Mossop Group Pty Ltd v Contek Pty Ltd

[2025] SASCA 101

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: Civil)

MOSSOP GROUP PTY LTD v CONTEK PTY LTD

[2025] SASCA 101

Judgment of the Court of Appeal  (ex tempore)

(The Honourable President Livesey, the Honourable Justice S Doyle and the Honourable Auxiliary Justice Mullins)

9 September 2025

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES

CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - THE CONTRACT - CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS - VARIATIONS

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS

The respondent (Contek) issued proceedings against the appellant (Mossop) for payments due under various of the invoices it had issued to Mossop for its concreting work on two building projects, including for variations to the contractual works. Mossop denied the claimed variations and counterclaimed for various ‘back charges’.

A number of the claims made by the parties were resolved during the course of the proceedings, and the judge determined the 13 claims ultimately in dispute in the amount of $58,685.84 in favour of Contek. The judge later published further reasons and entered judgment, including orders that Mossop pay Contek $194,605.65 and that Mossop pay 75 per cent of Contek’s costs of action.

Mossop appeals on several grounds. Grounds 1 and 2 involve a complaint that the judge erred in entering judgment in an amount which went beyond the resolution of the 13 claims addressed at trial. Grounds 3 and 4 challenge the judge’s approach to the issue of costs, and Grounds 5 and 6 concern the judge’s approach to Contek's failure to provide notice of some variations. 

Held, per the Court, refusing leave to appeal on Ground 4, and dismissing the appeal:

1.The judge did not err in entering judgment inclusive of all unpaid amounts pleaded and claimed by Contek.

2.Consequently, costs were awarded on the correct basis that the judgment sum reflected the whole of the disputed amounts pleaded and claimed by Contek.

3.No error has been established in the judge’s conclusion that Mossop did not properly plead or pursue its claim that certain of the variations were not properly notified.

Supreme Court Act 1935 (SA) s 27; District Court Act 1991 (SA) s 8(1), referred to.
Contek Pty Ltd v Mossop Group Pty Ltd [2024] SADC 1; Contek Pty Ltd v Mossop Group Pty Ltd [2024] SADC 163, considered.

MOSSOP GROUP PTY LTD v CONTEK PTY LTD
[2025] SASCA 101

Court of Appeal – Civil:  Livesey P, S Doyle JA and Mullins AJA

1. THE COURT (ex tempore):     The appellant (‘Mossop’) was the builder in two construction projects.  The first related to an aged care facility in Joslin, known as the Lifecare Roselin Court Stage 1 project (‘the Lifecare project’), and the second related to an Aldi Supermarket in Berri (‘the Aldi project’).

2. The respondent (‘Contek’) specialises in concreting and was a subcontractor for the Lifecare and Aldi projects.

3. Contek brought proceedings against Mossop for payments due under various invoices it had issued across the two projects, including for variations to the contractual works.  Mossop denied the claimed variations and counterclaimed for various ‘back charges’ (being amounts for work that Mossop had undertaken, but which was within Contek’s scope of works).

4. Although the dispute had been broader when proceedings were issued, there were only 13 claims in dispute by the time of trial. The trial, which lasted nine days, focussed upon these claims. The trial judge published lengthy reasons for judgment on 15 January 2024 (‘the January 2024 reasons’),[1] which concluded with a table setting out the disputed and determined amounts for each of these claims.  The net result in favour of Contek was $58,685.84 (exclusive of GST).

   [1]     Contek Pty Ltd v Mossop Group Pty Ltd [2024] SADC 1.

5. Whilst making some orders reflecting the outcome in relation to the 13 claims determined at trial, the judge indicated that she would hear further from the parties in relation to the terms of the ultimate judgment, and the issues of pre-judgment interest and costs.

6. After further oral and written submissions, the judge published further reasons on 13 December 2024 (‘the December 2024 reasons’).[2]  Her Honour then entered judgment, which included orders to the effect:

   ·that Mossop pay Contek $194,605.65 (comprising a judgment sum of $148,677.49 (inclusive of GST) plus pre-judgment interest of $45,928.16);

   ·that Mossop pay 75 per cent of Contek’s costs of action (on the standard basis until 16 July 2021 and thereafter on an indemnity basis); and

   ·that the monies paid into Court by Mossop be paid to Contek in partial satisfaction of the judgment sum.

