Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 4)
[2023] ACTSC 369
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 4) |
Citation: | [2023] ACTSC 369 |
Hearing Dates: | 23-27 October 2023, 1 November 2023 |
Last submissions: | 16 November 2023 |
Decision Date: | 8 December 2023 |
Before: | Mossop J |
Decision: | 1. The proceedings are adjourned to 2pm on 12 December 2023. 2. The parties are to provide agreed or competing orders to the associate to Mossop J by 4pm on 11 December 2023. |
Catchwords: | CIVIL LAW – RESTITUTION – Claim for restitution for the value of work and labour assessed by way of a quantum meruit – contracts discharged by agreement – works partially completed – no entitlement to payment for works done under the contracts at the time of discharge – choice made by plaintiff to accept works and engage different contractor – claim for restitution allowed CIVIL LAW – ESTOPPEL – Whether entitlement to payment for works is precluded by estoppel arising from ostensible authority – first defendant held out general manager as having authority to deal on its behalf – general manager acted without authority to direct payment to second defendant – plaintiff relied on the representation and made payments to second defendant – claimant not entitled to deny general manager acted as its agent – claimant not entitled to deny mistaken payment made at its direction CIVIL LAW – ESTOPPEL – whether estoppel removed where circumstances giving rise to the estoppel have subsequently been removed by recovery of mistaken payment – detriment extended beyond payment to third party to the court proceedings that arose as a result of the payment – maintenance of estoppel warranted to the extent costs remain unpaid |
Legislation Cited: | Building and Construction Industry (Security of Payment) Act 2009 (ACT) |
Cases Cited: | Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2022] FCA 1515 Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2023] ACTCA 30 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 Equuscorp Pty Ltd v Haxton [2012] HCA 7; 246 CLR 498 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 Lloyd v Grace, Smith & Co [1912] AC 716 Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; 232 CLR 635 Mallory Technologies Pty Ltd v 3D Global Ltd [2002] NSWSC 1035 Mann v Paterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560 Morgan v Bain (1874) LR 10 CP 15 Munro v Butt (1858) 8 EL & BL 738; 120 ER 275 Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 2) [2022] ACTSC 132 Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 3) [2023] ACTSC 319 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 South Australian Harbors Board v South Australian Gas Co (1934) 51 CLR 485 Steele vTardiani (1946) 72 CLR 386 Stephen v Bromley & Son (1919) 2 KB 722 Summers v The Commonwealth (1918) 25 CLR 144 Summers v The Commonwealth (1919) 26 CLR 180 Sumpter v Hedges [1898] 1 QB 673 Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 |
Texts Cited: | G Dal Pont, Law of Agency (4th ed, LexisNexis, 2020) J Heydon, Heydon on Contract (Thomson Reuters, 2019) K Mason, J Carter, G Tolhurst, Mason and Carter’s Restitution Law in Australia (4th ed, LexisNexis, 2021) |
Parties: | Nova Builders Pty Ltd ( Plaintiff) Beno Excavations Pty Ltd ( First Defendant) Civil and Civic Corporation Pty Ltd ( Second Defendant) |
Representation: | Counsel R Arthur ( Plaintiff) C McKeown ( First Defendant) A Greinke with S Lamb (Second Defendant) |
| Solicitors Lexicon Lawyers ( Plaintiff) Joseph Tallarita ( First Defendant) Chamberlains Law Firm (Second Defendant) | |
File Number: | SC 276 of 2020 |
MOSSOP J:
Introduction
1․These reasons relate to a claim made by Beno Excavations Pty Ltd against Nova Builders Pty Ltd. They should be read with the previous reasons given in the proceedings: Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 3) [2023] ACTSC 319. These reasons adopt the same abbreviations as in the earlier reasons. The earlier reasons include the bulk of the findings of fact relevant to the claim between Benex and Nova.
2․There were three relevant contracts between Benex and Nova:
(a)a bulk cut to fill of site contract worth $350,000 plus GST;
(b)a hydraulic services contract worth $500,000 plus GST; and
(c)a contract for removal of topsoil worth $20,000 plus GST.
Benex’s claim against Nova
Benex’s Statement of Claim
3․In its Statement of Claim, Benex pleaded its claim against Nova briefly, including as a claim for “work done and materials supplied by Benex for Nova at its request”. Nova challenged the adequacy of Benex’s pleading, apprehending that there may have been a claim based upon a breach of contract. Kennett J resolved an application challenging the pleadings by concluding that there was no claim in contract and only a claim for reasonable remuneration: Nova Builders Pty Ltd v Beno Excavations Pty Ltd (No 2) [2022] ACTSC 132. Referring to the fact that counsel for Benex had eschewed breach of contract as an asserted basis for liability, his Honour said (at [19]):
However, in circumstances where counsel for Benex has pointed to these rules in order to explain what lies behind the choice of words in [2], [3] and [8], and said that this is how the words are to be read, the Court and the other parties can proceed on that basis. I therefore construe the Amended Statement of Claim as advancing only a quantum meruit claim, and consider that it is capable of being responded to on that basis. Although this makes the reference to “debt” in [10] somewhat confusing, the paragraph can be construed in the light of the explanation of [2], [3] and [8] as merely identifying the sum Benex says it is entitled to recover.
4․There was no subsequent amendment to the pleadings so as to alter the basis of the claim. Therefore, it is clear that the claim by Benex is one based on quantum meruit only.
Nova’s Defence
5․Nova admitted that from 3 March 2020 “Nova substituted Benex with Civil & Civic to complete the earthworks”. It alleged that by payment of the two invoices totalling $550,000 it had discharged its obligation to pay Benex for the work that it had carried out. In relation to the claim for work done and materials supplied, it pleaded that the contracts between Nova and Benex subsisted up until 3 March 2020 and therefore the claim “is not maintainable in law”.
Benex’s Reply
6․Benex’s Reply points to facts said to undermine the claim that payment at Mr Moseley’s direction discharged Nova’s obligation to pay Benex.
7․In relation to the denial that the claim for work done and materials supplied was maintainable in law, the Reply included an allegation that Nova had breached or repudiated the contracts by paying Civil or by substituting Benex with Civil. It also alleged that “The contract between Nova and Benex was terminated or otherwise came to an end through no fault of Benex, on that premise, Benex can claim against Nova for restitution by way of quantum meruit.”
