Delnas Metal Roofing Pty Ltd v Australian Capital Territory
[2015] FCA 496
•20 May 2015
FEDERAL COURT OF AUSTRALIA
Delnas Metal Roofing Pty Ltd v Australian Capital Territory [2015] FCA 496
Citation: Delnas Metal Roofing Pty Ltd v Australian Capital Territory [2015] FCA 496 Parties: DELNAS METAL ROOFING PTY LTD (ACN 102 346 725) v AUSTRALIAN CAPITAL TERRITORY File number: ACD 68 of 2013 Judge: FOSTER J Date of judgment: 20 May 2015 Catchwords: PRACTICE AND PROCEDURE – whether the applicant should be given leave to amend the latest iteration of its Statement of Claim – whether the applicant’s pleaded contract case should be dismissed Legislation: Civil Law (Wrongs) Act 2002 (ACT)
Fair Trading (Australian Consumer Law) Act 1992 (ACT)
Federal Court of Australia Act 1976 (Cth), s 31A
Federal Court Rules 2011, r 26.01(1)Cases cited: Spencer v The Commonwealth (2010) 241 CLR 118 Date of hearing: 2 and 16 May 2014 Place: Sydney (via video link to Canberra) (heard in Canberra) Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 73 Counsel for the Applicant: Mr GJ Blank Solicitor for the Applicant: Trinity Law Counsel for the Respondent: Mr RP Clynes Counsel for the Respondent: ACT Government Solicitor
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 68 of 2013
BETWEEN: DELNAS METAL ROOFING PTY LTD (ACN 102 346 725)
ApplicantAND: AUSTRALIAN CAPITAL TERRITORY
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
20 MAY 2015
WHERE MADE:
SYDNEY (VIA VIDEO LINK TO CANBERRA)
THE COURT ORDERS THAT:
1.The Interlocutory Application filed by the respondent on 13 September 2013 be dismissed.
2.The applicant (Delnas Metal Roofing Pty Ltd) pay the respondent’s costs of and incidental to that Interlocutory Application.
3.By 8 June 2015, the applicant lodge with the Associate to Foster J a draft of any Further Amended Statement of Claim in respect of which it proposes to seek the leave of the Court to file and serve which proposed pleading must reflect the conclusions set out in Reasons for Judgment published this day (20 May 2015) (Delnas Metal Roofing Pty Ltd v Australian Capital Territory [2015] FCA 496) in respect of a proposed Further Amended Statement of Claim first made available on 24 December 2013 and subsequently revised in May 2014.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 68 of 2013
BETWEEN: DELNAS METAL ROOFING PTY LTD (ACN 102 346 725)
ApplicantAND: AUSTRALIAN CAPITAL TERRITORY
Respondent
JUDGE:
FOSTER J
DATE:
20 MAY 2015
PLACE:
SYDNEY (VIA VIDEO LINK TO CANBERRA) (HEARD IN CANBERRA)
REASONS FOR JUDGMENT
In 2007, the Government of the Australian Capital Territory (the Territory) began planning for the construction of Gungahlin College (the college). The college was intended to be a state of the art facility for the school years 11 and 12 as well as a learning centre for the Canberra Institute of Technology and the Gungahlin District Library. It was designed to service the growing residential area in and around Gungahlin which is one of the more recently established residential areas in the ACT. The target cost for the project, inclusive of project manager’s fees, was $68,965,000 (GST inclusive).
The college was to comprise five main buildings.
The Territory planned to open the college at the beginning of the school term commencing in 2011.
The early earthworks for the preparation of the commencement of construction began in mid-2009. Construction of the first two main buildings began in late 2009. The College was substantially completed by early 2011.
One of the contractors retained by the Territory to carry out work on the college project was the applicant in this proceeding, Delnas Metal Roofing Pty Ltd (Delnas).
Delnas was retained in early 2010 to construct the roofs required for the five buildings comprising the college project.
