Semmens v Ocram Constructions Pty Ltd - [2012] WADC 54

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: SEMMENS -v- OCRAM CONSTRUCTIONS PTY LTD [2012] WADC 54

CORAM: STAUDE DCJ

HEARD: 11-15 & 21-22 JULY 2011

DELIVERED : 5 APRIL 2012

FILE NO/S: CIV 3895 of 2010

BETWEEN: DAVID SEMMENS
PETRINA LOUISE SEMMENS
Plaintiffs
AND
OCRAM CONSTRUCTIONS PTY LTD
Defendant

Catchwords:

Contract - Building dispute - Cost plus contract - Whether notice of suspension of works by builder valid - Whether termination of contract by owners valid - Whether builder liable for alleged defects - Whether money due to builder - Turns on own facts

Legislation:

Nil

Result:

Plaintiffs' claim for damages for breach of contract allowed in part
Defendant's claim for balance of progress claims allowed in part

Representation:

Counsel:

Plaintiffs: Mr S K Shephard
Defendant: Mr P G McGowan

Solicitors:

Plaintiffs: Lavan Legal
Defendant: GV Lawyers

Case(s) referred to in judgment(s):

Caine Constructions v Sopov (2005) VSC 237
Diploma Constructions Pty Ltd v Marula Pty Ltd [2009] WASCA 229
Minson Nacap Pty Ltd v Aquatech-Maxcon Pty Ltd (2001) 17 BCL 269

Table of Contents

Introduction
The pleadings

Issues

Formation
The contract
The building cost dispute
Suspension of works by Ocram on 4 December 2007
Validity of the Semmens' notice of default
Defective work
Damages for delay

Conclusion

STAUDE DCJ:

Introduction

On 23 March 2006 Mr and Mrs Semmens engaged Ocram Constructions Pty Ltd (Ocram) on a Housing Industry Association standard form cost plus contract (the contract) to construct a residence on land at 30 Harvey Street, Mosman Park (the works). Ocram suspended the works on 4 December 2007 claiming to be owed money. On 4 February 2008 Mr and Mrs Semmens purported to terminate the contract.
Ocram brought a claim in the Magistrates Court for money due under the contract. The Semmens disputed the amount claimed and counterclaimed damages for rectification of faulty work, rent, storage and land tax. The counterclaim exceeded the jurisdiction of the Magistrates Court. By a consent order made on 30 October 2009 the action was remitted to this court.
In that process the Semmens became the plaintiffs and Ocram the defendant. The pleadings reflect the parties' original positions in the litigation such that the plaintiffs' claim is set out in their defence and counterclaim to the defendant's statement of claim. Further pleadings include the defendant's reply and defence to counterclaim, the plaintiffs' reply to the defence and counterclaim and a Scott schedule.
The trial was lengthened by disputes over pleadings and the admissibility of evidence, which ought to have been resolved well before the trial, as well as an unwieldy and bewildering book of documents in four volumes running to 1,446 pages. The documents were disordered and many were in multiple forms. I expressed concern at the outset that the matter was not ready to proceed, but was assured on both sides that it was. In retrospect, it was clearly not and an order should have been made to remit the matter to a registrar for further case management before re‑listing.
There were 11 witnesses: Mrs Semmens and Mr Neville Harrison for the plaintiffs, and Mr Gary Chamberlain, Dr Armand Zurhaar, Mr Robert Sivewright, Mr Salvatore Nicotra, Mr Duhran Cooper, Mr Giuseppe Morabito, Mr Frank Giglia, Mr Marco Natoli and Mrs Rebecca Natoli for the defendant. There were 96 exhibits.
In addition to the five days allocated, this trial occupied a further two half‑days. At the end of the evidence, no more time being then available, I directed by consent that the parties file written closing submissions. The defendant's were filed on 26 July 2011 and the plaintiffs' on 5 August 2011.
Disputes over private residential building contracts often result, as this did, from communication breakdown leading to mutual loss of trust, disappointment and aggrievement. In such conflicts, where a sense of injustice and, perhaps, feelings of personal resentment on both sides may well cloud perception and thought, the parties and the administration of justice are especially reliant upon the independence and objectivity of the parties' lawyers and upon the interlocutory processes of the court to facilitate the narrowing of issues. Regrettably, this litigation came to trial with no fewer issues than when the dispute began, and perhaps even more. As a result the length, complexity and expense of these proceedings were, in my opinion, disproportionate to the value of the subject matter.

