SUPREME COURT OF QUEENSLAND
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<strong>SUPREME</strong> <strong>COURT</strong> <strong>OF</strong> <strong>QUEENSLAND</strong><br />
CITATION:<br />
PARTIES:<br />
FILE NO: BS6603 of 2013<br />
DIVISION:<br />
PROCEEDING:<br />
BM Alliance Coal Operations Pty Ltd & Ors v BGC<br />
Contracting Pty Ltd [2016] QSC 55<br />
BM ALLIANCE COAL OPERATIONS PTY LTD<br />
ABN 67 096 412 752<br />
(first plaintiff)<br />
BHP COAL PTY LTD ABN 83 010 595 721<br />
(second plaintiff)<br />
BHP <strong>QUEENSLAND</strong> COAL INVESTMENTS PTY LTD<br />
ABN 56 098 876 825<br />
(third plaintiff)<br />
UMAL CONSOLIDATED PTY LTD ABN 29 000 767 386<br />
(fourth plaintiff)<br />
MITSUBISHI DEVELOPMENT PTY LTD<br />
ABN 17 009 779 873<br />
(fifth plaintiff)<br />
QCT MINING PTY LTD ABN 47 010 487 840<br />
(sixth plaintiff)<br />
QCT INVESTMENT PTY LTD ABN 45 010 487 831<br />
(seventh plaintiff)<br />
QCT RESOURCES PTY LTD ABN 74 010 808 705<br />
(eighth plaintiff)<br />
v<br />
BGC CONTRACTING PTY LTD ABN 88 008 766 407<br />
(defendant)<br />
Trial Division<br />
Interlocutory Application<br />
DELIVERED ON: 17 March 2016<br />
DELIVERED AT:<br />
Brisbane<br />
HEARING DATE: 11 February 2016<br />
JUDGE:<br />
ORDER:<br />
CATCHWORDS:<br />
Mullins J<br />
The defendant’s application filed on 18 December 2015 is<br />
dismissed.<br />
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND<br />
TERRITORY <strong>COURT</strong>S – PLEADINGS – STRIKING OUT –<br />
DISCLOSING NO REASONABLE CAUSE <strong>OF</strong> ACTION OR<br />
DEFENCE – where the plaintiff owner entered into a contract<br />
with the defendant contractor to construct an earthworks dam<br />
– where the plaintiff terminated the contract – where the<br />
plaintiff’s claim is for damages for breach of contract and<br />
repudiation – where the plaintiff alleges it is necessary to
2<br />
rectify the defendant’s breaches of the contract specified in the<br />
statement of claim and claims the costs of rectification as loss<br />
and damage – where the defendant applies to strike out<br />
paragraphs of the plaintiff’s statement of claim on the basis<br />
that the paragraphs failed to assert a causal nexus between the<br />
alleged breaches and the items of loss or damage – where the<br />
plaintiff relies on the application of the “ruling principle” for<br />
the assessment of damages for breach of contract – whether<br />
sufficient material facts are pleaded by the plaintiff to support<br />
the cause of action for damages for breach of contract<br />
COUNSEL:<br />
SOLICITORS:<br />
Bellgrove v Eldridge (1954) 90 CLR 613, considered<br />
Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56,<br />
considered<br />
Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310<br />
ALR 113, considered<br />
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009)<br />
236 CLR 272; [2009] HCA 8, considered<br />
Willshee v Westcourt Ltd [2009] WASCA 87, considered<br />
G Beacham QC with B O’Brien for the plaintiffs<br />
R A Holt QC with L Clark for the defendant<br />
Herbert Smith Freehills for the applicants<br />
McCullough Robertson Lawyers for the defendant<br />
[1] The defendant applies to strike out paragraphs 19 to 23 of the plaintiffs’ statement of<br />
claim filed on 23 April 2015 or, in the alternative, for an order that the plaintiffs provide<br />
further and better particulars in respect of paragraphs 19(d) and 20 to 22. The application<br />
is opposed on behalf of the plaintiffs. There is a dispute between the parties as to what<br />
material facts must be pleaded in respect of the plaintiffs’ claim for damages for breach<br />
of contract arising from works performed by the defendant (an earthworks contractor) in<br />
constructing an earthworks dam and associated works at Goonyella Riverside Mine near<br />
Moranbah.<br />
Background to plaintiffs’ claim<br />
[2] The plaintiffs are joint venture parties which own the mine and the first plaintiff is the<br />
management company which operates the mine for them. The relevant contract was<br />
entered into between the first plaintiff and the defendant in December 2010. In December<br />
2011 the first plaintiff terminated the contract. At the time the termination took effect in<br />
January 2012, the construction of the dam was incomplete.<br />
[3] This proceeding was commenced by the plaintiffs in July 2013 claiming damages for<br />
breach of contract and repudiation. The breaches alleged in paragraphs 14 to 18 of the<br />
statement of claim are the placement of “lots” of soil in the embankment of the dam which<br />
