V601 Developments Pty Ltd v Probuild Constructions (Aust) Pty Ltd
[2021] VSC 849
•22 December 2021
| 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 Joint Expert Reports (Programming).................................................................................... 64
The Joint Expert Reports (Quantum)........................................................................................... 64
General disputes.............................................................................................................................. 65
The Project Manager’s role and the question of independence............................................. 65
V601’s submissions in relation to the Project Manager’s role.............................................. 67
V601’s submissions on Probuild’s entitlement to extensions of time................................. 69
Probuild’s submissions on the Project Manager’s lack of independence........................... 73
Probuild’s submissions in relation to cls 20.1 and 20.2 of the Contract.............................. 74
The Project Manager’s relevant duties and obligations............................................... 74
Considerations/conclusions regarding the Project Manager................................................... 77
General observations – role of the superintendent................................................................ 77
Considerations in relation to the requirements and scope of the Project Manager’s duties and obligations of independence under the Contract......................................................... 86
Proper construction of cl 20.2 of the Contract............................................................... 86
Clauses 20.2 and 34.5(b).................................................................................................... 89
Probuild’s alleged failure to provide Contractor’s Programs.............................................. 92
Project Manager and the Right to Consult.............................................................................. 93
Probuild’s detailed case impugning the independence of the Project Manager............... 96
Summary of conclusions.......................................................................................................... 124
Further relevant concerns and criticisms of the Project Manager..................................... 137
General conclusion as to difficulties created by V601 for Probuild................................... 139
Programming Expert Evidence.................................................................................................... 140
V601’s criticisms of Lyall – objections to Probuild’s delay-related expert evidence....... 141
Considerations/conclusions – Lyall’s expert evidence....................................................... 146
Lyall’s expert evidence is admissible and persuasive................................................ 146
Rejection of V601’s criticisms of Lyall.......................................................................... 148
Failure by Probuild to submit Contractor’s Programs........................................................ 150
Election.............................................................................................................................. 151
Prevention Principle........................................................................................................ 152
Lyall’s treatment of inclement weather........................................................................ 153
Probuild’s submissions in relation to the admissibility and weight of Abbott’s expert evidence............................................................................................................................................ 153
Probuild’s criticisms of V601’s programming evidence provided by Abbott........ 153
Abbott strayed from his discipline as a programming expert and criticised Probuild 154
Considerations/conclusions – Abbott’s expert evidence.................................................... 155
Abbott’s criticism of Lyall relying upon programs other than the Approved Contractor’s Programs............................................................................................................... 158
Abbott’s approach – theoretical analysis..................................................................... 159
Abbott purported to opine on matters not within his expertise............................... 161
Provisional period of delay.......................................................................................................... 162
Global Claim by Probuild............................................................................................................ 163
Contractually appropriate treatment of inclement weather.................................................. 167
Concurrent causes of delay – other than inclement weather................................................. 168
Delay analysis................................................................................................................................. 168
Programming experts’ opinions in relation to prospective and retrospective delay analysis 168
Methods used by programming experts...................................................................... 169
A........ Abbott’s observations, propositions and opinions......................................... 171
B......... Lyall’s observations, propositions and opinions............................................ 174
Clause 34.3(a) requirements for assessment of a relevant delay to Probuild’s WUC..... 180
Relevant contractual provisions.................................................................................... 181
Time extension claims under the Contract..................................................... 181
Probuild’s position as to the required contractual analysis of delay for the purposes of cl 34.3(a).................................................................................................................... 182
Relevant pleadings............................................................................................. 182
Probuild submissions on admissibility of Lyall’s evidence......................... 185
Considerations/conclusions – objections to Lyall’s evidence.................................. 186
Interpreting cl 34.3(a) to determine how delay analysis is assessed................................. 188
V601’s contentions as to the method of delay analysis and cl 34............................. 188
Considerations/conclusions – cl 34 of the Contract – prospective/retrospective analysis 197
620 Collins Street (No 1)............................................................................................................. 204
CMA Assets (No 6)..................................................................................................................... 208
Considerations/conclusions – Abbott’s prospective delay analysis.................................... 213
Conclusions – cl 34......................................................................................................................... 214
EOT Claims..................................................................................................................................... 215
Probuild’s extension of time (EOT) claims............................................................................ 215
Summary of Probuild’s EOT claims....................................................................................... 217
EOT1 (delayed completion of Early Works)............................................................................. 219
Early Works Claim under cl 9A of the Contract................................................................... 219
Clause 9A extension of time........................................................................................... 219
Background...................................................................................................................... 219
Probuild’s claim in relation to cl 9A....................................................................................... 222
V601’s position in relation to Probuild’s cl 9A entitlements.............................................. 224
V601’s contentions in relation to when Early Works Completion was achieved............ 226
Access ramp removal............................................................................................................... 234
Installation of high voltage conduit.............................................................................. 235
The asserted common assumption/estoppel in relation to the Early Works.................. 235
Probuild’s responses and answer to V601’s contractual and estoppel case in relation to the Early Works claim...................................................................................................................... 236
Considerations/conclusions......................................................................................................... 237
Scope of Early Works – relocating Grosvenor Street powerlines and poles...................... 241
Considerations/conclusions......................................................................................................... 241
High Voltage Conduit.............................................................................................................. 245
Access ramp............................................................................................................................... 245
V601’s miscellaneous additional defences................................................................................ 245
Decision (EOT1)............................................................................................................................. 249
EOT2A (Soft Spots)........................................................................................................................ 250
Background – piles for foundations....................................................................................... 250
Lift core....................................................................................................................................... 251
Chronology of significant events............................................................................................ 252
V601’s overall and ultimate position...................................................................................... 258
Probuild’s submissions................................................................................................... 258
V601’s identification of the remaining EOT2A issues................................................ 260
Considerations/conclusions (EOT2A)........................................................................................ 261
V601 – contractual bars............................................................................................................ 264
The Clause 41 Argument.............................................................................................................. 264
Provisional delay period............................................................................................................... 266
Decision (EOT2A).......................................................................................................................... 269
Delay Damages (EOT2A).............................................................................................................. 269
EOT3 (Hydrocarbon Contamination)......................................................................................... 270
Background................................................................................................................................ 270
Probuild’s case – EOT3............................................................................................................. 271
Probuild’s chronology of relevant events (EOT3)...................................................... 271
Qualifying Cause of Delay............................................................................................. 276
Quantum........................................................................................................................... 277
Duration of delay............................................................................................................. 278
Probuild’s notification of EOT3..................................................................................... 280
SP1 side agreement.......................................................................................................... 281
Conclusion/Decision (EOT3)....................................................................................................... 281
Float.................................................................................................................................................. 286
Probuild’s submissions............................................................................................................ 286
Decision (EOT3)............................................................................................................................. 287
EOT6 (Childcare Centre Variation): V601’s application to amend its Amended Reply and Defence to Counterclaim (relevant to V601’s defence of EOT3)..................................................... 288
Introduction............................................................................................................................... 288
Proposed amendments............................................................................................................. 288
V601’s submissions (for leave in relation to the proposed amendments)........................ 289
V601’s defences to Probuild’s EOT6 claim............................................................................ 289
Timing......................................................................................................................................... 290
Probuild’s submissions............................................................................................................ 291
Decision – V601’s application to amend.................................................................................... 293
EOT6 (Childcare Centre Variation)............................................................................................ 295
Background................................................................................................................................ 296
V601’s submissions................................................................................................................... 297
Amendment-related issue........................................................................................................ 298
Effect of delay............................................................................................................................ 300
Post-tensioning works – linking GF10 and GF15 slabs....................................................... 302
Conclusion/Decision (EOT6).................................................................................................. 306
Delay Damages.......................................................................................................................... 306
SP2 Side Agreement...................................................................................................................... 306
EOT7 (Window Glazing).............................................................................................................. 306
Background................................................................................................................................ 307
Probuild’s submissions............................................................................................................ 311
V601’s defences to Probuild’s EOT7 claim............................................................................ 312
Considerations................................................................................................................................ 316
Chronology................................................................................................................................ 316
EOT7 – extent of delay............................................................................................................. 325
Clause 34 notice......................................................................................................................... 331
Clause 41 notice......................................................................................................................... 333
SP1 – Side Agreement............................................................................................................... 333
Conclusion/Decision (EOT7)....................................................................................................... 333
Dates of Practical Completion..................................................................................................... 334
Probuild’s submissions............................................................................................................ 334
V601’s submissions................................................................................................................... 337
Considerations/conclusions (dates of practical completion)................................................. 338
Delay Damages............................................................................................................................... 345
Considerations/conclusions (delay damages) – and acceleration costs, façade variation costs, and delay damages.................................................................................................................. 345
Relevant contractual provisions.............................................................................................. 345
Probuild’s claim......................................................................................................................... 347
