Powell v Foreman Homes Pty Ltd No. DCCIV-98-1601

[2000] SADC 136

Powell v Foreman Homes Pty ltd
[2000] SADC 136

Judge Muecke
Civil

1. This case involves a Building Contract whereby the defendant (‘Foreman Homes’) agreed to build a house for the plaintiff (‘Mrs Powell’) at a property owned by Mrs Powell at 52 Grenfell Road, Surrey Downs.  The contract provided that the building works start 14 days after all approvals and finish six months after the start date.  All approvals had been obtained by 31 December 1997.  I assume that work commenced within 14 days of all approvals.  The trenches for the foundation for the house were dug and the concrete slab and footings were poured on 11 February 1998.  The concrete was left to cure for 28 days.  In the normal course of events construction of the masonry walls of the residence (in this case stone and brick) would commence at about the time the slab had cured.  That did not occur. 

2. By letter dated 30 July 1998 to Mrs Powell from solicitors on behalf of Foreman Homes, Foreman Homes purported to terminate the building contract ‘pursuant to the provisions of clause 29 and also on the basis that your conduct represents a repudiation of the contract which is accepted by our client in terms of its option to terminate the contract’.

3. By the time the matter came to trial Mrs Powell’s house had advanced no further than its state as at 30 July 1998.  At that date it had advanced little further than its state when the foundations were poured.

4. By summons dated 6 November 1998, Mrs Powell sought an order against Foreman Homes for specific performance of the building contract.  In the alternative, she sought damages for breach of contract.  She denied she was in breach of the contract and denied Foreman Homes was entitled to terminate it.

5. Foreman Homes asserted it was lawfully entitled to terminate the building contract.  It denied Mrs Powell was entitled to specific performance of it or damages.  By counter-claim Foreman Homes alleged that Mrs Powell breached express terms of the contract by:

   1...... delay in selecting bricks in breach of clause 8.5;

   2gave instructions to suppliers or subcontractors of the defendant in breach of clause 8.4 despite a request not to do so by letter of 27 March 1998;

   3...... insisting that moss rocks be placed in a position where the defendant’s work was inconvenienced representing a continued breach of clause 10.5;

   4erecting a side fence restricting the defendant’s access to the works and not providing an all weather track;

   5...... demanding that certain tradesmen not undertake work on the house despite the defendant’s confidence in their ability and their experience;

   6expressing a continual lack of confidence in the defendant’s proven professionalism and standards of excellence which has denigrated the working relationship to such an extent that it was not possible to be restored to a satisfactory basis;

   7...... refusing to pay extra money despite requesting variations which, pursuant to the provisions of the contract, increased the contract sum.

6. Foreman Homes claimed that as a result of these breaches it lawfully terminated the contract by letter dated 30 July 1998.  Foreman Homes claimed losses and damage which it said it suffered as a result of Mrs Powell’s breach of contract.

7. The trial in the action commenced on Monday 10 April 2000.  It proceeded for fourteen days over several months.  The two principal witnesses were Mrs Powell and Mr Brian Foreman, both of whom gave evidence over about six days.  They both gave evidence about numerous matters relating to the contract.  Each was cross-examined for several days.

8. In 1997 Mrs Powell was about 52 years of age and had owned a number of houses.  In the course of building several of them she gained some knowledge of building practice.  She had reached the stage in her life where she had determined, for family and health reasons, to build one further house.  It was to be her last and most important home.  She purchased Lot 52 at Grenfell Road, Surrey Downs.  She looked for a builder to build her last home for her.

9. In 1994 Mr Ken White had considered that there was an opportunity in Adelaide to establish a business to build quality homes.  He had known Mr Brian Foreman for a number of years prior to 1994.  Mr Foreman was at the time a building foreman with another builder.  The two men enjoyed a good relationship.  Mr White established Foreman Homes and employed Mr Foreman.  Mr White and his wife were at all times the sole directors and shareholders of Foreman Homes.  Mr White professed no expertise in or detailed knowledge of the building industry, in particular regarding matters which related to the design and construction of building works.  Mr Foreman held a building work supervisor’s licence and his job was to do the estimating for building contracts, to negotiate contracts with clients, to contract with and organise sub‑contractors to do the work, and to supervise the building works.  Mr White’s job was to look after the financial side of Foreman Homes.  Foreman Homes employed some office staff at its main office at Commercial Road, Port Adelaide.  Foreman Homes engaged architectural designers and engineers by sub-contract as well as sub‑contractors for the construction work.  Foreman Homes was a small, ‘family’ builder that took pride in building high quality domestic homes. 

10. Mrs Powell had heard of Foreman Homes and by about August 1997 she had met Mr Foreman and discussed with him her wish to build a house.  Mrs Powell described to Mr Foreman the design she wished for her house.  It was similar to at least one house she had built in the past.

11. Mr Foreman informed Mrs Powell that Foreman Homes would only build off architectural type drawings.  He informed Mrs Powell that Artec Building Designers Pty Ltd (‘Artec’) were used by Foreman Homes to prepare appropriate plans and drawings.  Mrs Powell consulted with a designer at Artec who commenced work on plans and drawings for her new house.  Whilst the plans are dated September 1997 I find that they were not in their final form and were not signed off by Mrs Powell and Foreman Homes until 8 December 1997.

12. A contract for Foreman Homes to build Mrs Powell’s house was prepared and was signed on 11 September 1997.  The price was $165,700.  Mrs Powell paid a deposit of $2,000.  Over the three months after 11 September 1997 numerous discussions occurred between Mrs Powell, Mr Foreman, and the draftsman at Artec responsible for the drawings.  One issue that arose and needed to be resolved related to the front elevation of the proposed house.  It was intended that the front elevation be constructed of stone and brick.  There was to be brick quoin work around the windows, doors, corners, and other places with stone between the quoin work.  The sides and rear elevations were to be constructed solely of brick. 

13. When the drawings were first done there was insufficient room on the front elevation to fit the quoin work in.  For the quoin work to be balanced and aesthetically acceptable the house needed either to be reduced or increased in width.  A decision was made to increase its width but that meant greater cost.  Mrs Powell and Mr Foreman negotiated on price and ultimately agreed that the house would be constructed at the price of $184,000.  I am satisfied that agreement was reached at some time before 8 December 1997.

14. As well as the building contract and plans, there was a building schedule to be prepared and signed.  I am satisfied that the basis of that schedule was discussed between Mrs Powell and Mr Foreman on a number of occasions before the middle of September 1997, but that it was not finally completed and agreed until about the time that the plans were finalised on about 8 December 1997.

15. Mrs Powell took a very great and active interest in the design and specifications for her final home.  She wrote a number of letters both to Mr Foreman and to Artec in which she set out her requirements for the house.  Those letters and the first contract dealt with technical building matters.  She set out her requirements, for example, as to the strength of the mortar to be used by the bricklayers.  She also required ‘all external brickwork to be flush with outer edge of footings (ie no brickwork to overhang footings)’.  It is unnecessary in these reasons to go into the detail of Mrs Powell’s correspondence regarding the specifications for and design of her house.  They were all tendered at trial.  I am satisfied that, on the basis of these letters and on the evidence about the discussions between Mrs Powell and Mr Foreman in 1997, it must have been abundantly clear to Mr Foreman before the final contract was signed that he was dealing with a client who was likely to be single-minded in what she wanted and how it was to be achieved; who would make exacting, even pedantic, demands of the builder through the construction phase (as she had through the design phase); and who would involve herself on a daily basis in all aspects of the construction phase.  It is significant that an ‘extra contract term’ of both contracts was that ‘at lockup owner to have key for access at all times’.  Mrs Powell’s evidence was that in September, October or November 1997 Mr Foreman spoke to her about Foreman Homes not proceeding with the first contract because he had spoken to someone who had told him he would have trouble with Mrs Powell.  She said in evidence that she ‘ripped shreds off Brian’ over this and said ‘Brian there is no cancelling of the contract, it is binding.  Let us get on with it.  Let us get on with still fixing this quoin work with Artec.  Plus, it is hogwash what you are telling me.’  She said that Mr Foreman replied ‘Yes, all right’.  She said:

    ‘In fact, I can come up with people who may have to be called because of this who will clearly say how Brian had nick-named me to all and sundry that I am the woman from hell, and that fairy stories -’

16. In his evidence Mr Foreman was not asked by anyone about this evidence from Mrs Powell.  I find that a conversation like this occurred.  I have referred to it, not because it is particularly relevant to anything that happened at the end of 1997, but it indicated to Mr Foreman the personality of the client with whom he had contracted and with whom he was about to make a new contract for the construction of a house.  It also gives an early indication as to the manner in which Mr Foreman would deal with Mrs Powell in the first six months of the following year.

17. As indicated Mrs Powell and Mr Foreman had discussions between September and December 1997 about the document that was to become the building schedule to the building contract.  I find that the schedule was ultimately agreed in early December 1997.  The agreed schedule contained the seeds of the disputation that stopped construction once the slab and footings were poured in early February 1998.

