Howland v Michalski No. DCCIV-03-1152

HOWLAND V MICHALSKI
[2004] SADC 71
Judge Kitchen
Civil

This is an application made pursuant to section 38(6) of the Magistrates Courts Act 1995 for a review of the matter of a judgment entered in a minor civil action.
The applicant was the plaintiff in the action which she instituted against the respondent on 16^th October 2001 claiming $4,500 for the respondent’s alleged breach of a contract, made between them on 8^th September 2001, concerning work to be carried out by the respondent in respect of the plaintiff’s residence at 83 Flockhart Avenue, Valley View. The proceedings were instituted as a minor civil action.
On 16^th August 2002 the applicant was given leave to amend her particulars of claim by substituting a claim for $15,701.80, by way of damages, the allegations being:
· that on or about 8^th September 2001 the respondent agreed that, for the sum of $7,575, the respondent would construct a driveway, construct a (retaining) wall and construct a suspended patio slab on the site of the applicant’s residence.
· that in breach of the agreement the respondent did not construct the wall in accordance with the agreement, or proper engineering specifications, and did not construct the suspended patio slab at all.
The document which the applicant was given leave to file is headed “Magistrates Court (Civil Division) South Australia. Amended Claim. Form No. 2”. The magistrate who granted the application to amend the claim noted he had informed the respondent that the proceedings were “no longer a small claim but a General claim”.
By his defence filed on 9^th September 2002 the respondent pleaded that the wall constructed by him was structurally adequate and there was no breach of contract by him “as the plaintiff Ms Howland evicted me off her property and would not let me complete the remaining work”.
On 18^th October 2002 with the consent of the parties an order was made, pursuant to section 10AB of the Magistrates Court Act 1995, that the proceedings be heard and determined as a minor civil action.
The applicant and the respondent appeared and gave evidence at the hearing of the proceedings which extended over two days.
The applicant’s evidence was that she, and her then husband, contemplated additions to their house property at 83 Flockhart Avenue, Valley View. They obtained drawings and specifications from Peter S. Koukourou Pty Ltd, in 1981, and McIntosh Taylor Consultants Pty Ltd, in 1984, from the former in relation to a proposed retaining wall and from the latter in relation to a suspended concrete slab for a rear balcony which was part of other additions to the house included in the drawings and specifications prepared by McIntosh Taylor. The drawings and specifications were tendered at the trial. The applicant, on the hearing of the review, identified the drawings and specifications to be the documents which were received on the review as Exhibit P1.
The applicant’s evidence was that in November 2000 she provided the drawings and specifications to the respondent and requested a quotation for the construction of the retaining wall, the suspended concrete slab and also a concrete driveway; I note the latter is not included in the drawings and specifications. The respondent gave a written quotation on a letterhead of the business name under which the respondent traded. It is dated 14^th November 2000 and reads:
“Quotation:- For retaining wall, suspended slab for a deck, driveway and footpath. Supply and Fix $5,775. Kerry Campbell Engineering; remove existing deck, railing. Supply and fix welding, angle iron, Chem-Weld bolts. Supply and fix $1800.”
At the trial the respondent agreed he saw the drawings and specifications before he provided his quotation (T 10/11).
The applicant did not immediately proceed with any of the work. As the learned Magistrate recounted, and found, in his reasons for judgment:
“It appears that nothing was done to accept that quote until September 2001 when the defendant was again asked if he could do the work and if his original quote still applied. According to the plaintiff, the defendant agreed to do the work for the same price upon condition that he was paid the sum of $4,500 “up front” to begin the work. Of this amount, the sum of $3,500 was to be paid by way of bank cheque payable to “Davalan Concrete” and $1,000 was to be paid to the defendant. The plaintiff said that she specifically agreed with the defendant that the balance of the money for labour would be paid at the completion of the contract.
