HSH Hotels (Australia) Ltd v Multiplex Constructions Pty Ltd

[2004] NSWCA 302

NEW SOUTH WALES COURT OF APPEAL

CITATION:      HSH Hotels v Multiplex [2004]  NSWCA 302

FILE NUMBER(S):
40088/04

HEARING DATE(S):               21 July 2004, 22 July 2004

JUDGMENT DATE: 15/09/2004

PARTIES:
HSH Hotels (Australia) Ltd
Multiplex Constructions Pty Limited

JUDGMENT OF:       Mason P Hodgson JA Tobias JA   

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):          SC 55002/00

LOWER COURT JUDICIAL OFFICER:     Bergin J

COUNSEL:
A: Mr A Sullivan QC / Mr Watts QC
R: Mr Rudge SC / Mr D Miller

SOLICITORS:
A: Griffins, Sydney
R: Minter Ellison, Sydney

CATCHWORDS:
Contract - Building contracts - Construction of - Completion - Minor defects - If considered collectively - Referee's report
Evidence - No cross-examination - Whether practical - Evidence in direct contradiction - Rejection of non-cross-examined evidence
Practice and Procedure - Amendments - Prejudice - Trial in near future
Costs - Offer of compromise - Addressed to two parties - Only acceptable by both - One party reasonably refuses offer  - Other party liable in amount greater than offer - Whether indemnity costs may be ordered against other party 

LEGISLATION CITED:
Nil

DECISION:
(a) Appeal dismissed with costs
(b) Cross-appeal dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40088/04
SC 55002/00

MASON P
HODGSON JA
TOBIAS JA

Wednesday 15 September 2004

HSH HOTELS (AUSTRALIA) LIMITED as trustee of SHR KENT STREET TRUST v MULTIPLEX CONSTRUCTIONS PTY LIMITED

A dispute arose over whether certain stages of a hotel development had been completed properly. In particular, there were said to be 16,000 defects, one of which was the fact that, at the said completion of the first stage, only one out of a possible four lifts serviced every floor of the hotel.

The contract defined a stage as being complete when two conditions were satisfied (the completion conditions). First, where the stage was completed except for minor defects that did not prevent, and whose correction would not prejudice, the ability to use the stage as intended. Secondly, where the builder (Multiplex) had done everything the contract required prior to completion. 

The issues on appeal, following the handing down of a referee’s report which had been accepted by the primary judge, included:

- Whether, in virtue of the second of the completion conditions, a stage could be said to be properly completed where any minor defects remained;

- Whether the referee erred in preferring the evidence of the builder’s witnesses, in relation to the seriousness of the defects, over non-cross-examined evidence led by the owner’s expert witness;

- Whether the referee erred in not considering if several minor defects could collectively equate to a ‘major’ defect;

- Whether the referee ought to have allowed the owner (HSH) to amend the particulars of their defence; and

- Whether the primary judge ought to have found that Multiplex was entitled to indemnity costs from the date of an offer of compromise.

HELD: (per Tobias JA with Mason P and Hodgson JA agreeing) (1) It was…