Ariki Constructions Pty Ltd v Clovis - [2011] SADC 13

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
ARIKI CONSTRUCTIONS PTY LTD v CLOVIS AND ORS
[2011] SADC 13
Judgment of His Honour Judge Barrett
22 February 2011
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - PERFORMANCE OF WORK - REMEDIES FOR BREACH OF CONTRACT - DAMAGES - OTHER MATTERS
The plaintiff sought to recover unpaid invoices for building work done pursuant to a single agreement to erect four warehouses. He also sued for a lost opportunity to complete the works when he was wrongly locked out. The defendants claim the plaintiff breached one contract which was to erect one warehouse by cost overruns, delay and defective workmanship, and he breached a second contract entered into after he repudiated the first.
Held: There were two contracts, each relating to the construction of one warehouse. The plaintiff breached both. The defendants are entitled to damages for the breaches.
Wigan v Edwards and Anor (1973) 47 ALJR 586; North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd and Anor [1979[ 1 QB 705, considered.

ARIKI CONSTRUCTIONS PTY LTD v CLOVIS AND ORS
[2011] SADC 13
Introduction

This is a building dispute arising from the proposed construction of warehouses at Seaford. Discussions about the construction took place principally between Mr Wolferstan, the builder (second defendant by counterclaim), and Mrs Clovis the principal client (first defendant/first plaintiff by counterclaim). Mr Wolferstan’s business is the plaintiff. For convenience however I will refer to Mr Wolferstan as the plaintiff. Except where necessary to distinguish between them, I will refer to Mr and Mrs Clovis as the defendants.
The plaintiff is suing for his building costs. He was locked out of the building site by the defendants before he completed construction of the warehouses. In addition to his building costs he sues for the lost opportunity to complete the contract. He says he had a single contract to construct 4 warehouses on the site at Seaford. The defendants unjustifiably breached the contract by failing to pay progress payments and by preventing him from completing the project.
The defendants deny that there was a contract to build 4 warehouses. They say there was a contract to build one warehouse, the first of three phases of the project. After the completion of the first phase they would decide whether or when they would proceed with the other two phases. They reserved the right to decide whether the plaintiff would undertake those phases. In the event there were such serious delays and defects in the construction of the first phase and there were such cost overruns that the plaintiff was in breach of the agreement. They say that there were either two contracts between the parties, or there was a variation of the original contract. They say that when the delays, defects and cost overruns became intolerable they obtained legal advice. As a result of that advice the plaintiff was prevailed upon to enter a variation, or a more limited contract to complete certain building works for a fixed, final price. The plaintiff breached that agreement as well. The defendants were obliged and entitled to prevent the plaintiff from completing the work. The plaintiff was justifiably locked out of the site. The defendants were put to the cost of rectifying the defects and completing the first phase. Their business incurred costs as a result of the delays. They counter-claim for those costs.
Issues for determination
1.How many contracts were entered into?
2.Who were the parties to the contract(s)?
3.What were the terms of the contract(s)?
4.Were the terms of any contract(s) breached, and if so, by whom? Did the plaintiff breach the contract by causing unacceptable:
a) delays;
b) cost overruns;
c) defects?
5.Did the defendants breach the contract by?:
a) failing to pay agreed invoices;
b) unjustifiably locking the plaintiff out?
What are the consequences of any proved breach of contract?
Background and chronology
What follows is a largely undisputed account of events.
In April 2006 Mrs Clovis was a director of Mec-Tec (third plaintiff by counterclaim), a motor mechanical business which was run by her son William Schultz. Her husband, Mr Michael Clovis (second defendant/second plaintiff by counterclaim), became a director of the company in June 2009. On 4 April 2006 the business began trading from 26 Shearer Drive Seaford, coincidentally a short distance from the plaintiff’s work depot at 20 Farrow Circuit Seaford. The business had a lease over the Shearer Drive property for 12 months from 13 April 2006, with options to renew for a further four one year terms, ie with options to renew in April of each of 2007, 2008, 2009 and 2010.
After operating from the Shearer Drive premises for about 6 months the defendants decided that they needed larger, purpose-built premises to expand the business. In December 2006 they purchased a block of land at Lot 8 Farrow Circuit for that purpose. That is where the warehouse building occurred. That site was across the road from the plaintiff’s work depot. The defendants visited the plaintiff at his premises between late 2006 and mid 2007 and discussed their plans.
In June 2007 the defendants spoke to the plaintiff on a site in Lonsdale where he was working. They discussed a quote for the construction of 4 warehouses on their block. The plaintiff gave a verbal estimate of $800,000 but said that he would give a final written quote once he had received the engineer’s plans.
There is a dispute about aspects of the formation of a contract. It is not disputed that whatever agreement was reached, it was partly oral and partly written. The written part includes a quote or several quotes. The plaintiff says that there was an agreement to construct all four warehouses. The defendants say that there was an agreement to construct one warehouse, warehouse number 4, the first of three phases of construction. The first phase was the warehouse in which the defendants were going to operate their mechanical business. It would be for further discussion whether the plaintiff constructed the later two phases, warehouses 1, 2 and 3. I will return to that dispute.
It is common ground between the parties that the plaintiff undertook preliminary site work in late August 2007. He cut and levelled the whole block in anticipation of the eventual erection of the four warehouses. His first invoice was for the earthworks and was dated 31 August 2007.
In September the plaintiff provided nine quotes comprising three quotes for each of three phases of the job. The quotes are all dated 15 September 2007.
The plaintiff says he told the defendants that the job would take 6 to 9 months. That was to complete all four warehouses. The defendants say that he estimated it would take 6 months but that was only ever in relation to the first phase, warehouse number 4.
It is common ground that the plaintiff did no building work between completing the earthworks in August 2007 and May 2008, some 8 months later. The plaintiff was working on other jobs.
In May 2008 the plaintiff dug the strip footing and laid the concrete slab for the office which was at the front of warehouse 4. Between May and October 2008 some 5 months, the plaintiff was away from the site working on other jobs.
There is a dispute about delay. The plaintiff says he made it clear at the outset that he would attend to the defendants’ project when he was able to get away from other work. The defendants do not deny that the plaintiff said from time to time that he was busy with other jobs but he never said at the outset that he would only be able to work on their project when he was not engaged elsewhere. He never expressly varied the estimate of 6 months to complete the job. In fact of course, his claimed estimate of 6 to 9 months had passed before any construction work, as opposed to earth works, began. The parties are in dispute about whether delay amounted to a breach of the contract.
The parties are also in dispute about the adequacy of invoices and cost overruns.
In late June 2009, just over a year after construction work began, the defendants consulted lawyers who prepared what purports to be a variation of the contract. On 1 July 2009 Mr Clovis and his accountant, Mr Tony Dutton, went to the plaintiff’s premises with the solicitor’s letter of the same date and a cheque for $37,400 made out to the plaintiff. The defendants say that in consideration of:
1)their paying what they say was the only then outstanding invoice;
2)their releasing the plaintiff from any obligation (if there was any obligation) to complete phases 2 and 3 of the project; and
3)their forbearing from suing for delays, defects in workmanship and overcharging;
the plaintiff would complete certain itemised works at specified times.
The plaintiff says that the letter was not a contract. He signed it under economic duress. The plaintiff says he continued to carry out the building works in a workmanlike manner and as quickly as he reasonably could. He was unreasonably locked out and escorted off the site on 27 September 2009. He was prevented from repairing some defects which required reworking, he was denied money owing to him and he lost the opportunity to complete the project as agreed.
The defendants say he breached the varied agreement by sending further invoices, missing agreed deadlines and plainly he had no intention of remedying defects. If he had not been locked out he would have poured the slab for the floor of the rest of warehouse 4 and that would have covered up several defects which would have detracted from the structural integrity of the building.
That then is a history of the matter including undisputed facts. I have highlighted areas of dispute.
