Ganghui Pty Ltd v YTO Construction Pty Ltd [2023] NSWSC 729 | Case summary

Supreme Court of NSW|2023-05-11|Before: Stevenson J

Solicitors: Tom Howard Legal (Plaintiff/Cross-Defendants) Armstrong Legal (Defendant/Cross-Claimant) File Number(s): 2020/220429

JUDGMENT

On 18 September 2017, the plaintiff, Ganghui Pty Ltd ("the Developer"), entered a contract ("the Contract") with the defendant, YTO Construction Pty Ltd ("the Builder"), to construct an apartment complex in Ashfield comprising 91 residential units and seven retail lots ("the Project"). The development comprised two buildings, a three-storey and an eight-storey tower. The Contract price was $32.5 million. The Contract specified that the date for practical completion was 25 February 2019. An interim occupation certificate was issued on 18 April 2019 and a final occupation certificate was issued on 29 April 2019.
The Builder provided a "Tender Submission" for the Project on 10 March 2017 ("the Tender").
On 12 July 2017, the Builder and the Developer's Principal's Representative, then CPDM Pty Ltd, executed a "Letter of Intent".
Pursuant to the Letter of Intent, the Developer paid the Builder a deposit of $800,000, following which the Builder commenced work on the Project.
The Contract, executed two months later on 18 September 2017, provided, amongst other things, that the terms of the Contract applied to all works even if performed prior to the date of execution of the Contract. [1]
On 22 March 2019, the Developer and the Builder entered a further, handwritten, agreement ("the Handwritten Agreement"). The Builder does not dispute that it is bound by the Handwritten Agreement.
The Contract made provision for payment in cl 37. Clause 37.4 provided for the Builder to give to the Developer's Principal's Representative a Final Payment Claim and for the Developer, by its Principal's Representative, to respond to a Final Payment Claim by serving a Final Payment Certificate.
On 27 May 2020, the Builder served on the Developer a Final Payment Claim for some $6.256 million inclusive of GST. On 10 June 2020, the Developer served on the Builder a Final Payment Certificate contending that it owed the Builder "$Nil" and that the Builder owed it some $1.89 million inclusive of GST.
The Developer sues the Builder for a debt said to arise under the Handwritten Agreement and for the amounts that it contends are due to it under the Final Payment Certificate. The Developer accepts that the amount it claims under the Final Payment Certificate is amenable to adjustment should the Builder establish any "erroneous inclusion or exclusion of any work" for the purpose of cl 37.4(d)(iii) of the Contract.
The Builder contends for the existence of what it describes as "the Arrangement" and "the Further Arrangement".
The Builder also contends that the Developer made five representations, one of which involves the existence of the Further Arrangement, which representations are said to constitute misleading or deceptive conduct for the purpose of s 18 of the Australian Consumer Law. [2]
The Builder claims an entitlement to a quantum meruit. In closing submissions this entitlement was said to arise from its claimed entitlement to have the Contract set aside by reason of the Developer's alleged misleading or deceptive conduct, or from its entitlements under the Handwritten Agreement.
The Builder also contends the Arrangement and the Further Arrangement give rise to an estoppel preventing the Developer from "resiling from" the Arrangement or the Further Arrangement.
Finally, the Builder seeks to recover what it contends to be loans from the Builder to the Developer of $600,000 and of $151,157.40.

Decision

The Developer's claim under the Handwritten Agreement succeeds.
The Final Payment Certificate was not effective.
The Builder's claims concerning the alleged Arrangement and Further Arrangement and its claims under the Australian Consumer Law, and for variations, fail.
The Builder's claims on a quantum meruit and for an estoppel are not made out.
The Builder's claim in relation to the alleged $600,000 loan fails. It has already received the benefit of the $151,157.40.
Because of the manner in which the Builder's claims are structured, I shall deal first with them, and then turn to the Developer's claims under the Handwritten Agreement and under the Final Payment Certificate.

