Brewarrina Shire Council v Beckhaus Civil Pty Ltd

[2005] NSWCA 248

CITATION:	Brewarrina Shire Council v Beckhaus Civil Pty Ltd & 1 Or [2005] NSWCA 248
HEARING DATE(S):	12/07/05, 13/07/05, 14/07/05, 15/07/05
JUDGMENT DATE:	4 August 2005
JUDGMENT OF:	Hodgson JA at 1; Ipp JA at 2; McColl JA at 230
DECISION:	(1) The appeal be allowed (2) The orders made by Master Macready following his judgments of 16 September 2004 and 7 December 2004 be set aside (3) Beckhaus pay 70% of the Council's costs of the appeal and cross-appeal, and to have a certificate under the Suitors' Fund Act, if otherwise eligible (4) The following issues be remitted to Macready AsJ to determine in the light of the reasons for judgment (i) The costs of rectifying the work at the culverts (ii) The extent to which the levees constructed by Beckhaus did not comply with the requirement of 12% maximum linear shrinkage, and the costs of rectifying the work that was defective in this respect (iii) The amount the Council would have paid to Beckhaus (including amounts due for variations affecting the cost of the work) if all the work had been duly completed by it in accordance with the Contract (iv) The amount, if any, owing to Beckhaus by the Council for work that advanced the completion of the Contract (as assessed in accordance with the reasons for judgment) (v) The amount, if any, owing to Beckhaus by the Council in respect of the amount claimed under Variation 21 (vi) The amount, if any, owing to the Council by Beckhaus in respect of its cross-claims (as assessed in accordance with the reasons for judgment) (vii) Whether the Council should be given leave to amend its claim so as to be able to claim liquidated damages, and the resolution of such a claim (if it be allowed) (viii) Interest, if any (ix) The costs of the trial and the remitted hearing.

CATCHWORDS:	BUILDING AND CONSTRUCTION - defective or incomplete work - no damage for defective or incomplete work sustained while contract is on foot and contractor is required to complete the work - termination by agreement - can be ab initio or release from future performance only - implied term that the parties' rights are governed by provisions in the contract relating to completion despite the termination of it - failure to meet contractual standard - evidentiary onus on contractor to prove the contractual standard has substantially been complied with - breach by contractor - evidentiary onus on contractor to prove no damage suffered - assessment of damages for rectification costs - costs of new work required to achieve conformity with contractual requirements - undertaking of the new work must be reasonable - intention to rebuild or to rectify the work is generally not relevant - suspension of the work to be carried out under a contract - s 27 of the Building and Contruction Industry Security of Payment Act 1999 (NSW) - no suspension if payment under s 15(1)(b) of the Act is conditional upon the payment of a bank guarantee - PRACTICE AND PROCEDURE - appeal proceedings - raising a claim for the first time in the notice of appeal - principles in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 apply - TRADE PRACTICES - misleading and deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth) - adequate causative link required between conduct and damage suffered. D
LEGISLATION CITED:	Building and Construction Industry Security of Payment Act 1999 (NSW), ss 15(1)(b), 15(2)(b), 27(1) & (2), 27(3) Trade Practices Act 1974 (Cth), s 52
CASES CITED:	Baltic Shipping Company v Dillon (1993) 176 CLR 344 Bellgrove v Eldridge (1954) 90 CLR 613 Brewarrina Shire Council v Beckham Civil Pty Ltd (2003) 56 NSWLR 576 Brodyn Pty Ltd v Davenport [2003] NSWSC 1019 Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 8 ANZ Ins Cases 61-232 De Cesare v Deluxe Motors Pty Ltd (1996) 67 SASR 28 Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd (2002) 18 BCL 322 Ruxley Electronics & Constructions Ltd v Forsyth [1996] 1 AC 344 Ryder v Frohlich [2004] NSWCA 472 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Tito v Waddell (No 2) [1977] Ch 106 Trimis v Mina (1999) 16 BCL 288
PARTIES:	Brewarrina Shire Council (Appellant) Beckhaus Civil Pty Ltd (First Respondent) Dennis Fredrick Beckhaus (Second Respondent)
FILE NUMBER(S):	CA 41094/04
COUNSEL:	M Christie/V Culkoff (Appellant) M G Rudge SC/ D A C Robertson (First & Second Respondents)
SOLICITORS:	Paul Ward-Harvey & Co (Appellant) Dutton Lawyers (First & Second Respondents)

LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 55025/05
LOWER COURT JUDICIAL OFFICER:	Macready AsJ

CA 41094/04
SC 55025/02

HODGSON JA
IPP JA
McCOLL JA

Thursday, 4 August 2005

BREWARRINA SHIRE COUNCIL v BECKHAUS CIVIL PTY LTD & 1 OR

FACTS

On 13 October 2001 Brewarrina Shire Council (the “Council”) and Beckhaus Civil Pty Ltd (“Beckhaus”) entered into a contract (the “Contract”) for the construction of levee banks around the town of Brewarrina.

On 18 March 2002, Beckhaus wrote to the Council advising that the work had reached practical completion and requested certification of that fact. Mr Corven, the superintendent under the Contract, refused Beckhaus’ request. On 26 April 2002 Beckhaus lodged progress claim No 7 for $702,678.45 with the Council. Mr Corven refused to certify this claim.

Beckhaus commenced proceedings against the Council claiming the amount said to be owing in respect of progress claim No 7 as well as amounts said to be owing in respect of two variations under the Contract (Variation 17 and Variation 21).

The Council filed three cross-claims. It alleged, firstly, that Beckhaus had not completed the work in accordance with the Contract and the Council, in consequence, had suffered loss and damage being the costs of rectification. It alleged, secondly, that the Contract was an entire contract and the consideration for the total amount paid by the Council to Beckhaus thereunder ($1,654,747.40) had wholly failed. The Council claimed repayment of this sum. It alleged, thirdly, that Beckhaus had made representations that were misleading and deceptive (constituting conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth)) that led to the Council suffering loss and damage.

The Council joined Mr Beckhaus as a cross-defendant, alleging that he had aided, abetted, counselled or procured the conduct of Beckhaus which contravened the Trade Practices Act and was knowingly a party to that contravention. The Council claimed damages from Mr Beckhaus on that basis.

At a late stage in the proceedings the Council sought to amend its pleadings so as to claim liquidated damages.

