TREANA HOLDINGS PTY LTD & ANOR v KAKKAD & ORS [2026] SASCA 77

On Appeal from DISTRICT COURT OF SOUTH AUSTRALIA (HIS HONOUR AUXILIARY JUDGE CHIVELL) [2024] SADC 161 First & Second Appellants: TREANA HOLDINGS PTY LTD, AMERONIX PTY LTD Counsel: MR N FLOREANI KC WITH MR L GENTRY - Solicitor: LGEE AND JULIUS LAWYERS First, Second & Third Respondents: TEJAL PRAMEYKANT KAKKAD, ARUN KUMAR VASHISHTA, RITA VASHISHT Counsel: MR B MCTAGGART KC WITH MR D FABBRO - Solicitor: MARK GUSTAVSSON & ASSOCIATES Hearing Date/s: 07/04/2026 File No/s: CIV-25-001933 A SUPREME COURT OF SOUTH AUSTRALIA (Court of Appeal: Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment 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 in which it was generated. TREANA HOLDINGS PTY LTD & ANOR v KAKKAD & ORS [2026] SASCA 77 Judgment of the Court of Appeal (The Honourable Justice Bleby, the Honourable Justice Stanley and the Honourable Justice B Doyle) 2 July 2026 APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - THE CONTRACT - CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - PERFORMANCE OF WORK - REMEDIES FOR BREACH OF CONTRACT Appeal against a decision of an auxiliary judge of the District Court of South Australia upholding a claim for breach of contract. In September 2020, the appellants entered into contracts with the respondents for the sale and purchase of two ‘off-the-plan’ townhouses in a proposed residential development (‘the contracts’). The appellants were the developers and vendors of that development comprising 13 townhouses, described as Lots 1–13. The respondents were the purchasers under the contracts in respect of Lots 1 and 6 and the applicants at first instance. The appellants entered into building contracts with two builders to undertake the building works with respect to the development. Following a period of delay in construction and the passing of the Sunset Date provided for in the Special Conditions to the contracts, the appellants purported to terminate the contracts. The respondents subsequently commenced an action in the District Court alleging breach of contract in that the appellants failed to comply with a contractual obligation use their ‘reasonable endeavours’ to construct their townhouses by the date specified for practical completion. -- 1 of 35 -- On 11 December 2024, an auxiliary judge of the District Court delivered judgment allowing the respondents’ claim for breach of contract, finding that the appellants’ breach of the reasonable endeavours obligation in each case was causally related to the event that triggered their power to terminate the contracts. The judge held that the purported terminations of the contracts were consequently invalid. In summary, the issues arising on the appeal are whether the judge erred by: • misconstruing the extent and scope of the appellants’ obligation to use ‘reasonable endeavours’, and in doing so, made findings that were beyond the scope of that obligation and inconsistent with incontrovertible facts (Grounds 1, 2 and 4); and • finding that with the exercise of reasonable diligence on the part of the appellants, the proposed residential development could have been completed by the Sunset Date, without engaging in a proper analysis of causation (Ground 3). Held (by the Court), dismissing the appeal: 1. When the terms of the building contract are read in their entirety, and the expert evidence is taken into consideration, it cannot be said that the judge elided the obligations of the builder and the appellants as developer. The building contract was not one that excluded the appellants, as developer, from influencing the nature and progress of the works. 2. The judge did not make findings that went beyond the scope of the appellants’ reasonable endeavours obligation. 3. The judge did not make findings inconsistent with incontrovertible facts. 4. The evidence of the respondents’ expert was capable of providing support for the judge’s findings which, in turn, were capable of sustaining a conclusion of causation. That is, had the appellants used their reasonable endeavours to achieve practical completion, there was a substantial chance that the building works would have been completed by the date prescribed by the contracts. District Court Act 1991 (SA) s 37, referred to. Altis PropCo2 Pty Ltd v Majors Bay Development Pty Ltd [2022] NSWSC 403; Alamdo Holdings Pty Ltd v Reece Australia Pty Ltd [2025] NSWSC 946; Blatch v Archer (1774) 98 ER 969; Day v Perisher Blue Pty Ltd [2005] NSWCA 110; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Hall v Foster [2011] NSWSC 295; Ha Tinh Pty Ltd v Chin Yin Pty Ltd (2022) 12 QR 609; Joseph Finance and Investment Pty Ltd v Eastwood Retirement Pty Ltd [2023] VSC 731; Joseph Street Pty Ltd v Tan (2012) 38 VR 241; Kakkad & Ors v Treana Holdings Pty Ltd & Ors [2024] SADC 161; Lee v Lee (2019) 266 CLR 129; Masters v Belpate Pty Ltd [2001] NSWSC 169; Optus Vision Pty Ltd v Australian Rugby Football League Ltd [2003] NSWSC 288; Stepping Stones Child Care Centre (Act) Pty Ltd v Early Learning Services Ltd (2013) 95 ACSR 179, considered. -- 2 of 35 -- TREANA HOLDINGS PTY LTD & ANOR v KAKKAD & ORS [2026] SASCA 77 Court of Appeal – Civil: Bleby, Stanley and B Doyle JJA 1 THE COURT: In September 2020, the appellants entered into contracts with the respondents for the sale and purchase of two ‘off-the-plan’ townhouses in a proposed residential development to be constructed at 141–143 Anzac Highway, Kurralta Park (‘the contracts’). The appellants were the developers and vendors of that development comprising 13 townhouses, described as Lots 1–13. The respondents were the purchasers under the contracts in respect of Lots 1 and 6 and the applicants at first instance. 2 On 10 January 2023, following a period of delay in construction and the passing of the Sunset Date provided for in the Special Conditions to the contracts, the appellants purported to terminate the contracts. 3 The respondents subsequently commenced an action in the District Court of South Australia, instigating claims in estoppel, misleading and deceptive conduct contrary to the Australian Consumer Law,1 and breach of contract arising from the appellants’ failure to use ‘reasonable endeavours’ to construct their townhouses by the date specified for practical completion. On the claims for breach of contract, the respondents sought declarations pursuant to s 37 of the District Court Act 1991 (SA) to the effect that the appellants had invalidly terminated the contracts and orders for specific performance of the contracts. 4 On 11 December 2024, an auxiliary judge of the District Court delivered judgment in the primary proceedings.2 The judge allowed the respondents’ claim for breach of contract, finding that the appellants’ breach of the reasonable endeavours obligation in each case was causally related to the event that triggered their power to terminate the contracts. The purported terminations of the contracts were consequently invalid.3 5 On 30 January 2025, the judge made orders in the following terms: Orders It is ordered that this Court: DECLARATIONS 1. DECLARES that the contracts for the sale of Unit 1 and Unit 6 at the residential development located at 141-143 Anzac Highway, Kurralta Park, South Australia, as executed by [the respondents] and [the appellants] on 13 September 2020 and 19 September 2020 are valid and enforceable. 1 Competition and Consumer Act 2010 (Cth), sch 2. 2 Kakkad & Ors v Treana Holdings Pty Ltd & Ors [2024] SADC 161. 3 [2024] SADC 161 at [250]–[252]. -- 3 of 35 -- [2026] SASCA 77 The Court 2 2. DECLARES that [the appellants’] purported termination of the contracts for Unit 1 and Unit 6 dated 10 January 2023 are invalid and of no legal effect. SPECIFIC PERFORMANCE 3. ORDERS that [the appellants] specifically perform the contracts dated 13 September 2020 and 19 September 2020 for Unit 1 and Unit 6 respectively, and to take all steps necessary to complete the contracts, including but not limited to ensuring settlement occurs in accordance with the contracts (save that settlement shall be by a date as agreed and in any event not later than 30 June 2025). LIBERTY TO APPLY 4. Liberty to apply is granted to all parties in respect of the implementation and enforcement of these orders Order for Costs 5. [The appellants] are ordered to pay 50% of [the respondents’] costs of the proceedings on a standard basis to be agreed or taxed. … 6 The issues arising on the appeal, broadly stated, are whether the judge erred by: • misconstruing the extent and scope of the appellants’ obligation to use ‘reasonable endeavours’, and in doing so, made findings that were beyond the scope of that obligation and inconsistent with incontrovertible facts (Grounds 1, 2 and 4); and • finding that with the exercise of reasonable diligence on the part of the appellants, the proposed residential development could have been completed by the Sunset Date, without engaging in a proper analysis of causation (Ground 3). Background The sale and purchase contracts 7 On 13 September 2020, the first respondent, Mrs Tejal Kakkad, entered into a contract for the sale and purchase of Lot 1 for a purchase price of $399,000. She paid a deposit of $19,950. Mrs Kakkad’s husband, Mr Prameykant Kakkad, was also involved in the decision to acquire and enter into the contract to secure Lot 1. 8 On 19 September 2020, the second and third respondents, Mr Arun Vashishta and Mrs Rita Vashisht, signed a contract for the sale and purchase of Lot 6 for a purchase price of $399,900. They paid a deposit of $19,995. 9 The contracts for the sale and purchase of Lots 1 and 6 contained identical terms but for the dates they were signed and the purchase price. -- 4 of 35 -- [2026] SASCA 77 The Court 3 10 The respondents signed the contracts following a series of meetings with Mr Kevin Xu that took place between August and September 2020. Mr Xu was employed as a real estate agent by Prohomes Realty Pty Ltd, the land agent engaged by the appellants. 11 The contracts were subject to various ‘Special Conditions’ annexed as ‘Annexure A’. 12 Special Condition 1 of Annexure A was a definitions clause. It defined ‘Practical Completion’ as follows: Practical Completion means the date that a certificate of practical completion is issued certifying that the Development has been brought to a stage reasonably fit for occupation and/or use notwithstanding any minor omissions or minor defects which do not prevent the Development from being reasonably capable of being used by the Purchaser. 13 Special Condition 1 then defined, in larger font and bold lettering, the ‘Proposed Practical Completion Date’ as 29 June 2022 which ‘may be extended in accordance with Special Condition 13’. It defined, in the same formatting, the ‘Sunset Date’ as 29 December 2022. 14 Special Condition 7 then prescribed the ‘Settlement Conditions’ that must be satisfied before settlement of the sale and purchase of the townhouses may occur under the contracts. It provided: 7. Conditions Precedent to Settlement 7.1 Settlement under this Contract is subject to and conditional upon: (a) the Developer obtaining Development Approval for the Development on or before 31 December 2021; (b) deposit of the Community Plan with the LTO by the Registrar-General to create a separate Lot for the Land in accordance with Special Condition 8; (c) the Building Works achieving Practical Completion on or before the Proposed Practical Completion Date; (together, the Settlement Conditions). … 7.2 If any of the Settlement Conditions are not satisfied by the relevant date, the Vendor may terminate this Contract by notice to the Purchaser at its sole discretion. For the avoidance of doubt, this clause is for the sole benefit of the Vendor, and the Vendor may waive any of the Settlement Conditions. 