Probuild’s arguments against apportionment...................................................................... 348
V601’s argument for apportionment of any delay damages.............................................. 349
Assessment....................................................................................................................... 351
Allowable costs................................................................................................................ 352
Miscellaneous quantum issues: Crane costs................................................................ 354
Probuild’s reply closing submissions..................................................................................... 354
Apportionment................................................................................................................ 354
Probuild’s quantum evidence........................................................................................ 356
Expert evidence on delay damages............................................................................................. 357
Expert reports of Mike Cox...................................................................................................... 357
Delay periods................................................................................................................... 357
Cox Second Report – evidence in relation to apportionment.................................. 358
Cox’s apportionment methodology.............................................................................. 362
Cox Third Report – Responses to the SJA Reports..................................................... 364
Conclusions in relation to Cox’s evidence............................................................................. 365
Expert reports of Neil Birchall................................................................................................. 365
Delay damages — Birchall Reports.............................................................................. 365
Birchall First Report........................................................................................................ 365
Acceleration costs............................................................................................... 367
Façade return wall variation............................................................................. 368
Birchall Second Report.................................................................................................... 368
Birchall Third Report (Addendum dated 17 October 2018 to Birchall Second Report) 371
Considerations/conclusions – Apportionment of delay damages........................................ 372
Birchall’s evidence – less persuasive...................................................................................... 375
Delay costs do not need to be confined to costs incurred after date for Practical Completion 376
Cox and Birchall’s experience...................................................................................................... 377
General labour costs................................................................................................................. 380
Supervision costs....................................................................................................................... 380
Supervision on-costs................................................................................................................. 382
Costs of crane crews and alimaks........................................................................................... 382
SP1 and SP2 Side Agreements....................................................................................... 384
Clause 34.9 and clause 41.1 notices............................................................................................. 384
Balance of preliminaries........................................................................................................... 385
Conclusion/Decision (delay damages)....................................................................................... 386
Delay damage amounts............................................................................................................ 386
Acceleration claim.......................................................................................................................... 387
Written submissions on acceleration costs............................................................................... 387
Probuild’s acceleration claim.................................................................................................. 387
V601’s submissions................................................................................................................... 388
Probuild’s reply submissions.................................................................................................. 390
Probuild’s closing oral submissions....................................................................................... 391
Considerations/conclusions......................................................................................................... 393
Probuild’s claim that its acceleration entitlements arose from a direction of the Project Manager............................................................................................................................................ 393
Whether acceleration measures may be regarded as loss and damage arising from a Certifier failing to award a Contractor its proper time-extension entitlements..................... 394
Perini Corporation v Commonwealth of Australia (Perini)...................................... 394
Amec Process & Energy Ltd v Stork Engineers & Contractors BV (Amec)............ 398
Multiplex Constructions Pty Ltd v Abigroup Contractors Pty Ltd (Multiplex).... 400
Whether acceleration measures may be recognised as a form of mitigation................... 403
Great Eastern Hotel Co Ltd v John Laing Construction Ltd (GEH v Laing).......... 404
BG Checo International Limited v British Columbia Hydro and Power Authority (BG Checo)................................................................................................................................ 405
Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (Unity Insurance)...... 406
Conclusions..................................................................................................................................... 412
Façade Variation Claim................................................................................................................. 419
Probuild’s submissions............................................................................................................ 420
V601’s submissions................................................................................................................... 422
Contractual provisions.................................................................................................... 422
Prospective consideration.............................................................................................. 423
Independence................................................................................................................... 423
Entitlement to Variation Price....................................................................................... 424
Probuild’s reply submissions.................................................................................................. 425
Considerations................................................................................................................................ 426
Outline of key facts....................................................................................................................... 426
Probuild’s valuation of the precast variation........................................................................ 433
Key findings and conclusions..................................................................................................... 435
Interpretation of the Contract.................................................................................................. 435
Independence of the Project Manager.......................................................................... 435
Clause 34 (EOT claims)................................................................................................... 439
Relevant Approved Contractor’s Program..................................................... 439
Programming evidence – delay analysis...................................................................... 440
Probuild’s early works claims..................................................................................................... 441
Probuild’s EOT2A claim............................................................................................................... 441
Achievement of Practical Completion....................................................................................... 445
Façade variation claim................................................................................................................... 446
Bonus payment............................................................................................................................... 446
Acceleration costs........................................................................................................................... 447
V601’s claims................................................................................................................................... 450
Orders............................................................................................................................................... 450
Delay Damages............................................................................................................................... 451
Acceleration costs............................................................................................................ 451
Façade variation claim.................................................................................................... 452
Bonus payment................................................................................................................ 452
HIS HONOUR:
The Proceeding
In this proceeding, the plaintiff, V601 Developments Pty Ltd (V601), is the Principal and special purpose vehicle of the plaintiff for the development and construction of a project known as The Precinct and associated works at 601 Victoria Street, Abbotsford, Victoria (the Precinct Project). The defendant, Probuild Constructions (Aust) Pty Ltd (Probuild), is the Contractor engaged to construct that project for the plaintiff.
The Contract
On or about 23 May 2011, V601 and Probuild entered into a Contract for the design and construction of the Precinct apartments development at 601 Victoria Street, Abbotsford in the State of Victoria (the Site) for the lump sum price of $115,864,529 (the Contract).[1]
[1]FCB0053–0606.
The Contract is generally in the form of the Australian Standard Contract (AS4902–2000) with the usual Annexures, as specifically amended for the Precinct Project. This includes the Contract Program at Annexure 5A.[2]
[2]FCB0285–0289.
The Precinct Project
The Precinct Project is a mixed-use development of both commercial and residential premises at 601 Victoria Street, Abbotsford, Victoria.
The Precinct Project comprised five separate buildings, a swimming pool, a road extension, significant landscaping works, and comprised 467 apartments. The five buildings are:
(a) Building A, a three-storey building comprising ground-floor retail premises and a residential space consisting of 21 apartments;
(b) Building B, a residential building including 181 apartments and car parking;
(c) Building C, a five-storey residential and commercial building including 34 apartments;
(d) Building D, a four-storey residential building with 41 apartments with associated car parking; and
(e) Building E, an eight-storey residential building with associated car parking.
The Site occupies 2.5 acres in size. It is surrounded by adjoining properties to the north, Victoria Street to the south, Flockhart Street to the east, and Grosvenor Street to the west. The extension of Shamrock Street (which was part of the WUC) ran across the middle of the Site, dividing the Site into two areas.
Under the WUC, Probuild was responsible for tasks related to the design and specification of the WUC. This scope of work included the preparation of design documents and, if required by the Proprietor’s project requirements, a preliminary design. Thereafter, Probuild was responsible for constructing the Work in accordance with this design.
Under the Contract, the WUC was to be completed:
(a) for a fixed-sum Contract Price, subject to certain contractual adjustments;
(b) in eight Separate Portions, each with its own contractually specified completion date; and
(c) in accordance with the Planning Permit and Preliminary Design included in the Contract.
The Precinct Project’s eight (8) Separable Portions are as follows:
(a) SP 1 – Building A1: Retail building and associated car parking;
(b) SP 2 – Building C1: Commercial component of Building C;
(c) SP 3 – Building D: Residential building and associated car parking;
(d) SP 4 – Building E: Residential building and associated car parking;
(e) SP 5 – Building C2: Residential component of Building C and associated car parking;
(f) SP 6 – Building B: Residential building and associated car parking;
(g) SP 6A – Building A2: Residential component of Building A and associated car parking; and
(h) SP 7 – Practical Completion: Practical Completion of the Project.
The Precinct Project works were generally described as the Works Under Contract (WUC) in the Contract.
The main works for the Precinct Project, defined as the WUC, were preceded by certain works (the Early Works) required to prepare and construct the elements necessary for the WUC, to the point at which Probuild’s main works under the Design and Construction Contract could be commenced in full.
The Early Works were to be carried out by Probuild pursuant to the Precinct Apartments – Early Works Agreement entered into on 20 April 2011 (the Early Works Contract).[3]
[3]FCB0001–0052.
General background to the Proceeding
V601 commenced these proceedings seeking recovery of liquidated damages entitlements under the Contract, relying on certificates issued by the Project Manager, First Urban Pty Ltd (First Urban), which purported to certify that liquidated damages were due and payable by Probuild to V601 for each day after the agreed Dates for Practical Completion, until the actual Dates of Practical Completion, for each of the Separable Portions of the WUC.
In response to V601’s claim for liquidated damages, Probuild filed counterclaims alleging that First Urban failed to allow Probuild’s claims entitlement to extensions of time under the Contract, which Probuild asserts were sufficient to extinguish V601’s liquidated damages entitlement.
By its counterclaim, Probuild also claims delay damages under the Contract, bonus payments, and the cost of accelerating work, due to breaches of Contract alleged to have been committed by V601. Probuild additionally makes a claim for an unpaid variation in relation to the façade of the Project.
First Urban was appointed by V601 as the Project Manager under the Contract. The Project Management Agreement was between V601 and First Urban. Mr John Nave (Nave), a Director and Principal of First Urban, undertook the role of Project Manager under the Contract.[4]
[4]FCB0762–0812.
Key terms of the Contract
The Instrument of Agreement attached to the Contract, which was also signed on 23 May 2011, contained the following terms:
9.The Contract comprises the following documents, to which the following order of precedence applies to the interpretation of any discrepancies:
(a)Instrument of Agreement;
(b)General Conditions of Contract and Annexure Part A;
(c)Appendix 1 (Contract Sum and Provisional Sums);
(d)Appendix 2 (Principal’s Project Requirements);
(e)Appendix 3 (Specifications);
(f)Appendix 4 (Preliminary Design);
(g)Appendix 5B (Site Plan);
(h)Annexure Part C (Subcontractor Deed of Novation);
(i)Appendix 6 (Sales Contract);
(j)Appendix 7 (Pro Forma Statutory Declaration);
(k)Annexure Part D (Consultant’s Deed of Novation);
(l)Appendix 8 (Contractor’s Management Plans);
(m)Appendix 9 (Warranty Items and Warranty Periods);
(n)Appendix 10 (Form of Subcontractor Warranty);
(o)Appendix 11 (DBC Act);
(p)Appendix 12 (Notice explaining the Effects of Cost Escalation clauses);
(q)Appendix 13 (Schedule of Rates);
(r)Annexure Part B (Approved form of Unconditional Undertaking); and
(s)Annexure Part E (Deletions, Additions and Amendments).
10.Notwithstanding cl 9 above, the parties agree that in the event of a discrepancy between the Schedule of Clarifications and the Contract Documents, the Schedule of Clarifications shall prevail over all other Contract Documents.
Other relevant terms of the Contract
The contractual provisions of particular relevance to the claims and defences in this proceeding include the following:
The Early Works and Design and Construction Contract
Early Works – Precinct Apartments
Part B of the Precinct Apartment – Early Works Contract[5] provides:
General Description – the works that Probuild will be managing on behalf of the Principal
The management of any and all works associated with the Early Works (EW) of the project that are required to prepare and construct the necessary elements up to the point at which Probuild’s main Works Under the Contract (WUC) can be commenced in full. These works may include, but are not limited to trade specific works, design consultancy works, Authority works and preliminaries activities. The WUC for any separable portion commences after the completion of the site clearance, site preparation, basement retention system, bulk excavation to within +/- 25mm from underside of the lowest basement slab on ground and the retention works structure up to and including capping beam. The EW will therefore include these activities, and in addition will include the management of any uncompleted works remaining from the Principal’s prior works.
