BMD Major Projects Pty Ltd v Victorian Urban Development Authority [2009] VSCA 221

BMD Major Projects Pty Ltd v Victorian Urban Development Authority [2009] VSCA 221 - VSCA 2009 case summary — Zoe

[32]

A contour plan of the quarry, entitled 'Locality Plan, drawn October 1969[5] showing surveyed existing conditions as revealed by a 'face survey' carried out on 21 October 1969. It revealed that, at that time, there were two benches in the south west corner of the major quarry, one at a reduced level relative to datum ('RL') of RL 100 feet and the other of RL 133 feet. The plan also revealed the overburden dump faces as they were at that time and that, while the major section of the quarry was still being worked, the area of the quarry called the cul de sac area had not yet been opened.
A contour plan of the quarry, entitled 'Working Plan', drawn April 1970.[6] Like the Locality Plan of October 1969, it showed the surveyed existing conditions as revealed by the 'face survey' carried out on 21 October 1969 but in addition also showed estimated 'ultimate conditions' (scil. intended further excavation) revealing that the intention was that the main quarry area would have the two benches of RL 133 feet and RL 100 feet removed and the quarry would be excavated to its full extent against the southern boundary as far as the statutory buffer zone.
A contour plan of the quarry, entitled 'Working Plan - Revision 1', drawn 9 May 1972'[7] representing the surveyed faces updated to 5 November 1971 'when operations were temporarily suspended' and also 'Proposed excavation revised a/c permit 55611- 200ft buffer zone southern boundary'. It showed that the proposed excavation of the benches at the south western corner of the quarry was to be decreased so as to leave a 200 foot buffer zone (as opposed to the 100 foot buffer zone previously proposed) but also that a portion of the two benches in the major quarry had been excavated and thus wholly removed apart from the southwest corner.
A contour plan of the quarry, entitled 'Working Plan - Revision 2', drawn 13 September 1973,[8] representing the surveyed faces updated to 26 July 1973. It showed that, by that stage, a large proportion of the two benches at the south western corner of the quarry had been excavated down from RL 100 feet and RL 130 feet to between RL 70 feet and RL 73 feet; that most of the main quarry had been fully excavated to depths centring around RL 66 feet; that excavation work had begun on the cul de sac area; and that large dumps or stock piles of crushed stone had been dumped back onto the floor of the main quarry.
A contour plan of the quarry, entitled 'Working Plan - Revision 3', drawn 20 March 1974,[9] representing the surveyed faces updated to 5 March 1974. It showed that, by that stage, the south western corner of the quarry had been entirely excavated - meaning that the two benches at the south western corner of the quarry had been eliminated - and that the area had been refilled with stock piles of uncrushed stone.
A contour plan of the quarry, entitled 'Working Plan - Revision 4', drawn 24 July 1975,[10] representing the surveyed faces updated to 4 June 1975. It showed that the position then remained very much as it had been as at 20 March 1974, apart from some redistribution of stockpiles or dumps of overburden throughout the quarry and improved battering of overburden dump faces.

[41]

In the first letter dated 14 June 1972 Albion Reid acknowledged that a permit had been, in principle, granted to reopen the quarry after work was suspended in November 1971. In fact the licence was not issued until 12 October 1972. The new License allowed the removal of 250,000 tons (approximately 90,000 m³) of residual basalt rock in the South West Corner of the quarry and 2.63 Million tons of basalt, salamander and overburden from a Proposed New Pit on the southern boundary of the quarry. The extent of these proposed excavations is shown on Figure 3.1, Extract of Working Plan (Rev 1). It should be noted that the floor of the pit is shown in the period November 1971 to October 1972 as 67 ft MMBW datum (RL 20 m AHD). AHD is Australian Height Datum. This reflects the contours shown on the Plan of Maximum Extent of Excavation (Figure 2.3) provided as tender information which was developed from aerial photographs.

The removal of the residual basalt in the South West Corner completed the maximum southerly extension of the quarry under the old permit which allowed a Statutory Buffer zone of 100 ft (30m) to the fence line. The Proposed New Pit to the east required a new MMBW planning permit (No 5561) with 200 ft (60m) Statutory Buffer zone to the southern fence line. The proposed new pit has been referred to on site during the Project as the Cul-de-sac area.

