Cazazure Pty Ltd v Murrumbidgee Estate Developments
[2010] NSWDC 142
•28 May 2010
CITATION: Cazazure Pty Ltd v Murrumbidgee Estate Developments [2010] NSWDC 142 HEARING DATE(S): 3 February 2010; 10-12 March 2010; 15 April 2010; written submissions to 30 April 2010
JUDGMENT DATE:
28 May 2010JURISDICTION: Civil JUDGMENT OF: Gibson DCJ DECISION: (1) Judgment for the defendants.
(2) Judgment for the first defendant/cross-claimant against the plaintiff/cross-defendant in the sum of $70,881.04, together with pre- and post-judgment interest at UCPR rates.
(3) The parties have liberty to bring in short minutes or order reflecting the agreed sum for pre- and post-judgment interest for entry of judgment on the cross-claim.
(4) The plaintiff/cross-defendant pay the costs of the first defendant/cross-claimant and of the second defendant.
(5) Liberty to restore re interest and costs
(6) Exhibits retained for 28 days.CATCHWORDS: CONTRACT - whether oral promises to complete a property development by a specific date were made and, if so, whether they formed part of the contract - meaning of "in a timely manner notwithstanding delays" - TORT - claim for negligence pleaded in the alternative to a claim in contract - consideration of liability in tort where a contractual arrangement exists between private parties in a commercial context - TRADE PRACTICES - whether the defendants made representations and, if so, whether the representations were misleading or deceptive LEGISLATION CITED: Contracts Review Act 1980 (NSW)
Fair Trading Act 1984 (NSW), ss 42 and 68
Trade Practices Act 1974 (Cth), ss 51A, 52 and 82CASES CITED: AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; (2009) 258 ALR 14; (2009) 83 ALJR 951; [2009] HCA 27
Attorney General of the Commonwealth v Oates (1999) 198 CLR 162
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Bond Corp Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215
Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 754
Frederick W. Nielsen (Canberra) Pty Ltd v PDC Constructions (ACT) Pty Ltd (1987) ACTR 1
Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896
Jones v Dunkel (1959) 101 CLR 298
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Optus Vision Pty Ltd v Australian Rugby Football League Ltd [2004] NSWCA 61
Peppers Hotel Management Pty Ltd v Hotel Capital Partners Ltd (2004) 12 BPR 22,879; [2004] NSWCA 114
Perre v Apand Pty Limited (1999) 198 CLR 180
Rudi’s Enterprises Pty Ltd v Jay (1987) 10 NSWLR 568
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; (2007) Aust Contract R 90-254; [2007] NSWCA 65
Sykes v Reserve Bank of Australia (1998) 88 FCR 511
Tai Hing Limited v Liu Chong Hing Bank (1986) AC 80
Upper Hunter County DC v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429
Zhu v Treasurer of New South Wales (2004) 218 CLR 429PARTIES: Plaintiff / Cross-Defendant: Cazazure Pty Ltd (ACN 109 287 087)
First Defendant / Cross-Claimant: Murrumbidgee Estate Development Pty Ltd (ABN 280 669 829 38)
Second Defendant: Michael O’MearaFILE NUMBER(S): 2059 of 2008 COUNSEL: Plaintiff: Ms V Culkoff
Defendants: Mr R Wright SC / Mr S BlountSOLICITORS: Plaintiff: Steven Klinger, Solicitor
Defendants: Mackenzie & Vardanega
JUDGMENT
1. The plaintiff, by statement of claim filed on 14 May 2008 (as amended on 18 November 2008), claims damages for breach of contract, negligence, contravention of s 52 Trade Practices Act 1974 (Cth) (“the Trade Practices Act”) and s 42 Fair Trading Act 1984 (NSW) (“the Fair Trading Act”).
2. The claim is brought against the first defendant in its capacity as the contracting party for the development of property at 2616 Brayne Road, Griffith in the State of New South Wales for a “turnkey” development and subdivision into 15 rural residential allotments in accordance with a development consent in place when the property was purchased by the plaintiff. The second defendant is the person who allegedly made the representations on behalf of the first defendant.
3. The contract is asserted by the plaintiff to consist of the following documents:
(a) A written document headed “Heads of Agreement” dated 18 August 2004;
(c) A letter dated 6 January 2005 from the defendant to the plaintiff (see paragraph 9 of the statement of claim).(b) The first schedule of payments made under that contract, namely a schedule of payments dated 6 January 2005;
4. The claim for negligence, set out in paragraphs 17A and 17B of the amended statement of claim, is brought on the basis that the first defendant owed the plaintiff a duty of care to bring the Works to completion “within a reasonable time” and that the first defendant failed to bring the Works to completion for approximately three years, which caused the plaintiff to suffer loss and damage. No claim for negligence is brought against the second defendant. There are no particulars of negligence set out.
5. A claim for estoppel by convention as set out at paragraphs 18 – 20 of the statement of claim was not pressed and is not the subject of any findings.
6. The breaches of s 52 Trade Practices Act and s 42 Fair Trading Act are set out in paragraph 21 of the statement of claim as follows:
(a) That the defendants were experienced in projects that involve the subdivision of parcels of land, from the design stage to the issuing of linen plans in certificate of title, including the Works;
(c) That, based on the defendants’ prior experience and expertise, the defendants could and would bring the work to practical completion by April 2005. (See paragraph 21 of the statement of claim.)(b) That the defendants understood that with such projects, “time was of the essence” in order to contain holding and other costs and to maximise profit return;
7. It is further pleaded, at paragraph 22 of the statement of claim, that prior to entry into the contract, the plaintiff informed the defendants that:
(a) The whole of the purchase price and development costs were being obtained by way of a loan;
(c) Accordingly, it was critical that the works were completed within the time frame stipulated under the contract in order to ensure the development was a profitable one.(b) The said loan was to be fully capitalised for the duration of the works; and
8. It is asserted in paragraph 23 of the statement of claim that it was against this background that the defendants made the representations which are the subject of the claims under the Trade Practices Act and the Fair Trading Act. It is asserted that the defendants’ misleading or deceptive conduct induced the plaintiff into entering into the contract and the plaintiff thereby suffered loss and damage.