   [2]     Contek Pty Ltd v Mossop Group Pty Ltd [2024] SADC 163.

7. Mossop has appealed from this judgment on several grounds.  Grounds 1 and 2 involve a complaint that the judge erred in entering judgment in an amount which reflected the broader dispute between the parties, rather than being confined to her Honour’s resolution of the 13 claims addressed at trial.  Grounds 3 and 4 involve a consequential or related challenge to the judge’s approach to the issue of costs.  The balance of the grounds involve complaints about the judge’s treatment of some of the individual claims, including a complaint that the judge ought to have refused some claims for variations on the basis they were not properly notified.

8. For the reasons which follow, the appeal should be dismissed.

   Background

9. Given the limited nature of the issues in dispute on appeal, it is not necessary to summarise much of the detail addressed by the trial judge in her January and December 2024 reasons.

10. Contek issued these proceedings in June 2018.  Contek’s statement of claim sought relief which included payment of a large number of unpaid invoices.  As initially formulated, the claim was confined to the Lifecare project and claimed a total of approximately $197,000.  The claim identified 30 different invoices in respect of which amounts were said to be payable, including a number which related to variations.  By the time of its third statement of claim, dated March 2022, Contek relied upon 25 unpaid invoices in respect of the Lifecare project, 16 of which related to variations; and five unpaid invoices in respect of the Aldi project, three of which related to variations.  The total amounts sought in respect of these invoices were approximately $165,000 for the Lifecare project, and approximately $40,000 for the Aldi project.

11. In its defence and cross-claim, Mossop denied any obligation to pay most of the unpaid sums claimed by Contek, and alleged an entitlement to various amounts by way of back charges.  Mossop acknowledged that when certain retention monies became payable, and after allowance for about $18,000 for the back charges it claimed, it would owe Contek a net amount of about $9,000. 

12. By the time of its amended pleading in May 2020, Mossop had reassessed the claimed variations and back charges and formally admitted that it owed Contek $30,767.84 (inclusive of GST).  In April 2021, Mossop paid this amount into Court.  However, it did not agree to pay that amount over to Contek.  It maintained its denial of any further contractual liability to Contek and its denial that it would ultimately owe anything to Contek.

13. Throughout the course of the interlocutory stages of these proceedings, and indeed during the trial itself, the parties agreed various of the amounts initially in dispute.  As mentioned, by the end of the trial, only 13 claims remained in issue.[3]  Having identified these disputed claims earlier in her reasons,[4] the judge included the following table at the conclusion of her reasons, setting out both the disputed and determined figures of each these claims:[5]

    [3]     Noting that there was ultimately agreement in relation to item B3.1, leaving only 12 claims in dispute.

    [4]     See Tables 1 and 2 in the January 2024 reasons at [9], [14].

    [5] The January 2024 reasons at [574].

    Table 12

No.	Description	Disputed Value ex GST	Determined Value ex GST
LifeCare Project
V2	Extra Concrete – Ground Floor	$31,240.96	$26,028.77
V6	Extra Concrete – First Floor	$13,722.65	$6,377.06
V7	Extra Steel – First Floor	$13,503.83	$13,503.83
V8	Extra Concrete – Second Floor	$13,044.77	$8,249.35
V9	Extra Steel – Second Floor	$13,503.83	$13,503.83
B5	Patch & Caulk – Balcony Works	-$10,990.90	-$4,500.00
B10	TC Formwork to Beam Above Ramp	-$3,837.00	Nil
B11	Basement Repairs	-$4,359.50	-$4,359.50
B13	Partial Rectification to Basement Works	-$12,000.00	-$10,000.00
Total	$53,828.64	$48,803.34
Aldi Project
B1.0	Cancelled Concrete Pour	$4,516.55	Nil
B2.0	Extra Cast-in Angles & Slab Redesign	$5,760.00	$5,690.00
B3.1	Pylon Sign Pad Footing	$4,192.50	$4,192.50
B1	Absence from Site	-$9,626.36	Nil
Total	$4,842.69	$9,882.50

1. Although the judge made orders on the day she published her January 2024 reasons reflecting the dollar sums in the above table, her Honour plainly anticipated that there would be further submissions before determining the form of the ultimate judgment.  This was apparent from the concluding paragraphs from her Honour’s reasons:[6]

   For neither the Lifecare nor Aldi subcontracts is the resulting judgment sum simply the product of the value of the discrete variation and back charge claims determined by the Court.  There are undisputed unpaid invoiced amounts that need to be taken into account.  Some are due to Mossop withholding payment of invoiced amounts due on account of its back charge claims and others are for concessions made during the course of the proceedings as to certain other amounts in dispute.  To complicate matters further, amounts were paid into Court by Mossop.

