Nova Property (Aust) Pty Ltd v Bria Constructions Pty Ltd - [2024] SASC 10

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeal: Civil)
NOVA PROPERTY (AUST) PTY LTD v BRIA CONSTRUCTIONS PTY LTD
[2024] SASC 10
Judgment of the Honourable Justice Stein
2 February 2024
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - THE CONTRACT - CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - PERFORMANCE OF WORK
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - THE CONTRACT - CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS - DISCHARGE OF CONTRACT ON DEFAULT AND LIKE GROUNDS
Appeal against judgment entered by a Magistrate in favour of the respondent for $64,682.19 inclusive of pre-judgment interest, dismissal of the appellants cross claim, and costs.
In early 2020, the appellant entered into a cost plus contract with the respondent to complete building works on a residential property owned by the appellant (“the contract”).
The appellant paid seven progress claims (“PC1-7”) rendered by the respondent. The parties fell into dispute over the eighth progress claim (“PC8”). A formal letter of demand was issued by the respondent on 13 November 2020 and a letter of termination sent on 19 November 2020. A final progress claim (“PC9”) was rendered on 26 November 2020 constituting costs said to be payable to the date of, and arising out of, the termination of the contract.
The respondent instituted an action in the Magistrates Court against the appellant primarily seeking judgment for $67,069.53 as a debt due. The appellant denied the allegations and filed a cross claim asserting substantial defects in the work and breaches of contract by the respondent.
The Magistrate concluded that the respondent was entitled to be paid the amount of $58,802.19 including the balance of a minimum builder’s fee in accordance with the contract. The Magistrate determined that the appellant’s cross claim failed in its entirety as it did not establish that the work was defective or that the respondent had breached the completion date under the contract.
The appellant appeals against the judgment on four grounds:
1.The Magistrate erred in finding that it was open to the respondent to terminate the contract.
2.The Magistrate erred in finding that the respondent was entitled to succeed in a claim for amounts claimed in PC9 and/or by way of a minimum builder’s fee.
3.The Magistrate erred in her assessment of the respondent’s entitlements to items claimed in PC8 and PC9.
4.The Magistrate erred in dismissing the appellant’s cross claim.
Held (allowing the appeal):
1.A component of PC8 was not payable by the appellant and accordingly included a demand for payment of an amount to which the respondent was not entitled. Non-payment by the appellant did not enliven the contractual termination provision for reasons including that the appellant did not fail to pay a “progress payment due” within the meaning of the contract.
2.The Magistrate erred in increasing the amount payable in PC9 to award the minimum builder’s fee.
3.The Magistrate did not err in the assessment of the respondent’s entitlements to specific items claimed in PC8 and PC9.
4.While termination by the respondent based on non-payment of amounts to which the respondent was not entitled was wrongful, no amount of damages are recoverable by the appellant.
5.Judgment was not entered until 20 February 2023 and an extension of time to appeal is not required but would have been granted if required.

Building Work Contractors Act 1995 (SA) ss 29, 32, 34, 35; Magistrates Court Act 1991 (SA) s 40(1); Building Work Contractors Regulations 2011 (SA) reg 16; Uniform Civil Rules 2020 (SA) Part 7, referred to.
Algons Engineering Pty Ltd v Abigroup Contractors Pty Ltd [1997] NSWSC 478; Allphones Retail Pty Ltd v Hoy Mobile Pty Ltd (2009) 178 FCR 57; ASIC v Atlantic 3-Financial (Aust) Pty Ltd [2007] 2 Qd R 399; Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99; Burke and Riversdale Road Pty Ltd v Gemini Investments Pty Ltd [2003] VSC 33; Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402; Daysea Pty Ltd v Watpac Australia Pty Ltd (2001) 17 BCL 434; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; Etlis v New Age Constructions (NSW) Pty Ltd [2005] NSWCA 165; Fitzgerald v FJ Leonhart Pty Ltd (1997) 189 CLR 215; Fox v Percy (2003) 214 CLR 118; Green v Sommerville (1979) 141 CLR 594; H Lundbeck A/S v Sandoz Pty Ltd; CNS Pharma Pty Ltd v Sandoz Pty Ltd (2022) 399 ALR 184; Hadley v Baxendale (1854) 156 ER 145; Idameneo (No 123) Pty Ltd v Ticco Pty Ltd [2004] NSWCA 329; Jireh International Pty Ltd t/as Gloria Jean’s Coffee v Western Exports Services Inc [2011] NSWCA 137; JPA Finance Pty Ltd v Gordon Nominees Pty Ltd (2019) 58 VR 393; Lee v Lee (2019) 266 CLR 129; Leeda Projects Pty Ltd v Zeng (2020) 61 VR 384; Machado v Underwood [2016] SASCFC 65; Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 479; Minerology Pty Ltd v Sino Iron Pty Ltd (No 6) (2015) ALR 1; MLW Technology Pty Ltd v May [2005] VSCA 29; Modern Engineering (Bristol) Ltd v Gilbert-Ash (Northern) Ltd [1974] AC 689; Morgan Equipment Co v UMW Corp SDN BHD [2002] NSWCA 193; Morgan v S & S Constructions Pty Ltd [1967] VR 149; Pitt v Commissioner for Consumer Affairs [2021] SASCA 24; PJ Nash Pty Ltd v Food and Beverage Australia Ltd [2021] SASCA 86; Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259; Re Media Entertainment & Arts Alliance; Ex parte Hoyts Corp Pty Ltd (No 1) (1993) 178 CLR 379; Salta Constructions Pty Ltd v St George Bank, a Division of Westpac Banking Co Ltd (2014) 45 VR 245; Willis Australia Ltd v AMP Capital Investors Ltd [2023] NSWCA 158, considered.

NOVA PROPERTY (AUST) PTY LTD v BRIA CONSTRUCTIONS PTY LTD
[2024] SASC 10
Magistrates Appeal: Civil
STEIN J.
Overview

Bria Constructions Pty Ltd succeeded at trial against Nova Property (Aust) Pty Ltd on a claim for payment of amounts relating to building works performed by Bria on a residential dwelling owned by Nova.
This appeal by Nova is concerned with the proper interpretation of the contract between the parties and factual findings made by the Magistrate.
While I agree with many conclusions reached by the Magistrate, I have formed different views on aspects of the interpretation of the Contract as a consequence of which the appeal must be allowed.
Background
In early 2020, Nova entered into a cost plus contract (the “Contract”) with Bria to conduct remedial work and complete unfinished building work on a residential property owned by Nova. At the time the parties entered into the Contract the dwelling was partly complete and Nova had claimed that works performed by previous builders were defective. The Contract did not specify the works required to complete the dwelling. Bria engaged a number of subcontractors and work was performed to progress the dwelling towards completion.
Seven progress claims were rendered by Bria and paid by Nova. However, in some cases, Mr Charles Figallo, the managing director of Nova, expressed dissatisfaction at the time of payment. For example, Mr Figallo said he would pay progress claim 7, but complained about matters including delays, and stated he would not pay any further accounts until the work was complete and approved by Mr Giuseppe (Joe) Bria. In further correspondence, Mr Figallo reiterated that he would not pay progress payments unless subcontractors had completed their work.[1]
[1] Trial exhibit A1 – Joint Tender Book at 241.
From August 2020, Bria sent Nova multiple requests for renewal of a bank guarantee. Bria also at various times sent to Nova written requests for decisions about specified matters in relation to the works, such as approval for kitchen cupboards and floors.[2]
[2] For example, Trial exhibit A1 – Joint Tender Book at 397.
On 31 October 2020, Bria issued progress claim 8 for a total amount of $45,363.74 with attached supporting invoices. On 5 November 2020,[3] an amended version of progress claim 8 (“PC8”) was sent to Nova. Nova did not pay PC8.
[3] Bria Constructions Pty Ltd v Nova Property (Aust) Pty Ltd [2023] SAMC 4 (“Magistrate’s reasons”) at [197].
On 2 November 2020, Mr Figallo sent an email to Mr Bria stating that no further payments would be made until the house was finished. He referred to being continually “ripped off” and complained that “hardly anything had happened” on the house.[4] On 3 November 2020, Mr Figallo sent to Bria an email asking for explanations about PC8 and saying he would pay for scaffolding. Mr Figallo referred to the tiling having exceeded the quoted price; said the front door was not finished and that he was concerned about water and sand coming into the house. In the email Mr Figallo made other complaints and stated that he was not paying any more bills until the work was done and Bria had signed off on, and taken responsibility for, the works. The email stated that if Bria did not assure Mr Figallo that the house would be finished in 10 weeks, he would have lawyers terminate the contract and claim damages as Bria had exceeded a reasonable date of completion and work remained unfinished and unrectified.[5]
[4] Trial exhibit A1 – Joint Tender Book at 278.
[5] Trial exhibit A1 – Joint Tender Book at 279-280.
In early November 2020, Bria sent a number of emails to Mr Figallo to say, among other things, that the home would be complete in approximately 10 weeks once Bria had the kitchen. Bria said Mr Figallo had failed to sign joinery drawings necessary for the cabinet maker,[6] and that since April, Mr Figallo had not signed off on the drawings for the cupboards, causing the practical completion date to be dramatically extended.[7] Bria stated that the invoices included in the progress claim were in line with quotes and were as agreed.[8] Mr Figallo responded by asserting that Bria was in breach of contract.[9] Further email correspondence was sent between the parties in which Bria stated that Mr Figallo had failed to provide instructions and Mr Figallo reiterated that no more money would be paid until they could go through the work, Bria had assured him they could finish the job and Bria had explained why they were not doing the correct quotations.[10] In further correspondence on 6, 9 and 10 November 2020, Mr Figallo made more assertions of failures by Bria, including assertions of defective work and failures to progress the works, lack of supervision, that quoting was not being done properly and he was being “blatantly ripped off”.[11] Mr Figallo asserted many items of work could be finished off regardless of the state of the kitchen which he said was being used as a stalling tactic. Mr Figallo foreshadowed speaking to lawyers about terminating the contract and making claims for damages. Mr Figallo reiterated that no further payments would be made until a particular contractor had finished all the work and it was signed off.[12] Bria’s response referred to Mr Figallo’s failures to accept quotes or provide instructions and urgently needing Mr Figallo’s cooperation with decisions and selections when required to move forward and complete the home.
[6]     Trial exhibit A1 – Joint Tender Book at 405.
[7]     Trial exhibit A1 – Joint Tender Book at 406.
[8]     Trial exhibit A1 – Joint Tender Book at 281-282.
[9]     Trial exhibit A1 – Joint Tender Book at 281.
[10] Trial exhibit A1 – Joint Tender Book at 281.
[11] Trial exhibit A1 – Joint Tender Book at 299-305.
[12] Trial exhibit A1 – Joint Tender Book at 299-305.
