| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : J-CORP PTY LTD -v- DAGLAS [2003] WADC 35 CORAM : NISBET DCJ HEARD : 28-31 JANUARY 2003 DELIVERED : 20 FEBRUARY 2003 FILE NO/S : CIV 1477 of 2001 BETWEEN : J-CORP PTY LTD Plaintiff
AND
ROBERT DAGLAS
Defendant
Catchwords: Contract - Repudiation - Termination by acceptance of repudiation - Misrepresentation - Damages
Legislation: Nil
Result: Judgment for plaintiff $36,522.55 (including interest of $$3,432.64)
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Representation:
Counsel:
Plaintiff : Mr A W Buchan
Defendant : In person
Solicitors:
Plaintiff : Hotchkin Hanly
Defendant : In person
Case(s) referred to in judgment(s):
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Foran v Wight (1989) 168 CLR 385
Jones v Dunkel (1959) 101 CLR 298
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17
Wenham v Ella (1972) 127 CLR 454
Case(s) also cited:
Robert A Munro & Co Ltd v Myer [1930] 2 KB 312
Robinson v Harman (1848) 154 ER 363
Carr v Berryman (1953) 89 CLR 327
Maybury v Atlantic Union Oil Co (1953) 89 CLR 507
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Summary of dispute The plaintiff claims damages for breach of a building contract entered into with the defendant which bears date 28 October 2000. The contract is in writing and comprises a Housing Industry Association lump sum building contract, plans, specifications, a costing schedule and a contract particulars sheet. The plaintiff says that this contract was unlawfully terminated by the defendant by way of a letter from his solicitors dated 2 May 2001. That letter purports to terminate the contract on account of the plaintiff having: "… substantially breached its building contract dated 13th December 2000 in that it has commenced building our client's home to the wrong specifications. We understand that not only are the dimensions incorrect but there are other problems. For example, we are instructed that the walls were to be of double clay brick, but we understand that only the outside of the building is being constructed with clay brick. The inner wall is being constructed of another material and we understand that the building work is of inferior workmanship." 1 The letter went on to advise the plaintiff's solicitors that neither it, its servants nor agents were entitled to enter upon the property and if any of them did the defendant would regard such an action as a trespass and would take "appropriate action". 2 That letter came into evidence as Exhibit P5. The plaintiff's response was by way of a letter from its solicitors to the defendant's solicitors dated 8 May 2001. This came into evidence as Exhibit P6. After setting out their instructions in relation to past dealings between representatives of the plaintiff and the defendant they concluded: "In our view, your letters of 24 April 2001 and 2 May 2001, together with the conduct of your client outlined above, constitute a deliberate prevention of or interference with the Works entitling our client to terminate the building contract under clause 13(a)(iii) of the building contract. Indeed, in our view, your letter of 2 May 2001 purports to be a letter of termination, without lawful justification, thereby evincing an intention not to be bound by the terms of the contract, constituting a repudiatory breach of the contract."
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The evidence
3 The plaintiff first called its general manager, Ian Thomas Anthem. Mr Anthem gave evidence and proved the incorporation of the plaintiff and its registration as a builder building under the name "Homestart" which he described as a "division of J-Corp". This division specialises in building homes for the first home buyers market and, as other evidence disclosed, at the relevant time first home buyers were assisted by a Commonwealth Government grant under the First Home Buyers scheme. 4 In October 2000 Ms Sylvia Ethel Williams was a new housing representative for Homestart having commenced work with that business in 1999. Whilst Ms Basic testified somewhat differently I accept without hesitation Ms Williams' evidence that on Saturday, 21 October 2000 she was at Homestart's display centre in Tuart Hill when she first met the defendant and his then partner, now wife, Ms Basic. There were some preliminary discussions about the defendant's borrowing capacity, Ms Williams explaining that without knowing this she could not be of much assistance. The defendant said that he was interested in land at Beeliar and whilst reluctant to provide much information the defendant did provide details of his gross income which Ms Williams noted on a "qualifying sheet" which came into evidence as Exhibit P8. With this information Ms Williams was able to calculate the total borrowing that such an income would support and from that she could estimate (very approximately) what sort of a house and land package could be put together. Ms Williams knew of some land available at Beeliar and offered to drive there with the defendant and Ms Basic, that day, which they did, Ms Basic travelling in her vehicle and Ms Williams driving the defendant in her vehicle. She showed them some land in what she thought was the defendant's price range but this land was not suitable. She undertook to try and find other land in the general vicinity and get back to them. They then went their separate ways. To the extent that it is relevant I reject Ms Basic's evidence to the contrary. 5 On Monday, 23 October the parties met again at Beeliar, Ms Williams having found some other blocks of land which were for sale in that area. The defendant and Ms Basic liked one of the blocks and Ms Williams asked the defendant if he wanted her to have the land put on hold. He said he did and Ms Williams arranged for it to be reserved for the defendant. This land is situated and known as Lot 131, Possum Glade, Beeliar. The land having been selected Ms Williams accompanied the defendant and Ms Basic back to their then place of residence at 42B Toorak Road in Rivervale, which was a rental property. At the
