Fraser Lyne Constructions Pty Ltd v Waba

[2025] NSWSC 600

Supreme Court

New South Wales

Medium Neutral Citation:

Fraser Lyne Constructions Pty Ltd v Waba [2025] NSWSC 600

Date of orders:

18 June 2025

Decision date:

18 June 2025

Jurisdiction:

Equity - Technology and Construction List

Before:

Peden J

Decision:

At [71]

Catchwords:

CONTRACTS — Termination — Whether parties agreed to terminate building contract

CONTRACTS — Remedies — Damages — Proof of loss or damage — Whether plaintiff entitled to loss of bargain damages following defendant’s alleged repudiation — Where plaintiff has failed to adduce precise evidence of quantum of loss of bargain damages

Legislation Cited:

Home Building Act 1989 (NSW)

Cases Cited:

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423

Long Spring Pty Ltd v RD Beechworth Pty Ltd [2025] NSWSC 437

Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10

Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275

Troulis v Vamvoukakis [1998] NSWCA 237

Category:

Principal judgment

Parties:

Fraser Lyne Constructions Pty Ltd (Plaintiff)
Dr Alakirawa Agwana Waba (Defendant)

Representation:

Counsel:
RD Turnbull (Plaintiff)
M Maconachie (Defendant)

Solicitors:
Watson Webb (Plaintiff)
Tony Cox Lawyers & Conveyancers (Defendant)

File Number(s):

2023/436348

Publication restriction:

Nil

JUDGMENT

1. Fraser Lyne Constructions Pty Ltd is a residential building company, which acts through its sole director, Mr Fraser Lyne. It claimed that it accepted Dr Alakirawa Waba’s repudiation of a July 2022 costs plus contract to build his home on river-front land in Sancrox, New South Wales.

2. Under the contract, Fraser Lyne was entitled to a 20% builder’s margin on the building costs. Fraser Lyne sought loss of bargain damages for that lost builder’s margin, in the sum of about $451,000.

3. Fraser Lyne must fail for the reasons that follow. Dr Waba is not liable, because the parties agreed to terminate the contract in early 2023, on the basis that Dr Waba paid Fraser Lyne its reasonable expenses for site visits and meetings.

4. Had it been necessary to decide, I would not have upheld Dr Waba’s alternative submission that Fraser Lyne repudiated the contract by providing a second estimate of costs that was out of all proportion to the original quote. Before closing submissions, Dr Waba also sensibly abandoned a misleading or deceptive conduct claim against Fraser Lyne.

5. The key issues in dispute were:

1. Did the parties enter into an agreement to terminate the July 2022 building contract?

2. If there was no such agreement to terminate, did either party repudiate the building contract and, if so, what was the appropriate remedy?

Chronology of events

6. By July 2021, Dr Waba had approached architects Collins W Collins to prepare drawings for a residential dwelling on his land.

7. On 15 October 2021, Dr Waba, Mr Derek Collins and Mr Lyne met on site and discussed the project. I accept that Dr Waba had no building experience and relied on the expertise of Mr Collins and Mr Lyne in drafting appropriate plans and construction matters.

8. Mr Collins’ drawings went through various versions. On 6 January 2022, version issue K was submitted to the Port Macquarie Hastings Council for development approval.

9. On 6 March 2022, Fraser Lyne provided Dr Waba a pricing estimate of $867,481.88 “purely for council only. This is not an indication of costings”. The basis of that estimate was not in evidence.

10. On 14 March 2022, the Council granted development application approval.

11. On 23 March 2022, Dr Waba requested that Fraser Lyne organise Home Owner Warranty Insurance. However, that needed to wait until Fraser Lyne had completed another project, because at the time it did not have sufficient capacity for further insurance liability.

12. On 7 April 2022, the construction certificate was issued. On the same day, Fraser Lyne provided Dr Waba with a draft HIA standard form “costs plus contract.” Mr Lyne had not completed many details, but asked Dr Waba to do so, and indicated he would the “complete contract for your bank”. Mr Lyne’s claim in cross-examination that he did not “actually know why the word ‘bank’ is there” in his email was not plausible. Neither do I accept Mr Lyne’s assertion that it was only in September 2022 that he “was starting to find out” that Dr Waba was using bank funds for the construction, as Mr Lyne’s own documents are to the contrary.

