “Cost plus” approach, which

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simply provides for the client to pay only for all work and materials supplied, is more suited to this philosophy.

A “cost plus” estimate will normally be substantially lower than a quotation; as the estimate does not include an allowance for things going wrong, unexpected problems, plant losses, and general contingency etc which is included in a quotation.

9. The document contained a detailed schedule of fees, including various hourly

rates, labour charges and the methods used to charge for plants, materials and

other services.

10. The final paragraph of that document contained the following disclaimer:

‘All work carried out with care. When work is on a “cost plus basis” any damage caused by third parties is a matter between client and that third party’.

ATTACHMENT D

11. Attachment D to the application was an e-mail from the applicant dated Sunday

5 April 2009, addressed to Ms C Argall setting out the work to be undertaken,

with certain exceptions. I believe that is important to set out that document in

full. The contents were as follows:

Hi Cathy,

As things now stand the following things are about to happen.

1. Chaminda the stonemason will be over on Monday afternoon to see me (and meet you if possible), and look at the site and the stone. I do not have a time as yet, but I expect it will be towards dusk after he finishes work. I will let you know.

2. Mike Bayley [sic] and his crew will be on site on Tuesday to remove small trees and as much shrubbery as possible. I will be there as well.

3. The bobcat will be on site on Wednesday at around 8 in the morning. It will be there all day and possibly some of Tuesday. The back garden will be cleared and shaped and the front will be as well to the extent we discussed. There will also be soil, sand and crusher dust arrive at various times to be distributed as it will not be possible to store much material or have delivery trucks easily access the site.

4. Heath, Fiona and I will be working on site.

My understanding from our conversation last week is that I am to proceed with all the work discussed in my outline except as follows,

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1. Work on the front garden is to be restricted to clearing and general surface shaping as we discussed and sketched. The final disposition and composition of walls, gardens, etc will be worked out at a later time.

2. The drive way is to be left intact for the time being.

3. Work on the rear deck is not to be started.

4. There is to be no alteration to the level of the carport floor and access to the back is to be maintained.

Other matters agree were,

1. the chook yard and structure are to go.

2. pavers saved from the area behind the carport are to be used as a floor in the Folly and as path through the rear garden.

3. two vegi gardens constructed of concrete sleepers are to be built on the northern side of the folly.

4. provision for 3 or 4 trees to be espaliered on the northern side of the folly

5. chains will be used as the climbing frame over the folly.

I will be in Bowral until 2 ish on Monday.

(Mr Kelly’s banking details omitted.)

Regards John.

ATTACHMENT E

12. Attachment E to the application was an unsigned handwritten note headed

‘Back Garden’. According to the applicant it was, “A written list of work

requested by Ms Argal”. The contents of the note, as far as I can decipher, have

been set out here under:

Build steps to lemon (?)Finish pool paving & pathsPave to clothesline with pool pavers(any spares ----> stepping stones to flat rock)Clean up pool fence gardenReplant existing plants & provide plans for additional plantings

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No further work on folly except for plantings Pave path at link garden with existing pavers & bricksUse excess soil on mounds for back garden & fence pool

ATTACHMENT F

13. Attachment F to the application was a tax invoice addressed to Ms C Argal [sic]

dated 7 July 2009, together with a two page undated type -written note

addressed to the respondent. The contents of the invoice were as follows:

Description and quality of Service

(Services and Materials supplied from 4 April to 3 July inclusive, 2009

As per schedule supplied 1 June 2009 $31,758.00 As schedule supplied 9 June 2009 $ 6,807.00 As per schedule $ 8,400.00

Amount payable: $46,965.00Payments received $ 5,000.00

$10,000.00$10,000.00$10,000.00

Total Amount now Payable: $11,965.00

14. The remittance options set out at the bottom of the document have not been

included.

15. The type written note was as follows:

Cathy,

The purpose of this note is to set down my understanding of our discussion of Monday 29 June and to provide a program for the rest of the project. A Quotation for this work is nearly complete and will be forwarded as soon as I have established costs associated with the revised driveway excavations. Given that the rest of the work is to be done on a Quotation basis, I would appreciate full payment of the balance owing.

(1) Current workFriday 3 June we finalised current work.

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Specifically, the watering system in the back yard was finished (except some ends on the vegie garden), Camellias planted as requested around pool fence, agapanthus and other dug up plants be prepared for sale over wintering (some shrubs were planted), the valves and controller for the watering system in the front yard were installed. We also generally cleaned up and removed rubbish. I do not propose adjusting soil levels on the link garden at this time.

(2) Agreed mattersPlanting will be left until late September. Planting will be generally along the lines of sketch we prepared. Link garden planting to provide a natural transition between front and back. Booking to Chaminda for latter part of July to be kept. Side walls of top retaining wall steps to be stone. I am to prepare a quote for the front garden by area and in total. The carport is to be removed and the drive way is to follow (in general terms) the two 1m drops and to level out in the current carport area, and the link path be adjusted to smoothly mesh with the new level of the carport floor. The general overall plan has been agreed (my version attached will follow with quotation) except for the exact layout of the driveway.

(3) ProgramThe logical and achievable program is as follows

a) Construct retaining wall, 20 to 31 July.b) Construct steps and pave from the front door to carpark area,

fill in soil between carpark landing area and deck, 20 to 31 July.

c) Pave and generally construct carpark and all other areas on northern side of driveway and provide off street parking, 1 to 17 August

d) Supply plants, complete planting for entire garden (B&F) ande) Remove carport, construct driveway, 22 September to 15 October.

Quotation will be provided for each of the above.

For your records, the stations and wiring colour codes for the watering system in the back yard are as follows:

Station 6 red All fences and fence side of link gardenStation 5 green Camellias around pool and rest of linkStation 4 yellow Vegie GardenStation 3 blue Between path and pool wall (clothes line area)Station 2 white Summer garden and steep bankStation 1 brown Spare (connected and wired to controller)

Station number 1 is the closest to the tap.

Regards

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John

ATTACHMENT G

16. Attachment G to the application was a document addressed to the respondent

headed “TAX INVOICE and FINAL DEMAND”. The date of issue of that

invoice was 7 August 2009.

For completeness and for reasons I will address later on, the body of thatdocument is also set out hereunder as follows:

Description and Quality of Service

(Services and Materials supplied from 4 April to 29 July inclusive, 2009)

Services provided as previously invoiced $46,965.00Revised charges to bring mark ups to schedule $ 1,220.00Design, consultancy and other services $ 1,925.00Loss of profit on balance of original contract $ 3,000.00

Amount Payable: $53,110.00

Payments received $ 5,000.00

$10,000.00 $10,000.00 $10,000.00 $ 5,000.00

Total Amount now Payable; $13,110.00

(GST included in account $4,828.20)

ATTACHMENT H

17. Attachment H to the application was an e-mail dated 26 July 2009 from the

applicant to the respondent together with a two page typed document headed

“Without Prejudice”. These two documents were described by the applicant as

‘Offer of compromise by Ambience’.

18. I was however interested in the first paragraph of that e-mail, where the

applicant referred to the respondent terminating the contract between the parties

and that no specific reason had been given.

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19. On 11 December 2009, the respondent Ms Catherine Argall lodged a response

and counterclaim, against Mr Kelly, claiming an amount of $10,000.

Attachment 1 to her response was a 26-page document headed “Grounds for

disputing claim”. The first 5 pages contained a detailed statement from

Ms Argall in which she fully set out her grounds for disputing any liability and

the 6th page contained the details of her counterclaim.

20. In the interests of fairness and for completeness, those two document are

reproduced in full hereunder and were as follows:

Grounds for disputing claim

A. MISREPRESENTATION

A.1. Mr Kelly made representations in writing in his proposal (Appendix 1.1 - highlighted comments) and orally that the reasonable costs of undertaking a range of works was $65,000 or $59,000 excluding repairs to the back deck. The latter sum included $40,000 for the front garden, its watering system $2,500 and mulching $2,000). The balance of $14,500 was for the back garden involving a tidy up with two enhancements, namely the folly and the link garden.

He was clearly aware of my priority being the front garden as reflected in his proposal. At the outset he was also advised that my overall budget was $60,000. This was reiterated on a number of occasions and is evident in Mr Kelly’s proposal.

A.2. Mr Kelly claims he had a contract to proceed with all work except repairs to the back deck. In response to Mr Kelly’s proposal of 1 April 2009 and as he was anxious to start work while I was away, I agreed orally that work could proceed on the back garden on a labour and materials basis. This was a straightforward set of works as reflected in Mr Kelly’s proposal and in the estimated costs.

In addition, I was subsequently persuaded to allow Mr Kelly to undertake excavation work on the front garden and some preliminary work on a front deck based on his representations that this would result in cost savings.

There was no contract, oral or otherwise, to continue beyond this. Continuation was conditional on Mr Kelly providing plans for what he had in mind in his proposal for the front garden. These were to be provided on my return in late May. (Plans were never provided.)

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A.3. Mr Kelly claims that I asked for a range of additional work and that he advised me that there would be additional costs. He did not. Rather, he advised that his estimates were adequate to encompass detailed design. His email of 5 April 2009 (his attachment D) outlining what was agreed confirms this – there is no mention of additional costs nor was there in any conversation we had. I had no reason to believe there would be additional costs as the work was straight forward and involved the reuse of existing paving materials. Furthermore, Mr Kelly asked for an initial payment of $5,000 which he felt adequate for work to be done while I was away for a period of six weeks.

Had he advised of additional costs, I would not have agreed to proceed with any work until my return and the provision of detailed estimates. In fact I would not have agreed to any work on the back garden as my intention was always to remedy major problems in the front garden. It was only after Mr Kelly suggested that a tidy up with a few small enhancements at a cost of around $10,000 would make a real difference, that I agreed to his proposals at all.

It was clear on my return that Mr Kelly had undertaken work which had not been agreed and that costs were well beyond the agreed budget for the back garden. Moreover, work had been undertaken in such a way that most areas were unfinished. I immediately sought from Mr Kelly a review of all costs to that time and a revised cost to complete.

These were provided on 2 June 2009 showing costs of $27,000 - $27,700 and $68,000 - $74,000, respectively (Appendix 1.2). The latter included reductions to the original estimates for some items which were clearly not realistic. I expressed alarm at the costs both incurred to date and estimated. Mr Kelly sought to justify both to me but I remained unconvinced.

I immediately sought to limit further costs (Mr Kelly’s Attachment E) to complete work under way and again to get the plan for the front garden. The latter never eventuated, so I was obliged to produce one myself in order to get a fixed quote to finish the work. The ‘quote’ eventually came in at around $94,000 but still included some elements which were estimates.

By this time I had no faith in Mr Kelly’s representations or his ability to deliver. I felt very let down as well as significantly out of pocket. Actual costs for the incomplete back garden exceeded $30,000 (Mr Kelly claims $40,000), compared to the estimated cost of $14,500.

A.4. In the course of seeking to resolve our dispute in July 2009, I was advised that Mr Kelly had told contractors working on site on Day 1 that the job was worth $100,000. (I note this is very close to the final estimate provided by Mr Kelly.) This indicates to me that from the

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outset .Mr Kelly intentionally sought to misrepresent and/or deceive me as to costs. There were at least two witnesses to that discussion.

B. NON DELIVERY – flawed execution / unauthorised work

B.1. Photographs taken of the site after work was claimed by Mr Kelly to be “completed” are included at Appendix 1.3. This is the work for which Mr Kelly now claims $50,000. Approximately $40,000 (compared his estimate of $14,500) of that sum relates to the back garden. Mulching was undertaken by me as Mr Kelly did not think this was necessary. At the same time I paid for work done to be done to complete the back irrigation system and remedy defects in it. I have subsequently paid to have the front garden completed, including the unfinished front deck.

B.2. Key elements of the proposed back garden “enhancements” were not delivered (folly, plants ($600 worth were provided out of the $3,000 included in the original back garden estimate).

B.3. Mr Kelly undertook work in my absence that had never been discussed including steps to the pool gate and retaining wall to folly area. He has stated that these became necessary. These involved major expenditures which he was not authorised to undertake. He gave priority to this work over agreed work during my absence.

Other work in the proposal had begun but was either more extensive than proposed and /or significantly unfinished necessitating additional work, e.g. paving to clothesline had been removed but not replaced; extensive pool paving had been pulled up, not replaced and with damage to the retaining edges; paths had been constructed but not finished. I believed at the time that I had no option but to continue to complete what had been begun but sought to limit costs, including cutting back on the enhancements promised as part of Mr Kelly’s proposal.

B.5. Work on the front deck was at a stage where it had to be finished. Mr Kelly estimated this would take one week – it took three to four.

Note: I was ambivalent at best about another deck given maintenance issues already experienced with the back deck. However, I agreed to a 4 metre wide deck (which eliminated the need for an adjacent path). This is described as 2 to 3 metres in Mr Kelly’s proposal (33% larger in the June review of costs) which also included a “near disabled” standard path adjacent which would not have been required with the extended deck. Overall the cost should have been roughly the same and not as Mr Kelly claims a major reason for cost increases over his original estimates.

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At no time did I specify steel supports. Rather, because of my ambivalence about another deck, Mr Kelly made very strong representations about the importance of the deck and his building standards and said that the deck would not require maintenance for 25 years or more. I relied on his representations in agreeing to initial work on the front deck.

COSTS

C.1. My claim is that Mr Kelly deliberately misrepresented the integrity of his estimates, resulting in cost increases that are unacceptable by industry standards. He has understated the costs by a factor of more than 100% based on what I have paid to date and more based on what he now claims.

