Buildcorp Group Pty Ltd v Strata Plan 125

[2025] NSWSC 501

Supreme Court

New South Wales

Medium Neutral Citation:

Buildcorp Group Pty Ltd v Strata Plan 125 [2025] NSWSC 501

Hearing dates:

22 May 2025

Date of orders:

17 June 2025

Decision date:

17 June 2025

Jurisdiction:

Equity - Commercial List

Before:

Peden J

Decision:

At [90]

Catchwords:

CONTRACTS — Construction — Interpretation — Whether plaintiff entitled to payment from defendant under special condition for what plaintiff contends is additional work — Scope within contract sum

Legislation Cited:

Supreme Court Act 1970 (NSW) s 63

Cases Cited:

AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564

Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640

Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd (2023) 276 CLR 500

Lohar Corp Pty Ltd v Dibu Pty Ltd (1975) 1 BPR 9177

Madsen v Darmali (No 3) [2024] NSWSC 582

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

Strike Australia Pty Ltd v Data Base Corporate Pty Ltd [2019] NSWCA 205

XL Insurance Co SE v BNY Trust Company of Australia Ltd [2019] NSWCA 215

Category:

Principal judgment

Parties:

Buildcorp Group Pty Ltd (plaintiff)
Strata Plan 125 (defendant)

Representation:

Counsel:
M Ashurst SC with L Corbett (plaintiff)
D Miller SC with B Le Plastrier (defendant)

Solicitors:
BCP Lawyers & Consultants (plaintiff)
Crisp Law (defendant)

File Number(s):

2023/00426245

Publication restriction:

Nil

JUDGMENT

1. In December 2021, Buildcorp Group Pty Ltd agreed to provide work pursuant to a “design and build contract” for the Owners of Strata Plan 125, which is located at Blues Point Tower in McMahons Point, New South Wales.

2. The Owners sought primarily the replacement of all the building’s external windows and doors, which had reached the end of their working life. The heritage status of the building meant that the façade (significantly comprising masonry walls and sills below the windows) had to be replaced with “like” materials.

3. On 8 March 2021, the Owners’ agent invited Buildcorp to tender for the “Heritage Façade Maintenance works”. The Owners provided Buildcorp with various reference documents, including the Council’s approval for the works and various reports by consultants dated between 2018 and 2021, detailing the Owners’ lengthy investigation into the defects in the façade and their rectification.

4. Buildcorp won the tender. It has since completed all the remediation work required by the Owners and has been paid the contract sum. In completing the work, Buildcorp carried out some strengthening work to windowsills with brackets and by way of steel beams. It claimed those works were not included in the contract sum and instead fell within Special Condition in item 2 of Annexure Part G of the contract (“Clarifications and Exclusions”), and entitled it to be paid for the “variation” works. That clause provides (emphasis added):

The parties agree that [the Owners’] project requirements is subject to the following clarifications and exclusions:

...

[Buildcorp] is not required to modify or rectify building elements not expressly detailed within the [request for quote] RFQ documents. [Buildcorp] will be entitled to payment from the [Owners] for certifying or modifying any such elements in order to complete the WUC [work under contract], by instruction of a variation.

5. Buildcorp gave the Owners two “variation claims” (HCV006 and HCV007), which were rejected by the Owners. This led to the dispute.

6. The Owners said Buildcorp’s summons ought to be dismissed either because:

1. There is no utility in making the declaration that Buildcorp seeks, namely that Buildcorp is “entitled to instruction of a variation” in respect of the work, because Buildcorp did not comply with the contractual machinery concerning variations and disputes; and/or

2. The “variation works” were always part of the scope of Buildcorp’s work under the contract and the special condition did not apply.

7. The main issue is whether, on the proper construction of the contract, the disputed works fell within the contracted works, the subject of the lump sum contract. It is therefore necessary to determine:

1. The proper construction of the special condition, and in particular, the meaning of “building elements” and “expressly detailed”; and

2. Whether the particular variation works were building elements that had not been expressly detailed in the RFQ documents, such that the completion of those works entitled Buildcorp to additional payment.