18. As already indicated the contract documents provided that the construction of the house would take six months.  I am satisfied that was discussed between Mr Foreman and Mrs Powell and that it was a realistic construction time for what was to be built.  There was evidence at trial, which I accept, that in normal circumstances a builder would order materials and organise sub‑contractors to commence the construction of the outer and inner walls of a house as near as possible to the time when the slab and footings had cured.  At that time the appropriate materials and tradesmen to construct the outer and internal walls of the house would be on site.  In Mrs Powell’s case that meant stone and brick would be on site as well as tradesmen qualified to lay those materials.

19. There is also evidence before me, which I accept, that normally the building schedule would specify the materials to be used.  Thus the builder would know what to order such that they were on site at the time the slab cured.

20. What happened in Mrs Powell’s case, however, was that the building schedule did not specify all the building materials that were to be used.  In particular, it specified that Mrs Powell would have a choice of stone for the external front elevation, and a choice of brick for internal feature walls.  The schedule also specified what appears to be the choice of four bricks for those parts of the external walls which were not to be stone.  I was told, however, that although differently described the four bricks were identical to each other.

21. The schedule also leaves undetermined, until Mrs Powell had made a choice, other building materials and other matters.  Instances in the schedule as to such other matters relate to the colour of the roof shingles and the colour of the windows.

22. The failure of the parties to the contract to identify in the building schedule the matters to which  I have referred, in particular the stone and brick to be used in the construction of the house, was a major cause for what followed.

23. Another factor which made a significant contribution to what followed was the respective personalities of Mrs Powell and Mr Foreman.  I had the opportunity to observe each in the witness box for at least a week.  Although she sometimes dropped her guard, Mrs Powell seemed to me to have a very strong, even domineering, character.  The style and manner with which she spoke to Mr Foreman and which she used in her numerous letters to him could easily have been found by him to be insulting and offensive.  I do not think, however, that Mrs Powell was intending to insult and offend Mr Foreman, and although Mr Foreman said in evidence that he was sometimes not happy with Mrs Powell’s expression and style of writing to him, he did not appear to be greatly insulted or offended at any particular time.  Whilst their relationship over the first six months of 1998 was sometimes a stormy one, Mr Foreman appreciated that Mrs Powell did not mean to insult or offend.  He said that some days they had a very good relationship and on other days they did not.  Mrs Powell told me that despite believing that Mr Foreman had lied to her on a significant matter early in the project she would often praise him for how hard he was trying to get the job done, and sometimes even gave him a gift of a bottle for his good work.

24. On the other hand, my judgment of Mr Foreman’s personality is that he was a quiet, unassuming man who tried to avoid conflict as much as possible.  His character was quite the opposite to that of Mrs Powell’s, and I consider that as time went on during the early months of 1998 he tried to cope with Mrs Powell’s approach to him in conversation and by letter by not dealing with the matters she raised in a firm and appropriate way.  I think he was probably overwhelmed by Mrs Powell’s long, detailed, somewhat repetitive and constant letters.  His failure to respond appropriately and firmly would provoke further letters from Mrs Powell.

25. Before the second contract, the building schedule, and the plans were signed Foreman Homes engaged Consulting Engineers SAF to prepare a construction report and footing recommendations, including structural details for the house.  These were finalised in November 1997.  In the specification for the construction of the footings and slab the engineers specified: ‘Edge rebate shall be provided to all masonry cavity or veneer walls’.  This meant that all exterior walls of the house, including the front elevation which was to be a masonry cavity wall, were to be built such that the outer leaf of masonry would be on the lower part of a rebate on the outer edge of the slab.  The inner leaf would be on the ‘top’ of the slab adjacent to the rebated part of the slab.  The engineers provided that the minimum rebate depth would be 25mm but ‘may be increased to suit masonry coursing.  The maximum rebate depth shall be 100mm’.  In a letter dated 7 April, 1998 to Foreman Homes the engineers stated that ‘we specified the rebate width to be masonry width + 40mm (i.e. 150)’.

26. The architectural drawings prepared by Artec indicated a one brick standard rebate depth of 86mm.  I am satisfied that the architectural drawings were prepared on the basis that the rebate width would be 150mm.  Importantly, they were also prepared on the basis that the outer leaf of the masonry wall at the front elevation would be no more than a standard brick width of 110mm, there would then be a cavity of about 40-50mm, and then the inner leaf would be of a standard internal brick laid on the top of the slab at the edge of the rebated part of the slab (see Exhibit P4, sheet 14 of 16).

27. There is one further matter to which I refer that occurred prior to the signing of the final documentation.  Mrs Powell said in evidence that Mr Foreman tried to convince her to sign a contract for him to build her house rather than it being built by Foreman Homes.  That was denied by Mr Foreman.  I am unable to make a finding on this matter because I am uncertain where the truth lies.  It may be that Mrs Powell is right about what was said.  It may be that Mr Foreman said something that was misunderstood by Mrs Powell.  I am uncertain as to what happened on this issue.  I am satisfied, however, that it is not important to resolve it.

28. I find that Mrs Powell and Mr Foreman, on behalf of Foreman Homes, signed the Building Contract which is the subject of these proceedings on 8 December 1997.  I find that on that date also the plans were signed and the building schedule was finalised following considerable discussion between Mrs Powell and Mr Foreman.  I find that the final amendments to the schedule were initialled on that day.  I am satisfied that, at Mr Foreman’s request, the contract was dated 11 September 1997 which was the date the original contract was signed.  Mr Foreman made that request to prevent the triggering of a further cooling off period for Mrs Powell.  I find that Mrs Powell was happy to accede to that request.

29. By the end of 1997 the parties had signed the contract documents and the job was ready to proceed early in 1998.  In January 1998 the site was prepared, the foundations dug, and on 11 February 1998 the footings and slab were poured and left to cure.

30. As already indicated the next stage of construction after the slab and footings cured was the building of the masonry walls for the house.  That was due to commence, in the normal course of construction, in the second week of March 1998.  However, the building schedule provided for choices to be made by Mrs Powell of the masonry to be used in the construction of the house.  During the design stage of the project, or even before it, Mrs Powell had considered the use of stone surrounded by brick quoin work for the front elevation of the house.  She had not previously constructed a house using stone.  She looked at a number of stone products in various houses some of which she understood to have been built by Foreman Homes.  She said that during discussions with Mr Foreman regarding the building schedule she indicated to him that her preferred stone was a stone which was referred to throughout the trial as ‘Wistow Bookleaf’.  The building schedule describes this stone as ‘Solid Wistow Bookleaf (Bigger one)’.  I shall refer to it as ‘Wistow Bookleaf’.  The schedule contains two other types of stone:  Solid Wistow Dressed Blue Stone and Solid Dark Dressed Blue Stone (Alstone).  I shall refer to the second mentioned stone as ‘All-Stone'.  Mrs Powell said that she told Mr Foreman when discussing the building schedule that Wistow Bookleaf was the stone she wished to be used in the construction of her house.  He convinced her that the schedule should make provision for other stone in case something happened such that Wistow Bookleaf could not be used.  He suggested that the two other stones be included in the schedule.  She said she quite liked All‑Stone but she did not much like the Wistow Dressed Bluestone.  She was not too fussed about having the other two stones in the schedule because she had already decided that her choice would be Wistow Bookleaf.  However, because of their inclusion she insisted that Mr Foreman include in the schedule words that would make it quite clear that it was her choice as to the stone which would be used on the front elevation of her house.

1. Mr Foreman’s evidence was that Mrs Powell had not indicated a preference at the stage the building schedule was discussed.  At  that time, and afterwards, she would express from time to time a preference for different stones.  His evidence was that she did not make a firm choice of stone for the front elevation until March or April 1998.  I have no doubt that Mrs Powell did express to Mr Foreman her preference for Wistow Bookleaf to be used for her house at least by early November 1997.  Mr Foreman’s diary of 9 November 1997 records that he investigated, or noted that he needed to investigate, the price of Wistow Bookleaf.  He said in evidence that that diary note was there because possibly Mrs Powell said she would like Wistow Bookleaf to be used.  I find it was probably the case that Mrs Powell did favour Wistow Bookleaf in late 1997 and expressed that preference to Mr Foreman.  She was convinced by Mr Foreman that the schedule should provide for other choices in the event that her preferred stone could not be used for some reason or another.  She was satisfied when the schedule expressly provided that it was to be her choice.  That meant that she had the right to choose Wistow Bookleaf.

2. After the contract was signed in early December 1997 Mrs Powell and Mr Foreman spoke further on matters of detail.  Mrs Powell telephoned Mr Foreman on 17 December 1997 and raised a number of matters with him.  Mr Foreman replied by letter dated 18 December 1997 dealing with all the matters raised by Mrs Powell.  He concluded that letter by saying: ‘If there are any further queries or alterations I request that they be confirmed in writing and that all future communication either verbal or written be directed to me and no other party.’  This exchange indicated quite appropriate communications between builder and owner leading up to the construction phase of the project.

