RINTOUL v HARDING [2017] NZHC 2638

RINTOUL v HARDING [2017] NZHC 2638 [27 October 2017]IN THE HIGH COURT OF NEW ZEALANDWHANGAREI REGISTRYI TE KŌTI MATUA O AOTEAROAWHANGĀREI TERENGA PARĀOA ROHECIV-2017-488-000072[2017] NZHC 2638UNDER the District Courts Act 1947IN THE MATTER of an appeal against the decision of theDistrict CourtBETWEEN KENNETH ALAN RINTOUL ANDPHYLLIS RINTOULAppellantsAND ROGER DANIEL HARDINGRespondentHearing: 25 October 2017Counsel: RC Mark for AppellantsGA Day for RespondentJudgment: 27 October 2017JUDGMENT OF DOWNS JThis judgment was delivered by me on Friday, 27 October 2017 at 1 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors/Counsel:Richard Mark, Kerikeri.Law North Ltd, Kerikeri.A recalibrated appeal[1] Mr and Mrs Rintoul very much liked the kitchen made by Mr Harding fortheir friends, the Crowes. Mr Harding is a cabinetmaker. He works alone.[2] In late 2014 Mr and Mrs Rintoul entered an oral contract with Mr Harding to build and install a new kitchen in their home. Mr and Mrs Rintoul were to supplythe finishing timber—rimu. The project took longer than anticipated. On5 November 2015 the Rintouls cancelled the contract. On 15 December that yearthey issued proceedings against Mr Harding in the District Court claiming $45,000general damages, $25,000 special damages, interest and costs. Mr Hardingcounterclaimed for $9,728.18, the sum owing on an unpaid invoice.Judge D J McDonald dismissed the Rintouls' claim. The Judge upheld Mr Harding'scounter claim.1 Mr and Mrs Rintoul appeal.[3] Mr Mark's written submissions contended the Judge erred in fact inconcluding there was no agreed price or completion date. However, at the hearing,Mr Mark accepted it was "very difficult" to sustain this argument. Mr Markrecalibrated the grounds of appeal. He submitted ss 30 and 31 of the ConsumerGuarantees Act 1993 required Mr Harding to complete the kitchen within areasonable time for a reasonable price. It followed when Mr Harding had not doneso, the Rintouls were entitled to cancel the contract on the basis those terms wereessential. Mr Mark also contended Mr Harding repudiated the contract by makingclear he would not complete the kitchen until Mr and Mrs Rintoul paid hisSeptember invoice.[4] Mr Day resisted the appeal relying on the Judge's findings and reasoning.And, on the basis it was disingenuous for the Rintouls to complain about Mr Harding's idiosyncratic approach when that very feature had attracted them to hiswork.1 Rintoul v Harding [2017] NZDC 11598.Background[5] This account of the background is based on the Judge's factual findings,which are no longer contested.[6] The Rintouls and Mr Harding first met in late October or early November 2014. The Rintouls wished to see if Mr Harding was available and interested in thejob. Mr Harding was available—but also reluctant. He did not like "doingkitchens".2 Mr Harding also had other work to complete, including for the Crowes.They and the Rintouls applied what the Judge described as "gentle pressure" to takethe job.[7] A contract was entered during a second meeting at the Rintouls' home in November 2014. Mrs Rintoul had plans she showed Mr Harding. These had beenprepared by a kitchen making company. The contract was not reduced to writing.Hence the litigation.[8] Judge McDonald accepted Mr Harding's evidence he would build and installa kitchen for the Rintouls:(a) On an hourly basis, at a cost of $45 per hour.(b) Progress payments were required.(c) Materials beyond those supplied by the Rintouls were an additional cost.(d) There was no fixed completion date.[9] The Judge's conclusion is consistent with a diary entry made by Mr Harding.[10] On 1 December Mr Harding sent an email to the Rintouls:Been thinking more on the payment side of things probably better to do a forward payment of 4 k, then 8 k at the beginning of january and another2 Rintoul v Harding, above n 1, at [13].payment at the start of February by then we should have a real good idea ofthe costs.The Rintouls did not respond.[11] The Rintouls paid Mr Harding $4,000 on 4 December 2014; $8,000 on 2 February 2015; $4,000 on 22 March 2015 and $5,000 on 29 April 2015. Or, a total of $21,000 by the end of April 2015.[12] Throughout the project, Mrs Rintoul sent Mr Harding many emails. Some related to detail, which had not been settled when work began. Design changes were made along the way.[13] By April 2015 the Rintouls began to express anxiety about progress. Forexample, on 7 April 2015 Mrs Rintoul asked Mr Harding for "a timeline to when youcan start fitting [the] kitchen". Mr Harding replied that day he could "probably setbases in at [the] end of [the] week".