During this period of time Mr Figallo met with Mr Bria and Mr Hansford, Mr Bria’s grandson, to discuss the various issues.[13]
[13] Trial exhibit A1 – Joint Tender Book at 308; 310; 315-319.
On 13 November 2020, Bria sent to Nova a letter (“letter of demand”) which stated as follows:[14]
[14] Trial exhibit A1 – Joint Tender Book at 307.
We are writing to you in circumstances where:
1.You have stated by email dated 10 November 2020 that you are refusing to pay “1 more dollar until the house is finished”;
2.Progress Claim No. 8 dated 31 October 2020 in the sum of $44,202.62 is now overdue for payment; and
3.You have failed, despite request from us to provide replacement security (in the form of a bank guarantee) to us as required by the Special Conditions of the Contract.
Each of the matters stated in points 1-3 above are in default of your obligations under the Contract.
We now require that you fix those defaults within five (5) days of today (that is, on or before 18 November 2020), by:
1.Providing us with a bank guarantee or similar security with a face value of $60,000.00 (and no expiry date); and
2.Attending to payment in full of Progress Claim No. 8 in the sum of $44,202.62.
If you do not attend to the above within the timeframe stated, we confirm our intention to either (at our discretion) cease work or cancel the Contract.
We trust this will not be necessary and that you will fulfil your obligations in accordance with the Contract as executed.
Nova did not pay PC8, in part or in full, and did not provide the requested guarantee.
After receiving the letter of demand from Bria, Mr Figallo reiterated previous complaints, asked Bria not to enter the site without his permission until Bria could assure him it would finish the job and have it signed off in compliance and stated Mr Figallo would pay for work done satisfactorily. Mr Figallo stated that he considered Bria had removed itself from the job and Nova would be claiming damages.[15] In a further email, among other things, Mr Figallo asked if Bria still wanted to resign and if so, requested a resignation in writing.[16] Bria responded to say that it was more than able to complete the project and offered to meet to go through the issues.[17] Mr Figallo stated he could not meet on the appointed day as he had another builder on site to see if that builder was able to take over.[18] Bria reiterated that they were ready and willing to complete the project as long as Nova complied with its obligations under the Contract to make timely payments and provide security.[19] Mr Figallo responded to assert that Bria was trying to force him to terminate so Nova would either be taking the project over or appointing a new builder and would be “coming after you for damages”.[20] Mr Figallo’s email stated that he was giving Bria one more chance to get the job done or get off the site.[21]
[15] Trial exhibit A1 – Joint Tender Book at 308.
[16] Trial exhibit A1 – Joint Tender Book at 309.
[17] Trial exhibit A1 – Joint Tender Book at 311.
[18] Trial exhibit A1 – Joint Tender Book at 311.
[19] Trial exhibit A1 – Joint Tender Book at 312.
[20] Trial exhibit A1 – Joint Tender Book at 313.
[21] Trial exhibit A1 – Joint Tender Book at 311-313.
A further meeting occurred on 18 November 2020.
On 18 November 2020, Mr Figallo wrote to Bria making further allegations about the failure to complete the job and asserting work was defective. Mr Figallo asserted he would have Bria’s sign removed from the fence and Bria was not to enter the premises. He gave a deadline of 23 November 2020 for Bria to provide an assurance it could complete the job within a reasonable timeframe and have completed work inspected and signed off. Mr Figallo’s letter stated that before allowing Bria back on site, Nova would require Bria to provide a number of things including a bank guarantee to the value of $100,000. Mr Figallo asserted that if the terms were not complied with within five days, “you can consider yourself terminated and I will be claiming damages”.[22]
[22] Trial exhibit A1 – Joint Tender Book at 319.
On 19 November 2020, Fenwick Elliot Grace, solicitors for Bria, wrote to Nova referring to Bria’s letter of demand. The solicitor’s letter (“termination letter”) stated as follows:
That notice required you to show cause as to why our client should not terminate its contract with you and requested that you remedy your breaches of the Contract, by:
1.Providing replacement security in the sum of $60,000; and
2.Paying the sum of $44,202.62 (comprising Progress Claim number 8),
within five business days. That is, on or before 18 November 2020.
You have failed or refused to do so. No payment has been forthcoming and no replacement security has been received.
In light of your ongoing, fundamental breaches and failure to comply with your obligations under the relevant Contract, our client now exercises its rights pursuant to cl 18.3 and informs you that it is cancelling the Contract effective immediately.
Your obligation to pay our client the outstanding sum of $44,202.62 together with any other costs incurred as a result of your wrongdoing continues. We will write to you shortly setting out what those costs are and note that in the absence of payment being received, our client intends to bring a claim against you in a court of competent jurisdiction. If that becomes necessary, our client will also be seeking interest and cost payments from you.
On 26 November 2020, Bria’s solicitor sent to Mr Figallo progress claim 9 (“PC9”), setting out the costs said to be payable to the date of, and arising out of, the termination of the Contract. The cover email noted that PC9 together with PC8 was payable within seven days. PC9, for a total of $22,866.91, was comprised of six individual items together with a builder’s fee $10,662.14 alongside which was a note “the contract authorised a minimum fee of $52,500 plus GST”.
On 9 December 2020, Bria registered a Worker’s Lien over the property.
On 21 December 2020, Bria issued proceedings in the Magistrates Court seeking, among other orders, judgment for $67,069.53 as a debt due.
Nova denied the allegations and filed a cross claim asserting substantial defects in the work and breaches of contract by Bria.
After a trial, the Magistrate entered judgment in favour of Bria in the sum of $64,682.19 inclusive of pre-judgment interest and dismissed Nova’s cross claim. Nova was ordered to pay Bria’s costs on a standard costs basis calculated on the cross claim value, nominally fixed at $184,207.50, with an uplift of 20 percent but without disturbing existing specific orders in Bria’s favour.
Grounds of appeal
The grounds of appeal are as follows.
First ground of appeal
The first ground of appeal is that the Magistrate erred by finding it was open to Bria to terminate pursuant to the contract in circumstances where:
1.The termination was based upon a failure to provide a further bank guarantee which was neither a contractual requirement nor a basis for termination under the contract.
2.PC8 was invalid in whole or in part as it claimed entitlements to which Bria was not entitled.
3.Bria was not ready, willing and able to perform its ongoing contractual obligations under the Contract and thereby was disabled from exercising any contractual right of termination in that:
a.Bria was in breach of its obligations under the Contract including to hold compulsory insurance (and relatedly, the Magistrate erred by ruling that Nova was not entitled to elicit evidence directed to that matter at trial); and
b.Bria evinced by its conduct an unpreparedness to perform unless Nova paid PC8 and complied with the demand for a replacement bank guarantee which demand it was not entitled to make.
4.Bria did not plead or establish an entitlement to terminate at common law.
Second ground of appeal

The second ground of appeal is that the Magistrate erred in finding that Bria was entitled to succeed in a claim for amounts claimed in PC9 and/or by way of a minimum management fee in that:
1.The claim in respect of PC9 was a claim in debt and no claim in damages was properly pleaded or run.
2.Bria was not entitled to terminate and its purported termination was an act of renunciation or wrongful repudiation which disentitled it from making liquidated contractual claims.
3.Alternatively, if, contrary to ground 1, Bria was entitled to terminate, it was not entitled to pursue liquidated contractual claims, and, in any event, was not entitled to the minimum management fee in those circumstances.
Third ground of appeal
The third ground of appeal is that the Magistrate erred in her assessment of Bria’s entitlements to items claims in PC8 and PC9 in that:
1.The Magistrate ought to have found that Bria was not entitled to recover for work affected by substantial (non-trivial) defects, or had not been the subject of quotations for approval as required by the Special Conditions of the Contract.
2.In assessing the evidence regarding the quality of the work, the Magistrate erred in giving weight to, and accepting certain evidence, and giving no or little weight to other evidence. However, this aspect of the third ground of appeal was not pursued.
Fourth ground of appeal
The fourth ground of appeal is that the Magistrate erred in dismissing Nova’s cross claim in that:
1.The Magistrate ought to have proceeded on the basis Bria engaged in a wrongful repudiation of the Contract.
2.The Magistrate ought to have found there were material breaches of contract by Bria.
3.The Magistrate ought to have proceeded to consider and make findings for Nova in respect of claims of loss in relation to wrongful termination, delay and defective work as pleaded in the cross claim. However, during the appeal, Nova pursued only specific aspects of loss associated with delay.
Extension of time
The notice of appeal sought an extension of time insofar as one was needed in relation to the orders made on 19 January 2023 on the basis that the final orders and the quantum of judgment were pending and not made until 16 February 2023.
Costs
Nova’s notice of appeal did not address costs. In submissions, Nova contends that if the Magistrate’s judgment is to be interfered with, the factual substratum upon which the Magistrate exercised the costs discretion will have changed, necessitating the discretion be revisited. Secondly, Nova contends there was a denial of procedural fairness to Nova in that no submissions were advanced by Bria that the Magistrate should proceed on the basis of fixing costs with reference to the nominal amount of the cross claim or with a 20 percent uplift.
Principles on appeal
An appeal from a Magistrate to the Supreme Court in a civil matter is governed by s 40(1) of the Magistrates Court Act 1991 (SA) and Part 7 of the Uniform Civil Rules 2020 (SA) (“UCR”). An appeal pursuant to s 40 is an appeal by way of rehearing.[23] In conducting an appeal by way of rehearing, the Court must conduct a real review of the evidence at trial and form its own view. While not shying away from the requirement to weigh conflicting evidence and draw inferences where appropriate, the Court should afford due weight to any advantage of the Magistrate in having observed the witnesses at trial.[24] This advantage is relevant where factual findings are made which are likely to have been influenced by impressions formed by the Magistrate about the reliability or credibility of witnesses as a result of having seen and heard them give evidence.[25] An appellate court may reach a different conclusion where a finding is contrary to incontrovertible facts or uncontested testimony or is otherwise glaringly improbable or contrary to compelling inference.[26]
[23] Machado v Underwood [2016] SASCFC 65 at [90] (Kourakis CJ and Nicholson J).
[24] Pitt v Commissioner for Consumer Affairs [2021] SASCA 24 at [114]-[118] (Doyle, Livesey and Bleby JJA); Machado v Underwood [2016] SASCFC 65 at [44] (Kourakis CJ and Nicholson J); Fox v Percy [2003] HCA 22 at [23]-[29]; (2003) 214 CLR 118 at [23]-[29] (Gleeson CJ, Gummow and Kirby JJ).
[25] Pitt v Commissioner for Consumer Affairs [2021] SASCA 24 at [117] (Doyle, Livesey and Bleby JJA); Fox v Percy [2003] HCA 22 at [23]; (2003) 214 CLR 118 at [23] (Gleeson CJ, Gummow and Kirby JJ).
[26] Pitt v Commissioner for Consumer Affairs [2021] SASCA 24 at [118] (Doyle, Livesey and Bleby JJA); Fox v Percy [2003] HCA 22 at [29]; (2003) 214 CLR 118 at [29] (Gleeson CJ, Gummow and Kirby JJ).
