A-Civil Aust Pty Ltd v MESO Solutions Pty Ltd [2026] NSWSC 784

Catchwords: BUILDING AND CONSTRUCTION — excavation contractor engaged to undertake shoring, excavation and foundation piles for underground carpark —subcontract with piling subcontractor — subcontract not signed until works largely complete — head contract never finalised — inconsistencies in scope of works in subcontract and head contract — messy contractual regime – principles as to if and when a contract is formed at [ 7 ]-[ 9 ] — subcontractor arranges for contractor and head contractor to supply materials for its works — subcontractor fails to complete works — head contractor takes work out of subcontractor’s hands — subcontractor’s final payment claim provokes back - charges by head contractor for materials and cost of attending to subcontractor’s scope of works — contractor and head contractor agree informally to simply ‘walk away’ — subcontractor receives payment of final payment claim under Building and Construction Industry Security of Payment Act 1999 (NSW) — whether subcontractor has back-to-back liability with contractor for back-charges — whether contractor entitled to restitution. LIQUIDATED DAMAGES — liquidated damages clause provides $1,000 payable per day “until the Subcontractor achieves Substantial Completion of the Works … or the date that the Agreement is terminated” — subcontractor never achieves Substantial Completion — nor has subcontract been terminated — whether contractor entitled to liquidated damages where neither ‘end point’ in the clause has occurred — case law review at [ 271 ]-[ 276 ] — application of contra proferentem rule to liquidated damages clauses, principles at [ 278 ]-[ 280 ] — accrued right to liquidated damages not dissolved if neither ‘end point’ occurs — Triple Point Technology Inc v PTT Public Company Ltd [2021] UKSC 29 followed . INDEMNITY –head contractor has yet to enforce back charges – whether declaratory relief should be made that subcontractor obliged to indemnif y contractor if such a claim is made – nature of indemnity at [ 185 ] – proper construction of indemnities - necessary to establish that claim arises from subcontractor’s breach, negligence, act or omission — direct connection between breach and claim not required — “arising out of or in connection with” and “arising out of, whether directly, or indirectly, in connection with” discussed at [ 192 ] – some back charges within scope of indemnity but not others. PAYMENT SCHEDULE – assessment of contractor’s payment claim results in amount payable to head contractor – whether such payments are ‘on account’ – principles at [ 171 ]-[ 172 ]. MITIGATION — whether contractor failed to mitigate loss by not signing deed of release proposed by head contractor — principles at [ 158 ] — contractor could not give warranty required by deed — commercial assessment — insufficient evidence that decision was unreasonable or improvident. Supreme Court New South Wales Medium Neutral Citation: A-Civil Aust Pty Ltd v MESO Solutions Pty Ltd [2026] NSWSC 784 Hearing dates: 23, 24, 25, 27 February 2026, last submissions 17 June 2026. Date of orders: 8 July 2026 Decision date: 08 July 2026 Jurisdiction: Equity - Technology and Construction List Before: Rees J Decision: Declarations made; judgment against defendant with costs. Catchwords: BUILDING AND CONSTRUCTION — excavation contractor engaged to undertake shoring, excavation and foundation piles for underground carpark —subcontract with piling subcontractor — subcontract not signed until works largely complete — head contract never finalised — inconsistencies in scope of works in subcontract and head contract — messy contractual regime – principles as to if and when a contract is formed at [ 7 ]-[ 9 ] — subcontractor arranges for contractor and head contractor to supply materials for its works — subcontractor fails to complete works — head contractor takes work out of subcontractor’s hands — subcontractor’s final payment claim provokes back - charges by head contractor for materials and cost of attending to subcontractor’s scope of works — contractor and head contractor agree informally to simply ‘walk away’ — subcontractor receives payment of final payment claim under Building and Construction Industry Security of Payment Act 1999 (NSW) — whether subcontractor has back-to-back liability with contractor for back-charges — whether contractor entitled to restitution. LIQUIDATED DAMAGES — liquidated damages clause provides $1,000 payable per day “until the Subcontractor achieves Substantial Completion of the Works … or the date that the Agreement is terminated” — subcontractor never achieves Substantial Completion — nor has subcontract been terminated — whether contractor entitled to liquidated damages where neither ‘end point’ in the clause has occurred — case law review at [ 271 ]-[ 276 ] — application of contra proferentem rule to liquidated damages clauses, principles at [ 278 ]-[ 280 ] — accrued right to liquidated damages not dissolved if neither ‘end point’ occurs — Triple Point Technology Inc v PTT Public Company Ltd [2021] UKSC 29 followed . INDEMNITY –head contractor has yet to enforce back charges – whether declaratory relief should be made that subcontractor obliged to indemnif y contractor if such a claim is made – nature of indemnity at [ 185 ] – proper construction of indemnities - necessary to establish that claim arises from subcontractor’s breach, negligence, act or omission — direct connection between breach and claim not required — “arising out of or in connection with” and “arising out of, whether directly, or indirectly, in connection with” discussed at [ 192 ] – some back charges within scope of indemnity but not others. PAYMENT SCHEDULE – assessment of contractor’s payment claim results in amount payable to head contractor – whether such payments are ‘on account’ – principles at [ 171 ]-[ 172 ]. MITIGATION — whether contractor failed to mitigate loss by not signing deed of release proposed by head contractor — principles at [ 158 ] — contractor could not give warranty required by deed — commercial assessment — insufficient evidence that decision was unreasonable or improvident. Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) Cases Cited: A-Civil Aust Pty Ltd v MESO Solutions Pty Ltd [2023] NSWSC 372 AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985 Alghussein Establishment v Eton College [1988] 1 WLR 587 AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170; [1986] HCA 63 Bailey v Redebi Pty Ltd [1999] NSWSC 918 Booth v Bosworth (2001) 114 FCR 39; [2001] FCA 1453 Bragg v Alam [1981] 1 NSWLR 668 Bragg v Alam (1982) NSW ConvR 55-082 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 Canty v Paperlinx Australia Pty Ltd [2014] NSWCA 309 Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17 Champion Homes Sales Pty Ltd v DCT Projects Pty Ltd [2015] NSWSC 616 Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Cook’s Construction Pty Ltd v Brown [2004] NSWCA 105 CSR Ltd v Adecco (Australia) Pty Ltd [2017] NSWCA 121 Felthouse v Brindley [1862] 142 ER 1037 Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9,251 GC NSW Pty Ltd v Galati [2020] NSWCA 326 GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2023) 280 CLR 442; [2023] HCA 32 Ho v Powell (2001) 51 NSWLR 572; [2001] NSWCA 168 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Mackay v Dick (1881) 6 App Cas 251 Novawest Contracting Pty Ltd v Altona Industrial Centre Pty Ltd [2011] VSCA 104 Onley v Catlin Syndicate Ltd [2018] FCAFC 119 Payzu Ltd v Saunders [1919] 2 KB 581 Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 Peter Turnbull & Co Pty Ltd v Mundus Trading Co (A/asia) Pty Ltd (1954) 90 CLR 235; [1954] HCA 25 Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770 Rava v Logan Wines Pty Ltd [2007] NSWCA 62 Re Concrete Constructions Group Pty Ltd [1997] 1 Qd R 6; [1997] QCA 086 Regional Development Australia Murraylands and Riverland Inc v Smith [2015] SASCFC 160 Roude v Helwani [2020] NSWCA 310 Ruthol Pty Ltd v Tricon (Aust) Pty Ltd [2005] NSWCA 443 R v Khazaal (2012) 246 CLR 601; [2012] HCA 26 Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) (2016) 95 NSWLR 157; [2016] NSWCA 379 State Government Insurance Commission v Stevens Brothers Pty Ltd (1984) 154 CLR 552; [1984] HCA 32 TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd (1963) 180 CLR 130; [1963] HCA 57 Triple Point Technology Inc v PTT Public Company Ltd [2021] UKSC 29 Uber Builders and Developers Pty Ltd v MIFA Pty Ltd [2020] VSC 596 Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603; [1998] HCA 38 Texts Cited: J Bailey, Construction Law , (Vol II, 2016, Informa Law) Category: Principal judgment Parties: A-Civil Aust Pty Ltd (Plaintiff) MESO Solutions Pty Ltd (Defendant) Representation: Counsel: F Hicks SC / S Hanscomb (Plaintiff) D Weinberger SC / A Jordan (Defendant) Solicitors: Shaba & Thomas Lawyers (Plaintiff) ATA Legal (Defendant) File Number(s): 2022/353243 JUDGMENT This is the ‘ wash up ’ of commercial dealings between an excavation contractor , A-Civil Aust Pty Ltd , and a piling sub contractor, MESO Solutions Pty Ltd. The y worked together on several projects . In particular , A-Civil was engaged by head contractor, Paynter Dixon Constructions Pty Ltd, to undertake shoring, excavation and foundation piles for an underground carpark for Parramatta RSL . A-Civil subcontracted some of these works to MESO . A-Civil now seeks $980,607.15 from MESO in respect of the Parramatta RSL project, while MESO seeks $187,836 said to be owing on all projects. The focus was on the Parramatta RSL project . Of interest, the sub contract w as not signed until the works were largely complete , while the head contract between A-Civil and Paynter Dixon was never finalised. This has made resolving the issue s in dispute a little messy. The Parramatta RSL project faced other challenges: wet weather ; COVID-19 lockdowns ; and problems re-starting work when the lockdowns were lifted. Some rectification work was also needed , when the footpath adjoining the ever-deepening hole began to subside and when a shoring wall ( Wall 5 ) needed repeated attention. In the end, MESO did not complete the works under the subcontract in respect of the Parramatta RSL project . Paynter Dixon took back th e work and arranged for it to be done by another contractor. But MESO then issued a final payment claim to A-Civil, who submitted it ‘ up the line ’ to Paynter Dixon. The head contractor was unimpressed, issuing ‘ back - charges ’ to A-Civil for the cost of attending to the work that it was said that MESO should have done, together with rectification costs. A-Civil was, by and large, in an invidious position between the head contractor and the subcontractor. So far as the evidence reveals, A-Civil and Paynter Dixon agreed informally to simply ‘ walk away ’ . As the proffered deed of release was never signed, this part of the case is messy too. But MESO was not part of this informal arrangement and pressed for payment . MESO obtained an adjudication determination in its favour under the Building and Construction Industry Security of Payment Act 1999 (NSW), which A-Civil failed to set aside : A-Civil Aust Pty Ltd v MESO Solutions Pty Ltd [2023] NSWSC 372 . MESO thereby received some $3 6 5,000. The issues which remain to be resolved are : Does MESO have ‘ back-to-back ’ liability to A-Civil for the ‘ back - charges ’ issued by Paynter Dixon? Is MESO liable to pay liquidated damages to A-Civil for failing to bring the Works to Substantial Completion by 1 September 2021 or at all? Is MESO obliged to pay A-Civil some $223,000 for the supply of steel and concrete for the works , and a further $10,000 to rectify defect s ? What amount s , if any, are payable having regard to any monies owed on other projects or monies already received by MESO following the adjudication determination? Given the messy nature of the contractual arrangements, in particular, the head contract between A-Civil and Paynter Dixon and the unsigned deed of release, it is convenient to note the principles when determining if, and when, a contract is formed. T he conventional approach is to analyse when an offer has been accepted, although this analysis does not work well in a range of circumstances: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 ; [2001] NSWCA 61 at [71] (Heydon JA, Mason P and Ipp AJA relevantly agreeing) . In that event, the better question may be what a reasonable person would have thought in all the circumstances as to whether there was a concluded bargain: Brambles at [81] . In Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110, McHugh JA (Hope and Mahoney JJA agreeing ) observed at 11,118: “Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties’ subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed.” Post-contractual conduct is admissible on the question of whether a contract was formed: Brambles at [25]-[26]. In particular, post-contractual conduct may shed light on the proper interpretation of earlier communications alleged to constitute a contract, for example, subsequent communications may show that, at the time of the allegedly contractual communications, there were other uncompleted negotiations between the parties such that the allegedly contractual dealings could not properly be interpreted as mutual assent to be bound: GC NSW Pty Ltd v Galati [2020] NSWCA 326 at [93] (Gleeson JA, White JA and Emmett AJA agree ing ), citing Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9 , 251 at 9 , 255. Further, subsequent communications may be used by a party as an admission by conduct of the existence or non-existence of a subsisting contract: GC NSW at [95], citing Film Bars . Witnesses and documents A-Civil relied on the evidence of project manager Chaudhury Mostafiz, site manager George Matta and chief executive officer (and George ’ s father) Nasser Matta. MESO relied on the evidence of director Timothy Orr. A-Civil sought Jones v Dunkel inferences in respect of MESO ’ s failure to call its operations manager Chris Deruiter, technical director Ed ward (Eddie) Bobek or the team leader for the “ walling team ” , Jerome Albert. All are employed by MESO and there is no evidence that they are unavailable. Where MESO contended that it was prevented from completing the Works by A-Civil, it was submitted that there was no evidence from these gentlemen to support that proposition . A further inference was sought in respect of Mr Orr ’ s failure to respond to two affidavits of Nasser Matta, the affidavits of Mr Mostafiz or the affidavit of George Matta: Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 419 (Handley JA, Kirby P agreeing) . MESO submitted that this was a “ red herring ” where t he onus of proof lay on A-Civil. It was said that A-Civil ’ s “ faint criticisms ” of MESO ’ s failure to call certain evidence did not fill gaps in A-Civil ’ s evidence. The fact that the onus of proof is on the plaintiff is not a complete answer. Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 was itself a case where an adverse inference was drawn against a party who did not bear the onus of proof: see Ho v Powell (2001) 51 NSWLR 572; [2001] NSWCA 168 at [16] (Hodgson JA , Beazley JA and Davies AJA agreeing); GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2023) 280 CLR 442; [2023] HCA 32 at [58] (Kiefel CJ, Gageler and Jagot JJ); Cook’s Construction Pty Ltd v Brown [2004] NSWCA 105 at [32] ( Young CJ in Eq , Hodgson and Santow JJA agreeing). W here the party that does not bear the onus of proof fails to call witnesses, the approach to the rule in Jones v Dunkel is as laid out by Branson J in Booth v Bosworth (2001) 114 FCR 39; [2001] FCA 1453 at [42]: “I conclude that the appropriate approach for me to adopt in this case having regard to the failure of the respondents to give evidence is as follows: (a) as the burden of proof with respect to each of the facts in issue between the parties lies on the applicant, the applicant must establish evidence of each of the facts in issue notwithstanding that some relevant and important evidence is peculiarly within the knowledge of the respondents; (b) the failure of the respondents to give evidence does not of itself amount to proof of any fact in issue; (c) however, provided that there is before the Court evidence tending to establish each of the facts in issue (albeit that it may be "meagre in the extreme" - see Jones v Dunkel per Kitto J at 305), in assessing the probability of the existence of a fact in issue (ie in weighing the evidence on that issue) use may be made of the failure of the respondents to give evidence apparently in their possession relevant to that fact in issue. That is, it is open to the Court to draw the inference that the evidence which the respondents could have given to the Court would not have been favourable to their case and thus more confidently to draw inferences available to be drawn from the evidence that is before the Court.” A-Civil has called evidence to establish the propositions for which it contends. MESO did not call witnesses who were centrally involved in the Parramatta RSL project and who might have been expected to give evidence about suggested ‘ stand down ’ orders and the like. Th ose witnesses are employed by MESO today. I infer that their evidence would not have assisted MESO . Where Mr Orr did not respond to various of A-Civil ’ s affidavits, I infer that he did not disagree with what the deponents there said. Some 7,000 pages of contemporaneous documents evidenced the parties ’ dealings in considerable detail. Parramatta RSL project Paynter Dixon constructed a new Parramatta RSL club . In March 2020, A-Civil was engaged to demolish the old RSL club, where a three-level underground carpark would be built. A-Civil was keen to undertake shoring, excavation and foundation piles for the new carpark. Nasser Matta approached MESO for a quote for the shoring works. Mr Orr prepared a series of quotes. On 6 May 2020 , Nasser Matta and Mr Orr met. According to Mr Orr, Mr Matta asked him to adjust the supply rates for the reinforcing (or reo ) , as A-Civil could procure the reinforcing at a lower rate than MESO charged. Mr Matta asked Mr Orr to charge $1,180 per tonne for reinforcement and $250 per m 3 for concrete , as t hese were the rates that Mr Matta said that he could supply at. Mr Orr said he was concerned at the time , as he had heard that steel and concrete was “ on the way up ” . Mr Matta denied this and said that he did not know what rates steel and concrete suppliers would charge, particularly given that the price for construction materials was increasing and unpredictable due to the C OVID -19 pandemic. The contemporaneous documents support Mr Orr ’ s version of this conversation, and I accept that th is is what the parties initially discussed : see [ 77 ] , [ 85 ] . Paynter Dixon engaged structural engineer , Meinhardt (NSW) Pty Ltd , to design the permanent walls for the underground car park . On 7 May 2020, Mr Orr met with Meinhardt and provided MESO ’ s drawings of the shoring and reinforced concrete (or RC ) wall design that it recommended. MESO used engineers, MetAus Pty Ltd , to assist with its design . MetAus and MESO are related companies. Q uestions and answers passed between the parties in respect of Meinhardt and MESO ’ s designs. Relevantly, on 15 May 2020, Paynter Dixon ’ s geotechnical engineers, JC Geotechnics Pty Ltd , queried “ how do you ensure the toe stability where excavation is below the toe level of the sheet pile wall (i . e. in sections of Wall 5 … )? ” MetAus replied that toes would be restrained by a toe anchor which h e ld the bottom of the sheet in lieu of the toe. ( This item was “ closed ” on 28 May 2020 and thus, presumably, MetAus ’ reply was considered satisfactory. ) JC Geotechnics further noted, “ the sheet piling for Wall 5 stops above Basement 2 which appears to stop in rock that is less than high strength ” . MetAus replied , “ We have said that the sheet piles will reach the medium to high strength rock and will be restrained by a to e anchor which holds the bottom of the sheet in lieu of the to e . We will confirm actual length of the sheets by the drilling at intervals to confirm and map the top of the competent rock ” . JC Geotechnics further queried : “The sheet pile may also reach refusal to further penetration on hard layers (such as iron indurated bands) within the soil profile, resulting in an unsupported vertical cut in the soil below the toe. How do you propose to support the soils and shale of less than medium strength below the toe of the sheet?” This item remained open. On 2 September 2020, Paynter Dixon issued a tender package of drawings. This included Meinhardt ’ s design. A-Civil ’ s demolition works at the project reached practical completion in October or November 2020. On 7 October 2020, Mr Orr provided Mr Matta with a revised quotation having “ cut things to the bone ” . On 19 November 2020, Paynter Dixon advised Nasser Matta that A-Civil was the success ful tenderer for the shoring, excavation and foundation piles . Mr Matta was asked to initial and return the agreed s cope of w orks , following which Paynter Dixon would “ get your contract out to you ASAP ” . The proposed start date on site was 23 November 2020. Although a signed agreed scope of works is not in evidence, it appears that Mr Matta did sign and return the scope of works , as it is referred to in later Paynter Dixon emails: see [ 90 ]. It is relevant to one of the back - charges to note that the Scope of Works included: “ 7) Sheet piles, anchor and RC wall in-lieu of designed shoring system and capping beam. … w) FRP new perimeter wall details as per Meinhardt designed shoring wall structure. i) Allow for L shape cast in starter bars at each level as detailed. ii) Allow for starter bars from top of shoring wall to tie into B1 & Ground slabs. …” On 23 November 2020, MESO ’ s technical director, Eddie Bobek, emailed two progress claims and tax invoices, “ for the procurement of sheet piles for the Parramatta RSL job. ” Mr Bobek noted that Mr Matta was “ familiar with our model and payment structure. ” The EFT receipt was sought as soon as possible “ to have the sheets released by the supplier to meet the timetable we are working to ” . Mr Matta replied, “ This has not been accepted and no works to start as we haven ’ t [received] the contract yet ” . On 24 November 2020, Mr Orr provided a revised quotation. Mr Bobek provided amended progress claims to reflect the change in contract sum. Nasser Matta replied that evening, advising that he had spoken to Mr Orr, “ we have been given the go ahead on this job, we haven ’ t received a contract from the client as of yet and the payments terms haven ’ t been agreed to yet. Can you please withdraw these claims and invoices until further c larifica [ tions ] on what terms we will have in the contract ” . Mr Orr replied that they needed to resolve this urgently , “ as I have to buy the materials basically now. … These have been stated at the outset and are the same approaches as every other project we have done ” . On 25 November 2020, Paynter Dixon provided a contract to A-Civil . Relevantly, Schedule 8 was the Scope of Works, which had been earlier provided to A-Civil on 19 November 2020. Schedule 9 listed drawings included in the shoring and excavation works , including two Meinhardt drawings as follows : “S0625 BASEMENT 3 PERIMETER WALL DETAILS SHEET 1 S0626 BASEMENT 3 PERIMETER WALL DETAILS SHEET 2” Nasser Matta asked Mr Mostafiz to look at the contract and identify any changes for Mr Matta to look at. On 26 