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defendant's house Ms Williams and the defendant agreed that the total house and land package they were to consider would cost around $120,000 and, as Ms Williams testified, she then showed the defendant plans which fitted into that price range if the land was to be bought at a cost of $69,000 or thereabouts. This, she said, would allow for a house to have been built which would have cost in the order of $55,000. Ms Williams showed the defendant some plans from some standard brochures prepared by Homestart. She showed the defendant a brochure for a house called the Kidman and another for a house called the Connery. The defendant and Ms Basic decided that the Connery was the one they liked the most and Ms Williams put this design on the plan of Lot 131 so that the defendant and Ms Basic could see its orientation and she could check that it would comply with relevant setbacks. 6 The defendant having chosen the Connery house, some documentation was then prepared by Ms Williams and signed by the defendant. This documentation was a contract particulars sheet (Exhibit P11), the Housing Industry lump sum building contract (P12) and a site works schedule (P13). These are all shown to be dated 28 October but the contract (Exhibit P12) and the site works exhibit (P13) were actually signed on or about 23 October, the date 28 October not being inserted until the following Saturday after Ms Williams received back from the vendor a copy of the offer and acceptance in respect of the land. Again, to the extent that it is material, Ms Basic gave a different chronology in respect to the signing of the relevant documentation but I reject her evidence wherever it is inconsistent with Ms Williams' evidence. 7 Returning to the chronology of events, after the defendant had signed up to build the Connery on the Beeliar land Ms Williams received a telephone call from Ms Basic who said that she wanted to change the configuration of some doors. Ms Williams said that she would talk to an estimator with the plaintiff which she did and telephoned Ms Basic back and told her that the reconfiguration of the doors was not possible. Ms Basic was unhappy with the design of the Connery unless the door configuration could be changed so Ms Williams agreed to drop off the plan of another house which she thought might have suited Ms Basic. To this end on the next day Wednesday, 25 October 2000, she arranged to show Ms Basic a copy of another house called the Chaplin and this she did. Ms Basic did not like that either and so she then showed her a plan of a house called the Langtree which Ms Basic was very happy with. Whilst the defendant was not at home when Ms Williams first arrived on this day he arrived later. He agreed that the Langtree was a better house than the
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Connery and the paperwork previously signed that needed alteration was re-done and hence the end position was that the contract particulars sheet, Exhibit P11 was re-written just for the Langtree. Although it was not stated I assume that that written for the Connery was discarded. Exhibit P12, the building contract, did not require any alteration save as to contract price and the old contract price was deleted and the new inserted. Likewise Exhibit P13, the site works schedule, did not require any alteration. The next exhibit, P 14 was specifically written up for the Langtree and also provided to the defendant. This is a schedule of standard inclusions for that design. Ms Williams told the defendant she would need a deposit of $500 which she collected on Friday, 27 October 2000 and gave a receipt for the deposit that day. Again the evidence of Ms Basic is somewhat different, denying that she received a receipt that day because it suited her case to deny that particular chronology and where relevant and to the extent that the evidence of Ms Basic differs from that of Ms Williams I reject Ms Basic's version and accept that of Ms Williams – without reservation. In my opinion Ms Basic was an unreliable witness, for reasons I will later detail. 8 After Ms Williams submitted the defendant's contract documentation to the plaintiff's administration section her role was basically finished although she testified that she was available to liaise with the defendant if necessary. 9 Part of the documentation completed by the defendant was an application for finance. Finance was not approved until 14 February 2001. Notwithstanding that there was no finance approval, the plaintiff, presumably in the interests of efficiency and saving time, proceeded to prepare working plans and drawings for presentation to the defendant so that the defendant could get on with making all of his colour selections for things such as window frames, tiling, taps and the like. To this end a set of pre-start plans was prepared by the plaintiff and sent to the defendant with a request that he make an appointment to meet Ms Maureen Grinstein at what is called a "pre-start appointment". Ms Basic telephoned Ms Grinstein and made an appointment to see her in order to go through the "pre-start" on 13 December 2000. Both the defendant and Ms Basic attended with Ms Grinstein. She said that they had their copy of the pre-start plans with them which she had sent out to them. Ms Grinstein's copy of these plans came in as Exhibit P18. She testified that she went through the plans with the defendant and Ms Basic. She took them through each room. She showed them where the meter box was, where the gas points were. She drew a purple line on page 1 of the floor plan showing the extent of the vinyl in the kitchen and the point at