9. The representations are asserted to be misleading or deceptive in that:
(b) “the defendants’ experience and expertise was such as to not enable the defendant [sic] to bring the works to practical completion by April 2005, contrary to the representations” (paragraph 26(b) of the statement of claim).(a) contrary to the representations, the defendants failed to bring the Works to practical completion by a specified date, namely April 2005; and
The selection of the April 2005 date in the pleadings is of importance, as the defendants came to court to meet this claim. I should note that there was no evidence concerning the defendants’ experience and expertise, although a submission was made that other work, and other financial worries, that the defendants had meant that they did not give the attention to their contractual obligations that they otherwise should have provided.
10. The defendants in the further amended defence filed on 18 August 2009 assert that the contract in question was partly express and partly implied. To the extent that the contract was express, it consisted of the heads of agreement document dated 18 August 2004, a written document entitled “Australian Standards – Design and Construct”, the approval plan and development approval granted by Griffith City Council. To the extent that the contract was implied, the implications arose to give business efficacy to the contract and by operation of law. The defendants resiled from the reliance upon the “Australian Standards – Design and Construct” in their conduct of the case, and asserted that the sole written contractual document was the heads of agreement signed by the parties and dated 18 August 2004. The defendants deny that the schedule of payments and letter dated 6 January 2005 formed part of the contract.
11. An amended cross-claim filed on 18 August 2009 seeks payment of the balance of unpaid fees under the contract, namely the sum of $70,881.04. The plaintiff is the cross-defendant to that claim. The sum is not the subject of mathematical challenge.
Procedural matters
12. These proceedings first came before me as a long motion on 7 August 2009 where, by agreement, the question of liability was severed from the question of damages pursuant to Part 28 r 28.2, Uniform Civil Procedure Rules 2005 (NSW).
13. The parties agreed that the relevant questions of liability to be determined at the hearing were as follows:
(a) What were the terms of the contract between the plaintiff and the first defendant?
(b) Did the plaintiff breach the contract?
(c) Did the first defendant breach the contract?
(d) What was a reasonable time for completion of the works?
(e) Did the defendants fail to complete the works within a reasonable time?
(f) Was the first defendant negligent in failing to complete the works within a reasonable time?
(g) What, if any, representations were made by the parties to one another prior to entering into the contract?
(h) Did the first and/or second defendant engage in misleading or deceptive conduct in contravention of the Trade Practices Act and/or the Fair Trading Act ?
(j) Did the plaintiff fail to mitigate its loss?(i) Did the plaintiff rely on the said conduct?
14. For the purpose of summarising the evidence, I agree with the submissions of the defendants that it is appropriate to break down these agreed questions into the following subheadings in relation to the cause of action in contract, negligence and misleading or deceptive conduct.
15. The questions the parties have agreed upon (see paragraph 12 above) may be allocated to the causes of action pleaded as follows. Questions (a) to (c) relate to the contractual claim; questions (d) to (f) relate to the negligence claim; questions (g) to (i) relate to the misleading or deceptive conduct claim and question (j) relates to mitigation.
16. I shall first deal with the evidence of the parties. Although, in general, lengthy summaries of evidence are undesirable, it is necessary in these proceedings, for two reasons:
(b) Secondly, these proceedings were conducted without the benefit of a transcript.(a) First of all, both parties agree that a careful, detailed analysis of the objective evidence, including contemporaneous documentation, and of the timeline of events is essential in order to arrive at the facts in these proceedings; and
I am indebted to counsel on both sides for the excellence and attention to detail in their submissions, particularly in such circumstances. In particular, I thank them for their careful chronology of events, which is of such assistance when hearing complex commercial matters without the benefit of transcript.
17. After issues arose during oral submissions, I ordered the transcript and provided it to the parties. I have received revised submissions from both parties to include the transcript references. I have checked the references to the evidence in submissions against the transcript. There are in fact no inconsistencies of note, but where I have quoted the evidence, I have quoted the evidence from the transcript.
The evidence in these proceedings
18. Mr Romeo, the principal witness for the plaintiff, was a director of the plaintiff from the time it was incorporated until June 2005. He gave evidence under some disabilities, and I have made allowances for these. When the matter was first listed before the court for hearing, he told the court about his wife having been taken to hospital as an emergency patient the previous evening and that he was taking anxiety medication, so after consultation with the parties’ legal representatives I adjourned the proceedings until his health was better. When he returned to give evidence, he was clearly still struggling at times with the stress of giving evidence and being cross-examined. I have accordingly made considerable allowance for his state of mind. I have particularly taken into account, if he had trouble remembering any details, that he was in a state of stress.
19. However, Mr Romeo’s affidavit, which is very comprehensive, was prepared at a time when he was not labouring under these disabilities. The issues I have with Mr Romeo’s account of the relevant events arise, not from his demeanour in the witness box (to which I give no weight at all, given his condition of health), but from analysis of the objective contemporaneous documentation and of the chronology of events as set out in this affidavit when compared to that documentation.
Mr Romeo’s description of meeting the second defendant
20. Mr Romeo told the court he is a real estate agent by profession, and that in 2004 he was working at a real estate agency in Casula. He had relatives in the Griffith area. It is unclear from what source he came to know of the land for sale in Griffith. He had no prior experience with land development; this was his first attempt at taking part, in any capacity, in a land development project.
21. According to Mr Romeo’s affidavit and evidence, he was put on to the defendants as potential developers when he attended the offices of Stephensons, on or about 15 March 2004. Stephensons was a land development firm in Griffith, which Mr Romeo had consulted about carrying out development of the subdivision into housing blocks for resale. His evidence was that Stephensons said they were too busy and referred him to the second defendant (hereafter referred to as “Mr O’Meara”).
22. Also at this time, according to paragraph 9 of his affidavit, he telephoned Turner’s Excavations, who said they were prepared to look at the development. He spoke to a Mr Lewis, who requested the Development Application (“DA”) and other documentation to which Mr Romeo said he would be in touch (paragraph 9 of his affidavit).
23. Mr. Romeo’s evidence in cross-examination was as follows:
“Q. Yes. Now, just to get the sequence right, so that the court and I can follow it, what happened was, and if you want to follow any of this, it starts at about paragraph 6 of your affidavit, you were told about a property that was up for sale, 17 acres in Brayne Road, Griffith, and you were interested in it and interested in developing it, is that right?
A. Yep.Q. And you saw or considered consulting three firms who might do the construction development work.
A. That’s correct, yes.Q. So that was Stephensons in Wagga--
A. No--Q. No, Stephensons in Griffith--
A. Yes.Q. And there was also Turners in Wagga, is that right?
A. That’s correct, yes.Q. And you say that on about 15 March - how do you know it was 15 March 2004?
A. How do I know?Q. Yeah.
A. I’m pretty sure I - it would be there with some of the information I’ve given. I’m pretty sure that’s - it was on or thereabouts 15 March.Q. And what sort of information is that you’ve given?
