Geneville Constructions Pty Ltd v Leslight

District Court of NSW|2017-11-27|Before: Ms P

J Manner (Plaintiff) J A Darvall (Defendant)

Solicitors: Usher Levi (Plaintiff) Paul Mattick & Associates (Defendant) File Number(s): 2015/00288845

Judgment

This action relates to a claim by the plaintiff building company for moneys allegedly owing to it by the defendant in relation to construction work allegedly performed by the plaintiff and sub-contractors retained by it at a duplex development at Sandridge Street, Bondi in Sydney in the State of New South Wales. The plaintiff claims that a contract was entered into between it and the proprietor of the land, the defendant Mr Brett Barry Leslight, for the plaintiff to perform construction and related work at the site. The plaintiff sues: 1. In contract; and 2. In the alternative, in quantum meruit.
There was no formal written contract between the plaintiff and the defendant. The plaintiff claims that the contract was partly oral and partly in writing. The proceedings raise issues in relation to s 7 and s 10 of the Home Building Act 1989 (NSW) ("the Act").
The defendant denies liability and says that he has paid all invoices forwarded to him during the construction phase. The defendant also brings a Cross-Claim against the plaintiff. This claim includes claims for additional finance costs, loss of expected rents and additional accommodation costs said to be due to delays in work caused by the plaintiff. There is also a claim in relation to alleged poor workmanship concerning the construction work which has been completed by the plaintiff.
The plaintiff, which is a construction company of which Mr Gene John Phillips is the director and a licensed builder, denies the claims in the Cross-Claim.
Accordingly, the Court must determine: 1. What was the agreement made between the parties; 2. Whether there was a valid contract between the plaintiff and the defendant; 3. In the alternative, the reasonable value of the work performed by the plaintiff on a quantum meruit basis; and 4. Whether there is any substance in the Cross-Claim brought by the defendant.

Amended Statement of Claim

The plaintiff has filed an Amended Statement of Claim on 19 April 2017.
The plaintiff pleads that the defendant is and was at all material times the registered owner of the land in Sandridge Street, Bondi ("the Property"), the subject of the proceedings.
The plaintiff pleads its case in two causes of action. First, the plaintiff pleads that on or about 20 March 2012, the plaintiff and the defendant entered into a contract whereby the defendant requested and directed the plaintiff to carry out works and services in connection with the construction of a residential development comprising two multi-level dwellings on the Property. The agreement was said to be partly oral and partly in writing and was made during a telephone conversation between Mr Phillips and the defendant on 20 March 2012.
The terms of the agreement allegedly include that the plaintiff would carry out works and services in accordance with the specifications and drawings provided by the defendant to it from time to time and any request or direction from the defendant with regard to the overall look and specifications of the project. It is pleaded that the defendant would pay the plaintiff on a "cost plus basis" for the works with the agreed percentage profit being 15%. Further terms are pleaded including that the defendant would pay progress claims within seven days of receiving the progress claims and also would pay the plaintiff interest on any overdue amounts at the rate of 20% per annum to cover the plaintiff's financing costs.
It is pleaded that pursuant to the agreement, the plaintiff carried out work and provided services in accordance with the specifications and drawings from 20 March 2012 to 19 March 2014. It is pleaded that progress claims for the work totalling $548,198.44 were made and the plaintiff has only received part payment for the work from the defendant in the amount of $219,064.15. It is pleaded that in breach of the agreement, the defendant has failed to pay the balance and, as a result, the agreement was terminated by the plaintiff on or about 19 March 2014 because of the defendant's breach which included physically locking out the plaintiff from the Property.
In the alternative, the plaintiff makes a claim in quantum meruit relying on expert reports assessing the reasonable value of the work provided by the plaintiff. It is pleaded that the defendant has obtained the benefit of the work requested and has been unjustly enriched at the expense of the plaintiff by not paying for the value of the work.

Defence

The defendant filed a Defence to the Amended Statement of Claim on 4 May 2017. The defendant in essence pleads that the agreement between the parties was far more limited than that pleaded by the plaintiff and that the agreement was wholly oral. In relation to the work agreed, the defendant pleads that it was agreed that he would pay the reasonable cost of the works properly undertaken including a charge of 15% for project management services. It is accepted that it was agreed that the plaintiff would make regular progress claims for work and services provided the claims were within those agreed and that the defendant would pay them within seven days. In cross-examination, the defendant Mr Leslight gave evidence that a number of these concessions in relation to terms agreed in the Defence were "inaccurate". No application was made at any stage following this evidence by the defendant to file an Amended Defence.
The defendant says that the works and services were provided by the plaintiff at the Property between 17 October 2012 and 5 October 2013, a period much shorter than that relied on by the plaintiff. It is said that the plaintiff provided a further estimate for works of $3,904,519.41 in September 2013 and the quotation was not accepted by the defendant and the plaintiff was not engaged to undertake further work or services.
The defendant also relies on ss 7 and 10 of the Act and asserts that the plaintiff failed to provide and obtain a contract in writing for the services and works it intended to provide. Accordingly, the plaintiff was not entitled to damages or to enforce any other remedy in respect of any alleged breach of the contract committed by the defendant and the contract is unenforceable.
In relation to the quantum meruit claim, the defendant does not admit the allegations and pleads a set-off in relation to its Cross-Claim.

Cross-Claim

The defendant filed a Statement of Cross-Claim on 3 May 2017.
Under the Cross-Claim, the defendant pleads that certain representations were made by Mr Phillips on behalf of the plaintiff to him and that it was on the basis of those representations that the oral agreement was made to retain the services of the plaintiff "for supervision, project management and other building services".
It is alleged in the Cross-Claim that certain work and site supervision and project management of the site excavation was not provided by the plaintiff in a proper and workmanlike manner, resulting in unnecessary excavation and unnecessary works causing loss to the defendant. These works included unnecessary excavation, the unnecessary installation of concrete piers and the unnecessary installation of starter bars to reinforced concrete fittings.
A claim is also made by the defendant for delay by the plaintiff in failing to undertake the performance of its services and those of the trades which it supervised in a prompt and timely manner. Claims are made for finance costs, loss of expected rents and additional accommodation costs totalling $372,721.
The defendant also pleads poor workmanship in relation to a concrete slab which was alleged not to have been poured to the correct or consistent level.

Defence to Cross-Claim

A Defence was filed to the Cross-Claim on 19 May 2017. In essence, the claims in the Cross-Claim are denied. It is further pleaded: 1. That the excavation was not over-excavated; 2. The piers were constructed at the request and direction of the defendant and his engineer and to allow for a storage area under the pool deck; and 3. The starter bars were installed in accordance with engineering drawings or, if not, in a location appropriate and approved by the defendant.
The delays are rejected by the plaintiff as pleaded. It pleads that no previous complaint had been made in relation to the alleged delays until the Cross-Claim was filed. It is pleaded that since 3 December 2013, the plaintiff has been locked out of the site and has had no reasonable opportunity to remedy any alleged delay or any alleged faulty workmanship.

Background facts

The background facts in relation to this matter are fairly complex and it is necessary to set them out in a summary form to assist in understanding the issues between the parties. The matters which I refer to below are my findings of fact, unless I indicate to the contrary.
The plaintiff Geneville, is a corporation involved in the construction of residential dwellings including the provision of project management.
Mr Phillips is the director and principal officer of the plaintiff and is a licensed builder of substantial experience.
The defendant, Mr Leslight, is the General Manager of a motor repair business which is owned by his parents through a company.
In late 2009 and early 2010, the plaintiff was engaged, according to Mr Phillips, to undertake minor construction works at a workshop apparently owned by the defendant's parents. This was the means by which the defendant and Mr Phillips came to know each other. Mr Leslight places this engagement in time to about July 2009 but nothing turns on this difference of evidence.
The defendant Mr Leslight was the registered proprietor of the Property in Sandridge Street, Bondi. He proposed to demolish the existing structure on that Property and to build two duplex homes. Discussions occurred between Mr Leslight and Mr Phillips in relation to whether Mr Phillips wanted to enter into a joint venture with Mr Leslight to develop the project. Mr Phillips said he was not able to become involved in the project on that basis. In cross-examination, Mr Phillips said this was because he was busy with his business work. However, an email dated 1 February 2010 from Mr Phillips to Mr Leslight suggests that at least one significant reason for the lack of interest of Mr Phillips in the proposed venture was that the bank would not lend him the money to get into the proposal.
On 30 March 2010, Mr Phillips met with Mr Leslight as a result of a request by Mr Leslight, to discuss works that Mr Leslight wished to have carried out at the Sandridge Street, Bondi site ("Site"). Mr Phillips states that he recalls that the meeting lasted approximately two hours and during the meeting, Mr Leslight described to him in general terms the works that he wanted carried out including the types of materials and the standards of finishes that he wanted to be used in the construction. Mr Phillips claims that he stated to Mr Leslight that based on the standard of finishes he wanted to achieve, the construction costs for the project would be in the range of $3,500-$5,000 per square metre. Mr Leslight says he does not recall this meeting but it is confirmed by a job diary which Mr Phillips prepared. Although there was an attack on Mr Phillips by counsel for the defendant on the basis that the job diary may have been prepared by him later, I accept Mr Phillips' evidence that the diary was prepared at or shortly after the time of the entries. The level of detail in it is unlikely to have been prepared after the event. Mr Leslight also could not dispute numerous entries in the diary when he was taken to them. Accordingly, I find that the meeting occurred on 30 March 2010.
Over the next year or so, there were numerous meetings between Mr Phillips and Mr Leslight in relation to the project at which various costings and the works proposed were discussed. These are reflected in the job diary maintained by Mr Phillips.
In the period between February and May 2011, Mr Leslight forwarded to Mr Phillips various drawings, diagrams, photograph compilations and model plans of the proposed building to be constructed on the Site.
On 28 September 2011, there was a meeting between Mr Phillips and Mr Leslight to discuss the proposed building work and the costs. The various options as to construction were also discussed. Mr Phillips claims that there was a further discussion in relation to a price estimate and a conversation occurred in which he informed Mr Leslight that the building costs would be around $3,500-$5,000 per square metre and that Mr Leslight agreed with this. However, Mr Phillips claims that Mr Leslight told him that he needed Mr Phillips to create a "low-budget" estimate of approximately $900,000 per townhouse in order to keep council fees to be paid by him to a minimum. Mr Phillips claims that he said he would not be comfortable with adjusting an estimate to minimise council fees but also said he would be able to prepare an estimate based on "a very low standard of finish." Mr Leslight denies that conversation. Mr Leslight concedes that Mr Phillips provided him with the cost estimate of $3,500-$4,500 per square metre but says it was provided on 4 December 2011. Mr Leslight claims that he told Mr Phillips that his bank had approved a construction budget of around $900,000 per unit and that they were constrained to work within that budget. Mr Phillips denied that any such conversation occurred.
On 4 December 2011, Mr Phillips sent an email to Mr Leslight attaching a document entitled "preliminary estimate" for the works at the Site. The email included: "I have attached an estimate based on the figures of around $900,000 per property as requested Please let me know if this is OK. I think for a high-quality finish & fixtures you will be looking at $3500-$4500 per sqm, but we will have to get various quotes to ensure we have an accurate budget."
Mr Phillips states in his affidavit that when he prepared the preliminary estimate, he used very low per square metre rates which he regarded as being unrealistic if high quality finishes and materials were to be used in the construction but had done this at Mr Leslight's request for the Council. Mr Phillips says that he believed a more realistic figure for high quality finishes' materials would be in the range of $3,500-$5,000 per square metre. Mr Leslight states that on a number of occasions he told Mr Phillips that his bank had assessed the construction cost and approved a budget of around $900,000 per unit and he relied on Mr Phillips to work within the budget. He denies any conversations about preparing a "low estimate" for the purposes of limiting s 96 contributions to the Council.
There is an email chain including an email dated 16 January 2012 in which Mr Leslight asks Mr Phillips in relation to an examination of the project by a quantity surveyor suggested by Mr Phillips: "Will he stick to the original guided pricing of $912,000". In a later email sent on 16 January 2012 at 4.43pm, Mr Leslight states: "I need to stick to that figure as this is all the council want to substantiate. As you are aware the section 96 contribution is 1% of the build cost. If he goes over we have to pay more. Do you have a good working relationship with this guy so we can stick to that figure."
In my view, which I set out in further detail below, the email correspondence referred to is evidence which is consistent with the evidence of Mr Phillips on this issue. I prefer Mr Phillips' evidence. It seems logical that the defendant would wish to limit the s 96 contributions to council to which he was exposed and provide a lower estimate for that purpose. However, the objective evidence is that a higher square metre estimate was provided by Mr Phillips which was accepted by Mr Leslight. The wording of the 16 January 2012 emails in my view confirms Mr Phillips' evidence. I do not accept Mr Leslight's evidence that he told Mr Phillips that the bank was only allowing around $912,000 for each townhouse. I accept Mr Phillips' evidence that he would have walked away from the project if he had been told this by Mr Leslight.
The evidence establishes that a very important conversation occurred on or about 20 March 2012 between Mr Leslight and Mr Phillips in relation to advancing the project. This is not reflected in the job diary prepared by Mr Phillips.
Email correspondence from Mr Phillips to Mr Leslight dated 20 March 2012 confirms that it was proposed that Mr Leslight be the owner builder and that there was to be a meeting to discuss further detail.
Mr Phillips claims that on 20 March 2012 he had a telephone conversation with Mr Leslight in which Mr Leslight said that he would like to hire the plaintiff as the builder on the site but also wanted to keep costs down. Mr Phillips claims that he said he would be happy to do the work and that the plaintiff could undertake the work on a cost-plus basis as had been done previously and Mr Leslight could pay the plaintiff for the work undertaken.
Mr Phillips claims that he told Mr Leslight that the margin as a builder would be 15% and would be applied to all supplies, equipment and labour that the plaintiff invoiced. Mr Phillips says he agreed that a margin would not have to be paid if Mr Leslight paid the contractors directly. Mr Phillips says that he told Mr Leslight that a deposit would be needed prior to mobilising on site and that Mr Leslight would need to commit to paying invoices within a week, to keep on top of payments and to pay interest on late payments of 20% to meet overdraft costs. Mr Phillips claims that Mr Leslight agreed to these terms. Mr Phillips states that a conversation occurred soon after this where Mr Leslight said that he wanted Mr Phillips to be flexible with arrangements and he wanted to pay suppliers and other contractors directly where possible to save paying the 15% mark up. Mr Phillips claims that he agreed on these terms on behalf of the plaintiff.
Mr Leslight denies Mr Phillips' version of the conversation but accepts that a conversation occurred about the plaintiff providing project management. He says that there was no discussion about rates to be charged and no written agreement was entered into. Mr Leslight asserts that he had discussed with Mr Phillips that his services would be limited in time to the completion of excavation as he had indicated his concerns with unknown subsoil conditions. Mr Leslight claims that they agreed that upon completion of the excavation works, Geneville's role would be reviewed. Mr Leslight denies that there was any mention of a deposit or interest on late payments. He also denies that there was any discussion about an "agreed percentage".
The telephone discussion is alleged by the plaintiff in the proceedings as amounting to the contract between the parties.
Whilst Mr Leslight claims that there was no discussion in relation to a 15% builder's margin or agreed percentage, it is noted that that percentage is included on the invoices forwarded thereafter by the plaintiff to the defendant. The conversation put forward by Mr Phillips does not involve any assertion of an agreement as to the rates of the various workers who would work on the project for the plaintiff. However, again, these rates are set out in virtually all of the invoices forwarded by the plaintiff to the defendant except for a few invoices including the last two invoices sent with the plaintiff's solicitors' demand. Mr Leslight claims that when he received the first invoice and noted the plaintiff included a 15% charge, he expressed dissatisfaction to Mr Phillips for not having discussed it with him (oral evidence in chief) but says that as the works "were at a delicate stage and beginning to progress" he said he paid the account to avoid delay.
Following the 20 March 2012 conversation, Mr Phillips claims that Mr Leslight provided to him a number of documents including the s 96 consent and plans for the building work, stormwater details and a sub-floor plan prepared by a firm of building designers and engineers.
Mr Phillips' evidence is that from about August 2012, the plaintiff commenced work at the Site, starting with excavation work and site preparation. Mr Phillips states that he was present on Site for at least a portion of each day and that works were carried out by the plaintiff on Site. He said he was directly involved with arranging these works, undertaking the works personally in some instances and arranging suppliers to supply goods and services to enable the works to be carried out. He also states that he personally oversaw labourers on Site and signed off on their labour timesheets which were submitted to the plaintiff on a weekly basis. Mr Leslight says that he cannot confirm whether Mr Phillips was present on Site each day and that he visited the Site each day and he was often not there when he visited. He also says that he is unable to verify the accuracy of the timesheets.
Mr Phillips gives evidence that he maintained a detailed recording of the hours spent on the Site on the plaintiff's MYOB accounting system, including for each labourer. He also states that he recorded notes in his job diary for work carried out on a particular day on the project and that he used the job diary to issue invoices to Mr Leslight in relation to the work carried out. Mr Leslight says he was not provided with a copy of the summary of labour hours from the MYOB system and is not able to acknowledge that the invoices and job diary accurately show the actual services provided by the plaintiff. However, he does not accept the accuracy of the invoices, which is an issue in the proceedings. Mr Phillips says that each line item of work described in the invoices forwarded to Mr Leslight was accurate and carried out on the date specified.
Mr Phillips says that during the course of the work, various changes were made to the budget. Mr Leslight denies that up to the stage of completion of the excavation, there were any changes. Mr Phillips says that from his review of the records, the plaintiff paid 181 individual supplier invoices for the project, copies of which he annexes to his affidavit. Mr Leslight states that he is not sure that all of the invoices relate to the project. This was the subject of cross-examination of Mr Phillips.
Mr Phillips claims that there was late payment by the defendant, Mr Leslight, of many of the plaintiff's invoices. Mr Leslight says that he does not recall receiving some invoices.
Mr Leslight claims in the proceedings that there were some major defects in the works completed by the plaintiff and other works were not completed. He says he is not a professional in the area of construction and building and it was only when the building expert inspected the site that the major concerns with the work were brought to his attention. He says that the report from his expert was received after the plaintiff had left the site and previously he was pre-occupied with getting the dwellings constructed. He also says that the plaintiff had the opportunity to inspect the site up until October 2013 when it removed its equipment from the site.
The question whether there are defects and incomplete works at the Site is a significant one in the proceedings. Mr Phillips says that at no time during the completion of the works did Mr Leslight make any complaint of defective or incomplete works to him or to any other person to his knowledge and that various aspects of the work were inspected by Mr Leslight's engineer, namely JDT Designs, and all inspections were deemed satisfactory. He says that the first time he ever heard of any complaint relating to purported defective works or alleged delay was on or about 24 March 2016 upon reading a cross-application filed by Mr Leslight in the New South Wales Civil and Administrative Tribunal. He says he was never given an opportunity to inspect the Site prior to the works being "covered up" and as they are now covered up, they cannot be inspected satisfactorily without invasive investigations. He also states that the plaintiff was never given the opportunity to remedy any alleged defects.
This issue is the subject of differing expert opinions. The issue was considered by a Referee who examined the alleged defects claim and prepared a report. I will discuss this further below.
By the second part of 2013, issues began to emerge in relation to the construction works at the Site. Despite works apparently proceeding at the Site, Mr Leslight was in discussions with his financier to obtain further funds for the works. Mr Phillips claims that there were delays in Mr Leslight paying outstanding invoices and 11 October 2013 was the final day that the plaintiff actively worked at the Site because of what Mr Phillips says was Mr Leslight's continued non-payment and refusal to communicate with the plaintiff.
Mr Phillips says that in the period from 11 October 2013 he attempted to gain instructions from Mr Leslight and eventually a meeting occurred which is disputed. Mr Phillips says that from 11 October 2013 to 3 December 2013 the plaintiff continued works off Site and its tools and equipment were left on Site for further works to continue at a later stage once Mr Leslight had obtained funding and subsequently paid the amounts then owing to the plaintiff. Mr Phillips says that from 13 October 2013 he began moving his men and equipment off site and to clean up the Site and remove most of his tools and equipment from the Site. He says that he continued in his attempts to speak to Mr Leslight and on 3 December 2013 attended the Site and observed that the access code on the front gate lock had been changed and a new chain and lock had been installed across the front gate which prevented access to the Site. He said that he was not given any prior warning of this and his attempts to telephone Mr Leslight on a number of occasions were without success.
Mr Phillips says that he was told by a site contractor that another builder had taken over the Site. He said he was first made aware of this on 9 December 2013. When further attempts were made to communicate with Mr Leslight without success he contacted lawyers to make demand for the amounts allegedly owed to the plaintiff. Mr Phillips says that on 19 March 2014, he instructed the plaintiff's lawyers to issue a notice to Mr Leslight terminating the agreement on the basis of Mr Leslight's substantial breaches in not paying the invoices or permitting access to the plaintiff to continue the works.
Mr Leslight disputes the invoices which were said to be outstanding by the plaintiff and says that the plaintiff had removed all of its equipment from the Site by 12 October 2013. Mr Leslight says the Site was only secured with a new lock when it appeared clear that the plaintiff had vacated the Site. Mr Leslight says that he does not recall any invoices being outstanding as at 22 November 2013. He also denies receiving any calls or messages to telephone Mr Phillips. He says that as he believed the plaintiff had left the Site in October 2013, the other builder, Micrah Projects, was appointed to undertake the construction works on 1 November 2013 and commenced work shortly thereafter. Mr Leslight claims that he did not receive emails or an outstanding statement from the plaintiff. Effectively, Mr Leslight claims that the plaintiff had abandoned the site.
There is, accordingly, a major factual issue between the parties as to whether the plaintiff abandoned the Site by not continuing with the work and removing all its equipment from the Site or whether the defendant breached the agreement which had been entered into by failing to pay invoices, failing to return communications and eventually locking the plaintiff out from the site.
In the event that no enforceable contract is found, the court will have to determine the claim made by the plaintiff for a quantum meruit.
As stated above, there is also a Cross-Claim in which Mr Leslight claims that the work undertaken by the plaintiff was defective and was not complete.

Summary of the evidence relied upon

Both the plaintiff and the defendant have filed and served extensive lay and expert evidence. The lay evidence relied upon by the plaintiff consisted of three affidavits and seven lever arch folders of exhibited documents. The defendant relied on numerous affidavits prepared by him. Those affidavits also had a number of annexures.
The parties also relied on expert building and quantity surveyor reports some of which had numerous annexures.

Evidence for the plaintiff

Affidavit evidence was read by the plaintiff from its director Mr Gene Phillips and from his sister Ms Patricia Phillips. Mr Phillips is an experienced licensed builder. Ms Phillips is the office manager of the plaintiff and was office manager for the relevant period.