Master Macready upheld Beckhaus’ claim in respect of progress claim No 7 and the claims in respect of Variations 17 and 21. He refused the Council’s application to amend so as to claim liquidated damages. He upheld the Council’s cross-claims to the extent of $40,000 (but otherwise dismissed them). After “consolidating” the orders he granted a verdict and judgment in favour of Beckhaus in the sum of $905,009.53. The Council appealed against the orders made by Master Macready.

HELD per Ipp JA (Hodgson JA and McColl JA agreeing):

1. As long as the Council maintained that the Contract was alive and had not been terminated, and held Beckhaus to its obligation to complete the work in accordance with it, on the Council’s contention the work remained lawfully in Beckhaus’ possession.

2. While the work was in Beckhaus’ possession, the Council suffered no loss by reason of defective or incomplete work; the work, not being in the Council’s possession, did not at that stage form part of its patrimony.

3. The situation changed when the Contract was terminated. When that occurred, the work (in its defective and incomplete state) was handed over to the Council. At that stage the Council suffered loss by being in possession of defective and incomplete work.

4. The parties to a contract can agree that the contract is to be terminated on the basis that there is a mutual release from future performance only and that rights accrued to the date of termination will remain of full force and effect. By no later than 15 March 2004, when the trial commenced before Master Macready, both parties tacitly accepted that the Contract was at an end.

5. A progress claim is a claim for payment on account. As the Contract had been terminated, it was not appropriate for Beckhaus to be awarded any sum on account and the financial position between the parties had to be determined finally. Thus, the claim for progress claim No 7 could not succeed.

6. Clause 44.6 of the Contract provided that if Beckhaus committed a material breach of the Contract and if the Council took the work out of its hands and had it completed by another contractor, a balance would be struck between:

(a) The costs of the Council of completing the work, and

(b) The amount the Council would have paid Beckhaus if all the work had been duly completed by it in accordance with the Contract.

7. It was implicit in the termination agreement that the formula provided by cl 44.6 would operate upon termination. As the work was not completed, the onus lay on Beckhaus – in establishing its claim that there was a balance owing to it – to prove the elements of the formula provided by cl 44.6 resulting in that balance. Beckhaus’ claim was not put in this way at the trial and was not dealt with in this way by the Master.

8. As regards the cross-claims, the Council would only be entitled to judgment in respect thereof were it to be found that the Council would incur greater costs in having the work rectified and completed in accordance with the Contract than the amount it would have paid to Beckhaus if the latter had duly completed the work. The Council would then be entitled to be paid the difference between the two amounts. The onus lay on the Council to prove how much rectification and completion would cost and what the Council would have paid if Beckhaus had completed the work in accordance with the Contract. The Council’s cross-claims were not put in this way at the trial and were not dealt with in this way by the Master.

9. The issue of the amount that may be owing to Beckhaus or the Council under the Contract as varied by the termination agreement should be remitted to Macready AsJ.

10. Beckhaus had not established that it did the work, the subject of Variation 17, in accordance with the Contract. Accordingly, the Master erred in upholding Beckhaus’ claim for Variation 17.

11. As regards Variation 21, the parties’ arguments were premised on matters that, in the light of the finding that the Contract was terminated, have altered significantly. This claim should be remitted to Macready AsJ for determination.

12. The Master erred in finding that the evidence demonstrated that there had been substantial compliance with the contractual requirements for compaction over the culverts. Beckhaus had breached the Contract by failing to carry out the tests required in relation to compaction at the culverts and the Council is entitled to damages being the costs of rectifying the work at the culverts.

13. The Council sought to claim damages by reason of Beckhaus’ failure to add 3% lime to all material as it was obliged to do under the Contract. The Council, however, did not make a specific claim for damages for such a breach at the trial and, by reason of the principles laid in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, the Council should not be allowed, now, to advance this claim.

14. The Master adopted an incorrect approach in regard to the onus of proof that applied to the Council’s cross-claim based on the proposition that Beckhaus breached the Contract by failing to comply with its obligation to construct the levee system with clay material having a maximum linear shrinkage value of 12%. Accordingly, the issues involving the extent to which the levee system was constructed with material having a maximum linear shrinkage value of more than 12% and an assessment of the damages suffered by the Council in consequence of the levee system not being constructed with such material should be remitted to Macready AsJ for re-determination.

15. The assessment of damages for rectification costs in relation to a construction contract is calculated according to the cost of the new work required to make the work already performed by the contract conform to the requirements of the contract. This is, as Bellgrove v Eldridge (1954) 90 CLR 613 indicated, subject to the qualification that the undertaking of the new work is a reasonable course to adopt.

16. The existence of an intention on the part of a party to a construction contract to rebuild or to rectify the work already performed by the contractor is not generally, as Bellgrove v Eldridge indicates, relevant to the assessment of damages for rectification costs owing to that party and is not relevant in this case.

17. The Council’s cross-claim based on the proposition that Beckhaus had breached the Contract by failing to ensure that the materials achieved the required minimum compaction specification failed.

18. There must be an adequate causative link between conduct that is, in terms of s 52 of the Trade Practices Act, misleading and deceptive and the damage suffered by the party at whom such conduct is directed. Misleading and deceptive conduct that merely induces a party to enter into a contract is far too remote from damage caused by breaches unrelated to that conduct to give rise to a claim for that damage. The Council’s claim under this head failed.

19. A payment conditional on the provision of a bank guarantee is not a payment within the meaning of s 15(1)(b) of the Building and Construction IndustrySecurity of Payment Act 1999 (NSW).

20. The following are the orders of the Court:

(1) The appeal be allowed.
(2) The orders made by Master Macready following his judgments of 16 September 2004 and 7 December 2004 be set aside.
(3) Beckhaus pay 70% of the Council’s costs of the appeal and cross-appeal, and to have a certificate under the Suitors’ Fund Act, if otherwise eligible.
(4) The following issues be remitted to Macready AsJ to determine in the light of the reasons for judgment:
(i) The costs of rectifying the work at the culverts.
(ii) The extent to which the levees constructed by Beckhaus did not comply with the requirement of 12% maximum linear shrinkage, and the costs of rectifying the work that was defective in this respect.
(iii) The amount the Council would have paid to Beckhaus (including amounts due for variations affecting the cost of the work) if all the work had been duly completed by it in accordance with the Contract.
(iv) The amount, if any, owing to Beckhaus by the Council for work that advanced the completion of the Contract (as assessed in accordance with the reasons for judgment).
(v) The amount, if any, owing to Beckhaus by the Council in respect of the amount claimed under Variation 21.
(vi) The amount, if any, owing to the Council by Beckhaus in respect of its cross-claims (as assessed in accordance with the reasons for judgment).
(vii) Whether the Council should be given leave to amend its claim so as to be able to claim liquidated damages, and the resolution of such a claim (if it be allowed).
(viii) Interest, if any.
(ix) The costs of the trial and the remitted hearing.

