Civil Engineering Reference
In-Depth Information
complete the works on time. In my view the submissions of [counsel for the defendant] for
the employer have proceeded on an overvalue of the significance of the words 'as liquidated
and ascertained damages' in clause 24.2.1. The damages payable in respect of late completion
of the works are one head of the general damages which may be recoverable by an employer
for the contractor's breach of a building contract. Their character is not in any way altered
according to whether the rate at which they are payable is agreed by the parties in advance, so
that they become liquidated, or determined by the court after breach, so that they remain
unliquidated until so determined.
Turning to the wording of clause 24, I observe, first, that it is headed 'Damages for non-
completion'. It does not refer to liquidated damages for non-completion. That may not be a
very large point. But then clause 24.1 provides for the architect to issue a certificate if the
contractor fails to complete the works by the completion date. That failure necessarily involves
a breach of contract giving rise to a claim for damages. If clause 24.1 stood alone, the damages
would be unliquidated. What clause 24.2.1 then does is to provide that the contractor shall,
as the employer may require, pay or allow to the employer the whole or part of 'a sum calcu-
lated at the rate stated in the Appendix', being a sum payable or allowable by way of damages
for the breach of contract. The agreement as to rate necessarily makes them liquidated, as is
recognised by the following words 'as liquidated and ascertained damages'. They nevertheless
remain damages for the breach established by the architect's certificate under clause 24.1.
Viewing the clause in this way. I find it impossible to attribute to parties who complete the
appendix in one way or the other an intention that the employer shall have the option of
claiming damages of precisely the same character but in an unliquidated amount.
J-Corp Pty Ltd v. Mladenis and another
SUPREME COURT OF WESTERN AUSTRALIA COURT OF APPEAL
(2008) 131 Con LR 188, [2009] WASCA 157
The appellant entered into a contract with the respondent to build a house on the
respondent's land for $311,484.12. The contract was on a standard form used by the
appellant. Clause 1'7 of the contract dealt with commencement, completion and delays.
Clause LL.9 provided:
If the Builder breaches sub-clause 11.1, it shall be liable to pay the Proprietor liquidated
damages at the rate of NIL DOLLARS ($00.00) per day for each day beyond the due date for
practical completion until practical completion is deemed to have taken place.
A preliminary question of law was ordered:
Does clause 77.9 of the Contract on its proper construction have the effect of excluding the
[respondents'] right to claim damages at common law for losses suffered by the [respondents]
by reason of the [appellant's] breach of the Contract (assumed for the purpose of this ques-
tion), namely the failure to reach practical completion of the Works by the Due Date for
Practical Completion?
The primary judge answered the question in the negative and held that cl 71.9 only
excluded a claim to liquidated damages. The appellant appealed.