He has undertaken unauthorised work and scheduled work in a way to maximise costs ie unauthorised work ahead of agreed work; and has had no regard to his own proposal or my stated budget and priorities.

My estimate is that unauthorised work has resulted in expenditure of more than $20,000. This sum makes no provision for defects to be remedied, costs to complete the back garden and front deck and duplicate costs in contracting completion of the front garden.

C.2. Mr Kelly has now provided 4 different final costs:

a. Based on costs provided in schedule of 2 June 2009, and subsequent invoices, total costs would be $42,207 or $42,907.

He has not explained the difference between this and invoiced costs.

b. Based on final invoice of 7 July 2009, total costs charged were $46,965. c. Based on final demand of 7 August 2009, $53,110. Note: includes increases in mark up, design consultancy not

provided and on loss of profit for work not commissioned. d. Based on this claim, $50,000.

DISPUTE RESOLUTION

D1. As soon as I became aware of escalating costs, I discussed my concerns with Mr Kelly and I sought to limit additional costs, including cutting back on work included in the original proposal. I also asked for a fixed price quote to finish the front garden. Mr Kelly was largely unresponsive to my concerns believing all costs could be justified and that I should be delighted with the result achieved.

During this period Mr Kelly was very difficult to contact as he was either in New Zealand or Sydney. I sought advice from the Masters Builders Association and Fair Trading ACT on how I might resolve

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the dispute. The advice was to seek an independent valuation of work. I proposed this in a telephone conversation with Mr Kelly on 22 July 2009, but he would not hear of it. Rather he continued with his intimidating approach (Appendix 1.4). My response (Appendix 1.5), outlined my concerns. The only response I received was his final demand and email of 8 August 2009, adding further costs for design (not provided), markup (no justification), and lost profit (for work not commissioned or provided) (appendix 1.6). I saw this last email as a final threat aimed at inducing further payment. At no time did Mr Kelly attempt to discuss his claims with me after our telephone conversation of 22 July 2009.

D.2. Mr Kelly has made no genuine attempt to resolve our dispute.

His offers to reduce future profit margins and contain costs to estimates for future work were not credible given my experience to July 2009.

His threats and bullying tactics have not been appropriate and are unprofessional.

D.3. I independently sought advice as to the value of the work done (as distinct from commissioned) and was advised that it was conservatively about $40,000. I was advised this included generous upward rounding in Mr Kelly’s favour. In an attempt to resolve our dispute, I paid Mr Kelly $40,000. At no time did I believed [sic] that this sum was legitimately owed or represented value, but rather I wanted to end the saga and move on to find another contractor to complete my garden.

(Signature)Catherine Argall.11 December 2009

(Note: There was no paragraph numbered B.4.) COUNTER CLAIM

I have paid Mr Kelly $40,000 to date which is significantly more than I believe is fair given the representations he made, work commissioned and the work actually performed.

I was prepared to do this to resolve our dispute and sought independent advice to this end.

I also sought to contain costs immediately I was made aware of over-runs.

In light of Mr Kelly’s claim, I now seek to claim reimbursement of monies paid in good faith to the value of $10,000 as damages for

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misrepresentation, defective and unauthorised work and work promised but not delivered.

(Signature)Catherine Argall11 December 2009.

21. Then followed 6 appendices to attachment 1, which I have set out below.

Appendix 1.1 – Mr Kelly’s attachment “B”.Appendix 1.2 – Estimated costing schedule.Appendix 1.3 – 12 photographs.Appendix 1.4 – E-mail from applicant dated 26 July 2011, together with a document from the applicant headed “Without prejudice”Appendix 1.5 – E-mail from respondent to applicant dated 29 July 2009.Appendix 1.6 – E-mail from the applicant dated 8 August 2009 headed “Final Demand” together with tax invoice for $13,110.00.

22. It is important to note that the e-mail of 29 July 2009 (Appendix 1.5) from the

respondent sets out the following description of work claimed to be either

unfinished or defective, but also contains an acknowledgment of an independent

evaluation of the work performed. The relevant paragraphs were as follows:

“Firstly though as a sign of good faith, I have today transferred a further $5,000 bringing to $40,000 total payments made. This amount is based on independant [sic] advice I’ve received on the value of work done. I’ve been advised this is a conservative figure in your favour. It does not include any provisions for correcting defects e.g. unfinished, incorrectly piped and laid irrigation which I’ve already had to remedy; unhaunched and exposed metal edges to paving; unfinished deck, including your advice of defect on drive side.

Nor does it include discounts for decisions you made while I was away or ongoing inconvenience because of the delays.”

23. On 20 January 2010, notices were sent to both parties advising that a conference

before the tribunal had been set down for 2.00pm on 19 February 2010. An

earlier conference date of 27 January 2010 had been changed at the request of

one of the parties.

24. On 19 February 2010, the Presidential Member, Mr B Stefaniak made the

following orders:

1. Matter adjourned for hearing on Monday 26 July 1010 at 10.00am.

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2. Parties are to file with the ACT Civil and Administrative Tribunal, all witness statements and documents to be relied on by close of business, Monday 7 June 2010.

25. On 7 June 2010, a witness statement signed by Ms Fiona Westlake was lodged

in the tribunal’s registry. On 8 June 2010, a further two witness statements were

filed in the registry, one signed by Mr Dave Moller and the other by Mr Heath

Mortimer.

26. Attached to an e-mail forwarded by the applicant on 7June 2010 were two

coloured plans, one of which related to the rear garden layout with the other

relating to the front garden. Mr Kelly foreshadowed in that e-mail that he had

arranged for 4 witness statements to be forwarded to the tribunal.

27. Copies of all three statements received at that time were forwarded to both

parties on 9 June 2010.

28. On 16 June 2010, Mr Kelly’s fourth witness statement, signed by Mr Hugh

Mirams was filed in the registry. This statement was on-forwarded to the parties

the same day.

29. On 28 June 2010, the parties were advised in writing that the date fixed for the

hearing was unsuitable and that the matter had been relisted before the tribunal

for hearing on 25 August 2010 at 2.00pm. It is my understanding that the initial

request to postpone the hearing came from the applicant, who was overseas at

the time.

30. Also on 28 June 2010, a further two witness statements were filed in the

tribunal’s registry, this time, in support of the respondent’s case. One statement

was signed by Mr Michael Bayly who evidently carried out work on the project,

both for the applicant, and then for the respondent, after Mr Kelly’s contract

was terminated.

31. Ms Zoe Clarkson, the respondent’s daughter, signed the second statement.

32. The matter came on for hearing before me on 25 August 2010, with the

applicant, Mr Albert John Kelly appearing in person, assisted by his daughter,

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Ms Catherine Kelly. Ms Argall also appeared in person and was self

represented.

33. Both parties informed me that they intended to rely on their witness statements,

which were referred to above. The parties were agreeable that those statements

be admitted into evidence, however I informed both parties that it was open to

them to comment on those statements, if they so desired.

34. 34. It should be noted that all six statements were unsworn, but none of them

was really challenged during the hearing itself.

35. For completeness, I have therefore reproduced each of the six witness

statements as set out hereunder. The first four were filed on behalf of the

applicant, with the remaining two filed in support of the respondent’s case.

Witness statement by F.Westlake

I, Fiona Jane Westlake of (blank), Canberra, ACT, make the following statement.

On or about 15 March 2009 I went with Mr Kelly on several weekend occasions to Mrs Argall’s property at (address suppressed) to discuss the possibility of Mr Kelly reconstructing her garden.

During those meetings there was substantial discussion about whether or not to knock down the house and rebuild it, or to go for the less radical option of just revamping the garden. At the end of the first meeting Mr Kelly told Mrs Argall he would draft a rough proposal for the garden. He gave this to Mrs Argall on the second visit, together with his schedule of fees and charges which I had seen him do on several occasions before and which I know to be his standard practise. As he always does, Mr Kelly explained to Mrs Argall that these documents were not a quote, but were ballpark figures for the work described therein. He explained how his work practise was ‘cost plus’ and Mrs Argall indicated that she understood the difference.

During these discussions Mr Kelly highlighted that it would be smarter from a cost point to do the work in the back garden in conjunction with or prior to work on the front, and that he had factored doing it this way into his estimates for the full job. He also pointed out that the rear deck was probably illegally built, and regardless was very dangerous for small children. In the end Mrs Argall agreed that all work should be done, although she said that while she wished to proceed with the rear deck it would have to wait. She also said to Mr Kelly that there would probably be additional work on the side of the house.

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As part of these discussions budgets were raised and discussed. My recollection is that Mrs Argall wanted a good job done, was aware of the limitations on what Mr Kelly had outlined in his proposal and was aware that additional work or upgrades in specifications would cost more. I specifically remember Mr Kelly telling her that in his estimates he had allowed around $100 to $120 per sq m for driveway paving, which included normal pavers at about $40 to $50 per sq m. He told her that in general the cost of paving was about $60 per sq m plus pavers.

Before Mrs Argal went overseas I was present when she walked through the back garden with Mr Kelly and Miss Argall (her daughter). I walked with them and was fully engaged in the conversation. The ‘walk through’ took about an hour. Miss Argall left after about 20 minutes. The main points that were discussed were:

Mr Kelly being given instructions by Mrs. Argall to make sure that there could be no further subsidence around the pool. Some time was spent looking at the damage and discussing how to fix it.

Mrs Argall stating that she would like paths to be built throughout the back garden. Mr Kelly saying that formed paths had not been included and asking what sort of paths she would like. Mrs Argall answered that she wanted the type that would be “easiest to clean “. Mr Kelly said that the easiest paths to keep clean were paved paths and that they were expensive, but that he would try to limit costs by re-using some materials on site. Mrs Argall agreed to this but wanted Mr Kelly to reuse as many existing pavers as possible. We spent around half an hour marking out possible routes and eventually agreed on a general layout with the exact placement left to Mr Kelly and his “eye”.

There were many ideas for the garden floated, discussed, or agreed. Every time Mr Kelly said something added costs, e.g. a veggie garden, or steps to the very back, Mrs Argall made a good humoured cha-ching noise like a cash register. This became something of a joke throughout the conversation.

(Signed) Fiona Westlake Date 07. 06. 10 (Signed) Ms Julia Dunlea Date June 7, 2010

Witness

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Witness statement by D Moller

I, Dave Moller of (address suppressed), make the following statement.

The following constitutes the text of a document I provided for Mr Kelly in December 2010 and still applies:

“ I refer to the dispute between Mrs C Argall and Ambience Garden Design.

On or about the end of August 2009 Mr Bayly arranged for a contractor to provide an opinion on the cost of the work done at Ms Argall’s property in (address suppressed). In my capacity as an independent contractor working for Mr Bayly I was present with Mr Bayly, Ms Argall and the contractor when the contractor inspected the work. I do not recall the contractor’s name but will refer to him below as Mr A.

I am a gardening contractor, primarily providing my experienced labour and expertise to other contractors such as Mr Bayly and Mr Kelly (Ambience). I have worked in this field for several years.

I was sufficiently disturbed by Mr Bayly’s approach to the matter to discuss the events of the day with another contractor (Mr B) and we decided to acquaint Mr Kelly with what I believed was a highly incorrect procedure.

The essence of the matter is that Mr A expressed the opinion within my hearing that the amount charged was about right, perhaps a little high, but without knowing how much unseen work had been done he could not disagree with the figure. Mr B who worked extensively on this job indicated to me that there was a vast amount of preparation and unseen work done on this site. I had also done a small amount of work on this job for Mr Bayly and Mr Kelly.

At the time Mr A expressed the above opinion, Mr Bayly was surprised. Again. I re-iterate Mr A stated the figure charged was not unreasonable. After being present through all of this I was surprised that there is still a dispute, as in my opinion, on the face of things Mr A had no problem with the amount charged.

From the outset Mr Bayly had seemed determined to denigrate the work done. Something like “A rip off” was one of the first things he said to Mr A. He was also determined to say that the paving was inadequate. This is simply not true and in my opinion the paving work done by Ambience is generally of an equal or better standard than that done by the paver Mr Bayly recommends. I personally would not employ or recommend this person to anyone. I would happily demonstrate this by visits to various completed jobs, the work speaks for itself. The paving at Ms Argall’s is perfectly satisfactory. Mr Bayly was critical of Mr Kelly not battering the

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edges on the curving path but ignored the fact that Mr Kelly had used a more expensive, better and more long- term flexible method of securing the edges. I have discussed this with Mr Kelly who informs me that the approach of using steel gives the edge the strength and flexibility of the steel, makes the edge self supporting and interlocking whereas battering is only as strong as it’s weakest point. He also said the steel also aids in providing a natural and pleasing catenary curve and is far easier to repair or replace should Ms Argall need to get a dingo down the back which was one of her requirements.

I was also present during the week 13 to 17 July 2009 when “repairs” were made by Mr Bayly to the watering system in the back yard in Mr Kelly’s absence. All that was done was some end stops were installed and one solenoid had to be reversed (I know the contractor who installed this and he is dyslexic but very competent). This should have cost at most $50 but I understand a much larger sum was involved. I also understand that Ms Argall had been informed in writing that the system had been installed but was not to be used pending Mr Kelly’s return from a week overseas.

I do not know why Mr Bayly took the approach he did, but I am aware that Mr Bayly had been generally engaged to do the maintenance work on Ms Argall’s property prior to the giving of the upgrade contract to Mr Kelly.

I acknowledge that I no longer work for Mr Bayly and am currently on a job for Mr Kelly. Mr Kelly is leaving the country for a year on 16 December, so I have no self-interest in making this statement. I have not worked for Mr Kelly since December 2009.