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which the carpet which was to go through the rest of the house would be placed. After going through the plans with the defendant and Ms Basic, Ms Grinstein said she then took them through the pre-start selection form which came into evidence as Exhibit P19. This refers to the choices of finishes throughout the house. These plans depict with clarity the entire dimensions of the house. [I have done a comparison of the dimensions of the rooms as shown on P18 with the dimensions of the rooms shown on Exhibits P10 and D1 and they are the same. Indeed they are even more detailed because there is no kitchen measurement on Exhibit P10 whereas the kitchen measurements are precisely shown on Exhibit P18. The same applies to the bathroom, laundry and toilet. No measurements are shown on P10 but they are shown with precision on P18.] At the end of this procedure (the defendant requesting some minor changes and alterations) the plans and pre-start selection form were signed by the defendant and then presented by Ms Grinstein to the drafting section of the plaintiff for drawing into final plans. A copy of the pre-start plans as presented and discussed between the defendant, Ms Basic and Ms Grinstein were signed by the defendant and dated 13 December 2000. It was these plans (Exhibit P20) that were sent to the drafting section for preparation of the final plans, Exhibit P21 which Ms Grinstein said were sent out to the defendant by mail. Exhibit P20 comprises everything in Exhibit P18 together with one additional very important plan being sheet 5 of 5 which was a site plan showing the house situated on the land. This too was signed by the defendant. Ms Grinstein said at no time did either the defendant or Ms Basic question her about the dimensions of the house, any room in the house or the size of the slab or how it would sit on the lot. Whilst, after all of the relevant documentation was signed, she did receive a number of abusive telephone calls from the defendant, these all complained about delay.
Defendant's version 10 During the course of the plaintiff's case the defendant was assisted by an interpreter, Mr Radanovich who was in court throughout the proceedings interpreting from time to time as the defendant required. There were a number of occasions during the plaintiff's case when I noticed the defendant, without the aid of any interpretation from Mr Radanovich, either nodding in agreement with what a witness said or showing some dissent. When he gave evidence I observed the same pattern, that is to say the plaintiff has a reasonable command of English but from time to time needed the assistance of an interpreter. Asking him to tell his side of the story as he was unrepresented, after describing he
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and Ms Basic meeting Ms Williams at a display centre at Tuart Hill, he continued: "About half an hour after that we went to have a look, inspect the block. In one place the blocks were too dear. Then we came to this place in 31 Possum Glade. We saw the block there and she rang the office to find out if the block was for sale. I was interested in that block. It was for sale. After that we went to my home and we signed up that we want to buy that block. After that I let Angie do all the contact with her because I was working, I didn't have time to come, so I left it in Angie's hands. She showed us some plans. I don't remember the names of the – we liked the plan called Langtree. She said we can see the houses on display in Tuart Hill. Angie and I went the following weekend and we saw the house. There were some other people there and we saw the plan, we saw the house, and it appealed to us. We measured the house. It was 3 metres, 13.99 metres by 10.55 metres. We liked the plan so we went ahead with that plan." 11 I then asked the defendant when he said that he measured the house whether he meant the display home, the exhibition home, and he said: "Yes. Yes." At that point there was an objection by counsel for the plaintiff that none of that had been put to any of the plaintiff's witnesses, which was true, and I foreshadowed that rather than keeping the evidence out I would allow the narrative to come in and if there was any occasion to do so I would allow the plaintiff to recall some of its witnesses (and ultimately this is what happened). 12 The defendant then testified that he wasn't involved much after signing the papers until he saw the slab go down when on visiting the site he observed the slab and the bricklayers working on site and thought the house was far too small. He said that he measured the slab and that it was 9 metres by 10. He said that after his lawyer terminated the contract he arranged for someone to demolish the partly built house and slab, a firm called Miniquip, who with him again measured the length and width of the slab before demolition and said, "It worked out 10 by 9" which was understood to mean metres. 13 In cross-examination the defendant was asked whether essentially his problem with the house the plaintiff was constructing for him was that it