A. Again, I was down, I was in Griffith and I was down there for that reason, to look around.Q. So you’d expect there to be a document in the discovered documents dated 15 March 2004, would you?
A. I’m presuming so, yes.Q. And if there isn’t, you - how would you explain that you came up with 15 March?
A. Because that’s the best of my recollection as well, and I’m sure I’ve - I’m sure I’ve come up with that through looking at that, whatever information I’ve given.Q. Right, and so it’s the best of your recollection, is it? If there is no document there that identifies that date, it’s just the best of your recollection, is it?
A. On or thereabouts, yes, it would be that, yes.Q. Would you agree with me that you could be wrong about that recollection of the date?
A. By a couple of days.Q. But only by a couple of days. Right. Now, so you say that you went to see Stephensons, and on 15 March, and you went with Mr Frank Calabria and Mr Ross Lentini, is that right?
A. That’s correct.Q. That’s correct, yes?
A. Yes.Q. And you showed them the DA, the development approval, Stephensons?
A. Stephensons didn’t want to look at it. They had no time for it.Q. But you had it with you when you went to see them?
A. At the time, yes.Q. So you spoke to other developers as well?Q. And you say on 15 March, and it was Stephensons who suggested Mr O’Meara, is that right?
A. As well as Mr Cavallaro from Rawlinson and Brown mentioned it, and if I remember correctly, even Danny from Midstate.
A. No, real estate agents.” (T 127 – 8)
24. It was during this meeting that Frank Calabria mentioned the name of the second defendant, and Mr. Romeo sets out in paragraphs 6, 7 and 8 what he did following this information, including contacting Turners. (I note that one of the matters raised by the defendants concerning the asserted unlikelihood of any meeting with Mr. O’Meara is the failure to call Mr. Calabria).
25. Mr. Romeo was then cross-examined about these events.
“Q. Now, on that 15 March - so, in paragraphs 6, 7 and 8 you tell us about the various bodies and then going to see Stephensons, how they told you to go to Mr O’Meara; you then telephoned Turners at this time in Wagga, is that right?
A. I missed that, sorry?Q. You telephoned Turners in Wagga--
A. Yes.Q. --at this time, to ask whether they would be prepared to look at the development?
A. Yes.Q. That’s right?
A. I believe it was at that time, yes.Q. So, on or about 15 March 2004?
A. On or about that time, yeah.Q. And you spoke to a person called Lewis?
A. Yes.Q. And he asked you to send the DA to him, is that right?
A. Yes.Q. And you said you’d be in touch?
A. Yes.Q. And then you say on that same day you had a meeting with Mr O’Meara?
A. Yes.Q. And it was at that meeting that you first raised the turnkey nature of the project, you say?
A. With Mr O’Meara?Q. Yep.
A. Yes, definitely with - with all of them, actually.Q. And when you said turnkey, what did you understand by that expression?
A. From start to finish, fifteen registered blocks of land.Q. So it was just - they delivered you a package complete with fifteen blocks of land and you didn’t have to worry about engineering drawings--
A. Exactly. Yes.Q. --or anything like that, or dealing with linen plans--
A. Yes.Q. --getting surveys. So they were just to provide the whole thing and you with an end product?
A. Yes.Q. And so you didn’t care how they arranged that in the middle, it was, you just wanted to be able to, in a sense, turn the key and it all just go?
A. Yes.Q. Is that your understanding?
A. Yes.Q. And that’s what you meant, and as far as you understood it, other people had the same understanding as you?
A. Yes.Q. And that tied in with your experience, didn’t it, of having a property with a development application already approved - a development approval on it, should be able to be done in four to six months. That was - you were prepared to agree with that, weren’t you?Q. And it was in that conversation you say that Mr O’Meara said to you that it should be able to be done in four to six months?
A. Yes.
A. Yes. Yep.”
26. Mr Romeo’s affidavit sets out that on or about 15 March 2004, following the recommendation of Stephensons, he met with Mr O’Meara at his offices, accompanied by Ross Lentini and Frank Calabria. Mr Romeo showed Mr O’Meara the DA consent and according to paragraph 10 of the affidavit, the following conversation took place:
Mr Romeo: “I want to buy 17 acres in Griffith with a DA for 15 Lots. I need you to quote the job accurately and we need to finish the job as quickly as possible. Robert Cavallaro, from Rawlinson & Brown Real Estate, recommended you for the job. He also recommended that we don’t market until the work was [sic] near complete [sic]. We are very excited about the opportunity to develop the land. But it all depends on your costs and how quickly you can complete the job. It is a turnkey proposal. I have never done such a development, so I want you responsible for everything from beginning to end”.
27. According to paragraph 10 of the affidavit, Mr O’Meara, having been shown the DA consent, said:
“I have done several projects in the area. Using all my past experience, I am confident that I can quote the job accurately, from beginning to end. I can’t see it taking that long. I should be able to complete the project in 4 to 6 months.”
28. After Mr Romeo repeated that this type of project was new to him and he “really needed a full turnkey handover”, Mr O’Meara said:
“Don’t worry, that won’t be a problem. I have done other turnkey developments. Why don’t you go out tomorrow morning and have a look at the site. I can also show you what’s happening in the development scene around Griffith.”
29. According to paragraph 11 of Mr Romeo’s affidavit, he met Mr O’Meara “the following morning” at Mid-State Real Estate and they spent a couple of hours driving around “looking at subdivisions, some that he had done and some that others had done”.
30. According to paragraph 11, the following conversation also took place on this day:
Mr Romeo: “So you are pretty confident that you can do the job and that includes dealing with the Council and other authorities, doing the works and getting the linen plans registered so that we can have the lots up for sale by the end of the year? As I said I will be relying on you to get the job done on time and for a full turnkey handover. So the pricing has to be spot on so I can do my feasibility accurately. I can’t afford the project to blow out”.
Mr Romeo: “If we can finish this project and have the blocks up for sale early in the new year, I have been looking at another bigger project in the area. Maybe we can do that as a joint venture or you can have a share in the project”.Mr O’Meara: “I am sure I can get the whole job done by Christmas and I will handle everything. Don’t worry you will have your blocks ready for sale in the New Year”.
