Cardinal Constructions Pty Ltd v Campbell - [2010] WADC 8

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: CARDINAL CONSTRUCTIONS PTY LTD -v- CAMPBELL [2010] WADC 8

CORAM: WAGER DCJ

HEARD: 1-4 DECEMBER 2009

DELIVERED : 3 FEBRUARY 2010

FILE NO/S: CIV 2670 of 2008

BETWEEN: CARDINAL CONSTRUCTIONS PTY LTD
Plaintiff
AND
DAVID JAMES CAMPBELL
Defendant

Catchwords:

Breach of contract - Building dispute - Whether non-payment for variation is a breach of an essential term - Essential term of the contract - Repudiation - Damages

Legislation:

Nil

Result:

Plaintiff's claim allowed in the sum of $39,934.84
Defendant's counterclaim dismissed

Representation:

Counsel:

Plaintiff: Mr R Shaw
Defendant: Mr S Ellis

Solicitors:

Plaintiff: Lavan Legal
Defendant: Pilley McKellar Pty Ltd

Case(s) referred to in judgment(s):

Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Douglas v Cicirello [2006] WASCA 226
Duncan and Blundell (1820) 3 Stark 6
Shevill & Anor v The Building Licensing Board (1982) 149 CLR 620

WAGER DCJ: In early July 2007 the plaintiff, Cardinal Constructions Pty Ltd, a builder, engaged the defendant, Mr David Campbell, a ceiling fixer, to carry out the ceiling fixing and some wall cladding work on the building the plaintiff was constructing in Braid Street, East Perth. The Braid Street construction is a three‑storey commercial apartment building with three commercial units on the ground floor and nine two‑storey apartments each spanning the first and second floors.
The contract was for the sum of $86,400 inclusive of GST. Three progress payments were made of $25,000 each. The payments were made in early July and mid July and on 24 August 2007, (being a total of $75,000). On 20 September 2007 the defendant sought payment of an additional sum of $20,289 that he alleged was due for variations performed on the contract. However problems had arisen on site. The plaintiff alleged that the defendant was too slow and had not completed work consistent with the progress payments made and there were issues in relation to the quality of some of the work that the defendant had performed. The plaintiff refused to pay the fourth invoice because the plaintiff had already paid approximately 88 per cent of the agreed contract price by progress payments to the defendant.
The plaintiff claims that at the end of September 2007 the defendant stopped working on the contract when he and his workers stopped coming to the site and that despite the plaintiff's efforts to contact the defendant by telephone and in writing to request that the defendant return to site, the defendant refused to return.
The plaintiff now claims that by his action in refusing to return to work the defendant repudiated the contract thereby requiring the plaintiff to make alternative arrangements to finish the contract.
The defendant claims that the plaintiff, by refusing to pay the defendant for agreed variations to the contract and by making it very difficult for the defendant to perform his obligations under the contract, breached an essential condition of the contract justifying the defendant's repudiation. The defendant claims that the variations itemised in his unpaid invoice dated 20 September 2007 together with other variations claimed on 13 June 2008 are for work performed in addition to the contract and that all of the variation sums should have been paid.