8. For the reasons that follow, I consider Buildcorp is entitled to further payment for the variations claims.

9. In reaching that decision, I have relied upon the evidence, as well as written and oral submissions made before and during the trial. However, I note that without seeking or obtaining leave, the parties agreed among themselves to provide to chambers additional submissions after judgment was reserved. I have ignored them for the reasons explained in authorities recently summarised by Rees J in Madsen v Darmali (No 3) [2024] NSWSC 582 at [6]:

The High Court has “deprecated in strong terms” litigants who submit submissions after the conclusion of a hearing, either without leave or beyond the leave granted, observing that this practice is “misconceived”, "unsatisfactory" and "impermissible": Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 258 (per Mason J); NT Power Generation [Pty Ltd v Power and Water Authority (2004) 219 CLR 90] at 159, [192]; Bale v Mills [(2011) 81 NSWLR 498] at [57]. Nor does it matter if the parties agree among themselves to put on further submissions; the parties have no right to place further material before the Court after the hearing has concluded, absent leave: “… it is wrong. It undermines and derogates from the principle of the open administration of justice": Bale v Mills at [59].

What was the scope of Buildcorp’s agreed work?

10. There was no dispute about the principles that apply to the construction of a commercial agreement: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35] (French CJ, Hayne, Crennan and Kiefel JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 (Mount Bruce) at [46]-[52] (French CJ, Nettle and Gordon JJ).

11. Its terms are to be understood objectively, according to what a reasonable businessperson, placed in the position of the parties, would have understood them to mean, having regard to the circumstances surrounding the contract and the commercial purpose and objects it sought to achieve: Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544 at [16] (Kiefel, Bell and Gordon JJ); Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd (2023) 276 CLR 500 at [27] (Kiefel CJ, Gageler, Gordon, Gleeson and Jagot JJ).

12. Buildcorp’s submission was:

[Buildcorp] accepts that [the] Special Condition does not qualify its obligation to design and construct the work so that the work satisfies the contract and Principal's Project Requirements (PPR), but says that it does provide for an entitlement to [Buildcorp to] be paid for that additional work.

[Buildcorp] says that the Special Condition was inserted to qualify the obligations that would otherwise fall on [Buildcorp]. It covers an issue not specifically dealt with by the general power to direct variations (in cl 37 of the General Conditions). That is, [Buildcorp] remains obliged (and takes the risk) to take the preliminary design and develop it to completion so that the completed work will comply with the law, but [Buildcorp] will be entitled to payment for performing extra work required by that completed design beyond what was specifically detailed in the tender documents.

13. Buildcorp’s submission was that only work “expressly detailed in the RFQ documents” had been costed for its tender. Work that was required to complete the Principal’s Project Requirements (PPRs), including the claimed work, had to be completed by Buildcorp, but it was entitled to payment for that claimed work, because that work was in respect of “building elements” that had not been “expressly detailed” in the RFQ documents.

14. The Owners’ submitted that the Special Condition did not refer to “work”, but instead “building elements”. That phrase is not defined in the contract. The parties agreed that the words “building elements” meant “any part of the building”. I accept that construction.

15. The real contest was whether the particular “building elements” were “expressly detailed” in the RFQ documents.

16. The parties did not provide detailed submissions on the meaning of the phrase “expressly detailed”. I consider that a reasonable businessperson in the parties’ positions would objectively understand “details” as meaning “particulars”, and “express” as meaning “to show, manifest, or reveal”, whether by words or pictorially; or “to represent by a symbol, character, figure, or formula.”

17. Therefore, it appears the objective intention of the parties in agreeing the Special Condition was that the RFQ documents could be investigated to see if there was the expression of the particular building elements by word or picture.

18. The Owners’ submission was that any building element, including a window or wall, drawn on any document in the RFQ documents was “expressly detailed”. Buildcorp submitted that more was required, and only specific windowsill strengthening and one metal beam had been drawn or described in the documents; work done beyond that would be caught by the Special Condition.

19. It is necessary to consider the RFQ documents in the context of the contract; the Special Condition provides a “clarification or exclusion” from the PPRs.

Contract and Principal’s Project Requirements

20. The contract was made up of:

1. a Formal Instrument of Agreement,

2. a list of contract documents at schedule 1,

3. General Conditions of contract (GC) at schedule 2, and

4. a series of annexures (A to O) containing inter alia some special conditions, drawings, and rates.

21. Buildcorp's scope of works is defined through the PPRs. Part G of the contract contains “clarifications and exclusions” as regards the PPRs and includes the Special Condition.

