Yaak v Burbank Australia Pty Ltd ACN 007 099 872 (Civil Dispute) - [2021] ACAT 90

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

YAAK v BURBANK AUSTRALIA PTY LTD ACN 007 099 872 (Civil Dispute) [2021] ACAT 90

XD 788/2020
Catchwords: CIVIL DISPUTE – residential building contract – Housing Industry Association contract – claim by homeowner for liquidated damages due to late completion under the contract – claim by builder for extensions of time for various reasons – whether notice for extension of time required – what is standard of proof for valid extensions of time – whether prevention principle applies – calculation of liquidated damages at a daily rate for period between practical completion date and actual completion date minus periods of valid extensions of time
Cases cited:Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd and Ors (1996) 12 BCL 317
Kane Constructions Pty Ltd v Sopov [2005] VSC 237
McAlpine Humberoak Ltd v McDermott International Inc (No 1) (1992) 58 BLR 1
Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151
Raj Saneja and Manju Saneja v Dynabuild Pty Ltd; Dynabuild Pty Ltd v Raj Saneja and Manju Saneja[2014] NSWCATCD 84
Tosolini & Ors v Temperate Living Pty Ltd ACN 125 472 862 [2020] ACAT 94
Turner Corporation Ltd (In Provisional Liquidation) v Co-ordinated Industries Pty Ltd and Ors (1994) 11 BCL 202
Turner Corporation Ltd (Receiver & Manager Appointed) v Austotel Pty Ltd (1997) 13 BCL 378

Tribunal:Senior Member L Beacroft

Date of Orders:  24 September 2021
Date of Reasons for Decision:      24 September 2021
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 788/2020
BETWEEN:
AKOI YAAK
Applicant

AND:
BURBANK AUSTRALIA PTY LTD ACN 007 099 872
Respondent

TRIBUNAL:Senior Member L Beacroft

DATE:24 September 2021

ORDER

The Tribunal orders that:

The respondent is to pay the applicant $11,857.20 comprising:
(a)$10,740 for liquidated damages
(b)$523.45 interest
(c)$593.75 for ACAT filing fee and search fees.
………………………………..

Senior Member L Beacroft

REASONS FOR DECISION

Background

The applicant Akoi Yaak (the applicant) claims damages from Burbank Australia Pty Ltd (the respondent). The applicant claims damages under a contract between the parties, which is a Housing Industry Association (HIA) contract version July 2013 titled “ACT Residential Building Contract for New Homes” dated 26 March 2018 (the contract). The applicant claims the sum of $11,760 in liquidated damages, plus interest from 24 July 2020 being the date of the initial application, plus re-imbursement of the filing fee of $572.50 and a search fee of $21.25.[1]
[1] Applicant’s material in reply dated 22 April 2021
The respondent denies the claim.
The parties filed submissions and evidence prior to the hearing. A hearing was held on 7 July 2021. The respondent did not require cross examination of Mr Yaak, the applicant, and he had filed a statement dated 25 May 2021. Mr Brett Shrimpton, a construction manager for the respondent, gave oral evidence at the hearing and accepted his statement dated 21 June 2021. Following the hearing, the parties filed final submissions that consisted of an ‘aide memoire’ prepared by the respondent and a document that provided the applicant’s comments to the latter.

