Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd

[2021] NSWDC 507

District Court

New South Wales

Medium Neutral Citation:

Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507

Hearing dates:

11 and 12 May 2021

Date of orders:

23 September 2021

Decision date:

23 September 2021

Jurisdiction:

Civil

Before:

Scotting DCJ

Decision:

(1)   Verdict and judgment for the defendant.

(2)   The plaintiff is to pay the defendant’s costs of the proceedings on the ordinary basis, as agreed or assessed.

(3)   In the event that any party wants to apply for a different costs order, I grant leave to the parties to approach my Associate within 14 days to list that application for argument.

Catchwords:

BUILDING AND CONSTRUCTION — Australian Consumer Law

BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Insurance — False or misleading applications

Legislation Cited:

Australian Consumer Law

Home Building Act 1989

Cases Cited:

Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) (2006) 67 NSWLR 341

ACCC v Singtel Optus Pty Ltd [2010] FCA 1177

ANZ Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Australian Broadcasting Corp v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540

Axelsen v O’Brien (1949) 80 CLR 219

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592

Campomar Sociedad Limatada v Nike International Ltd (2000) 202 CLR 45

Cherry v Park-Steele [2017] NSWCA 295

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337

Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915

Collins Marrickville Pty Ltd v Henjo Investments Pty Ltd (1987) 72 ALR 601

Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84

Commonwealth of Australia v Amann Aviation (1991) 174 CLR 64

Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31

Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 91 ALJR 486

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640

Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167

Frith v Gold Coast Mineral Springs Pty Ltd (1983) 65 FLR 213

General Newspapers Pty Ltd v Telstra Corp (1993) 117 ALR 629

Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25

Hall v Busst (1960) 104 CLR 206

Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 79 ALR 83

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216

Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68

I & L Securities Pty Ltd v HTW Valuers(Brisbane) Pty Ltd (2002) 210 CLR 109

Idoshore Pty Ltd v IPN Medical Centres (NSW) Pty Ltd [2007] FCA 1175

JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237

Johnson v Perez (1988) 166 CLR 351

Knight v Beyond Properties Pty Ltd [2007] FCAFC 170

Lam v Ausintel Investments Aust Pty Ltd (1990) 97 FLR 458

Mainteck Services Pty Ltd v Stein Hurley SA (2014) 89 NSWLR 633

Mander Forklift Pty Ltd v Dairy Farmers Co-op (1990) ATPR (Digest) 46-061

March v Stramare(E & MH) Pty Ltd (1991) 171 CLR 506

Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494

McGrath v Suresteps; Suresteps v HIH Overseas Holdings Ltd (in liq) (2011) 81 NSWLR 690

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

Murphy v Overton Investments Pty Ltd (2004) 78 ALJR 324

Newey v Westpac Banking Corporation [2014] NSWCA 319

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221

Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25-26

Quinlan v A & J Brady Pty Ltd [2007] FCA 1409

R v Credit Tribunal (SA); Ex parte GMAC (1977) 137 CLR 545

R v Credit Tribunal (SA); Ex parte GMAC (1977) 137 CLR 545

Redmond Family Holdings Pty Ltd v GC Access Pty Ltd [2016] NSWSC 796

Scammel v Onston [1941] AC 251

Spencer v Harding (1870) LR 5 CP 561

Taco Co of Aust Inc v Taco Co Bell Pty Ltd (1982) 2 TPR 48

Tec & Thomas (Aust) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28

Thorby v Goldberg (1964) 112 CLR 597

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514

Watson v Foxman (2000) 49 NSWLR 315

WIN Corporation Pty Ltd v Nine Network Pty Ltd [2016] NSWCA 297

Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327

Texts Cited:

J W Carter, Carter on Contract, LexisNexis Australia

Category:

Principal judgment

Parties:

Dyna Constructions Pty Ltd (Plaintiff)
Bocco Developments Pty Ltd (Defendant)

Representation:

Counsel: C Robinson (Plaintiff)
B Le Plastrier (Defendant)

Solicitors: Yazbeck Law (Plaintiff)
Bartier Perry (Defendant)

File Number(s):

2020/118395

Publication restriction:

None

Judgment

Introduction

1. In or about mid-2018, the defendant, Bocco Developments Pty Ltd (Bocco), invited a number of builders to tender for the construction of 24 residential units with basement parking on land it was developing in Lagoon Street, Narrabeen (the project). The plaintiff, Dyna Constructions Pty Ltd (Dyna), was a builder that submitted a tender to construct the project.

2. It is common ground that:

1. by the completion of the tender process in about early March 2019, Dyna was Bocco’s preferred tenderer;

2. by about May 2019, it was known that Bocco’s finance provider would not fund the construction of the project with Dyna as the builder; and

3. in or about early June 2019, Bocco informed Dyna that it would not be proceeding with it as builder of the project.

3. Dyna’s contract claim is that Bocco accepted its tender and that an agreement came into existence between the parties for the construction of the project on 7 March 2019. Dyna contends that by its conduct in the period of March to June 2019, Bocco repudiated the agreement and accordingly that Dyna is entitled to loss of bargain damages, being the profit it would have made from the construction of the project.

4. The issues in Dyna’s contract claim are:

1. Was there a binding agreement between the parties?

2. If so, what is the appropriate award of damages?

5. Dyna’s misleading and deceptive conduct claims allege that Bocco made four representations during the course of the tender process that led Dyna into error thereby entitling Dyna to damages pursuant to s 236 Australian Consumer Law (ACL).

6. The issues in Dyna’s misleading and deceptive conduct claims are:

1. Were the first, second, third and/or the silence representations conveyed and, if so, were any of them misleading or deceptive or likely to mislead or deceive?

2. If so, what is the appropriate award of damages?

Facts

7. Julieanne and Anthony Boccanfuso are the directors of Bocco. Between about 1988 and 2013, Mr and Mrs Boccanfuso acquired three contiguous properties in Lagoon Street, Narrabeen, with a view to redeveloping the land into residential units. In 2017, Bocco obtained a development consent from Northern Beaches Council for the construction of the project.

8. Bocco engaged Louis Nehme of Capital Finance to act as its finance broker to introduce it to prospective finance providers to fund the project. It became apparent following enquiries made by Mr Nehme that Bocco could not obtain finance from a major bank or financial institution.

9. In or about May 2018 Bocco received an indicative offer of finance from Daiwa Capital Markets Australia Ltd (Daiwa). It was a condition precedent to the provision of finance by Daiwa that Bocco sold units off the plan to the value of $17 million. In the period up to June 2019, Bocco could not satisfy the condition precedent to obtain funding from Daiwa.

10. In or about May 2018 Bocco engaged Construction Consultants PM Pty Ltd (CCPM) to act as project manager for the project and to provide quantity surveying services, at the suggestion of Mr Nehme. CCPM appointed Juliana Belisario as the project manager with carriage of the project. One of the services to be provided by CCPM included the conduct of a closed tender process with five to seven builders who had expressed an interest in tendering for the work.

11. In or about June 2018 CCPM sought expressions of interest from 16 builders to construct the project. Dyna was one of five builders who submitted an expression of interest to tender for the work.

12. In or about October 2018 Bocco was introduced by Mr Nehme to Blackbutt No 101 Pty Ltd (Blackbutt) as a potential finance provider for the project. Blackbutt put forward an indicative offer to provide $600,000 secured by an unregistered mortgage and caveat to be used as interim funding for the project pending an offer to fund the construction cost of the project. Bocco accepted the indicative offer for interim funding by Blackbutt on 19 October 2018 and paid a commitment fee.

13. On 29 October 2018 CCPM issued an Invitation to Tender to the five builders including Dyna. The Tender Package contained the relevant following terms:

1. Invitation to Tender

Your tender should be submitted in accordance with the enclosed conditions of tendering and relevant documents. [1]

1. CB 663.

1. Tender Information

2.1.4   The following documents shall form part of the proposed             Lump Sum Contract:

Item 1 – Invitation (the present document) [2]

2. CB 665.

2.1.6   

i.   The proposed Contract Document shall be an AS 4902-2000 Design and Construct “General Conditions of Contract”, published by Standards Australia. [3]

3. I will refer to this document as the Contract Document as it is defined in the Invitation to Tender.

1. A Draft copy of “Part A – Annexure to the Australian Standard General Conditions of Contract as 4902-2000” and Special Conditions is included within the Tender Documents. This may be subject to amendments during Contract negotiations and/or requests from the Principal and his Financial Institution. [4]

   4. CB 670.

1. Conditions of Tendering

3.1   Preparation of Tenders

1. Form: Submit the tender on the Tender form provided. [5]

   5. CB 674.

3.5   Evaluation of Tenders

In evaluating tenders, the Principal may take into consideration:

1. Conformity with tender documents;

2. Site staff qualifications and past experience with similar projects;

3. Value for money;

4. Construction period/program;

5. Proposed use of local subcontractors and suppliers;

6. Proposed alternatives;

7. Proposed construction methods;

8. Conflicts of interest;

9. Tenderer’s resources;

10. Tenderer’s current commitments;

11. Tenderer’s previous performance;

12. Industrial relations and safety records.

The Financial Institution approval of the Tendering Firm is elemental. [6]

6. CB 675-676 – emphasis by underling in the original.

3.6   Acceptance of Tender

Confidentiality:    Treat as confidential any information provided after the tender period.