My only other comment is that the back garden at (name of street suppressed) is great, the work is well done and Mr Bayly says Mr Kelly’s designs are excellent. I have also just completed a similar size deck with Mr Kelly using similar techniques and I am impressed as is his client.

(Signed) Dave Moller Date 03/06/10

(Signed) Witness (name unreadable) Date 03/06/10

Note: The date in the second paragraph of Mr Moller’s statement is obviously incorrect.

Witness statement by H Mortimer

I, Heath Mortimer of (address suppressed), make the following statement.

In early April 2009 I commenced work as an independent contractor for John Kelly working at (address suppressed). I had previously worked for Mr Kelly on a number of occasions both as a contractor and years ago as

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an employee in his plant nursery. The job this time was to rebuild the garden for a lady who was introduced as Cathy and who I now know to be Ms Argall.

I was not included in very many of the discussions between Mr Kelly and Ms Argall but there were some where because of my skills I was. These were regarding the front deck, the water diversion system, paving in the back yard, the problems and solutions around the pool paving and fence.

Ms Argall was difficult regarding the front deck. She initially wanted it built of steel supports and plastic decking. I know Mr Kelly spent some time looking into plastic and steel decking, while she was overseas and Mr Kelly did not allow us to put in all the steel supports or any bearers until she returned as plastic decking was a different thickness to timber decking. In the end we put in timber but did not put in a support bearer against the wall as we would normally have done and this then involved an extra row of steel supports and a lot of extra time, effort and money.

I do not recall exactly when but I recall Mr Kelly explaining to Ms Argall

that he could divert most of the water from the slope into the gardens behind the pool without interfering with the storm water system. She liked the idea and told him to do it if it did not cost too much. We did this and in the process discovered that her Storm water system had been blocked for some time and she got a plumber to fix the Storm water.

Shortly after she returned we did the paving near the back fence. She said she was very happy with it.

I had a lot to do with the pool paving and solving the problem of subsidence. On our first look there was a lot of washout occurring near the side gate. It later required about 8 or 9 barrows of sand to repair the washout before repaving. There was distortion of the pool fence caused by two Wisteria plants growing on it, and these and other plants had substantially destroyed the batter holding the pool pavers in place. This had also occurred to a lesser extent in most places around the pool. I had a general discussion with Mr Kelly and Ms Argall early on on how to fix the washouts and stop it happening again. I thought the best solution was to build some retaining walls using concrete sleepers. Cathy said she didn’t want to spend a fortune but she just wanted it fixed and left it to us to solve. Mr Kelly and I later saw a solution which looked very good and in my opinion was cheaper in that it also gave her a very nice paved access to the pool.

In the week before Mr Kelly went on holidays Ms Argall gave us a lot of written instructions to put in Camellias around the pool, put in a small retaining wall of concrete sleepers all around the pool fence and take out a lot of Agapanthus against the fence.

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After she returned Ms Argall would often sit and watch us work in the back yard. I particularly remember her watching us putting in the paving in the winding garden behind the carport.

(Signed) Heath Mortimer Date 4/6/10

(Signed) Witness (name unreadable) Date 4/6/10

Witness statement by H Mirams

I, Hugh Mirams of (address suppressed), also known as Bill Mirams, make the following statement.

On or about 1 June 2009 I was engaged as an independent contractor by Mr Albert Kelly, to undertake work at Mrs Argall’s property at (address suppressed). I undertook general garden construction duties in relation to a project to revamp the entire garden. I took instructions directly from Mr Kelly, and on occasion was instructed to do things by Mrs Argall personally.

When working I often observed Mrs Argall giving instructions to Mr Kelly either verbally or in writing. In early July Mr Kelly gave me two lists of tasks written by Mrs Argall in relation to work in the backyard and in particular around the pool and its fence, which I was charged to undertake. This work was done by me with the assistance of Mr Heath Mortimer, with Mr Kelly’s overall supervision.

On or about 10 June Mrs Argall approached me and complimented me and Mr Mortimer on our work on the very back path which we had just finished laying bricks on. To the best of my recollection she said ‘Thanks for doing such a good job and doing it so quickly”.

At the commencement of my engagement I observed that the paving around the pool, in particular in the north east corner and along the eastern perimeter, was substantially sunken and distorted. I also observed that the wisteria growing on the safety fence had distorted the fence and damaged the battering under the edge of the paving. This was before we did any work in the area. In repairing the paving around the pool I brought in at least four or five barrow-loads of sand to replace the sand that had been washed out over time as a result of the subsidence in the paving.

In relation to the fence and the paving edge, Mrs Argall gave written and verbal instructions to Mr Kelly for a concrete sleeper edge to be placed as a minor retaining wall, the wisteria to be removed, the fence fixed and several camellia bushes to be planted and for a substantial number of agapanthus to be removed. Mr Kelly gave me this written list to work from.

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On the last day before Mr Kelly left for his trip to New Zealand, he, Mr Mortimer and I installed a watering system in the back yard. I recall Mr Kelly showing me a written instruction from Mrs Argall specifically listing the watering system and several other tasks which we had completed in the days just before as jobs that had to be completed before he departed. We fully tested the system before leaving the premises and apart from two missing end stops it was working perfectly.

(Signed) Hugh Mirams Date 03/06/10

(Signed) Jessica Gourlay Date 03/6/10 Witness

Witness statement by Michael P Bayly

I, Michael Philip Bayly of (address suppressed), make the following statement, referring to the dispute between Ms C. Argall and Ambience Garden Design (reference number XD1294 of 2009).

Prior to making my statement, I would like to make some things very clear.Firstly, I was not going to enter this dispute as I felt I had little to contribute to the matter. The matter was, as far as I was concerned, between Ms Argall and Ambience Garden Design. This was until I received a copy of Mr David Moller’s statement (dated 3 June 2010). This statement seemed more a personal attack on me, rather than a statement of fact about the matter at hand. (It should also be noted that Mr Moller and I parted ways in less than friendly terms in October 2009 and it shows in his remark.)

Secondly, it should also be noted that my company and ambience garden design are not competitors. They provide design and construction. I provide garden maintenance services. I have assisted Ambience with labour and expertise to facilitate the completion of many projects similar to (Ms Argall’s address), and have also provided Mr Kelly and his family with garden maintenance to their private residences.

The following is my recollection of all events surrounding the matter of (Ms Argall’s address suppressed).

In April 2009, Mr John Kelly approached me to provide labour and expertise to support his company, Ambience, in the landscaping of the property located at (address suppressed). The initial brief was for tree removal, remedial pruning and general assistance to clear the front portion of Ms Argall’s property for a makeover (Ms Argall was an existing, though very infrequent, client of mine). It was during this time that Mr Kelly stated that the job in hand was big, some $100,000. Mr Kelly said it was 1 of 2 jobs of the same scope he had on the books, the other being in Wanniassa. (Mr Moller had, during one of many work

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conversations, stated to me that Mr Kelly had related the same job value to him). I was impressed and wished him well. Our portion of the job was complete, Ambience was invoiced, and we went our separate ways.

In July 2009, Ms Argall approached me to do additional work in her rear garden. It was requested that we supply and lay mulch on all garden beds at the rear of the property. As I had worked for Ms Argall prior, I knew what the rear area had looked like pre April 2009. When I saw it in July 2009 it was totally transformed. I was very impressed with the design and thought that Mr Kelly had done a great job, thinking that this was part of the $100,000.00 job he told me about. Before we could mulch the garden beds we had to test the irrigation system to ensure it was complete and operational. Ms Argall had mentioned that one of the irrigation lines seemed to be operating constantly. (This was caused by the incorrectly installed solenoid valve). Upon inspection we found there were garden beds that had dripper irrigation lines laid out on them but were not connected to the feeder lines, or were placed too close to the garden edge and had to be moved back into the bed so as to not waste water. These issues, with Ms Argall’s permission, were rectified. After the modifications, the irrigation system was then tested and found to be functional. We proceeded to cover the irrigation and garden beds with mulch.(These are the “repairs” to which Mr Moller refers). My tax invoice dated 29 July 2009 for $240.00 (number 3075) issued to Ms Argall will bear testament to the irrigation work. An additional invoice dated 29 July for $760.00 covered the supply and spreading of mulch and other works undertaken.

Mr Moller’s statement that “Ms Argall had been informed in writing that the system had been installed but was not to be used pending Mr Kelly’s return from a week overseas” can only be something he learned from an external source at a later stage as I nor he were privy (to) that correspondence.

During this period Ms Argall asked if I could provide an estimated value on the work already completed by Ambience Garden Design. My reaction was one of dread as I had worked for both parties but did not wish to be caught in the middle (as I am now). I am not a paver and therefore had no right to evaluate the value of another company’s paving work. I suggested to Ms Argall that another firm whose speciality is paving be called in to do the valuation. (I also believe that Mr Kelly was aware that something was amiss as I remember having a phone conversation with him about the situation though the exact details escape me.)

I enlisted the help of Mr Todd Daley of All Rock landscapes. (Mr Moller refers to Mr Daley as Mr A). Mr Daley is a qualified builder, paver, stonemason and landscaper. He has been plying his trade for many years in the ACT and was, and still is (as far as I know), the preferred tradesperson recommended by Amber tiles in Fyshwick. I had

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used his skills on other projects with great success prior to asking him to assess the work at (address suppressed).

I am not a paver and don’t claim to be one. However, there were some portions of the rear paved areas that seemed flawed in their design and implementation, particularly a raised edge that, when bumped fell over. This was one area of concern I expressed to Mr Moller. I thought the edge should have been battered (or haunced) to stabilise it and not have it collapse at a merest touch. (This is an issue from a previous project and Mr Moller has shared his agreement with me at times on the matter). I had issue with the steel edging, not as to its use but that it was not protected from rusting out by either paint or a zinc coating. (It is well known that “raw” steel will show signs of a severe rust issue after a few years in the ground without the benefit of a protective coating.) I also thought that too much sand was used to fill in large gaps in the paving where pieces of paver should have been cut to fill said gaps. These points of (my) concern were all made to Mr Daley when he attended the property in late July 2009 (and to Mr Moller prior to his visit) as we walked the rear garden. (Ms Argall was not involved in this walk as detailed by Mr Moller. I believe she was in Sydney visiting her mother.) Mr Moller’s assertions that I was out to “denigrate the work” are completely incorrect. My initial reaction was not positive due to the concerns previously stated but after consultation with Mr Daley some of these concerns were allayed.

As Mr Moller has told of some things “within his hearing” it seems doubtful he was part of the entire walk and possibly heard only small pieces of the conversation between myself and Mr Daley.

Mr Daley was initially requested to provide an assessment and estimate the value of the work already carried out by Ambience Garden Design. Mr Daley told me that (in his dealings with Amber Tiles) he provided this type of service regularly and would be happy to do the same for Ms Argall. I had earlier been briefed by Ms Argall as to the work provided by Ambience and advised Mr Daley of same to allow him to assess an estimated value. After much measuring and deliberation Mr Daley verbally supplied a figure of $40,000.00 (give or take 10%). This result was provided to Ms Argall and Mr Kelly, both of whom I called directly after the meeting ended. Mr Kelly was happy with the verbal figure provided by Mr Daley.

Ms Argal was not aware that I was updating Mr Kelly on these meetings and discussions during this period and was not terribly impressed when she discovered the truth.

Since August 2009, myself nor persons attached to my company have worked for either Ambience Garden Design or Ms Argall, and by providing this statement stand to gain no benefit from either party.

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In conclusion, I trust that an equitable resolution can be reached in this matter. I still regret being caught in the middle.

(Signed) Mike Bayly Date 26/6/10

(Signed) Michael Reid Date 26/6/10 Witness

(Note: presumably Mr Bayly left out the word ‘neither’ from his second last paragraph)

Witness statement by Zoe Clarkson

I, Zoe Clarkson of (address suppressed) make the following statement.

On my first encounter with Mr Kelly in relation to work at (address suppressed), I accompanied Mr Kelly, his offsider Fiona and my mother for a tour around the garden. On this occasion my mother discussed that she wished to revamp our front garden. It was during this discussion that Mr Kelly raised the possibility of giving the back garden a quick and cheap makeover that would significantly enhance its appearance. Throughout this conversation my mother stressed that her concern was primarily the front garden, which she wanted to look good and be easily accessible and maintained.

The second encounter I had with Mr Kelly was when he came to present his ideas for the garden renovations and his accompanying estimate based upon his inspection of the garden. My recollection of this discussion was that Mr Kelly was enthusiastic about the project and maintained throughout that there was plenty of ‘scope’ within the estimate for detailed design. Whilst Mr Kelly discussed a multitude of options for the garden, he was not specific about what those options entailed. My distinct memory from this discussion was Mr Kelly’s emphatic claims that his estimates were usually spot on and that he had extensive experience, so was therefore able to make an accurate estimate based on similar works conducted. Once again stating that there was ‘scope’ to develop detailed design. During this discussion my mother explicitly stated that her overall budget was $60,000 and reminded Mr Kelly that her priority was on the front garden. Whilst my mother consented to some works on the back garden, she stated it was never her priority and its inclusion was at the insistence of Mr Kelly’s delivering his proposed enhancements within the specified budget and his estimates. My understanding was that the estimate provided by Mr Kelly on this occasion included: the enhancements of the back garden as proposed by Mr Kelly, renovation of the back deck (which was deferred), the installation of a deck at the front and complete renovation of the front garden including space for parking. My mother also requested during this discussion that Mr Kelly submit a rough plan of the front garden prior to the commencement of any major

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works, and although pursuing Mr Kelly for a plan throughout the duration of works, never received one and subsequently drew her own.