I turn to the issues for determination.
Issue 1 – how many contracts were entered into?
Both parties assert that there was an initial contract which was partly written and partly oral. It was entered into around September 2007.
I will return shortly to identifying the contract, its terms and the contracting parties, but for the moment I will simply refer to it as the “initial contract”. There will be a question as to whether there was a variation or a second contract.
The plaintiff says that the initial contract was the only agreement. The defendants say that there was either a second agreement on 1 July 2009 or on that day there was a variation of the first agreement.
I find that there was a second contract. I explain why.
Mr Warburton for the plaintiff submitted that, despite the parties signing the solicitor’s letter of 1 July 2009, there was no agreement. He argued two bases for that submission.
First, he said there was no consideration. The consideration asserted by the defendants is that they undertook to forbear from recovering losses occasioned by the plaintiff’s delays defects and overcharging. The solicitor’s letter is in two parts[1]. The first part, paragraphs 1 to 12 inclusive, set out the defendants’ version of the history of the building works. The defendants do not claim that the plaintiff’s signature on the letter indicates his acceptance of the accuracy of that history. The second part of the letter is paragraphs 13 to 15 inclusive. That part purports to set out the terms of the agreement.
[1] JLC 31 to affidavit of Jillian Clovis Exhibit D1.
In the first part the letter recites the alleged delays. It says that the initial contract was for the first phase of the project only. The agreed price was $282,000, the sum of the three quotes for the first phase, all of which were dated 15 September 2007. The completion date was by or before December 2008. It is not clear how that date was arrived at. The defendants’ evidence at trial was that in September 2007 the plaintiff estimated that it would take him 6 months, (say April 2008) to complete the first phase. I note that the letter suggests a proposed agreement between the defendants and the company Ariki Constructions Pty Ltd which only obtained a builder’s licence on 2 December 2008. It may be that the authors of the letter intended that the company would be the contracting party and that that company only had a builder’s licence from December 2008. Otherwise there is no explanation for the completion date of December 2008.
The defendants seem to have raised no objection with the plaintiff about some delays caused by him working on other projects. In any event, the letter and meeting on 1 July 2009 are some 6 months after December 2008.
The plaintiff accepts that he told the defendants he estimated in September 2007 that the job would take 6 to 9 months (say July 2008). In paragraph 11.4 of the letter the defendants assert, without particulars, that they had lost income by not being able to move into the premises in December 2008.
The solicitor’s letter says that by 1 July 2008 the defendants had paid $315,440, whereas the three quotes for the first phase came to $282,700. They agreed that they had not paid the last invoice for $37,400 dated 28 May 2009.
The defendants acknowledge that the earthworks (for a total of $12,320) were for the whole site, and that, with the defendants’ agreement, the plaintiff had purchased all the steel needed for the whole project.
Nevertheless if they were to pay the latest invoice for $37,400 they would have paid $70,140 over the quoted price of $282,700.
In the letter the defendants undertake to pay the last invoice if the plaintiff will complete specified works by specified times (paragraph 13). They will discharge the plaintiff from any obligation to complete phases 2 and 3 of the project (paragraph 14). Inferentially, they will forbear from suing the plaintiff for losses caused by delays and overcharging if the plaintiff signs the agreement (paragraph 15).
On the face of the document the defendants were offering to forbear suing for losses the plaintiff has caused them to suffer.
Mr Warburton acknowledged that forbearance from suit may amount to consideration[2]. He submitted that on the facts of this case there was no consideration. What I take him to be saying is that, while the letter suggests consideration by way of forbearance, the forbearances is illusory or non existent. There are no legitimate complaints of delay or overcharging by the defendants, much less any legal remedy. There cannot have been any losses. The defendants had nothing to forbear from doing.
[2] Wigan v Edwards and Anor (1973) 47 ALJR 586.
For reasons which I will set out later I find that the defendants did have legitimate complaints and claims for loss which they offered to forbear from recovering. I find there was consideration offered by the defendants.
The second challenge to the purported agreement is that the plaintiff’s apparent agreement, his signature, was extracted by economic duress. Mr Warburton cited authority[3] for the existence of such a circumstance leading to voidability of a contract.
[3] North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd and Anor [1979] 1 QB 705 at 719 per Mocatta J.
I accept the legal proposition that duress exerted by one party on another can render voidable the contract they appear to have concluded. However I reject the submission that in this case such duress was applied. Mr Clovis admits that he went with his accountant to confront the plaintiff with his complaints. He admits that, armed with the solicitor’s letter and a cheque for the last invoice, he sought to press the plaintiff to agree to the terms of the letter and to complete specified works by specified dates. Thereafter, neither party would have any obligation towards the other. He said he did so because he and his wife could no longer tolerate the delays and cost overruns. They faced specific economic losses if the project was not finished quickly. They itemised those prospective economic losses in the letter.
Again, if those claims were false and Mr Clovis was using those false claims as a front to short change the plaintiff, or to impose upon him unreasonable conditions, then there might be some validity in the assertion of duress. However, for reasons I will set out later, I find that there was no short changing by Mr Clovis, nor was there the imposition by him of unreasonable conditions. Specifically as to the latter, I am completely satisfied that Mr Clovis took the plaintiff through the conditions in paragraph 13 of the letter and asked him about the feasibility of each of the timelines. I find that, with the plaintiff’s agreement, Mr Clovis altered the work requirements and gave the plaintiff an extra 12 days to complete the roof and gutters, the final task. I find there was no duress. The plaintiff’s signature represented a genuine, if possibly reluctant, agreement to the terms of the letter.
Was this letter a contract, or was it a variation of the initial agreement?
I am not sure that there is any significant different between the two concepts, but I think that the letter may more appropriately be seen as a new agreement. I think the parties are more clearly identified in this transaction than they are in the initial contract. I will return to that topic later. For reasons that I will explain in due course, I find that the plaintiff had repudiated the initial contract and, by this letter, the defendants had accepted that repudiation. This transaction represented a new agreement.
I find that there were two contracts as follows:
1) the initial contract, partly written and partly oral, entered into in about September 2007;
2) the later, written contract, entered into on 1 July 2009.
Issue 2 – who were the parties to the contracts?
There is some uncertainty as to who are the contracting parties. I deal first with the initial contract.
The oral part of the contract arose out of discussions between Mr Wolferstan and principally Mrs Clovis although Mr Clovis took part in some of the discussions. Looking first at the plaintiffs’ side of the agreement, both Mr and Mrs Clovis were owners of the land. While Mr Clovis took the view that it was better for the smooth running of the project that there be just one person in charge, and that was his wife, he did take a real interest in the enterprise and agreed with his wife to the engaging of the plaintiff. He was present at some of the critical discussions.
The written parts of the contract include the engineer’s drawings and the plaintiff’s invoices. The engineers drawings were expressed to be drawn “for Jill Clovis” (JLC 2). The plaintiff’s invoices were sometimes addressed to “Jill Clovis” and at other times to “J and M Clovis”. The quotes were all addressed to “Jill Clovis”.
I think that both Mr and Mrs Clovis were involved in the contractual discussions and arrangements. Hence I find that on the client side, both are parties to the initial contract.
The situation is not entirely clear on the builder’s side either. Mr Wolferstan is the sole proprietor of the business name Ariki Constructions and he is the sole director of the company Ariki Constructions Pty Ltd. Until 2 December 2008 the company did not have a builder’s licence. At all relevant times Mr Wolferstan held a builder’s licence. On all quotes and invoices there appears the company name and the business name. Understandably neither Mr nor Mrs Clovis distinguished between the company or the business name when they spoke of contracting with “Ariki” to undertake the building work. Mrs Clovis speaks in her affidavit[4] of checking with the Office of Consumer and Business Affairs and discovering “Ariki” was licensed to build cement and iron sheds.
[4] Exhibit D1 paragraph 26.

