Nasso v Fury - [2020] WADC 61

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   NASSO -v- FURY [2020] WADC 61
CORAM:   HERRON DCJ
HEARD:   4-8 FEBRUARY, 19 MARCH, 1-3 JULY & 4-8 NOVEMBER 2019
DELIVERED          :   8 MAY 2020
FILE NO/S:   CIV 2830 of 2016
BETWEEN:   STEPHEN NASSO
Plaintiff
AND
SCOTT FURY
Defendant
SCOTT FURY t/as FURY CUSTOM BOATS
Plaintiff by counterclaim
AND
STEPHEN NASSO
Defendant by counterclaim

Catchwords:

Contract to construct vessel - Whether contract an entire or separable contract - Repudiation - Termination of contract - Vessel not delivered - Interim payments made towards construction of vessel - Damages - Restitution

Legislation:

Nil

Result:

Restitution to plaintiff of monies paid of $115,400

Representation:

Counsel:

Plaintiff	:	Mr D J Morris
Defendant	:	Ms L B Black & Mr P Hopwood
Plaintiff by counterclaim	:	Mr D J Morris
Defendant by counterclaim	:	Ms L B Black & Mr P Hopwood

Solicitors:

Plaintiff	:	HHG Legal Group
Defendant	:	Clyde & Co Australia
Plaintiff by counterclaim	:	Clyde & Co Australia
Defendant by counterclaim	:	HHG Legal Group

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

Baltic Shipping Company v Dillon (1993) 176 CLR 344
Bellgrove v Eldridge (1954) 90 CLR 613
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] 2 All ER 122
Hancock Prospecting v Wright Prospecting (2012) 45 WAR 29
Hyundai Heavy Industries Co Limited v Papadopoulos [1980] 1 WLR 1129, [1980] 2 All VR 29
Hyundai Heavy Industries Co Ltd v Papadopoulos [1979] 1 Lloyd's Rep 130
Mann v Paterson Constructions Pty Ltd [2019] HCA 32
Nurkic v J-Corp Pty Ltd [2008] WADC 159
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Progressive Mailing House v Tabali Pty Ltd (1985) 157 CLR 17
Shevill v Builders Licencing Board (1982) 149 CLR 620
Stocznia Gdanska SA v Latvian Shipping Co [1988] 1 All ER 883
Stocznia Gdanska SA v Latvian shipping Co [1998] 1 WLR 574
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Table of Contents

Introduction

Background

The pleadings

Statement of claim

Terms of the agreement

Defence

Counterclaim

The issues to be determined

Witness statements

The evidence

Stephen Robert James Nasso

Credibility

Mr Nasso's background

Scott Andrew Fury

Credibility

Mr Fury's background

Initial meeting - approximately October 2013

Mr Fury prepares drawings and sends to Mr Nasso - 9 December 2013 - 19 December 2013

Mr Fury contacts Mr Nasso - 6 April 2014

Mr Nasso contacts Mr Fury - 21 August 2014

September 2014

6 September 2014 - contract entered into

Findings – terms of contract

Do the drawings form a part of the contract?

What work did Mr Fury perform pursuant to the contract?

11 September 2014 to February 2015

Meetings between the parties - early 2015 - April 2015 - Mr Nasso's evidence

Mr Fury sends to Mr Nasso further photographs of the plug he was building – March 2015

Meeting - 17 April 2015

Further meeting – 20 April 2015

Email correspondence - April 2015

April/May 2015 meetings - Mr Fury's evidence

Cross-examination of Mr Fury about April 2015 meetings

Post-April 2015 meetings

1 October 2015

November - December 2015

February 2016

Mr Nasso's evidence

Meeting at Mr Fury's workshop – 14 April 2016

The alleged repudiation by Mr Fury

Findings – Did Mr Nasso repudiate the contract?

Did Mr Nasso repudiate the contract in or about April 2015?

Did Mr Nasso repudiate the contract in November 2015?

Did Mr Nasso repudiate the contract in February 2016?

Was there an implied agreed variation to the contract by which the parties agreed Mr Fury was entitled to claim increased building costs?

Did Mr Fury, by his conduct in a meeting between the parties on or about 14 April 2016 and by his email of 16 May 2016, repudiate the contract and did Mr Nasso accept the repudiation and terminate the contract?

Damages

Restitution

Whether the contract was an entire contract or was it severable

Principles of the proper construction of terms of a contract

Difference between construction works on land and of a physical object relevant to whether the contract is entire or severable

Interest

Mr Fury's counterclaim

Annexures

HERRON DCJ:

Introduction

On 6 September 2014 the parties entered into an agreement by which the defendant, Mr Scott Fury, agreed to design and build a dual console fishing boat for the plaintiff, Mr Stephen Nasso, for $275,400 inclusive of GST, to be paid in instalments. In accordance with the agreement:
1.Mr Fury arranged for designs and drawings for the boat to be prepared and commenced construction of the boat.
2.Mr Nasso, in three separate instalments, paid Mr Fury $115,400.
During the course of the boat construction disagreements arose between the parties regarding the design and specifications of the boat Mr Nasso says he wanted Mr Fury to build for him in accordance with the agreement reached between the parties. During April 2015 the disagreements escalated. Mr Nasso believed Mr Fury was not building the boat in accordance with what he believed were the agreed drawings and specifications and believed Mr Fury was building a boat to suit his own purposes. Mr Fury sought to reassure Mr Nasso that he was building the boat in accordance with the agreement reached between them. There were discussions between them about Mr Fury taking over the building of the boat for his own purposes. From that point in time Mr Fury continued to build a boat. Construction of the boat was completed in early 2016.
Mr Nasso alleges that in April 2016 Mr Fury requested an additional payment from Mr Nasso of $45,000 to build the boat which he agreed to build. Mr Nasso refused to pay the requested sum of $45,000 and demanded Mr Fury build the boat for the sum agreed of $275,400. Shortly afterwards relations between the parties irretrievably broke down.
Although Mr Fury subsequently finished construction of a boat, it was not the boat he agreed to build for Mr Nasso. Mr Nasso is without a boat. Mr Fury has retained the sum of $115,400 paid to him by Mr Nasso.
Mr Nasso says that, by requesting a further payment of $45,000, Mr Fury repudiated the agreement to design, construct and deliver the boat, which repudiation Mr Nasso accepted and in reliance upon the repudiation, terminated the contract. Mr Nasso sues for damages for breach of contract, alternatively, claims restitution in the sum of $115,400 being the monies paid by him to Mr Fury towards design and construction of the boat (which Mr Fury did not complete) which he has not received.
Mr Fury denies that he repudiated the agreement and says that it was Mr Nasso who repudiated the agreement when, in April 2015, Mr Nasso told Mr Fury he no longer wanted to continue to be involved with the construction of the boat and he wanted Mr Fury to take over the project. Mr Fury says that he accepted Mr Nasso's repudiation of the agreement and terminated the agreement and therefore was not contractually bound to finish constructing the boat and deliver it to Mr Nasso. Mr Fury later completed the construction of a boat which he sold to another customer.
Mr Fury says he is entitled to keep the sum of $115,400 paid to him by Mr Nasso because he undertook and completed the work for which the money was paid, that is, he has provided consideration for the payment. The payment was made for design, labour and construction work which Mr Fury had performed when the contract was terminated in April 2015.
For the reasons which follow, I find Mr Fury repudiated the contract on 14 April 2016 when he informed Mr Nasso he required payment of a further sum of $45,000 to build Mr Nasso's vessel, which repudiation was accepted by Mr Nasso who terminated the contract by letter dated 20 June 2016. I also find Mr Nasso has not proved an entitlement to damages for the breach of contract but is entitled to restitution in the sum of $115,400 being the payments made to Mr Fury by Mr Nasso in consideration for Mr Fury designing, building and delivering a vessel to Mr Nasso, which consideration has totally failed.

Background

The defendant, Mr Scott Fury, is by occupation a boat builder trading under the business name Fury Customs Boats. In October 2013 the plaintiff, Mr Stephen Nasso, discussed with Mr Fury about him designing and building a fishing boat for Mr Nasso. Thereafter there were various communications between Mr Nasso and Mr Fury, mainly via email, during which Mr Fury prepared drawings of a boat which he sent to Mr Nasso.
Although there is disagreement between the parties about its terms and the documents which constitute the agreement, the parties agree they entered into a contract on or about 6 September 2014 by which Mr Fury agreed to design and construct a fishing boat for Mr Nasso for $275,400 inclusive of GST. The parties also agree that payment of the purchase price would be in four stages as follows:
(a)an initial non‑refundable deposit of $15,400;
(b)a payment of $100,000 payable at the start of construction of the hull and deck;
(c)payment of a further sum of $100,000 once the hull and deck had been assembled; and
(d)the balance of $60,000 to be paid at handover of the completed boat.
On 11 September 2014 Mr Nasso paid to Mr Fury the sum of $15,400.
Between about 11 September 2014 and 21 April 2015 Mr Fury undertook construction work of the boat including the fabrication of the hull and plug for use in construction of the boat.
On 29 October 2014 Mr Nasso paid the sum of $50,000 towards the first instalment of the purchase price. On 2 January 2015 Mr Nasso paid $50,000 being the balance of the first instalment.
During early 2015 issues arose between the parties regarding the design of the boat, while Mr Fury continued to build the boat, by building and assembling the plug work from which a fibreglass mould would be formed and from which the upper deck would be built.
The parties met on at least two occasions in April 2015 when concerns Mr Nasso expressed regarding the design of the boat were discussed. Whether as a consequence of those meetings, the contract was terminated and Mr Fury then continued to build a boat, but for himself and not for Mr Nasso, is an issue between the parties.
Mr Fury completed construction of a boat in March 2016 and later sold it to another customer for $296,000.
In March 2016 and April 2016 Mr Nasso and Mr Fury met and discussed Mr Fury building a boat for Mr Nasso.
On 14 April 2016 Mr Nasso, Mr Fury and a naval architect, Greg Kowalski, met at Mr Fury's premises. Mr Fury told Mr Nasso that to build the boat Mr Nasso wanted would incur extra costs and he would have to re-cost the boat. He requested payment of a further sum of $45,000.
By email of 15 April 2016[1] Mr Nasso demanded Mr Fury build the boat at the 'agreed price', being $275,400, or, if Mr Fury was not prepared to build the boat at the agreed price, to return the monies paid by him of $115,400. Mr Fury refused to refund the sum of $115,400 and refused to build a boat for the price of $275,400.
[1] Exhibit 1.99.
By email dated 16 May 2016[2] (in the final paragraph) Mr Fury advised Mr Nasso:
I am prepared to discuss pricing a new boat for you. However, I am unable to absorb further losses from our dealings.
[2] Exhibit 1.103.
Subsequently, relations between the parties irretrievably broke down and no further work was undertaken by Mr Fury towards construction of a boat for Mr Nasso.
By letter dated 20 June 2016 from Mr Nasso's then solicitors, Go to Court Lawyers, Mr Nasso purported to accept Mr Fury's repudiation of the contract and terminated the contract.[3]
[3] Exhibit 1.110.

