PARTIES:	CIVIL & CIVIC PTY LTD
V
ISICOB PTY LIMITED & ORS

TITLE OF COURT:	In the Supreme Court of the Northern
Territory of Australia

JURISDICTION:		Supreme Court of the Northern Territory of Australia exercising Territory jurisdiction

FILE :	19 of 1993

DELIVERED:	Delivered at Darwin 19 April 1993 HEARING DATES:	Heard at Darwin 29 March 1993 JUDGMENT OF:	Mildren J

REPRESENTATION:

counsel Plaintiff:  1st Defendant: 5th Defendant:

Solicitors Plaintiff:  1st Defendant: 5th Defendant:

T Riley QC/	S Gearin/ J Trier S Southwood/ A Musgrave
I Nosworthy/ J Stewart

Philip & Mitaros waters James McCormack Ward Keller

Judgment category classification: CAT B Court Computer Code: 9302438
Judgment ID Number: MIL93002 Number of pages: 15
Local Unpublished Distribution

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA
AT DARWIN

N2 19 of 1993 BETWEEN:
CIVIL & CIVIC PTY LTD
Plaintiff

AND:
ISICOB PTY LIMITED
First Defendant

AND:
KONE ELEVATORS (AUSTRALIA) PTY LIMITED
Second Defendant

AND:
KILPATRICK GREEN PTY LTD
Third Defendant

AND:
TRIAD PLUMBING PTY LTD
Fourth Defendant

AND:

PIONEER CONCRETE (NT) PTY LTD
Fifth Defendant
AND:

AVERY AUSTRALIA LIMITED
Sixth Defendant
CORAM: Mildren J

REASONS FOR JUDGMENT
(Delivered 19 April 1993)

This	is an application	by Originating	Motion	pursuant to r4.06 of the Supreme Court Rules for a declaration that:
"On the true construction of the contract between the plaintiff and the first defendant ... the plaintiff is not liable to the first defendant for any costs of delay restricted access and disruption resulting from the suspension of the works."

Relevant Background
The plaintiff, having entered into a contract to build a multi-storey office building in Darwin, subcontracted with the fifth defendant Pioneer Concrete (NT) Pty Ltd ("Pioneer") to supply and test concrete for the project in accordance with certain conditions and specifications. The plaintiff also entered into a subcontract with the first defendant Isicob Pty Limited ("Isicob") in respect of the placing of reinforcement for cast-in-place concrete and related items in connection with the project.

On 28 November 1988, the Northern Territory manager of Pioneer orally informed the plaintiff's project  manager that the concrete which the defendant supplied was under strength. On the same day, the plaintiff instructed Isicob in writing to stop all work on the main tower until further advised; work on another section of the building was, however, to proceed.

On 8 June 1990, the plaintiff issued a Writ in action  345/90 ("the action") against Pioneer claiming damages for breach of contract and in negligence arising out of supply of the defective concrete. On 1 February 1991,  the plaintiff obtained summary judgment against Pioneer for damages to be assessed for breach of contract: see Civil & Civic Pty Ltd v Pioneer Concrete (NT) Pty Ltd (1991) 1 NTLR
43. The further hearing of the action for, inter alia, the assessment of damages, is set down for hearing on 4 October 1993.

Following the discovery of the defective concrete, certain rectification work has been carried out. Isicob has claimed against the plaintiff monies for delay costs and rectification costs. The plaintiff seeks, in the action, to recover as part of its damages against Pioneer, any delay costs which it might be called upon to pay Isicob. Pioneer has pleaded in its Amended Defence and Counterclaim that,

by reason of the provisions of clause 17 of the special conditions of the subcontract between the plaintiff and Isicob, the plaintiff has no liability to Isicob for delay costs. Further, Pioneer claims that the plaintiff failed to mitigate its loss because it failed to suspend  Isicob's work following supply by Pioneer of the defective concrete pursuant to clause 9 of the special conditions. In the meantime, Isicob has referred its claim against the plaintiff for delay and rectification costs to arbitration.

