Forte Sydney Construction Pty Ltd v N Moit and Sons (NSW) Pty Ltd

Case •

[2021] NSWDC 673

•

14 December 2021

No judgment structure available for this case.

District Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Forte Sydney Construction Pty Ltd v N Moit & Sons (NSW) Pty Ltd [2021] NSWDC 673
Hearing dates: 1- 4, 26 November 2021
Date of orders: 14 December 2021
Decision date: 14 December 2021
Jurisdiction:Civil
Before: Russell SC DCJ
Decision:

(1)   Judgment for the defendant on the plaintiff’s claim.

(2)   Judgment for the defendant on the cross-claim for $418,485.04.

(3)   Order the plaintiff to pay the defendant’s costs of the proceedings.

(4)   Grant leave to approach my Associate within 7 days to obtain a date for submissions as to any application for a different costs order arising from any settlement offers made.

Catchwords:

CONTRACT – offer and acceptance – objective test as to whether there was a concluded bargain – implied acceptance and inferences from surrounding circumstances - offeror cannot stipulate that no response to an offer will be treated as an acceptance – three categories in Masters v Cameron

CONTRACT – tender to perform work for a price and upon conditions – tender accepted but subcontract put forward which contained different conditions – subcontract never signed – variations and deductions – extensions of time

Cases Cited:

Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61, 53 NSWLR 153

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424

Empirnall Holdings v Machon Paull Partners (1988) 14 NSWLR 523

Felthouse v Bindley (1862) 142 ER 1037

Hyde v Wrench (1840) 49 ER 132

Masters v Cameron [1954] HCA 72; (1954) CLR 353

Texts Cited:

Radan & Gooley, Principles of Australian Contractor, 4th Edition, LexisNexis

Category:Principal judgment
Parties: Forte Sydney Construction Pty Ltd (Plaintiff)
N Moit & Sons (NSW) Pty Ltd (Defendant)
Representation:

Counsel:
J Cameron (solicitor) (Plaintiff)
D Hand (Defendant)

Solicitors:
J Cameron Lawyers Pty Ltd
Coleman Greig Lawyers
File Number(s): 2019/00145109

Judgment

Introduction

  1. The plaintiff Forte Sydney Construction Pty Ltd (“Forte”) was the builder engaged by a developer on a site at Porter Street in Ryde. The defendant N Moit & Sons (NSW) Pty Ltd (“Moit”) was a subcontractor engaged by Forte to carry out excavation, piling works and shotcreting at Porter Street.

  2. These proceedings concern whether or not there was a contract between the parties, and if there was, what were the terms of the contract?

  3. The parties agree that Forte and Moit entered into an arrangement for Moit to supply, install and undertake excavation, anchoring, shotcrete and related civil works for a price of $1,536,739 plus GST, a total of $1,690,412.90.

  4. In an Amended Statement of Claim filed during the course of the hearing, Forte alleged that the parties did enter into a contract on 25 May 2018 or 28 May 2018 or 7 June 2018.

  5. Forte pleaded (Amended Statement of Claim, par 3) as follows:

“In so far as the contract was in writing, it consisted of:

a.   a letter of engagement dated 16 May 2018

b.   a contract which is headed 16.05.2018 and entitled Bulk and detailed excavation, remediation, anchoring and shotcrete subcontract together with the schedules referenced in that document

c.   The plans, drawings and documents referred to in schedule 1 of the subcontract

d.   The Scope of Works document rev B -15/05/2018

In so far as the contract was oral, it consisted of a term that the contract price included an allowance of $58,000 in respect to the defendant’s removal of general solid waste that was present on top of the surface of the ground. This arose during a conversation between Belinda LI and Paul Ciantar and the defendant at the site on or about early May 2018

The Contract was formed upon the defendant’s conduct of commencing work on 25 May 2018 or 28 May 2018 or alternatively, the defendant’s conduct of adopting and/or accepting the contract by reference to its extension of time claim dated 7 June 2018.”

  1. The parties presented a six-volume Court Book (“CB”), which was marked as Exhibits PX1, PX2, PX3, PX4, PX5 and PX6. These volumes contained most of the evidence for both sides. The letter of engagement dated 16 May 2018 referred to above is at CB 667. The subcontract (“Subcontract”) referred to in par 3b of the Amended Statement of Claim is at CB 668-712. The scope of work document referred to above is at CB 713-722.

  2. By an Amended Defence filed during the course of the hearing, Moit pleaded that in or about June 2018, or alternatively July 2018 or alternatively August 2018, it did enter into a contract with Forte to perform the work. The written contract pleaded by Moit (Amended Defence, par 3, particular iii) is a Final Tender Revision dated 21 May 2018 (“Tender”). This document is at CB 659-665.

  3. Moit filed a Further Amended Cross-Claim during the course of the hearing. This relied upon the Tender and further pleaded that Moit was entitled to additional payments for variations to the original contract, which were approved on behalf of Forte. In the alternative, Moit claimed on the basis of quantum meruit (Further Amended Cross-Claim, par 26C).

Damages Claims by the Parties

  1. The damages claimed by Forte, and by Moit in its cross-claim, were refined during the course of the hearing. The parties produced an Amended Damages Schedule (MFI 6) which set out the claims of both parties side by side.

  2. It was agreed that the initial agreed value for the work was $1,690,412.90 (including GST). The plaintiff allowed the defendant variations which totalled $220,538.38 (including GST). Moit claimed that it was entitled to payment for variations amounting to $588,373.35 (including GST).

  3. Forte claimed to be entitled to deduct from any monies owing to Moit, amounts totalling $101,521.37 (including GST). Forte also claimed liquidated damages of $210,000. Moit denied both of these claims.

  4. Before taking into account payments already made by Forte, the respective damages claims by the parties were:

  1. Forte claimed that the contract price plus the variations, minus the deductions, amounted to $1,599,429.92.

  2. Moit claimed that the contract price plus the variations, with no deductions in favour of Forte, amounted to $2,278,786.25.

  1. Both parties agreed that Forte should have credit for payments made between 31 August 2018 and 8 August 2019 totalling $1,924,386.

  2. After credit for the payments made by Forte, Forte alleged that it was owed a reimbursement of $324,956.08. On the other hand, Moit claimed that it was owed an additional $354,400.25.

  3. The parties had been engaged on a previous project in Junction Street at Ryde. Forte had retained the amount of $32,122.41 from the Junction Street project. It was agreed between the parties that this amount had to be subtracted from the claim made by Forte. This brought the Forte claim down to $292,833.67. The parties agreed that Moit was entitled either for a credit for this amount or to be paid this amount, depending on the outcome of these proceedings. The addition of the retention figure of $32,122.41 brought the Moit claim, if successful, to $386,522.66.

  4. The “big ticket” item in the Forte claim was the liquidated damages claim of $210,000. The “big ticket” claim in the Moit cross-claim was a variation for disposal of rock and other solid waste for $280,508.45 plus GST.

  5. The resolution of these “big ticket” items depended entirely upon whether the Forte version of the contract (which contained a specific provision for liquidated damages) or the Moit version of the contract (which contained a specific allowance for disposal of rock and other solid waste) was accepted.

Contractual Principles

  1. It is necessary to look at the parties’ dealings with each other to determine the extent to which they have reached consensus as to the terms of their bargain, and the extent to which the parties have intended to become immediately bound to the terms of the contract. The test as to formation is an objective one ‐ would a reasonable person in the position of the defendant and a reasonable person in the position of the plaintiff think there was a concluded bargain: Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61 at [81], 53 NSWLR 153.

  2. Inferences can be drawn from the conduct and words, or the absence of conduct or words, so that it is not always necessary to show that the defendant accepted an offer if the defendant’s conduct was such that the plaintiff was reasonably entitled to believe that the defendant was assenting to its position: Brambles at [85].

  3. To be an implied acceptance of an offer, conduct must be of such a character as necessarily to lead to the inference that the agreement had been accepted: Brambles at [162].

