New South Wales Supreme Court CITATION : Parkview v Multi-Formwork [2009] NSWSC 547 HEARING DATE(S) : 15/06/09 JUDGMENT DATE : 15 June 2009 JURISDICTION : Equity Division JUDGMENT OF : Macready AsJ at 1 EX TEMPORE JUDGMENT DATE : 15 June 2009 CATCHWORDS : Building & Construction. Final hearing of claim after an adjudication determination. Defendant fails to appear. Judgment for plaintiff. PARTIES : Parkview Constructions Pty Limited v Multi-Formwork and Hire Pty Limited & Anor FILE NUMBER(S) : SC 55001/09 COUNSEL : Mr A Vincent for plaintiff SOLICITORS : Salim Rutherford for plaintiff - 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE MACREADY MONDAY 15 JUNE 2009 55001/09 PARKVIEW CONSTRUCTIONS PTY LIMITED v MULTI-FORMWORK AND HIRE PTY LIMITED AND ANOR TECHNOLOGY AND CONSTRUCTION LIST JUDGMENT 1 HIS HONOUR: This is a claim which was fixed for hearing before me today. The defendants were aware of the hearing and up until yesterday were represented by solicitors. Their retainer was terminated yesterday, Sunday, and I was advised of this by the solicitor who had acted for the defendants. The matter was called outside the Court and the defendants did not appear. Accordingly, I have proceeded to hear the matter based upon the plaintiff's evidence which I have read and I note that some of it, of course, is irrelevant because the defendants' evidence has not been read. The evidence is not available to me as the defendants have not been present. 2 The matter concerns the construction of some works at 732 Military Road, Mosman. The plaintiff was the contractor and the defendant was a subcontractor who was engaged to do the formwork, steel reinforcing and concrete works. There was a tender process during the course of which the defendant increased the amount of the tender which it had put in. The price which was tendered was $634,590 inclusive of GST. That was accepted and a contract was entered into on 30 August 2007. That contract is in evidence before me. 3 There is also evidence that there were variations within the terms of that contract of $87,523 53, to bring the contract price to $722,113 53. 4 The evidence before me establishes that the plaintiff has directly paid the first defendant $442,707 52. In addition to this because of the difficulties which the sub-contractor had, the plaintiff paid amounts to the sub-contractor's sub contractors. These amounts are $273,487 33. 5 There are two claims in the proceedings. One relates to a claim which the defendants made that there was an oral variation for the price to be increased by $150,000. In the events that have happened that had some importance in what has happened since in the history in that there was a determination by an adjudicator under the Act in which that amount was allowed by the adjudicator. The other issue in the proceedings relates to the actual defective and incomplete works. A large amount of these have been rectified by the plaintiff and there are a number of matters which still, although rectified, currently have not been finally the subject of claims by contractors who were employed to do that work. 6 The adjudication determination to which I have referred is one for $208,843 55, which included the $150,000 to which I have referred. So far as the first matter is concerned, namely, the question of any additional contract sum of $150,000, it is plain that it is contrary to the express terms of the agreement as to the price, the express terms of the agreement as to variation of agreement particularly those requiring it to be in writing (see clause 3 and 66 of the contract) and was contrary to the tender process. Importantly it was only raised in writing for the first time as a claim made by the first defendant after it ceased working at the site. There is affidavit evidence by those on the part of the plaintiff who deny the suggestion there was any such claim. It seems clear on the evidence before me that the sub-contractor quite some time through the course of the contract started to realise that he may have under-priced it and said so to the plaintiff. The response was that the matter would be considered in due course depending upon the performance of the sub-contractor and his standard of workmanship. Unfortunately that turned out not to be appropriate. 7 I am satisfied that there is no claim for an additional $150,000 which was included in the certificate issued by the adjudicator under the Building and Construction Industry Security of Payment Act 1999. That was, in due course, registered as a judgement. What these proceedings are is, of course, the final determination of the rights of the parties pursuant to s 32 of the Act when the Court conducts a final accounting of what is due under the contract. 8 In the course of the current proceedings there was agreement on a regime in order to secure the amount of the judgment which reflected the adjudication amount and costs that an amount of $224,249.11 be paid into Court. That amount was paid into Court on 3 April 2009. 9 I turn to the claim for defective and incomplete works. These are pursuant to the various clauses in the contract for the works to be carried out in a proper and workmanlike manner. The list of them appears at tab 9 to exhibit B. Items 1 to 25 in that relate to the works that have been performed by the plaintiff to rectify the defendants' bad workmanship for which it has paid its new contractors which it has brought on to the site to do the works. Plainly given the fact that the defendants left the site in September last year and did not return, it has had to do this with a perhaps minimal prospect of recovery from the sub-contractor and, therefore, it is fairly plain that the works that have been done are necessary in order for the building to be built to the satisfaction of the owner in accordance with the head contract. 10 There has also been expert evidence by Mr Gibson who has addressed all the works that have to be done, both those which have been costed and those which are still subject to the estimates. The items which are subject to estimates on the part of the principal of the plaintiff are items 26 to 29 in the schedule at tab 9 in exhibit B. I have perused the various items and the photographs which record the damage and having regard to the expertise of Mr Gibson I think I will adopt his amount in respect of the proper cost of rectification. The difference is only $5,000 but given his expertise I will adopt his amount. 11 What needs to be done are for there to be appropriate declarations, particularly bearing in mind that there has been a determination and it may be necessary to set aside orders in the District Court. I will stand the matter down for a short time so that the appropriate declarations and orders can be formulated and those can include orders for payment out to the plaintiff of the amount paid into Court with any accrued interest. MATTER STOOD IN LIST 1. I make orders in accordance with the short minutes of order which I will sign and date and place with the papers. 2. The exhibits can be returned. 3. I direct the orders to be entered forthwith. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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