***********

CA 41094/04
SC 55025/02

HODGSON JA
IPP JA
McCOLL JA

Thursday, 4 August 2005

BREWARRINA SHIRE COUNCIL v BECKHAUS CIVIL PTY LTD & 1 OR

Judgment

1 HODGSON JA: I agree with Ipp JA.

2 IPP JA:

The contract to construct levees

3 Brewarrina is a small town (population 2,000) on the banks of the Barwon River in north-western New South Wales. At times the Barwon River floods. To protect itself against inundation, Brewarrina has had levee banks constructed in strategic positions around the town. The levees are constructed largely of compacted earth in which culverts have been inserted at intervals. The culverts serve to drain water from the township.

4 Levees were first constructed in 1976; these comprised what were referred to as the southern and northern levees. In 1991 the New South Wales Department of Public Works conducted an audit of the levees and recommended that further work be undertaken to upgrade them. In 2000 a flood occurred and the population of Brewarrina was heavily engaged in saving the existing levees. Brewarrina Shire Council (the “Council”) commissioned a redesign of the levees with a view to upgrading them. The new works were designed and put out to tender. After the tender process had concluded, it was recommended to the Council that the tender of Beckhaus Civil Pty Ltd (“Beckhaus”) be accepted. On 25 September 2001 the Council accepted this recommendation.

5 On 13 October 2001 the Council and Beckhaus entered into a contract (the “Contract”) for the construction of the new levee works and work commenced the following day. The Contract incorporated general conditions of contract 2124 -1992 (the “General Conditions”). The General Conditions provided that the Contract be supervised by a superintendent. On 16 December 2002 Mr Komp, an employee of the Council, was appointed superintendent. The project was split up into two portions, Separable Portions A and B. Separable Portion A constituted the bulk of the works. The date for practical completion of separable Portion A was 10 February 2002 and, for separable Portion B, 27 December 2001.

6 The Contract included the upgrading of the northern levee and a small part of the southern levee. New levees were to be constructed on the site of Charlton Road and Tarrion Creek Road. These new levees led to part of the old southern levee becoming redundant. A new levee was also to be constructed around parts of North Brewarrina. As the levees were to be constructed on the site of existing roads, a new road had to be constructed.

Litigation commences

7 On 18 March 2002 Beckhaus wrote to the Council advising that the works had reached practical completion and requested certification of that fact. On 21 March 2002 the Council removed Mr Komp as superintendent and Mr Corven was appointed as superintendent. He immediately set about what Beckhaus described as employing a “contractual broom” against it.

8 Mr Corven obtained various test results that had been carried out on the levees. These test results led to Mr Corven sending a series of letters to Beckhaus asserting that it had not complied with the Contract. He refused to certify that the works had reached practical completion.

9 On 26 April 2002 Beckhaus lodged with the Council progress claim No 7, which was identified as a claim under the Building and Construction Industry Security ofPayment Act 1999 (NSW) (the “Act”). The amount of this claim was $702,678.45. Instead of certifying that this amount was due to Beckhaus, Mr Corven – on 28 May 2002 – issued a certificate requiring payment by Beckhaus to the Council of $952,874.47.

10 On 4 June 2002 Beckhaus commenced proceedings against the Council. The claim was put on a number of alternative bases but, in essence, Beckhaus claimed a total of $838,969.10 (comprised of the claim of $702,678.45 represented by the amount of progress claim No 7 and amounts that Beckhaus asserted were owing to it in consequence of variations under the Contract).

11 The Council filed a cross-claim which underwent various amendments. In its final form, it alleged:

(a) In several respects Beckhaus had not executed and completed the work in accordance with the Contract; the Council in consequence had suffered loss and damage being the costs of rectification.

(b) The Contract was an entire contract and, by reason of Beckhaus’ breaches thereof, the consideration for the payment of $1,654,747.40, being the sum paid by the Council to Beckhaus “in relation to the [Contract]”, had wholly failed. The Council claimed repayment of that sum.

(c) Mr Beckhaus (a director of Beckhaus) had made representations to the Council, on behalf of Beckhaus, that were misleading and deceptive and contravened s 52 of the Trade Practices Act 1974 (Cth); in consequence of this conduct the Council had suffered loss and damage being, relevantly, the costs of rectification.

12 Mr Beckhaus was joined as a cross-defendant in relation to the cross-claim for misleading and deceptive conduct under the Trade PracticesAct. The Council asserted that Mr Beckhaus “aided, abetted, counselled or procured” the contraventions of the Act and was knowingly concerned in or party to them. The Council alleged that Mr Beckhaus was liable, together with Beckhaus, for the damages the Council had allegedly suffered by reason of the contraventions of the Act.

13 Several interlocutory proceedings ensued. These included a claim for summary judgment by Beckhaus based on progress claim No 7. Master Macready (who presided over the trial) upheld the claim for summary judgment based on the provisions of the Contract and also on the Act. The Council appealed. Before this Court, the Council argued that the summary judgment should be set aside only on grounds relating to the contractual claim and assumed that, were the appeal to succeed on that basis, it would succeed, also, on the claim under the Act. Beckhaus did not contend to the contrary and the appeal proceeded on that assumption. This Court, differently constituted (Mason P, Ipp JA and Young CJ in Eq), by a majority, upheld the appeal (Brewarrina Shire Council v BeckhausCivil Pty Ltd (2003) 56 NSWLR 576). The majority (Mason P and Ipp JA) held that, by cl 42.1 of the Contract, the superintendent’s obligation to issue a payment certificate was subject to a condition precedent that Beckhaus support its claim with “such information as the superintendent might reasonably have required”, and Beckhaus had not established that that information had been provided. Having regard to the way the appeal was argued, the Court set aside the summary judgment orders (both in respect of the cause of action based on the Contract and that based on the Act) and granted leave to defend.