I conclude that Mr Wolferstan, his business Ariki Constructions and his company Ariki Constructions Pty Ltd were the contracting parties on the builder’s side.
The situation is a little clearer with the later contract. It comprises the solicitor’s letter of 1 July 2009. The letter is signed by the solicitor who indicates at the beginning of the letter that she acts for Mr and Mrs Clovis. She might thus be taken to be signing for both. The letter is addressed to “Mr Alfred Wolferstan, Ariki Constructions Pty Ltd”. The plaintiff signed under his own name only. It is hard to see how his business could be seen to be a party to this contract but it would appear equally hard to exclude Mr Wolferstan personally, or his company. I conclude that the parties to the later agreement were on the one side, Mr Wolferstan and his company Ariki Constructions Pty Ltd, and on the other Mr and Mrs Clovis.
Issue 3(a) – what were the terms of the initial contract?
This question raises several disputes as follows:
(i)     the scope of the work – all four warehouse or only warehouse 4, the first of 3 phases;
(ii)   completion date;
(iii)     the consideration – fixed price, cost plus or some other description.
It is clear that, with two exceptions, the plaintiff did work and ordered materials in respect of warehouse 4 only. The two exceptions are the preliminary earth works and the ordering of the structural steel. The plaintiff accepts that the defendants asked him to proceed in phases, but he says that they only did so after he had started making the concrete wall panels for warehouse 4 in September 2007[5].
[5] Affidavit of Alfred Wolferstan par 95.
I note that while the plaintiff says in his affidavit that he began making the wall panels in September 2007, his evidence was that it was nearer September 2008 . There is also the invoice dated 1 September 2008 which includes “base concrete slabs for tilt-up panels”[6]. Further, the plaintiff was absent from the site between September 2007 and May 2008.
[6] Exhibit AWW2, page 600, to plaintiff’s affidavit Exhibit P5.
I do not accept the plaintiff’s evidence in this regard. The evidence of Mr and Mrs Clovis is to the contrary and it is supported by several pieces of objective evidence.
First, there are the nine quotes dated 15 September 2007. Plainly they contemplate the work being done in three phases. Why else would a single project be divided up in the way that these quotes do? The detail of the September quotes is in stark contrast to the absence of detail in the lump sum quote of 11 August 2007[7].
[7] Exhibit 4 to the plaintiff’s affidavit.
Second, there is the fact that in May 2008 the plaintiff dug only the footings for warehouse 4. His evidence about being unable to do the rest of the footings at that stage because of problems with the neighbours’ fences is unsatisfactory and I do not believe it.
Third, there is the very fact of the plaintiff seeking the defendants’ agreement to purchase the steel for the whole project because the price was about to go up. If he was contracted to build all the warehouses there would be no need to seek such special permission.
Fourth, there is the fact of the purchase of the block by the defendants in 2007 and the lease they had at Shearer Drive, both suggestive of there being some priority to getting warehouse 4 built first.
I am satisfied that there was never an agreement between the plaintiff and defendants to construct the whole project. I am satisfied that the plaintiff made a verbal estimate to the defendants that the whole project would cost about $800,000. I am not able to find that the plaintiff actually gave the defendants his written quote for $803,000[8], or the later one for $869,000. The plaintiff says he did give them those quotes. The defendants deny receiving them.
[8] Exhibit 4 to his affidavit.
I am satisfied that there was an agreement to erect warehouse 4 and when that was finished the defendants would review the position about the construction of phases 2 and 3 which comprised warehouse 1, 2 and 3.
I find that there was a contract which was partly oral and partly written. The written parts of the contract were the three quotes dated 15 September 2007. They were for warehouse 4. Those three quotes numbered 118, 119 and 120 are Exhibit JLC7 to Mrs Clovis’s affidavit Exhibit D1 and they total $282,700 inclusive of GST.
The oral parts of the contract were discussions between the plaintiff and defendants in about 15 September 2007.
I find that there were oral variations to that contract. I do not pause to detail them, but both parties speak of changes, for example, to the design of the roof, to the addition of a grease trap and to an agreement that some of the works would be undertaken by other trades people engaged by the defendants.
In particular I find that the plaintiff and defendants agreed that a portion of the floor of warehouse 4 was going to be 200mm deep rather than 150mm so as to accommodate machinery that the defendants proposed to install. I reject the plaintiff’s suggestion that the defendants said that the deeper section of floor was to accommodate a mezzanine.
While I think it likely that the defendants gave the plaintiff the impression that after phase 1 was completed he might well be engaged to undertake phases 2 and 3, I find that there was no agreement in relation to the later stages.
So far as the completion date for phase 1 is concerned I find that the plaintiff told the defendants that he would complete the first phase in about 6 months. I do not find that when that estimate was made time was agreed by the parties to be an essential term of the agreement. I accept the plaintiff’s evidence that from time to time between September 2007 and August 2009 he said that he was busy on other jobs. I do not accept that he made it clear to the defendants that he would give their project low priority, and would only attend to their job when he was free of other commitments. The plaintiff himself does not suggest that he said that in as many words. It would be surprising if he did. Contrary to the plaintiff’s evidence I find that at least from about the middle of 2008 the defendants were pressing the plaintiff about a lack of progress, although I do not find that there was ever an agreement that a completion date was an essential term of this initial agreement. I will later deal with the question of delay, but for the present I find that there was an implied term in the agreement that the works would be carried out in a reasonable time.
I turn finally to the terms of payment for the contract. Was it a fixed price contract, a cost-plus contract or were its terms different from either of those descriptions? I am unable to find that there was a meeting of minds on this topic. The plaintiff said that it began as a fixed price contract but changed to a cost-plus contract. He did not say how or when the agreement changed. The defendants do not specify a description. Their evidence would suggest that they paid invoices until they noticed that they were paying more than the quoted figure but they did not expressly confront the plaintiff with any assertion of a fixed price contract. I make no finding on this topic.
I have found that this initial agreement was terminated and the later agreement was entered into. Its terms are clearer. The plaintiff had breached the terms of the contract. By his actions he repudiated the contract. The defendants accepted that repudiation and proposed the second contract.
Issue 3(b) – what are the terms of the later contract?
It is in my view self-evident, that the later contract was presented by Mr Clovis to Mr Wolferstan because of the defendants’ frustration with his performance of the initial contract. I have already found that, while the plaintiff may have been reluctant to sign the letter of 1 July 2009, he did so without duress. He did so voluntarily. He did so knowing the terms of the agreement. He had read the letter. He knew that he had agreed to undertake specific tasks for a nominated consideration within clearly specified times. I find that Mr Clovis took him line by line through the tasks and timelines in paragraph 13 of the letter. He altered the details to accommodate the plaintiff’s requirements.
I find that the terms of the written agreement are set out in paragraphs 13, 14 and 15 of the letter. I will not replicate them but the gravamen of paragraph 13 is that the first of four specified tasks was to be completed by 8 July 2009 and the last by 10 August 2009. I find time was of the essence. Mr Clovis made it clear the timelines were essential and, however reluctantly, the plaintiff agreed.
Paragraph 14 provides that part of the consideration for the works was the sum of $37,400, the amount of the only outstanding invoice.
Paragraph 15 expresses, at least impliedly, the forbearance by the defendants from recovering losses caused by the plaintiff if he signed the agreement and abided by its terms. If the plaintiff repudiated the second agreement then he rejected the forbearance. The defendants would be free to sue for breaches of the initial contract.
Paragraph 14 also provides that each party will be released from any obligation to proceed with stages 2 and 3 of the project.
Findings of credit
Before dealing with the question of breaches of the agreements, I make findings of credit.
First I discuss the credit of the plaintiff. I found his evidence unsatisfactory and unreliable. Where it conflicts with that of other witnesses, I prefer the evidence of the others. In fact I do not accept his evidence except where it is supported either by the evidence of other witnesses or by documents. A good deal of his evidence was internally inconsistent, was inconsistent with documents and photographs or was plainly implausible. I cite several examples to illustrate these findings.
1.In examination-in-chief the plaintiff maintained that the initial contract was for the whole project and that the proposal to do it in stages did not arise until much later. In cross-examination he was confronted with his original lump sum quote for $803,000 dated 31 August 2007 and the nine quotes for the staged project, all of them dated 15 September 2007. Only upon being so confronted did the plaintiff concede that it was likely that, as early as 15 September 2007, Mrs Clovis had wanted the project divided into phases[9].
