ACT Commercial Builders Pty Ltd and Anor v BBSJ Partners Pty Ltd and Anor (No 2)
[2021] ACTMC 17
•16 December 2021
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | ACT Commercial Builders Pty Ltd and Anor v BBSJ Partners Pty Ltd and Anor (No 2) |
Citation: | [2021] ACTMC 17 |
Hearing Date(s): | 8-11 September 2020; 27-28 April 2021 |
DecisionDate: | 16 December 2021 |
Before: | Magistrate Stewart |
Decision: | See [217]-[218]. |
Catchwords: | CIVIL JURISDICTION – commercial construction – restaurant fit out – New South Wales commercial building contract – failure to pay contract sum – variations to contract – counter-claim – liquidated damages pursuant to contract – misrepresentation – defective works |
| Legislation Cited: | Competition and Consumer Act 2010 (Cth) |
Cases Cited: | Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190 Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; (2017) 95 NSWLR 82 Spiers Earthworks Pty Ltd v Landtec Projects Corp Pty Ltd (No 2) [2012] WASCA 53; (2012) 287 ALR 360 ACT Commercial Builders Pty Ltd v BBSJ Partners Pty Ltd [2020] ACTMC 28 Dong v Song (No 2) [2018] ACTSC 180 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 Browne v Dunn (1893) 6 R 67 |
Parties: | ACT Commercial Builders Pty Ltd (First Plaintiff) Ian Hoare (Second Plaintiff) BBSJ Partners Pty Ltd (First Defendant) Qian Xiao (Second Defendant) |
Representation: | Counsel D Robens (Plaintiffs) M Noakhtar (8-11 September 2020); J Moffett (27-28 April 2021) (Defendants) |
| Solicitors Harrington Hall (Plaintiffs) McInnes Wilson (Defendants) | |
File Number(s): | CS 43 of 2019 |
MAGISTRATE STEWART:
Introduction and issues
The plaintiff is a company contracted by the defendant company to complete a fit-out of commercial premises to create a ‘Pepper Lunch’ franchise restaurant. The plaintiff is operated by its director Ian Hoare who is the second Plaintiff (hereinafter referred to as ‘the builder’). The defendant company is operated by the second defendant Qian Xiao and three other directors Yiwei ‘Loki’ Xu, Zhongyang ‘Mike’ Luo and Qianfan ‘Stephen’ Han (hereinafter referred to as ‘the owners’).
It is agreed that one of the owners provided a preliminary plan to the builder and sought a quote on 13 November 2015.
Two quotes were provided by the builder on 01 February 2016 – one for $201,113.86 and a further quote of $232,924 that included costs for signage and dining tables.
On 03 February 2016 the owners accepted the contract for $232,924 (including GST) and it was executed by the second defendant on behalf of the owners.
There were delays in completion and other tradespeople eventually finished the works.
The builder claims for $120,747.82[1] (plus costs) comprising:
(a)$32,924.00 (inc GST) for the final contract payment sum;
(b)$19,886.10 for interest on that sum[2];
(c)$43,539.32 (inc GST) for variations;
(d)$25,673.69 interest on variations[3];
(e)$1,275.29 for deductions from the contract sum for variations; and
(f)Gives no allowance for defect claims, liquidated damages, or alleged misrepresentations.
The owners counter-claim $93,378.69[4] comprising:
(a) $75,000 in liquidated damages;
(b) $56,920.21 in respect of incomplete and defective works;
(c) $8,878.48 in respect of their misrepresentation claim ;
(d) A set-off of $14,496.00 for agreed variations; and
(e) A set-off of $32,924 for the final contract payment sum.
Thus the parties are agreed that $32,924 is payable by the owners as the final contract payment sum. The variations are some $29,000 apart. The owners further seek liquidated damages for late practical completion, a further sum for incomplete or defective works and a further sum for their misrepresentation claim.
There is very little which is not in dispute in this matter. The length of time in court has resulted in repetitive judicial warnings about legal costs outstripping the value of claims.
This dispute arises from construction carried out pursuant to a standard New South Wales commercial building contract. As will be seen below, nearly all of the issues arising from the litigation were resolvable by reading the unambiguous wording of that contract.
The contract commencement, length, delays and practical completion
There is a fundamental dispute over how the ‘42 days’[5] written into the contract for the period of the contract should be read. There is a dispute over when the construction commenced. Both these disputes are directly relevant to the owner’s claim for liquidated damages and so it is convenient to deal with these issues together.
Both parties were extraordinarily unwise in failing to insert an actual agreed completion date on the contract – particularly where the contract allowed for stages and an ultimate completion date to be inserted at schedule three.[6] However, a commencement date was fixed in writing as 08 February 2016[7] and it appears uncontroversial that the contract was executed on 03 February 2016[8].
The meaning of ‘days’ is defined in an unambiguous way in the contract at clause 36:
“Days” means a day when work is authorised but does not include:
(i) Saturdays, Sundays or any day that has been gazetted or proclaimed to be a public holiday in the locality where the works are being or are to be executed.
(ii) Rostered days off that have been or (or may in the future be) granted to employees in the building industry by a relevant Industrial Court, Commission or Tribunal and which has general application throughout the state to the building industry.
(iii) December 23, 24, 27, 28, 29, 30, 31 or January 2, 3, 4 or 5 of the calendar year.
Despite this, Saturdays were specifically included as ‘authorised work hours’ in schedule 3 of the contract and hand-written to reflect that. No such inclusion appears anywhere for Sundays or public holidays to be counted as work days. In my view the contract should be read as it plainly means. There is no basis to find that the contract is ambiguous on the definition of ‘days’ and I reject any evidence and submissions to the contrary - see Codelfa Constructions Pty Ltd v State Rail Authority of NSW (192) 149 CLR 337.
Just as the parties to the contract were free to endorse the contract with Saturdays as work days, they were also free to endorse Sundays as work days. They were also free to remove parts of the definition of ‘day’ from the contract. The overwhelming inference where Saturdays were specifically included as ‘days’ is that there was an acceptance that Sundays and public holidays were not be included as work days in accordance with the wording of the contract and make that finding.
Submissions of the parties on the start date
The builder relies on the contract. His case is that the commencement date was 08 March 2016, that work commenced on 10 March 2016 on the morning after notification of building approval was provided to him and that practical completion took place on 26 April 2016.[9]
The owners submitted that work commenced on 03 March 2016 and therefore, that practical completion should have taken place on 22 March 2016 or on 04 April 2016 depending on the interpretation of ‘days’ to be worked.
In terms of commencement, I accept the builder’s evidence in cross-examination that he got an early start to allowing himself a full 42 days by removing items prior to the commencement date[10]. I reject the owners submissions that this meant the start date was prior to 08 March 2016, or prior to approval of the construction.
I further reject the owners submission that an initial project schedule[11] drafted by the builder pre-contract had any relevance to the contractual start date. That schedule shows work commencing on 27 January 2016 and handing over on 18 March 2016. By my calculations this is 52 calendar days with no breaks at all for weekends or public holidays, meaning that the executed contract allowed for far less time to practical completion (42 days as against 52 days).