The contentions of the parties
The plaintiff submitted that the issue raised by the originating Motion ought to be determined either by  granting the declaration sought, or by granting some other declaratory relief depending on the true construction  of the contract for a variety of reasons. Firstly, the plaintiff runs the risk of falling between two stools. The arbitration proceedings, to which Pioneer is not a party, might be resolved in favour of Isicob, thereby obliging the plaintiff to pay delay costs to Isicob, whereas the action might resolve the same issue as between the plaintiff and Pioneer differently, and the limited right of the plaintiff to appeal the arbitrator's decision under s38(5) of the Commercial Arbitration Act requires proof of "manifest error on the face of the award" or strong evidence of an error of law, and a finding that "the determination  of  the
question may be likely to add substantially to  the certainty of the commercial law." Thus  it was submitted that, as Pioneer could not be made a party to the arbitration proceedings, it was appropriate  for the issue to be resolved in these proceedings to which both Isicob  and  Pioneer  are parties.  Secondly,  it was submitted that
(a) if Pioneer's position is correct, it  would substantially shorten the hearing time involved in both the arbitration proceedings and in the action; (b) if Pioneer's position is incorrect, there would still be a shortening of the hearing  of the action.  Thirdly,  it was submitted that

resolution of this issue would enhance the prospects of settlement of both the arbitration proceedings and the action.

Isicob's position was that it was content to argue the question on the merits. Isicob's counsel indicated Isicob would be seeking a declaration in the negative to that sought in the Originating Motion.

Pioneer's position was that I ought to refuse to make any declaration, either because of matters going to the heart  of the Court's jurisdiction, or in the proper exercise of the Court's discretion, for a number of reasons.

The first contention was that the Originating Motion was

also	directed plaintiff	was

against	four not	proposing

other		defendants,	and		the to	proceed	against	those

defendants. The issues raised in the Originating Motion, as it affected those defendants, were similar, but not the same, as the issues between the present parties. With the exception of the sixth defendant, the other defendants were all subcontractors of the plaintiff in a similar  position to Isicob. However, it was conceded that the terms of the subcontracts between those defendants and the plaintiff were, in material respects, different from the terms of the subcontract between the plaintiff and Isicob. Nevertheless, Mr Nosworthy, counsel for Pioneer, maintained that a resolution of the issues between the plaintiff, Isicob and Pioneer, could somehow affect the rights of those parties.  I am unable to see how this could be so. Clearly the  parties are not bound by my decision, and if the contracts

are not identical in their material terms, this	case	is	not	likely	to	place	those

my decision in parties	at	any

disadvantage even at the negotiating table. I am unable to
see why the non-appearance of the other defendants should preclude the plaintiff from obtaining relief.

The other matters relied upon by Pioneer are (1) the plaintiff and Isicob had struck "some sort of deal" which precludes them from seeking relief in these proceedings (2) the issue was not a mere question of construction; there were factual matters that had to be resolved which were in dispute (3) the prayer for relief is expressed too widely
no other declaration other than the one sought in the Originating Motion was appropriate as no notice of any counter-declaration by Isicob had been given (5) Isicob's counter-declaration overlooked the difference  between claims for damages for breach of contract which are outside the terms of the subcontract, and claims made within the terms of the subcontract, assuming no breach. I will deal with these submissions later.

The terms of the subcontract between the plaintiff and Isicob
The subcontract consists of the following documents:
a document headed "Agreement" dated 17 June 1988 between the plaintiff and Isicob containing a number of "Conditions" and "Special Conditions of Contract."
a document dated 17 June 1988 between the same parties called "Special Conditions of Subcontract."
letters passing between the same parties dated 5 August 1988, 29 August 1988, 8 September 1988 and
9 September 1988 (which amend some of the provisions of the documents referred  to in (a) and (b) above).
"amendment advices" marked as annexure "A" to the affidavit of Janet Denise Trier sworn 11 February 1993. (These are not relevant to the issues.)

Clause 5(e) of the "Conditions" provides: "The granting of extensions of time by Civil & civic" (the plaintiff) "shall

not form the basis for a claim by the Subcontractor" (Isicob) "for extra costs and will not in any event vitiate this contract."

clause 5(h} provides that "in the event of a delay being caused by one or more of the matters set forth in subclause 5(c)     the Subcontractor shall be entitled  to claim and be allowed a fair and reasonable extension of time in accordance with and subject to the provisions of this contract."

One of the matters referred to in subclause 5(c) is: "(xi) Any other matter beyond the control of the Subcontractor which could not have reasonably been anticipated by him."

Prior to being amended, clause 55 of the "Special  Conditions of Contract" (which are in truth merely an extension of the conditions, as appears from the numbering system used in the various clauses), provided that the "specified causes of delay for extension of time claims under the terms and conditions of the Head Contract are nominated below. Notwithstanding the provisions of clause 5 of the Conditions the Subcontractor  shall not be entitled to give a notice under clause 5(a) of the Conditions except in respect of the following causes:" This clause then lists nine separate 'causes.' There is no 'cause' similar to subclause 5(c) (xi). However, one of the other causes which may be relevant is:
"6.	Performance of any instruction by civil & Civic, for the postponement of any works ..."