November 2020, Mr Mostafiz emailed Paynter Dixon , attaching a list of drawings listed in Schedule 9 that A-Civil had not receive d during the tender process. Paynter Dixon was asked to provide “ all documents you mentioned in the contract so that we can check if there is any changes. ” The drawings requested included the Meinhardt drawings. So far as the evidence reveals, Paynter Dixon did not accede to this request. On 27 November 2020, Mr Mostafiz provided Mr Orr with the S cope of W orks for comment. On 28 November 2020, Mr Orr not ed that there were various problems with the Meinhardt drawings. In respect of the S cope of W orks extracted above, Mr Orr responded: “a. Allow for L shape cast in starter bars at each level as detailed. See the extract of my email below of 9/6/20. You can’t have L-Bars as they have drawn through the shutter system. It was discussed that they were going to chemset bars into the walls. I suggest that we bring the walls to the underside of the slab which is the normal practice. We also excluded the reinforcing connecting the walls to the slabs but this is stating that we are to include the L-bars. A more normal detail would not require L-bars as intermediate slabs. PLEASE PROVIDE ME WITH THE CURRENT STRUCTURAL DRAWINGS AS WE ONLY HAVE EARLY DRAWINGS AND THE MEINHARDT MARKUP WHICH PRE-DATED OUR COMMENTS ON IT . b. Allow for starter bars from top of shoring wall to tie into B1 & Ground slabs. What are these? We didn’t allow for these .” (Response italicised.) On 1 December 2020, Mr Orr provided Mr Mostafiz with further comments on “ [ s ] ome more surprises ” in Meinhardt ’ s drawings, of which Mr Orr had some criticisms and which he considered would likely increase costs . On 15 December 2020, A-Civil paid $70,000 to MESO on account for the Parramatta RSL project . Having now reviewed the ‘ accounts ’ between the parties, it appears that A-Civil made payments to MESO from time to time ‘ on account ’ for the Parramatta RSL job, which MESO applied to the balance of its progress claims. MESO starts work On 16 December 2020, MESO unloaded its gear on site. Although the design of the permanent walls was still to be finalised , this did not prevent the shoring works from commencing. From 17 to 21 December 2020, MESO drill ed test holes for the sheet piles . On 24 December 2020, A-Civil paid MESO $70,000 on account of the Parramatta excavation. On 2 January 2021, Mr Orr circulated the latest shoring shop drawings , with rock levels from the test drilling. On 4 January 2021, MESO beg a n installing sheet piles . On 8 January 2021, A-Civil paid MESO $50,000 on account of the Parramatta RSL project . Mr Orr re-submitted MESO ’ s earlier progress claims for materials , “ I know that you didn ’ t have a contract wit h Paynter Dixon at the time so didn ’ t want to enter these into your system. I assume that you do now ” . On 14 January 2021, Mr Orr emailed Nasser Matta again, complaining that MESO had not been paid the initial amounts for materials and manufacturing. Nor did MESO have a formal contract. Further, the current situation had “ become untenable for me and I have no clear and assured understanding for payments of the outstanding claims and so I will need to redeploy our men and resources to other projects where they are sorely needed in any case ” . Mr Orr advised that MESO would continue with the works until the afternoon of the following day. At the end of that day, Mr Orr emailed Nasser Matta again, expressing disappointment that he had had no response to his email or calls. Mr Orr issued a notice to suspend works. Mr Matta replied that evening , “ you are not to continue any more work tomorrow, A-Civil has paid you on account for the commitment we have made and not on the invoice that has been rejected twice … Work will proceed once you have signed your contract and terms have been agreed ” . Mr Orr confirmed that no MESO staff would attend site the next day nor until the matter was settled. Paynter Dixon ’ s site diary for 15 January 2021 noted that here was a disagreement between MESO and A-Civil , and MESO was not on site. On 18 January 2021, Nasser Matta emailed Mr Orr , asking when he could remove MESO ’ s machines from the site “ as they are getting in the way ” . Mr Orr advised that he would make arrangements to remove the equipment. On 20 January 2021, MESO returned to site and continued predrilling and sheet piling. O n 2 2 January 2021, A-Civil paid MESO $50,000 on account. On 25 January 2021, Paynter Dixon provided comments on A-Civil ’ s recent p rogress c laim, advising that the full signed contract had not been received, “ We will not be releasing any further payments until the full unamended contract is returned with every page initialled. ” Nasser Matta pressed to meet as soon as possible to finalise the contract , noting that he had just received the drawings f or c onstruction and had been pushing to finalise outstanding terms since before Christmas. Paynter Dixon replied, “ The documents in the contract are as per issued at tender stage, therefore construction information/drawings will have no impact on the contract. ” But a meeting was offered . On 2 7 January 2021, Paynter Dixon pressed A-Civil to address all queries from geotechnical engineer JC Geotechnics. This included the earlier comment about Wall 5, which remained open: see [ 19 ]. Met A us responded , “ Sheet piles are driven to reach medium to high strength rock. ” The item was closed. The head contract On 1 February 2021, Mr Mostafiz asked Paynter Dixon for a meeting with Nasser Matta to finalise some aspects of the contract. Paynter Dixon replied that it was not prepared to pay A-Civil ’ s recent p rogress c laim until “ the signed contract (unamended) ” was provided and was unsure why a meeting was necessary “ as I will not be accepting an amended contract ” . Paynter Dixon noted that the S cope of W orks had already been reviewed and agreed; the document register was the documents issued at tender and therefore formed part of the contract . Mr M ostafiz provided the contract later that day, signed by A-Civil. But t he signed contract included a number of handwritten and initialled amendments and deletions by A-Civil. Some of these changes appear substantive. Schedule 8 to the contract , “ Scope of W orks ” , continued to require starter bars, as described at the outset (but now re-numbered as Item 6(w)): see [ 23 ]. But A-Civil proposed to delete the two Meinhardt drawings referred to in Schedule 9 , to be replaced with the following MESO drawings : “» Drawing 20 – 025 – FC – RevF – 20201202 Concrete wall mark up. » Drawing 20 – 025 – FC – RevG – 20201204 – sheet pile design.” On 2 February 2021, Paynter Dixon replied to the “ multiple amendments ” , agreeing to some changes but not others. Where the contract had been issued prior to work commencing more than three months earlier, the head contractor was not prepared to release any further payments until an unamended contract was issued excluding the items which were not agreed. In respect of the alterations to Schedule 9, Paynter Dixon did not agree, commenting: “These two drawings formed part of the tender package that was issue[d] at tender stage, plus these works form part of the Sch. 8 SOW, therefore included. Plus this contract was issued prior to works commencing, if not agreed this should have been discussed prior to commencing the works. Refer to the email issued to Mostafiz on the 30/11/20 stating these documents to form part of the contract. There has been no correspondence on this item since the 30/11/20.” On 3 February 2021, Mr Mostafiz rejoined . In respect of the proposed change of drawings in Schedule 9, Mr Mostafiz responded that the sheet pile and contract wall price was based on A-Civil ’ s supplied design, so the two drawings in Schedule 9 “ can ’ t be part of our contract ” . A-Civil ’ s design for the sheet pile and RC wall should be part of the contract. He noted that Paynter Dixon had agreed to the other requested changes on contracts for other jobs. There was no response. S o far as the evidence reveals, negotiations between the parties as to the terms of the head contract did not progress any further . From time to time, Mr Mostafiz followed up Paynter Dixon for a signed contract , but there is no evidence that one was provided: see [ 66 ], [ 124 ] , [ 129 ] . On the pleadings, A-Civil contends – and MESO admits – that A-Civil and Paynter Dixon entered into a contract on or about 20 November 2020. In their closing submissions, the parties accepted that the contract was not entered into on that date. T he parties relied on different versions of the contract as embodying the final terms of the agreement . A-Civil relied on a copy of the contract initialled by A-Civil but not yet signed by Paynter Dixon. This was the contract emailed to Paynter Dixon on 1 February 2021, which included some proposed amendments to the contract , not all of which were accepted . MESO relied on a copy of the contract produced on subpoena by Paynter Dixon. Most, but not all, pages of the contract are initialled by both parties. Other pages are initialled by A-Civil but not by Paynter Dixon. The contract has a number of ‘ post-it ’ notes and handwritten comments which, when compared with the emails from 1 to 3 February 2021, record Paynter Dixon ’ s views on the amendments sought by A-Civil. That is, the document produced on subpoena was not a final and concluded contract executed by both parties but a ‘ work in progress ’ . By my count, there were eight points of difference between the parties that were never resolved. MESO submitted that, by commencing the Works, A-Civil accepted the terms of the unamended contract by conduct. The contract was said to be varied on 2 February 2021 when Paynter Dixon agreed to several amendments proposed by A-Civil. I do not accept this submission. When A-Civil began work, it had a proposed contract from Paynter Dixon . A-Civil had requested some of the drawings and plans referred to in the contract , which it apparently did not have. A-Civil was in the process of reviewing the proposed contract. By starting work without having signed a finalised contract, A-Civil was certainly taking the risk that the contract may never be finalised and it may not be paid for the work it was then doing . But I do not think a reasonable person would have thought in all the circumstances that A-Civil accepted the proposed contract in its entirety at that time : Brambles at [81] . Nor do I accept A-Civil ’ s submission that Mr Mostafiz ’ s pronouncement on 24 June 2021 (see [ 124 ]) had the effect that the contract sent to Paynter Dixon on 1 February 2021 became the final contractual document , notwithstanding Paynter Dixon ’ s non-acceptance of some of the amendments there proposed. Paynter Dixon had made plain that it did not accept some of the se amendments ; its subsequent silence in the face of Mr Mostafiz ’ s email o f 24 June 2021 was not accept ance : Felthouse v Brindley [1862] 142 ER 1037 . Nor is it necessary to fix with precision the date on which any contract between A-Civil and Paynter Dixon was formed . T he parties agreed – at least for the purpose of these proceedings – that there was a binding contract between Paynter Dixon and A-Civil which contained the clauses relevant to the ir dispute. T he unresolved amendments largely concern ed other provisions of the contract , with one exception. A-Civil ’ s proposed amendment to Schedule 9 – swapping Meinhardt ’ s drawings to MESO ’ s drawings – is relevant to some of the back -c harges. On the contract produced by Paynter Dixon on subpoena, a handwritten note records, “ Drawing 50625 & 50626 to remain as a contract document, this document was issued in the tender package issued on the 2/9/20. ” The two drawings added by A-Civil were crossed out, with a note “ These Doc ’ s Did n ot Form part of the tender D ocument issued on 2/9/20. ” Wall 5 Mr Orr said that sheet piles along Wall 5 were installed by MESO before A-Civil excavated the area. George Matta explained that the sequence of work was that MESO would install sheet piles . MetAus would then issue an excavation certificate to permit A-Civil to excavate down to a certain level. A-Civil would excavate down to that level, which was usually 1.5 m for each drop. After that, MESO installed anchors. O n 3 February 2021, geotechnical engineers JC Geotechnics did a site visit. T ension cracking and slumping was observed b ehind the sheet pile wall. A series of recommendations w as made. Paynter Dixon provided JC Geotechnics ’ comments to A-Civil on 4 February 2021 , for response and action. Later on 5 February 2021, Nasser Matta replied to Paynter Dixon, responding to the geotechnical engineer ’ s concerns with the assistance of Mr Orr . A-Civil also paid $100,000 to MESO on account. On 8 February 2021, Paynter Dixon asked A-Civil to provide calculations to address JC Geotechnics ’ concerns. MESO issued A s- B uilt drawings for the temporary shoring plan. JC Geotechnics inspected the rockface again, including Wall 5, and issued a report. Mr Mostafiz provided the report to Mr Orr for comment. According to the report , t he sheet piles for Wall 5 had been installed and excavation was at Reduced Levels of RL 7.658 m for Wall 5. The shale bedrock below the toe of the sheet piles along Wall 5 was unsupported near the vertical cut face. Water was ponding at the base of the excavation in numerous locations. Two rows of anchors had been installed. The shale was observed to be highly fractured, distinctly weathered and of low strength. JC Geotechnics recommended that the low strength shale be removed before excavation continued. Several issue s needed to be addressed before excavating further , “ The contractor should provide a rectification methodology for review by the project structural and geotechnical engineer. ” Clarification was also sought in respect of the variation in the installation depths of some of the anchors, together with an assessment on the potential impact to nearby structures, infrastructure and buried services, “ The reason for this is to provide [Paynter Dixon] with some confidence that the sheet pile system and excavation will have no adverse impact on the surrounding structures. ” Vibration monitors were also recommended, where vibration induced during the installation process carried the potential risk of damage to nearby services and infrastructure. On 10 February 2021, MESO provided comments on the geotechnical engineer ’ s inspection report. On 11 February 2021, Paynter Dixon provided Meinhardt and JC Geotechnics with the calculations for the RC wall , provided by A-Civil , for review and comment. But MESO was becoming concerned at the involvement of JC Geotechnics , who was said to be “ holding up production ” at the expense of MESO and A-Civil. MESO asked A-Civil if Paynter Dixon wanted the sheets underpinned and, if so, to provide the design. At the same time, Meinhardt queried the information provided by A-Civil, which was “ pretty much the same type of information we have already received ” . Information was sought on lateral loading values used in their analysis to provide the results for their wall design. Mr Orr contacted another geotechnical engineer, Stephen Kim of EI Australia , to inspect the site and be in a position to provide his expert view at a meeting with Paynter Dixon “ and to remove JC Geotechnics from the equation ” . On 15 February 2021, Meinhardt provided Paynter Dixon with their calculations, advising , “ A s a consequence to changed wall heights, the re inforcement for [ W all ] 5 i s to be reviewed ” . Paynter Dixon asked A-Civil to confirm with their engineer what loads the original design had used for i nput information for the wall design. Mr Mostafiz asked Mr Orr to cross-check with the engineer. Mr Orr asked MetAus , who advised that the surcharge loads were similar to what they had adopted in their design. On 18 February 2021, Paynter Dixon emailed Nass er Matta, attaching photographs of cracks appearing in the pavement on site, “ Please ensure this is monitored and testing is as per [ MESO ] notes (daily) ” . Mr Mostafiz forwarded the photographs to Mr Orr, requesting that he organise his geotechnical engineer to review the site condition and provide a reason for such a crack. Mr Orr replied that, if the sheets were moving, then cracking may be seen close to the back of the sheets rather than 2.5 m to 3 m away. On 19 February 2021, MESO attended the site and inspected the cracking on the pavement adjacent to the project site . According to Paynter Dixon ’ s site diary, MESO “ verbally told me nothing to worry about just fracturing locally on top layer ” . The vibration monitoring was not being done correctly and would be raised with A-Civil. Mr Orr made arrangements for EI Australia to attend the site. A-Civil paid MESO $50,000 on account. On 22 February 2021, Mr Bobek reported to A-Civil on his site inspection, noting that the sheet piles and anchors showed no signs of deflection. The cracks in the asphalt seemed to have been caused by the d e -tensioning of soils when concrete garden beds in the area were removed, as well as the digging of the trench to place the sheet piles. On 23 February 2021, EI Australia ’ s principal engineering geologist attended the site with Mr Orr and provided recommendations to George Matta on the excavation works. George Matta forwarded the recommendations to Paynter Dixon. On 26 February 2021, MESO was back on site, applying grout to a corner where defects had been nominated by the geotechnical engineer. EI Australia undertook a further inspection of the rockface. Mr Orr also sought the advice of Graeme Deaker of Vandermeer , as Nasser Matta had asked for an opinion on MESO ’ s wall specifications. Mr Orr complained that Meinhardt ’ s specifications “ are much more conservative than ours and would add $30-$40k to the costs of the walls which we are not happy with ” . The additional cost was said to be driven by their specifications, including “ that our walls extend above each slab and somehow we are to provide cogged bars through our shutters somehow. ” EI Australia inspected the rockface again on 1 March 2021 , approving excavation to the next 1.5 m interval. Further advice to plug gap s beneath the sheet pile , where residual clays had fallen through due to recent rainfall , would be given by email. Paynter Dixon asked A-Civil for the report from EI Australia, to close out the comments raised by JC Geotechnics and responded to by MESO . Mr Mostafiz also sent Mr Orr a further design clarification from Paynter Dixon. Mr Orr replied , “ I am really over this. I cannot accommodate the L -bar connecting the slabs to the walls. … Markham stated to me that they strongly prefer our approach. All it does is make i[t] much harder to place the walls. ” On 8 March 2021, Paynter Dixon asked A-Civil when MESO would be back on site for sheet piling. On 11 March 2021, MESO returned to site but to pick up redundant gear. Mr Mostafiz asked MESO to forward comments on JC Geotechnics ’ report “ on how you did the rectification ” and rock anchor installation records. Mr Bobek replied : “As instructed by Nasser and agreed by Tim. A-Civil and [MESO] ha ve been stood down until Paynter Dixon have paid each of our companies all outstanding monies. … ” Nasser Matta emailed Mr Bobek, “ My C lient is not your concern so retract your comments and never send comments like that to my Staff ” . Mr Bobek retract ed his email. Mr Orr said that he and Mr Matta had agreed to stand down their workers in order to force Paynter Dixon to pay. Nasser Matta said he did not instruct MESO to stand down. It does appear that, from time to time, Mr Orr sought Mr Matta ’ s cooperation in order to extract payment from Paynter Dixon. But Mr Matta ’ s emphatic , contemporaneous email supports his version of events and I accept Mr Matta ’ s evidence on this matter. A ccording to Paynter Dixon ’ s site diary, MESO returned to site and resumed work o n 16 March 2021 . Wet weather continued to prove challenging. On 23 March 2021, Paynter Dixon asked A-Civil to arrange for MESO ’ s engineers to certify that there had been no adverse defects or issues affecting the shoring wall system , given the inclement weather; all the material had been washed out and the back of the sheet pile was hollow in one area. On 24 March 2021, Mr Mostafiz followed up Mr Orr , seeking comments in respect of JC Geotechnics report. MESO provided a report from MetAus that evening, which referred to steel plates being welded in areas where the sheet piles did not extend to medium strength shale. Mr Mostafiz understood from George Matta that MESO carried out this work. On 30 March 2021, A-Civil provided MESO with a sub contract. Although the first draft was not in evidence, email references suggest that it followed the form of the subcontract as executed. Annexure M contain ed a scope of works and contract documents. Item 23 was the same as Schedule 8 to the head contract : “ 23. FRP new perimeter wall details as per Meinhardt designed shoring wall structure. (a) Allow for L shape cast in starter bars at each level as detailed. (b) Allow for starter bars from top of shoring wall to tie into B1 & Ground slabs. …” Mr Orr replied that he would review and revert. On 8 April 2021, A-Civil provided MESO with RC wall design issued by Meinhardt ‘ F or C onstruction ’ , which included the installation of cog bars and L-bars (also known as ‘ starter bars ’ or ‘ dowels ’ ). Mr Mostafiz understood that these drawings were listed at Annexure M to the subcontract. Mr Orr said the f or c onstruction plans allowed placement of cog bars while forming the concrete walls , which differed from the scope of works attached to the proposed subcontract then in circulation. As the first draft of the subcontract is not in evidence, I cannot say. On 14 April 2021, A-Civil followed up Paynter Dixon for a signed copy of the head contract. On 20 April 2021, Mr Mostafiz advised Mr Orr that Wall 5 had moved by 25 mm, creating large cracks on the footpath. Photographs were supplied . Mr Orr was asked to take all necessary steps to avoid any further damage and to consider this as an urgent matter. Mr Mostafiz added “ the bottom sheet on [ W ] all 5 wasn ’ t installed as there was a hole at the back of the sheet. Could you please send someone to fix this ” . Mr Bobek attended site. Mr Orr advised that they could not see any evidence of movement but they were looking to remedy the sheet at W all 5 , “ The actual issue was that [it] encountered an obstruction when it was driven that led [ it ] to deviate s omewhat ” . On 23 April 2021, M etAus provided a letter in respect of the reported ground movements , concluding that the temporary shoring walls were performing as per design requirements and had not moved excessively or beyond modelling and design outputs . Mr Mostafiz also followed up MESO for its comments on the ‘ For Construction ’ drawings. Mr Orr replied that the issue was that “ we can ’ t place the cog bar through our shutters ” . On 30 April 2021, Mr Mostafiz asked EI Australia to organise a rockface visit on 4 May 2021, including for Wall 5. On 4 May 2021, EI Australia reported that two potential locations were observed in Wall 5 where stabilisation measures using rock bolts may be required, subject to a further inspection following the final detail excavation along the wall. On 6 May 2021, Mr Mostafiz ask ed Mr Orr t o order all of the steel except the cog bars , as A-Civil had informed Paynter Dixon that it could not proceed with the cog as per Paynter