Floruit Holdings Pty Ltd & Anor v Sebastian - Builders & Developers Pty Ltd

CATCHWORDS: CONTRACTS - Standard form building contract - interpretation - whether the contract entitled the respondent builder to withhold delivery of the plumbing certificate - whether the expression "the works" included the plumbing certificate

Cam & Sons Pty Limited (In Voluntary Liquidation) v Commissioner of Land Tax (1964) 112 CLR 139 Commissioner of Land Tax v Manors of Mosman Pty Ltd (1994) 34 NSWLR 94 CASES CITED: Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93 Joshua Henshaw and Son v Rochdale Corp [1944] KB 381 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 Thomas v Metropolitan Housing Corporation Ltd [1936] 1 All ER 210

Floruit Holdings Pty Ltd (First Appellant) PARTIES: Currency Corporation Pty Limited (Second Appellant) Sebastian - Builders & Developers Pty Ltd (Respondent)

COUNSEL: G Burton SC/P Strasser (Appellants) G McVay/A Tsekouras (Respondent)

SOLICITORS: Grech Partners Solicitors (Appellants) Pigott Stinson (Respondent)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40210/09

ALLSOP P YOUNG JA BERGIN CJ in Eq

SEPTEMBER 2009 FLORUIT HOLDINGS PTY LTD & ANOR v SEBASTIAN - BUILDERS & DEVELOPERS PTY LTD Judgment 1 ALLSOP P: I agree with Bergin CJ in Eq. 2 YOUNG JA: I have read the reasons of Bergin CJ in Eq. I agree that, despite the reasons of the District Court Judge to the contrary, as Bergin CJ in Eq has demonstrated, the mere construction of the contract shows that the answer to the separate question must be "No". 3 I would, however, make two sets of comments. 4 First, it is regrettable that the parties waited 18 months before seeking to resolve their dispute and then did so by isolating the present question for decision. One can envisage more efficient methods of resolving the dispute. I will not elaborate as I do not wish to prejudice the ongoing litigation. However, lawyers do have an obligation of endeavouring to deal with litigation as quickly, efficiently and cheaply as practicable. 5 Secondly, I cannot let the decision in this case pass without commenting on the submissions made by counsel for the respondent as to the nature of a builder's 'possession' under the common building contract. 6 The builder in no sense has "possession" of the relevant land in the sense of having the exclusive possession of a lessee who may exclude others. 7 The authorities clearly state that the builder has a licence to occupy the site or perhaps so much of the site as is required for the building work to be effected. 8 In Joshua Henshaw and Son v Rochdale Corp [1944] KB 381 at 389, the English Court of Appeal said:

"The plaintiffs (builders) had not possession of the land. Their only right was in the nature of a licence to enter on it to execute the works in accordance with the contract…" 9 That statement, which only stated the existing law, continues to appear in the leading textbooks on building law, eg Hudson's Building and Engineering Contracts (10th ed) p 317 and Keating on Construction Contracts (8th ed) at [10-001]. 10 The builder also has the right to exclude persons from entering onto the works that he or she has constructed until the appropriate time set under the contract. 11 The licence is contractual. However, in appropriate cases (by no means every case) the builder may obtain an injunction in aid of the licence. See eg Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93. 12 None of what I have said has any bearing on the result of this appeal. I felt compelled to say it because I was disturbed by some of the submissions made by counsel for the respondent on the nature of the builder's rights under the contract. 13 BERGIN CJ in Eq: The first appellant, Floruit Holdings Pty Ltd, was the owner of land in Kiama, New South Wales, and the second appellant, Currency Corporation Pty Limited, was the Owner's agent for the purposes of developing the land by the construction of four townhouses (collectively referred to as the Owner). The respondent, Sebastian - Builders & Developers Pty Limited (the Builder), was contracted by the Owner to construct the townhouses pursuant to a Building Contract dated 5 April 2006 (the Contract).