  4. Post‐contractual conduct is admissible on the question of whether a contract was formed: Brambles at [25].

  5. While an offer and acceptance approach is helpful, there may be circumstances where it is difficult to point to a precise point in time where a contract is formed or the acceptance communicated, in which case the Court may infer from the surrounding circumstances that at least by a certain point, a contract was in existence. In this regard, Allsop J said in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 at [369]:

“There was in fact a clear point of crystallisation of contractual intent. The contract arose from the prior conduct and communications of the parties, in particular around mid December. Mr Campbell QC called this a ‘springing contract’ and something not known to the law. On the contrary, a number of authorities discuss the need not to constrict one's thinking in the formation of contract to mechanical notions of offer and acceptance. Contracts often, and perhaps generally do, arise in that way. They can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting ‘i’s and crossing ‘t’s or where they think they have done so. Here, the ‘i’s were not dotted and the ‘t’s were not crossed because of Mr Graham's conduct. Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances, even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: ‘and we hereby agree to be bound' in this or that respect. The essential question in such cases is whether the parties’ conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract.”

  1. An offeror cannot stipulate that no response to an offer will be treated as an acceptance: Felthouse v Bindley (1862) 142 ER 1037. In Empirnall Holdings v Machon Paull Partners (1988) 14 NSWLR 523 Justice McHugh at 534 said:

“Under the common law theory of contract, the silent acceptance of an offer is generally insufficient to create any contract… The objective theory of contract requires an external manifestation of assent to an offer. Convenience, and especially commercial convenience, has given rise to the rule that the acceptance of the offer should be communicated to the offeror. After a reasonable period has elapsed, silence is seen as a rejection and not an acceptance of the offer… [An] offeror cannot erect a contract between himself and the offeree by the device of stating that unless he hears from the offeree he will consider the offeree bound. He cannot assert that he will regard silence as an acceptance.”

  1. An offer once rejected is terminated. It cannot be subsequently accepted. A counter offer is an implied rejection of an offer: Hyde v Wrench (1840) 49 ER 132.

  2. In Radan & Gooley, Principles of Australian Contractor, 4th Edition, LexisNexis, the learned authors say at [4.81-4.82]:

“An acceptance must correspond exactly with the terms of the offer. Any response to an offer that adds additional terms or alters existing terms set out in the offer is not an acceptance… However, in analysing responses to offers that may be counter-offers one needs to be careful because it may be that the response is not, and does not have the effect of, a counter-offer. First, it may be that the response to the offer is an acceptance with additional terms included, not by way of counter-offer, but rather as an acceptance of the offer with the additional terms to be accepted by the offeror if he or she so wishes, but without affecting the acceptance of the offer in its original form.”

  1. In Masters v Cameron [1954] HCA 72 at [9-10]; (1954) CLR 353 at 360 the High Court said:

“9. Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

10.    In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common.” 

Dealings between the Parties

Work at Junction Street Site

  1. In July 2017 Moit submitted a formal tender to Forte for the provision of excavation and construction services at the Junction Street site (CB 91, par 6). A tender document dated 10 July 2017 was submitted by Moit to Forte (CB 490-497).

  2. In July 2017 Forte and Moit entered into a Subcontract for Moit to provide demolition, bulk and detail excavation, remediation and shoring services at Porter Street for a price of $846,058.84 (including GST) (CB 91, par 7). That Subcontract is at CB 498-560. In addition to that lump sum, the Moit tender had quoted to dispose of classified material at rates per tonne.

  3. The Junction Street tender and the Junction Street Subcontract are both in similar terms to the Tender and the Subcontract entered into later for Porter Street. There are significant anomalies and inconsistencies between the Junction Street tender and the Junction Street Subcontract, just as there are between the Tender and the Subcontract for Porter Street.

  4. There is no evidence that these anomalies caused any difficulties for the Junction Street work. Moit provided services to Forte and issued payment claims for the works. Forte made payment for those payment claims and withheld a retention fund of $32,122.41 (CB 92, par 8).

  5. Those retention monies remain unpaid, but are the subject of agreement in the present proceedings.

Forte Requests Moit to Tender for Porter Street Project

  1. On 17 April 2018 Mr Chen of Forte sent an email to Mr Rehman and Mr Deshpande of Moit (CB 622-623). Mr Chen requested a fee proposal for bulk excavation, detailed excavation, anchors and shotcrete for the Porter Street project. He attached documents for review and pricing. Mr Chen held the title of Junior Contract Administrator with Forte.

  2. On 23 April 2018 Mr Rehman sent an email to Mr Chen enclosing a copy of a quote by Moit for review (CB 624).

  3. The Moit quote referred to in the email is a document headed “Tender Submission”. It is revision “00” (CB 625-631). While this initial version of the Tender was later amended, it is in the same format as the Tender later accepted by Forte.

  4. This document firstly sets out various prices and rates for work to be done in relation to excavation and related tasks. The “big ticket” item in this document appears under the heading “4.00 Bulk Excavation (VENM Only)”. VENM stands for “Virgin Excavated Natural Material”. The parties agreed that this meant material which was “not contaminated”. Under the heading “Bulk Excavation (VENM Only)” there appeared three items. The first was “4.01 Site Clearance”. This was a lump sum figure of $8,984.80. The second item was “4.02 Bulk Excavation in OTR”. The parties agreed that OTR meant “Other Than Rock”. Bulk Excavation in OTR had a lump sum price of $1,166,778. The third item was “4.03 E/O For Rock”. The parties agreed that “E/O” meant “Extra Over”. There was a lump sum price for “E/O Rock” of $320,034.

  5. Item 11.00 in the document was headed “Contamination”. There was no price for this and it was said to be “EXCL”, meaning excluded.

  6. Item 12.00 in the document was headed “Extra Over Rates For Disposal Of Classified Material”. Item 12.01 was “ENM (Uncontaminated Soil)”. The parties agreed that ENM meant “Excavated Natural Material” which was not VENM, but which was uncontaminated by concrete or waste. The rate for ENM (Uncontaminated Soil) was not a lump sum price, but was an Extra Over rate of $35 per tonne.

  7. Item 12.02 was “Recyclable Brick and Concrete”. This was an Extra Over rate of $32 per tonne. Item 12.03 was “General Solid Waste (Recyclable)”. This had an Extra Over rate of $100 per tonne. Item 12.05 was “General Solid Waste” which had an Extra Over rate of $235 per tonne. The document also contained Extra Over rates for things such as hydrocarbons in soil, asbestos and hazardous waste.

  8. After setting out the prices and rates, the document then set out a list of the work and services which were either excluded from or included in the price. Item 2.08 was “Dewatering during Moit’s excavation works only (Rain Water Only)”. This was said to be “included”. The case for the defendant was that the inclusion of Dewatering Rain Water Only meant that dewatering any ground water was excluded from the price.

  9. Item 4.01 stated that excavation of VENM Material Only was included in the price.

  10. Under the heading “5.00 Detail Excavation” item 5.01 stated that an “OSD Tank” was “Excluded”. The parties agreed that the phrase “OSD Tank” meant an “On Site Detention Tank”. There was such a tank underground at the Porter Street site.

  11. The document concluded by listing a number of conditions to which the offer was subject (CB 631). Included in the conditions was the following:

  1. If the tip was closed for any reason Moit was entitled to an extension of time with no costs.

  2. Any rain delays causing tip closure entitled Moit to an extension of time.

  1. The tender was “submitted on the basis that a suitable commercial arrangement will be reached”.

  2. Moit was entitled to an extension of time for completion in the case of inclement weather. The phrase “Extension of Time” was abbreviated in this and other documents to “EOT”.

  1. On 7 May 2018 Mr Deshpande of Moit sent an email to Ms Wang, Ms Li, Mr Ciantar and Mr Chen of Forte (CB 632). The email referred to a meeting held in the office of Forte the previous Friday morning. The email referred to an attached revised quote, although the revised quote was not part of the Court Book. The email referred to revised bulk excavation quantities. It stated that there would be hard rock at the bottom of the excavation which would require an additional allowance. The quote was said to show rates and quantities. Mr Deshpande signed off on the email describing his position as “Chief Estimator”.

  2. On 10 May 2018 Mr Deshpande sent an email to Ms Wang, Ms Li, Mr Ciantar and Mr Chen of Forte (CB 633-634). The email referred to an attached revised price. The attachment was not part of the Court Book. The email said:

“Please note that this Site has quite a good amount of Rock, hence the E/O for rock; rest all the rates are same as per previous job; the rates have gone up from the previous job as tip sites are going further and further. But we want to keep the relationship and work for you guys.

