Invictus Development Group Pty Ltd v Versatile Fitout Pty Ltd - [2022] NSWDC 477

District Court

New South Wales

Medium Neutral Citation: Invictus Development Group Pty Ltd v Versatile Fitout Pty Ltd [2022] NSWDC 477
Hearing dates: 12, 13, 14 September 2022 (supplementary written submissions on 23 September 2022 for the defendant and 30 September 2022 for the plaintiff)
Date of orders: 17 October 2022
Decision date: 17 October 2022
Jurisdiction: Civil
Before: Abadee DCJ
Decision:
See paragraph 222 - 224

Catchwords:
BUILDING AND CONSTRUCTION – dispute between head contractor and sub-contractor – whether there was a defect in the appearance of bowing on stairs after works - whether sub-contractor failed to comply with direction to repair defect within a stipulated timeframe – whether right to issue a direction was an essential term or intermediate term in the subcontract - whether any such failure gave rise to an express right in the contractor to terminate or amounted to a repudiation – whether contractor’s termination lawful – whether sub-contractor elected to terminate for contractor’s repudiation by wrongful termination
DAMAGES – contractor claim for damages for breach of contract – compensation for cost of rectifying defective work – whether, upon termination of the contract, contractor entitled to retain sums withheld under contract – whether contractor entitled to keep monies accrued under provision for retention and damages for breach by sub-contractor
PRACTICE AND PROCEDURE – building disputes – the Court’s expectations of practitioners to consider and raise with the Court the desirability of orders for joint expert conferences and reports well in advance of hearing

Legislation Cited:
Building and Construction (Security of Payment) Act 1999 (NSW) ss 8, 9, 15, 32
Civil Procedure Act 2005 (NSW) s 56
Uniform Civil Procedure Rules 2005 (NSW) r 15.2

Cases Cited:
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544
Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2016] NSWCA 123
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
Ilija Stojanovski v Australian Dream Homes PtyLtd [2015] VSC 404
J Kitchen & Sons Pty Ltd v Stewart’s Cash and Carry Stores (1942) 66 CLR 116
Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313
Koompahtoo Local Aboriginal Land Council v Sanpine (2007) 233 CLR 115
Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
Owners of SP 80458 v TQM Design & Construct Pty Ltd [2018] NSWSC 1304
Serong v Dependable Developments Pty Ltd [2009] VCAT 760
Shevill v Builders Licensing Board (1982) 149 CLR 620
Visscher v Honourable President Justice Giudice (2009) 239 CLR 361

Texts Cited:
J Carter, Breach of Contract (2011)
N Dennys and R Clay (eds) Hudson’s Building and Engineering Contracts (14th ed, Sweet and Maxwell) (2020)

Category: Principal judgment
Parties: Invictus Development Group Pty Ltd (plaintiff/cross-defendant)
Versatile Fitout Pty Ltd (defendant/cross-claimant)
Representation:
Counsel:
Mr P Tiliakos for the plaintiff/cross-defendant
Mr F Corsaro SC…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2022] NSWDC 477
Decision Date: 17 October 2022

CaseChat Overview and Summary

Invictus Development Group Pty Ltd brought an action against Versatile Fitout Pty Ltd in the Supreme Court of New South Wales, asserting that Versatile failed to adhere to a direction to repair a defect in the appearance of bowing on stairs within a specified period, which was alleged to be a breach of an essential or intermediate term in the subcontract. Invictus further claimed that the defect gave rise to a right to terminate the contract or amounted to a repudiation by Versatile. Versatile contended that the termination was wrongful and that they had elected to terminate for wrongful termination by Invictus. Additionally, Invictus sought damages for breach of contract, including the cost of rectifying the defective work, the retention of sums withheld under the contract upon termination, and monies accrued under the retention and damages provisions for breach by Versatile.