It is important to note that the contract was executed two days after that work schedule had been provided[12] and that the work schedule was not attached to the contract or referred to in the contract. Ultimately, I accept the builder’s evidence that the schedule was compiled as a guide to the amount of working days required to complete to the job.[13]
Interestingly the owners seek to rely on the schedule as proof of the start date yet not rely on the schedule’s allowed 52 days to completion. The owners then seek to disregard the contract start date of 08 February 2016 but rely on the contract’s stipulated 42 days to completion.
Mr Luo himself conceded in his statement that the start date was 08 February:
“My understanding was that the Contract commenced on 8 February 2016, and was to run for 42 days…Taking 9 February 2016 as the start date of the Contract and allowing for the Canberra Day public holiday on Monday, 14 March 2016 the Contract completion date should have been 18 March 2016.”[14]
I find that the commencement date of the contract was as per the endorsement in contract - 08 March 2016. Even still, as will be seen later, this date was frustrated by a failure to provide the builder with building approval until late on 09 February 2015.
Submissions on how ‘days’ should be calculated
The builder relies on the contract executed by the parties.
The owners rely on a combination of a purported ‘mutual intention’[15] of the parties to calculate ‘days’ as calendar days, the aforementioned schedule provided by the builder prior to the contract and an e-mail from him dated 25 May 2016 where he set out his explanations for the eventual delays to completion as a basis for those submissions[16].
At paragraph 118 of their submissions, the owners submitted:
118. The initial project schedule provided by the Builder:
(a) scheduled work on the weekends; and
(b) projected that works would take precisely 42 calendar days from 3 February 2016 (the date of entering the contract) until certification which was projected to take place on 15 March 2016.
It is clear that the initial project schedule[17] included weekends. As discussed above it also allowed for 52 days work and works commencing prior to the contract being signed. I have found that it was a guide only.
I reject the owner’s submissions that the schedule somehow over-rides what was explicitly defined in the contract or that it contributed to a mutual understanding that over-rode the contract definition of ‘days’.
In terms of the owners submissions at paragraph 118 (b) I cannot see how the email[18] attaching the schedule (and footnoted to submission 118(b)) provides this assertion. The schedule commences on 27 January – not 03 February - and allows for handover on 18 March – not 15 March. In my view this submission is based on little more than a convenient selection of dates within and out of the schedule to suit the submissions of the owners.
I refer to and repeat my findings above at paragraphs 19 and 20 in any event. The schedule was not part of the contract executed on 03 February 2016. Had the parties chosen for it to be such an inclusion, it could easily have been annexed to the contract. The parties did not do so.
Quite obviously the 25 May 2016 e-mail is dated post completion and was in the context of trying to resolve this claim. I accept that the builder’s approach to the issue was inconsistent. He gave evidence that he made no assertion about working on weekends or public holidays[19] and that there was no discussion or clarification of the days to be worked prior to or when signing the contract.[20] His original project schedule did give the impression of each day being a work day[21]. Further inconsistencies were set out at paragraphs 121 – 125 of the owners submissions.
I note in particular the builder’s evidence about the 42 days written into his diary on 04 March 2016. I do not accept that this part of the conversation on that day ever occurred. The point made by the owners about this 42 days being calculated as calendar days (and not business or contract defined days) is well made.[22] It was a portion of cross-examination that was uncomfortable to watch and only highlighted the falseness of that particular diary entry.
Such a fundamental oral amendment should have heralded the requirement to amend the contract in writing or draft a fresh contract if such an agreement was reached. It should have been confirmed in writing by the owners or the note entry should have been counter-signed by the owner who was present at the meeting.
I find that this evidence was contrived and a determined effort by the builder to short circuit the whole issue of delay.
I remind myself of the standard of proof. I accept all the inconsistencies that the owners have pointed out are there to be pointed out. Mr Luo himself allowed for one public holiday as not counting as a ‘day’[23], but not others – another inconsistency – but this time in the owners case. Ultimately, I am not persuaded that they are anything other than evidentiary inconsistencies with the contract. I am not satisfied that these inconsistencies and the dishonesty about the ‘42 days’ entry in the builders’ diary amount to part of any mutual intention to count the contract ‘days’ as calendar days.
There were further submissions about the timing of progress payments being due each 14 calendar days as supportive of the owner’s submission that work days were strictly calendar days. There is only one definition of ‘days’ in the contract. The owners submitted that the builder did not submit progress claims in accordance with the contract definition, rather they were served on:
(a) 23 February – 15 calendar days after 08 February;
(b) 17 March – a further 23 calendar days later (I note without slavishly repeating the calculations above that this is greater than the definition of 14 days under the contract);
(c) 27 March – a further 10 calendar days; and
(d) 19 May – a further seven weeks away.
As can be seen when the intervals between serving are set out as above there is no compliance with the 14 days allowed under the contract at all. I reject this submission as being a ‘red herring’ of convenience to the owner’s case and having no probative value.
I remind myself of the decision in Codelfa above and Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190 at 195:
It would be a serious threat to the stability of commercial relationships and dealings if parties, who after lengthy and intricate negotiations, deliberately recorded their agreement in permanent written form, were subject to the risk of having that permanent written record yield to the inherently less reliable evidence of oral statements made during the course of negotiation”
I accept the builder’s submission that ‘days’ should be calculated as per the contract.
Submissions on the actual completion date
The owners opened for a soft opening on 29 April 2016 for food bloggers and to the general public on Saturday 30 April 2016.
The builder’s case is that practical completion took effect on 26 April 2016 as photographs tendered by the defendants show the premises stocked, with furniture placed and with a staff member working in the kitchen on 27 April 2016.[24] I note that the photograph at page 155 of exhibit P9 does not support practical completion as at that date. That photo shows tools in place and work still being completed.
The evidence suggests that the builder worked all day completing work prior to the soft opening on the evening of 29 April.
I accept the submissions of the owners in that practical completion took place on 29 April 2016.
Some calculations based on findings of fact
Following the language of the contract, it allowed for 42 days comprising Mondays to Saturdays (excluding public holidays) commencing on 08 February 2016.
Relevant ACT public holidays were:
(a) Monday 14 March 2016 - Canberra Day;
(b) Friday 25 March 2016 – Good Friday
(c) Monday 28 March 2016 – Easter Monday; and
(d) Monday 25 April 2016 – Anzac Day.
On my calculation, in accordance with the contract, 42 work days commencing 08 February 2016 allowed for a practical completion date on Wednesday 30 March 2016:
(a) 08 – 13 February 2016 Monday to Saturday – six days;
(b) 15 – 20 February 2016 Monday to Saturday a further six days;
(c) 22 – 27 February 2016 Monday to Saturday a further six days;
(d) 29 February - 05 March Monday to Saturday a further six days;
(e) 07 – 12 March 2016 Monday to Saturday a further six days;
(f) 15 - 19 March 2016 Tuesday to Saturday a further five days (Monday 14 March 2016 being the Canberra Day Public Holiday);
(g) 21 – 26 March 2016 Monday to Saturday (but excluding the Good Friday Public Holiday on 25 March 2016) a further five days;
(h) 29 March to 30 March Tuesday to Wednesday a further two days (Monday 28 March being the Easter Monday Public Holiday).