do not comply with the specifications in the contract, along with the late delivery or nondelivery<br />
of the test results and reports required under the contract which were required to
3<br />
demonstrate the compliance of the lots with the specifications. The plaintiffs seek the<br />
costs of rectifying the non-compliant lots and the additional costs of completing the dam.<br />
Progress of the pleadings<br />
[4] Paragraph 19 of the statement of claim (omitting the particulars) alleges:<br />
“19. By reason of the breaches of the Contract set out above:<br />
(a) The soil placed in the Embankment in the areas<br />
described in paragraph 14 above does not comply with<br />
the requirements of the Contract;<br />
(b) The first plaintiff cannot determine whether the soil<br />
placed in the Embankment in the areas described in<br />
paragraph 15 above complies with the Contract;<br />
(c) The first plaintiff did not become aware of the matters<br />
set out in (a) and (b) above, until further soil had been<br />
placed in the Embankment on top of the areas which<br />
suffer from the deficiencies described in (a) and (b)<br />
above;<br />
(d) The work performed under the Contract does not<br />
comply with the Contract.”<br />
[5] Paragraph 20 then pleads that by reason of the defendant’s breaches of contract referred<br />
to in paragraphs 14 to 18, the first plaintiff has suffered loss and damage, the measure of<br />
which is the cost of rectifying the breaches referred to in paragraphs 14 and 15, or<br />
alternatively 14 and 16. Paragraph 21 contains an alternative pleading on the basis that<br />
it is the joint venture parties which have suffered the loss and damage and the first plaintiff<br />
is entitled to sue for and recover that loss for the benefit of the joint venture parties.<br />
[6] Paragraph 22 then sets out what the plaintiffs allege is necessary to be done in order to<br />
rectify the breaches in these terms:<br />
“In order to rectify the breaches referred to in paragraphs 14 and 15, or<br />
alternatively 14 and 16, above, it is necessary to:<br />
(a) remove the work performed by the defendant that does not comply with<br />
the Contract, and re-perform that work in accordance with the Contract<br />
(Cost of Rectification);<br />
(b) alternatively:<br />
(i) alter the batter of the upstream shoulder from 1V:3H to<br />
1V:4H, and install a HDPE liner to the upstream shoulder and<br />
the floor of the Dam impoundment area (Alternative Cost of<br />
Rectification Option 1);<br />
(ii) alter the batter of the upstream shoulder from 1V:3H to<br />
1V:4H, completely remove and replace the downstream
4<br />
shoulder and increase the thickness of the filter blanket layer<br />
(Alternative Cost of Rectification Option 2).”<br />
[7] The respective costs of the rectification works are alleged in paragraph 23.<br />
[8] The defendant has pleaded to the respective allegations made in paragraphs 14 to 18 of<br />
the statement of claim and in paragraph 21 of the defence denies each of the allegations<br />
alleged in paragraph 19 of the statement of claim.<br />
[9] In paragraph 22 of the defence, the defendant responds to paragraph 20 of the statement<br />
of claim (on the assumption the defendant breached the contract as alleged by the first<br />
plaintiff) in these terms:<br />
“(a) no loss was suffered by the first plaintiff;<br />
(b)<br />
(c)<br />
(d)<br />
(e)<br />
the pleaded breaches of contract did not render the Dam (so far as<br />
completed to the time of termination) unfit for its intended purpose;<br />
the pleaded breaches of contract do not justify the expense, time and<br />
effort of demolishing and rebuilding the Dam;<br />
the time and cost involved in demolishing and rebuilding the Dam<br />
would be out of all proportion to the benefit gained;<br />
in the premises, demolishing and rebuilding the Dam is not a reasonable<br />
response to the pleaded breaches of contract.”<br />
[10] The same allegations are made by the defendant in paragraph 23 of the defence in<br />
response to paragraph 21(a) of the statement of claim.<br />
[11] In paragraph 24 of the defence, the defendant denies the allegations pleaded in paragraph<br />
22 of the statement of claim on the basis that it is not necessary for the plaintiff to<br />
undertake any of the work pleaded in paragraph 22 as a consequence of the defendant’s<br />
performance of the contract and alleges that any requirement to re-perform work<br />
performed by the defendant had been caused by the matters that are then set out in<br />
paragraph 24(b) of the defence.<br />
