McDonald Contracting Pty Ltd v Fletcher Construction (Australia) Ltd

[1999] NSWCA 207

CITATION:	McDonald Contracting Pty Ltd v Fletcher Construction (Australia) Ltd [1999] NSWCA 207
FILE NUMBER(S):	CA 40973/98
HEARING DATE(S):	05/05/99
JUDGMENT DATE:	28 June 1999
PARTIES :	McDonald Contracting Pty Ltd v Fletcher Construction (Australia) Ltd
JUDGMENT OF:	Meagher JA at 1; Stein JA at 8; Fitzgerald JA at 9

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	3849/97
LOWER COURT JUDICIAL OFFICER:	Bell DCJ

COUNSEL:	P R Callaghan SC/G J McVay (Appellant) M G Rudge SC/R J Cheney (Respondent)
SOLICITORS:	Colin Biggers & Paisley (Appellant) Phillips Fox (Respondent)
CATCHWORDS:	Leave application; contract ; repudiation; quantity of work performed; estoppel; leave refused
DECISION:	Leave refused

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA40973/98
DC 3849/97

MEAGHER JA
STEIN JA

FITZGERALD JA

Monday, 28 June 1999

McDONALD CONTRACTING PTY LTD v FLETCHER CONSTRUCTION (AUSTRALIA) LTD

JUDGMENT

1   MEAGHER JA: This is an application to appeal from a decision of Bell DCJ on the ground of its inadequacy. 2   The opponent, Fletcher Construction (Australia) Limited hired a company called Foxman Contracting Pty Limited (Foxman) to do certain building work, and the claimant McDonald Contracting Pty Limited was the sub-contractor to do certain shoring work in connection with that contract. By arrangement between the opponent, Foxman and the claimant, it was agreed, because of the (apparently justified) apprehension on the claimant’s part of the impending insolvency of Foxman, that the opponent would pay the claimant direct for all shoring work done by it, at the rate of $280 per square matter, the amount of work done to be certified by Foxman. The date of that arrangement was early August 1994. 3   On his Honour’s findings the arrangement was repudiated by the opponent, and the repudiation was accepted by the claimant, on 15 September 1994. One of the critical issues on the case is whether or not there was in the claimant an unconditional right to payment for 377m2 on the date of termination. If so, the verdict found for the plaintiff is undoubtedly inadequate. 4   The amount involved is comparatively small (approximately$36,000). However, in order to obviate injustice, I should be disposed to grant leave if all that was involved was the crisp determination of a point of law, This was all which was involved, according to the submissions of learner senior counsel for he claimant Mr Callaghan QC. According to him, his Honour calculated the claimant’s entitlement by taking 90% of the original contract price between the opponent and Foxman instead of 90% of the work actually done (as required by the contract between the claimant and the opponent). 5   Certainly the claimant’s main witness testified to the amount of shoring work completed by the date of termination of the contract to be 377m2. And equally certainly there is some documentary evidence which on first sight seems to support this claim, particularly a fax dated 12 September 1994 from the opponent to Foxman. However, his Honour’s attention was drawn to these matters and he was not impressed by them. His judgment demonstrates an inferential rejection of them; and, as Mr Rudge SC. learned senior counsel for the opponent printed out, there was, amongst the interstices of the opponent’s case, evidence to the contrary. 6   Thus, if leave were granted, this Court would be saddled with having to decide such facts, questions of how much shoring was completed by the date of termination of the contract. We have neither the time nor the appetite for such an enterprise. 7   In my view, leave should be refused with costs.
8   STEIN JA: I agree with Meagher JA and Fitzgerald JA. 9   FITZGERALD JA: This is an application for leave to appeal and, if leave is granted, the appeal and cross-appeal relate to a transaction involving the parties and a third company, Foxman Contracting Pty Ltd (“Foxman”), which subsequently became insolvent. 10   The opponent, (“Fletcher”), as project manager, engaged Foxman to carry out building work. The claimant (“McDonald”) was engaged as a contractor to carry out shoring work which was part of that building work. It was agreed that Fletcher would pay McDonald directly for that shoring work, but Fletcher repudiated that obligation on 15 September 1994. It is unclear whether Fletcher accepts that McDonald has carried out shoring work of which Fletcher has had the benefit for which McDonald has not been paid. If so, the reason for Fletcher’s refusal to pay McDonald for that shoring work was treated by both parties as immaterial to the outcome of this proceeding. 