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Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd

Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd

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Case Copied 30 June 2022 71 min read

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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

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).
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.
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.
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).
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.
Hacer also claims liquidated damages under the Subcontract in the sum of $589,500.[2] In the alternative,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] VSC 373
Decision Date: 30 June 2022

CaseChat Overview and Summary

In the Federal Court, Hacer Group Pty Ltd sued Euro Façade Tech Export Sdn Bhd over alleged defects in construction work carried out on a building in Sydney. The plaintiff claimed damages for the contractor's failure to rectify defective work, the plaintiff's own actions in rectifying the defects without notice to the contractor, delays in the project, and the application of liquidated damages. Euro Façade Tech Export Sdn Bhd did not defend the claim, leading to an uncontested hearing.

The court needed to determine whether the plaintiff could recover damages for the defective work, the costs of rectifying the defects without notice to the contractor, the delays caused by the defective work, and the liquidated damages. The court also needed to decide whether the liquidated damages clause was enforceable. The court considered several cases in determining these issues, including AA Shi Pty Ltd v Avbar Pty Ltd, United Group Resources Pty Ltd v Calabro, Owners Corporation No.1 of PS613436T v LU Simon Builders Pty Ltd, Owners-Strata Plan No 76674 v Di Blasio Constructing Pty Ltd, Turner Corporation Ltd v Austotel Pty Ltd, J-Corp Pty Ltd v Mladenis, and others.

The court found that the plaintiff could recover damages for the defective work, the costs of rectifying the defects without notice to the contractor, and the delays caused by the defective work. However, the court held that the liquidated damages clause was unenforceable as it was a penalty clause. The court awarded the plaintiff damages for the defective work, the costs of rectifying the defects without notice to the contractor, and the delays caused by the defective work. The court did not award liquidated damages to the plaintiff.

Orders