31. Although Mr O’Meara said he needed “a week or two” to look at the paperwork before preparing a proper quote, he gave Mr Romeo a piece of paper which Mr Romeo said, in his affidavit, he has since lost. This piece of paper contained Mr O’Meara’s written estimate that the cost of development would be about $30,000 per block. Mr O’Meara described this document as “my approximate costings”, according to Mr Romeo, and added:
“I will do a more accurate proposal and let you know when it is ready. I think a figure of around $30,000 per block should do the job.” (paragraphs 13 and 14 of Mr Romeo’s affidavit).
32. I note that the company to whom the representations are asserted in the Statement of Claim to have been made, Cazazure Pty Ltd (the plaintiff), had not yet been incorporated and would not be incorporated until 27 May 2004. Mr Romeo was accompanied by Frank Calabria and Ross Lentini, and used the word “we”, but this “we” did not include the plaintiff corporation.
33. Ross Lentini was called to give evidence. He was confident that this first discussion took place on 16 March 2004. He particularly recalled it because of the birthday of one of his children. His evidence is discussed in more detail in the section of this judgment concerning misleading or deceptive conduct.
34. The importance of these dates can be seen from paragraphs 13 to 17 of the affidavit of Mr Romeo:
14. Upon my return to Sydney I also spoke with Lewis from Turners Excavations and arranged for the relevant documents to be forwarded to them on or about 17 June 2004. A copy of the fax transmission sheet is Exhibit 4. The fax notes:“13. ... I left Griffith feeling very comfortable with what I had been told and the estimate costings. O’Meara seemed very capable.
*TIME IS OF THE ESSENCE”.
“PLEASE NOTE: LOOKING FOR TURN-KEY HANDOVER
16. I immediately telephoned O’Meara and said to him words to the following effect:
15. However, I recall a few days later I received a call from Lewis from Turners, requesting surveyor’s drawings and engineering plans to enable them to accurately price the works. I recall saying words to the effect: “I have sent you the only information I have. O’Mearas [sic] in Griffith got the same information and said they could accurately price the job on that”. I was told to “stick to O’Meara” if that was the case.
O’Meara: Don’t worry Roy. Most subdivisions in the area are similar in their requirements as the soils are pretty much consistent throughout. There isn’t much difference. And I am very familiar with Griffith. I will get the job done on time and the price will be accurate based on the DA you have given me.”
Me: Michael, I was also getting another company to quote on the job. I am a little concerned because they said in order to give me an accurate price for the job they needed surveyor’s drawings and engineering plans.
17. On or about 6 April 2004 O’Meara telephoned me to inform me that the costings for the works were complete and could be collected. Ross Lentini collected the costings and faxed them to me. A copy of the costings dated 13 April 2004 is Exhibit 5.”
35. According to Mr Romeo’s evidence, following this conversation, Mr O’Meara telephoned him on 6 April 2004 to inform him that the costings for the work were complete and could be collected. Ross Lentini collected the costings and faxed them on to him.
36. Mr Romeo did not keep a diary or contemporaneous notes, but Mr O’Meara, the second defendant, did. The defendants draw to my attention the difference in timing of meetings and persons present in Mr O’Meara’s diary entries of 6 and 10 April 2004. There is no diary entry for any meetings, and the first diary entry (6 April) refers to the “Calabria subdivision”, not to Mr Romeo. Nor is there any written confirmation that on 6 April Mr O’Meara had the conversation Mr Romeo refers to (although this is not significant) or had prepared the quotation. Mr O’Meara’s entry of 10 April 2004 made a note in his “To do” list that he had yet to prepare the price of the Calabria subdivision quotations. It was one of three jobs in his “To do” list for that day. His diary entry for 6 April contains Frank Calabria’s telephone number, not Mr Romeo’s.
37. Frank Calabria was not a witness in these proceedings. The defendants have asked me to draw a Jones v Dunkel inference (Jones v Dunkel (1959) 101 CLR 298) from the failure of the plaintiff to call him to give evidence.
38. Mr Romeo’s evidence was that this was the first of three meetings (the others being on April 28 and June 9) between the defendants and Mr Romeo on behalf of the potential future purchaser. The defendants submit that only the third of these meetings took place. I shall summarise the evidence for the other two meetings before determining these factual issues.
What happened in April 2004?
39. It is not in dispute that on 13 April 2004 Mr. O’Meara faxed a quotation; the question is when, to whom and in what circumstances.
40. The circumstances in which he came to prepare the quotation were described in his evidence as follows:
“Q. I’ve shown you the entry for 10 April 2004 in your diary which is in exhibit 7A and do you see the letters TTD and then a dash?
A. Yes.Q. What do the letters TTD stand for?
A. Things to do.Q. After the first dash can you read what’s written there?
A. Yeah, it says “Price Calabria of subdivision Brayne Road”.Q. What’s that mean?
A. It means I was contacted by a fellow by the name of Frank Calabria who asked me to work out a price to do the physical works at a subdivision in Brayne Road, somewhere along the line a drawing of the approved DA was dropped off at my office and I was asked if I could price it based on what I could give and what that was. I remember talking to him on the phone and saying, “Well I can’t--Q. When you say him who is that?
A. This is Frank Calabria.Q. And is that what “things to do” mean, that you have yet to do it?Q. What does that indicate as to the state of preparation of the pricing on 10 April 2004?
A. Well up to that point it didn’t exist.
A. I have yet to do it. I have seen this, I had seen this drawing which was of a DA, and a DA drawing is not an engineering drawing, and that’s it. “ (T-277)
41. In paragraph 21 of Mr. Romeo’s affidavit, he sets out how he “again” travelled to Griffith on 27 April 2004 to meet with Mr. O’Meara. The accommodation receipt for the Kidman Wayside Inn and American Express invoices confirm Mr Romeo was in Griffith on 27 and 28 April 2004 (Exhibit C). This meeting was, according to Mr Romeo, postponed to the following morning, as Mr O’Meara had been called to one of his farms “to address some issues”. On 28 April 2004, according to paragraph 22 of Mr. Romeo’s affidavit, he and Frank Calabria met Mr. O’Meara (the affidavit does not refer to the place of the meeting). Mr. Romeo said he had the following conversation:
Mr Romeo: “Michael, the costings you have given me look good. But I want you to look at the absolute worst-case scenario and to take into consideration any sort of problem that may be thrown in the way so that we don’t have any unexpected extra costs. I am relying on you. As I said before, this is our first development and I want to be sure”.
