Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd

[2022] VSC 373

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2019 05920

HACER GROUP PTY LTD (ACN 091 032 530)	Plaintiff
v
EURO FAÇADE TECH EXPORT SDN BHD (Malaysian Company Number 1001662-H)	Defendant

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JUDGE:	Stynes J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 December 2021 and 9 March 2022
DATE OF JUDGMENT:	30 June 2022
CASE MAY BE CITED AS:	Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd
MEDIUM NEUTRAL CITATION:	[2022] VSC 373

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DAMAGES — Defective work – Rectification without notice to contractor — Delay — Liquidated damages — Undefended proceedings — AA Shi Pty Ltd v Avbar Pty Ltd (No 5) [2010] FCA 971, applied — United Group Resources Pty Ltd v Calabro (No 5) [2011] FCA 1408, applied — Owners Corporation No.1 of PS613436T v LU Simon Builders Pty Ltd (Building and Property) [2019] VCAT 286, applied — Owners-Strata Plan No 76674 v Di Blasio Constructing Pty Ltd [2014] NSWSC 1067, applied — Turner Corporation Ltd v Austotel Pty Ltd (1994) 13 BCL 378, distinguished — J-Corp Pty Ltd v Mladenis [2009] WASCA 157, applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Lachlan Currie	KCL Law
For the Defendant	None	None

HER HONOUR:

A            Introduction

1. The plaintiff, Hacer Group Pty Ltd (Hacer), is a commercial builder that was engaged to design and construct the apartment complex known as ‘Ivanhoe Apartments’ at 443 Upper Heidelberg Road, Heidelberg Heights in the State of Victoria (Project).

2. The Project is a substantial residential complex comprising 14 storeys, 198 apartments, four retail spaces, one office space and a 297 space underground car park.

3. The exterior façade of the Project principally consists of an aluminium glazed curtain wall system comprising an aluminium frame into which prefabricated glazed panels are affixed.

4. Under a subcontract executed on 18 May 2017, Hacer engaged the defendant, Euro Façade Tech Export Sdn Bhd (EFT), to design, engineer, procure, manufacture, fabricate and supply the façade system for the Project (Subcontract).

5. Hacer claims that the works performed by EFT were defective in breach of the Subcontract.  The alleged defects fall into two categories as either design defects or manufacturing defects.  Hacer’s claim is made pursuant to a contractual indemnity provided under the Subcontract.  In short, Hacer asserts that where EFT failed to remedy any breach of the Subcontract, Hacer was entitled to take steps to remedy the breach, and all costs Hacer incurred in doing so are recoverable from EFT as a debt due to Hacer.  Hacer claims it is entitled to recover rectification costs in the sum of $2,486,603.[1]  In the alternative, Hacer claims the same sum as damages for EFT’s breaches of the Subcontract. 

   [1]Second further amended statement of claim [29] (2^nd FASOC).  All figures are exclusive of GST unless stated otherwise.

6. Hacer also claims liquidated damages under the Subcontract in the sum of $589,500.[2]  In the alternative, it claims damages in the sum of $898,162 for the actual loss and damage it incurred due to EFT’s delays in performing the Subcontract works.[3] 

   [2]2^nd FASOC [30(a)].

   [3]2^nd FASOC [30(b)].

7. Finally, Hacer claims credits for returned stillages and automated sliding doors in the sum of $65,456.  EFT admits that Hacer is entitled to these credits, but says it is entitled to set off this liability against amounts claimed in its counterclaim.

8. Accounting for amounts payable by Hacer to EFT, Hacer claims a total sum of $2,502,235 (exclusive of GST, interest and costs) calculated as follows:[4]

   [4]2^nd FASOC [39].

Item	Description	Amount
Subtotal payable to EFT
A	Subcontract sum	$3,930,000
B	Variations approved and completed by EFT	$138,470
Less
C	Amounts already paid by Hacer to EFT for works completed	$3,316,984
D	Subtotal payable to EFT (A + B — C)	$751,486
Subtotal payable to Hacer
E	Total rectification costs (E.1 + E.2 +E.3)	$2,486,603
E.1	Rectification costs in respect of which no back charge has been applied (Defect Claims 1 and 3 to 12)	$422,611
E.2	Back charges (costs in respect of which back charges were applied, including BC109 and BC113) as per Schedule 6 of the second further amended statement of claim	$1,804,514
E.3	Additional rectification costs in respect of which a partial back charge has been applied, being the actual costs of rectifying defective glazing (Defect Claim 2 of $1,484,478) less the back charges already applied (BC109 and BC113 of $1,225,000)	$259,478
F	Delay costs	$898,162
G	Credit for returned stillages and automated sliding doors	$65,456
Less
H	Retention sum	$196,500
I	Subtotal payable to Hacer (E + F + G —H)	$3,253,721
Total
J	Net amount payable by EFT to Hacer (I — D)	$2,502,235

1. Having regard to the above table, I note the following:

   (a)the quantum of the Subcontract sum is not in dispute;

   (b)there is a dispute about the quantum of the variations claimed by EFT.  These are the subject of EFT’s counterclaim;

   (c)there is no dispute about the amount paid by Hacer to EFT;

   (d)EFT disputes Hacer’s claim for rectification costs in relation to claims described in the pleadings as Defect Claims 1 to 12;

   (e)in relation to back charges previously applied by Hacer, EFT does not address them in its defence.  However, it is plain they are disputed because EFT ignores them for the purpose of calculating its counterclaim for the balance of the contract sum outstanding;

   (f)EFT disputes Hacer’s claim for delay costs; and

   (g)there is no dispute that the sum of $65,456 is to be credited to Hacer.

2. By its counterclaim, EFT claims the sum of $320,265 in relation to a number of alleged variations to the Subcontract works.[5]  If it succeeds in that counterclaim and succeeds in defending Hacer’s claims for damages for defective works and delays, then it claims to be entitled to the sum of $933,281 calculated as follows:

   [5]Defence and counterclaim [48].

Item	Description	Amount
Amount payable to EFT
A	Subcontract sum	$3,930,000
B	Variations claimed by EFT	$320,265
Less
C	Amounts already paid by Hacer to EFT for works completed	$3,316,984
D	Total payable to EFT (A + B — C)	$933,281

1. The issues that arise for determination are:

   (a)Has Hacer suffered loss and damage as a result of defective works performed by EFT that are the subject of Defect Claims 1 to 12 (as defined further below)? 

   (b)Has Hacer suffered loss and damage as a result of defective works performed by EFT that are the subject of Back Charge Claims (as defined further below)?

   (c)If the answer to (a) or (b) is yes, is Hacer entitled to damages at common law where it has not complied with contractual provisions governing the notification and rectification of defects?

   (d)Has Hacer suffered loss and damage as a consequence of delay by EFT?  If so, is Hacer limited to liquidated damages under the Subcontract, or is it entitled to damages at common law in relation to delay costs?

   (e)What sum, if any, is payable to EFT in relation to its counterclaim for variations?

B             Background

1. Hacer is a registered Australian builder that undertakes a variety of large construction projects.

2. EFT is a Malaysian company that specialises in the design, supply and installation of customised architectural façades.

3. On or around 30 September 2016, Hacer entered into a head contract with Caydon Ivanhoe Development Pty Ltd (Principal) to design and construct the Project.

4. On 18 May 2017, Hacer engaged EFT under the Subcontract to design, engineer, procure, manufacture, fabricate and supply the façade system and associated elements for the Project.  The glazing and façade system was a discrete and specialised package within the overall Project works.  Hacer is not a glazing manufacturer, so it required EFT, a specialised subcontractor, to undertake these works.

5. The Subcontract was for a fixed lump sum of $3,930,000.  

6. EFT commenced Subcontract works at around the time the Subcontract was entered into.

7. Mr Raffi Bornyan (Bornyan) was the contract administrator appointed on behalf of Hacer to oversee EFT’s performance of the glazing and façade package under the Subcontract.  Bornyan engaged in the following tasks:

   (a)confirming that the design drawings submitted by EFT complied with the corresponding architectural drawings and relevant Subcontract specifications;

   (b)confirming that the components manufactured and delivered by EFT conformed with EFT’s detailed designs and were free from defects;

   (c)corresponding with EFT if and when it failed to meet any of the milestones/dates for completion specified in the Subcontract; and

   (d)coordinating with Hacer’s project managers and other relevant employees to manage the rectification of any defects in the Subcontract works that EFT failed or refused to rectify.

8. In support of its claim, Hacer relied on:

   (a)the two witness statements of Bornyan dated 19 October 2021 (First Witness Statement) and 6 December 2021 (Second Witness Statement); and

   (b)the oral evidence of Bornyan given at trial.

C            Undefended proceedings

1. After filing its defence and counterclaim on 16 October 2020, EFT informed Hacer and the Court that it no longer had legal representation and would not participate in the trial.[6] 

   [6]Email from Stephen Matula to the Associates of Justice Nichols, 12 April 2021; Email from Directors of Euro Façade Tech Export Sdn Bhd to the Associates of Justice Stynes, 12 October 2021.

2. The trial was heard on 7 December 2021.  During the trial, Hacer sought leave to amend its pleadings to include a claim for back charges in the sum of $1,804,514 (Back Charge Claims).  Leave was granted.  Its further amended statement of claim was filed and served on 1 February 2022.[7] 

   [7]Affidavit of Jaimi-Lee Johanson filed 13 April 2022 [8].

3. The matter returned to Court for a further short hearing on 9 March 2022.  Hacer’s second further amended statement of claim (2^nd FASOC) was filed and served on 8 April 2022.[8]

   [8]Affidavit of Jaimi-Lee Johanson filed 13 April 2022 [9].

4. On 5 May 2022, EFT requested two weeks to consider the 2^nd FASOC and was granted that indulgence.

5. On 20 May 2022, EFT informed my chambers that ‘it will not take any step in this proceedings and shall leave the question of whether the Plaintiff has proven all the matters raised in the claim in the good hands of the Honorary Judge‘.[9]

   [9]Email from Euro Façade Tech Export Sdn Bhd to the Associates of Justice Stynes, 20 May 2022.

6. EFT did not appear at trial.  While it did file a defence and counterclaim to the amended statement of claim dated 4 September 2020, it tendered no evidence in support of those pleadings.  Of course, this does not prevent it from relying upon legal defences which do not depend upon facts to be proved by EFT.[10]

   [10]Liang v Chen [2020] VSC 106, [40] (Lyons J) citing Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 (Banque Commerciale).

7. In circumstances where the Court determines to proceed with the trial generally without the appearance of the defendant, the authorities suggest:[11]

   (a)the court must investigate the merits of the matter;[12]

   (b)Hacer must prove its case on the balance of probabilities in the usual way;[13]

   (c)Hacer’s relief is restricted to that claimed in its pleadings;[14]

   (d)the court may allow evidence to be tendered and affidavits to be read on behalf of the party which is present;[15] and

   (e)the court is entitled to assume the correctness of the facts claimed by Hacer in its submissions where Hacer tenders uncontroverted evidence in support of those submissions.[16]

   [11]United Group Resources Pty Ltd v Calabro (No 5) [2011] FCA 1408, [44] (McKerracher J).

   [12]A184 v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 210 ALR 543, [89] (Lander J).

   [13]TVBO Production Ltd v Australia Sky Net Pty Ltd (2009) 82 IPR 502, [15] (Foster J).

   [14]AA Shi Pty Ltd v Avbar Pty Ltd (No 5) [2010] FCA 971, [12] (Collier J) (AA Shi).

   [15]Scoway Pty Ltd v Faxon Pty Ltd [2004] FCA 249, [7]–[9] (Hely J); AA Shi (n 14) [12] (Collier J).

   [16]AA Shi (n 14) [13] (Collier J).