3. Whatever Mr Foreman may have thought of Mrs Powell’s preference as to stone in November and December 1997 he should have had no doubt when he received a letter from Mrs Powell dated 17 February 1998.  This letter was written six days after the slab and footings were poured.  There is no evidence before me that Mr Foreman either orally or in writing requested Mrs Powell to choose one of the three stones in the building schedule.  Despite that her letter of 17 February 1998 was expressed to be: ‘Re: Wistow Bookleaf Windows & Roof’.  She wrote:

   ‘I don’t want anything to be ordered for my home, unless I have given written consent, then there are no mistakes or delays or confusion.  My choice for stone for front elevation has not changed since we talked about it.  It is definitely Wistow Bookleaf, which must be laid by a stonemason, seeing you told me Kevin won’t be able to lay that particular stone seeing he hasn’t laid it before.  Your suggestion that you might get the stonemasons who did the entrances in and around Golden Grove sounds great.’

4. She then indicated that her windows were to be white and that she had not decided the colour of the roof tiles.  She indicated she would wait until the stonework was done to see what colour would be best.

5. By this letter I find that Mrs Powell had selected Wistow Bookleaf for the front elevation of her house.  I find that Mr Foreman understood from that letter that Mrs Powell wanted Wistow Bookleaf for the front elevation.  He said he so understood that letter.

6. By 12 March 1998 two issues had arisen which were to affect the relationship between Mrs Powell and Foreman Homes throughout the months that followed.  After the slab and footings were poured they were covered by plastic to cure.  Within a few days of the pour Mrs Powell lifted the plastic and inspected the slab.  She was very upset with what she saw.  She was later to describe it in correspondence to Foreman Homes as a ‘disgusting mess’.  She told Mr Foreman of her concerns within a day of her inspection but Mr Foreman ‘decided to wait the 28 days before looking at these problems, seeing it is covered with plastic’.  Mrs Powell described her concerns in a letter to Mr Foreman dated 9 March 1998.  Principal amongst them was the way the rebated area of parts of the slab were finished.  She described that some rebated areas were sloped one way, some the other, and the edges of the rebate were finished in different ways in different places, some were straight and some were ‘bull‑nosed’.  The state of the slab was to continue to be an issue between Mrs Powell and Foreman Homes.

7. Mrs Powell also gave evidence that during the slab’s curing period she was told by Mr Foreman that Wistow Bookleaf was unavailable.  She made her own enquiries of the Wistow quarry and was told that it was available.  She considered that Mr Foreman had lied to her when he told her that it was not available.  She thought that he had lied to her to cover up the fact that the width of the rebate on the front elevation of the slab was insufficiently wide for Wistow Bookleaf to be used on that elevation.

8. Wistow Bookleaf is produced in various and somewhat random depths.  Some stone is up to 250mm deep.  Most stone is deeper than 110mm being the width of a standard household brick.  The other two stones in the building schedule were quarried and cut to a depth no greater than 110mm.  The enquiries made by Mrs Powell of a stonemason and the owner of the Wistow quarry led her to believe that at least a 200mm wide rebate was required for Wistow Bookleaf to be used.  I am satisfied that this information was given to her upon an assumption by the persons she asked that Wistow Bookleaf was to be laid directly onto the slab.  If that was the case a 200mm rebate would have been required.  However, on Mrs Powell’s plans, the stone on the front elevation was to be laid on top of three courses of brick, which brick was to be laid on the rebated area on the front of the slab.  Accordingly, a 200mm rebate was not required because the 150mm rebate provided for on the plans, and on the slab, was appropriate for the laying of standard brick.  However, if Wistow Bookleaf was used for the front elevation and laid on top of the first three courses of brick, even if the deeper stones were cut to 150mm the internal brick wall on the front elevation would need to be laid further into the middle of the slab than if a standard brick or the two other stones had been used.  All three were no wider than 110mm.  If 250mm deep stones were used then the internal walls of the front rooms of the house would be 140mm closer to the centre of the house than otherwise.  If the Wistow Bookleaf stone was cut to a depth of 150mm (which was raised at one stage by Mr Foreman), then the internal walls of the front rooms would be 40mm closer to the centre of the house.

9. Mrs Powell said that she told Mr Foreman that she had no objection to the internal walls of the front rooms of the house being adjusted inwards if that meant she could have Wistow Bookleaf.  One of her letters to Mr Foreman is to the same effect.  I accept that Mrs Powell informed Mr Foreman that she was prepared to lose some space in her front rooms if that meant she could have Wistow Bookleaf.  Mr Foreman acknowledged that he was told this by Mrs Powell.

10. A consideration of sheet 14 of 16 of the plans for Mrs Powell’s house shows that the plans were prepared on the basis that the external and internal leaves of the front wall of the house were standard brick.  That affected  the configuration of the first floor suspended slab and above that to the ceiling and roof.  That explains Mr Foreman’s evidence when he said:

    ‘... I’d probably told Mrs Powell that the slab, the rebate is not necessary.  I do recall saying to her that you can’t have 150mm bookleaf, it comes in random sizes up to 250 and that the front walls would all have to go back at least 90mm to accommodate for the bookleaf stone.  The only alteration they’d have to make would be all the walls would go back and that is not on the plans, the measurements would all have to be changed.’

11. In a letter to Mr Foreman dated 12 March 1998 Mrs Powell wrote:

    ‘My preference is still “Wistow Bookleaf” and is greatly cheaper than original quote.  There would need to be cutting, because of 150 rebate, opposed to the needed 200, which wasn’t prepared for which should have been, seeing Wistow Bookleaf is a choice in my contract...’

12. Mr Foreman was asked in cross-examination why he did not respond to that letter saying that Wistow Bookleaf could be cut and the walls could be moved in to accommodate stones cut to 150mm.  He replied that he didn’t write back ‘because Mrs Powell was continually changing her mind on lots of things. ... Until I had clearly, in my mind, exactly what bricks she was going to use, there was no point in writing back.’  He denied that he saw any problem with using Wistow Bookleaf.

13. During cross-examination of Mr Foreman the following exchange took place:

    Q...... As you understood, the plans reflect the use of a material that required only a 150 mm rebate.

    A.As they were drawn up, yes.

    Q...... Did you think that it was going to cause difficulty to rejig the plans to move the front wall back in order to accommodate the greater depth of stone.

    A.No.

    HIS HONOUR

    Q.That was always going to happen if Mrs Powell chose Wistow bookleaf.

    A...... No, Wistow bookleaf you can cut it to 150 mm.

    Q.But it was always going to be the case if 150 mm depth stone was used rather than 100 mm depth stone was used, that the deeper one was always going to mean that the inner leaf of the front elevation was going to be further into the house than the other one.

    A...... It was still okay because you can have the Wistow bookleaf 150 wide and can still have a cavity.

    Q.But the inner wall was going to be further into the house if you have a wider stone on the outer leaf of the house and maintain the same cavity.

    A...... The inner -

    Q.If your outer leaf - let us not talk about stone, let us talk about brick - if your outer leaf is 110 mms because it is brick and you have got a 50 mm cavity your inner wall is going to be wherever it falls.  It is going to be 150 mms from the outside face of the outer brick.

    A...... It is actually.

    Q.Or 160 mms.

    A...... The outside brick starts at the outside and then you have 270 wall which means that the inside brick starts at 270 and comes back in and it is quite possible with the inside brick that you can actually lay it up the other way if you wanted to, on edge, because it is a rendered wall.

    Q.Yes, but forget what you can do.  If you have got an outer leaf brick of a 110 mm depth, you leave 50 mm for cavity, and then you construct your inner leaf, double brick -

    A...... In that sense, yes.

    Q.That inner leaf or brick has to be constructed further into the house, as it were, if you don’t use an outer leaf of brick but you use a stone which is 150 mm depth.

    A...... The inner leaf, if you use Allstone, or -

    Q.Forget what you want to use - I am not talking about -

    A...... You can turn the inner leaf to an 86 mm wall.  You can turn it on edge.  It has been done.

    XXN

    Q...... You certainly didn’t suggest that to Mrs Powell, did you, turning the inner leaf brick on edge.

    A.No.

    Q...... So we can leave it out of this case, can’t we, effectively.

    A.Yes.

    HIS HONOUR

    Q.You certainly wouldn’t do it if doing an internal feature wall.

    A...... No.

    XXN

    Q...... You see, it is the situation, isn’t it, that when you had those three alternatives, three alternative choices of stone available, that were written down in the schedule right back, you say, in September 1997, being Wistow bookleaf, Wistow dressed bluestone and Allstone dressed bluestone, that you didn’t realise at that stage that one of them called for a different form of construction in terms of the position of the inner leaf of brickwork than the other two, did you.

    A.That one of them?

    Q...... One of them meant the inner wall had to be further back in than the other two.  You didn’t know that or think about it at that time, did you.

    A.Well, I didn’t - I didn’t think about it at the time but I did know about it.