The terms of the contract

In June 2007 Mr Campbell started work for the plaintiff at a property in Cargill Street. When the plaintiff needed a contractor for ceiling fixing and wall fixing for the Braid Street construction, the defendant was one of approximately four to whom plans and specifications were supplied in order for a quotation to be made.
It is agreed that the plaintiff's supplied drawings A15, A02 ‑ A08, FA10 and DA10 (Exhibit 199.1 ‑ 199.10) to the defendant to assist with the quotation. A15, a section drawing, contains the footnote:
"Contractor to check all dimensions on site prior to commencing construction. Do not scale from this drawing. Use given dimensions."
The detailed drawings with dimensions referred to (A05 ‑ DA10) contain dimensions and details of the work to be performed. Each plan also contains the same note advising the reader not to scale from the drawing but to use the given dimensions.
Part of the scope of work that the plaintiff claims it anticipated would be covered by the quotation and that would be performed as part of the ultimate contract is a feature light trough in the main entry to the Braid Street construction. Drawing A05 shows a suspended feature ceiling with dimensions however it does not specify a light trough feature. The plaintiff claims that details of the light trough, being plan E01 (Exhibit 198) were provided to the defendant before the defendant quoted for the contract. The defendant denies that he received E01 until after the contract was entered into and claims that he therefore did not include a light trough in the quote. The defendant claims that the details shown and the specifications listed on E01 are variations to the contract.
Mr Urbani, the director of the plaintiff and a registered builder with 24 years experience, says that Mr Campbell asked for the measurements relating to the feature ceiling shown in A05 and says that his daughter, who was the Braid Street designer, put the sizes of the light trough on E01. Mr Urbani says that he then gave E01 to the defendant. Mr Urbani says at T 26:
"It must have been probably a couple of weeks after this that they commenced work."
No other evidence was called by the plaintiff in relation to the date of the provision of EOI, however the defendant agrees that he was provided with A05 (Exhibit 199.5). A05 shows a feature ceiling and dimensions for soffits which, according to the defendant's evidence, are when one ceiling runs down and into another ceiling but on different levels. The defendant describes the light trough as differing from the feature ceiling shown in A05 as follows (T 223):
"You install a flat ceiling. You come down with framing into whatever, either a round circle or square box etcetera. And then you actually come out and up. So the actual light sits in."
In cross‑examination the defendant says that the feature ceiling with soffits was a very different construction from the installation of a light trough, specifically because the light trough requires two sections of a ceiling to be installed, one on top of the other.
It was submitted by the plaintiff that a prudent ceiling fixer, having received a plan that showed a feature ceiling would ask for further dimensions of the feature ceiling. I do not accept this. A05 shows the dimensions for a feature ceiling. No other plan was required in order to quote on a feature ceiling with soffits.
The defendant provided a quotation on 5 July 2007 (Exhibit 50) that relevantly states:
"Works to be completed as follows.
Unit 1‑9 suspended ceilings supplied.
Fix flush and sanded ready four (sic) paint.
Supply aquastic (sic) gyprock walls to 378 square where nessery (sic).
Supply suspended ceilings to commercial units 1 – 3.
Fix flush, sand ready four (sic) paint.
Price includes bulkheads and surfeits (sic) in Maine (sic) lobby and threw out (sic).
Supply incerlation (sic) to ceilings and walls.
Price $78,545.46.
GST $ 7,854.54.
Total $86,400.00."
The contract signed by both parties (Exhibit 53) relevantly states:
"Confirmation of acceptance by the principal contractor of the trade contractor's quote dated 5/7/07 …
Supply and install all suspended ceilings to all appartments (sic) inc commercial units as quoted (install and supply of extra acoustic gyprock if reqd at $30/m.
$86,400.
Progress claims as approved by builder.
An amount due to be paid within 14 days after the trade contractor gives the principal contractor written notice that the stage is complete."
The original quotation refers to the soffits in the main lobby consistent with the feature ceiling shown on A05 (Exhibit 199.5). There is no mention in the written contract of a light trough. I am not satisfied that the plaintiff has proven that the defendant had E01 or was aware of the light trough at the time of signing the contract. There is no reason why the defendant would have needed to look beyond A05 and there is no written reference to a light trough. I find that a light trough is not part of the contract document.
Although both parties agree that there were some discussions at the time when the contract was signed in relation to the performance of the contract, neither party agrees to the substance of the discussions. Counsel for the plaintiff objected to evidence of conversations that allegedly altered or impacted on the party's obligations pursuant to the signed written contract. Counsel for the defendant submits that the intention or effect of the written contract was not to have all of the conditions of the contract covered in writing and that the discussions between the parties should be considered to be part of the quoting process. The defendant submits that reference to "as quoted" in the contract incorporates the plans provided (A05 ‑ DA010, Exhibit 199.1 ‑ 199.10) and any conversations that occurred between the parties in relation to the quotation process. The defendant submits that discussions between the parties before the contract was signed give the commercial context to the document and form the factual matrix upon which the quote was originally based.
I accept that there may be some cases in which evidence of conversations may be of assistance in the ultimate interpretation of the written contract however this is not such a case. Both parties accept that documents A05 ‑ DA010 (Exhibit 199.1 ‑ 199.10) were provided as part of the quotation process and I therefore accept that the quotation is based on A05 ‑ DA010 (Exhibit 199.1 ‑ 199.10), however because the parties cannot agree on the nature of any conversation that occurred prior to the signing of the contract and neither party kept any independent record of a conversation or note of any alleged conversation there is no evidence of conversations that assist in the interpretation of the contract.
I find that the contract should be interpreted only in light of the plans A05 – DA010 (Exhibit 199.1 ‑ 199.10) provided and the original written quotation and the signed contract that adopts it.

Scott Schedule – the variations to the contract

I have been greatly assisted in this trial by counsel providing a combined Scott Schedule in relation to variations claimed and by the viewing of the Braid Street site that took place on the first day of the trial.
The variations fall into two categories, those that are the subject of a claim made by the defendant to the plaintiff on 20 September 2007 that were not paid within 14 days and that are supported by documentation (Exhibit 14) and the claims that were not made until 13 June 2008, being eight or nine months after the work was allegedly performed and that were itemised in correspondence from Pilley McKellar Pty Ltd, construction lawyers, on behalf of the defendant. No invoices had ever issued in relation to the second group of variations nor had there been any indication by the defendant that he would invoice the plaintiff for the second group of variations.
The variations claimed are as follows.