The incident involving the Court Interpreter

First, however, I will deal with an incident that occurred during the hearing, involving the Court Interpreter, Ms Yu Gao, during the evidence given by the director of the Developer, Mr Fu Ming (known as "Frank") Guo.
The incident was peripheral to the issues in the proceedings, save that the Builder contends it reflects on Mr Guo's credit. It is nonetheless necessary that I deal with this incident in some detail, as it has potentially serious implications not only for Mr Guo, but also for Ms Gao and for Mr David Lee, a friend of Mr Guo's who assisted Mr Guo prior to and during the hearing.
To avoid confusion between Ms Gao and Mr Guo, I will refer to Ms Gao as "the Interpreter".
Mr Guo gave his evidence in Mandarin, and, initially, through the Interpreter. After the incident I am about to describe, Mr Guo gave his evidence through a different interpreter.
The Interpreter is accredited to interpret Mandarin by the National Accreditation Authority for Translators and Interpreters ("NAATI"). The Interpreter was jointly retained by the parties to interpret for Mr Guo, and also for the director of the Builder, Mr John Yuan. Mr Yuan gave his evidence after the incident I am about to describe and used the second interpreter.
As Mr Guo speaks imperfect English, throughout the hearing he was assisted by Mr Lee. Mr Lee is also an accredited Mandarin interpreter with NAATI. Mr Lee had sight translated each of the affidavits affirmed by Mr Guo in the proceedings and had sworn an interpreter's affidavit in relation to each of those affidavits.
Just before the commencement of the third day of the hearing, 28 April 2023, the Interpreter approached my Tipstaff and told her that she had heard Mr Lee say to Mr Guo during an adjournment the previous morning: "You should not say you only had 800,000."
The relevance and context of this is that Mr Yuan alleges that between February and June 2017, Mr Guo represented to him that he, Mr Guo, had "$6 million in equity for the project". This is one of the representations allegedly made by the Developer that the Builder contends was misleading or deceptive.
In that context, the transcript records Mr Guo giving this evidence on the previous day, 27 April 2023, shortly before the Interpreter says she heard the words she reported to my Tipstaff: "Q. Am I right that you've said to his Honour that you had less than 6 million available in Australia, but you had more available in China, is that correct? A. INTERPRETER: From my memory, that's it. But if in the - it to be accurate I need to check the accounts. How I told the funding people I forgot - I forgot - I forget about that now, yeah. Q. Yesterday I asked you this question. CORSARO: Transcript 63, line 47. Q. You had no money in Australia, your answer was 'So, my money is from China'. A. INTERPRETER: So like I must have a bit of money in Australia, maybe $800,000, $200,000, so I was keeping up with the payment until December. So, last night I also checked my record. I roughly made about $2 million payment to YTO. Q. Is your evidence that you had $2 million in Australia? A. INTERPRETER: So, if you ask me to tell an exact figure I cannot do that. I have to check the accounts. So, if you ask this way I cannot answer. Q. You don't know what money you had in Australia? A. INTERPRETER: So at this stage I cannot tell you how much money I had back then. I need to check with the record accounts." (Emphasis added.)
A short time later, Mr Guo said he wanted to locate a document relevant to these questions.
I adjourned to enable this to happen. It was during that adjournment that the Interpreter stated she heard Mr Lee make the statement referred to at [27].
Immediately after the adjournment, Mr Christie SC, who appeared with Mr Ilkovski for the Developer, and I had this exchange: "CHRISTIE: Might I just raise an issue about - I'm sorry to have to do this - about a certain interpretation that took place? I don't know if it's best if the interpreter and the witness be in the witness box, but the issue is simply this: I've been told by Mr David Le[e] who's a fluent Mandarin speaker that the witness did not say he only had $800,000, he said every now and then he would make payments in amounts like $800,000 or $200,000, and that by December when White & Partners (as said) released the funding, he had paid YTO more than $2 million, but the key part I think's the first sentence where according to Mr David Le[e] he did not say he only had $800,000. HIS HONOUR: How am I to resolve that? CHRISTIE: I think the only way that one can resolve that is for the witness to go back into the witness box and to be asked the question again, perhaps by your Honour or by my learned friend, and ask the interpreter to double check that her interpretation is correct. Because to be fair it is a difficult job for the interpreter without a break to interpret for an hour and a half straight, so mistakes may happen." (Emphasis added.)
I am not able to determine whether Mr Lee was correct to say that Mr Guo had said, in the passage I have set out at [29], that "he would now and then make payments like $800,000" rather than, as the Interpreter translated, "I must have a bit of money in Australia, maybe $800,000". As emerges below, the Interpreter agreed that she has mistranslated some answers given by Mr Guo, particularly as to technical building terms. The competing English translations of the answer given by Mr Guo both mention the figure $800,000 but are otherwise quite different. I do not know whether, in Mandarin, the position is different.
At the time of Mr Lee's report to the Developer's legal team about the Interpreter's alleged mistranslation of Mr Guo's evidence, he may have already spoken to Mr Guo about that matter. But, obviously, he did not then know what the Interpreter would the next day report to my Tipstaff as to the conversation he had with Mr Guo during the adjournment. I see no reason to doubt that Mr Lee's genuine belief was that Mr Guo had, in the relevant part of his evidence, said what Mr Christie told me Mr Lee had told him, rather than what the Interpreter had translated: that is as appears in the transcript. I do not see how, contrary to the submission made by Mr Corsaro SC, who appeared for the Builder, this could be seen as "self-serving".
Arising from Mr Christie's suggestion that Mr Guo "be asked the question again" I had this exchange with Mr Christie and with Mr Corsaro: "CHRISTIE: Perhaps both versions could be put and ask the witness which is the correct one and ask the interpreter to be very specific in interpreting? HIS HONOUR: I think you should both agree in the next minute on the question that I should or perhaps - that you suggest should be asked. CORSARO: I'll do it. I'll just clarify. I'll--"
A short time later I had this exchange with the Interpreter, following an exchange between counsel: "CHRISTIE: Why don't you put the two versions to him? CORSARO: Please let me do it my way. CHRISTIE: Sure. HIS HONOUR: I'm going to explain something to the interpreter too. Madam Interpreter-- INTERPRETER: Yeah, yeah. HIS HONOUR: --what I'm being told is that-- INTERPRETER: Yep. HIS HONOUR: --the way you translated what Mr Guo said about a particular question may not have been accurate. Now I don't know whether it was or it wasn't. So the question's going to be put again."
Mr Corsaro continued to cross-examine Mr Guo about the topic of the funds he had available for the Project, but did not in terms return to the question of the $800,000.
The following day, 28 April 2023, and after the Interpreter approached my Tipstaff, I raised this with counsel at the outset of the hearing. We had this exchange: "HIS HONOUR: I need to raise something with counsel. The interpreter has spoken to my tipstaff and said that she saw and heard Mr Le[e], outside Court, tell Mr Guo what he should and should not say about - something about, I think it was how much money he had in his account at the relevant time. If that did happen that's a very serious matter, so I am going to give you, Mr Christie, a chance to get some instructions about that. I have not spoken to the [Interpreter [3] ], she, very properly, thought that she should let me know. Apparently, she suggested I might like to see her privately. I've not done that, of course, so I have not spoken to her about what she has reported. If there's to be any controversy about that I might have to ask her [to] give evidence about it, but let's just take it step by step. CORSARO: Can I just say this is relevant because I was told just a moment ago that there are no documents in answer to my call in relation to the bank statements which I asked about yesterday. HIS HONOUR: As best we can work it out, the evidence that Mr Guo gave that is relevant to this matter is at p 86 at the transcript. That's speculation. CHRISTIE: I have a practical problem. The only way I can speak to Mr Guo, if I'm permitted to do so, if that's what your Honour has in mind, is through Mr Le[e], and-- HIS HONOUR: Mr Le[e]'s in Court, as I understand it, and if that's what did happen that may have implications for him, so I'll have to leave it up to you to do whatever you can, but I think it needs to be sorted out now. CHRISTIE: Of course. SHORT ADJOURNMENT CHRISTIE: I spoke to Mr Le[e]. But, just out of fairness, would your Honour mind just reading one more time exactly what your Honour read before? HIS HONOUR: I haven't read anything yet. CHRISTIE: I'm sorry. HIS HONOUR: What has been reported to me, indirectly, by the interpreter, I spoke to my tipstaff, that she heard and saw, or at least heard, Mr Le[e], and this is the language used to me, what he should and shouldn't say about the figures of $800,000 and $200,000. CHRISTIE: I'm instructed by Mr David Le[e] to say that is incorrect. HIS HONOUR: What we'll do is this; I'm going to direct Mr Le[e] to leave the Court; I'm going to direct that he have no communication with Mr Guo until Mr Guo's cross-examination is concluded. We'll now proceed with the cross-examination and with the examination and any other witness who requires an interpreter, and I'll then ask the interpreter to give evidence about what I've mentioned to you. I'll then consider whether I should ask the interpreter to give evidence as to what did happen. Let's just leave it there for the moment."
Following this exchange counsel submitted, and I agreed, that as there was going to be controversy about what the Interpreter had reported to my Tipstaff, the preferable course was to engage a different interpreter for the balance of the hearing, including the balance of Mr Guo's evidence in cross-examination. That is what happened.
Once the new interpreter arrived, Mr Guo's cross-examination continued.
Mr Corsaro took the matter up with Mr Guo: "Q. What Mr Christie told you was that you are not to speak about your evidence or about the proceedings, while I was questioning you, correct? A. INTERPRETER: Yes. Q. Did you take that seriously? A. INTERPRETER: Truth, seriously? Yeah, I take. Truth, seriously? Yes, I pay special attention to it. I asked David [Lee] about it and David said at this point in time, he cannot really talk to me. So, on the Chinese law, maybe-- Q. I don't want to know about Chinese law. HIS HONOUR: I'd like to know what was said. Q. What did he say? A. INTERPRETER: So, on the Chinese law, maybe interaction of this nature is allowed. But once you brought that to my attention, I specifically had a cautionary understanding. CORSARO Q. You breached that, didn't you, because you spoke to Mr Le[e]? A. INTERPRETER: I didn't talk anything about the case at all. We just grabbed lunch together, just general chat; he paid special attention to it; I paid special attention to it as well. If anything concerning the case was talked about, then it was yesterday, I think I just raised the question, something like that. Q. I'm sorry; I don't understand? A. INTERPRETER: May I be allowed to continue? May I be allowed to-- Q. I haven't stopped you yet. What do you want to say? A. INTERPRETER: What I want to say is just yesterday, I asked him what's-- Q. You now want to say to his Honour, despite what you've just said, that you did speak to him about your evidence? A. INTERPRETER: Ask him about something. Ask him about something. HIS HONOUR Q. What did you ask him? A. INTERPRETER: So, just yesterday and the day before yesterday, Mr Barrister kept asking me about 'Hey, do you have the six million in your possession?' So, I asked him is this question important. He didn't answer whether it's important or not; he just said it was talked about a lot. But I had this feeling, I had this feeling indeed, that this six million business is really important. So, I said to that guy, what's his name? Yeah, I said to that guy, David, I said 'Yeah, regarding this one, one question did come to mind. It really require me to give some serious recollection of it,' and he agreed, 'Yeah, you need to give some serious thoughts.' So, so, at noon yesterday, you know, I was coming late, so I was having lunch with him. So regarding the six million, thing, so I went back and I did my own search about this matter. So, may I ask your Honour can I talk further about this six million thing? HIS HONOUR Q. All I want to know is what you said to Mr Le[e] and what he said to you? A. INTERPRETER: Just what I said. Q. Did Mr Le[e] tell you what you should and should not say in the evidence you're giving? A. WITNESS: No, no, no, no, no, no. CORSARO Q. He told you, didn't he? A. INTERPRETER: So, what he said was, right, 'So, which, whatever, you want to show to his Honour, you show it. You have it, you have it. You don't have it, you don't have it.' A. WITNESS: Yes. Q. He told you, didn't he, that you should not say that you had $800,000. That's what he told you, correct? A. INTERPRETER: No, no, no. $800,000 didn't even happen. Nothing happen like that. HIS HONOUR Q. Did you discuss with him the figure of $800,000 or $200,000? A. INTERPRETER: No. No."
I asked my Tipstaff to ask the Interpreter to prepare a statement as to what she had seen and heard. When the document was to hand, I arranged for it to be given to counsel. I did not then read the statement.
The hearing continued.
I heard closing submissions on 9 May 2023.
In the meantime, the Builder had arranged for the Interpreter to make an affidavit annexing the statement she had sent my Tipstaff. Each of Mr Guo and Mr Lee also made affidavits. They denied that the conversation at [27] had taken place.
On 11 May 2023, each of the Interpreter, Mr Guo and Mr Lee were cross-examined on their affidavits.
There was no objection to this course. That was, I assume, because it was accepted that as Mr Corsaro had put to Mr Guo that the Interpreter's evidence of what Mr Lee had said to Mr Guo during the adjournment on 27 April 2023 was correct, and because Mr Guo had denied that this was so, the credibility rule in s 102 of the Evidence Act 1995 (NSW) did not apply to the Interpreter's evidence.
In her statement, the truth of which she affirmed in her evidence before me, the Interpreter said: "27 April 2023 Day 2 During the brief adjournment before lunch, maybe after 11:00am, when Mr Guo was allowed to go back to his seat to fetch some documents. We were all sat at the back row in the courtroom 7C. I overheard: Mr Lee said 'you should not say you only had $800,000' in Mandarin. Then I think Mr Guo gave some explanations about why he said the figure 800,000 and he mentioned the number '2 million'. … I was able to hear the sentence 'you should not say you only had 800,000'. Firstly, because the voice was a bit loud, so I was able to hear it. Secondly, when I heard this sentence, I mostly focused on the meaning and I felt odd, as Mr Guo never said, 'I had 800,000' and I never interpreted it as 'I had 800,000'. But I did not think much about it at that moment. From my memory, Mr Guo said 'I must have the money. I might have 800,000. I might have 200,000. Because I was able to make construction payment until December.' Later I checked my notes … it's pretty much the same as my memory." (Emphasis in original.)
Later in her statement, the Interpreter said: "Additional things I want to say to your [H]onour: (Sorry for being non-responsive to your question) 1. From Day 1, it was a[n] unusual situation. 2. I specifically mentioned that interpreters usually only work for one party only. I was still instructed to interpret for both parties. So I was in a bit awkward position from the very beginning. The plaintiff's legal team did not want me to have access to their documents for preparation. I was too occupied and quite stressful [as said] and forgot to ask if the defendant's legal team would show me some documents for preparation. 3. In hindsight, if like other cases, I only interpret for the defendant, I would sit far away from Mr Guo and Mr Lee, I would not hear anything. 4. If I only interpret for the plaintiff, I would be allowed to sit next to Mr Guo and I should be able to hear everything between Mr Guo and Mr Lee. 5. I was only there to interpret to the best of my ability. 6. I was not there to eavesdrop. 7. For interpreter's code of conduct, apart from confidentiality, impartiality, we also have professional solidarity to hold up. 8. So the last thing I want to do is raising this issue about a fellow interpreter who I just met with more experience and more seniority than me, as I fully understand the serious nature of the issue I raised. 9. I actually considered: should I keep quiet and just go on with the remaining two days' of interpreting? 10. It was really difficult for me to finally decide to speak up. 11. I just felt I cannot live with what I heard without raising the issue, as apart from us, the Mandarin speakers, no one else understand Mandarin in the courtroom as your [H]onour mentioned. 12. I actually feel sad the way things have turned out and what I had to do." (Emphasis in original.)
The Interpreter was clear under cross-examination that her recollection of what Mr Lee said to Mr Guo was correct. She gave this evidence: "Q. It's fair to say that the conversations you heard were in whispers, correct? A. Yeah, so I mention in my affidavit the sentence, like the few sentences I heard because it's bit louder than whispering, so that's why I heard, yeah. So, yeah. Q. Do you agree with me that they were in whispers? A. Yeah, but the sentences I heard, it's - I can hear that because a bit louder than whisper, yeah. So-- Q. But it was a whisper, wasn't it? A. Sorry? Q. It was a whisper, wasn't it? A. Yeah, to clarify, suppose most of conversation are in whispering. The sentences I was able to hear, because they, they louder than whispering, yeah, so it's a quite loud sentence, that's why I was able to hear. Q. When you heard that conversation, his Honour wasn't sitting, was he? A. No, it a, like, adjournment. Q. And there was other people in the courtroom, correct? A. Yes. Q. Other people speaking? A. Yeah. Q. Many conversations taking place, correct? A. Yeah. Q. Are you telling his Honour that you listened to that specific conversation? A. Because that particular sentence, like, that's in Mandarin, my native language and it's a bit louder, as I mentioned, so that why I was able to hear, sure. Q. Can I respectfully suggest to you-- A. Yeah. Q. --it's possible you misheard the conversations you've referred to, do you accept that? A. I don't accept that. I clearly hear what I hear. Yeah."
Mr Guo was also cross-examined. He again denied that Mr Lee had said anything to him about the $800,000.
In his affidavit Mr Lee said that: 1. he attended the hearing "purely as a friend" and support person for Mr Guo "due to his difficulties with the English language"; 2. he is not a "developer or a business person" and did not have "any special knowledge of [Mr Guo's business]; 3. he understood his role in court to be to act as Mr Guo's interpreter, to enable Mr Guo to (1) understand what was being said in the courtroom and (2) give instructions to his legal team; 4. he was aware of, and complied with, his obligation not to talk to Mr Guo about Mr Guo's evidence during the course of Mr Guo's cross-examination; 5. the Interpreter's interpretation was, on multiple occasions, incorrect or mumbled; 6. Mr Guo told him he was finding it very hard to understand the Interpreter's interpretations, and that he was confused as to what he was being asked; 7. as a consequence of (e) and (f) above, Mr Lee sought to summarise what had been said in the course of Mr Guo's cross-examination to help Mr Guo understand what was going on; and 8. in providing that summary, he did not at any point attempt to tell Mr Guo what evidence Mr Guo should give.
It is clear that Mr Lee and Mr Guo had many informal conversations during the course of the hearing. They had lunch together and, on a number of occasions, Mr Lee told Mr Guo that he thought that the Interpreter had mistranslated Mr Guo's evidence.
Thus, Mr Lee gave this evidence: "Q. So you told him that what was happening in court had been misinterpreted, is that correct? A. On a few occasions, yes, sir. Q. Was that at lunch? A. I cannot recall when, but even, even whilst during the, the break period, I, I was doing that. Q. Let me understand. During the course of cross-examination, you did speak to him about his evidence, is that correct? A. Yes, by way of interpreting what happened. Q. So, you said something along these lines, did you: 'Frank, what is being said there is wrong', is that correct? A. No, I didn't. I said what was interpreted was not correct."
Mr Lee also agreed that he did speak to Mr Guo about figures of $800,000 and $200,000.
Thus he said, immediately after the passage of evidence that I have set out: "Q. Yes, and, in that context, did you talk about $800,000 and $200,000? A. I may have mentioned those figures. I can - I honestly cannot recall what figures I mentioned, sir, because what was mentioned during that day, at the time, I might remember, but I cannot recall."
A little earlier, Mr Lee had given this evidence: "Q. Did you tell him about the significance of the $6 million? A. Sir, as I said, I only interpreted what was being said in court. Sometimes, I do a summary interpreting because, afterwards, it wouldn't be sentence by sentence interpreting. So, I would not say I told him anything. I just acted as an interpreter, sir. Q. Do you recall the conversation about the $6 million occurring in the context of the discussion about the figure of $800,000 or $200,000? A. Sir, I'm sure I mentioned the, the figures, 600,000 and 200,000, or even $800,000. But that was because I, I earlier in, during the court hearing, I submitted a little note to the lawyers to say I think what was being interpreted was incorrect, and the, the inaccurate interpreting earlier in court made Frank confused, so, and he wanted to reconfirm what was happening. I may have mentioned those figures but I do not recall exactly how I mentioned them. I, I - as I said, sir, I always just interpreting. Q. Did you have lunch with Mr Guo? A. Yes, yes, sir. Q. And did the lunch that you had with him concern a discussion about $6 million? Yes or no? A. We talked about what happened in court; that would include the figure, $600,000, because that was the issue that was being mentioned in court, and for which I submitted a little note to say that I disagree with what was being interpreted earlier in court. Q. Is the answer to my question 'no'? A. Yes, I did mention the, the figure $600,000 I think. But that was purely in the context of interpreting - summarise the interpreting." (Emphasis added.)
In the passage I have emphasised, Mr Lee was referring to the communication with the Developer's legal team that led to Mr Christie making the statement, after the adjournment on 27 April 2023, to which I have referred at [32] above.
Mr Lee referred in this evidence to "inaccurate interpreting" by the Interpreter that had made Mr Guo "confused" and to Mr Guo having "wanted to reconfirm what was happening". Mr Lee said that in that context, he may have "mentioned" the figures of $600,000, $200,000 and $800,000 to Mr Guo.
Each of the Interpreter and Mr Lee presented in evidence as being confident as to the accuracy of their recollection.
As I have set out above, the Interpreter was clear that she had not misheard what Mr Lee said to Mr Guo and emphasised that because what she heard was in her "native language", she had been able clearly to hear what was said despite other noise in the courtroom during the adjournment.
Equally, Mr Lee was adamant that he had not said the words the subject of the Interpreter's evidence.
Mr Christie submitted that: "While [the Interpreter] denied that she could have been mistaken as to what she heard, with due respect and without making any criticism of [the Interpreter], this denial should be viewed with caution … There is quite clearly scope for an honest misunderstanding on [her] part as to what was said in the course of the conversation between Mr Lee and Mr Guo".
In that regard, Mr Christie pointed to the facts that the Interpreter had found interpreting in this case to be more stressful than usual, that she accepted she had made some mistakes in the course of interpreting, that most of the conversation she overheard between Mr Lee and Mr Guo was in whispers and that the conversation took place in the courtroom during a time when many others were speaking.
The Interpreter had no reason to take what she obviously regarded as the very difficult step of approaching me, through my Tipstaff, about this matter other than a desire to draw to my attention what she saw as being inappropriate conduct by Mr Lee. She had nothing to gain from taking this step. And, as I have said, she was clear in cross-examination as to the correctness of her recollection.
On the other hand, Mr Lee has been a friend of Mr Guo for over 20 years, has been intimately involved with Mr Guo's communications with his solicitors throughout these proceedings, understood "as a lay person" the significance of the $6 million issue in the proceedings, was concerned to ensure the interests of Mr Guo were protected and preserved in the proceedings and, throughout the hearing, was engaged in informal conversation with Mr Guo. However, Mr Lee, repeatedly, emphasised that despite these matters, he understood the "rules and codes of ethics you follow" as an interpreter.
I have no doubt that the Interpreter believes she heard the words she reported to my Tipstaff.
However, in the face of a head-to-head contest between the Interpreter and Mr Lee as to what was said, I must have regard to any objective circumstances that might shed light on what happened. I must also have regard to the potentially serious consequences for Mr Lee, as a NAATI interpreter, of what the Interpreter has reported that he said. I must therefore have an "actual persuasion" [4] of the mind that the Interpreter's recollection, no doubt genuinely held, is correct.
The relevant objective circumstance is that Mr Lee understood the Interpreter to have mistranslated Mr Guo's answer concerning the $800,000. Mr Lee accepted that he may have mentioned "$800,000" to Mr Guo in that context. That must have happened in the adjournment immediately after Mr Guo gave that evidence: that is when the Interpreter says she heard Mr Lee say to Mr Guo, "You should not say you only had $800,000". But Mr Lee said, and I accept believed, that in the relevant passage of evidence what Mr Guo in fact said was something to the effect that "every now and then he would make payment of $800,000"; not, as the Interpreter translated, that "I must have a bit of money in Australia, maybe $800,000". There appears to be no reason why, in that circumstance, Mr Lee would tell Mr Guo not to say that he "only had $800,000".
It may well be that what Mr Lee said to Mr Guo was "you did not say", rather than "you should not say" that "you only had $800,000"; thus informing Mr Guo that his answer had been mistranslated by the Interpreter, rather than coaching him as to the evidence he should give. That conclusion would be consistent with the objective circumstances.
However, that possibility was not offered by Mr Lee, nor put to the Interpreter. I invited submissions from the parties as to whether it would be open to me to make a finding to this effect. The Developer submitted that I should. The Builder submitted that I should not. Those submissions did not assist me to come to a decision about this matter.
In that state of affairs, and bearing in mind the significance, particularly for Mr Lee, of a finding that the Interpreter's recollection is correct, I am unable to achieve an "actual persuasion" [5] of the mind that it is.
This does not mean that I have reached an affirmative state of mind that the Interpreter's recollection is not correct, nor, in that sense, that I do not believe what the Interpreter, through my Tipstaff, told me. I accept that the Interpreter's recollection is as she stated. Having heard what she believes she heard, she is to be commended for coming forward to inform me, through my Tipstaff, what she believes occurred. I hope this experience does not deter the Interpreter from speaking up again, should the circumstances warrant her so doing.