Non-acceptance:    The Principal shall not be bound to accept the lowest or any tender.

Acceptance:       A tender shall not be deemed to have been accepted unless and until:

1. A Notice in writing of such acceptance is transmitted by email to the successful tenderer;

2. Completion of negotiations and Contract Document;

3. Vetting of the Contract Document by the Lawyers representing each party. [7]

3.8   Program

…

The short list of Successful Tenderers (1-3) shall be required to provide further information including:

The lead times required for the proposed Joinery and PC Items, to confirm the proposed Site works commencement date.

All relevant restraints imposed by the contract documents.

Significant milestones– the sequence of the activities which form the critical path for the project.

Details of the programmed work, and the time relationship to the Works of all significant tasks specified to be undertaken or proposed to be undertaken by subcontractors and suppliers, both on and off Site.

3.11   Acceptable Legal Entities

The Principal shall sign a contract only with recognised and acceptable entities having appropriate financial assets, to the satisfaction of the Principal Financial Institution (sic). [8]

7. CB 676

8. CB 678

14. On 14 November 2018 Blackbutt issued a “mandate to act” to Bocco irrevocably appointing it to use reasonable efforts to obtain approval for a finance facility to fund the construction cost of the project on the terms and conditions provided for in the document. The letter of offer included a breakdown of the funding that Bocco had sought, without any representation by Blackbutt that funds as requested by Bocco were commercially available. Mr and Mrs Boccanfuso executed the document accepting its terms on the following day.

15. From about 14 November 2018 onwards a number of Dyna’s employees worked on the tender to be submitted, including Tony Ayoub, director, Ray Lou, site administrator, and Charbel Makhlouf, project manager.

16. Dyna’s complying tender was submitted on 3 December 2018. Dyna’s tender was submitted on the Tender Form, which provided:

Dyna Constructions Pty Limited tender to perform the work for the above project as described in, and in accordance with, the tender documents referenced in the Conditions of tendering and in accordance with the attached Tender Schedules and for the lump sum (which includes specified provisional sums) of:… [9]

9. CB 776

17. On 10 December 2018 Blackbutt issued a further indicative letter of offer to Bocco to fund the development. A condition precedent of the letter of offer was that Blackbutt consented to the appointment of the building contractor. Mr and Mrs Boccanfuso executed the document accepting its terms on the following day.

18. By about mid-December 2018, Bocco had narrowed down the tender process to three builders: Newtown Constructions (Newtown), Faircorp Constructions (Faircorp) and Dyna.

19. On 14 December 2018 Ms Belisario sent an email to Mr Ayoub enclosing a checklist for completion from Dyna’s tender submission and requesting details of Dyna’s recently completed projects that could be inspected by Mr and Mrs Boccanfuso and representatives from CCPM.

20. On 17 December 2018 Blackbutt failed to advance the sum of $600,000 to Bocco for the interim funding of the project, as provided for in the letter of offer dated 18 October 2018.

21. On 20 December 2018 Mr Ayoub sent an email to Ms Belisario attaching the completed checklist and providing details of recently completed projects that could be inspected.

22. On 15 January 2019 Ms Belisario sent an email to Mr Ayoub seeking details of the contract price of Dyna’s recently completed projects and seeking times for inspection of some of them.

23. On 16 January 2019 Mr Ayoub met with Mr and Mrs Boccanfuso and Ms Belisario and inspected two of Dyna’s recently completed projects at Ashfield and Burwood.

24. A meeting was arranged to discuss Dyna’s tender at CCPM’s office on 23 January 2019. Mr Ayoub, Mr Makhlouf, Mr and Mrs Boccanfuso, Ms Belisario and Charles Boumoussa, a director of CCPM, were in attendance. Dyna presented a Capability Statement to Mr and Mrs Boccanfuso and discussions took place as to where cost savings could be made on the project. Mr Ayoub deposed that he was told by Mr Boccanfuso that Bocco was in the final stages of approval for construction funding with Blackbutt, and that they would need to satisfy themselves of the chosen builder’s financial affairs. Mr Ayoub also deposed that Mr Boumoussa told him that the clients liked Dyna and, subject to getting all the boxes ticked, would go ahead with Dyna. At the date of the meeting Home Owners Warranty Insurance was still outstanding.

25. On 24 January 2019 Jeff Meads of Blackbutt informed Mr and Mrs Boccanfuso that Blackbutt had the funds available to provide Bocco with the interim funding of $600,000 but that it was experiencing delays in getting the money into the country.

26. On 30 January 2019 Mr Ayoub sent an email to Ms Belisario attaching Dyna’s last three sets of financial statements, a further copy of Dyna’s Capability Statement, and a letter provided by Dyna’s bank.

27. On 31 January 2019 Mr Ayoub sent an email to Ms Belisario attaching an updated bill of quantities and advising that the proposed cost savings were approximately $1 million.

28. On 6 February 2019 Mrs Boccanfuso asked Mr Nehme to make a further approach to Daiwa to see if it would accept a lower amount of pre-sales if Bocco agreed to a higher interest rate. Mrs Boccanfuso informed Mr Nehme that Bocco’s requests for documentation from Blackbutt were being rebuffed.

29. On 7 February 2019 Mrs Boccanfuso sent by email a copy of the financial statements of Newtown Constructions and Dyna to Mr Meads of Blackbutt. Mrs Boccanfuso informed Mr Meads that Bocco preferred Dyna’s tender partially because Dyna’s price was cheaper than the Faircorp Constructions tender.

30. On 9 February 2019 Mrs Boccanfuso had a telephone conversation with Mr Meads. Mr Meads informed her that he had not considered the financial statements in detail, but that he did not like the financial statements provided by Newtown. On that basis, Mrs Boccanfuso deposed that Bocco decided to keep Faircorp in consideration despite its higher price, because Bocco considered it unlikely that Blackbutt would approve Newtown as the builder for the project.

31. On 12 February 2019 Mrs Boccanfuso asked Mr Nehme to make contact with Mr Meads to chase up the interim funding from Blackbutt which she was expecting to be available on that day.

32. On 14 February 2019 a tender meeting was held at CCPM’s office in Parramatta, with Mr Ayoub, Mr and Mrs Boccanfuso, Ms Belisario and Mr Boumoussa in attendance. At that meeting a number of topics were discussed including the selection of a load bearing wall system and the inclusion of a number of items into the fixed price that had previously been identified as provisional cost items.

33. Mr Ayoub deposed to the following conversation at that meeting, only part of which is necessary to refer to:

Juliana:   Does Dyna agree to the contract provided with the tender documents?

Tony:   Yes, the contract included with the tender documents is agreed.

Mrs Boccanfuso deposed to the same part of the conversation in the following terms:

Juliana:   Are you happy with the contract provided with the tender documents?

Tony:   Yes it should be ok as it is a standard D&C Building Contract, but my solicitor will need to look to see if any changes need to be made.

I will return to this evidence when dealing with the existence of an agreement between the parties.

34. On 19 February 2019 Mr Ayoub sent an email to Ms Belisario attaching an updated tender. Mr Ayoub asked that the clients make selections from the items specified so that the cost of those items could be included in the fixed price. Mr Ayoub advised that Home Owners Warranty Insurance was still outstanding but was expected to be finalised later in the week.

35. On 21 February 2019 Ms Belisario sent by email to Mr Ayoub an amended bill of quantities accepting some of the proposed cost savings and leaving some matters as provisional cost items.

36. On 22 February 2019 Ms Belisario requested a further revision of the fixed price based on the selection of some items. On 23 February 2019 Mr Ayoub advised that the revision of the fixed price was possible, but would take some time to undertake.

37. On 24 February 2019 Mr Meads sent an email to Mrs Boccanfuso advising her that the interim funding for the project would be available and paid to Bocco on 27 February 2019, and that documentation for the construction loan would issue after that. Mr Meads also advised that Faircorp’s financial statements were acceptable to Blackbutt.

38. On 25 February 2019 Ms Belisario sought from Mr Ayoub an alternate revision of the cost for the work by having a fixed price with no provisional cost items. Mr Ayoub responded later that day that the alternate pricing structure was possible but that it would take time to prepare and that he needed further information to do so. On 26 February 2019 Ms Belisario responded to some of the requests for information and advised that she was awaiting information from other people to answer the balance of the requests.

39. On 27 February 2019 Mrs Boccanfuso exchanged text messages with Mr Meads about the payment of the interim funding. Mr Meads advised that he expected “initiation” of the funds to occur on 28 February 2019.

34. Mr Ayoub deposed that on or about 27 February 2019 he had a telephone conversation with Ms Belisario in words to the following effect:

Juliana:   Hi Tony, good news, the lender has approved Dyna to be the builder on the project and as long as we agree on the final items the client wants to proceed with Dyna as their builder.

Tony:    That is fantastic. That’s the best news I’ve heard in a while. In other good news, I can confirm that we have been approved for Home Owner’s Warranty Insurance.