Signed variations – 20 September 2007

1. Dry walls to room – claim for $8,232.40 for supply, fix and fit dry wall

The plaintiff agrees that the work was requested as a variation but says that the payment is not due and owing because the material used did not stick to the walls and fell off and rectification work was never completed by the defendant. In cross‑examination at T 184, Mr David Campbell confirms that he was aware of difficulties in attaching gyprock panels to tilt up walls because of the surface of the tilt up wall panels. A bondcreting compound is used on the tilt up panels in the production process so that the tilt up panels do not stick together when manufactured and stacked. He said:
"You should be more than aware of what you can put on it and what you can't. I have been told you can sandblast them back. You can actually pressure clean them, you know, strongly and it will adhere. Like get rid of the film."
Mr Campbell knew that the tilt up panels had not been prepared using any of the methods he suggested in evidence but he proceeded to stick the gyprock to the panels without the preliminary step of panel preparation having taken place because he was asked by Mr Urbani to attach the panels and to get the job done. The issue of dry walls coming off was never discussed by him with Mr Urbani. Despite his knowledge of the likely failure of the adhesion the defendant did not advise Mr Urbani of his concerns.
Mr Sidney Campbell who worked for his brother on the Braid Street site says he would have had conversations about applying gyprock to tilt up panels with Mr Urbani but he cannot recall any specific conversations. He recalls words such as "can we get on with it" and that "whatever way is the easiest, get it done" being spoken by Mr Urbani in relation to everything. In cross‑examination, Mr Urbani denies ever having a discussion with Mr Campbell about the difficulties of attaching the gyprock sheets to the tilt up panels without prior preparation and denies that he was ever advised that gyprock would not stick to the tilt up panel surface.
Both Mr David Campbell and Mr Sidney Campbell are experienced ceiling fixers who are well aware of the need to prepare the tilt up panels. The defendant could have included a component for wall preparation in the variation in respect of dry walling and therefore completed the task in a workmanlike manner.
The defendant did not raise the issue of potential failure with Mr Urbani at all when, being a tradesman who knew the process would be unsuccessful, he had an obligation to do so. It is trite law that a person supplying work and materials warrants they will be of good quality and reasonably fit for the purpose for which the other party is using them. In "Hudson's Building and Engineering Contracts" 11^th ed at 4.077, reference is made to the decision of Duncan and Blundell (1820) 3 Stark 6:
"Where a person is employed in a work of skill the employer buys both his labour and his judgement; he ought not to undertake the work if it cannot succeed and he should know whether it will or not; of course it is otherwise if the party employing him chooses to supersede the workman's judgement by his own."
Mr Sidney Campbell's evidence does not support the proposition that Mr Urbani was aware of the problem. It may be that Mr Urbani's attitude was to do whatever was the easiest but that does not mean that he wanted the job to fail. I accept on the evidence that the gyprock did not stick to the tilt up panels and that the likely failure was known to the defendant and that the rectification process continued after the defendant had left the site. The variation is not allowed.

2. Eaves lining - $8,228

This is an agreed and completed variation.

3. Bulkheads - $2,821

Although the contract included the installation of bulkheads, generally, the plaintiff signed this variation. The plaintiff claims that the bulkheads were not completed however the defendant says that the work was completed. Mr Urbani was effectively an owner‑builder who had a greater interest than most in ensuring that he only paid for work that was actually performed. I accept Mr Urbani's evidence that he was on site on a regular basis because he was living next door. I accept that he would not have agreed to the variation had he seen that the work had not been performed. The variation is allowed.

4. Re‑fix ceiling grid - $968

The plaintiff agreed to the variation but subsequently disputed the quantum. There has been no evidence specifically in relation to why the quantum is inaccurate and I accept that installation of air‑conditioning may have compromised the grid. The variation sought is allowed.

Variations claimed on 13 June 2008

(a)(b) Supply of better fix clips to walls and 13 millimetre gyprock to cover services (16 metres square supplied) and unit 8 (7.8 metres square supplied) - $1,003.20 and $488.40

It is not disputed that it may have been the weight of the gyprock on the clip that led to the rattle within the walls. Mr Campbell says that he obtained new clips and stripped the walls down at his cost so that they were suitable for tiling and also waterproof. The plaintiff says that if the clips were defective then it was for the defendant to claim against the supplier, not for the plaintiff to carry the burden. The plaintiff is entitled to have contracted work performed to a reasonable standard. If the clips failed due to the weight of the gyprock that was usually hung in a construction of this type then that was a matter that should have been known by the defendant. I find that it was a requirement of the contract that the defendant fix these defects. The variations are not allowed.

(c) Supply and cut steel on 25 August 2007 for ceilings until ceilings were installed in unit 7, stores 8, 10 and 11 and store 9 as supplied - $1,320

The terms of the contract did not extend to the installation of ceilings in the apartment storerooms however Mr Urbani claims that the work was performed by Formex who completed the defendant's contract and related work. The invoices from Formex provide very little information in relation to the work that was actually performed and it is therefore not clear whether Formex completed this work or whether the work was completed by the defendant. The defendant however did not raise this claim for a period of eight or nine months. No supporting evidence such as invoices for materials specifically supplied for the purpose or video footage of storeroom ceilings or photographs of the work completed was led by the defendant to confirm that the work was performed. I am not satisfied that the work was performed. The variation is not allowed.