Despite being enthusiastic about this project from the outset due to my own interest in the design field, I remained largely uninvolved after this point as I was undertaking intensive studies and wished to solely focus upon these at the time. Although I was not party to further discussions between Mr Kelly, his contractors and my mother, my observations of their work progress and practices were that they were inefficient, protracted and inconsistant [sic], and works that were said to be complete remained incomplete such as the front deck. At the request of my mother in her absence I documented these issues by taking photos that are included in her response, all of which are true and accurate representations of the state in which our whole garden was left by Mr Kelly. Of the work that was conducted by Mr Kelly, I believe that none of it met the deliverables that he outlined in his estimate, nor were any of the invoiced charges representative of his original estimates.

After months of unsatisfactory work from Mr Kelly without tangible results in even Mr Kelly’s proposed enhancements of the back garden my mother concluded her association with Mr Kelly in late June/July after numerous attempts to reconcile the spiralling costs of the venture to little avail.

(Signed) Zoe Clarkson Date 27/6/10

(Signed) Laura Ralph Date 27/6/10Witness

36. Returning to the hearing itself, the case for the applicant was outlined by

Ms Kelly and her opening statement was as follows:

“Okay, well just briefly our case is pretty simple, Ambience undertook work that it was asked to do. The work that hasn’t be paid or relates to the final invoice, and that work principally relates, obviously you know there’s a lot to it, but the principal work that that invoice relates to - is work done on the deck, and work done on the handwritten note, Ms Argall’s handwritten note, that’s the work that hasn’t been paid for. That’s the money we want”.

37. Ms Kelly later went on to add:

“ So briefly, we’re just saying we undertook work that hasn’t been paid for, that an independent assessor has even looked at the whole project and said that the price was roughly fair even though he hadn’t been able to see all the structural work that went underneath it all, and right through the whole project Ms Argall was paying for stuff which she now says wasn’t authorised, but never at the time when she was paying for it or it was

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being done and she was watching it being done, did she actually say “That’s unauthorised please don’t do that” or ‘I think you‘d better stop now”. In fact she actually paid for it.

So we’re now just asking for the final bits to be paid for. In response to Ms Argall’s case, Ms Argall’s claim that Ambience deliberately concealed the true nature of the work and over-inflated it, we’d say (1) that Ms Argall understood the nature of the estimate that she was given at the start, that it wasn’t a quote, and understood that works were included which are laid out very clearly in that initial estimate document, that after that time in the conversation in the garden which is in Ms - is it Fiona Westlake? Is that her name? Fiona Westlake’s statement related to there.

In that conversation and other conversations she requested additional work. We can demonstrate she requested those additional works, and she was aware that these would add costs, principally those works are the debt and the significant additional paving in the back yard.

She requested them, and she knew that they would cost more money. She authorised those works explicitly by asking for them, and then we would also argue, interestedly by watching them being done, and then paying for them.”

38. Ms Kelly later empathised this point by adding the following:

“ She had a lot of opportunities during the whole thing to say as she was watching it, that it was unauthorised and “Please stop paving.”, “Please stop what you are doing.” She did not. She then, after all of this, requested more works which were not included in the original estimate.

These are on the handwritten notes that she’s made, we can point to it in a minute, she now refuses to pay for those. She then got, by her own statement, someone in to assess whether the works that had been done to date were done to a fair price.

He said “I can’t say what’s gone on structurally underneath but it looks to me like a fair price, give or take 10% which comes out pretty close to what was actually charged, I think $2,000-$3,000 difference.

Now she alleges that some works were unauthorised, but doesn’t really go into specifics about what was unauthorised. So therefore it’s very difficult for us to answer that allegation. All we can say is that all the works that were undertaken by Ambience were authorised by Ms Argall either verbally or in writing, and we further rely on her observing them being done, being informed by her daughter that they were being done, and then paying Ambience after they’d been done and never saying anything at the time about them being unauthorised.”

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39. For the record and so that there is no misunderstanding, Attachment G to the

originating application was a document headed ‘Tax Invoice and Final Demand’

claiming a total amount due and outstanding of $13,110.00. This account

contained a number of additional charges that were subsequently disallowed by

me.

40. Ms Argall however correctly pointed out that there were a number of different

documents furnished to her including a final invoice and a final demand.

41. Going back to the pleadings it can be stated that the final invoice of 7 July 2009

was for a total amount of $46,965.00, whereas the final demand dated

7 August 2009 was for an amount of $53,110.00, which according to Ms

Argall’s pleadings included

‘…increases in mark up, design consultancy not provided and on loss ofprofit for work not commissioned.”

42. From the evidence it can also be stated that the final demand dated

7 August 2009 was issued after Mr Kelly’s services were terminated by

Ms Argall, and contained charges for work done, as well as charges for items or

services that Mr Kelly did not initially intend to bill his client for.

43. In addition to the amount of $46,965.00 as detailed in the final invoice of

7 July 2009, the final demand contained the following additional charges:

1) Revised charges to bring mark ups to schedule $1,220.00

2) Design, consultancy and other services $1,925.00

3) Loss of profit on balance of original contract $3,000.00

44. When questioned on each of these items, it became clear to me that Mr Kelly

only invoiced Ms Argall for items 1) and 2) because the parties fell into dispute.

He advised me that Ms Argal was getting what was known in the trade as

“mates rates”, but the situation changed when Ms Argall “…decided not to

pay”.

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45. When I asked Mr Kelly to explain how he saw the job, that is, the work he was

doing, and to confirm that initially Ms Argal wanted the front yard to be

revamped and the back yard cleaned up and tidied, he replied as follows:

“She wanted the whole job done, as it turned out”.

46. He then added

“ We had lots of discussions about the whole thing to start with, and it became clear that she wanted the whole garden re-done. She did want an emphasis on the front yard, but she did not – and the whole job really, to save the whole thing, you start right down in the back and you work your way forward because it’s on quite a large slope, there’s about six or seven metre drop from the very front to the very back.”

47. Mr Kelly informed me that there was a lot of soil to be excavated from the front

to shape it the way Ms Argall wanted it shaped. Mr Kelly then advised me that

it was a better option to do the front and back together therefore enabling him to

use the soil from the front excavation on the back garden “… rather than taking

it to the dump and charging her for that, and then buying soil back.”

48. After a discussion as to whether or not it was reasonable for Ms Argall to

request a quote for any additional work she wanted done, and whether such a

quote came out somewhere near what Mr Kelly had quoted or estimated,

Ms Kelly made the following additional comments:

‘“And then what happened after that, we would say the next key event is the conversation in the back garden where they’re walking through the back yard and according to the witness statement that we’ve provided Ms Argall is saying something like “I’d like some paths here”, and dad’s saying, “Okay we could do it this way or this way “, and she’s saying “Well I’d like it done the easiest way to clean possible”.

And dad’s saying “Well that’s paving and that’ll cost. And she says tch-ching. Okay, so what about a chook yard, what about a bird cage.

And so she says tch- ching to each of those things, okay. So it’s the next conversation, and that’s kind of like the next garden design, so that’s garden design 2, okay, and that’s what we’re working on and that’s where she starts to then get a bit concerned about the price and say then “Okay, now you’ve done this much, it’s not finished yet. I’m concerned about how much it’s going to cost to finish the whole thing and I’d like this done to the folly and I’d like this done as well. How much is that all going to cost me to have finished in that way with these things that I want as

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well.” Quite a fancy different garden to the one that had initially been suggested in that first thing, and that’s then what the quote was provided of (?). And the quote is done on a very different basis to the estimate”.’

49. Mr Kelly then added that the quote referred to by his daughter was for a much

more extensive garden and much more expensive as it had “ Much more paving,

et cetera”.

50. To my mind it was reasonable to expect Ms Argall to ask for a quote for any

additional work requested, especially if she was concerned about the scope of

the work and costs getting beyond her financial capacity.

51. In any event, the schedule of fees and charges provided by Ambience Garden

Design specifically provided for two different methods for determining the costs

of a project, either by way of an “estimate of probable costs on a costs plus

basis” or a fixed quotation. In the end Mr Kelly did provide a quotation to finish

the job.

52. The schedule itself provided that:

‘Ambience is happy to provide a written quotation but we prefer to provide an estimate of probable costs under the “cost plus” approach. In both cases the figure is based on the schedule of fees and charges below.

A quotation is a fixed price for the specific works. Any changes to the original agreed specifications will require a fixed price to be quoted for the changes’.

53. At this point, Ms Argall asked if she could make her opening statement.

I agreed stating that I was happy to run the proceedings on an informal basis if

that would achieve a better result, rather than being more formal. By that

I meant, that I would deal with the matter holistically, rather than having each

party present their case and then being cross- examined in turn.

54. Whilst the transcript only records Ms Argall’s acknowledgment, both the parties

were agreeable to the hearing proceeding on that basis.

55. Ms Argall’s recorded opening comments were as follows:

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“ So I obviously have a different view, and from my perspective the issues and the evidence in this matter are threefold. What was the contract entered into with Mr Kelly? Did he meet his responsibilities under the contract?

And thirdly, what are the reasonable costs for the work in accordance with the contract? My claim outlines all of my concerns, but in summary in relation to what was the contract I relied on Mr Kelly’s estimate and representations about the work scope and the cost.

I orally agreed to some of the work, but not all of Mr Kelly’s proposals. For example, the back deck was deferred and may have been included at some----”.

56. Unfortunately, I cut Ms Argall off at this point but I presume she was going to

add that the deck may have been included at some stage, or some later stage.

57. Ms Argall then explained to me that there were two decks, a new one to be

constructed at the front of the house and an old one at the back that Mr Kelly

had made some proposals to repair. Ms Argal did however confirm that whilst

work on the deck had been deferred, the repairs to be undertaken had been

costed out in Mr Kelly’s original proposal.

58. Mr Kelly’s original proposals in relation to this issue were contained in his

document marked Attachment B under the sub-heading “The pool and the rear

deck”.

59. The proposal itself and the costings were as follows:

‘To lift and replace the paving, $800. The deck needs significant attention. The main problem is the decking and the nailing thereof. There are two options, just punch in the nails or remove the pine decking and replace with a better timber such as merbau; then fix such with stainless steel screws which is a more effective and longer lasting solution. Attention has also to be given to some retted joists.

The rails and the stainless steel wires do not meet safety requirements. They may be legal under some sort of grandfather clause, and are perfectly ok when only adults are present, but they present a significant danger for small children. Repairs to the deck and paving would be roughly $5000-9000. (say $7000).’

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60. After confirming that the repairs to the back deck, which apparently, according

to Mr Kelly, was an unapproved structure, had been deferred (and hence not

invoiced) Ms Argall added the following:

“It (the deck) was costed in originally, but it’s not part of the oral contract that we agreed. That was $7,000. I also said that the front garden wouldn’t proceed in full until Mr Kelly had provided me with some detailed drawings, not landscape architect drawings. I understood he wasn’t a landscape architect, so that I could understand what was his detailed proposal. In his original estimate of $59,000, $40,000 related to the front garden, and a sum of $14,300 ($14,500 quoted in pleadings) related to the back garden.”

61. Asked by me to confirm that the $40,000 relating to the front garden and the

$14,300 claimed to be related to the back garden had all been costed out in the

documentation provided by the parties, Ms Argall added the following

comments:

“Yes, that’s all in there, but you’ve got to add things and subtract them. But I can do that later. Now Mr Kelly was going to provide those sketches when I returned from overseas so that we could agree. It’s a substantial amount of money, we could agree what was going on. The evidence for this is contained in Mr Kelly’s email of 5 April where he talks about what had been agreed and what hadn’t been agreed.” (Attachment D refers)

62. Ms Argall confirmed that she didn’t have any issue with the list of items

themselves but wished to “talk about the detail of that”. The list of agreed jobs

and those to be deferred, as set out by Mr Kelly, were as follows:

1. Work on the front garden is to be restricted to clearing and general surface shaping as we (Mr Kelly and Ms Argall) discussed and sketched. The final disposition and composition of walls, gardens, etc will be worked out at a later time.

2. The drive way is to be left intact for the time being.

3. Work on the rear deck is not to be started.

4. There is to be no alteration to the level of the carport floor and access to the back is to be maintained.

Other matters agreed were,

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1. the chook yard and structure are to go.

2. pavers saved from the area behind the carport are to be used as a floor in the Folly and as path through the rear garden.

3. two vegi gardens constructed of concrete sleepers are to be built on the northern side of the folly.

4. provision for 3 or 4 trees to be espaliered on the northern side of the folly

5. chains will be used as the climbing frame over the folly.

63. According to Mr Kelly’s email, his understanding from the conversation

between the parties was that he was to proceed with all the work discussed in

his outline, except for the items specified above.

64. The detail that Ms Argall wanted to talk about, starting off with the chook house

was as follows:

“ Mr Kelly said that he wanted to remove the chook house. I didn’t mind thechook house. He said, for example, that I think it was Dave, would remove it over Easter at his own cost. Okay. You know I wasn’t emotionally attached to it, it could go. I said I was more concerned about the back shed, which is an asbestos shed. Mr Kelly didn’t seem to be keen about removing it.”

65. After confirming that Mr Kelly had stated that it would cost a lot of money to

remove the asbestos shed, Ms Argal continued as follows:

“And I said “Well could you get a quote in relation to that?” He’s never given that quote, that’s bye the bye, I’m nor arguing about that okay? We did talk about things like veggie patches. There was a veggie patch already there. Did I want one in the overall design?

When he submitted his proposal to me he made representations that, you know, the estimates that he made were sufficient to comprehend the detailed design. I regarded that as a detailed design, he didn’t mention additional costs associated with that.

