620 Collins Street Pty Ltd v Abigroup Contractors Pty Ltd

620 Collins Street Pty Ltd v Abigroup Contractors Pty Ltd - [2006] VSC 491 - VSC 2006 case summary — Zoe

[38]

With any claim for an extension of time for Practical Completion, or as soon as practicable thereafter, the Contractor shall give the Superintendent written notice of the period of extension claimed.

If the Contractor is entitled to an extension of time for Practical Completion the Superintendent shall, within 7 days of receipt of the notice of the number of days extension claimed, either request further reasonable particulars, refuse an extension of time if it is not reasonable that any extension of time be granted or, grant a reasonable extension of time. If within the 7 days, the Superintendent does not grant the full extension of time claimed, the Superintendent shall before the expiration of the 7 days give the Contractor notice in writing of the reason. If the Superintendent requests further reasonable particulars, the Contractor must provide all the reasonable particulars requested within 7 days of the Superintendent's request and this paragraph shall apply again as if receipt of the particulars was receipt of the notice of the number of days extension claimed except that the Superintendent may not then again request further particulars.

In determining a reasonable extension of time for an event causing delay, the Superintendent shall have regard to whether the Contractor has taken all reasonable steps to preclude the occurrence of the cause and minimise the consequences of the delay.

Notwithstanding that the Contractor is not entitled to or has not claimed an extension of time, the Superintendent may at any time and from time to time before the issue of the Final Certificate by notice in writing to the Contractor extend the time for Practical Completion for any reason.

A delay by the Principal or the failure of the Superintendent to grant a reasonable extension of time or to grant an extension of time within 7 days, shall not cause the Date for Practical Completion to be set at large but nothing in this paragraph shall prejudice any right of the Contractor to damages."

[50]

"164. It seems to me that (having regard to Peninsula Balmain), if the Superintendent's discretionary power contained in the penultimate clause can be exercised in the interest of the Contractor, one must ask how can this situation sit comfortably with the mandatory steps precedent to an EOT entitlement as set out earlier in Cl 35.5?

165. In my view, the answer to the above question lies within the penultimate paragraph itself. If the Contractor fails to comply with the mandatory notice provision for an EOT, the Contractor is not entitled to an EOT as the claim is time barred. Such circumstances are expressly considered ('is not entitled to ... an extension of time') in the penultimate paragraph of Cl 35.5 and do not fetter the wide discretion of the Superintendent who (under Cl 23) is required to act 'honestly and fairly'. A similar situation applies to circumstances where the Contractor has not claimed an EOT. In applying Peninsula Balmain, the more difficult question to consider is what is fair in the circumstances.

166. Peninsula Balmain represents a change in direction of the law in respect of standard forms of the AS 2124/AS 4300 type which clothe the Superintendent with the independent discretion to extend time. The articles by Messrs Bellemore and Baron particularly defend the traditional view. However, I think there is force in Mr Jones' commentary which the Court of Appeal appears to have accepted. It is also clear that the Court of Appeal considered the commentary of Professor I.N.D. Wallace QC (Prevention and Liquidated Damages: A Theory Too Far? [2002] 18 BCL 82-86) which, in effect, respectfully disagreed with the decision on this point at first instance.

167. In my respectful opinion, in relation to the application of the penultimate paragraph of Cl 35.5, it seems that Peninsula Balmain was decided correctly both at first instance and on appeal.

168. Because of the Australia-wide use of contracts such as AS 2124/AS 4300, it also seems to me that it is appropriate to apply Peninsula Balmain in Victoria in the circumstances where there is no inconsistent decision of the Victorian Supreme Court."

[79]

It cannot be said that the interpretation adopted by the Arbitrator was not reasonably open to him. Accordingly, it should not be disturbed.[23] Likewise the Arbitrator's views as to whether the delay costs so calculated, amounted to a penalty, were also reasonably open to him and disclose no manifest error of law.