    Q...... It didn’t occur to you, did it, when you wrote down those three different choices of stone for the front elevation in the building schedule.

    A.It may.  It may have occurred to me at the time.

    Q...... You certain didn’t raise it with Mrs Powell that one of those stones meant that the inner wall would have to be moved in, which was different from the plans as they were drawn, did you.

    A.Probably not.

    Q...... I suggest when Mrs Powell came to you probably sometime between 17 February and 12 March 1998 and said that she believed there was a problem in using the Wistow bookleaf because of the depth of that stone, that, in a sense, came as a surprise to you.

    A.No.

    Q...... When she raised it, didn’t it then present to you a potential problem in that if she was to use that stone then, if you like, there would have to be some reconfiguring done to work out how to move that inner wall in.

    A.I suggested that it would be better to move the wall in, but you can cut Wistow stone to make it 150.

    Q...... At p.690 of the evidence you said this about this issue, ‘I do recall saying to her that you can’t have 150 mm bookleaf, it comes in random sizes up to 250 mm, and that the front walls would all have to go back at least 90 mm to accommodate for the bookleaf stone’.  That is what you said in your evidence.  Do you stick with that.

    A.Oh probably.  Probably, yes.

    Q...... Further, you said ‘The only alteration they would have to make would be all the walls would go back and that is not on the plans.  The measurements would all have to be changed’.  That is what you said in evidence.

    A.Right.

    Q...... From what you have said there it is clear that you were saying that the measurements would all have to be changed, that is, the measurements on the plans.

    A.Only the bottom.  Not all the measurements just the bottom walls.  Front walls would all come back 90 mm or what ever we determined.

    Q...... Wasn’t it in fact the situation that although that was not perhaps a major problem, it was a problem that you would prefer to avoid.

    A.No, if Mrs Powell chose to have Wistow bookleaf, then she could have had it.  Her comment to me about Wistow bluestone is she thought it was too - there was too much - too much stone.  It was too cluttered in the end.

14. The other matter relating to Wistow Bookleaf was its availability.  Mrs Powell’s evidence was that Mr Foreman told her in the few weeks after the slab was poured that Wistow Bookleaf was unavailable.  During his examination-in-chief Mr Foreman was asked:

    Q.     Did you ever tell her that the Wistow bookleaf was not available.

    A.     No, not - not that I can remember.

15. He was cross-examined about this issue.  It was put to him:

    Q...... Isn’t it the situation that you told her that the Wistow bookleaf was not available.

    A.No, definitely not.

    Q...... Didn’t you ring the Wistow quarry.

    A.Yes, I actually did ring the Wistow quarry and the Wistow quarry was in receivership.

    Q...... Did you tell her that.

    A.And it was probably unavailable at the time because all materials were sold.

    Q...... So the likelihood is that you did tell her, at some stage, that Wistow bookleaf, to your knowledge, was unavailable.

    A.I may have, yes.

    Q...... That was put to you squarely in your evidence in chief, you were asked whether or not you ever said that Wistow bookleaf was not available and you now say you never said that.  Have you remembered something different now.

    A.I have actually remembered, yes, that Wistow bookleaf went into receivership somewhere around that time.

16. Later in his evidence he said that the Wistow quarry was ‘definitely under receivership around that time’.  He said that he had talked to the owner of the Wistow quarry and ‘he informed me that it is no longer available because, you know, “we’re closing down” and it was then taken over by another person ...’  Later still in his cross‑examination he said that he was a bit confused about his evidence about whether it was unavailable and said he ‘may be even thinking of another job and not even the Bookleaf stone, but I have to really sit down and think about that and go back and try to make some inquiries.’  He said in cross-examination:

    A...... ...I think I am actually getting confused with Wistow stone and not the bookleaf because I think, from my recollections of ringing Tony Roebuck, or Gerry Roebuck from Wistow stone, he took over Wistow stone, and speaking to him, I am sure it was available and so I am pretty sure I would never have said to Mrs Powell that Wistow stone was not available.

    Q.I want you to concentrate on the bookleaf rather than -

    A...... Yes, the other thing is that I could have been talking to - I mean, you talk to a lot of people and a lot of companies, I am pretty sure that, at some stage, Kanmantoo stone were supplying all of the bookleaf stone for the highway or the freeway and I may have contacted them, Kanmantoo stone, and they may have said, “Look, I can’t supply any, I have to supply to the highway”.

    Q.That was going to be the next question.  Was bookleaf, in the first half of 1998, only from one quarry.

    A...... No, two quarries.

    Q.That was Kanmantoo and the Wistow quarry.

    A...... Yes.

    Q.That is assuming that the Wistow quarry was operating at that stage.

    A...... Wistow stone.  I mean, I would have to really put my thinking cap on and I am pretty sure it was operating in 1997.  I have a feeling that in 1996 it was under receivership and changing hands or whatever.  I am not really quite sure, so, bookleaf would have been available, possibly there, and it may not have been available at Kanmantoo stone because I know Kanmantoo stone supplied the highway or the freeway - all that stone was -

    Q.Do you associate the only occasion when bookleaf was not available at Wistow quarry, with the time that Wistow was in receivership.

    A...... It would have been either prior to it going into receivership and definitely afterwards or quite sometime.

    Q.But you associated some availability at the Wistow quarry with the time at or about Wistow being in receivership.

    A...... No, I don’t.  That is the thing, I don’t.

17. No evidence was given as to any inquiries Mr Foreman made during the course of the trial on this issue and no evidence was put before me as to if and when the Wistow quarry had been in receivership.

18. Mr Foreman’s evidence on the whole issue of Wistow Bookleaf was inconsistent and unconvincing.  Mrs Powell’s evidence was that she did not raise with Mr Foreman her belief that he had lied to her about the unavailability of Wistow Bookleaf.  I accept her explanation that she did not do so because she did not see the need to ‘rub it in’ when she was trying to resolve the issue of the stone.  Mrs Powell’s evidence was that when she informed Mr Foreman that a 200mm rebate was required to use Wistow Bookleaf he said that he had not been aware of that until she told him.  His evidence was that he never said that because he knew that there were three courses of bricks to be laid onto the rebate before stone was used.  I reject that evidence of Mr Foreman because I am satisfied that shortly after the receipt of Mrs Powell’s letter of 17 February 1998 in which she chose Wistow Bookleaf, Mr Foreman realised that the plans which had been signed as part of the contract did not accommodate the use of that stone.  Those plans were drawn on the basis that the external and internal leaves of the wall on the front elevation would be 110mm wide.  The engineering specifications were also prepared on that basis.  I find that Mrs Powell told Mr Foreman in the few days after the pouring of the slab that she had been told that a 150mm rebate was insufficient for Wistow Bookleaf to be used and that a 200mm rebate was required for that stone.  Whether at that time Mr Foreman thought about whether the Wistow stone was to be laid directly on to the slab or on three courses of brick, he then appreciated that the plans and engineering specifications did not accommodate a stone greater in width that 110mm.

1. There is other important evidence which has influenced me in these findings.  In a letter to Mr Foreman dated 14 March 1998 Mrs Powell wrote: ‘I am quite happy for the internal walls to come in 60cm (sic), so long as it’s over a trench totally ... Brian, the 3 bottom coarses (sic) of red brick first being 110 wide bricks to house the possible wistow bookleaf, being about 150 is this O.K., with the stone hanging over about 40cm (sic) worries me, this can be overcome by doing away with the 3 bottom coarses (sic) of red brick, if I have bookleaf and laying that straight on the slab.’  (Emphasis added)

2. By letter dated 27 March 1998 Mr White wrote to Mrs Powell for the first time. He wrote:

   ‘It appears to me that if you had chosen your stone long before the footings had been poured so the Engineers report could have been changed to accommodate the 200mm rebate requirement Solid Wistow Bookleaf (bigger one) Stone which you informed me was your first choice.’

3. In a letter dated 3 April 1998 Mr White wrote to Mrs Powell in these terms: ‘For your information by the plans you have signed there is a red brick base coarse (sic) to the front elevation and then stone laid thereafter.  Subject to the engineers report, the stone you select may not require the rebates required for laying stone directly on the slab.  A copy of the plan and schedule is enclosed.’  (Emphasis added)

4. Mr Foreman said that he did not know why Mr White implied by his 27 March 1998 letter that a 200mm rebate was required for Wistow Bookleaf.  He said that Mr White may have thought that it was required.  Mr Foreman and Mr White both gave evidence, however, that it was on the basis of information given to Mr White by Mr Foreman that Mr White’s letter of 27 March 1998 to Mrs Powell was prepared.  Mr Foreman also said that he was not sure what Mr White meant by the words ‘subject to the engineers report’ in his letter of 3 April 1998.  He said that was Mr White’s letter and he couldn’t explain what was meant.  Mr White could not explain why he used those words in his letter to Mrs Powell of 3 April 1998.

