Harrison v Jltski Pty Ltd as trustee for Trenwith Family Trust - [2017] SADC 20

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
HARRISON v JLTSKI PTY LTD AS TRUSTEE FOR TRENWITH FAMILY TRUST
[2017] SADC 20
Judgment of His Honour Judge Millsteed
8 March 2017
CONTRACTS
Applicants contracted Respondents to manage construction of house - Respondents instituted minor civil action in the Magistrates Court of South Australia to recover from the Applicants the cost of soil removed from building site - Respondents filed a counterclaim - magistrate entered judgment in favour of Applicants in relation to soil cost but failed to consider counterclaim - application by Applicants for an extension of time for District Court to review magistrate's decision - discussion of source of power to grant an extension of time - application of extension of time granted - held: magistrate erred in finding that Applicants were contractually bound to reimburse Respondents for soil removal costs - however reimbursement was warranted on grounds of restitution or unjust enrichment - held: magistrate erred in failing to consider counterclaim - counterclaim considered by District Court but dismissed.
Magistrates Court Act 1991 s 38; Limitation of Actions Act 1936 s 48, referred to.
Henley v Cook [2016] SADC 147; Calvaresi and Rota Forma Pty Ltd v Lawson (1995) 184 LSJS 147; Schafer v Blyth [1920] 2 KB 140; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Lumbers v W Cook Builders Pty Ltd (In Liq) (2008) 232 CLR 635, considered.

HARRISON v JLTSKI PTY LTD AS TRUSTEE FOR TRENWITH FAMILY TRUST
[2017] SADC 20
Introduction

JLTSKI Pty Ltd trading as Clear Property Services (‘Clear’), and as Trustee for the Trenwith Family Trust, instituted a minor civil action in the Magistrates Court against Darren and Belinda Harrison (‘Harrisons’) on account of the Harrisons’ alleged failure to pay for the removal of soil excavated from footing trenches at a building site. The Harrisons filed a counterclaim against Clear. The presiding Magistrate entered judgment in favour of Clear in the amount of $1,959.23 (plus costs) with respect to its claim against the Harrisons but made no order in relation to the counterclaim. The Harrisons now apply for an extension of time for this Court to review the Magistrate’s decision.
Background
Lyn Trenwith and her husband Jon Trenwith are the principals of Clear. Their business provides project management services for customers wanting to build houses for investment purposes. Clear co-ordinates the preparation of building plans and the selection of a builder and construction site. During construction it liaises between the customer and the builder.
In early 2014 the Harrisons consulted Clear and expressed interest in building a house for investment purposes. Clear recommended that the Harrisons construct a house, designed and built by Fairmont Homes Pty Ltd (Fairmont), on a block of land at 1012 Durham Street, Seaford Meadows (the Site).
On 7 May 2014 the Harrisons signed an ‘Authority to Proceed’ which authorised Clear to conduct ‘project consultation and management services’ in relation to the proposed development for a fee of $7,500.00. The services to be provided by Clear were set out in a document titled ‘Project Management’ which stated:
Clear will undertake the following tasks as Project Manager for the project:
1.   Liaise with a building designer to prepare the best possible conceptual plan.
2.   Discussions with council regarding the key development considerations, including satisfactory inclusion of all required building encumbrance details.
3.   Liaise with the builder and yourselves and assist in choosing all selections with regards to the internal and external construction of the home.
4.   Provide reports to advise stages of completion during the construction stages.
Throughout the project management stage, Clear will provide regular status reports. These are provided to ensure that you are well informed about progress of the project with respect to time frames and budget. Any variations will require your approval prior to Clear proceeding with the project.
The Authority to Proceed and the Project Management document will be referred to collectively as the ‘Project Management Contract’.
On 19 May 2014 a ‘Plain Language Building Contract for Alterations and Additions’ (Clear Contract) was executed by the Harrisons and Clear in which the Harrisons agreed to pay Clear $62,425.00 to install a ‘Clear Platinum Package’ upon completion of the construction of the house by Fairmont Homes. The package provided for the installation of special fittings, internal floor coverings, air-conditioning, external paving and landscaping.
On 20 May 2014 the Harrisons accepted and signed a quote from Fairmont for the house to be constructed for $141,403.00 with an allowance of $1,500.00 for the ‘removal of excess soil’ included in the price.
On 3 June 2014 a ‘Plain Language Building Contract for New Homes’ was executed by the Harrisons and Fairmont in which the latter agreed to construct a house on the Site for the quoted price of $141,403.00 (‘Fairmont Contract’). The Fairmont Contract contained the following relevant clauses:
·Clause 12 stipulated that both parties had to agree to any ‘variation’ subject to certain clauses. The Fairmont Contract defined ‘variation’ as a change in the work or the performance of extra work.
