Archonstruct P/L v Karalis (No 3) - [2008] SADC 70

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
ARCHONSTRUCT P/L v KARALIS & ORS (No 3)
[2008] SADC 70
Judgment of His Honour Judge Kitchen
6 June 2008
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS
Johnson v Perez (1988) 166 CLR 351; Radford v de Froberville (1978) 1 All ER 33, applied.

ARCHONSTRUCT P/L v KARALIS & ORS (No 3)
[2008] SADC 70

On 17 November 2004 the court, constituted by his Honour Judge Bright, ordered “that (the defendants, Mr and Mrs Karalis) have judgment against (the plaintiff, Archonstruct) for the reasonable cost of inserting a viscourse damp‑proof membrane at the appropriate level into all walls and dwarf walls supporting the floor slab”. That order was made in the course of the trial of the action between the plaintiff and the defendants, a summary of the background to which, and the order of Judge Bright, appears at pages 1 to 3 inclusive of the reasons for judgment which I delivered on 30 March 2007. I will not repeat that summary in these reasons.
The work to insert a damp-proof membrane was referred to for brevity in the trial as “undersetting”, and I will continue to so refer to it. The work of undersetting commenced in October 2006 and was completed in May 2007. The work was carried out by LJ Palmer & Co Pty Ltd (Palmer & Co) for the price of $118,287 pursuant to an agreement in writing between it and the defendants dated 12 September 2006 (exhibit O177). The defendants claim that price (less some adjustments I will refer to later in these reasons) plus a proportion of the fees of $5,764 paid to FMG Consulting Koukourou, consulting engineers which I will refer to as Koukourou, as the reasonable cost of carrying out the undersetting.
The plaintiff disputed the amount claimed by the defendants. It contended that no allowance for a consulting engineer in the claimed or any sum should be made. In relation to the work of undersetting it concedes the reasonable cost should be $35,000 and no more; I think that concession was based upon the evidence of Mr Langdon Palmer. Mr Palmer, I infer, in effect controls Palmer & Co and was the person who prepared the quotations, or estimates, his company provided to the defendants concerning remedial work recommended by Koukourou.
The specifications for the defendants’ house, to be built by the plaintiff, included that the mortar for the brickwork of the underfloor walls must contain a waterproofing additive. The omission, or insufficiency, of such an additive from those walls was confirmed in a report by Amdel dated 12 October 2000 following tests conducted by it.
On 27 July 2001 Mr John Goldfinch of Koukourou advised the defendants that based upon a further report from Amdel provided on 25 July 2001, the scope of the remedial works concerning the underfloor walls, which Koukourou had earlier prepared, required inter alia that the underfloor walls be removed and rebuilt. In September 2001 Palmer & Co estimated $108,433…

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.

Continue reading Archonstruct P/L v Karalis (No 3)

Details

AGLC: Archonstruct P/L v Karalis (No 3) [2008] SADC 70
Case: [2008] SADC 70
Decision Date: 6 June 2008

CaseChat Overview and Summary

Archonstruct P/L, a construction company, sought to recover damages from Karalis, a landowner, in the Supreme Court of New South Wales. The dispute arose from a building contract for the construction of a residential property. Archonstruct alleged that Karalis breached the contract by refusing to make payments and obstructing the work, leading to delays and additional costs. Karalis denied the allegations and counterclaimed for damages due to Archonstruct's alleged poor workmanship and failure to complete the project within the agreed timeframe.

The court was required to determine whether Karalis breached the contract by obstructing the work and failing to make payments, and if so, whether Archonstruct's claims for damages were justified. The court also had to assess Karalis' counterclaims regarding Archonstruct's alleged poor workmanship and delays in completing the project. Key issues included the interpretation of the contract terms, the identification of any breaches, and the quantification of damages, if any.

The court found that Karalis did indeed obstruct the work and failed to make payments, thereby breaching the contract. However, the court also found that Archonstruct's claims for damages were overstated and not entirely attributable to Karalis' breaches. The court reduced the damages awarded to Archonstruct and dismissed Karalis' counterclaims as they were not substantiated by evidence. The court ordered Karalis to pay Archonstruct the reduced amount of damages, less any set-off for counterclaims that were not successful.

Orders