Mr O’Meara: “Everything has been taken into account. The only possible extra cost is the pump and irrigation set up for the raw water. I have made initial inquiries about this and the worst-case scenario is around $1,500 per lot, which equates to $22,500”.
Mr Romeo: “I was expecting that and it won’t be a problem. Is that the total costs after the trees are removed. We want to make sure it is an inclusive figure. We can’t afford the funding to blow out”.
Mr O’Meara: “It is all-inclusive, no ifs or buts”.
Mr O’Meara: “I can commence work on the lodging of the CC straight away. This will give us a head start. I have done much larger developments over the past 10 years. There won’t be any problem in getting the lots to market by Christmas. I will draw up a heads of agreement and a schedule of the works for you to sign on the next trip up”.Mr Romeo: “Michael, we also want certainty about completion and a schedule of the works. I am arranging a delayed settlement on the purchase on the basis that I can get immediate access to the property. How quickly can you start and what is the worst case scenario as to when we can get the lots ready for sale?”
42. What were the “costings” which “look good”? Mr Romeo’s evidence was that it was the 13 April quote headed “Calabria Subdivision”. This was not a final quote. The document is headed:
“NOTE – ESTIMATE ONLY AND NOT BASED ON ENG PLANS (NOT AVAILABLE AS YET)”
and also adds:
“SUBJECT TO COPYRIGHT”
which is indicative of Mr O’Meara’s knowledge of legal concepts and language, a factor of some importance in these proceedings.
43. The following should be noted concerning this document:
(a) Mr Romeo was certain that from the first, he told Mr O’Meara that this was to be a “turnkey” development, because Mr Romeo did not have the experience or knowledge, this being his first development. However, this document does not contain costings for matters that would be expected if this was a turnkey development, such as consulting and liaison services for preparation and lodgement of linen plans.
(b) Nor does the quotation include allowance for electricity (excepting trenching), light poles or sewers.
(c) There is a great deal of handwritten alteration of the tables by an unknown person.
(e) Finally, the quote is headed “ Calabria Subdivision, Brayne Road”, with Frank Calabria’s telephone number (emphasis added). The large printing “Attention Roy Romeo”, which appears down the right hand side of the document, has been written by some other person. It was not put to Mr O’Meara that this was his handwriting. Mr Romeo, in cross-examination, said he did not know who had made these crossings out and adjustments, or who added the words. It is Mr Calabria’s name and telephone number which Mr O’Meara recorded in his diary, not Mr Romeo’s.(d) The additional handwriting of an unknown person to allow an additional 20% on the estimate per block of $22,059 plus $3,000 for electricity and light poles.
44. Another matter to note is that despite obtaining this quotation from the defendant, Mr Romeo continued to seek quotes from two other developers up until August 2004. In addition to the approach he made to Lewis from Turners Excavations, in or about 17 June 2004, referred to in paragraph 14 of his affidavit, he also, on 13 August 2004, faxed Budd & Partners for a quote on “all works involved in getting Brayne Road to state of registered individual blocks”, which is hardly suggestive of there being a final agreement in place between the plaintiff and defendants.
45. Senior Counsel for the defendants, in his helpful written submissions (paragraph 14(g)) notes that this final costing for a turnkey subdivision of $22,059 per block on 13 April is a substantial reduction from the estimate of $30,000 per block which Mr Romeo says was given to him after his initial meeting with Mr O’Meara on 16 March.
46. The first question is whether a $30,000 estimate was given at all. The affidavit of Mr O’Meara sets out, at paragraphs 10 to 19, circumstances in which he was contacted by Frank Calabria on or about 6 April concerning a potential residential development. He was asked for an estimate for costs of the completion of civil works. He made a note of Frank Calabria’s telephone number and the name of the development in his diary, and provided an estimate of costs. His evidence was that this estimate is not based on the turnkey approach, as the total estimate per block was considerably below the turnkey developments for his company in that area, which were between $35,000 and $40,000 per block. His evidence was that he did not meet Mr Romeo until 9 June 2005. Mr O’Meara’s work diary noted the telephone numbers of clients and other salient information on a daily basis, and the defendants submit these support his account.
47. The second question is whether the substantially lower 13 April 2004 quote was given to Mr Romeo as a follow-up to any meeting in March. The third question is whether this quotation was in fact prepared on a “turnkey” basis. Tied in with these disputed issues is the question of whether the representations as to completion time were made.
48. There is thus a significant difference between the evidence of the parties, not only as to whether these discussions and representations were made at all, but as to whether this alleged second meeting between Mr Romeo and Mr O’Meara occurred. This brings me to the meeting which Mr Romeo said was his third meeting with Mr O’Meara.
What happened at the June 2004 meeting?
49. There is no doubt a meeting occurred in June; according to Mr O’Meara’s diary it occurred on 9 June and according to Mr Romeo’s evidence it occurred on 6 June. The difference in dates is not significant.
50. According to the plaintiff, at this meeting he asked Mr O’Meara “how is the CC going with the Council” and was assured that everything would be done by Christmas (paragraph 26). However, the meeting with the Council did not take place until 23 June, so if Mr. O’Meara claimed to have been doing things, it would have been untruthful.
51. Mr. O’Meara’s version of the conversation on 9 June with Frank Calabria, Ross Lentini and Mr. Romeo, was as follows:
Mr O’Meara: “Before we can start any significant works we need to get a construction certificate. Council at times can be very slow in regards to construction certificate approvals. I have experienced many delays in obtaining the approval through my own developments and those that I have undertaken however at other times when the staffing is adequate and they are focused they can be quite good”.
Mr Romeo: “I understand there is an approach referred to as a turnkey development where you will undertake all of the work”.
Mr O’Meara: “Yes that’s right. We have done that in the past. We will take care of everything except for the selling and legal advice up until the completion of the lots”.
Mr Romeo: “I would like to go with that approach”.
Mr Romeo: “Michael I am particularly concerned with cost control and this is the reason I have decided to go with MED”.
O’Meara: “What about funding for the project?”
O’Meara: “Payments will have to be made to MED as the claims are made so that we can see the project through”.Mr Romeo: “The project will be fully funded. Money is not a problem. I am getting a loan from the National Bank”.