Liquidated damages
Given my finding that practical completion was achieved on 29 April 2016, I find that there are 24 days that are potentially compensable as liquidated damages under schedule 2 D of the contract on the owner’s case. I have calculated those 24 days as follows:
(a) 31 March – 02 April 2016 Thursday to Saturday – three days
(b) 04 – 09 April 2016 Monday to Saturday a further six days;
(c) 11 - 16 April 2016 Monday to Saturday a further six days;
(d) 18 – 23 April 2016 Monday to Saturday a further six days;
(e) 26 – 28 April 2016 Tuesday to Thursday (Monday 25 April 2016 being the Anzac Day Public Holiday) a further three days.
I dismiss the quantum of $75,000 the owners have calculated their claimed liquidated damages. I find that, at best, the owners may be able to claim 24 days ($48,000) of liquidated damages. The issue is why was practical completion 24 work days late and was this delay attributable to the builder alone, in part, or not at all?
The prevention principle applies to liquidated damages arising from construction contract claims.[25] The prevention principle enshrines a basic rule of fairness - a party cannot insist on the performance of a contractual obligation by the other party if it itself is the cause of the other party’s non-performance.[26] Thus, the reasons for delay are entirely relevant to the enlivened portion of the liquidated damages claim.
Delay due to the owner’s plans
The approved plans were provided by the owner’s architect. When the builder commenced the set-out on the floor of the premises it was discovered that the plans were inaccurate and not suited to the actual floor plan.
It is agreed that the architect was advised of an error in the plans on Monday 22 February 2016. Plans were provided in return in the first week of March 2016 with the final amended plans being provided to the builder on Monday 07 March 2016 at 6.57 pm.[27]
The builder contends that he could not work on the contract in that period. The owner contends that he should have worked during that period claiming that he was provided with a floor plan and demolition plan on Thursday 03 March 2016 at 3.53 pm.[28] I reject these submissions and accept the evidence of the builder on this topic – in my view he was entitled to wait until the full set of revised plans arrived on 16 March 2015, but he re-commenced work on 08 March with faith in the interim plans provided.
I find that the error in the plans supplied by the owner’s architects on behalf of the owners caused a stoppage of works amounting to 12 contract work days. That is calculated as follows:
(a) 23 -27 February 2016 Tuesday to Saturday – five work days;
(b) 29 February 2016 – 05 March 2016 Monday to Saturday a further six days; and
(c) 07 March 2016 Monday one day.
I find that the errors in the plans were fundamental to the delay to practical completion of the contract. The builder was not responsible for the errors in the plans and should not be responsible for the delay of 12 contract work days caused by the requirement of the owner’s architect to re-draft all of the defective plans. I find that a claim for liquidated damages should not be allowed for those 12 contract work days as the delay was solely attributable to the owners.
The builder submits that per his diary entry on Friday 04 March 2016 there was an oral amendment to the contract allowing 42 days from that date.
The owners dispute the diary entry and I refer to my findings in paragraphs 32 -34 above on this topic. Ultimately the diary entry is irrelevant other than for credibility purposes.
It is obvious that the plans caused a delay in practical completion. The definition of a working day is clearly set out in the contract for both parties. I do not know whether this was overlooked by the owners. It is impossible to accept the evidence of the owners on this topic. Their own plans were faulty. Works did stop. There was written notification of the problem and the need for fresh plans to be drawn up. The builder has complied with the notification clause in the contract in relation to the delay. He did so by notifying the owners and their architect about the problems with their drawings.
I accept the evidence of the builder that by the time the errors in the drawings were found the demolition of the site was complete. There was no further work to commence until accurate plans were provided.
I find that an extension of 12 work days should be allowed to the practical completion date in the contract, thus the potential liquidated damages claim is reduced by 12 days to from 24 to 12 days.
Other delays
The contract deals with the issues of delay and practical completion at page 30 of exhibit 4 (being condition 5 and 6 of the contract). There is a positive duty placed on the builder to advise the owner in writing of adjustments to the practical completion date, but a slip clause is included at condition 6(e) in the absence of notification:
(e) Delay in notifying or a failure to notify a delay will not of itself prohibit an extension of time provided the matter which is claimed to cause delay is shown to delay the works.
The builder submits that work commenced on 10 or 11 February after building approval was received by him after work hours on 09 February 2016[29].
It is the builder’s case that he could not commence work until approval was given. There is no evidence that the builder complied with condition 4 (b)(i) and advised the owners of any change in the timeframe caused by this delay. However, it is clear that this delay was well known to the owners who were responsible for providing the appropriate construction approval. In those circumstances there is a proper basis to allow a further two day extension of the practical completion date and consequent reduction in unliquidated damages.
It is the builder’s case that further delays were caused by changes imposed by the owners including a variation to the front counter and the addition of a docket printer.
There is evidence of written notifications from the builder of a requirement to adjust to the practical completion date. On 22 March 2016[30] he notified the owners of a 10 day delay caused by these delays as fresh counter tops had to be ordered to suit the new requirements. In those circumstances there is a basis to allow a change to the practical completion date or reduction in unliquidated damages. The builder has refined this claim to four days in his written submissions.[31] I allow the four day reduction in unliquidated damages due to the owners being responsible for the delay.
There were further delays were occasioned by the owners including the addition of an additional vapour hood and various problems associated with the fitting of induction cooktops.
The email of 22 March 2015[32] from the builder to the owners is a crucial piece of objective evidence. It is very clearly a notification of delays caused by owner-initiated variations. It gave notice of the delay in changing the joinery work for the front counter, the addition of a pre-mix cabinet meant that it would not be available “until the 4th”.
The builder gave evidence that the revised plans adding an additional vapour hood caused a further 10 day delay to the construction.[33] It was not a simple matter of adding another vapour hood. The builder had to allow for design time, fabrication time for the hood and further fabrication time for the duct work connecting to the vapour hood.
All of these delays in turn caused a further delay in being able to close the celling, finish the plaster work, apply paint and then install lighting. Work stalled on that part of the job. I find that a significant delay caused by the additional vapour hood is proved on the civil standard. The builder himself estimated a total delay of 10 days caused by this change in plans. In my view this is an acceptable figure, albeit possibly a conservative one, and I allow a further extension for practical completion of 10 days.
I do not need to consider any further delays as in accordance with the contract the practical completion date was extended by 12 days due to the errors in plans, two days by a failure to have construction approval on the commencement date, four days by the owners variations to the counters and a further 10 days due to the late addition of a further vapour hood.
I find that the 24 days damages for late practical completion that may have been claimable are completely erased by only some of the delays attributable to the owners and, as a consequence, I refuse the liquidated damages claim in its entirety.