Circumstances in which a claim for work and labour assessed by a quantum meruit is available
8․Where there was a contract in place governing the rights of the parties to that contract, quantum meruit (namely, a restitutionary claim to recover reasonable remuneration) is only available in limited circumstances. Any claim for restitution must respect the allocation of risk provided for by a contract and, to that extent, is subsidiary to a contractual claim: Mann v Paterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560 at [14], [164]; Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; 232 CLR 635 at [46], [79]; Equuscorp Pty Ltd v Haxton [2012] HCA 7; 246 CLR 498 at [26].
9․Where a contract is still in existence, a claim for restitution of a benefit conferred assessed on a quantum meruit is not available: Steele vTardiani (1946) 72 CLR 386 at 402; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256.
10․In Mann, the plurality stated (at [166]):
… upon termination for repudiation of an uncompleted contract containing an entire obligation … for work and labour done, the innocent party may sue either for damages for breach of contract or, at the innocent party’s option, for restitution in respect of the value of services rendered under the contract. (Emphasis added).
11․This statement is consistent with the judgment of Gageler J (at [65], [67], [74], [91]), who formed part of the majority. Both judgments comprising the majority in Mann recognised that this outcome (having an election for different remedies available to a claimant) was not necessarily conceptually neat, but found no sufficient reason to abandon such a long held common law position. That conclusion was subject to the limitation that the contract price should operate as an upper limit on the sum recoverable: see [105], [215].
12․If a contract contains divisible stages of work where at the completion of each stage a contractual right to payment is accrued, there is no right to restitution in relation to any completed stage. This is because the entitlement to recovery is governed by the contract. A claim for restitution is only available in relation to any uncompleted stage, for which work has already commenced but is not complete: see [105], [179].
13․A party who is in breach of contract is in a different position. Where the claimant’s breach or repudiation has led to the discharge of the contract and the conditions for payment, being either completion of the whole or some contractually defined part of the required works, have not been met, a claim for the value of work and labour done assessed on a quantum meruit is not available. There is, however, recognition that restitution is available in exceptional cases where it can be shown that there is an independent act of acceptance by a defendant of a claimant’s incomplete performance or where the defendant has acquiesced in the incomplete performance: Steele at 402‑405.
14․In some circumstances, contracts may be discharged other than by performance or breach and repudiation. Most obviously this is where a contract is frustrated, but this also includes where a contract is discharged by agreement. Only discharge by agreement is potentially relevant in the present case.
15․Where a contract is discharged by agreement, the consequences of that discharge will usually be dealt with in the agreement. However, where the discharge of the contract is inferred from conduct, the inferred agreement may not address the consequences of the discharge. In such circumstances, acceptance of a benefit by the defendant may provide a basis upon which a claim of reasonable remuneration may succeed. In Mason and Carter’s Restitution Law in Australia (4th ed, LexisNexis, 2021) (Mason and Carter), the authors say (at [1231]):
In accordance with Pavey, proof of acceptance of benefit by the defendant independently of the discharged contract establishes a prima facie claim for reasonable remuneration. If acceptance cannot be proved, subsequent enjoyment of the benefit of performance may establish an incontrovertible benefit in circumstances where retention without payment would be unjust. (Footnotes omitted).
16․If that is the case, there is no need to explore other bases upon which reasonable remuneration might be available. As illustrated by the strident criticisms by the authors of Mason and Carter of the decision of the plurality in Mann, which appeared to endorse the extension of the principle in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 from the payment of money to the performance of work, it is clear that there is plenty of room for controversy, which should be avoided if possible: see Mason and Carter at [1231].
No crystallised entitlement to part payment
17․In Mann, a majority of the court found that where a construction contract was apportioned into stages, then those stages are to be treated as divisible obligations of performance. Hence, where the owner repudiates the contract, a builder may recover the payments due pursuant to the contract that arise as a result of the completion of those stages. However, where no contractual right to payment has accrued at the time of the termination, then a claim for reasonable remuneration is available. In any claim for reasonable remuneration, the amount recoverable should prima facie not exceed a fair value calculated in accordance with the contract price or the appropriate part of the contract price.
18․In the present case the contracts were not divided into stages. However, there was entitlement to monthly payment if a claim was made during that month. Importantly, that was dependent upon an invoice being rendered. That was a contractual entitlement arising from the conversation on 8 November 2019 in which Mr Pierlot indicated that payment would be available on that basis. It was accepted as applying equally to the subsequent contracts for removal of topsoil and hydraulics. That contractual entitlement was established in a context where, by reason of the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (SOP Act), there was an entitlement to monthly payment in any event. Nevertheless, it was a contractual entitlement that operated in addition to the statutory entitlement. The entitlement to payment was contingent upon an invoice being rendered. Having regard to the fact that no invoices had been rendered by Benex (as distinct from Civil) prior to 3 March 2020, notwithstanding that substantial work had been done, there was no crystallised entitlement to part payment. Therefore, regardless of who breached the contract, there was no crystallised contractual entitlement to part payment of the contract price.
What are the alternatives?
19․There can be no doubt that the contracts between Nova and Benex came to an end at some stage on or after 3 March 2020. How the contracts came to an end is significant for the purposes of deciding whether or not restitution is a remedy available to Benex. In light of the earlier judgment of the court, it should be obvious that both Nova and Benex were innocent parties and that they were only put in a position where the potential for termination of the contracts arose as a result of the conduct of Mr Moseley and Civil. Nevertheless, having regard to the manner in which Benex has put its claim, targeted at Nova and not at Mr Moseley, it is necessary to reach a conclusion as to how the contracts between Benex and Nova came to an end.
20․In the circumstances of the present case, there appear to be three alternatives:
(a)Nova breached the contracts and Benex terminated the contracts or accepted Nova’s repudiation of the contracts; or
(b)Benex breached the contracts and Nova terminated the contracts or accepted Benex’s repudiation of the contracts; or
(c)The contracts came to an end by agreement which discharged both parties from future performance of the contracts.
Recapitulation of the facts
21․The circumstances surrounding Mr Moseley’s resignation as general manager of Benex and the dealings relevant to Civil’s claim against Nova are set out in the earlier reasons at [53]-[75]. The following additional matters are relevant to the characterisation of the relationship between Benex and Nova following 3 March 2020.
22․On 9 March 2020, Mr Pierlot put the works on hold until 16 March 2020 in order to allow the parties to resolve their dispute.