·Clause 16 allowed the Builder to conduct, without consent, a variation ‘required to footings (including service trenches)’ because of site conditions or the engineer’s requirements. However, the Builder was required, if practical, to forewarn the owners of any such variation (cl.13.2) and to ‘tell the [owners] of the variation, and any cost, as soon as practical after it is done’ (cl.13.3). Clause 13.4 further provided the owner would be ‘charged the actual price for the variation including an amount for our margin (which includes overheads) being 15% applied to the cost of that work’ and ‘receive a fair credit for any deleted work’.
Annexure A to the Fairmont Contract included the following additional terms:
Contingency for Additional Footings and Site Works
The contract price includes a contingency (not a prime cost) sum of $15,000 additional footings and site works. This contingency sum will be applied to paying for any footing variation accepted by you so, if you accept such a footing variation and if; the amount of the variation is more than the contingency sum, the price will be increased by the difference. Or if the amount of the variation is less than the contingency sum, the price will be decreased by the difference.
Surplus Soil
The Owner is responsible for removal of excess soil from the site after site works and trenching for services. If you choose to do this or arrange for others to do it, subclauses 18.1 and 18.2 apply and, in that case only, the following subclauses will apply instead of subclauses 18.3 and 18.4. 18.5 The work that you are doing is the removal of excess soil, you must do that work or arrange for that work to be done immediately we ask you to otherwise we will do the work as a variation and clause 13 applies.
Tight sites may force the removal of surplus soil during excavation and Clause 13 applies.
It is clear from Annexure A that under the Fairmont Contract the Harrisons were responsible for removing or arranging for the removal of excess soil from the Site. However, the contract price included an allowance of $1,500.00 for such removal, as agreed by the parties on 20 May 2014. In other words, Fairmont Homes had agreed to pay $1,500.00 towards the cost of excess soil removal incurred by the Harrisons.
Purported variation
Clear contends that an ‘Authority for Variation to Contract’, dated 29 October 2014, authorised variation of the Fairmont Contract so as to require the Harrisons to pay for all soil removal costs (‘Soil Cost Variation’). The authority, which was signed by a representative of Fairmont Homes but not by the Harrisons or by any agent acting on their behalf, stated:
The following notes are to bring the owners attention to some of his/her responsibilities as per the Soil Report but is not inclusive: You should read the report yourself for full information. NB Fairmont is not responsible for any damage to the footpath, crossover, kerbing, gutters or any other property that impedes clear access to the site. NB Heavy machinery is used during the construction of your home and needs room to move freely.
1. Cost and removal of all surplus soil from site works, footings, service trenches (including septic tanks) is by Owner. If applicable, large amounts of soil from site works cannot be stockpiled and must be removed by the footing contractor, to be confirmed prior to start. Should concrete or pavers to paths/driveway or stormwater be included in your contract, this soil removal is also the owners responsibility.
…
Clear further contends that at about the same time Fairmont gave the Harrisons a credit of $1,500.00 on account of the allowance that had been included in the Fairmont Contract price for excess soil removal. The credit was recorded in an undated document, titled ‘Contract Variation Authority’, signed by Mrs Trenwith (‘Soil Credit’). Clear maintains that copies of the Soil Cost Variation and the Soil Credit were posted to the Harrisons as enclosures to a letter from Karina Gibbett, Construction Manager for Clear dated 29 October 2014.
The Harrisons assert that they never received the correspondence from Ms Gibbett and were unaware of the existence of the Soil Cost Variation and the Soil Credit until after Clear instituted proceedings against them. They further assert that the Soil Cost Variation was invalid because they did not agree to it and that Fairmont never gave them a credit of $1,500.00 in lieu of the excess soil allowance. On the Harrisons’ case they remained responsible for removing and paying for the removal of excess soil subject to receiving from Fairmont an allowance of $1,500 for such work.
Soil removal
Fairmont Homes commenced works on the Site in late 2014.
The Site was levelled which resulted in the need to remove excess soil. According to Clear, their ‘site supervisor’ Mr Antonio Castelluzzo was advised of this requirement by Fairmont Homes’ building contractor. Mr Castelluzzo engaged the firm Active Stormwater and Kangaworx (Stormwater) to load and carry away 40 tonne of excess soil created by the levelling of the Site (‘Stormwater soil removal’).
Subsequently, footing trenches were excavated. Mr Castelluzzo engaged A & S Scerri Excavations (‘Scerris’) to remove and dump the soil which had been excavated from the trenches (‘Scerri soil removal’).
On 12 January 2015 Scerris invoiced Clear in the amount of $1,548.80 (inclusive of GST) for the Scerri soil removal.
On 18 January 2015 Stormwater invoiced Clear in the amount of $880.00 (excluding GST) for the Stormwater soil removal. The invoice described the work performed by Stormwater as follows:
Soil removal after footing trenches excavated 40 tonne @ $22.00 per tonne.
Site cut removal was done footing contractor.