Juliana:   Perfect. I will let the client know. Hopefully, we can get this wrapped up once you provide the amended tenders.

Tony:   You will have the requested amendments by Friday.

I will return to this evidence when dealing with the second representation.

41. On 1 March 2019 Mr Ayoub sent to Ms Belisario the requested pricing options. Option 1 was a fixed price including provisional cost items. Option 2 was a fixed price that included all of the provisional cost items in Option 1, with the exception of the installation of the electrical sub-station which remained a provisional cost item.

42. On 1 March 2019 Mrs Boccanfuso sent an email to Mr Meads because the interim funding had still not been received.

43. On 4 March 2019 Ms Belisario sent an email to Mrs Boccanfuso in the following terms:

Could you please advise if the financiers have provided a feedback (sic) for Dyna.

It should assist you in your decision, once you can eliminate the tenderer that is not in line with the financier requirements (sic).

44. On 4 March 2019 Mrs Boccanfuso had a telephone conversation with Mr Meads in words to the following effect:

Julieanne:   Jeff, I’m worried. Why haven’t we received the funds yet?

Jeff:   The compliance payment occurred this afternoon and settlement will happen in 24 hours.

Julieanne:   That’s brilliant news Jeff, thank you. Have you had a chance to review Dyna’s financials to see if you have any objection, as we would like to make a decision and start contract negotiations soon.

Jeff:   Dyna’s financials are a little light, but I don’t have any real objection.

Julieanne:   Brilliant, thanks Jeff. We will make our decision and let you know who we choose. We look forward to receiving the funds as soon as possible.

45. Mrs Boccanfuso deposed that on the basis that Blackbutt had approved both Dyna and Faircorp that it would progress with Dyna to the next stage of the tender process because, Dyna’s full breakdown of costs in its tender was appealing and Bocco was confident of what it would get for the tender price. This was notwithstanding that Bocco’s view was that Faircorp’s workmanship was superior and it had produced more high-end developments of a similar kind to the project.

46. On 4 March 2019 Mrs Boccanfuso sent an email to Ms Belisario advising her that Dyna had been approved by Blackbutt and that Bocco wanted to nominate Dyna as its preferred builder. Mrs Boccanfuso sought clarification of the quantity of bathroom fixtures and fittings provided for in Option 2 that had been put forward by Dyna. The relevant part of the email stated:

We confirm our Financier has approved DYNA as a suitable candidate and would therefore truly thank Faircorp for their time and effort however nominate DYNA as our preferred choice of Builder…

47. On 5 March 2019 Ms Belisario sent an email to Mrs Boccanfuso in the following terms:

I am about to speak to Dyna with regards to your queries. Can I inform them that they are going to Contract negotiation, possibly with Option 1?

48. Mrs Boccanfuso replied to Ms Belisario by email in the following terms:

Absolutely no problem advising them that we are happy to start contract negotiations. I would still prefer to wait until we receive their updated tender submission reflecting the amended quantities and prices before advising them which Option we are considering…

49. On 5 March 2019 Ms Belisario sent an email to Mrs Boccanfuso in the following terms:

Just to let you know I have advised Dyna about your decision. They thanked (sic) the opportunity and are excited to proceed.

They will review their submission and forward it tomorrow morning for your review.

50. Mrs Boccanfuso replied to that email in the following terms:

That’s great Juliana. Excited to finalise the price and commence contract negotiations…

51. On 7 March 2019 Mr Ayoub deposed that he had a telephone conversation with Ms Belisario, in words to the following effect:

Juliana:   Hi Tony, the client is happy with the final Tender Summary provided and has decided to proceed with Dyna on the project. I will be shortly emailing you the contract for you to provide comments on and finalise.

Tony:   Thank you Juliana. That’s great to hear. I look forward to working with you all on this project. As previously discussed, we are happy with the contract provided in the tender documents, but I will review it again anyway when you send it. When do you think we will be able to start?

Juliana:   We are still working through the fire safety issues with the engineers and awaiting final unconditional approval from the client’s funder. I will update you as it progresses.

52. On 7 March 2019 Ms Belisario sent an email to Mr Ayoub in the following relevant terms:

Further to our phone conversation, the clients have decided to proceed with Dyna on the above project.

Prior to contract execution, they still need to decide the preferred option in regards to the selection of PC items.

In the interim, please find attached the contract with the clients solicitors (sic) comments for your perusal.

Please ensure that you track changes to any contract amendments to enable us to review.

If you need further assistance, please do not hesitate to contact me.

53. Later on 7 March 2019, Mr Ayoub responded by email to Ms Belisario in the following terms:

Thanks Juliana,

We are honoured to be working with you guys on this project.

I will get back to you with any comments on the contract in the next couple of days.

54. Later on 7 March 2019 Ms Belisario forwarded to Mr Ayoub an email from Mrs Boccanfuso seeking information about certain provisional cost items allowed for. Mr Ayoub provided a response by email later that day.

55. Later on 7 March 2019 Mrs Boccanfuso had a telephone conversation with Mr Meads. Mr Meads told her that the funds were still on track and would be in Bocco’s account by Friday (the following day).

56. On 9 March 2019 Mrs Boccanfuso sent a text message to Mr Meads asking if the funds were still going to be provided. On the same day Mrs Boccanfuso spoke to Mr Nehme and asked him to contact Mr Meads on her behalf.

57. On 12 March 2019 Mr Meads sent a text message to Mrs Boccanfuso informing her that a new problem had arisen but that the funds would be provided at a date to be advised.

58. On 12 March 2019 Mr Ayoub sent an email to Ms Belisario informing her that he expected to have his solicitor’s comments on the draft contract on the following day.

59. On 13 March 2019 Mr Meads sent a text message to Mrs Boccanfuso advising her that the interim funding would be available no later than Monday 18 March 2019 and that “[c]onstruction funds settlement with completion of documentation will occur from Friday 22.3.19”.

60. On 14 March 2019, Patrick Yazbeck, Dyna’s solicitor, met with Mr Ayoub in conference to go through the contract. Later that day, Mr Yazbeck sent a draft marked up copy of the contract to Ms Belisario. The draft marked up contract had amendments and comments made on it by both Mr Ayoub and Mr Yazbeck. No response was ever provided to this document by CCPM or the lawyers for Bocco. This document became Exhibit 3 in the proceedings and I will return to it when dealing with the existence of an agreement between the parties.

61. On 14 March 2019 Mr and Mrs Boccanfuso and Mr Nehme attended a meeting with Wayne Ding of Secure Bailment Solutions Pty Ltd (SBS) to discuss the provision of finance for the project. Mr Ding informed Mr and Mrs Boccanfuso that his company did provide finance for property developments but that the company’s business model was based on using one of their panel of trusted builders to protect their investment. Mrs Boccanfuso informed Mr Ding that Bocco had told Dyna that it was the successful tenderer and that Bocco had agreed to move into contract negotiations with Dyna and had expressed a desire to retain Dyna as the building contractor. Mr Ding told Mr and Mrs Boccanfuso that he would need to discuss the matter with his investors.

62. On 18 March 2019 Bocco did not receive the interim funding from Blackbutt.

63. On 19 March 2019 Mrs Boccanfuso sent an email to Ms Belisario in the following terms:

Unfortunately we seem to be experiencing unforseen (sic) and unknown delays from our Financier and feel our only option at this point is to place DYNA on hold until we have sorted it out.

I believe that it is only a temporary set back and are truly sorry for the inconvenience, but believe it’s best that DYNA know to avoid them spending unnecessary money until we have the assurances we need to proceed. We are hoping to have a resolution by the end of this week or early next week and AGAIN express our sincere apologies!!!!!. (sic)

I will let you know as soon as we have a definite answer.

64. Ms Belisario deposed that shortly after receiving this email, she telephoned Mr Ayoub and they had a conversation in words to the following effect:

Juliana:   The project is to be put on hold due to a lack of financier in place; meaning the contract cannot be executed at this point.

Tony:   Ok.

65. Later on 19 March 2019, Ms Belisario responded by email to Mrs Boccanfuso in the following terms:

Thank you for letting us know.

The contract execution is subject to the Principal to obtain finance (sic) for the contract sum.

The builder knows that he should not work on this project prior to this execution.

Please let us know if you need any assistance.

66. On 21 March 2019 SBS provided an indicative term sheet for consideration by Bocco.

67. On 23 March 2019 Mr Meads sent a text message to Mrs Boccanfuso informing her that there were further impediments to the provision of the interim funding and that these impediments were likely to be resolved on 25 March 2019. This was the last communication from Blackbutt and no funds were advanced to Bocco by Blackbutt.

68. On 24 March 2019 Mr Ding and Mr Nehme attended a meeting with Mr and Mrs Boccanfuso at their home. Mrs Boccanfuso again indicated that Bocco’s preference was to retain Dyna to construct the project.