The judgment of 16 September 2004

14 The trial took 19 days to be completed. On 16 September 2004 Master Macready delivered what was his first judgment in the case.

15 The Master commenced his judgment by considering whether Beckhaus had achieved practical completion of the work. He noted that, although the obligation to make payment of progress claim No 7 was “arguably not conditioned upon the issue of a certificate of practical completion”, such a certificate was “important for other purposes under the [Contract]”.

16 The Council contended at trial (and on appeal) that the failure by Beckhaus to achieve practical completion amounted to a breach that disentitled Beckhaus from any further payment under the Contract.

17 Practical completion was defined by the General Conditions as follows:

“’Practical completion’ is that stage in the execution of the work under the Contract when –
(a) the Works are complete except for minor omissions and minor defects –
(i) which do not prevent the Works from being reasonably capable of being used for their intended purpose; and
(ii) which the Superintendent determines the Contractor has reasonable grounds for not promptly rectifying; and
(iii) rectification of which will not prejudice the convenient use of the Works; and
(b) those tests which are required by the Contract to be carried out and passed before the Works reach Practical Completion have been carried out and passed; and
(c) documents and other information required under the Contract which, in the opinion of the Superintendent, are essential for the use, operation and maintenance of the Works have been supplied.”

18 Master Macready held that all the tests required by the Contract to be carried out at culvert locations had not been performed. On this ground, he held that Beckhaus had failed to comply with paragraph (b) of the definition of practical completion; hence, Beckhaus had not achieved practical completion.

19 The Master turned to the question whether the Contract was a “lump sum contract” and, hence, an entire contract. He referred to the fact that the Contract contained a schedule of prices for provisional quantities and noted that the provisional quantities in question were items where the quantities were unknown (payment for provisional items of that kind was to be made by multiplying the tendered rate by the measured quantity). He concluded:

“[A]lthough the [Contract] may be described as a lump sum contract, it does contain appropriate conditions for certain provisions quantities which are, under the terms of the [Contract], to be determined by measurement.”

20 The Master then addressed numerous claims for variations that Beckhaus had made. He rejected a number of them but allowed the claim for Variation 17, being a claim for $106,240.40 in respect of stabilising additional soil not included within the specification.

21 The Master discussed a claim, described as Variation 21, for the costs to Beckhaus of holding its machinery in Brewarrina after it had sought a certificate of practical completion. Beckhaus contended that, because the superintendent had failed to grant a certificate of practical completion and to provide a list of defects, it was obliged to keep its machinery and employees on standby for over a month. It contended that the cost of keeping its equipment and employees on standby was payable by the Council either as delay costs pursuant to cl 36 of the General Conditions, alternatively as damages for breach of contract (being the Council’s failure to provide it with a list of defects after it had claimed practical completion). The Master did not decide this issue in his judgment of 16 September 2004 but left it over for further argument.

22 Master Macready proceeded to deal with progress claim No 7. The first issue in this connection was whether Beckhaus had complied with the condition precedent constituted by cl 42(1) of the General Conditions. The Master found that Beckhaus had complied with this condition.

23 The Master held, further, that, while Beckhaus had not achieved practical completion, it had achieved “substantial compliance with the [Contract]”. On this basis, he upheld Beckhaus’ claim for $702,678.45 in respect of progress claim No 7 (but subject to any damages that might be awarded to the Council under its cross-claims).

24 As regards the cross-claims, the Council contended that Beckhaus had breached the Contract by failing to achieve compaction of the levees, generally, to the contractual minimum, namely, “Hilf Density Ratio of 95% when tested in accordance with Test Method AS1289 – 5.7.1”. The Master found against the Council in this respect.

25 The Council contended that Beckhaus had breached the Contract by failing to comply with the testing required in respect of the compaction at the culverts. The Master held that Beckhaus had not complied with the specification in this respect. He nevertheless concluded that the evidence “clearly demonstrates that there has been substantial compliance with the contractual requirements for compaction over the culverts”.

26 The Council contended that Beckhaus “did not comply with contractual requirements for stabilisation of the levee bank materials (Contract Technical Specification clause 8.10)”. Clause 8.10 was in the following terms:

“Gypsum Stabilisation
Gypsum shall be added to Zone A Clayfill at a minimum rate of 5% (by dry weight). Should this rate be insufficient to meet the required 12% linear shrinkage criteria, additional gypsum shall be added in 1% increments until the Contractor can verify that the criteria is satisfied. The cost of additional rates of Gypsum Stabilisation will be borne by the Superintendent and shall be calculated as per the rate given in the Schedule of Prices.
…
Gypsum shall be evenly spread over the area to be stabilised and mixed thoroughly to produce a uniform material. Gypsum may be substituted with 3% Hydrated Lime by dry weight subject to the Superintendent’s approval.”

After the Contract had been entered into, the parties agreed that 3% lime should be substituted for “5% Gypsum” in cl 8.10.

27 Master Macready observed, in regard to linear shrinkage and the addition of 3% lime:

“It is perfectly obvious from the evidence given in the case that the purpose of having achieved a particular linear shrinkage was to reduce the likelihood of deep and wide cracking in the embankment which might allow initiation of internal erosion and piping failure under flood conditions. In addition the adding of lime or Gypsum does inhibit dispersion if the soil is dispersive and makes it less likely to begin to erode or if erosion begins to slow the rate of erosion. It follows that the addition of lime reduces the shrinkage potential of the soil and thus reduces the depth of potential cracks.
The addition of 3% of meadow lime to all the materials may be a condition of the contract but a breach does not seem to have any consequence. This follows because the parties clearly contemplated that what is to be achieved is the placing of materials which had a maximum linear shrinkage of 12%. The whole testing regime in the contract is there merely to measure this requirement and there is no need for a demonstration of adding the particular 3% meadow lime.”

28 He noted:

“The addition of 3% lime required about 4,953 tons of lime which at $70.00 per ton would involve a cost of $346,710.00. Delivery dockets for the project indicated deliveries of 328.86 tons of lime which is a value of about $25,000.00. The daily reports showed somewhat less being received on site. As I have indicated earlier these are somewhat unreliable.”