The pleadings

Ocram's amended substituted statement of claim (statement of claim) claims a contractual debt of $37,364.17, being the difference between the total of the invoiced progress claims, as adjusted from time to time to correct invoicing errors, and the total amount paid by the Semmens. In the alternative, Ocram pleads a quantum meruit, and, in the further alternative, a claim for restitutionary damages on the grounds of unjust enrichment. The second alternative is redundant in my view.
The statement of claim alleges that Ocram agreed to perform building work pursuant to a contract which entitled it to make progress claims and obliged the Semmens to make progress payments within five days of receipt of any such claim. Ocram pleads that on 12 November 2007 it issued a progress claim to the Semmens in the sum of $92,376.12 which they failed to pay on time, but of which they paid $60,750.30 on 3 December 2007, leaving a balance of $31,625.82 due to Ocram. Ocram pleads that on 4 December 2007 it suspended the works in accordance with cl 10(b)(v) of the contract.
The statement of claim particularises the progress claims made by Ocram and the payments made by the Semmens. Ocram's claim of $37,364.17 is the difference between the total amount of the progress claims, $618,199.21, and the total of the payments made by the Semmens, $580,835.04. Interest is claimed at the contractual rate of 12.5%.
For reasons unknown, and unnecessarily in my view, Ocram's claim being for a contractual debt, the statement of claim also pleads that the Semmens purported to issue a default notice pursuant to cl 15(b) on 16 December 2007, which notice was invalid, and that on 4 February 2008 they unlawfully purported to terminate the contract, thereby repudiating the contract. It is pleaded that Ocram accepted the repudiation of the contract by letter dated 29 July 2008 and elected to treat the contract as at an end.
The Semmens, by their substituted defence and counterclaim (defence and counterclaim), admit the contract and say that it was an implied term of the contract that Ocram perform the works with due care and skill and in a workmanlike manner. The Semmens plead that not all of the works performed by Ocram were carried out in accordance with the contract. Schedule A details defects and rectification costs of $127,252.16. The Semmens admit that they did not pay the full amount of the invoice of 12 November 2007, referred to as invoice 15, and say that the invoice included amounts already paid (detailed in schedule B), in respect of which notice of dispute was given by email dated 5 December 2007. The Semmens allege that this conduct constituted a serious breach of an essential term of the contract. They plead that they were lawfully entitled to terminate the contract pursuant to cl 17, Ocram having failed to comply with the default notice, and in any event by reason of Ocram's serious breach of the contract.
The Semmens deny that they repudiated the contract. They deny liability for Ocram's claim and, alternatively, plead a set‑off of any sum that may be due to Ocram against their claim for damages. The counterclaim pleads damages for breach of contract in respect of defective work and delay in practical completion.
In the substituted reply and defence to counterclaim (reply and defence to counterclaim) Ocram denies the Semmens' allegations of defective work and pleads that when the works were suspended by Ocram on 4 December 2007 the works were in progress and not complete, and that by repudiating the contract on 4 February 2008 the Semmens denied Ocram the opportunity to carry out and complete the works which it was at all times ready willing and able to do, subject to the payment of monies due to it.
Ocram otherwise pleads that the Semmens breached the contract by refusing to pay the balance of the 12 November 2007 progress claim and not challenging the progress claim in accordance with cl 10(b) of the contract. Ocram alleges that the Semmens were in breach of the contract as at the dates of the notice of default and notice of termination and could therefore rely on neither. Because the Semmens were in breach they were estopped from taking any steps to enforce the contract.
The Semmens' conduct in terminating the contract is said to be unconscionable on six grounds: first, that the default notice was so vague and general as to its terms that it precluded the possibility of compliance by Ocram; second, that the default notice was an inadequate ground for any future termination of the contract as it was illusory; third, that the Semmens were in breach of contract on the dates of the notices of default and termination; fourth, that building works were suspended on 4 December 2007; fifth, that the Semmens knew that the works were suspended when they issued the notice of default; and, sixth, that the Semmens failed to act in good faith. The duty to act in good faith is alleged to be an implied term of the contract.
On 21 June 2010 the Semmens purported to file a reply to defence and counterclaim. This pleading was in fact a rejoinder and a reply to the defence to counterclaim. In it the Semmens allege that they did avail themselves of cl 10(4) by notifying Ocram of their disagreement with the 12 November 2007 progress claim invoice and that Ocram purported to deal with the dispute by amending the invoice so as to credit them with $11,389.23. The suspension of the works was not valid as invoice 15 was incorrect and payment of invoice 16 was not due.

Issues

The main issues for determination are:
(1)Is Ocram owed money for work done pursuant to the contract?
(2)Are the Semmens entitled to damages for rectification of defects and delay as claimed?

Formation

Mrs Semmens had a number of meetings with Marco Natoli of Ocram through 2005. Mr Natoli nominated a building design firm, Mario Tascone & Associates, to prepare the documentation. Consequently, Mrs Semmens had a number of meetings with Mr Tascone and in November 2005, Mr Tascone provided a specification and set of construction drawings which were submitted to the Town of Mosman Park for approval. Mr Natoli also nominated an engineer, Francis Wee & Associates, to do the structural documentation.
On 8 December 2005, prior to any building contract being made, Ocram issued a tax invoice to the Semmens for $12,667.77 in respect of the fees of Mario Tascone & Associates, Francis Wee & Associates and Cottage & Engineering Surveys (exhibit 6). The builder's margin was charged at 10%. The invoice was paid on 19 December 2005.
Mr Natoli's evidence was that he entered into discussions with Mrs Semmens in about January 2005. He referred her to Mr Tascone for design services. He did not have any significant involvement in the design. He said he paid Mr Tascone's invoices, which were addressed to Ocram, and then billed the Semmens. Mr Tascone did not give evidence. In cross‑examination Mr Natoli acknowledged that Mrs Semmens had sent him a 'wish list'. This consisted of proposed amendments to Mr Tascone's design. He agreed he would pass on any design instructions from the Semmens to Mr Tascone.
I am satisfied that Mr Tascone's design services were engaged by Ocram as a service to the Semmens at the pre‑contractual stage. The manner in which the fees of Mr Tascone were passed on to the Semmens with the builder's margin added leaves no doubt about that issue.
Mr Natoli said that he prepared an estimate of the costs as a guideline. However, no budget was agreed. After entering into a cost plus contract a number of variations to Mr Tascone's design were requested. The original cost estimate had no contractual significance, even though it was a matter about which Mrs Semmens expressed concern when, in November 2007, the present dispute originated.
Upon the signing of the contract on 23 March 2006, the Semmens paid Ocram a deposit of $15,000. Rather oddly, the deposit was the subject of a tax invoice erroneously dated 8 December 2005 (exhibit 7). A receipt issued on 28 March 2006 indicated GST of $1,363.64. The raising of a tax invoice for a deposit and the treatment of that sum as one that included a component of GST was inappropriate and reflected a lack of understanding on the part of Ocram of basic business invoicing and accounting. This finding will be borne out by reference to other invoicing errors.