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was too small for him, and he replied, "That's true." He then gave this evidence: "In what respect did the house that was partly built by J-Corp at that block, lot 131, not comply with those specifications that are in front of you now and those plans? (Exhibit P21)---Nothing wrong with the house, the design and everything. It's just the measurements of the house – long and wide. That's the problem. … The house was all right but the measurement was wrong. Why wasn't that measurement on the slab, same as on the slab? (sic) If you can prove to me that those measurements were on that slab - - - Mr Daglas, you've heard the evidence of Mr Twist, Mr Hegarty the construction supervisor, who were both on the site and who both measured the constructed building and compared it to the plans and in their view it matched up with the plans?---Nobody gave me the answer, exact answer, to the measurements of the slab. They gave the measurement of the rooms, they didn't give me the measurement of the slab. Mr Daglas do you accept that if the rooms are the right size the slab had to be the right size?---If the slab was 10 by 13, nearly 14, then the rooms would have to be bigger." 14 It was then put to the defendant that he could not have measured the Langtree as a display home because the Langtree had never been a display home and he said: 15 Later in cross-examination the defendant maintained that he did measure the finished slab of the house from corner to corner and found that it measured "9 by 10".
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16 Further, the defendant admitted in cross-examination that he tried to stop the bricklayers from working and whilst he said he didn't punch the bricklayers he did agree that he put up his hands and pushed the bricklayer in the chest to try and stop him from working. He also said that he arranged for the water supply to the block to be cut off and in fact paid $210 to the Water Authority to arrange for this to be done.
17 At the end of his evidence I was anxious to see what the defendant was saying about the measuring of the house being constructed on the Beeliar land and the relevant transcript at p 191 is very instructive. The defendant starts by saying that he saw Ms Basic measuring the partly completed house and writing it down and then a short time later says that he didn't know if Ms Basic wrote it down and then arising out of my questions with counsel for the plaintiff being given the opportunity to ask any further question of the defendant arising out of my questions, at transcript p 194 the following exchange takes place: "Did you say, Mr Daglas, that you wrote down the measurements that you took when you measured the inside of the house?---Angie did the writing. I don't know if she has got it with her or not. I'm not sure if she's given it or not, I don't know, but definitely - - -" 18 Then with further questions from Mr Buchan and me the defendant returned to the position that whilst he thought Ms Basic wrote it down he did not see her do it and did not know if she still had the paper if she did. 19 Ms Basic was then called to give evidence by the defendant. She is fluent in English. She described her first meeting with Ms Williams and the subsequent chronology which was somewhat at variance with the chronology given by Ms Williams. She did say, however, that it was Ms Williams who gave her Exhibit D1 which is a floor plan of the Langtree design. She then testified that when she noticed that this floor plan did not give any overall measurements of length and depth she telephoned Ms Williams who then suggested that she go and have a look at a display house called the Tranquil and that: "… and we could go and have a look at this display home. It would be closed but, like, you could see through the windows because all the curtains were pulled apart and you could look inside – that we could measure the house and she said the exact measurements of that house, the length and the width, is what the measurements were of Langtree so that evening when
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Mr Roberts – sorry, Daglas came back from work we went to the property. We measured it and we thought, well, it's quite good because it was just about – it was a bit bigger than our rental property." 20 Again, objection was taken to this testimony on the ground that it had not been put to any of the plaintiff's witnesses and again I reserved to the plaintiff the right to apply to recall its witnesses. Ms Basic then said that the next morning in the mail she received a brochure of the Tranquil which came into evidence as Exhibit D2. I interpolate here to observe that even the most cursory comparison of the plan of the Tranquil with the plan of the Langtree shows that the Tranquil is a much bigger house. It is four bedrooms, two bathrooms and a games room whereas the Langtree is three bedrooms, one bathroom (ie, no games room, no second bathroom, no fourth bedroom). Nevertheless Ms Basic went on to testify that the measurements were 10.3 metres by 13 metres for the Tranquil and she was very happy with this. 21 Ms Basic