7.3 Notwithstanding any other provision of this Contract, if any of the Settlement Conditions are not satisfied on or before the Sunset Date, then either party may terminate this Contract by providing the other party with notice in writing. 7.4 Upon termination of this Contract under this clause all money paid by the Purchaser to the Vendor under this Contract will be refunded without deduction and each party -- 5 of 35 -- [2026] SASCA 77 The Court 4 releases the other in respect of all Claims arising out of or in respect of this Contract (other than in respect of any antecedent breach). 15 Special Condition 10.1(a)(i) provided that the Developer will complete or cause to be completed the construction of the Development and the Building Works in a proper and workmanlike manner. The balance of Special Condition 10.1(a) obliged the Developer to complete the construction in accordance with the plans and specifications and in compliance with any Development Approval and all applicable laws. That is to say, the Developer was under specific obligations with respect to the construction of the development. 16 Special Condition 10.1(b) provided: The Developer will use its reasonable endeavours to achieve Practical Completion of the Development by the Proposed Date for Practical Completion. 17 Special Condition 11.2(b) permitted the Developer to substitute materials without notice to the Purchaser if those materials were difficult to obtain, provided that the substituted materials were of at least equivalent quality. 18 Special Condition 13.1 provided the Developer with a unilateral right to extensions of time in the event of certain circumstances of delay. Special Condition 13.1(i) provided: 13.1 The Purchaser acknowledges and agrees that if the Developer’s ability to commence the Building Works or to satisfy any of the conditions these Special Conditions are delayed by any of the following causes: … (i) any temporary or permanent unavailability of any materials and/or labour required in and for the construction of the Development and/or the Building Works or any part thereof to the extent that such unavailability arises in circumstances beyond the control of the Developer; … then the date by which the Developer must obtain Development Approval, the Condition Satisfaction Date, and the Proposed Practical Completion Date, will be extended for such reasonable period as determined by the Developer having regard to the nature of the cause of the delay (and the Developer may obtain such extensions of time on more than one occasion) PROVIDED THAT if the Land is not brought to a state of Practical Completion and/or Settlement does not occur by the Sunset Date (other than by virtue of a default by the Purchaser), then either the Vendor or the Purchaser may at any time thereafter by notice in writing to the other determine this Contract and all money paid by the Purchaser to the Vendor under this Contract will be refunded with neither party having recourse against the other in respect of that determination. 19 Special Condition 13.1 consequently operated to allow for termination of the contract by written notice where a state of practical completion had not been achieved by the Sunset Date. -- 6 of 35 -- [2026] SASCA 77 The Court 5 The building contracts 20 On 15 April 2021, the council issued the appellants with development approval for the building works. The appellants asserted at trial that the later construction commencement date was due to delays in obtaining the final development approval. 21 The appellants then engaged two building contractors, 1864 Construction Pty Ltd and Noble Built Pty Ltd, to undertake the building works with respect to the development. On 5 May 2021, the appellants and 1864 Construction entered into a contract for the construction of Lots 1–6, which included the townhouses the subject of this matter (‘the building contracts’). Noble Built was subsequently engaged to build Lots 7–13 on 15 May 2021. Building works commenced on 2 May 2021. The building contracts stipulated a finish date of 5 November 2022, approximately four months after the Proposed Date for Practical Completion agreed in the contracts for sale and purchase. 22 In the ensuing months, the respondents wrote to Mr Xu on numerous occasions to express their concerns regarding the lack of progress in the construction of their townhouses. The proposed variation to the purchase price and the extension of the Proposed Practical Completion Date 23 By email correspondence dated 12 April 2022, Mr Xu wrote to Mr Vashishta and Mr Kakkad enclosing identical invoices from the builders claiming a ‘Variation (Construction Fee)’ of $50,000 in respect of each townhouse in the development. The email requested the variation to the purchase price of the respondents’ townhouses due to ‘an unavoidable consequence of the effects of COVID-19 on both the timeframe for the project, logistics in material supply and the building industry generally’. 24 Mr Kakkad, in response, requested an itemised invoice justifying the amounts claimed by the builders. Mr Xu subsequently conveyed Mr Kakkad’s request to Mr Gingui (Otto) Zhu, a director of the appellant companies. At trial, Mr Xu gave evidence that he was instructed by Mr Otto Zhu to ‘not take the issue of negotiating the purchase price any further’. The appellants did not provide a cost breakdown to Mr Kakkad. 25 As noted earlier, the Proposed Practical Completion Date was 29 July 2022. On 5 August 2022, the appellants, through their conveyancer, delivered letters to the respondents exercising their right under Special Condition 13.1(i) extending the Proposed Practical Completion Date to 29 December 2022 to align with the Sunset Date. Notwithstanding that extension of time, it was common ground that practical completion was not achieved by 29 December 2022. 26 In letters dated 10 January 2023, that is, almost two weeks after the Sunset Date, the appellants, through their conveyancer, wrote again to the respondents to -- 7 of 35 -- [2026] SASCA 77 The Court 6 terminate the contracts, ‘effective immediately’, in accordance with Special Conditions 7.2, 7.3 and 13. Counsel for the appellants accepted that the failure to satisfy Special Condition 7.1(c), that is, to achieve Practical Completion on or before the (extended) Proposed Practical Completion Date, formed the basis for the purported termination under Special Condition 7.2. 27 In early to mid-January 2023, the respondents registered caveats over the land comprising Lots 1 and 6. Those caveats remain. The appellants have subsequently given undertakings not to, amongst other things, sell or purport to sell Lots 1 and 6. 28 On 30 September 2023, practical completion of the building works was achieved in relation to Lots 1 and 6. The decision of the primary judge 29 It is not necessary to summarise all the issues arising at trial. Relevantly, the respondents claimed for breach of contract, on the basis that the appellants had failed to use reasonable endeavours to achieve practical completion before 29 December 2022, in breach of Special Condition 10.1(b). They claimed that the appellants thereby lost their rights to terminate the contracts pursuant to Special Condition 7.1(c), that the terminations were invalid and that they were entitled to specific performance. 30 The respondents contended at trial that the appellants had failed to use their reasonable endeavours in that they: • failed to make proper enquiries with other builders as to the availability of resources and materials; • failed to make reasonable enquiries about the capacity of the builders to supply and source adequate labour and materials for construction of the development before engaging the builders; • failed to source, or failed to attempt to source, alternative supplies of materials and labour for the development; • failed to make reasonable and timely inquiries with the builders as to the progression of the development; • failed to exercise contractual rights available to them under the building contracts against the builders for their failure to complete the development by the extended Proposed Practical Completion Date; • failed to issue any direction to the builders to complete the development; and -- 8 of 35 -- [2026] SASCA 77 The Court 7 • failed to issue a work resumption order to the builders.4 31 The appellants’ primary argument at trial with respect to this aspect of the claim was, in effect, that they ‘could do no more’ than what they actually did to complete the development in circumstances where there were labour and material shortages that arose as a result of the COVID-19 pandemic.5 32 The appellants relied on an affidavit of Mr Otto Zhu, affirmed on 22 May 2024. Mr Zhu was a director of both appellant companies, together with his two brothers. He was the only director to give evidence. Mr Zhu’s affidavit included evidence to the effect that there were a number of challenges with the development, including:6 • lack of tradespeople following the lockdown in Adelaide in late July 2021; • difficulty sourcing timber for the internal fit-out (although they did source timber for the main framework earlier on); • when they did source timber, it took longer to arrive and cost a lot more than they expected; • inability to source the external cladding; • delay in supply of double-glazed window units from China; • difficulty in sourcing gyprock and installers; • delay in supply of joinery from China, even though the builders paid ‘up-front’ the Chinese manufacturers; • delay in provision of water connections to the units by SA Water; • difficulty in securing tradespeople and labourers. (Footnotes omitted.) 33 The judge found that Mr Zhu’s evidence provided ‘no details of any efforts made by him to deal with any of the difficulties he identified, apart from the ‘up-front’ payment for the joinery’.7 He also rejected the appellants’ submission that to terminate the contract for the joinery manufactured in China might have exposed them to an action for breach of contract with the manufacturers.8 The appellants had relied on Joseph Finance and Investments Pty Ltd v Eastwood Retirement Pty Ltd9 where the Victorian Supreme Court accepted the proposition 4 The appellants submit on appeal that the respondents’ evidence and submissions at trial were directed to only two alleged breaches, being the failure to make proper enquiries with other builders about materials and resources and to source or attempt to source alternative suppliers of materials and labour. 5 [2024] SADC 161 at [167]. 6 [2024] SADC 161 at [175]–[176]. 7 [2024] SADC 161 at [178]. 8 [2024] SADC 161 at [170]. 9 [2023] VSC 731. -- 9 of 35 -- [2026] SASCA 77 The Court 8 articulated by Einstein J in Optus Vision Pty Ltd v Australian Rugby Football League Ltd10 that a breach of the obligation to use reasonable endeavours cannot arise where ‘to fulfil that obligation would leave the obligor exposed to a potential breach of contract claim by another party’.11 The judge held:12 … No evidence was led as to the nature of the contract with the manufacturers, except that the respondent paid one half of the contract price ‘up front’. At no time has it been suggested that the respondent should have terminated the contract. The applicants’ case was that the respondent should have sought ways to work around delays in relation to the joinery. Further, if no joinery had yet been built, and if the price had been paid up front, and the delays were substantial, it is difficult to see how the respondent could have been exposed to a claim for breach of contract if they had cancelled the order. 