In relation to the paths, there was some discussion about additional paths that would cost money. As a consequence of that I didn’t agree to that. But on day one, when we walked through the garden Mr Kelly had made strong representations about the need - and this is in his proposal – about the need to get rid of a driveway from the back gate, which was already paved, two thirds paved, one third concrete, to make a link garden. It sounded very nice---”.

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66. Ms Argall then told me that Mr Kelly was going to re-use the pavers on the

folly floor, and on the major path in the back. Ms Argall added that she regarded

that always as part of the original proposal and not additional to it. Asked by me

if she had ever sat down with Mr Kelly and reached agreement with him on this

particular issue, Ms Argall replied as follows:

“Well in Mr Kelly’s email of 5 April where he says, which is in his evidence, where he says these are the things that are going to happen, he did not raise any issue of additional cost in relation to the matters in that email.

So if I can just proceed then? I clearly understood the re-use of existing pavers was included in the estimate for the back yard, as we had discussed this all the way along, as part of the enhancements and it’s confirmed in his email”.

67. Mr Kelly’s initial proposals were, as previously stated, set out in Attachment B.

Unfortunately that document is undated but was presumably produced and

given to Ms Argall soon after Mr Kelly’s engagement but then only after he had

visited the site on several occasions, as set out in his pleadings.

68. That document set out in some detail, Mr Kelly’s ‘suggestions” for the back

yard.

Those suggestions are set out hereunder:

The back yard

The back yard is sound in concept and function, except that the driveway behind the carport is useless and really detracts from the house. The four steel posts originally erected for a sail need to be made useful. There are four elements to be considered.

1 The rear garden

This is in many ways the simplest area; the only complicating factor is that it will need to be integrated with the folly. My suggestion is that this garden be firstly cleaned up, and then reshaped a little. Planted up to be a wild floriferous garden providing cut flowers and scented plants at all times of the year. Many of the existing plants eg, lavenders will need to be either severely cut back or replaced. There is also the question of screening out the house behind. There are quite a few shrub and small tree options, the limiting factor being the powerlines along the back fence. All in all, this is the least expensive and quickest area to revamp.(Estimates of cost; 2 days to clean up – cutting back, removal, tip, and minor reshaping of landform. $1600. Replanting and plants depending on

39

size of plants selected $1500 - $3000. The upper limit would allow several established trees to be planted along the back fence. Total for this garden is around $4500).

2 The pool and the rear deck

(See above.)

3 The folly

The four steel posts and the concrete floor present an opportunity to create something interesting, different and functional. The simplest and easiest is an arbour. Using chains, pots and plants such as wisteria, clematis and climbing roses a sheltered (and secret ?) area for relaxing, reading, entertaining, etc can be easily be created. To be thought about and discussed. Cost about $3000.

4 The link garden

The paved/concrete area between the carport and the folly was once functional but is now an eyesore. Remove the paving/concrete and replace with a tiered garden linking the pool area, the carport and the folly. The layout could be structured as wide steps, a formal zigzag path or an informal meandering path. Removal of the current concrete and paving is around $500 to $1000. The garden cost is wide ranging and more expensive the more formal the structure. An appropriate informal garden including removal of the paving could be constructed for around $3500.

69. The four items were costed out to a total of $18,000. The costs of the watering

system ($5,000) and the mulching ($2,000), whilst included in the total

estimated amount were not split between the front and back yard.

70. There is, however, no mention in the initial proposal of relaying the paving. The

first recorded mention of that proposal was, as Ms Argall claimed, contained in

Mr Kelly’s email of 5 April 2009 under the heading “Other matters agreed”

(Item 2- pavers saved from the area behind the carport are to be used as a floor

in the Folly and as path through the rear garden.).

71. According to the statement prepared by Mr Kelly’s witness Fiona Jane

Westlake, she accompanied Mr Kelly on several weekend occasions in March

2009 to Ms Argall’s property to discuss the possibility of Mr Kelly

reconstructing her garden.

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72. Also, according to Ms Westlake, at the end of the first meeting Mr Kelly told

Ms Argall he would draft a rough proposal for the garden and that he

subsequently gave this to Ms Argall on the second visit.

73. Ms Westlake went on to state that before Ms Argal went overseas she was

present when Ms Argall, Mr Kelly and Ms Argall’s daughter carried out a walk

through the garden. She also claimed that she was fully engaged in the

conversation. According to Ms Westlake, ‘“The main points that were discussed

were:

Mr Kelly being given instructions by Mrs. Argall to make sure that there could be no further subsidence around the pool. Some time was spent looking at the damage and discussing how to fix it.

Mrs Argall stating that she would like paths to be built throughout the back garden. Mr Kelly saying that formed paths had not been included and asking what sort of paths she would like. Mrs Argall answered that she wanted the type that would be “easiest to clean “. Mr Kelly said that the easiest paths to keep clean were paved paths and that they were expensive, but that he would try to limit costs by re-using some materials on site. Mrs Argall agreed to this but wanted Mr Kelly to reuse as many existing pavers as possible. We spent around half an hour marking out possible routes and eventually agreed on a general layout with the exact placement left to Mr Kelly and his “eye”.’

74. At the time I made the comment that Mr Kelly’s original proposal was

ambiguous as to whether the costing under ‘The link garden’ heading included

the relaying of the pavers destined to be removed. Ms Argall agreed with my

comment.

75. I did however, subsequently agree with Mr Kelly’s statement that,“ Well,

actually it’s not meant to be ambiguous, what it says, (from) my reading of it

from what I can remember of it, is that it says that you can do the garden and the

more formal you make the path the more expensive it’s going to be, and for an

informal – ish path it’s going to cost about $3,500.”

76. In answer to a question from me, Mr Kelly stated that he didn’t cost out the re-

laying of the pavers because “It wasn’t suggested at that time to lay out

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somewhere else.” It should be recorded that Ms Argal disputed that it wasn’t

suggested, but I accepted what Mr Kelly said on this issue.

77. After a further discussion around the quote to remove the paving, and the fact

that there was no mention of any costs for re-laying, the following discussion

took place.

MS ARGALL: He doesn’t explicitly say it, but what he said in his representations is that this would, you know, it was all about detailed design, we’d talk about it later. When we walked through it, it was always about re- use of the pavers, and we talk about the link path, we’re talking about a slope of 30 to 40 degrees---

MR KELLY: It’s not costed in.

MS ARGALL: It doesn’t seem reasonable that I would I would agree to taking up paving and concrete if I was going to have a 30 degree path made of dirt. It would have been a mud slide.

MR KELLY: But you can buy new pavers or you can re- use old pavers, re-using old pavers, you can chip them down and they’re good. It does save you – you’re buying the equivalent new pavers would be more expensive, so it is saving you money, but it’s not free. I mean no-one thinks they get labour for free.

MS ARGALL: But laying it---

MEMBER: When did you give her – when did you---

MS ARGALL: No hang on, we’re talking about the laying.

MEMBER: Just a moment, when did you give her a quote? You re-laid them, didn’t you, I’ve seen the photos?

MR KELLY: Yes, that was actually specifically asked for by Ms Argall because she was home at that stage and that path was only in a rough state when she arrived home. It was laid out with the steel edges and it had had gravel base put in it. Now that’s normal, I could have then put over that a much cheaper variety of path, I could have used- - -

MS KELLY: Gravel- - -

MR KELLY: Granite with concrete in it, that would have been fine, there are a whole variety of things. But she was very specific that he wanted it paved.

MEMBER: When did you give her a costing for that?

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MR KELLY: She didn’t get a costing – well in those papers - - -.

When she got home because lots of things were getting done, she claims in her paperwork that she asked me to go through the costs with her. My recollection is that I wanted to go through the costs with her because she had asked for a lot of things to be done and it was starting to cost a significant amount of money.

So I prepared some sheets to show as a discussion paper where money had gone, right? What I expected the rest of the cost to be, why things had been done, or what extra costs had been, and where could we possibly work to save some money, and she basically, after those discussions, paid me for all the work that had been done up until then, so I’ve got no - - - .

78. At this point, Ms Argall stated that she didn’t pay all of the money owing and

Mr Kelly replied stating, “You spent $3,000”.

79. Ms Argall then continued giving her evidence as follows:

“ Mr Kelly’s responsibilities was the second part of that. Mr Kelly was aware of my budget and that my priority was the front garden. I told him up front that it was $60,000. I had no – of which $40,000 was for the front garden.

I had no reason to suspect overruns in excess of 100% during my absence overseas. As Mr Kelly had requested a deposit of only $5,000, I was going away for 6 weeks. I queried that amount of money. I thought probably $10,000 might have been appropriate. He said “No that’s fine, that’s fine”.

At no time did Mr Kelly attempt to contact me to advise of cost, projected or incurred, up to $30,000. I came home to bills in excess of $30,000. Now this in relation predominantly to the back garden, because work on the front deck, there’d been some work on the front.”

80. I then asked Ms Argall if Mr Kelly had done any work at that stage that she

hadn’t wanted done. Ms Argall replied, “Yes, yes and I’ll get into that in a

minute. So, on my return I was alarmed at both the lack of progress in the back

garden, and the cost advised by Mr Kelly. Work had been undertaken or

commenced that was more extensive than requested or proposed”.

81. Asked to itemise the works referred to Ms Argall stated, “Extensive steps to the

pool gate, and I think there is a photo. And I’ve brought lots more photographs

here”.

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82. Ms Kelly’s response was to deny that the pool steps were unauthorised and to

state that they had been done as a part of a solution to fix a subsidence problem

on that side of the pool, and that the issue had been identified before Ms Argall

had left for overseas.

83. Ms Kelly then went on to state that there was a “big conversation” at which

Heath was present where it was decided that the problem with the pool paving

needed to be fixed and where Ms Argall had allegedly said “ I want it fixed.

I don’t want to spend a fortunes, but do what you think is best”.

84. Ms Kelly added that the solution decided upon, “…was the most economic

solution”.

85. In Mr Kelly’s originating documents, he states that Ms Argall had given specific

instruction that work was to be done to the extent necessary to prevent the

subsidence problem around the pool, and that she had subsequently asked for

additional works to those he found necessary to be done. According to

Mr Kelly, this request had added significant cost. Mr Kelly’s evidence on this

point was backed up by his witnesses.

86. He also stated that conversations about the work were held over the period of

approximately a week before Ms Argall had departed for an overseas trip. He

then added that Ms Argall “…gave instructions that work was to commence as

detailed in Attachment C and as necessary in addition as per the conversations

outlined above”.

87. Mr Kelly subsequently added that, “Ms Argal [sic] then went on her holiday and

in her absence works as per the agreement in Attachments B, D and the later

conversations were undertaken.”

88. Attachment C is the fees and charges schedule. It does not contain any

instruction or details of work to be carried out. This is obviously an error. There

is also no reference in either the Attachment B or D documents to a subsidence

problem concerning the pool surrounds and little reference in Attachment B to

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the pool itself other than a figure of $800 to lift and relace the pavers, as rightly

pointed out by Ms Argall.

89. Ms Argall’s handwriting note, which was allegedly composed after 8 June 2009

and after Ms Argal had paid a further sum of money to Mr Kelly, does however,

contain the following reference ‘Finish pool paving & paths’

90. On the evidence I was satisfied that Ms Argall did in fact authorise the work,

but was “alarmed” at the extent of the work carried out and the cost of that

work. I did however accept Mr Kelly’s evidence that the work carried out was

necessary and that the solution arrived at was both cost effective and at the same

time provided, “…a very nice paved access to the pool” as stated by one of

Mr Kelly’s witnesses. (See below). Mr Kelly himself stated, “So that was a very

neat solution to an ugly problem”.

91. I also noted that Ms Argall did not agree with Mr Kelly that the subsidence “…

wasn’t mentioned in the original estimate”. However, there was very little that

the parties agreed upon during the hearing.

92. According to Ms Argall there were two areas of subsidence, and that both areas,

“...were clearly obvious to Mr Kelly before he made his estimates”.

93. Whilst the initial fix had been estimated by Mr Kelly at $800.00, clearly that

was an unrealistic figure, and subsequent discussions centred around fixing a

much bigger problem than merely lifting and re-laying some pavers.

94. That was confirmed by two of Mr Kelly’s witnesses. In fact, Ms Westlake states

quite clearly that Mr Kelly was given instructions by Mrs. Argall to make sure

that there could be no further subsidence around the pool and that some time

was spent looking at the damage and discussing how to fix it.

95. The person named ‘Heath’ mentioned above was in fact Heath Mortimer,

another of Mr Kelly’s witnesses, and whose statement is reproduced above. In

relation to the pool subsidence issue, Mr Mortimer stated the following:

“I had a lot to do with the pool paving and solving the problem of subsidence. On our first look there was a lot of washout occurring near the

45

side gate. It later required about 8 or 9 barrows of sand to repair the washout before repaving. There was distortion of the pool fence caused by two Wisteria plants growing on it, and these and other plants had substantially destroyed the batter holding the pool pavers in place. This had also occurred to a lesser extent in most places around the pool. I had a general discussion with Mr Kelly and Ms Argall early on on how to fix the washouts and stop it happening again. I thought the best solution was to build some retaining walls using concrete sleepers. Cathy said she didn’t want to spend a fortune but she just wanted it fixed and left it to us to solve. Mr Kelly and I later saw a solution which looked very good and in my opinion was cheaper in that it also gave her a very nice paved access to the pool”.

96. Mr Kelly did confirm that the initial estimate of $800 was to pull up the paving

and put the paving back down and that it did not include, “… fixing that

subsidence down there. If I do that and fix it, it’s just going to happen again and

that’s - I’m talking about the pool area”.

