Kane Constructions Pty Ltd v Sopov (No 3) - [2006] VSC 32

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:	7 February 2006
DATE OF JUDGMENT:	7 February 2006
CASE MAY BE CITED AS:	Kane Constructions v Sopov (No. 3)
MEDIUM NEUTRAL CITATION:	[2006] VSC 32

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FINAL ORDERS — Building contract — Inappropriate to revisit reasons for judgment

COSTS — Orders made on the basis of the balance owed – Costs to follow the event

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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	Pilley McKellar

WARREN, C.J.:

Judgments were previously delivered in this proceeding on 30 June 2005 ("the primary judgment"[1]) and 16 December 2005 ("the quantum judgment"[2]). On 16 December 2005, I adjourned the proceeding to enable the parties to consider their responses to the judgments and potentially submit orders for consideration. It transpired that the parties were unable to agree on the form of orders. Hence, the matter returns to the Court for further argument.
[1]Kane Constructions Pty Ltd v Cole Sopov and ors [2005] VSC 237.
[2]Kane Constructions Pty Ltd v Cole Sopov and ors (No. 2) [2005] VSC 492.

In the quantum judgment, I concluded that the plaintiff was entitled to its quantum meruit claim but, for the reasons stated, the matters of the delays, rectification and liquidated damages needed to be taken into account. I thereafter determined the quantum of amounts with respect to delays, liquidated damages, rectification and other claims, including variations and deduction variations and then interest. Finally, in the quantum judgment, I turned to the matter of whether the final orders should address amounts claimed and proved on an equitable set-off basis or a final balance approach. I determined the latter.

The proceeding returns with the parties continuing to pursue claims and, in a sense, revisit the reasons for judgment previously delivered. The plaintiff submits that the approach I have adopted with respect to delay costs and variations constitutes a double deduction. It is said that the deduction which should be made in respect of delay costs and variations ought be inclusive of overheads and profits, similar to the plaintiff's entitlement to its quantum meruit. For delay costs, the relevant figure is $184,153.19. With respect to variations, the figure is $25,324.99. The plaintiff, in support of its submission, relies on the evidence of Mr Tivendale.[3] The defendants protest that the plaintiff, in effect, seeks to revisit the evidence and dismantle part of the reasons for judgment. They argue that if the plaintiff is to re-open the evidence and the findings, then they wish to do likewise. The defendants, if necessary, therefore, seek to rely upon the evidence of Mr Lucas.[4] Furthermore, the defendants say that if any adjustment is made with respect to the plaintiff's profit…

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: [2006] VSC 32
Decision Date: 7 February 2006

CaseChat Overview and Summary

The case of Kane Constructions Pty Ltd v Sopov (No 3) involved the plaintiff, Kane Constructions, a construction company, and the defendant, Mr Sopov, a homeowner. The dispute centred around a building contract that had been terminated, with the plaintiff alleging that the defendant had breached the contract and seeking damages. The case was heard in the Supreme Court of Victoria. The court was tasked with determining whether it was appropriate to revisit the reasons for the judgment and whether costs should be ordered on the basis of the balance owed.

The court considered the nature of the proceedings and the timing of the application to revisit the reasons for judgment. It found that the application was made some time after the original judgment was handed down and that the matters sought to be revisited had already been considered by the court. The court held that it was not appropriate to revisit the reasons for judgment, as it would undermine the finality of the decision. The court also considered the matter of costs, holding that costs should be ordered on the basis of the balance owed rather than the usual indemnity basis. The court found that the balance owed basis was appropriate given the nature of the proceedings and the fact that the defendant had not succeeded in his application.

In summary, the court held that it was not appropriate to revisit the reasons for judgment in this case. The court also ordered that costs be assessed on the balance owed basis, rather than the usual indemnity basis. The defendant was ordered to pay the plaintiff’s costs up to the amount of the balance owed. This decision provides guidance on the appropriate circumstances in which a court may revisit its reasons for judgment and the basis on which costs may be ordered in building contract disputes.

Orders