8. However,  the non-appearance of EFT at trial does not give Hacer free rein to amend its pleadings to raise issues of which EFT, the absent defendant, has had no notice, or to obtain relief not founded on the pleadings.[17]  As recorded above, amended pleadings were served on EFT and EFT was granted the time it requested to consider them.

D            Claims for defective work

[17]Banque Commerciale (n 10) 288 (Brennan J).

D.1         Overview

1. Hacer makes numerous claims against EFT for defective works.  At trial, it addressed twelve of those claims, identified as Defect Claims 1 to 12, separately from the 73 individual Back Charge Claims which were the subject of back charges previously applied by Hacer in response to various payment claims issued by EFT.  It is convenient to address each claim separately in turn.  I will first address Defect Claims 1 to 12, before addressing the Back Charge Claims.

D.2         Applicable legal principles

1. The following legal principles are relevant to my consideration of Hacer’s claims and are conveniently summarised in the decision of Woodward J in Owners Corporation No.1 of PS613436T v LU Simon Builders Pty Ltd (Building and Property):[18] 

   [18][2019] VCAT 286, [538] (Lacrosse).

   (a)The ‘ruling principle’ with respect to damages at common law for breach of contract is that a party who has sustained a loss is to be placed in the same situation, so far as money can do it, as if the contract had been performed.[19] 

   (b)Where a party has sustained a loss due to another’s breach of a contractual warranty, the ruling principle requires that the innocent party be put in the same position as if the warranty were true; that is, to achieve what the promisee would have received had the promise been performed.[20]

   (c)In the context of defective building work occasioning loss in breach of a contractual warranty, the measure of damages is not limited to diminution in value, but extends to the costs of rectification of the defective work so as to give the promisee the equivalent of a building which is substantially in accordance with the contract.[21]

   (d)The entitlement to damages of the party that has sustained a loss extends to those damages which arise naturally or according to the usual course from the breach of contract, or such damages as may reasonably be supposed to have been in the contemplation of the parties at the time they made the contract as a probable result of the breach.[22]

   (e)Subject to the previous principle, where an innocent party has incurred expenditures which they would not have sustained but for the breach of contract, damages for those losses are recoverable.[23]

   (f)The aggrieved party’s right to recover for damage caused to property crystallises when the property is damaged.  That party is entitled to recover its expenses reasonably incurred in connection with the cost of remediating the damage, even if those costs have not yet been incurred.[24]

   (g)The aggrieved party’s expenses in putting itself in the position in which it would be if the contract had been performed must be reasonable.  However, the test of ‘unreasonableness’ is satisfied only by exceptional circumstances.[25]

   (h)If it is found that the aggrieved party has suffered loss due to a breach of contract, it is required to mitigate its loss.  The reasonableness of actions taken by the aggrieved party to mitigate its loss is a question of fact depending on the circumstances.[26]  The other breaching party bears the onus of proving that those actions were unreasonable.[27]

   (i)An overly exacting approach should not be taken to evaluate the steps taken by a party that mitigates its loss.[28]

   [19]Ibid citing Robinson v Harman (1848) 1 Exch 850, 855 (Parke B); Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272, 286 [13] (French CJ, Gummow, Heydon, Crennan and Kiefel JJ) (Tabcorp).

   [20]Lacrosse (n 18) [538], citing Clark v Macourt (2013) 253 CLR 1, 7-8 [10]-[12] (Hayne J), 30-1 [106]-[108] (Keane J) (Clark).

   [21]Lacrosse (n 18) [538], citing Tabcorp (n 19) 287 [15]; Bellgrove v Eldridge (1954) 90 CLR 613, 617 (Dixon CJ, Webb and Taylor JJ) (Bellgrove).

   [22]Lacrosse (n 18) [538], citing Clark (n 20) 34 [119]-[120] (Keane J); European Bank Ltd v Evans (2010) 240 CLR 432, 437-8 [11]-[13] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ).

   [23]Lacrosse (n 18) [538], citing Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, 128 (Deane J) (Amann); TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd (1963) 180 CLR 130 (TC Industrial); Carr v JA Berriman Pty Ltd (1953) 89 CLR 327.

   [24]Lacrosse (n 18) [538], citing Thomas v Powercor Australia Ltd [2011] VSC 586, [34]-[54] (Forrest J); Powercor Australia Ltd v Thomas (2012) 43 VR 220.

   [25]Lacrosse (n 18) [538], citing Tabcorp (n 19) 288-90 [17]-[19]; Bellgrove (n 21) 618.

   [26]Lacrosse (n 18) [538], citing British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways of London Ltd [1912] AC 673, 688-9 (Viscount Haldane LC).

   [27]Lacrosse (n 18) [538], citing Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507.

   [28]Lacrosse (n 18) [538], citing Banco de Portugal v Waterlow [1932] AC 452, 506 (Lord Macmillan).

2. Further applicable principles include:

   (a)The aggrieved party bears the onus of proving the loss and damage it has suffered.[29]

   (b)Where the aggrieved party can reasonably prove the quantity of the loss and damage suffered, they must do so on the balance of probabilities and with as much precision as the subject matter permits.[30]

   (c)If the circumstances of loss and damage are such that the aggrieved party is unable to prove the quantity of its loss and damage, it will not be deprived of an award of damages as the court must do its best to estimate the loss and damage suffered by them fairly.[31]

   (d)Where damages are uncertain for lack of evidence, difficulties of assessment are generally resolved against the party who could or should have provided the evidence.[32]

   (e)Prima facie, the measure of damage for defective work performed in breach of contract is the cost of rectification.[33]  Both the manner of rectification and the cost of performing that rectification work must be reasonable.

   (f)In the case of building contracts, it is also generally accepted that the owner must give the builder a reasonable opportunity to rectify any defects.[34]  That obligation may be an aspect of the duty to mitigate since it may be less expensive for the builder rather than a third party to rectify the defects.

   (g)Where rectification work has been performed, the actual cost, if known, is evidence of the reasonable cost and will ordinarily provide the basis for damages.[35]

   [29]Amann (n 23) 80 (Mason CJ and Dawson J).

   [30]Ibid 153 (Gaudron J); NCON Australia Ltd v Spotlight Pty Ltd [No 5] [2012] VSC 604, [288] (Robson J) (NCON); JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237, 241 (Brooking J).

   [31]Amann (n 23) 83 (Mason CJ and Dawson J).

   [32]Adams v Morellini [2010] WASC 61, [109] (Blaxell J), quoting Grainger v Williams [2009] WASCA 60, [168]–[170] (McLure JA); NCON (n 30) [291] (Robson J).

   [33]Owners-Strata Plan No 76674 v Di Blasio Constructing Pty Ltd [2014] NSWSC 1067, [43] (Ball J) (Di Blasio).  This principle applies except to the extent that it is unreasonably to insist on rectification: see Bellgrove (n 21) 618–9 (Dixon CJ, Webb and Taylor JJ). See also Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344, 355–6 (Tullichettle LJ), 369 (Lloyd LJ), citing East Ham Corporation v Bernard Sunley & Sons Ltd [1966] AC 406, 434–5 (Lord Cohen).

   [34]Di Blasio (n 33) [44] (Ball J); Bitannia Pty Ltd v Parkline Constructions Pty Ltd (2010) 26 BCL 335 (White J). 

   [35]Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313, [19] (Meagher JA), [96]–[99] (Giles JA), citing Bellgrove (n 21) 618–20; Payce Communities Pty Ltd v Canterbury-Bankstown Council [2021] NSWSC 331, [192]–[193] (Stevenson J).

1. Relevantly for this proceeding, EFT must prove that Hacer has acted unreasonably in relation to Hacer undertaking defect rectification works.  ‘[I]t is not for [Hacer] to prove that it acted reasonably’.[36]

D.3         Is Hacer entitled to damages where it has not complied with contractual provisions governing the notification and rectification of defects?

[36]Di Blasio (n 33) [46] (Ball J), citing TC Industrial (n 23) 138 (Kitto, Windeyer and Owen JJ); Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653, 673 (Brennan J).

1. The Subcontract included terms allowing Hacer to give notice to EFT of defects, or to direct EFT to rectify defects, and thereby providing EFT with an opportunity to rectify them.  If EFT failed to do so, then Hacer was entitled to engage others to execute the work required and recover the costs incurred as a debt due to Hacer by EFT.[37] 

   [37]Subcontract cls 6(e), 31(b).

2. Specifically, clause 6(e) provides:

   [s]hould Hacer consider that the quality of work or materials is not in accordance with the requirements of this Subcontract then Hacer may Direct the Subcontractor to remove, dismantle, re-execute, replace and/or rebuild any such work or materials or to make good any defect and the Subcontractor shall, at its own cost, comply with any such Directions.  If the Subcontractor fails to comply with a Direction issued by Hacer pursuant to this clause 6(e) within 48 hours of receipt of such a Direction, Hacer may have that work carried out by other persons and the costs incurred by Hacer in doing so shall be a debt due from the Subcontractor to Hacer.

3. Similarly, clause 31(b) provides:

   [i]f the Subcontractor fails to remedy any breach of the Subcontract within 3 Business Days after notice in writing specifying the breach has been given by Hacer to the Subcontractor, or falls within that time to satisfy Hacer’s Representative as to its proposed course of action for remedying the breach, or if the Subcontractor fails to comply with any such course of action approved in writing by Hacer’s Representative, Hacer may:

   (i)take out of the hands of the Subcontractor the whole or part of the work remaining to be completed;

   (ii)terminate the Subcontract or

   (iii)take such other action as it deems fit to remedy the breach,

   and all costs and expenses incurred by Hacer in doing so shall be payable by the Subcontractor as a debt due by the Subcontractor to Hacer, which may (without limitation) be deducted from the Subcontract Sum.

4. Hacer relies on these provisions to allege that all the costs incurred by Hacer in rectifying EFT’s defective works are payable by EFT as a debt due to Hacer.

5. Alternatively Hacer alleges it is entitled to recover those costs from EFT as damages for breach of the Subcontract.

6. In relation to some of the defect claims, EFT has pleaded that it never received from Hacer a notice of the defect, or a direction to rectify the defect, and was thereby denied the opportunity to remedy the alleged defect.  EFT further pleads that as a consequence, Hacer is only entitled to recover the cost that EFT would have incurred to remedy the alleged defect had it been given the opportunity to do so.

7. This defence raises for my consideration the legal question of whether or not the Subcontract, properly construed, is tantamount to a code outside of which there is no entitlement on the part of Hacer to recover damages for defective work.  This was an issue addressed by Cole J in Turner Corporation Ltd v Austotel Pty Ltd (Turner).[38]

   [38](1994) 13 BCL 378 (Turner).

8. In Turner, a proprietor engaged others to finish incomplete works and rectify defects performed by the original builder.  The proprietor then sought to recover these costs against the builder pursuant to its common law right.  However, the proprietor had not complied with the procedural steps and notice provisions in the applicable contract.  Those provisions required, amongst other things, that a notice of defects be given to the builder to thereby provide the builder with an opportunity to rectify them.  If the builder failed to do so, then the proprietor could engage others to execute the work required, and recover the costs incurred as a debt due by the builder to the proprietor. 

9. Cole J held that the contract provided a code which established the parties' rights and obligations to the exclusion of a common law right to damages.  His Honour stated:[39]

   [i]t follows, in my view, that the contract does provide a code which establishes the rights, obligations and liabilities of the parties, and the mechanisms by which completion of the Works is to be achieved. In summary, the Builder is given possession of the site for the purpose of and with the obligation to bring the Works to Practical Completion by the Date for Practical Completion. The Proprietor has no general right to bring others onto the site to perform or complete portions of the Works. However, if prior to Practical Completion there appears defects or omissions in the Works, the Architect may give to the Builder a notice to rectify those defects or omissions within a reasonable time. If the Builder fails to rectify or complete the defects or omissions as so directed by the Architect, the Proprietor by contractual right, after a further notice from the Architect to the Builder, may engage others to enter upon the site and rectify or complete those defects or omissions.