Dixon ’ s design and was waiting on a response. Mr Mostafiz also asked MESO to provide the specifications for its formwork system and method of installation, with a drawing showing the support details. On 7 May 2021, MESO provided specifications of its formwork system and method of installation. MESO also issued A s- B uilt drawings for sheet piles and anchors and installation records . Mr Mostafiz said that, from his review of the sheet pile design and the sheet pile As-Built shop drawing, he noticed that the As-Built sheet piles for Wall 5 did not match the design, specifically, in relation to sheet piles 84 to 104. This was the first time that he became aware that the sheet piles were not installed in accordance with the design. On 10 May 2021, Mr Mostafiz advised MESO that he had forwarded the details of its formwork system and method of installation to Paynter Dixon for their comment , “ however I believe [Paynter Dixon] are more asking for the specification of your aluminium shutter and the fixation method. Also regarding the cog they proposed a methodology as attached ” . MESO ’ s comments were sought . On 11 May 2021, Mr Mostafiz emailed EI Australia ’ s report on Wall 5 to Mr Orr. EI Australia recommended shotcrete and mesh be applied to low strength shale bedrock exposed over the excavation face. Mr Orr was asked to check with his engineer and advise how he would fix this. O n 12 May 2021, Mr Mostafiz advised Mr Bobek that A-Civil had had a meeting with Paynter Dixon , “ and confirmed we are not doing the cog bar, [Paynter Dixon] will drill on our wall later on. ” Mr Mostafiz explained that he was referring to the cog bar used in the ground slab; this would be supplied by the company who did that slab. Mr Orr said that, based on these emails, MESO began placing the concrete walls on the project without L-bars and without placing cog bars. Between 12 and 21 May 2021, Mr Mostafiz exchanged emails with EI Australia and Mr Bobek regarding Wall 5 and rectification works that needed to be carried out. On 12 May 2021, Mr Mostafiz spoke to Mr Bobek, who said that it would take four to five weeks to install the reinforced concrete wall at Wall 5. Mr Mostafiz asked Mr Bobek to check with EI Australia or MESO ’ s engineer whether this would have any impact on the wall ’ s stability for this period or whether grout could be injected to avoid using shotcrete. On 20 May 2021, MESO provid ed A-Civil with extensive comments on the proposed subcontract 42 EI Australia also provided further recommendations to A-Civil in respect of Wall 5, following a further inspection : “… - Although not ideal, given that the sheet piles above are engaged in place with three rows of anchors, it will be very unlikely for any major instability to occur. Some minor slumpling [sic] of the clay may occur into the excavation following wet weather. - In this case, we consider that it may be possible to continue the excavation unsupported, given that the permanent basement wall with adequate drainage behind (with well draining backfill material) be installed within a short period as per our previous correspondence. - Should any long-term delays occur, reinforced shotcrete with drainage may be required. - We recommend that the excavation continue, with daily inspections by the builder to check for any signs of instability. Geotechnical inspections should also continue with every 1.5m depth intervals, to check for any other signs of potential unstable blocks that may require measures such as shotcrete or spot bolts in the future. ” On 21 May 2021, Paynter Dixon asked EI Australia to confirm the structural adequacy of the rockface, where concrete would not be poured for some eight weeks, “ Furthermore has the inspection been made on the footpath above re movement. ” On 24 May 2021, EI Australia replied that they had not been made aware of any movement in the footpath, but if that was the case then various sheet piles (some of which were under Wall 5) should be underpinned with concrete columns. If that was done, then E I Australia was “ fairly confident about structural adequacy of this section of the face for a period of 8 weeks or beyond ” . On 24 May 2021, A-Civil provided its response to MESO ’ s comments on the subcontract , also noting that a number of items had been addressed, “ including the update of cogging bars through the formwork which has been resolved ” . Relevantly : “ Item 23 Tim and Nasser have spoken and my understanding is they have agreed on item such as cogs bars into the slabs was not part of our scope. I believe this has been changed Also during the tendering process Tim and Nasser agreed on rates for the concrete($250/m3 which included crush test) and steel reinforcement($1180/ton). Lump Sum Contract ” (A-Civil’s response in italics .) As I understand A-Civil ’ s comments, the requirement to install cog bars into the slabs had changed, as had the agreement that con crete and reinforcement would be calculated at fixed rates. That this was a “ L ump Sum Contract ” suggested that, whatever the materials cost, it was to be allowed for by MESO in its lump sum price. On 25 May 2021, Mr Mostafiz advised Mr Bobek that he believed they needed to find some temporary protection to avoid W all 5 collapsing. Mr Mostafiz asked Mr Bobek to come up with a solution to stabilise the wall. For his part, Mr Orr advised that they needed to finalise the sub contract and payment so that they could proceed. On 26 May 2021, Mr Mostafiz replied that there was nothing pending on A-Civil ’ s side regarding the contract, “ The major item for the RC wall was the cog bar, and this was resolved as we are not doing the cog. As such there is nothing pending on our side regarding the contract ” . Further, t he schedule for the RC wall was communicated with MESO several time [ s ] , “ as such any delay will be forwarded to MESO ” . Mr Orr disagreed , noting that he had told A-Civil “ that we could not undertake the works as it was designed on a number of occasions and so there was no point spending any time on contracts until or if that could be resolved. A couple of weeks ago Nasser called me and told me that he had just agreed with [Paynter Dixon] that they had agreed that we didn ’ t need to place the cog bars. I said that, on that basis, we would immediately review the contract and revert with our comments ” . W hilst that had been attended to, A-Civil ’ s response to MESO ’ s comments had not necessarily led to agreement . A-Civil replied that they understood that Nasser Matta and Mr Orr “ have resolved the current issues ” an d asked whether MESO would be on site the next day to start the RC walls and for details to arrange the first concrete pour. Mr Orr pressed for the contract to be finalised, with Mr Bobek to mark up the relevant pages and send them through to Nass er Matta together with a reconciliation showing outstanding payment amounts. MESO would be on site the next day. On 27 May 2021, Mr Bobek emailed Nass er Matta, attaching marked-up pages of the contract “ amended to what we usually agree to ” . According to Nasser Matta, Mr Orr asked if A-Civil could arrange for the supply of steel and concrete for the reinforced concrete walls, as MESO ’ s accounts with its suppliers were “ on hold ” . Mr Matta had known Mr Orr for many years and was prepared to assist MESO so that it could start work on the project. He said that A-Civil would arrange for the supply of the steel reinforcement and concrete and would back-charge MESO for whatever amounts were invoiced by suppliers without any mark-up. Mr Orr agreed. Mr Orr denied that he told Mr Matta that A-Civil needed to supply the steel reinforcement as MESO ’ s account was “ on hold ” , or that MESO had issues with its credit supplier and thus agreed to reimburse A-Civil for the cost of supplying the concrete directly. He said that MESO never agreed to supply the reinforcement or concrete for the permanent walls. On 28 May 2021, Mr Mostafiz provided concrete supplier Hanson Construction Materials Pty Ltd , MESO and Paynter Dixon with a concrete booking summary for the next week. T his was the first order that he placed for the supply of concrete for the reinforced concrete walls. The quantities ordered were based on quantities provided to Mr Mostafiz by Mr Orr or MESO ’ s operations manager or confirmed with them. Hans o n issued invoices to A-Civil for the concrete so ordered. O n 2 June 2021, MESO started pouring the reinforced concrete walls. P roblem s emerged between Paynter Dixon and A-Civil as to whether A-Civil was obliged to provide starter bars for the slabs or whether this was outside its scope of works. Given the unclear state of the contractual arrangements between these parties, such disputes were probably inevitable. On 11 June 2021, A-Civil provided Paynter Dixon with its rates for a variation, to drill dowel bars and apply epoxy. Approval was sought to proceed. Paynter Dixon replied that this formed part of A-Civil ’ s scope of works, referring to i tem 6( w ) in Schedule 8. Further, “ We have discussed this in our weekly meetings that it is under your contract to provide starter bars to the slabs ” . A-Civil replied that its tender price was based on the design that A-Civil submitted , “ refer to contract drawing register as attached. As such we never allowed any cog bars for the RC wall ” . The contract drawing register referred to is not in evidence but, presumably , was the amended Schedule 9 to the contract submitted to Paynter Dixon on 1 February 2021 and not accepted. O n 23 June 2021, Mr Mostafiz finally responded to Mr Bobek ’ s comments on the proposed subcontract, including: “Item 23 Tim and Nasser have spoken and my understanding is they have agreed on item such as cogs bars into the slabs was not part of our scope – cog bar excluded . Also during the tendering process Tim and Nasser agreed on rates for the concrete($250/m3 which included crush test) and steel reinforcements($1180/ton). As per the invoice from the supplier. ” (Mr Mostafiz’ response is italicised.) Of this email, Mr Mostafiz said the cog bar at the bottom of the wall for B asement 3 was to be installed by Paynter Dixon or its other subcontractor as agreed by Paynter Dixon, which they did. As I further read Mr Mostafiz ’ s response to Mr Bobek of 23 June 2021 , “ As per the invoice from the supplier ” indicated that A-Civil would on- charge MESO in accordance with the amount invoiced by the suppliers of concrete and steel reinforcement, rather than charging MESO in accordance with the rate agreed during the tendering process. Mr Mostafiz said n o one voiced any objection to this. MESO had crossed out large portions of the Scope of Works. Mr Mostafiz attached these pages to his email where, at the bottom of each page, Mr Mostafiz had written “ B ack to back contract. Nothing to [be] crossed out. ” That afternoon, Mr Bobek provided signed pages of the subcontract, with handwritten alterations and deletions. Apparently, these had not been agreed. Mr Mostafiz replied , “ Please sign the attached contract as per the agreed clarifications and send back. In the contract only crossed out which are agreed to crossed out ” . On 24 June 2021, Paynter Dixon emailed A-Civil in respect of its proposed variation to drill dowel bars with epoxy: “PDC do not agree with your mark up documents register. The tender documents that were issued are the Meinhardt designed shoring wall structure, in which cast in L shape starter bars have been incorporated and included in your signed document register A-Civil have agreed to this in the signed Scope of works (attached)” A signed Scope of Works is not in evidence, but presumably Paynter Dixon had such a document as it is referred to in the body of the email and apparently attached to it at the time. Paynter Dixon referred to i tem 6 (w ) in the Scope of Works, which allowed for L shape starter bars at each level as detailed, “ No Variation will be accepted from A-Civil to provide starter bars to each slab ” . Paynter Dixon added , “ We have paid for the redesign to assist A-Civil further to our subbies meetings by removing the added formwork required to cast in the L bars, changed the pour break location thus allowing you to utilize [ MESO ] standard shutter and increased the spacings of the dowels ” . Mr Mostafiz replied to Paynter Dixon, advising that he had replied to Paynter Dixon ’ s queries about the contract on 3 February 2021 and had not heard back, “ As such we considered our signed contract as the executed contract. ” There was no reply. On 28 June 2021, concrete pours resumed. George Matta said the sheet piling and anchoring had been completed and the reinforced concrete walls were underway. Mr Mostafiz also followed up Mr Bobek on the contract. Mr Bobek provided the executed contract. The subcontract The subcontract between A-Civil and MESO is undated but was executed by MESO on 28 June 2021. The subcontract comprise d a Formal Instrument of Agreement, General Conditions of Agreement and Annexures. Clause 9 of the Formal Instrument of Agreement provided that the s ubcontract applied to all Works, whether performed before or after the date of execution of the subcontract . Under the General Conditions of Agreement, MESO agreed to execute the Works in accordance with the Contract Documents in a good and competent manner and to comply with A-Civil ’ s directions given under the agreement: cl 3.2. Clause 3.4(a) provided that the subcontractor must fabricate, deliver and install materials in accordance with the Contract Documents. The subcontractor was obliged to employ sufficient resources for the prompt progress and completion of the Works by the Date for Substantial Completion: cl 3.5(a). Clause 5 dealt with the progress of the works, to which I will return to at [ 299 ]. Suffice to note that Annexure A specified t he Date of Commencement as 16 December 2020 , and t he D ate for Substantial Completion as 1 September 2021. Annexure M contain ed the S cope of W orks and contract documents , including Item 23 , earlier extracted: see [ 64 ] . The list of drawings and reports included both Meinhardt ’ s two drawings and MESO ’ s two drawings of the basement perimeter walls. Annexure N was a redacted partial copy of the head contract, initialled by A-Civil but not by Paynter Dixon. That is, it is the version of the contract emailed to Paynter Dixon on 1 February 2021, which included proposed amendments to the contract. As earlier noted, some of these amendments were not accepted by Paynter Dixon and no final contract was ultimately signed . Relevantly, A-Civil had proposed to amend Schedule 8, “ Scope of works ” , as follows: “6) Sheet piles, anchor and RC wall in-lieu of designed shoring system and capping beam. … w) FRP new perimeter wall details as per Meinhardt designed shoring wall structure. i) Allow for L shape cast in starter bars at each level as detailed. ii) Allow for starter bars from top of shoring wall to tie into B1 & Ground slabs. …” The purported amendment to the head contract was in consistent with Item 23 of Annexure M to the subcontract. The redacted head contract in Annexure N also included proposed amendments to Schedule 9, deleting the two Meinhardt drawings and adding two MESO drawings . This change was not accepted by Paynter Dixon either. This purported amendment to the head contract was also inconsistent with the drawings and plans listed in Annexure M to the subcontract, which included both the Meinhardt and MESO drawings. As such, there were now inconsistencies within the subcontract, and between the subcontract and the head contract. Work continues On 8 July 2021, Paynter Dixon emailed Mr Mostafiz regarding “ notice of backcharge ” , again setting out Item 6( w ) from the Scope of Works. Paynter Dixon noted, “ Please see below extract from signed Contract Scope for Dowel starters which is what I can only go from. … as of yesterday the instruction from George [Matta] was that you are no longer installing dowels … To not delay the job [Paynter Dixon] have hired extra labour / material [so] as to keep program me , W e will document accordingly for our upper management to sort out ” . On Saturday, 17 July 2021, Paynter Dixon advised that all construction sites in the Greater Sydney area were to stop work, apparently as part of the C OVID - 19 lockdowns . A-Civil was directed to close up the site and make it safe on Monday morning, 19 July 2021. On 21 July 2021, A-Civil paid MESO $100,000. A further $50,000 was paid on 29 July 2021. Mr Mostafiz said that , by 31 July 2021, MESO had completed 65% of the B asement l evel 3 reinforced concrete wall and 45% of B asement l evel 2 reinforced concrete wall. Mr Mostafiz prepared a marked-up drawing of progress , which accompanied A-Civil ’ s p rogress c laim to Paynter Dixon and was approved. On 9 August 2021, Paynter Dixon circulated the new rules to allow construction sites to reopen, depending on which local government area workers came from. Mr Orr advised A-Civil that ’ s its crews were currently committed elsewhere “ as we had to pivot to projects that were not restricted ” in other local government areas. Paynter Dixon endeavoured to re-start work on site. On 17 August 2021, Paynter Dixon asked A-Civil to confirm a start date for MESO . Paynter Dixon expressed concerns, noting that MESO was then working on another site and that no one was eligible to return to the Parramatta site either. Nasser Matta advised that MESO would recommence on 2 3 August 2021 and everyone was doing the best that they could in a challenging climate. On 18 August 2021, George Matta updated Paynter Dixon that A-Civil was hoping to start by the end of the week , but it was difficult to get employees to the job due to the global pandemic. On 23 August 2021, Paynter Dixon informed A-Civil that the cost of formwork to extend a wall from the top of MESO ’ s aluminium shutters would be passed back to A-Civil / MESO . Mr Orr asked for a detailed breakdown of the quotation provided by the formworker. Mr Mostafiz passed this request on to Paynter Dixon. Nass er Matta asked Paynter Dixon to proceed with the quote but to send a breakdown. On 26 August 2021, George Matta asked MESO for its forecast program regarding the remaining RC wall, together with steel and concrete orders “ so that we can organise everything to run smoothly ” . Mr Orr was reluctant, advising on 27 August 2021 that he was in a difficult situation and could not afford to keep committing resources to the project and did not have the money to spare to pay wages and other costs. On 30 August 2021, Mr Orr emailed again after a discussion that morning, noting that the arrears were over $500,00 0 and he could not keep providing resources to the project without payments approximating the contract between them. Mr Orr proposed to reallocate his resources to projects where MESO was being paid until this could be sorted out and, absent resolution, would cease work on the site altogether. On 1 September 2021, MESO issued a notice under s 27 of the Building and Construction Industry Security of Payment Act , suspending work. MESO also issued a payment withholding request to Paynter Dixon, claiming to be owed $558,075.69. The Date for Substantial Completion under the subcontract, being 1 September 2021, came and went. EI Australia also provided a further inspection report on Wall 5. Mr Mostafiz asked Mr Orr to advise “ when you can organi [ s ] e the rectification ” . EI Australia recommended: “- T he very low to low strength shale and the medium strength shale exposed over a vertical cut face below the toe of the sheet piles, are considered to be stable under the prevailing site conditions, in the short term. - [As Paynter Dixon indicated that the excavation face will remain exposed for at least two months] it is recommended that the very low to low strength shale bedrock exposed over the vertical excavation face be protected with a minimum thickness (50mm) reinforced shotcrete, with dowels to engage the mesh to the face of the rock. Strip drains should be provided behind the shotcrete to allow drainage of groundwater seepage at the contact between rock face and shotcrete…” The report stated that there were sub-horizontal bedding defects in Wall 5 . The engineer recommended that shotcrete works be undertaken to protect deterioration of the very low to low strength shale and to prevent topping / sliding of small blocks and wedges. On 3 September 2021, George Matta sought Paynter Dixon ’ s assistance to stop MESO lifting their gear out onto MESO trucks, but Paynter Dixon declined to do so, suggesting that A-Civil sort the matter out directly with MESO . On 7 September 2021, Mr Orr and Mr Matta met , after which MESO withdrew the suspension of work notice and the withholding notice issued to Paynter Dixon. On 10 September 2021, Mr Mostafiz followed up Mr Orr in respect to the proposed rectification of the rockface inspection in Wall 5. Mr Orr replied, “ This just involves a process called “ cutting and shutting ” where the protruding piece of sheet pile is cut out with oxy acetylene and repositioned and welded in its new position. This will be done as part of placing the walls. ” O n 13 September 2021, Paynter Dixon met with George Matta . The minutes record that A-Civil was to confirm the method of rectification for Wall 5 with MESO that day and advise Paynter Dixon the next day, noting that there was “ the potential to weld or attach sheets to the bottom instead of shotcrete as per EI report would suffice ” . Mr Orr ’ s response was provided to Paynter Dixon but was not regarded as particularly responsive. Mr Mostafiz went back to Mr Orr , “ I believe you mixed up with wall 1. Cutting of sheet is not required anymore. I was actually requested you the rectification for wall 05 as per the attached advi c e from EI ” . Moving footpath On 14 September 2021, a site meeting was held, attended by MESO . The meeting was prompted when significant movement in the footpath behind Wall 5 was noticed on arrival at site. Work stopped. The way forward was discussed. Photographs record obvious subsidence in the footpath and a loss of material at the bottom of the sheet piling for Wall 5. Mr Orr asked MetAus to meet with MESO ’ s operations manager on site and discuss an appropriate approach, “ W ith the rain last night it has washed material from behind the sheets where they pre-drilled which has led to some footpath subsidence. … it also looked like one of the anchors has been caught with a bucket when it was being excavated or something and reefed it ” . George Matta took photographs of anchors protruding out of Wall 5 and voids behind some of the sheet piles in Wall 5. He said t he anchors did not show any damage caused by the excavation process. That may be so, but one of the anchors does look like it has been “ reefed ” , in that there is a gap between the anchor and sheet behind it, and the rod is bent. George Matta arranged for backfill material to be pushed against Wall 5 to prevent further subsidence beneath Wall 5. Later that day, EI Australia advised that the movements and settlements of the footpath behind the sheet pile walls was “ likely due to loss of the fill and soil material through the gaps between the sheet pile wall to e and the weathered shale beneath, which was also compounded by the build - up of water behind the sheet pile overtime ” . On 15 September 2021, Paynter Dixon required A-Civil to have MESO check the walls to confirm the adequacy of the anchors, given “ the alarming findings today of 3 failed anchors ” . Mr Orr rejected the suggestion that the anchors had failed , “ We have never had failed anchors. I suggest your terminology is incorrect. ” Paynt e r Dixon rejoined that , whatever the correct terminology was, the footpath remained closed with 24 hour traffic control and lane closure in effect. M ESO ’ s site diary for 15 September 2021 records, “ Checked anchors that had been hit to see if they were still holding weights. 