29 The Master found that Beckhaus added sufficient lime to ensure that the material met the 12% maximum linear shrinkage specification. He held, however, that Beckhaus had not complied with the contractual requirement to add at least 3% lime to all the material. As mentioned, he concluded that the failure to add 3% lime had no relevant consequence.

30 The Master examined the testing that had been carried out in respect of linear shrinkage and concluded:

“It is perfectly plain that the results indicate a variety of failures and a variety of occasions when the specifications were met.”

He said, in regard to the 12% maximum linear shrinkage specification:

“Given the existence of these failures it is hard to conclude that there has not been some breach of the specifications.”

31 The Master, having found that there had been “some breach” of the Contract in regard to the 12% linear shrinkage requirement, proceeded to examine whether this breach sounded in damages. He concluded:

“Bearing in mind my conclusion that there has not been demonstrated a sufficient departure from the compaction requirement it seems to me that there has been substantial compliance with the contract in respect of linear shrinkage. This flows from the fact that such testing as there is, seems to indicate a compliance in the northern levee which is agreed to be sufficient. In respect of the other levees the evidence is of little weight because there is no basis expressed for the conclusions reached. In particular I am satisfied that in respect of linear shrinkage the levees are fit for their intended purpose.”

32 The Master rejected the Council’s claim in restitution for total failure of consideration. He came to this conclusion on two bases. Firstly, there had been substantial performance of the Contract. Secondly, the Contract was not an entire contract.

33 The Master then turned to the allegations made by the Council in regard to the Trade Practices Act. The Council alleged that Beckhaus had been guilty of three misrepresentations that constituted misleading or deceptive conduct. These were:

(a) Beckhaus had assets worth $2,000,000,

(b) Beckhaus had an annual turnover of between $3,000,000 and $6,000,000, and

(c) Beckhaus operated a third party accredited quality system.

34 The Master found that these misrepresentations were made and the Council relied on them in entering into the Contract. He then addressed the question whether the Council had suffered any damage as a result. He pointed out that the next lower tenderer was Sudholz. The difference between Beckhaus’ tender and that of Sudholz was approximately $1,000,000 and, having regard to the terms of Sudholz’s tender, Sudholz’s contract price would have increased by at least another $200,000. The Master observed:

“Having regard to my decision on the cross-claim it is clear that the damages will not anywhere near approach a sufficient sum to demonstrate that the Council has in fact suffered damage.”

In other words, the Master was of the view that the damages to which the Council might be entitled under its cross-claim would be substantially less than $1,200,000 (the difference between the price under the Sudholz contract and the Contract price). He therefore rejected the claim under the Trade Practices Act .

35 In the result, the Master dismissed the Council’s cross-claim, save that he held that “the Council is entitled to damages for two small matters”.

The judgment of 7 December 2004

36 The matter was then re-listed for further argument. At that stage, the Council orally sought leave to amend its pleadings to incorporate a claim for liquidated damages. In opposing this application, Beckhaus, submitted (as the Master observed):

“The [Contract] was discharged by implied agreement through the parties’ mutual abandonment of the [Contract] in or about early 2002.”

37 On 7 December 2004 Master Macready handed down a further judgment.

38 He noted that the parties had agreed that the amount owing in respect of his findings on the cross-claim was $40,000.

39 In dealing with the application by the Council to amend so as to claim liquidated damages, the Master rejected Beckhaus’ argument that the Contract had been abandoned or terminated. In doing so, he appears to have assumed that Beckhaus’ contentions were based on the proposition that, by mutual agreement, the Contract had been rescinded ab initio. (Mr Rudge SC who, together with Mr Robertson, appeared for Beckhaus, disavowed to this Court having submitted at trial that the Contract had been so rescinded). The Master held that neither party had evinced such an intention.

40 It appears that the Council accepted before the Master that, by reason of extensions of time to which Beckhaus was probably entitled, the date for practical completion (in respect of both Separable Portions A and B of the Contract) should be taken to be 31 March 2002. That being so, under the Contract the claim for liquidated damages could run from no earlier date.

41 Master Macready upheld Beckhaus’ submission that the Council was precluded from claiming liquidated damages after 27 May 2002. His reasoning was as follows. He held that the Council had failed to pay progress claim No 7 unconditionally. On the basis of that finding, Beckhaus, in terms of s 27(1) of the Building and Construction Industry Security ofPayment Act, had lawfully suspended work on 27 May 2002. It followed, the Master held, that the superintendent, acting reasonably, would have extended time for practical completion until unconditional payment was made. Accordingly, work (and practical completion) remained lawfully suspended as at the judgment date. Under the Contract, there could be no claim for liquidated damages for the period during which the time for practical completion was so suspended (that is, during the period from 27 May 2002 to the date of judgment).

42 The Master noted that there had been “no identification of any determination” of the Contract (the Council was then contending that the Contract had not been terminated). He said:

“The parties have not identified any matter in the present evidence that would be an end date [for the period of liquidated damages] and the likelihood is that any entitlement to liquidated damages will only arise following upon some other facts which lead to a termination of the contract after the present time.”

43 For this reason, and the relatively small amount that, on the Master’s reasons, the Council could claim (that is, based only on a “likely” period of about two months – from not earlier than 31 March 2002 to 27 May 2002) the Master declined to give leave to plead a claim for liquidated damages.

44 The Master turned to Variation 21. The gist of this claim was that, in breach of the Contract, the superintendent had failed to provide Beckhaus with a list of defects upon Beckhaus asserting that practical completion had been reached. Beckhaus contended that this failure caused it to keep its major earthmoving equipment at Brewarrina and entitled it to delay costs, alternatively to damages.

45 Master Macready appears, however, to have upheld this claim on a different basis, namely, because the Council had substantially failed in its cross-claim, there was no practical need for Beckhaus to have kept its equipment on site as the superintendent had required. The Master said:

“It is apparent from discussions, which took place on 3 April 2002 between the Council and [Beckhaus], that the Council was raising a large number of matters which might require further work by [Beckhaus]. The matter escalated into the service of notices of dispute on about 24 April 2002 and accordingly it was probably reasonable for [Beckhaus] to keep its equipment on site until the time claimed namely 27 April 2002. In my view [Beckhaus] is entitled to this variation.”

The orders made by the Master

46 Relevantly, Master Macready made orders:

(1) Granting a verdict and judgment in favour of Beckhaus in the sum of $809,236.54.

