Marburg Management Pty Limited v Helkit Pty Limited Sca [1990] ACTSC 23; (1990) 100 FLR 458 (25 June 1990)

SUPREME COURT OF THE ACT

MARBURG MANAGEMENT PTY LIMITED v. HELKIT PTY LIMITED
S.C.A. No. 34 of 1989
Contract
[1990] ACTSC 23; (1990) 100 FLR 458

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Contract - Alleged frustration by proposed Union ban - Head contractor requiring sub-contractor to cease work to avoid threatened ban - Whether breach of contract - Measure of damages

Cowey v Liberian Operations Ltd (1966) 2 Lloyd's Rep 45

Felthouse v Bindley [1862] EWHC J35 (CP); (1862) 11 CB NS 869; 142 ER 1037

Gray v Lang (1955) 56 SR (NSW) 7

Central London Property Trust Ltd v Hightrees House Ltd (1947) KB 130

Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406

Hickman v Haynes (1875) 10 CP 398

O'Connor v S.P. Bray, Limited (1936) 36 SR (NSW) 248

HEARING

CANBERRA
25:6:1990

Counsel for the appellant: Mr G.J. Lunney

Instructing solicitors: Messrs Gillespie-Jones and Co

Counsel for the respondent: Mr I. Nash

Instructing solicitors: Messrs Snedden Hall and Gallop

ORDER

1. The appeal be allowed in part.

2. There be substituted for the judgment delivered by the learned Magistrate on 3 May 1989 judgment for the respondent in the sum of $7,355.05.

DECISION

This is an appeal against a Judgment handed down in the Magistrates Court on 3 May 1989. In the action before the learned Special Magistrate, Helkit Pty Limited (the respondent) was plaintiff and Marburg Management Pty Limited (the appellant) was defendant. The action arose out of a contract by which the respondent agreed to carry out certain building work, specifically bricklaying work, for the appellant.

2. By its Ordinary Claim in the action in the Magistrates Court the respondent claimed $7,494.00, cost(s) and interest. It alleged that on or about 7 May 1987 the appellant entered into an oral agreement in respect of the building work to which I have referred. The claim then proceeded:-
"4. Pursuant to the said contract the plaintiff
has at all material times been ready willing

and able to carry out the said work under
the contract and in fact has carried out
work on the said site in May 1987.
5. Pursuant to the said contract the defendant
has paid to the plaintiff the sum of
$4,256.00 to date.
6. In breach of the said agreement the
defendant has refused to allow the plaintiff
to complete the said work on the said site
and has instructed the plaintiff not to
complete any of the remaining work.
7. As a result of the said breaches of the
contract by the defendant the plaintiff has
suffered loss and damage being the benefit
of the balance of the contract in the sum of
$7,494.00 being the contract price in the
sum of $11,750.00 less the amount already
paid."

3. Subsequently the respondent amended its particulars of claim so that paragraphs 7 and 8 then read:-

"7. (1) As a result of the said breaches of
the contract by the defendant the
plaintiff has suffered loss and damage
being the benefit of the balance of the
contract in the sum of $7,494.00 being
the contract price in the sum of
$11,750.00 less the amount already
paid.
(2) Further, or in the alternative the
plaintiff has suffered loss and damage
being loss relating to wages paid out
to employees of the plaintiff during
the period 28 May 1987 to 17 June 1987,
particulars of which have been supplied
to the defendant by letter dated
21 August 1987 (Para 4(c)).
(3) Further and in the alternative the
plaintiff has suffered loss and damage
being loss of profit on the balance of
the contract price ($7,494.00) at the
rate of 12.5%.
8. The plaintiff claims damages plus costs and
interest."

4. The appellant filed a defence to the Particulars of Claim and a Cross-Claim. Subsequently it amended its Grounds of Defence.