   As stated above, the parties have not reached final agreement on the impact of their differing positions as to the disputed variation and back charge claims on the adjusted subcontract sums net of payments made by Mossop (either to Contek or into Court) under either the Lifecare or Aldi subcontracts.

   Whilst there is much common ground, the Court will hear the parties on any remaining dispute as to the net amount due under each of the Lifecare and Aldi subcontracts and interest once the parties have had a proper opportunity to consider the Court’s determination of the disputed (Contek) variation and (Mossop) back charge claims set out in [Table 12].

   [6]     The January 2024 reasons at [572]-[574].

2. After receiving written and oral submissions in relation to the agreed amounts that remained unpaid, and on the issues of pre-judgment interest and costs, the judge published her December 2024 reasons, addressing the form and terms of the final judgment, pre-judgment interest and costs.

3. In her December 2024 reasons, the judge noted the parties’ competing submissions, with Contek contending that judgment should be entered in terms that reflected the entire unpaid sum under the two contracts (that is, the undisputed sum and the disputed (but now determined) sum), and Mossop contending that the judgment should be confined to the sums found owing in relation to the disputed claims listed in Table 12.

4. The judge rejected Mossop’s submissions in this respect as unprincipled.[7] Her Honour explained that there had always been a contest about payment of the undisputed amounts.  They had not been paid because Mossop had consistently claimed its back charges exceeded the amount it would owe.  Her Honour noted that even though Mossop had acknowledged an obligation to pay $30,767.84, it had paid this sum into Court rather than pay it over to Contek.[8]

   [7] The December 2024 reasons at [28].

   [8] The December 2024 reasons at [29].

5. The judge noted the Court’s statutory powers to grant remedies intended to resolve all disputes between the parties, and the public interest in attempting to do so.[9] Whilst also noting the importance of procedural fairness, the judge explained that the parties had had ample opportunity since the trial to address the overall sum owed but unpaid under the contracts for the two projects.[10]  In any event, as the judge explained, Contek was not seeking relief which went beyond the matters it had pleaded:[11]

   A further consideration is that this is not a case whereby the successful party seeks relief for unpleaded matters.  The issue of the unpaid outstanding sums due and payable under both subcontracts was plainly before the Court at trial.  It was part of Contek’s pleaded case to which Mossop joined issue in its defence and counterclaim from the outset.  Evidence was adduced as to both the disputed and undisputed components of the adjusted contract sum under both subcontracts, presenting their differing positions on the disputed variation and back charge claims.

   Accordingly, as a matter of principle and in the interests of finality in litigation, Contek is entitled to have judgment entered for the total unpaid contract sums for both projects.

   [9] The December 2024 reasons at [30], referring to s 27 of the Supreme Court Act 1935 (SA), and s 8(1) of the District Court Act 1991 (SA).

   [10] The December 2024 reasons at [31].

   [11]   The December 2024 reasons at [32]-[33].

6. The judge then undertook a calculation which involved starting with the undisputed original contract sums, adjusting these figures by the values for the undisputed variations and the values determined by the judge for the disputed variations and back charges. This resulted in a judgment sum of $148,677.49 (inclusive of GST),[12] to which the judge added a sum of $45,928.16 for pre-judgment interest, giving a total sum of $194.605.65.[13]

   [12]   The December 2024 reasons at [34]-[43].

   [13] The December 2024 reasons at [152].

7. The judge then turned to the issue of costs.  After summarising a number of relevant considerations, her Honour concluded that Contek was the successful party, but that its recovery of its costs of the action should be reduced by 25 per cent to reflect the measure of success enjoyed by Mossop on some issues:[14]

   Overall, Contek was a successful applicant and costs should follow the event of its variation claims.  Mossop was also a successful cross-claimant but, to a lesser extent and on claims of less value and complexity.  Of the discrete claims ultimately determined by the Court, Context succeeded on 10 of the 13 claims in dispute and was successful overall in value.  By comparison, where it succeeded, Mossop had a not immaterial measure of success.  It successfully challenged some 30% of the value of the extra concrete claims, Contek’s cancelled concrete pour variation claim and succeeded on three of its five back charge claims for almost 50% of the claimed (albeit lesser) value.