62 To adapt the words of Knox CJ and Gavan Duffy J in Melbourne Harbour Trust Commissioners v Hancock: [24] "... on a consideration of all the terms of the contract and the nature and extent of the work to be done under it ..." the Arbitrator applied the provisions of the contract in a way which did not alter the fundamental undertakings originally given with respect to delay costs.

The Sixth Ground - That the Arbitrator Fell into Error in Awarding Interest on the Whole of the Uncertified Progress Payment Sum of $711,761 in that He Failed to Reduce the Amount Upon Which Interest Was to be Calculated by $408,000 Representing the Crane Based Variation Claim

63 The plaintiffs seek leave under both s.38(5)(b)(i) and (ii) of the Act.

64 The point raised was not identified in the material initially filed in support of the application for leave to appeal. In consequence, the plaintiffs also seek leave pursuant to r.4.11(3) of order 4 chapter 2 of the RSC to amend their grounds of appeal.

65 It seems to me that this latter application is more properly characterised as one to waive the requirements of r.4.07 which requires that within seven days after filing the originating motion, an applicant for leave to appeal shall file an affidavit in support of the application for leave to appeal. The rule requires that the affidavit set out the grounds of the proposed notice of appeal, and exhibit a copy of the proposed notice of appeal. The application to amend is in substance directed to the adequacy of the affidavit in support. There is as yet no notice of appeal and r.4.11 does not in strictness apply.

66 Written notice of the application for leave to amend the notice of appeal was given on 7 June 2006. There is no question that Abigroup has had adequate opportunity to respond to it. The relevant r.4.07 affidavit was filed on 8 December 2005.

67 The ground in issue relates to the Arbitrator's determination to award interest in respect of uncertified progress claim No. 29 in the sum of $711,761 from 3 March 2003 up until the time of any subsequent event which supplanted the entitlement.

68 There is affidavit evidence that there was some confusion on the part of the plaintiffs' legal advisers as to whether the point in issue arose as a result of the Arbitrator's first interim award of 3 November 2005 (being the subject of this proceeding) or his second interim award of 13 January 2006.

69 On 23 June 2006 Byrne J refused leave to extend time to appeal against the second interim award, finding first, that there was no evidence satisfactorily explaining the delay in making the application, and secondly, that the point had no prospects of success.

70 His Honour also observed that there was some force in the contention of Abigroup that the point in issue arose from the decision on the first interim award.

71 In my view the explanation for the relatively long delay in raising the point now raised in this proceeding is also less than satisfactory. Nevertheless it is the prospects of success which I regard as critical.

72 By progress claim No. 29 Abigroup claimed the balance allegedly owing by way of the difference between an adjusted contract sum of $49,031,322 and an amended progress certificate of $48,319,561.

73 It was common ground that the superintendent did not certify this claim. At [524]-[525] the Arbitrator observed:

[82]

"At the times for payment claims or upon completion of the stages of the work under the Contract stated in Annexure Part A and upon the issue of a Certificate of Practical Completion and within the time prescribed by Clause 42.5, the Contractor shall deliver to the Superintendent claims for payment supported by evidence of the amount due to the Contractor and such information as the Superintendent may reasonably require. Claims for payment shall include the value of work carried out by the Contractor in the performance of the Contract to that time together with all amounts then otherwise due to the Contractor arising out of the Contract.

If the time for any payment claim under the preceding paragraph falls due on a day which is Saturday, Sunday, Statutory or Public Holiday the Contractor shall submit the claim either on the day before or next following that date which itself is not a Saturday, Sunday, Statutory or Public Holiday.

If the Contractor submits a payment claim before the time for lodgement of that payment claim, such early lodgement shall not require the Superintendent to issue the payment certificate in respect of that payment claim earlier than would have been the case had the Contractor submitted the payment claim in accordance with the Contract.