also said: "Yes. She knew that. Yes. She knew that, and we did discuss the measurements of that because we also made it very clear to Mrs Williams that we wanted a house bigger than our rental property which Mrs Williams came - after we went - - -" 22 She then further testified (T204): "On 26 October, your Honour, Mrs Sylvia [sic Williams] attended our property. Mr Daglas was at work. The time was exactly 10 to 10 because I remember I just came home from one of my doctor's appointment. … because we still really needed to query Mrs Williams on the dimensions of our rental property and what we wanted, because our main concern was dimensions of what we wanted was bigger than our rented property, that Ms Williams assured that it will be bigger and that she would get us a dream home, she called it. So on that day, 26 October 2000, Mrs Williams attended our 42B Toorak Road, Rivervale, rental property and myself and her, your Honour, we measured the rental property from width to length, from room to room. She did assure me that our property that she was going to get for us or the house to be built would be bigger than our rental property. We made it very clear to her we wanted an open plan living, three
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double-sized bedrooms, and just one bathroom. Our main problems were we wanted the property bigger than our rental property. So Mrs Williams and myself, she had a tape measure and we went through the whole dimensions of the house, outside and inside the house, which I wrote down on this piece of paper as well. [Question from me] Did you write that down in Ms Williams' presence as you went?---There's two different – you can see there where there's my writing and Ms Williams'. When she was doing the measurements, she was writing it down. … My writing is the blue. I did it after – I started off. It just has 'bedroom 1' and then she would put down in the – if you can see on the right-hand side - - - … And then I made it clear later on which bedroom was what measurements." 23 And she went on to say that the document which came into evidence as Exhibit D3 which is written in both blue ballpoint with some black ballpoint marks on the right hand side was in her writing as to all the blue ballpoint writing, and that Ms Williams wrote the numerals that appear in the black ballpoint at the right hand side. All of this was said to have taken place, as noted, on 26 October 2000. 24 In cross-examination Ms Basic in effect denied ever having seen Exhibits P9 and P10 before. She said the only plan of the Langtree she had been given was in accordance with Exhibit D1 and she was never shown the plan of the Connery, Exhibit P9, although she did later agree that she had been shown a plan of the Connery but only on white paper similar to Exhibit D1. 25 Questioned closely as to how she could have thought the measurements of the Tranquil display home would have given her any idea of the dimensions of the Langtree, Ms Basic admitted that the Tranquil was a bigger house than the Langtree, that the master bedroom in the Tranquil is bigger than the master bedroom of the Langtree and that the second bedroom of the Tranquil is bigger than the second bedroom of the Langtree. She was then asked: "I put it to you that the measurements for the two plans are going to be different in every respect because they're different houses. Would you agree with that?---Yes, I do."
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… Right. This is my question; did it occur to you that maybe you should compare the two plans and see whether the measurements were the same?---I did speak to Ms Williams about that, yes, and she assured me that they were bigger measurements to what our rental property was." (T260) 26 Then, finally, at T265 this exchange took place after I had tried to understand what it was that Ms Basic was saying: "Ms Basic, I won't labour this point but just for the sake of going through it one more time, could you please explain how Mrs Williams explained the discrepancy between the two plans, Tranquil and the Langtree, after she had told you that the Tranquil was the same size as the Langtree? Can you just explain that to the court?---I don't know. She just said that Tranquil – Langtree will be the same measurements as Langtree – as Tranquil. That is what she kept saying, that - - - She kept saying it, did she?---Yes. Wouldn't it make the Langtree the Tranquil?---No, because we picked the Langtree because of the actual layout of the house that we preferred." 27 Subsequently Ms Basic agreed in her cross-examination that she and the defendant had received a letter from the plaintiff dated 27 November 2000 which came into evidence as Exhibit P52. That letter enclosed a copy of the final plans and invited the defendant to make an appointment to see Ms Grinstein. Ms Basic agreed that she attended upon Ms Grinstein in company with the defendant and claimed to have told Ms Grinstein about her concerns with "the width and the length of the house". Having difficulty understanding Ms Basic's evidence I asked her again what she said to Ms Grinstein and she replied: "We asked her if Ms Williams had informed her of the size of the actual house that we wanted, which she said yes, and she also stated that Ms Williams had informed us of the measurements of this plan but there wasn't - it was like this but the original building copy was still on its way. So we still believed that we were getting the same thing that Ms Williams told us."