52. Following this meeting, Mr. O’Meara noted in his diary that on 16 June he “sent Romeo stuff off to Hughes Trueman for a quote on Eng. Costs for Brayne Rd project.” He goes on to note:
So this leaves us with very little prospective work except MEII and Romeo’s subdivision in Brayne Rd. Trouble with those are the lead time involved in getting started i.e. months away.”“Found out Turners got [illegible] subdivision $200K under us. I don’t know how they do it.
53. In fact, Mr. Romeo was also in touch with Turners for a quote; on 17 June he faxed them the DA approval and attachments, saying:
“Please find plan + DA approval attached. Please note: looking for turnkey handover [illegible] time is of the essence”.
He supplied his mobile phone number as well.
54. There is no doubt about the accuracy of the date of this fax, and the defendants submit that the reference in Mr. Romeo’s affidavit at paragraph 15 to receiving a request from Mr. Lewis of Turners for surveyor’s drawings and engineering plans, which Mr. Romeo says occurred in March, must have occurred in June, following this email, because Mr. Romeo says in his affidavit he told Mr. Lewis:
“I have sent you the only information I have. O’Meara’s in Griffith got the same information and said they could accurately price the job on that.”
55. The defendants also suggest that the approach by Mr Romeo to Stephensons of Griffith may have occurred at the same time (paragraph 10, page 4 of the summary). Stephensons told Mr Romeo that there was no point even looking at the DA as they were flat out and in no position to start work in the immediate future (Mr Romeo’s affidavit, paragraph 8). If the approach to Turners and Stephensons were at about the same time as each other, and we know that the approach to Turners was by fax dated 17 June, this is probably correct. This would also explain the other, inconsistent, statement by Mr. Romeo in his affidavit ( see the extract set out at paragraph 26 above) that he was actually referred to the defendants by Robert Cavallaro, the local real estate agent.
56. On 23 June Hughes Trueman sent a fee proposal ($17,140) for the preparation of relevant engineering documents for lodgment with the council for issue of a construction certificate. On the same day, Mr. O’Meara met with Gordon Griffith at the Council to discuss the most appropriate water detention basin for the development (Mr. O’Meara’s affidavit, paragraph 25); he noted this in his diary.
57. There is no relevant activity, according to the parties’ chronologies, between 23 June and 19 August 2004. During this period, on 13 August 2004, Mr. Romeo sent a fax to Budd & Partners seeking a further quote for the development (Exhibit 2).
58. Mr Romeo, in cross-examination was asked:
“Q. Now, Mr Romeo, you were also asked some questions about when you actually reached agreement with Mr O’Meara, and I think you indicated that agreement had been reached in June, well before, I think your answer was, well before the heads of agreement had been signed? Do you recall that?
A. Yes.Q. And then you were asked why it is after that date you wrote to Turners?
A. That’s correct.Q. Do you recall that? And you indicated that you wanted to see what they could come back with?
A. See what sort of figures they would come back at.Q. Then you were also given a document dated 13 August to Buddy and Partners?
A. Budd and Partners, yeah.Q. So what, just double checking Mr O’Meara’s costings?Q. Yes. And you asked for a quote from them. Can you indicate why you did that?
A. Also just to see what the comparable price was from another contractor in Griffith. Just to compare, just to see what sort of figures they would come back at.
A. Yeah. Well, one was from out of town and one was a local.” (T-242 – 3)
59. Settlement occurred on 19 July. It was not until 19 August 2004 that the plaintiff and first defendant entered into the written agreement for $37,500 per lot. The reason for not doing so earlier, if time was so vital to the project, is not explained.
Mr Romeo’s discussions with Mr O’Meara between 9 June and 19 August
60. Mr Romeo’s evidence concerning the June meeting and other discussions he had with Mr O’Meara up to the date of signing of the heads of agreement is also the subject of challenge. These differences have been analysed in detail in the next section of this judgment. Briefly, it is the evidence of Mr O’Meara that this was the first time that the turnkey subdivision was first discussed. However, Mr Romeo’s affidavit, at paragraph 26, does not refer to any discussion of the turnkey issue. He says that on 9 June the following conversation occurred:
Mr Romeo: “How is the CC going with the Council? We came up to organising the picking of the crop and agree on prices for the sale of the Lots with the agent. Do you anticipate any problems with the timing?”
Mr O’Meara: “No serious issues to worry about”.
Mr O’Meara: “The Christmas break doesn’t come into play. It will be done by then”. (Paragraph 26 of Mr Romeo’s affidavit).Frank Calabria: “Have you taken into account the Christmas break?”
61. If this conversation is predicated upon Mr O’Meara having volunteered, in the meeting of 28 April 2004, to commence work on the lodging of a construction certificate, it is hard to see how he could have done so in circumstances where he had not been told the name of the plaintiff company (which had yet to be incorporated) and where contracts were not exchanged until 31 May 2004.
62. Mr O’Meara’s version of events, as set out in paragraph 21 of his affidavit, was that it was on this occasion that he was asked what kind of work his company would undertake if the project was a turnkey project, and he made enquiries about the funding for the project. None of this is referred to in Mr Romeo’s affidavit.
63. Mr Romeo says, in paragraph 31 of his affidavit, that he relied on the representations made by Mr O’Meara when the company exchanged and settled the purchase and that if he had not been aware that Mr O’Meara could not or would not complete the subdivision within 4 to 6 months, he would have gone back to the other two developers referred to above to lock in a time. He said he prepared all his figures with an April deadline. However, as the defendants have noted in their written submissions, bank records, such as applications for finance and other documentation which would support this contention, have not been tendered.
The circumstances surrounding the entry into the contract by the parties
64. On 19 August 2004 the plaintiff and defendants signed heads of agreement prepared by Mr O’Meara. The contents of this document are as follows:
“HEADS OF AGREEMENT:
DEVELOPMENT OF FARM 2616 PORTION 806 BRAYNE RD GRIFFITH
This is an interim agreement between Cazazure Pty Ltd ABN 1209287087 [sic] of 1/39 Barbara Street Fairfield 2165 as the owner of farm 2616 portion 806 Brayne Road Griffith and Murrumbidgee Estate Developments Pty Ltd ABN 280 669 829 38 [sic] for the development of the above property and subdivision into 15 rural residential allotments as per the approved plan and development approval granted by Griffith City Council.
