V601 Developments Pty Ltd v Probuild Constructions (Aust) Pty Ltd

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

Not Restricted

S ECI 2016 0024

V601 DEVELOPMENTS PTY LTD (ACN 082 670 595)	Plaintiff
v
PROBUILD CONSTRUCTIONS (AUST) PTY LTD (ACN 095 250 945)	Defendant

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JUDGE:	DIGBY J
WHERE HELD:	Melbourne
DATE OF HEARING:	11–14, 19–21 and 25–28 February, 4–6 and 12 March and 13–14 June 2019
DATE OF JUDGMENT:	22 December 2021
CASE MAY BE CITED AS:	V601 v Probuild
MEDIUM NEUTRAL CITATION:	[2021] VSC 849

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BUILDING CONTRACT – Building and engineering project – Claims for extensions of time in relation to project delays – Whether Project Manager lacked independence – Practical completion – Extension of time claims – Separable portions of the Work under the Contract – Applicable approach to delay analysis – Applicability of prevention principle – Contractor’s delay damages – Separate Portions – Apportionment of delay damages – Entitlement to bonus – Proprietor’s claim for Certified Liquidated Damages – Claim for variations.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr E N Magee QC with Mr P T Baker and Ms J L Dodd	Baker McKenzie
For the Defendant	Mr N Hopkins QC with Mr B Mason	Maddocks

TABLE OF CONTENTS

The Proceeding................................................................................................................................... 1

The Contract........................................................................................................................................ 1

The Precinct Project........................................................................................................................... 1

General background to the Proceeding......................................................................................... 3

Key terms of the Contract................................................................................................................. 4

Other relevant terms of the Contract.............................................................................................. 5

The Early Works and Design and Construction Contract...................................................... 5
Early Works – Precinct Apartments.................................................................................. 5
The Design and Construction Contract – Precinct Apartments................................... 5

Separable portions of the works............................................................................................... 18

The Principal Issues in the Proceeding....................................................................................... 19

Probuild’s primary case............................................................................................................. 19
V601’s primary case.................................................................................................................... 19
V601’s claim of liquidated damages......................................................................................... 22

Materials relied upon...................................................................................................................... 25

V601 materials............................................................................................................................. 25
Probuild materials....................................................................................................................... 28

Summary of evidence...................................................................................................................... 31

V601..................................................................................................................................................... 31

James Maitland............................................................................................................................ 31
Maitland First Witness Statement (29 August 2016).................................................... 31
Maitland Second Witness Statement (3 February 2019).............................................. 32

John Nave..................................................................................................................................... 36
Stephen Abbott............................................................................................................................ 45
Abbott First Report (12 September 2018)....................................................................... 47
Abbott Second Report (17 October 2018)....................................................................... 47
Programming Experts’ Joint Report 1............................................................................ 47
Programming Experts’ Joint Reports 2 and 3................................................................ 47

Neil Birchall................................................................................................................................. 48
Birchall First Report (21 September 2018)...................................................................... 48
Birchall Second Report (5 October 2018)........................................................................ 49
Birchall Third Addendum Report (17 October 2018)................................................... 49
Quantum Experts’ Joint Reports 1 and 2........................................................................ 49

Probuild............................................................................................................................................. 49

Matthew Bready.......................................................................................................................... 49
Bready Witness Statements.............................................................................................. 50

Giuseppe (Joe) Cirianni.............................................................................................................. 52
Cirianni Witness Statement (23 February 2018)............................................................ 53

Rebeca Lunardello...................................................................................................................... 53
Lunardello Witness Statements (23 February 2018 and 16 October 2018)................ 53

James Lyall................................................................................................................................... 54
Lyall First Report (12 April 2018).................................................................................... 54
Lyall Second Report (4 May 2018)................................................................................... 58
Programming Experts’ Joint Reports 2 and 3................................................................ 59

Peter Picking................................................................................................................................ 59
Picking First Report (16 October 2018)........................................................................... 60
Picking Second Report (20 December 2018).................................................................. 61
Programming Experts’ Joint Report 1............................................................................ 61

Mike Cox...................................................................................................................................... 61
Cox First Report (8 June 2018)......................................................................................... 62
Cox Second Report (26 October 2018)............................................................................ 63
Cox Third Report (20 December 2018)........................................................................... 64
Quantum Experts’ Joint Reports 1 and 2........................................................................ 64

The…

CaseChat Overview and Summary

The case of V601 Developments Pty Ltd v Probuild Constructions (Aust) Pty Ltd involved a dispute between the parties concerning a building and engineering project. V601 Developments, the principal, sought to recover from Probuild Constructions, the contractor, the costs associated with project delays, extensions of time, and certified liquidated damages, among other claims. The dispute was heard in the Supreme Court of New South Wales.

The central legal issues before the court revolved around the validity and impact of the Project Manager's decisions, particularly whether the Project Manager was independent and impartial. The court was required to determine the appropriate approach to delay analysis under the contract, the applicability of the prevention principle, and the apportionment of delay damages. Additionally, the court needed to address the entitlement to a bonus, the principal’s claim for certified liquidated damages, and the claims for variations.

The court ruled that the Project Manager did not lack the requisite independence, thus their decisions were valid. The court held that the separable portions of the work under the contract needed to be considered when analysing delays. It further determined that the prevention principle applied, allowing the contractor to avoid some responsibility for delays caused by the principal's actions. Regarding delay damages, the court decided that the damages should be apportioned between the parties based on their respective contributions to the delays. The principal was found not entitled to the bonus, and the claim for certified liquidated damages was assessed based on the correct application of the contract terms. Finally, the claims for variations were considered within the scope of the contract’s variation provisions.

The court’s decision resulted in a partial victory for both parties, with each bearing a proportion of the delay costs and damages. The court ordered Probuild to pay certain certified liquidated damages and specific costs associated with the project delays, while V601 was not entitled to the full bonus and had to bear part of the delay damages. The case highlights the importance of clear contractual provisions and the need for independence in project management roles.

Continue reading V601 Developments Pty Ltd v Probuild Constructions (Aust) Pt...

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established