The Owners - Strata Plan No. 91174 trading as Owners Corporation Throsby Street v RPF Building Pty Limited

[2025] NSWSC 312

Supreme Court

New South Wales

Medium Neutral Citation:

The Owners – Strata Plan No. 91174 trading as Owners Corporation Throsby Street v RPF Building Pty Limited [2025] NSWSC 312

Hearing dates:

2 April 2025

Date of orders:

4 April 2025

Decision date:

04 April 2025

Jurisdiction:

Equity - Technology and Construction List

Before:

Williams J

Decision:

See orders at paragraph [50].

Catchwords:

CONTRACTS – Interpretation of commercial contracts – Application of established principles.

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW), r 28.2

Cases Cited:

Australian Casualty Co Ltd v Federico (1986) 160 CLR 513; [1986] HCA 32

Australian Vintage Ltd v Belvino Investments No. 2 Pty Ltd (2015) 90 NSWLR 367; [2015] NSWCA 275

Charter Reinsurance Co Ltd v Fagan [1997] AC 313

Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295

Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd (2019) 101 NSWLR 679; [2019] NSWCA 185

Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12

J & P Marlow (No 2) Pty Ltd v Hayes (2023) 112 NSWLR 29; [2023] NSWCA 117

Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd (2023) 276 CLR 500; [2023] HCA 6

McGrath v Sturesteps (2011) 81 NSWLR 690; [2011] NSWCA 315

Newey v Westpac Banking Corporation [2014] NSWCA 319

XL Insurance Co SE v BNY Trust Company of Australia Ltd [2019] NSWCA 215

Texts Cited:

N/A

Category:

Procedural rulings

Parties:

The Owners – Strata Plan No. 91174 trading as Owners Corporation Throsby Street (Plaintiff)
RPF Building Pty Limited (ACN 087 371 033) (First Defendant)
RPF Throsby Pty Limited (ACN 146 403 572) (Second Defendant)

Representation:

Counsel:
Mr D K Smith (Plaintiff)
Mr S Lipp (First and Second Defendants)

Solicitors:
Wilde Legal (Plaintiff)
Arch Law (Australia) Pty Limited (First and Second Defendant)

File Number(s):

2019/140790

Publication restriction:

N/A

JUDGMENT

1. The plaintiff is the owners’ corporation for Strata Plan 91174, being the residential portion of a mixed-use development at 18 Throsby Street in Wickham, which is a suburb of Newcastle (the Development). The first defendant, RPF Building Pty Limited, is the builder contracted for the Development. The second defendant, RPF Throsby Pty Limited, is the developer.

2. The plaintiff commenced these proceedings in the District Court in 2017 claiming damages for allegedly defective building works.

3. The proceedings were transferred to this Court on 18 March 2019 when it became apparent that the claim exceeded the monetary jurisdictional limit of the District Court.

4. The parties entered in a Deed of Settlement on 10 August 2020.

5. Clause 3.1 of the Deed provides:

“In consideration of the mutual releases in clause 5 below, RPF will carry out the Works at its cost.”

6. On one reading of the description of the parties to the Deed immediately above the Recitals, the reference to “RPF” is a reference to the developer RPF Throsby Pty Limited. However, it is also arguable that the description of the parties should be read as applying the definition “RPF” to RPF Building Pty Limited and RPF Throsby Pty Limited. The parties’ submissions concerning the proper construction of the Deed implicitly proceed on the basis of the second reading, which I will therefore adopt. However, the question whether the term “RPF” refers to the developer only, or to the builder and the developer, is not determinative of the resolution of the question ordered to be determined separately which is the subject of these reasons.

7. The Deed defines the “Works” to be carried out by “RPF” under clause 3.1 as meaning:

“… all works performed or required to be performed under the Final Rectification Scope including Certification”.

8. The “Final Rectification Scope” is defined as the scope of works in Schedule A to the Deed, which is a 28-page list of numbered work items with a description of the method of rectification for each item agreed between the parties.

9. The Deed defines “Certification” as meaning:

“… certification from Nathan Halstead that the Works completed are compliant with the relevant standards and laws”.

10. Clause 3.6 of the Deed provides:

“The parties agree that Nathan Halstead or [sic – of] AED Consulting is appointed to provide Certification of the Works and is adequately insured in relation to the Certification.”