13. I consider that by April 2022, Dr Waba had communicated to Mr Lyne that he was borrowing money from his bank for the construction costs and his funding was limited. This is consistent with other evidence:

1. Mr Lyne included in the draft contract he sent to Dr Waba “please advise” next to “lending body” in the contract.

2. Mr Lyne sent an email on 11 April 2022 to various trades stating “the client wants indicative costs for the bank.”

3. On 14 April 2022, Dr Waba and Mr Lyne exchanged text messages about the bank’s requirements:

Waba: The bank wants to know the cost of the building. I don’t see it on the contract. …

Lyne: I am currently getting all the costings together getting all the trades to provide me estimates for there [sic] works. So as soon as I have that I’ll send it over.

4. Throughout 2022, Dr Waba and his mortgage broker/financial advisor, Mr Chris Cheng, repeatedly asked Mr Lyne for a schedule of progress payments for the bank’s satisfaction.

14. Mr Lyne’s suggestions in cross-examination that Dr Waba had not informed him he was borrowing construction costs cannot have been correct, and speaks against his credit. The same is true for his denial that Dr Waba had told him that St George Bank was to fund the construction and that is why it was referred to in the contract.

15. On 4 June 2022, Mr Lyne sent Dr Waba “estimates for your build”. The email continued:

Please Note that this does not include PC [prime cost] Items like, tiles, stone, bathroom fittings, floor boards, Kitchens, etc as these are not known yet or specified. …

If you are happy with everything, I am ready to get “Home Owners Warranty” out and open up your job and get construction certificate.

16. The attached two and a quarter page “estimate trade breakup” listed the number or size of trade items and provided a total including GST of $1,161,882.19. A “Note” was included that “This ESTIMATE does NOT include any PC Items”. The parties anticipated the final cost could be greater than the estimate, after PC items had been included. There was no reference in the estimate to any builder’s fee or margin.

17. By 21 June 2022, Fraser Lyne had applied for and obtained insurance from iCare, which specified a contract amount of $988,370. It is unclear where that figure came from.

18. On 6 July 2022, the parties signed the contract, which included the following features:

1. The identified lending body was St George Bank. I accept Dr Waba’s evidence that he had informed Mr Lyne that he had borrowing capacity up to $1,500,000. This is consistent with later text messages discussed below.

2. There was a “builders fee” of 20% of the cost of the building works. This was in addition to the builder being entitled to charge an hourly rate for work and supervision.

3. The description of the contract building work was:

Brand New Build to lock up – No PC Items included … The building works are described in detail in the plans and specifications.

4. There was no dispute that the “plans and specifications” were those in schedule 6 entitled “Other Contract Documents”, which included:

1. the plans approved by council in March 2022;

2. Fraser Lyne’s standard terms and conditions; and

3. Fraser Lyne’s “estimate details”, which was the estimate of approximately $1.1 million.

19. At that time, Dr Waba, through Mr Cheng, was seeking to provide St George Bank with the necessary documentation to finalise Dr Waba’s construction loan. Fraser Lyne never provided Dr Waba with any payment schedules, despite being aware that they were a requirement for the construction funding.

20. At some point around then, Dr Waba raised concerns about the building site being flood prone and susceptible to termite damage. Through conversations with Mr Lyne and inspecting a property being built next door, Dr Waba informed Mr Lyne that he wanted concrete slabs in the building, not timber.

21. In discussion with Mr Lyne, Dr Waba instructed his architects to amend the approved drawings to include concrete slabs, rather than timber joists and piers, and a basement underground. At no time did Mr Lyne raise a concern that altered plans would have an impact on the signed contract, or require a variation of that contract.

22. In November 2022, Dr Waba approached Westpac to fund the construction costs, rather than St George Bank. Mr Cheng again agitated for payment schedules required by the bank, which Fraser Lyne never provided.