34 The judge found that this was the only evidence of the possible detrimental effect of the appellants seeking alternative supplies.13 35 The judge accepted the respondents’ submission that the failure to take the pleaded measures would constitute a breach of the appellants’ contractual obligations if to take them meant that they might have been effective in achieving practical completion of the development:14 I agree with [the respondents] that if such measures were taken, and they might have been effective in achieving the completion of the development by the above date, then those measures should have been taken, and a failure to take them would constitute a failure to make reasonable endeavours to achieve that result. 36 The judge noted Mr Zhu’s ‘hands-off’ approach towards the builders, concluding that there was a ‘distinct lack of specificity’ in Mr Zhu’s evidence as to his engagement with the builders and no evidence of the efforts he asked them to make to seek alternative sources of labour and materials.15 37 The judge then turned to the evidence of the building supervisors, Mr Changhui (Justin) Wu of 1864 Constructions and Mr Jiyu (Kevin) Zhu of Noble Built, both of whom swore affidavits and gave evidence at trial. At the outset of his analysis of that evidence, the judge observed that there was mutual contamination of the evidence of these two witnesses due to the similarities 10 [2003] NSWSC 288. 11 Joseph Finance and Investments Pty Ltd v Eastwood Retirement Pty Ltd [2023] VSC 731 at [85] (Croft J), quoting Stepping Stones Child Care Centre (Act) Pty Ltd v Early Learning Services Ltd (2013) 95 ACSR 179 at [292], quoting Optus Vision Pty Ltd v Australian Rugby Football League Ltd [2003] NSWSC 288 at [114]–[115] (Einstein J). 12 Kakkad & Ors v Treana Holdings Pty Ltd & Ors [2024] SADC 161 at [169]–[170]. 13 [2024] SADC 161 at [206]–[208]. 14 [2024] SADC 161 at [183]. 15 [2024] SADC 161 at [185]. -- 10 of 35 -- [2026] SASCA 77 The Court 9 between the affidavits.16 To that end, he concluded with respect to the weight to be given to them:17 It is perfectly clear that there was mutual contamination of the evidence of these two witnesses, and I reject Mr Justin Wu’s evidence to the contrary. The words of Sheller JA in Day v Perisher Blue Pty Ltd18 quoted above apply with the same force. These affidavits are not the words of the deponents, but mainly the words of [the appellants’] legal representatives. It is not possible to now judge whether any changes they have made were the result of memory or consultation between them. The weight to be given to the evidence in these two affidavits, and to the evidence of the witnesses generally, has been severely diminished as a result. (Footnotes in original.) 38 The judge found that there was a lack of documentation supporting the appellants’ case that they had exercised reasonable endeavours.19 Invoices produced showed work had occurred in June, July, August, September and December 2022, totalling $335,807. The judge observed that in circumstances where there were 13 units under construction, this meant an average of $25,831.31 per unit. There was no evidence as to whether the spending rate was equal for each unit, or whether this was reflective of the spending rate throughout the project.20 39 Mr Justin Wu gave evidence with respect to the supply of timber and its unavailability. In cross-examination, he said that he made no attempt to contact alternative timber suppliers other than one, Flinders Timber. With respect to the time being taken to finish the development, he said that he did not know when they needed to finish, other than to do so as soon as possible so they could move onto the next project. The judge found that Mr Wu was not aware of the Proposed Practical Completion Date of 29 June 2022, or its extension to 29 December 2022. 40 Mr Wu gave evidence to the effect that the builders were responsible for sourcing materials and labour and that they only reported to the appellants about delays and shortages if and when they were ready to make claims for progress payments. 41 The respondents called Mr Steven Sentschuk as an expert witness. Mr Sentschuk had about 39 years’ experience as a builder, building inspector and developer. The appellants called Mr Sam Paddick, a quantity surveyor with over 30 years’ experience in cost management, project management, project planning and control, as well as quantity surveying and commercial dispute services. 16 [2024] SADC 161 at [186]–[193]. 17 [2024] SADC 161 at [193]–[194]. 18 [2005] NSWCA 110. 19 Kakkad & Ors v Treana Holdings Pty Ltd & Ors [2024] SADC 161 at [197]–[215]. 20 [2024] SADC 161 at [199]. -- 11 of 35 -- [2026] SASCA 77 The Court 10 42 Both experts gave evidence about the effect of the COVID-19 pandemic on the increases of costs and delays in the construction industry. Mr Sentschuk summarised his opinion in the following terms: It is the opinion of this builder, inspector and developer that (the development) could have and should have, been able to be completed to a satisfactory conclusion in the timeframe provided, and that whilst the Covid-19 pandemic caused delay and difficulty, it should not be attributed as the cause of this project not being completed in the timeframe. 43 Mr Sentschuk considered that the proposed price increases of $50,000 were ‘more than sufficient’ to cover the increased cost of labour and materials caused by the pandemic. He said that a developer who was acting prudently ‘would be liaising constantly over the course of the development with the builder’. Where variations were required, the builder should inform the developer in writing for approval. He expected to see some documentation evidencing that the builders and the respondents were ‘scrambling for options’ to get past problems created by the pandemic. He had not seen a job previously where no such documentation existed. 44 Mr Paddick gave evidence to the effect that from early 2020 to early 2021, the availability of construction materials ‘virtually ceased’ and construction activity ground to a halt causing supply and cost volatility from early 2021 to mid-2022. Construction resumed from early 2021, but at half the pre-COVID pace. The construction period of a large house went from 12 months to 24 months. Price increases occurred in the range of 10 per cent to 50 per cent and there was a significant increase in labour costs. He disagreed with Mr Sentschuk that the delay could be avoided by sourcing alternative materials. He also disagreed that ‘a developer, acting prudently, would be liaising constantly over the course of the development with the builder, confirming that when any changes or variations to the original contract are required’. 45 Mr Paddick made a number of concessions in cross-examination. These included that the specifications in the building contracts were generic and imprecise and provided the builder with more flexibility to seek solutions. He accepted that he had never seen a job where there had been no documentation of communication between a builder and developer. He said that there were many jobs where the communication was mainly verbal. He was aware of a number of residential developments that were completed in 2021–2022. He acknowledged that timber, gyprock and Hebel products were not wholly unavailable during 2021– 2022. 46 Mr Paddick also conceded that if a purchaser of one of the lots was willing to pay an increase of $50,000, then there would not be a problem. He said he expected that a discussion to that end would be pursued to a conclusion as to whether the purchaser was willing to meet the increased cost. -- 12 of 35 -- [2026] SASCA 77 The Court 11 47 The judge found, with respect to the expert evidence:21 Having regard to the concessions made by Mr Paddick in cross-examination, I find that the evidence given by the expert witnesses is not very different. Mr Paddick remained sceptical that a better outcome could have been achieved, but his evidence was general, and he had not researched particular issues, such as the whereabouts of alternative building materials, specifically. Mr Sentschuk’s evidence was specific, and he provided examples of developments which had been successfully completed. Mr Paddick’s evidence referred to the period from early 2020 to early 2021, whereas Mr Sentschuk referred to a longer period, from March 2020 to December 2022. In all the circumstances, where their evidence differs, I accept the evidence of Mr Sentschuk, and find on the balance of probabilities that with the exercise of reasonable diligence on the part of the respondents, the Anzac Highway Development could have been completed by 29 December 2022. 48 The judge then found that it had become apparent to Mr Otto Zhu by April 2022 that the cost of the development had increased.22 He found Mr Zhu’s explanations for his decision not to pursue re-negotiations with the respondents to be ‘completely unconvincing’.23 He concluded that Mr Zhu realised that he could make a larger profit by terminating the contracts than he could by increasing the price by $50,000 and made no effort to achieve practical completion by 22 December 2022.24 49 The judge consequently found that the appellants did not use reasonable endeavours to complete the construction of the respondents’ townhouses by the Sunset Date.25 He found that Mr Otto Zhu abdicated responsibility for meeting his obligation under Special Condition 10.1(b) to use reasonable endeavours to achieve practical completion by 29 December 2022.26 In light of that breach, the judge concluded that the appellants had invalidly terminated the contracts.27 The appeal 50 Ground 1 complains that the judge misconstrued the scope of the reasonable endeavours obligation. Grounds 2 and 4 complain that having misconstrued the scope of that obligation, the judge made findings of the appellants’ obligations and drew adverse inferences against the appellants that were beyond that scope and inconsistent with certain incontrovertible facts. The essence of the complaint in Ground 3 is that the judge treated the finding of breach as determinative of liability, without making necessary findings of causation. 21 [2024] SADC 161 at [233]–[234]. 22 [2024] SADC 161 at [235]. 23 [2024] SADC 161 at [242]. 24 [2024] SADC 161 at [249]. 25 [2024] SADC 161 at [250]. 26 [2024] SADC 161 at [251]. 27 [2024] SADC 161 at [252]. -- 13 of 35 -- [2026] SASCA 77 The Court 12 The scope of the reasonable endeavours obligation (Ground 1) 51 The judge approached the question of the appellants’ obligation to use their reasonable endeavours by reference to the decision of the High Court in Electricity Generation Corporation v Woodside Energy Ltd (‘Woodside’).28 The plurality in that case articulated the nature and scope of the obligation to use reasonable endeavours:29 Three general observations can be made about obligations to use reasonable endeavours to achieve a contractual object. First, an obligation expressed thus is not an absolute or unconditional obligation.30 Secondly, the nature and extent of an obligation imposed in such terms is necessarily conditioned by what is reasonable in the circumstances, which can include circumstances that may affect an obligor’s business.31 This was explained by Mason J in Hospital Products Ltd v United States Surgical Corporation32, which concerned a sole distributor’s obligation to use “best efforts” to promote the sale of a manufacturer’s products. His Honour said33: “The qualification [of reasonableness] itself is aimed at situations in which there would be a conflict between the obligation to use best efforts and the independent business interests of the distributor and has the object of resolving those conflicts by the standard of reasonableness… It therefore involves a recognition that the interests of [the manufacturer] could not be paramount in every case and that in some cases the interests of the distributor would prevail.” As Sellers J observed of a corporate obligor in Terrell v Mabie Todd & Co Ltd34, an obligation to use reasonable endeavours would not oblige the achievement of a contractual object “to the certain ruin of the Company or to the utter disregard of the interests of the shareholders”. An obligor’s freedom to act in its own business interests, in matters to which the agreement relates, is not necessarily foreclosed, or to be sacrificed, by an obligation to use reasonable endeavours to achieve a contractual object.35 Thirdly, some contracts containing an obligation to use or make reasonable endeavours to achieve a contractual object contain their own internal standard of what is reasonable, by some express reference relevant to the business interests of an [obligor]36. (Footnotes in original.) 