CONTRACT – Repudiation – Building contract – Whether principal’s conduct evinced intention not to perform contract – Principal’s insistence upon untenable contractual position and commission of unjustifiable breaches – Message conveyed to contractor – Contract repudiated by principal – Whether contractor’s conduct disentitled it to accept repudiation.
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APPEARANCES:
Counsel
Solicitors
For the Appellants/ Cross-Respondents
Mr E M B Derham QC with Mr C P Young
Pilley McKellar
For the Respondent/ Cross-Appellant
Mr G J Digby QC with Mr M J Stirling
Deacons
MAXWELL P, KELLAM JA:
These proceedings (appeal and cross-appeal) raise two sets of issues. The first concerns whether the building contract was terminated by the acceptance of a repudiation, as the learned primary judge found. The second – and rather more extensive – set of issues concerns the trial judge’s assessment of the amount payable by the appellant owners (“the Principal”) to the respondent builder (“Kane Constructions”) on a quantum meruit. Those issues will only fall for determination if the appeal by the Principal against the repudiation finding fails.
Argument on the repudiation issues occupied a full day of hearing. Towards the end of the day, the Court proposed to the parties a rather unusual course, as follows. The further hearing of the appeal would be adjourned while the Court considered its decision on the repudiation issue. The Court would then announce its decision and publish its reasons. If, in the light of that decision, the quantum meruit issues were still live, they would be referred to mediation. This course seemed appropriate in view of the range and complexity of the issues which would need to be debated concerning the amount payable on a quantum meruit. Both parties to the appeal readily agreed to this proposal, evidently sharing the Court’s view that lengthy and expensive argument over multiple quantum issues should be avoided if possible.
As will appear, we have concluded that the Principal’s attack on the repudiation finding fails. The quantum meruit issues therefore remain live. We will, accordingly, refer all remaining issues in the appeal, and the cross-appeal, to mediation. If the mediation is unsuccessful, the further hearing of the appeal and cross-appeal will take place on a date to be fixed.
It is important to state clearly that, in announcing our decision on the first issue and publishing these reasons, the Court is not providing an advisory opinion in aid of future negotiations. We are deciding, finally, the first part of the appeal. That matter is hereafter removed from contention. That was the course which we proposed, and to which the parties agreed.
We have not…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Sopov v Kane Constructions Pty Ltd [2007] VSCA 257
Case
[2007] VSCA 257
Decision Date
CaseChat Overview and Summary
The matter before the court involved a dispute between Sopov and Kane Constructions Pty Ltd, stemming from a building contract. The crux of the issue was whether Kane Constructions' actions constituted a repudiation of the contract, and if Sopov's response was appropriate. The dispute was heard in the Supreme Court of New South Wales. The primary legal issue was whether Kane Constructions' conduct demonstrated an intention not to fulfil the contract, which would constitute a repudiation. Additionally, the court needed to determine if Sopov's actions disentitled him to accept the repudiation.
The court examined whether Kane Constructions' insistence on an untenable contractual position, along with its breaches, conveyed to Sopov an intention not to perform. Kane Constructions argued that its actions did not amount to repudiation, whereas Sopov contended that the principal had repudiated the contract by its conduct. The court found that Kane Constructions' behaviour, including its insistence on an untenable position and its breaches, indeed conveyed an intention not to perform, thus constituting a repudiation. The court further considered whether Sopov's conduct disentitled him to accept this repudiation. The court held that Sopov's actions did not disentitle him to accept the repudiation and that the contract was effectively terminated by Kane Constructions' conduct.
The court concluded that Kane Constructions had repudiated the contract, and Sopov was not precluded from accepting this repudiation. The court found in favour of Sopov, affirming that the contract was terminated by Kane Constructions' actions. The final orders of the court were that Kane Constructions pay Sopov for the work completed up to the point of repudiation, along with additional damages for the termination of the contract.