   Once Practical Completion is achieved under the contract, the defects liability period commences and the Builder surrenders possession of the site back to the Proprietor. Although the Proprietor then has possession of the site, the Builder retains the right to enter upon the site to permit it to rectify notified defects, and it has the obligation to rectify such notified defects within a reasonable time as directed by the Architect, and in any event not later than a reasonable time after the expiration of the defects liability period. If it fails to do so, the Proprietor may, after a further notice from the Architect, have the notified defective or omitted works performed by others at the Builder's costs. Alternatively, by agreement, the omitted or defective works may be removed from the contract works with an appropriate monetary adjustment to the contract sum. A third alternative is that the Proprietor may be able to rely upon the default of the Builder to rectify the defective or incomplete works as a ground for terminating its employment under the contract and thereafter having the works completed by others at the Builder's cost pursuant to cl 12. However, if none of these three contractual powers is exercised, the Builder may become entitled to a final certificate which will result in it being entitled to plead completion of performance of the Works ”in accordance with the terms of the agreement to the reasonable satisfaction of the Architect”.

   There is, in my view, no room for a ”wider common law right” in the Proprietor to treat non compliance with the contractual obligation by the Builder as a separate basis for claiming damages being the cost of having a third party rectify or complete defective or omitted works. That is because the contract specifies and confers upon the Proprietor its rights flowing from such breach; that is, the parties have, by contract, agreed upon the consequences to each of the Proprietor and the Builder, both as to rights and powers flowing from and the consequences of, such breach. The word “may” is used because there are alternative contractual rights available to the Proprietor.

   It also follows, in my view, that the Proprietor has no entitlement to recover the cost of work performed by others at the request of the Proprietor unless prior to such work being performed the Architect has given the notice required by cl 5.06.01 prior to the Date for Practical Completion, or pursuant to cl 5.06.01 as incorporated by cl 6.11.05 after the Date for Practical Completion. 

   [39]Ibid 394–5.

10. Notwithstanding the similarity in the form and purpose of clauses 6(e) and 31(b) of the Subcontract to those identified in Turner, in my view, the decision of Turner should be distinguished.

11. The Subcontract also contains broad indemnities that are not qualified by reference to the defect rectification provisions.  For example, the penultimate paragraph of cl 3.1 states:[40] 

    [EFT] indemnifies Hacer against any and all costs, expenses, loss or damage of whatsoever nature that is suffered or incurred by Hacer arising out of, in relation to or in any way connected with any breach by [EFT] of this Subcontract or the warranties, undertakings or obligations of [EFT] under this Subcontract. 

    [40]See also Subcontract cl 31(a).

12. In light of such indemnity, and absent clear words excluding EFT’s liability in damages, a more harmonious construction of the Subcontract as a whole is one that permits Hacer to rely on its common law right to damages even where it has not complied with the contractual provisions governing the notification and rectification of defects. 

13. I am mindful of the concern expressed by Cole J as follows:[41]

    It would be a curious circumstance if the Builder could, by following the contractual provisions, recover as a contractual right costs paid to others, yet could recover the same sum after disregarding contractual rights as damages for breach of contract. Such a construction of the contract would put at nought the contractual provisions.

    [41]Turner (n 38) 392.

14. However, that concern may be addressed by applying the principles of mitigation of loss.  In my view, where Hacer has failed to give EFT notice of a defect or otherwise failed to provide EFT with an opportunity to rectify a defect, Hacer should not be able to recover more in damages than the amount that it would have cost EFT to attend to the rectification.[42] 

D.4         Has Hacer suffered loss and damage as a result of defective works performed by EFT that are the subject of Defect Claims 1 to 12

[42]Mul v Hutton Construction Ltd [2014] EWHC 1797 (TCC), [25] (Akenhead J); Owners Strata Plan 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067, [44] (Ball J).

1. Defect Claims 1 to 12 relate to either:

   (a)defective designs — being designs and detailed drawings created by EFT that failed to comply with the corresponding architectural drawings or specifications in the Subcontract; or

   (b)manufacturing defects — being components of work fabricated by EFT that failed to comply with EFT’s own detailed designs and/or were delivered to Hacer with missing or broken elements.

2. In summary, Hacer claims $2,007,206 arising from the following claims:[43] 

   [43]Email from Jaimi Johanson to the Associates of Justice Stynes, 8 April 2022. The email stated ‘The total amount of Defect Claims 1-12 is $2,007,206.  The figure of $1,970,089 at PCS [16] is incorrect’.

   (a)Defect Claim 1: Window panel defect necessitating concrete cutting — $2,222;

   (b)Defect Claim 2: Glazing design and manufacturer defects — $1,484,478;

   (c)Defect Claim 3: Design defects necessitating steel works — $4,300;

   (d)Defect Claim 4: Additional insulation and Versilux lining — $25,150;

   (e)Defect Claim 5: Fin defects requiring extra support brackets— $45,000;

   (f)Defect Claim 6: Angle trims and flashings — $167,298;

   (g)Defect Claim 7: Defects necessitating Level 14 fin extension — $37,117;

   (h)Defect Claim 8: Various window and fin defects — $20,272;

   (i)Defect Claim 9: Various manufacturer defects — $3,825;

   (j)Defect Claim 10: Cleaning of fins due to residual cutting oil — $3,714;

   (k)Defect Claim 11: Manufacturer defects regarding timber fins — $83,830;

   (l)Defect Claim 12: Level 14 M1 fins — $150,000.

3. The particulars of each Defect Claim are set out in Schedules 1 to 4 of the 2^nd FASOC. 

4. Bornyan gives evidence in support of each Defect Claim in his Second Witness Statement from paragraphs 22 to 78.

5. Each Defect Claim is addressed in turn below.

D.4.1      Defect Claim 1

1. Under the Subcontract, EFT was obliged to design and supply the window panels (frames and glass) in the ground floor gym on the south west side of the Project in accordance with Architectural Drawing A2.05.[44]

   [44]Subcontract cls 3.1–2.

2. Architectural Drawing A2.05 specified that due to a step in the height of the slab, three of the window panels were required to be 300 mm smaller than the adjacent panels.

3. In breach of the Subcontract:

   (a)EFT’s detailed design (specifically EFT Drawing No IVH020-GWW-113-IFC-A) failed to account for the step in the slab;[45]

   (b)the three window panels supplied by EFT for use in the Ground Floor gym did not comply with Architectural Drawing 2.05 because they were 300 mm too long and did not fit in their designated place.[46]

   [45]Bornyan’s First Witness Statement [24]; Updated Court Book 1213 (Court Book). All references to the Court Book are to the PDF page rather than the numerated page.

   [46]Bornyan’s First Witness Statement [23].

4. Bornyan gave evidence, and in the absence of any contradictory evidence I accept, that as a consequence of these breaches:

   (a)Hacer engaged Next Level Cutting to undertake rectification works by cutting the slab to allow for the oversized panels to fit;[47]

   (b)Next Level Cutting issued an invoice for this work in the sum of $5,280 but agreed with Hacer to reduce this invoice to $4,800;

   (c)by its Payment Schedule 10 dated 23 March 2018, Hacer applied back charge BC042 to deduct $2,578 from EFT’s payment claim to partially account for rectification costs.

   [47]Bornyan’s First Witness Statement [25].

5. By its defence, EFT alleges that Hacer had erroneously referred to Architectural Drawing A1.08 and otherwise pleads a bare denial.  Bornyan corrected the reference to the Architectural Drawing.  He gave evidence and I accept that the relevant drawing is A2.05.[48] 

   [48]Transcript of Proceedings, Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd (Supreme Court of Victoria, Stynes J, 7 December 2021) 28.25–7 (Trial Transcript).

6. Based on the evidence before me, I am satisfied that:

   (a)EFT breached its obligations under the Subcontract as described above;

   (b)the manner of rectification and the costs incurred were reasonable; and

   (c)Hacer has incurred loss and damage as a result of the breach in the sum of $4,800, being the total cost to Hacer of the rectification works.

7. Hacer did not plead the material facts necessary to support its allegation that it was entitled to this sum as a debt due from EFT. 

8. However, I am satisfied that EFT is liable to Hacer for damages in the sum of $4,800 in relation to these defective works. 

D.4.2      Defect Claim 2

1. Pursuant to the Subcontract, EFT was obliged to perform and complete the Subcontract works in accordance with the requirements of the Subcontract so that the works were fit for their intended purpose.[49]

   [49]Subcontract cls 3.1(k), 3.2, 3,4.

2. Hacer alleges that EFT breached this obligation in the Subcontract by supplying 247 prefabricated panels that were defective. 

3. The panels the subject of the claim are identified in a table exhibited to Bornyan’s Second Witness Statement.[50]  By that table, Bornyan identifies:[51]

   (a)each panel the subject of the claim;

   (b)the nature of the defect affecting each panel; and

   (c)the location in the Court Book of a photograph depicting the defect.

   [50]Court Book (n 45) 4183.

   [51]Ibid.

4. Bornyan explained that he was involved in identifying the 247 panels.  It was a process undertaken with a representative of EFT, Mr Tony Barbieri.  Bornyan and Barbieri spent a day on site on 16 May 2018 taking photographs of every elevation and each used a pair of binoculars to identify all of the issues with the façade.

5. By his Second Witness Statement and during the hearing, Bornyan gave evidence in relation to the defective panels by reference to the following five subcategories of defect:

   (a)incorrect slab reduced levels;

   (b)incorrect modular sizing — design defects;

   (c)incorrect modular sizing — manufacturing defects;

   (d)missing and broken glass — manufacturing defects; and

   (e)defective glass — manufacturing defects.

D.4.2.1     Incorrect slab reduced levels 

1. Bornyan explained that the façade system designed and supplied by EFT was required to be affixed on concrete slabs, each of which was detailed in the concrete slab architectural drawings A.213 and A.214.[52]

   [52]Ibid 1549–50.

2. On 11 September 2017, Hacer sent EFT an Aconex communication confirming that the façade system was to be prepared in accordance with those two drawings.[53]

   [53]Ibid 1551–2.

3. Despite this instruction, 34 prefabricated panels designed and supplied by EFT  failed to comply with the requirements of those drawings, specifically the slab reduced levels.  In short, the panels supplied were the wrong size.

4. Bornyan described the defect in more detail by reference to photographs.[54]  The photographs depict the defective panels in place after they had been installed. 

   [54]Ibid 1335–6.

5. The panels comprise both a vision glass and a spandrel glass section.  The spandrel glass is designed to cover the sections of the slab that would otherwise show through vision glass.  Behind the spandrel glass is a powder coated back pan and insulation.   The spandrel glass is a 6 mm clear glass which can be procured locally.

6. The panels were put in place following the removal of the spandrel section.  The photographs depict a narrow gap above the vision glass where the spandrel section should be.  

7. To rectify this defect, Hacer had to cut down each spandrel section, reuse back pans, infill the spandrel section with insulation, and reinstall the powder coated back panel.  That work was able to be done internally.  Then from outside of the building, Hacer applied the external surface. 

8. These rectification works were undertaken by P&M Façade Systems Pty Ltd (P&M Façade) and Matthews Façade Installations Pty Ltd (MFI).

D.4.2.2     Incorrect modular sizing – design defects

1. Bornyan explained that there were 27 panels on Level 12 that, as designed by EFT, had the wrong spandrel heights.  He alleged that EFT had designed the panels by reference to the wrong slab reduced levels.  They needed to be cut down and then reglazed on site.  He identified the panels affected by this defect by reference to a photograph and to his table [55]

   [55]Ibid 1383; 4202–3.

