1. Mr Forrest of Counsel appeared for the applicant and Mr Lipinski of Counsel appeared for the respondent[2]. Mr Verblun (the director) and Mr Pinto (the construction manager) gave evidence on behalf of the applicant and Mr Gulenc (the general manager) and Mr Yemez (the project manager) gave evidence on behalf of the respondent.
2. The parties then obtained transcript of the hearing, prepared written closing submissions and appeared before me to present their closing arguments.
3. Regrettably there has been a considerable delay between the hearing and this decision. My time has been diverted addressing matters arising from the Covid-19 situation at the Tribunal.

IS THE APPLICANT ESTOPPED FROM BRINGING THIS CLAIM?

1. The respondent submitted that the applicant is estopped from recovering any of the damages claimed by reason of the operation of the doctrine of Anshun estoppel. In summary, an Anshun estoppel will arise in circumstances where a party to a subsequent proceeding seeks to litigate a claim or defence "which could and should have been litigated in the earlier proceedings"[3].

1. The respondent relied on the following agreed facts:

1. On 11 October 2017 the respondent made an adjudication application under the Building and Construction Industry Security of Payment Act 2000 (Vic) ('SOPA') seeking payment for works carried out under the subcontract. In October 2016 the adjudicator appointed under that Act determined that the respondent was entitled to payment of $50,676.64 ('the adjudicated amount'). 2. The applicant failed to pay the adjudicated amount and on 10 November 2017 the respondent obtained judgement in the County Court in the sum of $56,849.10, comprising the adjudicated amount and costs, fees and interest.

1. On 7 December 2017 the respondent secured payment of the County Court order by means of a garnishee order, recovering $58,849.10 including interest and costs ('the garnishee payment').

1. On 21 December 2017, the applicant, being unaware of the garnishee payment, paid $56,274.11 to the respondent ('the further payment'). 2. On 19 April 2018 the applicant filed a complaint in the Melbourne Magistrates Court asserting, relevantly, that: 1. the applicant had made the further payment to the respondent in December 2017; 2. at the time of making the further payment the applicant had been unaware of the garnishee payment; and 3. the payment of $56,274.11 2 the respondent exceeded "any sum due and payable either at that time or at any time since by the [applicant] to the [respondent] by the sum of $33,756.57". 3. On 15 May 2018 the respondent paid the applicant $31,430.71 and did not enter a defence to the Magistrates Court proceeding. 4. On 29 May 2018 default judgment was entered in the Magistrates Court against the respondent for $2325.86 and interest and costs. That default judgment was set aside in June 2018 following a settlement agreement between the parties.
2. The respondent contends that substantially the same facts arise in both the Magistrates Court and the VCAT proceeding, in that both proceedings are about amounts "due and payable" under the subcontract. Accordingly the applicant should have raised the matters which are the subject of this proceeding in the Magistrates Court.
3. It says that upon completion of the subcontract works, there are 3 items that were due and payable under the subcontract, being:

1. the subcontract price of $1,227,600 which was due and payable by the applicant to the respondent in accordance with the progress payment regime set out under the SOPA; 2. liquidated damages incurred by the respondent by reason of late completion, as agreed in the contract; and

1. security of $30,690 due and payable by the respondents to the applicant 30 days after completion of the works. The refund of the security amount was due and payable by the applicant to the respondent 12 months after practical completion.
2. On 31 March 2018, around 12 months after practical completion, the respondent caused its final progress payment to be made, which sought the refund of the security amount of $30,690.
3. At this time, all amounts provided for under the contract had become due and payable. On 19 April 2018, 19 days after all amounts were due and payable, the applicant commenced the Magistrates Court proceeding claiming $33,756.57 as the amount "due and payable" to it by the respondent on the grounds that the Further Payment:

"exceeded any sum due and payable either at that time or at any time since by the plaintiff to the defendant by the sum of $33,756.57".

1. The respondent also submits that the fact that in the Magistrates Court Proceeding the applicant claimed a different amount to the Further Payment indicates that that proceeding was not simply a claim for monies had and received by mistake. The further payment was $56,274.11 while the Magistrates Court claim was for $33,756.57. The respondent contends that this indicates that the Magistrates Court proceeding either did or could have included amounts otherwise due under the subcontract.
2. Further, there is no reason why the liquidated damages claimed in the current proceeding could not have been determined in the Magistrates Court proceeding and it was unreasonable for the applicant not to do so.
3. Lastly, the respondent's general manager, Mr Gulenc, said in his evidence that he had formed the belief that the Magistrates Court proceeding was issued to "deal with all outstanding matters" between the parties.

1. In response, the applicant submits that the Magistrates Court proceeding and the VCAT proceeding did not involve "substantially the same facts" as alleged by the respondent. Instead, the facts in each proceeding were entirely different in the following ways:

1. the Magistrates Court claim was a claim for money had and received based upon the sums referred to in the payment schedule issued under the SOPA which had had been overpaid to the respondent; 2. the facts arising in the Magistrates Court proceeding relate to a payment claim made by the respondent pursuant to the SOPA; the facts arising in the VCAT proceeding do not concern that payment claim or any payment claim under that Act;

1. the facts arising in the VCAT proceeding relate to a claim by the applicant for back‑charges and liquidated damages. Those claims were expressly excluded from the SOPA adjudicator's determination and the Magistrates Court proceeding.
2. Moreover, the settlement of the Magistrates Court proceeding was agreed on the basis that the respondent was to pay the applicant $4487.28 with the judgment to be set aside with no order as to costs. The applicant has never executed a release in favour of the respondent to release it from all claims made by the applicant arising out of or in respect of the Alma Road project and the subcontract.
3. Further, although Mr Gulenc said in his evidence that he had formed the belief that the Magistrates Court proceeding was issued to "deal with all outstanding matters" between the parties, that is contradicted by his earlier evidence that the settlement of the Magistrates Court proceeding was a resolution of only the Default Judgment[4]. In any event, there were no objective grounds for Mr Gulenc to form such a belief based on the evidence provided.