[12] There is a detailed response by the plaintiffs to paragraphs 22 and 23 of the defence which<br />
is set out in paragraph 24A of the reply. In particular, the plaintiffs pleaded in paragraph<br />
24A(b) that:<br />
“(b) in relation to paragraph 22(b) and 23(a)(ii) the plaintiffs:<br />
(i)<br />
(ii)<br />
say that the consequence of the breaches of contract set out<br />
in the further amended statement of claim is that the Dam<br />
could not be certified for use;<br />
deny the allegation and believe it to be untrue because of<br />
the material fact set out in sub-paragraph (i) above;”<br />
The defendant’s complaint
5<br />
[13] The defendant’s main complaint about paragraphs 19 to 23 of the statement of claim is<br />
that there is a failure to assert a causal nexus linking each alleged breach of contract in<br />
paragraphs 14 to 18 of the statement of claim with the loss and damage flowing from each<br />
breach.<br />
[14] The plaintiffs rely on Bellgrove v Eldridge (1954) 90 CLR 613 to assert in response that<br />
no further facts need be pleaded as the first plaintiff is entitled to insist upon performance<br />
of the contract and adherence to the standards of construction required by the contract<br />
and the loss for a failure to comply with those standards is the sum of money required to<br />
make the work conform with the contractual standard.<br />
[15] On the strike out application, the issue is whether, in respect of a cause of action for<br />
damages for breach of a contract, it is necessary for the plaintiffs to plead any additional<br />
material facts in the statement of claim showing the causal link between the acts<br />
complained of and the loss claimed.<br />
[16] Both parties’ submissions addressed authorities relevant to identifying the material facts<br />
to be established to recover damages for breach of contract. It is appropriate therefore to<br />
consider the effect of these authorities.<br />
The relevant authorities<br />
[17] In Bellgrove the defendant owner counterclaimed against the plaintiff builder for breach<br />
of the building contract and claimed damages on the basis the house was worthless. The<br />
trial judge had found that there had been “a very substantial departure from the<br />
specifications” that resulted “in grave instability in the building”. The issue before the<br />
trial judge was whether there was available for remedying the defect in the construction<br />
of the foundations any practical solution other than the demolition of the building and its<br />
re-erection in accordance with the plans and specifications. Judgment was given for the<br />
defendant for the amount that represented the cost of demolishing and re-erecting the<br />
building in accordance with the plans and specifications together with certain<br />
consequential losses less the demolition value of the house and moneys unpaid under the<br />
contract.<br />
[18] The court observed at 617:<br />
“In the present case, the respondent was entitled to have a building erected<br />
upon her land in accordance with the contract and the plans and specifications<br />
which formed part of it, and her damage is the loss which she has sustained<br />
by the failure of the appellant to perform his obligation to her. This loss<br />
cannot be measured by comparing the value of the building which has been<br />
erected with the value it would have borne if erected in accordance with the<br />
contract; her loss can, prima facie, be measured only by ascertaining the<br />
amount required to rectify the defects complained of and so give to her the<br />
equivalent of a building on her land which is substantially in accordance with<br />
the contract.”<br />
[19] It is apparent from the discussion by the court of the assessment of damages in Bellgrove<br />
that it was a question of fact as to what work was necessary to remedy the defects in the
6<br />
building to produce conformity with the plans and specifications and that not every breach<br />
of a building contract requires the removal or demolition of some part of the structure.<br />
The court noted at 618, as was held to be the position in Bellgrove, “there may well be<br />
cases where the only practicable method of producing conformity with plans and<br />
specifications is by demolishing the whole of the building and erecting another in its<br />
place”.<br />
[20] The court noted a qualification of reasonableness to the rule that the measure of damages<br />
is the cost of the remedial work required to achieve conformity with the plans and<br />