22. The PPRs are defined in the contract as meaning (emphasis in original):

… the Principal’s [the Owners’] written requirements for the WUC [works under contract] described in the documents listed in Item 10 and attached under Annexure Part J which:

(a) shall include the stated purpose;

(b) may include the Principal’s [the Owners’] design, timing and cost objectives for the WUC; and

(c) shall include a preliminary design documents,

subject to the clarifications and exclusions at Annexure Part G.

23. “Item 10” indicated that the PPRs “are described in the following [list of 21] documents”. Those documents were also Annexure Part J. It is not in dispute that the RFQ documents included the documents in Annexure Parts I and J. Therefore, the PPRs are found in the RFQ documents. (I note that the whole contract was not in evidence. For example, a Dilapidation Report dated 26 March 2021 and prepared by Core Project Consulting was listed as Document 5 and described the PPRs, but was missing in the evidence).

24. Of significance to the dispute were the following RFQ documents, which are relevant to whether the “building elements” are “expressly detailed” within them.

RFQ documents

25. First, the “preliminary design documents” (which were also Annexure Part I). These included:

1. various drawings prepared by architects dated 2018, and

2. drawings by Taylor Thomson Whitting (NSW) Pty Ltd, Consulting Engineers (TTW) of various dates in 2020 and early 2021 and various revisions.

26. Most of the TTW drawings were specified as “typical”, for example “typical windowsill section with stiffener”. One drawing, reproduced below, showed “Sample window panel. Same methodology applies to all windows, on all facades”. In the detailed drawing on the same page, “new sill strengthening” and “new sill flashing” were identified. While the language used appears to concern all windows, Buildcorp relied on the fact that the particular drawings did not include lines indicating “new sill reinforcement” on all levels of the building.

27. The drawing above and other TTW drawings clearly identified specific windows as requiring “[n]ew sill reinforcement”, specifying both the building storey and the direction the windows faced. For example, reinforcement was shown as necessary only for certain windows between floors 6 and 25 on the north-facing side of the building, depicted above. For the west-facing side, reinforcement was shown in a drawing to be required for windows between floors 10 to 25. The drawings do not indicate that every floor required windowsill reinforcement, nor do they indicate that steel reinforcement was required on any level other than level 25.

28. The importance of these drawings is considered further below.

29. Secondly, the Letter from North Sydney City Council dated 15 April 2019, which included approval for the “[r]eplacement of all windows to the apartments above entry level …” and “[r]epairs to brickwork surrounding the window frame that may be required …”. This document provides little by way of detail, but makes it clear that all windows must be replaced. It does not specify how or what strengthening work would be required and therefore does not assist.

30. Thirdly, a Brickwork Repairs Specification – Revision 3 dated 10 February 2021, prepared by TTW. This document states it is a “prescriptive specification for remedial works to the façades” of the building and that it “shall be read in conjunction with all other associated specifications, drawings, and other technical documentation which form part of the Contract documents.”

31. The “key external elements of the façades” requiring remedial works “covered” in the specification were listed as including, inter alia, crack repairs, the replacements of bricks, and “[s]trengthening to the existing wind post on level 25”. However, the specification had been obtained based only upon a “visual inspection”, and a “drone video and photographic survey”. The quantities were stated to be estimates only.

32. While an express requirement was to strengthen the level 25 wind post, it was further stated:

All drawings are to be read in conjunction with architectural drawings for the inclusion of additional miscellaneous steelwork that may not be shown on structural drawings but is necessary to install and complete the works.

[Buildcorp] is to allow for any steelwork required as may be necessary to complete the works as documented but not necessarily shown on the architectural and structural drawings.

33. This document expressly provided for consideration of all the other documentation, which emphasised the project was to remediate the façade and all windows which were at end of life. Buildcorp does not resile from its obligation to remediate the whole; the only issue is whether it is entitled to additional payment for specific works.

34. While the document indicates that Buildcorp was to “allow for any steelwork” that may not be drawn but is necessary to complete the works, I do not consider that this means that any steelwork not “expressly detailed” was included in the contract price, even though Buildcorp clearly had the responsibility to do whatever was necessary to complete the works.