This proceeding was commenced on 3 July 2013 when Delnas filed its Originating Application and Statement of Claim. Before those documents were filed, there had been an exchange of correspondence concerning a draft Statement of Claim which Delnas had provided to the Territory. The Territory complained to Delnas’ solicitors that the draft Statement of Claim was deficient in a number of respects. After this proceeding was commenced, the parties continued to engage in correspondence about the adequacy of the pleading. Confronted with these ongoing objections to its pleading, on 7 August 2013, when the matter was first returned before the Court, Delnas sought and was granted leave to amend its Statement of Claim in such manner as it may be advised, such Amended Statement of Claim to be filed and served by 16 August 2013.
Delnas availed itself of this opportunity to amend its Statement of Claim. On 19 August 2013, it filed an Amended Statement of Claim (ASC). On 13 September 2013, the Territory applied to strike out most of the ASC. In addition, it applied for an order for summary judgment in respect of “… so much of [Delnas’] claims as are pursued … as the Court considers appropriate”.
After the Territory filed that Application, the Court was persuaded to allow the parties time to ready themselves for a contest concerning the adequacy of the ASC and any further proposed Amended Statement of Claim. In the result, by Interlocutory Application filed on 24 December 2013, Delnas sought leave to amend the ASC. The draft pleading propounded at this time was an entirely new document. I shall refer to that document as Delnas’ proposed Further Amended Statement of Claim (FASOC). The FASOC is found at pp 8–19 of Exhibit MSF-A to the affidavit of Maurice Sebastian Falcetta sworn on 24 December 2013. Mr Falcetta is the solicitor for Delnas.
A hearing took place before me for some time on 2 May 2014 and again for some time on 16 May 2014. The Court was asked to determine the following questions:
(a)Whether Delnas should have leave to amend yet again its Statement of Claim in the terms of the FASOC; and
(b)Whether the Court should order that the contract claim which Delnas has endeavoured to plead on a number of occasions should be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01(1) of the Federal Court Rules 2011.
Counsel for the Territory submitted that the Territory’s Interlocutory Application which had been filed on 13 September 2013 in order to attack the ASC was still available to the Territory as a vehicle for seeking summary judgment in respect of Delnas’ new contract claims as alleged in the FASOC. Counsel who appeared for Delnas at the hearing took issue with this although his complaints in this regard are more a matter of form than substance. Were I to come to the view that the contract case sought to be mounted by Delnas has no reasonable prospects of success, I would not regard myself as unable to summarily dismiss that claim merely because the current formal Interlocutory Application in which that relief is sought was filed in order to attack an earlier iteration of Delnas’ pleading.
By these Reasons for Judgment, I determine Delnas’ application for leave to amend the ASC in accordance with the text of the FASOC. I will also address the Territory’s claim for summary dismissal of Delnas’ alleged contract claim.
THE RELEVANT FACTS
By formal Project Management Agreement dated 30 July 2009 (PMA), the Territory engaged PBS Building (ACT) Pty Ltd as project manager for the college project. On or around 7 August 2012, that company changed its name to PLY (ACT) Pty Ltd (PLY).
Despite PLY’s involvement in the project, each trade contractor whose contract works were expected to cost in excess of $200,000 was required to enter into a contract directly with the Territory. Each of those individual trade contractor contracts was based upon General Conditions of Contract AS2124-1992 (AS2124), certain amendments to AS2124 and other special conditions of contract. For the purposes of each trade contractor’s contract, PLY was appointed as the superintendent.
Pursuant to cl 10.3 of the PMA, PLY was to develop and implement a project master program for the completion of the works by the due date. Under the PMA, PLY was responsible for ensuring that all contractors engaged to undertake various trade, subcontract or supply tasks met the requirements of the project program for completion.
PLY was also charged with the responsibility of managing the tender process.
On 14 November 2009, tenders were called for the Metal Roofing and Skylight Works at the college (the roofing works).
Delnas collected the Request for Tender documents package (RFT documents) and the relevant drawings in respect of the roofing works in late November 2009.
Three separate addenda to the tender documents were issued in December 2009. The first extended the tender closing date to 15 December 2009. The second extended the tender closing date to 22 December 2009 and also amended the RFT documents in some respects. The third provided clarification in respect of the RFT documents.