(2) Granting a verdict and judgment in favour of the Council on its cross-claim in the sum of $40,000.

(3) Otherwise dismissing the cross-claim.

(4) Ordering the Council to pay Beckhaus interest in the sum of $135,772.99.

(5) “In consolidation” of the orders referred to in (1), (2) and (3) above, granting a verdict and judgment in favour of Beckhaus in the sum of $905,009.53.

(6) Ordering the Council to pay Beckhaus’ costs on various basis.

(7) Ordering the Council to pay Mr Beckhaus’ costs of the cross-claim.

47 The sum of $905,009.53 (the “consolidated” verdict) appears to have been arrived at as follows. By adding interest in the sum of $135,772.99 (as ordered by the Master – see (4) above) to the verdict of $809,236.54 (see (1) above), the sum of $945,009.53 is arrived at. $945,009.53 less the amount of $40,000 awarded to the Council (see (2) above) is $905,009.53.

48 I assume that the judgment sum of $809,236.54 is the aggregate of progress claim No 7 and Variation 17. There is, however, no specific mention of Variation 21 in the orders that were made. According to the Council’s notice of appeal the amount awarded in respect of Variation 21 was $101,560. I can only assume that this sum formed part of the award of interest. The parties did not explain these matters to the Court.

The notice of appeal and the notice of contention

49 By its notice of appeal the Council, in summary, contended that Master Macready erred in the following respects:

(a) In holding that the Council was not entitled to damages for Beckhaus’ breach of the Contract in failing to provide test results indicating that compaction around the culverts complied with the specification.

(b) In holding that the Council was not entitled to damages for Beckhaus’ breach of the Contract in failing to add 3% lime to the material to be compacted.

(c) In holding that the Council was not entitled to damages for Beckhaus’ breach of the Contract in failing to achieve linear shrinkage not exceeding 12%.

(d) In holding that the levees were compacted in accordance with the specification.

(e) In holding that the Contract was a divisible contract, that there had been substantial performance by Beckhaus and that the Council’s claim for total failure of consideration was unsuccessful.

(f) In holding that the condition precedent to the issuing of a payment certificate by the superintendent (in respect of progress claim No 7) had been satisfied.

(g) In holding that, in accordance with the Building and Construction Industry Security ofPayment Act , Beckhaus was entitled to payment of progress claim No 7.

(h) In holding that Beckhaus was entitled to payment of Variation 17.

(i) In holding that Beckhaus was entitled to payment of Variation 21.

(j) In ordering that the Council pay the costs of Beckhaus and Mr Beckhaus.

(k) In refusing the Council’s application to amend so as to claim liquidated damages.

50 In its notice of contention Beckhaus alleged that Master Macready had erred in failing to find that the Contract “had been abandoned in futuro or terminated by the implied agreement or mutual acquiescence of the parties, and that therefore [the Council’s] claim for liquidated damages could not succeed, even if [the Council] were given leave to amend”.

51 The notice of contention also asserted that the Council’s application for leave to amend so as to claim liquidated damages should, in any event, have been refused “by reason of the numerous areas of factual inquiry requiring further evidence which would have been raised by the proposed amended cross-claim”.

52 The notice of appeal and the notice of contention raised many other grounds that are encompassed in the grounds I have summarised above or which were not agitated on appeal or which have become irrelevant. I would add that there was a notice of cross-appeal filed by Beckhaus which, in effect, has been subsumed by the issues raised in the notice of appeal and the notice of contention.

Claiming damages for defective performance while the Contract was on foot

53 The notice of contention raises the question whether the Contract was terminated by mutual agreement. The Council long denied this proposition but, on the third day of the appeal, assented to it. Despite the Council’s late acceptance of the proposition, the question remains relevant as it exposes a misconception by both parties in the way the issues were addressed at trial. The misconception was that the Council could claim damages from Beckhaus for defective and incomplete work while the work was still in Beckhaus’ possession and while Beckhaus was still obliged (and entitled) to execute the work to practical completion. This misconception permeated the conduct of the case by all involved and complicated the identification of the true issues in the case.

54 The reason for the Council’s stand is not hard to find. It lies in cl 35.6 of the General Conditions which provided:

‘If [Beckhaus] fails to reach Practical Completion by the date for Practical Completion, [Beckhaus] shall be indebted to [the Council] for liquidated damages at the rate stated in the Annexure for every day after the Date for Practical Completion to and including the Date of Practical Completion or the date that the Contract is terminated under Clause 44, whichever first occurs.”

The Council wished to assert that the Contract remained on foot so as to enable it to make a large claim for liquidated damages. Thus, the Council believed that it was in its interests to contend that the Contract had not been terminated but, at the same time, to claim damages for defective and incomplete work.

55 It is helpful to identify Beckhaus’ obligations to perform the work under the Contract, Beckhaus’ rights to be paid for its work, and the Council’s rights in respect of breaches of the Contract by Beckhaus. Once those obligations and rights are identified, consideration must be given as to whether there was an agreed termination and, if so, how they were affected by the agreed termination.

56 By cl 3.1 of the General Conditions, Beckhaus undertook to execute and complete the work under the Contract and the Council undertook to pay Beckhaus:

“(a) for work for which the [Council] accepted a lump sum, the lump sum;
(b) for work for which the [Council] accepted rates, the sum ascertained by multiplying the measured quantity of each section or item of work actually carried out under the contract by the rate accepted by the [council] for the section or item,
adjusted by any additions or deductions made pursuant to the contract.”

Thus, by cl 3.1, the Council’s obligation was to pay Beckhaus for the work executed and completed.

57 Clause 30.3 provided that, if the superintendent discovered material or work provided by Beckhaus that was not in accordance with the Contract, the superintendent might direct Beckhaus to remove the material from the site, to demolish the work, or to reconstruct, replace or correct the material or work. Thus, by cl 30.3, the Council was entitled to require Beckhaus to remedy defective work before the Council was obliged to pay for it.

58 Clause 35.2 provided that Beckhaus should execute the work under the Contract to the stage of practical completion by the date for practical completion. Beckhaus was obliged, on the date of practical completion, to give possession of the site and the work to the Council and, on that date, the Council was obliged to accept possession.

59 At least while the Contract endured, until practical completion was achieved Beckhaus had no obligation and no right to deliver the work to the Council and the Council had no right to take possession of the work.