Key terms of contract

The contract included a plain English section that states: “Extensions of Time: Sometimes the builder may need to extend the time for completing the work. If there are any extensions the builder must tell you in writing”.[2]
[2] Contract, explanatory notes for the owner 4, page 2
Clause 2 is titled “Definitions”.[3]
[3] Contract clause 2, page 12
Under clause 2, “building works means the work to be done on the site by the builder under the contract”.
Under clause 2, ‘completion time’ is defined to mean what is stated in Item 9, Schedule 1. The latter Item and Schedule states that “[t]he building works must reach the stage of practical completion no more than 43 days after commencement, subject to clause 22”. Note, the parties agreed during the ACAT proceedings that they each intended it to be 43 ‘weeks’ not 43 ‘days’.
Under clause 2, “days means working days and does not include weekends and public holidays”.
Under clause 2, ‘practical completion’ is defined to mean that “the building works have reached the stage where the builder certifies that they have been completed in accordance with the contract, except for minor omissions and, where applicable, has done all that the builder is required to do under the contract to enable a certificate of occupancy to be obtained”.
Clause 22 is titled “Delays and extensions of time”,[4] and clause 22(2) is varied by a Special Condition in Schedule 2 that is stated in Schedule 2 to “take precedence” over general conditions.[5]
[4] Contract, clause 22, pages 17-18
[5] Contract, schedule 2, page 5
Clause 22(1) states that the “completion time will be extended if the building works are delayed because of” and then lists various matters including:
…
(b)     any suspension of the building works…under the contract;
(c)     bad weather conditions that affect the building works;
(f)     anything done or not done by the owners;
(h)     the industry shutdown during the 25-day period beginning on or after the 22 December each year.
Clause 22(2) has a sub-heading “Procedure for an extension of time” and states that:
“[t]he builder must notify the owner in writing within 5 days of becoming aware that the building works will be delayed. The builder must set out in the notice the reasons for the delay and how much extra time is needed”.
However, the Special Condition in schedule 2 mentioned above states that clause 22.2 is amended to read “[t]he builder is to give the owner written notice of an entitlement to an extension of time detailing (a) the cause of the delay, and (b) the extension of time. At the completion of the building work, The Bureau of Meteorology reports will be used to justify inclement weather”.
Clause 22(3) has a sub-heading “Costs of an extension of time”, and states that:
[e]xcept for the industry shutdown referred to in Clause 22(1)(h), the builder shall be entitled to an increase in the contract price, but only if the delay results in an increase to the costs of the builder. The builder must include this amount in the next progress claim.
Clause 23 is titled “Practical Completion”.[6]
[6] Contract, clause 23, page 18
Clause 23(1) states that:
[w]hen the building works have reached the stage of practical completion, the builder must give the owner a notice of practical completion and the final progress claim.
Clause 23(2) states that:
[w]ithin 5 days, the owner and the builder must meet together to inspect the building works. The owner must give the builder a written and signed list of any work required by the contract which the owner claims is defective or unfinished. If the owner fails to do so within 5 days, the owner must immediately pay the amount of the final progress claim.
Clause 23(6) is sub-titled “Damages for the late completion of building works”, and it states that:
[t]he owner may be entitled to liquidated damages if the building works are not completed by the completion time…calculated by the extra time taken to finish the work, at the rate set out in Item 12, Schedule 1.
Item 12, Schedule 1 sets out that this is at the rate of “$300/week calculated on a daily basis”, i.e. $60/day.
Clause 24 is titled “Suspending the building works”.[7]
[7] Contract, clause 24, page 18
Clause 24(1) states that “[i]f the owner breaches the contact, the builder may suspend the building works by notifying the owner in writing”.
Clause 27 is titled “Notices”.[8]
[8] Contract, clause 27, page 20
Clause 27(1) states that a “notice is received when delivered in person, transmitted by facsimile or sent by post and 2 days have passed after it is sent”.

Agreed key facts

The parties agree as follows:
(a)The parties intended that Item 9, Schedule 1 in the contract, being the completion time, be 43 ‘weeks’ and not 43 ‘days’ as is written in the contract.[9]
[9] Applicant’s material in reply dated 22 April 2021 page 2, Item D; Respondent’s response dated 9 December 2020 at [1c]; Transcript of proceedings 7 July 2021, page 7
(b)The building works commenced on 2 October 2018.[10]
[10] Applicant’s material in reply dated 22 April 2021 page 2, Item C; Respondent’s final submissions dated 7 July 2021
(c)There were two periods of suspension under the contract of 34 days each that extended the completion time.[11]
[11] Applicant’s material in reply dated 22 April 2021 pages 2, 3, Items F and P; Respondent’s final submission and timeline of events filed 7 July 2021
(d)Certificate of occupancy issued on 28 July 2020.[12]
[12] Respondent’s material dated 12 April 2021 page 82

Disputed issues

What is the initial completion time?
Are the respondent’s additional claims for extensions of time to complete allowed?
What is the actual completion time after all allowable extensions of time are allowed for?
What, if any, liquidated damages are payable to the applicant?

