RCI Infrastructure Pty Ltd v Antipodean Land Developments Pty Ltd
[2021] VCC 452
•27 April 2021
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
General List
Case No. CI-19-03906
| RCI INFRASTRUCTURE PTY LTD (ACN 091 448 770) | Plaintiff |
| v | |
| ANTIPODEAN LAND DEVELOPMENTS PTY LTD (ACN 605 080 224) | Defendant |
---
JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10, 11, 12, 15,17, 24 March 2021 | |
DATE OF JUDGMENT: | 27 April 2021 | |
CASE MAY BE CITED AS: | RCI Infrastructure Pty Ltd v Antipodean Land Developments Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 452 | |
REASONS FOR JUDGMENT
---
Subject:Claim for debt or damages
Catchwords: Contract for execution of civil engineering work; contract constituted by acceptance of quotation; “superintendent” certifies for progress payments and variation for removal of contaminated soil; subsequent contention that cost of contaminated soil removal covered by earlier progress payments; prior payments could not be re-characterised while removal work accepted as a variation; whether parties abandoned contract for micro-boring in face of problems encountered due to existence of voids in soil to be bored; no abandonment; charges for shields, plates and fences not recoverable upon a quantum meruit basis; no entitlement to recover charges based on equitable estoppel.
Legislation Cited: Building and Construction Industry Security of Payment Act 2002; Civil Procedure Victoria [I 36.07.65] 4177 Service 276
Cases Cited:Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446; Fitzgerald v Masters (1956) 95 CLR 420; CGM Investments Pty Ltd v Chelliah (2003) 196 ALR 548; Summers v The Commonwealth (1918) 25 CLR 144; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1
Judgment: 1. Within 14 days of this day the parties must bring in short minutes to give effect to these reasons.
2. Costs reserved.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D Harrison | Wisewould Mahony |
| For the Defendant | Mr W Thomas | Piper Alderman |
HIS HONOUR:
Background
1In 2018 the defendant, Antipodean Land Developments Pty Ltd (“Antipodean”), undertook a redevelopment of a number of former shops at 77−83 Nicholson Street, Brunswick East. (Plaintiff’s opening outline, paragraph 4) The site had been operated as a quarry between 1905 and 1914 and had been backfilled in 1931. The old shops, therefore, were likely built just before or just after World War II. (Transcript (“T”) 22, Lines (“L”) 3−7)
2As part of the development, Antipodean and its consultants envisaged discharging sewage from the new apartments into an existing sewerage line to the north of the development site, running east-west, as depicted in Annexure A to the Further Amended Statement of Claim (hereinafter referred to as the Statement of Claim). (Court Book (“CB”) page 11 O) Authority was initially sought from the utility company providing sewerage and water services to this land, Yarra Valley Water, for the new building to be erected across the relevant easement, which approval was denied. (T3) As a result of that refusal, the development proceeded on the basis that the sewerage line depicted in blue on the annexure would be abandoned, and a new sewerage line would be constructed around the boundaries of the site on what was described as a dog-leg laneway. It is depicted in red on the annexure. (T5) That plan is also annexed to these Reasons.
3As a consequence of the need to build a new sewerage line traversing approximately 124 metres (T91, LL13−16), Lanco Group Pty Ltd, which was managing the sewerage aspects of the development, sought tenders for boring work associated with the construction of the new sewerage line along the dog-leg. Mr Ognenovski, a project manager at Lanco, sent an email requesting quotations to a number of companies on 29 March 2018. The email included the following attachments:
“1Preliminary sewer reticulation plan (18031s1p1)
2 Schedule of quantities for sewer supply (excel format)
3 Lanco Group’s Contractors Compliance Checklist
4 Lanco Group’s Contractor’s Tender Information Sheet
5 Geotechnical Report”
4The deadline for tenders was close of business 8 June 2018. (CB 280) One of the contractors to whom the tender documents were dispatched was the plaintiff, RCI Infrastructure Pty Ltd (“RCI/Infrastructure”). The second attachment, described as “Schedule of quantities”, was headed “Bill of Quantities” and was in the form of a spreadsheet. The Bill of Quantities set out various items and sub-items of work entailed in the completion of the project, calling for tenderers to nominate prices for each item or sub-item. It included notes on the final page, inter alia:
“1.This contract is not subject to rise and fall in materials and labour.
2. The contractor shall price the bill of quantities as presented without modification. If the contractor disagrees with the quantities and deems variations are applicable at time of tender, these variations shall be listed as an addendum to the tender.” (CB 284)
5Sub-item 1.02 identified as part of the work “Site establishment and setting out of works”, and in Item 2, under the heading “Sewer main”, identified the following works, inter alia:
“Construction of new sewer pipe, including excavation and shoring, pipe supply, installation of pipe, placement of embedment material, refilling of excavations with appropriate backfilling material ...” (CB 282)
6Somewhat confusingly, the Bill of Quantities included two Items 9.03. The second such item presumably should have been designated Item 10.03. The first Item 9.03 stated:
“Any additional item that is not here mentioned in this bill of quantities. Please state what has been allowed for, if anything.”
7The Lanco Group’s contractor’s tender information sheet required a contractor to take all necessary steps to avoid damage or interference with neighbours and property adjacent to the contract site, and required that a contractor “shall carry out and provide such shoring or other protective and precautionary measures as may be necessary ...” Other provisions in the same document required the provision of “shields if required” and “hand rails for shields for fall protection if [excavations are] over 1.5m deep.” The document also required an “ability to make sure all open holes are fully protected eg fencing and or steel plates as required”. It also referred to steel plates used on roads [viz, to cover excavations]. (CB 288)
8Also included in the tender package was a document “CHECKLIST – Contractor Compliance to Lanco group Criteria” which included a list of matters “for which Non Conformances will be issued”, one of which was “Failure to use shields where required or operating without shields without proper documentation”. (CB 289)
9By an email sent 14 June 2018, Mr Ashley Gray, an estimator for the plaintiff RCI Infrastructure Pty Ltd, submitted a quotation. (CB 105) The quotation was constituted by the Bill of Quantities prepared by Lanco with rates and amounts included with a contract price of $268,958.06; Goods and Services Tax of $26,895.81; and a total quoted price of $295,853.87. There were no rates for extra charges in the event that rock might be encountered. (CB 108) The quotation included the statement:
“Note: Progress payments are due within 14 business days of invoice, as per the Building and Construction Industry Security of Payment Act 2002. Failure to pay may result in legal proceedings and costs.”
10The quotation also included the following statements, inter alia:
“Type of Shoring Allowed: light guard shields, ring and timber, bore shields.
Anticipated Ground Conditions: clay.”
11Mr Ognenovski of Lanco produced a table comparing quoted prices from some six contractors including RCI. RCI’s was the lowest, at $268,958.06 exclusive of GST; being more than $100,000 less than the next highest quote, Sands Plumbing, $398,600.00 exclusive of GST; and less than half of the highest quotation, $590,400.00 exclusive of GST, by Helms Plumbing. (CB 353)
12At some point Mr Ognenovski spoke to RCI’s General Manager, Mr Ford, sending a follow-up email stating:
“... please review your price for this one and make sure that everything is allowed for.
Keep in mind that the ground conditions are pretty shitty for boring.