I note that the plaintiff alleges that there was no further documentation in relation to the contract other than the quote of 14 November 2000. The defendant on the other hand produced a further quote at trial dated 10^th September 2001, which he said he had provided to the plaintiff as the result of the further discussions. This quote took the value of the work to be done, which included work which was not contained in the original quote, to $10,555.
The plaintiff denied ever having received the second quote. I accept her evidence in that regard.”
The applicant’s evidence was that the works were not carried out in the sequence she had asked they be done, she was of the view the concrete used for the retaining wall was not delivered pre-mixed to the site but was mixed on the site and the retaining wall was neither constructed as the specification required nor was it of the length that had been agreed. The applicant became disillusioned with the respondent’s workmanship, made inquiries to the concrete supplier, and others, the respondent demanded payment of $2,000 before he would proceed further and after confrontations between her and the respondent, including an event concerning the removal of the respondent’s equipment from the site in the presence of police officers called in by the applicant, she set about composing a letter to the respondent which she delivered to him on 20^th September 2001.
The magistrate found that the respondent had constructed the driveway and the retaining wall, but not the suspended slab, by the time the applicant wrote the letter which is dated 16^th September 2001. As to that letter the magistrate observed in his reasons:
“… (it) contains an ultimatum to the defendant. If he agreed to enter into the proposed contract as contained in the letter he would be able to continue with the work. If he did not then the plaintiff made it clear that she did not wish the defendant ‘to continue with further work’. In the circumstances it would appear that she has terminated the contract. She is under no further obligation to the defendant. The current proceedings contained no claim or counter-claim by the defendant. The defendant is under no obligation to commence or complete the suspended slab. He has carried out his obligations with respect to the driveway and the retaining wall with the exception of the agricultural drain which I find to be part of the retaining wall.
The plaintiff has also shown that the defendant did do some work at the rear or her premises which has seriously restricted her access to the backyard. This was in the nature of removal of some of the existing steel work. This must be replaced.”
The magistrate went on:
“The plaintiff has also claimed various costs.
In all of the circumstances and taking into consideration that the original quote for this work was given in November 2000, the hostility that has developed between the parties, the absence of any detailed plans for the suspended slab and the huge divide between the versions of events put forward by either party I make the following orders.
1.That the defendant complete the agricultural drain for the retaining wall (and for the purpose of this order the retaining wall is that part of the wall erected by the defendant as a retaining wall).
2.That the defendant reinstates the steelwork removed at the rear of the plaintiff’s premises to enable her to regain access to her backyard.
3.That all remaining work be carried out within 30 days of today.
4.That the plaintiffs claim is otherwise dismissed.
I shall hear the parties in relation to costs.”
The applicant complains:
·    that on the evidence before the magistrate, and having found that the work the respondent agreed to carry out was “building work” within the meaning of the Building Work Contractors Act 1995, the magistrate should have found that the respondent was not licensed pursuant to that Act to carry out the work and was otherwise in breach of the Act (grounds 1 and 2).
·    that the magistrate erred in finding that the applicant terminated the agreement between her and the respondent and that the magistrate should have found the respondent liable to the applicant for the cost of constructing the suspended slab (ground 3).
·    that the magistrate erred in his findings concerning the retaining wall (ground 5).
·    that the magistrate erred in requiring the respondent to carry out work which the respondent was not licensed to carry out (ground 4).
It appears from this Court’s file that the respondent was given notice of the application for review; he did not appear either on the date for which it was set for hearing or the date to which it was adjourned, notice of which was also given to him.
In support of the application the applicant handed up what she identified to be a written case of the submissions she wished to make on her application.
Grounds 1 and 2
As is apparent from the grounds of the application for review a substantial complaint made against the judgment concerns the status, and the obligations, of the respondent pursuant to the Building Work Contractors Act 1995 (“the BWC Act”).
