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[2025] NSWSC 730
Supreme Court of NSW
2025-07-09
Peden J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Atlanta Building Pty Ltd v Abela (No 3) [2025] NSWSC 730
Hearing dates: 30 June – 1 July 2025; further submission 2 July 2025
Date of orders: 09 July 2025
Decision date: 09 July 2025
Jurisdiction: Equity - Technology and Construction List
Before: Peden J
Decision: (1) Second defendant to pay the plaintiff $196,577.23;
(2) Second defendant to pay the plaintiff interest pursuant to s 100 Civil Procedure Act 2005 (NSW) on items in paragraph [110];
(3) Summons otherwise dismissed;
(4) Parties to confer and by 14 July 2025 provide in a single communication to the Chambers of Peden J agreed costs orders or the parties’ competing costs orders;
(5) Each solicitor on the record to provide to the Chambers of Peden J by 14 July 2025 an affidavit setting out:
(a) that they have explained to their clients the reasons in this judgment and the inherent and legislative jurisdiction of the Court in relation to professional costs charged by legal practitioners;
(b) the various sums invoiced to their clients by way of professional costs and disbursements (including counsel), and their intention to invoice further sums to their client and the quantum; and
(c) reasons why the Court’s inherent jurisdiction or the procedure in Supreme Court Practice Note SC Gen 5 ought not be invoked;
(6) The matter is listed for further directions on 16 July 2025 at 9.30am.
Catchwords: CONTRACTS – Breach of contract – Remedies – Damages – Expectation damages – Quantification of expectation loss – Whether evidence adduced by plaintiff sufficient to establish extent of expectation loss occasioned by repudiation – Whether plaintiff expected to adduce further evidence to establish expectation loss – Plaintiff’s evidence insufficient – No damages awarded on head as claimed
CONTRACTS – Breach of contract – Remedies – Damages – Limits on recovery – Remoteness – Where plaintiff claims loss in form of wages paid to carpenters retained on construction of defendants’ residence – Where plaintiff’s employment of carpenters not brought to defendants’ attention prior to retention – Whether loss natural result of defendants’ repudiation of contract – Whether second defendant assumed responsibility for loss – Loss too remote – No damages awarded on head as claimed
CONTRACTS – Recovery on quantum meruit – Nature of claim in quantum meruit – Free acceptance – Where plaintiff effected further construction works at defendants’ request – Whether plaintiff entitled to restitution for construction work outlaid – Contract in favour of plaintiff inferred from defendants’ request for further construction works
Legislation Cited: Civil Procedure Act 2005 (NSW) ss 56, 99, 100
Cases Cited: 123 259 932 Pty Ltd v Cessnock City Council (2023) 110 NSWLR 464
Atlanta Building Pty Ltd v Abela [2024] NSWSC 1193
Atlanta Building Pty Ltd v Abela (No 2) [2024] NSWSC 1510
Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Durban Roodepoort Deep Ltd v Newshore Nominees Pty Ltd [2005] WASCA 231
Hadley v Baxendale (1854) 9 Ex 341
Hartnett v Bell (2023) 112 NSWLR 463
Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 3) [2014] WASC 162
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286
Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560
North Sydney Leagues’ Club Ltd v Synergy Protection Agency Pty Ltd [2011] NSWSC 286
Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10
Robinson v Harman (1848) 1 Ex 850
Troulis v Vamvoukakis [1998] NSWCA 237
XJS World Pty Ltd v Central West Civil Pty Ltd [2025] NSWCA 133
Texts Cited: K Mason, JW Carter and GJ Tolhurst, Mason and Carter’s Restitution Law in Australia (JW Carter Publishing, 5th ed, 2025)
Category: Principal judgment
Parties: Atlanta Building Pty Ltd (Plaintiff)
David Abela (First Defendant)
Rebecca Amos (Second Defendant)
Representation: Counsel:
M Klooster with M Waters (Plaintiff)
G Donnellan with J Rogers (Second Defendant)
Solicitors:
Yates Beaggi Lawyers (Plaintiff)
Mark O’Brien Legal (Second Defendant)
File Number(s): 2023/111376
Publication restriction: Nil
In 2019, David Abela and Rebecca Amos were married. They jointly purchased land in Bangalow, New South Wales, to build a residence there, relying on bank finance for both the purchase price and construction costs. By November 2019, they had signed a contract with Atlanta Building Pty Ltd for the construction of a substantial dwelling and swimming pool for the sum of $2,699,258.10. Mr Cameron Paton is the general manager of Atlanta.
Mr Abela and Ms Amos originally engaged architects, but, by April 2020, had terminated their retainer. That meant that various clauses under the contract requiring the architect to provide instructions and assess Atlanta’s claims could not operate on their terms. The parties adopted a course of dealing with each other directly, about which neither party took issue.
Shortly after the building works commenced, Mr Abela and Ms Amos decided to divorce.