(d) Installation of troffer ceiling in main entry - $907.50

For the reasons I have already outlined, the installation of the troffer (trough light) ceiling was not part of the contract. The defendant's videotape of the Braid Street site taken on 10 October 2007 by the defendant (Exhibit 184) shows that only the troffer ceiling frame was in place on the day when the defendant left site. Fixing and finishing of ceiling panels to the trough light and finishing to include the electrical work was still required. I accept that this work was ultimately performed by Formex. As stated I find that the contract included a component for the installation of a feature ceiling requiring soffits. I am not satisfied that the cost of part installation of the ceiling would have exceeded the total cost of the completed installation of the feature ceiling with soffits. A credit would have been owing to the plaintiff. The variation is not allowed.

(e) Supply of suspension rods - $187

The defendant says that suspension rods were left on site when the defendant left site. I accept that the plaintiff did not ask for the suspension rods nor did Mr Urbani know that the rods were left on site. The variation is not allowed.

(f), (g), (h) Partly supply and fit suspended tile ceiling with acoustic tiles to tenancy 3, 2 and 1 - $6,312.60, $3,969, $4,544.10

It is agreed that the plaintiff had not decided on the precise type of ceiling to be installed in the three commercial units at the time when the contract commenced. The two options for ceilings in the commercial areas were for a suspended ceiling or a tiled ceiling. The tiled ceiling is the cheaper option. The defendant's quote included "supply suspended ceilings to commercial units 1, 2, 3 fix, flush, sand ready for paint". For the reasons stated I find that this quotation was adopted in the signed contract. Although the precise details of the ceilings had not been settled, I find that from the words of the contract it was always the plaintiff's intention that the commercial unit ceilings were to be part of the contract and that the contract clearly sets out that that is the case. The installation of tiled ceilings may have been a cheaper option. This may have provided the plaintiff with a contract credit. I do not have any precise evidence in relation to the quantum of credit however the three variations sought are not allowed.

(i) Supply and fit manholes to nine apartments - $841.50

In cross‑examination Mr David Campbell agreed that it was normal practice to put a manhole in a ceiling of a residential unit. The installation of manholes should have been included in the contract consistent with normal practice. The variation is not allowed.

(j) Supply 7.6 metres blueboard, fix and flushed bulkhead over stairwell windows - $1,092.30

The supply of blueboard and fixing and flushing the eaves over stairwell windows was accepted as a variation to the contract by the plaintiff. The proposition was put to Mr Campbell in cross‑examination that when the bulkheads and eaves for the stairwell windows were put in there would have been a gap had the blueboard not been installed at the same time. Although the defendant did not claim a variation for the blueboard at the time of installation, the blue board variation is directly related to the approved variation for eaves lining (variation 2). The invoice for eaves lining dated 20 August 2007 related to "price to supply, fix, flush eave linings (sic) in aqua check Bord (sic) on syclonic (sic) battens all finished and sanded. The price for 115 square metres at $65 per square is $7,475 (plus GST) being $8,228". The invoice for variation 2 does not refer to blueboard. I do not accept that the supply of blueboard was part of variation 2. The variation is allowed.
The plaintiff also claims that the sum charged per metre for blue board is excessive and that the charge of installation for blueboard per metre should be $30 per metre square as opposed to $135 per metre square. Both parties agree that four kinds of gyprock were required in relation to the Braid Street contract, being acoustic gyprock with installation, aqua check for wet areas, dry walling and the placing of gyprock directly on battens. Mr Urbani says that prior to the contract being signed, the defendant agreed to carry out all additional gyprocking works at a cost of $30 per square metre. Mr Urbani has written $30 per square metre on a copy of the defendant's original quotation document (Exhibit 51), however these words are written directly opposite the reference to acoustic gyprock on the quote. The signed contract (Exhibit 55) refers to the installation and supply of extra acoustic gyprock if required at $30 per metre. There is no reference in the written contract to an agreement in relation to additional gyprock of other types. The defendant denies that there was ever an agreement that he would supply and install all forms of gyprock at $30 per square metre. I do not accept that there was a verbal agreement in relation to a fixed price of $30 per square metre for all types of gyprock. I accept the evidence that other types of gyprock may have cost more than acoustic gyprock and that it would therefore be inappropriate to have one fixed price. The sum allowed for the variation is $1,092.30.

(k) Supply 10 millimetre gyprock to bulkheads - $442.86

This variation claim relates to the supply of 10 millimetres of gyprock to bulkheads over the stairwells at a cost of $55 per square metre. The plaintiff claims that it was part of the defendant's contractual scope of work and that an amount of $30 should be claimed. For the reasons I have outlined in (j), I allow this variation for the sum claimed.