specifications in these terms, at 618:<br />
“The qualification, however, to which this rule is subject is that, not only must<br />
the work undertaken be necessary to produce conformity, but that also, it must<br />
be a reasonable course to adopt.”<br />
[21] Bellgrove was considered by the High Court in Tabcorp Holdings Ltd v Bowen<br />
Investments Pty Ltd (2009) 236 CLR 272 which concerned the measure of damages<br />
recoverable by a landlord for the breach by the tenant of clause 2.13 of the lease of<br />
business premises pursuant to which the tenant had covenanted not to make, or permit to<br />
be made, any substantial alteration or addition to the demised premises, without the prior<br />
written approval of the landlord (which consent was not to be unreasonably withheld or<br />
delayed). The lease was for a term of 10 years that commenced on 1 February 1997.<br />
Without the permission of the landlord, the tenant in July 1997 commenced a massive<br />
refurbishment of the foyer which resulted in the removal of the existing foyer and the<br />
construction of a high quality foyer made from granite. At first instance, judgment was<br />
given for the landlord for damages of $34,820 which was assessed at the diminution in<br />
the value of the building for breach of clause 2.13. The landlord successfully appealed<br />
to the Full Court of the Federal Court of Australia and was awarded damages by the<br />
majority of $1.38m based on the cost of reinstatement approach. The appeal to the High<br />
Court was unsuccessful.<br />
[22] The judgment of the High Court at [12] noted that clause 2.13 was an express negative<br />
covenant that served “a function of considerable practicable utility in relation to the<br />
Landlord’s capacity to protect its legitimate interest in preserving the physical character<br />
of the premises leased.” The court also noted at [12] that the landlord would have been<br />
able to obtain the assistance of equitable remedies to prevent a substantial alteration being<br />
made to the premises by the tenant without prior written consent. In respect of the tenant’s<br />
submission that the appropriate measure of damages was the diminution in value of the<br />
reversion, the court observed at [13]:<br />
“The assumption underlying the Tenant’s submission takes no account of the<br />
existence of equitable remedies, like decrees of specific performance and<br />
injunction, which ensure or encourage the performance of contracts rather<br />
than the payment of damages for breach. It is an assumption which underrates<br />
the extent to which those remedies are available. However, even if the<br />
assumption were correct it would not assist the Tenant. The Tenant’s<br />
submission misunderstands the common law in relation to damages for breach<br />
of contract. The ‘ruling principle’, confirmed in this Court on numerous<br />
occasions, with respect to damages at common law for breach of contract is<br />
that stated by Parke B in Robinson v Harman:
7<br />
‘The rule of the common law is, that where a party sustains a loss<br />
by reason of a breach of contract, he is, so far as money can do it,<br />
to be placed in the same situation, with respect to damages, as if<br />
the contract had been performed’.” (footnotes omitted)<br />
[23] The court therefore held at [15] that “the Landlord was contractually entitled to the<br />
preservation of the premises without alterations not consented to; its measure of damages<br />
is the loss sustained by the failure of the Tenant to perform that obligation; and that loss<br />
is the cost of restoring the premises to the condition in which they would have been if the<br />
obligation had not been breached”. The court also noted at [15] the similar approach of<br />
the court in Bellgrove at 617.<br />
[24] The tenant relied on the qualification referred to in Bellgrove. The court noted, however,<br />
that on the basis of the example which the court in Bellgrove had given at 618 of when<br />
the qualification to the ruling principle would apply that it tended “to indicate that the test<br />
of ‘unreasonableness’ is only to be satisfied by fairly exceptional circumstances. It was<br />
also noted at [17] that the “reasonableness” exception was not found to exist in Bellgrove<br />
and nothing in the reasoning in Bellgrove suggested that the course which the landlord<br />
proposed in Tabcorp was unnecessary or unreasonable.<br />
[25] The court in Tabcorp concluded at [19]-[20]:<br />
“[19] Further, the Landlord correctly submitted that the Tenant’s submission<br />
misconstrued what this Court said in Bellgrove v Eldridge. The<br />