On 20 August 2021, Atlanta terminated the contract on the basis that Mr Abela and Ms Amos had breached the contract.
Atlanta sued Mr Abela and Ms Amos for unpaid works performed on the property, and losses allegedly suffered following the termination of the contract. Part of the history of the dispute is recorded in previous judgments in the matter: Atlanta Building Pty Ltd v Abela [2024] NSWSC 1193 (McGrath J); Atlanta Building Pty Ltd v Abela (No 2) [2024] NSWSC 1510 (Stevenson J).
Atlanta’s summons filed on 7 June 2023 merely sought an unidentified amount of “damages”. At the hearing, the amount claimed by Atlanta varied widely in multiple iterations of a “final damages schedule” and submissions. However, the amount was between approximately $415,000 and $575,000, being within the jurisdictional limit of the District Court. It was also less than the amount obtained in a default judgment against Mr Abela on 13 September 2024 for $694,976.59 plus interest, which was later set aside.
The simple nature of the case and the small quantum involved raised concerns about:
why the parties did not seek to transfer the matter from this list to a more appropriate jurisdiction; and
the proportionality of costs, including why both parties were represented by solicitors together with two counsel (and at times three), and why a court book of over 1500 pages was produced, when only a few hundred pages were relevant. I note McGrath J recorded in September 2024 ([2024] NSWSC 1193 at [26]) that “Atlanta claims it has incurred legal and expert costs and disbursements in the proceedings in excess of $400,000.”
In May 2024, final orders in Mr Abela and Ms Amos’ family law proceedings were made. One order provided that Mr Abela would indemnify Ms Amos for any liability to Atlanta in these proceedings, although that indemnity is worthless, because Mr Abela is now an undischarged bankrupt.
In its amended technology and construction list statement, Atlanta did not identify which clauses of the contract had been breached by Ms Amos, so as to entitle it to damages. Most of the amounts Atlanta claimed under the contract were said to be payable by way of loss of bargain damages.
After various other schedules, Atlanta produced a “final schedule” in closing submissions, which was nevertheless amended orally, with the following result:
| Head of damage | Contract | | Loss of Profit | $171,106.66 | | Invoiced delay costs - stoppage 1 8 Aug 2020 – 20 October 2020 | $6,233.66 | | Invoiced delay costs - stoppage 2 8 Feb 2021 – 1 April 2021 | $11,202.81 | | Uninvoiced delay costs - stoppage 1 8 Aug 2020 – 20 October 2020 | $61,797.84 | | Uninvoiced delay costs - stoppage 2 8 Feb 2021 – 1 April 2021 | $108,671.71 | | Demobilisation/termination costs | $18,004.27 | | Total | $377,016.95 |
In addition, Atlanta claimed $37,811.31 by way of quantum meruit for works carried out on the roof that it said were not payable under the contract, because the works did not represent substantial performance of a stage of work entitling a scheduled payment amount.
In closing reply submissions, Atlanta’s counsel sought leave to amend the claimed amount to include a further sum of about $134,000 to $135,000 as part of an unpaid deposit or “retention money”, as detailed below.
Other than challenging the loss of profit quantification, Ms Amos did not allege that any of the other amounts were incorrectly calculated. However, she submitted that Atlanta was not entitled to:
loss of profits, because the quantum had not been proved; or
un-invoiced delay costs, because they were too remote.
Further, she submitted that any liability owed by her was subject to a set-off in her favour, considered below.
I consider each head of damage claimed in turn.
Generally, damages for breach of contract aim to place the innocent party in the position it would have been in if the contract had been performed according to its terms: Robinson v Harman (1848) 1 Ex 850 at 855 (Parke B); Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 (Amann) at 80 (Mason CJ and Dawson J). On the expectation measure, an innocent party may be entitled to loss of profits “constituted by the combination of expenses justifiably incurred by a plaintiff in the discharge of contractual obligations and any amount by which gross receipts would have exceeded those expenses”: Amann at 81 (Mason CJ and Dawson J).
Mere difficulty or uncertainty in the assessment of damages does not relieve the Court from the responsibility of attempting to assess those damages as best it can: Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 at 301 (Latham CJ); Amann at 83 (Mason CJ and Dawson J). That task may, sometimes, necessarily involve guesswork rather than precise estimation: Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422 at 428 (Devlin J).
However, damages must be proved with a degree of precision which reflects the proof reasonably available to the parties: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768 at [38] (Hayne J, Gleeson CJ, McHugh and Kirby JJ agreeing). Where no evidence is available, or there is an “absence of raw material to which good sense may be applied” then “justice does not dictate that … a figure should be plucked out of the air”: Troulis v Vamvoukakis [1998] NSWCA 237 at [14] (Gleeson CJ, Mason P and Stein JA agreeing). Where the events on which proof of loss depends occurred prior to trial, and can be proved with relative precision, the plaintiff is expected to place evidence before the Court establishing that loss, otherwise nominal or no damages will be awarded: Durban Roodepoort Deep Ltd v Newshore Nominees Pty Ltd [2005] WASCA 231 at [37]-[40] (McLure JA, as her Honour then was, with whom Steytler P and Murray AJA agreed).