We can start the works in 2-3 weeks time.”

  1. I infer that the reference to a “previous job” is a reference to the work done by Moit for Forte at Junction Street.

  2. Mr Deshpande sent an email at 9.11am on 17 May 2018 to Mr Chen of Forte (CB 638). The email referred to an attached “Final Offer” and referred to a “meeting between Belinda [Li] and Michael [Moit]”. The email said that Belinda and Michael had agreed on a start date of 28 May on site. The email asked Mr Chen to send a Letter of Intent as soon as possible so that Mr Deshpande could hand the job over to the project team.

  3. The so-called “Final Offer” was another version (“Tender Revision – 05”) which is at CB 639-646.

  4. Tender Revision – 05 is in similar terms to the “00” version referred to earlier. However, item 4.01 relating to “Removal of Rubbish Concrete from Site” is a lump sum figure of $58,000, which is a significant increase on the figure of $8,984.84 for Site Clearance in the “00” version of the Tender. This higher lump sum was agreed between Ms Li of Forte and Mr Michael Moit.

  5. On 11 May 2018 Mr Deshpande sent an email at 10.02am to Ms Wang, Ms Li, Ciantar and Mr Chen of Forte (CB 635). The email referred to an attached revised price, although the attachment was not part of the Court Book. The email referred to a discussion between Mr Deshpande and Mr Chen. The revised price was said to incorporate a revision of the quantity of bulk excavation as worked out by Ms Wang. The email said:

“Rock quantity is revised and Bore Log is checked; there is no way someone is giving you all inclusive rate without E/O for rock, this is going to be hard sandstone after 4-5m and this is what we expect the rock to be. There is another option- we can have Rock as E/O @ $1 2/m3 if you guys think there is rippable rock; so when we are excavating, we witness on site when we hit rock, we measure and bill based on m3; the upper risk for you is what is mentioned in the quote. The definition of rock is – material not rippable by 20T excavator with tiger teeth bucket. We can try to do if suits.”

  1. The email concluded by saying: “I guess this is the best we can do to keep the relationship going forward”.

  2. Mr Chen sent an email to Mr Deshpande at 12.47pm on 11 May 2018 (CB 637). Mr Chen referred to a previous conversation and asked for a revision of the price for a number of reasons including:

“Bulk excavation in OTR won’t be $41 cause we accepted extra over for rock, we reckon the rate should be around $36 for shale/topsoil.”

  1. Mr Chen also said that he wanted confirmation that the work could be commenced on 21 May 2018.

  2. Mr Deshpande sent an email at 3.12pm on 11 May 2018 to Mr Chen (CB 636-637). The email referred to an attached revised price. Mr Deshpande said that he had spoken to Mr Moit and that he could not drop the bulk excavation rate. He gave an explanation for that decision including tip fees, toll fees, and the hardness of the rock that would be encountered. Mr Deshpande confirmed that Moit could start on 21 May 2018.

  3. Ms Wang sent an email at 10.05am on 18 May 2018 to Mr Deshpande (CB 647). The email said that Ms Wang was “finalizing the contract of 3-5 Porter St Ryde at the moment for the work to proceed on site asap”. There was no draft contract attached to the email. Ms Wang raised some queries about the Moit quote. She meant to send a marked-up Moit quote but forgot to attach it to the email. Ms Wang corrected this by a further email at 4.57pm on 18 May 2018 (CB 647).

  4. Mr Deshpande replied by an email sent at 5.33pm on 18 May 2018 to Ms Wang (CB 648). He attached a revised price and requested a discussion about retention.

  5. Ms Wang sent an email at 9.50am on 21 May 2018 to Mr Deshpande (CB 650-651). The email first dealt with the discussion of retention for the project.

  6. Ms Wang said:

“For the above project, I have attached the final contract for your review, sign off and send back. The clauses are the same to what we have agreed from QUBE project [a reference to the previous Junction Street project] with Nick. See below dropbox link to access all contract documents. However the final amount is still incorrect.”

  1. There was then some discussion about the quantity of shotcrete needed. Ms Wang asked Mr Deshpande to revise the price and said that she would then amend the final amount in the contract and send it back for work to proceed on 28 May 2018.

  2. Mr Deshpande replied by an email sent at 9.57am on 21 May 2018 (CB 652). This raised a further calculation in relation to shotcrete. Mr Deshpande said “Please lets go with this no. & contract – I will initial the handover and we will start planning to start on 28th May”.

  3. The reference to “this no.” is clearly a reference to the number being the “contract amount” referred to in the first paragraph of the email. The reference to “contract” is clearly a reference to the draft contract sent by Ms Wang in the previous email.

  4. Ms Wang sent an email at 10.26am on 21 May 2018 to Mr Deshpande (CB 653-654). Again there was a debate and a recalculation in relation to quantities for the job.

  5. Mr Deshpande sent an email at 10.31am on 21 May 2018 to Ms Wang concerning his calculations of quantities (CB 655).

  6. Mr Deshpande sent an email at 12.15pm on 21 May 2018 to Ms Wang (CB 656). He said:

“Please see attached final revision as per below. Kindly send the contract back with the revised amount on it.

We will plan to start on Thursday on site.”

  1. The reference to the request to sending the contract back is clearly a reference to the draft contract previously sent by Ms Wang.

  2. The reference to the “attached final revision” is a reference to the “Tender Revision – Final” which was the Tender relied upon in these proceedings by Moit as the contract between the parties (CB 658-665).

Tender Revision – Final

  1. The Tender dated 21 May 2018 (CB 658-665) contained the following under the heading “4.00 Bulk Excavation (VENM Only)”.

  1. 4.01 Removal of rubbish, concrete from site - $ 58,000

  2. 4.02 Bulk excavation in OTR - $947,973

  3. 4.03 E/O for rock - $143,292

  4. 10.01 Shotcrete  - $254,502

  1. Under the heading “13.00 EXTRA OVER RATES FOR DISPOSAL OF CLASSIFIED MATERIAL” the following appears:

  1. 13.01 ENM (Uncontaminated Soil) - $35 per tonne

  2. 13.02 Recyclable brick and concrete - $32 per tonne

  3. 13.03 General Solid Waste (recyclable) - $100 per tonne

  4. 13.05 General Solid Waste - $235 per tonne

  1. The following items were excluded from the contract price: shoring piles (Item 6), foundation piles (Item 7.00), capping beam (Item 8.00) and contamination (Item 11.00).

  2. The total price, including the “big ticket” items referred to above, was a figure of $1,536,739 plus GST.

  3. The Tender contained a list of Inclusions and Exclusions. These included the following:

  1. 2.01 Temporary Site Fence – excluded.

  2. 2.08 Dewatering for rain water only – included.

  3. 4.01 Excavation of VENM material only – included.

  4. 4.06 Rock excavation – included.

  5. 4.11 Site clearance – included.

  6. 5.05 OSD Tank – excluded.

  7. 11.00 Contamination – excluded.

  1. The Tender said it was an offer subject to certain conditions including:

  1. Our price is based on the continuous work front available on site.

  2. Kindly note Moit’s progress is subject to the Waste/Tipping Facilities, therefore if the Waste/Tipping Facilities are closed for any reason beyond Moit’s control this shall be applied as an extension of time onto the contract program – With no Costs.

  3. Any rain delays causing Tip Closure will be valid EOT’s – With no Costs.

  4. This Tender is submitted on the basis that a suitable commercial arrangement will be reached. Moits reserves the right to withdraw its Tender if it is provided commercial arrangements that are not suitable.

  5. Moits will be entitled to an Extension of Time to the Date for Completion (EOT) and delay costs in case of the following:

  1. Inclement weather (excluding costs).

  2. Unforeseen site conditions.

  3. Variations.

  4. Any acts or omissions of others.

  5. Access to Waste/Tipping Facilities.

  6. Revised traffic conditions.

  1. The Tender was signed by Mr Rehman as Estimator and Mr Deshpande as Chief Estimator.

  2. The form of the Tender makes it plain that Moit was offering to do the work requested for the prices and rates set out in the Tender and subject to the conditions set out in the Tender. The opening paragraph of the Tender was (CB 659):

“We thank you for the opportunity to tender for the above project. We have submitted our tender sum as per documents provided. Please note we require 28 days notice to establish resources for the project. Should you have any queries regarding this tender please contact the undersigned.”