‘qualification’ referred to in the passage quoted above that the ‘work<br />
undertaken be necessary to produce conformity’ meant, in that case, apt<br />
to conform with the plans and specifications which had not been<br />
conformed with. Applied to this case, the expression ‘necessary to<br />
produce conformity’ means ‘apt to bring about conformity between the<br />
foyer as it would become after the damages had been spent in rebuilding<br />
it and the foyer as it was at the start of the lease’. And the Landlord also<br />
correctly submitted that the requirement of reasonableness did not mean<br />
that any excess over the amount recoverable on a diminution in value<br />
was unreasonable. The Tenant’s submissions rested on a loose principle<br />
of ‘reasonableness’ which would radically undercut the bargain which<br />
the innocent party had contracted for and make it very difficult to<br />
determine in any particular case on what basis damages would be<br />
assessed. That principle should not be accepted.<br />
[20] If the benefit of the covenant in cl 2.13 were to be secured to the<br />
Landlord, it is necessary that reinstatement damages be paid, and it is<br />
not unreasonable for the Landlord to insist on their payment.”<br />
(footnotes omitted)<br />
[26] Bellgrove therefore remains authoritative for the application of the ruling principle where<br />
a builder breaches a contract by substantially departing from the specifications.<br />
[27] Both Bellgrove and Tabcorp were applied in Willshee v Westcourt Ltd [2009] WASCA<br />
87. There was an implied term in the building contract for a house that the limestone for<br />
the external cladding would be of high quality. The owner Mr Willshee claimed that the
8<br />
builder Westcourt breached that term by using inferior or second quality limestone. That<br />
claim was upheld, but Mr Willshee was awarded damages by the trial judge only for the<br />
cost of cleaning and sealing the limestone and some repainting. Mr Willshee succeeded<br />
on appeal to recover damages for the amount required to put him in the position of having<br />
a house constructed using limestone which was of high quality. The damages reflected<br />
the cost of demolishing the exterior wall and replacing it with limestone which was of<br />
high quality. In considering the application of the qualification of unreasonableness,<br />
Martin CJ (with whom the other members of the court agreed) at [70] found that<br />
Westcourt’s breach “was a serious and significant breach, which had a significant impact<br />
upon the rate at which the external cladding of the house weathered and deteriorated, and<br />
which has had a significant impact upon the appearance of the house”. It was also noted<br />
by Martin CJ at [72] that the party wishing to rely upon the qualification to the “ruling<br />
principle” of damages carries the onus of proving the facts relevant to its application.<br />
[28] Tabcorp was followed in Clark v Macourt (2013) 253 CLR 1, in which the ruling<br />
principle was applied in assessing damages for breach of warranty in respect of some of<br />
the assets that were sold by the vendor company to Dr Clark. Dr Clark had agreed to<br />
purchase from the vendor company the assets attached to an artificial reproductive<br />
technology business including frozen sperm. The vendor warranted that it would provide<br />
Dr Clark records for the frozen sperm that complied with specified guidelines. Of the<br />
3,513 straws of frozen sperm that were delivered, only 504 of those had compliant records<br />
and were therefore usable by Dr Clark in her artificial reproductive technology business.<br />
Dr Clark therefore had to acquire usable frozen sperm from a supplier in the United States.<br />
She charged her patients a fee which covered the costs in acquiring the usable frozen<br />
sperm from the United States. The parties agreed that Dr Clark should have expected to<br />
receive, in accordance with the warranty, an additional 1,996 compliant and usable sperm<br />
straws, apart from the 504 that were usable. At first instance damages were assessed at<br />
almost $1.3m as the value of the 1,996 compliant sperm straws as at the date of<br />
completion. The appeal had been allowed by the New South Wales Court of Appeal on<br />
the basis that Dr Clark had suffered no loss. Dr Clark appealed to the High Court.<br />
[29] By majority, the High Court allowed the appeal and reinstated the assessment of damages<br />
at first instance on the basis that damages for breach of contract were to put the promisee,<br />
