McKenzie & Anor v Miller [2006] NSWCA 377

McKenzie & Anor v Miller [2006] NSWCA 377

The respondent was liable because, under the Client/Architect Agreement, he was obliged to review his earlier opinion of probable construction cost after preparing the contract documentation and before the building contract was entered into, and to warn within a reasonable time once he had reason to believe that expenditure would vary significantly. The cost plus nature of the building contract did not remove those obligations. The $202,000 estimate continued to represent the probable cost of the works to be built under the approved plans and specifications, although the specifications involved a higher standard and materially greater probable cost. The respondent's failure to update the...

Jurisdiction
Australia
Judgment Date
20 December 2006
Procedural Posture
Civil Appeal / Appeal From District Court Dismissal of Claims for Breach of Contract, Negligence and Breach of the Fair Trading Act 1987 (nsw)
Outcome
Appeal allowed; District Court orders set aside; judgment entered for the appellants on liability; proceedings remitted to the District Court for assessment of damages only.
Legal Topics
["architect's Estimate of Probable Construction Cost" 'cost Plus Building Contract' 'breach of Client/architect Agreement' 'misleading or Deceptive Conduct' 'duty of Care of Architect' 'assessment of Damages']
['contract Law' 'negligence' 'consumer Protection' 'building and Construction' 'professional Liability'] ["architect's Estimate of Probable Construction Cost" 'cost Plus Building Contract' 'breach of Client/architect Agreement' 'misleading or Deceptive Conduct' 'duty of Care of Architect' 'assessment of Damages']

Case Brief

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Procedural Posture

Civil Appeal / Appeal From District Court Dismissal of Claims for Breach of Contract, Negligence and Breach of the Fair Trading Act 1987 (nsw)

Legal Issues

  1. 1 ['Whether the respondent breached the Client/Architect Agreement by failing to review and update opinions of probable construction cost at the contract documentation stage.' 'Whether the respondent breached clause B1.04 by failing to inform the appellants within a reasonable time that authorised expenditure was likely to be varied significantly.' "Whether the respondent's estimate of construction costs and failure to update it constituted misleading or deceptive conduct under s.42(1) of the Fair Trading Act 1987." 'Whether the respondent breached his duty of care in contract and at common law by providing and failing to update the estimate of probable construction cost.' "Whether the primary judge erred in rejecting the appellants' claims and in failing to address critical evidence."]

Ratio Decidendi

The respondent was liable because, under the Client/Architect Agreement, he was obliged to review his earlier opinion of probable construction cost after preparing the contract documentation and before the building contract was entered into, and to warn within a reasonable time once he had reason to believe that expenditure would vary significantly. The cost plus nature of the building contract did not remove those obligations. The $202,000 estimate continued to represent the probable cost of the works to be built under the approved plans and specifications, although the specifications involved a higher standard and materially greater probable cost. The respondent's failure to update the...

Court Disposition

Appeal allowed; District Court orders set aside; judgment entered for the appellants on liability; proceedings remitted to the District Court for assessment of damages only.

Orders

  • ['Appeal allowed.' 'Set aside the orders made by Judge Balla on 14 December 2005.' 'Judgment for the appellants against the respondent on liability in respect of his breaches of the Agreement between the appellants and the respondent dated 27 May 2001 of clause B1.01 in respect of the provision of the services...