3 Anchors had been damaged and broken and could be removed by hand. ” Mr Orr advised Paynter Dixon and A-Civil that the anchors in the area had been inspected closely that morning; three anchors had been compromised. The remainder of the area was successfully load-tested and the anchors held their design loads. MESO was in the process of placing and tensioning three replacement anchors and that would be done that day. The wall was “ perfectly stable ” . Mr Orr provided a shoring assessment report from MetAus that evening. The report stated that, in the third row of anchors, one anchor appeared to be heavily damaged and one anchor had its anchor plate not flush with the wall. The third row of anchors on sheet piles 90, 92 and 94 were damaged and needed to be replaced. On 16 September 2021, George Matta proposed rectification work for the footpath. Paynter Dixon said they still wanted to shotcrete at the base the wall before the footpath was rectified “ in case when you pull out the material below, all your work at the top sinks again ” . On 17 September 2021, EI Australia confirmed that the shoring wall had been rectified and was stable to support the soil behind the wall. Recommendations were made for the procedure to rectify the footpath , which Paynter Dixon accepted. On 22 September 2021, A-Civil carried out shotcreting works on site as recommended by EI Australia. George Matta said that MESO ’ s employees assisted with the steel-fixing. Paynter Dixon asked MESO to test the remaining anchors in the affected subsidence area. EI Australia inspected the site where the footpath had subsided and made further recommendations. Nasser Matta said that he met with Paynter Dixon at about this time, when A-Civil ’ s excavation works were largely completed. He told Paynter Dixon that, in circumstances where A-Civil was close to completing its works which had not been subcontracted, Paynter Dixon could communicate directly with MESO in relation to the works that MESO needed to carry out. By that stage, MESO was carrying out works to install the reinforced concrete walls. He also said that Paynter Dixon needed to supply the concrete and steel to MESO for the reinforced concrete walls. He informed Mr Orr of the discussion shortly after the meeting. On 23 September 2021, Paynter Dixon advised that it would be taking over organising concrete and reo supply, with costs to be on-charged to A-Civil and onto MESO . Mr Mostafiz said that Paynter Dixon then arranged for the supply of concrete and steel reinforcement for MESO ’ s works. Hans o n issued invoices to Paynter Dixon for this concrete while Mesh & Bar Pty Ltd rendered invoices to Paynter Dixon for steel reinforcement supply. On 24 September 2021, MESO provided a further letter from Met A us , confirming anchor inspection and testing. The report stated that one anchor at sheet pile 102 was not holding the required lock-off load and this was proof- loaded again. Following anchor testing, it was observed that the gap between the sheet piles and the retained soil had closed. On 25 September 2021, A-Civil paid MESO $30,000 on account. On 28 September 2021, Mr Mostafiz asked Paynter Dixon what the rate for the steel and concrete would be so that he could inform MESO . On 29 September 2021, EI Australia advised that part of the footpath could be reopened. EI Australia wanted to know who it should invoice, and Paynter Dixon suggested that A-Civil should be billed “ as they need to recover this from their subcontractor ” . EI Australia ultimately issued an invoice to Paynter Dixon who said “ we will discuss with Subb ie separately ” . On 30 September 2021, Mr Mostafiz also asked Paynter Dixon to send through a copy of the contract signed by Paynter Dixon, advising that A-Civil would not provide any further resources on site until it was received. On 1 October 2021, A-Civil paid MESO $30,000 on account. George Matta said that A-Civil completed its works on the site in about mid-October 2021, which involved finishing detailed excavation and loading out the material. Mr Mostafiz said , “ Only work was remaining there was MESO ’ s work. ” Nasser Matta agreed that A-Civil did not complete all of the work under its contract with Paynter Dixon, but clarified that the portion of works which was not completed was that which MESO was supposed to perform under its subcontract. According to the site diaries, 18 October 2021 was also MESO ’ s last day on the site for a little time. On 21 October 2021, MESO ’ s operations manager asked to remove the walling system so that other projects could be completed. Mr Orr said that MESO re-deployed its resources to other projects , as the company had commitments to other clients. He said it was very time consuming for MESO to pack up all of its equipment and transport this back and forth from the Parramatta RSL project and other projects the company was committed to. MESO returned to site on 4 November 2021. On 4 November 2021, A-Civil paid MESO $50,000 on account. On 5 November 2021, Mr Mostafiz pressed Mr Orr on progress , asking Mr Orr to confirm that MESO would be on site tomorrow as Paynter Dixon had booked concrete . Mr Orr replied , “ As I have discussed with Nasser, we all scheduled this work to be completed months ago and had committed to other projects for this part of the year. We can ’ t just wait around waiting at Paynter Dixon ’ s pleasure and jump whenever they decide. We are committed on other projects … neither A Civil n or MESO caused these delays … and so they are simply going to have to wait for us. ” On 6 November 2021, Paynter Dixon complained that MESO was nowhere to be seen. Mr Mostafiz passed this on to Mr Orr, also complaining that Paynter Dixon did not keep A-Civil advised of what it was discussing with MESO directly. On 9 November 2021, Paynter Dixon followed up MESO directly, and Mr Orr asked A-Civil to instruct their client to desist in this practice. On Friday, 12 November 2021, Paynter Dixon requested A-Civil to return to site by 15 November 2021 as the RC wall was a critical path activity. Otherwise Paynter Dixon would engage an alternate subcontractor. Paynter Dixon also advised the costs of concrete and reo being supplied. Mr Mostafiz provided this email to Mr Orr late on Sunday night , 14 November 2021 , noting , “ The double shutter works need to be commence urgently (Tuesday – 16/11/2021). ” Mr Mostafiz said he did not receive a response from Mr Orr in relation to his email but understood from his conversation with Mr Orr that MESO ’ s employees attended the site on 16 November 2021. Mr Mostafiz agreed that it would have been hard for MESO to organise itself in the time available. On Tuesday, 16 November 2021 , Paynter Dixon ’ s alternative contractors started work. ME S O attended the s ite and saw that there were third party contractors forming B3. Mr Mostafiz complained to Paynter Dixon , “ I am not sure what confirmation you are waiting from us as you already star[t]ed with your alternative contractor. Just for the records the steel fixation was completed by MESO in this wall. ” On Monday, 22 November 2021, Paynter Dixon asked A-Civil when the formwork shutters were returning to site. Alternative subcontractors would now commence the next area, B2, from 25 November 2021, with costs applied back to A-Civil. Paynt e r Dixon sent a follow-up on Friday, 26 November 2021. Mr Mostafiz provided Paynter Dixon ’ s email to Mr Orr and sought his advice at his earliest convenience. Mr Mostafiz received no response to this email. Paynter Dixon also approached MESO directly asking for the deliver y of foam inserts for the Parramatta RSL project or the supplier ’ s details, “ If not I will source elsewhere and back charges will incur accordingly ” . On 1 December 2021, Paynter Dixon contacted MESO again , requesting more foam and labour to complete its installation. Mr Orr asked Paynter Dixon to communicate with A-Civil , not MESO . On 2 December 2021, Paynter Dixon emailed A-Civil noting that works to the RC wall needed to be commenced on 11 December 2021 , otherwise an alternative contractor would be engaged. A-Civil asked MESO . Mr Orr advised that its formwork system remained stuck on other sites , where MESO was experiencing substantial delays. A-Civil advised Paynter Dixon accordingly. On 9 December 2021, Paynter Dixon advised A-Civil that it would continue with the shutter s until further notice. Mr Mostafiz spoke to Mr Orr about the email. He then emailed Mr Orr, “ A s discussed at this moment you will only continue [ to ] place void formers and steel fixing from Monday 13/12/2021 . ” Paynter Dixon was so advised. On 16 December 2021, Paynter Dixon advised A-Civil that the next area ready for a pour was B1 pour 2, with shutters needed on 5 January 2022. If this could not be achieved , then an alternative contractor would be engaged to complete and charge d accordingly. A-Civil was asked whether MESO would return to insta l l the reo and foam to the walls. MESO was asked. According to Paynter Dixon ’ s site diary, this was the last occasion on which MESO did any substantive work on site, being to finish the installation of reo in certain areas on B2. Mr Orr said that MESO carried out some minor steel fixing on the project on 15 and 16 December 2021. On 21 December 2021, Mr Mostafiz asked whether the work could be put back to the end of January 2022. Paynter Dixon advised that they could push the work back to 17 January 2022 but otherwise would need to engage an alternate contractor in order not to come to a stop. On 23 December 2021, A-Civil paid MESO $40,000 on account . MESO leaves site On 11 January 2022, Paynter Dixon emailed Mr Mostafiz and MESO ’ s operations manager, noting that Paynter Dixon had spoken to MESO about the installation o f reo and sought confirmation “ we can get men accordingly ” . According to Paynter Dixon ’ s site diary, this was the last occasion on which MESO attended the site, being to “ pick up scaffold ” . On 12 January 2022, MESO ’ s operations manager emailed Paynter Dixon and Mr Mostafiz , advising that he had tried to allocate men for the project but was “ dropping men daily ” and could not commit any resources. Mr Orr had been asked to see if the project could be accommodated “ but with still no outcome on man power ” . On 13 January 2022, Paynter Dixon confirmed that it would organise labour to complete on MESO ’ s behalf. On 18 January 2022, MESO submitted Payment Claim No 13 for $123,860.20 plus GST, with the amount outstanding then said to be $269,128.39 (including GST) . MESO claimed 100% completion of B asement levels 2 and 3 reinforced concrete walls , 67% completion of B asement level 1 walls and 54% completion of the ground floor walls. MESO allowed ‘ credits ’ or negative variations for concrete and steel supplied by A-Civil. On 19 January 2022, A-Civil submitted Progress Claim No 12 to Paynter Dixon , being $169,133.92 plus GST . Included in the payment claim was a payment claim breakdown for MESO, repeating the percentage completion stated in MESO ’ s P ayment C laim No 13. On 20 January 2022 , Paynter Dixon circulated a program update to A-Civil and MESO , seeking confirmation that “ you will have men and materials to start on the [ se ] dates ” and confirming that a third party contractor would continue forming and pouring as a backcharge. Paynter Dixon followed up A-Civil and MESO on Sunday, 23 January 2022, noting that MESO ’ s operations manager had attended the site on Saturday “ and was going to give an answer by the end of the day ” . A response was sought before noon on Monday, 24 January 2022 , “ so I can arrange other labour on your behalf ” . In the wee hours of 24 January 2022, Mr Orr emailed George Matta, advising that MESO could not keep returning to site with materials and men to undertake the work if A-Civil or MESO was not being paid. The amount of money owing was said to be quite large ; he understood that A-Civil was also owed a substantial amount of money. If Paynter Dixon were not paying in accordance with the contract, then Mr Orr said it made no sense to become further exposed to what would, in the end, become a legal dispute. At the end of that day, at 5.00 pm, Mr Orr emailed again, noting that Paynter Dixon had contacted MESO ’ s operations manager directly, “ we can only take our instructions from ACivil ” . Mr Orr had apparently tried to speak to Mr Mostafiz and George Matta without success to try to determine what action should be taken but , “ A s of right now in the absence of that we have not put any plans in place to provide materials or staff to the site. ” Mr Mostafiz agreed that Mr Orr was indicating that he was waiting on A-Civil to give him further instructions to attend to work under the contract. Mr Mostafiz agreed that he did not issue MESO with any instruction to carry out work in 2022. But Mr Orr ’ s emails are a little contrived , given the history of this project. Mr Orr had been communicating directly with Paynter Dixon for some time . In fact, Mr Orr had received a call from Paynter Dixon that day. He said that MESO did not complete any further works on the project as Paynter Dixon had advised it would arrange for the remaining walls to be placed. I accept Mr Mostafiz ’ s evidence that he did not issue any stand down orders to MESO , nor was h e aware of any instructions given to MESO to stand down. Where MESO ’ s employees who would have been the recipients of such stand down orders did not give evidence, I infer that their evidence would not have assisted MESO. Mr Orr appears to have been simply unable to commit any further resources to this project given the other projects on which MESO was engaged. Payment schedule On 1 February 2022, Paynt e r Dixon assessed A-Civil ’ s Progress Claim 12 and issued a payment schedule , allowing $ nil for the claim made and asserting that A-Civil / MESO had not achieved completion to the extent claimed and noting that t he remainder of the works had been “ completed by others ” . In addition, Paynt e r Dixon claimed various back - charges including: the cost to engage another subcontractor to complete a portion of A-Civil ’ s contracted works, being a concrete pump, steel fixing and formwork for the RC shoring walls, in the amount of $365,514 (BC02); the cost to supply and install starter bars to the reinforced concrete walls , said to form part of A-Civil ’ s contracted works, being $19,391 (BC03); the rectification cost of the shoring wall collapse “ caused by A-Civil ” including asphalt works to rectify the footpath and pedestrian control, being $44,427 (BC12); the cost of supplying concrete and reinforcement to the RC shoring walls, being $161,829.70 (BC17); and the estimated cost to complete the RC shoring walls, being $184,744 (BC19) . The Payment Schedule tallied a deficit of $898,358.04 plus GST against A-Civil and in favour of Paynt e r Dixon , of which $775,905.70 related to the back-charges set out above. Mr Mostafiz said that the difference between these figures was to do with defective works which A-Civil had carried out. Each back-charge was detailed in a separate table supported by accompanying invoices and reports. A-Civil provided the back - charges to Mr Orr for his assistance in preparing a reply. The email to Mr Orr included the Dropbox link that had been provided by Paynter Dixon to A-Civil and, as such, Mr Orr had access to the supporting detail and documentation for each back-charge. On 9 February 2022, Mr Mostafiz advised Paynter Dixon that , pursuant to cl 21.1(a) of the contract, A-Civil was disputing the assessment of Progress Claim No 12 and would submit a formal reply in due course, “ however Nasser is happy to sit for a meeting with [ Paynter Dixon ] and MESO ” . O n 1 March 2022, Paynter Dixon created a list of eight “ D efect items for … Stage 2 Car Park Parramatta RSL ” , all of which were “ assigned ” to Mr Mostafiz to rectify . The parties met on 3 March 2022 . Nasser Matta did not attend the meeting; Mr Mostafiz and contract administrator George Agha attended for A-Civil. Mr Orr attended for MESO . A ccording to later email s from Mr Bobek , “ Tim argued these points [in respect of back-charges] in the meeting at Paynter ’ s ” before “ he excused himself as commercial discussions that concerned [ A-Civil ] and Paynter [Dixon] were about to be raised ” . Mr Mostafiz told Paynter Dixon in the meeting that some of the back - charges were excessive , including the estimated cost to complete the RC shoring walls in BC19. He blamed Paynter Dixon for causing interruptions to A-Civil progressing the work on some of the items. Mr Mostafiz said that n o agreement was reached. After the meeting, A-Civil did not proceed to provide any formal response to the payment schedule. Paynter Dixon did not pay A-Civil the sum claimed in Payment Claim No 12. A-Civil did not pay any part of the payment schedule. Nor did A-Civil return to the site to address any of the defect items. Nor did Paynter Dixon provide A-Civil with a definitive amount for BC19. After the meeting, MESO also emailed A-Civil, endeavouring to work together to persuade Paynter Dixon to pay for their work. Mr Bobek advised Nasser Matta on 1 April 2022, “ I can understand not paying for part of the walls to which we will and have indicated we are prepared to sit and work out a reasonable figure for backing out this part of the contract. ” On 1 May 2022, MESO submitted Payment Claim No 15. Mr Bobek ’ s cover email explained that MESO had “ calculated a fair price for the basement walls on past emails from Paynter [Dixon] and their form worker. ” As I understand it, MESO took into account the work which it had not done and which Paynter Dixon had arranged to be done by another subcontractor. I have not been able to spot the difference. On 30 May 2022, MESO submitted Payment Claim No 16, effectively reducing its earlier payment claims. (Presumably, this allowed for the back-charges which was to be included in a previous payment claim, but was not.) The total amount now owing was said to be $366,813.79. In its final payment claim, MESO stated that the Works were 100% complete. MESO allowed ‘ credits ’ or negative variations for: the supply of steel and concrete by A-Civil; works not required; and b ack-charges for reinforcing , formwork and concrete placement, totalling $131,258.78, which I take to be work under the subcontract which MESO accepted it had not performed and was performed by another subcontractor . On 4 August 2022, MESO lodged an adjudication application. On 5 August 2022, MESO gave Paynter Dixon a notice of withholding request. On 12 August 2022, an adjudication determination was issued: A-Civil was to pay $366,813.79 including GST to MESO by 30 June 2022. That is, the final payment claim was allowed in full. On 17 August 2022, MESO provided the adjudication determination to Paynter Dixon. On 24 August 2022, A-Civil filed a S ummons, challenging the validity of the adjudication determination. A release? O n 26 August 2022, Paynter Dixon emailed Mr Mostafiz and Nasser Matta, “ Further to our meeting please find attached Deed of Release for your signing and return. ” Mr Mostafiz said there was no meeting with Paynter Dixon in August 2022. On receipt of the email, Mr Mostafiz wondered whether Paynter Dixon was referring to the meeting on 3 March 2022. He reviewed the deed of release and discussed it with Mr Matta . Mr Mostafiz did not sign the deed , as he said this was a decision for Mr Matta. Mr Mostafiz did not respond to Paynter Dixon ’ s email either , but left the matter with Mr Matta. Nasser Matta said he read the title of the email and attachment but “ I ignored it because I was at no meeting ” . He briefly looked at the deed, “ and I could see it was all one-sided. And as I just didn ’ t attend any meeting, I just ignored it. ” He did not respond to the email nor have any discussions with Paynter Dixon after August 2022 regarding the deed. I accept Mr Mostafiz ’ s evidence that t he only meeting he attended with Paynter Dixon to discuss back-charges , or any resolution of the contract or the Parramatta RSL project , was the meeting on 3 March 2022. He was a credible witness. T here are no contemporaneous records (other than perhaps the cover email) which point to any subsequent meeting. Where Paynter Dixon had received a notice of withholding request from MESO on 5 August 2022, followed by an adjudication determination on 17 August 2022 , Paynter Dixon was likely prompted to follow up what had been discussed at the meeting on 3 March 2022 . Looking at the terms of the proposed deed, t he recitals noted that Paynter Dixon and A-Civil wished to settle the balance of the terms of their contract on the basis set out in the deed. The proposed operative parts provided: the parties agreed that A-Civil was no longer required to carry out any works required under the contract: cl 1; A-Civil agreed that there were no further monies due and owing under the contract and Paynter Dixon had authority to proceed to claim the balance of any retention monies held: cl 2; A-Civil warranted inter alia that its subcontractors had been paid in full for work carried out in relation to the contract: cl 3(iii); and w hile A-Civil continued to have obligations in the defect liability period or retention period, the parties otherwise released each other from their obligations under the contract: cll 5 and 6. Paynter Dixon appears to have been prompted to attend to other housekeeping in respect of the Parramatta RSL project as well . On 25 September 2022, Paynter Dixon made an entry on a “ Sub Contractor Status Card ” in respect of A-Civil and the Parramatta project, reducing the contract value by $384,911.51 . The description for this entry was “ Release remaining contract value as remaining works completed by others ” . It is convenient to deal with MESO ’ s contention that A-Civil failed to mitigate its loss by not sign ing the d eed of r elease: Bailey v Redebi Pty Ltd [1999] NSWSC 918 at [102] (Santow J). Had it done so , any liability of A-Civil to Paynter Dixon would have been “ waive[d], release[d] and forever discharge[d] ” and, as such, A-Civil would have avoided a loss altogether . The effective cause of the plaintiff's loss was said to be its own failure to mitigate. A defendant will not , as a matter of causation , be held liable for the plaintiff's loss : J Bailey, Construction Law , (Vol II, 2016, Informa Law) at [13.124]. In assessing loss for breach of contract, “ loss which is due to unreasonable or improvident actions of the plaintiff is generally disregarded by application of the rules of mitigation of loss ” : Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17 at [120] (Edelman, Steward, Gleeson and Beech-Jones JJ). Only reasonable steps need be taken in mitigation : Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 ; [1998] HCA 38 at [134] (Hayne J). What is reasonable for a person to do in mitigation of damages is a question of fact in the circumstances of each case: Payzu Ltd v Saunders [1919] 2 KB 58 1 at 589 (Bankes LJ); British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 at 688 - 9 (Viscount Haldane LC) ; Regional Development Australia Murraylands and Riverland Inc v Smith [2015] SASCFC 160 at [139] (Nicholson J, Gray and Sulan JJ agreeing) . Where