1. There was no dispute between the parties that three elements must be satisfied in order to establish an estoppel on the basis of the Anshun principles[5]:

1. it must appear that the same, or substantially the same, facts will arise for consideration in the second, as in the first, proceeding; 2. the cause of action which a party seeks to assert in a later proceeding must be one that could have been raised in the earlier proceeding; and

1. it must have been unreasonable for the party seeking to raise an issue in later proceedings to not have raised the issue in the earlier proceeding, which assessment necessarily will depend almost entirely on the circumstances of the case.
2. In respect of the first and second limbs of the test, I do not accept that the same or substantially the same facts arise for consideration in this proceeding as did in the Magistrates Court proceeding. I also do not accept that the cause of action asserted in this VCAT proceeding could have been raised in the earlier proceeding.
3. The Magistrates Court complaint was a claim for the repayment of monies paid under mistake and wrongfully retained by the respondent. Mr Gulenc admitted that he knew the monies had been paid in error but did not return them until after the Magistrates Court proceeding was commenced.
4. The mistaken payment was made to comply with a County Court order made under s28R of the SOPA. The County Court order enforced an adjudication conducted by Mr Thyer, an adjudicator appointed under the SOPA. The role of the adjudicator was to consider claims which had been identified in the payment schedules issued under the SOPA and which were not 'excluded items' under that Act. Mr Thyer determined that he had no jurisdiction to consider the items claimed in this proceeding in his adjudication[6]. The SOPA prevented him from considering these claims.
5. On the other hand, the Magistrates Court complaint unambiguously described the claim made there as a repayment of monies paid under mistake. The Statement of Claim stated (relevantly):
   1. On or about 21 December 2017, the plaintiff made an online payment of $56,274.11 to the defendant's bank account ("the payment").
   2. At the time of making the payment, the plaintiff was unaware that the defendant had, on or about 7 December 2017, by garnishee order, obtained payment in the sum of $58,849.10 from an account belonging to the plaintiff with the National Australia Bank. The plaintiff therefore made the payment by mistake.
   3. The payment exceeded any sum due and payable either at that time or at any time since by the plaintiff to the defendant by the sum of $33,756.57 ("the excess").
   4. The defendant, despite being aware of the matters set out herein above, has neglected, failed or refused to repay the excess or any part thereof to the plaintiff.
6. Mr Lipinksi appropriately referred me to the comments of the High Court in South Australian Cold Stores Ltd v Electricity Trust (SA), made in relation to a claim for payment by mistake:

the payee cannot justly retain the money paid to him because it would not have come to his hands if it had not been for a false supposition of fact on the part of the payer causing the latter to believe that he was compellable to make the payment or at all events that he ought to make it. [7]

1. In my view, it is obvious from the claim made in the Magistrates Court, and the issues to be considered in that proceeding as set out by the High Court, that the cause of action in this VCAT proceeding is quite different.
2. This proceeding concerns a breach of the contract between the applicant and the respondent[8]. The cause of action in the Magistrates Court was for a payment made under mistake, which is quite different to the claim for breach of contract made in this proceeding. Further, both those claims are different again to the cause of action under the SOPA considered by Mr Thyer and enforced by the County Court.
3. Further, it is superficial to say that the same facts arise in each proceeding and therefore an Anshun estoppel may arise. While the disputes arose from the same building project, the factual matters and evidence to be considered in each of the proceedings has very little overlap.
4. The relevant facts in this proceeding are the matters contained in the witness statements and Tribunal Book tendered, and which relate to the issues in dispute as set out at paragraph 7 above. These issues involve a much broader range of enquiry then simply whether or not there was a false supposition of fact on the part of the applicant when they paid the respondent twice in December 2017. I do not agree with the respondent that the facts in each proceeding are the same or substantially the same.
5. As for the third limb of the test, looking at the reasonableness of the applicant's actions, it is not enough for the respondent to show that the claim could have been raised in the Magistrates Court proceeding. Instead, the respondent must satisfy me that it was unreasonable for the applicant to have not raised the issue in the earlier proceeding. I do not accept that contention.
6. The respondent did not lead any evidence about the reasonableness of the applicant's actions. The respondent did not cross-examine any of the applicants witnesses about the reasonableness of their actions. At its highest, they relied on the opinion of Mr Gulenc that he had formed a belief that the Magistrates Court proceeding covered all outstanding claims. At paragraph 49 of his witness statement he stated "as far [as the applicant's] own documents filed at Court were concerned, the whole purpose of the proceeding was to finally resolve all outstanding amounts under the Contract."
7. I do not accept Mr Gulenc's evidence that he had formed that opinion between 19 April and 29 May 2018. There is no contemporaneous evidence to support the statement at paragraph 54, noting that it was prepared over a year after the events.
8. Further, looking at the wording of the Magistrates Court Statement of Claim objectively, a reasonable person in Mr Gulenc's position, properly advised, could not have been led to believe that the claim also included a reconciliation of liquidated damages and back-charges.
9. Further, Mr Gulenc admitted in his evidence that he knew the respondent had wrongly held on to the monies paid under mistake. He said (at paragraph 51 of his witness statement) that the respondent settled the Default Judgment in the Magistrates Court proceeding by repaying those monies. Tellingly, his evidence was silent about whether or not he instructed his solicitors to require a release for any other claims as part of the settlement. I consider that it is ingenuous for Mr Gulenc to now say in his witness statement that he thought all matters had been included in the Magistrates Court complaint.
10. Further, the Magistrates Court proceeding was settled quickly, efficiently and cost effectively. Had the matters canvassed in this VCAT proceeding been included in the Magistrates Court, the proceeding there would have been larger, more complex, more costly and much slower. In circumstances where the applicant was simply seeking a refund of monies wrongly retained by the respondent, I am satisfied that it was not unreasonable for it to concentrate first on seeking orders requiring the respondent to hand back the monies wrongly held in the most efficient and cheapest manner, before commencing a separate proceeding to address the outstanding issues which had not been covered by the SOPA adjudication.
11. Based on these findings, I do not accept that an Anshun Estoppel applies to the claims made in this proceeding.

