Metier3 Pty Ltd v Enwerd Pty Ltd (No 3) - [2015] VSC 587

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

No. 06058 of 2013

METIER3 PTY LTD	Plaintiff
v
ENWERD PTY LTD	First Defendant
and
S.H.L NOMINEES (1965) PTY LTD	Second Defendant

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	1-3 JUNE 2015
DATE OF JUDGMENT:	21 OCTOBER 2015
CASE MAY BE CITED AS:	METIER3 PTY LTD v ENWERD PTY LTD & ANOR (No 3)
MEDIUM NEUTRAL CITATION:	[2015] VSC 587

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BUILDING CONTRACTS – Entitlement to final payment following issue of certificate of Practical Completion - Validity of certificate of Practical Completion issued under Deed of Settlement – Decision made by Principals not to set aside Certificate of Practical Completion – Whether an election between inconsistent rights – Whether gives rise to an estoppel – Construction of Deed of Settlement and related documents as commercial contracts.

CONTRACT – Construction of a commercial settlement under Deed of Settlement – Final instalment payable on issue of certificate of Practical Completion of building works – Certificate issued, but validity challenged – Whether final instalment payable - Whether an election between inconsistent rights – Whether gives rise to an estoppel – Construction of Deed of Settlement and related documents as commercial contracts.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G Golvan QC	Carrick Gill Smyth
For the Defendants	Mr M Whitten	Arnold Bloch Liebler

HIS HONOUR:

Factual Background and Procedural History

The facts giving rise to the dispute, and the procedural history of this matter, have been set out in this Court’s judgments in Metier3 Pty Ltd v Enwerd Pty Ltd & Anor[1] and Metier3 Pty Ltd v Enwerd Pty Ltd & Anor (No 2).[2] For convenience the facts and procedural history are restated here.
[1][2014] VSC 80.
[2][2014] VSC 138.

The Plaintiff, Metier3 Pty Ltd (the “Architect”) is an architectural firm specialising in the design and redevelopment of commercial buildings. It was appointed as the Design Consultant for the redevelopment (the “Project”) of the St James Building and plaza at 555 and 535 Bourke Street Melbourne (the “St James Building”).

The Architect undertook to perform architectural services in relation to the Project pursuant to an agreement called the “St James Redevelopment Architect Consultant Agreement” (the “Architect Agreement”) entered into between it and the First Defendant, Enwerd Pty Ltd and the Second Defendant, SHL Nominees (1965) Pty Ltd who were the client and the principals under the Architect Agreement (the “Principals”). The Architect Agreement is undated, but was entered into between the parties in or about January 2010.

The Architect subsequently made claims against the Principals under the Architect Agreement for payment of fees for its services in respect of the period between December 2008 and December 2011.

Deed of Settlement

The calculation of fees over this period was disputed and following extensive negotiations the parties, being the Architect and the Principals, agreed on the final fees payable, recorded in a Deed of Settlement dated 19 November…

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: [2015] VSC 587
Decision Date: 21 OCTOBER 2015

CaseChat Overview and Summary

Metier3 Pty Ltd, the appellant, and Enwerd Pty Ltd, the respondent, were engaged in a legal dispute concerning the final payment due under a building contract. The case was heard in the Supreme Court of Western Australia. The central issue was whether the appellant was entitled to the final payment following the issue of a certificate of Practical Completion by the respondent. This certificate was issued under the terms of a Deed of Settlement which governed the completion of the building works. The appellant argued that the certificate of Practical Completion was invalid and thus the final payment should not be made. The respondent maintained that the certificate was valid and the final payment was due.

The court had to determine the validity of the certificate of Practical Completion and whether the issuance of such a certificate, despite its potential invalidity, constituted an election by the parties that could preclude the appellant from challenging its validity. Additionally, the court needed to decide if this constituted an election between inconsistent rights that would give rise to an estoppel. The construction of the Deed of Settlement and related documents was crucial in interpreting the rights and obligations of the parties, particularly in a commercial context.

The court found that the issuance of the certificate of Practical Completion, despite any potential invalidity, constituted an election by the parties not to set aside the certificate. This election, the court held, was binding and created an estoppel preventing the appellant from challenging the validity of the certificate. The construction of the Deed of Settlement and related documents as commercial contracts supported the conclusion that the final payment was due upon the issuance of the certificate. The court ruled in favour of the respondent, affirming that the final payment was due and payable.

Orders