When the application for review was called on, the applicant informed the court that she had subpoenaed Mr Graham Close and Mr Eric Palfelt, two employees of the Office for Business and Consumer Affairs. I was of the tentative view that the applicant should not be permitted to call evidence which could and should have been called at the trial, however, because the applicant had brought both gentlemen to the court I determined to hear them in case, after hearing the applicant and reading the transcript of the evidence before the magistrate, I concluded that their evidence should be received.
At the trial the applicant called Mr Palfelt and through him sought to prove that the respondent, in September 2001, (and at the time of the trial) was not the holder of a licence pursuant to the BWC Act which authorised him to perform all the works. Mr Palfelt’s evidence was that the licence granted under the BWC Act to the respondent authorised him to perform footing construction work and concrete floor paving work. Questioned by the magistrate concerning the range of work comprehended by footing construction work compared with that which Mr Palfelt identified to be another kind of work called formwork erection, Mr Palfelt told the magistrate he was not a tradesman and was not able to explain the difference between them. The respondent admitted he was not authorised by his licence to construct a free-standing retaining wall but asserted the wall he had agreed to build for the applicant was not such a wall; it was part of a foundation. Mr Palfelt acknowledged to the magistrate that that was not in his area of expertise and said he was not able to comment on the respondent’s assertion.
The magistrate found that the work the respondent agreed to carry out was “building work” as defined in the BWC Act and, by virtue of the regulations under the Act, it was “domestic building work”. I agree with that conclusion and also the conclusion that the work was not “minor domestic building work” as defined in the regulations under the BWC Act - the contract between the parties was entered into before 15^th October 2001 and the price was greater than $5,000 - and therefore the contract was required to comply with the provisions of section 28 of the BWC Act.
The magistrate had before him, although it was not tendered, a certificate pursuant to section 59(3) of the BWC Act certifying, inter alia, that from 1^st June 1996 the respondent was the holder of a building work contractor licence “for ‘footing construction’ and ‘concrete floor paving’” pursuant to the Act.
After Mr Palfelt’s evidence was completed the magistrate told the applicant there was no allegation in her particulars of claim that the respondent was not licensed to carry out the work, that Mr Palfelt’s evidence was inconclusive on the question of whether the respondent held a licence authorising him to perform the work and she should have summoned to give evidence an employee of the licensing section. The applicant said, in effect, that she had been told she could rely on the section 59(3) certificate and that it was for the court to summons a witness from the licensing section. The magistrate informed the applicant it was for her to arrange for a witness to be summoned in the same way she had summoned Mr Palfelt.
Later in the trial the applicant again raised the same topic with the magistrate. She informed him she had gone to the licensing branch during an adjournment and been told that the respondent was only “qualified” to construct “a footing .... like a house foundation”. The magistrate again informed the applicant that her relating what she had been told by someone else could not be taken by him as evidence.
On the evidence before the magistrate it is not surprising that he concluded he was “simply unable to determine if (the respondent) is, or is not, licensed to carry out the work involved in erecting the retaining wall and the suspended slab” (paragraph 42 of his reasons).
In my view the applicant was given sufficient opportunity to present her case.
Mr Close is the manager of licensing operations in the Office of Consumer and Business Affairs. He holds a bachelor of commerce degree; he said he had worked for the Department of Public and Consumer Affairs for about eighteen years. He was shown a bundle of documents which the applicant said included the specifications for the retaining wall and the suspended slab which were before the magistrate. I received them as Exhibit P1. Mr Close read, from what he called a glossary of building terms issued by Standards Australia, a definition of a retaining wall and of paving by reference to which he told the court that the retaining wall was not a footing and the suspended slab was not paving. However he said he has no training or expertise in building matters “just experience in the administration of the regulations and (the) Act”.
In my opinion the combined effect of the evidence given at the trial, and the evidence of Mr Close if it had been given, does not so clearly demonstrate the respondent’s licence did not authorise him to carry out the work that such a finding could have been made, except possibly that the licence did not extend to the work of constructing the suspended slab. However as to the latter, as I understand the respondent’s evidence at the trial, the work of making and fixing the formwork to fashion a raised deck, on which a concrete slab would be poured, was to be carried out by Kerry Campbell Engineering. There was no evidence whether or not Campbell held a licence and how that issue may have had a bearing on the respondent’s proposed work in relation to the slab for the purposes of the BWC Act.