11   It was initially expected that there would be 220m2 of shoring work for which McDonald was to be paid $69,000, with provision for extra shoring work to be paid for at a rate of $280/m2. The final quantity of shoring work required was 377m2. 12   Subject to the point involved in Fletcher’s proposed cross-appeal, it is common ground that McDonald is entitled to be paid by Fletcher for shoring work which had been completed (and perhaps accepted by Foxman) but not paid for when Fletcher repudiated its obligation to pay McDonald for shoring work, which was followed closely by McDonald’s acceptance of that repudiation. 13   Extraordinarily, the principle issue between the parties concerns the quantity of shoring work which had then been performed. The confusion is directly attributable to the manner in which the action was conducted in the District Court, and the absence of clear findings by the trial judge either in his original reasons for judgment or following an application to vary his judgment under the slip rule. 14   The nature and extent of the confusion is highlighted when it is noted that the parties are agreed, and the trial judge found, that, at 15 September 1994, McDonald had performed 90% of the shoring work, but they disagree on whether it had performed 90% of the 220m2 for which the price was $69,000 or 90% of 377m2, which, at $280 per square metre, results in an amount of $105,560. 15   The trial judge awarded McDonald $613, which was arrived at by deducting from 90% of $69,000 the payments which McDonald had received by trial for the shoring work which it had completed at 15 September 1994. McDonald claims that it is entitled to $36,772, which is arrived at by deducting from 90% of $105,560 the payments which McDonald had received. Fletcher asserts that McDonald is entitled to nothing, because of a separate legal point which it seeks to raise by its cross-appeal. 16   As Fletcher pointed out, the trial judge inferentially decided that McDonald had only completed 90% of 220m2 of shoring work, for which the agreed price was $69,000, on 15 September 1994. It is also correct that, on a different issue, the trial judge preferred the evidence of Fletcher’s witness, Mr Gilvarry, to the evidence of McDonald’s witness, Mr McDonald. 17   Mr Gilvarry gave evidence concerning the quantity of shoring work completed by McDonald by 15 September 1994 which is consistent with the trial judge’s conclusion, as are some of the documents. 18   On the other hand, there are documents which support Mr McDonald’s direct and unequivocal evidence that McDonald had completed 90% of 377m2 of shoring work on 15 September 1994. Neither Mr McDonald nor Mr Gilvarry was cross-examined. 19   Further, the trial judge made no reference to the material evidence, including the documentary evidence, and did not even make an express finding on the critical issue. His Honour plainly had a judicial duty to do so. 20   On the other hand, it is, to say the least, questionable whether it was possible for him to resolve the central point in the dispute properly without seeing and hearing the witnesses. 21   However, it seems to be commonplace for parties to litigate disputed factual issues in the District Court in the unsatisfactory manner which was adopted in this case, as is frequently revealed in this Court, especially in personal injury cases in which there are conflicting medical reports. 22   It is not clear that the trial judge’s factual conclusion was wrong. 23   Further, it is not entirely clear that his produces an estoppel which will preclude McDonald from recovering any amount to which it is entitled for shoring which it had completed at 15 September 1994. The trial judge seemed to consider that he was not resolving all issues concerning the amount to which McDonald was entitled from Fletcher for shoring work, referring to some outstanding issues as a “… matter of adjustment, not … assessment …”. However, what was meant is not clear, and there is quite likely an estoppel involved. 24   Nonetheless, the parties chose their forensic tactics, perhaps for perceived advantage. At least, that possibility was not excluded. The amount involved is comparatively small, although no doubt important to the parties. Both this Court and the District Court have finite resources, which are provided at considerable public cost. Litigants awaiting the trial of their disputes in the District Court are plainly delayed by retrials, which should, when possible, be avoided. This Court’s resources should not be unnecessarily devoted to attending to cases such as the present. 25   In my opinion, the circumstances do not justify a grant of leave to appeal. 26   That being so, Fletcher’s cross-appeal does not arise for consideration. 27   I would refuse the application for leave to appeal, with costs.