The pleadings

Statement of claim

Mr Nasso pleads[4] that Mr Fury repudiated the agreement made on 6 September 2014 to construct a custom made fishing boat by the email sent by Mr Fury to Mr Nasso on 16 May 2016 by which, it is pleaded, Mr Fury refused to construct the boat substantially in accordance with the agreement unless Mr Nasso pay $45,000 more than the purchase price. It is further pleaded that by letter dated 20 June 2016 from Mr Nasso's solicitors to Mr Fury, Mr Nasso accepted Mr Fury's repudiation of the agreement and terminated the agreement.
[4] Statement of claim, par 8.
Mr Nasso says that at a meeting with himself, Mr Fury and Mr Kowalski, Mr Nasso asked Mr Kowalski to prepare better drawings that would better guide Mr Fury in building the boat Mr Nasso wanted him to build, which is when Mr Fury demanded payment of a further sum of $45,000 to construct the boat that Mr Nasso says Mr Fury was already contractually bound to build. It is Mr Nasso's case that by asking Mr Nasso to pay a further sum of $45,000 there was a demand for more money for what Mr Fury was already contractually bound to perform which is the act of repudiation upon which Mr Nasso relied to terminate the agreement and to claim damages.[5]
[5] ts 31 - counsel's opening.
The primary relief sought by Mr Nasso is damages for breach of contract being the price Mr Nasso would have to pay an experienced boat builder to build the boat that he wanted and contracted with Mr Fury to build.[6]
[6] ts 33 - opening.
Mr Nasso pleads[7] that his payment to Mr Fury in the total sum of $115,400 has totally failed and Mr Nasso is therefore entitled to restitution in that sum plus interest.
[7] Statement of claim, par 10.
It is further pleaded[8] that as a result of Mr Fury's repudiation and Mr Nasso's consequential termination of the agreement, Mr Nasso suffered loss and damage in that it will cost him substantially more than the purchase price to have the same, or substantially the same, custom built boat constructed by another boat builder. Despite the way in which the claim is pleaded, the primary remedy sought is in damages and the secondary relief claimed is restitution.
[8] Statement of claim, par 11.
Mr Nasso claims damages in the sum of $273,444.69 being the difference between the cost of building an equivalent boat of $548,844.69 less the agreement price agreed between Mr Nasso and Mr Fury of $275,400.[9] In relation to the alternative claim for restitution, Mr Nasso seeks payment in the sum of $115,400 being the monies he paid to Mr Fury in accordance with the terms of the contract.

Terms of the agreement

[9] Plaintiff's particulars of damages. The particulars of damage claimed were revised during closing submissions and I refer to the revised particulars when considering the claim for damages.

Mr Nasso pleads the terms of the agreement included:[10]
[10] Statement of claim, par 3, par 4.
3.…
3.1the Plaintiff would pay to the Defendant the sum of $275,400 inclusive of GST ('Purchase Price') in consideration for the Defendant constructing the Boat;
3.2payment of the Purchase Price would be in four stages, namely:
(a)an initial deposit of $15,400;
(b)a stage 1 payment of $100,000, payable at the start of construction of the hull and deck;
(c)a stage 2 payment of $100,000, payable once the hull and deck had been assembled; and
(d)the balance of $60,000 to be paid at handover of the completed Boat;
3.3the Defendant would construct the Boat in accordance with the Design Terms as set out in the Contract Documents (as defined below); and
3.4the parties could agree to modify the Design Terms at any time in the course of the Defendant building the Boat.
Particulars
The terms of the Agreement were comprised in:
(a)an email sent from the Defendant to the Plaintiff on 3 September 2014 at 8:54 pm and the documents attached thereto referred to as '282 DC +600 GA Plan 3 shts.pdf' which comprised of two pages with the words '282 DUAL CONSOLE' in the top right hand corner and 'GENERAL ARRANGEMENT CAB FWD 600MM' in the bottom right hand corner, and one page with the words 'OUTBOARD PROFILE' in the bottom right hand corner ('Drawings');
(b)an email sent from the Defendant to the Plaintiff on 3 September 2014 at 9:08 pm;
(c)an email sent from the Defendant to the Plaintiff on 4 September 2014 at 7:11 am;
(d)an email sent from the Plaintiff to the Defendant on 5 September 2014 at 5:57 am and the documents attached thereto referred to as 'New Specs for Fury duel consul 04 sep with aditions.dox' and headed 'FURY 282 DUAL CONSOLE (BOWRIDER)';
(e)an email sent from the Defendant to the Plaintiff on 5 September 2014 at 5:28 pm and the documents attached thereto referred to as 'FURY 282 DUAL CONSOLE', 'CONDITIONS OF SALE', 'DETAILS OF CONTRACT' AND 'PAYMENT SCHEDULE'; and
(f)an email sent from the Defendant to the Plaintiff on 6 September 2014 at 5:27 pm and the document attached thereto referred to as 'S Nasso.docx' and headed 'FURY 282 DUAL CONSOLE' ('Specifications').
('Contract Documents')
4.The Design Terms included the following:
4.1the Drawings, subject to the agreed modifications specified in sub-paragraphs 4.3 to 4.9 below;
4.2the Specifications, subject to the agreed modifications specified in sub-paragraphs 4.3 to 4.9 below;
4.3the width of the cabin, as depicted in the Drawings, be increased to the outer edge of the gunnel on each side of the Boat in order to increase the width of the driver and passenger seats by 100 mm each;
Particulars
As set out in the email referred to in sub-paragraph 3.3(a) above.
4.4the centre window open upwards on gas struts;
Particulars
As set out in the email referred to in sub-paragraph 3.3(a) above.
4.5the rear end of the side windshields, as depicted in the Drawings, finish in line with the back of the driver's seat;
Particulars
As set out in the email referred to in sub-paragraph 3.3(c) above.
4.6the console height, as depicted in the Drawings, be lowered by approximately 200 mm, so that the top of the console is in line with the base of the windscreen;
Particulars
As set out in the email referred to in sub-paragraph 3.3(c) above.
4.7the height of the driver's and passenger's seat, as depicted in the Drawings, be lowered;
Particulars
As set out in the email referred to in sub-paragraph 3.3(c) above.
4.8a step be built into the floor of the Boat starting from the back of the front seats and extending to the front of the bow so that the:
(a)driver's and passenger's feet could touch the floor when they sat on the front seats; and
(b)distance between the top of the gunnel and the floor in the bow section of the Boat was similar to the distance between the top of the gunnel and the floor in the aft section of the Boat; and
Particulars
As set out in the email referred to in sub-paragraph 3.3(c) above.
4.9the windscreen be curved on the corners and not flat panelled.
Particulars
As set out in the email referred to in sub-paragraph 3.3(b) above.
In his opening, counsel for Mr Nasso described the drawings referred to in par 4 of the statement of claim as essential features, or terms, of the agreement. It was further said that the drawings substantially breached, beyond an acceptable tolerance, the features which were essential to Mr Nasso in the design of the boat he wanted Mr Fury to build for him. However, Mr Nasso does not rely upon any breach of a term of the agreement as giving rise to the act repudiation. The act of repudiation is only based upon Mr Fury demanding payment of $45,000 for work Mr Nasso says Mr Fury was already contracted to perform.[11]
[11] ts 38 - ts 39 - opening.
In his written opening submissions counsel explained Mr Nasso seeks alternative relief as follows:
18.If the Court is not satisfied either that a contract was formed between the parties, or that the defendant's approach to carrying out the contract amounted to a repudiation, the consideration for the payments made by the plaintiff under the contract must be taken to have totally failed, in a sense that gives rise to an entitlement in restitution.
19.This proposition is based on the following two matters of fact, supported by the evidence:
a)the contract was for the construction and delivery of an entire custom-made boat, rather than for the supply of labour and materials towards the construction of that boat, such that it was, in a legal sense, an entire contract: compare Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32; Foran v Wight [1989] HCA 51.
b)The defendant had not completed substantially the whole of the agreed scope of works under the contract before repudiating it.
20.The plaintiff had paid to the defendant a total of $115,400 by the time of the defendant's repudiation.
21.Should the plaintiff's primary claim for damages not be made out, the plaintiff will be entitled to restitution of those payments, plus interest at 6% per annum from the date of each such payment, pursuant to section 32 of the Supreme Court Act 1935.

In his opening, counsel for Mr Nasso further explained the basis of the claim for restitution was that the agreement entered into between the parties was an entire contract for the design, construction and delivery of the boat which was substantially in accordance with the plans and specifications which were agreed upon. The failure to deliver the boat, it was submitted, means that the agreement failed and therefore ceased to govern the rights and obligations of the parties prior to completion of the agreement. There was therefore a total failure of consideration with the result that Mr Fury has been unjustly enriched by the progress payments which were made to him which were only owed upon completion of the entire contract, even though it was a term of the agreement that there be periodic payments. It was submitted Mr Fury was unjustly enriched by receiving payments pursuant to the agreement, which because it was an entire contract requiring delivery of the boat, failed. As Mr Nasso has not received the boat he has a right in restitution for a refund of the monies made by him pursuant to the agreement.[12]
[12] ts 50 - ts 54.
Counsel accepted the principal claim for relief is for damages for breach of contract and that the plaintiff only falls back on restitution if the claim for damages fails.[13]
[13] ts 55 - opening.
Counsel also explained in opening that an alternative basis for a claim for restitution arises if I was to find that there was no legally binding contract because of uncertainty as to its terms. If there was no contract there was never any basis in law for the payments to be made by Mr Nasso to Mr Fury and therefore there was no legal basis for Mr Fury to retain those payments. It follows, it is submitted, that in those circumstances Mr Fury was unjustly enriched in that he received payment of $115,400 and Mr Nasso received nothing.[14]
[14] ts 50, ts 54 - ts 55 - opening.
Counsel accepts that restitution is subordinate to contract so that if a contract exists it governs the rights and obligations of the parties and a claimed based on restitution is excluded.[15]
[15] ts 50 - opening.
Counsel later reiterated that the only category of unjust enrichment in which the plaintiff's case in restitution relies is a total failure of consideration. Counsel accepted that unless there is a finding of a total failure of consideration there is no basis for a claim in restitution.[16]
[16] ts 83 - ts 84 - opening.

Defence

By his defence Mr Fury admits he entered into an agreement with Mr Nasso in or around 6 September 2014 and that he received a deposit in the sum of $15,400 from Mr Nasso on or about 11 September 2014.[17]
[17] Paragraph 3(a).
The defence also pleads that it was an express term of the agreement that the deposit was non‑refundable.[18]
[18] Paragraph 4(b).
By par 3(b) Mr Fury pleads:
3.As to paragraph 2 of the Claim, the Defendant:
…
(b)says that:
(i)the Agreement was for the design and construction of a custom- made fishing boat of an entirely new dual console design for the fibreglass deck and cabin superstructure;
(ii)pursuant to the Agreement the Defendant agreed to:
(i)provide design drawings;
(ii)construct and supply a fibreglass hull;
(iii)carry out the work necessary to form up a three- dimensional, full size physical plug for the fibreglass deck and cabin superstructure (the plug work);
(iv)to take or construct a mould from the plug work at his expense;
(v)to use the mould to construct the fibreglass deck and superstructure for the Boat; and
(vi)to supply a vessel according to the design drawings and agreed specifications;
('the Work')
By par 1 of the reply and defence to counterclaim, par 3(b) is admitted by Mr Nasso.
By par 4 and par 5 of his defence Mr Fury takes issue with various of the matters which are pleaded as terms of the agreement in the statement of claim which, for present purposes, it is unnecessary to set out.
Relevantly, the defence pleads:
8On or about 21 April 2014 [sic 2015] the Plaintiff repudiated the Agreement with the Defendant (Repudiation);
Particulars
The Plaintiff met the Defendant at the workshop of the Defendant at Unit 6, 7 Coolibah Way, Bibra Lake (Premises) and advised the Defendant that:
(i)he was travelling and wanted to stop building; and
(ii)requested the Defendant to take over the build of the boat to the Defendant's specifications using the Defendant's own funds.
It is further pleaded:
9.At the time of the Repudiation, the Defendant had:
(a)performed the following services pursuant to and in accordance with the Agreement:
(i)design;
(ii)constructed the hull;
(iii)raw formed the MDF shapes in the hull for plug construction; and
(iv)constructed the plug shape, unfared and not yet sprayed.
(b)spent approximately seven months of time completing the initial plug work for the Plaintiff pursuant to the agreement at a cost of approximately $100,000.00.
Particulars

Item No.