Even if the respondent’s licence did not authorise him to carry out the work, the only effect of that would be to disentitle the respondent from “any fee, other consideration or compensation under or in relation to” the contract with the applicant; section 6(2) of the BWC Act. That section provides:
“(2)A person required by this Act to be licensed as a building work contractor is not entitled to any fee, other consideration or compensation under or in relation to a contract with another on whose behalf the person performed the work as a building work contractor unless -
(a)the person was authorised to perform the work under a licence; or
(b) a court hearing proceedings for the recovery of the fee, other consideration or compensation is satisfied that the person’s failure to be so authorised resulted from inadvertence only.”
In Nunkuwarrin Yunti v A L Seeley Constructions Pty Ltd (1998) 72 SASR 21, the court construed section 39 of the Builders Licensing Act 1986; that Act was repealed by the BWC Act. Section 39 provided:
“39.An unlicensed person who performs building work in circumstances in which a licence is required under this Act shall not be entitled to recover any fee or other consideration in respect of the building work unless the Tribunal or any court hearing proceedings for recovery of the fee or consideration is satisfied that the person’s failure to be licensed resulted from inadvertence only.”
There are significant differences between the two sections, but in my opinion the general scheme of the BWC Act and its predecessor are so sufficiently similar that the following conclusions reached in the Nunkuwarrin Yunti case apply to section 6(2) of the BWC Act, namely, that where there is a contract for the performance of building work by a person who does not hold a licence authorising the performance of that work
·    the contract is not an illegal or unlawful contract (at p. 23 per Doyle CJ).
·    the contract should be treated as if it is rendered unenforceable at the instance of the builder “because the most important right of the builder, the right to payment under the contract for work done, is removed” (at p.22 per Doyle CJ).
·    the contract remains enforceable by the building owner (at p.23 per Doyle CJ).
·    the consequences of the performance of building work by an unlicensed person are relatively limited; the builder is guilty of an offence, he is liable to disciplinary action and he is not entitled to any fee, consideration or compensation under or in relation to the contract unless, in proceedings for the recovery of the fee, consideration or compensation, the court is satisfied the builder’s failure to hold an authorising licence resulted from inadvertence only.
It would seem to be the case that if a builder has received progress payments under the contract the builder is not required, and neither can he be ordered, to disgorge them except where the contract is for domestic building work and either a court finds that the contract contains a term or condition that is harsh or unconscionable (section 38), or the building owner has terminated the contract pursuant to section 36 of the BWC Act. The evidence before the magistrate did not show that the applicant by her letter dated 16^th September 2001 gave notice, or purported to give notice, in terms which invoked section 36.
By section 36 a building owner under a domestic building work contract may by notice in writing to the building contractor given before the prescribed time terminate the contract. The prescribed time means, inter alia, the time for the completion of the building work under the contract where there has been a failure to comply with Division 1 or 3 of Part 5 of the BWC Act; Division 1 includes section 28 by which the building contract is required to (among other things) be in writing, set out in full all the contractual terms and be signed by both the building work contractor and the building owner.
The magistrate, on the evidence before him, concluded it was likely the contract between the parties did not comply with section 28. In that case, as he observed, the respondent would be guilty of an offence (section 28(2) of the BWC Act). However, as the magistrate held (correctly in my view) citing Corradini v Lovrinov Crafter Pty Ltd (2000) 77 SASR 125, although it is an offence for the building contractor to be a party to a contract which does not comply with section 28, the contract is not rendered illegal or unlawful. Therefore, it was open to the applicant to enforce the contract, or to terminate it for a breach entitling her to terminate or to accept a repudiation of it by the respondent.
