Jadd Projects Pty Ltd v Muldoon Tiles Supply & Fix Pty Ltd
[2004] WASCA 180
•17 AUGUST 2004
JADD PROJECTS PTY LTD -v- MULDOON TILES SUPPLY & FIX PTY LTD [2004] WASCA 180
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 180 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:48/2003 | 18 MAY 2004 | |
| Coram: | TEMPLEMAN J ROBERTS-SMITH J MCLURE J | 17/08/04 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| B | |||
| PDF Version |
| Parties: | JADD PROJECTS PTY LTD (ACN 079 793 114) MULDOON TILES SUPPLY & FIX PTY LTD (ACN 009 360 794) |
Catchwords: | Practice and procedure Appeal from decision of Master dismissing application to set aside statutory notice of demand under s 459E(2)(e) of the Corporations Law Whether a genuine dispute as to the existence of a debt Turns on own facts Corporations Statutory notice of demand under s 459E(2)(e) of the Corporations Law Whether a genuine dispute as to the existence of a debt Turns on own facts |
Legislation: | Corporations Law, s 459 |
Case References: | Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 Bolton v Mahadeva [1972] 1 WLR 1009 Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 21 ACSR 581 Simpson Steel Structures v Spencer [1964] WAR 101 Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59 Capital Bay Investments Pty Ltd v Richard Szklarz Architects Pty Ltd, unreported; SCt of WA; Library No 980503; 8 September 1998 Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 Westpoint Management Pty Ltd v Goakes [2002] WASCA 317 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : JADD PROJECTS PTY LTD -v- MULDOON TILES SUPPLY & FIX PTY LTD [2004] WASCA 180 CORAM : TEMPLEMAN J
- ROBERTS-SMITH J
MCLURE J
- Appellant (Plaintiff)
AND
MULDOON TILES SUPPLY & FIX PTY LTD (ACN 009 360 794)
Respondent (Defendant)
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MASTER SANDERSON
File Number : COR 386 of 2002
(Page 2)
Catchwords:
Practice and procedure - Appeal from decision of Master dismissing application to set aside statutory notice of demand under s 459E(2)(e) of the Corporations Law - Whether a genuine dispute as to the existence of a debt - Turns on own facts
Corporations - Statutory notice of demand under s 459E(2)(e) of the Corporations Law - Whether a genuine dispute as to the existence of a debt - Turns on own facts
Legislation:
Corporations Law, s 459
Result:
Appeal allowed
Category: B
Representation:
Counsel:
Appellant (Plaintiff) : Dr J J Edelman
Respondent (Defendant) : Mr K C Staffa
Solicitors:
Appellant (Plaintiff) : AC Thorpe
Respondent (Defendant) : Staffa Lawyers
Case(s) referred to in judgment(s):
Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518
Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334
Bolton v Mahadeva [1972] 1 WLR 1009
Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 21 ACSR 581
Simpson Steel Structures v Spencer [1964] WAR 101
(Page 3)
Case(s) also cited:
Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59
Capital Bay Investments Pty Ltd v Richard Szklarz Architects Pty Ltd, unreported; SCt of WA; Library No 980503; 8 September 1998
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
Westpoint Management Pty Ltd v Goakes [2002] WASCA 317
(Page 4)
1 TEMPLEMAN J: I have had the advantage of reading in draft the reasons to be published by Roberts-Smith J. I agree, for the reasons given by his Honour, that there was a genuine dispute about the existence of the debt the subject of the statutory demand, and that therefore, the appeal should be allowed and the statutory demand set aside.
2 ROBERTS-SMITH J: On 13 March 2003 Master Sanderson dismissed an originating process filed by Jadd Projects Pty Ltd ("Jadd") to set aside a creditor's statutory demand pursuant to s 459E(2)(e) of the Corporations Law dated 27 November 2002, by Muldoon Tiles Supply & Fix Pty Ltd ("Muldoon Tiles") for payment of $40,700.
3 The debt was described as being amounts outstanding for re-supply and laying of marble floor tiles to replace water damaged tiles at 918 Hay Street, Perth in the period July to late September 2002, being the amount claimed in an invoice dated 2 September 2002.
4 The learned Master's reasons for decision were briefly expressed, as follows:
"I'm not satisfied that the statutory demand in this case should be set aside. The demand relates to work undertaken at a certain restaurant, tiling work. It appears clear from the evidence that at some stage there was defective workmanship and that rectification of that workmanship was required. That rectification, as I understand it, has been undertaken and completed certainly to the satisfaction of the owner of the building.