(l) Supply x "angle beading" - $177.14

The defendant describes the beading as providing a shadow or a border to the ceiling. Mr Urbani cannot recall if he directed that the work be carried out. I accept that the work was carried out and that the amount claimed was reasonable. The variation is allowed.

(m) Supply and fix clips to en suite wall with battens – 28 millimetres over surfaces and 13 millimetres aqua check board (57 metres squared supplied) - $3,448.50

The defendant claims that the variation applies to all of the nine apartment bathrooms and that the work was not part of the contract. The contract does not specify the provision of aqua check, nor is aqua check referred to in the quote adopted by the contract. The defendant's video of site taken on 10 October 2007 (Exhibit 184) shows that the bathroom of residential unit 5 had not been completed. The defendant states, however, that the walls were subsequently finished by a worker. The plaintiff claims that it is normal building practice for a contractor to supply aqua check gyprock to wet areas and therefore the provision was part of the contractual scope of works. In cross‑examination the defendant agrees that the total meterage of all gyprock he installed was approximately 447 square metres. Only approximately 232 square metres of the installed gyprock was acoustic gyprock and the contractual allowance for acoustic gyprock was 378 square metres. 88.3 square metres of waterproof gyprock was ultimately installed by the defendant. Given that the contractual scope of work included 146 square metres of acoustic gyprock at $30 per metre that was not provided (being a sum of $1,898), this sum should be deducted from the variation that is otherwise allowed. The variation is allowed in the sum of $1,550.50.

(n) Change wardrobes because of air‑conditioning variation in unit 4 - $302.50

I accept that the defendant was directed by the plaintiff to change the height of a ceiling in unit 4 because of an air‑conditioning variation. Three hours at $55 per hour is reasonable. A variation of $302.50 is allowed.

Repudiation of the contract

A right to terminate a contract arises if the breach constitutes repudiation. Such a breach does not automatically terminate the contract, rather it confers an elective right of termination on the innocent party (see Cheshire & Fifoot's "Law of Contract", 9^th (Aust) ed at 21.8).
Repudiation consists of a manifestation of unwillingness or inability to perform the contract, in substance or at all, before or at the time when performance is due. Breach of a contract by repudiation occurs when a party evinces an intention no longer to be bound by it, or to fulfil it only in a manner substantially inconsistent with his obligations (see Shevill & Anor v The Building Licensing Board (1982) 149 CLR 620).
Termination of a contract without justification amounts to repudiation entitling the other party to accept the termination of the contract and to sue for damages (see Cheshire & Fifoot's "Law of Contract", 9^th ed, 21.11 and 21.12 generally).
Although the defendant says that he was held up by the plaintiff's delays on site, that the site was dirty, that working conditions were difficult and that the plaintiff insisted that the defendant continue to perform variations, it was the non‑payment of the defendant's invoice for variations dated 20 September 2007 that the defendant claims, breached the contract and therefore entitled him to end the contract and to leave the site without completing the scope of work.
The plaintiff says that the invoice for variations dated 20 September 2007 was not paid because the defendant had already been paid approximately 88 per cent of the contract sum relevant to the work he was to perform on the contract but only approximately 50 per cent of the work or less had been performed. The plaintiff claims that the defendant and his workers stopped turning up on site in late September 2007 and that, despite oral and written requests, they refused to return to site effectively forcing the plaintiff to arrange for another contractor, Formex, to complete the scope of work.