Applicant’s contentions

The initial completion time ends on 30 July 2019 i.e. 43 weeks after the date that building works commenced being 2 October 2018 to 30 July 2019, and no adjustment is required to be made for weekends, public holidays, or a Christmas shutdown under the contract for this period of time.[13]
[13] Applicant’s material in reply dated 22 April 2021 page 2, Item D and calculations of date shown in page 94; Transcript of proceedings 7 July 2021, page 16
Practical completion never occurred in accordance with the contract so analysis of the facts is required to determine the date of practical completion. Date of practical completion is 18 August 2020, being the date of an email sent from the respondent’s legal representative to the applicant’s legal representative that states for the first time that “the dwelling is now complete”.[14] The applicant contends that the Practical Completion Inspection Note dated 5 March 2020 (PCI note), filed by the respondent as evidence of the earlier practical completion date, is “a far cry from what is anticipated by clause 23”, and also the corrected final progress payment anticipated under clause 23 did not issue until 29 May 2020.[15] The applicant disputes that by signing the form to obtain the occupancy certificate he was agreeing that practical completion had been achieved then – he contends that he was “forced” to sign the form on 24 July 2020 in order to mitigate any damages payable by the respondent and for financial reasons.[16]
[14] Applicant’s material in chief dated 16 March 2021 pages 89-93; Transcript of proceedings 7 July 2021, page 17
[15] Transcript of proceedings 7 July 2021, page 55
[16] Respondent’s material dated 12 April 2021 page 101; Applicant’s material in chief dated 16 March 2021 page 86; Transcript of proceedings 7 July 2021, page 56
The completion time was 264 days after the initial completion time (30 July 2019-18 August 2020), and this count of time excludes weekends and public holidays in line with the definition of a ‘day’ under the contract.[17]
[17] Transcript of proceedings 7 July 2021, page 17
The applicant contends that the respondent validly extended the completion time by a total of 68 days only as follows: firstly by a notice titled “Notice of Extension of Time” dated 23 October 2019[18] to suspend the building works and the building period resumed upon payment of the outstanding invoice being 10 December 2019 i.e. 34 days, and secondly by a similarly titled notice dated 15 May 2020[19] to suspend the building works and the building period resumed on 2 July 2020 i.e. 34 days. This total period of 68 days of extension of the time to complete excludes weekends and public holidays in line with the definition of a ‘day’ under the contract.
[18] Applicant’s material in chief dated 16 March 2021 page 64
[19] Applicant’s material in chief dated 16 March 2021 page 74
The applicant disputes that the first extension of time ended on 17 December 2019 as the respondent contends and refers to the respondent’s own invoice NX813 dated 29 May 2020 that shows interest for the relevant late payment ended on 10 December 2019.[20]
[20] Applicant’s material in chief, dated 16 March 2021 page 77
The applicant disputes that the second extension of time ended 113 days or at best 56 days from its start date as the respondent contends,[21] given the building period is agreed to have resumed on 2 July 2020 following correspondence between the parties and part-payment by the applicant shortly after.
[21] Respondent’s final submission and timeline of events, filed 7 July 2021
The applicant disputes the other extensions of time claims contended by the respondent, for late payment of invoices not subject to the two above mentioned notices and also for bad weather, because the respondent failed to exercise its right to do so under the contract and it has provided inadequate proof.
The applicant contends that notices are required to be issued by the respondent to the applicant to claim an extension of time, as it did for the two agreed extensions of time. The applicant contends that as a matter of law under the contract a notice under section 22(2) as varied by the special condition must be served by the respondent on the applicant for an extension of time to be claimed under the contract:
[T]he builder had a contractual right to extend the building period available to it at all times…[and] because [the builder] did not assert that contractual right [by serving of the notice], then he is no longer entitled to point to it as a reason for not achieving practical completion within the building period.
…[Further,] no notice was received at all…about anything to do with Bureau of Meteorology records for any delays …due to anything to do with weather…for that special condition to operate to effectively provide the builder with retrospective extensions of time…we say [this contention by the respondent] is not the intention of the parties under the contract and is commercially nonsensical.[22]
[22] Transcript of proceedings 7 July 2021, page 54
The actual completion time was 196 days (264 less 68 days) after the initial completion time end date of 30 July 2019, i.e. 196 days late.[23]
[23] Transcript of proceedings 7 July 2021, pages 9-10
Applying the formula for liquidated damages, (i.e. $60/day) the sum of liquidated damages due is $11,760 (196 days x $60).[24]

Respondent’s contentions

[24] Applicant’s material in reply dated 22 April 2021 pages 1-8

Initial completion time end date is 11 September 2019 because the respondent contends that the Christmas shut-down (24/12/18-25/1/19) and also weekends and public holidays are not counted in the 43 weeks of time to completion under the contract.
The completion time is extended by two periods of 34 days each as agreed by the parties, due to the suspension of the building works by the respondent, so the revised completion time end date is 17 December 2019.
Further extensions of time are also claimed by the respondent for late payment of Invoice NX0525 (74 days late) albeit no notice was issued, NX718 (16 days late) albeit no notice was issued, NX753 (67 days late) where a notice was issued but the respondent claims more than the 34 days agreed by the applicant, and NX813 (113 days late or at best 56 days late) where a notice was issued but the respondent claims more than the 34 days agreed by the applicant. The respondent also claims for 41 days of “inclement weather” for various days and periods between mid-September 2019 through to mid-November 2019 and provided Bureau of Meteorology records to justify these.[25]
[25] Respondent’s final submission and timeline of events dated 7 July 2021; Respondent’s response dated 9 December 2020
The respondent contends that a notice is not required to be issued by the respondent to the applicant under the contract for an extension of time to be claimed, rather the entitlement to an extension of time occurs with the occurrence of any of the events set out in clause 22(1). The respondent summarised its argument as follows:
[T]he extension to the date for completion operates if those events occurred [in clause 22.1]…and even if there was a requirement to provide notices subsequently, and this didn’t happen, what the courts are telling us is the time should be extended in any event by virtue of those events.[26]
[26] Transcript of proceedings 7 July 2021, page 58
The respondent claims that on the basis of all its extensions of time claims – the agreed 68 days and the disputed days – the completion time was extended significantly, by up to 311 days in total. The completion time end date was 15 February 2021 i.e. 311 work days after what it contends was the initial completion time of 11 September 2019 and the calculation excludes the two industry shutdowns over Christmas 2018-2019 and 2019-2020 and public holidays.[27]
[27] Respondent’s final submission and timeline of events dated 7 July 2021 page 1; Transcript of proceedings 7 July 2021, pages 20-22
The respondent claims that the practical completion date is 5 March 2020 when inspection occurred, and the PCI note prepared by the site supervisor was issued which lists any minor defects.[28] In any case the ‘Certificate of Occupancy’ issued on 28 July 2020,[29] which followed an application signed on 24 July 2020 by the applicant that acknowledges the works are completed, so the respondent claims that the date of practical completion cannot be later than 28 July 2020.[30]