Evidence of Mr Gene Phillips

Two affidavits of Mr Phillips dated 29 May 2017 and 13 November 2017 were read by the plaintiff.
In relation to his first affidavit sworn 29 May 2017, Mr Phillips gives evidence that the plaintiff is a corporation in the business of construction of residential dwellings, including project management of the construction of such dwellings. Mr Phillips gives evidence that he has been a licensed builder since June 1994 and that he was the construction manager for works carried out by the plaintiff at the Property of the defendant at Sandridge Street, Bondi.
In paragraphs 8-23 of his first affidavit, Mr Phillips gives the background to the agreement which he alleges was reached between the defendant and the plaintiff concerning construction works at the Site.
Mr Phillips' first affidavit sets out evidence of meetings on and from 30 March 2010 where the works that Mr Leslight wished to have carried out at the Site to construct two new duplex houses were discussed.
Mr Phillips exhibits to his first affidavit voluminous documentation in four volumes in relation to the matters in his affidavit. Behind Tab 1 in volume 1 of the exhibit is a job diary which Mr Phillips states that he began recording and keeping from 30 March 2010 concerning any work that the plaintiff performed in relation to the houses that Mr Leslight wished to be constructed on the Site. Mr Phillips states that it is his standard practice to keep a job diary for all projects that the plaintiff is working on and he recorded a particular level of detail in his job diary on this occasion due to the cost-plus nature of the work and there being no formal lump sum written contract in place (paragraph 10).
Mr Phillips gives evidence that he prepared the job diary by taking notes each day of the activities that he had carried out on the project or that he had observed or ascertained that others had carried out. The documents were all stored and filed electronically on the plaintiff's server under the particular job number allocated to the site. Mr Phillips gives evidence that the notes in the job diary recorded works performed on the site, activities he was carrying out, conversations he had with Mr Leslight and the amount of hours taken by himself and other workers doing the activities. Mr Phillips gives evidence that he recorded notes in the job diary contemporaneously each day or if it was missed on a particular day, on the following day. He also states that he would "religiously check" his entries at the end of each week to make sure that nothing was missed.
Mr Phillips states that towards the end of the job, when Mr Leslight was late in paying invoices, he compiled an expanded job diary that included documents that were stored and filed electronically on the plaintiff's server under the particular job number (1837). The expanded job diary is exhibited at Tab 2 in volume 1 to his first affidavit.
Mr Phillips exhibits to his affidavit various drawings which Mr Leslight forwarded to him in the period from 16 February 2011. Mr Phillips gives evidence of various discussions he had with Mr Leslight including an important discussion on 28 September 2011 where he claims he said to Mr Leslight that based on what he had been told, building costs for the project would be around $3,500 to $5,000 per square metre.
Mr Phillips gives evidence that Mr Leslight thought he was correct but told him that he needed to create a "low-budget" of approximately $900,000 per townhouse in order to keep council fees to a minimum. Mr Phillips claims that he stated to Mr Leslight that he would not be comfortable with adjusting an estimate to minimise council fees but that he would look to prepare an estimate based on a very low standard of finish. Mr Phillips relies on an email he claims was sent to Mr Leslight on 4 December 2011 attaching an estimate of $900,000 per property as requested but stating that for a high-quality finish and fixtures, that Mr Leslight would be looking at $3,500 to $4,500 per square metre but saying that it would be necessary to get various quotes to ensure that an accurate budget would be obtained.
Mr Phillips states that at the time he prepared the "preliminary estimate" sent to Mr Leslight on 4 December 2011, he believed that the rates used in the estimate were very low per square metre and were unrealistic if high-quality finishes and materials would be used in construction. He confirmed that a more realistic figure per square metre for high-quality finishes and materials would be in the range of $3,500 to $5,000 per square metre.
Mr Phillips gives evidence of the important conversation which occurred on 20 March 2012 in which Mr Leslight stated that he would like to hire the plaintiff as the builder on the Bondi site but wanted also to keep the costs down. Mr Phillips gives evidence that Mr Leslight said that he wanted the plaintiff to assist on the build "in a flexible way". Mr Phillips gives evidence that he indicated he would be happy to work on that basis and that the plaintiff could undertake the work on a cost-plus basis and Mr Leslight could pay for the work undertaken. There was alleged to have been a conversation in relation to the builder's margin and that Mr Phillips stated that he would be happy to apply a 15% margin which would be applied to all suppliers, equipment, labour and other matters that the plaintiff invoices for. It was agreed that Mr Leslight would not pay a margin if he paid the contractors directly. Mr Phillips gives evidence that he expressed the opinion that the drawings provided to him were "incomplete" and that Mr Leslight accepted that he was not certain of the works which he wanted the plaintiff to carry out.
Mr Phillips claims that he stated that the plaintiff would need a deposit prior to mobilising on the site and that the defendant would need to commit to paying within a week of being invoiced. It is alleged that Mr Leslight agreed to this and also agreed to pay interest on late payments of 20% to meet the plaintiff's overdraft costs.
Mr Phillips gives extensive evidence as to what he meant by the term "cost-plus" which he states was a well-known term in the construction industry.
Mr Phillips gives evidence that as at 20 March 2012, it was his belief that Mr Leslight had not provided him with sufficient detailed drawings, designs and data to enable him to perform a detailed and realistic estimate of the work partly because the design for the project was not completed with sufficient detail to enable him to know the total price of the works.
Mr Phillips gives evidence of a further conversation on or shortly after 20 March 2012 where Mr Leslight made clear that he wanted to pay suppliers and other contractors directly where possible to save paying the 15% mark-up which Mr Phillips agreed to on behalf of the plaintiff.
Mr Phillips then gives evidence Mr Leslight provided him with various relevant documents including the s 96 consent and plans, stormwater details and a sub-floor plan prepared by external consultants.
Mr Phillips then gives extensive evidence in relation to the works carried out by the plaintiff. He states that he was present on site for at least a portion of each day that works were carried out by the plaintiff on site and that he was directly involved with arranging the works, undertaking the works personally in some circumstances and arranging suppliers to supply goods and services to enable the works to be carried out. Mr Phillips states that he was personally responsible for inspecting all aspects of work undertaken on the site as well as updating and liaising with Mr Leslight regarding all aspects of the work undertaken. He gives evidence that he personally oversaw labourers on site and signed off on all labour timesheets submitted to the plaintiff on a weekly basis which he exhibits to his affidavit.
Mr Phillips gives evidence in relation to the invoices exhibited to his affidavit and to Ms Phillips' affidavit. He states that based on his review of the documents and his recollection of the works carried out on the site, he believed that each line of work described in the invoices was carried out as stated.
Mr Phillips gives evidence that the plaintiff paid 181 individual supplier invoices for the project which he exhibits to his affidavit.
Mr Phillips gives evidence of late payment of invoices by Mr Leslight and annexes various documents to his affidavit. He states that at no time during the completion of the works (or at all) did Mr Leslight make any complaint of defective or incomplete works to him or to any other person to his knowledge. He exhibits documents of works inspected and approved by Mr Leslight's engineer, JDT Designs. Mr Phillips states that he was never given an opportunity to inspect the site prior to the works being "covered up" and states that the works undertaken by him are incapable of being inspected satisfactorily without invasive investigation and/or uncovering of the completed works. He states he was never given the opportunity to rectify any alleged defects even if they existed.
Mr Phillips gives extensive evidence of delays or non-payment by Mr Leslight and of his inability to have appropriate communications with Mr Leslight on this issue. Mr Phillips gives evidence that 11 October 2013 was the final day that the plaintiff actively worked on the site but that from 11 October 2013 to 3 December 2013 the plaintiff continued works off-site. Mr Phillips gives evidence of his various attempts to get instructions from Mr Leslight.
Evidence is given by Mr Phillips of a 29 October 2013 meeting between him and Mr Andrew Kola of the plaintiff, Mr Leslight and Mr Leslight's parents. This meeting is denied by Mr Leslight. Mr Phillips claims that he provided Mr Leslight and his father at the meeting with a summary of the invoices to date for the project, both paid and unpaid. Mr Phillips states that the defendant indicated at the meeting that he did not have any more money for the project to keep going at the moment but he was attempting to get more funds from the bank.
As amounts were outstanding to the plaintiff, Mr Phillips gives evidence that on 31 October 2013 he began moving men and equipment off site and cleaning up the site and removing most of the tools and equipment from the site.
Mr Phillips gives evidence of repeated attempts to contact Mr Leslight and of email correspondence with him. Mr Phillips stated that on 3 December 2013 he attempted to gain access to the site and observed that the access code on the front gate lock had been changed and a new lock had been installed at the front gate without warning to him on behalf of the plaintiff.
Mr Phillips gives evidence that on 9 December 2013 he received an email from a subcontractor who was working on the site that a new builder had taken over the site. Mr Phillips gives evidence that he then instructed his solicitors in the proceedings.
In paragraphs 66 and following of his first affidavit, Mr Phillips gives evidence of documents which he provided to experts who have been retained in these proceedings including Mr Lee, a quantity surveyor.
Mr Phillips also annexes photographs taken of the site arranged under various headings corresponding to stages of the works allegedly performed by the plaintiff.
In his second affidavit sworn 13 November 2017, Mr Phillips undertakes a detailed response to the affidavit evidence of the defendant.
It is unnecessary to set out the contents of this affidavit in extensive detail. In summary terms, the affidavit: 1. In paragraphs 12-30 provides Mr Phillips' reasons for the absence of any construction programme, project timeline or timetable for works to be completed at the Site. He said the scope of works was "largely undefined and unpredictable" and there was "constantly evolving" detail of the scope of works to be completed, particularly in relation to the size of the buildings to be constructed and the drawings provided. Evidence is also set out in relation to the provision of estimates of costs including that the rough estimate provided in relation to the townhouses for the purposes of the Council was based on a very low standard of finish; 1. In paragraphs 31-42 of his reply affidavit, Mr Phillips gives evidence in relation to various delays to the works caused by poor cash flow from the defendant, the refusal by the defendant to pay further moneys to the architect to complete the design documentation, numerous requested changes to the plans, inclement weather causing about 198 days in delays, the non-payment of the plaintiff and other contractors on the site by Mr Leslight and latent site conditions including hazardous materials and contaminated soil, the nature of the land and complaints from neighbours. It is said by Mr Phillips that site conditions were largely unknown as at March 2012 because the geotechnical report procured by Mr Leslight was preliminary only and did not involve core drilling to assess the subsurface. It is stated that the sub-ground conditions were not discovered until excavation commenced; 2. In paragraphs 44-56 of his reply affidavit, Mr Phillips gives evidence in relation to his response to the allegations as to inappropriate concrete piers and the alleged defects in the rear pool slab; 3. At paragraphs 57-73 of his reply affidavit, Mr Phillips gives evidence in relation to the absence of any complaint or notification to him or any other person to his knowledge of defective works or incomplete works or any other complaint in relation to the works. Mr Phillips states that the first time he ever heard of any complaint relating to the works was upon reading Mr Leslight's Cross-Claim. Mr Phillips states that there were never any complaints by the defendant regarding the standard of works generally, or the ability of the men on the site or his supervision/management skills. In relation to the amounts claimed by Mr Leslight in the Cross-Claim, Mr Phillips states that he did not have any knowledge prior to the proceedings of Mr Leslight's financing costs or his plan to lease out the property or that he was renting while the project was ongoing; 1. In paragraphs 74-84 of the affidavit, Mr Phillips gives evidence of the conclusion of works on the Site and his attempts to get paid and to obtain further instructions from Mr Leslight; 2. In paragraph 85 of the reply affidavit, Mr Phillips gives evidence that the plaintiff was required to carry out some demolition works on the Site even though the majority of the demolition works were completed by a contractor engaged by Mr Leslight, Active Demolition; 3. In paragraphs 86-93 of the reply affidavit, Mr Phillips gives evidence in relation to his involvement in providing documentation to his structural engineer and quantity surveyor experts; 4. In paragraphs 94-99 of the affidavit, Mr Phillips gives evidence in relation to photographs which he exhibits to his affidavit.
Mr Phillips was subject to an extensive and detailed cross-examination by counsel for the defendant over two days.
In his oral evidence, Mr Phillips confirmed that he had discussions with Mr Leslight in 2009/2010 in relation to a potential joint venture concerning developing the site owned by Mr Leslight but Mr Phillips was not in a position to participate in the joint venture at the time. He agreed that he had then had discussions with Mr Leslight concerning the construction project on the Site.
Mr Phillips confirmed that he had been told by Mr Leslight that he had applied to his bank for a mortgage advance for the purposes of the project. This involved a loan application and the approval by the bank of a loan. Mr Phillips said he believed Mr Leslight had been lent the money by the bank for the project. It was put to Mr Phillips that Mr Leslight had told him that the bank had approved construction funding of $912,000 for each unit. Mr Phillips denied this and he said he did not know the amount that had been lent or what amount Mr Leslight had in the bank to top up any funding which he had: T49.46.
Mr Phillips was then asked questions about the preparation of his job diary which is at Tab 1 of the exhibit to his first affidavit. He agreed that he had begun recording and keeping his job diary from the first meeting recorded in it on 30 March 2010. He stated that he prepared the job diary each day or the following day and checked it at the end of each week. When it was put to him that as at 2010 there was not a job at the Site, Mr Phillips said he kept a diary for everything he did and kept it complete and accurate as much as he could: T50.25.
In relation to the first few pages of Tab 1 to the exhibit to Mr Phillips' affidavit which give summaries of work performed by different persons on the job, Mr Phillips gave evidence that these were generated by MYOB and were as a result of the completion of material at the end of each week which he did with his sister who worked for the plaintiff. The weekly figures were entered into MYOB which updated spreadsheets for the job. In relation to invoices, Mr Phillips gave evidence that he prepared these with his sister at the end of each week. She obtained copies of the invoices and entered them into the accounting software. The numbers and amounts in the invoices were checked and then entered into MYOB. Mr Phillips said his sister did the data entry into MYOB and she printed out the invoices after he checked them. Mr Phillips gave evidence that some work that was completed on the job was not billed.
Mr Phillips was asked questions about the different people working on the project and their different rates. He confirmed that when he worked on construction work he was charged out as a leading hand and not at the management rates: T54.40.
Mr Phillips was asked whether as at September 2011 there was some uncertainty as to what Mr Leslight wanted from the plaintiff. Mr Phillips agreed with this and said he was trying to work out from the start who was doing what on the project. In relation to the reference in the entry in the job diary for 28 September 2011 to "also discussed Owner Builders option due to unknown requirements", Mr Phillips confirmed that it was unknown what role the plaintiff was to play on the project. He said Mr Leslight was trying to work that out: T56.10.
Mr Phillips denied that Mr Leslight told him that the bank was giving him $912,000 for each house and that he needed to get each house built for that. Mr Phillips said that he told Mr Leslight you would only get a "really cheap house" built for that sort of money. He denied that Mr Leslight had said that that was the budget he was working under and said that if he had been told that he would have "walked away" from the project: T56.28.
Mr Phillips was asked about the agreement which he allegedly entered into with the defendant on behalf of the plaintiff which was said to have occurred on 20 March 2012. See paragraph 26 of Mr Phillips' first affidavit. He was also taken to paragraph 3 of the Amended Statement of Claim where it is asserted that a contract was entered into on 20 March 2012. It was put to him that the contract was an important date but was not mentioned in the job diary. Mr Phillips conceded that and said that it was "missing": T58.25. He did not know why it was missing from the job diary: T59.1. This did not appear to me to be a particularly significant omission as both parties accept that an agreement of some sort was reached between the parties on or about 20 March 2012. It does however go to the accuracy and completeness of the job diary maintained by Mr Phillips.
Mr Phillips agreed that the job diary concluded on 21 January 2014.
Mr Phillips was asked some questions in relation to the material behind Tab 2 of the exhibit to his first affidavit. He said it included the job diary and some other documents. He said that the materials behind Tab 2 included all information that "backed up" the job diary to prove that it was accurate: T61.9. Mr Phillips rejected the suggestion that the job diary was compiled in 2013 to 2014: T61.20. He agreed that by December 2013 he was aware that another builder was on the site and that the work in the job diary after that date was tidying up the files and checking all the paperwork.
When asked whether his time on the Site appeared from the hours in the job diary for "management", Mr Phillips denied this and said that he did not charge for all hours that he spent on the job. He said that he was at the Site for about 95% of the days talking to the workers and inspecting the work. He conceded that he was not on the Site every day during the job.
Mr Phillips was taken to an email which he forwarded to the defendant dated 4 December 2011 to which he attached an estimate. The email said: "I have attached an estimate based on the figures of around $900,000 per property as requested. Please let me know if this is OK. I think for a high quality finish & fixtures you will be looking at $3,500-$4,500 per sqm, but we will have to get various quotes to ensure we have an accurate budget" (Tab 2 of Exhibit).
Mr Phillips said that the document he sent was not a budget but a preliminary estimate based on the figures Mr Leslight had told the council. Mr Phillips was asked questions about his email to "Shehzad" and identified that he was the quantity surveyor that was used to consider the preliminary estimate.
Mr Phillips was then asked questions about documents which had been obtained by the defendant before his involvement. He agreed that he had been told that there was a dilapidation report prepared in relation to the adjoining properties but he had not seen the document until much later. He said he understood it was organised by the defendant and his engineer and agreed that this was a prudent step to take. He said he did it for every job. He also agreed that a preliminary geotechnical report was obtained by the defendant. He agreed that he had seen the geotechnical report before he undertook the site investigations. He also agreed that when he arrived at the Site the existing building had been demolished and there was some uncertainty in relation to the subsoil conditions at the Site: T65.47. He later qualified this by saying that the demolition works had been completed by the time the plaintiff commenced its own work on the site.
It was put to Mr Phillips that because of the uncertainty of the subsoil conditions at the Site, the arrangement made between the plaintiff and Mr Leslight was that the plaintiff would only undertake the bulk excavation and that any further work would be taken from there. Mr Phillips disagreed with this and said that once the bulk excavation was done he was to prepare a new budget but he understood that Mr Leslight wished the plaintiff to continue on the job until the shell of the building was constructed. He disagreed that the plaintiff commenced excavation simply in accordance with an agreement to undertake the bulk excavation work and that afterwards it would be reviewed. He also stated that the bulk excavation was not completed. Mr Phillips said that the boundary footings and footings around the pool were undertaken. The former consisted of two retaining walls.
Mr Phillips was taken to his email to Mr Leslight sent on 11 June 2012 where he stated: "At this stage, after assessing all of your documents I would have to say it would be difficult for me to put a firm figure on our costs for assisting you. It will also be difficult to keep the contractors to a strict lump sum price as the documents still need some work. Due to the current documentation the cheapest way to complete this project would be to pay us by the hour at the rates shown on the attached budget sheet. You would be entering into contracts & paying the suppliers/contractors directly so we will not be adding the normal builder's margin … To date I won't have charged for any of my time, but will need to start clocking billable hours from when you get the CC. We will do our best to keep costs to a minimum." (Leslight 8/7/16 affidavit Exhibit Tab 6).
Mr Phillips agreed that the scope of works was difficult to put a cost figure on. Mr Phillips said a final budget was given to Mr Leslight in October 2013 to enable him to go to the bank for further funding. He agreed that the last work was done on the site in October 2013 when a temporary retaining wall was constructed on the left boundary. Mr Phillips said this was requested by the engineer retained by Mr Leslight and it was said to be urgent.
Mr Phillips was taken to his diary entry for 11 August 2012 where he states "costings are very difficult at this stage as we have discovered contaminated fill and rock levels are much deeper than originally thought". Mr Phillips agreed that costings were difficult to provide and that this was made worse by his findings of contaminated fill and deeper rock levels: T70.49. He agreed that Mr Leslight had said to him that the difficulties in providing costings were a matter of concern to him. It was put to Mr Phillips that his inability to provide costings was a matter Mr Leslight indicated to him was a reason why he was not willing to enter into any extended contract. Mr Phillips denied this and said that he was attempting to give preliminary estimates for costings for the whole project not just the excavation work: T71.30. Again, it was put to Mr Phillips that the plaintiff was only engaged to carry out the bulk excavation. He disagreed with this and said that even the bulk excavation was not completed by the time the plaintiff left the site: T72.1.
In relation to the temporary retaining wall erected by the plaintiff in October 2013, Mr Phillips agreed that Mr Leslight paid about $17,000 for that work and that it was paid in advance: T73.9. He agreed that he did not liaise with the builder on the adjacent property in relation to that retaining wall: T73.15.
Mr Phillips was then taken to the various rates charged for different personnel of the plaintiff as set out in the documents behind Tab 1 of the exhibit to his first affidavit. It was suggested to him that these rates were never the subject of discussion and agreement with Mr Leslight. Mr Phillips denied this and said "of course" they were and said he believed they were forwarded in a document to Mr Leslight: T73.30. Having been given an opportunity to locate the rates document he was not able to identify the document. He accepted that it was not recorded in his job diary. He was taken to an email dated 5 November 2012 sent at 12:23am apparently to Mr Leslight which was behind Tab 2 to the exhibit to his first affidavit. It was put to Mr Phillips that this email was never sent to Mr Leslight. Mr Phillips denied this and referred to the reply email from Mr Leslight of 5 November 2012 timed at 8.22am at the top of the page in the exhibit. It was put to Mr Phillips that he never invoiced Mr Leslight for the $150,000 deposit referred to in the first point on the second page of the 5 November 2012 email. Mr Phillips said he reduced the deposit amount. He also said that he forwarded an invoice for the deposit amount. In re-examination he said that after the 5 November 2012 email was sent to Mr Leslight, he had a discussion with him in which it was agreed to send a reduced amount for the deposit. It is noted that an invoice for a reduced deposit amount is annexed to Ms Phillips' affidavit.
It was put to Mr Phillips that the plaintiff had its own cash flow problems at this time which he denied.
It was suggested to Mr Phillips that he was engaged in other works in 2012/2013 and that in November 2012 he asked Mr Leslight for money as he was short of money. Mr Phillips denied this and said that he only asked for a deposit. He said that he regarded the plaintiff as being entitled to a 10% deposit but he reduced the sum to an amount of less than 10%. It was put to Mr Phillips that in the period 7 November 2012 to 16 November 2012 that Mr Leslight advanced the sum of $60,000. Mr Phillips agreed with this and said it was part of the deposit requested of, he thought, $90,000. He also denied that he never issued an invoice for the deposit.
Mr Phillips agreed that as at January 2013 there was considerable bulk excavation work still to be carried out at the site. He also agreed that he met with Mr Leslight on 25 January 2013 to discuss the proposed future work and how the work was to continue. See the job diary entry behind Tab 2 (page 55 of 199). It was put to Mr Phillips that his reference to "future work" was excavation work. Mr Phillips said the main issue at the time which was a priority was an issue relating to the neighbours. He agreed that excavation work was still to be carried out at the Site. Mr Phillips said that enough had been excavated not to need a retaining wall at that stage but the works were delayed by issues concerning the permission of neighbours.
Mr Phillips was taken to his email to Mr Leslight dated 1 May 2013 which concluded: "We also require the original deposit to allow us to bring back contractors as required. We really want to help you do the building work for you & have the resources to do it, but need the right information & the correct funding".
He agreed that at that stage he was still not able to state the complete cost of the excavation work and therefore could not inform Mr Leslight of what 10% of the contract sum was: T79.24.
It was put to Mr Phillips that the plaintiff was not engaged to construct the building. Mr Phillips disagreed with this and said that as he understood it, the plaintiff as a minimum was engaged to construct the shell of the building: T79.34.
It was put to Mr Phillips that the plaintiff cleared out its equipment at the site on 3 September 2013. He agreed that the printer in the shed and some tools were taken but other materials were left on the Site: T80.11.
Mr Phillips was then asked questions in relation to the labourer invoices at Tab 13 of the exhibit to his first affidavit. He identified the level of each of the relevant persons as a labourer, skilled labourer or leading hand.
Mr Phillips was asked questions about paragraph 33 of his first affidavit in which he states that he personally oversaw labourers on Site and signed off on all labour timesheets submitted to the plaintiff on a weekly basis. He agreed that he had a bundle of individual timesheets at Tab 13 of his affidavit and a spreadsheet in relation to these at Tab 14 of his affidavit. He agreed that Tabs 13 and 14 should accord with each other.
Mr Phillips was also asked some questions in relation to paragraph 38 of his first affidavit where he states that the plaintiff paid 181 individual supplier invoices for the project which he annexes at Tab 16 of the exhibit to his affidavit. He was asked questions in relation to a number of invoices which were not on their face connected to the Site other than by a job number. Mr Phillips gave evidence that when he received an invoice he wrote the relevant job number or address on the invoice. He said he exercised care to ensure the correct job number was written on the invoice. He confirmed that he sat down with his sister every couple of days to update the records and put them into the MYOB system together with the workers' timesheets. He said his sister only entered the records after he gave them to her and he wrote the job number, a name or an address on it.
In relation to the labourers, he received their invoices. He agreed that his sister might enter the records into the computer system but he would check them. Mr Phillips accepted that the labourers either called, emailed or texted with their time and his sister entered the details in MYOB. However, Mr Phillips stated that he checked the details with the foreman and also checked them when he sat with his sister. When it was put to Mr Phillips that he only reviewed the records after they were entered by his sister, he said that he "triple checked" them. He said he checked the records on the day they were received, checked them with the foreman and then checked the records with his sister. He said he changed the records if he found they were incorrect.
In relation to invoices, Mr Phillips gave evidence that an invoice was never sent out by the plaintiff unless he checked it thoroughly. He said he always checked the records weekly or biweekly. Mr Phillips accepted that there were several invoices which contained no indication on them connecting them to the Bondi Site. However, he gave evidence that he thoroughly checked their application to the Site before he included them. When asked whether it was possible that he charged an invoice to the wrong job number he said that this was not the case and there was "no way" this could have been done.
Mr Phillips was asked questions about paragraphs 46 to 48 of his first affidavit in which he states that he was never given an opportunity to inspect the Site prior to the works being "covered up" and that the works were now incapable of being inspected "satisfactorily". He agreed that as at 9 December 2013 he was aware that another builder had taken over the Site: T88.48.
Mr Phillips was asked about entries for time spent on the job in December 2013. He said this was connected to checking all invoices, chasing up the defendant for payment and thoroughly reviewing the details for the whole job. This involved a review of all matters from the start to the end of the job and included a review of every hour spent, every docket and every timesheet. Whilst Mr Phillips agreed that there should not have been anything wrong, he said he checked the items personally: T90.1-23.
Mr Phillips was taken to his reply affidavit where he referred to days lost due to inclement weather. He said the days lost for weather and other delays were recorded on another spreadsheet that was not the same as the document behind Tab 8 in the exhibit to his reply affidavit. He said the delays included rain and design issues. He said the delays were recorded as the matter went along. Mr Phillips confirmed that the time lost from rain of 198 days in his second affidavit was "fairly accurate" but he needed to check it against the detailed spreadsheet records. In due course, there was tendered a spreadsheet in relation to delays which became Exhibit A which on its face confirmed Mr Phillips' evidence as to the number of days allegedly lost for inclement weather.
Mr Phillips was then asked a number of questions in relation to tax invoices including those which were referred to in paragraph 7 of his sister's affidavit and exhibited at Tab 1 of that affidavit. Mr Phillips said that invoices were not sent out without him seeing them. Mr Phillips accepted the accuracy of the schedule referred to in paragraph 7 of his sister's affidavit.
Mr Phillips was then asked questions about the different invoices which are behind Tab 1 of that affidavit. It was suggested to Mr Phillips that a number of the invoices dated in 2012/2013 were not issued to the defendant until March 2016. Mr Phillips denied that (T95.42) and said that the invoices were normally sent out within a few days of their preparation. For example, Mr Phillips was taken to invoice number 1359 and it was pointed out to him that the job number was not the job for this site. Mr Phillips said the invoice was sent to the defendant and he paid the plaintiff $60,000 in response to the invoice. Mr Phillips denied that $60,000 was advanced because he had told Mr Leslight that he was running short of cash. Mr Phillips said that at no stage was he running short of cash: T96.38. Mr Phillips stated that some invoices were given to Mr Leslight early so that he could use them in approaching the bank for funds.
In relation to tax invoice number 1373 dated 14 February 2013 in the sum of over $102,000, it was put to Mr Phillips that this was paid by the sum of $60,000 in various payments between 7 November 2012 and 16 November 2012 together with a $42,380.83 payment made on 10 April 2013. Mr Phillips denied this and said that the payments made in November 2012 were made for the deposit for the work. It was also put to Mr Phillips that the invoice was a fiction as the $60,000 was advanced to help him and the sum of over $42,000 was paid as part of the invoice: T97.47. Mr Phillips denied this and said the $60,000 was paid for the deposit and Mr Leslight purported to use that as part of the payment for the 14 February 2013 invoices: T98.1. Mr Phillips also said in response to the suggestion that invoice number 1373 was not sent to Mr Leslight, that he was a businessman and why would he pay any part of the amount without an invoice: T98.11. Mr Phillips stated that all of the invoices were emailed to Mr Leslight despite the Bondi address appearing on the invoices.
Mr Phillips was then taken to invoice 1388 behind Tab 1 in his sister's affidavit in the amount of $5,594.27 and asked to compare it with a document which became part of Exhibit 1 which was an invoice also numbered 1388 of the same date for $5,123.69. Mr Phillips was asked why the two invoices of the same number were different. He suggested that perhaps a mistake had been found and it had been corrected. Also part of Exhibit 1 was a bank statement which showed that the higher invoice for $5,594.27 had been paid by Mr Leslight. This suggests that Mr Leslight had indeed received the invoice for $5,594.27 behind Tab 1 of Ms Phillips' affidavit rather than the lower invoice which was part of Exhibit 1. Mr Phillips accepted that the documents in Exhibit 1 appeared to suggest that there had been a doubling up in payment of the amount of $1,097.80 for excavation work performed by Ron Flew Excavations. Mr Phillips stated that all errors such as this were corrected "later on". He stated that when the plaintiff left the Site he continued working on the Site documents which was reflected in the time recorded in the job diary. He stated that he went through all of the invoices and other documents for the Site and corrected any errors and discrepancies and asked for the money outstanding. He said doubling up payments were corrected at that stage.
When it was put to Mr Phillips that tax invoices 1392, 1400, 1407, 1411, 1417, 1420 and 1420.1 were not issued by the plaintiff until March 2016 he denied it: T102.27. He said the invoices were issued on or about the dates they bear and that he paid GST on the invoices for his BAS return at the time in 2013 as he operated on an accruals basis: T103.14-.30. This evidence appeared to me to be persuasive and Mr Phillips was not further relevantly cross-examined on this issue. I accept his evidence on this point.
Mr Phillips was then cross-examined about invoices 1419, 1420 and 1420.1. It was put to him that these invoices bore the same invoice number but were for differing amounts. After he gave some initially confusing evidence in response to the invoices, Mr Phillips was given an opportunity to review the invoices. He stated that in relation to a payment made by the defendant on 2 October 2013 of $17,089.71 for invoice 1420, this invoice was sent in advance to the defendant because the plaintiff had obtained a discount rate from a supplier but it was only available for a short period of time. When the payment was ultimately made, the cheaper supplier was not available. Accordingly, by invoice 1420CR, the defendant was given a credit for this amount which reversed invoice 1420. The defendant was then invoiced by the plaintiff for the amount that it cost the plaintiff to provide the supply which was in the sum of $17,814.65 as shown in invoice number 1420.1 dated 1 October 2013. The invoice as sent to the defendant was the actual amount that it cost the plaintiff for the supplies. This was forwarded to the defendant on 1 October 2013: see page 181 of 199 behind Tab 9 of the exhibit to Mr Phillips's second affidavit.
This explanation as given by Mr Phillips of otherwise apparently confusing invoices was logical and cogent and I accept it.
Mr Phillips was then taken by counsel for the defendant to the last two invoices behind Tab 1 to the exhibit to his sister's affidavit which were invoices 20140311 and 20140312 both dated 19 March 2014. He agreed that these two invoices had not been issued to the defendant prior to them being forwarded by the plaintiff's solicitors under a letter of demand.
Mr Phillips was asked some questions in relation to certain photos which were attached to the expert report of Paul Easingwood behind Tab 17 in the exhibit to his reply affidavit. In relation to four pages of photographs, Mr Phillips confirmed that a number of the photographs were taken after the plaintiff left the Site and included some works not carried out by the plaintiff at the Site. Mr Phillips was candid and direct in conceding that a few of the photographs included works not completed by the plaintiff at the Site.
Mr Phillips was then asked a number of questions in re-examination. Questions were asked about the proposition put to Mr Phillips in cross-examination that there was no document which he had sent to the defendant Mr Leslight in which he set out the rate for hours that he would charge for work on the site. Mr Phillips was then taken to a number of invoices behind Tab 1 in Ms Phillips' affidavit which set out the hourly rates for the various employees of the plaintiff. These include invoices from invoice 1368 sent on 21 December 2012 to invoices dated through to 1 October 2013. Mr Phillips confirmed that the invoices in this period set out the hourly rates for the different type of workers, the number of hours worked and the total claimed for the work. See for example the second page of invoice number 1368. In relation to these invoices, Mr Phillips confirmed that they were sent to Mr Leslight and no objection was raised by Mr Leslight at any time in relation to the hourly rates put on the invoices or the hours claimed. These documents established in my view that Mr Leslight was aware at all relevant times of the rates being charged by the plaintiff for the various workers and tradesmen from at the latest December 2012 and agreed to them by payment of them.
In relation to the failure to make reference to the entering into the agreement with the defendant on 20 March 2012 in the job diary, Mr Phillips gave evidence that not every email or phone call was recorded in the job diary.
Mr Phillips was then asked questions in relation to the spreadsheet behind Tab 8 in his reply affidavit. He said this was the summary of various delays as recorded in detail in another spreadsheet. He said the information in the document behind Tab 8 was based on another more detailed spreadsheet for each relevant day on the project. He said that the information for that spreadsheet was entered every day or every second day and was divided into delays for inclement weather, design and other issues. This further document that was referred to by Mr Phillips was tendered, over objection, by the plaintiff and became Exhibit A in the proceedings.
Mr Phillips gave evidence that the spreadsheet of delays which became Exhibit A represented delays to the project including delays caused by rain. Mr Phillips said that the column headed "BOM Rain Days" indicated days where rain had been confirmed by the Bureau of Meteorology. The document made reference to each day at the Site, available working days which omitted weekends and public holidays, days of rain confirmed by the Bureau of Meteorology, total delayed days being days lost on the job due to rain which may have included days where there was no work because of the conditions on the site due to rain and delays due to design where the plaintiff was waiting on information such as appropriate drawings.
In relation to these, for example concerning 13 August 2013, Mr Phillips said that the plaintiff received engineer's drawings in relation to the retaining wall on the boundary and could then proceed. There were other delays due to complaints by the neighbours, an example was in September 2012 when work could not continue until the permission of a neighbour for the work was obtained. The reference to cash flow delays referred to delays when the plaintiff should have received payment from the defendant for invoices. The column "Days on Site" consisted of days actually worked on the Site whereas "Days On The Job" referred to time spent completing work in relation to the project which included some time in the office. The column "Days Not Workable" takes out days such as weekends and public holidays where work could not be completed. The "Comment" column was used by Mr Phillips to insert items to record issues such as the Christmas shutdown. He again confirmed that the entries in this document were included at the same time as he completed the job diary, as they were on a different page in the same Excel spreadsheet in the computer programme used by the plaintiff.
Mr Phillips was then asked some questions in relation to his 5 November 2012 email which was located behind Tab 2 of the exhibit to his first affidavit. This email included the following: "Before we do any more work, I need to make the payment terms clear for your benefit as well as our contractors. 1. $150,000 deposit before any work starts. This deposit will not be deducted from any invoice before the last invoice. 2. Payment to be made within 7 days of receiving an invoice. Some suppliers/contractors will need payment prior to delivery. 3. Late payment costs will include but not limited to a 20% PA interest rate to cover the contractors overdraft/credit facilities. I am sorry if this makes things difficult, but if we don't start off well, the whole job could get out of hand. I'm hoping we can be ready to start as soon as we get the final engineering drawings."
Mr Phillips confirmed that these payment terms were reflected in the 6 November 2012 invoice number 1359 behind Tab 1 in Ms Phillips' affidavit which was sent to the defendant on the day following the 5 November 2012 email. Following the sending of the 5 November 2012 email, Mr Phillips gave evidence that he had a telephone conversation with the defendant and in this conversation the deposit was reduced to that in the tax invoice of $85,000 plus GST. Mr Phillips confirmed that the invoice reflected the content of his discussion with the defendant. This evidence from Mr Phillips was persuasive and I accept it.
After the first adjournment of the hearing of the proceedings after four days, Mr Darvall, counsel for the defendant, sought to take advantage of the leave given to the defendant to further cross-examine Mr Phillips on the document which became Exhibit A in the proceedings: T116-117. For this purpose, the witness was provided with a blown up A3 version of Exhibit A.
Mr Phillips confirmed that the plaintiff kept an electronic diary in relation to a particular job and that Exhibit A was an Excel format spreadsheet which was kept on the same file as the electronic diary. Mr Phillips stated that the spreadsheet, which recorded matters of interest on a job including delays, was updated daily or every second day: cf T115.41; T50.12. Mr Phillips confirmed that as at 2012 when he was working on the Site that the plaintiff was also engaged in other projects. However, he said that a separate diary was kept for each job with a separate spreadsheet. In re-examination, Mr Phillips confirmed that Exhibit A only related to the job at the Bondi Site.
Mr Phillips was then cross-examined by counsel for the defendant to suggest that Exhibit A had shortcomings and was on occasions inaccurate. Mr Phillips stated that the spreadsheet was prepared as the project went along to record each type of delay which was relevant.
It was put to Mr Phillips that the project commenced on 11 October 2012. Mr Phillips said he could not recall that but stated that the plaintiff had representatives on site before the existing buildings were demolished. He denied that 11 October 2012 was the first time the plaintiff was on site at the Bondi Site. When it was put to Mr Phillips that 11 October 2013 was the last day the plaintiff was on-site, he said that it "sounds about right", but said it was not the last day which the plaintiff was working on the job. He confirmed that Exhibit A recorded delays to the site works from June 2012 to December 2013 with the last reference in Exhibit A being to February 2014. Mr Phillips made a distinction between delays which occurred on the site to delays which occurred in relation to the job.
In relation to the column in Exhibit A headed "BOM Rain Days," Mr Phillips confirmed that he obtained this information from the Bureau of Meteorology for the closest weather station, which was the station at Dover Heights. Whilst he confirmed that the rain record was not recorded in Exhibit A, he said the information was kept on the file "somewhere". When asked what the amount of rain was before a rain day was referred to in Exhibit A, Mr Phillips said that a decision had to be made as to whether a rain day was claimed. He said he would not put a rain day in the records unless it held up the job in some way. He said the record was not used as a basis for a delay claim. Mr Phillips said the Bureau of Meteorology rain records were used as a backup for a rain day. Mr Phillips also confirmed that whilst the plaintiff completed works on a number of sites at the same time it did not take on work unless it could do it.
Mr Phillips was then taken to the column in Exhibit A headed "Total Delayed/Slow Days Due to Rain". He said this did not mean that there were no works completed in relation to the job on the day. It really depended on the amount of rain and what was required to be done, such as dewatering the site. It might be that staff of the plaintiff were there all day but only four hours of work was completed. Mr Phillips said for example that on some days only some work was done as opposed to the whole day being lost due to rain. He said that the amount of time lost because of rain could not be determined by the relevant column in Exhibit A and could only be determined from timesheets to determine whether any work was charged for the day. In relation to the column "Design Delays", Mr Phillips denied that this meant that no work could be done. He said that the plaintiff would progress with what work they could do.
Mr Phillips gave evidence that to the best of his recollection Active Demolitions demolished the buildings on the site in June/July 2012. He could not recall the exact dates. He said that he did not supervise the demolition by Active Demolitions but rather Mr Leslight did (T244.27) although he attended the Site before the demolitions when requested (T244.28). Mr Phillips gave evidence the whole job was held up by design delays but it still meant that the plaintiff could proceed with other tasks such as getting quotes, getting trades lined up and dealing with contractors. He said there were difficulties at the time doing this because of a lack of accurate drawings for the purposes of a quote.
He agreed that Spartan were the excavation company which commenced in August 2012. The works were delayed because of the excavations and the fact that no geotechnical drawings were available for the sub-surface. Mr Phillips said he could not recall when a geotechnical report was available. Mr Phillips denied the design delays ceased when he received engineers' drawings for the purposes of building retaining walls. This was despite Exhibit A having in the last column on 13 August 2013 "received engineer's drawings for retaining boundary walls." Mr Phillips said that the architect who Mr Leslight had did not wish to keep working on the site and Mr Leslight did not wish to pay to retain another architect. However, some engineering drawings were obtained. Mr Phillips also gave evidence that there were delays due to a neighbour which caused the excavations to stop by Spartan. Also, Active Demolitions had not been paid all of their fees by Mr Leslight, according to Mr Phillips, and the neighbour had also not been paid for a period a payment which Mr Leslight was supposed to pay which had caused delays. See also T129.39-T130.5.
Mr Phillips was then asked questions about the column headed "Cashflow Delays (Late Payments)". Mr Phillips confirmed that the cashflow delays commenced on 6 November 2012 and continued until 10 April 2013, according to Exhibit A. This related to what was perceived by him as a delay in payment of the deposit for the plaintiff's work on the job. It should be noted that the defendant alleges that Invoice Number 1359 was not received by Mr Leslight until March 2016 whereas the evidence of the plaintiff through Mr Phillips was that the invoices were sent out on or about the dates which they bear.
In the period of the alleged cashflow delays, Mr Phillips denied that no work was completed but said some work was done but it was slow going and the plaintiff only completed work on the cashflow which it had. Mr Phillips agreed that Exhibit A showed days where a number of delays were claimed but he said that the plaintiff was still able to do some work on the job or related to the project. An example was the preparation of documentation or quotes. Mr Phillips said that whilst there were delays this did not necessarily always stop work on the job. He agreed that the extent of the delay to the work could not be determined from Exhibit A but was established through timesheets and what work was done and what the defendant was charged for.
In relation to the last column of Exhibit A, Mr Phillips confirmed that the delays referred to there were delays caused by the weekends and public holidays.
In relation to the column headed "Total Delayed/Slow Days Due to Rain" Mr Phillips confirmed that if there was a delay due to rain a mark was placed in that column. He stated that this may also include a day lost where rain was forecast where work was slowed or stopped in order to save Mr Leslight some money. He said it really depended on the particular circumstances on the site and what water was on the site and whether there was any rain run-off.
Mr Phillips was asked whether 0.4mm of rain would stop a site. He said it would not normally, but it may if there is a combination of past rain and potential forecast rain. For example, he said that if past rain had soaked a site, workers from the plaintiff did not come to clean up the site if further rain was forecast. Mr Phillips described it as not being "an exact science" and the aim was to save the defendant money.
Mr Phillips was then asked some questions in relation to delays allegedly due to rain for particular dates.
Mr Phillips was asked questions about a delay on 25 February 2013 allegedly due to rain. Mr Phillips confirmed that there was no rain but it was probably too wet to work. I note that on 23 February 2013 there was recorded as being 11.8mm of rain and on 24 February 2013 there was recorded as being 53.8mm of rain. In my view, the day claimed for a delay due to rain is understandable and apparently warranted in the circumstances.
Mr Phillips was then asked about 8 October 2013 where a rain delay was claimed in circumstances where there had been no rain either on 8 October 2013 recorded or for the previous three days. Mr Phillips said that he could not recall the basis for the claim for rain delay. However, the claim does not appear to be justified having regard to the Bureau of Meteorology reports which became Exhibit 4 in the proceedings.
Mr Phillips was asked about the claim for a rain day delay for 19 September 2013. It is noted that there was rain in mid-September 2013 with a fall of 62.6mm on 17 September 2013 which was a heavy fall.
Mr Phillips was asked about the rain delay for 12 August 2013 recorded on Exhibit A where there was no rain that day or the previous two days. He said he did not recall the basis for the claim and was unsure whether water had to be pumped from the site. It is noted that there was rain on 8 and 9 August 2013.
Mr Phillips was asked about the claim in Exhibit A for a rain delay on 2 July 2013 where there was no rain reported by the Bureau of Meteorology. However, it is noted that there was rainfall on 1 July and a heavy rainfall on 30 June of 75.8mm which probably deluged the site.
Mr Phillips was asked about a recorded fall on 13 September 2013 in circumstances where only 1mm of rain had fallen according to the Bureau of Meteorology. Mr Phillips said he could not recall the reason for the claim but said it depended on the effect of the rain on the day.
A delay was claimed for 9 September 2013 in circumstances where only small falls were recorded on 8 and 9 September 2013. Mr Phillips denied that a possible explanation for the claims was that he simply looked at the rainfall graph as produced by the Bureau of Meteorology for the Dover Heights Station. He said the graph was only looked at to back up the claim which was recorded. Mr Phillips said this document was not prepared for the client but was used as a record for the plaintiff to explain how days were lost.
Mr Phillips agreed that one could not tell from Exhibit A if there was a delay in work or a lost day of work. He agreed, however, that Exhibit A recorded various reasons for delays which were out of the control of the plaintiff. He denied that the purpose of preparing Exhibit A was to exaggerate delay to the project: T261.26. He said the document was not normally given to the client and delay could be caused by a combination of reasons. He denied that a delay for a day could be as little as half an hour or an hour and said it was aimed to record substantial delays: T261.39.
Mr Phillips confirmed that there are a number of days in Exhibit A in which delays for rain were claimed where rain had fallen in amounts of between 0.1mm and 5mm. He said that the amount of rainfall did not necessarily always indicate the reason for a delay on a particular date but rather the amount of water on site and that the topography of the site funnelled the water to the front of the site: T262.9.
Overall, while it appeared to me from the cross-examination of Mr Phillips on this topic that there were question marks over the accuracy of a few of the entries for rain delays, most of the delays cross-examined on appeared to be explicable and warranted by heavy rain falls in the period preceding the rain day claimed.
In re-examination in relation to the further cross-examination, Mr Phillips said that he spoke to the labourers or foreman on the site to determine if there were delays due to rain or other causes. He also checked the timesheets either daily or every second day. The timesheets recorded work undertaken by trades on the site.