   Whilst Contek should be regarded overall as a successful applicant and entitled to a substantial award for the costs of the action, some reduction should be made on account of the measure of Mossop’s success on discrete issues.

   Having regard to the proportion of time spent addressing the disputed items where Mossop succeeded, applying a broad axe, Contek’s costs of action should be reduced by 25%.

   [14]   The December 2024 reasons at [177]-[179].

8. Contek sought its costs on an indemnity basis, relying upon various pre-trial offers which it had made.  The judge did not consider that Contek’s pre-action or informal offers provided a basis for a non-standard costs order.  However, the judge noted that Contek had achieved a more favourable outcome than its June 2021 formal offer to accept $100,000, plus interest of $15,000 and costs of $30,000.  The judge accepted that Mossop’s refusal to accept this offer[15] was imprudent and unreasonable, and held that Mossop should pay 75 per cent of Contek’s costs from 16 July 2021 on an indemnity basis.[16]  The judge did not regard Mossop’s payment into Court as affecting the exercise of her discretion as to costs.

   [15]   Mossop made a formal offer in response, being an offer to pay $38,000 with no order as to costs.

   [16]   The December 2024 reasons at [195]-[206].

9. The judge then made orders to the effect set out at the commencement of these reasons.  These orders were made in substitution for those that had been made back in January 2024.

   Grounds 1 & 2: the judgment sum

10. Grounds 1 and 2 involve a complaint that the judge erred in entering judgment in an amount which reflected the broader dispute between the parties, rather than being confined to her Honour’s resolution of the 13 claims addressed at trial. 

11. The appellant’s complaints are misconceived.  For the reasons explained by the judge, she was correct to enter judgment in terms that addressed the entire amount unpaid under the two contracts.  Whilst described as comprised of undisputed and disputed components, both components reflected amounts which were in dispute at the commencement of the proceedings and remained unpaid at the end of the proceedings.  Contek pleaded a claim for, and was entitled to, recovery of this combined sum.

12. The fact that the undisputed portions of the unpaid amounts were agreed during the course of the proceedings did not mean that Contek was not entitled to a judgment in terms that reflected these amounts, particularly in circumstances where they remained unpaid.  Her Honour’s approach in this respect was entirely orthodox.

13. Whilst interim judgments for lesser amounts were entered in January 2024, these were unorthodox and unnecessary, but did not detract from what was necessary and appropriate by way of final judgment.  There was no procedural unfairness given the opportunity to argue the issue after the January 2024 reasons.  This is not a case where undisputed amounts were paid, and where any final judgment need not include those amounts because a final judgment is ordinarily exclusive of amounts paid.

14. The appellant complains that Contek did not plead any claim for an adjusted contract sum.  Whilst not using these words, the plain substance of what Contek sought, and ultimately obtained, was a determination of the amount it was entitled to under the contracts, as adjusted for the variations and any back charges, and which remained unpaid.

15. Having pleaded a claim that related to all unpaid amounts, there was no reason to deny Contek a judgment which reflected this amount.  Whilst the judge made reference to the Court’s statutory powers to grant remedies intended to resolve all disputes between the parties, this is of no consequence in circumstances where the judge did not grant relief which went beyond what was pleaded. 

16. There is no merit in Grounds 1 and 2.

    Grounds 3 & 4: costs

17. Grounds 3 and 4 involve a consequential or related challenge to the judge’s approach to the issue of costs.

18. To the extent that the appellant’s challenge to the judge’s orders was merely consequential upon its challenge to the judgment sum, it obviously fails.  Further, to the extent that the appellant maintained a separate submission to the effect that the judge erred in assessing costs by reference to an unpleaded claim, it also fails.  The judge’s assessment of the parties’ relative measures of success properly reflected both the pleaded issues and the practical reality of the proceedings. 

19. There was no inconsistency or incongruity between the pleaded issues, the formal offer and the judge’s approach to costs.  Both Contek’s pleaded case, and its formal offer, related to the entirety of the unpaid sum under the two contracts.  The judge was right to assess the reasonableness and prudence of Mossop’s conduct by comparing the offer and judgment sum.