5. I find that Mr Foreman knew that those words meant that before Wistow Bookleaf could be used on the front elevation of Mrs Powell’s house an engineer’s report would be required as to whether that could be achieved consistent with the existing plans and engineering specifications.  One issue which may have needed to be addressed in the engineer’s report was the matter flagged by Mrs Powell that the internal wall would need to be ‘over a trench totally’.

6. For these reasons I am satisfied that Mr Foreman did tell Mrs Powell that Wistow Bookleaf was unavailable when he knew that to be untrue.  In that and in other ways he tried to steer her away from using that stone.  I reject his evidence that Mrs Powell did not push Wistow Bookleaf and that he felt that she wasn’t happy about moving the front walls back to accommodate the stone.  I also find that Mr Foreman told Mrs Powell that the Solid Wistow Dressed Bluestone, which was another of Mrs Powell’s choice in the building schedule, was also unavailable.  He probably told her that both the Wistow stones on the schedule were unavailable.  The unavailability of the Dressed bluestone was not something which concerned Mrs Powell because she did not want that stone anyway. 

7. By the time the slab had cured Mrs Powell’s choice of stone had diminished to only one of those set out in the building schedule.  While she had not given up hope that Wistow Bookleaf might be accommodated because she knew it to be available, she had indicated to Mr Foreman by 12 March 1998 that she was prepared to have the All-Stone.  She told Mr Foreman to go ahead and order that stone.  She required Mr Foreman to put in writing that the All‑Stone would be a minimum thickness of 100mm.  She explained that when she had been considering who would build her house she had been influenced by Mr Foreman’s statement to her that Foreman Homes never used stone of a thickness less than 90mm or 100mm.  I am unable to find when it was exactly that Mrs Powell told Mr Foreman to order All-Stone but I am satisfied that it was available when she told him to order it ‘straight away’.  Mr Foreman accepted that it was possible that she told him to order it ‘straight away’.  There was some small delay in him doing so but that delay was sufficiently long for it to be unavailable when he did order it.  That meant that Mrs Powell and Mr Foreman had to consider another stone, and a stone not mentioned on the building schedule.

8. I find that Mrs Powell told Mr Foreman on 19 March 1998 that she was prepared to have the front elevation of her house built with Kanmantoo stone.  She further informed Mr Foreman that that choice was subject to Foreman Homes confirming in writing that the Kanmantoo stone used would be of a thickness between 90mm and 110mm.  Her reasons for doing so were the same as for the All-Stone.

9. That confirmation in writing was not received by Mrs Powell until Mr Foreman wrote to her on 5 May 1998, some nearly seven weeks later.  On 8 May 1998 Mrs Powell confirmed her choice of Kanmantoo stone in writing.

10. Whilst Mr Foreman was of the view that Mrs Powell’s wishes as to the thickness of Kanmantoo stone could be accommodated, Mr White, on behalf of his company, told Mrs Powell that Foreman Homes could give no guarantee of the thickness of the stone.  That was because the quarry would not guarantee the stone thickness to Foreman Homes.  It was not until late April when Mr Foreman visited the quarry and spoke to the quarry manager that Foreman Homes was prepared to give Mrs Powell the undertaking or guarantee she sought.  Mrs Powell considered that she was entitled to have that undertaking because one reason for her choosing Foreman Homes was because of what Mr Foreman had told her before the contract was signed of their standards as to the thickness of stone used.

11. In view of that I am satisfied that Mrs Powell’s insistence on a ‘guarantee’ was reasonable.  The three stones which were part of the building schedule were all at least of a thickness of about 100mm.  Each of those stones had become ‘unavailable’ and I am satisfied that she reasonably required that the new stone was of a certain thickness.  A visit by Mr Foreman to the quarry a month before late April would probably have avoided what was ultimately a delay of about seven weeks between 19 March 1998, when Mrs Powell chose Kanmantoo stone provided that the guarantee was given, and 5 May 1998 when the guarantee was given.  I find that this delay was through no fault of Mrs Powell.  I find it could have been avoided by Mr Foreman.

12. The ‘final’ choice of stone had ramifications in relation to other areas of the construction of Mrs Powell’s house.  I find that Mrs Powell told Mr Foreman that her choice for external bricks depended upon the stone used on the front elevation of her house.  Early in 1998 Mrs Powell had indicated to Mr Foreman that whilst she was committed to Inglewood Terracotta Blue bricks as the bricks for the feature walls for a number of rooms inside the house, she was moving away from the choice of that brick as an external brick.  I am not able to find when that happened because the evidence is not clear.  What is clear is that Mr Foreman expressed no problem about a change to the brick to be used on any of the exterior walls, including the front elevation.  Whilst he denied recommending Colonial Reds, he agreed that he may have said that it was a nice brick which Foreman Homes used on all its homes.  I am satisfied that at no stage did Mr Foreman tell Mrs Powell that she could not change the external bricks which were designated in the building schedule.  I find that he was prepared to allow that change and in fact he had, by 27 March 1998, ordered and had delivered to the site Hallett Colonial Red bricks for the external walls.  His doing so was the source of a complaint by Mrs Powell because she maintained that he had ordered them as if she had agreed to use Kanmantoo stone.  My finding is that she had agreed to use that stone but that her agreement was subject to a written guarantee which was not forthcoming for many weeks.

13. On 25 March 1998 Mr White had a meeting with Mrs Powell at her request to discuss problems with the building.  After that meeting Mr White spoke to Mr Foreman.  Mr White then wrote to Mrs Powell by letter dated 27 March 1998.  In that letter he wrote: ‘Our building program has been put back by six to eight weeks with the insistence that we contract Kevin Pinder and Steven Smith to do all brick and stone laying.’  Mrs Powell had asked for those persons to do the brick and stone work and Mr Foreman had agreed to that happening.  In any event I am satisfied that the building program had not been delayed by Mrs Powell’s insistence because by 27 March 1998 no guarantee had been given to Mrs Powell about the thickness of the Kanmantoo stone which she had chosen on 19 March 1998.  I accept that Mr White, by his letter, was genuinely trying to do what he could to ensure that the construction of Mrs Powell’s house proceeded smoothly.  He set out certain guidelines to be followed by Mrs Powell to achieve this.  One of the guidelines required Mrs Powell to give instructions to Foreman Homes quickly when they asked for them.  He said those instructions must be in writing.  There were other guidelines set down but I am satisfied that many of them were misconceived because Mr White had not been given a complete and fair account by Mr Foreman of the events that had preceded 27 March 1998 as to stone and bricks. 

14. Mr White’s letter refers to Foreman Homes being advised officially by telephone on 19 March 1998 of Mrs Powell’s choice of stone.  However, in their evidence both men had difficulty recalling what that choice was.  The letter does not set it out.  The letter asks Mrs Powell to advise Foreman Homes in writing of the stone she requires.  On a number of occasions Mrs Powell set out in letters that Kanmantoo was acceptable provided there was an appropriate guarantee as to thickness.  In his letter dated 3 April 1998 to Mrs Powell Mr White said he could give no such guarantee. 

15. Also in his letter of 27 March 1998 under a heading ‘Footing Rebate’ Mr White stated that an on-site inspection by the engineers, Mrs Powell, Mr Foreman and himself was to be arranged.  That occurred on 30 March 1998.  Following the inspection the engineer Mr Talladira of TMK Consulting Engineers wrote to Foreman Homes commenting on a number of matters discussed with him on the site.  All those matters related to the slab and footings.  The engineer stated what work could be done by Foreman Homes to meet some of Mrs Powell’s concerns.  Whilst Mrs Powell was not ultimately satisfied that they would remedy the slab Foreman Homes agreed to do, and ultimately did do, some work as referred to by Mr Talladira.

16. I have already referred to Mrs Powell’s letter to Mr Foreman dated 8 May 1998 when she confirmed the use of Kanmantoo stone immediately upon receipt of a letter dated 5 May 1998 guaranteeing the thickness of that stone.  Early in the morning on Wednesday 12 May 1998 Mr Foreman telephoned Mrs Powell and asked her to meet him on the building site.  She met him there that morning.  The bricklayers were also there.  Mr Foreman’s evidence was that he had arranged them to be there to commence laying bricks.  When asked ‘had the bricks been ordered?’, he replied:  ‘Good question.  I think they were going to start the internal brick work because we were getting close to getting the others on site.’  This is in contrast with his later evidence:

    Q.     Why didn’t they start laying the internal bricks.

    A.     We didn’t want to.

    Q.     Why didn’t they want to.

    A.     Because we would prefer to have the outside bricks laid first.

    Q...... Is the true situation, it is not really feasible to start laying internal bricks until you have got the external bricks on-site, or at least about to arrive.

    A.No, it’s not preferred; you can start on the inside bricks, you can start on the outside bricks.  The other thing, we also had to get the bricks to the back of the block as well, which meant we would have had to hand-cart quite a few bricks across the slab.

17. There was no stone or external bricks on the building site.  Whilst the stone had been selected a few days before, Mrs Powell had made no selection of external bricks.  She had not done so because, to the knowledge of Mr Foreman, she would not do so until the stone was finally selected and its thickness guaranteed.

18. What happened in the days and weeks that followed 12 May 1998 was the subject of a considerable amount of evidence.  Mr Foreman said that it was on that day that he started to keep detailed notes of every conversation that he had with Mrs Powell.  Although there were detailed notes tendered which referred to relatively unimportant matters as well as some important matters, the notes did not include reference to some other important matters.  Although Mr Foreman and Mrs Powell gave quite different accounts of what happened in the days after 12 May 1998, their evidence did not differ greatly as to what happened on 12 May 1998, except for one matter.  They spent a good part of that day driving around to various brickyards in Adelaide to try and find a brick that Mrs Powell was satisfied to use as the external brick of her house.

19. At the end of the day they returned to the building site where they discussed an external brick.  Mr Foreman said that at that time Mrs Powell instructed him that the external brick to be used was a Monier PGH brick.  He did not ask for that selection in writing.  After Mrs Powell left the site he ordered that brick.  They were delivered that evening, and he spent some hours helping to unload them and to place them on the site.  Mrs Powell said that she indicated to Mr Foreman that the Monier PGH brick was a possible brick she could use but that she did not make a firm selection that evening.  She said that Mr Foreman suggested that she ‘should sleep on it’ and she gratefully accepted that suggestion.  She said that her sister telephoned her at home that night to tell her that her bricks had arrived on the site.  She was very distressed to hear that, and she telephoned Mr Foreman to complain that he had gone ahead and ordered bricks she had not finally decided upon.

20. In his evidence-in-chief Mr Foreman gave this evidence:

    Q...... Your notes clearly indicate that you and Mrs Powell visited a number of brick yards that day.

    A.We visited PGH and we left there, we went to Boral.  We looked at bricks at Boral.  Basically we couldn’t find anything there then we actually sat in the car and discussed our findings for the day and Mrs Powell indicated to me that ‘Look, we’ll go with the bricks that we saw at Monier, batch No. 42‑5’ and I said ‘Right, and you’re happy with that?’ and she said ‘Yes’ so I said ‘Well, I’ll immediately phone the company and order them’ and that’s what I did.

    Q...... Mrs Powell disagreed with that version of events.  She said it was left on the basis that she would think about it overnight.

    A.Well, she still had time to think about it overnight but she reiterated to me that definitely she would be happy with those bricks.

21. In cross-examination this was put to Mr Foreman:

    Q...... Isn’t it, in fact, the situation that it was left on the basis that she had overnight to think about those bricks

    A.I don’t know what you’re trying to get at there?

    Q...... That she had overnight to make up her mind whether she’d have those bricks or not, that she was going to give you her answer either the next day or at least sometime thereafter.

    A.I think there was some reference to ‘we could sleep on it’, sort of thing, but it was pretty firm in my mind that that’s what Mrs Powell wanted, were those bricks.

22. I am satisfied that whilst Mr Foreman might have believed that the Monier brick was to be chosen by Mrs Powell, she had not made a final decision.  I find that it was left on the basis that Mrs Powell would ‘sleep on it’ and make her decision in the morning.  The next morning Mrs Powell and Mr Foreman again met at the site.  Mrs Powell said to Mr Foreman that she did not want her house built with the Monier bricks and, if she had to, she would pay for the cost of returning those bricks to Monier.  I am satisfied that she said that, not because she had firmly chosen them the night before and thus felt obligated to pay for their return, but because she was ‘scared to rock the boat’, she felt sorry for the bricklayers who were again on site ready to lay bricks, and she felt that such an offer would best ensure that that brick was not used.

23. Mrs Powell and Mr Foreman gave conflicting evidence as to what then happened.  Mr Foreman said that he and Mrs Powell then set off again to tour brickyards and other places looking for an external brick with which Mrs Powell was satisfied.  Mrs Powell said that she and Mr Foreman then agreed that Mr Foreman would put ‘on hold’ certain batches of Hallett Colonial Reds and Hallett Vintage Reds in sufficient numbers to be used in the event that a new batch of Hallett Colonial Reds which was due to become available towards the end of June 1998 was not suitable.  In other words, she said that she and Mr Foreman agreed that she would have the exterior of her house constructed of some Colonial Red bricks to be manufactured by Halletts by the end of June 1998.  If they were not suitable to her then she would use the Colonial Reds and/or Vintage Reds that Mr Foreman agreed to have put on hold until the new batch of Colonial Reds became available.

24. Despite giving that evidence Mrs Powell agreed that in the days that followed 13 May 1998 she and Mr Foreman drove around Adelaide looking at other bricks.  Mrs Powell maintained that she was looking at other bricks as possible bricks for her internal feature walls.  Mr Foreman maintained that he was showing her, and she was looking at, bricks for the external walls because he said that no agreement of the type described by Mrs Powell had been reached on 13 May 1998.

25. This is one aspect of the evidence that I have had great difficulty trying to resolve.  Mrs Powell’s evidence was that she had decided upon the internal feature bricks at a very early stage, and in a letter to Mr Foreman dated 19 May 1998 she urged him to order the internal feature bricks that she had always wanted.  It is unlikely then that she spent some days driving around metropolitan Adelaide looking only at feature bricks and not external ones.

26. However, I do not consider I need resolve this conflicting evidence.  This is because Mr Foreman agreed that by 19 May 1998 Mrs Powell had expressed to him her wish to wait for the batch of Colonial Reds which was due in the latter part of June 1998, and to keep certain other bricks on hold pending their manufacture.  He said further that on 22 May 1998 Mrs Powell told him to tell his bricklayer to find other work until the first week of July 1998 at which time she would proceed either with the new batch of Colonial Reds or the other Hallett bricks which Mr Foreman said he put on hold.  That is consistent with the letter dated 30 July 1998 to Mrs Powell purporting to terminate the contract which states that these bricks were put on hold in May 1998.  Furthermore, Mr Foreman was asked:

    Q...... If the situation were that, on 13 May, which is obviously two days before the 15th, Mrs Powell had said to you ‘I will wait until 28 June until a new batch of external bricks is produced by Halletts’, what would you have done subsequently.

    A.Because I had the bricklayers there and I wanted to get on with the job, I would have tried to say to her ‘Look, you know, is there any other brick that you can have?  I am prepared to go with you and check these bricks out, but if you are adamant that you do not want any other selection, but you have made up your mind on another particular one’, I would have said to the bricklayers ‘Pack up your tools and go home and we will wait until that date’ and I would have made it very clear.

1. Accordingly, whatever view I took of the different versions of what happened following 13 May 1998, it is clear that within a week of that date Mrs Powell and Mr Foreman had agreed on a certain course of action regarding the external bricks to be used in the construction of her house.  Furthermore, Mr Foreman’s conduct as he described it during the week following 13 May 1998 was consistent with a builder who was prepared to allow his client to take further time in which to make a selection for external bricks and was also prepared to give her considerable assistance in doing so.  One option Mr Foreman had at that time was to say to Mrs Powell that she had 48 hours in which to make a selection in writing of external bricks failing which he would take action to terminate the contract.  He did not take that action but rather, on his evidence, accepted the state of affairs as he described them in his evidence. 

2. By 19 or 22 May 1998 Mr Foreman had accepted that the final selection for exterior bricks would be made in late June or early July 1998.  Mr Foreman said that, as at 29 May 1998, his ‘idea still was to finish the project’.  He said that nothing much happened in June 1998 because he and Mrs Powell were waiting for the new batch of Hallett Colonial Reds to be made.  That was expected about 19 June 1998 or some time shortly thereafter.  Mr Foreman was confident that, at 7 or 8 July 1998, he could find bricklayers which were satisfactory to Mrs Powell.  He did not, however, organise them to be ready to start then.

3. On 7 July 1998 Mrs Powell telephoned Mr Foreman and instructed him to order the new batch of Colonial Reds and to cancel all other orders.  This evidence is consistent with the letter of purported termination dated 30 July 1998.  Mr Foreman ordered the bricks on 8 July 1998, but he did not ask the manufacturer to deliver any of them to the building site.  I am satisfied that by that time Mr Foreman and Mr White had commenced discussions between them as to whether they could or should cancel the contract. 

4. Before dealing with the evidence concerning the termination of the contract I deal with the evidence about the bricks to be used in feature walls in some of the rooms of the house.  The building schedule provided that the feature walls were to be constructed with brick ‘to be determined’.  I find that Mrs Powell and Foreman Homes accepted that it was Mrs Powell who was to determine that brick.  I am satisfied that at an early time, in late January or early February 1998, Mrs Powell informed Mr Foreman that she wished to have the feature walls constructed with Inglewood Terracotta Blue bricks.  That she had made such selection was acknowledged in Mr Foreman’s undated letter to her which I find she received on 24 April 1998.  In that letter Mr Foreman referred to Mrs Powell’s selection of that brick for her feature walls and informed Mrs Powell that he had sent an order to the brick company for those bricks.  That order disclosed that he had ordered 4500 bricks.  Mr Foreman told Mrs Powell that he had instructed the brickworks to get her to sign the cartnote for the bricks she selected.  Mrs Powell answered Mr Foreman’s letter on the same day as she received it, on 24 April 1998.  She informed Mr Foreman that she had gone to the Inglewood Brick Company that day and was told that ‘they have nothing for me to sign, as he said I’m not purchasing the bricks, nor an I ordering them, I am selecting them’.  She informed Mr Foreman that the brickworks had between 10,000 and 15,000 of the bricks she wanted.  She wrote: ‘Any of those would be lovely please, thank you ... Please order the “feature bricks”, at least, thank you.’