1. In order for the respondent to access the site with its large piling equipment, the applicant had to arrange with the relevant electrical authority, Powercor[9], to shut down power to the high-voltage electrical power lines in Alma Road. The programming of the subcontract works included a shutdown of 6 days. However due to the respondent's failure to provide the necessary equipment on time, a further 4 days of shutdown was required, at an extra cost of $8525.67.

1. The applicant relies on the following facts, which largely were not disputed by the respondent (apart from whether or not the applicant has paid Powercor). Mr Verblun and Mr Yemez both agreed that prior to the execution of the subcontract there had been a meeting between representatives of the applicant, the respondent, the power company and Browns Piling. During that meeting it was agreed that the high-voltage power lines in Alma Road would be shut down on 10, 13, 18, 19, 20 and 21 October 2016.
2. On 3 October 2016 Powercor rendered an invoice to the applicant in the sum of $14,067 for the programmed shut down of electricity along Alma Road to take place on 10, 13, 18, 19, 20 and 21 October 2016. Mr Pinto gave evidence that this invoice had to be paid in advance and that it was.
3. On 4 October 2016 Mr Nissen (the contract administrator for the applicant) sent an email to the respondent reminding them of the power shutdown dates. Mr Verblun sent a further email advising the respondent that re-booking a date may take weeks to organise and the piling works had to proceed on the agreed dates.
4. The respondent commenced work on site on 8 October 2016, using their own piling subcontractor. According to Mr Verblun and Mr Pinto, the piling equipment brought to site that day was too small for the required scope of works to be performed. As a result, the respondent was unable to carry out the piling work on the dates previously arranged with the power company.
5. On 14 October 2016, Mr Verblun met with Mr Yemez and Mr Pinto to discuss the inadequacies of the piling subcontractor's equipment. Mr Yemez agreed to arrange a second rig capable of drilling the required pile holes to arrive on 19 October 2016. Mr Verblun said that he told Mr Yemez that the next shutdown of the power lines in Alma Road could not occur until 18 November 2016 and that the cost of any further shutdown and resulting delays to the respondent's works would be at the respondent's cost.
6. On 19 October another piling contractor attended the site on behalf of the respondent. However according to Mr Verblun, its piling rig could only drill to a depth of 6 m, while the required depth was approximately 11 m. Mr Verblun then contacted Browns Piling directly and, with the consent of the respondent, made arrangements for Browns to carry out the piling work.
7. Browns commenced the piling works on 21 October and continued on 16, 17, 18, and 23 November. The applicant arranged with Powercor for a second series of shutdowns of the power lines in Alma Road to take place on 16, 17, 18 and 23 November 2016. Mr Verblun's evidence was that the applicant had to pay Powercor a further $8525.67 for these extra days, which it did.

1. The respondent submitted that for this claim to succeed, there must have been a term of the subcontract that the respondent would use all appropriate equipment when and where necessary, in a timely fashion to complete the work, with the minimum expense to the applicant by way of power shutdown, including in particular sourcing and providing a suitable rig. It contended that the principles set out in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 have not been satisfied and therefore such a term should not be implied into the subcontract.
2. In the alternative, the respondent contended that the applicant has proven damages for only one extra shutdown day, as the tendered Powercor invoices do not prove that the applicant actually paid for the three unused shutdown days in October.

1. I agree with the respondent's submission insofar as it says there must be a term of the subcontract that the applicant can rely on in holding the respondent liable for the extended power shutdown. However I reject its contention that such a term would have to be implied. There is an express term of the subcontract (clause 5.2) which states as follows:

5.2 Except insofar as this subcontract expressly states otherwise, the subcontractor shall also

5.2.1 provide at its own cost and expense all labour, materials, tools, implements and plant and all other things and matters necessary for the proper carrying out and completion of all of its obligations under the subcontract; ...

1. The evidence of all parties was that the shutdown dates had been agreed prior to the subcontract being signed. Reminders were sent by the applicant throughout October. The respondent was or should have been aware of its obligation under the subcontract to provide all materials, tools, plant, and anything else necessary to meet those dates. There is no evidence disputing that the respondent failed to do so. Accordingly, I am satisfied that the respondent is in breach of the subcontract by failing to provide the necessary equipment to ensure that the power shutdown dates were not wasted.
2. If I am wrong and there is no express term of the contract to that effect, I am nevertheless satisfied that it is appropriate to imply a term of the subcontract that the respondent would provide all appropriate equipment for it to carry out the excavation works in a timely manner. That includes providing the appropriate equipment on the dates agreed for the power shutdown. To adopt the respondent's description of the implied term, I am satisfied that there was an implied term of the subcontract that:

The respondent would use all appropriate equipment when and where necessary in a timely fashion to complete the work with the minimum expense to the applicant by way of power shutdown, including in particular sourcing and providing a suitable rig.

1. The conditions under which a term may be implied as set out in BP Refinery have been satisfied. Based on the following facts, I am satisfied that the proposed term is reasonable and equitable, and is necessary to give business efficacy to the subcontract. It is so obvious as to go without saying, and the term as expressed by the respondent is clear. The implied term is not broad ranging, it is limited to the circumstances of the power shutdown and the sourcing and provision of a suitable rig. Further, the proposed term does not contradict any express term of the contract. The following factors were not challenged and I accept them as the basis for implying the proposed term:

1. the piling works were to be undertaken as part of the construction of the works; 2. the respondent agreed to achieve the specified depths of excavation for the piles;

1. it was necessary for the applicant to engage a specialist subcontractor with specialist piling equipment to carry out the piling works;