Despite the reference in the invoice to ‘soil removal after footing trenches excavated’, Clear says that the work performed by Stormwater involved the removal of excess soil which following levelling of the Site.
On 20 January 2015 Clear invoiced the Harrisons in the amount of $1,012.00 for the Stormwater soil removal costs. The invoiced amount included GST and a 15% loading imposed by Clear. The invoice described the work performed by Stormwater as follows:
Clear Property Services Soil Removal Costs Incurred at Footing and Cut Site for Lot 1012 Durham Street.
Subsequently, the Harrison’s paid Clear $1,012.00 for the Stormwater soil removal and received from Clear a receipt acknowledging payment dated 1 March 2015.
On 17 February 2015 Clear paid Scerris $1,548.80 for the Scerri soil removal. On the face of the oral and documentary evidence put before the Magistrate and this Court, it would appear that Clear did not invoice the Harrisons for that soil removal until August 2015.
Fairmont completed construction and handed over to Clear the keys to the house on or about 30 June 2015.
Clear then attended to the installation of the Clear Platinum Package.
Shortly after handover Clear sought to obtain from the Harrisons payment for the Scerri soil removal. The Harrisons queried Clear as to why they were required to pay for a second lot of soil removal.
By email dated 12 August 2016 Lyn Trenwith replied:
In the attached is the first details of the 40 tonne that has been carted and paid for previously by you, this was billed at $22 per tonne and arrangement we have with this contractor in Seaford Meadows.
It is important for me to have you understand that if the Builder is to cart the soil away they charge a minimum of $35 per tonne so by us managing that process it is already a saving but to cover some of our costs and holding cost until the invoice is raised and paid we add the minimum our HIA contract agreement allows. On this invoice the cost through Fairmont would have been an additional $13 per tonne, a saving of almost $400.
With the Contractor who did the second soil removal he was engaged by CLEAR Site Supervisor Tony at a set rate of $24 per tonne this was still cheaper than Fairmont Homes charging $35 minimum. It was also necessary due to the tight site and other construction going on in the nearby blocks, as he trenched he was loading his own truck and removing the soil.
At the time the contractors wife explained they had confusion from the dump with invoicing from them and now she is finding it difficult to produce the invoice for this but has requested to them to provide a copy, to this day they have not supplied that. I did then ask if they could have a Statutory Declaration completed, this is basically him saying under oath that he has dumped the remaining 29 tonne. This declaration does need to be signed off by a JP and with their current situation and his work commitments I am also waiting on this although I only suggested that yesterday.
As mentioned I did want to update you on the status of the final soil removal invoice unfortunately it is not the full invoicing you have requested.
Clear subsequently obtained from Andrew James Scerri (‘Mr Scerri’) a statutory declaration sworn by him on 23 August 2015, confirming the work performed by Scerris, but did not provide the Harrisons with a copy of the declaration until after Clear had commenced proceedings in the Magistrates Court.
The Harrisons subsequently received from Clear an invoice dated 28 August 2015 requiring payment to Clear of $1,781.12 plus 10% GST in the amount of $178.11 (total $1,959.23) with respect to the Scerri soil removal. The invoice stated:
CLEAR Property Services claim for costs to load and haul all excess trenching soil. 64 tonne, for lot 1012 Durham St, Seaford Meadows.
The Harrisons refused to pay Clear for Scerri soil removal.
Proceedings in Magistrates Court
On 25 November 2015 Clear filed a minor civil action claim in the Christies Beach Magistrates Court claiming $1,959.23 plus debt recovery costs ($88.00) and court fees.
The Harrisons filed a Defence and Counterclaim on 4 February 2016. The Defence asserted that the Harrisons were not contractually obliged to pay Clear for any works associated with the construction of the house including soil removal. The Counterclaim asserted that Clear:
·failed to install a dishwasher as required under the Clear Platinum Package for which they received no reimbursement ($433.00); and
·failed to provide the Harrisons with keys for the external doors, windows, the garage ‘Gliderol’ door (remote control) and a water tap which resulted in the Harrisons having to obtain new keys and change the relevant locks for a total cost of $565.00.
These allegations had not been drawn to the attention of Clear prior to the filing of the counterclaim.
The hearing of the action came on before the presiding magistrate on 10 June 2016. Clear was represented by Lyn and John Trenwith and the Harrisons appeared in person.
The learned magistrate received oral evidence from the Trenwiths and the Harrisons in relation to Clear’s claim. In support of the claim, the Trenwiths tendered a booklet titled ‘Plaintiff’s evidence’ which contained copies of documents, most of which I already have referred to in the factual background.
The booklet also contained a copy of the statutory declaration sworn by Mr Andrew Scerri on 23 August 2015 and letters from Mr Antonio Castelluzzo (Clear’s Site Supervisor) and Mr Darryl Quaini (Fairmont Homes’ Construction Manager) both of which were dated 4 November 2015. It is appropriate to set out the contents of these documents.