The Arrangement

The Builder alleges that it entered into an "oral agreement" with the Developer in early 2017 to the effect that: 1. at all times site risks, such as latent conditions, would be borne by the Developer; 2. the Developer "made clear" to the Builder that "it had $6 million in funds available to it but had difficulty obtaining further finance prior to entering into the Contract"; and 3. the Builder would assist the Developer to obtain construction finance. [6]
As to the matter in (b), Mr Yuan gave evidence that Mr Guo said: "John I have $6 million in equity for the project and I will secure financing for the remaining project amount locally, if I cannot get finance I will sell my overseas assets to help with finance."
The parties referred to this as "the Arrangement".
The Builder alleges that, relying on the Arrangement, it entered a sub-contract with Innovative Civil Pty Ltd for various excavation and related works for the Project. The Builder paid Innovative Civil for that work. The Builder claims that this work was done for the benefit of the Project and thus for the benefit of the Developer and that the Developer is liable to pay the Builder, on a quantum meruit for money that it paid Innovative Civil.
As appears from my discussion above of the issue involving the Interpreter, much of the cross-examination of Mr Guo by Mr Corsaro was devoted to this question. As Mr Corsaro submitted, in cross-examination Mr Guo gave a number of apparently inconsistent accounts of what funds he in fact had available in relation to the Project.
However, there is contemporaneous written evidence as to what is likely to have been said at the time.
I have mentioned [7] that on 12 July 2017, the Builder and the Developer executed a "Letter of Intent".
In that letter, it was stated that: "The [Principal's Representative] is pleased to advise on behalf of [the Developer] that [the Developer] intends to enter into a design and construct contract … with [the Builder] for the design, construction and commissioning of [the Project] … for a negotiated lump sum … subject to the terms of this letter of intent."
Under the heading "Background", the Letter of Intent stated, amongst other things: 1. "[the Developer] has an approved Development Application over the Site"; 2. "[the Developer] has made a deposit payment of $800,000 … on account to [the Builder] which shall not be used by [the Builder] for any purpose other than the Project"; and 3. "[the Developer] has provided access to the site on 1/07/2017 to commence the Agreed Activities".
It is common ground that the Builder commenced work on the Project on the basis of the Letter of Intent.
Critically, the Letter of Intent continued, under the heading "Conditions precedent to execution of Contract": "The parties acknowledge and agree that execution of the D&C Cont[r]act is subject to, and conditional upon, the following Conditions Precedent: (a) the [Developer] procuring equity funding of $6,000,000 for the Project on terms acceptable to the [Developer] in its absolute discretion. The [Developer] may waive compliance with this condition precedent by giving written notice to the [Builder] …" (Emphasis added.)
Thus, the agreement of the parties was that entry into the Contract was subject to the Developer "procuring equity funding" of $6 million. I see this as being inconsistent with the Developer having "made clear" to the Builder that it already had $6 million in funds available. This points, strongly in my opinion, against the probability of there being any agreement to the effect of the Arrangement.
There are other difficulties with this claim.
The first is that my attention has not been directed to any evidence to show that the Builder relied on the alleged Arrangement in entering into the sub-contract with Innovative Civil. The more likely conclusion is that the Builder relied on the Letter of Intent which, on its face, formed the basis upon which the Builder commenced work on the Project prior to execution of the Contract.
The Contract, executed several months later on 18 September 2017, contained an "entire agreement" clause and recorded the parties' agreement that: "… the Contract supersedes all previous agreements, undertakings and communications, whether written or oral, relating to the subject matter of the Contract." [8]
Further, where, as here, [9] there is a "valid and enforceable agreement" between the parties, there is no room for recovery on a quantum meruit. [10]
Further, my attention has not been directed to any evidence to show that the Builder is liable to Innovative Civil for any amount. The payments that the Builder made to Innovative Civil were interim payments pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW). In proceedings under that Act, the Builder disputed that Innovative Civil had any ultimate entitlement to, at least, some of the funds paid on an interim basis under that Act. [11]
In those circumstances, my conclusion is that the Builder has not established the existence of the Arrangement nor any entitlement to relief by reason of any Arrangement.

