Renbar Constructions Pty Ltd v Sader; Sader v Renbar Constructions Pty Ltd - [2022] NSWSC 172

Supreme Court

New South Wales

Medium Neutral Citation: Renbar Constructions Pty Ltd v Sader; Sader v Renbar Constructions Pty Ltd [2022] NSWSC 172
Hearing dates: 14 - 17 February 2022; further written submissions 21 February 2022
Decision date: 25 February 2022
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
Builder entitled to recover balance of costs of construction; owner entitled to damages for delay and defects

Catchwords:
CONTRACTS – general contractual principles – construction – interpretation of critical terms of the contract – whether compliance with a contractual mechanism for claiming progress payments was a condition precedent to payment of the entire contract sum – implied terms – necessary to give business efficacy to the contract – contractor entitled to payment of unpaid contract sum on completion of works
CONTRACTS – breach of contract – forms of breach – amount of damages calculated as a result of defective work and delay – whether defective work and 141 week delay amounted to “substantial” breaches – whether contract validly terminated
BUILDING AND CONSTRUCTION – determination of the cost of construction of the work
EQUITY – whether estoppel by convention available – no mutual assumption adopted – no sufficient detriment to party seeking estoppel

Legislation Cited:
Home Building Act 1989 (NSW)

Cases Cited:
Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57
Bou-Simon v BGC Brokers LP [2018] EWCA Civ 1525
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Camuglia v Housman [2020] NSWDC 446
Cappello v Hammond & Simonds NSW Pty Ltd [2021] NSWCA 57; [1982] HCA 24
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24
Creative Building Services Pty Ltd v Jolene Investments Pty Ltd [2013] NSWSC 391
Hadley v Baxendale (1854) 9 Exch 341; (1854) 156 ER 145
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457; [1933] HCA 25
Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359; [1931] HCA 21

Category: Principal judgment
Parties: Renbar Constructions Pty Limited (Plaintiff/Cross-Defendant)
Mark Anthony Sader (First Defendant/Cross-Claimant)
Sandra Sader (Second Defendant)
Representation:
Counsel:
M Klooster with F Clark (Plaintiff/Cross-Defendant)
J Hyde (Defendants/Cross-Claimant)
Solicitors:
New South Lawyers (Plaintiff/Cross-Defendant)
Wilkinson Building & Construction Lawyers (Defendants/Cross-Claimant)

File Number(s): 2019/00368077

Judgment

By a contract dated 1 July 2014, the plaintiff, Renbar Constructions Pty Ltd, contracted with the defendant, Dr Mark Sader, to demolish an existing structure on a property owned by Dr Sader at Connells Point, and to construct a new residence. [1]
1. Dr Sader’s wife, Mrs Sandra Sader, has since become a joint registered proprietor of the Connells Point property. She was not a party to the building contract. Nothing turns on this.
The contract was a “costs plus” contract.
The contract provided that the building works must reach the stage of practical completion within 52 weeks. That period commenced on 31 July 2014 when Renbar commenced demolition of the existing residence.
Subject 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

Case: [2022] NSWSC 172
Decision Date: 25 February 2022

CaseChat Overview and Summary

The matter before the court involved two parties, Renbar Constructions Pty Ltd and Sader. The dispute centred on the interpretation of critical terms of a contract and the entitlement to payment for completed works. The Federal Court of Australia was tasked with determining the legal issues that arose from the contractual relationship between the parties. The key legal issues were whether compliance with a contractual mechanism for claiming progress payments was a condition precedent to payment of the entire contract sum, whether the defective work and delay amounted to substantial breaches, and whether estoppel by convention was available.

The court examined the contractual terms and found that compliance with the mechanism for claiming progress payments was not a condition precedent to payment of the entire contract sum. It also found that the implied terms necessary to give business efficacy to the contract entitled the contractor to payment of the unpaid contract sum upon completion of the works. The court held that the defective work and the 141-week delay did not amount to substantial breaches, and thus, the contract was not validly terminated. The court further determined that estoppel by convention was not available as there was no mutual assumption adopted and no sufficient detriment to the party seeking estoppel.

The court's reasoning and outcome were based on a careful analysis of the contractual terms, the nature of the defects and delays, and the principles of equity. The court found that the contractor was entitled to payment for the completed works, and the employer was liable for the unpaid contract sum. The court also held that the contract was not validly terminated due to the defects and delays, and that estoppel by convention was not available to the employer.

The final orders of the court included the payment of the unpaid contract sum to the contractor, the dismissal of the employer's claim for termination of the contract, and the rejection of the employer's estoppel by convention argument. The court's decision provided clarity on the contractual obligations and entitlements of the parties and resolved the dispute in a manner that was fair and just.

Orders