it is contended that a plaintiff should have taken steps by way of mitigation, the onus of proof is on the defendant: Cessnock City Council v 123 259 932 at [121], citing TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd (1963) 180 CLR 130 at 138 (Kitto, Windeyer and Owen JJ) ; [1963] HCA 57 . The defendant has not discharged this onus. By t he time that the deed was received on 26 August 2022, A-Civil was in no position to give the warranty referred to in cl 3(iii) of the deed, being that its subcontractors had been paid in full for their work. MESO had recently obtained an adjudication determination in its favour, requiring A-Civil to pay $366,813.79, which A-Civil was in the process of challenging. Nor does it follow that A-Civil would have suffered no loss or damage if it signed the deed. True it is that Paynter Dixon could no longer pursue A-Civil for the amounts calculated in the payment schedule. But A-Civil would have had to surrender its right to recover monies owed, which Nasser Matta said then stood at $419,257.95. A-Civil would also lose its ability to recover retention monies of $99,135. Without further negotiation of cl 3(iii) of the deed, A-Civil was in no position to sign the deed as presented. And whether A-Civil should sign the deed at all depended on an assessment by Mr Matta of what A-Civil would gain or lose by doing so . T hat was a commercial assessment which he was well-placed to make . T here is insufficient evidence to conclude that a decision not to sign the deed was unreasonable or improvident. These proceedings In November 2022, A-Civil commenced these proceedings, seeking a declaration that MESO had failed to comply with its obligations under the subcontract . A-Civil sought damages or, in the alternative, an order under s 32(3) of the Building and Construction Industry Security of Payment Act . On 27 March 2023, Paynter Dixon closed the relevant items on its defects list in respect of the Parramatta RSL carpark, notwithstanding that most of the defect items were recorded as requiring work by A-Civil. In May 2023, Richmond J made orders dismissing the Summons filed by A-Civil against MESO in respect of the adjudication determination. The monies paid into Court by A-Civil, being $375,012.75, were to be paid out to MESO . On 17 August 2023, Paynter Dixon made a final entry on the “ S ub C ontractor S tatus C ard ” in respect of A-Civil and the Parramatta RSL project , reducing the contract value to nil after deducting $99,135.98 with the narration “ UNCLAIMED RETENTION ” . R etention monies of $99,135.98 was “ taken up ” . On 20 September 2023, A-Civil amended its pleadings, seeking an additional declaration that MESO was obliged to indemnify A-Civil for its liability to Paynter Dixon, including for liquidated damages, and restitution for the monies paid to MESO in compliance with the order made by Rich m ond J. As to whether A-Civil ha s paid liquidated damages to Paynter Dixon, Mr Mostafiz said “ So far, no ” . Mr Mostafiz agreed that A-Civil did not request a certificate of completion or receive a notice certifying completion. Nasser Matta said that A-Civil has not “ at this stage ” pursued Paynter Dixon for monies owing of $419,257.95 for th e project “ because Paynter Dixon makes claims against A-Civil ” . Mr Matta said that he is concerned that $419,257.45 ha s not been paid to A-Civil, and that Paynter Dixon can pursue A-Civil for the difference between that amount and the payment schedule, being $568,935.89 . Nor has Paynter Dixon sought to recover monies owing from A-Civil. Liability for back-charges The largest component of A-Civil ’ s claim is amounts claimed by Paynter Dixon as back-charge s, in respect of which A-Civil seeks to enforce indemnit ies given by MESO in the subcontract. The first question is whether A-Civil is obliged to pay the payment schedule issued by Paynter Dixon on 1 February 2022, such that there is a ‘ back-to-back ’ obligation which MESO may be required to meet. This turns on the terms of the head contract and subcontract and the implications, if any, of A-Civil ’ s subsequent “ commercial discussions ” with Paynter Dixon. As to the terms of the head contract, c l 17 concerned payment. Within 10 business days of receipt of a payment claim from A-Civil, Paynter Dixon may issue a payment schedule stating the amount that Paynter Dixon proposes to pay (the Schedule d Amount) and, if the Schedule d Amount is less than the claimed amount, reasons for the difference: cl 17.3. Clause 17.4 of the head contract continued : “ 17.4 Payment (a) Within twenty (20) Business Days following receipt of the Payment Claim, should an amount be payable to the Subcontractor, Paynter Dixon will pay the Subcontractor the Scheduled Amount. (b) Payment by Paynter Dixon under paragraph (a) is not an admission that work has been executed satisfactorily but is payment on account only . (c) Where under any Payment Schedule an amount is due from the Subcontractor to Paynter Dixon the Subcontractor must pay to Paynter Dixon that amount within five (5) Business Days of the Payment Schedule being issued. ” (Emphasis added.) A-Civil submitted that the obligation to pay the amount in a Payment Schedule to Paynter Dixon was not qualified ; cl 17.4(c) simply impose d a n obligation to pay. MESO submitted that cl 17.4(c) only required A-Civil to pay an amount to Paynter Dixon if the amount was “ due ” from A-Civil to PDC “ under any Payment Schedule ” . An amount bec a me “ due ” under a Payment Schedule if the amount was due under the terms of the contract. None of the back-charge s were so due. Nor was Paynter Dixon ’ s assessment of the payment claim a final account : cl 17.4(b) ; Champion Homes Sales Pty L td v DCT Projects Pty L td [2015] NSWSC 616 at [133] . In Champion Homes , Ball J (as his Honour then was) noted that progress payments made for work done under a lump sum contract were “ on account ” of the price payable under the contract , “ The actual price for the work was not payable until completion of the contract and it was only on completion that the respective rights and liabilities in respect of the contracted-for work could finally be determined ” : a t [133] . His Honour cited McPherson JA and Helman J in Re Concrete Constructions Group Pty Ltd [1997] 1 Qd R 6 ; [1997] QCA 086 , where their Honours observed at 12: “ [T]he process involved is one of making, certifying and paying progress claims. Such claims and payments are, in building contracts in the common form, always intended to be provisional only. See Hudson’s Building and Engineering Contracts (11th ed, 1995), at paras 6.186–6.189. That is to say, they await the day when a final certificate issues, in which the ultimate indebtedness by one party to the other is ascertained and fixed. Before that stage is reached, it is generally correct to say that no payment is capable of finally determining the rights of the parties with respect to matters in dispute between them. ” As a general proposition, that is undoubtedly correct. The contract in Re Concrete Constructions provided that payments by either the contractor or the principal “ shall not prejudice the right of either party to dispute … whether the amount so paid is the amount properly due and payable …” . But it remains the case that the parties to a contract may always make a different agreement. T here is a distinct difference in the drafting of adjacent sub-cl l 17.4(b) and 17.4(c) . If Paynter Dixon ’ s assessment of a Payment Claim result s in an amount to be paid to A-Civil, the n cl 17.4(b) provide s that payment by Paynter Dixon of the Payment Claim is “ payment on account only ” . But if Paynter Dixon ’ s assessment of a Payment Claim result s in an amount to be paid by A-Civil, then cl 17.4(c) does not provide that this will be “ payment on account only ” . A sensible, objective construction of the sub-clauses is that the contrast is deliberate: see, for example, Uber Builders and Developers Pty Ltd v MIFA Pty Ltd [2020] VSC 596 at [56] (Nichols J). Th e differen t drafting suggests that the parties intended that a payment by A-Civil under cl 17.4(c) would not be on account only. Further , i f the amount specified in the P ayment S chedule was only “ due ” from A-Civil to Paynter Dixon under cl 17.4(c) on a final accounting at the end of the contract, then cl 17.4(c) would become largely redundant . A-Civil was entitled to submit a Payment Claim once every month: cl 17.2(a)(i). If Paynter Dixon ’ s assessment of the Payment Claims resulted in an amount to be paid by A-Civil, then MESO ’ s proposed construction would have the result that Paynter Dixon would have to wait until completion of the contract for its money in respect of such assessments . As Ball J noted in AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985 , “ The general principle is that the words of a contract should be interpreted in a way which gives them an effect rather than a way in which makes them redundant ” : at [13] . This tells against MESO ’ s proffered construction. Finally , MESO ’ s proffered construction is inconsistent with the terms of cl 17.4(c) itself , which requires that any amount due from A-Civil to Paynter Dixon under the Payment Schedule is to be paid “ within 5 (five) B usiness D ays of the Payment Schedule being issued ” , not at the end of contractual performance. When cl 17.4(c) is read in its entirety, t he reference to an amount being “ due ” is a reference to the ‘ bottom line ’ of the P ayment S chedule , that is, that Paynter Dixon ’ s assessment of the Payment Claims has resulted in an amount to be paid by A-Civil . It follows that A-Civil was obliged to pay the amount in the Payment Schedule to Paynter Dixon under the head contract. Turning to the subcontract, cl 10 .10 of the General Conditions concerned “ Pass Through Obligations ” , defined as the provisions of the head contract having back-to-back application to the subcontract: cl 2.1. MESO was obliged to comply with Pass Through Obligations so that A-Civil could satisfy its obligations under the head contract: cl 10.10(b). The provisions of the head contract had back-to-back application to the subcontract in relation to the Works, with the obligations of A-Civil and the rights and remedies of the principal deemed to be incorporated into the subcontract: cl 10.10(d). Further, cl 10.10(i) of the General Conditions provided: “(i) To avoid doubt: … (iii) if any payment or refund must be made by A-Civil to the Principal under the Head Contract, the Subcontractor must make that payment or refund to A-Civil, not less than 2 Days before the due date under the Head Contract, together with any interest or other amount payable; … (v) the non-exercise of any right by the Principal under the Head Contract does not limit A-Civil’s rights under this Agreement; … ” The clear import of these provisions is that MESO was obliged to pay the amount in the Payment Schedule to A-Civil, so that A-Civil could pay that amount onto Paynter Dixon under the head contract. The next question is what implications, if any, do A-Civil ’ s subsequent “ commercial discussions ” with Paynter Dixon have on th e s e obligation s ? In short, have A-Civil and Paynter Dixon subsequently agreed that A-Civil is not obliged pay the amount in the Payment Schedule in accordance with cl 17 .4 (c) of the head contract or at all ? Accepting that M ESO ’ s Pass Through Obligations do not depend on Paynter Dixon having exercised its rights , has Paynter Dixon agree to forego those rights: cl 10.10(i)(v) , General Conditions? I have earlier set out the relevant principles. Paynter Dixon ’ s cover email, circulating the Deed of Release stated, “ Further to our meeting please find attached Deed of release for your signing and return. ” The cover email suggests that the author considered the deed of release as suitable to be signed and returned, that is, reflecting what had been discussed at the meeting on 3 March 2022. The deed recorded, effectively, an agreement to ‘ walk away ’ , with the parties to forego their claims against one another save that Paynter Dixon could claim the balance of the retention monies and A-Civil continued to have responsibilities under the defect liability period. Nasser Matta ’ s evidence that he simply ignored the email and deed of release as “ I was at no meeting ” is unlikely, where A-Civil had two representatives at that meeting. The fact that Mr Matta did not attend himself did not make the meeting irrelevant. Mr Mostafiz said that he discussed the deed of release with Mr Matta on receipt, and I accept that they did so. Presumably, they spoke about whether the deed of release reflected the “ commercial discussions ” which took place on 3 March 2022, for which Mr Orr “ excused himself ” : see [ 225 ]. But the deed of release was not signed. Mr Matta gave evidence on this subject orally, in chief. He appeared quite stressed at the time. Mr Matta was careful to say that he had no discussions with Paynter Dixon “ regarding this deed ” or “ in regard to this email or deed ” . As a matter of impression formed at the time, I inferred that Mr Matta may have had other discussions with Paynter Dixon which he regarded as falling outside this description. Paynter Dixon and A-Civil have subsequently conducted themselves consistently with an agreement to ‘ walk away ’ in the following three years. Paynter Dixon has taken up the retention monies and closed the defect items relevant to A-Civil ’ s works. Paynter Dixon has not sought to enforce any of its rights under its contract with A-Civil. Perhaps the fact that the head contract was never finalised, so far as the evidence reveals , had something to do with Paynter Dixon ’ s approach . And the subsequent conduct of the parties – which is consistent with an agreement to ‘ walk away ’ – is very telling. Having read the contemporaneous communications between Paynter Dixon and A-Civil during the course of the Parramatta RSL project, the head contractor actively managed A-Civil and, later, MESO ’ s performance of the works. Paynter Dixon communicated with A-Civil and, later, MESO , promptly and frequently . D espite the absence of a finalised contract, Paynter Dixon did not take a backward step in its dealings with A-Civil. By sharp contrast, there is then three years of silence. In the result, I find that A-Civil and Paynter Dixon agreed informally to simply ‘ walk away ’ . My finding in these proceedings does not, of course, bind Paynter Dixon, which is still with in time to enforce its rights to have the amount in the Payment Schedule paid or to claim liquidated damages . And fortunately, this possibility is addressed by the very nature of an indemnity. I n Canty v Paperlinx Australia Pty Ltd [2014] NSWCA 309 , Gleeson JA (Barrett and Emmett JJA agreeing) described the difference between a guarantee and an indemnity. A guarantee is “ a binding promise of one person to be answerable for the debt or obligation of another if that other defaults … The distinctive feature of a contract of guarantee is the secondary nature of the obligation which is assumed by the guarantor. There must be another person who is primarily liable ” : at [38]. By contrast, “ under an indemnity, a person assumes a primary liability. A contract of indemnity is “ a contract by one party to keep the other harmless against loss ” and is not dependent on the continuing liability of the principal debtor. An indemnity is an independent obligation to make good a loss ” : at [39]. And the appropriate remedy here is to grant the declaratory relief sought by A-Civil such that, in the event that Paynter Dixon does seek to recover the sum specified in the Payment Schedule or liquidated damages , then MESO will be obliged to keep A-Civil harmless against that loss. The extent to which MESO is obliged to make good that loss turns on whether MESO is obliged to indemnify A-Civil in respect of the back-charge s or liquidated damages on the proper construction of the indemnities in the subcontract. Clause 3.2(b) of the subcontract provide s : “The Subcontractor must indemnify A-Civil against any Claim or Damages suffered or incurred by A-Civil arising out of or in connection with any breach by the Subcontractor of its obligations under the Agreement.” A further indemnity is provided by MESO in cl 10.11 of the subcontract : “10.11 Subcontractor’s Indemnity (a) The Subcontractor is solely liable for and indemnifies and holds harmless A-Civil against all Claims and Damages that A-Civil may sustain or incur (including any liability A-Civil may have to any third party, including the Principal) arising out of, whether directly or indirectly, in connection with: (i) any breach by the Subcontractor of the Agreement; (ii) any negligent or wrongful act or omission of the Subcontractor, … Consultant, or their personnel in connection with this Agreement; … (viii) any act, omission or default of the Subcontractor … or any of their … employees or agents. (b) The Subcontractor's liability to indemnify A-Civil will be reduced proportionally to the extent that A-Civil caused or contributed to the Damages. (c) … It is not necessary for a Party to incur expense or make any payment before enforcing a right of indemnity conferred by this Agreement …” A-Civil contended that the back-charge s were a “ Claim ” , which was expansively defined in cl 2.1: “‘ Claim ’ means (as the context permits) any and all past, present or future, actual or contingent actions, allegations, causes of action, charges, claims, complaints, costs, damages, debts, demands, disputes, dues, expenses (including without limitation, all solicitors’ fees and costs), injunctions, judgments, liabilities, losses, notices, obligations, orders (including orders as to costs), promises, remedies, rights, specific performance, suits, sums of money, verdicts, writs, or proceedings of every or any kind, name, nature and description, whatsoever, in law or equity, whether present, unascertained, immediate, future, direct or contingent, liquidated or unliquidated, known or unknown, which any party has had, now or might have or might assert in the future, including the Parties’ conduct both prior and after entering into this Deed, in connection with or arising in any way from the Agreement, the Contract Documents and the Works, including but not limited to any amounts owing or alleged to be owing with respect to the Works, whether or not the facts, matters or circumstances giving rise to each or any such claims are known to that party or any other person, whether involving a third party or a party to the Agreement, at the date of this Agreement including those arising: (a) at statutory and common law or in equity; (b) under or for breach of statute including the Competition and Consumer Act 2010 (Cth); (c) in tort for negligence or otherwise, including negligent misrepresentation; (d) for contribution or indemnity at common law, equity or under statute; (e) in contract whether for breach or for an entitlement under a contract; (f) for unjust enrichment including quantum meruit ; and (g) in any other way.” MESO did not cavil with the proposition that the Payment Schedule was a “ Claim ” but submitted that A-Civil ’ s reliance on cl l 3.1 and 3.2 was misconceived , where A-Civil had not sought to identify or prove any breach of these clauses. The fact that the D ate for Substantial Completion was not achieved did not prove that, when or how MESO failed to complete the work diligently, without delay and with due expedition. T he indemnit y w as said to be triggered on MESO ’ s breach of contract and its liability was reduced to the extent that A-Civil contributed: cl 10.11(b). Th at sub-clause must apply to c l l 3.2(b) and 3.4(c) , otherwise it would have little work to do. I accept MESO ’ s submission that it is necessary to establish that the back-charge s or liquidated damages arise from MESO ’ s breach of the subcontract , at least in respect of the indemnities given by MESO in cl 3.2(b) and cl 10.11(a)(i) . The same requirement to establish a breach by MESO is not present in the indemnities given in cl 10.11(a)(i i ) or (viii). Those sub-clauses do require, however, that there is a “ negligent or wrongful act or omission ” on the part of MESO, or an “ act, omission or default ” . That is , MESO ’ s obligation to indemnify A-Civil is not at large but depends upon MESO failing in some way to attend to its obligations under , or duties arising out of , the subcontract . The connection between MESO ’ s breach of the subcontract / negligence / act or omission and the Claim does necessarily need to be direct, but “ arising out of or in connection with ” such breach (cl 3.2(b)) or “ arising out of, whether directly, or indirectly, in connection with ” such breach (cl 10.11(a)(i)). The expression “ arising out of ” generally requires an element of cause or consequence, but not a direct or proximate relationship that might be required by the words “ caused by ” : State Government Insurance Commission v Stevens Brothers Pty Ltd (1984) 154 CLR 5 5 2 at 555, 559 (Murphy, Wilson, Brennan and Deane JJ); [1984] HCA 32 . The words “ in connection with ” are “ capable of describing a spectrum of relationships ranging from the direct and immediate to the tenuous and remote ” , but “ do not require a causal connection between the matters said to be connected ” : CSR Ltd v Adecco (Australia) Pty Ltd [2017] NSWCA 121 at [210] (McColl, Macfarlan and Simpson JJA) and the authorities cited there . The phrase has been described as “ ambulatory words ” covering a variety of relationships between the specified subjects: R v Khazaal (2012) 246 CLR 601; [2012] HCA 26 at [31] (French CJ). But I do not accept MESO ’ s submission that MESO ’ s liability is reduced to the extent that A-Civil contributed to that liability . Clause 10.11(b) provides that MESO ’ s liability to indemnify A-Civil will be reduced proportionately to the extent that A-Civil caused or contributed to the Damages . That term is separately defined in the subcontract as follows: “‘ Damages ’ means liabilities, expenses, losses, damages (including, but not limited to, legal costs on a full indemnity basis (whether incurred by or awarded against a Party) and consequential and indirect losses and damage including: (a) loss of revenue, profits or savings (actual or anticipated); (b) loss of contracts or opportunities; (c) loss of, or damage to, goodwill or reputation; (d) loss arising from damage to credit rating or increased financing costs; (e) loss of data or corruption of data; (f) loss arising from business interruption or loss or damage resulting from wasted managed time; and (g) any indirect, special, economic, incidental or consequential loss or damage, howsoever arising, whether based in contract (including under any indemnity), in tort (including negligence), in equity, under the provisions of any law or otherwise, arising out of any third-party claim;” W hat A-Civil seeks indemnity for in this case is a Claim, not Damages. I t makes sense that the contracting parties agreed to apportion liability in respect of Damages, which involves a Claim being determined and result ing in an award of damages . I t is not obvious why the parties would agree to apportion a Claim, which is yet to be determined and for which no damages may be sought. Presumably , that is why cl 10.11(b) does not refer to a Claim. The next question is whether the back-charge s or any claim for liquidated damages fall within the scope of the indemnities, such that a declaration should be made that MESO is obliged to indemnify A-Civil in respect of such claims in the event that