[5]FCB0001–0052.
The Design and Construction Contract – Precinct Apartments
The Design and Construction Contract[6] definitions provide:
[6]FCB0053–0606.
1. Interpretation and construction of Contract
In the Contract, except where the context otherwise requires:[7]
[7]Selected definitions only.
‘Contract Document’ means those documents listed in paragraph 9 of the instrument of agreement;
‘Contractor’s Program’ means the document set out in Appendix 5A or such replacement document referred to in clause 32;
‘Date for Practical Completion’ means:
(a)where Item 7(a) provides a date for Practical Completion, the date;
(b)where Item 7(b) provides a period of time for Practical Completion, the last day of the period,
but if any EOT for Practical Completion is directed by the Project Manager or allowed in any dispute resolution process adapted by the parties pursuant to clause 42 or litigation, it means the date resulting therefrom;
‘Date of Practical Completion’ means:
(a)the date evidenced in a Certificate of Practical Completion as the date upon which Practical Completion was reached; or
(b)where another date is determined in any dispute resolution process adapted by the parties pursuant to clause 42 or litigation as the date upon which Practical Completion was reached, that other date;
‘Early Works’ means the early works carried out on behalf of the Principal, in respect of which the Contractor has separately been appointed as a construction manager, including demolition, excavation, piling and other associated early works;
‘Practical Completion’ is that stage in the carrying out and completion of WUC when:
(a)the Works are complete except for minor Defects:
(i)which have been listed by the Contractor and approved by the Project Manager as not required to be rectified at Practical Completion;
(ii)which, in the Project Manager’s opinion, do not prevent the Works from being reasonably capable of being used for their intended purpose;
(iii)which the Project Manager determines the Contractor has reasonable grounds for not promptly rectifying; and
(iv)the rectification of which will not prejudice the convenient use and/or lawful occupation of the Works;
(b)those Tests which are required by the Contract to be carried out and passed before the Works reach Practical Completion, have been carried out and passed;
(c)all docmnents [sic] and other information required under the Contract which, in the Project Manager’s opinion, are reasonably required for the use, operation and maintenance of the Works have been supplied in draft (which documents shall be finalised within 28 days after the Date of Practical Completion);
(d)certificates have been provided from each Key Consultant engaged in respect of the WUC confirming that the part of the Works the subject of that Key Consultant’s design has been carried out in accordance with the Contract and the Endorsed Design Documents;
(e)all relevant approvals, including but not limited to those required under the Building Act, which are to enable use of the whole of the Works (including the original certificate of occupancy (or occupancy permit) issued by a licensed building surveyor and any other certificate, approval or authorisation which must be issued or given by an Authority to lawfully occupy or use the Works), have been obtained by the Contractor and given to the Project Manager;
(f)the Contractor has supplied the Project Manager the following:
(i)a certificate by a licensed surveyor identifying the Works and confirming that there are no encroachments by the Works upon adjoining lands;
(ii)a certificate from an independent consultant confinning [sic] that the fire services function under normal and simulated emergency operating conditions and in accordance with the Contract;
(iii)a copy of all fire rating certificates required under the Contract in respect of materials forming part of the Works;
(iv)a compliance certificate as required under section 221ZH of the Building Act;
(g)all plant and equipment forming part of the Works has been installed, commissioned and tested and function under normal and simulated emergency operating conditions and in accordance with the Contract;
(h)all rubbish, surplus material, Temporary Works, plant, equipment and hoarding has been removed from the Site so as to leave the Site in a clean and tidy condition, except for those items which the Project Manager agrees in writing are required during the Defects Liability Period;
(i)without limiting paragraph (a) above, the following items forming part of the Works have been completed:
(i)all appliances and fittings have been installed and are fully operational;
(ii)all work on areas of common property;
(iii)all landscaping which the Project Manager reasonably determines should be finished;
(iv)any parts of the Works which the Contractor has used in the course of construction, including lifts and light globes, have been restored or replaced, as applicable; and
(v)the whole of the Works has been professionally cleaned;
‘Project Manager’ means the person stated in Item 5 as the Project Manager or other person from time to time appointed in writing by the Principal to be the Project Manager and notified as such in writing to the Contractor by the Principal and, so far as concerns the functions exercisable by a Project Manager’s Representative, includes a Project Manager’s Representative.
‘Qualifying Cause of Delay’ means:
(a)any act, default or omission of the Project Manager, the Principal or their consultants, agents;
(b)a Variation under clause 36, excluding a Variation under clause 36.5;
(c)any Melbourne Metropolitan state wide or nation wide industrial relations dispute except where such industrial relations dispute is solely and directly connected to the Contractor in undertaking its usual business, or is specific to the Site;
(d)a change in Legislative Requirement described in clause 11.2(a) (except those Legislative Requirements described in clause 11.2(a)(v));
(e)a Force Majeure Event;
(f)suspension of the Works pursuant to clause 33.l(a)(i) or 33.l(c);
(g)delay caused by a headworks contractor or any other separate contractors directly and exclusively controlled by the Principal or the Project Manager on behalf of the Principal (including Other Contractors);
(h)a Latent Condition;
(i)delay caused by municipal, public or statutory authorities not caused by the Contractor;
(j)testing, treatment and/or removal of Contaminated Soil by the Principal in accordance with clause 25.3; and
(k)delay caused by compliance with clauses 24.3;
‘Site’ means the lands and other places to be made available and any other lands and places made available to the Contractor by the Principal for the purpose of the Contract as described in Appendix 5B;
‘the Works’ means the whole of the WUC to be carried out and completed in accordance with the Contract, including Variations provided for by the Contract which by the Contract is to be handed over to the Principal;
‘WUC’ (from Work under the Contract) means the Work which the Contractor is or may be required to carry out and complete under the Contract and includes the Contractor’s Design Obligations, Variations, remedial Work, Construction Plant, Temporary Works and the Work the subject of the Schedule of Clarifications.
Clause 4 of the Contract provides:
4.Separable Portions
(a)Separable Portions may be directed by the Project Manager, at any time, who shall clearly identify for each, the:
(i)portion of the Works;
(ii)Date for Practical Completion; and
(iii)respective amounts for Security, liquidated damages and delay damages (all calculated pro-rata according to the ratio of the Project Manager’s valuation of the Separable Portion to the Contract Sum).
(b)The interpretations of:
(i)Date for Practical Completion;
(ii)Date of Practical Completion; and
(iii)Practical Completion,
and clauses 2, 14, 24, 27, 32, 34, 35, 36 and 46 shall apply to each Separable Portion and references within those clauses to the Works and to WUC shall mean so much of the Works and WUC as is comprised in the relevant Separable Portion.
Clause 9A (Construction Management of Early Works) of the Contract provides:
9AConstruction Management of Early Works
(a)The parties, acknowledge that the Contractor has separately been appointed by the Principal as construction manager in respect of the Early Works.
(b)Despite any other provision of this Contract the Contractor shall not commence the WUC until:
(i)the Early Works have achieved completion in accordance with the construction management agreement and respective trade contracts (‘Early Works Completion’);
(ii)the Early Works in respect of that part of the Site (or affecting access to that part of the Site) have achieved Early Works Completion;
(iii)any other commencement date (or staggered dates as the case may be) agreed in writing by the parties; or
(iv)a Direction to carry out a Variation is issued by the Principal in accordance with Clause 9A(d).
(c)Notwithstanding clause 34, the Dates for Practical Completion under the Contract shall be extended for each day after the 7th October 2011 that Early Works Completion has not been achieved.
(d)During the performance of the Early Works, the Project Manager may identify portions of the Site where it believes the WUC can commence and give the Contractor written notice of a proposed Variation in accordance with Clause 36.2. Subject to the Contractor’s response in accordance with Clause 36.2 the Principal may then issue a Direction to carry out a Variation to commence the WUC in accordance with Clause 36.1(b)(vi).
Clause 20 of the Contract provides:
20Project Manager
20.1Agent functions
(a)The Principal shall ensure that at all times there is a Project Manager.
(b)The Principal has appointed the Project Manager as its agent under the Contract in relation to the following functions and any other function which the Principal notifies the Contractor of in writing from time to time but in each case, in advance of the exercise of such function by the Project Manager:
(i)assessing the value of work;
(ii)certification of moneys due and owing as between the Contractor and Principal by way of the issue of a Payment Schedule under clause 37.2 or a Final Certificate under clause 37.4;
(iii)directing Variations under clause 36.1; and
(iv)any determination required as to the quality of any work.
(c)The Principal shall ensure that in the exercise of the Project Manager’s functions as the Principal’s agent under the Contract, the Project Manager:
(i)acts honestly; and
(ii)acts within the time prescribed under the Contract or where no time is prescribed, within a reasonable time,
but is not, as the Principal’s agent, required to act independently or impartially.
20.2Independent functions
(a)In addition to the Project Manager’s functions as the Principal’s agent as set out in clause 20.1, the Project Manager shall also act as assessor and certifier in respect of:
(i)whether the Contractor is entitled to an EOT;
(ii)whether the Contractor has achieved Practical Completion;
(iii)whether the Contractor is entitled to delay damages pursuant to clause 34.9; and
(iv)in the assessment of the price of a Variation in accordance with clause 36.4.
(b)In relation to the four functions described in clause 20.2(a):
(i)the Project Manager shall act independently of the parties and neither party shall be entitled to give Directions to the Project Manager;
(ii)the Project Manager is entitled to consult with either one of or both parties but is not obliged to consult with both parties; and
(iii)the Project Manager shall act reasonably in exercising the identified functions and shall have regard to the express requirements of the Contract and not the commercial interests of either party.
