Casewatch Index

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Casewatch publications are intended to be a topical report on recent court cases in the construction, development and project industries.

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  Adjudication
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Contract & Tort

The Owners Strata Plan 98726 v Elite Realty Development Pty Ltd (No 3)
This case demonstrates the basics of how the courts approach compensation for defects and is useful as a reminder to contractors and builders to remain aware of trial awards, as well as the potential expenses.
[View Casewatch PDF]

The Owners Strata Plan No 64757 v Sydney Remedial Builders Pty Ltd
This NSW Court of Appeal judgement demonstrates the importance of statutory time limitations on bringing a case to court, and how regardless of the contractual expression of completion or practical completion, delay can erode your rights.
[View Casewatch PDF]

Martinus Rail Pty Ltd v Qube Re Services (No 2) Pty Ltd
This case provides a basic breakdown of how courts approach a Principal's entitlements to draw on unconditional Bank Guarantees and Undertakings, and highlights the way contractual wording can affect those rights by distinguishing whether the contractual regime is intended to provide security or a risk allocation device, or both.
[View Casewatch PDF]

Parkview Constructions Pty Ltd v Futuroscop Enterprises Pty Ltd
This case demonstrates the Court's Powers to step in and decide dates for practical completion where contractual processes are not followed with precision. It also highlights the importance of proper documentation in contract administration.
[View Casewatch PDF]

V601 Developments v Probuild Constructions (Aust)
This decision of the Victorian Supreme Court highlights the conflict of interest issues for Superintendents or other entities carrying both assessment and certification and contract administration roles.
[View Casewatch PDF]

Electricity Networks Corporation v Herridge Parties
This decision suggests that a statutory authority may have a duty of care for all relevant systems within their control even when the work is contracted to a third party; particularly where they have ‘stepped into the arena’ in exercise of their duties.
[View Casewatch PDF]

Westgem Investments -v- Commonwealth Bank
This case highlights two important issues. The definition of practical completion can vary between different agreements for the same project (in this chase the building head contract and the overall finance agreement). Cost overruns do not need to realized to allow action to be taken, the finance contract was terminated based on a forecast cost overrun calculated from the actual costs to date plus forecast costs to complete.
[View Casewatch PDF]

Thiess v Mirvac
This case confirms that the contractor bears the risks of achieving contract performance even if performance becomes significantly more costly or difficult than expected. From the contractor's perspective, it is important to avoid unconditionally agreeing to discharge uncertain obligations.
[View Casewatch PDF]

Lanskey Constructions v Westrac
This case shows the courts reluctance to prevent a party holding bank guarantees from calling on them to offset a claimed debt (provided the alleged debt is reasonable), and the recognition of Bank guarantees as an important commercial mechanism to mange risk in construction.
[View Casewatch PDF]

CFMEU v Personnel Contracting Pty Ltd
This High Court judgement highlights the difference between an employee and an independent contractor, see also ZG Operations Australia Pty Ltd & Anor v Jamsek & Ors [2022] HCA 2.
[View Casewatch PDF]

Turner v Perth Block & Bricklaying Pty Ltd
This case highlights the importance of professional standards. Simply following a defective specification will not absolve a builder from its professional responsibilities.
[View Casewatch PDF]

Key Infrastructure Australia v Bensons Property
This case serves to underscore the requirement for parties seeking to rely on the prevention principle, to establish that the party was actually prevented from completing their responsibilities under the contract.
[View Casewatch PDF]

Bedrock Constructions v Crea
This case reinforces the primacy of the contract in determining disputes in construction matters; and that the right to claim damages for the rectification of defects is governed by the contract terms which permit access for rectification. It is also important for a party to plead its case in the most favourable manner to obtain the full benefit of the contractual protection..
[View Casewatch PDF]

Brighton Australia Pty Ltd v Multiplex Constructions
The case highlights the approach recently taken by the Victorian Supreme Court of Appeal when assessing claims under the s.18 of the Australian Consumer Law (ACL) regarding express representations made within a Building and Construction Contract. This case highlights the Courts restrictive approach in interpreting contracts that attempt to limit a party’s rights under the ACL.
[View Casewatch PDF]

Stepanoski v Aslan
The New South Wales Supreme Court deciding which Construction Contract is in existence and binds the party in the situation where a Cost-Plus contract was in existence, and the parties’ executed a lump sum contract some months later and backdated it to the date of the Cost-Plus Contract.
[View Casewatch PDF]