The contract

The terms of the contract relevant to this dispute are as follows:
1.Clause 1(a) provides that the builder will carry out the building work described in item 3 of the schedule (the works) in a proper and workmanlike manner and in accordance with the drawings, plans and specifications agreed between the parties, annexed to the contract and signed for identification (the construction documents). Item 3 of the schedule does not describe the building work, merely the land.
2.Clause 6(a) sets out what costs are included in the costs of the works.
3.Clause 7(a) sets out what costs are excluded from the costs of the works.
4.Clause 9(a) provides for any variation to the works or the construction documents to be communicated by a request in writing.
5.Clause 10 provides for claims for progress payments as follows:
(a)The builder shall be entitled to make claims for progress payments for the works by notice in writing to the owner at intervals of either:
(i)the number of days specified in item 7 of the Schedule commencing from the date of the commencement of the works; or
(ii)the value of the progress claim exceeding the amount specified in item 7 of the Schedule.
(b)Such progress claims are subject to the following conditions:
(i)the progress claims shall identify all costs incurred by the builder up to and including the date of the progress claim together with the builder's fee as specified in item 5 of the Schedule;
(ii)payments shall be payable by the owner within five days of receipt of any progress claim;
(iii)if the owner shall not within five days of receipt of any progress claim notify the builder of their disagreement with any of the items therein specifying full details of the owner's disagreement the owner shall be deemed to have accepted and approved of that progress claim as true and correct;
(iv)if any dispute arises as to any item in a progress claim the owner shall pay to the builder the undisputed portion of that progress claim within the period specified in subclause 10(b) and the balance shall, if not agreed and paid by the date of the next progress claim, be resolved in accordance with clause 18; and
(v)if any dispute arises as to any item in a progress claim which dispute remains unresolved at the date of the next progress claim, the builder may suspend the works until the dispute is resolved or for any shorter period he may decide without prejudice to either party's rights in accordance with this contract.
6.Clause 11 deals with time for performance. In this case item 9 of the schedule to the contract provides that the works be commenced within two weeks and completed within 18 months thereafter. Clause 11 provides:
(a)The builder shall commence the works by the time specified in item 9 of the schedule or as soon thereafter as may be reasonably practicable and shall proceed therewith with reasonable dispatch and diligence and complete the works within the time specified in item 9 of the schedule provided that:
(i)the owner shall have complied with any notice given by the builder pursuant to clause 2(c) hereof;
(ii)the builder is satisfied that the boundaries of the site have been adequately delineated;
(iii)provision has been made for adequate water supply to the site; and
(iv)the builder has received approval of the construction documents from all relevant authorities.
(b)Notwithstanding provisions to the contrary contained in this contract the builder shall not be responsible for any delays caused by any matter or thing over which the builder shall have no control and including (without limiting the generality thereof):
(i)any event which affects directly or indirectly access to or the condition of the site or the works or any person engaged on all material employed in or to be employed in or in relation to the works including acts of God, fire, explosion, earthquake, civil commotion, theft or acts of vandalism, flooding, inclement weather, strikes, industrial action, locks outs or holidays granted in accordance with industrial awards, fires, vehicle accidents, unavailability of labour, vehicles or equipment or permits required;
(ii)any alterations to the construction documents resulting in alterations to the works;
(iii)any instruction or delay of instruction by or any omission of the owner;
(iv)any deliberate and substantial prevention of all interference with the works or the progress thereof caused by the owner;
(v)any delay in the supply of materials or transport;
(vi)any proceedings being taken or threatened by any disputes with adjoining or neighbouring owners concerning the continuation or variation of delivery to or completion of the works upon the site;
(vii)any cessation of work pursuant to clause 15;
(viii)any delay in the commencement of or the continuance with the works caused by or resulting from an order or directive of a relevant authority;
(ix)any delay caused by proper investigation of any of the above by the builder or the owner; and
(x)any delay caused to the suspension of the works by the builder pursuant to the builder's powers contained herein.
(c)Upon the happening of any of the events aforesaid the builder shall notify the owner thereof and shall be entitled to such extension or extensions of time for completion of the works as shall in the circumstances be agreed and if there shall be any dispute the provisions of clause 18 shall apply.
7.Clause 15 provides for early termination of the contract as follows:
(a)In addition to their respective rights and remedies contained herein or in equity the builder may terminate this contract in any of the events mentioned in clause 16 hereof and the owner may terminate this contract in any of the events mentioned in clause 17 hereof.
(b)Neither party shall be at liberty to terminate this contract or exercise or enforce any other right or remedy in relation hereto whether pursuant to this contract or at law or in equity without first giving to the other party a notice in writing specifying the complaint(s). If the builder gives to the owner such notice of default the builder shall be entitled to suspend the works until the complaint(s) in that notice have been remedied. If after five days of service of such notice the other party fails to remedy the complaints, then the party giving such notice may terminate this contract forthwith.
(c)On such termination, subject to any agreement to the contrary or to any determination made pursuant to clause 18 the builder shall be entitled to be paid forthwith for all costs together with the builder's fee thereon incurred to that date. The builder may claim interest at the rate specified in item 8 of the Schedule hereto on all monies outstanding after the expiration of five days from the date of termination until payment in full is received by the builder.
8.Clause 16 deals with events allowing the builder to terminate. Relevantly, cl 16(a)(ii) specifies any breach of contract by the owner and cl 16(a)(v) specifies any failure by the owner for five days after the due date thereof to pay any monies pursuant to cl 10 of the contract.
9.Clause 17 provides for events allowing the owner to terminate; relevantly, any breach of contract by the builder.

The schedule to the contract provided for a builder's fee of 12.5% of the cost of the works plus GST and a minimum period between progress claims of 14 days.
Although the construction documents do not appear to have been annexed or signed by the parties for identification in accordance with cl 1(a), there is no dispute that the construction documents were the specification (exhibit 2.2) and drawings (exhibit 3) which the Town of Mosman Park approved for the purpose of issuing a building licence on 24 January 2006, although I note that numerous variations were notified by Mrs Semmens, including those contained in exhibits 67, 68, 69, 70, and 71.
The specification contains special clauses with respect to air‑conditioning and a swimming pool. These are expressed as follows:
T.1Air conditioning (supplied by owner and coordinated by builder)
The builder is to coordinate with the selected company and supply adequate space for ducting, power supply and air distribution points/vents for the proper installation of the air conditioning system as selected.
…
T.6Swimming pool (supplied by owner and coordinated by builder)
The builder is to coordinate with the selected pool company to properly execute the installation and fixing out of the pool as required.