On 18 December 2009, Delnas lodged its initial tender (that is to say, its tender dated 15 December 2009) for the carrying out of the roofing works. In Item 1 of the tender schedule, Delnas spelled out its tender price. The total price which was quoted by Delnas was $1,560,640 comprising various specified components of work with an individual price allocated to each such component. The line item for GST was left blank.
On 29 January 2010, in a post tender interview, PLY asked Delnas to resubmit its tender on a GST inclusive basis and to confirm that Colourbond wall cladding to the gymnasium (which was one of the five buildings to be constructed at the college) had been included.
In the FASOC, Delnas alleges that, on or about 1 February 2010, Mr La Rance, an employee of PLY, requested the principal of Delnas, Mr Leishman, to arrange for Delnas to submit a revised tender offer for the roofing works. It is not clear whether this assertion on behalf of Delnas is disputed by the Territory. However, there is no doubt that some form of communication was made by PLY to Delnas which led to Delnas submitting a revised tender offer.
On 1 February 2010, by documents dated that day, Delnas submitted a revised tender offer to PLY. In that revised tender offer, the quoted price for the roofing works was increased by $156,064, which is 10% of the total contract price quoted by Delnas in its original tender offer ($1,560,640). The amount of $156,064 was specified in the revised tender offer as the GST amount payable in respect of its earlier quoted price. When the GST amount was added to the quoted price for the roofing works in the original tender document, the total of the revised price became $1,716,704. In its revised tender offer, Delnas also confirmed that Colourbond wall cladding to the gymnasium had been included in the tender, as per discussions at the tender interview which took place on 29 January 2010.
In his letter dated 1 February 2010, under cover of which he submitted Delnas’ revised tender, Mr Leishman said that he attached a copy of Delnas’ current rates for additional work (flashing penetrations, supply and fitting dektites and day labour rates) for the information of PLY.
At pars 12–14 of the FASOC, Delnas alleges:
12.On or about 3 February 2010 the Applicant submitted a revised tender offer for the Roofing Works.
Particulars
(a) DMR-Memo-000001 dated 1 February 2010;
(b) DMR-Memo-000002 dated 3 February 2010.
13.It was a term of the revised tender offer that it would remain open until 12 February 2010 after which time it would lapse.
14.The Respondent did not accept the revised tender offer by 12 February 2010 and the offer lapsed.
The documents referred to at par 12 of the FASOC comprise a letter from Delnas to PLY dated 3 February 2010 which was sent under cover of a memorandum dated the same day. The covering memorandum was in the following terms:
Ryan
Please find attached a letter confirming our commitment to resources at the Gungahlin College project. Accompanying this, is a letter from our accountant as requested.
The letter dated 3 February 2010 was in the following terms (omitting formal parts):
GUNGAHLIN COLLEGE
I write with regard to resourcing the above mentioned project.
I wish to confirm our commitment to providing adequate resources and equipment to meet the PBS Building (ACT) Pty Ltd target of completion by 3 August 2010 as per the program provided to us at the time of tender.
Please note that our commitment to the aforementioned date, may be subject to change should other trades influencing our scope of works, cause a delay to the overall program.
This commitment is subject to receiving your Letter of Intent to award Delnas the roofing and wall cladding contract by Friday 12 February 2010. This is required to allow Delnas adequate time to organise the necessary resources.
I may be contacted on 6239 3999 should you require any further information and/or clarification on this matter.
The subject matter of this correspondence was, as the covering memorandum stated, Delnas’ “commitment to resources”. In the letter itself, Delnas gave an assurance that it would commit adequate resources and equipment to meet the target completion date of 3 August 2010 “… as per the program provided to us at the time of tender”. However, that stated commitment was qualified by the contents of the third and fourth paragraphs of the letter.
Those paragraphs are directed to the subject matter of the letter, ie the commitment of resources. There is no express statement in the letter of 3 February 2010 to the effect that Delnas’ revised tender offer was to remain open only up to and including 12 February 2010 after which time it would not be capable of acceptance and would lapse. Nor, in my judgment, can the letter sensibly be read as constraining the time during which Delnas’ tender offer would be available for acceptance. In any event, the submission of a tender offer by Delnas was always subject to the terms and conditions of the RFT documents which did not permit Delnas to dictate the period during which a tender offer made pursuant to those documents might remain open.