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28 Ms Basic also agreed that before the pre-start meeting with Ms Grinstein and before receiving a copy of the plans Exhibit D3 had been prepared and she was asked:
"So you knew what the dimensions of your rental home were, didn't you?---Not off by heart. That's why we had copies of it. All right. You had written them down?---Yes, but I wasn't looking at them every 5 minutes. All right?---Because Ms Williams kept insisting and saying that our house Langtree will be bigger than the rental property, and we believed her." 29 Insofar as the defendant's defence rests upon allegations of misrepresentation as to the dimensions of the Langtree by Ms Williams or any of the plaintiff's other officers, or, that anything that was said by them to Ms Basic constituted misleading and deceptive conduct within the meaning of the Trade Practices Act, I reject it. I reject these allegations of the defendant for the following reasons: 1. I accept Ms Williams' evidence that her role in her dealings with the defendant and Ms Basic was to try and find a house and land package to fit in the defendant's budget, bearing in mind that the package included floor coverings and window treatments. A budget of around $120,000 for a combined house, land, floor coverings and window treatment package is a modest budget and the more that is spent on the land component the less there is available for the house component. 2. I accept Ms Williams' evidence that at no time did she ever represent that the Langtree or any other house under active consideration by the defendant and Ms Basic was bigger than the defendant's then rental property in Rivervale. In this connection I also accept her evidence that at no time did she measure the defendant's rental property and that no part of Exhibit D3 is in her handwriting. In this regard too I should observe that the evidence of Ms Basic lacks the ring of truth. In my opinion she did not offer any acceptable explanation as to why she would have measured out the rental property making a note of its measurements only to have Ms Williams write down precisely the same measurements alongside in her handwriting. Further, whilst I am no expert questioned documents examiner I have made my own comparison of the alleged handwriting of Ms Williams on
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Exhibit D3 with other documents clearly identified to have been in her handwriting and on the face of them they do not appear to be the same. 3. Having regard to the fact that the defendant and Ms Basic had: (i) a floor plan of the Connery; (ii) a floor plan of the Tranquil; (iii) a floor plan of the Langtree; and (iv) The alleged measurements of the rental property at Rivervale, all before the defendant signed a full set of working drawings (to scale) of the Langtree, it is beyond comprehension that the defendant could then proceed to sign all of the scale drawings of the Langtree when the difference in sizes between the Langtree and the Tranquil must have been obvious to even the unpractised eye of the defendant and Ms Basic. In this regard I should observe that mathematics and measurements are universal concepts. The metric system of measurement is common enough and easily understood. One would not have needed to have been fluent in English to have grasped the difference between the dimensions as depicted on the drawing of the Tranquil over those on the final plans eventually signed by the defendant. 4. I do not accept the evidence of Ms Basic that she spoke about the dimensions of the Langtree with Ms Grinstein. I much prefer the evidence of Ms Grinstein. 5. Finally, insofar as the demeanour of the witnesses is concerned, I formed the distinct impression that each of the defendant and Ms Basic was unreliable as a witness and I believe that Exhibit D3 insofar as it purports to be a document signed by Ms Williams, is a false document. On the other hand I was impressed by Ms Williams and Ms Grinstein as witnesses of the truth. 30 Accordingly, I reject the contentions in pars 14(a), (b), and (g) of the defence. I also reject all of the derivative parts of the defence of the defendant as relate to those alleged misrepresentations as pleaded in par 30.2 of the defence and par 39 of the defence. 31 As to the balance of the alleged representations, that pleaded in par 14(c) of the defence was admitted by the plaintiff and, as will shortly be seen, it was true. The representation alleged in par 14(d) of the defence was never made out and indeed Ms Williams was barely
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cross-examined upon it (in truth, if at all). Likewise the alleged representation set out in par 14(e) of the defence was not made out but is probably implied in any event and as again will shortly be found, was true in any event. The allegation in par 14(f) was the subject of evidence by Ms Basic, denied by Ms Williams and I accept her denials, without reservation. As she said, she is hardly likely to describe a house and land package with a total all-up cost in the order of $120,000 as a "dream home". Finally, the representation pleaded in par 14(h) of the defendant attributed to Ms Williams was not made out however there was documentary evidence in the form of a letter from the plaintiff to the defendant dated 6 November 2000 which came into evidence as Exhibit D4 which predicted finance approval by 12 December 2000 and settlement on the land by 11 January 2000 [sic – 2001]. However that letter did require a significant amount of further information which the plaintiff required to be provided no later than 13 November 2000 if those dates were to be adhered to, and I was not persuaded that the defendant provided the necessary information in a timely fashion such that the representations as to approval of finance and settlement constituted by the letter Exhibit D4 could be said to have been breached. It follows that any defences which derive from these pleadings must also fail.