Ground 5

For her case that the retaining wall constructed by the respondent did not comply with the specification the applicant relied on and tendered the report of Koukourou Engineers dated 12^th October 2001 prepared after an inspection of the wall. In his reasons the learned Magistrate set out the material part of the report, the substance of which was that the wall did not comply with the specifications and the respondent should either demolish it and reconstruct it in accordance with the specifications “or obtain a structural certification from another engineer experienced in this type of design to verify that it is structurally adequate”.
At the trial the respondent did not assert that the retaining wall he constructed did comply with the specification. His evidence was that the specifications had been written nearly twenty years before he gave his quotation and he had constructed the wall “better than the engineer’s specifications”. Against a history of appearances at interlocutory or preliminary hearings, referred to by His Honour in his reasons, the respondent belatedly tendered at the trial a certificate prepared by a chartered engineer that the engineer considered the retaining wall to be structurally suitable. The magistrate accepted the content of that certificate and found the retaining wall to be structurally adequate. Having regard to the way the applicant conducted her case by relying on the report of Koukourou Engineers, the magistrate’s finding concerning the structural adequacy of the wall was clearly open to him and in my opinion there is no reason to disturb it.
As to the applicant’s allegation that the retaining wall was not constructed with pre-mixed concrete, but with concrete mixed on the site, the learned Magistrate heard not only the parties but also Mr Fazzini (the manager of Davalan Concrete) called by the respondent, and received written material on this issue. His Honour found that pre-mixed concrete, supplied by Davalan Concrete, was used by the respondent in the work he carried out at the applicant’s premises. From my review of the evidence before His Honour, that finding was open to him and there are no grounds upon which it could be disturbed.
On the issue of the applicant’s claim that the retaining wall had not been completed as to its length, His Honour was faced with there being no mention in the specification, or the respondent’s quotation, of that matter and he was confronted with the differing conflicting oral evidence of the parties. I have read the whole of the transcript of the evidence taken at the trial. The parties were given every opportunity to deal with the evidence of the other of them on the topic of the wall. His Honour extended to the parties the greatest possible latitude to present their respective cases on each of the issues brought before the court and exercised considerable tolerance in an atmosphere of apparently heated and abusive exchanges between the parties.
There is nothing in that evidence, or in the applicant’s submissions, which brings me to the view that His Honour erred in concluding that the applicant had failed to prove “the contract did call for the wall to be extended beyond the point where it now finishes”.
At the trial, various photographs, and a video recording, were tendered or made available to the magistrate. They depict views of the site of the works, said to have been taken in September 2001. I infer the magistrate had regard to them for the purpose of reaching his findings – in his reasons he expressly mentions the photographs and at the conclusion of the trial he requested the applicant to deliver the video recording to the court.
It appears the photographs, and the recording, did not satisfy the magistrate that the applicant had made out her case concerning the length of the wall. I have viewed that material. In my view it does no more than show pictorially that which the applicant gave evidence about on the issues of the location, the measure and other features of the wall constructed by the respondent; even with the advantage of that material, as an aid to understanding the applicant’s evidence (at the trial) for the purposes of this review, I am not persuaded that the magistrate’s conclusion that the applicant had failed to prove her case concerning the wall was an error on all the evidence at the trial. Indeed my conclusion on that issue is the same as that of the magistrate. As the magistrate observed the applicant’s letter dated 16 September 2001 did not mention that the wall was incomplete as to its length; and I note that even in her amended particulars of claim, such an allegation is not expressly made.
Ground 3 & 4
By her letter dated 16^th September 2001 the applicant set out her complaints concerning the work the respondent had carried out to that time, and his several alleged failings and demands in relation to the contract; they included that the respondent had demanded a further payment of $2,000 before he would proceed with the works. Although that particular demand was not expressly pressed by the respondent on the Tuesday, preceding the date of the letter, when the respondent told the applicant he would proceed that day with the suspended slab, the applicant replied (paragraph 11 of the letter):
“I told you to bring out a letter on your official letterhead, that all work you have done, and state what that is, and all further work to be done by you, is to the engineer’s specifications and that all your work you fully guarantee, then make an appointment with me to arrange a formal contract in which manner you will proceed with the work, and in which manner the progressive payments will be paid and this to be witnessed by a justice of the peace.”