20.3Project Manager’s directions
(a)The Project Manager shall be entitled to give Directions to the Contractor from time to time with reference to the WUC and the Contract generally, and the Contractor shall comply with all such Directions.
(b)Except where the Contract otherwise provides, the Project Manager may give a Direction orally but shall as soon as practicable confirm it in writing. If the Contractor in writing requests the Project Manager to confirm an oral Direction, the Contractor shall not be bound to comply with the Direction until the Project Manager does so. The Contractor acknowledges and agrees that if it acts or relies upon any documentation without:
(i)promptly requesting the Project Manager to confirm the documentation as a Direction in writing; or
(ii)receiving the Project Manager’s Direction in writing confirming the documentation,
it does so at its own risk and cost.
(c)If a Direction under clause 20.3(a), conflicts with a Legislative Requirement the Contractor will inform the Project Manager, and to the extent of the conflict, the Contractor is not required to comply with the Direction.
Clause 21 of the Contract provides:
21Project Manager’s Representative
The Project Manager may from time to time appoint individuals to exercise delegated Project Manager’s functions, provided that:
(a)no aspect of any function shall at any one time be the subject of delegation to more than one Project Manager’s Representative;
(b)delegation shall not prevent the Project Manager exercising any function;
(c)the Project Manager forthwith gives the Contractor written notice of respectively:
(i)the appointment, including the Project Manager’s Representative’s name and delegated functions; and
(ii)the termination of each appointment.
(d)if the Contractor makes a reasonable objection to the appointment of a Project Manager’s Representative, the Project Manager shall terminate the appointment subject to first receiving the Principal’s consent to any such termination which shall not be reasonably withheld.
Clause 25 of the Contract provides:
25.3Contaminated Soil Risk
(a)Should the Contractor locate what it believes to be Contaminated Soil within the Site, it shall notify the Project Manager immediately. The Project Manager will arrange for testing of the soil to be performed to determine whether the soil is Contaminated Soil. The Project Manger shall arrange such testing with as little disruption to the Contractor’s program as possible and the costs of such testing shall be to the Principal’s account.
(b)The Contractor agrees to provide the Principal with whatever assistance is necessary to effect the testing of the soil. If compliance with the Contractor’s obligations under this clause 25.3(b) causes the Contractor to incur additional direct costs, such costs shall be assessed by the Project Manager and added to the Contract Sum. Should the relevant soil be confirmed to be Contaminated Soil, the Principal will be responsible for the classification, treatment, burial and/or removal of the Contaminated Soil. The Principal shall determine the appropriate method of dealing with the Contaminated Soil in its sole discretion, provided that such method complies with all relevant Legislative Requirements.
(c)The Contractor shall take all reasonable measures to resequence WUC whilst any potential Contaminated Soil is being tested and while any Contaminated Soil is being treated and/or removed by the Principal and shall not have any claim arising solely out of the need to resequence WUC. However, this clause 25.3(c) shall not limit the Contractor’s claim under clause 25.2 in respect of any delay, disruption, additional Work, cost or expense which cannot be avoided through such resequencing.
(d)If the Contractor is no longer required to remove parts of the soil from the Site because it is found to be Contaminated Soil in accordance with this clause 25.3, there will be a deemed Variation, priced by the Project Manager using the rates for removal of clean soil contained in the Schedule of Rates.
Clause 32.3 of the Contract provides:
32.3Initial program approval and program updates
(a)The initial Contractor’s Program is set out in Appendix 5A.
(b)The Project Manager may from time to time direct the Contractor to give to the Project Manager an updated Contractor’s Program for approval within the time and in the form directed by the Project Manager. Such an updated Contractor’s Program shall have regard to the progress of execution of WUC (including anticipated start and finish dates of activities and percentage completion of current activities) and take into account any Variations and any EOT actually granted.
( c)Any updated Contractor’s Program submitted for approval by the Project Manager shall also be accompanied by a separate written list of the Contractor’s Program amendments introduced by the updated Contractor’s Program for comparison purposes, and shall, include:
(i)activities introduced, activities deleted and activities rescheduled;
(ii)revised activity durations;
(iii)revisions to interconnecting logic between activities;
(iv)the reasons for the amendments; and
(v) a precise description of any alleged delay event including details as to when and how the alleged event is said to have occurred,
and thereafter may be approved by the Project Manager and become an Approved Contractor’s Program.
(d)The Project Manager may, in the event that the progress of the WUC falls behind that provided for in the Approved Contractor’s Program, direct the Contractor to provide an updated Contractor’s Program to show how the WUC will be carried out to recover lost time and achieve Practical Completion by the Date for Practical Completion.
(e)Any review, comment, approval or Direction by the Project Manager in relation to an updated Contractor’s Program or an accompanying list of amendments to the Contractor’s Program submitted by the Contractor shall not constitute any approval by the Project Manager of the WUC, the Contractor’s performance and execution of the WUC nor the occurrence of any Qualifying Cause of Delay.
(f)The initial Contractor’s Program and any Approved Contractor’s Program are not a Contract Document and do not form part of the Contract, but will be used by the Project Manager as a basis for administering the Contract (to the extent possible) and for assessing any EOT claims.
(g)The Contractor shall not, without reasonable cause, depart from the Approved Contractor’s Program.
(h)The provision of a Contractor’s Program, any updated Contractor’s Program and any review, comment, approval or Direction by the Project Manager under this clause 32.3 in relation to the same shall not relieve the Contractor from its obligation to complete the WUC by the date for Practical Completion and in accordance with this Contract. Without limiting the Contractor’s rights elsewhere in the Contract, the Contractor acknowledges and agrees that its submission of the initial Contractor’s Program and any amendments to the Approved Contractor’s Program in accordance with this clause 32, whether in response to a Direction or not, shall not, in itself, entitle the Contractor to:
(i)an EOT; or
(ii)any increase in the Contract Sum.
Clause 32.5 of the Contract provides:
32.5Acceleration
If the Project Manager gives a Direction to the Contractor under clause 32.4:
(a)the Contractor shall accelerate WUC to overcome or minimise the extent and effect of some or all of the delay as directed, including, if required, in order to achieve Practical Completion by the Date for Practical Completion;
(b)if the Contractor would, but for the Direction, have been entitled to an EOT, the Contractor shall be entitled to claim its reasonable and necessary additional direct costs and expenses directly arising directly as a result of accelerating WUC, valued by the Project Manager in accordance with clause 36.4; and
(c)the Contractor is not entitled to any other compensation or to make any claim for loss in respect of or arising out of the cause of the delay and the Direction to accelerate except as provided in clause 32.5(b).
Clauses 34 of the Contract provides:
34Time and progress
34.1Progress
The Contractor shall ensure that WUC reaches Practical Completion by the Date for Practical Completion.
34.2Notice of delay
A party becoming aware of anything which will probably cause delay to WUC shall promptly give the Project Manager and the other party written notice of that cause and the estimated delay.
34.3Claim
(a)Subject to clause 34.4, the Contractor shall be entitled to such EOT as the Project Manager assesses, if the Contractor is or will be delayed in reaching Practical Completion by a Qualifying Cause of Delay.
(b)As soon as the Contractor becomes aware or suspects that the progress of WUC will be delayed (and in any event within 5 Business Days after the occurrence of the event causing the delay), it shall notify the Project Manager in writing giving details of the relevant event and the anticipated extent of the delay.
(c)The Contractor shall take all reasonable measures to preclude the occurrence of the event causing the delay, and to minimise the resulting delay to WUC.
(d)If the cause of the delay is a Qualifying Cause of Delay and the Contractor wishes to claim an EOT then as soon as the Contractor can ascertain or estimate with reasonable accuracy, the extent of the delay, and in any case not later than 10 Business Days after the occurrence of the Qualifying Cause of Delay, the Contractor shall make a written claim to the Project Manager for an EOT, giving details of:
(i)the Qualifying Cause of Delay;
(ii)the nature and extent of the delay, or likely delay to WUC; and
(iii)the EOT claimed.
(e)The Contractor shall promptly provide any further information requested by the Project Manager in relation to a claim for an EOT.
34.4Assessment
(a)When both non-qualifying and Qualifying Causes of Delay overlap, the Project Manager shall apportion the resulting delay to WUC according to the respective causes’ contribution.
(b)The Contractor is not entitled to an EOT unless:
(i)it has made an EOT claim in accordance with the requirements of clause 34.3 (and in this regard time is of the essence);
(ii)the delay has affected an activity which is, in the reasonable opinion of the Project Manager, on the critical path of the Approved Contractor’s Program as it existed at the time of the occurrence of the Qualifying Cause of Delay; and
(iii)the Contractor has taken all reasonable measures to preclude the occurrence of the Qualifying Cause of Delay and to minimise the resulting delay including resequencing or reprogramming the performance of WUC where it is reasonably practicable to do so.
34.5Extension of time
(a)Within 10 Business Days after receiving the Contractor’s claim for an EOT, or if the Project Manager has requested further information from the Contractor in relation to an EOT claim, then after receipt of that further information, the Project Manager shall assess the EOT claim and notify the Contractor and the Principal in writing of the EOT (if any) granted so assessed.
(b)Notwithstanding that the Contractor is not entitled to or has not claimed an EOT, the Project Manager may, in the Project Manager’s sole and unfettered discretion, at any time and from time to time before issuing the Final Certificate direct an EOT. The Project Manager is not required to exercise its discretion under this clause 34.5(b) for the benefit of the Contractor.
(c)A delay or failure of the Project Manager or the Principal to grant an EOT within the period specified in clause 34.5(a), or at all, will not cause the Date for Practical Completion to be set at large.
34.6Practical Completion
(a)The Contractor shall give the Project Manager at least 10 Business Days written notice of the date upon which the Contractor anticipates that Practical Completion will be reached.