2. He provided further details of the defect by reference to architectural drawing A4.33,[56] and correspondence between Hacer and EFT representatives (Ted Graban and Stephen Matula).[57]  Attached to the correspondence is EFT’s drawing labelled MYE020-ACW-527 Rev 4.[58]  That drawing reveals EFT’s design was based on a panel 3,300 mm high between Level 12 and Level 13.  However, that measurement should have been only 3,000 mm.

   [56]Ibid 1239.

   [57]Ibid 1305–6.

   [58]Ibid 1311.

3. As a consequence of this design error, the panels made by EFT were 300 mm too high and the spandrel glass had to be reduced in order to properly install the panels. 

4. P&M Façade and MFI undertook the rectification works to correct this defect.

D.4.2.3     Incorrect modular sizing – manufacturing defects

1. Bornyan explained that 61 panels supplied by EFT were designed correctly but were not manufactured in accordance with that design.  Again, the panels supplied were of incorrect size and did not fit in place.

2. Bornyan gave evidence about this defect by reference to the drawing on page 1232 of the Court Book, also attached to the email between the parties dated 26 March 2018.[59]  He stated that EFT had made errors in relation to panels on levels 11 and 12.  Some panels could be swapped around with some modification before they were installed.  The necessary modifications included modifying mullions, spandrels, and the vision glass in some instances.

   [59]Ibid 1305.

1. P&M Façade and MFI undertook these rectification works.

D.4.2.4     Missing and broken glass – manufacturing defects

1. Bornyan explained that EFT supplied a total of 170 panels with missing or broken glass.[60]  To enable construction to continue internally pending the arrival of replacement glass, plywood was installed on the external face of the façade to create a weather and safety barrier.[61]  In relation to some panels, it was just the outer skin of glass that was broken and therefore the inner skin continued to provide a barrier.   

   [60]See, eg, ibid 1399.

   [61]Ibid 1420.

2. Rectification works took place once the new double glazed glass units arrived.  These were then installed in various ways depending on their location, and required a crawler crane on the roof, a truck boom from Upper Heidelberg Road, abseilers and crawler booms from level 6.     

D.4.2.5     Defective glass – manufacturing defects

1. Bornyan gave evidence by his First Witness Statement that prefabricated panels supplied by EFT in apartments 405, 713 and 413 contained defective glass.  He said the glass in apartments 405 and 413 had defective laminate.  The glass in the sliding door of apartment 713 was delivered with a significant black mark.[62]

D.4.2.6     Rectification works

[62]Ibid 341–3.

1. By his First Witness Statement, Bornyan gave evidence that the following subcontractors undertook the rectification of the 247 panels:[63]

   [63]Ibid 343; 2^nd FASOC sch 3.

   (a)Insight Fixing;

   (b)P&M Façade;

   (c)Quantum Comms;

   (d)Wayne’s High Access;

   (e)Westgarth Glass;

   (f)All Systems Scaffolding;

   (g)MFI;

   (h)JA & Son;

   (i)Preston Hire;

   (j)Alfasi Hire;

   (k)Sergi Cranes;

   (l)CSF Façade;

   (m)Kennards;

   (n)Atlas Transport;

   (o)Bluestar;

   (p)Viridian;

   (q)Donnelly & Sons; and

   (r)Cranmore Carpentry.

2. Bornyan compiled a list of invoices issued by these subcontractors to Hacer with respect to each defect claim.  To determine which invoices related to the various defect claims,  he reviewed day dockets attached to the invoices signed off by either the site manager, the site foreman responsible for the works, or in some instances, signed off by him. 

3. The invoices are listed in Schedule 3 of the 2^nd FASOC.  On the morning of the hearing, Hacer filed a schedule of invoices applicable to each Defect Claim.  In relation to each defect claim, it identifies:

   (a)the relevant defect claim;

   (b)the subcontractor that issued the invoice;

   (c)invoice numbers;

   (d)description of the works done;

   (e)the total invoice amount;

   (f)the amount claimed in relation to the defect claim; and

   (g)the location of the invoice in Bornyan’s First Witness Statement.

4. Also on the morning of the hearing, Hacer filed additional invoices issued by Scope Safety Systems Pty Ltd.  Bornyan gave evidence that these invoices form part of the collection relating to rectification works associated with Defect Claim 2. 

5. In total, Hacer claims rectification costs of $977,589.59 in relation to Defect Claim 2.  However, I note that there seems to be a calculation error.  The sum of the invoices relied upon is only $877,589.59.

6. Further, Hacer has overclaimed the sum of $1,260 by erroneously including a duplicate invoice numbered 000530 from Donnelly & Sons.  Accordingly, the correct calculation of its claimed rectification costs is $876,329.59.

7. In addition to these rectification costs, Bornyan gave evidence that Hacer was required to provide supervision and labour for the rectification work regarding the 247 defective panels.  He stated that 16 Hacer employees (including him) spent eight weeks attending to the rectification works at a total cost to Hacer of $508,000.  The particulars of that sum are set out in Schedule 4 of the 2^nd FASOC.  That Schedule sets out:

   (a)the name of each employee;

   (b)their position;

   (c)the duration of their involvement in the rectification works;

   (d)their weekly rate; and

   (e)the loss and damage claimed.

8. In summary, Hacer has tendered evidence supporting the proposition that as a result of glazing and manufacturing defects, it has suffered loss and damage in the sum of $1,384,329.59.

9. EFT raises the following matters by way of its defence, although no evidence has been tendered in support of them:

   (a)the drawings relied upon by Hacer did not form part of the Subcontract and are not listed in Schedule L.[64]  I find that this defence is without merit as all of the architectural drawings relied on are identified in Schedule L;

   (b)Hacer failed to identify which of the prefabricated panels were not fit for purpose.  I find that this defence is without merit.  Hacer identified all of the defective panels in Schedule 2 of the 2^nd FASOC and in Schedule 2 of the amended statement of claim;

   (c)the general arrangement plans contained errors, and parts of the concrete structure at the Project site were incorrectly built which required modifications to the prefabricated panels at the site.  EFT failed to provide particulars or supporting evidence in support of these allegations, and therefore I have not had regard to them;

   (d)EFT acknowledged to Hacer that it was necessary to undertake reglazing across certain sections of the Project and that it would pay for such works to be carried out.  EFT further alleges that Hacer refused EFT’s offer on 14 May 2018 from Tony Barbieri to rectify the non-conforming glass, and remedied the non-conforming glass at its own cost.  The alleged offer was exhibited to Bornyan’s First Witness Statement.[65]  Absent further evidence from EFT, I am not satisfied that EFT offered to rectify non-conforming glass at its own cost.  There is no such offer contained in the correspondence from Mr Barbieri; and

   (e)EFT was denied the opportunity to remedy any defects during the defects liability period or at all such that, if EFT is liable to Hacer, then Hacer is only entitled to recover an amount that it would have cost EFT to remedy the alleged defects had EFT been given the opportunity to do so.  In the absence of evidence supporting this allegation and of what it would have cost EFT to remedy the alleged defects, this defence is without merit.

   [64]The relevant drawings relied on in Defect Claim 2 include A1.30-B, A1.31-A, A1.32-A, A1.33-A, A1.34-A, A1.35-A, A1.36-A, A1.37-A, A4.00-A, A4.05-A, A4.06-A, A4.10-A, A4.15-A, A4.16-A, A4.17-A, A4.20-A, A4.21-A, A4.22-A, A4.23-A. A4.25-A, A4.26-A, A4.27-A, A4.30-A, A4.31-A, A4.32-A, A4.33-A, A4.40-A, A7.01-A, A7.02-A, A7.03-A, A7.04-A, A7.05-A, A7.06-A, A7.07-A, A7.10-A, A7.11-A, A7.20-A, A7.21-A, A7.22-A, A7.23-A, A7.24-A, A7.25-A, A7.26-A, A7.27-A, A7.28-A, A7.30-A, A7.31-A, A7.32-A, A7.33-A, A7.34-A, A7.35-A, A7.36-A, and A7.40-A.

   [65]Court Book (n 45) 1318–20.

10. I am therefore satisfied based on the evidence before me that:

    (a)EFT breached the Subcontract by designing and supplying 247 prefabricated panels that did not comply with the requirements of the Subcontract;

    (b)in the absence of any evidence to the contrary, the manner of rectification and the costs incurred by Hacer in attending to the rectification were reasonable;

    (c)Hacer has incurred loss and damage as a result of the breach in the sum of $1,384,329.59; and

    (d)Hacer directed EFT to rectify the defective works and that EFT failed to do so.

11. Hacer applied two back charges (BC109 and BC113) in the total sum of $1,225,000 against the cost of rectifying the works the subject of Defect Claim 2.[66]  These back charges were an estimate of the total costs Hacer anticipated it would incur.  The actual cost of rectifying these defective works was $1,384,329.59.  

    [66]Plaintiff’s closing submissions [37]–[38].

12. I am satisfied that Hacer is entitled to this sum as a debt due from EFT.

13. Alternatively, EFT is liable to Hacer for this sum as damages in relation to these defective works.

D.4.3      Defect Claim 3

1. Hacer alleges, and Bornyan gave evidence, that:

   (a)EFT was required to design the façade system on levels 12 and 14;

   (b)EFT’s design for the level 12 and 14 panels failed to achieve the requisite structural integrity because:

   (i)the level 12 secondary steel supports did not line up with the curtain wall mullions, such that the panels were insufficiently supported;

   (ii)the stacked panels on the east and west sides of level 14 had insufficient structural support;

   (c)on 19 April 2018, Bornyan emailed EFT with an instruction to rectify these defects.[67]  Despite confirming in writing on 26 April 2018 that additional steel supports were required, EFT did not rectify these defects; and

   (d)Hacer engaged another subcontractor, Apex Welding & Steel Fabrication Pty Ltd, to supply the additional steel at the cost of $4,300.[68]

   [67]Court Book (n 45) 1938.

   [68]Ibid 1940–1.

2. While EFT has not admitted liability, it did not raise a defence to this claim.  Instead, it pleaded an entitlement to set off any liability in respect of this claim against amounts claimed in its counterclaim.

3. I am satisfied based on the evidence before me that:

   (a)EFT breached the Subcontract by designing and supplying panels on levels 12 and 14 that had insufficient structural support;

   (b)the manner of rectification and the costs incurred by Hacer in attending to the rectification works were reasonable;

   (c)Hacer has incurred loss and damage as a result of this breach in the sum of $4,300; and

   (d)Hacer directed EFT to rectify the defective works and that EFT failed to do so.

4. I am satisfied that Hacer is entitled to this sum as a debt due from EFT.

5. Alternatively, EFT is liable to Hacer for damages in the sum of $4,300 in relation to these defective works.

D.4.4      Defect Claim 4

1. Hacer alleges, and Bornyan gave evidence, that:

   (a)the Subcontract works required that the glazing systems designed and supplied by EFT throughout the project would have a 5 Star Energy Rating.  In support of that allegation, Hacer relies on Specification 20452ENRAT-Preliminary House Energy Rating Report;

   (b)consulting engineers, Simpson Kotzman Pty Ltd, conducted a preliminary energy rating assessment for the Project in August 2017 (SK Report).  Simpson Kotzman found that the glass sections and combined thermal values of EFT’s glazing systems designed and supplied for use in 17 apartments failed to achieve a 5 Star Energy Rating;[69]

   (c)to rectify this defect, Hacer needed to engage Donnelly & Sons to install additional insulation and Versilux lining in the ceilings of the 17 apartments; and

   (d)the cost of this rectification work totalled $25,150.  In support of this sum, Hacer relies on invoices issued by Donnelly & Sons, which Bornyan reviewed to identify the amounts in the invoices that related to this defect.

   [69]Ibid 1942–54.