The defendant's position

Three progress payment claims totalling $75,000 being approximately 88 per cent of the total contract sum had been charged by the defendant by 15 August 2007 and had been paid by the plaintiff by 24 August 2007. The defendant says that the payments made were consistent with a percentage of the contract that he had completed, however the plaintiff disputes this.
An independent quantity surveyor with approximately 40 years experience, Mr John Stranger, gave evidence on behalf of the plaintiff. Mr Stranger had attended the Braid Street site on behalf of the plaintiff's financier the National Australia Bank to evaluate the progress of work to ensure that the plaintiff was not over‑claiming works completed. Mr Stranger reports that his assessment made on 21 August 2007, being six days after the third progress payment had been made, was that only 25 per cent of the work required in relation to ceiling and wall fixing had been completed. Mr Stranger had not viewed the contract signed between the plaintiff and the defendant and was therefore not familiar with the precise scope of work required to be performed by the defendant nor was he aware of the details of the work that was required by way of variation.
Mr Stranger's evaluation related to completion of work for internal ceilings/wall linings generally on site. Although some aspects of the work relevant to ceiling fixing and wall linings were variations (additional bulkheads, the type of gyprock used, some dry walling), the evidence of the invoices for materials, photographs annexed to Mr Strangers report, the defendant's video of the 10 October 2007 and the evidence of Mr Urbani and Mr Lyon support that that the majority of the work relating to the installation of internal ceilings and wall linings was contained within the scope of work of the contract.
By Mr Stranger's assessment report date of 6 December 2007, being approximately four months after the August assessment and two months after the defendant had left the site, Mr Stranger assessed that approximately 85 per cent of the internal ceilings/wall component had been completed.
I accept Mr Stranger's expertise as a quantity surveyor and I accept the accuracy of his evidence in light of his independent status. Although Mr Stranger did not view the contract, I find that the contract included the majority of the ceiling and wall fixing work to be performed on the Braid Street site. I accept that Mr Stranger's assessment reports generally reflect the percentage of work performed by the defendant on the contract.
Mr David Campbell asserts in cross‑examination that a quantity of work consistent with a payment of over 80 per cent of the contract sum had been completed at the time when the third progress payment invoice of 15 August 2007 was prepared. He further asserts that 85 to 90 per cent of the contract was completed by 10 October 2007. Mr Campbell, however, confirms that he had a full team of approximately four men working on site from 15 August 2007 until 10 October 2007 (being a period of two months) over which he therefore estimates that less than 10 per cent of the contract would have been completed. Although variations were performed in this time, the number and the nature of the variations was not so great that they would have taken up the number of man hours that the defendant claims he and his workers put in on the Braid Street site. The defendant's assessment of the work completed pursuant to the contract and the time at which it was completed is also questionable in light of his correspondence dated 2 October 2007 to Peer Industries asserting that a cost of $20,000 was estimated in relation to fixing up the Braid Street job in locations where defective clips had been used. The sum of $20,000 is nearly 25 per cent of the total contract price and the estimate is made approximately one week before the defendant (on the defendant's evidence), left site.
I accept the evidence of the plaintiff's supervisor Mr Lyon on oath and his signed proof of evidence (Exhibit 201) that when the defendant and his workers left site the following defects were apparent in relation to the work that had been performed on the contract:
•Some of the walls in apartments needed to be sanded. Flushing was started but not completed.
•The majority of the gyprock had not been installed in the apartments or in the commercial units appropriately.
•The majority of the ceilings in the units needed to be re‑done.
•Ceilings showed cracking in the joints and were not finished appropriately and experienced bowing.
•The plasterboard on the ceilings and the walls needed to be taken off and put back because of the shaking of the walls and because the glue had not been used appropriately. The walls were also bowing.
•Cracking and unevenness of plasterboard was noted throughout the site.
I accept that a number of these defects would have been apparent or required work on or about 20 September 2007.
Doing the best I can I accept that a maximum of 50 per cent of the scope of work of the contract would have been satisfactorily completed by the defendant and approximately 88 per cent payment for the contract had been received at the time when the defendant sought payment from the plaintiff for variations on 20 September 2007. I also accept (having viewed the video of 10 October 2007), that a number of components of the contract were not completed between 20 September 2007 and 10 October 2007. The commercial ceiling grid that was installed by Mr Dore had not been covered, the wall cladding was still missing in parts of unit 5 and no other units were shown. The video taken by the defendant on 10 October 2007 also shows that the plaintiff had commenced plastering the stairwell area in unit 5. The inference to be drawn from this is that the plaintiff resorted to an alternative wall coverage because the defendant would not perform the stairwell variation the plaintiff required.
The defendant, Mr Sidney Campbell and Mr Gibson gave evidence that the reason why the scope of the work for the contract appeared incomplete on 10 October 2007 was because of the difficulties they experienced as a result of the presence of rubbish and scaffolding and because of the holdups on the site from other trades. While I accept that on a relatively small site at the height of the building boom some delays would be inevitable, I do not accept that the defendant was precluded from performing as much work as remained outstanding on 10 October 2007.
The video footage of 10 October 2007 shows the defendant and Mr Sidney Campbell on site, but the words spoken by the defendant and his demeanour (such as saying "I always record my work") indicate that the footage was taken to support this claim. The footage does not directly show the defendant's workers being productive on site. There is no evidence from the footage to support the defendant's assertion that he or his workers had been on the site for the days immediately preceding the recording of the footage on 10 October 2007.
A right to terminate a contract will only arise if the breach is a breach of an essential term of the contract. In Douglas v Cicirello [2006] WASCA 226 at par 13 Steytler P said:
"The importance of a fundamental or essential term is of course that its breach entitles the other party to terminate the contract immediately. The test of essentiality ordinarily applied is that expounded by Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR(NSW) 632 at 641 – 642 being:
'… whether it appears from the general nature of the contract considered as a whole or from some particular term or terms that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor …'."
The dispute arises in relation to non‑payment for work that the defendant alleges was due and owing in respect of variations to the contract. There is no evidence that the defendant would not have entered into the contract with the plaintiff had he considered the potentiality of future disputes in relation to variations to the contract. This is not a situation where the defendant was not paid for the scope of work of the contract that he actually performed. On the contrary, he was paid an amount greater than that owing for the percentage of work that he had performed during the course of the contract. It has been submitted by the defendant that on occasion non‑payment can be a breach of an essential term. I do not accept that non‑payment for variations in this case breached an essential term of the contract. The defendant was not entitled to elect to repudiate the contract.