23. On 21 November 2022, Mr Lyne sent an email to Mr Cheng, copying in Dr Waba, including:

Please note this is NOT a variation to the signed contract dated 6/7/22 …

I have sent all relative [sic] information to all sub contractors. They have all said the following that they will not quote but will estimate as the market is to[o] volatile a[t] the moment … I will obviously have to wait for their pricing to come back to you with my pricing if this is what the bank wants …

… I am currently in the process of re pricing the job again and I am slowly reviving pricing back from trades …

24. Later that day Mr Cheng responded:

… I believe we [are] only missing the schedule of payments. …

I know the specification wasn’t completed back to July, however Dr Waba was agreed with using basic products and upgrade later, the total construction cost submitted to the bank to be capped @ $1.5 million. …

Dr Waba will manage to pay for the first 2 stages of approximately $450k, being 30% of $1.5 million from his own money, the rest will be fund[ed] by the bank. I do need a schedule of payments to be draft[ed] by you…

25. Despite Mr Lyne’s assertion that no trades would provide quotes, over the next few weeks Fraser Lyne received some trade quotes for various components of the planned building. Fraser Lyne did not provide those quotes to Dr Waba, nor did he tell him they had been received.

26. On 22 November 2022, the council approved the amended drawings.

27. On 2 December 2022, Mr Lyne claimed that it was not possible to provide the schedule of payments as requested by Dr Waba’s bank. This appears contrary to a letter of advice Mr Lyne had received from the executive director of HIA. (That letter also referred to the Home Building Act 1989 (NSW), however, I do not consider submissions made about that Act relevant to the dispute.)

28. On 3 December 2022, Mr Lyne again emailed Mr Cheng and asserted that a payment schedule could only be provided under a fixed price contract. In that detailed email he referenced the terms of the July 2022 contract, and queried whether it would be possible to cancel the insurance issued pursuant to the July 2022 contract, and to start again, presumably with a fixed price contract. He also stressed that “Dr Waba was happy with the contract he had [two] months to review it and then we had to get it signed asap … We are committed to the current situation.” This email demonstrated that when challenged, Mr Lyne was prepared to assert his contractual rights as he understood them in a forthright way.

29. Also in that email, Mr Lyne stated that he had “all the plans out for costings at the moment … [if] they wont be back in this year then I have to put it all together and no one will ‘quote’ on a job this size”. However, Mr Lyne conceded in cross-examination that it was untrue that no one would quote on the job and in fact he had “received some quotes, yes”.

30. On 5 January 2023, Dr Waba met with Mr Lyne. On the same day, Dr Waba and Mr Lyne exchanged text messages that included:

Waba: Thanks for your time mate, really appreciated.

Recap of important points:

1. Quote basic price at $1,25 million + $250k buffer.

2. Draft progress payment based on estimate prices.

3. Any additional cost outside estimates in progress payment will be co funded by owner through the bank.

4. Please refer to progress payment example in the email and draft yours. Its [sic] just a guide.

31. In response to the above message, Mr Lyne responded “Thanks mate, I will send an email over this [afternoon] if that’s ok”. Mr Lyne did not challenge Dr Waba’s request for a “quote”. There is no email in evidence sent by Mr Lyne that afternoon or shortly thereafter.

32. Mr Lyne’s evidence was that he understood from this text message and conversations that Dr Waba wanted both:

1. an almost accurate estimate for himself of the likely costs; and

2. a progress payment schedule for the bank that was based on the cap of $1.5 million.

33. I do not accept Mr Lyne’s evidence because it is inconsistent with Dr Waba’s message seeking a “quote” of $1.5 million, and Mr Cheng’s earlier email indicating a $1.5 million dollar cap and request for a payment schedule. Further, if that had been Mr Lyne’s understanding at the time, it is unclear why he did not provide a progress payment schedule.

34. In this context, I also have concerns about the reliability of a document created by Mr Lyne entitled “Meeting Minutes 5 January 2023”. The document appears to have been created using a template or software system, as it is in similar form to other Fraser Lyne meeting minutes, and it bears a reference number MET0030. That document is dated 9 August 2023. That significant inconsistency between the document’s date and the meeting date was not explained by Mr Lyne in his affidavit evidence or in cross-examination. Fraser Lyne did not provide a copy of the email sending the minutes to Dr Waba to more clearly demonstrate that it was in existence before August 2023. Further, all other versions of similar meeting minutes in evidence had corresponding dates and no anomaly, which suggests the automatically generated date was more accurate than the date manually inserted in the document heading.

35. The minutes document includes:

1. Quoting house changing over to estimating as close as possible.

Conclusion: Went through details about if quoting this house, the price allowances that need to be made to allow for the price changes sometimes monthly would have been very high, along with the fact that none of the trades will quote anything this size in this current market so far out from when their part of the job is ready to be build being anywhere from 4 months to 15 months away.

