Construction Law Memorandum of Advice: TUS vs Broadway Builders

This memorandum of advice addresses the legal issues arising from a construction project tender awarded to Broadway Builders Pty Ltd by the Technical University of Sydney (TUS). The report focuses on contract and tort law within the Australian construction sector, drawing from case law and literature reviews. It analyzes the legal standing of the agreement, the justification for claims against Broadway Builders, and the assessment of damages. The memorandum examines issues such as negligence, vicarious liability, product liability, and breach of statutory duty. It also assesses whether the initial agreement was legally binding, and evaluates the potential for claims based on negligence, particularly concerning the failure to secure a sandstone block. The report includes an analysis of damages assessment, focusing on the principle of 'Resitutio integrum' and the potential for liquidated damages and variation claims.

Running head: MEMORANDUM OF ADVICE
MEMORANDUM OF ADVICE
Name
Institution
Professor
Course
Date

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MEMORANDUM OF ADVICE
MEMORANDUM OF ADVICE
1. PRELIMINARY ANALYSIS
The Technical University of Sydney (TUS) has requested for me to draft a memorandum of
advice in line their construction of lecture halls to be used during the summer. The report
addresses legal issues that arise concerning the evaluation, and implementation of the tender
awarded to Broadway Builders Pty Ltd. The university has requested advice on the legal steps to
be taken in order to bring the school to the situation before tort. The memorandum has focused
on the law of contract and tort as per the building and construction sector, strictly the Australian
Construction law. The report borrows literature review from similar cases in history concerning
tort law and contract law. The opinions expressed in this memorandum of advice are my own.
2. Literature Review
The law of tort is the law of wrongdoing and it mainly deals with the conduct of an individual or
party that causes harm to another person, financial interests and proprietary interests1. The law of
tort provides remedies and allocate responsibility for any careless conduct that leads to harm.
However, the definition of tort has always been challenging because of its sheer breadth.
According to Uff2 a tort is a “civil wrong independent of a contract; or as a breach of a legal duty
owed to persons generally”. On the other hand, Armes3 defines tort as “legally wrongful acts or
omissions that interfere with some legal right of the complaining party.”
1 Martin, Elizabeth A. A dictionary of law. OUP Oxford, 2009.
2 Uff, John. Construction law. London: Sweet & Maxwell, 2005.
3 Ames, F. B. "How Far an Act may be a Tort Because of the Wrongful Motive of the Actor." Harv. L. Rev. 18
(1904): 411.

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MEMORANDUM OF ADVICE
Proof should always be provided to establish liability in tort. The proof must contain legally
recoverable losses. Unlike contract law, there is a hierarchy of losses, for example, a defect may
cause injury to an individual or persons, two, cause of damage to property, three, and the defect
may also cause some part of a product being damaged or four reducing the quality or value of the
product.
The existing contract must be able to cover other defects besides defect caused to a person or
persons. Some examples of elements of tort include negligence, which is the most important
element of tort and a focus in this case analysis. Negligence forms the cause of action in a case
involving tort due to its wide coverage covering liability in any other applicable tort4. Negligence
involves causing harm or damage to a person or persons in a manner that is proof of carelessness.
Therefore, an individual is required to act responsibly by showing the duty of care, and breach of
duty of care. Duty of care arises from different statutes or acts such as the occupier’s Acts,
defective premises act, Highways Act as well as the common law. Goods and materials also
benefit from the duty of care especially materials that are proven to be dangerous for use.
Citing from the Defective Premises Act of 1972, “any person taking on work for the provision of
a dwelling, owes a duty to its employer and to every person who acquires an interest whether
legal or equitable in the dwelling; to see that the work which he takes on is done in a
workmanlike or, so as the case may be, professional manner, with proper materials and so that as
regards that work the dwelling will be fit for habitation when completed5.” Therefore, an
occupant has a right to take action against any individual that has taken up work to construct or
design a building including consultants, suppliers, and subcontractors. The Defective Premise
4 Weinrib, Ernest J. "The Monsanto lectures: Understanding tort law." Valparaiso University Law Review 23, no. 3
(2011): 485-526.
5 Morrell, John, Richard Foster, and Gary Hay. Local authority liability. Jordans, 2015.

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MEMORANDUM OF ADVICE
Act and the duty of negligence embody all manners of care through work and selection of
materials. There is a limitation to this Act whereby it is limited to residential places or premises,
not commercial property. Secondly, the time of limitation expires after six years after the work
was completed.
Vicarious Liability6 involves an act where an employer is responsible for the acts of her
employees as long as these acts are done at the time of employment. A ‘Salmond Test’ is
normally done to establish the vicarious liability (Graham Barclay’s Oysters v Ryan (2002). That
is, vicarious liability must be attached to any wrongful acts directly authorized by the employer,
or any wrongful acts or unauthorized modes of carrying out authorized acts. The Civil Liability
Act of 1978 also called as the Contribution Act is applicable in the event that the Salmond test
results are positive (Bugge v Brown (1919) and Deaton's v Flew (1949)7. Occupiers are
persuaded under the law of tort to secure their property. Therefore, vicarious liability applies to
those acts of negligence carried on the premises. The case of Drysdale v hedges demonstrates the
extent of negligence for vicarious liability.
There are different sources of employers’ liability and they include; statutory duties, vicarious
liability and delegable duties8. Employers in exercising their delegable duties must use
reasonable care to provide adequate materials, the right systems of supervision and competent
staff. Therefore, any breach of the duties mentioned constitutes a claim. An individual must not
have been negligent at the time of the damage otherwise the claim will be reduced.
6 Giliker, Paula. Vicarious liability in tort: a comparative perspective. Vol. 69. Cambridge University Press, 2010.
7 Butler, Des. Employer liability for workplace Trauma. Routledge, 2018.
8 Deakin, Simon F., and Gillian S. Morris. Labour law. Hart publishing, 2012.