2. EFT raises the following matters by way of its defence:

   (a)the Subcontract included an earlier version of the energy rating report that included various options and requirements to achieve a 5 Star Energy Rating.  EFT did not tender any evidence in support of this defence and therefore I have not had regard to it;

   (b)insufficient particulars of the claim were provided such that the claim is embarrassing and should be struck out.  This is not a substantive defence to Hacer’s claim.  In any event, I am satisfied that sufficient particulars of the claim have been provided; and

   (c)EFT never received a direction from Hacer to undertake rectification works and was thereby denied the opportunity to remedy the defective glazing system.  EFT further pleaded that as a consequence, Hacer is only entitled to recover the cost that EFT would have incurred to remedy the alleged defects had it been given the opportunity to do so.

3. I am satisfied based on the evidence before me that:

   (a)EFT breached the Subcontract by designing and supplying glazing systems for use in 17 apartments which failed to achieve a  5 Star Energy Rating;

   (b)the manner of rectification and costs incurred by Hacer in attending to the rectification was reasonable;

   (c)Hacer has incurred loss and damage as a result of the breach in the sum of $25,150;

   (d)Hacer’s failure to give any notice of defect to EFT does not operate to exclude Hacer’s entitlement to common law damages;[70] and

   (e)there is no evidence to suggest that EFT could have attended to the rectification of the work for any less than the costs incurred by Hacer.

   [70]See section D.3 above.

4. Accordingly, EFT is liable to Hacer for damages in the sum of $25,150 in relation to these defective works.

D.4.5      Defect Claim 5

1. Hacer alleges, and Bornyan gave evidence, that:

   (a)pursuant to the Subcontract, EFT was obliged to design and supply architectural fins on the south west elevation between the Ground Floor and Level 1.  This obligation is documented in item 5 (‘Scope of Works’) in Schedule L of the Subcontract;

   (b)in breach of the Subcontract, the architectural fins as designed by EFT were not adequately supported;

   (c)Hacer notified EFT of this defect via Payment Schedule 9 dated 22 February 2018.[71]  I note that the alleged notification comprises a line in a table attached to the Payment Schedule titled ‘Analysis of Payment for Variations’.  Relevantly, in a column titled ‘Description of Variation’ it states ‘Apex/EFT – Fin Support brackets to ground floor ($45,000)’;

   (d)to rectify this defect Hacer:

   (i)obtained client approval to install additional structural steel; and

   (ii)engaged Apex Welding & Steel Fabrication Pty Ltd (Apex Welding) to supply and install additional structural steel to ensure the architectural fins were structurally sound; and

   (e)the cost of the rectification works was $45,000.  The following Apex Welding invoices supported this sum:

   (i)Inv 7605 which claimed $4,500;[72] and

   (ii)Inv 7662 which claimed $40,500.[73]

   [71]Court Book (n 45) 1970.

   [72]Ibid 2000.

   [73]Ibid 2002.

2. EFT raises the following matters by way of its defence:

   (a)Hacer approved all drawings and designs prepared by EFT prior to the delivery of the façade system to the site.  This defence is without merit.  No evidence was tendered in support of it and further, this defence ignores EFT’s contractual obligation under cl 3.4(b)(vii).  Clause 3.4(b)(vii) provides that:

   …the Subcontractor assumes all risk and sole responsibility with respect to the Drawings, Specifications and Scope of Works, notwithstanding any review and/or approval of any such Drawings, specification and Scope of Works by or on behalf of Hacer or the Principal or an Authority;

   (b)the drawings relied upon by Hacer did not form part of the Subcontract.  On the contrary, the architectural drawings relied on by Hacer, as set out in Schedule 1 to the 2^nd FASOC, are listed in Schedule L of the Subcontract;

   (c)EFT was not adequately notified of these defects because the relevant Payment Schedule did not constitute a direction in accordance with the Subcontract.  In my view, the alleged notification by a line item in a variation table attached to a payment schedule was not adequate notification of the alleged defects.  However, even though Hacer failed to provide adequate notification, such a failure does not operate to prevent Hacer from claiming common law damages in relation to defective works;[74] and

   (d)Hacer is only entitled to recover an amount it would have cost EFT to remedy the alleged defects had it been given the opportunity to do so.  In the absence of evidence of what it would have cost EFT to rectify the alleged defects, this defence is without merit.

   [74]See section D.3 above.

3. I am satisfied based on the evidence before me that:

   (a)EFT breached the Subcontract.  Its design of the architectural fins on the southwest elevation between the Ground Floor and Level 1 was not fit for purpose;

   (b)the manner of rectification and costs incurred by Hacer in attending to the rectification was reasonable;

   (c)Hacer has incurred loss and damage as a result of the breach in the sum of $45,000;

   (d)Hacer’s failure to give any notice of the defect to EFT does not operate to exclude its entitlement to common law damages; and

   (e)there is no evidence to suggest that EFT could have attended to the rectification of the work for any less than the costs incurred by Hacer.

4. EFT is liable to Hacer for damages in the sum of $45,000 in relation to these defective works.

D.4.6      Defect Claim 6

1. Hacer alleges that:

   (a)pursuant to the Subcontract, EFT was obliged to design and supply a complete prefabricated façade system that was fit for purpose.  This obligation is documented in cls 3.1(k), 3.4(b)(iii) and 3.4(b)(vii), and in item 5 (‘Scope of Works’) in Schedule L of the Subcontract;[75]

   (b)in breach of its design obligations, EFT's detailed designs for the window panels and façade components located in apartments 808, 809, 1105, 1107, 1114, 1201, 1202, 1303, 1304, 1305, and the level 12 hallways and boom area of the north east corner of the building, were not fit for the purpose for which they were required because:

   (i)they did not fit within the clear opening where they were required to be installed; and

   (ii)the angle trims and flashings specified were insufficient to make the system weather tight.

   [75]Court Book (n 45) 1184.

2. Bornyan gave evidence in support of the existence of the defects by his First Witness Statement.  He explained:

   (a)by reference to EFT’s drawing MYE020-ACW-209 Rev 2,[76]  EFT did not supply the flashing pieces required to affix the curtain wall to the concrete structure.  The relevant part of the drawing was highlighted in yellow on page 2004 of the Court Book.  Bornyan gave evidence that to rectify this defect, it was necessary for Hacer to pre-fabricate a specialist aluminium piece.  Hacer engaged Burelli Roofing Pty Ltd to perform the rectification works including measuring for, manufacturing and installing the missing aluminium element;

   (b)further, due to the complexity of the shape of the building, the widths and heights of windows on the lower levels had to be varied.  In an effort to rationalise the variety of panels required, EFT employed an installation system depicted in the drawings that allowed the same sized glass to be accommodated in different sized spaces.[77]  In short, depending on the size of the space to be filled, more or less aluminium was exposed.  Bornyan described it as an adjustable sub jamb.  However, although the installation system was theoretically suitable, it could not be installed.  EFT then attempted to modify the installation system.  The modified installation system allowed the glass to be installed, but some areas required caulking.  The final architectural finish was not acceptable.  The only way to rectify this defect was to install a powder coated element to cover the gap; and

   (c)further, EFT’s design of the window wall on level 5 resulted in uneven gaps internally.  These required the installation of a powder coated element to cover the gap to obtain a satisfactory finish.

   [76]Ibid 2004.

   [77]Ibid 2005–6.

3. Bornyan gave evidence that he had discussed this defect with EFT, that EFT did not attend to the rectification, and therefore, Hacer engaged Burelli Roofing Pty Ltd (Burelli) to undertake the rectification works.  I note that it is also apparent from correspondence between Hacer and Burelli that EFT was copied into their correspondence.[78]  Bornyan explained that EFT had been involved in designing the rectification works as evidenced by the handwritten notations attached to Hacer’s correspondence with Burelli.[79]  Bornyan identified those handwritten notes to be Francis Apap’s of EFT.[80]

   [78]Ibid 2007.

   [79]Ibid 2008.

   [80]Trial Transcript (n 48) 68.19–29.

1. Hacer alleges that it incurred rectification costs of $167,298 in respect of this defect.  In support of that sum, it tendered six invoices issued by Burelli.[81]  The total amount claimed in the invoices is $306,798.  Bornyan explained that Burelli was doing other works for Hacer in addition to the rectification works.  The Senior Contract Administrator, Mr Jason Sheriff, highlighted the amounts in the invoices, as they appear in the Court Book, that relate to the required rectification work.  Bornyan gave evidence that he satisfied himself that the highlighted items related to the rectification works by reviewing the signed day dockets. 

   [81]Court Book (n 45) 2018–47.

2. EFT raises the following matters by way of its defence:

   (a)Hacer approved all drawings and designs prepared by EFT prior to the delivery of the façade system to site.  This defence ignores EFT’s contractual obligation under cl 3.4(b)(vii) referred to in paragraph 105(a) above and is therefore without merit;

   (b)insufficient particulars of the claim were provided such that the claim is embarrassing and should be struck out.  I disagree.  In my view, the claim is sufficiently particularised;

   (c)EFT submits that the Aconex correspondence sent by Hacer to Burelli Roofing, copied to EFT,  does not amount to a notice to rectify defects under the Subcontract.  Contrary to this allegation, Bornyan gave evidence that EFT was notified of the defect before Burelli undertook rectification works.  This  evidence is supported by the fact that the handwritten notes attached to the correspondence were, on Bornyan’s evidence, prepared by Mr Apap of EFT.  In any event, and as stated above, in my view Hacer’s failure to provide notice of defects does not operate to prevent it from claiming common law damages in relation to defective works; and

   (d)EFT was not given an opportunity to rectify these defects.  Consequently, Hacer is only entitled to recover an amount that it would have cost EFT to remedy the alleged defects had it been given the opportunity to do so.  In the absence of evidence of what it would have cost EFT to rectify the alleged defects, this defence is without merit.

3. I am satisfied based on the evidence before me that:

   (a)EFT breached the Subcontract by designing and supplying defective windows panels and façade components; 

   (b)the manner of rectification and costs incurred by Hacer in attending to the rectification were reasonable;

   (c)Hacer has incurred loss and damage as a result of the breach in the sum of $167,298;

   (d)there is no evidence to suggest that EFT could have attended to the rectification of the work for any less than the costs incurred by Hacer; and

   (e)Hacer gave notice to EFT of the defective works but EFT failed to the rectification of it.

4. I am satisfied that Hacer is entitled to the sum of $167,298 as a debt due from EFT.

5. Alternatively, EFT is liable to Hacer for damages in the sum of $167,298 in relation to these defective works.

D.4.7      Defect Claim 7

1. Hacer alleges, and I am satisfied based on the evidence before me, that:

   (a)pursuant to a variation to the Subcontract, EFT was obliged to design and supply aluminium ‘M2’ fins for the exterior of the Project.  This is common ground;

   (b)it was a requirement that the vertical M2 fins on level 14 would project past the roofline of the building.  This allegation is supported by the endorsed town planning documents[82] and architectural drawing A1.33;[83] and

   (c)in breach of the Subcontract, EFT’s design for the M2 fins on level 14 finished at the roof level.  This allegation is supported by EFT shop drawing ‘MYE020-ACW-531_00’.[84]

   [82]Ibid 2066.

   [83]Ibid 2069.

   [84]Ibid 2070.

2. Bornyan gave evidence in support of the existence of this defect at the hearing.  He explained:

   (a)the M2 fins supplied by EFT were manufactured in accordance with EFT’s shop drawings and finished at the roof level; and

   (b)to rectify this defect, Hacer engaged Aluline Commercial Pty Ltd (Aluline) to undertake works to extend the M2 fins on level 14 past the roof line.  The cost of these rectification works was $37,118.  This cost is evidenced by the invoices issued by Aluline.[85]

   [85]Ibid 2071–2.