23․Later on 9 March 2020, Mr Moseley pushed for Mr Pierlot to allow Civil to do work on the site. On 10 March 2020, he requested a direction from Nova that Benex move its machines. There is no evidence that such a direction was given by Nova.
24․On 13 March 2020, Mr Bencic wrote to Nova indicating that Civil and Mr Moseley did not have any authority to take over or manage the works on the Greenway project. It also indicated that if Nova had permitted Mr Moseley to act against the interests of Benex on the Greenway project, that would involve a breach of the contracts between Nova and Benex. It asserted that any payment to Mr Moseley or otherwise at his direction would not excuse Nova’s payment obligations to Benex. It asserted that Nova owed Benex payment pursuant to the contracts for earthworks and drainage and indicated that an invoice would be forwarded shortly. It indicated that Mr Bencic had taken over Mr Moseley’s role.
25․On 17 March 2020, Mr Moseley sent another invoice to “Nova Builders / PGN Pty Ltd”. This made another claim for $275,000. Unlike the invoices dated 31 January 2020 and 18 February 2020, it made no reference to any joint venture.
26․On 30 March 2020 at 9:31pm, Mr Moseley sent a notice of suspension of work, purportedly pursuant to the SOP Act.
27․On 31 March 2020 at 5:53pm, Mr Pierlot had written to Mr Moseley pointing out that Nova had taken a neutral position, addressing inadequacies in certain indemnities offered by Mr Moseley on behalf of Civil and indicating a non-acceptance of the notice of suspension of works.
28․On 31 March 2020 at 7:50pm, Mr Pierlot emailed Mr Bencic outlining the neutral position that was taken by Nova and the intention to deposit the funds into trust. It also pointed out that Civil had issued Nova a notice suspending the works at the Greenway site.
29․On 1 April 2020 at 8:37 am, Mr Moseley wrote to Mr Pierlot, indicating that there was no prospect of funds being released as a result of “clear directions from both parties”, stating that further work will be done on the proposed indemnities and, most significantly, saying:
Civil and Civic will continue the project at this stage pending further legal advice.
30․At 7:52 pm that evening, Mr Pierlot wrote to Mr Bencic: “This is to inform you that Civil & Civic advised Nova Builders that at this stage they will continue the works”.
31․The next day, 2 April 2020, the solicitor for Benex wrote to the solicitor for Nova. The letter included:
Our client has assumed that your client no longer seeks to contract with it. Our client holds your client in breach of the Greenway work contract. Your client has commenced dealings on the Greenway Project with another entity, namely Civil and Civic, apparently in breach of our client’s contract. We enclose a copy of our client’s invoice for works completed at the Greenway Project to the date of the invoice.
32․That letter seems to have been drafted in response to the letter of 31 March 2020, but, at the end, made reference to the email communication of 1 April 2020 indicating that Civil had agreed to continue working on the Greenway project.
33․A reply to the 2 April 2020 letter was provided by Nova’s solicitors on 15 April 2020. This referred to both Benex and Civil maintaining that they have a contract with Nova, and that that Benex “elected not to stop the works performed by Civil & Civic”. In response to the allegation that Nova no longer seeks to contract with Benex, the letter said:
In your letter you say that your client has assumed that my client no longer seeks to contract with it. My client has made no decision as to which entity it contracts with. The circumstances were that my client advised your client and Civil & Civic that it wished for the works to be completed to mitigate any damages to it, Civil & Civic continued the works and your client did not object to that effectively allowing Civil & Civic to complete the works.
34․On 21 April 2020, the solicitors for Benex responded. In relation to the circumstances in which the work was continued by Civil, the letter said:
Our client always made it clear (see previous correspondence) that, in the absence of Mr Moseley, our client was not able to immediately continue the Greenway project. It therefore took no steps to hinder completion of the Greenway project. Mr Moseley played a vital role within our client’s structure. He terminated his services for our client without any notice.
35․In response to the proposition that Benex elected not to stop the works performed by Civil, the letter said that this course was taken “[b]ecause it could not then do the work and did not wish to hinder your client’s project”.
36․A response was provided on 1 May 2020 by the solicitors for Nova.
37․There was further correspondence on 6 and 12 May 2020. On 22 May 2020, the solicitors for Benex wrote to indicate that they understood that the project had now been completed. Civil sent four invoices dated 24 July 2020 which were consistent with being final invoices on the contracts save for a small retention amount.
Breach or agreement?
38․Benex alleges that Nova was in breach of the contracts. It contends, in any event, that the contracts were terminated without fault on its part. In what follows, I reach the conclusion that Nova was not in breach of the contracts, that Benex was not in breach of the contracts and, instead, the contracts were discharged as a result of an agreement reached between the parties.
Was Nova in breach?
39․The submissions made on behalf of Benex were that Nova deliberately chose to repudiate its obligations to Benex. That was articulated as follows:
Nova was keen on Civil & Civic. Mr Moseley was its Managing Director. They liked what work Mr Moseley performed. Nova failed to recognise their obligations to their contracting entity, Benex, preferring to go down the path of Civil & Civic because that was where Mr Moseley was.
…
Nova was conflicted in early 2020 by its desire to get the project completed and its desire to keep Mr Moseley on the task, regardless of who he worked for.
40․In oral submissions, the repudiation was said to arise from Nova’s acquiescence in the ousting of Benex by Civil. This was said to be because Nova liked Mr Moseley. No specific conduct excluding Benex or preventing it from carrying out the contracts was pointed to by counsel. The submission appeared to characterise the circumstance as being an enthusiasm on the part of Nova to proceed with Mr Moseley and an unwillingness on the part of Benex to interfere with the progress of the works in circumstances where Civil was seeking to take over the job.
41․Precisely what occurred on the site between 3 March 2020 and the letter dated 2 April 2020 is unclear because it was not traversed in detail in the evidence, but there is nothing to indicate any exclusion of Benex from an opportunity to continue performing its contract.
42․I am not satisfied that there was any repudiation by Nova. The most that can be said is that it permitted Civil to continue works on the site, making that clear in the email of 1 April 2020. While allowing another party to carry out the works the subject of the contracts and, thereby, impliedly preventing Benex from doing so, could be seen as a repudiation of its contracts with Benex, I do not consider that this would be an appropriate characterisation of the circumstances. For the reasons given below, I consider that the appropriate characterisation is of a mutual discharge of the balance of the contracts with Benex.