  1. As recited above, Mr Deshpande had sent the Tender by an email sent at 12.15pm on 21 May 2018 to Ms Wang (CB 656). In the email he said:

“Please see attached final revision as per below. Kindly send the contract back with the revised amount on it.

We will plan to start on Thursday on site.”

  1. Ms Wang sent an email at 6.00pm on 21 May 2018 to Mr Deshpande (CB 666) attaching a “revised contract for your review, sign off and send back”. The email also attached an early work program for the construction team to follow.

Letter of Engagement

  1. Mr Hu, the Project Manager for Forte, sent a letter of engagement dated 16 May 2018 to Mr Deshpande of Moit (CB 667). While the letter is dated 16 May 2018, it must have been completed after that date, as it refers to the contract price in the final Moit Tender, which was only created on 21 May 2018. Mr Hu said:

“Forte Sydney Construction Pty Ltd is prepared to engaged in N. Moit & Sons (NSW) Pty Ltd for all Bulk & Detail Excavation, Remediation, Anchoring and Shotcrete Works, as set out, but not limited to the Scope of works, for an agreed amount of $1,536,739 + GST.”

  1. The Letter of Engagement concluded as follows:

“To accept this proposal, please sign at the foot of this letter and return to me no later than 23rd May 2018.

If, for any reason, this document is not signed and returned, Forte Sydney Construction Pty Ltd will assume acceptance by the Sub-contractor, of all terms and conditions as set out in the Contract and Scope of Works.”

  1. After the sign-off by Mr Hu, there was a space at the foot of the letter for Moit to sign under the word “Acceptance”.

  2. There is no evidence that this letter was ever signed by Moit or returned to Forte.

The Forte Subcontract

  1. The Forte Subcontract, referred to in the email from Ms Wang and in the letter of engagement is at CB 668-724.

  2. Clause 1 of the Subcontract is headed “AGREEMENT OF THE PARTIES” and provides:

“It is agreed that the Subcontractor will execute and complete the Subcontract Works for the Subcontract Sum in conformity and in all respects with the provisions of this Subcontract.”

  1. Clause 40 of the Subcontract is headed “DEFINITIONS”. The phrase “Subcontract Sum” is defined to mean:

“(a)   in respect of a lump sum subcontract the sum stipulated in Schedule 1 or such other sum as shall be determined from time to time in accordance with the provisions of this Subcontract; or

(b)   in respect of a Schedule of Rates Subcontract, the sum ascertained by calculating the products of the rates and corresponding quantities set out in the Schedule of Rates and adding to the sum thereof the total of any lump sums (provisional or otherwise) included in the tender of the subcontractor.”

  1. Clause 40 defines the phrase “Subcontract Works” to mean:

“the whole of the work to be executed in accordance with this agreement namely the work described in Schedule 3 and otherwise as shown, described or referred to in this Subcontract and including all variations provided for by this agreement and all work and the provision of all materials necessary whether such work is specifically identified in this Subcontract or not.”

  1. Schedule 3 is entitled “The Subcontract Works” and says:

“As per Scope of Work and Checklist listed in the Contract documentation.”

  1. The Scope of Works document referred to is at CB 713-719 and the Checklist referred to is at CB 720-721.

  2. Clause 2 of the Subcontract is headed “RESPONSIBILITY OF SUBCONTRACTOR”. By cl 2.2 the subcontractor must commence the execution of the Subcontract Works which require to be executed on site, after the “Date for Commencement”. Schedule 1 to the Subcontract defines this phrase to mean 24 May 2018.

  3. Clause 2.2(c) requires the subcontractor to bring the Subcontract works to Substantial Completion by the date for Substantial Completion. Schedule 1 to the Subcontract defines the phrase “Date for Substantial Completion” as follows:

“As Per Construction Program dated on 29.03.2018 Rev B.”

  1. This Construction Program is one of the Subcontract Documents as defined in Schedule 1 of the Subcontract (CB 695).

  2. Clause 4 of the Subcontract is headed “RISKS ACCEPTED BY THE SUBCONTRACTOR”. The Subcontractor accepts the risk associated with or arising out of “delays and cost increases caused by any physical, geotechnical or climatic conditions” – cl 4.1(b). The subcontractor also accepts the risks associated with or arising out of “all increased costs however incurred in the execution of the Subcontract Works resulting from any delay or disruption in the progress of the Subcontract Works” – cl 4.1(c).

  3. I pause at this point to note that one of the anomalies between the Tender and the Subcontract is that the Tender purported to give Moit the right to an Extension Of Time for delays caused by rain, but under the Subcontract, Moit had to accept the risk of “climatic conditions”.

  4. Clause 6 of the Subcontract was headed “TIME”. This clause gave the subcontractor very limited rights to claim an extension of time. For example, cl 6.2 provides that where the progress of the works is delayed by an act or omission on the part of Forte, which a reasonable subcontractor would not have anticipated, the subcontractor may claim an extension of time of the Date for Substantial Completion.

  5. It is noted that there is no provision in cl 6 for an extension of time for rain delays or delays caused by tip closures. Of course, these were extension of time provisions contained in the Moit Tender.

  6. Clause 7 of the Subcontract is headed “LIQUIDATED DAMAGES”. Clause 7.1 provides as follows:

“If the Subcontractor fails to bring the Subcontract Works to Substantial Completion by the Date for Substantial Completion, then the Subcontractor shall pay or allow to the Contractor liquidated damages calculated and assessed at the rate nominated in Schedule 1 to this Subcontract for the period after the Date for Substantial Completion during which the Subcontract Works shall remain or have remained not brought to Substantial Completion.”

  1. Schedule 1 says that liquidated damages (excluding GST) is the amount of $5,000 per day.

  2. Clause 11 of the Subcontract is headed “VARIATIONS”. Clause 11 provides as follows:

“11.1   A Variation to the Subcontract Works may be instructed at any time and from time to time by the Contractor. The valuation of the Variation shall be agreed between the parties prior to the Variation work being commenced and if there is no such agreement then the Contractor may determine the value of the Variation. The Site Manager of the Contractor is authorised on behalf of the Contractor to agree with the Subcontractor the time spent and the materials supplied by or on behalf of the Subcontractor with respect to the execution of the Variation. He is not otherwise authorised to agree to any valuation of the Variation or any part thereof.

11.2   Directions for Variations by the Contractor to the Subcontractor shall be given in writing by the Contractor and the Subcontractor is not entitled to make any claim in respect of any Variation executed by it unless it is directed in writing by the Contractor.

11.3   Where applicable Variations will be priced in accordance with rates stated in any bill of quantities or Schedule of Rates included at Schedule 6 and when there is no bill of quantities or Schedule of Rates then a reasonable price will be paid as agreed between the parties or failing agreement as determined by the Contractor in its absolute discretion.

11.4   Any Variation carried out by the Subcontractor at the request of the Contractor will be valued in accordance with this clause but shall not include any component for profit or overhead other than the percentage for profit and overhead set out in Schedule 1.”

  1. Schedule 6 to the Subcontract is headed “Schedule of Rates” and says:

“Refer to Moits Tender Submission Rev Final;”

  1. As the solicitor for Forte pointed out, this is the only reference in the Subcontract to the Moit Tender.

  2. Clause 39 of the Subcontract is headed “ENTIRE AGREEMENT”. It provides:

“This Subcontract constitutes the entire agreement between the parties and shall take effect according to its tenor notwithstanding any prior agreement in conflict or at variance with it or any correspondence or documents relating to the subject matter hereof which may have passed between the parties before its execution.”

  1. After the operative clauses of the Subcontract, there is an execution page (CB 692). This makes provision for the Subcontract to be signed on behalf of Forte by a director and a second director or the secretary. It makes similar provision for the Subcontract to be signed by Moit by a director and another director or the secretary. The execution page of the Subcontract in the Court Book is blank, and it is common ground between the parties that neither party ever formally executed the Subcontract.

Scope of Works Document

  1. The Scope of Works document referred to in the Subcontract is at CB 713-719. In turn it refers to all work to be done in accordance with the “Contract Documents”. Presumably this is a reference to the “Subcontract Documents” as defined in Schedule 1 to the Subcontract (CB 695).