In the evidence before me, there was tendered a handwritten file note made by Nicole Leishman on Delnas’ copy of DMR-Memo-000002 dated 3 February 2010. That handwritten file note appears to have been made by Ms Leishman on 19 February 2010. The note suggests that Ms Leishman had, earlier that day, left a message for Mr La Rance at PLY to the effect that Delnas was withdrawing its tender. The note also records that the tender was being withdrawn because Delnas felt that, as at 19 February 2010, it would be unable to resource the roofing works appropriately given that it had by then been awarded other work. The file note also recorded that, shortly after Ms Leishman had left the message for Mr La Rance in the terms which I have summarised, another employee of PLY, Ivan Olivares, telephoned Ms Leishman and informed her that Delnas had been awarded the job. The note records that Mr Olivares asked Delnas to reconsider the withdrawal of its tender. The note also records that Mr Leishman then telephoned Mr Olivares in order to discuss issues of resourcing for the project and the possibility of securing more money for Delnas to fund those additional resources.
On 19 February 2010, PLY furnished to Delnas at about 11.23 am on that day a revised program of works which is dated either 18 January 2010 or 19 January 2010.
On 23 February 2010, Mr Leishman sent an email to Mr Phillips at PLY. That email is in the following terms (omitting formal parts):
As notification of acceptance of our tender submission for the Gungahlin College project has happened at such a late stage, Delnas’ resources have already been committed to other projects.
Delnas are now in the position where our tender price will need to increase by $135,800 plus GST in order for us to procure the additional resources required to complete the scope of works of the Gungahlin College project within your programming requirements.
Delnas now require a response from PBS Building by COB Thursday 25 February 2010, to enable us to proceed with securing the additional resources for commencement of our scope of works.
In the FASOC, this email is described as a further revised tender offer dated 23 February 2010 (see par 16 of the FASOC).
At pars 17–21 of the FASOC, Delnas pleads the following matters:
17.It was a term of the 23 February Tender that if the Revised Program were further revised such that the Applicant would incur further cost and expense, the Respondent would pay the Applicant for that cost and expense.
Particulars
(a)The term is express in clause 3 of the AS 2124-1992 (as amended) (AS2124) which formed part of the Request for Tender;
(b)On or about 22 February 2010 Daryl Leishman of the Applicant in a telephone conversation with Wayne Clarke or Ross Phillips said words to the effect, “it is going to cost extra $135,000 extra to source the additional labour” and Wayne Clarke or Ross Phillips on behalf of PLY as agent for the Respondent said to Daryl Leishman of the Applicant words to the effect, “we will sort that out later as you won’t need as many men as you think straight away”.
18.On or about 2 March 2010 the Respondent by its conduct accepted the 23 February Tender (the Roofing Agreement).
Particulars
(a)Conversation on or around 2 March 2010 between Clarke and Leishman to the effect ‘come to site so we can get you started’;
(b)PLY issued to the Applicant PSBS_MEMO-00015 dated 3 March 2010 that included the statement “Welcome to the Gungahlin College Project. I will issue you drawings today”;
(c)PLY Issued drawings to the Applicant on or around 2 March 2010;
(d)On 5 March 2010 the Applicant placed orders for materials required for the Roofing Works (orders 10862, 10863 and 10864) and were subsequently paid for those materials;
(e)On 17 March 2010 PLY inducted 4 of the Applicant’s employees onto the Project site.
19.The letter dated 23 February 2010 but not received until 24 February 2012 from the Respondent to the Applicant purporting to accept the original tender offer is of no effect.
20.The Respondent has not accepted the 23 February Tender in writing.
21.The parties have not entered into a Deed of Agreement for the Roofing Works.