Atlanta claimed $171,106.66 as lost profits, calculated as 15% of the uncompleted and unpaid construction works under the contract. That 15% figure comes from the uncontested expert opinion of a quantity surveyor, Mr David Madden. Mr Madden formed his opinion by:
Identifying the usual contractor margin in the industry, which was between 10 and 20%; and
Having regard to the fact the parties had agreed to a 15% margin for any variations under the contract.
Further, Mr Paton gave evidence that “Atlanta enjoys a profit of approximately 15% from turnover under each contract it completes”. In relation to this particular contract, his evidence was that the “amount of profit lost by Atlanta is calculated based upon the actual cost of Atlanta completing the Works which is estimated to be 15% of the Contract value”. However, he did not explain what the “actual cost” to Atlanta was, either at the time of formation or the time of breach. Nor did Mr Madden consider the actual market costs of the unperformed works at the time of breach in 2021, in circumstances where the contract price was agreed in August 2019, based on prices Mr Paton had obtained before then.
Ms Amos accepted that she was liable for the invoiced delay costs. Those costs concerned wasted costs expended on site, such as a hired shed and toilet that were not used during the suspensions of work. However, Ms Amos did not accept that she was liable for the un-invoiced delay costs, because they concerned alleged wasted employment costs of four of Atlanta’s carpenters. Ms Amos claimed these costs were too remote to be recoverable.
It is necessary to consider each stoppage in work in turn.
Atlanta claimed the first invoiced amount of $6,233.66 for wasted site costs for the first stoppage period, for which Ms Amos accepted she is liable. Atlanta also sought a further sum of $61,797.84 for wasted employee costs, alleging that four carpenters continued to be paid while it could not progress the works.
It is not in dispute that, on 20 August 2020, Ms Amos emailed Atlanta, saying “I think it might be best you pause the progress of the build until we sort out a few things here”, including coming to an arrangement with Mr Abela about the ownership of the property and liability for the construction project. Mr Paton complained on the same day that “pausing the build … isn’t as simple as just pressing an automatic stop button … I will have to run through the contract conditions in regards [sic] to this”.
On 21 August 2020, Mr Paton asked Mr Abela and Ms Amos for an indication of “how long the pause will be or at least an estimated time frame. There are on going [sic] site costs that need to be considered”. Mr Paton also recommended that, to minimise deterioration of the metal and timber framework, the frame ought to be completed, together with the installation of metal roofing sheets.
On 25 September 2020, Mr Paton again requested to know the length of the “pause”.
On 20 October 2020, Mr Abela instructed Atlanta to resume work on the construction, which it did thereafter.
While not pleaded, cl L1.1(j) of the contract provided that Atlanta was entitled to make a claim for an adjustment to the date for practical completion and an “adjustment of time costs” in respect of a delay for, inter alia, a suspension of work by Atlanta where Ms Amos had engaged in an “act of prevention”. That clause generally complemented each party’s obligation under cl A1.1(c) of the contract not to “obstruct” the other.
The phrase “adjustment of time costs” was defined to include:
…any loss, expense or damage reasonably incurred by the contractor that results from a delay due to the causes referred to in clause L1.
On 5 January 2021, Atlanta issued a “roof framing progress claim invoice” in the sum of $202,444.36. It also issued an invoice for extra cost of structural steel and concrete in the sum of $7,247.72.
Those invoices were not paid because Ms Amos was in dispute with Mr Abela and refused to authorise a draw down on the bank construction loan.
Atlanta submitted that this claim was made in compliance with its right to suspend works under the contract pursuant to clauses Q11 and Q12.
Clause Q11 entitled Atlanta, where Ms Amos had failed either to make a payment on time or meet any other substantial obligation under the contract, to:
… give the owner a written notice stating that:
c. it is given under this clause
d. the owner must rectify the default within 10 working days after receipt
e. if the default is not so rectified, the contractor [ie Atlanta] will be entitled to proceed under clause Q12 to suspend the necessary work …
Hey David. I really need a confirmation on when the progress payment will be made. I have the roofer booked in for the first week of February. He needs to order material but I can’t give him the go ahead until I know when I will get paid. If I don’t give him an answer this week I will lose him. Plus of course I just need to get paid. Please update me ASAP.
I do not accept that text message satisfied clause Q11: it neither stated that it was given under that clause, nor did it warn Mr Abela that steps under clause Q12 could be taken if there was no rectification of the breaches.
Clause Q12 provided that:
1. If after receiving a notice under clause Q11:
a. the owner fails to rectify the default
b. the owner fails to show reasonable cause why the default cannot be remedied within time …
the contractor may immediately suspend the necessary work by giving the owner written notice.
