Holcim (Australia) Pty Ltd v Sheds and Garages Plus Pty Ltd

Assessment of Damages

7. Mr Dave’s evidence was that the materials for the sheds were delivered to the plaintiff from the defendant in December 2022. The defendant had also arranged for Williams River Steel to provide structural steel for one of the sheds, which was required to have portion of the roof at 12 metres high. The Williams River Steel was delivered to the plaintiff on about 20 October 2022. All of the materials were delivered in flat packs.

8. Mr Dave had discussions and exchanged emails with representatives of the defendant in November and December 2022. Some of those exchanges involved deficiencies in the safety documentation which the defendant was required to provide before construction could begin. Construction of the sheds was scheduled to begin in January 2023.

9. The defendant ceased responding meaningfully to the plaintiff’s communication after 5 January 2023.

10. Mr Dave became aware shortly before 9 February 2023 that significant items were missing from the materials delivered by the defendant. The delivery company confirmed that it had delivered the entire consignment. Requests to the defendant for engagement on the missing items were not responded to.

11. The plaintiff’s business needs necessitated that it take steps to have the sheds constructed as soon as possible, despite the termination of its contract with the defendant. The sheds had been ordered for the purpose of being constructed as one building for use as a factory which included the housing of a 10 metre tall pipe machine. The factory comprising the two sheds, when complete, was to be 50 metres long, 25 metres wide and, in one section, 12 metres high.

12. Mr Dave sought quotes from three companies to construct the sheds to comprise the factory. The lowest quote was given by Barry Leahy Engineering (‘BLE”), which also had the earliest availability. The plaintiff engaged BLE.

13. BLE ordered the items missing from the flat packs sent to the plaintiff by the defendant. The plaintiff tendered the invoice, dated 28 February 2023, from BLE, which included the charges in relation to the missing items.

14. The charges in relation to the missing items were:

| Affected area | Item Type | Item Description | Supplier | Unit | Price | | Hot Rolled | Admin | Site measure, design and order missing materials | BLE | Per | $3,600.00 | | Hot Rolled | Admin | Design – roof transfer | BLE | Per | $1,800.00 | | Hot Rolled | Admin | Eng cert – roof transfer | BLE (Apex Engineering) | Per | $1,500.00 | | Hot Rolled | Material | Temp bracing purlins (C15015) | BLE (Abolcon) | m | $1,537.20 | | Hot Rolled | Material | Purlins, bridging, cladding & fixings | BLE (Various) | m | $61,175.00 | | Hot Rolled | Material | Add. plates, bracing, bolts, etc. | BLE (Various) | Per | $633.46 | | Hot Rolled | Material | Safety Mesh | BLE | Roll (52m) | $923.62 | | Hot Rolled | Material | Trimangle | BLE (Metroll) | m | $570.24 | | Hot Rolled | Material | Flashings | BLE (GJR Sheetmetal) | Per | $1,990.96 | | Hot Rolled | Material | Gutter & Brackets – High Capacity | BLE (Avro Sheetmetal) | m | $1,596.00 | | Hot Rolled | Material | 150 dia Downpipes & Fittings | BLE (Reece Plumbing) | Per | $730.40 | | Hot Rolled | Material | PA Door incl. hardware | BLE | Per | $2,400.00 | | Hot Rolled | Material | Non-shrink grout | BLE (CDA Eastland) | Per | $124.99 | | Kit Shed | Material | 32 x 1.6 Bracing Strap (under supply) | BLE (Metroll) | Roll (50m) | $126.00 | | Kit Shed | Material | Gutter & Brackets – High Capacity per design | BLE (Avro Sheetmetal) | m | $3,124.80 | | Kit Shed | Material | 150 dia Downpipes & Fittings per design | BLE (Reece Plumbing) | Per | $1,189.96 | | | $83,022.62 |

15. BLE was required to undertake some additional design and engineering work to enable the factory to be completed. The defendant had failed to provide information about the connection point between the two sheds and was not responsive to requests to provide that information. BLE advised the plaintiff that a structural engineering review of the connection point was needed. The plaintiff engaged the Laker Group to provide the structural review and recommendations about the connection point. The plaintiff paid the Laker Group $1,500 + $150 GST = $1650 for this work (see Laker Group invoice 14 February 2023 JD-1 p 48).

16. When the plaintiff applied to the local Council for a construction certificate, the Council required that it be given drawings of the factory comprising the two sheds joined, including elevations. The defendant had not provided those drawings, and was required to under the contract.

17. The plaintiff engaged BC Civil Consultants to provide the drawings. BC Civil Consultants provided an invoice for this work in the sum of $1,231.82 + $123.18 GST = $1355, which the plaintiff paid to BC Civil Consultants. A further invoice for additional footing design advice from BC Civil Consultants was received for $450 + $45 GST + $495, which the plaintiff also paid to BC Civil Consultants.

18. The plaintiff did not press its claim for the BC Civil Consultants invoices at the hearing.

19. BLE began the construction of the factory on 24 February 2023. It completed the work in March 2023. The machinery was then installed and the factory began operating on about 1 July 2023.

20. The defendant’s quote for the project, given on 23 December 2021, was $364,4300, comprising $95,700 for construction costs and $268,730 for the cost of the shed components (JD-1 CB p 3).

21. The plaintiff paid a deposit of $134,365 to the defendant on 28 January 2022. The plaintiff subsequently paid $268,730 being the total price of the materials (see the affidavit of Mr Dave at paragraph 37).

22. The plaintiff claims the sum of $84,300 on account of additional construction costs (see Exhibit DK-1 p 41-44). This figure was arrived at by taking the total cost of construction by BLE and subtracting the component of the defendant’s quote attributable to construction work (which is taken to be the amount the plaintiff would have paid had the contract not been breached and terminated).

23. The plaintiff submitted that the applicable principles for the assessment of damages were as follows, from Cessnock City Council v 123 259 932 Pty Ltd [2024] HCA 17; 418 ALR 304 at [117]:

… it is now well established that there is only one measure of consequential losses for a breach of contract. As many decisions of this Court have held,[123] that is the measure that provides a sum of money that places the plaintiff "in the same situation ... as if the contract had been performed".[124] This description of damages for breach of contract necessarily requires the rejection of any notion that recovery of contract damages for consequential losses could aim to put the innocent party in the position they would have been in if there had been no contract at all. There will be cases where the impossibility of a precise calculation of damages, and the "once and for ever" nature of damages,[125] might mean that an award of damages could later be discovered to have overcompensated a plaintiff by providing the plaintiff with more than they would have received if the contract had been performed. But an award of damages for a breach of contract should not permit a court knowingly to allow a plaintiff to avoid a bad bargain by being put in the position they would have been in if the contract had not existed.[126]

24. The plaintiff submitted that it had mitigated its loss by limiting the additional work as far as possible, by obtaining three quotes and by accepting the lowest of the quotes. I accept that the plaintiff mitigated its loss in so far as that was possible.

25. The plaintiff also seeks interest to the date of the filing of its Statement of Claim in the sum of $3,000.83.

26. The plaintiff is entitled to interest from 1 May 2024 to 1 June 2025, which is $15,542.71.

27. The plaintiff claims filing fees of $2,013 and legal costs of $1,711.

28. All of the expenses claimed are allowable.

Conclusion and orders

29. The following order will issue:

30. The defendant is to pay to the plaintiff damages for breach of contract in the sum of $187,516.16, inclusive of interest to 1 June 2025.

31. The defendant is to pay the plaintiff’s costs of the proceedings in the sum of $1,711 and the filing fee of $2,013.

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