The Further Arrangement

The Builder alleges that the parties entered the Contract "on the understanding" of eight identified matters.
In its Technology and Construction List Cross-Claim Statement, the Builder referred to this as the "Further Arrangement".
As particularised in the Technology and Construction List Cross-Claim Statement, the Further Arrangement is said to have been based on "numerous discussions" between Mr Guo and Mr Yuan in about July 2017 in which Mr Guo is alleged to have said words to this effect: "All extra costs associated with variations will be worked out with a number put on the table at the end of the project. If I don't agree on number to be claimed by [the Builder] as variations, then we will get an independent Quantity Surveyor to work out how much the amount should be and no point fighting in the court only one winner is solicitor."
One of the identified matters was that the Further Arrangement "would have primacy" over the Contract.
That contention is said in the Technology and Construction List Cross-Claim Statement to be based on the "clear agreement" between Mr Guo and Mr Yuan that: 1. the Developer instructed the Builder in mid to late 2017 to "underclaim" progress payments and to "go slow" at various periods "on the basis that no liquidated damages or delay damages would be claimed against the [Builder's] progress payment entitlements"; and 2. the Developer "rejected claims for site conditions and many other [extension of time claims] and variations on the basis of the Further Arrangement on the understanding that": 1. the Developer would "reassess and pay" the variations at the end of the Project; and 2. no "significant" extension of time claims would be permitted [presumably by the Developer] but "in any event no liquidated damages or delay damages were to be levied" [presumably by the Builder]. [12]
Based on the alleged Further Arrangement, the Builder claims for 13 variations totalling some $3.114 million plus GST.
The first difficulty with this claim is that, as I have set out above, the Contract contains an "entire agreement" clause with which the contention of the existence of the Further Arrangement is inconsistent.
The eight numerated items the subject of the "understanding" said to provide the basis for the Further Arrangement are: 1. the Developer's financier required the terms set out in the Contract; 2. the risk allocation in the Contract, including as to latent conditions, inclement weather and site risk would be, consistent with the Arrangement, borne by the Developer; 3. variation claims would be assessed at the end of the Project including for site remediation, inclement weather and latent conditions as per the Arrangement; 4. extension of time claims would be assessed at the end of the Project; 5. no liquidated damages would be levied by the Developer; 6. notice and time bar provisions under the Contract would be disregarded; 7. retention held under the Contract would be returned (50% at practical completion and 50% 12 months after achieving practical completion); and 8. the Further Arrangement would have primacy over the Contract.
The first point is that the Builder has adduced no evidence to support the existence of any "understanding" to the effect of the matters set out at (a), (b), (g) and, critically, (h), the latter being the allegation that there was an "understanding" that the Further Arrangement would have "primacy over the Contract".
Indeed, in closing written submissions, Mr Corsaro did not refer to any such alleged "understanding".
That alone is sufficient to dispose of the Builder's contention as I have set out at [74] above.
I will deal with the remaining "understandings" in turn.

The variation and extension of time claims would be assessed at the end of the Project

As I have mentioned, [13] on 22 March 2019, the Developer and the Builder entered the Handwritten Agreement.
In the Handwritten Agreement, the parties agreed that the Builder could submit variation claims. The Builder did so in its Final Payment Claim of 27 May 2020. That claim was rejected by the Developer in its purported Final Payment Certificate.
As I have said, the Developer accepts that the Builder is entitled to challenge this position under cl 37.4(d) of the Contract. I deal with this below. I also deal below with the effectiveness of the Final Payment Certificate.
The Builder's entitlement to variations will thus fall to be considered in light of those matters. In those circumstances, the question of whether or not there was any "understanding" to the effect alleged by the Builder as a component of the Further Arrangement is a moot point.

That no liquidated damages would be levied by the Developer

My attention has not been directed to any evidence to support any "understanding" between the Developer and the Builder to this extent. In cross-examination, Mr Yuan did say that Mr Guo instructed the Builder to "go slow". But Mr Yuan did not say that liquidated damages would not be "levied".
Arising out of the matters alleged in the Builder's Technology and Construction List Cross-Claim Statement, it appears the Builder's case is that an implication arose that the Developer would not claim liquidated damages by reason of the "go slow" instruction that Mr Yuan alleged that Mr Guo had given.
My attention has not been directed to any contemporaneous document which would corroborate the making of any "go slow" arrangement.
Mr Yuan suggested that the instruction for the Builder to "go slow" was mentioned in a Project Control Group report of August 2017 with respect to the Project. There is no mention of a "go slow" arrangement in that document. Indeed, that document recites that "design coordination continues at pace" and that, at that stage, the shoring piling works had commenced and were "well advanced".
In any event, the existence of any "go slow" instruction from the Developer to the Builder is contradicted by the evidence given, on behalf of the Builder, by its Safety and Environment Manager, Mr Mohammed Morgani.
In his evidence, Mr Morgani described his involvement and importance at the site in great detail.
In his affidavit evidence, Mr Morgani said: "Once [Mr Guo] started to get concerned about funders, in every instance I recollect, he indicated to me to 'go slow' … 'but stay on site'. Whilst I was not full-time on the site, I made frequent visits to ensure that the works were progressing at a slower rate and I talked to [Mr Yuan] every day in relation to the project and his conversations with [Mr Guo]."
However, in cross-examination, Mr Morgani contradicted this evidence.
Mr Morgani repeatedly, and with evident pride in his work, said that he did not want the job to slow down and that "of course, finish the job on time is the best way".
This led to me having this exchange with Mr Morgani. Mr Morgani's references in this exchange to "Frank" are to Mr Guo: "Q. You said to me earlier that you didn't want the project to slow down. Remember you said that? A. The job is finished, your Honour. Q. I think you said that while the project was-- A. Running. Q. You did not want it to slow down? A. No, never. Q. I think you said, 'Finish on time is the best way'? A. Yep. Q. And you've told me a couple of times the project did finish on time? A. Yep. Q. Did Mr Guo ask you to go slow and stay on site? A. I repeat it again that we did slow down when the money was not coming. And the boys want to stop, and I can't make them run. So, the money was given, given to us slowly to hold the job. So by stage the, the job stopped when I remember that John needs to go and get the money for Mr Frank and, and put the job on hold for, for-- Q. Did Frank give you instructions to go slow? Did he tell you to go slow? A. Who, Frank? The job went slow automatically because we had no money on the job. But I did not stop the job. Q. Did Frank say to you, 'Go slow but stay on the site'? Did he say that? A. No. Q. Do you understand that in your affidavit you have said that Frank said that to you? A. Frank? I'd, I'd, I repeat, say it again, the job, when the money was not coming through. That's what I mean in affidavit. Not coming through that the job was stopped going fast. That's what I mean."
Later, Mr Morgani said that Mr Guo would say to him, in English, "I'm getting fund, job go, no problem, money ok".
The effect of Mr Morgani's evidence was that it was occasionally necessary for progress on the site to slow "when the money was not coming" but that, contrary to the evidence given in his affidavit, Mr Guo did not give him instructions to "go slow but stay on the site".

That notice and time bar provisions under the Contract would be disregarded

My attention has not been directed to evidence that this was any part of the alleged Further Arrangement.
In any event, it is, as the Developer has submitted, irrelevant.
The Developer does not rely on any such provision.

Conclusion as to the Further Arrangement

The Builder has not established that the alleged Further Arrangement provides any basis upon which it is entitled to maintain a claim for the variations beyond that to which it is already entitled under the Contract or the Handwritten Agreement.

Contract Claim Sum

The Contract Sum was $32.5 million plus GST.
The Developer has paid the Builder some $31.6 million exclusive of GST.
Thus, under the Contract, the Builder contends that a further sum in the order of $900,000 plus GST is due.
Whether the Builder is entitled to this sum depends on consideration of questions arising from the Builder's Final Payment Claim, the Developer's Final Payment Certificate, and the Handwritten Agreement.
I return to these matters below.

Estoppel

The Builder's estoppel claim, as set out in its Technology and Construction List Cross-Claim Statement, is that: 1. the Builder relied on the Arrangement and the Further Arrangement in, amongst other things, entering into the Contract; 2. the Developer "relied upon and enjoyed the benefit of the Arrangement and the Further Arrangement" in identified ways; 3. the Builder and the Developer "conducted themselves on the basis which clearly and unambiguously departed from the Contract and was wholly consistent with the Arrangement and the Further Arrangement over the course of the works"; 4. it would be unconscionable for the Developer to resile from the Arrangement and Further Arrangement; and 5. accordingly, the Developer should be estopped from resiling from the Arrangement and the Further Arrangement.
As I am not satisfied that the Builder has established the existence of either the Arrangement or the Further Arrangement, this claim must fail.
In any event, in closing written and oral submissions, Mr Corsaro did not seek to make out the Builder's pleaded estoppel case.

Misleading or deceptive conduct

I turn now to the Builder's claim that the Developer engaged in misleading or deceptive conduct for the purposes of s 18 of the Australian Consumer Law.

Causation

Before considering the five representations that the Builder contends were made to it by the Developer, I consider a causation issue the Developer contended was a complete answer to this aspect of the Builder's claim.
Each of the alleged representations is said to have been made orally by Mr Guo to Mr Yuan.
At the time of execution of the Contract, Mr Yuan was not a director of the Builder. Mr Yuan was not appointed as a director of the Builder until 24 March 2020, almost a year after the Project was completed. From the time the Builder was registered on 21 November 2014 until 24 March 2020, the sole director of the Builder was Ms Li Yang, Mr Yuan's wife.
Ms Yang executed the 10 March 2017 Tender as "managing director" of the Builder and executed the Contract pursuant to s 127 of the Corporations Act 2001 (Cth) as sole director of the Builder.
The Builder did not call Ms Yang to give evidence. It was not suggested on behalf of the Builder that I should infer that Ms Yang was acting on Mr Yuan's instructions when causing the Builder to enter the Contract. As was submitted on behalf of the Developer, nothing is known about Ms Yang's decision in relation to the entry into the Contract by the Builder. In particular, nothing is known of what role anything Mr Guo said to Mr Yuan played in Ms Yang's decision to cause the Builder to enter the Contract.
Mr Yuan gave no evidence in his affidavits that he relied on any of the alleged representations. He made five affidavits in the proceedings, and said nothing to this effect in any of them.
In cross-examination, in response to a suggestion from Mr Christie that he had no clear recollection of his conversations with Mr Guo in 2017, Mr Yuan said: "About this one it should, you, you should not put it like this, because me and Mr Guo, we could do this project firstly because Mr Guo said at that time he can definitely find money, and then he also said he had 6 million. So, it, it's on that basis then we did this project for him". (Emphasis added.)
Mr Corsaro referred to this passage in his closing written submissions as showing that the Builder would not have entered into the Contract but for the alleged representations. But nothing is known of what, if anything, Mr Yuan said to the sole director of the Builder, his wife, Ms Yang, about what Mr Guo said to him.
These matters were emphasised by the Developer both in its closing written and oral submissions.
They were not addressed on behalf of the Builder.
For these reasons alone, the Builder's misleading or deceptive conduct case must fail.
Nonetheless, I will deal with the representations for which the Builder contends.

