Adapt Constructions Pty Ltd v Whittaker and Luff

Case [2015] ACTSC 188


SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Adapt Constructions Pty Ltd v Whittaker & Anor

Citation:

[2015] ACTSC 188

Hearing Date:

2 March 2015

DecisionDate:

26 August 2015

Before:

Burns J

Decision:

Leave to appeal is refused.

Category:

Principal Judgment

Catchwords:

CONTRACTS – Building, Engineering and Related Contracts – defective building work – damages – whether cost of demolition and rebuild reasonable – liquidated damages – rate of liquidated damages for delay ‘zero’ – whether intended to exclude claim for unliquidated damages for delay – procedural fairness – natural justice – credibility of witnesses. 

Legislation Cited:

Commercial Arbitration Act 1986 (ACT) s 38

Cases Cited:

Baese Pty Ltd v RA Bracken Building Pty Ltd (1990) 6 BCL 137
Bellgrove v Eldridge
(1954) 90 CLR 613

Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2006] NSWCA 361
Cellulose Acetate Silk Co Ltd v Widnes Foundry (1925) Ltd [1933] AC 20
Commonwealth v Rian Financial Services and Developments Pty Ltd (1991) 105 FLR 239
Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312
Diestal v Stevenson [1906] 2 KB 345
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689
J-Corp Pty Ltd v Mladenis [2009] WASCA 157
Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] A.C. 724
Promenade Investments Pty Ltd v New South Wales (1991) 26 NSWLR 184
Radford  v De Froberville [1978] 1 All ER 33
Ruxley Electronics and Construction Ltd v Forsyth [1996] 1 AC 344
Stekovic v Polyseal Waterproofing Technologies Pty Ltd & Contexx Pty Ltd [2013] ACTSC 195
Temloc Ltd v Errill Properties Ltd (1987) 39 BLR 30
Turner Corp Pty Ltd (Receiver & Manager Appointed) v Austotel Pty Ltd (1994) 13 BCL 378
Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd (2005) 218 ALR 1
Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239

Texts Cited:

Trevor Thomas, ‘$Nil liquidated damages: An exhaustive remedy for delay under a construction contract?’ (2008) 24 BCL 82

Michael Hollingdale, ‘Designing and enforcing liquidated damages claims to maximise recovery’ (2005) 21 BCL 412

Parties:

Adapt Constructions Pty Limited (Appellant)

Brad Whittaker (First Respondent)

Narelle Luff (Second Respondent)

Representation:

Counsel

Mr S Whybrow (Appellant)

Mr G Blank (Respondents)

Solicitors

Bradley Allen Love Lawyers (Appellant)

Sneddon Hall & Gallop (Respondents)

File Number:

SCA 83 of 2014

Decision under appeal: 

Court/Tribunal:             Institute of Arbitrators and Mediators Australia

Before:  Mr Bryan Ahern

Date of Decision:         14 April 2014; 1 September 2014

Case Title:  Arbitration of disputes between Adapt Constructions Pty Ltd and Brad Whittaker and Narelle Luff concerning Contract for Building a Home at 5 Sue Watt Place URIARRA ACT Interim Award; Arbitration of disputes between Adapt Constructions Pty Ltd and Brad Whittaker and Narelle Luff concerning Contract for Building a Home at 5 Sue Watt Place URIARRA ACT Final Award

BURNS J:

Background

  1. This matter concerns the construction of a residential building at Urriarra in the Australian Capital Territory (the Property). The appellant was the builder of the Property and the…

Continue reading Adapt Constructions Pty Ltd v Whittaker and Luff

Sign in free to access the full text

Details
AGLC
Adapt Constructions Pty Ltd v Whittaker and Luff [2015] ACTSC 188
Case
[2015] ACTSC 188
Decision Date

CaseChat Overview and Summary

In this case, Adapt Constructions Pty Ltd sought damages from Whittaker and Luff, the purchasers of a property, for the cost of rectifying defective building work. The purchasers had contracted with Adapt to construct a house, but the work was substandard, leading to significant costs to correct the defects. The purchasers later sold the property, and the new owners sought to recover the rectification costs from the original purchasers. The primary issue for the court was whether the cost of demolition and rebuilding was a reasonable measure of damages and if the rate of liquidated damages, set at zero, was intended to exclude claims for unliquidated damages for delay. Additionally, the court considered whether procedural fairness and natural justice were observed, specifically the credibility of witnesses.

The court examined the nature of the contractual defects and the reasonable costs to rectify them. It considered whether the cost of demolition and rebuilding was a proportionate and reasonable measure of damages. The court also assessed the effect of the zero rate of liquidated damages on the ability to claim unliquidated damages for delay. It scrutinised the fairness of the process and the credibility of the evidence provided by both parties. The court found that the cost of demolition and rebuilding was a reasonable measure of damages. The zero rate of liquidated damages was not intended to exclude claims for unliquidated damages for delay. The court determined that the process was fair, and the credibility of the witnesses was adequately assessed.

The court concluded that the damages awarded were reasonable, and the rate of liquidated damages did not preclude a claim for unliquidated damages for delay. It found that procedural fairness and natural justice were observed. The purchasers were not liable for the cost of rectification. The court denied leave to appeal, upholding the decision that the purchasers were not responsible for the rectification costs.

Orders

Orders of the court

Leave to appeal is refused.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.