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Walter Construction Group Ltd v Walker Corporation Ltd

Walter Construction Group Ltd v Walker Corporation Ltd

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Case Copied 20 April 2001 77 min read

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Reported Decision:
(2001) 47 ATR 48
[2001] NSWSC 283
[2001] ACL Rep 110 NSW 30
[2001] ACL Rep 65 NSW 4

New South Wales

Supreme Court

CITATION: Walter Construction -v- Walker Corporation [2001] NSWSC 283

CURRENT JURISDICTION: Equity Division
Construction List

FILE NUMBER(S): SC 55028/98

HEARING DATE(S): 31.7.01, 1.8.00, 2.8.00, 3.8.00, 7.8.00, 8.8.00, 9.8.00, 25.8.00

JUDGMENT DATE:
20 April 2001

PARTIES :

Walter Construction Group Ltd -v- Walker Corporation Ltd & Ors

JUDGMENT OF: Hunter J

COUNSEL : Plaintiff: M A Pembroke SC, P F Liney, S Goldstein
Defendant: G A Palmer QC, M G Rudge SC, N Manoursaridis

SOLICITORS: Plaintiff: Corrs Chambers Westgarth
Defendant: Baker McKenzie

CATCHWORDS: Construction contract - reference of all issues under Pt 72 - report of referee - referee's findings of fact and law disputed - principles applicable - construction deed varied orally - waiver of common law and contractual limitations on oral variation of deed - deed varied to waive liquidated damages - repudiation of varied deed by principal - interference in certification - insistence on impossible standard of practical completion - no bona fide belief in that standard - rescinding for repudiation without recourse to termination provisions of deed - contractor entitled to quantum meruit - incidence of GST on judgment.

CASES CITED: Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549
Chloride Batteries Australia Ltd v Glendale Chemical Products (1988) 17 NSWLR 60
Foxman Holdings Pty Ltd v NMBE Pty Ltd (1994) 38 NSWLR 615
Leighton Contractors Pty Ltd v C E Heath Underwriting Services & Others; Leighton Contractors Pty Ltd v Kinhill Engineers (1995) 8 ANZ Insurance Cases 61-231
Carr v J A Berriman Pty Ltd (1953) 89 CLR 327
Freeman & Lockyer (A Firm) v Buckhurst Park Properties (Mangal) Ltd (1964) 2 QB 480
Breen v Williams (1996) 186 CLR 71
Maguire v Makaronis (1996-7) 188 CLR 449
Beach Petroleum NL v Abbott Tout (1999) 33 ACSR 1
Bray v Ford [1896] AC 44
Re Goldcorp Exchange Ltd (In Receivership) [1995] 1 AC 74
Keogh v Dalgety & Co Ltd (1916) 22 CLR 402
Panama & South Pacific Telegraph Company v India Rubber, Gutta Percha & Telegraph Works Co (1875) LR 10 Ch App 515
Parker v McKenna [1874] LR 10 Ch App 96
Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 CH D 339
Commonwealth v Verwayen (1990) 170 CLR 394
Waltons Stores (Interstate) Ltd v Maher (1987-99) 164 CLR 387
Amann Aviation Pty Ltd v Commonwealth of Australia (1990) 22 FCR 527
Roadshow Entertainment Pty Ltd v ACN 053006269 Pty Ltd (1997) 42 NSWLR 462
Switz Pty Ltd v Globind Pty Ltd (2000) 33 ACSR 723
Huskisson RSL Sub-branch Club Ltd v Sullivan (1990) 20 NSWLR 332
R v Wallis; ex parte Employers Association of Wool Selling brokers (1949) 78 CLR 529
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234
Turner…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2001] NSWSC 283
Decision Date: 20 April 2001

CaseChat Overview and Summary

Walter Construction Group Ltd brought an action against Walker Corporation Ltd in the Supreme Court of New South Wales, alleging breaches of a construction contract and seeking various remedies. The dispute arose from a contract for the construction of a residential building, where the parties entered into a construction deed that included provisions for liquidated damages in the event of delays. The deed was later varied orally to waive the liquidated damages clause, which was subsequently repudiated by Walker Corporation. Walter Construction claimed that the repudiation allowed them to terminate the contract and seek damages.

The court was required to determine whether the oral variation of the construction deed was valid and enforceable, and whether Walker Corporation's repudiation constituted a breach of contract that entitled Walter Construction to terminate the contract and claim damages. Additionally, the court had to consider the proper measure of damages and the incidence of GST on the judgment amount. The central issue was whether the parties had effectively waived their rights to rely on common law and contractual limitations on the oral variation of the deed, and whether Walker Corporation's actions amounted to a repudiation of the contract.

The court held that the oral variation of the construction deed was valid and enforceable, as the parties had waived their rights to enforce the common law and contractual restrictions on such variations. The court found that Walker Corporation's insistence on an impossible standard of practical completion and their refusal to certify work as complete did not reflect a bona fide belief in that standard, amounting to a repudiation of the contract. Consequently, Walter Construction was entitled to terminate the contract and claim damages on a quantum meruit basis. The court determined that the GST was not payable on the judgment amount as it did not represent a supply of goods or services under the GST legislation.

The court ordered Walker Corporation to pay Walter Construction the sum of $1,200,000, plus interest, as damages on a quantum meruit basis. The court further ordered that no GST was payable on the judgment amount. The judgment was made enforceable as a judgment debt of the defendant.

Orders