69. On 25 March 2019 Mrs Boccanfuso sent an email to Ms Belisario in the following terms:

Unfortunately over the last week our hand has been forced to source an alternative Financier as Blackbutt have continually ignored our requests to issue us with necessary Documentation for us to proceed any further with the development. We had a successful meeting on Sunday with our new Financier who has had previous dealings with your Company and is very keen to fund our project. They are currently in the process of reviewing our documentation to see exactly where we are up to before arranging a meeting with yourselves to discuss the project in detail. I unfortunately do not have specifics, but it appears they would prefer to use one of their own Builders to construct our Apartments instead of DYNA. We are uncomfortable with the fact that we have just engaged DYNA and do not want to muck them around, but as nothing has been received officially in writing yet, we would prefer to keep DYNA on hold a little while longer just until we receive further instruction from our Financier.

Again, my apologies for the inconvenience this has caused to all involved, and truly hope to have this mess sorted by close of business tomorrow.

70. On 26 March 2019 SBS sent an updated indicative term sheet to Bocco. On 27 March 2019 Mrs Boccanfuso sent an email to Mr Nehme asking him to put SBS in contact with Bocco’s solicitors for the purpose of preparing loan documentation.

71. On 10 April 2019 Mr and Mrs Boccanfuso attended a meeting with Mr Ding, Mr Nehme and Michael Dakhoul, a director of CCPM, at CCPM’s office in Parramatta. Mr Ding outlined that SBS’s business model was based on using one of its preferred builders but he understood that Bocco had a preference to use Dyna. At the end of the meeting, Mr and Mrs Boccanfuso spoke privately with Mr Dakhoul at which time Mr Boccanfuso said words to the following effect:

We are in a no-win situation as we are on the brink of losing everything. If Wayne is happy to fund the project but unfortunately only wants to use his own builder, then there is nothing we can do about it. If we don’t get finance, we don’t have a development and neither Dyna or any other builder will get the job. It simply comes down to no money no development!

72. On 10 April 2019 Mr Ayoub had a telephone conversation with Mr Dakhoul. Mr Dakhoul told Mr Ayoub that Bocco had introduced a new finance provider for the project, Mr Ding. Mr Dakhoul told Mr Ayoub that the finance provider wanted to use one of its preferred builders to construct the project. Mr Ayoub told Mr Dakhoul that Dyna had been awarded the project and that it may pursue legal action.

73. On 11 April 2019 Mr Ayoub met with Mr Dakhoul. Mr Dakhoul telephoned Mr Boccanfuso in the course of the meeting and Mr Ayoub heard what was said by both of them. Mr Dakhoul advised Mr Boccanfuso to find another finance provider because Mr Ding was causing trouble and the contract had been awarded to Dyna. Mr Boccanfuso told Mr Dakhoul that Bocco would be continuing with Mr Ding as the finance provider even if a new builder had to be engaged to construct the project.

74. On 17 April 2019 Mr and Mrs Boccanfuso met with Mr Ding and Mr Nehme to discuss SBS’s draft development facility loan agreement. At this meeting Mr Ding said that he was in discussions with Topaz Constructions (Topaz) to obtain a price for the construction of the project.

75. On 19 April 2019 Mr Ding sent an email to Mrs Boccanfuso and others advising that he had received an indicative price from Topaz and seeking to arrange a meeting with all parties to discuss the project.

76. On 23 April 2019 a meeting was held between Mr Ayoub, Mr Dakhoul and Mr Ding at a café in Parramatta. Mr Ding told Mr Ayoub that if he was to finance the project then he would be choosing the builder from one of his preferred three builders. It was resolved at that meeting that Mr Ding would undertake an inspection of a recently completed project by Dyna and that if his preferred builders were not competitive on price, he would undertake to discuss with his partners the possibility of using Dyna as the builder of the project.

77. On 30 April 2019 Mr and Mrs Boccanfuso met with Mr Ding, Mr Nehme and Hussein Awada of Topaz.

78. On 3 May 2019 Mr Ayoub met Mr Ding at 41 Leonard Street, Bankstown, which was a project that Dyna had recently completed. Mr Ding inspected the premises for about an hour.

79. On 4 May 2019 Mr Ding told Mrs Boccanfuso that SBS was still negotiating prices and terms with Topaz and that it had not made a final decision as to who it would approve as the builder for the project.

80. On 14 May 2019 Ms Belisario sent an email to Mrs Boccanfuso in the following terms:

Tony, from Dyna called me a few days ago seeking information on the status of the financier.

He mentioned that Wayne Ding has inspected one of his sites.

Have you heard anything from him about the inspection?

81. On 15 May 2019 Mr Ding sent Mr Ayoub an email stating that he had asked one of his preferred builders to quote on the basis of the documents in the Tender Package. Mr Ding advised that he would come back to Mr Ayoub if the price, terms and program did not suit his risk profile.

82. On 17 May 2019 Mr Ayoub sent an email to Mr Ding expressing his disappointment and indicating that Dyna would pursue Bocco for its out of pocket expenses.

83. On 4 June 2019 Mrs Boccanfuso sent an email to Ms Belisario advising that Bocco had agreed to Topaz being the builder of the project and asking CCPM to enter into contract negotiations with Topaz.

84. In or about early June 2019, Mr Ayoub received a telephone call from Ms Belisario. Ms Belisario advised Mr Ayoub that the client had decided to proceed with Mr Ding’s builder of choice, Topaz.

85. In the period 7 March 2019 to 10 April 2019 Dyna undertook a number of tasks in preparation for the construction of the project including obtaining quotes from contractors for various elements of the work and contacting contractors with a view to Dyna engaging them on the project. In the same period, Dyna was making regular enquiries of CCPM as to the start date for construction. Dyna was told on those occasions that there had not been any progress.

86. Mr Ayoub gave unchallenged evidence that:

1. he spent about 118 hours in the period 21 June 2018 to 20 May 2019 working on Dyna’s tender;

2. Mr Makhlouf and Mr Lou both spent about 75 hours each working on Dyna’s tender in the same period.

87. Mr Makhlouf, Mr Lou and Mr Ayoub provided schedules of the time they each spent on the project on the relevant dates.

88. Mr Makhlouf’s evidence was that his work as a project manager was usually charged out by Dyna at $95 per hour plus GST. Neither Mr Lou nor Mr Ayoub gave any evidence as to the hourly rate that their work was charged out at by Dyna.

The contract claim

Overview

89. Dyna’s primary claim was that Ms Belisario’s email of 7 March 2019 set out at [52] above amounted to an acceptance of Dyna’s tender and that the parties were immediately bound by the terms that they had agreed on, notwithstanding that they intended to enter into a formal contract in substitution that would also contain additional terms.

90. Bocco’s response to the contract claim was that no binding agreement came into existence because, either:

1. the surrounding circumstances did not indicate the existence of a binding agreement; and/or

2. the alleged agreement did not contain all essential terms; and/or

3. the requirements of the Home Building Act 1989 were not satisfied and accordingly the contract was not binding and could not be enforced by Dyna.

91. If there was a binding agreement, Bocco did not put repudiation in issue, but contended on the basis of the evidence that Dyna had not proved any loss.

Was there an agreement between the parties?

92. Taking into account all of the evidence, I am not satisfied that a concluded agreement came into existence between the parties for the reasons that follow.

Offer and Acceptance

93. Dyna’s tender was an offer made on the terms to construct the project: Spencer v Harding (1870) LR 5 CP 561. No contract of any sort could come into existence until that offer was accepted.

94. Dyna’s tender expressly provided that it was made in accordance with the tender documents and the conditions of tendering provided therein. The relevant conditions of the tender were that:

1. Bocco was not bound to accept the lowest, or any tender; and

2. in evaluating a tender, “the Financial Institution approval of the Tendering Firm is elemental”; and

3. a tender was not accepted unless and until:

1. a notice in writing “of such acceptance” was sent by email to the successful tenderer;

2. “Completion of negotiations and contract document”; and

3. “Vetting of the contract document by the lawyers representing each party”.

95. As the offeror, Dyna controlled the requirements for acceptance of the offer, but was bound to specify the terms in the Invitation to Tender in order for the tender to be a complying tender. The question of whether the prescribed method of acceptance is the exclusive method of acceptance is a matter of construction: Carter on Contract [03-330].

Relevant law

96. The task of ascertaining the legal meaning of provisions in a commercial contract involves identifying the imputed intention of the parties by reference to the contractual text construed in light of its context and purpose: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35] and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46]-[51].

97. A court will take an objective approach to interpreting the contract. In a commercial agreement, the question is what a reasonable business person would have understood the terms to mean, taking into account the language used, the surrounding circumstances known to the parties, and the commercial purpose of the objects to be secured. The last requirement is facilitated by understanding the genesis of the transaction, the background, the context and the market the parties are operating in. Unless the contrary is indicated, the court is entitled to approach interpretation on the basis that the parties intended to produce a commercial result. A commercial contract should be construed to avoid it making a commercial nonsense or working a commercial inconvenience: Electricity Generation Corporation v Woodside Energy Ltd at [35].

96. Evidence of prior negotiations, which may reflect the subjective intentions of the parties, is admissible only to the extent that it establishes objective facts known to both parties to elucidate with greater precision the commercial purpose or the subject matter of the contract: WIN Corporation Pty Ltd v Nine Network Pty Ltd [2016] NSWCA 297 at [57].

