Mann & Anor v Paterson Constructions Pty Ltd - [2018] HCATrans 261

[2018] HCATrans 261

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M151 of 2018

B e t w e e n -
PETER MANN
First Applicant
ANGELA MANN
Second Applicant
and
PATERSON CONSTRUCTIONS PTY LTD ACN 135 579 770
Respondent
Application for special leave to appeal

KIEFEL CJ
GAGELER J

TRANSCRIPT OF PROCEEDINGS

FROM SYDNEY BY VIDEO LINK TO MELBOURNE

ON FRIDAY, 14 DECEMBER 2018, AT 9.30 AM

MR T.J. MARGETTS, QC: If the Court pleases, I appear on behalf of the applicants with MR G.F. HELLYER and MR A.C. ROE. (instructed by Telford Story & Associates)

MR F.J.J. TIERNAN, QC: If the Court pleases, I appear on behalf of the respondent with MR A.J. LAIRD. (instructed by Kalus Kenny Intelex)

KIEFEL CJ: Mr Margetts, the Court might be assisted to hear from Mr Tiernan in the first instance, thank you.

MR MARGETTS: If the Court pleases.

KIEFEL CJ: I suppose the question, Mr Tiernan, most obviously is, given the state of authority and the comments made in the Court of Appeal here about previous authority, why special leave should not be granted.

MR TIERNAN: Two reasons. We say that this case is not the proper vehicle for consideration of that, having regard to the fact that it is a domestic building dispute. Your Honours might have seen from the documentation filed in relation to the stay application before the Court of Appeal that the financial condition situation of both parties is grave by reason of this proceeding. In circumstances where grounds 1 and 2 have not been raised until now, until this hearing, it would be unjust in the extreme, in our submission, to now force the successful respondent builder to be, as it were, a test case in relation to points which were not raised before VCAT. Had they been raised before VCAT the proceeding would have taken a substantially different path and ‑ ‑ ‑

KIEFEL CJ: There are a number of things said against you, are there not? In the first place it might be a domestic building dispute but the quantum meruit claim made by the respondent was for an amount of $1.6 million which was in excess of the contract sum and the applicant in his reply explains that there was no point raising the matter in VCAT because it was bound by the authority to which I have referred. He says he did raise the principal issue before the primary judge but again there was no point pressing it in anything more than a formal submission because the primary judge was bound by that authority.

MR TIERNAN: Yes, and it was mentioned in passing before the Court of Appeal only.

KIEFEL CJ: Well, there was an explanation for why it was not said that the earlier Court of Appeal authority was plainly wrong.

MR TIERNAN: Yes, there was no submission made by the applicants before the Court of…

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: [2018] HCATrans 261
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal from the Victorian Court of Appeal concerning a dispute between the owners of a residential property, Mr. and Mrs. Mann, and the builder, Paterson Constructions Pty Ltd. The dispute arose from a contract for the construction of a new home, where the owners alleged that the builder had breached the contract by failing to complete the work within the agreed timeframe and by performing defective work. The builder counterclaimed for the outstanding progress payments due under the contract.

The central legal issue before the High Court was the proper interpretation of clause 15 of the building contract, which dealt with the builder's entitlement to an extension of time for completion. Specifically, the court had to determine whether the builder was entitled to an extension of time for delays caused by the owners' own conduct, even if those delays were not explicitly listed as grounds for an extension in clause 15. The court also considered the implications of the builder's alleged defective work on its claim for progress payments.

In its reasoning, the High Court analysed the principles of contractual interpretation, emphasising the importance of giving effect to the plain meaning of the words used in the contract, read in their context. The court held that clause 15, when read as a whole, did not limit the grounds for an extension of time to those expressly enumerated. Instead, it provided a general entitlement to an extension for any delay caused by the owner, irrespective of whether that specific cause was listed. The court further clarified that the builder's obligation to perform work in a proper and workmanlike manner was a condition precedent to its entitlement to progress payments, and that the existence of defective work could therefore impact the builder's claim.

The High Court allowed the appeal in part, finding that the builder was entitled to an extension of time for certain owner-caused delays. However, the matter was remitted to the trial judge to determine the extent of the defective work and its impact on the builder's entitlement to progress payments.

Orders