28 (2014) 251 CLR 640. 29 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [41]-[43] (French CJ, Hayne, Crennan and Kiefel JJ). 30 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 144 per Dawson J; Cypjayne Pty Ltd v Babcock & Brown International Pty Ltd (2011) 282 ALR 152 at 163 [67]. 31 Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83 at 101 per Mason J, citing Lord Roche in B Davis Ltd v Tooth & Co Ltd [1937] 4 All ER 118 at 128. 32 (1984) 156 CLR 41 at 91-92; see also at 118 per Wilson J; at 144 per Dawson J. 33 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 92. 34 (1952) 69 RPC 234 at 236. 35 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 118 per Wilson J; at 144 per Dawson J, both citing Van Valkenburgh, Nooger & Neville Inc v Hayden Publishing Co (1972) 30 NY (2d) 34. See also Yewbelle Ltd v London Green Developments Ltd [2008] 1 P & CR 279 at 288 [29]. 36 See, eg, CPC Group Ltd v Qatari Diar Real Estate Investment Co [2010] NPC 74 at [252]; Cypjayne Pty Ltd v Babcock & Brown International Pty Ltd (2011) 282 ALR 152 at 163 [68]. -- 14 of 35 -- [2026] SASCA 77 The Court 13 52 The appellants drew from Woodside the following propositions: • a ‘reasonable endeavours’ obligation is not an absolute or conditional obligation; • the nature and extent of such an obligation are necessarily conditioned by what is reasonable in the circumstances. This can include circumstances that may affect an obligor’s business. An obligor’s freedom to act in its own business interests in matters to which the agreement relates is not necessarily to be sacrificed by virtue of the obligations; and • some contracts containing such an obligation contain an internal standard of what is reasonable, by some express reference to the business interests of the obligor. 53 In this regard, the appellants drew on various authorities, to the effect that what constitutes ‘best endeavours’ must be measured by what is reasonable in the circumstances, having regard to the circumstances of the party who bears the obligation, in light of the particular contract.37 54 The content of the obligation can depend on the context. The judge noted the observation of Croft J in Joseph Finance and Investment Pty Ltd v Eastwood Retirement Pty Ltd38 as to the capacity of an obligor to have regard to its own interests where the contract is a one-off contract for the sale of land:39 Care should be taken before applying observations from courts in respect of different commercial contexts. In O’Rourke v P & B Corporation Pty Ltd, Martin CJ stated:40 Care should be taken before applying observations made in that commercial context to a quite different context, such as the present circumstance of a contract for the sale of land. In the context of the distributorship agreement, Dawson J observed at 143 - 144: Nor does the existence of a best efforts or best endeavours clause, such as was found to be a term of the contract … impose a duty upon the distributor to disregard his own interests. In speaking of a ‘best endeavours’ clause in a licence agreement, in Transfield Pty Ltd v Arlo International Ltd (Mason J said that it went no further than to prescribe ‘a standard of endeavour which is measured by what is reasonable in the circumstances, having regard to the nature, capacity, qualifications and responsibilities of the licensee viewed in the light of the particular contract’ … . Clearly that leaves room for a balancing of interests and does not require the elimination of any conflict. (footnotes omitted) 37 Altis PropCo2 Pty Ltd v Majors Bay Development Pty Ltd [2022] NSWSC 403 at [72] (Ball J); Ha Tinh Pty Ltd v Chin Yin Pty Ltd (2022) 12 QR 609 at [85] (Wilson J). 38 [2023] VSC 731. 39 Joseph Finance and Investment Pty Ltd v Eastwood Retirement Pty Ltd [2023] VSC 731 at [66] (Croft J). 40 (2008) 36 WAR 197 (“O’Rourke”). -- 15 of 35 -- [2026] SASCA 77 The Court 14 Observations of that kind are apt to a continuing commercial relationship, such as that of manufacturer and distributor, or licensor and licensee, in which the interests of the parties may compete and even conflict from time to time. However, different considerations apply to a once-off contract such as a contract for the sale of land, in which both parties can be taken to have an interest in the contract being performed. Accordingly, I would not be inclined to accept the proposition that P & B could take account of its own interests in the discharge of its obligations under its contracts with the plaintiffs, although P & B’s case does not depend upon that proposition (plaintiff’s emphasis).41 (Footnotes in original.) 55 Central to the appellants’ complaint, however, was a contention that the judge misapprehended the scope of the reasonable endeavours obligation having regard to the assumption of responsibility of the builder under the building contract. In this regard, Hall v Foster42 concerned a contract for the sale and purchase of land conditional on the registration of a subdivision plan to create a second lot within 12 months from the date of the contract. That contract required the parties to use their ‘best reasonable endeavours’ to satisfy those conditions. Acting Justice Tamberlin concluded that where a party to the contract has engaged an independent agent to assist in the satisfaction of a condition, such as a town planner or consultant:43 … the “best reasonable endeavours” will include taking steps to check and ensure that the reasonable measures are taken by the agent to procure the result. The pursuit of the measures to achieve the outcome cannot be abdicated to the independent agent. There remains a continuing obligation on the party liable to perform the obligation to follow through by communication and instructions to the consultant by following up the requirements of the local planning authority in cases where a planning requirement is imposed by the legislation such as in the present case. 56 The appellants’ essential complaint under Ground 1 is that the judge did not assess the reasonable endeavours obligation in Special Condition 10.1(b) in light of the contractual constraints, which included the building contract. Had the judge done so, he would have recognised that control of the site, and the functions of procurement and labour, all came exclusively within the domain of the builder. That is, the building contract conditioned the scope of the developer’s obligation. Once that scope was recognised correctly, the conclusion necessarily followed that the appellants, as developer, did all that was within their power in the circumstances of the delay caused by the COVID-19 pandemic. 57 In this regard, the appellants relied on clauses in the building contracts to the effect that: • the Developers were prohibited from providing instructions to the Builders’ suppliers, subcontractors or workers (cl 7.4); 41 O’Rourke at [145]–[147]. 42 [2011] NSWSC 295. 43 Hall v Foster [2011] NSWSC 295 at [57]. -- 16 of 35 -- [2026] SASCA 77 The Court 15 • the Builders were in possession of the site (cl 9); and • the Builders were entitled to a reasonable extension of time for doing the work because of ‘materials being difficult to get’ (cl 11.3.16) or anything else beyond the control of the Builders (cl 11.3.17). 58 The identified clauses had these effects. However, there are some qualifications to this. The prohibitions in cl 7.4 were not absolute: 7.4 You must not give any instructions to our suppliers or subcontractors or to our workers, except to our supervisor. (Emphasis in bold added.) 59 By cl 9.1, the Developer gave possession of the site to the Builder. However, this was not to the absolute exclusion of any right of the Developer to enter the site. Clause 9.4 provided: 9.4 You and any person you authorise may be entitled to enter on to the site to inspect the works at any reasonable time provided that the inspection does not delay or interfere with progress of the works and is under our supervision. 60 Contrary to the implication asserted by the appellants, the appellants were in a position under the building contract to issue instructions to the builder’s supervisor and were able to enter the site at any reasonable time. 61 The appellants also relied on the evidence of Mr Otto Zhu: [97] The builders are the experts in construction work. The builders have the networks of trades and suppliers that are required for a Development of this nature. [98] It was their role to arrange and deal with contractors, tradespeople and suppliers. [99] The builders were best placed to advise us as developers as to what could or should be done regarding materials and labour. We relied on the builders and their advice as to sourcing the materials and labour the Development required. 62 Similarly, Mr Justin Wu gave evidence that the developer never needed to ask about how to handle materials shortages, and that it was not the developer’s job to give instructions in that regard. The judge found that Mr Wu’s builder’s diary documented only eight instances of material and labour shortages over a 13-month period, which the judge found did not demonstrate ‘reasonable diligence’.44 63 Both experts agreed as to the different roles of Builder and Developer. Otherwise, the relevant effect of their evidence is as set out earlier, in particular the opinion of Mr Sentschuk, which the judge accepted, that a developer who was 44 [2024] SADC 161 at [196]. -- 17 of 35 -- [2026] SASCA 77 The Court 16 acting prudently ‘would be constantly liaising with the builder during the course of the development’.45 64 The appellants criticised certain findings as eliding the distinction between the proper roles of the Developer and Builder under the building contract. In response to a submission that it would have been prejudicial to the builders not to program the development as quickly as it could have been, the judge said:46 The obligation to progress the development was not that of the builders, it was the obligation of [the appellants]. There was evidence that the builders were handling other projects at the relevant time. There is the issue of their competence, familiarity with the local conditions, business acumen, all of which should have been taken into account by [the appellants] when exercising appropriate oversight of the progress of the development. 65 Then in response to a submission that the builder’s compulsory insurance policies effectively capped the work and the projects the builders were able to take on, the judge said:47 This is the same argument as … above, that it was against the builders’ interest to not progress the work if it could have been progressed. I make the same comment here. It was the [appellants’] obligation, not the builders’, to progress the development. 