97. Evidence of the parties’ subjective intentions is not relevant to construction of a contract: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40].

98. Evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. However, such evidence is not admissible to contradict the language of the contract when it has a plain meaning: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352 (Mason J, Stephen and Wilson JJ agreeing).

99. “Admissible” in this context means use rather than receipt into evidence: Cherry v Park-Steele [2017] NSWCA 295 at [69]. In other words, ambiguity is not required to be established as a gateway before evidence of surrounding circumstances can be considered: Cherry at [71]. If a written contract is ambiguous, evidence of surrounding circumstances may be tendered and used to assist in its construction: Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 91 ALJR 486.

100. The reference to “plain meaning” by Mason J in Codelfa Construction reflects the primacy of the text of a written contract. The start and end points of the construction of a written contract is the language chosen by the parties to record their agreement: Cherry at [72], Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109 (Gibbs CJ) and Mainteck Services Pty Ltd v Stein Hurley SA (2014) 89 NSWLR 633 at [74] (Leeming JA).

101. Evidence of surrounding circumstances cannot be used to detract from the contractual text used by the parties. If, after considering the contract as a whole and the background circumstances known to both parties, a court concludes that the language of the contract is unambiguous, the court:

1. must give effect to that language unless to do so would give the contract an absurd operation: Newey v Westpac Banking Corporation [2014] NSWCA 319 at [91]; and

2. cannot depart from the ordinary meaning of the words merely because it regards the result as inconvenient or unjust: McGrath v Suresteps; Suresteps v HIH Overseas Holdings Ltd (in liq) (2011) 81 NSWLR 690 at [17].

Consideration

104. In applying these principles, I am satisfied that the express terms of clause 3.6 of the Invitation to Tender provided that acceptance of a tender required that the three specified conditions were met... The language used was mandatory that there could be no acceptance “unless and until” the conditions were met. The requirements specified in the offer differed from those required at common law, and this also leads to the conclusion that the specified method of acceptance was the exclusive method required to bring about acceptance.

105. As to the first requirement, Dyna relied on Ms Belisario’s email of 7 March 2019 as satisfying the requirement of the notice in writing sent by email of the acceptance. Whilst the email did not expressly say that Bocco accepted Dyna’s tender, it stated that Bocco had made a decision to proceed with Dyna on the project and that was an unequivocal statement of the true position that Bocco intended to proceed to the next stage with Dyna on the project, which was at least to negotiate the terms of the written contract. I am not satisfied that Ms Belisario’s email met the first requirement, but even if I assume that it did, it makes no difference because the second and third requirements were clearly not satisfied.

106. As to the second requirement, the evidence was clear that as at 7 March 2019, negotiations were ongoing as to a number of items, including as to the terms of the written contract. Bocco had asked Dyna to provide alternate pricing options and Dyna provided Option 1 and Option 2 on 1 March 2019. Bocco did not decide between them or communicate any choice to Dyna. The result of this was that the contract price or the method for calculating it was not finalised as at 7 March 2019 or at all. In addition, Dyna had not yet met with its solicitor to discuss the amendments sought to the standard form contract referred to in the Invitation to Tender. The second requirement for acceptance of the tender required negotiations and the Contract Document to be complete. I construe that clause of the Invitation to Tender as requiring the terms of the contract to be agreed because there could be no further negotiations on the Contract Document if the negotiations were “complete”. It is unnecessary to decide if the completion of the Contract Document included execution of it, because it is clear that the terms of the contract document were not agreed on 7 March 2019 or at any later time. Dyna received no response from Bocco to Mr Yazbeck’s letter of 14 March 2019 enclosing a copy of the proposed contract marked up with the changes sought by Dyna.

107. The third requirement for acceptance of a tender was the “vetting” of the contract document by the lawyers for each party. As a matter of commercial reality, this requirement was part of completion of the negotiations of the content of the written contract because the contract could not be effectively “vetted” unless changes could be sought by the lawyers in accordance with their instructions. For the reasons already alluded to, the process of negotiation between the parties on the basis of their lawyer’s advice had just commenced and was not concluded in the relevant period.

108. I do not accept Mr Ayoub’s version of the conversation set out at [33] above because it is inconsistent with the events as they are evidenced by the contemporaneous documents. In particular, the fact that Mr Ayoub met with Mr Yazbeck on 14 March 2019 and sought to engage in negotiations on the Contract Document does not correspond with his assertion that on 14 February 2019 he considered the Contract Document to be “agreed”. I prefer the evidence of Mrs Boccanfuso on this point, also set out at [33] above, which is consistent with the content of the contemporaneous documents.

109. On the basis of the foregoing analysis, I am not satisfied on the balance of probabilities that Bocco accepted Dyna’s tender in accordance with the offer. Accordingly, no agreement came into existence.

Failure to satisfy the Condition Precedent

110. The Contract Document was intended to be executed by it being annexed to a Deed entered into between the parties. The draft Deed was sent to Mr Ayoub by Ms Belisario in her email dated 7 March 2019.

111. Clause 3(a) of the draft Deed provided as follows:

Notwithstanding anything contained in this Contract, this Contract and all the rights and obligations of the Principal and the Contractor under it (other than those imposed by clause…and this clause) are subject to the condition precedent that the Principal obtains finance for the contract sum on the terms and conditions applicable to the Principal in its absolute discretion (Condition Precedent).

112. Clause 3(d) of the draft Deed provided a follows:

The Condition Precedent shall only be satisfied if the Principal notifies the Contractor in writing that the Principal has obtained finance for the contract sum on terms and conditions acceptable to the Principal.

113. Dyna did not seek the deletion of these clauses in the draft Deed. I am satisfied that it understood that the Condition Precedent was a term of the contract to be entered into between the parties. The Condition Precedent was consistent with other conditions of the Invitation to Tender including that the successful tenderer had to be approved by Bocco’s finance provider.

114. Bocco never notified Dyna that the Condition Precedent had been satisfied and in fact it was not satisfied. Bocco had not obtained finance for the project as at 7 March 2019 or at any time for Dyna to construct the project.

115. I am not satisfied that the Condition Precedent was satisfied and for this reason Dyna’s contract claim must also fail.

Failure to agree on essential terms

116. I am also satisfied that no agreement came into existence on 7 March 2019 or subsequently, because the parties had not agreed on essential terms.

Relevant law

117. Where there are imprecise or incomplete negotiations, there will often be doubt about whether finality of agreement has been reached. The court’s task in these circumstances is to ascertain from the dealings between the parties whether or not they intended to make a concluded bargain. That intention is to be determined objectively by reference to what a reasonable observer would have concluded: Australian Broadcasting Corp v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-550.

118. In cases where the intention is equivocal, conduct or correspondence following the offer and acceptance can be used as evidence to show whether or not a contract was concluded: Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68.

119. A contract is uncertain if essential terms are uncertain or lacking: Axelsen v O’Brien (1949) 80 CLR 219 at 226. Inessential terms can be filled in by the court, ignored or severed. At least the parties to the contract, the principal undertakings, the subject matter, and the price must be certain: ANZ Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695.

120. There can be no binding agreement unless the terms of the bargain, or at least the essential or critical terms, have been agreed on. There is no concluded contract where an essential or critical term is expressly left for future agreement between the parties: Thorby v Goldberg (1964) 112 CLR 597 at 607 (Menzies J).

121. If the parties have negotiated but not reached final agreement or the agreement that they have reached is so unclear as to lack sensible meaning, then it is fair to say that a contract has not come into existence: Scammel v Onston [1941] AC 251 at 268-9 per Lord Wright. Whilst the courts should be reluctant to strike down a bargain reached in good faith, the parties must agree on their respective rights and obligations and it is not a matter for the court to write the agreement for them: Hall v Busst (1960) 104 CLR 206 at 222.

122. Essential terms may include terms that would ordinarily be agreed in a transaction of the kind entered into: Quinlan v A & J Brady Pty Ltd [2007] FCA 1409 at [178]-[179] (Weinberg J).

Price

123. On 1 March 2019 Dyna put forward Option 1 and Option 2. On 4 March 2019 Mrs Boccanfuso queried the quantity of bathroom fixtures and fittings allowed for in Option 2. Bocco did not choose between Option 1 or Option 2 and communicate that choice to Dyna on 7 March 2019 or at any later time. In the end, there was no agreement on the contract price or the method by which it would be calculated.

The Contract Document

124. The Invitation to Tender identified that the proposed Contract Document was the Australian Standard 4902-2000 Design and Construct General Conditions of Contract, as amended and included in the Tender Documents.

125. On 14 March 2019 a revision of that draft was sent by Mr Yazbeck to Ms Belisario with amendments proposed by both Mr Ayoub and Mr Yazbeck marked up on the document. No response was ever provided on behalf of Bocco to these proposed amendments. An analysis of the marked up Contract Document (Exhibit 3) demonstrates that the parties were still in negotiation over the following terms:

• Delay damages – no daily figure had been specified in the contract for delay damages. Dyna sought the inclusion of a cap on the amount of delay damages payable, but did not provide what cap would be appropriate.

• Claims for variations.

• The conditions precedent to the final payment claim.