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MEMORANDUM OF ADVICE
The product liability offense is guided by the Consumer Protection Act of 1987 that allows
individuals to file a claim in order to be compensated for acts due to personal injury or damage to
property. These acts are normally caused by dishonesty of the provider irrespective of their
motive. The tort of deceit allows an injured individual to file a claim.
Breach of statutory duty is a criminal offense punishable under the Civil Act. Some of the Acts
under this breach include the Defective Premises Act, Health and Safety at Work Act of 1974,
and Occupiers Liability Acts9. There are five factors that can lead to a breach of duty claim and
they include; “where the act does not preclude civil liability for breach of its provisions,
individual must come from the category of persons that the act protects, loss or damage suffered
is of a type intended to be prevented under the statute, breach of relevant statutory duty and
balance of probabilities that loss, damage or injury was caused by the breach of statutory duty”10.
The compensation Act of 2006 dictates the terms of claim whereby the defendant is expected to
take certain steps to meet a standard of care in preventing a desirable activity from happening
and discouraging persons from taking functions as per desirable activity.
3. Is the agreement legally binding?
The conduct of parties prior to formalization of a contract determines if a contract is legally
binding. The case of Masters Cameron [1954] 9 CLR 353 determined by the high court of
Australia outlines some of the mistakes that may make a contract not binding. In the event that a
Heads of Agreement is used, it must be in writing and not just recital for it to be binding. It does
9 Hedley Byrne & Co Ltd v Heller & Partners Ltd (1963, 1964).
10 Wilkinson-Ryan, Tess. "Do Liquidated Damages Encourage Breach-A Psychological Experiment." Mich. L.
Rev. 108 (2009): 633.

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MEMORANDUM OF ADVICE
not necessarily represent a final binding contract since it only states that terms are a transition to
a formal agreement that is binding. On September 7th 2016 the NSW Supreme Court made a
decision on the case involving Anor v Norman and Anor; Centre Capital (Newcastle) Pty Ltd.
The parties’ HOA was loosely worded yet to be used as a foundation for entering into a joint
venture. At liquidation, all suites placed left them losers since the contract was not binding. The
TUS submission of tender for evaluation contained other clauses merely stated. The clause stated
that the ‘no contractual relationship exists between TUS and the tenderer as per the evaluation of
the tender.
Hey Market Pty Ltd qualified for the tender because it was the lowest bidder but the contract was
not binding and TUS was free to choose a contractor of their choice in this case Broadway
Builders Pty Ltd. Broadway further indicated that it was not prepared to accept liability for
consequential loss. This is not binding in a court of law even if it was written in the Heads of
Agreement. It is merely an agreement of negotiated terms upon which a contract is executed11.
4. Is Tricia justified in applying for a claim against Broadway Builders Pty Ltd?
The tort of negligence allows Tricia to file a claim for compensation from Broadway Builders
Pty Ltd. The plaintiff or claimant, Tricia must have suffered an injury due to negligence as a
damage caused by Broadway Builders Pty Ltd. The case of Harringon v Stephens [2006]
CLR52; 226 ALR 391 states a standing principle that “damage is the gist of a negligence action”.
In this case, the cause of action is complete since Tricia suffers harm to the extent of being
hospitalized alongside two other persons12. The damages include the duty of care owed to Tricia.
11 Masters v Cameron (1954) 91 CLR 353
12 Curran and Another v Northern Ireland Co Ownership Housing Association Ltd and Another(1986, 1987).