97. Next, he stated that the sleepers they used had fixed the problem and they were

never going to rust as they were concrete, nor would they collapse as they had

been properly installed. Ms Argall replied that her issue was not what Mr Kelly

did, it was whether or not he had met his responsibilities in informing her of,

“…substantial increases in costs before he went ahead”.

98. However in the end, it was clear that Ms Argall did not have a firm quote for the

work carried out, and although she denied saying it, I was satisfied that she did

tell the applicant to fix the problem, thereby authorising the work in her

absence, as I stated above.

99. I was somewhat sympathetic to Ms Argall’s claim that Mr Kelly should have

contacted her. Her exact words were, “This was all done in my absence. If

Mr Kelly was going to commit substantial additional amounts of money, on my

behalf, he had an obligation to let me know and to seek approval”.

100. Whilst I was unaware if there were any arrangements put in place for contact

between the parties whilst Ms Argall was overseas for six weeks, or even if

Ms Argall was in fact, contactable by Mr Kelly, it would seem the parties

communicated with each other through Ms Clarkson.

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101. According to Ms Kelly, her father asked her (Ms Clarkson) for $10,000 whilst

Ms Argall was away and prior to that, Ms Clarkson could always contact her

mother. According to Ms Argall, that was correct, in that her daughter could

contact her, and in fact, had contacted her.

102. To me however, it appeared not to be a real issue until much later when the

relationship between the parties became strained. Ms Argall’s main issue, as

previously stated, was that she had initially told Mr Kelly that she had a budget

of $60,000 and that her main concern was her front garden. According to Ms

Argall, Mr Kelly had informed her, at the same time, that he could do a

wonderful job for around $14,300 in the back garden.

103. On this issue Mr Kelly stated:

“ Can I also say that Ms Argall is – one of the other things she said earlier on, is the lack of speed of the work that had already been done. So – and in relation to that as well, in relation to the $65,000, or whatever it was. You go and talk to people about these things and they say “My budget is 65,000”, and you turn around and before you’ve finished – and I have done one or two jobs where the people have stuck with their budget.

But in general, people, as things start happening, want more and more things done and that’s precisely what happened with Ms Argall. We were down the back and she kept wanting more and more done”.

104. Once more Ms Argal took issue with Mr Kelly on this point. The exact

exchange was as follows:

MS ARGALL: No, that’s not correct.

MR KELLY: And then when I go out with her, when I take her out to the paving guy to start doing some of the front areas, Ms Argall is not looking at the $40 pavers which are in my additional estimate, she’s looking at $200 pavers.

MS ARGALL: But what’s that got to do with this?

MR KELLY; It’s got a lot to do with it.

MS KELLY: Because he has…(indistinct)..

MR KELLY: It’s to do with your attitude to what the work was to be done.

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MS ARGALL: No, I’m talking about the back garden. My priority concern is how much you committed in relation to my back garden, john. And you never came back to me. It’s all therein your email what was going to happen.

MEMBER: What’s not done in the back?

MS ARGALL: Well he didn’t complete the folly. He had this wonderful concept of a folly with ---

MEMBER: But you didn’t let him complete it.

MS ARGALL: Well only because at that stage, he’d charged costs of – depending on which final invoice you believe – of 32,000 or $38,000 for work that was originally estimated to be $14,300.

MS KELLY: Can I make just two points in relation to this? They’re very quick. One is, the point that we keep making, that you can tell a taxi driver that you only have $60 but if you ask him to go (to) Manuka and then out to Tuggeranong or Gungahlin - - -.

MEMBER: I understand that.

105. Turning to the issue of the actual costs charged by Mr Kelly, the following exchange took place.

MR KELLY: I was asked to do all that paving and Ms Argall knows what paving was going to cost, because we had discussed paving in terms of her front yard and that with a standard paver at about $40 a metre, it was going to cost her somewhere between $100 and- - -

MS KELLY: So - - -

MEMBER: And somewhere along the line, were you concerned that she told you she had $65,000 and you’re talking about doing work far in excess of that?

MS KELLY: Yes.

MR KELLY: It’s not that far in excess, it’s $20,000.

MEMBER: 20,000 is a lot of money.

MR KELLY: Yes, that’s a lot of money to me and it’s a lot of money to everybody. But she’s talking $20,000 in excess, that basically relates to the extra deck that she asked for, right?

MS ARGALL: I’m not arguing, I’m not going to argue about the deck. So can we just leave the deck aside.

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MR KELLY: Well I am arguing about – we’re arguing about - - -

MS ARGALL: Why?

MS KELLY: But the main extra costs are the paving and the deck.

MR KELLY: The deck

MS KELLY: They’re the vast bulk of the main extra cost. Can I just make the second point that I was going to make, where she’s talking about the back garden suddenly being so much more?

MEMBER: Yes.

MS KELLY: The one thing you’d say about a project like this, where you are for example using soil from the front to do the back.

MEMBER: Yes.

MS KELLY: Right. Where you allocate the cost is a little bit fluid, you know, so basically you’re doing it as an economy of scale, so instead of sending all this soil out the front to the tip, and paying to tip it and then buying soil for the back, you move the soil from the front to the back. It was a project.

106. Next, Ms Argall informed me that to get to her figure of $14,300, being her

estimated costing for the back garden, “I just took 50%...” presumably 50% of

the original costing for the watering system and the mulching.

107. The mulching for the back garden however was not an issue. I was able to

ascertain that Mr Kelly did not charge Ms Argall for mulching, at least in the

back garden, but as Mr Kelly pointed out, the reason for that was because “ We

were basically stopped from finishing the job”.

108. In any event, Ms Argall subsequently arranged for someone else to do the

mulching.

109. Asked by me to state just how much he charged Ms Argall for the back garden,

Mr Kelly advised me that it was extremely difficult to allocate, stating much the

same reasons as outlined by his daughter above.

110. According to Ms Argall, the figure was close to $31,000, as she calculated the

front garden costs at $15,538, “… before I terminated the contract…”

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111. At this point Mr Kelly made the following comments:

“ And we did a lot of paving. You’ve got – okay, you’ve got her own witness statement, that says that the value of the work done was 40,000 plus or minus 10%. I did not have a chance to talk to the man who did it, who is okay. I don’t know him, but I understand he’s reasonable. He did not see the concrete he had to cut up. Now cutting concrete’s $50 a lineal metre…”

112. After a short discussion on an independent assessment, which according to Ms Argall, Mr Kelly wasn’t prepared to agree to, Mr Kelly continued as follows:

“ Concrete, as it turns out, that was poured in the driveway, which I had no knowledge of before I started, something between six and eight inches thick. So it took us a long - and because we had to be very careful not to disturb the retaining wall alongside the pool, we had to make sure we cut - it was reasonably expensive. Not that expensive, and the point I’m making here is that Mr Daly, who is the guy, I understand that what he said was 40,000 plus or minus 10%, but he didn’t know what underlying work had to be done”.

113. Continuing on, Mr Kelly further stated:

“And I think the amount of paving that’s down the back – now the folly. I just go back to the very important point, as far as I’m concerned, nowhere in my original estimate did I mention any paving in the backyard. There may have been in relation to the - the link garden an implication that if there was a lot more money spent, we could – it says “The higher standard of paving” – sorry, “ The higher standard of path, the more expensive that’s going to be”.

“But the folly - there is no mention there of paving, right. So the actual paving of the folly, which is about - what was it - it’s about 30 square metres, plus the associated work to retain the paving, basically takes up all the $3,000 that was allocated for it”.

114. After some comments about the actual quoted price for paving, the following

conversation, which was along lines previously detailed above, took place:

MS KELLY: In relation to the whole back garden issue, we just keep relying on two things, the witness statement we’ve got that says “there was a conversation where dad did keep saying, that will cost more, that will cost more, and she was saying ch-ching, ch-ching”. Now if she wants to dispute the witness statement as evidence that that conversation, that obligation to tell her how much more - - -

MEMBER: Well I mean everybody accepts if you are summonsed to do additional work, it’s going to cost you.

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MS KELLY: Well we would have thought so, but clearly apparently you can ask for additional work and not pay - - -

MEMBER: But at the end of the day, Ms Argall got upset enough to cancel the contract. So something was upsetting her.

MS KELLY: Maybe before she paid all the money for all that being done, she might have said that she was upset about it, before requesting additional work and then not paying for it.

MR KELLY: She requested - - -

MS ARGALL: That - - -

MR KELLY: About the beginning of – about halfway through June she requested a whole lot of extra work around the pool fencing and to do with her clothesline, and a whole bunch of stuff which ended up costing about $7,000 or $8,000.

MS ARGALL: That’s rubbish John. Absolute rubbish.

MR KELLY: No, no no, you asked for it to be done.

MS ARGALL: No.

115. On this issue, I was fully aware of the handwritten note that Mr Kelly states was

given to him by Ms Argall in June 2009 (Attachment E referred to above). That

note contained the following instructions.

Build steps to lemon (?)Finish pool paving & pathsPave to clothesline with pool pavers(any spares ----> stepping stones to flat rock)Clean up pool fence gardenReplant existing plants & provide plans for additional plantingsNo further work on folly except for plantings Pave path at link garden with existing pavers & bricksUse excess soil on mounds for back garden & fence pool

(Note: Ms Argall’s explanation as to why these handwritten instructions wereprepared is explained by her below.)

116. Mr Kelly then informed me that “You know, we’ve actually got the break-up

day by day of the costings associated with that, because at that stage I was

keeping a very close eye on it - - -

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117. Ms Kelly informed me that that her father and Ms Argall were working on the

running or budgeting sheet together. Ms Argall’s reply to that comment was as

follows:

“That was prepared as soon as I came back from overseas when I raised my concerns when Mr Kelly told me at that time that there were costs of $30,000. So we arranged a conversation. The first time Mr Kelly was available for that was 2 June. I recall it vividly, it was my birthday, and I really didn’t want to be sitting down having an aggravated conversation about costs. Mr Kelly never accepted any responsibilities for the fact that his costs had increased by 100% on nearly every item.

118. I then asked Ms Argall to point out to me just where costs had increased 100%

on nearly every item as alleged by her. That question led to the following

exchange, which was typical during the proceedings as a whole.

MR KELLY: That’s just simply not true.

MS ARGAL: It is true.

MR KELLY: It is not.

MR KELLY: It increased on mainly the paving and the deck. They are the big increases in costs if you go through those sheets.

MEMBER: But your costs did include, didn’t you –because at one stage there there’s an email from 29 July - - -

MR KELLY: 29 July?

MEMBER: - - -where she goes through – where you’ve got another $5,000 bringing it up to $40,000.

MS ARGALL: Consistent with the independent assessment.

MEMBER: Yes. And then it goes on saying:

“On costs generally, I never agreed to loadings on material. It would seem your costs includes substantial premiums on things like sleepers and timber, and hence probably other suppliers”.

You see, what you’re doing is cost plus 10%. Do you see/ is that right?

MR KELLY: Something of that ilk. It’s in the statement. It depends on what it was.

MEMBER: It’s still cheaper than retail? Is that - - -

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MR KELLY: That’s with the watering equipment, much cheaper than retail.

MS ARGALL: They’re not significant costs, in any event.

MEMBER: (Still reading) “ I have agreed to design consultant fees and no design” – well wait a minute:

“ Your schedule of costs to end May discussed at our meeting on 2 June was $27,000, or $27,000 not $31, 750 as later provided. This delivers a total of $43,353 and not $46,000”.

But I mean, you’re still talking about $3,600. That’s a substantial amount of money that seems to have been, even when you’ve had a meeting and agreed on something, that both go away with a different concept of what had happened, is that right?

119. My question, not surprisingly, did not elicit a ‘yes’ or ‘no’ response from either

party.

120. Ms Argall did however proceed to list all the areas of work that, according to

her, were unauthorised. That conversation proceeded (with continued

interruptions) as follows:

MS ARGALL: An unnecessary retaining wall built to the folly area.

MR KELLY: Not unnecessary.

MS ARGALL: With the promised work undone.

MEMBER: But was it discussed?

MS ARGALL: No, never discussed.

MS KELLY: Could we answer that later (?) straight off?

MEMBER; Well, wait, let her just - - -

Ms ARGALL: Extensive areas to the pool lifted but not replaced with damage to the edges. And that required some additional work to be done later with concrete pavers to maintain them.

MEMBER: But that’s work that he wasn’t given an opportunity to complete.

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MS ARGALL: Yes. No, he did that. Paving to the clothesline lifted but not replaced. Never discussed lifting up an area of paving to the clothesline, but it was all up when I came back from overseas.

MR KELLY: I think we at this stage - - -

MS ARGALL: So I had - - -

MEMBER: I’ll give you a chance - - -

MS ARGALL - - - lots of paving - - -

MS KELLY: I’m just writing it down

MS ARGALL: Lots of paving - - -

MR KELLY: Okay.

Ms ARGALL: - - - lifted not replaced. The link path was actually, you know, dumps of soil with a curvy path between it and - but, you know, no paving.

MEMBER: But that got fixed in the end.

MS ARGALL: Yes, it did get fixed in the end.

MEMBER: With a pave.

MS ARGALL: But at that stage with a bill of $32,000 that was. These were the issues that I raised in my concerns with Mr Kelly on 2 June. I immediately had those conversations. I immediately sought to limit my further costs, which meant I had to stop doing other work that had been promised and seek completion of necessary work and the work that had been commenced but not completed. Mr Kelly has never been prepared to have a reasonable conversation about the costs.

121. At this point, I was moved to remark that after watching both Mr Kelly and

Ms Argall, it was my view that they could not have a reasonable conversation

with each other. Both parties agreed with me.