1. The appellant has not otherwise identified any error in the judge’s approach to costs.  The matters listed in the particulars to Ground 4 are not matters which provide any obvious basis for impugning the judge’s exercise of her discretion in relation to costs.  Given this lack of obvious merit, in combination with the fact that Ground 4 relates to a matter of costs and does not raise any issue of general principle, we would refused leave to appeal in relation to this ground. 

   Ground 5:  variations not properly notified

2. In Ground 5, the appellant contends that the trial judge erred in failing to reject Contek’s claims for variations on the basis that it had not given notice of those claims as the contract required.

3. The judge addressed this issue in her January 2024 reasons.[17]  As the judge explained, the relevant contractual provisions contemplated claims for variations in two circumstances, as set out in clauses 24.1 and 24.2.  The variations in question were made pursuant to the second of these mechanisms.  Whilst clause 24.2 contemplated notice, the judge did not consider that a failure to provide notice operated to bar Contek’s entitlement to claim a variation.  Notice was not a condition precedent to that entitlement; and failure to give notice did not extinguish that entitlement.[18]  It followed that a failure to provide notice would only sound in damages, and Mossop had not advanced any claim of this type.[19]

   [17]   The January 2024 reasons at [261]-[282].

   [18] The January 2024 reasons at [279].

   [19] The January 2024 reasons at [280].

4. Further, and in any event, the judge did not accept that Mossop was entitled to pursue any case based upon a contractual bar to the claimed variations.  As the judge observed, whilst Mossop’s defence raised an issue relating to notification of Contek’s claimed variations, it did so in only the most general of terms, alleging simply that Contek ‘did not comply with the contract pertaining to the notification of variations’.  The judge concluded that this did not properly raise any alleged contractual bar to the claimed variations, and that Mossop should be held to its pleaded case.[20]  In support of this last conclusion, the judge noted that Mossop had proceeded to assess each of the impugned variations, and to issue adjusted payment schedules.  In those circumstances, the judge accepted Contek’s submission that had an alleged contractual bar been properly raised, Contek could have, indeed would have, pleaded an estoppel or waiver.

   [20] The January 2024 reason at [281].

5. The judge’s reasoning appears sound.  Regardless of whether her interpretation of clause 24.1 is correct, and hence even if that clause were to be construed as giving rise to a contractual bar to variations, no basis has been identified for impugning her Honour’s conclusion that this was not a matter properly raised in the proceedings; and were Mossop to be permitted to rely upon it, Contek would suffer prejudice in that it would have been deprived of the opportunity to pursue a case of estoppel or waiver.

6. Further, and in any event, insofar as the appellant relies upon clause 24.12, it is not clear to this Court that the superintendent did make a determination of the type contemplated by that clause, or indeed that this would have avoided scrutiny of whether the assessed amount was fair and reasonable for the purposes of clause 24.11.  As outlined in Mr Adams’ oral submissions, these are matters that Contek may have sought to address had the matter been properly pleaded and pursued at trial.

   Ground 6: variations for additional concrete

7. Ground 6 raises a complaint in relation to the trial judge’s approach to three claimed variations for the provision of additional concrete.  The judge explained, and the appellant appears to accept, that the primary issue in respect of these variations involved a determination of how much of the additional concrete was additional to the contractual scope and hence properly the subject of a variation.[21]

   [21] The January 2024 reason at [85].

8. In determining this issue, the judge calculated the required amounts of concrete by reference to certain delivery dockets, less a fair and reasonable allowance for the volume of standard concrete measured by the contract drawings.[22]

   [22]   The January 2024 reason at [330]-[331].

9. The appellant complains that this approach, which did not reflect any particular contractual provisions or terms, involved the judge allowing a quantum meruit for the concrete delivered.  The appellant also complained that because Contek had not provided proper notice of these claimed variations, it was denied the opportunity of determining a fair value for the additional concrete.

10. The appellant has not properly identified or articulated any basis for challenging the judge’s assessment of the additional concrete that fell outside the scope of the contractual works.  Its submissions are little more than assertion.  To the extent that they include a complaint about inadequate notice of the claimed variations, this is a matter addressed and rejected in the context of Ground 5.

11. Grounds 7 and 8 were abandoned in submissions, and so do not need to be addressed.

    Conclusion

12. For the reasons set out, we refuse leave to appeal in relation to Ground 4, and otherwise dismiss the appeal.  The appellant is to pay the respondent’s costs of the appeal on a standard basis.