The letter stated (paragraph 9):
“.... I cannot trust the work you have done, nor do I wish you to continue with further work, until I have an agreement in writing from you.”
and concludes with a detailed proposal by the applicant of what she would agree to in exchange for making further payments to the respondent during the completion of the remaining works, namely the construction of the suspended slab.
The applicant’s evidence was that when she approached the respondent in about September 2001 to enquire whether he would carry out the work for the price he had quoted twelve months earlier, the respondent said “yes” but he would require $4,500 “up front” - $3,500 for premixed Davalan concrete, $1,000 for the forming up materials for the suspended slab “(and) the balance of $3,075 was for labour and he said I could pay that when the contract was completed”. (T 3-4)
The respondent’s evidence was “the $3,500 was for your Honour and the $1,000 in cash was for the driveway, the preparation of the driveway for wages, for steel, for mesh” (T 35).
The applicant’s evidence was that when the respondent had constructed the driveway and the retaining wall the respondent asked her for payment of $2,000 (T 5); “He said ‘I want another $2,000 in cash and I want it this weekend’”. (T 114) The respondent’s evidence was that “when that retaining wall was finished, I think on the Friday, I asked her for, I think it was either $1,500 or $2,000 to organise the steel because the steel is going to support the suspended bondex slab, had to be welded and dyna-bolted into the house support” (T 35).
Section 30(1) of the BWC Act provides that a person must not demand or require that a payment be made under a domestic building work contract unless the payment “constitutes a genuine progress payment in respect of work already performed: or is of a kind authorised under the regulation”.
The respondent’s evidence (T 111) was that the value of the work he had performed was $3,926; he had been paid $4,500 by the applicant so clearly the $1,500 or $2,000 he said he asked the applicant to pay was not a genuine progress payment for work he had already performed. Equally clearly it was not a payment of a kind authorised by the regulations (see regulation 18). It is also apparent that the respondent’s written quotation made no mention of, or provision for, payments “up front” or progress payments.
The respondent was not entitled to the payment of $2,000 he sought from the applicant, unless she agreed to pay it. It was the respondent’s “request” for that payment which was one of the reasons the applicant wrote her letter dated 16^th September 2001. I note here that the respondent said he did not receive that letter. Although the magistrate did not expressly find it was personally delivered by the applicant to the respondent on 20^th September 2001, in my view it is to be inferred he accepted the applicant’s evidence to that effect.
The applicant’s evidence was that it was shortly after the respondent had partly dismantled an elevated walkway/patio at the rear door of her house that the respondent demanded the payment of a further $2,000. The applicant had earlier sought advice and learned that the BWC Act required all the terms of the contract to be in writing. Her evidence was that because of her concern about the work the respondent had done she spoke to him about the requirements of the Act, but the respondent was abusive toward her, told her she did not know what she was talking about and demanded she pay a further $2,000 before he would proceed. The applicant’s evidence on these topics is at pages 114-117 of the transcript, during which it is recorded that the respondent accused the applicant of lying, said “I can’t just sit here letting her tell you lies” and asked the Magistrate whether he could go out of the court-room; he remained outside the court-room for ten minutes. The evidence, at the pages I have just referred to, was being given by the applicant on the topic of the respondent’s claim that the applicant had “kicked me off the property” and he had removed his equipment from the premises of the house in the presence of police officers whom the applicant said she had asked to attend. During the respondent’s voluntary, temporary absence from the court-room there was this exchange between the Magistrate and the applicant (T116-117):
“HIS HONOUR: What I’m interested in, Ms Howland, is that Mr Michalski says that you stopped him coming to the property. As I understand it, one of the reasons that you either told him not to come to the property, or stopped him, or whatever the case may be, is that you suggested he asked for some more money and you refused to pay it to him, is that the case?