Evidence of Ms P Phillips

The plaintiff read the affidavit of Patricia Marie Phillips sworn 29 May 2017 in the proceedings. Ms Phillips is the sister of Mr Phillips and the office manager of the plaintiff.
In paragraph 5 of her affidavit, Ms Phillips gives evidence that as part of her role in the accounts department and as office manager of the plaintiff, she caused the plaintiff to issue a number of invoices to Mr Leslight, the defendant, during the period 20 March 2012 to 20 March 2014 which she sets out in a table in the paragraph and which total $548,198.44. The last two invoices were the invoices dated 19 March 2014 which Mr Phillips agreed were sent with his letter of demand to the defendant from his solicitors. Ms Phillips annexes copies of the invoices at Tab 1 of the exhibit to her affidavit.
In paragraph 7 of her affidavit, Ms Phillips states that as part of her role at the plaintiff she received payments from Mr Leslight during the period 20 March 2012 to 20 March 2014 which totalled $219,064.15. A table of these payments is set out in paragraph 7 of the affidavit. Included in the receipts were payments to Ron Flew Excavations, both directly by the defendant and from the plaintiff: paragraphs 8-10.
Ms Phillips states in paragraph 11 of her affidavit, that as part of her role as office manager of the plaintiff, she would enter data into the plaintiff's MYOB accounting system in relation to hours worked by labourers engaged by the plaintiff. She states: "These labourers would call, text or email through the amount of time they had spent on site working and I entered that amount of time into MYOB." It will be recalled, as set out above, that Mr Phillips gave evidence that he thoroughly checked the amount of time entered for labourers including with the foreman at the site to ensure that it was accurate.
Ms Phillips was subject to very limited cross-examination. She agreed that she had sat in court when Mr Phillips gave his oral evidence. In relation to paragraph 8 of her affidavit that she was able to ascertain the payments made to Ron Flew Excavations both directly by Mr Leslight and from the plaintiff once a statement was provided by Ron Flew Excavations and the payments were then reconciled, Ms Phillips confirmed this. When asked where the statement was in her affidavit, she could not locate it. However, she confirmed that the email behind Tab 3 in her affidavit was the email from Mr Flew which had attached to it the statement which she used for that purpose.
Overall, Ms Phillips appeared to me to be an honest, careful and thorough witness.