2. The notice must state that it is given under this clause. …
While Atlanta accepted that it never provided a notice that stated it was given under clause Q12, it submitted that it nevertheless gave a compliant notice under that clause by email dated 10 February 2021. In that email, Mr Paton explained that work was suspended on 8 February 2021. He further indicated that he had “on going [sic] site costs that continue to tally up with all these stoppages.” The costs were said to be $601.32 per week for the wasted site shed, toilet, fencing, and scaffolding.
Atlanta considered that the suspension was ended on 1 April 2021, when it was paid.
While not pleaded, Atlanta effectively submitted that again it was entitled to make a claim adjustment under clause L1.1, as above. Again, Ms Amos did not challenge Atlanta’s contractual entitlement to suspend works, even though there was no compliance with clauses Q11.1(c) and Q12.2. She accepted she was liable for invoiced delay costs of $11,202.81, but disputed un-invoiced delay costs for this second stoppage.
Part H of the contract prescribed the contractual process for Atlanta to make a claim for adjustment of time costs by reason of delay. It required the claim relevantly to be submitted within 20 working days of the end of the suspension or the end of the delay: clause H1.3. Further, details were to be provided with the claim, including reference to schedules of rates, if applicable: clause H2.1(d).
On 9 April 2021, Atlanta issued two invoices for delay costs. The covering email included:
Attached are copies of letters used during the latest job stoppage. I have attached these for supporting documentation.
I have also attached two invoices for the stoppages.
In summary as per attached the cost per week is $601.32. For the second stoppage I have also included the cost of the temporary pool fencing and labour to install it.
Please note I have applied our builder’s margin to these amounts in order to try and cover the cost of my time in dealing with all of this. To be honest it doesn’t really go close to covering costs incurred but it will lessen the blow.
I have also [not] included the cost of moving four full time carpenters from the job to elsewhere. This had a substantial effect on our day to day operations as the carpenters were booked to stay at the job right through to lock up. They instantly became excess labour on other jobs which had a major cost implication.
I would like for these invoices to be paid with in [sic] the 5 business day terms of trading as they are costs that were incurred some time ago.
At no time did Atlanta issue any invoice for the alleged wasted carpenter wages, of which it was clearly aware by this stage.
Atlanta brought its claim for all delay costs as a matter of contract. Therefore, it accepted that it had to comply with the contractual framework to entitle it a remedy.
As demonstrated above, Atlanta failed to comply with the contractual framework for the recovery of the delay costs concerning the invoice for the first stoppage, because no invoice was issued within the 20-day timeframe specified. However, that was not a matter agitated in submissions by Ms Amos. Therefore, it appears she waived those requirements. Ms Amos is liable for the first invoice of $6,233.66.
There was compliance with the timeframe for the second stoppage invoice. In any event, Ms Amos accepted she is liable for the amount invoiced which was $11,202.81.
Ms Amos might have argued that the Atlanta claimed the un-invoiced delay costs outside the contractual timeframe in Part H, however, she did not do so.
Instead, her challenge to the un-invoiced amounts was that recovery of the carpenter wages was too remote, and not recoverable: Hadley v Baxendale (1854) 9 Ex 341 at 354-5 (Alderson B for the Court).
I accept that submission. Mr Klooster, counsel for Atlanta, accepted that, at the time of formation, Ms Amos had no information about the manner in which Atlanta engaged tradespersons. All Atlanta had provided her was a list of trades by subject with hourly rates, but nothing in that document indicated that Atlanta employed fulltime carpenters. Mr Klooster accepted that the “highest [he could] take it” was that the document provided to Ms Amos quoted the hourly rate for carpenters (and other trades) to be engaged during the course of construction.
Nor did Ms Amos have any way of knowing that if the works were suspended, Atlanta could not deploy its carpenters elsewhere without incurring significant costs.
I do not accept that Ms Amos accepted liability for such wasted carpenter wages. It was not a loss arising naturally from her breach of contract, nor was it a loss that she should have reasonably contemplated at the time she made the contract: Hadley v Baxendale at 354-5. Those were not costs which Ms Amos ought to have known would still be incurred, and, if the contract were repudiated by her, wasted: see 123 259 932 Pty Ltd v Cessnock City Council (2023) 110 NSWLR 464 at 513 (Brereton JA, Macfarlan and Mitchelmore JJA agreeing).
In any event, Atlanta did not prove that those costs were, in fact, wasted. Mr Paton stated in his 9 April 2021 email that he had moved “four full time carpenters from the job to elsewhere”. Further, Mr Paton did not clearly explain why he was not able to deploy the carpenters in other ways, such that they would not be “excess labour” on other job sites. He suggested that, at the time, he could move the carpenters to other jobs within the local area as permitted by COVID-19 restrictions, but there was no work for them to do on those jobs. Yet it may well have been that Atlanta could have minimised costs in other ways.
