05 Jul Construction Law Review – July 2022

Construction Law Review

Please refer below to our Construction Law Review, selected from AR Conolly’s Daily Bulletins covering Insurance, Banking, Construction & Government.

Warburton v County Construction (NSW) Pty Ltd [2022] NSWSC 941
Supreme Court of New South Wales
Black J
Construction – contract – damages – defects – plaintiffs claim damages against the first defendant and further relief, including rectification of Second Agreement by altering cl6.2 of that agreement to delete specified words – plaintiff homeowners initially contracted the defendant builder for the construction of a residential home for the purposes of the Home Building Act 1989 (NSW) – parties entered into a second agreement by which the plaintiffs took responsibility for the payment of subcontractors and materials, and defendants undertook to carry out all work reasonably necessary to manage and supervise the completion of the works – second agreement included a mutual release – plaintiff alleges defects with the construction of the home – Second Agreement removed construction responsibilities from defendant, and limited their responsibility to management and supervision of the project – Court found releases in the Second Agreement did not extend to quality of works or defects in works undertaken prior to agreement, where there is limited reference to that matter in prior correspondence between the parties and no reference to that matter in the recitals to the Second Agreement – breach of defendant’s obligations under cl2.1 of the Second Agreement, and a breach of the statutory warranties under the Home Building Act 1989 (NSW), not established – plaintiff’s claim against defendant in respect of three defects and one aspect of a fourth and their money claim succeeded – large part of plaintiff’s claim will be dismissed.
Warburton

Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd [2022] VSC 373
Supreme Court of Victoria
Stynes J
Determination on orders – plaintiff commercial builder engaged defendant under subcontract upon which plaintiff claimed works performed by defendant were defective which amounted to breach of subcontract – defendant made counterclaim where defendant averred plaintiff directed defendant to perform numerous variations upon which plaintiff was liable to defendant in sum of $320,265.11 – sought for contractual indemnity provided under subcontract and claimed entitlement to recover rectification costs – in alternative, claimed for damages arising from defendant’s breach of subcontract – alleged defects fall into two categories as either design defects or manufacturing defects – contractual indemnity – plaintiff asserted where defendant failed to remedy any breach of the Subcontract, plaintiff was entitled to take steps to remedy the breach, and all costs plaintiff incurred in doing so are recoverable from defendant as a debt due to plaintiff – ‘ruling principle’ in Owners Corporation No.1 of PS613436T v LU Simon Builders Pty Ltd (Building and Property) – liquidated damages at rate prescribe by subcontract to delay caused by identified milestone dates would entitle plaintiff in sum of $589,500 – judgment entered in favour of plaintiff in respect of credit claims in sum of $65,456 – absence of evidence to support alleged variations under subcontract raised by defendant – defendant’s counterclaim dismissed – defendant liable to plaintiff for damages in final sum of $2,171,320.48 – determination made.
Hacer Group Pty Ltd

Morris v Leaney [2022] NSWCA 95
Supreme Court of New South Wales – Court of Appeal
Payne, White and Beech-Jones JJA
Professions and trades – professional liability – negligence – architect – appeal against decision of New South Wales District Court (NSWDC) – respondent engaged as architect for appellants’ home renovations – appellants claimed that certain representations made by respondent about cost of completing renovations constituted misleading and deceptive conduct about cost of renovations and breach of contractual and tortious duty to advise about cost – appellants sued the respondent for a breach of s18 of the Australian Consumer Law – appellants claimed damages on no transaction basis namely that if known that cost would have exceeded $600,000 would not have undertaken renovations – trial judge rejected evidence and dismissed claim – appellants sued for negligence in contract and tort in relation to alleged failure to proffer appropriate advice about likely cost of renovations – trial judge found appellants did not suffer any loss and only awarded nominal damages for breach of contract – Civil Liability Act 2002 (NSW), s5D(1)(a); Varipatis v Almario [2013] NSWCA 76 applied – trial judge’s approach to damages erroneous – appellants failed to establish that had respondent not breached contractual and tortious duties then appellants would undertake renovations – factual causation not established – not proper inference for appellants to refuse undertaking renovations – NSWDC did not make any express finding as to what was necessary to fulfil obligation in contract and tort – appeal dismissed.
Morris v Leaney

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