KULLEEN Pty Ltd v Homestyle Pty Ltd - [2002] WADC 34

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: KULLEEN PTY LTD -v- HOMESTYLE PTY LTD [2002] WADC 34

CORAM: BLAXELL DCJ

HEARD: 12-16 NOVEMBER 2001

DELIVERED : 27 FEBRUARY 2002

FILE NO/S: CIV 406 of 2000

BETWEEN: KULLEEN PTY LTD
Plaintiff
AND
HOMESTYLE PTY LTD
Defendant

Catchwords:

Contracts - Building engineering and related contracts - Subcontract for the supply and erection of steelwork at building site - Claims by subcontractor against head contractor for balance allegedly due and for damages for breach of implied term - Counterclaim for amount allegedly overpaid in respect of "over measurement" in bill of quantities - Turns on own facts

Legislation:

Nil

Result:

Judgment for the plaintiff in the sum of $71,161.86

Representation:

Counsel:

Plaintiff: Mr B M C N De Lestang
Defendant: Mr J G Hanly

Solicitors:

Plaintiff: Benjamin & de Lestang
Defendant: Hotchkin Hanly

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

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337

Case(s) also cited:

Nil

BLAXELL DCJ: The plaintiff in this action trades under the name "Italsteel WA" and conducts a business of designing, fabricating and erecting structural steel. The defendant conducts business as a builder, and trades under the name of "BGC Construction".
During 1998 the defendant tendered for and obtained the contract to construct a new building for the State Government which was to house the School of Art & Design at the Northbridge TAFE College. The subcontract for the fabrication and erection of the structural steel in the building was awarded by the defendant to the plaintiff.
Following completion of the subcontract there was a dispute between the parties as to the quantum of payments due to the plaintiff. This dispute became the subject of the claims and counterclaims in the present proceedings, but during the course of the trial, many of the matters in issue between the parties have been resolved. As a result the defendant now concedes that the following items (as particularised in the statement of claim) are due and payable to the plaintiff:
-     (Invoice 3236) balance due in respect of stair 8         $   950.00
-     (Invoice 3237) balance due in respect of stair 10       $   364.00
-     (Invoice 3180) supply and erection of stringers
and treads for stair 3   $2,629.64
$3,943.64
The defendant has also abandoned the various counterclaims which were previously the subject of paragraphs 11 – 17 inclusive of its pleading.
Accordingly, the only residual issues which require my determination are as follows:
1.Whether steel stairs 1 and 2 and the lower flight of stair 3 as supplied by the plaintiff were included within the scope of works covered by the original subcontract, or alternatively whether they constitute a variation. If the latter is the case, then the plaintiff is entitled to payment of $30,434 (which quantum has been agreed).
2.Whether the plaintiff is entitled to damages in the sum of $11,385 for the alleged breach of an implied term of the subcontract that the defendant would supply adequate architectural and engineering drawings.
3.Whether there was an express or implied term of the subcontract that it would be subject to "re‑measure". If so, it has been agreed that the offsetting of over measures against under measures in the bill of quantities would entitle the defendant to payment of $16,332.48 from the plaintiff.
It should be noted that each of the above is a discreet issue which needs to be determined separately from the others. The second and third issues involve facts which are largely common ground whereas the first issue turns upon my findings as to the credibility of witnesses.