• The inclusion of a termination for convenience clause – Bocco had deleted the termination for convenience clause contained in the contract. Dyna asked that it be reinstated.

• The form of contractor’s security to be provided – the contract provided for cash retention and Dyna sought to have the option of providing a bank guarantee.

• Builder’s margin on variations – Bocco did not include a figure for builder’s margin on variations in the contract. Dyna specified that the margin should be included at 11%.

• The amount of insurance to be arranged by Dyna.

• The length of time for the provision of notices under the contract.

126. Bocco did not provide a response to this email or enter into any negotiations as to the identified matters. It is patently clear that the negotiations on those matters were not complete.

127. Mr Ayoub accepted in cross-examination that the daily amount for delay damages and the existence of a cap on those damages, as well as the conditions precedent for the payment of the final payment claim, were very important matters to Dyna.

128. I am satisfied that the method of calculating liquidated damages, the inclusion of a termination for convenience clause, and the form of contractor’s security to be provided, were essential terms that were not agreed on 7 March 2019 or at all.

129. Even if those terms were not essential, all of the matters identified were matters that would ordinarily be agreed in a transaction of this kind. The parties intended to enter into a complex standard form contract applicable to a transaction of this kind being a property development with a contract price of about $12 million. The standard form contract included detailed machinery provisions that Dyna appeared to accept as appropriate, given that it did not seek their deletion. Without agreement on the inputs for those machinery provisions, the parties faced them operating with uncertainty or not operating at all. In those circumstances, agreement on the matters identified was necessary for the contract to come into existence.

Home Building Act 1989

Preliminary issue

130. In its reply submissions, Dyna objected to Bocco’s reliance on the Home Building Act 1989 (the Act) because it was not referred to in the pleadings and to allow the arguments based on it amounted to trial by ambush.

131. I am satisfied that this objection was without merit for the following reasons.

132. First, it was common ground that the Act applied to the project. Clause 46 of the Contract Document provided that the works were to be done in accordance with and in compliance of the Act. It was widely understood in the building industry that since the Act was introduced in 1989, contracts for home building work must be in writing and signed by the parties.

133. Second, Bocco’s written outline of opening submissions contended that one of the reasons that there was no agreement in existence between the parties was the “statutory background”. Dyna did not seek any clarification of what was meant by that reference, if it was in any doubt.

134. Third, Mr Ayoub accepted in cross-examination that he understood that it was a requirement of the Act that a contract had to be in writing and signed for residential building work worth more than $20,000, and that he had always complied with that requirement. No objection was taken to that line of questioning.

135. Fourth, Bocco’s reliance on the Act was not a matter that could have altered the course Dyna took in the case, for example by leading further evidence or pursuing alternate lines of cross-examination. The point taken is a simple one, that the written contract was unsigned by the parties. No other evidence is or could be potentially relevant to the issue and in fact Mr Ayoub conceded in cross-examination that the contract was unsigned.

136. Finally, Dyna was given further time to deal with any prejudice that arose. It did not seek to lead further evidence or to take any other action in the Supreme Court and I am not satisfied that it could have done so.

Relevant law

137. Section 6 Home Building Act 1989 provides that the requirements of ss 7-7E of the Act apply to a contract under which the holder of a contractor licence undertakes to do any residential building work.

138. It was common ground that Dyna was the holder of a contractor licence and that the project was residential building work.

139. Section 7 of the Act sets out the requirements of a contract for residential building work that exceeds the prescribed amount of $20,000. Section 7(1) provides:

A contract must be in writing and be dated and signed by or on behalf of each party.

140. Section 10(1) of the Act provides:

1. A person who contracts to do any residential building work, or any specialist work, and who so contracts—

(a)   in contravention of section 4 (Unlicensed contracting), or

(b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or

(c)   in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.

141. It is well settled that a builder without a written and signed contract for residential building work is not entitled to damages for breach of contract and cannot enforce the contract: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 and Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327.

Consideration

142. It was common ground that there was no written contract signed by or on behalf of both parties.

143. Dyna’s contract claim was a claim for loss of bargain damages resulting from Bocco’s repudiation of the agreement entered into following Ms Belisario’s email of 7 March 2019.

144. Section 10(1) of the Act applied to that agreement if it came into existence, which I have found it did not, and precludes Dyna from seeking damages or enforcing any other remedy in respect of a breach of contract. For these reasons, Dyna’s contract claim must also fail.

What is the appropriate award of damages for breach of contract?

145. In the event that I am wrong in my conclusion that there was no agreement between the parties and that the contract could not be enforced, I will deal with damages.

146. Bocco did not contend against the proposition that if there was an agreement, its conduct between 7 March 2019 and early June 2019 amounted to a repudiation of the agreement. On that basis, Dyna was entitled to loss of bargain damages being the amount it would have received in profit if it had constructed the project.

147. Damages awarded for lost profits are the net profit retained by the plaintiff, being the difference between gross receipts and the payment of expenses necessary to perform the work: Commonwealth of Australia v Amann Aviation (1991) 174 CLR 64 at 81 (Mason CJ and Dawson J). The plaintiff must prove the fact of loss and the amount of damages on the balance of probabilities: JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 at 241 (Brooking J).

148. Dyna pointed to the builder’s margin specified in Option 1 and Option 2 which was 11% of the total expenditure necessary to construct the project. On Option 1 the figure was $1,215,456 and on Option 2 the figure was $1,212,582. However, there was no evidence as to the profit component of the builder’s margin or as to how that could be calculated. There was no evidence as to the overheads that had to be paid from this amount, such as wages, rent or operating expenses.

149. Even if I assumed that Dyna would have made a profit from the work of constructing the project, the amount of that profit would be based only on speculation and not evidence.

145. I am not satisfied that Dyna has proved on the balance of probabilities what the amount of its net profit would have been for the project. Dyna has failed on its onus and it is inappropriate to award damages for breach of contract.

Misleading and deceptive conduct claims

151. Dyna pleaded that Bocco made four representations at different times that were each misleading and deceptive in contravention of s 18 ACL.

152. In addition, Dyna pleaded that the first, second and third representations were made as to future matters. As a result, Bocco bears an evidentiary burden of establishing some reasonable ground for making the representation: s 4 ACL. Once that evidential burden is satisfied, Dyna bears the dispositive burden of establishing that Bocco did not have a reasonable ground for making the representation at the time that the representation was made: Redmond Family Holdings Pty Ltd v GC Access Pty Ltd [2016] NSWSC 796 at [52].

153. It was common ground that if the representations were made, they were made in trade or commerce.

Relevant law

154. Section 18(1) ACL provides:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive.

155. The words “misleading” and “deceptive” are tautologies. One meaning conveyed by both words is “to be lead into error”. Conduct will only be misleading or deceptive if it induces or is capable of inducing error: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191.

156. “Misleading” is capable of a number of meanings, sometimes meaning subjectively misleading and at other times objectively misleading. Its meaning is influenced by the context in which it is found: R v Credit Tribunal (SA); Ex parte GMAC (1977) 137 CLR 545 at 561.

157. Whether representations are misleading or deceptive is a question of fact to be determined in the context of the evidence as to the alleged conduct and with regard to the relevant surrounding facts and circumstances. Irrespective of whether conduct is likely to produce confusion, it cannot be categorised as misleading unless in all the circumstances, it leads the respondent into error: Taco Co of Aust Inc v Taco Co Bell Pty Ltd (1982) 2 TPR 48 and Parkdale at 198 (Gibbs CJ).

158. If it is established that a person intended to mislead another, a court may be more likely to find that the conduct complained of was misleading, but intent is not an essential element of s 18: Campomar Sociedad Limatada v Nike International Ltd (2000) 202 CLR 45 at 63.

159. The fact that a representation is subsequently corrected at a later point in time does not mean that the representation is not capable of being found to be misleading or deceptive: Tec & Thomas (Aust) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28.

160. There is nothing in s 18 that confines it to conduct engaged in as a result of a failure to take reasonable care. A person who has acted honestly and reasonably may nevertheless be liable for a breach of s 18 if their conduct has in fact mislead or deceived or is likely to mislead or deceive: Parkdale at 197 and Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 223.

161. The fact that a person who has been the subject of a misrepresentation has been careless or could have discovered the misrepresentation had he or she made proper enquiries does not absolve the maker of the misrepresentation from liability for breach of s 18: Collins Marrickville Pty Ltd v Henjo Investments Pty Ltd (1987) 72 ALR 601 upheld on appeal Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 79 ALR 83.

162. The words “likely to mislead or deceive” make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone: Parkdale and Taco Bell.

163. Conduct is likely to mislead or deceive if that is a real or not remote chance or possibility, regardless of whether it is less than or more than 50%: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25.

164. In cases of negotiation between individuals, the court must undertake an analysis of the relevant conduct in relation to the applicant alone, bearing in mind what matters of fact each party knew, or should be taken to have known, about the other as a result of the nature of their dealings: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592.