14 The Builder commenced proceedings in the District Court against the Owner and Currency seeking $136,000 for unpaid variations. The Owner and Currency raised defences to the authorised status of those variations and made allegations of defects in the townhouses. The Owner and Currency brought a cross-claim against the Builder for damages for breach of contract, for withholding a Plumbing Certificate (the Certificate) given on 20 December 2006 pending payment of the claimed $136,000. The conditions to the consent for the development included a requirement that the Certificate be given to the Council as one of the pre-requisites to authorisation of the registration of the sub-division. The registration of the sub-division was necessary to enable the owner to sell the townhouses. 15 The Agreed Facts before the trial judge were as follows:

(1) The owner and Currency owed to the builder about $55,000.00 under the Building Contract for variations at all material times.

(2) The builder received the plumbing certificate on about 20 December 2006 and failed or refused to deliver or make available to the owner and/or Currency the certificate until 14 July 2008.

(3) The four townhouses were being constructed for the purpose of separate sale. (4) In order to create separate title it was necessary to obtain a sub-division certificate which could not be obtained without the plumbing certificate.

(5) One of the townhouses, No 14, was sold by contract dated 30 November 2006 but it could not be completed because separate title could not be obtained.

(6) Upon receipt of the plumbing certificate it was forwarded to Kiama Council which issued the sub-division certificate which ultimately enabled completion of the sale.

16 This is an appeal, in respect of which leave was granted on 18 September 2009, from the judgment of her Honour SJ Gibb DCJ in the District Court of New South Wales, on 9 April 2009 in which an affirmative answer was given to the following question for separate determination pursuant to Uniform Civil Procedure Rule 28.2:

Whether clause 23(d) of the Building Contract, when read with other provisions, entitled the Cross-Defendant [the builder] to withhold the Plumbing Certificate having regard to the agreed facts. The Contract 17 The Contract is a standard form BC4 dated February 2006, produced by the Master Builders Association of New South Wales. The Contract consisted of two pages entitled "The Agreement and Particulars of Contract", four Schedules and the general conditions. 18 The Agreement and Particulars of Contract included the following:

WHAT WORK TO BE DONE AT THE SITE: COMPLETION OF 4 NEW TOWNHOUSES (sufficient detail to describe the works eg. New house; renovation of existing house)

19 Schedule 1 of the Contract included the following questions and answers that were required pursuant to the Home Building Act 1989:

4. Is the work to be undertaken covered in the contract, drawings or specifications? Yes

#a Did the Builder provide (i.e. have prepared) the contract drawings and specification detailing the work to be done? Yes 11. Are you aware who is to obtain any council or other approval for the work? Yes

#b Is the Builder responsible for getting any approval? No 20 That Schedule also included:

4 Home warranty insurance The Builder must provide the Client (Owner) with a certificate of home warranty insurance (for work which at the time of contracting had a value of $12,000 or more) before commencement of work and before demanding or receiving payment. 21 Clause 5 of Schedule 1 provided that the Owner could, in limited circumstances, rescind the Contract "even if work under the contract has commenced". 22 Clause 2 of Schedule 2 included Particulars Relevant to Variations and in respect of Labour Rates provided a dollar figure per hour with the condition that: These are to be used with reference to work: (i). carried out by the Builder's employees and (ii). which is in addition to the contract work detailed as at the date of this contract.

Has the work been done or the stage reached to require payment?

(e) Pursuant to clause 20(d) , a stage or aspect of the works is to be treated as reached, and therefore enabling a payment claim to be made, when it is complete except for minor omissions, incompleteness or defects which do not prevent the works from progressing. Where a stage or aspect of work cannot be completed for a reason beyond the Builder's control and which does not prevent the works from progressing then the value of the incomplete work is to be deducted from the progress claim and the resulting balance remains payable as a proper payment claim. 24 Schedule 3 entitled "The Work & Documents Detailing the Contract Work" included the following:

(a) Description of the Work to be completed by the Builder eg as per attached quotation; as per drawings and details in (b) and (c) below. Work will be completed as per Sebastians ( sic ) quotation dated 20 March 2006, and drawings given. Any variation to Sebastian's quote including additional costs if directed by Currency Corp, Sebastian's ( sic ) will not be liable for cost's ( sic ).