The general background to the dispute

It is common ground that the negotiations for the subcontract were conducted between Mr Stefano Gismondi (the plaintiff's then general manager) and Messrs Alan Dodd and Ching Hoi Cheong (respectively the defendant's contracts administrator and project manager). Mr Gismondi had initially submitted a quotation for the subcontract (in the sum of $505,000) to Universal Constructions which was a competing tenderer for head contract. He had also obtained a list of the other tenderers and sent copies of the quotation to all of them including the defendant.
After the defendant was awarded the head contract arrangements were made for Mr Gismondi to meet with Mr Dodd on 11 May 1998. On that date Mr Gismondi attended initially on Mr Dodd, and then on Messrs Dodd and Cheong together. It is common ground that during the course of these meetings the parties negotiated a reduction in the amount of the plaintiff's quotation down to $480,000.
The defendant contends that the complete terms of the subcontract were orally agreed on 11 May 1998. The plaintiff on the other hand claims that the oral agreement was subject to formal confirmation, and that the subcontract was completed by subsequent written documents including a revised quotation from the plaintiff dated 22 July and a purchase order from the defendant dated 4 August 1998. Whichever way the subcontract was made, it is common ground that the same was orally varied from time to time.
The owner's superintendent and architect for the project was the firm of Cox Howlett & Bailey Woodland ("Cox"). For the purpose of tender, Cox had supplied a set of architectural drawings together with engineering drawings prepared by Ove Arup & Partners as well as a bill of quantities prepared by the quantity surveyors Ralph Beattie Bosworth Pty Ltd. The plaintiff based its original quotation on these tender documents, but by the time of forwarding the revised quotation had also received further drawings prepared for the purposes of construction.
It is common ground that the architectural and engineering drawings initially provided for stairs 1 and 2 in the building to be fabricated in steel. However, on 8 May 1998 Cox issued revised drawings showing these stairs in concrete. The parties disagree as to whether they took this revision into account when they arrived at the subcontract price of $480,000.
After the subcontract work commenced, Cox on 26 October 1998 issued a further revised instruction in respect of stairs 1 and 2 which reverted to the requirement that they be fabricated in steel. The plaintiff duly fabricated and erected the steel stairs 1 and 2 in accordance with that instruction and claims that it is entitled to payment for these items by way of a variation to the subcontract.
At all material times it was contemplated by the parties that the plaintiff would prepare a detailed "shop drawing" of each item of structural steel prior to fabrication. The plaintiff subcontracted this task to Mr Roger Swallow, a design draftsman carrying on practice under the name of Consultex. Prior to the plaintiff entering into the subcontract with the defendant, Mr Swallow agreed to prepare all of the necessary shop drawings for the sum of $48,000. However, the plaintiff contends that Mr Swallow ended up with much more work than he had bargained for because of inadequacies in the architectural and engineering drawings as supplied by Cox. Mr Swallow submitted invoices for this additional work (totalling $11,385) and these have become the subject of the plaintiff's claim for damages from the defendant.
The issue whether the subcontract was subject to "remeasure" emerges from the fact that there were inconsistencies between the original bill of quantities and the tender drawings. Further inconsistencies developed when revised drawings issued during the course of construction contained particular changes which were never the subject of formal variations. I have heard expert evidence as to the usual practice in the building industry in resolving such inconsistencies, and it will also be necessary to refer to the general conditions of the head contract in order to determine this issue.