Magistrate’s reasons and findings
On 19 January 2023, the Magistrate delivered reasons for her conclusion that Bria succeeded on its claim and Nova’s cross claim failed in its entirety. The Magistrate concluded that while Bria did not establish any contractual entitlement to a number of amounts claimed in PC8 and PC9, it was still entitled to the amount of $58,802.19. The Magistrate’s reasons stated that before judgment was entered, the Magistrate would hear the parties as to the calculations of the judgment amount and in respect of interest and costs.
The Magistrate determined that:
1.Bria was entitled to be paid the amount of $38,693.56 claimed in PC8.
2.Bria was entitled to cancel the Contract for non-payment of amounts due under PC8.
3.Bria was entitled to be paid a final amount of $20,108.63 in respect of PC9 including the balance of a minimum builder’s fee in accordance with the Contract.
4.Nova’s cross claim failed in its entirety as Nova did not establish that Bria’s work was defective or that Bria breached the completion date under the Contract.
The Magistrate largely accepted the reliability of the witnesses called by Bria. The Magistrate preferred the evidence of Mr Sutherland, a cabinet maker, in relation to issues concerning cabinets based on his responsibility for cabinetry works. The Magistrate considered she should approach Mr Figallo’s evidence with caution and concluded his evidence was generally unreliable. She described him as overly emotive and argumentative. The Magistrate stated that Mr Figallo’s behaviour at times was disruptive to the conduct of the trial and his evidence was plainly coloured by self-interest. The Magistrate also noted that aspects of Mr Figallo’s evidence appeared inconsistent with contemporaneous records.
The Magistrate considered what was meant by the expression “for work actually completed” in the Contract. The Magistrate stated:[27]
[27] Magistrate’s reasons at [77]-[78].
In my view, a reasonable person would understand the expression ‘for work actually completed’ to mean that there is no right to claim a payment for work where, objectively assessed, the work is so materially defective, that it could not be said that the work had, as a matter of fact, been done or completed. The rights and obligations of the parties under the contract in respect of payments must be read in a context that includes that:
·the payment provisions link the Builder’s entitlement to make a progress claim to the value of work actually completed by the Builder;
·the contract is for residential building work. It did not include independent certification provisions for a certifying architect or other building professional to review or certify the validity of progress claims or the quality of work completed as might be included in a contract for commercial building work;
·there is scope for disputes arising in relation to allegedly incomplete and defective works and the contract provides a dispute resolution procedure;
·the contract also provides for a maintenance period of 3 months commencing on the Date of Practical Completion during which the owner may require the Builder to rectify work they believe is defective;
·there is no clause in the contract that says that the claim for a progress payment is only to be paid by the Owner after the resolution of any dispute about incomplete or defective works. Absent an express clause to that effect, it is unlikely to have been intended objectively by the parties. Nor is such an intention consistent with a commercial interpretation of the contract.
Therefore, taking the contract as a whole, the obligation to pay a progress claim by the due date does not depend on the assent or agreement of the Owner that the works performed are ‘actually complete’ or without defect.
The Magistrate concluded that a reasonable person would understand that Bria was entitled to add the builder’s fee to the costs of any work performed by a subcontractor under its supervision irrespective of whether Bria paid those costs itself or was contractually liable to pay those costs to the subcontractor.[28]
[28] Magistrate’s reasons at [86].
The Magistrate addressed the question whether Bria’s contractual right to payment of a progress claim was conditional upon Bria having obtained a written quote for the work and Nova’s approval of the quote before the work was done. The Magistrate considered that a reasonable person would understand, among other things, that: [29]
1.Before any particular work was carried out the scope was to be agreed between Mr Bria and Mr Figallo.
2.Bria was required to obtain quotes with sufficient detail of agreed works and cost for Nova’s approval.
3.Neither Special Condition 2 nor Special Condition 7 of the Contract required the agreed scope or quote to be in writing.
4.Whether a written quote was required in respect of any work verbally agreed with Mr Figallo depended upon the particular circumstances and an objective assessment of those circumstances to avoid making commercial nonsense or working commercial inconvenience.
[29] Magistrate’s reasons at [92].
Among other matters, the Magistrate noted the objective surrounding circumstances at the time of the Contract included that there were defective works requiring remediation and an absence of an express contractual provision which made payment of the progress claim conditional on Nova’s receipt of a written quote for all of the work included in the claim and Nova’s approval of the quote. Accordingly, the Magistrate concluded:[30]
Therefore, I do not accept that the validity of a progress claim was contingent on each claimed item being the subject of a written quote approved by Mr Figallo. The nature of the Works required some flexibility to attend to the ‘bits and pieces’ and any additional, minor remedial work as it arose on an agreed charge-up basis. To find otherwise would mean that Mr Figallo would not have been able to efficiently request alterations to quoted works or summarily approve additional minor works without causing the subcontractors to stop work and prepare a revised quote (assuming they were prepared to do so). Nova’s construction of the contract would potentially result in an uncommercial outcome and be inconsistent with the purpose and object of the contract.
[30] Magistrate’s reasons at [94].
The Magistrate rejected Nova’s contention that Bria’s contractual right to payment of a progress claim was conditional upon all of the sums claimed being “legitimate” claims for payment under the Contract. In essence, Nova’s contention was that if the progress claim was invalid by reason of one illegitimate claim it was invalid as a claim for all sums included in it. In the absence of an express provision stating otherwise, the Magistrate considered a reasonable person would understand the payment provisions to mean that Nova would only be liable to pay the amounts included in the progress claim that were properly claimed by the builder in accordance with the Contract.[31] The Magistrate considered that to construe the Contract otherwise would be inconsistent with the purpose and the object of the Contract, that is, for the building work to be carried out with reasonable diligence and for Bria and subcontractors to be paid for such work by progress payments as and when work was completed.[32]
[31] Magistrate’s reasons at [109].
[32] Magistrate’s reasons at [110].
The Magistrate noted that on Nova’s construction, even a minor discrepancy in amounts claimed would deprive Bria and subcontractors of substantial amounts otherwise payable and potentially adversely impact their cashflow.[33] The Magistrate noted that if subcontractors were not paid on time, they would be unlikely to return to complete further works thereby causing construction delays.[34]
[33] Magistrate’s reasons at [111].
[34] Magistrate’s reasons at [111].
The Magistrate considered each of the disputed individual amounts in PC8. Nova asserted four amounts which totalled $30,350.88 were not properly claimed:
·Tectonic Tiling - $19,003.60.
·Tiana Joinery - $3,190.00.
·Fifteen percent builder’s fee on the two items above - $3,329.04.
·Fifteen percent builder’s fee on Sutherland Joinery 2019 invoice - $5,008.24.
The Magistrate observed that Nova did not expressly plead a failure to obtain quotes as part of its defence in relation to certain allegations. However, the Magistrate was satisfied Bria was on sufficient notice of the requirement to prove that quotes were submitted and approved for each amount claimed in accordance with the terms of the Contract in order to prove its own case at trial.[35]
[35] Magistrate’s reasons at [117].
In relation to the amounts concerning Tectonic Tiling, Bria accepted that Tectonic had not provided a separate written quote for seven items of additional works included in invoice 2110. Bria relied on Mr Figallo’s acceptance of a tiling quotation which provided that “all additional tiling repair and making good works to be at a charge up rate of $85 per hour plus GST plus materials”. Mr Figallo accepted he knew additional works would be charged at the hourly rate.[36] The Magistrate accepted the evidence of the tiler, Mr Aaron Genesin, that each of the individual items in invoice 2110 were first discussed with Mr Figallo and Mr Figallo gave authority to go ahead and do the work.[37] Mr Genesin’s evidence included that Mr Figallo did not ever complain about the hourly rate; he did not usually provide quotes for variations to the original scope of works; at no stage was Mr Genesin asked for separate quotes in respect of the additional works and he may not have known how many hours were required because of uncertainty about the exact nature and the extent of the work required.[38]
[36] Magistrate’s reasons at [149].
[37] Magistrate’s reasons at [151].
[38] Magistrate’s reasons at [151].
The Magistrate concluded that work the subject of Tectonic Tiling invoice 2110 was additional tiling repair and make good works approved by Mr Figallo at the agreed rate of $85 per hour.[39] The Magistrate concluded there were no substantial defects and the amounts together with the builder’s fee on those costs were properly claimed in PC8.[40]
[39] Magistrate’s reasons at [163].
[40] Magistrate’s reasons at [163].
In relation to the Tiana Joinery invoice, the Magistrate found that the front door and frame was supplied as ordered; there was no evidence of any substantial defect and the issues which arose with the door arose after delivery and before the front door and frame were fully installed.[41] The Magistrate preferred the evidence of Bria’s witnesses over Mr Figallo’s evidence. The Magistrate accepted the evidence of the Bria witnesses that Mr Figallo was present when the front door was delivered, he was satisfied with the door which he inspected while on the delivery truck and an issue arose a few days after the door was fitted when Mr Figallo expressed concerns to Mr Bria about sand sitting on the rebates between the horizontal slats of the front door.[42]
[41] Magistrate’s reasons at [168].
[42] Magistrate’s reasons at [169]-[170].
The Magistrate considered the evidence established that Tiana Joinery provided a detailed specification which Mr Figallo approved; he gave the go ahead for installing the front door by email dated 24 September 2020; Mr Figallo inspected the door at the time of delivery and did not object or raise any concerns about its design but changed his mind several days later.[43] The Magistrate considered the issue about build up of sand and salt in the grooves between the horizontal slats of the door was a design issue which was separate to the seal requirements for the door.[44] The Magistrate considered the front door was removed as a consequence of Mr Figallo changing his mind about the design.[45] The Magistrate was not satisfied that there was a substantial defect and rather the completion of the installation of the front door and frame was overtaken as a consequence of Mr Figallo changing his mind about the design of the door.[46] The Magistrate concluded that Tiana Joinery manufactured and supplied the joinery in the design and style approved by Mr Figallo and was entitled to be paid the sum of $3,190 which monies were properly claimed together with the builder’s fee on those costs in PC8.[47]
[43] Magistrate’s reasons at [175].
[44] Magistrate’s reasons at [175].
[45] Magistrate’s reasons at [175].
[46] Magistrate’s reasons at [180].
[47] Magistrate’s reasons at [181]-[182].
The Magistrate did not consider that the 15 percent builder’s fee amounting to $5008.24 on the invoice from Sutherland Joinery dated June 2019 was properly included in PC8.[48]
[48] Magistrate’s reasons at [194].
The Magistrate concluded that Bria was entitled to add the builder’s fee to the cost of any work performed by a subcontractor under its supervision and the issue was whether Bria supervised all of the works included in the Sutherland invoice. The Magistrate preferred Mr Sutherland’s evidence about when work was performed and concluded that Bria did not establish that it supervised all the work the subject of the invoice. The Magistrate considered the evidence did not permit her to fairly assess what work was supervised by Bria in respect of the invoice and accordingly that Bria did not establish it had a contractual right to payment of the amount $5,008.24.
