Goodman v Zhao

Case [2008] NSWDC 373
CITATION: Goodman v Zhao [2008] NSWDC 373
HEARING DATE(S): 13, 14, 15, 19, 20, 21, 22, 23, 26, 28, 29, 30 May, 2 June and 7 August 2008
 
JUDGMENT DATE: 
1 October 2008
JURISDICTION: Civil jurisdiction
JUDGMENT OF: Johnstone DCJ
DECISION: 1. Verdict for the plaintiff for $157,847.30 plus interest to be agreed or assessed
2. Costs reserved
CATCHWORDS: CONSTRUCTION - competing contract documents - ascertaining the common contractual intention of the parties - allegations of defective work - statutory warranties - claim for liquidated damages for delay in completion of the works - cross-claim for works not paid for - quantum meruit
LEGISLATION CITED: Civil Procedure Act 2005: s 100
Home Building Act 1969: s 18B and s 18F
CASES CITED: Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61
Gardiner v Agricultural and Rural Finance Pty Ltd [2007] NSWCA 235 at [11] – [13]
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd
(1988) 5 BPR [97326]Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd
[2008] NSWCA 5Liebe v Molloy (1906) 4 CLR 347
Lion Nathan Australia Pty Ltd v Coopers Brewery Limited (2006) 223 ALR 560
Ormwave Pty Limited v Smith [2007] NSWCA 210 at [68]
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 at [22]
Peppers Hotel Management Pty Ltd v Hotel Capital Partners Ltd [2004] NSWCA 114 at [69]
Source and Resources Pty Ltd v Porada [2007] NSWSC 883 at [27]
The Commonwealth v Verwayen (1990) 170 CLR 394
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52
Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251
PARTIES: Marla Shoshana Goodman (Plaintiff and First Cross-Defendant)
Yan Shou Zhao (Defendant and Cross-Claimant)
Brian Goodman (Second Cross-Defendant)
FILE NUMBER(S): 976/06
COUNSEL: Ms M Dolenec (Plaintiff)
Mr R B Wilson (Defendant)
SOLICITORS: Mills Oakley (Plaintiff)
Peter Leung (Defendant)

REASONS FOR JUDGMENT

The proceedings and the issues

1. During 2000 and 2001 Mr Zhao, a licensed builder trading as ‘YSZ Building Service’ constructed a residential house for Mrs Goodman at 2 Cadigal Place, Dover Heights. It was alleged that the construction work was never fully or properly completed and that there were numerous defects that required rectification. These proceedings were commenced claiming damages for incomplete work and the cost of rectification work, together with liquidated damages for the delay in the completion of the works. The claim is for $175,628.93, plus interest (Exhibit N).

2. Mr Zhao denied liability. It was his defence that he carried out all the works agreed, and that any damage or defects related to work that was not done by him, were the result of causes other than faulty work performed by him or his sub-contractors, or arose because he completed particular works in a certain way, or used particular material and products, in accordance with specific express instructions. Mr Zhao also cross-claimed for outstanding payments he alleged are due under the contract and for additional works requested on behalf of…

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AGLC
Goodman v Zhao [2008] NSWDC 373
Case
[2008] NSWDC 373
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, the plaintiff, Goodman, brought an action against the defendant, Zhao, concerning a construction dispute. The plaintiff alleged that Zhao had failed to complete works to the required standard and had delayed completion, resulting in a claim for liquidated damages. Zhao, on the other hand, sought to recover the balance of monies owed under the contract, along with damages for the plaintiff's alleged defective work. The court was required to determine the parties' common contractual intention and assess the validity of the claims and cross-claims.

The central issue was whether the contract documents, which included plans, specifications, and a contract, represented the complete agreement between the parties. The plaintiff argued that the contract documents did not accurately reflect the parties' agreement, while the defendant maintained that the written documents were the complete and exclusive statement of the agreement. The court had to decide if the written contract documents accurately captured the parties' intentions or if there were additional terms or modifications that needed to be considered. Additionally, the court needed to assess the validity of the claims for defective work, liquidated damages for delay, and the cross-claim for outstanding payments.

The court found that the contract documents did not fully represent the parties' agreement, as there were additional oral modifications and clarifications. The court examined the conduct of the parties and the surrounding circumstances to ascertain the common intention of the parties. The court determined that the plaintiff's claims for defective work were not substantiated and dismissed the cross-claim for outstanding payments. However, the court found that the defendant had delayed the completion of the works, and the plaintiff was entitled to liquidated damages for the delay. The court calculated the quantum of the liquidated damages and awarded the plaintiff $157,847.30 plus interest. The court reserved the decision on costs.

Orders

Orders of the court

1. Verdict for the plaintiff for $157,847.30 plus interest to be agreed or assessed

2. Costs reserved

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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