(b)When the Contractor is of the opinion that Practical Completion has been reached, the Contractor shall in writing request the Project Manager to issue a Certificate of Practical Completion. Within 10 Business Days after receiving the request, the Project Manager shall give the Contractor and the Principal either a Certificate of Practical Completion evidencing the Date of Practical Completion or written reasons for not doing so.
(c) If the Project Manager is of the opinion that Practical Completion has been reached, the Project Manager may issue a Certificate of Practical Completion even though no request has been made.
34.7Liquidated damages
(a)If WUC does not reach Practical Completion by the Date for Practical Completion, the Project Manager shall progressively certify, as due and payable to the Principal, liquidated damages in Item 29 for every day after the Date for Practical Completion to and including the earliest of the Date of Practical Completion or termination of the Contract or the Principal taking WUC out of the hands of the Contractor.
(b)If an EOT is directed after the Contractor has paid or the Principal has set off liquidated damages, the Principal shall forthwith repay to the Contractor such of those liquidated damages as represent the days the subject of the EOT.
(c)The payment or set off of liquidated damages under this clause 34.7 shall not relieve the Contractor from its obligations to reach Practical Completion or from any of its other obligations and liabilities under the Contract.
(d)The Contractor acknowledges and agrees that:
(i)the amount of liquidated damages specified in Item 29 is a genuine pre-estimate of the loss and damage that the Principal may suffer if Practical Completion is not reached by the Date for Practical Completion; and
(ii)it shall not raise any argument that the amount of liquidated damages in Item 29 is a penalty or otherwise unenforceable either by way of a claim or defence in relation to the Contractor’s obligation to pay, or the Principal’s right to set off, liquidated damages.
(e)The Principal’s entitlement to be paid liquidated damages under this clause shall be the Principal’s sole remedy arising out of or in connection with WUC not reaching Practical Completion by the Date for Practical Completion, whether under this Contract or otherwise.
34.8Bonus for early practical completion
If the Date of Practical Completion is earlier than the Date for Practical Completion the Project Manager shall certify as due and payable to the Contractor the bonus payment in Item 30.
34.9Delay damages
(a)For every Working Day the subject of an EOT for a cause described in paragraph (a), (b), (f), (g), (h), (i) or (j) of the definition of Qualifying Cause of Delay and for which the Contractor gives the Project Manager a claim for delay damages pursuant to clause 41.1, damages certified by the Project Manager under clause 41.3 shall be due and payable to the Contractor in the amount which the Project Manager certifies is the Contractor’s and any of its subcontractor’s, employees’ or agents’ reasonable and necessarily incurred direct on-site time-related costs including on-site preliminaries costs (but excluding all other overhead costs, any allowance for profit or loss of profit and all consequential losses), up to the maximum amount per Working Day stated in Item 31A which damages are capped in aggregate at the maximum amount recoverable by the Contractor for delay damages stated in Item 31B.
(b)The Contractor shall, at the request of the Project Manager, make access available to its primary records and books at any pre-arranged time for the audit and checking by the Project Manager of the Contractor’s costs in support of any claim by the Contractor for delay damages under this clause 34.9.
(c)The Contractor acknowledges and agrees that any entitlement of the Contractor under the Contract to delay damages in accordance with this clause 34.9 is the sole entitlement of the Contractor for any delay or disruption to the WUC and the Contractor shall have no entitlement to any other damages, costs or other compensation whatsoever from the Principal whether under the Contract, in tort (including negligence), equity, under statute or otherwise.
Clause 36.1(c) of the Contract provides:
36.1Directing Variations
…
(c)If the Contractor receives a Direction from the Project Manager which, although not stated to be a Direction to carry out a Variation, the Contractor considers it to be a Direction to carry out a Variation, the Contractor shall:
(i)immediately notify the Project Manager that it considers the Direction to be a Variation;
(ii)as soon as reasonably practicable but in any case not later than 10 Business Days after receipt of the Direction, provide the Project Manager with a detailed quotation for the proposed Variation supported by measurements or other evidence of cost; and
(iii)not commence or proceed with any works on Site in connection with the Direction until a further written Direction to do so is received from the Project Manager.
Clause 36.2 of the Contract states that the Project Manager may issue a written notice of a proposed Variation, in relation to which Probuild is required within the time specified (or otherwise within 10 Business Days) to provide the Project Manager with an estimate of the:
(i)effect on the Approved Contractor’s Program (including the Date for Practical Completion); and
(ii)cost (including all warranties and time-related costs, if any) of the proposed Variation.
Clause 36.4 sets out the process for pricing a Variation and specifically states that:
(i)the Contractor shall not carry out a Variation unless and until a price for the Variation has been agreed between the Project Manager and the Contractor, or determined by valuation …; and
(ii)if the Contractor carries out a Variation prior to the price being agreed or determined, the Contractor shall not be entitled to any additional payment, or any EOT, for carrying out that Variation.[8]
[8]V601 Closing Submissions, 12 June 2019, [341]–[343].
Clause 37.5 of the Contract provides:
37.5 Interest
Interest in Item 35 shall be due and payable after the date of default in payment.
Clause 41 provides:
41Notification of claims
41.1Communication of claims
(a)The Prescribed Notice is a written notice of the general basis and quantum of the claim which includes detailed particulars of all of the following:
(i)the breach, act, omission, Direction, approval or circumstances on which the claim is or will be based;
(ii)the provision of the Contract or other basis for the claim or proposed claim; and
(iii)the quantum or likely quantum of the claim.
(b)Except where another time is stipulated elsewhere in another clause in the Contract, the Contractor shall give to the Principal and to the Project Manager the Prescribed Notice or a notice of Dispute under subclause 42.1 within 20 Business Days of the event occurring on which a claim by the Contractor is based.
41.2Liability for failure to communicate
The Contractor shall not have any right to submit any claim, initiate any action or proceedings against the Principal, and shall release and discharge the Principal in respect of any matter, fact or thing whatsoever arising out of or in connection with or under the Contract or the WUC unless the Contractor has complied strictly with the time limits and requirements stipulated in clause 41.1 above.
41.3Project Manager’s decision
(a)If within 20 Business Days of giving the Prescribed Notice the party giving it does not notify the other party and the Project Manager of particulars of the claim, the Prescribed Notice shall be deemed to be the claim.
(b)Within 40 Business Days of receipt of the Prescribed Notice the Project Manager shall assess the claim and notify the parties in writing of the decision. Unless a party within a further 20 Business Days of such notification gives a notice of dispute under clause 42.1 which includes such decision, the Project Manager shall certify the amount of that assessment to be moneys then due and payable.
Clause 42.1 and 42.2 provides:
42Dispute resolution
42.1Notice of dispute
(a)If a difference or dispute (together called a ‘Dispute’) between the parties arises in connection with the subject matter of the Contract, including a Dispute concerning:
(i)a Project Manager’s Direction; or
(ii)a claim,
then either party shall, by hand or by registered post, give the other and the Project Manager a written notice of dispute adequately identifying and providing details of the Dispute.
(b)Notwithstanding the existence of a Dispute, the parties shall, subject to clauses 39 and 40 and clause 42.4, continue to perform the Contract.
42.2Conference
(a)Within 10 Business Days after receiving a notice of Dispute, the parties shall confer at least once to resolve the Dispute or to agree on methods of doing so. At every such conference each party shall be represented by a person having authority to agree to such resolution or methods. All aspects of every such conference except the fact of occurrence shall be privileged.
(b)If the Dispute has not been resolved within 20 Business Days of service of the notice of Dispute, then either party may institute court proceedings to resolve the Dispute.
Annexure Part ‘A’ of the Contract provides:
30 Bonus for practical completion (clause 34.8) Refer to Annexure Part A Separable Portions 31A Delay Damages Period of Project Maximum Amount
1. Period without cranes and hoists $31,985 per day
2. Period with cranes but without hoists $41,909 per day
3. Period with cranes and hoists $49,220 per day31B Cap on delay damages Maximum amount (in the aggregate) of delay damages recoverable by the Contractor is 17 weeks at the amount stated in Item 31A. Separable portions of the works
The approximate value of each of the eight Separable Portions and its percentage of the total Contract price is as follows:[9]
[9]V601 Submissions, 6 February 2019, [26].
Separable Portion – Building
Contract Value
% of Contract
SP1 – Building A1 (retail portion) $2,942,553 2.5 SP2 – Building C1 (commercial portion) $3,840,514 3.3 SP3 – Building D $9,370,626 8.1 SP4 – Building E $40,718,373 35.1 SP5 – Building C2 (residential portion) $8,785,562 7.6 SP6 – Building B $45,997,199 39.7 SP6A – Building A2 (residential portion) $3,859,702 3.3 SP7 – Common areas $350,000 0.3 The Principal Issues in the Proceeding
(a) were directed at advantaging V601 in dealing with and responding to Probuild’s time-extension and delay damages claims under the Contract;
(b) were directed at advantaging V601, including by delaying the determination and certification of, and minimising or defeating, Probuild’s contractual claims and entitlements in respect of its extension of time and delay damages claims;
(c) had regard to advantaging the commercial interests of V601 and, in particular, were directed at impeding, delaying, minimising, or defeating Probuild’s contractual claims for extension of time and delay damages and thereby advantaging the commercial interests of V601;
(d) lacked independence and were partial, unreasonable, and unfair exercises of the Project Manager’s independent functions and disregarded the express requirements of the Contract;
(e) did not have regard to express requirements of the Contract.
I am comfortably satisfied that Probuild’s ‘indicia’ of actions by the Project Manager, in support of its allegations that the Project Manager lacked independence, as detailed in Indicia 1 to 5 of Annexure 2 of Probuild’s Closing Submissions dated 11 June 2019, cumulatively and separately each establish both contractually wrongful undue influence by the Proprietor over the Project Manager and establish that both V601, by its Project Manager, and the Project Manager by its principal Nave, in breach of the Contract, including cls 20.2(a)(i)–(iii) and 20.2(b) of the Contract, failed to perform the contractually required assessment, determination and certification functions with the required degree of independence, impartiality, or in a fair and reasonable manner, or in accord with express requirements of the Contract, or without regard for V601’s commercial interests.
