Boulus Constructions Pty Ltd v Warrumbungle Shire Council

[2020] NSWSC 1847

Supreme Court

New South Wales

Medium Neutral Citation:

Boulus Constructions Pty Ltd v Warrumbungle Shire Council [2020] NSWSC 1847

Hearing dates:

On the papers; submissions 10, 14 and 15 December 2020

Date of orders:

16 December 2020

Decision date:

16 December 2020

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

Applicant for leave to amend Technology and Construction List Statement allowed in part

Catchwords:

CIVIL PROCEDURE – pleadings – application for leave to amend List Statement – construction contract – misleading or deceptive conduct – proposed plea that had representations not been made, plaintiff would have submitted higher tender and that “if” defendant accepted that tender plaintiff would have entered contract with a higher price – no allegation as to whether defendant would have accepted the higher tender – whether pleading maintainable

CIVIL PROCEDURE – pleadings – application for leave to amend List Statement – construction contract – proposed pleading that the matters represented were terms of the contract or that contract should be rectified to include such terms

Legislation Cited:

Competition and Consumer Act 2010 (Cth), Sch 2

Cases Cited:

MacDonald v Shinko Australia Pty Ltd [1999] 2 Qd R 152; [1998] QCA 53

Category:

Procedural and other rulings

Parties:

Boulus Constructions Pty Ltd (Plaintiff)
Warrumbungle Shire Council (Defendant)

Representation:

Counsel:
Mr G Campbell (Plaintiff)
Mr D D Feller SC (Defendant)

Solicitors:
APJ Law (Plaintiff)
Vincent Young Lawyers (Defendant)

File Number(s):

2018/340246

Judgment

1. On 10 August 2017 the plaintiff, Boulus Constructions Pty Ltd, entered into a contract (“the Contract”) with the defendant, Warrumbungle Shire Council, to construct retirement units, a community centre and a learning centre to be known as the “Three Rivers Regional Retirement Community” on the site of the old Dunedoo Hospital for a lump sum of some $6.87 million (“the Contract Price”).

2. Boulus claims damages for breach of the Contract and for misleading or deceptive conduct contrary to s 18 of the Australian Consumer Law. [1]

   1. Competition and Consumer Act 2010 (Cth), Sch 2.

3. The matter is set down for hearing for 20 days commencing on 5 July 2021.

4. I have conducted directions hearings in relation to the matter on 9 October 2020, 16 October 2020 and again on 10 December 2020.

5. One matter that has been debated at those directions hearings is amendments that Boulus wishes to make to its Technology and Construction List Statement.

6. Boulus has now circulated the most recent iteration of the proposed amendments to the List Statement, being “Version 4” of a proposed Amended Technology and Construction List Statement.

7. Boulus seeks leave to amend the List Statement to allege that:

1. On 22 February 2017 (that is, before the date of the Contract) the Council represented to it that:

1. an asbestos certificate (that is, a certificate that the site had been cleared of asbestos) could be supplied to Boulus;

2. piles of concrete and rubble on the site could be used for road base and construction fill (that is, would be clear of asbestos); and

3. soil removed from excavation of the footings could also be used on the site (that is, were also clear of asbestos).

(together, “the Representations”) (proposed paragraph 6(b), 6(c2) and 6(c3)).

2. Relying on the Representations Boulus tendered for the project at the Contract Price (proposed paragraph 8);

3. Had the Representations not been made, Boulus would, in effect, have priced the additional work of asbestos removal to arrive at a higher price and submitted a tender on that basis (referred to in the proposed pleading as the “Counterfactual Tender”) (proposed paragraph 8A);

4. If the Council had accepted the Counterfactual Tender, Boulus would have entered a contract with the Council based on that tender (referred to in the proposed pleading as “the Counterfactual Contract”) (proposed paragraph 8B); and

5. If the Council did not accept the Counterfactual Tender, Boulus would not have entered into the Contract or any contract with the Council (proposed paragraph 8C).

8. Boulus also pleads the loss it has suffered on these alternative bases. For the reasons that follow, it is not necessary for me to consider those matters.

9. The pleading in proposed paragraph 8C is a “no transaction case”.

10. Evidently, proposed paragraph 8B is intended to be an “alternative transaction case”; or, as Mr Campbell, who appears for Boulus, described in his submissions, a “more advantageous” or “better” contract case.

11. This is made clear by these submissions from Mr Campbell:

“The affidavit of Brian Boulus 15 October 2020 attests that but for the [Council’s] representations, [Boulus] would have priced the additional work of asbestos removal inter alia to arrive at a higher tender price. This is inherently reasonable, as it was known that the old hospital had asbestos, and more work would ordinarily result in a higher price. But for the [Council’s] representations, all tenderers would have done the same.