  2. In cl 2.0(a) of the Scope of Works the subcontractor must “allow for dewatering of the site until the Subcontract works are 100% completed and handed over”.

  3. In cl 4.0 Bulk excavation of the Scope of Works, the subcontractor has the following responsibilities:

“(g)   Allow to remove of spoil include GSW generated from piling, anchors installation, trimming shoring wall prior shotcrete etc.

…

(i)   Liaise with the landfill site as required and pay all fees associated with the testing, dumping including all authority fees etc (EPA related fees).”

Early Work Checklist Rev C

  1. This document is at CB 720-721.

  2. Included in the Checklist is:

“2.03   Dewatering during demolition, excavation and shoring works at all time during subcontractor’s working period”

  1. Under the heading “3 Site Clearance” is:

“3.02 Disposal of GSW at an EPA facility suitably qualified to receive such materials”

  1. Under the heading “4 Bulk excavation” appears the following:

“4.01   Excavation of all materials to required RL [Relative Level] include GSW [General Solid Waste]”

Lead Up to Commencement of Excavation

  1. Mr Deshpande sent an email at 11.12am on 22 May 2018 to Ms Wang (CB 725-726). The email thanked Ms Wang for the revised contract and program for the works. The email said that the program for works was unrealistic. Mr Deshpande requested a start date of 28 May 2018, not 21 May.

  2. Ms Wang sent an email at 11.33am on 22 May 2018 (CB 727) to Mr Deshpande which said:

“The previous programme was for funder and developer and the one I sent yesterday is actually the real construction programme.

In the construction programme, we have allowed 12 weeks in full (excluding EOT) to complete the early work which is fairly reasonable based on Moits’ capacity and actual working load per day.

And yes We can adjust the commencement date to 28th of May and complete on 20th of August.”

  1. Ms Wang sent an email at 3.00pm on 22 May 2018 to Mr Deshpande enclosing an updated work program.

Commencement of Work by Moit

  1. Moit first commenced work at the Porter Street site on 25 May 2018 (CB 2315-2316 and MFI 4 par 39). On that day five truckloads of material were removed from the site. Presumably this material came from site clearance not excavation.

  2. Moit first transported excavated materials from the site on 1 June 2018 (CB 95, par 45).

  3. Moit continued to excavate materials from the site and transport them away between 4 June 2018 and 18 June 2018 (CB 95, par 46 – CB 96, par 55).

  4. On 7 June 2018 Mr Singh submitted the first Moit extension of time claim (EOTC no: 1) which sought an extension of time for three days of “inclement weather” causing “delays in bulk earthworks” on 5, 6 and 7 June 2018 (CB 1186-1189).

  5. The extension of time claim contained the following Note:

“In accordance with Clause 6 of the general conditions of the sub contracting agreement between Forte Constructions Pty Ltd and N Moit & Sons (NSW) Pty Ltd dated 25/05/2018, we hereby apply for an extension of time for Practical Completion. The delay was caused by the foremention delayed activities, we apply for an extension of time.”

  1. This is the document upon which Forte relies in par 3 of the Amended Statement of Claim, which alleges that the contract between the parties was formed by “the defendant’s conduct of adopting and/or accepting the contract by reference to its extension of time claim dated 7 June 2018”.

  2. I pause to note that each further extension of time claim contains the same note which referred to cl 6 of the Subcontract. I also note that while the Tender provided for extensions of time for inclement weather, cl 6 of the Subcontract gave Moit no such right to an extension of time.

  3. Mr Chen of Forte sent an email at 12.17pm on 19 June 2018 to Mr Deshpande (CB 892-893). He said: “As discussed, can I get the final contract back with the signature by COB today”.

  4. From 21 June to 26 June 2018 Moit continued to excavate and transport material from the site (CB 96, par 58 – CB 97, par 62).

  5. Mr Singh, the Contracts Administrator of Moit, sent an email at 2.54pm on 28 June 2018 to Mr Hu of Forte (CB 903-904). The email asked Mr Hu to consider certain amendments to the contract. These concerned:

  1. Retention.

  2. A change of the Date for Substantial Completion to 11 September 2018.

  3. An amendment to the Scope of Work document by deleting the words “temporary power” and inserting the word “excavation”.

  1. The email from Mr Singh concluded as follows:

“Should these amendments be acceptable, could you kindly make the amendments and we will promptly sign and return the Contract to you.”

  1. Mr Hu sent an email at 6.01pm on 13 July 2018 to Mr Sing (CB 924-925) which said:

“We have received your progress claim information you have sent through many different emails. Those emails and request of amended of the contract and variation rejected according to in our contract terms and conditions. We have sent the engagement letter and full set of contract to you on 21 May 2018, which is clearly stated that ‘If, for any reason, this document is not signed and returned, Forte Sydney Construction Pty Ltd will assume acceptance by the Subcontractor, of all term and conditions as set out in the Contract and Scope of Works’.

We have your first email dated 28 June 2018 requested for few amendments which is not considered for acceptance except for misprint word ‘temporary Power’ to ‘Excavation’.”

  1. Mr Horne, Construction Director of Moit, sent an email at 5.20pm on 16 July 2018 to Mr Hu and Mr Ciantar (CB 926-927). The email said:

“we kindly recommend that you review the amendments made to our subcontract agreement, they are in accordance with discussions and agreement.

As noted in the email we await your response with an amended Contract at your earliest convenience. There is no negotiation on the issues in amending the Contract.”

  1. Mr Hu sent an email at 9.35am on 23 July 2018 to Mr Horne responding to his email of 16 July 2018 (CB 928-930). Mr Hu said:

“Our engagement letter was issued after review all the discussed documents and your submitted quotation, and we are expecting you would come back to us after the engagement letter is received and reviewed with in the time frame in our engagement letter. We did not received any of the responding, so we believe the contract had been accepted as per our engagement letter. We kindly recommend you read it.

Please indicated which email your referring ‘As Noted in the email we await your response with an amended contract at your earliest convenience’.”

  1. The balance of the email dealt with the requests by Moit to make changes regarding retention money and project value.

  2. Mr Singh of Moit sent an email at 2.33pm on 23 July 2018 to Mr Hu (CB 931-932). This referred to a claim for Variation 03 which dealt with disposal of contaminated soil on rates.

  3. Mr Hu sent an email at 5.07pm on 23 July 2018 to Mr Horne and Mr Singh (CB 933). He expressed his concern in relation to a proposal by Moit to stop work on the job. He referred to organising a meeting with higher level management and the personnel who had initial conversations in relation to the agreement. Mr Hu acknowledged that he had not been involved in the initial discussions.

  4. On 30 July 2018 there was a meeting between representatives of Forte and Moit (CB 98, par 79).

  5. Moit continued to do work at the Porter Street site after the meeting on 30 July 2018 (CB 99, par 80 – CB 102, par 110).

  6. On 30 August 2018 there was another meeting between Forte and Moit (CB 102, par 111).

  7. After this meeting Moit continued to do further work at the site (CB 102, par 112 – CB 103, par 119).

  8. Ms Wang sent an email at 6.11pm on 14 September 2018 to Mr Singh and Mr Doyle of Moit (CB 1002). Ms Wang said that Mr Hu had handed the Porter Street project back to her (Ms Wang had just returned from maternity leave) and she had become aware that there were 10 claimed variations. Ms Wang said:

“Before I could assess any of the variation and contract work progress claim, could you please send me the signed copy of contract that was sent prior job commenced? I have attached the emails sent to Moits re the contract sign off and also a few verbal discussion I could remember months ago.

Please get onto that asap so we could assess your variation and contract works by the earliest possible.”

  1. Ms Wang sent an email at 3.32pm on 17 September 2018 to Mr Doyle (CB 1008). Ms Wang said:

“I got all your variation and PC invoices.

I was just asking the signed contract from Moits that’s the request from day 1 prior your commencement. (See above email correspondences) I can’t see why that could lead u to stop the work?

Please advise.”