11. Mr Nathan Halstead is a Registered Building Surveyor, an Accredited Member of the Australian Institute of Building Surveyors, a Registered Certifier – Fire Safety, an Accredited Practitioner – Fire Safety Assessment, and a Registered Professional Engineer – Fire Safety in New South Wales, Queensland and Victoria.

12. Pursuant to clause 3.7 of the Deed, these proceedings were stood over while the Works were being carried out for a period that was initially envisaged to be 11 months, but which was extended on several occasions with the consent of all parties in accordance with clause 3.8 of the Deed. Those extensions expired in February 2024.

13. On 6 February 2024, Mr Halstead signed a document entitled “Conditional Deed Completion Statement” to which I will refer in more detail below.

14. Clauses 3.9 and 3.10 of the Deed relevantly provide:

“3.9   Upon the Works achieving Certification the Owners agree to file a Notice of Discontinuance of the Proceedings with no order as to costs. …

3.10   Insofar as there are any items in the Final Rectification Scope that do not achieve Certification, the Owners retain the right to continue the Proceedings in respect of those items only. …”

15. Clause 4 of the Deed provides:

“4.1 Should a party materially breach this Deed, the other party will serve upon the breaching a party (sic) a notice, detailing:

The breach;

The method to rectify the breach;

Notice that if the breach is not rectified within 10 Business days, they will consider their rights under this clause 4.

4.2 In the event of a material breach of this Deed by RPF, the Owners retain the right to continue the Proceedings in relation to that breach.

4.3 In the event of a material breach of this Deed by the Owners, RPF retain the right to seek an order of the Court for compliance with the terms of this Deed.”

16. Clause 5 of the Deed provides:

“Upon execution of this Deed and subject to the performance of RPF’s obligations in accordance with clause 3 above, each Party forever releases, indemnifies and discharges the other Party from all Claims arising from or in connection with the Contract, Dispute and the Proceedings.”

17. Clause 6 of the Deed provides:

“6.1 Save for clause 5, this Deed may be pleaded as a bar in respect of any proceedings brought by either of the Parties arising from or in connection with the Dispute, the Proceedings, the Contracts and the Works.

6.2 Nothing in clause 5 or this clause 6 prevents either Party from enforcing the terms of this Deed.”

18. As I have already mentioned, Mr Halstead issued a document entitled “Conditional Deed Completion Statement” on 6 February 2024 (the Completion Statement).

19. The Completion Statement contains the following “Project Description”:

“Works on site to complete the requirements of the Executed Deed of Settlement between the Owners Corporation SP91174 and RPF Building P/L and RPF Throsby P/L dated 10.8.2020.”

20. The operative part of the Completion Statement is in Section 5 of the document entitled “Statement”. Section 5 states:

“I, Nathan Halstead for AED,

Confirm that:

I have been appointed as the Consultant for the development.

The building work has been completed in accordance with the deed other than the works listed in the exclusions above.”

21. The works excluded from the confirmation in Section 5 of the Completion Statement comprise eight work items from the Final Rectification Scope which are listed in Section 3 of the Completion Statement, entitled “Exclusions”.

22. The confirmation in Section 5 of the Completion Statement is otherwise subject to Section 4, which is entitled “Limitations”. Section 4 states that:

“This statement does not consider the following:

Consideration of matters outside the scope or limitations of the BCA and only related to the matters agreed in the Executed Deed of Settlement between the Owners Corporation SP91174 and RPF Building P/L and RPF Throsby P/L dated 10/08/2020.

Determining full compliance with BCA in relation to the building design or services design, or the rectification deed.

This report does not provide approval for any Certification under the Environmental Planning & Assessment Act 1979 or its Regulations.

Consideration of any structural elements or geotechnical matters relating to the building, including any structural or other assessment of the existing fire resistant levels of the building.

Consideration of any fire systems services operations (including hydraulic, electrical or other systems).

Assessment of mechanical plant operations, electrical systems, security systems or lift systems.

Determining compliance with the Disability Discrimination Act or Part D3 of the BCA.

Consideration of energy or water authority requirements.

Consideration of local Environmental Planning requirements, policies and/or guidelines.

Reporting on hazardous materials, OH&S matters or site contamination.

Heritage significance is not specifically assessed.

Pest inspection or assessment building damage caused by pests (general/visual pest invasion or damage will be reported, however invasive or intrusive inspections have not been carried out).

It is also noted that some requirements of the BCA are recognised as being interpretive in nature. Where these matters are encountered, interpretations are made in accordance with AED policy.”