Evidence as to the subcontract negotiations

There are essentially two versions of the negotiations which give rise to the subcontract between the parties. The plaintiff's version comes from its then general manager Mr Stefano Gismondi. According to Mr Gismondi, the plaintiff's original subcontract price of $505,000 was calculated from the tender documentation (including bill of quantities and structural drawings) received from Universal Constructions. The plaintiff then tendered for the steel fabrication subcontract by way of a quotation dated 16 April 1998 sent not only to Universal Constructions but also to other competitors for the head contract including the defendant.
Soon afterwards, Mr Gismondi was telephoned by the defendant's contracts administrator, Mr Alan Dodd. It is Mr Gismondi's evidence that Mr Dodd informed him that the plaintiff's price was "basically there" but that there were some deletions from the tender documents which would result in some cost savings. These items were the deletion of stairs 1 and 2 and a reduction in the thickness of steel (from 50mm to 10mm) for the landing and treads on the upper flight of stair 3. Mr Dodd effectively asked Mr Gismondi to prepare a revised quote based upon these deletions.
Arrangements were also made for the two men to meet at the defendant's premises on 11 May 1998. Prior to this meeting Mr Gismondi calculated the effects of the proposed deletions and arrived at a revised price of $480,000. Mr Gismondi told Mr Dodd of this revised price when the two men met on 11 May 1998, and the latter responded to the effect that the decision whether or not to award the subcontract at that figure would have to be made by the defendant's project manager Mr Cheong.
It is Mr Gismondi's evidence that he then accompanied Mr Dodd to a nearby office where he met Mr Cheong. During the conversations that followed there was no further mention of stairs 1 and 2 but Mr Cheong asked Mr Gismondi to make a further reduction from the figure of $480,000 in respect of the change to stair 3. Mr Gismondi declined to make any further reduction, but Mr Cheong nevertheless agreed to accept the proposed subcontract price of $480,000. This acceptance was on the basis that the price was subject to written confirmation once the plaintiff had had opportunity to view the final construction drawings. (In this regard Mr Gismondi's evidence is that the construction drawings for a project of this type sometimes vary from the tender drawings, and he wanted to make sure that the plaintiff would not be obliged to supply "something different".)
Mr Dodd has a substantially different version of events. According to him, after receiving the plaintiff's initial quotation for $505,000 he was telephoned by Mr Steve Gismondi. Mr Dodd told Mr Gismondi that the plaintiff was not the lowest tenderer, and the latter then said that he was willing to "look at his price again". Mr Gismondi also expressed a preference that he "sit down with us for a meeting to discuss the quote rather than resubmit a quote". Mr Dodd's evidence is to the effect that he did not have authority to meet with Mr Gismondi to discuss the plaintiff's quotation and had to consult Mr Cheong before agreeing to do so. Having done this, he telephoned Mr Gismondi and arranged for him to meet with Mr Cheong on 11 May 1998.
As I understand Mr Dodd's evidence at some time after arranging the meeting for 11 May 1998 but before that meeting took place, he had telephone conversations with Mr Gismondi concerning a change in specification for stair 3. This change of specification involved not only a reduction in the thickness of the steel on the treads and landing for the upper flight of stair 3, but also a change of the lower flight from concrete to steel. Mr Dodd had faxed to the plaintiff a copy of these revised details (Exhibits 3, 4 & 5) on 28 April 1998. During the course of the subsequent telephone conversations with Mr Gismondi he asked that the plaintiff agree to reduce its price by $12,000 in respect of these changes but the latter said "that no way could he give us the $12,000" (T 233).
On 11 May 1998 Mr Gismondi "sat with" Mr Dodd while waiting for Mr Cheong, and there was no conversation between them of "any importance". The two men then went into Mr Cheong's office to discuss the proposed subcontract.
According to Mr Dodd, Mr Cheong informed Mr Gismondi that his price was not the lowest and that the defendant would require "some kind of discount" before giving him the subcontract (T 230). Mr Gismondi responded by offering a discount (from the price of $505,000) of $13,000. Mr Dodd then stated that that discount was not enough and that the defendant still required the further saving of $12,000 in respect of stair 3. According to Mr Dodd, Mr Gismondi then said "if it means me getting the contract, I'll give you the $12,000" (T 230). Following this concession Mr Cheong advised Mr Gismondi that the plaintiff had the subcontract, the three men all shook hands and the meeting ended.
It is Mr Dodd's evidence that at the time of the meeting on 11 May he was unaware of any change in the specifications for stairs 1 and 2 from steel to concrete, and he certainly had not informed Mr Gismondi to that effect. Accordingly, the subcontract on 11 May 1998 was negotiated on the basis that stairs 1 and 2 were included within the scope of works.
The evidence of both of Messrs Dodd and Cheong is to the effect that prior to the meeting of 11 May 1998 there had been a series of meetings with Cox with a view to bringing about cost savings on the overall project. During the course of these meetings a proposal to change stairs 1 and 2 from steel to concrete had been considered, but rejected as offering no appreciable savings. However, a revision of the details of stair 3 (including a change in the lower flight from concrete to steel) had been agreed upon and had resulted in a need for the defendant to "offer back" to the client a saving of $12,000.
It is Mr Cheong's evidence that he first became aware of the need to offer a saving of $12,000 in respect of stair 3 on the morning of 11 May 1998. During the course of the meeting with Mr Gismondi, Mr Dodd confirmed that that was "the saving that we would require". Mr Cheong does not have a good recollection of the negotiations on 11 May but does remember the discussion about the $12,000 saving in respect of stair 3 and also that the "last agreed figure was $480,000 and that was the agreed final outcome" (T 311).
The only relevant change in the scope of work of which Mr Cheong was aware on 11 May 1998 was the revision in detail of stair 3 (in respect of which he can only recall being aware of the change in thickness of steel for the upper flight). He first became aware of the architect's requirement to change stairs 1 and 2 from steel to concrete some time subsequent to 11 May. According to him if he had been aware of the proposal to delete stairs 1 and 2 from the scope of works it would have had a "huge impact" on his attitude to the negotiations on 11 May 1998.