Mr Andrew Scerri’s statutory declaration stated:
I loaded and hauled soil from Lot 1012 Durham St Seaford Meadows to the following:
PS Haughton Dump O’Sullivan Beach Rd Lonsdale, approx. 35 tonne, there is no weigh bridge.
The rest was dumped at Lot 1187 Simcoe St Seaford + 2037 Cook St Seaford
In total 5 tandem loads hauled from site approx. 13 tonne per load.
Mr Anthony Castelluzo’s letter stated:
I, Tony Castelluzzo have been employed with CLEAR Property Services (CPS) and associated companies for the past 6 years and also hold a Builder’s License no. BLD115246.
It is within my professional opinion that the 104 tonne of soil in dispute was an expected quantity of soil to be removed from lot 1012 Durham St, Seaford Meadows.
I arranged both Contractors to complete all work on this site and believe the charges made were reasonable for the home of this size on this block of land, which I therefore approved payment of the invoices once received from both Contractors by the CPS office.
It is not possible for 64 tonne of soil to be spread across the block, as the owner claims, resulting in his dispute of paying the invoice for removal of this soil. The land is not large enough for that to have occurred and activity on both sites on either side were also under similar work so it had to be removed as trenched.
It is my opinion that the second soil removal invoice is reasonable, works were completed and the owners are responsible for payment.
Mr Darryl Quaini’s letter stated:
Re: Lot 1012 Durham Street, Seaford Meadows – 85761
Clients: Darren Edward James Harrison & Belinda Anne Harrison
I have calculated the approximate amount of excess soil which would have been required to be removed from the site works and footings for the foundations at the above address.
My calculations based on the levels on the drainage plan and footing layout by TMK Engineers dated August 2014. I would anticipate 50-60 tonnes of dirt would have been removed from the site works, and a further 40-50 tonnes of dirt would have been removed from the footing trenches.
The exact quantity cannot be given as this depends on the site conditions as the time.
You advised that the total amount of soil that was actually removed from this site from the site works and footings was 104 tonnes, I would say that this would be correct based on my calculations.
Magistrate’s Decision
The magistrate gave the following reasons for entering judgment in favour of Clear in relation to its claim against the Harrisons:
1 … In my view, it just boils down to this, the work needed to be done. The defendants had contracted to have a house built. Part of that required the removal of soil, so, as I said, the work needed to be done. The work was done. It was organised by the plaintiffs with someone that they had used commonly. The plaintiffs were the building project managers. It was clearly contemplated in the contract that this type of work would be required, because there was an allowance for it. There is, I note, a credit back from the contract to the plaintiffs.
2 I am of the view that the defendants are clearly liable for this. The defendants have raised claims that the plaintiffs had engaged in criminally fraudulent conduct; that they are basically out to get them; and they dispute just about everything in this matter.
3 However, I am not satisfied about any of that. I do not believe a word of what they are saying. I completely accept the plaintiffs as truthful and reliable, and I award judgment in their favour of $1,959.23, plus a $138 filing fee.

It is clear that the magistrate made no findings in relation to the Harrisons’ counterclaim. Indeed, the transcript of the hearing reveals that he failed to give the Harrisons an opportunity to present any evidence, or to put any argument, in support of their counterclaim. Furthermore, his Honour made no orders with respect to the counterclaim.
Application for Review
On 13 September 2016 the Harrisons filed in this Court an application to review the Magistrate’s decision.
On 25 October 2016 the Harrisons filed an amended application which largely elaborated on the original grounds for seeking a review.
There is no need to set out in any detail the grounds upon which the Harrisons rely because they are somewhat discursive. For present purposes, it is sufficient to say that they complain that the Magistrate erred in two respects: first, in determining that the Harrisons were liable to pay Clear for the Scerri soil removal; and, second, in failing to consider the Harrisons’ counterclaim.
Principles governing a review
Section 38 of the Magistrates Court Act 1991 (MCA) governs the conduct and disposition of minor civil actions. Section 38(6) provides that a District Court Judge may, on the application of a party dissatisfied with a judgment given in a minor civil action, review the matter. Such a review is final and not subject to appeal (s 38(8)).
The principles to be applied on a review are set out in s 38(7) which provides that the Court may inform itself as it thinks fit and, in doing so, is not bound by the rules of evidence and may, if it thinks fit re-hear evidence taken before the Magistrates Court. In hearing and determining the review, the Court must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
On the hearing of the present application, I had regard to the evidence and exhibits tendered in the Magistrates Court hearing and received further oral evidence and exhibits from Mr and Mrs Harrison and Mr and Mrs Trenwith.
Application for extension of time
Rule 111(2) of the Magistrates Court (Civil) Rules 2013 (MCR) provides that a review by the District Court of proceedings in a minor civil action must be instituted under r 279A of the District Court Civil Rules 2006 (DCR) which in turn provides that an application for review ‘must be commenced within 21 calendar days after the date of the judgment or decision subject to review’.