The letter dated 23 February 2010 from the Territory to Delnas which is referred to at par 19 of the FASOC was in the following terms:
Contract No: 2010.2007.0399.440
Project: Gungahlin College – Metal Roofing and SkylightProject No: 2007.0399
The Australian Capital Territory accepts your offer dated 15 December 2010 [sic] including amended Tender Schedule dated 1 February 2010 for the Gungahlin College Metal Roofing and Skylight project for the GST-inclusive fee of one million, six hundred and ninety four thousand, seven hundred and four dollars ($1,694,704.00) and a GST-inclusive Provisional Sum of twenty two thousand dollars ($22,000.00) making a GST-inclusive Contract Price of one million, seven hundred and sixteen thousand, seven hundred and four dollars ($1,716,704.00).
With reference to Clause 6.2 of the General Conditions of Contract you will be required to execute the Contract Documents. A Courier will deliver the Contract Documents to you when they are ready for execution.
To enable the execution of the contract you are reminded that under Clause 5.4 of the General Conditions of Contract the Security deposit of $61,500.00 in an approved form must be lodged with this office within 28 days from the date of this letter.
In relation to Clause 35.2 of the General Conditions of Contract you are required to complete the work by 26 June 2010.
I do not know whether the conversation referred to in the particulars set out in subpar 17(b) of the FASOC is disputed nor do I know whether the email of 23 February 2010 sent by Mr Leishman to Mr Phillips was sent before or after that conversation. In any event, for present purposes, I note that it is Delnas’ case that the letter dated 23 February 2010 was not received by it until 24 February 2010.
As is made clear by par 18 of the FASOC, it is Delnas’ case that a binding contract was entered into between it and the Territory on or about 2 March 2010. It is alleged that that contract was accepted by the Territory by the conduct of PLY and the conduct of Delnas as specified in the particulars set out in par 18. Those particulars comprise particulars of steps which were taken on and after 2 March 2010. They are just as consistent with a conclusion that a binding contract was made on or about 23 February 2010 as they are with a conclusion that a binding contract was made on or about 2 March 2010.
There seems little doubt that, from about early March 2010, the Territory and Delnas conducted themselves as if they had, by then, already entered into a binding contract for the roofing works. In particular, Delnas entered the site in March 2010 and proceeded to carry out those works, submitted progress claims from time to time thereafter and was paid a significant sum of money for the works completed by it.
Under cover of a letter dated 13 April 2010, the Territory submitted to Delnas three copies of the Formal Instrument of Agreement for the college project. Delnas was asked to return the signed documents by 20 April 2010. The letter included in its subject matter a reference to “Contract No 2010.2007.0399.440”. That Formal Instrument of Agreement was never signed by either party.
The evidence discloses that Delnas made its progress claims from time to time by reference to that contract number.
On 3 March 2011, Delnas submitted to PLY a claim for a variation in the amount of $135,800 plus GST making a total of $149,380. That variation claim was described as a claim for supplying additional resources to complete the scope of works of the college project within the programming requirements of PLY as agreed prior to commencement on site. This claim for a variation became VA48 in Delnas’ list of claims for variations which were dealt with by PLY and in part accepted and in part rejected.
As matters presently stand, Delnas has been paid the contract sum as specified in its revised tender offer of 1 February 2010 together with an additional sum for those variations which have been approved by PLY.
Variation VA48 was rejected by PLY on 25 July 2011.
THE FURTHER AMENDED STATEMENT OF CLAIM
In the FASOC, after pleading that the binding contract between it and the Territory was made on or about 2 March 2010 (as to which see pars 18–21 of the FASOC), Delnas goes on to plead that PLY, as superintendent, was obliged to exercise its functions honestly and fairly. Delnas also alleges that the superintendent was required to act in good faith in exercising those functions. At par 24 of the FASOC, Delnas alleges that the superintendent was required to act in good faith when assessing whether or not to grant an extension of time and delay costs even where a claim for compensation in respect of such matters has not been sought by Delnas.
