Nova Property (Aust) Pty Ltd v Bria Constructions Pty Ltd

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…