[9]    T76.
2.The plaintiff maintained that he was unable to do the strip footings for all warehouses because there was an argument with a neighbour at the back (eastern boundary) about the dividing fence. He said that in the light of that argument it was he who suggested that he start with warehouse 4. However in paragraph 26 of his affidavit he says:
The neighbour at the rear objected to the eastern side fence being pulled down. I had to negotiate with him to remove it. Those negotiations took about 3 weeks.
I find it unbelievable that the plaintiff suggested proceeding with only warehouse 4 because of an argument about a boundary fence. However, if the negotiations were successful after only 3 weeks, then there was nothing stopping the plaintiff proceeding with the other warehouses. As it happened the neighbour on the eastern boundary also owned the land on the southern boundary. I think the plaintiff was trying to explain away the phased nature of the building works by using the fencing dispute as an excuse[10].
[10] See T98, T151-156.
3.The plaintiff claimed an inability to remember details of any discussion Mrs Clovis had with him on the topic of the need to extend Mec-Tec’s lease over the Shearer Drive premises. He thought that there might have been such a conversation “half way through the job”[11]. He then thought that it took place about the time he did the strip footings in May or June 2008. Later he thought it might have been December 2008. He was “not too sure” that Mrs Clovis was telling him that her lease was up.
[11] T105.
Mr and Mrs Clovis said they raised the timetable for the building works in the context of the approaching end of their lease (the 12 month renewals came up each April). They said that they raised the question January 2008, some 4 months after the preliminary earth works had been done and some 4 months before the strip footing was done (May 2008). They wanted to know whether they would have to extend their lease and if so, for how long. In my view that evidence is credible. It is consistent with the details of their lease at Shearer Drive and it is consistent with the purposes of them building the warehouse at Farrow Circuit. I think the plaintiff was being evasive about that discussion because it damaged his denials of delay[12].
[12] T104-107.
4.The plaintiff’s evidence about his system of invoicing demonstrated that he really had no system at all. I agree with Mr Duggan’s description of his evidence on this topic as a shambles.
Part of the defendants’ case is that the plaintiff’s invoices lacked detail and cannot be related to the quotes. At trial the plaintiff produced very few invoices he had received from suppliers to substantiate his own invoices to the defendants. The defendants gave evidence that they complained to him about the lack of detail. He denied that there were any such complaints. All he conceded was that the defendants told him that their bank needed more detailed invoices. I illustrate the unsatisfactory nature of the plaintiff’s evidence by reference to documents relating to the provision of steel for the works. The nine quotes dated 15 September 2007 are to be found in Exhibits JLC 7, JLC 8 and JLC 9 to Mrs Clovis’s affidavit. Each of the exhibits contains three quotes for stages 1, 2 and 3 respectively of the project. One of each of those quotes is for steel. They are as follows:
Exhibit JLC 7               quote no 119             $26,000
Exhibit JLC 8               quote no 121             $32,000
Exhibit JLC 9               quote no 125             $22,000
Total           $80,000
Later invoices for steel appear to bear no relation to those quotes.
Exhibit JLC 17 is an invoice dated 19 May 2008 for:
One third part payment for structural steel for warehouse “$63,000” inclusive of GST.
Exhibit JLC 18 is an invoice dated 26 June 2008 for:
Part payment for structural steel.
It is for $60,000 inclusive of GST. There is a handwritten notation on this invoice saying:
All steel for construction,
with a signature or initial alongside it.
When questioned about the steel invoices the plaintiff was quite unable to explain how he had arrived at the figures in the invoices. He was unable to point to any documents which supported those invoices[13]. He was questioned about the invoice JLC 18 dated 26 June 2008 which had the hand written note “all steel for construction”. The plaintiff conceded that it was his signature alongside that note, although he had not written he note.
Mrs Clovis’s evidence is that she wrote the note on the invoice in an attempt to bring an end to the invoices for steel. She asked the plaintiff to sign alongside the note which he did. The plaintiff was not able to remember what discussion lead to that note[14].
In my view he was avoiding that topic because it disclosed the growing frustration that the defendants were having about his invoices.
The plaintiff conceded that at the defendants’ request he produced a quote (albeit headed “Invoice”) dated 22 February 2009 (Exhibit JLC 25) for the completion of warehouse 4 (and a driveway). The quote is for a sum of $191,730. The production of that further quote in my view is consistent with the defendants’ evidence of their growing disquiet about cost overruns and a lack of detail in invoices. There is then a further quote bearing the same date (Exhibit JLC 26). The plaintiff said that although the quote bore the same date as the other one it was prepared some weeks later. It appears to be a quote for the completion of warehouse 4 and the footings for warehouses 2 and 3 with some wiring for all 4 warehouses. It was for $213,400. This second quote referred to a floor slab mesh of 200mm thickness in the machine area and it also referred to CAD drawings. This quote too is evidence of the defendants requiring some further accounting.
In cross-examination the plaintiff was taken to six invoices which he accepted related to entirely different projects or were quotes by different parties[15]. In his address Mr Warburton sought to take responsibility for the inclusion of those invoices. While it might be accepted that the plaintiff’s lawyers should have sought clarification of those invoices before including them in the exhibit, it is plain that the plaintiff must have presented them to the lawyers in the first place. The plaintiff was forced to concede that he was disorganised[16]
This account is not exhaustive of the evidence demonstrating deficiencies in the plaintiff’s manner of quoting, costing and invoicing. He conceded other deficiencies[17]. He was asked about a lack of accounting for labour that he had charged for. He maintained that he had in fact done the labour but he conceded that he had not itemised all the work “at this stage”[18].
5.On 1 July 2009 Mr Clovis and the defendants’ account Mr Dutton, presented the solicitors letter to the plaintiff. The plaintiff denied that Mr Clovis went though with him the contents of paragraph 13 of the letter which set out the tasks and timelines[19]. The alterations to that paragraph demonstrate the untruth of that denial and confirm Mr Clovis’s evidence. The plaintiff said that he did not understand that the agreement meant that he had to carry out specified tasks and that the cheque he accepted would be the last payment. I reject his evidence. I find that, however much he might have resented the terms of the agreement, he knew what they meant.
6.The plaintiff claimed that by 1 July 2009 he had completed certain works. Under cross-examination he was forced to admit that several of the jobs he said he had completed had not been completed. Photographs, whose provenance was proved, demonstrated the untruth of his claims. The roller doors were not installed. The plaintiff was forced to concede that they cannot be put in until the slab is poured[20]. The plaintiff was also forced to concede that he had duplicated a claim for the installation of the roller doors[21]. He agreed that he claimed for the installation of a cliplock roof when he had not in fact finished the job[22]. He conceded that certain panels were not erected by 1 July.
7.The plaintiff denied that Mrs Clovis had ever discussed with him CAD drawings she had commissioned. He said that he had never been told that a section of warehouse 4 would have to be 200mm thick to accommodate machinery. He said he never saw plans of the location of the machinery site. He said that Mrs Clovis simply indicated “roughly” where she wanted the thicker concrete. The plaintiff was forced to change his evidence when he was confronted with his own quote of 22 February 2009[23] which showed that the thicker concrete was to be located in the machine shop area “as per CAD drawings”. He then said that he did know that Mrs Clovis was getting some CAD drawings but he was never given any and he did not need them because he had marked out the area on the ground[24]. I think he was avoiding admitting knowledge of the requirement for the thicker concrete because he never provided for it in the framework he had laid out before the concrete pour. He admitted that he had made no provision for it, but justified that by claiming he had seen no council approval for it. I find that, contrary to his own quote and to the defendants’ clear instructions, he was preparing to pour the slab without providing for the thicker concrete. The defendants’ engineer, Mr Whelan, conceded that you could later put on an extra layer of concrete upon which to mount the machinery but that is not what the plans called for and it was contrary to what the plaintiff had been asked to do. In denying knowledge of the CAD drawings and denying specific instructions to provide the greater thickness for the machinery, he was trying to justify his failure to make provision for it.
8.Finally there is the question of defects in workmanship. While the defects spoken of by the defendants and their witnesses extend beyond the preparation of the concrete pour of the slab, I focus on that aspect because it best illustrates the plaintiff’s unreliability as a witness.
[13] T113-117.
[14] T126.
[15] T119-123; Exhibit 3 to Mr Wolferstan's affidavit pages 570, 573, 609, 656, 659 and 708.
[16] T123.
[17] T201-203.
[18] T203.
[19] T176.
[20] T186.
[21] T203.
[22] T203.
[23] Exhibit JLC 26.
[24] T40.