122. Turning to the issue of communication between the parties during Ms Argall’s

absence overseas for six weeks, Ms Argall acknowledged that whilst she did not

get any emails from Mr Kelly, she did get emails and phone calls from her

daughter about the work. She was however, never asked for permission to do

any additional work by Mr Kelly.

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123. Ms Argall’s exact words in answer to my question on this issue were as follows:

“ No. Nothing. Apart from in Calcutta when I was on my way home when she said that John had asked her for $10,000. I said “How’s it going darling?’ she said “Oh”. Anyway, as it happened she couldn’t - and I wouldn’t have objected. At that stage I’d paid $5,000.

124. After I asked if she in fact gave her daughter the $10,000 to give to Mr Kelly

and Ms Argall advising me that her daughter had difficulty accessing her

account she made the following additional comments:

“ I would have thought $15,000 was a reasonable amount of money.

But I immediately got home to bills of $30,000. There was nothing from John to tell me that those were the costs. In fact, his first invoice was the end of May and we sat down to discuss them on 2 June. So I don’t think it’s reasonable for John to say “She agreed to all of this extra work” and that there was some sort of blank cheque. Nobody operates in that – you know, on that basis”.

125. I then asked Mr Kelly to tell what he had to say about the retaining wall and the

pavers. That question elicited the following conversation, of which I have only

reproduced the parts dealing with the actual work undertaken:

MR KELLY: The unnecessary retaining wall and the pavers in the folly?Right. That’s very simple. Ms Argall asked for the folly to be paved. So I have to retain - it’s a concrete slab with edges coming off the side, right? Just a concrete slab like this table. With edges two – three of the edges (or as his daughter pointed out) …drops. Off the side. The back one - - -

MEMBER: You’ll have to tell me what a folly is. I don’t really - - -

MS ARGALL: It’s just an area - - -

MS KELLY: Like a fancy little looky thing in the garden.

MR KELLY: The retaining wall which she’s talking about I made from bits and pieces of old material which I found on her block, bits of concrete and whatever else to retain, to help retain the edges of the paving. It probably cost about $200 to $300. It was not a major exercise.

MEMBER: And what, and then you filled that up with dirt and you - - -

MR KELLY: Yes, so that - - -

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MEMBER: You had to do that, otherwise it’d be dirt against the fence and it would rot.

MR KELLY: Yes, that’s right.

MEMBER; But did you tell her you were going to do it?

MR KELLY: I didn’t. It was within the context of doing the folly.

MEMBER: Right.

MR KELLY: Of doing the paving for the folly and getting plants to grow up over the folly, which is what she eventually wanted.

MEMBER: All right. Lifting the pavers to the - - -

MS KELLY: Paving lifted but not replaced at the pool.

MR KELLY: Paving lifted but not replaced at the pool.

MS ARGALL: Extensive paving. More extensive than necessary.

MR KELLY: Okay. The paving was lifted. There was substantial subsidence all the way around. The whole thing had been washed out underneath. We, as part of the work we were doing and looking at a few other things that Ms Argall had asked for, such as some seepage drainage in the back yard, we were making sure that we could divert all the water from out the front down into the back garden. It was a drought. Right?

126. Mr Kelly then confirmed that only the overflow would flow into the storm water

“ …if it was too high”. He then informed me that the storm water itself was blocked, and that the actual storm water pipe went under a piece of the paving, so they decided not to relay the paving until the problem had been fixed, otherwise it may have to have been re-dug up.

127. I then asked Mr Kelly if he had told Ms Argall about the reasons for not re-

laying the pavers, or the problems with the storm water. Mr Kelly’s reply was

as follows:

“She knew. She talked to the plumber. She spent a day. The plumber was there for a full day sorting this out. She knew full well what this - - -”

128. Mr Kelly was cut off by Ms Argall stating that her issue was that Mr Kelly took

out more paving than was necessary to deal with the subsidence, and that it

didn’t (the subsidence) have anything to do the drainage around the pool. I did

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however, accept that Mr Kelly would have more expertise than Ms Argall on

this issue.

129. Returning to the issue of work carried out, or not carried out in the back garden,

the conversation continued as follows:

MS KELLY: The next one is the paving to the clothesline.

MR KELLY: Okay. The paving to the clothesline. Okay. The paving to the clothesline was made out of the same pavers as the pavers that she had there anyway. Ms Argall wanted the paving, the folly - sorry, the link path done in those pavers. I had exhausted at that stage any avenues I had for getting extra second –hand pavers of similar types, and we had discussed - and I discussed it with you (Ms Argall) – taking those up and replacing them with pavers, spare pool pavers that she’d had, so we had a continual -so around the pool you come down to the clothesline, you’re on exactly the same sort of pavers. And those pavers then were taken up and provided just enough pavers for us to finish building the path.

MS ARGALL: John, that discussion was after I got back from overseas when the paving had already been put down.

MR KELLY: No, it was – sorry.

MS KELLY: You just- you disagree.

MR KELLY: Well, you say one thing, I say the other. And the other thing, the - - -

MS KELLY: The link path not yet laid.

MR KELLY: Well, this is the nature of - I‘m doing a landscaping job. Okay? I’ve got everything set up to do it. I’ve got soil in whatevers, I’ve got the path laid out. Everything’s ready to go. You know?

MS KELLY: There’s a lot of groundwork.

MR KELLY: There’s a lot of groundwork in these jobs. What am I being - what am I being accused of here?

MEMBER: I don’t know. Tell me a bit about yourself. You’re a landscaper. How long have you been a landscaper for?

130. Mr Kelly then gave me a brief outline of his career path and his qualifications or

more correctly, his work experience. He informed me that he had been in the

nursery industry for 30 odd years and had been doing landscaping jobs for about

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10 years. He was currently transitioning to garden design work and that was the

reason he had been in England.

131. He also confirmed that he gave a cost estimate, rather than a firm quote, because

a quote had a 10 to 15% contingency component built in, that the customer

eventually paid for, whether such a contingency arose or not. It was, however,

according to Mr Kelly, the client’s choice as to which method was to be used.

132. Asked by me as to whether or not he had a “meeting of the minds” with Ms

Argall and she knew exactly where she stood cost wise, Mr Kelly referred to a

similar sized job, that was done on a quote basis. Mr Kelly stated that there, he

had documented every piece of the job for exactly that reason, but in this matter

he wasn’t as specific.

133. He did, however, make the claim that Ms Argall was well aware of the method

of charging being used in her case as before she went overseas, they had spent

the day talking about it.

134. Mr Kelly later admitted to “…boasting a little bit to my mate” about

Ms Argall’s garden make- over being a $100,000 job, a boast to my mind which

basically led to the undermining of Ms Argall’s confidence in him to a marked

degree.

135. When asked by me if he could understand Ms Argall getting really upset when

that comment was relayed back to her, he actually stated that he could not. To

me, his reply showed a lack of comprehension on his part, for his actions, and

his attempts to justify the comment were incredible to say the least.

136. When I referred Mr Kelly to the report that stated the steel used on the paving

border would rust (Ms Argall had used the expression, ‘unhaunched and

exposed metal edges to paving’ in her response.), he stated that that was

“garbage”. He went on to state that he had put in steel edges out in Pialligo 30

years ago and that they were still okay.

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137. Mr Kelly also stated that they used steel in England all the time, and that “…

steel is a bit more expensive to use actually”.

138. Mr Moller comments on this issue in his statement. According to him:

“The paving at Ms Argall’s is perfectly satisfactory. Mr Bayly was critical of Mr Kelly not battering the edges on the curving path but ignored the fact that Mr Kelly had used a more expensive, better and more long- term flexible method of securing the edges. I have discussed this with Mr Kelly who informs me that the approach of using steel gives the edge the strength and flexibility of the steel, makes the edge self supporting and interlocking whereas battering is only as strong as it’s weakest point. He also said the steel also aids in providing a natural and pleasing catenary curve and is far easier to repair or replace should Ms Argall need to get a dingo down the back which was one of her requirements.”

139. In the absence of any evidence to the contrary, I accepted that the steel edging

used by Mr Kelly provided a satisfactory finish to the paving edges and did not

require additional work.

140. I also accepted that the front deck, as constructed, was much larger than

originally planed for, and therefore the costs for this item were initially under

estimated.

141. Asked by me to explain why he hadn’t finished the deck, Mr Kelly, after

considerable prompting stated that “ my answer is we could not finish it until

such time a what was happening in the adjoining carport was determined

because I had to build steps”. According to Mr Kelly, he was sacked before he

could build the steps, and do the other necessary work.

142. For her part, Ms Argall stated that Mr Kelly was supposed to finish the deck

before he left and he was also supposed to finish the irrigation. When I

questioned her why she hadn’t got him back, she stated, “ I was getting

threatening emails. I really didn’t want to talk to Mr Kelly at that stage.”

143. I then asked Mr Kelly if his original estimate of $40,000 was near the mark for

the front garden. Mr Kelly stated that he actually offered to do the original work

in the front garden as specified in his original specifications for $40,000 apart

from the deck.

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144. Ms Argall disputed this claim, saying that his last quote was between $87,000

and $94,000 for the total job. Whereas Ms Kelly claimed they were two

different things.

145. Next, when I asked Ms Argall to point out or say where the “poor finish” was,

she stated, ‘Well, the quality of the pavers just”. Mr Kelly’s reply to this

comment was “Okay”, to which his daughter firmly stated, “ But Dad, Mr

Dailey doesn’t seem to think it’s a poor finish.

146. It is also interesting to note Mr Mortimer’s comments in relation to the

particular items that have been set out above in relation to the back garden.

From all accounts, Ms Argall was happy with the work carried out and would

often sit and watch the workers.

147. In relation to the pathway I described as “crazy paving”, Mr Kelly said that once

more he did it at Ms Argall’s request. His actual evidence was that he informed

Ms Argall that he had, ”...these broken bits and pieces of paving left over.

Would you like me to take these to the dump? Or I can quickly throw together a

little path from there to there because you’re going to get rid of that (the

asbestos shed) eventually”. Mr Kelly went on to state that he didn’t charge Ms

Argall for that particular piece of paving. Ms Argall’s comment was “I’ve been

charged for the – all the time that’s been used on the job, John.”

148. When I asked Mr Kelly why he hadn’t given Ms Argall the plans beforehand, I

was advised that he didn’t have the skills at the time, and that was what he had

been learning overseas.

149. Next, I asked Ms Argall what happened when she got to the point of thinking

“I’m not going on with this”. Ms Argall’s reply and the subsequent conversation

is set out below:

MS ARGALL: We were essentially in dispute from the moment I got back from overseas, and what I sought to do was draw a line under the work that had already been commenced which meant - - -

MEMBER: Why didn’t you sit down there with him then and work out say what’s the absolute top – this is what I’ve got, this is all I can afford.

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Didn’t you do that and then go through and say what work wasn’t going to be done and what you were going to cut back on?

MS ARGALL: Yes, and that was what Mr Kelly’s relying on in my email which you can see, it’s very rough and probably written in anger, which says “Back garden Attachment E”, this handwritten thing. Build steps to the lemon tree. We had to be able to get down to the back. These were things we’d already discussed.

Finish the pool paving and the path, okay, like finish re-do it. Pave to the clothesline, which had all been pulled up, can’t get to my clothesline through the dirt, with the pool pavers with any spares to be used as stepping stones down to the – the back was three stepping stones, not a biggie.

MEMBER: But a couple of times he said “Look we don’t want to end up in court, let’s sit down and work out something we do….”.

MS ARGALL: This was later.

MEMBER: Was it?

MS ARGALL: Yes.

MS KELLY: Which bit was later?

MR KELLY: Which bit was later?

MEMBER: Where you wanted to work out to avid coming before the tribunal, work out a solution.

MS ARGALL: Well Mr Kelly never been - Mr Kelly has never tried to avoid coming here, but anyway so - - -

MEMBER: I thought he did, I thought he wrote that.

MS ARGALL: He wrote a proposal which offered savings in the future.

MEMBER: In one way but more - - -

MS ARGALL: And I think you might appreciate where I was at that stage.

MEMBER: YES.

MS ARGALL: I had double the cost for the back garden, how could I possibly accept any further representations as trusted him (?) at this point.

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MEMBER: Do you accept that it’s a stretch to work out in this documentation where Mr Kelly’s costed out the paving that you got, or the steps that you got, they’re not in - - -

MS ARGALL: In his original proposal - - -

MEMBER: Not there, not costed.

MS ARGALL: No. Well it’s not specifically mentioned.

MEMBER: It’s not costed.

MR KELLY: It’s not implied either.

150. Ms Argall then went on to explain that prior to Mr Kelly coming along,

substantial work had already been done on the back garden, including

installation of a pool and paving surrounds and a number of stone walls had

been put in.

151. Ms Argall went on to state that $14,300 was a lot of money, and it was obvious

to me that Ms Argall believed, at least initially, that that amount should have

been sufficient to cover the costs for a quick makeover of the back yard, as

proposed by Mr Kelly.

152. Ms Argall’s views on this matter have already been set out in some detail above,

but I also considered the following discussion informative:

MS ARGALL: When we first talked about this, it isn’t explicitly mentioned, I agree it’s not explicitly mentioned, so therefore I am a bit vulnerable in relation to that issue. But when we first walked down the back I wasn’t intending to do anything in the back yard.

It was Mr Kelly who said “Oh look there’s some wonderful opportunities here, we can take up this paving because it’s a bit of an eyesore, we can use that on the folly area and we can do it on the major part”.

MEMBER: But you know that’s going to cost.

MS ARGALL: At that stage, that’s before he put in this proposal. So it’s not unreasonable for me to expect - - -

MR KELLY: All right, well hang on - - -

MS ARGALL: - - - that it is included in the proposal, so I have always assumed that that was the case.