It is not possible, in my view, to identify at the moment what would, in the terms of the section, be the genuine dispute. It may be that at some stage in the future a claim could be made in relation to this work, but that's true of any work which is undertaken by any tradesman that is covered by the provisions of the Builders Registration Act or indeed under the provisions of any other act which might be relevant.
As matters stand at the moment, it seems to me that there can be no genuine dispute that the work has been undertaken, that the amount claimed remains outstanding, and that therefore there is no basis upon which to set aside the statutory demand. Accordingly, I dismiss the originating process and order that the plaintiff pay the defendant's costs of the application, including the reserved costs."
(Page 5)
5 Jadd appeals against that decision by notice of appeal filed 3 April 2003 and instead seeks orders that Muldoon Tiles' statutory demand be set aside and Muldoon Tiles pay the costs of the appeal and Jadd's application to set aside the statutory demand, together with all costs reserved.
6 There were originally two grounds of appeal but one was abandoned.
7 The only ground of appeal accordingly is that:
"The learned Master erred in law and in fact in failing to find there was a genuine dispute, in that:
… The learned Master found that rectification of the work the subject of the sub-contract agreement between the parties had been carried out but there was a dispute as to the quality of the rectification when it was common ground between the parties that NO rectification work had been carried out. As a consequence the learned Master found that the Appellant (Plaintiff) had an on-going right to require the Respondent (Defendant) to repair its defective rectification work. The learned Master should have found that there had been no rectification of the defective work and there was evidence to show that the cost of such rectification would exceed the amount claimed."
8 The proceedings arose in the following way.
9 In July 2002 Jadd was engaged in effecting the fit-out of Mortlocks Restaurant at 918 Hay Street, Perth on behalf of the owner Arrochar Pty Ltd ("Arrochar"). Muldoon Tiles was carrying out tiling to the restaurant, having been engaged directly by Arrochar to carry out that work. Whilst tiling and fit-out works were in progress, one of Jadd's sub-contractors broke a fire sprinkler system and flooded the floor, causing damage to laid and unlaid marble tiles.
10 Jadd engaged Muldoon Tiles to carry out repair and rectification works to the damaged tiles.
11 Muldoon Tiles carried out the repair work between 24 July and late September 2002.
12 From an early stage Jadd regarded Muldoon Tiles' performance of the repair works as unsatisfactory.
(Page 6)
13 A director of Jadd, Joe Impicciatore and other Jadd employees, complained to Muldoon Tiles on numerous occasions orally and in correspondence. On 7 August 2002 Mr David Ball of Jadd sent by facsimile a letter of complaint to Muldoon Tiles, complaining their performance had been "amateurish and totally unsatisfactory". Specific complaints were that tradesmen were not turning up on time, would not take direction as to areas required, did not complete the areas on which they were working and the quality of their workmanship was sub-standard. He wrote that it was essential that the Muldoon Tiles' representative meet Impicciatore on site that morning or Jadd would have no alternative but to bring in another contractor who could perform the work.
14 By letter of the same date sent by facsimile to Jadd, Mr Michael Gattorna replied on behalf of Dynasty Stone Pty Ltd ("Dynasty"). (Dynasty is a related company to Muldoon Tiles and the two appear to have been used interchangeably. No point is taken about this. I shall simply refer to Muldoon Tiles, whether correspondence is on that company's letterhead or that of Dynasty). In that letter Gattorna maintained their performance had been professional, tiling was completed on 2 August 2002 and grouting on 5 August, two days ahead of program. Stone was delivered on 6 August and he confirmed the toilet areas would be completed on 9 August and were on program. The balance of the contract was on program for completion by 27 August. He maintained the workmanship was of good quality. He then wrote:
"Whilst we were tiling demolition of water damaged marble and screed were being carried out. We still have not received your written confirmation of your verbal instruction to proceed (as quoted $40,000 plus GST) with the rectification of water damaged insurance claim section of the work."
15 He expressed concern that ceilings and services over the main restaurant floor were not complete and said Muldoon Tiles would not be held responsible for any further damage by other trades.