Law

[28] Respondent’s material dated 12 April 2021 pages 4, 63; Transcript of proceedings 7 July 2021, page 21; Transcript of proceedings 7 July 2021, page 21
[29] Respondent’s material dated 12 April 2021 page 82
[30] Transcript of proceedings 7 July 2021, page 21

Relevant cases about extension of time claims are summarised below.
In Turner Corporation Ltd (In Provisional Liquidation) v Co-ordinated Industries Pty Ltd and Ors (1994) 11 BCL 202 (the Turner case) the NSW Supreme Court found against a builder who claimed liquidated damages from the principal in a development due to delays caused by the principal. The court found that the completion time had been extended beyond the initial date by agreement, and that the builder had not proved that the delays of the principal delayed the builder in completing on time. It considered the authorities and stated: “the principal’s action must cause ‘actual’, as opposed to potential delay” and “one must determine, as a matter of fact, what the overall effect of the action of the principal was”, for example, did it result in some delay or does it account for all the delay.
In Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd and Ors (1996) 12 BCL 317 (the ADC case), Australian Development Corporation Pty Ltd (the developer) claimed that White Constructions (ACT) Pty Ltd and Ors (the builder) had not met the required completion time under the contract. The builder claimed extensions of time for obtaining building approval, geotechnical revisions, industrial disputes, and bad weather. The developer contended that notice had not been given as required under the contract so extensions of time could not be claimed, and the NSW Supreme Court agreed on this point relying on various authorities for this decision. Also, the court found that the builder had not proved that the various grounds for delay in fact caused a delay in the completion date. The contract in that case allowed the completion time to be extended, it set out a list of the allowable causes of delay and stated that within 30 days of when the builder reasonably believes that a delay has occurred it shall notify the developer of this and various related information, and then the developer would determine the time by which the completion time has been extended. The contract did not state that a failure to give a notification would prevent a later claim for delay, however the court in this case found that it did.

In Kane Constructions Pty Ltd v Sopov [2005] VSC 237 (the Kane case) the court considered numerous extensions of time claims made by Kane, who had been contracted to do works on a disused boiler house. It applied an approach set down in the UK Court of Appeal case of McAlpine Humberoak Ltd v McDermott International Inc (No 1) (1992) 58 BLR 1 and found that the claimant carried the burden of proof to establish actual not potential delay, and what was required was analysis of the facts to ascertain whether and how a particular event had the effect of delaying work. The court in the Kane case reviewed each of Kane’s claims on this basis and allowed a total of 56 days. The court commented that there cannot be double counting of days that cause delay, for e.g. if one day there is delay in work due to bad weather and a variation, in fact this is a one-day delay. CJ Warren stated the following about extension of time claims:
The analysis should be principally a factual one, with good records in support. The relevant events and their effect should be looked at according to the time in which they occur and in the context of the work actually going on at the time. In other words, global claims are bound to fail.
…[T]he burden of proof is on the claimant to establish actual delay. Whilst theoretical calculations…are useful tools…generally further information will be required. Whilst there may be assumptions and calculations, it is necessarily a matter of the claimant proving in the proper way that there has been actual delay such as to substantiate claims for reimbursement.[31]
[31] The Kane case at [668]-[669]