Ms Amos is not liable for the carpenters’ wages claimed as “un-invoiced delay costs”.
Atlanta sought $37,811.31 for roofing works beyond the contract’s scheduled payment stage 7 on a quantum meruit basis.
At the beginning of the hearing, Ms Amos did not dispute either liability for or the quantum of these works, which had been assessed by Mr Madden. Therefore, Ms Amos is liable for that sum, subject to any set-off defence.
I note that the particular claimed roofing work was carried out in the following circumstances.
During the stoppage of works in February 2021 because of Mr Abela and Ms Amos’ failure to pay outstanding invoices, Atlanta wrote to Mr Abela on 18 February 2021 stating:
We strongly recommend that the metal roof sheets be installed ASAP to assist in weather proofing the building and slowing the decay of the framework.
Mr Abela then commenced urgent interlocutory proceedings in the then-Family Court of Australia to require Ms Amos to agree to the release of money from the bank to pay Atlanta’s outstanding invoices.
On 16 March 2021, Ms Amos and Mr Abela consented to orders made by the Family Court, including that the outstanding Atlanta invoices were to be paid, and that Mr Abela was not to instruct Atlanta to do any further work “save to the extent necessary to incur the stage payment due on completion of the installation of the roof”.
Thereafter, Mr Abela instructed Atlanta to carry out those recommended works. On 8 April 2021, Atlanta notified Mr Abela that it would “book in roofer ASAP”. A roofer was engaged, and the works were carried out.
To plead a claim [in quantum meruit] today merely by reference to that language of the form of action tells a lawyer very little, and a layperson nothing at all, as to (i) whether the cause of action is one to enforce the contract, seeking payment of a reasonable price implied into the contract, (ii) whether it is an asserted claim for a restitutionary remedy for breach of contract, or (iii) whether it is a remedy arising by operation of law in that category of actions concerned with restitution in the category of unjust enrichment.
Atlanta’s counsel proceeded on the basis that Atlanta’s quantum meruit claim was concerned with the final category of case. He suggested that the relevant “unjust factor” was “free acceptance”, which involves (a) acceptance by the defendant of goods or services provided by the plaintiff, where (b) the defendant knows or reasonably ought to know that the plaintiff was not providing the goods or services gratuitously, and where (c) the defendant did not take a reasonable opportunity to reject the goods or services: K Mason, JW Carter and GJ Tolhurst, Mason and Carter’s Restitution Law in Australia (JW Carter Publishing, 5th ed, 2025) at [157]. However, free acceptance as an “unjust factor” is not uncontroversial, and its position in Australian law is not clear: see, eg, Restitution Law in Australia at [158] and [934]; see also Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 3) [2014] WASC 162 at [56]-[90] (Edelman J).
I do not accept that Atlanta’s quantum meruit claim should be viewed this way. Rather, as the learned authors of Mason and Carter’s Restitution Law in Australia explain at [1034] (emphasis added):
A relatively straightforward situation … is a claim that relates to work fully executed by the plaintiff at the request of the defendant. A contract in favour of the plaintiff will generally be inferred or implied. In all other cases, the plaintiff is entitled to reasonable remuneration by way of restitution.
There is no express term in the contract entitling Atlanta to “demobilisation costs”. The stage payments schedule included as its last item “practical completion”, but did not detail what was included in that stage.
However, Ms Amos did not contest Atlanta’s entitlement to the costs of clearing the site or the quantum claimed.
I consider that Atlanta is entitled to the sum of $18,004.27, either pursuant to the contract or by way of contractual damages, caused by Ms Amos’ repudiation.
At no time in their opening written or oral submissions did counsel for Atlanta make any claim for part of an unpaid deposit. As noted above, multiple iterations of a “final” schedule of claims were provided to the Court, none of which included any reference to an unpaid deposit.
When he commenced closing submissions, Mr Klooster sought, and was granted, leave to amend Atlanta’s technology and construction list statement. However, no amended schedule claiming an unpaid deposit was mentioned.
However, in closing reply submissions, Mr Klooster asserted that Atlanta sought leave to amend its list statement a further time after the conclusion of the hearing to claim for an additional $135,034.90, which “has not been raised until now” and was “for works carried out under the contract”. He further stated that “it is pleaded in a clumsy way in the sense that there is a final invoice that is issued, a final progress claim … [and] a failure to pay the final payment claim”.
Leave was not granted at the time, because no pleading had been prepared for Ms Amos to consider. Atlanta was directed that an application for leave to further amend would require a notice of motion with a supporting affidavit.
Instead, after business hours on 2 July 2025, Atlanta’s counsel sent to Chambers an email asking the Court to make proposed consent orders, and attaching a proposed further amended list statement and yet another version of the “schedule of damages”.
The proceedings have been on foot in this Court since June 2023 (and earlier in NCAT), and Atlanta has always briefed the same solicitors and counsel, including at times senior counsel. Atlanta ought to have had a clear understanding of its case by and during the trial. No explanation for the delayed proposed amendment was given on affidavit as directed.