Evidence of Mr Brett Barry Leslight

The defendant, Mr Brett Leslight, read five affidavits of his in the proceedings: 1. Affidavit sworn 27 May 2016; 2. Affidavit sworn 8 July 2016 of 60 paragraphs; 3. Affidavit sworn 8 July 2016 of 13 paragraphs; 4. Affidavit sworn 18 August 2016 of three paragraphs; and 5. Affidavit sworn 24 October 2017 of 45 paragraphs.
The first affidavit referred to above, that sworn by Mr Leslight on 27 May 2016, deals with matters raised in the Cross-Claim filed by Mr Leslight.
This affidavit was prepared for the purposes of the proceedings in the New South Wales Civil and Administrative Tribunal which have been transferred for hearing to this Court.
Mr Leslight states that his records in relation to the Bondi development were substantially sent, received and retained electronically on his family company email account. He states that the company service provider upgraded their system and in doing so, wiped all documentation including emails for the period from approximately mid-2012 to early 2014. Attempts to recover data by experts from the company's internal hard drives have been unsuccessful. Mr Leslight annexes correspondence relating to that issue.
Mr Leslight gives the history of his initial dealings with Mr Phillips including work done in about July 2009 for his family company by the plaintiff; discussions with Mr Phillips between about 2009 and 2010 about the possibility of him entering into a joint venture for the development of the Site; Mr Leslight's proposal to retain one of the two duplex residences as his home with the other being sold off; and the preliminary estimate of costs provided to him by the plaintiff dated 30 November 2011.
Mr Leslight notes that he engaged a third party to demolish the improvements on the Site in about June 2012 which he states was completed at about the end of July 2012. Mr Leslight says that the plaintiff was not involved with the demolition works.
Mr Leslight states that site excavation commenced on about 9 August 2012, with third parties engaged by him to commence the excavation work and to remove the spoil from the site under the direction of the plaintiff. Mr Leslight says that the services relating to excavation and spoil removal continued until 3 September 2012 when work was halted at the Site as it was noted the boundary areas needed to be looked at by engineers to come up with a solution to retain the substrate. Test pits were excavated by a third party and engineers were involved to discuss options.
Mr Leslight says that in about mid-February 2013 due to this Site instability it became necessary for him to negotiate with the owners of the unit building adjacent to the northern boundary of the property to excavate onto land within their property. Mr Leslight states that an agreement for the payment of $5,000 by him was reached with his neighbour which permitted excavation to a distance of about 2.5m within their boundary. Mr Leslight notes that on 26 April 2013 three exploration holes were dug adjacent to the neighbouring units, followed shortly thereafter by the construction of the pools. He states that excavation continued on the site until late 2013 by contractors under the direction and supervision of the plaintiff. Mr Leslight sets out in detail various invoices presented to him and payments made by him to the contractors. These invoices cover the period August 2012 to September 2013 and include payments made to the plaintiff. Mr Leslight notes that during the period the plaintiff was on site a number of concrete piers were constructed along with various footings and retaining walls.
Mr Leslight refers to a meeting on 1 October 2013 between representatives of NAB (his financier), Mr Phillips, an employee of the plaintiff, his father and himself to discuss the delay in the project and the projected cost to complete. He states that Mr Phillips was requested to rectify the collapsing southern boundary and he was told that Mr Phillips would not do it without an advance payment which Mr Leslight says was paid on 2 October 2013. Mr Leslight states that the shoring works were then undertaken by the plaintiff.
Mr Leslight states that by 11 October 2013 the plaintiff had "completely moved off the site" (paragraph 18) and as at that date, the Site was still under excavation. Mr Leslight states that a Mr Anderson of Ovation Constructions Pty Ltd was retained by him at about this time to inspect the site and to prepare a report to update NAB on the state of the project. He also states that the services of the plaintiff were not further required and a company called Micrah Projects was retained and commenced work on the site on about 4 November 2013. Mr Leslight claims that Mr Phillips had indicated to him that he expected that within 18 months the construction of the residence would be completed and he would occupy one of the duplexes and the other would be sold. Mr Leslight said that he expected the completion of the construction would occur in August or September 2016.
Mr Leslight refers to a mortgage on the Property drawn as at 9 August 2012 in the sum of $2,855,000. He asserts that by reason of the delay, he incurred considerable additional interest extending beyond the 18 month "expected full construction period" constituting or amounting to in the period 31 August 2012 to 31 October 2013, the sum of $201,274.35 (paragraph 22).
In paragraph 23 of his 27 May 2016 affidavit, Mr Leslight asserts that by reason of the delay the rental for the property proposed to be leased was lost. He annexes market rental appraisals. However, in paragraph 6 of his 27 May 2016 affidavit, Mr Leslight says that it was proposed to sell the other property not rent it. Mr Leslight also notes that by reason of the delay his occupation of the residence he proposed to occupy was delayed and he incurred rent at a property in North Bondi at a rent of $4,780 per month, which he claims.
Mr Leslight annexes to his affidavit a series of photographs taken at the site from 21 June 2012 through to 9 September 2013.
Mr Leslight also relied on two affidavits sworn 8 July 2016, the first of 60 paragraphs and the second of 13 paragraphs.
In relation to the affidavit sworn 8 July 2016 of 13 paragraphs, only paragraph 13 was read in the proceedings. This attaches bank statements recording certain payments made by the defendant including to the plaintiff.
In Mr Leslight's affidavit sworn 8 July 2016 of 60 paragraphs, he replies to the statements filed in the New South Wales Civil and Administrative Tribunal by Mr Phillips and his sister Ms Phillips. These statements were not tendered by the plaintiff or the defendant. I have already indicated some of Mr Leslight's responses to Mr Phillips' evidence in my outline of the evidence given by Mr Phillips.
Mr Leslight states that he first met Mr Phillips in July 2009 when work was done for the family company. Mr Leslight says his recollection is that the works were relatively minor, were the subject of a quotation and the final price was generally in accordance with the quote.
Mr Leslight denies that there was any conversation with Mr Phillips about an agreed percentage to be paid to the plaintiff. He agrees that he noted in the first invoice received from the plaintiff that it included a 15% charge but states that "as the works were at a delicate stage and beginning to progress, I paid the account to avoid delay." The evidence shows that other invoices from the plaintiff with the 15% charge were also paid by Mr Leslight.
Mr Leslight says he was not familiar with the construction industry and there was never any discussion about what "cost plus" meant. However, it is noted that invoices with the 15% addition were paid as Mr Leslight concedes in paragraph 5 of the affidavit.
Mr Leslight gives some background to his discussions with Mr Phillips concerning a potential joint venture.
In paragraph 10 of his affidavit Mr Leslight accepts that he agreed with Mr Phillips on or about 20 March 2012 that the plaintiff would act as project manager; however the arrangement was not committed to writing and the extent of the services were, he asserts, required initially to be limited to completing the excavation, as the structure of the sub-soil was unclear.
Mr Leslight gives evidence of documents provided to Mr Phillips and Mr Phillips' preparation of multiple budgets throughout the project (paragraphs 15-16).
In relation to Mr Phillips' attendance at site, Mr Leslight states that to his observation Mr Phillips was not on site every day and that all invoices issued by the plaintiff in the course of their engagement were paid by him. Details are provided as to the payment.
Mr Leslight relies on Mr Phillips' estimate of $1.8 million for the two dwellings ($900,000 each) dated 4 December 2011 which he said he believed was reasonably accurate.
In paragraph 24 of his affidavit, Mr Leslight states that invoices issued by the plaintiff in relation to work undertaken since commencement of work on site were "all paid up to that date" being 11 October 2013. Mr Leslight denies that he did not take or reply to calls from Mr Phillips in October-December 2013 including in relation to non-payment of the plaintiff or contractors. In paragraph 33 Mr Leslight accepts that problems were encountered related to the composition of the sub-soil at the site.
In paragraphs 39-40 of the affidavit, Mr Leslight seeks to explain the delay in complaining about work undertaken by the plaintiff at the site, including that an expert report was received after the plaintiff had left the site and that the plaintiff had the opportunity to inspect the site until October 2013 when it removed its equipment from the site.
In his 18 August 2016 affidavit of three paragraphs, Mr Leslight identifies further payments made to the plaintiff and to subcontractors by him. He also refers to an expert report of Mr Madden dated 16 August 2016 which he annexes to his affidavit.
In his affidavit sworn 24 October 2017 of 45 paragraphs, Mr Leslight responds to the affidavit of Mr Phillips sworn 29 May 2017 and that of Ms Phillips sworn 29 May 2017. This affidavit is very similar in content to his longer 8 July 2016 affidavit.
In relation to the background to the project, Mr Leslight states that he initially discussed with Mr Phillips the prospects of his participation in a joint venture for the development of the Bondi project but asserts that Mr Phillips advised that he could not arrange the funding to participate in the joint venture. Mr Phillips denies that in his affidavit.
In relation to the agreement concerning the services to be provided by the plaintiff, Mr Leslight in paragraph 3 of his 24 October 2017 affidavit claims that on 20 March 2012 the arrangement between himself and Geneville was not committed to writing and the extent of the services required from the plaintiff were initially limited to completing the site excavation as the structure of the sub-soil was unclear.
In relation to the disputed issue about the estimate for the costs for the project, Mr Leslight relies on the email dated 4 December 2011 from Mr Phillips that the cost estimate was between $3,500 and $4,500 per square metre and annexes the relevant email exchange. Mr Phillips had given evidence that the estimate prepared of about $912,000 per dwelling was a low estimate prepared for the purposes of the Council and that a significantly higher estimate was appropriate for a good quality construction.
In relation to Mr Phillips' job diary which he claims he kept from 30 March 2010, Mr Leslight states that Mr Phillips did not inform him that he was keeping that job diary and also states that he is not able to confirm the accuracy of it.
Concerning the issue of hourly rates, Mr Leslight states that Mr Phillips did not mention to him that he was proposing to charge hourly rates or what hourly rates he was proposing. However, when invoices were sent to Mr Leslight for work with hourly rates indicated, there is no evidence that Mr Leslight disputed the rates at the time.
In relation to the question of a bank approved budget, Mr Leslight claims that he had informed Mr Phillips that the bank had approved a construction budget of $900,000 per unit and that he was constrained to work within the budget. Mr Leslight claims that he relied on Mr Phillips to work within that budget. He also denies the conversation alleged by Mr Phillips concerning s 96 contributions and fees payable on it. Mr Phillips denies that he was informed of a limited budget for each unit as approved by Mr Leslight's bank of $900,000.
Mr Leslight in paragraph 8 of his affidavit again emphasises that no written agreement was entered into with the plaintiff and he had discussed with Mr Phillips that his services would be limited in time up to the completion of excavation, as he had indicated to Mr Leslight his concerns with the unknown sub-soil conditions. Mr Leslight also denies there was any mention of a deposit or interest on late payments. Mr Phillips had denied any limitation in his retainer as alleged by Mr Leslight. In paragraph 10, Mr Leslight denies that there was any discussion with Mr Phillips about an agreed percentage of a 15% charge for the plaintiff in relation to services provided by subcontractors. This should be compared to Mr Leslight's Defence.
In relation to paragraph 12 of his affidavit, Mr Leslight states that he cannot confirm whether Mr Phillips was present on site each day but he visited the site each day and he was often not there when he visited. Mr Leslight notes that often when he was there, Mr Phillips appeared to remain on site for about an hour or so.
In relation to the labourer timesheets, Mr Leslight states that he is unable to verify the accuracy of the timesheets. He notes that he was absent overseas or outside Sydney for periods: paragraph 13. Mr Leslight also states that he is not able to acknowledge that the invoices and job diary accurately show the services provided by the plaintiff or subcontractors.
In paragraph 20 of his affidavit Mr Leslight says that as at 10 September 2013 the last invoice he had received from the plaintiff was number 1388 which had been paid on 10 May 2013. There was then a further request for the payment relating to work completed by Ron Flew Excavations and Multilink Earthworks. Mr Leslight states that he arranged for payments in the sums of $20,000 on 1 August 2013 and $18,000 on 12 September 2013. Mr Phillips states that these payments were made towards the deposit which the plaintiff had required.
In relation to delays in making complaints about defects in the work completed by the plaintiff, Mr Leslight says that it was only when he retained a building expert who inspected the site that the major concerns with the work were brought to his attention. He also notes in paragraph 23 of his affidavit that the report by the expert was received after the plaintiff had left the site and at the time he was preoccupied with getting the dwellings constructed. He states that the plaintiff had the opportunity to inspect the site up until October 2013 when it removed its equipment from the site. He states that no request was ever received from the plaintiff for access to the site prior to it bringing its claim, even though it was aware that the building works were proceeding at the site: paragraph 25.
In paragraph 27 Mr Leslight refers to work completed by the plaintiff for steel frame and temporary fencing for which invoice number 1837 in the sum of $17,089.71 was received for which payment was made by Mr Leslight on 2 October 2013.
In relation to the plaintiff's departure from the site, Mr Leslight states in paragraph 28 that he visited the site on Saturday, 12 October 2013 and the vast majority of the plaintiff's equipment had been removed from the site. He states the plaintiff did not return to the site. He notes in paragraph 32 that the shed on site was "off hired" on 2 December 2013 with the toilet on the site being "off hired" on 17 July 2013. Mr Leslight notes that he does not recall any invoices being outstanding to the plaintiff as at 22 November 2013 as he had finalised the accounts to Ron Flew Excavations: paragraph 33.
In relation to Mr Phillips' assertions that he did not return telephone calls or messages, Mr Leslight denies that. He states that that he believes that the plaintiff left the site in October 2013 with the new builder, Micrah Projects, commencing soon after 1 November 2013 at the site.
In relation to the evidence of Ms Phillips, Mr Leslight states that he does not believe that he has ever met or spoken to Ms Phillips: paragraph 37. He also disputes receiving numerous invoices which Ms Phillips claims that she sent to Mr Leslight: see paragraphs 38-41. This evidence has to be considered in the light of Mr Leslight's other evidence that he has lost his email correspondence for the relevant period. Accordingly, his assertions have to be considered having regard to the unavailability of his email correspondence.
In his oral evidence in chief, Mr Leslight was asked questions in relation to paragraph 18 of his affidavit sworn 27 May 2016 concerning the meeting on site on 1 October 2013. Mr Leslight stated that he recalled the meeting and that representatives of the NAB which was his financier were present: T174.15. Mr Leslight gave evidence that he said to Mr Phillips that the bank wanted to go away and look at the proposal and that he would get back to Mr Phillips when that was done: T174.22. Following that meeting and the construction of a temporary retaining wall at the site Mr Leslight gave evidence that he did not require any further services from the plaintiff: T174.38.
In relation to his 8 July 2016 affidavit of 60 paragraphs, Mr Leslight states in relation to paragraph 12 that prior to the commencement of excavation works which involved the plaintiff he provided the plaintiff with a substantial amount of documentation which included architectural plans, structural plans, stormwater diagrams and engineering documents.
Mr Leslight said that he subsequently appointed Micrah Projects to undertake the completion of the construction works at the site and he provided them with the same documents as he had provided to the plaintiff and no other documents: T175.16.
In relation to paragraph 44 of that affidavit, Mr Leslight confirmed that he made an $18,000 payment to the plaintiff on 12 September 2013 following a telephone conversation with Mr Phillips in which the transfer was requested as Mr Phillips said that he had "cash flow problems": T175.37.
Mr Leslight said that he had a conversation with Mr Phillips in early to mid-September 2013 in which he requested him to put together a document to put to the bank. This document was prepared and was given to the NAB. Mr Leslight said that after that meeting with the bank on site he told Mr Leslight that he would review everything after he heard from the bank.
In relation to Mr Leslight's affidavit sworn 24 October 2017, Mr Leslight claimed that he had a conversation on or about 20 March 2012 with Mr Phillips in which he asked Mr Phillips to take on the job as project manager for the site: T176.21. He also claimed that he had a conversation with Mr Phillips on about 20 March 2012 in which he said words to the effect that he had a development which he wished to do and he wanted the plaintiff to take it through to the excavation stage and then review the details of the work after that: see paragraph 8 of the 24 October 2017 affidavit. Mr Leslight also said that in relation to the duration of the services to be provided by the plaintiff, he said words to Mr Phillips to the effect that he wanted the plaintiff to take the project up to the excavation stage as he did not know what was under the soil and the plaintiff's involvement in the project would be reviewed after that: T177.14.
In relation to paragraph 10 of the 24 October 2017 affidavit, Mr Leslight confirmed that he received the first invoice from the plaintiff in the sum of $999 and observed that a 15% management fee margin had been charged by the plaintiff for project management: T177.34.
Mr Leslight gave evidence that he said to Mr Phillips words to the effect that he was dissatisfied with the 15% charge as it had not been brought up with him beforehand. However, he said that he paid the invoice: T177.42.
In relation to paragraph 27 of his 24 October 2017 affidavit, Mr Leslight said that he recalled a discussion with Mr Phillips in relation to the financing of construction works at the property where he asked Mr Leslight to put together a construction costing. This was done in early to mid-September 2013: T178.7.
The defendant, Mr Leslight, was subject to a lengthy cross-examination which extended over four days.
Mr Leslight was first asked questions in relation to the retention of the plaintiff to complete some construction work at the family company premises of Regatta Motor Body Repairs in Five Dock. Mr Leslight said that he believed he first met Mr Phillips in around July 2009: T268.12. Mr Leslight gave evidence that his father engaged the plaintiff for that work. He said he did have some involvement with the job through communications with Mr Phillips. Mr Leslight said he was not involved in relation to the payment for the work or the basis of payment for the work: T268.44.
Initially, Mr Leslight said that the plaintiff, Geneville, did not report to him in relation to the works at his family business: T269.21. He was then taken to an email from Mr Phillips to him dated 1 February 2010 which is Annexure D1 to his 24 October 2017 affidavit. When he was taken to the last two paragraphs of that email with the reference to certain works, it was put to Mr Leslight that the reference was to the work completed by the plaintiff at the Regatta Motor Body Repairs site. Although he initially said that the email did not state that, Mr Leslight confirmed that no other works were being performed by Geneville for him as at the date of the email: T270.49. Mr Leslight said that "possibly" it was referring to the works at the Regatta site. He then accepted that the 1 February 2010 email appeared to involve Mr Phillips reporting to him in relation to the work undertaken by Geneville on the Regatta site: T271.46. Clearly Mr Leslight was mistaken when he earlier said in his evidence that at no point was the plaintiff reporting to him in relation to the Regatta works: T269.21; cf T271.46.
Mr Leslight then gave evidence that he was not satisfied with the works undertaken by the plaintiff at the Regatta site: T272.8-.14. He said that he inspected the works and the works were not "finished off": T272.22.
Despite that, Mr Leslight agreed that he was "sufficiently impressed" with the work completed by the plaintiff that he discussed the possibility of a joint venture with Mr Phillips in relation to the Sandridge Street Bondi Site: T272.30.
Mr Leslight was then cross-examined as to why he sought a joint venture with the plaintiff in circumstances where he had allegedly not been satisfied with the Regatta works undertaken by the plaintiff: T273.13. Mr Leslight sought to answer this at T273.16-T274.24.
I was not impressed with Mr Leslight's evidence in relation to this issue. There seems to me to be an inconsistency between not being satisfied with work completed by Mr Phillips and his company in 2009-10 and then proposing a joint venture with the plaintiff in 2010-11. Although asked a number of times why he still sought to be involved with the plaintiff, Mr Leslight did not give a satisfactory direct answer but responded to various questions in terms like "we communicated, yes" (T272.34), "I was interviewing multiple builders" (T273.16) and "I put it to him as a venture": T273.22; see also T273.37. This evidence is particularly perplexing in the light of Mr Leslight's later evidence that he regarded Mr Phillips to be a "good builder": T274.21.
Mr Leslight was then taken to Annexure D2 to his 24 October 2017 affidavit, which was an email from Mr Phillips to him dated 30 August 2009 providing a "preliminary estimate" for building works which he annexed to the email. That estimate was in the sum of $2,074,776.00. The email stated "This is just a starting figure … and most probably will need adjusting to suit your budget". Mr Leslight agreed that he regarded the preliminary estimate as an attempt to quantify the project costs "overall": T275.3. At that time, Mr Leslight accepted that Mr Phillips had no plans or drawings or other specifications from him: T275.13-18. Mr Leslight agreed that as at 30 August 2009 the project was no more than "an idea": T275.22. In the light of that evidence, Mr Leslight accepted that the estimate provided by Mr Phillips may not have been accurate: T276.20. Mr Leslight also accepted that the preliminary estimate provided by the plaintiff was to assist in the calculation of a scope of works and to assess the feasibility of the proposed development: T276-T277.
Mr Leslight gave evidence that upon receipt of the preliminary estimate from Mr Phillips, it was his understanding at the time that the estimate related to the cost for a joint venture as opposed to simply the cost of the physical construction of the proposed building: T280.49. Mr Leslight agreed that the 1 February 2010 email from Mr Phillips in which Mr Phillips indicated that "the bank won't lend me anywhere near what I need to get into this" indicated to him that Mr Phillips could not participate in the joint venture: T281.11. However, Mr Leslight also confirmed that he met Mr Phillips after the date of the email to discuss advancing the project at the Site. Mr Leslight confirmed that on 16 February 2011 he sent to Mr Phillips by way of email plans in relation to a proposed construction at the site: T282.29 and Exhibit Volume 1 Tab 3 to Mr Phillips' first affidavit. Mr Leslight confirmed that by this email he was referring to whether Mr Phillips was interested in undertaking the building job at the Site for him: T282.25.
Mr Leslight confirmed that Mr Phillips, upon receiving the plans in Volume 1 Tab 3 from him, sought to obtain further information in relation to the plans: T284.34. However, Mr Leslight could not recall that the further information which he provided Mr Phillips was that set out behind Volume 1 Tab 4 in an email from Mr Leslight dated 16 March 2011. Mr Leslight had a poor recollection in relation to who this email was sent to. Mr Leslight's answers to some of the questions he was asked on this issue were somewhat unsatisfactory. Although recalling that he prepared the additional information on the plans which is set out in Volume 1 Tab 4, when asked why he did that he merely replied "I must have had a lot of time up my sleeve" (T286.5). In the end, he said that he could not recall doing it to send Mr Phillips additional information: T286.15. Although Mr Leslight was cross-examined for some time in relation to these plans, his evidence was not helpful in clarifying the purpose of the notations or who the planes were sent to. Initially, Mr Leslight said that he could not recall whether he used a ruler to scale the figures on the plans behind Volume 1 Tab 4: T293.41. When pressed further, he accepted that he used a scale ruler to obtain the dimensions which he added by handwritten notation to the plans: T294.4; T294.27.
Mr Leslight was then asked questions in relation to an email from Mr Phillips to him dated 6 April 2011 which is behind Volume 1 Tab 5 to Mr Phillips' 29 May 2017 affidavit. Mr Leslight agreed that this was an email from Mr Phillips to him and that as at 6 April 2011 he had not decided on the finishes to be used on the construction: T294.49; T295.17. Although the email trail shows that Mr Leslight responded to the email from Mr Phillips by thanking him, Mr Leslight could not recall whether the email was sent to him by Mr Phillips following a request by him for the information: T295.44.
Mr Leslight's attention was drawn to that part of the email from Mr Phillips where he stated: "These rates are provided to allow you to compare the costs of the different types of finishes & hopefully help you decide on a budget". As far as Mr Leslight could recall, as at the date of the email he had not decided on a budget for the project: T296.34; T296.45. He agreed that he had not shared any budget information with Mr Phillips at that time: T296.49. It is noted that in the 6 April 2011 email Mr Phillips adds, "when you have had some time to think about the overall budget & the level of finishes you wish to achieve, the architect will need to provide a finishes schedule & a full set of Construction Documents (including Structural Engineering Plans, Specifications, Schedules, Council Requirements etc)".
Mr Leslight was then taken by counsel for the plaintiff to an email he sent to Mr Phillips on 6 May 2011 which annexed certain diagrams of the proposed construction and some photographs. The email sought to arrange a meeting between Mr Leslight and Mr Phillips in the next week. Mr Leslight gave evidence that he was just asking Mr Phillips to look over the documents and to "look over the ideas" (T297.26) and was "putting them on the table". Although he initially did not accept that he was "seeking advice" from Mr Phillips (T297.30), he later conceded that "maybe" he was seeking his advice: T297.47. Overall, I formed the impression from this evidence that Mr Leslight was very hesitant to concede anything in cross-examination unless it was manifestly clear on the face of the documents placed before him. In my view, Mr Leslight was evasive in this area of the cross-examination as to what clearly was information sent to Mr Phillips in order to arrange a meeting in which advice would be obtained by Mr Leslight from Mr Phillips: see the cross-examination at T297-T299.31. Mr Leslight conceded that as at 6 May 2011 he could not recall having sent Mr Phillips detailed architectural drawings, specifications, schedules of finishes or information in relation to Council requirements.
Mr Leslight was then cross-examined in relation to an alleged meeting with Mr Phillips on site on 28 September 2011 and an alleged request by him to Mr Phillips to provide a "low estimate" of the cost of the project in order that he might reduce his financial obligations to Council. It was suggested that Mr Phillips explained to Mr Leslight at the meeting that the estimate of the build for the project would be between $3,500 and $5,000 per square metre. Mr Leslight did not recall a meeting on 28 September 2011 on site or Mr Phillips stating to him the cost of the construction. Mr Leslight denied any request to Mr Phillips to provide a low estimate in relation to the project in order to reduce Mr Leslight's obligations to pay s 96 contributions to the Council: T302.26. Mr Leslight appeared to me to have a poor recollection in relation to discussions with Mr Phillips and meetings at this time.
Mr Leslight in particular, denied requesting a deliberately low construction estimate of $900,000 (or around $900,000) per dwelling in order only to reduce his obligations to the Council through s 96 contributions: T302.32 and following. He accepted that the higher the build cost of the project, the higher the section 96 contributions would be for him to pay: T303.1.
Mr Leslight was cross-examined on the relevant emails on this issue which are in Volume 1 Tabs 7 and 8 to Mr Phillips' 29 May 2017 affidavit.
Having observed carefully Mr Leslight being cross-examined on this issue and having reviewed the correspondence referred to, I am comfortably satisfied that Mr Leslight requested an estimate of around $900,000 per property from Mr Phillips in an attempt to reduce his s 96 contributions to the Council even though he was aware that it was Mr Phillips' view that for a high quality finish and high quality fixtures the cost would be $3,500-$4,500 per square metre. I accept this finding is a serious one: see s 140(2) of the Evidence Act 1995 (NSW). I have reached this conclusion for the following reasons: 1. The reference in the 4 December 2011 email from Mr Phillips to Mr Leslight to the following: "I have attached an estimate based on the figures of around $900,000 per property as requested. Please let me know if this is ok." (emphasis added); 1. The email correspondence on 16 January 2012 between Mr Leslight and Mr Phillips following the submission by a quantity surveyor named Shehzad Charania of a fee proposal for preparing a bill of quantities and rates for the project, where Mr Leslight states in his 16 January 2012 email sent at 4.23pm: "Gene Will he stick to the original guided price of $912,000"; 2. Mr Leslight's further email sent on 16 January 2012 at 4.43pm in which he states: "I need to stick to that figure as this is all the council want to substantiate. As you are aware the section 96 contribution is 1% of the build cost. If it goes over we have to pay more. Do you have a good working relationship with this guy so we can stick to that figure. If so I will approve for him to start working on it."
In my view, the email chain clearly involves Mr Leslight wanting to ensure that the "working relationship" between Mr Phillips and the proposed quantity surveyor was such that the estimate of $912,000 per dwelling was maintained in order to limit Mr Leslight's s 96 contributions. I reject Mr Leslight's evidence to the contrary. I find Mr Phillips' evidence in relation to this issue is far more likely to be correct. Mr Leslight clearly had a powerful motive in attempting to limit his s 96 contributions for the project. I also reject Mr Leslight's evidence that he requested a figure at around $900,000 per dwelling as that was his banking budget for the project: see T302-T305, especially at T304.37 and T305.26-.37. I found Mr Leslight's answers to questions asked to be evasive in this part of the cross-examination. Mr Leslight's evidence that he used the figure of a guiding price of $912,000 as he had a budget to stick to from the bank (T306.47 and T307.46) was not persuasive where there is no mention of a budget in the email correspondence: T307.49. I also reject Mr Leslight's evidence that he told Mr Phillips that his budget for each dwelling on the project was around $912,000: T309.11-.18.
Mr Leslight was then asked questions in relation to who was in charge of the budget for the project. He rejected the proposition that he was not in charge of the budget. He said he was in full control of the budget and that other persons involved in relation to financing were always acting in accordance with his decisions. I reject Mr Leslight's evidence that he informed Mr Phillips of the budget of around $912,000 per dwelling. It is inconsistent in my view with the contents of Mr Phillips' 6 April 2011 email and Mr Phillips' 4 December 2011 email. It is also inconsistent with Mr Phillips' 5 November 2012 email (Volume 2 Tab 17) where he states: "As discussed & as per documents prepared by the quantity surveyor, a $3 million budget is a figure for a building of basic construction". Mr Leslight said he could not recall receiving this email but in my view it is clear from his email in the email chain above it sent on 5 November 2012 at 8:22am, that he received it. Mr Leslight gave evidence that he did not recall sending it or receiving the earlier email from Mr Phillips. However, he accepted that the format of the email was that which he used at the time: T313.42.
The cross-examination of Mr Leslight then turned to the events of the important oral discussion which was allegedly held between Mr Leslight and Mr Phillips on or about 20 March 2012. The evidence shows that on 20 March 2012 at 1:51pm Mr Leslight sent an email to Mr Phillips to the following effect: "I think it is time. When can we meet to start." Mr Leslight said that he did not recall sending this email to Mr Phillips. The evidence shows that at 6:49pm on 20 March 2012, Mr Phillips sent an email to Mr Leslight which included the following: "I will try to make this as painless as possible. We will need to get a full set of drawings & spec both as a PDF File & to scale on paper. … Our first step will be to get a list of contractors ready to call for prices. For each trade, we will also need to prep the sub-contract agreements/contracts. These agreements will also allow us to set up how will we will be running the project, depending on how much time you will be able to allocate, what you feel comfortable doing & how much you need me to do. As you will be the owner builder, I would suggest that you will be named as the Project Manager & I could be employed to work as your agent …"
In his oral evidence, Mr Leslight said that he did not recognise the email from Mr Phillips and did not recall receiving it: T315.4. In answer to the suggestion that he received the email and understood the contents of the email to be the plaintiff's terms of engagement for the project, Mr Leslight said he did not recall receiving the email. Mr Leslight also gave evidence that he did not recall having a telephone conversation with Mr Phillips subsequent to the 6:49pm email on 20 March 2012: T315.50; T316.9. Mr Leslight simply had no apparent recollection of a telephone conversation with Mr Phillips later on that day. I find that it is likely Mr Leslight received the email and had a conversation with Mr Phillips about it.
Mr Leslight was taken to the email from Mr Phillips to him dated 4 December 2011 in which Mr Phillips told Mr Leslight that "for a high quality finish and fixtures you will be looking at $3,500-$4,500 per square metre, but we will have to get various quotes to ensure we have an accurate budget" (Volume 1 Tab 7).
It was put to Mr Leslight that he relied on Mr Phillips' figure of $3,500-$4,500 per square metre for high quality finish and fixtures for the construction. Mr Leslight initially denied that, and said he did not rely on Mr Phillips' figure: T329.12. He said he relied on sticking to his budget of around $900,000 per dwelling: T329.17.
Mr Leslight was then taken to paragraph 6 of his affidavit sworn 24 October 2017 where he stated: "Mr Phillips provided me with the cost estimate of $3,500 to $4,500 on 4 December 2011 upon which I relied". When faced with his affidavit evidence, Mr Leslight changed his evidence and stated that the evidence in the affidavit was the truth. He stated that his evidence was "a misunderstanding" and that he relied on sticking to his budget: T331.8. Mr Leslight denied that he gave deliberately false evidence on this issue to the effect that he did not rely on the figure from Mr Phillips and confirmed that he did rely on the figure while sticking within his budget. This was a clear example of Mr Leslight's initial oral evidence being inconsistent with his affidavit evidence.
Mr Leslight was then cross-examined about the plans which were provided to Mr Phillips to supply to the quantity surveyor for the purposes of his estimate (Volume 1 Tab 8, email dated 15 January 2012) with it being suggested that having regard to the floor size of the construction, that Mr Leslight could not have reasonably believed that a budget of around $900,000-$912,000 per dwelling for the construction was feasible. Whilst agreeing that he did provide plans to Mr Phillips to give to the quantity surveyor for the purposes of preparing the estimate, Mr Leslight said he could not recall what plans or documents were provided. Mr Leslight conceded that he understood at this time that the floor space of the structure of the houses was about 647 square metres and that he disclosed to Mr Phillips a bank budget per dwelling of about $912,000: T341.13-342.2; T342.36. Mr Leslight also accepted that with Mr Phillips' estimate of $3,500 to $4,500 per square metre that the cost of the build for the dwellings had to have been in excess of $1.8 million: T343.1. Mr Leslight accepted that he relied on figures provided by Mr Phillips for the construction which were in excess of the amount approved by the bank: T343.5. Despite this concession, he denied that he was embarking on a project where he did not have the necessary money to complete the construction: T343.9.
There was extensive cross-examination in relation to the alleged agreement between Mr Phillips on behalf of Geneville and Mr Leslight which allegedly occurred on or about 20 March 2012. In paragraph 10 of his 60 paragraph affidavit sworn 8 July 2010, Mr Leslight states: "I accept that I agreed Geneville would act as project manager on or about 20 March 2012, however the arrangement was not committed to writing and the extent of the services were required initially limited to completing the excavation once it became apparent that the structure of the sub-soil was unclear". Despite this affidavit evidence, Mr Leslight said that he could not recall an oral discussion in 2012 or on 20 March 2012: T357.2-.11. Further, despite his affidavit evidence that there was an agreement of some sort made with Mr Phillips on or about 20 March 2012, Mr Leslight could not recall what he meant when he sent the email to Mr Phillips on 20 March 2012 when he said "when can we meet to start" (Volume 1 Tab 9): T358.44; T359.11. In particular, Mr Leslight said that he did not recall whether the reference to meeting "to start" was a reference to starting the construction of the project: T359.16. Mr Leslight added that he did not recall any oral discussion with Mr Phillips on 20 March 2012: T360.6.
On being pressed further in relation to the agreement referred to in paragraph 10 of his longer 8 July 2016 affidavit, Mr Leslight gave evidence that the agreement was made over the phone on or about 20 March 2012: T361.35. Having seen Mr Leslight give evidence on this issue, I formed the opinion that he had a very poor recollection in relation to the agreement which he referred to in his affidavit and which he said was made orally over the phone. He said the discussion was a "long time ago" (T362.19). He agreed that he reached an agreement with the Mr Phillips as to the plaintiff's' engagement on the job for the site: T362.41. When asked what was said, Mr Leslight initially said that he did not recall (T362.49) but then stated that the discussion was in relation to the plaintiff taking on a project management "side of things" up to the point of the excavation and then there would be discussion about the plaintiff's further involvement in the process: T363.2.
When asked whether there was a discussion in the telephone conversation in relation to when the plaintiff could commence, Mr Leslight said he could not recall: T363.22. When asked whether there was any discussion in the oral conversation on or about 20 March 2012 in relation to the terms of payment of Geneville, Mr Leslight said that he did not recall any such discussion (T363.6; T364.1). Mr Leslight was then asked whether he recalled a discussion in the telephone conversation on or about 20 March 2012 in relation to Geneville applying a charge of 15% to costs which accrued to the plaintiff in relation to works. Initially Mr Leslight said that he did not recall this: T367.11. Mr Leslight then, importantly, gave inconsistent evidence and accepted that there was a discussion and agreement between himself and Mr Phillips in relation to the application of a 15% charge by the plaintiff to the works undertaken at the site: T367.34-368.14; T370.38. When it was put to Mr Leslight that he had previously given evidence that he did not recall any discussion as to the terms of payment of the plaintiff, he replied 'that's what we spoke about": T368.14.
Mr Leslight was then taken to paragraph 8 of his affidavit sworn 24 October 2017 where he stated: "I agree there was a conversation about Geneville providing project management though there was no discussion about the rate to be charged". Having been confronted with the inconsistent evidence in his affidavit, Mr Leslight initially said that he could not recall the discussion alleged by Mr Phillips (T369.50), then stated there was no discussion in the telephone conversation on about 20 March 2012 about a 15% rate (T370.3) and then stated that he withdrew his previous evidence that there was a discussion and agreement with Mr Phillips in relation to Geneville charging the fee of 15% on the project costs (T370.17).
This was, in my view, very unimpressive evidence from Mr Leslight in relation to a crucial conversation. When faced with his affidavit evidence, Mr Leslight withdrew his oral evidence. Mr Leslight said that the truth was that there was a conversation with Mr Phillips about the plaintiff undertaking project management with the role only to take the job up to the excavation and then the plaintiff's further role being determined after that: T370.46. Mr Leslight denied that paragraph 8 of his 24 October 2017 affidavit was a lie where he said that there was no discussion with Mr Phillips about the rate to be charged by Geneville: T372.34-.45. He also denied that paragraph 10 of the same affidavit was a lie where he states that he expressed dissatisfaction on receiving the first invoice from the plaintiff where he noted the presence of the 15% charge: T372.50.
When pressed as to whether any other terms of payment were discussed in the conversation which occurred on or about 20 March 2012, Mr Leslight said that he did not recall any other discussion of any terms of payment including for late payment: T373.25-374.17. In the end, Mr Leslight gave evidence that he did not recall any discussion in relation to money at all in the course of the oral discussion with Mr Phillips on or about 20 March 2012: T374.32. He said the terms of payment were left unspoken with Mr Phillips and were never discussed with Mr Phillips: T374.36-.44. While accepting that it was agreed on or about 20 March 2012 that Geneville would perform services at the site, Mr Leslight gave evidence that there was no discussion at all with Mr Phillips about the rates to be charged by the plaintiff for work, either in the telephone conversation on 20 March 2012 or later: T375.42-.50.
This evidence is inherently unlikely and most unconvincing and I reject it. In my view, it is likely that there was discussion between Mr Leslight and Mr Phillips about the rate to be charged by Geneville when the agreement was made between the parties on or about 20 March 2012. In my view, Mr Leslight's initial oral evidence that there was a discussion and agreement about the 15% charge is more likely and I accept it. Mr Leslight would clearly have wanted to know the charges which the plaintiff proposed to make to him for its work at the Site.
Mr Leslight was then cross-examined in relation to the Defence to the Further Amended Statement of Claim which was filed by him on 4 May 2017. That Defence had been verified by him by way of affidavit sworn 4 May 2017 including that the allegations of fact contained in the Defence were true. Paragraphs 3 and 4 of the Defence relate to the allegations in the Further Amended Statement of Claim concerning the agreement which the plaintiff alleges was entered into with Mr Leslight on or about 20 March 2012. Paragraph 6 of the Further Amended Statement of Claim sets out certain terms of the alleged agreement entered into between the parties on or about 20 March 2012.
Paragraph 4 of the Defence to the Further Amended Statement of Claim should be set out in full. It provides as follows: "4. In answer to paragraph 6 the Defendant says the terms of the Agreement included: i. The terms set out in paragraph 6 of the Cross Claim; and terms ii. That the Plaintiff would carry out the works and services in accordance with the specifications and drawings provided by, and the verbal directions of, the Defendant; iii. That the Defendant would pay the reasonable cost of the works properly undertaken, and in respect of the Project Management services, a charge of 15% (inclusive of insurance, project management and administration) of the cost of the works properly incurred; iv. That the Plaintiff would make regular progress claims for works and services provided; v. That the Defendant would pay the progress claims within 7 days of receiving them. Save as aforesaid, the Defendant denies paragraph 6."
Mr Leslight was extensively cross-examined in relation to this paragraph of the Defence. The effect of that cross-examination was: 1. Mr Leslight stood by his oral evidence that there was never any discussion in relation to the financial terms of payment under the arrangement with Mr Phillips and no quote was provided by Mr Phillips: T376.39; T377.14; T377.36; T377.49; 2. Mr Leslight said there was never any discussion between Mr Leslight and Mr Phillips as to how much Mr Leslight would pay for Geneville's work on the Bondi Site: T377.4; T378.17; T384.34; 3. Mr Leslight said paragraph 4(iii) was inaccurate but not a lie as no agreement was entered into on or about 20 March 2012 in relation to any percentage of charge: T381.33-.43; T384.38; 4. Mr Leslight said paragraph 4(iv) of the Defence was also inaccurate but not a lie, as the issue of regular progress payments for works and services provided by the plaintiff was not in the discussion on or about 20 March 2012, although Mr Leslight then inconsistently said that he was sure they would have been discussions on that issue: T382.14-.35; T385.30. He then denied there was any such discussion; 5. Mr Leslight said paragraph 4(v) of the Defence, that the defendant would pay the progress claims within seven days of receiving them, was also incorrect: T385.39-.47; 6. Mr Leslight confirmed again that he never had any discussions with Mr Phillips in relation to charging by the plaintiff for work performed by the plaintiff on the Bondi project: T386.6; 7. Mr Leslight confirmed the accuracy of paragraph 3(iii) of the Defence which provides that on or about 20 March 2012, Mr Leslight as owner/builder, agreed to engage the services of Geneville as a project manager limited at that time to site preparation, including demolition of existing improvements, an excavation, including footings, and thereafter for a review of the project cost and to carry out certain other works: T387.41; 8. Mr Leslight confirmed again that the agreement reached with the plaintiff on or about 20 March 2012 was wholly oral.
Mr Leslight's evidence was not impressive in relation to the cross-examination concerning paragraph 4 of the Defence. He had verified the Defence by way of affidavit on 4 May 2017. The assertions made in the Defence in relation to the terms of the agreement in paragraph 4 are clear. I find on all the evidence that Mr Leslight had little recollection in relation to the content of the discussion with Mr Phillips in the conversation on or about 20 March 2012. Mr Leslight's inconsistent and contradictory evidence on the terms of the agreement should be contrasted with the clear evidence of Mr Phillips on this issue.
Mr Leslight was then asked questions in relation to his status on the project as an owner/builder. He confirmed that he was an owner/builder and had obtained an owner/builder permit for the Bondi project. He denied that the whole project was completed with him remaining as an owner/builder. He agreed that he was an owner/builder when the plaintiff was active on the site but said that when the new builder, Micrah Projects, came in and was contracted by him, he ceased as an owner/builder even though he did not take any steps to cancel his owner/builder permit. He said he assumed that by signing the contract with the new builder Micrah Projects that his owner/builder responsibilities had ceased. He assumed that his responsibilities as an owner/builder were somewhat less than those of a fully licensed builder.
Mr Leslight was then cross-examined about the fact that he had only obtained a geotechnical engineering survey of the site for the purposes of obtaining a construction certificate. He said that he understood that a geotechnical survey was needed to obtain the construction certificate but no one had reported to him that such a survey was needed for other purposes. Mr Leslight said he had engaged the relevant expert to obtain the geotechnical survey prior to the demolition in order to get the construction certificate.
Mr Leslight was taken to paragraph 8 of his 24 October 2017 affidavit where he stated: "No written agreement was entered into and at this time I had discussed with Mr Phillips that his services would be limited in time up to the completion of excavation as he had indicated his concerns with the unknown sub-soil conditions". Mr Leslight confirmed the accuracy of this. He was asked why, if he merely wished the plaintiff to undertake work related to the excavation only, did he not engage an excavation contractor to do the job instead of the plaintiff. Mr Leslight said that there was no talk of that approach at all and he said that Geneville was simply taken on with their role to be reviewed after the excavation.
Mr Leslight was then asked why he forwarded to the plaintiff architectural plans and photographs of the proposed finishes if he only wished the plaintiff to be involved in the excavation. He said he did it in order to obtain from Mr Phillips a costing on the whole project. He denied that his assertion that Geneville's services were retained only for the excavation was an invention by him and it was never discussed. He also denied that it was raised by him after the event as a reason for dispensing with the plaintiff's services in late 2013: T401.13.
Mr Phillips was asked about paragraph 15 of his 60 paragraph affidavit sworn 8 July 2016, and particularly his email to Mr Phillips dated 29 May 2012 with drawings prepared by the architect and other plans. He agreed that he had sent these documents to Mr Phillips shortly before the demolition began at the site and that they were the most recent drawings which he had available at the time: T406.11. He said he had provided this material to Mr Phillips as he was the project manager on the site: T407.15.
Mr Leslight was asked a number of questions in relation to the architectural and structural drawings which he forwarded to Mr Phillips on 29 May 2012 and 13 June 2012: see paragraph 15 of Mr Leslight's 60 paragraph affidavit sworn 8 July 2016. Mr Leslight was asked whether in sending the 13 June 2012 email he was seeking "advice" from Mr Phillips: T417.10. Mr Leslight appeared to have difficulties in conceding that he was seeking advice from Mr Phillips and said he merely asked him to "look over" the drawings. When pressed, Mr Leslight conceded that he expected Mr Phillips to call him in relation to the plans in his capacity as a builder to discuss them with him: T417.41.
Mr Leslight was then taken to drawings prepared by JDT Design, engineers, in August 2013. The evidence showed that even by that stage, some 14 months after the commencement of demolition works on the site, that the plans and drawings for the construction were still evolving and no plans which were not marked "not for construction" had been prepared. Mr Leslight confirmed that these plans marked "not for construction" were the highest and best plans that had been provided to Mr Phillips by that stage: T422.47.
Mr Leslight was then asked questions in relation to Geneville's involvement in relation to the demolition of the existing buildings on the Site.
Mr Leslight asserted in his evidence that the plaintiff was not involved in the demolition works on site: T423.49. He gave evidence that the demolition works were performed by Active Demolitions: T423.19. Mr Leslight conceded in his evidence that Geneville was involved off-site in relation to the demolition process by referring Active Demolitions to Mr Leslight: T424.5.
Mr Leslight stated that he arranged for the demolition of the buildings on the Site to be undertaken: T424.45. He claimed that the plaintiff only commenced on site works after the demolition. Mr Leslight asserted that the plaintiff was not involved in the demolition works on site as it was not a demolition expert: T426.3.
Mr Leslight was then taken to the job diary which Mr Phillips stated that he prepared on an ongoing basis during the course of the project: see Volume 1 Tab 1 of the exhibit to Mr Phillips' 29 May 2017 affidavit and paragraph 9 of that affidavit. There are numerous references in Mr Phillips' job diary to involvement by the plaintiff and Mr Phillips in the demolition works undertaken at the site. Mr Leslight said that he had not reviewed Mr Leslight's job diary. The job diary had a number of entries relating to meetings between Mr Phillips and either Active Demolitions or Mr Leslight: see the entries for 12 July 2012, 24 July 2012 and 29 July 2012. Mr Leslight gave evidence that he did not recall the meetings referred to and he was not aware that the plaintiff was preparing for the demolition works. Despite these entries, Mr Leslight disputed that the plaintiff was involved in other aspects of the demolition undertaken other than merely making the referral to Active Demolitions.
Mr Leslight was then asked questions in relation to his obtaining of a consulting geotechnical engineering report from Michael Adler and Associates. Mr Leslight confirmed that he retained Mr Adler and that his report was obtained for the purposes of being granted a construction certificate by Council. He was taken to various aspects of a report of Mr Adler dated 22 November 2011. In that report, Mr Adler expressed an opinion in relation to the likely content of the subsurface at the site. However, Mr Adler in the report made clear that no subsurface investigations had been undertaken by him and hence the depth to rock levels and the extent of any existing filling in the site was unknown. It was stated clearly by Mr Adler in his report that the depths of filling and the amount of the natural soils above the rock level may vary from those suggested by him in his report. Mr Adler noted that having regard to the area and the neighbouring buildings there was evidence which indicated that the existing and adjacent buildings were founded on the underlying rock. Mr Leslight stated that he could not recall providing a copy of the Adler report to Mr Phillips but said that he was sure that he would have. Mr Leslight agreed that no boreholes had been dug by Mr Adler for the purposes of his report. Mr Leslight conceded that from this report he did not know what was below the surface at the Site. He agreed that he did not provide the plaintiff with any information in relation to the sub-surface conditions at the site.
Mr Leslight was then asked questions in relation to the issue of underpinning required for the neighbours' properties. He agreed that "minimal" work was required to the neighbour's property on the southern side: T436.14. This included the construction of a temporary retaining wall to the southern side boundary: T436.18. Mr Leslight was taken to Mr Phillips' diary entries for various dates including 26 November 2012 and 27 November 2012 which indicated time was spent by Mr Phillips on site meetings with engineers and Mr Leslight in relation to the need for underpinning neighbours' properties. Mr Leslight expressed confusion and a lack of understanding in relation to the work and clearly did not recall the meeting referred to with him on 27 November 2012.
I am satisfied from Mr Phillips' evidence, the detail in the diary entries and Mr Leslight's inability to negate the alleged meeting, that the diary entries represent an accurate summary of the work performed by the plaintiff and Mr Phillips in relation to the underpinning on the days referred to.
Mr Leslight was then asked questions about the demolition contractor, Active Demolitions, and whether he was paying their invoices on time. He said he could not recall their payment terms or whether they were paid on time. Mr Leslight gave evidence that Active Demolitions altered the fees which they charged for tipping and increased their quote. He stated that they were only used for the demolition and not for the excavation. He said a number of different excavators were used including Spartan Civil.
Mr Leslight was taken to Mr Phillips' diary entries for 8-10 August 2012 which indicate that the plaintiff undertook preparation work for the excavation and other site preparation and was involved with exploratory work to discover the nature of the subsurface at the site in the absence of a geotechnical report. While conceding the existence of the diary entries, Mr Leslight made no concession that the plaintiff had undertaken the works indicated. It was put to Mr Leslight that if a proper geotechnical report had been obtained by him in relation to the sub-surface of the Site, then the further exploratory work would not have been required in August 2012. Mr Leslight said he could not confirm that as he was not a professional in the area. He disputed that the costings of the excavation work by Mr Phillips were made more difficult because Mr Leslight had not previously obtained a sub-surface geotechnical report. However, it appears clear to me that if an earlier geotechnical sub-surface report had been obtained then Mr Leslight, the plaintiff and other professionals involved including the excavation team would likely have been aware of what was below the surface at the Site and the potential for delay and further costs.
Mr Leslight was taken to Mr Phillips' diary entries for the period between 13 August 2012 and 7 September 2012 which indicated that there was continued work on the earthworks at the site. Mr Leslight asserted that Spartan's equipment was on site for 25 days but they only worked for 12 days: T444.27. He said he did not agree with the diary entries to the extent they suggested that works occurred on 20 days. The basis for this disagreement was not disclosed.
It was put to Mr Leslight that on 3 September 2012, Spartan Civil stopped work on its excavation as engineers were required to investigate the neighbouring properties in relation to retaining walls. He agreed with this but denied that any delay as a result was as a consequence of his failure to obtain a geotechnical report in relation to the sub-surface conditions at the Site previously including from Mr Adler. He agreed that he retained engineers to look at this issue. However, Mr Leslight appeared to dispute that it was his responsibility to obtain the report and said that he was not the project manager: TT447.17.
Mr Leslight was taken to paragraph 11 of his affidavit sworn 27 May 2016 where he states: "It took until 24 October 2012 for Geneville to arrange a site meeting [in relation to the support of the neighbouring property]". It was suggested to Mr Leslight that this was inaccurate and that site meetings on this issue occurred prior to that time; however he disputed that.
Mr Leslight was then taken to diary entries made by Mr Phillips on 11 October 2012 which suggest that Mr Phillips met with both the geotechnical engineer and the structural engineer on that day. Whilst accepting that this was in the diary entry, Mr Leslight did not appear to accept that it occurred. However, he agreed that he paid for an invoice numbered 1355 from the plaintiff which included charges for meeting with Mr Adler and Mr Pak Liu. This invoice was dated 17 October 2012 and was paid by Mr Leslight on 24 October 2012. I conclude from this evidence, that Mr Leslight's affidavit is inaccurate in paragraph 11 where he suggests that it took until 24 October 2012 for the plaintiff to arrange a site meeting on this issue.
Mr Leslight was taken to an email from Mr Phillips dated 5 November 2012 which is significant and which has already been referred to above. The email noted that a $3 million budget was a figure for a building of "basic construction". Additional costs were noted for incomplete engineering details of the boundary and sub-floor areas. It was noted that a final set of engineering drawings "for construction" were required before certain work was able to be costed. Requests were made for the payment of various invoices. Requests were then also made for a $150,000 deposit with Mr Phillips setting out a number of payment terms. Mr Leslight said he did not recall receiving this email. However, I note that there was a reply email from Mr Leslight also sent on 5 November 2012 with the same subject heading. Although Mr Leslight could not recall receiving Mr Phillips' email, having regard to the response with the same subject heading, I find that the 5 November 2012 email was sent to Mr Leslight by Mr Phillips and received by him.
Mr Leslight gave evidence that by 16 November 2012 he had a third excavating company on site by the name of Ron Flew Excavations. He agreed that Ron Flew Excavations worked on the site in November/December 2012 and invoiced Mr Leslight for that work. Mr Leslight was taken to a number of invoices from Ron Flew Excavations which covered the period from 16 November 2012 to 20 December 2012. These invoices included charges for taking spoil from the site to the tip. However, Mr Leslight said he was not aware that excavation fill was stored on site after 28 November 2012. He disputed that it was stored on site because he would not approve the removal of it from site as he did not want to pay the removal costs. Mr Leslight was taken to Mr Phillips' diary entries for 4 and 5 December 2012, which refer to the need to remove excavation materials and that Mr Phillips was waiting for funds and Mr Leslight's go ahead. Despite Mr Leslight's rejection of these matters, they appear to be established by Mr Phillips' diary which I accept was prepared contemporaneously and therefore is more likely to be accurate.
Mr Leslight was then asked questions in relation to time which he spent negotiating with the neighbours of the Site. He accepted that some time was spent negotiating with the neighbours in relation to the need to encroach on their land to prepare retaining walls and fences. Mr Leslight also accepted that he was not aware of the need to do this until after the excavation work had commenced. Mr Leslight was taken to entries in Mr Phillips' diary on 16 November 2012 and 19 November 2012 in relation to issues with the neighbour. Mr Leslight said he could not recall a meeting on 16 November 2012. Other meetings are referred to on this issue on 21 November 2012 and 26 November 2012 but Mr Leslight could not recall these. He accepted that Mr Pak Liu, the structural engineer was on site on a number of occasions.
The material in evidence showed correspondence on this issue between Mr Leslight and Mr Phillips and with a Ms Roenne, the strata manager of a neighbour, in the November-December 2012 period (pages 33-37 of 199 in Volume 1 Tab 2 of the exhibit to Mr Phillips' first affidavit): T463.19 and following. Mr Leslight could not recall receiving the various emails but it is noted that some of the emails are on Mr Leslight's email signature page. When asked to confirm that Mr Phillips took an active part in attempting to fix the issue concerning the neighbours, Mr Leslight expressed the opinion that Mr Phillips should have advised him to get a further geotechnical report in his capacity as project manager as he was the relevant party on site: T467.42. Mr Leslight disputed that it was his responsibility as the owner/builder to obtain proper geotechnical reports and not that of Mr Phillips and the plaintiff. Mr Leslight accepted that he retained a geotechnical engineer at this time to assist in resolving the neighbour support issue: T471.34.
Mr Leslight was cross-examined in relation to his retention of Mr Adler, the geotechnical expert, and his payment of his fees. It was put to Mr Leslight that he had delayed paying Mr Adler and as at September 2012, was 10 months behind in making payment for Mr Adler's November 2011 services (which may have included his November 2011 report). Mr Leslight said that he could not recall that: T473.5. However, the contemporaneous evidence appears to support the fact that Mr Leslight was behind in his payments to Mr Adler who was significant in relation to geotechnical issues on the site.
Mr Phillips' diary entries show problems with payments to Mr Adler in September 2012 (see the entries for 21 September 2012 and 26-27 September 2012. See also the email from Mr Adler to Mr Phillips and Mr Leslight dated 3 September 2012 in which Mr Adler was seeking payment for services including services provided 10 months previously. There was no email from Mr Leslight disputing this in evidence). Mr Leslight accepted in evidence that advice from a geotechnical engineer was required in order to resolve the support issue with the neighbouring property: T473.16. When asked whether he had allowed the invoice to remain unpaid for 10 months from Mr Adler, Mr Leslight said that he would have "to confirm that": T474.24. I am satisfied from the evidence that Mr Phillips was making efforts at this stage to assist Mr Leslight in dealing with his problems and with the negotiations with the neighbours: see Mr Phillips' email to Mr Leslight dated 10 December 2012 (Volume 1 Tab 2 page 34 of 199). See also Mr Phillips' diary entries for 14 December 2012 and 18 December 2012 in relation to chasing up payment for the "Geo Tech" who I take to be either Mr Adler or his replacement. Mr Leslight had no recollection in his evidence in relation to these issues.
Mr Leslight was cross-examined further in relation to the issues with the neighbouring property. I am satisfied from his cross-examination and the entries in Mr Phillips' diary, that the issues with the neighbour continued well into 2013 and involved a number of meetings. These are matters which delayed further excavation of the site. Although in paragraph 13 of his 27 May 2016 affidavit, Mr Leslight states that in mid-February 2013 it became necessary for him to negotiate with the owners of the unit building adjacent to the northern boundary to excavate onto land within their property, this issue had arisen already in writing in November 2012 or at the latest by early December 2012. Although Mr Leslight attempted in his cross-examination to make a distinction between communications with the neighbour and negotiations with the neighbour, the issue caused delay on the site.
In relation to Mr Phillips' diary entry for 22 April 2013 where it states "still waiting on go ahead with neighbour & funds so checked accounts", Mr Leslight said he could not recall the date when the issue with the neighbour was resolved. However, it is noted that his 27 May 2016 affidavit in paragraph 4 states that on 26 April 2013 three exploration holes were dug adjacent to the neighbouring unit followed shortly thereafter by the construction of the pool.
It is also noted that it appears that a new geotechnical engineer was retained by Mr Leslight. Mr Phillips' diary entry for 26 April 2013 noted that Mr Adler had not been paid for his services. I accept the accuracy of this entry in the light of all the evidence. Mr Leslight said he could not "confirm" that Mr Adler had not been paid by that stage. However, he denied that his budget for the project was "up in the air" at that point: T486.1. Mr Leslight confirmed that as at 1 May 2013 Mr Phillips had not been provided any plans which were not marked "not for construction". I note that in an email from Mr Phillips to Mr Leslight dated 1 May 2013, Mr Phillips states that: "Currently I feel I don't have the information to provide you with the completed project within any sort of realistic budget or timeframe. If we haven't received the documentation after asking for it for nearly a year, I am fearful of the consequences". Despite Mr Leslight saying that he does not recall the email, I accept that it was sent to him by Mr Phillips. He agreed that in the email Mr Phillips expressed concerns to him in relation to poor documentation.
The 1 May 2013 email from Mr Phillips also states that the plaintiff required "the original deposit to allow us to bring back contractors as required". Mr Leslight, despite this email, said that he knew nothing of a deposit: T489.21. Despite the various issues which had been raised in relation to concerns with the payments with Spartan Civil and Mr Adler, Mr Leslight denied that there were funding issues as at 1 May 2013 causing delay: T491.2 and T492.48.
Mr Phillips' diary refers to a number of meetings between him and the structural engineer Mr Pak (Liu): see the entries for 13 May 2013 and 21 May 2013. The diary states that Mr Leslight was present for the meetings but Mr Leslight could not recall them. In my view, the contemporaneously prepared diary entries are more likely to be an accurate record than Mr Leslight's imprecise and incomplete recollections. It shows that Mr Phillips on behalf of the plaintiff was actively working with the structural engineer to advance issues at the site.
It seems clear that Mr Phillips raised funding issues with Mr Leslight in his email dated 22 May 2013 (Volume 1 Tab 2 page 88 of 199) to which Mr Leslight responded on 30 May 2013: "Yes go ahead. Finally here we go. Great. Looking forward to having everything running smoothly" (Volume 1 Tab 2 page 87 of 199). Mr Leslight said he could not recall receiving Mr Phillips' 22 May 2013 email but the fact that there is a reply from Mr Leslight with the same subject heading which he confirmed was on his signature page (T496.38), satisfies me that he did receive it.
Mr Leslight was extensively cross-examined in relation to Mr Phillips on behalf of the plaintiff chasing up payment by Mr Leslight of the plaintiff's invoices. Mr Leslight in his evidence claimed that he only received four tax invoices from the plaintiff prior to the commencement of proceedings. Mr Leslight was taken to Mr Phillips' diary entry for 21 August 2013 which states: "Chasing up money, design updates & schedules from Brett". Mr Leslight gave evidence that he could not recall Mr Phillips pursuing payment of invoices at this time: T501.30. He disputed that his failure to pay the plaintiff's invoices was delaying the job: T502.5.
Mr Leslight was taken to an email from Mr Phillips dated 10 September 2013 where he states: "Just checking if we can receive payment for the invoices to date. I really need this money by the end of this week to be able to pay suppliers etc or I will need to go to another job to get some cash flowing again". Mr Leslight states that he recalled this email and that he replied to it (Volume 2 of 4 behind Tab 19).
Mr Leslight disputed that Mr Phillips was telling him by this email that he was running out of money due to non-payment of the plaintiff's invoices: T504.7. He also stated that the reference to "additional unforeseen work completed to date" was perceived by him as relating to getting the job moving forward through obtaining finance with a budget. Mr Leslight said that at this time he understood that the only invoices outstanding were from Ron Flew Excavations: T504.18. This is despite the fact that the email from Mr Phillips to him makes no mention of Ron Flew Excavations but refers to "the invoices to date". Mr Leslight was referred to the subject heading of the email which referred to "Invoice 1407". He said that he did not know what Invoice 1407 was and assumed it was from Ron Flew Excavations. He said he had not seen any invoice from the plaintiff numbered 1407. When asked what he meant by his response to Mr Phillips "Thanks Gene. Onto it", Mr Leslight said that he understood it to mean payment of the Ron Flew invoices. He denied that he could only have interpreted this email as dealing with outstanding invoices from the plaintiff: T506.11; T506.36.
I do not accept this evidence from Mr Leslight. It is clear that he received the email dated 10 September 2013 from Mr Phillips. The email refers to Mr Phillips checking if "We can receive payment for the invoices to date". There is no mention of Ron Flew Excavations in the email and the use of the word "we" can only in my view, reasonably be a reference to the plaintiff. I reject Mr Leslight's evidence as to his understanding of this email. I find that Mr Leslight must have understood the email as referring to invoices from the plaintiff.
Mr Leslight was then taken to paragraph 38 of his 24 October 2017 affidavit where he says that he was unaware prior to March 2016 of ten numbered invoices said to be from the plaintiff. Mr Leslight again admitted that he received and paid four invoices from the plaintiff: T517.13. Mr Leslight's evidence was that he did not see an invoice from the plaintiff from April 2013 when he received invoice number 1388 dated 29 April 2013 until he received an invoice numbered 1419 in the sum of $17,089.71: T511. Mr Leslight gave evidence that he received an invoice numbered 1419 but it was in the amount of the invoice numbered 1420: see also paragraph 39 of his 24 October 2017 affidavit. He claimed that invoice 1420 was "doctored".
In my view, Mr Leslight was clearly mistaken on this issue. He did not annexe to his affidavits a copy of the invoice numbered 1419 he claims to have received. In my view, he was clearly mistaken in relation to invoice 1420 from the plaintiff which was for the same figure. It is also difficult to accept that Mr Leslight only received four invoices from the plaintiff in the time the plaintiff was undertaking work on the site in circumstances where Mr Leslight was aware that the plaintiff through Mr Phillips or other workers was frequently on site. Although Mr Leslight claimed that the plaintiff was not consistently working on the site for the entire period, he accepted that the excavation was completed under the supervision of the plaintiff as (he thought) project manager.
Mr Leslight gave evidence that only receiving four invoices from the plaintiff for such an extensive period did not give him any concern: T517.31. If this was the case as he claimed (only receiving four invoices from the plaintiff), in my view Mr Leslight would have been concerned because he would have been worried that he would receive one very large invoice from the plaintiff which may have adversely affected his financial resources. I think it very likely and I find that if Mr Leslight had not received regular invoicing from the plaintiff that he would have been chasing Mr Phillips for updated invoices. Mr Leslight denied that he had agreed with Mr Phillips to have regular invoicing of progress claims and repeated his evidence that paragraph 4(iv) of the Defence verified by him was incorrect.
Mr Leslight was cross-examined in relation to the invoices which he confirmed receiving. He gave evidence that he paid these invoices including in circumstances where the invoices contained a 15% margin added and where hourly rates had been placed on the invoices for various workers from the plaintiff. He agreed that he read the invoices upon receipt and accepted them before he paid them: T522.34-.44.
Mr Leslight was taken to paragraph 10 of his 24 October 2017 affidavit where he states that he received the first invoice from the plaintiff which included a 15% charge. In his earlier oral evidence in chief, he gave evidence that he raised his dissatisfaction with Mr Phillips in relation to that charge: T177.42. Nevertheless, Mr Leslight agreed that he paid the invoices as charges properly incurred by Geneville. This included the 15% additional charge. Mr Leslight did not accept that an agreement was already in place in relation to the 15% charge and stated that again the Defence in paragraph 4 was incorrect in this to this extent: T523.50.
I do not accept Mr Leslight's evidence in relation to this issue. I consider it is unlikely that he would have paid the 15% charge on the invoice if it had never been agreed with Mr Phillips. This amounted to a considerable sum of money. I think it is very likely that Mr Leslight would have disputed this rather than simply paid it. It is unclear why the works were at "a delicate stage" as he asserts in paragraph 10 of his 24 October 2017 affidavit. I also take into account the concession by him that there was an agreement as to the 15% charge which was in the Defence to the Further Amended Statement of Claim which was verified by him, although he later said that was inaccurate. I also reject Mr Leslight's evidence that he paid $18,000 to Mr Phillips in September 2013 in response to a verbal request by Mr Phillips that he was "strapped for cash" and needed money. I consider it much more likely and I find that the payment of the $18,000 was connected with Mr Phillips' request in his email dated 10 September 2013 for payment "for the invoices to date". It also seems highly unlikely that the payment was made not in relation to any invoice but a mere request for cash in a conversation.
This appears to me to be confirmed by Mr Phillips' email dated 12 September 2013 and Mr Leslight's response on the same day (Volume 2 of 4 behind Tab 22). In my view Mr Leslight's comment: "I have transferred $18k today and will keep moving on this for you," does not appear to be in relation to a general request for cash as opposed to a request for the payment of the plaintiff's invoices. This is supported by Mr Phillips requesting money as he had been trying "to extend [his] accounts". Mr Leslight's evidence that his reference to "keep moving on this for you" was a reference to accounts from Ron Flew Excavations is unlikely and I reject it: T529.27.
Mr Leslight was cross-examined in relation to an email dated 18 September 2013 which he responded to on the same day (Volume 2 of 4 behind Tab 20). In the email Mr Phillips states: "Attached is the latest Statement of Invoices and payments. I am really struggling to pay the wages this week & don't really want to send the guys to another job, but I won't have a choice if we can't get a decent amount of funds in the next day or so. My bank is also very concerned as I have needed to re-draw most [of] this money from my home loan to pay my suppliers. Please let me know when we could: 1. Receive payment in full for the outstanding invoices…"
Mr Leslight agreed that he took this as a request for funds and that is why he paid Mr Leslight the $18,000. Mr Leslight's claim that the request for payment related to invoices from Ron Flew Excavations is unlikely and I reject it. I do not accept Mr Leslight's evidence that he did not take the email from Mr Phillips as a reference to invoices from the plaintiff as opposed to Ron Flew Excavations, even though the latter was being supervised by the plaintiff on site.
I am assisted in this conclusion by the reference to the words in the email "Please let me know when we could … receive payment in full for the outstanding invoices", which seem to be a reference to the plaintiff. The email from Mr Phillips also includes the words as I have indicated above: "Attached is the latest Statement of invoices and payments." In my view this must have been a reference to a statement of invoices and payments from the plaintiff. If the document was not attached, I think it highly likely that Mr Leslight would have contacted Mr Phillips and asked for the attachment. It is unclear how the payment of invoices to Ron Flew Excavations could have any effect on the plaintiff's ability to pay his wages for the week in question. I also note the email chain includes an email from Ms Phillips apparently attaching an invoice and statement. The subject matter of that invoice and the later invoices in the chain (including Mr Leslight's email) is "invoice 1411". I find that the email from Mr Phillips must have attached a statement of invoices and payments otherwise it would have been pursued by Mr Leslight who would have obtained it anyway following his enquiries.
It seems that from the correspondence that Mr Leslight was focused on having Mr Phillips prepare a budget for the purposes of a meeting with Mr Leslight's financier to provide funds for the ongoing payment of the works under the project. This is clear from Mr Leslight's emails dated 12 September 2013 (Volume 2 of 4 behind Tab 22) and the forwarding of the budget to Mr Leslight by Mr Phillips on 23 September 2013 (Volume 2 of 4 behind Tab 23).
Mr Leslight was then asked a number of questions in relation to his meeting with his financier on site. He agreed that there was a meeting on site including with Mr Phillips on 1 October 2013. Initially, Mr Leslight gave evidence that the purpose of the meeting did not include seeking more funds (T539.3) but then conceded that there was "possibly" a discussion in relation to more funds: T539.9. In the end, Mr Leslight agreed that one of the purposes of the meeting was to obtain more funds from the bank for the purposes of the construction: T539.16. Mr Leslight confirmed that he provided the NAB representative with a copy of Mr Phillips' budget for the site which claimed that there had been interruptions and delays in construction since July 2013 caused by neighbours, documentation and funding issues. The budget estimate was in the sum of $3,904,518.41 including GST and included a project management fee of 10%. On the last page of the budget were additional items not included in previous budgets as investigation and design work had not been completed. These items relate to further excavation and new boundary retaining walls. In relation to the causes for the delay raised by Mr Phillips in his budget, Mr Leslight conceded that he was responsible for funding, dealing with issues with the neighbours and the provision of necessary documentation: T541. As stated, Mr Leslight gave evidence that he gave a copy of the report from Mr Phillips to the bank representative, Mr Harris at the meeting on site on 1 October 2013: T541.41.
Mr Leslight was then taken to an email from Mr Phillips dated 29 September 2013 (Volume 3 of 3 of the Cross-Claim exhibits behind Tab 21) which included Mr Phillips stating that he annexed all of the plaintiff's invoices to date. Mr Leslight said that he did not recall receiving this email or the attachments referred to. He denied that the bank asked for a copy of invoices from the plaintiff or that it required invoices for drawdowns.
Mr Leslight was then asked questions about the on-site meeting with Mr Harris of the NAB, himself, Mr Phillips, Mr Leslight's father and Mr Kola of the plaintiff on 1 October 2013. Mr Leslight gave evidence that the bank was not happy with the estimate prepared by Mr Phillips for the remaining work to be conducted as the projections were too expensive: T544.47. He claimed that the bank representative stated that the site was "disgraceful" and recommended considering a new builder: T546.13. Mr Leslight gave evidence that he retained his expert Mr Anderson to review the work on the site soon after the meeting although Mr Leslight could not recall the exact time when he requested Mr Anderson to do that. Mr Leslight said that Mr Anderson was a client of his and he understood him to be a good builder following research which he had conducted: T549-550. He said Mr Anderson provided him a paper report at the time: T549.34: Mr Leslight said he no longer had a copy of the report which Mr Anderson provided to him. He rejected the suggestion that he wished someone who he knew to prepare a report in the way that he wanted it prepared: T552.14.
Cross-examination of Mr Leslight then turned to the question of what occurred following the meeting between Mr Phillips, Mr Leslight and others with the representative of NAB, Mr Harris, on 1 October 2013 at the site. Mr Leslight confirmed that he continued to build the dwellings at the site as the site was left by the plaintiff: T555.30. He said he engaged Micrah Projects to undertake the construction work and no work was completed by anyone else. Mr Leslight said he had a contract with Micrah Projects being a written building contract on a cost plus basis but could not recall the percentage amount of the cost plus basis charge. He stated that Micrah Projects started in November 2011 and the contract was signed on 1 November 2013: T556. Mr Leslight said he began speaking to representatives of Micrah about one-two weeks approximately after the meeting with Mr Harris of the NAB: T556.43. Mr Leslight said he began speaking to Micrah Projects as he had been advised by NAB to find another builder. He said that he spoke to multiple builders before choosing Micrah Projects.
Mr Leslight was then cross-examined in relation to various emails particularly from Mr Phillips concerning the project after the 1 October 2013 meeting. Mr Leslight was taken to an email from Mr Phillips dated 2 October 2013 (Volume 2 of 4 behind Tab 24) in which Mr Phillips informed Mr Leslight of actions he was taking while the decision as to funding was taken. Mr Leslight said he did not recall receiving the email: T558.34, T558.47. Mr Leslight then stated that he had not received the email: T560.33.
Mr Leslight said that the last day Geneville was on the site was 11 October 2013 (T561.40). He could not recall the last payment he had made to Geneville before their departure: T561.43. He was taken to an email from Mr Phillips dated 15 October 2013 (Volume 2 of 4 behind Tab 25) where Mr Phillips gave Mr Leslight an update regarding the work that Geneville was doing while waiting for the decision of the bank. Again, Mr Leslight said that he did not recall receiving the email and then stated that he did not receive it: T562.5 and T562.23. Mr Leslight denied that if he had received the email he would have known it was in relation to the Sandridge Street Bondi site, despite him having no other projects with Mr Phillips at the time: T562.34; T563.3. In my view, Mr Leslight was evasive in relation to this part of the cross-examination and it would have been clear to him that the email related to the Sandridge Street site, despite it not being in the subject matter. Factors pointing to this are: 1. That this was the only project Mr Leslight had with Mr Phillips at the time; 2. The reference to Pak appears to be a reference to the structural engineer Mr Pak Liu; 3. The subject matter is "daily report" and Mr Phillips was making regular reports to Mr Leslight; 4. The email refers to the work being done "while waiting for the bank". Mr Phillips believed he was waiting for the bank decision at the time.
Although Mr Leslight states that he did not receive the email, I find that he did receive it and he was avoiding having to deal with Mr Phillips in relation to the plaintiff's ongoing role in the project. There is no reason suggested as to why he would not have received the email. His change in evidence from saying that he did not recall receiving the email to denying receiving the email, was also not convincing.
Further, in relation to emails alleged not to have been received by Mr Leslight (or which he does not recall receiving), s 161 of the Evidence Act 1995 (NSW) would apply so that it is presumed that the electronic communications were sent by Mr Phillips and received by Mr Leslight. The issue is whether there is evidence sufficient to raise doubt about the presumption. In my view there is not. Mr Leslight did not appear to have a good recollection in relation to many emails. His evidence was that his family company records were wiped accidentally so he does not have his own records to compare them with. Further, overall Mr Leslight's recollection seems to be much less reliable than that of Mr Phillips.
Mr Leslight was then taken to an email from Mr Phillips dated 17 October 2013 (Volume 2 of 4 behind Tab 26) which forwarded an invoice from Acoustic Dynamics Pty Ltd relating to vibration monitoring. Again, Mr Leslight said that he did not receive the email. He could not recall whether he ever paid for acoustic monitoring on the site.
Mr Leslight was cross-examined in relation to an alleged meeting at the premises of Regatta Motor Repairs said to have occurred on 29 October 2013 and at which Mr Phillips, Mr Kola, Mr Leslight and his father were present. Mr Leslight denied that a meeting occurred on that date as alleged: T567.12. He said it would be inaccurate if his father said that a meeting did occur at Regatta involving Mr Phillips and himself: T561. Whilst initially saying that he never recalled the meeting (T561.23), Mr Leslight then said that he misunderstood the questioning and he did recall meetings but he could not recall a meeting after the commencement of works by the plaintiff on site and particularly one in 2013: T568.40. He then seemed to equivocate in his evidence on the issue: T568.47; T569.5. He denied that there was any meeting between Mr Phillips, himself and his father in relation to the payment of the plaintiff's invoices: T569.31. He also denied that there had been a number of attempts by Mr Phillips to contact him, including by telephone: T570.43. Mr Phillips said that he was shocked when Geneville left the site and there had been no contact with him: T570.4. He agreed that it was convenient for him not to contact Mr Phillips as he had left the site: T571.42.
Mr Leslight confirmed that he had received four invoices from Geneville and that he had never complained in relation to the amounts of the invoices or the terms of the invoices. He said he could not recall complaining to Geneville in relation to the quality of work of the plaintiff performed at the site or the speed of that work: T572.1-572.25.
Mr Leslight said that he did not recall an email to him from Mr Phillips dated 20 November 2013 (Volume 2 of 4 behind Tab 17). I note that the email chain includes an email to Mr Leslight dated 19 November 2013 which is addressed to both Mr Leslight and his father (although there may be an issue as to the accuracy of the father's email address). The fact that it is addressed to both of them is consistent with there being a recent meeting in October 2013 at which both attended which is in accordance with the evidence of Mr Phillips but contrary to the evidence of Mr Leslight Jr, the defendant.
Mr Leslight was then taken to an email chain which included an email from Mr Phillips to him dated 21 November at 2013. That email included: "As you have not paid yet another of our tradesmen, I will be paying them & invoicing you for the amount. .… All of our previous invoices are overdue for payment & will be updated too at the end of the month. It would be nice to know what's going on".
Mr Leslight said that he recalled receiving this email and accepted that the email stated that Geneville would be paying a tradesman at the site. Mr Leslight replied to Mr Phillips' email as follows: "We are trying to resolve the situation we are in. I will make contact with you Monday." By that stage, Micrah Projects had commenced on site according to Mr Leslight. To that extent Mr Leslight's email is misleading to Mr Phillips. Mr Leslight gave evidence that he did not understand the reference in the email to "previous invoices are overdue for payment": T575.20. I reject that evidence. Mr Leslight conceded that he did not contact Mr Phillips to find out what he meant by the reference in the email to invoices: T575.34. He said he could not recall contacting Mr Phillips after the receipt of the email or even contacting him on Monday as indicated in his own email. He said he did not ask for the invoices referred to and said that he had a lot on his shoulders at the time with the new builder: T576.6. He denied that he knew what Mr Phillips was talking about in relation to the invoices: T574.8; T575.17-.39.
Mr Leslight was cross-examined in relation to his finances for the project. He agreed that he relied on moneys from his parents as part of the funding to pay for the project. He could not recall the percentage of funds from his parents. However, he stated that he was not going to his parents for all of the payments that were necessary although they were the source for a number of cash payments at his request. He agreed that his father was aware of the expenses for the project. He agreed that the moneys provided by the parents were a loan to him via a verbal agreement. He accepted that he needed money from his parents as part of the project.
Mr Leslight was taken to that part of his affidavit sworn 24 October 2017 which responded to Mr Phillips' affidavit sworn 29 May 2017 which stated that at no time during the completion of the works did Mr Leslight make any complaint of defective or incomplete works to him or to any other person to his knowledge. In paragraph 21 of his 24 October 2017 affidavit, Mr Leslight said that he is not a professional in the area of construction and building and it was only when a building expert inspected the site that the major concerns with the work were brought to his attention. Mr Leslight accepted that there were various experts on site during the course of the works who included Mr Pak Liu, structural engineer, and Mr Adler, geotechnical engineer. He agreed that they all appeared satisfied with the work completed by the plaintiff but then qualified it by saying in the "small areas" which they looked at: T581.48. Mr Leslight said that the engineers only looked at "very minor works": T581.30-.48 and T583.6. Mr Leslight was then taken to a number of engineering reports signed by Mr Liu of JDT designs who certified that certain works completed by the plaintiff were "satisfactory": see Volume 2 of 4 behind Tab 21. Mr Leslight accepted that Mr Liu was on site for numerous meetings in the course of the works at the site. He accepted that Mr Liu never raised any issues with the plaintiff's work on the site but said that he did not understand that they were looking at all of the work completed by the plaintiff: T583.28. The basis for this understanding was not clarified.
Mr Leslight was then taken to paragraph 11 of the defendant's Cross-Claim that asserted that unnecessary work was performed by the plaintiff without the request or direction of the defendant. The works referred to were: "six steel tube aligned concrete piers were poured in a row running north-south in front of the pool area" which "offered no benefit to the finished structure". Mr Leslight accepted that Mr Liu, the structural engineer, was directed by him: T585.50. He was also taken to Mr Phillips' diary entry for 13 May 2013 which recorded: "Had a meeting with Pak at 10:30am in regard to: - engineers specifications for concrete/steelworks at the rear & sides of the pool. - size of footing. - piering to the underside of slab beside pool."
Mr Leslight accepted that the reference to the piers in paragraph 11 to the Cross-Claim involved the piering to the underside of the slab beside the pool. He said he did not recall Mr Pak Liu visiting the site to discuss the piers: T585.47; T586.22.
Mr Leslight was cross-examined in relation to the report numbered 4453 from Mr Liu (Volume 2 of 3 of the Cross-Claim behind Tab 16), which indicated that the formwork in relation to the piering was satisfactory. Mr Leslight did not accept that "formed" related to the positioning of the piers. However, the certification from Mr Liu appeared to cover the works in relation to the piers on the north edge of the pool. Again, Mr Leslight agreed that he notified Mr Liu when he needed to come to the site to approve or advise on works. He agreed that he directed the works relating to the piers and knew that they needed to be done: T589.21; T590.
Mr Leslight was cross-examined in relation to the loss of his email records following the computer records of Mr Leslight's family company being transferred from being recorded on the hard drive to a "cloud"-based system. He denied that he wiped the records off the computer himself: T597.1.