Alleged representation that Mr Guo had $6 million in equity funds

The Builder alleges that between February and June 2017 Mr Guo, for the Developer, represented that he had $6 million in equity funds available to finance the Project.
As I have said, [14] Mr Yuan's evidence was that Mr Guo said: "I have $6 million in equity for the project and I will secure financing for the remaining project amount locally. If I cannot get finance I will sell my overseas assets to help with finance."
Mr Guo denied making this representation. As I have also said, much of Mr Corsaro's cross-examination of Mr Guo was directed to this topic.
In cross-examination, Mr Yuan said that Mr Guo told him: "… he can definitely find money, and then he also said he had 6 million."
However, as I have set out above, the Letter of Intent of 12 July 2017 recorded the parties' agreement that execution of the Contract was subject to the Developer "procuring equity funding" of $6 million.
Mr Yuan said in his first affidavit that "we started works" on the basis of what was stated in the Letter of Intent.
The natural reading of the Letter of Intent is that the Developer proposed to "procure" equity funding of $6 million and reserved the right to waive compliance with that condition precedent. The letter does not say that the Developer had that amount. The letter is consistent with Mr Yuan's evidence that Mr Guo said he could "definitely find money" but not consistent with his evidence that Mr Guo said that he "had" $6 million.
In any event if, as he said, Mr Yuan "started works" on the basis of what was stated in the Letter of Intent, this could only have been, relevantly, on the basis of the Developer's expectation that it would procure funding of $6 million; and not on the basis of any statement that Mr Guo may have made that he already had funding in that amount.
As was submitted on behalf of the Developer: "If the availability of $6,000,000 to Ganghui was truly a matter of importance to Mr Yuan, there is no evidence that Mr Yuan sought to clarify why the statement in clause 7(a) in the Letter of Intent was different from the situation of what Mr Yuan had been led to believe. The fact that Mr Yuan did not take up with Mr Guo this matter is more consistent with the conversation deposed to [by] Mr Yuan not having occurred."
Further, at around 14 August 2017, that is, several weeks before execution of the Contract, Mr Yuan said he had this conversation with Mr Guo: "[Mr Guo]: I am having problems getting funding. I need you to 'go slow' but stay on site - this way funders will see we are still progressing the project. [Mr Yuan]: You still have plenty of equity - we have not claimed all of the works we have completed. We have just claimed over $1m. [Mr Guo]: I have equity of less than $6m - without selling assets, I only have $3m in funds for the project. I do not want to sell assets - I would appreciate your help getting funds. [Mr Yuan]: You should have told me you only have $3m. We took on work as we knew we had $6m - we could have had a different program and risk share if we knew you had less funds. [Mr Guo]: Don't worry. Worst case, if I cannot get funds, I got someone who will buy the project with someone that will take over and keep you as builder. [Mr Yuan]: Ok. I will help where we can - we will claim enough to cover our costs - but not claim for everything until you have more funds."
Thus, according to Mr Yuan, Mr Guo told him on around 14 August 2017 that he had "equity of less than $6 million" and only had "$3 million in funds for the Project".
There was a contest as to whether that conversation took place in the terms deposed to by Mr Yuan. However, according to Mr Yuan's own recollection, any statement made to him by Mr Guo to the effect that Mr Guo had $6 million in equity available to fund the Project was, prior to the making of the Contract, shown not to be true.
For that reason alone, I cannot see how the Builder could be said to have been induced to enter into the Contract by reason of the alleged misrepresentation.

Alleged representation that Mr Guo would sell his assets to help finance the Project

No submissions were made on behalf of the Builder in relation to this alleged representation. I take it not to be pressed.
In any event, as I have set out at [154], on Mr Yuan's evidence, on 14 August 2017 Mr Guo told him that "I do not want to sell assets".

Alleged representation that the Developer would pay the Builder for remediation works at the end of the Project

The Builder alleges that between February 2017 and July 2017, the Developer represented that it would compensate the Builder "for all costs incurred in performing site remediation works on a costs-plus basis, and that this compensation will be given at the end of the Project". [15]
In his opening and closing written submissions, Mr Corsaro referred to an alleged "Remediation Costs Agreement". But no such agreement is contended for in the Builder's Technology and Construction List Cross-Claim Statement. What is alleged is the representation to which I have referred in the preceding paragraph.
In the Technology and Construction List Cross-Claim Statement, that representation is said to be based on the following conversation that Mr Yuan said he had with Mr Guo in or around February 2017: "[Mr Yuan]: There will be large costs for the site remediation, others quote $4,000,000. [Mr Guo]: I cannot get finance yet. What do you think the cost will be? [Mr Yuan]: $2,000,000. [Mr Guo]: Too much - can you try and get this cost down? [Mr Yuan]: The tenders were very high - I might be able to get the cost down to $1,000,000 - maybe up to $1,300,000. [Mr Guo]: Ok - you show me cost of any overs and I will pay at end of the job when we get sales. [Mr Yuan]: Ok." (Emphasis added.)
In his affidavit replying to Mr Yuan's affidavit, Mr Guo denied saying anything to this effect and also said: "I don't recall having discussions with [Mr Yuan] about the costs of site remediation, though I accept that discussions on this topic may have occurred. I believe that [Mr Yuan] never mentioned the specific figures of '4 million' and '$2 million'."
The words "cost of any overs" that I have emphasised at [162] were for some reason omitted from the account of this conversation given in the particulars in the Technology and Construction List Cross-Claim Statement concerning this alleged representation.
However, assuming that the conversation occurred as Mr Yuan has deposed, Mr Yuan has said that he thought the costs of "site remediation" would be $2 million, and that he might be able to get the costs down to between $1 million and $1.3 million.
It was after that statement that Mr Guo allegedly said that he would pay for the "cost of any overs" at "the end of the job when we get sales".
It is unclear to me to what Mr Guo was referring when he referred to the "cost of any overs".
In the following paragraph of his affidavit deposing to the conversation to which I have referred at [163] Mr Yuan said: "From discussions as above, I understood that when we ultimately entered a contract with [the Developer] and its financier, [the Builder] would not be paid for the latent condition issues on site until the end of the project - but at the end of the project, this would be paid on a 'cost-plus' basis from the proceeds of sale of the apartments." (Emphasis added.)
Thus, whereas in his conversation with Mr Guo, Mr Yuan referred to the cost of "site remediation", in this statement his stated understanding of what that meant was by reference to the "latent condition issues on site".
Later in the same affidavit, Mr Yuan gave evidence of a further conversation with Mr Guo in which he said, "I can carry the costs of the site remediation including removal of solid waste and VENM [16] until you get your sales money".
In a later conversation, Mr Yuan deposed to saying to Mr Guo that the Builder would "carry the costs of site remediation until you receive the proceeds of the sale of the off the plan apartments comprising the bulk of the project".
In view of these differing accounts by Mr Yuan as to what was represented to him by Mr Guo, I am not able to come to a firm conclusion about what any representation about "site remediation" was intended to denote.
In any event, my attention has not been drawn to any evidence to show that the Builder was induced to enter into the Contract by reason of anything said to him by Mr Guo on this topic.
Indeed, it is the Builder's case that, as a result of these conversations it was agreed that the Contract Price would be increased to $32.5 million "so as to include an amount of $250,000 as a component for remediation works which would be for the benefit of [the Developer's] proposed lender".

Alleged representation that the Project would be completed for $32.3 million

The Builder contends that the Developer represented to it "that the Project could be completed for no more than $32.3 million".
The Builder relies on the following passage from Mr Yuan's affidavit evidence: "[Mr Guo]: You can complete the works for the project for $32,300,000 or less - look at the cost savings identified by Novati. [Mr Yuan]: Novati have around $6m of cost savings in their revised tender. [Mr Guo]: Yes - you can substitute materials and delete items as Novati has done - I think you can do the project for $32,300,000 or less."
"Novati" was another builder that had earlier tendered for the Project.
I do not accept that, assuming these words were said, they are misleading or deceptive.
As was submitted on behalf of the Developer: "First, the words attributed to Mr Guo are qualified. According to Mr Yuan, Mr Guo said 'I think you can do the project for $32,300,000 or less'. Secondly, that qualification conveys that Mr Guo did not know when the words were uttered whether or not [the Builder] would complete the project for $32,300,000 or less. If the representation was made, the reference to belief was to an opinion on costs savings in the Novati tender. It could not, therefore, be found to be misleading and deceptive if it proved to be inaccurate because the statement was an opinion [17] …" (Emphasis in original.)
Further, as the Developer submitted: "In any event, the evidence establishes that Mr Yuan did not rely on the representation. Mr Yuan knew at the time that he was tendering for the project the subject of these proceedings that Mr Guo had no experience in developing properties in Australia. Mr Yuan agreed that Mr Guo did not know more about how to price the project than [the Builder] did. In comparison to that, Mr Yuan had substantial experience in dealing with suppliers and subcontractors for many years and he knew a successful tender depended upon getting the right prices from potential subcontractors and suppliers. [The Builder] employed people with technical expertise, including the project manager (Mr Wallis), and they were able to assist with [the Builder's] tender. [The Builder] also had in-house counsel. In these circumstances, it is unlikely, therefore, that Mr Yuan or [the Builder] would have relied on what Mr Guo said what the project would cost." (Transcript references omitted.)
Mr Corsaro did not offer any submissions on this topic.

Alleged representation to the effect of the Further Arrangement

As I have found the Further Arrangement has not been established, this representation is not made out.

Conclusion as to the Builder's misleading or deceptive conduct case

For these reasons, the Builder's case under s 18 of the Australian Consumer Law fails.

