Anthony J Healy Antiques Pty Ltd v P & D Envirotech Pty Ltd [2021] NSWDC 308

District Court New South Wales

Medium Neutral Citation: Anthony J Healy Antiques Pty Ltd v P & D Envirotech Pty Ltd [2021] NSWDC 308 Hearing dates: 11 May 2021 13 May 2021 14 May 2021 17 May 2021 Date of orders: 17 May 2021 Decision date: 17 May 2021 Jurisdiction: Civil Before: Montgomery DCJ Decision: (1) Judgment for the defendant against the plaintiff. (2) Plaintiff to pay the defendant's costs. Catchwords: CONTRACTS — Construction — Extrinsic evidence CONTRACTS — Express terms — Pre-contractual statements Cases Cited: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 451 Category: Principal judgment Parties: Anthony J Healy Antiques Pty Ltd, First Plaintiff Anthony J Healy, Second Plaintiff Catherine Healy, Third Plaintiff P & D Envirotech Pty Ltd, Defendant Representation: Counsel: Mr Bennett, First, Second and Third Plaintiff Mr Carolan, Defendant File Number(s): 2020/00079732

Judgment (Ex Tempore) 1. By the Amended Statement of Claim ('ASOC') handed up at the commencement of the hearing and upon which the plaintiff proceeded by consent, Anthony J Healy Antiques Pty Ltd, sues P & D Envirotech Pty Ltd for recovery in 2 categories. * Firstly for recover of $32,346.93 over payment for demolition services provided by the defendant; and * Secondly, for $18,672, consequential loss being rectification cost of damage caused during the defendant's conduct of the demolition. The concept of demolition should be understood in the specialist avenue of the clean-up of asbestos contaminated waste following fire damage. 1. The second and third plaintiffs were directors of the corporate first plaintiff. For convenience in these reasons I will refer to the company as the plaintiff and to Mr Healy as the second plaintiff and Mrs Healy as the third plaintiff. 2. Most of the facts pleaded in the ASOC are not disputed. The plaintiff carried on business selling antiques and homewares under the trading name "The Old Pot Factory" on land known as 44-54 Old Hume Highway Balaclava near Mittagong New South Wales ('the Property'). The Property was a converted house, the facade of which imitated a hacienda. The location at which the subject works were carried out at the property was at the front in a part of the building known as the showroom which was 328 m2 in size. The second and third plaintiffs owned the Property in partnership. The defendant carried on the business of specialist removal of friable/bonded asbestos demolition, lead paint removal, soil removal, remediation and environment site clean-ups. The defendant was a Licensed Asbestos Removal Contractor ('LARC'). 3. On 15 August 2019 the property suffered extensive fire damage. On 29 August 2019 the second and third plaintiffs met the defendant's estimator, Mr Andrews, at the Property. They asked him to quote demolition and environment clean-up of the site. The second and third plaintiffs had already met with a representative of EDP Consultants Pty Ltd and a report on asbestos sampling investigation of the fire damaged Property was known to be pending. The second and third plaintiffs informed Mr Andrews that the defendant would receive the report. The EDP report dated 29 August 2019 was authored by Mr Pittaway, a Licensed Asbestos Assessor ('LAA'). 4. The plaintiff case in the first recovery relies heavily on the discussion between the second and third plaintiffs, and Mr Andrews on 29 August 2019. 5. On 12 September 2019 the defendant quoted the sum of $143,396 for clean-up of the site, including the removal of asbestos ('the First Quotation'). Subsequently, on 29 October 2019 the defendant quoted the sum of $130,589.80 inclusive of GST for the work ('the Second Quotation'). The plaintiff accepted the defendant's Second Quotation. The parties agree they contracted when the plaintiff accepted the Second Quotation and that the work was thereafter carried out pursuant to that contract. On 4 February 2020 the plaintiff paid the defendant in full the defendant's invoice issued 13 December 2019 for the contract price of $130,589.80 inclusive of GST. The plaintiffs' first claim is for recovery of overpayment. 6. The Second Quotation (the contract) expressed the scope of work as follows: "SCOPE: Removal of contaminated waste as outlined in the EDP report. Price revised on engineers report." Duration would be nine regular days Monday to Friday which included one day for asbestos removal from the front of the building. The contract provided that the client supply all electrical, plumbing and gas isolation where applicable PRICE: Labour N/T- Inc. Travel Consumables Water Excavator Excavator transport Decontamination Unit 1-day Asbestos Removal Truck & Dog Loads – Approx. 8 Air Monitoring & Clearance Steel Bins Total (Excl GST) $118,718.00 GST $11,871.80 Total (Incl GST) $130,589.80 NOTE: This price only includes an allowance for approximately 170 tonne of debris (contaminated waste) anything over that quantity will be charged at $385 plus GST per tonne cart and dispose. Also no allowance has been made for containers and structures at the rear of the property." 1. It was an express term of the contract that the defendant "must ensure that" on completion of the work, a clearance inspection of the asbestos removal is carried out as required by Work Health Safety Regulations. It was an express term of the contract that the defendant must prepare an asbestos removal control plan ('ARCP') for the work and that the cost of the ARCP was included in the price. A further term of the contract provided as follows: "An allowance has been made for monitoring and clearance. This is mandatory in some circumstances and is the responsibility of the waste generator to supply, or make available, this information prior to the start of any removal of waste from site. Air monitoring and reoccupation certificates will offer the site owner some proof of compliance in future construction or site occupation." (Italics added for emphasis). 