1. it is trite that in order for the subcontract works to be performed, the piling equipment and machinery should be fit for purpose, so as to achieve the required design depths for the piles; 2. the relationship between the applicant building contractor and the respondent specialist piling subcontractor under the subcontract was of a business or commercial nature; 3. the parties engaged in pre-contractual discussions concerning the arrangements for shutting down power around the site; and 4. the fact that the respondent knew that the applicant was paying Powercor for the shutdown.
2. I am also satisfied that the implied term was breached by the respondent, causing a loss to the applicant of extra payments made to Powercor. The respondent did not dispute that the electricity had been booked to be shut down on 10, 13, 18, 19, 20 and 21 October 2016, or that it was actually shut down on 16, 17, 18 and 23 November 2016. I accept the evidence of Mr Verblun that the extra cost was incurred[10]. I also accept the evidence of Mr Pinto (given during cross examination) that the applicant has paid Powercor for 10 days of shutdown and that no credit was received for the unused days.
3. Accordingly, I am satisfied that the respondent is in breach of the subcontract and is liable to the applicant for the extra payments made to Powercor of $8525.67.

1. The applicant's claim for payment of $22,000 arises from a variation to the subcontract which was agreed on 31 January 2017, and was recorded in writing in a letter dated 9 February 2017, and signed 20 February 2017 by both parties. There is a dispute over the interpretation of the terms of the variation as set out in that letter.
2. The relevant clauses are as follows:

As per the site meeting held... on the morning of 31/01/17 the below was noted and agreed to as a variation order to the contract:

• Straightline Contractors was contracted to complete the works by close of business January 31st, 2017
• Platinum approved 3.5 days of EOT's due to inclement weather, delaying the completion of works to February 4th, 2017
• Straightline Contractors will have a revised completion date of February 18th for their basement contract works under the following conditions:
  • Straightline will have the following sum deducted from the contract amount; total $34,000 - $12,000 (agreed cap of liquidated damages Feb 7th - 18th) = $22,000 reduction
  • Straightline will carry out [extra break pour works additional to the subcontract works] by March 4th, 2017 ...

1. The applicant submits that the wording of the agreement is clear and unambiguous, namely that "the sum of $22,000 was to be deducted from [the respondent]'s contract sum payable".[11]
2. On the other hand, the respondent submits that the Tribunal should interpret the variation as follows:

1. the applicant pay the respondent $34,000 for the detailed excavation works; 2. liquidated damages for the period between 7 February 2017 - 18 February 2017 are capped at $12,000;

1. the amount that the applicant owes the respondent for the detailed excavation works ($34,000) would be offset against the amount the respondent owed the applicant for the liquidated damages (agreed cap of $12,000); and

1. accordingly the applicant is required to pay the respondent $22,000 more than the price specified in the subcontract.[12]
2. It is well-established law that where there is a written contract that appears on its face to contain the entire agreement between the parties and contains no ambiguity then it is not generally permissible to lead evidence to add to, vary or subtract from the terms of the document.[13]
3. I am satisfied that there is no ambiguity in the express language of the letter. To me, it is clear on its face that the letter says:

1. the respondent was late in completing the subcontract works, 2. the applicant would agree to a further extension of time to complete the subcontract works to 18 February 2017 (instead of 4 February),

1. on the conditions that 1. the respondent would carry out further works (extra break pour works additional to the subcontract works), and 2. instead of $34,000 for liquidated damages being deducted from the subcontract price, the deduction would be reduced to $22,000.
2. I note there is a possible confusion about the effect of the words "$12,000 (agreed cap of liquidated damages Feb 7th - 18th)", in that they could be read as meaning that the amount of liquidated damages was to be capped at $12,000. That would have the effect of making the clause mean that the amount the respondent had to credit the applicant had been reduced by $22,000, instead of to $22,000. However no party put this as a contention and so I do not consider it any further.
3. Accordingly, without having regard to any extrinsic evidence in interpreting the variation agreement, I am satisfied that the respondent is liable to the applicant for liquidated damages for the period from 4 February to 18 February 2017 of $22,000.
4. In case I am wrong and the document is not plain on its face, I have also considered the evidence given concerning the interpretation of the variation. Having done so, I am satisfied that the meaning of the variation is as contended for by the applicant, and not the interpretation suggested by the respondent. In particular, I have taken into consideration the following matters.
5. There is no dispute that the respondent's works were late. Under the subcontract, they were required to be completed by 31 January 2017. That date was extended to 4 February 2017. Also under the subcontract, the respondent was required to pay the applicant $2000 per day for liquidated damages. The parties met on 31 January and the respondent provided a program which showed the projected completion date for the subcontract works would be 18 February. Applying the contractual liquidated damages to that delay, the respondent would owe the applicant $34,000 (from 4 to 18 February).
6. There were other detailing works separate to the subcontract which needed to be undertaken to complete the foundation, including excavations for the crane base, the lift core and the stair shaft. These additional detailing works had to be completed to enable the concrete pours before each level of the basement floors could occur. The applicant had intended to have these carried out by other contractors but considered that it would be more convenient and could minimise the respondent's delay to engage the respondent to carry out the additional detailing works. They are referred to as 'break pours' or 'detailed excavation works' by the parties.
7. Those were the circumstances under which the agreement was reached on 31 January. Each of Mr Verblun, Mr Pinto and Mr Yemez agree that they met on that day and each stated that the agreement was recorded in the letter which was ultimately signed by the parties on 20 February.
8. Mr Verblun's version of the agreement as set out in his witness statement was not challenged in cross-examination. Mr Verblun's evidence was that the respondent was late in completing the subcontract works and was liable to pay liquidated damages for the period 4 - 18 February 2017. He said this was 17 days at $2000 per day, totalling $34,000. He said the applicant was prepared to extend the date for completion of the works under the subcontract to 18 February and was prepared to deduct $12,000 from that entitlement to liquidated damages as a gesture of goodwill. This left a balance payable by the respondent to the applicant of $22,000 for liquidated damages to 18 February 2017.
9. I note the arithmetical inconsistency in Mr Verblun's evidence, as there are not 17 days between 4 and 18 February. At best there are 15, even if the start and end dates are both counted. While a submission was made about this inconsistency, it was not put to Mr Verblun in cross examination. I am not prepared to make a finding that Mr Verblun's evidence is not credible based only on an untested submission. Further, while I note there is an inconsistency if the dates are 4 and 18 February, I also note that the original completion date under the subcontract was 31 January 2017 (as set out in the first sentence of the letter). From 1 February to 18 February there are in fact 17 days. The issue being discussed on 31 January was the delay to the works. Had the issue been put to Mr Verblun in cross examination, it is quite possible that his explanation would have been that the discussion on 31 January took into account liquidated damages running from 1 February. Accordingly, I am not satisfied that there is a sufficient basis to make a finding that this inconsistency alone negates the rest of Mr Verblun's evidence or the basis for the claim.
10. Mr Pinto's version of the agreement as set out in his witness statement was also not challenged in cross-examination. Mr Pinto's evidence was that the respondent's works were delayed, an agreement was reached at the meeting on 31 January to "a revised completion date of 18 February 2017 for the works under the Subcontract on the conditions set out in the letter" and that the respondent "agreed to perform additional detailing works by three pour breaks on the agreed dates". He said "we agreed to deduct from the liquidated damages payable as a result of extending the date for completion of the original works under the Subcontract to 18 February 2017 the sum of $12,000 leaving a balance of $22,000 for liquidated damages to the date of 18 February 2017."
11. In his written witness statement, Mr Gulenc said

