Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 2) [2021] NSWCA 93

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 2) [2021] NSWCA 93 Hearing dates: 3 May 2021 Date of orders: 19 May 2021 Decision date: 19 May 2021 Before: Bell P at [1]; Macfarlan JA at [127]; Leeming JA at [128] Decision: 1. Appeal allowed with costs. 2. Set aside the orders of the primary judge and in lieu thereof, make the following orders: (a) Judgment for the plaintiff in the amount of $255,493. (b) Judgment for the defendant on the cross-claim in the amount of $219,083.29. 3. Leave be granted to both parties to file any submissions of no more than 3 pages each within 7 days if an order as to costs at first instance is sought by either party, with any reply to be filed within a further 7 days. Catchwords: BUILDING AND CONSTRUCTION – contract – damages – defects – whether the contractor was responsible for defects in materials supplied by a third party – where the relevant contractual warranty was confined to "works required to be performed by the contractor" BUILDING AND CONSTRUCTION – contract – termination – quantum meruit – whether the contract operated to generate release and waiver of subsequent claims for payment by the contractor – where the contractor had suffered irreversible detriment by incurring liability to pay for materials prior to the principal's insistence upon strict adherence to the contract BUILDING AND CONSTRUCTION – contract – variation – implied promise to pay – whether the works constituted "variations" as defined in the contract – where the principal requested that the contractor supply materials that it had originally insisted upon supplying itself – where written approval was sought by the contractor in respect of all other variation works CONTRACTS – breach of contract – consequences of breach – right to damages – estoppel – promissory estoppel – whether it was unconscionable for the principal to resist payment for the performance of certain works – where the principal was positively encouraging the contractor to complete outstanding works – where such encouragement followed the principal's purported departure from the assumption that it had approved these works EQUITY – estoppel – promissory estoppel – general principles and maxims – equity will not permit detriment to be visited upon or remain with the party who has not been sufficiently clearly disabused of the counter-party's intended departure from the relevant assumption inducing reliance ESTOPPEL – promissory estoppel – detrimental reliance – whether the principal discharged its duty to inform the contractor labouring under an assumption that the basis for that assumption had "materially changed" – where such material change must be communicated in sufficiently clear terms – where the relevant communication did not expressly refer to or address the topic of the assumption – where the principal was positively encouraging the contractor to complete outstanding works in respect of materials that the principal knew it had originally undertaken to supply itself Legislation Cited: Industrial Relations Act 1996 (NSW) s 127 Supreme Court Act 1970 (NSW) s 75A Cases Cited: Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39 Fels v Rural Bank [2020] WASCA 151 Metropolitan Gas Co v City of Melbourne (1924) 35 CLR 186; [1924] HCA 46 Mortgage Acceptance Nominees Ltd v Australian Thoroughbred Finance Pty Ltd (1996) 69 SASR 302 Pyrenees Shire Council v Day (1998) 192 CLR 330; [1998] HCA 3 S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7 Category: Principal judgment Parties: Valmont Interiors Pty Ltd (Appellant) Giorgio Armani Australia Pty Ltd (Respondent) Representation: Counsel: