R Developments Pty Ltd v Forth - [2017] ACTCA 38

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL

Case Title:	R Developments Pty Ltd v Forth
Citation:	[2017] ACTCA 38
Hearing Date:	2 November 2016
DecisionDate:	31 August 2017
Before:	Refshauge, Burns and Collier JJ
Decision:	Appeal dismissed with costs.
Catchwords:	APPEAL – APPEAL FROM SUPREME COURT – primary Judge dismissed claim for damages for breach of contract – builder not entitled to terminate contract for failure of owner to comply with contractual requirement to supply evidence of capacity to pay – appeal that primary Judge erred in his decision – appeal dismissed CONTRACT – INTERPRETATION – standard form building contract – the effect and nature of contractual clauses – principles of contractual interpretation – owners’ obligation to supply evidence of capacity to pay ended once builder commenced works – obligations waived by builder – no evidence that builder had demanded owner provide information pursuant to further contractual clause – notice did not adequately identify alleged breach – further clause not invoked
Cases Cited:	Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 Hounslow London Borough Council v Twickenham Garden Developments Ltd (1970) 1 Ch 233 FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; 233 CLR 115
Parties:	R Developments Pty Ltd (Appellant) Andrew Stephen Forth (First Respondent) Ksenija Maria Nemet (Second Respondent)
Representation:	Counsel Dr A Greinke with Mr J Trust (Appellant) Mr B Katekar with Mr D Robens (Respondents)
Solicitors Meyer Vandenberg Lawyers (Appellant) Kamy Saeedi Lawyers (Respondents)
File Number:	ACTCA 7 of 2017
Decision under appeal:	Court/Tribunal: Supreme Court of the Australian Capital Territory Before: Mossop AsJ Date of Decision: 4 February 2016 Case Title: R Developments Pty Ltd v Forth & Anor Citation: [2016] ACTSC 8 Court File Number: SC 201 of 2014

THE COURT:

Introduction

At first instance in these proceedings the primary Judge dismissed a claim for damages for breach of contract (or in the alternative, restitution on a quantum meruit basis), interest, and costs. The contract the subject of the claim at first instance was a standard form building contract, entitled “ACT Home Building Contract” and published by the Master Builders Association of the Australian Capital Territory, and entered into by the parties on 27 February 2013. The contract set out the terms of agreement for the construction of a residence in Yarralumla for Mr Forth and Ms Nemet (now the respondents to this appeal) by R Developments Pty Ltd (now the appellant). His Honour referred to Mr Forth and Ms Nemet as “the Owners” and R Developments Pty Ltd as “the Builder”. It is convenient for us to do the same.

The key issue before his Honour was whether the Builder was entitled to terminate the contract for failure of the Owners to comply with a requirement under the contract to supply evidence of their capacity to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: R Developments Pty Ltd v Forth [2017] ACTCA 38
Case: [2017] ACTCA 38
Decision Date: 31 August 2017

CaseChat Overview and Summary

The appeal concerned a dispute between R Developments Pty Ltd (the builder) and the owner of a property (the owner) regarding a standard form building contract. The primary judge had dismissed the builder's claim for damages for breach of contract, finding that the builder was not entitled to terminate the contract. The builder appealed this decision to the Supreme Court of the Australian Capital Territory.

The central legal issues before the Court were the interpretation of specific clauses within the standard form building contract, particularly concerning the owner's obligation to provide evidence of their capacity to pay and the builder's right to terminate the contract for non-compliance. The Court was required to determine whether the owner's obligation to supply such evidence had ended, whether the builder had waived this requirement, and whether the builder had validly invoked further contractual clauses relating to alleged breaches.

The Court reasoned that the owner's obligation to provide evidence of capacity to pay ceased once the builder commenced the works, a point which had been reached. Furthermore, the Court found that the builder had waived this particular obligation. The Court also noted that the builder had not invoked a further contractual clause that would have allowed them to demand such information, and that the notice provided by the builder did not adequately identify the alleged breach. Consequently, the Court held that the builder was not entitled to terminate the contract.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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