43․I reject the submission that Nova’s conduct in allowing Civil to perform works on the site was motivated by a desire to continue working with Mr Moseley and to exclude Benex from undertaking works pursuant to the contracts. Rather, it appears to be responsive to Mr Moseley’s aggressive pursuit of the opportunity to carry out the works on site and an absence (so far as the evidence discloses) of any concerted attempt by Benex to do the work by itself. Insofar as Benex relied upon the making of earlier payments to Civil as evidence of repudiation of the contract, those payments were made as a result of a mistake. Mr Pierlot made it clear in his email to the Bencics that Nova had no complaints in relation to the quality of the works and “intends to fully honour its obligation to pay for the works”. The email then indicated that Nova proposed to deposit funds in trust until further instructed by both parties or ordered by the court to release those funds. That reflected an intention to honour its contractual obligations but an uncertainty, having regard to the position in which it was placed, as to how to do so.
Was Benex in breach?
44․Similarly, it would be possible to characterise Benex as being in breach of the contracts as a result of its failure to complete the works. However, in the circumstances, I do not consider that this would be an appropriate characterisation of what occurred. Although as a matter of law, no demand was required in order to establish a breach of contract arising from a failure of performance by Benex, as a matter of fact, the absence of any demand on the part of Nova for Benex to continue performing the contracts is significant in characterising what occurred. In my view, the potential for Benex to have breached the contracts by a failure to complete the required works was removed by an agreement between the parties that no further work was required by Benex under the contracts.
Termination by agreement
45․Heydon on Contract (Heydon) at [22.140] provides:
An agreement to terminate can arise where one party has so acted as to justify a reasonable person in the position of the other in thinking that the former intended to terminate, and the latter agrees.
46․The authority cited for that proposition is Morgan v Bain (1874) LR 10 CP 15 at 22, 26. That was a case in which a contract for the supply of iron was found to have been abandoned by both parties as a consequence of the purchaser having given notice of its insolvency to the supplier, and the supplier ceasing its delivery of the next instalments of iron. It was therefore not open to the purchaser, its financial circumstances having changed, to subsequently insist on the delivery of the remaining instalments of iron that would have been required to be delivered under the contract.
47․Where there is to be the discharge of a contract by agreement and this is not done by deed, then the agreement must comply with the rules relating to formation of contracts. In particular, there must be consideration: Heydon at [22.10]. In the case of an agreement where both parties have outstanding rights under the contract and neither is in breach, then the contract can be terminated if each party promises to release the other from future performance: Heydon at [5.490].
48․In addition to circumstances such as that in Morgan where an agreement may be inferred from conduct, an agreement may be inferred from mutual abandonment: Heydon at [22.150]. Two examples of cases involving abandonment which gave rise to claims for restitution were Summers v The Commonwealth (1918) 25 CLR 144 at 151-152 (affirmed in Summers v The Commonwealth (1919) 26 CLR 180) and DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 434.
49․In my view, the factual circumstances outlined above are best understood as involving an agreement to terminate that can be inferred from conduct. Mr Moseley’s deceitful and self-interested conduct had put Nova in a position where it did not know whether Civil or Benex’s claim was correct. Nova was obviously very anxious to have the works proceed promptly because they were essential to a construction project worth tens of millions of dollars. Benex was in a position where it had lost its general manager, did not have detailed knowledge of the project and was not keen to impede the progress of works done for Nova’s benefit.
50․It is in this context that the parties’ conduct must be assessed. The agreement to discharge each other from any further performance of the contracts should be taken to have arisen because Nova did not seek that Benex fulfil the balance of its obligations under the contracts and Benex did not insist on its entitlement to continue the work under the contracts and to be paid for that work. As a consequence, there was consideration moving from both sides sufficient to create a binding agreement. The agreement discharging the need for compliance with the balance of the contracts did not address the question of payment for the work done by Benex under the contracts prior to termination. That was clearly a matter upon which the parties could not have agreed and was simply left unresolved. That lack of agreement about past conduct did not affect the agreement that no further performance under the contracts would be required.
51․Having regard to the period over which the correspondence occurred, the discharge of the contracts could be seen as having occurred between 3 March 2020 and 1 May 2020. The substantial effect of the position taken by both parties was that no performance was required by either of them after 3 March 2020. That appears to be the appropriate date to treat the contracts as having been discharged, even if the correspondence leading to that conclusion only occurred over the subsequent eight weeks. Whatever the date upon which the parties were discharged from future performance of the contracts, I do not consider that the invoice sent on 2 April 2020 amounts to a claim made pursuant to the contracts. It is not styled as such, and did not claim on the basis of completion of a stated percentage of the works. As a consequence, it was not sufficient to create a crystallised entitlement to payment pursuant to the contracts which would be enforceable as a debt and hence exclude any entitlement to payment of reasonable remuneration.
Is restitution available?
52․Mason and Carter at [1233] identify, as a category of circumstances in which restitution may be available, cases where a contract is discharged for reasons other than frustration. Then, rather unhelpfully, the text provides: “Whether the plaintiff is entitled to payment, and whether the payment obligation is contractual or by way of restitution, will of course depend on the circumstances.” There are then a series of examples given, none bearing close analogy to the present circumstances.
53․However, the present case can be resolved on the basis that Benex completed the works at Nova’s request, and Nova accepted the benefit of the work done up until 3 March 2020: Pavey at 227; Lumbers at [39], [49], [79], [111]. The availability of quantum meruit in circumstances where a partially completed contractual obligation is discharged by agreement but has conferred a benefit on the receiving party is consistent with Mann. The authorities also recognise that, even in a case where the claimant has breached the contract, a claim for reasonable remuneration may be available where the benefit has been accepted by the defendant. The most prominent example of that is Steele v Tardiani (1946) 72 CLR 386. It is useful to consider that case and two authorities referred to in it, Munro v Butt (1858) 8 EL & BL 738; 120 ER 275 at 752-753; 280 and Sumpter v Hedges [1898] 1 QB 673.