The alleged loan for $600,000

The Builder alleges that on or about 13 December 2017, it agreed to lend the Developer $600,000 on the basis that the Developer would repay the $600,000 following the discharge of a security held by a financier in respect of the Project.
The Builder alleges that: 1. on 13 December 2017, it paid $600,000 to the Developer; 2. in May 2019 the financier discharged its security over the Project; but that 3. the Developer has not repaid the Builder the $600,000.
The Developer agrees that the Builder paid it $600,000 on 13 December 2017 but: 1. denies that this was a loan made by the Builder to the Developer; and 2. contends that, rather, it was the repayment by the Builder of part of an amount of $3.5 million that the Builder had agreed to pay the Developer.
Mr Yuan's account of the circumstances which led to that arrangement was: "In mid September 2017 [the Builder] reached an agreement with [the Developer] in terms of the total contract price for the Ashfield project, to finalise and execute the formal contract … The terms specified the increase in the total agreed contract sum to $32,500,000 plus GST and an agreement that I would reimburse [Mr Guo] the total sum of $3,500,000 progressively as the works were completed."
Mr Guo's evidence about this was that on 15 September 2017, he proposed, and Mr Yuan agreed: "So we agree[d] that the total contract price will be $32,250,000 plus GST, and that [the Builder] will be obliged to pay back to [the Developer] an amount of $3,500,000, and that the $3,500,000 would be paid back progressively to [the Developer] in proportion to the percentage completion of the project."
On 15 September 2017, Mr Yuan and Mr Guo put their signature to a handwritten document in the form of a statutory declaration which in part reads that Mr Yuan would: " .. agree to reimburse Fu Ming Guo the total sum of $3,500,000."
I have referred to the Handwritten Agreement of 22 March 2019.
The first two paragraphs of the Handwritten Agreement provided: "1. [The Builder] acknowledge[s] that it owes [the Developer] $3.5 million. 2. [The Builder] & [the Developer] acknowledge that [the Builder] has paid [the Developer] $600,000 on 13 Dec 2017."
These terms of the Handwritten Agreement contradict the Builder's case that the $600,000 it paid to the Developer on 13 December 2017 was a loan made by the Builder to the Developer.
These terms of the Handwritten Agreement make clear that the payment of $600,000 was a payment by the Builder of part of the $3.5 million the subject of the arrangements made on 15 September 2017.
The Builder's case concerning the $600,000 "loan" fails.

The alleged loan for $151,157.40

The Builder claims that in February 2019 it agreed to advance $151,157.40 to the Developer on the basis that the Developer would repay that money once it had obtained money from the sale of units in the Project.
The Builder alleges that on 6 February 2019, it paid the Developer $151,157.40.
My attention has not been directed to any evidence of the Builder making such a payment to the Developer.
However, the Developer has admitted in its Response to the Technology and Construction List Cross-Claim Statement that "various transfers were made between the parties between 2 February 2019 and 24 March 2019" such that the debt from the Builder to the Developer recorded in the Handwritten Agreement was reduced by $151,157.40.
Either way, the parties agree that the Builder ought be credited with this sum.

The Developer's claim under the 22 March 2019 Handwritten Agreement

I have referred above to the Handwritten Agreement. [18]
The Developer seeks to enforce the terms of the Handwritten Agreement.
The Handwritten Agreement provided: "(1) [The Builder] acknowledge[s] that it owes [the Developer] $3.5 million. (2) [The Builder] & [the Developer] acknowledge that [the Builder] has paid [the Developer] $600,000 on 13 Dec 2017. (3) [The Builder] & [the Developer] acknowledge that [the Builder] has paid [the Developer] $720,000 on or around February 2019. (4) [The Developer] agree[s] to return $720,000 to [the Builder] within 48 hours from date of signing this agreement to complete the construction and obtain [the] Occupation Certificate within 2 weeks from [the] date of agreement. (5) [The Builder] & [the Developer] agree that [the Builder] owes a balance of $2.9 million. (6) [The Builder] & [the Developer] agree for [the Builder] to submit variation claims. [The Developer] agree[s] to assess the variation claims in accordance with Australian Law. (a) if variation costs exceed $2.9m, [the Developer] will pay [the Builder]. (b) if variation costs [are] below $2.9m, [the Builder] will pay [the Developer]."
In the Handwritten Agreement, the Builder acknowledged that it owed the Developer $2.9 million ("the Acknowledged Debt").
As I have set out at [198], the Developer agrees that the Builder has in effect paid it $151,157.40 on account of the Acknowledged Debt and that, accordingly, the amount of the Acknowledged Debt is now $2,748,842.60.
By agreeing that it owed the Developer the Acknowledged Debt, the Builder in effect promised to pay the Developer the Acknowledged Debt. That is because: "The law implies from an acknowledgement of an existence of the liability a promise to discharge it. Words clearly acknowledging that the writer is liable suffice to raise the implication." [19]
The Handwritten Agreement also made provision, in cl 6, for a regime to deal with variations. The agreement was that the Builder would submit variation claims, and that the Developer would assess those claims "in accordance with Australian law".
Although the language used in cl 6 is not clear, the Builder did not dispute the following submissions made by the Developer concerning that wording: "In interpreting the Second Handwritten Agreement coherently as a whole, the meaning of clause 6(a) and (b) are that if the valuation of the variations is more than $2.9m, [the Developer] would pay [the Builder] the difference between that amount and $2.9m and if the valuation was less than $2.9m, [the Builder] would pay [the Developer] the difference between that amount and $2.9m."
The Builder submitted its variation claims by service of its Final Payment Claim of 27 May 2020, to which I have referred.
The Developer purported to "assess" those variation claims in its Final Payment Certificate to which I have also referred. In its Final Payment Certificate, the Developer purported to certify that no variation claims were allowed. There is a dispute as to the status of the Developer's Final Payment Certificate, to which I will return.
It is the Developer's position that if, contrary to its case, the Final Payment Certificate: "… is not final and conclusive or the assessment of the variations in the Final [Payment] Certificate was not an assessment for the purposes of clause 6 of the … Handwritten Agreement, this Court will need to determine the value of [the Builder's] variations submitted under the Final Payment Claim."
I return to these matters below.

The Developer's claim under the Contract: the 10 June 2020 Final Payment Certificate

Clause 37.4 of the Contract provided, relevantly: "37.4 Final payment claim and certificate (a) Within 28 days after the expiry of the last defects liability period (including any separate defects liability period), the [Builder] shall give the Principal's Representative a written final payment claim endorsed 'Final Payment Claim' being a progress claim together with all other claims whatsoever in connection with the subject matter of the Contract. (b) Within 10 Business Days after receipt of the final payment claim, the Principal's Representative shall issue to both the [Builder] and the [Developer] a final certificate evidencing the moneys finally due and payable between the [Builder] and the [Developer] on any account whatsoever in connection with the subject matter of the Contract. … … (d) The final certificate shall be conclusive evidence of accord and satisfaction, and in discharge of each party's obligations in connection with the subject matter of the Contract except for: … (iii) any accidental or erroneous inclusion or exclusion of any work or figures in any computation or an arithmetical error in any computation; and (iv) unresolved issues the subject of any notice of dispute pursuant to clause 42, served before the 7th day after the issue of the final certificate. …" (Emphasis in original.)
Clause 42 of the Contract, referred to in subcl 37.4(d)(iv), dealt with dispute resolution and provided, amongst other things, for expert determination of differences or disputes arising in connection with the Contract.
It can be seen from the terms of cl 37.4(b) of the Contract that it was necessary for the Developer's Final Payment Certificate be issued on its behalf of the Principal's Representative.
As I have said, on 27 May 2020 the Builder served on the Developer a Final Payment Claim for the purposes of cl 37.4(a) of the Contract and, on 10 June 2020, the Developer served on the Builder a Final Payment Certificate for the purposes of cl 37.4(b) of the Contract.
In the Final Payment Certificate, it was stated, under the heading "Conclusion": "Pursuant to clause 37.4(b), the Principal's Representative hereby certifies that the balance owing by the [Builder] to the [Developer] is $1,893,303.62 including GST."
Both the Builder and the Developer treated the Final Payment Claim and the Final Payment Certificate as a payment claim and payment schedule pursuant to the Building and Construction Industry Security of Payment Act. In the Final Payment Certificate, the Developer stated that, for the purpose of s 14(2)(b) of the Building and Construction Industry Security of Payment Act, "the scheduled amount is $nil".
A number of issues have arisen in relation to the Final Payment Certificate.

Mr Guo's purported appointment as the Principal's Representative under the Contract

The Final Payment Certificate was signed by the Developer's solicitor, Mr Tom Howard. Mr Howard stated in the "Introduction" to the Final Payment Certificate that he acted for Mr Guo "who has been appointed by [the Developer] to act as the Principal's Representative for the purposes of the [Contract]" and that "this correspondence is sent on behalf of and with the authority of [Mr Guo] in his capacity as Principal's Representative".
A question arises as to whether the Developer has proved that Mr Guo was in fact appointed by the Developer as its Principal's Representative. If he was not, the Final Payment Certificate was not effective.
Clause 20 of the Contract provided: "The [Developer] shall ensure that at all times there is a Principal's Representative. The [Builder] acknowledges that the Principal's Representative will exercise its functions under the Contract as set out in Annexure Part K." (Emphasis in original.)
Annexure Part K, referred to in cl 20, was headed "Role and functions of the Principal's Representative". It set out that role, by reference to nominated clauses in the Contract, as being either as "Principal's agent" or as being "Certifier". In relation to cl 37 of the Contract, Part K stated that the role of the Principal's Representative was as a "Certifier". I return to this below.
The expression "Principal's Representative" was defined in cl 1 of the Contract as follows: "… the person stated in Item 5 as the Principal's Representative or other person from time to time appointed in writing by the [Developer] to be the Principal's Representative and notified as such in writing to the [Builder] by the [Developer] and, so far as concerns the functions exercisable by a delegate of the Principal's Representative, includes a delegate of the Principal's Representative." (Emphasis in original.)
The person identified in "Item 5" of the Contract was CPDM Pty Ltd. Mr Mark Middlebrook, from CPDM Pty Ltd, executed the 12 July 2017 Letter of Intent as "Principal's Representative".
On 10 June 2020, Mr Howard wrote to the Builder: "We act for [the Developer], and attach hereto a notice of a new principal's representative."
The attached letter read: "Our Client: [the Developer] - Notice of Change of Principal's Representative We act for [the Developer]. We refer to the contract between our client and [the Builder] for the design and development of The Place - 5 Markham Place and 7-9 Cavill Avenue, Ashfield (the Contract). This letter constitutes notice under the Contract of the appointment of a new Principal's Representative, as follows: 1. The new Principal's Representative is Mr Fu Ming Guo. 2. The new Principal's Representative's address is [xxx]." (Emphasis in original.)
As I have set out, the Contract provided that the "Principal's Representative" was either the person named in Item 5, CPDM Pty Ltd: "… or other person from time to time appointed in writing by the [Developer] to be the Principal's Representative and notified as such in writing to the [Builder] by the [Developer] …" (Emphasis in original.)
The 10 June 2020 letter refers to the "new Principal's Representative" as being Mr Guo.
But the letter does not purport to be, or to evidence, Mr Guo's actual "appointment" as Principal's Representative. The requirement in the Contract was that any person other than CPDM Pty Ltd be "appointed in writing" by the Developer to be its Principal's Representative.
The Developer does not point to any document, other than the 10 June 2020 letter, as being such an appointment in writing.
Mr Howard's 10 June 2020 letter purports to notify the Builder "of the" appointment of Mr Guo as Principal's Representative, that is, of an appointment already made.
I do not see how this "writing", the letter giving notice of the appointment, could itself constitute the appointment "in writing" of which it speaks.
In that regard, it was submitted on behalf of the Developer: "There is no basis to construe the definition of Principal's Representative to require two separate acts; i.e, the appointment by the Principal and then the notification to the Contractor. A single written document would be sufficient to be both the appointment and the notification to the Contractor. The construction that the appointment and notification can be in a single document naturally emerges from the words 'notified as such in writing to the Contractor' in the above phrase." (Emphasis in original.)
I agree that it would have been possible for the Developer, in a single document, to record both Mr Guo's appointment as Principal's Representative and the notification of that appointment to the Builder.
But the Developer's submissions do not explain how the letter that "constitutes notice under the Contract of the appointment" also records the appointment itself.
It was also submitted on behalf of the Developer: "What is important for the purposes of the Contract is for the [Builder] to know who is filling the position of Principal's Representative. There is no contractual purpose or necessity for there first to be an anterior appointment which is then followed by written notice to the [Builder]."
But there is a "contractual … necessity for there first to be an anterior appointment" of a Principal's Representative other than CPDM Pty Ltd. That is to be found, in terms, in the words of the definition of "Principal's Representative": "appointed in writing by the [Developer] to be the Principal's Representative and notified as such to the [Builder] by the [Developer]".
Thus, the requirement of the Contract was that the appointment of the new Principal's Representative be notified "as such": that is, as having been appointed in writing by the Developer.
There is no evidence that this was done. Mr Howard's letter of 10 June 2020 does not constitute evidence of Mr Guo's appointment "in writing" by the Developer to be its Principal's Representative. And there is no other document.
It follows that the Developer has not demonstrated that Mr Guo was appointed as the "new Principal's Representative".
For that reason alone, the Final Payment Certificate is not effective as it was purported to be made by Mr Guo as the Principal's Representative.
In those circumstances, it is not necessary to address the other arguments advanced by the Builder concerning the enforceability of the Final Payment Claim.
However, in deference to the submissions advanced by the parties, and lest I be wrong in relation to the conclusion I have just expressed, I will do so.

