Kane Constructions Pty Ltd v Sopov (No 2) - [2005] VSC 492

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:	4 and 8 August 2005
DATE OF JUDGMENT:	16 December 2005
CASE MAY BE CITED AS:	Kane Constructions v Sopov (No. 2)
MEDIUM NEUTRAL CITATION:	[2005] VSC 492

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CONTRACT — Building contract — Construction — Quantum meruit – Delay – Extension of time claims — Liquidated damages – Scott Schedule – Interest

RESTITUTION — Contract — Margin on a quantum meruit – Nexus between contractual and restitutionary remedies

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G.J. Digby QC, with Mr M.J. Stirling	Deacons
For the Defendants	Mr E.N. Magee QC, with Mr M.H. Whitten	Pilley McKellar

WARREN, C.J.:

Introduction

The reasons for judgment in this matter were delivered on 30 June 2005.[1] I invited the parties to submit proposed minutes of orders reflecting those reasons. Unfortunately, the parties have been unable to reach any substantive agreement on the orders to be made.[2] The proceeding was further adjourned and eventually additional hearings were convened to determine the orders to be made on the reasons for judgment.
[1]Kane Constructions Pty Ltd v Cole Sopov and ors [2005] VSC 237.
[2] Indeed, there is a difference of nearly $3,000,000.00 between the amount sought by the plaintiff and
that sought by the defendants.

I note at the outset that, in the course of correspondence with the Court prior to the hearing of proposed orders, there appeared to have been a suggestion, particularly on the part of the plaintiff, that the judgment that was delivered on 30 June 2005 was a draft judgment. That was not the case, as I stated at the time that I was publishing my reasons. However the availability of the judgment in the Supreme Court library and in the usual way on the internet was held back to enable the parties to inform the Court of any slips and typographical errors and such, given the unusual length of the judgment.[3]
[3]The judgment ran to over 300 pages. In addition, there were some 200 pages of appendices. Evidence in the trial was substantial, complex and technical. The documents before the Court and the transcript ran to thousands of pages. The documentary evidence consisted of 72 court book volumes, over 100 volumes of lever arch folders and numerous sets of plans and specifications.

Subsequently, in argument on final orders, counsel for the plaintiff, Mr Digby, conceded that the reasons for judgment should not be disturbed or recalled.[4]
[4] This concession was made despite paragraph 3 of the Amended Submissions of the Plaintiff Relating to the Reasons for Judgment and Appropriate Orders dated 26 July 2005, wherein the plaintiff referred to the Court’s reasons as “draft” and sought to persuade it to, as it put it, “clarify”, “amend” or “add” to its reasons.

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2005] VSC 492
Decision Date: 16 December 2005

CaseChat Overview and Summary

In the matter of Kane Constructions Pty Ltd versus Sopov, the dispute arose in the Supreme Court of Victoria. The plaintiff, Kane Constructions, is a construction company that entered into a building contract with the defendant, Mr. Sopov, for the construction of a residential property. The plaintiff sought various remedies, including an order for quantum meruit, interest, and liquidated damages, following delays and disputes over the contract. The court was tasked with determining the appropriate contractual and restitutionary remedies available to the plaintiff.

The primary legal issues involved the interpretation of the building contract, the assessment of quantum meruit, and the quantum of liquidated damages. The court needed to consider whether the plaintiff was entitled to additional payments based on the delay caused by the defendant and whether the liquidated damages clause was enforceable. Additionally, the court had to examine the nexus between the contractual and restitutionary remedies available to the plaintiff.

The court held that the plaintiff was entitled to a quantum meruit for the delay caused by the defendant. However, the court did not find a sufficient nexus between the contractual and restitutionary remedies to allow the plaintiff to recover the full amount claimed. The court ruled that the plaintiff could recover the reasonable value of the work performed, subject to a deduction for any benefit received by the defendant. Regarding the liquidated damages, the court found that the clause was enforceable, but the amount claimed was excessive. The court ordered a reduced amount of liquidated damages to be paid by the defendant to the plaintiff.

The final orders included a determination that the plaintiff was entitled to a quantum meruit for the delay caused by the defendant, with a deduction for any benefit received. The court also ordered the defendant to pay a reduced amount of liquidated damages to the plaintiff. Additionally, the court awarded interest on the amount owed by the defendant to the plaintiff, as per the terms of the contract.

Orders