5. In the events that have happened it is unnecessary to refer to the paragraphs 1, 2 3 and 5 of the Amended Notice of Grounds of Defence. In paragraph 4 the appellant denied the facts alleged in paragraph 4 of the Particulars of Claim and in particular denied that the plaintiff was ready willing and able to carry out any work on the building site from 12 noon on 26 May 1987 until 13 June 1987. It averred that the respondent was unable to carry out any work on the site after 13 June 1987 as it had no equipment on the site that would have enabled any work to be carried out. It denied the allegation in paragraph 6 of the Particulars of Claim that it had refused to allow the respondent to complete the work on the site or had instructed it not to complete any of the remaining work.

6. Alternatively, it alleged that any such agreement as might have existed was frustrated.

7. Finally it alleged in answer to the whole of the respondent's claim that before the beginning of the proceedings the respondent had begun proceedings in the Federal Court of Australia claiming relief against the Building Workers Industrial Union of Australia and the Building Workers Industrial Union of Australia ACT Branch and one Sam Scott for, inter alia, damages in respect of the same losses said to have been incurred as a result of the alleged breach of the agreement by the appellant. It further alleged that those proceedings had been compromised and as a result the respondent had elected to seek relief against the defendants in the Federal Court rather than against the appellant. By these allegations, I understand the appellant to be claiming that the doctrine of election operated so that the respondent might not then lawfully proceed further against the appellant.

8. The appellant also filed a cross-claim by which it pleaded that the respondent had refused to or was unwilling or unable to carry out the balance of the work remaining to be performed on the site whereby the appellant suffered loss and damage which was particularised at $1,200.00 being the alleged increased cost of having the work completed by another company and a further $8,000.00 being damages for the delay said to have been caused by the respondent's failure to perform the agreement in accordance with its terms. It, too, claimed costs and interest.

9. The learned Special Magistrate found that a contract had been entered into between the appellant and the respondent in respect of bricklaying as the respondent had alleged. He said that the contract was one which could be terminated at any time by either party virtually without notice. What he meant by that is not clear since he accepted the evidence of Leslie James McDermott, a director of the respondent, that he had agreed with Mr Marburg of the appellant to lay approximately 21,000 bricks for five toilet blocks, 2,600 blocks for a retaining wall and the brickwork for 35-40 doors. No reference to termination of the contract on notice appears to have been made and, no doubt, if it were to be terminated it would have been on the basis of an implied term that reasonable notice, having regard to all the circumstance, would, in the absence of circumstances which would warrant an instant dismissal from the contract, have had to be given. In fact, his Worship seems to have found that the contract was an entire contract. His finding in this regard was expressed as follows:-

"...it was agreed that the plaintiff would
proceed with the job, not block by block or brick
by brick, but with the entire bricklaying work at
that time required."

10. His Worship's finding as to the work agreed to be performed by the respondent and the prices to be paid for it by the appellant is not now challenged.

11. The respondent began work on the contract on 10 May 1987. On 26 May 1987 Mr Sam Scott, an organiser with the Building Workers Industrial Union, visited the site and apparently had a conversation with Mr Marburg. Marburg then informed McDermott that it had been alleged that he, McDermott, had some problem with the Union which had a black-ban on him and that Scott had said that if McDermott were not off the site by mid-day he would put a ban on the whole job.

12. McDermott denied any problem but agreed to cease work until 1.00pm so that Marburg could consult with the Master Builders Association. Meantime he sent his workmen to the Mitchell Tavern to wait until he told them to return. At about 2.00pm, or perhaps later that day, Marburg told McDermott that the Master Builders Association thought that he could go back to work and he asked McDermott to do so. McDermott demurred because of the hour and because the men had been at the Mitchell Tavern for over two hours. Later that evening Marburg phoned McDermot to say that Scott had returned to the site in the afternoon and had repeated his threats. Marburg suggested that McDermott should ring Noel McCann, one of the developers of the project. He did so and a meeting was arranged for the next morning on the site. The result of that meeting was inconclusive and it was then arranged that a further meeting should be held the next morning at the Union's offices. It was expected that Scott would be at the meeting.

