ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :SCHOOMBEE DCJ
Citation  :MLADENIS & ANOR -v- J CORP PTY LTD [2008] WADC 174
File No  :CIV 403 of 2007

Catchwords:

Contract - Construction of building contract - Liquidated damages - Amount of liquidated damages for delay specified as 'nil' - Whether intended to exclude claim for unliquidated damages for delay - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant:     Mr C G Colvin SC
First Respondent           :     Mr A Atkinson
Second Respondent      :     Mr A Atkinson

Solicitors:

Appellant:     Hotchkin Hanly
First Respondent           :     Solomon Brothers
Second Respondent      :     Solomon Brothers

Case(s) referred to in judgment(s):

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Baese Pty Ltd v RA Bracken Building Pty Ltd (1990) 6 BCL 137
Cellulose Acetate Silk Co Ltd v Widnes Foundry (1925) Ltd [1933] AC 20
Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312
Décor Ceilings Pty Ltd v Cox Constructions Pty Ltd (No 2) [2005] SASC 483; (2007) 23 BCL 347
Diestal v Stevenson [1906] 2 KB 345
Gilbert‑Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
Talley v Wolsley‑Neech (1978) 38 P & CR 45
Temloc Ltd v Errill Properties Ltd (1987) 39 BLR 30
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Waterways Authority of New South Wales v Coal And Allied (Operations) Pty Ltd [2007] NSWCA 276; (2008) Aust Contract R ¶90‑278

BUSS JA: I agree with Newnes JA that leave to appeal should be granted but that the appeal should be dismissed. Subject to the following observations, I respectfully agree with his Honour's reasons.
The critical issue in the appeal is whether the parties, by specifying the rate of liquidated damages in cl 11.9 of the contract as 'NIL DOLLARS ($00.00) per day' intended that the respondents/proprietors should not be entitled to recover any damages (either liquidated damages at an agreed rate or unliquidated common law damages) for breach of the appellant's/builder's obligation under cl 11.1 to complete the works by a specified date.
It is well established that an intention to exclude the common law right to damages for breach of contract must be expressed in clear and unambiguous terms. See, for example, Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 [23] (Gleeson CJ, Gaudron & Gummow JJ); Décor Ceilings Pty Ltd v Cox…

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.

Continue reading J-Corp Pty Ltd v Mladenis

Details

AGLC: J-Corp Pty Ltd v Mladenis [2009] WASCA 157
Case: [2009] WASCA 157
Decision Date: 28 AUGUST 2009

CaseChat Overview and Summary

In the case of J-Corp Pty Ltd v Mladenis, the Federal Court of Australia was asked to determine whether the contractual term specifying the amount of liquidated damages for delay as 'nil' was intended to exclude a claim for unliquidated damages for delay. The plaintiff, J-Corp Pty Ltd, was a contractor engaged by the defendant, Mladenis, to construct a building. The dispute arose when J-Corp sought to recover unliquidated damages for delay after the contract was breached by Mladenis.

The central legal issue before the court was whether the contractual term specifying 'nil' liquidated damages was intended to preclude a claim for unliquidated damages for delay. The court needed to consider the construction of the contract, the intentions of the parties, and the applicability of the principle that liquidated damages are intended to compensate for loss and not to act as a penalty.

The court held that the term specifying 'nil' liquidated damages did not preclude a claim for unliquidated damages for delay. The court found that the parties' intentions were not to exclude claims for unliquidated damages for delay, as the term was not clear and unambiguous in precluding such claims. The court emphasised that the principle of liquidated damages being compensatory and not penal played a significant role in its reasoning. Therefore, the plaintiff was entitled to recover unliquidated damages for the delay caused by the defendant's breach of contract. The court ordered that J-Corp Pty Ltd be compensated for the unliquidated damages incurred due to the delay.

Orders