60 The Contract provided that the date for practical completion of Separable Portion A was 20 weeks after “Date of Acceptance of Tender” and for Separable Portion B “10 weeks after commencement date for Separable Portion B”. Mr Christie, who together with Ms Culkoff, appeared for the Council, accepted that the superintendent probably would have allowed extensions of time to the dates for practical completion until about March 2002. This is not a matter on which any concession was forthcoming from Beckhaus, but it may be accepted that the dates for practical completion were not earlier than March 2002.

61 By cl 37, the defects liability period commenced on the date of practical completion. In terms of cl 37, Beckhaus was obliged to rectify any defects or omissions in the work existing at practical completion. Prior to the fourteenth day after the expiration of the defects liability period, the superintendent could direct Beckhaus to rectify any omission or defect in the work existing at the date of practical completion or which became apparent prior to the expiration of the defects liability period.

62 Clause 42.1 provided for the payment of progress claims; it stated:

“Payment of monies shall not be evidence of the value of work or an admission of liability or evidence that work has been executed satisfactorily but shall be a payment on account only ….”

Thus, a payment of a progress claim was a payment on account.

63 Clause 44.1 provided:

“If a party breaches or repudiates the Contract, nothing in Clause 44 shall prejudice the right of the other party to recover damages or exercise any other right.”

64 Clause 44.5 provided that, should the Council take the work out of Beckhaus’ hands, the Council should complete the work. Clause 44.6 provided:

“When work taken out of the hands of [Beckhaus] under Clause 44.4(a) is completed the Superintendent shall ascertain the cost incurred by the [Council] in completing the work and shall issue a certificate to the [Council] and [Beckhaus] certifying the amount of that cost.
If the cost incurred by the [Council in completing the work] is greater than the amount which would have been paid to [Beckhaus] if the work had been completed by [Beckhaus], the difference shall be a debt due from [Beckhaus] to the [Council]. If the cost incurred by the [Council] is less than the amount that would have been paid to [Beckhaus] if the work had been completed by [Beckhaus], the difference shall be a debt due to [Beckhaus] from the [Council].”

65 No provision of the Contract prevented the Council from suing Beckhaus for damages for breach of contract under common law; but that is not to say that, simply by reason of a failure, by the date for practical completion, to complete the work to the standard required, the Council would be entitled to damages for defective or incomplete work.

66 An important part of the Council’s case at trial was that Beckhaus at no stage achieved practical completion of either Separable Portion A or B. Master Macready upheld this assertion and, for reasons that I later set out, I have come to the same conclusion.

67 Accordingly, as at the judgment date, the Council rightly denied that practical completion had been achieved. But, it continued - at that stage - to hold Beckhaus to its contractual obligations to perform the work. Thus, on the Council’s contention, at the date of judgment, the work remained in Beckhaus’ possession; the Council, in effect, having refused to accept possession.

68 While, on this assumption (the Contract still being on foot), the Council may have been entitled to claim damages for delay arising out of Beckhaus’ failure to achieve practical completion by the date for practical completion, it could not sue Beckhaus for defective or incomplete work. As long as the Council maintained that the Contract was alive and had not been terminated, and held Beckhaus to its obligation to complete the work in accordance with the specification, on its contention the work remained lawfully in Beckhaus’ possession. In other words, it was an inevitable incident of the Council’s argument that the work had not been delivered to and accepted by the Council (Beckhaus – on the Council’s argument – being in possession of and obliged to complete the work). While the work was in Beckhaus’ possession, the Council suffered no loss by reason of defective or incomplete work; the work, not being in the Council’s possession, did not at that stage form part of its patrimony.

69 This situation would have changed when the Contract was terminated. When that occurred, the work (in its defective and incomplete state) was handed over to the Council. At that stage, the Council suffered loss by being in possession of defective and incomplete work.

The agreed termination of the Contract

70 When Mr Christie eventually accepted that the Contract had been terminated by tacit agreement, the Council thereby, in effect, conceded the point made by Beckhaus’ notice of contention (although the date of termination was left open). Mr Christie’s concession was rightly made; the conclusion that the parties agreed, by their conduct, to terminate the Contract was inevitable. I shall set out a brief summary of the facts relevant to this issue.

71 On 18 March 2002 Beckhaus claimed that it had achieved practical completion and requested the superintendent to issue a certificate to that effect. The superintendent failed to do so and requested Beckhaus to produce various test certificates. Beckhaus gave the superintendent certain test results (but not all that had been requested) and on 26 April 2002 submitted progress claim No 7. The superintendent did not issue a certificate of practical completion and, on 27 April 2002, Beckhaus removed its major plant from the site.

72 On 22 May 2002 Beckhaus served a notice of intention to suspend work pursuant to s 15(2)(b) of the Act. On 27 May 2002 Beckhaus suspended work in reliance on s 27 of the Act for failure to pay progress claim No 7. On 22 August 2003 Beckhaus wrote to the Council asserting that the Contract had not been terminated and was still in existence (this appears to have been an attempted forensic tactic, rather than a step connected to reality).

73 From the time that Beckhaus left the site, the attitudes of the parties began to harden and, in my opinion, by no later than 15 March 2004 – when the trial commenced - both parties tacitly accepted that the Contract was at an end. Beckhaus contended that it might have come to an end earlier but this issue depends on a factual inquiry that was not properly investigated at the trial and cannot be determined by this Court. The actual commencement of the hearing of lengthy and expensive litigation, directed to a final resolution of the parties’ rights, was conduct by both parties manifesting an intention wholly inconsistent with any continuing obligation of performance on either side.

74 Master Macready considered the issue of termination on the assumption that the parties had agreed to rescind the contract ab initio. It is open, however, to parties to a contract to agree that the contract is to be terminated on the basis that there is a mutual release from future performance only and that rights accrued to the date of termination will remain of full force and effect. See, for example, CIC Insurance Ltd v BankstownFootball Club Ltd (1995) 8 ANZ Ins Cases 61-232 at 75-594 per Powell JA (and as to abandonment, generally, see Ryder v Frohlich [2004] NSWCA 472 per McColl JA).

75 In any event, the issue is now concluded by reason of the Council’s late concession that the Contract was terminated by agreement on the latter basis.