13. However, when McDermott arrived at the Union offices next morning he was subjected to some unpleasant remarks. He did not remain but returned to the site.

14. It appears that on the day before, 27 May, there had been discussion between McDermott, McCann and Marburg, McCann and Marburg saying that McDermott would have to do something to fix up the problem with the Union and McDermott saying that he could not see where he had one. It was this, apparently, that led to the arrangement of the meeting on 28 May 1987.

15. Having returned to the site on 28 May 1987, McDermott started work with his son. The other men of the respondent's work force were at the Mitchell Tavern where McDermott had instructed them to go to wait until he told them to come to work. Later that morning he saw Marburg again with McCann. McCann said to him that he appeared to have a big problem with the Union, that the Executive of the Union had a black-ban on him, that they did not object to his working as a bricklayer but would not allow him to be Manager of a company involved in laying bricks. In the result, it was McCann, he believed, who told him that he had seven days to go away and sort out his problem with the Union and to contact (as he thought, he was not sure) McCann when he had done so. McCann then said to him,

"You will have to cease work."

McDermott asked whether he was being denied access to the site and McCann replied,

"No, not really, but we are asking you to stop
work."

McDermott then said,

"I want you to put that in writing."

He then said to Marburg,

"I want you to tell me to stop work, because you
are the builder."

Marburg said, so he believed,

"OK. Stop work and we will put it in writing."

16. The learned Special Magistrate did not find that the conversation just quoted took place in exactly those words but it is obvious that he accepted them as setting forth accurately enough what had happened because he said in summary form,

"There (at the site), after some conversation
about the Union attitude he was asked to stop
work and he asked for it to be put in writing.
He also said that he was told he had seven days
to sort it out with the Union."

17. The learned Special Magistrate then found that on 29 May 1987 a letter was written by McCann. As he said, the letter, far from giving McDermott seven days to reconcile any alleged differences with the Union, claimed that he had been in breach of his contract since 26 May 1987 and was unable to complete the balance of the work. In the circumstances, the letter said, there was no alternative but to engage someone else who was capable of having the work carried out.

18. Oddly enough, when the letter was tendered it was rejected but got into evidence as an annexure to the Affidavit of McDermott which he swore on 5 June 1987 in support of the respondent's application to the Federal Court of Australia. Really it does not seem to matter. The letter was in conflict with the result of the discussion regarding extension of time of seven days which had been offered McDermott by Marburg and McCann, obviously acting together. What McCann said was adopted by Marburg so that McCann may therefore be taken to have been the agent of the appellant during that conversation. He would also have been taken to be the agent of the appellant had the letter of 29 May 1987 been in accordance with the terms which had been discussed on 28 May 1987 but since he signed that letter on behalf of some company not otherwise identified, since the letter is also signed by one Shepherd on behalf of another company, also not identified, and since it was not in accordance with those terms, I think the learned Special Magistrate was perfectly correct in rejecting the letter as evidence in the first instance.

19. The result, in my opinion, was that it had apparently been agreed between the parties that the respondent should have until 4 June 1987 to settle his dispute with the Union. Whether this apparent agreement constituted a variation of the contract or a waiver by the plaintiff of its rights under the contract is another matter.