5. On 19 May 1998 Mrs Powell wrote to Mr Foreman telling him that she had personally picked out her feature brick at Inglewood over a week ago ‘and yet you have not bothered to order them yet, despite me asking about four times’.  She wrote: ‘I “insisted” I had to sign something, but Joe repeatedly said don’t worry about that, as Brian Foreman has to make the order, no‑one can do that, but Brian seeing Foreman Homes are paying for them.  What’s wrong with you Brian, please order my bricks as they are holding them for me with my name on them.  They have at least 10,000 ... This is more than enough for my feature walls. ... Please order these bricks immediately to secure them’.  I am satisfied that Mr Foreman did nothing in response to that letter until 13 July 1998.  The letter written to Mrs Powell purporting to terminate the contract states in part:  ‘On 10 July 1998 you asked Brian to telephone Inglewood to select feature bricks which had been inspected by you.  On 13 July 1998 Brian duly ordered 6,000 bricks with Joe Collero’.  I am satisfied that Mrs Powell did ask Mr Foreman on 10 July 1998 to order the bricks but that was not the first time she asked him to do so.  I am satisfied she asked him to do so on a number of occasions between 19 May 1998 and 10 July 1998.  I am also satisfied that by 13 July 1998 Mr Foreman had calculated that at least 5,000 internal bricks would be required.  This was a greater number than he had ‘ordered’ in April 1998, and that is why he ordered 6,000 bricks on 13 July 1998.  The letter to Mrs Powell purporting to terminate the contract stated she had, on 14 July 1998, requested that the order be increased to 10,000 but that Brian Foreman had been advised on 17 July 1998 that there were insufficient bricks left of that type to fill an order of 10,000.  Mrs Powell agreed that she asked Mr Foreman to order 10,000 bricks, but she said she did so because that was the number he had told her was required.  I am unable to resolve that conflict, but it is unnecessary to do so because I find that on either 13 or 14 July 1998 Foreman Homes had determined that its contract with Mrs Powell should be terminated.

6. In any event, had Mr Foreman ordered the internal bricks soon after he was asked to do so in writing on 19 May 1998 the problem which appeared to arise on 17 July 1998 would probably have been solved by the end of May.

7. Mr Foreman was asked why, when he put the external Colonial Red bricks chosen by Mrs Powell on hold on 8 July 1998, he did not then proceed to get them delivered and to organise the bricklayers to go to the site and start laying them.  He said that he thought ‘this could have been around the time that I was starting to feel that through all of this we were having a lot of problems and I had just about had enough ...’  He said that in 37 years in the building industry he had never had a customer like Mrs Powell.  The building of Mrs Powell’s house had caused tensions between he and his wife and children, and his other work was falling behind.  He said he just didn’t want to continue with the project.  He said he had tried his hardest but ‘we weren’t getting anywhere, with anything’.  He said that on numerous occasions Mrs Powell had commented that he was helping her, and he had gone out of his way to do that, and then in the very next breath she would put him down saying he wasn’t helping.  He said that he didn’t think it would have mattered how hard he tried or how many hours he worked, there had not been a brick laid and they hadn’t got to the internal parts of the job, to the laying of the tiles, to the next concrete floor which was on the first floor.  He was not prepared to go through working seven days a week and having an upset family.  He thought it better for him to just say ‘look, I have tried my hardest but I can’t try any harder, that’s the end’.  He said that he ‘thought with the problem we had to this stage, that this was only the start and that for the rest of the contract it was just going to be an absolute nightmare for probably both parties, and definitely us for sure, because it would be better to cancel the contract and let Mrs Powell get somebody else to build the house and that was it.’

8. I am satisfied that at this time he started to have discussions about the contract with Mr White, including discussions about the problems that they had had in the past and problems they expected to have in the future.  He said that he couldn’t see that the house was ever going to get completed and he thought it was going to hurt Foreman Homes financially in the long run.  He said to Mr White:  ‘I can’t work on this contract any longer because it is taking up all my time and I think we need to cancel it because it is going to go on forever’.  I am satisfied that these discussions occurred during the week before 13 July 1998.

9. Mr Foreman also said in evidence:  ‘The situation, as far as I can recall, was that Mrs Powell just could not make up her mind on any stone or any brick that she wanted to use, basically, from January onwards.  That basically is the whole crux of the matter as far as I’m concerned, is that the choice of bricks and the choice of stone determined the situation for us to cancel her contract’. 

10. Mr White was asked:

    Q...... Whose decision was it, from your company, to terminate Mrs Powell’s building contract.

    A.On consultation with Brian, after problems that he had experienced with selection of bricks and the changes in orders and so forth - nothing in writing in respect to that, as far as I can remember - we felt that, on 13 July when we got another order for 10,000 bricks, which we thought would be most probably over the required amount that was required to do the job, and we felt that we would be still in a problem situation of having to sort out bricks when they arrived on site, selections of the bricks to be used because of the request for over-ordering for those particular bricks, we thought, just for everything that had gone in the past, it was at the stage where we could not see ourselves completing that job to the satisfaction of Mrs Powell, and her sort of threats to Brian during the course causing him some anxieties, we decided that we would cancel the contract on that basis.

11. He was also asked:

    Q...... Was there one factor that determined you to make the decision to terminate Mrs Powell’s contract, or was there more than one factor.

    A.I would say there was more than one factor.

    Q...... Perhaps if you could list them for me.

    A.The brick selection was the major one.  The situation of her change of mind on numerous things that we couldn’t come to agreement on, things that she said about our company, things that she inferred about Brian Foreman as a competent person.  Those type of things I thought we were being very patient up until that time, and it was affecting Brian’s health and I felt, in the interest of Brian as a man too, that he needed to have that release from that particular situation and move on with his other work that he was doing as well, but he was doing that with Mrs Powell’s job also in mind.’

12. And in cross-examination:

    Q...... So if the external brick selection and the stone selection were in place with those materials available, the internal feature bricks had been selected and there was, according to Brian Foreman, ample of those bricks on hold, and there were bricklayers available, why didn’t you go ahead with the project at that time.

    A.I felt that - and in confidence with Brian, we felt that the selection of 37,000 colonial reds was over the top.  Then the 10,000 that was ordered for the terracotta blues was again over the top.  We would then be in a position that these particular bricks would be chosen by Mrs Powell in batches, most probably sent to the site, and we would go through the same scenario as we did before with the return of some of those bricks and costs involved of returns may have to be borne by us as builders.  We just thought everything was over the top and we just, at that stage, had had enough.  We just could not see ourselves continuing on with feature selections which would have the same effect with materials and so forth as we had in the past.  It was just at that stage that all these requests were always over the top to make us just do an extra lot of work for something that we most probably would find ourselves in a disaster situation again, so that was the reason why we terminated the contract.

13. He was asked whether he had considered writing to Mrs Powell confirming the selection of her building materials, advising her that he was not prepared to hold 37,000 bricks but would hold a certain specified lesser number, and further that he was prepared only to continue with the building of her house on the basis that there be no further changes.  He replied he did not consider writing to Mrs Powell in those terms.  He said:

    We had been amply patient with this matter and at that stage Brian had thrown his hands up in the air and said, ‘Here we go again’ and I was just at that stage in agreement with him, that we were going to be always pursued with selections that would cause us problems.  Also our sub-contractors, that wouldn’t suit Mrs Powell.  She had already canned two of our subcontractors, Steve Piombo and also Pedar Sorensen saying that they weren’t quality tradesmen and we felt this wouldn’t (sic) happen with our tilers and things like that.  We just knew that we were going to be in for a fight all along the way and this was an opportune time to say, ‘This is it, we have had it’.

14. I have set out in some detail the evidence of Mr Foreman and Mr White as to why Foreman Homes terminated the contract because in its pleadings and in submissions during the course of the trial, Foreman Homes relied on breaches by Mrs Powell of express terms of the contract to justify its termination.

