Bettar Holdings Pty Ltd t/as Hunt Collaborative v RWC Brookvale Investment Pty Ltd [2025] NSWCA 242

What the court decided

Hannas Contracting Services Pty Ltd (Hannas) was engaged by RWC Brookvale Investment Pty Ltd (RWC) to manage its Brookvale development [9]. Bettar Holdings Pty Ltd, which trades as Hunt Collaborative (Hunt), is a builder that took part in a tender run by Hannas and then put forward a construction management proposal [10], [49], [53]. On 27 October 2023 Hunt sent Hannas a letter setting out commercial terms [61]. The letter asked Hannas to confirm its intention to engage Hunt [62]. At 2:47 pm that day Hannas replied that it agreed to "the commercial conditions noted in your attached letter of offer" and that it intended to execute a contract once a draft construction management contract was agreed [75].

After 27 October Hunt did work at Hannas' requests [91]. The negotiations failed, and by 11 December 2023 any hope of agreement had gone [108]. On 21 December 2023 Hunt sent a progress claim for $232,472 (including GST), expressed to be made under the Act [114]. The claim was sent to Hannas, not to RWC itself [148]. No payment schedule was provided within the time Hunt said applied, and Hunt sued RWC in the District Court for the claimed amount as a statutory debt [3], [14]. The primary judge, Cole DCJ, dismissed the claim and, in a separate judgment, ordered Hunt to pay RWC's costs of the proceedings on the indemnity basis [3], [150].

Hunt's grounds 1 to 4 went to whether there was a construction contract; grounds 5 to 8 went to the payment claim, its service and RWC's liability; and ground 9 went to costs [4]. McHugh JA gave the principal reasons, with which Bell CJ and Kirk JA largely agreed [1], [2], [3]. Bell CJ agreed with him on grounds 1 to 4 and 7 to 9 and with his orders, but did not express a view on grounds 5 and 6 [1]. Kirk JA agreed with the orders and with McHugh JA's reasons on grounds 1 to 4, 8 and 9, but expressed no view on the agency issue or on grounds 5 to 7 [2].

Hunt accepted that it needed to show that RWC had given Hannas actual authority to contract for it [17]. McHugh JA, with whom Bell CJ agreed, found that Hunt had not proved that authority on the balance of probabilities [1], [37]. In his view, appointing Hannas to manage the development did not of itself carry authority to make a contract of the size and importance alleged [24]. Because the question was finely balanced, and it was unclear how far it had been disputed below, he went on to consider the first set of grounds on the assumption that Hannas did have that authority [37].

Hunt's primary case was that an "early works contract" had been made by about 27 October 2023, with a broader formal contract to be substituted later [39]. McHugh JA identified the central question as whether, viewed objectively, the parties' communications and conduct showed an intention to be bound immediately [48]. Hunt's own letter had recorded Mr Hanna's wish to "keep it formal" [62], [63]. McHugh JA held that the 2:47 pm email went no further than accepting some commercial terms and stating a present intention to contract once the complete terms were settled [82]. On McHugh JA's reading, the email's statement that it should give Hunt "enough" assurance signalled that no contract was being offered [79]. The absence of agreement on all terms was not fatal, but it told against an intention to be bound by 27 October 2023 [84].

In McHugh JA's view, the later conduct as a whole was also inconsistent with any contract [87]. On 31 October 2023 the parties had not agreed even in principle on retention and liquidated damages [93]. On 1 December 2023 Hunt's general manager asked Mr Hanna to "tell me immediately to stop" if there was an issue [104]. McHugh JA held those words inconsistent with Hunt having any right, contractual or otherwise, to hold RWC bound [105]. The primary judge's finding that no contract was formed was upheld [116].

The estoppel grounds failed for substantially the same reasons [119], [122], [123], [127]. On appeal Hunt put the promise as one that it could push forward and would at least be paid a reasonable price, but McHugh JA held that the email conveyed no promise to pay [125]. Such an estoppel could in any event assist Hunt under the Act only as an "other arrangement" [126].