To allow the amendment would be to require Ms Amos to incur more costs meeting the claim and filing further submissions; it would be contrary to the “just, quick and cheap resolution” of the issues in these proceedings: s 56(1) Civil Procedure Act 2005 (NSW) (CPA).
Further, I would not have granted leave to amend because the proposed 2 July 2025 amended pleading is internally inconsistent.
Mr Klooster had identified paragraph 7.2 (in the previous pleading) as “the material facts on which the claim is based”. It pleads a table of invoices issued for various stages of works and amounts paid to demonstrate a shortfall.
At the new paragraph 10.6 it is alleged that the defendants failed to pay the progress claims “in full with respect to Stage 1 referred to in paragraph 7.2 above”. It particularises an affidavit of Mr Paton dated 22 August 2022, which was not in evidence, and pre-dated the commencement of these proceedings. It also particularises that Ms Amos paid $134,962.91 towards the stage 1 amount of $269,925.81.
I reject the submission that any amount is payable as “retention money”.
Mr Klooster’s submission was:
On the face of the [final payment claim invoice] … it’s claimed as retention. But it doesn’t really make any difference even if it was claimed as the part payment of the deposit, it’s still monies that are owed to my client. Because under the contract, my client’s entitled for a full 10% deposit and 5% retention to be retained … by the owners or paid to my client. So, the total amount my client’s entitled to is 15%. What it received was 10%, it received a 5% cash deposit and 5% further payments of retention to satisfy the deposit of 10%. What is missing is the additional 5% which is claimed here…
Clause C1.1(a) of the contract required Atlanta to provide security for performance of its obligations in the form of a cash retention sum. Clause C2.1 provided that the owner was entitled to withhold up to 10% of each progress payment until the value held equated to 5% of the total contract price, namely $134,962.91. Clause C2.2 required the owner to hold such retention money on trust for Atlanta. Clause C4.1(a) entitled the owner to draw on the security only if the architect issued a certificate in favour of the owner in accordance with a notice procedure.
It was not in dispute that Ms Amos had not retained any money as “retention money”. It was further not in dispute that the parties had agreed that Ms Amos and Mr Abela would not be required to pay the final 5% of the deposit in cash (being the same amount as the total possible retention money sum), if they did not keep any retention money and paid the whole of Atlanta’s invoices.
Mr Klooster’s submission is incorrect when he asserted that Atlanta was entitled to the 10% deposit and an additional 5% retention money; it was only ever entitled to the 10% deposit. Had money been held back as retention money then it would have been held on trust for Atlanta for adjustments at the conclusion of the works. That never occurred. No “retention money” was payable as claimed in the final progress statement.
Ms Amos admitted paragraph 7.2 of the technology and construction list statement, save as to the Stage 1 payments, because she had relied upon the agreement of the parties that the second half of the deposit need not be paid, if no retention money was held. That agreement was complied with by the parties up to stage 7 and then the contract was terminated.
On termination of the contract, Atlanta was entitled to be placed in the position it expected to be in, had the contract been performed. That would have entitled Atlanta to be paid the outstanding sums payable under the contract, including any unpaid deposit.
Based on its pleaded paragraph 7.2, I consider Atlanta is entitled to $123,325.18.
In Ms Amos’ technology and construction list response, she pleaded that she was entitled to a set off against any amount awarded to Atlanta, because:
Atlanta breached the contract, and she was entitled to liquidated damages under the contract from 10 December 2020; and
That “the deposit of $134,962 paid [to Atlanta] should have been paid back to them under cl N17 of the Contract, immediately upon the certification of the initial stage payment claims”.
The claim for liquidated damages was abandoned.
The claim for the offsetting of the deposit was not the subject of opening written submissions, but in oral closing submissions, counsel for Ms Amos stated:
…if there were competing claims … between the parties that required a payment to the owner, then the retention moneys and the deposits are used to balance the competing claims at the end of the day, as an offsetting mechanism.
However, Ms Amos brought no “competing” or “offsetting claim”, in relation to which the “mechanism” might have work to do.
A vague submission was also made that the contract did not refer to any particular work, to which the deposit was to be put. It might be accepted that is so. However, the contract makes plain that the deposit could only be applied “towards the contractor’s cost of building work and to no other purpose”: clause N16.2(a). There is no suggestion that Atlanta did not do that.
I reject the submission that Ms Amos has any entitlement to a set off in relation to the deposit.
While not included in any version of a “final schedule” of money claimed, Atlanta appears to also have sought interest on all sums payable at 10% per annum, allegedly in accordance with the contract. While not particularised, that appears to be a reference to clause N15.1, which requires an owner to pay interest on any money owing at the interest rate “shown in item 28 of schedule 1”. Interest is calculated daily from the date on which the money should have been paid.