Credibility of Mr Phillips and Mr Leslight

There is a significant factual dispute between the plaintiff and the defendant concerning many aspects of the business and contractual relationship between them. In particular, there is substantially inconsistent evidence between Mr Phillips of the plaintiff on the one hand and Mr Leslight, the defendant, on the other.
I have had the advantage of watching both witnesses being cross-examined in detail over different issues for an extensive period. Mr Leslight was cross-examined over a number of days by counsel for the plaintiff.
The issues in dispute require me to make a decision as to whether I accept the evidence of Mr Phillips or I accept the evidence of Mr Leslight or I accept aspects of the evidence of each or I reject both. Submissions were made on this issue by both parties which I have considered and take into account.
In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [31], the majority of the High Court stated as follows: "[31] Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical."
Where a court has to make factual findings on disputed evidence, a court may accept all or part only of a particular witness' evidence. It can do so even if the court finds that a witness is lying as to part of the evidence which has been given by the witness: Cubillo v Commonwealth (No 2) [2000] FCA 1084; (2000) 103 FCR 1 at [18]-[123]; Croucher v Cachia [2016] NSWCA 132 at [129].
I will first make some general comments about each witness.
Mr Phillips impressed the Court as an honest, straightforward, uncomplicated and careful witness. He made concessions on occasions where appropriate. He generally confined his evidence to answering the questions he was asked. In some instances, Mr Phillips gave evidence and was challenged and initially appeared to be confused in his evidence. However, when given time and an opportunity to consider the relevant materials, he was generally able to give clear and cogent explanations. I formed the opinion that he was usually very careful in relation to his preparation of documentation concerning the Site including the invoices and his job diary. There appeared to be a few minor errors in the preparation of the delay document, Exhibit A, relating to rain days which I will consider below. I also formed the view that Mr Phillips had a fairly good recollection in relation to most of the events concerning the Site including in relation to the alleged agreement on 20 March 2012 on cost plus terms.
The impression I formed in relation to Mr Phillips needs to be compared with that formed by me in relation to Mr Leslight. I did not form the view that Mr Brett Leslight, the defendant, had a good recollection of events in the period 2010-2013, including in relation to the terms of the contract reached. Mr Leslight gave many answers to the effect that he did not recall events or emails or matters relating to the Site. On occasions he said in his oral evidence that he would want to "confirm" matters before agreeing to them. He appeared to be either hesitant or unwilling to accept that he received any email from Mr Phillips unless there was, in an email chain, an email from him responding to it.
I have set out in my summary of Mr Leslight's evidence, above, my conclusions in relation to many aspects of his evidence. On occasions, I found Mr Leslight to be evasive in his evidence and unwilling to make concessions where these were clearly warranted on contemporaneous documents before him. Often, extensive cross-examination was required in order to obtain agreement or a concession from Mr Leslight. On other occasions, he altered his evidence when confronted with inconsistent documentary evidence including in his affidavits.
I found Mr Leslight's evidence in relation to the events of October-November 2013 to be particularly difficult to accept. He appeared unwilling to concede the receipt of emails from Mr Phillips unless it was clear that he responded to the emails. It seems clear to me that he retained Micrah Projects to perform work on the Site when he understood Mr Phillips was continuing to take steps in relation to matters concerning the Site. He was not open, frank and transparent in his dealings with Mr Phillips or the plaintiff in this period.
I also found Mr Leslight's evidence in relation to the terms of the 20 March 2012 agreement to be very confusing, difficult to understand and inconsistent, particularly in the light of paragraph 4 of the Defence. He seemed to have a very poor recollection in relation to relevant discussions with Mr Phillips on this topic.
Overall, I found Mr Leslight to be an unreliable and unsatisfactory witness. His changes in his evidence and his rejection of paragraph 4 of his Defence to the Further Amended Statement of Claim, which was verified by him, raise serious questions in relation to his evidence.
In general terms, I found Mr Phillips to be a far more straightforward and reliable witness. I prefer Mr Phillips' evidence to that of Mr Brett Leslight, unless the former's evidence is shown to be incorrect by independent evidence, particularly contemporaneous evidence. I accept Mr Phillips' evidence that he prepared his diary which is in Volume 1 behind Tab 1 of the exhibit to his 29 May 2017 affidavit, either on a daily basis or within a very short period of time of the events in question. The diary appears to me to be carefully maintained. It is true that there is no reference to the 20 March 2012 agreement conversation in the diary. However, the diary appears to set out in detail matters relating to the ongoing work at the Site. Having regard to all the evidence, I accept that the diary was carefully maintained and that it accurately records the events it purports to record.
My conclusion in relation to the reliability of the evidence of Mr Phillips compared to that of Mr Brett Leslight, the defendant, assists me in my determination of a number of factual issues in the proceedings. I will deal with some of these factual findings further below.

Evidence of Mr Barry Fred Leslight

The defendant read an affidavit of Mr Barry Leslight sworn 8 July 2016.
Mr Barry Leslight is Mr Brett Leslight's father. Mr Barry Leslight is one of the directors of BF & R Leslight Pty Ltd which trades under the name Regatta Motor Body Repairs. Mr Brett Leslight, the defendant, is the General Manager of that business.
In his affidavit, Mr Barry Leslight gave evidence that in 2009 or 2010 BF & R Leslight Pty Ltd had the plaintiff undertake alterations to its business premises in Spencer Street in Five Dock in Sydney. Mr Barry Leslight states that after works were completed, he received an invoice with supporting documentation but noted that it was incorrect because there was doubling up on items in the invoice. Mr Barry Leslight was informed by Mr Phillips that he would go over the invoice which he did. Mr Phillips then apologised for the discrepancies in the invoice, issued a new invoice with the correct figure which was accepted and payment was made.
Mr Barry Leslight denies that he met with Mr Phillips and Mr Kola (an employee of the plaintiff) on 29 October 2013 and further denies that he was provided with a summary of invoices. Mr Barry Leslight also denied that he said to Mr Phillips and Mr Kola that they would get back to them with a cheque for payment for the invoices.
In cross-examination, Mr Leslight was asked numerous questions about the work performed by the plaintiff for his company in 2009 or 2010. Mr Leslight said that his son Brett engaged the plaintiff in consultation with him: T180.33; T180.50. This is contrary to the defendant's evidence: T268.31; T268.44. Mr Leslight said that as far as he could recall, Mr Phillips himself undertook the construction work for the plaintiff and did not engage subcontractors but accepted that this occurred seven to eight years ago. He said he rarely had conversations with Mr Phillips at the time and that most of these occurred with Brett. He could not recall the value of the job. He also could not recall whether there was a contract in place but he assumes there was. He agreed he authorised Brett to enter into contracts and assumed the defendant entered into the contract with the plaintiff in relation to the work: T182.22-.43. This is also contrary to the defendant's oral evidence: T269. Mr Leslight senior said he was not aware of either the terms of engagement of the plaintiff or the price for which it was agreed that the work would be done. Although Mr Leslight said he was aware of the term "cost plus", he could not recall whether that term was used in any discussions with Mr Phillips at the time.
Mr Leslight disagreed that he was satisfied with the work that was performed by the plaintiff. He said the work was not completed and that Mr Phillips had said that he would come back to line the doors but this never occurred. When it was put to Mr Leslight that he could not determine whether the plaintiff had finished the job because he did not know the basis or terms of the engagement of the plaintiff, Mr Leslight replied that he knew what was being done and part was still not completed. Mr Leslight gave evidence that Mr Phillips said to him words to the effect: "I will come back and do the work". However, he did not return to do so. He said he had a discussion with Mr Phillips about this work. He disagreed that there was no work for Mr Phillips to come back to complete. Whilst stating that he called Mr Phillips, he did not recall how many times he called him to complete the work.
When asked why he paid for the work Mr Leslight said that he assumed because some work had been completed. He said he assumed that the plaintiff had finished the work in a timely fashion although the work was not completed. He said he only remembered bits and pieces in relation to the matter. When asked why in paragraph 3 of his affidavit Mr Leslight used the words "After works were completed…" if he claimed that the works had not been completed, he could not provide an answer other than to say that he saw the uncompleted works each day. When asked why he did not mention the plaintiff failing to complete the work in his affidavit, he said that he had forgotten to include it and it did not involve a great deal of money.
Mr Leslight was then taken to paragraphs 3 and 4 of his affidavit in relation to alleged doubling up in the plaintiff's invoice. He agreed that Mr Phillips corrected the mistake immediately when he was notified of it.
Mr Leslight was then taken to paragraph 6 of his affidavit in which he denied meeting with Mr Phillips and Mr Kola on 29 October 2013 as Mr Phillips claims. After some cross-examination, Mr Leslight agreed that a meeting occurred but not on the date specified. He said a meeting occurred with Mr Phillips and Mr Kola in 2013, possibly in the first quarter of the year: T189.22; T189.31; T191.39. He recalled attending a few meetings with Mr Phillips: T189.38. He also agreed that the meeting was at the premises of Regatta Motor Body Repairs and Mr Phillips, Mr Kola, Brett Leslight, Mrs Leslight and he attended the meeting. Mr Leslight said the meeting was about the project at Bondi and Mr Kola offered to try to obtain another facility in order to complete the project. Mr Kola stated that his wife worked for a bank and believed that she could arrange a facility and therefore they should change lenders to obtain money for the construction. Mr Leslight later stated that he said at the meeting that he did not want to go that way and he was not happy with changing lenders: T198.11.
Mr Leslight was then asked some questions in relation to the facility which was obtained for the construction of the Bondi premises. Initially, he said that he assumed Brett was the borrower (T193.8) but after some cross-examination he eventually said that he thought the borrowers were he and his wife and Brett and his wife, Stephanie (T193.28). The lender was NAB. He denied that he was in control of the money for the project and said that Brett and his wife were in control of drawdowns with them being the primary decision-makers although he had a veto. He said that he did not see every payment from the facility and that his wife handled the payments with Brett although he had a degree of oversight in discussions with his wife and Brett.
Mr Leslight was vague in relation to when the facility commenced but he said it ended a few months prior to giving evidence. He said the facility was used to purchase the site by Brett.
In relation to invoices for the construction project, Mr Leslight said that he saw them as they were emailed to him and he was updated in relation to the project from time to time. He could not recall if he ever refused to pay an invoice. He said he had noted some degree of progress on the site as he went to look at it occasionally.
When asked whether he was provided with a summary of the invoices at the meeting by Mr Phillips which he recalled, Mr Leslight said that he remembered that "vaguely" and later said he had a "very vague recollection" : T198.43. However, he said he did not recall any conversations in relation to that topic: T199.2. He said he met Mr Phillips on two or three occasions in relation to the project at the premises of Regatta Motor Body Repairs and said that perhaps his wife was not present at those meetings
Mr Leslight said that he attended one or two meetings with his son Brett and Mr Harris, the bank manager. He agreed that they met on site on one occasion. He gave evidence that he did not recall discussions with Mr Phillips in relation to the need for drawings or in relation to the payment of invoices: T203.34. He said the payment of the plaintiff's invoices was handled by his wife: T204.15. He could not recall the details of the facility limit but he understood it to be "well over $3 million".
Mr Leslight was taken to Annexures A and E to Brett Leslight's affidavit dated 18 August 2016, which appears to be a statement for a bank account of BF & R Leslight Pty Ltd. Mr Leslight said he did not recognise these statements. He said he did not regularly review statements although his wife did. He said the handwritten notations on them were not his nor were the descriptions on the statements.
Mr Leslight appeared to me to have a very poor recollection in relation to discussions concerning the construction work at Bondi. Although in paragraph 6 of his affidavit, he denied meeting with Mr Phillips and Mr Kola on 29 October 2013 he accepted that he had some recollection that a meeting had occurred earlier in 2013. In the paragraph he denies that he was provided with a summary of invoices. However, in his oral evidence he said that he had a very vague recollection of being provided with a summary of the invoices by Mr Phillips at the meeting in the first quarter of 2013: T198.48.
Having regard to Mr Leslight's apparent extremely poor recollection, I consider that little weight can be given to his evidence except where it is confirmed by other reliable evidence.
In relation to the assertion that the plaintiff still had to complete work at the premises of Regatta Motor Body Repairs, this does not appear to me to be a significant matter. However, I note that in paragraph 3 of his affidavit Mr Leslight uses the words "after works were completed", which suggests that the construction works by the plaintiff were in fact completed. His failure to refer to the omission to complete the works in his affidavit also raises doubts in relation to this evidence. In the end, this issue does not appear to be a significant one.