"The material terms of the Variation were, inter alia, as follows:

(b) the sum of $22,000 would be credited in favour of Platinum on account of an agreed cap of liquidated damages owing to delays from 7 February to 18 February 2017"

1. He sought to amend that evidence during the hearing, saying that he was incorrect in that statement and what he meant to say was that the agreement meant that $22,000 should be paid to Straightline.
2. The only primary evidence in support of the respondent's contention was contained in the reply witness statement of Mr Yemez. I do not accept his version of the variation agreement, for the following reasons.
3. The first time that the respondent's contented interpretation has been raised in this proceeding appears to be in Mr Yemez's reply witness statement. It is not pleaded in the Points of Defence. Instead, in response to the allegation that "in lieu of any claim for liquidated damages up to 18 February 2017, the sum to be paid to the respondent pursuant to the subcontract would be reduced by $22,000" it pleaded that Straightline:
   1. denies the allegations
   2. says that Platinum agreed to abandon any right to claim liquidated damages under the Amendment Contract [i.e. the variation].
4. Further, at paragraph C of the Points of Defence it pleaded:

The relevant material terms of the Amendment Contract were that:

1. straight-line agreed to provide additional assistance to Platinum's plumbers, steel fixes and form workers at the site with minor works such as lifting, cleaning and machine work (additional services); and
2. in consideration for the Additional Services, Platinum agreed to abandon any of its rights to claim penalties including liquidated damages under the Contract.

1. If the respondent genuinely believed that the variation meant it was to be paid $22,000, it is surprising that this was not pleaded in its Points of Defence. It is also surprising that the first time it is raised is in a reply witness statement. Three of the four witnesses (including Mr Gulenc for the respondent at first instance) agreed on the meaning, that the contract price was to be reduced by $22,000.
2. I do not accept Mr Gulenc's oral evidence. During cross examination he conceded that he had not been present at the meeting on 31 January and that his understanding of the agreement was only what he had been told. He confirmed that he had read and considered the letter of 9 February carefully and gave approval for it to be signed on 20 February. He gave no explanation of why he had approved a witness statement which he now says was incorrect.
3. I also do not accept Mr Yemez's version of the agreement. The letter went through a number of drafts prepared collaboratively by Mr Nissen (for the applicant) and Mr Yemez (for the respondent) between 7 and 20 February. In his primary witness statement Mr Yemez confirmed that he was satisfied that the letter reflected the agreement that the parties had reached on 31 January. The various drafts of the letter were tendered. Mr Yemez confirmed that he had inserted parts of the letter and reviewed it carefully before recommending to the director of the respondent that it be signed. At no time did he (or anyone else from the respondent) seek to change the phrase "Straightline will have the following sum deducted from the contract amount", or to change the phrase "$22,000 reduction".
4. Had the agreement been as now contended by the respondent, Mr Yemez had ample opportunity to amend the wording of the letter. Instead, when it was put to him that the word "reduction" used in the letter cannot have the meaning of an "adjustment" such that $22,000 should flow to the respondent instead of to the applicant, the only explanation he could provide was that there "must be a mistake in the document". That is inconsistent with his earlier confirmation that the letter was correct.
5. In cross examination it was put to Mr Yemez that his contention that the $22,000 should be flowing to the respondent was a new position, arrived at after the applicant's witness statements had been served. He denied this and said that is the way that the progress claims had been put. In my view, that comment provides the likely explanation for the submission now being made by the respondent. It appears that the respondent or its legal advisers may have been confused by the SOPA adjudication award which allowed the respondent a payment of $22,000 for "detailed excavation of footings" as a variation. The respondent had claimed this amount in its payment claim of August 2017, and the position of both parties in the adjudication was that this amount was due to the respondent for the variation works carried out. Mr Thyer allowed the item in his Adjudicator's Determination and it has been paid by the applicant. Both parties also agreed before Mr Thyer that the question of liquidated damages was not adjudicable under the SOPA.

Whether the respondent has genuinely misunderstood this claim or has knowingly withheld payment, there is no basis for the current submission that no liquidated damages are payable.

1. Finally, I note the respondent's submission that any ambiguity in the letter should be interpreted adversely to the applicant, under the contra proferentum rule. There is no basis for that submission, in circumstances where there is no ambiguity in the letter, or if there is, it was drafted equally by the respondent and the applicant.