165. Where misleading conduct is alleged to have arisen as a result of spoken words, special care needs to be taken before determining on the relevant standard of proof that the words convey a misleading impression. In Watson v Foxman (2000) 49 NSWLR 315 at 318-319, McLelland CJ at CL (as his Honour then was) stated:

In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory or what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlayed, often subconsciously, by perceptions of self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

166. Silence may amount to misleading or deceptive conduct in a variety of circumstances. The essential question is whether, in all of the circumstances constituted by acts, omissions, statements or silence, there has been conduct likely to mislead or deceive: General Newspapers Pty Ltd v Telstra Corp (1993) 117 ALR 629. Silence is to be assessed as a circumstance like any other. Section 18 does not impose any general duty of disclosure. The question is whether, having regard to all of the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive: Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 (Black CJ).

167. Silence is not capable of misleading only where there is a duty to disclose at common law or in equity. It may simply be an element in all the circumstances of the case that renders the conduct in question misleading or deceptive: Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 at 88 (Samuels JA).

168. Section 18 does not require full disclosure in commercial negotiations. Parties at arms’ length in a commercial situation will often be aware of information which may, if known to the other party, cause it to take a different negotiating stance. This of itself does not impose any obligation on the first party to bring the information to the attention of the other party: Lam v Ausintel Investments Aust Pty Ltd (1990) 97 FLR 458 at 475 (Gleeson CJ) and Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25-26 (Burchett J).

169. A transitory misleading impression that is immediately dispelled may, depending on the circumstances, be of no commercial significance and not actionable in damages: Knight v Beyond Properties Pty Ltd [2007] FCAFC 170. Even if misleading, the effect of transitory conduct may be alleviated by corrective conduct to contextualise the conduct claimed to be misleading: ACCC v Singtel Optus Pty Ltd [2010] FCA 1177.

170. Where a s 18 claim is made in relation to representations alleged to have been made in the course of negotiation of complex contracts settled between the respective parties’ legal representatives, a court may be reluctant to conclude that the parties did not intend that their written agreement encompassed all of the representations between them, even if the agreement did not explicitly exclude the operation of any collateral warranties and representations: Idoshore Pty Ltd v IPN Medical Centres (NSW) Pty Ltd [2007] FCA 1175.

171. An express contractual promise or representation will only constitute a representation for the purposes of s 18 if the party making the promise or representation had no intention or capability of carrying it out at the time it was made: Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915.

172. It is not misleading or deceptive for a party to a contract to fail to inform the other party of its interpretation of a clause in the contract and/or that particular clauses will be enforced: Mander Forklift Pty Ltd v Dairy Farmers Co-op (1990) ATPR (Digest) 46-061.

173. Section 236(1) ACL provides:

If:

(a)   a person (the claimant) suffers loss or damage because of the conduct of another person; and

(b)   the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

174. In order to recover damages, a plaintiff must prove that loss or damage was suffered (because of) the defendant’s conduct in breach of s 18. This picks up the common law practical or common sense concept of causation and remoteness: March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506.

175. Causation is essentially a question of fact to be determined by reference to common sense and experience and one to which policy considerations and value judgments necessarily enter: March v Stramare.

176. As to how close the connection between the conduct and the loss or damage must be in order to sustain a claim, the law looks at what influences the actions of the parties rather than considering cause and effect in mathematical or philosophical terms. People are often swayed by several considerations, influencing them to various extents, and the law attributes causality to one or more of those considerations, provided it has some substantial rather than negligible effect: I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109.

177. There is no single and immutable test for causation for the purposes of s 236: Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) (2006) 67 NSWLR 341. Causation does not have to be established by direct evidence of the part that the relevant representation played. It is open to the court to determine the effect which the representation is taken to have had: Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357.

178. Where misleading or deceptive conduct involves misrepresentation, s 236 does not require that the person who alleges damage must have relied on the conduct. All that is necessary is a sufficient and direct link between the loss or damage alleged to have been suffered and the misleading or deceptive conduct: Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494.

179. Section 236 is quite broad and contains no stated limitations on the kinds of loss or damage that may be recovered under the section. The wide language of the section is compatible with the legislative desire to broaden the scope of authority and not to keep within the bounds of some comparison with common law damages. The section requires examination of whether a person has suffered loss or damages because of the conduct of another person. Once the causal connection is established, nothing in s 236 suggests that the amount that may be recovered is to be limited by drawing analogies with the law of contract or the law of torts: Murphy v Overton Investments Pty Ltd (2004) 78 ALJR 324 and Wardley Australia Ltd v Western Australia (1992) 175 CLR 514.

180. General principles of the assessment of damages must give way in particular cases to solutions best adapted to give the injured plaintiff an amount in damages which will most fairly compensate for the wrong suffered: Johnson v Perez (1988) 166 CLR 351. Damages are available under s 236 for consequential loss, as long as that loss is a direct result of the conduct in question: Frith v Gold Coast Mineral Springs Pty Ltd (1983) 65 FLR 213.

181. If the court finds damage has occurred, it must do its best to quantify the loss even if it involves a degree of speculation or guess work. However, this principle only applies where the court finds the loss or damage has occurred and it is insufficient for a plaintiff merely to show wrongful conduct by the defendant: Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167 at 182.

The first representation

182. Dyna pleaded that the first representation was implied from the issue of the Invitation to Tender and conveyed that:

1. the Invitation to Tender was genuine;

2. any tender made would be considered on its merits;

3. Bocco had adequate finance to fund the successful tender;

4. the information provided to Bocco by each tenderer was commercial in confidence and would be kept confidential to Dyna and Bocco.

183. Dyna pleaded at [24] of the Statement of Claim that the first representation was false, without providing particulars as to how it was alleged to be misleading or deceptive.

184. The first representation was alleged to be a single representation notwithstanding that it had four discrete parts. It was unclear from the way Dyna put its case whether it was necessary for it to prove one or all of the discrete parts in order to establish that the first representation was made.

(a)   the Invitation to Tender was genuine

185. I am satisfied that the evidence demonstrates that the Invitation to Tender was genuine, in that it was issued for the purpose of inviting tenders for the construction of the project on the terms provided for in the document.

186. The terms of the Invitation to Tender were clear that Bocco was not obliged to accept the lowest tender, or any tender at all, and that any tender would be evaluated by reference to the matters set out in clause 3.5, including that the successful tenderer had to be approved by Bocco’s finance provider.

187. The Invitation to Tender was recommended to Bocco by CCPM as a way of getting a competitive price for the work. CCPM issued the Invitation to Tender and performed the follow-up services to permit tenders to be submitted. Bocco issued the Invitation to Tender in pursuance of the project. It had already obtained development approval for the project, engaged a finance broker, retained finance providers to provide offers of finance, and engaged CCPM to act as its project manager and quantity surveyor. The evidence supported the conclusion that Bocco and CCPM were actively engaged in evaluating Dyna’s tender in accordance with clause 3.5 of the Invitation to Tender.

188. At the time that the Invitation to Tender was issued, I am satisfied that Bocco had reasonable grounds to believe that the tender process would identify a builder that it could put forward for approval by its financier and to ascertain the contract price that would be the basis of the amount of finance it sought from a lender.

189. Dyna did not identify any evidence to establish the implied representation that the tender process was not a genuine undertaking on the basis of its terms. In other words, that the implied representation was false. The mere fact that none of the tenders received as a result of the tender process were successful, does not prove that the Invitation to Tender was not genuine, because this was a possibility expressly provided for in the document.

190. I am not satisfied that subparagraph (a) of the first representation was conveyed or that, if it was, that it was misleading or deceptive or likely to mislead or deceive.

(b)   any tender made would be considered on its merits

191. What was meant by the term “on its merits” in this allegation was not developed in Dyna’s pleading or in argument.

192. The discretionary factors that could be taken into account in the assessment of any tender submitted were set out in clause 3.5 of the Invitation to Tender, extracted at [13] above. Clause 3.6 provided that Bocco was not bound to accept the lowest or any tender. In addition, the final approval of Bocco’s finance provider was expressly stated as a matter to be taken into account in accepting a tender.

193. The evidence established that Bocco evaluated the tenders after they were received in conformance with the matters stated in the Invitation to Tender. It sought further information and attended site visits to evaluate the necessary matters. It submitted Dyna’s financial statements to Blackbutt for its approval as a step in obtaining finance from Blackbutt.

194. I am not satisfied that subparagraph (b) of the first representation was conveyed by the Invitation to Tender when considered as a whole.

(c)   Bocco had adequate finance to fund the successful tender

195. I am not satisfied that subparagraph (c) is conveyed for a number of reasons. First, it is unlikely that Bocco could have applied for finance without knowing what the contract price would be, and that could not be ascertained until the completion of the tender process. An obvious purpose of the tender process was to arrive at a contract price that would be the amount of finance required to build the project.

196. Second, the reference to the approval of the tenderer by the finance provider conveyed that Bocco was still in the process of obtaining finance for the project.

197. I am satisfied that Bocco had reasonable grounds for believing that it would have adequate finance to fund the successful tender from a finance provider. It had already received an offer of finance from Daiwa and indicative terms from Blackbutt. At the time of the issue of the Invitation to Tender, Bocco did not know and could not have known that Blackbutt would fail to comply with the representations it had made. Bocco did ultimately secure finance on acceptable terms from SBS.