3. EFT raises the following matters by way of its defence:

   (a)any extension of the fins over and beyond level 14 would constitute an additional variation to EFT’s scope of work.  No evidence was tendered in support of this defence.  Further, the suggestion that the variation was limited to the provision of fins to finish at level 14 is inconsistent with town planning documents[86] and architectural drawing A1.33.[87]  In light of this inconsistency, I find it highly unlikely that the scope of work that was the subject of the variation (variation order number 2) did not require the provision of M2 fins in accordance with those plans and drawings.  I am not persuaded by this defence;

   (b)after submitting the relevant shop drawing to Hacer for approval and receiving no response, the M2 fins were subsequently manufactured and delivered to the site.  For the following reasons, I have not had regard to this defence:

   (i)no evidence was tendered in support of it;

   (ii)in any event, by cl 3.4(b)(vii) and the definition of ‘Drawings’ in cl 1.1, the Subcontractor assumed all risk and responsibility with respect to the shop drawings; and

   (iii)by cl 3.5(d), it is clear that Hacer was under no obligation to check any documents submitted to it for compliance with the requirements of the Subcontract, and Hacer’s receipt and approval (or its failure to do either of those things) did not relieve EFT of its responsibility to ensure that the documents complied with the requirements of the Subcontract; and

   (c)as EFT was not given an opportunity to rectify these defects, Hacer is only entitled to recover an amount that it would have cost EFT to remedy the alleged defects had it been given the opportunity to do so.  In the absence of evidence of what it would have cost EFT to rectify the alleged defects, this defence is without merit.

   [86]Ibid 2066.

   [87]Ibid 2069.

4. I am satisfied based on the evidence before me that:

   (a)EFT breached the Subcontract by designing and supplying M2 fins that did not project past the level 14 roofline; 

   (b)the manner of rectification and costs incurred by Hacer in attending to the rectification was reasonable;

   (c)Hacer has incurred loss and damage as a result of this breach in the sum of $37,118; and

   (d)there is no evidence to suggest that EFT could have attended to the rectification of the work for any less than the costs incurred by Hacer.

5. Hacer did not plead the material facts necessary to support its allegation that it was entitled to the sum claimed as a debt due from EFT.

6. However, I find that EFT is liable to Hacer for damages in the sum of $37,118 in relation to these defective works.

D.4.8      Defect Claim 8

1. Under the Subcontract EFT was obliged to supply:

   (a)the window panels and associated components for apartments B105, B208, 8209, 314, 518, 704, 805, 1102, 1202, 1301, 1305, and the level 14 corridor window; and

   (b)the fins and associated components for the level 5 common area, level 14 and apartment 418. 

2. Hacer submits that EFT breached the Subcontract because:

   (a)the window panels and associated components EFT supplied were not fit for purpose because they leaked and were not weather tight; and

   (b)the fins and associated components were not fit for purpose because the internal bracket systems were loose, causing movement.

3. Bornyan gave evidence that:

   (a)these were defects that were identified post completion;

   (b)he notified EFT about these defects on the following occasions:

   (i)6 July 2018, where EFT was informed of the weather tight issues in apartment 314 and Hacer requested EFT to rectify the same;[88] and

   (ii)5 December 2019, where EFT was informed that, inter alia:

   (1)apartment 518 had a continual leak;

   (2)apartment 1102 had a leaking capping system to the curtain wall; and

   (3)the M2 fins had movement within the internal bracket system,

   and Hacer requested EFT to rectify the same.[89]

   [88]Ibid 2073–4.

   [89]Ibid 2075–6.

4. EFT did not rectify these defects.

5. Subsequently, Hacer engaged P&M Façade and Wayne’s High Access Pty Ltd to undertake rectification works by repairing the defective window panels and fins and tightening the internal bracket systems for the sum of $20,272.23.  This sum is supported by invoices issued by P&M Façade and Wayne's High Access Pty Ltd which Hacer tendered.[90]

   [90]Ibid 2077–93.

6. EFT raises the following matters by way of its defence:

   (a)insufficient particulars of the claim have been provided and the claim is embarrassing and should be struck out.  This is not a substantive defence, and in any event, I am satisfied that the claim has been properly particularised;

   (b)Hacer is not entitled to recover any costs and expenses incurred without giving EFT notice in accordance with the Subcontract.  I reject this defence.   Bornyan has given evidence that some notice of these defects was given.  In any event and as stated above,[91] in my view, Hacer’s failure to provide notice of defects does not operate to prevent it from claiming common law damages in relation to defective works; and

   (c)EFT was not given an opportunity to rectify these defects.  Consequently, Hacer is only entitled to recover an amount which it would have cost EFT to remedy the alleged defects had it been given the opportunity to do so.  In the absence of evidence of what it would have cost EFT to rectify the alleged defects, this defence is without merit. 

   [91]See section D.3 above.

7. I am satisfied based on the evidence before me that:

   (a)EFT breached the Subcontract;

   (b)the manner of rectification and costs incurred by Hacer in attending to the rectification works was reasonable;

   (c)Hacer has incurred loss and damage as a result of the breach in the sum of $20,272.23; and

   (d)there is no evidence to suggest that EFT could have attended to the rectification of the work for any less than the costs incurred by Hacer.

8. Hacer did not plead the material facts necessary to support its allegation that it was entitled to the sum claimed as a debt due from EFT under clause 6.1(e) or 31(b) of the Subcontract.  Specifically, while evidence was tendered proving notice of some defects had been given to EFT, Hacer failed to plead or prove the material facts necessary to establish that notice of each defect had been given to EFT.  Further, it is not clear from the pleading which part of the amount claimed relates to the rectification of the defects that were notified to EFT.

9. However, I am satisfied that  EFT is liable to Hacer for damages in the sum of $20,272.23 in relation to these defective works.

D.4.9      Defect Claim 9

1. Hacer alleges that there were various minor defects in the works performed by EFT.  Bornyan gave evidence that on 4 June 2019, Buildwise Projects Pty Ltd provided to Hacer two building inspection reports detailing various defects with the project.[92]  Some of the defects identified in these reports related to items supplied by EFT.

   [92]Ibid 2094–230.

2. Bornyan gave further evidence that Hacer engaged BEC Industries to rectify these defects at a total cost of $3,825.  This sum was supported by invoices issued by BEC Industries.  The claim made in relation to each invoice is particularised in Schedule 1 of the 2^nd FASOC.

3. In the absence of any defence or contradicting evidence, I accept the evidence of Bornyan for Hacer in support of the above.

4. I find that:

   (a)EFT breached the Subcontract by reason of the defects listed in Schedule 1 of the 2^nd FASOC in relation to Defect Claim 9; and

   (b)the losses incurred by Hacer are a direct result of the breach.

5. Accordingly, I find that EFT is liable to Hacer for damages in the sum of $3,825 in relation to these defective works.

D.4.10   Defect Claim 10

1. Pursuant to the Subcontract, EFT was obliged to supply ‘woodgrain’ fins for the exterior of the Project.

2. Hacer alleges that EFT breached the Subcontract by supplying defective woodgrain fins.  Bornyan gave evidence that 80 of the fins supplied by EFT were defective because they arrived coated with residual cutting oil.

3. Bornyan gave further evidence that:

   (a)EFT was notified and instructed to rectify these defects on 5 December 2019 but failed to do so; and

   (b)in July 2019, Hacer engaged Devitt Specialised Coatings to undertake rectification works to remove the oil and clean the fins for the sum of $3,714, as evidenced by the two invoices issued by Devitt Specialised Coatings dated 12 July and 18 July 2019.[93]

   [93]Ibid 2244–5.

4. In the absence of any defence to this claim or contradicting evidence, I accept the evidence of Bornyan for Hacer in support of the above.

5. I find that:

   (a)EFT breached the Subcontract by supplying 80 woodgrain fins coated with residual cutting oil; and

   (b)the losses incurred by Hacer are a direct result of this breach.

6. Accordingly, I find that EFT is liable to Hacer for damages in the sum of $3,714 in relation to these defective works.

D.4.11   Defect Claim 11

1. Pursuant to the Subcontract, EFT was obliged to supply timber fins for the exterior of the building.[94]  Bornyan gave evidence that the timber fins were a major aspect of the façade for this Project.  He explained that the alignment of the fins was intended to create a ’wave effect’.  The fins were manufactured from aluminium that was then wrapped in a timber look finish.

   [94]This obligation is documented in item 5(f) (‘Scope of Works’) in Schedule L of the Subcontract.

2. Hacer alleges that EFT breached the Subcontract by supplying 13 fins that failed to conform to the requirements of the Subcontract.

3. Bornyan gave evidence that these fins were misaligned.  In support of this allegation, Hacer relies on a defect report dated 6 September 2018 prepared in relation to the timber fins.[95]  The report comprised two pages of photographs depicting the misaligned fins.   

   [95]Court Book (n 45) 2248–9.

4. That report was provided to EFT by email on 11 September 2018.  By the covering email, Hacer notified EFT of the defect and requested that it be rectified urgently.[96]  EFT did not attend to the rectification.

   [96]Ibid 2246.

5. In October and November 2018, Hacer engaged P&M Façade and Wayne’s High Access Pty Ltd to undertake rectification works to adjust the fins for the total sum of $83,830.  In support of the sum claimed, Hacer relies on the following invoices:

   (a)P&M Façade’s invoice 1041 in the sum of $17,600;[97]

   (b)P&M Façade’s invoice 1042 in the sum of $17,600;[98]

   (c)Wayne’s High Access invoice 50275 in the sum of $36,750.  Bornyan gave evidence that only those amounts highlighted in the invoice related to this defect;[99] and

   (d)Wayne’s High Access invoice 50335 in the sum of $11,880.[100]

   [97]Ibid 2250.

   [98]Ibid 2259.

   [99]Ibid 2268; Trial Transcript (n 48) 74.21–76.1.

   [100]Court Book (n 45) 2269.

6. Hacer raises the following matters by way of its defence:

   (a)insufficient particulars of the claim have been provided and the claim is embarrassing and should be struck out.  This is not a substantive defence to Hacer’s claim.  In any event, I am satisfied that sufficient particulars of the claim have been provided; and

   (b)EFT was not given an opportunity to rectify these defects.  Consequently, Hacer is only entitled to recover an amount which it would have cost EFT to remedy the alleged defects had it been given the opportunity to do so.  To the contrary, Bornyan gave evidence, and I accept, that EFT was notified of these defects and the rectification works were carried out after the notification.  In any event, there is no evidence to suggest that EFT could have attended to the rectification of the work for any less than the costs incurred by Hacer.

7. I am satisfied based on the evidence before me that:

   (a)EFT breached the Subcontract;

   (b)the manner of rectification and costs incurred by Hacer in attending to the rectification works were reasonable;

   (c)Hacer has incurred loss and damage as a result of the breach in the sum of $83,830; and

   (d)by operation of cls 6(e) and 31(b) of the Subcontract, Hacer is entitled to recover that sum from Hacer as a debt due.

8. Alternatively, I find that EFT is liable to Hacer for damages in the sum of $83,830 in relation to these defective works.

D.4.12   Defect Claim 12

1. Pursuant to the Subcontract, EFT was obliged to design and supply ‘M1’ fins on level 14 in accordance with architectural drawings A4.30, A4.31, A4.32, A4.33 and A14.08.  These architectural drawings specified that the M1 fins must align with the curtain wall mullions, which were the structural members to which the M1 fins were to be attached.  This allegation is supported by, for example, architectural drawing A4.30.  That drawing includes the following comment: ’METAL FINS, T0 BE CO-ORDINATED WITH CURTAIN WALL FAÇADE SYSTEM POSITION TO ALIGN WITH CURTAIN WALL DIVISION’.