I also need the rock rates filled out.” (CB 376)
13Mr Gray submitted a revised quotation under cover of an email dated 20 August 2018, observing:
“Our boring works have been repriced based on information on bad ground conditions and to work around existing developments in the area.” (CB 374)
14The revised Bill of Quantities (CB 110−112) provided for an increased quoted price of $329,102.65; Goods and Services Tax $32,910.27; Total $362,012.92 inclusive of Goods and Services Tax. The key items, namely Items 2.02 and 2.03, providing for boring of a 225mm-diameter sewer for respectively 22 lineal metres and 99 lineal metres, were increased from a figure of $30,015.26 for Item 2.02 in the initial quotation to $44,585.20, and a modification from $110,797.83 for Item 2.03 to $156,372.48 in the revised quotation. The former Bill of Quantities, as noted above, included an opportunity to add additional items as Item 9.03 (second series) at the option of the tenderer. No additional items were included in either RCI’s original or revised quotation.
15By email dated 23 October 2018, Mr Ognenovski informed Mr Ford of RCI that Antipodean “accepts your quote for the works.” (CB 409)
16Work commenced on the new sewerage lines in the second half of November 2018. By a tax invoice dated 30 November 2018, RCI sought payment of $50,982.00; Goods and Services Tax $5,098.20; Total $56,080.20. The tax invoice included a statement: “This Payment Schedule is issued in accordance with the Building and Construction Industry Security of Payment Act 2002”. (CB 124)
17Mr Ognenovski, on behalf of Lanco, signed Payment Certificate No: 1 certifying this amount for payment. The certificate was dated in its heading 23 November 2018, but the date at the foot was 10 December 2018. (CB 33, paragraph 15(e))
18By an email dated 3 December 2018, Mr Ognenovski circulated revised plans for the sewerage lines to Mr Angus Brooks, Construction Manager at Fontic Constructions, the builder for the overall project; Mr Sean Rooney of Debtech, Antipodean’s Project Manager; and Mr Ford of RCI: revised “IFC C design plans”. According to the email, the notable changes were:
“− Main to be bored within 300[mm] steel sleeve
− Plastic thinsulators to be installed every meter to centralise pipe.
− Anulus to be grouted
− Any exposed PVC to be wrapped with the geotextile wrapping as per Type D embedment
− All property branches to be VC”
19He asked Mr Ford to “Please provide extra over for the steel jacking pipe boring.” (CB 507).
20By a quotation dated 4 December 2018 styled “Variation Quotation No# 2”, Mr Gray of RCI provided a quotation covering the modified work mentioned by Mr Ognenovski in his 3 December email. There is no evidence that this quotation was ever accepted on behalf of Antipodean.
21RCI then issued a tax invoice dated 19 December claiming a further $146,467.00. This brought the total claims under RCI’s contract with Antipodean to $197,449.00 exclusive of GST. (CB 125−6) This amount was paid by Antipodean, having been certified by Mr Ognenovski under Payment Certificate No: 2, dated 19 December 2018. (CB 128; and CB 33−4, paragraph 16). At this point no actual boring, as distinct from the completion of preparatory work such as sinking of shafts and so on, had actually occurred.
22With work resuming following the Christmas/New Year break, Mr Ognenovski sent an email to Mr Brooks of Fontic and Mr Rooney of Debtech on the afternoon of 24 January 2019, advising:
“Hi Guys,
Just got a call from RCI.
They are having trouble getting the bore through, I will be attending site tomorrow morning to investigate what the issue is.” (CB 521)
23There was a site meeting the following day, 25 January, attended by Mr Ognenovski; his superior at Lanco, Mr Tony Georgiadis; and Mr Aaron Marbus of RCI. Mr Ford, the General Manager, was away on vacation. (T323, LL20−25) Arriving on site, Mr Ognenovski noted that the boring contractors (subcontractors to RCI, Edge Underground), had their boring machine set up in a shaft sunk to the level at which the bore was planned to traverse the length of the dog-leg laneway (Ibid, LL30−31) Mr Ognenovski reported to Mr Brooks of Fontic and Mr Rooney of Debtech, describing an onsite meeting on the morning of 25 January 2019 advising:
“Issue on site:
− The bore head is deflected vertically and horizontally due to the unknown ground conditions”
24Mr Ognenovski said that the contractor was to “look at other alternatives eg. Filling in void with grout and attempt to re bore.” (CB 533) Mr Ognenovski’s description of the problem was based on what he had been told by Mr Marbus of RCI. (T324, LL11−13)
25Subsequently there was a meeting at Lanco’s premises attended by Mr Ognenovski; Mr Georgiadis, his superior at Lanco; Messrs Ford and Marbus of RCI; and one other unnamed RCI representative. Also in attendance were Mr Sean Rooney of Debtech and Mr Angus Brooks of Fontic. Notably, there was no representative of the organisation tasked with doing the boring as subcontractor to RCI, namely Edge Underground. (Ibid, LL14−31) According to Mr Ognenovski:
“... we discussed the bore head – they [presumably the RCI representatives] were saying the bore head was deflecting vertically and horizontally ... they wanted to give us rates ... for the borer to go on a day rate to complete the works ...” (T325, LL9−15)
26A number of options were discussed, which led to RCI’s providing Mr Ognenovski with what might be described as an options paper, dated 7 February 2019. (CB 541−544) The first option was to abandon boring and lay the sewer by cut and cover: that is, excavate a ditch for the length of the dog-leg, laying the sewer pipe at the base then backfill. The second option was to “hand tunnel” from the existing bore shaft which had been sunk at both ends of the dog-leg and also at its angle. The third option involved continuation of the boring at a daily rate.
27In a subsequent email of 12 February 2019, Mr Ognenovski reported to Mr Brooks of Fontic that to “continue boring” would cost $663,703.97; plus the removal of contaminated soil from the bore, constructing by way of open cut, would cost $2,064,699.15. Hand tunnelling would cost $3,143,500. These were the costings provided by RCI. Mr Ognenovski commented:
“It is obvious from the rates provided for open cut and tunnelling that the costs are just ridiculous.
It may be best that we just try and stick to boring it.
No contract was ever signed, for small projects like this we don’t usually organise one, we just go off our BOQ.” (CB 545−6)
28On 26 February 2019, RCI issued an invoice described as relating to Claim No 3. It included a variation in the sum of $43,459.50 relative to the removal of contaminated soil from the site. It also claimed some $83,250.00 for “equipment hire from 14/1/19 to 28/2/19”, and some $44,000.00 being “costs for downtime to boring contractor”. (CB 129−130)
29Mr Ognenovski issued a document styled “Contract Variation Order – Number: 1”, dated 6 March 2019, in which he approved the claim for $43,459.50 for removal of contaminated soil from bore shafts as a variation, but disallowed the other two items, which he described as “V2” and “V3”; viz, variations 2 and 3. (CB 133)
30By an email of 11 February 2019, Mr Ford explained the items described by Mr Ognenovski as “V2” and “V3” as follows:
“Due to the failure of the bore, there will be costs associated with the boring contractor. We also have shields and road plates on site that we will need to claim for. Please confirm that these costs are acceptable and I will raise an invoice.” (CB 551)
31In a further email to Mr Ognenovski sent 21 February 2019, Mr Ford described his company as being “in the midst of trying to sort out the boring issue”. He continued:
“... but where are we at with submitting a claim for the works below? We are currently burning money with shield hire, road plate hire etc. I really need to get an invoice raised to cover these costs.” (CB 575)
32The 21st was a Thursday. The following Monday morning, Mr Ford emailed Mr Ognenovski asking if there was “any news” on this issue. (CB 574−5)
33On 5 March 2019, Mr Brooks, Construction Manager at Fontic, sent an email to Mr Ognenovski asking him to “review and confirm Claim 2 certification”. He noted that “60% of the boring works (items 2.02 & 2.03) were certified and paid to RCI – however no boring works have been completed, only the excavations”. This left only $80,383.08 of the original contract price unclaimed and available for the balance of the work. He said:
“The V02 amount will need to be applied against the apparent overclaim on Claim 2. Will leave you to assess and resolve this.” (CB 587)
34By a lengthy letter dated 8 March 2019, Mr Ognenovski reviewed the deadlock which had been reached, and advised:
“Variation 2 [the claim for extra payment for removal of contaminated soil] has already been paid as per the previous claim. So far, the client has paid you $197,449.27 for three bore shafts and removal of the contaminated soil.” (CB 616−617)
35He explained the rejection of the claim for downtime for Edge on the basis that when he and Mr Georgiadis attended the site “on Friday [25 January] ... there was no borer on site”. He continued, “you have been paid $153,989.77 for three shafts and attempting to bore.” As to the claim for equipment hire, he said “We believe based on current rates of hiring equipment with margins is around $5000-$6000 for the hire.” This compares to a weekly rate claimed in proposed variation 2 of $12,668.47. (T434−5)
36On 14 March 2019, Mr Ognenovski referred to correspondence “from the environmental guys” asking RCI to “get that cleaned up”, [apparently, a sewer leak]. The email concluded:
“Can you please install the IS and abandon that’s (sic) sewer ASAP so I can organise the field note to be supplied to YVW?”