In Raj Saneja and Manju Saneja v Dynabuild Pty Ltd; Dynabuild Pty Ltd v Raj Saneja and Manju Saneja[2014] NSWCATCD 84 (the Dynabuild case) the NSW Civil and Administrative Tribunal found in favour of the homeowners. An issue in the case was a claim by the homeowners for liquidated damages under the contract due to the builder completing late; the builder cross-claimed for damages based on delay and variation claims against the homeowners.[32] The homeowners claimed that the builder did not comply with the contract in that he did not notify the homeowners of any delays. The builder claimed that there was no time bar to a claim under the extension of time clause in that contract, regardless of when the builder became aware of the cause and extent of the delay.[33] The appeal tribunal found that the delay being considered in that case was “squarely under the control of the builder”.[34] On the issue of whether notices had to be served by the builder to make an claim extension of time, the appeal tribunal stated that deciding this issue was only necessary if cause and quantum was first established.[35] Regarding cause, the appeal tribunal relied on various authorities including the Turner case summarised above and found that the builder had to prove “actual as opposed to potential delay”[36] caused by the delaying events, and that in this case the evidence was “general in nature” and did not meet the “established requirements” of proof.[37]
[32] The Dynabuild case at [3]-[4]
[33] The Dynabuild case at [74]
[34] The Dynabuild case 84 at [83]
[35] The Dynabuild case at [101]
[36] The Dynabuild case at [109]
[37] The Dynabuild case at [108]-[110]
In Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151 (the Probuild case) which the respondent Burbank Australia Pty Ltd cited, the NSW Court of Appeal confirmed a decision of an adjudicator who acted under the contract in that case, such that the head contractor, Probuild, was not able to claim liquidated damages against the sub-contractor/builder, DDI, for delays in the completion time. The court found that the prevention principle “applies to delays in practical completion caused by variations resulting from the act or default of the principal [in this case Probuild]”, that the operation of this principle can be modified or excluded by contract but was not excluded in this case, and that despite the builder, DDI, failing to claim an extension of time available to it under the contract it was open to the adjudicator to find that Probuild had engaged in acts of prevention that caused delays and so Probuild was not entitled to liquidated damages.[38] Under the contract Probuild had a reserve power to grant an extension of time but chose not to; the court found that it had a duty to act honestly and fairly in exercising this power and that it “it ought to have extended the date for practical completion”.[39] The court referred to various authorities and set out the prevention principle as follows: “a party cannot insist on the performance of a contractual obligation by the other party if it itself is the cause of the other party’s non-performance…[and the principle] may be regarded as a particular manifestation of the obligation to cooperate implied as a matter of law in all contracts”.[40]
[38] The Probuild case at [115], [117]
[39] The Probuild case at [139]
[40] The Probuild case at [114]
The applicant cited the case of Tosolini & Ors v Temperate Living Pty Ltd ACN 125 472 862 [2020] ACAT 94 (the Tosolini case). In that case the tribunal found that a builder was liable for liquidated damages under a residential building contract. The builder had not issued any notices to extend time because he did not think he was required to if the owners caused some or all of the delay. The builder argued that the prevention principle applied and was grounds for dismissing the owners’ claim for liquidated damages. However, the Tribunal reviewed the caselaw and found that the prevention principle did not apply in cases such as that one where a contract provides a mechanism for the contractor to claim an extension of time for delays caused by the owner and where the owner has no reserve power to grant an extension of time (in contrast to the contract in the Probuild case). The tribunal quoted Cole J in Turner Corporation Ltd (Receiver & Manager Appointed) v Austotel Pty Ltd (1997) 13 BCL 378 at pages 384-385 as follows:
If the Builder, having a right to claim an extension of time fails to do so, it cannot claim that the act of prevention which would have entitled it to an extension of time for Practical Completion resulted in its inability to complete by that time. A party to a contract cannot rely upon preventing conduct of the other party where it failed to exercise a contractual right which would have negated the effect of that preventing conduct.