2. Bornyan gave evidence that the M1 fins were designed to be affixed to the curtain wall system for levels 4 to 14 and the rooftop.  He explained that the M1 fins were 450 mm deep structures made of anodised aluminium, with two extrusions that clipped together.  A frame inside the fins also enabled brackets to be attached so that the fins could be affixed to the mullions within the curtain wall system. 

3. Bornyan gave evidence that the fins designed and supplied by EFT were not fit for purpose because they did not align with the curtain wall mullions.  The brackets on the fins were manufactured incorrectly.  As a consequence, Hacer had to pull the fins apart, adjust the brackets, and reinstall them on each fin.

4. Bornyan also gave evidence that the fins were supposed to be installed at the same time as the curtain wall panels.  As the fins were delivered after the curtain wall components, the fins had to be attached after the curtain wall was already in place.  This was achieved in a number of ways, including the use of a truck boom and abseilers.

5. Bornyan gave evidence that on 10 and 22 January 2018, Hacer instructed EFT to rectify these defects.[101]  Photographs were attached to the correspondence sent on 22 January 2018.  They depict examples of the alleged misalignment.  Although the photographs were not included in the Court Book, they were produced by Hacer during the course of the trial.

   [101]Ibid 2275–80.

6. Hacer engaged P&M Façade to undertake rectification works for the M1 fins.  Bornyan gave evidence that Hacer incurred rectification costs in the sum of $150,000.  This claim is supported by the following invoices issued by P&M Façade:[102]

   (a)invoice 1034 dated 20 August 2018 in the sum of $82,840.[103]  By that invoice P&M Façade claims at total of $137,940.00.  The plaintiff pleads that only $95,760 of the total sum claimed relates to the rectification of this defect.  However, I understood Bornyan’s evidence to be that only those amounts highlighted in the relevant invoices relate to the defects the subject of the claim.  The only amount highlighted in this invoice is the sum of $82,840;

   (b)invoice 1035 dated 20 September 2018 in the sum of $46,740;[104]

   (c)invoice 1041 dated 20 October 2018 in the sum of $3,000;[105] and

   (d)invoice 1042 dated 20 November 2018 in the sum of $4,500.[106]

   [102]Ibid 2281–319.

   [103]Ibid 2308.

   [104]Ibid 2288.

   [105]Ibid 2290.

   [106]Ibid 2299.

A.44       BC096

1. This back charge relates to the reinstallation of the subsill on level 9 to account for a curtain wall panel supplied by EFT that was oversized.  Hacer claims $570 in relation to these works.

2. P&M Façade’s day works sheet dated 22 March 2018 records that 6 hours labour was applied to the task of reinstalling and modifying the subsill on level 9 at the curtain wall panel CW-15.

3. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $570 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $570 in relation to these defect rectification works.

A.45       BC097

1. This back charge relates to additional works to install panels on the north west side of level 10 that had incorrect modular sizing.  Hacer claims $1,520 in relation to these works.

2. P&M Façade’s day works sheet dated 22 March 2018 record that 16 hours labour was applied to the task of moving brackets and installing new fixings for panels supplied by EFT on level 10 that were the wrong size.

3. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $1,520 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $1,520 in relation to these defect rectification works.

A.46       BC098

1. This back charge relates to extra works done to reinstall brackets on level 12.  Hacer claims $1,520 in relation to these works.

2. P&M Façade’s day works sheet dated 23 March 2018 record that 16 hours labour was applied to the task of cutting pockets and reinstalling brackets for panels on level 12.  The works sheet notes that brackets had to be reinstalled due to EFT’s poorly designed panels causing steel to clash, and also because EFT had failed to supply face fix brackets for the panels.

3. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $1,520 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $1,520 in relation to these defect rectification works.

A.47       BC099

1. This back charge relates to works done to swap panels on the north west side of levels 11 and 12 which EFT had made the wrong size.  Hacer claims $2,850 in relation to these works.

2. It is apparent from P&M Façade’s day works sheet dated 27 March 2018 that a total of 30 hours labour was applied to the task of swapping panels on the north west side of level 11 with panels on level 12 using a tower crane on 26 and 27 March 2018.

3. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $2,850 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $2,850 in relation to these defect rectification works.

A.48       BC101

1. This back charge relates to works done to move fin brackets on panels on the eastern side of the ground floor.  Hacer claims $570 in relation to these works.

2. P&M Façade’s day works sheet dated 27 March 2018 record that 6 hours labour was applied to the task of moving fin brackets on panels on the eastern elevation of the ground floor.  The works sheet notes this was required because internal blocks could not move due to concealed fixings.

3. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $570 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $570 in relation to these defect rectification works.

A.49       BC102

1. This back charge relates to works done to cut down panels on level 12 that were made by EFT to be the wrong overall height.  Hacer claims $760 in relation to these works.

2. P&M Façade’s day works sheet dated 9 April 2018 record that 8 hours labour was applied to the task of cutting down panels on the level 12 balcony.

3. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $760 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $760 in relation to these defect rectification works.

A.50       BC103

1. This back charge relates to works done to modify subsills on levels 12 and 13 that were incorrectly manufactured by EFT.  Hacer claims $380 in relation to these works.

2. Hacer relies on an annotated drawing ‘MYE020-ACW-257-Rev01’ depicting how the machined fixing holes incorrectly clashed with the aluminium leg on the subsills. 

3. It is evident from P&M Façade’s day works sheet dated 12 April 2018 that 4 hours labour was applied to the task of modifying subsills for levels 12  and 13 that were manufactured incorrectly.

4. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $380 in relation to those works.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $380 in relation to these defect rectification works.

A.51       BC104

1. This back charge relates to works done to remove and reinstall fin brackets in doorways on the ground floor.  Hacer claims $428 in relation to these works.

2. It is apparent from P&M Façade’s day works sheet dated 12 April 2018 that 4.5 hours labour was applied to removing fin brackets which had been incorrectly manufactured, and installing them on sub jambs on the ground floor doorway.

3. By invoice dated 20 April 2018, P&M Façade invoiced Hacer $428 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $428 in relation to these defect rectification works.

A.52       IV272

1. This back charge relates to works done to resize the window header for apartment 1113 after EFT made it the incorrect size.  Hacer claims $912.63 in relation to these works.

2. It is evident from the docket of Oneway Constructions Pty Ltd labelled ‘3558’ that 7 hours labour was applied to the task of resizing the window header for apartment 1113 because the panel supplied by EFT was too big.  The docket also makes clear that $387.63 was spent on materials.

3. By invoice dated 25 April 2018, Oneway Constructions Pty Ltd invoiced Hacer $912.63 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $912.63 in relation to these defect rectification works.

A.53       BC105 

1. This back charge relates to works done by MFI during the period 24 to 29 March 2018 to rectify defects in components of the façade supplied by EFT.  Hacer claims $18,423.15 in relation to these works.  

2. By email dated 8 February 2018, Hacer confirmed with EFT items requiring rectification that had been discussed and agreed between them.  It is not apparent to me which item relates to this back charge claim. 

3. By email dated 9 February 2018, EFT responded providing documentation identifying MFI as their preferred contractor to rectify EFT’s defects. 

4. By an invoice issued by MFI numbered 3192, attached to Hacer’s Payment Schedule 12 dated 25 April 2018, Hacer was invoiced $18,423.15 for works done as day labour comprising 197 hours of labour in total.  By reference to the attached day labour sheets it is apparent that the description of work done is consistent with rectification works associated with the building façade, including the modification and installation of windows and doorways on levels 1, 2, 3, 4 and 5. 

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $18,423.15 in relation to those defect rectification works.

A.54       BC106

1. This back charge relates to works done by MFI during the period 5 and 6 April 2018 to rectify defects in the works performed by EFT.  Hacer claims $7,058.10 in relation to these works.  

2. By email dated 8 February 2018, Hacer confirmed with EFT items requiring rectification that had been discussed and agreed between them.  It is not apparent to me which item relates to this back charge claim. 

3. By email dated 9 February 2018, EFT responded providing documentation identifying MFI as their preferred contractor to rectify EFT’s defects. 

4. By an invoice issued by MFI numbered 3193, attached to Hacer’s Payment Schedule 12 dated 25 April 2018, Hacer was invoiced $7,058.10 for works done as day labour comprising 78 hours of labour in total.  By reference to the attached day labour sheets, it is apparent that the description of work done is consistent with rectification works associated with the building façade, including the installation and caulking of trims in four apartments, and cutting down of panels on level 12.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $7,058.10 in relation to these defect rectification works.

A.55       BC107

1. This back charge relates to works done by MFI to rectify defects during the period 7 to 27 April 2018 in the works performed by EFT.  Hacer claims $72,310.44 in relation to these works.  

2. By email dated 8 February 2018, Hacer confirmed with EFT items requiring rectification that had been discussed and agreed between them.  It is not apparent to me which item relates to this back charge claim. 

3. By email dated 9 February 2018, EFT responded providing documentation identifying MFI as their preferred contractor to rectify EFT’s defects. 

4. By three invoices issued by MFI numbered 3199, 3201 and 3215, attached to Hacer’s Payment Schedule 12 dated 25 April 2018, Hacer was invoiced $72,310.44 for works done as day labour comprising more than 750 hours of labour in total.  By reference to the attached day labour sheets, it is apparent that the description of work done is consistent with rectification works associated with the building façade, including cutting down panels on level 12 and the installation of sills, trims and cappings on multiple levels of the building.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $72,310.44 in relation to these defect rectification works.

A.56       BC108

1. This back charge relates to the supply of additional fixings from All Fasteners Pty Ltd that were allegedly required due to EFT’s failure to supply sufficient fixings for the project.  Hacer claims $996.13 for the supply of these materials.

2. It is apparent from two invoices of All Fasteners Pty Ltd dated 6 April and 18 April 2022 that All Fasteners Pty Ltd invoiced Hacer a total of $996.13 for the supply of large quantities of M12 sized washers, screws and bolts to Hacer. 

3. These invoices were attached to Hacer’s Payment Schedule 12 dated 25 April 2018, by which Hacer back charged $996.13 to EFT.

4. Based on the evidence before me, I am not satisfied that the costs incurred were attributable to a defect in the works done or materials supplied by EFT.  Accordingly I find that Hacer is entitled to nil in relation to this claim. 

A.57       BC109 and BC113

1. I am informed by the materials provided by Hacer that the sums claimed for back charges BC109 and BC113 are now both included as part of Defect Claim 2 and have been awarded to Hacer.  Therefore I will not address these back charge claims further.

A.58       BC125

1. This back charge relates to the supply of  side light panels for the automatic doors on the ground floor by CSF Façade Pty Ltd (CSF).  Hacer claims $14,000 in relation to these items.

2. These panels were, according to the description in Hacer’s Payment Schedule 13 dated 28 May 2018, supplied by CSF after EFT failed to provide them. 

3. Hacer relies on two marked up drawings numbered A4.15.T3 and A4.16.T3 to identify the side panels adjacent to the automatic sliding doors on the ground floor which EFT was obliged to manufacture and supply.

4. By CSF’s invoice numbered 18-0502 and dated 25 May 2018, Hacer was invoiced $14,000 for the supply by CSF of ‘Auto Door Sidelights as Per Quote 18-0402 dated 18 April 2018’. 

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $14,000 in relation to the supply of the side light panels.

A.59       BC133

1. This back charge relates to works done to install extra fillet panels on level 12 due to EFT sending incorrectly sized panels to site.  Hacer claims $5,700 in relation to these works.

2. P&M Façade’s day works sheet labelled ‘Job No 1035’ records that on 26, 27 and 30 May 2018, a total of 60 hours labour was applied to installing extra fillet panels on level 12.

3. By invoice dated 20 May 2018, P&M Façade invoiced Hacer $5,700 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $5,700 in relation to these defect rectification works.