54․Munro involved a contract for work on two houses which was to be completed by a specified date and done to the satisfaction of a named surveyor. The contractual claim failed because there was no evidence of any certificate from the surveyor. The question that was argued was whether there was evidence of mutual abandonment of the contract and the substitution of a new implied contract to pay for the work done or material supplied according to their value that ought to have gone to the jury. The plaintiff relied upon the defendant having resumed possession of the houses and enjoyed the fruits of his labour. Lord Campbell CJ, delivering the judgment of the court, drew a distinction between an implied contract arising from the acceptance of, for example, a piece of furniture, and work on a building on land. His Honour posed the question (at 753-754; 280):
But, using the term [“taking possession”] in a popular sense, what is he, under the supposed circumstances, to do? The contractor leaves an unfinished or ill constructed building on his land; he cannot, without expensive, it may be tedious, litigation, compel him to complete it according to the terms of his contract; what has been done may shew his inability to complete it properly; the building may be very imperfect, or inconvenient, or the repairs very unsound; yet it may be essential to the owner to occupy the residence, if it be only to pull down and replace all that has been done before. How then does mere possession raise any inference of a waiver of the conditions precedent of the special contract, or of the entering into a new one? If indeed the defendant had done any thing, coupled with the taking possession, which had prevented the performance of the special contract, as if he had forbidden the surveyor from entering to inspect the work, or if, the failure in complete performance being very slight, the defendant had used any language, or done any act, from which acquiescence on his part might have been reasonably inferred, the case would have been very different. Here there was nothing of that kind; the reliance of the plaintiff was simply on the defendant’s possession.
55․Sumpter involved a contract to build two houses and stables for a specified sum. The plaintiff did part of the work and received payment of part of the price. He then told the defendant that he had no money and he could not go on with the work. He was found to have abandoned the contract. The defendant then finished the buildings and, in doing so, used certain building materials which the plaintiff had left on the ground. The plaintiff recovered the value of the material so used but nothing in respect of the work which he had done upon the buildings. The decision relied upon Munro for the principle that unless the building owner does something from which a new contract can be inferred to pay for the work already done, the plaintiff cannot recover on a quantum meruit. AL Smith, Chitty and Collins LJJ held that there was no entitlement to recovery beyond that which had been ordered. Chitty LJ pointed to an earlier case in which it had been held that where a building has been erected upon land, the mere fact that the defendant remains in possession of the land is not evidence upon which an inference of a new contract can be founded. That was to be distinguished from a circumstance where a new contract could be inferred by the retention of goods. Collins LJ recognised that if the plaintiff had merely breached the contract rather than abandoned or repudiated it, then there may have been an entitlement to sue upon a quantum meruit on the ground that the defendant had taken the benefit of the work done. His Honour said (at 676):
There are cases in which, though the plaintiff has abandoned the performance of a contract, it is possible for him to raise the inference of a new contract to pay for the work done on a quantum meruit from the defendant’s having taken the benefit of that work, but, in order that that may be done, the circumstances must be such as to give an option to the defendant to take or not to take the benefit of the work done. It is only where the circumstances are such as to give that option that there is any evidence on which to ground the inference of a new contract. Where, as in the case of work done on land, the circumstances are such as to give the defendant no option whether he will take the benefit of the work or not, then one must look to other facts than the mere taking the benefit of the work in order to ground the inference of a new contract … The mere fact that a defendant is in possession of what he cannot help keeping, or even has done work upon it, affords no ground for such an inference. He is not bound to keep unfinished a building which in an incomplete state would be a nuisance on his land.
56․Steele was a case involving the cutting of timber for firewood by Italian internees during the Second World War. The trial judge found that under the contract the timber was to be cut into six foot lengths, six inches in diameter. Some of the wood was so cut. However, other wood was cut to between six and 15 inches in diameter. Because some of the timber did not comply with the contractual requirement that it be six inches in diameter, it was not possible to recover under the contract. Dixon J (with whom Latham CJ agreed at 394 and McTiernan J agreed at 408) said (at 402):
To recover under a quantum meruit for wood split to substantially different widths from that required, the plaintiffs must show circumstances removing their right to remuneration from the exact conditions of the special contract. For, if no more appears, the fact of such a contract, open and, to that extent, unperformed, excludes any implied obligation on the part of the defendant to pay a fair and reasonable remuneration for the work done by the plaintiffs in cutting his timber to dimensions outside those allowed by the contract.
57․His Honour adopted the statement of Scrutton LJ in Stephen v Bromley & Son (1919) 2 KB 722 at 727, that it was where “the benefit of the work is taken” that a contract to pay for the work may be implied separate from the requirements of the express contract. Dixon J said that “‘taking the benefit of the work’ means that the defendant has done so in the exercise of some choice that was actually open to him”. He referred to the “chief example” of where work is done on a building and the comments of Lord Campbell CJ in Munro referred to above. He also referred to the passage from Sumpter quoted above.
58․The defendant in Steele sought to bring himself within the scope of principle in Munro and Sumpter, arguing that he had no choice but to accept the incorrectly cut timber that was on his land. Dixon J said that the defendant’s position would be a strong one if he made it clear to the plaintiffs before they departed that they must complete their contract by splitting the wood to the specified width. However, the defendant’s evidence that he had done so was not accepted by the trial judge. Dixon J said that it was necessary to proceed on the basis that he did not express to the plaintiffs his insistence upon or desire for the specified width. Upon the evidence, it was open to conclude that reliance upon the diameter was an afterthought. His Honour continued (at 405):
In such circumstances, it would be proper to treat the failure in complete performance as possessing little importance to the defendant and as acquiesced in by him, with the consequence that the subsequent sale of the firewood might rightly be regarded by the learned judge as a taking of the benefit of the work and so, as involving either a dispensation from precise performance or an implication at law of a new obligation to pay the value of the work done.
59․Given that the conclusion reached by the primary judge was consistent with this view of the evidence, the attack upon the obligation to pay a fair and reasonable rate in respect of the timber actually cut failed.
60․The shift from implied contract theory to an analysis based upon unjust enrichment theory does not undermine a restitutionary claim based upon acceptance of a benefit. The acceptance of a benefit provides a basis for implied contract and also provides a basis for a conclusion that the imposition of an obligation to pay is appropriate in order to avoid unjust enrichment.
61․In the present case, there was civil engineering and construction work that was partially completed. Having regard to Munro and Sumpter, that is obviously not a promising start for a contention that an uncompleted contractual obligation that has been terminated should give rise to an entitlement to restitution.