Mann v Paterson Constructions Pty Ltd
The Victorian Supreme Court of Appeal decision on a claim made in quantum meruit as a result of one party accepting the repudiation of contract made by the other party. The Court will have regard to actual costs when assessing the amount payable, however is not bound by the actual cost under contract, as the contract has ceased. In addition, the case further highlights that claims in quantum meruit for variations are not precluded under s.38 of the Domestic Building Contracts Act 1995, where the variation is one that has been agreed to orally.
[View Casewatch PDF]

Champion Homes v Commissioner for Fair Trading
The case highlights the strict disciplinary liability upon the Builder in relation to the work of its subcontractors.
[View Casewatch PDF]

Liquidated damages - overview
A brief summary of the differences between 'liquidated damages' and unenforceable penalty clauses in contracts.
[View Casewatch PDF]

Metricon Homes v Hooper
Metricon failed in its bid to overturn a VCAT damages award over damage to a Tarneit house from slab-heave caused by a poorly constructed concrete slab.
[View Casewatch PDF]

Mushroom Composters v Robertson
This case from the NSW Court of Appeal highlights the importance of identifying in a contract all essential terms as finally agreed in order to avoid the contract being unenforceable.
[View Casewatch PDF]

Haridemos v Labathas
The ACT Supreme Court has determined that when deciding whether an appointed person is an expert to make his expert determination or an arbitrator to make his award, the Court will look at the function, decision, and facts such as: the words used, the requirement stated in the Deed, and the qualification of the appointed person. The Court concluded that the parties agreed to appoint an expert. As a result, it was held that the Court does not have jurisdiction to hear an appeal from an expert determination.
[View Casewatch PDF]

Koompathtoo Local Aboriginal Land Council v Sanpine Pty Limited
Koompathtoo were able to establish that the number of breaches of non essential contract terms by Sanpine were many and their consequences serious. The termination of the contract was justified as the breaches deprived Koompathtoo of a substantial part of benefit for which it contracted.
[View Casewatch PDF]

The Owners - Strata Plan No 76674 v Di Blasio
The News South Wales Supreme Court recently expounded on the duty of a building owner to “act reasonably” in mitigating the losses suffered by it as a result of a builder’s breach of the building contract. In so doing, the Court looked into the parties’ conduct in assessing whether the building owner provided the builder with a “reasonable opportunity” to rectify building defects and whether the builder may be considered to have failed in taking “reasonable steps” to undertake rectification of the defects.
[View Casewatch PDF]

Electricity Generation Corporation -v- Woodside Energy Ltd
Verve Energy (the buyer) and Woodside (the seller) were parties to a long term gas supply contract which required Woodside to “use reasonable endeavours” in order to make additional gas available subject to all of their relevant commercial imperatives. But was is interpretation of the “reasonable endeavours” clause?
[View Casewatch PDF]

Crown Melbourne Limited v Cosmopolitan Hotel
Cosmopolitan were tenants of Crown Melbourne and their leases did not contain an option to renew. Cosmopolitan contended that landlord gave them oral assurances that if they undertook major refurbishment works they would be ‘looked after with a further term’ and soon after the refurbishment they received a notice to vacate. Was the oral assurance enforceable?
[View Casewatch PDF]

McCloy v Manukau Institute of Technology
The New Zealand High Court has recently clarified the effect of “step in” clauses which are sometimes found in construction contract default clauses or in tripartite deeds. Parties should be vigilant to register their interests on the Personal Properties Securities Register.
[View Casewatch PDF]

Verve Energy -v- Woodside Energy Ltd
The Western Australian Court of Appeal provides clear guidance regarding “reasonable endeavours” clauses in the context of the contract and the importance of those obligations.
[View Casewatch PDF]

Perpetual_Trustee-v-CTC Group (No 2)
The New South Wales Court of Appeal decision has recently demonstrated a firmer approach to the exclusion of the apportionment provisions of the Civil Liability Act 2002 which has significant implications for contract managers when settling the terms of a construction or other contract.
[View Casewatch PDF]

Leighton v Arogen
The New South Wales Court of Appeal decision has recently demonstrated that the Court is reluctant to grant mandatory interlocutory relief but will do so if necessary on the balance of convenience factors.
[View Casewatch PDF]

North Sydney Leagues Club v Syndegy Protection Agency
The New South Wales Court of Appeal has recently reaffirms the principle that in the event of a contract being wrongfully terminated, the plaintiff is entitled to such damages that would place them in the same position as it would have been had the contract been preformed. Claims should be carefully calculated to give full legal recovery.
[View Casewatch PDF]