Paynter Dixon seeks to recover those amounts. Back-charge BC02 BC02 was $365,514 and described as follows: “ Costs associated with [Paynter Dixon] completing a portion of the Concrete Pump, Steel fixing and Formwork for the RC shoring walls which forms part of A-Civils contracted works. [Paynter Dixon] have issued multiple correspondence to A-Civil stating that they are falling behind programme and if these works were not completed by a set date that [Paynter Dixon] would engage an alternative subcontractor to complete the works and seek to recover any additional costs.” The “ comments ” part of the payment schedule noted, “ Work in progress as not all the contract RC walls are completed. Refer to the attached schedule and Capital form claims (alternative Subcontractor that [Paynter Dixon] engaged to complete the works) for details. Works omitted from your contract are pursuant to clause 16 & 17.8 of your signed contract agreement. ” In support of the back-charge, Paynt e r Dixon provided six invoices from Capital Form Pty Ltd for work completed together with relevant emails and plans , with shoring wall markups distinguishing between areas completed by A-Civil and areas completed by Capital Form. As to contractual provisions referred to in the “ comments ” part of the P ayment S chedule , c l 16 of the head contract concerned variations. Under cl 16.1(a), Paynter Dixon “ may at any time direct ” A-Civil to carry out a variation. Clause 16.1(g) provided that, if a variation omitted any part of the works, “ Paynter Dixon may have that work carried out by a third party or may carry that work out itself ” . Clause 16.3 provide d for valuation of a variation. Where the variation involve d decreased or omitted work, cl 16.3( c )(ii) provided that “ if the rates or prices set out in the Schedule of Rates are not applicable, the Paynter Dixon Representative will determine … a reasonable amount (including an amount for off-Site overhead and profit) ” . Clause 17.8 of the head contract provided: “ 17.8 Set-off Without limiting any other right under the [head contract] or otherwise at law, the Paynter Dixon Representative may: (a) deduct from or set-off against, any amounts due to [A-Civil] under the [head contract] or otherwise at law, or under any other contract between [A-Civil] and Paynter Dixon; or (b) have recourse to Security provided by [A-Civil] under the [head contract] , or provided by [A-Civil] under any other contract between [A-Civil] and Paynter Dixon, for amounts, Losses, costs, claims, expenses or damages which; (c) [A-Civil] is liable to pay under the [head contract]; (d) the Paynter Dixon Representative believes that Paynter Dixon has suffered, or is likely to suffer in the future, as a result of a breach of the [head contract] by [A-Civil] , or any negligent act or omission by [A-Civil]; or (e) [A-Civil] is required to pay to Paynter Dixon, or is likely or will likely to be required to pay to Paynter Dixon, arising out of or in connection with the [head contract] or any other contract between [A-Civil] and Paynter Dixon. This subclause will survive termination of the [head contract] .” Nasser Matta said that , a fter the C OVID -19 construction lockdown, the project site was reopened for works but MESO had committed its crews to work elsewhere. Ultimately Paynter Dixon engaged another subcontractor to complete reinforced shoring walls that MESO was supposed to complete, but did not. That does appear to be what happened. A-Civil submitted that $365,514 was substantiated by the invoices issued by Capital Form, and the liability for same arose under cl 17.4 of the contract. It did not matter that MESO later reduced its claim for payment on the basis that it did not perform these works; that ‘ credit ’ does not answer the claim of A-Civil for indemnity. M ESO ’ s failure to complete the works was a breach of the subcontract and put A-Civil in breach of its contract with Paynter Dixon. MESO submitted that these costs were wildly excessive as compared to the costs of A-Civil and MESO to complete the works under their contracts. That these costs were more than double what A-Civil would have charged for these works could not be attributed to establishment costs of having a new contractor carry out the works , as Capital Form was already on site. Paynter Dixon was said to have both deducted the value of A-Civil ’ s cost to complete the work and back-charge d A-Civil in the amount of the alleged cost to complete. This would mean that P aynter Dixon got the walls for free. While MESO accepted that it requested steel fixers to assist it on 10, 11, 20 and 21 September 2021 and 7 October 2021, the remaining attendances by Capital Form on 2 September 2021, 19, 25, 26 and 29 November 2021, 2, 15 and 21 December 2021 and 25 January 2022 were said to be not caused by MESO. MESO was not on site on 2 September 2021 because it had suspended the Works under s 27 of the Building and Construction Industry Security of Payment Act . MESO was not liable for any loss or damage suffered by A-Civil as a consequence of MESO not carrying out work during the period of suspension: s 27(3) of the Building and Construction Industry Security of Payment Act . On 19 October 2021, MESO was not onsite because it had been instructed by Paynter Dixon and A-Civil to stand down from 19 October 2021 indefinitely. (I do not accept this . ) Paynter Dixon was required to engage Capital Form to carry out RC Wall Works in November and early December 2021 because A-Civil did not pass on Paynter Dixon ’ s directions to do works in November until after the deadlines imposed by Paynter Dixon . (I do not accept this either . ) MESO did not carry out works on 25 January 2022 because A-Civil did not instruct MESO to do so. (Where MESO had been taking instructions from Paynter Dixon directly for some time, it is unclear why MESO needed instructions from A-Civil directly again. More likely, MESO was engaged on other projects elsewhere and had no interest in returning to site.) The only question that I need to answer is whether this back-charge arises out of or in connection with any breach by MESO of its obligations under the subcontract. And it clearly does. MESO was obliged to perform this work under the subcontract and did not do so. That was not because A-Civil gave a direction for MESO to stand down, or failed to give a (self-evident) direction that MESO should continue its work. It was because MESO diverted its equipment and manpower from the Parramatta RSL work site during the C OVID -19 lockdown and, on resumption of work on site, struggled to re-divert its equipment and manpower back to th e site again. Paynter Dixon and A-Civil tried for some time to use MESO to complete this work, but were unsuccessful. Paynter Dixon engaged another subcontractor, having given fair warning that that was what it was going to do. It may be that the back-charge is excessive. It is not necessary for me to fix a precise quantum for this back-charge , including because such a determination will not bind Paynter Dixon. But this back-charge is certainly a Claim “ arising out of or in connection ” with a breach by MESO of its obligations under the subcontract. Should Paynter Dixon ever pursue this back-charge , then MESO is obliged to indemnify A-Civil against th e Claim. Back-charge BC03 BC03 was $13,589.31 and described as follows: “ Costs associated with [Paynter Dixon] completing the starter bars for the RC shoring walls which forms part of A-Civils contracted works. [Paynter Dixon] have issued multiple correspondence to A-Civil stating that these works form part of their contract works. A Civil failed to action these works ther[e] fore, [Paynter Dixon] completed the works so as not to further delay the project. [Paynter Dixon] now seek to recover any additional costs associated with completing A Civil’ s contract works. Installation of Dowels to the Slab wall connection.” The “ comments ” part of the payment schedule noted, “ Work in progress as not all the contracted starter bar works to the RC walls are completed. Refer to the attached schedule and material / labour invoices for details. Refer to attached shoring wall drawings (S0625/T1 & S0626/T1) which detail the connection point. Please refer to the signed scope of works (item 6 ( w ) ) which details the starter bar works. Works omitted from your contract are pursuant to clause 16 & 17.8 of your signed contract agreement. ” Paynter Dixon provided supporting invoices for tools and injectable mortar, together with labour hire. In addition, relevant emails were provided , together with a marked-up Paynter Dixon scope of works related to perimeter walls and starter bars and structural drawings of walls. A-Civil submitted that this formed part of A-Civil ’ s scope of works under the contract and was part of MESO ’ s Works under the subcontract, being required under the For Construction drawings prepared by Meinhardt and referred to in Annexure M. Mr Mostafiz ’ email of 23 June 2021 did not change this. He there noted that cog bars were excluded and not part of the design , in particular, in answer to a proposed deletion by M ESO of parts of the A-Civil scope of works under the c ontract with Paynter Dixon . Mr Mostafiz also stated that , as the s ubcontract was to be “ back-to-back ” , nothing was to be crossed out. As such, the subcontract maintained the full scope of works. A-Civil submitted that it engaged with Paynter Dixon to determine whether it was possible to change the Meinhardt design to allow for an alternate methodology that would work better with MESO ’ s aluminium shutter formwork. Ultimately, and despite procuring an alternative design, Paynter Dixon determined not to amend the design, leaving A-Civil and MESO with the agreed scope of works. As MESO did not carry out the work to install the L bars, Paynter Dixon engaged alternate contractors. In circumstances where A-Civil ha d now incurred a liability to Paynter Dixon in respect of BC03, it was entitled to be indemnified by M ESO for same. MESO submitted that t he installation of starter bars for the concrete walls was within A-Civil ’ s scope of works but was not a part of M ESO ’ s scope of works. MESO ’ s contractual obligations in relation to the starter bars is one of the messier elements of the contractual relationships between the parties. Mr Orr ’ s objection to this element of the scope of work s was raised early and often. A-Civil pressed Paynter Dixon to have the work performed in the manner suggested by Mr Orr . Paynter Dixon does appear to have tried to accommodate Mr Orr , including paying for a r e design to allow MESO to deploy its usual methodology. But the S cope of W ork s is to be found in the subcontract as executed. The subcontractor was obliged to carry out and complete the Works: cl 3.2. Annexure A, Item 1 included a brief description of Works as follows: “ Foundation piling works (Scope of Works – Annexure J and / or Annexure M).” Annexure J was not used. As such, MESO ’ s scope of works was defined in Annexure M. This included Item 23, which was identical to Item 6(w) in the head contract: see [ 64 ]. Under this Scope of Works, MESO was obliged to undertake this work. The problem is that there is an inconsistency between the Scope of Work s in Annexure M and the Scope of Work s in Annexure N. The inconsistency arises because Annexure N was a redundant copy of the head contract, which had been submitted by A-Civil to Paynter Dixon four months earlier with proposed amendments, but not accepted. This confusion is also resolved by the subcontract. Clause 2.1 of the Formal Instrument of Agreement lists the Contract Documents in their order of precedence, where the Head Contract ranks above Annexure M. Should the Contract Documents contain inconsistencies, these are to be resolved by reference to this order of precedence: cl 2.5. By cl 4 of the Formal Instrument of Agreement, MESO acknowledged that the terms and conditions of the head contract between A-Civil and Paynter Dixon would have ‘ back-to-back ’ application to the subcontract; MESO agreed to be bound to A-Civil “ by the like obligations ” by which A-Civil was bound to Paynter Dixon under the head contract. As such, the Scope of Works in the head contract at Annexure N had precedence over the Scope of Works in Annexure M. The fact that the redacted head contract at Annexure N included amendments which had not been accepted by Paynter Dixon did not, I think, change MESO ’ s obligations under the subcontract. T he subcontractor could only agree to be bound to A-Civil by the back-to-back application of the head contract which it had seen, as annexed to the subcontract. As such, failure to complete this work was a breach of A-Civil ’ s obligations under the head contract, but was not a breach of MESO ’ s obligations under the subcontract. As this back-charge does not arise out of or in connection with any breach by MESO of its obligations under the subcontract, MESO is not obliged to indemnify A-Civil against any Claim in respect of this back-charge . Back-charge BC12 BC12 was $44,427 and described as follows: “ Ramification ( sic ) cost to shoring wall collapse caused by A-Civil. Worked completed: 1. asphalt works to rectify the footpath as a result of the collapsed shoring wall. 2. Pedestrian control required to direct foot traffic due to dangerous ground conditions. c ontrol was required 24/7 until the rectification works complete. [Paynter Dixon] are only seeking to recover the night costs , as day costs are part of our contract works. ” The “ comments ” part of the payment schedule noted, “ The sheet wall moved and caused footpath to sink, this was a safety matter created by the sheet pile wall not reaching adequate rock strength. Associated costs of monitoring, safety, Traffic control, rectification apply. Refer to the attached for details on the cost break-up. [ R ] efer to the attached photos for details of the wall movements and damaged caused. Works omitted from your contract are pursuant to clause 16 & 17.8 of your signed contract agreement. ” In support of this back-charge, Paynter Dixon provided invoices from EI Australia for site visits on 15 and 22 September 2021 for inspection of footpath settlement together with invoices for traffic controllers, asphalt works, photographs of the footpath collapse and a traffic management plan. Mr Mostafiz explained that BC12 included costs incurred by Paynter Dixon to Renville Contractors Pty Ltd , which was for rectification work to the footpath. He said that MESO did not install the sheet piles in accordance with the design . While he asked Mr Orr to organise rectification works in September 2021, and followed him up, MESO did not do so notwithstanding that the sheet pile shoring system was designed and installed by MESO. A-Civil submitted that BC12 arose directly out of a need to manage the consequences of MESO ’ s failure to construct Wall 5 in accordance with the approved design or functional requirements. The temporary shoring system was designed by MESO together with its engineering company, Met A us . The A s- B uilt sheet piles for Wall 5 did not match the design. Mr Mostafiz ha d prepared a side-by-side comparison, which demonstrate d the relative shallowness of a number of the sheet piles that ha d allowed subsidence and caused a loss of support and damage to the footpath. H is evidence was not challenged. George Matta g a ve evidence as to why A-Civil could not have been the cause of the subsidence and h is evidence was not challenged either . MESO submitted that it had not been proved that the footpath collapse was caused by its “ failure, neglect and refusal ” to carry out the Works in accordance with the subcontract. There were a number of possible causes. On 15 September 2021, the design engineer found that the third-row anchors on sheet piles 90, 92 and 94 had been “ damaged ” and “ one anchor appeared to be heavily damaged ” . 18 The day before, Mr Orr observed that “ it also looked like one of the anchors has been caught with a bucket when it was being excavated or something and reefed it ” . On the same day, Paynter Dixon emailed representatives from EI Australia , A-Civil and Meso stating “ we are unsure how long [the affected anchor] has been failed or hit ” . 18 ( emphasis added) There was no evidence that ma d e it more probable that the anchor had “ failed ” as opposed to being “ hit ” or “ damaged ” . MESO submitted that, in any case, contrary to the assertions of Paynter Dixon and A-Civil, the geotechnical engineer did not express the opinion that the footpath collapse was caused by a “ failed ” anchor. The geotechnical engineer expressed the opinion that “… the movements and settlements of the footpath behind the sheet pile walls is likely due to loss of the fill and soil material through the gaps between the sheet pile wall toe and the weathered shale beneath, which was also compounded by the build-up of water behind the sheet pile overtime. The geotechnical engineer did not explain how “ likely ” it was that the footpath collapse was “ due to loss of the fill and soil material through the gaps between the sheet pile wall toe and the weathered shale beneath ” . Nor did he express an opinion as to what created the “ gaps ” between the sheet pile wall toe and the weathered shale beneath. EI Australia had previously expressed the opinion that gaps between the sheet pile and the rock on W all 5 had been created by the method of excavation . T here was no evidence to suggest that the footpath collapse would not have been avoided had the geotechnical engineer ’ s recommendations of 1 September 2021 been implemented. MESO submitted that one of the expenses in BC12 was the cost of Renville Contractors to carry out “ Asphalt Works ” . Those works were originally undertaken by A-Civil on 30 September 2021 but it then “ abandoned the site ” . On 9 October 2021, Renville Contractors were engaged to rectify A-Civil ’ s footpath rectification works, according to Paynter Dixon ’ s site diary. A significant amount of the costs claimed under BC12 did not relate to rectifying the footpath collapse but instead related to rectifying A-Civil ’ s defective work in attempting to rectify the footpath collapse. ( This submission, which was largely assertion, does not deal with the problem that the footpath may not need to have been rectified in the first place but for the suggested deficiencies in MESO ’ s design and construction of Wall 5 below it. ) There is no dispute that the design and construction of Wall 5 was the responsibility of MESO. In order for MESO to be obliged to indemnify A-Civil in respect of this back-charge , it is necessary to be satisfied that the back-charge arises out of or in connection with a breach by MESO of the subcontract or a “ negligent or wrongful act or omission ” or an “ act, omission or default ” . I d id not have the benefit expert evidence on this subject. I did have contemporaneous records, which indicate that concerns were raised about the design of Wall 5 at the outset by JC Geotechnics . These concerns were addressed by MESO ’ s engineer, MetAus, shortly before the sheet piles along Wall 5 were installed. Once installed, JC Geotechnics identified problems immediately, on 3 February 2021. Queries were raised with MESO ’ s design, and answered by MetAus. Mr Orr does not appear to have had much time for JC Geotechnics and engaged another geotechnical engineer “ to remove JC Geotechnics from the equation ” . EI Australia was engaged, apparently, to provide an alternate view. But the problems with Wall 5 did not go away. EI Australia inspected Wall 5 a number of times and made a series of recommendations. Cracks and subsidence in the footpath above Wall 5 were noticed and actioned on three occasions . Wall 5 had to be repaired, supplemented by a further row of anchors, rock bolts added and, after the footpath significantly subsided in September 2021, the addition of shotcrete. It may be that one to three anchors were damaged at that time, but query whether that would have made a difference to the stability of Wall 5 , where there were then three rows of anchors in place. Critical to th e question of breach is, I think, Mr Mostafiz ’ s evidence . He review ed the sheet pile design and the A s- B uilt shop drawings when problems had emerged and observed that the sheet piles were not installed in accordance with the design. Mr Mostafiz has a Bachelor of Science (Civil Engineering) and has worked in the construction industry for some 20 years. He was qualified to under take th is task and form th is assessment . Mr Mostafiz ’ s comparison indicate s that MESO drilled less length of steel and anchor than what they had allowed for in their final design. I can see from the photographs of the base of Wall 5 that the area where sheet was to be installed, but was not, broadly corresponds with where weak shale substrata was found and where gaps between the bottom of the sheet and the substrata emerged. I do not think that I need an expert report to be satisfied that the failure to install the sheet and anchors in accordance with MetAus ’ design likely contributed to the slumping of the footpath above. The subcontractor agreed to perform the works in a proper and workmanlike manner with due skill, care and diligence: cl 3.18(a)(iv). T he simple fact that MESO did not comply with the design of its engineer is itself, I think, a breach of the subcontract, a negligent act or omission, or an act, omission or default such that the indemnity applies. Back-charge BC17 BC17 was $161,829.70 and described as follows: “ The supply of the concrete and reinforcement to the RC shoring walls are part of A-Civils contract works. As agreed Concrete and Reinforcement supplied by PDC for shoring wall. Contract works omitted from A-Civil. Refer to e-mail dated 12/11/21 from Jamie Vlatko ([Paynter Dixon]) to Nasser Matta (A Civil) confirmed the supply rates.” The “ comments ” part of the payment schedule noted, “ Work in progress as not all the contract RC shoring walls are completed. Refer to the attached for details on the cost break-up. $89,195.7 Concrete $72,634 Reinforcement. Works omitted from your contract are pursuant to clause 16 & 17.8 of your signed contract agreement. ” Paynter Dixon provided invoices rendered by Hans o n to Paynter Dixon for the supply of concrete together with Mesh & Bar invoices for steel reinforcement bars. Mr Mostafiz agreed that some of the invoices rendered by Mesh & Bar had nothing to do with the work carried out by MESO, but were for pile rectification. A-Civil submitted that the supply of materials was part of MESO ’ s Works under the subcontract. The $1.4 million contract price included an allowance for the supply of materials. While Mr Orr cavilled with this proposition, there was said to be no logical basis for the system of negative variations unless it were the case. A-Civil agreed to procure concrete and steel for MESO to use, with a credit to be given “ [ a ] s per invoice[s] from suppliers ” . Mr Orr ’ s practice was to apply a credit to its payment claims for such concrete and steel. From October 2021, Paynter Dixon took over the supply of concrete and steel for MESO ’ s use on site. Mr Orr accepted as much. BC17 was substantiated by two bundles of invoices issued by Hanson (concrete) and Mesh & Bar (steel). While Mr Orr said he had accounted for the supplies by A-Civil and Paynter Dixon in the final payment claim, being a credit of $262,216.96, that could not be correct. A-Civil supplied $106,977.37 in steel and $116,251.50 in concrete. Paynter Dixon supplied $161,829.70 worth of concrete