Commencement of works

There is an issue as to when the works commenced. The Semmens maintain that in accordance with item 9 of the schedule, the time for completion of the works ran from two weeks after 23 March 2006 when the contract was signed. Ocram contends that as construction could not commence until after the swimming pool was installed, it was not reasonably practicable to commence until late May 2006 or later. The issue is of significance because the plaintiffs' purported termination of the contract was based in part upon the failure of Ocram to substantially complete the works by 7 October 2007, being 18 months and two weeks from the date of the contract.
As I have noted, the specification contained a special clause which provided that the swimming pool would be supplied by the Semmens, but that Ocram would 'coordinate' with the pool builder. It was common cause that the pool did not otherwise form part of the works. The footings and slab for the dwelling could not be laid until the pool was constructed. On this basis Ocram argues that it was not reasonably practicable to commence the works until the pool was done.
In her statement (exhibit 1.1) Mrs Semmens said:
It was about May 2006 I remember having to attend the property to resolve a fence issue with my neighbour. I noticed the works were at an early stage – I'm pretty sure the slab was not down at that time because the pool still needed to be dug first.
Ocram's first progress claim included an invoice from Gillespie Earthmoving dated 31 March 2006 for removal of excess rubble and fill. It also included the invoice of RG Lester & Associates dated 30 April 2006 for a site survey and pegging of the pool. In his evidence Mr Natoli accepted that Ocram organised for some demolition rubble to be removed and that the site was pegged in April. Mr Natoli also acknowledged that a Water Corporation account had been established in March.
On the evidence, by the time the site was pegged in April (the actual date of the survey is not evident), the requirements of cl 11(a)(i) ‑ (iv) were met: the boundaries had been delineated, water connected and the construction documents approved. Yet Ocram disputes that works were commenced, or were due to commence, in April, its position being that this did not occur until at least late May 2006.
Mr Natoli said that the site was cleared in March 2006 and earthworks began in May 2006. Compaction of the site took place on 1 June 2006. To accommodate delay in the construction of the pool minor works were done such as weed control.
In May 2006 Gillespie Earthmoving did further site works, including a compaction test. It is also apparent from the first invoice that a shed and portable toilet were delivered to site on 18 May 2006 and that pest control treatments were carried out by Advance Pest Control on 2 May and 8 June 2006, the first for weeds and the second, a pre‑treatment which I take to be connected with the laying of the slab. Temporary fencing was delivered on 18 May 2006. From the invoices the first concrete delivery by BGC was on 8 June 2006. The invoice for grano work is dated 16 June 2006.
As I have observed, the construction documents, incorporated by reference in cl 1(a), specifically provided that Ocram would coordinate with the pool builder. In this context I construe 'coordinate' in accordance with its ordinary meaning as 'to fit in with', consistent with the Shorter Oxford English Dictionary definition of 'to cause (things or persons) to function together or occupy their proper place as parts of an interrelated whole; act in the proper order for the production of a particular result'.
This part of the contract reflected the practical need for Ocram, which by cl 3 was given possession of the site 'upon the execution hereof and until practical completion', to accommodate the pool builder who was an independent contractor engaged by the Semmens. By this agreement Ocram gave implicit consent to the pool builder having access to the site.
The contract was entered into in clear contemplation of fact that the construction of a pool would necessarily, by virtue of the design of the dwelling, have to occur before substantial construction of the dwelling could commence. Yet no express allowance was made for the construction of the pool in the periods stipulated in item 9 of the schedule.
It is reasonable to conclude, therefore, that the periods in item 9 of the schedule were fixed on the basis that the pool construction was taken into account. There was no evidence as to the time taken to construct the pool apart from the invoice evidence as to roughly when earthworks were done by Gillespie Earthworks preparatory to the laying of the footings and slab.
No diary was kept by Mr Natoli or the site supervisor Mr Morabito and no schedule of works was ever prepared. The supplier and subcontractor invoices attached to the progress claims of Ocram do not necessarily show the dates on which services or goods were supplied. The pool builder's invoices were not tendered.
The contract provided by cl 11 that Ocram would not be responsible for delay caused by certain events, none of which has been submitted to be applicable. Indeed, no extension of time was ever sought by Ocram pursuant to cl 11(c).
In relation to commencement of the works, Ocram pleads in par 7 of the statement of claim that it 'commenced works pursuant to the terms of the contract'. Ocram's reply and defence to counterclaim by par 14 merely denies par 14 of the defence and counterclaim which alleges that 'at the time of issuing the default notice the defendant had failed to complete the works by the due date under clause 11 of the contract'.
No facts have been pleaded by Ocram to ground its contention that the works did not commence, and that the time for completion did not commence to run, until a date later than 7 April 2006, being 14 days after the date of the contract, or that it was not reasonably practicable to commence the works within that time or before a later time. Nevertheless, Ocram's position at trial, based on the evidence of Mr Natoli, was that the works did not commence until late May 2006. By reference to the subcontractor and supplier invoices attached to the first progress claim invoice Mr Natoli's evidence was that the slab was laid on 10 June 2006. On that basis, completion would have been due by the end of November 2007.
I do not accept the defendant's closing submission that the works did not commence and could not have been commenced until the end of June 2006. There is no evidence to support that conclusion.
On the evidence I am satisfied that the works were due to commence within two weeks of the date of the contract. Absent any extension of time, sought or agreed, practical completion was due by 7 October 2007. It is clear, nonetheless, that work was in fact commenced before the end of May 2006, so, either way, when the Semmens gave notice of default on 16 December 2007, the date for practical completion had passed.