23. Section 2 of the Completion Statement, entitled “Information Attached to This Decision”, contains a list of 92 documents. Those documents, which were tendered in evidence at the hearing before me, comprise in excess of 450 pages of material. The list in Section 2 does not identify the specific Final Rectification Scope work item or items to which each of the 92 documents corresponds. Most of those documents have been described in the Section 2 list as having been prepared by RPF Building, or by Mr Andrew Cranston of RPF Building.

24. On 15 February 2024, the Court made an order by consent granting leave to the plaintiff to amend its Statement of Claim in these proceedings by:

1. claiming damages for the defendants’ breach of clause 3.1 of the Deed by failing to obtain Certification in respect of the eight work items in the Final Rectification Schedule that were the subject of the Exclusions in Section 3 of the Completion Statement, together with other unspecified work items in the Final Rectification Schedule that were said to be affected by the Limitations in Section 4 of the Completion Statement;

2. pleading further or alternatively that, pursuant to clause 3.10 of the Deed, the plaintiff was entitled to continue these proceedings in respect of the eight work items in the Final Rectification Schedule that were the subject of the Exclusions in Section 3 of the Completion Statement, together with such work items in the Final Rectification Schedule as were affected by the Limitations in Section 4 of the Completion Statement;

3. alleging that the eight work items in the Final Rectification Schedule that were the subject of the Exclusions in Section 3 and such work items as were affected by the Limitations in Section 4 of the Completion Statement are defective home building works; and

4. an order requiring the defendants to carry out works to rectify those items or, alternatively, damages for the cost of such rectification.

25. On 7 March 2025, the Court granted leave to the plaintiff to further amend its Statement of Claim in these proceedings by:

1. pleading in paragraph 22A that, at the time the Completion Statement was issued, the defendants had failed to perform the Works described in some 20 items of the Final Rectification Scope in Schedule A to the Deed, only three of which are Exclusions in the Completion Statement;

2. expanding the scope of the claims for damages for breach of clause 3.1 of the Deed accordingly; and

3. expanding the scope of the claims for rectification of defective buildings, or damages for the cost rectification of those works, to include the 20 items of the Final Rectification Scope in Schedule A to the Deed that are pleaded in paragraph 22A.

26. At the same time, the Court made the following orders:

“Pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005, order that the following question be determined separately from any other question and before any trial in the proceedings:

‘Is the effect of the Deed of Settlement dated 10 August 2020, the Conditional Deed Completion Statement dated 6 February 2024 and the ‘information attached’ to the statement that the plaintiff cannot continue these proceedings in respect of building work certified in the statement as having been completed in accordance with the deed?’

Note that the separate question will be determined having regard to the following documents:

(1)    Deed of Settlement dated 10 August 2020

(2)    Conditional Deed Completion Statement dated 6 February 2024

(3)   the ‘information attached’ to the Conditional Deed Completion Statement”.

27. I understand the reference in the terms of the separate question to the continuation of these proceedings to be a reference to the continuation of the plaintiff’s claims for rectification or damages for the cost of rectification of defective building works, and damages for breach of the Deed, as pleaded in the Further Amended Statement of Claim.

28. The answer to the separate question turns on the proper construction of the Deed, including whether the Completion Statement issued by Mr Halstead is a “Certification” within the meaning of the Deed.

29. The defendants accept that the plaintiff is entitled to continue the proceedings in respect of the eight work items listed in Section 3 of the Completion Statement as Exclusions, but contend that they are not entitled to do so in respect of the 17 work items in paragraph 22A of the Further Amended Statement of Claim that are not Exclusions.

30. The defendants submit that the Deed operates to bar the plaintiff from bringing any claim in respect of any work item in the Final Rectification Scope upon that work item being certified by Mr Halstead. The defendants place particular reliance on clauses 3.9 and 3.10 of the Deed which they submit provide the mechanism by which the dispute that is the subject of the proceedings is to be finally resolved. The defendants submit that, save for the eight work items identified as Exclusions, the Works have been certified by Mr Halstead issuing the Completion Statement. The defendants submit that this is a complete answer to the plaintiff’s claim in respect of the 17 work items referred to above by reason of clauses 3.9 and 3.10 of the Deed. The defendants submit that the Further Amended Statement of Claim impermissibly seeks to go behind Mr Halstead’s certification in the Completion Statement in respect of those 17 items.