The second letter dated 28 September 1973 refers to the excavation of the rock in the South West Corner as being completed in the required time (that is, between October 1972 and July 1973) and that it included additional rock in the base of the quarry that was not included in the original estimate (June 1972 letter & table). The extent of works at July 1973 is shown on the Working Plan (Rev 2) from which a portion has been extracted for this report as Figure 3.2, Extract of Working Plan (Rev 2). It should be noted on the drawing that the floor of the pit was being excavated down to RL 56 ft (RL 16.5m AHD) while the southern and eastern faces of the South West Corner excavation had been backfilled with stockpiled material. The extent of the basalt recovery is clearly shown in the east-west Section C-C and the north-south Section B-B presented on Figures 3.1 and 3.2.

... My best interpretation of the section derived from the quarry drawings is that excavation could have been taken down to RL 16 m over the floor in the southern stockpile area ...

I am of the opinion that the reasonable contractor would have taken this Quarry file as a prized source of data with which he could reduce his risk with a small investment in time. The file is small with a number of similar Work Plans providing a visual story of progress. The two letters mentioned above confirm the critical data about the timing and extent of the excavations in the South West Corner. The quality of the plans is excellent and the fact that they are in imperial dimensions and to a MMBW (Imperial) survey datum is immaterial to an engineer who should be familiar with a wide range of conversion factors. The MMBW survey datum was used for 87 years prior to metrication to AHD in 1971 and the conversion is used regularly in Melbourne on any project requiring interpretation of archival material.

[45]

We had tendered this morning, perhaps earlier this afternoon, a copy of the so-called Boral file? - - - Yes, that's true.

Who gave that document to you? - - - I would have to say that I cannot clearly remember who gave that document to me, It was either Paul Fogarty or Terry Lynch.

And you understood that that was a document that had been obtained from the internal resources of BMD and was not common to other tenderers? - - - That's true, BMD's involvement in this particular job, as I said before that Mr Tim McMahon brought this job to BMD, I believe it was because of or through BMD's relationship with Boral, particularly in the subdivision side of our work, and that file was offered up by Boral to us to see if it was any help in our tender preparations ...

Can I take you to ... the letter dated 28 September 1973 [in the Boral file]? - - - Yes.

Second paragraph, did you read that paragraph at the time of tendering? - - - I don't recall definitely reading that paragraph, no.

Well, it talks about there being removal of the last remnants of stone in the old quarry which includes that in the southwest corner which was removed within the stipulated time? - - - Yes, it does.

So it is clear that there was continuing work going on on the work faces in this quarry referred to in correspondence and as we will see in a moment shown in the drawings, is that right, disclosed by this correspondence? - - - It talks about - yes, this one talks about work that has been done, yes.

Now, I want to take you to the drawings, Mr Tuttiett. You said that you had examined the drawings during the tender period, or was it overviewed them? - - - I overviewed the drawings during the tender period.

Did you take them out of the file and open them up on your desk? - - - Yes, I did.

...

Now, this drawing [the 'Locality Plan, drawn October 1969][15] is dated October 1969? - - - Yes, it is.

It is just simply headed, locality plan? - - - Yes, it is.

...

And the scale of the drawing is one inch in 200 feet? - - - That is correct, yes.

You are familiar with Imperial measurements, I take it? - - - I am familiar with, I haven't used them in engineering terms, but I am familiar with them, I know what a foot is, yes.

...

And it is apparent from this drawing, is it not, that whilst the major section of the quarry is still being worked, the cul de sac area hasn't yet been opened? - - - That's correct, yes.

Can I take you to the ['Working Plan', drawn April 1970].[16] - - - Yes, I have that.

And this drawing has been prepared showing the extent of the proposed new pit on the southern boundary, and the extent to which the old pit is intended to be worked, and the areas are denoted by straight dash lines coloured grey? - - - The estimated ultimate condition, and that relates to quarry face, yes.

In the main quarry area I suggest to you that would have told you upon examination of this plan that the intention was that the main quarry area would have the two benches we have referred to earlier at 100 and 133 feet above the datum removed and excavated to its full extent against the southern boundary as permitted by the statutory buffer zone? - - - Yes.

And did you note that when you examined this file in your tender period? - - - I did not examine it to that depth.

Can I take you to [the drawing entitled 'Working Plan - Revision 1', drawn 9 May 1972'].[17] Have you got that open? - - - Yes.

...

Do you see the cul de sac extent of excavation has been decreased so that it is now 200 feet rather than 100 feet from the southern boundary, and the extent of excavation is noted in the same grey dotted ones? - - - Yes, yes, I can see that.