20. The learned Special Magistrate made some other findings which I set out below:-

(a) On 28 May 1987 Marburg told McDermott that
he would pay for work done up to that date.
McDermott sent an account in respect of that
work and Marburg paid it at once.
(b) On 28 May 1987 McDermott also said to
Marburg that he would seek a Federal Court
injunction against the Union. Marburg
replied, "Good, go and get it and we will do
something about it".
(c) Marburg was willing to allow the respondent
a further seven days after the first seven
within which it might clear up any
difficulties with the Union. (The sentence
in which the learned Magistrate couches his
finding concerning this evidence is in
peculiar form. The Reasons for Judgment
state, "He also gave a peculiar piece of
evidence and then he said that in addition
to the seven days given on 28 May he had
given a further seven days but without
informing McDermott." It is accepted by
both Counsel that what must have been meant
was that although Marburg was willing to
allow a further seven days beyond the first
seven days allowed the respondent, he did
not inform McDermott or anyone on behalf of
the respondent of this.)
(d) Progressively, until about 13 June, the
respondent began to remove equipment from
the site.
(e) On 10 June Sam Scott told Marburg that the
injunction application was listed for that
afternoon but Marburg made no enquiries as
to the result of that application, expecting
McDermott to contact him, and was unaware of
the result when he engaged another gang.
(f) A new bricklaying gang unconnected with the
respondent, began work on 17 June 1987.
(g) McDermott rang Marburg on 23 June 1987 and
said, "The bans are lifted, I am coming
back", to which Marburg replied, "Too late,
I gave you seven days".

21. As to the findings set out in sub-paragraph (d) above, it is noteworthy that the learned Magistrate did not find that all of the respondent's equipment was removed from the site on or by 13 June 1987. Marburg's evidence was that it had been. He was asked in chief the following questions and gave the answers recorded:-

"...on Saturday, 30 May did you observe something
on the site?---Yes, some bricklayers equipment
was removed from the shed on Saturday, 30th.
...HIS WORSHIP What was removed from the shed,
I missed that?---Some equipment, some of their
barrows and sheets.
MR WILCOX A few days later did you observe
something?---That is right. I believe - I think
it was the following Wednesday, some more
scaffolding equipment was taken off site. And I
think June, 10th which I think was another
Saturday, all their equipment, barrows, the lot
was taken off site.
Well, the correct date seems to be 13 June, all
right?---Sorry."

13 June 1987 was a Saturday.

22. It will be convenient to set out some further questions and answers which followed immediately:-

"Now, did Mr McDermott or - did he return to the
site?---No.
Did he contact you at all?---No.
Did he or did the company help him report to you
anything about the proceedings in the Federal
Court that Mr McDermott had told you about?---
No... not then.
Was there anything happening on site at all after
the removal of the bricklayers gear late in May
and early in June?---Yes, after all the equipment
was removed from site, I undertook to put another
bricklaying gang on then assuming that Helkit was
not coming back.
And how long was the site idle before work
resumed?---Well, there was no bricklaying work
till, I think it was 17 June. Yes, it was
17 June that I finally had another bricklayer to
start."

23. In cross-examination the following questions were put and answers received:-

"You see at any time before you engaged this new
bricklaying gang the only equipment that had been
taken by Helkit was the mixer and some barrows,
wasn't it?---No, there was scaffold and all their
trowels and everything else. I mean it was not
only just - it was their total equipment.
I suggest to you that the scaffolding was left
there until it became obvious that a new gang of
bricklayers had taken over the site?---No, that
is not correct.
I suggest to you that the only equipment that was
removed by Helkit during the time that they were
off the site was the portable equipment, if you
like, barrows, mixer?---No, that is not correct.

24. Later, Counsel for the respondent returned to the subject:-

"So you were under no illusion when you put your
new bricklayers on that Mr McDermott was in the
process of doing what he could on your
instruction to sort the problem out with the
Union, is that not right?---No, that is not
correct because if Sam Scott was right and I
never followed it through, Sam Scott was right
that there was an injunction on 11 June I would
assume that Les or Helkit would have been back on
site the next day if assuming they had got their
problem. Then on the Saturday, two days later,
the stuff went and there was an assumption that
he did not get it so.
You say the stuff went. I am putting it to you
that only the portable equipment went; the
barrows and the mixers, and trowels maybe?---As
of 13th, on Saturday 13th there was not a
bricklayers implement, anything left on site, it
was all gone.
And it is not unusual when there is a possible
problem with the union for the people to take the
portable stuff off site, is there?---Well, I had
it locked up in a container. There was no reason
to take it.
...I am putting to you when do you say the first
occasions was that the stuff went off, it was the
portable stuff that was gone, wasn't it?---Yes,
that you could load onto a truck.
Stuff that you could load back onto a truck and
tip it back onto the site very quickly?---That is
correct.
...I think you gave your evidence this morning
that it was 30 May that you first saw the
material having gone from the site, the portable
things?---I think that is correct, yes.
Two days after you had told Mr McDermott to go
and sort his problem out with the Union and given
him time to do so?---Can I check my diary if that
is right?
Check what you like?---Yes. Well on Saturday,
30th they just removed their brick saw."