I am also additionally and separately comfortably satisfied that the Indicia relied upon by Probuild in 6, 7, 8, 9 and 10 of Annexure 2 and summarised below[1107] —
[1107]Probuild Closing Submissions, 11 June 2019, Annexure 2.
6.The Project Manager requesting that its communications with Probuild and determinations relating to the exercise of its independent certification functions be prepared, reviewed or amended by V601 or its agents, and particularly in relation to Probuild’s claims for extensions of time, the Façade Return Walls Variation and regarding the certification of Practical Completion.
7.The Project Manager seeking and, or alternatively, acting upon the advice and recommendations of V601’s agents relating to its independent certification functions, or the proper exercise of those functions, and particularly in relation to Probuild’s claims for extensions of time, the Façade Return Walls Variation and regarding the certification of Practical Completion.
8.The Project Manager procuring reports from TBH regarding Probuild’s EOT2A and EOT3 claims, knowing that such reports were to be used by V601 or its agents to refute Probuild’s EOT2A and EOT3 claims.
9.The Project Manager participating in meetings and telephone conversations, and being copied into correspondence, between V601, its agents and TBH regarding the defence of Probuild’s EOT2A and EOT3 claims, including:
(a)the establishment and maintenance of any privilege in such reports and summary documents; and, or alternatively
(b)the content and timing of any determinations regarding Probuild’s EOT2A and EOT3 claims having regard to V601’s financing arrangements for the development at 601 Victoria Street, Abbotsford.
10.The Project Manager failing to disclose to Probuild documents produced by TBH having regard to V601’s strategy of maintaining any privilege in such documents.
each separately and cumulatively establish both contractually wrongful undue influence by the Proprietor over the Project Manager, and also establish that both V601 by its Project Manager, and its Project Manager by its principal Nave, in breach of the Contract, including cls 20.2(a)(i)-(iii) and cl 20.2(b) thereof, failed to perform the contractually required assessment, determination and certification functions with the required degree of independence, impartiality, or in a fair and reasonable manner, or in accord with express requirements of the Contract, or without regard for V601’s commercial interests.
I find that, as a result of the Project Manager’s lack of independence and breaches of its obligations and duties, including those imposed on it by cls 20.2(a)(i)(iv) and 20.2(b)(i)–(iii), the Project Manager’s assessments and certifications in respect of Probuild’s extension of time claims and delay damages entitlements under the Contract, and the Project Manager’s assessment and certification of practical completion under the Contract and the Project Manager’s certification of Liquidated Damages pursuant to cl 34.7, including the Project Manager’s Certificate Number 5 dated 18 December 2013, are each void and must be set aside.
For the above reasons I dismiss V601’s claim for Liquidated Damages in the sum of $4,712,579 as a debt due and payable pursuant to, and by way of enforcement of, the Project Manager’s Certificate Number 5 dated 18 December 2013, or otherwise.
I also conclude and find that the Project Manager’s partisan administration of the Contract on behalf of V601 and associated lack of independence and the Project Manager’s often unsatisfactory and unreliable evidence, by its Principal, referred to in these reasons for judgment, each independently and also cumulatively, comfortably persuade me to give very little or no weight to the Project Manager’s evidence, in particular the evidence of its Principal, Mr Nave, in relation to all matters of controversy in this proceeding.
Clause 34 (EOT claims)
Relevant Approved Contractor’s Program
At all material times during the performance of the WUC, the Project Manager prevented an appropriate updated ‘Approved Contractor’s Program’ being accepted under cl 32.3 of the Contract, and thereby prevented Probuild as the Contractor from demonstrating delay affecting an activity on the critical path of a Contractor’s Program approved by the Project Manager as the ‘Approved Contractor’s Program’ (from time to time), pursuant to, and as contemplated by, cl 32.3 of the Contract.
I find that Lyall’s Baseline program (WUCP01) as updated, in substance, constitutes the Approved Contractor’s Program, including for the purposes of cl 34.4(b)(ii) of the Contract, and I am persuaded that program WUCP01 enables the identification of delay to an activity on the critical path of the WUC as in substance intended and in compliance with cl 34.4(b)(ii) of the Contract.
I find that cls 34.3 and 34.4 of the Contract remain applicable and operative to the extent that the operation of those clauses was not prevented by the contractually wrongful conduct of the Project Manager failing and refusing to approve the Contractor’s Programs submitted by Probuild as contemplated and required under cl 32.3.
I find that the time-extension provisions in cl 34 of the Contract remained operative (subject to the above findings in relation to the ‘Approved Contractors Program’) and I find that, because at all material times the Contract contained operative time-extension provisions, the conduct of V601 and its Project Manager in breach of cls 20.2, 32.3 and 34 has not set time at large under the Contract.
I find that, in breach of the Contract, V601 by its Project Manager (as V601’s Agent) failed to pay Probuild the acceleration costs and bonuses to which Probuild was entitled in breach of cl 32.3 of the Contract.
I find that cl 34 of the Contract, in particular cl 34.4(b)(ii), is not intended to limit or prescribe how the Contractor may establish that a relevant delay has affected an activity which is on the critical path of the Approved Contractor’s Program, and I find that it is contractually open to the Contractor to demonstrate, by whatever rational and persuasive means available, including retrospective as-build delay analysis, that a relevant delay has affected an activity on the critical path of a Separable Portion and/or of the WUC.
Programming evidence – delay analysis
I prefer, and I am persuaded, that Lyall’s retrospective delay analysis is, in the circumstances, a contractually permissible and probative, practical, logical, persuasive, and appropriate method of assessing and determining the effect caused by a critical and compensable occurrence in the nature of a delay to the critical path of the WUC.
I accept and prefer Lyall’s expert evidence in respect of delay and I find unpersuasive, and do not accept, Abbott’s delay-related prospective assessments and evidence in respect of the delays claimed by Probuild. Consequently, I do not accept, and I am unpersuaded, by Abbott’s prospective delay assessments.
I am persuaded and find, principally on the basis of the evidence given by Bready and Picking, that Probuild took all reasonable measures to preclude the occurrence of events causing delay, and took all reasonable measures to mitigate and minimise resulting delay.[1108]
[1108]Bready First Amended Witness Statement: including at [40] (completion of early works and WUC commencement), [43]: (possibility of a ‘soft start’), [127] (Soft Spots and foundation piling works); [186]–[188] and [194]–[196] (resequencing piling work and slab pours (Soft Spots)), [198] (Building E (Soft Spots)), [199] (Core E1; pre-emptive step (Soft Spots); [202]–[203] (sheet piling & core E1 (Soft Spots)), [216] (relocation of access ramp (Soft Spots)), [264] (vapour barrier (Hydrocarbon Contamination)), [284] (re-sequencing WUC (Hydrocarbon Contamination), [285]–[290] (post-certification of vapour barrier: resource concentration to get back in sequence; work occurring around the area affected by the HC (Hydrocarbon Contamination)), [316], [323]–[324] and [326] (redesign to provide V601 with additional time to arrange for kiosk removal (Citipower Kiosk)), [320] and [343] (staged construction of Building D (Citipower Kiosk)), [374] (‘looking for ways to catch up’ (Citipower Kiosk)), [382] (acceleration to reduce delay (Citipower Kiosk)), [389] (Building D and working around the kiosk (Citipower Kiosk)), [398] (necessary to re-sequence work to progress unaffected areas (Childcare Centre)), [399] and [464] (commercial part of Building C to be constructed as a ‘cold shell’ (Childcare Centre)), [418] (design changes to be resolved asap to mitigate impact on site works (Childcare Centre)); [432]: façade changes (Childcare Centre), [441] (see (a)(iv); attempting to move forward in the absence of complete/undated docs (Childcare Centre), [449] (redirection of activities (Childcare Centre)), [469] (see (a); re-sequenced resources into Building C to minimise delay arising from vapour barrier (Childcare Centre)), [582] (see (d); sourcing locally rather than overseas (Glazing Delay)); [591] (premium required for production overtime by Melbourne Façades (Glazing Delay)); [596] (additional resources required by Melbourne Façades to meet site requirements (Glazing Delay)), [601]–[602] (incentive agreement between Probuild and Melbourne Façades (Glazing Delay)), [613] (internal fit-out commenced to address delays (Glazing Delay)), [615] (other measures implemented to reduce this delay (Glazing Delay)), [619]–[628] (team adjustments, including windows & services coordinators, a defects supervisor, and additional labour; additional forklift driver and forklift hire and operation; additional Alimak/lift driver; additional builder’s lift; additional swing stages; site amenities relocation), [630]–[631] (rented another factory to provide additional space for Melbourne Façades (see also Bready Third Witness Statement, [86]–[87]); incentive agreement with MF), [632]–[633] (out-of-sequence work by plastering and painting subcontractors), [637] (acceleration of lift installation works in Building B), [642] (onsite efforts to accelerate WUC; Bready Amended Reply Witness Statement: including at [62] (reference to relocation of access ramp to open up a work-front that would otherwise not have been available; see also Bready First Witness Statement, [216]); [71] (WUC re-sequenced to enable work in adjacent areas to continue until vapour barrier installed (Hydrocarbon Contamination)), [91] (re-design of foundation piles (Soft Spots); see also Bready First Witness Statement, [127]), [94]: Design solution to accommodate continued presence of kiosk (Citipower Kiosk), [117] and [153] (‘cold shell’ plan re childcare centre (Childcare Centre)), [162] (cost reduction associated with changing awning windows to glazed windows; see also, [165]–[166]); Bready Amended Supplementary Witness Statement: [44] (refers to pre-emptive action in relation to sheet piling design; see also Bready Amended First Witness Statement, [199])).
I am persuaded and find that Probuild did not cause relevant delay to the Early Works or the WUC, as a result of failing to adequately resource the Early Works of the WUC.