Progress claims

The invoicing of progress claims by Ocram was somewhat irregular. Ocram's invoicing system involved a running account which purported to bring forward a progressive total of invoices rendered. Expenses incurred by Ocram to the date of the progress claim and the agreed builder's margin and GST were debited. The Semmens' payments were credited. This system gave rise to error and confusion, as did the debiting by Ocram of provisional amounts for expenses yet to be incurred. The invoicing system allowed numerous instances of double billing of supplier/subcontractor invoices. There were instances also of progress claims being made that did not include, as cl 10(b)(i) provided, all expenses incurred to the date of the claim. The invoicing system was haphazard and unreliable.
In July 2006 Ocram issued the first progress claim pursuant to the contract. The undated invoice appeared to be for work done up to 30 June 2006 (exhibit 8). The claim was for $60,162.25. It included the pre‑contractual expenses contained in the invoice dated 8 December 2005 (exhibit 5), and applied to those expenses and other expenses incurred, the agreed builder's margin of 12.5%. The invoice credited the Semmens' payments of the 8 December 2005 invoice and the deposit such that the amount due was $32,494.77. This amount was paid on 7 July 2006. While there is nothing in the contract to permit such re‑invoicing, no issue was taken with it.
The invoice incorrectly included a number of provisional sums which were later reversed. (Mr Natoli acknowledged in his evidence that provisional sums could not properly be charged under the contract.)
The second progress claim invoice dated 1 August 2006 was for a net sum of $53,046.77 (exhibit 9). It brought forward the wrong total from the previous invoice. It also credited a number of provisional expense claims from the previous invoice, namely, temporary fencing, bricklayer, cement/sand, plumbing and bobcat in the total sum of $9,200, debiting different amounts for these items in the sum of $20,000. In fact, the only expenses for which Ocram was entitled to claim in that invoice, being expenses actually incurred, came to $42,227.81. The builder's margin on this amount was $5,806.32, including GST. The invoice should have been for $48,034.13, but it was paid in the amount claimed.
The next invoice was issued on 21 August 2006 (exhibit 10). This also brought forward an incorrect progressive total. It credited the provisions for sand/cement, bobcat, concrete/pump cavity fill and bricks, bricklayer and steel in the amount of $20,000, but added other provisional amounts totalling $14,400. The result was an invoice for $37,771.07 which was paid.
The fourth progress claim was by invoice dated 9 October 2006 (exhibit 11). This invoice brought forward an incorrect progressive total. It credited provisional allowances of $14,400 and debited different provisional amounts totalling $40,800. Mrs Semmens disputed the claimed expense of Practical Landscaping ($396) because it was not in respect of the works, but for work done to repair damage to a neighbour's garden. The invoice as claimed was for $87,102.19 net.
Some time after this invoice was issued, Mr Semmens raised a query which resulted in Ocram issuing revised invoices for each of the first four progress claims. The invoices had the same dates as the originals. The first invoice was unchanged, but the next three were different. The revised invoices purported to correct errors caused by bringing forward the wrong progressive total. Invoice 4 was revised to $72,538.51.
The dispute over the landscaping expense was raised by a memo sent by fax from Mrs Semmens to Ocram on 17 October 2006. This memo (exhibit 12) also sought a cost update and a copy of 'the addenda', a reference to the specification of Mr Tascone (exhibit 2.2). This memo also took issue with an invoice from Speedy Hire which included the cost of missing equipment. Mr Natoli responded by letter of 18 October 2006 (exhibit 13) stating that the cost of repairing the damage to the neighbour's property had been agreed and that cl 6 of the contract permitted Ocram to charge for loss of hire equipment. Mr Natoli said that the invoices rendered could be correlated with his cost estimate and he attached a copy of the addenda.
Mrs Semmens paid $72,093.01 being the amount of the invoice less $396 and builder's margin on that amount. In her letter of 22 October 2006 attaching payment (exhibit 14) Mrs Semmens maintained her objection to the landscaping expense, conceded the Speedy Hire invoice and suggested that the 'addenda' document provided by Mr Natoli was created without consultation and was unacceptable. She said she would comment further at some later time.
The fifth claim was made by invoice dated 15 November 2006 which brought forward a progressive total of $238,082.28 (exhibit 15). It credited provisional allowances of $40,800 and included uninvoiced expenses for toilet hire and insurance. The amount of this invoice was $51,529.45 which Mrs Semmens adjusted to $51,079 to take account of the disputed landscaping costs. The adjusted amount was paid on 30 November 2006.
Exhibit 15 contains two invoices dated 15 November 2006, the first for $41,102.71 and the second for $51,529.45. The invoice for the smaller amount deleted a number of items claimed in the first, but added provisional allowances for scaffolding ($10,000) and bricks ($3,000). The Semmens paid $51,079.
Mrs Semmens' evidence was that she annotated the invoice in the lower amount to indicate that she disputed uninvoiced claims for toilet hire and provisional items. She faxed the annotated invoice to Ocram on 19 November 2006. Ocram responded by issuing the second invoice dated 15 November 2006 for $51,529.45 which deleted the claimed allowances for scaffolding and bricks, but included invoices from Austscaf, Austral Bricks and Butko which post‑dated the amended invoice.
The sixth progress claim was made by an invoice dated 11 December 2006 (exhibit 18). This invoice included a claim for penalty interest of $186.04 which Mrs Semmens disputed. An amended invoice was issued on 18 December 2006, deleting the interest claim. Mrs Semmens paid $14,234.65, being the invoiced amount less the landscaping expense of $450.45 which was still in dispute.
The next claim was by invoice dated 22 December 2006 (exhibit 19) for $12,298. Payment was made on behalf of the Semmens' in the amount of $11,847.55 being the invoiced amount less the landscaping expense.
The next claim (progress claim 8) was by invoice dated 30 January 2007 for $22,948.57 (exhibit 20). Mrs Semmens paid the invoice in full, notwithstanding the issue over the landscaping expense. She did so because she feared that Ocram would stop work and charge penalty interest.
On 1 March 2007 Ocram issued an invoice for progress claim 9 in the amount of $14,336.66 (exhibit 21). This amount was paid.
On 29 March 2007 Ocram issued an invoice for progress claim 10 in the amount of $61,327.55 (exhibit 22). This amount was paid.
On 6 May 2007 Ocram issued an invoice for progress claim 11 in the amount of $27,224.53 (exhibit 23). This amount was paid.
On 11 June 2007 Ocram issued an invoice for progress claim 12 for $17,583.85 (exhibit 24). This amount was paid.
On 2 July 2007 Ocram issued an invoice for progress claim 13 for $41,994.76 (exhibit 25). This amount was paid.
On 3 September 2007 Ocram issued an invoice for progress claim 14 for $34,386.52 (exhibit 26). Two payments were made, $30,229.91 initially, and $4,156.61 a few days later, due to a misreading of the invoice by Mrs Semmens.
On 12 November 2007 Ocram issued an invoice for progress claim 15 for $92,376.12 (exhibit 27). The invoice showed that all progress claims made by Ocram prior to that date (to a total of $520,036.74) had been paid. The total costs to that date as shown on the invoice were $612,412.86.
Mrs Rachel Natoli gave evidence on the basis of a witness statement dated 16 June 2011 and an attached schedule (exhibit 91) and a further statement dated 1 July 2010 and attached documents (exhibit 92). Mrs Natoli accepted that she made a mistake in the first few invoices which she rectified in November 2006. This involved carrying forward an incorrect figure. This was brought to her attention by Mr Semmens. She acknowledged that most payments by the Semmens were received on time.
On her evidence there was no foundation for the gratuitous allegation by Ocram in the statement of claim that progress payments were made in 'arbitrary and piecemeal fashion' (par 19).

Disagreement

The invoice of 12 November 2007 (progress claim 15) was erroneous. It included a claim for ABN Contracting of $20,855.14 with respect to an invoice dated 3 September 2007. This invoice in fact was dated 23 June 2007 and it had been previously charged to the Semmens' in progress claim 14 (invoice dated 3 September 2007). Also, it included a claim for Milentis Bobcat for $690 which was also part of progress claim 14.
By this time Mrs Semmens had begun to have real concerns, not only about incorrect invoicing, but also about Ocram's performance of the contract. During October 2007 she did not observe much activity on site. She had inspected the property and found that the painting of the upper floor did not match that of the lower. Also, it appeared to her that costs were starting to exceed the estimate which she had been given by Mr Natoli prior to the contract, that the works were far from being complete, and that the date for practical completion, which she understood to be 7 October 2007, had passed. It appeared to her that works had come to a halt.
On 15 November 2007 Mrs Semmens expressed her concerns in emails to Carlo Ammendolea, Ocram's estimator, and requested an updated budget (exhibit 28). Mrs Semmens referred to progress claim 15 and said there was a 'huge problem'. Total costs to date exceeded the estimate. A report of actual costs against estimated costs was requested. She said that her budget was not unlimited and that the question of costs would have to be sorted out before the claim would be paid. Mr Ammendolea responded that he could not see any major issues in terms of a comparison between estimated and actual costs (exhibit 29). He said the claim was fair and he urged Mrs Semmens not to hold back payment. Mrs Semmens replied that there was a problem to be sorted out. In her evidence Mrs Semmens said she had also noticed that an invoice of ABN Contracting had been claimed which had previously been paid as part of progress claim 14, but this is not apparent from her emails to Mr Ammendolea.
In an email to Mr Ammendolea of 19 November 2007 Mrs Semmens made a number of complaints about the works (exhibit 86). She referred to the installation of incorrect louvres and windows and the construction of a bulkhead in the study. She referred to the plans as being incorrect and complained that Mr Natoli had not contacted her for a long period. She gave a direction about the concrete floor of the alfresco area which was to be the same as the interior. Mr Ammendolea forwarded the email to Mr Natoli and Mr Morabito.
Between 21 and 24 November 2007 Mrs Semmens also exchanged emails with Mr Morabito and Mr Natoli. She expressed concern about the painting (exhibits 30 and 31). On 22 November 2007 she sent an email about the concrete and indicated that her landlord required her to vacate the rented premises she and her family occupied in February 2008.
On 24 November 2007 Mrs Semmens emailed Mr Morabito making reference to the painting issue and seeking advice as to how that would be managed, and raising concern about lack of work over a period of seven weeks, the need to arrange the completion of remaining work by February and a number of other matters, including the honing of the concrete floor and missing window sashes.