  1. On 24 September 2018 another meeting was held between Forte and Moit (CB 104, par 127).

  2. After this meeting Moit continued to do work on the site (CB 104, par 128 – CB 105, par 145).

  3. Ms Wang sent an email at 3.12pm on 26 November 2018 to Mr Singh (CB 1040). Ms Wang said:

“Please note Moits completed the early work for 3-5 Porter St Ryde on 15th of November not 13th Nov 18

Refer to the contract signed with Moits, the practical completion is 20th of August 18 as per agreed construction program dated on 29th March 18 Revision B. Noted submitted EOT has been counted towards the revised PC. Final PC date will be assessed based on original contract PC date and EOT approved. Note FSC will determine the extent of delay relating to the above premises”

  1. Mr Doyle sent an email at 5.15pm on 27 November 2018 to Ms Wang (CB 1041-1042). Mr Doyle said:

“Further to your e-mail below, I believe you have your dates wrong.

We sent back the letter of intent and contract with some comments and no further correspondence was made regarding the matter so we deemed our amendments to be accepted.

On page 28 most notably, we have crossed out the construction program as dates on the 29.03.18 rev B and amended the revised date to the 11th of September 2018.

Practical completion was not the 20th of August as you suggested but the 11th of September as we pointed out.

With that being said, and after reviewing Moits extension of time claims 1 through 14 that can be fully substantiated and deemed to be accepted, we feel there is no extent of delay relevant to our trade of works.

For absolute clarity on both ends, we would also like to attach EOT 15, which comprises of some delays we encountered in between the 30th of October and our practical completion date.”

  1. Ms Wang sent an email at 7.00pm on 27 November 2018 to Mr Doyle and Mr Singh (CB 1043). Ms Wang said:

“First of all, I have never received your revised contract with comments before 23rd of May 18 as the person who signed the contract with Moits. As far as I know, Moits didn't sign the contract and SOW and I have chased so many times with no result. Only today I received the above document?? There is no signature even on the above attached contract. Please read below abstract from LOE

To accept this proposal, please sign at the foot of this letter and return to me no later

If, for any reason, this document is not signed and returned, Forte Sydney Constru acceptance by the Sub-contractor, of all terms and conditions as set out in the Contra

So there will be no negotiation with the contract terms by NOW which is 6 months after

Payment schedules 6 has been attached for your invoice 13496

EOT assessment has been also attached for your review”

  1. There was further correspondence between the parties between late November 2018 and late February 2019 (CB 106, par 148-151).

  2. On 26 February 2019 Moit filed an adjudication application for unpaid monies relating to both the Junction Street and Porter Street projects. An adjudication determination was provided (CB 106, pars 152-153).

Consequences Arising from Findings as to Contract

  1. As recited above, the parties put forward different versions of the contract. Forte relies on the Subcontract and Moit relies on the Tender.

  2. Forte claims to be entitled to damages of $292,833.67. Moit says that it owes nothing, and that it is entitled to damages of $386,522.66 (see MFI 6).

If the Subcontract Applies

  1. Forte claims to be entitled to liquidated damages of $210,000. Forte also claims to be entitled to make a deduction for the additional cost of excavating the OSD Tank. It values this work at $60,110 plus GST. It can be seen that these two amounts form the bulk of the claim for damages of $292,833.67.

If the Tender Applies

  1. Moit claims to be entitled under its Variation No 3 to $280,508.45 plus GST for GSW removal. This is the “big ticket” item in the Moit claim for damages of $386,522.66.

  2. The determination of whether either party is entitled to these large amounts, or to the smaller claims which are considered below, depends upon the findings as to whether there was a contract between the parties, and if so what were its terms.

Consideration of the Contract and its Terms

  1. In accordance with the authorities cited above I will examine the dealings between the parties to determine the extent to which they reached consensus as to the terms of their bargain and the extent to which they intended to become immediately bound to the terms of a contract.

  2. On 17 April 2019 Forte invited Moit to submit a tender for bulk excavation, detailed excavation, anchors and shotcrete for the Porter Street project (CB 622-623).

  3. Moit submitted a Tender Submission which went through several revisions as discussions took place between the parties concerning pricing and quantities.

  4. The various iterations of the Tender consistently stated that:

  1. A lump sum figure was being quoted for bulk excavation of VENM only.

  2. There were Extra Over rates per tonne for disposal of classified material.

  3. Moits was responsible for dewatering rainwater only during excavation works.

  4. Any OSD Tank was excluded.

  5. Moit was entitled to extensions of time for inclement weather or tip closure.

  1. A draft contract, in the form of the Subcontract, was prepared by Ms Wang and sent to Moit (CB 647-648).

  2. The parties agreed that Moit would start on site on 28 May 2018 (CB 652).

  3. The final version of the Tender was sent on 21 May 2018 (CB 656).

  4. The Tender quoted for bulk excavation of VENM only (CB 658-665). It gave a lump sum price for bulk excavation in Other Than Rock and an Extra Over for rock excavation. It also gave a lump sum price of $58,000 for removal of rubbish and concrete from the site, which was a reference to ground clearance rather than excavation.

  5. The Tender included Extra Over rates for disposal of classified material including ENM (uncontaminated soil), recyclable brick and concrete, General Solid Waste (recyclable) and General Solid Waste.

  6. The Tender stated that Moit was responsible for Dewatering Rain Water Only. The Tender made it plain that excavation of VENM and rock was included. Any OSD Tank was excluded. Contamination was excluded.

  7. The Tender stated that conditions of the Tender included a right to an extension of time for inclement weather, unforeseen site conditions or restricted access to tipping facilities.

  8. One of the conditions of the Tender was that it was submitted on the basis that a suitable commercial arrangement would be reached. Moit asked Forte to send the contract (meaning the Subcontract) back with the revised amount on it (CB 656).

  9. Ms Wang sent a revised contract to Moit for “review, sign off and send back” (CB 666).

  10. The Letter of Engagement sent by Mr Hu on behalf of Forte requested Moit to sign the letter and return it no later than 23 May 2018. The Letter of Engagment said that if it was not signed and returned, Forte would assume acceptance by Moit of all terms and conditions in the Subcontract and the Scope of Works (CB 667).

  11. The Letter of Engagement was never signed by Moit or returned to Forte. In accordance with the authorities cited above, the non-signature and non-return of the Letter of Engagement cannot be treated as an acceptance of the proposed contract – Empirnall Holdings.

  12. The Moit Tender is cast as an offer. The Forte Letter of Engagement is also cast as an offer, since it refers to Forte needing to sign to “accept” this proposal.

  13. As previously recited, many of the provisions in the Forte Subcontract are at odds with the basis on which Moit submitted its Tender. So are provisions in the Scope of Works and the Early Work Checklist Rev C.

  14. Moit commenced work at the Porter Street site on 25 May 2018, presumably doing site clearance (CB 2315-2316). Moit first transported excavated materials from the site on 1 June 2018 (CB 95, par 45).

  15. There is no evidence that there were any discussions about the terms of the Subcontract proffered by Forte to Moit.

  16. When Moit commenced work at the Porter Street site on 25 May 2018, it had submitted a Tender which clearly stated that while there were lump sums for site clearance, bulk excavation of VENM and excavation of rock, the disposal of contaminated material would be on rates per tonne and that this was additional to the lump sums being quoted.

  17. Forte wanted the work started promptly. By requesting and permitting Moit to come onto the Porter Street site and commence works on 25 May 2018, I find that Forte engaged Moit on the terms of the Tender.

  18. Forte could not unilaterally impose upon Moit a Subcontract containing terms which were in conflict with the basis on which the Tender was submitted and accepted.

  19. It defies commercial common sense to think that Moit put forward a tender on the basis of Extra Over rates for disposal of contaminated material, but somehow would accept the proposition that it could not charge at all for disposal of such material. It was clear on the evidence that neither party had much idea what was underneath the surface before excavation commenced. It is fanciful to think that Moit, as a commercial enterprise, would quote to do everything (including disposal of contaminated material) for a lump sum when it had no idea what was to be found underneath the surface once excavation started.

  20. A reasonable person in the position of Forte and a reasonable person in the position of Moit would think that there was a concluded bargain when Forte engaged Moit to start work on the Porter Street site on the basis of the Tender, including its pricing and conditions.