Prior to amendment, clause 56 provided: "56.0	Delay Costs
The Subcontractor accepts the risk of all losses costs and expenses which may be sustained or incurred in consequence of any delay in progress of the Works occasioned by any cause beyond the Subcontractor's control except the following causes:

an instruction by C & C as to a Variation; and
if the progress of the Head Contract Works is delayed by any cause or causes beyond the control of the Subcontractor being an act default or omission on the part of the Proprietor (including any conduct of the Architect as the Proprietor' s agent in such a manner as naturally affects the progress of the Subcontract Works: PROVIDED  HOWEVER that the reimbursement of any losses costs and expenses shall only be to the extent that the losses costs and expenses have been included in the reimbursement  by the Proprietor to C &  C of the losses costs and expenses incurred by C & C by reason of delay in the progress of the Head  Contract Works.

The value of the Variation as agreed by the Contractor and the Architect (whether agreed before or after the commencement of the execution of the Variation) shall be deemed to comprehend all the Subcontractor's costs and expenses whatsoever of or in relation to the Variation, including costs and expenses which have been, or will or may be, incurred or wasted or lost in consequence of  any delay or apprehended delay in progress  of the Works caused by the instruction or the execution of the Variation."

The "Special  Conditions of Subcontract"	provide in clause
1. 1 that the Agreement and the Conditions shall be read "subject to these Special Conditions of Subcontract."

Clause 9.1 of the "Special Conditions of Subcontract" provides that the plaintiff may by notice in  writing suspend the performance of all or any part of the Works for such time or times as the plaintiff may think fit.

Prior to amendment, clause 9.3 provided:
"The extra cost, if any, of completing the Works incurred by the Subcontractor by reason of a direction given by" (the plaintiff) "pursuant to clause 9.1 of the Special Conditions shall be borne and paid for by the Subcontractor unless the suspension is  due directly to an act, default or omission of" (the

plaintiff) "in which case the Subcontractor shall be entitled to payment of the amount of any extra cost of completing the Works incurred by it that is directly attributable to such act, default or omission."

Prior to amendment, clause 17.1 of the "Special Conditions of Subcontract" provided:
"The Subcontractor's sole remedy arising out of  a delay to the progress or completion of the Works due  to any reason whatsoever shall be an extension of time approved by C & C under clause 5 of the Conditions and no costs or damages shall be payable by C & C to the Subcontractor in respect of such a delay."

It is clear from the proceedings in the action that clause
in its pre-amended form and clause 17.1 prior to its amendment are the clauses relied upon by Pioneer to show that the plaintiff is not liable to Isicob for delay costs. It is not pleaded that any other clause in the contract had this affect, although clause 56 in its pre-amended from might also have been relied upon.

The next matter to be considered is Isicob's letter of 5 August 1988. Isicob sought a number of amendments to the contract documents before it regarded itself as  being bound. The relevant amendments sought for the purposes of this matter affected clauses  55 and 56 of the Conditions (or "Special Conditions") and clauses 9.1 and 17 of the "Special Conditions" as follows:
By para 11 of its letter, Isicob sought to amend clause 55 to add thereto subparagraphs 10 and 1 . Subpara 10 is not relevant, but subpara 11 is. It provides as follows:
"11. Delays to the Works of the  Subcontractor caused by reasons beyond the control of the Subcontractor."
By para 13 of its letter, Isicob sought to add a further paragraph to clause 56 as follows:
"3. Any delay occasioned by paragraphs 6,7,8,9, 10 or 11 of clause 55."

By para 19 of its letter, Isicob sought to amend clause 9.3 of the "Special Conditions" so as to read:
"9.3 The extra cost, if any, of completing the Works incurred by the Subcontractor by reason of a direction given by C & C pursuant to clause 9.1 of the Special Conditions shall be borne and paid for by C & C unless the suspension is due directly to an act, default or omission of the Subcontractor."
By para 21 of its letter, Isicob sought to delete clause 17 of the "Special conditions" of the Subcontract.

By its letter dated 29 August 1988, Civil & Civic indicated that it agreed to accept the above amendments (except para
21) and by its letter dated 8 September 1988, Civil & Civic indicated that it agreed to accept all of the above amendments. Isicob's final letter of 9 September 1988 confirmed the changes, as well as others referred to in the correspondence. In my opinion it is abundantly clear that the contract incorporated the changes to clauses 55 and 56 of the conditions, and clauses 9.3 and 17 of the "Special Conditions." The end result is that clause 17 of the "Special Conditions" was deleted from the contract.