Spiers Earthworks v Landtec Projects
The Supreme Court of Western Australia has recently reaffirmed that liquidated damages may be void as penalties. If challenging a liquidated damage clause a full review of the circumstances at the time the contract should be conducted.
[View Casewatch PDF]

Precision Coating Services v Building Equipment Services
The New South Wales Supreme Court has recently confirmed that a finding based on no evidence constitutes an error of law. Contract Managers should ensure that even the obvious is fully proved.
[View Casewatch PDF]

Machkevitch v Andrew Building Constructions
The New South Wales Supreme Court has recently confirmed that construction contracts include any arrangement which gives rise to an obligation to pay for construction work.
[View Casewatch PDF]

McGrath Corporation Pty Ltd V. Global Construction Management Pty Ltd & Ian Vincent Taylor
The Supreme Court of Queensland recently held that a project manager who was late in reporting non performance of a subcontractor to a principal was 50% responsible for the resulting loss and expense. Project Managers should be careful to fully document the warnings given to their principals to avoid the meltdown if things go amiss later.
[View Casewatch PDF]

Laing O'Rourke (BMC) Pty Ltd -v- Kirwin
The Western Australian Supreme Court has recently confirmed the duty of employers to take all practicable steps to protect employees but declined to expect design checks on principal supplied accommodation. This realistic approach continues the trend and comments adopted in Kirk’s case (below) and comes as a relief to employers trying to develop realistic safety programs.
[View Casewatch PDF]

2144 Broke Road v ACN 062 859 358 (previously Austec Panel Systems Australia Pty Limted)
The Supreme Court of New South Wales has recently examined the range of damages which a plaintiff may claim as part of its loss and the effect of not notifying a party to a contract of the potential loss. This case illustrates it is important to ensure the other party is aware of the potential losses if the other party breaches the contract and will have immediate impact on the way in which parties to agreements put one another on notice of the potential loss in order to preserve their rights in the event of a claim.
[View Casewatch PDF]

Kell & Rigby Holdings Pty Limited v Lindsay Bennelong Developments Pty Ltd
The Supreme Court of New South Wales has recently examined the impact of a Superintendent’s conduct when it may be considered as unfair to the contractor, and consequently impact on contractual rights of the Principal. This case will have immediate impact on the way in which contract administrator’s and superintendents interact and administer their contracts. Careful advice is necessary before acting in the interests of the Principal only.
[View Casewatch PDF]

Kirk v Industrial Relations Commission
The High Court of Australia has recently made a major statement on the appropriate approach to be taken to the onus of proof for industrial and other offences and eased what has been a substantial burden on employers in the past. This case will have immediate impact on the way in which prosecutions under the OH&S legislations are conducted, as well as the range of cases which are likely to be prosecuted by the relevant authorities.
[View Casewatch PDF]

Costain Limited v Charles Haswell & Partners Pty Limited
The England and Wales High Court has recently examined a contractor’s entitlement to seek reimbursement for prolongation costs incurred by it as a result of failed engineering advice. Whilst the Court was satisfied that there was a likely delay as a result of Haswell’s advice, it was not satisfied that Costain satisfied the tests required to establish an entitlement to general site overheads as prolongation costs.
[View Casewatch PDF]
For more detailed consideration, see: Assessing Delay and Disruption - Tribunals Beware.

Strata Plan v Reed
The New South Wales Supreme Court has recently confirmed the application of the Home Building Act (1989), and the statutory warranties provided for by that statutory regime, as being applicable to subsequent owners of properties falling within the scope of that Act. This case will have immediate impact on builders who need to be aware of the scope of their liability and warranties provided in respect of their work.
[View Casewatch PDF]

Southern Cross Constructions v Salfa
The New South Wales Supreme Court has recently examined examined a contractor’s rights to secure payment under a building contract, which might otherwise have not been possible due to the restrictions provided under the Home Building Act 1989. This case will have immediate impact on those procuring and securing payment for building work on residential dwellings, in these tough times.
[View Casewatch PDF]

Roluke v Lamaro
The New South Wales Supreme Court has recently examined the heads of damages which a party may claim in respect of a diminution in market value by reason of faulty workmanship and found that the Courts may allow for an additional head of damage, namely, diminution in market value to the structure where a nexus can be shown between the defective workmanship and the reduced market value.
[View Casewatch PDF]

Dualcorp v Remo
This case illustrates that where a contract provides for a vague procedure for dispute resolution (through a poorly drafted dispute resolution mechanism), the Courts are not willing to allow an obscure and uncertain clause to operate to exclude the jurisdiction of the Court, particularly in circumstances where the clause on its interpretation is not reflective of the parties’ apparent intentions.
[View Casewatch PDF]