Accordingly, of the PC8 amounts claimed, the Magistrate concluded that Bria had a contractual right to payment of $38,693.56.[49]
[49] Magistrate’s reasons at [195].
The Magistrate considered that Bria was entitled to cancel the Contract under cl 18 for the non-payment of amounts properly claimed in a progress claim based on the conclusion that Bria was entitled to be paid $38,693.56 claimed in PC8.[50] The Magistrate observed that Nova did not pay any amount of PC8 and the Contract was cancelled upon Bria exercising its rights pursuant to cl 18.3 for non-payment of amounts due and payable and claimed in PC8.[51]
[50] Magistrate’s reasons at [196].
[51] Magistrate’s reasons at [197].
The Magistrate stated:[52]
In view of the above findings, it was not strictly necessary for me to determine whether Bria could have cancelled the contract by reason only that Nova declined to replace the original $60,000 bank guarantee that had expired. However, if I am wrong about Bria’s entitlement to cancel the contract for nonpayment of amounts claimed in PC8 that were due and payable, I do not consider that Bria was entitled to exercise its right under clause 18.3 to cancel the contract based on a breach of a term requiring Nova to replace the expired security. Failure to provide security was not a default identified in clause 18.1.
[52] Magistrate’s reasons at [198].
The Magistrate did not accept Nova’s submission there was no contractual basis for the issue of PC9.[53] The Magistrate observed that pursuant to cl 19.2, Nova was obliged to pay Bria the actual costs of the works as at the date of cancellation, the costs of materials or goods ordered which Bria was obligated to accept, and the reasonable cost of removal of items from site. The Magistrate addressed each of the items included in PC9. The Magistrate allowed amounts on account of some invoices included in PC9 but did not accept that some amounts included in PC9 were amounts which Bria was entitled to charge.[54]
[53] Magistrate’s reasons at [199]-[200].
[54] Magistrate’s reasons at [203]-[224].

PC9 included an amount of $10,662.14 as the balance of the minimum fee of $52,500 plus GST. While cl 19.2 did not refer to the minimum fee, Bria relied on Special Condition 1 of the Contract as entitling it to receive the minimum fee. The Magistrate concluded:[55]
In my view, a reasonable person would have understood SC1 to mean that the minimum fee was payable upon cancellation of the contract by the Builder by reason of the Owner’s default. The parties agreed to a minimum contract Price in circumstances where the exact scope of works had not been agreed upon. To the extent of any inconsistency, Special Conditions were to take precedence over other agreed terms (clause 3.3 of Detailed Matters). Payment of the minimum fee was a reasonably foreseeable consequence of a default by Nova which entitled the Builder to cancel the contract under clause 18.3 before Practical Completion.
I have therefore concluded that Bria is entitled to the balance of the minimum fee agreed in SC1 in the amount of $17,055.24 (GST inclusive) after adjustment based on my earlier findings on the total amount payable in respect of PC8 and in relation to the Builder’s Fee claimable on accepted items in PC9.
[55] Magistrate’s reasons at [227]-[228].
For those reasons, the Magistrate concluded Nova was liable to pay $58,802.19 to Bria on account of PC8 and PC9.
The Magistrate considered Nova’s cross claim and concluded Nova did not establish on the balance of probabilities that the items of work carried out by Bria or subcontractors under its supervision was defective.[56]
[56] Magistrate’s reasons at [240].
The Magistrate considered whether there was an agreed date of completion in the Contract and, if so, whether Bria breached the completion term. The Magistrate said there was no express contractual provision that Bria bring the work to practical completion within four months.[57] Item B.3 of the Schedule stipulated approximately four months as the period for completion. The Magistrate considered the evidence as a whole, including contemporaneous documents, did not establish that Bria was in breach of the completion term.[58] The Magistrate considered the evidence demonstrated Mr Figallo was largely to blame for delays in completion including in failing to provide timely instructions, changing his mind about the scope of works and ongoing disputes with the previously contracted tradespeople about defective or incomplete works.[59] The Magistrate accepted evidence to the effect that work needed to be completed in a particular sequence and stated that evidence remained essentially unchallenged.[60] One significant example given of Mr Figallo’s failure to provide timely instructions related to the kitchen cabinets. The Magistrate preferred the evidence of Bria’s witnesses over that of Mr Figallo,[61] including evidence to the effect that at no stage until the Contract was cancelled had Mr Figallo approved final drawings for the kitchen.[62] The Magistrate accepted that Mr Figallo knew Mr Sutherland would not make the cabinets until Mr Figallo had signed off on the drawings and he had been informed it would take about 10 weeks after the kitchen cabinets were installed to reach practical completion.[63] The Magistrate also noted that Mr Figallo acknowledged that in about June 2020, until he got the go ahead from engineers, he was telling Bria not to do any major work in case the foundations had to be re-made.[64] The Magistrate concluded that Nova failed to establish Bria breached the completion term.[65]
[57] Magistrate’s reasons at [244].
[58] Magistrate’s reasons at [246].
[59] Magistrate’s reasons at [246].
[60] Magistrate’s reasons at [247].
[61] Magistrate’s reasons at [248].
[62] Magistrate’s reasons at [249].
[63] Magistrate’s reasons at [249].
[64] Magistrate’s reasons at [254].
[65] Magistrate’s reasons at [255].
Pleaded case
In order to understand and address the appeal grounds and submissions, it is necessary to understand the case which was pleaded and the case which was run at trial.
Bria’s statement of claim, among other things, pleaded that Nova refused to pay Bria for work carried out, Bria had registered a lien and Bria sought to enforce the lien over Nova’s property. The statement of claim pleaded the issue of PC8, the failure by Nova to pay PC8, the giving of notice of intention to cancel the Contract and the termination of the Contract. The statement of claim pleaded that Bria terminated due to Nova’s failure to respond to the demand. The statement of claim pleaded that PC9 was not paid by the due date in default of the Contract. The statement of claim pleaded that the sum of $67,069.53 remained due and payable despite demand and sought an order enforcing the lien, judgment in the sum of $67,069.53 as a debt due, interest and costs. The statement of claim did not plead that Nova’s conduct constituted a repudiation of the Contract which was accepted by Bria.
Nova’s amended defence pleaded that Nova did not pay PC8 or PC9 because Bria had failed to rectify faulty workmanship, failed adequately to supervise works, failed to contract works out and failed to meet various contractual obligations. The defence, among other things, pleaded that it was a term of the Contract that Bria obtained detailed quotes of work to be carried out, the project was not completed by the agreed completion date nor extended dates for completion and works were not signed off prior to Bria abandoning the site. The defence pleaded that Bria failed to ensure defects were rectified. In relation to PC8, Nova pleaded expressly there were substantial defects requiring rectification and that Bria resigned without notice and did not allow an opportunity for the parties to go through defects and attempt to resolve all works requiring rectification. Nova pleaded that works were not substantially complete, Bria wrongfully terminated the Contract by resigning without notice and abandoning the site, failed to bring work to practical completion within four months or extended dates for completion, failed to rectify defective works within the three month maintenance period and breached various statutory obligations under s 32 of the Building Work Contractors Act 1995 (SA) (the “Building Act”). Nova pleaded that Bria abandoned the site because it was unable or unwilling to meet the terms of the Contract including the date of completion, standard of work and rectification of defects. Nova pleaded that Bria sought extensions of time to March 2021.
Nova issued a cross claim in which it repeated aspects of the defence. It pleaded that Bria’s work and the work of its subcontractors was substantially defective and required rectification and, as a consequence, Nova had incurred costs.In addition to specific costs alleged to be required for rectification of specific items of work, Nova pleaded that in breaching an essential term of the Contract, Bria caused its director Mr Figallo to incur costs associated with not being able to move into his home as a direct result of Bria breaching the Contract by failing to complete by the agreed date of completion. The cross claim pleaded hotel costs incurred personally by Mr Figallo as accommodation at Avani Hotels & Resorts of $20,437.74 and storage of personal effects and furnishings of $15,914.81 as a consequence of the asserted breaches of contract.
Case at trial
At trial, Bria’s claim was prosecuted on the basis of a failure by Nova to pay an amount due under the Contract, with termination pursuant to the provisions of the Contract resulting in an amount payable as a debt due to Bria. In Bria’s summary written closing submissions at trial, the claim was described as a claim for the amounts due for PC8 and PC9 “as a debt due”. Bria relied on cl 18 of the Contract which sets out the builder’s right to terminate. The scope of the topics addressed in Bria’s written closing submissions included the contract terms and scope of the works, topics on which it was submitted there was no cross-examination, quotations, PC8 (including the Tiana Joinery invoice), the contract completion date, PC9, remoteness of damage claimed by Nova for storage and accommodation, and asserted defects. Bria’s submissions in a document entitled “Corrections to the Respondent’s submissions so the Court is not misled by the Respondent’s submissions” referred to fundamental breach of contract by Nova and no breach by Bria.
Nova’s written closing submissions addressed topics including whether PC8 was a valid payment claim (including by reason of asserted failure to obtain written quotes and for works which were incomplete and defective including the front door), whether Bria’s termination was valid, whether if the termination was wrongful, Bria was entitled to payment of PC8 and PC9, whether Bria proceeded with reasonable diligence in competing the works, whether works performed were defective, the cost of remediating any defects and what amounts were owed by one party to the other.
The Magistrate engaged with counsel during the trial concerning the issues to be addressed[66] and addressed her reasons by reference to the issues for determination in the manner set out above.
[66] Trial Transcipt (“TT”) 120-123.
The evidence included the communications between the parties to which I have referred above. This included Mr Figallo’s assertions to the effect that he would not pay any further amounts, referring to finding another builder and so on. However, it does not appear that the trial was conducted on the basis that the issues to be determined by the Magistrate included whether Mr Figallo repudiated the Contract or whether Bria and/or Nova was not ready, willing and able to perform its contractual obligations.
Contract terms
The Contract dated 3 February 2020 stated that Nova wished to have building works performed on the property, namely, “to complete all remedial work and all unfinished work on the property according to the building inspection report dated 23 May 2019 by C&W Building Services Pty Ltd building consultants”. There were no drawings, schedules of finishes, specifications, footings or other documents attached to and incorporated in the Contract. The C & W building report related only to windows and doors. The scope of the intended works were not defined in, or able to be determined by, the terms of the Contract.
The parties agreed that Bria would carry out and finish the building work the subject of the Contract and Nova would pay Bria’s actual costs of the works as defined in the Contract plus an additional builder’s fee calculated at 15 percent of the actual cost as defined in cl 7.
The “Work” was defined to mean the house or other construction as shown and described by the Contract and the contract documents. However, there were no contract documents.