16 Muldoon Tiles' concern about the lack of instructions was referred to again in a letter from Gattorna dated 14 August 2002. In that he noted that Muldoon Tiles was proceeding as directed by Jadd with the marble floor but had not received a written confirmation order. He sought clarification on whether the insurance company would be paying Muldoon Tiles directly for the work or whether the company would pay Jadd who would in turn pay Muldoon Tiles.
(Page 7)
17 By facsimile letter dated 26 August 2002, Jadd made further complaint about what it regarded as a lack of professionalism by Muldoon Tiles. The letter was written by Ball who complained also of the quality of the workmanship and materials delivered to site which had to be rejected. He advised that "as to the insurance work" Jadd would be paying Muldoon Tiles directly once payment was received from their insurer.
18 On 17 September 2002, Ball again wrote to Gattorna demanding that Muldoon Tiles return workers to the site immediately to complete the works. He wrote that the floor needed grouting, steps needed completing and patching needed to be carried out. He said that until those works were completed, Jadd would be unable to seal the floor. He said that they could not afford to wait further before concreting plinths and had to proceed at once without further delaying the progress of the project. Any staining of granite adjacent to the plinths would have to be replaced at the cost of Muldoon Tiles.
19 Later that same day in another faxed letter to Muldoon Tiles, Ball noted that Jadd had received no response about the fax sent earlier that day. He said that if a response was not received by close of business that day clearly setting out Muldoon Tiles' intentions for the project, Jadd would have to assume they were no longer interested in the work and would terminate their sub-contract forthwith.
20 That prompted a response the same day in which Gattorna noted that at a site meeting the previous week it was agreed that Impicciatore would advise the date when the marble was to be sealed. Muldoon Tiles would require six to eight hours to touch up the floor so that the floor protection would only need to be taken up once. He said that all other concerns regarding delay were rejected.
21 By a further faxed letter the same day, Jadd disputed that the arrangement had been for Impicciatore to advise Muldoon Tiles when sealing was to take place. He noted that before sealing could be contemplated, the steps had to be complete or else sealing would be pointless and complained that the marble at the bottom of the front step was out of square and had to be replaced before sealing could proceed.
22 The following day Ball sent a further facsimile message at 8.35 am noting that there were still no workmen from Muldoon Tiles on site and querying where they were.
(Page 8)
23 In a facsimile letter sent later that morning, Gattorna wrote that Jadd appeared to be "unaware of the facts". He wrote that the sealing activity would stop all other work whilst it dried for 24 hours and Jadd was to nominate a day suitable for when that was to occur. Muldoon Tiles were to carry out grouting and "snag" items immediately prior to the date of sealing nominated by Jadd. He said it was apparent Jadd's program approach had changed.
24 In a response sent by facsimile the same morning, Ball said Jadd was fully aware that the sealer would have to cure for 24 hours and that Muldoon Tiles were to carry out "snag" items just prior to that. He said however that completion of the various items of work that had been left unfinished were not "snag" items. He proceeded to list a number of them.
25 Ball made further complaints on 19 September.
26 On 1 November 2002 Mr Jean-mic Perrine, a director of Arrochar sent a facsimile letter to Gattorna, a copy of which he also provided to Impicciatore.
27 In that memo he wrote:
"I confirm that I do not wish you to undertake any remedial works to the very poor work at Box Deli. The floors have significant problems, as does the entire extent of tiling work.
It is my opinion that any attempt to remedy the situation (except by removing fully all tiles and relaying) would make the situation worse and cause me greater loss in trading. I shall deal with the issue of compensation separately."
28 On 12 December 2002 Impicciatore arranged for representatives of the Australian Tile Council Inc to inspect the site and comment upon the quality of the work. The representatives wrote a preliminary letter of recommendation the same day. They recommended an independent advisor be appointed to review a number of matters. These were that there seemed to be a lot of areas chipped or frayed throughout most of the floor areas, a lot of stepping from one slab to another, misalignment of joints (especially from different levels of laying ie step-ups), some slabs laid broken and glued together instead of being replaced, a fair amount of grouting missing and bathroom tiling laid poorly and not (making) a flat surface.
(Page 9)
29 Also on 12 December 2002 Jean-mic Perrine sent by facsimile a memo to Impicciatore in the following terms:
"I confirm to you that I have formally advised Muldoon Tiles on several occasions that I am entirely dissatisfied with the re-laid marble floor in my restaurant. Muldoon undertook some of that work for you under the insurance works and some for me under the original contract.
