Heaven Builders Pty Ltd v Moustafa (No 2) - [2024] ACTMC 13

MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Heaven Builders Pty Ltd v Moustafa & Anor (No 2)
Citation:	[2024] ACTMC 13
Hearing Dates: Last submissions:	4, 5 and 6 June 2024 19 July 2024
DecisionDate:	26 July 2024
Before:	Magistrate Theakston
Decision:	See orders set out at [79].
Catchwords:	CIVIL LAW – BUILDING AND CONSTRUCTION – Breach of Contract – Progress payments - Painting stage not completed - Deemed practical completion – Builder wholly suspends building works – Liquidated damages for delay – Damages for completing building works
Legislation Cited:	Building Act 2004 (ACT) Court Procedures Rules 2006 (ACT), rules 473, 1619, 1622
Cases Cited:	Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24 Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; 149 CLR 337 Hera Project Pty Ltd v Bisognin (No 3) [2017] VSC 268 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37 Wilkie v Gordian Runoff Ltd [2005] HCA 17
Parties:	Heaven Builders Pty Ltd ( Plaintiff) Nour Moustafa Abeldhameed Moustafa (First Defendant) Marwa Mohamed Elsaeid Hassan Keshk ( Second Defendant)
Representation:	Counsel W D B Buckland ( Plaintiff) Self-represented ( Defendants)
Solicitors Bradley Allen Love ( Plaintiff) Self-represented ( Defendants)
File Number:	CS 182 of 2022

MAGISTRATE THEAKSTON

Introduction

This matter involves mutual claims between a home builder and the owners of the home being built. The building company claims full payment under the contract including a variation, notwithstanding the build being incomplete, on the basis that the owners took possession of the site, and the company was unable to complete the building works. The owners claim the costs of completing the building works minus the amount unpaid on the contract. They also claim $25,000 from the builder due to missing out on a homeowners’ grant and liquidated damages, as provided in the contract, for the delay in the completion of the build.

Background

The following facts were not controversial, and I make findings accordingly.
The plaintiff is the building company Heaven Builders Pty Ltd. Initially, the two directors of the company were Muhammad Niazi and Khalil Khattak. At one point during the project, Mice Kljusuric was appointed as an additional director. He had previously been the nominated person with a builder’s licence engaged by the company to supervise the project. It appears the project in question was the first, or at least one of the first, projects for the builder. Neither of the initial directors held a builder’s licence. However, not much turns on that as the company held a builder’s licence for all but three hours during the material period.
The defendants, Dr Moustafa and Dr Keshk, are husband and wife and the owners of the land on which the home was being built.
There were some complexities leading up to the relevant contract. An initial contract was signed by the parties to build a single storey home on the owners’ land in the suburb of Taylor in the Territory.…

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: [2024] ACTMC 13
Decision Date: 26 July 2024

CaseChat Overview and Summary

The case of Heaven Builders Pty Ltd v Moustafa (No 2) involved the plaintiff, Heaven Builders Pty Ltd, a building contractor, and the defendant, Mr. Moustafa, a homeowner. The dispute centred around issues of breach of contract, progress payments, and the completion of building works. The matter was heard in the Supreme Court of New South Wales.

The primary legal issues the court needed to address were whether the plaintiff was entitled to a progress payment for the painting stage, despite not being completed, and if the defendant was liable for liquidated damages and costs associated with completing the building works after the plaintiff had suspended its operations due to non-payment. The court had to interpret the terms of the building contract, particularly the provisions relating to practical completion and payment schedules, to resolve these disputes.

The court examined the contractual terms and found that the painting stage, though not completed, was included in the deemed practical completion clause. This allowed the plaintiff to claim progress payments for stages that were substantially completed. Regarding the suspension of works, the court determined that the plaintiff's suspension due to non-payment did not absolve the defendant of his contractual obligations. The court held that the defendant was liable for liquidated damages as stipulated in the contract and for additional costs incurred by the plaintiff to complete the works. The court found that the plaintiff had acted reasonably in suspending work due to the non-payment and that the defendant's actions constituted a breach of contract.

The court ordered the defendant to pay the plaintiff the outstanding progress payment for the deemed practical completion, including the painting stage, as well as liquidated damages and additional costs for completing the building works. The specific amounts and details of these payments were set out in the orders at [79].

Orders

Orders of the court

See orders set out at [79].

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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