Court of Appeal Supreme Court New South Wales Medium Neutral Citation: C & V Engineering Services Pty Ltd v Metropolitan Demolitions Pty Ltd [2024] NSWCA 52 Hearing dates: On the papers Date of orders: 13 March 2024 Decision date: 13 March 2024 Before: Leeming JA, Stern JA Decision: (1) Leave to appeal granted. (2) Notice of Appeal in the form of the draft notice of appeal in the White Folder to be filed and served within 14 days. (3) Matter to be listed before the Registrar for directions and allocation of a date at a time to be advised. Catchwords: APPEALS – leave to appeal – monetary threshold – principles governing grant of leave to appeal below monetary threshold – whether application identified issue of principle, question of general public importance or reasonably clear injustice – whether application goes beyond being merely arguable Legislation Cited: District Court Act 1973 (NSW), s 127(2)(c) Supreme Court Act 1970 (NSW), s 101(2) Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57 C & V Engineering Services Pty Ltd v Metropolitan Demolitions Pty Ltd (No. 4) [2023] NSWDC 483 C&V Engineering Services Pty Ltd v Metropolitan Demolitions Pty Ltd [2023] NSWCA 167 Cheng v Motor Yacht Sales Australia Pty Ltd (t/as The Boutique Boat Company) (2022) 108 NSWLR 342; [2022] NSWCA 118 Clea Shipping Corp v Bulk Oil International Ltd (No. 2) (The Alaskan Trader) [1984] 1 All ER 129 Meriton Apartments Pty Limited v The Owners Strata Plan No. 72381 [2015] NSWSC 202 White and Carter (Councils) Limited v McGregor [1962] AC 413 Category: Procedural rulings Parties: C & V Engineering Services Pty Ltd (Applicant) Metropolitan Demolitions Pty Ltd (Respondent Representation: Counsel: D Weinberger (Applicant) M Sheldon (Respondent) Solicitors: O'Loughlin Westhoff (Applicant) Vincent CCL Pty Ltd t/as Vincent Young (Respondent) File Number(s): 2023/440504 Publication restriction: Nil Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: [2023] NSWDC 483 Date of Decision: 10 November 2023 Before: Abadee DCJ File Number(s): 2021/108258 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] JUDGMENT 1. THE COURT: By summons filed on 5 December 2023, the applicant, C & V Engineering Services Pty Ltd ("C&V"), seeks leave to appeal against a decision of the District Court made on 10 November 2023: C & V Engineering Services Pty Ltd v Metropolitan Demolitions Pty Ltd (No. 4) [2023] NSWDC 483. That decision followed a decision of this Court, allowing C&V's appeal in part and remitting to the trial judge the issue of quantum of damages for breach of a contract for the fabrication of steel columns known as "soldiers" for a building known as "Building C" in a development in Circular Quay: C&V Engineering Services Pty Ltd v Metropolitan Demolitions Pty Ltd [2023] NSWCA 167. 2. The orders made on appeal were, relevantly: "… (3) Declare that on 5 July 2018 the appellant and respondent made a contract for the appellant to procure and fabricate soldiers for Building C and that contract was not conditional upon any further direction to fabricate being made by the respondent; (4) Remit the issue of the quantum of damages for breach of contract as regards Building C to the trial judge on the basis that it is a matter for the trial judge whether to refer that issue to a referee; …". 1. Pursuant to order 4, by consent on remittal, a referral for quantum of damages for breach of contract in relation to Building C was made: PJ [5]. The referee was instructed (over objection by C&V) to assess quantum on alternative bases: that C&V was entitled to damages without any temporal limitation, or that C&V had no entitlement to damages for breach of contract in respect of work done after 27 July 2018. The primary judge adopted the referee's report. 2. As is apparent from the decision of the primary judge, there was no dispute before the primary judge on remittal that C&V's damages would include the cost of materials which it had purchased in order to fulfil the contract. The only material dispute related to whether C&V was entitled to damages in respect of time spent fulfilling the contract after 27 July 2018, when Mr Cooney (of Metropolitan) directed Mr Pizzolato (of C&V), by email, to do no further work under the contract. As to this, in circumstances in which both C&V and Metropolitan conceded that Metropolitan's conduct in issuing the direction on 27 July 2018 amounted to a repudiation of the contract, his Honour found that C&V's conduct in continuing to fabricate the soldiers for Building C after Mr Cooney's direction was an intervening event precluding C&V from claiming damages for breach of contract in respect of work done under the contract after 27 July 2018. 