In any case I have advised in respect to the work, which Muldoon did under the original contract for me, that I am deeply concerned with the cracking and movement, which continued to occur in the slabs. A site visit with Muldoon highlighted the problem.
I have advised Muldoon, that at this point in time I am unable to allow the works to be removed and reinstated, as this will cause the Restaurant business to fail.
I have advised that I will require full reinstatement to occur if the defective marble gets any worse, which it has already done since the advice was given.
I have made no comment or entered into no arrangements in relation to the works Muldoon undertook for you in relation to the insurance claim. I have so advised Muldoon."
30 On 13 December 2002 Impicciatore arranged for Mr Neville Davis, an independent building consultant trading as "Associate Building Consultants", to inspect the works.
31 Davis provided a report dated 16 December 2002.
32 He noted that Jadd had indicated concerns regarding several aspects of the marble slab floor work which in essence related to chipped or frayed tile corners and edges, misalignments and grouting problems. He said that his inspection supported the concerns expressed and he listed what he described as items of unsatisfactory work. These were:
"1. Set Out
• It is normal procedure to establish tile or slab lines from the focal point of the work, which in this case would be the front entrance. The
(Page 10)
- alignment should be carried through the extent of the project.
- • In this instance the slab line has not been maintained from the front entrance adjacent to the floor mat recess, to the entrance landing, main floor area, and the landing leading to the toilet area. All four sections have different set out alignments.
- 2. Tile Alignment
• Throughout the work inspected, the intersections of each slab do not maintain correct joint lines. This is often the case if set out is not squared, or when the slabs themselves are not accurately cut to size or shape.
3. Jagged and Flaked Slab Edges
• There are numerous chipped edges and jagged areas over the entire project, especially along the expansion joint.
• The corners of many slab sections are also damaged and chipped.
• Flaking of edges were noted in many areas.
4. Repaired Tiles
• Several tiles in the main entrance and in close proximity to this area have been patched. The patching material does not match the marble colour and the difference is easily noticeable.
• In its present situation, the work is aesthetically unacceptable, especially where patching is easily seen. It would be normal practice to select the best face marble to use in such situations, and placing flawed slabs in less observable positions.
• The builder is also concerned that the patching work may not have been carried out correctly.
(Page 11)
- 5. Lipping of Slabs
Several slabs inspected are at a different surface plane to adjacent slabs, causing lipping on the slabbed floor surface. Lipping is always more noticeable when slabs are fitted using tight joints.
6. Cracked Slabs
• A number of marble slabs were easily detected as having factures within the surface.
• New cracks have developed in several areas since the work was completed.
7. Grouting
• This aspect is below acceptable standards throughout the work, with some grouting being proud of the surface, and the other sections being rough and with uneven finishing.
• Grout has become dislodged on the balcony leading to the bar entrance.
8. Set Out to Toilets
• Three toilets are provided - disabled, male and female.
• The tiling contractor requested that smaller marble sections be used in these areas so that falls could be formed to the floor wastes.
• Instead of finishing the larger slabs at each doorway, a large slab extends through the doorways of the toilets. The smaller pieces should have been laid in the total floor area of each location.
9. Mosaic Tile - Male Toilets
Several areas in the male toilets which have noticeable faults, including:
(Page 12)
- • Mosaic wall tiles over the urinals are badly positioned, with several which have been indented and misaligned on the wall surface.
• A section of these tiles are badly positioned on the face of the north wall of the toilet area.
• On other walls the sheets of tiles have been positioned so that vertical and/or horizontal joint spacing has not been maintained, and they are butted up to adjoining tiles.
- Note: Walls in the female toilet and disabled toilet not inspected, except to check the floor tiling.
- 10. Expansion Joint
• As already noted, marble slab sections laid to the expansion joint are chipped. Also the grouting varies in width, and is poorly completed."
34 Impicciatore deposed that in his opinion as a builder, the work required rectification, which would require the lifting, replacing and relaying of substantial areas of the marble tiling. He estimated the rectification would cover the whole of the re-laid tiling and would cost at least the amount originally billed for the re-laying. He deposed to his belief that the works have not been carried out in a manner which entitles Muldoon Tiles to payment but rather in a way which requires rectification which would cost as much as the claim by Muldoon Tiles and that Jadd is liable to a claim by the owner because of the quality of Muldoon Tiles' work. Finally, he deposed to his belief that Jadd has an off-setting claim for damages against Muldoon Tiles for the cost of rectification and any losses claimed from Jadd by Arrochar.