At pars 26–32 of the FASOC, Delnas pleads the following matters:
(a)The Revised Program issued to Delnas by PLY on or about 19 January 2010 required that the roofing works be completed by 3 August 2010;
(b)It was a term of the contract alleged by Delnas to have been made on or about 2 March 2010 that the Territory and PLY would ensure that the other trade works that were necessary before the roofing works could be carried out would be completed and constructed to a sufficient standard so that the roofing works could be undertaken in accordance with the terms of the email dated 23 February 2010 from Mr Leishman to Mr Phillips which included an increase in the tender price by $135,800 plus GST;
(c)The fact was that, when Delnas was due to commence on site, other trades had not completed their work sufficiently to allow Delnas to commence the roofing works in accordance with the original program of works;
(d)In any event, the fact also was that, when Delnas was to commence on site, other trades had not completed their work sufficiently to allow Delnas to commence the roofing works in accordance with the revised program made available to it on 19 January 2010.
At pars 31–34 of the FASOC, Delnas pleads the following matters:
31.The Revised Program was further revised by amended fortnightly programmes from PLY issued from time to time to the Applicant.
32. The further revisions of the Revised Program:
(a)compressed the available days to complete the Roofing Works; and
(b)caused the Applicant to incur additional expense to meet the practical completion date.
Particulars
(a)1843 additional man days (based upon the ‘as built’ program) at 8 hours per day at an hourly rate of $75 plus GST making a total of $1,105,800.00; OR
(b)alternatively, 1843 additional man days (based upon the ‘as built’ program of the applicant) at 8 hours per day at an hourly rate of $50 plus GST being the direct cost to the Applicant, making a total of $737,200; OR
(c)such other compensation as is reasonable in the circumstances.
33.As a result of the matters pleaded in paragraphs 29 to 31 the Applicant was:
(a)Unable to complete the Roofing Works within the scope of the 23 February Tender;
(b)Required to allocate inefficiently the resources available to it by working in a disjointed fashion across five buildings rather than in an ordered and continuous manner as set out in the Revised Program;
(c)Required to incur additional labour hire expense.
34.As a result of the matters pleaded above the Respondent:
(a)Was aware that the timeframes in the Revised Program did not reflect the reality of the timetable for completing the Project;
(b)Was aware that less time was available to complete the Works to meet the date for practical completion;
(c)Had an obligation to pay the additional costs incurred by the. [sic]
At par 35 ff, Delnas makes additional or alternative claims resulting from the changes in the programming of works referred to in the earlier paragraphs.
At pars 38–41, Delnas claims moneys due by way of variation to the contract which it claims it made with the Territory on 2 March 2010 (as to which, see par 18 of the FASOC).
At pars 45–51 of the FASOC, Delnas makes an alternative claim in contract based upon the proposition that a binding contract was entered into upon the terms of the RFT documents, the revised tender offer dated 18 December 2009 and the drawings and programs forwarded to Delnas by the Territory. This claim is anchored in the additional proposition that the Territory’s letter of 23 February 2010 constituted acceptance of Delnas’ revised tender offer upon the terms of the RFT documents. This alternative contractual claim proceeds upon the basis that the documents forwarded by Delnas to the Territory on 13 April 2010 contained all of the relevant terms of the binding contract which Delnas contends was entered into between it and the Territory. Upon that basis, in these paragraphs of the FASOC, Delnas claims the quantum of its unpaid variations and compensation for delay.
At pars 55–59 of the FASOC, Delnas claims compensation based upon its restitutionary claim.
At the second par 59–65, Delnas claims damages for and on account of an alleged misrepresentation by PLY which it is alleged to have made on behalf of the Territory. The misrepresentation relied upon is said to be the statement set out at subpar 17(b) of the FASOC to the effect that, in response to Mr Leishman’s enquiry about additional resources, Mr Phillips said: “We will sort that out later as you won’t need as many men as you think straight away.” In effect, Delnas complains in this part of the FASOC that it only agreed to a contract in the terms of the documents forwarded to it on 13 April 2010 and thereafter carried out the roofing works upon the basis that any amount reasonably incurred by Delnas to perform those works over and above those amounts factored into its original tender offer would be assessed as payable by PLY and paid by the Territory.