The plaintiff's position

I accept that as an owner/builder the plaintiff was keen to have the contract finished. The video footage of 10 October 2007 shows that the scope of the work for the contract had not been completed and was not close to being completed. I accept the plaintiff's assessment that the defendant's tardy performance was holding up the plaintiff's progress.
The plaintiff claims that the defendant left the Braid Street site at the end of September 2007. The defendant says he remained working on site until 10 October 2007 and that workers continued at the site beyond that date.
The defendant exhibited payment invoices for his workers that he claims were relevant to the contract but that commenced for the week ending 4 July 2007. I accept that given the date of the contract document work on the contract did not commence until 19 July 2007 and therefore the defendant's claim in relation to hours worked on site is overstated. The sums paid by the defendant for the week ending 4 October 2007 show that the last time the defendant paid workers on site was for four days or less (four days being the number of working days in the week prior to 4 October 2007). I find that the defendant's records of work attributable to the contract are not reliable and that the records do not assist in relation to a determination of whether workers stopped attending site regularly from late September 2007.
The defendant accepts that Mr Urbani's telephone records (Exhibit 193.2) are accurate and that they show that telephone calls were initiated by Mr Urbani to Mr Campbell in late September and on 3 October, 8 October and 10 October 2007. Relevantly given the defendant's evidence the records show:
3 October 2007              9.06 am               11 minutes
8 October 2007              12.03 pm             9 minutes
10 October 2007            1.55 pm               11 minutes
Both the defendant and Mr Sidney Campbell gave evidence that they were together at a time when Mr Urbani called the defendant in October and said that three days' further work was required. Mr Sidney Campbell says that he was still working on site but was at the defendant's Kelmscott home when the call was received. In cross‑examination it was put to Mr Sidney Campbell that the call was received at Kelmscott during the daytime (consistent with the telephone records) but inconsistent with the defendant still working on site on a regular basis. I accept Mr Sidney Campbell's evidence that on occasion workers may have to leave site in order to obtain supplies or equipment but I do not accept that two senior workers (Mr David Campbell and Mr Sidney Campbell) would be away from an East Perth site and in Kelmscott together during working hours if they were working all day on the East Perth site. I find that the telephone records of 8 October 2007 and 10 October 2007 support the assertion that the defendant and his workers were not productively on site on a full‑time basis up to and including 10 October 2007.
I also accept the following evidence:
1.Mr Urbani was the initiator of the telephone calls on 8 October and 10 October 2007.
2.Mr Urbani wrote to the defendant on 11 October 2007 and said:
"Further to our phone conversation yesterday stating that you are unable to fulfil your contractual obligations, we wish to advise that unless we hear from you within 24 hours to the contrary we will take it as confirmation that you do not intend to complete the above job.
This will leave us with no alternative than to engage another ceiling company and any price overruns will be claimed from you."
There is no evidence of any response to the correspondence from the defendant.
3.In par 86 of the defendant's statement (Exhibit 202) he states:
"Urbani rang me in early October 2007 and told me that if I returned to site with my subcontractors, it would only take me three days to finish my contract."

The defendant confirms that the contents of his statement are accurate.
I find that the only reasonable inference from the evidence is that the defendant had left the site in late September/early October 2007 and the plaintiff was endeavouring to have the defendant return to site to complete the contract.
There is no evidence that the defendant returned to the site. I find that the defendant's failure to return to the site and complete the contracted scope of work is a breach of an essential term of the contract. The breach entitled the plaintiff to elect to repudiate the contract.