2. Estimates for costings by trade for contract build of house

Conclusion: Fraser Lyne … to provide as accurate estimate as possible for each trade, by each trade, as trades are not quoting on a job this size so far out, and if the price goes over by the time their section is ready to be built the remainder is to be topped up by Dr ... Waba through the bank

36. There are important features of this document:

1. It repeats the assertion that trades would not quote, despite Mr Lyne both actively seeking them and receiving them around that time, and Mr Lyne accepting that fact was untrue. He did not explain why he made that incorrect statement in his minutes.

2. It refers to a change from a “quote” to an estimate. However, Dr Waba’s 5 January 2023 message clearly sought a “quote”. Mr Lyne understood the bank could be satisfied for funding, if there was a quote. That is also consistent with Mr Lyne providing Dr Waba a document styled “quotation” in February 2023, discussed further below.

3. Further, the reference to changing from a quote to an estimate makes little sense, in circumstances where Fraser Lyne’s case was always that no fixed price could be given. This statement together with the unexplained August 2023 date leads me to conclude that the document was a re-creation after the event to assist Fraser Lyne, because all the other documentary evidence at the time indicated the parties were discussing a quote.

37. As he had indicated to Mr Cheng in his December 2022 email, during January 2023, Mr Lyne was in the process of obtaining quotes from trades for the November 2022 approved plans. Those quotes would be necessary for Fraser Lyne to provide Dr Waba with a quote, as requested.

38. In February 2023, Mr Lyne did provide Dr Waba with a document entitled “Proposal” and “Quote valid for 30 days” which was dated 16 February 2023. That document was described as an “estimate [of $3,167,606.42, including GST, but not builder’s margin] … based on the plans and documents provided”. It was said to “represent a ballpark figure only”.

39. Further, the document attached Fraser Lyne’s standard terms and conditions.

40. There was some debate about when that document was created and when it was provided to Dr Waba. Mr Lyne’s affidavit evidence was that he talked through the document with Dr Waba on 7 February 2023, which he had sent to Dr Waba on 6 February 2023. However, he did not put that email into evidence. Dr Waba agreed with the date of the meeting being 7 February 2023. Oddly, Mr Lyne’s evidence was that the correct date of the document was 6 February 2023, and “not 18 May 2023”, even though there is no document in evidence with that May date. Fraser Lyne did not rely on any documentary record or minutes of meeting to assist with accurate dating of the document. I consider it more likely that the document was created through a software system on the date it bears, which is 16 February 2023, and it was discussed by Mr Lyne and Dr Waba around then. That also makes sense in circumstances where even the week before 16 February, Mr Lyne was obtaining quotes from trades, which would likely have been used to create the document.

41. I do not accept that I should infer that the document was created on 6 February 2023. Mr Lyne said on 7 February 2023 he suggested to Dr Waba the possibility of reducing the price down to $2,500,000, and for that reason he was seeking quotes in the week thereafter to achieve that outcome. However, none of the emails Mr Lyne sent to trades in the week before 16 February 2023 indicated that he was looking for a lower price. Instead, it appeared in one email to an electrician that Mr Lyne was seeking a first quotes for Dr Waba’s job and another new job. The emails include no text indicating what was being sought from the recipient trades, including for example, a quote or an estimate. Further, the emails to trades somewhat confusingly attached different drawings, namely either “Rev N” or “Rev R”. However, if Mr Lyne’s estimate was created on 16 February 2023, then it would seem likely he included the quotes he had been seeking up to that date in his estimate.

Agreement to terminate

42. For the following reasons, I accept that the parties agreed to terminate the signed July 2022 contract on the basis that Dr Waba paid Fraser Lyne its reasonable costs incurred in progressing the contract as evidenced in Fraser Lyne’s invoice on 28 April 2023, explained below.

43. Where the parties to an agreement have “conducted themselves as to abandon or abrogate the contract”, that agreement is no longer on foot: DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 434 (Stephen, Mason and Jacobs JJ, Aickin J agreeing).