31. The plaintiff submits that clause 3.1 of the Deed, read together with the definitions of “Works” and “Certification”, imposes two obligations on the defendants:

1. to perform the work described in each work item in the Final Rectification Scope; and

2. to obtain Mr Halstead’s certification that such work is compliant with relevant standards and laws.

32. The plaintiff submits that it is no part of Mr Halstead’s role under the Deed to certify whether work items in the Final Rectification Scope have been completed by the defendants. The plaintiff submits that Mr Halstead’s role is limited to certifying that those works are compliant with the relevant standards and laws.

33. The plaintiff submits that the release in clause 5 and the bar in clause 6 of the Deed are not enlivened if the defendants fail to perform their obligation under clause 3.1 to complete the work items in the Final Rectification Scope, even if Mr Halstead has certified those work items as compliant. The plaintiff’s claim in paragraph 22A of the Further Amended Statement of Claim is that the defendants failed to perform some 20 of those work items, 17 of which are covered by the Completion Statement as I have mentioned above.

34. In addition to submitting that clauses 5 and 6 of the Deed are inoperative by reason of the defendants’ alleged failures to complete those work items, the plaintiff submits that clause 4.2 of the Deed expressly entitles the plaintiff to continue these proceedings in respect of those work items.

35. The plaintiff submits that clauses 3.9 and 3.10 of the Deed, properly construed, merely prevent the plaintiff from asserting that work items which have in fact been completed as required by clause 3.1 of the Deed are non-compliant with relevant standards and laws if Mr Halstead has certified them as compliant.

36. The plaintiff further submits that the Completion Statement does not, in terms, contain a certification by Mr Halstead that the Works are compliant with relevant standards and laws. Rather, Mr Halstead purports to confirm that the Works have been completed in accordance with the Deed, which the plaintiff submits is extraneous to Mr Halstead’s role provided for in the Deed.

37. Further or alternatively, the plaintiff submits that, even if that confirmation statement in Section 5 of the Completion Statement is read as a statement of compliance with relevant standards and laws, the express Limitations in Section 4 of the Completion Statement mean that it cannot be understood as capturing all relevant standards and laws as required by the Deed. In particular, the plaintiff submits that the second limitation in Section 4 can reasonably be read as Mr Halstead eschewing any confirmation or certification that the work items in the Final Rectification Scope in Schedule A to the Settlement Deed are fully compliant with the Building Code of Australia.

38. The defendants submit that the statement in Section 5 of the Completion Statement confirming that the “building work has been completed in accordance with the deed other than the works listed in the exclusions above” is, in substance, a statement that the work items in the Final Rectification Scope in Schedule A to the Settlement Deed have been completed in a manner that is compliant with relevant standards and laws, save for the Exclusions.

39. The Deed is a commercial contract. Its terms are to be understood objectively, according to what a reasonable businessperson, placed in the position of the parties, would have understood them to mean, having regard to the circumstances surrounding the Deed and the commercial purpose and objects to be achieved by it. [1] The Court is entitled to approach the task of construing the Deed on the basis that the parties intended to produce a result which makes commercial sense. However, the commercial object of the Deed cannot be used to give the words used by the parties a meaning that they cannot reasonably bear. ^[2] Caution is required when resort is had to assertions of commercial sense (or, conversely, commercial inconvenience) as a reason for construing a commercial contract in a manner that departs from the ordinary meaning of the language that the parties have in fact used. ^[3] There is “no licence for ‘judicial rewriting’ of an agreement”. ^[4] The Court is not permitted to depart from the ordinary meaning of the words used by the parties merely because it regards the result as inconvenient or unjust. ^[5]

    1. Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 at [16] (Kiefel, Bell and Gordon JJ); Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd (2023) 276 CLR 500; [2023] HCA 6 at [27] (Kiefel CJ, Gageler, Gordon, Gleeson and Jagot JJ).

    2. J & P Marlow (No 2) Pty Ltd v Hayes (2023) 112 NSWLR 29; [2023] NSWCA 117 at [79] (Bell CJ), citing Australian Casualty Co Ltd v Federico (1986) 160 CLR 513 at 520; [1986] HCA 32 (Gibbs CJ) and Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 388 (Mustill LJ).

    3. Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd (2019) 101 NSWLR 679; [2019] NSWCA 185 at [58] (Bell P, as the Chief Justice then was); XL Insurance Co SE v BNY Trust Company of Australia Ltd [2019] NSWCA 215 at [78]-[79] (Gleeson JA, Bell P and Emmett AJA agreeing).