so far as money could do it, in the same situation, as if the contract had been performed<br />
as promised (at [7], [26] and [106]). As damages were assessed at the date of breach and<br />
not at the date of trial, the subsequent dealings by Dr Clark left her neither better nor<br />
worse off than she was before she undertook the transactions (at [19], [37] and [128]-<br />
[129]).<br />
[30] The majority were therefore in agreement that the ruling principle governed the<br />
assessment of damages. Keane J noted at [107] that in Bellgrove the court at 617-618<br />
“explained that the practical operation of the ruling principle may vary depending on the<br />
commercial context; but that the principle is always applied with a view to assuring to the<br />
purchaser the monetary value of faithful performance by the vendor of the bargain”.<br />
Keane J then stated at [109]:<br />
“The value to be paid in accordance with the ruling principle is assessed at<br />
the date of breach of contract, not as a matter of discretion, but as an integral<br />
aspect of the principle, which is concerned to give the purchaser the economic<br />
value of the performance of the contract at the time that performance was
9<br />
promised. In this way, the measure of damages captures for the purchaser the<br />
benefit of the bargain and so compensates the purchaser for the loss of that<br />
benefit. (footnote omitted)<br />
[31] The defendant relies on a statement made by Leeming JA (with whom the other members<br />
of the court agreed) in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR<br />
113 in dealing with what the plaintiff in a building case must prove to establish damages<br />
for breach of contract where there is a “global claim” for damages. Leeming JA<br />
confirmed at [186] that “there are no special legal principles that mean the plaintiffs in<br />
‘building cases’ win or lose differently from plaintiffs in other classes of contractual<br />
case”. Leeming JA then stated at [187]-[188]:<br />
“[187] A plaintiff seeking damages will fail unless he, she or it establishes<br />
breach, causation and loss.<br />
[188] True it is that some decisions on breach of contract in building cases<br />
have used the language of ‘global claim’. Contrary to what was at<br />
the forefront of Mainteck’s written and oral submissions, this does<br />
not involve any special principles of fact or of law.”<br />
[32] There is nothing in these general observations by Leeming JA in Mainteck which detract<br />
from the authority of Bellgrove and Tabcorp in the application of the ruling principle to<br />
the assessment of damages for breach of contract.<br />
Are all material facts pleaded in the statement of claim?<br />
[33] The plaintiffs are not required to plead that they are seeking for the damages to be<br />
assessed by the application of the ruling principle, as that is law that applies to the<br />
plaintiffs’ claim in accordance with the relevant authorities. A subsidiary complaint<br />
which the defendant’s solicitors had made in the r 444 letter dated 12 November 2015<br />
was that for the costs of rectification work to be recoverable as damages for breach as the<br />
plaintiffs had pleaded in their statement of claim “the dam must have been deficient in<br />
some way as a result of the alleged breaches” and asserted that the plaintiffs need to plead<br />
that each of those breaches created a deficiency in the dam and what the deficiency was.<br />
In similar vein, the defendant submitted on this application that no practical consequence<br />
from any defect in the dam, such as the dam not being reasonably fit for its purpose, is<br />
pleaded. The subsidiary point raised by the defendant is not supported by the relevant<br />
authorities.<br />
[34] In a claim for damages for breach of a construction contract in reliance on Bellgrove, the<br />
statement of claim must plead the relevant provisions of the contract, identify the breaches<br />
and then plead the action the plaintiffs assert must be taken to rectify the breaches to<br />
achieve conformity with the contract. This must be followed by the specification of the<br />
loss and damage arising from the costs of rectification.<br />
[35] The defendant’s submission which is critical of paragraph 20 (and also paragraph 21) of<br />
the statement of claim asserts that these are the paragraphs alleging loss and damage<br />
arising from the alleged breaches and that no attempt is made by the plaintiffs to identify<br />
or plead the causal nexus between breaches and the alleged loss and damage.