Was the appointment of Mr Guo as Principal's Representative notified to the Builder?

As I have set out, the Contract required that the appointment of the new Principal's Representative be "notified as such in writing to the [Builder] by the [Developer]".
Here, the purported notification was by Mr Howard, as the solicitor for the Developer.
I see no reason why the Developer could not act by its agent, in this case Mr Howard.
Notwithstanding the fact that the notification of Mr Guo's purported appointment was by the Developer's solicitor, it was nonetheless "by" the Developer.

Could Mr Guo be appointed as the Developer's Principal's Representative?

Mr Corsaro submitted that Mr Guo was incapable of being appointed as Principal's Representative as, in that role, he would necessarily be required to behave in an adjudicative capacity but that, as he was the sole shareholder and director of the Developer, "this is something that Mr Guo could not do as the actual directing mind and will" of the Developer.
Mr Corsaro drew attention to Part K of the Contract that, as I have said, described the role of the Principal's Representative so far as concerns the functions referred to in cl 37 of the Contract, as being that of a "certifier".
I do not accept this submission. As a matter of the proper construction of the Contract, the Principal's Representative was not required to act in an adjudicative capacity.
It is true that cl 37.4 of the Contract provided that a Final Payment Certificate made by a Principal's Representative would be "conclusive evidence of accord and satisfaction, and in discharge of each party's obligations in connection with the subject matter of the Contract".
However, that provision is subject to the exceptions set out in subcll 37.4(d)(iii) and (iv) concerning accidental or erroneous inclusions or exclusions and any unresolved issues the subject of any notice of dispute pursuant to cl 42 of the Contract.
As the Developer submitted, the effect of these clauses is that any Final Payment Certificate made by the Principal's Representative would not in fact be final or conclusive. That is because "if something which purports to be conclusive is made subject to revision, it loses its quality of finality". [20]
Further, cl 37.4 provided for the Builder to provide a Final Payment Claim which was to include all "claims whatsoever in connection with the subject matter of the Contract". [21] The Principal's Representative was required to issue a certificate after receiving the Final Payment Claim. [22] The Contract made no provision for the Developer to make submissions to the Principal's Representative. This factor weighs against the proposition that the Principal's Representative has an adjudicative role.
Further, as I have said, the Builder could challenge the Final Payment Certificate, in effect on its merits, by reason of subcll 37.4(d)(iii) and (iv); including by invoking the dispute resolution provision in cl 42. In that event, it would be the expert called upon to resolve the dispute that would be acting in an adjudicative capacity.
For these reasons, I do not accept that Mr Guo was incapable of being appointed as the Developer's Principal's Representative.

Did Mr Guo make any "assessment" of the Builder's Final Payment Claim?

Again, this point does not arise for consideration as I am not satisfied that Mr Guo was "appointed in writing" to be the Principal's Representative. It also does not arise for the further reason that my conclusion is that, in any event, the Principal's Representative was not required to act in an adjudicative capacity.
Mr Corsaro's submission was that Mr Guo did not actually make any "assessment" of the merits of the Builder's Final Payment Claim. This submission was based on a series of emails that passed between Mr Howard, Mr Lee and Mr Guo on 9 and 10 June 2020, leading up to the service by Mr Howard, at 5.40pm on 10 June 2020, of the purported Final Payment Certificate on the Builder.
In these emails, Mr Howard kept Mr Lee and Mr Guo apprised of progress being made on the preparation of the Final Payment Certificate.
Mr Corsaro placed particular weight on an email sent by Mr Lee to Mr Howard at 5.51pm on 10 June 2020, 11 minutes after the purported Final Payment Certificate had been served, stating: "I will go through it with Frank [Guo]. Thank you very much."
Taken alone, that email does suggest that Mr Lee had not hitherto had a chance to sight translate the text of the Final Payment Certificate to Mr Guo and thus the first time Mr Guo knew of the contents of the Final Payment Certificate was after it had been served.
In an affidavit sworn shortly before the hearing, Mr Guo gave a detailed account of the process that he said he undertook, in the company of Mr Howard and Mr Lee, to prepare the Final Payment Certificate. He said that between 27 May 2020, when the Developer received the Builder's Final Payment Claim, and 10 June 2020, he had "multiple meetings and teleconferences with Mr Howard and also Sam Wilson, another lawyer who was assisting Mr Howard, in which I provided detailed instructions" concerning the state of the work.
Further, in cross-examination, Mr Guo said, through the Interpreter: "So for this part I want to explain again. For the final payment certificate, so the contents of that was not decided during the, like, last half an hour, because I received this demand to respond to YTO payment by a certain date, for the ten days, there's a lot of work to be done. Because the law and also the contract need to be considered and also I need to provide all kinds of evidence. That's a lot of work. During this process I met to [as said] Tom and Sam many times. So just for that period, we referred, so for that matter, we didn't decide everything half an hour, so we had a lot of discussions."
There was no suggestion that the Interpreter has mistranslated this evidence. I see no reason to doubt it.
I am therefore not persuaded that, if it be relevant, Mr Guo did not make any "assessment" of the contents of the Builder's Final Payment Claim nor of the contents of the Final Payment Certificate.

Was the Final Payment Certificate issued to the Developer, as well as to the Builder, as required by clause 37.4(b)?

The Contract required that the Final Payment Certificate be issued by the Principal's Representative to both the Builder and the Developer.
Mr Corsaro submitted that there was no evidence that the Final Payment Certificate had been issued to the Developer.
However, Mr Howard's 5.40pm email on 10 June 2020 serving the Final Payment Certificate was blind copied to Mr Guo. That was sufficient to satisfy the requirements of the Contract.

Did the Final Payment Certificate evidence "monies finally due and payable on any account whatsoever" as required by clause 37.4(b)?

The Contract required that the Final Payment Certificate evidence "the monies finally due and payable" between the Builder and the Developer "on any account whatsoever in connection with the subject matter of the Contract". [23]
The Final Payment Certificate concluded: "Having regard to the matters set out in this Schedule and its Annexures: a. Pursuant to clause 37.4(b), the Principal's Representative hereby certifies that the balance owing by the [Builder] to the [Developer] is $1,893,303.62 including GST. b. Pursuant to section 14 of the Act, the scheduled amount is $Nil." (Emphasis in original.)
That was sufficient satisfaction with the contractual requirement.

Is the Final Payment Certificate void by reason of sections 12 and 34 of the Building and Construction Industry Security of Payment Act?

Mr Corsaro submitted that the provision in cl 37.4(e) of the Contract was a "pay when paid" provision of the kind referred to in subpar (c) of the definition of "pay when paid" in s 12(2) of the Building and Construction Industry Security of Payment Act and thus of "no effect in relation to any payment for construction work" carried out by the Builder.
The effect of cl 37.4(e) was that payment of an amount due to the Builder under a Final Payment Certificate was made subject to the Builder executing a deed of release in a specified form. Assuming that this provision did make the Developer liable to pay an amount in a Final Payment Claim to the Builder "dependent upon the operation of another contract" for the purposes of the relevant definition (a matter which I do not find to be obviously so), the only consequence would be that cl 37.4(e) would have no effect concerning what would otherwise be the Builder's entitlement to receive a payment specified in a Final Payment Certificate. I am not able to see what consequence that would have to the Builder's rights in these proceedings.
Mr Corsaro also submitted that cl 37.4 of the Contract purports to restrict the Builder's rights to challenge the Final Payment Certificate under the Building and Construction Industry Security of Payment Act. I am unable to see how that is so. And, as a matter of fact, the Builder did make an adjudication application under the Building and Construction Industry Security of Payment Act in relation to the Final Payment Certificate the subject of these proceedings. [24]

Variations and Quantum

The Builder adduced evidence from a quantity surveyor, Mr Garry Andrews, in support of the quantum meruit claim to which I have earlier referred.
In closing written submissions, Mr Corsaro submitted that the quantum meruit claim arose in one of three ways: 1. first, were there to be a "finding that the Contract should be set aside or is otherwise unenforceable as a result of the [Developer's] misleading or deceptive conduct as alleged in the cross-claim"; 2. second, were there to be a "finding that the [Builder] carried out work because it was misled by one or more of the representations alleged in the cross-claim"; or 3. third, were there to be a finding that the Handwritten Agreement "was an express agreement that entitles [the Builder] to payment on a quantum meruit basis".
I have found that the Developer did not engage in misleading or deceptive conduct and that, in any event, the Builder has not shown that it carried out any work in reliance on any representation made by the Developer. Accordingly, the first two of these bases does not arise for consideration.
As for the Handwritten Agreement, I have found that it represented an agreement between the parties that, amongst other things, the Builder could submit variation claims to the Developer and the Developer would "assess" those.
The Builder submitted its variation claims in its Final Payment Claim.
The Developer contends in these proceedings that it assessed those claims at $nil in its Final Payment Certificate. However, I have held that the Final Payment Certificate was not effective because it was purported to be made by Mr Guo as Principal's Representative but in circumstances where the Developer has not established that, as was required by the Contract, it appointed a new Principal's Representative in writing.
A difficulty for the Builder is that, in its Technology and Construction List Cross-Claim Statement, it only pleaded a quantum meruit in relation to the Arrangement. The Builder did not plead a quantum meruit in relation to the Further Arrangement which, as set out in the Technology and Construction List Cross-Claim Statement, is said to provide the basis for the Builder's claim for variations.
In any event, there are further difficulties in relation to the Builder's claim to which I will now turn.
In its Final Payment Claim, the Builder sought payment for 13 variations totalling some $6.250 million inclusive of GST.
In its Technology and Construction List Cross-Claim Statement, the Builder only claimed for 12 of these variations in a total amount of some $3.425 million inclusive of GST.
Of those 12 variations, the Builder sought to adduce evidence from Mr Andrews in relation to seven variations.
In closing submissions, my attention was directed only to the following variations.