  21. If Forte was unhappy about the basis upon which Moit was offering to do the work, then it had two options. It could have rejected the Tender or it could have gone back to Moit and said that it was not interested in Extra Over rates for disposal of material, but wanted a lump sum for the entire excavation project. Forte could also have made it plain that Moit had to quote to remove the OSD Tank, do all dewatering of ground water encountered during excavation, and should exclude any extensions of time for inclement weather or tip closure.

  22. If Forte had taken that stance with Moit, then the only possible commercial approach of Moit would have been to entirely re-price its Tender.

  23. I find that the arrangement between the parties fell into the first Masters v Cameron category. The parties had been in negotiation and reached agreement upon terms of a contractual nature but also agreed that the matter of their negotiation would be dealt with by a formal contract. The parties reached finality in arranging all the terms of their bargain and intended to be immediately bound to the performance of those terms, but proposed to have the terms re-stated in a form which was fuller and more precise but not different in effect. The parties never did agree upon a fuller and more precise form.

  24. The Subcontract put forward by Forte was radically different in effect from the terms proposed in the Tender by Moit which were accepted by Forte. Forte had no right to insist upon Moit executing the Subcontract put forward, at least in the terms stated by Forte. No doubt the parties expected that they would agree on their mechanics for carrying out the contract, including such matters as invoicing, payment, GST, insurance, how to make a variation claim and who had authority to approve such claims.

  25. By putting forward the Subcontract in the form it did, Forte tried to unilaterally impose upon Moit the obligation to provide all of the services which were part of the Tender for the price on the first page of the Tender (CB 659), but ignore the subsequent Extra Over rates, exclusion and conditions of the Tender (CB 660-665).

  26. I find, as pleaded in par 3 of the Amended Statement of Claim, that the contract was formed (meaning concluded) upon the defendant’s conduct in commencing work on 25 May 2018. I find that the contract was the Tender submitted by Moit and accepted by Forte. I find that the Subcontract put forward by Forte was not a contract between the parties, principally because important provisions in it were completely inconsistent with the Moit Tender and the basis upon which Forte engaged Moit, being the terms and conditions in the Tender.

  1. While each variation claim submitted by Moit contained a note that it was a claim pursuant to cl 6 of the Subcontract, all that reflects is that the person preparing the variation claim made an assumption that the parties had entered into the Subcontract. Forte can take little comfort from the Note on each of the variation claims, as most of the claims (being for inclement weather or tip closure) are completely inconsistent with cl 6 of the proposed Subcontract. Such claims can logically only be submitted after an event such as rain or tip closure has occurred, not three days before as required by cl 6.2. Such a provision was never part of the Tender by Moit, was never discussed, and cannot be unilaterally imposed as it is inconsistent with the contract constituted by the Tender.

Deductions Claimed by Forte

Dewatering Ground Water

  1. Forte claims six amounts arising from expenses it incurred to remove the ground water found during the excavation process. I have already found that the contract between the parties, in accordance with the Tender, obliged Moit only to dewater for rain water. Moit did this. The additional expenses claimed by Forte relate to dewatering ground water. In accordance with the contract between the parties, that was an obligation of Forte and not Moit.

  2. In MFI 6 the six amounts claimed as the deduction for dewatering ground water are:

  1. D1 - $3,969.57

  2. D2 - $3,912.18

  3. D3 - $1,041.06

  4. D4 - $5,833.39

  5. D6 - $1,955.36

  6. D8 - $3,187.27

  1. I do not allow the six amounts claimed as a deduction by Forte relating to dewatering ground water.

Anchor De-stressing

  1. This was undoubtedly an obligation of Moit, which it did not perform. In an email dated 15 January 2019 (CB 2231) Mr Doyle said that Moit would not return to the site to de-stress the anchors “until all our payments have been sorted”.

  2. Moit engaged another contractor to perform this work and paid $11,220 to have it done (CB 2240). I find that Forte is entitled to a deduction for this amount.

Concrete Barrier

  1. Mr Horne in his affidavit dated 19 July 2021 said:

“I am aware that concrete barriers were placed along the Porter Street elevation adjacent to the road frontage by Forte prior to Moits initial site visit. There was no communication from Forte that Moits were required to take over the ‘hiring’ of these concrete barriers. They formed part of the site as did the fencing around the boundary perimeter of the site.” (CB 137, par 63b).

  1. There is nothing in the Moit Tender to indicate that it was taking on the obligation of providing concrete barriers. There was no challenge to the assertion by Mr Horne that the barriers were already in place prior to the initial site visit by Moit. This was of course was before any excavation was done at the site. In those circumstances I find that the obligation to provide concrete barriers was that of Forte and not Moit. I do not allow any deduction for D9, being the two invoices for the hire of the concrete barriers.

Excavating the OSD Tank

  1. Both parties were aware of the existence of an OSD Tank below ground level at the Porter Street site. It was on the drawings and plans given to Moit to provide their Tender. The Tender clearly stated that excavation of the OSD Tank was excluded. Thus it was not part of the contractual obligation of Moit to excavate the OSD Tank and that responsibility remained with Forte.

  2. Forte arranged for a contractor to excavate the OSD Tank. The invoices for the excavation of the OSD Tank were in the amounts of $51,700 inclusive of GST (CB 2263) and $14,421 including GST (CB 2251). Because both these amounts relate to the excavation of the OSD Tank, they were the responsibility of Forte and not Moit. I do not allow any deduction for those invoices.

Liquidated Damages

  1. Forte claims liquidated damages at a rate of $5,000 per day for 42 days. I do not allow this amount for two reasons. Firstly, the right to liquidated damages arises, if at all, under the Subcontract. I have already found that the Subcontract was not part of the agreement between the parties. Secondly, I have found above that pursuant to the Tender (which was the contract between the parties) Moit was entitled to claim extensions of time for inclement weather or the tip being closed. I find that Moit was entitled to extensions of time and that even if there was a liquidated damages clause binding upon the parties, Forte would have no entitlement to such damages as the extensions of time meant that Moit finished its contract within an appropriate time frame.

Conclusion in Relation to Deductions

  1. I allow the claim for D7 in the amount of $11,220 including GST. This relates to anchor de-stressing which Moit declined to perform. I disallow all other claimed deductions.

Variations Claimed by Moit

  1. In MFI 6 Moit claimed for 11 “variations”, having abandoned its claim for V12.

  2. The amounts claimed related to monies expended by Moit for the benefit of Forte, to Extra Over rates relating to removal of contaminated ground and to additional works performed by Moit at the request of Forte.

  3. Of the 11 claimed “variations” four were not disputed by Forte at all (V1, V2, V6 and V7), three were disputed as to quantum (V4, V8 and V9) and the balance were completely in dispute.

V1 Fencing Hire

  1. Moit claimed $2,550.19 plus GST. Forte admitted liability for this amount.

V2 Steel Bin Hire

  1. Moit claimed $3,139.50 plus GST. Forte admitted liability for this amount.

V3 GSW Removal

  1. Moit claimed $280,508.45 plus GST. The invoice for this claim is at CB 2098. The invoice sets out dates from 1 June 2018 through to 22 June 2018. The registration number of each truck which took the material for disposal is given. The material type, quantity, rate and amount for each load taken to the tip is set out. The types of material which are the subject of the invoices are ENM and GSWR. Both types of material were not the subject of the lump sum price in the Tender and were specifically set out as Extra Over rates per tonne. I have found above that in accordance with the Tender, being the contract between the parties, Moit was entitled to charge for these loads and Forte was obliged to pay for them.

  2. In her affidavit dated 20 July 2020 Ms Li said that Forte disputed that the item was a variation and said “The work was part of the contract Scope of Works”. For the reasons set out above, I have found to the contrary.

  3. There was no dispute raised as to the reasonableness of the amounts charged for the various disposal trips, if it was found that Moit was entitled to so charge. In any event, Moit tendered an expert report from Mr Madden dated 22 October 2021 (CB 195-488). In that report Mr Madden analysed the various charges made by Moit, including for variation V3. Mr Madden found that the amounts and rates were reasonable. I also find to that effect.

  4. My conclusion is that Moit is entitled to add $280,508.45 plus GST to its claim.

V4 Capping Beam

  1. In his affidavit dated 19 July 2021 Mr Horne said that he had a conversation with Mr Ciantar of Forte about a missing capping beam. Moit was requested to rectify the problem and acted in accordance with the report of an engineer engaged by Forte. Mr Horne said that employees of Moit carried out the rectification work in accordance with the engineer’s report (CB 133, pars 41-45).