37The following day, Mr Ford of RCI asked to discuss the matter by telephone. Later the same day, 15 March, Mr Ognenovski asked:
“When will you be able to get on site to do these works.
Are you also able to start on MH2 in the site at the same time of installing the IS?” (CB 622−3)
38The following week, on Wednesday, 20 March, Mr Ford told Mr Ognenovski:
“We did everything possible to continue to move forward with the works. Unfortunately the stage of the works determined that when the bore failed, site works ceased until a resolution could be found. Both RCI and Lanco Group worked together to provide alternative solutions. At this stage we still do not have an answer on which way to proceed.
I believe our variation submitted for hire of equipment still remains valid. Can you please confirm when this, as well as the contaminated spoil removal and boring costs will be paid.”
39Later the same afternoon Mr Ognenovski replied:
“I thought you were going to go back and review the rates provided for the shields?
Have you had a chance to review?” (CB 679−80)
40Mr Ford replied advising that:
“I still cannot get anywhere near the pricing that Tony mentioned. Shield hire for 8 x shields on site for 7 weeks. $900 per week each = $50,400. The road plate hire rates will remain the same. The temporary fence hire rates remains the same.”
41He complained that the costs of removing the contaminated soil had not been paid, and:
“The costs for the failed bore need to be addressed and paid.”
42Effectively Mr Ford, on behalf of RCI, declined to proceed with further work until these matters were resolved. (CB 678) In a further email of 28 March he said:
“I will be raising a variation for the hire of the shields and road plates for March.” (Ibid)
43Mr Ognenovski said that he had no directions as to RCI’s claims but “they [presumably Antipodean] want you back on site doing the IS and manhole works prior to proceeding with the claim.” (CB 677)
44Mr Ford replied, on 29 March, with respect to the demand that RCI return to site to carry out other works, saying: “I need this [the outstanding claims made by RCI] sorted before we can continue with any further works.” (CB 676)
45The deadlock continued. Mr Ognenovski advised Messrs Brooks and Rooney of Fontic and Debtech that RCI threatened to remove its equipment and leave the site “unless they get their payment for the variations”. (CB 689) Following a further threat of removal, Mr Ognenovski asked Mr Ford to take no such action, pending a site meeting the following Monday, 15 April. (CB 713)
46Apparently that site meeting failed to resolve matters. Therefore, on 17 April, Mr Ford threatened to remove all equipment and backfill the excavations, observing, “We cannot continue to accrue costs. I will also commence proceedings under the ‘Securities of Payment Act’.” (CB 752−3) Apparently these steps were ultimately taken, but not till the first week of May.
47To resolve the sewerage issue, Lanco, on behalf of Antipodean, lodged an online application with Yarra Valley Water setting out the history of events, observing:
“We seem to be stuck with the only option of re modifying the building to keep the existing 225 sewer running through the site within the 2.44m easement.” (CB 141)
48This application was lodged in August of 2019. (CB 144) The effect was to seek permission from Yarra Valley Water to build the apartment development “1.0m clear of the sewer for the ground floor and cantilever the second [sic, scil first] floor over the easement”. The effect therefore would be to continue using the shorter sewerage line, coloured blue on the diagram at CB 11 O, and discontinue the attempt to replace it with the much longer red-coloured “dog leg” course following the laneway. This application to Yarra Valley Water was ultimately successful. The cost of work to “tap in” to the existing sewer was $30,305. (T419, LL4−6) Even with wasted expenditure, the sewerage costs incurred were less than the original $362,000 plus Goods and Services Tax quoted by RCI. (T419, LL13−17) Nevertheless, the ultimate outcome might not be regarded as advantageous to Antipodean, because it required the deletion of a complete apartment from the development scheme, and therefore a loss in the revenue which could be derived from it. (T445, L12–T446, L4)
This proceeding
49Solicitors acting for RCI commenced this proceeding on 21 August 2019 against Antipodean Land Developments Pty Ltd as the sole defendant.
Statement of Claim
50By its Further Amended Statement of Claim filed pursuant to leave granted at the commencement of the trial, which I refer to hereinafter as “the Statement of Claim”, RCI alleged that “in or about the period 29 May 2018 to October 2018” Antipodean requested RCI “to bore and install a new sewer line along a dog-leg laneway connecting Little Miller Street to the site” 77−83 Nicholson Street, Brunswick East, “together with associated works.” This request was said to be partly oral and partly in writing.
51Reference was made to the Bill of Quantities emailed by Mr Ognenovski of Lanco to RCI dated 23 October 2018 and to discussions between Mr Ognenovski of Lanco on behalf of Antipodean and Mr Craig Ford on behalf of RCI. It was alleged that Antipodean accepted quotations for the works furnished by RCI on 20 August 2018 and 29 August 2018 by an email from Mr Ognenovski of Lanco to Mr Ford of RCI.
52The works were to comprise, it was said:
(a) excavation of three bore shafts;
(b) supported internally with steel bore shields; and
(c) covered with steel road plates; and
(d) protecting the work-site with temporary fencing.
53It was said that contaminated spoil was discovered on the site which required special offsite disposal which RCI offered to do. It was said that this offer was accepted by Antipodean via Mr Ognenovski of Lanco “in or about mid December 2018”, with the spoil being disposed of on 21 December 2018.
54According to the Statement of Claim, “on or about 11 February 2019” RCI informed Antipodean as to the costs of removal, being $43,495.50 plus GST. It was said that “on or about 5 March 2019” Antipodean agreed to pay that amount, but, despite such agreement, Antipodean had “failed, refused or neglected to make payment to [RCI] of the sum of $43,495.50 or any part thereof.”
55Next, it was said that “on or about 23 January 2019”, whilst the parties were “attempting to perform the boring works required”, RCI and Antipodean “discovered that the soil conditions in the laneway contained uncontrolled fill with voids that rendered it impossible to undertake the boring work.”
56Next, it was said that before the original agreement was made, Antipodean “knew that the ground through which [RCI] was to perform the works was in bad condition.” It was said that thereafter, according to the Statement of Claim, while RCI was attempting to perform boring work, it discovered “that the soil conditions in the laneway contained uncontrolled fill with voids that rendered it impossible to undertake the boring work.” It was said that these matters were described in an email from Mr Ognenovski of Lanco on behalf of Antipodean to Yarra Valley Water of 17 April 2019. Accordingly, RCI “did not perform further works at the site under the agreement.”