Cost of variations
The builder has claimed $43,539.32, plus interest, for variations that he claims were completed and that he is entitled to extra payment for. In their written submissions the owners agree to $14,496 of this variation claim.
These figures are both different to the variation schedule that the parties apparently agreed to (in part) in May 2016.[34] Those figures were $38,499.20 excluding GST for the builder and $19,461.20 excluding GST for the owners respectively. Adding GST of 10% would increase those figures to $42,349,12 and $21,407.32.
The contract sets out the process for dealing with variations at clause 9. At subclause (c) the contract clearly states that if the builder agrees to a variation, it must be communicated in writing by the owner. At subclause 9(d) the builder is required to advise of the cost of the variation in writing and subclause 9(h) sets out the costing of variations when the notification clauses are followed.
Subclause 9(j) of the contract is a slip clause allowing the builder to claim reasonable expenses where work is commenced prior to or in the absence of written instructions from the owner. The builder must substantiate that the work completed was not part of the original contract works.
The parties have been able to agree on some variation claims as part of this litigation. Those agreements do not always reflect the agreement that was supposed to have been reached in May 2016[35]. I have dealt with each variation in turn and as will be seen the total allowed for variations is $31,354 plus interest.
Item 2 - extra general purpose outlets (GPOs) $624
The builder has claimed $512 plus $112 for his time dealing with the variation. The claim is refused by the owners. There is no written request for the variation alleged and the builder must show this item was not part of the original contract works.
The initial plans and the revised plans allowed for 30 or more GPOs[36]. The builder has claimed the variation by use of an invoice from Powered Up Electrical and Data[37]. The builder was only billed for 30 GPOs.
I find that there is no reasonable basis for the claim and I refuse it.
Item 3 - additional down lights $156
This variation is not pressed by the builder and is formally refused.
Item 4 - supply speakers $510
The builder referred to a diary note on 14 April 2016 that he says relates to approval for the fitting of new speakers. The owners refute this claim and rely on the plans detailing that existing speakers were to be re-used.[38]
The re-use of the speakers is an odd feature of the plans given that very little else in the existing fit out was re-used during the construction and also given the relatively low cost of the items overall. I accept, on balance, that the 5 of 6 speakers that were originally at the premises were unfit to be re-used.
Powered Up Electrical and Data invoiced the builder $843.00 to supply and install six speakers.[39] Clause 9(j) applies and I allow the claim as being reasonable in the sum of $510 – a sum less than the actual cost to the builder.
Item 5 - supply power to light box $100
The parties are agreed and I allow this claim in the sum of $100.
Item 6 – extra data outlets $420
By email the owners requested a revised location for a docket printer.[40] The plans only allowed for five data points.[41]
Powered Up Electrical invoiced the builder for 12 data points amounting to $1044.00[42] and the builder has only sought part of that amount as a variation.
Subclause (c) applies and I allow the claim for the variation in the sum of $420.
Item 7 – Interconnect 3 phase hot plates $1393
On 18 March 2016 the owners emailed a specific request for the builder to have his electrician to install the induction cooker. Despite the submissions of the owners, their email request is clear on the face of it as being a variation at their request.
I note that the variation was not disputed in May 2016[43].
I allow this variation claim in the sum of $1393.00.
Item 8 – 3 phase tails $780
Plan A204[44] clearly shows a specification for four 415 volt outlets.
The variation was not disputed by the owners in May 2016[45].
Despite this, on balance, I find that the builder has not proved that this is a variation from the plans and it is refused.
Item 9 – Connect vapour hood $180
This claim is agreed by the owners and allowed in the sum of $180.
Item 10 – Dishwasher isolator $150
The installation of the isolator is not evidenced by any request from the owners. Subclause (j) of the contract applies and the builder has failed to show that it was not part of the original works.
For the same reasons as Item 8 above this variation claim is refused.
Item 11 – 3 Phase main upgrade $3150
Subclause 9(j) applies to this item. The electrical service was upgraded due to an inability to deal with the installed electrical components.
The owners claim that this was foreseeable by the builder and is his responsibility.
Clause 14 of the contract stipulates that the owner warrants that the site will satisfactorily support the works. It did not do so.
I am satisfied that this variation is properly claimed and allow it in the sum of $3150.
Item 12 – 6 fluro tubes $804
These items are included visually on the electrical plan A203[46] but not identified in the legend to the plan in any way. The contract required the owners to supply the light fittings.
The variation was not disputed by the owners in May 2016.[47]
The variation falls under subclause 9(j). I find it reasonable and I allow the claim of $804.
Item 13 - dimmer switch $98
This item is not pressed and I formally refuse it.
Item 14 – extra core holes $2400
After considering the submissions of both parties I find that this item is a further claim due to a failure of the owners in terms of the warranty of the property to be fit to support the works.
Even if this were not the case I find that it would fall under the subclause (j) as a reasonable expense.
I reject the owners submissions that do not explain the denial of liability for the extra cost. I accept the submissions set out in the builder’s response that the extra cores required a significant amount of extra, difficult and after hours effort – all due to the pre-existing nature of the premises.
I allow the claim in the sum of $2400 noting that the builder has passed on what the plumber charged the builder for this extra work without adding a margin.[48]
Item 15 – Extra water provisions $300
This item is agreed and allowed in the sum of $300.
Item 16 – Extra HDPE drainage points $1360
This item was not included on the initial drawings an amounted to a variation or warranty failure in the same sense as item 14.
There is a typographical error in the builder’s claim – the amount invoiced by the plumber was $1350[49]. I allow the variation in the sum of $1350.
Item 17 – Extra gas provisions $400
This item was not requested by the owner and is not a variation due to a change in the plans.
The variation was not disputed by the owners in May 2016[50]. The owners have disputed the variation at hearing but only submitted that the variation was never communicated.
Thus, I allow this claim as a subclause (j) reasonable claim in the sum of $400.
Item 18 – Amended drainage plans $270
This item is agreed and I allow it in the sum of $270
Item 19 – 100mm vent upgrade $500
This item was not requested in writing by the owners.
It rises and falls with variation Item 14 as it was required work to upgrade the existing premises they were warranted by the owners.
I allow the claim in the sum of $500.
Item 20 – tempering valves to basins $400
This item is agreed and I allow it in the sum of $400.
Item 21 – 3 extra fire collars $300
There was no evidence on this item and it was not requested in writing by the owners.
The variation was not disputed by the owners in May 2016[51].
Despite this, due to the lack of evidence, I refuse this claim.
Item 22 – Extra plumbing labour $450
This item was not requested in writing by the owners. There was no oral evidence adduced in support of it, or to explain it and I refuse it.
Item 23 – Extra screed labour $400
This item was not requested in writing by the owners.
The variation was not disputed by the owners in May 2016[52].
There was no oral evidence adduced in support of it, or to explain it and I refuse it.
Item 24 – additional prep labour $308
This item was not requested in writing by the owners and there was no written notification from the builder.