Evidence of Mrs R Leslight

The defendant read the affidavit of Mrs Rae Leslight sworn 24 October 2017. Mrs Leslight is the mother of Brett Leslight and the wife of Barry Leslight. Mrs Leslight in her affidavit denies meeting with Mr Phillips or Mr Kola in October 2013.
Mrs Leslight agreed that she was a director of BF & R Leslight Pty Ltd and that the company had engaged the plaintiff to undertake renovation works to its building. She said she was not involved in the decision to engage the plaintiff to do the work. She also said that she gave no directions to Mr Phillips in relation to the project. Mrs Leslight also asserts that some work was not completed by Mr Phillips. She said she based that conclusion on looking at the work which had been undertaken. However, she said she was not aware of the directions made to Mr Phillips. She said she was merely directed to pay his account. Mrs Leslight said that she handled the accounts for the business.
Mrs Leslight stated that when the invoice was presented, her husband showed her a number of the double ups in charges in the invoice from the plaintiff. She said she only saw these when they were pointed out to her by her husband. She did not recall the items in which there were double ups or the amount. She agreed that the invoice was revised and she presumed it was paid in full.
In relation to the meeting in 2013, Mrs Leslight said that she was never included in any meeting with Mr Phillips or Mr Kola. She said she was sitting in the reception area of the business. She stated that she did know that Mr Phillips was undertaking work on the Bondi project.
Mrs Leslight was then asked questions in relation to the loan for the Bondi project. She agreed that there was a facility in place and that the borrowers were her husband and herself and her son Brett and his wife. She did not recall the amount of the loan but believed it was not more than $4 million (T215.30). Later, she said that although she was not certain she did not believe it was more than $1 million: T222.35. This was despite her husband giving evidence that it was well over $3 million (T205.33). She said she was not responsible for approving drawdowns on the loan and the only person responsible was her son Brett. Again, this is inconsistent with Mr Barry Leslight's evidence. She said she had no involvement in the functioning of the facility and did not monitor it or know what the money was used for. She said Brett was in control of the account and he was the only decision maker following the advice of the builder. She denied ever seeing the invoicing for the Bondi job although she was in control of the finances of the business of BF & R Leslight Pty Ltd.
Mrs Leslight was taken to Annexure A of Brett Leslight's 18 August 2016 affidavit. She identified the document as being a statement from the super fund for BF & R Leslight Pty Ltd. She said that she was the main person in control of the superannuation account and that the payments listed in Annexure A were amounts advanced to her son in relation to the construction at the Site as a loan. When payments were requested, she made the payments to the persons who were owed money. She said that she also included the descriptions of the payments. She said that she did not seek further information from Brett but relied on his statement that the payment of money should be made. She did receive the invoice to which the payment was to be made.
She said the understanding between her and her husband and Brett was that the money available for the construction would be whatever was in the company super fund. She agreed that there were two sources of funds being the NAB facility and loans made to Brett from the super fund. She said the purpose of the NAB facility was to complete the construction work. The purpose of using the money was to assist her son Brett and his wife to obtain a home. Mrs Leslight denied, contrary to her husband's evidence, that the facility was used to purchase the property. When told that Mr Leslight's evidence was that the facility was more than $3 million, Mrs Leslight said she was not aware of the limit.
Mrs Leslight was asked whether she had any discussions with her son about him having trouble financing the construction project. She agreed that she did have some discussions to this effect: T225.3. She said that he said that he did not have any more money for the construction. When asked when this occurred, Mrs Leslight said that it was either after or during the excavation at the property. She could not give a date range for the discussion or confirm that it was in mid to late 2012.
Mr Leslight had said that Mrs Leslight was in charge of the finances for the business. She confirmed that. Having regard to that evidence, Mrs Leslight seemed to have a remarkable lack of knowledge about either the transactions from the superannuation fund involving a loan to her son or the terms or use of the facility with the NAB.
A number of aspects of her evidence were inconsistent with her husband's evidence in relation to the amount of the NAB facility, whether it was used to purchase the Bondi property and who was responsible for the drawdowns from the loan.
Mrs Leslight's evidence that the plaintiff did not complete the work at the premises of the Regatta business should be treated with some caution as she was not involved in the arrangements with Mr Phillips or in giving him directions.
Mrs Leslight's confirmation that she had discussions with her son Brett about him having trouble financing the construction project as he did not have any more money are significant, as they reinforce to some extent the plaintiff's assertion that delays were caused to the project by the absence of funding for the defendant.
Mrs Leslight appeared to have a reasonably poor recollection or knowledge of many matters relating to the facility and the funding to her son where it would be expected that she would have greater knowledge. In my view, some caution should be exercised in accepting her evidence because of the limitations in her recollection, understanding and knowledge.

The submissions of the parties

The parties made very detailed written and oral submissions on both the Statement of Claim and the Cross-Claim.
The plaintiff submitted, in general summary, as follows: 1. The defendant, Mr Leslight, was the owner builder in the project. The overall management of the project was clearly and unequivocally in the hands of Mr Leslight. The plaintiff, Geneville, was a conduit under the direction of Mr Leslight and was the builder on the project (written submissions paragraph 13); 2. It is uncontroversial on the pleadings that there was a binding agreement formed between the parties for Geneville to provide services to Mr Leslight in relation to the construction project at the site. It is also agreed that the agreement was formed on 20 March 2012 (written submissions paragraph 14); 3. Although there was some dispute as to the terms, it is clear that the terms agreed were that Geneville would carry out works and services in accordance with the specifications and drawings provided by Mr Leslight from time to time and any request or direction from Mr Leslight. Mr Leslight agreed to pay Geneville on a cost plus basis for services provided, being the direct cost of those services which included that a fee would be payable to Geneville by Mr Leslight at 15% of the costs, that progressive claims would be made by Geneville for the services and that Mr Leslight would pay those claims within seven days. Geneville was to provide the services as the builder and agent for Mr Leslight. This is clear from the conduct of the parties and the telephone conversations and emails which occurred on 20 March 2012 (written submissions paragraph 14); 4. The agreement between the parties was not, as the defendant asserts, merely for the plaintiff to provide services relating to excavation. The acquiescence or agreement of Mr Leslight to all services undertaken by Geneville in relation to the project without complaint as to scope, and the further and ongoing provision of detailed drawings and direction, permit the safe inference to be drawn that Geneville's actions were always with the agreement, knowledge and consent of Mr Leslight. Accordingly, payment for works pursuant to the terms of the agreement with a plus cost fee of 15% is prima facie payable by Mr Leslight to Geneville (written submissions paragraph 15); 5. On the whole of the evidence, Mr Leslight's claim in his affidavit that he was unaware of the agreed 15% charge until receipt of the first email should be rejected. He never complained of the 15% addition when receiving invoices and his oral evidence was inconsistent on the issue (written submissions paragraph 16); 6. The terms and acceptance of the agreement alleged by Geneville by Mr Leslight are established on the whole of the evidence including as to the knowledge and conduct of Mr Leslight. It is confirmed that acceptance and acquiescence of both the existence of the agreement and the terms of the agreement are such that formation of a contract on the terms asserted by Geneville is established. If there is any doubt, it is confirmed by the subsequent conduct of Mr Phillips and Mr Leslight (written submissions paragraphs 17-18); 7. The job diary prepared by Mr Phillips should be regarded as accurate and reliable including in relation to issues such as delays (written submissions paragraphs 20-22); 8. Mr Leslight provided to Mr Phillips on a number of occasions undeveloped, changing and incomplete plans and structural drawings. The facts establish the absence of proper plans for the entire period of engagement of Geneville. The delays in design caused extensive delay to Geneville in its work and deprived it of the ability to determine timeframes for completion and proper budgets (written submissions paragraphs 27-32); 9. The discovery of unanticipated late subsurface site conditions presented further delays to the forward progression of the works without any fault of Geneville. This was due to the failure of Mr Leslight to have obtained and considered a proper investigative geotechnical report for the site prior to the commencement of the site works, particularly excavation works. The limited report prepared by Michael Adler and Associates did not properly consider the subsurface site conditions. The need to negotiate with neighbours also caused delays (written submissions paragraphs 33-37); 10. Throughout the project, there were substantial delays and non-payment of invoices by Mr Leslight (written submissions paragraphs 38-41, 44-45 and 48-51). Mr Phillips correctly stated in his report to Mr Leslight by email on 23 September 2013 that the three causes of delay since commencement of the project were neighbour issues, documentation issues and funding issues. The report also clearly establishes the plaintiff's expectation and understanding that its work on the project as builder would be ongoing (paragraphs 52-56); 11. Having regard to the entirety of Mr Leslight's evidence, particularly his oral evidence, Mr Leslight should be regarded as evasive, possessing a selective memory, inconsistent and a low weight should be afforded to his evidence. In particular, Mr Leslight clearly established a poor memory in relation to relevant events. Mr Leslight made numerous incredible claims or denials in his oral evidence. He also denied in his oral evidence his pleaded case in his Defence (paragraphs 57-64). 12. The submissions of the plaintiff set out many examples said to support the submission. It was submitted that Mr Leslight and his evidence ought to be rejected or, alternatively, afforded little or no weight; 13. The period during which Geneville was actively carrying out works on the site was plagued with delays to the proper progression of construction, none of which was attributable to Geneville but the delays were attributable to the mismanagement of Mr Leslight as owner builder and principal of the project or due to rain. The construction, excavation and supervision methodology adopted by Geneville in the course of its works for Mr Leslight, caused no delay, as found by the expert Referee and adopted by the court. There is substantial evidence as to delays caused by Mr Leslight (written submissions paragraphs 65-71). The delays are subject to the application of a quantum meruit in favour of Geneville as determined by the expert Ms Grey (paragraphs 72-73); 14. There can be no doubt that the agreement between the parties contemplated Geneville's services for the entirety of the build. It should be found that Mr Leslight had engaged Geneville to undertake the entirety of the building works as shown in the plans as they were progressively provided. Geneville was not merely engaged as a project manager and limited to the excavation work (written submissions paragraph 74); 15. The contract claim as made by the plaintiff and as found by the expert Referee is established. Subtracting the amounts paid by Mr Leslight, the total amount owing contractually is $370,806.35 plus interest of 20% per annum (written submissions paragraph 75); 16. The contract is enforceable and there is no breach of s 10 of the Act (reply submissions dated 27 March 2019 paragraphs 29-46); 17. If the court finds that the contract is unenforceable because of ss 7 and 10 of the Act, the plaintiff is entitled to a quantum meruit (written submissions paragraph 76); 18. The quantum meruit claim is clearly established on the evidence. Mr Leslight received a benefit, the benefit was received at the plaintiff's expense, there was a request or acceptance of the benefit and it is unconscionable for Mr Leslight to retain the benefit. It should be found that there was either an express or implied request from Mr Leslight for the benefits provided by Geneville (written submissions paragraphs 77-99). Taking into account the amount received from Mr Leslight, but allowing a quantum meruit for the delays as determined by Ms Grey and as adopted by the court, the amount payable to Geneville as a quantum meruit is $650,149.27 plus interest. This was varied in the reply submissions dated 27 March 2019 to $623,717.67 plus interest; 19. Accordingly, judgment should be entered for the plaintiff on the Statement of Claim. The Cross-Claim should be dismissed.
The defendant submitted, in general summary, as follows: 1. The plaintiff's primary pleaded case is in contract. The plaintiff cannot bring this claim as the requirements of s 7 of the Act were not complied with and therefore under s 10 of the Act the plaintiff is not entitled to damages for breach of the contract. The plaintiff's only claim must be in quantum meruit: written submissions paragraphs 2 and 12; 2. The parties agree that an agreement was made on 20 March 2012. Each party has a different view as to the terms and scope of the contract made; 3. The agreed role of the plaintiff was as an advisor as project manager - the plaintiff agreed to provide project management services as required. It did not simply sit back and wait for directions from the defendant. In undertaking project management services, it was agreed that the plaintiff would manage the coordination and supervision of the excavation works, advise the defendant to obtain the necessary approvals, agree the required compensation payable to the neighbour ahead of appointing the contractor and advise in relation to a detailed geotechnical report prior to commencing excavation. The plaintiff failed to provide adequate coordination and supervision as it was obliged to do: written submissions paragraph 5; 4. The evidence establishes Mr Leslight accepted a project management fee of 15%: written submissions paragraph 7; 5. The scope of the agreement reached was only for the plaintiff to perform services up to the completion of the excavation with its role then to be reviewed. This is confirmed by the fact that Mr Leslight did not send to the plaintiff "full and final completion plans" for the project. An experienced builder would not accept an obligation to perform building services without final plans: written submissions paragraph 9; 6. The scope of the agreement reached is relevant to two issues: the works that were contemplated to be carried out under the contract and whether the contracted works had in fact been completed. This is relevant to whether the plaintiff was entitled to terminate and the entitlement under a quantum meruit; 7. The excavation works were completed; 8. The plaintiff was a person contracted to do "residential building work"; the contract did not comply with ss 7 and 10 of the Act; and the contract was unenforceable and could not be relied on for an entitlement to damages or any other remedy for breach of contract; 9. The plaintiff may recover in restitution for the fair value of the work done under the unenforceable contract: written submissions paragraph 15; 10. The representation made by Mr Phillips on 11 June 2012 shows that work was only to be billed from the time Mr Leslight obtained the construction certificate which was 29 June 2012: written submissions paragraph 16; 11. The end of the work performed was 30 September 2013, alternatively 9 October 2013; 12. The amount allowed by the Referee between 30 June 2012 and 10 October 2013 was $549,763.64: written submissions paragraph 18; 13. From this sum must be deducted the amount paid by the defendant. This should be found to be $241,465.15, the amount claimed by the expert Mr Madden: written submissions paragraphs 19-20; 14. In relation to the question of delay, when one looks at the agreement between the parties and the agreed roles of the parties there is no delay for which the defendant is responsible. In fact, having regard to the plaintiff's project management role, it is responsible for delays relating to the neighbour dispute and the unknown ground conditions. The cashflow delay argument should also be rejected having regard to Mr Leslight's evidence: written submissions paragraphs 21-37.
The parties also made extensive written submissions on the Cross-Claim which I will consider below.

Findings of fact

Having regard to the evidence, my views of the witnesses and the submissions which were made by the parties, I make the following findings of fact. These findings should be read in conjunction with the findings and determinations which I have made above including in the course of my analysis of the evidence given by the various lay witnesses: 1. The plaintiff, Geneville Constructions Pty Ltd, was at all relevant times a corporation in the business of the construction of residential dwellings, including the project management of the construction of residential dwellings. The director of Geneville was Mr Gene Phillips who at all relevant times was a licensed builder; 2. The defendant, Mr Brett Leslight, works in the motor vehicle industry. Mr Leslight was the owner of the Property in question at Sandridge Street in Bondi in Sydney. He proposed to demolish the building on that Property and to replace it with a multilevel newly constructed duplex development; 3. At some time in 2009, an agreement was reached between Mr Phillips on behalf of the plaintiff and BF & R Leslight Pty Ltd for the plaintiff to undertake minor construction works at the workshop of Regatta Motor Body Repairs in Spencer Street in Five Dock in Sydney. There is inconsistent evidence as to whether the contract was entered into by Mr Barry Leslight or the defendant Mr Brett Leslight on behalf of BF & R Leslight Pty Ltd with the plaintiff. In the light of all of the evidence, I prefer Mr Barry Leslight's evidence that it was the defendant who initially engaged the plaintiff to undertake the works on behalf of BF & R Leslight Pty Ltd. He seemed to have a better recollection than the defendant on this issue. An issue was raised on the evidence whether the plaintiff completed the works which were agreed. The defendant and Mr and Mrs Leslight Senior all say that the plaintiff did not complete the works even though payment was made for them and Mr Barry Leslight says in his affidavit that the payment was made after works were completed. Neither Mr Leslight Senior nor Mrs Leslight refers to any problem with the works in their affidavits. The evidence is not sufficient before me to find that the plaintiff did not complete the works contracted. That is partly because there is no evidence as to the terms of the agreement entered into in relation to the works. However, even if I am wrong as to that issue, whatever was outstanding for the plaintiff to complete must have been minor because the defendant was sufficiently impressed with Mr Phillips to later approach Mr Phillips on behalf of the plaintiff to engage in works at the Site; 4. As indicated above, I prefer the evidence of Mr Phillips where it is inconsistent with that of the defendant except where there is clear contemporaneous evidence to the contrary. I refer to the reasons which I have given above. I also found Ms Phillips to be an honest and careful witness and I accept her evidence; 5. I am satisfied that Mr Phillips prepared his job diary which is behind Tab 1 in Volume 1 of the Exhibit to his 29 May 2017 affidavit as set out in paragraphs 9 to 14 of his 29 May 2017 affidavit. I found Mr Phillips' evidence as to the job diary to be far more convincing than that of Mr Leslight who did not recall many events recorded in the diary and appeared to have a very poor recollection generally in relation to the events from 2011 to 2013; 6. I note that in paragraph 5 of his 24 October 2017 affidavit, Mr Leslight says that he is not able to confirm the accuracy of the job diary. I find that the job diary was contemporaneously prepared by Mr Phillips as he asserts and is generally accurate. The detail in it is too voluminous to have been likely prepared after the dispute arose; 7. Mr Leslight initially approached Mr Phillips to determine whether Mr Phillips wanted to enter into a joint venture with Mr Leslight to develop the project at the Sandridge Street Bondi site. Mr Phillips said that he was not able to become involved in the project on that basis. Although Mr Phillips asserted in cross-examination that this was because he was busy with his business work, I find that at least one significant reason for the lack of interest in Mr Phillips in the proposed venture was that his bank would not lend him the money to get involved in the proposal. However, I do not conclude that this meant that the plaintiff did not have the capacity to be the builder at the site as opposed to a project manager for the excavation only. A joint venture would likely have involved the plaintiff undertaking significant financial outlays and obligations. As a builder, the plaintiff would likely have been entitled to regular payments from the defendant. I reject the third sentence of paragraph 4 of the written submissions on behalf of the defendant dated 13 March 2019. As submitted in paragraph 4 of the plaintiff's written submissions in reply dated 27 March 2019, the reasons Mr Phillips did not want to become involved in the joint venture with Mr Leslight were at least partly financial; 8. I accept that a meeting occurred on 30 March 2010 as set out in paragraph 8 of Mr Phillips' 29 May 2017 affidavit. I note that Mr Leslight does not recall the meeting. 9. In the year or so following the 30 March 2010 meeting, there were numerous meetings between Mr Phillips and Mr Leslight in relation to the proposed project at the Sandridge Street site. At various times in this period Mr Leslight forwarded to Mr Phillips various drawings, diagrams, photographic compilations and model plans of the proposed buildings to be constructed on the Site. In my view, the material forwarded shows that it was clearly contemplated by Mr Leslight at that stage that Mr Phillips was to be the builder at the site when works commenced. 10. I refer to paragraphs 32 to 36 above for my factual findings in relation to the period 28 September 2011 to 16 January 2012. I also refer to my analysis above at paragraphs 239-243. I find that Mr Phillips prepared the preliminary estimate attached to his email dated 4 December 2011 to Mr Leslight using very low per square metre rates for construction which he regarded as being unrealistic if high quality finishes and materials were to be used in the construction, but had done this at Mr Leslight's request for the relevant Council. I find that Mr Leslight wished Mr Phillips to provide a low estimate of the costs of the project in order that he might reduce his s 96 contributions to Council. I find that it was Mr Phillips' estimate of the build for the project in the period September-December 2011 that it would be between $3,500 and $4,500 per square metre. I refer to the reasons for this conclusion in paragraphs 242-3 above. I take into account the seriousness of that finding in relation to Mr Leslight's request in making the finding. 11. I reject Mr Leslight's evidence that he informed Mr Phillips of the budget of around $912,000 per dwelling. I find that Mr Leslight did not inform Mr Phillips of this budget: see paragraph 244 above. It is simply not referred to in the contemporaneous email correspondence and was a significant matter which would likely have been mentioned in writing between the parties if it had occurred. 12. A very important conversation was the oral discussion between Mr Leslight and Mr Phillips on behalf of the plaintiff which occurred on or about 20 March 2012. It is likely that this conversation occurred on the evening of 20 March 2012. 13. I find that the conversation occurred on 20 March 2012 between Mr Phillips for and on behalf of the plaintiff and Mr Leslight in the terms as set out in paragraph 26 of Mr Phillips' 29 May 2017 affidavit. I reject Mr Leslight's alternative conversation which he gave in his evidence and in his affidavits. I also accept that Mr Phillips sent to Mr Leslight the 20 March 2012 email at 6:49pm. Mr Leslight appeared to have a very poor recollection of this telephone conversation. His evidence was inconsistent in relation to the telephone conversation. It is noted that his initial oral evidence was also inconsistent with the terms of paragraph 4 of the Defence to the Further Amended Statement of Claim which had been verified by him. I have considered this issue further below. 14. I find that Mr Leslight relied at the time on the estimate of $3,500-$4,500 per square metre for the construction of the proposed dwellings for high quality finishes and fixtures from Mr Phillips. 15. I am also assisted in preferring Mr Phillips' version of the 20 March 2012 conversation by the fact that a 15% charge was included on invoices later forwarded by the plaintiff to the defendant. I reject Mr Leslight's evidence that he was dissatisfied with this charge but chose not to raise it with Mr Phillips. I find that Mr Leslight was always aware of this agreed charge from the telephone conversation which occurred between him and Mr Phillips on 20 March 2012. 16. I find that a conversation occurred between Mr Leslight and Mr Phillips as set out in paragraph 30 of Mr Phillips' affidavit sworn 29 May 2017 and that this occurred on or shortly after 20 March 2012, being the first conversation on this issue between the two gentlemen. 17. I accept that after 20 March 2012 Mr Leslight forwarded to Mr Phillips' various documents including plans, drawings and specifications: see paragraph 31 of Mr Phillips' 29 May 2017 affidavit. This is clearly consistent with the plaintiff being appointed the construction manager/builder for the project as it asserts. 18. I find that there was no formal agreement in writing entered into between the plaintiff and the defendant in relation to the services to be provided by the plaintiff to the defendant concerning the works at the Site. The agreement between them was initially as referred to above being as set out in paragraphs 26 and 30 of Mr Phillips' 29 May 2017 affidavit. 19. I find that there was no discussion in the telephone conversations on or about and shortly after 20 March 2012 of which Mr Phillips gives evidence as to the hourly rates to be charged by the plaintiff for work completed by its employees or contractors outside the 15% charge. However, such rates were set out in the invoices forwarded by the plaintiff to the defendant. I find that the defendant accepted those rates by paying the invoices where those rates were set out having been aware of them and having accepted them. This amounted in my view to an amendment to the agreement entered into between the parties by conduct by the acceptance of those rates through payment: New South Wales Housing Authority v Diab [2015] NSWCA 133 at [33]-[36]. 20. I find that Mr Leslight was the owner/builder on the project. I find that Geneville was engaged as his agent to undertake the construction work at the site with the assistance of sub-contractors. The discussions I have found between Mr Leslight and Mr Phillips, the email correspondence between them at the time, the ongoing provision of plans, drawings and diagrams by Mr Leslight to Mr Phillips and the parties' post contractual conduct is consistent with and establishes that Geneville was to be the construction manager on the project and was not limited in its role only to managing and supervising the excavation at the site. I reject the defendant's evidence and submissions on this issue. 21. I find that in November 2011, Mr Leslight obtained from Mr Adler, geotechnical engineer, a report in relation to the Site. Whilst this report expressed opinions in relation to the sub-soil at the Site, no more detailed investigations on this issue were made by Mr Adler. Mr Adler's report was used for the purposes of the defendant obtaining a construction certificate from the relevant Council. 22. I reject the defendant's evidence that he had a conversation with Mr Phillips in which he said the services of the plaintiff were only required up to the time of completion of the excavation and that the matter would be reassessed after that time. In my view, both parties assumed and accepted that the plaintiff would have an ongoing role in relation to the works including the construction of the dwellings. As stated above, this is consistent with the defendant forwarding to Mr Phillips of the plaintiff architectural plans and drawings and photographs of the proposed finishes for the entire project. This is inconsistent with the plaintiff only being involved in the excavation of the Site. I prefer Mr Phillips evidence on this issue also as I found him to be a more reliable witness. It is also supported by the plans themselves which were forwarded to Mr Phillips. There would be no real reason for the defendant to forward these if the plaintiff's role was limited to the excavation. 23. I find that the defendant forwarded architectural plans and structural drawings to Mr Phillips on 29 May 2012 and 15 June 2012 in order to obtain advice from him in relation to their content. These plans and drawings are in my view inconsistent with the defendant's assertions as to the limited scope of the contract. See further below where this is considered. See page 52 of Tab 3 to Mr Leslight's 8 July 2016 affidavit. 24. In June/July 2012 Active Demolitions were involved in relation to the demolition of the existing buildings on the Site. Contrary to Mr Leslight's evidence, I find that the plaintiff was involved not only in the referral of Active Demolitions to Mr Leslight but also in relation to the provision of other services relating to the demolitions including attendance at meetings, as set out in the job diary prepared by Mr Phillips. 25. I reject Mr Leslight's evidence that the plaintiff only commenced on site works after the demolition of the existing buildings. This is contrary to the site diary which I accept. 26. Excavation works commenced at the Site in August 2012. I find that the plaintiff was heavily involved in assisting in those excavation works. In the course of those excavation works, problems with the subsurface conditions at the Site were identified which caused delays in the excavation and issues with the underpinning and support of at least one of the neighbours' properties. I accept and find that the site was not over excavated having regard to the under soil conditions discovered, particularly the clay seam which I find existed. I accept Mr Phillips' affidavit evidence on this issue. 27. The issues in relation to the neighbours' properties which delayed the excavation works at the Site, were raised in correspondence in late November 2012. I accept that Mr Phillips and other workers contracted by the plaintiff were involved in site meetings with engineers and Mr Leslight in relation to the need for underpinning neighbours' properties. I am satisfied that the diary entries in the site diary maintained by Mr Phillips represent an accurate summary of the work performed by the plaintiff and Mr Phillips in relation to the underpinning on the days referred to in the job diary. 28. The problems in relation to the neighbouring properties which involved Mr Leslight paying some compensation to at least one neighbour, continued well into 2013 and delayed the project. 29. In this period the plaintiff undertook underpinning and other support works on the Site at the request of the defendant's engineer, Mr Pak Liu. 30. I find that Mr Phillips on behalf of the plaintiff was involved in meetings in October 2012 with both the geotechnical engineer and the structural engineer retained by the defendant in relation to the issue of the neighbouring properties. 31. On 5 November 2012, I find that Mr Phillips sent an email to Mr Leslight which was received by him in which Mr Phillips noted that a $3 million budget for the buildings was a figure for a building of "basic construction". Additional costs were noted for incomplete engineering details of the boundary and the sub-floor areas. 32. The email included a request for a $150,000 deposit and a number of payment terms. Mr Leslight said that he does not recall receiving this email but I find that he did. However, there is no satisfactory evidence in my view that he accepted all the payment terms in the email. See paragraph 39 of Mr Phillips' 29 May 2017 affidavit. The evidence does support an agreed deposit to replace that of $150,000 in the email in the amount of $85,000. See invoice number 1359 dated 6 November 2012 (the day after the email) attached to Ms Phillips' affidavit and Mr Phillips' evidence at T75.47-77.33. I find that there was a discussion between Mr Leslight and Mr Phillips in which the deposit amount was agreed to be reduced to $85,000 from $150,000. 33. I reject Mr Leslight's evidence that he knew nothing of a proposed deposit to be paid to the plaintiff. The deposit was referred to in the 5 November 2012 email which I find that he received. 34. I find that Ron Flew Excavations was retained by Mr Leslight and worked on the site undertaking excavation work in November/December 2012. It replaced a previous excavation company. 35. I find that Mr Phillips assisted Mr Leslight in relation to issues concerning the neighbouring properties including preparing at least one document and attending meetings, including with Mr Pak Liu, the structural engineer. 36. Following the partial resolution of the issue with the neighbours in about April 2013, Mr Phillips attempted to continue work on the Site including aspects relating to the boundary works. There were a number of meetings between Mr Phillips and Mr Pak Liu the structural engineer in May 2013 at which Mr Leslight also attended. 37. Mr Leslight gave evidence that he only received four invoices from the plaintiff for work completed. I reject that evidence. I accept the evidence of Mr Phillips and of Ms Phillips that invoices were forwarded to the defendant regularly and as set out in the affidavit of Ms Phillips. I accept that those invoices set out the works performed by the plaintiff or by others at the plaintiff's direction. At various times, Mr Phillips sought the payment by Mr Leslight of the plaintiff's outstanding invoices. On many occasions, Mr Leslight appeared to ignore the requests for payment. 38. On 22 May 2013, Mr Phillips sent an email to Mr Leslight raising funding issues, the costs of the building works involved with the boundary and retaining walls and further work to be completed over the next four to six weeks. Mr Phillips said that the plaintiff proposed a plan on having the excavators and other labour and materials ordered and booked in as soon as a deposit was received. Mr Leslight responded on 30 May 2013: "Yes go ahead. Finally here we go. Great. Looking forward to having everything running smoothly." Although Mr Leslight said he could not recall receiving Mr Phillips' 22 May 2013 email, I find that he did and replied to it. This email is inconsistent with the plaintiff having the limited contractual role the defendant asserts. 39. In August and September 2013, Mr Phillips on behalf of the plaintiff made attempts to obtain payment by the defendant of the plaintiff's outstanding invoices. I accept Ms Phillips' evidence that the only payments made by Mr Leslight are those set out in paragraph 7 of her affidavit and in particular, that $18,000 was received from Mr Leslight on 12 September 2013. I reject Mr Leslight's assertions that he believed the only outstanding invoices at that time were those for payments to Ron Flew Excavations: see Mr Phillips' diary entry for 21 August 2013 and his email to Mr Leslight dated 10 September 2013. I refer to my views in relation to Mr Leslight's evidence at paragraphs 294-297 above. 40. I reject Mr Leslight's evidence in paragraph 38 of his 24 October 2017 affidavit where he says that he was unaware prior to March 2016 of 10 numbered invoices said to be from the plaintiff. On Mr Leslight's evidence, he did not see an invoice from the plaintiff from April 2013 until September/October 2013 when he received an invoice for $17,089.71 relating to the supply and installing of temporary retaining walls. I reject Mr Leslight's evidence that he received an invoice from the plaintiff numbered 1419 in the amount of $17,089.71. Such an invoice was not produced in evidence. It is clear from Ms Phillips' affidavit that invoice 1419 related to different work for a different amount and that invoice 1420 related to the sum of $17,089.71. Mr Leslight was clearly mistaken on this issue: see paragraphs 298-299 above. I find that invoices were issued to Mr Leslight by the plaintiff as set out in paragraph 5 of Ms Phillips' affidavit. The two invoices on 19 March 2014 were forwarded by the solicitors for the plaintiff to the defendant. 41. In my view, if Mr Leslight had only received four invoices in the extensive period he claims, he would have chased up with Mr Phillips to avoid the possibility of receiving a very large invoice to be paid within seven days: see paragraph 300 above. 42. I reject Mr Leslight's evidence that the $18,000 he paid in two amounts in September 2013 to the plaintiff were in response to a verbal request by Mr Phillips that he was "strapped for cash" and needed money. As I find in paragraph 303 above, the payment of the $18,000 was connected with Mr Phillips' request in his email dated 10 September 2013 for payment "for the invoices to date": see also my analysis in paragraphs 304-307 above. 43. At Mr Leslight's request, Mr Phillips prepared a draft budget for the Site for submission to Mr Leslight's financier NAB in the sum of $3,904,518.41 including GST which included a project management fee of 10%: see paragraph 309 above. 44. This was forwarded by Mr Phillips to Mr Leslight on 23 September 2013. It is clear that Mr Leslight wished to obtain or at least confirm funding from his financier at this time. 45. An on-site meeting occurred on 1 October 2013 at which various persons including Mr Harris from the NAB, Mr Phillips, Mr Leslight and perhaps Mr Leslight Senior attended. A copy of the budget prepared by Mr Phillips was given to Mr Harris of the NAB. 46. On 2 October 2013, Mr Leslight paid $17,089.71 for invoice 1420 for the supply and installation by the plaintiff of temporary retaining walls. However, I find that, consistently with Mr Phillips' evidence, the true cost had increased and was reflected in the invoice number 1420.1. Mr Phillips' evidence was logical on this issue and consistent with the invoices. I accept it. 47. The evidence is unsatisfactory as to the reaction of the NAB to Mr Phillips' budget which was provided to its representative Mr Harris by Mr Leslight. Mr Leslight claims that the bank was highly critical of the Site and the budget and this caused him to consider changing builders. No evidence was given by Mr Harris at the hearing nor was any supporting documentary evidence from the bank tendered. Having regard to the unsatisfactory nature of much of Mr Leslight's evidence, I am unable to accept that the NAB representative or those more senior to him expressed these very negative views. However, I find that Mr Leslight decided at this time to seek other builders for the ongoing work on the Site without consulting Mr Phillips. 48. I accept Mr Leslight's evidence that he retained Micrah Projects to complete the building work on the Site and the contract was signed by him on 1 November 2013. 49. Throughout October and November 2013, Mr Phillips sent a number of emails to Mr Leslight as set out in his 29 May 2017 affidavit. These include emails on 2 October 2013, 15 October 2013, 17 October 2013, 19 November 2013 and 21 November 2013. I find that all of these emails were received by Mr Leslight. 50. There is a disputed meeting, alleged by Mr Phillips to have been held on 29 October 2013. Mr Phillips sets out what he claims occurred in this meeting in paragraph 56 of his 29 May 2017 affidavit. He says he attended with a Mr Andrew Kola. Mr Leslight denies that the meeting or the conversation set out by Mr Phillips occurred: paragraph 30 of his 24 October 2017 affidavit. Mrs Leslight Senior denies attending the meeting. Mr Leslight Senior denies the meeting. Mr Leslight Senior said that he remembered "vaguely" being provided with a summary of the invoices at a meeting with Mr Phillips. He later said he had a "very vague recollection" of this but did not recall any conversations in relation to the topic. 51. I accept Mrs Leslight's evidence that she did not attend the meeting. I accept the submission of counsel for the defendant that a Jones v Dunkel inference may be drawn against the plaintiff through its failure to call Mr Andrew Kola who attended the meeting with Mr Phillips for the plaintiff. No explanation was advanced by the plaintiff for Mr Kola's failure to provide an affidavit. Having considered all of the evidence, I prefer the evidence of Mr Phillips that this meeting occurred and a conversation occurred as he sets out in paragraph 56 of his 29 May 2017 affidavit. I am assisted in this finding by the evidence of Mr Leslight Senior that he has a vague recollection of being provided by Mr Phillips with a summary of the plaintiff's invoices at a meeting, although he denies a meeting in the latter part of 2013 where the invoices were discussed. 52. I find that on 11 October 2013 the plaintiff ceased active work on the Site and removed tools and equipment from the Site. On all of the evidence, I accept that this was due to the non-payment of the plaintiff's invoices by Mr Leslight and more importantly Mr Phillips' belief that Mr Leslight was awaiting a decision and further funding from the NAB. This is consistent with the emails at the time in evidence. 53. I find that Mr Leslight was aware in October/November 2013 that the plaintiff was continuing to do work in relation to the project but did not tell Mr Phillips of the plaintiff to stop the work. I also find that Mr Leslight failed to tell Mr Phillips that he had retained Micrah Projects to complete the work on the Site. He should have told Mr Phillips of this. I think it is very likely that he did not do so because of the outstanding invoices from the plaintiff. 54. I accept Mr Phillips' evidence that on 3 December 2013 he attempted to gain access to the Site and observed that the access code on the front gate lock had been changed and a new chain and lock had been installed across the front gate preventing access to the Site. 55. I also find that it was not until 9 December 2013 that Mr Phillips became aware that Micrah Projects had taken over the Site and was continuing works on the Site. I also find that on 21 November 2013 in his email to Mr Leslight, Mr Phillips again referred to the plaintiff's overdue invoices which were due for payment. 56. I find that at no stage during the plaintiff's presence on Site was any complaint made in relation to the speed or quality of the work performed by the plaintiff by the defendant. I find that some works performed by the plaintiff were reviewed by Mr Pak Liu, the structural engineer, and found to be satisfactory: see paragraphs 324 - 327 above. 57. I find that there were various significant delays on the Site due to various reasons. These included inclement weather, delays due to discovering problems with the sub-surface conditions of the Site, delays in Mr Leslight paying the plaintiff's invoices, delays due to problems with the neighbour and in particular, the need to gain access to the property of the neighbour which involved a payment from Mr Leslight, the preparation of a further budget for the NAB and obtaining the Bank's review of the proposed budget. I find on the whole of the evidence that no delays were caused by any conduct or omissions by the plaintiff. I will deal with the scope of the plaintiff's obligations under the agreement reached in more detail below. 58. I find that Mr Leslight has lost access to a number of documents and emails relating to the project. There is no satisfactory evidence to determine that this was due to any deliberate conduct on the part of Mr Leslight. 59. I will consider any outstanding factual matters relating to the issues in the Cross Claim below.