Description

Rate

Time/hrs

Sub-total

1.

Materials:

MDF wood for plug work & hull

Foam cores Fibreglass

Consumables (gloves, screws, sanding discs, suits, buckets, tape)

Wear & tear on tools

$23,000

2.

Labour

$128,800

Scott Fury Labour

$130

14 hrs/week

over 6 months

$124,800

Laminator (subcontractor)

$4,000

TOTAL

$151,800

10.On or about 30 April 2015, in mitigation of his losses, during a meeting between the Plaintiff and the Defendant, at the Premises, the Defendant verbally accepted the Plaintiff's Repudiation and Terminated the agreement (Termination). Further, the Defendant redesigned and constructed the remainder of the boat to his own specification and with his own funds, with a view to using the boat as a demonstrator model once completed.

Particulars
On or about 30 April 2015, at the Premises, the Defendant verbally accepted the Plaintiff's Repudiation and agreed to terminate the agreement and complete the boat using his own funds, own design and specifications to be used as a 'demonstrator' boat.
11.At the time of Termination, the details set out in the specifications that formed the Agreement were not yet completed by the Defendant as the works had not yet reach that stage of building.
11AFurther and in the alternative to the matters pleaded in paragraphs 8 and 10 hereof, if the Agreement was not terminated in or about 30 April 2015 (which is denied), then the Plaintiff repudiated the Agreement in or about November 2015 or in alternative in or about February 2016, in the following circumstances:
(a)in or about November 2015 and again in or about February 2016 the Plaintiff met with the Defendant at the Premises;
(b)on each occasion the Plaintiff advised the Defendant that:
(i)he did not want to purchase a vessel of the kind that the Defendant had produced pursuant to the Agreement;
(ii) he might at some future stage engage the Defendant to design and construct a differently designed vessel with a forward-sloping windscreen, however he intended to travel to South Africa and did not wish to proceed with any such new design;

(c)on each occasion the Defendant accepted the repudiation.

…
15.The Defendant denies the matters alleged in paragraph 10 of the Claim and says further that:
(a)The Defendant provided consideration for the monies paid by the Plaintiff pursuant to the Agreement by performing the Work as set out in paragraph 9 hereof;
(b)In the circumstances it is not and could not be unjust for the Defendant to retain monies paid pursuant to the Agreement for that part of the Work that was done;
(c)The amount of restitution sought by the Plaintiff includes the deposit paid, which was agreed to be non‑refundable;
(c) [sic]in the circumstances the Plaintiff is not entitled to restitution in the amount sought or at all.

Counterclaim

By his defence and counterclaim Mr Fury pleads:
20.By reason of the Plaintiff's Repudiation of the Agreement, pleaded in paragraph 8 of the Defence, , [sic] or alternatively the repudiation pleaded in paragraph 11A, the Defendant suffered loss and damage.
Particulars
(a)But for the Plaintiff's Repudiation the Boat would have been delivered to the Plaintiff in or about January 2016. However in the circumstances the completed Boat remained at the Premises, occupying approximately 1/3 of the available workspace, for an additional six (6) months while the Defendant located an alternative buyer, as a result of which the Defendant incurred additional fixed business costs in the amount of $11,075.89 during the delay, namely:
(i)council rates, $558.12;
(ii)strata fees, $480.00;
(iii)water rates, $178.61;
(iv)electricity charges, $221.62;
(v)gas charges, $64.38;
(vi)rent, $8,666.67;
(vii)Worksafe licence, $15.66;
(viii)security services, $531.93; and
(ix)insurance, $358.90.
(b)As a result of the Plaintiff's Repudiation the Defendant had no option but to finance the construction of the Boat personally. In particular the Defendant withdrew amounts from his personal bank account, and thereby lost the benefit of the offset against his personal home loan from the date of the withdrawal to the date of the eventual sale of the vessel as particularised below:

Date of withdrawal

Amount

Interest rate

Period

Loss

5 March 2015

$187,000.00, of

which $60,745.86 was consumed prior to the date of the Repudiation, interest calculated on the remainder

4.950%

477 days

$8,167.26

19 October 2015

$6,000.00

4.950%

296 days

$240.85

1 November 2015

$40,000.00

4.950%

283 days

$1,535.18

TOTAL

$9,943.29

During the trial counsel revised Mr Fury's particulars of damage on his counterclaim in the following terms:[19]
1.Had the Agreement remained on foot, the plaintiff would have been obliged to make the stage 2 payment of $100,000 when the hull and deck were assembled: Exhibit 1.44.
2.On the defendant's evidence, this stage would have been reached on about 3-4 months after April 2015.
3.The vessel ultimately sold in or about August 2016.
4.During that period of approximately one year the defendant was without the benefit of monies that would have been received from the plaintiff, and instead funded the building of the vessel from his own resources, withdrawing funds from the offset account.
5.He therefore lost the benefit of the holding $100,000 in that offset account for a period of approximately 1 year.
6.Hence the value of the counterclaim is as follows: $100,000.000 x 0.0495 = $4,950.00.
[19] ts 1,092.
In her opening submissions lead counsel for Mr Fury emphasised the concluding paragraph of Mr Fury's email to Mr Nasso of 16 May 2016 which, it is submitted, is inconsistent with Mr Nasso's case that by that email he repudiated the agreement by refusing to perform his obligations under the agreement unless an amount of $45,000 was paid to him.[20]
[20] ts 56 - opening.
As counsel explained in her opening, it is Mr Fury's case that the contract was brought to an end on about 21 April 2015 at a meeting between Mr Fury and Mr Nasso when Mr Nasso told Mr Fury to build the boat for himself and not for Mr Nasso, which repudiation Mr Fury accepted and then continued to construct the boat in accordance with his own specifications and requirements and not by reference to Mr Nasso's specifications and requirements.[21]
[21] ts 68 - ts 69 - opening.
In the alternative, as pleaded in par 11A of his amended defence, Mr Fury says Mr Nasso repudiated the agreement either in or about November 2015 or in February 2016. Those dates relate to occasions when Mr Nasso and Mr Fury met to discuss Mr Fury building a boat for Mr Nasso. It is Mr Fury's case that on each occasion Mr Nasso told Mr Fury he did not want Mr Fury to build for him the type of boat that Mr Fury had constructed. Mr Fury pleads that on each occasion he accepted the repudiation.
Mr Fury says that when the contract was brought to an end he had nearly completed the construction of a mould for the upper deck from which the boat was to be built. A plug was substantially built from which a mould would have been taken. Mr Fury had completed approximately 950 hours of work.
In opening Mr Fury's lead counsel explained that on the defendant's case a contract was reached between the parties by 6 September 2014. The contract comprised general arrangement drawings prepared by Mr Kowalski of a dual console boat which comprised approximate measurements and drawings of what the boat would look like.
The contract was also comprised of:
1.Specifications contained in drawings sent by Mr Fury to Mr Nasso in an email of 3 September 2014.
2.Documents sent by Mr Fury to Mr Nasso in an email of 5 September 2015 which included a document headed 'Conditions of Sale', a further document headed 'Details of Contract' with the cost of the boat and a payment schedule. The documents also contain an itemised list of what was to be fitted to the boat.
Counsel explained that Mr Fury was designing and constructing the boat from scratch. He was charging close to the cost to him and was not making a significant profit from the construction. What he stood to gain was the capacity to build more boats in the future from the mould that he would keep.
Once Mr Fury, on the defence case, accepted Mr Nasso's repudiation and terminated the contract, he, at his own cost, built a boat for another customer.[22]
[22] ts 72 - opening.
Counsel submitted that one of the issues which must be determined is whether or not the contract entered into between the parties meant that Mr Fury's right to receive and retain payment of the monies from Mr Nasso was conditional upon complete performance of the contract, that is, Mr Fury's right to retain the sum of $115,400 was conditional upon him giving a boat to Mr Nasso.[23]
[23] ts 73 - opening.
Counsel explained that because the contract required that progress payments be made which were relevant to the stage of the works completed, the payments were not conditional upon complete performance of the contract. Further, the reason Mr Fury was not able to complete the performance of the contract was because of the conduct of Mr Nasso in repudiating the contract.[24]
[24] ts 74 - opening.
It follows, counsel submits, that there was not a total failure of consideration and Mr Nasso's claim for relief based upon the alternative basis of restitution because of a total failure of consideration, is not established.[25]
[25] ts 76 - opening.
Therefore, each of the parties plead the other repudiated the agreement and the non-repudiating party accepted the repudiation and elected to terminate the agreement. Mr Nasso says that Mr Fury repudiated the agreement on or about 16 May 2016 when he refused to construct the boat in accordance with the agreement unless Mr Nasso paid him a further $45,000 more than the purchase price of $275,400. Mr Fury denies he repudiated the agreement and remained at all times willing to build a boat for Mr Nasso but says that it was Mr Nasso who repudiated the agreement when he, on 21 April 2015 instructed Mr Fury to take over the build of the boat to his own specifications, using his own funds. Mr Fury says that he accepted Mr Nasso's repudiation and elected to terminate the agreement at a meeting between the parties on about 30 April 2015.

The issues to be determined

In accordance with my direction the parties have helpfully agreed a statement of the issues which require my determination. The joint statement of issues is in the following terms:
A.Background contractual context
The parties agree that the Plaintiff and Defendant entered an Agreement on 6 September 2014. However the following matters may remain in issue.
1.What documents formed the Agreement?
2.What were the terms of the Agreement?
3.Were the terms of the Agreement subsequently varied, and if so, when and to what effect?
4.Did the Defendant perform work pursuant to the Agreement, and if so, what work and when?
5.Was the work which was performed substantially in accordance with terms of the Agreement?
B.Issues relevant to the Plaintiff's claim in contract
6.Did the Plaintiff repudiate the Agreement?
(a)at all;
(b)in April/May 2015;
(c)in or about November 2016; or
(d)in or about February 2016?
If the answer to issue 6 is 'yes':
7.Did the Defendant accept that repudiation and terminate the Agreement?
If the answer to issue 6 is 'no':
8.Did the Defendant, by his conduct in a meeting between the parties on or about 14 April 2016 and/or by his email of 16 May 2016, repudiate the Agreement, and did the Plaintiff accept such repudiation and terminate the Agreement?
If the answer to issue 8 is 'yes':
9.What is the appropriate measure of damages in such a case, and has the Plaintiff proved such loss?
C.Issues relevant to the Plaintiff's claim for restitution
10.Is the doctrine of 'entire contract' applicable to this case?
11.Should the Agreement be characterised as an 'entire contract' in the relevant sense?
12.Is the Defendant's right to retain:
(a)the deposit of $15,400; and/or
(b)the two advance payments, each of $50,000.00;
conditional on performance by the Defendant of his obligations arising under the Agreement?
13.In light of the manner in which issues 4, 5, 10, 11and 12 have been resolved, has there been a total failure of consideration such as would give rise to a right to restitution?
D.Issues relevant to the Defendant's counterclaim for damages
If the answers to issues 6 and 7 are both 'yes', then the following additional issue arises:
14.What is the appropriate measure of damages in such a case, and has the Defendant proved such loss?
As the trial proceeded, and from the way in which each counsel addressed the issues in closing, the main issues were narrowed to the matters set out in part B of the joint statement of issues under the heading 'Issues relevant to the plaintiff's claim in contract'. That is, whether Mr Nasso repudiated the agreement at a meeting with Mr Fury on 21 April 2015, which repudiation Mr Fury accepted on or about 30 April 2015 during a meeting between he and Mr Nasso. Mr Fury's case is that on or about that date Mr Fury terminated the agreement and continued to build the boat using his own funds. The specific act of repudiation relied upon by Mr Fury is the direction from Mr Nasso to stop building the boat and for Mr Fury to take over the build of the boat to his own specifications, using his own funds.[26]
[26] Defence and counterclaim, par 8, par 11 and par 11A; Defendant's written closing submissions, pars 85 ‑ 100.
Mr Nasso's case is that there was no unequivocal act of repudiation by him in April 2015 which was accepted by Mr Fury and that the agreement between them continued on foot until 16 May 2016 when Mr Fury repudiated the agreement by refusing to continue to construct the boat in accordance with the agreement unless Mr Nasso paid him a further $45,000 beyond the agreed purchase price, which repudiation was later accepted by Mr Nasso on or about 20 June 2016.[27]
[27] Amended statement of claim, par 8 and par 9.
Alternatively, the defendant claims that if there was not an act of repudiation which was accepted by Mr Fury in April 2015, there was an act of repudiation by Mr Nasso in either November 2015, or February 2016, which act of repudiation was accepted by Mr Fury who terminated the contract.[28]
[28] Defendant's written closing submissions, pars 101 - 112.