The builder’s evidence did not assist in defining how this claim was established in accordance with the contract[53]. I refuse this claim.
Item 25 – additional prep material $700
As per item 24 this item was not requested in writing by the owners and there was no written notification from the builder.
The builder’s evidence did not assist in defining how this claim was established in accordance with the contract[54]. I refuse this claim.
Item 26 - additional tile supply cost $2700
The builder relies on his evidence at hearing to support this claim. There is no documentary evidence such as receipts to substantiate it.
There was no notification to the owners of the issue of unavailability of the tiles specified.
There is no proper basis to find that this is a ‘reasonable’ variation claim and I refuse it.
Item 27 – vapour hood $3,444
This item is agreed by the parties and allowed in the sum of $3444.
Item 28 - 5 x additional filters $400
One fifth – or $80 of this is agreed as part of the vapour hood. I am inclined, on balance, to accept the submissions of the owners on this claim. The canopies were included on the plans and should have been part of the builders quote.
The contract does not allow for a retrospective quote increase and I allow the claim in the sum of $80 only.
Item 29 – Design, certification of rangehoods and exhaust $900
I reject the owner’s submission on this variation. It is a variation that is reasonable and, if not undertaken by the builder, would have resulted in those items not being properly complianced.
I allow this variation in the sum of $900.
Item 30 – 5 x adjustable light fittings for rangehoods $600
I am not able to see how these lights were specified in the plans as submitted by the owners.[55]
In my view the claim was not the subject of any notification, but I find that it is reasonable. I allow this variation in the sum of $600.
Item 31 – 2 x additional air outlets in BOH $3120
This item is agreed and I allow it in the sum of $3120.
Item 32 – Duct clean $2980
The owners agree to $1,950 of this claim only.
I found the evidence of Mr Luo disingenuous about previous agreements to the variations.[56]
In my view the claim was not the subject of any notification and I find that it is reasonable. I allow this variation in the sum of $2980.
Item 33 – Re-size cabinets after original order $370
This variation is agreed and I allow it in the sum of $370.
Item 34 – Batten out tenancy walls $580
This variation is agreed and I allow it in the sum of $580.
Item 35 – 8 x increase in quantities $840
This variation claim appears to relate to a difference in the 3D drawings between December 2015 and March 2016.[57]
No written notification was given under the contract by the builder. In my view this variation claim is a retrospective quote increase. I refuse it.
Item 36 – Supply and install additional joinery for fridge above cabinet $330
The builder’s evidence on this item was not convincing.[58] The work was either required under the plans or was further work that was not the subject of written notification.
I am unsatisfied that it is proved to be the latter and the subject of a reasonableness claim. I refuse the claim.
Item 37 – Re-size quantity adjustment $370
This claim is agreed and I allow it in the sum of $370.
Item 38 – Wallpaper $3577
The supply and fit of the wallpaper did not form part of the contract. The builder has provided the quotes that were accepted to allow this work to take place.[59]
The invoices add to the sum of $3577 arising from invoices of $2981 and $924. That would amount to $3905. The second invoice is for ‘installation of vinyl wrap and wallpaper’ and so it appears that the builder has apportioned $596 of the second invoice to this claim.
Despite this lack of clarity and notification I find that the reduced claim is reasonable and allow it in the sum of $3577.
Item 39 - Supply basin and tapware for toilet $540
This item is agreed and I allow it in the sum of $540.
Item 40 - 4 x increase in wallpaper installation $320
This item is agreed and I allow it in the sum of $320.
Item 41 - 3 x Banquette seating alterations $1,260
This item is agreed and I allow it in the sum of $1260.
Item 42 - Access panel for C02 cannister including flashings $350
This item is agreed and I allow it in the sum of $350
Item 43 - Relocate Billi tap from original location $300
This item is agreed and I allow it in the sum of $300
Item 44 - Redesign timber slat wall to make them removable $300
The timber feature was changed to be removable so that the window could be accessed for cleaning.120
Mr Gray’s report opined that the work was not of sound design and that it required taping up[60].
In the circumstances I find that the claim is not ‘reasonable’ and refuse it.
Item 45 - Extra aluminium flashings on finishes $386
This item is agreed and I allow it in the sum of $386.
I find that the total amount that is to be allowed to the builder for variations is $31,354 plus interest.
THE OWNER’S MISREPRESENTATION CLAIM
This claim is particularised at paragraphs nine to eleven of the amended defence and counterclaim. The particulars are low on detail but claim reliance on conduct of the builder in e-mails between 18 March and 25 April 2016 as to ‘timely progression of the works’. I have already ruled in this matter that the parties are not confined to the pleadings[61] and the opportunity to provide very detailed particulars was at large in both the evidence and in final submissions.
It is the owner’s case that his reliance on the builder’s estimates for completion dates caused loss and damage, namely:
(a) Flying in an architect (Tim from TA) to view the premises on 11 and 12 April and prior to practical completion - $2,217.99[62];
(b) advertising costs for an alleged failed opening date on 11 April - $290.40 and $264 printing costs and $200 labour to hang the posters;
(c) advertising costs for an alleged failed opening date on 22 April - $290.40 printing costs and $200 labour to hang the posters;
(d) reimbursement of the franchisor for additional management support and travel disbursements due to the repeated changes to the opening dates of the premises - $6845.75.
The owners rely on the statement of Mr Luo, hard copies of emails and his evidence about conversations with the builder to support this counter-claim.
The owners could not produce proof that items (a) and (d) above had been paid for by them.
The builder made written submissions in the document entitled ‘Plaintiff’s reply submissions’ once the nature of the counterclaim had been set out in the ‘Defendant – owners’ submissions in reply’.
Pursuant to the owners’ submissions, they rely on the general protection offered by s 18 (as part of chapter 2) of the Competition and Consumer Act 2010 (Cth) (the CC Act) as the basis in legislation of this counter-claim.
Section 18 reads:
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).
Section 236 reads:
236 Actions for damages
(1) If:
(a) a person (the claimant ) suffers loss or damage because of the conduct of another person; and
(b) the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
(2) An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
Dong v Song (No.2) [2018] ACTSC 180 helpfully sets out the issues for determination:
24…
(a) Identification of the conduct;
(b) Whether the conduct was ‘in trade or commerce’;
(c) Whether the conduct was misleading or deceptive;
(d) Whether the second defendant was involved in any contravention; and
(e) Whether any loss or damage was suffered because of the conduct.
The key issues here are whether the builder’s conduct was misleading and deceptive and whether there was loss or damage. I will consider the latter first.
I pause to note that it was clear that the eventual practical completion date was, as a matter of common sense, not what either party had contemplated or desired.
I have already made rulings on the nature of the delays to practical completion. I have no doubt that these delays caused embarrassment to the owners. The evidence seemed to indicate that not only were they keen to open the restaurant swiftly, they also felt pressure from the franchisor to do so.
The claimed loss or damage is an unusual one – their guests did actually arrive and visit the scene. The crux of the complaint is that these visits occurred at the wrong time and the delays caused further multiple visits.