Practical Completion was defined as the date Practical Completion was, in Bria’s reasonable opinion, in fact achieved.
Among other obligations, Bria agreed to carry out the work in accordance with the Contract in a regular and workmanlike manner using suitable materials and to proceed to complete the work with reasonable diligence. Bria agreed to achieve practical completion by the date for practical completion subject to any extension of time. The date for practical completion was described in the Schedule as “approximately four months”, subject to any extension of time. Bria agreed to observe and comply with all relevant government regulations and law.
Nova agreed to pay the price for the work on the date set out in the contract, pay for any variations, respond quickly and in writing to any requests for directions or decisions and not to discuss any matters relating to the work with, or give any directions to, any of Bria’s subcontractors or suppliers.
Clause 3.3 of the Contract provided that, to the extent of any inconsistency, any special conditions took precedence over other terms.
The Contract enabled Bria to subcontract any part of the work.
Clause 7 provided that the actual costs of the Works would include only costs attributable to the Works and would include any or all of a number of itemised matters. Those itemised matters included the cost incurred in the performance of all subcontracts and item purchases associated with the works including any packaging, cartage and delivery to site expenses, goods and services, costs of insurance, and additional sums by way of the builder’s fees and any other expense incurred by Bria in carrying out the works and complying with the agreement not being an expense expressly disallowed by the contract.
If the work was held up for any of a number of specified reasons including Nova failing to give or delaying in giving instructions or any delay or disruption due to any act or omission of Nova, the Contract provided that Bria would notify Nova as soon as practicable and the completion date would be extended by a reasonable time.
Clause 13 of the Contract provided that if Nova agreed to pay Bria by progress payments, Bria would ask Nova in writing for progress payments at the times stated in Schedule H. Schedule H provided that:
The Builder shall submit to the Owner at intervals of …, a claim for a progress payment for work actually completed. The Owner shall pay the amount of the progress payment to the Builder within 7 days.
Clause 13.4 provided that a claim for payment must show the cost of the materials, labour and other expenses incurred by Bria and all other items claimed under cl 7 in respect of the period covered by the claim, together with the calculation of Bria’s fee. Clause 13.4.2 provided that Bria shall give such further information as Nova reasonably requires. Clause 13 enabled the Builder to charge interest on amounts not paid on time at the rate agreed in item I of the Schedule. However, no amount was specified in item I.
Clause 14 required Bria to pay workers and subcontractors regularly and on time.
Clause 16 of the Contract provided a mechanism for Bria to stop work if Nova did not pay at the times agreed.
Clause 17 set out the circumstances in which Nova could cancel the Contract. It contained a requirement for Nova first to write to Bria stating Nova’s intention to cancel if Bria did not fix the default and enabled cancellation if, within five days, Bria had not replied or taken reasonable steps to fix the default. Clause 17.4 provided that Nova could only do so as long as Nova was not also in breach of the Contract.[67]
[67] While the Contract employs the terminology of “cancellation”, for ease of reference and consistency I will refer to “termination” in my reasons.
Clause 18 provided that if Nova did not pay any “progress payment due” Bria could either stop work or cancel the Contract. However, if the default could be fixed, Bria had to first write to Nova and state the intention to cancel the Contract if Nova did not fix the default. Clause 18.3 of the Contract provided that if, after five days, Nova had not fixed the default, Bria could either stop work or cancel the Contract. In contradistinction to cl 17, there was no express limitation on the right to cancel if the Builder was in breach.
Clause 19 of the Contract provided that Nova shall pay Bria within 14 days from the date of cancellation the actual costs of the Works as at the date of cancellation, the cost of material or goods ordered for the Works and which Bria was obligated to accept and the reasonable cost of removal of items from site.
The Contract provided that Practical Completion would occur when the Work was largely finished and ready to use. Nova had the ability to give Bria notice of any defective or incomplete work if it thought the work was not practically complete. Bria was then required to assess any items identified by Nova and to do all things reasonably necessary to bring the Work to Practical Completion. Once Bria had done so, Bria, acting reasonably, was entitled to make a final declaration as to Practical Completion being reached which would be binding on the parties.
The Contract provided a maintenance period of three months within which Nova, if it believed the work was defective, could require Bria to rectify defects following a procedure set out in the Contract.
The Contract contained dispute resolution clauses which related to disputes arising in connection with the Contract.
The Contract contained seven special conditions as follows:
1.Minimum fee for the Builder will be $52,500 + GST or cost plus 15% builder’s fee + GST, whichever is greater.
2.The scope of the Work is to be agreed by both the Builder and the Owner having regard (as a guide only) to the building inspection report dated 13/05/2019 by C&W Building Services Pty Ltd. The project is expected to cost approximately $400,000; this amount is a guide only. Any additional unforeseen cost’s [sic] will be discussed by the Builder and the Owner prior to work being completed.
3.The Builder has assessed this project as partially complete and the exact cost to complete cannot be determined. The Builder will take no responsibility for work completed up to this stage.
4. The Builder will require a bank guarantee for the amount of $60,000.
5.That any contracts undertaken in the Work will be for labour only (noting most materials have already been paid for by the Owner) unless agreed prior by both the Builder and the Owner.
6.The Builder maintain proper records for the Works and provide the Owner with all appropriate sign offs where required by law including Certificates of Completion.
7.The Builder to get quotes for approval by Owner for the Works (Quotes need to include detailed information of the Works to be carried out onsite).
The Schedule provided for a period of completion of works of approximately four months.
Contract interpretation principles
The rights and liabilities of parties to a contract are determined objectively.[68] The Court will consider the text, context and purpose of a contract in determining the meaning to be given to terms by reference to what a reasonable business person would have understood the terms to mean.[69] The Court may consider the language used, the surrounding circumstances known to the parties and the commercial purpose to be secured by the contract.[70]
[68] PJ Nash Pty Ltd v Food and Beverage Australia Ltd [2021] SASCA 86 at [41] (Lovell, Livesey and Bleby JJA).
[69] PJ Nash Pty Ltd v Food and Beverage Australia Ltd [2021] SASCA 86 at [41] (Lovell, Livesey and Bleby JJA).
[70] PJ Nash Pty Ltd v Food and Beverage Australia Ltd [2021] SASCA 86 at [42] (Lovell, Livesey and Bleby JJA).
In Willis Australia Ltd v AMP Capital Investors Ltd, Ward P, Beech‑Jones JA and Griffiths AJA referred to and summarised relevant principles of construction as follows:[71]
[71] [2023] NSWCA 158 at [49] (Ward P, Beech‑Jones JA and Griffiths AJA) (citations omitted).
The principles are identified in cases such as Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd per French CJ, Nettle and Gordon JJ and Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd per Kiefel, Bell and Gordon JJ. They may be summarised as follows:
(1)The rights and liabilities of the parties are determined objectively by reference to the contract’s text, context (as a whole) and purpose.
(2)It is necessary to ask what a reasonable businessperson would have understood the terms of a commercial contract to mean, which requires consideration of the language used by the parties, the circumstances addressed by the contract and the commercial purpose or objects to be secured by it.
(3)Ordinarily, this process of construction is possible by reference to the contract alone and, if an expression in the contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to alter its plain meaning.
(4)Recourse to such events, circumstances and external things may be necessary to identify the commercial purpose or objects of the contract or where there is a constructional choice.
(5)Each of the events, circumstances and external things to which recourse may be had is objective but those events, circumstances and external things need to be known to the parties or assist in establishing the purpose or object of the transaction, including its history, background and context and the market in which the parties were operating.
(6)Evidence of the parties’ statements and actions reflecting their actual intentions and expectations are inadmissible.
(7)Unless a contrary intention is indicated in the contract, a Court is entitled to approach the task of construction on the assumption that the parties intended to produce a commercial result, in the sense that a commercial contract should be construed so as to avoid it “making commercial nonsense or working commercial inconvenience” (citing Electricity Generation Corporation v Woodside Energy Ltd).
(citations omitted)

The Court quoted[72] from H Lundbeck A/S v Sandoz Pty Ltd; CNS Pharma Pty Ltd v Sandoz Pty Ltd, where Edelman J stated:[73]
Whilst it will always be an important matter of context for the interpretation of a commercial agreement if an interpretation would be “commercial nonsense”, it will rarely assist for the interpretation of an agreement that the court considers that, from the perspective of one party, one or more clauses are not commercially wise or convenient. As Neuberger LJ said in Skanska Rashleigh Weatherfoil Ltd v Somerfield Stores Ltd:
“[T]he court must be careful before departing from the natural meaning of the provision in the contract merely because it may conflict with its notions of commercial common sense of what the parties may must or should have thought or intended. Judges are not always the most commercially-minded, let alone the most commercially experienced, of people, and should, I think, avoid arrogating to themselves overconfidently the role of arbiter of commercial reasonableness or likelihood.”
(citations omitted)
[72] Willis Australia Ltd v AMP Capital Investors Ltd [2023] NSWCA 158 at [58] (Ward P, Beech-Jones JA, Griffiths AJA).
[73] [2022] HCA 4 at [104]; (2022) 399 ALR 184 at [104] (Edelman J) (citations omitted).
The Court also referred[74] to the observations of Macfarlan JA (with whom Young JA and Tobias AJA agreed) in Jireh International Pty Ltd t/as Gloria Jean’s Coffee v Western Exports Services Inc in which his Honour stated:[75]
If after considering the contract as a whole and the background circumstances known to both parties, a court concludes that the language of a contract is unambiguous, the court must give effect to that language unless to do so would give the contract an absurd operation. In the case of absurdity, a court is able to conclude that the parties must have made a mistake in the language that they used and to correct that mistake. A court is not justified in disregarding unambiguous language simply because the contract would have a more commercial and businesslike operation if an interpretation different to that dictated by the language were adopted.
First ground of appeal
[74] Willis Australia Ltd v AMP Capital Investors Ltd [2023] NSWCA 158 at [57] (Ward P, Beech-Jones JA, Griffiths AJA).
[75] [2011] NSWCA 137 at [55] (Macfarlan JA; Young JA and Tobias AJA agreeing).
Appellant’s submissions
Nova challenges the Magistrate’s conclusion that Bria validly terminated the Contract because Nova did not pay PC8.
Nova submits that the contractual right of termination was expressed in terms of non-payment of any progress payment due and that cl 18 of the Contract, properly construed, does not contemplate the disaggregation of a claim for a progress payment into its constituent elements. Nova contends that if multiple claims for payments are included in a single progress claim, Bria will only be able to demonstrate there was a progress payment due and not paid in order to entitle cancellation if every item in the claim was properly included. Accordingly, as a matter of construction, Nova contends there was no default entitling cancellation under cl 18 as the payment sought in PC8 was not due. Nova contends that on the Magistrate’s own findings, the progress claim of $44,202.62 was not due.