57It was said next that “on 28 February 2019” Antipodean advised Yarra Valley Water that the works could not proceed and the works would be abandoned. This was said to have been done by email from Mr Ognenovski of Lanco to Yarra Valley Water of 28 February 2019. Antipodean informed Yarra Valley Water that “the works had stopped.” The Statement of Claim referred to emails from Mr Ognenovski of Lanco to Yarra Valley Water sent 28 February 2019 and 17 April 2019.
58Next, it was said that “on or about 30 April 2019” Antipodean applied to Yarra Valley Water for permission to perform alternative works in lieu of the works which it had engaged RCI to carry out, which permission was refused by Yarra Valley Water in a letter dated 8 May 2019 to Mr Ognenovski of Lanco.
59According to the Statement of Claim, “on or about 8 May 2019” RCI removed its shields, plates and fence panels from the site, rendering an invoice for the use of those items to Antipodean.
60Following a renewed request, Yarra Valley Water gave permission for the alternative works in lieu of the original works by letter dated 30 September 2019 to Mr Ognenovski of Lanco. The alternative works were performed by Helms Plumbing. It was said that by reason of those matters, RCI and Antipodean had “abandoned the agreement, by reason of which the agreement came to an end.”
61Next, it was said that the parties made a “further agreement”, “on or about 23 January 2019, alternatively 25 February 2019, alternatively 10 April 2019,” whereby Antipodean agreed to hire RCI’s shields, plates and fence panels for use at the site. This agreement was said to be “partly oral, partly written and partly to be implied.” The agreement was said to have been constituted by a request by Mr Ognenovski, or alternatively his superior, Mr Tony Georgiades, both of Lanco Group, “commencing on 23 January 2019 and from time to time between upon (sic) until mid-April 2019.” The written portion was said to arise from some twelve emails from Mr Ford to Mr Ognenovski in the period 11 February 2019 to 10 April 2019, and three emails from Mr Ognenovski to Mr Ford in the period 25 February 2019 to 4 April 2019. The implication of an agreement was said to arise from Antipodean’s “continued use of, and deriving of a benefit from, [RCI’s] shields, plates and fence panels remaining at the site.” According to the Statement of Claim, these items were left on site by RCI during the period 23 January 2019 to 6 May 2019. According to the Statement of Claim, RCI invoiced Antipodean in the sum of $180,120 plus Goods and Services Tax, total $198,132, which, in breach of the agreement, RCI had failed to do.
62Further or alternatively, it was said in the period 23 January 2019 to 9 May 2019 Antipodean had “requested [RCI] to retain its shields, plates and fence panels at the site whilst [Antipodean] determined what course of action it wished to take in respect of the construction of the sewerage line.” The request was said to be “partly oral, partly to be implied and partly in writing.” The oral portions of the request were said to be constituted by oral requests made by Mr Georgiades and Mr Ognenovski of Lanco Group on behalf of Antipodean in the period 23 January 2019 “and from time to time between upon (sic) until mid April 2019.” The request was said to be implied from Antipodean’s “silence” in the face of some fourteen emails from RCI to Lanco in the period 11 February 2019 to 17 April 2019 advising RCI would make, or had made, claims for the supply of the relevant equipment. The request was also said to be derived from Antipodean’s request via Lanco to RCI “to lodge claims for payment of such hire on 25 February 2019”, by requests to reduce the rates charged made in emails dated 20 March 2019 and 4 April 2019, and by the continued use of the relevant items in the period January to May 2019. The request was also said to be constituted by an email from Mr Ognenovski of Lanco dated 10 April 2019 requesting RCI “not to make good on its threat to remove the equipment from site until at least 15 April 2019.” According to the Statement of Claim, RCI, “by reason” of the request, left the shields, plates and fence panels on site “until 8 May 2019.” Therefore, according to the Statement of Claim, RCI was “entitled to the fair and reasonable cost of” that equipment provided in response to Antipodean’s request. The “fair and reasonable cost” was said to be $180,120.00 plus Goods and Services Tax, which amount had not been paid.
63The Statement of Claim included a further cause of action said to be constituted by estoppel. It was said that Antipodean represented to RCI “that it would pay [RCI] for the hire and use of the shields, plates and fence panels”. This representation was said to be constituted in the email inviting RCI to “put in a claim”, viz an email of 25 February 2019. Therefore, it was said that RCI “assumed that a particular legal relationship then existed between [it and Antipodean] or expected that a particular legal relationship would exist between them”. Antipodean, it was said, “induced” RCI “to adopt the assumption”. The same matters broadly relied on as constituting a “request” for the purposes of a quantum meruit claim were relied upon relative to the claim based on estoppel, and it was said that Antipodean knew or intended that RCI would abstain from removing the equipment, with the result that RCI would suffer detriment if the assumption were not fulfilled. Antipodean, according to the Statement of Claim, had failed to act to avoid the detriment “whether by fulfilling the assumption or expectation or otherwise.” It had thereby acted unconscionably in resiling from the representations which it had made.
64Finally, there was a claim based on the statutory cause of action for misleading or deceptive conduct. This claim related both to the claim for disposal of the spoil and for hire charges on the equipment. In the event, when closing submissions were made, Mr Harrison, counsel for RCI, announced that the misleading or deceptive conduct claim would not be pursued.
65The Statement of Claim sought payment of $43,495.50 for the removal of the contaminated soil, $198,132.00 inclusive of Goods and Services Tax; alternatively, damages for misleading or deceptive conduct. There was also a prayer for a declaration that Antipodean was “estopped from refusing to pay [RCI] for hire of the shields, plates, and fence panels.” There was also a request for damages, alternatively equitable damages, together with interest, costs, and further or other relief.
Defence
66By their Defence to the Further Amended Statement of Claim, hereinafter referred to as “the Defence”, Antipodean admitted certain background matters such as its incorporation. It did not admit the allegation of the principal agreement alleging a detailed series of steps. It admitted that RCI had furnished a quotation which was accepted on behalf of Antipodean by Mr Ognenovski of Lanco by email of 23 October 2018.
67Antipodean admitted that RCI “performed parts or components” of the works contained in its revised tender or quotation.
68The Defence admitted the discovery of contaminated spoil and the need for its disposal, including a request on behalf of Antipodean for the disposal to be made, noting that Antipodean maintained “a right to set-off the claimed amount in respect of matters set out” later in the Defence.
69As to the allegation of failure to pay the amount claimed for the disposal of the contaminated spoil, Antipodean denied this, rehearsing the making of the request and the lodgement of the claim for payment by RCI for those matters, noting that it was expressed to be issued “in accordance with the Building and Construction Industry Security of Payment Act 2002”. It referred to the ability of a party making a payment to revisit and re-litigate it in accordance with s47 of that Act, and said, therefore, that it was “entitled by its representative, Lanco Group, to revise [the relevant payment certificate] so as to include the claimed variation for contaminated spoil removal as part of the amount previously certified for the works performed by [RCI].” Therefore, it had already paid that amount. It said, alternatively, it was entitled to effect a set-off on the amount “overpaid”.
70Next, Antipodean referred to advices from RCI to Lanco Group that RCI’s “boring subcontractor could not bore”, and to a site meeting. It was said that the mode of boring adopted was not in accordance with a variation employing a steel sleeve.