And it is readily apparent, isn't it, that a portion of the bench or the two benches in the major quarry has been removed save in respect of the southwest corner? - - - Sorry, I would have to refer back to the other - removed since the last drawing?

I believe so? - - - Sorry?

Yes? - - - The cul de sac face there is shown as the statutory buffer zone of 100 feet, on this on it is 200 [f]eet, yes, that is correct.

There are two benches shown in the major quarry areas, one at 100 feet and one at 133 feet. I am suggesting to you that that bench has been substantially - sorry, the top bench has been substantially excavated leaving one bench at 98 feet, and it has been substantially removed in the southeast corner of the major quarry leaving the southwest corner with a bench - - - ? - - - So the 98 level has been removed in the southeast corner of that main excavation.

Yes? - - - And it is still there in the southwest corner, that's what that drawing purports to tell you.

Did you open each of these plans and place them on top of each other in chronological order so as to look at them? - - - No, I did not.

...

Can I ask you to go to [the drawing entitled 'Working Plan - Revision 3', drawn 20 March 1974,[18]]?

Yes? - - - Yes, I have got that.

I suggest to you that the southwest corner has now been excavated entirely, and what is in that area is fill? - - - Section CC?

Shows a large overburden dup to a height of 129, 131, 123, is that right? - - - yes, that's what is depicted on this drawing.

I suggest you, Mr Tuttiett, that wasn't too difficult an exercise for an engineer to divine from those drawing? - - - No, that's quite true.[19]

[73]

The test to determine what BMD should reasonably have anticipated is to be judged by what a competent and suitably qualified contractor would expect to encounter by way of physical conditions in the execution of the works: Ryde City Council v Transfield Pty Ltd.[29] Mr Clark's opinion was that a reasonable contractor would (after examining the Boral file) have been alerted to the possible differences in the natural surface level from those shown on the maximum extent of excavation plan. Mr Raisbeck, on the other hand, an experienced geotechnical engineer also called by VicUrban, said in cross-examination that a contractor would need to have had reasonable expertise in geotechnical engineering or to have hired a technical engineer to analyse the contents of the Boral file, to have found something of geotechnical significance. He said that a contractor looking at the Boral file would have been unable to find something of geotechnical significance but that a contractor who engaged a geotechnical engineer to look through the file may have found something of geotechnical significance. He accepted that the reason that two engineers with knowledge of earthworks projects (namely, Messrs Waterson and Hawkins) would not be expected to find anything of geotechnical significance in the file was because they were not geotechnical experts. The material in the Boral file itself does not contain information in a form that, without more, would make a reader realise or apprehend that the information on the plan of maximum extent of excavation was wrong or needed to be re-examined. The evidence of Mr Raisbeck is, in my view, significant as an expert in the relevant field of expertise and knowledge giving evidence to the effect that a reader of the information in the Boral file would need to have that expertise and knowledge to realise the potential significance for an earthworks contractor of the information in the Boral file. It is telling that a person with specialised knowledge (Mr Raisbeck) believed that it is necessary to have that expert knowledge to appreciate and evaluate the significance for an earthworks contractor of the information in the Boral file. VicUrban was not able to point to any particular fact or matter on the face of the Boral file which would cause a non-expert in the position of a contractor to seek the assistance of a geotechnical engineer. As against this BMD had information which pointed to different natural surface levels from those actually encountered. With all the caveats and qualifications which that information may have had, it is information which had probative value to an earthworks contractor: it was detailed, professionally prepared and honestly proffered by VicUrban as being of assistance. Accordingly I do not consider that BMD should reasonably have anticipated the information which might be found in, or deduced from, the Boral file after expert investigation. More particularly, I do not consider that BMD should reasonably have anticipated that the natural surface levels were different from those shown on the maximum extent of excavation plan even allowing for the qualifications of accuracy and cautions in the materials and reports conveyed to them to assist them in their tender.