In relation to the alleged act of repudiation by Mr Nasso in November 2015 the defendant points to a meeting between the parties at Mr Fury's premises in November 2015 or December 2015 in which, the defendant says, Mr Nasso told Mr Fury that he was going to travel to South Africa for two years and that the dual console design was not what he wanted anymore which is consistent, it is submitted, with a person who considered that he no longer had a contractual agreement with Mr Fury. Specifically, the defendant relies upon Mr Nasso saying to Mr Fury that he and his wife no longer wanted a dual console vessel.[29]
[29] Defendant's written closing submissions, pars 101 - 106.
The defendant further submits that if the contract was not repudiated by Mr Nasso on either of the earlier two occasions it was repudiated by Mr Nasso in or about February 2016 when Mr Nasso at a meeting with Mr Fury at Mr Fury's premises informed Mr Fury that he and his wife no longer wanted the dual console model vessel and that they were going to South Africa for two years. Mr Nasso also said he wanted to explore the option of purchasing a differently designed vessel with forward sloping windows. It is submitted Mr Fury subsequently accepted the repudiation and terminated the agreement.[30]
[30] Defendant's written closing submissions, pars 107 - 112.
It must follow that if I resolve that factual dispute in favour of the defendant, that is, that the agreement was terminated by Mr Fury on or about 30 April 2015 in reliance upon Mr Nasso's repudiation of the agreement, there could not have been any relevant repudiation of the agreement by Mr Fury in May 2016 because at that time there was no agreement between the parties. Therefore, because the plaintiff's cause of action is based on a sole act of repudiation in May 2016, the plaintiff's action must fail.
The issue of whether Mr Nasso has an entitlement to restitution was focussed upon by each counsel in both their written and oral closing submissions. Of course, restitution only becomes relevant if I find that Mr Nasso terminated the contract after he accepted Mr Fury's repudiation of the contract, and if I am not persuaded Mr Nasso has proved an entitlement to damages. Whether there is an entitlement to restitution turns upon whether, as a matter of construction, the contract is properly characterised as an entire contract or whether it is a severable or divisible contract. Mr Nasso only has an entitlement to restitution for the payments made to Mr Fury if the contract is an entire contract requiring Mr Fury to design and build a vessel substantially in accordance with the drawings and specifications and deliver the vessel to Mr Nasso.

Witness statements

By a minute of consent orders dated 30 November 2018 the parties consented to orders being made for the exchange of witness statements before the trial with further orders that a party may not, without leave of the court lead evidence from a witness if the substance of the evidence was not included in the statement and the court may direct that the statement, or any part of it, stand as the evidence-in-chief of the witness. The parties consented to a further order being made that, save with leave of the court, no party may adduce evidence from a witness if the substance of the evidence is not included in a statement which has not been served in accordance with the orders. Orders were also made regarding any objections to the admissibility of any part of a witness statement. Formal orders with in accordance the minute were made by a deputy registrar on 30 November 2018.
When the trial commenced before me on 4 February 2019 objections each party had taken to the witness statement of the other party were unresolved. Ultimately the parties were able to resolve objections to Mr Nasso's statement. However, objections to Mr Fury's witness statement were not able to be resolved.[31] Those objections were argued before, and ruled upon by, me on 2 July 2019.
[31] ts 21, ts 22 - ts 24, ts 91.
When counsel for Mr Nasso advised that he was proposing to lead the evidence of Mr Nasso by having Mr Nasso confirm the accuracy of the written witness statement and then tendering the statement, which would stand as the evidence-in-chief, I informed counsel that I was not prepared to allow the evidence to be adduced in that way and required the witness statements to be read by the witnesses in court.[32]
[32] ts 4 – ts 5, ts 14 – ts 15, ts 91.

The evidence

Stephen Robert James Nasso

Credibility

Mr Nasso suffers from dyslexia and had significant difficulty in reading his statement.[33] His counsel frequently had to assist Mr Nasso to read the statement or necessarily had to correct Mr Nasso when he did not accurately read the statement. Mr Nasso is of course not to be criticised because of the difficulties he had arising from his dyslexia in reading the statement and I make allowance for those difficulties. Notwithstanding those allowances, I was left with an unsatisfactory impression of Mr Nasso as a witness.
[33] MFI 3.1.
When his witness statement was first put to him, Mr Nasso said he had looked through it earlier in the morning and it was the document that he put together with his solicitors for the witness statement. He confirmed it was a statement of the evidence that he intended to give in this case. He explained that he had written a lot of the statement and when he went through it with his solicitors they wrote parts of it in a different way so it made more sense.[34] He confirmed that after the statement had been prepared he read through it and he was happy with it. When he was asked by his counsel whether it was a complete and accurate statement of the evidence that he intended to give, curiously he answered 'Yes. I think so'.[35] He was then asked whether he was satisfied it was all true and accurate and he responded 'That's right'.[36] His counsel then sought to tender the statement, but I required the statement to be first read before it was tendered. As matters transpired various errors in the statement, which had to be corrected, became apparent. Therefore despite Mr Nasso's initial hesitant answer that he 'thought' the statement was a complete and accurate statement of the evidence he intended to give and later confirmed he was satisfied it was true and accurate, it became clear that in some respects the statement was not true and accurate.
[34] ts 101.
[35] ts 102.
[36] ts 102.
I will later refer in more detail to the acknowledged errors in the statement but an obvious instance is the confusing and erroneous paragraph numbering midway through the statement. After the paragraph numbered 135 the paragraph numbering reverts to par 118 so that the paragraph numbering 118 to 135 is repeated. While I accept that that that error might not be directly attributable to Mr Nasso who did not prepare the final version of the statement, it raises an issue as to how carefully he read the statement before he gave evidence that it was true and accurate, particularly in circumstances where during the course of his evidence he acknowledged other errors in the statement. It is perhaps a small point and I accept at the end of the day the evidence is the evidence Mr Nasso gave under affirmation in court, which included his acknowledgement of various errors in the statement. The failure to identify the incorrect paragraph numbering may also be attributable to Mr Nasso's dyslexia.
Another aspect of Mr Nasso's evidence which I found unsatisfactory is that rather than simply reading his statement as directed by his counsel, or answer a question as asked by his counsel, he was often concerned to conduct the trial in a way he wanted to rather than leaving it to his counsel. An example is when, very early on in his evidence, he gave evidence about boating terminology he asked whether the judge was understanding what he was describing.[37]
[37] ts 104.
While I accept Mr Nasso was probably concerned to ensure that I understood his evidence, it gave the impression that he was less concerned about giving truthful and accurate evidence in response to questions asked of him by his counsel than seeking to conduct his case or adduce the evidence in the way he thought best advanced his case.
To some extent the issue was compounded by counsel's approach when counsel left it to Mr Nasso to determine what documents or photographs should be referred to to best explain a part of the evidence such as when Mr Nasso was giving evidence about storage space and his counsel referred to one page in the trial bundle and said to Mr Nasso that if he thought there was a better photograph to help him explain it then he should refer to that.[38]
[38] ts 106.
Another example is when Mr Nasso was reading from his statement as to what a cabin was, rather than respond to a question from counsel or continue reading his statement he took it upon himself to refer to a photograph to explain what he said in his statement.[39]
[39] ts 113 - ts 114.
In cross‑examination, Mr Nasso said that although he looked at the documents provided by Mr Fury during the discovery process, he did not look at them thoroughly. When he was asked why not, he responded, in my view unsatisfactorily, that he could not remember the documents to be able to answer the question correctly.[40]
[40] ts 322.
Mr Nasso agreed that he could not precisely remember conversations between himself and Mr Fury in 2013 and 2014. He explained he could remember the intent of the conversations but not the exact words. When he was asked whether he remembered the things which were discussed as opposed to what he was thinking, he said:[41]
I believe, to a reasonable extent. All this happened a long time ago.
[41] ts 322 - ts 323.
When he was pressed about what he remembered, he became quite defensive and asked counsel whether she could remember conversations she had had many years ago exactly word for word.[42] He said he made notes closer in time to when the conversations occurred, which he explained was after the contract fell apart and there was an exchange of legal letters, but was not certain when the notes were made in relation to when the events occurred.[43]
[42] ts 323.
[43] ts 323.
Mr Nasso was unable to say when the agreement with Mr Fury to build the boat was reached. He answered in a very uncertain way when he said he thought it was 2014, around September.[44] Given he was being cross‑examined on the fourth day of the trial, after he had been examined by his own counsel and read his witness statement over the course of three days and had been sitting in court when his counsel opened the plaintiff's case, it is surprising, and in my view unsatisfactory, that Mr Nasso was not able to remember the date when he says an agreement was reached with Mr Fury for Mr Fury to build a boat for him. That is more so given there is really no issue between the parties as to when they say an agreement was reached. It causes me to have reservations about the reliability of Mr Nasso's evidence when it is based on his memory or recollection of what he says was discussed and when matters were discussed.
[44] ts 325.
Mr Nasso accepted that his memory of dates was based upon the dates of emails exchanged between he and Mr Fury.[45]
[45] ts 325.
He was further pressed about the reliability of his memory of conversations in 2014 and 2015. He said that he did not remember the exact wording of what was discussed but he did remember 'the general tone of the conversations'.[46] He believed that in the first meeting with Mr Fury he discussed with Mr Fury what he wanted in the boat he wanted built and the reasons why he wanted them built. He did not accept that he did not express to Mr Fury all of what he was thinking.[47]

Mr Nasso's background

[46] ts 326.

[47] ts 326.