CONSIDERATION
It was submitted on behalf of the Territory that both the Territory and Delnas (at least insofar as its primary contentions are concerned) accept that Delnas and the Territory entered into a binding contract pursuant to which Delnas was to carry out the roofing works. While it may be accepted that Delnas also claims compensation on a quantum meruit basis, that claim is not the primary case advanced by Delnas in the FASOC but is expressed to be a second-ranking alternative case. Delnas relies upon both its contract cases in priority to its quantum meruit case. This latter claim is put forward upon the basis that no binding contract for the roofing works was ever entered into between Delnas and the Territory.
The Territory submitted that the points of difference between it and Delnas in respect of the parties’ competing contentions concerning contract are:
(a)When was a binding contract made; and
(b)What are the terms of that contract.
The Territory argued that a binding contract was made when Delnas received the Territory’s letter of 23 February 2010 (ie on that day or perhaps on 24 February 2010 being the date when Delnas accepts it received that letter). Upon that assumption, the Territory submitted that the contractual terms are to be found in the RFT documents (including the Conditions of Tender), the whole of AS2124 (subject to any modifications specified in the RFT documents) and Delnas’ revised tender offer dated 1 February 2010 submitted by Mr Leishman on or about that date.
By way of contrast, it is Delnas’ primary case that a binding contract was made on or about 2 March 2010 and that that contract did not include the general conditions in AS2124 or, at least, did not include all of those conditions but only some of them. Delnas contends that, in effect, Mr Phillips, on behalf of PLY and the Territory, agreed to consider Delnas’ claim for additional resources occasioned by a delay in the commencement of its works in a bona fide fashion although its contention in this regard does not rise so high as to amount to a contention that Mr Phillips agreed to pay $135,800 plus GST for such resources.
I have carefully considered the evidentiary materials placed before me in respect of the present Applications.
In my judgment, Delnas has no reasonable prospect of succeeding in its primary contractual claim based upon the proposition that the relevant binding contract in the circumstances of the present case was entered into on or about 2 March 2010 and included a term to the effect claimed in subpar 17(b) of the FASOC. In my view, were I to allow Delnas to plead such a case, it would be susceptible to being immediately struck out or summarily dismissed (for the relevant principles in respect of summary dismissal, see Spencer v The Commonwealth (2010) 241 CLR 118 at 131–132 [22]–[24] and at 132–133 [25]–[26] (all per French CJ and Gummow J); at 139 [52]–[53], at 140 [56] and at 141–142 [58]–[60] (per Hayne, Crennan, Kiefel and Bell JJ)). Further, in my view, there is no realistic possibility that the contractual position would be seen any differently after a final hearing on the merits.
The exchanges which took place between the parties on and after 3 February 2010 which are referred to at pars 12–18 of the FASOC did not operate to import into the contract which was ultimately entered into between the parties any term based upon the alleged conversation which took place on or about 22 February 2010 between Mr Leishman and Mr Phillips (or Mr Clarke) nor was there any commitment to address the question of delay and costs occasioned thereby otherwise than in accordance with the standard terms and conditions contained in AS2124 and the other RFT documents.
As I have already noted (at [28]–[29] above), Delnas’ letter of 3 February 2010 did not operate to put a time limit upon its revised tender offer but rather was focussed upon its desire to secure as strong a commitment as possible from PLY and the Territory that they would consider compensating Delnas for any additional resources which it was obliged to devote to the project by reason of the delay on the part of other contractors, PLY or the Territory. Further, the conversations which followed between Mr Leishman and Mr Olivares and Mr Leishman and Mr Phillips (or Mr Clarke) did not operate to vary the formal contractual position. In effect, when Mr Leishman sent his email of 23 February 2010 to Mr Phillips, he foreshadowed a claim for $135,800 plus GST in order to compensate Delnas for the additional resources which it would inevitably be required to devote to the project. Delnas did not revise its formal tender offer by increasing its total quoted contract price by the amount mentioned in that email nor did it seek confirmation from PLY and/or the Territory that the contract price should be increased accordingly. In the end, all that happened was that Delnas indicated its desire that its quoted tender price be increased but was never actually able to give effect to that desire. Of course, the letter dated 23 February 2010 from the Territory to Delnas made no mention of any increase in the tender price and there is no suggestion in any of the evidentiary materials before me nor in the FASOC itself that PLY or the Territory ever agreed to an increase in the contract price.