62․However, in contrast to Steele, I have concluded that the contracts were terminated without breach because neither side insisted on further performance so as to allow the work to be completed. The position is, therefore, that substantial excavation and other work had been carried out by Benex prior to the date when the obligations for further performance under the contracts were discharged. For present purposes, that will be assumed to be 3 March 2020. So far as contractual performance prior to that date is concerned, Benex delivered the services required. The delivery of those services conferred a benefit on Nova, namely the partially complete excavation and hydraulics works. As at 3 March 2020 Nova had a choice. It could choose not to accept the partially completed works and insist upon completion of those works by Benex in accordance with the contract. Alternatively, it could accept the partially completed work performed by Benex and allow Civil to continue them to completion. It chose the latter course and thereby accepted the benefit of the work that had been done by Benex, notwithstanding that it had not been completed.
63․As pointed out in Lumbers at [79], cases in which work is done at the request of another are “archetypal cases in which it may be said that a person receives a ‘benefit’ at the ‘expense’ of another which the recipient ‘accepts’ and which it would be unconscionable for the recipient to retain without payment”. However, it is in an essential step in considering a claim for reasonable remuneration assessed on a quantum meruit to ascertain how the claim fits with the contract entered into between the parties. The problem for the claimant in Lumbers was that there was no contract and allowing restitution would be inconsistent with the contract that was in place.
64․The imposition of liability to make restitution in the current circumstances would not be such as to upset an allocation of risk reflected by the parties in their contracts. The parties have not addressed in their contracts a risk which would affect the appropriateness of restitution. Had the circumstances ending the contracts arisen somehow from insolvency, then the contracts, which permitted interim claims to be made, would be relevant to any claim for restitution. However, the contracts did not address termination by mutual agreement in circumstances such as those that existed, nor did they indirectly cast light on the availability of restitution.
65․In those circumstances, notwithstanding the failure to deliver the completed works, Benex is entitled to reasonable remuneration for the works that it carried out.
Quantum
66․In assessing the quantum of the claim for reasonable remuneration the appropriate starting point is the market rate of the services provided by the plaintiff: South Australian Harbors Board v South Australian Gas Co (1934) 51 CLR 485 at 501; Mann at [92]. The amount is not assessed by reference to the plaintiff’s loss, but rather the value of the defendant’s gain. Therefore, the appropriate measure is of the value of the services provided by the plaintiff. When there is a market for contractual services, the value of a requested benefit is the amount that a reasonable person would have charged to satisfy the defendant’s request: Mason and Carter at [1416]. That is subject to the proviso that the value of the services rendered cannot exceed the contract price: Mann at [105], [215], except possibly in very narrow circumstances which do not arise here: Mann at [216].
67․The claim made by Benex was largely based on the terms of the invoice which it sent on 2 April 2020. That invoice was said to be all of the expenses incurred by Benex in undertaking the works up until 3 March 2020.
68․The amount of the invoice was $772,767.84. The amount claimed in the current proceedings was $666,726.96. The difference is $106,040.88. The bulk of that difference was as a result of Nicol Contracting withdrawing invoices totalling $93,742 and instead invoicing Civil. The difference between the $106,040.88 and the $93,742 is not explained by the evidence. The effect of the evidence was that the whole of the reduction was explained by the lack of any claim for payment from Benex by Nicol Contracting.
69․The components of the tax invoice were:
(a)Benex staff wages on site: $101,238.80;
(b)Benex Office Staff: $16,800;
(c)Benex Project Manager: $26,880;
(d)Benex Vehicle/Track/Machinery: $299,650;
(e)Materials and Sub Contracts: $257,947.42; and
(f)GST: $70,251.62.
70․Fundamentally, the evidence did not address the appropriate method of valuation of the work. It measured the inputs made by Benex rather than the market value of the outputs which reflected the value of the services rendered to Nova.
71․Further, even if the appropriate measure was the value of inputs rather than the value of outputs, there were a number of difficulties with the calculation of those amounts. The most significant were:
(a)There appeared to be substantial overlap between the amounts claimed for salary or wages for Benex staff and amounts claimed as the costs of “wet hire” for vehicles on the site. That is because a significant component of the costs of a “wet hire” were the labour costs of a driver, yet, at least in most circumstances, the machinery would be operated by a Benex staff member whose time had been costed separately.
(b)The machinery was charged out as if it was being hired to the job. For each day on-site, the machines were charged out for a 10-hour day, even if they were not used for that time or, indeed, any period approaching that time.
72․Fortunately, in the present case, there is good evidence of the market value of the services. That evidence is provided by the quantum of the contracts for those services and the claims wrongly made by Civil which identified the proportion of the works that had been completed up to approximately the relevant date.
73․The total amount claimed under the contracts in the two invoices dated 31 January 2020 and 18 February 2020 was $550,000. Although there was a period of work done following 18 February 2020 and prior to 3 March 2020, I infer from Mr Pierlot’s evidence of his payment practices that the 18 February 2020 invoice would have covered some additional work beyond that actually completed as at 18 February 2020. As a consequence, while there is the potential for there to be some additional work done prior to 3 March 2020 not covered by the invoices, that would be a relatively minor amount and, having regard to the state of the evidence, not realistically quantifiable.
74․So far as the work covered by the invoices is concerned, there is no reason why those amounts should not be treated as reasonable remuneration for the work done. They reflect a price for the overall jobs based on market rates and the nature of the work was such that the percentage of completion reflected its value. There is no reason not to accept the contractual price as being a reasonable price for the work that was done.
75․There is one final complication. In addition to Nicol Contracting, another subcontractor of Benex, Canberra Earthmoving, entered into some arrangement with Civil which led to it not making any claim on Benex for work done on the project. There was evidence of some agreement between Mr Gaffey of Canberra Earthmoving and Mr Moseley. A company related to Mr Gaffey then became a shareholder in Civil. However, the amount of work done by Canberra Earthmoving or the amount of any entitlement to payment which was not ultimately borne by Benex is not disclosed by the evidence. Had there been such evidence, it would have been possible for Nova to argue that the value of the services performed were, to that extent, not at Benex’s expense. However, in the absence of that evidence, there is no basis upon which to reduce the reasonable remuneration payable to Benex.
76․Accepting that the market value of the benefit obtained by Nova was $550,000, but reducing that by the amount not required to be expended by Benex because of the absence of any claim against it by Nicol Contracting, the value of the services rendered is measured as $456,258 ($550,000 - $93,742).