The effect of the agreed termination on Beckhaus’ claim for unpaid work and the cross-claims

76 I have observed that a progress claim is a claim for payment on account (see cl 42.1). As the Contract has been terminated, it is no longer appropriate for Beckhaus to be awarded any sum “on account”. The financial position between the parties now has to be determined finally.

77 The Contract contains elaborate provisions as to the determination of amounts that, on completion of the Contract, the Council might owe to Beckhaus or Beckhaus might owe to the Council. The Contract, however, (by agreement) was not completed.

78 I have above referred to and set out cl 44.6 of the Contract. This clause regulates the settlement of accounts between the parties in the event of the work being taken out of the hands of Beckhaus and being completed by some other party (on the Council’s behalf). Clause 44.6 provides, in effect, that, were Beckhaus to commit a material breach of the Contract and were the Council to take the work out of its hands and have it completed by another contractor (as provided in cl 44. 4(a)), a balance would be struck between:

(a) the cost to the Council of completing the work (including the amounts it paid to Beckhaus under the Contract), and
(b) the amount the Council would have paid to Beckhaus (including amounts due for variations affecting the cost of the work) if all the work had been duly completed by it in accordance with the Contract.

It makes no difference whether the amounts previously paid to Beckhaus are or are not included in both these amounts.

79 In my view, it was implicit in the termination agreement that neither party would be worse off by reason of that agreement than it would have been had the Contract been terminated in accordance with its terms. In my view, the parties impliedly agreed that their respective rights on termination would be governed, mutatis mutandis, by those provisions of the Contract that applied on completion. In my opinion, although the termination agreement did not trigger cl 44.6 (because the work was not taken out of the hands of Beckhaus under cl 44.4(a) and was not completed), it was implicit in the termination agreement that the formula provided by the clause would operate upon termination. That formula is commercially fair and appropriate and there was no reason for the parties to depart from it.

80 Thus, were Beckhaus to prove that the Council would incur less costs in having the work under the Contract rectified and completed in accordance with the Contract than the amount it would have paid to Beckhaus if the latter had duly completed all the work in accordance with the Contract, Beckhaus would be entitled to be paid the difference (that being the balance struck in accordance with the formula contained in cl 44.6). In the present circumstances, where the work has not been rectified and completed, the onus, in my opinion, lies on Beckhaus – in establishing its claim that there is a balance owing to it – to prove the elements of the formula resulting in that balance, including what rectification and completion would cost.

81 A claim on the basis of such an implied term is not a claim for a quantum meruit in the sense of being a restitutionary claim “outside the contract” (see Trimis v Mina (1999) 16 BCL 288 at 295 [52] per Mason P). Beckhaus’ claim on this basis is a claim under the Contract as varied by the termination agreement.

82 Beckhaus’ claim was not put in this way at the trial and, understandably, was not dealt with in this way by the Master. Beckhaus’ claim, as represented by progress claim No 7, was simply a claim on account.

83 The reason why Beckhaus’ claim was not so dealt with at the trial was that neither party appreciated the significance of the agreed termination of the Contract. From the material before the Court (including progress claim No 7), it appears that Beckhaus did a substantial amount of work in accordance with the Contract for which it was not paid; but it is not certain that Beckhaus has proved that the cost of completing the work would be less than the amount than the Council would have paid it had it duly completed the work. The matters necessary to complete the work are also the subject of cross-claims which were rejected by the Master and which should be re-assessed; but it is also not clear that the Council has established a balance owing to it. Although I later deal with these as cross-claims by Council, it is to be kept in mind that the same matters also concern the deficiencies in respect of which Beckhaus bears an onus of proof as far as its claim is concerned.

84 In my opinion, in the light of the mutual misconception by the parties, justice requires the issue of the amount that may be owing to Beckhaus or the Council under the Contract as varied by the termination agreement to be remitted to Master Macready (now Macready AsJ). This, essentially, requires a re-examination of the work, the subject of progress claim No 7, in the light of these reasons. Regard must be had to the implied term of the termination agreement governing the final financial position of the parties, and those aspects of the Council’s appeal in respect of its cross-claims which I would uphold on the ground that work done by Beckhaus was not in accordance with the Contract and needs to be rectified and completed. This Court is not in a position to undertake this inquiry and the parties did not ask it to do so.

85 With respect to the cross-claims, the Council would only be entitled to judgment for an amount payable by Beckhaus to it were Macready AsJ to find, on re-assessment, that the Council would incur greater costs in having the work rectified and completed in accordance with the Contract than the amount it would have paid to Beckhaus if the latter had duly completed the work. The Council would then be entitled to be paid the difference between the two amounts.

86 It may be helpful if some hypothetical amounts are taken to illustrate the position. Assume that, had Beckhaus completed the work in accordance with the Contract, the cost to the Council would have been $2.5 mill. Assume that the Council has already paid Beckhaus $1.8 mill and the cost to it of completing the work in accordance with the Contract is $300,000. Beckhaus would then be entitled to be paid $400,000 (being $700,000 – the difference between $2.5 mill and $1.8 mill - less $300,000). The deficiencies the subject of the Council’s cross-claims would be taken into account in arriving at this result and no amount would be payable to it. If, however, the cost of completing the work in accordance with the Contract is $800,000, the Council would then be entitled to be paid $100,000 (being $800,000 less $700,000) and Beckhaus would receive nothing further.

87 I reiterate that, as regards Beckhaus’ claim, the onus is on Beckhaus to prove to prove what rectification and completion would cost and what the Council would have paid it if it had completed the work in accordance with the Contract. As regards the cross-claims, the onus lies on the Council to prove these matters.

(iii) The amount the Council would have paid to Beckhaus (including amounts due for variations affecting the cost of the work) if all the work had been duly completed by it in accordance with the Contract.
(iv) The amount, if any, owing to Beckhaus by the Council for work that advanced the completion of the Contract (as assessed in accordance with these reasons).
(v) The amount, if any, owing to Beckhaus by the Council in respect of the amount claimed under Variation 21.
(vi) The amount, if any, owing to the Council by Beckhaus in respect of its cross-claims (as assessed in accordance with these reasons).
(vii) Whether the Council should be given leave to amend its claim so as to be able to claim liquidated damages, and the resolution of such a claim (if it be allowed).


(viii) Interest, if any.

(ix) The costs of the trial and the remitted hearing.

230 McCOLL JA: I agree with Ipp JA.

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