35 Colin Mulcaster is a director of Muldoon Tiles. He filed an affidavit sworn 6 February 2003 to which was annexed a copy of the statutory demand and his affidavit dated 27 November 2002 in support of it.
(Page 13)
36 In his 2002 affidavit Mulcaster deposed full particulars of the claim were set forth in a facsimile dated 19 November 2002 sent by Muldoon Tiles' solicitor Mr Staffa to Jadd, a copy of which was annexure CMM3 to his affidavit. In fact that annexure was not included in the appeal book. Nor was "CMM4" which was said to be a true copy of a letter dated 13 November 2002 from Jadd to Muldoon Tiles.
37 In the same affidavit Mulcaster deposed that Impicciatore had admitted that Jadd had received payment in full from its insurer for the rectification work the subject of the claim but had refused to pay the debt.
38 Mulcaster verified the work for which the amounts in the statutory demand were claimed were carried out by Muldoon Tiles and were immediately owing and payable by Jadd.
39 In his 2003 affidavit, Mulcaster deposed that Muldoon Tiles and Dynasty had provided to Arrochar a warranty and indemnity in respect of any additional work that may be required to the remedial tile laying work undertaken as a result of the tiles being damaged by Jadd's subcontractor. Finally, he deposed Muldoon Tiles completed the remedial tiling work about the end of September 2002.
40 It may be noted that there is no mention in Mulcaster's affidavits of any of the complaints made to Muldoon Tiles about the work done.
41 In an affidavit sworn 6 February 2003, Ms Helen Mulcaster confirmed that the remedial tile laying work, the subject of the creditor's statutory demand, was completed by the end of September 2002. She deposed that on 13 November that year she had a telephone conversation with Impicciatore regarding the non-payment of the $40,700, in which he told her that Jadd had received the insurance payout to pay Muldoon Tiles some eight weeks earlier.
42 The respondent also relied upon an affidavit of Perrine sworn 6 February 2003. He is an architect by profession and at all times represented Arrochar in matters pertaining to the refurbishment of the premises by Jadd.
43 He deposed that in discussions with Impicciatore and Gattorna, the former had mentioned that he had made a claim on Jadd's insurance to cover the costs of the repair work undertaken by Muldoon Tiles to rectify the water damage to the marble floor tiles. This work involved jack-hammering the floor tiles out, cleaning up the rubble and relaying new marble tiles. He then deposed that:
(Page 14)
- "10. Arrochar Pty Ltd has not made and will not make any claim against Jadd Projects Pty Ltd in relation to the rectification work undertaken by Muldoon Tiles.
Arrochar Pty Ltd has been provided with written indemnities by Muldoon Tiles, and its related company Dynasty Stone Pty Ltd, in relation to any remedial work or loss or damage arising from the need to rectify any of the tiling work or to remove and replace the tiles.
11. From Arrochar's point of view, there is no reason why Jadd should not pay Muldoon Tiles for the said retiling work."
44 It can immediately be seen from the foregoing narrative of the course of the dealings between the parties, that the learned Master was in error when he said that rectification of the work had been undertaken and completed, "certainly to the satisfaction of the owner of the building".
45 It is possible that there was some confusion about what work was actually being referred to.
46 The ground of appeal uses the term "rectification work" to refer to rectification of the defective work done to remedy the damage caused by flooding. Muldoon Tiles does not claim to have done that rectification work. That is no doubt because Muldoon Tiles says the remedial work it did was perfectly satisfactory and that is the work for which it is claiming payment.
47 Although Muldoon Tiles was originally engaged directly by Arrochar to do the tiling work in the premises, Jadd appears (although it is not entirely clear) still to have been responsible for management of the fit-out project as a whole. Thus, Jadd's complaints from an early stage about delay and the quality of the work being done by Muldoon Tiles, appear to have concerned the tiling work generally, being done under Muldoon Tiles' contract with Arrochar.
48 Following the damage caused to tiling work already done, by one of Jadd's subcontractors, Jadd engaged Muldoon Tiles to undertake remedial work. That was done by the end of September 2002, but according to Jadd it was of the same poor quality as the rest of the work which had been done by Muldoon Tiles. That view is supported by Davies' report and by Perrine's memo of 12 December 2002.
