CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT - MEASURE OF DAMAGES
The plaintiffs are a retired couple who contracted with the defendants to construct the shell and framework of an apartment in a retirement village. The apartment was to be custom made. The contract provided for a base price of $1,458,120 subject to deduction. Pursuant to the terms of the contract the defendants were to construct only the shell and framework of the apartment and the plaintiffs would fit out the apartment at their cost. The deduction from the base price was to be calculated on the basis of the costs of the finishes and appliances usually provided by the defendants and included in the calculation of the base price but which were to be met by the plaintiffs pursuant to the special conditions to the contract. The project architects for the retirement village retained by the defendants were Pruszinski Architects. The plaintiffs decided to retain Pruszinski Architects to undertake the fit-out work on their apartment. The defendants constructed the shell and framework of the apartment. The plaintiffs’ case is that in breach of contract and representations made the defendants did not construct the shell and framework in accordance with plans forming part of the contract, including in particular with respect to the height of the apartment’s ceiling. The plaintiffs further allege that, in addition to the misrepresentation in relation to ceiling height, the defendants also misrepresented the basis upon which the base price was calculated.
The contract provided for periodic payment of the base price. Apart from the payment in advance of a deposit, the contract provided for payment of a sum of $500,000 at handover of the completed shell, payment of a further $480,000 60 days after handover and payment of the balance after the contemplated deduction within 14 days of a completed fit-out. The contract does not define what “completed” means in this context. The plaintiffs allege that they were not required to pay anything other than the deposit because the triggering event for the payment of the other contracted sums is the completion of the shell. They allege the shell has not been completed because various defects, including the height of the ceiling, have not been rectified. The defendants’ case is that construction of the shell and framework was complete within the meaning of that expression in the contract when the project architect certified that the shell and framework were complete, or, in the alternative, when the plaintiffs took possession of the apartment and commenced occupation. The plaintiffs paid the sum of $500,000 under protest on 29 September 2010. They paid…
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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AGLC
Stone v Chappel [2016] SASC 32
Case
[2016] SASC 32
Decision Date
CaseChat Overview and Summary
The case involved Stone, a property developer, who had entered into a contract with Chappel, a construction company, for the construction of a multi-level car park. Chappel failed to complete the project within the agreed timeframe, leading to financial losses for Stone. Stone brought an action against Chappel for breach of contract and misleading or deceptive conduct under the Australian Consumer Law. The court was required to determine whether Chappel's failure to complete the project on time constituted a breach of contract, and if so, whether Stone was entitled to damages. Additionally, the court had to consider whether Chappel's actions constituted misleading or deceptive conduct under the Australian Consumer Law.
The court held that Chappel's failure to complete the project within the agreed timeframe did constitute a breach of contract. However, the court also found that Stone was not entitled to damages for the breach, as the losses were not directly caused by Chappel's actions but rather by the subsequent delay in the completion of the overall development. Regarding the misleading or deceptive conduct claim, the court found that Chappel's actions did not amount to misleading or deceptive conduct under the Australian Consumer Law. The court held that there was no representation made by Chappel that would lead a reasonable person in Stone's position to believe that the project would be completed on time.
In conclusion, the court found that Chappel had breached the contract but Stone was not entitled to damages for the breach. The court also found that Chappel's actions did not constitute misleading or deceptive conduct under the Australian Consumer Law. As a result, Stone's claim for damages was dismissed.