JIAWAN HOLDINGS PTY LIMITED v DESIGN COLLABORATIVE PTY LIMITED [1993] NSWCA 145

JIAWAN HOLDINGS PTY LIMITED v DESIGN COLLABORATIVE PTY LIMITED

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

PRIESTLEY JA, MEAGHER JA and HANDLEY JA 18 March, 16 April 1993

[1993] NSWCA 145

FACTS: A joint venture, essentially comprising a financier, Mr Dalley, a builder, Mr Stanborough and a supervisor, Mr Russell, set out to build two developments — "Lantern Lodge" at Thredbo and the "Staff Village" at Jindabyne. The contract for the former was signed on 6 August 1987 for the fixed price (no rise or fall clause) of $1.85 million. The second contract was signed on 21 January 1988 for the fixed price of $2.14 million. The architect, Mr Emerson, played a limited role in the first project. He neither drew up the plans, agreed to supervise the project nor set nor independently assessed the price. An offer to act as supervising architect was rejected. He drew up the plans for the second development at Jindabyne, but again neither undertook to supervise, nor assess the price. The situation in question, where the builder was a part-owner who set the price and this builder's profits being available in the event of cost overruns, is in contrast to the normal situation in which the architect is the intermediary between the owner and the builder.

§.52 Trade Practices Act s.42 Fair Trading Act

The architect did, on November 17 or shortly thereafter, agree to provide certificates following a conversation with Mr Russell. Mr Dalley had provided his own funds to the builder, but had decided to obtain finance for the project from the Advance Bank. The Advance Bank required certificates before they would repay Mr Dalley. The certificates were to state a) what moneys so far the builder had spent on the projects; b) how that was spread amongst the trades; and c) what was the difference between moneys spent to date and the contract sum.