[204]

It is not necessary for me to consider whether, in any event, VicUrban is now estopped from relying upon strict compliance with the contract. However, if it were necessary for me to do so, I would find that it was estopped in respect of the description of the extent of the latent condition. A meeting occurred on 6 August 2002 between Mr Waterson, representing BMD, and Messrs Taber and Leonard, representing VicUrban. Mr Taber was VicUrban's General Manager and General Manager of Business Operations, and Mr Leonard was VicUrban's Constructions Operations Manager. Mr Waterson made notes of the meeting and recorded Mr Taber as assuring BMD, in effect, that the strict terms of the contract were to be put aside (at least in respect to the issues then under consideration). Mr Waterson's notes were prepared to report to, and to inform, others within BMD and I accept the notes to have been a faithful statement of his recollection of the meeting. The notes were contemporaneously made and were not undermined by the evidence of the other participants at the meeting or by the cross-examination of Mr Waterson. Mr Taber said that he had called the meeting and that one of the reasons why he had done so was to invite a renewed spirit of co-operation after some complaints had been made by BMD senior management and hopefully to get improved co-operation throughout the site. Another reason given by Mr Taber was to emphasise to BMD that the quality criteria in the specification was absolute and would not be compromised. His evidence concerning Mr Waterson's contemporaneous notes was certainly not that of rejection of accuracy or such as to cause me to doubt that Mr Waterson's was a faithful account of the matters recorded and conveyed. I am confident that Mr Waterson would, in an internal BMD memorandum, have been more forthright and blunt if the meeting had gone less favourably than he recorded. I am also satisfied that the outcome of the meeting, and the assurances given to BMD through Mr Waterson in the context of the meeting, were relied upon by him and by BMD. It would be wrong in such circumstances for VicUrban to rely upon strict compliance with the notification provisions if I had not found that notification had been given beyond any strict boundary of the Southern Stockpile.[37]

[208]

Further, in or about August, 2002, the Defendant advised and represented to the Plaintiff that the Defendant would not deduct liquidated damages in relation to the Contract and would not strictly seek to enforce the Contractual provisions in relation to time, and requested the Plaintiff to focus its activities upon the quality of the works being performed.

Particulars

On 6 August, 2002, at a Site Meeting between Rob Taber (of VicUrban) and Chris Leonard (VicUrban's Operations Manager) on behalf of the Defendant and Terry Waterson on behalf of the Plaintiff, Taber told Waterson that 'all we (VicUrban) are interested in is quality, quality is of the essence and that we (VicUrban) cannot afford to fail on this project. VicUrban will put the Contract in the bottom drawer. Time and cost issues for BMD can and will be sorted out. VicUrban has never imposed liquidated damages and never will. Let's get together with Chris Leonard and work through the project.' Taber further told Waterson that the spirit of the administration of the Contract and the performance of the works was to be that if an issue arose BMD would promptly raise it with the Superintendent who would then be presented with BMD's alternative solutions.

In consequence of the statements and representations by VicUrban, BMD focused its activities on completing a quality project, whilst endeavouring to resolve outstanding issues with the Superintendent in a reasonable manner, and was not concerned to submit formal delay notifications in accordance with the Contract to avoid being time-barred from later claiming delay costs and/or being subject to the deduction of liquidated damages.

In the circumstances, if (which is not admitted but is expressly denied) the Plaintiff failed to comply with Clauses 35.5, 35.5A and/or alternatively 46.1 of the Contract in relation to the giving of Notices for extension of time, the Defendant is precluded and estopped from relying upon the Plaintiff's failure to comply with any of the times for the giving of Notices required by Clauses 35.5, 35.5A and/or alternatively 46.1 of the General Conditions of Contract in respect of claiming extensions of time for the purpose of delay claims and/or deduction of liquidated damages.

[226]

There was, so the argument went, no actual adjustment of the Type B and Type C levels on the site. That may be accepted as common between the parties (as was contended) but it does not follow that there is thereby demonstrated a causal link between the latent condition and the placement of Type A material. Indeed, it is pertinent to recall that the Type A material placed overall was less than had been contemplated at the outset. The logic relied upon by BMD would equally support a conclusion that the maintenance of the Type B and Type C levels were also made possible by a reduction in the Type A material consequent upon the latent condition: that is, that a causal link between the latent condition and the Type B material can be seen from the fact that the level of Type B was able to be maintained.[42]

BMD's contention was put, perhaps differently, in part of Mr Waterson's written witness statement when explaining the impact of the Superintendent's directions concerning maintenance of the Types B and C layers and the reduction of the Type A level. His conclusion was expressed by saying:

As all other types of material could be sourced from the over burden within the drawings, the effect of any additional excavated material in the Eastern Stockpile would be to directly increase the volume of material to be processed and placed as Type A capping material. That is, if the material won from the additional excavation had not existed, then the Type A material actually processed and placed by BMD on site would have been reduced by that volume. If the material did not exist, BMD would not have needed to place it as Type A.