LIQUIDATED DAMAGES - SUBCONTRACT WORKS FOR 11-15 MARCH 2017 - $10,000;

1. In the variation letter signed 20 February 2017 it was agreed that the respondent would be given an extension of time (EOT) to 18 February to complete the subcontract works, it was not entitled to submit further EOT claims for the period February 3 - 18, it was entitled to submit EOT claims for approval during the period of 19 February - 4 March and liquidated damages would apply from 10 March onwards capped at $2000 per day. The relevant clauses stated as follows:
   • Straightline Contractors are entitled to submit EOT's to Platinum for approval during the periods of Feb 19th - March 4th, 2017
   • Straightline Contractors are not entitled to submit EOT's to Platinum during the periods of Feb 3rd - Feb 18th, 2017
   • Liquidated Damages still apply to Straightline Contractors for each day the project is handed over late starting COB March 10th onwards capped at $2000 per day.
2. Mr Pinto's evidence was that on 16 March 2017 he and Mr Yemez agreed that, in return for the respondent performing some further minor works, the applicant would agree to waive liquidated damages in respect of the completion of the subcontract works from 16 March 2017 onwards. Mr Pinto did not agree to waive the applicant's right to liquidated damages which existed up to 16 March. Nor did he agree to waive any liquidated damages in respect of the break pours 1, 2 and 3 or the $22,000 previously discussed.
3. Accordingly this claim is for liquidated damages between the period 11 March (in accordance with the 20 February variation) and 16 March 2017 (in accordance with the 16 March agreement). The subcontract provides the rate of $2000 per day.
4. The respondent's defence is that the parties agreed on 16 March 2017 that any accrued liquidated damages to that date would be abandoned or waived, in return for the respondent carrying out additional work.
5. Mr Yemez's evidence was that he agreed that the works were not complete as at 16 March 2017, that he met with Mr Pinto and he agreed that the respondent would use its machinery to "assist other contractors on site with minor works such as lifting, cleaning and machinery work." His version of the agreement was that in consideration for the additional works, the applicant "would abandon any of its rights to claim penalties including liquidated damages under the contract." He clarified that statement in his reply witness statement to state "we both left the meeting on 16 March 2017 with a common understanding that any liquidated damages (past and present at the time) would be abandoned or waived."
6. Mr Yemez said he sent an email to Mr Pinto that day, confirming the agreement. The email relevantly stated:

As discussed and agreed on site between yourself and I, I will provide assistance to your plumbers, steelers and form workers with minor works such as lifting, cleaning and machine work whilst on site in return for nil penalties on the contract. We are here to work together and assist yourself with catching up on other aspects of the project...

1. The respondent submits that this email provides conclusive proof of an agreement by the applicant to waive all accrued liquidated damages. They say it was not answered by the applicant. I do not accept that submission nor the contention put by the respondent, for the following reasons.
2. I prefer the evidence of Mr Pinto to Mr Yemez. Mr Pinto's evidence in his witness statement was detailed and provided a plausible explanation for the agreement. He said that the extra works that the respondent agreed to perform were minor and "had a value of a few thousand dollars at the most. Their value was in no way equal to the value of the liquidated damages Straightline owed to Platinum as at 16 March." The amount owed at that date was approximately $60,000[14]. I consider it more likely than not that the applicant would not have agreed to waive more than $60,000 worth of liquidated damages in return for the respondent's assistance with minor works with "a value of a few thousand dollars at the most".
3. Further, Mr Pinto's evidence was not shaken during cross-examination. His evidence was that there was "a good week or week and a half" of work to go, as at 16 March. He provided photographs to support that view, and a chain of emails from him to Mr Yemez leading up to the agreement. One of these emails was that of 14 March at 4:51 pm, in which Mr Nissen placed on record that the "only item Straightline claim to have completed is finished is prep for pour 1". Mr Nissen reminded the respondent that it was liable for liquidated damages of $2000 per day from March 10 onwards for the subcontract works and for $666 per day for the break pour works.
4. On the other hand, Mr Yemez's evidence was contradictory and unsatisfactory. Much time was spent during the hearing with the respondent

producing photographs (which had not been discovered) which purported to show the state of the works at various dates. In light of the respondent's concession that the completion dates were as alleged by the applicant[15], I do not need to make any findings about the progress of the works as shown in the photographs.