Ostensible authority
77․A further pleaded answer to the claim for reasonable remuneration is that Nova denies that it has not paid Benex for the work. It relies upon the fact that Mr Moseley held himself out, and was held out by Benex, as the general manager of Benex with power to enter into contracts on behalf of Benex and give directions with respect to payments to, or for the benefit of, Benex. It contended that, by making payments to the account identified by Mr Moseley, Nova had discharged its obligation under the contracts to pay for the work done by Benex.
78․A claim based upon ostensible authority is ultimately a claim in estoppel arising from the actions of the estopped party in putting a person in a position where they may perform the conduct or make the representation relied upon by the party asserting estoppel: G Dal Pont, Law of Agency (4th ed, LexisNexis, 2020) at 20.7-20.12. Thus, the claim may be articulated as being that Benex put Mr Moseley in the position of general manager where he was apparently entitled to act with full authority over matters relating to Benex’s performance of the Greenway contract, and hence is estopped from asserting that the payment that he directed was not a payment to, or for the benefit of, Benex.
79․If a claim for reasonable remuneration is otherwise available, then the ostensible authority of Mr Moseley may provide an answer to Benex’s claim to the extent of the payment mistakenly made by Nova to Civil. I say “may” rather than “would” because the argument needs to be considered in the context of the success of the claim by Nova against Civil relating to the mistaken payments.
80․On this point, I accept that agency by estoppel is established. Mr Moseley made a representation to Nova that he was authorised by Benex to make, namely that he was the general manager. Consistent with his actual authority, he conducted himself, in his dealings with Nova, on the basis that:
(a)he had authority to enter contracts on behalf of Benex and to do so without reference to anyone else;
(b)he was responsible for managing Benex’s interests on the Greenway site; and
(c)he had authority to engage subcontractors.
81․All of these matters were matters which amounted to a representation made, with the authority of Benex, that Mr Moseley had authority from Benex of such a breadth that it extended to making claims for payment from Nova. There was nothing which would indicate, so far as Nova was concerned, that there was a limitation on Mr Moseley’s authority to give a payment direction. I accept Mr Pierlot’s evidence that he relied upon the fact that the invoices were sent by the general manager of Benex in making the payments to Civil.
82․Nova submitted that the delivery of the invoices amounted to a representation that payment in accordance with them would discharge Nova’s contractual obligation. It then says that, having relied upon that representation, it was not open to Benex to assert to the contrary: Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
83․This submission goes beyond Nova’s defence, which is focused on Mr Moseley having been held out by Benex as general manager and as having the power to give directions as to payment. The issue is whether Benex is entitled to deny that the payment direction was given by its agent and hence submit that it was not binding upon it. There may be little practical difference as to the outcome as between this formulation and that contended for by Nova, but the representation limited to the effectiveness of the payment direction is more closely tied to the conduct of Benex in holding out Mr Moseley as its general manager.
84․Given that Nova acted to its detriment by paying the invoices provided by Mr Moseley, Benex is estopped from denying that the invoices issued by Mr Moseley, including the direction to pay Civil, were done with the authority of Benex, and hence binding upon it.
85․It is true, as Benex points out, that there were a series of indications on the invoices that were sent and the accompanying emails which may have caused the recipient to question the invoices. However, it has to be recognised that the invoices were crafted by by Mr Moseley so as to trick Mr Pierlot into believing that there was a joint venture involving the companies set out on the invoice and that Civil was acting as some form of agent of the joint venture to receive payment. Notwithstanding possible signs that something was amiss, Nova was in fact deceived as to the authority of Mr Moseley to give the direction that he did. That is sufficient to create agency by estoppel.
86․The situation is relevantly similar to the case of Lloyd v Grace, Smith & Co [1912] AC 716. That is a case in which the managing clerk of a firm of solicitors committed fraud against a widow by tricking her into signing a conveyance to him of two properties. The firm was found liable for the conduct of the fraudster. Lord Macnaghten, having reviewed the authorities, posed the ultimate question as follows (at 738):
Who is to suffer for this man’s fraud? The person who relied on Mr Smith’s accredited representative, or Mr Smith, who put this rogue in his own place and clothed him with his own authority?
87․I conclude that it is Benex, who unfortunately placed its trust in Mr Moseley, rather than Nova, the direct victim of his trickery, that must bear the consequences of his conduct. In other words, I am satisfied that as Benex put Mr Moseley in the position that he was, with the apparent authority that he had, Nova was entitled to rely upon his direction as being a direction for the benefit of Benex when that was not the case.
88․The estoppel arises from the unconscionability of departing from the representation made by Benex as to Mr Moseley’s authority in circumstances where, by relying on that representation, Nova has changed its position and suffered detriment.
89․If that detriment is or will be removed, then the basis for an estoppel is removed. The potential for the removal of the estoppel exists because in the earlier judgment Nova was found to be entitled to return of the $550,000 paid to Civil. That took the form of a set off of $462,003.93 and a judgment on its counterclaim of $87,996.07. It recovered the $462,003.93 paid into court. The issue is, therefore, in circumstances where the detriment arising from the representation giving rise to the estoppel has subsequently been wholly or partly removed, does this remove the estoppel?
90․The stance adopted by Nova was to contend that the detriment that it suffered extended beyond the money that it paid to Civil. While the immediate consequences of that deception have largely been removed by the allowance of the set off of the $462,003.93 and the success of Nova’s counterclaim against Civil, Nova contended that the detriment that it suffered extended beyond the misdirected payment to the court proceedings in which it was engulfed. Most obviously, the detriment included the costs of the current court proceedings. Those proceedings initially involved an attempt by Nova to interplead and then proceeded by separate claims made by Civil and Benex against Nova. Nova claimed that until the costs detriment of those proceedings is removed, then it is entitled to rely upon the estoppel.
91․I accept that the costs of the present proceedings arose as a result of the change of Nova’s position constituted by the payment of $550,000. They arose because Nova sought to determine to whom the payment ought to have been made, and then to recover the mistaken payment. The proceedings also resulted in it having to defend the current claim.
92․Therefore, to the extent to which it has not recovered the costs that it has incurred in these proceedings, it has suffered detriment warranting maintenance of an estoppel against the denial of Mr Moseley’s authority.