A.60       BC134

1. This back charge relates to the installation of ledge brackets that were required because EFT suppled subsills which were overhanging once installed.  Hacer claims $760 in relation to these works.

2. P&M Façade’s day works sheet labelled ‘Job No 1036’ indicates that 8 hours labour was applied to installing support brackets where the subsill was overhanging. 

3. By invoice dated 20 May 2018, P&M Façade invoiced Hacer $760 in relation to those works.

4. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $760 in relation to these defect rectification works.

A.61       BC135

1. This back charge relates to the supply of glass to replace 6 mm thick glass panels supplied by EFT for the ground floor that were broken in transit.  Hacer claims $920 in relation to these works.

2. It is apparent from CSF’s invoice dated 28 May 2018 that it invoiced Hacer the sum of $920 for the supply of glass which Bornyan had approved by email of 28 May 2018.  This invoice was attached to Hacer’s Payment Schedule 13 dated 28 May 2018, by which Hacer back charged $920 to EFT.

3. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $920 for the cost of these replacement materials occasioned by EFT’s delivery of defective glass.

A.62       BC136

1. This back charge relates to works done by MFI during the period 28 April to 26 May 2018 to rectify defects in components of the building façade supplied by EFT.  Hacer claims $119,534.80 in relation to these works.  

2. By email dated 8 February 2018, Hacer confirmed with EFT items requiring rectification that had been discussed and agreed between them.  It is not apparent to me which item relates to this back charge claim.

3. By email dated 9 February 2018, EFT responded providing documentation identifying MFI as their preferred contractor to rectify EFT’s defects. 

4. By six invoices issued by MFI numbered 3221, 3224, 3228, 3239, 3243 and 3244, attached to Hacer’s Payment Schedule 13 dated 28 May 2018, Hacer was invoiced $119,534.80 for works done as day labour.  By reference to the attached day labour sheets, it is apparent that the description of work done is consistent with rectification works associated with the building façade, including cutting down panels in numerous apartments and the installation and modification of glass, cappings, and corner pressings.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $119,534.80 in relation to these defect rectification works.

A.63       BC137

1. This back charge relates to the supply of replacement glass for spandrel panels supplied by EFT that were broken in transit.  Hacer claims $4,272  in relation to these works.  

2. It is apparent from CSF’s invoice dated 4 June 2018 that it invoiced Hacer the sum of $4,272 for the supply of glass which Bornyan had approved by email of 4 June 2018.

3. Hacer provided correspondence between Bornyan and CSF dated 4 June 2018 in which Bornyan placed a purchase order for a number of laminated 6 mm glass panels of various dimensions. 

4. By its Payment Schedule 13 dated 28 May 2018, Hacer back charged $4,272 to EFT.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $4,272 for the cost of these replacement materials occasioned by EFT’s delivery of defective glass.

A.64       BC149

1. This back charge relates to works done by Burelli during the period 23 April to 25 May 2018 to rectify missing or defective trims for windows and doorways supplied by EFT.  Hacer claims $55,574.50 in relation to these works (these costs are distinct from, and do not form part of, Defect Claim 6).

2. Hacer relies on several photographs depicting examples of windows and doorways supplied by EFT which lacked aluminium trims and skirtings.

3. According to the description in Hacer’s Payment Schedule 14 dated 25 June 2018,  these works were performed by Burelli ‘on behalf of  EFT’ because EFT had failed to supply ‘cappings and pressings’. 

4. By the invoice issued by Burelli numbered 257-05 and dated 25 May 2018, Hacer was invoiced $200,207 for variations.  Of that sum, $51,177.50 was identified as being attributable to EFT by reference to certain time sheets and orders for aluminium materials used by Burelli.

5. From Burelli’s time sheets numbered 30 to 38, 41 to 43, and 52 (referred to by the invoice), it is apparent that a total of 185 hours labour (including 53 hours worked overtime) was applied to installing aluminium trims for windows and doors on multiple levels of the building.  The total cost of this labour was $20,780.  The sum of costs for the aluminium materials referred to by the invoice amounts to $27,778.  The handwritten annotations on the invoice indicate these materials were for ‘EFT corner pressings’ and ‘EFT spandrel cappings’.

6. A final item on page 3 of the invoice referred to as ‘Materials 29-53’ amounts to $5,239.  By handwritten comment at the top of that page, Burelli attributes 50% of that cost to EFT (namely $2,619.50). 

7. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $51,177.50 ($20,780 + $27,778 + $2,619.50) in relation to these defect rectification works.

A.65       BC152

1. This back charge relates to timber protection works performed on the windows in apartments B103 and B104 which EFT had supplied without the required glazing.  Hacer claims $3,830 in relation to these works.

2. By its invoice dated 29 May 2018, Cranmore Carpentry Pty Ltd invoiced Hacer $3,830 for 40 hours of labour. It is evident from its attached day works sheet that between 23 to 25 May 2018, a total of 40 hours labour was applied to installing extra plywood infills on windows.[126]

   [126]Court Book (n 45) 1650.

3. Hacer also provided photographs identifying the windows that were supplied by EFT without glazing.

4. Hacer back charged EFT for these works by its Payment Schedule 14 dated 25 June 2018, in which Hacer describes the works as ‘ply protection to openings for windows supplied with no glass’.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $3,830 in relation to these defect rectification works. 

A.66       BC158

1. This back charge relates to works done to install timber ply for certain windows in apartment 517 which were supplied by EFT without the required glazing.  Hacer claims $280 in relation to these works.

2. It is apparent from ACW Projects Pty Ltd’s variation claim table dated June 2018 that 3.5 hours labour was applied to the task of installing plywood to window openings.

3. By its invoice dated 20 June 2018, ACW Projects Pty Ltd invoiced Hacer $280 for these works.

4. Hacer also provided photographs identifying the relevant windows that were supplied by EFT without glazing.

5. Hacer back charged EFT for these works by its Payment Schedule 14 dated 25 June 2018, in which Hacer describes the works as ‘ply protection to openings for windows supplied with no glass’.

6. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $280 in relation to these defect rectification works.

A.67       BC159    

1. This back charge relates to the removal of silver foil tape from around the back pans forming part of the curtain wall.  Photographs relied on by Hacer provide examples of where the tape was visible.  The rectification works were undertaken by  Construction Cleaning Vic.

2. Hacer claims $42,475 in relation to these works.  

3. By email dated 10 January 2018, Hacer notified EFT of this defect by noting that the silver foil tape was present around back pans in some locations.

1. By four invoices issued by Construction Cleaning Vic numbered 6752, 6814, 6816 and 6817, Hacer was invoiced a total of $42,475. 

2. Based on the evidence before me, I am satisfied that Hacer has incurred costs  in the sum of $42,475 in relation to these defect rectification works.

A.68       BC160

1. This back charge relates to the supply of swing door thresholds which EFT had failed to deliver.  Hacer claims $3,938 in relation to these items.  

2. Bornyan gives evidence that these costs were incurred to rectify defects in EFT’s works and were accordingly back charged to EFT.

3. By two invoices dated 2 May 2018 issued by Detail Door Hardware Pty Ltd numbered 074186 and 074187, Hacer was invoiced a total of $3,937.98 for the supply of heavy duty door thresholds.

4. Hacer back charged EFT for this cost by its Payment Schedule 14 dated 25 June 2018.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $3,938 due to EFT’s failure to deliver these door items.

A.69       BC165

1. This back charge relates to the supply by CSF of glass.  

2. Bornyan gave evidence that these costs were incurred rectifying defects in EFT’s works and that they were back charged to EFT.

3. Hacer claims $14,215 in relation to these works.  

4. By two invoices issued by CSF dated 22 June 2018, Hacer was invoiced $28,215. 

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $14,215 in relation to these works.

A.70       BC167

1. This back charge relates to works done to remove and reinstall cladding in apartment 1113 to fit window frames that EFT had made the wrong height.  Hacer claims $1,627.37 in relation to these works.

2. It is apparent from the day works sheet of Donnelly & Sons Pty Ltd dated 24 May 2018 that a total of 16 hours labour was applied to rectification works at apartment 1113 due to the windows there being the wrong height.

3. By invoice dated 20 June 2018, Donnelly & Sons Pty Ltd invoiced Hacer $1,627.37 for the cost of this labour and materials used to complete the rectification works.

4. Hacer accordingly back charged EFT for this cost by its Payment Schedule 14 dated 25 June 2018.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $1,627.37 in relation to these defect rectification works.

A.71       BC170

1. This back charge relates to works done to install secondary steelwork and cut down panels for the curtain wall because EFT had manufactured brackets and panels for the curtain wall that were the wrong size.  Hacer claims $4,940 in relation to these works.

2. It is evident from four day works sheets issued by P&M Façade numbered 1047, 1048, 1161 and 1162 that a total of 52 hours labour was applied to the tasks of:

   (a)cutting out the back pan in the glazed façade of apartment 315;

   (b)installing and modifying steelwork to support panels on levels 12 and 14; and

   (c)deglazing and cutting down panels and doors on level 7.

3. By invoice dated 20 June 2018, P&M Façade invoiced Hacer $4,940 in relation to these works.

4. In support of this claim, Hacer also relies on:

   (a)several design drawings specifying the locations and dimensions of structural members for the curtain wall; and

   (b)correspondence between 15 and 21 November 2017 showing that EFT had responsibility to design and manufacture the curtain wall members in accordance with the design drawings.

5. Based on the evidence before me, I am satisfied that Hacer is entitled to damages in the sum of $4,940 in relation to these defect rectification works.

A.72       BC183

1. This back charge relates to welding works performed on ground floor steel supports allegedly because EFT supplied fins for the ground floor which did not align with structural steel supports as required.  Hacer claims $14,297.50 in relation to these works.

2. Hacer describes the rectification works as being performed solely on the ground floor, stating that because ‘EFT supplied timber fins at the ground floor with the fin outriggers not lining up with the additional structural steel supports designed by EFT … Hacer was required to engage Apex Welding to perform rectification works to the ground floor steel supports’.[127]

   [127]2^nd FASOC sch 6.

3. In Hacer’s Payment Schedule 15 dated 25 July 2018, the rectification works are relevantly described as ‘works to ground floor steel supports to fins due to incorrect design by EFT’.

4. The site works sheets of Apex Welding and Steel Fabrication Pty Ltd (Apex Welding) numbered 2602, 2603, 2605, 2606, 2607, 2608 and 2609, and one further works sheet dated 20 June 2018, indicate that a total of 94.5 hours labour (including 48 hours worked overtime) was applied to the following tasks:

   (a)modifying columns on level 6;

   (b)modifying and splicing columns for level 4 screens;

   (c)modifying base plates to suit block work;

   (d)rewelding outriggers to suit brackets;

   (e)removing screens and tiles for the base of columns;

   (f)cutting down and refabricating columns;

   (g)tying back columns on levels 5 and 6; and

   (h)fabricating and installing a stub column to attach fins to it.

5. By its June 2018 claim form numbered 7A, Apex Welding invoiced Hacer $14,297.50 for these works.  The claim form states this amount is comprised of 66.5 hours at the normal hourly rate plus 38 hours of overtime (equating to 104.5 hours in total) for the supply of site labour for ‘rectification works to fin support steel’.   This claim exceeds the hours recorded in the site works sheets by 10 hours.  The error seems to stem from an error in Docket 2605 which erroneously claims that 8 hours + 0.5 hours = 18.5 hours.

6. In any event, I am not satisfied on the evidence before me that the costs incurred relate to the rectification works the subject of this back charge.  Specifically, the description of works in the site job sheets provided by Apex Welding, and the location of the works (predominantly levels 4, 5 and 6) are inconsistent with the description of the rectification works the subject of the back charge — namely, welding works performed on the ground floor steel supports.  I therefore find that Hacer is entitled to nil in relation to this claim.