Enwerd Pty Ltd v Metier 3 Pty Ltd - [2016] VSCA 234

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2015 0128

ENWERD PTY LTD	First Applicant
and
SHL NOMINEES (1965) PTY LTD	Second Applicant
v
METIER 3 PTY LTD	Respondent

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JUDGES:	WHELAN and McLEISH JJA and CAVANOUGH AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	3 August 2016
DATE OF JUDGMENT:	6 October 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 234
JUDGMENT APPEALED FROM:	[2015] VSC 587 (Vickery J)

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CONTRACT – Deed of settlement – Payment obligation under deed of settlement dependent on practical completion under construction contract – Certificate issued but validity challenged – Whether payment under deed of settlement dependent on valid certificate – Construction contract providing for date of practical completion by reference to date in certificate or other date determined in arbitration or litigation – No other date determined – Whether judge relied on post-contractual conduct in construing deed of settlement – Whether trial judge required to determine validity of certificate – Whether applicants elected to accept validity of certificate – Leave to appeal refused.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr M H Whitten QC	Arnold Bloch Leibler
For the Respondent	Mr G H Golvan QC	Carrick Gill Smyth

WHELAN JA

McLEISH JA
CAVANOUGH AJA:

The applicants Enwerd Pty Ltd and SHL Nominees (1965) Pty Ltd are the proprietors of a block of land situated at 535 and 555 Bourke Street, Melbourne.

For the purpose of redeveloping the St James Building, which sits on the land, the applicants engaged the respondent Metier 3 Pty Ltd to provide architectural services pursuant to an undated agreement entered into in or about January 2010 (‘the architect agreement’). They also engaged Construction Engineering (Aust) Pty Ltd (‘the builder’) as the builder pursuant to a contract dated 11 July 2011 (‘the construction contract’).

The applicants’ rights and obligations under the architect agreement were novated to the builder pursuant to a deed of novation, also dated 11 July 2011. However, in practice the deed of novation was not implemented; the applicants continued to pay the respondent’s fees and generally maintained an active role in respect of the architect agreement.

A dispute developed between the applicants and the respondent regarding the fees payable under the architect agreement. The parties entered into a deed of settlement dated 19 November 2012, which contained a schedule for payment of instalments by the applicants to the respondent. The issue remaining in dispute is whether the final instalment, in the amount of $300,000, has become due and payable. A judge in the Trial Division held that it had, on 21 March 2013.[1] He ordered the payment of interest from that date accordingly (the principal amount having been paid, without admission of liability, before trial).
[1]Metier3 Pty Ltd v Enwerd Pty Ltd [No 3] [2015] VSC 587 (‘Reasons’).

The applicants seek leave to appeal from the judge’s orders. For the reasons that follow, leave should be refused.

Contractual provisions

The dispute centres around satisfaction of the contractual requirement of practical completion, in respect of which a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] VSCA 234
Decision Date: 6 October 2016

CaseChat Overview and Summary

Enwerd Pty Ltd, a plaintiff, sought leave to appeal against the decision of the trial judge in the Supreme Court of New South Wales, which ruled on the interpretation of a deed of settlement. The dispute involved a payment obligation contingent on the practical completion of construction work, as evidenced by a certificate of practical completion. The validity of this certificate was contested by Metier 3 Pty Ltd, the defendant. The central issue before the court was whether the payment obligation under the deed of settlement was dependent on the issuance of a valid certificate of practical completion and whether the trial judge was required to determine the validity of the certificate.

The court examined the terms of the construction contract, which stipulated that the date of practical completion could be determined by the date stated in the certificate or by an alternative date established through arbitration or litigation. Given that no alternative date had been determined, the court considered whether the judge had properly construed the deed of settlement by relying on post-contractual conduct and if the trial judge was mandated to decide the validity of the certificate. The court also explored whether the plaintiff had elected to accept the validity of the certificate. Ultimately, the court found that the trial judge did not err in interpreting the deed of settlement and denied the plaintiff's application for leave to appeal.

The court's reasoning was based on the principle that the construction contract allowed for the determination of practical completion by the certificate date or an alternative date, which had not been established. Consequently, the payment under the deed of settlement was contingent on the validity of the certificate. The court held that the trial judge did not need to decide the validity of the certificate but rather interpreted the deed based on the parties' conduct and the contract terms. The court concluded that the plaintiff had not elected to accept the certificate's validity, affirming the trial judge's decision.

Orders