1. However, the photographs and the respondent's production of them is a relevant matter in my consideration of the credit of each witness. Despite the photographs not being discovered, Mr Yemez was able to produce them overnight during the hearing after having heard the evidence of Mr Pinto that there was a week or a week and a half worth of work still to go. He said they had been stored on his computer but was unable to explain why he had failed to discover them. They were clearly relevant documents, as the issue had been squarely raised in Mr Pinto's witness statement.
2. It was put to Mr Yemez that the dates shown on the photographs may have been altered. He denied this, but was unable to provide a satisfactory explanation of why two photos bearing different dates showed the same broomstick leaning in the same location. Similarly, a photograph produced by Mr Yemez alleged to have been taken on 10 March appears inconsistent with a photograph taken by Mr Pinto on 14 March. I accept Mr Pinto's version of the photograph, because it is attached to an email sent at 11:20 am on 14 March and relates to a "safety issue to be addressed ASAP". Mr Pinto said because it was a safety issue, he would have sent the photo immediately it was taken. I accept this evidence.
3. Counsel for the respondent submitted that I should accept Mr Yemez's evidence that the camera settings time stamped each of his photographs. However, no evidence was led about whether the camera was accurately set or whether transferring a photograph to a computer would alter the date settings. Further Mr Yemez admitted that he had taken photographs on both a camera and a mobile phone and was unable to distinguish between the two in the documents produced to the Tribunal. I note that a photograph taken on a phone which is emailed (say to a colleague) and then saved to a computer would potentially have a different date to the date which it was taken. No evidence was given to prove the authenticity of the photographs.
4. Mr Yemez had no independent recollection of when the subcontract works were completed. In his witness statement he stated only "the works were completed in or during March 2017". A call was made for the respondent's site diary, which may have supported the dates alleged, but this was not produced. He admitted during the hearing that he was relying on the dates shown on the photographs.
5. In those circumstances, I do not accept that the dates on the photographs are evidence that the subcontract works were complete as at 16 March, as alleged by Mr Yemez. Accordingly, they do not provide a basis for me to conclude that Mr Pinto's evidence about the amount of work outstanding was incorrect.
6. Further, I do not agree with Counsel's submission that no reply to the email of 16 March was discovered. I consider that the applicant squarely disputed its contents when it responded to the respondent's payment claims in March and April. In its Disputed Invoice Forms, the applicant expressly confirmed that it disputed the invoices as liquidated damages of $39,994 plus GST had not been shown on the progress claim. This conduct is inconsistent with the applicant having agreed just days or weeks earlier to waive the liquidated damages.
7. Also, I do not accept that the email itself relates to the whole project. Mr Yemez's email is a response to an email sent by Mr Pinto at 7:55 am on 16 March. Mr Pinto had raised the status of the car stacker excavation and attached a photograph taken that morning. Mr Yemez was responding to the dispute about the car stacker (as can be seen from the subject line of his email sent at 8:56 am).
8. Further, the respondent's current position is inconsistent with Mr Yemez's apparent state of mind as at 31 March 2017. On that day the applicant served a payment schedule which raised among other things the imposition of penalties and liquidated damages. Mr Yemez assessed that schedule and made handwritten notes, none of which show he had any understanding or recollection of having reached an agreement that liquidated damages would be abandoned. Instead, his notes confirm the rates claimed by the applicant (albeit disagreeing about the completion dates).
9. Mr Yemez attempted to explain his handwritten notes by saying they were provided "only as a matter of caution" as he maintained the applicant was not entitled to impose liquidated damages. However, he went on to submit formal applications for 12 extensions of time on 1 April 2017. This conduct is inconsistent with his current position. There is no mention in 8 of the extensions of time claims that there had been an agreement to waive all liquidated damages, or they were submitted under protest. Four of the claims do refer to the 16 March agreement. Mr Yemez did not explain why some of the claims refer to the agreement and others do not. His evidence at its highest was that he issued the EOT applications to make sure the respondent was protected, following receiving the applicant's Disputed Invoice Form, even though he was under the impression that all penalties would be waived. However, he gave no explanation as to why he referred to the agreement in the claims for 16, 17, 20 and 21 March, but not for the other 8 days claimed. It appears to me that this conduct is consistent with Mr Yemez having held a view that the agreement made on 16 March applied to only a part of the works , and not all.
10. Moreover, the respondent failed to discover any other contemporaneous emails relating to this agreement. He managed to produce documents overnight following a call, but failed to answer the call for the emails. This is in contrast to the conduct of Mr Yemez and Mr Gulenc following the 20 February variation, where Mr Yemez actively participated in drafting an agreement with the applicant and Mr Gulenc ensured he was satisfied with it before signing it. I consider it improbable that if an agreement had been reached on 16 March whereby all accrued liquidated damages were waived, that Mr Yemez would not have insisted this be properly documented and countersigned.
11. Accordingly, I am satisfied on the balance of probabilities that the agreement reached on 16 March was to limit the liquidated damages for the subcontract works to the period 11 - 16 March 2017 only. The respondent, having agreed that the subcontract works were not complete prior to 16 March[16], is liable to pay the applicant liquidated damages for 5 days at $2000 per day, being $10,000.

LIQUIDATED DAMAGES - ADDITIONAL DETAILING WORKS - $38,628

1. In the variation letter signed 20 February 2017, it was agreed that the respondent would complete the additional variation works (referred to by the parties as 'break pours' or 'detailed excavation works') by specified dates, and that extension of time claims and liquidated damages would apply to those works. The terms of the agreement were set out in the 7 February letter, which was signed by the parties on 20 February 2017. The relevant clauses stated as follows:
   • Straightline will carry out all foundation detailed excavation works required on the structural drawings, the crane base drawings & B3 slab drawings - completion date for detailed excavation works March 4th, 2017
   • Detailed excavation dates
     • break pour 1 - Feb 28th
     • break pour 2 - March 3rd
     • break pour 3 - March 7th

• Straightline Contractors are entitled to submit EOT's to Platinum for approval during the periods of Feb 19th - March 4th, 2017
• Straightline Contractors are not entitled to submit EOT's to Platinum during the periods of Feb 3rd - Feb 18th, 2017
• Liquidated Damages still apply to Straightline Contractors for each day the project is handed over late starting for each concrete pour [the extra break pour works]... [at] $666 per day

1. The applicant's evidence was that the break pours were delayed as follows:

1. break pour 1 - 16 days (completed 16 March instead of 28 February 2017) 2. break pour 2 - 18 days (completed 21 March instead of 3 March 2017)

1. break pour 3 - 24 days (completed 31 March instead of 7 March 2017.
2. It claims $666 per day for each of the 58 days of delay, totalling $38,628.
3. By its Points of Defence, the respondent agrees that it completed break pour 1 on 16 March, break pour 2 on 21 March and break pour 3 on 31 March 2017[17]. However it denies liability for this claim, relying on the alleged agreement made 16 March 2017, or alternatively on the grounds that it was entitled to extensions of time.
4. As discussed above, I do not accept that the agreement made on 16 March meant that the applicant waived or abandoned its claims for liquidated damages. Accordingly, I reject that defence.
5. I also reject its claim to be entitled to extensions of time for the detailed excavation works. While much evidence was led about the state of the works on various dates, the respondent led no evidence to support its claims as set out in its notices dated 1 April 2017. For example, many of the claims state "Straightline has been unable to complete works on critical path, shotcrete and carting of dirt, due to no access for trucks and concrete trucks in line of Platinum's crane works blocking access". The respondent did not call any evidence about Platinum's crane works or how its access was blocked, nor any evidence about how this affected the critical path.
6. Other claims relate to inclement weather but again no evidence was given by the respondent about the weather or how it affected the critical path.
7. The respondent has made no submissions about the validity of the extension of time claims. I have not been addressed on how clause 15 of the subcontract applies, including whether any of the preconditions have been met, or whether the Principal has refused the applicant an extension of time.
8. Accordingly, I am satisfied that the respondent is liable to the applicant for liquidated damages in respect of the detailed excavation works of 58 days at $666 per day, totalling $38,628.