(b) Is ANY aspect of the WORK set out in what are the contract drawings and specifications excluded from the CONTRACT WORK and therefore the contract sum? Yes No If yes list below the aspects of the work shown in the drawings or described in the specification which will not be carried out by the Builder as part of the contract work. This, for example, would be work which the Owner will do such as painting, landscaping, fencing, and driveways etc, which may form part of the work to be done under the terms of approval but not work to be done by the Builder . If a quote lists only certain works then the work identified in the applicable quote will be read as identifying the work to be done under the contract. If the quote does, it needs to be specifically referred to here. It should be attached here and signed by the parties. Fencing 25 The general conditions of the Contract included the following:

1. Responsibility of Builder and Results of Construction (a) The Builder will, subject to these Conditions and the work particulars set out in Schedule 3 , execute and complete the works required by the Contract. 26 Clause 1 (b) of the Contract contained the Builder's warranties pursuant to s 18B of the Home Building Act in respect of the standard of the performance and quality of "the work" done under the contract and the suitability and standard of the materials provided by the Builder. Clause 1 (c), headed "Quality of Construction", provided that the "work done" under the Contract would comply with relevant codes, statutory provisions standards specifications and the conditions of the relevant development consent. 27 The Owner was required: to produce to the Builder "prior to the commencement of the works"; documentary proof of certain matters; if requested during the contract period, to produce proof of its capacity to pay for "the works"; to act so to "avoid delay to the works"; to take steps to confirm that "the work under the contract" was acceptable to the relevant authority; and to ensure that the Builder received copies of any approval which affected or were relevant "to the works": cl 2. 28 The Contract provided for the resolution of any alleged discrepancy or ambiguity in the Contract, failing compliance with which the Builder was entitled to "proceed with the work": cl 4. If "approval of works" by any relevant authority was delayed by more than 50 days from the execution of the Contract, either party could terminate the Contract and the Builder was entitled to "a reasonable sum for services performed and reimbursement of all expenses incurred and payable" at the date of termination: cl 5(a). "The works" were deemed to comply with the requirements of any Authority by the issuing of a certificate of compliance or similar document by the relevant authority: cl 5(c). 29 The Owner acknowledged that where a termite treatment system was installed or "forms part of the work", it was a management scheme and that termites could not necessarily be controlled or eliminated: cl 6(a)(i). Where "work involving a renovation or addition to an existing residence or structure" included the installation of a termite treatment system the Builder did not warrant protection from termites, nor: 6(a)(ii) that the termite treatment system installed will prevent the "works" from being affected by an infestation sourced from an existing structure or the environment and through the existing structure. 30 The Owner was solely responsible for having "the works and the property inspected" in relation to termite activity at least once every 12 months: cl 6(b). 31 Clause 8 provided:

8. Possession of the Site, Access, and Site Meetings (a) (i) The Builder is to have exclusive and uninterrupted possession of the site for the performance of work. The possession to be given to the Builder includes access to other parts of the property necessary to enable the Builder to carry out work. (ii) If access is required to any other property in order for the works to be carried out it will be the responsibility of the Owner to do or authorise any actions necessary to gain such access (b) The Owner acknowledges that the site is a work site which, by reason of the work to be undertaken, can be a dangerous place. As such the Owner will comply with any direction of the Builder concerning site access and movement around the site. 32 The Builder was entitled to extensions of time if the "progress of the works" was delayed by matters, conditions or consequences resulting from various circumstances including "suspension of the works"; the ability to "carry out work or requiring work"; weather affecting the "ability to do the work"; and any other matter beyond a reasonable control of the Builder which affected its ability "to do the work": cl 11. The parties agreed that the Builder would comply with all notices required by any statute or regulation of any authority which had "jurisdiction over the works" and that the Builder would pay and indemnify the Owner against any fees under any Act in respect of the "works": cl 12. 33 The Owner warranted that the "site" would allow "the works to be carried out" and the Builder agreed to give prompt written notice if it appeared to it that "the site" would not "support the works": cl 13. The parties agreed that the "works may be varied" by "execution of additional work" or "decreases in or omissions from the works" or changes in the dimensions "of any part of the works": cl 14. 34 The Builder was entitled to "subcontract any portion of the works" but was not relieved from any liabilities or obligations under the Contract in respect of that portion of the works: cl 16(b). The Builder was obliged to provide the Owner with a copy of the Home Warranty Insurance Certificate "for the works where the value of the works" was $12,000 or more: cl 17(a). The Builder was also obliged to insure and indemnify the Owner in respect of injury to persons "arising out of or in the course of the works" and to obtain and effect "Contracts Works Insurance": cl 17(d) and (e). On settlement of any claim under the various insurance policies, the Builder agreed to proceed to "rebuild or repair the works and replace or repair the materials" the subject of any claim: cl 17(f)(i). The parties agreed that the money paid under the policy was to be used to allow the Builder to "rebuild or repair the works", but the owner was to pay the Builder the proper value "of the work done prior to the insured event occurring": cl 17(f)(iii). Clause 17 included the following:

(g) Period and Currency of Insurance (i) The insurances referred to in this Clause are to be effected before the works are commenced and maintained effective in respect of the works until Practical Completion or occupation or use of the works or any portion by the Owner and in respect of Public Liability and of Workers Compensation until the end of the Contracts Maintenance Period.

(h) Occupation or Use by Owner (Owner) Notwithstanding Sub-Clauses (b) and (c), should any portion of the works be utilised by the Owner or a tenant of his or their employees during the progress of the works, the Builder will not be liable for any injury to or the death of any person or loss or damage to property which may be occasioned by reason of the utilisation of the portion of the works by the person or persons.

… (j) Upon the Works Reaching Practical Completion (Owner) The works will be at the risk of the Owner in all respects once Practical Completion is reached or from the date possession is taken where the circumstances referred to in clause 22(e) arise. The Owner will be solely responsible for insurance coverage of the works in either of these events. 35 The Note to clause 20 of the Contract encouraged the parties to make smaller more frequent claims as a good way to review and monitor "the work and its cost". The parties agreed that a progress payment claim by the Builder was to show, amongst other things, the "value of the contract work performed" to the date of the claim and the proper GST charge relevant "to the works to which the claim" related: cl 20(b). The parties also addressed the way to determine whether "a stage or aspect of the works" had been reached, for the purpose of fixing the amount to be paid to the Builder in respect of a progress payment claim: cl 20(d). The Builder was entitled to "suspend the works" if the Owner failed, amongst other things" to make payment of a progress claim: cl 21. 36 Clause 22 provided as follows: 22. Practical Completion (a) Practical Completion is that stage when: (i) the works are complete except for minor omissions and defects which do not prevent the works from being reasonably fit for their intended use; or … For the purposes of this Clause the works that need to be Practically Complete do not include the results of any labour or materials which are to be or were supplied or fixed by the Owner or work done or to be done by the Owner.

(d) In the event of the Owner not complying with the provisions of Sub-Clause (c), the works will be deemed to have reached Practical Completion. Occupation or use will amount to Practical Completion (e) (i) Should the Owner or any tenant or their employees or agents take possession of the works or any part of the works without the written agreement of the Builder, the date of Practical Completion will be the date possession is taken, unless Practical Completion has already been reached.