Other evidence relevant to the scope of works within the subcontract

The design draftsman, Mr Swallow, testified that his subcontract to prepare "shop drawings" was the subject of oral negotiations between the plaintiff and himself prior to 5 June 1998. Mr Swallow initially quoted a price which he believes was either $50,000 or $51,000 but he ultimately agreed to reduce this to $48,000. This reduction was negotiated on the basis of certain deletions including drawings in respect of stairs 1 and 2 (T 146-7). The plaintiff then issued its purchase order to Mr Swallow dated 5 June 1998 (Exhibit "I") confirming the price of $48,000.
On approximately 8 June 1998 Mr Steve Gismondi collected from the defendant's office the bulk of the construction drawings relevant to the steelwork subcontract (which were accompanied by the transmittal notices – Exhibits 6 and 7). Missing from those documents were the construction drawings (numbered S24 and S25) pertinent to stairs 1 and 2. Nevertheless, it was clear from the drawings that were provided that stairs 1 and 2 were required to be in concrete and not steel. It is also Mr Gismondi's evidence that at that time he received a revised bill of quantities with handwritten deletions in respect of stairs 1 and 2 (see Exhibit "B").
On 22 July 1998 Mr Gismondi faxed to the defendant a "revised quote" (Exhibit 25) confirming the subcontract price of $480,000. Attached to that revised quote was a rated bill of quantities (Exhibit 1) specifying the costs applicable to various items in the bill. The content of both the revised quote and the rated bill of quantities confirmed that stairs 1 and 2 were deleted from the subcontract.
On 4 August the defendant forwarded to the plaintiff a purchase order in the sum of $480,000 for the supply and fixing of structural steel (Exhibit 26). That purchase order specifically included the bill of quantities items relevant to stairs 1 and 2 and was thus in conflict with the plaintiff's revised quote. It was consistent with the plaintiff's revised quote to the extent that it excluded the lower flight of stair 3 (which was to be in concrete).
On 8 August 1998 Mr Gismondi responded by facsimile to Mr Dodd requesting him to "extend your order … dated 4.8.98" to exclude the bill of quantities items relevant to stairs 1 and 2 "as per quotation letter dated 22 July 1998 and rated bill of quantities from Italsteel WA" (Exhibit 27). Mr Dodd did not at any time respond to that facsimile, and the reason he has given for this is that he "did not want to start a paper war". Mr Gismondi on the other hand did not pursue the issue further because he believed Mr Dodd must have made an error and that "everything was okay".
A curious feature of the evidence is that at the time of forwarding the purchase order which included stairs 1 and 2 in the steelwork subcontract, Mr Dodd was well aware of the changed instruction from the architect requiring the same to be constructed in concrete. He had become aware of that changed instruction approximately one week after receiving the revised drawings to that effect (viz on approximately 10 June 1998). Mr Dodd's evidence is to the effect that he did not regard this change in instruction as being final, and that he then contacted Cox to clarify whether stairs 1 and 2 were to be in concrete or steel. Ultimately on 22 October 1998 Cox issued a written instruction (Exhibit 37) which reverted to the requirement that stairs 1 and 2 be fabricated in steel.
On 26 October 1998, another employee of the defendant (Martyn Goddard) sent a facsimile to the plaintiff (Exhibit 38) stating:
"Please be advised stair No 1 and 2 are to be steel construction similar to stair 8 as per bill of quantities not drawing."
By letter dated 11 November 1998 the plaintiff responded requesting a variation to the subcontract to enable fabrication of stairs 1 and 2 in steel. This led to an exchange of correspondence between the parties (Exhibits 45 and 47) in which they disputed whether stairs 1 and 2 were included in the original subcontract. The plaintiff nevertheless proceeded to fabricate the stairs on the basis that it would later claim the costs as a variation.
According to Mr Gismondi, the plaintiff agreed to take this step following a conversation between him and Mr Dodd when the latter said "If you do the stairs we will end up looking after you there". Mr Gismondi's evidence is to the effect that in the context of the conversation that was a tacit admission by Mr Dodd that the stairs were not part of the subcontract and that the plaintiff would be entitled to payment for the same. The plaintiff accordingly went ahead and fabricated stairs 1 and 2 as a gesture of "good faith" (T 19-20). The plaintiff also fabricated the lower flight of stair 3 in steel.

Mr C N Kelly was a quantity surveyor with Ralph Beattie Bosworth Pty Ltd at the material time. He has confirmed that at the time of the "cost savings" meetings during early 1998 between Cox, the defendant and other professional consultants, the proposal to change stairs 1 and 2 from steel to concrete was discussed. However, following an analysis this proposal was not considered to provide any significant cost savings, and it "fell flat on its face" (T 326).
Mr M T Batchelor was an architect employed by Cox during the latter stages of the project. By consent he testified as to events in connection with stairs 1 and 2 (which occurred prior to his involvement in the project) by reference to documents on Cox's file. According to Mr Batchelor the relevant sequence of events was as follows. The initial tender drawings required stairs 1 and 2 to be fabricated in steel. On 8 May 1998 Cox issued drawing A41(1) setting out the same stairs in concrete in order to ascertain whether such a change would result in cost savings. The decision to proceed with that change was indicated by the reissue of the same drawing on 3 June 1998 endorsed with the letter "C" (meaning that the drawing was issued for construction purposes). On 15 June 1998 Cox issued a further formal instruction (Exhibit 10) requiring that stairs 1 and 2 be constructed in concrete.
Mr Batchelor became involved in the project on 24 July 1998, and from that time on was the point of contact in respect of any queries or communications from the defendant to Cox. Mr Batchelor does not recall any contact from Mr Dodd seeking clarification as to whether stairs 1 and 2 were to be in steel or concrete. However, there was a site meeting between him, Mr Dodd and Mr Martyn Goddard on 22 October 1998 when it was decided to revert back to the requirement that stairs 1 and 2 be fabricated in steel. This decision was made because Messrs Dodd and Goddard "indicated that it would be cheaper and easier for them to proceed in steel" (T 344-5, 359). Later that day Mr Batchelor issued the revised instruction (Exhibit 37) confirming the change back to steel.
It is also relevant to note Mr Batchelor's evidence that the drawings of stair 3 sent by the defendant to the plaintiff on 28 April 1998 (Exhibits 3, 4 & 5) do not indicate whether the lower flight was to be in steel or concrete.