[14] On 4 May 2015 Mrs Rintoul sent an email to Mr Harding:Hi Roger, Could you please give Ken and I a break down of what has been done, matched with the costs to date. When island will be finished and in place. What has been completed. What is left to do. What time frame to complete job. Regards Phyllis[15] On 6 May 2015 Mr Harding responded. He annexed a handwritten documententitled "Estimate". That document implied a further 214 hours of work wererequired at a cost of $10,930 (including materials). Mr Harding estimated he wouldrequire seven weeks more week to complete the kitchen, assuming he was able towork 30 hours per week.[16] On 17 June 2015 Mr Harding sent the Rintouls an invoice for the weeksbetween 10 May and 14 June 2015. The invoice was for $5,803.59. Mr andMrs Rintoul promptly paid. By then, they had paid a total of $26,803.59.[17] On 8 July 2015 Mr Harding asked the Rintouls if they had a completion datein mind. They responded the next day saying they wanted the kitchen finishedurgently. And, they understood the kitchen would have been completed by February2015.[18] On 3 September 2015 Mr Harding sent an invoice to Mrs Rintoul for$9,728.18. On 11 September he sent this email to Mrs Rintoul:Delivered off some pieces yesterday. Had a flood through both sheds lastFriday night and still cleaning up the mess.Anne has asked me to finish all work on her place before change over day onthe 23rd of this month. I have started.Have finished sink side cabinet so will try and fit it in when waiting forpolishes to cure, so will see you when time allows. Will contact you beforecoming in case it doesn't suit.Regards Roger.[19] On 24 September 2015 Mrs Rintoul discussed Mr Harding's September invoice. She said they would not pay it given delay. Mr Harding responded by email the same day:Hi Phyllis, You have refused to pay me for work done on the reconciliation dated Thursday 3rd of September until all work is completed 'because of the lengthof time the job has taken'.I do not accept this as a valid reason for non payment for work previouslyundertaken. I feel now that I should stop all work until this concern andpayment is resolved. Should we set an acknowledgement date of this email,say mid day Friday 2nd October?Regards Roger[20] On 15 October 2015 Mrs Rintoul gave Mr Harding 10 days to provide "a detailed completion strategy". Mrs Rintoul also said she and her husband wouldengage another contractor if that was not forthcoming. Mr Harding replied on20 October 2015:Good morning. The meeting was to get an understanding of what acompletion strategy is, I am just a cabinetmaker enjoying his work. Thesemodern terms baffle me.Does it mean I will be paid? If so then it would be good because lastmonth's bills were paid with borrowed money and there is not enough in thekitty to pay this months current accounts.If it means am I able to complete the kitchen the answer is yes. There is nota lot of cabinet work to be done just the fiddly finishing and pulling togetherof the panel work. Time wise I still don't know. It is a bespoke kitchen andas such much care has to be taken to achieve the overall finish but acompletion by Christmas should be possible if started as soon as, accidentsand major changes or a massive weather bomb would be the only reason forthat not happening.I am quite willing, after payment of monies disputed, to finish your kitchenusing it as full and final payment and providing the extra wood from mystores to complete the shortfall. We may have to share the glass cost and asyou paid for the stone tops you may again if stone is still a preference for thedining room display.Hoping that this [fulfils] the meaning of a [completion] strategy,Regards Roger Harding.[21] It follows Mr Harding agreed to complete the work by Christmas (all going well), providing the Rintouls paid him the outstanding amount of $9,728.18.[22] The Rintouls cancelled the contract on 5 November 2015.[23] Judge McDonald concluded the contract between the Rintouls andMr Harding contained no provision, express or implied, in relation to either price orcompletion. However, the Judge considered s 30 of the Consumer Guarantees Act1993 operated to require Mr Harding to provide his services within a "reasonabletime". That section provides:30 Guarantee as to time of completionSubject to section 41 of this Act, where services are supplied to a consumer there is a guarantee that the service will be completed within a reasonable time in any case where the time for the service to be carried out is not—(a) Fixed by the contract; nor(b) Left to be fixed in a manner agreed by the contract; nor(c) Left to be determined by the course of dealing between the parties.[24] The Judge concluded Mr Harding had not breached s 30:[64] Mr Marley, an expert called by the plaintiffs, said it would take 500hours to "build that kitchen from scratch". Two months work for twocabinet-makers from his firm, one cabinet-maker four months. I, however,must bear in mind Mr Marley's much more sophisticated set-up. Hiscompany completes all the cabinets within their factory and then transportsall of them to the site to be installed. That is a different way to which[Mr Harding] works. He produces some, takes them to the site and installsthem. Unlike Mr Marley, Mr Harding required good weather over a numberof days to dry the finishing coats as some of that was done outside.[65] Mr Harding was, and I mean no disrespect to him, an old-fashioned cabinet-maker, more intent in getting a long-lasting superior product than a mass-produced one in a factory.[66] From the limited evidence before me I cannot say that Mr Harding'sestimate to complete the job was unreasonable. Mr and Mrs Rintoul did notwant a kitchen built by a kitchen company. They already had quotes fromtwo kitchen companies prior to approaching Mr Harding. They wanted oneto rival their friends, the Crowes, and so wanted and did engage Mr Hardingto ensure that.[67] As good friends of the Crowes they would have known how long it would take, given the way that Mr Harding worked. It was not until many months into the project that [Mrs Rintoul] starts with gentle enquiries as to how long it is going to take, and then they become more persistent until the letter of 1 October 2015.[68] In my view, the time to complete the kitchen was reasonable.First ground of appeal: completion within a reasonable time?[25] Mr Mark submitted the Judge erred in reaching this conclusion. He noted the Judge had earlier referred to the time the Rintouls were without a kitchen—adifferent inquiry. Mr Mark emphasised the Rintouls' correspondence expressingfrustration at delay, Mr Harding's May estimate the kitchen would be completewithin seven weeks, and Mr Marley's expert testimony a project of this natureshould take approximately four months from start to finish for one efficienttradesperson working alone. Mr Mark observed by 3 September 2015, Mr Hardinghad submitted invoices for 676 hours of work and yet the job remained incomplete.[26] Mr Mark is correct to observe the Judge did consider the time the Rintouls were without a fully functional kitchen. However, this inquiry did not distract the Judge from the statutory one, as the Judge then expressly considered whether the completion time was reasonable. I consider it was, for reasons which reduce to theproposition reasonableness is a function of circumstance.[27] To elaborate, Mr Marley said it would "take over 500 hours"3 to make thiskitchen. This testimony presupposed the tradesperson was operating as Mr Marleydoes: with design detail settled in advance; all cabinetry delivered simultaneously;and factory manufacture—albeit to a very high standard of quality. But Mr Harding3 Emphasis added.did not work this way. Detail was not settled before work commenced, and design changes were made as things progressed. Cabinetry was constructed and installed piecemeal. And, Mr Harding did not have a factory (he had a shed). Stained or painted cabinetry sat outside to dry, in turn requiring good weather.[28] The Judge's analysis respected these differences. Moreover, Mr andMrs Rintoul wanted Mr Harding to construct and install their new kitchen because ofhis idiosyncratic approach. Mr Harding was undoubtedly slow. But the Rintoulsmust have known that.[29] Like Judge McDonald, I am satisfied Mr Harding's services were reasonablein terms of s 30. If Mr Harding had been allowed to complete the project, it is likelyhe would have done so by Christmas 2015. True, that is a long time for a newkitchen. But again, Mr Harding's approach had impressed the Rintouls. And, hehad, after all, spent six years doing various work for their friends, the Crowes.[30] Furthermore, the weather was not kind to Mr Harding, in turn affecting hisability to dry the cabinetry. And, Mr Harding spent approximately 200 additionalhours polishing and sanding. Other work meant he not could concentrate exclusivelyon this project.[31] In summary, Mr Harding's craftsmanship and "one-man" approach meant thelikely timeframe for completion, December 2015, was, as the Judge found, reasonable in the circumstances.Second ground of appeal: a reasonable price?