Rowe v Bishop (No 2) - [2022] SADC 60

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
ROWE AND ANOR v BISHOP AND ANOR (No 2)
[2022] SADC 60
Judgment of his Honour Judge Slattery
10 May 2022
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS
The applicants owned a house property in rural South Australia.
The respondents are builders and the first respondent holds a builders licence. In 2011, the respondents performed building work for the applicants on some internal rooms of their house and charged on a cost-plus 10% plus GST basis.
In November 2012, the applicant Mrs Rowe and the first respondent met to discuss proposed addition to the applicants’ home. A sketch was produced showing plans for only a limited amount of work on a garage and a rear carport. The respondents prepared and delivered to the applicants an estimate to complete this work subject to the necessary work being done by other professionals and the conditions imposed by any relevant planning authority. The estimate was in a range of between $85,000 to $90,000.
An architectural drafter was retained, who in turn engaged an engineer. Further instructions were given by the applicants requiring other work to be done that substantially increased the scope of the required building work. The drafter prepared more broadly based plans that disclosed a much greater scope of work than the hand drawn sketch.
Development consent was obtained from the local council. An engineer was retained and following provision of the engineer’s report, Building Rules consent was obtained. The applicants and the respondents then negotiated about the method of calculation of the price at which the total work under the plans and the consents would be achieved in light of the fact that the scope of works had increased considerably from that disclosed in the November 2012 hand drawn sketch. The negotiations of the parties and the decisions about the scope of the works evolved over time until an agreed position was reached. The applicants now contend that the parties agreed for the work to be done at a fixed price of between $85,000 to $90,000, as specified in the respondents’ first initial estimate. The respondents contend that the parties agreed to adopt the same cost-plus charging method of costs plus 10% plus GST.
The respondents commenced the work and in the course thereof, they contend that the applicants instructed them to undertake and to complete further internal and external work and that they were not to undertake some of the work for which Building Rules consent had been given. The respondents contend and the applicants deny that they were not required to complete all of the work for which consent had been given. The respondents contend that they completed the work required of them by February 2014. The respondents delivered to the applicants fee accounts for work done calculated on a costs plus 10% plus GST basis. Each account for building work rendered by the respondents was calculated on that basis. In the period between October 2013 and April 2014, the date upon…

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.

Continue reading Rowe v Bishop (No 2)

Details

AGLC: Rowe v Bishop (No 2) [2022] SADC 60
Case: [2022] SADC 60
Decision Date: 10 May 2022

CaseChat Overview and Summary

The matter of Rowe v Bishop (No 2) was heard in the Supreme Court of New South Wales. The applicants, Rowe, were engaged in a dispute with the respondents, Bishop, regarding the terms and pricing of a construction contract. The dispute centred on whether there was a fixed price contract or a costs plus arrangement, as well as the reasonableness of the charges for the work completed.

The primary legal issues before the court were to determine the nature of the contractual agreement between the parties and to assess the reasonableness of the charges made by the respondents. The applicants argued that there was a fixed price contract, while the respondents contended that the agreement was for a costs plus 10% plus GST contract. Additionally, the applicants claimed that the respondents' charges were unreasonable and that they were not required to pay for certain extras and variations.

The court found that there was no fixed price contract between the parties. Instead, the contractual arrangement was under a costs plus 10% plus GST contract for all of the work done by the respondents. The court accepted that the respondents had undertaken and completed all of the work required of them by the applicants, including for extras and variations. The court also found that the charges of the respondents for the work done were reasonable. Consequently, the claims of the applicants were dismissed. The respondents were entitled to an order on the counterclaim in the sum of $8,576 or alternatively for an assessment on a quantum meruit basis in the sum of $13,918.50.

The court further noted that there were a number of matters requiring attention from the respondents to ensure that all of the work already completed by them conforms with good engineering practice and the requirements of the planning authority. The court scheduled further hearings to address the parties' remaining issues, including the question of costs and interest.

Orders

Orders of the court

Held:

1. There was no fixed price contract between the applicants and the respondents.

2. The contractual arrangement between the parties was under a costs plus 10% plus GST contract for all of the work done by the respondents.

3. The respondents undertook and completed all of the work required of them by the applicants, including for extras and variations.

4. The charges of the respondents for the work done were reasonable.

5. The claims of the applicants are dismissed.

6. Subject to the matters set out below, the respondents are entitled to an order on the counterclaim in the sum of $8,576 or alternatively for an assessment on a quantum meruit basis in the sum of $13,918.50.

7. The report of Mr Effingham establishes that there are a number of matters requiring attention from the respondents so that all of the work already completed by the respondents conforms with good engineering practice and the requirements of the planning authority.

8. The court will hear the parties further, including on the question of costs and interest.

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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