(Page 15)
49 Perrine's complaint to Muldoon Tiles was about the work the firm did for him under their contract. He expressly said he made no comment and entered into no arrangements with Muldoon Tiles in relation to the work they had undertaken for Jadd in relation to the insurance claim (ie the remedial work).
50 Jadd says the remedial work should be rectified. That rectification work has not been done - but, as counsel for the respondent pointed out, Jadd has made no demand on Muldoon Tiles that it be done (presumably because Arrochar will not allow access to the site for that purpose, for the reasons expressed by Perrine).
51 It must be accepted that for the appeal to be pursued the legal rights of the parties to it must be in actual controversy: Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334.
52 For the respondent it was submitted that the learned Master was right to conclude there was no controversy between the parties to the appeal and that what the appellant was seeking to rely upon was no more than a possible or contingent or potential claim that might arise in the future, but which had not arisen at the time of the hearing before the learned Master and has still not arisen.
53 This argument springs from a contention advanced by counsel for the appellant before the learned Master based upon s 12A of the Builders Registration Act 1939 (WA).
54 That section relevantly provides that where a complaint being made to it by any person including the Board, the Disputes Tribunal is satisfied that any building work "has not been carried out in a proper and workmanlike manner by reason that the building work is faulty or unsatisfactory …" the Tribunal may make certain orders, including requiring rectification. Such a complaint may be made up to six years from the time of completion of the work (s 12A(1a)(a)). The appellant's argument was that it matters not what agreement Arrochar has made with Muldoon Tiles, if it does not include Jadd and bind anyone to whom the property may be transferred in future, since such new registered owner would be entitled to claim against Jadd for rectification of the work at any time within six years from September 2002.
55 In my view it is not necessary to consider that argument because neither this appeal nor the application before the learned Master turns upon it.
(Page 16)
56 For the learned Master to set aside this statutory notice, it was necessary for Jadd to establish there was a genuine dispute as to the existence of a debt. A mere assertion that there is a genuine dispute is not enough, nor is a bare claim that the debt is disputed, sufficient (Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 21 ACSR 581, per Sundberg J at 587).
57 The evidence shows a dispute between Jadd and Muldoon Tiles about the performance of the remedial work. That was work which Jadd had contracted Muldoon Tiles to perform. Arrochar was not a party to that contract. Whatever arrangement may have been made between Arrochar and Muldoon Tiles could not affect Jadd's contractual rights with Muldoon Tiles. That is the work which Muldoon Tiles claims was properly performed by it and payment for which the $40,700 is owing to it by Jadd. That the money has been paid by Jadd's insurer to Jadd to enable it to make payment for that work, seems to me to be irrelevant for present purposes. Jadd says Muldoon Tiles is in breach of contract and nothing is payable by it to Muldoon Tiles because the work was so poorly done. Again, whether Jadd would require the remedial work to be rectified by Muldoon Tiles (if Arrochar were to allow that to be one) seems to me of no present moment. Jadd's position is that there has been a total, or at least a substantial, failure of consideration on the part of Muldoon Tiles and so it has no liability to pay for the work. That is the basis upon which Jadd applied to have the statutory demand set aside. That is an existing dispute between the parties as to the existence of the debt. It is a dispute upon which the appellant could succeed if its claim of a total failure of consideration or substantial non-performance is made out (Bolton v Mahadeva [1972] 1 WLR 1009 and Simpson Steel Structures v Spencer [1964] WAR 101, per Hale J).
58 The learned Master therefore erred in concluding there was no existing dispute as to the existence of the debt and the appeal must accordingly be allowed.
59 I would allow the appeal and order that the statutory demand be set aside.
60 MCLURE J: I have had the advantage of reading the reasons to be published by Roberts-Smith J. I agree with the orders he proposes for the reasons he gives. In particular, I agree there is a genuine dispute about the existence or amount of the debt to which the demand relates. There is evidence to support the appellant's case that the respondent's claim for the contract price is pursuant to an entire contract which has not been
(Page 17)
- substantially performed by the respondent. That is a defence to the entire claim. In the circumstances, it is unnecessary to determine whether the appellant has a damages claim against the respondent for breach of contract for the cost of rectifying the allegedly defective work, a matter considered by the House of Lords in Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518.
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