Beckhaus v Brewarrina - [2004] NSWSC 840

NEW SOUTH WALES SUPREME COURT

CITATION: Beckhaus v Brewarrina [2004] NSWSC 840 revised - 1/12/2004

CURRENT JURISDICTION: Technology & Construction List

FILE NUMBER(S): 55025/02

HEARING DATE{S): 15 to 26 March 2004
17 to 20 May; 31 May, 2004
1 and 8 June 2004

JUDGMENT DATE: 16/09/2004

PARTIES:
Beckhaus Civil Pty Ltd v Brewarrina Shire Council

JUDGMENT OF: Master Macready

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
M. Rudge SC & D. Robertson for plaintiff
M.Christie & V. Culkoff for defendant

SOLICITORS:
Dutton Lawyers for plaintiff
Paul Ward-Harvey for defendant

CATCHWORDS:
Building and Construction - Contract - Claim for payment under contract to build earthwork levees - Whether payment claim valid - Cross-claim - Whether lump sum contract - Whether amount properly allowable for provisional variations - Whether practical completion achieved - Whether contractual requirements for progess claim met - Whether any breach of contract in respect of construction of levees - Whether Building and Construction Industry Security of Payment Act 1999 (NSW) applies -Misleading or deceptive conduct in the tender process.
Held: Practical completion not achieved. Contract was lump sum contract containing appropriate conditions for provisional quantities. Council entitled to damages for rectification of certain parts of the levees. Misleading and deceptive conduct established but no damges flow.

ACTS CITED:
Trade Practices Act 1974 (Cth)
Fair Trading Act 1987 (NSW)

DECISION:
Paragraphs 318, 318.

JUDGMENT:

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

Master Macready

Thursday 16 September 2004

55025/02 - BECKHAUS CIVIL PTY LIMITED v THE COUNCIL OF THE SHIRE OF BREWARINNA (A BODY INCORPORATED SOLELY BY REASON OF THE LOCAL GOVERNMENT ACT 1993 (NSW))

JUDGMENT

Master: These are proceedings in which the plaintiff claims against the Council a sum of $838,969.10 being the claimed balance under a contract for the construction of a series of earthwork levees around the town of Brewarrina in North Western New South Wales. There is a cross-claim by the Council against the plaintiff and its principal Mr Dennis Beckhaus. The cross-claim is brought against the plaintiff for breach of contract and seeks damages for rectification of the construction work carried out by the plaintiff. The cross-claim is also brought against the plaintiff and Mr Beckhaus under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW). This claim alleges that there was misleading and deceptive information given as to the plaintiff's financial standing and the existence of a quality assurance program in the pre-tender process.
There is also a second cross-claim, which is brought by the plaintiff against Civil Engineering Testing Services Pty Ltd. That company carried out a series of geotechnical tests during the course of the contract on behalf of the plaintiff. The third cross-defendant did not appear to contest the second cross-claim and the plaintiff seeks to proceed against it in the event that it is unsuccessful in its defence of the defendant’s cross-claim. The principal…

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: [2004] NSWSC 840
Decision Date: 16/09/2004

CaseChat Overview and Summary

The case of Beckhaus v Brewarrina involved a dispute between Beckhaus, a contractor, and Brewarrina Council, concerning a contract for the construction of earthwork levees. The Council alleged that the levees were not constructed to the required standards and sought damages for the necessary rectifications. Beckhaus, on the other hand, sought payment for the work completed and argued that the Building and Construction Industry Security of Payment Act 1999 (NSW) should apply to expedite the payment process. The case also included a cross-claim by Beckhaus regarding misleading and deceptive conduct during the tender process.

The primary legal issues addressed by the court were whether the contract was a lump sum agreement, the validity of the payment claim, the proper allowance for provisional variations, the achievement of practical completion, and the applicability of the Security of Payment Act. Additionally, the court examined whether there was any breach of contract in the construction of the levees and if there was misleading and deceptive conduct during the tender process.

The court found that practical completion had not been achieved, and the contract was indeed a lump sum contract that included appropriate conditions for provisional quantities. The court determined that the Council was entitled to damages for the rectification of certain parts of the levees. The provisional variations were deemed properly allowable. While the court established that there was misleading and deceptive conduct in the tender process, it found that no damages flowed from this conduct. Consequently, the Security of Payment Act did not apply to expedite the payment process.

The final orders included a determination that Beckhaus was not entitled to payment for the work done, and the Council was entitled to damages for the necessary rectifications of the levees. No damages were awarded for the misleading and deceptive conduct.

Orders