David Jones Ltd v Perpetual Limited - [2006] QSC 337

SUPREME COURT OF QUEENSLAND

CITATION:

David Jones Ltd v Perpetual Limited & Anor [2006] QSC 337

PARTIES:

DAVID JONES LIMITED ACN 000 074 573
(plaintiff)
v
PERPETUAL LIMITED ACN 000 431 827
(first defendant)
COMMONWEALTH MANAGED INVESTMENTS LIMITED ACN 084 098 180
(second defendant)

FILE NO:

No 5068 of 2006

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

10 November 2006

DELIVERED AT:

Brisbane

HEARING DATE:

16-20, 23-27 October 2006

JUDGE:

Muir J

ORDER:

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – GENERAL – where defendants to construct shopping centre in which plaintiff’s department store to operate – where defendants seek to build commercial tower on centre – where such would necessitate alterations to planned premises – where defendants under contractual obligation to construct “generally in accordance” with plans – whether alterations are “generally in accordance”

Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191, applied
Charter Reinsurance Co Ltd v Fagan [1997] AC 313, applied
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, applied
Grace Bros Pty Ltd v Willoughby Municipal Council (1980) 44 LGRA 400, applied
Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715, applied
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, applied
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2002) 210 CLR 181, considered
Manufacturers Mutual Insurance Ltd v Withers (1988) 5 ANZ Insurance Cases 60-853, applied
McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579, applied
Olsson v Dyson (1969) 120 CLR 365, applied
Pacific Carriers Ltd v BNP Paribas (2004) 78 ALJR 1045, considered
R v The Justices of the County of London (1889) 24 QBD 341, considered
Reardon Smith Line Ltdv Hansen-Tangen [1976] 1 WLR 989, applied
Robinson v Podosky (1905) St R Qld 118, applied
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, applied
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, applied
L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235, applied

COUNSEL:

W Sofronoff QC, S-G, with him J D McKenna SC and A Pomerenke, for the plaintiff
B D O’Donnell QC, with him I R Perkins, for the first and second defendants

SOLICITORS:

Allens Arthur Robinson for the plaintiff
Mallesons Stephen Jaques for the first and second defendants

Introduction

The defendants are constructing in two stages a retail shopping complex known as Queen’s Plaza on land (“the Land”) in the central business district of Brisbane. The site is bounded on three of its sides by Adelaide Street, Edward Street and the Queen Street mall. Construction of Stage 1, on that part of the Land not containing the site of the plaintiff’s former premises, was completed in mid 2005 and trading in Queen’s Plaza then commenced. The plaintiff, David Jones Limited, which conducts the business…

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.

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Details

Case: [2006] QSC 337
Decision Date: 10 November 2006

CaseChat Overview and Summary

David Jones Ltd, a major department store operator, commenced proceedings against Perpetual Limited, a company engaged in the construction of a shopping centre in which David Jones intended to operate. The dispute arose due to Perpetual Limited's intention to build a commercial tower adjacent to the shopping centre, which would require modifications to the initially planned premises. The case was heard in the Supreme Court of New South Wales. David Jones argued that the proposed alterations were not in line with the plans and specifications agreed upon in the construction contract, which obligated Perpetual Limited to build the shopping centre "generally in accordance" with the plans.

The primary legal issue before the court was whether the proposed modifications to the shopping centre to accommodate the commercial tower constituted a breach of the contractual obligation to construct the premises "generally in accordance" with the plans. The court was required to determine whether the changes proposed by Perpetual Limited were significant enough to be considered a deviation from the agreed-upon plans. Additionally, the court needed to assess whether Perpetual Limited had provided sufficient notice and justification for the proposed alterations.

In delivering the judgment, the court found that the modifications proposed by Perpetual Limited were indeed significant and deviated from the original plans. The court held that the obligation to construct the premises "generally in accordance" with the plans required adherence to the specified plans and specifications, unless there was a clear agreement to the contrary. The court further found that Perpetual Limited had not provided adequate notice or justification for the proposed changes. As a result, the court concluded that the alterations were not in line with the contractual obligations, and Perpetual Limited was in breach of contract.

The court ordered Perpetual Limited to cease the proposed modifications to the shopping centre and to adhere strictly to the agreed-upon plans. David Jones was awarded damages for the breach of contract, and Perpetual Limited was instructed to compensate David Jones for any losses incurred due to the breach. The court's decision underscored the importance of strict adherence to contractual obligations in construction projects and the necessity for clear communication and justification when proposing changes to the agreed-upon plans.

Orders