On 23 November 2007, Mr Natoli emailed Mrs Semmens regarding invoice 15 and suggested that they meet to discuss the costs and the budget (exhibit 32). Mrs Semmens replied by email on 24 November 2007 (exhibit 33). On 25 November 2007 Mrs Semmens emailed Carlo Ammendolea with a copy of the cover page of the March 2006 addenda and asked him to allocate costs to date against that document (exhibit 34).
On 26 November 2007 Mrs Semmens received an email from Mrs Natoli referring to a further invoice which was not attached. The attachment was sent on 27 November 2007 and was a further progress claim by invoice dated 26 November 2007 (progress claim 16) showing an amount due of $104,252.54 (exhibit 35). That sum represented the expenses claimed in progress claim 15 and two expenses not previously claimed, being Sam Nicotra (tiling) $10,415 and Reece Plumbing $25.81.
Mr Natoli sent an email to Mrs Semmens on 26 November 2007 indicating that he was prepared to address the cost issues, but required payment. Then, on 29 November 2007, Mrs Semmens received an email from Mr Natoli telling her to disregard the previous invoice as it would be amended to correct the duplication of the ABN Contracting invoice (exhibit 37).
Mrs Semmens then received a further email from Mr Natoli attaching a breakdown of costs and an amended invoice 16 dated 28 November 2007 for $80,986.89 (exhibit 38). The amendments purported to correct significant invoicing errors. The ABN Contracting invoice ($20,855.14) was credited, as were invoices of Beri Distributors ($363) and Speedy Hire ($139.91) which had also been charged twice. Some expenses, apparently omitted from earlier progress claims, were added: Coates Hire $45 (invoice dated 9 November 2006), Butko Transport $292.72 (invoice dated 31 December 2006), Speedy Hire $234.44 (invoice dated 30 April 2007), Ray Clinch $90 (invoice dated 23 November 2006) and a further Speedy Hire expense of $241.57 which was rather curiously described as 'costs not included in final invoice due to formula error'. The amended invoice did not include any invoices supporting progress claim 16. Mr Natoli requested payment by Monday, 3 December 2007. Amended invoice 16 showed total costs charged by Ocram of $601,023.63 and a balance due of $80,986.89.
Mrs Semmens' understanding was that Mr Natoli's request for payment referred to invoice 15 as she considered that amended invoice 16 had not been properly issued and was not due for payment in any event as five working days from 28 November 2007 would be 5 December 2007.
Mrs Semmens responded to Mr Natoli by email on 30 November 2007 querying the breakdown of costs and the tiling expense claimed in amended invoice 16 for which there was no invoice (exhibit 39).
Mr Natoli responded by email the same day attaching copies of the supporting invoices (exhibit 40).
Mr Natoli denied Mrs Semmens' allegation that in November 2007 costs were blowing out. In November 2007 bill costs were still below the estimate given to Mrs Semmens in March 2006 of $715, 851. Again, this is a matter of controversy but it is not material to any issue upon which adjudication is required as the contract was cost plus. In relation to invoice 15, Mr Natoli said that no objection or query to the invoice was received within five days, the prescribed period for payment under the contract.
In cross‑examination, Mrs Semmens was taken to her emails to Mr Ammendolea and Mr Morabito in late November 2007. It was put to her that in none of her emails to these persons did she complain about the invoice of 12 November 2007 for progress claim 15. In re‑examination Mrs Semmens explained that she did not take issue with the invoice with Mr Ammendolea or Mr Morabito because she was dealing with them in regard to other matters. In relation to invoicing, she would deal with Mrs Natoli. Mrs Semmens accepted that she did not speak to Mr Natoli, Mr Ammendolea or Mr Morabito by telephone between 15 November 2007 and 5 December 2007 and did not meet with any of them during this time. Mrs Semmens said that at that stage there was a total breakdown of trust.
On 3 December 2007 Mrs Semmens deposited at the National Australia Bank at Palmyra to the credit of Ocram, a cheque in the amount of $60,758.30. She gave evidence that this payment was against invoice 15 in respect of which she disputed the amount of $20,855.14 (and builder's margin thereon) relating to ABN Contracting. This payment brought the Semmens' total payments to Ocram to $580,795.04.
On 4 December 2007 Mrs Semmens received by email a message from Mr Natoli headed 'Suspension of works 30 Harvey Street, Mosman Park' in which Mr Natoli stated that Ocram's invoice dated 12 November 2007 had not been paid and that Ocram was entitled to suspend works (exhibit 41). The email otherwise responded to matters raised by Mrs Semmens in relation to costs. Mr Natoli stated that he remained willing to discuss the matters and pointed out that the matter needed to be resolved by 7 December 2007 as he was taking leave from that date until the end of January 2008. He stated:
We will not continue with construction until this matter is resolved. Please advise us of any other ways to remedying [sic] this situation.
In a reply to Mr Natoli's email on 5 December 2007 (exhibit 42) Mrs Semmens complained of a number of points of contractual non‑compliance before explaining the basis upon which the payment of $60,758.30 was made. The disputed items were as follows:
ABN Contracting:  $20,855.14
Austscaf:$396.00
Colavex Contracting:     $330.00
Joondanna Painting Contracting: $5,500.00
MacDougall Reprographics:      $24.75
Milentis Bobcat:     $690.00
Builder's margin and GST: $7,344.41
On 6 December 2007 Mrs Natoli sent an email to Mrs Semmens (exhibit 44) offering to repaint either the upper or lower part of the house (depending on choice of colour) at no charge. Later the same morning Mrs Natoli sent another email (exhibit 43) pointing out that the invoice for progress claim 16 for $80,986.89 took into account the duplication of the ABN Contracting expense of $20,855.14. She suggested that the Semmens were in arrears of $12,333.49 and indicated that work would remain suspended until at least that amount was paid. With respect to Mrs Semmens' concerns about cost overrun, Mrs Natoli suggested that the Semmens obtain an independent audit of costs by a qualified estimator. She concluded by saying:
We are happy for a quantity estimator to look at this job, and for a meeting to occur before Tuesday, so works on your house can continue and we can do our best to have you in the house by end Feb 2008.
Mrs Semmens responded that day by email (exhibit 72) stating that Ocram was in breach of contract by suspending the works. She disputed that the house could be finished by February because of the amount of work yet to be done and the fact that Mr Natoli would be away until the end of January. She said that Ocram was in breach of cl 11 (time for completion) and raised other issues in relation to the works, including the windows and the painting. She also queried the most recent invoice, pointing out that invoice 16 was for $11,876.42, not the amount stated by Mrs Natoli which included invoice 15. Mrs Semmens sought a meeting with a company representative prior to 18 December.
Mr Natoli said he had minimal involvement on site until just prior to the issue of the suspension notice on 4 December 2007. He had visited the site at various stages to confirm progress and quality, but otherwise left the supervision of the works to Mr Joe Morabito, the site supervisor. Mrs Natoli was responsible for administration. Mr Natoli said that Mrs Semmens was given a costs breakdown on 13 November 2007 and that Ocram continued to work until work was suspended on 4 December 2007. According to Mr Natoli, the tiler Mr Nicotra had worked through November 2007 and billed for work he had done. The tiler was waiting for mosaics to be supplied by the Semmens for a bathroom. Mr Morabito had been away for a number of weeks whilst tiling was going on. Mr Natoli said that he planned to be away in December 2007 and January 2008.