The part of the claim for the franchisor’s additional management support relies upon the owner’s case that the opening was delayed due to the builder. I have already found otherwise. Due to the delays caused by the owners’ plans and owner’s changes any extra franchisor’s administrative effort is the responsibility of the owners.
The extra travel may be a different thing.
I do not accept that the owners had no opportunity to change or delay flights. It must have been obvious that the restaurant was more than a day or two off completion on 11 April and 15 April when the architects and the franchisor’s directors attended.
The architect and franchisor were not called and statements from them were not tendered.
The submissions at paragraphs 269 to 276 are telling. The owners claim reliance on conversations with the builder that they say on:
(a) 20 February as to the works being completed on 18 March 2016;
(b) 04 March as to a handover on 31 March 2016;
(c) 17 March as to the works being completed on 02 April 2016;
(d) 21 March as the works being completed prior to 11 April 2016;
(e) 28 March as to the works being completed by 11 April 2016.
(f) 11 and 12 April 2016 as to the works being finished ‘tomorrow’;
(g) 13 April 2016 the works would be complete by 18 April 2016; and
(h) 23 April 2016 the works would be complete by 25 May 2016.
I have found that work was delayed due to the errors in the owners plans and that work on the contract resumed on 08 March. Any representation given on 20 February 2016 were well and truly superseded by the issue of the intervening errors in the plans and I find were not relied upon for the claims sought. Further they could not have been misleading or deceptive as they were affected by the error in the owner’s own plans.
Similarly on 04 March the builder did not have a set of accurate plans that matched the floor plan. He did not have a full set of plans until 16 March but proceeded with what he was provided on 07 March. I find it incredulous that any conversation prior to the provision of accurate plans would have been relied upon for a date to fly in the owner’s guests in mid-April of the same year and refuse to find so. Any conduct on 04 March was not misleading or deceptive.
On 21 March the owner’s case is that they relied upon a conversation about the completion date – but on the very next day the builder e-mailed them notifying them of the delays that were likely to be caused by the multiple variations that they had requested. I find that there could have been no reliance on any conversation from 21 February 2016 in those circumstances as any possible reliance was over-ridden by the owners own variations as part of their own conduct.
The owners submit that on 28 March there was a representation made by the builder about the works being completed by 11 April 2016. The builder countered this submission by denying the representations were ever made and referring to the email sent on 22 March 2016[63] setting out how the constant changes were taking their toll on the builder’s schedule.
A progress payment claim had been served on the previous day - 27 March 2016. Mr Luo gave evidence[64] that he met with the builder in person the next day and an agreement was made that the works would be finished on 11 April and the progress claim would be paid immediately as a show of good faith. The builder submitted that this conversation did not take place.
The owners submit that a result of these representations booking were made for the architect and directors of the franchisor to attend. The email dated 29 March 2016 at P126 of the Defendants bundle partly supports this contention.
That email states in part ‘as discussed, I am happy to firm up the opening schedule as below’. What follows then is a schedule commencing with 11 April as the store completion date. The builder was not an addressee of that e-mail.
There are no file notes or e-mails between the parties confirming any representation being made by the builder.
Timothy Yee, the architect was an addressee. He responded by email on 30 March indicating that he would fly to Canberra on 11 April.
The owners submit that on 11, 12, 13 and 15 April there were representations made by the builder about the works being completed on the next day (tomorrow). The builder submitted that these conversations did not occur and that given the vapour hood was installed on 19 April there could have been no misunderstanding about the ability to finish the works within 24 hours. The builder denied that these representations were made in his evidence and pointed out that there were no ceilings in the back of house at that time.[65]
In the circumstances of this case where:
(a) Neither the architect or any representative of the franchisee was called;
(b) No proof of payment of the invoices was tendered showing that the travel or other expenses for either of those parties were ever paid;
(c) Common sense evidence about the state of the premises was not disputed by the owners
I cannot be satisfied that these assurances were made by the builder on these dates let alone whether they were misleading and deceptive. The claim thus far must fail.
I expect that the submission at paragraph 180 (h) above was meant to state ‘…completed by 25 April’ and not ‘25 May’. I have ruled that the practical completion date was 29 April. There is a paucity of evidence about what loss was caused between 25 and 29 April even if there was a representation made and relied upon.
The visits were over by this date and there was no evidence about what portion, if any, of the extra management fees invoiced by the franchisor were relevant to this period.
Without concerning myself about delving into the evidence about what was or was not represented by the builder, the loss or damage is not proved and the final limb of this claim is refused.
THE OWNERS DEFECTIVE / INCOMPLETE WORKS CLAIM
The parties were not able to agree facts about the history or chronology of the alleged defective/incomplete works.
In their amended defence and counterclaim, the owners particularised the claim as follows:
Incomplete and defective works
7. The first defendant incurred (or will be required to incur) the sum of between $36,795 and $51,795 to complete Works that ought to have been completed by the Plaintiff.
8. The first defendant has been required to incur the sum of $31,017 to remediate defects in Works performed by the Plaintiff.
A response to further and better particulars set out details of those works.[66]
Clause 21 of the contract is headed ‘defects liability period’. It sets out the procedure for defects agreed by the parties when they executed the contract:
21 Defects liability period
(a) Any defect or other fault which may appear is to be notified in writing to the Builder within a period of twenty six (26) weeks after the date of practical completion. If the defect or fault is due to material specified by and supplied by the Builder or workmanship of the Builder being things which are not in accordance with this contract (called a “Builder defect” then they will be made good by the Builder at his own cost
The period of twenty six (26) weeks is to be known as the contract maintenance period.
Proper and actual notice of a Builder defect is critical
(b) The Owner is not entitled to engage an alternate builder to do work in relation to clause (a) above nor recover any cost of having work done by an alternate Builder unless the Builder has been advised in writing of all matters which the Owner requires to be rectified and has afforded the Builder a reasonable time to attend to such matters. If the Owner fails to do this then any costs or expense incurred by the Owner in having the work carried out by another builder will be solely at the liability of the of the Owner.
(c) The Builder is not obliged to carry out work where the need for the work is due to:
(i) Due to a failure by the Owner to properly maintain the works; or
(ii) Is necessary due to fair wear and tear caused by use of the works; or
(iii) Due to the exposure of the works to the environment in which they are situated; or
(iv) Due to a design related matter where the design is not the Builder’s responsibility; or
(v) A matter beyond the control of the Builder.
The builder submits that the owners repudiated the contract by their actions in relation to the alleged defective works by employing another tradesperson to conduct works in non-compliance with clause 21 of the contract. The builder submits that this repudiatory or ‘renunciatory’[67] conduct negates the claim for defective and incomplete works.
The builder submits that he did not terminate the contract as a result of the renunciation – rather, that he was locked out of the premises and excluded from performance. From that point on he submits, essentially, that his conduct related to recovering unpaid moneys under the contract.
