Geneville Constructions Pty Ltd v Leslight (No 2) - [2019] NSWDC 172

District Court

New South Wales

Medium Neutral Citation: Geneville Constructions Pty Ltd v Leslight (No 2) [2019] NSWDC 172
Hearing dates: 27 November 2017 – 30 November 2017; 9 April 2018 – 13 April 2018; 21 May 2018 - 23 May 2018; 30 November 2018 (adoption of referee report hearing); 20 February 2019 (written submissions); 13 and 18 March 2019 (written submissions); 27 March 2019 (written submissions); 11 April 2019 (oral submissions)
Date of orders: 09 May 2019
Decision date: 09 May 2019
Jurisdiction: Civil
Before: Dicker SC DCJ
Decision:
(1) Judgment for the plaintiff in the Statement of Claim proceedings.
(2) The Cross-Claim is dismissed;
(3) The defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed;
(4) Liberty to the parties to apply within 21 days for a variation of the order in (3) above;
(5) The parties are to bring in agreed Short Minutes of Order reflecting these reasons and including any claim for interest within 14 days;
(6) The exhibits are to be retained for a period of three months.

Catchwords: Building and construction - absence of a formal detailed written contract between the parties – terms of alleged contract – extensive factual dispute between main witnesses on numerous issues - entitlement of plaintiff to recover under alleged contract - alternative claim for quantum meruit - extent of any entitlement of plaintiff to recover compensation - claim by the defendant client for damages for alleged defects, delays and other losses
Legislation Cited: Evidence Act 1995 (NSW), section 161
Home Building Act 1989 (NSW), sections 7, 7A and 10
Uniform Civil Procedure Rules 2005
Cases Cited: Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153
Croucher v Cachia [2016] NSWCA 132
Cubillo v Commonwealth (No 2) [2000] FCA 1084; (2000) 103 FCR 1 at [18]-[123]
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Geneville Constructions Pty Ltd v Leslight [2018] NSWDC 384
Hadley v Baxendale (1854) 156 ER 145
Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269
Kriketos v Livschitz [2009] NSWCA 96
Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa [2007] NSWSC 228
Lumbers v W Cook Builders Pty Ltd (in liquidation) (2008) 232 CLR 635; [2008] HCA 27
New South Wales Housing Authority v Diab [2015] NSWCA 133
Nichols v Earth Spirit Home Pty Ltd [2015] QCA 219
O’Connor v Leaw Pty Ltd (1997) 42 NSWLR 285
Pavey & Matthews v Paul (1987) 162 CLR 221; [1987] HCA 5
Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Proprietors of Strata Scheme 3618 v Costin Roe Consulting [2010] NSWSC 1049
Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141
Statewide Developments Pty Ltd v Higgins [2011] NSWCA 35
The Owners Strata Plan No 57164 v Yau [2017] NSWCA 341
Vimblue Pty Ltd Toweel trading as Carpenters Core Building [2009] NSWSC 494
Category: Principal judgment
Parties: Geneville Constructions Pty Ltd (Plaintiff)
Brett Barry Leslight (Defendant)
Representation:
Counsel:
J Manner (Plaintiff)
J A Darvall (Defendant)
Solicitors:
Usher Levi (Plaintiff)
Paul Mattick & Associates (Defendant)

File Number(s): 2015/00288845

table of contents

The pleadings
Amended Statement of Claim - paragraph 6
Defence - paragraph 12
Cross-Claim - paragraph 16
Defence to Cross-Claim - paragraph 21

Background facts - paragraph 23
Summary of the evidence relied upon - paragraph 59
Evidence for the plaintiff - paragraph 61
Evidence of Mr Gene Phillips - paragraph 62
Evidence of Ms P Phillips - paragraph 168

Evidence for the defendant
Evidence of Mr Brett Barry Leslight - paragraph 174

Credibility of Mr Phillips and Mr Leslight - paragraph 329
Evidence of Mr Barry Fred Leslight - paragraph 343
Evidence of Mrs R Leslight - paragraph 361

The submissions of the parties - paragraph 374
Findings of fact - paragraph 378
The expert evidence - paragraph 379
Referral out of a number of expert issues - paragraph 384
Alleged Defects pleaded in the Cross-Claim - paragraph 388
The method of excavation and other alleged delays - paragraph 392
Quantum meruit - paragraph 396

Consideration
The contract between the parties - paragraph 400
Breach of Contract - paragraph 411
Was the contract unenforceable? - paragraph 419

Quantum Meruit - paragraph 436
The Cross-Claim - paragraph 460
The unnecessary works claim - paragraph 463
Works not carried out in accordance with drawings - paragraph 467
Poor workmanship to rear pool slab - paragraph 470
The over excavation claim - paragraph 473
The delay claim - paragraph 480
Determination - paragraph 499

Judgment

This action relates to a claim by the plaintiff building company for moneys allegedly owing to it by the defendant in relation to construction work allegedly performed by the plaintiff and sub-contractors retained by it at a duplex development at Sandridge Street, Bondi in Sydney in the State of New South Wales. The plaintiff claims that a contract was entered into between it and the proprietor of the land, the defendant Mr Brett Barry Leslight, for the plaintiff to perform construction and related work at the site. The plaintiff sues:

In contract; and

In the alternative, in quantum meruit.

There was no formal written contract between the plaintiff and the defendant. The plaintiff claims that the contract was partly oral and partly in writing. The proceedings raise issues in relation to s 7 and s 10 of the Home Building Act 1989 (NSW) (“the Act").
The defendant denies liability and says that he has paid all invoices forwarded to him during the construction phase. The defendant also brings a Cross-Claim against the plaintiff. This claim includes claims for additional finance costs, loss of expected rents and additional accommodation costs said to be due to delays in work caused by the plaintiff. There is also a claim in relation to alleged poor workmanship concerning the construction work which has been completed by the plaintiff.
The plaintiff, which is a construction company of which Mr Gene John Phillips is the director and a licensed builder, denies the claims in the Cross-Claim.
Accordingly, the Court must determine:

What was the agreement made between the parties;

Whether there was a valid contract between the plaintiff and the defendant;

In the alternative, the reasonable value of the work performed by the plaintiff on a quantum meruit basis; and

Whether there is any substance in the Cross-Claim brought by the defendant.

The pleadings

Amended Statement of Claim

The plaintiff has filed an Amended Statement of Claim on 19 April 2017.
The plaintiff pleads that the defendant is and was at all material times the registered owner of the land in Sandridge Street, Bondi (“the Property”), the subject of the proceedings.
The plaintiff pleads its case in two causes of action. First, the plaintiff pleads that on or about 20 March 2012, the plaintiff and the defendant entered into a contract whereby the defendant requested and directed the plaintiff to carry out works and services in connection with the construction of a residential development comprising two multi-level dwellings on the Property. The agreement was said to be partly oral and partly in writing and was made during a telephone conversation between Mr Phillips and the defendant on 20 March 2012.
The terms of the agreement allegedly include that the plaintiff would carry out works and services in accordance with the specifications and drawings provided by the defendant to it from time to time and any request or direction from the defendant with regard to the overall look and specifications of the project. It is pleaded that the defendant would pay the plaintiff on a “cost plus basis” for the works with the agreed percentage profit being 15%. Further terms are pleaded including that the defendant would pay progress claims within seven days of receiving the progress claims and also would pay the plaintiff interest on any overdue amounts at the rate of 20% per annum to cover the plaintiff’s financing costs.
It is pleaded that pursuant to the agreement, the plaintiff carried out work and provided services in accordance with the specifications and drawings from 20 March 2012 to 19 March 2014. It is pleaded that progress claims for the work totalling $548,198.44 were made and the plaintiff has only received part payment for the work from the defendant in the amount of $219,064.15. It is pleaded that in breach of the agreement, the defendant has failed to pay the balance and, as a result, the agreement was terminated by the plaintiff on or about 19 March 2014 because of the defendant’s breach which included physically locking out the plaintiff from the Property.
In the alternative, the plaintiff makes a claim in quantum meruit relying on expert reports assessing the reasonable value of the work provided by the plaintiff. It is pleaded that the defendant has obtained the benefit of the work requested and has been unjustly enriched at the expense of the plaintiff by not paying for the value of the work.

Defence

The defendant filed a Defence to the Amended Statement of Claim on 4 May 2017. The defendant in essence pleads that the agreement between the parties was far more limited than that pleaded by the plaintiff and that the agreement was wholly oral. In relation to the work agreed, the defendant pleads that it was agreed that he would pay the reasonable cost of the works properly undertaken including a charge of 15% for project management services. It is accepted that it was agreed that the plaintiff would make regular progress claims for work and services provided the claims were within those agreed and that the defendant would pay them within seven days. In cross-examination, the defendant Mr Leslight gave evidence that a number of these concessions in relation to terms agreed in the Defence were “inaccurate”. No application was made at any stage following this evidence by the defendant to file an Amended Defence.
The defendant says that the works and services were provided by the plaintiff at the Property between 17 October 2012 and 5 October 2013, a period much shorter than that relied on by the plaintiff. It is said that the plaintiff provided a further estimate for works of $3,904,519.41 in September 2013 and the quotation was not accepted by the defendant and the plaintiff was not engaged to undertake further work or services.
The defendant also relies on ss 7 and 10 of the Act and asserts that the plaintiff failed to provide and obtain a contract in writing for the services and works it intended to provide. Accordingly, the plaintiff was not entitled to damages or to enforce any other remedy in respect of any alleged breach of the contract committed by the defendant and the contract is unenforceable.
In relation to the quantum meruit claim, the defendant does not admit the allegations and pleads a set-off in relation to its Cross-Claim.

Cross-Claim

The defendant filed a Statement of Cross-Claim on 3 May 2017.
Under the Cross-Claim, the defendant pleads that certain representations were made by Mr Phillips on behalf of the plaintiff to him and that it was on the basis of those representations that the oral agreement was made to retain the services of the plaintiff “for supervision, project management and other building services”.
It is alleged in the Cross-Claim that certain work and site supervision and project management of the site excavation was not provided by the plaintiff in a proper and workmanlike manner, resulting in unnecessary excavation and unnecessary works causing loss to the defendant. These works included unnecessary excavation, the unnecessary installation of concrete piers and the unnecessary installation of starter bars to reinforced concrete fittings.
A claim is also made by the defendant for delay by the plaintiff in failing to undertake the performance of its services and those of the trades which it supervised in a prompt and timely manner. Claims are made for finance costs, loss of expected rents and additional accommodation costs totalling $372,721.
The defendant also pleads poor workmanship in relation to a concrete slab which was alleged not to have been poured to the correct or consistent level.

Defence to Cross-Claim

A Defence was filed to the Cross-Claim on 19 May 2017. In essence, the claims in the Cross-Claim are denied. It is further pleaded:

That the excavation was not over-excavated;

The piers were constructed at the request and direction of the defendant and his engineer and to allow for a storage area under the pool deck; and

The starter bars were installed in accordance with engineering drawings or, if not, in a location appropriate and approved by the defendant.

The delays are rejected by the plaintiff as pleaded. It pleads that no previous complaint had been made in relation to the alleged delays until the Cross-Claim was filed. It is pleaded that since 3 December 2013, the plaintiff has been locked out of the site and has had no reasonable opportunity to remedy any alleged delay or any alleged faulty workmanship.