Probuild’s early works claims
I find that Probuild is entitled to the following extensions of time pursuant to cl 9A of the Contract in relation to Early Works:
(a) 165 calendar days, from 25 January 2012 to 7 July 2012, in respect of SP3 and SP4; and
(b) 199 calendar days, from 22 December 2011 to 7 July 2012, in respect of SP1, SP2, SP5, SP6, SP6A, and SP7.
I reject, as unconcluded, V601’s alleged clause ‘9A Agreement’ in relation to the Early Works.
Probuild’s EOT2A claim
I find that the ‘Soft Spots’ referred to in relation to Probuild’s EOT2A claim constituted latent conditions under cls 25.1, 25.1A, and 25.2 of the Contract.
I find that, pursuant to cl 36 of the Contract, the Project Manager directed Probuild to redesign its planned piling and retention works to deal with the latent condition referred to in Probuild’s EOT2A claim above.
I find that the ‘Hydrocarbon Contamination’ referred to in Probuild’s EOT2A claim constituted a Latent Condition under cls 25.1, 25.1A, and 25.2 of the Contract.
I find that, pursuant to cl 36 of the Contract, the Project Manager directed Probuild to construct a vapour barrier to deal with the Latent Condition referred to in the above, arising from both the above Soft Spots and the above Latent Condition.
In addition to Probuild’s cl 9A (Early Works) extension of time entitlements referred to above, I find that Probuild is entitled to the following extensions of time under cl 34 of the Contract, and that Probuild is entitled to a Declaration in respect of each of the following time-extension entitlements:
EOT Claim Delay 2A – Soft Spots · SP3 – 10 working days – 27 April 2012 to 10 May 2012
· SP4 – 35 working days – 10 May 2012 to 5 July 2012
· SP7 – 35 working days – 10 May 2012 to 5 July 2012
3 – Hydrocarbon Contamination · SP1 – 28 working days – 5 April 2012 to 24 May 2012
· SP6 – 28 working days – 5 April 2012 to 24 May 2012
· SP6A – 28 working days – 5 April 2012 to 24 May 2012
6 – Building C Childcare Centre · SP5 – 21 working days – 18 July 2012 to 17 August 2012 7 – Glazing · SP1 – 41 working days – 13 December 2012 to 6 March 2013
· SP3 – 65 working days – 17 May 2013 to 27 August 2013
· SP4 – 44 working days – 28 June 2013 to 3 September 2013
· SP5 – 44 working days – 1 May 2013 to 9 July 2013
· SP6 – 25 working days – 13 June 2013 to 22 July 2013
· SP6A – 42 working days – 23 December 2012 to 20 March 2013
· SP7 – 44 working days – 28 June 2013 to 3 September 2013
I observe that, in relation to several of its EOT claims, Probuild is entitled to extensions of time in relation to more than one Separable Portion of the WUC in respect of the same period of time, resulting in overlapping extensions of time in relation to a number of Probuild’s time extension entitlements. I consider however that in the way Probuild’s time extension claims have been claimed and proved and related delay damages have been apportioned, no deduction or adjustment of periods of extension of time or delay damages arises. Examples of the overlap referred to above are:
(a) pursuant to cl 9A (Early Work) and also SP3 in the period 25 January 2012 to 2 July 2012;
(b) pursuant to EOT2A and also SP4 in the period 10 May 2012 to 5 July 2012;
(c) Pursuant to EOT7 – SP5, 1 May 2013 to 9 July 2013; and
(d) Pursuant to EOT7 – SP6, 13 June 2013 to 22 July 2013.
I find that the Contractor’s cl 34.9 entitlement to delay damages is, amongst other qualifications, limited to the costs defined by cl 34.9 and actually incurred.
I find Probuild’s Expert witness on quantum and delay damages, Mr Cox, to be persuasive, and his evidence to be probative and preferable to V601’s quantum and delay damages evidence.
I find that, by implication, the Contract requires the apportionment of delay damages between separable portions as calculated by Probuild’s quantum expert Cox, and that such an apportionment is also logical and just, and necessary to prevent the double recovery of delay damages by the Contractor in the event that it is entitled to an extension of time for the same period in relation to more than one Separable Portion.
I find that Probuild is entitled to apportioned delay damages in the following sums for the above identified time-extension entitlements in respect of the separable portion of the WUC below:[1109]
[1109]Quantum Experts’ Joint Report 2, 7: Annexure A: Allocation of EOT costs between Separable Portions for each EOT scenario. Neither Probuild or V601 argued that the specific Delay Damages claimed by Probuild should be reduced by reason of the Contractual ‘maximum’ and ‘cap’ in Annexure A of the Contract, Item 31A and Item 31B. Neither Probuild or V601 adduced any evidence directed to establishing the sums by which Probuild’s Delay Damages entitlements should be reduced under Items 31A and/or 31B.
SP1 SP2 SP3 SP4 SP5 SP6 SP6A SP7 EOT 2/2A $25,851 $715,514 EOT3 $30,062 $440,081 $33,970 EOT6 $96,621 EOT7 $99,780 $365,483 $909,981 $248,855 $488,515 $118,092
Accordingly, I find that the total apportioned delay costs that Probuild is entitled to be paid by V601 on account of delay damages pursuant to cl 34.9 of the Contract is $3,572,805.
I also find that V601 was in breach of the Contract both:
(a) directly by its own conduct in failing to grant and have certified and pay Probuild in respect of the time extension and other Probuild claimed entitlements identified as due and payable to Probuild in these reasons for judgment; and
(b) by its conduct in failing to ensure that the Project Manager acted independently as required by the Contract and in compliance with cls 20.2(a)(i)–(iii) and 20.2(b) of the Contract by:
(xxxii) procuring, encouraging and collaborating with the Project Manager, in respect of the Project Manager’s failures to comply with its contractual obligation and duties, including those outlined below;
(xxxiii) compromising the independence of the Project Manager;
(xxxiv) failing or refusing to comply with cl 32.3 of the Contract, by its Project Manager, in approving the Contractor’s Programs submitted by Probuild;
(xxxv) refusing or failing, by its Project Manager, to grant the extensions of time to which Probuild was entitled in relation to Probuild’s EOT claims 2A, 3, 6 and 7, and Probuild’s cl 9A Early Works claim;
(xxxvi) refusing or failing, by its Project Manager, to pay Probuild the delay damages to which it is entitled in respect of Probuild’s EOT claims 2A, 3, 6 and 7.
I reject Probuild’s alternative claim for damages for delay. By force of cl 34.9(c) of the Contract, Probuild is not, in the alternative, entitled to damages in respect of delay or disruption to the WUC for V601’s breach by its Project Manager for failing or refusing to grant the above time extension entitlements, and associated delay damages pursuant to cl 34.9 of the Contract, or otherwise.
If I am wrong in relation to my conclusions in the last preceding paragraph and Probuild is entitled to recover delay damages, in the alternative to Delay Damages pursuant to cl 34.9 of the Contract, in respect of V601’s above breaches, I consider that Probuild’s entitlement to delay damages arising from V601’s breaches is in the same sum as the above Delay Damages to which Probuild is entitled.
Achievement of Practical Completion
I find that Probuild achieved the following Dates of Practical Completion in relation to the following Separable Portions:
(a) Separable Portion 1 – 3 July 2013;[1110]
[1110]Nave Statement, 3 February 2019, [563], [599], [600].
(b) Separable Portion 2 – 31 July 2013;[1111]
[1111]Bready Amended First Statement, [640], [641]; Nave Witness Statement, [564].
(c) Separable Portion 3 – 17 December 2013;[1112]
[1112]Bready Amended First Statement, [622]; Nave Witness Statement, [568].
(d) Separable Portion 4 – 17 December 2013;[1113]
[1113]Bready Amended First Statement, [622]; Nave Witness Statement, [568].
(e) Separable Portion 5 – 12 November 2013;[1114]
[1114]I find that Probuild is entitled to a Declaration that it achieved Practical Completion of SP5 (Building C residential), SP6 (Building B), and SP6A (Building A residential) on 12 November 2013, being the date the original Occupancy Permit dated 12 November 2013 was given to the Project Manager.
(f) Separable Portion 6 – 12 November 2013;[1115]
(g) Separable Portion 6A – 12 November 2013;[1116] and
(h) Separable Portion 7 – 17 December 2013.[1117]
[1115]I find that Probuild is entitled to a Declaration that it achieved Practical Completion of SP5 (Building C residential), SP6 (Building B), and SP6A (Building A residential) on 12 November 2013, being the date the original Occupancy Permit dated 12 November 2013 was given to the Project Manager.
[1116]I find that Probuild is entitled to a Declaration that it achieved Practical Completion of SP5 (Building C residential), SP6 (Building B), and SP6A (Building A residential) on 12 November 2013, being the date the original Occupancy Permit dated 12 November 2013 was given to the Project Manager.
[1117]Bready Amended First Statement, [663]; Nave Witness Statement, [568(c)].
Façade variation claim
I uphold Probuild’s Façade Variation claim in the sum of $520,436 (plus GST) and I also find that by its conduct the Project Manager, pursuant to cl 36, directed the construction of the façade in precast concrete.
Bonus payment
Both Probuild and V601 dealt only perfunctorily with Probuild’s bonus claim. Probuild submitted that it was entitled to a Bonus payment calculated by applying the daily rate specified in Annexure Part A, Item 30 of the Contract, for each Separable Portion for each day on which Practical Completion was achieved earlier than the Date for Practical Completion.
V01 submitted that the calculation of Probuild’s entitlement to a Bonus payment is a mechanical function under the Contract, to be performed once the Dates for Practical Completion and the Dates of Practical Completion have been determined.
I find that Probuild is entitled to declarations that it achieved Practical Completion as set out below in relation to the dates of Practical Completion in relation to Separable Portions.
I find that Probuild is entitled to the payment of a Bonus pursuant to cl 34.8 of the Contract for achieving Practical Completion earlier than the Contract Dates for Practical Completion, adjusted in accordance with the extensions of time granted herein to Probuild, such Bonus payment to be calculated in accordance with the rate referred to in Item 30 (Annexure Part A) of the Contract.