35. Fourthly, “Annexure E – Principal’s Project Requirements (PPR)”, Revision 4 dated 17 December 2021 and prepared by Core Project Consulting (Annexure E). This described the “works associated with the remediation of external windows, doors and balconies”. The “Works” were stated to “include the design and construction of the following major components”:

1. Removal and Replacement of existing windows, including brick sill strengthening and weatherproofing…

7. Wall strengthening with steel posts for the Level 25 window supports …

36. Further, the “objectives of the [Owners]” were described in clause 1.4.2 as to have Buildcorp:

(a) design and construct the Works described in the preliminary concept design documentation; …

(d) deliver the Works which are fit for purpose …

(e) deliver all the things identified and shown in the drawings and specifications (which are listed in the annexures to the PPR).

To the extent that the drawings or specifications:

(i) are inadequate in accurately detailing the [Owners’] objectives; …

(iv) are not fit for purpose; …

[Buildcorp] must:

(vi) develop and advance the preliminary concept design;

(vii) specify the Works in accordance with the procedure set out in the Contract Conditions;

(viii) construct the Works … to achieve the [Owners’] objectives.

37. The “purposes” of the works were further described as “to undertake repair and maintenance works required for the building in order to address elements that have reached the end of their serviceable life, or are now safety risks … For these purposes, [Buildcorp] must design and construct high quality … works in accordance with the Contract, including … the PPR and its annexures, the preliminary design and tender documentation and the Contract.”

38. The “general obligations” of Buildcorp were to “[d]esign and certify the Works for construction”, and “construct the works”. Buildcorp’s “other obligations” included “carry[ing] out all work incidental to the provision of the Works, being work that is not explicitly described in the PPR or shown on the preliminary drawings but is necessary for the proper completion …”.

39. Again, I do not consider this document is relevant to what building elements were “expressly detailed”, but instead makes clear that Buildcorp was to remediate all windows, however necessary.

40. Fifthly, the Facade Performance Specification, 3 March 2021, Rev E prepared by TTW.

41. This is an important document in recording the parties’ intention that Buildcorp would be responsible for designing an appropriate way of remediating the façade and all windows.

42. The document recorded that “[e]xisting brick panels are overstressed and should be strengthened as part of the window replacement process”, and that “[a] number of brickwork panels, as noted on drawings SKO3 and SK04 were found to be overstressed when checked against the current masonry code AS3700 … for the wind loads required by the current wind code AS/NZS 1170.2”.

43. The document did not state that the drawings included all issues to be remedied. Again, various statements were made that indicated Buildcorp was required to create an appropriate design using the documents provided as a guide:

1. The specification was descriptive of “the minimum acceptable performance for the facade of this project” and represented “an indicative solution” only;

2. Buildcorp “shall assume all responsibility for the design, engineering, documentation, certification, purchase, fabrication, assembly, glazing, testing, installation and final cleaning of the facade systems described herein and shall satisfy all performance requirements”;

3. The designs attached to the Façade Performance Specification “show generic design principles and design intent only”;

4. Any attached drawing or sketch is “... a performance-based document and does not provide full description of the details required to complete the Works”;

5. Buildcorp “shall be responsible for providing all the necessary details, design certification and items required for full completion of the Contract Works, with provision for time and monetary allowances”;

6. At clause 2.3, that “the descriptions of the facade … are general and provided to aid [Buildcorp] with scoping the works”; and

7. Buildcorp’s designs needed to accommodate movement of the façade and structure under wind loads in such a way that the designs must “[p]rovide for deflections, displacements and other movements within the facade, or between the facade and the building, including movements caused by ambient temperature changes, wind loads, seismic loads, and structural movement due to dead and live loads and long term effects. The facade system shall accommodate these movements silently and without permanent deformation, reduction of performance, or other detrimental effects”.

44. This document again outlines the required outcome: that the whole façade and windows would be remediated to the appropriate standard. However, it did not expressly detail all the strengthening work that Buildcorp may conclude was necessary when it carried out its design.

45. Sixthly, Façade Inspection Report July 2018, Revision - R3 and prepared by TTW. This report was based on inspections in late 2017 and early 2018. The recommendations included the strengthening of windowsills because the “[e]xisting brick panels are overstressed and should be strengthened as part of the window replacement process. A strengthened sill should be designed by the window manufacturer to ensure compatibility”. The report included drawings indicating where there was defective brickwork and where “[windowsill] strengthening [was] required”.