Nova submits that item H of the Schedule effectively adopts a milestone payment approach in providing that payments may be requested for work actually completed. Nova submits that for work to be actually completed in the relevant sense it had to be substantially free from defect. Nova submits that for a claim for payment to be made, the work must be complete but also Bria must comply with the requirements of cl 13.4 (that is, providing details of the cost of materials, labour and other expenses incurred, the calculation of the builder’s fee and other information the owner reasonably requires).
Nova submits there was no reason to give cl 18 a more expansive meaning and if there were a minor discrepancy, Nova would accept the application of the de minimis non curat lex principle. Further, Nova contends that if there were controversial items, Bria could re-issue a payment claim in respect of uncontroversial elements. Nova submits that the Magistrate’s construction of the cancellation clause overlooked the seriousness of a cancellation for Nova with the inevitable associated cost and expense.
Nova submits that the letter of demand stated that unless Nova both made full payment and provided the requested guarantee, Bria would at its discretion either cease work or cancel the Contract. Nova submits that cl 18.2 required an unequivocal warning that termination would follow.
Nova also contends that Bria could not terminate while engaged in conduct which could be characterised as repudiatory or as conduct in breach of Bria’s obligations if that conduct had a nexus with the failure by Nova to pay the part of PC8 found to be properly claimed. Nova does not put its position on the basis that any demonstrated breach by Bria or any indication of an absence of readiness, willingness and ability to perform would suffice to render the contractual power to terminate unavailable. Nova acknowledges a lack of clear authority supporting such limitation and points to authorities which refer to a nexus between the conduct of the party seeking to terminate and the alleged breach relied on by the other party, or where obligations are interdependent, or cases in which one party’s own breach has resulted in the other being placed in the situation which is claimed to show a repudiatory intention.[76] Clause 17 of the Contract, which relates to the owner’s entitlement to terminate, expressly states that an owner cannot exercise the right of termination if the owner is also in breach of contract. Clause 18 does not contain any equivalent words. Nova submits that the limitation in cl 17 is wider than the common law limitation which properly qualifies cl 18. Nova contends that the absence of equivalent wording in cl 18 does not preclude the more qualified limitation contended for, especially when the triggers for termination in the two clauses differ. Nova submits the Court should be guided by a commercial and business like construction and with regard to a general guiding principles that a contracting party should not be able to take advantage of his or her wrong to end a contract.
[76] See, eg, Idameneo (No 123) Pty Ltd v Ticco Pty Ltd [2004] NSWCA 329 at [79] (Santow JA; Mason P and Hodgson JA agreeing).
Nova submits that Bria’s breach or unwillingness to perform was manifested by Bria’s threat to terminate if Nova did not pay an amount which included amounts to which it had no entitlement. It is also said to be manifested in circumstances where Bria’s demand exceeded Bria’s contractual entitlement because Bria had no entitlement to a replacement guarantee and non-provision of a bank guarantee was not a default in respect of which the cancellation power arose.[77] Nova submits that in circumstances in which Bria’s position amounted to an assertion that even if the amount found to be properly claimed in PC8 was paid there would have been a termination, there was a nexus between Bria’s wrongful assertion of position and Nova’s non-payment of the part of PC8 found to have been properly claimed.
[77] Magistrate’s reasons at [198].
Nova contends Bria was in breach of the obligation to complete within approximately four months and submits that the Magistrate erred by proceeding on the basis the reference to completion in four months was only an estimate. Nova submits the reasonable diligence obligation in cl 3 of the Main Obligations in the Contract augmented an express obligation to complete the works within approximately four months subject only to extensions sought and given or required to be given under cl 12. By the time PC8 was issued about nine months had passed and Nova submits Bria did not plead or prove any entitlement to extensions of time.
Nova also relies on Bria being in breach of its obligations in failing to procure and provide evidence of building indemnity insurance. Nova contends that counsel was wrongly precluded from eliciting confirmation by cross-examination that no indemnity insurance had been obtained.
Nova concedes it made statements to the effect it was not prepared to make further payment unless various assurances were given. However, it submits those statements were accompanied by expression of a desire to meet to work through unresolved issues and the question is not whether Nova was in all respects correct in its approach but rather whether Bria was entitled to terminate.
Nova contends that Bria did not plead that Nova’s conduct was repudiatory according to general law principles.
The contract was for the completion of residential property, was a cost plus contract, which carries a degree of vulnerability on the owner’s part, and the project had suffered delays and disputes. Nova submits these matters are relevant to the surrounding circumstances known to the parties and the purpose of the transaction and thus relevant to the construction of the special conditions which were designed to protect Nova from cost blow outs and unsubstantiated payment claims.
Respondent’s submissions
Bria’s written submissions dispute that Bria entirely relied upon the express right of termination in the Contract and contend that evidence at trial, among other things, established that Mr Figallo refused to pay unless the entire house was finished, which conduct was described as a complete repudiation of the Contract. However, during oral submissions, I understood Bria’s counsel to accept that the case was not conducted at trial on the basis that Bria accepted Nova’s repudiatory conduct but rather that the case was run on the basis that Nova failed to pay, resulting in termination under cl 18 and the claim was a claim in debt.[78] Accordingly, while evidence was given at trial concerning the conduct of Mr Figallo in refusing to pay any money for work unless the whole house was finished, that evidence was said to be relevant context to the circumstances in which Bria issued the letter of demand and the termination letter.
[78] Appeal Transcript (“AT”) 151.6-19.
Bria submits there is no principle or authority for the position that Bria was not entitled to terminate due to its liquidated contractual claims being incorrect and submits such a position is inconsistent with the Contract. Bria contends the Magistrate did not find that any progress claim was not in compliance with the Contract.
Bria contends that Nova failed to give instructions to allow work to advance but it was not necessary for the Magistrate to consider that allegation in detail given Nova’s refusal to pay PC8.
Bria contends there was no pleaded issue or case at trial alleging Bria was not willing to perform and no witness for Bria was cross-examined on the basis that Bria was refusing or lacked a willingness to perform.
Bria contends that the first appeal ground is consistent with the findings made by the Magistrate[79] in which she considered it unnecessary to deal with the bank guarantee. Bria contends that no specific error in the Magistrate’s findings is explained and the Magistrate’s analysis justified the findings. In relation to the issue of insurance, Bria contends the point was not pleaded and no discovery was made.
[79] Magistrate’s reasons at [198].
Analysis
Right to terminate
The right to terminate under cl 18 is relevantly triggered by Nova’s failure to pay “any progress payment due”. Bria is entitled to render progress payments in the circumstances set out in Schedule H, that is, for “work actually completed”. Accordingly, in order to address Nova’s submissions and to determine whether there has been a failure to pay a progress payment due, it is necessary to determine the proper contractual interpretation of “work actually completed”, determine what is a “progress payment” and determine what is “any progress payment due” under the provisions of the Contract. This includes considering whether a claim for a progress payment is a “progress payment due” if it contains any items which are not properly charged in conformity with the Contract.
Actually completed
Schedule H allows Bria to submit to Nova at intervals (which are not specified) a claim for progress payment for “work actually completed”.
There is no definition of “completed” or “actually completed” and none of the contractual provisions assist in shedding light on what that phrase may mean.
In Morgan v S & S Constructions Pty Ltd (“Morgan”),[80] Winneke CJ, Smith and Gowans JJ considered the meaning of the word “completion”. In that case the building contract required the builder to give notice of the completion of the works. One contention was that the owner could not deny completion of the works by reason of defects because they were capable of being remedied under the maintenance clause in the contract.
[80] [1967] VR 149.
The Court stated:[81]
Prima facie, one would have thought that the work to be done under a contract was “completed” when everything required to be done had been done in accordance with the contract, both in respect of manner and materials. But when the subject-matter is the erection of a house, it is reasonable to think that if the building owner had gone into occupation, it would not be open to him thereafter to rely on the fact that there had been latent or unobserved departures from the contract to justify a contention that he had gone into occupation of a house which was not “completed”, at all events when relief against such departures was open to him through a “maintenance clause”. On the other hand, it would seem equally reasonable to think that, if, before the owner went into occupation, he was able to point out obvious departures from the contract, which were not merely trivial, he could not be required by the contractor to accept occupation of the house as “completed”, on the ground that it was thereafter open to him to give notice to have them remedied under a “maintenance clause”. The proper view would appear to be that, until the work to be done under the contract had been carried out in accordance with the contract, both in respect of manner and materials (except for departures from the contract which were either latent or undiscovered or merely trivial), it would not be “completed”.
[81] Morgan v S & S Constructions Pty Ltd [1967] VR 149 at 154 (Winneke CJ, Smith and Gowans JJ).
In the case of this Contract, the maintenance period and the practical completion clause provided mechanisms for Nova to require Bria to address defective or incomplete work and Bria relied on the maintenance period in support of its submission that amounts should be paid even if work was defective. The question remains whether as a matter of the proper construction of the Contract, defective work would be ‘actually completed’ given the specific requirement that it be so for a payment claim to be rendered. I have taken into account the surrounding circumstances in which the parties entered into the Contract, in particular the history of asserted defects in work performed by previous builders, together with Nova’s express requirement for the insertion of the Special Conditions. I consider on a proper interpretation of the Contract, and in a similar manner to Morgan, that to be “actually completed” work, the work would need to be carried out in accordance with the Contract requirements other than in respect of undiscovered or trivial departures from the Contract. The primary purpose of the maintenance clause is to enable Bria, at its expense, to address latent and minor defects during the maintenance period.
Progress payment due
The Magistrate considered that Nova’s interpretation, that is, that the inclusion in the payment claim of an invalid item would invalidate the payment claim, would be inconsistent with the purpose and object of the Contract as set out above. The Magistrate considered the purpose of the Contract to be for the building work to be carried out with reasonable diligence and for Bria and subcontractors to be paid for work by progress payments as and when work was completed and placed emphasis on the potential for adverse impacts on cash flows and disincentive for subcontractors to return to site leading to construction delays. However, the Magistrate did not address what is meant by “progress payment due” in cl 18 of the Contract.
The Contract does not define what amounts to a “progress payment due”.
There are a number of authorities dealing with payment certificates under contracts which contain mechanisms for certification of amounts payable after a builder renders a progress claim. Generally, such contracts set out the requirements for certification and require the certified amount to be paid. However, they contain various mechanisms to enable reconciliation at the end of the contract in the event of under or over payment based on certification. Progress payments are thus provisional and subject to final determination of indebtedness. In general terms, while each case turns on the particular contractual provisions, the authorities largely support the position that in such cases, including because there is an obligation to pay the certified amount without deduction or setoff, there must be strict compliance with the contractual provisions for the certified amounts to be valid and payable. For example, Rolfe J in Algons Engineering Pty Ltd v Abigroup Contractors Pty Ltd[82] concluded that strict compliance with a payment certificate was required. Justice Rolfe said:[83]
Accordingly, the recipient of the certificate is required to pay money during the course of the contract which, at the end of the day, it may be found it does not owe. The requirement to pay money may lead to financial difficulties for the payer, just as the failure to receive money during the course of the contract may cause financial difficulties to the payee. Also the payee may not be able, at the end of the day, to refund any overpayment. Considerations such as these lead me to the conclusion that a certificate must comply strictly with [the relevant clause] if it is to have the consequences specified.