Background facts

The background facts in relation to this matter are fairly complex and it is necessary to set them out in a summary form to assist in understanding the issues between the parties. The matters which I refer to below are my findings of fact, unless I indicate to the contrary.
The plaintiff Geneville, is a corporation involved in the construction of residential dwellings including the provision of project management.
Mr Phillips is the director and principal officer of the plaintiff and is a licensed builder of substantial experience.
The defendant, Mr Leslight, is the General Manager of a motor repair business which is owned by his parents through a company.
In late 2009 and early 2010, the plaintiff was engaged, according to Mr Phillips, to undertake minor construction works at a workshop apparently owned by the defendant's parents. This was the means by which the defendant and Mr Phillips came to know each other. Mr Leslight places this engagement in time to about July 2009 but nothing turns on this difference of evidence.
The defendant Mr Leslight was the registered proprietor of the Property in Sandridge Street, Bondi. He proposed to demolish the existing structure on that Property and to build two duplex homes. Discussions occurred between Mr Leslight and Mr Phillips in relation to whether Mr Phillips wanted to enter into a joint venture with Mr Leslight to develop the project. Mr Phillips said he was not able to become involved in the project on that basis. In cross-examination, Mr Phillips said this was because he was busy with his business work. However, an email dated 1 February 2010 from Mr Phillips to Mr Leslight suggests that at least one significant reason for the lack of interest of Mr Phillips in the proposed venture was that the bank would not lend him the money to get into the proposal.
On 30 March 2010, Mr Phillips met with Mr Leslight as a result of a request by Mr Leslight, to discuss works that Mr Leslight wished to have carried out at the Sandridge Street, Bondi site (“Site"). Mr Phillips states that he recalls that the meeting lasted approximately two hours and during the meeting, Mr Leslight described to him in general terms the works that he wanted carried out including the types of materials and the standards of finishes that he wanted to be used in the construction. Mr Phillips claims that he stated to Mr Leslight that based on the standard of finishes he wanted to achieve, the construction costs for the project would be in the range of $3,500-$5,000 per square metre. Mr Leslight says he does not recall this meeting but it is confirmed by a job diary which Mr Phillips prepared. Although there was an attack on Mr Phillips by counsel for the defendant on the basis that the job diary may have been prepared by him later, I accept Mr Phillips’ evidence that the diary was prepared at or shortly after the time of the entries. The level of detail in it is unlikely to have been prepared after the event. Mr Leslight also could not dispute numerous entries in the diary when he was taken to them. Accordingly, I find that the meeting occurred on 30 March 2010.
Over the next year or so, there were numerous meetings between Mr Phillips and Mr Leslight in relation to the project at which various costings and the works proposed were discussed. These are reflected in the job diary maintained by Mr Phillips.
In the period between February and May 2011, Mr Leslight forwarded to Mr Phillips various drawings, diagrams, photograph compilations and model plans of the proposed building to be constructed on the Site.
On 28 September 2011, there was a meeting between Mr Phillips and Mr Leslight to discuss the proposed building work and the costs. The various options as to construction were also discussed. Mr Phillips claims that there was a further discussion in relation to a price estimate and a conversation occurred in which he informed Mr Leslight that the building costs would be around $3,500-$5,000 per square metre and that Mr Leslight agreed with this. However, Mr Phillips claims that Mr Leslight told him that he needed Mr Phillips to create a “low-budget” estimate of approximately $900,000 per townhouse in order to keep council fees to be paid by him to a minimum. Mr Phillips claims that he said he would not be comfortable with adjusting an estimate to minimise council fees but also said he would be able to prepare an estimate based on “a very low standard of finish.” Mr Leslight denies that conversation. Mr Leslight concedes that Mr Phillips provided him with the cost estimate of $3,500-$4,500 per square metre but says it was provided on 4 December 2011. Mr Leslight claims that he told Mr Phillips that his bank had approved a construction budget of around $900,000 per unit and that they were constrained to work within that budget. Mr Phillips denied that any such conversation occurred.
On 4 December 2011, Mr Phillips sent an email to Mr Leslight attaching a document entitled “preliminary estimate” for the works at the Site. The email included:

“I have attached an estimate based on the figures of around $900,000 per property as requested
Please let me know if this is OK.
I think for a high-quality finish & fixtures you will be looking at $3500-$4500 per sqm, but we will have to get various quotes to ensure we have an accurate budget.”

Mr Phillips states in his affidavit that when he prepared the preliminary estimate, he used very low per square metre rates which he regarded as being unrealistic if high quality finishes and materials were to be used in the construction but had done this at Mr Leslight's request for the Council. Mr Phillips says that he believed a more realistic figure for high quality finishes’ materials would be in the range of $3,500-$5,000 per square metre. Mr Leslight states that on a number of occasions he told Mr Phillips that his bank had assessed the construction cost and approved a budget of around $900,000 per unit and he relied on Mr Phillips to work within the budget. He denies any conversations about preparing a “low estimate” for the purposes of limiting s 96 contributions to the Council.
There is an email chain including an email dated 16 January 2012 in which Mr Leslight asks Mr Phillips in relation to an examination of the project by a quantity surveyor suggested by Mr Phillips: “Will he stick to the original guided pricing of $912,000”. In a later email sent on 16 January 2012 at 4.43pm, Mr Leslight states:

“I need to stick to that figure as this is all the council want to substantiate. As you are aware the section 96 contribution is 1% of the build cost. If he goes over we have to pay more. Do you have a good working relationship with this guy so we can stick to that figure.”

In my view, which I set out in further detail below, the email correspondence referred to is evidence which is consistent with the evidence of Mr Phillips on this issue. I prefer Mr Phillips’ evidence. It seems logical that the defendant would wish to limit the s 96 contributions to council to which he was exposed and provide a lower estimate for that purpose. However, the objective evidence is that a higher square metre estimate was provided by Mr Phillips which was accepted by Mr Leslight. The wording of the 16 January 2012 emails in my view confirms Mr Phillips’ evidence. I do not accept Mr Leslight’s evidence that he told Mr Phillips that the bank was only allowing around $912,000 for each townhouse. I accept Mr Phillips’ evidence that he would have walked away from the project if he had been told this by Mr Leslight.

The evidence establishes that a very important conversation occurred on or about 20 March 2012 between Mr Leslight and Mr Phillips in relation to advancing the project. This is not reflected in the job diary prepared by Mr Phillips.
Email correspondence from Mr Phillips to Mr Leslight dated 20 March 2012 confirms that it was proposed that Mr Leslight be the owner builder and that there was to be a meeting to discuss further detail.
Mr Phillips claims that on 20 March 2012 he had a telephone conversation with Mr Leslight in which Mr Leslight said that he would like to hire the plaintiff as the builder on the site but also wanted to keep costs down. Mr Phillips claims that he said he would be happy to do the work and that the plaintiff could undertake the work on a cost-plus basis as had been done previously and Mr Leslight could pay the plaintiff for the work undertaken.
Mr Phillips claims that he told Mr Leslight that the margin as a builder would be 15% and would be applied to all supplies, equipment and labour that the plaintiff invoiced. Mr Phillips says he agreed that a margin would not have to be paid if Mr Leslight paid the contractors directly. Mr Phillips says that he told Mr Leslight that a deposit would be needed prior to mobilising on site and that Mr Leslight would need to commit to paying invoices within a week, to keep on top of payments and to pay interest on late payments of 20% to meet overdraft costs. Mr Phillips claims that Mr Leslight agreed to these terms. Mr Phillips states that a conversation occurred soon after this where Mr Leslight said that he wanted Mr Phillips to be flexible with arrangements and he wanted to pay suppliers and other contractors directly where possible to save paying the 15% mark up. Mr Phillips claims that he agreed on these terms on behalf of the plaintiff.
Mr Leslight denies Mr Phillips’ version of the conversation but accepts that a conversation occurred about the plaintiff providing project management. He says that there was no discussion about rates to be charged and no written agreement was entered into. Mr Leslight asserts that he had discussed with Mr Phillips that his services would be limited in time to the completion of excavation as he had indicated his concerns with unknown subsoil conditions. Mr Leslight claims that they agreed that upon completion of the excavation works, Geneville’s role would be reviewed. Mr Leslight denies that there was any mention of a deposit or interest on late payments. He also denies that there was any discussion about an “agreed percentage”.
The telephone discussion is alleged by the plaintiff in the proceedings as amounting to the contract between the parties.
Whilst Mr Leslight claims that there was no discussion in relation to a 15% builder’s margin or agreed percentage, it is noted that that percentage is included on the invoices forwarded thereafter by the plaintiff to the defendant. The conversation put forward by Mr Phillips does not involve any assertion of an agreement as to the rates of the various workers who would work on the project for the plaintiff. However, again, these rates are set out in virtually all of the invoices forwarded by the plaintiff to the defendant except for a few invoices including the last two invoices sent with the plaintiff’s solicitors’ demand. Mr Leslight claims that when he received the first invoice and noted the plaintiff included a 15% charge, he expressed dissatisfaction to Mr Phillips for not having discussed it with him (oral evidence in chief) but says that as the works “were at a delicate stage and beginning to progress” he said he paid the account to avoid delay.
Following the 20 March 2012 conversation, Mr Phillips claims that Mr Leslight provided to him a number of documents including the s 96 consent and plans for the building work, stormwater details and a sub-floor plan prepared by a firm of building designers and engineers.
Mr Phillips’ evidence is that from about August 2012, the plaintiff commenced work at the Site, starting with excavation work and site preparation. Mr Phillips states that he was present on Site for at least a portion of each day and that works were carried out by the plaintiff on Site. He said he was directly involved with arranging these works, undertaking the works personally in some instances and arranging suppliers to supply goods and services to enable the works to be carried out. He also states that he personally oversaw labourers on Site and signed off on their labour timesheets which were submitted to the plaintiff on a weekly basis. Mr Leslight says that he cannot confirm whether Mr Phillips was present on Site each day and that he visited the Site each day and he was often not there when he visited. He also says that he is unable to verify the accuracy of the timesheets.
Mr Phillips gives evidence that he maintained a detailed recording of the hours spent on the Site on the plaintiff’s MYOB accounting system, including for each labourer. He also states that he recorded notes in his job diary for work carried out on a particular day on the project and that he used the job diary to issue invoices to Mr Leslight in relation to the work carried out. Mr Leslight says he was not provided with a copy of the summary of labour hours from the MYOB system and is not able to acknowledge that the invoices and job diary accurately show the actual services provided by the plaintiff. However, he does not accept the accuracy of the invoices, which is an issue in the proceedings. Mr Phillips says that each line item of work described in the invoices forwarded to Mr Leslight was accurate and carried out on the date specified.
Mr Phillips says that during the course of the work, various changes were made to the budget. Mr Leslight denies that up to the stage of completion of the excavation, there were any changes. Mr Phillips says that from his review of the records, the plaintiff paid 181 individual supplier invoices for the project, copies of which he annexes to his affidavit. Mr Leslight states that he is not sure that all of the invoices relate to the project. This was the subject of cross-examination of Mr Phillips.
Mr Phillips claims that there was late payment by the defendant, Mr Leslight, of many of the plaintiff’s invoices. Mr Leslight says that he does not recall receiving some invoices.
Mr Leslight claims in the proceedings that there were some major defects in the works completed by the plaintiff and other works were not completed. He says he is not a professional in the area of construction and building and it was only when the building expert inspected the site that the major concerns with the work were brought to his attention. He says that the report from his expert was received after the plaintiff had left the site and previously he was pre-occupied with getting the dwellings constructed. He also says that the plaintiff had the opportunity to inspect the site up until October 2013 when it removed its equipment from the site.
The question whether there are defects and incomplete works at the Site is a significant one in the proceedings. Mr Phillips says that at no time during the completion of the works did Mr Leslight make any complaint of defective or incomplete works to him or to any other person to his knowledge and that various aspects of the work were inspected by Mr Leslight's engineer, namely JDT Designs, and all inspections were deemed satisfactory. He says that the first time he ever heard of any complaint relating to purported defective works or alleged delay was on or about 24 March 2016 upon reading a cross-application filed by Mr Leslight in the New South Wales Civil and Administrative Tribunal. He says he was never given an opportunity to inspect the Site prior to the works being “covered up” and as they are now covered up, they cannot be inspected satisfactorily without invasive investigations. He also states that the plaintiff was never given the opportunity to remedy any alleged defects.
This issue is the subject of differing expert opinions. The issue was considered by a Referee who examined the alleged defects claim and prepared a report. I will discuss this further below.
By the second part of 2013, issues began to emerge in relation to the construction works at the Site. Despite works apparently proceeding at the Site, Mr Leslight was in discussions with his financier to obtain further funds for the works. Mr Phillips claims that there were delays in Mr Leslight paying outstanding invoices and 11 October 2013 was the final day that the plaintiff actively worked at the Site because of what Mr Phillips says was Mr Leslight's continued non-payment and refusal to communicate with the plaintiff.
Mr Phillips says that in the period from 11 October 2013 he attempted to gain instructions from Mr Leslight and eventually a meeting occurred which is disputed. Mr Phillips says that from 11 October 2013 to 3 December 2013 the plaintiff continued works off Site and its tools and equipment were left on Site for further works to continue at a later stage once Mr Leslight had obtained funding and subsequently paid the amounts then owing to the plaintiff. Mr Phillips says that from 13 October 2013 he began moving his men and equipment off site and to clean up the Site and remove most of his tools and equipment from the Site. He says that he continued in his attempts to speak to Mr Leslight and on 3 December 2013 attended the Site and observed that the access code on the front gate lock had been changed and a new chain and lock had been installed across the front gate which prevented access to the Site. He said that he was not given any prior warning of this and his attempts to telephone Mr Leslight on a number of occasions were without success.
Mr Phillips says that he was told by a site contractor that another builder had taken over the Site. He said he was first made aware of this on 9 December 2013. When further attempts were made to communicate with Mr Leslight without success he contacted lawyers to make demand for the amounts allegedly owed to the plaintiff. Mr Phillips says that on 19 March 2014, he instructed the plaintiff's lawyers to issue a notice to Mr Leslight terminating the agreement on the basis of Mr Leslight’s substantial breaches in not paying the invoices or permitting access to the plaintiff to continue the works.
Mr Leslight disputes the invoices which were said to be outstanding by the plaintiff and says that the plaintiff had removed all of its equipment from the Site by 12 October 2013. Mr Leslight says the Site was only secured with a new lock when it appeared clear that the plaintiff had vacated the Site. Mr Leslight says that he does not recall any invoices being outstanding as at 22 November 2013. He also denies receiving any calls or messages to telephone Mr Phillips. He says that as he believed the plaintiff had left the Site in October 2013, the other builder, Micrah Projects, was appointed to undertake the construction works on 1 November 2013 and commenced work shortly thereafter. Mr Leslight claims that he did not receive emails or an outstanding statement from the plaintiff. Effectively, Mr Leslight claims that the plaintiff had abandoned the site.
There is, accordingly, a major factual issue between the parties as to whether the plaintiff abandoned the Site by not continuing with the work and removing all its equipment from the Site or whether the defendant breached the agreement which had been entered into by failing to pay invoices, failing to return communications and eventually locking the plaintiff out from the site.
In the event that no enforceable contract is found, the court will have to determine the claim made by the plaintiff for a quantum meruit.
As stated above, there is also a Cross-Claim in which Mr Leslight claims that the work undertaken by the plaintiff was defective and was not complete.