Mr Nasso explained that he had been involved in boating since he was a child. He has owned about 20 boats and currently had five boats which included an 18 m cruising catamaran, a 6 m RIB, a 3 m RIB tender, a 3 m polycraft tender and a 5.5 m aluminium runabout.[48]
[48] ts 117 - ts 118.
Mr Nasso has a domestic skipper's licence, a commercial coxswain's ticket, a marine HF radio licence, a marine first aid certificate and various other marine certificates. He has circumnavigated Australia and been on many long range ocean trips where he has had to plot and navigate thousands of courses, obstacles and difference anchorages and ports. The longest of the journeys took 2 ½ years.[49]
[49] ts 118.
He had a commercially registered boat and had to maintain it to survey standards which is more rigorous than recreational standards.[50]
[50] ts 118.
He has never personally built a boat but has worked closely with structural and mechanical engineers and is familiar with plans and how to read them.[51]
[51] ts 118.
Mr Fury had previously built a boat for Mr Nasso which was a 28 foot centre console boat named 'A'lure'. Mr Nasso was happy with the boat Mr Fury built for him. He only required Mr Fury to make a few modifications to the design and specifications prepared by Mr Fury when he built the A'lure.[52]
[52] ts 120.
Mr Nasso still owned the A'lure when he first spoke to Mr Fury about him building a new boat. He was using the A'lure as a fishing boat at the time.[53]
[53] ts 121.
I accept Mr Nasso is very experienced with the operation of vessels and has a good working knowledge of how they are built and designed, but he does not have expertise in the design and construction of the vessels.

Scott Andrew Fury

Credibility

Mr Fury also suffers from dyslexia and at times had difficulty in reading his statement, although from my observations his difficulties were not to the same extent as were Mr Nasso's. However, as with Mr Nasso, Mr Fury's counsel had to frequently assist Mr Fury to read the statement and to correct inaccuracies in reading his statement, particularly in relation to numbers. As with Mr Nasso, Mr Fury is not to be criticised because of the difficulties he experienced arising from his dyslexia when he read his statement and I made allowance for those difficulties. I generally had a favourable impression of Mr Fury as a witness. I am satisfied his memory was generally reliable and accurate. When he was uncertain about something he was prepared to concede that. He also willingly conceded Mr Nasso frequently expressed concerns to him that he was not building the boat in accordance with Mr Nasso's wishes, and that despite his repeated reassurances to Mr Nasso, Mr Nasso remained unconvinced.
Although there was much common ground between Mr Nasso and Mr Fury as to what was discussed between them and when significant events occurred, there are some important areas of dispute between them. As I will later explain I generally prefer the evidence of Mr Fury to that of Mr Nasso in relation to those disputed matters because I am satisfied Mr Fury's evidence is more reliable and credible than Mr Nasso's.
Indeed, during his closing submissions, Mr Nasso's counsel conceded Mr Nasso's 'focus was remarkably narrow, it was much narrower than Mr Fury's'[54] and that except in relation to the meetings on 21 April 2015 and 14 April 2016 and what was said and done at those meetings, Mr Nasso's evidence was inaccurate and unreliable.[55]

Mr Fury's background

[54] ts 1,201.

[55] ts 1,202.

Mr Fury is the proprietor of the business name Fury Custom Boats. Mr Fury has owned and operated the business since 1999. At the material time he was operating his business from a unit in Bibra Lake. Fury Custom Boats designs and constructs small to medium fibreglass pleasure or recreational vessels. The small business is operated by Mr Fury and his wife. They have no employees but engage one or two subcontractors when necessary.[56]
[56] ts 675 - ts 676.
Mr Fury explained he builds fishing boats and charter and pleasure boats. He has been involved in building boats since about the age of 13. His father was a boat builder and he learnt from his father.[57]
[57] ts 677.
Mr Fury is currently aged 50 and has therefore been building boats for approximately 35 years.[58] He estimated he has built 60 to 70 boats.[59]
[58] ts 677.
[59] ts 688.
In a good year, he can produce and sell four boats but on average he produces two boats a year. The boats are built on the basis of several standard hull shapes. When he began the business he was producing boats to fit standard 26 or 27 foot hulls produced with permission from somebody else's mould. Currently most of his designs and moulds are based on a 28 foot mono-hull, which was also the case in 2014/2015.[60] Using the hull shapes Fury Custom Boats developed a small range of standard upper deck designs. Mr Fury explained that he currently offered a centre console model, a sports cabin model and a dual console model. Each of those designs is produced using a specific shaped mould.[61] He explained the centre console model is a basic open fishing boat with the console located in the centre of the boat giving full access to the bow and the stern.[62] That is to be contrasted with a dual console model which has two consoles, one located port and the other starboard.[63] The boat he was building for Mr Nasso, which is the subject of the dispute between the parties, was a dual console model based on a mono or single hull design.[64]
[60] ts 677 - ts 678.
[61] ts 678.
[62] ts 678.
[63] ts 678 - ts 679.
[64] ts 679.
Mr Fury explained how the construction of the boat commences with applying fibreglass to each of the hull and upper deck moulds, then 'forming up' the hull and below deck structure and then fibre glassing the upper deck to the hull.[65]
[65] ts 679.
The work necessary to complete the construction and fitting out of the dual console vessel takes approximately six months.[66]
[66] ts 680.
Mr Fury explained that when a new vessel is being built without the use of an existing mould, a full scale model of the boat is built from preliminary drawings using MDF fibreboard material. That process is called building a plug.[67] Once the plug work is completed a mould is taken by spraying a gel coat and applying layers of fibreglass to the plug. Once the mould has cured it is pulled off the plug work in several pieces.[68]
[67] ts 680 - 683.
[68] ts 684.
When an upper deck is being constructed from the mould, minor alterations to the layout of the deck can be made by blocking out parts of the mould by adding MDF fibreboard to the mould before striking the fibreglass deck from the mould.[69] The process is also called 'blanking out'.[70] However it is not possible to make major alterations to the design of the upper deck in that way.[71]
[69] ts 685.
[70] ts 685.
[71] ts 685.
I accept Mr Fury is an experienced boat builder who, by virtue of that experience, has expertise in the design and building of vessels, including the need to make alterations and modifications during the construction process.

Initial meeting - approximately October 2013

In 2013 Mr Nasso and his wife decided they wanted a new boat which they could use for recreational fishing. He met with Mr Fury in about October 2013 and spoke with Mr Fury about building a custom made fishing boat.[72]
[72] ts 121.
At the meeting Mr Nasso said to Mr Fury words to the effect:[73]
[73] ts 121 - ts 122, ts 128 - ts 131, ts 136 - ts 138.
… It's important that there is enough deck space at the front of the boat for two people to fish, and the same time enough deck space at the back of the boat for two people to fish.:
I explained to Scott that, at that meeting, that I wanted the boat to have the same hull as the Allure because it provided more stability in rough conditions which was very good for fishing.
A dual console boat with windscreens to provide the skipper and the passengers more protection from the spray, weather and the elements.
The two console seats to be wide enough to comfortably fit two people on each, four people in total but still have enough room between them for people to walk down the middle.
The boat to have a front deck that was two metres long and a back deck that was two metres long so that people could comfortably fish ‑
Sorry, how - how many - how many people? If we just go back ‑ ‑ ‑?‑‑‑Sorry. I missed it, did I?
Two people could comfortably fish from the front deck of the boat and two people could comfortably fish from the back deck with the two metres at the front of the boat to be measured from the front of the console to the back of the bow gunwale. And two metres at the back of the boat to be measured from the rear of the console seats to the front of the stern gunwale.
A step to be built into the boat so that the bow deck of the boat could be raised and so the height at the front of the rear gunwale measured from the deck would be similar making fishing and retrieving large fish easier.
Can you - can you - can you elaborate on that? So ‑ ‑ ‑?‑‑‑Yeah.
‑ ‑ ‑ what - what - where does the step go?‑‑‑Okay. Well, what we'd agreed to do is have a - I wanted the feet on the floor of the boat when you're sitting. So we decided to put the step from behind the driver's - well, the console seats and right through to the front of the boat, okay. Now, the idea is that raised the floor so that - and it was all one height so that ‑ ‑ ‑
What was all one height?‑‑‑And the front part of the deck, okay, because you don't want lots of little steps, okay. So originally they drew it up with three steps, one for the front section of the boat and one for each of the consoles.
Who - who drew that?‑‑‑Greg, the architect with Scott.
Greg Kowalski?‑‑‑Yeah, Greg Kowalski, yeah.
…

Mr Nasso later continued:[74]
[74] ts 125 - ts 131.
A door and a window section between the two consoles, that could be closed when the weather got bad or cold.
A large hardtop binnaker for shade ‑
That's ‑ so that's spelt b‑i‑m‑i‑n‑i‑s?‑‑‑Got no idea. It should ‑ should be binnaker, but ‑ ‑ ‑
That ‑ that's okay, would you mind, please keep reading from 35.8?‑‑‑Okay:
The driver and passenger's seat to be ‑
‑ as much –
‑ at such a height that when seated at the console, the driver and the passenger's feet could have their feet on the floor.
Two drop‑down seats to the back of the driver and passenger seat.
A toilet in the left‑hand console, with a ‑
‑ swing door and top for ‑
‑ swing door and top for access.
Is that ‑ is that easy access?‑‑‑Easy access, sorry:
…
At the same meeting Scott and I also discussed the dimensions that I wanted the boat to have, including the inside width, length and explore whether there would be a way to make it all work ‑ what I wanted to work.
At the same meeting I explained to Scott that I had the requirements ‑
‑ it's ‑ I had been:
At the same meeting I explained to Scott that I had the requirements I had been describing to him, because I would be using the boat as a dedicated fishing boat. The layout was meant to provide more room for people to fish, which ‑
‑ to me ‑
‑ to my mind, would make it a more practical fishing boat.
The cabin area, which includes the seat and the dual console, will provide more protection from the spray, weather and the elements, which to my mind would make it more enjoyable experience for the passengers and skipper.
Scott told me that he would get some drawings done and send them to me to discuss further.
He also told me that he would build a new model ‑
‑ a new ‑ ‑ ‑
...
MORRIS, MR: Do ‑ do you mean build a new mould?‑‑‑Yeah.
Build a new mould for the boat?‑‑‑For the boat that I wanted:
Because he didn't have moulds for a dual console boat.
Scott said he would first build a plug and then strike a mould from the plug.
Scott sent me photographs during the course of the work and I understood to be consistent with the approach to be ‑
Mr Nasso later explained that the photographs were not given to him at that first meeting but were sent to him later during the course of construction of the boat. He explained that the paragraph numbering in his witness statement was in the wrong order. Up to par 40 he was referring to that first conversation he had with Mr Fury about the design and construction of a boat for Mr Nasso and said the subsequent paragraphs were referring to matters which happened later in the construction stage. He said the paragraphs were not in the correct chronological order.[75]
[75] ts 135.
Given it was Mr Nasso's statement which he had read prior to giving evidence,[76] it was concerning that Mr Nasso was, apparently for the first time, identifying errors in his statement while he was giving evidence by reading the statement. It added to the difficulty of being able to properly follow his evidence and understand the chronology of events.
[76] [70] above.
Mr Nasso went on to explain that Mr Fury told him he would be happy to construct a new boat for him and would use a new mould to build the boat. Mr Fury said he would then be able to use that mould to build other boats with the same dimensions and features.[77]
[77] ts 136.
Although Mr Nasso was then giving evidence about a conversation he had with Mr Fury in October 2013 he said that Mr Fury later sent him an email on 22 August 2014 regarding the costs of construction of the boat.[78]
[78] ts 136 - ts 137; Exhibit 1.15.
Mr Nasso then decided to sell the A'lure and Mr Fury put him in touch with a Mr Van Rongen. Mr Nasso sold the A'lure to Mr Van Rongen on 22 October 2013. Mr Nasso intended to use the proceeds of sale towards the cost of the boat that he asked Mr Fury to build for him.