(a) When Practical Completion is achieved, the Builder is entitled to and must receive the unpaid balance of the Contract price or sum together with any other monies which are payable in connection with this Contract. (b) The amount due under this Clause must be paid to the Builder within two (2) days of a written request for payment due because practical completion has been reached. This request is to give brief, accurate particulars of the claim. (c) Should the Builder not receive from the Owner any payment or part of any payment on Practical Completion by the due date the Builder is entitled to interest at the rate specified in Item 5(d) of Schedule 2 . If it is left blank then 10% pa will apply. (d) The Owner is not entitled to take possession of the works nor receive the keys until payment to the Builder of all monies due under this Contract has been made. (e) The Builder , at the Owner's cost is entitled to and required to take all actions to secure the property so as to prevent entry, other than by normal means, prior to final payment being made. 38 Clause 24 provided for the Builder's obligations during the Contract Maintenance Period. The Builder was required to make good defects or faults that the owner identified as allegedly arising out of "workmanship or materials provided": cl 24(a)-(c). Matters "caused by the use or occupation of the works by the Owner" were expressly excluded from the Builder's obligations: cl 24(f). Clause 25 dealt with the Owner's maintenance obligations after Practical Completion and included the following:

(a)(i) The Owner is required to and agrees to carry out ongoing maintenance to the property and specifically the works from the date of Practical Completion. Failure to do this properly and adequately will render the Owner liable for consequential damage, loss or expense in relation to the works. 39 The Contract also included the following:

31. Charge on Land The Owner, subject to the Act … hereby charges the parcel of land on which or on part of which the works are to be or were erected with the due payment to the Builder of all moneys that may become payable to the Builder by virtue of this Contract or otherwise arising from the carrying out of the works. 40 Clause 32, Definitions, included the following:

(i) "Work", "works" or "work under the contract" means the work that the Builder is required to carry out and complete under the contract. It includes variations, rectification, and the provision of materials required to be supplied by the Builder .

The Certificate 41 The Certificate was signed on 20 December 2006 and included the following: In respect of authorised work carried out by me at the abovementioned property I certify that:

(i) The work has been completed in accordance with the Permit issued, or deemed given by the Local Authority;

(ii) The work has been installed using only authorised pipes, fittings and fixtures;

(iii) The completed work has been tested as required by the Local Authority and has passed such tests;

(iv) In my opinion the work complies with the relevant Local authorities ( sic ) Act, Regulations, By-Laws and Codes of Practice.

If any defect is found in the work carried out by me within a period of twelve (12) months or within the time specified by Local Authorities, from the date of completion, and the Local Authorities Inspector for Plumbing and Drainage certifies that in his opinion the defect is due to faulty workmanship or defective materials, then I undertake to rectify such work at my sole expense, if so directed by the Local Authorities Inspector /or any time specified by the Local Authority.

This copy is to be forwarded to the Owner/Agent within 2 working days of being completed.

Consideration 42 The trial judge's affirmative answer to the separate question was based on the finding that "The certificate being part of, as well as being the embodiment of part of, the works, its use would constitute taking of possession within the meaning" of clause 23(d) of the Contract. The Owner submitted that the trial judge erred in extending the meaning of the expression, "the works", in clause 23(d) of the Contract to include the Certificate.

43 The Builder submitted that the Certificate allowed the Owner the same physical control, or de facto possession, over the works as that provided by a key to enter the premises. In this regard the respondent relied on Thomas v Metropolitan Housing Corporation Ltd [1936] 1 All ER 210 in which the Court of Appeal (Slesser LJ, with whom Scott LJ and Eve J agreed) dismissed an appeal from the trial judge's finding that a tenancy came to an end by the delivery of a key to the premises to the landlord's agent's office. The Builder relied upon the following passage of Scott LJ's remarks at 216:

Actual possession of empty premises, or of chattels which are locked up within a building or in a package of some sort, is retained by retaining the key. Possession of the key gives actual possession. The reason why there is so little law on the point is, I think, that it is difficult to imagine that anything to the contrary could ever have been contended.