WAS THERE AN OVERPAYMENT OF $9833 FOLLOWING THE COUNTY COURT ORDER?

1. By its Amended Points of Defence (leave to file was granted during the hearing), the respondent sought to set-off the sum of $9833.88 against any monies found owing to the applicant. The grounds for the set-off relate to the repayment of monies following the County Court order, the garnishee order and the Magistrates Court proceeding. The respondent pleads:

In the event that Straightline is liable to Platinum for any sum at all (which is denied), then Straightline relies on the following facts to establish a set-off in the sum of $9833.88 against that sum:

(a) the sum due and payable by Platinum to Straightline following the County Court Order was $58,849.10. This amount was received by way of garnishee payment.

(b) Platinum made a Further Payment to Straightline in the amount of $56,274.11.

(c) Following the Further Payment Platinum claimed that it had made an overpayment of $30,687 (ex GST) to Straightline.

(d) That calculation was based on subtracting from the Further Payment ($56,274.11) from the retention payment in the amount of $30,690 which Platinum owed Straightline.

(e) that calculation was incorrect. The Further Payment ($56,274.11) less the retention owed ($30,690) equals the sum of $25,584.11, not $30,687.

(f) Straightline paid Platinum the sum of $35,417.99, not $25,584.11. That sum comprises:

(i) $31,430.71 which Straightline paid to Platinum on 15 May 2018; and

(ii) the default judgement dated 29 May 2018 in the amount of $3987.28.

(iii) Straightline therefore made an overpayment of $9833.88 to

1. In support of this set-off, the respondent filed a further witness statement of Mr Gulenc, which largely repeated the Points of Defence. I do not accept his evidence. During cross examination, he was unable to provide an independent understanding or explanation of how the claim was put. For example, when it was put to him that he had not calculated the flow of monies from first principles, comparing the total of the payment claims to the total payments made, he said it was and he had done that exercise himself. However, the description of the set-off in his witness statement and in the Points of Defence is not put on those terms. Instead, the calculation looks only at the amounts ordered in the County Court and paid by way of garnishee order or the Magistrates Court settlement. It also includes amounts for costs and interest which may or may not be relevant in a set-off.
2. Further, no legal submissions were made about the application of the set-off rule. I was not taken to any term of the subcontract which would entitle the respondent to a contractual set-off. An equitable set-off may be allowed where it would be unconscionable to allow one party to insist on its legal right without first accommodating the other's countervailing legal right[18].
3. In considering the unconscionability of the parties' actions, I consider the behaviour of the respondent following the County Court Order to be relevant and to count against their set-off claim. It has not come to the Tribunal with 'clean hands'. Mr Gulenc, as a director of the respondent, admitted that he was aware that the applicant had made two payments in error. He admitted he held onto and did not return the overpayment of $56,849.10. Despite withholding more than $56,000, he permitted the respondent to make a further payment claim for a further $30,690, without any acknowledgement of having received the overpayment. He forced the applicant to commence the Magistrates Court proceedings to recover the overpayment. He admitted this was not the right thing to do and that it was childish behaviour. Mr Gulenc's attitude of "let them hang for a little while and wait before we have to return the money" has caused the applicant to incur costs, inconvenience and delays in recovering the $56,000 overpayment. That behaviour does not support a claim made for equitable relief.
4. Accordingly, the respondent's claim to set-off $9833 is refused.

1. For the reasons above, I will order that the respondent must pay the applicant a total of $79,153.67.
2. There is liberty to apply on the question of costs, interest and fees. Subject to any objection, these will be determined on the papers. Any party making any application must do so by 29 January 2021, accompanied by written submissions (limited to 10 pages) and affidavit(s) in support. Any material in response must be filed and served by 19 February 2021.

[2] The hearing commenced on 19 November 2019, but a successful application for the member presiding to recuse themself was made and the hearing recommenced before me on 20 November 2019.

[3] Solak v Registrar of Titles (No.2) [2010] VSC 146 at [8].

[4] Mr Gulenc witness statement paragraphs 51, 54.

[5] Tutos v State of Victoria [2019] VSC 673 at [26]; Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28 at [22].

[6] Paragraphs 170-175; 198-203 of the adjudication decision.

[7] South Australian Cold Stores Ltd v Electricity Trust (SA) [1957] HCA 69; (1957) 98 CLR 65 at 75.

[8] Points of Claim 21 June 2018 and Amended Points of Claim 20 November 2019.

[9] The applicant has used the names Powercor and Citipower interchangeably in their Tribunal documents. I am satisfied that they are the same entity, as the invoice at TB431 has both names in its heading.

[10] At paragraphs 48-57 of his witness statement. I note that Mr Verblun said at paragraph 50 that the shutdowns were on 16, 17 and 23 November 2016. However I take this to be a typographical error as the supporting documents referred to, including the Powercor invoice at TB431, confirm the shutdown on 18 November as well.

[11] Applicant's closing submission paragraph 120.

[12] Outline of Closing Submissions on behalf of the Respondent paragraph 16.

[13] See for example Codelfa Constructions v State Rail Authority of New South Wales [1982] HCA 24; Sumic v Muzaferovic [2013] VCAT 1862; Imerva Corporation Pty Ltd v Kuna [2015] VCAT 2058.

[14] Being $22,000 and $10,000 for the subcontract works, and $666 for 2 weeks for each of break pours 2 and 3

[15] Outline of Closing Submissions on behalf of the Respondent paragraph 3(f)

[16] Outline of Closing Submissions on behalf of the Respondent paragraph 45.

[18] Hawes v Dean [2014] NSWCA 380.