Within 14 days of receipt of a claim for payment, the Superintendent shall assess the claim and shall issue to the Principal and to the Contractor a payment certificate stating the amount of the payment which, in the Superintendent's opinion, is to be made by the Principal to the Contractor or by the Contractor to the Principal. The Superintendent shall set out in the certificate the calculations employed to arrive at the amount and, if the amount is more or less than the amount claimed by the Contractor, the reasons for the difference. In calculating any amount and assessing claims, the apportionment in the Trade Cost breakdown attached at Schedule 4A must be applied. The Superintendent shall also set out, as applicable, in any payment certificate issued pursuant to Clause 42, the allowances made for -

[104]

[1] [1994] SASC 5197; (1994) 63 SASR 444 at 448 - 449, cited with approval by Dodds-Streeton J in Anaconda Operations Pty Ltd v Fluor Australia Pty Ltd [2003] VSC 275 at [30]. See also BHP Billiton Ltd v Oil Basins Ltd [2006] VSC 402 at [27].

[2] (2004) 20 BCL 36 at 39; [14].

[3] [1998] 1 VR 83 at 89-91.

[4] (1991) 26 NSWLR 203 at 226.

[5] Unreported Victorian Supreme Court decision, 10 February 1995.

[6] [2002] VSCA 113 at [31].

[7] [2000] V Conv R 54-614 at [15].

[8] (1994) 217 ALR 201 at 215.

[9] The plaintiffs' submissions on application for leave to appeal at [9].

[10] Plaintiffs' application for leave to appeal submissions at [112].

[11] (2002) 18 BCL 15, and on appeal (2002) 18 BCL 322.

[12] Dorter and Sharkey Building and construction contracts in Australia (2nd edition); A Bellemore "Must a Superintendent Extend Time?" [2002] 19 BCL 281; A Baron "Role of the contract administrator; breathing new life into the prevention principle' [2003] 10 BCL 334.

[13] (1994) 180 CLR 266

[14] Ibid at 283.

[15] In argument it was conceded that the partes had as a matter of practicality accepted the superintendent's decisions made under this power were fair.

[16] (2006) 22 BCL 92.

[17] Ibid at 120; [660]

[18] Award [462].

[19] He referred to the article by D Byrne QC "The Prolongation Costs Claim" (1988) 4 BCL 181 at 184-192.

[20] [1927] HCA 26; (1927) 39 CLR 570 at 581.

[21] (1923) AC 395.

[22] Melbourne Harbour Trust Commissioners v Hancock [1927] HCA 26; (1927) 39 CLR 570 at 581.

[23] Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 at p.744 per Lord Diplock and p.752-753 per Lord Roskill; Re Tiki Village International (1994) 2 Qd R 674 at 677; State of Victoria v Seal Rocks Victoria (Australia) Pty Ltd [2003] VSC 84 at [94].

[24] at 583.

[25] Refer Daysea Pty Ltd v Watpac Australia Pty Ltd (2001) 17 BCL 434 at [31]

[26] Construction Services Civil Pty Ltd v J & N Allen Enterprises Pty Ltd & Anor (1985) 1 BCL 363 at 367.

[27] Re Concrete Constructions Group Pty Ltd (1997) 1 Qd 6.

[28] Cf Batchelor v Bourke [1981] HCA 30; (1981) 148 CLR 448 at 455; Clarke v Foodland Stores Pty Ltd [1993] VicRp 81; (1993) 2 VR 382 at 396-397.

[29] Cf Clarke v Foodland Stores Pty Ltd at 397.

[30] [2001] QCA 49.

[31] Ibid at [31].

[32] (2001) 17 BCL 357 at [17].

[33] Daysea Pty Ltd v Watpac (above).

[34] Algons Engineering Pty Ltd v Abigroup Contractors Pty Ltd (1998) 14 BCL 215.

[35] At [18].

[36] At [31].

At a glance

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Judgment (104 paragraphs)

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Legislation Cited (8)

Cases Cited (8)