Item 28 of sch 1 provides: “if nothing stated, 10% per annum”. However, added in handwriting for that interest rate item is “N/A”. Either the parties intended with “N/A” that the default 10% per annum interest rate applied, or they did not intend any obligation to pay interest. I consider the latter the better construction, when it is read in context. Each other item in the schedule was completed in the same handwriting, including another “N/A” in relation to item 9, the “percentage of contract price for each unconditional guarantee”. It therefore appears that the parties considered the operation of each clause, to which the schedule operated, and made a decision that interest was “N/A” or not payable. That reflects a deliberate choice by the parties not to activate clause N15.1, which the Court cannot simply ignore: see eg XJS World Pty Ltd v Central West Civil Pty Ltd [2025] NSWCA 133 at [32] and [36] (Kirk JA, Payne and Adamson JJA agreeing). Further, while not determinative, I note that it does not appear that Atlanta charged interest on late invoices before the contract was terminated.
I do not accept that Atlanta is entitled to interest pursuant to the contract for amounts payable by Ms Amos. Obviously, the contractual interest rate does not apply for the quantum meruit claim.
In the alternative, Atlanta sought interest pursuant to s 100 CPA on any judgment made by way of quantum meruit and for amounts outstanding under the contract. Despite pleading that a schedule of interest would be provided “after a hearing date has been set down”, no such schedule for s 100 CPA was produced at any time.
Section 100 CPA provides that the Court may award interest at a rate it considers appropriate on a judgment sum, either for some period or for the period from which the amount was due until judgment.
In circumstances where Atlanta’s claimed sum was constantly shifting, and it never issued an invoice for the outstanding amount of $123,325.18 payable under the contract (rather than issuing an invoice for a different amount of “retention money”), I do not accept Atlanta is entitled to interest on that sum.
I accept that Atlanta ought to receive s 100 CPA interest on the other sums claimed and payable for delay and demolition, and the extra roofing works.
For the reasons above, Atlanta is entitled to $196,577.23 plus some interest, made up of the following components:
$123,325.18 for underpaid payment claims;
$37,811.31 for roofing works, plus interest pursuant to s 100 CPA;
Invoiced delay costs of $6,233.66 for stoppage 1, plus interest pursuant to s 100 CPA;
Invoiced delay costs of $11,202.81 for stoppage 2, plus interest pursuant to s 100 CPA;
$18,004.27 for demolition costs, plus interest pursuant to s 100 CPA.
Every party to civil proceedings is obliged to assist the Court in furthering the overriding purpose of litigation, including in the way in which it chooses to conduct proceedings: CPA s 56(3). Further, barristers and solicitors are not to place their clients in breach of that obligation: CPA s 56(4). Those obligations extend to ensuring “the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute”: CPA s 60.
No explanation has been provided as to why the proceedings remained in this list, or this Court, after the reason for the proceedings being transferred from NCAT had vanished, namely Mr Abela’s cross-claim. Further, considering the small size and simplicity of the dispute, it is unclear why so many counsel were briefed and the court book was so voluminous, yet greatly unused.
In Hartnett v Bell (2023) 112 NSWLR 463 at 492-4, Bell CJ (Adamson JA and Griffiths AJA agreeing) set out general propositions relevant to the Court’s inherent jurisdiction to supervise officers of the Court and legal costs. Without any intention of derogating from those important statements of principle, I note that the Court has an inherent or general jurisdiction to regulate the costs, charges and disbursements claimed by solicitors as officers of the Court (at [123(10)]); and that jurisdiction is exercised “for the purpose of ensuring honourable conduct” from officers of the Court (at [123(12)]). Further, the Court may order that a legal representative personally pay the opposing party’s costs directly for unnecessary or wasted costs, or that the legal representative repay an amount charged to their own client (at [123(15), [123(19)]). That jurisdiction is complemented by statutory provisions in relation to costs such as s 99 CPA.
For the reasons identified above concerning the manner in which the proceedings were advanced, it is appropriate to require the solicitors on the record to provide an affidavit setting out:
that they have explained to their clients the reasons in this judgment and the inherent and legislative jurisdiction of the Court in relation to legal practitioners' costs;
the sums invoiced to their clients by way of professional costs and disbursements (including counsel), and their intention to invoice further sums to their client and their quantum; and
reasons why the Court's inherent jurisdiction or the procedure in Supreme Court Practice Note SC Gen 5 ought not be invoked.