Did the house conform to the plans? 32 Having dealt with the defendant's defence based upon the alleged misrepresentations I turn now to the second part of the defendant's defence namely that the house as constructed was not in accordance with the plans and specifications. The defendant's contentions in this regard are pleaded at par 24 of the defence. In this regard, however, it should be noted that the plea in par 24(b) ceases to have any relevance having regard to my finding that the defence based upon the alleged representations must fail. Of the first alleged breach of the building contract namely that the concrete floor slab was only approximately 10 metres by 9 metres a number of allegations of fact were made by each of the defendant and Ms Basic namely that:
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33 In this regard I have no hesitation in rejecting the evidence of the defendant and Ms Basic. I much prefer the evidence of the bricklayer Mr Phillip Twist and the supervisor Mr Douglas Hegarty that, upon learning of allegations that the house as was being constructed did not conform to the dimensions detailed on the plans they each re-measured the work in progress and found that it conformed entirely to the plans. I was and remain incredulous that the defendant and Ms Basic, claiming that the house under construction was not being built in accordance with the plans, took no steps to obtain any proper measurement but, worse in my opinion, they did not even purport to produce evidence of the sizes of the rooms as allegedly measured by them. I asked Ms Basic (T231) whether separate measurements were taken and written down (as I had with the defendant – see above) and she claimed to have written the measurements down on a piece of paper but left them on site. What she did volunteer however was that the master bedroom was only 3 metres by 2 metres. I regret I just do not believe her nor I do believe the defendant. I cannot accept that either Mr Twist or Mr Hegarty, let alone both of them, would come to court and perjure themselves in the knowledge that so obvious a defect as a master bedroom measuring only 3 metres by 2 metres compared with plans showing it to be 3.85 metres x 3.11 metres would have been obvious to anyone who happened to see it. Neither of these men would tell so obvious a lie.
34 Next, there is no attempt by the defendant to call the proprietor of Miniquip who allegedly assisted the defendant to measure the slab at 10 metres by 9 metres in accordance with his invoice for its demolition and removal. Accordingly I not only place no weight upon Exhibit D9 but I am inclined to infer that its author would not have assisted the defendant's case: Jones v Dunkel (1959) 101 CLR 298. 35 It is also illustrating to observe that the alleged measure of the concrete slab by the defendant assisted by the proprietor of Miniquip at 9 metres by 10 metres is evidenced by a letter dated 6 July 2001 and not on the original invoice dated 22 May 2001. Whilst I have already said that I attach no weight to it in the absence of its author and indeed have drawn aJones v Dunkelinference against the defendant's case having regard to that absence, it seems to me that the allegation of there being a corroboration of the measurements taken by the defendant, by the proprietor of Miniquip, necessarily required an explanation of the time difference between these two documents. 36 Paragraph 24(c) of the defence alleges that the rear wall of the house for the kitchen, meals and bedroom 1 were not in accordance with the
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Langtree plan but no evidence was led before me as to why this was said to be the case. As to the allegation in par 24(d) of the defence it is true that the walls of the house were not constructed of double clay brick. The external wall was constructed with clay brick and the internal walls were being built with lime silica bricks. However, as I have already found, there was no representation that the house was to be built of double clay brick and, in any event, I should add that even if there had been, there was no evidence to suggest that this was a breach as would have warranted termination of the contract by the defendant. 37 Similarly, as to the allegation pleaded in par 24(e) of the defence it is true that the wall between the kitchen and dining area was being constructed without a walkway between the kitchen and dining room but not as a full height wall dividing those two areas as is there pleaded. This wall was being constructed entirely in accordance with the plan which showed a 12 course high servery capped with MDF (a compressed particle board) which was entirely in accordance with the plans. Indeed the documentation discloses that this was a variation requested by the defendant for which he paid extra. 38 As to par 24(f) of the defence the evidence of Mr Hegarty was that the defendant's photo which ultimately came into evidence in the plaintiff's case as Exhibit P53 shows that this was being installed as a sliding door not a window, which evidence I accept. Finally, as to par 24(g) of the defence there was no evidence which suggested to me that the house was not being built with care and diligence or in a good and workmanlike manner.