MS HOWLAND:        Because that wasn’t what we agreed, yes.
HIS HONOUR:           You say that the reason you didn’t agree to it was because it was your understanding of the contract that he would be paid that money when the job was finished.
MS HOWLAND:        Yes.”
It is clear from the applicant’s letter dated 16^th September 2001 that these events, including the attendance of police officers, occurred before that letter was delivered to the respondent. There was no evidence before the Magistrate that the respondent withdrew his demand for a further payment of $2,000 by the applicant. Indeed Mr Palfelt’s evidence to the Magistrate was that in a telephone conversation between him and the respondent on 18^th October 2001, which was before the applicant’s proceedings were served on him, the respondent said “he had no intention to complete the job without being paid” (T22). At the same page of the transcript, the respondent told the Magistrate “I said the only way I’ll finish the job is if (the applicant) pays me the total amount in cash, in front of witnesses, and has a supervisor on job at all times at her cost, then I am willing to go and finish the job, that’s what I said”.
As I have said the respondent was not entitled, by his agreement with the applicant or under the BWC Act, to a further $2,000 either by way of a progress payment, or in any other guise until the work was completed. In my view his request for that payment, which on his own evidence was made as a condition of his proceeding with the work, was a repudiation of the agreement between him and the applicant – he made it quite plain he would not perform in accordance with the contract.
In Ogle v Conboyuro Investments Pty Ltd (1976-77) 136 CLR 444, Barwick CJ (at pages 450-451) stated the principles concerning repudiation (or anticipatory breach):
“Where a promisor has so conducted himself prior to the date for performance of his promise that the promisee may reasonably form the opinion that the promisor does not intend to perform the promise, the promisee may terminate the contract in the sense of putting an end to his own and the promisor’s further obligation to perform thereunder. He may of course not choose to regard the promisor’s attitude or conduct as warranting the termination of the contractual obligations of further performance, but instead he may insist on the performance of the promisor’s promise according to its terms. If he takes the latter course, the promisor, if he performs his promise at a subsequent time, will not be liable in any respect for conduct which might have been treated as an anticipatory breach or a repudiation of the contract. Further, he may rely to his own advantage on conduct of the promisee subsequent to the time at which the promisee chooses not to terminate the contract.
But if the promisee chooses to treat the contract as at an end, insofar as it requires further performance on the part of either party to it, the promisor will be quit of any obligation further to perform the contract, assuming of course that he does not successfully contest the right of the promisee so to treat the contract as at an end. However, the promisee’s right to damages for any breach which has occurred up to the date of the termination of the contract, including the anticipatory breach or repudiation of it, remains.”
Where a party to a simple contract elects to terminate it for a breach by the other contracting party “both parties are discharged from the further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected.”: McDonald v Dennys Lascelles Limited (1933) 48 CLR 457 per Dixon CJ at 476.
The applicant’s action in requiring the respondent to remove his equipment from her premises was capable of being seen, objectively, as an acceptance of the respondent’s anticipatory breach, or repudiation of the contract. That was followed by the applicant’s letter to the respondent dated 16^th September 2001 in which she proposed new terms on the conditions of which she would make payments during the progress of the remaining work to be done. The respondent did not accept that proposal, and on 16^th October 2001 the applicant commenced these proceedings claiming damages for the respondent’s breach of contract. The pleadings, consistent with the provisions governing small claims (see Section 38 Magistrates Court Act 1991), are not to be read critically and restrictively – the parties are not bound by written pleadings.
The Magistrate found “In the circumstances it would appear that (the applicant) has terminated the contract. (The applicant) is under no further obligation to (the respondent). (The respondent) is under no obligation to commence or complete the suspended slab.”