For the above reasons, the appropriate orders are:
Second defendant to pay the plaintiff $196,577.23;
Second defendant to pay the plaintiff interest pursuant to s 100 Civil Procedure Act 2005 (NSW) on items in paragraph [110];
Summons otherwise dismissed;
Parties to confer and by 14 July 2025 provide in a single communication to the Chambers of Peden J agreed costs orders or the parties’ competing costs orders;
Each solicitor on the record to provide to the Chambers of Peden J by 14 July 2025 an affidavit setting out:
(a) that they have explained to their clients the reasons in this judgment and the inherent and legislative jurisdiction of the Court in relation to legal practitioners’ costs; (b) the sums invoiced to their clients by way of professional costs and disbursements (including counsel), and their intention to invoice further sums to their client and the quantum; and (c) reasons why the Court’s inherent jurisdiction or the procedure in Supreme Court Practice Note SC Gen 5 ought not be invoked;
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Atlanta Building Pty Ltd
Abela
(2023) 110 NSWLR 464
(1991) 174 CLR 64
(2023) 112 NSWLR 463
(1938) 61 CLR 286
(2019) 267 CLR 560
(2003) 77 ALJR 768
Only the claim against Ms Amos must be determined. Until closing submissions, Ms Amos denied liability on various bases. She primarily claimed that Atlanta had agreed to relieve her of her contractual obligations, because Mr Abela was to be responsible for the whole liability. Alternatively, if there were no such agreement, Ms Amos contended that she had relied on Atlanta’s representations that it would release her from her contractual obligations to her detriment by “failing to take adequate steps to protect her position before allowing the works to continue”. Those defences were abandoned during the hearing.
However, Ms Amos maintained that Atlanta’s heads of damage “are not recoverable on a proper construction of the contract, not causally connected to any breach or too remote. Several are also unsupported by evidence.” Further, she relied upon a set-off.
For the reasons that follow, Atlanta is entitled to judgment in its favour in the sum of $196,577.23, plus some interest.
Ms Amos submitted that it was not possible to calculate Atlanta’s lost profits, because there was no evidence of the actual market prices of materials at the time of breach in 2021, when the construction industry was facing significant cost increases because of supply issues caused by the COVID-19 pandemic. Mr Madden considered that during 2021 and 2022 costs increased, sometimes by 15%.
Atlanta submitted that it ought not be concluded that there was any real impact on likely profit by reason of COVID-19 or otherwise, because:
Practical completion was due by August 2021, and COVID-19 price increases had not really been experienced by then;
Under the contract, Atlanta was entitled to pass on to Ms Amos any increase in prime cost sums (such as garage door, tiles, lights, timbers), and provisional sums (such as electrical, gyprock, painting, joinery supply and installation): schedules 6 and 7 and clause N1. Most of the incomplete contracted construction work concerned specified prime and provisional costs and therefore if market prices did increase, then those increases would have been passed onto Ms Amos as part of the contract and would not have affected the profit.
Even if it is assumed that Atlanta would have been contractually entitled to pass increased costs of “most” of the uncompleted work elements onto Ms Amos, it would have been a simple matter for Atlanta to prove its “actual (likely) cost” of completing the works. In determining the contract price, Mr Paton had obtained quotes for the various components and must have factored in the cost to Atlanta of its own workers and overheads. Further, Mr Madden could have been asked to opine on the likely cost of the works to Atlanta, and the impact on price changes, including with regard to the contract mechanisms to pass on increases to prime and provisional costs. For example, Mr Madden could have identified which components of the work would have been affected by price increases in 2021 and borne by Atlanta. Mr Paton accepted that there was no certainty that Atlanta would make the profit envisaged.
Atlanta has failed to discharge its onus of proving with certainty its loss of profits claim, where such certainty was possible. It is not appropriate for the Court to speculate on the quantum of Atlanta’s lost profits. In those circumstances, I am not satisfied that Atlanta has proved it has suffered any compensable loss by way of loss of profits.
However, that paragraph 10.6 is inconsistent with paragraph 7.2, which pleads that $140,000 (not $134,962.91) was paid towards the stage 1 amount. Therefore, the “shortfall” for Stage 1 based on paragraph 7.2 would be $129,925.81. However, the overall shortfall for all invoices in paragraph 7.2 is only $123,325.18, arrived at from the total pleaded invoiced amount of $1,349,521.07 less the $1,226,195.89 pleaded as having been paid.
Confusingly, in submissions to support an “underpayment claim”, Atlanta relied on yet another amount of $135,034.90 found in Mr Madden’s evidence. Mr Klooster accepted: “It’s slightly different [to the deposit sum], correct, your Honour, but it is still the shortfall in the deposit which is really what the claim is. The 5% of the outstanding deposit”. How Mr Madden came to a different figure was not clearly explained in his evidence or in Mr Klooster’s submissions.
Therefore, based on its previous pleadings filed with leave, evidence, and submissions, Atlanta claimed the following different amounts allegedly for the same shortfall:
$134,962.91 found in the final payment claim dated 1 September 2021, for “retention money held to be returned (termination, as repudiation)”;
$135,034.90 found in Mr Madden’s evidence; or
$123,325.18 based on a mathematical calculation of the amounts pleaded as having been invoiced and paid in paragraph 7.2 of the list statement.
Despite its multiple attempts to identify what it was seeking, Atlanta gave no explanation as to how these inconsistencies ought to be reconciled.