The Act's definition of "construction contract" extends to an "other arrangement" under which one party undertakes to do construction work, or supply related goods and services, for another [12], [128]. Hunt's argument on that limb faced several difficulties, the first being that it was outside the pleading, which put every basis as a common law contract or an estoppel preventing RWC from denying one [131], [133]. McHugh JA held that a party relying on the extended definition must plead the material facts said to make up the non-contractual arrangement, including the basis on which it says it undertook to do the work or supply the goods and services [135]. Hunt's reformulated estoppel would not meet that requirement, because it did not say, even in conclusory terms, that Hunt had undertaken to carry out any work [136].

The court did not decide between Lendlease Engineering Pty Ltd v Timecon Pty Ltd, which required a legally binding obligation, and Crown Green Square Pty Ltd v Transport for NSW, which required a concluded state of affairs with some reciprocity but not necessarily binding obligations, or whether they truly conflict [138], [139], [140]. McHugh JA said that, whichever test applied, there was no "other arrangement" on the pleadings [140]. He did not decide whether facts supporting a quantum meruit claim could form, or be part of, an "other arrangement" [141].

Because grounds 1 to 4 failed, the appeal against the dismissal of the claim had to be dismissed [143]. The remaining grounds on the claim therefore did not need to be decided [144]. Hunt's claim listed, for each person, the role, the time spent and the rate [146]. McHugh JA observed that there was "much to be said" for the view that the claim sufficiently identified the related services for the purposes of section 13(2)(a) [147]. Neither Bell CJ nor Kirk JA expressed a view on grounds 5 and 6 [1], [2]. Although it was unnecessary to consider these grounds, McHugh JA, with whom Bell CJ agreed, said that ground 7 was not made out because the claim was sent to Hannas and Hunt had not shown that Hannas was RWC's agent to receive it [1], [144], [148]. Kirk JA expressed no view on ground 7 [2]. McHugh JA said that ground 8, which was premised on success under the earlier grounds, was also not made out [149].

The appeal succeeded on costs. The primary judge had ordered indemnity costs of the whole proceedings on the basis that the claim was doomed to fail [152]. McHugh JA held that she had not explained why the claim was "always obviously lacking in merit", and that its failure was "the start of analysis on the issue, not the end of it" [154]. That was House v The King error, either or both as a misdirection or as a failure to give adequate reasons [154]. Re-exercising the discretion, he was not persuaded that the claim should not have been brought [155]. He said there was much to be said against the first of the primary judge's three reasons, and that the points raised by the other two were fairly arguable [155].

The remaining question was whether RWC's Calderbank offer justified a departure from costs on the ordinary basis [156]. That offer, made on 25 July 2024, was to pay $33,000 [157]. The test was not whether Hunt would have done better to accept, but whether, its claim not being unarguable, it was unreasonable in all the circumstances not to accept [157]. McHugh JA held that it was unreasonable for Hunt not to accept the offer [158]. RWC's letter had explained the claim's defects in detail; the evidence on the main question was largely documents recording communications to which Hunt was a party; and the 14 days allowed for acceptance were sufficient [158]. As Hunt's claim was all or nothing, the offer was a real compromise and not a mere invitation to capitulate [158].

Hunt must now pay RWC's costs at first instance on the ordinary basis up to and including 24 July 2024, and on the indemnity basis from 25 July 2024, the date of the offer [157], [160]. The appeal was otherwise dismissed, and Hunt was ordered to pay the costs of the appeal on the ordinary basis [160]. Hunt had otherwise failed, and there had been very little argument on ground 9, the only ground on which it succeeded [159].

Why it matters

The decision shows that a claim for a statutory debt under the Act can fail at the threshold question of whether there was a construction contract. An email accepting commercial terms while stating an intention to sign a contract once a draft is agreed may, read objectively, show no intention to be bound immediately, and later conduct can confirm that reading. A claimant relying on an "other arrangement" must plead the material facts of a non-contractual arrangement, including the basis on which it undertook the work, and the court left open which of two differently expressed tests of an "other arrangement" applies.

On costs, the decision separates a claim that fails from one that was doomed to fail. It also shows that, where the offeror has explained the claim's weaknesses and the material is largely documentary, an offer that is a real compromise of an all or nothing claim can support indemnity costs from the date of the offer.

Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.