The defendants’ case against the plaintiff relating to the slab is that on 27 August 2009 the plaintiff was excluded from the site because the defendants were convinced that he was about to pour the slab on a defectively prepared framework. If the slab were poured the structural integrity of the floor would be compromised and the defects would be covered up. I focus on just three aspects of the floor.
First, the defendants say that thinner mesh than what was required and specified was laid for the floor. The plaintiff said that the mesh he used for the formwork for the slab was the required thickness vis SL92. In support of that contention he referred to invoices from mesh suppliers relating to deliveries of SL92 mesh on 5 May and 24 October 2008[25]. That is a considerable time before the mesh was laid for the floor. The plaintiff says he laid the floor mesh on about 20 August 2009. A photograph taken on 21 August[26] shows the mesh laid. It would be surprising if mesh would be delivered 10 to 13 months before it was needed. In May and October 2008 the plaintiff was carrying out other works which required that size mesh.
[25] Exhibit P7.
[26] Exhibit D3.
Other mesh whose size is not specified in the suppliers invoice was delivered on 21 August 2009. The plaintiff denied that that mesh was what he used for the floor. That invoice[27] says that the goods were delivered to Farrow Circuit. The plaintiff says that despite that invoice being included in the invoices for the defendants’ job at 8 Farrow Circuit, it was placed there in error. The materials were delivered to the plaintiff’s own workplace at 20 Farrow Circuit for use there. It is true that other invoices have erroneously been presented as relating to the defendants’ job.
[27] Page 560 of AWW3.
So far, only a suspicion might arise about the plaintiff’s claim that the correct mesh had been laid. However both witnesses for the defence, Mr Rismondo, an experienced builder, and Mr Whelan, the defendants’ engineer testified that, independent of each other, they inspected the site. They paid particular attention to the mesh that had been laid for the pour. Mr Rismondo said that he could tell by sight that the mesh was SL72, not the required SL92. Mr Whelan measured the mesh with an appropriate measuring disk and said that it was less than SL92.
In these circumstances I do not accept the plaintiff’s evidence. I find that the mesh was less than the required SL92. It was probably SL72.
The plaintiff was required to compact a gravel base on which the concrete was to be poured. He said he did that as part of the preliminary earthworks in August 2007. He said that the tradesmen employed by the defendants had disturbed the compacted base for the purpose of providing pipes or wires to the grease trap which was being excavated by others. When that was drawn to his attention shortly before the concrete was to be poured, the plaintiff said he realised that he was going to have to remove the mesh and plastic that his workers had put down so that he could restore the compaction of the surface.
For the purposes of taking a photograph, the engineer, Mr Whelan, peeled back a small section of the plastic when he inspected the site on 28 August. The exposed section shows bare dirt, not a compacted gravel surface underneath the plastic. Further it shows vegetation growing out of the ground. It also shows loose stones on top of the dirt. The plaintiff’s response to that photograph was to say that the vegetation did not matter. The experts disagree. The loose stones did have to be removed because they might puncture the plastic before or during the concrete pour, thus compromising the seal below the floor. The plaintiff said that he intended removing any stones when he pulled up the mesh, but he was prevented from doing so by being excluded from the site on 27 August 2009. He agreed that there were loose stones on top of the plastic but he said it was easy to vacuum them even after the mesh had been laid on top of the plastic. It was not necessary to make sure that the stones were removed before the mesh was laid on top of the plastic. He said it was no easier to remove the stones before the mesh was laid than it was to vacuum them up after the mesh had been laid. I simply do not believe that evidence. It would plainly be much more difficult to vacuum up the stones once the mesh had been laid,
If the evidence had gone no further, I would have been inclined to think that the plaintiff was preparing to pour the concrete on to the defective base and formwork. However the evidence does go further. Other photographs taken on 24 August (Exhibit D3) show that timber formwork had been installed in the doorways to warehouse 4 where the concrete was to be poured. That formwork has to be put in place to contain the concrete. For convenience it is usually installed after the mesh has been made. That is to make it easier to carry the mesh into the building. The presence of the timber formwork suggested that it had been done after the mesh was installed in anticipation of a concrete pour. At this stage of his evidence the plaintiff at first said that his workers had laid the mesh on Wednesday 26 August, the day before he was locked out. He denied the proposition put to him by Mr Duggan that his workers had laid the mesh on the previous Friday, Friday 21 August. When he was shown the photograph which was agreed to have been taken on 21 August showing the mesh laid he changed his story and said that some mesh had been put down before the 26 August. When pressed he conceded that all of the mesh might have been put down on the previous Friday. The plaintiff had claimed that he knew the mesh had to be taken up because of the imperfect compaction but the installation of the boxing suggested that he was proceeding to prepare for the pour rather than proceeding to remove the mesh. The plaintiff then gave a convoluted story about two lots of his workers doing the mesh work and the timber boxing. The workers who had done the later boxing had not been told by him or by others not to proceed with their work. When he was asked how that came about he said that the men who were to do the boxing were working on a job at Mt Barker and were out of telephone contact, so they could not be warned not to go ahead. I disbelieve this evidence.
There is one final piece of evidence which demonstrates the untruth of what the plaintiff was saying. Mr Rismondo visited the site on Wednesday 26 August. He said he there spoke to the plaintiff. He said he explained to the plaintiff that there were defects in the surface below the plastic. The plaintiff denied ever speaking to Mr Rismondo. When Mr Rismondo was giving his evidence the plaintiff was sitting in the body of the court. Mr Rismondo was asked to identify him. As he did so the plaintiff was keeping his head down, plainly trying to avoid being identified by Mr Rismondo. Mr Rismondo was adamant that it was the plaintiff to whom he was speaking. The significance of that evidence is that Mr Rismondo said that the plaintiff told him at the site that he was going to pour the concrete the following day, ie Thursday 27 August. I accept Mr Rismondo’s evidence and I reject the plaintiff’s. I find that he did speak to Mr Rismondo and he did say that he was going to pour the concrete the next day. I find that that is precisely what he was going to do.