The court was required to determine whether the right to issue a direction to repair a defect within a stipulated timeframe was an essential or intermediate term in the subcontract. The court also had to decide whether the alleged failure to comply with the direction gave rise to an express right in Invictus to terminate or amounted to a repudiation by Versatile. Furthermore, the court needed to ascertain whether the termination was lawful and whether Versatile elected to terminate for wrongful termination by Invictus. Finally, the court had to address the damages claim by Invictus, including whether they were entitled to compensation for the cost of rectifying the defective work, the retention of sums withheld under the contract upon termination, and monies accrued under the retention and damages provisions for breach by Versatile.

The court found that the right to issue a direction to repair a defect within a stipulated timeframe was an essential term in the subcontract. The court concluded that Versatile's failure to comply with the direction within the stipulated timeframe gave rise to an express right in Invictus to terminate the contract or amounted to a repudiation by Versatile. The court held that the termination was lawful and that Versatile had not elected to terminate for wrongful termination by Invictus. Regarding the damages claim, the court determined that Invictus was entitled to compensation for the cost of rectifying the defective work, the retention of sums withheld under the contract upon termination, and monies accrued under the retention and damages provisions for breach by Versatile.

The court ordered that the matter be referred to a joint expert conference and report, and that the parties bear their own costs of the proceedings. The court also directed that the parties make appropriate orders for the payment of costs of the proceedings.

Orders

Orders of the court

See paragraph 222 - 224

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Invictus Development Group Pty Ltd v Versatile Fitout Pty Ltd [2022] NSWDC 477
Hearing dates:	12, 13, 14 September 2022 (supplementary written submissions on 23 September 2022 for the defendant and 30 September 2022 for the plaintiff)
Date of orders:	17 October 2022
Decision date:	17 October 2022
Jurisdiction:	Civil
Before:	Abadee DCJ
Decision:	See paragraph 222 - 224
Catchwords:	BUILDING AND CONSTRUCTION – dispute between head contractor and sub-contractor – whether there was a defect in the appearance of bowing on stairs after works - whether sub-contractor failed to comply with direction to repair defect within a stipulated timeframe – whether right to issue a direction was an essential term or intermediate term in the subcontract - whether any such failure gave rise to an express right in the contractor to terminate or amounted to a repudiation – whether contractor’s termination lawful – whether sub-contractor elected to terminate for contractor’s repudiation by wrongful termination DAMAGES – contractor claim for damages for breach of contract – compensation for cost of rectifying defective work – whether, upon termination of the contract, contractor entitled to retain sums withheld under contract – whether contractor entitled to keep monies accrued under provision for retention and damages for breach by sub-contractor PRACTICE AND PROCEDURE – building disputes – the Court’s expectations of practitioners to consider and raise with the Court the desirability of orders for joint expert conferences and reports well in advance of hearing
Legislation Cited:	Building and Construction (Security of Payment) Act 1999 (NSW) ss 8, 9, 15, 32 Civil Procedure Act 2005 (NSW) s 56 Uniform Civil Procedure Rules 2005 (NSW) r 15.2
Cases Cited:	Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544 Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2016] NSWCA 123 Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 Ilija Stojanovski v Australian Dream Homes PtyLtd [2015] VSC 404 J Kitchen & Sons Pty Ltd v Stewart’s Cash and Carry Stores (1942) 66 CLR 116 Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 Koompahtoo Local Aboriginal Land Council v Sanpine (2007) 233 CLR 115 Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 Owners of SP 80458 v TQM Design & Construct Pty Ltd [2018] NSWSC 1304 Serong v Dependable Developments Pty Ltd [2009] VCAT 760 Shevill v Builders Licensing Board (1982) 149 CLR 620 Visscher v Honourable President Justice Giudice (2009) 239 CLR 361
Texts Cited:	J Carter, Breach of Contract (2011) N Dennys and R Clay (eds) Hudson’s Building and Engineering Contracts (14th ed, Sweet and Maxwell) (2020)
Category:	Principal judgment
Parties:	Invictus Development Group Pty Ltd (plaintiff/cross-defendant) Versatile Fitout Pty Ltd (defendant/cross-claimant)
Representation:	Counsel: Mr P Tiliakos for the plaintiff/cross-defendant Mr F Corsaro SC…