December 19, 2019

In Futurepower Developments Pty Ltd v TJ & RF Fordham Pty Ltd t/as TRN Group [2019] NSWSC 1554, a developer (Futurepower) engaged a Builder (TRN) to perform roads and drainage works across two adjoining properties (the Project).

Futurepower engaged surveyors and project managers (NWS) for the Project. The building contract between Futurepower and TRN (the Contract) specifically provided that “Mr John Attard of NWS” was the Superintendent for the Project.

During the excavation, TRN discovered a considerable amount of uncontrolled fill. There was some dispute regarding whether the fill also contained fragments of asbestos. An employee of NWS, Mr Harding, instructed TRN to send its consultants to inspect and assess the material, and attended a site meeting with a representative of Futurepower regarding removal of the material.

TRN subsequently arranged for the removal of the material and issued claims in relation to this work, which were approved by Mr Harding. TRN later issued two payment claims under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) for the additional costs incurred in relation to the fill removal. Futurepower rejected the SOP Act claims. It cited as its basis, that Mr Harding had approved and directed the fill removal, meaning that such directions and approvals had no force because he was not the contractually specified Superintendent. TRN referred the SOP Act payment claims to adjudication. It succeeded, and was found to be entitled to a total sum of $922,622.12.

Futurepower commenced proceedings against TRN to recover a portion of the adjudication amount. It alleged that TRN’s claims in respect of the removal of the material were invalid, as they were predicated on Mr Harding being the Superintendent rather than Mr Attard.

Rein J found that the circumstances of the case indicated that both Futurepower and TRN had been proceeding on the basis that Mr Harding was the Superintendent, observing that Mr Harding had:

  •   attended all site meetings and meetings relating to the asbestos issue;
  •   provided Mr Carbone (the husband of Futurepower’s director) with a costs estimate in relation to the asbestos removal;
  •   purported to grant extensions of time; and
  •   signed all progress certificates and issued the Certificate of Practical Completion.

His Honour noted as relevant that Futurepower’s evidence had not indicated the existence of a single communication between Mr Attard and Futurepower concerning suspicions regarding the contaminated fill.

In dismissing Futurepower’s argument concerning the Superintendent, His Honour observed that the above factual matters undermined a strict reading of the contractual provisions regarding the identity of the Superintendent, and highlighted the relevance of both parties’ conduct to the interpretation of their respective rights and obligations.

The full decision can be found here.

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