44 The Builder submitted that the provision of the Certificate to the Owner would be analogous to providing a key to the premises because it would enable the Owner to sell the townhouse. 45 The Builder also relied upon Commissioner of Land Tax v Manors of Mosman Pty Ltd (1994) 34 NSWLR 94. That was a case involving the sale of retirement units that were sold off the plan. The respondent objected to an assessment of land tax on the ground that at the relevant taxing date the purchasers of the units were the owners of the units pursuant to s 26(1)(a) of the Land Tax Management Act 1956 which deemed a purchaser to be the owner of land "so soon as he has obtained possession of the land". Sheller JA, with whom Kirby P and Handley JA agreed, said at 99:

In Pollock and Wright, An Essay on Possession in the Common Law (1888) at 26-27, the co-author Sir Frederick Pollock, in considering the nature of possession, refers to three distinct elements. The first is physical control, detention, or de facto possession. This, the author says, is an actual relation between a person and a thing, a matter of fact. The second is legal possession, the state of being a possessor in the eye of the law (at 26): "This is a definite legal relation of the possessor to the thing possessed. In its most normal and obvious form, it coexists with the fact of physical control, and with other facts making the exercise of that control rightful. But it may exist either with or without detention, and either with or without a rightful origin."

The third is the right to possess or to have legal possession (at 27): "…This includes the right to physical possession. It can exist apart from both physical and legal possession; it is, for example, that which remains to a rightful possessor immediately after he has been wrongfully dispossessed. It is a normal incident of ownership or property, and the name of 'property' is often given to it."

In the case where an agreement has been made for the sale of taxable land, the legislative scheme, whereby the purchaser is deemed to be owner as soon as he has obtained possession and the vendor to remain owner until possession of the land has been delivered to the purchaser and part of the purchase money has been paid, originates in New Zealand legislation which was adopted in Australia in the Land Tax Assessment Act 1910 (Cth). In Highlands' case (at 199), Starke J held that the possession spoken of in the section was a de facto possession referrable to the agreement for the sale of land, and not the right to possess, or to have legal possession. In the case of land, in contrast to chattels, it may be difficult to determine whether a purchaser has assumed de facto possession or whether de facto possession has been delivered to the purchaser. Starke J quoted from Pollock and Wright (at 30). It is not possible, as a matter of fact, to possess a house or vacant land in the way a chattel is possessed: "…There can only be a more or less discontinuous series of acts of dominion… When the object is as a whole incapable of manual control, and the question is merely who has de facto possession, all that a claimant can do is to show that he or someone through whom he claims has been dealing with that object as an occupying owner might be expected to deal with it, and that no one else has done so."

46 The Builder also relied on Cam & Sons Pty Limited (In Voluntary Liquidation) v Commissioner of Land Tax (1964) 112 CLR 139, another case dealing with s 26 of the Land Tax Management Act 1956. The principles in these cases are not controversial. What is controversial is the Builder's submission that giving a Certificate to the Owner would be equivalent to the Owner taking possession because the Owner would be able to sell the townhouse. This controversy is to be settled by determining whether the expression, "the works", in clause 23(d) of the Contract includes the Certificate. 47 This Contract was for the commercial development of four townhouses and requires a common sense businesslike interpretation: McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 per Gleeson CJ at p 589 par [22].