Mr Fury prepares drawings and sends to Mr Nasso - 9 December 2013 - 19 December 2013

On 9 December 2013 Mr Fury sent preliminary drawings of the boat that he was to build for Mr Nasso.[79] Mr Nasso agreed that although the drawings lacked dimensions and the consoles were not the size that he wanted, the preliminary drawings essentially represented what he wanted.[80]
[79] Exhibit 1.3; ts 145.
[80] ts 146.
On 12 December 2013 Mr Fury sent further drawings to Mr Nasso.[81]
[81] Exhibit 1.4.
Mr Nasso then read par 54 of his statement as follows:
I observed that the consoles in those drawings had been evened out to the height that I wanted and the drawings now included some dimensions.
However, Mr Nasso corrected the reference to 'the height' and said that should be a reference to 'width'.[82]
[82] ts 146 - ts 147.
Mr Nasso's evidence of what he said he wanted is only relevant to explain what he later said or did. It is not relied upon for the truth of its contents.[83]
[83] ts 147.
On 14 December 2013 Mr Fury sent further drawings to Mr Nasso.[84] Mr Fury also forwarded an email chain between him and Mr Kowalski on 14 December 2013.[85] Mr Fury told Mr Nasso that Mr Kowalski had prepared the drawings.[86]
[84] Exhibit 1.5; ts 148.
[85] Exhibit 1.5; ts 148.
[86] Exhibit 1.6, ts 148.
On 16 December 2013 Mr Fury sent two emails to Mr Nasso attaching more drawings.[87]
[87] Exhibits 1.7 and 1.8; ts 148.
On 18 December 2013 there was an exchange of emails between Mr Nasso and Mr Fury about the GPS and navigation equipment that Mr Nasso wanted installed in the boat.[88]
[88] Exhibits 1.9 and 1.10; ts 149.
On 19 December 2013 Mr Fury sent to Mr Nasso an email attaching an itemised list for the proposed boat with a cost of $255,600 inclusive of GST. Mr Fury explained that he had 'allowed $18,000 worth of electronics in costs'. The later email attached a quote for the Furuno gear.[89]

Mr Fury contacts Mr Nasso - 6 April 2014

[89] Exhibits 1.11 and 1.12; ts 149.

The next communication between the parties was not until Mr Fury sent Mr Nasso an email on 6 April 2014 inquiring what Mr Nasso was 'doing with regards to a new dual console boat'. Mr Fury also observed that he had heard Mr Nasso was looking at boats from the US and asked Mr Nasso if he could let him know what he was planning to do. Mr Nasso responded, advising that he had looked at boats from the USA and also other options from Australia 'but we still like the Fury option best'. Mr Nasso then advised that he was going away in May and would not be back until November and 'we have decided because of this and some other commitments we have made to leave the boat until we return'.[90]
[90] Exhibit 1.13; ts 150.
Mr Nasso explained the reference to 'we' in his email was to himself and his wife.[91]
[91] ts 150.
In cross-examination Mr Nasso did not accept that after Mr Fury initially sent him some drawings and a quote on 19 December 2013 Mr Nasso did not contact Mr Fury until April 2014. Mr Nasso believed he would have contacted Mr Fury soon after he received the drawings and the quote. Although he could not remember when he did contact Mr Fury he believed it would have been in late December 2013 early January 2014, but he could not remember exactly when.[92] When Mr Nasso was then taken to Mr Fury's email to him of 6 April 2014[93] he reluctantly agreed that it could have been the case that he had not contacted Mr Fury after Mr Fury sent him the email on 19 December 2013.[94]
[92] ts 373 - ts 374.
[93] Exhibit 1.13.
[94] Exhibit 1.12; ts 375.
In Mr Nasso's response on 6 April 2014[95] Mr Nasso advised Mr Fury that he was considering other options and was going away and he would not be back until November and because of that had decided to leave the boat until he returned. He agreed that on the basis of his email approximately a year was going to pass before he told Mr Fury whether he wanted him to build a boat.[96]

Mr Nasso contacts Mr Fury - 21 August 2014

[95] Exhibit 1.13.

[96] ts 376.

Between May and November 2014 Mr Nasso and his wife travelled in South Africa and the USA. In August 2014 when he was still in the USA Mr Nasso decided he wanted to proceed with the boat that he had discussed with Mr Fury and sent him two text messages on 21 August 2014 informing Mr Fury that he was still looking at going ahead with the boat that he had discussed with Mr Fury and asked Mr Fury whether he was still interested in building it and what was the timeframe. He also asked Mr Fury that if he was still interested in building the boat to send updated drawings and a 'spec' sheet with the electronics they wanted. Mr Nasso also asked for Mr Fury's 'very best price'.[97]
[97] Exhibit 1.14; ts 150 - ts 151.
Mr Fury responded the following day on 22 August advising he was still keen to make the dual console boat and he would send costings and drawings and time schedules on the weekend. He advised there had been some cost increases by which he meant the increased cost of materials.[98] He also said that he could probably get underway in about four or five weeks.[99]
[98] ts 707.
[99] Exhibit 1.14.4.
Mr Nasso agreed that he accepted there would be an increase in material costs because of the time which had elapsed.[100]
[100] ts 376.
Thereafter the parties communicated by email. Mr Fury initially sent an email on 22 August 2014 to which Mr Nasso responded the following day on 23 August 2014. With his email Mr Fury enclosed an itemised specification sheet. He advised there was a price increase of $11,000 from the previous quote due to material increases. Mr Fury said the timeframe for completion was difficult to estimate, but his 'guess' was it would be around the end of February into March 2015. He advised he would be happy for Mr Nasso's input in the construction process of the dual console configuration. Mr Fury concluded his email by advising that he could send the 'Sales Agreement' if Mr Nasso wished to commence.
The price Mr Fury quoted was $266,500 inclusive of GST.[101]
[101] Exhibit 1.16; ts 151.
In his response of 23 August Mr Nasso informed Mr Fury of a number of changes he wished to make to the layout of the boat. He also reflected in red writing amendments to the quote sent to him by Mr Fury.[102]
[102] Exhibit 1.15; ts 151.
Thereafter, from 23 August 2014 to 5 September 2014 there was, in contrast to the lack of any activity after December 2013, a flurry of email correspondence between Mr Nasso and Mr Fury. By an email dated 23 August 2014 Mr Nasso told Mr Fury he wanted to make 'a few changes to the layout of the boat' and then listed 15 different items. Mr Fury responded later on the same day.[103] In his reply Mr Fury advised that he was unable to complete the boat before Christmas but the laminators could start in four weeks. Mr Fury also advised, that with the changes Mr Nasso had made, the completion date will be changed again because more work was involved. Mr Fury also advised:[104]
This is one of those jobs I do not want to rush and is difficult to estimate in time as it is a new model. Changes will inevitably be made along the way which adds to time of completion.
[103] Exhibit 1.19; ts 153.
[104] Exhibit 1.19 (page 1).
In his email to Mr Fury of 23 August 2014[105] Mr Nasso asked Mr Fury to reduce the gunnel width in the bow section. In his response of 23 August 2014[106] Mr Fury, having noted 'changes will inevitably be made along the way …' at par 2 said that he did not think it would be a good idea to reduce the gunnel width 'as there is no support for fishing and this would reduce the structural integrity of the boat'.[107]
[105] Exhibit 1.16.
[106] Exhibit 1.19.
[107] ts 356 - ts 357.
The balance of Mr Fury's responses was that the changes Mr Nasso requested could generally be done but there would be further costs incurred.
Mr Nasso later responded to Mr Fury's email by email dated 24 August 2014.[108] In red type Mr Nasso noted that even with the reduction in the gunnel width in the bow it would be wider than the back gunnel.[109] Mr Fury later responded by email later on 24 August 2014 in which he said in relation to the issue of the gunnel width:[110]
It's a bit hard to explain but that I can't change that section.
[108] Exhibit 1.20.
[109] ts 357 - ts 358.
[110] Exhibit 1.21, ts 358.
Mr Fury also advised that he was drawing up an alternative design.[111]
[111] ts 155.
Despite Mr Fury's comments, in the boat that he did build, he did reduce the gunnel width in the bow. Mr Nasso said he did not have any problem with the width of the gunnel in the bow.[112] However he did have an issue with the gunnel width at the cabin port side of the boat. In particular he wanted the window of the cabin taken to the inside of the gunnel rather than to the outside as Mr Fury had built it.[113]
[112] ts 358.
[113] ts 358.
Mr Nasso was in America when there was the exchange of email correspondence with Mr Fury from 23 to 29 August 2014. When he was asked whether they were the only communications he was having with Mr Fury were via email Mr Nasso answered:[114]
There were some conversations but not a huge amount.
[114] ts 378.
When he was pressed about whether there were any oral conversations he said that he would have to have a look at things which were discussed to be sure. He needed to look at the emails to see what was being discussed to try and prompt his mind as to whether there were any telephone conversations about it. After he looked at the emails he said that the only thing that prompted his mind was the communication about the 'transducer' which he believed was discussed in a telephone conversation. When he was then asked about whether he had previously told anyone about the telephone conversation the following exchange occurred:
I tried to as much as possible rely on the emails and I didn't try and add adaptions from telephone conversations.
BLACK, MS:   Mr Nasso, throughout your statement you refer to conversations with Mr Fury. What do you mean by you tried to just rely on    ?   During this section I'm talking about.
So why would you leave out conversations in this section but include them in a different section?   Because they were more relevant.
So you chose what you thought was relevant to put in your statement and what wasn't relevant to put in your statement, is that what you're saying?   Perhaps. Perhaps.   I'm just trying to be as honest and as straightforward as I can. You know, that phone call about the transducer had no real effect on anything except for clarification for Scott about the type of - the way it was installed.[115]
[115] ts 379.
Mr Nasso agreed that the construction of the plug was an important stage of the construction process which required effort and skill in designing and creating the boat that Mr Nasso wanted.[116]
[116] ts 382.
Mr Nasso said that the first payment he made of $50,000 was for the building of the hull and the second payment of $50,000 was for the top superstructure of the boat. It was not for the construction of the plug. Mr Fury was building and paying for the plug himself.[117] When he was then asked whether he was getting confused and whether what Mr Fury had agreed to cover was the cost of the mould and that Mr Nasso was going to pay for the plug Mr Nasso said he was not entirely sure, but did not think so, but needed to check the emails.[118] He said Mr Fury was paying for both the plug and the mould because he was going to reuse them to make other boats.[119] The following exchange then occurred:[120]
Okay. So just so I understand this, your understanding of all the things you've just said now is based on what you can recall from the emails rather than from a conversation, is that right?   Yes.
Okay. So what I suggest to you is that you were covering the cost of the plug but Scott was going to cover the cost of the mould if you got to that stage. Is it possible that's right or is it definitely wrong?   I'd have to read the email - - -
Okay?    - - - to be 100 per cent sure.
[117] ts 383.
[118] ts 383.
[119] ts 384.
[120] ts 384.
These exchanges are further examples of the unreliability of Mr Nasso's memory and his almost entire reliance upon emails, and his interpretation of them, as to what he says happened. His evidence, in part, was influenced by what he believed was relevant and was often a reconstruction on the basis of what he believed was helpful to his case.