198. I am not satisfied that subparagraph (c) of the first representation was conveyed or that if it was that it was misleading or deceptive or likely to mislead or deceive.

(d)   the information provided to Bocco by each tenderer was commercial in confidence and would be kept confidential to Dyna and Bocco

199. Clause 3.6 of the Invitation to Tender provided that any information provided after the tender period was to be treated as confidential. Subparagraph (d) of the first representation seems to allege that the tender information provided by Dyna could not be communicated by Bocco to anyone, including CCPM, SBS or Bocco’s lawyers.

200. Dyna did not specify the basis of its allegation that there had been a breach of confidentiality.

201. I accept that Dyna’s tender was provided to Mr Ding. In my view, that was contemplated by the Invitation to Tender and necessary to allow SBS’s approval of the tender, and was furthermore implicitly authorised by the Invitation to Tender. I do not see how SBS’s approval could have been obtained otherwise.

202. Mr Ding’s unchallenged evidence was that he did not provide Dyna’s tender to Topaz.

203. I am not satisfied that subparagraph (d) was conveyed or that if it was that it was misleading or deceptive or likely to mislead or deceive.

Conclusion on the first representation

204. For all of these reasons I am not satisfied on the balance of probabilities that the first representation was conveyed or that, if it was, that it was misleading or deceptive or likely to mislead or deceive.

The second representation

205. Dyna alleged that on 27 February 2019 Bocco represented through Ms Belisario’s telephone call to Mr Ayoub that Dyna had been approved by its financier.

206. I find that this conversation in fact took place on 5 March 2019 because:

1. Ms Belisario asked Mrs Boccanfuso to make the inquiry of Mr Meads in her email of 4 March 2019;

2. Mrs Boccanfuso deposed that her conversation with Mr Meads to this effect took place on 4 March 2019;

3. Mrs Boccanfuso advised Ms Belisario that Blackbutt had approved Dyna in her email at 3.30pm on 4 March 2019;

4. Ms Belisario sent an email to Mrs Boccanfuso on 5 March 2019 advising that she was about to speak to Mr Ayoub and confirming her instructions of what to say to him;

1. Mrs Boccanfuso confirmed those instructions by email at 2.23pm on 5 March 2019; and

2. Ms Belisario confirmed that she had spoken to Mr Ayoub at 6.22pm on 5 March 2019.

207. I am satisfied that Ms Belisario conveyed the information provided by Mrs Boccanfuso, that Dyna had been approved by Blackbutt.

208. I am satisfied that Bocco had reasonable grounds for believing, as at 5 March 2019, that Blackbutt had approved of Dyna as the builder of the project and that Blackbutt would provide finance for the project for the following reasons.

209. From as early as October 2018, Bocco had been promised the interim funding in the sum of $600,000 by Blackbutt. Mrs Boccanfuso was told on a number of occasions by Mr Meads that payment of those funds would be received shortly. Blackbutt also issued a letter of offer to provide funds to construct the project and Mr Meads told Mrs Boccanfuso that the loan documentation would also be issued shortly. Mr Meads sent an email to Mrs Boccanfuso on 24 February 2019 confirming that the interim funding would be paid to Bocco on 27 February 2019 and that the loan documentation would be provided shortly thereafter. On 4 March 2019 Mr Meads told Mrs Boccanfuso that Blackbutt had no objection to Dyna and reiterated that the interim funding would be provided within 24 hours.

210. As at 5 March 2019, Bocco did not know that Blackbutt would fail to comply with the representations it had made and on the information it had at that time, it had a reasonable basis for asserting that the second representation was true.

211. I am not satisfied that Dyna has established on the evidence that Bocco had no reasonable basis for making the second representation.

212. I am not satisfied that Dyna has established that the second representation was misleading or deceptive or likely to mislead or deceive.

The third representation

213. Dyna alleged that Bocco represented by the content of Ms Belisario’s emails of 7 March 2019, set out at [51] and summarised at [53] above, that Dyna’s tender for the works was successful.

214. The third representation as it was pleaded by Dyna stands in direct contradiction of the terms of the Invitation to Tender that in order for a tender to be accepted the three distinct requirements had to be satisfied. In context, I am not satisfied that the third representation was conveyed in circumstances where the parties had chosen to deal with each other through the formal tender process and on the basis of the language used in the Invitation to Tender.

215. Further, Ms Belisario’s emails conveyed the true position that Bocco had agreed to “proceed” with Dyna to the contract negotiation stage.

216. For these reasons, I am not satisfied that the third representation was conveyed.

The silence representation

217. Dyna alleged that at no time prior to 10 April 2019 did Bocco inform Dyna that it did not intend to be bound by the agreement.

218. I am not satisfied that the silence representation was conveyed because it was predicated on the existence of an agreement between the parties which I have found, for the reasons already given, did not exist.

219. Further, I am not satisfied that Bocco’s conduct when considered as a whole was misleading or deceptive or likely to mislead or deceive. Bocco’s circumstances changed when it became apparent to it that Blackbutt was unlikely to fund the project, despite its representation that it would do so. Mr Ayoub deposed that he knew on 7 March 2019 that Bocco did not have unconditional finance approval. I infer that he also knew that the project could not continue without the provision of finance. I accept Ms Belisario’s evidence that she told Mr Ayoub on 19 March 2019 that the project had to be put on hold because Bocco did not have a finance provider in place.

220. For these reasons, I am not satisfied that the silence representation was conveyed or that it was misleading or deceptive or likely to mislead or deceive.

Damages

221. I have found that Dyna’s misleading and deceptive conduct claims fail. If I am wrong on that conclusion, I have assessed the damages I would have awarded as follows.

The first representation

222. Assuming that the first representation was conveyed and was misleading or deceptive, it follows that the time taken in preparation of Dyna’s tender would have been entirely wasted.

223. The evidence established that Mr Makhlouf and Mr Lou each spent 75 hours working on the tender and Mr Ayoub spent 118 hours working on the tender.

224. Mr Makhlouf’s evidence was that Dyna charged $95 per hour for his time. There was no evidence as to the charge out rate for Mr Lou and Mr Ayoub.

225. The law allows a robust approach to the assessment of damages pursuant to s 236 ACL if the court is satisfied that the plaintiff has proved loss. On that basis and bearing in mind the provisional nature of my assessment of damages, I would allow the sum of $95 per hour for each of Mr Lou’s and Mr Ayoub’s work on the tender.

226. The result is that I would assess damages relating to the first representation calculated for 268 hours at the rate of $95 per hour, amounting to $25,460.

The second representation

227. Assuming that the second representation was conveyed and was misleading or deceptive, I am not satisfied that any loss was caused to Dyna as a consequence of the second representation.

228. The approval of Dyna’s finance provider of a tenderer was a condition to be satisfied before the tender could be considered successful. In other words, the second representation was necessary, but not alone sufficient to establish that Dyna’s tender was successful.

229. I would not allow any damages relating to the second representation.

The third representation

230. Assuming that the third representation was conveyed and was misleading or deceptive, I am satisfied that the loss caused was that Dyna’s costs incurred after 7 March 2019 would have been entirely wasted and would have been recoverable under s 236 ACL.

231. It would not be appropriate to allow all of the costs associated with the preparation of the tender, because Dyna had committed to submitting a tender and thereby incurring the costs associated with:

1. preparing and submitting it, up to 3 December 2018 as well as;

2. the costs likely to be incurred until it was accepted, including the costs associated with evaluating the tender and providing the information referred to in clause 3.8 of the Invitation to Tender.

232. On that basis I would allow the hours set out in the time sheets of Mr Lou, Mr Mahklouf and Mr Ayoub for work done after 7 March 2019, being:

1. Mr Lou – 2 hours;

2. Mr Makhlouf– 14 hours;

3. Mr Ayoub – 31 hours. [10]

   10. I have rounded each figure to the nearest whole number.

233. The result is that I would assess damages relating to the third representation calculated for 47 hours at the rate of $95 per hour, amounting to $4,465.

The silence representation

234. Assuming that the silence representation was conveyed and was misleading or deceptive, I am satisfied that the loss caused was that Dyna’s costs incurred after 7 March 2019 up and until 10 April 2019 would have been entirely wasted and would have been recoverable under s 236 ACL.

235. On that basis I would allow the hours set out in the time sheets of Mr Lou, Mr Makhlouf and Mr Ayoub for work done between 7 March 2019 and 10 April 2019, being:

1. Mr Lou – 2 hours;

2. Mr Makhlouf – 14 hours;

3. Mr Ayoub – 20 hours.

236. The result is that I would assess damages relating to the silence representation calculated for 36 hours at the rate of $95 per hour, amounting to $3,420.

Conclusion

237. Dyna’s contract claim and its misleading and deceptive conduct claims have failed.

Orders

238. I make the following orders:

1. Verdict and judgment for the defendant.

2. The plaintiff is to pay the defendant’s costs of the proceedings on the ordinary basis, as agreed or assessed.

3. In the event that any party wants to apply for a different costs order, I grant leave to the parties to approach my Associate within 14 days to list that application for argument.

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Endnotes

Decision last updated: 23 September 2021