15. In his final submissions, the defendant’s counsel quite properly submitted that no individual breach of any express term warranted termination of the contract at the time that it was terminated by the defendant.  I am satisfied that the allegations numbered 2.2, 2.3, 2.4, 2.5 and 2.7  which allege that the plaintiff had breached expressed terms of the building contract were not made out by the defendant.  These allegations were that Mrs Powell gave instructions to suppliers or sub‑contractors despite a request not to do so by letter of 27 March 1998; she insisted that moss rocks be placed in a position where the defendant’s work was inconvenienced; she erected a side fence restricting the defendant’s access to the works and she did not provide an all weather track; she demanded that certain tradesmen not undertake work on her house despite the defendant’s confidence in their ability and their experience; and she refused to pay extra money despite requesting variations which, pursuant to the provisions in the contract, increased the contract sum.  Even if some of this conduct had occurred at some time during the building works, I am satisfied that any such breaches were accepted by Mr Foreman.  Some of them were authorised by him.

16. The remaining allegations in the pleadings are that Mrs Powell breached an express term of the contract by delaying the selection of bricks in breach of clause 8.5 of the contract (allegation 2.1), and by ‘expressing a continual lack of confidence in the defendant’s proven professionalism and standards of excellence which has denigrated the working relationship to such an extent that it was not possible to be restored to a satisfactory basis’ (allegation 2.6).  As to this latter allegation no express term of the contract is referred to.  I find that for the reasons set out herein Mrs Powell did not delay in selecting brick (or stone) such that she was in breach of clause 8.5.

17. The thrust of the submission on behalf of the defendant at the end of the trial was that a contractual term should be implied which was said to be fundamental to the contract.  It was submitted that the Court should imply a term that an effective working relationship between the builder and owner must be maintained and continue throughout the performance of the contract.  It was submitted that this was a job that went terribly wrong.  It was submitted: ‘The builder tried until it began to take a mental toll on Mr Foreman to the extent of his home and family and the other consequences about which Your Honour has heard, and looking at the total picture the builder was justified legally, commercially and morally ... to take the stand it did’.  It was submitted that the working relationship between Mrs Powell and Mr Foreman had deteriorated to such an extent that it was imprudent for Foreman Homes to continue with the construction.  The contractual expectations of the parties could no longer be realised.

18. Clause 29 of the contract makes express provision about the circumstances in which the builder may terminate.  It expressly provides that the builder may terminate the contract by written notice if Mrs Powell failed to make any payment due under the contract; if she took possession of the work without the builder’s consent; if she disobeyed clauses 8.4 or 10.5; or if there was any other substantial breach of the contract by her.  The contract defines ‘substantial breach’ as a serious disobedience of the contract showing that Mrs Powell does not want to respect it any longer.  It is not suggested that Mrs Powell was in default of any payment or that she took possession of the work without the builder’s consent.

19. Clause 8.4 provides that Mrs Powell must not give any instructions to the builder’s suppliers or sub‑contractors or to any of its workers, except the supervisor Mr Foreman.  I am satisfied that any instructions Mrs Powell may have given to suppliers or sub‑contractors after March 1998 were either directed by, authorised by, or accepted by Foreman Homes.  Clause 10.5 of the contract provides that Mrs Powell, or any visitor to the site, must not disrupt the work.  I am satisfied that Mr Foreman accepted the placing of moss rocks by Mrs Powell in a position which might have caused, but did not in fact cause, inconvenience to any work.  Was there any ‘other substantial breach’ of the contract by Mrs Powell? 

20. I am satisfied that Mrs Powell was not guilty of any serious disobedience to the contract which indicated that she did not wish to respect it any longer.  My findings indicate that most of the problems which arose in the selection of stone and brick were attributable to Mr Foreman.  I have found that he told Mrs Powell that Wistow Bookleaf was unavailable when he knew that was not the case, and that his failure to order All‑Stone in a timely way prevented that stone being used.  The fact that the plans and specifications did not accommodate Mrs Powell’s preferred stone was a significant factor in the dispute which led to the deterioration of the working relationship between Mrs Powell and Mr Foreman.  Another significant cause of that deterioration was the failure by Mr Foreman to seek, obtain, and give Mrs Powell in a timely way the assurance that she sought about the width of Kanmantoo stone which would be used to build her house.  He also failed to act in a timely way in ordering the internal feature bricks.  All these matters were Mr Foreman’s responsibility.  No conduct of Mrs Powell constituted serious disobedience of the contract showing she did not wish to respect it any longer.

21. I am satisfied that both Mr Foreman and Mr White found Mrs Powell an extremely difficult person to deal with.  These reasons, perhaps unfairly to Mr Foreman and Mr White, might suggest that Mrs Powell was at all times fair and reasonable in her dealings with Foreman Homes.  Reading Mrs Powell’s letters to Mr Foreman and Mr White satisfies me that both men justifiably felt slighted, frustrated, irritated by, and even insulted by Mrs Powell from time to time.  However, Mr Foreman knew of Mrs Powell’s personality before the contract was signed.  I can understand how Mr Foreman and Mr White felt at about the beginning of July 1998.  I accept that Mr Foreman felt that he had given the building the best that he had and that he couldn’t go on.  However, I am not satisfied that a builder can justifiably and lawfully terminate a contract where those circumstances arise, particularly where the builder has been the major contributor to those circumstances arising.  The contract could only lawfully be terminated pursuant to its express terms or if there had been a breach of an implied term to the effect that there must always be an effective working relationship between the owner and the builder’s supervisor.  I am not prepared to imply such a term in this contract.  I am not satisfied that this contract would be ineffective without it.  The contract provided for extensive dispute resolution procedures which neither party to the contract sought to use.  Furthermore, I do not consider it would be reasonable to imply such a term in a contract which contains express terms regarding the builder’s right to terminate.  Finally, any such term is incapable of clear expression such that it could be construed and applied equitably.

1. I am satisfied that in the circumstances of this case the builder could not lawfully terminate its contract with Mrs Powell because it had had enough, it expected continuing problems into the future, or that it was expecting to be financially embarrassed by the contract continuing.

2. In my judgment Foreman Homes was not lawfully entitled to terminate Mrs Powell’s contract in July 1998.  By doing so it was in breach of its contract with Mrs Powell.

3. Mrs Powell submitted that if I so found I should order Foreman Homes to perform the contract and complete the building works.

4. The evidence was that at the time of trial Foreman Homes was not conducting business as a builder.  It still had a builder’s licence but that was due for renewal in July of this year.  I do not know whether it has been renewed.  Whatever the position may be as to that, Foreman Homes does not currently have a registered building work supervisor, presumably because it no longer performs building work.  Mr Foreman is no longer employed by Foreman Homes.

5. There is abundant evidence before me which satisfies me that a working relationship between Foreman Homes and Mrs Powell cannot be restored.

6. During the trial it was submitted that I should order specific performance because, upon the failure by Foreman Homes to complete the works, Mrs Powell might have access to insurance which is required under the Building Works Contractors Act.  I was told that such insurance might become available on the non‑completion of building work for certain reasons.  I am not prepared to order specific performance of this contract in the knowledge that it would not be performed.  I am satisfied that it would not and could not be performed by Foreman Homes.  Accordingly, I refuse to order specific performance.  Mrs Powell is entitled to damages.

7. The parties agreed that the reasonable cost to complete Mrs Powell’s house in accordance with the contract documentation was $225,000 as at 20 June 2000.

8. The parties also agreed the plaintiff’s claim for rent and storage in the sum of $8,750, including interest, to 21 June 2000.  The contract sum was $184,000.  Mrs Powell paid $29,247.50, being a deposit of $2,000 and the first progress payment of $27,247.50.

9. On those figures Mrs Powell would be entitled to judgment in the sum of $70,247.50 plus $8,750, being $78,997.50.

10. In the action Foreman Homes made a counter-claim against Mrs Powell for the sum of $15,437.25.  By the end of the trial that figure had reduced to $2,202.25.  The counterclaim was for damages for alleged breach of contract by Mrs Powell.  Mrs Powell was not in breach of the contract so the counter-claim fails.

11. However, in assessing Mrs Powell’s damages on her claim I consider I should take into account any payments made by Foreman Homes for work done which has been to Mrs Powell’s benefit for which she should pay.  There are five items potentially falling within this description.

12. The first is the cost of the inspection and report by engineers on 30 March 1998.  I consider that only part of the sum of $573.75 should be borne by Mrs Powell because at least some of the matters which were the subject of the report were attended to by Foreman Homes.  I allow $400 of this sum in favour of Foreman Homes.  The next is a sum of $90 for testing of concrete.  I consider Mrs Powell should pay for this sum.  This was an additional test which she asked for which proved unnecessary.  I consider Mrs Powell should bear the cost of removal of certain soil generated other than by Foreman Homes and I consider that the full sum claimed of $620 should be borne by her. I consider that Mrs Powell should bear the full cost of the aggregate Mr Foreman supplied to the next door neighbour’s driveway.  The final matter concerns the cost to return the bricks delivered to the site on 13 May 1998.  I find that Mr Foreman and Mrs Powell agreed that Mrs Powell could ‘sleep on’ the selection of bricks over night and accordingly she should not have to bear the cost of the return of these bricks.

13. The total of the four items I consider Mrs Powell has responsibility for total $1,272.50.

14. Accordingly, Mrs Powell is entitled to judgment in the sum of $77,725.