93․However, it also submitted that the costs of certain other proceedings were part of the detriment that it suffered as a consequence of Mr Moseley’s payment direction. It alleges that it should be entitled to the costs of “security of payments proceedings between Nova and Civil which would not have occurred if Benex had pursued Civil and Moseley directly”.
94․Those proceedings were identified by Nova as:
(a)SC 377/2021;
(b)SCA 30/2021;
(c)ACD 47/2022;
(d)SC 18/2023; and
(e)ACTCA 30/2022.
95․These proceedings arose out of adjudication proceedings initiated by Civil to recover amounts arising from its performance of the works on the Greenway site after it took over the work on the site. They were attempts by Civil to enforce payment as a result of two adjudication decisions by an adjudicator appointed under the SOP Act.
96․Proceedings SC 377 of 2021 involved an application to prevent Civil from enforcing an adjudication decision made on 31 August 2021 awarding Civil $462,003.93.
97․Proceedings SCA 30 of 2021 involved an application for leave to appeal from the same adjudication decision. These proceedings were heard with SC 377 of 2021. Nova was successful in having the determination set aside and, had that not been the case, Nova would have been successful in having enforcement of the orders stayed.
98․ACD 47 of 2023 and SC 18 of 2023 were proceedings brought by Civil seeking to challenge a second decision of the adjudicator made on 31 August 2022. The proceedings in the Federal Court were transferred to the Supreme Court (Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2022] FCA 1515) and the proceedings in the Supreme Court are still on foot.
99․The reference to ACTCA 30 of 2022 appears to be mistaken. It should be a reference to ACTCA 43 of 2022 which led to a judgment with a medium neutral citation Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2023] ACTCA 30. ACTCA 43 of 2022 was an appeal from the decision of McWilliam AsJ setting aside the adjudicator’s first decision and remitting it for redetermination. Civil discontinued its appeal and Nova’s cross appeal was dismissed.
100․The costs incurred in these proceedings do not arise directly from the representation as to Mr Moseley’s authority. They do arise indirectly from the mistaken payment because that gave rise to the decision of Nova to pay the money for work done after 3 March 2020 into court rather than to Civil. However, the decision to engage Civil and the decision to pay money into court are not matters arising from the representation as to Mr Moseley’s authority. Rather, they arose from the decision to contract with Civil and hence incur liabilities to that entity as distinct from continuing the contracts with Benex. The costs of those proceedings should not be characterised as detriments suffered by reason of the representation as to authority, but instead are detriments arising from dealing with Civil and Mr Moseley.
101․Treating the case as one in which there is an equitable entitlement that defeats Benex’s claim, Nova recognised that it would be open to the court to uphold Nova’s defence based upon estoppel upon terms. It pointed to the decision of Palmer J in Mallory Technologies Pty Ltd v 3D Global Ltd [2002] NSWSC 1035. In that case, his Honour had upheld a claim of estoppel by representation that would have permitted further time for a payment to be made. Adopting the principle that he who seeks equity must do equity, his Honour made the grant of relief conditional upon the underlying payment being made.
102․Consistent with the finding that I have made, the detriment suffered by Nova which gives rise to the estoppel may be summarised as follows:
(a)initial detriment: payment of $550,000 to Civil;
(b)detriment alleviated by earlier judgment and payment out of court of $462,003.93;
(c)initial detriment remaining:
(i)$87,996.07 awarded in the counterclaim but not yet paid; and
(ii)actual legal costs of Nova in these proceedings.
103․Detriment will remain to the extent that the amount the subject of the counterclaim is not reasonably recoverable from Civil and to the extent that the actual legal costs of Nova are not reasonably recoverable from a party to the proceedings or a third party.
104․As will be apparent, there is potential for the detriment to be reduced or eliminated as a result of recovery by Nova in accordance with the judgment in the counterclaim and recovery pursuant to any costs orders that are made. That means that the ultimate level of detriment, and hence the entitlement to an estoppel, has the potential to vary over time.
105․In my formulation of the detriment, I have referred to amounts “not reasonably recoverable”. The detriment is expressed in that manner because the potential for an estoppel for the benefit of a commercial party should only exist to the extent that it conducts itself in a reasonable manner. If the extent of detriment was not formulated by reference to reasonable conduct, there would be no incentive on the part of Nova to act reasonably in attempting to reduce its detriment by recovery from other parties. It appears to me that compelling reasonable commercial conduct as an element of determining the extent of an estoppel is appropriate.
106․As a matter of principle, Benex is entitled to payment of reasonable remuneration in the quantum assessed ($456,258) to the extent that the detriment caused by Nova’s mistaken payments to Civil and the financial cost of the current litigation is removed. Adopting the model provided in Mallory Technologies, that could be done by an order dismissing the current claim by Benex upon Nova giving an undertaking to pay to Benex such of the $456,258 as remains after deducting the balance of the $550,000 that has not yet been recovered ($87,996.07) as well as the costs incurred in conducting the current proceedings. The difficulty is that it would be hard to formulate a “once and for all” undertaking sufficiently precise to be enforceable yet sufficiently flexible to cover the various circumstances that might arise.
107․A better approach may be to make a declaration in more general terms, reflecting the qualified entitlement of Benex and then give liberty to apply for any further or other order necessary to give effect to the entitlements reflected in the declaration. By that means it may be possible to achieve an outcome which is both specific enough to define the entitlements of the parties but also flexible enough to cover the various circumstances that might arise.
108․A declaration to the following effect would be consistent with what has been said above:
(a)Declare that Benex is entitled to be paid by Nova $456,258 less:
(i) any amount of the $87,996.07 the subject of its counterclaim against Civil not reasonably able to be recovered from Civil; and
(ii) the costs actually incurred by Nova in conducting these proceedings which are not reasonably able to be recovered by Nova from another party to the proceedings or a third party.
109․If such a declaration was made, then it would be necessary to address questions of interest and costs and the potential for the grant of liberty to apply for any further order required to give effect to the declaration made.
110․However, it is appropriate that I hear Benex and Nova as to the terms of the orders that should be made in light of these reasons.
Orders
111․The orders of the Court are:
1.The proceedings are adjourned until 2pm on 12 December 2023.
2.The parties are to provide agreed or competing orders to the associate to Mossop J by 4pm on 11 December 2023.
| I certify that the preceding one hundred and eleven [111] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop. Associate: Date: 8 December 2023 |
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