Site remediation

This was the largest of the Builder's claims. Mr Andrews estimated that the value of the work the Builder was said to have done in this regard was some $3.2 million.
Mr Corsaro submitted that "this relates to the additional disposal of contaminated and impacted material across the top two metres of the site".
The Developer contended that this work was within the Builder's scope of works under the Contract, and not a variation. In their closing written submissions, Mr Christie and Mr Ilkovski made detailed submissions to this effect.
This submission is correct.
In the 10 March 2017 Tender, the Builder included the amount of some $1.46 million for "site preparations".
In the 12 July 2017 Letter of Intent, one of the "Agreed Activities" was: "Completion of site remediation, classification and provision of a clearance certificate in accordance with the Remediation Action Plan prepared by Envirotech dated 5th Nov 2015."
Mr Corsaro developed submissions concerning the work said to have been done by the Builder in relation to this "Remediation Action Plan". I return to this below.
As I have mentioned, the Contract provided that it applied to "all of the Works even if they were performed prior to the date of execution of the Contract". [25]
Thus, as the Developer has submitted, the works and scope of the Agreed Activities under the Letter of Intent were incorporated as work and scope under the Contract.
Part G of the Contract set out the Scope of Works which included a "Site Remediation and RAP [26] clearance certificate".
Further, Part G provided that the scope of work under the Contract included satisfaction of the requirements of the Principal's "Project Requirements".
Section 5 of the Principal's Project Requirements included: "5. DEMOLITION, EXCAVATION AND CIVIL WORKS 5.1 Site Clearing and Civil Works a) The [Builder] must allow for site remediation and a final [Remediation Action Plan] report and clearance certificate. b) The [Builder] must allow for bulk and detailed excavation in OTR and rock including removal of surplus soil off site as required to construct footings, lift pits, basements, in-ground tanks, in-ground services and the like. This includes excavation through fill material placed in existing basement structure[s], and the demolition of any structures within service trenches. … e) For the avoidance of any doubt, the [Builder] is responsible for all site conditions above and below ground other than contamination as defined by the EPA. This includes the sub-soil condition of being hard or soft; loose or stiff; high water table; artefacts, minerals or anything (both natural or artificial) found under ground; under and over ground services; trees or any other material falling into the excavated pit; disposal of collected rain water; and the health and safety of workers and visitors. … j) The [Builder] is responsible for removal of all excavation materials. In the event the [Builder] uncovers any material that it deems to be contaminated in any manner, the [Builder] is responsible for the removal and correct disposal and has allowed for any costs associated in the Contract."
It can be seen that in cl 5(e) of the Principal's Project Requirements an exception is made, from the scope of works, for "contamination as defined by the EPA", which can be contrasted with the provision in cl 5(j) that the Builder was in fact responsible for the removal of contaminated material.
In any event, as I set out below, Mr Corsaro's submissions as to the Builder's entitlement to a variation, were directed to "general solid waste" or "GSW", rather than "restricted solid waste" or "RSW". It is RSW, rather than GSW, that constituted contaminated waste.
The Envirotech Remediation Action Plan required the removal of GSW and RSW. Mr Corsaro submitted, by reference to the site area referred to in the Envirotech Remedial Action Plan, that removal of the upper two metres of the site involved removing 3,298 cubic metres of RSW and 3,054 cubic metres of GSW.
Mr Corsaro submitted that photographs of the site taken in August 2017 established that the RSW and GSW was removed.
Mr Corsaro then submitted that, "one can reasonably infer" from a minute of the "Project Control Group" dated 9 August 2017 that additional GSW - not RSW - was found in the course of the detailed excavation for footings".
Mr Corsaro referred to "Item 21" in that minute which is as follows: "External Services Coordination [The Builder] confirmed they have a services management coordination checklist. CPDM [the original Principal's Representative] requested this to be included in the [Project Control Group] report."
I am unable to see how the inference for which Mr Corsaro contended could arise from that entry.
Mr Corsaro then submitted that material in an Adjudicator's Determination in relation to a claim made by the Builder's subcontractor, Innovative Civil, under the Building and Construction Industry Security of Payment Act, showed that "Innovative Civil removed 66 loads of GSW".
I am not able to see how the relevant Adjudication Determination establishes this proposition.
In any event, the provisions in the Contract to which I have referred establish that the removal of GSW was within the scope of the Builder's work under the Contract.
In neither his written or oral submissions did Mr Corsaro attempt to engage with this point; a point fatal to this aspect of the Builder's claim.

Shoring piles - changes in scope and additional depth

Mr Corsaro described this aspect of the Builder's claim as relating to "the additional three metres in depth required for the shoring piles". This additional work was the subject of a variation claim made by Innovative Civil on the Builder.
Again, the Developer's primary submission was that this work was within the Builder's scope of works under the Contract and was not a variation.
Part G of the Contract set out the scope of works which included "piling" and "shoring and capping beam construction".
Included in the Principal's Project Requirements under the Contract was "all excavation, piling, shoring, temporary services, site establishment and fencing".
Mr Corsaro referred to an email dated 19 October 2017 from the Developer's architect to the fire engineer and others, referring to the "need to extend basement footprint to accommodate car spaces" in the areas described as "Basement 3" and "Basement 2".
Mr Corsaro referred to two photographs in evidence and submitted that "there can be no real issue that this additional work was done". I am not able to draw that conclusion from the photographs to which Mr Corsaro referred.
Mr Corsaro then referred to assertions made by Innovative Civil's adjudication application in the proceedings under the Building and Construction Industry Security of Payment Act to which I have referred, [27] and submitted that "absent evidence to the contrary, as a matter of logic and experience, the inference is that this work was done and it was reasonable for Mr Andrews to proceed on that basis".
I am not able to see how I could come to that conclusion.
In any event, again, Mr Corsaro did not seek to engage with the Developer's submission that this work was within the scope of works under the Contract.

Shoring piles - anchors - capping beam, additional carparking

Mr Corsaro said in his submissions that "this claim relates to the additional costs associated with the carpark shoring piles resulting from the section 96 changes referred to earlier". In fact, Mr Corsaro had not earlier referred to any "section 96 changes". Mr Corsaro was evidently referring to what Mr Andrews described in his report as the "S 96 conditions of consent".
In that regard, Mr Andrews opined: "I have determined that the additional capping beam formwork claim by [the Builder] is due to bulk excavation works included in the original contract sum and is not due to Section 96 amendments." (Emphasis added.)
Mr Andrews' evidence thus contradicted the case Mr Corsaro sought to make on behalf of the Builder.

Consultants' fees

In its 10 March 2017 Tender, the Builder made a "provisional allowance" for "Consulting Fees" of $300,000.
However, in Part H of the Contract, which dealt with "Provisional Sums", it was stated that "there are no provisional sums".
The Developer submitted that the Builder bore the contractual risk that consultants' fees would be more than the $300,000 that the Builder allowed in its tender.
Mr Corsaro did not engage with this submission but contended that I should accept Mr Andrews' evidence that he "reviewed all invoices for all consultants" and that Mr Tobias Seeto, the quantity surveyor who gave evidence on behalf of the Developer, had given evidence that "if the Court were to find [the Builder] as legally entitled to this claim, the quantum was agreed in the amount of $286,837.45".
This is not a fair summary of what Mr Seeto said. Mr Seeto said, on what he described as an "if found basis", that a total of professional fees of $586,837.45, which figure assumed that the Contract made provision for $300,000 of consultants' fees, was reasonable "for this sized project".
What Mr Seeto also said was that: "8.8.4 Based on the information provided in the invoices, I am unable to express an opinion on whether: 8.8.4.1 All the invoices claimed are valid for works to do with the project. 8.8.4.2 The works associated with the invoices have been carried out by the consultants. 8.8.4.3 The invoices have been paid by [the Builder]."
My attention has not been directed to any evidence that establishes any of the matters the subject of Mr Seeto's reservations.

Delay costs

The Builder also claimed delay costs.
In his closing submissions, Mr Corsaro contended that these are a result of the Builder's "misleading or deceptive conduct claim pertaining to the contract works representations" or alternatively arising from its claim under the Further Arrangement.
I have not accepted either of those two claims.
I have also rejected the Builder's case that it was given "go slow" instructions.

Conclusion

Because of the multiplicity of issues that arose in these proceedings, it is not yet clear to me what the final implications are of the findings that I have made for the ultimate outcome of these proceedings.
I will give the parties an opportunity to consider these reasons and then invite submissions as to what orders are necessary to give effect to the reasons and what, if any, further issues require resolution.

Endnotes

Clause 7.
Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law.
The transcript records that I erroneously said "court reporter".
Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2; [1938] HCA 34 (Dixon J) and see s 140(2) Evidence Act 1995 (NSW).
Ibid.
Technology and Construction List Cross-Claim Statement at [13].
At [3] above.
Clause 5.
Subject to the Builder's misleading or deceptive conduct claim; which for reasons set out below I do not accept.
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256; [1987] HCA 5 (Deane J); see also Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32 at [14]-[16] (Kiefel CJ, Bell and Keane JJ) and [164] (Nettle, Gordon and Edelman JJ); Keith Mason, Mason & Carter's Restitution Law in Australia (4th ed, 2021, LexisNexis) at 353.
YTO Construction Pty Ltd v Innovative Civil Pty Ltd [2018] NSWSC 1354 at [4] (Rein J); YTO Construction Pty Ltd v Innovative Civil Pty Ltd [2019] NSWCA 110 at [6] (White JA, Macfarlan JA and Emmett AJA agreeing).
Technology and Construction List Cross-Claim Statement at [22].
At [6] above.
At [75] above.
Technology and Construction List Cross-Claim Statement at [51].
Virgin Excavated Natural Material.
See Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88; [1984] FCA 180 (Bowen CJ, Lockhart and Fitzgerald JJ).
See [104].
Bucknell v Commercial Banking Company of Sydney Ltd (1937) 58 CLR 155 at 164; [1937] HCA 35 (Dixon J, with whom McTiernan J agreed).
Piggott v Townsend [1926] 27 SR(NSW) 25 at 28 (Ferguson J), citing Robins v Goddard [1905] 1 KB 294 at 301 (Collins MR).
Clause 37.4(a).
Clause 37.4(b).
Clause 37.4(b).
See [90] above.
Clause 7 of the Formal Instrument Agreement.
Remediation Action Plan.
See [90] above. 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. Decision last updated: 28 June 2023

Australian Consumer Law Corporations Act 2001(Cth)

Ganghui Pty Ltd v YTO Construction Pty Ltd

At a glance

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Decision date

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Judgment (39 paragraphs)

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Legislation Cited (5)

Cases Cited (12)