FPM Constructions Pty Ltd v Council of the City of Blue Mountains

The appeal concerned a dispute between FPM Constructions Pty Ltd (the builder) and the Council of the City of Blue Mountains (the principal) arising from a building and construction contract incorporating AS4300-1995. The core of the dispute involved allegations that a statutory declaration provided by the builder in support of a progress claim was false, and the consequences of such falsity, including the lawfulness of the principal's termination of the contract and the adequacy of a show cause notice. The matter was heard in the Court of Appeal of New South Wales.

The Court of Appeal was required to determine several key legal issues. These included whether the builder had made a false statutory declaration, the effect of any such falsity on the progress payment claim, whether the superintendent's power to certify progress payments extended beyond the termination of the contract, whether the builder had an accrued right to a progress payment at the time of termination, and whether the termination of the contract by the principal was lawful, particularly in light of the adequacy of the show cause notice and whether a substantial breach had occurred. Additionally, the court considered the factors relevant to a personal costs order against a company director under s 148B of the *District Court Act 1973* (NSW).

The Court of Appeal allowed the appeal in relation to the personal costs order made against the first appellant, varying the District Court's costs orders. The court also ordered that the Council of the City of Blue Mountains pay Mr Yazbek's costs of the application made against him personally for costs in the District Court. The appeal was otherwise dismissed, with the first appellant ordered to pay 90% of the respondent's costs of the appeal.