Ambiguity and the Worst Case Scenario

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Note: All views expressed in this podcast are Former Mayor Penny Taylors and do not represent the views of Subiaco Council itself.

 

Subiaco is a city suburb centred on the hustle and bustle of small boutiques and high end shopping, stylish cafe’s, wine bars and gastropubs. But beneath the hustle and bustle and liveliness of Subiaco is a huge amount of debilitations threatening the city’s liveliness. 

In this episode, I’m continuing my chat with the Former Mayor of Subiaco Penny Taylor. In part one, Penny revealed a massive amount of dysfunction in Subiaco Council. If you are yet to listen to part one, make sure you go back to listen that episode first. In part two, we will be diving deeper into the dysfunction. We talk about the impacts on Penny herself, and also on the community as a whole in Subiaco along with the potential solutions to change things for the better going forwards. 

 

In the ep you’ll find out about:

  1. Local Governments lack of code of conduct 
  2. The changes being made for Subiaco’s future
  3. The false dichotomy in Subiaco
  4. Why Subiaco Counsellors don’t take the blame for the current dysfunction

And more…

 

Discussion Points:

00:00 Introduction 

02:04 The false dichotomy in Subiaco

02:30 Business becoming marginal in Subiaco

06:43 The motion of no confidence meeting

13:41 Post football plan

19:15 Obstacles to getting things done

20:14 The impact of dysfunction to Subiaco itself 

15:53 The impact to Penny the Mayor

28:06 The impact to Penny the person

32:47 The obstacle and impacts on the people of Subi

34:57 Advice to the people of Subiaco/incoming Mayor 

 

About The Guest

Penny Taylor is the former Mayor to The City of Subiaco. Penny completed her studies as geologist at Sydney University before moving to the Pilbara to work in the mining industry. Throughout Penny’s career in mining she worked across project management and following mining she, together with her husband started a family business servicing the resources industry. Following this, Penny then moved to Perth to start a family. 

Penny’s move to government started when she worked as a counsellor at the town of Port Hedland and ran for the seat of Nedlands in the 2017 State Election. It was this experience in Port Hedland that promoted Penny to run for Mayor of Subiaco in 2017, a role which she held until 2021. 

Aside from Government, Penny is also involved in a number of organisations including the Juvenile Diabetes Research Foundation, UWA Little Athletics and Rosalie Primary School to name a few. 

Resources:

Click to watch on YouTube

Listen to the audio podcast here

Unfortunately, ambiguity in a contract can lead to unpredictable outcomes, like it did for an American contractor in April 2020. Whilst the legal system is different everywhere, many principles remain the same as do the consequences. I chose this example as it could happen anywhere, in this case though it is Redstone v. Sipes. Redstone engaged Sipes to create a conference room, hallway, bathroom and two offices in a commercial property.

The agreement between the parties was a simple one pager, it listed general items and a “contract” price of USD $25,000. Two months into the project, Sipes had received the full contract value from Redstone and an extra $3K as advance for bathroom plumbing. The project had a firm timeline as the client was relocating their existing office to the new one. Given the projects continuing delays, Redstone terminated Sipes and engaged a replacement contractor to complete the work.

When the new contractors commenced work, multiple defects and second-rate work were revealed and repaired. This in itself added up to $17K, so the simple contract is becoming less and less so. Redstone sent demand letters requesting damages for new contractors and repair work, but predictably Sipes refused. Then Redstone filed a suit claiming breach of contract, negligent performance, and failure to perform the work in a timely manner. It had turned ugly, like we all hope contracts never will.

At trial, the prime point of contention was the bathroom works and renovation. The contractor claimed that the plumbing labour was listed in the “contract” as work to be covered by the client, and not in his scope. That aforementioned $3K advance they claimed was to prep the bathroom for renovation, not actually complete it. In addition to this Sipes claimed wrongful termination and that the additional costs of hiring replacement contractors were notably greater than if they had completed the work.

Despite this, the court wasn’t swayed. They stated that the contract was “ambiguous in part” and ruled in favour of Redstone for the full $17K and court costs. Again predictably, Sipes appealed. The appeals court also declared the contract as ambiguous. In the appeal Sipes maintained that within the contract the bathroom was “not contemplated.” Further to this, he argued that Redstone was clearly listed as responsible for the “plumber labour.” The court then scrutinized the contract in question.

They noted that scope of work didn’t contain any description of the bathroom renovations nor any allocation of costs for the bathroom renovations and because of this the contract was unclear and ambiguous. Given that, it would come down to the intent of the parties, not a place you want to end up. In the end, the court ruled that when Redstone paid the additional $3K, it was a verbal change to the contract and Sipes was responsible for the bathroom work. Furthermore, Redstone had provided enough evidence that: (a) the work was defective, and (b) all of the costs associated with the completion of the work.

An expensive and lengthy lesson for both the client and the contractor. Long gone are the days of handshake deals and simple invoices. They simply aren’t enough to protect yourself and your payments in the construction industry today. No one starts a contract with the intention to end up in court or disputes but working under an ambiguous contract is like walking the high wire without a safety net. Why would you?!

Don’t leave your company and rights in the hands of fate, ensure your contracts are drafted and reviewed carefully and professionally. The worst-case scenario seems like overkill until you’re in it.

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