44. After Dr Waba received the February 2023 “quotation”, I accept his evidence that he immediately told Mr Lyne that he could not proceed with the construction of the November 2022 plans based on that price. I accept he had always provided a clear indication through Mr Cheng and in conversations that he only had sufficient funding for $1,500,000, and personal savings of up to $500,000.

45. I accept that because Dr Waba could not afford to proceed with Fraser Lyne’s quotation, he discussed with Mr Lyne formally terminating any contract they had on foot to obtain the release of the insurance, which would benefit Fraser Lyne. At no point did Mr Lyne assert orally or in writing with Dr Waba that he was not entitled to terminate the contract or would be liable for damages if he did. Neither did Mr Lyne express any frustration or annoyance, or communicate in any way other than co-operatively concerning the end of their working relationship. This is in contrast to his detailed explanation of the contract to Mr Cheng in December 2022, detailed above.

42. I accept and prefer Dr Waba’s affidavit and oral evidence about conversations in early 2023, that the men agreed to terminate the July 2022 contract:

Waba: Do not hold on to the project, continue with the other jobs that you are currently doing. Don’t factor in my project because it will not be happening.

Lyne: Should I shred the document?

Waba: Yes, you should shred the contract because it will not be happening.

…

Lyne: I am okay with the cancellation of the contract. I will shred the contract. I have incurred some costs, and we will need to sit down and sort it out.

Waba: It’s okay, no problem.

47. Dr Waba's evidence was honest and consistent with the documentation. Fraser Lyne's counsel did not suggest that Dr Waba was anything other than an honest witness, and I consider he was. Therefore, I do not accept Mr Lyne’s evidence to the contrary. I consider Mr Lyne's evidence was unpersuasive in the ways identified above.

48. Further, the parties’ conduct was more consistent with an agreement to terminate. Mr Lyne behaved as if he had agreed to end the previous contract. For example, Mr Lyne communicated about cancelling the Home Owner Warranty Insurance and obtaining a refund:

1. Mr Lyne had written to his insurance broker, who responded to him on 6 March 2023, “We are sorry to he[ar] about the site not going ahead. Thank you for your inquiry regarding Cancellation of the project …”. Mr Lyne’s suggestion in cross-examination that he was only seeking to obtain information about cancelling the insurance is inconsistent with a fair reading of that email. It is also inconsistent with Mr Lyne’s text message to Dr Waba on 8 March 2023, in which he stated “I am trying to cancel insurance”. Mr Lyne did not put into evidence his email to his insurance broker with the details of his request to “cancel”; it may not have assisted him.

2. Further, on 8 March 2023 Mr Lyne sent a message to Dr Waba stating:

The insurance company needs a letter from [council dealing with construction certificate] indicating that they will shred the document … then I will [ask] you to sign some documents too then we will need to get a lawyer to cancel your contract.

3. Apparently in compliance with that request for a lawyer’s letter, on 22 March 2023, Dr Waba’s solicitor sent Fraser Lyne a very short email stating that Dr Waba “does not wish to proceed with the Contract dated 6 July 2022 especially in light of the new amended quotation provided by you”. Mr Lyne accepted in cross-examination that “if we were to exit out of the insurance, we needed, yeah, legal”. He provided no explanation as to why it would otherwise have been necessary to receive a lawyer’s letter.

49. It was only after that time, it appears Fraser Lyne obtained legal advice and sought to enforce the $3 million plus “quotation” or estimate, and demanded compliance with terms of the July 2022 contract concerning funding of the larger costings.

50. Fraser Lyne also issued an invoice to Dr Waba on 28 April 2023 for $8,250.00 for 75 hours at the contractual hourly rate of $100.00 (excluding GST) for Mr Lyne’s time in attending meetings. I consider this invoice is equivocal evidence for either party; while it may have evidenced an intention to affirm the contract, it may also indicate compliance with the agreement to terminate alleged by Dr Waba, which required that he pay for Fraser Lyne’s wasted expenses.

51. It was not made clear how the February 2023 estimate was enforceable as part of the July 2022 contract. The contract specified the works to be completed were the approved March 2022 plans. The February 2023 estimate did not relate to those earlier plans, but rather the November 2022 approved plans.

52. Mr Lyne had stated that the November 2022 plans did not amount to a variation under the July 2022 contract. Perhaps for that reason, the contractual clause 17 process for a variation was not invoked. That process required variations to be in writing and signed by the builder and the owner. Where the owner sought a variation, the builder was to reply with a signed written offer to carry out the variation, which had to be accepted by the owner within 5 working days. None of that occurred.