Findings

1) Initial completion time end date is 30 July 2019

The parties agree that the building works started on 2 October 2018. The parties agree that the initial time to complete was 43 ‘weeks’, not 43 ‘days’. The agreed correction is to the word ‘days’, which is replaced with the word ‘weeks’. There is no definition of ‘weeks’ in the contract so the ordinary meaning in various dictionaries applies, i.e. it is a period of seven days. Therefore, the completion time is calculated by counting 43 weeks from 2 October 2018, with no allowance required to be made under the contract for weekends or public holidays.
The respondent claims a Christmas shut down for a time period relevant to this issue, being 24 December 2018 – 25 January 2019. The respondent contends that it did not need to issue a notice because it was already allowed for under clause 22(1).[41] The Tribunal agrees that no notice was required for the Christmas shut down to occur. However, where it is the basis of an extension of time to complete, as in this case, then a notice is required – see the reasons for this finding in 2) below.
[41] Transcript of proceedings 7 July 2021, page 34
In any case, the Tribunal finds that this Christmas shut down period was allowed for in the agreed initial completion time. The contract was signed on 26 March 2018 and it was agreed by the parties that the building works would take nearly a full year. In the Tribunal’s view a competent builder would have factored in this known Christmas shut-down period to the completion time when agreeing to the contract. Mr Shrimpton, the construction manager for the respondent, agreed when questioned about assessing the time to complete under a contract that this is taken into account.[42]
[42] Transcript of proceedings 7 July 2021, page 49
Another basis for dismissing the respondent’s claim for an extension of time for the 2018-2019 Christmas shutdown is that there is no evidence that this Christmas shut-down period did actually delay the building works. As set out in the caselaw above, particularly the Turner and Kane cases, the respondent has the onus to prove that the shut-down period caused actual delay for example providing records of the building works. The respondent failed to meet this standard of proof.
On this basis the Tribunal dismisses the respondent’s claims about the initial completion time end date and accepts the applicant’s claim that the initial completion time end date under the contract was 30 July 2019 i.e. 43 weeks after the date that building commenced being 2 October 2018 to 30 July 2019 with no adjustment required to be made for weekends, public holidays, or a Christmas shutdown in 2018-2019 under the contract.
2) Respondent’s additional claims for extensions of time are not allowed
Prevention Principle does not apply in this case
The respondent contends that the applicant is prevented from being awarded liquidated damages because he caused the delays, relying on the prevention principle. Under clause 22 of the contract, the respondent builder had a mechanism to claim an extension of time and the owner did not have a reserve right or mechanism to otherwise allow an extension of time. Given this, the Tribunal finds that the contractual terms in this case are such that the prevention principle does not apply. In making this finding the Tribunal relies on extensive supporting caselaw including the cases of Probuild and Tosolini summarised above.
Notice was required for an extension of time claim to be allowed
The Tribunal finds that notices were required to be issued by the respondent to claim extensions of time under the contract. The Tribunal’s reasoning is set out below. The evidence is that no notices were issued by the respondent for the disputed extension of time claims, only for the two extensions of time agreed by the applicant. None were issued for the alleged bad weather events, or for either of the Christmas shut down periods of 2018-2019 and 2019-2020, or for the disputed claims related to late payment of invoices. Therefore, the disputed claims for extensions of time claimed by the respondent are dismissed.
The Special Condition amends the key clause, clause 22(2), as set out above. The main consequence of this amendment in the Tribunal’s view is that the specific time requirement, to issue the notice “within 5 days of becoming aware” of it, is removed. Under the amended clause 22(2) the builder “must” issue a “written notice” about an “entitlement”, being a delay caused by events in clause 22(1), and the notice will detail the cause of the delay and the extension of time. While the amended clause 22(2) includes the words: “At the completion of the building works, The Bureau of Meteorology reports will be used to justify inclement weather”, these words do not change the meaning of the other words in the Tribunal’s view, they simply set out how ‘inclement weather’ is justified where claimed – where inclement weather is the basis of a claim for an extension of time then the builder must prove “bad weather conditions that affect the building works” and that they “delayed” them, under clause 22(1).The heading that applies to the amended clause 22(2) remains unamended: “Delays and Extension of Time”, and the sub-heading remains unamended “procedure for an extension of time”, supporting the finding that clause 22(2) as amended is the procedure for an extension of time claim to be made under the contract.
The amended clause 22 must be read as a whole. Clause 22(3) remains unamended and sets out how “cost of an extension of time” is claimed by the builder. It states that the builder “must include this amount [i.e. the cost of the extension of time] in the next progress payment”. If the Tribunal were to accept the respondent’s contention that an extension of time notice serves no purpose, that it can be issued “at the end of the contract, not a precursor, or in real time to when these events are occurring” or indeed not at all,[43] then this would mean that a homeowner could receive a progress payment that shows a new cost related to an extension of time that the homeowner has no prior notice or details of. In the Tribunal’s view, clause 22 read as a whole allows for a progress payment to include an allowable cost related to an extension of time on the basis that it has been notified to the homeowner in accordance with the amended clause 22(2) before any such progress payment has issued. In the ADC case the Giles CJ of the NSW Supreme Court considered a line of authorities that confirm the mandatory requirement of giving notice where payment for extra work was claimed, so that the other party is “alerted to the proposed claim… given the opportunity to investigate and check…and that where applicable it would operate as a bar”.[44] In this case, the respondent claimed no extra cost due to the extensions of time. Nonetheless, clause 22(3) coupled with relevant authorities and considering clause 22 as a whole, provides further support for finding that the builder was required to issue a notice for any extension of time claim under the contract. The Tribunal further finds that the notice must be issued by the builder within a timeframe that does not remove all chance of the other party being able to check it and respond as necessary under the contract, i.e. a reasonable timeframe albeit not within five days.