46. Because of the age of the report and the then-found defects, I do not accept that the parties’ intention of including these documents was to “expressly detail” or limit the works to be carried out after the contract was signed in December 2021.

47. Seventhly, “Windows & Balcony Doors Assessment for Blues Points Tower” prepared by Rider Levett Bucknall NSW Pty Ltd dated 6 November 2015. The Assessment Report stated that there was evidence that “the external skin of brickwork has deformed and is cracking”. That statement was based on an inspection of only 30% of the façade by the authors of the Assessment Report. Further, the inspection and report were carried out and drafted in 2015, and could not have been understood to amount to a complete statement of the works included in the contract price at the time of formation.

48. Eighthly, GML Heritage Report prepared by GML Heritage on 3 December 2018, which was used in the Owners’ submission for council approval for works. It recorded that the building included original components that had “deteriorated to the extent that they were no longer safe or able to meet functional requirements”. This was expressly stated to include the windows “on all elevations”, as part of a “whole of building” program of works. Further, the “cement-tiled [windowsills] will be removed and replaced with new aluminium sub-sills”. This document is too old to be relevant to the work expressly detailed in the contract.

49. Ninthly, a letter from Harry Seidler and Associates to North Sydney Council dated 30 November 2018, used in support of the Owners’ application for council approval. That letter indicates that:

1. “Following exhaustive investigations by multiple façade consultants it has been concluded that the existing original windows … are no longer suitable … and need replacement. The marine environment has corroded the raw aluminium frames, leading to leakage, deterioration of the hardware, and frequent breakage of the … glass.”

2. “Frames will be chosen … to retain the original appearance but will need to satisfy current codes for structural wind loading and water penetration.”

3. “The concrete tile [windowsills] that have deteriorated and are at risk of falling from the building are to be removed …”.

50. This letter indicated that all parts of the windows and the façade that needed replacement would be replaced. It is obvious that the deterioration would have continued after November 2018 until December 2021. The letter does not expressly detail what work was required to achieve the Owners’ desired outcome.

Conclusion as to scope within contract sum

51. As the description above of the RFQ documents demonstrates, Buildcorp was being provided with a collection of expert reports and opinions prepared for the Owners over about six years, from 2015 to early 2021. The common theme throughout was that the windows and façade of the building required extensive remediation, including the replacement of all windows. The contract’s purpose was for Buildcorp to design all necessary remedial works using whatever methodologies it considered appropriate to ensure the safety and longevity of the external components of the heritage building.

52. Most documents in the RFQ drew Buildcorp's attention to the problems in the building in a general sense. Those documents did not purport to define and limit the full extent of the works to be undertaken. Buildcorp's scope of works was to design and construct the works to achieve certain warranted performance outcomes:

2.2 … (iii) [Buildcorp] ha[d] examined the preliminary design documents … and warrants that such [documents] are suitable, appropriate and adequate for the stated purpose of the [PPRs];

(iv) [Buildcorp] ha[d] examined all information supplied or made available … by or on behalf of the [Owners] … and ha[d] drawn its own conclusions as to the supplied information whether [it] satisfies the [PPRs] and whether [that information] should properly form part of the preliminary design documents and design documents;

(v) [Buildcorp] [would] carry out and complete [all tasks necessary to design and specify the [work required by the contract] including preparation of the design documents and developing the preliminary design documents]; …

53. Therefore, Buildcorp was required to ensure the preliminary design documents were suitable to achieve the Owners’ PPRs and amend or improve the design where necessary.

54. However, the issue here is what scope of works was “expressly detailed” in the RFQ documents that led to and was included in the contract price.

55. For the following reasons, I accept Buildcorp’s submission that the “express detail” included in the contract price ought to be taken from the pages of the most recent TTW drawings and descriptions, given that:

1. only particular windowsills were drawn as needed strengthening; and

2. only the level 25 windows were drawn and referred to as needing strengthening by the addition of "wind posts”.

56. At the time of formation, neither the Owners nor Buildcorp knew the exact extent of the remedial work that would be required upon the removal of windows and doors. However, Buildcorp was required to provide a contract price in its tender without complete knowledge. That tender could only have been based on the most detailed documents, which were the 2021 TTW drawings and descriptions; they were the most recent iterations of expert opinion as to the required work.