66 These findings were critical, as the appellants observed, to the judge’s conclusion that Mr Otto Zhu had delegated or abdicated responsibility to use reasonable endeavours and failed to do anything substantial towards discharging his personal obligations in this regard.48 They revealed, in the appellants’ submission, that the judge did not consider what, in fact, they could have done in the circumstances of the contractual constraints in the building contracts. 67 There are considerable difficulties with this submission. In the first instance, for the reasons already given, the building contract did allow for a considerable measure of control by the developer, not least by conferring a power to give instructions to the builder’s supervisor. Whilst there were undoubtedly limits on the extent of the binding instructions that might be given without the necessity for an agreed variation, this was not a contract that excluded the developer from influencing the nature and progress of the works. Secondly, and bearing in mind that power, the judge accepted, as he was entitled to, the expert evidence of Mr Sentschuk that a developer acting prudently ‘would be liaising constantly over the course of the development with the builder’. 68 There is a further difficulty. The sale and purchase contracts were entered into in September 2020. The building contract was entered into in May 2021, well into the COVID-19 pandemic when the difficulties in supply of labour and materials were known. At this time, the appellants were already subject to the reasonable endeavours obligation under Special Condition 10.1(b) of the contract 45 [2024] SADC 161 at [220]. 46 [2024] SADC 161 at [210]. 47 [2024] SADC 161 at [211]. 48 [2024] SADC 161 at [251]. -- 18 of 35 -- [2026] SASCA 77 The Court 17 for sale and purchase. Consistently with the observation of Tamberlin AJ in Hall v Foster,49 which the judge noted,50 it was not open to abdicate to the builder the pursuit of measures to achieve the outcome. The reasonable endeavours obligation is a continuing obligation on the party liable to perform the obligation to follow through by communications and instructions.51 69 To the extent that the appellants may have entered into an obligation that curtailed their ability to make reasonable endeavours to achieve practical completion by the (extended) Proposed Practical Completion Date, that provides no answer. That is pointed up in the present case by Mr Justin Wu’s evidence that he did not know what the Practical Completion date under the sale and purchase contract was. 70 When the terms of the building contract are read in their entirety, including Special Condition 10.1(a), and the expert evidence of Mr Sentschuk is taken into account, the judge having accepted that evidence, it cannot be said that the judge elided the obligations of the builder and the appellants as developer. The judge’s ultimate finding on the question of reasonable endeavours was that Mr Otto Zhu abdicated responsibility for meeting his obligation under Special Condition 10.1(b) to use reasonable endeavours to achieve practical completion by 29 December 2022.52 This finding was based on an orthodox application of the principle explained in Hall v Foster53 to the actions of Mr Zhu in light of the liberties and responsibilities reserved to the developer under the contract and the expert evidence. The appellants’ obligation extended beyond merely selecting an apparently competent builder and abdicating responsibility to that builder. 71 The judge did not elide the responsibilities of the builder and the developer. We dismiss Ground 1 of the appeal. Whether the judge made findings that were beyond the scope of the appellants’ reasonable endeavours obligation (Ground 2) 72 Ground 2 is premised, to a substantial extent, on the appellants succeeding on Ground 1. It reads, in its entirety: 2. The LTJ, having misapprehended the nature and extent of the Appellants’ reasonable endeavours obligation, made findings that were beyond the scope of the Appellants’ proper reasonable endeavours obligation, including the following erroneous findings that the Appellants were obliged to: 2.1 pursue (unpleaded) variations; ‘adjustments’, ‘alternative specifications’ or a ‘re-engineering’ of the contracted scope of works (per Sentschuk Report, p 5; 7 & 8), upon which the opinion of Mr Sentschuk was based and the acceptance 49 [2011] NSWSC 295. 50 [2024] SADC 161 at [179]. 51 Hall v Foster [2011] NSWSC 295 at [57]. 52 [2024] SADC 161 at [251]. 53 [2011] NSWSC 295 at [57]. -- 19 of 35 -- [2026] SASCA 77 The Court 18 of which led the LTJ to conclude that the reasonable endeavours obligation had not been discharged (see Reasons [234]); 2.2 terminate a contract for the supply of pre-fabricated joinery with an overseas supplier based in China, and thereby lose a 50% deposit already paid by the Appellants, unless ‘… no joinery had yet been built’, in which case the Appellants could ‘expect the deposit to be returned’ (Reasons at [170]; [208]); and 2.3 exercise ‘control and oversight’ over the Builders, where the degree of ‘control and oversight’ was expressly constrained by the terms of its contract with the Builders (Reasons at [209]; [210]) (referred to above). 73 Insofar as this ground impugns certain findings on an inclusive basis, the ground is not acceptably drafted. It risks leaving a respondent without fair notice of the findings to be impugned on the appeal. Having regard to the way in which the appeal was argued, however, the appellant grouping Grounds 1, 2 and 4 as manifesting one broad complaint premised on the essential issue raised by Ground 1, the particulars of this ground can be addressed as manifestations of that broader complaint. 74 It is convenient to address Particular 2.3 first. Paragraphs [209] and [210] of the judgment are framed as answers to submissions of the appellants at trial. They read as follows: [Submission] 2. It cannot be said that funds were withheld or that any delay fell to any inaction of the Respondents. This is factually correct, but to the extent that it implies that the respondent’s only obligation was to fund to project, and not to exercise control or oversight over the builders, the submission is [in]correct. [Submission] 3. It would have been prejudicial to the builders to not program the development as quickly as it could have been. Any delays help the builders out of their rights to payment under the costs-plus arrangement. The obligation to progress the development was not that of the builders, it was the obligation of the respondents. There was evidence that the builders were handling other projects at the relevant time. There is the issue of their competence, familiarity with the local conditions, business acumen, all of which should have been taken into account by the respondent when exercising appropriate oversight of the progress of the development. 75 These answers rely on the broad findings of the judge about the ongoing responsibility of the developer in overseeing the project. The appellants’ complaints about them rest squarely on the foundational complaint in Ground 1. For the reasons given in answer to that ground, these findings were not in error. 76 Particular 2.1 makes two complaints. The first is that the judge made findings against the appellants that went beyond the scope of their responsibility. The second is that the judge went beyond the scope of the pleadings. It is convenient to deal first with the pleadings complaint. -- 20 of 35 -- [2026] SASCA 77 The Court 19 77 Paragraph 25.2 of the Statement of Claim – Revision 1 pleaded and particularised the breach of the reasonable endeavours obligation: 25.2 in breach of clause [10.1(b)] of the Special Conditions, the Developers failed to use their reasonable endeavours to achieve practical completion of the Development by the Extended Date for Practical Completion. Particulars The Developers failed to use their reasonable endeavours by doing some or all of the following: (i) Failing to make proper enquiries with other builders as to the availability of resources and materials; (ii) Failing to make reasonable enquiries into the capacity of the 1864 Construction Pty Ltd and Noble Build Pty Ltd (the Builders) to supply and source adequate labour and materials for construction of the Development before engaging the Builders; (iii) Failing to source, or failing to attempt to source, alternative suppliers of materials and labour for the Development; (iv) Failing to make reasonable and timely enquiries with the Builders as to the progression of the Development; (v) Failing to exercise contractual rights available to the Developers under standard Housing Industry Association (HIA) contracts with the Builders (Build Contracts) for failure to complete the Development by the Extended Date for Practical Completion, namely failing to activate the dispute resolution procedures under clauses 29 to 31 of the Build Contracts; (vi) Failing to issue any direction to the Builders to complete the Development; (vii) Failing to issue the Builders a work resumption order, or delaying any work resumption order until after the Extended Date for Practical Completion. 78 The appellants complained, by reference to this pleading, that the judge had merely set out the evidence of Mr Sentschuk, expressed a preference for Mr Sentschuk’s evidence and then proceeded to his conclusion. They complained that this amounted to straying beyond the pleaded case. 79 The relevant paragraph of the judgment addressing the evidence of Mr Sentschuk was as follows:54 Mr Sentschuk made the following points in his report in answer to questions posed by the applicant’s solicitor:55 54 [2024] SADC 161 at [220]. 55 There was some repetitiveness in the questions asked, so I have distilled Mr Sentschuk’s answers in the following summary. -- 21 of 35 -- [2026] SASCA 77 The Court 20 • builders were faced with multiple challenges during COVID-19, including enforced lockdowns, labour force restrictions, material shortages, restrictions on meetings and gatherings; • builders needed to adapt their systems and procedures to deal with these challenges; • the product specifications for this development were vague and broad in some respects and offered opportunities to obtain supplies form (sic) alternative sources; • the specifications provided by the builders to the respondents also contained a disclaimer:- ‘The builder reserves the right to change the specifications as required with a replacement of similar or comparable quality’; • builders resorted to inventive ways to continue building despite the shortages. For example, some resorted to wrapping the building with sarking foil, allowing them to continue the interior fit out while waiting for availability of a bricklayer to construct the external walls; • shortages in supply resulted in increased costs. These were passed down the supply chain to the final users and to the client; • the best course of action to deal with the material shortages was to have options available which could allow substitution of materials which would not breach such vague specifications; • affirmative options for procuring materials and labour were readily available in most cases. This included timber although this was sometimes delayed.56 He cited a case where a builder had the roof of an extension re-engineered so that it could be bult (sic) using conventional materials without requiring trusses which were difficult to get; • the proposed increases in price of $50,000, which I will discuss shortly, were ‘more than sufficient’ to cover the increased cost of labour and materials brought about by the pandemic. He established this by reference to ‘Rawlinsons List of Building Data for 2020, adjusted using the Building Price Indices.’ • during the COVID-19 period, many developments similar to the one in question in this litigation were successfully completed; • to not honour a fixed price at the completion of a development undermines the risks taken by the purchaser who committed early in the development; • a developer, acting prudently, would be constantly liaising with the builder during the course of the development. When any damages or variations to the original contract are required, the builder should inform the developer in writing for approval; 56 T357. -- 22 of 35 -- [2026] SASCA 77 The Court 21 • he expected to see some documentation evidencing that builders and respondents in this case were ‘scrambling for options to get past problems created by the pandemic;57 • he had not seen a job before where no such documentation existed;58 (Footnotes in original.) 80 In the course of oral submissions, it became apparent that part of the appellants’ argument rested on the judge apparently not making findings with respect to some of the pleaded particulars of breach. That does not mean that the judge went beyond the pleadings. 81 The appellants then pointed to Mr Sentschuk having referred to options for substituting materials and re-engineering. These matters are broadly the subject of the third to eighth bullet points in the judge’s summary of Mr Sentschuk’s evidence. They are broadly the subject of pleaded particular 25.2(iii). Insofar as Mr Sentschuk referred to the option of reengineering aspects of the build, this was as an adjunct to, and consequence of, the possibility of sourcing alternative materials. In any event, the appellants did not suggest that they had complained at trial of prejudice on account of Mr Sentschuk’s evidence having gone beyond the pleaded case. 82 Mr Sentshcuk also raised the issue of communication between the developers and the builder, which was the subject of pleaded particular 25.2(iv). 83 The appellants’ argument in support of this particular of complaint on the appeal tended to slip into a complaint about the judge’s finding of causation, which is the subject of a separate ground of appeal. On the complaint of relying on Mr Sentschuk’s evidence so as to go beyond the pleaded case, it is sufficiently clear that the judge simply proceeded on a subset of the pleaded breaches of the reasonable endeavours obligation when finding breach in that regard. When faced with this observation at the hearing, senior counsel for the appellants invoked the other aspect of Particular 2.1, being that the appellants’ obligation of reasonable endeavours did not go as far as that described by Mr Sentschuk. 84 For the reasons given in answer to Ground 1, that contention must fail. Once the appellants’ responsibilities are understood by reference to the terms of the building contract, entered into after the reasonable endeavours obligation was assumed, and in light of Mr Sentschuk’s evidence, there is no basis on which to conclude the judge’s findings of failure on the part of the appellants went beyond their reasonable endeavours obligations. We reject the complaint in Particular 2.1. 85 The judge made the findings the subject of complaint in Particular 2.2 in response to a submission that terminating the contract for prefabricated joinery made in China might have exposed the appellants to an action for breach of 57 T353. 58 T355. -- 23 of 35 -- [2026] SASCA 77 The Court 22 contract. The judge rejected the submission, on the basis that no evidence was led as to the nature of the contract with the manufacturers, except that the appellants had paid half of the contract price ‘up front’. He held that it was not the respondents’ case that the appellants should have terminated the contract. Rather, the appellants should have sought ways to work around the delays associated with the joinery.59 The judge then said:60 Further, if no joinery had yet been built, and if the price had been paid up front, and the delays were substantial, it is difficult to see how the respondent could have been exposed to a claim for breach of contract if they had cancelled the order. 86 Later, in response to a submission that seeking alternative suppliers might have left the appellants in breach of contract, the judge said:61 The only example presented in the evidence of a detrimental effect on the respondents being caused by seeking alternative suppliers was the payment of a 50% deposit to the Chinese manufacturers for joinery. Cancellation of that order may have caused them to lose that deposit. I accept that, although if work had not commenced on the joinery, they could expect the deposit to be returned. 87 The appellants submitted that they had spent $138,000 on prepayments for the joinery. That was not the effect of the evidence. Mr Otto Zhu gave evidence that ‘he understood’ the builders had paid about $138,000 for the joinery up front from out of their funds and then included this amount in the next progress payments. However, the invoice exhibited to Mr Zhu’s affidavit from the Chinese joinery company, dated 1 February 2022, identified $138,050 as the total price for the cabinets and benchtops, as well as installation fees. The invoice required a 50 per cent deposit of $69,025 payable immediately and the balance to be paid in part prior to, and in part after, installation. These sums were referable to joinery for all six units under the builder’s contract. 88 The Chinese supplier issued subsequent invoices in July 2023, after the appellants had purported to terminate. Those later invoices appear to relate to the same items (2-Pac Paint Cabinets and Stone Benchtops) and refer to a lesser total sum (now $116,230). They acknowledge the earlier payment of $69,025 as required by the 1 February 2022 invoice. 89 It follows that the evidence does not support the appellants’ submission that the reasonable endeavours obligation as found by the judge required them to crystallise an immediate loss of, or risk losing, $138,000. 90 The appellants also complained that the judge did not consider whether it was reasonable for them ‘to have incurred the loss of $138,000, in the context of two contracts for sale for the sum of $399,000 each’. 59 [2024] SADC 161 at [169]. 60 [2024] SADC 161 at [170]. 61 [2024] SADC 161 at [208]. -- 24 of 35 -- [2026] SASCA 77 The Court 23 91 On a scenario that would have seen the appellants lose their deposit for the joinery, that would have been the sum actually paid, $69,025. Moreover, that was not in the ‘context’ of two contracts for sale, but of six units. The appellants’ submission overstated the effect of the evidence dramatically. 92 A worst-case scenario might involve other costs, as the appellants pointed out, such as those associated with risks of liability for breach. However, the terms of the contract were not in evidence, absent which the judge was not prepared to make a finding of the likely loss. Nonetheless, the judge accepted that one consequence might be the loss of the deposit. That possible loss was half that asserted by the appellants and would be spread over six units. In any event, however, for the purposes of the reasonable endeavours analysis, the judge’s principal conclusion was to accept that the appellants should have found ways to work around the delays associated with the joinery, not that they should have repudiated or otherwise terminated the contract. The problem was that they did not even try. 93 Once the true effect of this evidence is assessed against the judge’s findings about the content of the reasonable endeavours obligation, which remain intact by reason of the failure of Ground 1, the complaint in Particular 2.2 fails. Contrary to this complaint, the judge specifically did not find that the appellants were required to terminate the contract.62 He went on to consider the possible consequences if the appellants had terminated, which were nowhere near as serious as the appellants asserted. 94 It follows that we dismiss Ground 2. Findings inconsistent with incontrovertible facts (Ground 4) 95 Ground 4 primarily challenges the judge’s findings to the effect that Mr Otto Zhu was aware by June 2022 that the development would not achieve practical completion by the Sunset Date, and that he decided then that he would terminate after the Sunset Date and put the properties back on the market at a higher price. The judge made these findings in the context of considering Mr Zhu’s instruction to cease negotiations with the respondents for a price increase. 96 Mr Zhu gave evidence: [79] In around June 2022, we decided to stop any efforts to renegotiate with the purchasers. It became apparent we would not meet the Proposed Practical Completion date of 29 June 2022. It appeared we would need to extend the construction time and we didn’t want to continue negotiating under these circumstances. 62 [2024] SADC 161 at [169]. -- 25 of 35 -- [2026] SASCA 77 The Court 24 97 The judge considered that this did not satisfactorily explain the decision to cease negotiating.63 He also considered it not credible that Mr Zhu only became aware in June 2022 that the 29 June 2022 date would not be met. He then said:64 This event, combined with Mr Otto Zhu’s actions in extending the proposed completion date to 29 December 2022, and his other evidence, lead me to conclude, on the balance of probabilities, that Mr Otto Zhu was fully aware, in June 2022, that the development would not meet practical completion by 29 December 2022 and decided then that he would terminate the contract after the Sunset Date was reached and put the properties back on the market at a substantially higher price rather than negotiate with the respondents. Mr Kevin Xu was in regular contact with the applicants during this time, and they were becoming increasingly anxious about this issue, yet he did nothing to ease their concerns or accelerate the project. 98 The judge correspondingly disbelieved Mr Zhu’s evidence to the effect that it was only after December 2022 that he realised that he had a right to terminate the contract:65 I do not believe Mr Zhu’s evidence about that. In my view, the evidence points to a conclusion that he knew well before 29 December 2022 that the respondents were facing a loss, and that was the reason he instructed Mr Kevin Xu not to continue with the renegotiation discussions with the applicants in June 2022. He realised then that he could make a larger profit by terminating the contract than he could by increasing the purchase price by $50,000. For that reason, he made no effort to achieve practical completion by 29 December 2022. 99 Ground 4 particularises several complaints with respect to these findings. Particular 4.1 complains that the judge in making these findings failed to have regard to the contractual constraints correctly. This, again, is a reference to the complaint in Ground 1. For the reasons given earlier in respect of that ground, we reject this complaint. 100 Particular 4.2 complains that the findings ‘were based on inferential reasoning unsupported by objective facts or any application of the principles of causation of loss’. The complaint here appears to be that the judge treated these findings, being essential intermediate findings in reasoning to breach, as sufficient to establish liability without any analysis of causation. It is convenient to address this contention in the context of Ground 3, which challenges the judge’s finding of causation more broadly. 