However, in order to prove that the parties would have entered into a different contract, the facts (or inferences available to the Court) will have to show that the [Council] would have accepted [Boulus’s] revised tender. The [Council’s] evidence in reply on this point has not been served, so it is difficult to make any determination of this issue at the current juncture, except to say that the [Council] may have accepted [Boulus’s] tender, or it may have rejected it. Indeed, if it is found that [Boulus’s] revised tender was reasonable, that may be enough to determine that it would have been accepted. If the [Council] accepted [Boulus’s] tender, then [Boulus’s] damages would have to be assessed under a different, more advantageous contract to [Boulus]. If the tender was not accepted, then [Boulus] would not have entered into any contract with the [Council]at all, and would not have suffered any loss that it has suffered.

Accordingly, the issues of causation and damages in this case will require the Court to consider evidence of what the [Council] would have done in response to [Boulus’s] revised tender, should such evidence be forthcoming. If no such evidence is forthcoming, then the Court may make its own inferences. The [Council’s]’s submissions as to “conjecture or speculation” merely emphasise the fact that the Court must consider the two alternatives of a no contract case, or a better contract case, due to [Boulus’s] claim in the circumstances of the case.”

(Emphasis added.)

12. The passages I have emphasised in this submission show that Boulus contends for a “different” or “better” transaction case; and, alternatively, for a “no contract case”.

13. As Mr Campbell accepts in this submission, to prove that the parties would have entered a contract that was from Boulus’s point of view “better” than the Contract, Boulus would have to “show that the [Council] would have accepted [Boulous’s] revised tender”: that is, the Counterfactual Tender.

14. To make out a “different” or “better” contract case, Boulus would have plead the facts on which it relies to show that the Council would have accepted the Counterfactual Tender, and thus enter the Counterfactual Contract

15. It is evident from Mr Campbell’s submission that Boulus is not in a position to do this. Thus, Mr Campbell stated in the words I have emphasised, that this will depend on the Council’s evidence in reply, absent which it is “difficult to make any determination of the issue at the current juncture”.

16. In any event, the proposed pleading is not of a “different” or “better” transaction. case. What is proposed to be pleaded at 8B is, in effect, a “hypothetical transaction case”. That is a case assuming, but without asserting, that the Council would have accepted the Counterfactual Tender.

17. As Boulus is not in a position to plead that the Council would have accepted the Counterfactual Tender, Boulus cannot hedge its bets by pleading what it would have done “if” the Council had done so; hoping for the Council to adduce evidence sufficient for it to plead that the Council would in fact have done so.

18. I am not prepared to permit Boulus to plead its case in this speculative fashion.

19. Boulus also seeks to amend its List Statement to allege that the Representations became express terms of the contract or, alternatively, that the contract should be rectified to include them.

20. Mr Feller SC, who appears for the Council, submitted that such a pleading could not be reconciled with cl 7(1) of the Contract which provided:

“… the Contract is made up solely of the Contract Documents, which supersede all understandings, representations and communications made between the parties before the Date of Contract in relation to the subject matter of the Contract.”

21. However, the expression “Contract Document” is defined to include “Principal’s Documents” which is itself defined to include:

“… the drawings, specifications and other documents provided to [Boulus] and containing the [Council’s] requirements in respect of the Works.”

22. The relevant representations are alleged to be included in meeting minutes of 22 February 2017 which arguably, fall within this definition. I therefore propose to allow the amendment so far as concerns an express term.

23. Further, at least arguably, the clause to which I have referred at [20] would not stand in the way of rectification, if requirements for rectification were made out. [2]

    2. Eg see MacDonald v Shinko Australia Pty Ltd [1999] 2 Qd R 152 at 156; [1998] QCA 53 (Davies JA).

Conclusion

24. I therefore propose to grant leave to Boulus to amend its List Statement by pleading the matter summarised at [19]-[23] above.

25. I refuse to grant Boulus leave to amend to plead the matters summarised at [7]-[18] above.

26. The parties should confer and agree on the orders necessary to give effect to these reasons, including in relation to any consequential amendments that should be made to the Summons and to Boulus’s defence the Council’s Cross Claim.

27. Boulus is to pay the Council’s costs thrown away by the amendment.

28. If Boulus wishes to propound any further amendment to its List Statement, it should do so by Notice of Motion filed in the usual way, supported by an affidavit explaining why any further application to amend should be entertained.

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Endnotes

Decision last updated: 16 December 2020