57. While those drawings were noted to be “not to scale” and with “indicative” dimensions, TTW set out the sill reinforcement works it considered were definitely required. The drawings were specific, clearly delineating certain windows requiring works and, by implication, windows that did not require work. I consider that to the extent works were required in respect of windowsills not expressly depicted, those works were objectively intended to fall within the special condition, such that Buildcorp would be entitled to additional payment.

58. In resisting this conclusion, the Owners placed emphasis on the stipulations in the Façade Performance Specification that the “drawings set out the minimum acceptable performance for the [façade] of this project” and represented an “indicative solution for [Buildcorp’s] works” (emphasis added). I consider such references, given the context of the Special Condition, indicated that further works required to satisfy the PPRs would fall within the special condition. While Buildcorp was required to assess and design appropriate remediation works and then construct them, the special condition ensured that it was paid for any works necessary to complete its obligations, of which it was not aware at the time of formation.

59. The Owners’ preferred construction, whereby any work relevant to the replacement of the windows and doors was included in the contract price, would have placed on Buildcorp the whole risk of the cost of the completion of the façade upgrade on the heritage building, where the precise works to achieve the PPRs were unknown prior to Buildcorp’s work commencing.

60. I consider that the special condition must have been intended to provide a mechanism for Buildcorp to be paid for those building elements, of which no one was aware at the time of formation. This gives commercial sense to the bargain. In a similar way, the parties did expressly provide in clause 26 for possible additional works where a “latent condition” on the site or its near surrounds was discovered after formation. It appears that the special condition is an equivalent express provision for latent or additional problems with the façade, that were not readily apparent at the time of formation.

61. I do not accept the Owners’ submission that the only building elements that were not expressly detailed, and therefore caught by the special condition, were those not depicted or referred to at all, such as the roof. Clause 37 allowed the possibility of any variations to the scope of works. If the Owners had determined to have work done on the roof, it would have triggered the clause 37 process. In that situation, the special condition would have had no work to do in addition to clause 37. As a general principle, contractual clauses “should be interpreted in a way which gives them an effect rather than a way in which makes them redundant”: XL Insurance Co SE v BNY Trust Company of Australia Ltd [2019] NSWCA 215 at [72] (Gleeson JA, Bell P and Emmett AJA agreeing), quoting with approval AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985 at [13] (Ball J, as his Honour then was). I consider that the Owners’ construction would be inconsistent with an interpretation “intended to produce a commercial result”: Mount Bruce at [51] (French CJ, Nettle and Gordon JJ); see also Strike Australia Pty Ltd v Data Base Corporate Pty Ltd [2019] NSWCA 205 at [58] (Bell P, as the Chief Justice then was).

62. Therefore, where building elements had not been depicted or expressed in the TTW drawings and documents, but were necessary for the completion of the window replacement and façade remediation, they fell within the special condition.

Buildcorp’s “variation” claims

63. During the detailed design phase, Buildcorp’s engineers advised that particular works would be required to achieve the PPRs:

1. Claim HCV006. Buildcorp strengthened every windowsill, even though some engineer sketches included in the RFQ documents only depicted window strengthening on some windows.

2. Claim HCV007. Buildcorp strengthened every façade wall with steel posts adjacent to the window openings between the façade window brick courses underneath the windows, even though some RFQ documents only included sketches or descriptions of steel posts on level 25.

64. When the detail of Buildcorp’s two claims are considered, I consider that the work involved was necessary to satisfy the Owners’ PPRs, but had not been “expressly detailed”.

65. HCV006 recorded that as part of its design process, its engineers assessed the existing condition of the masonry windowsills spandrels as non-compliant to relevant codes. I accept that strengthening all the windowsills was beyond the strengthening expressly detailed in the TTW drawings, even though it was necessary to complete the Owners’ PPRs. Therefore, the works fell within the Special Condition.

66. HCV007 recorded that Buildcorp arrived at a “fully compliant design relating to the new door and window installation”, including by undertaking a wind analysis, investigations through deconstruction of brickwork around existing windows, and engineering. It was then stated:

As per the design intent [engineers] designed a strong [windowsill] extrusion to deal with the overstressed brickwork panels … The reactions onto the building of window sub-sill and the window sub-head, via the lintels, were assessed to exceed the capacity offered by the existing double leaf masonry wall.