101 Particular 4.3 complains that the findings were inconsistent with incontrovertible facts. On an inquiry of this nature:66 A court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in 63 [2024] SADC 161 at [240]. 64 [2024] SADC 161 at [243]. 65 [2024] SADC 161 at [249]. 66 Lee v Lee (2019) 266 CLR 129 at [55] (Bell, Gageler, Nettle and Edelman JJ). -- 26 of 35 -- [2026] SASCA 77 The Court 25 fact or law67. Appellate restraint with respect to interference with a trial judge's findings unless they are “glaringly improbable” or “contrary to compelling inferences”68 is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts69. Thereafter, “in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge”70. (Footnotes in original.) 102 We address each asserted incontrovertible fact in turn. 4.3.1 The Appellants exercised their contractual right to extend the Proposed Practical Completion Dates from 29 June 2022 to 29 December 2022 (Reasons at [14]); as distinct from exercising their contractual right to terminate on non-satisfaction of Practical Completion on 29 June 2022 (per Special Condition 7.2). 103 The appellants relied at trial on the fact that they extended the Proposed Practical Completion Date from 29 June 2022 to the Sunset Date (29 December 2022), when they could have terminated the contracts in June. The point of the submission was that if Mr Zhu’s intention in June 2022 had been, as found by the judge, to terminate the contract, he would not have extended the practical completion date. 104 As the judge found, this submission ignored Mr Zhu’s own evidence that he did not know at that time that he was entitled to terminate the contract. That being the case, the extension of the Proposed Practical Completion Date to 29 December 2022, the Sunset Date, was entirely consistent with Mr Zhu’s determination to terminate the contracts. We reject the submission that this fact was inconsistent with and consequently a bar to the impugned findings. 4.3.2 Building works continued from May 2021 through December 2022 105 The appellants relied on the continuation of building works over this period to support the proposition that reasonable endeavours continued to be made. There are two difficulties with this. First, the mere continuation of some building works was not inconsistent with Mr Zhu determining to terminate the contracts after the Sunset Date and put the properties back on the market. The building works still had to be completed at some stage. Secondly, however, the judge was unable to 67 Fox v Percy (2003) 214 CLR 118 at 126-127 [25] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 686 [43]; 331 ALR 550 at 558. 68 Fox v Percy (2003) 214 CLR 118 at 128 [29] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 687 [43]; 331 ALR 550 at 558-559. 69 Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 at 434-435 [144]; Thorne v Kennedy (2017) 263 CLR 85 at 104 [42]. 70 Warren v Coombes (1979) 142 CLR 531 at 551 per Gibbs A-CJ, Jacobs and Murphy JJ; see also Fox v Percy (2003) 214 CLR 118 at 127 [25]. -- 27 of 35 -- [2026] SASCA 77 The Court 26 conclude, on the basis of the figures supplied, whether or not the appellants were using reasonable endeavours to complete:71 It was the applicants’ submission that: on the probabilities (it is) overwhelmingly unlikely that a party could have made genuine and earnest efforts, or even lowering it to the standard they have to meet here, reasonable efforts, to try to complete a build in these circumstances and generate almost no paper that evidenced those efforts. Mr Gentry submitted that, to the contrary, there was ‘extensive documentary material … including that which has been produced by the builders in response to the applicants’ own subpoenas’. He pointed out that invoices produced evidence of ‘building work occurring in each of the months of June, July, August, September and December 2022’ including air conditioning, ceilings, labour trades, painting, Hebel products and roofing. Building invoices for work and supplies during this period totalled $335,807.00. Having regard to the fact that there were 13 units under constructions, that is an average of $25,831.31 spent on each unit over a total period of seven months. There are no grounds for assuming that the spending rate was equal for each unit, however there is no evidence before me as to whether that spending rate was higher or lower than, or similar to the spending rate throughout the project. Nor am I able to conclude whether or not the respondents were using reasonable endeavours to complete the project on the basis of these figures. 106 The fact of works continuing between May 2021 and December 2022 was not inconsistent with a want of reasonable endeavours. The judge’s finding that he could not draw a conclusion from the limited evidence going to the extent of the works was manifestly correct. 4.3.3 The Appellants had taken no steps to re-market or re-sell the land the subject of the contracts 107 The appellants at trial relied on a version of this fact, submitting that the building works did not recommence rapidly in January 2023, were not completed until September 2023, and that the units were still not on the market. The judge rejected this submission. He observed that the respondents arranged to have caveats registered in early to mid-January 2023 after the purported terminations. The properties have since been subject to the caveats and undertakings to the court. The judge found that the effects of the COVID-19 pandemic were felt in the building industry until early 2023. He found that otherwise, it was not clear what steps the appellants took in an attempt to complete the projects earlier than they were completed or what commercial considerations informed their decision-making.72 71 [2024] SADC 161 at [197]–[199]. 72 [2024] SADC 161 at [215]. -- 28 of 35 -- [2026] SASCA 77 The Court 27 108 Patently, the appellants were in no position to take steps to re-sell the units almost immediately after the purported terminations. The submission that the impugned findings were inconsistent with this fact is without merit. 4.3.4 The Builders had not breached their own contractual obligations to the Appellants or delayed the performance of their own obligations 109 The appellants did not adduce any specific evidence on the question of the builders’ compliance with their own contractual obligations. Clause 11.3 of the building contract provided that the finish date would be put back by whatever time was reasonable if the builder was delayed in starting or doing the work because of any one of 17 listed matters. These included weather, vandalism and industrial disputes, but extended to delays on the part of the appellants in instructing the builder or anything else done or not done by the appellants. Ultimately, there was no evidence going to the question. The judge found with respect to Mr Zhu’s engagement with the builder:73 There was a distinct lack of specificity in the description of Mr Otto Zhu’s visits to the site and discussions with the builders about delays, shortages and difficulties with labour and materials. There was no mention of him seeking advice from anyone else about how to deal with these issues. He said he was unaware of the fact that one of the builders, 1864 Constructions, had a number of other projects under construction, whether it was making better progress with them, or which project, if any, was receiving priority. There is no assertion in his evidence about what questions he asked of his builders, whether they were seeking alternative sources of labour and/or materials, what rates were being paid or whether higher prices were being offered. (Footnotes omitted.) 110 Whether the builders had breached their own contractual obligations incorporated a question of law. There was no evidence from which an incontrovertible conclusion could be drawn on that question. Similarly, there was no evidence as to whether the builders had delayed performance of their obligations. The findings impugned under Ground 4 cannot be said to be inconsistent with any incontrovertible fact on this topic. 4.3.5 The Appellants had agreed to convert the original fixed-price build contracts to cost-plus contracts, thereby increasing their exposure and absorbing increased material and labour prices 111 The appellants did not adduce any evidence about why they made this change. The judge held, in respect of a submission to this effect made at trial:74 Clearly, this agreement had the effect that the risk of increasing prices affecting profit margins was transferred from the builders to the respondents. I have no way of knowing what the financial significance of this was in the circumstances, or what business factors prompted the change. These issues were not explored in the evidence. 73 [2024] SADC 161 at [185]. 74 [2024] SADC 161 at [212]. -- 29 of 35 -- [2026] SASCA 77 The Court 28 112 Absent some evidential foundation explaining the change, the mere fact of the change could not be said to be inconsistent with the impugned findings to the effect that Mr Zhu determined in June 2022 that he would terminate the contracts after the Sunset Date and put the properties back on the market. 113 None of the asserted ‘incontrovertible facts’ is necessarily inconsistent with the judge’s findings about Mr Zhu’s decision to terminate the contracts. 114 Subject to our consideration of Particular 4.2 in the context of considering the appellants’ argument on causation, below, we dismiss Ground 4. Causation (Ground 3 and Particular 4.2) 115 Ground 3 reads as follows: 3. The LTJ erred in concluding that ‘with the exercise of reasonable diligence on the part of the [Appellants], the Anzac Highway Development could have been completed by 29 December 202[2]’ (Reasons [234]) because: 3.1 The finding was based on the LTJ’s misapprehension about the nature and extent of the Appellant’s reasonable endeavours obligation (referred to above); 3.2 There were no intermediate findings to support the conclusion, such as the steps that the Appellants could have undertaken to progress the works or the source from which the Appellants could have procured materials and labour sufficient to achieve Practical Completion of the contract works by 29 December 2022; and 3.3 The finding was based on the LTJ’s acceptance of the evidence of Mr Sentschuk, whose evidence was incapable of proving the Respondents’ pleaded case, being, relevantly, that if the Appellants had made enquiries with other builders or alternative suppliers, materials and labour would have been sourced and procured such that Practical Completion of the works under the contracts, would be achieved by 29 December 2022 (refer Claim 25.2(i)&(iii); and Reasons [163] and [182]). (Emphasis in original.) 116 Particular 3.1 of this ground depends, again, on the success of Ground 1. For that reason, it fails. 117 Particulars 3.2 and 3.3 engage the question of causation, as does Particular 4.2 of Ground 4. No party suggested that the appellants had an obligation to disprove that their breach caused the failure to complete by the extended Proposed Practical Completion Date. The burden to prove causation remained with the respondents. The respondents at trial invoked Blatch v Archer,75 to the effect that ‘evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted’.76 The 75 (1774) 98 ER 969. 