Summary of the evidence relied upon

Both the plaintiff and the defendant have filed and served extensive lay and expert evidence. The lay evidence relied upon by the plaintiff consisted of three affidavits and seven lever arch folders of exhibited documents. The defendant relied on numerous affidavits prepared by him. Those affidavits also had a number of annexures.
The parties also relied on expert building and quantity surveyor reports some of which had numerous annexures.

Evidence for the plaintiff

Affidavit evidence was read by the plaintiff from its director Mr Gene Phillips and from his sister Ms Patricia Phillips. Mr Phillips is an experienced licensed builder. Ms Phillips is the office manager of the plaintiff and was office manager for the relevant period.

Evidence of Mr Gene Phillips

Two affidavits of Mr Phillips dated 29 May 2017 and 13 November 2017 were read by the plaintiff.
In relation to his first affidavit sworn 29 May 2017, Mr Phillips gives evidence that the plaintiff is a corporation in the business of construction of residential dwellings, including project management of the construction of such dwellings. Mr Phillips gives evidence that he has been a licensed builder since June 1994 and that he was the construction manager for works carried out by the plaintiff at the Property of the defendant at Sandridge Street, Bondi.
In paragraphs 8-23 of his first affidavit, Mr Phillips gives the background to the agreement which he alleges was reached between the defendant and the plaintiff concerning construction works at the Site.
Mr Phillips’ first affidavit sets out evidence of meetings on and from 30 March 2010 where the works that Mr Leslight wished to have carried out at the Site to construct two new duplex houses were discussed.
Mr Phillips exhibits to his first affidavit voluminous documentation in four volumes in relation to the matters in his affidavit. Behind Tab 1 in volume 1 of the exhibit is a job diary which Mr Phillips states that he began recording and keeping from 30 March 2010 concerning any work that the plaintiff performed in relation to the houses that Mr Leslight wished to be constructed on the Site. Mr Phillips states that it is his standard practice to keep a job diary for all projects that the plaintiff is working on and he recorded a particular level of detail in his job diary on this occasion due to the cost-plus nature of the work and there being no formal lump sum written contract in place (paragraph 10).
Mr Phillips gives evidence that he prepared the job diary by taking notes each day of the activities that he had carried out on the project or that he had observed or ascertained that others had carried out. The documents were all stored and filed electronically on the plaintiff’s server under the particular job number allocated to the site. Mr Phillips gives evidence that the notes in the job diary recorded works performed on the site, activities he was carrying out, conversations he had with Mr Leslight and the amount of hours taken by himself and other workers doing the activities. Mr Phillips gives evidence that he recorded notes in the job diary contemporaneously each day or if it was missed on a particular day, on the following day. He also states that he would “religiously check” his entries at the end of each week to make sure that nothing was missed.
Mr Phillips states that towards the end of the job, when Mr Leslight was late in paying invoices, he compiled an expanded job diary that included documents that were stored and filed electronically on the plaintiff’s server under the particular job number (1837). The expanded job diary is exhibited at Tab 2 in volume 1 to his first affidavit.
Mr Phillips exhibits to his affidavit various drawings which Mr Leslight forwarded to him in the period from 16 February 2011. Mr Phillips gives evidence of various discussions he had with Mr Leslight including an important discussion on 28 September 2011 where he claims he said to Mr Leslight that based on what he had been told, building costs for the project would be around $3,500 to $5,000 per square metre.
Mr Phillips gives evidence that Mr Leslight thought he was correct but told him that he needed to create a “low-budget” of approximately $900,000 per townhouse in order to keep council fees to a minimum. Mr Phillips claims that he stated to Mr Leslight that he would not be comfortable with adjusting an estimate to minimise council fees but that he would look to prepare an estimate based on a very low standard of finish. Mr Phillips relies on an email he claims was sent to Mr Leslight on 4 December 2011 attaching an estimate of $900,000 per property as requested but stating that for a high-quality finish and fixtures, that Mr Leslight would be looking at $3,500 to $4,500 per square metre but saying that it would be necessary to get various quotes to ensure that an accurate budget would be obtained.
Mr Phillips states that at the time he prepared the “preliminary estimate” sent to Mr Leslight on 4 December 2011, he believed that the rates used in the estimate were very low per square metre and were unrealistic if high-quality finishes and materials would be used in construction. He confirmed that a more realistic figure per square metre for high-quality finishes and materials would be in the range of $3,500 to $5,000 per square metre.
Mr Phillips gives evidence of the important conversation which occurred on 20 March 2012 in which Mr Leslight stated that he would like to hire the plaintiff as the builder on the Bondi site but wanted also to keep the costs down. Mr Phillips gives evidence that Mr Leslight said that he wanted the plaintiff to assist on the build “in a flexible way”. Mr Phillips gives evidence that he indicated he would be happy to work on that basis and that the plaintiff could undertake the work on a cost-plus basis and Mr Leslight could pay for the work undertaken. There was alleged to have been a conversation in relation to the builder’s margin and that Mr Phillips stated that he would be happy to apply a 15% margin which would be applied to all suppliers, equipment, labour and other matters that the plaintiff invoices for. It was agreed that Mr Leslight would not pay a margin if he paid the contractors directly. Mr Phillips gives evidence that he expressed the opinion that the drawings provided to him were “incomplete” and that Mr Leslight accepted that he was not certain of the works which he wanted the plaintiff to carry out.
Mr Phillips claims that he stated that the plaintiff would need a deposit prior to mobilising on the site and that the defendant would need to commit to paying within a week of being invoiced. It is alleged that Mr Leslight agreed to this and also agreed to pay interest on late payments of 20% to meet the plaintiff’s overdraft costs.
Mr Phillips gives extensive evidence as to what he meant by the term “cost-plus” which he states was a well-known term in the construction industry.
Mr Phillips gives evidence that as at 20 March 2012, it was his belief that Mr Leslight had not provided him with sufficient detailed drawings, designs and data to enable him to perform a detailed and realistic estimate of the work partly because the design for the project was not completed with sufficient detail to enable him to know the total price of the works.
Mr Phillips gives evidence of a further conversation on or shortly after 20 March 2012 where Mr Leslight made clear that he wanted to pay suppliers and other contractors directly where possible to save paying the 15% mark-up which Mr Phillips agreed to on behalf of the plaintiff.
Mr Phillips then gives evidence Mr Leslight provided him with various relevant documents including the s 96 consent and plans, stormwater details and a sub-floor plan prepared by external consultants.
Mr Phillips then gives extensive evidence in relation to the works carried out by the plaintiff. He states that he was present on site for at least a portion of each day that works were carried out by the plaintiff on site and that he was directly involved with arranging the works, undertaking the works personally in some circumstances and arranging suppliers to supply goods and services to enable the works to be carried out. Mr Phillips states that he was personally responsible for inspecting all aspects of work undertaken on the site as well as updating and liaising with Mr Leslight regarding all aspects of the work undertaken. He gives evidence that he personally oversaw labourers on site and signed off on all labour timesheets submitted to the plaintiff on a weekly basis which he exhibits to his affidavit.