25. McDermott gave evidence on the point also:-

"Now, at some stage before 15 or 16 June, did
you, or someone on Helkit's behalf, move
equipment off the site at Mitchell?---I did,
personally.
Yes. And when was that done, to the best of your
recollection, please?---I can tell you exactly
when it was done. It was done on 13 June.
...All right. And was the machinery taken away
somewhere?---It was taken to my address.
And what was your ability, or otherwise, to put
the machine back on to the site, if required?---
An hour. Can I just say something there, please?
Yes?---That the only equipment that I took off
site was the actual portable equipment, which was
the mixer and the barrows. That scaffolding and
other stuff remained on site."

26. After considering all the evidence on the question, it seems to me that what the learned Magistrate meant when he said that the respondent progressively began to remove the equipment from the site until about 13 June 1987 was that it had removed all its equipment from the site by that date. Admittedly this involves a finding that what he said meant that he did not accept McDermott on the point. But this seems to be logical since one cannot imagine that a man of McDermott's temperament as it shines through the transcript of evidence, would have made no reference to the fact that his equipment was on the site when another bricklaying gang had moved in to work on the task which he had been engaged earlier to perform. Although the learned Magistrate did not accept Marburg's evidence concerning the making of the contract, there is nothing in the Reasons for Judgment which he gave to indicate that he thought him unworthy of credence on any matter. What he said was,

"I bear in mind that the matters deposed to by
the parties some two years ago and memories fade
and become confused. But on the balance of
probabilities the version given on behalf of the
plaintiff is obviously in the main more
plausible.
Much of it is not of much consequence in the
event because it becomes common ground that the
contract was entered into with the plaintiff
company."

Thereafter follow a series of findings on matters about which there appears to be little dispute. His Worship later said,

"McDermott's evidence is supported by the men he
engaged to do the work while Marburg stands
alone. That is merely mentioned as a factor and
is not significant to my mind except that it
shows the name of one of the witnesses as
Angus Scott Jessop who agreed he was known also
as Angus Scott and he had left the piece of paper
on Marburg's desk, but on behalf of the
plaintiff. He had no discussion with Marburg but
worked on site for two days unpaid."

That passage seems to me to be significant because the evidence from Jessop supports evidence given by Marburg on this point, at least to a degree.

27. It is significant also that Marburg gave evidence that he kept a diary. He said, "I basically wrote a daily diary." He was asked whether, if he were asked questions about the various events, he had made diary notes from time to time as the matter unfolded. In cross-examination he was asked,

"And you say in your diary, do you, that on
June 13, "Bricklayers equipment taken away, no
contact"?"

He replied that he remembered an entry to that effect which meant that there was no contact, not contract, between McDermott and him.

28. Marburg referred to the existence of the diary in his evidence in chief and identified it as being "The brown book here". Marburg's Affidavit of Discovery, sworn 27 April 1988, discloses the existence of a diary which included, at least, entries on the following dates 4 May, 7 May, 19 May, 26 May, 27 May, 28 May, 30 May, 3 June, 13 June, 17 June and 23 June. It seems to me to be significant that no challenge was made to the existence in the diary of the entry concerning the removing of the bricklayers' equipment and this when on one occasion cross-examination was directed to a specific entry regarding price in the diary.