53. Instead, I consider the parties had abandoned the contract and were in the process of working out a new contract for the newer plans. The process they were following was the same as for the formation of the July 2022 contract:

1. First, the plans were approved by council in late November 2022.

2. Then, in early January 2023, Dr Waba sought a “quote” for the new plans to be built.

3. Then, Fraser Lyne provided an estimate and contract terms. I note that Mr Lyne’s evidence was that he provided a hard copy of the February 2023 estimate to Dr Waba and discussed it. Had the July 2022 contract been on foot, then there would have been no reason for Mr Lyne to attach his standard terms and conditions to the quotation, as they were the same as those in the July 2022 contract. While Mr Lyne produced the estimate with software which he said automatically attached his terms and conditions, he could have removed them from the hard copy he provided Dr Waba, had they not been necessary because the July 2022 contract was still on foot.

54. What might then have occurred was the signing of a new contract, that specified the particular works to be built by reference to particular plans.

55. For completeness, I do not accept Fraser Lyne’s submission that Dr Waba must be held to his pleading that the July 2022 contract was terminated on 6 March 2023. Instead, as Fraser Lyne’s counsel appropriately conceded, it was necessary to consider all the words and conduct of the parties at the relevant time in order to determine if there was a contract or not and the terms of any such contract: see eg Long Spring Pty Ltd v RD Beechworth Pty Ltd [2025] NSWSC 437 at [34]-[36] (Peden J) and authorities referred to. I have considered those matters above.

56. In conclusion, I consider that the parties agreed to terminate the July 2022 contract, as evidenced by Dr Waba’s version of the conversations and the parties’ conduct. Dr Waba agreed to pay Fraser Lyne’s wasted expenditure under the contract, which was then sought in Fraser Lyne’s invoice for $8,250. Therefore, I do not accept that either party repudiated the contract.

Damages?

57. If the conclusion that the parties agreed to terminate the July 2022 contract is erroneous, then I accept that Dr Waba repudiated the contract by refusing to continue with it. Such repudiation was accepted by Fraser Lyne on 26 May 2023 by way of a letter from its legal representatives which demanded payment of $678,296.28 for, substantially, “[e]xpectation damages, being the amount of lost profit, which would have been made by [Fraser Lyne] under the Contract…”. The acceptance of Dr Waba’s repudiation terminated the contract, and Fraser Lyne would have been entitled to loss of bargain damages.

58. In order to prove the quantum of the damages, Fraser Lyne relied upon the expert opinion of a quantity surveyor, Mr Tobias Seeto. Mr Seeto’s opinion was that his “estimate” of the cost of carrying out the original March 2022 approved plans was $2,487,558.06 (including a 20% builder’s fee or margin of $376,902.74 plus GST). His opinion was that an “estimate” of the cost of carrying out the work for the approved November 2022 plans was $2,978,004.06 (including a 20% builder’s fee or margin of $451,212.74 plus GST).

59. Fraser Lyne claimed as loss of bargain damages the value of the lost builder’s fee or margin of 20%.

60. I do not consider I can place any reliance on Mr Seeto’s evidence for the following reasons.

61. First, his opinions are bald assertions. He provided no analysis of how he reached his conclusions as to the likely costs of the various building components. His report merely stated:

… my estimates below are derived from my experience and based on high level costs of similar projects I have worked on.

62. Mr Seeto provided no detail about what experience he was referring to, or why he considered other projects “similar” or worthy of comparison and in what ways. Nor did he identify when those other projects were carried out, in order to compare the relative costs at different times.

63. Further, Mr Seeto provided no indication of any reference material generally relied upon by quantity surveyors to form the basis of his calculations. For example, as Dr Waba’s counsel noted, Mr Seeto did not indicate that he relied on any industry standards such as the Rawlinsons Construction Cost Guide. Mr Seeto did not identify the square meterage of any component of the planned building, nor the quantity of materials necessary, nor how he had determined the relevant prices. Mr Seeto also identified a weakness in his own report, being that he had not been provided with construction drawings and was dependent upon the development application drawings only, which provided him with limited detail.