71As to the issue of the shields, plates, and fence panels, Antipodean said it had informed RCI “that the ground through which [RCI] was to bore was in bad condition and to ensure that its quote appropriately allowed for [such] ground conditions”, in response to which a revised quotation was submitted by RCI. The failure to proceed with the works was “caused by [RCI’s] failure to use the steel sleeve as specified”. According to the Defence, RCI’s subcontractor, Edge Underground, “had left the site by 25 January 2019, being the day after boring works were first attempted on the site”.
72Antipodean denied abandoning the contract, saying that through its representative, Lanco Group, it instructed RCI “on multiple occasions to return to the site to perform works under the agreement”, and those instructions were refused “on the basis that payment had not been received by [RCI] for the claimed variations.” Further, it was said that issuing claims for variations to the agreement was “inconsistent with an intention to abandon the agreement.”
73Antipodean denied making a separate hiring agreement.
74Antipodean admitted requesting RCI not to remove the shields etc from the site, but said this was because “it did not want to have imported material filling up holds [sic, scil holes] on site at the same time as it was trying to finalise a report for an auditor for the contaminated soil”, and Antipodean was still seeking to have RCI continue work as agreed.
75In any event, according to Antipodean, the costs of the shields, plates, and fence panels were due to delays in the boring work for which RCI was responsible.
76Antipodean did not admit that what was being claimed for the shields, plates, and panels was the fair and reasonable price. In any event, it noted a concession by RCI, email 25 March 2019, cutting the weekly charge for the shields to $900 per week from $1,000 per week.
77It denied, in the circumstances, that it had not paid for the shields, plates, and panels, noting that it had already paid $197,449.27 plus Goods and Services Tax where it was said the value of the work actually performed was only $121,207.99.
78Antipodean denied the various matters alleged in support of the estoppel claim.
79It is unnecessary to summarise the response to the misleading conduct claim.
80Finally, it was said that Antipodean had incurred additional costs and time to complete its development by reason of RCI’s “failure to complete” the works which it had contracted to do, and its failure to implement the variation in design based on the use of the steel sleeve. Antipodean said it was entitled to set-off these losses against any amounts claimed by RCI. It referred to an invoice from Helms Plumbing for $27,550.00 plus Goods and Services Tax.
Reply
81In its Reply to Amended Defence, hereinafter referred to as “the Reply”, RCI rehearsed the details of the provision of its quotation and its acceptance; in particular, a geotechnical report dated 7 May 2018 prepared by Statewide Geotechnical (Aust) Pty Ltd giving details of four boreholes, none of which was located in the dog-leg laneway which the new sewer line was to traverse. It said that, by an email dated 29 August 2018, RCI advised Antipodean “that it was proceeding on the assumption that the soil conditions in the laneway were either good, or bad but with no rock, consistently with the conditions disclosed” in the geotechnical report as to Borehole No 1.
82As to the modification of design so as to include a steel sleeve, RCI said it did not “accept the variation for the steel sleeve prior to 24 January 2019 and [it] did not add the amount of that variation to the price of the works”. It said the failure to proceed with the works occurred because “the work could not be performed in accordance with [Antipodean’s] design.”
83It denied that the change in design was as a result of any default on its behalf, but rather “because it was not possible to construct [Antipodean’s] design.”
Conclusions
The steel sleeve
84The evidence and interpretation of events that seemed to be accepted by both parties was that the problem with the micro-boring occurred when the drill-head entered a “void”. It was apparently impossible to keep the drill-head “on track” because it tended to deflect vertically, viz drop below the appropriate substantially horizontal track which it was intended to follow. The boring proceeded without the introduction of a steel sleeve, which, it seems, was proposed primarily to protect the PVC sewer pipe from hydrocarbon contamination in the soil, the hydrocarbons would tend to corrode those PVC pipes, causing leakages at the joints. (T318) Whether or not this sleeve could have resolved the stability problem remained unproven by the evidence. I sought guidance on this point from Mr Ognenovski, who was the sole witness for the defendant, but he was unable to express an opinion as to whether the sleeve would have remedied the instability problem caused by the void. (TT319−320)
85Given that RCI agreed to the design change, subject only to its being paid further moneys, which further payment was never agreed to, I must reject the contention that the use of the steel sleeve could have rendered possible a boring task which, according to RCI, proved impossible. There was no evidence that the sleeve would have resolved the stability problem. Likewise, because of the uncertain point at which matters were left, it would be inappropriate to regard RCI as having been in breach of contract by reason of the failure to use the steel sleeve.
The claim for the cost of removal of contaminated soil
86The issue which divides the parties on the subject of the contaminated soil would be more easily determined had there been a comprehensive contract covering the works which RCI agreed to carry out for Antipodean. As it was, given the scale of the contract with a cost of less than half a million dollars, it was formed simply by the acceptance of the quotation furnished by way of a tender by RCI.
87Amongst the documents forwarded as part of the tender invitation was a document styled “Lanco Group Contractor Tender Information Sheet”. It included the statement “all works to be carried out as per AS 2124”. This appears to be a reference to a set of general conditions of contract published in 1992 by Standards Australia. Following an enquiry on my part, a copy of these terms was handed up by counsel.
88Clause 42 of the General Conditions deals with the issue of “Certificates and Payments”. This provides a formal and detailed structure for the making of claims and the certification of monies as payable by the person described as “the Superintendent”. Clause 42.2 of the General Conditions provides:
“At any time and from time to time, the Superintendent may by a further certificate correct any error which has been discovered in any previous certificate, other than a Certificate of Practical Completion or Final Certificate.”
89Neither Mr Thomas, on behalf of Antipodean, nor Mr Harrison, on behalf of RCI, contended that these General Conditions of Contract should be regarded as constituting terms of a contract between the parties, or that they should be regarded as incorporated by reference.
90RCI’s quotation, as accepted by Antipodean, included the statement that progress payments were due within 14 business days of invoice “as per the Building and Construction Industry Security of Payment Act 2002. Failure to pay may result in legal proceedings and costs”. (See [9] above) In the absence of this statement, it might be open to question whether there was, in the circumstances, any entitlement for RCI to claim for progress payments.
91Clause 40 of the Australian Standards form of contract already referred to dealt with the issue of variation. Again, for reasons already explained, this should not be regarded as incorporated in the contract. Yet the parties appear to have conducted themselves upon the assumption that this regime, or some similar regime, in fact, applied. RCI sought approval for variations, and Mr Ognenovski, on behalf of Antipodean, variously approved or disapproved the variation applications.
92Mr Ognenovski approved the additional charge for the removal of contaminated soil as a contract variation. Having given that approval, he then revisited or purported to revisit his first certificate upon the footing that the amounts approved for payment prior to the end of 2018 should be regarded as covering that amount. In doing so, Mr Ognenovski seems to have acted simply upon the direction of Mr Brooks, the Construction Manager of Fontic, the company contracted to build the apartment complex. (See [33] above)
93It would seem that Mr Brooks spoke with the authority of Antipodean and Mr Ognenovski simply did as he was directed. The person charged with the responsibility of certifying in accordance with general conditions of contract AS 2124 is the Superintendent. Clause 23 requires that the “Principal”, in a case such as this Antipodean, ensures at all times the Superintendent “acts honestly and fairly” and “arrives at a reasonable measure or value of work, quantities or time”.
94This is a quasi-judicial function requiring something along the same lines as one might expect from an arbitrator. At any rate, a Superintendent under these general conditions would not be acting properly if he or she simply made a determination under dictation from the Principal. Nor would the Principal be acting properly in requiring the Superintendent to act solely in the Principal’s interest, as distinct from honestly and fairly, which would require consideration of the interests and views of the contractor, viz RCI.