In the present case, the Harrisons’ application was filed on 13 September 2016. Compliance with r 279A required that it be filed by 1 July 2016. Accordingly, it was out of time by over two months. The Harrisons now apply for an extension of time within which to commence the application for review. Clear opposes the application.
Power to grant extension of time
Before considering the merits of the application, it is necessary to identify the Court’s power to grant an extension time for the filing of an action to review a minor civil action. While I am satisfied that such a power exists, the source of the power is less than clear due to a possible lacuna in the DCR.
Rule 279A fails to provide the court with power to extend the time limit prescribed by that rule. However, the Court is given a discretionary power to extend time limits prescribed in the DCR under r 117, which relevantly states:
Power to make orders controlling conduct of litigation
117    (1)     The Court may make any order it considers necessary for the proper conduct        of a proceeding or otherwise in the interests of justice.
(2)     The Court may (for example) –
(a)     dispense with compliance with a rule;
(b)     extend or reduce the time for taking any step in a proceeding;
…
(3)     The Court may exercise its power to extend a time limit even though the              relevant time limit has expired.
It can be seen that r 117(2)(b) provides the court with a discretionary power to extend or reduce the time for taking any step in a proceeding. Rule 4 contains the following definitions:
·‘proceeding’ is defined to include ‘(a) an action, interlocutory proceeding or appellate proceeding; and, (b) any step in an ‘action, interlocutory proceeding or appellate proceeding’; and
·‘appellate proceeding’ is defined to mean ‘(a) an appeal; or (b) a question of law arising in proceedings before a Master’.
I doubt whether r 117 provides this Court with the power to extend the time prescribed in r 279A because a review of a minor civil action is not an appeal and therefore does not constitute an ‘appellate proceeding’.
The word ‘appeal’ is not defined in the DCR. However, the rules contained in ‘Chapter 13 – Appellate proceedings’ (Rules 281-300) expressly apply to the conduct and disposition of an ‘appeal’ appeals to the District Court whereas the rules governing the conduct and disposition of reviews are in a separate chapter, namely, Chapter 12A – ‘Applications to Review Proceedings and Decisions’.
It is evident from the dichotomy created by Chapters 12A and 13 that appeals and reviews are different types of proceedings. For example:
·the time within which an appeal must be commenced is set out in r 281, whereas the time limit for a review is expressly contained in r 279A(3);
·the notification requirements for an appeal are prescribed by r 284, whereas the notification requirements for reviews are set out in r 279A(4) and (5);
·the required notices and procedure for cross-appeals are set out in r 285 whereas the requirements for review cross-notices are provided for in r 279A(6);
·there are significant differences between the manner in which an appeal is heard (r 286) and the more relaxed way in which a review may be conducted (s 38(7)(b)(c) and (e) MCA); and
·there are substantial differences between the powers a judge may exercise on an appeal (r 286) and those that may be exercised on a review (s 38(7)(d) MCA).
I note that in Henley v Cook [2016] SADC 147 Slattery DCJ considered that the power to extend the time limit contained in r 275A resided in r 295(1) DCR which vests in a District Court Judge a discretion to ‘extend the time for commencing the appeal or taking any step in the appeal’. For the reasons that I have expressed, I respectfully question the correctness of that view.
In my view, the Court’s power to extend time lies in s 48 of the Limitation of Actions Act 1936 (SA) which relevantly provides:
Extension of certain periods of limitation
48    (1)     Subject to this section, where an Act, regulation, rule or by-law prescribes or         limits the time for –
(a)     instituting an action; or
(b)     doing any act, or taking any step in an action; or
(c)     doing any act or taking any step with a view to instituting an action,
a court may extend the time so prescribed or limited to such an extent, and            upon such terms (if any) as the justice of the case may require.
(2)     A court may exercise the powers conferred by this section in respect of any                  action that –
(a)     the court has jurisdiction to entertain; or
(b)     the court would, if the action were not out of time, have jurisdiction to                  entertain.
...
(6)This section does not derogate from any other provision under which a court may extend or abridge time prescribed or limited by an Act, regulation, rule   or by-law.
Section 48(1) gives a court a discretionary power to, inter alia, extend the time for instituting any ‘action’ prescribed by any rule provided it does not derogate from any other provision under which a court may extend time. For the purposes of s 48(1) ‘action’ is defined to include ‘legal proceedings of all kinds’ (s 3). In my opinion, this definition is would enough to embrace reviews under r 275A. As Cox J stated in Calvaresi and Rota Forma Pty Ltd v Lawson:[1]
Section 48 operates where any Rule prescribes the time within which any step must be taken in any legal proceedings, and s 48 would apply in the circumstances of an appeal from the District Court to the Supreme Court, governed by the Supreme Court Rules.