29. In relation to the finding made in sub-paragraph (e) set out above, it is true that Marburg gave evidence that on 10 June 1987 Sam Scott told him that the injunction Papplication was listed for that afternoon but in cross-examination it was put to him that he knew in fact from Mr Scott on about 10 June that that had come to some sort of head in the Federal Court on that day and he replied, "Yes, 11 June, 10th or 11th, yes." The cautious way in which cross-examining Counsel put the question seems to indicate that his instructions indicated that that conversation could have taken place only on 11 June and this is supported, I think, by the fact that the Short Minutes of Order in the Federal Court are dated 11 June 1987. Incidentally, those Short Minutes were rejected by the learned Special Magistrate when tendered but they were allowed in evidence by consent before me. I am unable to see why they were rejected by the learned Magistrate since both parties agreed that they might be placed in evidence before him.

30. The last matter of fact about which there is a dispute is whether McDermott told Marburg that the bans had been lifted on 12 June 1987 or on 23 June 1987. As to this McDermott said,

"I rang Mr Marburg, I believe, on 11 or 12 June
to inform him that the bans - that if there were
a ban - that the bans or the conflict had been
resolved with the Union and that the bans were
lifted and I was now ready to go back to work."

He said that Marburg then instructed him to ring McCann and he did to be told by McCann to wait until he (McCann) got back to him with a view to starting the job again. Objection was then taken by Counsel for the appellant that it had not been shown that McCann was an officer or an agent of the respondent and further evidence of what allegedly took place between McDermott and McCann on that occasion was rejected.

31. Marburg, on the other hand, said that he heard nothing more from McDermott directly until he received a telephone call on the night of 23 June from McDermott to ask whether he had heard from the Unions. On his reply that he had not, Marburg said that McDermott then said to him that he had a Federal Court injunction, that he was coming back to start work and that he wanted to start on the next day. Marburg replied,

"Well, that's a bit too late, I gave you seven
days to organise yourself and I've got somebody
else to finish it."

32. Against the background of the whole case, I cannot but think that what the learned Magistrate meant by the finding which I have earlier set out concerning 23 June 1987 was that when Marburg engaged the second gang of bricklayers he was unaware of the outcome of the application to the Federal Court and did not become aware of the outcome until 23 June 1987. That is a plain matter of fact and I think I am bound by the Magistrate's finding as I interpret it. Again, it is possible that Marburg's diary entry for 23 June 1987 might have been tendered pursuant to the provisions of s.28 of the Evidence Ordinance 1971 but the respondent wwas not bound to tender that evidence. On the other hand it is significant that no cross-examination was directed to show that, despite the fact that the diary including the entry for that date had been discovered, the diary did not contain an entry relevant to the proceedings. It was, in any event, a matter for the learned Magistrate and I think his finding must stand.

33. But what was the effect of the finding of fact made by the learned Magistrate? I think the first effect was that there was no ban imposed upon the respondent company by the Building Workers Industrial Union. There was talk of it and no doubt the appellant company, through Marburg, and the developers, through McCann, were rightly concerned that things might get out of hand and considerable delay be caused to the project. But there was no suggestion that the respondent company itself could not carry out the work. The Union's apparent target was McDermott against whom, alone, its campaign was directed. There could not be, in my opinion, in those circumstances a frustration of the contract.

34. When considering the matter, it seemed to me that not enough attention had been paid to the question of variation of the contract as a result of what took place on 28 May 1987. It seemed that there was a strong possibility that the parties had agreed, even though without consideration, to a variation of the contract so that it might be suspended for a week while an approach was made to the Federal Court or other steps taken to ensure that the threatened ban might not have any effect on either the appellant or the respondent. Counsel for the respondent submitted that a mere unilateral notification by one party to the other in the absence of an agreement cannot constitute a variation of a contract. He cited in support of this proposition Chitty on Contracts, General Principles 26th Edn at para 1599 and Cowey v Liberian Operations Ltd (1966) 2 Lloyd's Rep 45. That was a decision of his Honour Judge Block in the Mayor's and City of London Court and is clearly, with respect, correct on its facts. But the question was one of simple interpretation of a contract. As his Honour put it at p 49,

"The simple issue is whether or not Mr Cowey
ought to have had three months, as he alleges, or
one month as the defendant alleged. In law it is
quite clear that Mr Cowey was on a basis of three
months' notice when he entered the employment,
and in order to bring that state of affairs to an
end it would be necessary for the defendant
company to terminate the existing employment and
then enter into another contract of employment
providing for the one months' notice."