The expert evidence

This matter raises a number of technical building issues. The parties relied on a number of experts' reports in the proceedings in relation to these issues. The relevant witnesses and the areas in which they provided experts reports are as follows: 1. Mr Reon Anderson, building expert, in relation to the allegations by the defendant of defective work performed by the plaintiff - report tendered by the defendant; 2. Mr Paul Easingwood, chartered professional engineer, in relation to the alleged defects in the work performed by the plaintiff - report tendered by the plaintiff; 3. Mr Peter Lee, quantity surveyor, in relation to the costing of the alleged defects - reports tendered by the plaintiff; 4. Mr Lee also provided expert evidence in relation to quantifying the value of the work for the purposes of the plaintiff's alternative quantum meruit claim - reports tendered by the plaintiff; 5. Mr David Madden, quantity surveyor, in relation to the quantification of the plaintiff's work for the purposes of its quantum meruit claim - reports tendered by the defendant.
The experts prepared the following expert reports which were relied on by the parties: 1. Reports of Mr Peter Lee dated 12 June 2016 and 4 July 2016; 2. Report of Mr Paul Easingwood dated 6 July 2016; 3. Report of Mr David Madden dated 16 August 2016; 4. Report of Mr Reon Anderson dated 27 May 2016.
There were also joint conclave reports relied on as follows: 1. Report of Mr Anderson, Mr Madden and Mr Lee dated 23 March 2018; and 2. Further report of Mr Lee, Mr Easingwood and Mr Anderson dated 21 June 2018.
I have set out a brief summary of the Cross-Claim and the Defence to Cross-Claim above. The allegations by the defendant of defective work performed by the plaintiff were pleaded in the Cross-Claim and were considered by Mr Anderson in his 27 May 2016 report. Mr Easingwood and Mr Lee gave responsive expert evidence on behalf of the plaintiff. In his report dated 6 July 2016, Mr Easingwood provided his expert opinion on whether the work identified by Mr Anderson was defective and, if so, on how to rectify it. In his report dated 4 July 2016, Mr Lee provided his opinion on the cost of the rectification of the work should it be found to be defective.
On the quantum meruit issue, Mr Lee provided his expert opinion in a report dated 12 June 2016 and Mr Madden provided his responsive expert opinion in his report dated 16 August 2016.

Referral out of a number of expert issues

Having regard to the very complex expert issues raised by the parties in the matter, on 30 May 2018 I referred out limited questions for enquiry and report under Part 20 Rule 14 of the Uniform Civil Procedure Rules 2005 to an expert referee, Ms Janet Grey. The questions referred to Ms Grey were as follows: "1 Whether the alleged defective works, as set out in the Cross-Claim as reflected in the report of Mr Reon Anderson, dated 24 May 2016, are properly to be regarded as defective. 2 If the alleged defective works (or any aspect of them, referred to in item 1 above) are properly to be regarded as defective, the proper amount, if any, to be allowed to the defendant/cross claimant for the defective works. 3 Whether or not the construction/excavation/supervision methodology adopted by the plaintiff/cross-defendant was the cause of any delay and if so to what degree. 4 The proper amount, if any, to be determined on a quantum meruit basis for work performed by the plaintiff with the quantum to be allocated to the following periods where possible: (1) Prior to 20 March 2012; (2) Between 20 March 2012 and 29 June 2012; (3) Between 30 June 2012 and 11 October 2013; and (4) From 12 October 2013."
By letter dated 4 September 2018, the Referee forwarded her report to the court, also dated 4 September 2018. The report was tendered by the plaintiff and marked as Exhibit B in the proceedings, subject to an adoption application.
An adoption application hearing in relation to the report was heard on 30 November 2018 following the preparation of written submissions. On 10 December 2018, I made orders adopting the report of the referee Ms Janet Grey dated 4 September 2018 in its whole subject to one limited exception, pursuant to Part 20.24 of the Uniform Civil Procedure Rules: Geneville Constructions Pty Ltd v Leslight [2018] NSWDC 384.
Ms Grey's report is lengthy and detailed. In the report, Ms Grey considered the various expert issues and opinions and made findings.

Alleged Defects pleaded in the Cross-Claim

Ms Grey stated as follows in paragraphs 81-82 of her report in relation to the question of defects as pleaded in the Cross-Claim: "81 The following is a summary of the findings set out above relating to the allegations of defective building work: Item Is it a Defect Cost to Rectify 3.01 Bulk Excavation No, if clay seam established Nil 4.01 Concrete Piers No Nil 4.03 Starter Bars to Southern Footing No Nil 4.04 Starter Bars to Northern Footing No Nil Poor Workmanship to rear Pool Slab No Nil Total Nil

82 Alternatively, should the Court find that no clay seam was present at excavation level: Item Is it a Defect Cost to Rectify 3.01 Bulk Excavation Yes, if no clay seam established $6,252.00 4.01 Concrete Piers Not Documented No Nil 4.03 Starter Bars to Southern Footing No Nil 4.04 Starter Bars to Northern Footing No Nil Poor Workmanship to rear Pool Slab No Nil Total $6,252.00"

Accordingly, there was a factual question to be determined by the court. That question was whether or not the plaintiff encountered a clay seam at the level to which it should have excavated in ideal conditions. If a clay seam was encountered, excavation of the seam by the plaintiff was in accordance with good building practice. If a clay seam was not encountered, then some over-excavation occurred and accordingly there was some unnecessary cost incurred by the plaintiff: see paragraph 48 of Ms Grey's report where she stated in relation to the question whether the work was defective as follows: "Was the Work Defective: Conclusion 48 The determination of this issue depends on a finding of fact to be made by the Court. The relevant issue is whether or not Geneville encountered a clay seam at the level to which it should have excavated in ideal conditions (i.e. in conditions where only rock was encountered). The experts reached an agreement, which I adopt, that if a clay seam were encountered, excavation of this seam was in accordance with good building practice. Under these circumstances I determine: 1) that over-excavation did not occur; 2) that there was no defect; 3) that rectification was not required; and 4) that no loss was established. Alternatively, should the Court find that a clay seam was not encountered, I adopt the agreement of the experts and find that the work was defective."
In paragraph 61, Ms Grey found as follows: "In conclusion, should the Court find that a clay seam was not encountered; I find that the cost of unnecessary excavation was $4,752.00. I also find that the cost of rectifying the over-excavation by spreading and compacting spoil to the required level was $1,500.00, the total sum being $6,252.00."
Mr Phillips in his 13 November 2017 affidavit sets out in paragraphs 38-39 that a seam was encountered at the Site which necessitated further excavation. He was not shaken in cross-examination in relation to this evidence and I accept it. See my analysis as to this issue in the Cross-Claim below.

The method of excavation and other alleged delays

On the question of delays and the method of excavation adopted by the plaintiff, Ms Grey arrived at her findings. In relation to the method of excavation, she concluded as follows in paragraphs 124 to 125 of her report: "Method of Excavation: Conclusion 124 The evidence on this was set out in detail above. During concurrent examination, Mr Anderson said that excavation commenced at the front of the site. The common instructions and previous evidence from both the parties and witnesses, however, was that bulk excavation commenced at the rear and progressed towards the front and that, at the time Geneville left the site, most bulk excavation was complete and not much detailed excavation had taken place. The principal difference between Mr Anderson and Mr Easingwood was whether bulk and detailed excavation should occur sequentially on each level before moving to the next lower level, as advanced by Mr Anderson, or whether bulk excavation on all levels should be completed before commencing detailed excavation on all levels, as advanced by Mr Easingwood and as adopted on this project by Geneville. 125 Although on this issue Mr Anderson provided reasons for his opinion, which in my view had some merit, as with other issues, Mr Easingwood had vastly more experience than Mr Anderson and provided compelling reasons for the opposite view. In particular, his advice that different equipment was used for bulk and detailed excavation provided the main explanation for why it would be more efficient for a contractor to perform the work sequentially across the entire site. Mr Anderson's evidence that the machinery photographed on the site was all of a similar size was unsurprising, since the majority of the excavation that had been done at the time the photographs were taken was bulk and not detailed. Accordingly, I find that the sequence of excavation adopted by Geneville was neither unconventional nor inefficient and did not lead to delay."
Accordingly, having adopted Ms Grey's findings on this issue, I reject the allegation that the plaintiff's method of excavation was not in accordance with good practice and led to delays in the completion of the project at the Site.
In relation to the question of delays, Ms Grey concluded as follows in paragraphs 129-131 of her report: "129 Even if the Court were to find that delay occurred to the basement excavation activity, because of the paucity of evidence Leslight has put forward on the construction pathway, I see considerable further difficulties for the cross-claimant in establishing critical delay by the builder. Analysis of delay on a construction site is a complex, specialised discipline. Typically it involves, at the commencement of a project, the preparation of a construction programme in graphical format in which each activity to be carried out is listed vertically and the timeframe for the whole project is set out horizontally. Each activity is then given a specific period and its location is plotted within the overall timeframe. A critical path through the programme is then established and from this it can be seen which activities contain float and which are critical. The concept of float is used to describe the amount of time that an event or activity can be delayed without delaying the overall completion of the works. Float is calculated by subtracting the time necessary to perform a task from the time available to perform it. As the work progresses, the programme is updated (usually each month at a minimum) to take into account variations to the contract works and delays to that point. This then establishes a modified critical path. Further, delay is not typically measured retrospectively, with the benefit of hindsight. It is important to have a programme that is current at the time any particular delay commences, to determine whether it or any other concurrent delay is critical. Without these tools it is extremely difficult to measure the effect of any delay to the critical path of a project and, as it is only a delay to the critical path that extends the end date of a project, it is only this kind of delay that causes the sort of financial loss that Leslight has cross-claimed. Both experts recognised that there were delays to the project, which they considered were not attributable to the builder, and yet neither attempted to re-construct any critical path programme in order to analyse the impact of these or any other delays on the programme at the time that any commenced. As Geneville did not have the onus of proof on this issue, it is unsurprising that Mr Easingwood was not instructed to do so. Rather, Leslight had the onus of proof and it was for him to provide the necessary analysis. His expert witness, Mr Anderson, said only that the delays were exceptionally difficult to quantify. His principal logic appeared to be: ▪ In prefect [sic perfect] conditions the project would take 3 months. ▪ The project took 14 months. ▪ Some delay was attributable to others. ▪ The builder appeared to have poor building practices. ▪ Therefore, some delay must have been attributable to the Builder. 130 In my view, for the reasons set out above, this analysis was fatally flawed. If, for example, the site were over-excavated during a period when the project was otherwise delayed for months by a dispute with a neighbour or by waiting for structural design drawings to be developed, the over-excavation would have no impact on the end date of the project. 131 In my view, even if the Court were to accept that Geneville caused some kind of delay, Leslight has not discharged the onus to establish that either part or all of this was critical to the end date of the project."
I will consider whether there were inappropriate delays by the plaintiff further below. This raises the issue of why the project was delayed as it was. Both experts agreed that a period of three months was a reasonable period of time "to undertake the total excavation in perfect conditions": Grey report paragraphs 106, 111. The period of excavation appears to have been 14 months and even then it was not completed: Grey report paragraph 124.

Quantum meruit

Ms Grey also considered the question of a quantum meruit in paragraphs 132 and following of her report. The plaintiff had claimed a quantum meruit as an alternative to its claim against the defendant in contract: paragraphs 20-23 of the Amended Statement of Claim. After a detailed consideration of the respective evidence and submissions, Ms Grey gave her assessment on a quantum meruit basis of the work completed by the plaintiff as follows in paragraph 213 of her report: "Summary of Independent Estimates: Quantum Meruit Assessment 213 A summary of my quantum meruit assessment of the work done by Geneville is set out below: Period Amount incl. GST Before 20 March 2012 $ 2,713.43 Between 20 March 2012 and 29 June 2012 $ 7,219.36 Between 30 June 2012 and 11 October 2013 project management $ 7,219.35 construction, incl. 15% for overheads + profit $ 542,544.29 From 12 October 2013 $ 470.59 Total $ 560,167.02"

Ms Grey followed her quantum meruit assessment by assessing the invoiced claim of the plaintiff in the proceedings. She then considered a comparison of her quantum meruit assessment with the invoices forwarded by the plaintiff: paragraphs 229-230 of the report. The invoiced assessment was considered by her to test whether the independent quantum meruit assessment was within reasonable boundaries: paragraph 217 of her report.
In paragraphs 228-230 of her report, Ms Grey stated as follows: "228 From the above, it can be seen that, when considering both kinds of invoices, my assessment differs from that of Mr Lee by nil for sub-contract and supply invoices and by $32,896.32 for employee related invoices. When this is deducted from Mr Lee's overall assessment, my assessment of the appropriate invoiced amounts for the project is $589,870.50, inclusive of the 15% builder's margin and GST. Comparison of Quantum Meruit Assessment With Invoiced Assessment 229 For the purpose of comparison, the assessed figures are: independent estimate/quantum meruit assessment $ 560,167.02 invoiced claim assessment $ 589,870.50 230 The quantum meruit assessment above does not take into account any delay costs that may be due to the builder. It is also based, in part, on hours set out in the job diary, which the Court might adjust, depending on its factual findings. Without taking these possible adjustments into account, my view is that the quantum meruit assessment is within a reasonable range of the invoiced assessment. The addition of delay costs and other adjustments is unlikely to alter this view."
I will consider the conclusions and findings of Ms Grey in determining the various final submissions which have been made by the parties.

The contract between the parties

The defendant pleads that under the Act the plaintiff cannot enforce the contract between the parties by seeking damages for breach of contract. I will first determine whether there was a contract formed.
The parties agree that an agreement was made between them relating to the project on 20 March 2012: Amended Statement of Claim filed 19 April 2017 paragraph 3; Defence filed 4 May 2017 paragraph 3; defendant's written submissions filed 20 February 2019 paragraph 2; plaintiff's written submissions dated 20 February 2019 paragraphs 74-75; defendant's written submissions dated 13 March 2019 paragraph 3.
There is a dispute between the parties as to: 1. The terms of the contract reached; and 2. Whether the contract was partly written and partly oral or only oral.
I have generally preferred Mr Phillips as a reliable witness and a witness of truth. In my view, Mr Leslight was an unreliable witness with a very poor recollection of relevant events including in particular in relation to the contract entered into between the parties.
In my view, consistently with my factual findings, I prefer Mr Phillips' account of the relevant conversations on 20 March 2012 and that the contract was partly written and partly oral for the following reasons: 1. Mr Phillips was overall an impressive witness; 2. Mr Leslight was not an impressive witness. I formed the view, as set out above, that his evidence was generally unreliable; 3. Mr Phillips' account was consistent with the correspondence between the parties, particularly the following: 1. The email sent by Mr Leslight dated 20 March 2012 sent at 1.51pm: "I think it is time. When can we meet to start"; 2. The email sent by Mr Phillips on 20 March 2012 at 6.49pm especially requesting a full set of drawings and specifications. This email is instructive. It includes: "We will need to get a full set of drawings & spec both as a PDF File & to scale on paper…Our first step will be to get a list of contractors ready to call for prices. For each trade, we will also need to prep the sub-contract agreements/contracts…As you will be the owner builder…" Mr Phillips seeking these documents is only consistent with the plaintiff having a contractual role as asserted by the plaintiff. It is inconsistent with the defendant's case on the limited scope of the contract. This email constitutes a written part of the contract; 1. The various iterations of plans and drawings relating to the proposed works sent by Mr Leslight to Mr Phillips both before and after 20 March 2012 are more consistent with the plaintiff's evidence and case on the contract; 2. Mr Leslight's inconsistent and unreliable evidence on whether there was a discussion as to the application of a 15% charge by the plaintiff to the works undertaken at the Site: see Leslight affidavit sworn 24 October 2017 paragraph 8; T363.22-T375.50; 3. The fact Mr Leslight accepted and paid the initial invoices with a 15% charge is consistent with Mr Phillips' evidence as to the relevant contractual discussions; 4. Paragraph 4 of the Defence and the cross-examination of Mr Leslight as to it: see T376.39-T387. No subsequent application was made to amend the Defence. This cross-examination showed that Mr Leslight's recollections about the contractual discussions were particularly poor and unreliable; 5. Mr Leslight's status of owner-builder on the project whilst the plaintiff was working at the Site; 6. The plaintiff's involvement in the demolition and excavation works at the Site: see the entries in the Job Diary for 12 July 2012; 24 July 2012 and 29 July 2012; 7. Mr Phillips' assistance to Mr Leslight in relation to the latter's involvement with the neighbouring properties; 8. Mr Phillips' involvement in completing a budget for NAB post agreement: see 23 September 2013 email. This is inconsistent with being involved only in the excavation process; 9. Mr Phillips' involvement with Mr Pak, the structural engineer; 10. Mr Phillips completing estimates not just for excavation works.
I specifically reject the submission that the plaintiff's role was limited to being involved only up to the completion of the excavation works with the position then to be reviewed. This is inconsistent with the evidence of Mr Phillips which I prefer as well as the much greater involvement of the plaintiff, including in being forwarded by Mr Leslight updated plans and drawings for the entire proposed construction or certainly for more than the mere excavation (see the plans forwarded by Mr Leslight to Mr Phillips on 15 June 2012 for his comment as an example). It is also inconsistent with the 20 March 2012 email sent by Mr Phillips to Mr Leslight which I have referred to in the previous paragraph. The defendant did not point to any email between Mr Leslight and Mr Phillips for the plaintiff where a more limited role was stated.
I reject that the contract was for the plaintiff to be only the project manager as opposed to being the defendant's agent and builder and construction manager for the project. This is in my view confirmed by: 1. Paragraphs 26 and 30 of Mr Phillips' 29 May 2017 affidavit which I accept; and 2. The plans and drawings later sent by Mr Leslight to Mr Phillips. However, that does not mean that the plaintiff did not provide some limited project management services in relation to the project. An example is in relation to the excavation works; 3. The 20 March 2012 email from Mr Phillips.
The evidence I have referred to above after 20 March 2012 has assisted me in determining the content of the contract reached between the parties on 20 March 2012: see Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at 163-164; Kriketos v Livschitz [2009] NSWCA 96 at [107]-[120], especially at [109].
Accordingly, based on my acceptance of Mr Phillips' evidence and in the light of the correspondence and conduct of the parties, I find the terms of the contract reached by the parties were as follows: 1. The plaintiff would carry out building works and services in relation to the project in accordance with the specifications and drawings provided by the defendant to the plaintiff from time to time and any request or direction from the defendant in relation to the appearance and specifications of the project. This engagement was for the entirety of the project; 2. The defendant would pay the plaintiff on a costs plus basis for the works undertaken as requested or directed; 3. The percentage profit agreed was 15%; 4. The plaintiff would make progressive payment claims against the defendant for the works undertaken; 5. The defendant would pay the progress claims within 7 days of receiving each progress claim; 6. The plaintiff would purchase materials and goods and services and enter into agreements with contractors for the supply of goods, materials and services in connection with the works agreed, specified or directed; 7. I specifically reject the submission of the defendant that the plaintiff was engaged only as the defendant's advisor as project manager: written submissions dated 13 March 2019 paragraph 4; 8. I also reject the submission of the defendant that the plaintiff was primarily responsible for dealing with the neighbour issue, the sub-surface issue and the obtaining of further geotechnical advice. The plaintiff was a builder. He provided construction management services. Mr Leslight was the owner/builder. He had full control of the project including financial matters and the development of the building concept/plans. Mr Leslight had retained Mr Adler, the geotechnical engineer, earlier and only obtained a limited report from him. Mr Leslight, as owner, had to deal with the neighbour issue. Mr Phillips provided assistance to him on this issue. However, it was Mr Leslight's responsibility as owner to undertake the negotiations and reach agreement with the neighbour. It was only then that the support works could be undertaken.
The plaintiff claims that the defendant agreed to pay the plaintiff interest on any overdue amounts at the rate of 20% per annum to cover the plaintiff's financing costs: Amended Statement of Claim paragraph 6. This allegation clearly has potential significant financial consequences and therefore must be considered carefully. The allegation is supported by paragraph 26 of Mr Phillips' 29 May 2017 affidavit and Mr Phillips' 5 November 2012 email. See also the reference to 20% interest in the plaintiff's 6 November 2012 invoice number 1359 to the defendant. There was no complaint in evidence by Mr Leslight as to this. See also the comments of Nettle JA in Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269 at [51]. On the whole of the evidence, I prefer Mr Phillips' account as he seemed a reliable and truthful witness particularly as to the contractual discussions. It is supported by the documents I have mentioned.
The hourly rates for workers engaged or employed by the plaintiff were accepted by the defendant by him paying some invoices rendered for their services. This does not appear to be in dispute.

Breach of Contract

The plaintiff claimed that the defendant breached the contract between the parties primarily by failing to pay the balance of the progress claims delivered for the work performed pursuant to the contract as set out in invoices forwarded to the defendant: Amended Statement of Claim paragraph 16. Additional breaches of contract including locking the plaintiff out from the Site and engaging another builder for the project are particularised in the particulars to paragraph 18 of the Amended Statement of Claim.
I have accepted the evidence of Mr Phillips and Ms Phillips as to the forwarding of the invoices claimed to the defendant: see my factual findings in paragraph 378 (37)-(42) above. In my view, the evidence establishes that the defendant failed to pay the invoices sent within seven days in breach of the contract between the parties. See Ms Phillips' affidavit paragraphs 5-7. This breach was a significant breach of an important term of the contract.
The plaintiff claims that the total amount of the progress claims made was $548,198.44 and only $219,064.15 was paid by the defendant: paragraphs 11 and 13 of the Amended Statement of Claim.
An issue relates to the Platinum and Hanson invoices referred to in paragraph 219 of the Referee's report, Exhibit B. Mr Phillips claims that he paid the invoices: paragraph 38 of his 29 May 2017 affidavit. Having reviewed these invoices, I accept Mr Phillips' evidence that they relate to the project in question. On review, I also accept that the Platinum and Hanson invoices referred to as items 1.035 and 1.133 in the Referee's report are for the correct amounts. They reflect each invoice plus a 15% uplift factor based on the contractual terms: Platinum $7,260 plus 15% equals $8,349; Hanson $3,067.24 plus 15% equals $3,527.33. This was an issue I left to be considered by the court on adoption of the Referee's report. In relation to the Hanson invoices, Ms Phillips annexes invoice number 1411 dated 10 September 2013 claiming a combined amount of $3,067.24. Accordingly, the invoices exhibited to Ms Phillips' affidavit and Mr Phillips' affidavit appear to justify the amount claimed by the plaintiff in the Amended Statement of Claim.
Ms Grey assessed the invoiced amounts following an examination of the competing expert evidence as properly being $589,870.50 with the 15% mark up: Exhibit B paragraphs 215-228.
From this figure must also be subtracted the amount actually paid by Mr Leslight of $219,064.15. I comment on this figure further below as a different figure is asserted by the defendant. This gives a final assessed amount in the Amended Statement of Claim proceedings of damages for breach of contract, assuming the contract is enforceable, of $370,806.35. To this figure must be added the outstanding interest if the contract were enforceable.
In paragraphs 19-20 of his written submissions dated 13 March 2019, it is submitted by counsel for the defendant that the amounts paid to the plaintiff by the defendant should include $22,401.00 not in the plaintiff's records. Reliance is placed on page 59 of Exhibit E and certain pages of Tab C to Mr Leslight's affidavit sworn 27 May 2016 being Mr Leslight's NAB Bank Statements. A similar oral submission was made.
In my view, this submission by the defendant should be rejected: 1. The submission is inconsistent with the evidence of Ms Phillips who I consider to be a more reliable witness to Mr Leslight. She gives positive evidence of the amount received by the plaintiff from the defendant; 2. The evidence from the defendant's expert in Exhibit E does not advance the matter. The expert's view can only be based on an assumption or on his review of the same documents available to the court; 3. The NAB bank statements do not show transfers to the plaintiff but have general descriptions only; 4. The payments to the plaintiff are not referred to in the body of Mr Leslight's 27 May 2016 affidavit. There are references to the amounts in paragraph 15 of Mr Leslight's affidavit but not that they were paid to the plaintiff. Paragraph 15 refers to "payments I made to these contractors". There is no reference to Geneville as being the relevant contractor; 5. The claim seems to be inconsistent with paragraph 25 of Mr Leslight's 8 July 2016 affidavit in reply; 6. The payments do not seem to be referred to in the particulars to paragraph 6 of the Defence; 7. There was no need to cross-examine Mr Leslight on this issue as there was no relevant evidence on it from him.

Was the contract unenforceable?