Cazazure Pty Ltd agrees to pay Murrumbidgee Estate Developments Pty Ltd the sum of $562,500.00 exclusive of GST for the above works on the basis of regular and progressive payments as work proceeds. The basis of the contract shall be as per Australian Standards – Design and Construct, a copy of which will be included in the main contract.Murrumbidgee Estate Developments Pty Ltd (Murrumbidgee Estate Developments Pty Ltd) agrees to undertake all necessary works to enact the subdivision to councils [sic] satisfaction from the start of the design phase to registration of linen plan and certificate of title to the 15 lots. The work will include all approvals from relevant authorities and the payment of fees necessary to enact the subdivision as well as all physical works which are required. Murrumbidgee Estate Developments Pty Ltd agrees to carry out the works in a time manner not withstanding delays beyond its control including but not limited to approval times and the effects of weather.
CAZAZURE PTY LTD
MURRUMBIDGEE ESTATE DEVELOPMENTS
65. Frank Calabria was also present, according to paragraph 32 of the plaintiff’s affidavit. According to the conversation set out in Mr Romeo’s affidavit, Mr O’Meara indicated once the construction certificate was ready, a builder’s contract could be prepared and he repeated his statement that he was still quite confident that the development could be completed by Christmas.
66. According to Mr Romeo’s affidavit, he said:
He went on to say:“Michael, I think we should allow for completion by the end of February 2005. That allows for Council closing over Christmas. That’s still okay in terms of my financing”.
“In case of any more unexpected delays, I will work on April 2005 as being the absolute deadline. I have to finalise the signage and advertising by the agent, so I need an absolute deadline”.
Mr O’Meara said that the end of April gave him “lots of time” as the Lots would be ready “long before then”. Mr Romeo says, at paragraph 34 of his affidavit, that at the time of signing the agreement Mr O’Meara said:
“I’ll prepare a formal contract that will outline all the relevant information, including the Christmas completion date, as well as outlining the works”.
67. This version of the conversation is contradicted by Mr O’Meara at paragraphs 27-31 of his affidavit. He said he did not include in the heads of agreement a specified completion date, as he was unable to commit to one (paragraph 28), and that he had included in the contract the words that the first defendant would “undertake to complete the work in a timely manner notwithstanding any delays” followed by the references to the council and the weather. Mr O’Meara said he pointed this out to Mr Romeo, and said words to the effect that he had included other legitimate delays, of which the weather was an obvious example. He said that the time he gave to finish the project was that typically it should take around 12 months, but that there could be a lot of things outside his control that caused delay.
68. Mr Romeo’s version of “in a timely manner” is set out at paragraph 37 of his affidavit as meaning “by Christmas 2004”. In September 2004 Mr Romeo returned to Griffith with his brother, Mr Joe Romeo (who was also not called by the plaintiff). During this visit further assurances were given that the project would be completed well before April 2005, according to paragraphs 40 and 41.
69. Between October and December several “emerging delays” are referred to in the affidavit of Mr Romeo at paragraphs 42 to 46. According to Mr Romeo’s affidavit he was having “regular telephone discussions” with Mr O’Meara, complaining that things were moving very slowly. He had the properties on the market for sale off the plan and said that there were interested parties but there was “not much to look at yet”.
70. Mr O’Meara said he was still waiting on the construction certificate from Council.
December 2004 / January 2005
71. Two important conversations between Mr Romeo and Mr O’Meara occurred in December 2004 and January 2005.
72. On 17 December 2004 the defendants, according to Mr O’Meara’s affidavit, issued and posted an invoice for work that had been completed up to that point, for a total of $42,790. Mr Romeo said in evidence he did not receive it.
73. According to paragraph 56 of Mr Romeo’s affidavit, he did not receive the first invoice from Mr O’Meara dated 17 December 2004 until 14 February 2005 when “at my request, it was faxed to me”. He says in his affidavit that the invoice was for $42,790 and Exhibit 11 to his affidavit is a copy of the fax cover sheet, indicating that the original would be mailed.
74. In fact, the facsimile transmission which is attached encloses both the December and January invoices.
75. However, prior to this facsimile transmission being sent, on 6 January 2005, another letter was sent to the plaintiff by the defendants. The text of this document (which refers to the December 17 invoice in its contents) is as follows:
To: Roy Romeo“ MURRUMBIDGEE ESTATE DEVELOPMENTS PTY LTD
ME
ABN 28 066 982 938
PO BOX 2423 GRIFFITH
NSW 2680
Telephone: (02) 6964 4409
Facsimile: (02) 6964 4458
Date: 6/01/05
Fax: 02 9821 3566
SUBJECT: Brayne Road Rural Residential Subdivision (15 lots)
Payment Schedule:Enclosed is a summary of costs as per our agreement and broken down to activity based costs. Included also is a projection on a monthly basis of the costs of each activity. The project should be finished in April.
Murrumbidgee Estate Development Pty Ltd – Profile:
- Murrumbidgee Estate Developments Pty Ltd was formed in 1994 and has undertaken Turnkey subdivision projects for 10 stages of Murrumbidgee Estate residential subdivision in Griffith (300 lots)
- In this process Murrumbidgee Estate Developments Pty Ltd is responsible for commission, design and engineering design, liaison with Council, Murrumbidgee Irrigation and all relevant authorities including County Energy, AGL and Telstra
- Murrumbidgee Estate Developments Pty Ltd is responsible for obtaining construction certificates for all of the subdivision work including roads, water, drainage and sewer.
- Murrumbidgee Estate Developments Pty Ltd organises and lets minor specialised contracts for kerb and gutter, bitumen seal etc and ensures these works are carried out to council’s standards and that all relevant testing is carried out.
- Murrumbidgee Estate Developments Pty Ltd is responsible for engaging a registered surveyor to complete the final lot layout and produce a linen plan to lodge with council and subsequently (upon release) register the plan with the land titles office.
- The total value of work undertaken by Murrumbidgee Estate Developments Pty Ltd in the past 10 years is $12.0m.
[Signed M. O’Meara]Please contact me if further information is required.