September 2014

In an email Mr Fury sent to Mr Nasso on 3 September 2014 Mr Fury advised:[121]
[121] Exhibit 1.37.
Hi Stephen
Attached is the new design for the 28 dual console
I don't think it is feasible to make a 9.1 m it would cost me too much in moulds etc
I have changed the cabin layout to incorporate more protection for the driver and passengers
I have drawn up 2 different versions with the cabin set up in the middle of the boat on one,
And another with the cabin moved forward personally I think the one with the cabin moved forward looks better and it has a massive back deck area
The opening centre window will open upwards on gas struts but doesn't show on the plans
I can also increase the width of the cabin to the outer edge of the gunnel gaining about 200 mm 100 mm on the helm and passenger seats.
I would have to play around with it time of construction to see what I could get.
I would mock up the deck from MDF and fibreglass so I can make changes as we go
Then I would make a new mould of the deck at my expense
By pulling out the stainless steel targa and hardtop support we would increase the width of the cabin giving it extra width for seating.
Regards
Scott
The designs, or drawings, which were enclosed with the email were described as 'General Arrangement Designs'. The two different versions of the drawings referred to in the email were of a general arrangement drawing with the cabin forward 600 mm[122] and an alternative version with the cabin forward 1,000 mm.[123]
[122] Exhibit 1.37, page 3.
[123] Exhibit 1.37, page 6.
Thereafter there was further email correspondence about the designs including the position of the cabin, which Mr Nasso wanted moved forward, and the curve of the windscreen.
On 4 September 2014 Mr Fury sent Mr Nasso a new specification sheet with a total cost of $272,000 inclusive of GST.[124]
[124] Exhibit 1.41.
On 5 September 2014 Mr Nasso sent an email to Mr Fury informing him that he was interested in going ahead and that Mr Nasso had updated the 'spec' and marked it in red. He asked Mr Fury to read through the further alterations he proposed and if Mr Fury was happy, to send the rest of the paperwork and 'we can get it on the way'.[125]
[125] Exhibit 1.43.
Later the same day (at 5.28 pm) Mr Fury sent to Mr Nasso an amended 'Spec sheet' together with a 'Sales Agreement' asking Mr Nasso to sign the agreement and email it back to him. Mr Fury advised that he could 'start laying up the hull at the end of October' but because the work involved a new design it was difficult to put a firm date on the completion but he would do his best to get it done as soon as possible.[126]. The specification sheet was for a total price of $275,400 inclusive of GST.[127]
[126] Exhibit 1.44.
[127] Exhibit 1.44.
From Mr Nasso's point of view issues about the specifications for the boat remained which he addressed in an email to Mr Fury on 6 September 2014 highlighting in red the issues on the 'Spec Sheet'. Mr Nasso was in Tahiti at the time he sent that email. He asked Mr Fury '… if I sent you the $10,000 will that serve as acceptance of the agreement for now'.[128]
[128] Exhibit 1.45.
Mr Nasso said that he was stretching the budget and that his wife, Dee, was giving him a hard time and wanted to be sure that they were not:
… going to run into a whole lot of extras especially as it is a new build that is why I am trying to get this bedded down as best I can, please let me know if you think there is any other expenses we may run into.
Mr Fury responded shortly afterwards (at 5.27 pm) on the same day. He advised Mr Nasso that it would be fine if Mr Nasso sent $10,000. In response to Mr Nasso's query about whether there might be any extra costs Mr Fury advised 'I have given you total price and there should not be any other costs involved'. Mr Fury also advised that he had made adjustments to the spec sheet in response to the issues that Mr Nasso had highlighted in red.[129]
[129] Exhibit 1.46.

Although I accept that the Calderbank offer was, by comparison with the judgment awarded, a reasonable compromise, as I have explained, such an assessment cannot simply be made by adopting the judgment sum as a yardstick to measure the extent of the compromise offered. One of the difficulties faced by the defendant was that the offer of $150,000 was expressed as to be inclusive of damages and costs. The amount of $150,000 was not itemised or broken down to allow the defendant to properly assess the extent of the compromise. Although in the concluding paragraph it is indicated an allowance has been made for costs of $35,000, in relation to success on the restitution claim, the letter does not make it clear that a precise amount is allowed in the offer in respect of the relief claimed, and a separate quantifiable amount for costs. On one view, the offer, at the time it was made, did not represent a significant compromise because it sought a sum to reflect the plaintiff's claim for restitution together with an amount towards costs. It was not such a 'commercial' offer such that it reflected a significant compromise of what the plaintiff might achieve after trial.
In assessing whether the defendant's rejection of the plaintiff's offer was unreasonable, I also have regard to the circumstances that at that time the trial was only listed for five days and when the defendant assessed the offer, he no doubt had regard to the costs which would have been involved in a five day trial. He would not have contemplated the trial would endure for a further seven days over hearing days in July and November 2019. He would not have contemplated the significant costs, which no doubt have been incurred, because the trial was only part‑heard after the first five days of the trial.
Further, for a Calderbank offer to be effective it ought in my view be made well before the commencement of the trial and before significant costs which are normally incurred in the final stages of preparation for trial are incurred. In my view, in the circumstances in which this offer was made, a few days before the trial was due to commence and when significant legal costs would already have been incurred, the effectiveness and the reasonableness of a Calderbank offer is lessened. Given the timing of the offer it was not in my view unreasonable for the defendant to reject the offer.
In summary, I do not consider the defendant's rejection of the plaintiff's offer was unreasonable.

Conduct of the parties at trial

There is much finger pointing by the parties. Each blames the other for the length of the trial being prolonged. The trial occupied 12 sitting days. Except to observe that self‑evidently, by the trial having only initially being listed for hearing over five days, the parties did not give sufficient attention and consideration to the issues at trial and the time which would be required to complete their respective cases, and that neither party is blameless for the blow‑out in the length of the trial, it is otherwise unnecessary to consider the way in which the trial was conducted in determining the appropriate order as to costs. I do not consider the conduct of the defendant or his legal advisors was so unreasonable, or was of such a nature, as to justify an order for indemnity costs.
Nor do I consider that the way in which the trial bundle was prepared justifies an order for indemnity costs.
In summary, I am not persuaded the plaintiff is entitled to an order for indemnity costs based upon his Calderbank offer dated 23 January 2019.

Whether scale limits should be uplifted pursuant to s 280(2) Legal Profession Act 2008 (WA)

In the alternative, the plaintiff seeks a special costs order pursuant to s 280(2) of the Legal Profession Act 2008 (WA) (LPA). The District Court has jurisdiction to make a special costs order by reason of s 280(2) of the LPA which relevantly states:
(2)… if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following -
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
In Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2][726] the Court of Appeal explained how s 280(2) operates and the principles by which the discretion to exercise the power to increase scale limits should be guided:
[726] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) [11] - [16].
11By s 280(1) of the Act, a party's recoverable costs are confined, in effect, by the scale limits. To that extent, s 280(1) is protective of the party charged and, more generally, serves the due administration of justice by limiting the allowable scope for legal costs. Section 280(2) operates as an exception to s 280(1) of the Act. Section 280(2) of the Act operates to give the successful party the opportunity to recover those costs which have been reasonably and properly incurred where, in the court's opinion, the scale is inadequate because of the unusual difficulty, complexity or importance of the matter. To that extent, s 280(2) of the Act is protective of the successful party to the litigation and, on that account, also serves the administration of justice by facilitating, within the limits imposed by the statutory criteria, the operation of the general principle that a successful party is entitled to its costs of the litigation. Even where orders are made under s 280(2) of the Act, it nevertheless remains the task of the taxing officer to consider the reasonableness of and necessity for the work undertaken, and to make a judgment about the remuneration reasonably required.
12Before such a power will be exercised, the court must form an opinion that has two components. First, the court must form the view that the maximum amount allowable under the relevant scale item is inadequate in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the relevant cost determination. Secondly, the court must also form the opinion that the inadequacy of the costs allowable under a costs determination arises because of the 'unusual difficulty, complexity or importance of the matter'. Issues of the kind which arise are addressed as matters of impression, rather than as matters of detailed evaluation, precision or science.
13For the purposes of exercising the powers conferred by s 280(2) of the Act, it will not ordinarily be necessary for the court to determine what amount should be allowed on taxation, but only whether there is a fairly arguable case that a greater amount should be allowed than that which is allowable under the relevant determination: Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd.
14A fairly arguable case to that effect will not be established merely because a party incurred greater costs than those allowable under the relevant determination. However, depending on the particular case and all the circumstances, the fact that a party has applied significantly greater legal resources to each step in the litigation than those for which allowance is made under items of the relevant determinations, when viewed in the context of the difficulty, complexity or importance of the matter, may sustain the conclusion that there is a fairly arguable case that each of the items identified is inadequate (and thereby the amount of costs allowable in respect of the matter is inadequate) because of the unusual difficulty, complexity or importance of the matter.
15The word 'unusual' in s 280(2) of the Act qualifies only the 'difficulty' of the matter, and not its 'complexity' or 'importance'. The word 'unusual' in this context means unusual having regard to what one might describe as the usual run of civil cases determined in the court. That essentially involves the making of a value judgment by the court, having regard to the court's experience of the particular case when compared with the usual run of cases: Wainwright v Barrick Gold of Australia Limited. Also, the reference to 'importance' in this context allows the court to have regard to the significance of the issues that arose in the litigation. Significance can arise either because of the significance of the issues to the parties, or because of the significance of the issues to other prospective parties, or to the public or community generally: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq).
16In Kidd v The State of Western Australia, this court observed, with reference to Electricity Generation, that the question of unusual difficulty, complexity or importance arises in respect of the proceedings as a whole and not in respect of each individual item in the relevant costs determination. In Electricity Generation, Martin CJ observed:
[T]here are no words within [s 280(2)] which suggest that the court is required to assess the difficulty, complexity or importance of the work done in respect of each and every item in the relevant determination before exercising the power conferred by s 280(2). The natural and ordinary meaning suggested by the words used is that the 'matter' is the matter in respect of which legal services were provided.
I also refer to and adopt my reasoning in Frigger v Clavey Legal Pty Ltd [No 3]:[727]
54Special costs orders can be made either pursuant to section 280(2) of the LPA or pursuant to section 37(1) of the SCA. In either case, before the power will be exercised, the court must form the view that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate, in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the relevant costs determination. Secondly, the court must conclude that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASA 254 (S) [11]; Town of Port Hedland v Hodder [No 2] [2012] WASCA 212 (S) [14].
55The court is in a position to form the opinions required under the section as matters of impression rather than science or mathematics: Atwell v Roberts [2013] WASCA 37 (S) [15].
56The word unusual in section 280(2) of the LPA qualifies only the difficulty of the matter and not its complexity or importance: Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S) [5].
[727] Frigger v Clavey Legal Pty Ltd [No 3] [54] - [56].

Applicable scales

The plaintiff commenced this action on 4 August 2016 when the writ of summons was filed. Therefore, the relevant costs determinations are the Legal Profession (Supreme Court) (Contentious Business) Report 2016, which came in to operation on 1 July 2016, and the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018, which came into operation on 1 July 2018.
Normally, an application for special costs orders on the basis that the scale costs permitted by the relevant costs determination is inadequate is supported with a draft bill of costs comparing those costs to what is able to be claimed in accordance with the costs determination. That has not occurred in this case. However, in his affidavit filed in support of his application Mr Morris states that HHG Legal Group's electronic file management system shows that Mr Nasso has incurred legal costs and disbursements approaching $550,000.[728] Further, the costs and disbursements of Mr Nasso's former solicitors, Go To Court Lawyers, is approximately $12,000.[729] The plaintiff's legal costs and disbursements for the first five days of the trial in February 2019 exceeded $72,000.[730]
[728] Daniel Morris affidavit, par 27.
[729] Daniel Morris affidavit, pars 29 - 30.
[730] Daniel Morris affidavit, par 28.
By item 18 of the 2018 costs determination, the maximum allowable for preparation of the case for trial is $59,400. By item 21 the maximum counsel fees allowable for the first day of trial and preparation (including submissions) is $18,810. The maximum counsel fee allowable for the second and each successive day of the hearing is $4,180.
Therefore, clearly the amount of costs the plaintiff has incurred with his current solicitors far exceeds the maximum amounts which are able to be claimed under the costs determination against the defendant, if costs are awarded on a party/party basis. I am satisfied on that brief analysis alone that the amount of costs available under the 2018 costs determination is inadequate.
I then turn to consider whether the amount of costs is inadequate because of 'the unusual difficulty, complexity or importance of the matter'.

