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CJD Equipment v A&C Constructions

CJD Equipment v A&C Constructions

Case [2009] NSWSC 1362 10 December 2009

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CITATION: CJD Equipment v A&C Constructions [2009] NSWSC 1362

HEARING DATE(S): 6/10/09, 07/10/09, 08/10/09, 09/10/09.

JUDGMENT DATE :
10 December 2009

JURISDICTION: Equity Division
Technology & Construction List

JUDGMENT OF: McDougall J at 1

DECISION: See paragraphs [407] to [410] of the judgment.

CATCHWORDS: BUILDING AND ENGINEERING CONTRACTS – construction – terms to be implied where contractual documents limited – whether implied term of fitness for purpose – performance – whether design defective – whether caused damage to constructed premises – whether subcontractors made representations to the principal – whether resultant liability of sub-contractors – remedies – damages – quantification – apportionment of damages between defendants – mitigation – whether plaintiff mitigated loss. - TORT – whether duty of care owed – whether plaintiff relevantly vulnerable – scope of duty – whether damage to building properly characterised as economic loss – causation – whether loss complained of caused by design or representations made by defendants – whether plaintiffs’ amendments to design a novus actus interveniens.

LEGISLATION CITED: Civil Liability Act 2002
Evidence Act 1995 (NSW)
Trade Practices Act 1974
Uniform Civil Procedure Rules

CATEGORY: Principal judgment

CASES CITED: Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Bryan v Maloney (1995) 182 CLR 609
Digi-Tech (Australia) Ltd v Brand (2004) 62 IPR 184
Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2008) 68 ACSR 595
Jones v Dunkel (1959) 101 CLR 298
Murphy v Brentwood District Council [1991] 1 AC 398
Perre v Apand Pty Ltd (1999) 198 CLR 180
Ralf Dutton v Jalapen Pty Ltd (1994) 10 BCL 338
Sutherland Shire Council v Heyman (1985) 157 CLR 424
Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515

PARTIES: CJD Equipment Pty Limited (Plaintiff)
A&C Constructions Pty Limited (First Defendant)
Allan Keith Jeffree (Second Defendant)
GF Murphy Consulting Pty Limited (Third Defendant)
Telford Building Systems (Aust) Pty Limited (Fourth Defendant)
Peter Marcus Consulting Engineers Pty Limited (Fifth Defendant)

FILE NUMBER(S): SC 55065/08

COUNSEL: F C Corsaro SC / D C Price (Plaintiff)
E M Olsson SC / M P Tanevski (First and Second Defendants)
R J Cheney (Third Defendant)
I G B Roberts (Fourth Defendant)
D Fagan SC (Fifth Defendant)

SOLICITORS: The Builder's Lawyers (Plaintiff)
Walsh & Blair Lawyers (First and Second Defendants)
Kennedys Lawyers (Second Defendant)
DLA Phillips Fox (Fourth Defendant)
Colin Biggers & Paisley (Fifth Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

McDOUGALL J

10 December 2009

55065/08 CJD EQUIPMENT PTY LIMITED v A & C CONSTRUCTIONS PTY LIMITED & 4 ORS

JUDGMENT

1 HIS HONOUR: The plaintiff (CJD) imports, sells and services heavy earthmoving and construction machinery. It carries on that business throughout Australia, including (since about March 2003) from premises at Smeaton Grange in New South Wales (the Smeaton Grange premises). The Smeaton Grange premises were constructed for CJD by the first defendant (A & C). CJD says that the premises are defective, and unfit…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading CJD Equipment v A&C Constructions

Details

AGLC: CJD Equipment v A&C Constructions [2009] NSWSC 1362
Case: [2009] NSWSC 1362
Decision Date: 10 December 2009

CaseChat Overview and Summary

The matter before the court was a dispute between CJD Equipment and A&C Constructions regarding the construction of a premises. The primary issue was whether A&C Constructions breached their contractual obligations by providing a defective design, which subsequently caused damage to the premises. Additionally, the court had to determine whether the subcontractors of A&C Constructions were liable for the damage, based on representations they made to CJD Equipment. The case also raised questions about the duty of care owed by the defendants, the vulnerability of the plaintiff, and the scope of that duty. Furthermore, the court had to decide whether the damage to the building should be characterised as economic loss and whether the loss complained of was caused by the design or the representations made by the defendants. Lastly, the court examined whether the plaintiffs' amendments to the design constituted a novus actus interveniens, thereby breaking the chain of causation.

The court began by considering whether there was an implied term of fitness for purpose in the contract. It found that, given the limitations in the contractual documents, such a term could be implied. The court then assessed whether the design provided by A&C Constructions was defective. The court determined that it was, as it did not meet the implied requirement of fitness for purpose. The court further examined whether this defective design caused the damage to the premises. It concluded that the damage was indeed caused by the design provided by A&C Constructions. The court also addressed the liability of the subcontractors, finding that they could be held responsible for the damage based on the representations they made to CJD Equipment.

In determining the appropriate remedies, the court assessed the damages claimed by CJD Equipment. It found that some of the damages were too remote and not reasonably foreseeable. The court then apportioned the damages between the defendants, taking into account their respective contributions to the damage. The court also considered whether CJD Equipment had mitigated their losses. It found that they had not fully mitigated their losses and, as a result, reduced the damages awarded. Finally, the court examined whether CJD Equipment could recover economic loss from the defendants. It concluded that the damage to the building could be characterised as economic loss and that the defendants owed a duty of care to the plaintiff, who was deemed relevantly vulnerable. The court found that the loss was caused by the design or representations made by the defendants, and that the plaintiffs’ amendments to the design did not constitute a novus actus interveniens.

The court ordered A&C Constructions to pay CJD Equipment a reduced amount of damages for the breach of the implied term of fitness for purpose and the defective design. The subcontractors were also ordered to contribute to the damages based on their representations to CJD Equipment. The court further ordered that the defendants' liability was joint and several, and that the apportionment of damages between them was to be determined in further proceedings.

Orders