The defendant claims that the contract made was illegal and unenforceable under the Act for breach of ss 7 and 10 of the Act: Defence filed 4 May 2017 paragraph 12; written submissions dated 13 March 2019 paragraph 12. The plaintiff disputes this. The defendant orally submitted that what was required was a written agreement to be concluded between the parties at the time the contract was entered.
Sections 7, 7A and 10 of the Act at the relevant time provide as follows: "7 Form of contracts (1A) This section applies to a contract only if the contract price exceeds the prescribed amount or (if the contract price is not known) the reasonable market cost of the labour and materials involved exceeds the prescribed amount. The prescribed amount is the amount prescribed by the regulations for the purposes of this section and is inclusive of GST. (1) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it. (2) A contract must contain: (a) the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and (b) the number of the contractor licence, and (c) a sufficient description of the work to which the contract relates, and (d) any plans and specifications for the work, and (e) the contract price if known, and (f) any statutory warranties applicable to the work, and (g) in the case of a contract to do residential building work - a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA. (3) The contract must comply with any requirements of the regulations. (4) If the contract price is known, it must be stated in a prominent position on the first page of the contract. (5) If the contract price is not known or may be varied under the contract, the contract must contain a warning to that effect and an explanation of the effect of the provision allowing variation of the price. The warning and explanation must be placed next to the price if the price is known. (6) A contract must not include in the contract the name of any person other than the holder of a contractor licence as, or so it may reasonably be mistaken to be, the holder's name. (7) This section does not prevent the holder of a contractor licence with a business name registered under the Business Names Act 2002 from also referring in such a contract to the business name. … 7A Offence A person must not contract to do work under a contract unless the requirements of section 7 or 7AAA in relation to the contract are complied with. Maximum penalty: 80 penalty units in the case of a corporation and 40 penalty units in any other case. … 10 Enforceability of contracts and other rights (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts: (a) in contravention of section 4 (Unlicensed contracting), or (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6 (2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person. (2), (3) (Repealed) (4) This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act."
The following analysis can be made: 1. The works to be performed were "residential building work" within the Act (s 3) as they related to work involved in the construction of a dwelling - this is not disputed by the plaintiff; 2. The amount involved and contemplated in the contract clearly exceeded the prescribed amount - s 7(1A) of the Act and Regulation 11A(1) of the Home Building Regulation 2004 (NSW); 3. The requirements of s 7(1) and (2) and (5) of the Act were not complied with in the present case; 4. Therefore, the agreement entered into did not comply with s 7 of the Act; 5. Under s 10 of the Act, where the requirements of s 7 apply to a contract and the other requirements of s 10 are satisfied, the plaintiff is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work; 6. Therefore the plaintiff cannot sue the defendant for breach of the contract entered into.
All references above are to the Act as at 20 March 2012.
The plaintiff disputes this conclusion and says that the contract is not rendered unenforceable by the Act: see paragraphs 29-46 of its submissions dated 27 March 2019. It is submitted by the plaintiff as follows: 1. The remedy for a breach of s 7 of the Act is set out in s 7A of the Act. Failure to comply with s 7 of the Act constitutes an offence. A breach of s 7 of the Act does not enliven any part of s 10 relating to the denial of entitlement to damages and enforceability of contracts for residential building works - submissions paragraph 31; 2. Section 10(1)(c) of the Act is inapplicable as s 7 of the Act is not a provision of the Act prescribed for the purposes of the paragraph - submissions paragraph 32; 3. Breach of s 10(1)(b) of the Act "does not render any part of the Contract unenforceable without more" - submissions paragraph 33; 4. Section 10(1)(b) does not apply to a contract such as the present one in issue which is partly in writing: submissions paragraphs 36-37. The contract the subject of Geneville's claim was formed in the circumstances of a partly written and partly oral agreement: submissions paragraph 37. The written part of the agreement provided a "sufficient description of the work to which it relates" within s 10(1)(b) of the Act: submissions paragraph 38. The invoices sent by the plaintiff reflected the payment terms: submissions paragraphs 40-41; 5. As at 6 November 2012, the entirety of the terms constituting the contract had been committed to writing and conveyed to the defendant by that means: submissions paragraph 42. The defendant accepted those terms by conduct by paying some of the earlier invoices: submissions paragraph 42. In the alternative, only the first invoice number 1355 was unenforceable: submissions paragraph 45; 6. It was also orally submitted by the plaintiff that the Defence does not specify clearly that a breach of s 10 of the Act is relied on.
In my view, the submissions made by the plaintiff in relation to ss 7, 7A and 10 of the Act as applied to the current contract should be rejected.
First, a court must construe a provision in a statute so that it is consistent with the language and purpose of all of the provisions of the statute: Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69]-[70]; The Owners Strata Plan No 57164 v Yau [2017] NSWCA 341 at [103]-[105].
Secondly, in my view the only remedy for a breach of s 7 of the Act is not that provided for in s 7A. Section 10 also provides a remedy for a contract to which s 7 applies in the circumstances there set out. This is made clear by the opening words of s 10(1)(b) "under a contract to which the requirements of section 7 apply." This construction also seems to have been accepted by the courts in Vimblue Pty Ltd v Toweel trading as Carpenters Core Building [2009] NSWSC 494 at [4]-[10] per Barrett J and in Proprietors of Strata Scheme 3618 v Costin Roe Consulting [2010] NSWSC 1049 at [5] per Hislop J.
Thirdly, the clear aim of ss 7, 7A and 10 of the Act is to protect consumers. This is obvious from the fact the sections apply to residential building work, s 7(3) and (4) of the Act, the fact the offence provision in s 7A is aimed at a person contracting to do work under the contract (clearly the builder) and the terms of s 10 (1) which is aimed at a person "who contracts to do any residential building work".
Fourthly, the case of Nichols v Earth Spirit Home Pty Ltd [2015] QCA 219 at [32] on which the plaintiff places some reliance was decided under quite different legislation to the Act applicable here.
Fifthly, the contract here is clearly "a contract to which the requirements of section 7 apply" within s 10(1)(b) of the Act for the reasons which I have set out above in [421].
Sixthly, the contract here is not only in writing. The plaintiff itself asserts that the contract is partly in writing and partly oral. The plaintiff submits that when one considers all the various documents and emails the contract is in writing or the relevant terms are set out in writing. However, the aim of the Act is to protect the consumer. The contract must be in writing so that the consumer can readily understand it and the obligations they are entering into. Having various documents containing various terms including some terms which allegedly arise by inference or implication after the time the contract was entered does not appear to me to satisfy the purposes of the Act or the requirements of s 10 of the Act. Further, the Amended Statement of Claim itself relies on a partly oral contract: see paragraph 3. The emails sent on 20 March 2012 do not, in my view, advance the matter as they do not set out the terms of the contract. It must be recalled that both parties plead that the contract was entered into on 20 March 2012.
Seventhly, the phrase "or that does not have sufficient description of the work to which it relates" in s 10(1)(b) of the Act appears to me to be directed to a contract that is in writing but is deficient in its description of the work to be performed. I note that the same phrase is used in s 7(2)(c) of the Act which is relevant. Accordingly, provided the contract is in writing and has a sufficient description of the works to which it relates it may be enforceable despite not complying with s 7. However, clearly the usual requirements for an enforceable contract at common law need to be present.
I turn to consider whether the alleged written contract here has "sufficient description of the work to which it relates." In my view, the written part does not. The 20 March 2012 email is preliminary in nature: see Mr Phillips 29 May 2017 affidavit at paragraph 25 and Tab 9. In order to ascertain the terms of the contract one must review the content of the oral discussion which I have found occurred. There is no written part of the contract for example which sets out the agreement of the parties for the plaintiff to carry out works and services in accordance with specifications and drawings provided by the defendant from time to time. Even on the plaintiff's argument this term was never reduced to writing.
In relation to the pleading argument, in my view the defendant has made clear in paragraph 12 of the Defence that s 10 of the Act is relied on. There is no unfairness in the defendant relying on the argument that the contract here does not comply with the requirements of s 10.
For these reasons, in my view the contract in the present case made on 20 March 2012 is unenforceable "by the person who contracted to do the work" being the plaintiff. Thus under s 10, the plaintiff is not entitled to damages or to enforce any other remedy in respect of the breach of the contract.
The only remedy available to the plaintiff in relation to the goods and services supplied is in quantum meruit.

Quantum Meruit

A quantum meruit is claimed by the plaintiff in the alternative to its contractual claim: Amended Statement of Claim paragraphs 21-23.
The issue of quantum meruit was considered by Ms Grey in her Referee's report, Exhibit B: paragraphs 132-230. She arrived at the figure of $560,167.02. Having reviewed her reasoning, I accept her assessment of the reasonable costs based on the hours she has accepted which are obtained principally from the job diary prepared by Mr Phillips.
I accept as stating the general principles applicable, the analysis of the legal principles set out in paragraphs 78-82, 86-88, 93 and 96 of the plaintiff's written submissions dated 20 February 2019. See also Pavey & Matthews v Paul (1987) 162 CLR 221; [1987] HCA 5 at CLR 227-8; 256-7 referred to in the defendant's written submissions. The unenforceable contract provides significant evidence as to what was agreed, if anything, to be done gratuitously. However, the contract does not limit completely the amount which can be awarded in a quantum meruit. The obligation enforced under a quantum meruit "differs in character from the contractual obligation had it been enforceable": see: Pavey & Matthews, above, at 228 and 257; O'Connor v Leaw Pty Ltd (1997) 42 NSWLR 285 at 295.
I also accept and find that the evidence establishes: (a) that Mr Leslight received a benefit being the goods and services which were provided by the plaintiff to him in relation to the project; (b) the benefit was obtained by the defendant at the expense of the plaintiff through its provision of the goods and services and its liability for goods and services provided by third parties; (c) the defendant accepted the benefit of the goods and services provided by the plaintiff. At no stage did Mr Leslight tell the plaintiff to cease providing the goods and services when he knew they were being provided. On the contrary, he was aware that the plaintiff was providing goods and services in relation to the project and allowed this to continue. This awareness and knowing acquiescence arises from the correspondence between the parties including after 20 March 2012, the invoices received by Mr Leslight and his attendance at the Site in meetings and discussions with Mr Phillips: see paragraph 84 of the plaintiff's 20 February 2019 written submissions. The benefits were clearly not intended to be a gift; (d) in the alternative to (c), there was an implied request by the defendant to the plaintiff to provide the goods and services. I accept the correct factual matters as set out in paragraphs 89-90 and 94 of the plaintiff's written submissions dated 20 February 2019; (e) it would be unconscionable for Mr Leslight to retain the benefit provided without paying for it. The first Mr Phillips became aware of the cessation of his involvement was when he found the Site locked and was informed there was a new builder. This itself amounted in my view to a further significant breach of contract by the defendant.
These findings in my view satisfy the requirements for the award of a quantum meruit: see Pavey & Matthews, above, at 227-8; Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225 at [6], [42]-[43];[54]-[63]; Lumbers v W Cook Builders Pty Ltd (in liquidation) (2008) 232 CLR 635; [2008] HCA 27 at [79]-[80] and [89].
The defendant submits that there should be a deduction for the period from 20 March 2012 to 29 June 2012: written submissions dated 13 March 2019 paragraphs 16-19. This is on the basis of email correspondence dated 11 June 2012 which suggests the plaintiff would only start billing from when the defendant obtained the construction certificate. The amount involved, according to the Referee, for the relevant period is $7,219.36. In my view, this submission should be rejected. The issue was not what was in the email correspondence (unless it amounted to some estoppel or misleading or deceptive conduct or variation of the contract which is not pleaded), but what was agreed in the unenforceable contract. The agreement I have found had no such limitation and Mr Leslight forwarded various documents to Mr Phillips on behalf of the plaintiff for advice in the period from 20 March 2012 to 29 June 2012 as well as undertaking other work. See paragraphs 169-170 of the Referee's report. I see nothing unconscionable in the claim within Pavey & Matthews as the defendant asserts.
A question arises as to whether different considerations exist for the quantum meruit claimed by the plaintiff for the period prior to 20 March 2012. There was no contractual arrangement for work completed in this period. The Referee allowed $2,713.43 for this period on a quantum meruit basis: Exhibit B paragraphs 146-158 and 213. The Referee concluded that the amount claimed appeared reasonable for the work described in the job diary. The defendant submitted that the amount should not be claimable as it is prior to the contract. The plaintiff submitted that the work clearly related to the project, was more than a few general introductory discussions and should be claimable by way of analogy relying on the line of authority permitting recovery where work is done but a contract with the claimant never actually eventuates. See submissions dated 20 February 2019 at paragraphs 91-96 and for example Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa [2007] NSWSC 228 at [248].
In my view, the job diary figure of 16.5 hours referred to by the Referee (report at [150]-[154]) for the hours spent should be accepted having regard to Mr Phillips' evidence as to its creation and maintenance which I accept. I think there is also force that some of the hours were devoted to a project which was planned with the plaintiff as the builder. A significant proportion of the work was detailed. Doing the best I can on the evidence, I would reduce the amount claimed by a third to take account of the early general discussions. Thereafter, the plaintiff was the identified building for the project. Accordingly, I would reduce the Referee's figure to $1,790 which results in a reduction of $923.43. The fact it is prior to the entry of the unenforceable contract is not conclusive: Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141 at [24]-[25].
The next issue is whether a daily amount for delay to the plaintiff as found by the Referee should be added: see paragraphs 206-209 of Exhibit B, the Referee's report. The plaintiff submits that it should: written submissions dated 20 February 2019 paragraphs 98-99. It submits that the delay diary, Exhibit A, is compelling evidence in support of the plaintiff's claim when read with the job diary maintained by Mr Phillips. The defendant submits that it should not: written submissions dated 13 March 2019 from paragraph 21. As the Referee Ms Grey states, usually the contract in a building dispute sets out who bears the costs due to delay for which neither party is responsible: Exhibit B paragraph 209. The plaintiff seeks 278 delay days totalling $282,614.80: see paragraph 27 of the plaintiff's submissions in reply dated 27 March 2019. It is submitted by the plaintiff that there is no overlap in this claim.
The contract terms did not indicate who was responsible for the risk of delays due to rain. On one view, the rain delays should be excluded in considering both the plaintiff's claim and the defendant's Cross-Claim as rain delays are not due to the fault of any party. However, I note that the plaintiff in paragraphs 14 and 19 of its 27 March 2019 submissions, quotes the Referee in relation to what should be included in the quantum meruit assessment. The plaintiff submits, and I accept, that damage flows from delay per se because without the delay the plaintiff could have proceeded with its work. The builder has costs when present on site even if no or restricted work is completed. The builder only cannot claim compensation because of delay caused by it or delay which was at its risk under the agreed terms. The issue involves a question of risk allocation.
The issue turns partly on the scope of the contract agreed, Exhibit A, Mr Phillips' oral evidence, the affidavit evidence and the various submissions from the parties, including the annexure to the defendant's 13 March 2019 submissions. In general terms I accept the submission of the plaintiff that the delay claim as part of the quantum meruit assessment is different in nature to the defendant's delay claim as part of his Cross-Claim. See the last sentence in paragraph 11 of the plaintiff's written submissions dated 27 March 2019. The delay I am assessing at present is delay to the plaintiff builder.
There was no evidence of any agreement between the parties that rain delay was at the plaintiff's risk as the builder and construction manager. The contract I have found is fairly basic. Therefore, applying the Referee's expert finding in paragraph 206 of her Report as to what delay falls within a quantum meruit, the defendant is liable for rain delays: see Referee report paragraph 206. I am not aware of any authority in assessing a quantum meruit to the contrary on this issue. I accept as a matter of principle that it is correct in relation to what a quantum meruit is intended to include.
Having regard to the findings I have made about the scope of the contract and the agreed roles of the parties, I reject the submissions of the defendant made in paragraphs 5 and 26-27 of his written submissions dated 13 March 2019 that any delays due to unknown ground conditions and the neighbourhood dispute issue are due to defaults by the plaintiff. These did not fall within the plaintiff's agreed role. The allegation that the plaintiff had obligations to give advice as to neighbour and geo-technical advice issues prior to the commencement of any works or even the contract is also not consistent with the defendant's pleaded case as to the contract between the parties: see Defence paragraph 3 (iii); Cross-Claim paragraph 16 and particulars. There is no allegation there of a failure of the plaintiff to provide advice to the defendant.
I also reject the submission in paragraph 23 of the same written submissions that the relevant period on site should be 52 weeks as opposed to 14 months. The latter is supported by the affidavit evidence of Mr Phillips and the plaintiff's role in the excavation process: see T238.10; T238.30; T239.38; T241.20. See also the entries in the job diary and paragraphs 175-176 of the Referee's report. The correct period is from August 2012 to 11 October 2013.
I have considered Exhibit A in the light of the defendant's written submissions dated 13 March 2019 paragraphs 28-37, the plaintiff's written submissions dated 27 March 2019 paragraphs 18-28 and the oral submissions. Difficult questions of analysis are raised by the parties as to the plaintiff's delay claim. Exhibit A was prepared daily or every second day by Mr Phillips whose evidence I have generally accepted: T115.22-.49; T236.38. He also confirmed that he focussed on delays to site productivity in preparing Exhibit A: T243.
I initially focus on the neighbour dispute period shown in Exhibit A. In my view, the design delay period alleged in Exhibit A prior to 4 September 2012 does not appear to be relevant having regard to the stage the project had reached: see T247.14. Although Mr Phillips claimed it delayed the plaintiff obtaining quotes and planning, I did not find this general evidence to be convincing: see T244.43-T245.7. I cannot see how the alleged design delays could slow the completion of the project or cause costs to the plaintiff where the excavation was being undertaken and the plaintiff alleges there were further substantial delays from 4 September 2012 due to other causes. The overall position cannot be ignored. The neighbour delay period is the next highest number of days claimed in Exhibit A. The period is established by Exhibit A. There are relevant references in the job diary from 17 September 2012 onwards (see also entries for 11 October 2012 and 7-13 November 2012). Exhibit A has an entry for 13 August 2013: "Received Engineer's Drawings for Retaining Boundary Walls" which concludes the claimed delay period.
I accept the defendant's submission that the period of the "Christmas shutdown" claimed as a neighbour dispute period (12 days) should be excluded as there is no evidence workers were on site or that work was likely. Whilst the plaintiff disputes this in paragraph 23 of its 27 March 2019 reply submissions, I am not satisfied that work was likely to be performed in this period having regard to the time of the year. No specific and convincing evidence was led by the plaintiff on this issue which leads to a different result. This applies equally to the claim for design delays in this period.
I also accept that double counting should be avoided - for example inclement weather days and coinciding neighbour dispute days (12 days). It is unclear from where the defendant gets his figure of 211 days of neighbour delays in paragraph 30 of his submissions but I assume this is based on the period from 11 October 2012 which I have rejected. Exhibit A refers to 237 days. If one starts with 237 days as is in Exhibit A, then subtracts 12 days for the "Christmas shutdown", then subtracts any days for rain delays which I do not consider are established (9 September 2013, 13 September 2013 and 8 October 2013 but none of these fall within the relevant neighbour dispute period) one gets 225 days. If one then adds rain delay days after the end of the neighbour dispute period whilst excluding the three days I have indicated, one gets a further 5 days bringing the total to 230 days.
In relation to the claimed design days and cashflow days delays, double counting should also be avoided. I reject the defendant's submissions in relation to cashflow in paragraph 36 of the defendant's written submissions dated 13 March 2019. I prefer Ms Phillips' and Mr Phillips' evidence for the reasons I have given above. There are detailed references to delays caused by cashflow issues in the job diary. Mr Leslight controlled cashflow matters. See the entries for 21 September 2012 to 27 September 2012 for example. However, there needs to be deductions for the period claimed where it partly coincides with excavation, neighbour delays and cashflow delays. Overall, the impact on the plaintiff of neighbour delays, with the indicated deductions, gives the most accurate guide, in my view, for the purposes of a quantum meruit calculation. That is because the neighbour delays continue past the cessation of the cashflow delays.
Although I note paragraphs 22 and 24 of Geneville's 27 March 2019 submissions to the contrary, there should be some discounting and reduction for days where the plaintiff's workers on site could perform limited duties, for example where there was inclement weather. I accept that workers would have been involved with some site de-watering and drainage issues before work could proceed. I also accept Mr Phillips' evidence that he focussed on productivity delay in preparing Exhibit A: T243.4-.58. However, Mr Phillips conceded that some work was likely done (T243.9) and therefore in my view a reduction is warranted. Doing the best I can on the limited evidence, I would discount the 46 work days referred to by the defendant to 10 days reducing the figure referred to above (230 days) to 220 days.
In relation to the comments in paragraphs 24-26 of the plaintiff's 27 March 2019 submissions, I had some difficulty understanding the analysis of delay days undertaken in paragraphs 31-34 of the defendant's 13 March 2019 submissions. There appeared to me to be some double counting involved. The plaintiff states that in Exhibit A delay days with multiple causes are only claimed once by Mr Phillips. In paragraph 26 of its submissions, Geneville claims that design delays, neighbour delays and cashflow delays lead to a whole day being lost unlike some rain days. In my view, some further reduction is warranted. This is because during excavation and neighbour delays some work could still be undertaken by Mr Phillips of Geneville in attending the site, assisting in the excavation process, paying contractors and suppliers and making preliminary enquiries with sub-contractors in relation to the next stages of the project. On the limited evidence available, I reduce the figure of 220 days referred to in the previous paragraph by a further 20 days to allow for this matter. I also take into account as a factor the potential for the plaintiff to complete work on these days on other projects with which it was involved: T236.45; T242.50.
Accordingly, having regard to Exhibit A, my analysis above, and allowing some time for overlapping and a potential for work on other projects for the plaintiff and its employees, I allow 200 days of delay as established, totalling $203,320 (see the daily figure at paragraph 206 of the Referee's report).
Therefore, the alternative amount under the quantum meruit claim allowed in the light of the evidence, the Referee's report as adopted, the reduction for the pre-contractual period and the submissions is $763,487.02 ($203,320 (for delay) plus $560,167.02) less $219,064.15 (paid by the defendant) and less $923.43 (pre-contractual) totalling $543,499.44. Interest will need to be added.
Again, for the reasons given above, I reject the submission from counsel for the defendant that the defendant paid an additional $22,401 to the plaintiff, not properly reflected in the defendant's records: see written submissions dated 13 March 2019 paragraphs 19-20.

The Cross-Claim

At the commencement of these reasons, I set out a summary of the various pleadings in the matter. I referred to the Cross-Claim filed on 3 May 2017 and the Defence to Cross-Claim filed on 19 May 2017.
The defendant relies on his written submissions on the Cross-Claim issues dated 20 February 2019 and 27 March 2019 and the plaintiff/cross-defendant relies on its (amended) written submissions dated 18 March 2017.
I will now consider each of the claims made in the defendant's Cross-Claim. A number of the claims have already been dealt with by the Referee in her report dated 4 September 2018 which was relevantly adopted by the court on 10 December 2018: Geneville Constructions Pty Ltd v Leslight [2018] NSWDC 384.

The unnecessary works claim

In paragraph 11 of the Cross-Claim, it is alleged that without the request or direction of the defendant and contrary to relevant plans and in breach of the agreement between the parties, six steel tube lined concrete piers were poured in a row running north-south in front of the pool area at the site which offered no benefit to the finished structure.
The Referee considered this claim and noted that the experts all agreed that the concrete piers in question had been constructed in accordance with the instructions of the engineer.
The Referee adopted the agreement of the experts in the matter and found that there was no waste of project finances or time associated with the provision of the piers and that they were not defective: paragraph 67 of Exhibit B. Accordingly, this claim was rejected.
Having regard to the findings of the Referee, this claim in the Cross-Claim is rejected.

Works not carried out in accordance with drawings

In paragraph 13 of the Cross-Claim, it is pleaded by the defendant that the plaintiff was requested and directed by the defendant to undertake/supervise/project manage the set out of starter bars to reinforced concrete fittings on the northern and southern boundaries of the basement at the site and that the starter bars were not correctly placed with a result that the defendant suffered loss and damage.
The Referee found that there was insufficient evidence to support a finding that the location of the starter bars along the southern boundary was defective and rejected the claim: paragraph 74 of Exhibit B. In relation to the position on the northern boundary, the Referee adopted the agreement of the experts, which in her view was consistent with proper building construction, that the reinforcement spacing to the footings on the northern boundary was not defective and that no rectification work was required. Accordingly, the Referee rejected this aspect of the claim: Exhibit B paragraph 78.
As the report of the Referee was adopted, I accept her findings. This part of the Cross-Claim should be rejected. I accept the plaintiff's submissions dated 18 March 2019 on this issue: paragraphs 14-16.

Poor workmanship to rear pool slab

In the Cross-Claim in paragraphs 18-19, the defendant alleges that in breach of the agreement pleaded by him, the pouring of a concrete slab between the rear of the in ground concrete pool and the rear boundary was not carried out in a proper or workmanlike manner.
The Referee noted that no evidence was led as to this allegation. Accordingly, the Referee rejected this part of the claim: Exhibit B paragraph 80.
As the report was adopted by the court, this part of the Cross-Claim is dismissed.

The over excavation claim

In paragraphs 7-10 of the Cross-Claim, the defendant/cross-claimant asserts that the plaintiff did not carry out the site supervision and project management of the site excavation in a proper and workmanlike manner, as the excavation of the basement level of the site exceeded the depth required causing loss to the defendant.
This aspect of the Cross-Claim was considered by the Referee in her report dated 4 September 2018: see Exhibit B paragraphs 43-61. The Referee concluded that should the court find that a clay seam was not encountered by the plaintiff, the cost of the unnecessary excavation was $4,752 and there needed to be a rectification of the over-excavation by spreading and compacting the spoil to the required level which was $1,500 giving a total sum of $6,252. If the excavation was unnecessary, it was a defect in the work performed by the plaintiff. The Referee also concluded that if a clay seam had been encountered, then the additional excavation undertaken would have been appropriate for the purposes of removal of the clay and levelling the site: Exhibit B paragraph 48.
The determination of this issue, according to the Referee, depends on a finding of fact to be made by the court as to whether or not the plaintiff encountered a clay seam at the level to which it should have excavated in ideal conditions.
As I adopted the report of the Referee, this aspect of the Cross-Claim depends on my factual findings on this issue.
In my factual findings above, I accepted and found that the site was not over excavated having regard to the under soil conditions discovered, particularly the clay seam. I accepted Mr Phillips' affidavit evidence on this issue: see paragraphs 38-39 of Mr Phillips' affidavit sworn 13 November 2017. See also the diary entry of Mr Phillips for 11 August 2012: "Costings are very difficult at this stage as we have discovered contaminated fill and rock levels are much deeper than originally thought".
I am therefore satisfied from the evidence and find that a clay seam was encountered in the excavation and thus the additional excavation which occurred was appropriate for the purposes of the removal of the clay and levelling the site. I accept the plaintiff's submissions on this issue: written submissions dated 18 March 2019 paragraphs 3-10.
Accordingly, this aspect of the Cross-Claim is rejected. The defendant appears to accept this conclusion in paragraph 2 of his written submissions in reply dated 27 March 2019. In their joint report, the experts agreed that if the presence of the clay seam was established, excavation to 250mm below the surface would be correct construction and thus not defective: Referee report paragraph 47 and the expert report referred to. I note there was no conflicting factual evidence from the defendant on this issue.

The delay claim

In paragraphs 16-17 of the Cross-Claim, the defendant asserts that in breach of the agreement between the parties, the plaintiff failed to undertake the performance of its services and those of the trades which it supervised in a prompt and timely manner. It is particularised that the work should have been carried out within a period of about three months. It is pleaded that by reason of the breach by the plaintiff, the defendant has suffered loss including additional finance costs incurred over 11 months of $130,295; loss of expected rents for a period of 11 months amounting to $190,000 and additional accommodation costs over 11 months amounting to $52,426, totalling $372,721.
These claims are denied in the Defence to Cross-Claim.
The plaintiff does not seem to challenge the fact that these costs were incurred although it is denied in the Defence to Cross-Claim that the costs were incurred by reason of the alleged breach.
The Referee considered the question of delay in her report. The question addressed was whether or not the construction/excavation/supervision methodology adopted by the plaintiff/cross-defendant was the cause of any delay and, if so, to what degree. The defendant submits that the question of delay was therefore confined and did not involve the Referee considering other factual matters such as weather and Mr Leslight's alleged failure to pay: written submissions dated 20 February 2018 paragraph 18.
In her report, the Referee rejected that there was any delay for which the plaintiff was responsible in relation to there being a disorderly site, the location of the site shed, general sequencing of tasks, excavation and delay generally. These matters were considered in detail by the Referee in paragraphs 83-131 of Exhibit B. It was noted that the plaintiff said that any delay was due to Mr Leslight's failure to pay and to latent site conditions: paragraph 87 of the Referee's report. Overall, the Referee preferred the evidence of the plaintiff's expert Mr Easingwood to that of the defendant's expert Mr Anderson on the various issues: see paragraphs 117-125 and 129-131.
In relation to the allegation of over excavation, the Referee concluded that even if the Court were to find Geneville caused some kind of delay, Mr Leslight had not discharged the onus to establish that either part or all of this was critical to the end date of the project: paragraph 131 of the report. This matter is dealt with in paragraphs 16-28 of the written submissions of the defendant on the Cross-Claim. See the plaintiff's submissions dated 18 March 2019 paragraphs 17-21 and the defendant's written submissions dated 27 March 2019 paragraph 3. Contrary to the plaintiff's submissions, I do not read paragraph 131 of the Referee's report as a general finding as to delay, rather one limited to the over excavation allegation by the plaintiff in the Cross-Claim or at least delays the Referee was asked to consider. See paragraphs 129-130 of the Referee's report cf paragraphs 22-24 of the plaintiff's 18 March 2018 submissions. I accept the defendant's oral submissions on this point. However, I consider the plaintiff's submission to be correct that in relation to the delay asserted in the Cross-Claim the court must be satisfied that any delay caused delay to the critical path and end date of the project.
The defendant/cross-claimant submits that the preparation of the construction program and a critical path for the project is a duty incumbent upon a project manager. It is said that the plaintiff did not undertake the preparation of such programs as it should have: written submissions paragraph 24. This allegation does not appear to have been pleaded as I have pointed out above when I considered delay issues.
It is submitted by Mr Leslight that the work undertaken was delayed by 11 months and it was due to the plaintiff's default not to any default of the defendant. Reference is made to the fact that the plaintiff in its Defence to Cross-Claim admitted paragraphs 4 and 6 of the Cross-Claim: paragraphs 4 and 6 of the Defence to Cross-Claim. In paragraph 6 of the Cross-Claim, it is pleaded that the plaintiff would carry out all supervision, project management and other building services under the agreement between the parties in a proper and workmanlike manner.
In my view and I find, the delays in the project, on the evidence, cannot be attributed to any conduct or default by the plaintiff. First, the plaintiff was never provided with any final plans or drawings by Mr Leslight which were suitable for construction purposes in relation to the proposed buildings. Secondly, a comprehensive geotechnical engineering report was never obtained by Mr Leslight from Mr Adler, geotechnical engineer. The November 2011 report was made without a proper investigation of the subsoil at the Site. The problems with the subsurface conditions at the Site later identified in August 2012, caused delays as I have found above. Mr Leslight should have obtained a further report. I have found this was his responsibility. Thirdly, there were also issues with the underpinning and support of at least one of the neighbours' properties as I have found above. This caused additional significant delays. A resolution of the issue with the neighbour took several months to occur, also as I have found above. This also was Mr Leslight's responsibility as the owner, not Mr Phillips who was the builder and construction manager. Fourthly, there were extensive delays in Mr Leslight paying invoices. Many invoices were not paid on time.
I have made findings above in relation to delays on the Site generally, including in relation to inclement weather. These delays relate to the plaintiff's claim under the quantum meruit. This is a different claim for delay to that in the Cross-Claim: see the last sentence in paragraph 11 of the plaintiff's written submissions dated 27 March 2019 which I accept.
The plaintiff made extensive factual submissions on this issue.
In my view, Mr Phillips' evidence on this issue should be accepted. I found his evidence, including as to the content and preparation of Exhibit A, the delay spreadsheet, to be persuasive and I accept it. I have considered inclement weather issues in paragraphs 154 and following. The weather delays alleged which I did not find established were very limited: see the delays for 8 October 2013, 13 September 2013 and 9 September 2013. As I found in paragraph 166 above, most of the delays cross-examined on appeared to be explicable and warranted by heavy rainfalls in the period preceding the rain day claimed. Overall, I repeat my findings that, on the whole of the evidence, no delays were established which were caused by any conduct or omissions by the plaintiff to justify the allegations in the Cross-Claim. I generally accept the plaintiff's submissions on this issue. In particular, the report of Mr Phillips provided to Mr Leslight by email on 23 September 2013 which states that the three causes of delay since commencement were neighbour issues, documentation issues and funding issues, was justified. I accept paragraph 65-71 of the plaintiff's submissions in chief. I am not satisfied, in relation to the allegations in paragraphs 16-17 of the Cross-Claim, that the plaintiff failed to undertake the performance of its services as agreed and those of the trades which it supervised in a prompt and timely manner.
In addition, there is no evidence that prior to filing the Cross-Claim, the defendant had previously notified the plaintiff of or complained about any alleged delay. This reinforces my view that the delays in the present case were largely due to the defendant (or inclement weather) and not to the plaintiff.
Further, there is no evidence that the delay alleged was a critical delay. Even if, contrary to my findings, the plaintiff's contractual role did extend to providing advice on sub-strata or neighbour issues, I am not satisfied on the evidence that providing the advice would have reduced the period of delay. The onus rested on the defendant to establish this on his Cross-Claim.
However, I reject the allegation of estoppel in paragraph 17 of the Defence to the Cross-Claim as in my view the defendant was entitled to rely on his expert evidence.
In paragraph 17(c) of the Defence to Cross-Claim, the plaintiff says that: "Further that any damage or loss suffered by the Cross-Claimant arising from the alleged delay was unforeseeable and the Cross-Defendant was never aware of any damage or loss (or potential for damage or loss) of the Cross-Claimant."
The Cross-Claim is a claim for breach of contract. This appears to be an allegation that the damages claimed by the defendant are too remote within the rule in Hadley v Baxendale (1854) 156 ER 145. In my view, there is no evidence that the plaintiff through Mr Phillips knew or should have known of the defendant wishing to rent the premises or in relation to the additional accommodation costs. See Mr Phillips' 13 November 2017 affidavit paragraphs 70 and 73. Similarly, it was only towards the end of the project that Mr Phillips became aware that a financier was involved to a significant extent. He had no knowledge of Mr Leslight's financing costs: 13 November 2017 affidavit paragraph 69. For these reasons, although it is unnecessary for me to decide, I am not satisfied in relation to the recoverability of the amounts alleged in paragraph 17 of the Cross-Claim. In other words, such a loss was not a loss which would arise in the normal course of things from a breach of contract or was a loss which was fairly within the contemplation of both parties at the time of contract: see Statewide Developments Pty Ltd v Higgins [2011] NSWCA 35 at [33], [38]-[39] and [59]. I accept the plaintiff's submissions on this issue. The claims are in my view too remote: see paragraph 38 of the plaintiff's submissions dated 13 March 2019.
For the reasons which I have given, I do not consider that any of the delays alleged of 11 months were due to any conduct on the behalf of the plaintiff.
For all of the above reasons, the claims made by the defendant in the Cross-Claim are rejected.

Determination

I thank counsel for the parties for their detailed and helpful submissions. The parties should check the accuracy of my calculations.
The Statement of Claim is upheld and the Cross-Claim is rejected. For the above reasons, I make the following orders: 1. Judgment for the plaintiff in the Statement of Claim proceedings. 2. The Cross-Claim is dismissed; 3. The defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed; 4. Liberty to the parties to apply within 21 days for a variation of the order in (3) above; 5. The parties are to bring in agreed Short Minutes of Order reflecting these reasons and including any claim for interest within 14 days; 6. The exhibits are to be retained for a period of three months.

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: 10 May 2019

Home Building Regulation 2004(NSW)

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