and steel. MESO submitted that it had allowed for the supply of concrete and reinforcement by way of negative variations. Some of the concrete claimed by Paynter Dixon was for the wrong design code and did not use the rate agreed between MESO and A-Civil. Nor did A-Civil delineate between the concrete used for columns (not within M ESO ’ s scope) and the concrete used for walls. The only question that I need to answer is whether this back-charge arises out of or in connection with any breach by MESO of its obligations under the subcontract. I do not need to determine the correct quantum of the back-charge . That determination will not bind Paynter Dixon and can be determined should Paynter Dixon ever pursue th e back-charge . T his back-charge is a Claim that falls within the scope of the indemnities. The subcontractor was obliged to carry out and complete the Works: cl 3.2. The Works included: (emphasis added) “…the whole of the work to be executed and carried out and completed for the Project on the Site by the Subcontractor in accordance with the Contract Documents ( including any design and the supply of all materials ) as briefly described in Annexure A, Item 1 … and any other documents, work, design and supply of materials not described in the Contract Documents relevant to those matters if that other work: (a) should reasonably have been anticipated by an experienced and competent Subcontractor as being necessary for the carrying out of the Works described in the Contract Documents; or (b) was otherwise capable of inference from the Contract Documents.” A-Civil and, later, Paynter Dixon arranged for the supply of materials to the site and Mr Orr then gave a ‘ credit ’ in MESO ’ s subsequent payment claim to allow for this. When Paynter Dixon took over this task, the fact that it had done so and the prices at which it was obtaining these materials was provided to Mr Orr. It does not really matter why this arrangement was established. The fact is that MESO was obliged, under the subcontract, to supply all materials for the Works. That MESO did not supply all materials itself was a breach of the subcontract. Should Paynter Dixon ever pursue this back-charge , then MESO is obliged to indemnify A-Civil against the Claim. Back-charge BC19 BC19 was $184,744 and described as follows: “ Estimate cost to complete the RC shoring walls. Refer to the mark-up drawings in folder BC02 and estimated break-up of costs.” There were no “ comments ” . Mr Mostafiz agreed that BC19 was an estimate and Paynter Dixon never provided a definitive amount. A-Civil submitted that MESO was in breach of its obligation under cl 3.2 of the subc ontract to carry out and complete the works and was obliged to indemnify A-Civil in respect of the liability it has incurred to Paynter Dixon as a result of that failure to complete. Its liability for same was said to follow from MESO ’ s liability for BC02. MESO submitted that it had already included a negative variation for the cost to complete these works in its final payment claim . Paynter Dixon ’ s estimate include d rates higher than those agreed as between A-Civil and MESO. Nor was there a contractual obligation to pay “ estimated ” costs to complete. Even if there was, the RC Wall Works ha d since been completed and the actual costs to complete should be known. For reasons already given in respect of back-charge BC02, MESO is obliged to indemnify A-Civil against the Claim should Paynter Dixon ever pursue this back-charge . Liquidated damages claim by Paynter Dixon Paynter Dixon has not sought liquidated damages from A-Civil “ so far ” . Should Paynter Dixon do so, then cl 5.1(b)(ii) of the subcontract provides that, if MESO ’ s failure to complete the Works on time results in A-Civil becoming liable to Paynter Dixon, including for liquidated damages, then MESO, “ in addition to its obligations under Clause 5.1(b)(i) ” , indemnifies A-Civil for same. If Paynter Dixon makes such a claim, then MESO is obliged to indemnify A-Civil to the extent that the liquidated damages sought are referable to MESO ’ s failure to complete the Works on time . Charges It is convenient to next deal with whether MESO is obliged to pay various charges which A-Civil says it is entitled to be paid the sub contract. A-Civil contends that MESO was in breach of its contractual obligations, including to execute the Works with high standards of care, skill and competence, to fully and completely execute the Works and to fabricate, deliver and install materials in accordance with Contract Documents. By reason of MESO ’ s failure to perform these obligations, A-Civil seeks to recover the following amounts. Charge CR03 A-Civil claims $106,977.37 for the cost of steel supplied by A-Civil for MESO ’ s work. For the same reasons as given in respect of back - charge BC17, MESO is obliged to pay A - Civil for materials which MESO was obliged to supply in relation to the Works but which A-Civil supplied on its behalf: cl 2.1; 3.2, subcontract . Whilst Mr Matta and Mr Orr initially agreed to fix the price for these materials when preparing A - Civil’s tender, that arrangement was changed to on - charging the cost of materials , “As per the invoice from the supplier ”: see [ 83 ], [ 84 ] . A-Civil is entitled to be reimbursed for the cost of the steel. MESO gave 'credit s ’ for the supply of steel , but at the initially agreed fixed price. That 'credit’ was factored into the amount which was paid following the adjudication determination , that is, A-Civil has already had the benefit of this ‘credit’ . I will consider the nett amount payable, if any, at the conclusion of this judgment, to avoid ‘double counting’. Charge CR04 A-Civil claims $161,251.50 from MESO for concrete supplied by A-Civil for MESO ’ s work. As for Charge CR03, A - Civil is entitled to be paid for concrete at the price invoiced by the supplier, rather than the fixed rate originally agreed for the purposes of the tender. MESO has given a 'credit’, which was factored into the adjudication determination . I will consider the nett amount payable, if any, at the conclusion of this judgment, to avoid ‘double counting’. Charge CR05 Charge CR05 relates to the costs of A-Civil rectifying the shoring wall adjacent to the damaged footpath, by the application of shotcrete. A-Civil claims $10,619.92 from MESO for rectification work on Wall 5 in accordance with the advice of the geotechnician. Nasser Matta understood that MESO carried out defective works. A-Civil organised rectification and carried out that rectification in accordance with the geotechnical advice. Mr Mostafiz said the shotcrete that was done by A-Civil should have been done by MESO. Mr Orr said that MESO was never informed of any defects with the shoring system or asked to remediate the shoring system. MESO submitted that A-Civil had not adduce d any evidence to substantiate that it incurred any costs. I do not accept Mr Orr ’ s evidence that MESO was never informed of any defects with the shoring system o r asked to remediate that system. Paynter Dixon and A-Civil brought problems with Wall 5 to MESO ’ s attention on a number of occasions, asking what MESO was going to do to rectify the problem. There was evidence to substantiate that A-Civil incurred these costs. Mr Mostafiz said that A-Civil carried out the shotcrete works recommended by EI Australia on 23 September 2021. He prepared a table setting out how the figure had been calculated, supported by invoices from EI Australia, Ausreo and Hanson. In addition, Mr Mostafiz included the hire of shotcreting equipment and labour hire (two people for nine hours each). For the same reasons as given for back-charge BC12, I conclude that MESO is obliged to pay this charge, as it relates to defective work done by MESO. Liquidated damages The next question is whether A-Civil is entitled to liquidated damages from MESO . As pleaded, A-Civil sought liquidated damages from the Date for Substantial Completion to 23 November 2022. I take the latter date to have been selected as it was when these proceedings were commenced. In its closing submissions, however, A-Civil reduced its claim to $270,000 , by calculating liquidated damages to the date of MESO ’ s last payment claim only. Nasser Matta said that, although MESO claimed that it had completed all of the Works by the 30 May 2022 payment claim, A-Civil gave no Certificate of Substantial Completion to MESO, nor did MESO request such a certificate under cl 5.2 of the General Conditions. Nor did A-Civil receive any notices of delay from MESO as required by cl 5.1(c) of the subcontract, nor did A-Civil receive any extension of time claims from MESO. Nor did MESO complete the Works to the stage of Substantial Completion, either on the Date for Substantial Completion of 1 September 2021 or at all. MESO did not suggest otherwise. Contractual provisions Clause 5 of the General Conditions concerned MESO ’ s obligation to complete the Works in a timely manner. Clause 5.1(b)(i) provided: “(b) If the Subcontractor fails to bring the Works to Substantial Completion by the Date for Substantial Completion of the Works (as adjusted by A-Civil in accordance with Clause 5.7 [extensions of time]) then: (i) if required by A-Civil the Subcontractor shall pay or allow by way of liquidated damages the sum stated in Annexure A, item 7 for each calendar day after the Date for Substantial Completion of the Works to and including the Date of Substantial Completion;” The Date for Substantial Completion was specified in Annexure A, i tem 5, being 1 September 2021. The liquidated damages w ere $1,000 per calendar day: Annexure A, i tem 7. Clause 2.1 defined “ Substantial Completion ” as follows: “‘ Substantial Completion ’ means in the opinion of A-Civil the stage in execution of the Works when the following are all fulfilled: (a) all tests required under the provisions of this Agreement or the Contract Documents have been satisfactorily completed; (b) the Works have no Defects are complete and fit for use or occupation; (c) A-Civil has achieved completion under the Head Contract (within the meaning of Completion under the Head Contract) and this is expressed in writing by the Principal to A-Civil; (d) all documents and other information referred to in the Contract Documents, including: (i) all approvals, guarantees, warranties and certifications, which are required for the use, operation and maintenance of the Works; (ii) suitable design, maintenance manuals, operating instructions and as-built plans for the completed Works; and (iii) to the extent that A-Civil requests in writing from the Subcontractor, the Client Supplier Deed of Warranty, the Subcontractor Warranty and the Deed of Adherence and Warrant, have been supplied to A-Civil. (e) removal of all temporary buildings, plant, tools, materials and goods, building debris and surplus material from the Site, the Works and any adjoining areas, have been completed; (f) the Site is clean, including cleaning the interior surfaces and vacuuming the soft surfaces for which the Subcontractor is responsible; (g) the benefit of all warranties and guarantees obtained by the Subcontractor or to which the Subcontractor is entitled to in respect of materials and goods supplied and used in the Works, has been transferred to A-Civil; (h) the Subcontractor has done everything that this Agreement requires it to do as a condition precedent to Substantial Completion; (i) any Audit Outcome is completed in accordance with Clause 8.4 of this Agreement; and (j) any other things required by the Agreement to achieve Substantial Completion has been done to the satisfaction of A-Civil.” Further, “ Date of Substantial Completion ” meant “ the date evidenced in a Certificate of Substantial Completion as the date upon which Substantial Completion was reached ” : cl 2.1. “ Certificate of Substantial Completion ” meant the certificate issued or to be issued under cl 5.2: cl 2.1. No such certificate was issued here. Clause 5.2 set out the process by which Substantial Completion was reached, including MESO giving A-Civil notice of a date upon which the subcontractor anticipated that the Work would reach Substantial Completion, followed by A-Civil ’ s inspection of the Work and so on. This did not happen either. Clauses 5.7 to 5.9 dealt with extensions of time and notices of delay. Clause 5.1(c) provided that MESO could notify A-Civil of any delay, or likely delay, in executing the Work. Failure to do so disentitled MESO from any Claim arising out of such delay and, as between A-Civil and MESO, “ the delay will be deemed not to have occurred ” . Further, cl 5.11(a) provided: “ 5.11 Liquidated Damages for Delay (a) Notwithstanding Clause 5.1, if the Subcontractor fails to reach Substantial Completion of the Works … on or by the Date for Substantial Completion … , then the Subcontractor must pay to A-Civil by way of liquidated damages, being genuine pre-assessed damages (not a penalty), and being the sum or sums specified in Annexure A, item 7, for every calendar day or proportionate part of a calendar day after the Date for Substantial Completion until the Subcontractor achieves Substantial Completion of the Works … or the date that the Agreement is terminated under this Agreement. ” For completeness, cl 7(d) of the Formal Instrument of Agreement provided that , notwithstanding any other provision in the contract, MESO acknowledged that Substantial Completion would not be certified as being reached by A-Civil until: testing and commissioning required by the subc ontract ha d been successfully completed by MESO to A-Civil's satisfaction; all Design Documents , manuals, certificates, instruments and warranties required by the subc ontract ha d been provided to A-Civil (in a form acceptable to A-Civil); all services and installations perform as required by the subc ontract ha d been completed; MESO ha d obtained all certificates and approvals required by Relevant Legislation before the Works or a part of the Works could be occupied and used for their intended purpose; the Works met the standard required by the subc ontract; and A-Civil ha d achieved completion under the Head Contract . Obviously enough, Substantial Completion did not occur, including because A-Civil did not complete the Works under its contract with Paynter Dixon, albeit largely because MESO did not complete its Works under the subcontract. Finally, cl 2. 4 of the Formal Instrument of Agreement provide d , “ No rule of construction shall apply to the disadvantage of one party on the basis that that party put forward the Contract Documents . ” Submissions A-Civil submitted that MESO sought no extension of time. Nor did MESO reach Substantial Completion on or by 1 September 2021. Rather, on that date, MESO issued a notice under s 27 of the Building and Construction Industry Security of Payment Act indicating that it would suspend works at the expiration of two business days. No suspension actually occurred and the statutory defence under s 27(3) was not pleaded, albeit A-Civil accepted that a few days should be allowed on this account. While MESO asserted that A-Civil prevented MESO from achieving Substantial Completion by three stop work orders and failure to give a direction to complete the balance of the works, this could have been the subject of notice and claim under cl 5. Failure to make such a claim meant that the delay was deemed not to have occurred: cl 5.1(c). Nor was there evidence of any stop work orders or MESO seeking instructions to complete the works. MESO was clearly unwilling and unable to complete the works at the time. A-Civil submitted that, accepting that MESO ’ s liability for liquidated damages was not open ended, A-Civil was entitled to liquidated damages from 2 September 2021 to 30 May 2022, when MESO made a final payment claim stating that the Works were 100% complete. Liquidated damages for this period w ere $270,000. It was submitted that MESO could not benefit from its own wrongdoing, being its failure to complete the Works, to avoid liquidated damages: Mackay v Dick (1881) 6 App Cas 251; Alghussein Establishment v Eton College [1988] 1 WLR 587; Peter Turnbull & Co Pty Ltd v Mundus Trading Co (A/asia) Pty Ltd (1954) 90 CLR 235 ; [1954] HCA 25 ; Bragg v Alam [1981] 1 NSWLR 668 at 673-4 ( Rath J ) , and on appeal (1982) NSW ConvR 55-082; Ruthol Pty Ltd v Tricon (Aust) Pty Ltd [2005] NSWCA 443. A-Civil submitted that t he fact that Substantial Completion was not achieved and the contract was not terminated did not disentitle a party in the position of A-Civil to liquidated damages: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770 at [75]-[77]; Novawest Contracting Pty Ltd v Altona Industrial Centre Pty Ltd [2011] VSCA 104 at [17]; Triple Point Technology Inc v PTT Public Company Ltd [2021] UKSC 29 at [34]-[36]. It was said to be enough that the date for practical completion had passed , without the project being completed. MESO submitted that cl 5.11(a) provided that MESO was liable to pay liquidated damages until MESO achieved Substantial Completion of the Works or the date that the Contract was terminated under the Contract. The Date for Substantial Completion was 1 September 2021, which differed from the "Date for Completion" in the Paynter Dixon contract annexed to the subcontract, which was 1 September 2021 "subject to concrete completion". (The relevance of this was unclear, where the Paynter Dixon contract was not cross-referenced in the operative provisions of the subcontract . ) Substantial Completion was defined in three places: cl l 2.1, 5.2(a) of the General Conditions and cl 7(d) of the Formal Instrument of Agreement. (The relevance of this was also unclear, where these three provisions, as I read them, operate harmoniously and it is not suggested that Substantial Completion was reached under any of these provisions . ) MESO submitted that cl 5.11(a) could only be enlivened if either Substantial Completion was achieved or the Contract was terminated, otherwise there was no end date to the calculation of liquidated damages under cl 5.11. The Works did not reach Substantial Completion. Nor was the contract terminated. Rather, MESO submitted that A-Civil accepted MESO ’ s work by 16 December 2021, being MESO ’ s last day on site. A liquidated damages clause will be interpreted strictly against the party seeking to rely upon the clause, and any non-compliance with the clause will result in liquidated damages being irrecoverable: Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151 at [129] citing Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 at 121. A-Civil was said to have made the forensic decision not to issue a Certificate of Substantial Completion nor terminate the subcontract. Triple Point was said to support MESO ’ s position : at [48], [89]. Alternatively, liquidated damages was only payable until 16 December 2021, as A-Civil gave no further instructions for MESO to return to carry out further work. Consideration The subcontract specified a Date for Substantial Completion of the Works, being 1 September 2021. If the Works were not completed by this date, then the subcontractor was required to pay liquidated damages of $1,000 per calendar day until the subcontractor achieved Substantial Completion or the subcontract was terminated: cl 5.11(a). MESO never achieved Substantial Completion. But A-Civil did not contend that the subcontract had been terminated either. Is A-Civil entitled to liquidated damages where neither of the events described in the contract for when the calculation of such damages ends has occurred? There is surprisingly little authority on the point. Novawest was an application for leave to appeal an interlocutory decision , where the primary judge refused to strike out a claim for liquidated damages . The liquidated damages clause was in similar terms to cl 5.11(a), where the developer was entitled to liquidated damages “ to and including the Date of Practical Completion or the date that the Contract is terminated … whichever first occurs. ” The builder sued for unpaid bills and the developer cross-claimed for liquidated damages, even though the Date of Practical Completion was not then known. The development had not then been completed , nor the contract terminated . As I read Novawest , the project was ongoing. Hargrave AJA (Tait JA agreeing) refused leave to appeal, where the developer had pleaded sufficient facts to establish that at least some liquidated damages was due, notwithstanding that precise calculation of the amount would depend on proper identification of the date of practical completion: at [13]. His Honour rejected the builder ’ s submission that no claim for liquidated damages arose until the works had reached practical completion. A t [17]: “… The contract clearly states that the liquidated damages accrue daily after the date for practical completion until either the date of practical completion or termination of the contract. It is common ground that the contract has not been terminated. Accordingly, there is a continuing cause of action for liquidated damages … until the date of practical completion occurs. The [developer] was not required to wait until practical completion of the works … before mounting its liquidated damages claim. It is enough that the date for practical completion has been passed without the project being completed.” In Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770, Emmett AJA concluded that an adjudicator had made an error of law, proceeding on the basis that the principal was not entitled to liquidated damages until practical completion was achieved or the contract was terminated: at [ 75 ]. His Honour considered , at [76] : “So long as the date for practical completion has passed, liquidated damages accrue. The reference to the date of completion or termination of the Subcontract does no more than fix a final date beyond which liquidated damages cease to accrue.” T here was no dispute on appeal that this was indeed an error of law on the part of the adjudicator : Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) (2016) 95 NSWLR 157; [2016] NSWCA 379 at [22]-[23], [25] ( Basten JA , Macfarlan and Leeming JJA agreeing). Triple Point Technology considered a liquidated damages clause in a software contract, which provided that the software provider was liable for liquidated damages “ from the due date for delivery up to the date [the customer] accepts such work ” . The work was never completed before the contract was terminated. Lady Arden ( Lord Leggatt and Lord Burrows agree ing) concluded that liquidated damages were payable even though the contractor never completed the work and the customer never accepted it. To conclude otherwise would be “ inconsistent with commercial reality and the accepted function of liquidated damages ” , which was to provide a predictable and certain remedy for a particular event being, in that case, delay in completion: at [35]. Further, at [35]- [36]: “… Parties must be taken to know the general law, namely that the accrual of liquidated damages comes to an end on termination of the contract (see Photo Production Ltd v Securicor Transport Ltd [1980] AC 827, 844 and 849). … That is well understood … Parties do not have to provide specifically for the effect of the termination of their contract. They can take that consequence as read. … The territory is well trodden, and the liquidated damages clause does not need to provide for it. Of course, the parties may out of prudence provide for liquidated damages to terminate on completion and acceptance of the works so as to remove any question of their being payable thereafter. But