There is a curiosity about a Court being asked to use s 48 to extend time in circumstances where the Court’s own Rules provide that an appeal has lapsed and can only be revived in particular circumstances. But s 48 is clear in that it applies to the Rules of Court of the Supreme Court. Section 48(6) does not prevent the use of s 48 in circumstances such as this because it only applies so as not to derogate from any other provision under which a Court may extend or abridge the time prescribed by a Rule. Dunn v Wilkinson (1979) 22 SASR 129. The purpose of s 48 is to ameliorate the hardship caused to a party who might be barred from approaching the Court by reason of strict time limits. R v Di Fazio (1979) 20 SASR 559. The statute, therefore, can be used for the purpose of ameliorating the hardship caused to a party by the inflexibility of a Rule of Court, where it would be in the interests of justice that the hardship be averted.
[1] (1995) 184 LSJS 147 at 153-154.
His Honour’s remarks were expressed in the context of the Supreme Court Rules but obviously they apply with equal force to reviews and appeals governed by the DCR.
Accordingly, by virtue of s 48 I have the power to extend the 21 day time limit imposed by r 275A ‘to such an extent, and upon such terms (if any) as the justice of the case may require’. The object of the power is to give the court in every case a discretion to extend time with a view to avoiding injustice.[2] In determining whether the justice of the case requires an extension it is well settled that it is necessary to have regard, inter alia, to the length of the delay, the reasons for the delay, whether the applicant has an arguable case and the prejudice to the respondent.
[2] Schafer v Blyth [1920] 2 KB 140 at 143.
Merits of application
The Harrisons contend that the application for a review was filed late because they had requested a copy of the transcript of the hearing in the Magistrates Court on 10 June 2016 in order to properly prepare the application. The transcript was not available for collection until 8 September 2016 and the application was filed in the District Court Registry only five days later on 13 September 2016.
Clear question the Harrisons’ explanation because the type-written date 13 August 2016 appears under their signatures on the review application. The implication of Clear’s challenge is that the Harrisons completed and signed the application for a review on 13 August 2016 but delayed filing it until 13 September 2016.
I accept the Harrisons’ explanation for the delay. I believe that the date on the application for a review is a typographical error and that the Harrisons signed the application on 13 September 2016, the day upon which it was filed in the District Court Registry. In any event, it was not unreasonable for the Harrisons to delay filing their application until after the transcript was made available. Only then could they properly prepare their application. Furthermore, the delay has caused no relevant prejudice to Clear and the issues raised by the Harrisons are arguable. Indeed, there can be no doubt about the legitimacy of their complaint that the Magistrate failed to consider their counterclaim.
For these reasons, the application for an extension of time is granted to the extent required.
Clear’s claim
The learned magistrate’s reasons were brief but suggest that he considered that the Harrisons were contractually bound to reimburse Clear for the costs of the Scerri soil removal because (i) under the Fairmont Contract the Harrisons were liable for the costs of removing excess soil and (ii) Clear were authorised as the Harrisons’ ‘project managers’ to engage sub-contractors on their behalf to remove excess soil.
The Harrisons contend that the Magistrate fell into error because the Project Management Contract did not authorise Clear to carry out any soil removal work on their behalf and that any costs incurred by Clear having engaged Scerris should be borne by Clear. Furthermore, while the Harrisons accept that under the Fairmont Contract they were responsible for removing and paying for the removal of all excess soil, they maintain that this obligation was subject to them receiving from Fairmont an allowance of $1,500.00 which they never received. As I understood the Harrisons, if they were liable to reimburse Clear for Scerri soil removal the debt would be subject to an offset of $1,500.00 on account of the allowance under the Fairmont Contract.
Offset argument
It is convenient to deal with the offset argument first.
As earlier explained, Clear maintain that the Soil Cost Variation dated 29 October 2014 varied the Fairmont Contract so as to require the Harrisons to pay for all soil removal costs. At the same time the Harrisons received from Fairmont a credit of $1,500.00 in lieu of the allowance provided for in the original contract.
In my view the Soil Cost Variation was not a valid variation under the Fairmont Contract. The contract stipulated that both parties had to agree to any variation (cl.12). The Soil Cost Variation was signed by Fairmont’s representative but was not signed by the Harrisons. Nor is there any evidence that they orally agreed to the variation. In any event, the terms of the Soil Cost Variation did not vary the Fairmont Contract at all. It stated that the ‘cost and removal of all surplus soil from all site works, footings service trenches … is by the Owner’ and effectively restated the Harrisons obligations as set out in Annexure A of the Fairmont Contract.
The more significant issue is whether Fairmont Homes in fact gave the Harrisons a credit of $1,500.00 in lieu of the allowance provided for in the contract. The magistrate found that the Harrisons did receive this credit. There was documentation to support that finding. There is no sound reason for interfering with the magistrate’s findings on this point. Indeed, I would have reached the same conclusion. In the circumstances, the Harrisons could hardly claim as an offset monies already received by them.