    4. Newey v Westpac Banking Corporation [2014] NSWCA 319 at [91] (Gleeson JA, Basten and Meagher JJA agreeing); Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295 at [72]-[73] (Leeming JA, Gleeson and White JJA agreeing).

    5. McGrath v Sturesteps (2011) 81 NSWLR 690; [2011] NSWCA 315 at [17] (Bathurst CJ, Macfarlan JA and Sackville AJA agreeing), referred to with approval in Cherry v Steele-Park at [74] (Leeming JA, Gleeson and White JJA agreeing).

32. It is obvious from the terms of the Deed that its commercial purpose was to provide for the resolution of these proceedings. The Deed achieved that object by:

1. defining the scope of the works that the defendants would be required to complete in order for the plaintiff to discontinue the proceedings (clause 3.1 and the Final Rectification Scope referred to in the definition of “Works”);

2. specifying the time within which those works were to be completed, and the circumstances in which and the mechanism by which that time could be extended (clauses 3.7 and 3.8);

3. adopting “Certification” as the mechanism for determining whether or not those works had been completed in compliance with relevant standards and laws;

4. making the achievement or failure to achieve “Certification” determinative of whether, or to what extent, the plaintiff is entitled to continue these proceedings (clauses 3.9 and 3.10, and also clause 4.2);

5. the mutual releases, conditional on the defendants’ compliance with their obligations under clause 3, including the obligation to complete the “Works” which extends to achieving “Certification” (clause 5.1); and

6. the Deed being able to be pleaded as a bar to proceedings, other than proceedings to enforce the terms of the Deed (clause 6).

41. A reasonable businessperson placed in the position of the parties at the time they entered into the Deed and reading the terms of the Deed would have understood that this was its commercial purpose and would have understood the role of “Certification” in achieving that purpose under the contractual scheme that I have described above.

42. I infer from the parties’ agreement recorded in clause 3.6 of the Deed to appoint Mr Halstead to “provide Certification of the Works” that the parties were aware of Mr Halstead’s professional qualifications referred to at [11] above. That knowledge is also to be attributed to the reasonable businessperson when applying the principles referred to at [39] above.

43. That reasonable businessperson would have understood the language used by the parties in recording their agreement in clause 3.6 that Mr Halstead was “appointed to provide Certification of the Works”, and in defining “Certification” as meaning certification from Mr Halstead that “the Works completed are compliant with the relevant standards and laws”, to mean that the Works would “achieve Certification” as referred to in clause 3.9 of the Deed when Mr Halstead, applying his professional judgment, ascertained that each item of work in the Final Rectification Scope had been completed, formed the view that it had been completed in compliance with the relevant standards and laws, and issued a document recording his certification of those matters. The reasonable businessperson would not have attributed to the parties an intention that Mr Halstead could “provide Certification of the Works” by, for example, merely gathering together certifications and statements prepared by other persons, without applying his own professional judgment to the questions whether the work items in the Final Rectification Scope had been completed and were compliant with relevant standards and laws. The reasonable businessperson would not have attributed to the parties an intention that this would suffice to oblige the plaintiff to give up the pursuit of its claims for relief in respect of defective building works in these proceedings.

44. On the face of the terms of the Completion Statement and the documents listed in Schedule 2 of the Completion Statement which were tendered at the hearing of the separate question, Mr Halstead has merely confirmed that RPF Building or a third party has certified that the work items in the Final Rectification Scope have been completed (other than the eight items expressly excluded in Section 3 of the Completion Statement), and has then confirmed that either RPF Building or a third party has certified that those works are compliant with relevant standards and laws, subject to the Section 4 Limitations. No evidence was adduced at the hearing of the separate question to establish that Mr Halstead has done anything more than he appears to have done on the face of the Completion Statement and the documents listed in Schedule 2. The defendants were unable to explain how Mr Halstead’s confirmation that RPF Building or third parties had certified compliance (subject to the Section 4 Limitations) constituted “certification from Nathan Halstead that the Works completed are compliant with the relevant standards and laws”. In relation to the second limitation in Section 4 of the Completion Statement, the defendants did not contend that the Building Code of Australia was not a relevant standard. In any event, confirmation of certification by others does not amount to certification by Mr Halstead applying his own professional judgment as required on my construction of the Deed.