'Unusual difficulty'

The plaintiff submits the case was unusually difficult because:[731]
(a)The Defendant's reliance on evidence that could not have rationally affected the Court's determination of the issues of repudiation and termination by acceptance;
(b)The trial bundle issues;
(c)both parties' suffering from dyslexia;
(d)the trial continuing for 12 days;
(e)the trial being adjourned part-heard twice, with substantial periods in between; and
(f)the trial not progressing past 1.5 days in July because Mr Fury was unwell (relied upon without any intention to criticise Mr Fury).
[731] Plaintiff's written outline of submissions, par 62.
I do not accept the trial was unusually difficult because of the matters set out in (a) to (d) and (f) of the plaintiff's written submissions. However, I accept that because the trial was part-heard on two separate occasions, significant time would have been spent again preparing the case for trial for the resumed hearing of the trial. That further preparation time would not have been necessary had the trial been completed in the time originally allocated and had the trial not been part-heard on two separate occasions. I have earlier commented on the failure of the parties' solicitors or counsel to give sufficient consideration to the time required to complete the trial leading to a significant under‑estimation of the length of the trial. Had the length of the trial been adequately assessed and the trial listed for the 12 days it took for the trial to be completed, the trial would not, in my view, have been of 'unusual difficulty', which would have persuaded me that the scale costs were inadequate. However, because the trial was unable to be completed in the allocated time, which as I have said is, in my view, directly related to the underestimation of the length of the trial by the lawyers appearing for the parties, I am satisfied the matter was of 'unusual difficulty'. Although in recent experience trials are too often inadequately listed because of the parties' underestimation of the length of time required for the trial, leading to significant inconvenience being caused to everyone, not least the court, I am satisfied that the need for this matter to be relisted on two separate occasions to complete the trial has resulted in the matter being of 'unusual difficulty' for the purpose of s 280(2) of the LPA. However, I emphasise that merely because of the need to further list an action to complete a part heard trial arising from the action being initially inadequately listed for trial, the parties cannot expect an order will ordinarily be made increasing the scale limits.
There is no evidence of the extent to which the scale costs are inadequate because of the need for further preparation for the resumed hearing on two separate occasions. In the absence of any such evidence and doing the best I can, I allow a further day's preparation for each resumed trial hearing, that is, a further two days of preparation at scale costs based on the rate able to be charged by counsel of $4,180 each day.

'Complexity'

The plaintiff submits this matter was of complexity for the following reasons:[732]
[732] Plaintiff's written outline of submissions, pars 63 - 74.
63.The issues in this case were not confined to questions of repudiation and termination by acceptance.
64.The form of available relief also fell to be determined.
65.The Court found restitution to be the appropriate form of relief.
66.This was not without controversy. Both parties, in opening and closing argument, referred to cases where restitution had been awarded to builders and manufacturers (including shipwrights) upon a quantum meruit.
67.Neither the application nor the distinction of these authorities was by any means a straightforward exercise. For a start, it is not the builder but the owner (Mr Nasso) who in this case sought restitution.
68.Further, of all the factors recognised in the authorities as resulting in a total failure of consideration such as to give rise to a right in restitution, the most controversial has always been termination of a construction contract part-way through the execution of works under it.
69.The source of that controversy has been termed the 'rescission fallacy' in cases such as Sopov v Kane Constructions Pty Ltd [No 2] and the Victorian Court of Appeal's decision in Mann v Paterson Constructions Pty Ltd.
70.Concerns surrounding the alleged 'rescission fallacy' persisted in the jurisprudence at least until delivery by the High Court of its decision in Mann v Paterson Constructions Pty Ltd ('Mann v Paterson') in late October 2019.28 By then, the trial had reached an advanced stage.
71.Even then, the Plaintiff's position that the contact, properly construed, was capable of having totally failed despite having been party performed was not free of controversy, as the findings in Mann v Paterson were not unanimous.
72.Further complexity arose from:
(a)The fact that, before Mann v Paterson, no case had articulated the connection between concepts of total failure of consideration and rights of restitution upon termination of a part-performed building contract (which required the Plaintiff to articulate this idea from first principles);
(b)the persistent controversy surrounding the idea that a contract for works can provide for progress payments during the course of works and still be taken to have totally failed if terminated before works are substantially completed;
(c)the transferability of those concepts between cases where builders claim quantum meruit and where owners claim their money back (which requires an appreciation that restitution is not a remedy but rather, a means of mutually reversing transactions that the law regards as unjust); and
(d)the difference between construction works on land and of a physical object and its bearing upon the characterisation of a contract for works as entire or severable.
73.The last-mentioned proposition had never been addressed in any reported case which added to its complexity in the relevant sense.
74.Finally, the Court is respectfully invited to take notice that each party's written closing address was in the order of 50 pages.
Although I readily accept that the issues a trial and as addressed in the judgment were of some complexity, I am not persuaded they were of such complexity to justify an order for costs exceeding the scale costs permitted by the costs determination. Although matters of law arising from the High Court decision in Mann v Paterson Constructions Pty Ltd,[733] were of some complexity and the issues arising from that case may not have been addressed in any reported case, it must be remembered that the District Court is an intermediate court and to the extent that there has been judicial determination of those issues, the determination is limited to the facts of the case before the court and is unlikely to have any wider application.
[733] Mann v Paterson Constructions Pty Ltd [2019] HCA 32.

'Importance'

I adopt the principles I referred to in Lawrence v Province Leader of the Oceania Province of the Congregation of the Christian Brothers:[734]
[734] Lawrence v Province Leader of the Oceania Province of the Congregation of the Christian Brothers [122] - [123].
122In relation to the meaning of the word 'importance', Martin CJ in Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq) observed:
17It is common ground between the parties that the word 'unusual' qualifies only the expression 'difficulty' and does not qualify the words 'complexity' or 'importance'. Another issue was, however, raised in argument in relation to those words, and that concerns the meaning to be given to the word 'importance'. Heartlink submits that the criterion of importance cannot be met having regard to the interests of the parties only, but must, in order to be satisfied, import an element of importance to the community.
18I cannot see any reason in policy or principle why the word 'importance' should be construed in this way. If it had been the intention of the legislature to require the court to give consideration to an issue of community or public importance, then I think it would have been reasonable to expect the legislature to use words that would connote that meaning, such as the well-known phrase 'public importance' which is found in a number of other legislative provisions.
19It seems to me that by reference to 'importance' in this context, the legislature is allowing the court to have regard to the question of whether the work done was appropriate to the significance of the issues that arose in the litigation. Significance can arise either because of the significance of the issues to the parties or because of the significance of the issues to other prospective parties or to the public or to the community generally. In this case, the issues raised were of considerable significance to the liquidators in the practice of their profession, and in respect of whom serious allegations were made.
123In having regard to the importance of the matter for the purposes of s 280(2) of the LPA, and adopting the language of Martin CJ in Heartlink Ltd v Jones As Liquidator of HL Diagnostics Pty Ltd (in liq), I have regard to the significance of the issues to the parties or because of the significance of the issues to other prospective parties, or to the public or to the community generally.
Clearly this trial was of significance to each of the parties. Beyond that however, the trial was of no importance. As an intermediate court, any explanation and determination of legal principles and their application to the facts of the case are unlikely to provide any significant guidance to the wider public or business community in resolution of their contractual or business affairs. At its core, the trial concerned no more than a domestic dispute between two men over a boat.
I do not consider this matter was of such importance that it justifies the scale costs being exceeded.

Defendant's submission that each party bear its own costs

The essence of the defendant's submission is, as I understand it, that because he largely succeeded on many of the issues at trial, although ultimately failed in relation to the plaintiff's alternative claim for relief in restitution, he should have the benefit of an order for costs reflecting his success in relation to those issues, which is best reflected in an order that each party bear its own costs.
I refer to those passages in Strzelecki Holdings Pty Ltd v Jorgensen I have earlier cited,[735] in which the Court of Appeal explained that a generally successful party might not be entitled to their full costs if they failed in respect of severable or discrete issues.
[735] [13] above.
In this case, I dismissed the plaintiff's principal claim in damages for breach of contract but allowed his alternative claim for restitution. I found against the defendant and for the plaintiff in relation to repudiation in circumstances where each alleged the other repudiated the contract and in reliance upon the repudiation the non-repudiating party terminated the contract. I found the terms of the contract were as pleaded by the defendant and that it was unnecessary to make findings regarding the disputed specific terms of the contract pleaded in the statement of claim. I also found it was unnecessary to make findings about the evidence of both Mr Nasso and Mr Swarbrick concerning deviations between the built vessel's dimensions and the general arrangement drawing and whether Mr Fury was building the vessel in accordance with the terms of the contract.
In respect of the plaintiff's principal claim for relief in damages, although the defendant submits the claim was raised unreasonably or improperly, I do not accept the submission. However, this is a case where the claim for damages was, in my view, a discrete and severable issue on which the plaintiff, who was ultimately successful at trial, failed and the claim for damages added to the costs of the proceedings in a significant way. It is perhaps not so easy to clearly identify the discernible way in which the unsuccessful claim for damages added to the costs of the proceedings. Certainly much of Mr Swarbrick's evidence was relevant to the claim for damages in attempting to establish a market value for a vessel. However, some of his evidence was also relevant to whether Mr Fury had built, or was building, the vessel in accordance with the terms of the contract.
The defendant submits, and I accept, that he was put to considerable expense in instructing his own expert, Mr Kowalski, in meeting and responding to Mr Swarbrick's evidence. In the end, by agreement between counsel, Mr Kowalski's report was tendered without the need for him to be called to give evidence.
Acknowledging the warnings and caution urged by the Court of Appeal in Strzelecki Holdings Pty Ltd v Jorgenson about the apportioning of costs where a successful party has not been wholly successful, which should not be made as a matter of course, I am persuaded it is appropriate and reasonable in this case to apportion costs to recognise the plaintiff was not wholly successful in his action and that various issues in respect of which he was not successful resulted in the trial enduring for longer than it would otherwise have, resulting in additional costs having been incurred. Without undertaking any specific or detailed analysis of the extent to which those matters in respect of which the plaintiff was unsuccessful added to the length and the costs of the trial, but as a matter of general impression, I find the plaintiff is entitled to recover 75% of his costs.

Conclusion

In summary, I make the following costs orders:
1.Subject to par 2, the defendant pay the plaintiff 75% of his costs of the action, including reserved costs, to be taxed on a party/party basis.
2.The plaintiff's costs include an allowance for two extra days of counsel fee on brief in accordance with item 21(c) Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018.
3.The defendant pay the plaintiff's costs of the costs application to be taxed on a party/party basis.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

KG
Associate to Judge Herron

16 JUNE 2020

Item No.	Description	Rate	Time/hrs	Sub-total
1.	Materials: MDF wood for plug work & hull Foam cores Fibreglass Consumables (gloves, screws, sanding discs, suits, buckets, tape) Wear & tear on tools	$23,000
2.	Labour	$128,800
Scott Fury Labour	$130	14 hrs/week over 6 months	$124,800
Laminator (subcontractor)	$4,000
TOTAL	$151,800

Date of withdrawal	Amount	Interest rate	Period	Loss
5 March 2015	$187,000.00, of which $60,745.86 was consumed prior to the date of the Repudiation, interest calculated on the remainder	4.950%	477 days	$8,167.26
19 October 2015	$6,000.00	4.950%	296 days	$240.85
1 November 2015	$40,000.00	4.950%	283 days	$1,535.18
TOTAL	$9,943.29