In any event, even if the Harrisons remained entitled to an allowance of $1,500.00 under the Fairmont Contract for excess soil removal their claim for that allowance would lie against Fairmont. It could not be used as the basis for an offset against Clear. Their contractual dealings with Clear were separate and distinct from their contractual dealings with Fairmont Homes.
Clear’s authority to engage Scerris
The key contractual issue is whether Clear were authorised in their capacity as ‘project managers’ to engage Scerris to remove excess soil.
The services that Clear were authorised to perform on behalf of the Harrisons as set out in the Project Management Contract were to ‘liaise with [Fairmont Homes and the Harrisons] and assist in choosing all selections with regards to the internal and external construction of the home’ and to ‘provide reports to advise stages of completion during the construction stages’. The Trenwiths contend that it was their belief that these terms were broad enough to authorise Clear to engage Scerris on their behalf.
The law provides that the meaning of a term in a contract is to be determined objectively; that is by what a reasonable person in the position of the parties would have understood them to mean. The legal rights and obligations of the parties turn upon what their words would be reasonably understood to convey, not upon their actual beliefs or intentions. In my view, no reasonable person would share the Trenwith’s understanding of these terms. Clear was given no authority under the Project Management Contract to engage contractors to carry out any construction work or associated works such as soil removal on the Harrisons behalf. Accordingly, Clear is not entitled to recover the costs of Scerri soil removal under that contract. However, for the reasons set out below, I consider that the Harrisons are liable to be reimbursed for those costs under the remedy of restitution or unjust enrichment.
Restitution
The term ‘restitution’ refers to the remedies provided by the law to compel the payment of money by A to B where it would be unjust to allow A to retain the benefit of money, goods or services which A has received at the expense of B. A remedy in restitution is imposed by the law independently of contract. An action in remedy is usually brought either because there is no express contract between the parties or such contract is void or unenforceable. Accordingly, an action restitution may provide a remedy where otherwise there would be none.[3]
[3] C. Turner, Australian Commercial Law, 29^th ed. Lawbook Co. at [12.430].
Restitution consists of the following four elements:[4]
·the defendant has received some form of benefit (ie has been ‘enriched’);
·the benefit or ‘enrichment’ was at the plaintiff’s expense;
·it would be ‘unjust’ to permit the defendant to retain the benefit; and
·there are no defences available to the defendant, for example change of position, estoppel, incapacity or illegality.
[4] See Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Lumbers v W. Cook Builders Pty Ltd (In Liq) (2008) 232 CLR 635.
In the present case, the Harrisons were responsible for removing excess soil under the Fairmont Contract. By virtue of Clear paying for Scerri soil removal the Harrisons received a benefit at Clear’s expense. In my view, it would be unjust to permit the Harrisons to retain that benefit without reimbursing Clear. There are no legal defences available to the Harrisons that would otherwise exclude the availability of this remedy.
The above finding is subject to consideration of the following points. The Harrisons suggested on the hearing in the Magistrates Court, and on the review hearing in this Court, that Scerris (i) may not have performed any soil removal work or (ii) may have not have removed the amount of soil they claimed to have removed.
As earlier explained, Clear claim that Stormwater removed excess soil created after the Site was levelled and that Scerris removed soil that had been excavated from the footing trenches. The Harrisons suggestion that Scerris may not have removed any soil is based on the fact that the invoice Clear received from Stormwater stated that it related to ‘soil removal after footing trenches excavated’.
The Magistrate was entitled to act on Mr Scerri’s letter, the Statutory Declaration of Mr Castelluzo (Clear’s site supervisor) and the letter from Darryl Quaini (Fairmont’s Construction Manager). That material established that soil was removed from the Site following levelling and later from the footing trenches. The evidence established that Stormwater conducted the soil site removal and that Scerris conducted the trench soil removal. I am satisfied, as the Magistrate must have been, that the Stormwater invoice was incorrectly expressed.
The Harrisons suggestion that Scerris may not have removed the amount of soil they claimed to have removed (i.e. 64 tonnes) was based on Mr Harrison’s evidence that on the day or one of the days that trenching work was watching the work being carried out from a position opposite the Site. He said he only saw two trucks carry away trench soil and that a lot of the soil that had been removed had been used to level the Site. However, that evidence is not necessarily inconsistent with Clear’s case (supported as it was by the abovementioned letters and statutory declaration) that five truckloads of excess trench soil weighing in total about 64 tonnes were removed from the Site. Mr Harrison may not have been present when the other three truckloads of soil were carted away.
For the above reasons, I find that the Harrisons are liable to pay Clear in relation to the Scerri soil removal.
Counterclaim
The Harrisons’ complaint that the Magistrate failed to consider their counterclaim must be upheld. As mentioned, he failed to give the Harrisons an opportunity to present any evidence or to put any argument in support of the counterclaim and made no orders in relation to it. By reason of this failure I decided to receive evidence from the parties on this issue and to determine the matter myself.