These assertions by Mr Waterson of consequences and conclusions (assuming them to be admissible) do not detract from the proposition that the lowering of the capping layer permitted the excavated material to be used as Type B or Type C material and, therefore, of establishing a sufficient causal link between any over excavation and the laying of the material as either Type B or Type C material. In my view the temporal connection for which VicUrban contends is certain and is a more reliable guide for the determination of the value of any over excavation. Accordingly I accept VicUrban's contention that the rate to be applied to this claim is that referable to the Type B material, namely $4.41 per cubic metre, producing a figure of $191,446.92.[43]

[280]

The written representations relied upon by BMD do not justify the conclusions it wishes to draw from them. A fair reading of all of the documents contain ample warnings about the limited nature of the information supplied and indications about the value to prospective tenderers of the information provided to the effect that volumes and levels depicted were 'approximate' and 'estimates'. BPD's letter seeking expressions of interest referred to the bulk earthworks plan which showed the 'approximate' stockpiled material and an 'estimate' of the volume of material in each of the zones. It referred to the existing conditions plan which showed the extent of the quarry at the 'termination of works in mid 1970'. It referred to the finished surface contours plan which showed the 'approximate finished surface level'. The draft contract provided to BMD on 22 May 2001 contained an express and clear notice from VicUrban that the particulars set out in the brief were for the 'guidance' 'only' of intending registrants and, more importantly, that '[a]ll descriptions, quantities, references to condition and other details are given in good faith and believed to be correct' and immediately went on to state that '[n]o intending registrant should rely on anything contained in this brief without satisfying themselves by inspection or otherwise as to the correctness and completeness of the information provided, and, if appropriate, seeking other advice.' Pre-tender documentation contained clear statements that VicUrban did not warrant the accuracy of the information and that BMD should make 'any enquiries and investigations necessary to satisfy themselves of the accuracy of the information'.

Part of the material on the disk initially supplied to BMD revealed that much of the information relied upon by BMD was sourced by means that may not have been entirely reliable. Thus, for example, the statement on plan 6330 that the topographical features had been derived by the means of aerial photography and that the data was 'suitable for overall planning only, and should not be used for any other purposes'. The plan also stated that critical dimensions measured from digital data must be confirmed by BPD, that some of the surface areas had been derived from 1989 aerial photography data and lake depth soundings each supplied by others that the surface area demarcated in a particular way on the ground sections was a preliminary design surface for the south-west corner of the site and was 'subject to change'.

BMD contends, and I accept, that exclusionary and disclaimer clauses cannot override the statutory prohibition against misleading and deceptive conduct or prevent the grant of appropriate statutory relief where loss or damage is, as a matter of fact, caused by contravention of s 52: Bowler v Hilda Pty Ltd; Downey v Carlson Hotels Asia Pacific Pty Ltd. However, as BMD also contends (and I accept), such 'disclaimers' can be effective 'if the clause actually has the effect of erasing whatever is misleading in the conduct' (Benlist Pty Ltd v Olivetti Australia Pty Ltd; see also Downey v Carlson Hotels Asia Pacific Pty Ltd.) In other words, such words will be effective if the effect of the disclaimer is to make clear something that, if allowed to remain vague or ambiguous, could have led a person into error. That in my view is the effect which the 'disclaimers' relied upon by VicUrban had. To refer to them as 'disclaimers' may itself be misleading because, in my view, they are more in the nature of clarification of VicUrban's understanding and beliefs about the information which BMD was being told by VicUrban to take into account. The so-called 'disclaimers' are positive information for the benefit of BMD rather than an attempt to disavow liability for what was being proffered for assistance. The context in which this was occurring is also important because the parties intended and understood that a contractor was being asked to assume a risk in undertaking a project and that VicUrban was informing BMD about the extent to which VicUrban was able to be of assistance in conveying information to BMD that might be useful. In that way VicUrban took some care to inform BMD that it needed to ensure that the risk it was assuming was properly evaluated. (citations omitted)

At a glance

Court

Decision date

Before

Source

Judgment (401 paragraphs)

BMD Major Projects Pty Ltd v Victorian Urban Development Authority [2009] VSCA 221 (7 October 2009)

Parties

Legislation Cited (3)

Cases Cited (11)