[32] Mr Mark contends s 31 of the Consumer Guarantees Act required the price for the kitchen to be reasonable, when it was not.4 The point was not taken below.[33] Section 31 is similar to s 30 of the Act. It provides:4 Mr Day accepted s 31 was applicable.31 Guarantee as to price(1) Subject to section 41 of this Act, where services are supplied to a consumer there is a guarantee that the consumer is not liable to pay to the supplier more than a reasonable price for the service in any case where the price for the service is not—(a) Determined by the contract; nor(b) Left to be determined in a manner agreed by the contract; nor(c) Left to be determined by the course of dealing between the parties.(2) Where there is a failure to comply with the guarantee in this section, the consumer's right of redress is to refuse to pay more than a reasonable price.(3) Nothing in this Part of this Act confers any other right of redress.[34] There are obvious difficulties with this ground of appeal.[35] Mr Harding offered to charge no more than $9,728.18 for the remaining work. So, if he had been allowed to complete the kitchen, the likely price would have been $36,531.77. Mr Marley, the Rintouls' expert witness, said in evidence-in-chief the kitchen would take "over" 500 hours to make "from scratch". His companycharges $55 per hour. This produces a figure of $27,500. In cross-examination,Mr Marley said he could not produce this type of kitchen for $33,000, and that figurewould be a "severe under quote". Mr Marley stressed the quality of his company'swork. Consequently, it is awkward to consider Mr Harding's price unreasonable,even allowing for the provision of timber by the Rintouls.[36] Mr Marley said it would cost $45,000 if he completed the kitchen given the idiosyncratic nature of the part-finished job; hence the Rintouls' claim for $45,000general damages. Mr Harding had, however, offered to complete the kitchen without additional cost (beyond payment of $9,728.18).[37] Mr Mark stressed Mr Harding's inefficient approach to the job; see [27]. But Mr and Mrs Rintoul knew Mr Harding worked alone. And, they must have known Mr Harding could not bring efficiencies consistent with a larger factory-run cabinetry business.[38] Finally, s 30 makes clear the Rintouls' right of redress for a breach of the provision could not extend to a claim for general damages based on the cost of another contractor to complete the work, or compensatory damages. The statutory right of redress is confined to paying no more than the reasonable price; see subs (2) and (3).Third ground of appeal: cancellation for repudiation[39] Judge McDonald dealt with this argument this way:5Mr Mark submitted that Mr Harding repudiated the contract by refusing to continue to perform it. He refers me to s 7(2) Contractual Remedies Act 1979; that provision provides that:A party to a contract may cancel it if, by words or conduct, another partyrepudiates the contract by making it clear that he does not intend toperform his obligations under it or, as the case may be, to complete suchperformance.Mr Mark submitted that it needs to be established the defaulting party hasmade clear his intention to no longer perform his side of the bargain. As Ihave already found there was no fixed price, nor completion date, in relationto this contract. Mr Harding did not, in my view, clearly indicate that he wasnot going to complete his side of the bargain, that is, that he was not going tofully perform his side. He wanted to get paid for the work and materials forthe preceding three months before he continued. He made it clear that if hewas paid $9728.18, the amount of his last invoice, he would complete thecontract. That is, install the kitchen cabinets at no further cost. That wouldbe done he hoped by Christmas. It was the plaintiffs who refused toentertain that.[40] Mr Mark contended the Judge erred as Mr Harding had, by his conduct, clearly repudiated his obligations to complete the kitchen within a reasonable time,and at a reasonable price. However, I have already concluded price and completiontime were reasonable.[41] Mr Mark emphasised Mr Harding had declined to continue work in theabsence of payment of his outstanding invoice. However, Judge McDonaldconcluded the contract was on an hourly basis. And, as the Judge observed,Mr Harding offered to complete the kitchen by Christmas at no cost beyond theoutstanding sum. I agree with the Judge's conclusion Mr Harding did not repudiatethe contract.5 Rintoul v Harding, above n 1, at [74]–[75].[42] The appeal is dismissed. Mr Harding is entitled to costs on a 2B basis...Downs J