Case Authorities

Question 1

Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32

Answer 1

Reference dates under a construction contract accrue until final completion unless the contract specifies otherwise.

Question 2

KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd & Ors [2019] QSC 178

Answer 2

• a payment claim that fails to identify the construction work will not satisfy the requirements of the Building and Construction Industry Payments Act 2004 (Qld), such that it cannot be enforced through the Act’s adjudication process.
• it is no longer acceptable to refer to a percentage complete as a means to identify the works being carried out, in a Payment Claim period.
• a payment claim must at least be reasonably comprehensible so as to enable the respondent to respond within the time frame provided under the Act.

Question 3

Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340

Answer 3

Reference date is the essential element of making a payment claim.

Entitlement arises:
1) Where claimant has undertaken to carry out construction work; and
2) A reference date has arisen

Claimant cannot seek to rely on 2 payment claims served in respect of one reference date.

Question 4

Cases regarding claims for unlicensed work?

Answer 4

Dart Holdings Pty Ltd v Total Concept Group Pty Ltd & Ors [2012] QSC 158: If a construction contract requires a claimant to carry out work for which it has no licence, then the claimant has no right to submit payment claims under the Act and the contract is unlawful.

Cant Contracting Pty Ltd v Casella [2006] QCA 538: If there is a provision under the Building Act which provides that an unlicensed contractor is not entitled to any money or other consideration for doing work pursuant to the contract, such a contractor will have no entitlement to progress payments under the security of payment legislation.

Question 5

Case authorities regarding preconditions to reference dates?

Answer 5

In BRB Modular Pty Ltd v AWX Constructions Pyt Ltd & Ors [2015] QSC 218 it was held that a precondition to a reference date of a completed & signed statutory declaration in the form under a schedule to the contract on payments to subcontractors and suppliers, was not a valid precondition to a reference date under the BIF Act.

In Leanfield Developments Pty Ltd v E&I Global Soultions (Australia) Pty Ltd & Anor [2016] 1 Qd R 30 the court held that the requirement for a draft payment claim to be served before a reference date was void as it imposed a serious restriction on the operation of the BIF Act. This is because this requirement meant that the Claimant would lose its entitlement to serve a payment claim for that month if it failed to serve the draft.

Question 6

Lepcanfin Pty Ltd v Lepfin Pty Ltd [2020] NSWCA 155

Answer 6

Key principle: Courts will uphold expert determination agreements unless there is a very good reason not to.

Facts:
- Contract contained clause “If the Dispute is not resolved, the parties must within the 14 day period use reasonable endeavours to appoint an expert (Expert) by agreement.

• Dispute arose as to Lepcanfin’s entitlement to an increase in facilitation fee to compensate for non-payment of an advance.
• Export appointed to determine “Lepcanfin’s entitlement to the increase in the Facilitation Fee”
• The expert determined that while Lepcanfin had not waived its right to collect the fee, but the fee was, nevertheless, unenforceable as a penalty.

Question for the Court:
- Had the expert exceeded her mandate by finding the penalty unenforceable?

Decision of the Court of Appeal:
#The NSWCA affirmed the NSWSC decision that the expert’s decision was within their mandate#
- Leave to appeal was granted in relation to the question of mandate. The Court held that the Applicant’s narrow construction of the expert determination clause was uncommercial and thereby rejected it.

Lesson:
- Commercial common sense dictated that expert determination clauses should be given a broad and liberal interpretation in light of the deed’s context and purpose, and it should not be construed narrowly unless the words in their context should be read more narrowly.

Question 7

Bellgrove v Eldridge [1954] 90 CLR 613

Answer 7

Quantum of damages for loss of defective work.

Facts:
- Villa was not built in accordance with specifications which caused serious instability to the villa. Principal did not pay full price for the works and builder sued to recover balance.
- Trial judge rejected builders claim and accepted principals counterclaim, awarding large sum of damages to the principal.

• Builder appealed trial judges decision that the work was so seriously defective that the villa would have to be rebuilt.

Issue:
- Should the trial judge have assessed damages by comparing the value of the villa if it had been properly built against the value as it currently stood?

Held:
- The High Court held that the owners of buildings are entitled to rectification costs rather than just the diminution in value of the building, subject to a test of necessity and reasonableness.
- When adopting this principle, the rectification work must be the “reasonable course to adopt” in the circumstance.

Question 8

Ruxley Electronics & Construction Ltd v Forsyth [1995] 3 All ER 268

Answer 8

Quantum of damages - circumstances where it is unreasonable to rectify defective work (eg. where cost of rebuilding is out of proportion with the benefit that will be obtained).

Thus in limited circumstances Principal may not be entitled to the cost of rectifying the defect but instead recover:
- the extent of diminution in the value of the building; and
- the loss of enjoyment and inconvenience where there is no loss in the value of the building, but the principal i prevented from using and enjoying the building.

Facts:
- The builder undertook construction of a swimming pool. Depth was to be 7 foot and 6 inches.
- After construction was completed, owner discovered depth of pool was 6 foot 9 inches. Only way to rectify was to rebuild the pool and principal did not intend to do this.

Result:
- Court focused on reasonableness of the circumstances where the cost of rebuilding is out of proportion with the benefit that will be obtained, the cost of rebuilding will not be awarded as damages.
- Note the owners lack of intention to rebuild was also considered.
- Court held that there was no difference in value therefore only awarded a nominal amount of damages for general inconvenience and disturbance.