The relief sought
In view of the fact that clause 17 of the "Special Conditions" had been deleted, and of the amendments made to clauses 55 and 56 of the Conditions and clause 9.3 of the "Special Conditions", it is abundantly clear that the plaintiff is not entitled to a declaration in the form sought in the Originating Motion.

The question then arises as to what other relief, if any, ought to be given.

Mr Southwood, who appeared for Isicob, initially sought a declaration in the following form:

"On the true construction of the contract the  plaintiff is liable to the First Defendant (Isicob)  for any costs of delay restricted access and  disruption resulting from the suspension of  the Works."

Mr Nosworthy, for Pioneer, submitted that this was too  large a leap, as there were factual findings that were needed in order to support that conclusion, and that, in  any event, " costs of delay restricted access  and disruption resulting from the suspension of the Works" may not  be the same thing  as "  the extra  cost  of  completing the Works incurred by the Subcontractor by

reason of a direction given by of	the	Special	Conditions however,	that	he would	find

c &   c pursuant to clause 9.1
"		He	frankly		admitted, it	"difficult	to	resist"	a

declaration, if one ought to be made at all, along the lines:
"In so far as the rights of the plaintiff and Isicob fall for determination under clause 9.3 of the Special Conditions of the contract, declare that Isicob is entitled to the extra cost, if any, of completing the Works incurred by the Subcontractor by reason of any direction given by the plaintiff to Isicob pursuant to clause 9.1 of the Special Conditions."

Nevertheless, he made it clear that in the absence of any notice of the form of any alternative declaration to that sought in the Originating Motion, no declaration  ought to be made.

The mere fact that the relief sought in the form of the declaration set out in the Originating Motion cannot be granted does not in itself preclude the Court from granting some other form of declaratory relief. There are many instances where courts have granted 'reverse' declarations,
i.e. a declaration  in terms opposite to that sought  by the
plaintiff: see, for example, Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [ 1974 J 1 NSWLR 93 at 108; Becker v Corporation of the City of Marion and the Director
of   Planning   (N21 )    ( 1974) 9 SASR 543 and Becker   v   Corporation

of the City of Marion and the Director of Planning (NQ2)
(1974) 9 SASR 560 at 560-1; (and see (1975-6} 8 ALR 421 at
425; A Hudson Pty Ltd v Legal & General Life of Australia Ltd (1984-5} 59 ALR 505 at 513-14 per Kirby P.

The form of declaration sought by Isicob is in one sense  the 'reverse' to that sought by the plaintiff in that it merely omits the word "not" from the declaration as sought. However, the fact that Isicob is not precluded by the express provisions of the contract from making a particular type of claim does not logically lead to the conclusion  that the plaintiff is thereby liable to Isicob upon that type of claim. Whether such entitlement exists depends upon
(a) whether the claim is made in accordance with the contract's terms or outside of the contract, i.e. damages for breach; (b) if the claim is made pursuant to the terms of the contract, whether all of the terms have been fulfilled; (c) if the claim is made outside of the contract whether breach of the contract has been established and whether the damages claimed flow from the breach and  are not too remote: see Hadley v Baxendale (1859) 9 Ex Ch 341; 156 ER 145; [1843-1860) All ER 461.

rt was submitted by Isicob that an alternative form of declaration which would be appropriate is a declaration "that on the true construction of the contract between the plaintiff and the first defendant the plaintiff  is liable to the first defendant for the extra cost, if any, of completing the Works incurred by the first defendant by reason of the suspension of the contract  by the plaintiff on 28 November 1988." Mr Southwood submitted that this form of declaration  adopted precisely  the words used  in clause
9. 3, except for the words "unless the suspension is due directly to an act, default or omission of the Subcontractor." It was submitted that it was appropriate to omit these words as there was no evidence, or suggestion, that the suspension was due to any other cause apart from

the faulty concrete supplied by Pioneer. However, even this form of declaration would give rise to the difficulty that the question of what items could be claimed was left unresolved, given that the words "extra cost" might not encompass everything claimed as prolongation costs. It was submitted by Mr Riley QC and by Mr Southwood that the Court

ought to declare	also that "delay" costs	were	contemplated	by	the

costs words

or prolongation "extra	costs"

contained in clause 9.3. Mr Nosworthy, however, pointed to clause 5(e) which seems to preclude claims for extra costs where an extension of time has been given, and submitted that as Pioneer is a stranger to the contract  between Isicob and the plaintiff, and there were issues of fact to be determined, no declaration ought to be made. However, to the extent that clause 5(e) conflicts with clause 9.3 of  the "Special Conditions", it is clear that clause 5(e) must be read down.