Our proposed solution is the introduction of a vertical steel section embedded in the existing masonry necessary to satisfy the structural load transfer requirements. The addition of the steel post will offer edge support to the existing masonry and augment the loading capacity of the existing masonry to meet the current code requirements.

67. Therefore, Buildcorp understood that the steel works were necessary for its design to meet current code requirements. Buildcorp stated that the additional work and “transfer loads could not be reasonably anticipated by a competent contractor at the time of tendering without comprehensive investigations, calculations and full design by a structural engineer”. While Buildcorp knew it was undertaking to design and construct works that would meet the necessary code requirements and warranties, I do not accept the cost of the works not expressly detailed by the Owners’ experts was at Buildcorp’s risk.

68. Therefore, Buildcorp is entitled to a remedy that gives effect to its entitlement in the special condition to be paid by the Owners as a “variation”.

Must Buildcorp comply with clause 37 in addition to the Special Condition?

69. The special condition provides that if Buildcorp “certif[ied] or modif[ied] any such [building elements not expressly detailed in the RFQ documents] in order to complete the WUC [work under contract ie agreed scope of works]” then it would be entitled to payment by the Owners “by instruction of a variation”.

70. The Owners submitted that even if the works claimed fell within the special condition, there was no utility of the declaration sought by Buildcorp, which was:

A declaration that [Buildcorp] is entitled to instruction of a variation under [the Special Condition] for carrying out the work described in [Buildcorp’s] claims [HCV006] and [HCV007].

71. The Owners’ argument was that Buildcorp could not obtain an “instruction of a variation” pursuant to the special condition, unless it had also satisfied the clause 37 requirements for a variation.

72. Clause 37 mandated that:

1. Neither party could vary the work under the contract, except as directed in writing to do so by the Superintendent (cl 37.1);

2. A direction by the Superintendent to undertake work already required under the contract would not give rise to a variation (cl 37.1);

3. No direction by the Superintendent would constitute a direction under cl 37.1, unless it was in writing and expressly stated to be a cl 37.1 direction, which was a “condition precedent” to Buildcorp having any claim for a variation arising out of or in connection with any such direction (cl 37.1);

4. If Buildcorp considered that a direction by the Superintendent to undertake work was a direction requiring it to carry out a variation, but the Superintendent had not expressly identified that in writing as a direction under cl 37.1, Buildcorp was required to give the Superintendent notice in writing within “5 business days of the direction” that it considered the said direction to require it to carry out a variation (cl 37.5); and

5. If Buildcorp failed to give the 5 business days’ notice required by cl 37.5, Buildcorp would “not be entitled to make any claim against the [Owners] arising out of, or in any way in connection with the direction”.

73. Clause 37 provided that to obtain payment for a claimed variation, Buildcorp needed to have given notices for each claimed variation in accordance with clause 37.5, which it had not done.

74. Further, clause 42 provided for dispute resolution processes. Clause 42.1 anticipated in terms contemporaneous resolution of a dispute, including as to a variation, stating that "[d]espite the existence of a dispute, the parties shall … continue to perform the Contract".

Proper construction of the Special Condition and relationship to clause 37

75. The special condition does not expressly state that clause 37 must be satisfied. However, the word “variation” is italicised, indicating that the definition of “variation” in clause 1 applied, which was the meaning in clause 37. Therefore, objectively, the special condition contemplated at least some of the operation of clause 37.

76. Buildcorp did not frame its case as requiring compliance with clause 37.5, however, it did indicate it considered the superintendent gave a “direction” when Buildcorp’s claims were rejected. In its list statement, it outlined its case:

1. The scope of Buildcorp’s obligation was taken from the Principal’s Project Requirements and was limited to:

1. Removal and replacement of existing windows, including brick sill strengthening and weatherproofing (cl.1.2.1); and

2. Wall strengthening with steel posts for the level 25 window supports (cl.1.2.7).

2. Any works to and concerning the windows beyond the descriptions are extras (variations) entitling Buildcorp to additional payment.

3. An alleged “direction” concerning HCV007 was given on 21 March 2023, but without directing a variation. Instead of Buildcorp giving a notice within 5 business days, on 4 April 2023, Buildcorp issued a Notice of Dispute to the Superintendent.

