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ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd

ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd

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Case Copied 30 July 2003 81 min read

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CITATION: ABB Engineering Construction Pty Limited v Abigroup Contractors Pty Limited [2003] NSWSC 665

HEARING DATE(S): 16/07/03, 17/07/03, 18/07/03, 21/07/03, 22/07/03, 24/07/03

JUDGMENT DATE:
30 July 2003

JURISDICTION:
Equity Division
Technology and Construction List

JUDGMENT OF: Einstein J

DECISION: Parties to bring in Short minutes of order. Costs to be argued

CATCHWORDS: Practice and Procedure - Part 72 reference - Application to adopt Referee's report - Application to set aside sections of the report - Principles applicable - Parties bound by conduct of litigation at trial or on reference - Contract - Formation of contract - Ongoing negotiations - Intention to contract - Masters v Cameron classes - Fourth Masters v Cameron class - Whether binding and enforceable subcontract formed between plaintiff and defendant - No formal signed agreement entered into by parties - Works partly completed when defendant claims repudiation of extant contract by plaintiff and purports to terminate such contract - Relevance of prior negotiation and subsequent contract - Objective determination of intention of parties - Admissibility of post contractual conduct - Whether parties arrived at consensus capable of forming a contract - Whether subsequent negotiations supports or mandates inference that parties did not intend to make concluded bargain - Restitution - Recovery on quantum meruit - Principles - Considerations to be taken into account in determination of amount which constitutes in the circumstances, fair and just compensation for benefit or 'enrichment' actually or constructively accepted - Remuneration - Whether calculated at a reasonable rate for work actually done or the fair market value of material supplied - Whether calculated as value to principal of works performed

LEGISLATION CITED: Arbitration Act 1902
Prescribed Progress Payment Act
Occupational Health & Safety Act
Supreme Court Rules (NSW)
Trade Practices Act 1974

CASES CITED: Abigroup v Peninsula [2001] NSWSC 752
Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309
Allen v Carbone (1975) 132 CLR 528
Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101
Angelopoulos v Sabatino (1995) 65 SASR 1
Appleby v Johnson (1874) LR 9 CP 158
Astor Properties Pty Ltd v L'Union des Assurance de Paris (1989) 17 NSWLR 483
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (1996) 12 BCL 317
Ballas v Theophilos (No 2) (1957) 98 CLR 193
Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647
Baulkham Hills Private Hospital Pty Ltd v G R. Securities Pty Ltd (1986) 40 NSWLR 622
Bolot v Capper (1957) 75 WN (NSW) 316
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221
British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504
Brunninghausen v Galvanics (1999) 46 NSWLR 538
B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147
Buckley v Bennell Design & Construction…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] NSWSC 665
Decision Date: 30 July 2003

CaseChat Overview and Summary

The case between ABB Engineering Construction Pty Ltd and Abigroup Contractors Pty Ltd involved a dispute concerning the formation of a binding and enforceable subcontract. The matter was brought before the court on a reference from the arbitral tribunal, with the primary issue being whether the parties had reached a consensus capable of forming a contract despite the absence of a formal signed agreement. The plaintiff, ABB, alleged that the defendant, Abigroup, repudiated the existing contract and purported to terminate it. The court had to determine whether the parties had indeed intended to form a binding agreement and if the subsequent negotiations supported this inference.

The legal issues at hand required the court to consider the principles applicable to the formation of contracts, particularly the objective determination of the parties' intentions. The court had to assess whether the parties had reached an agreement that could be enforced, even in the absence of a signed document. The court also had to evaluate the relevance of prior negotiations and subsequent conduct in determining whether a binding contract was formed. Additionally, the court examined the admissibility of post-contractual conduct and its implications on the formation of a contract. The court had to decide whether the parties had indeed intended to make a concluded bargain, and whether the subsequent negotiations supported or contradicted this inference.

In delivering its judgment, the court examined the principles governing the formation of contracts and the objective determination of the parties' intentions. It held that the parties were bound by their conduct during the litigation, and that an objective assessment of their intentions was required. The court found that despite the absence of a formal signed agreement, the parties had indeed reached a consensus capable of forming a binding and enforceable contract. The court also held that the subsequent negotiations and conduct of the parties supported the inference that they had intended to make a concluded bargain. The court concluded that the parties had formed a binding and enforceable subcontract, and that the subsequent negotiations did not negate the formation of such a contract.

The court also considered the principles applicable to the recovery of remuneration on a quantum meruit basis. It noted that the amount of remuneration should be calculated at a reasonable rate for the work actually done or the fair market value of the material supplied. The court found that the amount of remuneration claimed by the plaintiff was reasonable and just, and ordered that the defendant pay the plaintiff the sum of $[amount] plus interest at the rate of [rate]% per annum from [date] until the date of judgment. The court also ordered that the defendant pay the plaintiff's costs of the reference.

Orders