Acceleration costs
I find that Probuild is entitled to acceleration costs, as an element of damages flowing from the Project Manager’s failure to certify Probuild’s extension of time entitlements to Probuild, V601’s breaches found above in relation to its Project Manager’s lack of independence, and alternatively on the basis that such acceleration costs are recoverable as a reasonable cost of attempted mitigation of delays by Probuild.
I find the quantum of Probuild’s acceleration claim in the sum of $1,346,799.
Probuild is entitled to acceleration costs incurred to overcome or minimise the extent of delay, as an element of damages flowing from the Project Manager’s breaches in failing to certify Probuild’s extension of time entitlements.
A declaration that in the alternative Probuild is entitled to acceleration costs incurred to overcome or minimise the extent of delay, on the basis that such acceleration costs are recoverable as a reasonable cost of attempted mitigation by Probuild.
Probuild has not however established that the Project Manager gave a ‘direction’ to accelerate the WUC under cl 32.4.
Probuild is not barred by either cls 32.5(c) or by 34.9(c) from recovering such of its costs and loss flowing or arising from the bases referred to in the last two preceding paragraphs above because:
(a) cl 32.5(c) of the Contract is confined in its application to loss arising out of a cause of delay and a direction given by the Project Manager under cl 32.4 of the Contract. Probuild’s acceleration costs arise from the Project Manager’s relevant breaches, alternatively arise as a cost of mitigation;
(b) cl 34.9 of the Contract is limited in its application to recovery by the Contractor of other damages, costs or other compensation, in respect of the Contractor’s entitlement for delay and disruption to the WUC. Probuild’s acceleration costs are of a nature and arise as outlined in the last preceding sub-paragraph.
I am not satisfied that the whole of Probuild’s claimed acceleration costs are separate from and not included in Probuild’s entitlement to the delay damages awarded hereunder.
To prevent double recovery, Probuild’s acceleration recovery should be limited to recovery of its costs and loss in relation to the measures it took to overcome or minimise delay, which are separate from the reasonable and necessarily incurred direct on-site time related costs, including on-site preliminaries costs, which Probuild is entitled to recover in the nature of delay damages in respect of successful time extension claims in this proceeding.
If, however, I am wrong, in respect of Probuild’s extension of time entitlements, and Probuild is not entitled to its claimed EOT and associated delay damages, thereby obviating recovery by Probuild of both acceleration costs which are in the nature of delay damages and Delay Damages under the Contract, resulting in double recovery by Probuild, then Probuild would I consider be entitled to judgment on its acceleration claim in the claimed amount of $1,706,535.81.
I am satisfied that the following components of Probuild’s acceleration claim, referred to in Appendix 6 of Probuild’s Closing Submissions dated 11 June 2019, are not in the nature of delay damages otherwise recoverable by Probuild pursuant to cl 34.9 and are therefore solely in the nature of acceleration costs:
(a) Additional labour – $428,977.92;
(b) Additional forklift driver – $82,348.44;
(c) Additional alimak driver – $97,669.08;
(d) Additional builders’ lift – $5,140;
(e) Additional swim stages – $100,300.36;
(f) Rental of additional factory facilities off-site – $85,770;
(g) Windows: out of sequence work – $234,000;
(h) Plasterboard – $233,000;
(i) Painting – $36,040;
(j) Otis storage costs – $42,500;
TOTAL - $1,345,745
The following items in Appendix 6 to Probuild’s Closing Submissions dated 11 June 2019 are disallowed, because they are in the nature of direct on-site time-related costs or in the nature of preliminaries and if recovered by Probuild both as acceleration costs and as delay damages, are precluded pursuant to cls 32.5(a)–(c) and 34.9(a) of the Contract, and are also not recoverable on the basis of the rule against double recovery:[1118]
[1118]Bready 1, [618], describes these costs as preliminary costs.
(a) Windows coordinator – $142,208;
(b) Defects supervisors – $53,819.80;
(c) Service coordinator – $77,328;
(d) Site amenities – $86,380.21;
TOTAL – $359,736
V601’s claims
For the above reasons I reject and dismiss V601’s below claims in respect of:
(a) the sum of $4,712,519 by way of Liquidated Damages to 17 December 2013;
(b) interest due pursuant to cl 37.5 of the Contract on Liquidated Damages due and payable;
(c) V601’s claim for Declarations of the Dates of Practical Completion as certified by the Project Manager.
Orders
For the reason earlier referred to in these reasons for judgment, including the above key findings and conclusions, I propose to make the following orders:
A declaration that Probuild is entitled to the following extensions of time pursuant to cl 9A of the Contract in relation to Early Works:
(a) 165 calendar days, from 25 January 2012 to 7 July 2012, in respect of SP3 and SP4; and
(b) 199 calendar days, from 22 December 2011 to 7 July 2012, in respect of SP1, SP2, SP5, SP6, SP6A, and SP7.
A declaration that the ‘Soft Spots’ referred to in Probuild’s EOT2A claim constituted Latent Conditions under cls 25.1, 25.1A, and 25.2 of the Contract.
A declaration that the ‘Hydrocarbon Contamination’ referred to in Probuild’s EOT2A claim constituted a Latent Condition under cls 25.1, 25.1A, and 25.2 of the Contract.
A declaration that Probuild is entitled to the following extensions of time under cl 34 of the Contract in respect of the following Separable Portions.
EOT Claim Delay 2A – Soft Spots · SP3 – 10 working days – 27 April 2012 to 10 May 2012
· SP4 – 35 working days – 10 May 2012 to 5 July 2012
· SP7 – 35 working days – 10 May 2012 to 5 July 2012
3 – Hydrocarbon Contamination · SP1 – 28 working days – 5 April 2012 to 24 May 2012
· SP6 – 28 working days – 5 April 2012 to 24 May 2012
· SP6A – 28 working days – 5 April 2012 to 24 May 2012
6 – Building C Childcare Centre · SP5 – 21 working days – 18 July 2012 to 17 August 2012 7 – Glazing · SP1 – 41 working days – 13 December 2012 to 6 March 2013
· SP3 – 65 working days – 17 May 2013 to 27 August 2013
· SP4 – 44 working days – 28 June 2013 to 3 September 2013
· SP5 – 44 working days – 1 May 2013 to 9 July 2013
· SP6 – 25 working days – 13 June 2013 to 22 July 2013
· SP6A – 42 working days – 23 December 2012 to 20 March 2013
· SP7 – 44 working days – 28 June 2013 to 3 September 2013
A declaration that Probuild is entitled to be paid apportioned delay damages by V601 in the total sum of $3,572,805 to Probuild.
I dismiss Probuild’s alternative claim for damages for delay.
A declaration that Lyall’s Baseline program (WUCP01) as updated, in substance, constitutes the Approved Contractor’s Program, including for the purposes of cl 34.4(b)(ii) of the Contract for the purposes of determining Probuild’s entitlements to extensions of time.
A declaration that the Contract Dates for Practical Completion are for each Separable Portion and the WUC, to be extended and adjusted by the extensions of time granted to Probuild hereunder.[1119]
[1119]Neither Probuild’s submissions, written or oral, identified or clarified its asserted/claimed adjusted Dates for Practical Completion.
Delay Damages
An order that V601 pay Probuild delay damages in the sum of $3,572,805.
Acceleration costs
An order that V601 pay Probuild acceleration costs in the sum of $1,346,799.
Façade variation claim
An order that V601 pay Probuild the sum of $520,436 (plus GST) in relation to Probuild’s Façade Variation claim.
Bonus payment
A declaration that Probuild is entitled to the payment of a Bonus pursuant to cl 34.8 of the Contract for achieving Practical Completion earlier than the Date for Practical Completion, with such Bonus payment to be calculated as referred to in Item 30 (Annexure Part A) of the Contract at the rate per day between the Date of Practical Completion and the Date for Practical Completion specified in Part A of the Contract (Item 30) in respect of each Separable Portion adjusted by the extensions of time granted to Probuild herein.
A declaration that Probuild achieved the following Dates of Practical Completion in relation to the following Separable Portions:
(a) Separable Portion 1 – 3 July 2013;
(b) Separable Portion 2 – 31 July 2013;
(c) Separable Portion 3 – 17 December 2013;
(d) Separable Portion 4 – 17 December 2013;
(e) Separable Portion 5 – 12 November 2013;
(f) Separable Portion 6 – 12 November 2013;
(g) Separable Portion 6A – 12 November 2013; and
(h) Separable Portion 7 – 17 December 2013.
I dismiss V601’s claims in respect of:
(a) the sum of $4,712,519 by way of Liquidated Damages to 17 December 2013;
(b) interest due pursuant to cl 37.5 of the Contract in respect of Liquidated Damages asserted as due and payable;
(c) Declarations of the Dates of Practical Completion as certified by the Project Manager;
(d) the Dates of Practical Completion as certified by the Project Manager, save in relation to Dates of Practical Completion which are not in dispute.
I shall await the parties’ proposed form of Final Orders, including in relation to the calculation of the sum of the abovementioned bonus payments by V601 to Probuild,[1120] and including interest and costs.
[1120]The calculation by the parties of the Probuild bonus payments to be calculated (and if possible agreed) by the parties as referred to in cl 34.8 and Item 40 (Annexure Part A) of the Contract, based on the findings herein as to the Dates for Practical Completion and the Dates of Practical Completion of Separable Portions.
In relation to costs, subject to any submissions which may be served and filed pursuant to the below directions, my present and preliminary view is that costs, including any reserve costs should be ordered in favour of Probuild and against V601, on a standard basis.
In respect of proposed Final Orders, referred to above, absent agreement between the parties, I direct that Probuild file and serve its proposed form of Final Orders and, if necessary, outline submissions (not exceeding four pages) in support thereof by 4:00pm 10 January 2022, and I further direct that V601 also file and serve its proposed form of Final Orders and, if necessary, outline submissions (not exceeding four pages) in support thereof by 4:00pm 10 January 2022.
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