The dishwasher

The Clear Platinum Package specified that the prices of various listed items were included in a total cost of $62,425.00. The listed items included ‘Supply and Install Stainless Steel Dishwasher’. The package did not identify the brand or the cost of the dishwasher or the installation costs.
On 28 July 2015 the dishwasher that was to be supplied under the Clear Platinum Package was delivered to the house. That night thieves broke into the house and stole the dishwasher before it could be installed. They also stole an oven and damaged windows to the premises. The Harrisons later made a claim under their insurance policy with SGIC for these losses. The dishwasher and oven were replaced and the damaged windows repaired. However, the Harrisons were required to pay under their insurance policy excess in the amount of $1,000.00. Apparently, the costs incurred by SGIC to install the dishwasher amounted to $430.00. The Harrisons now seek to recover that installation fee from Clear.
In the present case, through no fault of either party, Clear’s contractual obligation to install the dishwasher was frustrated by the theft of the dishwasher. That event made it impossible for Clear to discharge its obligation to install the dishwasher. At common law the occurrence of frustration will automatically discharge the parties from their obligations under the contract.[5] Where the impact of frustration is to cause a total failure of consideration the payer will be entitled to restitution.[6]
[5] Hirji Mulji v Cheong Yue Steamship Co Ltd [1926] AC 497.
[6] Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32; see JW Carter, Contract Law in Australia, 6^th ed LexisNexis Butterworths 2013 [34-11].
In the present case, by reason of the frustrating event (theft) Clear would be discharged of its obligation to install the dishwasher under the common law. Furthermore, the Harrisons would not be entitled to recover money paid under the Clear Platinum Package for the installation because there had not been a total failure of consideration by reason of Clear’s supply of the dishwasher.
The harshness of several aspects of the common law including the total failure of consideration concept has been abrogated in South Australia by the Frustrated Contracts Act 1988 (FCA). The FCA regulates the consequences of frustration and provides that on frustration there is to be an adjustment between the parties so that no party is unfairly advantaged or disadvantaged in consequence of the frustration (s 7(1)). A formula is provided for making an adjustment between the parties (s 7(2)). However, where the court considers that, in the circumstances of a particular case, there is a more equitable basis for making an adjustment between the parties then the court can make an adjustment on that basis rather than the one outlined above: s 7(4). The court is given wide powers including the power to make an order for the payment of money (s 7(5)).
The Harrisons paid Clear $62,425.00 to install the Clear Platinum Package. There is no evidence as to how much of the price was intended to cover the costs of installing the dishwasher. Regardless of the amount earmarked for the dishwasher’s installation, the Harrisons are not entitled to restitution of that amount of money because they suffered no such loss. The dishwasher was replaced and installed by SGIC under the Harrisons’ insurance policy.
Nor are the Harrisons entitled to restitution of the $430.00 fee for the installation of the replacement dishwasher. This fee was not paid by the Harrisons but by SGIC. As I understood the Harrisons’ argument on the review hearing they ought to be reimbursed for a portion of the excess fee of $1,000.00. That argument must be rejected. The Harrisons’ obligation to pay excess arose under their contract with SGIC. Restitution against Clear is only available to the Harrisons in the context of their contractual relationship with Clear. In any event, there is no evidence as to what proportion of the paid excess, if any, can be attributed to the installation fee for the dishwasher. Indeed, the Harrisons may have been obliged to pay excess even if their claim under the SGIC policy did not include a claim for that particular fee.
The keys
I now turn to the Harrisons’ claim that Clear failed to provide them with various keys which resulted in the Harrisons having to obtain new keys and to change the relevant locks for a total cost of $565.00.
On the hearing of the review, Mrs Trenwith gave evidence that on 3 August 2015 Clear received final payment from the Harrisons for the Clear Platinum Package and handed over the keys to the house by placing them in a coded lock box attached to an external wall of the house. The keys comprised keys for the external doors, a tap key and a remote control for the garage roller door.
On the hearing of the review the Harrisons agreed with this evidence but said that they replaced the locks and the keys which had been given to them because they feared that the theft to which I earlier referred may have been carried out by a tradesman contracted by Clear who would have had an opportunity to obtain copy keys. According to Mrs Trenwith there was no substance in the Harrisons’ concerns. Be that as it may Clear discharged its obligation to provide the Harrisons with the keys in question. The Harrisons’ decision to change the locks did not cast upon Clear an additional obligation to provide new keys and locks. The Harrisons’ claim must be rejected.
Orders
1.Application for an extension of time for District Court to review decision in Magistrates Court Minor Civil Action No. CHBCI-15-476 is granted.
2.Magistrate’s decision in the said action that Darren and Belinda Harrison pay Clear Property Services $1,959.23 (plus $138.00 filing fee) is affirmed.
3.Counterclaim by Darren and Belinda Harrison against Clear Property Services is dismissed.