if they do, it is in my judgment unrealistic to interpret the clause as meaning that if that event does not occur the contractor is free from all liability for liquidated damages, and that the employer's accrued right to liquidated damages simply disappears. It is much more probable that they will have intended the provision for liquidated damages to cease on completion and acceptance of the works to stand in addition to and not in substitution for the right to liquidated damages down to termination.” Lady Arden considered that the clause should be construed as meaning that liquidated damages were payable for each day of delay “ up to the date ( if any ) [the customer] accepts such work ” : at [38]. The parties were unlikely to have intended that the right to liquidated damages, once it had accrued, was simply extinguished: at [40]. By contrast, it was “ perfectly natural that the parties should seek to put an end date on the accrual of liquidated damages to prevent a party who had accepted the performance of work from continuing to demand liquidated damages ” : at [41]. On its true construction, the clause provided for liquidated damages if the contractor did not discharge its obligations within the time fixed by the contract, irrespective of whether the customer accepted any works which were completed late: at [48]. While the clause provided an end date for liquidated damages, on acceptance of the works, “ it did not follow that there were to be no liquidated damages if there was no acceptance. To reach that conclusion would be to render the liquidated damages clause of little value in a commercial contract [and to throw] out the baby with the bathwater ” : at [48]. Lord Leggatt added that the liquidated damages clause contained two conditions, being that the contractor failed to deliver the work within the time specified, and that the delay had not been introduced by the customer. If these two conditions were satisfied, then liquidated damages w ere payable from the due date for delivery of the work until when the customer accepted the work: at [89]. Termination of the contract did not affect the liability of the contractor to pay liquidated damages for delay which had already occurred before the contract was terminated: at [91]. To conclude otherwise, being that if the contract was terminated by the customer because of the contractor ’ s repudiatory breach, that then there never was a date when the customer accepted the work and thus no liability to pay liquidated damages, would be inconsistent with both the language and commercial purpose of the clause: at [92]. Returning to the clause in this subcontract, once the Date for Substantial Completion passed, on 1 September 2021, liquidated damages began to accrue at the daily rate of $1,000. MESO did not achieve Substantial Completion of the Works. I reject the submission that A-Civil accepted the works on 16 December 2021, being MESO ’ s last day on site. The Works were incomplete. A-Civil pressed MESO for several weeks to return to the site and progress the Works. A-Civil has not terminated the subcontract either . It has been said that liquidated damages clauses in printed forms of contract must be construed strictly contra proferentem : Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 at 121 (Salmon LJ); followed in Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151 at [129] (McColl JA, Beazley ACJ and Macfarlan JA agreeing). This contract was not on a printed form. The parties agreed that the contract would not be construed to the disadvantage of A-Civil on the basis that it put forward the contract documents: cl 2.5, Formal Instrument of Agreement. As Campbell JA explained in Rava v Logan Wines Pty Ltd [2007] NSWCA 62, “ t he contra proferentem rule is to be used only where the document is otherwise ambiguous, and … is a principle of last resort … Where it is understood in that way, the application of the principle … does not involve preparing a list of all the possible meanings of a clause that the language can bear without breaking, and choosing the meaning that it most favourable to [in that case] the guarantor … Rather, the choice is limited to choosing amongst meanings that are fairly open by reason of the application of other rules of construction ” : at [55]-[56]. The contra proferentum rule may be used whilst “ bearing in mind the fundamental purpose of construction of a document, namely, to ascertain the intention of the parties arising from the document as a whole and reading the document with such background information as was known by all the parties to it ” : at [51], [53]. The commercial purpose of liquidated damages clauses bears repetition. As Lord Leggatt (Lord Burrows agreeing) observed in Triple Point Technology Inc v PTT Public Company Ltd [2021] UKSC 29, liquidated clauses are a “ standard feature ” in major construction contracts, enabling the contracting parties to better manage the risk of delay by limiting “ the contractor ’ s exposure to liability of an otherwise unknown and open-ended kind, while at the same time giving the [principal] certainty about the amount that it will be entitled to recover as compensation ” : at [74]. Similarly, in AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170; [1986] HCA 63 Mason and Wilson JJ noted that liquidated damages clauses provide “ greater certainty by allowing the parties to determine more precisely their rights and liabilities consequent upon breach or termination, and thus enables them to provide for compensation in situations where loss may be difficult or impossible to quantify [and] in a way that avoids costly and time-consuming litigation ” : at 193. The subcontract obliged MESO to complete the Works in a timely manner , but anticipated that the subcontractor may fail in that regard. The liquidated damages clause envisaged that the subcontractor may ultimately fulfill its obligations, albeit late, achieving Substantial Completion of the Works. Otherwise, the subcontractor may not achieve Substantial Completion at all, including by reason of the contractor terminating the subcontract. The clause prescribed an agreed formula to calculate damages in that event, to save the contractor the trouble of proving the actual damages suffered by reason of the subcontractor ’ s delay, and to protect the subcontractor from exposure to damages at large. The reference to the ‘ end points ’ in cl 15.11(a), beyond which liquidated damages is no longer payable, are for clarity and to avoid doubt, where the fact that liquidated damages do not continue to accrue after the work has been complete, or the contract terminated, goes without saying: Triple Point Technology v PTT at [35]; Shade Systems at [23]. The clause does not mean that, if those ‘ end points ’ are never reached, the liquidated damages regime is dissolved and any accrued damages disappear; that would be inconsistent with the language and commercial purpose of the clause: Triple Point at [36], [92]; Shade Systems at [25]. As observed in Onley v Catlin Syndicate Ltd [2018] FCAFC 119, “ It goes without saying that a construction that avoids capricious, unreasonable, inconvenient or unjust consequences, is to be preferred where the words of the agreement permit ” : at [33] (Allsop CJ, Lee and Derrington JJ). As such, t he fact that A-Civil has not terminated the subcontract is not fatal to its claim for liquidated damages. Once the Date for Substantial Completion of the Works passed on 1 September 2021, liquidated damages began to accrue at the daily rate . A-Civil was then entitled to bring an action for such damages, even if the final date beyond which liquidated damages ceased to accrue had not then been fixed: cl 5.11(a); Shade Systems at [22]-[25]; Novawest at [17]; Triple Point Technology . The Works will never reach Substantial Completion. Whether, or when, A-Civil will terminate the subcontract is not known. A-Civil has waived its right to recover liquidated damages post-30 May 2022. But A-Civil is entitled to liquidated damages until 30 May 202 2 , in the sum sought. Unpaid invoices The last question is w hether A-Civil owes MESO for unpaid invoices. By cross-summons, MESO sought some $280,000 said to be owed by A-Civil over five projects. Ultimately, only amounts owing in respect of the Parramatta RSL project and another project in Camelia were pressed. Camelia project A-Civil was asked to tender on a development project in Camelia. The developer was Summer Hill Business Estate Pty Ltd; Charbel (Charlie) Demian was a director of that company. The builder was Linx Constructions Pty Ltd; David Smedley worked for that company. Linx Constructions asked A-Civil to submit a tender for civil and remediation works, including sheet piling and shoring works. In January 2020, Nasser Matta spoke to Mr Orr about MESO potentially carrying out sheet piling and shoring works on the project. He asked Mr Orr to provide a quote. According to Mr Matta, Mr Orr indicated that he would provide a design for his proposed shoring method. But at no time did Mr Orr, or anyone at MESO, indicate that he or the company required or expected to be paid for the design that was provided during the tender process. Mr Matta said that MESO had provided a design for their proposed method on other projects that A-Civil had asked MESO to submit a tender for, including the Parramatta RSL project. From working with MESO on other projects over a number of years, Mr Matta understood that this was part of MESO ’ s business model and process. In February 2020, Nasser Matta emailed a Design Report and Certification for the shoring for the project to the developer and builder. This included MESO shop drawings. On 6 March 2020, Mr Orr provided Mr Matta with a summary page in respect of the estimated costs of constructing in accordance with MESO ’ s design. The attached summary of costs for the works included, for each stage of the works, an amount for “ Engineering Design, Certification, Oversight ” . From time to time, Mr Orr provided an updated summary of these costs as the scope of works or the cost of materials changed. On 20 March 2020, the builder provided comments on MESO ’ s design. On 21 March 2020, Mr Orr responded to these comments. On 25 March 2020, the parties met. On 26 March 2020, Mr Orr provided Nasser Matta with an updated summary of the costs associated with the proposed works. Mr Orr noted the challenges in securing the relevant materials, “ Basically, if [Mr Demian] wants this to go ahead in the next few months I need to be acting on all this this week which means [he] needs to make a pretty sizeable payment so that I can start. ” On 27 April 2020, Mr Orr emailed Nasser Matta and Ralph Kress at A-Civil, advising that MESO had arranged to have some men on the Camelia site the next morning to prepare for the arrival of three semi-trailer loads of sheet piles, with a further delivery coming the following week. A revised summary of costs showing the payments associated with the sheet deliveries was provided. The first delivery would be $304,992.65, including $249,529.12 for sheet piling, $52,963.53 for engineering design, certification and oversight and $2,500 for preliminaries. On 28 April 2020, Mr Kress asked Mr Orr to submit a formal price for the project. On 29 April 2020, MESO submitted a letter of offer. The quotation included preparation of a design. On 29 April 2020, MESO also rendered an invoice for $304,992.65 plus GST for the delivery of sheets to site. According to Nasser Matta, he asked Mr Orr why MESO was charging this amount, “ we don ’ t even have a contract in place. ” While Mr Orr had an agreement with Mr Demian to pay for the materials delivered, the developer would not pay any more than that. Mr Orr explained that the invoice included the design cost and Mr Matta said, “ Okay, well that is not what he agreed to. ” Mr Orr agreed to get the invoice changed. On 8 May 2020, Mr Kress emailed MESO ’ s chief financial officer, Paul De Araugo, “ please amend invoice for the supply only of sheets without design certification … so I can forward to client for payment thanks. ” This was done. The revised invoice was $249,529.12 plus GST. Nasser Matta said that A-Civil “ paid MESO for the sheets he delivered, without A-Civil requesting him to deliver [a] thing, as he went direct to the client. … that ’ s what happened. ” Further, “ at the time when I did find out they were delivering sheets, I rang [Mr Orr], and I was with Charlie Demian. And he had no idea as well, and we said what the hell is going on. His excuse was there ’ s a shortage of sheets, and convinced Dave Smedley ” . In mid May 2020, Nasser Matta had a meeting with Mr Demian and Mr Smedley; they discussed whether Mr Demian would agree to pay MESO for the design and certification before the sheet piles were installed and certified. Mr Demian said that he had only agreed to pay Mr Orr for the materials because they were then in short supply. But Mr Demian had not been told that Mr Orr would charge for design and certification before the sheet piles were installed and certified. Mr Demian said he would pay for the design and certification once there was a contract in place and the sheet piles had been installed and certified by an engineer. A-Civil made a series of payments towards MESO ’ s invoice of $274,482.03 (including GST) until the balance of the invoice was $24,482.03. According to Mr Matta, Mr Orr asked him when the balance of the invoice would be paid and Mr Matta said he would get Mr Demian to pay it once Mr Orr sent a copy of his supplier ’ s invoice, “ You need to show me how much you have paid for the sheet piles so I can show [Mr Demian, who] said he is not giving you a cent more because you told him that it was $250,000 all up including GST ” . On 22 February 2021, MESO issued an invoice to A-Civil, albeit dated 29 April 2020, for engineering and design in the amount of $55,463.54 plus GST. Mr Orr did not explain why this invoice was issued at this time. Nasser Matta said that A-Civil was never awarded any contract for the James Ruse project; the tender was not complete and did not proceed. The site was eventually sold by the developer in May 2022. Mr Matta denied engaging MESO to design a certified temporary shoring system for the project or to prepare shop drawings. While the summary costings provided by Mr Orr from time to time included a cost for the design component, “ The tender did not go on … no one won the tender. ” He disagreed that A-Civil engaged MESO to carry out some of the work in the quote. Mr Matta said there was no contract between A-Civil and MESO in relation to the James Ruse project. He said that the invoice was “ not even valid ” . Mr Matta also said that he had not previously seen MESO ’ s tax invoice for $61,009.89 (including GST) , until it was attached to Mr Orr ’ s affidavit in these proceedings. Having searched his emails, and those of Mr Kress and other staff, he was not able to find any emails from MESO attaching that tax invoice. MESO submitted that MESO ’ s design was provided to the developer, who commented on the design; MESO made changes to its design, which were said to have been “ in effect taken on by the developer. ” Mr Matta was aware of the pricing that MESO wanted to get paid for the design. No objection was made. Nor was there any objection to the invoice for materials for some time , before Mr Matta said he had a conversation in which he said that someone else was going to pay the invoice. These things were said to be an implied admission that the amounts were payable Whether MESO is entitled to the payment of these invoices depends on whether it had an agreement with A-Civil to pay for either of the items the subject of the invoices. I repeat the principles earlier set out: see [ 7 ]-[ 9 ] . In respect of the first invoice, MESO pressed the developer to organise materials for this project, where materials were said to be in short supply. Mr Orr circulated a summary of the costs of the project, including the first delivery of sheet piles. But there is no evidence that anyone formally accepted this offer. MESO proceeded to deliver the sheet piles and issue an invoice, which A-Civil progressively paid save for the extent to which the invoice exceeded $250,000. From Mr Matta ’ s discussion with the developer, that was all that the developer was prepared to pay for materials absent proof that the materials had cost MESO more than that. Mr Orr did not respond to Mr Matta ’ s affidavit on this subject and I take it that he did not disagree with Mr Matta ’ s evidence. In the result, I am not satisfied that A-Civil agreed to pay for the sheet piles for the figure put forward in Mr Orr ’ s summary of costs and thus I am not satisfied that MESO is entitled to have the balance of the first invoice paid. The position is clearer with the second invoice, where there is no evidence of an agreement to pay for the design. MESO did prepare a design in the course of participating in a tender with A-Civil . B ut the tender was not accepted. There is no evidence that A-Civil agreed to pay for MESO ’ s design in the event that the tender was not successful. That Mr Matta objected to MESO including a charge for the design in its invoice when first issued, and that MESO agreed to remove that element from the invoice, is consistent with an appreciation on MESO ’ s part that it was not then entitled to charge for the design absent acceptance of its letter of offer. Also consistent with this is the fact that MESO did not issue an invoice for the design until sometime later. What prompted the issue of the invoice is not known. True it is that A-Civil admitted, in its pleading, that MESO issued the tax invoice. A-Civil did not admit, however, that MESO had sent the invoice to A-Civil, or that A-Civil had received the invoice. N o contemporaneous email providing the invoice to A-Civil is in evidence and the invoice appears to have come something ‘ out of the blue ’ . MESO is not entitled to payment of this invoice either. Parramatta RSL project MESO submitted that A-Civil denied receiving three invoices totalling $267,522.12, being Payment Claim No 4 ($25,374.43), Payment Claim No 10 ($105,901.46) and Payment Claim No 13 ($136,246.22) But it obviously did, where Nasser Matta included these invoices and their covering emails in his exhibit. No other basis was asserted for not paying these invoices, which should be taken as an admission that the invoices are payable: Roude v Helwani [2020] NSWCA 310 at [32]-[33] (White JA, Brereton and McCallum JJA agreeing) . MESO accepted that this figure should be reduced by $93,914.26, being the credit allowed in its final p ayment c laim. A-Civil submitted that MESO had failed to take into account MESO ’ s final reconciliation of 30 May 2022, where MESO allowed some $425,000 of ‘ credits ’ or negative variations. I am satisfied that A-Civil received the three unpaid invoices on the Parramatta RSL project , where the cover emails are in evidence and addressed to Nasser Matta. The issue is the amount of ‘ credit ’ that should be applied to reflect the reo and concrete supplied by A-Civil for MESO ’ s works. I will deal with this at the end of this judgment, to avoid any double-counting. Restitution and set off A-Civil submitted that, on MESO ’ s own reconciliation, A-Civil was entitled to restitution of the amount of $34,404.54. By the Final Payment Claim, MESO asserted or admitted that it was entitled to be paid $974,918.25 (plus GST) for the Works. The Final Payment Claim included a series of ‘ credits ’ or negative variations for works performed and materials supplied by others. Upon this account, and including GST, the amount that MESO stated it was entitled to be paid was $1,072,409.25. MESO has received $1,106,813.79 for the Parramatta RSL project, according to Nasser Matta. MESO has been overpaid of $34,404.54, leaving aside any issue as to whether the ‘ credits ’ or negative variations reflect the correct value of the amounts due and payable by MESO in respect of the items identified, the liabilities claimed by Paynter Dixon, and the damages separately claimed by A-Civil. MESO prepared a schedule of invoices rendered by MESO on five projects, crediting payments received from A-Civil and providing a running total. After receipt of the adjudication sum, the amount owing was said to be $281,750.37. But MESO accepted that the ‘ credits ’ given in its final payment claim of $93,914.26 should be deducted from this running total, leaving $187,836. I think, with respect, that it is simpler than this. MESO accepted that it had been fully paid on three projects. I have concluded that MESO is not entitled to be paid the remaining invoices on the Camelia project. This leaves the Parramatta RSL project . E ach of MESO ’ s payment claims had a running tally of the amount owing in respect of th at project . The total amount owing was paid in full following the adjudication determination, being the amount owing in the final payment claim on 30 May 2022. I have concluded that A-Civil is entitled to be paid Charge CR03 and Charge CR04 for the supply of steel and concrete for MESO ’ s works on the Parramatta RSL project , totalling $268,807.07 (excluding GST) . But A-Civil has already been given some ‘ credits ’ in respect of these supplies , which reduced the payment claims . A-Civil is not entitled to the whole $268,807.07 or it will be over-paid. There are two problems here. First, MESO gave ‘ credit ’ based on the fixed rate agreed with Mr Matta for the purposes of preparing a tender, whereas the parties later agreed that MESO should pay for these materials as per the supplier ’ s invoice. Second, some of the materials were supplied by Paynter Dixon. But as A-Civil has had the benefit of that credit, whether it related to materials supplied by A-Civil or Paynter Dixon, then A-Civil must bring it to account. MESO began to give these ‘ credits ’ in its July 2021 payment claim ($136,710.75), followed by September 2021 ($63,185.24), December 2021 ($103,168.89) and May 2022 ($25,187.42). A total of $191,541.51 (excluding GST) was given by MESO in ‘ credits ’ to A-Civil, referable to the supply of reo and concrete. Where th o se supplies cost A-Civil $268,807.07 (excluding GST), then A-Civil is entitled to a further $77,265.56 (excluding GST). To this must be added $10,619.92 for C harge CR05 and $270,000 for liquidated damages. This totals $ 357,885.48 . Orders For these reasons, I make the following orders: Declare that, should Paynter Dixon Constructions Pty Ltd make a claim against the plaintiff in relation to the matters the subject of back-charge BC 0 2, BC12, BC17 and BC19 in the Payment Schedule issued by Paynter Dixon on 1 February 2022 or for liquidated damages , then the defendant is obliged to indemnify the plaintiff in respect of such claim. Judgment against the defendant for $ 357,885.48 (excluding GST) . Order the defendant to pay interest on the amount in Order 2 under s 100 of the Civil Procedure Act 2005 (NSW). Otherwise dismiss the Amended Summons filed on 20 September 2023 and the Cross Summons filed on 7 August 2024 . Defendant to pay the plaintiff ’ s costs of the proceedings. Parties to notify any errors or omissions within 7 days. In the event that either party seeks to vary the costs order, direct that affidavits and submissions (limited to 3 pages) be provided within 7 days of this judgment, with any affidavits and submissions (limited to 3 pages) in response to be provided within 14 days of this judgment, such application to be decided on the papers. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 July 2026