Conclusion 39 Accordingly, on the evidence before me the case for the plaintiff is compelling. It entered into a contract with the defendant to build a house in accordance with the plans and specifications in evidence and, it had proceeded to perform the contract in accordance with its terms and conditions when it was prevented from doing so by the unlawful termination of the contract by the defendant. The conduct of the defendant in:
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3. Cutting off the water to the house so that work could not be performed pursuant to the contract, all evidenced an intention not to be bound by the terms of the contract thereby amounting to a repudiation which the plaintiff was entitled to accept and terminate the contract forthwith: Foran v Wight (1989) 168 CLR 385; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17. Further, where the defendant, as here, through his solicitors, has insisted upon a completely unwarranted and unreasonable view of the terms of the contract between him and the plaintiff as to the size of the house the plaintiff was to build in accordance with the contract, that conduct too constitutes evidence of an intention not to be bound by the contract in accordance with its terms amounting to repudiation which likewise is capable of acceptance by the innocent party: DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423. The plaintiff has therefore established a claim for damages.
Damages 40 As has long been the case, the basic principle upon which damages for breach of contract are assessed is that the innocent party is to be placed in the same position as it would have been in had the contract been performed: Wenham v Ella (1972) 127 CLR 454; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64. In the event that I have not made it plain already it is to be remembered that less than three weeks after terminating the contract on 2 May 2001 the defendant arranged for the firm Miniquip to demolish and remove from the site the house being constructed by the defendant and whilst evidence was led from the defendant through a neighbour that the building site was being pillaged by thieves, there was no prospect of the plaintiff being able to recover anything from the site in mitigation of its loss. 41 The plaintiff particularised its damages in par 13 of its statement of claim. Whilst the pleaded claim is $16,342.08 this sum was reduced by $64.05 because on recalculation the plaintiff submitted that it had improperly charged GST on the component of its claim constituted by the shire fees, the Water Authority fees and the settlement fees. Dealing with this head of claim first, the plaintiff put into evidence Exhibits P27 through to P48. Despite invitation from me the defendant did not challenge the claim for incurred costs as to any particular part of the claim save to complain that the plaintiff continued to incur costs after the defendant had demanded that the plaintiff cease work. As I have already found that the defendant's demands that the plaintiff cease work were
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unlawful, being based on a demonstrably false view of the contract, the plaintiff was entitled to continue with the works in accordance with its obligations under the contract. There was only one question which arose during the course of the evidence as to damages and this was the claim in respect of plumbing fixtures of $201.85. This was for a Caroma vanity basin which was never installed and in accordance with the evidence of Mr Hegarty would probably have been delivered to the cabinetmaker and may indeed be still at the cabinetmaker's today. In the circumstances I am not prepared to allow inclusion of that amount and accordingly the plaintiff has demonstrated a loss on the costs of construction to the date of termination of the contract in the sum of $16,076.18. 42 There was then a claim for loss of profits. "Loss of profits" is defined in the contract to mean "… the contract price less the budgeted cost of construction of the Works, which cost excludes marketing costs, supervision and overheads, unless any such costs are a direct cost of the Works." I accept the evidence of Mr Naumovski that calculated in accordance with this definition in the contract, the plaintiff has lost the sum of $17,523.73 from which however must be deducted the $500 deposit paid by the defendant leaving a sum of $17,023.73. 43 Accordingly, the plaintiff is entitled to judgment for damages assessed in the sum of $33,089.91. On this sum the plaintiff claimed interest pursuant to the contract at the rate of 13 per cent from 9 May 2001. However no term of the contract made provision for interest on damages and accordingly the plaintiff's claim for interest was put pursuant to the provisions of s 32 of the Supreme Court Act 1935 as amended. The relevant rate pursuant to the provisions of the Supreme Court Act is 6 per cent per annum and the last date upon which the plaintiff incurred a cost was 30 May 2001. Whilst ordinarily interest on an accruing amount is calculated on half the amount for the whole period of accumulation, here, as the accumulating part of the plaintiff's damages had settled by 30 May 2001 (Exhibit P44) the plaintiff elected to have all of its interest calculated with effect only from that date and accordingly the calculation is as follows: $33,089.91 x 6 per cent = $5.44 per day 631 days @ $5.44 per day = $3,432.64 And thus the plaintiff is entitled to judgment for $36,522.55.
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