The third respect in which the formwork for the floor was defective was that there was insufficient room between the top of the ground and the bottom of the mesh to allow for a thickness of 150mm as required. Both Mr Rismondo and Mr Whelan noted that defect when they inspected the site. Mr Rismondo said he raised that question with the plaintiff on the site. As I have mentioned, the plaintiff denied ever speaking with Mr Rismondo but I reject his denials.
I turn to other witnesses.
Mr Leilo Bibbo
Mr Bibbo is a chartered engineer engaged by the plaintiff. He did not give evidence, but his report dated 1 Sept 2010[28] was tendered without objection. The defendants did not require him to be called cross-examination. His report is short. In many respects it is either uncontroversial or it supports the case for the defendants. Understandably Mr Warburton did not rely on the report in his address.
[28] Exhibit P15.
I now refer to the witnesses for the defence.
Jillian Clovis
I did not hear the evidence of Mrs Clovis. She has a serious illness and gave evidence on commission before His Honour Judge Brebner on 16 July 2010. I have read her affidavit, which was adopted as a significant part of her examination-in-chief, and I have read the transcript of her evidence. I acknowledge the disadvantage of not having heard and seen Mrs Clovis in the witness box but I found nothing in her evidence which caused me to doubt her credit. Her evidence was consistent with the documentary evidence tendered as exhibits. It was consistent with the evidence of her husband whose evidence I did hear. I prefer her evidence where it conflicts with that of the plaintiff.
Michael Clovis
I found nothing in Mr Clovis’s evidence to cast doubt on his credit. His evidence was internally consistent and was consistent with the objective evidence. I prefer his evidence where if conflicts with that of the plaintiff.
Michael Rismondo
I found Mr Rismondo’s evidence credible. I bear in mind that he is the brother of Mr Frank Rismondo, a manager employed by the defendants. In fact it was through Mr Frank Rismondo that the defendants met and engaged his brother to give expert evidence. He might thus be expected to feel a degree of partisanship towards the defendants. However I am satisfied that his experience in the building industry qualifies him to give the opinion evidence he gave and he gave it without any evidence of partisanship. I found his evidence of facts reliable. I do not think that his evidence was other than impartial. I accept his evidence where it conflicts with the plaintiff.
Ronan Whelan
I found Mr Whelan’s evidence credible. In giving his opinion he was ready to concede propositions put to him in cross-examination.
Issue 4A – Were the terms of the initial contract breached and if so, by whom? Did the plaintiff cause unacceptable delays, cost overruns or defects? Did the defendants fail to pay agreed invoices or did they unjustifiably lock the plaintiff out of the site?
I find that the plaintiff breached the initial contract. I explain in what respects he breached it and why I so find.
I find first that the plaintiff breached the initial contract by causing unreasonable delays. I have found that the time for completion of the works was not agreed to be an essential term of the contract. The defendants simply accepted the plaintiff’s estimate of how long it would take. I prefer the defendants’ evidence over that of the plaintiff’s. The plaintiff estimated that the works would take 6 months. The works he was referring to comprised stage 1 only. He made that estimate in September 2007. As it turns out 6 months is the outer limit of the time Mr Rismondo said it should take to complete warehouse 4. I assume that is the time that would be taken without there being time taken out to attend to other jobs. I do not think it is unreasonable to make some allowance for the plaintiff attending on other jobs. While, on the one hand, I do not accept that he told the defendants he would only be able to attend to their job when he was free from other commitments, on the other, I do not find that he undertook to attend to their job to the exclusion of other jobs. I think it would be reasonable to allow 3 months for the plaintiff to attend to other jobs. He had seven employees and I find it reasonable to require the attendance of some workers on the defendants’ job except for that 3 month allowance. The plaintiff should have started the construction work at the beginning of October 2007. That would have meant that Christmas would intervene. I think I can take judicial notice of the fact that many builders take a break of at least 3 weeks over Christmas. I would allow a month. I think that I can also take notice that one would not expect the same weather disruptions during spring, summer and autumn as one might expect during winter. I would make no extra allowance for bad weather. I find that a reasonable time to complete the building of warehouse 4 would be 10 months from the beginning of October 2007, ie the beginning of August 2008. The plaintiff had barely begun construction work by then. He was absent from the site from October 2007 to April 2008 inclusive. In May 2008 he dug and poured the footings and floor of the office. He was absent again between May and October 2008. The completion date of the beginning of August 2008 means that the defendants would have had to renew their lease when it came up for renewal in April 2008. Whether they could have negotiated a lease for just four further months rather than the full year remains uncertain.
Germane to the question of delay is the plaintiff’s claim that the defendants were late in paying invoices. The evidence on the topic is confusing and unsatisfactory. Mr Warburton submitted in his address that there was agreement between the parties that invoices would be paid in advance of work being done. It is hard to know what he meant by that. How could the defendants pre-pay an invoice? The plaintiff had not clarified that in his evidence. Did it mean that it was agreed between the parties that the plaintiff would render an invoice and it would be paid before the work was done? Mrs Clovis gave some credence to that interpretation. She said that;
I’m not exactly sure what date the works were carried out, but in fairness to all the invoices they always come in wanting to be paid in advance, so I assumed it would have been paid in advance.[29]
[29] T64.
That answer was given by Mrs Clovis in response to questions about invoice number 116 dated 31 August 2007 for the preliminary earthworks. In paragraph 42 of her affidavit she had said that invoice was paid in advance of the work being done.
Counsel for the plaintiff then put to Mrs Clovis that the invoice was rendered after the work was done[30]. She was not sure. However she then said:
All my invoices are usually paid in advance.[31]
[30] T64.
[31] T65.
In my view the evidence on this topic is so unsatisfactory that I cannot discern any agreement between the parties about when invoices were to be paid. Nor can I discern a consistent practice in when they were paid. What I can discern is that invoices were paid promptly until they became so repetitive, confusing or lacking in detail that it was reasonable to defer payment until some degree of clarification was forthcoming. Handwritten notes on two of the invoices indicate the frustration that the defendants were feeling. I set out the invoices up to February 2009 with some reference to their contents and when they were paid.