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MEMORANDUM OF ADVICE
Secondly, Broadway Builders Pty Ltd failed to satisfy the standard of care expected of the
reasons by the reasonable person in a similar circumstance. The third is causation, which
includes the actual cause of the harm that was reasonably foreseeable and not remote13.
Broadway Builders Pty Ltd did not secure the three-meter high sandstone block. The sandstone
falls on Tricia who was passing by a public sidewalk below and was seriously injured. It took six
months for Tricia to recover from the injury. Witnesses to the accident include Tricia’s Ex-
husband and professor at the university (Bob) who also suffers Post-traumatic Stress. Similarly,
Pam suffers from the same after learning of Tricia’s accident. Broadway Builders Pty Ltd can be
sued for negligence leading to harm of three individuals and other passersby for failing to secure
the three-meter high sandstone. Tricia has witnessed and a video to help identify and prove to the
court that Broadway Builders Pty Ltd did not secure the footpath hence endangering not only her
life but the life of other passersby. In a case involving Blythe v Birmingham Waterworks Co.
(1986), negligence was established whereby omission to do something which would be done by
any ordinary person and something that a reasonable person would do was established14.
Broadway Builders Pty Ltd, in this case, can use contributory negligence and involuntary
assumption of risk as a defense against the plaintiff who failed to take responsible care for her
safety. This can only reduce damages but still, Tricia has enough evidence to win the case by
proving negligence by Broadway Builders Pty Ltd. A decision was awarded in the case involving
Donoghue v Stevenson (1932) stating the importance of the limiting concept of foreseeability15.
13 Dosi, Cesare, and Michele Moretto. "Procurement with unenforceable contract time and the law of liquidated
damages." The Journal of Law, Economics, & Organization31, no. 1 (2013): 160-186.
14 Harpwood, Vivienne H. Modern tort law. Routledge-Cavendish, 2009.
15 Deakin, Simon F., Angus Johnston, and Basil Markesinis. Markesinis and Deakin's Tort law. Oxford University
Press, 2012.

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MEMORANDUM OF ADVICE
It would be unfair to impose liability on the defendant if persons in the position of the defendant
were not able to generally foresee circumstances of the kind that occurred in this class of
persons.
5. Damages Assessment
The contract between Technical University of Sydney and Broadway Builders Pty Ltd
‘Resitutio integrum’ is the fundamental principle underlying the damages assessment under
common law16. It simply means that the plaintiff must be restored to her position before tort. The
technical University of Sydney before tort had provided the (detailed drawings and
specifications requiring high-quality sandstone, external wall cladding and spacious tiled
balconies with ornamental balustrades after completion of work). In case of any variations,
Broadway Builders Pty Ltd had to submit the variations within two weeks. Any liquidation
damages would attract 1 million dollars every day. However, Broadway Builders Pty Ltd acted
negligently by failing to properly secure the block. The block falls endangering the lives of
passers-by on the public sidewalk. Furthermore, Broadway Builders Pty Ltd used poor quality
sand for external cladding against the specifications by the university. The work was completed
two months later meaning that the Technical University of Sydney missed offering classes
during summer and at the same time missing the commissioning by the royal family visiting at
this time. The technical University is justified to demand payment of liquidated damages.17
Broadway Builders Pty Ltd is not justified to a variation claim since it filed its case after 21 days
16 Appau, Justice Yaw. "Assessment of Damages." Induction Course for Newly Appointed Circuit Court
Judges (2011): 1-8.
17 Eggleston, Brian. Liquidated damages and extensions of time: in construction contracts. John Wiley & Sons,
2009.

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MEMORANDUM OF ADVICE
against the signed clause that indicated 14 days. Furthermore, Broadway Builders Pty Ltd failed
to follow the specifications because the (balconies were 30 cm narrower)18. It went ahead and
altered the ornamental balustrades against the specifications and design of the building.
Generally, the work was shoddy with a great show of negligence most of which as deliberate.
The negligent actions of Broadway Builders Pty Ltd resulted in the purchasing of another hall to
cover for the time-lapse as construction continued. Students needed lecture halls during summer.
If Broadway Builders Pty Ltd had completed its work in time, such expenses would have been
avoided. Later, Technical University of Sydney came to realize that the building purchased was
unsafe for occupation. The consultant structural engineers advised that the design and
construction of the building by Foolhardy Pty Limited were shoddy. It was completed in 2000.
Is the Technical University of Sydney (TUS) justified to place charges against Broadway
University or Foolhardy Pty Limited?
The Technical University of Sydney (TUS) cannot place charges against Foolhardy Pty Limited
The Technical University of Sydney (TUS) is not justified to place Charges against Broadway
University because the time of limitation has already expired. An occupant has a right to take
action against any individual that has taken up work to construct or design a building including
consultants, suppliers, and subcontractors. The Defective Premise Act and the duty of negligence
embody all manners of care through work and selection of materials19. There is a limitation to
this Act whereby it is limited to residential places or premises, not commercial property.
Secondly, the time of limitation expires after six years after the work was completed.
18 Varuhas, Jason NE. "A Tort‐Based Approach to Damages under the Human Rights Act 1998." The Modern Law
Review72, no. 5 (2009): 750-782.
19 Steele, Jenny. Tort Law: Text, cases, and materials. Oxford University Press, 2010.

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MEMORANDUM OF ADVICE
6. Conclusion
The Technical University of Sydney (TUS) will be successful in proofing its case for several
claims against Broadway Builders Pty Ltd as indicated in the memorandum of advice. Similarly,
Tricia will win her case by proofing the extent of negligence purported by Broadway Builders
Pty Ltd. The company has intentionally committed several torts including negligence knowingly
and intentionally. Through tort, once can establish and provide responsive and remedies for
careless conduct that leads to harm against an individual or property. A tort is a civil wrong
independent of contract. It is a “breach of a legal duty owed to an individual by injuring a person
or persons”, causing damage to other property and in the event that a defect results in part or the
whole product being damaged or reduce the value or quality of the same. Those defects that are
recoverable in most cases include those that are allocated to responsibility.