How We Helped
The builder sought assistance from Roberts Crosbie Mortensen Lawyers. Roberts Crosbie Mortensen provided advise and gave notice suspending the works for the owners’ failure to pay the sum of $40,000.00. Roberts Legal also indicated that the builder required that all past variations then be formalised in a Contract Variation.
The home owners sought legal representation from a general practice law firm. They paid the outstanding progress claim but demanded that they builder resume and complete the work for the original contract price.
On advice, the builder resumed work while correspondence in relation to the contract variations continued between the Solicitors. The builder then issued a further progress claim for approximately $30,000.00 and again suspended work when payment was not received by the due date.
In an attempt to resolve the dispute Roberts Crosbie Mortensen proposed that the parties jointly engage a Quantity Surveyor to value the cost of the variations for the purpose of formalising a Contract Variation. The owners did not accept this offer and instead engaged their own Quantity Surveyor.
Subsequently, the owners served a Construction Cost Report prepared by a Quantity Surveyor and asserted that they had overpaid the builder more than $100,000.00 for the work then completed. The owners also asserted, based on the Report, that the cost to complete the works was over $370,000.00.
Roberts Crosbie Mortensen quickly identified a flaw in the Quantity Surveyor’s costings and consequently the owners’ reasoning that they had overpaid the builder. Despite Roberts Crosbie Mortensen articulating the problems with the Report to the owners’ Solicitors, the owners refused to pay the oustanding progress claim or agree to any Contract Variation.
Instead, the owners purported to terminate the contract on the basis that the builder had repudiated the contract by refusing to complete the work for the original contract price.
Roberts Crosbie Mortensen provided advice and served notice of termination on behalf of the builder on the basis that the owners’ termination was invalid and that the owners were in breach for not paying the builder’s progress claim for $30,000.00.
The owners commenced an action in the District Court claiming damages against the builder in the sum of $372,000.00 on account of the alleged costs of completing the work. The owners also asserted that the builder had misled them when the contract was entered into by holding out that the builder held a Contractor Licence when in fact it did not.
The builder defended the claim on the basis that the contract had been validly suspended then terminated by the builder. The builder also cross-claimed for $30,000.00 in respect of the unpaid progress claim relying on Court’s discretionary power to order compensation despite the builder not holding a Contractor Licence.
Judge Sidis found in favour of the builder on both the Defence and Cross-Claim. Her Honour held that, on the basis of the owners’ own Quantity Surveyor’s report, the value of the works that had been carried out was approximately $200,000.00 more than the amount the builder had claimed, and that in the circumstances the owners’ purported termination of the contract was invalid.
Her Honour held that the builder’s suspension and termination had lawfully brought the contract to an end.
Her Honour also found that despite the builder not holding a Contractor Licence, in all the circumstances including that the works were almost defect free, it was just and equitable that the builder be entitled to payment of the sum of $30,000.00.
The Outcome
The matter was adjourned for the parties to make submissions in relation to Costs Orders. Because of the strong preliminary work undertaken by Roberts Crosbie Mortensen prior to the commencement of proceedings, Roberts Crosbie Mortensen was able to negotiate a favourable Costs Order for over $100,000.00 effectively achieving a full indemnity for the builder’s costs.
Roberts Crosbie Mortensen recovered the unpaid progress claim and costs in full within approximately two (2) months of the Judgment being given.
Libreri & Libreri v Burke [2012] NSWDC 27
