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Manz Business Group Inc v KBC Building Construction [1991] PGNC 11; N964 (20 March 1991)

Unreported National Court Decisions

N964

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS386 OF 1986
MANZ BUSINESS GROUP INC
V
KBC BUILDING CONSTRUCTION

Mount Hagen

Woods J
27 February 1991
20 March 1991

BUILDING CONTRACT - Damages for breach of - Application of Building Act over Customary Land - Contract with no plans or specifications attached.

Counsel:

P. Kopunye for the Plaintiff

A. Yer for the Defendant

20 March 1991

WOODS J: is a claim for damages fols following an agreement to build a store and living accommodation on customary land at Banz.

I5 the Plaintiff entered into negotiations with the Defendant for the construction of a buil building on customary land at Banz for the purpose of a store with living quarters included. Apparently discussions started in about May 1985 and a quote was submitted by the Defendant apparently related to a sketch plan which has been tendered in evidence. A building contract was entered into in August for a fixed price of K15,950. However there are no plans and specifications annexed to the contract signed by the parties. It would appear that we must refer to the negotiation namely the rough sketch plan and the quotation to find what the contract was for.

There is no reference anywhere to Building Board Approval or compliance with Provincial Building regulations however as the building was to be constructed, according to the contract, on customary land, then perhaps such approval was not required. There is evidence from the Manager of the Defendant Company that the Plaintiff wanted to avoid the expense of Building Board requirements. The evidence is also that the Plaintiff was obtaining Finance from the ANZ Bank for the work. According to the contract the work was to be started within one month of signing the contract and had to be finished within 26 weeks from the date of commencement. Whilst it is not clear when the builder commenced the evidence suggests the building was completed sometime in October. There was agreement for more work to be done at an additional cost of K2,000. The final payment was made about the 21st October 1985. One must therefore presume that the Lending Authority was satisfied with the work. The Plaintiff then moved into occupation.

Some 3 months later the Plaintiff contacted the Building and Health Inspectors from the Western Highlands Provincial Building Board who inspected the building and commented on aspects of the building suggesting they did not come up to the Building Board requirements. These reports however must presuppose some original plan from which the builder has departed. But we have no complete set of plans and specifications signed and agreed to along with the contract. We merely have a casual sketch and it is quite clear from the Plaintiff’s evidence and the evidence of the Manager of the Defendant company that the Plaintiff had limited money and was anxious to save on the costs of proper drawings and full compliance with Building Board regulations although there is nothing before me to show whether the Building Board had any jurisdiction over a building on customary land. So without a proper set of plans and specifications, which is the Proprietors responsibility, any report listing failures to comply has no basis.

If the Building Act did apply then under that Act it is the owner or occupier who is responsible for seeking Approval and therefore in the end he is responsible in the eyes of the Building Inspector. The builder is only responsible to the owner in so far as he has failed to comply with the agreed plans and specification.

Further it appears the Lending Authority must have been satisfied because it paid over the money. The Plaintiff himself moved into occupation and paid over the final payment. Whilst he may have complained with 15 weeks of the completion there is no original set of specifications and plans on which to base any complaint. He also seems to say the building was not worth the agreed contract price. However the Plaintiff in his evidence refers to seeking 3 quotes and accepting the Defendants as the cheapest quote. Further he has not presented any proper valuation from an authorised valuer.

I have been saying for years now that if you want to build a house or a trade store you plan it carefully first then you talk with a reputable builder and before reaching agreement you ensure everything is covered in detail. Then you sign a contract which clearly sets out all the details and specifications. And if you are unsure of how to properly enter a contract you pay a lawyer or an Accountant to help you as the money so paid could save you much more if things are not done properly. Then you do not make the final payment until you are satisfied that everything is done properly in accordance with the contract. It is quite clear here that the Plaintiff from his own evidence in Court, was in a hurry, was short of money and ended up breaking all the above rules.

I therefore find no basis for the price being excessive as it was the agreed price. There was no delay as the building was completed well within the 26 weeks provided for in the contract. There could be no approval of the Building authorities as the owner had never lodged a plan with the Building board nor sought Building Board approval. The Plaintiff paid the final payment apparently approved by the Bank on 21st October and moved into occupation immediately so must be deemed to have been satisfied. Finally there is no evidence of any departure from the contract, there being no plan and specifications from which to base this. I find that the Plaintiff has failed to prove his claim and I therefore find for the Defendant.

Lawyer for the Plaintiff: P.C. Kopunye

Lawyer for the Defendant: A. Yer