According to the affidavit of Janet Denise Trier sworn 9 February 1993, the plaintiff suspended the works when the plaintiff became aware of the supply of under-strength concrete, by notice in writing dated 28 November 1988 (Ext C). That notice, which is in writing (in the form of site
instruction W 187485) reads (in part):
"You are instructed to STOP all work on the main tower until further advised. Please proceed with work on the podium and the fire stairs."

Mr	Reddicliffe, affidavit	sworn

the 29

managing	director March	1993	says

of	Isicob,	in his that		the	plaintiff

"suspended all work at the site ..." Pioneer has not filed any affidavit material. It is not possible to  decide whether the whole, or only a part, of the work Isicob had contracted to perform has been suspended. Nevertheless, it is apparent that at least part of the work had been suspended, and that notice in writing  of such suspension was given to Isicob. The notice does not specify a particular time frame other than "until further advised." I

consider that the notice given complied with clause 9.1 of the "Special Conditions. " As to whether there was a delay to the works of Isicob caused by reasons beyond Isicob's control within the meaning of clause 55 subpara 11 and clause 56 subpara 3, I note that Pioneer has not pleaded in the action that the delay was due to reasons within the control of Isicob or that the suspension was in a any way directly due to any act default or omission of  Isicob within the meaning of clause 9.3. Mr Nosworthy did however foreshadow that an argument would be put in the action (presumably involving an amendment to the pleadings) that Isicob was at fault for not noticing changes in the colour of the concrete which ought to have lead to an earlier discovery of the problem. I am unable to decide, on the limited material before me, whether this would give rise to a possible means of defeating, or at least, reducing any of Isicob's claims, if such an amendment were permitted to be made.

There is no evidence that the plaintiff directed Isicob to recommence the performance of the works pursuant to clause
of the "Special Conditions." There is no evidence that extra costs were incurred, and if so, what the nature of those costs were. Nor am I told whether or not  any variation to the works was given by the plaintiff (see clause 56), although it would be surprising if none were given, having regard to the probability that at least part of Isicob's work had to be done again.

I do not consider that there is any substance to the submission that a deal of some kind has been struck between the plaintiff and Isicob which should preclude the granting of any relief at all. Nevertheless I consider that I ought not frame any declaration beyond that which caution and prudence dictates given that the facts put before me  are not all as clear as the plaintiff and Isicob contend, and given the late notice of the proposed forms of alternative

declarations given to Mr Nosworthy whose client is a stranger to the contract. In the circumstances, I consider that a declaration similar to the form which Mr Nosworthy conceded would be "difficult to resist"  is appropriate. That declaration is limited to a pure question of construction of the terms.. of . the contract, and I am unable to see how the making of such a declaration would be prejudicial to Pioneer in any way.

As to the submission that I ought to also declare that "extra costs" within the meaning of clause 9.3 (as amended) encompasses "delay costs", or costs caused by restricted access to the site or by "disruption", I do not consider that it is appropriate that I should, in the absence of any detailed information from Isicob as to the nature of its claims, embark upon a consideration of the meaning of the words "extra costs." It may be that on an examination of Isicob's claims, no real difficulty arises in attributing the items claimed as "extra  costs  of completing  the  Works incurred by the Subcontractor by reason of  a direction given by C & C pursuant to clause 9.1 of the Special Conditions " So far as I am concerned, on the limited material before me, any interpretation called for potentially involves an infinite variety of  possible claims, which makes it difficult to frame any useful declaration. I do not consider that I should proceed in the circumstances where the claims are too abstractly stated  for me to know how best to frame appropriate relief.

Accordingly, I consider the appropriate orders to be as follows:
Declare	that	on	the	true	construction	of	the contract:
Except to the extent that any suspension of the works or a part of the works is due to an act, default or omission of Isicob, and insofar as the rights of the plaintiff and

Isicob	fall for
of	the

determination	under	clause Special	Conditions	of

Subcontract, Isicob is entitled to the extra costs, if any, of completing the Works incurred by Isicob by reason of  any direction given by the plaintiff to Isicob pursuant to clause 9.1 of the Special Conditions of Subcontract.

I will hear the parties further  on the question of costs.