In making that finding, I consider that the Magistrate was expressing, but without specifically identifying, the concept of the termination of a contract by one party to it for an anticipatory breach of it by the other party, from which I infer the Magistrate accepted the evidence of the applicant that the respondent demanded payment of further moneys before he would proceed to complete the works.
Section 37 of the BWC Act provides that a party to a domestic building contract may apply to the Magistrates Court “for the determination of a dispute arising out of the contract …”. If the court is satisfied that there has been a breach of, or a failure to perform or fulfil the contract, the court may (subsection (6)) make one or more of the following orders:
“(a)to the extent to which it is satisfied that it is practicable for the breach or failure to be remedied by the performance of building work – an order requiring the performance of remedial work;
(b)an order requiring the payment of an amount due under the contract or an order requiring the payment of an amount by way of compensation for the breach.”
The Magistrate, apparently in exercise of that power, made an order requiring the respondent within thirty days to install an agricultural drain for the retaining wall and to reinstate removed steel work. The respondent did not dispute that an agricultural drain had not been installed (as the Koukourou specification required) and as to the partly removed steel work of the raised patio at the rear of the applicant’s house, the respondent had embarked upon that as a preliminary step prior to the work necessary to erect form work for a new raised deck on which a concrete slab was to be poured. Whilst the omission of the agricultural drain was a breach of the agreement between the parties, and the preliminary work concerning the suspended deck was not, I conclude that the termination of the contract by the applicant, as found by the Magistrate with the consequences he identified, was based upon the respondent’s repudiation of it.
That being the case it was open to the Magistrate to make the order he did; the evidence in the case, including that of Mr Close had it been called, did not prove the respondent was not authorised, by his licence, to carry out the work specified in the order.
The applicant complains that the Magistrate should have found the respondent liable to the applicant for the cost of constructing the suspended slab.
In her amended particulars of claim the applicant particularised $6,200 as “cost to build patio”. There was tendered to the magistrate (as part of Exhibit P5, T 14) the quotation of Alberrie Carpenters & Formwork dated 21 March 2002 “for the execution of 25m² suspended slab” at the applicant’s Valley View premises “as per verbal discussion with Lino”. From the same page of the transcript it appears that the respondent did not object to that quotation being tendered and I infer he had seen it previously. As I read the quotation, it does not refer to the specification of McIntosh Taylor. Further, I note that the magistrate wrote in his reasons (para. 51) of “the absence of any detailed plans for the suspended slab”, in a context where he was clearly referring to the McIntosh Taylor specification. I have perused the specification; to my lay reading of it the subject of the suspended slab is not clearly identified as an item separate from the other structures of which it formed part in the specification and neither can the precise configuration of the slab with its associated works be confidently extracted. I agree with the Magistrate’s conclusion at paragraph 51 of his reasons.
Therefore, even if Alberrie’s quotation had made specific reference to the McIntosh Taylor specification, which it did not, there was insufficient evidence from which the Magistrate could determine the quotation was for precisely that which the respondent had agreed to construct, or something different and more expensive. Precisely what the “verbal discussion with Lino” encompassed was not the subject of any evidence before the Magistrate. Accordingly the Magistrate could not determine whether or not $3,075 (the difference between what the applicant had already paid to the respondent and the contract price) was or was not sufficient to complete the works necessary to construct the suspended slab. That conclusion finds some support from the quotation of Adelaide Retaining Walls, which was tendered at the trial; the quotation was for “the supply and install retaining wall using steel uprights and concrete sleepers” at a cost of $5,824.00, the applicant’s case being that the retaining wall built by the respondent should be demolished and a new wall constructed. The quotation makes no reference to Koukourou’s specification and it is clear the quotation was for a retaining wall of a construction wholly different from that specified by Koukourou.

Having reviewed the matter of the proceedings between the applicant and the respondent, and the learned Magistrate’s judgment, I affirm the judgment.

[2004] SADC 71

18 May 2004