[82] [1997] NSWSC 478.
[83] Algons Engineering Pty Ltd v Abigroup Contractors Pty Ltd [1997] NSWSC 478 at 7 (Rolfe J).
In Daysea Pty Ltd v Watpac Australia Pty Ltd,[84] Williams JA (with whom Davies JA and Mackenzie J agreed) assessed a number of authorities on payment claims and said that an owner is obliged to pay a certificate even if the amount may later be found to be incorrect.[85]
[84] Daysea Pty Ltd v Watpac Australia Pty Ltd [2001] QCA 49; (2001) 17 BCL 434.
[85] Daysea Pty Ltd v Watpac Australia Pty Ltd [2001] QCA 49 at [21]; (2001) 17 BCL 434 at [21] (Williams JA; Davies JA and Mackenzie J agreeing).
While the payment certificate cases are not directly applicable given the different and more complex contractual provisions in such cases, the underlying factors taken into account by the courts in such cases are instructive. On the one hand, the obligation to pay imposes a financial burden on the owner but the ability of an owner to refuse payment has the potential adversely to impact the builder and subcontractors and impact on progress of the works, including potentially putting performance of the contract at risk.
In this case, cl 18 of the Contract entitles Bria to cancel the Contract if Nova “does not pay any progress payment due”. The Contract does not expressly define what is a claim for a progress payment. Given the manner in which Schedule H is phrased, I consider a reasonable person in the position of the parties would understand a claim for a progress payment to mean a document which sets out claims for specific sums of money on account of specified pieces of actually completed work.
Clause 13 contains the requirements for a claim for payment and cross refers to cl 7. Clause 13 of the Contract provides that a claim for payment must show the cost of materials, labour and other expenses incurred by Bria and other items claimed under cl 7, together with the calculation of Bria’s fee. The clause obliges Bria to give such further information as Nova reasonably requires. Clause 7 addresses the costs which are payable by Nova. Clause 7 relevantly provides that the actual costs of the works will include the cost incurred in the performance of all subcontracts and any other expense incurred by Bria in carrying out the works and complying with the Contract, not being an expense expressly disallowed by the Contract.

Special Condition 7 contains the requirement for Bria to obtain quotes and refers to quotes including detailed information of the works to be carried out. Special Condition 7 does not include a reference to quotes containing pricing. However, the notion of a quote is to provide an estimate of the cost of a service and accordingly it must have been intended that quotes would relate to cost. The Special Condition does not expressly require quotes to be in writing. This contrasts with other clauses of the Contract which contain express requirements for writing. For example, the main obligations include Nova responding quickly and in writing to requests for directions or decisions. Clause 10 which addresses the supply by the owner for materials provides for the builder, if the materials are considered unsuitable, to tell the owner why in writing. Clause 12 refers to the builder giving the owner notification of certain matters, without any reference to a requirement to notify in writing. Clause 13.4 requires progress payment claims to be in writing. The clauses which address stopping work and termination require notice to be given in writing and practical completion must be notified in writing. Notification of defects during the maintenance period is required to be in writing. Clause 23 provides that all notices must be in writing. Notification of disputes is to be in writing. That said, the Special Conditions were drafted by the parties.
Special Condition 2 provides that the scope of the work is to be agreed and additional unforeseen cost will be discussed by Bria and Nova prior to work being completed. Thus, Special Condition 2 envisages agreement about scope of works, but does not contain any reference to any requirement for the scope to be confirmed in writing. It expressly refers to discussion in relation to unforeseen costs. The language used is consistent with an intention that the scope of works and at least some aspects of cost can be agreed in discussion and that intention is consistent with the commercial purpose of the Contract in the context of the background known to the parties. While Special Condition 7 does not expressly refer to quotes being in writing, the reference to quotes containing detailed information suggests an intention for written quotes. I agree with the submissions by Nova that the context of the background circumstances known to the parties and the commercial purposes of the Contract support an intention that quotes would be in writing. If that is so, there is potentially some tension between the two special conditions. Where possible, contracts should be construed as a whole and harmoniously to avoid conflict.[185] The Court will strain against interpreting a clause in a way which renders the clause ineffective especially if meaning can be given to a clause which is consonant with another provision in a contract.[186]
[185] Australian Broadcasting Commission v Australian Performing Right Association Ltd [1973] HCA 36 at [3]; (1973) 129 CLR 99 at 109 (Gibbs J).
[186] Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402 at 411 (Lockhart and Hill JJ).
I have considered whether the Contract provisions and Special Conditions can consistently be read together.
I consider the distinction between the references in the Contract to requirements for writing, in contradistinction to the Special Conditions and the potential differences between Special Conditions 2 and 7 are capable of reconciliation on the following basis. The scope of works are not defined by the Contract and consequently it must have been expected that discussions between Mr Figallo, Mr Bria and subcontractors would occur during which the scope of the works would be discussed and potentially agreed in person. The meetings during which Mr Figallo requested specific works to be conducted were consistent with finalising the scope of works in a context in which Bria commenced work on a partly completed house with issues of pre-existing defects. However, the fact that the scope of works conceivably could be verbally agreed within the framework of the Contract does not necessarily lead to the conclusion that quotes could be provided orally given the wording of Special Condition 7. The reference in Special Condition 7 to quotes including detailed information of the works to be carried out on site implies an intention that quotes would be obtained in writing. This is consistent with a need to protect the owner in the case of a cost plus contract in which the owner is required pay for the work performed by the builder or subcontractors together with the mark up for the builder’s fee. It is also explicable given the special conditions were drafted by the parties. However, the parties nonetheless appear to have intended that they would retain an ability to agree scope of works and discuss additional costs in person prior to completion of work. This construction allows for both written quotes (Special Condition 7) and verbal discussions about costs (Special Condition 2). This conclusion is consistent with the language of the Contract and the commercial purposes against the background context of Bria taking over partly completed and potentially defective works. There were no written specifications or contract documents addressing the work to be performed to rectify existing defects and complete the dwelling. The extent of work required for that purpose was unknown and it was readily conceivable that further issues may be discovered during the works. Bria was stepping on to the site of a partly completed construction, containing defects, with a lack of clear scope and instructions, and accordingly an inability to provide a definite cost to complete. However, the cost plus contract exposed Nova to cost risk, rendering explicable the requirement for quotes to contain detailed information. It is apparent from the Contract terms that the intention was for the work to progress with diligence and with a view to completion by the estimated completion date, subject to extensions. These considerations support a construction which encompass both written quotes and an ability for scope and additional cost to be discussed and agreed in person, consistent with the intention to finalise scope and move the project forward to completion in a timely manner. I also note for the sake of completion that there were no express contract terms which precluded Mr Figallo from agreeing from time to time to Bria performing work on the basis of a quoted hourly charge out rate.[187] On this interpretation, the failure to obtain written quotes for each and every additional item would not constitute a breach. It allows for the eventuality of Nova agreeing a written quote based on an agreed hourly rate for additional items of work, as occurred. This interpretation disposes of the submission that costs which are not the subject of an approved quotation cannot be treated as actual costs of the works within the meaning of cl 7. Given the conclusions I have reached, it is not necessary to address further questions of waiver of contractual requirements.
[187] See Willis Australia Ltd v AMP Capital Investors Ltd [2023] NSWCA 158 at [101]-[103] (Ward P, Beech-Jones JA and Griffiths AJA).
The Magistrate’s factual findings in relation to the Tectonic Tiling invoice were made on the basis of the Magistrate preferring the Bria witnesses over the evidence of Mr Figallo. I do not consider there to be incontrovertible facts demonstrating that the Magistrate’s conclusions are erroneous or glaringly improbable or contrary to compelling inferences.[188] While I take a different view of the proper interpretation of the Contract in relation to the question of quotes from that of the Magistrate, the same conclusion follows from the factual findings in the context of the interpretation I prefer. That is, the Magistrate did not err in concluding that Bria was entitled to payment of the Tectonic Invoice 2110. I therefore reject this aspect of Nova’s third ground of appeal.
Fourth ground of appeal
[188] Fox v Percy [2003] HCA 22 at [29]; (2003) 214 CLR 118 at [29] (Gleeson CJ, Gummow and Kirby JJ).
Appellant’s submissions
The fourth appeal ground depends on Nova succeeding on the first ground and establishing that Bria’s termination was invalid.
Nova contends that if Bria’s purported termination was invalid, Bria wrongfully repudiated the Contract and was accordingly liable for damages. Nova contends it ought to be entitled to damages for delay and inconvenience for which it provided evidence substantiating a claim for approximately $36,300. On appeal, Nova limits its claim to damages for wrongful termination to the costs of removal, storage and accommodation resulting from the delay in completion. Nova submits that if the work had been completed by March 2021, Mr Figallo would have been able to move into the dwelling. Nova seeks what it describes as a conservative assessment of loss of use of around $3,400 per month. Nova submits that after Mr Figallo sold his house, the costs of his alternative accommodation were paid by Nova and constituted foreseeable manifestations of the loss of enjoyment of the asset, being the completed dwelling. Nova submits the head of loss in the form of alternative accommodation and storage of furniture is reasonably foreseeable and if Mr Figallo had not sold the house there still would have been a loss of use of the house which is in principle compensable.[189]
[189] TT184.
I understood Nova’s position to be that in light of the way the trial was conducted, I could not consider the characterisation of Nova’s conduct or any consequences that may otherwise have been said to follow from it, in particular, that it disentitled Nova to damages consequent on Bria’s wrongful repudiation. Nova submits that if Bria’s termination was wrongful, while Bria could have asserted that Nova was not entitled to accept Bria’s wrongful termination as repudiation on the basis that Nova itself was not ready, willing and able to perform, that position was not pleaded or run and Bria did not distinctly plead or make submissions in response to Nova’s cross claim that the claim should fail because it could not have done so because Nova was disabled by its own conduct from terminating. There was no cross appeal or notice of contention filed by Bria. Had the point been run, Nova submits the result may have been properly characterised as an abandonment rather than a valid termination. Nova submits that Bria’s reliance on questions in cross-examination concerning Mr Figallo’s attitude at a particular time does not provide a sufficient foundation to contend on appeal that Nova was disentitled from accepting any wrongful repudiation. The question whether Nova’s conduct disentitled it from accepting the wrongful termination at the time Bria purported to terminate would have required consideration of Nova’s conduct in context and in the light of the assertions being made by Bria. Nova submits the effect in context of relevant communications was not explored in the way it would have been if the issue had been raised squarely and this is not simply a point of law which, if taken, could not have led to the case being conducted differently. Nova also submits that its conduct is to be understood in light of the letter of demand.