Mr Phillips gives evidence in relation to the invoices exhibited to his affidavit and to Ms Phillips’ affidavit. He states that based on his review of the documents and his recollection of the works carried out on the site, he believed that each line of work described in the invoices was carried out as stated.
Mr Phillips gives evidence that the plaintiff paid 181 individual supplier invoices for the project which he exhibits to his affidavit.
Mr Phillips gives evidence of late payment of invoices by Mr Leslight and annexes various documents to his affidavit. He states that at no time during the completion of the works (or at all) did Mr Leslight make any complaint of defective or incomplete works to him or to any other person to his knowledge. He exhibits documents of works inspected and approved by Mr Leslight's engineer, JDT Designs. Mr Phillips states that he was never given an opportunity to inspect the site prior to the works being “covered up” and states that the works undertaken by him are incapable of being inspected satisfactorily without invasive investigation and/or uncovering of the completed works. He states he was never given the opportunity to rectify any alleged defects even if they existed.
Mr Phillips gives extensive evidence of delays or non-payment by Mr Leslight and of his inability to have appropriate communications with Mr Leslight on this issue. Mr Phillips gives evidence that 11 October 2013 was the final day that the plaintiff actively worked on the site but that from 11 October 2013 to 3 December 2013 the plaintiff continued works off-site. Mr Phillips gives evidence of his various attempts to get instructions from Mr Leslight.
Evidence is given by Mr Phillips of a 29 October 2013 meeting between him and Mr Andrew Kola of the plaintiff, Mr Leslight and Mr Leslight's parents. This meeting is denied by Mr Leslight. Mr Phillips claims that he provided Mr Leslight and his father at the meeting with a summary of the invoices to date for the project, both paid and unpaid. Mr Phillips states that the defendant indicated at the meeting that he did not have any more money for the project to keep going at the moment but he was attempting to get more funds from the bank.
As amounts were outstanding to the plaintiff, Mr Phillips gives evidence that on 31 October 2013 he began moving men and equipment off site and cleaning up the site and removing most of the tools and equipment from the site.
Mr Phillips gives evidence of repeated attempts to contact Mr Leslight and of email correspondence with him. Mr Phillips stated that on 3 December 2013 he attempted to gain access to the site and observed that the access code on the front gate lock had been changed and a new lock had been installed at the front gate without warning to him on behalf of the plaintiff.
Mr Phillips gives evidence that on 9 December 2013 he received an email from a subcontractor who was working on the site that a new builder had taken over the site. Mr Phillips gives evidence that he then instructed his solicitors in the proceedings.
In paragraphs 66 and following of his first affidavit, Mr Phillips gives evidence of documents which he provided to experts who have been retained in these proceedings including Mr Lee, a quantity surveyor.
Mr Phillips also annexes photographs taken of the site arranged under various headings corresponding to stages of the works allegedly performed by the plaintiff.
In his second affidavit sworn 13 November 2017, Mr Phillips undertakes a detailed response to the affidavit evidence of the defendant.
It is unnecessary to set out the contents of this affidavit in extensive detail. In summary terms, the affidavit:

In paragraphs 12-30 provides Mr Phillips’ reasons for the absence of any construction programme, project timeline or timetable for works to be completed at the Site. He said the scope of works was “largely undefined and unpredictable” and there was “constantly evolving” detail of the scope of works to be completed, particularly in relation to the size of the buildings to be constructed and the drawings provided.

Evidence is also set out in relation to the provision of estimates of costs including that the rough estimate provided in relation to the townhouses for the purposes of the Council was based on a very low standard of finish;

In paragraphs 31-42 of his reply affidavit, Mr Phillips gives evidence in relation to various delays to the works caused by poor cash flow from the defendant, the refusal by the defendant to pay further moneys to the architect to complete the design documentation, numerous requested changes to the plans, inclement weather causing about 198 days in delays, the non-payment of the plaintiff and other contractors on the site by Mr Leslight and latent site conditions including hazardous materials and contaminated soil, the nature of the land and complaints from neighbours. It is said by Mr Phillips that site conditions were largely unknown as at March 2012 because the geotechnical report procured by Mr Leslight was preliminary only and did not involve core drilling to assess the subsurface. It is stated that the sub-ground conditions were not discovered until excavation commenced;

In paragraphs 44-56 of his reply affidavit, Mr Phillips gives evidence in relation to his response to the allegations as to inappropriate concrete piers and the alleged defects in the rear pool slab;

At paragraphs 57-73 of his reply affidavit, Mr Phillips gives evidence in relation to the absence of any complaint or notification to him or any other person to his knowledge of defective works or incomplete works or any other complaint in relation to the works. Mr Phillips states that the first time he ever heard of any complaint relating to the works was upon reading Mr Leslight’s Cross-Claim. Mr Phillips states that there were never any complaints by the defendant regarding the standard of works generally, or the ability of the men on the site or his supervision/management skills.

In relation to the amounts claimed by Mr Leslight in the Cross-Claim, Mr Phillips states that he did not have any knowledge prior to the proceedings of Mr Leslight’s financing costs or his plan to lease out the property or that he was renting while the project was ongoing;

In paragraphs 74-84 of the affidavit, Mr Phillips gives evidence of the conclusion of works on the Site and his attempts to get paid and to obtain further instructions from Mr Leslight;

In paragraph 85 of the reply affidavit, Mr Phillips gives evidence that the plaintiff was required to carry out some demolition works on the Site even though the majority of the demolition works were completed by a contractor engaged by Mr Leslight, Active Demolition;

In paragraphs 86-93 of the reply affidavit, Mr Phillips gives evidence in relation to his involvement in providing documentation to his structural engineer and quantity surveyor experts;

In paragraphs 94-99 of the affidavit, Mr Phillips gives evidence in relation to photographs which he exhibits to his affidavit.

Mr Phillips was subject to an extensive and detailed cross-examination by counsel for the defendant over two days.
In his oral evidence, Mr Phillips confirmed that he had discussions with Mr Leslight in 2009/2010 in relation to a potential joint venture concerning developing the site owned by Mr Leslight but Mr Phillips was not in a position to participate in the joint venture at the time. He agreed that he had then had discussions with Mr Leslight concerning the construction project on the Site.
Mr Phillips confirmed that he had been told by Mr Leslight that he had applied to his bank for a mortgage advance for the purposes of the project. This involved a loan application and the approval by the bank of a loan. Mr Phillips said he believed Mr Leslight had been lent the money by the bank for the project. It was put to Mr Phillips that Mr Leslight had told him that the bank had approved construction funding of $912,000 for each unit. Mr Phillips denied this and he said he did not know the amount that had been lent or what amount Mr Leslight had in the bank to top up any funding which he had: T49.46.
Mr Phillips was then asked questions about the preparation of his job diary which is at Tab 1 of the exhibit to his first affidavit. He agreed that he had begun recording and keeping his job diary from the first meeting recorded in it on 30 March 2010. He stated that he prepared the job diary each day or the following day and checked it at the end of each week. When it was put to him that as at 2010 there was not a job at the Site, Mr Phillips said he kept a diary for everything he did and kept it complete and accurate as much as he could: T50.25.
In relation to the first few pages of Tab 1 to the exhibit to Mr Phillips’ affidavit which give summaries of work performed by different persons on the job, Mr Phillips gave evidence that these were generated by MYOB and were as a result of the completion of material at the end of each week which he did with his sister who worked for the plaintiff. The weekly figures were entered into MYOB which updated spreadsheets for the job. In relation to invoices, Mr Phillips gave evidence that he prepared these with his sister at the end of each week. She obtained copies of the invoices and entered them into the accounting software. The numbers and amounts in the invoices were checked and then entered into MYOB. Mr Phillips said his sister did the data entry into MYOB and she printed out the invoices after he checked them. Mr Phillips gave evidence that some work that was completed on the job was not billed.
Mr Phillips was asked questions about the different people working on the project and their different rates. He confirmed that when he worked on construction work he was charged out as a leading hand and not at the management rates: T54.40.
Mr Phillips was asked whether as at September 2011 there was some uncertainty as to what Mr Leslight wanted from the plaintiff. Mr Phillips agreed with this and said he was trying to work out from the start who was doing what on the project. In relation to the reference in the entry in the job diary for 28 September 2011 to “also discussed Owner Builders option due to unknown requirements”, Mr Phillips confirmed that it was unknown what role the plaintiff was to play on the project. He said Mr Leslight was trying to work that out: T56.10.
Mr Phillips denied that Mr Leslight told him that the bank was giving him $912,000 for each house and that he needed to get each house built for that. Mr Phillips said that he told Mr Leslight you would only get a “really cheap house” built for that sort of money. He denied that Mr Leslight had said that that was the budget he was working under and said that if he had been told that he would have “walked away” from the project: T56.28.
Mr Phillips was asked about the agreement which he allegedly entered into with the defendant on behalf of the plaintiff which was said to have occurred on 20 March 2012. See paragraph 26 of Mr Phillips’ first affidavit. He was also taken to paragraph 3 of the Amended Statement of Claim where it is asserted that a contract was entered into on 20 March 2012. It was put to him that the contract was an important date but was not mentioned in the job diary. Mr Phillips conceded that and said that it was “missing”: T58.25. He did not know why it was missing from the job diary: T59.1. This did not appear to me to be a particularly significant omission as both parties accept that an agreement of some sort was reached between the parties on or about 20 March 2012. It does however go to the accuracy and completeness of the job diary maintained by Mr Phillips.
Mr Phillips agreed that the job diary concluded on 21 January 2014.
Mr Phillips was asked some questions in relation to the material behind Tab 2 of the exhibit to his first affidavit. He said it included the job diary and some other documents. He said that the materials behind Tab 2 included all information that “backed up” the job diary to prove that it was accurate: T61.9. Mr Phillips rejected the suggestion that the job diary was compiled in 2013 to 2014: T61.20. He agreed that by December 2013 he was aware that another builder was on the site and that the work in the job diary after that date was tidying up the files and checking all the paperwork.
When asked whether his time on the Site appeared from the hours in the job diary for “management”, Mr Phillips denied this and said that he did not charge for all hours that he spent on the job. He said that he was at the Site for about 95% of the days talking to the workers and inspecting the work. He conceded that he was not on the Site every day during the job.
Mr Phillips was taken to an email which he forwarded to the defendant dated 4 December 2011 to which he attached an estimate. The email said:

“I have attached an estimate based on the figures of around $900,000 per property as requested. Please let me know if this is OK. I think for a high quality finish & fixtures you will be looking at $3,500-$4,500 per sqm, but we will have to get various quotes to ensure we have an accurate budget” (Tab 2 of Exhibit).

Mr Phillips said that the document he sent was not a budget but a preliminary estimate based on the figures Mr Leslight had told the council. Mr Phillips was asked questions about his email to “Shehzad” and identified that he was the quantity surveyor that was used to consider the preliminary estimate.
Mr Phillips was then asked questions about documents which had been obtained by the defendant before his involvement. He agreed that he had been told that there was a dilapidation report prepared in relation to the adjoining properties but he had not seen the document until much later. He said he understood it was organised by the defendant and his engineer and agreed that this was a prudent step to take. He said he did it for every job. He also agreed that a preliminary geotechnical report was obtained by the defendant. He agreed that he had seen the geotechnical report before he undertook the site investigations. He also agreed that when he arrived at the Site the existing building had been demolished and there was some uncertainty in relation to the subsoil conditions at the Site: T65.47. He later qualified this by saying that the demolition works had been completed by the time the plaintiff commenced its own work on the site.
It was put to Mr Phillips that because of the uncertainty of the subsoil conditions at the Site, the arrangement made between the plaintiff and Mr Leslight was that the plaintiff would only undertake the bulk excavation and that any further work would be taken from there. Mr Phillips disagreed with this and said that once the bulk excavation was done he was to prepare a new budget but he understood that Mr Leslight wished the plaintiff to continue on the job until the shell of the building was constructed. He disagreed that the plaintiff commenced excavation simply in accordance with an agreement to undertake the bulk excavation work and that afterwards it would be reviewed. He also stated that the bulk excavation was not completed. Mr Phillips said that the boundary footings and footings around the pool were undertaken. The former consisted of two retaining walls.
Mr Phillips was taken to his email to Mr Leslight sent on 11 June 2012 where he stated:

“At this stage, after assessing all of your documents I would have to say it would be difficult for me to put a firm figure on our costs for assisting you. It will also be difficult to keep the contractors to a strict lump sum price as the documents still need some work. Due to the current documentation the cheapest way to complete this project would be to pay us by the hour at the rates shown on the attached budget sheet. You would be entering into contracts & paying the suppliers/contractors directly so we will not be adding the normal builder’s margin … To date I won't have charged for any of my time, but will need to start clocking billable hours from when you get the CC. We will do our best to keep costs to a minimum.” (Leslight 8/7/16 affidavit Exhibit Tab 6).

