All answers to be submitted using Australian laws and legislation
References to the following topics and cases
– Bellgrove v Eldridge  90 CLR 613 (defective works)
– Tabcorp Holdings LTD v Bowen Investments PTY LTD (defective works)
-GRAHAM EVANS PTY LTD v STENCRAFT PTY LTD – BC9907871 (construction Contract)
(Files have been attached)
VP Investments Pty Ltd (VPI) engaged builder PL Pty Ltd (PL) under a standard form building contract to construct a 6-storey building to provide office space to carry out their business operations. The contract sum was $20,000,000.
The project went very smoothly and VPI was able to move into the facility on time. However over the first few months during summer, management at VPI were getting complaints from staff that the office spaces were too warm and uncomfortable.
VPI approached PL’s project manager Paul about this problem and he said the mechanical systems were all installed properly and there was no need to worry as it was getting towards the end of summer. VPI decided to get their services consultants to check the installation and found that the air handling units installed were not in accordance with the drawings or mechanical specification.
In fact not only were the units a different make, but they were slightly undersized from the capacity stated in the specification.
Paul had an independent engineer check the installation who advised that the installation complied with the relevant standards and codes, and in fact the client had too many people in the building which increased the heat load. This independent report together with the fact PL had been paid out their contract (minus retention) VPI could not get Paul to agree to fix the problem.
VPI decide to obtain advice on this matter and contact you.
Advise VPI what entitlements under contract may be available in respect to defective building works.
Assume the situation in Question 1 occurred (the mechanical system was defective), and on inspection of the installation it was found the work was carried out by PL correctly and in accordance with the drawings and specification.
Consider the issues, and provide advice to VPI on their possible rights under contract and relevant legislation.
Assume after investigation of the mechanical system by an independent engineer determined the design of the system carried out by an engineer engaged by VPI was inadequate, as was the materials and workmanship provided by PL.
Provide advice to VPI based on this scenario.
If the defective work identified in Question 1 was carried out under a domestic building contract, what considerations would you have to take into account when providing advice to your client.
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