3. The single ground for which leave to appeal is sought asserts error in that conclusion. As the amount in issue is $40,985.75, leave to appeal is required: District Court Act 1973 (NSW), s 127(2)(c). 4. C&V submits that for the primary judge to rely upon repudiation as an intervening act for the purpose of causation "eviscerates" the general rule that an innocent party faced with repudiation can either accept the repudiation and terminate the contract or reject the repudiation and insist on contractual performance. C&V relies in this regard upon Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57 at [58] (Gummow, Hayne and Kiefel JJ). C&V submits that that election, to reject the repudiation and insist on contractual performance, is "rendered hollow" if it amounts to a novus actus interveniens and that the correct position is that an election to affirm a contract can never break the chain of causation so as to prevent the innocent party from claiming damages. 5. Metropolitan says that the criteria for a grant of leave are not satisfied. It adds that the submission now made is inconsistent with the case run at first instance and departs from C&V's pleadings. Against the possibility that those submissions are not accepted, by way of draft notice of contention, Metropolitan contends that the primary judge's conclusion should be affirmed "on the ground that it was "wholly unreasonable" for [C&V] to continue fabricating soldiers for Building C after 27 July 2018, and [C&V] had no "legitimate interest" in continuing fabricating soldiers for Building C after 27 July 2018." In so contending, Metropolitan relies upon the speech of Lord Reid in White and Carter (Councils) Limited v McGregor [1962] AC 413, as subsequently applied in Clea Shipping Corp v Bulk Oil International Ltd (No. 2) (The Alaskan Trader) [1984] 1 All ER 129 and Meriton Apartments Pty Limited v The Owners Strata Plan No. 72381 [2015] NSWSC 202. 6. It is well established that, ordinarily, it is appropriate to grant leave only concerning matters involving an issue of principle, questions of general public importance, or where an injustice is reasonably clear, in the sense of going beyond being merely arguable: Cheng v Motor Yacht Sales Australia Pty Ltd (t/as The Boutique Boat Company) (2022) 108 NSWLR 342; [2022] NSWCA 118 at [15] (Bell CJ, Ward P and Basten AJA agreeing) ("Cheng"). As held by the Chief Justice in Cheng at [21] (in the context of s 101(2) of the Supreme Court Act 1970 (NSW) which imposes a monetary threshold for appeals equivalent to that in s 127(2) of the District Court Act): "Where the value of the matter(s) at issue falls below [the threshold] amount, an applicant for leave must meet the criteria which have been identified … In this context, s 101(2) is also concerned with notions of proportionality; the importance of the issue or the gravity of the error of principle relied upon to justify leave will influence the likelihood of leave being granted. This is the reason for the insistence in the authorities that the points sought to be raised on appeal, if leave is granted, must be more than reasonably arguable." 1. Notwithstanding that the amount in issue in this case is only $40,985.75, and that this litigation has been ongoing for some time, C&V's single ground of appeal raises an issue of principle. It may also be more than reasonably arguable, although we are unable to express a concluded view on that issue because the limited materials made available for the determination of leave do not permit us to assess the force of Metropolitan's contention that C&V should not be entitled to advance this point. In relation to the proposed notice of contention, it seems that it was not put to the key witness for C&V below that C&V had no "legitimate interest" in performing the contract. 2. For these reasons, leave to appeal should be granted. 3. The following orders should be made: 1. Leave to appeal granted. 2. Notice of Appeal in the form of the draft notice of appeal in the White Folder to be filed and served within 14 days. 3. Matter to be listed before the Registrar for directions and allocation of a date at a time to be advised. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 March 2024