Findings as to the scope of works in subcontract

The question whether stairs 1 and 2 and the lower flight of stair 3 were included in the steelwork subcontract turns upon the resolution of the conflicting versions of negotiations that have come from Mr Gismondi, Mr Dodd, (and to a lesser extent) Mr Cheong. Obviously that resolution depends upon my findings as to the relative credibility of those witnesses.
I did form some definite impressions as to credibility from the manner in which at least two of those witnesses testified. However, I prefer to resolve the issues (as far as possible) by reference to the logic of the surrounding circumstances.
In this regard, I consider a most significant circumstance is the basis on which Mr Swallow quoted for the shop drawings subcontract which became the subject of the plaintiff's purchase order dated 5 June 1998 (Exhibit "A"). In my view Mr Swallow was a patently honest witness, and to the extent that he was uncertain about any particular matter, he specifically said so. I have no hesitation in accepting his evidence that he reduced his initially quoted price from either $50,000 or $51,000 down to $48,000 as a result of the deletion of certain items including stairs 1 and 2.
The negotiation of this reduction in Mr Swallow's quote is entirely consistent with Mr Gismondi's evidence that he had had discussions with Mr Dodd concerning the deletion of stairs 1 and 2. On Mr Dodd's version of events there was no way in which Mr Gismondi could have been aware of the proposal to change stairs `1 and 2 from steel to concrete prior to him collecting the construction drawings from the defendant's office on 8 June 1998.
I also considered Mr Batchelor to be a very credible and independent witness. According to him, the eventual decision (on 22 October 1998) to change stairs 1 and 2 from concrete back to steel came about as a result of representations from the defendant that it would be "cheaper and easier" to do so. This is contrary to Mr Dodd's evidence to the effect that there were no cost savings to the defendant one way or another from this change, and that he merely sought clarification from the architect as to whether the stairs were to be in concrete or steel. The only reasonable inference from Mr Batchelor's evidence is that the defendant for some unknown reason was keen to have the stairs fabricated in steel.
I also consider that there is an inherent improbability in the defendant's version of the negotiations which resulted in the reduction of the subcontract price to $480,000. According to Mr Dodd $12,000 of that reduction represented the "cost saving" that the defendant needed to offer the client in respect of stair 3. However, it is Mr Dodd's evidence that that cost saving had been achieved (inter alia) by changing the lower flight of stair 3 from concrete to steel thus increasing the scope of the steelwork subcontract. In these circumstances it defies logic that Mr Gismondi would have agreed to provide the defendant with a "cost saving" brought about by an increase in the steelwork to be provided. I also consider it inherently unlikely that (on Mr Dodd's version) Mr Gismondi had first offered a discount of $13,000 (which together with the $12,000 made up the total reduction of $25,000). There would not appear to be any logical reason why Mr Gismondi would come up with such a figure.
A further unsatisfactory aspect of Mr Dodd's evidence concerns his failure to respond appropriately to the plaintiff's purchase order (Exhibit 26) and subsequent facsimile dated 8 August 1998 (Exhibit 27). As contracts administrator for the defendant Mr Dodd had a responsibility to ensure that the subcontract documentation was in order. He was well aware that the plaintiff was proceeding on the basis that stairs 1 and 2 were not within the scope of works, yet he deliberately avoided the issue. Furthermore Mr Dodd forwarded the purchase order requiring stairs 1 and 2 to be in steel when he was well aware that Cox at that time required them to be in concrete.
It is also significant that Mr Dodd's evidence that the subcontract price was negotiated (inter alia) on the basis that the lower flight of stair 3 would be in steel, is contradicted by the fact the purchase order excluded that item from the scope of works.
For all these reasons I have come to the conclusion that I should prefer Mr Gismondi's version of the subcontract negotiations. This finding accords with the impressions that I gained of the witnesses while they were testifying. Although Mr Cheong did not impress me one way or the other, I found Mr Dodd at times to be less than convincing. Mr Gismondi on the other hand was unhesitating with his answers, was not shaken in cross‑examination, and appeared to me to be a relatively credible witness.
The evidence from Mr Batchelor clearly establishes that at the time that the parties concluded their subcontract, the head contract required that stairs 1 and 2 be constructed in concrete. The scope of works in the subcontract necessarily had to conform with those in the head contract (if not expressly then certainly by way of an implied term). It follows that irrespective of the uncertainties arising from the "revised quote" (Exhibit 25) and the purchase order (Exhibit 26), stairs 1 and 2 were excluded from the scope of the subcontract works. It is also clear that the lower flight of stair 3 was expressly excluded from the subcontract.
I accordingly find that the fabrication of steel stairs 1 and 2 and of the lower flight of stair 3 by the plaintiff constituted a variation to the subcontract with the defendant. This being so, and given the quantum that has been agreed, the plaintiff is entitled to payment of $30,434 from the defendant in respect of that variation.

Whether the plaintiff is entitled to damages for inadequate drawings

The plaintiff's claim for damages in respect of alleged inadequacies in the architectural and engineering drawings is based upon the existence of an implied term in the subcontract. Paragraph 7 of the statement of claim pleads that implied term to be "that the defendant would provide to the plaintiff accurate and appropriate architectural and engineering drawings and information to enable the plaintiff to prepare workshop drawings for the fabrication of the structural steel".
Before a term can be implied in a contract it must satisfy certain conditions. Those conditions are:
"(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract." (Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 404)
In the present instance the defendant contends (inter alia) that the proposed implied term would contradict an express term of the subcontract.
In this regard it is common ground that the bill of quantities (Exhibit 1) forms part of the subcontract. Item "D" (on pp AG5/1 and NB5/3) of that bill of quantities required the plaintiff to "allow for shop drawings as specified" (emphasis added).
This provision in the bill of quantities necessarily referred to the specifications under the head contract (Exhibit "M"). Clause 4.7 of those specifications required the defendant to "provide the superintendent for his information (either directly or through the subcontractor or supplier concerned) comprehensive installation and shop drawings for matters such as … structural steelwork … ". Clause 4.7 went on to provide:
"We acknowledge that every detail has not been drawn within either the architectural or structural documents and the tenderers are to allow for the costs of the structural steel shop detailer to establish or resolve details in close liaison with the architect and structural engineer. A response from the structural steel Sub‑Contractor 'that they were unaware of the complication of detailing/fabrication required being unexpectedly high even though they viewed the tender documents' shall not be accepted."
Clearly the requirement in the bill of quantities that the plaintiff "allow for shop drawings as specified" imported the above provision into the subcontract. In my view this express term of the subcontract contradicts the proposed implied term and accordingly the plaintiff's claim for damages must fail.
This is so, notwithstanding the evidence from Mr Swallow and others which would suggest that the shop drawing work became more complicated as a result of the project becoming "fast track". It may well be that this event could have justified a claim for a variation to the subcontract. However, such a variation was not claimed, and the case has not been pleaded or argued on this basis.