Invoice No

Date

Exhibit

Works

Amount

Paid

116

31/8/07

JLC16

Earthworks

12,3320

14/9/07

162

19/5/08

JLC17

¹/₃ part payment for structural steel for warehouse

¼ part payment for strip footings and office

75,000

6/5/08 (in advance)

167

26/6/08

JLC18

Part payment for structural steel “All steel for construction” (in handwriting)

60,000

7/7/08

174

1/9/08

JLC19

Part payment for concrete strip footings

126,000

20/10/08

178

16/11/08

Not exhibited re-issued 22/2/09

22/2/09

JLC27 re-issued 22/2/09

Perlins etc

26,000

183

25/1/09

JLC21 re-issued 22/2/09

Final part payment for structural steel “everything” (in handwriting)

15,620

7/4/09

22 February 2009 is a significant date in the history of this matter. The defendants insisted that the plaintiff provide them with a quote to finalise the job. The plaintiff provided two quotes. Both are dated 22 February 2009 but the plaintiff said that the second was provided a couple of weeks after the first. The first quote, (albeit that it was written as an invoice) is for $191,730 (Exhibit JLC25). The second is for $213,400 (Exhibit JLC26). There was continual discussion between the parties about the course ahead. The defendants had not paid invoices 178 and 183 (see schedule). They did not pay those invoices until 7 April 2009. There does not appear to have been any clear response by the defendants to the quotes dated 22 February. There appears to have been something of a stand-off between the parties. Mrs Clovis says that having paid the invoices 178 and 183 on 7 April 2009, the plaintiff came back on to the site in May and did some more work. That resulted in invoice 192, (Exhibit JLC33) for $37,400. It included the supply and installation of roller doors and it made reference to “windows and doors” without specifying whether that was supply or installation or both. This invoice dated 28 May 2009 was unpaid when Mr Clovis and the accountant met with the plaintiff and gave him the solicitor’s letter for him to sign. Upon him signing the letter a cheque for that invoice was given to him. By 1 July the roller doors had not been installed. Nor had the windows and doors been installed, although they might have been purchased by the plaintiff.
The conclusion I draw from the above account is that the plaintiff was in breach of the initial contract by causing unreasonable delay and by cost overruns. By 22 February 2009 the plaintiff had been paid $273,820. His two invoices 178 and 183 dated 22 February 2009 totalled a further $41,620. Thus invoices totalling $315,440 had been rendered. The later of the two quotes dated 22 February 2009 to complete stage 1 was for a further $213,400. The plaintiff was therefore contemplating that stage 1 alone of the warehouse would cost $528,840. Even allowing for the earthworks relating to the whole project and the steelwork having been purchased for the whole project, that total cost is unreasonable. It was an unreasonable cost overrun. Further, the plaintiff’s invoices appeared to bear little relationship to the quote or the works done. The defendants were entitled to stop paying. The defective workmanship was not evident until later. I find that the plaintiff had breached the initial agreement by unacceptable delays and cost overruns. The defendants had not breached the agreement by failing to pay invoices or in any other way.
Issue 4B Were the terms of the later contract breached and if so by whom? Did the plaintiff cause unacceptable delays, cost overruns or defects? Did the defendants fail to pay agreed invoices or did they unjustifiably lock the plaintiff out of the site?
The terms of the later contract are set out in the solicitor’s letter dated 1 July 2009 (Exhibit JLC34). Pursuant to paragraph 13, which was amended in handwriting, the plaintiff contracted to complete four tasks by agreed dates. The last task and the last date were added in handwriting. I reproduce the amended paragraph:
13.Accordingly, our clients require you to confirm your acceptance of the following proposal by way of variation to the Agreement:

Description of Phase One Works to be Completed

Completion Date

All panels to warehouse one erected, all structural steel in place

08/07/09

All windows, doors including roller doors in place

17/07/09

Cement slabs poured for both machine shop and warehouse one

29/07/09

Roof on and gutters fixed (handwritten)

10/08/09 (handwritten)

I find that the times specified in the agreement were reasonable and were agreed to be essential terms by both parties. I find that, however reluctantly, the plaintiff agreed to perform the tasks by the specified times. Mr Clovis had expressly asked him item by item whether he could complete each of the tasks by the nominated times. I find that Mr Clovis actually extended the time in which to finish the roof and gutters to 10 August, 12 days after the last typed date. I find that Mr Clovis made it clear that the nominated completion dates were essential and the plaintiff agreed. I find that the plaintiff read the letter, agreed verbally to abide by its terms and signed it. (The date below his signature is written erroneously as 1 “June” 2009. Both parties agree it was 1 July.)