Mr Phillips agreed that the scope of works was difficult to put a cost figure on. Mr Phillips said a final budget was given to Mr Leslight in October 2013 to enable him to go to the bank for further funding. He agreed that the last work was done on the site in October 2013 when a temporary retaining wall was constructed on the left boundary. Mr Phillips said this was requested by the engineer retained by Mr Leslight and it was said to be urgent.
Mr Phillips was taken to his diary entry for 11 August 2012 where he states “costings are very difficult at this stage as we have discovered contaminated fill and rock levels are much deeper than originally thought”. Mr Phillips agreed that costings were difficult to provide and that this was made worse by his findings of contaminated fill and deeper rock levels: T70.49. He agreed that Mr Leslight had said to him that the difficulties in providing costings were a matter of concern to him. It was put to Mr Phillips that his inability to provide costings was a matter Mr Leslight indicated to him was a reason why he was not willing to enter into any extended contract. Mr Phillips denied this and said that he was attempting to give preliminary estimates for costings for the whole project not just the excavation work: T71.30. Again, it was put to Mr Phillips that the plaintiff was only engaged to carry out the bulk excavation. He disagreed with this and said that even the bulk excavation was not completed by the time the plaintiff left the site: T72.1.
In relation to the temporary retaining wall erected by the plaintiff in October 2013, Mr Phillips agreed that Mr Leslight paid about $17,000 for that work and that it was paid in advance: T73.9. He agreed that he did not liaise with the builder on the adjacent property in relation to that retaining wall: T73.15.
Mr Phillips was then taken to the various rates charged for different personnel of the plaintiff as set out in the documents behind Tab 1 of the exhibit to his first affidavit. It was suggested to him that these rates were never the subject of discussion and agreement with Mr Leslight. Mr Phillips denied this and said “of course” they were and said he believed they were forwarded in a document to Mr Leslight: T73.30. Having been given an opportunity to locate the rates document he was not able to identify the document. He accepted that it was not recorded in his job diary. He was taken to an email dated 5 November 2012 sent at 12:23am apparently to Mr Leslight which was behind Tab 2 to the exhibit to his first affidavit. It was put to Mr Phillips that this email was never sent to Mr Leslight. Mr Phillips denied this and referred to the reply email from Mr Leslight of 5 November 2012 timed at 8.22am at the top of the page in the exhibit. It was put to Mr Phillips that he never invoiced Mr Leslight for the $150,000 deposit referred to in the first point on the second page of the 5 November 2012 email. Mr Phillips said he reduced the deposit amount. He also said that he forwarded an invoice for the deposit amount. In re-examination he said that after the 5 November 2012 email was sent to Mr Leslight, he had a discussion with him in which it was agreed to send a reduced amount for the deposit. It is noted that an invoice for a reduced deposit amount is annexed to Ms Phillips’ affidavit.
It was put to Mr Phillips that the plaintiff had its own cash flow problems at this time which he denied.
It was suggested to Mr Phillips that he was engaged in other works in 2012/2013 and that in November 2012 he asked Mr Leslight for money as he was short of money. Mr Phillips denied this and said that he only asked for a deposit. He said that he regarded the plaintiff as being entitled to a 10% deposit but he reduced the sum to an amount of less than 10%. It was put to Mr Phillips that in the period 7 November 2012 to 16 November 2012 that Mr Leslight advanced the sum of $60,000. Mr Phillips agreed with this and said it was part of the deposit requested of, he thought, $90,000. He also denied that he never issued an invoice for the deposit.

Mr Phillips agreed that as at January 2013 there was considerable bulk excavation work still to be carried out at the site. He also agreed that he met with Mr Leslight on 25 January 2013 to discuss the proposed future work and how the work was to continue. See the job diary entry behind Tab 2 (page 55 of 199). It was put to Mr Phillips that his reference to “future work” was excavation work. Mr Phillips said the main issue at the time which was a priority was an issue relating to the neighbours. He agreed that excavation work was still to be carried out at the Site. Mr Phillips said that enough had been excavated not to need a retaining wall at that stage but the works were delayed by issues concerning the permission of neighbours.
Mr Phillips was taken to his email to Mr Leslight dated 1 May 2013 which concluded:

“We also require the original deposit to allow us to bring back contractors as required. We really want to help you do the building work for you & have the resources to do it, but need the right information & the correct funding”.

He agreed that at that stage he was still not able to state the complete cost of the excavation work and therefore could not inform Mr Leslight of what 10% of the contract sum was: T79.24.
It was put to Mr Phillips that the plaintiff was not engaged to construct the building. Mr Phillips disagreed with this and said that as he understood it, the plaintiff as a minimum was engaged to construct the shell of the building: T79.34.
It was put to Mr Phillips that the plaintiff cleared out its equipment at the site on 3 September 2013. He agreed that the printer in the shed and some tools were taken but other materials were left on the Site: T80.11.
Mr Phillips was then asked questions in relation to the labourer invoices at Tab 13 of the exhibit to his first affidavit. He identified the level of each of the relevant persons as a labourer, skilled labourer or leading hand.
Mr Phillips was asked questions about paragraph 33 of his first affidavit in which he states that he personally oversaw labourers on Site and signed off on all labour timesheets submitted to the plaintiff on a weekly basis. He agreed that he had a bundle of individual timesheets at Tab 13 of his affidavit and a spreadsheet in relation to these at Tab 14 of his affidavit. He agreed that Tabs 13 and 14 should accord with each other.
Mr Phillips was also asked some questions in relation to paragraph 38 of his first affidavit where he states that the plaintiff paid 181 individual supplier invoices for the project which he annexes at Tab 16 of the exhibit to his affidavit. He was asked questions in relation to a number of invoices which were not on their face connected to the Site other than by a job number. Mr Phillips gave evidence that when he received an invoice he wrote the relevant job number or address on the invoice. He said he exercised care to ensure the correct job number was written on the invoice. He confirmed that he sat down with his sister every couple of days to update the records and put them into the MYOB system together with the workers’ timesheets. He said his sister only entered the records after he gave them to her and he wrote the job number, a name or an address on it.
In relation to the labourers, he received their invoices. He agreed that his sister might enter the records into the computer system but he would check them. Mr Phillips accepted that the labourers either called, emailed or texted with their time and his sister entered the details in MYOB. However, Mr Phillips stated that he checked the details with the foreman and also checked them when he sat with his sister. When it was put to Mr Phillips that he only reviewed the records after they were entered by his sister, he said that he “triple checked” them. He said he checked the records on the day they were received, checked them with the foreman and then checked the records with his sister. He said he changed the records if he found they were incorrect.
In relation to invoices, Mr Phillips gave evidence that an invoice was never sent out by the plaintiff unless he checked it thoroughly. He said he always checked the records weekly or biweekly. Mr Phillips accepted that there were several invoices which contained no indication on them connecting them to the Bondi Site. However, he gave evidence that he thoroughly checked their application to the Site before he included them. When asked whether it was possible that he charged an invoice to the wrong job number he said that this was not the case and there was “no way” this could have been done.
Mr Phillips was asked questions about paragraphs 46 to 48 of his first affidavit in which he states that he was never given an opportunity to inspect the Site prior to the works being “covered up” and that the works were now incapable of being inspected “satisfactorily”. He agreed that as at 9 December 2013 he was aware that another builder had taken over the Site: T88.48.
Mr Phillips was asked about entries for time spent on the job in December 2013. He said this was connected to checking all invoices, chasing up the defendant for payment and thoroughly reviewing the details for the whole job. This involved a review of all matters from the start to the end of the job and included a review of every hour spent, every docket and every timesheet. Whilst Mr Phillips agreed that there should not have been anything wrong, he said he checked the items personally: T90.1-23.
Mr Phillips was taken to his reply affidavit where he referred to days lost due to inclement weather. He said the days lost for weather and other delays were recorded on another spreadsheet that was not the same as the document behind Tab 8 in the exhibit to his reply affidavit. He said the delays included rain and design issues. He said the delays were recorded as the matter went along. Mr Phillips confirmed that the time lost from rain of 198 days in his second affidavit was “fairly accurate” but he needed to check it against the detailed spreadsheet records. In due course, there was tendered a spreadsheet in relation to delays which became Exhibit A which on its face confirmed Mr Phillips’ evidence as to the number of days allegedly lost for inclement weather.
Mr Phillips was then asked a number of questions in relation to tax invoices including those which were referred to in paragraph 7 of his sister’s affidavit and exhibited at Tab 1 of that affidavit. Mr Phillips said that invoices were not sent out without him seeing them. Mr Phillips accepted the accuracy of the schedule referred to in paragraph 7 of his sister’s affidavit.
Mr Phillips was then asked questions about the different invoices which are behind Tab 1 of that affidavit. It was suggested to Mr Phillips that a number of the invoices dated in 2012/2013 were not issued to the defendant until March 2016. Mr Phillips denied that (T95.42) and said that the invoices were normally sent out within a few days of their preparation. For example, Mr Phillips was taken to invoice number 1359 and it was pointed out to him that the job number was not the job for this site. Mr Phillips said the invoice was sent to the defendant and he paid the plaintiff $60,000 in response to the invoice. Mr Phillips denied that $60,000 was advanced because he had told Mr Leslight that he was running short of cash. Mr Phillips said that at no stage was he running short of cash: T96.38. Mr Phillips stated that some invoices were given to Mr Leslight early so that he could use them in approaching the bank for funds.
In relation to tax invoice number 1373 dated 14 February 2013 in the sum of over $102,000, it was put to Mr Phillips that this was paid by the sum of $60,000 in various payments between 7 November 2012 and 16 November 2012 together with a $42,380.83 payment made on 10 April 2013. Mr Phillips denied this and said that the payments made in November 2012 were made for the deposit for the work. It was also put to Mr Phillips that the invoice was a fiction as the $60,000 was advanced to help him and the sum of over $42,000 was paid as part of the invoice: T97.47. Mr Phillips denied this and said the $60,000 was paid for the deposit and Mr Leslight purported to use that as part of the payment for the 14 February 2013 invoices: T98.1. Mr Phillips also said in response to the suggestion that invoice number 1373 was not sent to Mr Leslight, that he was a businessman and why would he pay any part of the amount without an invoice: T98.11. Mr Phillips stated that all of the invoices were emailed to Mr Leslight despite the Bondi address appearing on the invoices.
Mr Phillips was then taken to invoice 1388 behind Tab 1 in his sister’s affidavit in the amount of $5,594.27 and asked to compare it with a document which became part of Exhibit 1 which was an invoice also numbered 1388 of the same date for $5,123.69. Mr Phillips was asked why the two invoices of the same number were different. He suggested that perhaps a mistake had been found and it had been corrected. Also part of Exhibit 1 was a bank statement which showed that the higher invoice for $5,594.27 had been paid by Mr Leslight. This suggests that Mr Leslight had indeed received the invoice for $5,594.27 behind Tab 1 of Ms Phillips’ affidavit rather than the lower invoice which was part of Exhibit 1. Mr Phillips accepted that the documents in Exhibit 1 appeared to suggest that there had been a doubling up in payment of the amount of $1,097.80 for excavation work performed by Ron Flew Excavations. Mr Phillips stated that all errors such as this were corrected “later on”. He stated that when the plaintiff left the Site he continued working on the Site documents which was reflected in the time recorded in the job diary. He stated that he went through all of the invoices and other documents for the Site and corrected any errors and discrepancies and asked for the money outstanding. He said doubling up payments were corrected at that stage.
When it was put to Mr Phillips that tax invoices 1392, 1400, 1407, 1411, 1417, 1420 and 1420.1 were not issued by the plaintiff until March 2016 he denied it: T102.27. He said the invoices were issued on or about the dates they bear and that he paid GST on the invoices for his BAS return at the time in 2013 as he operated on an accruals basis: T103.14-.30. This evidence appeared to me to be persuasive and Mr Phillips was not further relevantly cross-examined on this issue. I accept his evidence on this point.
Mr Phillips was then cross-examined about invoices 1419, 1420 and 1420.1. It was put to him that these invoices bore the same invoice number but were for differing amounts. After he gave some initially confusing evidence in response to the invoices, Mr Phillips was given an opportunity to review the invoices. He stated that in relation to a payment made by the defendant on 2 October 2013 of $17,089.71 for invoice 1420, this invoice was sent in advance to the defendant because the plaintiff had obtained a discount rate from a supplier but it was only available for a short period of time. When the payment was ultimately made, the cheaper supplier was not available. Accordingly, by invoice 1420CR, the defendant was given a credit for this amount which reversed invoice 1420. The defendant was then invoiced by the plaintiff for the amount that it cost the plaintiff to provide the supply which was in the sum of $17,814.65 as shown in invoice number 1420.1 dated 1 October 2013. The invoice as sent to the defendant was the actual amount that it cost the plaintiff for the supplies. This was forwarded to the defendant on 1 October 2013: see page 181 of 199 behind Tab 9 of the exhibit to Mr Phillips's second affidavit.
This explanation as given by Mr Phillips of otherwise apparently confusing invoices was logical and cogent and I accept it.
Mr Phillips was then taken by counsel for the defendant to the last two invoices behind Tab 1 to the exhibit to his sister’s affidavit which were invoices 20140311 and 20140312 both dated 19 March 2014. He agreed that these two invoices had not been issued to the defendant prior to them being forwarded by the plaintiff's solicitors under a letter of demand.
Mr Phillips was asked some questions in relation to certain photos which were attached to the expert report of Paul Easingwood behind Tab 17 in the exhibit to his reply affidavit. In relation to four pages of photographs, Mr Phillips confirmed that a number of the photographs were taken after the plaintiff left the Site and included some works not carried out by the plaintiff at the Site. Mr Phillips was candid and direct in conceding that a few of the photographs included works not completed by the plaintiff at the Site.
Mr Phillips was then asked a number of questions in re-examination. Questions were asked about the proposition put to Mr Phillips in cross-examination that there was no document which he had sent to the defendant Mr Leslight in which he set out the rate for hours that he would charge for work on the site. Mr Phillips was then taken to a number of invoices behind Tab 1 in Ms Phillips’ affidavit which set out the hourly rates for the various employees of the plaintiff. These include invoices from invoice 1368 sent on 21 December 2012 to invoices dated through to 1 October 2013. Mr Phillips confirmed that the invoices in this period set out the hourly rates for the different type of workers, the number of hours worked and the total claimed for the work. See for example the second page of invoice number 1368. In relation to these invoices, Mr Phillips confirmed that they were sent to Mr Leslight and no objection was raised by Mr Leslight at any time in relation to the hourly rates put on the invoices or the hours claimed. These documents established in my view that Mr Leslight was aware at all relevant times of the rates being charged by the plaintiff for the various workers and tradesmen from at the latest December 2012 and agreed to them by payment of them.
In relation to the failure to make reference to the entering into the agreement with the defendant on 20 March 2012 in the job diary, Mr Phillips gave evidence that not every email or phone call was recorded in the job diary.
Mr Phillips was then asked questions in relation to the spreadsheet behind Tab 8 in his reply affidavit. He said this was the summary of various delays as recorded in detail in another spreadsheet. He said the information in the document behind Tab 8 was based on another more detailed spreadsheet for each relevant day on the project. He said that the information for that spreadsheet was entered every day or every second day and was divided into delays for inclement weather, design and other issues. This further document that was referred to by Mr Phillips was tendered, over objection, by the plaintiff and became Exhibit A in the proceedings.
Mr Phillips gave evidence that the spreadsheet of delays which became Exhibit A represented delays to the project including delays caused by rain. Mr Phillips said that the column headed “BOM Rain Days” indicated days where rain had been confirmed by the Bureau of Meteorology. The document made reference to each day at the Site, available working days which omitted weekends and public holidays, days of rain confirmed by the Bureau of Meteorology, total delayed days being days lost on the job due to rain which may have included days where there was no work because of the conditions on the site due to rain and delays due to design where the plaintiff was waiting on information such as appropriate drawings.
In relation to these, for example concerning 13 August 2013, Mr Phillips said that the plaintiff received engineer’s drawings in relation to the retaining wall on the boundary and could then proceed. There were other delays due to complaints by the neighbours, an example was in September 2012 when work could not continue until the permission of a neighbour for the work was obtained. The reference to cash flow delays referred to delays when the plaintiff should have received payment from the defendant for invoices. The column “Days on Site” consisted of days actually worked on the Site whereas “Days On The Job” referred to time spent completing work in relation to the project which included some time in the office. The column “Days Not Workable” takes out days such as weekends and public holidays where work could not be completed. The “Comment” column was used by Mr Phillips to insert items to record issues such as the Christmas shutdown. He again confirmed that the entries in this document were included at the same time as he completed the job diary, as they were on a different page in the same Excel spreadsheet in the computer programme used by the plaintiff.
Mr Phillips was then asked some questions in relation to his 5 November 2012 email which was located behind Tab 2 of the exhibit to his first affidavit. This email included the following:

“Before we do any more work, I need to make the payment terms clear for your benefit as well as our contractors.
1.  $150,000 deposit before any work starts. This deposit will not be deducted from any invoice before the last invoice.
2.  Payment to be made within 7 days of receiving an invoice. Some suppliers/contractors will need payment prior to delivery.
3.  Late payment costs will include but not limited to a 20% PA interest rate to cover the contractors overdraft/credit facilities.
I am sorry if this makes things difficult, but if we don't start off well, the whole job could get out of hand.
I'm hoping we can be ready to start as soon as we get the final engineering drawings.”

Mr Phillips confirmed that these payment terms were reflected in the 6 November 2012 invoice number 1359 behind Tab 1 in Ms Phillips’ affidavit which was sent to the defendant on the day following the 5 November 2012 email. Following the sending of the 5 November 2012 email, Mr Phillips gave evidence that he had a telephone conversation with the defendant and in this conversation the deposit was reduced to that in the tax invoice of $85,000 plus GST. Mr Phillips confirmed that the invoice reflected the content of his discussion with the defendant. This evidence from Mr Phillips was persuasive and I accept it.
After the first adjournment of the hearing of the proceedings after four days, Mr Darvall, counsel for the defendant, sought to take advantage of the leave given to the defendant to further cross-examine Mr Phillips on the document which became Exhibit A in the proceedings: T116-117. For this purpose, the witness was provided with a blown up A3 version of Exhibit A.
Mr Phillips confirmed that the plaintiff kept an electronic diary in relation to a particular job and that Exhibit A was an Excel format spreadsheet which was kept on the same file as the electronic diary. Mr Phillips stated that the spreadsheet, which recorded matters of interest on a job including delays, was updated daily or every second day: cf T115.41; T50.12. Mr Phillips confirmed that as at 2012 when he was working on the Site that the plaintiff was also engaged in other projects. However, he said that a separate diary was kept for each job with a separate spreadsheet. In re-examination, Mr Phillips confirmed that Exhibit A only related to the job at the Bondi Site.
Mr Phillips was then cross-examined by counsel for the defendant to suggest that Exhibit A had shortcomings and was on occasions inaccurate. Mr Phillips stated that the spreadsheet was prepared as the project went along to record each type of delay which was relevant.
It was put to Mr Phillips that the project commenced on 11 October 2012. Mr Phillips said he could not recall that but stated that the plaintiff had representatives on site before the existing buildings were demolished. He denied that 11 October 2012 was the first time the plaintiff was on site at the Bondi Site. When it was put to Mr Phillips that 11 October 2013 was the last day the plaintiff was on-site, he said that it “sounds about right”, but said it was not the last day which the plaintiff was working on the job. He confirmed that Exhibit A recorded delays to the site works from June 2012 to December 2013 with the last reference in Exhibit A being to February 2014. Mr Phillips made a distinction between delays which occurred on the site to delays which occurred in relation to the job.