Damages

The plaintiff is entitled to recover damages resulting from the defendant's breach of the contract and its repudiation. The general contractual principal is that the innocent party suing for breach of contract is to be placed in the same position so far as money can do it as if the contract had been performed; see Commonwealth v AmannAviation Pty Ltd (1991) 174 CLR 64 per Mason CJ and Dawson J at p 80.
I accept that the plaintiff needed to ensure that the contract was completed and that, in light of the repudiation, the plaintiff experienced additional delays. The onus however is on the plaintiff to quantify the sums.
When the plaintiff commenced the proceedings Mr Urbani overstated the plaintiff's financial loss significantly. The statement of claim filed 30 October 2008 claimed damages in the total sum of $161,212.81. The amendment granted on the first day of trial in relation to damages claimed reduced this sum to $41,609.27. In cross‑examination Mr Urbani states that the reason for the significant overstatement was that he had failed to properly scrutinise the documents, however he acknowledged that he was aware of the nature of the claim and that he was responsible for it. The evidence of Mr Urbani's prior inconsistent conduct affects my assessment of his credibility in relation to the issue of completion costs. I am required to scrutinise the sums claimed carefully.
The plaintiff's claim is supported in part by the expert evidence of Mr Stranger who in his report (Exhibit 197.2) states:
"The costs incurred by Cardinal Construction to complete this subcontract work are fair and reasonable. From my experience when a contractor is taking over a project started by others, the cost to complete the work is approximately 50% to 100% more [the] original cost to complete."
Mr Stranger refers to a cost comparison extracted from Rawlinson's "Australian Construction Handbook", 24^th ed ‑ 2006, 25^th ed ‑ 2007 and 26^th ed ‑ 2008. Based on his analysis the cost to install a plasterboard ceiling on an existing suspension grid and the cost to complete rate that applies is $52.50 per square metre or 104.6 per cent increase on the sum that would have been appropriate had the contract been completed by the defendant. I accept Mr Stranger's assessment.
The plaintiff must prove not just that the amount claimed is reasonable but that the sum claimed was spent on completion of the contract.
The defendant has challenged the exhibited invoices of Formex, the contractor who provided the labour to complete the contract. Although a representative of Formex did not give evidence, I accept the unchallenged evidence that the Formex workers did not speak English as a first language. The Formex invoices are limited to a reference to Braid Street, however on invoices after 7 December 2007 a reference to Braid Street work that is obviously variation work is made. I do not accept that only the invoices containing the words "Job finished at Braid Street, East Perth" relate to the completion of the scope of contractual works however I am not satisfied that invoices without reference to Braid Street or without a job number entered by the contractor (J289) are relevant to the contract. I find that the following Formex invoices are proven as contractual completion costs:
1.Exhibit 19, 26 October 2007  $ 3,311.00
2.Exhibit 21, 31 October 2007  $ 7,180.25
3.Exhibit 32, 6 December 2007  $ 1,790.25
4.Exhibit 33, 6 December 2007  $ 5,832.75
5.Exhibit 36, 7 January 2008  $ 2,772.00
6.Exhibit 37, 15 January 2008 (Braid Street)          $ 7,878.25
7.Exhibit 38, 7 February 2008 (Braid Street)          $ 5,651.75
8.Exhibit 40, 15 February 2008 (Braid Street)         $ 2,464.00
Total$36,880.25
I accept the sum of $389.46 paid to Farinosi & Sons Pty Ltd, $4,599.53 to Boral Plasterboard and $1,642.43 to John's Building Supplies were paid appropriately. The total completion costs allowed are $43,533.67.

Delay costs

In cross‑examination the plaintiff's supervisor Mr Lyon states that he did not know that the work was to be completed within a period of 60 weeks. A calculation was put to him that by August 2007, being 47 weeks into the contract (that is, three‑quarters of the way through on the basis of time), only 60 per cent of the work had been completed. Mr Lyon refutes the proposition that time on the job could be directly compared to work performed and says the original trades take a lot longer than the finishing trades (T 134).
In cross‑examination Mr Stranger, the quantity surveyor, also refutes that a calculation of percentage of work performed in relation to time expended on the contract would be an appropriate calculation. Mr Stranger refers to an S curve calculation that is used in relation to work performed over time. An S curve calculation was not made nor was any evidence led of one being made in relation to the alleged delays on the Braid Street site. The defendant's evidence is that the contractual scope of works would have been completed in a short period of time (three days was not refuted) if the defendant had stayed on site. The plaintiff submits, however, that based on the evidence of the defendant's calculation that approximately $20,000 worth of work was required in order to fix the issue relating to the clips, and on Mr Dore's evidence that completion of the ceilings in the commercial units would cost approximately $16,000 combined with Mr Lyon's evidence of defective work outstanding that a time period consistent with the time in which the work was performed by Formex (between 17 October 2007 and 13 February 2008) was needed to complete the contract thereby delaying work on the Braid Street site.
The period of 17 October 2007 to 13 February 2008 is 15 weeks. I do not accept that a full 15 weeks' delay is due to the conduct of the defendant. Doing the best I can I consider that the calculation made by the plaintiff of an eight week period (that the defendant made in respect of the scaffold) is reasonable. The following delay costs apply:
1.Scaffold  $   3,416.00
2.Hoist  $   2,688.00
3.Site labourer  $   1,912.00
4.Site supervisor  $ 10,768.00
Total$ 18,784.00
I order that the defendant pay the plaintiff:
Contract sum  $ 86,400.00
Variations$ 15,582.30
Total$101,982.30
Less sum paid  $ 75,000.00
Balance$ 26,982.30
Cost to complete  $ 43,533.67
Delay costs$ 18,784.00
Sum due to plaintiff  $ 35,335.37
Interest thereon at 6% from 1 January 2008 to
date of judgment  $   4,599.47
The plaintiff's claim is allowed in the sum of $39,934.84. The defendant's counterclaim is dismissed.