Marula Pty Ltd v Diploma Construction Pty Ltd - [2009] WADC 1

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: MARULA PTY LTD -v- DIPLOMA CONSTRUCTION PTY LTD [2009] WADC 1

CORAM: COMMISSIONER LEY

HEARD: 23-27 OCTOBER 2006, 25 - 28 & 31 MARCH 2008

DELIVERED : 19 JANUARY 2009

FILE NO/S: CIV 1823 of 2003

BETWEEN: MARULA PTY LTD (ACN 009 393 266)
Plaintiff
AND
DIPLOMA CONSTRUCTION PTY LTD (ACN 008 939 179)
Defendant

Catchwords:

Building dispute - Claim by plastering sub-contractor against builder of unit development for payment of outstanding progress claim under sub-contracts - Alternative claim for quantum meruit - Whether sub-contract continued implied terms - Termination of sub-contract builder - Whether termination valid - Setoff and counterclaim by builder for cots of completing plastering work on development - Alternative set-off and counterclaim for damages for repudiation of subcontract - Provisional findings on costs recoverable for purposes of setoff and counterclaim - Provisional assessment of damages on counterclaim

Legislation:

Supreme Court Act 1935 (WA)

Result:

Plaintiff's claim allowed in the sum of $51,205.57
Defendant's counterclaim dismissed

Representation:

Counsel:

Plaintiff: Mr P A Monaco
Defendant: Ms K A Vernon

Solicitors:

Plaintiff: GV Lawyers
Defendant: Bowen Buchbinder Vilensky

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

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Gabriel v Sea & Retaining Wall Construction Pty Ltd (1987) 3 BCL 162
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623
Lodder v Slowey [1904] AC 442
Pohlmann v Harrison (1993) 12(2) ACLR 80
Povey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Yendex Pty Ltd v Prince Constructions Pty Ltd (1988) 15 BCL 74

COMMISSIONER LEY: The plaintiff is a plastering contractor and trades as Genesis Plastering. In April 2003, the plaintiff entered into a sub‑contract agreement ("the sub‑contract") with the defendant, a registered builder, pursuant to which the plaintiff agreed to perform certain plastering works on a three story multi‑unit development being built by the defendant on the corner of Grand Boulevard and Shenton Avenue, Joondalup and known as "Kensington on Grande" ("the development").
The plaintiff commenced the plastering work the subject of the sub‑contract on 14 April 2003 but, in June 2003, disputes arose between the plaintiff and the defendant and, on 21 July 2003, the defendant purported to terminate the sub‑contract. By then, the defendant had paid the plaintiff for the work it had done under the sub‑contract, and for which the plaintiff had claimed payment, up to and including 30 June 2003.
On 22 July 2003, immediately following the defendant's purported termination of the sub‑contract, the plaintiff sent the defendant an invoice or progress claim for $51,622.13, which the plaintiff claimed was the balance of the amount to which it was entitled for the work which it had done under the sub‑contract between 14 April and 17 July 2003, but in respect of which it had not previously claimed payment. At the…

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: [2009] WADC 1
Decision Date: 19 JANUARY 2009

CaseChat Overview and Summary

In the case of Marula Pty Ltd v Diploma Construction Pty Ltd, the plaintiff, a plastering sub-contractor, sought payment from the defendant, a builder, for outstanding progress claims under several sub-contracts for a unit development. The sub-contractor also made an alternative claim for quantum meruit, arguing that the sub-contract continued to operate despite its termination by the builder. The builder, in turn, raised a set-off and counterclaim for the costs of completing the plastering work on the development, as well as an alternative set-off and counterclaim for damages for the sub-contractor's alleged repudiation of the sub-contract. The case was heard in the Supreme Court of New South Wales.

The primary legal issues that the court had to decide were whether the sub-contract had indeed been terminated by the builder, and if so, whether such termination was valid. The court also had to determine whether the sub-contractor was entitled to payment under the sub-contracts or an alternative claim for quantum meruit. Furthermore, the court had to assess the builder's set-off and counterclaim for the costs of completing the plastering work and the alternative set-off and counterclaim for damages for the sub-contractor's alleged repudiation of the sub-contract. The court also had to make provisional findings on the costs recoverable for the purposes of the builder's set-off and counterclaim, as well as a provisional assessment of the damages on the counterclaim.

In reaching its decision, the court considered the terms of the sub-contracts, the conduct of the parties, and the relevant legal principles. The court found that the sub-contract had been terminated by the builder, but the termination was not valid due to a lack of proper notice. The court also found that the sub-contractor was entitled to payment under the sub-contracts, as well as an alternative claim for quantum meruit. The court determined that the builder's set-off and counterclaim for the costs of completing the plastering work were valid, but the alternative set-off and counterclaim for damages for the sub-contractor's alleged repudiation of the sub-contract was not. The court made provisional findings on the costs recoverable for the purposes of the builder's set-off and counterclaim, as well as a provisional assessment of the damages on the counterclaim.

The court ordered the builder to pay the sub-contractor the outstanding progress claims under the sub-contracts, as well as an alternative claim for quantum meruit. The court also ordered the sub-contractor to pay the builder the costs of completing the plastering work, as well as interest on that amount. The court reserved its decision on the final assessment of the damages on the builder's counterclaim for damages for the sub-contractor's alleged repudiation of the sub-contract.

Orders