Lumbers v Cook
This case demonstrates the traditional position that in normal circumstances a subcontractor will have no claim against a property owner for work done on the property. If the subcontractor wished to have payment secured by the property owner a separate agreement or special relationship would be required.
[View Casewatch PDF]

Multiplex Constructions UK v Honeywell Control Systems
The English High Court has recently examined the entitlement of contractors to extensions of time with respect to the preventative conduct of principals and the impact of that conduct on whether time is at large. This case illustrates that careful contract administration is necessary to avoid loss of entitlement to extension of time by a contractor.
[View Casewatch PDF]

Perum Building Construction v Tallenford
This case illustrates the importance of understanding the terms of the contract, clearly defining the nature of the contract, the scope of work, and also underlines the importance of negotiation of the contract terms ensuring that there are adequate provisions to accommodate latent conditions, variations or misdescriptions.
[View Casewatch PDF]

Sweeney v Boylan Nominees
This case illustrates the importance of proper engagement of contractors in order that the principal is not vicariously liable for the contractors default. The terms of engagement should clarify the varying indicia of the independent contractor, no control over way in which the work was done, the contractor’s provision of tools, equipment, uniform, transport and payment for services rendered and whether the contractor is to be presented as part of the defendant’s organization.
[View Casewatch PDF]

Houghton v Arms
This case illustrates the reach of the Fair-Trading legislation and the remedies available against individual employees for misleading or deceptive conduct they are alleged to have performed as part of their employment. It may have interesting application to officers of a company who mislead others into trading with the company just prior to administration or winding up.
[View Casewatch PDF]

Thiess v Placer
This case stands for the proposition that good faith involves goodwill, co-operation and honesty between the parties and this extends to the reasonableness and fairness in pricing.
[View Casewatch PDF]

Royal Botanic v South Sydney
The boundaries of the duty of good faith have yet to be fully determined but the Courts expect fairness and reasonableness from the parties.
[View Casewatch PDF]

John Holland v Majorca
This case stands for the proposition that Architects do not owe a duty of care, and are not directly liable, to Builders under a JCC Contract.
[View Casewatch PDF]

Hughes v Air Services
This case stands for the proposition that the Courts expect a standard of fairness in contracts. A duty upon the parties of good faith and fair dealing in the performance of contracts may be implied and compliance with agreed tender process is covered by the duty.
[View Casewatch PDF]

Far Horizons v McDonalds
This case stands for the proposition that an implied duty of good faith obliges each party to a contract to exercise the powers conferred upon it in good faith or reasonably, and not capriciously or for some extraneous purpose.
[View Casewatch PDF]

Baulderstone v Qantas
This case stands for the proposition that a Superintendent must carefully consider and resolve a Contractor’s claim on its merits and must not be unfairly influenced by the Principal. Further, a construction programme is likely to be considered by the Courts as a statement of intention or expectation rather than a contractually binding timeframe.
[View Casewatch PDF]

Alcatel v Scarcella
This case stands for the proposition that a duty of good faith, both in performing obligations and exercising rights may, by implication, be imposed upon parties as part of a contract. It extends to prohibit unreasonably encouraging third parties to improve obligations on the other contracting party for factual advantage.
[View Casewatch PDF]

Kane v Sopov
This case stands for the proposition that where the Superintendent does not act fairly and independently of the Principal the Courts may determine that the Superintendent is not acting fairly.
[View Casewatch PDF]

Overlook v Foxtel
This case stands for the proposition that the duty of good faith is best regarded as an obligation not to act in bad faith.
[View Casewatch PDF]

State of NSW v Coya
This case stands for the proposition that a Principal may be liable for the Superintendent’s failure to properly consider and properly value variation claims but not to ensure he/she is always correct.
[View Casewatch PDF]

Renard v Minister for Public Works
This case stands for the proposition that reasonableness may overlap and be indistinguishable from good faith. Accordingly, in the event of a Contractor’s challenge to the reasonableness of a direction by a Principal, it is important to consider both the reasonableness of the Principal’s actions and whether the Principal was acting in good faith.
[View Casewatch PDF]

Perini v Commonwealth
This case stands for the proposition that the Courts usually imply a term into the contract that the Superintendent will act, and the Principal shall ensure that the Superintendent will act, in a fair, unbiased and competent manner.
[View Casewatch PDF]

Esso v Southern (Appeal)
This case confirms the proposition that a party may breach its duty of good faith if it acts unreasonably, capriciously, or in the pursuit of an ulterior purpose. Further, a duty of good faith is likely only to arise where a party is vulnerable or at a disadvantage.
[View Casewatch PDF]

