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Walton v Illawarra

Walton v Illawarra

Case [2011] NSWSC 1188 13 October 2011

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Supreme Court

New South Wales

Medium Neutral Citation: Walton v Illawarra [2011] NSWSC 1188
Hearing dates: 22/08/2011, 23/08/2011, 24/08/2011, 25/08/2011 and 26/08/2011
Decision date: 13 October 2011
Before: McDougall J
Decision:
Plaintiff entitled to damages for breach of contract. Defendant entitled to damages for delay and rectification costs. Damages to be set off. Parties to bring in short minutes of order.

Catchwords: BUILDING AND CONSTRUCTION - contract - interpretation of contract - nature of superintendent's task - whether contractor's entitlement to extensions of time and payments are limited to those so determined by superintendent - extent to which liability flowed to principal for superintendent's failure to adequately perform tasks - DAMAGES - quantification - damages for shortfall between entitlement and superintendent's valuation- - whether recovery constrained by contract - damages for delay in practical completion - whether loss too remote - entitlement to interest.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Industrial Relations Act 1996 (NSW)
Cases Cited: Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 311
Atlantic Civil Pty Ltd v Water Administration Ministerial Corporation (1992) 39 NSWLR 468
Beaufort Developments (NI) Ltd v. Gilbert-Ash NI Ltd and Others [1999] 1 AC 266
Hawker Noyes Pty Ltd v New South Wales Egg Corporation (11 November 1988, unreported; BC 8801337)
Northern Regional Health Authority v Derek Crouch Construction Co Ltd[1984] 1 QB 644
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528
Watson v Foxman (1995) 49 NSWLR 315
Category: Principal judgment
Parties: Walton Construction Pty Limited ACN 060 900 218 (Plaintiff)
Illawarra Hotel Company Pty Limited (ACN 063 558 467) (Defendant)
Representation: Counsel:
M R Gracie / D A Neggo (Plaintiff)
S R Donaldson SC / H M Durham / D A Moujalli (Defendant)
Solicitors:
Crisp Legal (Plaintiff)
Norbert Lipton & Co (Defendant)

File Number(s): 2008/290556

Judgment

On 5 August 2006, the defendant (Illawarra) as principal and the plaintiff (Walton) as contractor made an agreement for the refurbishment of the Illawarra Hotel at Wollongong (the hotel). The date of commencement of the works was specified as 9 January 2006. The date for practical completion of the works was specified as 5 August 2006.

Work under the contract was delayed almost from the beginning, and thereafter frequently during the execution of the works. Practical completion was not achieved until 9 July 2007.

The parties disagreed as to the number of days of extensions of time to which Walton was entitled. They disagreed, further, as to the extent and value of variations to the works performed by Walton and as to the amount to be allowed for provisional cost (PC) items. Some of the issues in dispute between the parties were referred to a referee, Ms Janet Grey (the referee), for enquiry and report. With some exceptions, her report was adopted by the court.

This judgment is concerned with the consequences that flow from adoption of the referee's report, and with the remaining issues in dispute between the parties that were not…

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.

Continue reading Walton v Illawarra

Details

AGLC: Walton v Illawarra [2011] NSWSC 1188
Case: [2011] NSWSC 1188
Decision Date: 13 October 2011

CaseChat Overview and Summary

Walton was a contractor engaged by Illawarra to perform building work. A dispute arose over the interpretation of their contract, particularly concerning the superintendent's role in determining the contractor's entitlement to extensions of time and payments, and whether the principal was liable for the superintendent's failure to adequately perform these tasks. The case was heard by the Supreme Court of New South Wales.

The court had to decide whether the contractor's entitlement to extensions of time and payments were limited to those determined by the superintendent. It also needed to assess whether the principal could be held liable for the superintendent's failure to adequately perform their tasks, and whether the contractor's damages for the shortfall between the entitlement and the superintendent's valuation were constrained by the contract. Additionally, the court examined whether the damages for delay in practical completion were too remote, and the entitlement to interest on the damages.

The court found that the superintendent's role was to determine the contractor's entitlement to extensions of time and payments, but the principal could still be liable for the superintendent's failure to adequately perform these tasks. The court held that the damages for the shortfall between the entitlement and the superintendent's valuation were not constrained by the contract, as the damages were intended to compensate the contractor for the loss suffered. The court also found that the damages for delay in practical completion were not too remote, as the delay was a direct consequence of the superintendent's failure to perform their tasks adequately. Finally, the court held that the contractor was entitled to interest on the damages.

The court ordered Illawarra to pay Walton the damages for the shortfall between the entitlement and the superintendent's valuation, damages for delay in practical completion, and interest on the damages.

Orders