Whether the subcontract was subject to "remeasure"

Included amongst the defendant's counterclaims is a claim for $32,674.92 being an alleged over measurement in the bill of quantities by 8.31 tons of steel. In its defence to counterclaim the plaintiff denies that the subcontract was subject to re‑measurement, but if it was, contends that there was an under measurement in the bill of quantities by 4.3948 tons of steel equivalent to $16,669.77.
During the course of the trial the parties have revised these figures and now agree that if the subcontract was subject to re‑measurement then the net effect would be an adjustment in the defendant's favour in the sum of $16,332.48.
I have heard expert evidence from a number of witnesses as to the usual practice in the building trade with respect to re‑measurement. However, whether or not the present subcontract was subject to re‑measurement must of course depend upon its particular terms in that regard.
The defendant bases its claim for re‑measurement on the proposition that the subcontract included in its terms the "Section A preliminaries" in the head contract specifications, which in turn make reference to the Australian Standard General Conditions of Contract (AS2124-1992). Clause 4.4 of those general conditions makes the following provision:
"4.4 Errors in Bill of Quantities
If the Bill of Quantities is in error in that it –
(a)contains an incorrect quantity in relation to any item included therein; or
(b)contains an item which should not have been included therein; or
(c)omits an item which should have been included therein; then –
(i)in the case of Clause 4.4(a) where the item is deficient in quantity or in the case of Clause 4.4.(c) – upon application in writing to the Superintendent by the Contractor; and
(ii)in the case of Clause 4.4(a) where the item is excessive in quantity or in the case of Clause 4.4(b) – upon notification in writing to the Contractor by the Superintendent;
the lump sum accepted by the Principal for the execution of the whole of the work to which the Bill of Quantities relates shall except when the value of the error is less than $400, be adjusted by such amount as is required to correct the error. …
The Bill of Quantities shall be deemed to be in error as aforesaid to the extent that the items and quantities included in it differ from those required for the execution of the Works in accordance with the drawings and specifications referred to in the Contract. … ". (emphasis added)
The evidence establishes that there was not at any time a written application by the contractor (viz the defendant), nor a written notification by the superintendent (viz Cox) seeking a re‑measurement of the head contract. The defendant nevertheless contends that it is entitled to a re‑measurement in respect of the subcontract with the plaintiff.
The starting point in resolving this issue is that the claimed entitlement to a re‑measurement can only arise by way of an express or implied term of the subcontract. However, there is no evidence as to an oral term, nor (in my view) any express term in the relevant documentation which has the effect of importing the standard form conditions (AS2124-1992) into the subcontract.
There may well be an implied term which has that general effect but in my view it would not extend to applying cl 4.4 of the standard conditions in such a way as to require a re‑measurement between the parties to the subcontract when there is no equivalent re‑measurement between the parties to the head contract. That in fact would be contrary to the express provisions of cl 4.4 which required a written application and/or notification to pass between the parties to the head contract in order to precipitate such a re‑measurement.
Accordingly, the defendant has failed to establish a contractual basis for the proposed re‑measurement, and its claim in that regard must fail.

Conclusions

Based upon my understanding of the matters which have been agreed between the parties during the course of the trial, the findings that I have made will have the following effect:

Contract price $480,000.00

Variations listed in the Plaintiffs Statement of Claim $ 92,615.17

Total $572,615.17

Less Payments made by Defendant $497,782.86

Balance $ 74,833.31

Less credit due to Defendant $ 3,270.45

Balance $ 71,561.86

Less further credit $ 400.00

Balance $ 71,161.86

Accordingly, and on my understanding of the arithmetic, the plaintiff is entitled to judgment against the defendant in the sum of $71,161.86. I will, however, hear any further submissions that may be forthcoming in this regard.