On 16 December 2007 Mrs Semmens wrote to Ocram enclosing a notice of default (exhibit 45). The letter stated:
I enclose a notice of default pursuant to clause 15(b) of the contract dated 23/03/06.
In addition to the defaults set out in the notice (which do not comprehensively set out all of your defaults in the construction of the works), I reserve all of my rights to seek damages from you in respect of your failure to properly construct the works.
I note that you have purported to suspend the works (but have not done so pursuant to the terms of the contract) and it is not accepted that there has been any valid suspension.
The notice of default complained of the following:
1.Failure to construct the works –
(a)according to the plans; and/or
(b)according to written variations; and/or
(c)in a workmanlike manner.
2.Failure to ensure construction documents caused to be prepared by the builder were free of error and consistent in every respect and particular. Then failure to rectify construction of study window in conflict with the bulkhead as shown on the plans.
3.Failure to allow reimbursement for costs of installation and removal of incorrect louvered window panels to bedroom 3 walk‑in wardrobe, contrary to the plans.
4.Failure to install correct metal louvres to external façade of bedroom 3 walk‑in wardrobe, in accordance with the plans.
5.Failure to complete the works within the period specified in item 9 of the contract's schedule of particulars.
6.Failure to rectify defective painting of the exterior of the works.
7.Failure to rectify defective construction of windows in downstairs' hallway and main bedroom in relation to the omission of awning sections as consistent with the construction documents.
8.Failure to respond to requests and inquiries of owners with respect to the owners in a timeous manner or at all.
Mr Natoli said that he received a notice of default from the Semmens on or about 16 December 2007. Although he was on leave at that time, he was still in contact with his office. In relation to the notice of default, he stated that it was vague as it did not adequately specify the Semmens' complaints. He did not consider that the contract could be terminated whilst work was suspended for non‑payment.
On 30 January 2008 Ocram rendered a further invoice for progress claim 17 (exhibit 46) which claimed the following expenses:
12/11/2007:LAS Contracting:  $3,905.00
30/11/2007:        Executive Doors:  $4,294.58
19/12/2007:Albrod Holdings:   $220.00
14/01/2008:ABN Contracting:                   $5,844.82
Adjustment to workers comp and contract works/third party insurance. Previously charged $5,000, 15/11/06. Adjustment amount based on payments to date calculated at 1% of turnover:  $1,185.00
Builder's margin and GST:  $1,124.40
The invoice indicated a balance owing of $37,762.28. The invoice did not attach the supporting invoices.
Mrs Semmens said she did not pay this invoice because she believed that Ocram had wrongfully suspended work and had failed to comply with the notice of default.
On 1 February 2008 Mrs Semmens attended at the site with a building inspector and took a number of photographs (exhibit 47). She identified handwritten notations on the photographs as hers, but later admitted that they were taken from a report.
On 4 February 2008 Mrs Semmens wrote to Ocram enclosing a notice of termination of that date (exhibit 48).
Mr Natoli replied by letter dated 8 February 2008 (exhibit 75) in which he denied any default by Ocram. He responded further as follows:
(1)We reject your suggestion that the works have not been constructed in accordance with the building contract and approved variations;
(2)We have clearly relayed to you that issues relating to the louvred window panels, metal louvres and windows in the downstairs hallway and main bedroom would be rectified free of charge by the supplier;
(3)We have also clearly related to you that the painter would be repainting the exterior of the building, again at no cost to you, and we were waiting on your colour selection;
(4)If you did not fail to pay the progress claims which resulted in works being suspended, we would have completed the works by the end of February, this being the agreed date taking into account when access was granted to the site, variations the works and delays associated with items which you have supplied;
(5)Your suggestion that it is Ocram Constructions who has failed to respond to requests for enquiries is contrary to the records of correspondence from our office to yourself; and
(6)We were in within our contractual rights to suspend the works arising from your failure to make payment under the terms of the building contract.
Mr Natoli went on in the letter to say that the notices of default and termination were unfounded and that by purporting to terminate the contract the Semmens had repudiated it. He asserted that Ocram remained in exclusive possession of the site under the terms of the contract. He suggested a meeting on‑site on Monday, 11 February 2008 with a view to coming to a resolution of the matter. He said that if the matter was not resolved Ocram would take action to recover monies owing to it under the contract.
On 14 February 2008 Mr Natoli attended the site with Mr Morabito, Mr Ammendolea and Brett Hayes, one of Ocram's labourers. A video was made of their inspection of the building (exhibit 73). At that stage Mr Natoli considered that works had reached the stage between lockup and practical completion and only the finishing trades were required in order to bring the works to handover stage. According to Mr Natoli's evidence, when work was suspended in December 2007 the following work was incomplete:
1.The balcony had not been tiled.
2.Cabinets remained to be installed by the Semmens.
3.Tiles were yet to be supplied by the Semmens.
4.Final electrical and plumbing supply (Semmens).
5.Installation of window sashes and minor rectification work.
6.Paving by owners (unselected).
7.Concrete and grano work (by owners).
8.External painting and render.
9.Internal painting.
10.Fixing of doors and skirtings.
11.Balustrade.
12.Shower screens.
13.Garage door.
There was no plea by the defendant, nor any evidence, of any agreement that the works would be practically completed by the end of February. It is clear on the evidence, however, that February 2008 was given significance in terms of practical completion because Ocram was aware that the Semmens would have to vacate their rented accommodation in that month.
On 17 December 2008 GV Lawyers on behalf of Ocram wrote to Lavan Legal, the Semmens' solicitors, enclosing an invoice from Ocram which attached invoices for three out of the four subcontractor expenses listed in the invoice (exhibit 49). The invoice, marked as progress claim 18, was dated 6 May 2008. It claimed expenses as follows:
29/01/2008:Mangini Group   $59.79
24/02/2008:Brett Hayes   $38.50
05/03/2008:        Brett Hayes   $38.50
30/04/2008:        Austscaf  $8,261.00
In addition, builder's margin and GST was claimed in the total amount of $1,154.69. The amount claimed to be due and owing by the Semmens at that point was $47,314.77.
It is admitted on the pleadings that Ocram raised a further account dated 6 November 2008, pleaded in par 17 of the statement of claim as invoice number 19, but in fact was a credit note in the sum of $6,045.82, for adjustments in favour of the Semmens. At trial there was a further credit conceded in the sum of $3,905 for LAS Contracting in order to arrive at the claimed sum.