95In the present case, Mr Ognenovski proceeded to revisit his initial certificate without prior notice to RCI and without allowing RCI to express its views for his consideration. However, given that the general conditions of contract are not regarded by the parties as forming part of their agreement, it is doubtful whether in those circumstances Antipodean or Mr Ognenovski (much less Mr Brooks) may be faulted on this ground. It goes to point out, however, that the parties acted upon the assumption that there was a detailed contractual background providing for a number of procedures which, in truth, formed no express or, perhaps, no implied term of their agreement.
96Assuming, hypothetically, that clause 42.2 of the general terms was regarded as part of the agreement, it is open to question whether it would have permitted what Mr Ognenovski purported to do, if one were to regard him as the Superintendent. The key to the power to revisit and “correct” a certificate is the existence of an “error”. This might be thought to be analogous to the power which the court has to correct an authenticated judgment under Rule 36.07 of the court’s rules – the so-called Slip Rule. There, the power of correction may be exercised when the error derives from an accidental slip or omission. As the learned editors of Civil Procedure Victoria observed, relative to this power, “an error in a judgment or order which is the product of a deliberate decision is not within the rule. See Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 449 …”. [I 36.07.65] 4177 Service 276)
97Despite the absence of references to accidental slips in clause 42.2, it may be thought that the same rule applies. Otherwise, a change of mind after a considered determination evidenced in a certificate would be permissible. In this case, Mr Ognenovski’s issue of Certificate No: 1 was made after due consideration. It entailed approval of payment of a high percentage of the total contract price, depending on how one calculated it, somewhere between 60 or 80 per cent, in circumstances where no actual boring work had been completed. Asked to explain what reasoning had led him to certify initially in that manner in those circumstances, Mr Ognenovski agreed that his reasoning was to the effect that most of the work in a contract such as RCI had undertaken, lay in the preparatory steps, such as sinking the various shafts and preparing for the insertion of the boring machine. (T323, LL3-5) Following Mr Brooks’ intervention, he changed his mind. I do not believe that this is the sort of “error” that clause 42.2 of the General Conditions had in contemplation.
98Mr Thomas, on behalf of Antipodean, in his closing submissions and in clause 11 of the Defence, relied on s47 of the Building and Construction Industry Security of Payment Act 2002. In broad terms, this statute in its earlier sections lays down a regime of “pay now, litigate later” for payment claims in the construction industry. Section 47 allows later litigation, in accordance with the ordinary rules of contract, to revisit these payments and provide, if necessary, for refunds if, in accordance with ordinary contractual principle, the amounts were not due.
99In the present case, whilst the claim for the contaminated soil and for the other works preliminary to the boring process included a statement that they were made in pursuance of the terms of the statute, a step necessary to seek the summary recovery processes provided for in the statute, in fact, there was no application to this or any other court for an order under the terms of the statute requiring Antipodean to pay the amount claimed. Nor was there any “adjudication” under the terms of the statute. It is not obvious that the certification and payment by Mr Ognenovski, and payment by Antipodean, could be regarded as the result of any compulsion under the statute. Rather, it appears to have been made in accordance with normal contractual principles, presumably upon the basis of what the parties supposed the contract was. In particular, nothing in the statute required Mr Ognenovski to certify the works as a variation.
100Ultimately, the defence taken by Antipodean at this point was not that the amount certified was not payable, according to ordinary contractual principles, but rather that it could be regarded as having been paid already, or be the subject of a set off. Given that fact, together with the absence of resort to the recovery processes under the Building and Construction Industry Security of Payment Act, I am unable to see what s47 of that statute has to do with the present dispute. If I were wrong in this, however, what was done could be justified only if the application of ordinary contractual principles was supportive of that outcome.
101What, then, was the basis, according to Mr Ognenovski, on which he revisited the certificate?
102I put to Mr Ognenovski that the rationale for revisiting, adopted in his letter by Mr Brooks, was at odds with the reasoning which had led Mr Ognenovski to certify payment for the amounts claimed by RCI, exclusive of the variation, relative to contaminated soil, asking him if the reasoning was not inconsistent with what had led him to his earlier conclusion and certification. I did not receive an explanation as to how the inconsistency was to be resolved. (T365-6)
103His evidence-in-chief continued, and Mr Thomas did not lead any evidence at that point to explain the paradox. Earlier, Mr Ognenovski explained his revisiting of the certificate as follows: “Because I made a mistake on the original claim, so I rectified it”. (T330, LL7-11) I asked him the nature of the mistake, and he said: “Not including the variation in that claim”. (Ibid, LL12-13) This fails entirely to explain why the certification was a mistake.
104I asked Mr Ognenovski how it was a mistake not to include the claim for the contaminated soil in Certificate No: 1, when it had not been made at that point. His reply was, “I’m not sure”. (T331, L16) In answer to questions from Mr Thomas, Mr Ognenovski referred to the Bill of Quantities, stating, “Because that’s where were (sic) these works were in the Bill of Quantities, because that contaminated soil came from 2.0 to 2.03”. (T332, LL5-7) The reference here seems to be to the items for micro-boring included in the Bill of Quantities which formed the basis for RCI’s successful quote. He did not explain how it was that the disposal of the contaminated soil could be both properly characterised as a variation, viz something extra, and at the same time properly forming part of the original obligations of RCI under the contract.
105Mr Ognenovski’s revisiting did not seek to recharacterise the amount claimed for removal of contaminated soil as a “non-variation”. Assuming, without deciding, that he would have had authority to do that, in fact that is not what he did. What happened is that, rightly or wrongly, the earlier payment was made as certified for works other than the “variation”. I see no contractual principle which would justify rewriting history along the lines which Mr Ognenovski did. As will be seen below, the defence taken by Antipodean relative to the claim for the hire of shields and other items is that, amongst other things, the original contract obliged RCI to provide those items, and therefore they could not be claimed as extras, variations or as payable under a separate contract.
106Whatever there might be said for the view that the removal of the contaminated soil should be seen in the same light, that is not Antipodean’s pleaded case, nor was the matter argued on its behalf along those lines, save for the delphic statement by Mr Ognenovski that “[the] contaminated soil came from 2.0 to 2.03”.
107Having paid RCI an amount of money claimed for preparatory works not including removal of contaminated soil, and having approved the cost of the latter as a “variation” and therefore as an extra for the contract, it is not competent for RCI now to seek to “rewrite” history.
108The attempt to re-cast Certificate No: 1 is ineffective, as is the attempt to assert a “set off”. The assumption underlying the alleged set off is that there was an overpayment made under Certificate No: 1, a proposition which, for the reasons explained above, I reject.
The claim for hire of the shields, et cetera
109Mr Thomas, on behalf of Antipodean, took me to a large number of provisions in the tender papers which would indicate that the cost of providing shields, plates and panels, and also temporary fences, was comprised within the price which RCI quoted for the sewerage works, which price was accepted by Antipodean. Some, but not all, of those passages are referred to and quoted in the “Background” section of the judgment, above.
110After Mr Thomas had taken me through some of these items at some length in his opening statement, Mr Harrison, following the luncheon adjournment, said that he sought to assist and “short circuit” these issues. He continued:
“So, we don’t dispute a single thing my learned friend says about what the contract provides. And indeed if we were seeking to simply claim for the shields, et cetera, under the contract, he’d be absolutely right.” (T72, LL8−12)
111I asked if that meant that if the issue had to be determined within the four corners of the original contract, RCI’s claim for the shields et cetera would necessarily fail. Mr Harrison agreed, saying: “if you don’t accept my claim that there has been a new agreement entered into …” (Ibid, LL18-20); the various causes of action asserted by RCI are all premised upon an anterior finding that the original contract was, at some time prior to the removal of the shields et cetera from the site, abandoned by the parties.