10<br />
[36] It is a mistake to focus on paragraphs 20 and 21 of the statement of claim, without having<br />
regard to the allegation in paragraph 22. It is worth observing that paragraphs 20 and 21<br />
appear to be out of order with paragraph 22.<br />
[37] It is paragraph 22 in which the allegation is made that in order to rectify the breaches<br />
referred to in paragraphs 14 and 15 (or 14 and 16) it is necessary to remove the work<br />
performed by the defendant that did not comply with the contract and re-perform the work<br />
in accordance with the contract which is described as the cost of rectification. Two<br />
alternative methods of rectification are then pleaded in paragraph 22(b). Paragraph 20<br />
(and therefore paragraph 21) logically follow with the claim for that cost of rectification<br />
as the loss and damage for the breaches of the contract. The qualification of the<br />
reasonableness of the proposed rectification as an issue has then been raised in paragraph<br />
22(e) of the defence, as contemplated by Willshee at [72].<br />
[38] The defendant’s complaint that the plaintiffs should plead a causal nexus between each<br />
alleged breach of contract with a particular item of loss or damage is unfounded, when<br />
the plaintiffs are seeking to recover the cost of the work that is necessary to remedy all<br />
the non-compliances with the contract, so that the first plaintiff is in the position, as if the<br />
contract had been performed as promised.<br />
[39] The defendant’s complaints about paragraphs 19 to 23 of the statement of claim are<br />
misconceived in light of the plaintiffs’ reliance on the application of the ruling principle<br />
to the assessment for damages for breach of contract. All material facts to support the<br />
claim have been pleaded. The application to strike out paragraphs 19 to 23 of the<br />
statement of claim cannot succeed.<br />
Request for particulars<br />
[40] In respect of paragraphs 19(d), the defendant seeks full particulars of the “work performed<br />
under the Contract” which is said not to comply with the contract. That request takes<br />
paragraph 19(d) out of context. It is the conclusion to the pleading of the other matters<br />
in paragraphs 19(a), (b) and (c). Paragraph 19 has otherwise been previously<br />
particularised in an adequate manner.<br />
[41] The request for further particulars of paragraphs 20 and 21 of the statement of claim in<br />
respect of the loss and damage alleged to have been caused by each of the defendant’s<br />
alleged breaches of contract is misconceived in light of the reliance by the plaintiffs on<br />
the application of the ruling principle. For the same reason the defendant’s request in<br />
respect of the facts, matters, circumstances and things relied on by the plaintiffs in support<br />
of the allegation that the alleged necessity to rectify was caused by the alleged breaches<br />
is also misconceived. The balance of the particulars that are sought in respect of<br />
paragraph 22 of the statement of claim is in respect of matters that have already been<br />
sufficiently pleaded and particularised by reference to the breaches referred to in<br />
paragraphs 14 and 15 (or 14 and 16) of the statement of claim. The request for particulars<br />
appears to have been drafted, without considering the content and context of the other<br />
relevant paragraphs in the statement of claim.
11<br />
[42] The alternative claim in the application for an order for further and better particulars must<br />
also fail.<br />
Orders<br />
[43] It follows that the defendant’s application filed on 18 December 2015 must be dismissed.<br />
[44] Subject to hearing submissions from the parties, I consider that costs should follow the<br />
event.