Décor Ceilings Pty Ltd v Cox Constructions Pty Ltd (No 2) - [2005] SASC 483

SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge: Civil)
DECOR CEILINGS PTY LTD v COX CONSTRUCTIONS PTY LTD; COX CONSTRUCTIONS PTY LTD v DECOR CEILINGS PTY LTD (No 2)
Judgment of The Honourable Justice Besanko
20 December 2005
ARBITRATION - THE AWARD - APPEAL OR JUDICIAL REVIEW - POWERS OF COURT
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - THE CONTRACT
Appeals against award of arbitrator by contractor and subcontractor – contractor ordered to pay subcontractor sum for delay claim – subcontractor appealed on basis that additional hours claim should also have been allowed – global claim – submitted that arbitrator erred in requiring corroborative evidence in support of such claim – contractor appealed on basis that delay claim should not have been allowed – submitted that both delay claim and additional hours claim failed because subcontractor did not follow procedures specified in contract for dealing with loss and damage resulting from delay or disruption and that those procedures provided exclusive means of recovery for such loss and damage; alternatively, that both claims failed because subcontractor did not serve notice before claim.
Held, dismissing contractor’s appeal and allowing subcontractor’s appeal – in relation to contractor’s appeal, no reason to interfere with conclusion of arbitrator as to what constituted contract – ordinary remedies for breach of contract not excluded – as to notice before claim point, held that such notice a condition precedent – no obligation on subcontractor to plead it – no reason to interfere with arbitrator’s finding that contractor did not give proper notice of this point – in relation to subcontractor’s appeal, arbitrator erred in requiring corroborative evidence – award returned to arbitrator to be determined in accordance with reasons.
Commercial Arbitration Act 1986 s 38; Supreme Court Rules 1987 r 46.07, referred to.
Decor Ceilings Pty Ltd v Cox Constructions Pty Ltd 545/04; Cox Constructions Pty Ltd v Decor Ceilings Pty Ltd 566/04 (2004) 235 LSJS 81; Decor Ceilings Pty Ltd v Cox Constructions Pty Ltd [2005] SASC 146; Masters v Cameron (1954) 91 CLR 353; Sinclair Scott & Co Ltd v Naughton (1929) 43 CLR 310; Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622; G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631; Hudson Investment Group Ltd v Australian Hardboards Ltd [2005] NSWSC 716; Graham Evans Pty Ltd v Stencraft (2000) 16 BCL 335; Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689; Mancorp Pty Ltd v Baulderstone Pty Ltd (trading as Baulderstone Hornibrook) (No 2) (1992) 60 SASR 120; Jennings Construction Ltd v Q H & M Birt Pty Ltd (1986) 8 NSWLR 18; Opat Decorating Service (Aust) Pty Ltd v Hansen Yuncken (SA) Pty Ltd (1994) 11 BCL 360; Leighton Contractors Pty Ltd v South Australian Superannuation Fund Investment Trust (1995) 12 BCL 38; Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (1996)…

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: [2005] SASC 483
Decision Date: 20 December 2005

CaseChat Overview and Summary

The case of Décor Ceilings Pty Ltd v Cox Constructions Pty Ltd (No 2) involves an appeal against an arbitration award by both the contractor, Décor Ceilings, and the subcontractor, Cox Constructions. The primary dispute revolves around the interpretation and enforcement of a building contract, specifically concerning claims for delays and additional hours worked. The court was tasked with deciding whether the arbitrator's decisions on these claims were correct and whether the subcontractor's claims were properly substantiated.

The legal issues in this case centred on the enforceability of the arbitration award and the validity of the claims made by the subcontractor. Décor Ceilings argued that the delay claim should not have been allowed because the subcontractor did not follow the procedures specified in the contract for dealing with loss and damage resulting from delays or disruptions. Décor also argued that the additional hours claim should have been disallowed as it did not serve notice before making the claim. On the other hand, Cox Constructions appealed on the grounds that the arbitrator erred in requiring corroborative evidence for its additional hours claim and that the arbitrator's decision should be overturned.

The court dismissed Décor Ceilings' appeal and allowed Cox Constructions' appeal. Regarding Décor Ceilings' appeal, the court found no reason to interfere with the arbitrator's interpretation of the contract, holding that ordinary remedies for breach of contract were not excluded. The court also held that the requirement for notice before making a claim was a condition precedent but did not need to be pleaded by the subcontractor. The court upheld the arbitrator's finding that Décor Ceilings did not give proper notice of this point. Concerning Cox Constructions' appeal, the court found that the arbitrator had erred in requiring corroborative evidence for the additional hours claim. The court therefore returned the award to the arbitrator to be determined in accordance with the court's reasons.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Not a great deal was said about this item in the submissions. I accept Decor’s submission that if the additional hours claim is allowed, the backcharge should not have been deducted from Decor’s claim. Had Decor performed the work reflected in the backcharge, that would have been an addition to its additional hours claim. The arbitrator should not deduct this item from Decor’s claim if he allows the additional hours claim.Conclusions Decor’s appeal should be allowed and the interim award of the arbitrator should be set aside. The interim award will be remitted to the arbitrator to be reconsidered in accordance with these reasons. Cox’s appeal should be dismissed. I will hear the parties as to the appropriate orders and costs.

Ratio Decidendi

Legal Principle Established

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