45. For those reasons, the Completion Statement does not constitute a “Certification” within the meaning of the Deed, the defendants have not completed the “Works” they are required to carry out under clause 3.1 of the Deed (which are defined as including “Certification”), and the issue of the Completion Statement did not enliven clause 3.9 of the Deed. In those circumstances, clause 3.10 expressly preserves the plaintiff’s right to continue these proceedings. If and to the extent that the allegedly defective works identified in paragraph 22A of the Further Amended Statement of Claim constitute material breaches of the Deed, then clause 4.2 operates harmoniously with clause 3.10 to reserve the plaintiff’s right to continue the proceedings in respect of those work items, subject to clause 4.1. However, the evidence adduced at the hearing of the separate question does not permit me to form a view about whether those are material breaches or whether the plaintiff has complied with clause 4.1 in relation to any or all alleged material breaches. By reason of clause 6.2 of the Deed, clause 6.1 does not operate to bar the plaintiff from framing its claim as a claim for relief in respect of the defendants’ breaches of clause 3.1 of the Deed in failing to carry out the “Works” required by the Deed (including “Certification”).

46. My reasons above should not be understood as accepting the plaintiff’s submission that clause 3.1 of the Deed imposes two separate obligations on the defendants. [6] On the contrary, clause 3.1 imposes a single obligation on the defendants to “carry out the Works at its cost”. By reason of the definition of “Works” in clause 1.1, that obligation incorporates the dual elements of completing the works identified in the Final Rectification Scope and obtaining the “Certification” from Mr Halstead. I reject the plaintiff’s submission that it is no part of Mr Halstead’s role to certify that those works have been completed. The subject matter of the “Certification”, as defined in the Deed, is “the Works completed”. Ascertaining that each work item has been completed is therefore the first step in the process that Mr Halstead is required to undertake in order to certify (or decline to certify, as the case may be) that the work item is compliant with relevant standards and laws. It is therefore necessarily implied in any “Certification” within the meaning of the Deed that Mr Halstead, applying his own professional judgment, has satisfied himself that the works certified as compliant with relevant standards and laws have in fact been completed. In this way, “Certification” within the meaning of the Deed will evidence the defendants’ compliance with the whole of its obligation under clause 3.1 of the Deed in respect of those work items within the scope of the certification and will enliven the plaintiff’s obligation under clause 3.9 to file a notice of discontinuance of these proceedings, subject to clause 3.10. The defendants’ performance of the whole of that obligation under clause 3.1 will enliven the release in clause 5 of the Deed.

    6. See [31]-[35] above.

47. Contrary to the plaintiff’s submissions, the provisions of clause 4 of the Deed do not support a different interpretation. Clause 4 applies to all material breaches of the Deed, including, for example, any breach by the defendants of their obligation under clause 3.4 to obtain Home Warranty Insurance. To the extent that a material breach arises from a failure to complete all or any part of the “the Works” (including “Certification”), clause 4.2 operates harmoniously with clause 3.10, as I have explained above.

48. As I have said, the parties have chosen “Certification” as the means for determining whether the work items in the Final Rectification Scope have been completed and are compliant with relevant standards and laws. Contrary to the plaintiff’s submissions, clause 4.2 of the Deed does not entitle the plaintiff to continue these proceedings or to sue the defendants for breach of the Deed in respect of any alleged failure to complete work items in the Final Rectification Scope that are the subject of a “Certification” within the meaning of the Deed. However, as I have explained above, a statement or certificate that does not record Mr Halstead’s determination that the items of work in the Final Rectification Scope have been completed and are compliant with relevant standards and laws is not a “Certification” within the meaning of the Deed. Mr Halstead does not perform the task conferred on him by the Deed by issuing a statement or certificate that merely confirms a determination about those matters made by RPF Building, or by third parties. [7]

    7. Australian Vintage Ltd v Belvino Investments No. 2 Pty Ltd (2015) 90 NSWLR 367; [2015] NSWCA 275 at [74]-[91] (Bathurst CJ, with the concurrence of Beazley P, as Her Excellency then was, and McColl JA).

49. For all of those reasons, the question ordered to be determined separately on 7 March 2025 must be answered in the negative. There is no reason why costs should not follow the event.

50. The orders of the Court are as follows:

1. Order that the question specified in order 2 made on 7 March 2025 be answered as follows: No.

2. Order that the defendants are to pay the plaintiff’s costs of and incidental to the determination of the question specified in order 2 made on 7 March 2025 on the ordinary basis, as agreed or assessed.

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Endnotes

Decision last updated: 04 April 2025