Respondent’s submissions
Bria submits that no error was established and that no basis was explained as to why the finding there was a breach of contract was incorrect. Bria submits that there was no pleading of material breaches of contract alleged against Bria. Bria submits it was ready and willing to perform and that was part of the factual matrix relevant to Nova’s breach. Bria submits that Nova had no intention of complying with the terms of the Contract, was in breach of payment obligations, and was insisting on a unilateral change to an entire contract. Bria contends the question of whether Nova was ready, willing and able to perform was addressed at trial and that the cross-examination of Mr Figallo concerning Nova’s position related to Nova’s damages claim. Bria submits that the costs of accommodation and storage were not costs of Nova and that the costs were too remote to be recoverable. During oral submissions, counsel for Bria pointed to items claimed for removal and storage which he submits were not incurred in consequence of the termination of the Contract as there was always going to be a move by Mr Figallo out of his house. Counsel referred to transcript of his cross examination of Mr Figallo in which Mr Figallo accepted he would always have to have cartons for a move[190] and asserted that some of the charges were not correct as, for example, he discarded mattresses and consequently charges for cleaning were not correct and televisions were disposed of prior to moving.[191] Mr Figallo said he stored some items at his workshop and there could have been room to store a container at his warehouse but he preferred the items to be in the storage provider’s warehouse for security. Mr Figallo during cross examination said he did not believe Nova should pay for food and beverages or for transport from home to storage and probably from storage to home.[192]
[190] TT792.
[191] TT792-793.
[192] TT797.
Following Bria’s submissions, Nova agreed that certain concessions made by Mr Figallo in cross examination to the effect that at least one of the two charges for transport should not be paid by Bria and that a charge for boxes and cleaning should be excluded were reasonable. Nova contends that the evidence did not establish it was unreasonable for Mr Figallo to not store his belongings at his workshop and Mr Figallo gave evidence he did not consider it safe to store everything in that location. Mr Figallo did not accept he could have moved into the house when Bria left the site and the mere fact he ultimately moved back into the house in an unfinished state does not deny the additional period in which the dwelling was not available and in respect of which compensation may be awarded.
The parties agreed that I should address this ground on a broad brush basis rather than remitting it to the Magistrate’s Court for findings to be made.
Analysis
While I have concluded that the completion term was not breached, nevertheless termination based on Bria’s insistence on payment of amounts to which Bria was not entitled was wrongful. In determining whether Nova is entitled to damages several issues arise for consideration including whether the losses claimed are properly losses of Nova, whether they are too remote, whether Nova is precluded from pressing a claim for damages on the basis it was not ready, willing and able to perform its obligations, and whether that issue was relevantly put at trial.
Where a construction of a residential dwelling in which the owner intends to reside is delayed, there may be a basis for compensation for delay comprised of alternative accommodation and the cost of storage of goods.[193] Whether a corporate entity is entitled to recover loss upon delay of construction will depend on whether it establishes an entitlement to compensable loss arising naturally from the breach of contract or as may be reasonably supposed to have been in the contemplation of both parties at the time of entry into the contract as the probable result of breach.[194] In this case, Nova’s pleading was framed as seeking recovery of personal loss of the director of Nova. Nova’s closing submissions referred to Mr Figallo being put to expense in finding and remaining in accommodation for longer than he otherwise would have been as well as incurring moving and storage costs. The Magistrate referred to the claims as being for “Mr Figallo’s personal storage and accommodation costs”.[195] The relationship between Mr Figallo’s accommodation and storage costs, which were paid by Nova, after he sold his personal residence and the loss of Nova as the corporate applicant was not clearly explored at trial. The causal impacts of each of the wrongful termination and Mr Figallo’s conduct which produced delay upon the asserted loss was not explored. However, for the reasons I explain below, I do not consider it necessary further to address these difficulties.
[193] Leeda Projects Pty Ltd v Zeng (2020) 61 VR 384.
[194] Hadley v Baxendale (1854) 9 Ex. 145 at 354; (1854) 156 ER 145 at 151.
[195] Magistrate's reasons at [257].
The question of whether Nova was ready, willing and able to perform was not raised as an issue or referred to as an issue for determination by the Magistrate. The correspondence which demonstrates Mr Figallo’s refusal to pay any further amounts until the dwelling was completed was tendered. Mr Figallo was taken to some of the correspondence during examination in chief and he was cross-examined about some correspondence which he sent at the time of PC8, the letter of demand, and termination by Bria.[196] The cross-examination included putting to Mr Figallo that he was refusing to pay any money unless all the work was finished; to which he responded by saying “that is totally correct”.[197] Mr Figallo was cross-examined about the failure to pay PC8; saying in correspondence that Bria would not get one more dollar until the house was finished and Bria signed off;[198] and asserting he would have Bria’s sign removed and refusing permission to enter the premises.[199] Mr Figallo asserted Bria abandoned the site.[200] The evidence relevant to the question whether Nova was ready, willing and able was thus to some extent canvassed at trial. However, it does not appear this occurred on the basis of Bria clearly contending in the context of the cross claim that Nova was not ready, willing and able to perform and accordingly, if Bria’s termination was wrongful, that Nova’s claim for damages should fail.
[196] TT755-762.
[197] TT755.28-31
[198] TT758.22-759.1.
[199] TT761.
[200] TT762.
Nova asserted that Bria failed to engage in alternative dispute resolution in breach of cl 25 of the Contract. In addressing that assertion, the Magistrate observed that Nova did not plead a breach of cl 25 and it was not an issue of which Bria had fair notice. The Magistrate then stated as follows.[201]
[201] Magistrate’s reasons at [102]-[107].
Mr Figallo repeatedly stated that he was not going to pay any more bills until Bria had signed off on the completion of all the Works. This stance was contrary to the express terms of the contract.
In his email of 10 November 2020,[202] Mr Figallo concluded by stating:
[202] Trial Exhibit A1 – Joint Tender Book at 305.
As I told you before you will not get 1 more dollar until the house is finished and you sign off on the work.
On 13 November 2020, Mr Figallo requested that Bria not enter the site anymore without his permission. On 16 November 2020, he also threatened to remove Bria from site and terminate the contract himself if Bria did not agree to return to complete works or resign.
By email dated 18 November 2020,[203] and before Bria cancelled the contract, Mr Figallo gave Bria an ultimatum. He stated that he would only allow Bria to come back on site if it agreed to the following terms:
[203] Trial Exhibit A1 – Joint Tender Book at 319.
1.      A bank guarantee to the value of $100,000 until completion of the job.
2.      Assurance in writing that BRIA Constructions will cover the delays on the hired plant equipment.
3.      Assurance in writing that BRIA Constructions will cover the costs of repair work required by your sub-contractors.
4.      Assurance in writing that BRIA Constructions will cover the ongoing insurance until completion of the job.
Mr Figallo concluded by stating:
If you do not agree to comply with these terms within a five (5) day period, you can consider yourself terminated and I will be claiming damages.
In these circumstances I do not consider it appropriate to make any determination on the issue of compliance with clause 27.5.

While these statements are synonymous with acceptance that Nova was not ready, willing and able to perform its contractual obligations, they were not expressed in the context of a clearly articulated issue as to whether Nova was unable to claim damages because it was not ready, willing and able to perform. For the reasons below, I do not consider it necessary to determine whether Bria ought to be given the opportunity to raise that question on appeal or otherwise further address the issue.
Assuming Nova was entitled to claim loss in the form of accommodation and storage costs and those costs flowed from the wrongful termination, taking a broad brush approach and considering the concessions made by Nova, I would assess damages consequential on the wrongful termination in an amount of $24,177.69. That figure includes the cost of accommodation at Avani totalling $21,122.69, but not the cost of food and beverage. The amount does not include the cost of removal to storage, the cartons, the specialised TV carton and the cost of mattress cleaning and protection. It includes $3,055 representing the cost of moving items from storage to the dwelling, which costs would have been avoided had items been moved directly from the previous dwelling to the new dwelling.
Nova concedes that in the event it is entitled to damages, allowance has to made for the items properly claimed by Bria pursuant to the Contract and the outstanding contract balance will be taken into account.[204] It follows from my conclusions on the second and third appeal grounds that the amount of PC8 which would have been due was $38,693.56. The amount in PC9 which would have been due was $3,038.54 comprising the amounts the Magistrate allowed in respect of PC9 ($1,376 plus 15 percent builder’s fee of $227.04 for the Costanzo invoice, $297 for the builder’s fee on the Pannett invoice, the SA Marble and Granite invoice of $990 and builder’s fee of 15 percent comprising $148.50). The total which would have been due by Nova to Bria on PC8 and PC9 was thus $41,732.10. That amount exceeds my assessment of Nova’s damages of $24,177.69.
[204] See Damien Cremean et al, Brooking on Building Contracts (LexisNexis, 6^th ed, 2020) at 11.8.
It follows that if Nova is entitled to damages following Bria’s wrongful termination, Nova will not recover any amount allowing for the (larger) amount properly claimed by Bria. Alternatively, if Nova is not entitled to claim damages on any of the bases that the losses were not relevantly its losses, the losses were too remote or Nova was not relevantly ready, willing and able to perform, Nova will recover nothing. The outcome will thus be the same. Accordingly, it is not necessary for me to reach a final view on the matters to which I have referred above.
Extension of time
Nova’s primary submission was that time did not run from the delivery of judgment in light of the statement in the reasons for judgment that before judgment was entered, the Magistrate would hear the parties in relation to the calculation of the judgment amount and interest and costs. However, Nova sought an extension of time, if one was required, on the basis that there was no prejudice and the delay was very short.
Judgment was delivered on 19 January 2023 and orders were entered on 20 February 2023 after the quantification of the judgment sum and interest. On 19 January a record of outcome recorded judgment for Bria. Nova appealed within the time frame from the February orders.
Bria opposed the extension on the basis that during the conduct of the matter the Court had granted Nova a number of indulgences and a further indulgence ought not be granted absent proper explanation. Bria contended that the Court should not allow the extension of time on the basis that final reasons were published in January, the quantum of the judgment was known, it was obvious what the final quantum would be and the only remaining issue was interest and costs. Bria contends Nova made a tactical decision in relation to the appeal concerning an argument that costs should await the outcome of an appeal.
In my view, despite the notation of judgment entry in the record of outcome, the statement[205] in the Magistrate’s reasons that the Magistrate would hear the parties before judgment was entered is sufficient basis to conclude that time started to run from 20 February 2023. In any event, I would have granted an extension of time on the basis the short delay in commencing the appeal did not give rise to any prejudice.
[205] Magistrate’s reasons at [261].
Costs
As a result of my decision on the appeal grounds, the question of costs will need to be re-assessed. It is therefore not necessary for me to consider the procedural fairness argument put by Nova.
Orders
I will hear the parties in relation to the orders required to give effect to my reasons and in relation to the question of costs.