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MR KELLY; But it’s not costed.

MS ARGALL: I accept that there was – when I returned there was a path around the back which we did have a discussion before I went away and I said “ No, I don’t need a path there”. But when I saw the other path I did ask for an informal path that went around the back of the garden to join up with the existing path which I thought was part of the original cost.

Now I just repeat again, at no stage did Mr Kelly advise me, in any size, shape or form, that it was going to be additional. No emails while I was away, not included in his email of 5 April - - -

153. Next followed a discussion on paving costs, but for a different area. That

discussion, although brief, did highlight for me the cost of paving, and the fact

that Mr Kelly’s paving costs had been discussed with Ms Argall.

154. Mr Kelly then informed me that he disagreed with Ms Argall’s account of their

initial discussions. According to him they had a quick look at the garden and

then he “…gave her a proposal, and from there on we talked about it, and it got

expanded by Ms Argall as per my email of 5 April.”

155. However, once again the parties failed to agree on a simple issue, which is

demonstrated by the following conversation between Ms Argall and myself, but

with her initial response directed to Mr Kelly:

MS ARGALL: Did we walk down the driveway, and did you say you could re-use - you should take this up, and I said, “ Why would I want to take up paving?” and you said “You could re-use it on the folly floor and around the garden”. If that was what - - -

MEMBER: But it does say “An appropriate informal garden including the removal of the paving could be constructed for around $5,000 - $3,500”. That’s not removal and re-laying.

MS ARGALL: It was based on all of his representations to me. It was my assumption that it was and he hasn’t subsequently advised me – we’re talking about costs that went from $14,500 to $32,000. Now he has a responsibility to tell me that.

MEMBER: And I’m not suggesting you’ve done that, but I mean I’ve been tempted to do something and I thought “I’m getting that cheap” and you know well I’ll keep my mouth shut or ask “Is that right?’, you know. And you have to enquire, you have a responsibility - - -

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MS ARGALL: Benefit of hindsight, I agree.

MEMBER: And that’s not what you did. You didn’t do it.

156. The discussion then turned to Mr Kelly’s claim itself, with Ms Kelly claiming

that the $46,695 was for “…work that we’ve done, and billed and that we

should be paid for it”. Mr Kelly then added words to the effect that the last

$8,000 of that figure was for work done after Ms Argall’s last payment.

157. After I informed Mr Kelly that I didn’t “…like his other chances ” which was a

reference to the other additional items in his final account Mr Kelly stated,

“Well there is (a) former personal relationship in all of this, Ms Argall was

being rather antagonistic, you might think I’m antagonistic”.

158. 160. I then asked Mr Kelly “Did you, when you got sacked – I know you were

put out with the whole thing – did you say “Look, can’t we work this out? Can I

go back and finish the deck, I’ll do this and do that?”, to which Mr Kelly

replied, “Yes, in my proposal, in my quotes, I asked her – I had sent her a

proposal - have you got it there?”

159. For the record, Attachment H which was Mr Kelly’s or Ambience’s “proposal

for compromise” contained, in an attached document, detailed proposals put

forward by Mr Kelly to enable him to complete the works undertaken by him at

Ms Argall’s address. I don’t believe that Ms Argall responded to those

proposals.

160. The document which was addressed to Ms Argall, also contained the following

comments:

“ I have received quite unsolicited comments as to the excellence of the design in the back yard, and the plan now arrived at for the front is very good and is our joint intellectual property. The problem is that the full implementation of the design is going to cost around $25,000 to $30,000 more than the “preliminary estimate” due to additions and modifications simply not envisaged in the original concept on which the preliminary estimate was based. This extra cost largely comes from 4 things:

The construction and paving of paths in the back yard added around $8000

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Doubling the size of the deck and it’s structural strength added around $6000

The steps and paving from the front door plus the paved area next to the parking adds another $7500 (quote figure minus work originally envisaged)

You specifically added the very rear steps and work around the pool costing around $3000

161. I was aware that this document was headed “Without prejudice”, however it was

included in the bundle of documents submitted by each party in their original

pleadings, and no objection was raised as to content at the hearing.

162. Turning back to the evidence given by the parties at the hearing in relation to

the sum of $8,000 claimed to be for work commissioned by Ms Argall after her

final payment, and the rear steps referred to above, Mr Kelly stated that this was

for “….additional work, none of which, most of which is not in any way related

to the original proposal. Ms Argall made the statement that the steps down the

back were necessary. I specifically asked her when we were trying to cut costs

whether she wanted those steps. They are $1,000 or so. She said,” Yes, I must

have them”.

163. After that statement from Mr Kelly, the following conversation took place:

MEMBER: But you tell me, when you costed out everything, and the work that you’ve done and the value of that work, have you at any stage ever given Ms Argall something saying this $46,000 is made up of this?

MR KELLY: Yes, because each time she got a bill, she got something similar to this.

MEMBER: And that doesn’t include work, you know when you wanted progress payments for the $5,000? You hadn’t done anything at that stage?

MR KELLY: That was just a starting.

MEMBER: But is there anything you’ve been paid for work that you didn’t do?

MR KELLY: No. No, not at all.

164. After argument to and fro about just what was included in Mr Kelly’s last

invoice, (see Attachment G), I indicated once more that I was not of a mind to

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allow certain of Mr Kelly’s itemised charges or fees. For completeness, I have

set out those items that I disallowed in full, but one needs to be mindful of the

fact that Mr Kelly had to abandon $3,110 when choosing this jurisdiction:

Revised charges to bring mark ups to schedule $1,220.00Design, consultancy and other services $1,925.00Loss of profit on balance of original contract $3,000.00

165. On this issue, I agreed with Ms Argall that those three claims were “spurious”.

That left an amount outstanding of $6, 965.00, after deducting payments

totalling $40,000 already made by Ms Argall.

166. I did not however form the view that it was reasonable for Ms Argall to merely

assume that all the paving costs, additional or not, were included in the costings

for the original proposal.

167. After taking into account Ms Argall’s claims that she was charged for plumbing

(a claim denied by Mr Kelly), and had to expend further moneys to fix the

watering system ($240), in addition to some other work that may have needed

minor rectification, I asked Ms Argall if she considered $46,000 to be a fair

amount for the work Mr Kelly had done. At the same time, I also reminded her

of her obligation to minimise her damages, and the fact that she didn’t give

Mr Kelly a chance to carry out any rectification work. Her answer was “ No, I

don’t believe so”.

168. I then reminded Ms Argall that her independent assessor had valued the work

carried out by Mr Kelly and his employees at “$40,000 plus or minus 10% “,

and that there was no real dispute about the quality of the work.

169. Ms Argall did however, have issues with the valuation, claiming it had been

rounded up to $40,000 from $35,000, but she was unable to substantiate her

claims.

170. In relation to that assessment, I would highlight the following paragraph of

Mr Bayly’s comments, as contained in his statement set out above:

“After much measuring and deliberation Mr Daley verbally supplied a figure of $40,000.00 (give or take 10%). This result was provided to Ms

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Argall and Mr Kelly, both of whom I called directly after the meeting ended. Mr Kelly was happy with the verbal figure provided by Mr Daley”.

171. For the record, I will state that I was satisfied that Mr Daley was truly

independent and was in fact engaged at Ms Argall’s request by her witness, Mr

Bayly and that he was not known personally by Mr Kelly. Ms Argall’s comment

that “It was his mates that did the independent assessment”, was not supported

on the evidence.

172. I was also satisfied that the estimation or valuation of the work done may well

have been conservative, in view of Mr Kelly’s evidence, and statements made

by his witnesses.

173. I believe it important to state that I accepted what each of the six witnesses had

to say as being their recollection of certain events concerning the make-over of

Ms Argall’s front and back gardens.

174. I was also satisfied on the evidence before me that Ms Argall commissioned,

authorised or acquiesced to most, if not all the work carried out at her property

by Mr Kelly and his team. I was also satisfied that anything not specifically

authorised, was only carried out because Mr Kelly and his team deemed the

work necessary.

175. In view of the above, and in particular, in view of the independent assessment

provided by Mr Daley, I decided that a sum of $5,000 was sufficient to

recompense Mr Kelly for his outstanding fees and charges, notwithstanding that

Ms Argall engaged Mr Kelly on a cost plus basis.

176. Mr Kelly acknowledged his agreement with my decision, whilst Ms Argall

argued that $4,000 was more in keeping with the independent valuation. I was

not however, prepared to bargain with her over the $1,000 difference

177. In view of the circumstances surrounding this matter, I decided that it would be

unfair to award costs against Ms Argall or order her to pay interest on the

$5,000. Both Mr Kelly and Ms Kelly acknowledged their agreement to my

decision on this issue.

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178. Ms Argall was given 28 days to pay the sum of $5,000.

179. Mr Kelly also agreed to review his business practises in light of this case. His

failure to provide detailed plans of his proposals was the subject of some

discussion during the proceedings and was also the cause of considerable angst

to Ms Argall.

COUNTER CLAIM

180. In her counter claim Ms Argall stated that she had already paid Mr Kelly

$40,000 which she believed to be fair, given the representations made by

Mr Kelly, the work commissioned and the work actually performed.

181. Further, Ms Argall stated that she was prepared to do this to resolve the dispute

and sought independent advice to that end, and that she also sought to contain

costs immediately she was made aware of over-runs.

182. 184. Finally Ms Argall stated that, “In light of Mr Kelly’s claim, I now seek to

claim reimbursement of monies paid in good faith to the value of $10,000 as

damages for misrepresentation, defective and unauthorised work and work

promised but not delivered”.

183. After hearing both parties evidence, I dismissed Ms Argall’s counter claim.

184. I did not believe that the evidence before me supported a claim for damages for

misrepresentation.

185. Further, that to me, whilst there was some evidence of minor rectification work

being carried out or required, the bulk of the counter claim was as spurious as

Mr Kelly’s claims in respect of the three items disallowed by me and referred to

in some detail above.

186. Ms Argall was required to outlay $240 for repairs to the irrigation work carried

out by Mr Bayly. Apart from this sum there was little or no evidence of any

costings for other minor rectification work. In any event, I took those claims

into account when I discounted Mr Kelly’s bill by $1,965.00.

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187. In the response filed by Ms Argall on 11 December 2009, she made mention

that although she had brought her total payments up to $40,000, she had not

made any provisions for correcting defects, in particular:

i) An unfinished, incorrectly piped and laid irrigation. ii) Unhaunched and exposed metal edges to paving; and

iii) An unfinished deck.

188. Also, according to Ms Argall, it did not include discounts for decisions Mr

Kelly made while she was away, or ongoing inconvenience because of the

delays. That inconvenience was never articulated or costed out by Ms Argall.

189. Granted some tasks started by Mr Kelly and his employees were not completed,

including the front deck and the irrigation. The reason for this was, however,

because Ms Argall terminated Mr Kelly’s services and hence the contract

between them. There was no evidence that Ms Argall was ever charged for

work not done, including work not done on the deck.

190. In addition, after hearing Mr Kelly, I was not satisfied that the untreated or

‘unhaunced’ metal edges as installed by him were in fact, a defect. (See,

comments above at paragraphs 136 and 139).

191. Ms Argall went to some lengths to emphasise that her main concern was the

front garden and that her total budget was $60,000, of which, initially at least,

$40,000 was for that area. Ms Argall then argued that the initial costing for the

back garden, after discounting the back deck was $14,300. However, for

whatever reason, substantial additional work was either commissioned or

required, involving substantial additional cost to Ms Argall.

192. Mr Kelly costed out this additional work at $28,000 in his original pleadings.

193. An example of additional work deemed necessary or required, was the fixing of

the identified significant subsidence around the pool. Ms Argall’s consent was

obtained, and a solution provided by Mr Kelly and at least one of his

employees.

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194. I have already noted that Ms Argall was ‘alarmed’ at the costs incurred by her in

respect of this work, especially in view of her overall budget. Nevertheless, it

was my finding that she commissioned that work, or as I have previously stated,

acquiesced to it being carried out.

195. I therefore considered Ms Argall’s continued assertions that Mr Kelly and his

employees carried out substantial unauthorised work at considerable cost to her,

or that later commissioned work was covered by the original costings, to be

disingenuous, especially in view of the considerable weight of evidence to the

contrary.

196. Finally, it would be remiss of me not to mention a concern I have about whether

or not Mr Albert john Kelly was the proper applicant to these proceedings.

According to the documents filed, Mr Kelly is named as the applicant, and

during the proceedings I presumed that Ambience was the business name he

traded or carried on business under.

197. However, I have since studied the tax invoices attached to Mr Kelly’s

application in greater detail, and hence became aware that a company named

Bomifall Pty Limited was the correct legal entity trading as Ambience Garden

design.

198. This fact was not mentioned or referred to by either party during the

proceedings.

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199. This of course does not affect the fact that on 25 August 2010 I entered

judgment for Mr Kelly in the sum of $5,000. That judgment stands unless or

until otherwise set aside.

………………………………..P R ThompsonMember

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PUBLICATION DETAILS

TO BE PUBLISHEDTo be completed by Tribunal Staff

PART A

FILE NUMBER: XD 09/1294

PARTIES, APPLICANT: Albert Kelly Self

PARTIES, RESPONDENT: Ms C. Argall Self

COUNSEL APPEARING, APPLICANT

COUNSEL APPEARING, RESPONDENT

SOLICITORS FOR APPLICANT

SOLICITORS FOR RESPONDENT

TRIBUNAL MEMBERS: Mr P.R Thompson

DATES OF HEARING: 25 August 2011

PLACE OF HEARING: Canberra ACAT

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS:

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