64. Secondly, Mr Seeto did not annex to his report any of the material with which he was briefed. He was unable to identify in the witness box the version of the document he referred to in his report as a Fraser Lyne “6 February 2023 estimate”. I accept that because Mr Seeto carried out his own estimates, and did not rely on Fraser Lyne’s estimate, it may not matter which version he had seen. However, the lack of precision does not instil confidence. More serious is the fact that Mr Seeto did not identify with clarity which approved plans he had used in making his estimates. There were various versions in the court book, and various versions including incomplete versions of the 6 July 2022 contract. More precision would be expected for something essential to the reliability of the evidence.

65. Thirdly, Mr Seeto provided his estimates based on “high level costs” and also a “high standard or specification of finish fit out”, without identifying what those phrases meant and what other standards might have been used and how they might have affected his estimates. Dr Waba’s unchallenged evidence was that he wanted to “go with basic [fittings] … if I need to upgrade it along the line, then I will do that”. In an attempt to deal with this inconsistency between the evidence and the assumption provided to Mr Seeto, counsel for Fraser Lyne suggested that when assessing the appropriate damages, I could exclude all line items that concern “PC items”. However, even if that approach was adopted, Mr Seeto had not made it clear what “high level costs” were and whether they were incorporated into all parts of the estimates, even those beyond “fit out” or PC items.

66. On the contingency that I did not accept Mr Seeto’s evidence, in closing oral submissions, counsel for Fraser Lyne suggested that I could have regard to Fraser Lyne’s estimate provided before entry into the 6 July 2022 contract and listed as a contractual document. However, I do not accept that estimate ought to be taken as reliable evidence of the likely cost of construction in order to assist Fraser Lyne with its damages claim. Mr Lyne consistently resisted a fixed price contract, and Fraser Lyne’s counsel indicated that prices could go up or down with a costs plus contract.

67. Further, I do not accept that Mr Lyne is an expert quantity surveyor, nor does he give any evidence that he had given similar estimates in the past, despite having been in the building industry since 2007 when he started as an apprentice. As with Mr Seeto, he did not indicate what objective criteria he had used to create his estimate. In cross-examination, Mr Lyne accepted that “We knew the – the base rate, but we didn’t have final specifications”. Further, as noted above when he sought trade quotes, Mr Lyne had provided various versions of the plans, and it is not evident which plans he used in creating his own estimate. I do not consider that he regarded the estimate to be accurate, and nor do I.

68. It was always incumbent on Fraser Lyne to prove its case, including as to the quantum of damages. That must have been appreciated, as the report of Mr Seeto was served. A distinction may be drawn between “a case where a plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence”: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10 at [38] (Placer) (Hayne J, Gleeson CJ, McHugh and Kirby JJ agreeing).

69. The present case does not fall into the former category, where “guesswork may be necessary in assessing the damages to be allowed”: Placer at [38]. Instead, for the reasons above, it falls into the latter category: damages are susceptible of evidentiary proof, but the plaintiff has not adduced precise evidence of the loss suffered.

70. In such a situation, “[j]ustice does not dictate that … a figure should be plucked out of the air”: Troulis v Vamvoukakis [1998] NSWCA 237 at 14 (Gleeson CJ, Mason P and Stein JA agreeing). Rather, where “the evidence called by the plaintiff fails to provide any rational foundation for a proper estimate of damages the court should simply decline to make one”: Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 (Schindler) at 319 (Pincus J); see also discussion in McCrohon v Harith [2010] NSWCA 67 at [118]-[128] (McColl JA, Campbell JA and Handley AJA agreeing) and especially [120]-[122] (noting the approval of the proposition from Schindler).

Orders

71. For these reasons, the Court makes the following orders:

1. Defendant pay the plaintiff $8,250 (inclusive of GST).

2. Plaintiff’s summons otherwise dismissed.

3. Plaintiff to pay the defendant’s costs as agreed or assessed.

4. Grant liberty to the parties to apply for an alternative costs order within seven days of today's date, setting out the application and any evidence and submissions of no more than 3 pages upon which they rely.

5. Should such an application be made for an alternative costs order, the responding party is to provide evidence and submissions of no more than 3 pages opposing any alternative costs order within 7 days of receiving the first application.

6. The Court will determine any such alternative costs application on the papers, if appropriate.

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Decision last updated: 18 June 2025