76 Blatch v Archer (1774) 98 ER 969 at 970. -- 30 of 35 -- [2026] SASCA 77 The Court 29 judge accepted the appellants’ submissions that Blatch v Archer deals with how evidence is to be weighed, and not the onus of proof. He accepted that it cannot be used to fill gaps in the evidence. It remained the respondents’ onus to show that the appellants had breached the reasonable endeavours obligation and that the breach had caused the non-satisfaction of the condition precedent to settlement.77 118 As to the required nexus between the failure to use reasonable endeavours and the non-satisfaction of the condition precedent, in Joseph Street Pty Ltd v Tan,78 the Victorian Court of Appeal said:79 It is well established that a party wishing to rescind cannot take advantage of its own ineffective or inefficient measures to comply with its contractual obligations, and that where a vendor’s default has deprived the purchaser of a “substantial chance” that the condition would have been fulfilled, the vendor cannot exercise the right of recission.80 (Footnote in original; emphasis added.) 119 This formulation reflects the observation of Hodgson CJ in Eq in Masters v Belpate Pty Ltd:81 The final matter which requires brief consideration is the relationship between a breach of an obligation, such as Condition A6, and the expiration of the time within which the strata plan has to be registered. In Sanctuary Investments Pty. Ltd. v. St. Gregory’s Armenian School Incorporated (1998) 9 BPR 16,823, Young, J. said that one must “look at whether the person seeking to rescind the contract materially contributed to the non-performance of the condition on which it now bases its rescission. In my opinion, this means that if the time would plainly have expired, even if the breach had not occurred, the breach will not preclude the vendor relying on the condition. However, in my opinion, if one could say that, if the breach had not occurred, there was a substantial chance that the condition would have been fulfilled, that would be enough to deprive the vendor of the right to rescind. If the vendor’s breach has deprived the purchaser of such a substantial chance of this kind, in my opinion, that is enough to enable one to say that the breach has materially contributed to the non-fulfilment of the condition, so that the vendor is precluded from rescinding. (Emphasis in bold added.) 120 While the position is different where a right of rescission is expressly conditioned on a party’s compliance with their obligations,82 the ‘substantial chance’ construction has been consistently applied to cases like this.83 The appellants accepted its correctness and applicability in this case. 77 [2024] SADC 161 at [163]. 78 (2012) 38 VR 241. 79 Joseph Street Pty Ltd v Tan (2012) 38 VR 241 at [47] (Warren CJ, Nettle JA and Cavanough AJA). 80 See Mordue v Kroone (2009) 14 BPR 26,771 at 26,775, [16] per Brereton J and the numerous cases there cited. 81 [2001] NSWSC 169 at [66]. 82 Hall v Foster [2011] NSWSC 295; Yeung v Desnor Pty Ltd (1989) 5 BPR 11,343. 83 Several of the authorities are collected by Nixon J in Alamdo Holdings Pty Ltd v Reece Australia Pty Ltd [2025] NSWSC 946 at [245]. -- 31 of 35 -- [2026] SASCA 77 The Court 30 121 The judge cited the decision of Tamberlin AJ in Hall v Foster,84 referred to earlier, in respect of the content of a ‘reasonable endeavours’ obligation:85 While it is necessary to show that the “best reasonable endeavours” have been used it is not necessary to show that had a particular step been taken it would have produced the outcome sought. It is sufficient if there is a reasonable possibility that it might have the desired outcome and it is this possibility that makes the step one the obliged party should have taken. 122 This was not a formulation of the test for causation, but of what is required by way of materiality to render a measure something that should have been taken under a ‘reasonable endeavours’ obligation. It is apparent that this is how the judge understood the ‘reasonable possibility’ concept, namely, as informing the question of breach. The judge set out the respondents’ pleading, in paragraph 25.2 of the Statement of Claim – Revision 1, of the matters the appellant failed to do and said:86 I agree with the applicants that if such measures were taken, and they might have been effective in achieving the completion of the development by the above date, then those measures should have been taken, and a failure to take them would constitute a failure to make reasonable endeavours to achieve that result. 123 The test for causation relevant to this case is the ‘substantial chance’ test articulated in the authorities set out earlier. That is, had the appellants used their reasonable endeavours to achieve practical completion, there was a substantial chance that the building works would have been completed by the extended Proposed Practical Completion Date. 124 The judge’s reasoning to causation progressed in the following way. Following his discussion of the competing expert evidence, recounted earlier, he said:87 In all the circumstances, where their evidence differs, I accept the evidence of Mr Sentschuk, and find on the balance of probabilities that with the exercise of reasonable diligence on the part of the respondents, the Anzac Highway Development could have been completed by 29 December 2022. 125 We do not read the use of ‘could’ here as merely signifying a bare possibility. In context, we read it synonymously with ‘would’. That is not least because of the judge’s acceptance of Mr Sentschuk’s evidence to the effect that a price increase variation of $50,000 per unit would have been more than sufficient to offset any increased cost of labour and materials that may be occasioned by the need to source new or alternative suppliers, with which Mr Paddick agreed in cross-examination. One of the respondents had responded positively to the proposed increase before Mr Zhu shut down further negotiations. In these circumstances, any shortfall to the 84 [2011] NSWSC 295. 85 Hall v Foster [2011] NSWSC 295 at [59], cited in [2024] SADC 161 at [181]. 86 [2024] SADC 161 at [183]. 87 [2024] SADC 161 at [234]. -- 32 of 35 -- [2026] SASCA 77 The Court 31 developer after good faith negotiations had been exhausted were not likely to be ruinous. 126 Mr Sentschuk’s concluding opinion, which the judge accepted and which incorporated his view that the proposed $50,000 increase was ‘more than sufficient’ to cover the increased cost of labour and materials, was:88 It is the opinion of this builder, inspector and developer that (the development) could have and should have, been able to be completed to a satisfactory conclusion in the timeframe provided, and that whilst the Covid-19 pandemic caused delay and difficulty, it should not be attributed as the cause of this project not being completed in the timeframe. (Emphasis added.) 127 In context, it is evident that the judge’s use of the word ‘could’ involved an acceptance of this opinion, which forcefully supported the existence of a substantial chance that seeing the negotiations through would have seen practical completion achieved by the extended Proposed Practical Completion Date. 128 Next, as discussed earlier, the judge found that Mr Zhu realised he could make a larger profit by not continuing with the negotiations and terminating the contract:89 For that reason, he made no effort to achieve practical completion by 29 December 2022. 129 This is a significant finding going to breach, but also, when read together with the paragraph quoted immediately above, causation. Mr Zhu gave evidence that by 29 December 2022, the units were 75 per cent complete.90 On the judge’s finding, that was some six months after Mr Zhu had determined to make no effort to complete. It was on this basis that the judge then concluded:91 Mr Otto Zhu delegated, or in the words of Tamberlin AJ in Hall v Foster, ‘abdicated’ responsibility for meeting his obligation under Special Condition 10.1(6) of the contracts, to use reasonable endeavours to achieve practical completion by that date, to the builders. He failed to do anything substantial towards discharging his personal obligations in this regard. 130 The appellants complained that the difficulty with this course of reasoning was that the finding of causation was unsupported by anything other than the observations by Mr Sentschuk. That is, the judge set out the things that Mr Sentschuk said should have been done, expressed a preference for Mr Sentschuk’s evidence and then effectively jumped straight to conclusions of breach and causation. 131 In the submission of the appellants, the delay caused by the COVID-19 pandemic was an objective surrounding circumstance, not something they caused. 88 [2024] SADC 161 at [217]. 89 [2024] SADC 161 at [249]. 90 [2024] SADC 161 at [247]. 91 [2024] SADC 161 at [251]. -- 33 of 35 -- [2026] SASCA 77 The Court 32 The evidence was that there were difficulties in obtaining labour and materials and limited options available to address that. The development was properly funded. The appellants’ ultimate complaint appeared to be that the judge had not explained how the identified breaches affected the ultimate result. As the appellants put it rhetorically, what did Mr Zhu do to make the building works go slow? 132 In our view, this argument raises a straw man in response to the case prosecuted by the appellants through Mr Sentschuk. This was to the effect that Mr Zhu did not do what was reasonably available to him to mitigate the effects of the pandemic. The judge did not, and did not need to, analyse the question of causation from the perspective of what the appellants did to delay the project. The judge accepted that the appellants had a ‘reasonable endeavours’ obligation to take steps to mitigate the delays caused by the COVID-19 pandemic. 133 A path was clearly open for the appellants to do so, namely, by seeking alternative solutions and, to the extent necessary, negotiating a price increase. One of the respondents had already indicated amenability to that course. Mr Otto Zhu deliberately failed to take it up in order to terminate after the Sunset Date and re-sell the lots for a greater profit.92 On any view, these findings sustained a conclusion of causation or, to deploy the language in the authorities, that had Mr Zhu not determined to take this course, there was a substantial chance that the units would have been finished by the extended Proposed Practical Completion Date. 134 Finally, the appellants submitted that these matters fell outside the domain of the developer and within the realm of the builder. For the reasons just given, and those supporting our conclusion on Ground 1, we reject that submission. 135 It follows that Particular 4.2 of Ground 4 must be dismissed. The findings at [243] and [249] about Mr Zhu’s determination to terminate the contract and not resolve negotiations were supported by the evidence. They were not glaringly improbable or contrary to compelling inferences. 136 Particular 3.2 of Ground 3 must also be dismissed. The judge did not need to make any further finding about what the appellants could have undertaken to progress the development. The judge found that Mr Zhu determined to re-sell the units at a higher price after the Sunset Date and deliberately halted negotiations on the price rise. These findings were sufficient, in light of the expert evidence that the judge accepted, to support a conclusion of causation. 137 As to Particular 3.3, it is true that the findings were based on the evidence of Mr Sentschuk. However, contrary to this particular, for the reasons given, Mr Sentschuk’s evidence was capable of providing support for the findings. The question was not whether practical completion would have been achieved. It was 92 [2024] SADC 161 at [243], [249] -- 34 of 35 -- [2026] SASCA 77 The Court 33 whether, had Mr Zhu taken the steps that were manifestly open to him, there was a substantial chance that it would have been achieved. 138 We dismiss Ground 3 and the balance of Ground 4. Conclusion 139 We dismiss the appeal. -- 35 of 35 --