It seems to me that a binding contract was made as alleged by the Territory and that there is no real room for argument about this. For this reason, I do not propose to allow Delnas to file an Amended Statement of Claim which includes pars 12–44 of the FASOC.
However, as presently advised, I think that it is open to Delnas to plead a case for relief based upon a contract made on or about 23 February 2010 containing the terms for which the Territory contends.
Were Delnas to seek to propound such a case, it would be obliged to identify with precision the documents which are said to constitute the relevant binding contract and the material facts said to establish when that contract was made. It would then be incumbent upon Delnas to identify with precision the terms of that contract upon which it relies and the material facts, matters and circumstances upon which it will rely in order to establish breach of those terms. Finally, it would be required to specify with precision the loss which it claims on account of such breaches.
I think that I should give Delnas one last opportunity to plead a contract case which conforms to the above Reasons.
I am not prepared to order summary dismissal of Delnas’ contract claims. Although the proposed pleading of those claims at pars 12–44 of the FASOC cannot be sustained, the alternative contract claim foreshadowed at pars 45–54 in the FASOC goes some way towards articulating a case that may have some prospects of success.
Given that I have come to a firm view that Delnas and the Territory made a contract on or about 23 February 2010 upon the terms alleged by the Territory, there is no room for Delnas to press its restitutionary claim. For that reason, I would not grant leave to Delnas to plead the matters set out in pars 55–59 of the FASOC or any restitutionary claim based upon the proposition that no binding contract was ever made.
In light of the conclusions to which I have come concerning Delnas’ claim that a binding contract was entered into on or about 2 March 2010, it is not necessary for me to consider the individual pleading points raised by the Territory to the matters pleaded in pars 12–44 of the FASOC. However, Delnas will need to address and take into account the remarks which I have made at [60]–[63] above concerning any contract case which it might wish now to propound.
The Territory has also contended that all of the claims sought to be made by Delnas in the FASOC are time barred by reason of the operation of cl 46 of AS2124. That contention may ultimately turn out to be correct. However, consideration of that contention at this point in time would be premature. Given that I propose to grant leave to Delnas to file and serve a Further Amended Statement of Claim in which it seeks to propound a case in contract based upon the contract which I have concluded is the only contract entered into between the parties in respect of the execution of the roofing works, I take the view that further consideration of any limitation questions or contractual time bars should await the filing of that pleading and the filing of the Territory’s Defence.
The parties have also been at odds in relation to the statutory misrepresentation claims currently sought to be pleaded (the second par 59–par 65 of the FASOC). There is a dispute between the parties as to which version of the Fair Trading Act applied at the relevant time. The Territory has also foreshadowed taking the point that that statute did not apply to it in any event because it was not carrying on business when the alleged misrepresentation was made.
In the circumstances, I propose to allow Delnas to bring forward a Statement of Claim which includes cases based upon the Fair Trading (Australian Consumer Law) Act 1992 (ACT) or its predecessor and the Civil Law (Wrongs) Act 2002 (ACT) along the lines of the proposed pleadings in respect of those statutes contained in the FASOC.
CONCLUSIONS
It follows from the reasons which I have expressed above that I do not propose to make any orders as sought by the Territory in its Interlocutory Application filed on 13 September 2013. I propose to dismiss that Interlocutory Application. However, it is quite clear that, when regard is had to Delnas’ response to the substance of the Territory’s complaints reflected in the claims for relief made in that Interlocutory Application, the Territory has substantially succeeded in those claims for relief. For this reason, I propose to order Delnas to pay the Territory’s costs of and incidental to that Application.
As far as Delnas’ application for leave to amend is concerned, I propose to grant leave to amend in due course in order to enable Delnas to propound a Further Amended Statement of Claim that reflects the conclusions which I have stated in these Reasons for Judgment by reference to the FASOC.
In order to ensure that the leave which I propose to grant is strictly confined to the matters which I have indicated are capable of being pleaded, I will order Delnas to submit a draft of its Further Amended Statement of Claim for my consideration. I will then grant appropriate leave and also order the Territory to file a Defence.
There will be orders accordingly.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 20 May 2015
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