Esso v Southern
This case stands for the proposition that the content of the duty of good faith encompasses two concepts; the prohibition of a party from exercising a contractual power capriciously or for an extraneous purpose, and the obligation to refrain from acting in 'bad faith'. See appeal aove.
[View Casewatch PDF]

ABB Power v Chapple
This case confirms the proposition that for 'the appropriate enquiry' for the purposes of determining an entitlement to quantum meruit is whether the recipient of the relevant services should have objectively realised he would be expected to pay for them.
[View Casewatch PDF]

Turner v Co-ordinated
This case confirms that for a building contract which contains a clause in the terms of clause 35.4, there is no room for the prevention principle to operate because it is, in effect, excluded by the express contractual provision.
[View Casewatch PDF]

Pavey & Matthews v Paul
This case stands for the proposition that quantum meruit is based not on an implied contract, but on a claim to restitution or unjust enrichment and arises from the acceptance of benefits accruing to one party as a result of the work done by the other. Further, the obligation to pay fair and just compensation for a benefit which has been accepted will only arise where such an agreement is frustrated, avoided or unenforceable.
[View Casewatch PDF]

Liebe v Molloy
This case stands for the proposition that if the work claimed for had been work required by the contract to be done, then the builder could not recover for it, because he had not complied with the contractual requirements. However, if the work was work which the builder was not required to do by the contract (i.e. outside the contract) then a builder may recover on the basis of quantum meruit if the employer:
(i) had actual knowledge of the extra works as they were being done,
(ii) knew that they were outside the contract, and
(iii) knew that the builder expected to be paid for them as extras.
[View Casewatch PDF]

Electronic v David Jones
This case stands for the proposition that if action is required to bring about the intended result, each party has the duty of complying with the reasonable requests made by the other to ensure the intended result is achieved.
[View Casewatch PDF]

Dunlop v New Garage
The use of the words ‘penalty’ or ‘liquidated damages’ does necessary mean that a clause is either a ‘penalty’ or a ‘liquidated damages’ clause. The Court will review the clause in light of the circumstances at the time of entering into the Contract.
[View Casewatch PDF]

Beckhaus v Brewarrina (Appeal)
Where the Contract works are defective, a Principal is only entitled to the difference between the costs incurred in rectifying the defects and the amount it would have taken to complete the works under the Contract.
[View Casewatch PDF]

Wells v Army and Navy
If the Contract does not clearly provide for an extension of time as a result of the defaulting act of the Principal, the prevention principle may be enlivened.
[View Casewatch PDF]

Turner v Austotel
The prevention principle has no application to the JCCA form of contract due to the existence of an extension of time clause entitling the Builder to an extension of time in respect of the preventative acts by the Proprietor. Further, Builders who fail to comply with the notice requirements for extensions of time may remain liable for liquidated damages while losing their right to extension of time for the acts in question.
[View Casewatch PDF]

Trimis v Mina
This case confirms the proposition that where a principal has actual knowledge of the additional or extra works, knows that they are outside the contract and knows that the builder is expecting to be paid for the works as extras to the contract, then a builder may be entitled to claim on a quantum meruit or restitutionary basis.
[View Casewatch PDF]

Peak v McKinney
This case stands for the proposition that a principal may lose the right to claim liquidated damages if some delay is due to the principal’s defaults or the defaults of its employees or agents and the contract does not provide for an extension of time in that event.
[View Casewatch PDF]

Walter v FTAC
The Trades Practices Act applies to everyone!
[View Casewtch PDF]

Stockland v Coombs
When a professional is required to undertake additional work, a percentage based remuneration may significantly under-recover the time and costs incurred
[View Casewtch PDF]

Roche v Metro
A party may affirm a contract by continuing to exercise its rights (work) under the contract after it is aware of a breach entitling it to terminate the contract
[View Casewatch PDF]

Murphy v Acumen
Practical Completion means completion for practical purposes!
[View Casewatch PDF]

Jennings Constructions v Q H & M Birt
'Time bar' clauses create a condition precedent that must be met before an entitlement to a claim can be made
[View Casewatch PDF]

Rickard Constructions & Anor v Rickard Hails & Moretti & Ors
The cause of action in tort or contract can be assigned where there is genuine commercial interest in the enforcement of the cause of action
[View Casewatch PDF]

Tan v Luxury
A construction contract will only constitute an 'entire contract' if payment is conditional on the complete performance of the contract
[View Casewatch PDF]

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