  2. In her affidavit dated 20 July 2020 Ms Li agreed that Moit was entitled to be paid for this work but said that Forte disputed the amount. Moit claimed V4 in the amount of $58,892.90 plus GST and Forte said that it was only obliged to pay $47,512 plus GST.

  3. Ms Li exhibited to her affidavit a copy of Forte’s assessment of the claim. She said:

“The reason for the difference between the plaintiff and the defendant and the relevant calculation is set out in the handwriting on the document by the plaintiff, namely that the relevant rate is inclusive of machine operation costs, and that such costs should not have been charged separately.” (CB 65, par 53).

  1. The Moit invoice together with the Forte handwritten assessment is at CB 2179.

  2. The only expert evidence in relation to the value of the work done by Moit is contained in the report of Mr Madden. He was not challenged in relation to this part of his report. Mr Madden assessed the appropriate figure for V4 at $56,215.95 plus GST (CB 204, par 6.2). This is the amount which I will allow in favour of Moit in relation to V4.

V5 Dewatering Ground Water

  1. Moit claims $7,473.10 plus GST for labour and hire of pumps to dewater ground water from the excavation site. (CB 2181)

  2. I have already held that this was an obligation of Forte, and since Moit paid for that, Forte must reimburse Moit. Mr Madden assessed the cost of that work at greater than the amount claimed by Moit (CB 204, par 6.2). I will allow the amount of $7,473.10 plus GST claimed by Moit.

V6 Over Excavation

  1. Moit claims the amount of $56,461.91 plus GST and Forte agrees that Moit is entitled to this amount.

V7 Machine Hire

  1. Moit claims the amount of $11,157.76 plus GST and Forte accepts that it is liable for this amount.

V8 and V9 Additional Anchoring

  1. Forte accepts that it is liable for these two amounts but disputes the quantum. For V8 Moit claims $14,962.00 plus GST but Forte says that the correct amount should be $12,568.08 plus GST. For V9 Moit claims $82,918.50 plus GST but Forte says that the correct amount is $67,100 plus GST.

  2. The only expert evidence is to be found in the report of Mr Madden. Again he was not challenged about his opinion on V8 and V9. For V8 Mr Madden found $11,572.50 plus GST to be a fair and reasonable figure. For V9 he found $81,322.50 plus GST. Both amounts are slightly less than the claim made by Moit. I will allow the amounts set out in the report of Mr Madden.

V10 Hourly Works September

  1. Moit claims the amount of $11,392.05 plus GST. The invoice for V10 is at CB 2202. There are nine items on the invoice. Two relate to work done “next door”, which I presume is at Junction Street not Porter Street. Three items relate to dewatering.

  2. Mr Horne said in his affidavit dated 19 July 2021 that the line items in the invoice related to miscellaneous works which fell outside the Scope of Works. He said that the work consisted of labour for dewatering ground water, moving blue metal, jackhammering, digging trenches and hiring a 24-tonne excavator to lift steelwork and formwork. Mr Horne says that Mr Ciantar provided directives to carry out these items of work. They are recorded in site diaries prepared by Moit and signed by Mr Ciantar (CB 136, pars 56-57).

  3. While Ms Li provided a handwritten assessment of the variation claim, the only expert evidence came from Mr Madden as to the appropriate value of the work. Mr Madden examined the documentation in relation to that work and came up with a figure slightly higher than that claimed by Moit. I will allow the Moit figure of $11,392.05 plus GST.

V11 Concrete Pour

  1. In his affidavit dated 19 July 2021 Mr Horne said the following in relation to V11:

“58   Between 25 September 2018 and 26 September 2018, Ciantar directed Moits to stand down its 25-tonne excavators due to a concrete pour on site. A site diary was prepared by me or another employee of Moits, and signed by Ciantar, which detailed that the machinery was stood down. A copy of this site diary appears at page 117 of Exhibit JH-1.

59   Forte had not provided adequative notice to Moits for this delay, and it was charged as a stand-down cost and issued as a variation to Forte. Based on my experience, this was a usual procedure in the industry.”

(CB 136, pars 58-59)

  1. In her affidavit dated 20 July 2020 Ms Li simply said that Forte rejected the variation.

  2. One of the conditions of the Tender was that the price was based “on the continuous work front available on site”. It appears from the evidence of Mr Horne, which was not challenged, that on 25 and 26 September 2018 Moit could not perform work on the site due to a direction given by Mr Ciantar, arising from a concrete pour. There was no evidence that somehow Moit could have deployed its labour and equipment to another part of the site to continue work.

  3. The direction to stop work issued by Mr Ciantar meant that there was not a continuous work front available on the site, to pick up the words to be found in the conditions in the Tender. I find that the expense incurred by Moit in this regard is a variation to which it is entitled. Mr Madden assessed the variation at a figure significantly greater than that claimed by Moit. I propose to allow the Moit amount for V11 of $5,428.50 plus GST.

Summary of Findings in relation to Variations

  1. The table below sets out my findings in relation to the amounts to which Moit is entitled for variations:

VARIATION

AMOUNT ALLOWED

V1 Fencing Hire

$2,550.19

V2 Steel Bin Hire

$3,139.50

V3 GSW Removal

$280,508.45

V4 Capping Beam

$56,215.95

V5 Dewatering

$7,473.10

V6 Over Excavation

$56,461.91

V7 Machine Hire

$11,157.76

V8 Additional Anchoring

$11,572.05

V9 Additional Anchoring

$81,322.50

V10 Hourly Works September

$11,392.05

V11 Concrete Pour

$5,428.50

Sub Total

$527.221.96

Plus 10% GST

$52,722.20

TOTAL

$579,944.16

Conclusions and Orders

  1. Applying the findings and figures above, I find that Forte is not entitled to any damages against Moit, but Moit is entitled to damages on its cross-claim against Forte in the amount of $366,873.47. This amount is calculated as follows:

ITEM

AMOUNT

Tender Value (incl GST)

$1,690,412.90

Plus Variations (incl GST)

$579,944.16

Sub Total

$2,270,357.06

Less D7 Deduction (incl GST)

$11,220.00

Sub Total

$2,259,137.06

Less payments made

$1,924,386.00

Sub Total

$334,751.06

Plus Retention Junction Street

$32,122.41

TOTAL

$366,873.47

  1. Moit claims interest at court rates. It alleges in the Further Amended First Cross-Claim that the adjusted date for substantial completion was 13 December 2018. Interest will run from that date. The calculation is:

START DATE

END DATE

DAYS

RATE

TOTAL

13/Dec/2018

31/Dec/2018

19

5.5%

$1,050.36

01/Jan/2019

30/Jun/2019

181

5.5%

$10006.10

01/Jul/2019

31/Dec/2019

184

5.25%

$9,709.58

01/Jan/2020

30/Jun/2020

182

4.75%

$8,665.63

01/Jul/2020

31/Dec/2020

184

4.25%

$7,838.66

01/Jan/2021

30/Jun/2021

181

4.1%

$7,459.09

01/Jul/2021

14/Dec/2021

167

4.1%

$6,882.14

TOTAL

1098

$51,611.57

  1. The total judgment on the cross-claim will be: $366,873.47 + $51,611.57 = $418,485.04.

  2. Costs will follow the event but can be further argued if a different order is sought depending upon whether any offers were made and rejected.

  3. The orders are:

  1. Judgment for the defendant on the plaintiff’s claim.

  2. Judgment for the defendant on the cross-claim for $418,485.04.

  3. Order the plaintiff to pay the defendant’s costs of the proceedings.

  4. Grant leave to approach my Associate within 7 days to obtain a date for submissions as to any application for a different costs order arising from any settlement offers made.

**********

Amendments

01 February 2022 - Citation added to Brambles Holdings Limited v Bathurst City Council

Added the word "truck" to par 192

Decision last updated: 01 February 2022

Actions
Download as PDF Download as Word Document
Cases Cited

4

Statutory Material Cited

0

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833
Fox v Percy [2003] HCA 22
Moratic Pty Ltd v Gordon [2007] NSWSC 5