48 The terms "work", "works" and "work under the contract" are used in different contexts throughout the Contract. For instance in sub-clauses 1(b) and (c) the term "work done under this contract" refers to the Builder's obligations to perform the building work to complete the development in accordance with requisite standards. In some clauses of the Contract the term "works" is used to mean the performance of the building works to complete the works, being the constructed buildings, for instance clauses 8(a)(1); 10(a); and 13(a). However in other parts of the Contract it is used to refer to the completed development or buildings. Clause 6(a) in relation to termite treatment is a good example of this. The use of the term "contract work" in clause 6(a)(ii)(a) is a reference to the work done by the Builder, being the installation of a termite treatment system, in respect of which the Builder was not giving a warranty. However in sub-paragraph (b) the use of the expression "works", as parenthesised, is a reference to the completed product - being the renovated residence or the addition to the existing residence. It was that completed product that the Builder would not warrant was protected from infestation by the installed termite treatment system. Other examples of the use of the expression as meaning the product, the townhouses, are: clause 13 dealing with whether "the site" would "support the works", the physical load of the townhouses; clause 17, dealing with rebuilding "the works", that is the finished townhouses; and clause 31, dealing with the charge on the land "on which the works are to be or were erected", clearly referring to the buildings as constructed or erected. 49 Clause 23(d) was in the context of the regime for payment of the Builder when Practical Completion was achieved. The Builder was entitled to payment of the unpaid balance of the Contract price and any other monies which were payable in connection with the Contract within two days of a written request for payment. If the Owner did not make payment within two days, then the Builder was entitled to charge interest on the outstanding amount at 10% per annum. The Builder's entitlement to payment was secured by a prohibition on the Owner from taking possession or receiving the keys to the "works" until the Builder was paid. That position was enhanced by the Builder's further entitlement to "secure the property so as to prevent entry" until final payment was made.

50 Clause 8 of the Contract provided exclusive possession of "the site" to the Builder for the performance of work. The "site address" was the same address as "the property", but it is clear that "the site" was not intended to be the whole of "the property" by reason of the provision that possession of the site included "access to other parts of the property" necessary to enable the builder to carry out work: clause 8(a)(i). But when it came to payment of the Builder, the Owner could be prevented from "entry" to the "property", not merely the "site", until the Builder was paid. The costs incurred by the Builder to secure "the property" to prevent entry were to be paid by the Owner. The Builder's contractual right for non-payment was to exclude the Owner from the "property", thereby preventing the Owner from taking possession of or receiving the keys to "the works" until he was paid: cl 23(e). This sub-clause, together with the reference to the provision of a key in clause 23(d), provides support for the conclusion that the expression, "the works", in clause 23(d) referred to the buildings, as constructed or partially constructed, rather than the work, or building services, including the provision of the Certificate, provided by the Builder. 51 Although the expressions "work" and "works" are used in different contexts throughout the Contract, the only sensible and businesslike interpretation of the word "works" in clause 23 (d) is that it means the completed buildings, the townhouses, and does not include pieces of paper, including certificates and insurance policies that may be held by the Builder either at the site or off-site. The inducement for prompt payment of the Builder was the contractual right of the Builder to lock the Owner out of the "property" on which the "works" were erected or constructed. 52 The Builder's submission that the provision of the Certificate to the Owner was equivalent to the Owner taking possession of the "works" because it enabled the Owner to submit the Certificate to the Council to obtain the registration of the sub-division and complete the sale of one of the townhouses does not accommodate any discretion in the Council to refuse to register the sub-division plan for reasons that may not have anything to do with the Certificate. In any event that submission is inconsistent with the plain words of the Contract. The provision of the Certificate to the Owner may have fallen within what was described as the "work" the builder was required to do, however it is not part of "the works" as that expression is used in clause 23 (d). 53 The trial judge fell into error in finding that the "certificate being part of, as well as being the embodiment of part of, the works, its use would constitute taking of possession within the meaning" of clause 23(d) of the Contract with the consequential affirmative answer to the separate question. Proposed Orders 54 The orders I propose are as follows:

1. The appeal is allowed. 2. Set aside the orders of the District Court made on 9 April 2009 and the affirmative answer to the separate question. 3. The answer to the separate question is "No".

4. The parties are to agree on an appropriate costs order and file it with the Registry by no later than 8 October 2009. Should agreement not be reached, leave is granted to the parties to file a Notice of Motion seeking cost(s) orders by no later than 9 October 2009.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.