35. His Honour cited Felthouse v Bindley [1862] EWHC J35 (CP); (1862) 11 CB NS 869; 142 ER 1037, affirmed without discussion (1863) 7 LT 835. But that case too is clearly distinguishable from this. On the other hand, in Gray v Lang (1955) 56 SR (NSW) 7 at p 11 the Supreme Court sitting in Banco said,

"Whether one refers to it as forbearance,
variation or waiver, or even estoppel, it cannot
be disputed that at common law contractual
obligations may be affected by a promise made
without consideration and which is intended to
create legal relations and which to the knowledge
of the person making the promise was going to be
acted upon by the person to whom it was made, and
which was in fact so acted upon. In such cases
courts of common law have insisted that the
promise must be honoured."

See also Central London Property Trust Ltd v Hightrees House Ltd (1947) KB 130 and Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406. In Gray v Lang at p 11 also, the Court referred to Hickman v Haynes (1875) 10 CP 398 where the buyer of goods verbally asked the seller to extend the time for acceptance and the seller assented. Lindley J regarded the case as a waiver by the buyer of delivery by the seller, and the case appears to be an authority for the proposition that if A abstains at B's request from insisting upon performance according to the strict letter of the contract B is compelled to treat this indulgence as effective. There are also cases at law which appear to establish the rule that even the party who grants the indulgence cannot go back on his agreement. The Court discussed the matter at length but I forbear from analysing that discussion further, being content to accept what I have already said as sufficient for my purposes.

36. I think that there was to be implied in the contract a term that, once the respondent had been given appropriate possession of the site, it should be allowed to retain that possession and to continue work on the contract until it was completed or otherwise lawfully determined. McDermott did not, as it seems to me, waive the respondent's right to have that term complied with in the conversation of 28 May 1987. He was angry about the delay imposed and thought it unnecessary. I do not think that his actions thereafter amounted to a variation of the contract or a waiver of the term so as to raise an estoppel against the respondent. He did what he did, the respondent having been unlawfully dismissed from the site, at least temporarily.

37. It ought to have been obvious to the appellant that damages would flow from any action which the appellant had asked McDermott to make. Such damages were, I think, within the contemplation of the parties. Indeed this seems to have been actual, not deemed contemplation, as witness the docket, Exhibit 3.

38. But the dismissal extended only until 4 June 1987. There is not, in my opinion, any doubt that had McDermott advised Marburg on 11 June 1987 of the result of the proceedings in the Federal Court of Australia, Marburg would have been bound, and indeed on his evidence would have accepted that he would have been bound, to allow the respondent to continue with the contract. Marburg did not attempt to contact McDermott even though he knew that something had happened or was likely to have happened in the Federal Court of Australia on 11 June 1987. But it is also clear that, by this time, the parties were very much at arms length and on 13 June 1987 the apparent abandonment of the site by McDermott would have led Marburg, as he said it did, to believe that the contract had been abandoned by the respondent. At that point, it must be remembered, any moneys that had actually been earned by the respondent (as it were on a quantum meruit) had been paid and paid promptly.

39. I think that the breach of the contract, there being no valid reason for the direction to cease work, must sound in damages, at least to 11 June 1987.

40. Thereafter, however, the problem becomes more complex. On the findings of fact made by the learned Magistrate, McDermott was well aware of the results of the Federal Court application on 11 June 1987 or must have been aware of it very shortly thereafterwards, certainly no later than the day following.