[43] Transcript of proceedings 7 July 2021, page 34-35
[44] The ADC case at [45]
Considering the authorities summarised above on this issue, the equivalent clauses in these cases differ to the amended clause 22 in this case. However, some general points can be derived from the authorities relevant to interpreting this contract. The respondent stated that it did not dispute that a notice about an extension of time is required and acknowledged that not issuing it may be a breach of the contract and may attract damages; but it contended that it is not a precondition to an entitlement to the extension of time.[45] In the Tribunal’s view this is not supported by the authorities. In the ADC case the NSW Supreme Court favourably referred to authority that found that it is not “satisfactory to leave the [homeowner/proprietor] with an action for damages if the contractor failed to give timely notice, and failure to give notice was destructive of an entitlement to recover under the [extensions of time clause]”.[46] The respondent contends that clause 22(1) does not expressly state that a notice must be given for an extension of time claim to be made under the contract and therefore notice is not a pre-cursor for such a claim to be made out.[47] However, the NSW Supreme Court in the ADC case favourably referred to authority where the notification by the builder was found to be mandatory even though the relevant clauses did not expressly state that the completion time would not be extended unless timely notification was given.[48]
Bases for disputed extensions of time claim are not proved to have caused delay and end dates for the two agreed extensions of time are 10 December 2019 and 2 July 2020
[45] Transcript of proceedings 7 July 2021, page 26
[46] The ADC case at [45]
[47] Transcript of proceedings 7 July 2021, page 57
[48] The ADC case at [47]
The applicant contends that unless the respondent can prove that the events caused a delay in the building works then they are not valid.[49] The Tribunal agrees. Under clause 22(1) the events listed are the basis of an extension of time claim if they caused the building works to be delayed. The cases summarised above, in particular Turner and Kane, are clear that the onus is on the respondent to prove each of the extension of time claims, and also that the delay must be proven to be actual which involves analysis of the facts not just theoretical calculations, for example, analysis of proper building records. The Tribunal finds that the respondent has not met this standard of proof and it dismisses the disputed extensions of time claims.
[49] Transcript of proceedings 7 July 2021, page 23
The respondent acknowledged during the hearing that in relation to some of its extension of time claims there was not much evidence about the “reality of what happened on site”.[50] In the Tribunal’s view, to make out its claims the respondent required evidence to show whether and how an event caused a delay. The Tribunal reviewed what evidence there was of this. Mr Shrimpton, construction manager for the respondent, made a statement and gave oral evidence. However, the Tribunal finds that his evidence was high-level and imprecise, and not helpful in understanding whether and how the relevant events impacted the timeline for the building works.
[50] Transcript of proceedings 7 July 2021, page 32
The respondent claims an extension of time for a second Christmas shut-down from 23 December 2019-24 January 2020. No extension of time notice consistent with the contract was issued for the 2019-2020 Christmas shutdown period, and there is no evidence that the 2019-2020 Christmas shutdown actually delayed the building works as clause 22 requires. Therefore this claim for an extension of time is dismissed, as was the extension of time claim for the 2018-2019 Christmas shutdown as set out earlier.
In relation to the extension of time claims for bad weather, there is no evidence that the alleged bad weather affected the building works and caused a delay. On the contrary, many of the bad weather days and periods claimed by the respondent overlap with periods when the building works were suspended which suggests that they could not have affected or delayed the building works because the works were temporarily stopped, for example 16 days of alleged bad weather occurred during the first suspension period in October and November 2019. Finally, the evidence of the bad weather is not coherent – the best evidence is Bureau of Meteorology 2019 rainfall records for Nicholls, filed by the respondent, however the higher rainfall dates shown there do not align well with the days and periods claimed for bad weather.[51]
[51] Respondent’s response dated 9 December 2020, attached Bureau of Meteorology records
In relation to the significant number of days claimed for various late payments of invoices, the Tribunal finds that the respondent has not proved to the standard required that these omissions by the applicant caused actual delay in the building works. Further, the applicant contests the respondent’s account of payment dates of many of these invoices, and in the absence of corroborating evidence by the respondent the Tribunal cannot confirm late payment by the applicant of any invoices except those related to the two notices to extend time.
There are two extensions of time due to suspensions of the building works that are agreed as set above, however the end date for these are not agreed. In regard to the first suspension and related extension of time, the relevant notice states that it is based on non-payment of an invoice and the applicant agrees that he did pay this invoice late. The Tribunal has no corroborating evidence of when the building works in fact resumed. The respondent contends that it was on 17 December 2020 when the applicant paid the invoice.[52] However, the respondent’s invoice NX0803 dated 29 May 2020 shows interest for the relevant late payment ended on 10 December 2019 which is evidence that it was paid on that earlier date.[53] On this basis the Tribunal finds that the suspension and the related extension of time ends on 10 December 2019 as the applicant claims.
[52] Respondent’s final submission and timeline of events dated 7 July 2021
[53] Applicant’s material in chief, dated 16 March 2021 page 77