4. An alleged “direction” concerning HCV006 was the Superintendent's rejection of the HCV006 claim on 17 April 2023. Following its rejection, Buildcorp was required to give 5 business days’ notice from that date that it considered it a direction. Buildcorp sent an email on 26 April 2023, being 2 days later than 5 days, stating that HCV006, “… is a valid variation and needs to be paid for in its entirety …”.

77. It was not contested that Buildcorp carried out the alleged variation work “to complete the WUC”.

78. I do not accept that the special condition requires compliance with clause 37, despite the use of “variation” for the following reasons.

79. First, the special condition contains elements that are not on all fours with clause 37:

1. There is no language of “instruction of a variation” in clause 37;

2. Clauses 37.1, 37.2, 37.3 and 37.5 refer to the Superintendent giving a “direction” of a variation; and

3. The variations in clause 37 are variations to “WUC”.

80. The purpose of the special condition was to ensure a distinction between the WUC, in relation to which the contract price applied, and other work that was necessary to complete the WUC that had not been included in the contract price, but yet was part of Buildcorp’s responsibility under the contract. Therefore, the operation of the special condition was to trigger an entitlement to payment, rather than expanding the WUC by way of variation.

81. Secondly, the special condition does not specify who gives the “instruction of a variation”. Instead, it appears that the special condition requires a demonstration, as a matter of fact, that the additional building elements necessary to complete the WUC have not been “expressly detailed” in the RFQ documents, and upon such a factual determination, a “variation” has been established and payment is required. I do not accept that the special condition amounts to a request by Buildcorp for a variation for its convenience pursuant to clause 37.3.

82. While the special condition does not indicate how the additional work is to be paid, I consider clause 37.4 applies to give effect to the use of “variation”. The special condition imposes an obligation on the Superintendent to price “each variation”, without indicating they are limited to those that arise pursuant to other subclauses in clause 37.

Appropriate remedy

83. The substance of the declaration sought by Buildcorp concerns Buildcorp’s entitlement to further payment for HCV006 and HCV007 based on the proper construction and operation of the special condition.

84. Here, a declaration would be determinative as to an ultimate or decisive fact: Lohar Corp Pty Ltd v Dibu Pty Ltd (1975) 1 BPR 9177 at 9179 (Hutley JA). It was not suggested that a declaration along the lines of that sought by Buildcorp would be hypothetical; or it would not produce some foreseeable consequence(s) for the parties: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 (Ainsworth) at 582 (Mason CJ, Dawson, Toohey and Gaudron JJ).

85. However, the specific declaration sought by Buildcorp does not provide a complete answer, because it is unclear from the declaration how Buildcorp is to be paid for the disputed works.

83. The fact that the special condition refers to “variation”, as defined in clause 37, means that clause 37 provides the means of calculating the value of the additional works, being an agreed valuation methodology.

84. This Court has a largely unfettered (but not unlimited) discretion as to whether declaratory relief ought be ordered: Ainsworth at 581-582. This is consistent with s 63 Supreme Court Act 1970 (NSW), which requires the granting of all appropriate relief to deal with all matters in dispute. Against this background, and particularly in circumstances where Buildcorp sought “[s]uch further or other orders as the Court considers appropriate”, it is appropriate to make a declaration differing from that precisely sought by Buildcorp.

85. I consider it appropriate to declare that the claims for the works identified fall within the operation of the special condition and ought to be treated as variations within the meaning of clause 37.4, for the purposes of determining the appropriate payment sum.

86. Therefore, it is necessary to require the Owners to specifically perform clause 37.4 of the contract to have the claims priced in accordance with the contract.

Orders

90. The Court makes the following orders:

1. On or before 4pm on 20 June 2025, the plaintiff serve on the defendant short minutes of order intended to give effect to these reasons for judgment together with the orders it proposes in relation to costs and any necessary explanation;

2. On or before 4pm on 23 June 2025, the defendant:

1. if it agrees with the plaintiff’s short minutes of order, notify the plaintiff and my Associate of their agreement, in which case the orders will be considered in chambers if appropriate;

2. if it does not agree with the plaintiff’s short minutes of order, serve on the plaintiff a document (which may include alternative short minutes of order) setting out the matters on which it disagrees and provide copies of the plaintiff’s short minutes of order and their document to my Associate, in which case the matter will be listed, initially for directions, at 9:30 am on 25 June 2025, or such other date as is agreed with my Associate, to deal with all outstanding issues.

**********

Decision last updated: 17 June 2025