The parties have not submitted any authorities on non-compliance with this clause of the contract in their written submissions. Indeed, the owners failed to address the issue of non-compliance with clause 21 at all, despite it being directly referred to in the builders final submissions[68] that were filed prior to the owners submissions in reply.
The claims were pleaded by the owners, but the pleadings did not particularise any basis for non-compliance with Clause 21 of the contract. It is necessary to consider the evidence on the topic:
The important aspects of the builder Mr Hoare’s evidence on these topics at the hearing can be summarised as follows:
· April 26 was the last day that he ‘was purely focused on doing works’.[69]’He saw that all of the fridges were stocked by 27 April and that the soft opening occurred on 29 April.
· An inspection for defects/incomplete work was carried out on 24 April and a defect report was provided to him by the owners on 27 April.[70]
· He returned to the site on 4, 5, 8 and 10 May to attend to defects and saw that the owners had engaged another builder on 10 May.[71]
· Mr Hoare found it ‘quite peculiar’ that the new contractor wasn’t doing what the scope of works entailed.[72]
· Mr Hoare was told by the owners on 10 May that he was no longer required and they were covering off defects to appease the franchisor who had contracted the new builder.[73] He did not attend the site after this date.[74]
· He issued an invoice on 19 May dated 16 May for amounts outstanding from the final quote[75] and he received correspondence soon after to say there was going to be a dispute
· There was a ‘dispute meeting’ on 23 May with Mike. He understood that the other owners had declined to attend.[76] Mike indicated the owners did not intend to pay and didn’t believe the builder was entitled to that remaining amount.
· The builder asked the owners to pay at least the final contract sum, and then dispute variations later and Mike said ‘we don’t see that as happening’.[77]
· In cross-examination the builder said that by late April he had commenced another project but not on a full-time basis[78] and that he did not believe that the premises were ‘barely fit for purpose’[79] around 28-29 April.
· He assumed that he still had a key on 5 May.[80]
The builders statement dated 03 June 2020 deals with the issue at paragraphs 191 to 205 inclusive. It broadly reflects the evidence at hearing. His reply statement dated 12 August 2020 sets out similar evidence at paragraphs 52 and 53.
Qian Xiao gave evidence in person in the owners case. The important aspects of his evidence on these claims can be summarised as follows:
There were issues with the electrical supply on the blogger event night.[81].
On 27 April 2016 Mr Xiao sent a document to the franchisers and operators regarding things Mr Hoare had missed, following an audit by the architect[82] (See EXP9 P140 on).
Because he was at the shop daily, he was looking at how the work was progressing and felt it was his duty to report back to everyone.[83]
The cool room was not functional on 21 April when meat was delivered from Sydney.[84]
In September 2016 the compressor on the cool room had blown out and needed to be replaced.[85] Mr Xiao said that the tradesmen involved in that work had advised Mr Hoare that the unit would require sufficient airflow otherwise the warranty on the unit would be invalid.[86] I note that nothing about the cool room was put to Mr Hoare in cross-examination.
In cross-examination Mr Xiao said he was not involved in the defects list[87] and that he was unaware of another builder being brought in to do work on the restaurant.[88]
He could not recall or remember the locks changing or getting new keys on or around 15 May.[89]
It was not his role to raise defects or deal with final payment.[90]
Mr Xiao’s statement dated 17 July 2020 and statement in reply dated 01 September 2020 do not deal with the employment of ‘James’ or how the relationship between the builder and owners broke down.
Zhongyang ‘Mike’ Luo also gave evidence in the owners case. The important aspects of his evidence on these claims can be summarised as follows:
The locks were changed on 19 May in response to having sensitive employee information/less contractors coming in and out.[91]
· A tradesman named James was engaged to fix urgent defects as the owners were not skilled in construction.[92] James was engaged on about 4-5 May.[93]
· James was paid $7000 in cash to rectify urgent health and safety defects.[94] (I note that there is no record of that payment).
· Mr Luo believed that the defect list was provided to James and he completed that list.[95]
· Mr Hoare fixed a minority of items on the defect list prior to James commencing work on 10 May[96]
· After practical completion they noticed defects on an almost daily basis, including health and safety concerns.[97]
· He had a confrontation with Mr Hoare about delays with fixing the defects and Mr Hoare mentioned having someone do the work in his stead and offered to pass the cost of fixing defects on to his final invoice.[98] (I note that this was not put to Mr Hoare in cross-examination)
· He met with James on site on 10 May discussing work required when Mr Hoare attended and they had a brief conversation where Mr Hoare said ‘are you the new contractor fixing things’ and James said ‘yes, I’m just helping a friend’. Mr Hoare turned around and walked away.[99]
There was extensive cross-examination of Mr Luo on these issues:
He agreed that Mr Hoare worked a very long day on 29 April in preparation for the food blogger event that evening.[100]
Mr Luo did not work early mornings and could not be sure if Mr Hoare was on site on 5 and 8 May in the hours before the restaurant opened.[101]
Mr Luo confirmed Mr Hoare attended in the early morning on 4 May which was the day of the grand opening.[102]
It became ‘really difficult’ to contact Mr Hoare from around 5 May.[103]
When a number of text messages between Mr Luo and Mr Hoare were put to Mr Luo he said that Mr Hoare would respond to the easy ones but not the difficult and urgent issues and that usually to contact Mr Hoare they would call or catch him on site and raise issues verbally.[104]
Mr Hoare had said he was happy for another builder to do the work of fixing defects and for that to be deducted from his price[105] but Mr Hoare did not say that he would stop work.[106]
Stephen found James the new builder.[107]
It was not intended for James to complete all building work from 10 May 2016, rather, he was only there to do urgent work while they waited for Mr Hoare to return.[108]
There was a dispute resolution meeting on either 23 or 24 May 2016 with Mr Hoare and it was possible that on that date Mr Hoare again requested a complete defects list.[109]
He denied saying to Mr Hoare that BBSJ no longer wanted him to attend the restaurant.[110]
He did not recall Mr Hoare saying that a cool room vent was being installed when the full defect list came through.[111]
He did not know of coved skirting being in the premises next door ready to install.[112]
The meeting on 23/24 May was a high level meeting and there was no discussion about the cool room vent requirement.[113]
He knew that Mr Hoare had the pendant lights and had cut them to size by the time of the meeting on 23/24 May. Mr Hoare said he would install the lights when final payment was made but he could not recall if the defect list was also a condition of installing the lights.[114]
The owners had not decided they did not want Mr Hoare to finish the work and that they ‘desperately needed’ him to finish the work.[115]
He was not aware that Mr Hoare had the materials ready to fix some of the defects.[116]
Mr Luo provided a statement dated 19 July 2020. It deals with the engagement of ‘James’[117] but makes no mention of Mr Hoare agreeing to deduct the cost of James’ work from his price. Mr Luo’s reply statement dated 01 September 2020 also failed to include that allegation. I concluded that his evidence at hearing on this aspect was contrived and intentionally dishonest.