1. The "engineers report" referred to in the above quoted expression of the scope of works is a reference to the report of Mr Thomas, structural/civil engineer, of Thomas Mayne Pty Ltd. It was dated 21 October 2019. It is convenient to refer to it as "Mr Thomas' first report". It was provided to the defendant on 24 October 2019, that is, prior to the contract and after the First Quotation. 2. The amount of asbestos removed from the property on completion of the works was only 93.62 tonnes, not the 170 tonnes "allowance" expressed in the contract. The plaintiff's first claim for $32,346.93 is the calculated difference of 76.38 tonnes at the rate of $385 per tonne plus GST, being the "anything over" rate expressed in the contract. 3. The plaintiffs' second claim is for the cost of temporary stabilisation by propping of a brick veneer/stud wall ('the stud wall'). The stud wall was tied by roofing members to the shopfront façade wall of the Property. For proof of quantum the plaintiff relies on an email quotation by Mr Herborn, builder, dated 5 February 2020. 4. During opening, the parties identified three issues for determination: * Issue 1: Whether or not the parties made a lump sum contract; * Issue 2: Whether or not the defendant caused damage to the structural support of the shopfront for which the plaintiff is entitled to $18,672 rectification costs; and * Issue 3 (subsidiary to Issue 2): Whether or not the plaintiff would have had to provide the temporary support of the façade wall quoted by Mr Herborn in any event. 1. The defendant agrees that it removed timber bearers, which were structural support timbers from behind the stud wall. The defendant agrees that its machine caused damage to the Western and Eastern brick walls. 2. In order to understand the facts and the parties' cases it is important to recognise that there were two walls at the front of the showroom referred to in the evidence. The hacienda fashion facade wall (the 'façade wall') stood on columns and was the first wall as one approached the entrance to the showroom. The stud wall was some metres further in that course of approach. The stud wall held windows and the entrance doors to the showroom. On approach a customer would walk under the hacienda style facade wall by passing between its columns, then cross a tiled area to the entrance doors in the stud wall, beyond which was the showroom. The situation of the facade wall and the stud wall including timber roofing ties and paved flooring can be seen in photographs numbered 72 to 74, 84 (top photograph), 85 to 87 (top photograph) of exhibit D, X01 to the affidavit of Mr Riches sworn 29 October 2020. 3. As to the plaintiff's first claim and Issue 1; the plaintiff says that in pre‑contractual negotiation the parties agreed that the defendant's price quoted would depend on tonnage of asbestos contaminated material to be removed and disposed of. The plaintiff argues that evidence of pre-contractual negotiations is admissible as evidence of that mutually understood background fact in circumstances of ambiguity of the written contract. 4. The plaintiff argues that the difference between the First Quotation and Second Quotation is evidence of background knowledge to be applied to construction of the contract, that is, that the parties intended to contract on a fixed price per tonne basis. 5. The defendant says that the written contract is unambiguously a lump sum contract for the works at a price of $130,589.80, with a rise call provision covering the risk that asbestos contaminated debris to be removed might exceed 170 tonnes. On the defendant's argument it was a lump sum contract pursuant to which the defendant accepted the risk up to 170 tonnes of contaminated material clean up, and above that quantity the defendant was entitled to charge $385 per tonne for asbestos contaminated material removed. 6. The parties agree that Mr Thomas's first report removed from the scope of works contemplated at the time of the First Quotation, demolition and removal of the facade wall, the stud wall and the western return brick wall. It is common ground between the parties that, that reduction in the scope of works, explains the reduction in the quoted total price between the First Quotation and the Second Quotation. 7. This is reflected in the reduction from 250 tonnes of contaminated debris and a total price of $143,396 including GST in the First Quotation to 170 tonnes in the sum of $130,589.80 including GST in the Second Quotation. The quotations are annexures B and C to the affidavit of the second plaintiff made 14 September 2020 ('the second plaintiff's first affidavit'). It can be seen that only the Second Quotation included reference to Mr Thomas' engineering report in the expression of the scope of work. 8. It is common ground that the stud wall was rendered unstable by the defendant's removal of wood bearers. The defendant says that Mr Thomas' first report did not advise a scope of work other than it provided an opinion contemplating the facade wall be retained and that it remained the plaintiff's onus to provide bracing for the stud wall in order to maintain its stability and therefore by the roof ties, the façade wall. The plaintiff's case is that the works could have been completed without removal of the bearers, being the structural support timbers from behind the stud wall.