Babylon Aluminium Pty Ltd v Khazma Aluminium Windows & Doors Pty Ltd (No 2)

[2020] NSWDC 941

District Court

New South Wales

Medium Neutral Citation:

Babylon Aluminium Pty Ltd v Khazma Aluminium Windows & Doors Pty Ltd (No 2) [2020] NSWDC 941

Hearing dates:

20, 21 August; 1 October 2020

Date of orders:

2 October 2020

Decision date:

02 October 2020

Jurisdiction:

Civil

Before:

P Taylor SC DCJ

Decision:

(1)   Judgment for the plaintiff, Babylon Aluminium Pty Ltd, against the defendant, Khazma Aluminium Windows & Doors Pty Ltd, in the sum of $124,868.16, inclusive of interest.

(2)   Judgment for the cross-defendant on the cross-claim.

(3)   The defendant/cross-claimant to pay the plaintiff's/cross-defendant's costs of the proceedings, including the costs of the cross-claim.

(4)   Reserve liberty to the parties to make any application to vary the costs order by email to my associate within 14 days.

(5)   Refuse the plaintiff's further application for an indemnity costs order.

(6)   Order that order (3) above is not to include the costs of the application for indemnity costs made today.

Catchwords:

BUILDING AND CONSTRUCTION — Contract — Payment — Final completion

Legislation Cited:

Civil Procedure Act 2005, s 56

Uniform Civil Procedure Rules 2005, r 17.7, r 29.8, r 42.1

Category:

Principal judgment

Parties:

Babylon Aluminium Pty Ltd (plaintiff/cross-defendant)
Khazma Aluminium Windows & Doors Pty Ltd (defendant/cross-claimant)

Representation:

Counsel:
Mr D P O’Dowd (plaintiff/cross-defendant)
Mr F Salama (20 and 21 August 2020); Mr D Allen (1 October 2020) (defendant/cross-claimant)

Solicitors:
Trump Lawyers (plaintiff/cross-defendant)
Edmond Khoury Solicitors (20 and 21 August 2020); Sterling Legal (1 October 2020) (defendant/cross-claimant)

File Number(s):

2018/00268258

Publication restriction:

None

Judgment

1. Babylon Aluminium Pty Ltd orally contracted to install aluminium windows on seven projects in Sydney for Khazma Aluminium Windows & Doors Pty Ltd, the manufacturer of the windows.  Khazma paid Babylon's invoices on the first project, but not all the invoices on the remaining projects were paid, and Babylon sues for the outstanding amount. 

2. During the hearing, Khazma admitted that the invoices were issued for work done, but asserted that payment was not made in full because the agreement contemplated that 50% of the final invoice on each project would be retained, pending the expiration of a 12‑month defects period.  However, the last invoice was issued in November 2017, so any funds so held would have long since become payable if that retention provision existed.

3. Khazma also asserted that Babylon acted in breach of the agreement in removing workers from site, and that as a result, Khazma incurred extra costs in completing the works.  The extra costs comprise payments to subcontractors and employees to complete the works and remedy defects.  The completion of the works could only be a source of recoverable loss if Babylon was obliged to complete the works, and if the costs of completion paid by Khazma exceeded the amount that would have been paid to Babylon to complete the works. This latter point was not established by any satisfactory evidence, and Khazma appeared to acknowledge in opening that the amount paid to complete the works did not differ significantly from the remaining costs to complete the works under the agreement with Babylon.  The former point that Babylon was contractually bound to complete the works, including in circumstances where Khazma had outstanding moneys owing to Babylon, was not supported by any evidence. 

4. In this circumstance, whether one or other party had repudiated the agreement, or, conversely, terminated the agreement for breach, as had earlier been submitted, is of no significance.  The final submissions placed no emphasis on this point. 

5. That left the cost to remedy defects. Again, there was an absence of evidence about defects.  There was no expert report in respect of defects and nothing to identify whether the asserted remedial work was done because of defective installation work by Babylon, defective manufacture by Khazma, or damage done to the windows by a later tradesman or other persons unconnected with Babylon.  The claim for defects was abandoned at the outset by Khazma, but resurrected during the hearing, without objection, when the claim for incomplete work appeared, upon proper analysis, to be illusory.  It remained unproven.  In the result, there was no significance in the existence or otherwise of a term entitling Khazma to retain funds invoiced by Babylon, save that it might impact upon the amount of interest payable.

6. Ahmed Al Dulaimi, a director of Babylon, gave evidence of conversations comprising the agreement with Mohamad Khazma, a director of Khazma, that payments were to be made fortnightly.  There was no agreement with respect to any amount being retained.  Mr Khazma gave no evidence of these conversations and thus did not deny them. 

7. When the matter returned for oral submissions and judgment, Khazma sought leave to discontinue or have dismissed the cross‑claim in respect of defective and incomplete work so that he could preserve a right to recommence that claim with better evidence.  It conceded that the cross‑claim, as prosecuted, had no merit.

8. Leave to discontinue or order dismissal was denied. Whilst the Court has power under r 29.8 of the Uniform Civil Procedure Rules 2005 to dismiss the cross‑claim on the cross‑claimant's application, this would not usually be done after the close of evidence, at least not without a condition precluding a future claim.

9. Khazma raised no particular circumstance why it should be entitled to recommence, save for a complaint about the performance of its legal representative during the earlier hearing.  There was no evidence admitted as to that defective performance.  An affidavit going to that issue was not admitted due to its lateness, the inclusion in it of issues of controversy that could not be contested without an adjournment, and a concession by Khazma that the performance of its previous legal representative was not crucial to the application.  I might have been minded to allow discontinuance of the cross‑claim on terms precluding a further claim, but that course was expressly disavowed by Khazma.

10. In the result, leave to discontinue or an order for dismissal was refused. To allow a fully contested matter to be discontinued, after the hearing of the evidence, so as to preserve in the cross‑claimant a right to recommence, had no matters in its favour. It would operate to multiply proceedings. It is contrary to the principle of the need for finality in litigation, and it would involve an application of r 29.8 contrary to the overriding purpose of the Rules espoused by s 56 of the Civil Procedure Act 2005.  That rule should be applied and interpreted to achieve a just, cheap and quick determination of the real issues in the proceedings.  To allow a party a second opportunity to litigate for no reason other than that the first opportunity was likely to produce an adverse result seems less than a just outcome, and was neither cheap nor quick.

11. After another aborted application, where leave to cross‑examine a witness was sought by Khazma and then withdrawn, Khazma accepted that no submission could be put in favour of the cross‑claim, thus abandoning, for a second time, that which had been first abandoned and then reinstituted during the earlier part of the hearing.  That was not the end of the matter.  Khazma maintained that the primary claim was not established on the balance of probabilities, thus disputing the earlier admission that the invoices were issued for work done.  This was Khazma's primary closing submission.

12. The evidence in favour of Babylon's claim fell into three categories. First, the invoices, which identified with some particularity the work done.  The invoices were business records and constituted evidence of the representations within them. 

13. Secondly, as indicated, concessions were made on behalf of Khazma that the amount of $108,832.39 claimed by Babylon was "outstanding" ^[1] and was not paid, save for the claim for defective or incomplete work. ^[2] As to these concessions, Khazma submitted that they did not justify a judgment on admissions under UCPR 17.7.

    1. Tcpt, 20 August 2020, p 26(46).

    2. Tcpt, 20 August 2020, p 53(45), and also p 54(16-20).

14. Thirdly, Mr Al Dulaimi gave affidavit evidence of completing the works the subject of the invoices, sometimes in precise detail. ^[3]   Khazma's submission that Mr Al Dulaimi's evidence that the "Auburn project was completed" should be read as "completed, but not necessarily by Babylon" was, in the context of the whole of Mr Al Dulaimi's affidavit, a submission without merit.

    3. See affidavit, 27 May 2019, at [56], [64] and [66]-[67].

15. The totality of this evidence is sufficient to establish the claim. There was no challenge to it. Mr Al Dulaimi was not cross‑examined. 

16. Khazma made no oral submissions in favour of an "entire agreement" arrangement that had been asserted in written submissions.  The unchallenged evidence was inconsistent with such an agreement, establishing plainly that Babylon was to render invoices fortnightly,^[4] at the per square metre rate for windows, 40% when the frame was installed, 40% when the glass was installed, and 20% when the locks were installed and any defect remedied. ^[5]  

    4. See affidavit, Ahmed Al Dulaimi, 27 May 2019, at [12].

    5. Affidavit, Ahmed Al Dulaimi, 27 May 2019, at [11].

17. Khazma did not make final submissions in favour of the retention amount that had earlier been asserted. In the result, I accept Mr Al Dulaimi's evidence and also find that there was no provision for a retention sum.  Evidence that there was no sum retained in respect of the first project and the unlikelihood of Babylon undertaking to be responsible for windows and glassware for 12 months on the worksite, after installation, supports this conclusion. 

18. Accordingly, I find that the sum claimed of $108,832.39 remains payable by Khazma, and judgment for this sum should be awarded. The cross‑claim must fail. 

19. Interest cannot run from the date of the invoice, as claimed by Babylon, but from two weeks thereafter in accordance with Mr Al Dulaimi's evidence of the agreement. In the absence of a schedule identifying the dates of unpaid invoices, I calculate interest from 14 days after the last unpaid invoice, namely, from 5 December 2017, until today, which on the principal sum produces interest of $16,035.77. Together with the principal sum, the judgment sum is $124,868.16. 

20. The parties accepted that costs should follow the event in accordance with UCPR 42.1. In case this judgment impacts upon the appropriate order, I will reserve liberty to apply.

21. Accordingly, the orders of the Court are:

1. Judgment for the plaintiff, Babylon Aluminium Pty Ltd, against the defendant, Khazma Aluminium Windows & Doors Pty Ltd, in the sum of $124,868.16, inclusive of interest.

2. Judgment for the cross-defendant on the cross-claim.

3. The defendant/cross-claimant to pay the plaintiff's/cross-defendant's costs of the proceedings, including the costs of the cross-claim.

4. Reserve liberty to the parties to make any application to vary the costs order by email to my associate within 14 days.

5. Refuse the plaintiff's further application for an indemnity costs order.

6. Order that order (3) above is not to include the costs of the application for indemnity costs made today.

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Endnotes

Decision last updated: 13 October 2022