The next issue is whether a daily amount for delay to the plaintiff as found by the Referee should be added: see paragraphs 206-209 of Exhibit B, the Referee’s report. The plaintiff submits that it should: written submissions dated 20 February 2019 paragraphs 98-99. It submits that the delay diary, Exhibit A, is compelling evidence in support of the plaintiff’s claim when read with the job diary maintained by Mr Phillips. The defendant submits that it should not: written submissions dated 13 March 2019 from paragraph 21. As the Referee Ms Grey states, usually the contract in a building dispute sets out who bears the costs due to delay for which neither party is responsible: Exhibit B paragraph 209. The plaintiff seeks 278 delay days totalling $282,614.80: see paragraph 27 of the plaintiff’s submissions in reply dated 27 March 2019. It is submitted by the plaintiff that there is no overlap in this claim.
The contract terms did not indicate who was responsible for the risk of delays due to rain. On one view, the rain delays should be excluded in considering both the plaintiff’s claim and the defendant’s Cross-Claim as rain delays are not due to the fault of any party. However, I note that the plaintiff in paragraphs 14 and 19 of its 27 March 2019 submissions, quotes the Referee in relation to what should be included in the quantum meruit assessment. The plaintiff submits, and I accept, that damage flows from delay per se because without the delay the plaintiff could have proceeded with its work. The builder has costs when present on site even if no or restricted work is completed. The builder only cannot claim compensation because of delay caused by it or delay which was at its risk under the agreed terms. The issue involves a question of risk allocation.
The issue turns partly on the scope of the contract agreed, Exhibit A, Mr Phillips’ oral evidence, the affidavit evidence and the various submissions from the parties, including the annexure to the defendant’s 13 March 2019 submissions. In general terms I accept the submission of the plaintiff that the delay claim as part of the quantum meruit assessment is different in nature to the defendant’s delay claim as part of his Cross-Claim. See the last sentence in paragraph 11 of the plaintiff’s written submissions dated 27 March 2019. The delay I am assessing at present is delay to the plaintiff builder.
There was no evidence of any agreement between the parties that rain delay was at the plaintiff’s risk as the builder and construction manager. The contract I have found is fairly basic. Therefore, applying the Referee’s expert finding in paragraph 206 of her Report as to what delay falls within a quantum meruit, the defendant is liable for rain delays: see Referee report paragraph 206. I am not aware of any authority in assessing a quantum meruit to the contrary on this issue. I accept as a matter of principle that it is correct in relation to what a quantum meruit is intended to include.
Having regard to the findings I have made about the scope of the contract and the agreed roles of the parties, I reject the submissions of the defendant made in paragraphs 5 and 26-27 of his written submissions dated 13 March 2019 that any delays due to unknown ground conditions and the neighbourhood dispute issue are due to defaults by the plaintiff. These did not fall within the plaintiff’s agreed role. The allegation that the plaintiff had obligations to give advice as to neighbour and geo-technical advice issues prior to the commencement of any works or even the contract is also not consistent with the defendant’s pleaded case as to the contract between the parties: see Defence paragraph 3 (iii); Cross-Claim paragraph 16 and particulars. There is no allegation there of a failure of the plaintiff to provide advice to the defendant.
I also reject the submission in paragraph 23 of the same written submissions that the relevant period on site should be 52 weeks as opposed to 14 months. The latter is supported by the affidavit evidence of Mr Phillips and the plaintiff’s role in the excavation process: see T238.10; T238.30; T239.38; T241.20. See also the entries in the job diary and paragraphs 175-176 of the Referee’s report. The correct period is from August 2012 to 11 October 2013.
I have considered Exhibit A in the light of the defendant’s written submissions dated 13 March 2019 paragraphs 28-37, the plaintiff’s written submissions dated 27 March 2019 paragraphs 18-28 and the oral submissions. Difficult questions of analysis are raised by the parties as to the plaintiff’s delay claim. Exhibit A was prepared daily or every second day by Mr Phillips whose evidence I have generally accepted: T115.22-.49; T236.38. He also confirmed that he focussed on delays to site productivity in preparing Exhibit A: T243.
I initially focus on the neighbour dispute period shown in Exhibit A. In my view, the design delay period alleged in Exhibit A prior to 4 September 2012 does not appear to be relevant having regard to the stage the project had reached: see T247.14. Although Mr Phillips claimed it delayed the plaintiff obtaining quotes and planning, I did not find this general evidence to be convincing: see T244.43-T245.7. I cannot see how the alleged design delays could slow the completion of the project or cause costs to the plaintiff where the excavation was being undertaken and the plaintiff alleges there were further substantial delays from 4 September 2012 due to other causes. The overall position cannot be ignored. The neighbour delay period is the next highest number of days claimed in Exhibit A. The period is established by Exhibit A. There are relevant references in the job diary from 17 September 2012 onwards (see also entries for 11 October 2012 and 7-13 November 2012). Exhibit A has an entry for 13 August 2013: “Received Engineer’s Drawings for Retaining Boundary Walls” which concludes the claimed delay period.
I accept the defendant’s submission that the period of the “Christmas shutdown” claimed as a neighbour dispute period (12 days) should be excluded as there is no evidence workers were on site or that work was likely. Whilst the plaintiff disputes this in paragraph 23 of its 27 March 2019 reply submissions, I am not satisfied that work was likely to be performed in this period having regard to the time of the year. No specific and convincing evidence was led by the plaintiff on this issue which leads to a different result. This applies equally to the claim for design delays in this period.
I also accept that double counting should be avoided – for example inclement weather days and coinciding neighbour dispute days (12 days). It is unclear from where the defendant gets his figure of 211 days of neighbour delays in paragraph 30 of his submissions but I assume this is based on the period from 11 October 2012 which I have rejected. Exhibit A refers to 237 days. If one starts with 237 days as is in Exhibit A, then subtracts 12 days for the “Christmas shutdown”, then subtracts any days for rain delays which I do not consider are established (9 September 2013, 13 September 2013 and 8 October 2013 but none of these fall within the relevant neighbour dispute period) one gets 225 days. If one then adds rain delay days after the end of the neighbour dispute period whilst excluding the three days I have indicated, one gets a further 5 days bringing the total to 230 days.
In relation to the claimed design days and cashflow days delays, double counting should also be avoided. I reject the defendant’s submissions in relation to cashflow in paragraph 36 of the defendant’s written submissions dated 13 March 2019. I prefer Ms Phillips’ and Mr Phillips’ evidence for the reasons I have given above. There are detailed references to delays caused by cashflow issues in the job diary. Mr Leslight controlled cashflow matters. See the entries for 21 September 2012 to 27 September 2012 for example. However, there needs to be deductions for the period claimed where it partly coincides with excavation, neighbour delays and cashflow delays. Overall, the impact on the plaintiff of neighbour delays, with the indicated deductions, gives the most accurate guide, in my view, for the purposes of a quantum meruit calculation. That is because the neighbour delays continue past the cessation of the cashflow delays.
Although I note paragraphs 22 and 24 of Geneville’s 27 March 2019 submissions to the contrary, there should be some discounting and reduction for days where the plaintiff’s workers on site could perform limited duties, for example where there was inclement weather. I accept that workers would have been involved with some site de-watering and drainage issues before work could proceed. I also accept Mr Phillips’ evidence that he focussed on productivity delay in preparing Exhibit A: T243.4-.58. However, Mr Phillips conceded that some work was likely done (T243.9) and therefore in my view a reduction is warranted. Doing the best I can on the limited evidence, I would discount the 46 work days referred to by the defendant to 10 days reducing the figure referred to above (230 days) to 220 days.
In relation to the comments in paragraphs 24-26 of the plaintiff’s 27 March 2019 submissions, I had some difficulty understanding the analysis of delay days undertaken in paragraphs 31-34 of the defendant’s 13 March 2019 submissions. There appeared to me to be some double counting involved. The plaintiff states that in Exhibit A delay days with multiple causes are only claimed once by Mr Phillips. In paragraph 26 of its submissions, Geneville claims that design delays, neighbour delays and cashflow delays lead to a whole day being lost unlike some rain days. In my view, some further reduction is warranted. This is because during excavation and neighbour delays some work could still be undertaken by Mr Phillips of Geneville in attending the site, assisting in the excavation process, paying contractors and suppliers and making preliminary enquiries with sub-contractors in relation to the next stages of the project. On the limited evidence available, I reduce the figure of 220 days referred to in the previous paragraph by a further 20 days to allow for this matter. I also take into account as a factor the potential for the plaintiff to complete work on these days on other projects with which it was involved: T236.45; T242.50.
Accordingly, having regard to Exhibit A, my analysis above, and allowing some time for overlapping and a potential for work on other projects for the plaintiff and its employees, I allow 200 days of delay as established, totalling $203,320 (see the daily figure at paragraph 206 of the Referee’s report).
Therefore, the alternative amount under the quantum meruit claim allowed in the light of the evidence, the Referee’s report as adopted, the reduction for the pre-contractual period and the submissions is $763,487.02 ($203,320 (for delay) plus $560,167.02) less $219,064.15 (paid by the defendant) and less $923.43 (pre-contractual) totalling $543,499.44. Interest will need to be added.
Again, for the reasons given above, I reject the submission from counsel for the defendant that the defendant paid an additional $22,401 to the plaintiff, not properly reflected in the defendant’s records: see written submissions dated 13 March 2019 paragraphs 19-20.

The Cross-Claim

At the commencement of these reasons, I set out a summary of the various pleadings in the matter. I referred to the Cross-Claim filed on 3 May 2017 and the Defence to Cross-Claim filed on 19 May 2017.
The defendant relies on his written submissions on the Cross-Claim issues dated 20 February 2019 and 27 March 2019 and the plaintiff/cross-defendant relies on its (amended) written submissions dated 18 March 2017.
I will now consider each of the claims made in the defendant’s Cross-Claim. A number of the claims have already been dealt with by the Referee in her report dated 4 September 2018 which was relevantly adopted by the court on 10 December 2018: Geneville Constructions Pty Ltd v Leslight [2018] NSWDC 384.

The unnecessary works claim

In paragraph 11 of the Cross-Claim, it is alleged that without the request or direction of the defendant and contrary to relevant plans and in breach of the agreement between the parties, six steel tube lined concrete piers were poured in a row running north-south in front of the pool area at the site which offered no benefit to the finished structure.
The Referee considered this claim and noted that the experts all agreed that the concrete piers in question had been constructed in accordance with the instructions of the engineer.
The Referee adopted the agreement of the experts in the matter and found that there was no waste of project finances or time associated with the provision of the piers and that they were not defective: paragraph 67 of Exhibit B. Accordingly, this claim was rejected.
Having regard to the findings of the Referee, this claim in the Cross-Claim is rejected.

Works not carried out in accordance with drawings

In paragraph 13 of the Cross-Claim, it is pleaded by the defendant that the plaintiff was requested and directed by the defendant to undertake/supervise/project manage the set out of starter bars to reinforced concrete fittings on the northern and southern boundaries of the basement at the site and that the starter bars were not correctly placed with a result that the defendant suffered loss and damage.
The Referee found that there was insufficient evidence to support a finding that the location of the starter bars along the southern boundary was defective and rejected the claim: paragraph 74 of Exhibit B. In relation to the position on the northern boundary, the Referee adopted the agreement of the experts, which in her view was consistent with proper building construction, that the reinforcement spacing to the footings on the northern boundary was not defective and that no rectification work was required. Accordingly, the Referee rejected this aspect of the claim: Exhibit B paragraph 78.
As the report of the Referee was adopted, I accept her findings. This part of the Cross-Claim should be rejected. I accept the plaintiff’s submissions dated 18 March 2019 on this issue: paragraphs 14-16.

Poor workmanship to rear pool slab

In the Cross-Claim in paragraphs 18-19, the defendant alleges that in breach of the agreement pleaded by him, the pouring of a concrete slab between the rear of the in ground concrete pool and the rear boundary was not carried out in a proper or workmanlike manner.
The Referee noted that no evidence was led as to this allegation. Accordingly, the Referee rejected this part of the claim: Exhibit B paragraph 80.
As the report was adopted by the court, this part of the Cross-Claim is dismissed.

The over excavation claim

In paragraphs 7-10 of the Cross-Claim, the defendant/cross-claimant asserts that the plaintiff did not carry out the site supervision and project management of the site excavation in a proper and workmanlike manner, as the excavation of the basement level of the site exceeded the depth required causing loss to the defendant.
This aspect of the Cross-Claim was considered by the Referee in her report dated 4 September 2018: see Exhibit B paragraphs 43-61. The Referee concluded that should the court find that a clay seam was not encountered by the plaintiff, the cost of the unnecessary excavation was $4,752 and there needed to be a rectification of the over-excavation by spreading and compacting the spoil to the required level which was $1,500 giving a total sum of $6,252. If the excavation was unnecessary, it was a defect in the work performed by the plaintiff. The Referee also concluded that if a clay seam had been encountered, then the additional excavation undertaken would have been appropriate for the purposes of removal of the clay and levelling the site: Exhibit B paragraph 48.
The determination of this issue, according to the Referee, depends on a finding of fact to be made by the court as to whether or not the plaintiff encountered a clay seam at the level to which it should have excavated in ideal conditions.
As I adopted the report of the Referee, this aspect of the Cross-Claim depends on my factual findings on this issue.
In my factual findings above, I accepted and found that the site was not over excavated having regard to the under soil conditions discovered, particularly the clay seam. I accepted Mr Phillips' affidavit evidence on this issue: see paragraphs 38-39 of Mr Phillips’ affidavit sworn 13 November 2017. See also the diary entry of Mr Phillips for 11 August 2012: “Costings are very difficult at this stage as we have discovered contaminated fill and rock levels are much deeper than originally thought”.
I am therefore satisfied from the evidence and find that a clay seam was encountered in the excavation and thus the additional excavation which occurred was appropriate for the purposes of the removal of the clay and levelling the site. I accept the plaintiff’s submissions on this issue: written submissions dated 18 March 2019 paragraphs 3-10.
Accordingly, this aspect of the Cross-Claim is rejected. The defendant appears to accept this conclusion in paragraph 2 of his written submissions in reply dated 27 March 2019. In their joint report, the experts agreed that if the presence of the clay seam was established, excavation to 250mm below the surface would be correct construction and thus not defective: Referee report paragraph 47 and the expert report referred to. I note there was no conflicting factual evidence from the defendant on this issue.

