Eminent Forms Pty Ltd v Formosa

[2004] SASC 192

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Miscellaneous Appeal)

EMINENT FORMS PTY LTD v FORMOSA & ANOR

Judgment of The Honourable Justice Besanko

1 July 2004

CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - RECOVERY

ARBITRATION - THE AWARD - APPEAL OR JUDICIAL REVIEW - GROUNDS FOR REMITTING OR SETTING ASIDE - ERROR OF LAW

Appeal by leave against an interim award made by an arbitrator – the appellant entered into a contract with the respondents to make alterations and additions to the respondents’ home –appellant was to be paid the contract price by progress payments at the completion of various stages of the work – the appellant sought payment of the first progress payment but the respondents denied an obligation to make the first progress payment because the Stage 1 works were not completed  – the respondents asked the appellant to put the works on hold until problems with work performed in Stage 1 of the contract were addressed – the appellant served a notice of termination on the respondents on the ground that the respondents were in breach of contract by their refusal to make the first progress payment because the Stage 1 work had been completed and by a number of other breaches – the respondents asserted that the purported termination by the appellant constituted an unlawful repudiation of the contract and the respondents accepted the repudiation – the arbitrator found that the appellant had wrongfully repudiated and that the respondents had accepted the repudiation – the arbitrator made an award of $22,164.00 in favour of the respondents and made no allowance for the work done by the appellant – whether the arbitrator erred in finding that certain work not completed by the appellant was a part of the Stage 1 work – whether the arbitrator erred in finding that the respondents were not in breach of their obligations under the contract not to take possession of the building area and not to disrupt the work – whether the appellant had substantially performed the Stage 1 work such that it was entitled to recover the first progress payment – discussion of the doctrine of substantial performance – whether, if the appellant is not entitled to relief on the contract, the appellant is entitled to restitutionary relief by way of a claim on a quantum meruit – discussion of the principles of quantum meruit in relation to work performed on land – whether the appellant should be given leave to challenge the award in respect of compensation awarded to the respondents for the front verandah – appeal allowed.

Commercial Arbitration Act 1986 s 38, referred to.
Hoenig v Isaacs [1952] 2 All ER 176, applied.
H Dakin & Co Ltd v Lee [1916] 1 KB 566; Bolton v Mahadeva [1972] 2 All ER 1322; Sumpter v Hedges [1898] 1 QB 673; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Steele v Tardiani (1946) 72 CLR 386, discussed.
Leighton Contractors Pty…