IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 6897 of 2001

KANE CONSTRUCTIONS PTY LTD
(ACN 007 354 396) Plaintiff

v

COLE SOPOV AND ORS Defendants
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JUDGE:

WARREN, C.J.

WHERE HELD:

Melbourne

DATE OF HEARING:

21-22, 25, 27-29 August 2003; 2- 3, 9-12, 16-19, 23-26, 30 September 2003; 1-2, 7-10, 14-17, 20-21, 29-31 October 2003

DATE OF JUDGMENT:

30 June 2005

CASE MAY BE CITED AS:

Kane Constructions v Sopov

MEDIUM NEUTRAL CITATION:

[2005] VSC 237

1^st revision 26 July 2005

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CONTRACT — Building contract — Construction — Progress certificates — Claims for payment — Evidence and information in support of progress claims — Whether material supporting claims condition precedent to issue of a payment certificate — Validity of late progress claims — Validity of late progress certificates — Assessment procedures — Estoppel — Delay and extension of time claims — Liquidated damages — Right of principal to deduct liquidated damages from progress payments — Role of the superintendent — Undue influence — Suspension of works under the contract — Right of principal to access retention moneys under the contract — Substantial breach — Repudiation — Termination — Alternative rights and remedies available to aggrieved party as a result of repudiation — Contractual damages — Quantum meruit — Whether contractual provision may exclude claim for quantum meruit following termination — Clause 44.10 of AS 2124-1992 — Whether ss.16 and 33 of the Domestic Building Contracts Act 1995 (Vic) apply — Whether s.51A of the Trade Practices Act 1974 (Cth) applies
RESTITUTION — Contract — Unjust enrichment — Claim for variations
DEFENCE AND COUNTERCLAIM — Costs to complete — Claim for defective work — Deduction variations — Whether plaintiff breached contract by serving notice to show cause and suspending works — Costs of completion certificate issued by the superintendent — Extent of completion at the time the plaintiff left building site
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APPEARANCES:
Counsel Solicitors

For the Plaintiff Mr G.J. Digby Q.C. with
Mr M.J. Stirling Deacons

For the Defendants Mr E.N. Magee Q.C. with
Mr K.C. Oliver Pilley & Associates
TABLE OF CONTENTS
INTRODUCTION/OVERVIEW...................................................................................................... 2
PLEADINGS....................................................................................................................................... 3
TERMS OF CONTRACT (AND DOCUMENTS INCLUDED)................................................ 3
SUMMARIES OF WITNESSES’ EVIDENCE............................................................................... 3
PLAINTIFF’S EVIDENCE................................................................................................................ 3
(1) TIVENDALE....................................................................................................................... 3
(2) FORSTER............................................................................................................................ 3
(3) LUCAS................................................................................................................................. 3
(4) ISAACSON......................................................................................................................... 3
(5) SKARAJEW......................................................................................................................... 3
(6) WILLIAMSON.................................................................................................................... 3
(7) OMOND.............................................................................................................................. 3
(8) SWARBRICK....................................................................................................................... 3
(9) QI SHAO............................................................................................................................. 3
(10) DORDEVIC....................................................................................................................... 3
(11) THOMAS.......................................................................................................................... 3
(12) LYNAS............................................................................................................................... 3
(13) LEE..................................................................................................................................... 3
(14) GILFILLAN....................................................................................................................... 3

DEFENDANTS’ EVIDENCE........................................................................................................... 3
(1) SOPOV................................................................................................................................ 3
(2) JEFFERY.............................................................................................................................. 3
(3) BROWN............................................................................................................................... 3
(4) LONG................................................................................................................................... 3
(5) PANDOV............................................................................................................................ 3
(6) DEGENHARDT.................................................................................................................. 3
(7) GOODWIN......................................................................................................................... 3
(8) PERMEWAN...................................................................................................................... 3

SUBMISSIONS ON EXPERT EVIDENCE: LYNAS AND DEGENHARDT......................... 3
ROLE OF THE SUPERINTENDENT............................................................................................. 3
SET-OUT: STRUCTURAL STEEL AND EOT 4........................................................................... 3
EOTs 1 - 18........................................................................................................................................... 3
TERMINATION................................................................................................................................. 3
DEFECTS............................................................................................................................................. 3
COSTS TO COMPLETE................................................................................................................... 3
QUANTUM MERUIT....................................................................................................................... 3
OTHER RELIEF.................................................................................................................................. 3
MISLEADING AND DECEPTIVE CONDUCT.......................................................................... 3
DOMESTIC BUILDING CONTRACTS ACT.............................................................................. 3
SCOTT SCHEDULE.......................................................................................................................... 3
SUMMARY OF CONCLUSIONS...................................................................................................…

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 Kane Constructions Pty Ltd v Sopov

Details

AGLC: Kane Constructions Pty Ltd v Sopov [2005] VSC 237
Case: [2005] VSC 237
Decision Date: 30 June 2005

CaseChat Overview and Summary

The case of Kane Constructions Pty Ltd v Sopov involves a dispute between the plaintiff, Kane Constructions, and the defendant, Mr. Sopov, concerning the construction of a residential building. The primary issues revolve around the validity of progress certificates issued by the superintendent, the timeliness and adequacy of supporting documentation for these certificates, the legitimacy of claims for payment, and the consequences of delays and defects in the construction project. The dispute was heard and determined by the Supreme Court of Victoria.

The central legal questions that the court addressed included whether the material supporting progress claims was a condition precedent to the issue of a payment certificate, the validity of late progress claims and certificates, and the extent to which the contract allowed for the deduction of liquidated damages from progress payments. The court also examined the role of the superintendent in assessing progress claims and whether the principal contractor could rely on estoppel to prevent the deduction of liquidated damages. Additionally, the court considered claims related to delay and extension of time, substantial breaches, repudiation, termination, and the availability of alternative rights and remedies following termination.

In its judgment, the court found that the supporting material for progress claims was not a strict condition precedent to the issuance of payment certificates but that it was an important factor in the assessment process. The court held that late progress claims and certificates were valid if they were accompanied by adequate supporting evidence. Regarding the deduction of liquidated damages, the court determined that the principal could not rely on estoppel to prevent such deductions if the delay was due to the subcontractor's actions. The court also found that the principal contractor had the right to suspend works and access retention monies under the contract if there was a substantial breach by the subcontractor. The court concluded that the contract could not exclude a claim for quantum meruit following termination and that certain statutory provisions applied to the contractual relationship.

The court's final orders included a determination that the plaintiff was entitled to recover costs for the completion of the building works and damages for defective work. The court also ruled that the plaintiff was not liable for costs associated with the completion certificate issued by the superintendent and that the defendant's counterclaim for breach of contract by the plaintiff's suspension of works was dismissed. The court ordered the defendant to pay the plaintiff's costs of the proceedings.

Orders