Abandonment
112In the famous case of Fitzgerald v Masters (1956) 95 CLR 420, the High Court of Australia held that a contract of sale relative to a farm property, including a partnership arrangement pending payment in full of the purchase price, was not to be treated as abandoned despite a period of 20 years’ inaction by the parties (viz 1932 to 1953). It should be noted that during the 20 years of inaction a world war and moratorium legislation intervened. Here, it may be thought that there was no period of total inaction at all, and the entire period from formation of the original contract until the removal of the shields and plates and the backfilling of the excavation was quite short in comparison.
113In his work Carter on Contract, Professor Carter said:
“... discharge by implied agreement may be inferred from the conduct of the parties”. [32-070] 82,095 (Service 28)
114In the following paragraph [32-080], he observes:
“Thus, in André et Compagnie SA v Marine Transocean Ltd [[1981] QB 694] a contract to arbitrate a dispute was regarded as terminated (abandoned) by reason of delay by both parties in the prosecution of the dispute.” 82,096 (Service 28)
115Mr Harrison, on behalf of RCI, relied on a lengthy passage from Judd J in Bailey v Woondella Pty Ltd [2012] VSC 396 where his Honour referred to a number of authorities to similar effect as the passages quoted from Carter: in particular, Summers v The Commonwealth (1918) 25 CLR 144; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; and a decision of Finkelstein J in the Federal Court of Australia, CGM Investments Pty Ltd v Chelliah (2003) 196 ALR 548 [17]−[18]. Mr Thomas, on behalf of Antipodean, did not, as I understand it, dissent from this statement of the law.
116It may be convenient at this stage to consider the factual matrices in which some of the leading authorities relied on were determined one way or another. In CGM Investments Pty Ltd v Chelliah, Finkelstein J considered the status of a carpet-cleaning franchise which pertained to the Melbourne Metropolitan area under which the franchisee had not actively traded in that region for over seven years. The franchisor contended that by express agreement, or alternatively implicitly, the parties had abandoned the franchise contract. His Honour concluded that whilst there had been no discharge by express agreement, the contract had been discharged by abandonment. His Honour said:
“In my view, the authorities ... establish not only that an agreement can be abandoned by conduct, but also that the question whether an agreement has been abandoned does not require one to examine whether the parties actually had the intention of abandoning the agreement; only whether their conduct, when objectively viewed, manifests that intention. This conclusion accords with the objectivist theory of contract which is now irrevocably entrenched in our law.” (2003) 196 ALR 548, 553 [18]
117Summers v The Commonwealth (1918) 25 CLR 144 was a claim by a contractor who had agreed to supply marble to the Commonwealth of Australia for use on the facade of Australia House in London. It was tried in the High Court’s original jurisdiction by Isaacs J. The contract between Summers and the Commonwealth provided for him to supply a specified number of blocks of marble, each of which (according to the headnote) should be of such dimensions as to admit of its being worked and polished so as to produce pillars of a specified size. Isaacs J held that this contract could not properly be performed by the contractor by supplying blocks, according to the headnote, “of such dimensions that two or more pillars of the specified size could be cut from them, even though that would be a more convenient and businesslike mode of supplying them.” Mr Summers persisted in this latter view of the contract, which was unacceptable to the relevant department of the Commonwealth. Eventually, the department obtained supplies from an alternative supplier and completed the facade of Australia House. In dismissing the plaintiff’s claim for damages, his Honour said it:
“... must fail for two reasons: (1) want of readiness and willingness to perform his contract on the agreed basis; (2) mutual abandonment or abrogation of contract.” (1918) 25 CLR 144, 152
118In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, the High Court considered a dispute arising out of a contract for the sale of land which depended upon registration of a plan of subdivision. There was a dispute between the parties as to the identity of the plan of subdivision referred to in the contract. In the High Court, the majority of their Honours declined to make a finding of repudiation against the purchaser. They concluded, however, that the contract should be treated as abandoned, regarding the situation as analogous to the one considered by Isaacs J in Summers’ case. Stephen, Mason and Jacobs JJ said:
“Thus the contract in the present case was still on foot on and after 25th July 1974. Neither party had effectively rescinded. But there can be no doubt that by 5th December 1974, when these proceedings were commenced, neither party, whatever may have been their reasons, regarded the contract as being still on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract. The position is similar to that with which Isaacs J. dealt in Summers v. The Commonwealth.” (1978) 138 CLR 423, 434
119In his closing submissions, Mr Harrison relied on paragraph 19B(a) of the Statement of Claim, as to which paragraph he said:
“It does not allege that a sewer could not be installed under any circumstances: cut and cover or hand tunnelling might both have worked. Rather the plea alleges that the works (as pleaded and defined in paragraph 4 of the further amended statement of claim) could not be carried out under the agreement (as pleaded and defined in paragraph 4B of the further amended statement of claim.” (Closing submissions, paragraph 30)
120Mr Harrison relied on what was said by Antipodean in its application to utilise the sewer line coloured yellow on the plan annexed to the Statement of Claim in lieu of a sewer line established along the dog-leg lane area. The online application to this effect, referred to in [47] above, was dated 30 April 2019. Mr Harrison relied on the statement at CB 141 addressed to Yarra Valley Water:
“The contractor attempted to bore in January but failed due to the ground conditions.”
121He referred to statements to similar effect at a meeting with Yarra Valley Water 24 July 2019 (CB 145) and in a second application dated 19 August 2019 to Yarra Valley Water (CB 144−162). Therefore, said Mr Harrison:
“It does not lie in [Antipodean’s] mouth to now make the unpleaded claim that the contract remained on foot at all material times (whenever that may be).” (Closing submissions, paragraph 34)
122He said Mr Ognenovski agreed with this interpretation. He referred to T408, LL11−17, where Mr Ognenovski agreed that “everyone’s just walked away from that arrangement”, viz the original contract, and that the “walk away” happened well before the application was made to Yarra Valley Water, to which Mr Ognenovski agreed “In spirit, yes”. He referred to another passage in the transcript at T444, LL22−25, where Mr Ognenovski, following a review of a series of emails culminating on 17 April 2019, agreed that “everyone had walked away from this job”. Mr Harrison said in closing submissions, paragraph 40, that the abandonment might be “as early as 26 January or as late as 17 April 2019”.
123For Antipodean, Mr Thomas referred to an email from Mr Rooney forwarded to Mr Ford of RCI on 15 March 2019 (CB 685) where Mr Rooney stated:
“For the avoidance of doubt, neither Fontic or Debtech or Antipodean Development have instructed or implied that the Contractor (being RCI) should suspend the work of completing the sewer main redirection.”
124The email continued in similar vein, and concluded with a demand for the remedying of sewage leaks as a matter of urgency as required by Mr Brooks in another email.
125What are we to make of all this? The first point to note is the one stressed by Finkelstein J in CGM: namely, that implied abandonment is to be determined objectively from the actions of the parties, including their inactions or non-actions. Antipodean has lurked in the shadows. None of its officers or employees has given evidence. Their identities, and the identities of the directors and shareholders, remain cloaked in mystery. Antipodean dealt with RCI exclusively through intermediaries such as Fontic, Debtech and principally Lanco – Mr Ognenovski. Plainly, in those circumstances Antipodean must accept responsibility for what Messrs Brooks, Rooney and, most especially, Mr Ognenovski said and did in their dealings with RCI. This does not mean, however, that after the event, in the course of cross-examination in this proceeding, Mr Ognenovski was to be regarded as empowered to speak Antipodean’s corporate mind. Even if he were, what Antipodean’s corporate mind might now think is a matter of subjective fact , rather than objective analysis, as the doctrine of implied abandonment requires us to consider.