Ultimately, I am not persuaded by the owner’s case on defects and incomplete works. I find that in the absence of any compliance with the rule in Browne and Dunn[118] and deeply concerning evidence of an inability to prove payment to James and a failure to call him as a witness, the owners have not proved to my satisfaction on the civil standard that the builder consented to the use of James at all.
The builder was excluded from the works when the locks were changed on or around 15 May 2016. At that point there remained more than 22 weeks left for him to make good pursuant to the contract that the parties executed.
From 15 May he had no opportunity to make good any defects or other issues with the works. There is a ring of truth to his recollection of the meeting on 23 May 2016 about the owners forming a view that he was not entitled to payment. That view is reflected in the conduct of locking the builder out and the conduct of the proceedings. It is also supported in the statement of Mr Luo at paragraph 130 and his reply statement at paragraphs 112-118 inclusive. I reject any of the owners evidence to the contrary.
By virtue of a plain English contract, the builder had 26 weeks to remedy any defects. By their own conduct, no doubt from a desire for haste, the owners prevented the builder from complying with the contract. They disentitled the builder from the opportunity to perform. Not a single authority was proffered about how this entitled the owners to claim for defective or incomplete works in those circumstances.
The owners were not at liberty to disregard the portions of the contract on defects that I have set out at paragraph 196 above.
I refuse the owners claim on defective and incomplete works in its entirety.
DECISION
I allow the builders claims in the sum of $107,030.72 as follows:
- $32,924.00 (inc GST) for the final contract payment sum;
- $22,059.08 for interest on that sum[119];
- $31,354 (Inc GST) for variations;
- $20,693.64 interest on variations.[120]
I dismiss each of the owners defences and counter claims.
I will receive written submissions (no longer than 3 pages and including hyperlinked citations to authorities) on costs as follows:
- Builders submissions on costs are to be filed and served by close of business 07 January 2022;
- Owners submissions on costs are to be filed and served by close of business 14 January 2022; and
- Any builders submissions in reply are to be filed and served by close of business 21 January 2022.
I will then publish a decision on costs from my chambers.
| I certify that the preceding two hundred and twenty (220) numbered paragraphs are a true copy of the Reasons for Decision of his Honour Magistrate Stewart Associate: Maddison Higgs Date: 16 December 2021 |
[1] Erroneously calculated as $120,747.81 in the builder’s final submissions
[2] 1% interest per month 02 May 2016 to 14 May 2021 as per clause 15(g) of the contract
[3] 1% interest per month 16 June 2016 to 14 May 2021 as per clauses 15(g) and 15(c)(iii) of the contract
[4] Erroneously calculated in the owner’s final submissions as $106,371.78
[5] See Schedule 3 of the contract at P27 of EX P4.
[6] EX P4 P27
[7] Ibid
[8] TX P199 L21
[9] Builders submissions P 5.
[10] TX PP 195-197
[11] EX P4 P15
[12] EX P4 P13
[13] TX P 194
[14] Witness Statement of Zhongyang Luo dated 19 July 2020 Paragraph 39
[15] Owners submissions # 116.
[16] EX D9 P175-178
[17] Op cit
[18] EX P4 P13
[19] TX P
[20] TX P 199 generally
[21] EX P4 P15
[22] TX 209 -210
[23] Witness statement op cit and see quote from his statement at my paragraph 22
[24] EX P9 PP 140-159
[25] Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; (2017) 95 NSWLR 82
[26] See for example Spiers Earthworks Pty Ltd v Landtec Projects Corp Pty Ltd (No 2) [2012] WASCA 53; (2012) 287 ALR 360
[27] Ex P4 PP137 - 157
[28] Email from the owner’s architects to the builder containing demolition plan and proposed floor plan
[29] See email from “Stephan Han” to the builder at 5.39 pm at EX P4 P36
[30] See email at EX P4 171
[31] Ibid paragraph 167.
[32] Ibid
[33] TX P126
[34] EX P4 PP202- 204
[35] Ibid
[36] EX D5 P
[37] EX P4 P 190
[38] TX 1338
[39] Ibid
[40] EX P4 P163
[41] See owners submissions paragraph 40-41
[42] EX P4 P190
[43] EX P4 P 204 L6
[44] EX D5 P59
[45] EX P4 P204 L7
[46] EX D5 P58
[47] EX P4 P204 L11
[48] EX P4 P193
[49] Ibid.
[50] EX P4 P204 L7
[51] EX P4 P204 L7
[52] EX P4 P204 L7
[53] TX186
[54] TX186
[55] Owners submissions 4.32 and EXP5 plans 19 and 58
[56] TX P376
[57] See plans at EX P4 56 and 143
[58] TX P188
[59] EX P4 P 175
[60] EX D9 P 237
[61] ACT Commercial Builders Pty Limited v BBSJ Partners Pty Limited & Anor [2020] ACTMC 28
[62] I note that EX 9 P 173 is an invoice from t-a square (the architects) for $3,209.78.
[63] Ex P4 P 171
[64] Tx P374
[65] TX P212 LL30-35
[66] Court Book PP 52-53
[67] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61 (2007) 233 CLR 115
[68] Plaintiff’s final submissions PP20-21.
[69] TX P139 L10
[70] TX P139 LL35-40
[71] TX P140 LL29-40
[72] TX P142 L5
[73] TX P 142 7-8
[74] TX P 165 L46
[75] TX P 147 LL21-22
[76] TX P 152 L15
[77] TX P 152 LL41-46
[78] TX P 213 LL 18-19
[79] TX 215 L35
[80] TX P214 L 21
[81] TX P253 LL11-30
[82] TX P254 LL31-37
[83] TX P255 LL4-6
[84] TX P262 L 40
[85] TX P 263 LL28-29
[86] TX P 264 LL5-8
[87] TX P324 L20
[88] TX P 325 LL20-21
[89] TX P325 L45 – P326 L4
[90] TX P326 LL15-18
[91] TX P398 LL21-34
[92] TX P391 LL27-34
[93] TX P394 L11
[94] TX P391 LL36-41
[95] TX P394 LL4-8
[96] TX P394 LL 12-14
[97] TX P395 LL4-5
[98] TX P395LL10-20
[99] TX PP397-8 generally
[100] TX P431 LL5-15
[101] TX P431 LL40-45
[102] TX P431 L37
[103] TX P432 LL14-15
[104] TX P433 LL1-7
[105] TX P436LL14-16
[106] TX P436 L35
[107] TX P436 L 30
[108] TX P437 LL7-10
[109] TX P437 LL35-42
[110] TX P437 L44 – P438 L2
[111] TX P438 LL42-44
[112] TX P 438 LL46-47
[113] TX P439 LL10-15
[114] TX 439 LL32-40
[115] TX 446 LL29-31
[116] TX P449 LL37-38
[117] See paragraphs 126-130 and 164-165.
[118] (1893) 6 R 67
[119] 1% interest per month 02 May 2016 to December 2021 (67 months)
[120] 1% interest per month 16 June 2016 to December 2021 (66 months)
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