The building cost dispute

As may be seen from the foregoing history of the progress claims and payments made pursuant to the contract, the poor invoicing practices of Ocram resulted in numerous errors. By and large these errors were acknowledged and corrected prior to the commencement of proceedings. Yet there remain outstanding issues (not all relating to invoicing errors) which have not been resolved. These have consumed a great deal of personal and professional resources, the high cost of which has seemingly not served as an adequate incentive to compromise or to deter their litigation. The disputes over individual costs items ought, in my opinion, to have been resolved, if not by mutual agreement, then by arbitration in accordance with the contract.
The Semmens have particularised their objections to Ocram's claim in schedule B of the defence and counterclaim. Part one of the schedule purports to identify duplicated and otherwise incorrect charges. This part of the schedule, slightly modified, is attachment A to the responsive witness statement of Mrs Semmens (exhibit 1.2). Table 1 of attachment A is headed 'all invoice errors' and table 2 is headed 'invoice 15 errors'.
The witness statement of Mrs Natoli (exhibit 92) responds. In the result, the Semmens contend that they have overpaid the defendant by $9,465.48.
It is also submitted on behalf of the Semmens that Ocram is not entitled to be paid for items of costs incurred after the termination of the contract or items claimed in a progress claim that were incurred before a previous progress claim.
Although the Semmens did not pay any further amount after 3 December 2007, they accept liability for Sam Nicotra's invoice which was claimed in invoice 16 and the margin on that expense, total $11,847.06. Otherwise, Ocram's claim is disputed.
The issues taken by the Semmens with respect to various costs charged by Ocram effectively put Ocram to proof of its entitlement to charge for those items and the builder's fee thereon pursuant to cl 10.
There are so many errors in Ocram's invoices that no weight can be given to the progress claims at face value. Hence, what is required is essentially an audit of the accounts, having regard to the basis of the objection raised by the Semmens in each case and the evidence available to show that the disputed items were properly and reasonably charged by Ocram. Ocram has not relied in its pleadings or in submissions on cl 10(b)(iii) as putting any items of costs not objected to within five days of a progress claim beyond dispute.
Ocram's claim is for the balance of a running account in which costs incurred by it and its builder's fee of 12.5% plus GST were debited and payments by the Semmens and corrections of invoicing errors were credited. Such a claim cannot be proved by merely demonstrating a debit balance.
At the same time it is not reasonable, having regard to the provisions of the contract and the fact that most of Ocram's charges are not disputed, that Ocram have to prove that all of the costs charged were properly and reasonably incurred. After all, the amount claimed to be due to Ocram is about 6% of the sum of its progress claims and the amount by which the Semmens' claim to have overpaid Ocram is about 1.5% of that sum.
In the circumstances it would be appropriate to proceed on the basis that, the Semmens having put in issue certain expenses, Ocram bears the onus of proving to the civil standard that the costs represented by the particular costs item in each case, and the builder's fee, were incurred and charged in accordance with cl 10.
I do not accept the plaintiffs' submission that by reason of the contract having been brought to an end prior to the completion of the work the defendant must prove a quantum meruit. The builder's entitlement to render and be paid for progress claims on the terms provided by cl 10 is inconsistent with the contract being construed as an entire contract. Accordingly, to recover the balance of its account Ocram does not have an onus to prove that all costs for which progress claims were issued were reasonably and properly incurred, regardless of whether the plaintiffs have notified objection to them. However, where an item of costs is disputed, clearly it is for Ocram to prove its right to be paid.

Finally, with respect to the claim for storage expenses, the evidence of Mrs Semmens was that while Peter Bodeka Constructions was completing the works some of her family's household items were in storage. She said she paid $3,840 to Koala Self Storage. A copy of a statement of Koala Self Storage was tendered as exhibit 53. It is addressed to Ms Audrey Shepherd, Mrs Semmens' mother. It was Mrs Semmens' evidence that Mrs Shepherd would reside in the new residence. The statement is for a period from September 2007 to August 2009. It indicates clearly that storage expenses continued to be incurred even after October 2008 when the Semmens went into occupation. All of the losses claimed are in issue. The evidence, minimal and unexplained, is inadequate to satisfy me that they have suffered the claimed loss. Damages are not proved by mere assertion.
The claim for damages for breach of contract by reason of delay is therefore assessed in the sum of $16,050, being the amount I have calculated in respect of rent.

Conclusion

It follows from these reasons that the Semmens' claim for damages should be allowed in the sum of $78,421.18 and Ocram's claim for the balance of money due under the contract in the sum of $19,758.07. I will hear from the parties with respect to interest and costs.