I find that the plaintiff completely ignored the agreement. He did not complete some of the tasks at all. Those he did complete were not done within the specified times and there was no justification for delay. He sent a further invoice in contravention of the agreement. His work was defective and I find that he was contemplating laying the concrete floor which would have covered up some of the defective work. I explain how I have arrived at those findings.
Photographs tendered by the plaintiffs tell the story of delay. The first job was to erect all the wall panels together with the structural steel by 8 July. The photographs, Exhibit D13, taken by Mr Clovis on 4 August, almost a month after the deadline, show that job was not done.
The same photographs show that the second job, the placement of the windows including roller doors, had not been done. Those jobs were to be completed by 17 July. By the date of the photographs that job was two weeks out of time. The roller doors were not installed until 11 August, a week later. The windows were not installed when the plaintiff was locked out of the site on 27 August.
The third job was the laying of the floor slab by 29 July. That had not been done when the plaintiff was locked out a month later.
The final job was the fixing of the roof and gutters by 10 August. That was not done when the plaintiff was locked out. His own affidavit suggests he would have taken two more weeks to finish the job[32]. The plaintiff says that delay was caused by the defendant’s plumbers and electricians disturbing the compacted base for the floor. I accept that they had done that but not to the extent that the plaintiff claims. It was the plaintiff’s job to ensure the integrity of the base which I find he did not do.
[32] Plaintiff’s affidavit dated 8 September 2010 pars 46-49.
The plaintiff said that bad weather caused him delays. The defendants say that there were only a few wet days. I find that such bad weather as there was does not explain the delays. I find that the plaintiff was in breach of the contract by unjustified delay.
I find that the plaintiff repudiated the contract by what I describe as an attempt at a cost overrun. The plaintiff had agreed to carry out the four tasks in consideration of, inter alia, receiving a final cheque for $37,400. He received the cheque on 1 July 2009.
On 3 August 2009 he sent the defendants’ invoice 194 (Exhibit JLC36) for $110,000. The plaintiff was effectively requiring that sum for three of the four jobs which were the subject of the agreement, namely, the erection of the wall panels, the laying of the floor and the installation of the roof.
The sending of the invoice on 3 August clearly indicated that the plaintiff did not intend to be bound by the agreement. Not only did he send the invoice but he told the defendants that he would not do any of the work referred to until the invoice was paid.
I find that the plaintiff also breached the agreement by defective workmanship. On this topic I accept the evidence of Mr Rismondo and Mr Whelan where it conflicts with the plaintiff’s evidence. I find the following defects:
1.The plaintiff used the incorrect sized mesh for the slab. He used the thinner size SL72 when SL92 was specified. That defect would have weakened the slab.
2.The plaintiff had not installed dowel bars which are necessary to increase the strength at the join between the wall panels and the footings[33].
3.The bases of the wall panels were not properly grouted.
4.The plastic sheeting laid for the floor did not always extend to the wall panels, causing a potential gap in the seal between the two.
5.The base of the floor had not been properly compacted, potentially compromising the slab. I do not accept that the plaintiff proposed correcting that defect before pouring the slab.
6.The slab where the machinery was going to be mounted had not been prepared so that a 200 millimetre base would be laid. The proposed base would not have been strong enough to support the machinery.
7.The rest of the floor had not been prepared in accordance with the required 150 millimetre base.
8.There was inadequate caulking of the vertical joints between the wall panels.
9.The plaintiff left the unerected structural steel uncovered so that it began to rust. I cannot determine the extent of the rust that is due to the plaintiff’s neglect to cover the steel, but I do not accept his evidence that he kept it clear of the ground and properly covered at all times. Photograph 11 of Exhibit D13, taken on 19 August 2009 is evidence of his failure in that regard.
[33] Rismondo T430.
These defects relate to both contracts. The work should have been done and done in a workmanlike manner pursuant to both contracts. The plaintiff’s repudiation of the second contract frees the defendants from the forbearance to claim for breaches of the initial contract.
Summary
I find that the plaintiff breached both contracts by unjustified delay, cost overruns and defective workmanship. The defendants did not breach either contract in any respect. The plaintiff has been paid for the work he did and is not entitled to be paid anymore. The plaintiff has caused the defendants’ expense in having the job completed, both by his failure to do certain jobs at all and by his causing defects in the performance of others. The defendants have suffered losses associated with their business as a result of the delays in building the warehouse.
Issue 5 – What are the consequences of the proved breaches of contract?
I distributed a draft of this judgment to counsel on 18 February 2011 with a view to receiving any submissions each wished to make as to consequential orders. On 22 February 2011 Mr Duggan for the defendants handed up Minutes of Order. Mr Warburton for the plaintiff had earlier received a copy. He did not consent to the orders there proposed but he mode no submissions in opposition to them. I will make orders in terms of the Minutes of Order dated 22 February 2011.
Orders
1.The Plaintiff’s claim be dismissed.
2.Judgment on the counterclaim in favour of the Cross-Claimants in the sum of $187,135.33 with the liability of the Cross-Respondents being joint and several.
3.Pursuant to s 32 of the Worker’s Liens Act 1893 (SA) the registration of the Notice of Lien dated 15 October 2009 lodged over Certificate of Title Register Book Volume 6046 Folios 166-169 (inclusive) be cancelled.
4.The Plaintiff/First Cross-Respondent and the Second Cross-Respondent to pay the First Defendant/First Cross-Claimant, the Second Cross-Claimant and Third Cross-Claimant’s costs of and incidental to the action.

Invoice No	Date	Exhibit	Works	Amount	Paid
116	31/8/07	JLC16	Earthworks	12,3320	14/9/07
162	19/5/08	JLC17	¹/₃ part payment for structural steel for warehouse ¼ part payment for strip footings and office	75,000	6/5/08 (in advance)
167	26/6/08	JLC18	Part payment for structural steel “All steel for construction” (in handwriting)	60,000	7/7/08
174	1/9/08	JLC19	Part payment for concrete strip footings	126,000	20/10/08
178	16/11/08	Not exhibited re-issued 22/2/09
22/2/09	JLC27 re-issued 22/2/09	Perlins etc	26,000
183	25/1/09	JLC21 re-issued 22/2/09	Final part payment for structural steel “everything” (in handwriting)	15,620	7/4/09

Description of Phase One Works to be Completed	Completion Date
All panels to warehouse one erected, all structural steel in place	08/07/09
All windows, doors including roller doors in place	17/07/09
Cement slabs poured for both machine shop and warehouse one	29/07/09
Roof on and gutters fixed (handwritten)	10/08/09 (handwritten)