The delay claim

In paragraphs 16-17 of the Cross-Claim, the defendant asserts that in breach of the agreement between the parties, the plaintiff failed to undertake the performance of its services and those of the trades which it supervised in a prompt and timely manner. It is particularised that the work should have been carried out within a period of about three months. It is pleaded that by reason of the breach by the plaintiff, the defendant has suffered loss including additional finance costs incurred over 11 months of $130,295; loss of expected rents for a period of 11 months amounting to $190,000 and additional accommodation costs over 11 months amounting to $52,426, totalling $372,721.
These claims are denied in the Defence to Cross-Claim.
The plaintiff does not seem to challenge the fact that these costs were incurred although it is denied in the Defence to Cross-Claim that the costs were incurred by reason of the alleged breach.
The Referee considered the question of delay in her report. The question addressed was whether or not the construction/excavation/supervision methodology adopted by the plaintiff/cross-defendant was the cause of any delay and, if so, to what degree. The defendant submits that the question of delay was therefore confined and did not involve the Referee considering other factual matters such as weather and Mr Leslight’s alleged failure to pay: written submissions dated 20 February 2018 paragraph 18.
In her report, the Referee rejected that there was any delay for which the plaintiff was responsible in relation to there being a disorderly site, the location of the site shed, general sequencing of tasks, excavation and delay generally. These matters were considered in detail by the Referee in paragraphs 83-131 of Exhibit B. It was noted that the plaintiff said that any delay was due to Mr Leslight’s failure to pay and to latent site conditions: paragraph 87 of the Referee's report. Overall, the Referee preferred the evidence of the plaintiff’s expert Mr Easingwood to that of the defendant's expert Mr Anderson on the various issues: see paragraphs 117-125 and 129-131.
In relation to the allegation of over excavation, the Referee concluded that even if the Court were to find Geneville caused some kind of delay, Mr Leslight had not discharged the onus to establish that either part or all of this was critical to the end date of the project: paragraph 131 of the report. This matter is dealt with in paragraphs 16-28 of the written submissions of the defendant on the Cross-Claim. See the plaintiff’s submissions dated 18 March 2019 paragraphs 17-21 and the defendant’s written submissions dated 27 March 2019 paragraph 3. Contrary to the plaintiff’s submissions, I do not read paragraph 131 of the Referee’s report as a general finding as to delay, rather one limited to the over excavation allegation by the plaintiff in the Cross-Claim or at least delays the Referee was asked to consider. See paragraphs 129-130 of the Referee’s report cf paragraphs 22-24 of the plaintiff’s 18 March 2018 submissions. I accept the defendant’s oral submissions on this point. However, I consider the plaintiff’s submission to be correct that in relation to the delay asserted in the Cross-Claim the court must be satisfied that any delay caused delay to the critical path and end date of the project.

The defendant/cross-claimant submits that the preparation of the construction program and a critical path for the project is a duty incumbent upon a project manager. It is said that the plaintiff did not undertake the preparation of such programs as it should have: written submissions paragraph 24. This allegation does not appear to have been pleaded as I have pointed out above when I considered delay issues.
It is submitted by Mr Leslight that the work undertaken was delayed by 11 months and it was due to the plaintiff's default not to any default of the defendant. Reference is made to the fact that the plaintiff in its Defence to Cross-Claim admitted paragraphs 4 and 6 of the Cross-Claim: paragraphs 4 and 6 of the Defence to Cross-Claim. In paragraph 6 of the Cross-Claim, it is pleaded that the plaintiff would carry out all supervision, project management and other building services under the agreement between the parties in a proper and workmanlike manner.
In my view and I find, the delays in the project, on the evidence, cannot be attributed to any conduct or default by the plaintiff. First, the plaintiff was never provided with any final plans or drawings by Mr Leslight which were suitable for construction purposes in relation to the proposed buildings. Secondly, a comprehensive geotechnical engineering report was never obtained by Mr Leslight from Mr Adler, geotechnical engineer. The November 2011 report was made without a proper investigation of the subsoil at the Site. The problems with the subsurface conditions at the Site later identified in August 2012, caused delays as I have found above. Mr Leslight should have obtained a further report. I have found this was his responsibility. Thirdly, there were also issues with the underpinning and support of at least one of the neighbours' properties as I have found above. This caused additional significant delays. A resolution of the issue with the neighbour took several months to occur, also as I have found above. This also was Mr Leslight’s responsibility as the owner, not Mr Phillips who was the builder and construction manager. Fourthly, there were extensive delays in Mr Leslight paying invoices. Many invoices were not paid on time.
I have made findings above in relation to delays on the Site generally, including in relation to inclement weather. These delays relate to the plaintiff’s claim under the quantum meruit. This is a different claim for delay to that in the Cross-Claim: see the last sentence in paragraph 11 of the plaintiff’s written submissions dated 27 March 2019 which I accept.
The plaintiff made extensive factual submissions on this issue.
In my view, Mr Phillips' evidence on this issue should be accepted. I found his evidence, including as to the content and preparation of Exhibit A, the delay spreadsheet, to be persuasive and I accept it. I have considered inclement weather issues in paragraphs 154 and following. The weather delays alleged which I did not find established were very limited: see the delays for 8 October 2013, 13 September 2013 and 9 September 2013. As I found in paragraph 166 above, most of the delays cross-examined on appeared to be explicable and warranted by heavy rainfalls in the period preceding the rain day claimed. Overall, I repeat my findings that, on the whole of the evidence, no delays were established which were caused by any conduct or omissions by the plaintiff to justify the allegations in the Cross-Claim. I generally accept the plaintiff’s submissions on this issue. In particular, the report of Mr Phillips provided to Mr Leslight by email on 23 September 2013 which states that the three causes of delay since commencement were neighbour issues, documentation issues and funding issues, was justified. I accept paragraph 65-71 of the plaintiff’s submissions in chief. I am not satisfied, in relation to the allegations in paragraphs 16-17 of the Cross-Claim, that the plaintiff failed to undertake the performance of its services as agreed and those of the trades which it supervised in a prompt and timely manner.
In addition, there is no evidence that prior to filing the Cross-Claim, the defendant had previously notified the plaintiff of or complained about any alleged delay. This reinforces my view that the delays in the present case were largely due to the defendant (or inclement weather) and not to the plaintiff.
Further, there is no evidence that the delay alleged was a critical delay. Even if, contrary to my findings, the plaintiff’s contractual role did extend to providing advice on sub-strata or neighbour issues, I am not satisfied on the evidence that providing the advice would have reduced the period of delay. The onus rested on the defendant to establish this on his Cross-Claim.
However, I reject the allegation of estoppel in paragraph 17 of the Defence to the Cross-Claim as in my view the defendant was entitled to rely on his expert evidence.
In paragraph 17(c) of the Defence to Cross-Claim, the plaintiff says that:

“Further that any damage or loss suffered by the Cross-Claimant arising from the alleged delay was unforeseeable and the Cross-Defendant was never aware of any damage or loss (or potential for damage or loss) of the Cross-Claimant."

The Cross-Claim is a claim for breach of contract. This appears to be an allegation that the damages claimed by the defendant are too remote within the rule in Hadley v Baxendale (1854) 156 ER 145. In my view, there is no evidence that the plaintiff through Mr Phillips knew or should have known of the defendant wishing to rent the premises or in relation to the additional accommodation costs. See Mr Phillips’ 13 November 2017 affidavit paragraphs 70 and 73. Similarly, it was only towards the end of the project that Mr Phillips became aware that a financier was involved to a significant extent. He had no knowledge of Mr Leslight’s financing costs: 13 November 2017 affidavit paragraph 69. For these reasons, although it is unnecessary for me to decide, I am not satisfied in relation to the recoverability of the amounts alleged in paragraph 17 of the Cross-Claim. In other words, such a loss was not a loss which would arise in the normal course of things from a breach of contract or was a loss which was fairly within the contemplation of both parties at the time of contract: see Statewide Developments Pty Ltd v Higgins [2011] NSWCA 35 at [33], [38]-[39] and [59]. I accept the plaintiff’s submissions on this issue. The claims are in my view too remote: see paragraph 38 of the plaintiff’s submissions dated 13 March 2019.
For the reasons which I have given, I do not consider that any of the delays alleged of 11 months were due to any conduct on the behalf of the plaintiff.
For all of the above reasons, the claims made by the defendant in the Cross-Claim are rejected.

Determination

I thank counsel for the parties for their detailed and helpful submissions. The parties should check the accuracy of my calculations.
The Statement of Claim is upheld and the Cross-Claim is rejected. For the above reasons, I make the following orders:

Judgment for the plaintiff in the Statement of Claim proceedings.

The Cross-Claim is dismissed;

The defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed;

Liberty to the parties to apply within 21 days for a variation of the order in (3) above;

The parties are to bring in agreed Short Minutes of Order reflecting these reasons and including any claim for interest within 14 days;

The exhibits are to be retained for a period of three months.

**********

Decision last updated: 10 May 2019

Medium Neutral Citation:	Geneville Constructions Pty Ltd v Leslight (No 2) [2019] NSWDC 172
Hearing dates:	27 November 2017 – 30 November 2017; 9 April 2018 – 13 April 2018; 21 May 2018 - 23 May 2018; 30 November 2018 (adoption of referee report hearing); 20 February 2019 (written submissions); 13 and 18 March 2019 (written submissions); 27 March 2019 (written submissions); 11 April 2019 (oral submissions)
Date of orders:	09 May 2019
Decision date:	09 May 2019
Jurisdiction:	Civil
Before:	Dicker SC DCJ
Decision:	(1) Judgment for the plaintiff in the Statement of Claim proceedings. (2) The Cross-Claim is dismissed; (3) The defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed; (4) Liberty to the parties to apply within 21 days for a variation of the order in (3) above; (5) The parties are to bring in agreed Short Minutes of Order reflecting these reasons and including any claim for interest within 14 days; (6) The exhibits are to be retained for a period of three months.
Catchwords:	Building and construction - absence of a formal detailed written contract between the parties – terms of alleged contract – extensive factual dispute between main witnesses on numerous issues - entitlement of plaintiff to recover under alleged contract - alternative claim for quantum meruit - extent of any entitlement of plaintiff to recover compensation - claim by the defendant client for damages for alleged defects, delays and other losses
Legislation Cited:	Evidence Act 1995 (NSW), section 161 Home Building Act 1989 (NSW), sections 7, 7A and 10 Uniform Civil Procedure Rules 2005
Cases Cited:	Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 Croucher v Cachia [2016] NSWCA 132 Cubillo v Commonwealth (No 2) [2000] FCA 1084; (2000) 103 FCR 1 at [18]-[123] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Geneville Constructions Pty Ltd v Leslight [2018] NSWDC 384 Hadley v Baxendale (1854) 156 ER 145 Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269 Kriketos v Livschitz [2009] NSWCA 96 Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa [2007] NSWSC 228 Lumbers v W Cook Builders Pty Ltd (in liquidation) (2008) 232 CLR 635; [2008] HCA 27 New South Wales Housing Authority v Diab [2015] NSWCA 133 Nichols v Earth Spirit Home Pty Ltd [2015] QCA 219 O’Connor v Leaw Pty Ltd (1997) 42 NSWLR 285 Pavey & Matthews v Paul (1987) 162 CLR 221; [1987] HCA 5 Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Proprietors of Strata Scheme 3618 v Costin Roe Consulting [2010] NSWSC 1049 Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141 Statewide Developments Pty Ltd v Higgins [2011] NSWCA 35 The Owners Strata Plan No 57164 v Yau [2017] NSWCA 341 Vimblue Pty Ltd Toweel trading as Carpenters Core Building [2009] NSWSC 494
Category:	Principal judgment
Parties:	Geneville Constructions Pty Ltd (Plaintiff) Brett Barry Leslight (Defendant)
Representation:	Counsel: J Manner (Plaintiff) J A Darvall (Defendant) Solicitors: Usher Levi (Plaintiff) Paul Mattick & Associates (Defendant)
File Number(s):	2015/00288845