41. It is a matter of considerable surprise that he did not immediately inform Marburg of the result of the application to the Federal Court but the learned Magistrate's finding indicates clearly, I think, that he did not and that Marburg was aware of the proceedings going on in that court only by virtue of what Scott had told him. Even then, all he knew from Scott was that some action was being taken in the Federal Court on the afternoon of 11 June 1987.

42. Had McDermott told Marburg on that day of the order made in the Federal Court by consent and had he indicated to him that he was ready to return to work immediately, there would have been no doubt, I think, that the appellant would have been obliged to let the respondent return to the job. The respondent's work was obviously satisfactory and the reason assigned by the appellant with the direction to cease work would no longer have had any colour of validity, even the spurious validity which the appellant claimed it had in the first place.

43. But, according to the findings, as I interpret them, of the learned Special Magistrate, the respondent made no attempt to advise the appellant of the result of the proceedings in the Federal Court until 23 June nor did it make any attempt to return to work until that day. That being the case, and since it had already removed its equipment from the site, it seems to me that it had apparently evinced an intention no longer to be bound by the contract.

44. In the result, therefore, I think the respondent was entitled to damages for the breach of the contract evidenced by the direction to stop work given it by the appellant. Since the respondent did not evince an intention otherwise to abandon the contract, it seems to me that the damages flowing from the breach are those which might reasonably have been expected to be within the contemplation of the parties. I think that, in the result, the respondent was entitled to damages in respect of the period from 28 May to 11 June. It should not get damages in respect of any period thereafter because clearly it could have given notice to the appellant on 11 June that it was able to proceed and should have done so.

45. The damages should be quantified on the basis of the cost to it of having its workforce idle during that fortnight as a result of the breach. It could hardly have been expected by the appellant that the respondent would be in a position to obtain work immediately for his bricklaying gang when it was effectively dismissed from the site. It is significant that the appellant paid without demur the claim made by the respondent in respect of the period of three hours during which work had been stopped on 26 May 1987. See Exhibit 3. The wages for the respondent's work force for a fortnight, assuming that ending 29 May 1987 to be an average week, would have been, according to Exhibit B, $3,595.60 gross and $2,935.80 net after taxation. Workers compensation, according to the Schedule attached to Exhibit B, would have amounted to 40.1% of the net wages paid or $1,177.25. Provision for long service leave would have amounted to $73.40 and for B.U.S. to $13.84. These figures total $4,860.09. To that should be added $607.51 representing a profit margin of 12%. In my opinion, therefore, the total amount of damages which was due the respondent as a result of the appellant's breach of contract on 28 May 1987 was $5,467.60. Interest payable on that amount to the date of judgment in the Magistrates Court from 4 June 1987 would have amounted to $1887.45.

46. There ought, in my opinion, to have been judgment for the respondent for $7,355.05.

47. It is, however, before making a final decision in this matter necessary to consider the question of election raised by the appellant. In my opinion, the submission made by Counsel for the appellant fails. There is no suggestion that the respondent proceeded to judgment for damages in respect of the damages it was said to have suffered as a result of the alleged ban by the Building Workers Industrial Union. The damages payable in respect of that ban, had any been payable, would have been plainly in respect of a different remedy from that sought in this action even though it is possible that in the result, assuming the respondent to have been successful against the defendants in the Federal Court of Australia, the amount of damages awarded might have been the same or calculated on the same basis. But this did not happen. The respondent obtained only an interlocutory order which had the effect of preventing the proposed bans from being imposed. The respondent did not pursue both remedies to judgment and could not, therefore, in my opinion be said to have exercised an election. See the general discussion of the subject by Jordan CJ, in O'Connor v S.P. Bray, Limited (1936) 36 SR (NSW) 248, particularly at pp 257-265.

48. In my opinion, therefore, the appeal should be allowed in part and there should be substituted for the judgment delivered by the learned Magistrate on 3 May 1989 judgment for the respondent in the sum of $7,355.05. I will hear argument on the precise order or orders I should make having regard to my findings and on the question of costs.