In regard to the second agreed suspension and related extension of time, the relevant notice states that it is due to a “contract dispute”.[54] The respondent claims that this extension of time is based in part on the failure of the applicant to pay invoice NX0813 when due, and that this invoice was not fully paid until much later than 34 days after it was due – it claims that it was paid at best 56 days after it was due (i.e. the invoice was first issued on 22 April 2020 and a part-payment was made on 10 July 2020), and at worst when it was fully paid 113 days late.[55] The applicant contends that the extension of time ended on 2 July 2020 given the contents of its letter to the respondent dated 25 June 2020 and that it is not disputed that the building works in fact resumed on that date.[56] The Tribunal finds that the suspension and the related extension of time ended on 2 July 2020 as the applicant claims because the building works resumed on that date.
[54] Respondent’s response dated 9 December 2020, attachment ‘Notification of Extension of Time’ dated 15 May 2020
[55] Respondent’s final submission and timeline of events dated 7 July 2021
[56] Applicant’s application 24 July 2020, page 9; Respondent’s final submission and timeline of events dated 7 July 2021
In regard to the respondent’s contentions, it is not disputed that the initial invoice NX0813 was incorrect and it was re-issued on 29 May 2020 with the correct amount of interest payable shown, and in the Tribunal’s view any delay in payment cannot be earlier than 29 May 2020.[57] It was not disputed that a substantial part-payment of this revised invoice was made by the applicant on 10 July 2020 and that the remainder of the invoice was not paid at that time – however, the Tribunal finds that this does not justify extending the suspension, it was not paid because it was claimed by the applicant as an off-set for liquidated damages and the applicant had requested dispute resolution under clause 26 of the contract which was the appropriate mechanism under the contract for such a dispute.[58] The Tribunal finds that what is determinate of the end of the extension of time in the case of a suspension in this case is the date when the building works in fact resumed; once building works are resumed it is hard to see how the suspension can be said to cause a delay as required under clause 22. It is not disputed that the suspension in fact ended on 2 July 2020, and indeed that the respondent progressed the building works somewhat such that an occupancy certificate was obtained on 28 July 2020.[59]
3) Actual completion time end date (i.e. date of practical completion) under the contract was 28 July 2020
[57] Applicant’s application 24 July 2020 pages 1, 5-7
[58] Applicant’s application 24 July 2020 pages 8-9
[59] Respondent’s final submission and timeline of events, dated 7 July 2021
Under the contract, completion time ends when practical completion is achieved being the date when the builder certifies it has done everything apart from minor omissions to obtain a certificate of occupancy. Under the contract, at practical completion the respondent must issue a notice of practical completion and the final progress claim, the owner and the builder must meet together to inspect the building works, and if relevant the owner must give the builder a written and signed list of any work required by the contract which the owner claims is defective or unfinished.
The applicant contends that there was no ‘Notice of Practical Completion’ issued by the respondent and that the email from the respondent’s legal representative dated 18 August 2020 is the best evidence of when practical completion was achieved. The Tribunal agrees that in this case there was never a ‘Notice of Practical Completion’ issued by the respondent and therefore the date must be determined by analysing the circumstances of the case. The respondent contends that the PCI note by the respondent’s site manager dated 5 March 2020 is the ‘Notice of Practical Completion’. The respondent contends in the alternative that the form to apply for the certificate of occupancy dated 24 July 2020 (the form) given it was signed by the applicant, or the certificate of occupancy dated 28 July 2020 at the latest, is evidence of the date of practical completion. The Tribunal finds that the date of the certificate of occupancy, 28 July 2020, is the date of the practical completion.
The PCI note is not titled as a ‘Notice of Practical Completion’ and in the form of a list of minor defects – on this basis the Tribunal cannot accept the respondent’s contention that it was intended to be the ‘Notice of Practical Completion’. It is clear that the applicant did not agree to this list of minor defects in that he commissioned the Gray Report dated 9 April 2020 – this report was done in compliance with the relevant standards for pre-settlement inspections and it found that there was significant “unfinished building work”, not just minor defects.[60] The respondent did not request that Mr Gray attend for cross-examination and the Tribunal therefore accepts the contents of the Gray report. The Tribunal finds that the date of practical completion could not have been earlier than the date of the Gray report given the building works were unfinished on that date. The building works were suspended from 15 May 2020 to 2 July 2020 so no progress could have been made in this time to address the unfinished building works identified in the Gray report. There is no evidence before the Tribunal about exactly when the unfinished building works identified in the Gray report were completed by the respondent or otherwise resolved between the parties. The respondent contends that if the date of the PCI note, 5 March 2020, is not accepted as the date of practical completion, then the form to apply for the certificate of occupancy dated 24 July 2020 given it was signed by the applicant or the certificate of occupancy dated 28 July 2020 at the latest, is the date of practical completion. The Tribunal agrees with the respondent’s latter contention. The form makes it clear that the applicant should not sign it unless the building works are complete. Also, the covering letter sent with the form to the respondent makes it clear that the applicant signed the form “in an effort to complete the contract and to end liquidated damages in the meantime” [emphasis added]. While the applicant was undoubtedly in a difficult situation, on the basis of the reasons set out above the Tribunal finds that the date of practical completion was the date when the form was accepted and occupancy was certified ie the date of the occupancy certificate 28 July 2020.
4) Liquidated damages are payable
[60] Applicant’s material in chief 16 March 2021 pages 67-68
Liquidated damages are paid at the rate of $300/week, calculated on a daily basis i.e. $60/day, and the period of time for calculating liquidated damages excludes weekends and ACT public holidays as per the definition of ‘day’ under the contract.
The initial completion time was 30 July 2019 so calculation of liquidated damages starts on 1 August 2019, the actual completion time (practical completion) date is 28 July 2020 so calculation of liquidated damages ends on 27 July 2020. There are two periods of extension of time allowed of 34 days each i.e. 68 days in total. No other extensions of time are allowed under the contract.
The building works were completed 247 working days after the 1 August 2019 (i.e. the day after the initial time to complete), having completed on 27 July 2020 (i.e. the day before the date when occupancy was certified). Allowing for the two extensions of time of a total of 68 days, the works were completed 179 days late.
Liquidated damages are therefore $10,740 (i.e. 179 x $60), plus interest as calculated on this sum from 24 July 2020 to the date of the Order being $523.45, plus re-imbursement of the filing fee and search fee sub-totalling $593.75.
The total payable by the respondent to the applicant is: $11,857.20.
………………………………..

Senior Member L Beacroft

Date(s) of hearing	7 July 2021
Solicitors for the Applicant:	Mr G Mansfield, O’Connor Harris & Co
Solicitors for the Respondent:	Mr D Vaughn & Ms V Mitsopoulos, HWL Ebsworth