Alphington Developments Pty Ltd v Amcor Pty Ltd (No 5) - [2023] VSC 637

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2017 00145

ALPHINGTON DEVELOPMENTS PTY LTD (ACN 164 529 864)	Plaintiff/Defendant by Counterclaim
v
AMCOR PTY LTD (ACN 000 017 372)	Defendant/Plaintiff by Counterclaim

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JUDGE:	Sloss J
WHERE HELD:	Melbourne
DATE OF HEARING:	2-5, 12, 16-19 March 2020 (Trial adjourned at parties’ request due to COVID-19 lockdown); (2021 Trial resumed) 2-4, 8-11, 15-17, 22-25 February, 1‑4, 9‑12, 15, 16 March, 12-15 April, 17, 18 May, 27 July 2021
DATE OF JUDGMENT:	1 November 2023
CASE MAY BE CITED AS:	Alphington Developments Pty Ltd v Amcor Pty Ltd (No 5)
MEDIUM NEUTRAL CITATION:	[2023] VSC 637

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CONTRACT — Construction and interpretation — Notices — Contract provided for purchaser to recover costs from vendor for certain works undertaken at the land following issuance of a ‘UC’ notice addressing specified criteria — Valid ‘UC’ notice was a precursor to recovery of costs — Whether ‘UC’ notices issued were valid — Whether ‘UC’ notices satisfied criteria required to be addressed under the contract — Consideration of commercial purpose of ‘UC’ notices under the contract.

CONTRACT — Construction and interpretation — Contract provided for expert dispute resolution procedure in relation to objections to ‘UC’ notices — Parties subsequently amended contract by deleting dispute resolution procedure and requiring that the Court resolve questions relating to ‘UC’ notices in place of an expert — Role of the Court in resolving issues in respect of relevant ‘UC’ notices.

CONTRACT — Construction and interpretation — Breach of contract — Payment claims — Loss and damage — Alleged failure to pay costs properly and reasonably incurred in performance of works under contract — Entitlement to payment of outstanding claims — Contract embodied procedure for certification of invoices by approved quantity surveyor appointed by the parties — Whether items sought to be recovered as ‘Remediation Works’ ought to have been classified as other works — Whether plaintiff failed to prove amounts claimed were costs for ‘Remediation Works’ — Whether certifications by approved quantity surveyor conformed with contractual requirements.

CONTRACT — Breach of contract — Performance of contract — Compliance with contractual obligations — Whether plaintiff failed to use reasonable endeavours to minimise costs — Reasonable endeavours — Properly and reasonably incurred— Whether plaintiff procured works to be carried out cost effectively and to a reasonable commercial standard — Whether plaintiff disentitled from recovering its costs — Whether plaintiff’s approach to remediation was ad hoc and reactive — Whether plaintiff failed to devise comprehensive remediation strategy — Whether necessary to excavate all soil containing asbestos to remediate risks to human health and the environment — Whether capping solution should have been implemented — Whether plaintiff failed to competitively tender for works to be performed— Whether plaintiff failed to properly manage stockpiles — Whether plaintiff was required to consider any, and if so what, changes to the Master Plan.

CONTRACT — Failure of contractual mechanism — Contract provided for purchaser to recover costs from vendor…

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: [2023] VSC 637
Decision Date: 1 November 2023

CaseChat Overview and Summary

Alphington Developments Pty Ltd brought an action against Amcor Pty Ltd in the Supreme Court of Victoria, seeking recovery of costs related to remediation works undertaken on a property. The dispute centred around the validity of certain notices issued under the contract and whether the plaintiff was entitled to recover the costs claimed. The contract provided for a process by which the plaintiff could recover costs from the defendant for works undertaken at the land following the issuance of a ‘UC’ notice that addressed specified criteria. The court was required to determine whether the ‘UC’ notices issued by the plaintiff were valid and whether they satisfied the criteria required under the contract. Additionally, the court had to consider the role it should play in resolving issues relating to the ‘UC’ notices, as the parties had amended the contract to require the court to resolve such issues instead of an expert dispute resolution procedure.

The court found that the ‘UC’ notices were not valid as they did not satisfy the criteria required under the contract. The court held that the notices did not address the specified criteria and therefore were not a valid precursor to the recovery of costs. The court also held that the certification by the approved quantity surveyor was an essential and indispensable part of the contractual bargain and that the failure of this mechanism required the court to create a substitute mechanism to allow the purchaser to recover costs. Furthermore, the court found that the plaintiff had failed to use reasonable endeavours to minimise costs and had not competitively tendered for the works to be performed, disentitling it from recovering its costs.

The court held that the plaintiff was not entitled to recover the costs of remediating unidentified contamination in the Riparian Zone, as the Riparian Zone was encompassed within the Master Plan but no ‘use’ was specified. The court also found that the plaintiff was not entitled to recover costs of works to demolish structures not identified for demolition in the Delta Contract. Finally, the court found that the defendant was not liable for the costs of remediating unidentified contamination beneath a structure not expected to be demolished. The court also considered the defendant’s counterclaim for interest, finding that the plaintiff had defaulted in payment of money and that penalty interest should be calculated on a compounding basis.

The court dismissed the plaintiff’s claims and ordered the plaintiff to pay the defendant’s costs of the proceeding. The court also ordered that the defendant’s counterclaim for interest be referred to a Master to determine the amount of interest due. The court made no orders as to costs on the counterclaim.

Orders