Michael O’Meara
Managing Director”
BRAYNE ROAD SUBDIVISION COSTS Order of Work: Roadworks Kerb Water (Potable) Common Trench for Electricity Gas, Telstra & Road Crossings Stormwater Pits & Drainage Drainage Detention Works Erosion Control Cleaning General Earthworks Council Contribution & Fees Testing & QA Electricity Engineering /Survey/Linen Plan Restoration TOTAL TIMING OF PAYMENT CLAIMS: Dec-04 – Invoice dispatched Cleaning Engineering Design Works Consulting & Liaise with Authorities Initial Earthworks Sub Total Jan-05 – (subject to Council approving construction certificate) Earthworks Erosion Control Roadworks Road Crossings Testing Stormwater & Drainage Engineering & Consulting Sub Total Cont Feb-05 Earthworks Roadworks Stormwater & Drainage Drainage Detention Works Engineering & Consulting Testing Water Sub Total Mar-05 Drainage Detention Roadworks Kerb Water Stormwater & Drainage Common Trench Testing Engineering & Consulting Sub Total Apr-05 Roadworks (Bitumen) Water Testing Common Trench Survey & Linen Plan Restoration Electricity Council Contributions Sub Total TOTAL NB: All the above costs are excluding GST
76. The first of these invoices, dated 17 December 2004, was for $42,790 and the second, dated 31 January 2005, was for $97,900. Mr O’Meara’s evidence was that both accounts had been posted on the date indicated and that these were replacements sent to Mr Romeo at his request. The first of these documents, but not the second, is referred to in the 6 January letter.
77. The background to this letter is as follows. From 19 August 2004 the first defendant carried out work on the development pending the issuing by the Council of a construction certificate. The application for this certificate, and plans for a proposed drainage system, were lodged on 29 November 2004 and on 17 December 2004 the first defendant issues its first invoice for payment for $42,790, headed “Progress Claim 1”.
78. According to Mr. O’Meara, just after this invoice was sent, Mr. Romeo asked Mr O’Meara to say he had received it, but more importantly to ask him to provide a schedule showing an April 2005 finishing date. It is common ground that this was not for his own or for the plaintiff’s use. He had never sought written confirmation in the form of a schedule of works. The purpose of obtaining this letter was to help get bank funding for the project, according to Mr. O’Meara, who said the following conversation took place:
Mr O’Meara: “Yeah that’s fine but it does concern me a bit that you assured me the project was fully funded, banks just don’t put up this kind of money overnight you know. I will send you a schedule showing an April finish date, which is the absolute earliest finish possible and when we would need final payment, if it speeds up our ability to be paid when we submit our invoices to you”.Mr Romeo: “I have received your invoice and was wondering if you could provide me with a schedule showing an April finish date so that I can get my funding with NAB in order”.
79. This is why on 6 January 2005 Mr. O’Meara provided a schedule to Mr. Romeo personally, which said:
“Enclosed is a summery [sic] of costs as per our agreement and broken down to activity-based costs. Included also is a projection on a monthly basis of the costs of each activity. The project should be finished in April.”
80. As can be seen from the document set out above, this was followed by a profile of the activities of the first defendant. The next two pages set out that an invoice had been dispatched in December 2004. This was followed by a subheading:
“Jan –05 (subject to Council approving Construction certificate)”.
81. As can also be seen from the schedule set out above, a full set of entries also appear for February, March and April 2005.
82. The program and letter of 6 January 2005 are pivotal documents in the proceedings, because the plaintiff claims that these documents are contractual documents between the parties, forming part of the agreement entered into on 19 August 2004, while the defendants claim it is a post-contractual document prepared by Mr O’Meara to assist the plaintiff to obtain funding from the bank.
83. The parts of the document to which the plaintiff has drawn my attention, at paragraphs 29 ff in the written submissions are as follows:
(a) The document amounts to a “program” and as such falls within clause 32 of the Australian Standards (“AS”) contract (Exhibit D) which provides that a program which is a written statement showing the date by which, or the times within which, the various stages or portions of work are to be carried out or completed, and thus a contract document.
It is asserted that by reason of the provisions of the AS contract, which is referred to in the heads of agreement as being the basis of a contract and a document which will be included in the main contract, becomes thereby a contractual document.
(b) The heading “order of work” and “timing of payment claims” is in accordance with what would be expected from a program and the completion date of April 2005 makes this clear.
(d) The program does not state that the April completion date is subject to council or weather delay and the plaintiff submits that this is consistent with the plaintiff’s construction of the heads of agreement and construction of the word “notwithstanding”. The only exception is the reference under “January 2005” to “subject to council approving construction certificate”.(c) In addition to amounting to a programming document and thereby forming a part of the contract, the reference to April 2005 as the final date for completion of all works is confirmed by the “For Sale” signs and sale advertisements in newspapers placed by the plaintiff on the premises for a considerable period of time (see Tender Bundle documents 10-18). It is submitted that this is “subjective” evidence of the parties’ intention to complete the works by April 2005.
84. I pause to note that the 6 January statement states quite clearly, next to the December 2004 entry, the words “Invoice dispatched” with a subtotal of $38,900. If this subtotal is multiplied by 1.1 (to add GST) the total is $42,790, which is the total referred to at [71] and [72]. This is consistent with an invoice having in fact been issued on 17 December 2004 to the plaintiff and not February 2005, as claimed by Mr Romeo.
85. The plaintiff submits that the failure of the council to issue the construction certificate did not prevent the defendants from complying with the order or works and the timing of payment claims set out in the program of works evidencing no delay due to this possible impediment. In fact, the construction certificate was issued on 19 May 2005 (affidavit of Mr O’Meara, paragraph 75), not January 2005. The plaintiffs have not, however, made any allowance for this delay, despite it being, on their own case, a matter of concession and agreement between the parties.
86. In addition, the payment program does not refer to the withholding of any percentage (let alone 30%) of the payment instalments. I note the explanations given to me in oral submissions to the effect that it is business practice not to do so but the fact remains that even on the plaintiff’s evidence, no mention of the withholding of 30% of the payment instalments was ever made prior to the telephone conversation Mr Romeo had with Mr O’Meara on 27 March 2005.
(i) Did the plaintiff rely on the said conduct?
Answer : There was no such conduct to rely upon.
Answer : I formally note this question was before me at the commencement of the trial, but no answer is required as this is no longer in issue.(j) Did the plaintiff fail to mitigate its loss?
267. I accordingly make the following orders:
(1) Judgment for the defendants.
(2) Judgment for the first defendant/cross-claimant against the plaintiff/cross-defendant in the sum of $70,881.04, together with pre- and post-judgment interest at UCPR rates.
(3) The parties have liberty to bring in short minutes or order reflecting the agreed sum for pre- and post-judgment interest for entry of judgment on the cross-claim.
(4) The plaintiff/cross-defendant pay the costs of the first defendant/cross-claimant and of the second defendant.
(6) Exhibits retained for 28 days.(5) Liberty to restore re interest and costs
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