126The next point to observe is that the ultimate question on this issue is not whether boring the sewer line in the dog-leg was impossible, whether this impossibility is judged by the laws of physics and chemistry or economic rationality. I am unclear what Mr Harrison means when he contends that the boring process proved impossible under the terms of the relevant contract. The contractor whose low quote is accepted is not exonerated from performance because performance of the contract as agreed would be unprofitable or grossly unprofitable.
127It follows that a representation of impossibility made on behalf of Antipodean to Yarra Valley Water does not in itself require a conclusion of abandonment. To take an example from one of the earlier authorities, whilst the acquisition of alternative marble from another contractor was regarded by Isaacs J in Summers’ case as constituting abandonment on the part of the Commonwealth, it is far from clear that an attempt, initially unsuccessful, by the Commonwealth to obtain an alternative supply would have been so regarded. There is much to be said for the view that a party in the position of Antipodean or the Commonwealth in Summers’ case should be regarded as entitled to keep its options open as to abandonment of the original contract unless and until it obtained an entitlement to proceed by some means inconsistent with the original contract.
128When the claim for equipment hire, the subject of this part of the proceeding, was made the subject of an invoice on 26 February 2019 – that is, a month after the earliest date alleged by RCI for the “abandonment” of the contract – it nominated the claim for such hire as a variation, thereby implicitly acknowledging and asserting the continued existence of the original contract – see [28] above.
129Mr Harrison was critical of Antipodean’s position, saying that it failed to assert as part of its case what the status of the original contract was and whether, and if so when and by what means, it was to be regarded as discharged. Mr Harrison was correct in observing that no express position was adopted by Antipodean on these matters. What was implicit in Antipodean’s stand was that the contract was not discharged at any material time, which for present purposes must mean prior to the date in May 2019 when the shields, plates, and fences were removed and the excavations backfilled by RCI. Once Antipodean obtained authority to adopt an alternative solution to its problem, and RCI vacated the site and filled in the excavation, no doubt the parties should be regarded as having abandoned the contract. As in Summers’ case, there might have been some ground for Antipodean’s regarding RCI as having repudiated the contract. As it is, there is no need to make a determination on this point.
130I reject the contention that at any earlier date the contract should be regarded as having been abandoned by the parties. This is sufficient to dispose of RCI’s claim for the hire of shields, plates, and fences. I should, however, say something about some of the issues which might have arisen had I taken a different view on the issue of abandonment.
Agreement for the hire of shields etc
131In his closing submissions at paragraph 42, Mr Harrison on behalf of RCI said:
“The plaintiff contends that this [new agreement for the hire of shields etc] was a separate agreement to pay for the use of these items. The agreement is constituted by one or more of the emails pleaded in paragraph 19C of the further amended statement of claim. Most of them are from the plaintiff to Mr Ognanovski [sic, scil Ognenovski]. Key among them is Mr Ognanovski’s [sic, scil Ognenovski’s]. response on 25 February 2019 to Mr Ford’s requests for payment:
‘Yeah put in a claim however we need to resolve the boring issue ASAP.’ ” (CB 574)
132Emails, for the most part from RCI, by their nature are not calculated to establish the existence of an agreement to pay by Antipodean. To put it another way, it is not competent for a would-be party to a contract to say to the putative counter-party, “Unless I hear to the contrary there will be a contract between us to the following effect ...” If the email of 25 February 2019 were sufficient to “seal the deal” it would necessarily exclude any contractual claim for the hire of the shields prior to 25 February 2019, viz the entire first month of the claim. In my view, however, the exchanges between the parties, including references on the part of Antipodean to much cheaper hiring rates said to be available from Coates Hire, represent no more than negotiation. The parties were seeking a solution to a problem which had arisen. In context, I do not believe Antipodean could be regarded as having agreed to anything in particular, whether as to rates or liability for hire. The most that can be said is that it was exploring the possibility of accepting liability in the interests of a speedy solution to its problems without actually reaching agreement thereon.
Quantum of claim
133The issue of proof of quantum of claim would arise in both a contractual claim by RCI or in a claim on quantum meruit. It was not suggested that any hiring rate was agreed between the parties, nor could it have been. Therefore, RCI would be limited to recovery of a reasonable amount. The mere claim of a certain amount by RCI does not prove that the amount claimed is fair and reasonable. There was no evidence as to the market for the hire of these items, save in so far as Mr Ognenovski, on behalf of Antipodean, quoted what were said to be far cheaper rates available from Coates Hire. If all else were equal I would accept the Coates figure as being fair and reasonable and the quotation of these as representing an admission to that effect on behalf of Antipodean. Given, however, that I have found that the contract remained in force at all material times, there is no room for either the operation of a new contract or the making of a claim on a quantum meruit basis.
Equitable estoppel
134Mr Harrison, unsurprisingly, relied upon the classic formulation of what is required for a claim based on equitable estoppel as enunciated by Brennan J, as he then was, in Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 428−9. It is unnecessary to quote the very well known passage. Mr Harrison, in oral closing submissions, contended that a claim based on the cause of action described by his Honour could coexist with a finding of no abandonment. This would seem at odds with his earlier statement quoted at [111]. I am somewhat sceptical on this point. Nevertheless, there are other reasons for concluding that a claim based on equitable estoppel should fail on the present facts. The only representation which could be thought to satisfy the criteria laid down by his Honour was made as late as 25 February 2019. Therefore, any claims relative to the equipment before that date would necessarily be excluded. More pertinently, I do not accept that Antipodean knew or intended that RCI was in the relevant legal relationship with it. In my view, the email correspondence indicates a quest for a solution to an impasse without commitment to any particular solution. In context, all that RCI could reasonably have taken from its dealings with Antipodean via Mr Ognenovski was that Antipodean was seeking a solution to the impasse which it had encountered and would consider making payment for the shields, plates, and fences as a pragmatic solution, depending on the quantum of the claim. In my view this is insufficiently unequivocal to satisfy the requirements of the test formulated by Brennan J (as he then was).
135In Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1, the High Court considered a claim by a tenant that it was, in the circumstances, entitled to a renewal of lease based alternatively upon a contract collateral to the original lease agreement or on the basis of equitable estoppel. The basis for both the alleged collateral contract and the alleged estoppel was an assurance said to have been made on behalf of the lessor that the tenant would be “looked after at renewal time”. The High Court by majority rejected both bases for the tenant’s claim. As to the claim based on estoppel, French CJ, Kiefel and Bell JJ said:
“It has long been recognised that for a representation to found an estoppel it must be clear. In Low v Bouverie, it was said that the language used must be precise and unambiguous. This does not mean that the words used may not be open to different constructions, but rather that they must be able to be understood in a particular sense by the person to whom the words are addressed. The sense in which they may be understood provides the basis for the assumption or expectation upon which the person to whom they are addressed acts. The words must be capable of misleading a reasonable person in the way that the person relying on the estoppel claims he or she has been misled. The statement that the tenants would be ‘looked after at renewal time’ is not capable of conveying to a reasonable person that the tenants would be offered a further lease.” (2016) 260 CLR 1, 16 [35]
Disposition
136RCI’s claim relative to the contaminated soil succeeds, but its claim relative to the shields, plates and fences fails. I will direct the parties to bring in short minutes to give effect to these reasons.
137I have heard no submissions on the question of costs, and so I will reserve them.
Annexure A to the Further Amended Statement of Claim (Court Book page 11 O)
2
11
0