Solicitors:
Redenbach Lee Lawyers (Plaintiffs/ Cross Defendants)
Stewart & Associates (Defendant/Cross Claimant)
File Number(s): 2016/139580
[2]
Judgment
This is the sixth judgment in the resolution of the dispute between the plaintiffs, Mr Tony Stepanoski and Mrs Sonia Stepanoski (the Owners), and the defendant, Mr Jamal Aslan (the Builder), arising out of a building contract made between the Owners and the Builder. On 30 July 2018, I published my reasons for concluding that the contract between the parties was a Lump Sum Contract rather than a Cost Plus Contract. [1] The Owners then sought the entry of judgment for damages for breach of contract by the Builder for such amounts as were not disputed by the Builder. On 11 December 2018, I directed the entry of judgment for the Owners against the Builder in the sum of $225,710.38 and reserved the further hearing of the balance of the Owners' claim. [2] However, I subsequently ordered that enforcement of that judgment be stayed.
On 28 October 2019, I published my reasons for the conclusions that I had reached at that stage on the question of the assessment of damages payable by the Builder to the Owners. [3] I reserved the question of costs and gave directions for the filing of evidence and submissions in relation to the question of costs. In the course of those reasons, I made some observations concerning the basis upon which the Owners sought to establish loss. I raised alternative bases for calculating the loss suffered by the Owners. Those observations prompted an application by the Owners, by notice of motion filed on 21 November 2019, for leave to rely on evidence that had been foreshadowed at the original hearing but had not been adduced having regard to the limited question that the Court had been asked to resolve at the original hearing. The motion also sought the lifting of the stay that I ordered on enforcement of the judgment entered on 11 December 2018.
Stepanoski v Aslan [2020] NSWSC 900 | Case summary | Zoe
On 12 December 2019, I gave directions for the filing of evidence and submissions concerning the application to adduce further evidence. On 18 December 2019, for reasons published on that day, I ordered that the stay on the enforcement of the interim judgment be lifted. [4]
I subsequently received further evidence and submissions in relation to the balance of the notice of motion filed on 21 November 2019. The evidence and submissions addressed the reasons for the failure of the Owners to adduce the relevant evidence at the original hearing, which resulted in the conclusions published on 28 October 2019.
In short, the explanation for the failure was to be found in the changes in legal representation that have occurred since the proceedings were first commenced. Both new solicitors and new counsel have been retained on behalf of the Owners as well as the Builder. The new solicitors and counsel for the Owners were under the impression that the proposed additional evidence was already before the Court. I was satisfied that the explanation was not unreasonable and that the interests of justice required that the Owners be permitted to rely on the additional material for the purposes of assessing damages for the breaches of the Lump Sum Contract that I have found.
Accordingly, on 24 February 2020, I granted leave to the Owners to reopen their case and to read and/or tender additional material on the issue of quantum of damages. [5] The additional evidence consisted of the contract for the sale, for the sum of $2,435,000, of the land and buildings that are the subject of the dispute, the subsequent transfer the land and buildings and a report as to the value of the land and buildings by Mr Adam McMonigal dated 20 September 2016. In his report, Mr McMonigal expressed his opinion as to the value of the land and buildings had the building work been completed in accordance with the Lump Sum Contract. The Builder has not filed any evidence contradicting Mr McMonigal's opinion evidence. No submissions have been made on behalf of the Builder as to why the opinion evidence of Mr McMonigal did not satisfy s 79 of the Evidence Act 1995 (NSW). In the circumstances, I accept his evidence as unchallenged.
The Owners have now formulated their claim for damages in the total sum of $2,698,656.28, calculated as follows:
1. Loss in respect of the sale of the land and buildings by reason of the incomplete works/repudiation of the Builder: $1,979,426.48
1. Value of the completed project: $5,195,000.00
2. Less sale price: $2,700,000.00
3. Less costs of completion: $515,573.52
1. The Owners overpaid the sum of $452,667.80.
2. Pre-judgment interest on the overpayment for the period 31 October 2015 to the date of judgment, being 28 October 2019, is $101,161.00.
3. Rental lost 21 July 2015 to 31 December 2015 was $29,325.00.
4. Rental lost 1 January 2016 to 9 September 2017 was $118,800.00.
5. Pre-judgment interest on the rental losses is $17,276.
The Builder contends that in assessing damages, the relevant principle is to assess the amount that would put the Owners in the position they would have been in had the Lump Sum Contract been performed. [6] He contends that, if the Court were to accept Mr McMonigal's opinion evidence, which is some years old, the sale price should be deducted from the amount of the valuation. As indicated above, the sale price has been deducted in assessing the claim.
The Builder also says that, if it was always the intention of the Owners to sell the land and buildings, it would also be appropriate to exclude the costs of and incidental to the sale, such as agent's fees and commissions, discharge of mortgage costs, legal costs in the preparation of the contract for sale and other ancillary costs. As indicated above, a sum of $515,573.52 has been allowed to cover those expenses.
The Builder then contends that different findings may be made according to whether only one of the properties involved in the project would have been sold by the Owners, and the other retained, or if both were to be retained. However, no submission was made by the Builder as to whether the Court should find that one or more of the properties would have been retained by the Owners. It is quite unclear what further submission the Builder makes.
In the absence of further submissions from the Builder, I consider that judgment should be entered in favour of the Owners in the total sum of $2,698,656.28, in lieu of the interim judgment that I directed on 11 December 2018. The Owners have asked for their costs. No submission has been jjmade on behalf of the Builder as to why costs should not follow the event. Accordingly, it is appropriate to order that the Builder pay the Owners' costs of the proceedings, except for costs attributable to the Owners' application for leave to reopen.
I propose to make orders as follows:
Direct the entry of judgment for the plaintiffs against the defendant in the sum of $2,698,656.28 in lieu of the judgment entered on 11 December 2018.
Order the defendant to pay the plaintiffs' costs of the proceedings save for any costs attributable to the application by the plaintiffs for leave to re-open.
[3]
Endnotes
See Stepanoski v Aslan [2018] NSWSC 1160.
See Stepanoski v Aslan (No 2) [2018] NSWSC 1916.
See Stepanoski v Aslan (No 3) [2019] NSWSC 1445.
See Stepanoski v Aslan (No 4) [2019] NSWSC 1859.
See Stepanoski v Aslan (No 5) [2020] NSWSC 139.
See Gates v City Mutual Life Assurance Society Limited (1986) 160 CLR 1 at 11-12 (Mason, Wilson and Dawson JJ); [1986] HCA 3; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [13] citing Robinson v Harman (1848) 1 Exch 850 at 855; 154 ER 363 at 365.
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Decision last updated: 16 July 2020